ITEM 1. BUSINESS
General
American Public Holdings, Inc. (the "Company") is a Mississippi corporation organized on December 21, 1995 by American Public Life Insurance Company ("American Public Life"), also a Mississippi corporation. The Company was formed to serve as a holding company for American Public Life.
On February 20, 1996 the Mississippi Commissioner of Insurance approved an Agreement and Plan of Exchange (the "Plan of Exchange") pursuant to which American Public Life became a wholly-owned subsidiary of the Company, and each share of outstanding American Public Life common stock was converted into one share of the Company's common stock. The Plan of Exchange was approved by the stockholders of American Public Life at a Special Meeting held on October 29, 1996 and became effective on November 30, 1996.
The Company has no significant assets other than the stock of American Public Life. The assets and liabilities of the Company on a consolidated basis are not materially different from the assets and liabilities of American Public Life. As a holding company, the Company may make investments and engage in businesses not permitted for an insurance company, but there are no present plans to engage in additional activities or to make additional investments.
American Public Life is a Mississippi life and health insurance company, which began operations in 1945. It is licensed to do business in twenty-five (25) states. American Public Life specializes in supplemental health insurance products, including cancer, accident, intensive care, heart attack/stroke, dental insurance and supplemental group insurance products such as group dental, group disability and group hospital. American Public Life also offers whole life and term life insurance contracts.
The following table sets forth earned premiums by product line for the last three (3) years ended December 31.
Year ended December 31, -------------------------------------------- 1998 1997 1996 ------------ ------------ ------------ Premium revenue: Cancer $16,671,263 $17,309,712 $18,154,674 Life insurance 653,941 532,294 552,908 Accident 1,073,187 1,105,802 1,149,841 DentaCare (Dental) 6,469,047 5,705,409 4,906,975 Group Accident & Health 4,514,499 2,377,267 993,026 Other Accident & Health 638,396 325,027 312,424 ------------ ------------ ------------ $30,020,333 $27,355,511 $26,069,848 ============ ============ ============
Underwriting income: Life insurance $ (149,541) $ (31,870) $ (346,527) Accident & Health (1,419,473) (3,404,419) (1,719,138)
Net Investment income 2,523,875 2,536,674 2,387,010 Other income 29,331 34,711 26,067
Realized investment gains (losses) 65,807 (24,118) (80,291) ------------ ------------ ------------ Income (loss) before income tax provision (benefit) $ 1,049,999 $ (889,022) $ 174,212 ============ ============ ============
The following is a discussion of the characteristics of the categories of insurance currently marketed or in force. Products are described in general terms as there are many variations resulting principally from differing state laws and regulations.
Life Insurance
American Public Life conducts its life insurance business on a non-participating basis. American Public Life is licensed to write insurance in twenty-five (25) states. The Company markets life insurance business utilizing individual policies written on both a direct and a payroll deduction basis. Plans available include one (1), five (5) and ten (10) year renewable term insurance issued up to $1,000,000 (Maximum Retention by company $50,000). Rates for these three products are based on male and female non tobacco use and standard basis. Underwriting requirements vary by age and amount of insurance applied for. Issue ages are twenty (20) through seventy (70). The following table indicates those states which accounted for five percent (5%) or more of the total direct life insurance premiums collected by American Public Life during 1998.
($) (%)
Alabama 36,287 5.21 Arkansas 48,531 6.97 Louisiana 112,345 16.14 Mississippi 317,064 45.56 Oklahoma 45,502 6.54 Texas 76,194 10.95 Others 59,969 8.63 --------- ------ Total $695,892 100% ========= ======
American Public Life offers a simplified issue whole life policy with face amounts based on monthly payroll deduction amounts of $5-$20. The maximum issue amount is $40,000. Rates are based on uni-sex and do not distinguish between smoker and non smoker. A spouse rider is available with up to $10,000 coverage. The children's protection rider provides up to $5,000 to age twenty-five (25) where it may then be converted to permanent coverage not to exceed $25,000. This product is issued to persons aged fifteen (15) through sixty-five (65) either individually or by payroll deduction.
