<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO _________
AMERICAN BANKERS INSURANCE GROUP, INC.
11222 QUAIL ROOST DRIVE
MIAMI, FLORIDA 33157
(305) 253-2244
Commission File Number: 0-9633
State of Incorporation: Florida
I.R.S. Employer Identification Number: 59-1985922
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 report), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
------ -----
Common Stock - Par Value $1.00
20,428,189 Shares Outstanding on April 24, 1996
1
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Form 10-Q
Company or group of companies for which report is filed:
AMERICAN BANKERS INSURANCE GROUP, INC.
This quarterly report, filed pursuant to Rule 13A-13 of the General Rules and
Regulations under the Securities Exchange Act of 1934, consists of the
following information as specified in Form 10-Q.
Part I - Financial Information
Item 1 - Financial Statements
1. Consolidated Balance Sheets, March 31, 1996 and December 31, 1995.
2. Consolidated Statements of Income for the three months ended March
31, 1996 and 1995.
3. Consolidated Statements of Cash Flows for the three months ended
March 31, 1996 and 1995.
4. Notes to Consolidated Financial Statements.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Part II - Other Information
Item 1 - Legal Proceedings
Item 4 - Submission of matters to a vote of security holders
Item 6 - Exhibits and Reports
a. Exhibits.
The following exhibits are included herein:
(3b) Corporate By-Laws, Amended and Restated
(11) Statement re: computation of earnings per share.
(27) Financial Data Schedule (for SEC use only).
b. Report on Form 8-K.
None
2
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Form 10-Q
SIGNATURE
Pursuant to the requirements 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 BANKERS
INSURANCE GROUP, INC.
May 10, 1996
Date /s/ Arthur W. Heggen
----------------------
Arthur W. Heggen
Vice President
and Treasurer
3
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PART I
FINANCIAL INFORMATION
4
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AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
Assets (unaudited)
- ------
<S> <C> <C>
Investments
Held-to-Maturity securities, at amortized cost $ 668,651 $ 594,277
Available-for-Sale securities, at approximate market value 785,898 793,277
Equity securities, at approximate market value 114,709 113,028
Mortgage loans on real estate 11,647 11,793
Policy loans 7,929 7,819
Short-term and other investments 187,045 168,216
------------ -------------
Total investments 1,775,879 1,688,410
Cash 10,370 23,257
Accounts receivable, net of allowance for doubtful
accounts of $5,052 in 1996 and $5,024 in 1995 131,588 130,970
Reinsurance receivable 163,240 168,128
Accrued investment income 20,100 20,943
Deferred policy acquisition costs 339,498 310,879
Prepaid reinsurance premiums 504,052 502,312
Other assets 177,196 142,835
------------ -------------
Total assets $ 3,121,923 $ 2,987,734
============ =============
Liabilities, Common Stock and
- -----------------------------
Other Stockholders' Equity
--------------------------
Policy liabilities $ 279,257 $ 275,250
Unearned premiums 1,216,990 1,178,867
Claim liabilities 426,009 404,745
------------ -------------
1,922,256 1,858,862
Other policyholders' funds 7,271 7,113
Notes payable 256,450 235,981
Deferred income taxes 28,255 29,549
Accrued commissions and other expenses 156,103 136,174
Other liabilities 226,839 207,058
------------ -------------
Total liabilities 2,597,174 2,474,737
------------ -------------
Commitments and Contingencies (Note 4)
Common Stock and Other Stockholders' Equity
- -------------------------------------------
Common stock of $1 par value. Authorized 35,000 shares.
Issued and outstanding: 1996-20,476 shares; 1995-20,384 shares 20,476 20,384
Additional paid-in capital 216,283 215,121
Net unrealized investment and foreign exchange (losses) gains (891) 7,255
Retained earnings 299,557 282,748
Less:
Treasury stock, at cost - 93 shares in 1996 and 136 shares in 1995 (1,426) (2,516)
Unamortized restricted stock (3,406) (3,620)
Collateralization of loan to Leveraged Employee
Stock Ownership Plan (5,844) (6,375)
------------ -------------
Total common stock and other stockholders' equity 524,749 512,997
------------ -------------
Total liabilities, common stock and other
stockholders' equity $ 3,121,923 $ 2,987,734
============ =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
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AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(IN THOUSANDS EXCEPT PER COMMON SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Gross collected premiums $ 604,649 $ 469,106
============ =============
Premiums and other revenues:
Net premiums earned $ 341,854 $ 284,553
Net investment income 27,439 21,791
Realized investment gains (losses) 1,029 (1,333)
Other income 5,375 4,764
------------ -------------
Total premiums and other revenues 375,697 309,775
------------ -------------
Benefits and expenses:
Net benefits, claims, losses and settlement expenses 147,358 105,357
Commissions 127,694 119,621
Operating expense 65,657 59,662
Interest expense 4,101 3,503
------------ -------------
Total benefits and expenses 344,810 288,143
------------ -------------
Income before taxes 30,887 21,632
------------ -------------
Income tax expense (benefit):
Current 7,299 7,456
Deferred 2,952 (695)
------------ --------------
10,251 6,761
------------ -------------
Net Income
$ 20,636 $ 14,871
============ =============
PER COMMON SHARE AND COMMON EQUIVALENT SHARE DATA
Primary:
Net Income $ .99 $ .72
=========== ============
Weighted average number of shares outstanding 20,929 20,728
=========== ============
Fully diluted:
Net Income $ .99 $ .72
=========== ============
Weighted average number of shares outstanding 20,976 20,745
=========== ============
Dividends per common share $ .19 $ .18
=========== ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
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AMERICAN BANKERS INSURANCE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 20,636 $ 14,871
Adjustments to reconcile net income to net cash provided
by operating activities:
Change in policy liabilities, unearned premiums, claim
liabilities, reinsurance receivable and prepaid reinsurance premiums 66,543 18,156
Change in other assets and other liabilities (13,240) (11,913)
(Increase) decrease in accounts receivable (618) 5,177
Decrease (increase) in accrued investment income 843 (1,336)
Increase in accrued commission and expenses 19,929 6,442
Increase (decrease) in policyholders' funds 158 (1,627)
Increase in policy loans (110) (441)
Amortization of deferred policy acquisition costs 127,753 104,635
Amortization of cost of insurance acquired 481 639
Policy acquisition costs deferred (156,372) (108,986)
Provision for amortization and depreciation 4,189 3,242
Provision for deferred income taxes 2,952 (695)
