-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ViaCLX2Y5O+I05bWhudQjMYVIDL7ALKgMG53YFYNQfS2Cc5fKwwC1kgRUEireMmE dt+NtPFLXMRhBUfCmfIXSg== 0000950144-01-500863.txt : 20010418 0000950144-01-500863.hdr.sgml : 20010418 ACCESSION NUMBER: 0000950144-01-500863 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSURANCE MANAGEMENT SOLUTIONS GROUP INC CENTRAL INDEX KEY: 0001063167 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 593422536 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-25273 FILM NUMBER: 1604893 BUSINESS ADDRESS: STREET 1: 360 CENTRAL AVENUE CITY: ST PETERSBURG STATE: FL ZIP: 33701 BUSINESS PHONE: 7278032040 MAIL ADDRESS: STREET 1: 360 CENTRAL AVENUE CITY: ST PETERSBURG STATE: FL ZIP: 33701 10-K405 1 g67403e10-k405.txt INSURANCE MANAGEMENT SOLUTIONS GROUP, INC 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 10-K (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 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 000-25273 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) FLORIDA 59-3422536 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 360 CENTRAL AVENUE ST. PETERSBURG, FLORIDA 33701 - ---------------------------------- ---------- (Address of registrant's principal (Zip Code) executive offices) (727) 803-2040 ---------------------------------------------------- (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: TITLE OF EACH CLASS COMMON STOCK, $.01 PAR VALUE Indicate by check mark whether this registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark 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. Yes [X] No [ ] As of March 30, 2001, there were outstanding 12,800,261 shares of Common Stock. The aggregate market value of the Common Stock held by non-affiliates of the registrant as of March 30, 2001 was $1.3 million. ================================================================================ 2 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. FORM 10-K ANNUAL REPORT TABLE OF CONTENTS
PAGE ---- PART I Item 1. Business.................................................... 1 Item 2. Properties.................................................. 16 Item 3. Legal Proceedings........................................... 16 Item 4. Submission of Matters to a Vote of Security Holders......... 18 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters......................................... 19 Item 6. Selected Financial Data..................................... 20 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations................................... 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk........................................................ 28 Item 8. Financial Statements and Supplementary Data................. 28 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................................... 28 PART III Item 10. Directors and Executive Officers of Registrant.............. 29 Item 11. Executive Compensation...................................... 32 Item 12. Security Ownership of Certain Beneficial Owners and Management.................................................. 42 Item 13. Certain Relationships and Related Transactions.............. 43 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K......................................................... 50
The statements contained in this report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the Company's expectations, hopes, beliefs, intentions, or strategies regarding the future. Forward-looking statements include statements regarding, among other things: (i) the potential loss of material customers; (ii) the failure to properly manage growth and successfully integrate acquired businesses; (iii) the Company's financing plans; (iv) trends affecting the Company's financial condition or results of operations; (v) the Company's growth and operating strategies; (vi) the ability to attract and retain qualified information services and management personnel; (vii) the impact of competition from new and existing competitors; (viii) the financial condition of the Company's clients; (ix) potential increases in the Company's costs; (x) the declaration and payment of dividends; (xi) the potential for unfavorable interpretation of existing government regulations or new government legislation; (xii) the impact of general economic conditions and interest rate fluctuations on the demand for the Company's services, including flood zone determination services; (xiii) the outcome of certain litigation and administrative proceedings involving the Company's principal customer; (xiv) uncertainties regarding the market acceptance of the Company's new services; (xv) the ability to develop new technological solutions for current and prospective customers; (xvi) the ability to establish positive name recognition in the market place; (xvii) changes in existing service agreements; (xviii) the ability to obtain new customers and retain existing customers; (xix) the ability to obtain third-party information technology outsourcing services on a timely basis and at reasonable costs; and (xx) the ability to achieve expected expense reductions as a result of management initiatives. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. All forward-looking statements included in this document are based on information available to the Company on the date hereof and the Company assumes no obligation to update any such forward-looking statement. Among the factors that could cause actual results to differ materially are the factors detailed in Items 1 through 3 and 7 of this report and the risks discussed under the caption "Risk Factors" included in the Company's Registration Statement on Form S-1, as amended (Reg. No. 333-57747). Prospective investors should also consult the risks described from time to time in the Company's Reports on Form 10-Q, 8-K and 10-K and Annual Reports to Shareholders. i 3 PART I ITEM 1. BUSINESS GENERAL Insurance Management Solutions Group, Inc. (collectively with its subsidiaries, the "Company"), through its wholly-owned subsidiaries, Insurance Management Solutions, Inc., Geotrac of America, Inc. ("Geotrac") and Colonial Claims Corporation, provides (1) comprehensive policy and claims outsourcing services to the property and casualty ("P&C") insurance industry, with an emphasis on providing these services to the flood insurance market, and (2) flood zone determinations to financial institutions, mortgage lenders and insurance companies. Outsourcing Services. The Company's outsourcing services, which are offered on either a bundled or "a la carte" basis, include policy administration, claims administration and information technology services. During 1999 and 2000, the Company processed approximately 767,000 and 836,000 insurance policies, respectively, including approximately 616,000 and 675,000 flood insurance policies, respectively, making it a significant provider of flood insurance outsourcing services. The Company currently provides flood outsourcing services to approved write-your-own carriers including its affiliate, Bankers Insurance Group, Inc. (together with its subsidiaries, "BIG"), Farmers Insurance Group, Mobile USA Insurance Company, Inc. and AAA Auto Club South Insurance Company, as well as to insurance companies that offer flood insurance utilizing BIG as their private label servicing carrier, such as Armed Forces Insurance Corporation and AMICA Mutual Insurance Company. In conjunction with BIG, the Company is able to offer insurance companies the ability to create a turnkey private label flood insurance product. The Company believes this product is attractive to insurance companies that desire to offer flood insurance but are not certified by the Federal Emergency Management Agency ("FEMA") to sell and service flood insurance. The Company anticipates continued growth in the demand for flood insurance, and related flood outsourcing services, over the next several years. The Company is a 65.2% owned subsidiary of BIG, a holding company chartered in Florida in 1976. BIG provides multiple lines of P&C insurance, most notably flood, homeowners and automobile insurance, to individuals and businesses throughout the United States. From 1995 to 2000, BIG's premiums grew from $160 million to $323 million, representing annual growth rates of 46.8%, 10.4%, 13.8%, 7.3% and 2.1%, respectively, and a compound annual growth rate of 15.1%. BIG is the largest underwriter of flood insurance policies through independent agents (and the second largest overall) in the United States. BIG is also the Company's principal customer, accounting for approximately 58.1% of the Company's total revenues and 79.5% of the Company's outsourcing revenues in 1999 and approximately 60.2% of the Company's total revenues and 82.6% of the Company's outsourcing revenues in 2000. Effective January 7, 1999, the Company acquired Colonial Claims Corporation (formerly Colonial Catastrophe Claims Corporation) ("Colonial Claims"), a Florida corporation. Colonial Claims contracts with P&C insurance carriers to handle property and casualty claims on their behalf. Colonial Claims has assembled a large network of independent claims adjusters who respond to individually reported loss assignments from Colonial Claims and are compensated based upon a set claims fee schedule. Colonial Claims reviews and approves claims settlements, assures consistency and quality of settlement practices, and transmits claims information to the insurance carriers. The insurers, in turn, approve and remit claims payments to the insureds. During 1999 and 2000, Colonial Claims accounted for approximately $7.6 million and $3.5 million, respectively, of the Company's outsourcing revenues. Flood Zone Determination Operations. Geotrac is a leading provider of flood zone determination services. During 1999 and 2000, Geotrac processed approximately 1.28 million and 1.29 million flood zone determinations, respectively, for over 1,380 and 1,880 customers, respectively, including mortgage lenders and P&C insurance companies. Flood insurance is required by federal law in connection with virtually all residential mortgage loans, including refinancing loans, covering properties located within federally designated high-risk flood zones. A flood zone determination is necessary in order to ascertain a property's flood zone classification. In addition, due to more stringent underwriting criteria, P&C insurers increasingly require flood zone determinations prior to issuing commercial property policies. Geotrac uses its proprietary database, 1 4 compiled and digitized from flood maps distributed by FEMA, to determine whether a particular property or structure is located within a flood zone classification that requires flood insurance. The Company estimates that over 95% of U.S. households are in counties covered by its electronic database. OVERVIEW OF THE FEDERAL FLOOD INSURANCE PROGRAM AND FLOOD INSURANCE MARKET The U.S. flood insurance market is regulated by FEMA, which launched the National Flood Insurance Program (the "Flood Program") in 1968. FEMA created the Flood Program to provide federally-backed flood insurance to residents in designated floodplain communities, on the condition that such communities comply with the Flood Program's floodplain management requirements. The Flood Program, as it exists today, is administered by the Federal Insurance Administration ("FIA"). The Flood Program was launched in 1968, and in 1983, FIA opened the flood insurance market to private insurance companies by establishing the National Flood Insurance Write Your Own ("WYO") program. The WYO program permits private insurance companies who meet FEMA requirements to sell flood insurance underwritten by the federal government and subject to federal regulation. In 1994, Congress passed the National Flood Insurance Reform Act of 1994 (the "1994 Reform Act"). The 1994 Reform Act clarified and strengthened the obligations of mortgage lenders to oversee and ensure the purchase of flood insurance by borrowers who obtain federally-insured residential mortgage loans on properties located in federally designated high-risk flood zones. Under the 1994 Reform Act, mortgage lenders must notify borrowers when flood insurance is required, require flood insurance as a condition to making certain loans, and place flood insurance premiums in escrow when other payments are escrowed. Lenders who fail to comply with the 1994 Reform Act are subject to substantial monetary penalties. From 1995 through 2000, the U.S. flood insurance market has grown from $1.1 billion to $1.7 billion in total annual flood premiums, representing annual growth rates of 8.5%, 15.0%, 15.1%, 4.2%, and (0.1)%, respectively, and a compound annual growth rate of 8.4%. During that same period, the dollar amount of annual flood premiums administered by the Company has grown from $80 million in 1995 to $216 million in 2000, representing annual growth rates of 27.6%, 29.5%, 19.6%, 18.3%, and 15.4%, respectively, and a compound annual growth rate of 22.0%. Currently, almost 19,000 communities participate in the Flood Program, and approximately 100 insurance companies are registered to offer WYO flood insurance. TREND TOWARD OUTSOURCING IN THE P&C INDUSTRY The P&C industry provides financial protection for individuals, businesses and others against losses of property or losses by third parties for which the insured is liable. P&C insurers underwrite policies that cover various types of risk, which can generally be divided into personal lines of insurance covering individuals and commercial lines of insurance covering businesses. Personal lines are comprised primarily of automobile and homeowners insurance. Commercial lines cover a wide range of commercial risks that affect businesses. According to A.M. Best, premium revenues in the P&C industry have increased by an average of 2.2% annually since 1995. The P&C industry is highly competitive, with insurance companies competing primarily on the basis of price, consumer satisfaction and the ability to pay claims. According to A.M. Best, as of December 31, 1999, there were approximately 3,300 P&C insurance companies in the United States. These companies generated approximately $287 billion in annual P&C premium revenues in 1999, of which more than one-half related to personal lines automobile, homeowners and flood insurance business, the core markets serviced by the Company. The Company believes there are a significant number of P&C insurance companies for which outsourcing is a viable alternative to maintaining in-house processing capabilities. More specifically, the Company believes it can offer many of these insurance companies the opportunity to reduce their processing costs by outsourcing such functions to the Company. Over the past decade, many P&C insurance companies have begun using third-party vendors to provide certain policy and claims administration services that were traditionally performed in-house. This outsourcing of services allows insurers to focus on their core competencies, reduce costs and eliminate capital expenditures for the development, installation, operation and maintenance of information management and automation 2 5 systems. The Company believes that insurance companies will increase their levels of outsourcing as they determine that policy and claims administration and regulatory compliance are complicated and too costly to perform efficiently in-house. The Company believes it will have opportunities to market its outsourcing services for the following reasons: - Consolidation and Drive for Cost Efficiencies. Providers of outsourcing services are able to consolidate large volumes of business into automated and effective processing systems, thereby creating significant cost efficiencies. The Company believes insurance companies typically outsource administrative services because outsource providers can provide better quality services at a lower cost. - Technological Challenges and Complexities. The investment in the specialized technical knowledge required to develop, install and operate information systems necessary for P&C insurers to remain competitive is often cost prohibitive, particularly for smaller companies and new entrants to the market. Insurance companies can take advantage of the economies of technology created by an outsource provider's investment in information systems. - Development of Internet Based Solutions. The Company believes that, in order to compete in an Internet economy, P&C companies will need to aggressively pursue Internet solutions for their business -- either directly to consumers or through their insurance agency (direct or independent) distribution channel. According to The Conning Commentary, a principal need of independent insurance agents is an effective electronic interface with insurance carriers. Until recently, most insurance company web sites provided information content only; however, the current trend is toward quoting, rating and issuing policies via the Internet. The Company believes that there are a substantial number of P&C companies that have targeted the Internet as their primary initiative in terms of providing a mechanism for their producers to quote, rate and issue insurance policies. The Company also believes many of these companies will need to outsource the development of an Internet insurance transaction solution because of the proprietary nature of their information technology ("IT") systems and the difficulty of connecting them to the Internet. - Changing Distribution Channels. The Company believes that demand for outsourcing services will increase as banks, credit unions and other financial service companies enter the P&C market. These new entrants were generally precluded from selling insurance until the U.S. Supreme Court decision in Barnett Bank v. Nelson in 1996. The Company believes that, following this decision, and despite continuing restrictions and pressure from state regulators, banks and other financial institutions will enter the P&C market at an increasing rate, often forming joint ventures and other alliances with certain insurers to sell P&C insurance. Many new entrants lack the technology, expertise or desire to perform policy and claims processing in-house. These so-called "virtual insurance companies" often focus their resources on the core marketing, underwriting and financial aspects of the P&C business and seek to outsource their policy and claims administration to third-party vendors. - Regulatory Reporting Requirements. State insurance regulators closely regulate the product offerings, claims processes and premium rate structures of insurance companies. To comply with such regulations, companies must file annual and other reports relating to their financial condition. Third-party vendors with effective policy and claims administration systems can facilitate compliance with many regulatory requirements by automating statutory reporting and other compliance tasks. THE IMSG SOLUTION The Company believes it is positioned to capitalize on the foregoing market opportunities in the following ways: - Flood Insurance Experience. The Company is one of the leading providers of flood insurance outsourcing services in the United States, currently servicing over 675,000 flood insurance policies. As a result, the Company has developed substantial expertise and scale in virtually all aspects of the flood insurance servicing business. 3 6 - Flexible, Comprehensive, Turnkey Solutions. The Company offers a comprehensive range of outsourcing services, both individually and on a bundled basis, giving clients flexibility in selecting and matching services to their needs. The Company's turnkey solutions allow clients to focus on core competencies and better manage costs and allow new market entrants an opportunity to offer insurance products on a cost-effective basis by leveraging the Company's systems and business processes. - Insurance Industry Expertise. Unlike certain of its competitors, the Company's senior management has substantial experience in the insurance industry. As a result of this core competence, management believes the Company is well-suited to understand and address its customers' needs. - Flood Zone Determination Services. The Company offers a highly automated flood zone determination service based on its proprietary national database. This service provides an accurate, prompt and relatively low cost determination of a residential or commercial property's status with respect to national flood zones. Insurance companies, credit unions, banks and other financial institutions use this service to comply with federal laws requiring mortgage lenders to oversee and ensure the purchase of flood insurance by certain borrowers, create a competitive advantage in loan approval/insurance underwriting response time and generate additional fees from their borrowers. - Modular, Integrated and Real-time Systems. The Company's information systems are table-driven and modular in design, enabling the Company to provide systems that address the specific needs of the client, such as distinct underwriting rules. The core system permits integration of a client's database, thereby eliminating the need for data re-entry for multiple applications. The system provides real-time processing of key functions, such as policy processing and endorsements, that enhances completeness and accuracy in processing. The Company's system also has a proven track record of reliability and low system "down-time." The Company is committed to upgrading and maintaining its systems in an effort to remain competitive. - Customer Service to Independent Agent Networks and Policyholders. Because residential and commercial flood insurance rates are set by FEMA and therefore are not directly subject to competitive pressures, the Company believes customer service is a critical consideration for independent sales agents in determining which carrier's flood insurance policies to sell. BIG is the largest underwriter of flood insurance policies through independent agents in the United States, and the Company processes and services all of BIG's flood insurance policies. The Company believes that largely as a result of its affiliation with BIG it has developed a customer service-oriented culture that strengthens its clients' relationships with their independent sales agent networks and policyholders. The Company focuses on providing superior service, such as timely policy issuance and rapid and professional response to agent and policyholder inquiries. The Company maintains and monitors quality service standards and continually seeks to measure customer satisfaction. - Claims Services. The Company believes it is positioned to capitalize on its significant experience in the area of claims adjusting and processing. The Company recently integrated the claims operations of its Colonial Claims subsidiary with its internal property claim division in order to offer independent property adjusting services in addition to catastrophe adjusting services. GROWTH STRATEGY The Company's objectives are (1) to become a leading provider of outsourcing services to the P&C industry and (2) to become the leading provider of flood zone determinations to financial institutions, mortgage lenders and P&C insurers. The Company's principal strategies for achieving these objectives are as follows: - Expand Flood Outsourcing Business. The Company has extensive experience and expertise in virtually all aspects of the flood insurance servicing business and occupies a leading position in that market. Key aspects of the Company's growth strategy include (1) marketing flood outsourcing services to existing WYO carriers that it believes will benefit for cost or infrastructure reasons from the Company's services, (2) offering its outsourcing services to new entrants that lack the infrastructure or 4 7 expertise necessary to service flood insurance customers, (3) marketing its ability, in conjunction with BIG, to provide and service a private label insurance product to insurance companies that desire to offer flood insurance but are not approved by FEMA to sell and service flood insurance, and (4) increasing the volume of flood outsourcing services business from the Company's existing customer base, which as of March 31, 2001, consisted of twenty-three (23) customers under contract, either directly or through BIG. - Expand Relationships With Existing Customers. The Company intends to continue to pursue efforts to capitalize on its existing outsourcing customer base by cross-marketing additional outsourcing services to certain of these existing customers. - Expand E-Solutions Focus. The Company believes that it has the ability to assist P&C insurers in their challenge to provide Internet-based services. The Company also believes that its solution of connecting legacy systems with Internet browser-based functionality will be an attractive alternative to P&C companies attempting to develop a solution using their own resources. In 2000, the Company completed and fully integrated its Internet solution for its flood and homeowners products. Although the Company plans to continue its own development in this area, it may also use third-party software developers to assist in bringing on new clients requiring different connectivity solutions. - Focus on Maximizing Economies of Scale. The Company believes that demand for P&C insurance outsourcing services will grow as such services become more affordable and cost effective. To achieve such affordability and cost effectiveness, a P&C outsourcing provider must develop certain economies of scale. The Company currently services over 836,000 insurance policies annually. As a result, it has developed a large number of efficiencies in many aspects of its operations, from the receipt of policy applications to billings and collections. By deploying internally developed applications software, rating disks for applications input, lockbox and cash office processing, automated voice response, computerized forms and automated policy assembly, the Company has attained expense efficiencies that management believes are characteristic of insurers processing substantially greater policy volumes. As a consequence, the Company believes it is well-positioned to capitalize on the growing trend toward outsourcing administrative functions in the P&C industry by offering insurers better quality and more cost-effective "back office" operations. Moreover, the Company intends to continue expanding these efficiencies by increasing the utilization of its existing infrastructure and databases. - Redirect Sales Efforts. During 2000, the Company established separate marketing alliances with a large reinsurance company and a large reinsurance broker. The Company anticipates that these alliances will enable the Company to review potential clients brought to them by these alliance partners. In addition, the Company has eliminated its internal outsourcing sales force, thereby reducing its overall marketing expenses. - Generate Recurring Revenues. The Company seeks to generate recurring revenues by entering into contractual relationships (typically three to five years) with its outsourcing customers and by offering services that are structured to generate revenues based on events that occur frequently in the normal course of a customer's business, such as claims, mortgage applications and insurance policy renewals. SERVICES Outsourcing Services. The Company's outsourcing services include policy administration, claims administration and information technology services. The Company works with each customer in an effort to ensure a seamless integration of the customer's in-house and outsourced activities. Policy administration describes the range of services the Company offers customers that are considering outsourcing their policy administration functions. When policy administration is outsourced, the customer retains all financial risk and works with the Company to set underwriting and rating guidelines. The Company typically receives a percentage of premiums for performing policy administration services. The Company's policy administration menu includes the following services: policy processing and related data entry; policy issuance and acceptance; premium management and distribution; accounting, billing and collections; customer 5 8 service phone center for policyholders and agents; and data collection, statutory reporting and regulatory compliance. Claims administration describes the range of services the Company offers in connection with the management of insurance claims. In reviewing a claim, the Company performs a thorough claim analysis and, if warranted, prepares a check for payment of the claim. The Company has a special investigative unit that assists in detecting and deterring fraud in the claim review process. The Company also offers a fully automated, stand-alone catastrophe claims operation, distinguishing its outsourcing services in the P&C insurance market. The Company is typically compensated for claims administration services on either a percentage of earned premiums or claims-paid basis. The Company's claims administration menu includes the following services: toll-free claim reporting; initial coverage confirmation services; loss investigation and determination; review and appraisal of claims; special investigation services, including fraud detection; adjustment of claims and vendor management; litigation management; and settlement and payment of claims. The Company also offers a range of information technology services to assist customers in operating, maintaining and enhancing information systems. Beginning June 1, 2001, the Company expects to provide these services primarily through third-party vendors, including BIG. See "Item 13. Certain Relationships and Related Transactions -- Letter Agreements." The Company integrates the customer's system platform with the Company's processing platform, including the installation of all necessary hardware components, depending on the customer's needs. This integration allows the customer to administer its policies and claims internally by using the Company's systems and software. The Company typically receives a percentage of premiums as compensation, subject to a minimum fee. The Company's information technology menu includes the following services: information management via integrated, secure computer systems; document imaging; Internet rating and underwriting services; monetary systems services, including payment processing; automated printing, packaging and distribution of documents; generation of agent commission statements and production reports; security administration and access control; software application enhancement and maintenance; problem resolution and reporting; and data backup and disaster recovery functions. Because the Company is affiliated with and provides comprehensive outsourcing services to BIG, an approved WYO carrier under the Flood Program, it emphasizes to prospective customers its ability to provide third-party administration outsourcing for flood insurance. The Company offers its flood outsourcing services, including software and processing functions, policy administration, claims administration and statistical reporting, on either a bundled or "a la carte" basis. New market entrants and certain other insurers may prefer to purchase unbundled services, allowing them to retain in-house control over specific aspects of their businesses. The Company makes available virtually any combination of outsourcing services required by the customer. The Company also offers flood outsourcing services to insurance companies that seek to provide flood insurance, but do not want to become certified WYO carriers. In this case, the services are provided in conjunction with a proprietary flood product. An insurance company can establish a private label insurance product written through BIG whereby the customer's name and logo appear on the policy documents, while BIG acts as the servicing carrier. The Company also intends to continue to market its outsourcing services to banks, credit unions and other financial institutions as they become increasingly involved in the sale of insurance. Flood Zone Determination Business. For a fixed fee, the Company will provide a customer -- typically a mortgage loan originator or an insurance company -- with a determination as to whether a specified property is located within a federally-designated flood zone classification. The Company uses its proprietary national flood zone database to make flood zone determinations. This database, which is continually updated, allows the Company to determine if a particular structure is located within the special flood hazard areas established by FEMA. These determinations assist mortgage lenders in complying with federal regulations under which they must require borrowers to purchase the appropriate level of flood insurance. Management estimates that over 95% of U.S. households are located in counties covered by the Company's electronic flood zone database. For approximately 80% of determinations requested, the Company is able to perform automated flood zone determinations in a matter of seconds. Determinations made on a fully-automated basis are significantly more 6 9 cost effective than manual determinations. In some cases, particularly where a property is not clearly within or outside a flood hazard area, the database search will not produce an automatic determination, or "hit," and a manual search becomes necessary. Manual searches require extra time and labor and are not nearly as cost effective as fully-automated searches. The Company provides both one-time and life-of-loan flood zone determinations. Under a "life-of-loan" determination, the Company is responsible for updating the initial flood zone determination based on revisions to the federal flood maps occurring during the term of the loan. The Company also provides portfolio analyses and audits for mortgage service agencies by reviewing blocks of loans that usually require between 100 and 50,000 flood zone determinations. In addition to flood zone determinations, the Company provides flood-related ancillary services. For example, the Company provides a standard flood compliance packet to lenders which includes information on community status, mapping, specific structure location, amount of flood insurance required, secondary market and government program restrictions, and floodway and coastal zone barrier restrictions. The life-of-loan product tracks both community status and FEMA map changes on a daily basis for the life of the loan. If changes occur that affect the subject property, a new report is automatically generated for no additional charge. Certain ancillary services are transferable if the mortgage loan for which the flood zone determination was done is sold or transferred. Through its GeoCompass(R) service, the Company provides certain CD-ROM services on-site at customer locations. The CD-ROM delivery system offers customers the ability to perform certain flood zone determinations at their own desktops. During 2000, the Company began offering Internet options for order and delivery of flood zone determinations, as well as customized direct interfaces that connect to the customer's system allowing electronic delivery of completed flood zone determinations. The Company also has established Internet alliances with providers of mortgage closing services for credit, title appraisal, tax, electronic document transfer and tracking, reporting and closing process management. The Company also actively seeks to leverage its expertise in mapping technology by providing ancillary mapping services. For example, the Company has been engaged by various municipalities or has partnered with software firms to digitize manual property tax maps and then integrate these maps with appraisal data. Most municipality property tax maps have not been digitized and the Company believes there is a significant opportunity to penetrate this market. The Company believes there are numerous other related opportunities to apply its core mapping technology expertise. The Company has established a relationship with JDI Software Services Pvt. Ltd. ("JDI"), located in India, which provides certain services that have increased the efficiency and cost effectiveness of the Company's flood zone determination business. JDI currently builds databases and creates digitized maps that the Company uses in connection with its flood zone determination business. In addition, Geotrac presently uses JDI to perform manual flood zone determination searches at costs significantly below U.S. market rates. The Company also has retained two JDI systems analysts on a consulting basis at its Norwalk, Ohio headquarters to assist in the design and programming of new technologies. Each of these consultants directs a team of programmers in Bangalore, India. The Company uses different pricing and contractual arrangements for one-time and life-of-loan flood zone determinations. The Company performs flood zone determinations for both residential and commercial properties, with determinations for residential properties comprising approximately 85% of such business. CUSTOMER SUPPORT AND INSTALLATION The Company's outsourcing services are provided from three separate customer service centers in St. Petersburg, Florida -- two for policy and claims administration and one for catastrophic claims administration. The policy administration center has approximately 150 employees, most of whom are trained customer service representatives. Customer service representatives are responsible for the timely handling and resolution of incoming phone calls related to underwriting, rating, billing, policy status and other policy administration 7 10 matters. While most calls come from insurance agents, the phone center also handles calls from mortgage companies, policyholders and insureds. The claims administration customer service center is responsible primarily for handling calls from claimants and insureds reporting property losses. The center also handles calls from agents and others related to coverage of existing claims. The center has approximately 150 employees, approximately half of whom are licensed claims representatives responsible for the adjustment of claims. Incoming calls are taken by approximately 10 customer service representatives who are trained to handle all types of insurance claims. Unlike many other claims administration centers, the Company's service center is able to immediately assign each claim to a licensed adjuster for processing. The claims administration switchboard is open weekdays from 7:30 a.m. to 9:00 p.m. (Eastern Time), and customer service representatives and licensed adjusters are available 24 hours a day, seven days a week, to handle emergency claims. The Company's Colonial Claims subsidiary operates in its own location and has a staff of approximately 10 employees. The Company currently maintains a separate customer service center relating exclusively to its flood zone determination business. This service center is located in Norwalk, Ohio and houses a staff of approximately 140 employees. The Company believes its service center is one of the largest flood zone determination service centers in the industry. A team comprised of a senior manager and up to four service representatives is assigned to each customer account. The team advises the customer in all matters of flood compliance and will train a customer's staff at their own or the Company's offices. The team also provides direct support to their customers' independent direct sales agent networks. SALES AND MARKETING The Company seeks to market its outsourcing capabilities by leveraging its existing expertise in flood insurance administration and by targeting prospective customers, such as insurers with high expense ratios or limited expertise in certain P&C lines. The Company's sales and marketing efforts are overseen by its President, who works principally in concert with its reinsurance brokers and reinsurer strategic partners to market its outsourcing services. The Company also advertises in various trade publications and participates in industry conventions and trade shows to enhance the penetration of its flood and non-flood markets. In an effort to reduce expenses, the Company eliminated its four-person marketing and sales division in February, 2001. The Company markets its flood zone determination services both directly through its own sales personnel, consisting of 14 persons, and indirectly through its alliances with other service providers. INFORMATION SYSTEMS The Company utilizes fully-integrated, real-time, processing systems at its St. Petersburg, Florida facilities to provide many of its outsourcing services. These systems, which run on an IBM AS/400 platform coupled with a relational database, enable the Company to provide on-line ratings and underwriting information, issue required insurance forms to policyholders and agents, and produce renewal and non-renewal notices. The processing systems interface with a disbursement system which enables the Company to generate checks automatically. A separate IBM AS/400 is used to develop, enhance and test new and existing systems. In the event of a power failure, the AS/400 site is supported by a fully-functional backup system that provides additional processing time of one hour under full load. Insurance policies and related documents are scanned to optical disks, and are retrievable at most LAN workstations. The Company also has an optical jukebox that can store approximately 10 million documents. The Company's data center has controls to ensure security and a disaster recovery plan which is tested regularly. The Company also utilizes computer systems at its Geotrac location, including two IBM AS/400 processors. Geotrac also has several major production systems, including GeoCompass(R) and life-of-loan tracking. 8 11 The Company is capable of developing modifications or enhancements to its licensed software to meet its outsourcing customers' particular needs. Business analysts from the Company work with each customer to ensure that the Company understands the customer's system requirements. Once the system requirements have been documented, the Company dedicates a team of systems analysts and/or contracts with a third-party provider to develop the appropriate modifications or enhancements to its software system. CUSTOMERS The Company currently provides outsourcing services to over 40 customers. The Company's largest customer, BIG, accounted for approximately 57%, 58% and 60% of the Company's revenues in 1998, 1999 and 2000, respectively. Consequently, any material decrease in the outsourcing business from BIG would have a material adverse effect on the Company's business, financial condition and results of operations. The Company provides outsourcing services to other WYO carriers, including Farmers Insurance Group, AAA Auto Club South Insurance Company and Mobile USA Insurance Company, Inc. The Company also provides outsourcing services to various insurance companies, such as Armed Forces Insurance Corporation and AMICA Mutual Insurance Company, that utilize BIG as their servicing carrier. The Company provides flood zone determination services to over 1,880 banks, credit unions, mortgage lenders, insurance companies and, other financial institutions. The Company's principal insurance company customers for such services include FM Global and Wausau Underwriters Insurance Company. In addition, the Company provides flood zone determination services to numerous credit unions, a number of which became customers as a result of the Company's alliance with CUNA Mutual Group, the nation's largest provider of insurance products to credit unions. The Company also provides such services to mortgage lenders such as ABN Amro North America, Inc. primarily through its alliance with Equifax Mortgage Services, believed by the Company to be the largest mortgage credit reporting agency in the U.S. COMPETITION The Company competes principally in three markets: (1) the market for flood insurance outsourcing services, (2) the market for other P&C insurance outsourcing services and (3) the market for flood zone determination services. The markets for these services are highly competitive. The market for flood insurance outsourcing services is dominated by the Company and several principal competitors, including National Con-Serv, Inc. and Electronic Data Systems, Inc. The Company competes for these outsourcing customers largely on the basis of price, customer service and responsiveness. The market for other P&C insurance outsourcing services is fragmented. In the policy administration services segment of this market, principal competitors include Policy Management Services Corporation and INSpire Insurance Solutions, Inc. In this segment of the market, the Company competes for customers on the basis of customer service, performance and price. The claims administration services segment of the P&C outsourcing market also is highly fragmented, with competition from a large number of claims administration companies of varying size, as well as independent contractors. Competition in this segment of the outsourcing market is principally price driven. Competitors include Lindsey Morden Claim Services, Inc., Crawford & Company, Inc. and INSpire Insurance Solutions, Inc. The Company believes, however, that its most significant competition for P&C insurance outsourcing services comes from policy and claims administration performed in-house by insurance companies. Insurers that fulfill some or all of their policy and claims administration needs in-house typically have made a significant investment in their information processing systems and may be less likely to utilize the Company's services. In addition, insurance company personnel have a vested interest in maintaining these responsibilities in-house. The market for flood zone determination services is dominated by the Company and several principal competitors, including First American Financial, Transamerica, and Fidelity National. The Company believes that the principal competitive factors in the market for flood zone determinations include price, quality and variety of services, and response time. 9 12 Certain of the Company's competitors in each of these markets have longer operating histories and significantly greater financial, technical, marketing and other resources than the Company, including name recognition with current and potential customers. As a result, these competitors may devote more resources to the development, promotion and sale of their services or products than the Company and respond more quickly to emerging technologies and changes in customer requirements. There can be no assurance that the Company will be able to compete successfully against current and future competitors, or that competitive pressure faced by the Company will not have a material adverse effect on its business, financial condition and results of operations. EMPLOYEES As of March 31, 2001, the Company had 586 full-time and 30 part-time employees, consisting of 14 in sales and marketing, 405 in customer service and support, 98 in technical support, and 99 in management, administration and finance. None of the Company's employees is subject to a collective bargaining agreement, and the Company considers its relations with its employees generally to be good. On or about June 1, 2001, the effective date of many of the changes to the various contractual arrangements between the Company and BIG set forth in a Letter Agreement, dated April 13, 2001 (the "Letter Agreement"), described in "Item 13. Certain Relationships and Related Transactions -- Letter Agreements," the Company expects to terminate approximately 70 technical support employees. It is anticipated that most, if not all, of these persons will become employees of BIG immediately thereafter, and will provide technical support services to the Company pursuant to a new Technical Support Services Agreement expected to be executed between the Company and BIG on or before June 1, 2001. RISK FACTORS The Company's financial condition and results of operations may be impacted by a number of factors, including, but not limited to the following risk factors, any of which could cause actual results to materially differ from historical or anticipated future results. Reliance on Key Customer The Company derives a substantial portion of its revenues from outsourcing services provided to its principal shareholder, BIG. For the years ended December 31, 1998, 1999 and 2000, revenues from services provided to BIG accounted for approximately 57%, 58% and 60%, respectively, of the Company's total revenues and approximately 95%, 80% and 83%, respectively, of the Company's revenues from outsourcing services. The Company has contracts with BIG pursuant to which it will continue to provide administrative services to BIG. Pursuant to the Letter Agreement, these contracts will be amended, effective June 1, 2001, to, among other things, extend their respective terms until October 31, 2002 and modify their service fee schedules to more accurately reflect current competitive rates, as well as the assumption by BIG of certain data and technical support services previously provided by the Company. See "Item 13. Certain Relationships and Related Transactions -- Letter Agreements." The Company's future financial condition and results of operations will depend to a significant extent upon the commercial success of BIG and its continued willingness to utilize the Company's services. Any significant downturn in the business of BIG or its commitment to utilize the Company's services could have a material adverse effect on the Company's business, financial condition and results of operations. Moreover, as a result of the significant changes to the contractual arrangements between the Company and BIG contemplated by the Letter Agreement, the Company will become, effective June 1, 2001, largely dependent upon BIG for technical support, computer programming and systems analysis services which the Company previously performed in-house. As a result, the Company will possess less direct control over its ability to meet its customers' demands, which, in turn, could have material adverse effect on the Company's business, financial position and results of operations. In addition, certain current or potential customers of the Company could be competitors of BIG, and, thus, the provision of such services by BIG could have a material adverse effect on the Company's relationship with such current or potential customers. 10 13 Dependence on Economic and Other Factors; Fluctuations in Quarterly Operating Results The Company's business is dependent upon various factors, such as general economic conditions and weather patterns, that are beyond its control. For example, the demand for flood zone determinations by lenders and their customers is directly related to the affordability of mortgage financing and refinancing. Higher interest rates are generally less conducive to a higher volume of mortgage lending and flood zone determinations. Therefore, increases in interest rates could have a negative impact on mortgage lending and consequently also on the level of flood zone determinations requested. Fluctuations in interest rates will likely produce fluctuations in the Company's quarterly earnings and operating results. Likewise, natural disasters such as hurricanes, tornadoes, and floods, all of which are unpredictable, directly impact the demand for both the Company's outsourcing, particularly claims outsourcing, and flood zone determination services. Class Action Litigation On September 28, 2000, October 25, 2000 and October 30, 2000, three alleged shareholders of the Company filed three nearly identical lawsuits in the United States District Court for the Middle District of Florida, each on behalf of a putative class of all persons who purchased shares of the Company's Common Stock pursuant and/or traceable to the registration statement for the Company's February 1999 initial public offering (the "IPO"). The lawsuits were consolidated on December 1, 2000, and the consolidated action is proceeding under Case No. 8:00-CV-2013-T-26MAP. The plaintiff's Consolidated Amended Class Action Complaint, filed February 7, 2001, names as defendants the following parties: the Company; Geotrac; BIG; Venture Capital Corporation, a selling shareholder in the IPO; the five inside directors of the Company at the time of the IPO; and Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc., the underwriters for the IPO. (On April 5, 2001, the plaintiffs' filed a Notice of Scrivener's Error notifying all parties to the litigation that Geotrac was inadvertently named as a defendant in the complaint.) The complaint alleges, among other things, that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, by making certain false and misleading statements in the roadshow presentations, registration statement and prospectus relating to the IPO. More specifically, the complaint alleges that, in connection with the IPO, the defendants made various material misrepresentations and/or omissions relating to: (i) the Company's ability to integrate Geotrac's flood zone determination business with the Company's own flood zone determination business and with its insurance outsourcing services business; (ii) actual and anticipated synergies between the Company's flood zone determination and outsourcing services business lines; and (iii) the Company's use of the IPO proceeds. The complaint seeks unspecified damages, including interest, and equitable relief, including a rescission remedy. On March 26, 2001, the Company, BIG and the five inside director defendants filed a motion to dismiss the plaintiffs' Consolidated Amended Class Action Complaint for, among other things, failure to allege material misstatements and/or omissions in the roadshow presentations, registration statement and/or prospectus relating to the IPO. Management of the Company believes the material allegations of the complaints are without merit and intends to vigorously defend the lawsuit. No assurances can be given, however, with respect to the outcome of the litigation, and an adverse result could have a material adverse effect on the Company's business, financial condition and results of operations. Regulatory Matters Bankers Insurance Company ("BIC"), a subsidiary of BIG, and Bankers Life Insurance Company ("BLIC") and Bankers Security Insurance Company ("BSIC"), subsidiaries of BIC, have been subject to an investigation by the Florida Department of Insurance (the "DOI"), the principal regulator of insurance activities in the State of Florida, stemming from their use of a private investigator to gather information on a DOI employee and the private investigator's unauthorized use of illegal wiretaps in connection therewith. On March 23, 2000, the Treasurer and Insurance Commissioner of the State of Florida, as head of the DOI, filed an administrative complaint against BIC, BLIC and BSIC based upon the results of such investigation. The administrative complaint charges BIC, BLIC and BSIC with violating various provisions of the Florida Insurance Code including, among other things, a provision requiring insurance companies to have management, officers or directors that are, among other things, trustworthy. The complaint further notifies BIC, BLIC 11 14 and BSIC that the Insurance Commissioner intends to impose such penalties or take such other administrative actions as may be proper or appropriate under applicable law, including possibly entering an order suspending or revoking the certificates of authority of BIC, BLIC and BSIC to conduct business as insurance companies in the State of Florida. On February 19, 2001, the DOI filed a Motion for Leave to File Amended Complaint. On March 29, 2001, the court issued an order granting the DOI's motion. BIC, BLIC and BSIC have informed the Company that they intend to vigorously defend against such action, but no assurances can be given as to the outcome thereof. In the event the DOI were to enter an order suspending or revoking the certificates of authority of BIC, BLIC and BSIC to conduct business as insurance companies in the State of Florida, or impose other significant penalties on any of them, it would materially adversely affect the business and/or operations of BIG and, in turn, could result in the loss of or material decrease in the Company's business from BIG, which would have a material adverse effect on the Company's business, financial condition and results of operations. On November 19, 1999, the United States, on behalf of the Federal Emergency Management Agency ("FEMA"), filed a civil action against BIC in the United States District Court for the District of Maryland stemming from FEMA's investigation of certain cash management and claims processing practices of BIC in connection with its participation in the National Flood Insurance Program ("NFIP"). The complaint alleges, among other things, that BIC knowingly failed to report and pay interest income it had earned on NFIP funds to the United States in violation of the False Claims Act. The complaint further alleges various common law theories, including fraud, breach of contract, unjust enrichment and negligent misrepresentation. The complaint seeks civil penalties of $1.08 million and actual damages of approximately $1.1 million as well as treble, punitive and consequential damages, costs and interest. The suit is currently stayed pending arbitration following a decision by the United States Court of Appeals for the Fourth Circuit in favor of BIC on its motion to stay the litigation pending arbitration. BIC has informed the Company that BIC is not aware of the government's intentions for further appeal of the order regarding arbitration. BIC has further informed the Company that it intends to vigorously defend against the action, but no assurances can be given as to the outcome thereof. However, BIG has advised the Company that an adverse judgment in this action should not have a material adverse affect on the business and/or operations of BIC, although no assurances can be given in this regard. FEMA's investigation of certain claims processing practices of BIC in connection with its participation in the NFIP is continuing, and BIC has produced documentation in connection therewith. If the parties are either unable to reach agreement in these matters or resolve their disagreement in arbitration, the United States could amend its complaint against BIC to add additional claims under the False Claims Act and/or various common law and equitable theories relating to such matters. In the event such continuing investigation or any consequence thereof materially adversely affects the business or operations of BIC, it could result in the loss of or material decrease in the Company's business from BIC, which would have a material adverse effect on the Company's business, financial condition and results of operations. The Company is involved in various other legal actions arising in the ordinary course of business. Management believes that the ultimate resolution of these actions will not have a material adverse effect on the Company's financial position, results of operations, or liquidity, although no assurances can be given in this regard. Government Regulation As a provider of policy and claims processing to the flood insurance industry, the Company is subject to extensive and continuously changing guidelines of the Federal Insurance Administration. No assurance can be given with respect to the extent to which the Company may become subject to regulation in the future, the ability of the Company to comply with any such regulation, the cost of compliance or an abrupt change in the overall concept or delivery of the flood insurance product on behalf of the federal government. Moreover, if the federal government were to curtail the current federal flood program, it could have a material adverse effect on the Company's business, financial condition and results of operations. 