The family life protector is a decreasing term plan renewable to age seventy (70). Issue ages are fifteen (15) through sixty (60). Coverage is provided individually or on the entire family. Maximum issue on the primary insured per unit is $15,000. Family coverage maximums are spouse $3,000 and children $1,000. Accidental death and dismemberment coverage is included on the primary insured and spouse. Premiums may be paid individually or by payroll deduction.
The Company has developed a Basic and Voluntary Group Term Life Policy that will compliment its existing portfolio of voluntary payroll deduction accident and health products. The Basic Policy offers coverage up to $150,000 for the insured and the Voluntary Policy offers coverage up to $100,000. A spouse rider is available with both policies, with $5,000 on the Basic Policy and $10,000 on the Voluntary Policy. Children can be insured for up to $2,500 under the Basic Policy and $10,000 under the Voluntary Policy. The maximum retention by the Company is $50,000, with the remainder being reinsured by another company.
Term life insurance policies provide death benefits if the insured's death occurs during the specific premium paying term of the policy and generally do not include a savings or investment element in the policy premium. Whole life insurance policies provide death benefits which are payable under effective policies regardless of the time of the insured's death and have a savings and investment element which may result in the accumulation of a cash surrender value.
The following table sets forth certain information concerning the development of American Public Life's life insurance business.
Year Ended December 31, ------------------------------- 1998 1997 1996 --------- ------- --------- (in thousands) Life insurance in force at the end of period: Ordinary - whole life 44,233 34,772 $35,285 - term 10,387 12,657 15,390 Industrial 0 0 Group life 6,960 0 0 -------- -------- -------- Total $61,580 $47,379 $50,675 ======== ======== ======== New life insurance issued: Ordinary - whole life 11,537 3,411 3,191 - term 326 819 678 Industrial 0 0 Group life 6,960 0 0 -------- -------- --------- Total $18,823 $ 4,230 $ 3,869 ======== ======== ========= Premium Income $ 654 $ 532 $ 553 ======== ======== =========
Accident and Health Insurance
American Public Life is licensed to write accident and health ("A&H") insurance in twenty-five (25) states. The following table indicates those states which accounted for five percent (5%) or more of the total direct A&H premiums collected by American Public Life during 1998.
Alabama $ 1,456,790 5.00% Arkansas 1,509,662 5.15% Louisiana 9,227,591 31.45% Mississippi 6,474,667 22.07% Oklahoma 2,471,243 8.42% Texas 4,484,878 15.29% Others 3,715,879 12.62% ------------ --------- Total $29,340,710 100.00% ============ =========
American Public Life's A&H portfolio includes plans that may be marketed either on an individual basis or by payroll deduction. The bulk of new sales are by payroll deduction with American Public Life taking advantage of the popularity of this distribution method. The Company's Supplemental Cancer plans, once the Company's lead products, have been restructured and as a result, Voluntary Group Dental, DentaCare (American Public Life's PPO Dental Plan), Disability Income, both group and guaranteed renewal along with medical supplement plans, have become the Company's leading products. Accident, Heart Disease and Intensive Care products are also being successfully marketed on a payroll deduction basis.
American Public Life's marketing structure consists of fifty-three (53) general agents and seven hundred fifty (750) soliciting agents. The Company has expanded its general agent network with the contracting of four (4) general agents. Three (3) of these new general agents will give the Company activity in states where there has been no significant production in the past.
As the Company increases its product base and general agent network, together with the popularity of payroll deduction as a means of distribution, it is anticipated that the Company will continue to grow and it is expected that American Public Life's knowledge and experience in this distribution method will give it a significant advantage over its competitors in the future.
Investments
American Public Life is regulated as to the types of investments which it can make and the amount of funds which it may maintain in any one type of investment. American Public Life's investment policy emphasizes investment grade corporate bonds, political subdivision bonds, mortgage-backed securities issued by government agencies and United States Treasury securities. Investment real estate and mortgage loans are gradually being liquidated as markets present themselves.