Net (gain) loss on sale of investments (1,029) 1,333
Compensation on option plans shares exercised 477 340
Net cash flow from purchases and sales of trading securities (5,884) (525)
-------- --------
Net cash provided by operating activities 66,708 29,312
-------- --------
INVESTING ACTIVITIES:
Purchase of investments
Held-to-maturity securities (91,900) (59,431)
Available-for-sale securities (38,126) (111,340)
Mortgage loans - (385)
Proceeds from sale of investments
Held-to-maturity securities - -
Available-for-sale securities 21,412 14,495
Mortgage loans 149 375
Proceeds from maturities of investments
Held-to-maturity securities 22,302 33,476
Available-for-sale securities 11,557 4,067
(Increase) decrease in short-term investments (18,925) 14,870
Transactions related to capital assets
Capital expenditures (3,689) (1,861)
Sales of capital assets 255 92
-------- --------
Net cash used in investing activities (96,965) (105,642)
-------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of debt 58,000 10,000
Repayment of debt (37,000) (5,000)
Dividends paid to shareholders (3,829) (3,627)
Proceeds from issuance of common stock 334 100
Purchase of treasury stock (175) -
-------- --------
Net cash provided by financing activities 17,330 1,473
-------- --------
Net decrease in cash (12,927) (74,857)
Cash at beginning of period 23,257 89,536
Rate Change effect on Cash Flow 40 25
-------- --------
Cash at end of period
$ 10,370 $ 14,704
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 2,904 $ 1,882
Income taxes $ 12,043 $ 2,625
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
7
<PAGE> 8
AMERICAN BANKERS INSURANCE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
1. Financial Statements
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the period ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1996. These statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report Form 10-K for the year ended December 31, 1995. Certain items have
been reclassed to conform with 1996 presentation.
2. Translation of Foreign Currencies
Unrealized foreign exchange losses, totaling $12,207,000 and $12,668,000
as of March 31, 1996 and December 31, 1995 respectively, are included in
Other Stockholders' Equity under the caption "Net unrealized investment
and foreign exchange (losses) gains."
3. Reinsurance
The Company accounts for reinsurance contracts under Financial Accounting
Standards Board's Statement 113. The Company recognizes the income on
reinsurance contracts principally on a pro-rata basis over the life of the
policies covered under the reinsurance agreements. Reinsurance
Recoverables on Unpaid Losses are included as an asset in the Balance
Sheet under the caption "Reinsurance Receivables". Ceded Unearned Premiums
are included as an asset in the Balance Sheet under the caption "Prepaid
Reinsurance Premiums".
The effect of reinsurance on premiums earned is as follows for the three
months ended March 31, 1996 and 1995:
<TABLE>
<CAPTION>
(in thousands)
Three Months Ended
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Direct premiums $ 537,903 $ 427,977
Reinsurance assumed 19,435 34,856
Reinsurance ceded (215,484) (178,280)
----------- ------------
Net premiums earned $ 341,854 $ 284,553
=========== ============
</TABLE>
Reinsurance ceded incurred losses for the three months ended March 31,
1996 and 1995 were $82,919,000 and $61,404,000 respectively.
8
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4. Commitments and Contingencies
For a comprehensive description of the Company's litigation, see Item
III of the Company's 1995 Form 10-K.
Other: Alabama litigation
The Company and certain of its insurance subsidiaries are presently
parties to a number of individual consumer and class action lawsuits
pending in Alabama involving premium, rate and policy coverage issues.
As has been widely reported in the news media, the insurance and finance
industries have been targeted in Alabama by plaintiffs' lawyers who
enjoy a favorable judicial climate. The Company typically has been named
as a co- defendant with one or several retailer or finance companies who
have sold the Company's product to a consumer. A number of other credit
insurers are named as co-defendants in many of the suits.
Although these lawsuits generally involve relatively small amounts of
actual or compensatory damages, they typically assert claims requesting
substantial punitive awards. The Company denies any wrongdoing in any of
these suits and believes that it has not engaged in any conduct that
would warrant an award of punitive damages. The Company has been
advised by legal counsel that it has meritorious defenses to all claims
being asserted against it.
While no one case is necessarily significant in terms of financial risk
to the Company, the judicial climate in Alabama is such that the outcome
of these cases is extremely unpredictable. Without admitting any
wrongdoing, the Company has settled a number of these suits, but there
are still a significant number of cases pending, and it is expected that
more suits alleging essentially the same causes of action are likely to
continue to be filed during 1996. The Company intends to continue to
defend itself vigorously against all such suits and believes, based on
information currently available, that any liabilities that could result
are not expected to have a material effect on the Company's financial
position.
The Company is involved with a number of cases in the ordinary course of
business relating to insurance matters or, more infrequently, certain
corporate matters. Generally, the Company's liability is limited to
specific amounts relating to insurance or policy coverage for which
provision has been made in the financial statements. Other cases
involve general corporate matters which generally do not represent
significant contingencies for the Company.
9
<PAGE> 10
5. Segment Information
Gross collected premiums, net premiums earned and income (loss) before
federal income taxes are summarized as follows:
<TABLE>
<CAPTION>
(in thousands)
Three Months Ended
March 31,
---------
1996 1995
-------- --------
<S> <C> <C>
GROSS COLLECTED PREMIUMS:
Life $ 178,091 $ 134,402
Property and Casualty 426,558 334,704
------------ ----------
Total $ 604,649 $ 469,106
============ ==========
NET PREMIUMS EARNED:
Life $ 101,164 $ 87,183
Property and Casualty 240,690 197,370
------------ ----------
Total $ 341,854 $ 284,553
============ ==========
INCOME (LOSS) BEFORE INCOME TAXES:
Life $ 16,333 $ 12,195
Property and Casualty 22,789 15,936
Other (4,134) (2,996)
------------- ----------
34,988 25,135
Interest Expense 4,101 3,503
------------ ----------
Total Income $ 30,887 $ 21,632
============ ==========
</TABLE>
6. Accounting for Investments
The Company accounts for its investments according to the Financial
Accounting Standards Board's Statement 115 - Accounting for Certain
Investments in Debt and Equity Securities.
