UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
{X} Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1997
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: 000-22142
OMNI INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-1680624
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1000 Parkwood Circle, Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
(770) 952-4500
(Registrant's telephone number, including area code)
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 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
------------- -------------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class: Common Stock, par value $.01
Issued and outstanding as of: June 30, 1997 - 5,704,958 shares
<PAGE>
OMNI INSURANCE GROUP, INC.
Form 10-Q
June 30, 1997
Table of Contents
Page
PART I. Financial Information Number
------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at
June 30, 1997 and December 31, 1996 3
Consolidated Statements of Earnings - Three and
six months ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows -
Six months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
OMNI INSURANCE GROUP, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- -------------
(Unaudited)
<S> <C> <C>
Assets
Investments:
Available for sale:
Fixed maturities, at fair value $ 79,549,639 $ 79,042,789
Equity securities, at fair value 255,500 212,063
Invested cash 10,780,102 5,264,275
------------- -------------
Total investments 90,585,241 84,519,127
Accrued investment income 1,611,492 1,525,704
Accounts receivable, principally premiums 54,359,274 43,696,603
Reinsurance recoverables 2,893,860 1,548,971
Prepaid reinsurance premiums 6,402,322 5,028,048
Federal income taxes receivable 492,920 27,942
Deferred policy acquisition costs 10,957,366 9,542,558
Deferred income taxes 1,848,000 1,250,000
Property and equipment, net 2,401,334 2,084,533
------------- -------------
Total assets $ 171,551,809 $ 149,223,486
============= =============
Liabilities and Stockholders' Equity
Liabilities:
Unpaid losses and loss adjustment expenses $ 39,848,204 $ 33,176,563
Unearned premiums 63,137,250 49,722,892
Accounts payable and accrued expenses 5,233,603 6,543,261
Drafts payable 6,346,872 5,669,661
Reserve for premium tax assessment 1,460,000 1,460,000
Other liabilities 559,381 469,997
------------- -------------
Total liabilities 116,585,310 97,042,374
------------- -------------
Stockholders' equity:
Common stock, par value $.01, authorized 15,000,000
shares; issued and outstanding 5,704,958 and
5,700,150 shares, respectively 57,050 57,002
Additional paid-in capital 28,986,407 28,937,173
Net unrealized depreciation on investment
securities (71,796) (5,245)
Retained earnings 25,994,838 23,192,182
------------- -------------
Total stockholders' equity 54,966,499 52,181,112
Commitments and contingencies (note 2)
------------- -------------
Total liabilities and stockholders' equity $ 171,551,809 $ 149,223,486
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
OMNI INSURANCE GROUP, INC.
Consolidated Statements of Earnings
Unaudited
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Gross premiums written $ 40,292,346 $ 25,759,536 $ 81,249,714 $ 50,369,669
============ ============ ============ ============
Net premiums written $ 36,224,927 $ 23,395,083 $ 73,120,949 $ 43,642,767
============ ============ ============ ============
Revenues:
Net premiums earned $ 32,674,850 $ 21,505,966 $ 61,080,865 $ 41,793,434
Net investment income 1,078,285 1,008,896 2,162,953 2,031,076
Realized capital gains (losses) (24,912) - (26,405) 27,538
Other income (loss) (2,937) - (2,937) 4,046
------------ ------------ ------------ ------------
Total revenues 33,725,286 22,514,862 63,214,476 43,856,094
------------ ------------ ------------ ------------
Losses and expenses:
Losses and loss adjustment expenses, net 25,198,715 15,476,749 47,232,758 30,516,534
Acquisition and operating expenses, net 6,554,302 5,392,298 12,331,062 10,112,154
------------ ------------ ------------ ------------
Total losses and expenses 31,753,017 20,869,047 59,563,820 40,628,688
------------ ------------ ------------ ------------
Earnings before income taxes 1,972,269 1,645,815 3,650,656 3,227,406
------------ ------------ ------------ ------------
Income taxes (benefit):
Current 654,000 365,000 1,411,000 974,000
Deferred (142,000) 73,000 (563,000) (112,000)
------------ ------------ ------------ ------------
Total income taxes 512,000 438,000 848,000 862,000
------------ ------------ ------------ ------------
Net earnings $ 1,460,269 $ 1,207,815 $ 2,802,656 $ 2,365,406
============ ============ ============ ============
Net earnings per share $ 0.26 $ 0.21 $ 0.49 $ 0.41
============ ============ ============ ============
Weighted average shares outstanding 5,704,958 5,700,150 5,703,762 5,700,150
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
OMNI INSURANCE GROUP, INC.
Consolidated Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>
Six months ended June 30,
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,802,656 $ 2,365,406
Adjustments to reconcile net earnings to net cash
provided from operating activities:
Amortization and depreciation 659,148 608,584
Deferred income taxes (563,000) (112,000)
Changes in:
Accounts receivable, principally premiums (10,662,671) (2,928,721)
Reinsurance recoverables (1,344,889) (201,623)
Prepaid reinsurance premiums (1,374,274) (2,549,693)
Federal income taxes (464,978) (326,000)
Deferred policy acquisition costs (1,414,808) 164,517
Unpaid losses and loss adjustment expenses 6,671,641 (1,939,294)
Unearned premiums 13,414,358 4,399,025
Funds held for reinsurance - (4,832)
Accounts payable and accrued expenses (96,441) 196,219
Drafts payable 677,211 423,080
Other, net 29,914 (28,977)
------------ ------------
Net cash provided from operating activities 8,333,867 65,691
------------ ------------
Cash flows from investing activities:
Purchases of investments (13,969,108) (5,336,694)
Maturities, calls and paydowns of fixed maturities 2,196,002 3,415,658
Sales of investments 10,769,385 3,157,068
Change in invested cash (5,515,827) (1,218,770)
Purchases of property and equipment (697,689) (239,715)
Sales of property and equipment 47,305 47,529
------------ ------------
Net cash used in investing activities (7,169,932) (174,924)
------------ ------------
Cash flows from financing activities:
Issuance of common stock 49,282 -
Cash overdraft (1,213,217) 109,233
------------ ------------
Net cash (used in) provided by financing activities (1,163,935) 109,233
------------ ------------
Net decrease in cash - -
Cash at beginning of period - -
------------ ------------
Cash at end of period $ - $ -
============ ============
Supplemental cash flow information - cash payments
during year for:
Income taxes $ 1,800,000 $ 1,300,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
OMNI INSURANCE GROUP, INC.
Notes to Consolidated Financial Statements
June 30, 1997
(1) Basis of Presentation
The unaudited consolidated financial statements include the accounts of Omni
Insurance Group, Inc. (Company), a holding company, and its wholly owned
insurance subsidiary, Omni Insurance Company (Omni Insurance). Omni Insurance
owns all the issued and outstanding common stock of Omni Indemnity Company and
Omni General Agency, Inc. All significant intercompany balances and
transactions have been eliminated in consolidation.