The following table sets forth certain information concerning American Public Life's investments at the dates shown.
Year Ended December 31, ------------------------------------------ 1998 1997 1996 ------------ ------------ ------------ Securities: Available for sale $35,780,591 $34,626,186 $32,720,388 Held to maturity --- --- --- Mortgage loans on real estate 683,649 989,859 1,075,268 Investment real estate 673,858 727,700 781,542 Policy loans 1,419,072 1,490,154 1,600,398 Short-term investments --- --- --- ------------ ------------ ------------ Total investments $38,557,170 $37,833,899 $36,177,596 ============ ============ ============
The results with respect to the foregoing investments are as follows:
Net investment income $2,523,875 $2,536,674 $2,387,010 Realized investment gains (losses) (before income taxes) 65,807 (24,118) (80,291) Average yield on investments 6.79% 6.94% 6.73% Economic yield on investments (includes realized and unrealized capital gains) 7.49% 8.33% 6.51%
As of December 31, 1998 the maturity schedule for all available for sale securities held by American Public Life at amortized cost was as follows:
Maturity Schedule - ----------------------------------------------------------------------- Amortized Maturity Cost Percentage of Total - ----------------------------------------------------------------------- Due in one year or less $ 99,763 .29% Due in one to five years 2,609,770 7.53% Due in five to ten years 3,131,559 9.04% Due after ten years 12,001,113 34.65% ------------- --------- 17,842,205 51.51% Mortgage-backed securities 16,795,957 48.49% ------------- --------- $ 34,638,162 100.00% ============= =========
Actual maturities may differ from contractual maturities because of the borrowers' right to call or prepay obligations.
The Company's supplemental health insurance coverages have a relatively short duration. The Company's investment policy directs that bond investments be made with an average duration of five to ten years. This policy is based on the recommendation of an investment consultant and the Company's independent actuaries. A majority of the Company's government agency, mortgage-backed securities were purchased with an anticipated average maturity falling within these guidelines.
The Company's investment policy is to invest in state and federal obligations as well as corporate obligations with a Standard & Poors rating of "BBB" or greater. In 1996 the Company discontinued the purchase of government agency, mortgage-backed securities and disposed of a significant amount of government agency, mortgage-backed securities, and shifted these funds into bonds with short to medium maturities. Such government agency, mortgage-backed securities continue to be the largest component of the portfolio. Because of prepayments, such securities present a greater interest rate risk than traditional fixed income securities. The intent of the effort to change the mix of the portfolio is to reduce the risk, volatility and active management required of the portfolio since a change in market interest rates results in a related change in such securities' prepayment risk.
Marketing and Distribution
American Public Life's insurance products are marketed through an independent field force of fifty- three (53) general agents and seven hundred fifty (750) producing agents. The American Public Life marketing department provides training support to its field force on a periodic basis throughout the year. Agents are compensated through the payment of commissions which are calculated as a percentage of collected premium revenue.
The following agencies have accounted for more than ten percent (10%) of the new coverage issued in 1996, 1997 and 1998.
1998 1997 1996 ---- ---- ---- Clinton, Ruston, LA 9% 8% 11% Benoit, Kenner, LA 19% 18% 31% MGM, Plano, TX 24% 26% 23%
These percentages generally reflect the percentage of distribution of premium income. The Clinton agency has exceeded ten percent (10%) for nine (9) years, excluding 1997 and 1998, the Benoit agency has exceeded ten percent (10%) for six (6) years, and the MGM agency has exceeded ten percent (10%) for twenty-four (24) years.
Reserve Liabilities
American Public Life maintains reserves for future policy benefits to meet future obligations under outstanding policies. These reserves are calculated by an independent actuarial firm, Wakely and Associates, Inc., and are certified to be sufficient to meet policy and contract obligations as they mature. Liabilities for future policy benefits are calculated using assumptions for interest, mortality, morbidity, expense and withdrawals determined at the time the policies were issued. As of December 31, 1998, the total reserves of American Public Life were $34,624,922. American Public Life believes that such reserves for future policy benefits were calculated in accordance with generally accepted actuarial methods and that such reserves are adequate to provide for future policy benefits with respect to American Public Life.