This Statement addresses the accounting and reporting for investments in
equity securities that have readily determinable fair values and for all
investments in debt securities. Those investments are to be classified
in three categories and accounted for as follows:
Held-to-Maturity - Securities for which the enterprise has the positive
intent and ability to hold to maturity. These securities are carried at
amortized cost.
Trading Securities - Securities that are bought and held principally for
the purpose of selling them in the near term. These securities are
carried at market value with the unrealized holding gain or loss included
in earnings.
Available-for-Sale - Securities not classified as trading or
held-to-maturity. These securities are carried at market value with the
unrealized holding gain or loss reported as a separate component of
equity, net of the income tax effect.
10
<PAGE> 11
The detail of Cost and Statement Value for the Fixed Maturities and Equity
Securities held at March 31, 1996 is as follows:
<TABLE>
<CAPTION>
(in thousands)
Amortized Statement
Cost Value
----------- ----------
<S> <C> <C>
Fixed Maturities
- ----------------
Held-to-Maturity Securities $ 668,651 $ 668,651
Available-for-Sale Securities 783,415 785,898
Trading Securities - -
------------ -----------
Total Fixed Maturities $ 1,452,066 $ 1,454,549
============ ===========
Net unrealized gain $ 2,483
===========
Market
Cost Value
----------- -----------
Equity Securities
- -----------------
Held-to-Maturity Securities $ - $ -
Available-for-Sale Securities 99,581 114,709
Trading Securities - -
------------ -----------
Total Equity Securities $ 99,581 $ 114,709
============ ===========
Net unrealized gain $ 15,128
===========
</TABLE>
The net unrealized gain for "Available-for-Sale Securities" decreased by
$8,662,000 (net of $4,028,000 in deferred income taxes) from December 31, 1995
to March 31, 1996. There were no unrealized gains and losses from transfers of
Held-to-Maturity Securities.
An analysis of the realized gains and losses of the Company for the three
months ended March 31, 1996 is as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Gross realized gains from sales of Available-for-Sale Securities $ 2,558
Gross realized losses from sales of Available-for-Sale Securities (1,436)
----------
Net realized gain from investment activity 1,122
Net realized loss from other investment activity (93)
----------
Total realized gain $ 1,029
==========
</TABLE>
The Company uses the specific identification method to determine cost for
computing the realized gains and losses. There were no transfers of securities
from Available-for-Sale to Trading for the three months ended March 31, 1996.
11
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AMERICAN BANKERS INSURANCE GROUP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Gross collected premiums increased $135.5 million or 29% to $604.6 million for
the three months ended March 31, 1996, from $469.1 million for the same period
of 1995. The Company's unemployment product line continues to perform well
contributing 22% or $30.3 million of the increase in gross collected premium.
Also contributing to the increase is the Company's extended service contract
products that approximate $50.2 million representing 8% of the gross collected
premium for the three months.
During the three months ended March 31, 1996, total premiums and other revenues
were $375.7 million, an increase of $65.9 million over total premiums and other
revenues of $309.8 million for the same period in 1995. The increase includes a
$57.3 million increase in net premiums earned resulting generally from the
premium growth experienced by the Company's existing clients. Despite the lower
interest rate environment, the increase also included $5.6 million additional
investment income during the first quarter of 1996 as compared to the same
period of 1995, due to the overall growth in invested assets.
The benefits and claims ratio increased to 43% for the three months ended
March 31, 1996, compared to the favorable ratio of 37% for the same period of
1995. However, this decline was offset by a reduction in the commissions ratios
from 42% for the three months ended March 31, 1995, to 37% for the same period
of 1996.
The effective tax rate increased from 31.2% for the three months ended March
31, 1995, compared to 33.2% for the same period of 1996. The increased rate is
primarily attributable to the increased proportion of profits derived from our
U.S. business which is taxed at the statutory rate of 35%.
The increase in interest expense from $3.5 million to $4.1 million reflects the
effects of higher debt levels ($256.5 million at March 31, 1996, versus $202.3
million at March 31, 1995).
The legal environment in Alabama has received national news attention and the
Alabama legislature is considering tort reform. The insurance industry has been
targeted and changes, if any, cannot be predicted. For this reason Alabama
litigation continues to represent an ongoing issue.
Financial Condition
Total assets at March 31, 1996, and December 31, 1995, were $3.1 billion and
$3.0 billion, respectively. Invested assets at the same date were $1.8 billion
and $1.7 billion, respectively. As of March 31, 1996, mortgage loans and
investment in real estate pertaining to Florida properties were $8.8 million,
which represents 67% of the total mortgage loans and real estate portfolio.
Liabilities were $2.6 billion and $2.5 billion at March 31, 1996, and at
December 31, 1995, respectively, and were primarily comprised of insurance
liabilities of $1.9 billion.
Stockholders' Equity increased $11.7 million from $513.0 million at December
31, 1995, to $524.7 million at March 31, 1996. The contribution of net income
after dividends of $16.8 million was the primary cause for the increase. This
was offset partially by an increase in the unrealized investment losses
recorded by the Company. The increase in unrealized investment losses was a
result of the impact of the declining interest rate environment on the market
values of the Company's investment portfolio.
12
<PAGE> 13
Liquidity and Capital Resources
On March 31, 1996, $1.8 billion of securities, short-term investments and cash
comprised 57% of the Company's total assets. The securities were principally
readily marketable and did not include any significant concentration in private
placements.
The Company does not hold significant investments in equity securities;
consequently, market changes in the equity securities markets do not
significantly affect the investment portfolio.
The Company expects to continue its policy of paying regular cash dividends;
however, future dividends are dependent on the Company's future earnings,
capital requirements and financial condition. In addition, the payment of
dividends is subject to the restrictions described in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
The increase in Notes Payable of $20.5 million was mostly attributable to the
use of the Company's $250 million short-term credit facility. At March 31,
1996, the Company had $108 million outstanding related to this agreement.