12 15 The P&C insurance industry is subject to extensive regulation by state governments. Because the Company markets and sells its services to P&C insurers, certain aspects of the Company's business are affected by such regulation. The Company must continuously update its software to reflect changes in regulations. In addition, changes in regulations that adversely affect the Company's existing and potential customers could have a material adverse effect on the Company's business, financial condition and results of operations. Although the Company's services are not directly subject to insurance regulations in the states where the Company currently provides such services, the Company's outsourcing services may be subject to insurance regulations in states where the Company may do business in the future. Such regulations could require the Company to obtain a license as a managing general agent or third-party administrator. Failure to perform in accordance with state regulations could result in the loss of significant insurance clients. No assurance can be given with respect to the extent to which the Company may become subject to regulation in the future, the ability of the Company to comply with any such regulation, or the cost of compliance. Control by Principal Shareholder; Conflicts of Interest BIG currently owns approximately 65.2% of the outstanding shares of the Company's Common Stock. As a result, BIG is able to elect the Company's directors and determine the outcome of other matters requiring shareholder approval. BIG's ultimate parent, Bankers International Financial Corporation, Ltd., is wholly-owned by a discretionary charitable trust. David K. Meehan, the Company's Chairman of the Board, and Robert M. Menke and Robert G. Menke, directors of the Company, presently serve on the board of directors of a corporation that possesses discretionary power with respect to this trust to (i) direct the trustee to appoint the trust fund to another trust for the benefit of one or more of the beneficiaries of the trust and (ii) remove the trustee and appoint one or more new trustees. The ownership of BIG of shares of Common Stock may discourage or prevent unsolicited mergers, acquisitions, tender offers, proxy contests or changes of incumbent management, even when shareholders other than BIG consider such a transaction or event to be in their best interests. Accordingly, holders of Common Stock may be deprived of an opportunity to sell their shares at a premium over the trading price of the shares. Certain officers and directors of the Company, including David K. Meehan, the Company's Chairman of the Board, also serve as officers and directors of BIG. Mr. Meehan serves as Vice Chairman of the Board of Directors of BIG, Robert M. Menke serves as a director of BIG, and Robert G. Menke serves as President, Chief Executive Officer and a director of BIG. In addition, as described below, the Company will continue to have a variety of contractual relationships with BIG. As the interests of the Company and BIG may differ, Messrs. Meehan, Robert M. Menke and Robert G. Menke may face certain conflicts of interest. The Company's relationship with BIG is governed by various agreements, including (i) an administration services agreement pursuant to which BIG provides benefits administration, cash management, and certain limited accounting and legal services to the Company, (ii) service agreements pursuant to which the Company provides policy and claims administration services for BIG, (iii) a technical support services agreement pursuant to which the Company provides certain systems development services to BIG and (iv) lease agreements pursuant to which BIG leases certain facilities to the Company. On April 13, 2001, the Company and BIG and entered into the Letter Agreement. Pursuant to the Letter Agreement: (a) the administration agreement was terminated effective April 1, 2001 and will be replaced, effective June 1, 2001, with a new corporate services agreement pursuant to which BIG will provide the Company with various marketing and training services at fixed hourly rates; (b) the services agreements will be amended effective June 1, 2001 to, among other things, extend the term of each agreement and modify certain of the service fees payable thereunder to reflect current competitive rates and the elimination of data and technical support services from the administration services to be provided by the Company thereunder; and (c) the technical support services agreement was terminated effective April 1, 2001 and will be replaced, effective June 1, 2001, with a new Technical Support Services Agreement pursuant to which BIG will provide certain technical support services to the Company. None of the foregoing agreements resulted from arm's-length negotiations. Nevertheless, the Audit Committee of the Board of Directors has approved the Letter Agreement, and the 13 16 Company believes that the transactions provided for therein are on terms no less favorable than those that could be obtained on an arm's-length basis from independent third parties. Rights of Former Geotrac Shareholder; Restricted Retained Earnings The Company has entered into a Corporate Governance Agreement with Geotrac and Daniel J. White setting forth certain terms and conditions pertaining to the operation of Geotrac following the acquisition of the remaining 51% interest in Geotrac in July, 1998. The Corporate Governance Agreement provides, in part, that for so long as Mr. White is a shareholder of the Company or Geotrac or has an option to purchase Geotrac stock, (i) the Company will vote all of its shares of Geotrac stock to fix and maintain the number of Geotrac directors at five, (ii) the Company will vote its shares of Geotrac stock to elect as directors of Geotrac two persons designated by Mr. White, (iii) Mr. White's termination as a Geotrac employee will require the vote of four out of five members of the Board of Directors, and (iv) certain actions by Geotrac will require the unanimous approval of the Geotrac Board of Directors. Among the actions requiring such unanimous board approval under the Corporate Governance Agreement is the making of cash distributions to the Company, whether by dividend or otherwise. Therefore, pursuant to the Corporate Governance Agreement, Mr. White may impede the Company's ability to access excess cash balances retained by its Geotrac subsidiary, even if all of the other directors of Geotrac were to approve the distribution thereof to the Company. To date, the Company has been able to access Geotrac's excess cash when necessary, primarily through the prepayment of outstanding intercompany indebtedness. No assurances can be given, however, that the Company will be able to obtain available cash from Geotrac. If the Company is unable to do so, it could have a material adverse effect on the Company's business, financial condition and results of operations. Other actions requiring the unanimous approval of the Geotrac Board of Directors include any merger or consolidation, the payment of management or similar fees to the Company, or its subsidiaries or affiliates, the sale or issuance of Geotrac stock, and the sale of Geotrac assets outside the ordinary course of business to anyone other than an affiliate of Geotrac. Mr. White also has a right of first refusal to purchase the assets of Geotrac in the event such assets are to be sold. Mr. White is presently a director and shareholder of the Company. Dependence on Senior Management The success of the Company is largely dependent upon the efforts, direction and guidance of its senior management, and in particular David K. Meehan, the Company's Chairman of the Board, David M. Howard, the Company's President and Chief Executive Officer, Robert G. Gantley, the Company's Senior Vice President and Chief Operating Officer, and Daniel J. White, Geotrac's President and Chief Executive Officer. The Company's continued growth and success depends in part on its ability to attract and retain qualified managers, and on the ability of its executive officers and key employees to manage its operations successfully. The loss of any of the Company's senior management or key personnel, or its inability to attract and retain key management personnel in the future, could have a material adverse effect on the Company's business, financial condition and results of operations. Limited Operating History in Third-Party Outsourcing Since its inception, the Company has provided outsourcing services to BIG, the largest underwriter of flood insurance policies through independent agents (and the second largest overall) in the United States. As BIG's outsourcing provider, the Company has become a significant provider of flood insurance outsourcing services; however, to date it has not derived significant revenue from unaffiliated third-party outsourcing customers. A key element of the Company's growth strategy has been to leverage its experience and expertise in servicing BIG's flood, homeowners and automobile business to market its outsourcing capabilities in various P&C lines, including flood, homeowners and automobile insurance, to other insurance companies and financial institutions. To date, the Company has not been successful in implementing this growth strategy. While the Company will continue to seek to implement this growth strategy, there can be no assurance that the Company will be successful in doing so, and the failure to do so could have a material adverse effect on the business, financial condition and results of operations of the Company. 14 17 Existence of Well-Positioned Competitors The Company competes principally in three markets -- the market for flood insurance outsourcing services, the market for other P&C insurance outsourcing services and the market for flood zone determinations and related services. The markets for these services are highly competitive. Management believes the market for flood insurance outsourcing services is dominated by several principal competitors. The Company competes for flood insurance outsourcing customers largely on the basis of price, customer service and responsiveness. The market for other P&C insurance outsourcing services is fragmented. In the policy administration services segment of this market, the Company competes for customers on the basis of customer service, performance and price. The claims administration services segment of the outsourcing market is also highly fragmented, with competition from a large number of claims administration companies of varying size as well as independent contractors. Competition in this segment of the outsourcing market is principally price driven. The Company believes, however, that its most significant competition for outsourcing services comes from policy and claims administration performed in-house by insurance companies. Insurers that fulfill some or all of their policy and claims administration needs in-house typically have made a significant investment in their information processing systems and may be less likely to utilize the Company's services. In addition, insurance company personnel may have a vested interest in maintaining these responsibilities in-house. Management believes the market for flood zone determination services is dominated by several principal competitors. The Company believes that the principal competitive factors in the market for flood zone determinations include quality and reliability of services, response time and price. Certain of the Company's competitors in each of these markets have longer operating histories and significantly greater financial, technical, marketing and other resources than the Company, including name recognition with current and potential customers. As a result, these competitors may devote more resources to the development, promotion and sale of their services or products than the Company and respond more quickly to emerging technologies and changes in customer requirements. In addition, current and potential competitors may establish cooperative relationships among themselves or with third parties to increase the ability of their services and products to address customer needs. Accordingly, new competitors or alliances among competitors may emerge and rapidly acquire significant market share. There can be no assurance that the Company will be able to compete successfully against current and future competitors, or that competitive pressure faced by the Company will not have a material adverse effect on its business, financial condition and results of operations. Potential Liability to Clients Many of the Company's contractual engagements involved projects that are critical to the operations of its clients' business and provide benefits that may be difficult to quantify. Any failure in a client's system could result in a claim for substantial damages against the Company, regardless of the Company's responsibility for such failure. Although the Company may attempt to limit contractually its liability for damages arising from negligent acts, errors, mistakes or omissions in rendering its services, there can be no assurance that the limitations of liability, if any, set forth in its service contracts will be enforceable in all instances or would otherwise protect the Company from liability for damages. Although the Company maintains general liability insurance coverage, including coverage for errors or omissions, there can be no assurance that such coverage will continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against the Company that exceed available insurance coverage, or changes in the Company's insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on the Company's business, financial condition and results of operations. Dependence on Trend Toward Outsourcing The Company's business and growth depend in large part on the insurance industry's trend toward outsourcing administration and information technology services. There can be no assurance that this trend will continue, as organizations may elect to perform such services in-house. A significant change in the direction of 15 18 this trend could have a material adverse effect on the Company's business, financial condition and results of operations. Volatility of Stock Price; Impact of Delisting The Company believes that various factors such as general economic conditions and changes or volatility in the financial markets, changing market conditions, and quarterly or annual variations in the Company's financial results, some of which are unrelated to the Company's performance, could cause the market price of the Common Stock to fluctuate substantially. Effective the close of business on February 21, 2001, the Company's Common Stock was delisted from trading on the Nasdaq National Market due to the Company's inability to remain in compliance with certain maintenance standards required for continued listing on the Nasdaq National Market. Since that time, the Common Stock has been eligible to trade on the OTC Bulletin Board. The Common Stock does not now, and may never, meet the requirements for re-listing on the Nasdaq National Market. The Company's inability to list its Common Stock on the Nasdaq National Market substantially reduces the liquidity of, and market for, the Common Stock. ITEM 2. PROPERTIES The following table sets forth certain information with respect to the principal facilities used in the Company's operations:
SQUARE LEASE LOCATION FEET FUNCTIONS EXPIRATION - -------- ------ --------- ---------- St. Petersburg, Florida(1)... 76,700 Corporate Headquarters December, 2001 and Outsourcing St. Petersburg, Florida(1)... 4,500 Outsourcing December, 2001 St. Petersburg, Florida...... 12,740 Outsourcing November, 2005(2) St. Petersburg, Florida...... 35,500 Outsourcing February, 2005(2) Dunedin, Florida............. 5,200 Outsourcing February, 2004 Norwalk, Ohio................ 12,400 Flood Zone Determination August, 2004(2) Norwalk, Ohio................ 21,000 Flood Zone Determination November, 2002(2)
- --------------- (1) Each of these facilities is leased from BIG. (2) The Company has the option to renew each of these leases for an additional five-year period. The Company believes that its existing facilities and additional or alternate space available to it are adequate to meet its requirements for the foreseeable future. ITEM 3. LEGAL PROCEEDINGS On September 28, 2000, October 25, 2000 and October 30, 2000, three alleged shareholders of the Company filed three nearly identical lawsuits in the United States District Court for the Middle District of Florida, each on behalf of a putative class of all persons who purchased shares of the Company's Common Stock pursuant and/or traceable to the registration statement for the Company's February 1999 initial public offering (the "IPO"). The lawsuits were consolidated on December 1, 2000, and the consolidated action is proceeding under Case No. 8:00-CV-2013-T-26MAP. The plaintiffs' Consolidated Amended Class Action Complaint, filed February 7, 2001, names as defendants the following parties: the Company; Geotrac; BIG; Venture Capital Corporation, a selling shareholder in the IPO; the five inside directors of the Company at the time of the IPO; and Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc., the underwriters for the IPO. (On April 5, 2001, the Plaintiffs' filed a Notice of Scrivener's Error notifying all parties to the litigation that Geotrac was inadvertently named as a defendant in the complaint). The complaint alleges, among other things, that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, by making certain false and misleading statements in the roadshow presentations, registration statement and prospectus relating to the IPO. More specifically, the complaint alleges that, in connection with 16 19 the IPO, the defendants made various material misrepresentations and/or omissions relating to: (i) the Company's ability to integrate Geotrac's flood zone determination business with the Company's own flood zone determination business and with its insurance outsourcing services business; (ii) actual and anticipated synergies between the Company's flood zone determination and outsourcing services business lines; and (iii) the Company's use of the IPO proceeds. The complaint seeks unspecified damages, including interest, and equitable relief, including a rescission remedy. On March 26, 2001, the Company, BIG and the five inside director defendants filed a motion to dismiss the plaintiffs' Consolidated Amended Class Action Complaint for, among other things, failure to allege material misstatements and/or omissions in the roadshow presentations, registration statement and/or prospectus relating to the IPO. Management of the Company believes the material allegations of the complaint are without merit and intends to vigorously defend the lawsuit. No assurances can be given, however, with respect to the outcome of the litigation, and an adverse result could have a material adverse effect on the Company's business, financial condition and results of operations. Bankers Insurance Company ("BIC"), a subsidiary of BIG, and Bankers Life Insurance Company ("BLIC") and Bankers Security Insurance Company ("BSIC"), subsidiaries of BIC, have been subject to an investigation by the Florida Department of Insurance (the "DOI"), the principal regulator of insurance activities in the State of Florida, stemming from their use of a private investigator to gather information on a DOI employee and the private investigator's unauthorized use of illegal wiretaps in connection therewith. On March 23, 2000, the Treasurer and Insurance Commissioner of the State of Florida, as head of the DOI, filed an administrative complaint against BIC, BLIC and BSIC based upon the results of such investigation. The administrative complaint charges BIC, BLIC and BSIC with violating various provisions of the Florida Insurance Code including, among other things, a provision requiring insurance companies to have management, officers or directors that are, among other things, trustworthy. The complaint further notifies BIC, BLIC and BSIC that the Insurance Commissioner intends to impose such penalties or take such other administrative actions as may be proper or appropriate under applicable law, including possibly entering an order suspending or revoking the certificates of authority of BIC, BLIC and BSIC to conduct business as insurance companies in the State of Florida. On February 19, 2001, the DOI filed a Motion for Leave to File Amended Complaint. On March 29, 2001, the court issued an order granting the DOI's motion. BIC, BLIC and BSIC have informed the Company that they intend to vigorously defend against such action, but no assurances can be given as to the outcome thereof. In the event the DOI were to enter an order suspending or revoking the certificates of authority of BIC, BLIC and BSIC to conduct business as insurance companies in the State of Florida, or impose other significant penalties on any of them, it would materially adversely affect the business and/or operations of BIG and, in turn, could result in the loss of or material decrease in the Company's business from BIG, which would have a material adverse effect on the Company's business, financial condition and results of operations. On November 19, 1999, the United States, on behalf of the Federal Emergency Management Agency ("FEMA"), filed a civil action against BIC in the United States District Court for the District of Maryland stemming from FEMA's investigation of certain cash management and claims processing practices of BIC in connection with its participation in the National Flood Insurance Program ("NFIP"). The complaint alleges, among other things, that BIC knowingly failed to report and pay interest income it had earned on NFIP funds to the United States in violation of the False Claims Act. The complaint further alleges various common law theories, including fraud, breach of contract, unjust enrichment and negligent misrepresentation. The complaint seeks civil penalties of $1.08 million and actual damages of approximately $1.1 million as well as treble, punitive and consequential damages, costs and interest. The suit is currently stayed pending arbitration following a decision by the United States Court of Appeals for the Fourth Circuit in favor of BIC on its motion to stay the litigation pending arbitration. BIC has informed the Company that BIC is not aware of the government's intentions for further appeal of the order regarding arbitration. BIC has further informed the Company that it intends to vigorously defend against the action, but no assurances can be given as to the outcome thereof. However, BIG has advised the Company that an adverse judgment in this action should not have a material adverse affect on the business and/or operations of BIC, although no assurances can be given in this regard. 17 20 FEMA's investigation of certain claims processing practices of BIC in connection with its participation in the NFIP is continuing, and BIC has produced documentation in connection therewith. If the parties are either unable to reach agreement in these matters or resolve their disagreement in arbitration, the United States could amend its complaint against BIC to add additional claims under the False Claims Act and/or various common law and equitable theories relating to such matters. In the event such continuing investigation or any consequence thereof materially adversely affects the business or operations of BIC, it could result in the loss of or material decrease in the Company's business from BIC, which would have a material adverse effect on the Company's business, financial condition and results of operations. The Company is involved in various other legal proceedings arising in the ordinary course of business. Management believes that the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial position, results of operations, or liquidity, although no assurances can be given in this regard. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of 2000. 18 21 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS In February, 1999, the Company completed an initial public offering of its Common Stock at an initial price of $11.00 per share. Until February 21, 2001, the Company's Common Stock was traded on the Nasdaq National Market under the symbol "INMG". The following table sets forth the high and low closing sales prices per share as reported by the Nasdaq National Stock Market for the Common Stock for the periods indicated.
HIGH LOW ---- --- YEAR ENDED DECEMBER 31, 1999 First quarter ended March 31, 1999........................ $11.88 $8.25 Second quarter ended June 30, 1999........................ 11.19 8.00 Third quarter ended September 30, 1999.................... 9.75 2.88 Fourth quarter ended December 31, 1999.................... 3.56 1.88 YEAR ENDED DECEMBER 31, 2000 First quarter ended March 31, 2000........................ 3.75 2.00 Second quarter ended June 30, 2000........................ 2.75 1.13 Third quarter ended September 30, 2000.................... 1.94 1.16 Fourth quarter ended December 31, 2000.................... 1.28 0.41
Effective the close of business on February 21, 2001, the Company's Common Stock was delisted from trading on the Nasdaq National Market due to the Company's inability to remain in compliance with certain maintenance standards required for continued listing on the Nasdaq National Market. Since that time, the Common Stock has been eligible to trade on the OTC Bulletin Board. The OTC Bulletin Board is operated by the National Association of Securities Dealers, Inc. as a forum for electronic trading and quotation. On March 30, 2001, the closing bid price for a share of Common Stock as reported by the OTC Bulletin Board was $0.375. The over-the-counter market quotations reflect inter-dealer prices, without retail markup, markdown or commission and may not necessarily represent actual transactions. As of March 30, 2001, there were 22 record holders of the Common Stock. In conjunction with the Company's acquisition of Geotrac, it entered into a Corporate Governance Agreement, dated July 31, 1998, with Geotrac and Daniel J. White ("Mr. White"), the corporation's president and then majority shareholder, setting forth certain terms and conditions pertaining to the operation of Geotrac. The Corporate Governance Agreement provides, among other things, that for so long as Mr. White owns stock in the Company or Geotrac, or has an option to purchase stock in Geotrac, certain actions by Geotrac will require the unanimous approval of the Geotrac Board of Directors, including any merger or consolidation, the payment of management or similar fees to the Company or its subsidiaries and affiliates, the sale or issuance of Geotrac stock, and the sale of Geotrac assets outside the ordinary course of business to anyone other than an affiliate of Geotrac. Among the actions requiring such unanimous board approval under the Corporate Governance Agreement is the making of cash distributions to the Company, whether by dividend or otherwise. Therefore, pursuant to the Corporate Governance Agreement, Mr. White may impede the Company's ability to access excess cash balances retained by its Geotrac subsidiary, which could impact the Company's ability to declare and pay dividends in the foreseeable future. The Company did not pay any dividends in either 1999 or 2000. The Company currently anticipates that any future earnings will be retained for development and expansion of the Company's business and does not anticipate declaring or paying any cash dividends in the foreseeable future. 19 22 ITEM 6. SELECTED FINANCIAL DATA The following selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company." The following selected consolidated financial data of the Company as of and for the years ended December 31, 1996, 1997, 1998, 1999, and 2000 has been derived from the Company's audited consolidated financial statements. The results of operations presented below are not necessarily indicative of the results of operations that may be achieved in the future.
YEAR ENDED DECEMBER 31, ----------------------------------------------- 1996 1997 1998 1999 2000 ------- ------- ------- ------- ------- (IN THOUSANDS, EXCEPT PER SHARE DATA) STATEMENT OF OPERATIONS DATA: Revenues Outsourcing services........................... $ 5,125 $29,714 $38,058 $52,168 $45,917 Flood zone determination services.............. 7,705 8,792 25,734 19,161 17,067 ------- ------- ------- ------- ------- Total revenues......................... 12,830 38,506 63,792 71,329 62,984 ------- ------- ------- ------- ------- Expenses Cost of outsourcing services................... 3,896 21,989 26,875 37,428 36,766 Cost of flood zone determination services...... 5,362 4,764 11,131 8,102 7,664 Selling, general and administrative............ 1,121 3,026 8,381 11,857 11,205 Management services from Parent................ 1,054 2,344 3,260 2,256 1,885 Deferred compensation (non-recurring item)..... -- -- 728 -- -- Depreciation and amortization.................. 309 684 4,311 5,498 5,342 ------- ------- ------- ------- ------- Total expenses......................... 11,742 32,807 54,686 65,141 62,862 ------- ------- ------- ------- ------- Operating income (loss).......................... 1,088 5,699 9,106 6,188 122 Equity in earnings of Geotrac, Inc. (1).......... -- 201 -- -- -- Minority interest (1)............................ -- -- (473) -- -- Interest income.................................. -- -- 456 350 288 Interest expense (2)............................. (75) (378) (2,194) (809) (70) ------- ------- ------- ------- ------- Income before income taxes....................... 1,013 5,522 6,895 5,729 340 Provision for income taxes....................... 396 2,112 3,042 2,534 849 ------- ------- ------- ------- ------- Net income (loss)................................ $ 617 $ 3,410 $ 3,853 $ 3,195 $ (509) ======= ======= ======= ======= ======= Net income (loss) per common share............... $ .06 $ .34 $ .38 $ .26 $ (.04) ======= ======= ======= ======= ======= Weighted average common shares outstanding (3)... 10,000 10,000 10,264 12,448 12,794 ======= ======= ======= ======= ======= Dividends declared on common stock(4)............ $ 1,000 $ 3,500 $ 1,100 $ -- $ -- ======= ======= ======= ======= =======
DECEMBER 31, ----------------------------------------------- 1996 1997 1998 1999 2000 ------- ------- ------- ------- ------- (IN THOUSANDS) BALANCE SHEET DATA: Working capital (deficiency)..................... $ (425) $ (148) $(4,295) $ 7,117 $ 6,319 Total assets........................... 3,441 19,532 39,902 39,491 40,765 Long-term debt, less current portion............. 894 2,187 7,471 220 -- Notes payable-affiliates, less current portion... -- -- 5,528 -- -- Preferred stock of subsidiary.................... -- 6,750 -- -- -- Total shareholders' equity............. 260 170 8,689 32,885 33,113
- --------------- (1) In 1997, the Company's investment in Geotrac was accounted for using the equity method of accounting, since the Company owned less than 50% and had a significant but not controlling influence. In July, 1998, the Company acquired the remaining 51% of Geotrac. As a result, the operations of Geotrac for the year ended December 31, 1998 are consolidated with that of the Company, with the portion of Geotrac's net 20 23 income allocable to the 51% interest held by the majority stockholders prior to June 30, 1998 reflected as a minority interest. (2) Dividends declared on Preferred Stock for the years ended December 31, 1997 and 1998 were $229,315 and $189,370, respectively, and are included in interest expense. (3) In February, 1999, the Company completed an initial public offering ("IPO") of 3,350,000 shares of Common Stock at a price of $11 per share. Of the 3,350,000 shares sold in the IPO, 1,350,000 were sold by Venture Capital Corporation, a Cayman Islands company, and the remaining 2,000,000 shares were sold by the Company. The offering generated net proceeds to the Company of $19,164,000, after deducting offering expenses of approximately $1,296,000 paid by the Company. (4) In December, 1996, December, 1997, and June, 1998, the Company paid dividends of $1.0 million, $3.5 million, and $1.1 million, respectively, to BIG. The Company currently anticipates that all of its earnings will be retained for development and expansion of the Company's business and does not anticipate declaring or paying any cash dividends in the foreseeable future. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the Company's Consolidated Financial Statements and the Notes thereto. OVERVIEW Insurance Management Solutions Group, Inc. (together with its subsidiaries, the "Company") is a holding company that was incorporated in the State of Florida in December, 1996 by Bankers Insurance Group, Inc. (together with its subsidiaries, "BIG"), which contributed to the Company two of its wholly-owned operating subsidiaries, Insurance Management Solutions, Inc. ("IMS") and Bankers Hazard Determination Services, Inc. ("BHDS"), that were previously formed in August, 1991 and June, 1988, respectively. In July, 1997, the Company acquired a 49% interest in Geotrac, Inc. and, in July, 1998, acquired the remaining 51% interest. Geotrac was subsequently merged into BHDS with the surviving company being known as Geotrac of America, Inc. In January, 1999, the Company acquired Colonial Claims. BIG is a diversified group of P&C insurance companies with premium writings in all fifty states. BIG's principal lines of business include flood, homeowners and automobile insurance lines. From 1996 to 2000, BIG experienced substantial growth in total written premiums from $235 million to $323 million. Prior to 1997, the Company's outsourcing services principally related to information technology services provided to BIG on a cost reimbursement basis. In 1997, the Company entered into service arrangements with BIG to provide a broader menu of outsourcing services. These services primarily consisted of policy and claims administration (including policy issuance, billing and collection functions, claims adjusting and processing) and information technology services provided for BIG's flood and homeowners insurance lines of business. Revenues for these services were derived based on a percentage of direct written premiums for policy administration services and direct paid claims for claims administration services. The Company also provided claims administration services for BIG's other insurance lines, excluding flood and homeowners, on a cost reimbursement basis in 1997. Effective January 1, 1998, the Company entered into written service agreements with BIG which modified the existing arrangements to (i) expand the services provided by the Company to include policy administration for certain automobile lines of business, (ii) recognize claims outsourcing revenue based not on a cost reimbursement basis, but rather on a percentage of earned premiums and, with respect to certain types of claims, a percentage of incurred losses, and (iii) implement a change in fee structure from a percentage of incurred loss to a percentage of earned premiums with respect to homeowners claims services. These changes were negotiated in order to effect more uniform revenue recognition. To obtain BIG's agreement to such changes, the Company, in turn, agreed to the revised fee structure with respect to homeowners claims services. BIG presently accounts for approximately 83% of the Company's outsourcing services revenues and is expected to continue to account for a significant majority of the Company's outsourcing revenues in the foreseeable future. 21 24 On April 13, 2001 the Company entered into the Letter Agreement with BIG. Pursuant to the Letter Agreement, the parties agreed to extend the term of each of the service agreements until December 1, 2002. To obtain BIG's agreement to such extensions, the Company, in turn, agreed to certain service fee modifications. Under the service agreements, as amended, BIG will pay the Company (1) a monthly fee based upon direct written premiums for policy administration services relating to its flood, homeowners and commercial lines of business and (2) a monthly fee based upon net claims (after deductibles) for claims administration services relating to its flood line of business. The service fees payable under the service agreements with respect to (a) policy administration services relating to the automobile line of business, and (b) claim administration services relating to all lines of business other than flood, shall remain unchanged. If such amendments to the service agreements had been in effect for the fiscal year ended December 31, 2000, the Company's affiliated outsourcing revenues, which totalled approximately $38 million on an actual basis, would have been approximately $30 million on a pro forma basis. The Company believes that any anticipated reduction in affiliated outsourcing revenues resulting from the implementation of such service fee changes will be largely offset by a corresponding reduction in operating costs as a result of, among other things, the elimination of data and technical support services from the administration services to be provided by the Company to BIG under the service agreements, although no assurances can be given in this regard. Outsourcing service revenues are principally derived from written and earned insurance premiums. Such premiums are affected by seasonal fluctuations in volume of new and renewal policies received. Outsourcing service revenues generated from the flood and homeowners lines of business increase in the late second quarter and peak during the third quarter in conjunction with home sales. In the Company's experience, increased levels of flood insurance purchases occur in the Southeastern United States during the second and third quarters in anticipation of the onset of the hurricane season. Federal residential flood insurance rates are set by FEMA and are the same for all flood insurance carriers. Consequently, policyholder retention is typically dependent upon the quality of customer service being offered. Higher retention or renewal rates provide more consistent recurring revenues. Flood insurance carriers often utilize independent agents to sell their product. Competing flood insurance carriers offering more attractive commissions to such agents pose a significant risk for declines in business. During periods of peak demand for flood and homeowners insurance, the number of policies waiting to be issued increases. This backlog represents future service fee income to be earned, generally within one month. Flood zone determination revenues, which are recognized as services are performed, are cyclically impacted by both changes in mortgage interest rates and trends in home sales. The cost of outsourcing services primarily includes wages and related benefits associated with personnel who perform policy and claims administration services, as well as postage and telephone charges, data processing and other direct costs associated with providing service to customers. Cost of flood zone determination services primarily includes wages and related benefits associated with personnel who perform flood zone determination services, telephone expenses, general liability insurance, data processing and other direct costs associated with providing service to customers. Due to the ongoing automation of the Company's flood zone database, a gradual increase in the number of automated flood zone determinations, versus manually determined flood zones, has occurred. Automated flood zone determinations cost less for the Company to perform than manually generated determinations. Selling, general and administrative expenses include the wages and related benefits of sales and marketing, executive, finance and accounting personnel, as well as other general operating costs. In addition, wages and related benefits of the management staff of each processing department (i.e. Customer Service, Claims, and Information Services) are included in selling, general and administrative expenses. Management services from Parent were previously charged to the Company under an administration agreement with BIG for common costs that were incurred by BIG. These common costs included human resources, legal, corporate planning and communications, cash management, certain executive management and rent. On April 13, 2001, the Company and BIG entered into the Letter Agreement. Pursuant to the Letter Agreement, the administration agreement was terminated effective April 1, 2001 and will be replaced, 22 25 effective June 1, 2001, with a new corporate services agreement pursuant to which BIG will provide the Company with various marketing and training services at fixed hourly rates. In 1997, the Company's investment in Geotrac was accounted for using the equity method of accounting, since the Company owned less than 50% and had a significant but not controlling influence. In July, 1998, the Company acquired the remaining 51% of Geotrac. As a result, the operations of Geotrac for the year ended December 31, 1998 are consolidated with that of the Company, with the portion of Geotrac's net income allocable to the 51% interest held by the majority stockholder prior to June 30, 1998 reflected as a minority interest. During the year ended December 31, 2000, the Company's outsourcing services business segment incurred an operating loss of approximately $3.2 million. This operating loss was partially due to a decrease in revenue from the administration of property damage claims resulting from flood and wind claims, as well as an increase in personnel and contractor costs incurred to bring on new unaffiliated contracts, which contracts were subsequently terminated. In an effort to improve the operating results of its outsourcing services business segment, the Company completed a workforce reduction of approximately 10%, or 53 employees on February 13, 2001. In addition, on April 13, 2001, the Company entered into a Letter Agreement with BIG, BIC, BSIC and FCIC providing for various changes to the Company's existing contractual arrangements with such affiliated entities. See "Item 13. Certain Relationships and Related Transactions." RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain selected operating results of the Company as a percentage of total revenues:
YEAR ENDED DECEMBER 31, ------------------------ 1998 1999 2000 ------ ------ ------ REVENUES: Outsourcing services...................................... 59.7% 73.1% 72.9% Flood zone determination services......................... 40.3 26.9 27.1 ----- ----- ----- Total revenues.................................... 100.0 100.0 100.0 ----- ----- ----- EXPENSES: Cost of outsourcing services.............................. 42.2 52.5 58.4 Cost of flood zone determination services................. 17.4 11.3 12.2 Selling, general and administrative....................... 13.1 16.6 17.8 Management services from Parent........................... 5.1 3.2 3.0 Deferred compensation (non-recurring item)................ 1.1 -- -- Depreciation and amortization............................. 6.8 7.7 8.4 ----- ----- ----- Total expenses.................................... 85.7 91.3 99.8 ----- ----- ----- Operating income............................................ 14.3 8.7 0.2 Minority interest........................................... (0.7) -- -- Interest income............................................. 0.7 0.5 0.4 Interest expense............................................ (3.5) (1.1) (0.1) ----- ----- ----- Income before income taxes.................................. 10.8 8.1 0.5 Provision for income taxes.................................. 4.8 3.6 1.3 ----- ----- ----- Net income (loss)...................................... 6.0% 4.5% (0.8%) ===== ===== =====
COMPARISON OF THE YEARS ENDED DECEMBER 31, 2000 AND 1999 Outsourcing Services Revenues. Outsourcing services revenues decreased 12.0% to $45.9 million in 2000 from $52.2 million in 1999. The decrease was attributable in part to the fact that revenue generated under an affiliated technical support services arrangement decreased to $0 in 2000 from $1.3 million in 1999. The decrease in outsourcing services revenues also was attributable to the expiration as of December 31, 1999 of 23 26 certain minimum service fee arrangements established effective April 1, 1999 with affiliated insurers to compensate the Company for maintaining an infrastructure to process certain lines of business of affiliated insurers that had not grown as rapidly as originally anticipated. If such minimum service fee requirements with respect to said lines of business had not been implemented as of April 1, 1999, aggregate affiliated outsourcing services revenues, which totaled $41.5 million in 1999, would have been $39.7 million in accordance with the terms of the affiliated service agreements as in effect prior to April 1, 1999. The decrease in outsourcing services revenues was also due to a decrease in the volume of flood and wind damage claims administered by the Company's outsourcing operations during the year ended December 31, 2000 as compared to the year ended December 31, 1999. During 2000, the Company recognized revenues of approximately $4.6 million primarily from the administration of property damage claims resulting from a tropical depression that caused extensive flooding, which storm occurred during the fourth quarter of 2000. In comparison, the Company recognized revenues totaling approximately $9.6 million during 1999 from the administration of property damage claims resulting from Hurricane Georges, which storm occurred in September 1998, and from Hurricanes Floyd and Irene, which storms occurred during the fourth quarter of 1999. Additionally, a decline in the volume of automobile premium processed on behalf of the Company's affiliated customers contributed to the decrease in outsourcing services revenues during 2000. These decreases in outsourcing services revenues were partially offset by (i) an increase in outsourcing services revenues generated under an automobile claims processing agreement, entered into April, 2000, with an unaffiliated customer, (ii) an increase in flood premium processed on behalf of the Company's unaffiliated customers, and (iii) an increase in flood, homeowners and commercial premium processed on behalf of the Company's affiliated customers. Flood Zone Determination Services Revenues. Flood zone determination services revenues decreased 10.9% to $17.1 million in 2000 from $19.2 million in 1999. This decrease was primarily attributable to the termination of the Company's "life-of-loan" insurance policy, effective April 1, 1999, under which, prior to the termination of the policy, the Company was compensated for performing flood zone re-determinations for certain existing customers. Prior to the termination of the life-of-loan policy, the Company paid an insurance premium for every flood zone determination issued which required life-of-loan tracking. In exchange for the premium, the Company received a fixed amount for every flood zone determination that had to be reissued as a result of a change in the underlying flood zone classification of a property. Additionally, a decrease in the average selling price per flood zone determination, resulting from (i) increased pricing pressures and (ii) an increase in the number of automated flood zone determinations processed by the Company on behalf of other flood zone vendors at reduced rates, contributed to the decrease in flood zone determination services revenues during 2000. These decreases in flood zone determination services revenues were partially offset by an increase in number of flood zone determinations processed during 2000 as compared to 1999. Cost of Outsourcing Services. Cost of outsourcing services decreased 1.8% to $36.8 million in 2000 from $37.4 million in 1999. As a percentage of outsourcing services revenues, however, cost of outsourcing services increased to 80.1% in 2000 from 71.7% for the corresponding period in 1999 primarily as a result of the decrease in the dollar amount of outsourcing services revenues in 2000 as compared to 1999. The decrease in the dollar amount of cost of outsourcing services was primarily attributable to a decrease in revenue from the Company's claims catastrophe subsidiary, which pays approximately 70% of each dollar of revenue received to the independent adjusters who adjust the claims on such subsidiary's behalf. The decrease in the dollar amount of expenses from the Company's claims catastrophe subsidiary was partially offset by (i) increases in the Company's personnel costs due to staff additions and the use of contract programmers to develop and staff new unaffiliated programs and (ii) an increase in facilities costs due to the occupancy of the Company's new operating and call center facility. Cost of Flood Zone Determination Services. Cost of flood zone determination services decreased 5.4% to $7.7 million in 2000 from $8.1 million in 1999. As a percentage of flood zone determination services revenues, cost of flood zone determination services increased to 44.9% in 2000 from 42.3% in 1999. The increase resulted primarily from the decrease in the dollar amount of flood zone determination services revenues during 2000 as compared to 1999, partially offset by (i) various production workflow changes made during 1999 that enabled the Company to increase employee productivity and reduce operating expenses, 24 27 primarily personnel related costs, and (ii) increased utilization of a flood zone determination vendor, located in India, which has been able to perform manual flood zone determinations at costs significantly below U.S. market rates. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased 5.5% to $11.2 million in 2000 from $11.9 million in 1999. The decrease in selling, general and administrative expenses was primarily attributable to the impact of various severance arrangements recorded during 1999, partially offset by (i) the continued assumption of certain administrative services, including human resource, agency accounting, cash management and legal services, that were previously provided to the Company under the management service agreement with BIG, and (ii) the recognition of $338,000 in additional compensation expense (of which approximately $102,000 relates to 1999) resulting from the vesting of benefits payable to certain current and former officers and directors of the Company under the Amended and Completely Restated Phantom Stock Plan (the "BFC Plan") of Bankers Financial Corporation ("BFC"), the parent corporation of BIG, and the Amended and Restated Phantom Stock Plan (the "VCC Plan") of Venture Capital Corporation ("VCC"). The foregoing compensation charge is a non-recurring, non-cash item to the Company, as all such benefits under such plans were fully vested as of September 30, 2000 and constitute the respective obligations of BFC and VCC, not the Company. In addition, the offset to such compensation expense is an increase to additional paid-in capital, since the ultimate cash obligations under these plans are that of BFC and VCC, respectively, and not of the Company. Management Services from Parent. Management services from Parent decreased 16.4% to $1.9 million in 2000 from $2.3 million in 1999. This decrease was primarily related to the continued assumption by the Company of certain administrative services, including human resources, agency accounting, cash management and legal services, that were previously provided to the Company under the management service agreement with BIG. Such decrease was partially offset by both an increase in rent expense from BIG as a result of an annual rent escalation and an increase in the square footage being leased. Interest Expense. Interest expense decreased 91.3% to $70,000 in 2000 from $809,000 in 1999. This decrease was primarily related to the early repayment of most of the Company's debt obligations during 1999 from the net proceeds received by the Company from its initial public offering in February, 1999. Provision (Benefit) for Income Taxes. The Company's effective income tax rates were 249.8% and 44.2% in 2000 and 1999, respectively. The increase in the effective tax rate during 2000 reflects lower pretax income as well as various non-deductible items, including goodwill recognized in connection with the acquisitions of Geotrac in July, 1998 and Colonial Claims in January, 1999. COMPARISON OF THE YEARS ENDED DECEMBER 31, 1999 AND 1998 Outsourcing Services Revenues. Outsourcing services revenues increased 37.1% to $52.2 million in 1999 from $38.1 million in 1998. The increase was primarily attributable to (i) incremental revenues from Colonial Claims, which was acquired in January, 1999, (ii) revenue generated under an affiliated technical support services arrangement for both personal and commercial lines of insurance entered into on April 1, 1999, (iii) claims fee income recognized during 1999 associated with the settlement of flood and wind damage claims resulting from Hurricane Georges in late September, 1998, and from Hurricanes Floyd and Irene during 1999 and, (iv) incremental revenues from the Company's direct marketing subsidiary, which was formed in August, 1998. Effective April 1, 1999, the Company amended its existing service agreements with affiliated insurers to provide for minimum aggregate quarterly service fee payments through December 31, 1999 with respect to certain lines of business. If such minimum service fee requirements with respect to said lines of business under the agreements had not been implemented as of April 1, 1999, aggregate affiliated outsourcing services revenues, which totaled $41.5 million in 1999, would have been $39.7 million in accordance with the terms of the affiliated service agreements as in effect prior to April 1, 1999. For the year ended December 31, 1999, the Company will not recognize approximately $500,000 of additional affiliated service fees under the minimum service fee agreement as the Company did not meet certain specified milestones on a timely basis. Such minimums were established to compensate the Company for maintaining 25 28 an infrastructure to process certain lines of business of affiliated insurers that have not grown as rapidly as originally forecasted. Flood Zone Determination Services Revenues. Flood zone determination services revenues decreased 25.5% to $19.2 million in 1999 from $25.7 in 1998. The decrease in flood zone determination services revenues was primarily attributable to increases in interest rates from the corresponding period of the prior year and a resulting decline in loan originations and mortgage refinancings, which fuel the demand for flood zone determinations. Additionally, during 1999, the Company experienced a reduction in flood zone determination revenue from several large customers that are experiencing financial difficulties. The decrease in flood zone determination services revenues in 1999 was partially offset by a novation of the Company's life-of-loan insurance policy in which an estimate of the present value of future losses to be claimed under the policy (approximately $500,000) was paid to the Company in exchange for a release of liability for such future losses under the policy. Cost of Outsourcing Services. Cost of outsourcing services increased 39.3% to $37.4 million in 1999 from $26.9 million in 1998. The increase in cost of outsourcing services was primarily attributable to (i) incremental expenses incurred by the recently acquired Colonial Claims, (ii) increases in information technology costs due to staff additions and use of contract programmers to develop new unaffiliated programs, and (iii) incremental direct costs (primarily personnel) incurred to service the growth of both affiliated and unaffiliated flood premium. These increases were partially offset by a decrease in the lease cost of fixed assets that were purchased by the Company from BIG on April 1, 1998. Prior to April 1, 1998, the depreciation for such equipment, which totaled $282,015 during the three months ended March 31, 1998, was charged to the Company under an arrangement similar to an operating lease and is included in cost of outsourcing services. Such costs are now included in depreciation and amortization. Cost of Flood Zone Determination Services. Cost of flood zone determination services decreased 27.2% to $8.1 million in 1999 from $11.1 million in 1998. The decrease in cost of flood zone determination services was primarily due to (i) a decrease in flood zone determination services revenue from the corresponding period in 1998, (ii) the merger of BHDS and Geotrac in July, 1998 and a subsequent elimination of certain duplicated functions and facilities, and (iii) a redesign of certain production workflows in April, 1999 that enabled the Company to increase employee productivity and reduce expenses. Selling General and Administrative Expense. Selling, general and administrative expenses increased 41.5% to $11.9 million in 1999 from $8.4 million in 1998. The increase in selling, general and administrative expenses was primarily attributable to (i) additional wages and related benefits associated with adding executive management, accounting, sales and marketing and other administrative staff to support the Company's expanded operations, (ii) incremental expenses incurred by a direct marketing subsidiary, which was formed in August, 1998, (iii) incremental expenses incurred by Colonial Claims, which was acquired in January, 1999, (iv) and severance costs relating to the resignations of certain officers. Management Services from Parent. Management services from Parent decreased 30.8% to $2.3 million in 1999 from $3.3 million in 1998. The decrease was primarily related to an employment practices judgment that was settled during the third quarter of 1998 on behalf of the Company and its affiliates. Also contributing to the decrease in management services from Parent was an amendment to the management service agreement, which became effective January 1, 1999, pursuant to which certain accounting and internal audit functions are no longer performed by the Parent (such functions are currently performed by the Company directly). Depreciation and Amortization Expense. Depreciation and amortization expense increased 27.5% to $5.5 million in 1999 from $4.3 million in 1998. The increase was primarily related to (i) additional goodwill amortization recognized during 1999 as a result of the purchase of the remaining 51% of Geotrac, Inc. in July, 1998, (ii) goodwill amortization resulting from the purchase of Colonial Claims in January, 1999, (iii) amortization of software costs capitalized in accordance with SOP 98-1, which the Company began amortizing in January, 1999 and (iv) depreciation related to assets, consisting of telephone equipment and computer hardware and software, that were purchased by the Company from BIG in April, 1998 for use in its business. Prior to April 1, 1998, the depreciation for such equipment, which totaled $282,015 during the three 26 29 months ended March 31, 1998, was charged to the Company under an arrangement similar to an operating lease and was included in cost of outsourcing services. Minority Interest. During July, 1998, the Company purchased the remaining 51% of Geotrac. However, the Company has elected to reflect the operations of Geotrac prior to the July, 1998 acquisition on a consolidated basis with the Company, with the net income of Geotrac allocable to the 51% interest held by the prior majority stockholders reflected as minority interest. Interest Expense. Interest expense decreased 63.1% to $809,000 in 1999 from $2.2 million in 1998. The decrease was primarily related to the early repayment of most of the Company's debt obligations from net proceeds received by the Company from its initial public offering in February, 1999, partially offset by the write-off of deferred financing costs during 1999 as a result of the early repayment of a term loan. Provision for Income Taxes. The Company's effective income tax rates were 44.2% and 44.1% in 1999 and 1998, respectively. The effective tax rates reflect non-deductible goodwill recognized in connection with the acquisition of Geotrac in July, 1998 and Colonial Claims in January, 1999. Income before provision for income taxes in 1998, excluding minority interest which is presented net of tax in the accompanying consolidated financial statements, resulted in an effective income tax rate of 41.3% in 1998. LIQUIDITY AND CAPITAL RESOURCES During 2000, the Company's principal sources of liquidity consisted of cash on-hand, cash flows from operations, and available borrowings under the Company's revolving credit facility, which credit facility was terminated in December, 2000, as described below. Prior to 2000, the Company funded its operations through cash generated from operations, receipt of service fees advanced from BIG and available borrowings under the Company's line of credit. Bank borrowings were used to finance fixed asset purchases. In February, 1999, the Company completed an initial public offering ("IPO") of 3,350,000 shares of Common Stock at a price of $11 per share. Of the 3,350,000 shares sold, 1,350,000 were sold by Venture Capital Corporation (the "Selling Shareholder"), a Cayman Islands company. The offering generated net proceeds to the Company of approximately $19.2 million after deducting offering expenses paid by the Company of approximately $1.3 million. The Company used a portion of the net proceeds from the offering, together with funds received from BIG from proceeds made available to BIG by a subsidiary of the Selling Shareholder, to repay all obligations with BIG and its affiliates. Additionally, the Company used a portion of the IPO proceeds to repay certain debt obligations. In June, 1999, the Company entered into a revolving line of credit agreement ("LOC)" with a financial institution (the "Bank") that provided for borrowings of up to two times the Company's rolling four quarter earnings before interest, taxes, depreciation and amortization ("EBITDA"), but in no event more than $12.0 million. In December, 2000, the Company received notification from the Bank that it would no longer honor any requests by the Company for advances under the LOC due to the fact that the Bank believed the Company had experienced a material adverse change in its financial condition. To date, the Company has been unable to secure a new LOC upon acceptable terms. Although management continues to seek such an arrangement, no assurances can be given that the Company will be able to secure a new LOC. In conjunction with the Company's acquisition of Geotrac, it entered into a Corporate Governance Agreement, dated July 31, 1998, with Geotrac and Daniel J. White ("Mr. White"), Geotrac's president and then majority shareholder, setting forth certain terms and conditions pertaining to the operation of Geotrac. The Corporate Governance Agreement provides, among other things, that for so long as Mr. White owns stock in the Company or Geotrac, or has an option to purchase stock in Geotrac, certain actions by Geotrac will require the unanimous approval of the Geotrac Board of Directors, including any merger or consolidation, the payment of management or similar fees to the Company or its subsidiaries and affiliates, the sale or issuance of Geotrac stock, and the sale of Geotrac assets outside the ordinary course of business to anyone other than an affiliate of Geotrac. In addition, unanimous board approval under the Corporate Governance Agreement is required in order to make cash distributions to the Company, whether by dividend or otherwise. Therefore, pursuant to the Corporate Governance Agreement, Mr. White may impede the Company's ability to access 27 30 excess cash balances retained by its Geotrac subsidiary, even if all of the other directors of Geotrac were to approve the distribution thereof to the Company. Mr. White is presently a director and shareholder of the Company. To date, the Company has been able to access Geotrac's excess cash when necessary, primarily through the prepayment of outstanding intercompany indebtedness. No assurances can be given, however, that the Company will be able to obtain available cash from Geotrac. If the Company is unable to do so, it could have a material adverse effect on the Company's business, financial condition and results of operations. On April 13, 2001, the Company entered into a Commitment Letter to advance service fee payments (the "Commitment Letter") with BIG pursuant to which BIG has agreed to advance to the Company up to $1.5 million per month as a prepayment of service fees due by BIG and its affiliates under the Service Agreements. Such advances are available to the Company beginning June 1, 2001 continuing through December 1, 2002 and shall be payable upon demand by the Company. Any funds advanced by BIG to the Company under the Commitment Letter shall constitute a prepayment of, and shall be credited toward, the service fees charged to BIG by the Company during the month following such advance. The Company believes that cash on-hand, cash flows from operations and cash advances from BIG, as described above, will be sufficient to satisfy currently anticipated working capital and capital expenditure requirements for the next twelve months. Unanticipated rapid expansion, business or systems development, or potential acquisitions may cause the Company to require additional funds. The Company identifies and assesses, in the normal course of business, potential acquisitions of technologies which it believes to strategically fit its business plan. The Company may enter into such transactions should opportunities present themselves in the future. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has not entered into any transactions using derivative financial instruments or derivative commodity instruments and believes that its exposure to market risk associated with other financial instruments (such as variable rate debt) are not material. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements of the Company and its independent certified public accountants' report are set forth on pages 57 through 89 of this report: Report of Independent Certified Public Accountants. Consolidated Balance Sheets as of December 31, 1999 and 2000. Consolidated Statements of Income for the years ended December 31, 1998, 1999 and 2000. Consolidated Statement of Shareholders' Equity for the years ended December 31, 1998, 1999 and 2000. Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000. Notes to Consolidated Financial Statements. Report of Independent Certified Public Accountants on Schedule I. Schedule I -- Condensed Financial Information of Registrant. Notes to Condensed Financial Information of Registrant. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 28 31 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT The Company's Board of Directors consists of ten members divided into three classes, with the members of each class serving three-year terms expiring at the third annual meeting of shareholders. The following table sets forth information, as of March 31, 2001, regarding the directors and executive officers of the Company.
