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EXHIBIT 10.31
STOCK EXCHANGE AGREEMENT
THIS AGREEMENT made this 15th day of October, 1996 by and between AMLI REALTY
CO., a Delaware Corporation, ("AMLI") and UICI, a Delaware Corporation
("UICI").
1. STOCK EXCHANGE
At closing AMLI Stockholders (listed on Exhibit A attached hereto)
will deliver to UICI 11,874 properly endorsed, unencumbered AMLI
common shares, representing 100% of the outstanding AMLI shares, in
exchange for 1,634,876 UICI shares which will not be registered. UICI
agrees to file and cause to be effective a registration statement as
soon as reasonably practicable, and to maintain such registration
statement so that all UICI shares exchanged hereunder are registered
under the Securities Act of 1933 for issuance to the Stockholders so
that such shares are readily tradeable and marketable. Each
Stockholder will sign and deliver at closing an EXCHANGE STATEMENT in
the form attached hereto as Exhibit B.
2. AMLI NONQUALIFIED STOCK OPTIONS: EMPLOYEE LOANS
At closing AMLI will cancel all AMLI nonqualified stock options
(covering 662 AMLI shares). UICI will issue 91,150 UICI nonqualified
options with a 5 year exercise period and varying exercise prices to
those employees surrendering AMLI options as set forth on Exhibit F.
Employee loans, some of which have been used to acquire AMLI shares,
will remain outstanding in accord with their existing terms,
provided, however, where AMLI shares have been used to collateralize
such loans UICI shares will be substituted. Exhibit C attached hereto
details such loan collateral positions.
3. AMLI OPERATIONS: INVESTMENT PURPOSES
UICI will own AMLI and operate its business in the ordinary course
and has no intention of disposing of significant assets. All
exchanged shares will be held for investment purposes only.
4. POOLING OF INTERESTS
The parties intend that the transaction will be treated as a pooling
of interests and agree to abide the restrictions contained in
Accounting Series Release 135. In this connection, certain designated
AMLI stockholders will execute and deliver the AMLI AFFILIATE
AGREEMENT attached as Exhibit D.
5. INCOME TAX TREATMENT
The parties intend that the transaction will be treated as a tax free
reorganization under IRC Section 368(a)(1)(B) and will take no
actions which will violate applicable requirements.
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6. HSR FILING
To the extent necessary, the parties will file all necessary papers
required by applicable laws to comply with HSR notifications.
7. AMLI REPRESENTATIONS
a) AMLI represents to UICI as follows:
1) AMLI is duly organized and validly exists as a Delaware
corporation.
2) This Agreement has been duly authorized by the AMLI Board
of Directors.
3) The transaction contemplated hereby will not cause any
default or breach in any material contract, loan agreement
or other instrument to which AMLI is a party.
4) The delivery of all shares listed on Exhibit A will give
UICI complete, unencumbered ownership of AMLI.
5) The financial statements attached hereto as Exhibit E are
complete, accurate and fairly reflect the financial
condition and results of AMLI operations as of the date
specified. Since the date of the attached financials there
have been no material adverse changes to the business or
condition of AMLI.
6) AMLI will provide UICI copies of the prior three years
federal and state income tax returns and represents that it
believes such returns fairly reflect AMLI's tax obligations
for such periods and that no adjustments for such periods
have been proposed.
b) Conditions to Closing:
1) Prior to closing UICI representatives will be granted full
access to AMLI facilities, books and records for the
purpose of conducting due diligence reviews. AMLI will
cooperate in assisting UICI representatives in conducting
reasonable environmental reviews of real estate in which
AMLI holds an interest.
2) The continued accuracy of the AMLI representations will be
a condition to closing.
3) The AMLI representations will lapse at closing.
8. CLOSING
Upon satisfaction of all necessary HSR filing requirements, passage
of required HSR time frames, and receipt of any additional required
consents the parties will close.
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9. GOVERNING LAW
This Agreement is governed by Delaware law.
AMLI REALTY CO. UICI
/s/ XXXXXXX X. XXXX /s/ XXXXXX X. XXXXXX
--------------------------------- ---------------------------------
By Xxxxxxx X. Xxxx By Xxxxxx X. Xxxxxx
Chairman (duly authorize) Chairman (duly authorized)
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EXHIBIT A
Amli Realty Co.