Private Securities Litigation Reform Act of 1995 - Safe Harbor Cautionary
Statement
Except for the historical information contained herein, certain of the matters
discussed in this quarterly report are "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995, which involve certain
risks and uncertainties, including but not limited to, changes in general
economic conditions, interest rates, consumer confidence, competition,
environmental factors, and government regulations affecting the Company's
operations. See the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 for a further discussion of these and other risks and
uncertainties applicable to the Company's business.
13
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PART II
OTHER INFORMATION
14
<PAGE> 15
Item 1 - Legal Proceedings
Commitments and Contingencies information which appears on page 9 elsewhere in
this report is incorporated by reference in this item. Additional information
regarding litigation can be found in the Company's 1995 Annual Report on Form
10-K.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
15
<PAGE> 1
EXHIBIT 3b
ARTICLE I
MEETINGS
SECTION 1. ANNUAL MEETINGS
The Annual Meeting of the stockholders of the Corporation shall be held at the
principal office of the Corporation in the state of Florida or at such other
place within or without the state of Florida as may be determined by the Board
of Directors and as may be designated in the notice of such meeting. The
meeting shall be held during the month of May in each year on such date as the
Board of Directors may designate at a meeting held not less than 60 days prior
to the date so designated for the Annual Meeting. The business to be
transacted at such meeting shall be the election of Directors and such other
business as may be properly brought before the meeting.
SECTION 2. SPECIAL MEETINGS
Special Meetings of the stockholders may be held any place within or
without the state of Florida upon call of the Board of Directors, the Executive
Committee, the Chief Executive Officer, or when requested in writing by the
holders of not less than 75% of all the Voting Shares, as defined in Article
VII of the Articles of Incorporation of the Corporation entitled to vote at the
meeting (such meeting, if requested by the stockholders, to be held at the
office of the Corporation), at such time as may be fixed by the Board of
Directors or the Executive Committee or the Chief Executive Officer or such
stockholders, as may be stated in the call and notice.
SECTION 3. NOTICE OF MEETINGS
Written notice of the time, place and purpose, or purposes of every
meeting of shareholders shall be delivered not less than ten (10) nor more than
sixty (60) days before the meeting, either personally or by mail (the act of
mailing being deemed completed service), by or at the direction of the
President, the Secretary, or the officer or persons calling the meeting to each
stockholder of record entitled to vote at such meeting, and upon any
stockholder who, by reason of any action proposed at such meeting, would be
entitled to have his shares of stock appraised if such action be taken. If
mailed, such notice shall be directed to such stockholder at his last address
as its appears on the stock books of the Corporation unless he shall have filed
with the Secretary of Corporation a written request that notices intended for
him be mailed to the address designated in such request. Such further notice
shall be given by mail, publication or otherwise, as may be required by the
Articles of Incorporation of the Corporation, by resolution of the Board of
Directors or Executive Committee or by law.
<PAGE> 2
SECTION 4. QUORUM
A majority of the shares entitled to vote represented in person or by
proxy shall constitute a quorum at the meeting of stockholders. If a quorum is
present, the affirmative vote of the majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the act of all
stockholders unless otherwise provided by statute or the Articles of
Incorporation of the Corporation. If at any meeting of stockholders, there
should be less than a full quorum present, the stockholders of the majority of
the shares of stock entitled to vote so present or represented may adjourn the
meeting from time to time without notice other than announcement at the meeting
until a quorum shall have been obtained, when any business may be transacted
which might have been transacted at the meeting as first convened had there
been a full quorum.
SECTION 5. VOTING
At all meetings of the stockholders, each holder of record of
outstanding shares of the stock of the Corporation entitled to vote thereat may
so vote either in person or by proxy appointed by instrument in writing
executed by such holder or his duly authorized attorney. No proxy shall be
valid after the expiration of eleven (11) months from the date thereof, unless
the stockholder executing it shall have specified therein a longer time during
which it is to continue in force.
SECTION 6. RECORD OF SHAREHOLDERS
For the purpose of determining stockholders entitled to notice of or
to vote at any meeting of stockholders or any adjournment thereof, or entitled
to receive payment of any dividend or in order to make a determination of
stockholders for any other purpose, the Board of Directors may provide that the
stock transfer books shall be closed for a stated period but not to exceed, in
any case, sixty (60) days. if the stock transfer book shall be closed for the
purpose of determining stockholders entitled to notice of or to vote at a
meeting of stockholders, such books shall be closed for at least ten (10) days
immediately preceding the meeting.
In lieu of closing the stock transfer books, the Board of Directors
may fix in advance a date as the record date for any determination of
stockholders, such date in any case not more than sixty (60) days and, in case
of a meeting, not less than ten (10) days prior to the date on which the
particular action requiring such determination of stockholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of stockholders entitled to notice of or to vote at a
meeting of stockholders, or stockholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date of such determination of
stockholders.
When the determination of stockholders entitled to vote at any meeting
of stockholders has been made as provided in this section, such determination
shall apply to any new record date for the adjourned meeting.
-2-
<PAGE> 3
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. NUMBER AND QUALIFICATIONS
The number of Directors constituting the entire Board of the
Corporation shall be not less or more than as authorized by the Articles of
Incorporation of the Corporation, and shall be fifteen (15) until otherwise
determined by the resolution adopted by affirmative vote of a majority of the
entire Board of Directors.
SECTION 2. MEETINGS OF THE BOARD
The Board of Directors shall hold its Annual Meeting as set forth in
Section 3 hereafter. Special Meetings of the Board may be held at any time and
at any place within or without the continental United States upon the call of
the Chairman of the Board, the Chief Executive Officer of the Corporation, or
any two Directors. Except with respect to the Annual Meeting of Directors,
notice of all Directors' Meetings, whether regular or special, shall be given
to each Director by either personal delivery, mail, facsimile, telegram or
cablegram at least two (2) days before the meeting unless waived pursuant to
Section 8 hereafter.
SECTION 3. ANNUAL MEETING OF DIRECTORS
The Annual Meeting of the Board of Directors shall be held on the same
date and in the same place as the Annual Stockholders' meeting and shall
convene immediately after the conclusion of the Annual Meeting of the
Stockholders. No notice of such meeting shall be required.
