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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
[X] Annual report pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1996.
[_] 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 0-17676
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AMERINST INSURANCE GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 52-1534560
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
R.R. No. 3, Airport Road, Berlin, Vermont 05602
Mailing address: P.O. Box 1330, Montpelier, Vermont 05601
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (802) 229-5042
Securities registered pursuant to Section 12(b)
of the Act: None
Securities registered pursuant to Section 12(g)
of the Act: Common Stock, $0.01 par value
(Title of class)
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.
[X] 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].
Aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of March 19, 1997 was $19,980,340.92. *
Number of shares of the $.01 par value common stock outstanding as of March 19,
1997 was 333,894.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders are incorporated by reference into Part III hereof.
*based on book value as of December 31, 1996.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
There is no established public trading market for the common stock of AIIG.
AIIG's Certificate of Incorporation provides that all transfers of shares of
AIIG common stock must be approved by AIIG's Board of Directors or a committee
thereof. AIIG's Board of Directors has appointed a Stockholder Relations
Committee for purposes of reviewing and approving applications for transfer.
All transferees must meet the qualifications for Stock Ownership contained in
AIIG's Stock Ownership Policy.
As of March 24, AIIG had 2,595 holders of record of its common stock. On
August 28, 1995, the Board adopted a dividend policy for AIIG to pay a quarterly
dividend of $0.65 per share subject to legally available funds and specific
Board approval for each quarter. During 1996, AIIG paid cash dividends of
$869,661 representing four quarterly payments of $0.65 per share. During 1995,
AIIG paid two quarterly dividends of $.65 totalling $435,412. The declaration
of dividends by AIIG's Board of Directors is dependent upon AIIG's and AIIC's
capacity to insure or reinsure business, profitability, financial condition, and
other factors which the Board of Directors may deem appropriate. For a
description of the restrictions which Illinois law imposes on AIIC's ability to
pay dividends, see Item 1 above.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: April 14, 1997 AMERINST INSURANCE GROUP, INC.
By /s/ NORMAN C. BATCHELDER
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Norman C. Batchelder, President
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Exhibit 4.2
AMERINST INSURANCE GROUP, INC.
(The "Corporation")
STATEMENT OF STOCK OWNERSHIP POLICY/1/
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General Policy
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1. The insurance capacity of the Corporation's subsidiary should be utilized
solely for the benefit of accounting firms which are stockholders of the
Corporation in the event that the availability of accountants' professional
liability insurance becomes limited or the market for such insurance is
otherwise adversely affected;
2. A reasonable relationship should be maintained between the investment that
an accounting firm has in the Corporation and the amount of such firm's
risks that the Corporation's subsidiary is insuring or reinsuring; and
3. A preference should be established for accounting firms that invest
initially in the Corporation over firms, if any, which may be allowed to
invest subsequently.
Guidelines
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1. Eligible Firms. "Eligible Firms" shall be those accounting firms (including
sole proprietorships) which either (i) are currently insured under the
AICPA Professional Liability Insurance Plan (the "AICPA Plan") or (ii) have
a staff of 250 or fewer CPAs and at least one equity owner (proprietor,
partner or stockholder) who is a member of either the American Institute of
Certified Public Accountants or a state CPA society.
2. Offerees. The shares of common stock of the Corporation to be offered in
the Corporation's initial offering (the "Shares") shall be offered
exclusively to Eligible Firms.
3. Founding Firms. Eligible Firms, including Eligible Firms which are not
currently insured under the AICPA Plan, that subscribe for Shares on or
prior to the termination date of the offering (the "Termination Date"),
will be designated as "Founding Firms" which status will entitle such firms
to lower minimum initial investment requirements and lower additional
investment requirements than Eligible Firms which make their initial
investment in future offerings, if any.
4. Minimum Initial Investment. All firms subscribing for Shares in the initial
offering of the Shares must make a minimum initial investment as set forth
below. The minimum initial investment requirement, and thus the minimum
number of Shares that an Eligible Firm
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/1/ As amended February 27, 1997.
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must purchase to become a Founding Firm, depends upon whether such firm is
currently insured under the AICPA Plan.
Firms Insured Under the AICPA Plan. Subscribers that are insured
during 1987 under the AICPA Plan must purchase at least that number of
Shares equal in value to the lesser of (i) 50% of such subscriber's
1987 premiums under the AICPA Plan with respect to the first $1
million of coverage or (ii) the greater of $500 or 1% of such
subscriber's revenues for the subscriber's most recently completed
twelve-month fiscal year.
Firms Not Insured. Subscribers that are not insured during 1987 under
the AICPA Plan must purchase at least that number of Shares equal in
value to the greater of $500 or 1% of such subscriber's revenues for
the subscriber's most recently completed twelve-month fiscal year.