Underwriting Activities
American Public Life maintains an underwriting department which seeks to evaluate the risks associated with the issuance of an insurance policy. American Public Life's underwriting and policy issue department is staffed by eight (8) employees. The department is responsible for data entry, underwriting and policy issue. Underwriters determine whether an application is accepted or declined. The underwriting process consists of a review of the information contained in the application in conjunction with information obtained through the medical information bureau, and through its review of medical histories furnished upon request.
In certain instances American Public Life conducts telephone interviews to verify the information on the application and to obtain additional information necessary to enable American Public Life to make an assessment of the applicant's functional and cognitive capacities. American Public Life does not require physical examinations as part of the underwriting process, as this is not generally required for the type of coverages offered.
Claims Administration
Claims under American Public Life's policies are administered by a claims department comprised of eighteen (18) employees. The claim adjudication process principally includes verification of coverage, analysis of medical records, interpretation of policy language and computation and payment of benefits. American Public Life utilizes a physician who provides advice and direction with regard to medical matters as they relate to American Public Life's claim adjudication process.
Reinsurance
American Public Life's maximum retention on any one life is $50,000 for life insurance and waiver of premium benefits. All accidental death benefits are reinsured. There is minimal risk because of the reinsurers used and the relatively low amount of reinsurance credits taken. The principal reinsurers of American Public Life are as follows:
Business Men's Assurance Life Reassurance Corp. Lincoln National Life Munich American CNA
American Public Life also has a small amount of reinsurance on its accident and health insurance. Lonestar Life Insurance Company reinsures twenty-five percent (25%) of a small block of cancer insurance that was assumed from another company in 1992. Additionally, the heart transplant benefit on the heart attack/stroke policy is one hundred percent (100%) reinsured with Cologne Life Reinsurance Company.
Supervision and Regulation
American Public Life is subject to regulation by the insurance departments of those states in which it is licensed to conduct business. Although the extent of regulation varies from state to state, the insurance laws of the various states generally establish supervisory departments having broad administrative powers with respect to, among other matters, the granting and revocation of licenses to transact business, the licensing of agents, the establishment of standards of financial solvency, including reserves to be maintained, the nature of investments and, in most cases, premium rates, the approval of forms and policies and the form and content of financial statements. These regulations have as their primary purpose the protection of policyholders and do not necessarily confer a benefit upon stockholders.
Numerous proposals to reform the current health care system have been introduced in Congress and state legislatures. Proposals have included, among other things, modifications to the existing employer-based insurance system, a quasi-regulated system of "managed competition" among health plans, and a single- payer, public program. A number of states have passed or are considering legislation that would limit the differentials in rates that insurers could charge for health care coverages between new business and renewal business for similar demographic groups. State legislation has also been adopted or is being considered that would make health insurance available to all small groups by requiring coverage of all employees and their dependents, by limiting the applicability of pre-existing conditions exclusions, by requiring insurers to offer a basic plan exempt from certain benefits as well as a standard plan, or by establishing a mechanism to spread the risk of high risk employees to all small group insurers.
Changes in regulation of health insurance could adversely affect American Public Life's business. Changes in regulation of health insurance could also benefit American Public Life's business by increasing the demand for supplemental insurance products.
Most states in which American Public Life operates have laws which require that insurers become members of guaranty associations. These associations guarantee that benefits due policyholders of insurance companies will continue to be provided even if the insurance company which wrote the business is financially unable to fulfill its obligations. To provide these benefits, the associations assess the insurance companies licensed in a state to write that type of insurance for which coverage is guaranteed. The amount of an insurer's assessment is generally based on the relationship between that company's premium volume in the state and the premium volume of all of the companies writing the particular type of insurance in the state.