SECTION 4. QUORUM
-3-
<PAGE> 4
The attendance of not less than a majority of the number of Directors
at the time constituting the full Board of Directors in accordance with the
Articles of Incorporation of the Corporation and these By-Laws shall be
necessary to constitute a regular quorum for the transaction of business;
provided; however, that if the attendance at such meeting is less than that
required for a regular quorum as aforesaid but is one-third (1/3) or more of
the full Board of Directors, the number so present shall constitute a special
quorum which may proceed to adopt resolutions or take other action which;
however, shall not be binding upon the Corporation until such resolutions or
actions respectively have been approved in writing by a sufficient number of
Directors (in addition to those voting therefore at the meeting) to constitute
a total of not less than a majority of the full Board. When such resolutions
or other action has been presented in writing to any absent Director or
Directors, such resolutions, or other actions shall be deemed approved by said
absent Director unless his disapproval is received in writing by the Secretary
within fifteen (15) days after receipt by such Director of such resolutions or
other action. Any action taken at a meeting at which a quorum is present shall
require consent and approval of at least a majority of the full Board. If at
any meeting of the Board, there shall be less than a full quorum present, a
majority of the Directors present may adjourn the meeting from time to time
without notice other than announcement at the meeting until a quorum shall have
been obtained, when any business may be transacted which might have been
transacted at the meeting as first convened had there been a full quorum.
SECTION 5. VACANCIES AND REMOVAL
Vacancies in the Board of Directors shall be filled as prescribed by
the Articles of Incorporation of the Corporation. The Directors so chosen
shall hold office until the next election of the class for which such directors
shall have been chosen and until their successors shall be elected and
qualified. Directors may be removed and vacancies caused by their removal may
be filled as prescribed by the Articles of Incorporation of the Corporation,
and new Directors so chosen shall hold office until the next election of the
class for which such Directors shall have been chosen and until their
successors shall be elected and qualified.
SECTION 6. COMPENSATION
Each Director of the Corporation and each member of the Executive
Committee, the Building Committee, the Compensation and Nominating Committee,
the Audit Committee, the Planning Committee, the Audit Committee, or any
special committee shall receive such compensation as the Board may by
resolution determine to be proper and reasonable. Nothing herein shall
preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor. Directors residing outside the county in
which any meeting of the Board of Directors is held shall be entitled to
reimbursement for reasonable expenses of attending such meeting or meetings.
SECTION 7. INDEMNITY
The Corporation shall indemnify each Director and Officer and may, by
action of the Board of Directors, indemnify other employees, and agents to the
fullest extent permitted under Florida Statutes now or hereafter in force.
SECTION 8. WAIVER OF NOTICE
-4-
<PAGE> 5
A Director may waive in writing notice of a special meeting of the
Board either before or after the meeting; and his waiver shall be deemed the
equivalent of his having been given notice. Attendance of a Director at a
meeting shall constitute waiver of notice at that meeting unless he attends for
the express purpose of objecting to the transaction of business because the
meeting has not been lawfully called or convened.
-5-
<PAGE> 6
ARTICLE III
OFFICER
SECTION 1. OFFICERS AND AGENTS
The Board of Directors, at its Annual Meeting, shall elect from its
members a Chief Executive Officer of the Corporation, a President, a Chairman
of the Board of Directors, and a chairman for each committee of the Board. The
Board of Directors shall also elect at such meeting Vice Presidents, the
Secretary, the Treasurer, and such other officers as it may deem appropriate.
Any two or more offices may be held by the same person provided; however, that
the office of President and Secretary or Assistant Secretary may not be held by
the same person.
SECTION 2. TERM OF OFFICE
The term of office of all officers shall be one (1) year and until their
respective successors are chosen and qualified, but any officer or agent
elected or appointed by the Board of Directors may be removed, with or without
cause, at any time by the affirmative vote of the majority of the full Board of
Directors.
SECTION 3. GENERAL POWERS AND DUTIES
The officers, agents, and employees of the Corporation shall each have such
powers and duties in the management of the property and affairs of the
corporation, subject to the control of the Board of Directors, as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be prescribed by the Board of Directors. The Board of
Directors may require any such officer, agent, or employee to give security for
the faithful performance of his duties.
SECTION 4. SPECIAL POWERS AND DUTIES OF OFFICERS
Without modifying or limiting the general powers and the duties authorized
and assigned by Section 3 above, the following named officers shall have the
following special powers and duties, provided; however, that the Board of
Directors or Executive Committee may, by resolution, shift, consolidate, change
or eliminate any of said powers or duties, except where such duties or powers
are set by the laws of the state of Florida.
CHAIRMAN OF THE BOARD
The Chairman of the Board shall preside as Chairman at all meetings of the
Board of Directors and shall perform such other duties as may be assigned him
by the Board of Directors, the Executive Committee, or the Chief Executive
Officer of the Corporation. In the absence of the Chairman, the Vice Chairman,
if there be one, shall preside over meetings of the Board of Directors, and
shall have such other duties as may be assigned to him by the Board of
Directors, the Executive Committee, or the Chief Executive Officer of the
Corporation.
-6-
<PAGE> 7
CHIEF EXECUTIVE OFFICER
The Chief Executive Officer shall preside at all meetings of the
stockholders, shall be charged with supervision of the offices of the
Corporation and of its personnel, shall have responsibility for the general and
active management of the business of the Corporation, and shall see that all
the orders and resolutions of the Board are carried into effect, subject;
however, to the right of the Board to delegate any specific powers to any other
officer or officers of the Corporation.
PRESIDENT
The President, in the absence or disability of the Chief Executive Officer,
shall act in his stead and place and shall discharge the duties of Chief
Executive Officer and possess his powers. At the direction of the Board of
Directors or the Executive Committee, he may assume charge and supervision of
the offices of the Corporation and of its personnel and may actively supervise
and direct the conduct of its business. He shall also perform such other
duties as may be assigned to him by the Board, the Executive Committee or the
Chief Executive Officer. The President may also execute contracts in the name
of the Corporation and appoint and discharge agents and employees. The
President shall be responsible to the Chief Executive Officer.
EXECUTIVE VICE PRESIDENT AND OTHER VICE PRESIDENTS.
The Board may designate and appoint an Executive Vice President, who, in the
absence or disability of the President, shall act in the stead and place, and
shall discharge the duties of the President and possess his powers. At the
direction of the Board of Directors or the Executive Committee, he may assume
charge and supervision of the offices of the Corporation and of its personnel,
and may actively supervise and direct the conduct of its business. He shall
also perform such other duties as may be assigned to him by the Board, the
Executive Committee, the Chief Executive Officer, or the President as shall any
other Vice Presidents of the Corporation.