The unaudited consolidated financial statements have been prepared in
conformity with generally accepted accounting principles (GAAP). However, all
of the footnotes required by GAAP have not been included and reference should
be made to the "Notes to Consolidated Financial Statements" included in the
Company's 1996 Annual Report. In the opinion of management, all necessary
adjustments have been reflected for a fair presentation of the results of
operations, financial position and cash flows in the accompanying unaudited
consolidated financial statements. The results for the periods are not
necessarily indicative of the results for the entire year.
Certain items in the prior period financial statements have been reclassified
to conform to the current presentation.
(2) Contingencies
As previously disclosed, the Florida Department of Revenue (Department) has
conducted an audit of the premium tax returns filed by Omni Insurance for the
years 1987 through 1991. The Department made adjustments to these returns that
increase the premium tax liability, including penalties and interest. No audit
has been conducted for years 1992 and 1993; however, similar issues may exist
for these two years which could result in an additional assessment. Due to the
redomestication of Omni Insurance, no similar exposure exists after 1993.
Omni Insurance administratively protested the assessment proposed by the
Department for the years 1987 through 1991. In May 1995, Omni Insurance
received notice from the Department that it had denied Omni Insurance's protest
and issued a notice of final assessment. As a result, Omni Insurance filed
suit against the Department to further contest the assessment. Following the
July 1995 filing of such suit, a Florida trial court rendered a decision in
another case involving similar issues. This decision was adverse to the
taxpayer, after the taxpayer had initially been granted summary judgment in its
favor. The taxpayer appealed that case and filed a brief on appeal of the
verdict previously rendered. During the quarter ended June 30, 1996, the
Appeals Court rendered a decision that was adverse to the taxpayer, denied its
claim for rehearing and denied its request to be heard by the Florida Supreme
Court.
Omni Insurance strongly disagreed with the decision of the trial court and
filed an Amicus Brief supporting the unrelated taxpayer's position. Based on
the trial court verdict, Omni management considered it prudent and necessary
to establish a reserve to cover any possible loss exposure related to this
issue. Accordingly, a reserve of $1,460,000 was established during 1995.
Omni Insurance's suit is still pending.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Some matters discussed in this report constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. The
Company notes that a variety of risk factors could cause the Company's actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements.
Reference is made in particular to the discussion of such risk factors set
forth as Exhibit 99.1 to the Company's Annual Report on Form 10-K dated
December 31, 1996, on file with the Securities and Exchange Commission.
Financial Condition
June 30, 1997, Compared to December 31, 1996
Total investments increased to $90.6 million at June 30, 1997 from $84.5
million at December 31, 1996. This increase was primarily the result of
positive operating cash flow for the first six months of 1997. Partially
offsetting this increase was a decline in the Company's unrealized gain in the
investment portfolio to approximately $650,000 from $750,000 at year-end 1996.
This decline was primarily the result of changes in interest rates.
The increase in accounts receivable by 24.4% to $54.4 million and unearned
premiums by 27.0% to $63.1 million at June 30, 1997 was the result of the
increase in gross premiums written compared to December 31, 1996.
The increase in deferred policy acquisition costs to $11.0 million at
June 30, 1997 from $9.5 million at December 31, 1996 was primarily the result
of the increase in deferrable acquisition expenses resulting from the larger
volume of gross premiums written for the six months ended June 30, 1997,
compared to December 31, 1996.
Unpaid losses and loss adjustment expenses increased to $39.8 million at
June 30, 1997 from $33.2 million at December 31, 1996. This increase is the
result of the growth in business and the increase in the average liability
for outstanding bodily injury claims.
Results of Operations
Three Months Ended June 30, 1997, Compared to Three Months Ended June 30, 1996
Gross premiums written increased 56.4% to $40.3 million for the three months
ended June 30, 1997 from $25.8 million for the three months ended
June 30, 1996. The Company's three largest states are Florida at
$10.0 million, Virginia at $8.5 million and Texas at $6.6 million. A sizable
portion of the Texas business has been written through an agency which has
multiple branch offices controlled by a common ownership.
Net premiums written increased 54.8% to $36.2 million for the three months
ended June 30, 1997 from $23.4 million for the three months ended June 30,
1996. The increase in net premiums earned to $32.7 million during the three
months ended June 30, 1997 from $21.5 million during the three months ended
June 30, 1996 was the result of the increase in gross premiums written in the
latter half of 1996 and the first half of 1997.
Net investment income increased slightly to $1.1 million for the three months
ended June 30, 1997 from $1.0 million for the three months ended June 30, 1996.
This was primarily the result of an increase in average investable assets. The
average investment yield before investment expenses decreased slightly due to
an increase in the proportion of tax exempt securities in the Company's
investment portfolio.
Losses and loss adjustment expenses were $25.2 million for the three months
ended June 30, 1997 with a net loss ratio of 77.1%, compared to $15.5 million
for the three months ended June 30, 1996 with a net loss ratio of 72.0%. With
the increase in premium volume in the first half of 1997, the Company's ratio
of new business to renewals has increased. Since new business typically has
a higher loss experience than renewals, this increase in new business has in
turn increased the Company's loss and loss adjustment expense ratio. In
addition, second quarter 1997 had adverse development on first quarter 1997
accident quarter reserves. This prior-quarter adverse development was not
present in the 1996 results. The Company continues to closely monitor the
adequacy of its rates and loss reserves and takes action when it believes
necessary.
7
<PAGE>
Acquisition and operating expenses increased to $6.6 million for the three
months ended June 30, 1997 from $5.4 million for the three months ended
June 30, 1996. The net expense ratio decreased to 20.1% from 25.1% for these
same periods, dueprimarily to the increase in earned premiums without a
corresponding increase in expenses. Also, the net expense ratio has benefitted
from reinsurance treaty results.
The effective income tax rate for the three months ended June 30, 1997 was
relatively constant at 26.0% compared to 26.6% for the three months ended
June 30, 1996. The slight decrease is primarily attributable to an increase
in tax exempt interest as a percentage of total earnings before tax.
As a result of the foregoing factors, net earnings increased 20.9% to $1.5
million for the three months ended June 30, 1997 from $1.2 million for the
three months ended June 30, 1996, and earnings per share increased to $0.26
per share from $0.21 per share for the same periods, respectively.
Six Months Ended June 30, 1997, Compared to Six Months Ended June 30, 1996
Gross premiums written increased 61.3% to $81.3 million for the six months
ended June 30, 1997 from $50.4 million for the six months ended June 30, 1996.
The Company's three largest states are Florida at $19.0 million, Virginia at
$17.0 million and Texas at $16.0 million. A sizable portion of the Texas
business has been written through an agency which has multiple branch offices
controlled by a common ownership. Illinois became operational during the first
quarter with minimal writings in line with our modest expectations.