American Public Life is subject to periodic financial and market conduct examinations. The last completed financial examination of American Public Life was conducted by the Mississippi Insurance Department for the period ended December 31, 1992. American Public Life is currently under examination for the three-year period ended December 31, 1995. In addition, American Public Life is subject to state imposed mandatory annual audits by independent certified public accountants. These are conducted by the Company's independent public accounting firm in conjunction with its audit of the Company's financial statements.
Payment of dividends by American Public Life is restricted by law to available net surplus computed on a statutory basis. In addition, without the prior approval of the Mississippi Commissioner of Insurance, the size of any dividend by American Public Life during any twelve (12) month period is limited to the lesser of (i) ten percent (10%) of surplus; or (ii) net gain from operations for the past three (3) years, less dividends paid in the past two (2) years.
Premiums
Premium rates for all of American Public Life's products are generally subject to state regulation. Premium regulations vary greatly among jurisdictions and product lines. Rates are established by American Public Life's consulting actuary and are reviewed by the regulatory authorities in most states. Rate changes must generally be filed and approved by these authorities.
Competition
American Public Life is engaged in a highly competitive business and competes with many insurance companies of substantially greater financial resources, including stock and mutual insurance companies. Mutual insurance companies return profits, if any, to policyholders rather than stockholders; therefore, mutual insurance companies may be able to charge lower net premiums than those charged by stock insurers. Accordingly, stock insurers such as American Public Life must attempt to achieve competitive premium rates through greater volume, efficiency of operation and control of expenses. A large number of insurance companies are licensed to sell accident and health insurance, cancer insurance and dental insurance. These include substantially all of the major carriers in the United States. A number of these companies specialize in supplemental health insurance and may have considerably greater financial resources and larger networks of agents than American Public Life.
American Public Life competes with insurers which offer similar policies in attracting new agents and attempts to attract and maintain agents through a combination of competitive products, competitive agent commission rates and quality underwriting and claims service. Management believes that flexibility and sensitivity to changes in the marketplace are a major consideration in competing for business.
Number of Employees
The Company employs a total of seventy-eight (78) persons, all of whom are full-time, as follows:
New Business 8 Customer Service 17 Financial & Data Processing 6 Marketing 7 Legal, Compliance & Services 5 Claims 18 DentaCare Services 8 All Other 9 -----
Business Acquisitions
The Company's growth strategy includes the investigation and evaluation of acquisition opportunities with respect to existing blocks of insurance business underwritten by other companies. It is anticipated that these acquisitions will allow the Company to increase business in force without incurring high first year commission and administrative expenses associated with business produced directly by agents. No such acquisitions have been completed recently. Management intends to continue to evaluate acquisition opportunities as they arise. However, there can be no assurance that any acquisition opportunities will arise or that the Company will be successful in completing any such acquisitions.
Executive Officers of the Registrant
The executive officers of the Registrant, including their positions with the Registrant, their ages and their principal occupations for the last five (5) years are as follows:
Dianne D. Aycock. Age 38. Ms. Aycock is Vice President-Claims of American Public Life, a position she has held since April 1, 1997. From January 1, 1995 to April 1, 1997, she was Vice President-Administration. From March 1, 1994 to January 1, 1995, she was a Director of Administration. Prior to March 1, 1994, she was Manager of Policy Owner Services.
Joseph C. Hartley, Jr. Age 57. Mr. Hartley is Senior Vice President, Counsel and Secretary/Treasurer of American Public Life, and Secretary of the Company. He has been employed in a senior position with American Public Life since December, 1993. Prior to December, 1993, Mr. Hartley was employed as an attorney with David New Oil Company.
Alison James, Jr. Age 53. Mr. James is a Vice President and Agency Director of American Public Life.
Frank K. Junkin, Jr. Age 48. Mr. Junkin has been Senior Vice President, Marketing of American Public Life for more than five years. He has served as a director of American Public Life since 1987 and of the Company since its organization in December, 1995.