Shareholders After ISO Exercise
October 1996
Number of Common Share Number of Total Amli UICI Shares
Amli Preferred Equivalents Amli Common Common Shares @ 137.69
Name Shares @ 110% Shares and Equivalents Exchange Ratio
---------------------------- -------------- ----------- ---------- --------------- --------------
Xxxxx, Xxxx X. 369 369.00 50,808
Xxxxx, Xxxxxx X. 18 18.00 2,478
Xxxxx, Xxxxxxx X. 18 18.00 2,478
Xxxxx, Xxxxx X. 18 18.00 2,478
Xxxxx, Xxxx X. 18 18.00 2,478
Xxxxxxx & Xxxxx, Inc. 241 265.10 4,218 4,483.10 617,278
Xxxxxxxx, Xxxxx X. 11 11.00 1,515
Xxxx, Xxxxxx X. 29 29.00 3,993
Xxxxxxxxxx, Xxxxxx X. 5 5.00 688
Xxxxxxxx, Xxxx X. 6 6.00 826
Diamond, Xxxx X. 160 160.00 22,031
Diamond Xxxxxxx, Xxxxx 160 160.00 22,031
Xxxxxxx, Xxxxxxxx 160 160.00 22,031
Xxxxxxx, Xxxxxxx 19 19.00 2,616
Xxxxxxx, Xxxxx 21 21.00 2,891
Xxxxxxx, Xxxxx and -- --
Xxxxxx, Trustees 76 76.00 10,464
Xxxxxxx, Xxxxx X. 248 248.00 34,147
Xxxxxxx, Xxxxxx X. 6 6.00 826
Xxxxxxx, Xxxxxx X. 6 6.00 826
Xxxxxxx, Xxxxxx X. 102 102.00 14,044
Xxxxxx, Xxxxxxx X. 3 3.30 36 39.30 5,411
Xxx, Xxxxxxx X. 2 2.20 59 61.20 8,427
Xxxxxxxx, Xxxx X. 68 68.00 9,363
Greenwood, Georgia 15 15.00 2,065
Xxxxx, Xxxxxxx 6 6.00 826
Xxxxxx, Xxxxx X. 79 79.00 10,878
Xxxxx, Xxxxxxx X. 127 127.00 17,487
Xxxxx, Xxxxxxx X., Trustee 9 9.00 1,239
Xxxxx, Xxxxxxx X., C/F Xxxxx 5 5.00 688
Xxxxx, Xxxxx Paris, Trustee 25 25.00 3,442
Xxxxxxx, Xxxxx X. 191 191.00 26,299
Xxxx, Xxxxxx X. 76 76.00 10,464
Xxxxxx, Xxxxxxx X. 17 17.00 2,341
Xxxx, Xxxxxxx X. 42 46.20 1,519 1,565.20 215,512
C/F Xxxxxx 6 6.60 19 25.60 3,525
C/F Xxxxxxx 6 6.60 19 25.60 3,525
C/F Xxxxx 6 6.60 19 25.60 3,525
Xxxxx X. Xxxx Residual Trust 350 350.00 48,192
Unique Indoor Comfort, Inc. 41 41.00 5,645
Xxxxx X. Xxxx 1993 Family -- --
Trust 350 350.00 48,192
Xxxxxx X. Xxxx Family Trust 253 253.00 34,836
Xxxxxx X. Xxxx Marital Trust 30 30.00 4,131
Estate of Xxxxxx X. Xxxx 45 45.00 6,196
Xxxx Properties 50 55.00 250 305.00 41,995
Xxxx, Xxxxx X. 8 8.00 1,102
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EXHIBIT A
Amli Realty Co.