Net premiums written increased 67.5% to $73.1 million for the six months ended
June 30, 1997 from $43.6 million for the six months ended June 30, 1996. The
increase in net premiums earned to $61.1 million during the six months ended
June 30, 1997 from $41.8 million during the six months ended June 30, 1996
is the result of the increase in gross premiums written in the latter half of
1996 and the first half of 1997.
Net investment income increased slightly to $2.2 million for the six months
ended June 30, 1997 from $2.0 million for the six months ended June 30, 1996.
This was due to an increase in average investable assets while the average
investment yield before investment expenses remained relatively constant.
Losses and loss adjustment expenses were $47.2 million for the six months ended
June 30, 1997 with a net loss ratio of 77.3%, compared to $30.5 million for the
six months ended June 30, 1996 with a net loss ratio of 73.0%. With the
increase in premium volume in the first half of 1997, the Company's ratio of
new business to renewals has increased. Since new business typically has a
higher loss experience than renewals, this increase in new business has in turn
increased the Company's loss and loss adjustment expense ratio. In addition,
during the first quarter of 1997, the Company had approximately $2.5 million
of adverse development on the reserves established at year-end 1996. This
development is primarily attributable to the increase in the liability for
outstanding bodily injury claims mentioned earlier. In the second quarter of
1997, the Company had an additional $0.8 million of adverse development on
prior years, primarily on reserves established for the 1996 accident year.
The Company continues to closely monitor the adequacy of its rates and loss
reserves and takes action when it believes necessary.
Acquisition and operating expenses increased to $12.3 million for the six
months ended June 30, 1997 from $10.1 million for the six months ended June 30,
1996. The net expense ratio decreased to 20.2% from 24.2% for these same
periods, due primarily to the increase in earned premiums without a
corresponding increase in expenses. Also, the net expense ratio has benefitted
from reinsurance treaty results.
Settlement of the 1992-1993 Internal Revenue Service audit occurred during
the first quarter. Consequently, $80,000 of the amount previously reserved was
released, resulting in a tax rate of 23.2% for the six months ended June 30,
1997 compared to 26.7% for the six months ended June 30, 1996.
As a result of the foregoing factors, net earnings increased 18.5% to $2.8
million for the six months ended June 30, 1997 from $2.4 million for the six
months ended June 30, 1996, and earnings per share increased to $0.49 per share
from $0.41 per share for the same periods, respectively.
8
<PAGE>
Liquidity and Capital Resources
The Company's major sources of operating funds are dividends from Omni
Insurance Company (Omni Insurance) and payments received pursuant to a
tax-sharing agreement between the Company and its subsidiaries. Therefore,
the Company's liquidity will be dependent upon the earnings of Omni Insurance
and the subsidiaries' ability to pay dividends and make tax-sharing payments
to the Company.
The principal sources of funds for the insurance subsidiaries are net premiums
collected, investment income and proceeds from investments that have been sold,
matured or repaid. The Company's principal uses of funds are the payment of
general corporate expenses. The principal uses of funds for the insurance
subsidiaries are the payment of claims, acquisition and operating expenses and
the purchase of investments.
Net cash flows provided by operating activities were $8.3 million for the six
months ended June 30, 1997 compared with net cash provided of $66,000 for the
six months ending June 30, 1996. This improvement in cash flow was due to the
increase in gross premiums written and improved profitability.
Net funds used in investing activities were $7.2 million for the six months
ended June 30, 1997 compared to $175,000 for the six months ended June 30,
1996. Company estimates of policy liabilities generally develop and are
resolved over a period of less than three years; therefore, the Company has a
relatively predictable schedule of cash needs. The Company also manages its
investment activities to maintain adequate liquidity for operating purposes and
to protect its policyholders and stockholders (that is, by attempting to match
its liquidity with cash requirements). The Company's portfolio is heavily
weighted toward intermediate fixed maturity securities, substantially all of
which are investment grade. The Company has no real estate investments or
mortgage loans. Historically, the Company has not experienced any "mismatches"
related to liquidity management and none are anticipated. The Company does not
presently anticipate any requirements which would cause liquidation of any
investments prior to their scheduled maturities.
Illinois (Omni Insurance's state of domicile) insurance laws and regulations
impose certain restrictions on the amount of dividends that a company domiciled
in the state may pay without prior regulatory approval. As a result, the
maximum amount of dividends that Omni Insurance may pay without prior
regulatory approval is the greater of (i) ten percent of the statutory
policyholders' surplus as of the preceding December 31, or (ii) the statutory
net income for the preceding calendar year, including a portion of its capital
gains for such year, provided that dividends may only be paid to the extent of
earned surplus. Omni Insurance has the ability to pay approximately $3.7
million of dividends to the Company during 1997.
Effective with the 1994 statutory annual statement which is filed with the
state Departments of Insurance, property/casualty insurers must disclose their
risk-based capital (RBC) position. RBC prescribes the level of capital and
surplus which regulators deem necessary in order for an insurance company to
prudently support its business and investments risks. For 1996, Omni Insurance
and its insurance subsidiary, Omni Indemnity Company, each had total adjusted
capital in excess of any current requirement.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Omni Insurance is a party to a legal proceeding with the Florida Department of
Revenue. See Note 2 to the Company's financial statements set forth in Part I
of this Report.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On May 13, 1997, the Company held its Annual Meeting of Stockholders. The
following items were submitted to vote by all shares of Common Stock held of
record on March 28, 1997:
(1) Election of Directors to serve as Director until the next annual meeting:
<TABLE>
<CAPTION>
For Against Abstain Non-Vote Total
--------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
John E. Cay, III 4,980,049 - 110 719,991 5,700,150
Don L. Chapman 4,980,049 - 110 719,991 5,700,150
J. Paul Kennedy 4,980,049 - 110 719,991 5,700,150
Dudley L. Moore, Jr. 4,980,049 - 110 719,991 5,700,150
John W. Rooker 4,980,049 - 110 719,991 5,700,150
S. Stephen Selig, III 4,980,049 - 110 719,991 5,700,150
</TABLE>
Mr. Moore (Chairman of the Board) also serves as the Company's Chief Executive
Officer and Mr. Kennedy also serves as the Company's President and Chief
Operating Officer.