TERM AS DIRECTOR NAME AGE POSITION EXPIRES - ---- --- -------- -------- David M. Howard............ 39 President, Chief Executive Officer and Director 2001 David K. Meehan............ 54 Chairman of the Board 2002 Christopher P. Breakiron... 34 Vice President, Treasurer, Chief Financial Officer and Secretary Robert G. Gantley.......... 46 Senior Vice President and Chief Operating Officer Daniel J. White............ 51 President and Chief Executive Officer of Geotrac 2002 and Director Robert M. Menke............ 67 Director 2003 Robert G. Menke............ 38 Director 2001 John A. Grant, Jr.......... 57 Director 2002 William D. Hussey.......... 67 Director 2003 E. Ray Solomon............. 70 Director 2003 Alejandro M. Sanchez....... 43 Director 2001 John S. McMullen........... 57 Director 2001
David M. Howard has served as a Director of the Company since June, 2000, as President of the Company since August, 1999, and as Chief Executive Officer of the Company since January, 2000. Prior to joining the Company, he spent eleven years with BIG. From October 31, 1998 until assuming his duties with the Company, Mr. Howard served as Senior Vice President of each of BIG's insurance subsidiaries, namely Bankers Insurance Company ("BIC"), Bankers Life Insurance Company ("BLIC"), Bankers Security Insurance Company ("BSIC") and First Community Insurance Company ("FCIC"). From October, 1996 until assuming his duties with the Company, he also served as Senior Vice President of BIG and President of Bankers Insurance Services, Inc., a subsidiary of BIG. Mr. Howard served as President of Bankers Hazard Determination Services, Inc., the flood zone determination services subsidiary of the Company that was merged with Geotrac, from October, 1995 to July, 1998, and as Executive Vice President of Bankers Insurance Services, Inc. from December, 1991 to October, 1996. He also has served as a director of Geotrac since July, 1998. Prior to joining BIG, Mr. Howard spent several years as an officer in the United States military. He is active in industry organizations and is a member of the Council of Company Executive Officers. David K. Meehan has served as the Chairman of the Board of Directors and as a Director of the Company since December, 1996. He also served as President and Chief Executive Officer of the Company from December, 1996 to August, 1999 and January, 2000, respectively. Mr. Meehan joined BIG in 1976 as Corporate Secretary. He was appointed President of BIG in 1979 and served in such capacity until February, 1999. He is currently Vice Chairman of the Board of BIG. Mr. Meehan is also Vice Chairman of various direct and indirect subsidiaries of BIG including BIC, BSIC, FCIC and BLIC. Mr. Meehan has served on the Board of Governors of each of the Florida Joint Underwriting Association, the Florida Property and Casualty Joint Underwriting Association and the Florida Residential Property and Casualty Joint Underwriting Association. Mr. Meehan is Director/Vice Chairman of the Florida Insurance Council and past Chairman and President of the Florida Association of Domestic Insurance Companies. 29 32 Christopher P. Breakiron has served as Chief Financial Officer, Treasurer and Secretary of the Company since October, 1999. Prior to that time, he served as the acting Chief Financial Officer, Treasurer and Secretary of the Company from August, 1999 through October, 1999. Mr. Breakiron is also a Vice President of the Company and has served in such capacity since April, 1999. From July, 1997 to August, 1999, he served as Controller of the Company. Prior to joining the Company, Mr. Breakiron worked as a senior auditor with Arthur Andersen LLP. He is a certified public accountant. Effective April 17, 2001, Mr. Breakiron will resign as Chief Financial Officer, Vice President, Secretary and Treasurer of the Company. See "Item 11. Executive Compensation." Robert G. Gantley has served as Chief Operating Officer and Senior Vice President of the Company since January, 2000. Prior to that time, Mr. Gantley served as Vice President -- Claims of Insurance Management Solutions, Inc., the Company's principal outsourcing subsidiary, from August, 1997 to January, 2000. From August, 1997 to June, 1998, he also served as Vice President -- Claims of the Company. Mr. Gantley joined BIG in October, 1996 and served as Vice President -- Claims of BIC until February, 1999. Prior to joining BIG, he was Assistant Director of the Massachusetts State Lottery from 1993 to 1996 and spent over fifteen years with Allstate Insurance Group, most recently as a Territorial Claims Manager from 1989 to 1993. Mr. Gantley has over eighteen years experience in the insurance industry. Daniel J. White has served as a Director of the Company since May, 1998. Mr. White founded the original predecessor to Geotrac of America, Inc., a wholly-owned subsidiary of the Company ("Geotrac"), in 1987 and has served as President of Geotrac (and its predecessors) since that time and as Chief Executive Officer of Geotrac (and its predecessors) since September, 1994. Mr. White also currently serves as a director of Independent Community Bank Corporation. Robert M. Menke has served as a Director of the Company since December, 1996. Mr. Menke founded BIG, a holding company chartered in Florida and the Company's principal shareholder, in 1976 and served as its Chairman of the Board from 1979 until December, 2000. He was honored as "Insurance Man Of The Year" in 1986 by the Florida Association of Domestic Insurance Companies. Mr. Menke is also a member of the Florida Insurance Council. Mr. Menke is currently Chairman of the Board of various direct and indirect subsidiaries of BIG including BIC, BSIC, FCIC and BLIC, all affiliates of BIG and the Company. He is also a director of the Florida Windstorm Association and First Community Bank of America. Robert G. Menke has served as a Director of the Company since December, 1996. Mr. Menke, the son of Robert M. Menke, joined BIG in 1985 and has held positions as programmer, systems analyst, systems manager, manager of information services, and Vice President and Senior Vice President of Corporate Services. He is currently President and Chief Executive Officer of BIG and has served in such capacity since October, 1999. From October, 1997 to October, 1999 Mr. Menke served as Executive Vice President and Chief Operating Officer of BIG. Mr. Menke also serves as President, COO and a Director of various direct and indirect subsidiaries of BIG including BIC, BSIC and FCIC. John A. Grant, Jr. Mr. Grant, age 57, has been a Director of the Company since December, 1996. Mr. Grant was formerly a partner with the law firm of Harris, Barrett, Mann and Dew, retiring in 2000. Mr. Grant was managing partner of the Tampa office and specialized in business and real property law. Mr. Grant was a member of the Florida Legislature from 1980 until 2000, where he served in a number of leadership positions, including chairman of the Banking and Insurance, Judiciary and Education committees. Mr. Grant has been listed in Who's Who in America and served as an advisor in the United States Department of Education, during the Reagan administration. Mr. Grant has also served on the Advisory Board of the United States Small Business Administration. Currently, Mr. Grant serves as Executive Director of the State of Florida Office of Public Guardian. William D. Hussey has served as a Director of the Company since December, 1996. Mr. Hussey is a retired President and Chief Executive Officer of the Florida League of Financial Institutions and is an advisor with the Florida Bankers Association. E. Ray Solomon, Ph.D., CLU, has served as a Director of the Company since December, 1996. Dr. Solomon is a retired Professor and the former Dean of the College of Business at Florida State University. 30 33 Alejandro M. Sanchez has served as a Director of the Company since July, 1998. Mr. Sanchez is also Chief Executive Officer of the Florida Bankers Association and has served in such capacity since February, 1998. From November, 1993 to January, 1998, he served as Vice President for Government Affairs of the Florida Bankers Association. He previously served as Senior Corporate Attorney for GTE Information Services in Tampa, Florida. John S. McMullen has served as a Director of the Company since January, 2001. Mr. McMullen is a retired President and Chief Executive Officer of Florida Bank of Tampa (including its predecessor, First National Bank of Tampa (fka Enterprise National Bank of Tampa)), having served in such capacity from 1992 until 1999. He also served as a director of Florida Banks, Inc., a publicly-traded bank holding company and the parent company of Florida Bank of Tampa, from August, 1998 to March, 1999. Prior to joining First National Bank of Tampa in 1992, Mr. McMullen spent 22 years with First Florida Bank, N.A. serving in various capacities, including Senior Vice President/Hillsborough Commercial Banking Group from 1990 to 1992 and Area Executive Vice President/Pinellas County from 1985 to 1990. Messrs. Robert M. Menke, Robert G. Menke and Meehan are also members of the Board of Directors of various direct and indirect subsidiaries of BIG including BIC, BSIC, FCIC and BLIC, which are all wholly-owned direct or indirect subsidiaries of BIG. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE During the year ended December 31, 2000, the executive officers and directors of the Company filed with the Securities and Exchange Commission on a timely basis all required reports relating to transactions involving equity securities of the Company beneficially owned by them. The Company has relied on the written representation of its executive officers and directors and copies of the reports they have filed with the Commission in providing this information. 31 34 ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth certain information concerning compensation paid to or earned by the Company's Chief Executive Officer and each of the Company's four other current executive officers for the years ended December 31, 2000, 1999 and 1998.
ANNUAL COMPENSATION(1) ------------------------------------------------------ OTHER ANNUAL ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) COMPENSATION(3) - --------------------------- ---- -------- ------- --------------- --------------- David M. Howard........................ 2000 $229,678 $ -- -- $8,436 President and Chief Executive Officer(4) 1999 71,094 50,000 -- 2,659 1998 -- -- -- -- David K. Meehan........................ 2000 75,292 -- -- 3,570 Chairman of the Board(5) 1999 148,893 32,000 -- 6,587 1998 239,092 32,000 -- 8,978 Jeffrey S. Bragg....................... 2000 98,413 -- -- -- Former Executive Vice President and 1999 160,468 25,000 -- 5,728 Chief Operating Officer(6) 1998 156,552 25,000 -- 5,714 Christopher P. Breakiron............... 2000 149,519 -- -- 5,942 Chief Financial Officer, Secretary and 1999 97,806 15,000 -- 4,512 Treasurer(7) 1998 -- -- -- -- Robert G. Gantley...................... 2000 149,424 -- -- 5,839 Senior Vice President and 1999 -- -- -- -- Chief Operating Officer(8) 1998 -- -- -- -- Daniel J. White........................ 2000 150,000 -- -- 4,154 President and Chief Executive Officer 1999 150,000 -- -- 5,714 of Geotrac(9) 1998 66,050 -- -- 1,044
- --------------- (1) During the years ended December 31, 1999 and 2000, certain of the executive officers of the Company were also executive officers or employees of BIG, and, in certain instances, BIG paid a portion of their respective compensation. The amounts reflected in the table above for such years were all paid to the respective executive officers by the Company. During the year ended December 31, 1998, all of the executive officers of the Company spent substantially all of their time on the Company's business and were compensated solely by the Company. During the years ended December 31, 1999 and 2000, all of the executive officers of the Company spent substantially all of their time on the Company's business and were compensated solely by the Company except that subsequent to August 19, 1999, Mr. Meehan spent 70% of his time on BIG's business and was paid $96,312 and $151,847 by BIG for his service as an executive officer of BIG during the years ended December 31, 1999 and 2000, respectively. (2) Does not include the value of the perquisites provided to certain of the named executive officers which in the aggregate did not exceed 10% of such officer's salary and bonus. Also excludes benefits, if any, accrued to Messrs. Howard, Meehan, Bragg and Gantley under the Executive Phantom Stock Plans of Bankers Financial Corporation, the parent of BIG, and Venture Capital Corporation. No officers or directors of the Company (with the exception of Robert M. Menke and Robert G. Menke) are eligible to receive additional grants under such Phantom Stock Plans. The Company did not grant any options, restricted stock or other long-term incentive compensation to its executive officers during 1998. (3) Reflects matching amounts paid by the Company under its 401(k) plan for the year indicated. (4) Mr. Howard became the President of the Company on August 19, 1999 and the amounts listed for 1999 include compensation only from such time. (5) Effective August 19, 1999, Mr. Meehan was succeeded by Mr. Howard as President of the Company. Prior to such time, Mr. Meehan's annual base salary pursuant to his Employment Agreement was $258,000. Effective August 19, 1999 his annual base salary was reduced to $75,000 for his services as Chairman of the Board. 32 35 (6) On January 11, 2000, Mr. Bragg resigned as Executive Vice President and Chief Operating Officer. The amounts set forth in the summary compensation table reflect $30,754 paid to Mr. Bragg pursuant to his Release and Separation Agreement dated January 11, 2000 and $92,262 paid to Mr. Bragg pursuant to his Consulting Agreement dated January 11, 2000. (7) Mr. Breakiron became the Chief Financial Officer, Secretary and Treasurer of the Company on August 24, 1999. Prior to such time Mr. Breakiron served as Vice President and Controller. Accordingly, the amounts shown include all compensation received from the Company for the year ended December 31, 1999. Effective April 17, 2001, Mr. Breakiron will resign as Chief Financial Officer, Vice President, Secretary and Treasurer of the Company. On April 12, 2001, the Company and Mr. Breakiron entered into a Release and Separation Agreement and a Consulting Agreement pursuant to which, among other things, Mr. Breakiron will act as a consultant to the Company through May 15, 2001. See "Executive Compensation -- Employment Agreements." The Company has commenced efforts to hire a successor to Mr. Breakiron and expects to do so in the foreseeable future. (8) Mr. Gantley became the Chief Operating Officer of the Company on January 18, 2000. Prior to such time Mr. Gantley served as Vice President of Claims. Accordingly, the amounts shown include all compensation received from the Company for the year ended December 31, 2000. (9) Mr. White did not join the Company as an officer until the consummation of the acquisition of Geotrac's predecessor in July, 1998. The following table sets forth information with respect to grants of stock options during the year ended December 31, 2000 to the executive officers named in the Summary Compensation Table. These options were granted under the Company's Long-Term Incentive Plan and provide for vesting of 60% after three years, 20% after four years and 20% after five years from the date of grant. Options were granted at exercise prices on not less than the fair market value of the Common Stock on the date of grant. The amounts under "Potential Realizable Value at Assumed Annual Rate of Stock Price Appreciation for Option Term" represent the hypothetical gains of the options granted based on assumed annual compound stock appreciation rates of 5% and 10% over their exercise price for the full seven-year term of the options. The assumed rates of appreciation are mandated by the rules of the Commission and do not represent the Company's estimate or projection of future Common Stock prices. OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT ASSUMED PERCENT OF ANNUAL RATE OF NUMBER OF TOTAL STOCK PRICE SECURITIES OPTIONS/SARS APPRECIATION FOR UNDERLYING GRANTED TO OPTION TERM OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION --------------------- NAME GRANTED FISCAL YEAR PER ($/SH) DATE 5% 10% - ---- ---------- ------------ -------------- ---------- --------- --------- David K. Meehan................ -- -- -- -- -- -- David M. Howard................ -- -- -- -- -- -- Jeffrey S. Bragg............... -- -- -- -- -- -- Christopher P. Breakiron....... 10,000 3.36% $5.00 01/14/07 $20,355 $47,436 Robert S. Gantley.............. -- -- -- -- -- -- Daniel J. White................ -- -- -- -- -- --
33 36 The following table sets forth information with respect to aggregate stock option exercises by the executive officers named in the Summary Compensation Table during 2000 and the year-end value of unexercised options held by such executive officers. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTIONS/SAR VALUE TABLE
VALUE OF UNEXERCISED IN-THE-MONEY NUMBER OF NUMBER OF UNEXERCISED OPTIONS/SARS AT FY-END SHARES OPTIONS/SARS A+FY-END ($)* ACQUIRED VALUE --------------------------- --------------------------- NAME ON EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- ----------- ------------ ----------- ------------- ----------- ------------- David K. Meehan............. -- -- -- 25,000 -- -- David M. Howard............. -- -- -- 60,000 -- -- Jeffrey S. Bragg............ -- -- -- -- -- -- Christopher P. Breakiron.... -- -- -- 35,000 -- -- Robert S. Gantley........... -- -- -- 35,000 -- -- Daniel J. White............. -- -- -- 25,000 -- --
- --------------- * Based on the average high and low sales prices of the Company's Common Stock on December 31, 2000 as quoted on The Nasdaq Stock Market. EMPLOYMENT AGREEMENTS Effective as of the completion of its initial public offering in February, 1999, the Company entered into an employment agreement with Mr. Meehan pursuant to which he was originally paid an annual base salary of $258,000. Effective August 19, 1999, Mr. Meehan resigned as President of the Company and his annual base salary was reduced to $75,000 for his services as Chief Executive Officer and Chairman of the Board. (In January, 2000, he also resigned as Chief Executive Officer of the Company.) Mr. Meehan's employment agreement provides for an initial term of three years, subject to automatic continuation until terminated by either party. Mr. Meehan's Employment Agreement further provides that, if he is terminated by the Company without cause (as defined therein), he shall be entitled to severance payments, payable in accordance with the Company's usual payroll practices, equal to his then current annual base salary. In the event Mr. Meehan secures employment during the twelve months following termination, then the Company shall be entitled to a credit against its obligation to make severance payments in the amount of 75% of the base salary paid to him by his new employer during the twelve-month period following termination by the Company. Mr. Meehan's Employment Agreement provides that he shall be provided benefits, such as health, life and disability insurance, on the same basis as the Company's other employees. In addition, to the extent authorized by the Board of Directors, Mr. Meehan also shall be entitled to participate in the Company's bonus, stock option and other plans, if any. Mr. Meehan's agreement further provides that, during the term of the agreement and for a period of two years thereafter, Mr. Meehan will not, directly or indirectly, compete with the Company by engaging in certain proscribed activities. Effective June 19, 1998, the Company entered into an employment agreement with Mr. Gantley pursuant to which he is currently paid an annual base salary of $150,000. Mr. Gantley's employment agreement provides for an initial term of three years, subject to automatic continuation until terminated by either party. Mr. Gantley's Employment Agreement further provides that, if he is terminated by the Company without cause (as defined therein), he shall be entitled to severance payments, payable in accordance with the Company's usual payroll practices, equal to his then current annual base salary. In the event Mr. Gantley secures employment during the twelve months following termination, then the Company shall be entitled to a credit against its obligation to make severance payments in the amount of 75% of the base salary paid to him by his new employer during the twelve-month period following termination by the Company. Mr. Gantley's Employment Agreement provides that he shall be provided benefits, such as health, life and disability insurance, on the same basis as the Company's other employees. In addition, to the extent authorized by the Board of Directors, Mr. Gantley also shall be entitled to participate in the Company's bonus, stock option and other plans, if any. Mr. Gantley's agreement further provides that, during the term of the 34 37 agreement and for a period of two years thereafter, Mr. Gantley will not, directly or indirectly, compete with the Company by engaging in certain proscribed activities. In connection with the acquisition of Geotrac's predecessor, Geotrac entered into an employment agreement with Daniel J. White pursuant to which Mr. White will continue to serve as President and Chief Executive Officer of Geotrac. This agreement provides for an initial term of four years and shall continue in effect thereafter until terminated by either party upon 90 days prior written notice. Mr. White's current annual base salary is $150,000, subject to annual review by Geotrac's board of directors. To the extent authorized by Geotrac's board of directors, Mr. White shall be entitled to participate in any bonus programs established by Geotrac. Mr. White shall also be entitled to comparable benefits, including health, life and disability insurance, as are offered to any of Geotrac's other executive officers. In the event of Mr. White's death or disability, Geotrac's obligations under the agreement will automatically terminate, except that Mr. White shall be entitled to severance equal to one times his then current annual base salary. The agreement further provides that, in the event of termination by Geotrac without cause (as defined therein) or by Mr. White for good reason (as defined therein), or in the event the agreement is not renewed for any reason other than death, disability or for cause, then Geotrac shall pay Mr. White at the rate of his annual base salary then in effect for the longer of (i) the remainder of the term of the agreement and (ii) one year after such termination date, subject to a credit of up to 75% of the base salary paid to Mr. White by his new employer, if any. This agreement also provides that, for a period of two years following Mr. White's termination of employment other than by Mr. White for good reason or by Geotrac without cause, Mr. White will not, directly or indirectly, engage (or have an interest) in the flood zone compliance business nor in any other business engaged or planned to be engaged in by Geotrac within any state or country in which Geotrac is doing or plans to do business. Finally, the agreement provides that, during the term of the agreement and for a period of two years thereafter, Mr. White will not, directly or indirectly, employ, attempt to employ, or solicit for employment, any of Geotrac's employees. Both Messrs. Jeffrey S. Bragg, former Executive Vice President and Chief Operating Officer of the Company, and Kelly K. King, former Senior Vice President, Treasurer, Chief Financial Officer and Secretary of the Company, had Employment Agreements substantially similar to Mr. Meehan's described above. Effective upon their departures from the Company, both Messrs. Bragg and King entered into Release and Separation Agreements pursuant to which the Company paid them a total of $30,754 and $180,000, respectively. The Release and Separation Agreements contain confidentiality provisions. The Company also entered into a Consulting Agreement with Mr. Bragg pursuant to which the Company paid Mr. Bragg an additional $92,262. The Consulting Agreement also contains non-compete provisions. On April 12, 2001, the Company entered into a Release and Separation Agreement with Mr. Breakiron, which provides for his resignation as Vice President, Chief Financial Officer, Secretary and Treasurer, effective April 17, 2001. The Release and Separation Agreement also provides for severance payments of up to $112,500 to be paid over a nine-month period commencing on May 16, 2001. Additionally, on April 12, 2001, the Company entered into a Consulting Agreement with Mr. Breakiron, pursuant to which he will provide various consulting services to the Company from the date of his resignation through May 15, 2001. Mr. Breakiron will be paid an aggregate of $11,538 for services provided under the Consulting Agreement. The Company has commenced efforts to hire a successor to Mr. Breakiron and expects to do so in the foreseeable future. STOCK OPTION PLANS The Company currently maintains four stock option plans to attract, motivate and retain key employees and members of the Board of Directors who are not employees of the Company. Long Term Incentive Plan. The Company currently maintains a Long Term Incentive Plan (the "1999 Incentive Plan"). The 1999 Incentive Plan was created to attract, retain and motivate participating employees of the Company and its subsidiaries through awards of shares of Common Stock, options to purchase shares of Common Stock and stock appreciation rights ("SARs"). The 1999 Incentive Plan has been approved by the Company's Board of Directors and shareholders. 35 38 Pursuant to the 1999 Incentive Plan, all employees of the Company as a group, including executive officers, have been granted options to purchase a total of 570,000 shares of Common Stock at a weighted average price of $9.18 per share. All of such options expire on the seventh anniversary of the date of grant. All such options shall become exercisable 60% after three years, 20% after four years and 20% after five years from the date of grant. The options previously granted to Messrs. Bragg and King were not vested prior to their departure from the Company and, accordingly, such options were canceled. The 1999 Incentive Plan is administered by the Compensation Committee of the Board of Directors. Effective as of October, 2000, no further grants of any kind may be made under the 1999 Incentive Plan. 2000 Stock Incentive Plan. In October, 2000, the Company's Board of Directors adopted the 2000 Stock Incentive Plan (the "2000 Incentive Plan"), subject to shareholder approval. The 2000 Incentive Plan provides for the grant of incentive or nonqualified stock options, SARs, and other stock-based awards. No more than 1,000,000 shares of Common Stock, plus up to an additional 750,000 shares from the 1999 Incentive Plan that may become available as a result of canceled, forfeited or expired awards under such plan may be issued under the 2000 Incentive Plan. Awards may be issued to employees of the Company and its subsidiaries, and consultant, advisors and others who perform services for the Company or a subsidiary thereof. All options and stock appreciation rights are to be issued at the greater of the fair market value or "Net Tangible Book Value Per Share" (as defined) and will expire on the tenth anniversary of the date of grant or such earlier date(s) as the Compensation Committee determines. As of December 31, 2000, there were no options outstanding under the 2000 Incentive Plan. The 2000 Incentive Plan is administered by the Compensation Committee of the Board of Directors. Non-Employee Directors' Stock Option Plan. The Company also maintains a Non-Employee Directors' Stock Option Plan (the "1999 Director Plan") to secure for the Company and its shareholders the benefits of the incentive inherent in increased Common Stock ownership by the members of the Company's Board of Directors who are not employees of the Company. The 1999 Director Plan has been approved by the Company's Board of Directors and shareholders. The 1999 Director Plan provides for the grant of nonqualified stock options to purchase up to 7,200 shares of Common Stock in any three-year period to members of the Board of Directors who are not employees of the Company. A total of 200,000 shares of Common Stock may be issued pursuant to this plan. In February, 1999, each non-employee director was granted options to purchase 6,000 shares of Common Stock at $11.00 per share. Non-employee directors receiving such options will become vested in options for the purchase of 800 shares of Common Stock after the adjournment of each annual meeting of shareholders of the Company, to the extent he or she has been granted options that have not yet vested, and provided that he or she is then a non-employee director of the Company. In addition, each non-employee director shall become vested in options for the purchase of 400 shares of Common Stock upon the adjournment of each regularly scheduled quarterly meeting of the Board of Directors (other than following the annual meeting of shareholders), to the extent he or she has been granted options that have not yet vested, and provided that he or she is then a non-employee director of the Company. Notwithstanding the foregoing, neither Robert M. Menke nor Robert G. Menke will be eligible to receive any option grants under the 1999 Director Plan. In addition, no further grants shall be made under the 1999 Director Plan on or after the date of the Company's 2001 annual meeting of shareholders. All options granted will have an exercise price equal to the fair market value of the Common Stock as of the date of grant, will become exercisable upon vesting, and will expire on the sixth anniversary of the date of grant. The 1999 Director Plan is a formula plan and accordingly is intended to be self-governing. To the extent that questions of interpretation arise, they will be resolved by the Board of Directors. 2000 Non-Employee Director Stock Plan. In October, 2000, the Company's Board of Directors adopted the 2000 Non-Employee Director Stock Plan (the "2000 Director Plan"), subject to shareholder approval. The 2000 Director Plan provides for the automatic grant of nonqualified stock options to purchase up to 5,000 shares of Common Stock for each non-employee director who is elected, re-elected or retained, commencing on the date of the Company's 2001 annual meeting of shareholders, and continuing annually thereafter on the date of each succeeding annual meeting of shareholders. A total of 250,000 shares are reserved for issuance pursuant to this plan. The 2000 Director Plan also permits the Board of Directors to make additional discretionary grants of stock-based awards to the non-employee directors, provided that only 100,000 of the 36 39 total reserved shares may be issued pursuant to discretionary awards. All options are to be issued at an exercise price per share equal to the greater of the Company's fair market value per share of Common Stock or "Net Tangible Book Value Per Share" (as defined). The annual option grants vest on the first anniversary following the date of grant, and expire on the tenth anniversary of the date of grant unless terminated earlier pursuant to the provision of the 2000 Director Plan. The discretionary grants will be subject to such terms and conditions as are determined by the Board of Directors. As of December 31, 2000, there were no options outstanding under the 2000 Director Plan. The 2000 Director Plan is intended to be self-governing with respect to the annual option grants. With respect to the discretionary grants, the 2000 Director Plan is administered by the Board of Directors. Non-Qualified Stock Option Grants. The Company's Board of Directors and shareholders also have adopted a Non-Qualified Stock Option Plan (the "Non-Qualified Plan"), pursuant to which non-qualified stock options to purchase 125,000 shares of Common stock at a price per share of $11.00 were granted in conjunction with the February, 1999 initial public offering to certain executive officers of BIG, including options to purchase 25,000 shares each to Messrs. Robert M. Menke and Robert G. Menke, directors of the Company, and Mr. David M. Howard, President, Chief Executive Officer and a director of the Company. (The options granted to Mr. Howard were voluntarily forfeited at the time Mr. Howard became President of the Company.) All of such options expire on February 10, 2006, the seventh anniversary of the date of grant. Options shall become exercisable 60% after three years, 20% after four years and 20% after five years. The Non-Qualified Plan is administered by the Compensation Committee of the Board of Directors of the Company. DIRECTOR COMPENSATION Directors who are executive officers of the Company receive no compensation for service as members of either the Board of Directors or committees thereof. Directors who are not executive officers of the Company receive a quarterly retainer of $ 3,750, $1,000 for each Board of Directors meeting attended and $150 ($200 in the case of a committee chairperson) per committee meeting attended, plus reimbursement of reasonable expenses. The outside directors are also eligible to receive options to purchase Common Stock under the 1999 Director Plan and the 2000 Director Plan. See "Executive Compensation -- Stock Option Plans." COMMITTEES OF THE BOARD The Board of Directors has established committees whose responsibilities are summarized as follows: Audit Committee. The Audit Committee is comprised of Messrs. Solomon (Chairman), Hussey (Vice Chairman), Grant, Sanchez and McMullen and is responsible for reviewing the independence, qualifications and activities of the Company's independent certified public accountants and the Company's financial policies, control procedures and accounting staff. The Audit Committee recommends to the Board of Directors the appointment of the independent certified public accountants and reviews and approves the Company's financial statements. The Audit Committee is also responsible for the review of transactions between the Company and any Company officer, director or entity in which a Company officer or director has a material interest. Compensation Committee. The Compensation Committee is comprised of Messrs. Solomon (Chairman), Hussey (Vice Chairman), Grant and Sanchez and is responsible for establishing the compensation of the Company's directors, officers and other managerial personnel, including salaries, bonuses, termination arrangements, and other executive officer benefits. In addition, the Compensation Committee is responsible for the administration of the Company's 1999 Incentive Plan and 2000 Incentive Plan, including the recipients, amounts and terms of stock option grants thereunder, and the Company's Non-Qualified Stock Option Plan. Executive Committee. The Executive Committee is comprised of Messrs. Meehan (Chairman), Howard, (Vice Chairman), Robert M. Menke, Robert G. Menke, Grant and McMullen. The Executive Committee, to the fullest extent allowed by the Florida Business Corporation Act (the "FBCA"), and subject to the powers and authority delegated to the Audit Committee and the Compensation Committee, has and 37 40 may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company during intervals between meetings of the Board of Directors. Pursuant to the FBCA, the Executive Committee shall not have the authority to, among other things: approve actions requiring shareholder approval, such as the sale of all or substantially all of the Company's assets; fill vacancies on the Board of Directors or any committee thereof; adopt, repeal or amend the Company's Bylaws; or, subject to certain exceptions, reacquire or issue shares of the Company's capital stock. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company's Compensation Committee was established in connection with the Company's initial public offering in February, 1999. The members of the Compensation Committee are Messrs. Solomon (Chairman), Hussey (Vice Chairman), Grant and Sanchez. No member of the Compensation Committee is currently or was formerly an officer or an employee of the Company or its subsidiaries. 38 41 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION INTRODUCTION Under the rules of the Commission, the Company is required to provide certain information concerning compensation provided to the Company's chief executive officer and its executive officers reported for the year ended December 31, 2000. The disclosure requirements for the executive officers include the use of tables and a report of the Committee responsible for compensation decisions for the named executive officers, explaining the rationale and considerations that led to those compensation decisions. The Compensation Committee of the Board of Directors was formed in connection with the Company's initial public offering in February, 1999. Prior to such time, the Board of Directors was responsible for these decisions. COMPENSATION COMMITTEE ROLE The Compensation Committee of the Board of Directors is currently responsible for the Company's compensation program for its executive officers, including the named executive officers. The Compensation Committee is responsible for establishing the compensation of the Company's directors, officers and other managerial personnel, including salaries, bonuses, termination arrangements, and other executive officer benefits. The Compensation Committee is responsible for the administration of the Company's 1999 Incentive Plan and 2000 Incentive Plan, including the recipients, amounts and terms of stock option grants thereunder, and the Non-Qualified Plan. Prior to the formation of the Compensation Committee in connection with the Company's initial public offering in February, 1999, the entire Board of Directors performed most of these functions. COMPENSATION PHILOSOPHY The compensation philosophy for executive officers conforms generally to the compensation philosophy followed for all of the Company's employees. The Company's compensation is designed to maintain executive compensation programs and policies that enable the Company to attract and retain the services of highly qualified executives. In addition to base salaries, executive compensation programs and policies consisting of discretionary cash bonuses and periodic grants of stock options are designed to reward and provide incentives for individual contributions as well as overall Company performance. The Compensation Committee monitors the operation of the Company's executive compensation policies. Key elements of the Company's compensation program include base salary, discretionary annual cash bonuses and periodic grants of stock options. The Company's policies with respect to these elements, including the basis for the compensation awarded the Company's chief executive officer, are discussed below. While the elements of compensation described below are considered separately, the Compensation Committee takes into account the full compensation package offered by the Company to the individual, including healthcare and other insurance benefits. Base Salaries. The Company has established competitive annual base salaries for all executive officers, including the named executive officers. Effective as of the initial public offering, the Company entered into employment agreements with each of its then executive officers. The only executive officers who currently have employment agreements are David K. Meehan and Robert G. Gantley. Each of these employment agreements provides for an initial term of three years, subject to automatic continuation until terminated by either party. See "Executive Compensation - Employment Agreements." The annual base salaries for each of the Company's executive officers, including the Company's chief executive officer, reflect the subjective judgment of the Board of Directors based on the consideration of the executive officer's position and tenure with the Company, the Company's needs, and the executive officer's individual performance, achievements and contributions to the growth of the Company. Mr. Howard currently serves as Chief Executive Officer of the Company at an annual base salary of $229,678. The Board of Directors and Compensation Committee believe that this annual base salary is consistent with the salary range established for this position based on the factors noted above and 39 42 Mr. Howard's prior experience and managerial expertise, his knowledge of the Company's operations and the industry in which it operates. Annual Bonus. The Company's executive officers are eligible for a discretionary annual cash bonus. No bonus was paid to Mr. Howard as the Company's chief executive officer for the year ended December 31, 2000. Stock Options. Under the Company's 1999 and 2000 Incentive Plans, stock options may be granted to key employees, including executive officers of the Company. The 1999 and 2000 Incentive Plans are administered by the Compensation Committee in accordance with the requirements of Rule 16b-3. The Compensation Committee also administers the Company's Non-Qualified Plan. During the year ended December 31, 2000, no options were granted to Mr. Howard under either of these plans. SECTION 162(M) LIMITATIONS Under Section 162(m) of the Code, a tax deduction by corporate taxpayers, such as the Company, is limited with respect to the compensation of certain executive officers unless such compensation is based upon performance objectives meeting certain regulatory criteria or is otherwise excluded from the limitation. Based upon the Compensation Committee's commitment to link compensation with performance as described in this report, the Compensation Committee currently intends to qualify compensation paid to the Company's executive officers for deductibility by the Company under Section 162(m). COMPENSATION COMMITTEE E. RAY SOLOMON (CHAIRMAN) WILLIAM D. HUSSEY (VICE CHAIRMAN) JOHN A. GRANT, JR. ALEJANDRO M. SANCHEZ APRIL 13, 2001 The report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this annual report on Form 10-K into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934 (together, the "Acts"), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts. 40 43 PERFORMANCE GRAPH The following line graph compares the Company's cumulative total shareholder return with the cumulative total shareholder return of the S&P 500 Index and the NASDAQ Computer and Data Processing Index since the Company's initial public offering in February 1999, assuming in each case an initial investment of $100 on February 11, 1999: COMPARISON OF 22 MONTH CUMULATIVE TOTAL RETURN* AMONG INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., THE S&P 500 INDEX AND THE NASDAQ COMPUTER & DATA PROCESSING INDEX
INSURANCE MANAGEMENT NASDAQ COMPUTER & SOLUTIONS GROUP, INC. S&P 500 DATA PROCESSING --------------------- ------- ----------------- 2/11/99 100.00 100.00 100.00 3/99 81.82 102.69 106.80 6/99 77.27 109.93 111.09 9/99 27.27 103.07 115.69 12/99 22.73 118.41 194.54 3/00 21.31 121.12 192.38 6/00 15.91 117.90 157.19 9/00 12.50 116.76 145.47 12/00 7.39 107.62 90.01
- --------------- * $100 invested on 2/11/99 in stock or index -- including reinvestment of dividends. Fiscal year ending December 31. 41 44 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding the beneficial ownership of Common Stock as of March 31, 2001, with respect to: (i) each of the Company's directors; (ii) each of the Company's executive officers named in the Summary Compensation Table above; (iii) all directors and executive officers of the Company as a group; and (iv) each person known by the Company to own beneficially more than 5% of the Common Stock. Except as otherwise indicated, each of the shareholders listed below has sole voting and investment power over the shares beneficially owned.