The Board may designate and appoint such other Vice presidents as it may, in
its discretion, choose to do.
In the absence or disability of the Chief Executive Officer, the President
and of the Executive Vice President, any other Vice President designated by the
Board of Directors or the Executive Committee may discharge the duties of the
Chief Executive Officer and shall possess his powers.
TREASURER
The Treasurer shall have custody of all funds and securities of the
Corporation which may come into his hands; shall be charged with the
maintenance and supervision of the accounts and financial records and reports;
and shall be charged with the preparation and filing of all tax returns. When
necessary or proper, he shall endorse on behalf of the corporation for
collection, checks, notes and other obligations, and shall deposit same to the
credit of the Corporation. He shall see that all balances due to the
Corporation by its agents and brokers, or otherwise, are promptly paid and
shall promptly report to the Chief Executive Officer any unusual delay in such
payments, as well as any default in the payment of rent or of interest or
principal on any and all investments belonging to the Corporation. He shall
keep faithful and accurate account of all receipts and expenditures and of all
other items which enter into the accounting requirements of the Corporation,
and when requested, shall render, furnish and submit such financial statements,
-7-
<PAGE> 8
balance sheets, profit and loss statements or other accounting reports and
schedules as the Board, the Executive Committee, or the Chief Executive Officer
may direct. He shall also supervise the statistical work and records of the
Corporation. He shall also perform such other duties as may be assigned to him
by the Board or Executive Committee. In the absence or disability of the
Treasurer or when specifically authorized by the Board of Directors of the
Executive Committee, an Assistant Treasurer may perform all or any of the
duties of the Treasurer herein set forth and such other duties as may be
assigned by the Board or the Executive Committee.
SECRETARY
The Secretary shall have immediate charge of the minute books of the
Corporation. He shall have charge of the stock certificate books, the transfer
book and stock ledgers. He shall keep accurate minutes of all proceedings of
the regular and special meetings of the shareholders and of Directors; he,
shall attend to the giving and serving of all notices; and when so ordered, he
shall affix the corporate seal to all documents requiring such seal and shall
make the necessary attestation or certification; and shall have such other
duties as may from time to time be assigned to him by the Board or the
Executive Committee. In the absence or disability of the Secretary or when
specifically authorized by the Board of Directors or the Executive Committee,
an Assistant Secretary may perform all or any of the administrative duties of
the Secretary herein set forth.
SECTION 5. EXECUTION OF DOCUMENTS
The Board of Directors or the Executive Committee may, by appropriate
resolution, designate such officers of the Corporation, or of American Bankers
Insurance Company of Florida or American Bankers Life Assurance Company of
Florida as are authorized and empowered to make and execute all deeds,
releases, leases, agreements, contracts, bills of sale, assignments, Power of
Attorney or of substitution, and other instruments of writing which may be
needful to sell, assign, transfer, convey, release and assure or lease to any
party, whether purchaser, lessee or transferee, any estate or property, real or
personal, stocks, bonds, loans, storage receipts, certificates of deposit,
scrip or evidences of debt or demand standing in the name of the Corporation or
any officer on behalf of the Corporation, or held or controlled by it; and to
affix the corporate seal of the Corporation to any and all such instruments of
writing and to acknowledge or prove the said instruments or any of them and the
proper execution, sealing and delivery thereof. The Board of Directors or the
Executive Committee from time to time may authorize other officers or agents of
the Corporation or of American Bankers Insurance Company of Florida or American
Bankers Life Assurance Company of Florida to perform any or all of said duties.
-8-
<PAGE> 9
ARTICLE IV
COMMITTEES
SECTION 1. EXECUTIVE COMMITTEE
The Board of Directors shall designate an Executive Committee to consist of
not less than three (3) Directors of the Corporation and by resolution shall
designate the Chairman of said Committee. The Executive Committee shall have
and exercise, when the Board is not in session, so far as the Board of
Directors may lawfully delegate to it, all of the powers of the Board in the
management of the business and affairs of the Corporation and any and all
subsidiaries of the Corporation and shall have power to authorize the seal of
the Corporation and any subsidiary of the Corporation to be affixed to all
papers which may require it; but the Executive Committee shall not have power
to fill vacancies in the Board, or to change the membership of, or to fill
vacancies in the Executive Committee, the Compensation and Nominating
Committee, the Audit Committee, the Building Committee or the Planning
Committee, or to make or amend By-Laws of the Corporation, or any subsidiary
thereof. The Board shall have the power at any time to fill vacancies in, to
change the membership of, to change the number of members of, or to dissolve
the Executive Committee. Such number of the members of the Executive Committee
as the Board of Directors may by resolution determine shall constitute a
quorum. All action taken by the Executive Committee shall be reported to the
Board at its meeting next succeeding such action.
SECTION 2. COMPENSATION AND NOMINATING COMMITTEE
The Board of Directors shall, by resolution, designate a Compensation and
Nominating Committee to consist of not less than two (2) directors of the
Corporation, none of whom shall be (i) current or former employees of the
Corporation or any of its subsidiaries or (ii) directors of the Corporation who
receive any remuneration (other than de minimis remuneration as determined
under Treasury Regulation 1.162-27), directly or indirectly, from the
Corporation or any of its subsidiaries in any capacity other than as a director
("Outside Director"). The Board of Directors shall, by resolution also
designate the Chairman of the Compensation and Nominating Committee.
The Compensation and Nominating Committee shall establish the compensation
package of the Chairman of the Board of Directors, the Chief Executive Officer
and the President of the Corporation. The Compensation and Nominating
Committee shall review and approve the compensation package suggested by
Management for all other officers of the Corporation and its major
subsidiaries. The Committee shall be responsible for the administration of all
perquisites offered to officers of the Corporation and its major subsidiaries,
including, but not necessarily limited to, pension, retirement or
profit-sharing plans, management incentive plans, restricted or qualified stock
plans, and insurance benefits. The Committee shall have full power and
authority to select employees to participate in the Corporation's various stock
option plans, to determine the amount and timing of grants, to interpret each
plan and establish rules for their administration.