(2) Proposal to ratify the appointment of the independent public accountants
of the Company:
<TABLE>
<CAPTION>
For Against Abstain Non-Vote Total
--------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
KPMG Peat Marwick LLP 4,979,749 110 300 719,991 5,700,150
</TABLE>
Item 5. Other Information
None
10
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Filed Herewith (*),
Nonapplicable (NA), or
Incorporated by Reference from
OMGR
Exhibit Registration No. Exhibit
Number or Report Number
-------- ---------------- -------
<S> <S> <S> <S>
2.0 Plan of acquisition, reorganization, arrangement, liquidation or succession NA
3.1 Articles of Incorporation of the Company, as amended 33-64346 3.1
3.2 By-laws of the Company, as amended 33-64346 3.2
3.2A By-laws of the Company, as amended and adopted April 1, 1997 *
4.1 Specimen certificate of the Registrant's Common Stock 33-64346 4.1
10.1 Charter of Omni Insurance Company 33-64346 10.1
10.2 By-laws of Omni Insurance Company 33-64346 10.2
10.3 Amended and Restated Loan Agreement between Omni Insurance
Group, Inc. and Dresdner Bank A.G., Grand Cayman Branch, dated
September 8, 1988 33-64346 10.3
10.4 Promissory Note in the original principal amount of $5,500,000 payable
by the Company, Dudley L. Moore, Jr. and Hannover Holdings, Inc. to
Dresdner Bank A.G., Grand Cayman Branch dated September 8, 1988 33-64346 10.4
10.5 Lease Agreement between Omni Insurance Group, Inc. and Boston
Parkwood Company dated August 21, 1991, as amended by letter
agreement dated January 30, 1992 33-64346 10.5
10.5A First Amendment to Lease between Omni Insurance Group, Inc. and
Boston Parkwood Company dated August 21, 1991, and amended by
letter agreement dated January 30, 1992 1994 Form 10-K 10.5A
10.5B Second Amendment to Lease between Omni Insurance Group, Inc. and
Boston Parkwood Company dated August 21, 1991, and amended by
letter agreement dated January 30, 1992 1994 Form 10-K 10.5B
10.5C Sublease between Omni Insurance Company and Suburban Lodges of September 30, 1996
America, Inc. Form 10-Q 10.5C
10.6 Employment Agreement between Omni Insurance Group, Inc. and
J. Paul Kennedy dated April 28, 1986 as amended 33-64346 10.6
10.7 Stock Purchase Agreement among the Company, Dudley L. Moore, Jr.
and Hannover Holdings, Inc. dated May 19, 1993 33-64346 10.7
10.8 Promissory Note of the Company payable to First Union National
Bank of North Carolina in the principal amount of $10,500,000
dated June 8, 1993 33-64346 10.8
11
<PAGE>
10.9 Loan Agreement between Omni Insurance Group, Inc. and First
Union National Bank of North Carolina dated June 8, 1993 33-64346 10.9
10.10 Pledge Agreement between Dudley L. Moore, Jr. and First Union
National Bank of North Carolina dated June 8, 1993 33-64346 10.10
10.11 Pledge Agreement between J. Paul Kennedy and First Union
National Bank of North Carolina dated June 8, 1993 33-64346 10.11
10.12 Share Transfer Agreement effective March 31, 1993 among
Dudley L. Moore, Jr., J. Paul Kennedy and the Company 33-64346 10.12
10.13 Omni Insurance Group 401(k) Retirement Plan 33-64346 10.13
10.14 1993 Incentive Stock Option Plan of the Company 33-64346 10.14
10.15 1993 Nonqualified Stock Option Plan of the Company 33-64346 10.15
10.16 1993 Nonemployee Director Nonqualified Stock Option Plan of
the Company 33-64346 10.16
10.17 Executive Split-Dollar Insurance Plan of the Company 33-64346 10.17
10.18 Agreement of Reinsurance between General Reinsurance Corporation
and Omni Insurance Company 33-64346 10.18
10.18A Endorsements Nos. 4, 5 and 6 to the Agreement of Reinsurance between
General Reinsurance Corporation and Omni Insurance Company 1996 Form 10-K 10.18A
10.19 Private Passenger Automobile Quota Share Reinsurance Agreement between
Omni Insurance Company and Transatlantic Reinsurance Company 33-64346 10.19
10.20 Cover Note No. CT 1297-95 regarding reinsurance agreements between
Omni Insurance Company and Reliance Insurance Company 1994 Form 10-K 10.20
10.20A Quota Share Reinsurance Agreement between Omni Insurance
Company and Reliance Insurance Company 1995 Form 10-K 10.20A
10.21 Not used
10.22 Agency Agreement between Omni General Agency, Inc. and September 30, 1995
Gainsco County Mutual Insurance Company Form 10-Q 10.22
10.22A Amendment 1 to the Agency Agreement between Omni General June 30, 1996
Agency, Inc. and Gainsco County Mutual Insurance Company Form 10-Q 10.22A
10.23 Quota Share Reinsurance Agreement between Gainsco County September 30,1 995
Mutual Insurance Company and Omni Insurance Company Form 10-Q 10.23
10.23A Amendment 2 to the Quota Share Reinsurance Agreement between Gainsco June 30, 1996
County Mutual Insurance Company and Omni Insurance Company Form 10-Q 10.23A
10.24 Management and Service Agreement between Omni General Agency, September 30, 1995
Inc. and Omni Insurance Company Form 10-Q 10.24
10.25 Trust Agreement between Gainsco County Mutual Insurance September 30, 1995
Company, Omni Insurance Company and The Northern Trust Company Form 10-Q 10.25
12
<PAGE>
10.26 Split-Dollar Insurance Agreement between Omni Insurance Company March 31,1996
and D. Jack Sawyer, Jr. as Trustee under The DLMB Family Trust Form 10-Q 10.26
10.27 Cover Note CT1350-96 regarding reinsurance agreement between Omni March 31, 1996
Insurance Company and Transatlantic Reinsurance Company Form 10-Q 10.27
10.27A Automobile Physical Damage Quota Share Reinsurance Agreement between
Omni Insurance Company, Omni Indemnity Company and Transatlantic June 30, 1996
Reinsurance Company Form 10-Q 10.27A
10.28 Executive Incentive Common Stock Plan of Omni Insurance Group, Inc. June 30, 1996
Form 10-Q 10.28
11.0 Statement regarding computation of per share earnings NA
15.0 Letter regarding unaudited interim financial information NA
18.0 Letter regarding change in accounting principles NA
19.0 Report furnished to security holders NA
22.0 Published report regarding matters submitted to vote of security holders NA
23.0 Consents of accountants, experts and counsel NA
24.0 Power of attorney NA
27.1 Financial data schedule (electronic filers only) *
99.1 Forward Looking Statements 1996 Form 10-K 99.1
</TABLE>
(b) Reports on Form 8-K.
None
13
<PAGE>
SIGNATURES
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.
OMNI INSURANCE GROUP, INC.
Registrant
Date: August 12, 1997 /s/ J. Paul Kennedy
-----------------------------------
J. Paul Kennedy, President & Chief
Operating Officer
Date: August 12, 1997 /s/ Susan H. Scalf
-----------------------------------
Susan H. Scalf, Senior Vice
President & Treasurer
14
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from Omni
Insurance Group, Inc.'s June 30, 1997 financial statements and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000906786
<NAME> OMNI INSURANCE GROUP INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<DEBT-HELD-FOR-SALE> 79,550
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 256
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 90,585
<CASH> 0
<RECOVER-REINSURE> 2,894
<DEFERRED-ACQUISITION> 10,957
<TOTAL-ASSETS> 171,552
<POLICY-LOSSES> 39,848
<UNEARNED-PREMIUMS> 63,137
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 57
<OTHER-SE> 54,910
<TOTAL-LIABILITY-AND-EQUITY> 171,552
61,081
<INVESTMENT-INCOME> 2,163
<INVESTMENT-GAINS> (26)
<OTHER-INCOME> (3)
<BENEFITS> 47,233
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 12,331
<INCOME-PRETAX> 3,651
<INCOME-TAX> 848
<INCOME-CONTINUING> 2,803
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,803
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
OMNI INSURANCE GROUP, INC.