SHARES BENEFICIALLY OWNED ------------------- NAME SHARES PERCENT - ---- --------- ------- Bankers Insurance Group, Inc.(1)............................ 8,349,884 65.2% Western International Insurance Company(2).................. 700,000 5.5% David M. Howard............................................. 13,000 * David K. Meehan............................................. 2,200 * Christopher P. Breakiron(3)................................. 400 * Robert S. Gantley(4)........................................ 1,700 * Daniel J. White(5).......................................... 524,198 4.1% Robert M. Menke(6).......................................... 162,200 * Robert G. Menke............................................. 3,200 * John A. Grant, Jr.(7)....................................... 41,000 * William D. Hussey........................................... 3,000 * E. Ray Solomon.............................................. 5,500 * Alejandro M. Sanchez........................................ 1,000 * John S. McMullen(8)......................................... 354,300 2.8% All directors and executive officers as a group (12 persons)(6)............................................... 1,111,698 8.7%
- --------------- * Less than 1% (1) Includes 147,084 shares held by Bankers Insurance Group, Inc. ("BIG"), 3,528,455 shares held by Bankers Insurance Corporation ("BIC") and 4,674,345 shares held by Bankers Security Insurance Company ("BSIC"). The business addresses of BIG, BIC and BSIC are all 360 Central Avenue, St. Petersburg, Florida 33701. Bankers Insurance Group, Inc. is an indirect subsidiary of Bankers International Financial Corporation, Ltd. ("BIFC"), a Cayman Islands corporation wholly owned by Bankers International Financial Corporation II Trust, a discretionary charitable trust. The sole trustee of this trust is Ansbacher (Cayman) Limited, a Cayman Island corporation unaffiliated with BIG, the Company or their respective officers or directors. Pursuant to the trust's declaration of trust, Independent Foundation for the Pursuit of Charitable Endeavors, Ltd., a not for profit Cayman Islands corporation ("IFPCE"), possesses the discretionary power to (i) direct the trustee to appoint the trust fund to another trust for the benefit of one or more of the beneficiaries of the trust and (ii) remove the trustee and appoint one or more new trustees outside the Cayman Islands. A majority vote of the directors of IFPCE is required to take either of these actions. The Articles of Association of IFPCE provide that the Board of Directors shall consist of seven members, three of whom shall be the top three executives of Bankers International Financial Corporation, a Florida corporation and subsidiary of BIFC, three of whom shall be Mr. Robert M. Menke and his lineal descendants, and one of whom shall be a director elected by a majority vote of the remaining six directors (or, if they cannot agree, appointed by a court of competent jurisdiction). Until his death or adjudication of incompetency, Robert M. Menke shall have five votes and all other directors shall have one vote, and Robert M. Menke's presence at a meeting shall be required for a quorum. As of the March 31, 2001, the directors of IFPCE included David K. Meehan, Robert M. Menke and Robert G. Menke. (2) Western International Insurance Company ("WIIC") is a wholly-owned subsidiary of Venture Capital Company ("VCC"). The business address of VCC and WIIC is Bank America Building, Fort Street, Georgetown, Grand Cayman, British West Indies. VCC is a Cayman Island corporation wholly-owned by Venture II Trust, a discretionary charitable trust. The sole trustee of this trust is Cayman National Trust Company Limited, a Cayman bank unaffiliated with BIG, the Company or their respective officers or 42 45 directors. Pursuant to the trust's declaration of trust, IFPCE possesses the same discretionary powers as described in note (1) above. (3) Represents shares held jointly with spouse. (4) Includes 700 shares held directly by Mr. Gantley and 1,000 shares held jointly with his spouse. (5) Includes 262,099 shares held in trust by his spouse. (6) Excludes 147,084 shares held by BIG, 3,528,455 shares held by BIC, 4,674,345 shares held by BSIC and 700,000 shares held by WIIC. See Notes (1) and (2) above. All shares are held by Robert M. Menke Trust U/A dated 5/17/95, a revocable trust pursuant to which Robert M. Menke is the sole trustee and lifetime beneficiary. (7) Includes 15,000 shares held directly by Mr. Grant and 26,000 shares held directly by his spouse. (8) Includes 154,300 shares held directly by Mr. McMullen, 110,000 shares held by Andros Associates, Inc., 45,000 shares held by the Kenneth S. McMullen Family Trust and 45,000 shares held by the Gertrude B. McMullen Family Trust. Mr. McMullen owns 99% of the outstanding equity securities of Andros Associates, Inc., is the sole trustee and sole beneficiary of the Kenneth S. McMullen Trust, and is the sole trustee and sole beneficiary of the Gertrude B. McMullen Trust. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ADMINISTRATION SERVICES AGREEMENT Effective as of January 1, 1998, the Company and BIG entered into an Administrative Services Agreement (the "Administration Agreement") pursuant to which BIG provides the Company with various administrative and support services, such as human resources and benefits administration, accounting, legal, cash management and investment services, requested by the Company from time to time and reasonably necessary in the conduct of its operations. Under the Administration Agreement, as originally in effect, the Company was charged for these services generally based upon a contractually agreed-upon quarterly fee of $396,250. Effective as of January 1, 1999, the Administration Agreement was amended to eliminate certain accounting and internal audit service functions (which functions are currently performed by the Company directly) and to reduce the quarterly fee payable by the Company to BIG (including one-fourth of the annual fee for legal services) to $258,750, subject to renegotiation by either party. In addition, the Company paid BIG, through the year ended December 31, 1999, an annual fee of $120,000 for routine legal services provided. Legal services provided with respect to non-routine matters are to be billed to the Company at negotiated prices. Effective January 1, 2000, the annual fee for routine legal services was reduced to $60,000 from $120,000. Effective April 1, 2000, the portion of the fee attributable to human resources and benefits administration services, excluding training services (approximately $393,000), was eliminated as the Company began to perform such services at such date. On December 31, 2000, the Administration Agreement was renewed by the Company for an additional one-year term. Pursuant to the Letter Agreement described below, the Administration Agreement was terminated effective April 1, 2001 and will be replaced effective June 1, 2001 with a new Corporate Services Agreement pursuant to which BIG will provide the Company with various marketing and training services at fixed hourly rates. See "Certain Relationships and Related Transactions -- Letter Agreements." SERVICE AGREEMENTS Effective as of January 1, 1998, the Company entered into a separate Service Agreement (each a "Service Agreement") with each of BIC, BSIC and FCIC, all direct or indirect subsidiaries of BIG, pursuant to which the Company provides policy administration, claims administration and data processing services to such entities in connection with their flood, homeowners and automobile lines of business, and claims administration and data processing services for all such entities' other property and casualty lines of business. Under the Service Agreements, as originally in effect, each entity paid the Company as follows: (1) for its policy administration services a monthly fee based upon direct written premiums for the flood, homeowners and automobile insurance programs; (2) for its claims administration services a monthly fee based upon direct earned premiums for the property, casualty, automobile properly, automobile casualty, flood, and workers' compensation insurance programs (In addition, a monthly fee based upon direct incurred losses is charged for flood claims administration and a reimbursement not to exceed 5% of direct incurred losses from a single event 43 46 in excess of $2 million is charged to property claims.); (3) for its data processing services, a monthly fee based upon direct written premiums for all insurance programs; and (4) for certain customer services such as mailroom, policy assembly, records management and cash office a monthly fee based upon direct written premiums (except, if provided in connection with their flood, homeowner and automobile insurance lines, where no such fees are imposed). The total service fees charged to BIC, BSIC and FCIC under these Service Agreements during the year ended December 31, 1998 totaled $36.1 million. Effective January 1, 1999, these Service Agreements were modified to provide for tiered pricing based on the volume of business processed, and to change the fee for data processing services, which was previously charged as a percentage of direct written premium, to a fixed monthly fee. The total service fees charged to BIC, BSIC and FCIC under these Service Agreements, as amended, during the years ended December 31, 1999 and 2000 totaled $41.5 million and $37.9 million, respectively. These modifications resulted in a reduction in the base fees charged for certain lines of business and increases in base fees charged for other lines of business to better reflect the services provided and competitive market rates for such services. The term of each Service Agreement was to expire on June 1, 2001, provided that it was thereafter to be automatically extended until terminated upon 90 days prior notice by either party. Effective April 1, 1999, the Company further amended its existing Service Agreements with affiliated insurers to provide for minimum aggregate quarterly service fee payments through December 31, 1999 with respect to certain lines of business, provided that certain key tasks are performed timely. If such minimum service fee requirements with respect to said lines of business under the agreements had not been implemented as of April 1, 1999, aggregate affiliated outsourcing services revenues, which totaled $41.5 million for the year ended December 31, 1999, would have been $39.7 million in accordance with the terms of the affiliated service agreements as in effect prior to April 1, 1999. Additionally, for the year ended December 31, 1999, the Company did not recognize approximately $500,000 of additional affiliated service fees under the minimum service fee arrangement, as the Company did not meet certain specified milestones on a timely basis. Such minimums were established to compensate the Company for maintaining an infrastructure to process certain lines of business of affiliated insurers that have not grown as rapidly as originally forecasted. In addition, under the Service Agreement with BIC, the Company administers an AYO Claims Agreement between BIG and Florida Windstorm Underwriting Association, which agreement BIG assigned to BIC on December 15, 1998. The Company processes and adjusts all claims made under the AYO Claims Agreement. The administrative fee (equal to a percentage of each loss paid) is allocated between BIC and the Company. Pursuant to the Letter Agreement described below, the Service Agreements will be amended effective June 1, 2001 to, among other things, extend the term of each agreement, modify certain of the service fees payable thereunder, and eliminate data and technical support services from the administrative services to be provided by the Company thereunder. See "Certain Relationships and Related Transactions -- Letter Agreements." Effective December 1, 1998, the Company entered into a service agreement with BLIC, a subsidiary of BIG, pursuant to which the Company provides certain administrative services and allows BLIC to make use of certain of the Company's property, equipment and facilities in connection with BLIC's day-to-day operations. Under the service agreement, as amended, BLIC agrees to pay the Company predetermined fees on a quarterly basis. To date, no services have been provided and no fees have been charged or paid under this service agreement. The term of the service agreement with BLIC ends on June 1, 2001, but may be terminated at any time by BLIC upon 90 days prior written notice. TECHNICAL SUPPORT SERVICES AGREEMENT In April, 1999, the Company entered into a Technical Support Services Agreement (the "Old Support Agreement") with BIG pursuant to which the Company provided BIG with certain system development services. Under the Old Support Agreement, such services were charged to BIG on a time and materials basis. The total service fees charged to BIG under the Old Support Agreement during the years ended December 31, 1999 and 2000 totaled $1.3 million and $0, respectively. Pursuant to the Letter Agreement described below, 44 47 the Old Support Agreement was terminated effective April 1, 2001 and will be replaced, effective June 1, 2001, with a new Technical Support Services Agreement (the "New Support Agreement"). Pursuant to the New Support Agreement, BIG will provide certain technical support services to the Company. See "Certain Relationships and Related Transactions -- Letter Agreements." LETTER AGREEMENTS On April 13, 2001, the Company entered into a Letter Agreement with BIG, BIC, BSIC and FCIC (the "Letter Agreement") pursuant to which the various contractual arrangements between the Company and such affiliated entities will be significantly altered as described below. With respect to the Administration Agreement, the Letter Agreement provides that the existing Administration Agreement was terminated effective as of April 1, 2001 and will be replaced effective June 1, 2001 with a new Corporate Services Agreement (the "Corporate Services Agreement"). Pursuant to the Corporate Services Agreement, BIG will provide the Company with various corporate marketing (including graphic design and web-site development) and corporate training services requested by the Company from time to time at fixed hourly rates ranging from $40 to $100 per hour, depending on the service being provided. The Letter Agreement provides that the parties will negotiate in good faith to execute and deliver the Corporate Services Agreement incorporating these terms on or before June 1, 2001; provided, however, that in the event such agreement is not executed and delivered by that date, BIG will provide such services at the rates specified in the Letter Agreement. The Letter Agreement further provides that the Old Support Agreement was terminated effective April 1, 2001 and will be replaced, effective June 1, 2001, with the New Support Agreement. Pursuant to the New Support Agreement, BIG will provide the Company with certain technical support, computer programming and systems analysis services at specified rates (except for software development services, which shall be provided on a time and materials basis). With respect to the Service Agreements, the Letter Agreement provides that each of such agreements shall be amended, effective June 1, 2001, to (i) postpone the expiration date of the agreement from June 1, 2001 until December 1, 2002, (ii) modify the service fees payable thereunder with respect to policy and claim administration services to be provided in connection with certain lines of business, (iii) eliminate data and technical support services from the administrative services to be provided by the Company under the agreement, and (iv) assess a fixed monthly fee for usage of the Company's AS 400 computer system. With respect to the service fee modifications, under the Service Agreements, as amended, each entity will pay the Company (1) a monthly fee based upon direct written premiums for policy administration services relating to its flood, homeowners and commercial lines of business and (2) a monthly fee based upon net claims (after deductibles) for claims administration services relating to its flood line of business. The service fees payable under the Service Agreements with respect to (a) policy administration services relating to the automobile line of business, and (b) claims administration services relating to all lines of business other than flood, shall remain unchanged. If such amendments to the Service Agreements had been in effect for the fiscal year ended December 31, 2000, the Company's affiliated outsourcing revenues, which totaled approximately $38 million on an actual basis, would have been approximately $30 million on a pro forma basis. The Company believes that any anticipated reduction in affiliated outsourcing revenues resulting from the implementation of such service fee changes will be largely offset by a corresponding reduction in operating costs as a result of, among other things, the elimination of data and technical support services from the administration services to be provided by the Company under the Service Agreements, although no assurances can be given in this regard. On April 13, 2001, the Company entered into a Commitment Letter to advance service fee payments (the "Commitment Letter") with BIG pursuant to which BIG has agreed to advance to the Company up to $1.5 million per month as a prepayment of service fees due by BIG and its affiliates under the Service Agreements. Such advances are available to the Company beginning June 1, 2001 continuing through December 1, 2002 and shall be payable upon demand by the Company. Any funds advanced by BIG to the Company under the Commitment Letter shall constitute a prepayment of, and shall be credited toward, the service fees charged to BIG by the Company during the month following such advance. 45 48 PROPERTY LEASES The Company currently leases from BIC approximately 84,200 square feet of office space in St. Petersburg, Florida at a monthly rate of approximately $108,000. During the year-ended December 31, 2000, the Company paid BIC approximately $1.4 million under this lease. The current term of this lease expires on December 31, 2001. The Company anticipates that, in connection with the transactions contemplated by the Letter Agreement, a portion of the leased premises will be sublet back to BIG, although no assurances can be given in this regard. The Company currently leases from BIG approximately 4,600 square feet of office space in St. Petersburg, Florida at a monthly rate of approximately $5,100. During the year-ended December 31, 2000, the Company paid BIG approximately $106,000 under this lease. The current term of this lease also expires on December 31, 2001. Effective January 1, 1998, BIG assigned to the Company a lease of approximately 6,600 square feet of office space in St. Petersburg, Florida. This lease expired on December 31, 2000 and was not renewed. During the year ended December 31, 2000, the Company paid approximately $71,000 under this lease to the third-party lessor. EMPLOYEE LEASING AGREEMENT Effective as of January 1, 1998, the Company entered into an Employee Leasing Agreement with BIC (the "Employee Leasing Agreement") pursuant to which the Company continued to lease various personnel, including customer service personnel, from BIC. The number of employees leased varied depending on the needs of the Company and the availability of employees from BIC. The Company was responsible for all expenses associated with such leased employees, including salaries, bonuses and benefits. Effective April 1, 2000, the Employee Leasing Agreement was terminated, at which time all such leased employees became direct employees of the Company. SALES AND ASSIGNMENT AGREEMENT In May, 1998, the Company entered into a sales and assignment agreement with BIG and certain affiliated companies whereby certain assets were transferred and assigned to the Company, effective retroactively to April, 1998, for use in its business. The assets, including, but not limited to, telephone equipment, computer hardware and software, and service marks were transferred at their net book value as of the date of transfer. The Company paid consideration consisting of $325,075 in cash and entered into two promissory notes amounting to $2,802,175. The notes were repaid in full in February, 2000 out of the net proceeds to the Company from its initial public offering. In addition, the Company assumed the existing leases with unaffiliated third parties relating to various computer equipment. The Company anticipates that, in connection with the transactions contemplated by the Letter Agreement, certain assets of the Company will be sold to BIG, although no assurances can be given in this regard. SOFTWARE LICENSING AGREEMENT Effective January 1, 1998, the Company entered into a non-exclusive license agreement with BIG and BIC pursuant to which the Company licenses its primary operating systems from BIG and BIC in exchange for a nominal fee. The term of the license is perpetual. The license agreement provides that the Company shall be solely responsible for maintaining and upgrading the systems and shall have the authority to sell or license such systems to third parties. IMS DIRECT SALE Effective July 31, 2000, IMS Direct, Inc. ("IMS Direct"), a wholly-owned subsidiary of the Company, and Bankers Insurance Services, Inc. ("BIS"), a wholly-owned subsidiary of BIG, entered into an Asset Purchase Agreement pursuant to which IMS Direct sold substantially all of its assets to BIS. In exchange, BIS paid IMS Direct $2,463 and assumed substantially all of the liabilities of IMS Direct. Additionally, all of 46 49 the employees of IMS Direct, consisting of approximately 10 persons, ceased to be employees of the Company as of July 31, 2000 and became employees of BIS. TAX INDEMNITY AGREEMENT As of July 31, 1998, BIG had sold a sufficient number of shares in the Company such that the Company will no longer file its tax return with Bankers International Financial Corporation ("BIFC") on a consolidated basis. Effective as of July 31, 1998, the Company and BIFC entered into a Tax Indemnity Agreement pursuant to which (i) BIFC agrees to indemnify the Company in the event the Company incurs a tax liability as a result of taxable income of BIFC or one of its subsidiaries, and (ii) the Company agrees to indemnify BIFC in the event BIFC incurs a tax liability as a result of taxable income of the Company or one of its subsidiaries. Each party also agrees to reimburse the other by certain tax credits arising on or before July 31, 1998. Under the Tax Indemnity Agreement, the parties terminated a previous tax allocation agreement which had been in effect since October 1, 1993. GEOTRAC TRANSACTIONS DJWW Corp., an Ohio corporation, was formed in June, 1987 by Daniel J. White ("Mr. White"), the corporation's president and sole shareholder. In May, 1991, the corporation changed its name to Geotrac, Inc. In August, 1994, Geotrac, Inc. sold substantially all of its assets to SMS Geotrac, Inc., a Delaware corporation ("SMS Geotrac"), for a purchase price of $1,000,000 in cash, plus a contingent payment based on net profits after taxes for the fiscal year ended June 30, 1995. SMS Geotrac was a wholly-owned subsidiary of Strategic Holdings USA, Inc. ("Strategic"). During the year ended June 30, 1996 and on July 30, 1997, SMS Geotrac made payments of $932,222 and $1,700,000, respectively to Mr. White in satisfaction of the contingent payment obligations under the acquisition agreement. The amounts were recorded as an increase to goodwill and an additional capital contribution to SMS Geotrac. In connection with the sale of assets to SMS Geotrac, Mr. White became the president of SMS Geotrac and received a four-year employment contract at a base salary of $100,000 per year. In September, 1994, Geotrac, Inc. changed its name to YoSystems, Inc. During the year ended June 30, 1997, SMS Geotrac and Strategic agreed to treat all outstanding amounts owed to the parent, $1,611,140, as an additional capital contribution. In addition, Strategic contributed $500,000 to SMS Geotrac. During the one-month period ended July 31, 1997, SMS Geotrac advanced $797,000 to YoSystems, Inc. In July, 1997, YoSystems acquired all of the issued and outstanding shares of capital stock of SMS Geotrac from Strategic for $15,000,000 in cash. The purchase price was funded through an $8.75 million loan from Huntington National Bank to YoSystems ($8.25 million of which was used in the purchase) plus $6.75 million in cash paid by the Company in connection with its acquisition of a 49% interest in YoSystems, as described below. Thereafter, the Company assumed the loan from Huntington National Bank, which loan has since been repaid from proceeds received in the Company's initial public offering. Neither YoSystems nor Mr. White, its president and sole shareholder, had a preexisting right to acquire SMS Geotrac pursuant to the August, 1994 transaction. The purchase price of the SMS Geotrac stock was determined by arm's length negotiations. After the stock purchase transaction, SMS Geotrac merged into YoSystems, with YoSystems being the surviving entity and changing its name back to Geotrac, Inc. Concurrent with the acquisition of SMS Geotrac by YoSystems, the Company, through a subsidiary, Bankers Hazard Determination Services, Inc. ("BHDS"), purchased a 49% interest in YoSystems for $6,750,000 in cash. At that time, the Company did not contemplate acquiring the remaining 51% of YoSystems, Inc. In connection with the Company's purchase of a 49% interest in YoSystems, BHDS issued 675,000 shares of non-cumulative 8% preferred stock to Heritage Hotel Holding Company ("Heritage"), a corporation owned by Richard M. Brubaker, the half brother of Robert M. Menke, a director of the Company. The preferred stock of BHDS issued to Heritage had a par value of $10 per share and was subject to redemption at the option of the board of directors of BHDS. The preferred stock could be redeemed at any time at a price equal to 108% of the original consideration paid for the stock by the shareholder plus the amount of the 47 50 dividends declared and unpaid on the redemption date Heritage funded the preferred stock purchase by entering into a note agreement with a commercial bank for $6,750,000, with the preferred stock serving as collateral. On May 8, 1998, the Company purchased the outstanding preferred stock of BHDS in exchange for a note to Heritage in the principal amount of $6,750,000. The note was repaid in full in February, 2000 out of the net proceeds to the Company from its initial public offering. After May 8, 1998, the preferred stock of BHDS held by the Company was exchanged for 675,000 shares or 8.5% cumulative preferred stock of BHDS. The shares of non-cumulative 8% preferred stock were then retired. Dividends declared on the preferred stock for l997 and 1998 were $229,315 and $189,370, respectively. In July, 1998, the Company acquired the remaining 51% equity interest in Geotrac, Inc. (formerly YoSystems) pursuant to the merger of Geotrac, Inc. with and into BHDS, with the surviving entity being known as "Geotrac of America, Inc." The Company acquired the remaining 51% interest from Mr. White and his wife and certain minority shareholders in exchange for (i) 524,198 shares of Common Stock, (ii) a promissory note in the principal amount of $1,500,000 bearing interest at a rate of 8.5%, and (iii) cash in the amount of $728,069 (paid in December, 1998), for a total purchase price of $7,994,000. In addition, the Company assumed the loan in the original principal amount of $8,750,000 from Huntington National Bank made to YoSystems in July, 1997. As described above, the loan from Huntington Bank was repaid from proceeds received in the Company's initial public offering. In connection with this transaction, Geotrac of America, Inc. entered into an employment agreement with Mr. White pursuant to which Mr. White serves as the President and Chief Executive Officer of Geotrac of America, Inc. In addition, the Company entered into a Corporate Governance Agreement with Mr. White and Geotrac setting forth certain terms and conditions upon which Geotrac continues to operate following the merger. The Corporate Governance Agreement provides, in part, that for so long as Mr. White owns stock in the Company or Geotrac, or has an option to purchase stock in Geotrac, (i) the Company will vote all of its shares in Geotrac to fix and maintain the number of directors on the Geotrac Board of Directors at five, (ii) the Company will vote its shares in Geotrac to elect as directors of Geotrac two persons designated by Mr. White, (iii) the termination of Mr. White as an employee of Geotrac will require the vote of four out of five members of the Board of Directors, and (iv) certain actions by Geotrac will require the unanimous approval of the Geotrac Board of Directors, including any merger or consolidation, the payment of management or similar fees to the Company or its subsidiaries and affiliates, the sale or issuance of Geotrac stock, and the sale of Geotrac assets outside the ordinary course of business to anyone other than an affiliate of Geotrac. Among the actions requiring such unanimous board approval under the Corporate Governance Agreement is the making of cash distributions to the Company, whether by dividend or otherwise. Therefore, pursuant to the Corporate Governance Agreement, Mr. White may impede the Company's ability to access excess cash balances retained by its Geotrac subsidiary, even if all of the other directors of Geotrac were to approve the distribution thereof to the Company. Mr. White is presently a director and shareholder of the Company. Mr. White also has a right of first refusal to purchase the assets of Geotrac in the event such assets are to be sold. The board of directors of Geotrac of America, Inc. consists of five members: Robert M. Menke (Chairman), David K. Meehan, David M. Howard, Daniel J. White and John Payne. Pursuant to his rights under the Corporate Governance Agreement, Mr. White appointed himself and Mr. Payne as nominees to such board. Mr. Howard is currently an executive officer the Company and the former President of BHDS. Geotrac currently leases a 12,400 square-foot facility in Norwalk, Ohio from DanYo LLC, a limited liability company wholly owned by Daniel J. White and his spouse. This lease, which was renewed effective September 1, 1999, is for a term of five years, expiring on August 31, 2004, and provides for monthly rental payments of approximately $10,448, plus payment of utilities, real estate taxes and assessments, insurance, repairs and similar expenses. PHANTOM STOCK PLANS During the year ended December 31, 2000, the Company recognized approximately $338,000 in compensation expense (of which approximately $145,000 relates to 1999) resulting from the vesting of benefits payable to certain current and former officers and directors of the Company under the Amended and 48 51 Completely Restated Phantom Stock Plan (the "BFC Plan") of Bankers Financial Corporation ("BFC"), the parent corporation of BIG, and the Amended and Restated Phantom Stock Plan (the "VCC Plan") of Venture Capital Corporation ("VCC"). The foregoing compensation charge is a non-recurring, non-cash item to the Company, as all such benefits under such plans were fully vested as of September 30, 2000 and constitute the respective obligations of BFC and VCC, not the Company. Effective September 30, 2000, the BFC and VCC Plans were amended to provide for, among other things, immediate vesting of benefits payable thereunder to certain current and former officers and directors of the Company. Accordingly, as of September 30, 2000, the total discounted and non-discounted benefits payable under these plans, which have accrued since February 11, 1999, the date of the Company's initial public offering (the "IPO Date"), totaled $327,000 and $894,000, respectively, for the BFC Plan and $12,000 and $43,000, respectively, for the VCC Plan. Benefits under each of such plans generally are payable in 120 equal installments beginning at age 60. Although resulting in a compensation expense (on a discounted basis) to the Company, all of such benefits under such plans were granted on or before the IPO Date and constitute the respective obligations of BFC and VCC, not the Company. The benefits described herein exclude amounts vested prior to the IPO Date and/or allocable to services provided to BIG or its affiliated entities (other than the Company or its subsidiaries) since the IPO Date. The aggregate amount (on a non-discounted basis) in benefits payable to each of the Company's current and former executive officers and directors of the Company under the BFC Plan and the VCC Plan, respectively, and which have accrued from the IPO Date through September 30, 2000, are as follows: David K. Meehan, $0 and $0; David M. Howard, $247,515 and $25,523; Robert G. Gantley, $217,583 and $0; Christopher P. Breakiron, $0 and $0; Daniel J. White, $0 and $0; Kathleen M. Batson, $43,348 and $6,160; John A. Grant, Jr., $154,100 and $9,210; William D. Hussey, $100,000 and $0; E. Ray Solomon, $100,000 and $0; and Alejandro M. Sanchez, $0 and $0. The foregoing benefits exclude amounts vested prior to the IPO Date and/or allocable to services provided to BIG or its affiliated entities (other than the Company or its subsidiaries) since the IPO Date. Except as set forth below, since the IPO Date, no officers or directors of the Company have been eligible to receive additional grants under such phantom stock plans or have been subject to future allocations of profits or losses with respect thereto. In addition, except as set forth below, all current officers and directors of the Company were fully vested, as of September 30, 2000, in all benefits under such plans. Notwithstanding the foregoing, Robert G. Menke, a director of the Company, and David K. Meehan, Chairman of the Board of the Company, will continue to be eligible to receive grants, vest in benefits received and share in profits and losses under such plans in their capacity as officers and directors of BIG and its affiliated entities. MISCELLANEOUS In February, 1999, Western International Insurance Company, a wholly-owned subsidiary of VCC and presently a more than 5% shareholder of the Company, loaned $12.0 million to BIG in exchange for a subordinated note. This loan was funded by using a portion of the net proceeds received by VCC in the Company's initial public offering. BIG, in turn, used a portion of such loan proceeds to satisfy a note payable (including accrued interest) to the Company which totaled $5,322,455. The balance of the loan proceeds will provide BIG with additional capital to repay other outstanding indebtedness and expand its operations. The Company, in turn, used the funds received from BIG, together with a portion of the net proceeds from its initial public offering, to satisfy $7,054,996 in accounts, income taxes and notes payable (including accrued interest) payable to BIG. The Audit Committee of the Board of Directors is responsible for reviewing all future transactions between the Company and any officer or director of the Company or any entity in which an officer of director has a material interest. Any such transactions must be on terms no less favorable than those that could be obtained on an arm's-length basis from independent third parties. 49 52 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) List of documents filed as part of this report: (1) Financial Statements. Insurance Management Solutions Group, Inc. Consolidated Financial Statements. Report of Independent Certified Public Accountants. Consolidated Balance Sheets as of December 31, 1999 and 2000. Consolidated Statements of Income for the years ended December 31, 1998, 1999 and 2000. Consolidated Statement of Shareholders' Equity for the years ended December 31, 1998, 1999 and 2000. Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000. Notes to Consolidated Financial Statements. (2) Financial Statement Schedules. Report of Independent Certified Public Accountants on Schedule 1. Schedule 1 -- Condensed Financial Information of Registrant. Notes to Condensed Financial Information of Registrant. (3) Exhibits.
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 3.1 -- Amended and Restated Articles of Incorporation of Insurance Management Solutions Group, Inc.* 3.2 -- Amended and Restated Bylaws of Insurance Management Solutions Group, Inc.* 4.1 -- Specimen certificate for the Common Stock of Insurance Management Solutions Group, Inc.* 10.1 -- Employment Agreement, dated August 10, 1998, between David K. Meehan and Insurance Management Solutions Group, Inc.* 10.2 -- Insurance Management Solutions Group, Inc. Long Term Incentive Plan.* 10.3 -- Insurance Management Solutions Group, Inc. Non-Employee Directors' Stock Option Plan.* 10.4 -- Snell Arcade Building Lease, dated May 15, 1996, between Snell Arcade Limited Company and Bankers Insurance Group, Inc., as revised and assigned to Insurance Management Solutions Group, Inc., effective January 1, 1998.* 10.5 -- Bankers Building -- 5th Street North Lease Agreement, dated January 1, 1997, between Bankers Insurance Group, Inc. and Insurance Management Solutions Group, Inc.*
50 53
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.6 -- Bankers Financial Center Lease Agreement, dated January 1, 1997, between Bankers Insurance Company and Insurance Management Solutions Group, Inc.* 10.7 -- Lease, dated September 2, 1994, between DanYo LLC (as successor to Sandan) and SMS Geotrac, Inc.* 10.8 -- Indenture of Lease, dated September 23, 1994, between Southview Business Center, Ltd., an Ohio limited partnership, and SMS Geotrac, Inc., including Addendum I, dated March 20, 1995, and Addendum II, dated December 8, 1995.* 10.9 -- Master Equipment Lease Agreement, dated May 11, 1995, and executed on May 15, 1995, between National City Leasing Corporation and SMS Geotrac, Inc.* 10.10 -- Term Lease Master Agreement, dated June 30, 1995, between IBM Credit Corporation and SMS Geotrac, Inc.* 10.11 -- Employment Agreement, dated June 11, 1998, between Jeffrey S. Bragg and Insurance Management Solutions Group, Inc.* 10.12 -- Administration Services Agreement, dated January 1, 1998, between Bankers Insurance Group, Inc. and Insurance Management Solutions Group, Inc., including Addendum to Administration Services Agreement, dated December 2, 1998 and effective January 1, 1998, and Addendum to Administration Services Agreement, effective January 1, 1999.* 10.13 -- Service Agreement, dated January 1, 1998, between Insurance Management Solutions, Inc. and Bankers Insurance Company, including Addendum dated April 1, 1998 and form of Addendum to Service Agreements effective January 1, 1999.* 10.14 -- Service Agreement dated January 1, 1998 between Insurance Management Solutions, Inc. and Bankers Security Insurance Company, including form of Addendum to Service Agreements effective January 1, 1999. * 10.15 -- Service Agreement dated January 1, 1998 between Insurance Management Solutions, Inc. and First Community Insurance Company, including form of Addendum to Service Agreements effective January 1, 1999. * 10.16 -- Vendor Flood Insurance Agreement, dated January 1, 1996, between Insurance Management Solutions, Inc. (as successor to Insurance Management Information Services, Inc.) and Mobile USA Insurance Company, Inc.* 10.17 -- Vendor Flood Insurance Agreement, dated November 10, 1995, between AAA Auto Club South Insurance Company and Insurance Management information Services, Inc.* 10.18 -- Flood Insurance Program Services Agreement by and among Insurance Management Information Services, Inc., American Alternative Insurance Corporation, and Corporate Insurance Agency Services.* 10.19 -- Agreement and Plan of Merger, dated May 12, 1998, by and among Geotrac, Inc., Insurance Management Solutions, Inc., Daniel J. and Sandra White, Bankers Insurance Group, Inc. and Bankers Hazard Determination Services, Inc.* 10.20 -- Employment Agreement, dated July 31, 1998, between Geotrac of America, Inc. (as successor to Geotrac, Inc.) and Daniel J. White.* 10.21 -- Term Lease Master Agreement, dated August 6, 1996, between IBM Credit Corporation and Bankers Insurance Company, assigned by flankers Insurance Company to Insurance Management Solutions, Inc., effective April 1, 1998, pursuant to Sales and Assignment Agreement, dated May 6, 1998.*
51 54
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.22 -- Sales and Assignment Agreement, dated May 6, 1998, by and between Insurance Management Solutions Group, Inc., Insurance Management Solutions, Inc., Bankers Insurance Group, Inc., Bankers Insurance Services, Inc., Bankers Life Insurance Company, Southern Rental & Leasing Corporation, Bankers Insurance Company and Insurance Management Information Services, Inc.* 10.23 -- Corporate Governance Agreement, dated July 31, 1998, between Geotrac, Inc., Daniel J. White and Insurance Management Solutions Group, Inc.* 10.24 -- Tax Indemnity Agreement dated July 31, 1998 between Bankers Insurance Group, Inc., Insurance Management Solutions Group, Inc. and Daniel J. and Sandra White.* 10.25 -- Flood Insurance Agreement, dated January 6, 1998, between First Community Insurance Company and Keystone Insurance Company.* 10.26 -- Marketing Agreement, dated November 14, 1997, between First Community Insurance Company and Nobel Insurance Company.* 10.27 -- Flood Insurance Agreement, dated February 11, 1998, between First Community Insurance Company and Horace Mann Insurance Company.* 10.28 -- Flood Compliance Service Agreement dated November 1, 1996, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and Mortgage Corporation of America.* 10.29 -- Flood Compliance Service Agreement dated March 1, 1997, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and CitFed Mortgage Corporation of America.* 10.30 -- Flood Compliance Service Agreement dated March 1, 1998, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac), ABN AMRO North American and certain of its affiliates.* 10.31 -- Flood Compliance Service Agreement dated April 12, 1997, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and Third Federal Savings.* 10.32 -- Flood Compliance Service Agreement dated April 9, 1997, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and MidAm, Inc.* 10.33 -- Flood Compliance Service Agreement dated December 28, 1995, between Geotrac of America, Inc. (as successor to Geotrac, Inc.) and Crestar Bank.* 10.34 -- Flood Compliance Service Agreement dated April 1, 1996, between Geotrac of America, Inc.(as successor to Geotrac, Inc. and SMS Geotrac) and ReliaStar Mortgage Corporation.* 10.35 -- Flood Zone Determination Agreement dated March 25, 1993, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and National Flood Certification Services, Inc.) and AIG Consultants, Inc.* 10.36 -- Flood Zone Determination Agreement dated December 28, 1995, between Geotrac of America, Inc. (as successor to Bankers Hazard Determination Services, Inc.) and SouthTrust Corporation, as amended on June 3, 1997.* 10.37 -- Flood Zone Determination Agreement dated July 14, 1994, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and National Flood Certification Services, Inc.) and SunBank, N.A.* 10.38 -- Flood Zone Determination Agreement dated November 8, 1993, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and National Flood Certification Services, Inc.) and Royal Indemnity Company.* 10.39 -- Flood Insurance Agreement, dated February 17, 1995, between First Community Insurance Company and Armed Forces Insurance Exchange, as amended.*
52 55
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.40 -- Flood Insurance Agreement, dated November 17, 1995, between First Community Insurance Company and Amica Mutual Insurance Company, as amended.* 10.41 -- Non-Qualified Stock Option Plan.* 10.42 -- Funding Agreement, dated June 19, 1998, by and between Bankers Insurance Group, Inc. and Insurance Management Solutions Group, Inc.* 10.43 -- Assignment of Registered Service Mark ("Floodwriter"), dated May 7, 1998, from Bankers Insurance Company to Insurance Management Solutions, Inc.* 10.44 -- Assignment of Registered Service Mark ("Undercurrents"), dated May 7, 1998, from Bankers Insurance Company to Insurance Management Solutions, Inc.* 10.45 -- Registration Rights Agreement, dated July 31, 1998, between Insurance Management Solutions Group, Inc. and Daniel J. and Sandra White.* 10.46 -- Software License Agreement, effective January 1, 1998, between Insurance Management Solutions, Inc., Bankers Insurance Group, Inc. and Bankers Insurance Company.* 10.47 -- Tax Indemnity Agreement dated July 31, 1998 between Insurance Management Solutions Group, Inc., Insurance Management Solutions, Inc. and Geotrac of America, Inc., including Addendum dated July 31, 1998.* 10.48 -- Tax Allocation Agreement dated July 31, 1998 between Insurance Management Solutions Group, Inc., Insurance Management Solutions, Inc. and Geotrac of America, Inc., including Addendum dated July 31, 1998.* 10.49 -- Articles of Merger filed with the Florida Department of State relating to the merger between Bankers Hazard Determination Services, Inc. and Geotrac, Inc.* 10.50 -- Certificate of Merger filed with the Ohio Department of State relating to the merger between Bankers Hazard Determination Services, Inc. and Geotrac, Inc.* 10.51 -- Secrecy and Confidentiality Agreement, dated October 8, 1993, between Geotrac of America, Inc. (formerly Geotrac, Inc.) and Kirloskar Computer Services, Ltd.* 10.52 -- Service Agreement dated December 1, 1998 between Insurance Management Solutions, Inc. and Bankers Life Insurance Company, including Addendum to Service Agreements dated December 11, 1998 and effective January 1, 1999* 10.53 -- Stock Purchase Agreement, dated July 31, 1997, between YoSystems, Inc., Bankers Hazard Determination Services, Inc. and Daniel J. and Sandra White.* 10.54 -- AYO Claims Agreement between Florida Windstorm Underwriting Association and Bankers Insurance Group, Inc., dated February, 1998.* 10.55 -- Assignment of AYO Claims Agreement among Bankers Insurance Group, Inc., Bankers Insurance Company and Florida Windstorm Underwriting Association dated December 15, 1998.* 10.56 -- Software Transfer Agreement dated September 1, 1998 by and among Bankers Insurance Group, Inc., Bankers Insurance Company, Insurance Management Solutions, Inc., and First Community Insurance Company.* 10.57 -- Registration Rights Agreement dated January, 1999, between Insurance Management Solutions Group, Inc. and J. Douglas Branham and Felicia A. Rivas.* 10.58 -- Stock Purchase Agreement dated December 10, 1998 between Colonial Catastrophe Claims Corporation, J. Douglas Branham, Felicia A. Rivas, and Insurance Management Solutions Group, Inc., including Addenda thereto.* 10.59 -- Loan Agreement dated December 16, 1998 between Bankers Insurance Group, Inc. and Western International Insurance Company.*
53 56
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.60 -- Promissory Note of Bankers Insurance Group, Inc. in favor of Western International Insurance Company* 10.61 -- Agreement for Satisfaction of Debt and Capitalization of Subsidiary dated December 16, 1998 between Venture Capital Corporation and Western International Insurance Company.* 10.62 -- Plan of Merger dated January 7, 1999 and effective January 15, 1999 between IMS Colonial, Inc. and Colonial Catastrophe Claims Corporation.* 10.63 -- Flood Insurance Services Agreement, dated January 14, 1999, by and between Insurance Management Solutions Group, Inc. and Farmers Services Corporation.* 10.64 -- Funding Agreement, dated February 16, 1999, by and between Bankers Insurance Group, Inc., Bankers Insurance Company, Venture Capital Corporation and Western International Insurance Company.** 10.65 -- Flood Insurance Services Agreement, dated October 23, 1998, by and between Insurance Management Solutions, Inc. and Middlesex Mutual Assurance Company.** 10.66 -- Flood Insurance Services Agreement, effective January 13, 1999, by and between Insurance Management Solutions, Inc. and Island Insurance Companies, Ltd.** 10.67 -- Lease Agreement, dated February 1, 1999, by and between Colonial Real Estate of Dunedin, Inc. and Colonial Claims Corporation.** 10.68 -- Second Addendum to Service Agreements, effective as of April 1, 1999, by and between Insurance Management Solutions, Inc. and each of Bankers Insurance Company, First Community Insurance Company and Bankers Security Insurance Company.*** 10.69 -- Technical Support Services Agreement, dated April 1, 1999, by and between Insurance Management Solutions, Inc. and Bankers Insurance Group, Inc. and its subsidiaries.*** 10.70 -- Lease Agreement, dated September 27, 1999, by and between Koger Equity, Inc. and Insurance Management Solutions Group, Inc.**** 10.71 -- Insurance Administration Services Agreement, effective as of May 3, 2000, by and between Insurance Management Solutions, Inc. and Reliance Insurance Company.***** 10.72 -- Insurance Administration Services Agreement, effective as of June 30, 2000, by and between Insurance Management Solutions, Inc. and Instant Insurance Holding, Inc.***** 10.73 -- Development Services Agreement, effective as of June 30, 2000, by and between Insurance Management Solutions, Inc. and Instant Insurance Holding, Inc.***** 10.74 -- Insurance Administration Services Agreement (Interim), effective as of June 22, 2000, by and between Insurance Management Solutions, Inc. and Instant Insurance Holding, Inc.***** 10.75 -- Insurance Administration Services Agreement Termination and Interim Services Addendum, effective as of August 1, 2000, by and between Insurance Management Solutions, Inc., International Catastrophe Insurance Managers, LLC and Clarendon National Insurance Company, including all schedules and exhibits thereto.****** 10.76 -- Insurance Management Solutions Group, Inc. 2000 Stock Incentive Plan 10.77 -- Insurance Management Solutions Group, Inc. 2000 Non-Employee Director Stock Plan 10.78 -- Employment Agreement, dated August 19, 1998, between Robert G. Gantley and Insurance Management Solutions, Inc. 10.79 -- Release and Separation Agreement, dated April 12, 2001, between Christopher P. Breakiron and Insurance Management Solutions Group, Inc. 10.80 -- Consulting Agreement, dated April 12, 2001, between Christopher P. Breakiron and Insurance Management Solutions Group, Inc.