Shareholders After ISO Exercise
October 1996
(continued)
Xxxxxxxx, Xxxxxxx X. 38 38.00 5,232
Xxxx, Xxxxxxx X. 30 33.00 312 345.00 47,503
Xxxxxxxx, Xxxxxxxx X. 10 11.00 42 53.00 7,298
O'Mara, Xxxx X. 6 6.00 826
Xxxxxxx XxXxxxxxxx Trust 60 60.00 8,261
Xxxxxxx, Xxxxxx X. 14 15.40 583 598.40 82,394
Xxxxxx, Xxxx X. 3 3.30 28 31.30 4,310
Xxxxx, Xx and Xxxxxxx 40 40.00 5,508
Xxxxxxxxx, Xxxxxxx X. 36 36.00 4,957
Sweet, Xxxxxx X. 150 150.00 20,654
Sweet, Xxxxx X. 158 158.00 21,755
Sweet, Xxxxxx X. 45 45.00 6,196
C/F Xxxxx 12 12.00 1,652
C/F Xxxxxxx 12 12.00 1,652
Sweet, Xxxxx X., Trustee 126 126.00 17,349
Xxxxx, Xxxxxx 12 12.00 1,652
Xxxxx, Xxxxxx X. 373 373.00 51,358
Xxxxxx, Xxxxxx 36 36.00 4,957
Xxxxxx, Xxxxxxx and Xxxxxx 5 5.00 688
Xxxxxxx, Xxxxxx 3 3.30 28 31.30 4,310
Xxxxxxxxx, X. Xxxxx 30 30.00 4,131
---------- ---------- ---------- ---------- ----------
Total 416 457.60 11,416 11,873.60 1,634,876
========== ========== ========== ========== ==========
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EXHIBIT B
EXCHANGE STATEMENT (COMMON SHARES)
STOCKHOLDER:__________________________
NUMBER OF AMLI COMMON SHARES:_________
In connection with an intended exchange of AMLI REALTY CO. shares for shares in
UICI on a 1:137.69 basis, I hereby direct that all AMLI shares registered as
set forth above are to be exchanged for UICI shares. The officers of AMLI are
authorized to take all action on my behalf to consummate such exchange. All
UICI shares received are to be registered the same as my AMLI shares.
I hereby represent and warrant that I have full power to direct the exchange of
the AMLI shares registered as set forth above and that such shares are free and
clear of any liens or encumbrances.
Signature:
-----------------------------
Print Name:
----------------------------
Date:
----------------------------------
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EXHIBIT B-1
EXCHANGE STATEMENT
(COMMON/PREFERRED SHARES)
STOCKHOLDER:__________________________
NUMBER OF AMLI COMMON SHARES: _________
NUMBER OF AMLI PREFERRED SHARES: _________
TOTAL NUMBER OF AMLI COMMON SHARES
INCLUDING CONVERSION OF PREFERRED SHARES: _________
In connection with an intended exchange of AMLI REALTY CO. shares for shares in
UICI on a 1:137.69 basis, I (a) hereby exercise the conversion of my AMLI
preferred shares to AMLI common shares at a 1.1 premium and (2) hereby direct
that all AMLI shares registered as set forth above are to be exchanged for UICI
shares. The officers of AMLI are authorized to take all action on my behalf to
consummate such exchange. All UICI shares received are to be registered the
same as my AMLI shares.
I hereby represent and warrant that I have full power to direct conversion of
and the exchange of the AMLI shares registered as set forth above and that such
shares are free and clear of any liens or encumbrances.
Signature:
-----------------------------
Print Name:
----------------------------
Date:
----------------------------------
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EXHIBIT C
Amli Realty Co.