Incorporated: June 2, 1986
Amended: February 21, 1994
BY-LAWS
TABLE OF CONTENTS
ARTICLE ONE - OFFICES
SECTION 1.1 Registered Office and Agent 1
SECTION 1.2 Other Offices 1
ARTICLE TWO - SHAREHOLDERS' MEETING
SECTION 2.1 Place of Meetings 1
SECTION 2.2 Annual Meetings 1
SECTION 2.3 Substitute Annual Meeting 1
SECTION 2.4 Special Meetings 1
SECTION 2.5 Notice Of Meetings 1
SECTION 2.6 Quorum 2
SECTION 2.7 Voting of Shares 2
SECTION 2.8 Proxies 2
SECTION 2.9 Presiding Officer 2
SECTION 2.10 Adjournments 3
SECTION 2.11 Action of Shareholders Without a Meeting 3
ARTICLE THREE - THE BOARD OF DIRECTORS
SECTION 3.2 Number, Election and Term of Office 3
SECTION 3.3 Removal 3
SECTION 3.4 Vacancies 4
SECTION 3.5 Compensation 4
SECTION 3.6 Committees of the Board 4
i
<PAGE>
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4.1 Regular Meetings 4
SECTION 4.2 Special Meetings 4
SECTION 4.3 Place of Meetings 4
SECTION 4.4 Notice of Meetings 4
SECTION 4.5 Quorum 5
SECTION 4.6 Vote Required for Action 5
SECTION 4.7 Action by Directors Without a Meeting 5
SECTION 4.8 Adjoumments 5
ARTICLE FIVE - NOTICE OF WAIVER
SECTION 5.1 Procedure 5
SECTION 5.2 Waiver 6
ARTICLE SIX - OFFICERS
SECTION 6.1 Number 6
SECTION 6.2 Election and Term 6
SECTION 6.3 Compensation 6
SECTION 6.4 Removal 6
SECTION 6.5 Chairman, Chief Executive Officer 6
SECTION 6.6 President 6
SECTION 6.7 Vice Presidents 6
SECTION 6.8 Secretary 7
SECTION 6.9 Treasurer 7
SECTION 6.10 Assistant Secretary and Assistant Treasurer 7
ARTICLE SEVEN - SHARES
SECTION 7.1 Authorization and Issuance of Shares 7
SECTION 7.2 Share Certificates 7
SECTION 7.3 Rights of Corporation with Respect to 8
Registered Owners
ii
<PAGE>
SECTION 7.4 Transfers of Shares 8
SECTION 7.5 Lost of Stolen or Destroyed Certificates 8
SECTION 7.6 Fixing of Record Date 8
SECTION 7.7 Record Date if None Fixed 9
ARTICLE EIGHT - INDEMNIFICATION
SECTION 8.1 Third Party Suits 9
SECTION 8.2 Suits By or in Right of the Corporation 9
SECTION 8.3 Indemnification Against Expenses 10
SECTION 8.4 Determination that Indemnification is Proper 10
SECTION 8.5 Advance of Expenses 10
SECTION 8.6 By-Laws Not Exclusive 11
SECTION 8.7 Insurance 11
SECTION 8.8 Severability 11
ARTICLE NINE - MISCELLANEOUS
SECTION 9.1 Inspection of Books and Records 11
SECTION 9.2 Fiscal Year 11
SECTION 9.3 Seal 12
ARTICLE TEN - AMENDMENTS
SECTION 10.1 Power to Amend By-Laws 12
SECTION 10.2 Conditions 12
iii
<PAGE>
AMENDED
BY-LAWS
OMNI INSURANCE GROUP, INC.
Incorporated: June 2, 1986
Amended: February 21,1994
-------------------
ARTICLE ONE
Offices
1.1 Registered Office and Agent. The corporation shall maintain
a registered office and shall have a registered agent whose business office is
identical with such registered office.
1.2 Other Offices. The corporation may have offices at such place or
places, within or without the State of Georgia, as the Board of Directors may
from time to time appoint or the business of the corporation may require to
make desirable.
ARTICLE TWO
Shareholders' Meetings
2.1 Place of Meetings. Meetings of the shareholders may be held at any
place within or without the State of Georgia as set forth in the notice thereof
or in the event of a meeting held pursuant to waiver of notice, as may be set
forth in the waiver, or if no place is so specified, at the registered office
of the corporation.
2.2 Annual Meetings. The annual meeting of shareholders shall be held
on the third Tuesday in May unless that day be a legal holiday, and in that
event, on the next succeeding business day, for the purpose of electing
directors and transacting any and all business that may properly come before
the meeting.
2.3 Substitute Annual Meeting. If the annual meeting is not held on
the day designated in Section 2.2, any business, including the election of
directors, which might properly have been acted upon at that meeting may
be acted upon at any subsequent shareholders' meeting held pursuant to these
the by-laws or to a court order requiring a substitute annual meeting.
2.4 Special Meetings. Special meetings of the shareholders may be
called at any time by the Chairman, Chief Executive Officer, the President,
the Board of Directors, or by the holdings of fifty percent (50%) or more of
all the shares entitled to vote.
<PAGE>
2.5 Notice of Meetings. Unless waived as contemplated in Section 5.2
or by attendance at the meeting, either in person or by proxy, for any purpose
other than to object to the transaction of business, a written or printed
notice of each shareholders' meeting stating the place, day and hour of the
meeting shall be delivered not less than ten (10) days nor more than sixty (60)
days before the date thereof, either personally or by mail, by or at the
direction of the President or Secretary or other person calling the meeting,
to each shareholder of record entitled to vote at such meeting. In the case
of an annual or substitute annual meeting, the notice of the meeting need not
state the purpose or purposes of the meeting unless the purpose or purposes
constitute a matter which the Georgia Business Corporation Code requires
to be stated in the notice of the meeting. In the case of a special meeting,
the notice of meeting shall state the purpose or purposes for which the
meeting is called.
2.6 Quorum. At all meetings of the shareholders the presence, in
person or by proxy, of the holders of more than one-third of the shares
outstanding and entitled to vote shall constitute a quorum. If a quorum is
present, a majority of the shares outstanding and entitled to vote which are
represented at any meeting shall determine any matter coming before the
meeting unless a different vote is required by statute, by the articles of
incorporation or by these by-laws. The shareholders at a meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
2.7 Voting of Shares. Each outstanding share having voting rights
shall be entitled to one vote on each matter submitted to a vote at a meeting
of shareholders. Voting on all matters shall be by voice vote or by show of
hands unless any qualified voter, prior to the voting on any matter, demands
vote by ballot, in which case each ballot shall state the name of the
shareholder voting and the number of shares voted by him, and if such ballot
be cast by proxy, it shall also state the name of such proxy.