"Revenues" is defined as total gross cash revenues (per income tax return),
not including the direct recovery of expenses, derived from the firm's
professional accounting services for the last twelve-month fiscal period.
5. Minimum Investment Applicable After the Termination Date. In any offering
of shares of the Corporation's common stock after the Termination Date, the
minimum initial investment requirement will be not less than (i) 75% of a
firm's premiums under the AICPA Plan, if insured under the AICPA Plan or
(ii) 1.5% of the firm's revenues for its most recently completed twelve-
month fiscal year, if not insured under the AICPA Plan.
6. Additional Investment Requirement. There is no current requirement to make
additional investments in the Corporation. In the event that the
Corporation determines that the insurance capacity of its subsidiary will
be available only to stockholders of the Corporation, in order to benefit
from such capacity, a stockholder must have a sufficient investment in the
Corporation to be deemed a "qualified" stockholder. A firm's "investment"
is defined to be equal to the greater of (i) the purchase price originally
paid to the Corporation for the shares of the Corporation's common stock
held by the firm (including shares acquired from other firms) or (ii) the
book value of the firm's shares. If the required investment level is not
met, a firm will be required to purchase additional shares, either directly
from the Corporation or from other stockholders, in order to have the
insurance capacity of the Corporation's subsidiary utilized for such
firms's benefit. The failure to make additional investments when required
will result in the loss of a firm's "qualified" status and a firm's
"Founding Firm" status, if applicable. Any offering by the Corporation of
its shares of common stock in connection with this additional investment
requirement shall be made in accordance with the Securities Act of 1933 and
any applicable "Blue Sky" laws.
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Founding Firms. In order for a Founding Firm to be considered a
"qualified" stockholder at any given point in time, such firm would be
required to have an investment in the Corporation equal to (i) if
insured under the AICPA Plan, at least 30% of such firm's insurance
premiums for the then current year or (ii) if not insured under the
AICPA Plan, 0.6% of such firm's revenues for its most recently
completed twelve-month fiscal year. If a Founding Firm's investment
were less than the 30% or 0.6% levels, such firm would need to raise
its investment to a 50% or 1.0% level, respectively, to remain
qualified.
Non-Founding Firms. In order for a Non-Founding Firm to be considered
a "qualified" stockholder at any given point in time, such firm would
be required to have an investment in the Company equal to (i) if
insured under the Plan, at least 50% of such firm's insurance premiums
for the current year or (ii) if not insured under the Plan, 1.0% of
such firm's revenues for its most recently completed twelve-month
fiscal year. If a Non-Founding Firm's investment were less than the
50% or 1.0% levels, such firm would need to raise its investment to a
75% or 1.5% level, respectively, to remain qualified.
7. Share Transfers. Upon request of a stockholder, the Board will consent to
transfers of Shares among Eligible Firms absent unusual circumstances. Upon
receipt by the Board of written evidence satisfactory to the Board that a
stockholder has been liquidated or dissolved, the Board will consent to a
transfer of Shares to such stockholder's partners or stockholders if the
stockholder establishes, to the satisfaction of the Board, that it
attempted diligently and in good faith to transfer the Shares to an
Eligible Firm and was unable to do so. Transfers by an individual
stockholder to a living trust, testamentary trust or other trust
established for the benefit of the stockholder's heirs, legatees or
devisees may be approved by the Board.
8. Share Repurchases. Upon request of a stockholder, the Board will approve
the repurchase of Shares from a firm, absent unusual circumstances and
subject to the adequacy of capital and surplus for the Corporation and
its subsidiary, in the event such firm ceases to practice due to the death,
disability or retirement of its owners. All such repurchases will be
effected at a per share price equal to 75% of the book value per Share as
reflected in the Corporation's audited year end balance sheet for the
preceding fiscal year. The repurchase price may be paid with cash or notes
or a combination thereof.
9. Director Purchases. Notwithstanding any of the above, directors shall be
eligible to buy stock from any eligible firm. There shall be no minimum
purchase requirement. The purchase price of the stock shall be negotiated
between buyer and seller, and not determined by formula. Upon termination
of service as a member of the Board, the Company has the option to
repurchase this stock at a per share price equal to 75% of the book value
per share as reflected in the Corporation's audited year end balance sheet
for the preceding fiscal year. The repurchase price may be paid with cash
or notes or a combination thereof.
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All interpretations of the foregoing policies and guidelines shall be made
by the Board of Directors of the Corporation and shall be conclusive. The
foregoing general policies may be amended at any time by an amendment to
the Bylaws of the Corporation (including amendment by the Board of
Directors of the Corporation without approval of the Corporation's
stockholders). The foregoing guidelines may be amended at any time by a
resolution of the Board of Directors of the Corporation without approval of
the Corporation's stockholders.
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