Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10–K/A
Amendment No. 2
(Mark One)
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to ________________
Commission file number 000–19704
REGAN HOLDING CORP.
(Exact name of Registrant as specified in its charter)
California |
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(State or other jurisdiction of |
| (I.R.S. Employer Identification No.) | ||
incorporation or organization) |
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2090 Marina Avenue, Petaluma, California 94954 (Address of principal executive offices and Zip Code) | ||||
(707) 778-8638 (Registrant’s telephone number, including area code) | ||||
Securities registered pursuant to Section 12(g) of the Exchange Act: | ||||
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Common Stock, No Par Value (Title of Class) | ||||
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES [ ] NO [X]
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 [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). YES [ ] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [ ] NO [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
There is currently no trading market for the registrant’s stock. Accordingly, the aggregate market value of the common equity held by non-affiliates is $616,000. This value is based upon the price at which the registrant would have repurchased its stock had it repurchased any stock in the last fiscal year. As of October 16, 2009, the number of shares outstanding of the registrant’s Series A Common Stock was 23,525,000 and the number of shares outstanding of the registrant’s Series B Common Stock was 550,000. The registrant has no other shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
Explanatory Note
This Amendment No. 2 on Form 10-K/A amends the Annual Report on Form 10-K of Regan Holding Corp. (“the Company, we, our, us”) for the year ended December 31, 2008, as amended by Form 10-K/A (Amendment No. 1) filed with the Securities and Exchange Commission (the "SEC") on March 31, 2009 and April 30, 2009, respectively. The Company is filing this Amendment No. 2 for the purposes stated below:
a) | The company’s accounting policy on sales commissions processing has been provided as an additional disclosure under Item 8 Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements. |
b) | Item 9A Controls and Procedures has been deleted and Item 9A(T) Controls and Procedures has been modified to (i) clarify that our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives and (ii) identify the framework used by management to evaluate the effectiveness of our internal control over financial reporting. | |
c) | Item 15 Exhibits has been amended to include certain material agreements as required by Item 601(b)(10) of Regulation S-K | |
d) | Management certifications provided pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended, have been modified to remove the title of the certifying individuals from the beginning of the certifications and to include the internal control over financial reporting language as required by Item 601(b)(31) of Regulation S-K. | |
This Amendment No. 2 does not modify or update any other disclosures set forth in our Form 10-K for the year ended December 31, 2008, as amended by Form 10-K/A (Amendment No. 1), except as required to reflect the additional information mentioned above. Additionally, this Amendment No. 2 does not update or discuss any other Company developments subsequent to the date of the Form 10-K filing for the year ended December 31, 2008.
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Table of Contents
| Part - Page | |
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Item 8. | Financial Statements and Supplementary Data | II-5 |
Item 9A(T). | Controls and Procedures | II-5 |
| PART IV |
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Item 15. | Exhibits and Financial Statement Schedules | IV-6 |
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Signatures |
| 8 |
Index to Exhibits |
| 9 |
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PART II
Item 8. Financial Statements and Supplementary Data
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
REGAN HOLDING CORP. AND SUBSIDIARIES
1. Organization and Summary of Significant Accounting Policies
p. Payment of Sales Commissions
Under the terms of Legacy's marketing agreements with each carrier, they provide that for the sales of insurance policies placed in-force, Legacy is paid a marketing allowance and commission override based on the premium amount of the underlying policy. Legacy is also responsible for facilitating payment of commissions from the carrier to the producer who sold the policy. Each producer is an independent contractor of Legacy and must be appointed with the carrier in order to receive such commission. Because Legacy’s role is to serve as an agent for the commission payment processing and to maintain a liability for any unpaid sales commissions, the Company pays the commissions to its producers but records the revenue based on the net amount retained.
Item 9A(T). Controls and Procedures
Disclosure Controls and Procedures
As of December 31, 2008, we performed an evaluation of the effectiveness of our disclosure controls and procedures that are designed to provide reasonable assurance that the material financial and non-financial information required to be disclosed in our annual report and filed with the SEC is recorded, processed, summarized and reported timely within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Act, of 1934 as amended, is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on our evaluation, our management, including our Chief Executive Officer and Chief Financial Officer has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of December 31, 2008, are effective at such reasonable assurance level. There can be no assurance that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions; (ii) provide reasonable assurance that transaction are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projects of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this evaluation, our management used the framework established in Internal Control – Integrated Framework issued
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by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that the Company’s internal controls over financial reporting were effective as of December 31, 2008.
This management report on internal control over financial reporting shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to an attestation report of the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting
During the most recent fiscal quarter, there have not been any significant changes in our internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)
Index to Exhibits and Financial Statement Schedules:
1.
The following financial statements are included in Item 8:
(i)
Reports of Independent Registered Public Accounting Firms.
(ii)
Consolidated Balance Sheet as of December 31, 2008 and 2007.