Richard K. Mills. Age 56. Mr. Mills is Vice President-Sales of American Public Life, a position he has held since January, 1997. He was employed by American Public Life in January, 1994, and prior to that time was self-employed in the insurance business.
Sharon D. Starnes. Age 35. Ms. Starnes is Vice President-Customer Service of American Public Life, a position she has held since February 1, 1997. From August 15, 1996 to February 1, 1997, she was a Senior Manager-Accounting. Prior to that time she was a Manager-Accounting.
Jerry C. Stovall. Age 62. Mr. Stovall was elected President and Chief Executive Officer of the Company and American Public Life effective September 2, 1997. Mr. Stovall was Executive Vice President of American Public Life from October, 1996 through August, 1997. Until May, 1995, when he retired, Mr. Stovall was President of Lamar Life Insurance Company.
William F. Weems. Age 42. Mr. Weems is Vice President-Financial of American Public Life and Treasurer of the Company. Mr. Weems has been employed by American Public Life in a senior position since November, 1993. Prior to November, 1993, he was employed as an accountant with The Andrew Jackson Life Insurance Company.
Lawrence Powers. Age 45. Mr. Powers is Senior Vice President-Administration of American Public Life Insurance Company. He has been employed in a senior position at American Public Life Insurance Company since September 1998. Prior to September 1998, Mr. Powers was a Division Vice President of Owens & Minor, Inc.
Chippy V. Barton. Age 58. Mr. Barton is Vice President-Underwriting/New Business, a position he has held since July 1998. Prior to July 1998, he was employed as a Vice President of New Business Administration with Southern Farm Bureau Life Insurance Company.
Year 2000
The year 2000 computer issue is caused by computer programs being written using two (2) digits rather than four (4) to identify the applicable year. Since most older application software only contains the two digits, many systems will identify January 1, 2000 as January 1, 1900 which has the potential to cause many computer systems and software programs to generate incorrect results, or worse, not function at all. The magnitude of the problem extends beyond the computer environment as many business machines and other office equipment also
have date sensitive functions. In 1996 the Company decided to replace its existing software, which had been developed in 1985, because of the age of the system and the need to implement system enhancements to deal with a growing and changing business which still handled many functions manually. This decision had the collateral benefit of addressing Year 2000 problems. An outside consultant was hired who beginning in January 1996 developed new software for all material automated functions, though some important functions are still handled manually. New hardware was purchased to support the new software. The new systems are designed to accommodate a four-digit year. Component testing began January 1998. System testing began June 1998. The new system was implemented on January 4, 1999 and is currently in use by the Company. The cost incurred in replacing the Company's system will be capitalized and amortized over the useful life of the system. Costs incurred in 1998 were not material to the Company's financial statements.
The Company has identified policy administration, policy records, billing and collections, claims processing and telephones as mission critical functions. No automated systems are used in policy records and claims processing is a partially manual function. Year 2000 issues with respect to policy administration, billing and collections, and the automated portion of claims processing have been addressed through the implementation of the new system. The Company has also acquired and installed a new telephone system that is Year 2000 compliant.
The Company outsources one significant function, payroll processing, to a third party which has certified Year 2000 readiness to the Company. Certifications of Year 2000 readiness have also been received from all significant business partners identified by the Company, including its actuary, the manger of its investment portfolio and its primary bank. The Company does not believe that the non-compliance of vendors or counter parties would have a material effect on the Company's financial statements as the Company does not rely on any significant vendors or counter parties for its business.
ITEM 2.