54 57
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.81 -- Asset Purchase Agreement, including Indemnification Agreement, Bill of Sale and Assignment of Flood Monitoring Agreement, effective July 31, 2000, between IMS Direct, Inc. and Bankers Insurance Services, Inc. 10.82 -- Letter Agreement, dated April 13, 2001, by and between Insurance Management Solutions, Inc., Bankers Insurance Group, Inc., Bankers Insurance Company, First Community Insurance Company and Bankers Security Insurance Company. 10.83 -- Settlement Agreement, dated February 20, 2001, by and between Instant Insurance Holdings, Instant Auto Insurance Company and Insurance Management Solutions, Inc. 10.84 -- Commitment Letter to advance service fee payments, dated April 13, 2001, between Insurance Management Solutions, Inc. and Bankers Insurance Group, Inc. 21.1 -- List of subsidiaries of Insurance Management Solutions Group, Inc.* 24.1 -- Power of Attorney relating to subsequent amendments (included on signature page hereto).
- --------------- * Previously filed as part of the Company's Form S-1 Registration Statement (Reg. No. 333-57747) originally filed on June 28, 1998, as amended, and incorporated by reference herein. ** Previously filed as part of the Company's Annual Report on Form 10-K for the year ended December 31, 1998, and incorporated by reference herein. *** Previously filed as part of the Company's Form 10-Q for the quarter ended June 30, 1999, and incorporated by reference herein. **** Previously filed as part of the Company's Form 10-K for the year ended December 31, 1999, and incorporated by reference herein. ***** Previously filed as part of the Company's Form 10-Q for the quarter ended June 30, 2000, and incorporated by reference herein. ****** Previously filed as part of the Company's Form 10-Q for the quarter ended September 30, 2000, and incorporated by reference herein. Exhibits 10.1, 10.2, 10.3, 10.11, 10.20, 10.41, 10.76, 10.77, 10.78, 10.79 and 10.80 represent management contracts and compensatory plans. (b) Reports on Form 8-K. The Company filed a Report on Form 8-K on November 29, 2000 reporting that it had received notification from The Nasdaq Stock Market that the Company's common stock would be delisted from trading on the Nasdaq National Market at the opening of business on February 22, 2001. Such notification indicated that this action was being taken by Nasdaq as a result of the failure of the Company's Common Stock to satisfy the maintenance criteria for continued listing on the Nasdaq National Market. 55 58 INDEX TO FINANCIAL STATEMENTS
PAGE ---- INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Certified Public Accountants........ 57 Consolidated Balance Sheets as of December 31, 1999 and 2000................................................... 58 Consolidated Statements of Operations for the years ended December 31, 1998, 1999 and 2000....................... 59 Consolidated Statement of Shareholders' Equity for the years ended December 31, 1998, 1999 and 2000........... 60 Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000............................................... 61 Notes to Consolidated Financial Statements................ 62 Report of Independent Certified Public Accountants on Schedule 1............................................. 85 Schedule 1 -- Condensed Financial Information of Registrant............................................. 86 Notes to Condensed Financial Information of Registrant.... 89
56 59 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors of Insurance Management Solutions Group, Inc. We have audited the accompanying consolidated balance sheets of Insurance Management Solutions Group, Inc. and subsidiaries as of December 31, 1999 and 2000, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Insurance Management Solutions Group, Inc. and subsidiaries as of December 31, 1999 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. GRANT THORNTON LLP Tampa, Florida April 13, 2001 57 60 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
DECEMBER 31, ------------------------- 1999 2000 ----------- ----------- ASSETS Current Assets: Cash and cash equivalents................................. $ 4,702,861 $ 5,192,161 Accounts receivable, net.................................. 3,621,714 3,789,288 Due from affiliates....................................... 2,920,543 2,615,699 Prepaid expenses and other assets......................... 1,572,976 1,573,037 ----------- ----------- Total current assets.............................. 12,818,094 13,170,185 Property and equipment, net................................. 7,225,494 9,116,552 Other Assets: Goodwill, net............................................. 16,257,663 15,352,001 Customer contracts, net................................... 1,116,667 916,667 Deferred tax assets, net.................................. 1,063,366 682,081 Capitalized software costs, net........................... 976,225 1,044,846 Other..................................................... 33,398 483,216 ----------- ----------- Total assets...................................... $39,490,907 $40,765,548 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt......................... $ 481,637 $ 219,857 Accounts payable, trade................................... 990,495 2,370,825 Due to affiliates......................................... 12,833 -- Employee related accrued expenses......................... 2,294,858 1,693,823 Other accrued expenses.................................... 1,293,060 2,008,201 Income taxes payable...................................... 413,241 557,676 Deferred revenue.......................................... 214,891 -- ----------- ----------- Total current liabilities......................... 5,701,015 6,850,382 Long-term debt, less current portion........................ 219,857 -- Deferred revenue............................................ 684,915 802,578 Commitments and Contingencies Shareholders' Equity: Preferred Stock, $.01 par value; 20,000,000 shares authorized, no shares issued and outstanding........... -- -- Common Stock, $.01 par value; 100,000,000 shares authorized, 12,678,743 and 12,800,261 shares issued and outstanding at December 31, 1999 and 2000, respectively........................................... 126,787 128,002 Additional paid-in capital................................ 26,810,282 27,545,901 Retained earnings......................................... 5,948,051 5,438,685 ----------- ----------- Total shareholders' equity........................ 32,885,120 33,112,588 ----------- ----------- Total liabilities and shareholders' equity........ $39,490,907 $40,765,548 =========== ===========
The accompanying notes are an integral part of these consolidated statements. 58 61 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, --------------------------------------- 1998 1999 2000 ----------- ----------- ----------- Revenues: Outsourcing services -- affiliated.................... $36,068,944 $41,465,498 $37,943,501 Outsourcing services.................................. 1,989,306 10,702,732 7,973,651 Flood zone determination services..................... 24,454,558 18,540,543 16,137,943 Flood zone determination services -- affiliated....... 1,279,689 620,320 929,002 ----------- ----------- ----------- Total revenues................................ 63,792,497 71,329,093 62,984,097 ----------- ----------- ----------- Expenses: Cost of outsourcing services.......................... 26,874,609 37,427,886 36,766,042 Cost of flood zone determination services............. 11,131,254 8,102,234 7,664,052 Selling, general and administrative................... 8,381,290 11,856,833 11,205,336 Management services from Parent....................... 3,259,712 2,255,810 1,885,022 Deferred compensation (non-recurring item)............ 728,069 -- -- Depreciation and amortization......................... 4,311,011 5,498,007 5,342,099 ----------- ----------- ----------- Total expenses................................ 54,685,945 65,140,770 62,862,551 ----------- ----------- ----------- Operating Income........................................ 9,106,552 6,188,323 121,546 ----------- ----------- ----------- Minority Interest....................................... (472,803) -- -- ----------- ----------- ----------- Other Income (Expense): Interest income....................................... 455,995 349,680 288,715 Interest expense...................................... (2,194,353) (809,383) (70,244) ----------- ----------- ----------- Total other income (expense).................. (1,738,358) (459,703) 218,471 Income Before Provision for Income Taxes................ 6,895,391 5,728,620 340,017 Provision for Income Taxes.............................. 3,042,400 2,533,560 849,383 ----------- ----------- ----------- Net Income (Loss)....................................... $ 3,852,991 $ 3,195,060 $ (509,366) =========== =========== =========== Net Income (Loss) Per Common Share...................... $ .38 $ .26 $ (.04) =========== =========== =========== Weighted average common shares outstanding.............. 10,264,253 12,448,183 12,793,953 =========== =========== ===========
The accompanying notes are an integral part of these consolidated statements. 59 62 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
ADDITIONAL COMMON PAID-IN RETAINED STOCK CAPITAL EARNINGS TOTAL -------- ----------- ----------- ----------- Balance at December 31, 1997.................. $100,000 $ 69,991 $ -- $ 169,991 Cash dividends to Parent.................... -- -- (1,100,000) (1,100,000) Issuance of Common Stock as partial consideration for the acquisition of Geotrac, Inc............................. 5,242 5,760,939 -- 5,766,181 Net income.................................. -- -- 3,852,991 3,852,991 -------- ----------- ----------- ----------- Balance at December 31, 1998.................. 105,242 5,830,930 2,752,991 8,689,163 Issuance of Common Stock as partial consideration for the acquisition of Colonial Claims.......................... 1,545 1,698,455 -- 1,700,000 Initial public offering of Common Stock, net of offering costs........................ 20,000 19,143,897 -- 19,163,897 Compensation expense related to stock options issued to non-employees.......... -- 137,000 -- 137,000 Net income.................................. -- -- 3,195,060 3,195,060 -------- ----------- ----------- ----------- Balance at December 31, 1999.................. 126,787 26,810,282 5,948,051 32,885,120 Issuance of Common Stock in connection with earn-out computation for Colonial Claims acquisition.............................. 1,215 298,785 -- 300,000 Non-cash compensation expense related to phantom stock plans...................... -- 338,200 -- 338,200 Compensation expense related to stock options issued to non-employees.......... -- 98,634 -- 98,634 Net loss.................................... -- -- (509,366) (509,366) -------- ----------- ----------- ----------- Balance at December 31, 2000.................. $128,002 $27,545,901 $ 5,438,685 $33,112,588 ======== =========== =========== ===========
The accompanying notes are an integral part of these consolidated statements. 60 63 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, ---------------------------------------- 1998 1999 2000 ----------- ------------ ----------- Cash Flows from Operating Activities: Net income (loss)......................................... $ 3,852,991 $ 3,195,060 $ (509,366) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization........................... 4,311,011 5,498,007 5,342,099 Depreciation and amortization of Geotrac prior to July 1998 acquisition..................................... (712,990) -- -- Loss on disposal of property and equipment.............. 37,914 350,785 201,540 Minority interest in earnings of Geotrac, Inc........... (485,034) -- -- Write-off of deferred financing costs................... -- 244,752 -- Compensation expense related to non-employee stock options.............................................. -- 137,000 98,634 Non-cash compensation expense related to phantom stock plans................................................ -- -- 338,200 Deferred income taxes, net.............................. (382,191) (202,564) 381,285 Changes in assets and liabilities: Accounts receivable.................................. (238,449) 928,223 (167,574) Income taxes recoverable............................. (1,148,902) 1,148,902 -- Prepaid expenses and other assets.................... (574,122) (388,639) 108,867 Other assets......................................... (257,648) (199,673) (697,118) Accounts payable, trade.............................. 252,012 140,996 1,380,330 Employee related accrued expenses.................... (695,910) 490,181 (601,035) Other accrued expenses............................... 566,625 (446,468) 1,015,141 Income taxes payable................................. (2,443,058) 413,241 144,435 Deferred revenue..................................... 333,313 33,313 (97,228) ----------- ------------ ----------- Net cash provided by operating activities.......... 2,415,562 11,343,116 6,938,210 ----------- ------------ ----------- Cash Flows from Investing Activities: Acquisition of Geotrac, net of cash acquired.............. 2,797,008 -- -- Purchases of property and equipment....................... (1,613,518) (3,185,028) (5,789,690) Payment of acquisition debt............................... (1,420,530) (500,000) -- Issuance of notes receivable.............................. -- -- (560,000) Collection of notes receivable............................ -- -- 90,406 Acquisition of Colonial Claims, net of cash acquired...... -- 1,092 -- Payment of dividend to prior Colonial Claims shareholders............................................ -- (670,000) -- ----------- ------------ ----------- Net cash used in investing activities.............. (237,040) (4,353,936) (6,259,284) ----------- ------------ ----------- Cash Flows from Financing Activities: Net proceeds received from initial public offering........ -- 19,163,897 -- Repayment of debt......................................... (5,251,662) (9,795,989) (481,637) Cash dividends paid to Parent............................. (1,100,000) -- -- Repayment of affiliated notes and accrued interest........ -- (14,708,420) -- Collection of affiliated note and interest receivable..... -- 5,271,406 -- Net advances to (from) affiliates......................... 6,680,187 (4,086,080) 292,011 Deferred offering costs................................... (753,250) -- -- ----------- ------------ ----------- Net cash used in financing activities.............. (424,725) (4,155,186) (189,626) ----------- ------------ ----------- Increase in Cash and Cash Equivalents....................... 1,753,797 2,833,994 489,300 Cash and Cash Equivalents, beginning of period.............. 115,070 1,868,867 4,702,861 ----------- ------------ ----------- Cash and Cash Equivalents, end of period.................... $ 1,868,867 $ 4,702,861 $ 5,192,161 =========== ============ ===========
The accompanying notes are an integral part of these consolidated statements. 61 64 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 -- DESCRIPTION OF ORGANIZATION AND BUSINESS Insurance Management Solutions Group, Inc. ("IMSG") is a holding company that was incorporated in the State of Florida in December 1996 by its Parent, Bankers Insurance Group ("BIG" or the "Parent"), which contributed to IMSG two of its wholly-owned operating subsidiaries, Insurance Management Solutions, Inc. ("IMS") and Bankers Hazard Determination Services, Inc. ("BHDS"). In July 1997, the Company acquired a 49% interest in Geotrac, Inc. and, in July 1998 acquired the remaining 51% interest. Geotrac was subsequently merged into BHDS with the surviving company being known as Geotrac of America, Inc. ("Geotrac of America"). In January, 1999, the Company acquired Colonial Claims Catastrophe Corporation ("Colonial"). IMSG, IMS, Geotrac of America and Colonial are hereinafter collectively known as the "Company". The Company operates in two major business segments: providing outsourcing services to the property and casualty insurance industry with an emphasis on flood insurance; and providing flood zone determinations primarily to insurance companies and financial institutions. The Company's outsourcing services, which are provided by IMS and Colonial, include policy and claims administration (policy issuance, billing and collection functions, claims adjusting and processing) and information technology services. The Company's flood zone determination services are provided by Geotrac of America. The Company is substantially dependent on the business of its affiliated insurance companies under the common control of BIG as the Company derives a substantial portion of its revenue from outsourcing services provided to these affiliated companies and BIG. NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Insurance Management Solutions Group, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In 1998, the operations of Geotrac for the year ended December 31, 1998 are consolidated in the Company's statement of operations. The minority interest deduction in the statement of operations represents the net income of Geotrac allocable to the 51% interests held by the other stockholders during the six months ended June 30, 1998, prior to the Company acquiring the remaining 51% interest in Geotrac. USE OF ESTIMATES The preparation of the financial statements conforms with accounting principles generally accepted in the United States of America and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 1999 and 2000, cash equivalents consisted of U.S. Treasury bills, certificates of deposit and overnight repurchase agreements. 62 65 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ACCOUNTS RECEIVABLE TRADE AND CONCENTRATION OF CREDIT RISK Accounts receivable, trade represents amounts due from insurance companies and financial institutions related to flood zone determinations and claims adjusting services performed. Credit is granted to customers based on management's assessment of their credit worthiness. Customer deposits are required in certain instances. The allowance for doubtful accounts totaled approximately $250,000 and $232,000 as of December 31, 1999 and 2000, respectively. Net bad debt expense totaled $134,733, $301,813, and $195,634 during the years ended December 31, 1998, 1999, and 2000, respectively. PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are provided for using the straight-line method over the assets' estimated service lives. Accelerated methods are used for tax purposes. GOODWILL Goodwill is being amortized using the straight-line method over twenty years. The amortization period was determined based on various factors including the nature of the product or service provided, the Company's market position and historical and projected operating results. Accumulated amortization at December 31, 1999 and 2000 was $1,434,296 and $2,339,959, respectively. CUSTOMER CONTRACTS Customer contracts are being amortized using the straight-line method over seven years. The amortization period, which does not materially differ from the underlying contract lives, was determined based on historical and expected contract duration periods as well as the nature of the products and services provided. Accumulated amortization at December 31, 1999 and 2000 was $300,000 and $500,000, respectively. CAPITALIZED SOFTWARE COSTS In accordance with Statement of Position 98-1 "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"), the Company capitalizes certain qualifying software development costs incurred during the application development stage. Amortization is recorded using the straight-line method over the service life of the software or the term of the customer contract to which the software relates, which ranges from one to five years. Accumulated amortization at December 31, 1999 and 2000 was $247,497 and $518,055, respectively. IMPAIRMENT OF LONG-LIVED ASSETS The Company evaluates the recoverability of its long-lived assets (including goodwill) in accordance with Statement of Financial Accounting Standards No. 121, ("SFAS No. 121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". SFAS No. 121 requires long-lived assets to be reviewed for impairment whenever circumstances indicate that the carrying amount of an asset may not be recoverable. Factors considered include current operating results, trends, and anticipated undiscounted future cash flows. An impairment loss is recognized to the extent the sum of discounted (using the Company's incremental borrowing rate) estimated future cash flows (over a period of less than 20 years) expected to result from the use of the asset is less than the carrying value. No impairment exists for all periods presented. 63 66 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) REVENUE RECOGNITION AND DEFERRED REVENUE Outsourcing Services Revenues Revenue generated from outsourcing services is recognized as earned when services are provided. In 1998, the affiliated service agreements as they pertain to claims administration, resulted in deferred revenue totaling $214,891 being recorded as the related fees are billed and payable based on a percentage of the customers' earned premiums, which is in advance of a portion of the total claims expense that were expected to be incurred by the Company. During 1999, the Company determined that the majority of claims being settled on behalf of its affiliated customers were actually settled within or shortly after the expiration of the policy term for which the Company was receiving a service fee based upon the underlying earned premium. As such, during 1999, the Company discontinued its practice of deferring claims revenue and amortized the remaining deferred revenue balance, which totaled $214,891 as of December 31, 1999, ratably over the 2000 calendar year. Flood Zone Determination Revenues The Company's flood zone revenues are principally derived from flood zone determination services and life-of-loan monitoring services. Flood zone determinations involve the Company ascertaining and certifying to a property's flood zone classification. Revenues for these services are recognized upon completion of each flood zone determination, as each determination is completed within a short period of time. The Company receives an up-front, non-refundable fee to provide life of loan monitoring of flood zone determinations whereby the Company notifies its customers of changes in previously issued flood zone determinations. The Company defers a portion of the fee associated with this future obligation and amortizes these amounts using the straight-line method over the average life of the underlying loan, approximately seven years. INCOME TAXES The Company accounts for income taxes on the liability method, as provided by SFAS No. 109, "Accounting for Income Taxes." Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. An allowance is recognized when it is more likely than not that any or all of a deferred tax asset will not be realized. Deferred tax expense is the result of changes in deferred tax assets and liabilities. 64 67 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET INCOME (LOSS) PER COMMON SHARE Net income (loss) per common share, which represents both basic and diluted earnings per share ("EPS") since no dilutive securities were outstanding for all periods presented, is computed by dividing net income (loss) by the weighted average common shares outstanding. The following table reconciles the numerator and denominator of the basic and dilutive EPS computation:
YEAR ENDED DECEMBER 31, ------------------------------------- 1998 1999 2000 ---------- ---------- ----------- Numerator: Net income (loss)............................... $3,852,991 $3,195,060 $ (509,366) ========== ========== =========== Denominator: Weighted average number of Common Shares used in basic EPS.................................... 10,264,253 12,448,183 12,793,953 Diluted stock options........................... -- -- -- ---------- ---------- ----------- Weighted average number of Common Shares and diluted potential Common Shares used in diluted EPS.................................. 10,264,253 12,448,183 12,793,953 ========== ========== ===========
As of December 31, 1999 and 2000, options to purchase 453,500 and 594,000 shares, respectively, of Common Stock were outstanding but were not included in the computation of diluted earnings per share as the inclusion of such shares would have an anti-dilutive effect. STOCK BASED COMPENSATION The Company accounts for stock based compensation awards to its employees pursuant to Accounting Principles Board Opinion No. 25, "Accounting For Stock Issued to Employees", and its related interpretations which prescribe the use of the intrinsic value based method. However, the Company has adopted the disclosure requirements of SFAS No. 123, "Accounting for Stock Based Compensation." For awards for other than employees, the Company accounts for stock based compensation awards pursuant to the fair value based method of SFAS No. 123. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of the Company's financial instruments, which include cash and cash equivalents, accounts receivable, due from affiliates, accounts payable, due to affiliates and debt approximate fair value due to the short maturity of those instruments. The Company considers the fixed rate debt instruments to be representative of current market interest rates and, accordingly, the recorded amounts approximate their present fair market value. RECENT ACCOUNTING PRONOUNCEMENTS In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 summarizes the SEC's views in applying generally accepted accounting principles to revenue recognition. The adoption of SAB 101 had no impact on the Company's operating results or financial position. In April 2000, the FASB issued FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation" ("FIN 44"), which contains rules designed to clarify the application of Accounting Principles Board Opinion No. 25. FIN 44 became effective on July 1, 2000 at which time the 65 68 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Company adopted the interpretation. The adoption of FIN 44 had no impact on the Company's operating results and financial position. NOTE 3 -- ACQUISITIONS GEOTRAC, INC. On July 31, 1997, the Company, through its subsidiary, BHDS, invested cash in the amount of $6,750,000 in YoSystems in exchange for 490 shares of common stock issued by YoSystems, representing a 49% equity interest. On July 31, 1997, YoSystems concurrently acquired all of the issued and outstanding shares of capital stock of SMS Geotrac, Inc. SMS Geotrac, Inc. merged into YoSystems, with YoSystems becoming the surviving entity, which then changed its name to Geotrac, Inc. In July 1998, the Company acquired the remaining 51% of the outstanding shares of Geotrac, Inc.'s common stock in exchange for $7,994,250 consisting of: 524,198 shares of the Company's Common Stock valued at $11.00 per share, the initial public offering price....... $5,766,181 Promissory note............................................. 1,500,000 Cash........................................................ 728,069 ---------- $7,994,250 ==========
The following unaudited pro forma consolidated results of operations for the year ended December 31, 1998 is presented as if the acquisition of Geotrac, Inc. had been made on January 1, 1998. The unaudited pro forma information reflects the additional goodwill amortization and interest expense that would have been incurred if the Company had purchased Geotrac, Inc. on January 1, 1998. These pro forma results are not necessarily indicative of the results of operations that would have occurred had the purchase been made at January 1, 1998, or the future results of the consolidated operations (in thousands, except per share data): Revenue..................................................... $63,792 Operating income............................................ 9,758 Net income.................................................. 4,610 Net income per common share................................. $ .44
In addition, the Company entered into a Corporate Governance Agreement with Geotrac and Dan White ("Mr. White"), its president and former majority shareholder (the "former majority shareholder"), setting forth certain terms and conditions upon which Geotrac will operate following the merger. The Corporate Governance Agreement provides, in part, that, for so long as the former majority shareholder owns stock in the Company or Geotrac, or has an option to purchase stock in Geotrac, (i) the Company will vote all of its shares in Geotrac to fix and maintain the number of directors on the Geotrac Board of Directors at five, (ii) the Company will vote its shares in Geotrac to elect as directors of Geotrac two persons designated by the former majority shareholder, (iii) the termination of the former majority shareholder as an employee of Geotrac will require the vote of four out of five members of the Board of Directors, and (iv) certain actions by Geotrac will require the unanimous approval of the Geotrac Board of Directors, including any merger or consolidation, the payment of distributions or management or similar fees to the Company or its subsidiaries and affiliates, the sale or issuance of Geotrac stock, and the sale of Geotrac assets outside the ordinary course of business to anyone other than an affiliate of Geotrac. The former majority shareholder also has a right of first refusal to purchase the assets of Geotrac in the event such assets are to be sold. 66 69 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) COLONIAL CATASTROPHE Effective January 7, 1999, the Company, through a wholly-owned subsidiary, acquired all of the issued and outstanding capital stock of Colonial Catastrophe Claims Corporation, a Florida corporation ("Colonial Catastrophe"), in exchange for (i) 154,545 shares of Common Stock, (ii) cash in the amount of $500,000, (iii) a promissory note in the principal amount of $500,000, and (iv) an earn-out payment of $300,000, which was paid during February, 2000 in 121,518 shares of Common Stock, based upon achieving a target income before taxes of Colonial Claims for the year ended December 31, 1999. On January 15, 1999, Colonial Catastrophe was merged into the acquiring subsidiary and the name of the acquiring subsidiary was changed to "Colonial Claims Corporation" (hereinafter "Colonial Claims"). The acquisition was accounted for as a purchase in accordance with Accounting Principles Board Opinion No. 16 "Business Combinations". The results of operations of Colonial Claims is included in the accompanying financial statements since the date of acquisition. The total cost of the acquisition, including the $300,000 earn-out payment made in February, 2000, was $3.0 million which exceeded the fair value of the acquired net assets by $2.6 million. Such excess is being amortized on a straight-line basis over twenty years. The following unaudited pro forma consolidated results of operations for the year ended December 31, 1998 is presented as if the acquisition of Colonial Catastrophe had been made on January 1, 1998. The unaudited pro forma information reflects the additional goodwill amortization that would have been incurred if the Company had purchased Colonial Catastrophe on January 1, 1998. These pro forma results are not necessarily indicative of the results of operations that would have occurred had the purchase been made at January 1, 1998 or the future results of the consolidated operations (in thousands, except per share data): Revenue..................................................... $70,010 Operating income............................................ 10,110 Net income.................................................. 4,421 Net income per common share................................. $ .42
NOTE 4 -- RESTRICTED NET ASSETS AND RETAINED EARNINGS As discussed in Note 3. "Acquisitions", the Company acquired its Geotrac subsidiary through a series of transactions. In connection with the acquisition of Geotrac, the Company entered into a Corporate Governance Agreement, dated July 31, 1998, with Geotrac and Mr. White, setting forth certain terms and conditions pertaining to the operation of Geotrac. This agreement contains a provision, among other things, that restricts the Company's ability to make distributions or transfer funds from Geotrac by means of intercompany loans, advances or dividends without the unanimous approval of the Geotrac Board of Directors. Mr. White is presently a director of Geotrac. Therefore, pursuant to the Corporate Governance Agreement, Mr. White may impede the Company's ability to access excess cash balances retained by its Geotrac subsidiary, even if all of the other directors of Geotrac were to approve the distribution thereof to the Company. To date, the Company has been able to access Geotrac's excess cash when necessary, primarily through the prepayment of outstanding intercompany indebtedness. No assurances can be given, however, that the Company will be able to obtain available cash from Geotrac. If the Company is unable to do so, it ultimately could have a material adverse effect on the Company's business, financial condition and results of operations. As of December 31, 2000, the Company had total consolidated net assets of approximately $33.1 million of which $20.8 million represents the net assets of Geotrac. The tangible net assets of Geotrac primarily consist of: cash of $2.8 million; other current assets of $4.0 million, including $1.1 million due from affiliates; and current liabilities of $3.0 million, including $1.1 million due to affiliates. As a result of the foregoing restriction of Geotrac's net assets, the Company's consolidated retained earnings as of December 31, 2000, which totaled $5.4 million, is not completely available for dividend distribution. However, the Company did 67 70 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) not pay any dividends in either 1999 or 2000 and does not anticipate declaring or paying cash dividends in the foreseeable future. As such, all future earnings are expected to be retained for operating purposes. NOTE 5 -- PROPERTY AND EQUIPMENT
DECEMBER 31, LIFE -------------------------- (YEARS) 1999 2000 ------- ----------- ------------ Computer equipment and software............................ 3-5 $ 9,707,957 $ 12,980,586 Office furniture and equipment............................. 5 2,719,441 2,826,388 Leasehold improvements..................................... 5 181,045 794,621 Maps and map database...................................... 5 2,087,570 2,897,899 Automobiles................................................ 5 23,608 20,239 ----------- ------------ 14,719,621 19,519,733 Less -- accumulated depreciation and amortization.......... (7,494,127) (10,403,181) ----------- ------------ $ 7,225,494 $ 9,116,552 =========== ============
Maps and map database, which are used as a basis for making flood zone determinations, include the capitalized costs of purchasing maps as well as the direct labor cost of converting the maps to digitized computer files. At December 31, 1999 and 2000, property and equipment includes $1,603,784 and $1,548,151 of assets, respectively, and $966,074 and $1,327,484 of accumulated amortization, respectively, recorded under capital leases. Depreciation and amortization expense was $2,941,602, $4,132,898 and $3,697,090 in 1998, 1999 and 2000, respectively. NOTE 6 -- OTHER ACCRUED EXPENSES Other accrued expenses consisted of the following as of December 31, 1999 and 2000:
1999 2000 ---------- ---------- Adjuster expenses payable................................... $ 539,062 $ 281,697 Contract termination settlement............................. -- 800,000 Operating lease rebate...................................... -- 228,595 Accrued earn-out payable.................................... 300,000 -- Accrued professional fees................................... 80,000 265,000 Taxes payable other than income............................. 237,440 157,308 Commission payable.......................................... 61,557 64,305 Other accrued expenses...................................... 75,001 211,296 ---------- ---------- $1,293,060 $2,008,201 ========== ==========
NOTE 7 -- NOTES RECEIVABLE In August, 2000 the Company loaned $500,000 to an unaffiliated customer in connection with the termination of the outsourcing services agreement between the Company and such unaffiliated customer and received in return a $500,000 promissory note from such entity. The note provides for monthly payments equal to the greater of (a) ten thousand dollars ($10,000), or (b) one and one-half percent (1 1/2%) of net written premium (as defined) issued by such customer on or after August 1, 2000. In accordance with the terms of the note, ninety-two and one-half percent (92 1/2%) of each monthly payment shall be applied to the reduction 68 71 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) of the outstanding principal balance and seven and one-half percent (7 1/2%) shall be interest under the note. The note is collateralized by all of the borrower's assets. The current and non-current portions of the note, which totaled $120,000 and $286,739, respectively, at December 31, 2000, are included in "Prepaid expenses and other assets" and "Other assets," respectively, in the accompanying consolidated balance sheet. NOTE 8 -- LONG-TERM DEBT The Company leases various computer related equipment under capital leases which expire in 2001. The outstanding balance under the capital leases as of December 31, 1999 and 2000 totaled $701,494 and $219,857, respectively (net of interest of approximately $40,000 and $3,600, respectively). In June, 1999, the Company entered into a revolving line of credit agreement ("LOC") with a financial institution (the "Bank") that provides for borrowings of up to two times the rolling four quarter earnings before interest, taxes, depreciation and amortization ("EBITDA"), but in no event more than $12,000,000. At December 31, 1999, no amounts were outstanding under the LOC. In December, 2000, the Company received notification from the Bank that it would no longer honor any requests by the Company for advances under the LOC due to the fact that the Bank believed the Company had experienced a material adverse change in its financial condition. To date, the Company has been unable to secure a new LOC upon acceptable terms. Although management continues to seek such an arrangement, no assurances can be given that the Company will be able to secure a new LOC. NOTE 9 -- SHAREHOLDERS' EQUITY INITIAL PUBLIC OFFERING In February 1999, the Company completed an initial public offering ("IPO") of 3,350,000 shares of Common Stock at a price of $11 per share. Of the 3,350,000 shares sold in the IPO, 1,350,000 were sold by the Selling Shareholder and the remaining 2,000,000 shares were sold by the Company. The offering generated net proceeds to the Company of $19,164,000, after deducting offering expenses of approximately $1,296,000 paid by the Company. Such offering expenses were charged to additional paid-in capital against proceeds from the IPO. PREFERRED STOCK The Company is authorized to issue 20,000,000 shares of Preferred Stock, $.0l par value per share. The Board of Directors has the authority, without any further vote or action by the Company's shareholders, to issue Preferred Stock in one or more series and to fix the number of shares, designations, relative rights (including voting rights), preferences, and limitations of those series to the full extent now or hereafter permitted by Florida law. The Company has no present intention to issue shares of Preferred Stock, although it may determine to do so in the future. COMPENSATION EXPENSE During the year ended December 31, 2000, the Company recognized approximately $338,000 in additional compensation expense (of which approximately $145,000 relates to 1999), resulting from the vesting of benefits payable to certain current and former officers and directors of the Company under the Amended and Completely Restated Phantom Stock Plan (the "BFC Plan") of Bankers Financial Corporation ("BFC"), the parent corporation of BIG, and the Amended and Restated Phantom Stock Plan (the "VCC Plan") of Venture Capital Corporation ("VCC"). The foregoing compensation charge is a non-recurring, non-cash item to the Company, as all such benefits under such plans were fully vested as of September 30, 69 72 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 2000 and constitute the respective obligations of BFC and VCC, not the Company. In addition, the offset to such compensation expense is an increase to additional paid-in capital, since the ultimate obligations under these plans are that of BFC and VCC, respectively, and not of the Company. LONG TERM INCENTIVE PLANS The Long-Term Incentive Plan (the "1999 Incentive Plan"), approved by the Company's Board of Directors and shareholders, provides for the grant of incentive or nonqualified stock options to purchase up to 875,000 shares of Common Stock. All such options are granted at fair market value or above and expire on the tenth anniversary from the date of grant. Options shall become exercisable 60% after three years, 20% after four years and 20% after five years. As of December 31, 2000, options to purchase 570,000 shares are outstanding under the 1999 Incentive Plan. In October, 2000, the Company's Board of Directors adopted the 2000 Stock Incentive Plan, subject to shareholder approval. The 2000 Stock Incentive Plan provides for the grant of incentive or nonqualified stock options, stock appreciation rights, and other stock based awards. No more than 1,000,000 shares of Common Stock, plus an additional 750,000 shares from the 1999 Incentive Plan that become available as a result of canceled, forfeited or expired awards under such plan may be issued under the 2000 Incentive Plan. All options are to be issued at the greater of the fair market value or "Net Tangible Book Value Per Share" (as defined) and expire on the tenth anniversary from the date of grant. As of December 31, 2000, there were no options outstanding under the 2000 Stock Incentive Plan. NON-EMPLOYEE DIRECTORS' STOCK OPTION PLANS The Non-Employee Directors' Stock Option Plan (the "1999 Non-Employee Director Plan"), approved by the Company's Board of Directors and shareholders, provides for the grant of nonqualified stock options to purchase up to 7,200 shares of Common Stock in any three-year period to members of the Board of Directors who are not employees of the Company. A total of 200,000 shares may be issued pursuant to this plan. Non-employee directors receiving such options will become vested in options for the purchase of 800 shares of Common Stock after the adjournment of each annual meeting of shareholders of the Company, to the extent he or she has been granted options that have not yet vested, and provided that he or she is then a non-employee director of the Company. In addition, each non-employee director shall become vested in options for the purchase of 400 shares of Common Stock upon the adjournment of each regularly scheduled quarterly meeting of the Board of Directors (other than following the annual meeting of shareholders), to the extent he or she has been granted options that have not yet vested, and provided that he or she is then a non-employee director of the Company. All options granted will have an exercise price equal to the fair market value of the Common Stock as of the date of grant, will become exercisable upon vesting, and will expire on the sixth anniversary of the date of grant. As of December 31, 2000, options to purchase 24,000 shares are outstanding under the 1999 Non-Employee Directors' Plan. In October, 2000, the Company's Board of Directors adopted the 2000 Non-Employee Director Stock Plan, subject to shareholder approval. The 2000 Non-Employee Director Stock Plan provides for the automatic grant of nonqualified stock options to purchase up to 5,000 shares of Common Stock, commencing on the date of the Company's 2001 annual meeting of shareholders, and continuing annually thereafter on the date of each succeeding annual meeting of shareholders. A total of 250,000 options may be issued pursuant to this plan. All options are to be issued at the greater of the fair market value or "Net Tangible Book Value Per Share" (as defined), vest on the first anniversary following the date of grant, and expire on the tenth anniversary from the date of grant. As of December 31, 2000, there were no options outstanding under the 2000 Non-Employee Director Stock Plan. 70 73 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NON-QUALIFIED STOCK OPTION PLAN The Non-Qualified Stock Option Plan (the "Non-Qualified Plan"), approved by the Company's Board of Directors and shareholders, provides for the grant of non-qualified stock options to purchase up to 125,000 shares of Common Stock. Options to purchase 125,000 shares of Common Stock at fair market value were granted to certain executive officers of BIG. All of such options expire on the tenth anniversary from the date of grant. Options shall become exercisable 60% after three years, 20% after four years and 20% after five years. As of December 31, 2000, options to purchase 100,000 shares were outstanding under the Non-Qualified Plan. Under this plan, the Company will recognize aggregate compensation expense of approximately $600,000 of which $137,000 and 98,634 was recognized during the years ended December 31, 1999 and 2000, respectively, and is included in "Selling, general and administrative" expenses in the accompanying consolidated statements of operations. The balance will be recognized ratably over the remainder of the vesting period. The following table summarizes option activity from December 31, 1998 through December 31, 2000:
OPTIONS NUMBER OF WEIGHTED AVAILABLE OPTIONS AVERAGE FOR GRANT OUTSTANDING EXERCISE PRICE --------- ----------- -------------- Balance at December 31, 1998........................ -- -- $ -- Options authorized................................ 1,200,000 -- -- Options granted................................... (794,500) 794,500 10.76 Options cancelled................................. 241,000 (241,000) 11.00 Options exercised................................. -- -- -- --------- -------- Balance at December 31, 1999........................ 646,500 553,500 10.64 Options authorized................................ 1,250,000 -- -- Options granted................................... (297,750) 297,750 7.70 Options cancelled................................. 157,250 (157,250) 10.09 Options exercised................................. -- -- -- ========= ======== Balance at December 31, 2000........................ 1,756,000 694,000 $ 9.50 ========= ========
The range of exercise prices, shares, weighted average contractual life and exercise price for the options outstanding as of December 31, 2000 are presented below:
RANGE OF NUMBER WEIGHTED AVERAGE WEIGHTED AVERAGE EXERCISE PRICES OF SHARES CONTRACTUAL LIFE EXERCISE PRICE --------------- --------- ---------------- ---------------- $5.00 - $ 7.69................................ 184,000 5.90 years $ 6.38 9.00 - 11.00................................ 510,000 5.40 years 10.63 ------- ---------- ------ $5.00 - $11.00................................ 694,000 5.53 years $ 9.50 ======= ========== ======
As of December 31, 2000, there were 24,000 options that were exercisable at a weighted average exercise price of $11.00. The per-share weighted-average fair value of stock options granted during 1999 and 2000 was $6.37 and $1.16, respectively, using the Black-Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0%; risk-free interest rate of 5.75%; expected volatility of 65%; and an expected life of 5 years. 71 74 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) PRO FORMA RESULTS The Company applies APB Opinion No. 25 in accounting for its Incentive Plan and Non-Employee Director Plan and, accordingly, no compensation cost has been recognized for its stock options in the consolidated financial statements. Had the company determined compensation cost based on SFAS No. 123, the Company's net income would have been as follows:
1999 2000 -------------------- ------------------- NET DILUTED NET DILUTED INCOME EPS LOSS EPS ---------- ------- --------- ------- As reported..................................... $3,195,060 $ .26 $(509,366) $(.04) Statement 123 compensation (net of tax)......... (617,500) (.05) (441,000) (.03) Pro forma disclosure............................ $2,577,560 $ .21 $(950,366) $(.07)
NOTE 10 -- INCOME TAXES The provision for income taxes is summarized as follows:
YEAR ENDED DECEMBER 31, ------------------------------------ 1998 1999 2000 ---------- ---------- ---------- Current: Federal.......................................... $2,090,400 $1,955,660 $ 956,383 State............................................ 450,000 481,900 274,000 ---------- ---------- ---------- 2,540,400 2,437,560 1,230,383 ---------- ---------- ---------- Deferred: Federal.......................................... 435,400 77,000 (297,000) State............................................ 66,600 19,000 (84,000) ---------- ---------- ---------- 502,000 96,000 (381,000) ---------- ---------- ---------- $3,042,400 $2,533,560 $ 849,383 ========== ========== ==========
Reconciliation of the federal statutory income tax rate of 34% to the effective income tax rate is as follows:
YEAR ENDED DECEMBER 31, ---------------------------------- 1998 1999 2000 ---------- ---------- -------- Federal income taxes, at statutory rates............ $2,344,400 $1,947,700 $115,600 State taxes, net of federal benefit................. 323,500 292,200 88,400 Minority interest................................... 160,800 -- -- Dividends declared on Preferred Stock of Subsidiary........................................ 64,400 -- -- Non-deductible compensation expense related to stock plans............................................. -- -- 262,100 Non-deductible goodwill............................. 85,500 175,000 278,000 Non-deductible meals and entertainment.............. 12,700 58,900 64,400 Other, net.......................................... 51,100 59,760 40,883 ---------- ---------- -------- $3,042,400 $2,533,560 $849,383 ========== ========== ========
72 75 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for income tax reporting purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:
DECEMBER 31, --------------------- 1999 2000 ---------- -------- Deferred tax assets: Vacation pay.............................................. $ 279,800 $244,200 Deferred recognition of life-of loan premium.............. 628,100 474,600 Deferred revenue.......................................... (13,300) 121,000 Depreciation and fixed asset bases differences............ 181,100 304,200 Allowance for doubtful accounts........................... (13,710) 62,300 Other..................................................... 53,310 -- Deferred tax liabilities: Goodwill and customer list bases differences.............. (52,300) (74,000) Capitalized software development costs.................... -- (417,900) Other..................................................... -- (32,400) ---------- -------- Net deferred tax asset............................ $1,063,000 $682,000 ========== ========