(iii)
Consolidated Statement of Operations for the years ended December 31, 2008, 2007, and 2006.
(iv)
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2008, 2007, and 2006.
(v)
Consolidated Statement of Cash Flows for the years ended December 31, 2008, 2007, and 2006.
(vi)
Notes to Consolidated Financial Statements.
2.
Financial statement schedules - schedule II - valuation and qualifying accounts (included in Item 8)
3.
See (b) below.
(b)
Exhibit Index
3(a)
Restated Articles of Incorporation. (2)
3(b)(2)
Amended and Restated Bylaws of the Company. (3)
4(a)
Amended and Restated Shareholders’ Agreement, dated as of June 30, 2003, by and among the Company, Lynda Regan, Alysia Anne Regan, Melissa Louise Regan and RAM Investments. (4)
10(a)
Form of Producer Agreement. (1)
10(b) *
401(K) Profit Sharing Plan & Trust dated July 1, 1994. (1)
10(c)
Producer Stock Award and Stock Option Plan, as amended. (5)
10(d)(1)
1998 Stock Option Plan, as amended. (5)
10(e)
Commercial Note between SunTrust Bank and the Company executed April 23, 2004. (7)
10(f)
Agreement of Purchase and Sale between Regan Holding Corp. and Basin Street Properties, dated July 25, 2005, and related Lease, dated November 18, 2005. (10)
10(g)
Amendment to Agreement of Purchase and Sale between Regan Holding Corp. and Basin Street Properties, dated November 14, 2005. (10)
10(h)
Credit Agreement between Legacy Marketing Group and Washington National Insurance Company dated July 20, 2006. (8)
10(i)
Asset Purchase Agreement between Prospectdigital LLC and PD Holdings LLC, dated January 25, 2007. (9)
10(j)
Asset Purchase Agreement between Transaction Applications Group, Inc. and Legacy Marketing Group, dated October 17, 2007. (11)
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10(k)
Lease Agreement between Regan Holding Corp. and Perot Systems Corporation, dated October 17, 2007. (11)
10(l)
License and Hosting Agreement between Transaction Applications Group, Inc. and Legacy Marketing Group, dated October 17, 2007. (11)
10(m)
Guaranty by Perot Systems Corporation of Payment and Obligations of Transaction Applications Group, Inc. under the Asset Purchase Agreement, dated October 17, 2007. (11)
10(n)
Guaranty by Regan Holding Corp. of Payment and Obligations of Legacy Marketing Group, Inc. under the Asset Purchase Agreement, dated October 17, 2007. (11)
10(o)
Marketing Agreement, effective June 5, 2002, between Investors Insurance Corporation and Legacy Marketing Group. (12)(15)
10(o)(1)
Amendment One to the Marketing Agreement with Investors Insurance Corporation. (15)
10(o)(2)
Amendment Two to the Marketing Agreement with Investors Insurance Corporation. (15)
10(p)
Marketing Agreement, effective November 15, 2002, between American National Insurance Company and Legacy Marketing Group. (13)(15)
10(p)(1)
Amendment One to the Marketing Agreement with American National Insurance Company. (14)
10(p)(2)
Amendment Two to the Marketing Agreement with American National Insurance Company. (15)
10(p)(3)
Amendment Three to the Marketing Agreement with American National Insurance Company. (15)
10(p)(4)
Amendment Four to the Marketing Agreement with American National Insurance Company.
10(q)
Marketing Agreement, effective June 1, 2004, between OM Financial Life Insurance Company (Americom) and Legacy Marketing Group. (15)
10(q)(1)
Amendment One to the Marketing Agreement with OM Financial Life Insurance Company (Americom). (15)
10(q)(2)
Amendment Two to the Marketing Agreement with OM Financial Life Insurance Company (Americom).
10(q)(3)
Amendment Three to the Marketing Agreement with OM Financial Life Insurance Company (Americom). (15)
10(r)
Sale of Partnership Interest, effective March 26, 2008, between Legacy TM, LP and Legacy Marketing Group.
10(r)(1)
Purchase Pledge and Guaranty to the Sale of Partnership Interest, effective March 26, 2008, between Legacy TM, LP and R. Preston Pitts and Lynda Pitts, individually.
10(s)
Line of Credit Promissory Note, effective September 8, 2008, between Regan Holding Corp. and Lynda and Preston Pitts.
10(t)
Amended and Restated Key Employee Deferred Compensation Plan, effective December 5, 2008.
10(u)
Amended and Restated Producer Commission Deferral Plan, effective December 5, 2008.
10(v)
Marketing Agreement, effective October 10, 2005, between Conseco Marketing, LLC (Washington National Insurance Company) and Legacy Marketing Group. (15)
10(v)(1)
Work Order One to the Marketing Agreement with Conseco Marketing, LLC (Washington National Insurance Company). (15)
10(v)(2)
Amendment One to the Marketing Agreement with Conseco Marketing, LLC (Washington National Insurance Company).