Shareholder Loans
October 1996
Number of Number of Original Current
Amli UICI Loan Loan Interest Maturity
Shares Shares Balance Balance Rate Date
------------ ------------ ------------ ------------ ------------ ------------
EXISTING SHAREHOLDER LOANS
Xxxxx 50 6,884.50 90,040.00 68,735.95 4.00% Dec 31, 1998
Xxxxx 86 11,841.34 54,586.61 23,145.32 4.00% Sep 30, 1998
Brotonel 4 550.76 6,335.72 6,063.41 6.25% Jun 30, 1999
Xxxxxxx 25 3,442.25 45,020.00 34,367.97 4.00% Dec 31, 1998
Xxxx 9 1,239.21 11,656.54 11,018.77 6.25% Dec 31, 2000
Xxxx 265 36,487.85 270,000.00 270,000.00 4.00% Xxx 00, 0000
Xxxxxxxx 10 1,376.90 15,241.19 15,241.19 6.25% Jan 15, 1997
Sweet 38 5,232.22 19,262.52 15,907.78 6.75% Sep 30, 2000
Sweet 25 3,442.25 45,020.00 34,367.97 4.00% Dec 31, 1998
Sweet 30 4,130.70 54,024.00 42,462.28 4.00% Mar 31, 1999
Sweet 26 3,579.94 44,506.80 34,981.86 4.00% Mar 31, 1999
Xxxxx 45 6,196.05 27,657.30 10,311.89 4.00% Jun 30, 1998
Xxxxx 25 3,442.25 93,836.00 62,938.47 4.00% Dec 31, 1997
Xxxxx 25 3,442.25 45,020.00 34,367.97 4.00% Dec 31, 1998
------------ ------------ ------------ ------------
Total Existing Loans 663 91,288.47 822,206.68 663,911.33
------------ ------------ ------------ ------------
NEW SHAREHOLDER LOANS FROM EXERCISE OF ISO'S
Xxxxx 94 12,942.86 157,849.20 157,849.20 6.25% Dec 31, 2001
Brotonel 7 963.83 11,982.60 11,982.60 6.25% Dec 31, 2001
Fox 22 3,029.18 36,809.60 36,809.60 6.25% Dec 31, 2001
Xxxxxxxx 56 7,710.64 111,090.80 111,090.80 6.25% Dec 31, 2001
Jonas 6 826.14 10,270.80 10,270.80 6.25% Xxx 00, 0000
Xxxxx 66 9,087.54 128,208.80 128,208.80 6.25% Dec 31, 2001
Xxxxxxx 110 15,145.90 207,018.00 207,018.00 6.25% Dec 31, 2001
Xxxx 44 6,058.36 90,549.20 90,549.20 6.25% Dec 31, 2001
Xxxxxx 15 2,065.35 25,677.00 25,677.00 6.25% Dec 31, 2001
Xxxx 89 12,254.41 164,274.20 164,274.20 6.25% Xxx 00, 0000
Xxxxxxxx 27 3,717.63 45,368.60 45,368.60 6.25% Dec 31, 2001
Xxxxx 90 12,392.10 151,342.00 151,342.00 6.25% Dec 31, 2001
------------ ------------ ------------ ------------
Total New Loans 626 86,193.94 1,140,440.80 1,140,440.80
------------ ------------ ------------ ------------
Total Loans 1,289 177,482.41 1,962,647.48 1,804,352.13
============ ============ ============ ============
Note - Shareholder loans require quarterly payments of principal and interest
based on a ten year amortization schedule.
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EXHIBIT D
AMLI AFFILIATE AGREEMENT
AMLI REALTY CO. shareholders intend to exchange their AMLI shares for shares in
UICI. Because the transaction is intended to be a tax-free exchange of shares
and also qualify for pooling of interests treatment, the undersigned hereby
agree to restrict sales of stock in accordance with the rules governing these
income tax and financial accounting treatments. In particular, no shares will
be sold prior to 30 days following release of UICI and AMLI combined earnings
in accord with ASR 135. Thereafter, none of the undersigned will sell more than
25% of their shares for a period of 24 months following the closing.
Stockholder: Xxxxxxx X. Xxxx
Number of AMLI shares owned: __________________
Signature: ____________________________________
Date: ____________________________________
Stockholder: Xxxx X. Xxxxx
Number of AMLI shares owned: __________________
Signature: ____________________________________
Date: ____________________________________
Stockholder: Xxxxxxx & Xxxxx
Number of AMLI shares owned: __________________
Signature: ____________________________________
Date: ____________________________________
Stockholder: Xxxxxx Xxxxxxx
Number of AMLI shares owned: __________________
Signature: ____________________________________
Date: ____________________________________
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EXHIBIT E
FINANCIAL STATEMENTS
The following Financial Statements have been provided to UICI under separate
cover:
1. Amli Realty Co. Consolidated Financial Statements for the years ended
December 31, 1993 and December 31, 1994, together with Independent
Accountant's Report thereon.
2. Amli Realty Co. Consolidated Financial Statements for the year ended
December 31, 1995, together with Independent Accountant's Report thereon.