NOTE 11 -- COMMITMENTS AND CONTINGENCIES RISKS AND UNCERTAINTIES The Company derives a substantial portion of its revenues from outsourcing services provided to its principal shareholder, BIG. The Company has entered into contracts with BIG pursuant to which it will continue to provide administrative services to BIG (See Note 12). The Company's future financial condition and results of operations will depend to a significant extent upon the commercial success of BIG and its continued willingness to utilize the Company's services. Any significant downturn in the business of BIG or its commitment to utilize the Company's services could have a material adverse effect on the Company's business, financial condition and results of operations. The Company's business is dependent upon various factors, such as general economic conditions and weather patterns, which are beyond its control. For example, the demand for flood zone determinations by lenders and their customers is directly related to the affordability of mortgage financing and refinancing. An increase in interest rates could have a negative impact on mortgage lending and consequently also on the level of flood zone determinations requested. Fluctuations in interest rates will likely produce fluctuations in the Company's quarterly earnings and operating results. Likewise, natural disasters such as hurricanes, tornadoes and floods, all of which are unpredictable, directly impact the demand for both the Company's outsourcing and flood zone determination services. 73 76 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OPERATING LEASES The Company leases property and equipment under operating leases which expire at various dates through 2005. Future minimum rental payments under non-cancelable operating leases, exclusive of related party leases discussed in Note 12, having initial or remaining terms in excess of one year as of December 31, 2000 are as follows:
YEAR ENDED DECEMBER 31, AMOUNT - ----------------------- ---------- 2001........................................................ $3,190,000 2002........................................................ 2,699,000 2003........................................................ 2,200,000 2004........................................................ 1,314,000 2005........................................................ 552,000 ---------- Total future minimum rental payments...................... $9,955,000 ==========
Total rental expense, excluding amounts paid to BIG under the affiliated lease agreements, totaled $470,000, $1,025,000 and $1,935,000 for the years ended 1998, 1999 and 2000, respectively. LEGAL PROCEEDINGS On September 28, 2000, October 25, 2000 and October 30, 2000, three alleged shareholders of the Company filed three nearly identical lawsuits in the United States District Court for the Middle District of Florida, each on behalf of a putative class of all persons who purchased shares of the Company's Common Stock pursuant and/or traceable to the registration statement for the Company's February 1999 initial public offering (the "IPO"). The lawsuits were consolidated on December 1, 2000, and the consolidated action's proceeding under Case No. 8:00-CV-2013-T-26MAP. The plaintiff's Consolidated Amended Class Action Complaint, filed February 7, 2001, names as defendants the following parties: the Company; Geotrac; BIG; Venture Capital Corporation, a selling shareholder in the IPO; the five inside directors of the Company at the time of the IPO; and Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc., the underwriters for the IPO. The complaint alleges, among other things, that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, by making certain false and misleading statements in the roadshow presentations, registration statement and prospectus relating to the IPO. More specifically, the complaint alleges that, in connection with the IPO, the defendants made various material misrepresentations and/or omissions relating to (i) the Company's ability to integrate Geotrac's flood zone determination business with the Company's own flood zone determination business and with its insurance outsourcing services business; (ii) actual and anticipated synergies between the Company's flood zone determination and outsourcing services business lines; and (iii) the Company's use of the IPO proceeds. The complaint seeks unspecified damages, including interest, and equitable relief, including a rescission remedy. On March 26, 2001, the Company, BIG and the five inside director defendants filed a motion to dismiss the plaintiffs' Consolidated Amended Class Action Complaint for, among other things, failure to allege material misstatements and/or omissions in the roadshow presentations, registration statement and/or prospectus relating to the IPO. Management of the Company believes the material allegations of the complaints are without merit and intends to vigorously defend the lawsuit. No assurances can be given, however, with respect to the outcome of the litigation, and an adverse result could have a material adverse effect on the Company's business, financial condition and results of operations. Bankers Insurance Company ("BIC"), a subsidiary of BIG, and Bankers Life Insurance Company ("BLIC") and Bankers Security Insurance Company ("BSIC"), subsidiaries of BIC, have been subject to an investigation by the Florida Department of Insurance (the "DOI"), the principal regulator of insurance activities in the State of Florida, stemming from their use of a private investigator to gather information on a 74 77 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) DOI employee and the private investigator's unauthorized use of illegal wiretaps in connection therewith. On March 23, 2000, the Treasurer and Insurance Commissioner of the State of Florida, as head of the DOI, filed an administrative complaint against BIC, BLIC and BSIC based upon the results of such investigation. The administrative complaint charges BIC, BLIC and BSIC with violating various provisions of the Florida Insurance Code including, among other things, a provision requiring insurance companies to have management, officers or directors that are, among other things, trustworthy. The complaint further notifies BIC, BLIC and BSIC that the Insurance Commissioner intends to impose such penalties or take such other administrative actions as may be proper or appropriate under applicable law, including possibly entering an order suspending or revoking the certificates of authority of BIC, BLIC and BSIC to conduct business as insurance companies in the State of Florida. On February 19, 2001, the DOI filed a Motion for Leave to File Amended Complaint. On March 29, 2001, the court issued an order granting the DOI's motion. BIC, BLIC and BSIC have informed the Company that they intend to vigorously defend against such action, but no assurances can be given as to the outcome thereof. In the event the DOI were to enter an order suspending or revoking the certificates of authority of BIC, BLIC and BSIC to conduct business as insurance companies in the State of Florida, or impose other significant penalties on any of them, it would materially adversely affect the business and/or operations of BIG and, in turn, could result in the loss of or material decrease in the Company's business from BIG, which would have a material adverse effect on the Company's business, financial condition and results of operations. On November 19, 1999, the United States, on behalf of the Federal Emergency Management Agency ("FEMA"), filed a civil action against BIC in the United States District Court for the District of Maryland stemming from FEMA's investigation of certain cash management and claims processing practices of BIC in connection with its participation in the National Flood Insurance Program ("NFIP"). The complaint alleges, among other things, that BIC knowingly failed to report and pay interest income it had earned on NFIP funds to the United States in violation of the False Claims Act. The complaint further alleges various common law theories, including fraud, breach of contract, unjust enrichment and negligent misrepresentation. The complaint seeks civil penalties of $1.08 million and actual damages of approximately $1.1 million as well as treble, punitive and consequential damages, costs and interest. The suit is currently stayed pending arbitration following a decision by the United States Court of Appeals for the Fourth Circuit in favor of BIC on its motion to stay the litigation pending arbitration. BIC has informed the Company that BIC is not aware of the government's intentions for further appeal of the order regarding arbitration. BIC has further informed the Company that it intends to vigorously defend against the action, but no assurances can be given as to the outcome thereof. However, BIG has advised the Company that an adverse judgment in this action should not have a material adverse affect on the business and/or operations of BIC, although no assurances can be given in this regard. FEMA's investigation of certain claims processing practices of BIC in connection with its participation in the NFIP is continuing, and BIC has produced documentation in connection therewith. If the parties are either unable to reach agreement in these matters or resolve their disagreement in arbitration, the United States could amend its complaint against BIC to add additional claims under the False Claims Act and/or various common law and equitable theories relating to such matters. In the event such continuing investigation or any consequence thereof materially adversely affects the business or operations of BIC, it could result in the loss of or material decrease in the Company's business from BIC, which would have a material adverse effect on the Company's business, financial condition and results of operations. The Company is involved in various other legal proceedings arising in the ordinary course of business. Management believes that the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial position, results of operations, or liquidity, although no assurances can be given in this regard. 75 78 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) COMMON STOCK AWARDS Prior to the Company's acquisition of Geotrac, Inc., Geotrac's president had a non-binding commitment to grant to certain former and current employees options to purchase shares of Geotrac, Inc. common stock held by the president and his wife, for prior employee services rendered. During May 1998, the president and his wife contributed 46.45 shares of their Common Stock to these individuals which is recorded as "Deferred compensation (non-recurring item)" totaling $728,069 in the accompanying December 31, 1998 consolidated statement of operations. The valuation of the common stock used to compute the deferred compensation expense was determined by dividing the purchase price of $7,994,250 for the 51% interest in Geotrac by 510 shares, the remaining shares purchased. EMPLOYMENT AGREEMENTS The Company entered into employment agreements with certain members of its executive management team. The agreements provide for employment terms of three years and shall continue indefinitely until terminated by either party pursuant to the terms of the agreements. In the event an employment agreement is terminated by the Company without cause, the employee shall be entitled to earned, but unpaid benefits as well as a "Severance Payment" equal to the employee's then current annual base salary, subject to adjustment as defined. The agreements contain non-compete provisions, which prevent a terminated employee from soliciting customers, prospective customers or employees of the Company. In connection with the acquisition of Geotrac, Inc., the Company entered into an employment agreement with the president and chief executive officer of Geotrac, Inc. ("Geotrac's President"). This agreement provides for an initial term of four years and shall continue in effect thereafter until terminated by either party upon 90 days prior written notice. The agreement provides for an initial annual base salary of $150,000 subject to annual review by Geotrac, Inc.'s Board of Directors. In the event of Geotrac's President's death or disability, Geotrac, Inc.'s obligations under the agreement will automatically terminate, except that Geotrac's President shall be entitled to severance equal to his then current annual base salary. The agreement further provides that, in the event of termination by Geotrac, Inc. without cause (as defined therein) or by Geotrac's President for good reason (as defined therein), or in the event the agreement is not renewed for any reason other than death, disability or for cause, then Geotrac, Inc. shall pay Geotrac's President at the rate of his annual base salary then in effect for the longer of (i) the remainder of the term of the agreement and (ii) one year after such termination date, subject to a credit of up to 75% of the base salary paid to Geotrac's President by his new employer, if any. The agreement contains certain non-compete provisions which prevent Geotrac's President from engaging in the flood zone compliance business within a specified area and soliciting or employing any Geotrac, Inc. employees. NOTE 12 -- RELATED PARTY TRANSACTIONS ADMINISTRATION SERVICES AGREEMENT Effective as of January 1, 1998, the Company and BIG entered into an Administrative Services Agreement (the "Administration Agreement") pursuant to which BIG provides the Company with various administrative and support services, such as human resources and benefits administration, accounting, legal, cash management and investment services, requested by the Company from time to time and reasonably necessary in the conduct of its operations. Under the Administration Agreement, as originally in effect, the Company was charged for these services generally based upon a contractually agreed-upon quarterly fee of $396,250. In addition, the Company paid BIG, through the year ended December 31, 1999, an annual fee of $120,000 for routine legal services provided. Administration fees charged to the Company during the year ended December 31, 1999 totaled $2.3 million and are included in "Management Services from Parent" in the 76 79 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) accompanying consolidated statement of operations. The Administration Agreement expired on December 31, 2000 and was renewed by the Company for an additional one-year term. Effective as of January 1, 1999, the Administration Agreement was amended to eliminate certain accounting and internal audit service functions (which functions are currently performed by the Company directly) and to reduce the quarterly fee payable by the Company to BIG (including one-fourth of the annual fee for legal services) to $258,750, subject to renegotiation by either party. Administration fees charged to the Company during the year ended December 31, 1999 totaled $1.2 million and are included in "Management Services from Parent" in the accompanying consolidated statement of operations. Effective January 1, 2000, the annual fee for routine legal services was reduced to $60,000 from $120,000. Effective April 1, 2000, the portion of the fee attributable to human resources and benefits administration services (approximately $393,000), excluding training services, was eliminated as the Company began to perform such services at such date. Administration fees charged to the Company during the year ended December 31, 2000 totaled $488,000 and are included in "Management Services from Parent" in the accompanying consolidated statement of operations. On April 13, 2001, the Company and BIG entered into the Letter Agreement. Pursuant to the Letter Agreement, the Administration Agreement was terminated effective April 1, 2001 and will be replaced with a new corporate services agreement pursuant to which BIG will provide the Company with various marketing and training services at fixed hourly rates. SERVICE AGREEMENTS Effective as of January 1, 1998, the Company entered into a separate Service Agreement (each a "Service Agreement") with each of Bankers Insurance Company ("BIC"), Bankers Security Insurance Company ("BSIC"), and First Community Insurance Company ("FCIC"), all direct or indirect subsidiaries of BIG, pursuant to which the Company provides policy administration, claims administration and data processing services to such entities in connection with their flood, homeowners and automobile lines of business, and claims administration and data processing services for all such entities' other property and casualty lines of business. Under the Service Agreements, as originally in effect, each entity paid the Company as follows: (1) for its policy administration services, a monthly fee based upon direct written premiums for the flood, homeowners and automobile insurance programs; (2) for its claims administration services, a monthly fee based upon direct earned premiums for the property, casualty, automobile properly, automobile casualty, flood, and workers' compensation insurance programs (In addition, a monthly fee based upon direct incurred losses is charged for flood claims administration and a reimbursement not to exceed 5% of direct incurred losses from a single event in excess of $2 million is charged to property claims.); (3) for its data processing services, a monthly fee based upon direct written premiums for all insurance programs; and (4) for certain customer services such as mailroom, policy assembly, records management and cash office, a monthly fee based upon direct written premiums (except, if provided in connection with their flood, homeowner and automobile insurance lines, where no such fees are imposed). The total service fees charged to BIC, BSIC and FCIC under these Service Agreements during the year ended December 31, 1998 totaled $36.1 million. Effective January 1, 1999, these Service Agreements were modified to provide for tiered pricing based on the volume of business processed, and to change the fee for data processing services, which was previously charged as a percentage of direct written premium, to a fixed monthly fee. The total service fees charged to BIC, BSIC and FCIC under these Service Agreements, as amended, during the years ended December 31, 1999 and 2000 totaled $41.5 million and $37.9 million, respectively. These modifications resulted in a reduction in the base fees charged for certain lines of business and increases in base fees charged for other lines of business to better reflect the services provided and competitive market rates for such services. The 77 80 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) term of each Service Agreement shall expire on June 1, 2001, provided that it shall thereafter be automatically extended until terminated upon 90 days prior notice by either party. Effective April 1, 1999, the Company further amended its existing service agreements with affiliated insurers to provide for minimum aggregate quarterly service fee payments through December 31, 1999 with respect to certain lines of business, provided that certain key tasks are performed timely. If such minimum service fee requirements with respect to said lines of business under the agreements had not been implemented as of April 1, 1999, aggregate affiliated outsourcing services revenues, which totaled $41.5 million for the year ended December 31, 1999, would have been $39.7 million in accordance with the terms of the affiliated service agreements as in effect prior to April 1, 1999. Additionally, for the year ended December 31, 1999, the Company did not recognize approximately $500,000 of additional affiliated service fees under the minimum service fee agreement, as the Company did not meet certain specified milestones on a timely basis. Such minimums were established to compensate the Company for maintaining an infrastructure to process certain lines of business of affiliated insurers that have not grown as rapidly as originally forecasted. In addition, under the Service Agreement with BIC, the Company administers an AYO Claims Agreement between BIG and Florida Windstorm Underwriting Association, which agreement BIG assigned to BIC on December 15, 1998. The Company processes and adjusts all claims made under the AYO Claims Agreement. The administrative fee (equal to a percentage of each loss paid) is allocated between BIC and the Company. On April 13, 2001 the Company entered into the Letter Agreement with BIG. Pursuant to the Letter Agreement, the parties agreed to extend the term of each of the Service Agreements until December 1, 2002. To obtain BIG's agreement to such extensions, the Company, in turn, agreed to certain service fee modifications. Under the Service Agreements, as amended, BIG will pay the Company (1) a monthly fee based upon direct written premiums for policy administration services relating to its flood, homeowners and commercial lines of business and (2) a monthly fee based upon net claims (after deductibles) for claims administration services relating to its flood line of business. The service fees payable under the Service Agreements with respect to (a) policy administration services relating to the automobile line of business, and (b) claim administration services relating to all lines of business other than flood, shall remain unchanged. If such amendments to the Service Agreements had been in effect for the fiscal year ended December 31, 2000, the Company's affiliated outsourcing revenues, which totalled approximately $38 million on an actual basis, would have been approximately $30 million on a pro forma basis (unaudited). The Company believes that any anticipated reduction in affiliated outsourcing revenues resulting from the implementation of such service fee changes will be largely offset by a corresponding reduction in operating costs as a result of, among other things, the elimination of data and technical support services from the administration services to be provided by the Company to BIG under the Service Agreements, although no assurances can be given in this regard. Pursuant to the Letter Agreement described below, the Service Agreements will be amended effective June 1, 2001 to, among other things, extend the term of each agreement, modify certain of the service fees payable thereunder, and eliminate data and technical support services from the administrative services to be provided by the Company thereunder. Effective December 1, 1998, the Company entered into a service agreement with BLIC, a subsidiary of BIG, pursuant to which the Company provides certain administrative services and allows BLIC to make use of certain of the Company's property, equipment and facilities in connection with BLIC's day-to-day operations. Under the service agreement, as amended, BLIC agreed to pay the Company predetermined fees on a quarterly basis. To date, no services have been provided and no fees have been charged or paid under this service agreement. The term of the service agreement with BLIC ends on June 1, 2001, but may be terminated at any time by BLIC upon 90 days prior written notice. 78 81 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) TECHNICAL SUPPORT SERVICES AGREEMENT In April, 1999, the Company entered into a Technical Support Services Agreement (the "Old Support Agreement") with BIG pursuant to which the Company provided BIG with certain technical support services, computer programming and systems analysis services. Under the Old Support Agreement, such services were charged to BIG on a time and materials basis. The total service fees charged to BIG under this agreement during the years ended December 31, 1999 and 2000 totaled $1.3 million and $0, respectively. Pursuant to the Letter Agreement described below, the Old Support Agreement will be terminated effective June 1, 2001 and replaced with a new Technical Support Services Agreement (the "New Support Agreement"). Pursuant to the New Support Agreement, BIG will provide certain technical support services to the Company. LETTER AGREEMENTS On April 13, 2001, the Company entered into a Letter Agreement with BIG, BIC, BSIC and FCIC (the "Letter Agreement") pursuant to which the various contractual arrangements between the Company and such affiliated entities will be significantly altered effective as of June 1, 2001. With respect to the Administration Agreement, the Letter Agreement provides that the existing Administration Agreement will be terminated effective as of June 1, 2001 and replaced with a new Corporate Services Agreement (the "Corporate Services Agreement"). Pursuant to the Corporate Services Agreement, BIG will provide the Company with various corporate marketing (including graphic design and web-site development) and corporate training services requested by the Company from time to time at fixed hourly rates ranging from $40 to $100 per hour, depending on the service being provided. The Letter Agreement provides that the parties will negotiate in good faith to execute and deliver the Corporate Services Agreement incorporating these terms on or before June 1, 2001; provided, however, that in the event such agreement is not executed and delivered by that date, BIG will provide such services at the rates specified in the Letter Agreement. The Letter Agreement further provides that, effective June 1, 2001, the Old Support Agreement will be terminated and replaced with the New Support Agreement. Pursuant to the New Support Agreement, BIG will assume substantially all of the information technology personnel of the Company, consisting of approximately 70 persons, and provide the Company with certain technical support, computer programming and systems analysis services at specified rates (except for software development services, which shall be provided on a time and materials basis). With respect to the Service Agreements, the Letter Agreement provides that each of such agreements shall be amended, effective June 1, 2001, to (i) postpone the expiration date of the agreement from June 1, 2001 until December 1, 2002, (ii) modify the service fees payable thereunder with respect to policy and claim administration services to be provided in connection with certain lines of business, (iii) eliminate data and technical support services from the administrative services to be provided by the Company under the agreement, and (iv) assess a fixed monthly fee for usage of the Company's AS/400 computer system. With respect to the service fee modifications, under the Service Agreements, as amended, each entity will pay the Company (1) a monthly fee based upon direct written premiums for policy administration services relating to its flood, homeowners and commercial lines of business and (2) a monthly fee based upon net claims (after deductibles) for claims administration services relating to its flood line of business. The service fees payable under the Service Agreements with respect to (a) policy administration services relating to the automobile line of business, and (b) claims administration services relating to all lines of business other than flood, shall remain unchanged. On April 13, 2001, the Company entered into a Commitment Letter to advance service fee payments (the "Commitment Letter") with BIG pursuant to which BIG has agreed to advance to the Company up to 79 82 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) $1.5 million per month as a prepayment of service fees due by BIG and its affiliates under the Service Agreements. Such advances are available to the Company beginning June 1, 2001 continuing through December 1, 2002 and shall be payable upon demand by the Company. Any funds advanced by BIG to the Company under the Commitment Letter shall constitute a prepayment of, and shall be credited toward, the service fees charged to BIG by the Company during the month following such advance. PROPERTY LEASES The Company currently leases from BIC approximately 84,200 square feet of office space in St. Petersburg, Florida at a monthly rate of approximately $108,000. Additionally, the Company currently leases from BIG approximately 4,600 square feet of office space in St. Petersburg, Florida at a monthly rate of approximately $5,100. Rent expense under these leases, which totaled $1.0 million, $1.0 million and $1.5 million during the years ended December 31, 1998, 1999 and 2000, respectively, is included in "Management services from Parent" in the consolidated statements of operations. The current terms of these leases expire on December 31, 2001. Effective January 1, 1998, BIG assigned to the Company a lease of approximately 6,600 square feet of office space in St. Petersburg, Florida. This lease expired on December 31, 2000 and was not renewed. Rent expense recorded under the lease, which totaled $53,000, $77,000 and $71,000 during the years ended December 31, 1998, 1999 and 2000, respectively, is included in "Cost of outsourcing services" in the consolidated statements of operations. EMPLOYEE LEASING AGREEMENT Effective as of January 1, 1998, the Company entered into an Employee Leasing Agreement with BIC (the "Employee Leasing Agreement") pursuant to which the Company continued to lease various personnel, including customer service personnel, from BIC. The number of employees leased varied depending on the needs of the Company and the availability of employees from BIC. The Company was responsible for all expenses associated with such leased employees, including salaries, bonuses and benefits. These charges, which totaled $6.1 million, $7.5 million and $1.5 million during the years ended December 31, 1998, 1999 and 2000, respectively, are included in "Cost of outsourcing services" and "Selling, general and administrative expenses" in the consolidated statements of operations. Effective April 1, 2000, the Employee Leasing Agreement was terminated at which time all such leased employees became direct employees of the Company. SALES AND ASSIGNMENT AGREEMENT In May, 1998, the Company entered into a sales and assignment agreement with BIG and certain affiliated companies whereby certain assets were transferred and assigned to the Company, effective retroactively to April, 1998, for use in its business. The assets, including, but not limited to, telephone equipment, computer hardware and software, and service marks were transferred at their net book value as of the date of transfer. The Company paid consideration consisting of $325,075 in cash and entered into two promissory notes amounting to $2,802,175. The notes were repaid in full in February, 2000 out of the net proceeds to the Company from its initial public offering. In addition, the Company assumed the existing leases with unaffiliated third parties relating to various computer equipment. SOFTWARE LICENSING AGREEMENT Effective January 1, 1998, the Company entered into a non-exclusive license agreement with BIG and BIC pursuant to which the Company licenses its primary operating systems from BIG and BIC in exchange for a nominal fee. The term of the license is perpetual. The license agreement provides that the Company shall 80 83 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) be solely responsible for maintaining and upgrading the systems and shall have the authority to sell or license such systems to third parties. GEOTRAC TRANSACTIONS Geotrac currently leases a 12,400 square-foot facility in Norwalk, Ohio from DanYo LLC, a limited liability company wholly owned by Daniel J. White and his spouse. This lease, which was renewed effective September 1, 1999, is for a term of five years, expiring on August 31, 2004, and provides for monthly rental payments of approximately $10,448, plus payment of utilities, real estate taxes and assessments, insurance, repairs and similar expenses. Rent expense recorded under the lease, which totaled $105,000, $121,000 and $125,000 during the years ended December 31, 1998, 1999 and 2000, respectively, is included in "Cost of flood zone determination services" in the consolidated statements of operations. Flood zone determination services performed by Geotrac on behalf of the Company's insurance outsourcing services subsidiary totaled $1.3 million, $620,000 and $929,000 during the years ended December 31, 1998, 1999 and 2000, respectively. PHANTOM STOCK PLANS During the year ended December 31, 2000, the Company recognized approximately $338,000 in compensation expense (of which approximately $145,000 relates to 1999) resulting from the vesting of benefits payable to certain current and former officers and directors of the Company under the Amended and Completely Restated Phantom Stock Plan (the "BFC Plan") of Bankers Financial Corporation ("BFC"), the parent corporation of BIG, and the Amended and Restated Phantom Stock Plan (the "VCC Plan") of Venture Capital Corporation ("VCC"). The foregoing compensation charge is a non-recurring, non-cash item to the Company, as all such benefits under such plans were fully vested as of September 30, 2000 and constitute the respective obligations of BFC and VCC, not the Company. Effective September 30, 2000, the BFC and VCC Plans were amended to provide for, among other things, immediate vesting of benefits payable thereunder to certain current and former officers and directors of the Company. Accordingly, as of September 30, 2000, the total discounted and non-discounted benefits payable under these plans, which have accrued since February 11, 1999, the date of the Company's initial public offering (the "IPO Date"), totaled $327,000 and $894,000, respectively, for the BFC Plan and $12,000 and $43,000, respectively, for the VCC Plan. Benefits under each of such plans generally are payable in 120 equal installments beginning at age 60. Although resulting in a compensation expense (on a discounted basis) to the Company, all of such benefits under such plans were granted on or before the IPO Date and constitute the respective obligations of BFC and VCC, not the Company. The benefits described herein exclude amounts vested prior to the IPO Date and/or allocable to services provided to BIG or its affiliated entities (other than the Company or its subsidiaries) since the IPO Date. Except as set forth below, since the IPO Date, no officers or directors of the Company have been eligible to receive additional grants under such phantom stock plans or have been subject to future allocations of profits or losses with respect thereto. In addition, except as set forth below, all current officers and directors of the Company were fully vested, as of September 30, 2000, in all benefits under such plans. Notwithstanding the foregoing, Robert G. Menke, a director of the Company, and David K. Meehan, Chairman of the Board of the Company, will continue to be eligible to receive grants, vest in benefits received and share in profits and losses under such plans in their capacity as officers and directors of BIG and its affiliated entities. 81 84 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) MISCELLANEOUS In February, 1999, Western International Insurance Company, a wholly-owned subsidiary of Venture Capital Corporation and presently a more than 5% shareholder of the Company, loaned $12.0 million to BIG in exchange for a subordinated note. This loan was funded by using a portion of the net proceeds received by Venture Capital Corporation in the Company's initial public offering. BIG, in turn, used a portion of such loan proceeds to satisfy a note payable (including accrued interest) to the Company which totaled $5,322,455. The balance of the loan proceeds will provide BIG with additional capital to repay other outstanding indebtedness and expand its operations. The Company, in turn, used the funds received from BIG, together with a portion of the net proceeds from its initial public offering, to satisfy $7,054,996 in accounts, income taxes and notes payable (including accrued interest) payable to BIG. The Company's Chairman of the Board also serves as Vice Chairman of the Board of Directors of BIG, and two other directors of the Company serve as executive officers and/or directors of BIG. As the interests of the Company and BIG may differ, these individuals may face certain conflicts of interest. NOTE 13 -- EMPLOYEE BENEFIT PLANS The Company's employees participate in its Parent company's 401(k) plan which covers substantially all employees. To participate in the plan, employees must be at least 18 years old and have completed 90 days of service. The Company makes matching contributions of up to 5% of each participant's deferral. The Company's expense related to this plan was approximately $647,072, $821,217 and $829,645 in 1998, 1999 and 2000, respectively. In addition, the Company's employees (except for employees of Geotrac) participate in self-insured medical and dental plans provided by the Parent. The medical program provides for specific excess loss reinsurance for individual claims greater than $60,000 for any one claimant and aggregate claims greater than $1,000,000. The Company accrues the estimated liabilities for the ultimate costs of both reported claims and incurred but not reported claims. NOTE 14 -- SEGMENT INFORMATION The Company primarily operates in two business segments within the United States; providing policy and claims administration services and flood zone determinations. No unaffiliated customer accounted for more than 10% of the Company's total revenues for the periods presented. The following table provides information about these reportable segments as required by SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information".
INTERCOMPANY OUTSOURCING FLOOD ZONE ELIMINATIONS CONSOLIDATED SERVICES DETERMINATIONS AND OTHER TOTALS ----------- -------------- ------------ ------------ 1998 Operating revenues -- affiliated.......... $37,596,598 $ 1,279,689 $ (1,527,654) $37,348,633 Operating revenues -- unaffiliated........ 1,989,306 24,454,558 -- 26,443,864 Operating income.......................... 1,867,742 7,238,810 -- 9,106,552 Interest expense.......................... 1,078,759 1,115,594 -- 2,194,353 Depreciation and amortization............. 2,236,940 2,074,071 -- 4,311,011 Identifiable assets....................... 18,664,056 28,443,025 (7,205,226) 39,901,855 Minority interests........................ -- (472,803) -- (472,803)
82 85 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INTERCOMPANY OUTSOURCING FLOOD ZONE ELIMINATIONS CONSOLIDATED SERVICES DETERMINATIONS AND OTHER TOTALS ----------- -------------- ------------ ------------ 1999 Operating revenues -- affiliated.......... $42,142,568 $ 620,320 $ (677,070) $42,085,818 Operating revenues -- unaffiliated........ 10,702,732 18,540,543 -- 29,243,275 Operating income.......................... 1,870,427 4,317,896 -- 6,188,323 Interest expense.......................... 255,393 669,530 (115,540) 809,383 Depreciation and amortization............. 3,229,839 2,268,168 -- 5,498,007 Identifiable assets....................... 28,723,070 26,089,991 (15,322,154) 39,490,907 2000 Operating revenues -- affiliated.......... $38,904,503 $ 929,002 $ (961,002) $38,872,503 Operating revenues -- unaffiliated........ 7,973,651 16,137,943 -- 24,111,594 Operating income (loss)................... (3,163,936) 3,285,482 -- 121,546 Interest expense.......................... 60,905 272,164 (262,825) 70,244 Depreciation and amortization............. 3,024,573 2,317,526 -- 5,342,099 Identifiable assets....................... 33,248,784 25,044,943 (17,528,179) 40,765,548
During the year ended December 31, 2000, the Company's outsourcing services business segment incurred an operating loss of approximately $3.2 million. This operating loss was partially due to a decrease in revenue from the administration of property damage claims resulting from flood and wind claims, as well as an increase in personnel and contractor costs incurred to bring on new unaffiliated contracts, which contracts were subsequently terminated. In an effort to improve the operating results of its outsourcing services business segment, the Company completed a workforce reduction of approximately 10%, or 53 employees on February 13, 2001. In addition, on April 13, 2001, the Company entered into a Letter Agreement with BIG, BIC, BSIC and FCIC providing for various changes to the Company's existing contractual arrangements with such affiliated entities. NOTE 15 -- STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, ---------------------------------- 1998 1999 2000 ---------- ---------- -------- Cash paid for: Interest.................................................. $1,614,807 $1,141,161 $ 70,244 Income taxes.............................................. 7,381,907 1,470,000 440,175
During 1998, the Company acquired fixed assets by issuing various debt obligations (including capital leases) totaling $4,265,639. During 1998, the Company repurchased the Preferred Stock of a subsidiary by issuing a note in the amount of $6,750,000. 83 86 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) During 1998, the Company acquired the remaining 51% interest in Geotrac, Inc. and in 1999, acquired Colonial Catastrophe. In conjunction with these acquisitions, assets acquired and liabilities assumed were as follows:
YEAR ENDED DECEMBER 31, ------------------------ 1998 1999 ----------- ---------- Common Stock................................................ $ 5,766,181 $1,700,000 Common Stock payable........................................ -- 300,000 Promissory note............................................. 1,500,000 500,000 Short-term obligation....................................... 728,069 500,000 ----------- ---------- $ 7,994,250 $3,000,000 =========== ========== Fair value of assets acquired............................... $10,990,152 $1,846,555 Liabilities assumed......................................... 10,650,887 1,478,306 ----------- ---------- Net assets.................................................. 339,265 368,249 Goodwill.................................................... 14,933,247 2,631,751 ----------- ---------- $15,272,512 $3,000,000 =========== ==========
NOTE 16 -- SUPPLEMENTAL SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Following is a summary of the quarterly results of operations for the quarterly periods in 1998, 1999 and 2000:
QUARTER ENDED ------------------------------------------------------ MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 ----------- ----------- ------------ ----------- 1998 Total revenues.............................. $15,518,805 $15,725,571 $16,128,175 $16,419,946 Operating income............................ 3,028,012 1,938,285 2,147,585 1,992,670 Net income.................................. 1,108,368 848,288 950,763 945,572 Net income per common share................. 0.11 0.08 0.09 0.09 1999 Total revenues.............................. $18,105,319 $18,478,008 $15,646,548 $19,099,218 Operating income (loss)..................... 2,471,611 3,134,248 (20,116) 602,580 Net income (loss)........................... 1,318,543 1,848,448 (228,071) 256,140 Net income (loss) per common share.......... 0.11 0.15 (0.02) 0.02 2000 Total revenues.............................. $14,687,559 $15,995,377 $16,170,344 $16,130,817 Operating income (loss)..................... (310,029) 131,108 (623,330) 923,797 Net income (loss)........................... (220,500) 23,725 (556,543) 243,952 Net income (loss) per common share.......... (0.02) -- (0.04) 0.02
The consecutive growth in total revenues during 1998 and 1999 is primarily due to the acquisitions of Geotrac during 1998 and Colonial Catastrophe during 1999 and the corresponding incremental revenues, operating income and net income contributed by those acquisitions. 84 87 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SCHEDULE 1 To the Board of Directors of Insurance Management Solutions Group, Inc. In connection with our audit of the consolidated financial statements of Insurance Management Solutions Group, Inc. and Subsidiaries referred to in our report dated April 13, 2001, which is included in this Annual Report on form 10-K for the year ended December 31, 2000, we have also audited Schedule I for each of the three years in the period ended December 31, 2000. In our opinion, this schedule presents fairly, in all material respects, the information required to be set forth therein. GRANT THORNTON LLP Tampa, Florida April 13, 2001 85 88 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. (PARENT COMPANY) SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS
DECEMBER 31, ------------------------- 1999 2000 ----------- ----------- ASSETS Current Assets: Cash and cash equivalents................................. $ 697,914 $ 2,922,342 Due from affiliates....................................... 6,515,862 8,686,359 Note and interest receivable -- affiliate................. 1,409,939 1,198,930 Other current assets...................................... 41,468 -- ----------- ----------- Total current assets.............................. 8,665,183 12,807,631 Investment in subsidiaries.................................. 23,873,738 23,700,395 Note receivable -- affiliate................................ 2,782,560 -- Other assets................................................ 51,600 -- ----------- ----------- Total assets...................................... $35,373,081 $36,508,026 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Due to affiliates......................................... $ 2,187,933 $ 3,379,762 Other current liabilities................................. 300,028 15,676 ----------- ----------- Total current liabilities......................... 2,487,961 3,395,438 Shareholders' Equity........................................ 32,885,120 33,112,588 ----------- ----------- Total liabilities and shareholders' equity........ $35,373,081 $36,508,026 =========== ===========
The "Notes to Consolidated Financial Statements of Insurance Management Solutions Group, Inc. and Subsidiaries" are an integral part of these statements. See accompanying "Notes to Condensed Financial Information of Registrant." 86 89 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. (PARENT COMPANY) SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, ----------------------------------- 1998 1999 2000 ---------- ---------- --------- Interest Income: Affiliates............................................... $ -- $ 115,540 $ 262,825 Non-affiliates........................................... 10,286 173,617 35,364 ---------- ---------- --------- Total interest income............................ 10,286 289,157 298,189 ---------- ---------- --------- Expenses: Selling, general and administrative...................... 5,065 172,687 507,367 Interest expense -- affiliates........................... 354,339 100,156 -- Other expenses, net...................................... -- 23,651 59,644 ---------- ---------- --------- Total expenses................................... 359,404 296,494 567,011 ---------- ---------- --------- Loss from Operations Before Income Tax Benefit (Provision) and Equity in Earnings (Losses) of Subsidiaries.......... (349,118) (7,337) (268,822) Income Tax Benefit (Provision)............................. 129,400 4,704 (67,200) ---------- ---------- --------- Loss from Operations Before Equity in Earnings (Losses) of Subsidiaries............................................. (219,718) (2,633) (336,022) Equity in Earnings (Losses) of Subsidiaries................ 4,072,709 3,197,693 (173,344) ---------- ---------- --------- Net Income (Loss).......................................... $3,852,991 $3,195,060 $(509,366) ========== ========== =========
The "Notes to Consolidated Financial Statements of Insurance Management Solutions Group, Inc. and Subsidiaries" are an integral part of these statements. See accompanying "Notes to Condensed Financial Information of Registrant." 87 90 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. (PARENT) SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, --------------------------------------- 1998 1999 2000 ----------- ------------ ---------- Cash Flows from Operating Activities: Net income (loss)..................................... $ 3,852,991 $ 3,195,060 $ (509,366) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in (earnings) losses of subsidiaries........ (3,852,991) (3,197,693) 173,344 Compensation expense related to non-employee stock options.......................................... -- 137,000 98,634 Non-cash compensation expense related to phantom stock plans...................................... -- -- 338,200 Changes in assets and liabilities: Other current assets............................. (74,437) 32,969 41,468 Other assets..................................... -- (52,101) 51,600 Other current liabilities........................ -- 28 15,647 ----------- ------------ ---------- Net cash provided by (used in) operating activities.................................. (74,437) 115,263 209,527 ----------- ------------ ---------- Cash Flows from Investing Activities: Issuance of Common Stock in connection with the acquisition of Geotrac............................. 5,766,181 -- -- Investment in preferred stock of subsidiary........... (6,750,000) -- -- Preferred stock dividend received from subsidiary..... -- 66,020 -- Cash dividends paid to majority shareholder........... (1,100,000) -- -- ----------- ------------ ---------- Net cash provided by (used in) investing activities.................................. (2,083,819) 66,020 -- ----------- ------------ ---------- Cash Flows From Financing Activities: Net proceeds received from initial public offering.... -- 19,163,897 -- Proceeds from the issuance of debt.................... 6,750,000 -- -- Repayment of debt..................................... (1,621,766) (5,128,234) -- Issuance of intercompany debt......................... -- (4,500,000) -- Repayment of intercompany debt........................ -- 307,501 2,993,569 Net advances to (from) affiliates..................... (1,856,872) (10,439,639) (978,668) ----------- ------------ ---------- Net cash provided by (used in) financing activities.................................. 3,271,362 (596,475) 2,014,901 ----------- ------------ ---------- Increase in Cash and Cash Equivalents................... 1,113,106 (415,192) 2,224,428 Cash and Cash Equivalents, beginning of period.......... -- 1,113,106 679,914 ----------- ------------ ---------- Cash and Cash Equivalents, end of period................ $ 1,113,106 $ 697,914 $2,922,342 =========== ============ ==========
The "Notes to Consolidated Financial Statements of Insurance Management Solutions Group, Inc. and Subsidiaries" are an integral part of these statements. See accompanying "Notes to Condensed Financial Information of Registrant." 88 91 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. (REGISTRANT) NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT NOTE 1 -- BASIS OF PRESENTATION Pursuant to the rules and regulations of the Securities and Exchange Commission, the Condensed Financial Statements of the Registrant do not include all of the information and notes normally included with financial statements prepared in accordance with generally accepted accounting principles. It is, therefore, suggested that these Condensed Financial Statements be read in conjunction with the Consolidated Financial Statements and Notes thereto include in the Registrant's Annual Report as referenced in Form 10-K, Part II, Item 8. NOTE 2 -- CASH DIVIDENDS FROM SUBSIDIARIES No dividends have been declared or paid by the Registrant's subsidiaries for any of the periods presented. NOTE 3 -- RESTRICTED NET ASSETS AND RETAINED EARNINGS See Note 4 to the Consolidated Financial Statements of the Company. NOTE 4 -- ACQUISITIONS AND DISPOSITIONS In July, 1997, the Company, through its subsidiary, BHDS, acquired a 49% equity interest in YoSystems from Daniel J. White ("Mr. White"), the corporation's president and then sole shareholder. In July, 1997, YoSystems concurrently acquired all of the issued and outstanding shares of capital stock of SMS Geotrac, Inc. SMS Geotrac, Inc. merged into YoSystems, with YoSystems becoming the surviving entity, which then changed its name to Geotrac, Inc. In July, 1998, the Company acquired the remaining 51% equity interest in Geotrac, Inc. (formerly YoSystems) pursuant to the merger of Geotrac, Inc. with and into BHDS, with the surviving entity being known as "Geotrac of America, Inc." The Company acquired the remaining 51% interest from Mr. White and his wife and certain minority shareholders. Effective January 7, 1999, the Company acquired Colonial Catastrophe Claims Corporation, a Florida corporation. 89 92 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. INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. By: /s/ DAVID M. HOWARD ------------------------------------ David M. Howard President and Chief Executive Officer April 17, 2001 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David K. Meehan and David M. Howard, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto, and any other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on April 17, 2001.