2.8 Proxies. A shareholder entitled to vote pursuant to Section 2.7
may vote in person or by proxy executed in writing by the shareholder or by
his attorney-in-fact. A proxy shall not be valid after eleven (11) months from
the date of its execution, unless a longer period is expressly stated therein.
If the validity if any proxy is questioned, it must be submitted to the
Secretary of the shareholders' meeting for examination or to a proxy officer
or committee appointed by the person presiding at the meeting. The Secretary
of the meeting or, if appointed, the proxy officer or committee, shall
determine the validity or invalidity of any proxy submitted and referenced by
the Secretary in the minutes of the meeting to the regularity of a proxy shall
be received as prima facie evidence of the fact stated for the purpose of
establishing the presence of a quorum at such meeting and for all other
purposes.
2.9 Presiding Officer. The Chairman, Chief Executive Officer, or in
his absence, the President, shall serve as a chairman of every shareholders'
meeting unless some other person is elected to serve as chairman by a majority
vote of the shares represented at the meeting. The chairman shall appoint such
persons as he deems required to assist with the meeting.
2
<PAGE>
2.10 Adjournments. Any meeting of the shareholders, whether or not
a quorum is present1 may be adjourned by the holders of a majority of the
voting shares represented at the meeting to reconvene at a specific time and
place. It shall not be necessary to give any notice of the reconvened meeting
or of the business to be transacted, if the time and place of the reconvened
meeting are announced at the meeting which was adjourned. At any such
reconvened meeting at which a quorum is represented or present, any business
may be transacted which could have been transacted at the meeting which was
adjourned.
2.11 Action of Shareholders without a Meeting. Any action which may
be taken at a meeting of the shareholders may be taken without a meeting if a
written approval and consent, setting forth the action authorized, shall be
signed by each of the shareholders entitled to vote on the date on which the
last shareholder signs such approval and consent and upon the filing of such
approval and consent with the officer of the corporation having custody of its
books and records. Such approval and consent so filed shall have the same
effect as a unanimous vote of the shareholders at a special meeting called for
the purpose of considering the action authorized.
ARTICLE THREE
The Board of Directors
3.1 General Powers. The business and affairs of the corporation
shall be managed by the Board of Directors. In addition to the powers and
authority expressly conferred upon it by these by-laws, the Board of Directors
may exercise all such powers of the corporation and do all such lawful acts
and things as are not by law, by any legal agreement among shareholders, by
the articles of incorporation or by these by-laws directed or required to be
exercised or done by the shareholders.
3.2 Number, Election and Term of Office. Unless Georgia Law permits
a lesser number, the number of Directors of the corporation shall be not less
than three (3) nor more than (11), the precise number to be fixed by resolution
of the shareholders from time to time. Except as provided in Section 3.4, the
Directors shall be elected by the affirmative vote of a majority of the shares
represented at the annual meeting. Each Director, except in case of death,
resignation, retirement, disqualification, or removal, shall serve until the
next succeeding annual meeting and thereafter until his successor shall have
been elected and qualified.
3.3 Removal. Any Director may be removed from office with or without
cause by the affirmative vote of the holders of a majority of the shares
entitled to vote at an election of Directors. Removal action may be taken at
any shareholders' meeting with respect to which notice of such purpose
has been given, and a removed Director's successor may be elected at the same
meeting to serve the unexpired term.
3
<PAGE>
3.4 Vacancies. A vacancy occurring in the Board of Directors, except
by reason of removal of a Director, may be filled for the unexpired term, by
affirmative vote of a majority of the Directors remaining in office though
less than a quorum of the Board of Directors, and such newly appointed
Director shall remain in office until the shareholders shall have elected a
successor.
3.5 Compensation. Directors may receive such compensation for their
services as Directors as may from time to time be fixed by vote of the Board
of Directors or the shareholders. A Director may also serve the corporation
in a capacity other than that of Director and receive compensation, as
determined by the Board of Directors for services rendered in that other
capacity.
3.6 Committees of the Board of Directors The Board of Directors by
resolution adopted by a majority of the full Board of Directors may designate
from among its members an executive committee and one or more other committees,
each consisting of three or more Directors. Except as prohibited by law, each
committee shall have the authority set forth in the resolution establishing
said committee.
ARTICLE FOUR
Meetings of the Board of Directors
4.1 Regular Meetings. Regular meetings of the Board of Directors
shall be held immediately after the annual meeting of shareholders or any
meeting held in lieu thereof. In addition, the Board of Directors may schedule
other meetings to occur at regular intervals throughout the year.
4.2 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman, Chief Executive Officer,
or in his absence by the President of the Corporation, or by any two Directors
in office at that time.
4.3 Place of Meetings. Directors may hold their meetings at any
place within or without the State of Georgia as the Board of Directors may
from time to time establish for regular meetings or as is set forth in the
notice of special meetings or, in the event of a meeting held pursuant to
waiver of notice, as may be set forth in the waiver.
4.4 Notice of Meetings. No notice shall be required for any regularly
scheduled meeting of the Directors of the corporation. Unless waived as
contemplated in Section 5.2, the President or Secretary of the corporation or
any Director thereof shall give notice to each director of each special meeting
stating the time, place and purposes of the meeting. Such notice shall be
given by mailing a notice of the meeting at least five (5) days before the
date of the meeting, or by telephone, telegram, cablegram or personal delivery
at least three (3) days before the date of the meeting. Notice shall be
deemed to have been given by telegram or cablegram at the time notice is filed
with the transmitting agency.
4
<PAGE>
Attendance by a Director at a meeting shall constitute waiver of notice of such
meeting, except where a Director attends a meeting for the express purpose of
objecting to the transaction of business because the meeting is not lawfully
called.
4.5 Quorum. At meetings of the Board of Directors, more than one-half
of the Directors then in office shall be necessary to constitute a quorum for
the transaction of business. In no case shall less than one-third of the total
number of Directors authorized at that time nor less than two Directors
constitute a quorum, except that when the Board of Directors consists of only
one Director, then one Director shall constitute a quorum.
4.6 Vote Required for Action. Except as otherwise provided in this
section or by law, the act of a majority of the Directors present at a meeting
at which a quorum is present at the time shall be the act of the Board of
Directors. Adoption, amendment and repeal of a by-law is provided for in
Article Ten of these by-laws. Vacancies in the Board of Directors may be filled
as provided in Section 3.4 of these By-laws.
4.7 Action by Directors Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if a written consent thereto shall be signed by all the
Directors and such written consent is filed with the minutes of the proceedings
of the Board. Such consent shall have the same force and effect as a unanimous
vote of the Board of Directors.