3. Amli Realty Co. Consolidated Financial Statements for the nine months
ended September 30, 1996 (unaudited).
NOTE: Financial statements are not filed as part of this agreement but will be
provided supplementally to the Commission upon request.
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EXHIBIT F
NON-ISO OPTIONS
Number of Amli Amli Strike Number of UICI Strike Current Option
Optionholder Options Price UICI Options Price Exercise Date
------------ ------------ ------------ ------------ ------------ -------------
Xxxxx, Xxxx X. 128 $1,712.00 17,624 $12.43 1/15/04
Xxxxxxx, Xxxxx X. 59 $1,712.00 8,124 $12.43 1/15/04
Xxxx, Xxxxxxx X. 261 $1,712.00 35,937 $12.43 1/15/04
Sweet, Xxxxx X. 86 $1,712.00 11,841 $12.43 1/15/04
Sweet, Xxxxx X. 54 $1,801.00 7,435 $13.08 4/l/97
Xxxxx, Xxxxxx X. 59 $1,712.00 8,124 $12.43 1/15/04
Xxxxxxxxx, Xxxxx 15 $2,874.00 2,065 $20.87 1/15/02
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Total UICI Options: 91,150
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FIRST AMENDMENT TO
STOCK EXCHANGE AGREEMENT
This First Amendment to Stock Exchange Agreement (the "Amendment") is made
this 4th day of November, 1996 by and between AMLI REALTY CO., a Delaware
corporation, ("AMLI") and UICI, a Delaware corporation ("UICI");
RECITALS
WHEREAS, AMLI and UICI entered into that certain Stock Exchange Agreement
dated October 15, 1996 (such agreement as it may be modified or amended
hereafter is called the "Agreement") pursuant to which AMLI and UICI agreed on
an exchange of stock and related matters as more particularly set forth in the
Agreement;
WHEREAS, AMLI and UICI desire to make corrections to certain terminology
contained in said Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficient of which
are hereby acknowledged, AMLI and UICI hereby agree as follows:
1. Second grammatical sentence in Paragraph No. 2 of the Agreement shall be
replaced with the following: "UICI will issue 91,150 UICI nonqualified options
with option expiration dates and exercise prices as set forth on Exhibit F."
The intent of AMLI and UICI is that all terms of the UICI options, whose strike
prices have been adjusted based on the 137.69 Exchange Ratio as indicated on
Exhibit A to the Agreement, will be the same as the terms of the AMLI options
being exchanged.
2. Exhibit F shall be replaced with Exhibit F attached hereto (to correct the
labeling of the last column).
3. AMLI and UICI hereby agree that (a) this Amendment is incorporated into
and made a part of the Agreement, (b) any and all references to the Agreement
hereafter shall include this Amendment, and (c) the Agreement and all other
terms, conditions and provisions of the Agreement are in full force and effect
as of the date hereof, except as expressly modified and amended hereinabove.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
AMLI REALTY CO. UICI
By: /s/ XXXXXXX X. XXXX By: /s/ XXXXXX X. XXXXXX
------------------------------ ------------------------------
Xxxxxxx X. Xxxx Xxxxxx X. Xxxxxx
Chairman Chairman
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EXHIBIT F
NON-ISO OPTIONS
Number of Amli Amli Strike Number of UICI Strike Option
Optionholder Options Price UICI Options Price Expiration Date
------------ -------------- ------------ ------------ ------------ ---------------
Xxxxx, Xxxx X. 128 $1,712.00 17,624 $12.43 1/15/04
Xxxxxxx, Xxxxx X. 59 $1,712.00 8,124 $12.43 1/15/04
Xxxx, Xxxxxxx X. 261 $1,712.00 35,937 $12.43 1/15/04
Sweet, Xxxxx X. 86 $1,712.00 11,841 $12.43 1/15/04
Sweet, Xxxxx X. 54 $1,801.00 7,435 $13.08 4/l/97
Xxxxx, Xxxxxx X. 59 $1,712.00 8,124 $12.43 1/15/04
Xxxxxxxxx, Xxxxx 15 $2,874.00 2,065 $20.87 1/15/02
------
Total UICI Options: 91,150