SIGNATURE TITLE --------- ----- /s/ DAVID K. MEEHAN Chairman of the Board and Director - ----------------------------------------------------- David K. Meehan /s/ DAVID M. HOWARD President, Chief Executive Officer and Director - ----------------------------------------------------- (Principal Executive Officer) David M. Howard /s/ ROBERT G. MENKE Director - ----------------------------------------------------- Robert G. Menke /s/ WILLIAM D. HUSSEY Director - ----------------------------------------------------- William D. Hussey /s/ DANIEL J. WHITE Director - ----------------------------------------------------- Daniel J. White /s/ CHRISTOPHER P. BREAKIRON Vice President, Chief Financial Officer, Treasurer - ----------------------------------------------------- and Secretary (Principal Financial and Accounting Christopher P. Breakiron Officer)
90 93
SIGNATURE TITLE --------- ----- /s/ ROBERT M. MENKE Director - ----------------------------------------------------- Robert M. Menke /s/ JOHN A. GRANT, JR. Director - ----------------------------------------------------- John A. Grant, Jr. /s/ E. RAY SOLOMON Director - ----------------------------------------------------- E. Ray Solomon /s/ ALEJANDRO M. SANCHEZ Director - ----------------------------------------------------- Alejandro M. Sanchez /s/ JOHN S. MCMULLEN Director - ----------------------------------------------------- John S. McMullen
91 94 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 3.1 -- Amended and Restated Articles of Incorporation of Insurance Management Solutions Group, Inc.* 3.2 -- Amended and Restated Bylaws of Insurance Management Solutions Group, Inc.* 4.1 -- Specimen certificate for the Common Stock of Insurance Management Solutions Group, Inc.* 10.1 -- Employment Agreement, dated August 10, 1998, between David K. Meehan and Insurance Management Solutions Group, Inc.* 10.2 -- Insurance Management Solutions Group, Inc. Long Term Incentive Plan.* 10.3 -- Insurance Management Solutions Group, Inc. Non-Employee Directors' Stock Option Plan.* 10.4 -- Snell Arcade Building Lease, dated May 15, 1996, between Snell Arcade Limited Company and Bankers Insurance Group, Inc., as revised and assigned to Insurance Management Solutions Group, Inc., effective January 1, 1998.* 10.5 -- Bankers Building -- 5th Street North Lease Agreement, dated January 1, 1997, between Bankers Insurance Group, Inc. and Insurance Management Solutions Group, Inc.* 10.6 -- Bankers Financial Center Lease Agreement, dated January 1, 1997, between Bankers Insurance Company and Insurance Management Solutions Group, Inc.* 10.7 -- Lease, dated September 2, 1994, between DanYo LLC (as successor to Sandan) and SMS Geotrac, Inc.* 10.8 -- Indenture of Lease, dated September 23, 1994, between Southview Business Center, Ltd., an Ohio limited partnership, and SMS Geotrac, Inc., including Addendum I, dated March 20, 1995, and Addendum II, dated December 8, 1995.* 10.9 -- Master Equipment Lease Agreement, dated May 11, 1995, and executed on May 15, 1995, between National City Leasing Corporation and SMS Geotrac, Inc.* 10.10 -- Term Lease Master Agreement, dated June 30, 1995, between IBM Credit Corporation and SMS Geotrac, Inc.* 10.11 -- Employment Agreement, dated June 11, 1998, between Jeffrey S. Bragg and Insurance Management Solutions Group, Inc.* 10.12 -- Administration Services Agreement, dated January 1, 1998, between Bankers Insurance Group, Inc. and Insurance Management Solutions Group, Inc., including Addendum to Administration Services Agreement, dated December 2, 1998 and effective January 1, 1998, and Addendum to Administration Services Agreement, effective January 1, 1999.* 10.13 -- Service Agreement, dated January 1, 1998, between Insurance Management Solutions, Inc. and Bankers Insurance Company, including Addendum dated April 1, 1998 and form of Addendum to Service Agreements effective January 1, 1999.* 10.14 -- Service Agreement dated January 1, 1998 between Insurance Management Solutions, Inc. and Bankers Security Insurance Company, including form of Addendum to Service Agreements effective January 1, 1999. * 10.15 -- Service Agreement dated January 1, 1998 between Insurance Management Solutions, Inc. and First Community Insurance Company, including form of Addendum to Service Agreements effective January 1, 1999. * 10.16 -- Vendor Flood Insurance Agreement, dated January 1, 1996, between Insurance Management Solutions, Inc. (as successor to Insurance Management Information Services, Inc.) and Mobile USA Insurance Company, Inc.*
E-1 95
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.17 -- Vendor Flood Insurance Agreement, dated November 10, 1995, between AAA Auto Club South Insurance Company and Insurance Management information Services, Inc.* 10.18 -- Flood Insurance Program Services Agreement by and among Insurance Management Information Services, Inc., American Alternative Insurance Corporation, and Corporate Insurance Agency Services.* 10.19 -- Agreement and Plan of Merger, dated May 12, 1998, by and among Geotrac, Inc., Insurance Management Solutions, Inc., Daniel J. and Sandra White, Bankers Insurance Group, Inc. and Bankers Hazard Determination Services, Inc.* 10.20 -- Employment Agreement, dated July 31, 1998, between Geotrac of America, Inc. (as successor to Geotrac, Inc.) and Daniel J. White.* 10.21 -- Term Lease Master Agreement, dated August 6, 1996, between IBM Credit Corporation and Bankers Insurance Company, assigned by flankers Insurance Company to Insurance Management Solutions, Inc., effective April 1, 1998, pursuant to Sales and Assignment Agreement, dated May 6, 1998.* 10.22 -- Sales and Assignment Agreement, dated May 6, 1998, by and between Insurance Management Solutions Group, Inc., Insurance Management Solutions, Inc., Bankers Insurance Group, Inc., Bankers Insurance Services, Inc., Bankers Life Insurance Company, Southern Rental & Leasing Corporation, Bankers Insurance Company and Insurance Management Information Services, Inc.* 10.23 -- Corporate Governance Agreement, dated July 31, 1998, between Geotrac, Inc., Daniel J. White and Insurance Management Solutions Group, Inc.* 10.24 -- Tax Indemnity Agreement dated July 31, 1998 between Bankers Insurance Group, Inc., Insurance Management Solutions Group, Inc. and Daniel J. and Sandra White.* 10.25 -- Flood Insurance Agreement, dated January 6, 1998, between First Community Insurance Company and Keystone Insurance Company.* 10.26 -- Marketing Agreement, dated November 14, 1997, between First Community Insurance Company and Nobel Insurance Company.* 10.27 -- Flood Insurance Agreement, dated February 11, 1998, between First Community Insurance Company and Horace Mann Insurance Company.* 10.28 -- Flood Compliance Service Agreement dated November 1, 1996, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and Mortgage Corporation of America.* 10.29 -- Flood Compliance Service Agreement dated March 1, 1997, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and CitFed Mortgage Corporation of America.* 10.30 -- Flood Compliance Service Agreement dated March 1, 1998, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac), ABN AMRO North American and certain of its affiliates.* 10.31 -- Flood Compliance Service Agreement dated April 12, 1997, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and Third Federal Savings.* 10.32 -- Flood Compliance Service Agreement dated April 9, 1997, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and SMS Geotrac) and MidAm, Inc.* 10.33 -- Flood Compliance Service Agreement dated December 28, 1995, between Geotrac of America, Inc. (as successor to Geotrac, Inc.) and Crestar Bank.* 10.34 -- Flood Compliance Service Agreement dated April 1, 1996, between Geotrac of America, Inc.(as successor to Geotrac, Inc. and SMS Geotrac) and ReliaStar Mortgage Corporation.*
E-2 96
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.35 -- Flood Zone Determination Agreement dated March 25, 1993, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and National Flood Certification Services, Inc.) and AIG Consultants, Inc.* 10.36 -- Flood Zone Determination Agreement dated December 28, 1995, between Geotrac of America, Inc. (as successor to Bankers Hazard Determination Services, Inc.) and SouthTrust Corporation, as amended on June 3, 1997.* 10.37 -- Flood Zone Determination Agreement dated July 14, 1994, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and National Flood Certification Services, Inc.) and SunBank, N.A.* 10.38 -- Flood Zone Determination Agreement dated November 8, 1993, between Geotrac of America, Inc. (as successor to Geotrac, Inc. and National Flood Certification Services, Inc.) and Royal Indemnity Company.* 10.39 -- Flood Insurance Agreement, dated February 17, 1995, between First Community Insurance Company and Armed Forces Insurance Exchange, as amended.* 10.40 -- Flood Insurance Agreement, dated November 17, 1995, between First Community Insurance Company and Amica Mutual Insurance Company, as amended.* 10.41 -- Non-Qualified Stock Option Plan.* 10.42 -- Funding Agreement, dated June 19, 1998, by and between Bankers Insurance Group, Inc. and Insurance Management Solutions Group, Inc.* 10.43 -- Assignment of Registered Service Mark ("Floodwriter"), dated May 7, 1998, from Bankers Insurance Company to Insurance Management Solutions, Inc.* 10.44 -- Assignment of Registered Service Mark ("Undercurrents"), dated May 7, 1998, from Bankers Insurance Company to Insurance Management Solutions, Inc.* 10.45 -- Registration Rights Agreement, dated July 31, 1998, between Insurance Management Solutions Group, Inc. and Daniel J. and Sandra White.* 10.46 -- Software License Agreement, effective January 1, 1998, between Insurance Management Solutions, Inc., Bankers Insurance Group, Inc. and Bankers Insurance Company.* 10.47 -- Tax Indemnity Agreement dated July 31, 1998 between Insurance Management Solutions Group, Inc., Insurance Management Solutions, Inc. and Geotrac of America, Inc., including Addendum dated July 31, 1998.* 10.48 -- Tax Allocation Agreement dated July 31, 1998 between Insurance Management Solutions Group, Inc., Insurance Management Solutions, Inc. and Geotrac of America, Inc., including Addendum dated July 31, 1998.* 10.49 -- Articles of Merger filed with the Florida Department of State relating to the merger between Bankers Hazard Determination Services, Inc. and Geotrac, Inc.* 10.50 -- Certificate of Merger filed with the Ohio Department of State relating to the merger between Bankers Hazard Determination Services, Inc. and Geotrac, Inc.* 10.51 -- Secrecy and Confidentiality Agreement, dated October 8, 1993, between Geotrac of America, Inc. (formerly Geotrac, Inc.) and Kirloskar Computer Services, Ltd.* 10.52 -- Service Agreement dated December 1, 1998 between Insurance Management Solutions, Inc. and Bankers Life Insurance Company, including Addendum to Service Agreements dated December 11, 1998 and effective January 1, 1999* 10.53 -- Stock Purchase Agreement, dated July 31, 1997, between YoSystems, Inc., Bankers Hazard Determination Services, Inc. and Daniel J. and Sandra White.* 10.54 -- AYO Claims Agreement between Florida Windstorm Underwriting Association and Bankers Insurance Group, Inc., dated February, 1998.*
E-3 97
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.55 -- Assignment of AYO Claims Agreement among Bankers Insurance Group, Inc., Bankers Insurance Company and Florida Windstorm Underwriting Association dated December 15, 1998.* 10.56 -- Software Transfer Agreement dated September 1, 1998 by and among Bankers Insurance Group, Inc., Bankers Insurance Company, Insurance Management Solutions, Inc., and First Community Insurance Company.* 10.57 -- Registration Rights Agreement dated January, 1999, between Insurance Management Solutions Group, Inc. and J. Douglas Branham and Felicia A. Rivas.* 10.58 -- Stock Purchase Agreement dated December 10, 1998 between Colonial Catastrophe Claims Corporation, J. Douglas Branham, Felicia A. Rivas, and Insurance Management Solutions Group, Inc., including Addenda thereto.* 10.59 -- Loan Agreement dated December 16, 1998 between Bankers Insurance Group, Inc. and Western International Insurance Company.* 10.60 -- Promissory Note of Bankers Insurance Group, Inc. in favor of Western International Insurance Company* 10.61 -- Agreement for Satisfaction of Debt and Capitalization of Subsidiary dated December 16, 1998 between Venture Capital Corporation and Western International Insurance Company.* 10.62 -- Plan of Merger dated January 7, 1999 and effective January 15, 1999 between IMS Colonial, Inc. and Colonial Catastrophe Claims Corporation.* 10.63 -- Flood Insurance Services Agreement, dated January 14, 1999, by and between Insurance Management Solutions Group, Inc. and Farmers Services Corporation.* 10.64 -- Funding Agreement, dated February 16, 1999, by and between Bankers Insurance Group, Inc., Bankers Insurance Company, Venture Capital Corporation and Western International Insurance Company.* 10.65 -- Flood Insurance Services Agreement, dated October 23, 1998, by and between Insurance Management Solutions, Inc. and Middlesex Mutual Assurance Company.* 10.66 -- Flood Insurance Services Agreement, effective January 13, 1999, by and between Insurance Management Solutions, Inc. and Island Insurance Companies, Ltd.* 10.67 -- Lease Agreement, dated February 1, 1999, by and between Colonial Real Estate of Dunedin, Inc. and Colonial Claims Corporation.* 10.68 -- Second Addendum to Service Agreements, effective as of April 1, 1999, by and between Insurance Management Solutions, Inc. and each of Bankers Insurance Company, First Community Insurance Company and Bankers Security Insurance Company.* 10.69 -- Technical Support Services Agreement, dated April 1, 1999, by and between Insurance Management Solutions, Inc. and Bankers Insurance Group, Inc. and its subsidiaries.* 10.70 -- Lease Agreement, dated September 27, 1999, by and between Koger Equity, Inc. and Insurance Management Solutions Group, Inc.* 10.71 -- Insurance Administration Services Agreement, effective as of May 3, 2000, by and between Insurance Management Solutions, Inc. and Reliance Insurance Company.* 10.72 -- Insurance Administration Services Agreement, effective as of June 30, 2000, by and between Insurance Management Solutions, Inc. and Instant Insurance Holding, Inc.* 10.73 -- Development Services Agreement, effective as of June 30, 2000, by and between Insurance Management Solutions, Inc. and Instant Insurance Holding, Inc.* 10.74 -- Insurance Administration Services Agreement (Interim), effective as of June 22, 2000, by and between Insurance Management Solutions, Inc. and Instant Insurance Holding, Inc.*
E-4 98
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.75 -- Insurance Administration Services Agreement Termination and Interim Services Addendum, effective as of August 1, 2000, by and between Insurance Management Solutions, Inc., International Catastrophe Insurance Managers, LLC and Clarendon National Insurance Company, including all schedules and exhibits thereto.* 10.76 -- Insurance Management Solutions Group, Inc. 2000 Stock Incentive Plan 10.77 -- Insurance Management Solutions Group, Inc. 2000 Non-Employee Director Stock Plan 10.78 -- Employment Agreement, dated August 19, 1998, between Robert G. Gantley and Insurance Management Solutions, Inc. 10.79 -- Release and Separation Agreement, dated April 12, 2001, between Christopher P. Breakiron and Insurance Management Solutions Group, Inc. 10.80 -- Consulting Agreement, dated April 12, 2001, between Christopher P. Breakiron and Insurance Management Solutions Group, Inc. 10.81 -- Asset Purchase Agreement, including Indemnification Agreement, Bill of Sale and Assignment of Flood Monitoring Agreement, effective July 31, 2000, between IMS Direct, Inc. and Bankers Insurance Services, Inc. 10.82 -- Letter Agreement, dated April 13, 2001, by and between Insurance Management Solutions, Inc., Bankers Insurance Group, Inc., Bankers Insurance Company, First Community Insurance Company and Bankers Security Insurance Company. 10.83 -- Settlement Agreement, dated February 20, 2001, by and between Instant Insurance Holdings, Instant Auto Insurance Company and Insurance Management Solutions, Inc. 10.84 -- Commitment Letter to advance service fee payments, dated April 13, 2001, between Insurance Management Solutions, Inc. and Bankers Insurance Group, Inc. 21.1 -- List of subsidiaries of Insurance Management Solutions Group, Inc.* 24.1 -- Power of Attorney relating to subsequent amendments (included on signature page hereto).
- --------------- * Indicates document incorporated herein by reference. E-5 EX-10.76 2 g67403ex10-76.txt IMSG, INC. 2000 STOCK INCENTIVE PLAN 1 Exhibit 10.76 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. 2000 STOCK INCENTIVE PLAN (Effective as of October 19, 2000, subject to shareholder approval) SECTION 1. PURPOSE AND DEFINITIONS (a) PURPOSE. The purpose of the Insurance Management Solutions Group, Inc. 2000 Stock Incentive Plan is to promote the best interests of Insurance Management Solutions Group, Inc., its Subsidiaries and shareholders by providing for the acquisition of an equity interest in the Company by employees and certain consultants, advisors and other persons providing services to the Company and its Subsidiaries and to enable the Company and its Subsidiaries to retain the services of such individuals upon whose judgment, interests, skills and efforts the successful conduct of their operations is largely dependent. (b) DEFINITIONS. The following terms shall have the following respective meanings unless the context requires otherwise: (1) The term "Board" shall mean the Board of Directors of the Company. (2) A "Change of Control" of the Company shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (A) any "Person" (as such term is defined in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that the term "Person" shall not include (1) the Company or any of its subsidiaries, (2) Bankers Financial Corporation, Bankers Insurance Group, Inc. or any of their Subsidiaries, (3) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, (4) an underwriter temporarily holding securities pursuant to an offering of such securities, or (5) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company) is or becomes the "Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 25% or more of either the then outstanding shares of Stock of the Company or the combined voting power of the Company's then outstanding voting securities; or 2 (B) during any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors of the Company at the beginning of the period; or (C) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation or person as a result of which less than 50% of the outstanding voting securities of the surviving or resulting person would be owned by the former shareholders of the Company (other than a shareholder who is an "affiliate," as defined in the Exchange Act, of any party to such consolidation or merger); or (D) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (in one transaction or a series of related transactions within any period of 24 consecutive months), other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale. Notwithstanding the foregoing, no "Change of Control" shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the shares of Stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions. (3) The term "Code" shall mean the Internal Revenue Code of 1986, or any successor thereto, as the same may be amended and in effect from time to time. (4) The term "Committee" shall mean the committee appointed pursuant to Section 2 to administer the Plan. (5) The term "Company" shall mean Insurance Management Solutions Group, Inc. and any successor thereto. (6) The term "Covered Executive" shall mean the Chief Executive Officer and the other four highest compensated officers of the Company and its Subsidiaries at year-end whose compensation is required to be reported in the Summary Compensation Table of the Company's Proxy Statement. -2- 3 (7) The term "Eligible Individual" shall mean any employee of the Company or a Subsidiary and any consultant, advisor or other person who provides services to the Company or a Subsidiary, including any person who provides services to the Company or its Subsidiaries pursuant to a lease or similar arrangement. (8) The term "Exchange Act" shall mean the Securities Exchange Act of 1934, as the same may be amended and in effect from time to time. (9) For purposes of determining the "Fair Market Value" of a share of Stock as of any date, the following rules shall apply: (A) if the principal market for the Stock is a national securities exchange or the Nasdaq Stock Market, then the "Fair Market Value" as of that date shall be the average of the high and low sale prices of the Stock on that date on the principal exchange or market on which the Stock is then listed or admitted to trading; (B) if sale prices are not available or if the principal market for the Stock is not a national securities exchange and the Stock is not quoted on the Nasdaq Stock Market, the average between the highest bid and lowest asked prices for the Stock on such day as reported on the Nasdaq OTC Bulletin Board Service or by the National Quotation Bureau Incorporated or a comparable service; or (C) if the day is not a business day, and as a result, paragraphs (A) and (B) next above are inapplicable, the Fair Market Value of the Stock shall be determined as of the next earlier business day. If paragraphs (A) and (B) next above are otherwise inapplicable, then the Fair Market Value of the Stock shall be determined in good faith by the Committee. (10) The term "Net Tangible Book Value Per Share" shall mean the Net Tangible Book Value of a share of Stock as of the end of the Company's most recent fiscal quarter ended on or prior to the relevant date, as reported on the most recent Form 10-Q or Form 10-K filed by the Company with the Securities and Exchange Commission. The term Net Tangible Book Value per share of Stock shall be determined by dividing (1) the Company's tangible net worth (total tangible assets less total liabilities) by (2) the total number of shares of Stock outstanding. For purposes of determining Net Tangible Book Value, tangible assets shall exclude (A) intangible assets (including without limitation goodwill), that cannot be sold separately from all other assets of the business and (B) any other intangible asset for which recovery of book value is subject to significant uncertainty or illiquidity. -3- 4 (11) The term "Option" or "Options" shall mean the option to purchase Stock in accordance with Section 5 and such other terms and conditions as may be prescribed by the Committee. An Option may be either an "incentive stock option", as such term is defined in the Code, or shall otherwise be designated as an option entitled to favorable treatment under the Code ("ISO"), or a "nonqualified stock option". ISOs and nonqualified stock options are individually called an "Option" and collectively called "Options". (12) The term "Other Stock Based Awards" shall mean awards of Stock or other rights made in accordance with Section 6. (13) The term "Participant" shall mean an Eligible Individual who has been designated for participation in the Plan. (14) The term "Plan" shall mean the "Insurance Management Solutions Group, Inc. 2000 Stock Incentive Plan" as the same may be amended and in effect from time to time. (15) The term "Stock Appreciation Right" shall mean the right to receive, without payment to the Company, an amount of cash or Stock as determined in accordance with Section 5 based upon the amount by which the Fair Market Value of a share of Stock on the relevant valuation date exceeds the grant price. (16) The term "Subsidiary" shall mean any corporation during any period in which it is a "subsidiary corporation," as that term is defined in Section 424(f) of the Code, with respect to the Company. (17) The term "Stock" shall mean shares of the Company's common stock, par value $.01 per share. SECTION 2. ADMINISTRATION (a) COMMITTEE. The Plan shall be administered by a committee of the Board consisting of not less than two (2) members of the Board who meet the "outside" director requirements of Section 162(m) of the Code and the "non-employee director" requirements of Rule 16b-3 of the Exchange Act. The Committee shall administer the Plan and perform such other functions as are assigned to it under the Plan. The Committee is authorized, subject to the provisions of the Plan, to determine those individuals to whom awards will be granted, to determine the types of awards and the number of shares covered by awards, to determine the terms, conditions and other provisions of such awards, to establish such rules and regulations as it may deem appropriate for the proper administration of the Plan, and to make such determinations under, and such interpretations of, and to take such steps in connection with, the Plan and the awards as it may deem necessary or advisable, in each case in its sole discretion. The Committee's decisions and determinations under the Plan need not -4- 5 be uniform and may be made selectively among Participants, whether or not they are similarly situated. Any authority granted to the Committee may also be exercised by the Board, except to the extent that the grant or exercise of such authority would cause any qualified performance-based award to cease to qualify for exemption under Section 162(m) of the Code. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control. (b) DELEGATION OF AUTHORITY. To the extent permitted by applicable law, the Committee may delegate any or all of its powers and duties under the Plan, including, but not limited to, its authority to make awards under the Plan, to one or more executive officers of the Company, pursuant to such conditions or limitations as the Committee may establish; PROVIDED, HOWEVER, that the Committee shall not delegate its authority to (1) act on matters affecting any Participant who is subject to Section 16 of the Exchange Act, or (2) amend or modify the Plan pursuant to the provisions of Section 11. To the extent of any such delegation, the term "Committee" when used herein shall mean and include any such delegate. SECTION 3. STOCK AVAILABLE FOR PLAN AWARDS (a) SHARES AVAILABLE. Subject to adjustment as provided in Section 3(b): (1) NUMBER OF SHARES AVAILABLE. The number of shares of Stock with respect to which awards may be granted under the Plan shall be 1,000,000, plus up to 750,000 shares of Stock that are represented by awards granted under the Insurance Management Solutions Group, Inc. Long Term Incentive Plan, which are forfeited, expire or are cancelled without delivery of shares of Stock or which result in the forfeiture of shares of Stock back to the Company. If any shares of Stock covered by an award granted under the Plan, or to which any award relates, are forfeited or if an award otherwise terminates, expires or is cancelled prior to the delivery of all of the shares or of other consideration issuable or payable pursuant to such award, then the number of shares of Stock counted against the number of shares available under the Plan in connection with the grant of such award, to the extent of any such forfeiture, termination, expiration or cancellation, shall again be available for the granting of additional awards under the Plan. (2) LIMITATIONS ON AWARDS TO INDIVIDUAL PARTICIPANTS. No Covered Executive shall be granted, during any calendar year, (A) Options for more than 100,000 shares of Stock and (B) Stock Appreciation Rights with respect to more than 50,000 shares of Stock under the Plan. Such number of shares as specified in the preceding sentence shall be subject to adjustment in accordance with the terms of Section 3(b) hereof. In all cases, determinations under this Section 3(a)(2) shall be made in a manner that is consistent with the exemption for performance-based compensation provided by Section 162(m) of the Code (or any successor provision thereto) and any regulations promulgated thereunder. (3) ACCOUNTING FOR AWARDS. The number of shares of Stock covered by an award under the Plan, or to which such award relates, shall be counted on the date of grant of such award against the number of shares available for granting awards under the Plan. (4) SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any shares of Stock delivered pursuant to an award under the Plan may consist, in whole or in part, of authorized and unissued shares or of treasury shares. -5- 6 (b) ADJUSTMENTS. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares of Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company, or other similar corporate transaction or event affects the shares of Stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee may, in such manner as it may deem equitable, adjust any or all of (1) the number and type of shares of Stock subject to the Plan and which thereafter may be made the subject of awards under the Plan, (2) the number and type of shares of Stock which may be granted to an individual participant under the Plan, (3) the number and type of shares of Stock subject to outstanding awards, and (4) the grant, purchase, or exercise price with respect to any award; or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding award in lieu of such adjustment or in exchange for cancellation of such award; PROVIDED, HOWEVER, in each case, that with respect to awards of ISOs no such adjustment shall be authorized to the extent that such authority would cause the Plan to violate Section 422(b) of the Code (or any successor provision thereto); and PROVIDED FURTHER that the number of shares subject to any award payable or denominated in shares shall always be a whole number. SECTION 4. ELIGIBILITY Participants in the Plan shall be selected by the Committee from among those Eligible Individuals as the Committee may designate from time to time. The Committee shall consider such factors as it deems appropriate in selecting Participants and in determining the type and amount of their respective awards. The Committee's designation of a Participant in any year shall not require the Committee to designate such person to receive an award in any other year. SECTION 5. OPTIONS AND STOCK APPRECIATION RIGHTS (a) GRANT OF OPTIONS. (1) The Committee, at any time and from time to time while the Plan is in effect, may authorize the granting of Options to Eligible Individuals for such number of shares as it shall designate, subject to the provisions of this Section 5 and Section 3. Each Option granted pursuant to the Plan shall be designated at the time of grant as either an ISO or a nonqualified stock option; PROVIDED, HOWEVER, that only Eligible Individuals who are employees of the Company or one of its Subsidiaries at the time of grant may receive grants of ISOs. (2) The date on which an Option is granted shall be the date of authorization of such grant or such later date as may be determined at the time such grant is authorized. Any individual may hold more than one Option. -6- 7 (b) EXERCISE PRICE. The exercise price per share of an Option granted under the Plan shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant of such Option, or, if greater, the Net Tangible Book Value Per Share on the date of grant of such Option. (c) GRANT OF STOCK APPRECIATION RIGHTS. (1) The Committee, at any time and from time to time while the Plan is in effect, may authorize the granting of Stock Appreciation Rights to Eligible Individuals for such numbers of shares as it shall designate, subject to the provisions of this Section 5 and Section 3. Each Stock Appreciation Right may relate to all or a portion of a specific Option granted under the Plan and may be granted concurrently with the Option to which it relates or at any time prior to the exercise, termination or expiration of such Option (a "Tandem SAR"), or may be granted independently of any Option, as determined by the Committee. If the Stock Appreciation Right is granted independently of an Option, the grant price of such right shall be the Fair Market Value of Stock on the date of grant, or, if greater, the Net Tangible Book Value Per Share on the date of grant; PROVIDED, HOWEVER, that the Committee may, in its discretion, fix a grant price in excess of the Fair Market Value of Stock on such grant date. (2) Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to receive, without payment to the Company, either (A) that number of shares of Stock determined by dividing (i) the total number of shares of Stock subject to the Stock Appreciation Right being exercised by the Participant, multiplied by the amount by which the Fair Market Value of a share of Stock on the day the right is exercised exceeds the grant price (such amount being hereinafter referred to as the "Spread"), by (ii) the Fair Market Value of a share of Stock on the exercise date; or (B) cash in an amount determined by multiplying (i) the total number of shares of Stock subject to the Stock Appreciation Right being exercised by the Participant, by (ii) the amount of the Spread; or (C) a combination of shares of Stock and cash, in amounts determined as set forth in clauses (A) and (B) above, as determined by the Committee in its sole discretion; PROVIDED, HOWEVER, that, in the case of a Tandem SAR, the total number of shares which may be received upon exercise of a Stock Appreciation Right for Stock shall not exceed the total number of shares subject to the related Option or portion thereof, and the total amount of cash which may be received upon exercise of a Stock Appreciation Right for cash shall not exceed the Fair Market Value on the date of exercise of the total number of shares subject to the related Option or portion thereof. (d) TERMS AND CONDITIONS. (1) Each Option and Stock Appreciation Right granted under the Plan shall be exercisable on such date or dates, during such period, for such number of shares of Stock and subject to such further conditions as shall be determined pursuant to the provisions of the award agreement with respect to such Option and Stock Appreciation Right; PROVIDED, HOWEVER, that a Tandem SAR shall not be exercisable prior to or later than the time the related Option could be exercised; and PROVIDED, FURTHER, that in any event no ISO shall be exercised beyond ten years from the date of grant. -7- 8 (2) The Committee may impose such conditions as it may deem appropriate upon the exercise of an Option or a Stock Appreciation Right, including, without limitation, a condition that the Stock Appreciation Right may be exercised only in accordance with rules and regulations adopted by the Committee from time to time. (3) With respect to Options issued with Tandem SARs, the right of a Participant to exercise a Stock Appreciation Right shall be cancelled if and to the extent the related Option is exercised, and the right of a Participant to exercise an Option shall be cancelled if and to the extent that shares covered by such Option are used to calculate shares or cash received upon exercise of the Tandem SAR. (4) If any fractional share of Stock would otherwise be payable to a Participant upon the exercise of an Option or Stock Appreciation Right, the Participant shall be paid a cash amount equal to the same fraction of the Fair Market Value of the Stock on the date of exercise. (e) REDESIGNATION AS NONQUALIFIED STOCK OPTION. If an ISO at any time fails to meet the requirements of Section 422 of the Code, such option, to the extent the requirements of Section 422 of the Code are not met, shall be treated as a nonqualified stock option for Federal income tax purposes automatically without further action by the Committee, effective as of the first date on which any such requirement is not met. (f) AWARD AGREEMENT. Each Option and Stock Appreciation Right shall be evidenced by an award agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve. (g) PAYMENT FOR OPTION SHARES. (1) Payment for shares of Stock purchased upon exercise of an Option granted hereunder shall be made, either in full or, if the Committee shall so determine and at the election of the Participant, in installments, in such manner as provided in the applicable award agreement. (2) The Committee shall determine the methods and the forms for payment of the exercise price, including (A) by delivery of cash or shares of Stock (either actual delivery or by attestation) which have been beneficially owned by the Participant for a period of not less than six months prior to the date of exercise, (B) by delivery (including by fax) to the Company or its designated agent of an executed option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Stock and deliver the sale or margin loan proceeds directly to the Company to pay the exercise price, or (C) by a combination of cash and Stock. Any shares of Stock so delivered shall be valued at their Fair Market Value on the date of such exercise. (h) CERTAIN REPLACEMENT OPTIONS. Without in any way limiting the authority of the Committee to make grants of Options to Participants hereunder, and in order to induce Participants to retain ownership of the Stock acquired upon the exercise of Options, the Committee shall have the authority (but not an obligation) to include within any agreement setting forth the terms of any Options (or any amendment thereto) a provision entitling a Participant to further Options ("Replacement Options") in the event the Participant exercises -8- 9 any Options (including a Replacement Option) under the Plan, in whole or in part, by surrendering previously acquired shares of Stock. Any such Replacement Options shall (1) be nonqualified stock options, exercisable at an exercise price, unless otherwise determined by the Committee, of one hundred percent (100%) of the Fair Market Value of the shares of Stock on the date the Replacement Options are granted, (2) be for a number of shares of Stock equal to the number of shares surrendered, (3) only become exercisable on the terms specified by the Committee in the event the Participant holds, for a minimum period of time prescribed by the Committee, the shares of Stock the Participant acquired upon the exercise in connection with which the Replacement Options were issued, and (4) be subject to such other terms and conditions as the Committee may determine. SECTION 6. STOCK AND OTHER STOCK-BASED AND COMBINATION AWARDS (a) GRANTS OF OTHER STOCK-BASED AWARDS. The Committee, at any time and from time to time while the Plan is in effect, may grant Other Stock Based Awards to Eligible Individuals, as it may select. Such awards pursuant to which Stock is or may in the future be acquired, or awards valued or determined in whole or part by reference to, or otherwise based on, Stock, may include, but are not limited to awards of restricted Stock or awards denominated in the form of "stock units", grants of so-called "phantom stock" and options containing terms or provisions differing in whole or in part from Options granted pursuant to Section 5. Other Stock-Based Awards may be granted either alone, in addition to, in tandem with or as an alternative to any other kind of award, grant or benefit granted under the Plan or under any other employee plan of the Company, including a plan of any acquired entity. (b) TERMS AND CONDITIONS. Subject to the provisions of the Plan, the Committee shall have authority to determine the time or times at which Other Stock-Based Awards shall be made, the number of shares of Stock or stock units and the like to be granted or covered pursuant to such awards (subject to the provisions of Section 3) and all other terms and conditions of such awards, including, but not limited to, whether such awards shall be payable or paid in cash, Stock or otherwise. (c) CONSIDERATION FOR OTHER STOCK-BASED AWARDS. In the discretion of the Committee, any Other-Stock Based Award may be granted as a Stock bonus for no consideration other than services rendered. SECTION 7. NON-TRANSFERABILITY OF AWARDS; RESTRICTIONS ON DISPOSITION AND EXERCISE OF AWARDS (a) RESTRICTIONS ON TRANSFER OF OPTIONS OR STOCK APPRECIATION RIGHTS. Unless the Committee determines otherwise, no Option or Stock Appreciation Right shall be transferable by a Participant otherwise than by will or the laws of -9- 10 descent and distribution, and during the lifetime of a Participant the Option or Stock Appreciation Right shall be exercisable only by such Participant or such Participant's guardian or legal representative. (b) RESTRICTIONS ON TRANSFER OF CERTAIN OTHER STOCK-BASED AWARDS. Unless the Committee determines otherwise, no Other-Stock Based Award shall be transferable by a Participant otherwise than by will or the laws of descent and distribution, and during the lifetime of a Participant any such Other-Stock Based Award shall be exercisable only by such Participant or such Participant's guardian or legal representative. (c) ATTACHMENT AND LEVY. No award shall be subject, in whole or in part, to attachment, execution or levy of any kind, and any purported transfer in violation hereof shall be null and void. Without limiting the generality of the foregoing, no domestic relations order purporting to authorize a transfer of an award, or to grant to any person other than the Participant the authority to exercise or otherwise act with respect to an award, shall be recognized as valid. SECTION 8. DESIGNATION OF BENEFICIARIES Anything contained in the Plan to the contrary notwithstanding, a Participant may file with the Company a written designation of a beneficiary or beneficiaries under the Plan (subject to such limitations as to the classes and number of beneficiaries and contingent beneficiaries and such other limitations as the Committee from time to time may prescribe). A Participant may from time to time revoke or change any such designation of beneficiary. Any designation of beneficiary under the Plan shall be controlling over any other disposition, testamentary or otherwise; PROVIDED, HOWEVER, that if the Committee shall be in doubt as to the entitlement of any such beneficiary to any Option, Stock Appreciation Right or Other Stock-Based Award, or if applicable law requires the Company to do so, the Committee may determine to recognize only the legal representative of such Participant, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone. In the event of the death of any Participant, the term "Participant" as used in the Plan shall thereafter be deemed to refer to the beneficiary designated pursuant to this Section 8 or, if no such designation is in effect, the executor or administrator of the estate of such Participant, unless the context otherwise requires. SECTION 9. CHANGE OF CONTROL In the event of a Change of Control, the Board in its discretion may, at the time an award is made or at anytime thereafter, take one or more of the following actions: (a) provide for the acceleration of any time period relating to the exercise or realization of the award; (b) provide for the purchase of the award for an amount of cash or other property that could have been received upon the exercise or realization of the award had the award been currently exercisable or payable; (c) adjust the terms of the award in the manner determined by the Board to reflect the Change of Control; (d) cause the award to be assumed, or new right substituted therefor, by another entity; or (e) make such other provision as the Board may consider equitable and in the best interests of the Company. -10- 11 Notwithstanding anything contained in this Section 9, the Board may, in its sole and absolute discretion, amend, modify or rescind the provisions of this Section 9 if it determines that the operation of this Section 9 may prevent a transaction in which the Company or any Subsidiary is a party from being accounted for on a pooling-of-interests basis; PROVIDED, HOWEVER, that in such event, the Board shall take such action as it deems appropriate in order to maintain the benefits intended to be provided by awards granted under the Plan, based on the value (as determined by the Board) reflected by any awards outstanding under the Plan prior to the date such action is taken by the Board. SECTION 10. RIGHTS AS A SHAREHOLDER A Participant shall not have any rights as a shareholder with respect to any share covered by any award until such Participant shall have become the holder of record of such share. SECTION 11. TERM, AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN AND AGREEMENTS (a) TERM. Unless terminated earlier pursuant to subsection (b), the Plan shall terminate on October 18, 2010 (the "Termination Date"). However, unless otherwise expressly provided in the Plan or in an applicable award agreement, any award granted before the Termination Date may extend beyond the Termination Date and, to the extent set forth in the Plan, the authority of the Board to amend, alter, suspend, discontinue or terminate any such award, or to waive any conditions or restrictions with respect to any such award, and the authority of the Board to amend the Plan, shall extend beyond the Termination Date. (b) AMENDMENT, MODIFICATION AND TERMINATION OF PLAN. The Board may, from time to time, amend or modify the Plan or any outstanding award, including without limitation, to authorize the Committee to make awards payable in other securities or other forms of property of a kind to be determined by the Committee, and such other amendments as may be necessary or desirable to implement such awards, or terminate the Plan or any provision thereof, PROVIDED, HOWEVER, shareholder approval of any amendment of the Plan shall be obtained if otherwise required by the Code or any rules promulgated thereunder or any securities laws. (c) AMENDMENT OF AWARD AGREEMENT. The Committee may, at any time, amend any award agreement, subject to any restrictions or limitations provided herein or in such agreement. The Committee may, in whole or in part, waive any conditions or other restrictions with respect to any award granted under the Plan. (d) NO ADVERSE EFFECT. No amendment to or termination of the Plan or any provision hereof, and no amendment or cancellation of any outstanding award, by the Board or the shareholders of the Company, shall, without the written consent of the affected Participant, adversely affect any outstanding award, except as specifically provided in Section 3(b) or Section 9. The Committee's authority to act with respect to any outstanding award shall survive termination of the Plan. -11- 12 (e) CHANGES FOR LAWS. Notwithstanding the foregoing provisions, the Board shall have authority to amend outstanding awards and the Plan to take into account changes in law and tax and accounting rules as well as other developments, and to grant awards that qualify for beneficial treatment under such rules without shareholder approval. SECTION 12. TAXES The Company shall be entitled to withhold the amount of any tax attributable to any amount payable or shares of Stock deliverable under the Plan after giving the person entitled to receive such amount or shares of Stock notice as far in advance as practicable, and the Company may defer making payment or delivery if any such tax may be pending unless and until indemnified to its satisfaction. The Committee may, in its discretion and subject to such rules as it may adopt, permit a Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with (a) the exercise of a nonqualified stock option or (b) a disqualifying disposition of Stock received upon the exercise of an ISO by electing to (i) have the Company withhold shares of Stock, (ii) tender back shares of Stock received in connection with such benefit, or (iii) deliver other previously owned shares of Stock, in each case having a Fair Market Value equal to the amount to be withheld; PROVIDED, however, that the amount to be withheld shall not exceed the Participant's minimum total federal, state and local tax obligations associated with the transaction. The election must be made on or before the date as of which the amount of tax to be withheld is determined and the payment of such amount is otherwise required by the Committee. The Fair Market Value of fractional shares of Stock remaining after payment of the withholding taxes shall be paid to the Participant in cash. SECTION 13. FINALITY OF DETERMINATIONS Each determination, interpretation, or other action made or taken pursuant to the provisions of the Plan by the Board, the Committee or any executive officers of the Company administering the Plan shall be final and shall be binding and conclusive for all purposes and upon all persons, including, but without limitation thereto, the Company, the shareholders, the Committee and each of the members thereof, and the directors, officers, and employees of the Company and its Subsidiaries, the Participants, and their respective successors in interest. SECTION 14. NO RIGHTS TO CONTINUED EMPLOYMENT OR TO PLAN AWARD (a) NO RIGHT TO EMPLOYMENT. Nothing contained in this Plan, or in any booklet or document describing or referring to the Plan, shall be deemed to confer on any Participant the right to continue as an employee or director of the Company or a Subsidiary, whether for the duration of any vesting period under an award, or otherwise, or affect the right of the Company or a Subsidiary to terminate the employment or service of any Participant for any reason. -12- 13 (b) NO RIGHT TO AWARD. No employee or other person shall have any claim or right to be granted an award under the Plan. Having received an award under the Plan shall not give a Participant or any other person any right to receive any other award under the Plan. A Participant shall have no rights in any award, except as set forth herein and in the applicable award grant. SECTION 15. GOVERNING LAW AND CONSTRUCTION (a) GOVERNING LAW. The Plan and all actions taken hereunder shall be governed by, and the Plan shall be construed in accordance with, the laws of the State of Florida without regard to the principle of conflict of laws. Titles and headings to Sections are for purposes of reference only, and shall in no way limit, define or otherwise affect the meaning or interpretation of the Plan. Any legal action or proceeding with respect to this Plan, any award or any award agreement, or for recognition and enforcement of any judgment in respect thereof, may only be brought and determined in a court sitting in the County of Hillsborough or the County of Pinellas, in the State of Florida. (b) SEVERABILITY. If any provision of the Plan or any award agreement or any award (1) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or award, or (2) would disqualify the Plan, any award agreement or any award under any law deemed applicable by the Committee, then such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan, any award agreement or the award, such provision shall be stricken as to such jurisdiction, person or award, and the remainder of the Plan, any such award agreement and any such award shall remain in full force and effect. SECTION 16. OTHER PROVISIONS AND SECURITIES AND STOCK EXCHANGE REQUIREMENTS (a) OTHER PROVISIONS. The grant of any award under the Plan may also be subject to other provisions (whether or not applicable to the benefit awarded to any other Participant) as the Committee determines appropriate, including, without limitation, provisions for (1) the Participant's agreement to abide by any non-disclosure or non-compete requirements or restrictions as specified in the Participant's award agreement; (2) one or more means to enable Participants to defer recognition of taxable income relating to awards or cash payments derived therefrom, which means may provide for a return to a Participant on amounts deferred as determined by the Committee (PROVIDED that no such deferral means may result in an increase in the number of shares of Stock issuable hereunder); (3) the purchase of Stock under options in installments; or (4) the financing of the purchase of Stock under the options in the form of a promissory note issued to the Company by a Participant on such terms and conditions as the Committee determines. (b) RESTRICTIONS ON RESALE. Notwithstanding any other provision of the Plan, no person who acquires Stock pursuant to the Plan may, during any period of time that such person is an affiliate of the Company (within the meaning of the rules and regulations of the Securities Exchange Commission), sell or -13- 14 otherwise transfer such Stock, unless such offer and sale or transfer is made (1) pursuant to an effective registration statement under the Securities Act of 1933 ("1933 Act"), which is current and includes the Stock to be sold, or (2) pursuant to an appropriate exemption from the registration requirements of the 1933 Act, such as that set forth in Rule 144 promulgated pursuant thereto. (c) REGISTRATION, LISTING AND QUALIFICATION OF SHARES OF COMMON STOCK. Notwithstanding any other provision of the Plan, if at any time the Committee shall determine that the registration, listing or qualification of the Stock covered by an award upon any securities exchange or under any foreign, federal, state or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such award or the purchase or receipt of Stock in connection therewith, no Stock may be purchased, delivered or received pursuant to such award unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Committee. Any person receiving or purchasing Stock pursuant to an award shall make such representations and agreements and furnish such information as the Committee may request to assure compliance with the foregoing or any other applicable legal requirements. The Company shall not be required to issue or deliver any certificate or certificates for Stock under the Plan prior to the Committee's determination that all related requirements have been fulfilled. The Company shall in no event be obligated to register any securities pursuant to the 1933 Act or applicable state or foreign law or to take any other action in order to cause the issuance and delivery of such certificates to comply with any such law, regulation, or requirement. SECTION 17. EFFECTIVE DATE The Plan shall become effective on October 19, 2000, subject to the approval of the Plan by the shareholders of the Company within twelve (12) months before or after the date of adoption of the Plan by the Board. To the extent that any awards are made under the Plan prior to its approval by shareholders, the awards shall be contingent on approval of the Plan by the shareholders of the Company. -14- EX-10.77 3 g67403ex10-77.txt IMSG, INC. 2000 NON-EMPLOYEE DIRECTOR STOCK PLAN 1 Exhibit 10.77 INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. 