In addition, the Committee shall assist the Chairman of the Board and the
Chief Executive Officer of the Corporation in development of a management
succession plan.
-9-
<PAGE> 10
The Committee, subject to the control of the Board of Directors or the
Executive Committee, shall also recommend and implement criteria regarding
composition of the Board of Directors, including, but not limited to, seeking
out possible candidates to fill directorships, determining the desirable
balance of expertise and composition of the Board of Directors and evaluating
the performance of current directors; aid in attracting qualified candidates of
directorships; review the management slate of directors to be elected by the
shareholders and recommend to the Board of Directors the inclusion of the slate
in the proxy statement; review the qualification of candidates for corporate
officership, and recommend the officers for approval by the Board of Directors.
The Committee shall fix its own rules and procedures and shall meet, at least
once quarterly, with its annual meeting prior to the annual Board of Directors
meeting, and at any other time at the request of the Board of Directors, the
Chairman of the Compensation and Nominating Committee or the Chief Executive
Officer of the Corporation. The Chairman of the Compensation and Nominating
Committee may request any members of the management of the Corporation or any
of its subsidiaries to attend meetings as the Chairman deems necessary. The
Board of Directors shall have the power at any time to fill vacancies in, to
change the membership of or to change the number of members of the Compensation
and Nominating Committee, provided, however, that the Compensation and
Nominating Committee shall only consist of Outside Directors and have no fewer
than two (2) members. The Board of Directors may, at any time, dissolve the
Compensation and Nominating Committee. Such number of members of the
Compensation and Nominating Committee as the Board of Directors may by
resolution determine shall constitute a quorum. All action taken by the
Compensation and Nominating Committee shall be reported to the Board at its
meeting next succeeding such action.
SECTION 3. AUDIT COMMITTEE
The Board of Directors shall designate an Audit Committee to consist of not
less than three (3) Directors of the Corporation, none of whom shall be inside
Directors, and by resolution shall designate the Chairman of said Committee.
Subject to the control of the Board of Directors or the Executive Committee,
the Audit Committee shall as to the Corporation and each of its subsidiaries:
recommend the selection of the independent auditors to the Board of Directors
and review the arrangements and scope of the independent audit; review all
financial statements before publication, and review matters of concern to the
Audit Committee, the auditors or management relating to these statements or the
results of any audit thereof; consider the comments from the independent
auditors with respect to any weakness in internal controls and the
consideration given corrective action taken by management; review the internal
accounting procedures and controls with the Corporation's and the respective
subsidiary's financial and accounting staff; review the activities, reports and
recommendations of the Corporation's and respective subsidiary's internal
auditors and management's supervision and control of that department; and
complete any other requests made by the Board of Directors. The Audit
Committee shall fix its own rules and procedures and shall meet, at least once
annually, on sufficient occasions to fulfill its duties, at the request of the
Board of Directors, the Chairman of the Audit Committee, or the chief financial
officer. During any meeting of the Committee at which financial statements are
to be reviewed, the chief financial officer of the Corporation or the
respective subsidiary or his representative shall be present. The internal
auditor and/or a representative of the Corporation's or the respective
subsidiary's auditors may be invited to any meeting of the Committee by the
Chairman of the Committee. The Board of Directors shall have the power at any
time to fill vacancies in, to change the number of members of, or to dissolve
the Audit Committee. Such number of the members of the Committee as the Board
of Directors may by resolution determine shall constitute
-10-
<PAGE> 11
a quorum. All action taken by the Audit Committee shall be reported to the
Board at its meeting next succeeding such action.
SECTION 4. BUILDING COMMITTEE
The Board of Directors shall designate a Building Committee to consist of
not less than three (3) directors and by resolution shall designate the
Chairman of said Committee. Subject to the control of the Board of Directors
or the Executive Committee, the Building Committee shall formulate the building
plans of the Corporation to include liaison with architects, engineers, general
contractors, governmental agencies, lending institutions, planners, and
consultants as necessary. The Building Committee shall recommend to the Board
of Directors comprehensive plans for construction, design, financing,
decorating, furnishing, and equipping of office space necessary to accommodate
the growth objectives of the Corporation and shall perform the same functions
with respect to and shall oversee the management of the Corporation's real
properties held for investment. The Building Committee shall fix its own rules
and procedures and shall meet as frequently as necessary to fulfill its duties.
The Board of Directors shall have the power at any time to fill vacancies in,
to choose the number of members of, or to dissolve the Building Committee.
Such number of the members of the Building Committee as the Board of Directors
may by resolution determine shall constitute a quorum. All action taken by the
Building Committee shall be reported to the Board at its meeting next
succeeding such action.
SECTION 5. PLANNING COMMITTEE
The Board of Directors shall designate a Planning Committee to consist of
not less than three (3) Directors of the Corporation and by resolution shall
designate the Chairman of said Committee. Subject to the control of the Board
of Directors or the Executive Committee, the Planning Committee shall
periodically review and recommend to the Board of Directors the plans, goals,
and objectives of the Corporation and its major subsidiaries; shall review the
Consolidated Profit Plan, the Capital Plan and the Business Plans for each
business segment of the Corporation annually; and shall monitor, throughout the
year, the operating results of each such business segment and the consolidated
profit results. The Planning Committee shall fix its own rules and procedures
and shall meet at least once annually, or on sufficient occasions to fulfill
its duties, and at any other time at the request of the Board of Directors, the
Chairman of the Planning Committee or the Chief Executive Officer of the
Corporation. The Chairman may request any members of management of the
corporation or any of its subsidiaries to attend meetings as he deems
necessary. The Board of Directors shall have the power at any time to fill
vacancies in, to change the membership of, to change the number of members of,
or to dissolve, the Planning Committee. Such number of members of the
Committee as the Board of Directors may by resolution determine shall
constitute a quorum. All action taken by the Planning Committee shall be
reported to the Board at its meeting next succeeding such action.
SECTION 6. COMMITTEES
The Board of Directors may, in its discretion, by resolution, appoint other
committees which shall have and may exercise such powers as shall be conferred
or authorized by the resolution appointing them. A majority of any such
committee, composed of more than two members may determine its actions and fix
the time and place of its meetings, unless the Board of Directors shall
otherwise provide. The Board shall have power at any time to change the
members of such committee, to fill vacancies and to discharge any such
committee.