ITEM 2. PROPERTIES
American Public Life owns its principal executive offices located at 2305 Lakeland Drive, Jackson, Mississippi. The building consists of approximately thirty thousand (30,000) square feet, and was constructed in 1985. The Company also owns a building on 480 E. Woodrow Wilson Drive, Jackson, Mississippi, the old home office, which is being leased. The building consists of approximately fifteen thousand (15,000) square feet. There are no encumbrances on these properties. Management believes the buildings are in good condition and adequate for the Company's foreseeable needs.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
American Public Life is involved in litigation arising in the normal course of business. Management of the Company, based on the advice of counsel, is of the opinion that American Public Life's ultimate liability, if any, which may result from the litigation, will not have a material adverse effect on the financial condition of the Company and American Public Life.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the Company's shareholders during the fourth quarter of 1998.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The information required by this item can be found in "Market Information and Dividends" included in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item can be found in the table captioned "American Public Holdings, Inc. Summary of Consolidated Selected Financial Data" in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this item can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Registrant and the accompanying notes to the financial statements along with the report of the independent public accountants and the supplementary financial information are contained in the Registrant's 1998 Annual Report to Shareholders and are incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There has been no change in accountants within the two (2) year period ended December 31, 1998.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information on the directors and executive officers of the Registrant can be found under Item 1 Description of Business of this Report on Form 10-K and under the headings "Election of Directors" and "Executive Compensation" in the Proxy Statement to shareholders dated April 6, 1999, and is incorporated herein by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item can be found under the heading "Executive Compensation" in the Proxy Statement dated April 6, 1999, and is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners and the officers and directors can be found under the headings "Stock Ownership of Principal Stockholder" and "Stock Ownership of Directors and Officers" in the Proxy Statement dated April 6, 1999, and is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
A-1. Financial Statements
The report of Deloitte & Touche LLP, independent auditors, and the following consolidated financial statements of American Public Holdings, Inc. and subsidiaries are included in the Registrant's 1998 Annual Report to Shareholders and are incorporated into Part II, Item 8, herein by reference.
Consolidated Balance Sheets - December 31, 1998 and 1997 Consolidated Statements of Operations and Comprehensive Income (Loss) - Years ended December 31, 1998, 1997 and 1996 Consolidated Statements of Changes in Stockholders' Equity - Years ended December 31, 1998, 1997 and 1996 Consolidated Statements of Cash Flows - Years ended December 31, 1998, 1997 and 1996 Notes to the Consolidated Financial Statements
A-2. Financial Statement Schedules
Independent Auditors' Report on Schedules Schedule II - Condensed Financial Information of Registrant Schedule V - Valuation and Qualifying Accounts
A-3. Exhibits Required by Item 601 of Regulation S-K
*2 Agreement and Plan of Exchange *3(a) Articles of Incorporation of American Public Holdings, Inc. *3(b) Bylaws of American Public Holdings, Inc. **10.1 Form of Bonus Arrangement 13 Portions of Annual Report to Stockholders *21 Subsidiaries of Registrant 27 Financial Data Schedule
* These Exhibits were originally filed as exhibits to the Registrant's Form 10 filed April 30, 1997, (File No. 000-22479) and are incorporated herein by reference.
** Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated by reference herein.
B. Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN PUBLIC HOLDINGS, INC.
BY: /s/ Jerry C. Stovall ----------------------------------------- JERRY C. STOVALL PRESIDENT AND CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER)
BY: /s/ William F. Weems ----------------------------------------- WILLIAM F. WEEMS VICE PRESIDENT FINANCIAL (PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER)
DATE: MARCH 30, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
DATE: March 30, 1999 BY: /s/ Warren I. Hammett ----------------------------------------- Warren I. Hammett, Director
DATE: March 30, 1999 BY: /s/ F. Harrell Josey ----------------------------------------- F. Harrell Josey, D.V.M., Director
DATE: March 30, 1999 BY: /s/ Frank K. Junkin, Jr. ----------------------------------------- Frank K. Junkin, Jr., Director
DATE: March 30, 1999 BY: /s/ David A. New, Sr. ----------------------------------------- David A. New, Sr., Director
DATE: March 30, 1999 BY: /s/ David A. New, Jr. ----------------------------------------- David A. New, Jr., Director
DATE: March 30, 1999 BY: /s/ Paul H. Watson, Jr. ----------------------------------------- Paul H. Watson, Jr., Director
EXHIBIT INDEX
13 Portions of Annual Report to Stockholders
27 Financial Data Schedule