4.8 Adjournments. A meeting of the Board of Directors, whether or
not a quorum is present, may be adjourned by a majority of the Directors
present to reconvene at a specific time and place. It shall not be necessary to
give notice of the reconvened meeting or of the business to be transacted,
other than by announcement at the meeting which was adjourned. At any such
reconvened meeting at which a quorum is present, any business may be transacted
which could have been transacted at the meeting which was adjourned.
ARTICLE FIVE
Notice and Waiver
5.1 Procedure. Whenever these by-laws require notice to be given to
any shareholder or Director, the notice shall be given as prescribed in
Sections 2.5 or 4.4 for any shareholder or Director respectively. Whenever
notice is given to a shareholder or Director by mail, the notice shall be sent
first class mail by depositing the same in a post office or letter box in a
postage prepaid sealed envelope addressed to the shareholder or Director at
his address as it appears on the books of the corporation, and such notice
shall be deemed to have been given at the time the same is deposited in the
United States mail.
5
<PAGE>
5.2 Waiver. Whenever any notice is required to be given to any
shareholder or Director by law,by the articles of incorporation or by these
by-laws, a waiver thereof in writing signed by the Director or shareholder
entitled to such notice or by the proxy of such shareholder, whether before or
after the meeting to which the waiver pertains, shall be deemed equivalent
thereto.
ARTICLE SIX
Officers
6.1 Number. The Executive Officers of the corporation shall consist
of a Chairman, Chief Executive Officer, a President, one or more Vice
Presidents as determined or designated by the Board of Directors, a Secretary
and a Treasurer. The Board of Directors shall from time to time create and
establish the duties of such other officers and elect or provide for the
appointment of such other officers or assistant officers as it deems necessary
for the efficient management of the corporation, but the corporation shall not
be required to have at any time any officers other than a Chairman, Chief
Executive Officer, President, Secretary and Treasurer. Any two or more offices
may be held by the same person, except the offices of President and Secretary.
6.2 Election and Term. All Executive Officers shall be elected by
the Board of Directors and shall serve at the will of the Board of Directors
and until their successors have been elected and have qualified or until their
earlier death, resignation, removal, retirement or disqualification.
6.3 Compensation. The compensation of all Executive Officers of the
corporation shall be fixed by the Board of Directors.
6.4 Removal. Any officer or agent elected by the Board of Directors
may be removed by the Board of Directors at any meeting with respect to which
notice of such purpose has been given to the members thereof.
6.5 Chairman, Chief Executive Officers. The Chairman, Chief Executive
Officer shall serve as Chairman of all meetings of the Board of Directors and
shall be the Chief Executive Officer of the corporation. The Chairman, Chief
Executive Officer shall have general supervision responsibilities of all
aspects of the corporation.
6.6 President. The President shall be the chief operating officer of
the corporation and shall have general supervision of the operating aspects of
the corporation. He shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President shall perform such other
duties as may from time to time be delegated to him by the Board of Directors.
6.7 Vice Presidents. The Vice President shall1 in the absence or
disability of the President, or at the direction of the President, perform the
duties and exercise the powers of the President. If the corporation has more
6
<PAGE>
than one Vice President1 the one designated by the Board of Directors shall act
in lieu of the President. Vice Presidents shall perform whatever duties and
have whatever powers the Board of Directors may from time to time assign.
6.8 Secretary. The Secretary shall keep accurate records of the acts
and proceedings of all meetings of shareholders, Directors and committees of
Directors. He shall have authority to give all notices required by law or
these by-laws. He shall be custodian of the corporate books, records,
contracts, and other documents. The Secretary may affix the corporate seal to
any lawfully executed documents requiring it and shall sign such instruments as
may require his signature. The Secretary shall perform whatever additional
duties and have whatsoever additional powers the Board of Directors may from
time to time assign him.
6.9 Treasurer. The Treasurer shall have custody of all funds and
securities belonging to the Corporation and shall receive, deposit or disburse
the same under the direction of the Board of Directors. The Treasurer shall
keep full and true accounts of all receipts and disbursements and shall make
such reports of the same to the Board of Directors and President upon request.
The Treasurer shall perform all duties as may be assigned to him from time to
time by the Board of Directors.
6.10 Assistant Secretary and Assistant Treasurer. The Assistant
Secretary and Assistant Treasurer shall, in the absence or disability of the
Secretary or the Treasurer, respectively, perform the duties and exercise the
powers of those offices, and they shall, in general, perform such other duties
as shall be assigned to them by the Board of Directors or by the person
appointing them. Specifically, the Assistant Secretary may affix the corporate
seal to all necessary documents and attest the signature of any officer of the
corporation.
ARTICLE SEVEN
Shares
7.1 Authorization and Issuance of Shares. The par value and the
maximum number of shares of any class of the corporation which may be issued
and outstanding shall be set forth from time to time in the articles of
incorporation of the corporation. The Board of Directors may increase or
decrease the number of issued and Outstanding shares of the corporation within
the maximum requirements of the articles or Georgia law.
7.2 Share Certificates. The interest of each shareholder shall be
evidenced by a certificate or certificates representing shares of the
corporation which shall be in such form as the Board of Directors may from time
to time adopt in accordance with Georgia law. Share certificates shall be
consecutively numbered, shall be in registered form, and shall indicate the
date of issue and all such information shall be entered on the corporation's
7
<PAGE>
books. Each certificate shall be signed by the President or a Vice President
and the Secretary or an Assistant Secretary and shall be sealed with the seal
of the corporation or a facsimile thereof; provided, however, that where such
certificate is signed by a transfer agent, or registered by a registrar, the
signature of any such officer may be facsimile. If any officer(s) who shall
have signed or whose facsimile signature shall appear upon a share certificate
shall have ceased for any reason to be such officer(s) of the corporation
before such certificate is issued, such certificate may be issued by the
corporation with the same effect as if the person(s) who signed such
certificate or whose facsimile signatures appear thereon had not ceased to be
such officer(s)
7.3 Rights of Corporation with Respect to Registered Owners. Prior to
due presentation for transfer of registration of its shares, the corporation
may treat the registered owner of the shares as the person exclusively entitled
to vote such shares, to receive any dividend or other distribution with respect
to such shares, and for all other purposes; and the corporation shall not be
bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
7.4 Transfers of Shares. Transfers of shares shall be made upon the
transfer of books of the corporation, kept at the office of the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate, or by an attorney lawfully constituted in writing; and before
a new certificate is issued, the old certificate shall be surrendered for
cancellation or, in the case of a certificate alleged to have been lost,
stolen, or destroyed, the provisions of Section 7.5 of these by-laws shall have
been complied with.
7.5 Lost Stolen or Destroyed Certificates. Any person claiming a
share certificate to be lost, stolen or destroyed shall so make an affidavit or
affirmation in such manner as the Board of Directors may require and shall, if
the Board of Directors so requires, give the corporation a bond of indemnity in
form and amount, and with one or more sureties satisfactory to the Board of
Directors, as the Board of Directors may require, whereupon an appropriate new
certificate may be issued in lieu of the one alleged to have been lost, stolen
or destroyed.