-11-
<PAGE> 12
ARTICLE V
COMMON STOCK
SECTION 1. CERTIFICATE OF SHARES
The interest of each stockholder shall be evidenced by certificates for
shares of stock of the Corporation in such form as the Board of Directors may
from time to time prescribe. The certificates of stock shall be signed by the
President or a Vice President and the Secretary or an Assistant Secretary and
sealed with the seal of the Corporation, and shall be countersigned and
registered in such manner, if any, as the Board may by resolution prescribe;
provided that, in case such certificates are required by such resolution to be
signed by a Transfer Agent or Transfer Clerk or by a Registrar, the signatures
of the President or a Vice President and the Secretary or any Assistant
Secretary, and the seal of the Corporation upon such certificates may be
facsimiles, engraved, or printed. In case such officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such before such certificate is issued, it may be issued by the corporation
with the same effect as if such officer had not ceased to be such at the date
of its issue.
SECTION 2. TRANSFERS
Shares in the capital stock of the Corporation shall be transferred only on
the books of the Corporation by the holder thereof in person or by his attorney
or in case of death by his personal representative, upon surrender for
cancellation of certificates for the same number of shares with an assignment
and power of transfer endorsed thereon or attached thereto, duly executed, with
such proof of the authenticity of the signature as the Corporation or its
agents may reasonably require.
SECTION 3. LOST OR DESTROYED STOCK CERTIFICATE
No certificate for shares of stock of the Corporation shall be issued in
place of any certificates alleged to have been lost, stolen or destroyed,
except upon production of such evidence of the loss, theft or destruction and
upon indemnification of the Corporation and its agents, to such extent and in
such manner as the Board of Directors may from time to time prescribe.
SECTION 4. CONTROL-SHARE ACQUISITIONS STAT DOES NOT APPLY
Florida Statutes Section 607.0902 (1990), and any amendments thereto (the
"Statute"), does not apply to control- share acquisitions (as defined in the
Statute) of shares of stock of the Corporation occurring on or after November
14, 1990.
-12-
<PAGE> 13
ARTICLE VI
CHECKS, NOTES, ETC.
All checks and drafts on the Corporation bank accounts and all bills of
exchange, and promissory notes and all acceptances, obligations, and other
instruments for payment of money shall be signed by such officers of the
Corporation or such officers of American Bankers Insurance Company of Florida
or American Bankers Life Assurance Company of Florida or such agents as shall
be thereunto authorized from time to time by the Board of Directors or the
Executive Committee. No bills or notes shall be signed by or on behalf of the
Corporation unless the Board of Directors or the Executive Committee shall
expressly authorize the same and shall designate the officers who shall execute
same.
-13-
<PAGE> 14
ARTICLE VII
INSPECTORS OF ELECTION
In advance of any meeting of the shareholders, the Board of Directors may
appoint Inspectors of Election who need not be shareholders to act at such
meetings or any adjournment thereof. If Inspectors of Election are not so
appointed by the Board of Directors, the Chairman of any such meeting may
appoint such Inspectors of Election. If neither the Board of Directors or the
Chairman of the meeting appoint Inspectors of Election, any shareholder or
proxy thereof may request the election thereof and those individuals appointed
shall be by majority vote of the shares present and entitled to vote. In no
event shall there be more than three (3) Inspectors of Election and no person
who is a candidate for office shall act as an Inspector. In case any person
appointed an Inspector fails to appear or refuses to act, the vacancy may be
filled by appointment made by the Board of Directors in advance of the
convening of the meeting or at the meeting by the person or officer acting as
Chairman.
-14-
<PAGE> 15
ARTICLE VIII
AMENDMENTS
The By-Laws of the Corporation may be repealed or amended and new By-Laws
may be adopted by either the majority vote of the full Board of Directors or at
any meeting of the shareholders of record of a majority of the outstanding
stock entitled to vote thereat, provided notice of the meeting is given in
accordance with these By-Laws and provided further that notice may be waived as
provided by Section 3 of Article I hereof, but the Board of Directors may not
amend or repeal any By-Law adopted by shareholders if the shareholders
specifically provide such By-Law is not subject to amendment or repeal by the
Directors.
-15-
<PAGE> 1
ITEM 6 (A) EXHIBITS
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(in thousands except per common share data)
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
PRIMARY: 1996 1995
---- ----
<S> <C> <C>
Weighted average shares outstanding 20,929 20,728
======= =======
Net Income $20,636 $14,871
======= =======
Net Income - per share $ .99 $ .72
======= =======
FULLY DILUTED:
Weighted average of shares outstanding 20,929 20,728
Assumed conversion of common stock equivalents 47 17
------- -------
Total 20,976 20,745
======= =======
Net income $20,636 $14,871
Add convertible debenture interest, net of federal income tax 62 64
------- -------
Total $20,698 $14,935
======= =======
Net income - per share $ .99 $ .72
======= =======
</TABLE>
ITEM 6 (B) REPORTS ON FORM 8-K
None.
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 785,898
<DEBT-CARRYING-VALUE> 668,651
<DEBT-MARKET-VALUE> 0
<EQUITIES> 114,709
<MORTGAGE> 11,647
<REAL-ESTATE> 0
<TOTAL-INVEST> 1,775,879
<CASH> 10,370
<RECOVER-REINSURE> 163,240
<DEFERRED-ACQUISITION> 339,498
<TOTAL-ASSETS> 3,121,923
<POLICY-LOSSES> 279,257
<UNEARNED-PREMIUMS> 1,216,990
<POLICY-OTHER> 426,009
<POLICY-HOLDER-FUNDS> 7,271
<NOTES-PAYABLE> 256,450
20,476
0
<COMMON> 0
<OTHER-SE> 504,273
<TOTAL-LIABILITY-AND-EQUITY> 3,121,923
341,854
<INVESTMENT-INCOME> 27,437
<INVESTMENT-GAINS> 1,029
<OTHER-INCOME> 5,375
<BENEFITS> 147,358
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 30,887
<INCOME-TAX> 10,251
<INCOME-CONTINUING> 20,636
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,636
<EPS-PRIMARY> .99
<EPS-DILUTED> .99
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