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Subsidiaries of Regan Holding Corp.
31.1
Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.
31.2
Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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*
Management contract, compensatory plan or arrangement.
(1)
Incorporated herein by reference to the Company’s annual report on Form 10-K for the year ended December 31, 1994.
(2)
Incorporated herein by reference to the Company’s quarterly Form 10-Q for the quarter ended September 30, 1996.
(3)
Incorporated herein by reference to the Company’s quarterly Form 10-Q for the quarter ended September 30, 2000.
(4)
Incorporated herein by reference to the Company’s quarterly Form 10-Q for the quarter ended June 30, 2003.
(5)
Incorporated herein by reference to the Company’s Definitive Proxy Statement dated July 31, 2001.
(6)
Incorporated herein by reference to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2002.
(7)
Incorporated herein by reference to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2004.
(8)
Incorporated herein by reference to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2006.
(9)
Incorporated herein by reference to the Company’s current report on Form 8-K filed on January 25, 2007.
(10)
Incorporated herein by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005.
(11)
Incorporated herein by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007.
(12)
Incorporated herein by reference to the Company’s registration statement on Form S-2 (post-effective amendment no. 5) dated July 23, 2004.
(13)
Incorporated herein by reference to the Company’s current report on Form 8-K filed on January 30, 2004.
(14)
Incorporated herein by reference to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2003.
(15)
Portions of this exhibit have been redacted and filed separately with the Securities and Exchange Commission in connection with a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REGAN HOLDING CORP.
By: /s/ Lynda L. Pitts
Date: October 16, 2009
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Lynda L. Pitts
Chairman of the Board of Directors and
Chief Executive Officer
By: /s/ R. Preston Pitts
Date: October 16, 2009
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R. Preston Pitts
Principal Accounting and Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Lynda L. Pitts
Date: October 16, 2009
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Lynda L. Pitts
Chairman of the Board of Directors and Chief
Executive Officer (Principal Executive Officer)
By: /s/ R. Preston Pitts
Date: October 16, 2009
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R. Preston Pitts
Director, President
(Principal Financial and Accounting Officer)
By: /s/ Donald Ratajczak
Date: October 16, 2009
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Donald Ratajczak
Director
By: /s/ Ute Scott-Smith
Date: October 16, 2009
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Ute Scott-Smith
Director
By: /s/ J. Daniel Speight, Jr.
Date: October 16, 2009
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J. Daniel Speight, Jr.
Director
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INDEX TO EXHIBITS
Number
Description
10(o)(1)
Amendment One to the Marketing Agreement with Investors Insurance Corporation. (15)
10(o)(2)
Amendment Two to the Marketing Agreement with Investors Insurance Corporation. (15)
10(p)(2)
Amendment Two to the Marketing Agreement with American National Insurance Company. (15)
10(p)(3)
Amendment Three to the Marketing Agreement with American National Insurance Company. (15)
10(p)(4)
Amendment Four to the Marketing Agreement with American National Insurance Company.
10(q)
Marketing Agreement, effective June 1, 2004, between OM Financial Life Insurance Company (Americom) and Legacy Marketing Group. (15)
10(q)(1)
Amendment One to the Marketing Agreement with OM Financial Life Insurance Company (Americom). (15)
10(q)(2)
Amendment Two to the Marketing Agreement with OM Financial Life Insurance Company (Americom).
10(q)(3)
Amendment Three to the Marketing Agreement with OM Financial Life Insurance Company (Americom). (15)
10(r)
Sale of Partnership Interest, effective March 26, 2008, between Legacy TM, LP and Legacy Marketing Group.
10(r)(1)
Purchase Pledge and Guaranty to the Sale of Partnership Interest, effective March 26, 2008, between Legacy TM, LP and R. Preston Pitts and Lynda Pitts, individually.
10(s)
Line of Credit Promissory Note, effective September 8, 2008, between Regan Holding Corp. and Lynda and Preston Pitts.
10(t)
Amended and Restated Key Employee Deferred Compensation Plan, effective December 5, 2008.
10(u)
Amended and Restated Producer Commission Deferral Plan, effective December 5, 2008.
10(v)
Marketing Agreement, effective October 10, 2005, between Conseco Marketing, LLC (Washington National Insurance Company) and Legacy Marketing Group. (15)
10(v)(1)
Work Order One to the Marketing Agreement with Conseco Marketing, LLC (Washington National Insurance Company). (15)
10(v)(2)
Amendment One to the Marketing Agreement with Conseco Marketing, LLC (Washington National Insurance Company).
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Subsidiaries of Regan Holding Corp.
31.1
Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.
31.2
Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act.
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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(15)
Portions of this exhibit have been redacted and filed separately with the Securities and Exchange Commission in connection with a request for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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