7.6 Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purpose, the
Board of Directors may fix in advance a date as the record date, such date to
be not more than 50 days (and, in the case of a shareholders' meeting, not less
than 10 days) prior to the date on which the particular action, requiring such
determination of shareholders is to be taken.
8
<PAGE>
7.7 Record Date if None Fixed. If no record date is fixed, as
provided in Section 7.6 of these by-laws, then the record date for any
determination of shareholders which may be proper or required by law, shall be
the date on which notice is mailed, in the case of a shareholders' meeting; the
date on which the Board of Directors approves a resolution declaring a
dividend, in the case of a payment of a dividend; and the date on which any
other action, the consummation of which requires a determination of
shareholders, is to be taken.
ARTICLE EIGHT
Indemnification
8.1 Third Party Suits. To the extent permitted by Georgia law from
time to time in effect and subject to the provisions of this Article Eight, the
corporation shall indemnify any person who was or is a party to or is
threatened, to be made a party to any threatened, pending or completed action
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation in which such
person was adjudged liable to the Corporation or in connection with any other
proceeding in which such person was adjudged liable on the basis that such
person improperly received a personal benefit) by reason of the fact that such
person is or was a director or officer of the corporation, or is or was serving
at the request of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, limited liability
company, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not of itself, create a presumption that such person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the corporation or its
shareholders and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful.
8.2 Suits By or in Right of the Corporation. To the extent permitted
by Georgia law from time to time in effect and subject to the provisions of
this Article Eight, the corporation shall indemnify any person who was or is
a party to or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, limited
9
<PAGE>
liability company, partnership, joint venture, trust or other enterprise
against expenses (including attorney's fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation Or
its shareholders, except that no indemnification shall be made with respect to
any claim, issued or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine upon application of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
8.3 Indemnification Against Expenses. To the extent that a person
who is or was a director or officer of the corporation, or a director or
officer of any other corporation, limited liability company, partnership, joint
venture, trust or other enterprise with which he is or was serving at the
request of the corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 8.1 or 8.2
hereof, as applicable, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including attorney's
fees) actually and reasonably incurred by such person in connection therewith.
8.4 Determination that Indemnification is Proper. Any indemnification
of a person required under Section 8.1 or 8.2 hereof (unless ordered by a
court) shall be made by the corporation only upon a determination that
indemnification of the person is proper in the circumstances because such
person has met the applicable standard of conduct set forth in Section 8.1 or
8.2 hereof, as applicable. Such determination shall be made (a) by the Board
by a majority vote of a quorum consisting of directors who were not at the time
parties to such action, suit or proceeding; (b) if there is no such quorum of
disinterested directors, by a majority vote of a committee of the Board duly
designated by the Board, consisting solely of two or more directors not at the
time parties to the proceeding, (c) by special legal counsel to the Board
selected by such quorum, or if there is no such quorum, by such committee, or
if there is no such committee by a majority vote of the full Board (in which
selection directors who are parties may participate), or (d) by the
shareholders.
8.5 Advance of Expenses. Expenses incurred by any person who may have
a right of indemnification under this Article Eight in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance
of the final disposition of such action, suit or proceeding as authorized in
the manner provided by Section 8.4 hereof upon the receipt by the Corporation
of (a) a written affirmation by such person of such person's good faith belief
that such person has met the standard of conduct set forth in Section 8.1 and
8.2 hereof as applicable and (b) a written undertaking (in the form of an
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unlimited general obligation) by or on behalf of such person to repay such
amount if it shall ultimately be determined that such person is not entitled
to be indemnified by the corporation pursuant to this Article Eight.
8.6 By-Laws Not Exclusive. The indemnification provided by this
Article Eight shall apply only to amounts not otherwise paid or payable by any
available insurance. The indemnification provided by this Article Eight,
shall not be deemed exclusive of any other rights to which any person may be
entitled under any By-Laws, agreement, vote of shareholders, or disinterested
directors or otherwise, both as to action in such person's official capacity
and as to action in another capacity while holding such person's office, except
to the extent that such indemnification may not be contrary to law. The
indemnification provided by this Article Eight shall continue as to a person
who has ceased to be a director or officer and shall inure to the benefit of
the heirs, executors and administrators of such a person in the event of such
person's death.
8.7 Insurance. The corporation may purchase and maintain insurance
(and pay the entire premium therefor) on behalf of any person who is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, limited
liability company, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in such capacity or arising out of such person's status as such, whether or not
the corporation would have the power to indemnify such person against such
liability under the provisions of this Article Eight or under the laws of the
State of Georgia.
8.8 Severability. The invalidity or unenforceability of any
provisions of this Article Eight shall not affect the validity or
enforceability of any of the remaining provisions of this Article Eight and
such remaining provisions shall continue in full force and effect.
ARTICLE NINE
Miscellaneous
9.1 Inspection of Books and Records. The Board of Directors shall
have power to determine which accounts, books and records of the corporation
shall be opened to the inspection of shareholders, except such as may by law
be specifically open to inspection, and shall have power to fix reasonable
rules and regulations not in conflict with the applicable law for the
inspection of accounts, books and records which by law or by determination of
the Board of Directors shall be open to inspection.
9.2 Fiscal Year. The Board of Directors is authorized to fix the
fiscal year of the corporation and to change the same from time to time as it
deems appropriate.
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9.3 Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine.
ARTICLE TEN
Amendments
10.1 Power to Amend By-Laws. The Board of Directors shall have power
to alter, amend or repeal these by-laws or adopt new bylaws, but any by-laws
adopted by the Board of Directors may be altered, amended or repealed, and new
by-laws adopted, by the shareholders. The shareholders may prescribe that any
by-law or by-laws adopted by them shall not be altered, amended or repealed by
the Board of Directors.
10.2 Conditions. Action taken by the shareholders with respect to
by-laws shall be taken by an affirmative vote of a majority of all shares
entitled to elect Directors, and action by the Board of Directors with respect
to by-laws shall be taken by an affirmative vote of a majority of all Directors
then holding office.
/s/ K. Renee Weese
-----------------------------
Secretary
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OMNI INSURANCE GROUP, INC.
AMENDMENT 1 TO THE BYLAWS
ADOPTED: April 1, 1997
3.2 Number, Election and Term of Office. Unless Georgia Law permits
a lesser number, the number of Directors of the corporation shall be not less
than three (3) nor more than eleven (11), the precise number to be fixed by
resolution of the directors from time to time. Except as provided in Section
3.4, the Directors shall be elected by the affirmative vote of a majority
of the shares represented at the annual meeting. Each director, except in case
of death, resignation, retirement, disqualification, or removal, shall serve
until the next succeeding annual meeting and thereafter until his successor
shall have been elected and qualified.