2000 NON-EMPLOYEE DIRECTOR STOCK PLAN SECTION 1. ESTABLISHMENT INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. hereby establishes a stock plan for Non-employee Directors, as described herein, which shall be known as the "INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. 2000 NON-EMPLOYEE DIRECTOR STOCK PLAN" (the "Plan"). SECTION 2. PURPOSE The purpose of the Plan is to promote the long-term growth and financial success of the Company. The Plan is intended to secure for the Company and its shareholders the benefits of the long-term incentives inherent in increased common stock ownership by members of the Board who are not employees of the Company or its Subsidiaries. It is intended that the Plan will induce and encourage highly experienced and qualified individuals to serve on the Board and assist the Company in promoting a greater identity of interest between the Non-employee Directors and the shareholders of the Company. SECTION 3. DEFINITIONS The following terms shall have the respective meanings set forth below, unless the context otherwise requires: (a) "Board" shall mean the Board of Directors of the Company. (b) A "Change of Control" of the Company shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (i) any "Person" (as such term is defined in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that the term "Person" shall not include (1) the Company or any of its subsidiaries, (2) Bankers Financial Corporation, Bankers Insurance Group, Inc. or any of their Subsidiaries, (3) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, (4) an underwriter temporarily holding securities pursuant to an offering of such securities, or (5) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company) is or becomes the "Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 25% or more of either the then outstanding Shares of the Company or the combined voting power of the Company's then outstanding voting securities; or 2 (ii) during any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors of the Company at the beginning of the period; or (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation or person as a result of which less than 50% of the outstanding voting securities of the surviving or resulting person would be owned by the former shareholders of the Company (other than a shareholder who is an "affiliate," as defined in the Exchange Act, of any party to such consolidation or merger); or (iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (in one transaction or a series of related transactions within any period of 24 consecutive months), other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale. Notwithstanding the foregoing, no "Change of Control" shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the Shares of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions. (c) "Code" shall mean the Internal Revenue Code of 1986, as amended. (d) "Company" shall mean Insurance Management Solutions Group, Inc. (e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (f) For purposes of determining the "Fair Market Value" of a Share as of any date, the following rules shall apply: (i) if the principal market for the Shares is a national securities exchange or the Nasdaq Stock Market, then the "Fair Market Value" as of that date shall be the average of the high and low sale prices of the Shares on that date on the principal exchange or market on which the Shares are then listed or admitted to trading; -2- 3 (ii) if sale prices are not available or if the principal market for the Shares is not a national securities exchange and the Shares are not quoted on the Nasdaq Stock Market, the average between the highest bid and lowest asked prices for the Shares on such day as reported on the Nasdaq OTC Bulletin Board Service or by the National Quotation Bureau Incorporated or a comparable service; or (iii) if the day is not a business day, and as a result, paragraphs (i) and (ii) next above are inapplicable, the Fair Market Value of the Shares shall be determined as of the next earlier business day. If paragraphs (i) and (ii) next above are otherwise inapplicable, then the Fair Market Value of the Shares shall be determined in good faith by the Board. (g) "Non-employee Director" shall mean a member of the Board who is not an employee of the Company or any Subsidiary. (h) "Shares" shall mean shares of common stock of the Company, $.01 par value per share, and such other securities or property as may become subject to awards pursuant to an adjustment made under Section 12 of the Plan. (i) "Subsidiary" shall mean any corporation during any period in which it is a "subsidiary corporation," as that term is defined in Section 424(f) of the Code, with respect to the Company. SECTION 4. EFFECTIVE DATE OF THE PLAN The Plan shall become effective on October 19, 2000, subject to the approval and ratification of the Plan by the shareholders of the Company. SECTION 5. SHARES AVAILABLE FOR OPTIONS The number of Shares which may be issued pursuant to the Plan shall not exceed 250,000, subject to adjustment in accordance with the provisions of Section 12. Such Shares may be authorized and unissued Shares or treasury shares. The maximum number of shares of Stock that may be issued as discretionary awards pursuant to Section 7(b)(ii) shall be 100,000 Shares, subject to adjustment in accordance with the provisions of Section 12. If any awards terminate, expire or are canceled prior to the delivery of all of the Shares issuable thereunder, then the number of Shares counted against the number of Shares available under the Plan in connection with the grant of such award, to the extent of any such termination, expiration or cancellation, shall again be available for the granting of additional awards under the Plan. If the exercise price of any option granted under the Plan is satisfied by tendering Shares (by either actual delivery or by attestation), only the number of Shares issued net of the Shares tendered shall be deemed delivered for purposes of determining the maximum number of Shares available for issuance under the Plan. -3- 4 SECTION 6. ADMINISTRATION The Plan shall be administered by the Board. The Board may, by resolution, delegate part or all of its administrative powers with respect to the Plan. The Board shall have all of the powers vested in it by the terms of the Plan, such powers to include the authority, within the limits prescribed herein, to establish the form of the agreement embodying grants of options made under the Plan. The Board shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable, such administrative decisions of the Board to be final and conclusive. Except to the extent prohibited by applicable law, the Board may authorize any one or more of its members or the Secretary or any other officer of the Company to execute and deliver documents on behalf of the Board. SECTION 7. STOCK AWARDS (a) ELIGIBILITY. Non-employee Directors shall be granted awards under the Plan in the manner set forth in this Section 7. All options granted to Non-employee Directors pursuant to the Plan shall be nonqualified stock options which do not qualify for special tax treatment under Sections 421 and 422 of the Code. (b) GRANT OF AWARDS. (i) AUTOMATIC OPTION GRANTS. Commencing on the date of the Company's 2001 annual meeting of shareholders, and thereafter on the date of each succeeding annual meeting of shareholders of the Company, each Non-employee Director, if elected, reelected or retained as a Non-employee Director, shall be granted an option to purchase Five Thousand (5,000) Shares under the Plan (which number of Shares shall be subject to adjustment as provided in Section 12 hereof) (hereinafter referred to as an "Annual Option"). (ii) DISCRETIONARY AWARDS. At such times as the Board may determine while this Plan is in effect, the Board may, in its discretion, grant a stock-based award to a Non-employee Director, which award may include restricted Stock and options containing terms and provisions differing in whole or in part from the Annual Options granted pursuant to Section 7(b)(i) above. The Board shall have the authority to determine the number of Shares of Stock to be granted or covered pursuant to such awards and all other terms and conditions of such awards. (c) EXERCISE PRICE. Subject to adjustment as provided in Section 12 hereof, the exercise price per share of each option shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant of such option, or, if greater, the Net Tangible Book Value of a share of Stock as of the end of the Company's most recent fiscal quarter ended on or prior to the date of grant of such option, as reported on the most recent Form 10-Q or Form 10-K filed by the Company with the Securities and Exchange Commission. The term Net Tangible Book Value per share of Stock shall be determined by dividing (i) -4- 5 the Company's tangible net worth (total tangible assets less total liabilities) by (ii) the total number of shares of Stock outstanding. For purposes of determining Net Tangible Book Value, tangible assets shall exclude (A) intangible assets (including without limitation goodwill) that cannot be sold separately from all other assets of the business and (B) any other intangible asset for which recovery of book value is subject to significant uncertainty or illiquidity. (d) TERM. The term of each option granted to a Non-employee Director shall be for ten (10) years from the date of grant, unless terminated earlier pursuant to the provisions of Section 9 hereof. (e) OPTION AGREEMENT. Each option granted under the Plan shall be evidenced by a written agreement in such form as the Board shall from time to time approve. Each agreement shall be subject to, and incorporate, by reference or otherwise, the applicable terms of the Plan. (f) OPTION PERIOD. No option shall be granted under the Plan after the tenth anniversary of the effective date of the Plan. However, the term of any option theretofore granted may extend beyond such date. Options shall be granted to Non-employee Directors under the Plan only for so long as the Plan remains in effect and a sufficient number of Shares are available hereunder for the granting of such options. (g) VESTING. Except as otherwise provided in Section 9 hereof, an Annual Option cannot be exercised prior to the first anniversary of the date of grant and thereafter may be exercised in full. SECTION 8. EXERCISE OF OPTIONS. An option that has vested may be exercised, subject to the provisions of Section 9 with respect to Annual Options, from time to time, only by (a) providing written notice of intent to exercise the option with respect to a specified number of Shares; and (b) payment in full to the Company of the exercise price at the time the option is exercised (except that, in the case of an exercise under paragraph (iii) below, payment may be made as soon as practicable after the exercise). Payment of the exercise price may be made: (i) in cash or by certified check, (ii) by delivery to the Company of Shares which shall have been beneficially owned by the Non-employee Director for at least six (6) months and have a Fair Market Value per Share on the date of surrender equal to the exercise price, or (iii) by delivery (including by fax) to the Company or its designated agent of a properly executed exercise notice together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the option Shares and promptly deliver to the Company the sale or margin loan proceeds required to pay the exercise price. -5- 6 SECTION 9. EFFECT OF TERMINATION OF MEMBERSHIP ON BOARD. The right to exercise an Annual Option granted to a Non-employee Director shall be limited as follows, provided the actual date of exercise is in no event after the expiration of the term of the Annual Option: (a) If a Non-employee Director ceases being a director of the Company by reason of death, the Annual Option shall become immediately exercisable upon the Non-employee Director's death and the Annual Option may be exercised for a period of one year after the date of death and not thereafter; PROVIDED, HOWEVER, that no Annual Option shall be exercisable after the expiration of the term of the Annual Option. (b) If a Non-employee Director ceases being a director of the Company by reason of disability, the Annual Option shall become immediately exercisable and the Non-employee Director (or his or her legal representative) may exercise the Annual Option for a period of one year after the date of such termination of service and not thereafter; PROVIDED, HOWEVER, that no Annual Option or portion thereof shall be exercisable after the expiration of the term of the Annual Option. For purposes hereof, the term "disability" shall mean a total and permanent disability as determined by the Board in its sole discretion. (c) If a Non-employee Director ceases being a director of the Company without Cause (as hereinafter defined) or for any reason other than death or disability on or after the first anniversary of the date of grant of the Annual Option, the Non-employee Director (or his or her legal representative) may exercise the Annual Option for a period of six months after the date of such termination of service and not thereafter; PROVIDED, HOWEVER, that no Annual Option or portion thereof shall be exercisable after the expiration of the term of the Annual Option. (d) If a Non-employee Director ceases being a director of the Company without Cause or for any reason other than death or disability prior to the first anniversary of the date of grant of the Annual Option, a pro rata portion of the Annual Option shall become vested, which portion shall be determined by multiplying (i) the number of Shares of Stock subject to the Annual Option by (ii) a fraction, the numerator of which equals the number of calendar days from the date of grant of the Annual Option to the termination date of the Non-employee Director and the denominator of which equals 365, and the vested portion of the Annual Option may be exercised for a period of six months after the date of such termination of service and not thereafter. (e) If a Non-employee Director ceases being a director of the Company for Cause (as hereinafter defined), then forthwith from the happening of any such event, the entire Annual Option (whether vested or non-vested) shall be immediately forfeited and become null and void. For purposes hereof, "Cause" shall mean termination as a director as a result of: (i) removal as a director for dishonesty or violation of his or her fiduciary duty to the Company; (ii) voluntary resignation under or followed by such circumstances as would constitute a violation of his or her fiduciary duty to the Company; or (iii) Company discovery that the director has committed an act of dishonesty not -6- 7 discovered by the Company prior to the cessation of his or her services as a Non-employee Director that would have resulted in his or her removal if discovered prior to such date. SECTION 10. TRANSFERABILITY OF AWARDS Options and awards under the options granted hereunder are not assignable, alienable, saleable or transferable by a Non-employee Director otherwise than by will or by the laws of descent and distribution, and may be exercised during the lifetime of the Non-employee Director only by such individual or, if permissible under applicable law, by such individual's guardian or legal representative, except that a Non-employee Director may, to the extent allowed by the Board and in a manner specified by the Board, transfer any option or award. SECTION 11. DESIGNATION OF BENEFICIARIES Anything contained in the Plan to the contrary notwithstanding, a Non-employee Director may file with the Company a written designation of a beneficiary or beneficiaries under the Plan (subject to such limitations as to the classes and number of beneficiaries and contingent beneficiaries and such other limitations as the Board from time to time may prescribe). A Non-employee Director may from time to time revoke or change any such designation of beneficiary. Any designation of beneficiary under the Plan shall be controlling over any other disposition, testamentary or otherwise; PROVIDED, HOWEVER, that if the Board shall be in doubt as to the entitlement of any such beneficiary to any option or award if applicable law requires the Company to do so, the Board may determine to recognize only the legal representative of such Non-employee Director, in which case the Company, the Board and the members thereof shall not be under any further liability to anyone. In the event of the death of any Non-employee Director, the term "Non-employee Director" as used in the Plan shall thereafter be deemed to refer to the beneficiary designated pursuant to this Section 11 or, if no such designation is in effect, the executor or administrator of the estate of such Non-employee Director, unless the context otherwise requires. SECTION 12. CAPITAL ADJUSTMENT PROVISIONS In the event that the Board shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event (individually referred to as "Event" and collectively referred to as "Events") affects the Shares such that an adjustment is determined by the Board to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Board may, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares subject to the Plan and -7- 8 which thereafter may be made the subject of options and awards under the Plan; (ii) the number and type of Shares subject to outstanding options and awards; and (iii) the exercise price with respect to any option or award (collectively referred to as "Adjustments"); PROVIDED, HOWEVER, that Annual Options subject to grant or previously granted to Non-employee Directors under the Plan at the time of any such Event shall be subject to only such Adjustments as shall be necessary to maintain the proportionate interest of the Non-employee Directors and preserve, without exceeding, the value of such Annual Options. SECTION 13. CHANGE OF CONTROL Upon the occurrence of a Change of Control, all outstanding options granted pursuant to Section 7 hereof shall become fully exercisable. SECTION 14. AMENDMENT AND TERMINATION OF THE PLAN The Plan shall terminate on October 18, 2010, unless sooner terminated as herein provided. The Board may at any time amend, alter, suspend, discontinue or terminate the Plan. Termination of the Plan shall not affect the rights of Non-employee Directors with respect to options or awards previously granted to them, and all unexpired options or awards shall continue in force and effect after termination of the Plan, except as they may lapse or be terminated by their own terms and conditions. Any amendment to the Plan shall become effective when adopted by the Board, unless specified otherwise. Rights and obligations under any option or award granted before any amendment of this Plan shall not be materially and adversely affected by amendment of the Plan, except with the consent of the person who holds the option or award, which consent may be obtained in any manner that the Board deems appropriate. SECTION 15. GENERAL PROVISIONS (a) OTHER COMPENSATION. Nothing contained in the Plan shall prevent the Company or any Subsidiary from adopting or continuing in effect other or additional compensation arrangements for Non-employee Directors, and such arrangements may be either generally applicable or applicable only in specific cases. (b) RIGHTS OF DIRECTORS. The grant of an option or award to a Non-employee Director pursuant to the Plan shall confer no right on such Non-employee Director to continue as a director of the Company. Except for rights accorded under the Plan, Non-employee Directors shall have no rights as shareholders with respect to Shares covered by any option or award until the date of issuance of the stock certificates to the Non-employee Director and only after such Shares are fully paid. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock is issued. (c) SECURITIES LAWS. Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any Shares under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. -8- 9 (d) TAXES. The Company shall be entitled to withhold the amount of any tax attributable to any amount payable or Shares deliverable under the Plan after giving the person entitled to receive such amount or Shares reasonable notice, and the Company may defer making payment or delivery if any such tax may be pending unless and until indemnified to its satisfaction. (e) GOVERNING LAW. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the internal laws of the State of Florida and applicable federal law. Any legal action or proceeding with respect to this Plan, any award, or any award agreement, or for recognition and enforcement of any judgment in respect thereof, may only be brought and determined in a court sitting in the County of Hillsborough or the County of Pinellas in the State of Florida. (f) MISCELLANEOUS. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision hereof. -9- EX-10.78 4 g67403ex10-78.txt EMPLOYMENT AGREEMENT DATED AUGUST 19, 1998. 1 Exhibit 10.78 EMPLOYMENT AGREEMENT AGREEMENT made effective this 19th day of June, 1998 between INSURANCE MANAGEMENT SOLUTIONS, INC., a Florida corporation, which corporation, together with its subsidiary companies, shall hereinafter be referred to as "Company" and Robert G. Gantley of Bradenton, Florida, hereinafter referred to as "Employee". R E C I T A L S : - - - - - - - - 1. Company is engaged in the business of providing comprehensive outsourcing services to the property and casualty insurance industry with an emphasis on providing full third party administration outsourcing services for flood insurers and is also a provider of flood zone determination and ancillary services primarily to insurance companies and financial institutions throughout the State of Florida and such other states as the Company shall deem appropriate. 2. The Company's business requires secrecy in connection with the methods and systems employed, and, for the proper protection of the Company, it is absolutely necessary and essential (which necessity Employee expressly recognizes) that all matters connected with, arising out of, or pertaining to the business of the Company, its methods and systems and the names of its customers be kept secret and confidential as goodwill belonging to the Company. 3. The Company will sustain great loss and damage, if during the term of this Agreement, or for a period of two (2) years immediately following its termination for any reason whatsoever, the Employee should, for himself or herself, or on behalf of any other person, persons, company, partnership or corporation, call upon the customers or clientele of the Company for the purpose of soliciting, selling or servicing any of the programs or services of the Company as described in Section 1 hereof, or the solicitation of any Company employee for the purpose of hiring such employee, for which loss and damage, by reason of his or her financial circumstances, Employee could not be compelled by law to respond to damages in any action at law. NOW, THEREFORE, Company and Employee, in consideration of the covenants and agreements herein contained and in further consideration of the benefits and advantages flowing from each to the other, covenant and agree as follows: SECTION 1. EMPLOYMENT OF EMPLOYEE. Company hereby agrees to employ Employee as Vice President - Claims. SECTION 2. EMPLOYEE'S BEST EFFORTS. Employee hereby accepts employment by Company, and agrees to devote his or her entire time and best efforts to this employment. Employee agrees to perform such other duties as are customarily performed by one holding such position in other, same or similar businesses as that engaged in by Company, and shall also render such other and unrelated services and duties as may be assigned to him or her from time to time by Company. 2 SECTION 3. TERMS OF EMPLOYMENT. (a) Company and Employee understand and agree that the term of employment of this Agreement shall be for a period of three years from the date hereof and thereafter shall continue indefinitely until terminated by either party pursuant to the terms herein. (b) Said employment may be terminated by the Company with cause, and no notice or severance is owed. Involuntary termination with cause is defined as a dismissal at any time based on failure to conform to the conditions of employment, material breach of this Agreement, gross misconduct or willful violation of Company policy or procedure as outlined in Section 2.12 on Involuntary Termination contained in the Company's Human Resources Policies and Procedures Manual, as amended from time to time. (c) In the event this Agreement is terminated by the Company without cause during the initial three year term, then the Employee shall be entitled to any payments payable under Section 4 which have been earned but not yet paid, and in addition, Employee shall be entitled to severance pay equal to Employee's then current salary payable in accordance with the Company's usual payroll practices for a period equal to twelve (12) months (the "Severance Payment"). In the event that Employee is entitled to a Severance Payment pursuant to this Section 3(c) and Employee secures employment at any time during the twelve (12) months following termination (the "Severance Period"), then the Company shall be entitled to a credit against its obligations to make the Severance Payment in the amount up to seventy-five percent (75%) of Employee's base salary during the Severance Period paid to him by his new employer. (d) Notwithstanding anything contained herein to the contrary, in the event Company shall discontinue operating its business, then this Agreement shall terminate as of the last day of the month on which Company ceases operations with the same force and effect as if such last day of the month were originally set as the termination date hereof. SECTION 4. EMPLOYEE'S COMPENSATION AND EXPENSES. (a) As compensation for the service to be performed by Employee under this Agreement, Company shall pay Employee, and Employee shall accept from Company, a base salary of $115,000.00 dollars ($115,000.00) per annum paid on a bi-weekly basis. (b) In addition to the base salary, Employee may be entitled to earn additional compensation pursuant to a bonus plan, and an employee stock option plan. If Employee is eligible for either a bonus plan or the stock option plan, copies of the plan will be provided to Employee. (c) The Employee shall be provided the same benefits and on the same basis as other employees of the Company including, but not limited to, the 401(k) plan, life insurance, disability insurance and health insurance. 2 3 (d) Employee's salary, bonuses and allowances may be modified, as agreed upon between Employee and Company, from time to time, and any such modifications made during the term of this Agreement shall be incorporated as part of the Agreement. (e) Company shall reimburse Employee for all other reasonable, ordinary and necessary expenses incurred by Employee on Company's behalf pursuant to Company's directions and subject to Company's restrictions and requirements. SECTION 5. FUNDS COLLECTED BY EMPLOYEE. Employee does explicitly understand and agree that all funds received by him on behalf of Company, as may be authorized by Company from time to time, shall be held in trust by Employee and shall immediately be remitted to Company by Employee. Additionally, Employee shall be responsible for any and all technical data, books, equipment, or other property of Company which may come into his possession by reason of his or her employment. In the event this employment is terminated for any reason whatsoever, Employee shall immediately turn in to Company and account for all such funds, equipment and property which may be in the possession of Employee at such termination. SECTION 6. RESTRICTIVE COVENANTS, (a) Covenant not to Compete. The Employee hereby expressly covenants and agrees, which covenants and agreements are of the essence of this contract, that he or she will not, during the term of this Agreement and for a period of two (2) years immediately following the termination of this Agreement, for any reason whatsoever, directly or indirectly, for himself or herself, or on behalf of, or in conjunction with, any other person, persons, company, partnership or corporation: (1) call upon any customer or customers of Company solicited or contacted by Employee while at the Company or whose account was serviced by Employee while at the Company, pursuant to his or her employment hereunder, for the purpose of soliciting, selling or servicing any programs or services of the type sold and serviced by Company during the term hereof within the State of Florida and such other states in which the Company shall conduct business; (2) nor will Employee divert, solicit or take away any customer or customers of Company or the business or patronage of any such customers of the Company for the purpose of selling or servicing any programs or services of the type sold and serviced by Company during the term hereof; (3) nor will Employee call upon any prospective customer or customers of the Company, solicited or contacted by Employee or Employee's staff pursuant to his or her employment hereunder, for the purpose of soliciting, selling or servicing programs or services of the type sold and serviced by Company during the term hereof within the State of Florida and such other states in which the Company shall conduct business. For purposes of this Agreement, it is agreed between the parties hereto that prospective customers are defined as those called upon by Employee or by Employee's staff two (2) times or more during any part of the six 3 4 (6) month period next preceding the termination of this Agreement for any reasons whatsoever, or those prospective customers as listed by Employee or by Employee's staff as active potential prospects on Employee's weekly or monthly sales call reports submitted to Company during any part of the six (6) month period next preceding the termination of this Agreement for any reasons whatsoever; (4) nor upon termination of Employee's employment from Company, whether by resignation, discharge, or otherwise, and for a period of two (2) years from the date of termination, shall Employee, directly or indirectly, for himself or herself or on behalf of, or in conjunction with, any other person, persons, company, partnership or corporation: solicit, approach, or call upon any Company employee for the purpose of retaining or hiring the Company employee in any capacity. In the event of a breach or threatened breach by Employee of the provisions of this paragraph, Company shall be entitled to an injunction restraining Employee from directly or indirectly soliciting, approaching, or calling upon any Company employee for the purpose of retaining or hiring the Company employee in any capacity and/or in fact hiring the Company employee in any capacity; and, in addition to obtaining an injunction, Company shall be entitled to recover damages from Employee. In the event any Court determines the specified time period to be unreasonable, arbitrary, or against public policy, a lesser time period which is determined to be reasonable, non-arbitrary and not against public policy may be enforced against Employee by injunction, as well as by all other legal remedies available to Company. In the event of any legal action in connection with this agreement, the prevailing party shall be entitled to recover all of its legal expenses, including reasonable attorney's fees and costs, whether the same are incurred in connection with trial or during an appeal and to have the same awarded as part of the judgment in the proceeding in which such legal expenses and attorney's fees were incurred. (b) Nondisclosures. Employee recognizes and acknowledges that the list of the Company's customers, trade secrets, data processing systems, computer software, computer programs, or other systems, data, methods, or procedures developed or used by the Company, as they may exist from time to time, are valuable, special and unique assets of the Company's business. The Employee will not, during or after the term of his or her employment without the prior written consent of the Company, which consent may be arbitrarily withheld, and except to the extent necessary to accomplish assignments on behalf of the Company in which the Employee is, at any given time during the term of Employee's tenure with the Company, currently and actively engaged, possess, transmit, copy, reproduce, or disclose the list of the Company's customers or any part thereof or any of the Company's present or future trade secrets, or any data processing systems, computer software, computer programs or other systems, data, methods, or procedures to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, nor will the undersigned assist anyone else to do so. In the event of a breach or threatened breach by Employee of the provisions hereof, the Company shall be entitled to an injunction restraining Employee from disclosing, in whole or in part, the list of the Company's customers or the Company's trade secrets, or from rendering any services to 4 5 any person, firm, corporation, association, or other entity to whom such list or such trade secrets, in whole or in part, has been disclosed or is threatened to be disclosed and requiring the return to the Company of all copies of customer lists, manuals, data, software, computer programs, or written procedures in the possession of Employee. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breech, including the recovery of damages from the Employee. The existence of any claim or cause of action of Employee against the Company shall not constitute a defense to the enforcement by the Company of this covenant. No failure of the Company to exercise any right given hereunder shall be taken or construed as a waiver of its right to seek any remedies by reason of any past, present, or future breaches of the Agreement on the part of Employee. SECTION 7. SEVERABILITY OF RESTRICTIVE COVENANTS. Company and Employee agree that the restrictive covenants contained in Section 6, or any of its sub-paragraphs, are severable and separate and the unenforceability of any specific covenant therein shall not affect the validity of any other covenants set forth therein. These covenants on the part of the Employee shall be construed as an agreement independent of any other provision of this Agreement, and the existence of any claim or cause of action of the Employee against Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of said covenants. Employee agrees and acknowledges that any violation by Employee of the covenants set forth in Section 6 hereof would cause irreparable damage to Company, and Employee further agrees that upon proof of the existence of such a violation of the covenants set forth in said Section 8 hereof Company will be entitled to injunctive relief against the Employee by any Court of competent jurisdiction. In the event any Court of competent jurisdiction should determine that the territorial restrictions set forth in Section 6 hereof, and/or their durations, are unreasonable in their scope, then, and in that event, the territorial restrictions, and/or their duration, shall be limited to such territory and/or duration as may be determined reasonable by a Court of competent jurisdiction. SECTION 8. ATTORNEY'S FEES. The parties hereto agree that, in the event of any legal action in connection with this Agreement, the prevailing party shall be entitled to recover all of its legal expenses, including reasonable attorney's fees and costs, whether the same are incurred in connection with trial or appeal, and to have the same awarded as part of the judgment in the proceeding in which such legal expenses and attorney's fees were incurred. SECTION 9. CHOICE OF LAW AND VENUE. This agreement shall be construed according to the laws of the State of Florida, without regard to choice of law provisions. Venue to resolve any dispute under this Agreement shall be Pinellas County, Florida. SECTION 10. INVALIDITY OF PRIOR AGREEMENTS. This Agreement supersedes all prior agreements and understandings between Employee and Company and this Agreement expresses the whole and entire agreement between the parties with reference to Employee's employment and it cannot be modified or changed by any oral or verbal promise by whomsoever made, nor shall any written modification of it be binding on Company until such written modification shall have been approved in writing by the President of the Company. 5 6 SECTION 11. SEVERABILITY. All agreements and covenants contained herein are severable and, in the event any of them shall be held to be invalid, illegal or unenforceable by any competent Court, this contract shall be interpreted as if such invalid, illegal or unenforceable agreement or covenants were not contained herein. SECTION 12. NON-WAIVER OF RIGHTS. All of the rights of Company and Employee hereunder shall be cumulative and not alternative, but a waiver or indulgence on the part of Company or Employee of any rights or entitlement hereunder shall not be construed as a waiver of an other rights or entitlements hereunder by either Company or Employee. No notice shall be required by Company or Employee to enforce strict adherence to all the terms of this agreement. SECTION 13. MISCELLANEOUS PROVISIONS. The provisions of this Agreement shall extend to the successors, surviving corporations and assigns of Company. Singular and masculine pronouns shall include plural, feminine, and artificial persona and entities whenever the context permits. SECTION 14. EMPLOYEE'S ACKNOWLEDGEMENT. Employee certifies that he is over twenty-one (21) years of age and hereby acknowledges having read the entire contents of this Agreement before signing his name below and that he has received a copy hereof for his use. IN WITNESS WHEREOF, the Company and Employee have affixed their hands and seals on this, the day and year first above written, the Company acting through its duly authorized officers. Signed, Sealed and Delivered in the Presence of: WITNESSES: "COMPANY" Insurance Management Solutions, Inc. By: /s/ David K. Meehan -------------------------------- - ---------------------------------- David K. Meehan As Its: Chairman - ---------------------------------- ---------------------------- Date: 6/22/98 ------------------------------ WITNESSES: "EMPLOYEE" By: /s/ Robert G. Gantley -------------------------------- - ---------------------------------- Robert G. Gantley Date: 6/19/98 - ---------------------------------- ------------------------------ 6 EX-10.79 5 g67403ex10-79.txt RELEASE AND SEPARATION AGREEMENT, DATED 4/12/2001 1 Exhibit 10.79 RELEASE AND SEPARATION AGREEMENT THIS RELEASE AND SEPARATION AGREEMENT ("AGREEMENT"), by and between INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., a Florida corporation, and its subsidiaries and affiliates (collectively, the "Company") whose address is 360 Central Avenue, St. Petersburg, Florida 33701, and CHRISTOPHER P. BREAKIRON ("Releasor") whose address is 2415 Pelham Road North, St. Petersburg, FL 33710, to be effective this 12th day of April, 2001 ("Effective Date"). WHEREAS, Company employed Releasor as Vice President of the Company; and WHEREAS, the Company's employment relationship with Releasor was an employment at will arrangement, and the Company has the right to terminate Releasor at any time with or without cause; and WHEREAS, the Company and Releasor wish to terminate the employment relationship on a reasonable basis and provide Releasor with termination benefits that will assist in Releasor's transition to another position outside of the Company; and WHEREAS, Releasor and Company also desire to resolve and finally settle any disputed claims, including, but not limited to, all claims arising out of Releasor's employment with Company prior to the term of this Agreement, or the termination of such employment, and to spell out the terms of this settlement. NOW, THEREFORE, in and for the consideration of the mutual covenants and agreements contained herein, and in further consideration of the benefits and advantages flowing from each party to the other, the receipt and sufficiency of which is hereby acknowledged, the Company and Releasor hereby covenant and agree as follows: I. COMPANY'S PROMISES: A. Company will pay Releasor a sum ("Severance Payment") of SEVENTY FOUR THOUSAND NINE HUNDRED AND NINETY NINE AND 99/100 DOLLARS ($74,999.99), less applicable taxes and all other customary withholdings. The above amount shall be paid by Company (in the ordinary course of business, through Company's payroll system) to Releasor in thirteen (13) equal bi-weekly installments of FIVE THOUSAND SEVEN HUNDRED AND SIXTY NINE AND 23/100 DOLLARS ($5,769.23) over a thirteen (13) week period ("Severance Period") beginning on the first full pay period completed following May 15, 2001 ("Separation Date"). The Company will also make additional severance payments ("Additional Severance Payments") for a period of three additional months ("Extended Severance Period") if Releasor is unable to secure comparable employment under similar terms and conditions during the Extended Severance Period. ADDITIONAL SEVERANCE PAYMENTS PAID BY COMPANY TO RELEASOR DURING THE EXTENDED SEVERANCE PERIOD SHALL TOTAL THIRTY SEVEN THOUSAND FIVE HUNDRED AND 00/100 DOLLARS ($37,500.00), LEES APPLICABLE TAXES AND ALL OTHER CUSTOMARY WITHHOLDINGS. The above amount shall be paid by Company to Releasor in six (6) equal bi-weekly installments of Five Thousand Seven Hundred and Sixty Nine and 23/100 Dollars ($5,769.23), commencing on the next regularly scheduled payroll date following payment of the final Severance Payment due in connection with the initial Severance Period, and one (1) final installment of Two Thousand Eight Hundred Eighty Four and 62/100 ($2,884,62). 1 2 HOWEVER, UNDER NO CIRCUMSTANCES SHALL ADDITIONAL SEVERANCE BE PAID AFTER THE NINE (9) MONTH ANNIVERSARY OF THE SEPARATION DATE. Releasor shall be entitled to the Severance Payments and Additional Severance Payments payable pursuant to this Agreement provided Releasor is in full and timely compliance with the material terms and conditions of this Agreement. Provided further, in the event that Releasor secures employment at any time during the Extended Severance Period, then the Company shall be entitled to a credit against its obligations to make the Additional Severance Payments during the Extended Severance Period in the amount of up to one hundred percent (100%) of base salary paid to Releasor during the Extended Severance Period by his new employer. B. Releasor shall be eligible to purchase continued health insurance coverage from the Company in accordance with the Company's health insurance plan guidelines and COBRA guidelines. C. Releasor shall not be entitled to receive any other compensation or benefits from Company, including but not limited to, any and all compensation for unpaid vacation or sick time that may have accrued during Releasor's employment with Company. D. The Company agrees to keep this Agreement strictly confidential. This promise includes information regarding the terms of the Agreement and any discussions among the Parties leading up to this Agreement. The Company further agrees that it will: 1. Not provide or disclose the Agreement and/or any information concerning this Agreement or the negotiations leading to this Agreement to anyone other than its professional representatives, such as attorneys and accountants, and, even as to such persons, only if such persons are informed of and agree to be bound by this confidentiality requirement; and 2. Not disparage the reputation, character or name of Releasor in any way, to any person or entity; and 3. Inform its officers, directors and employees of their obligations under this section; and 4. Provide a favorable recommendation regarding Releasor's employment history with Company to any party requesting such information. This Section shall not prohibit disclosure of the terms, amount or existence of this Agreement to the extent legally necessary to enforce this Agreement or to the extent otherwise legally required. E. Company irrevocably and unconditionally waives, releases, and forever disclaims all real or perceived claims, demands, causes of action, obligations, liabilities, damages, losses, suits, debts, liens, contracts, agreements, promises, rights, controversies, cost, or expenses of any kind or nature, whether known or unknown, suspected or unsuspected fixed or contingent (hereinafter, collectively "claim" or "claims") against Releasor which Company is entitled or at any time prior hereto may have had against Releasor, resulting 2 3 from or based on anything which has occurred prior to the Separation Date, EXCEPT (1) any claims related to Releasor's failure to pay any loans or other debts to Company or its subsidiaries, (2) any claims arising from or as a result of fraud or deceit by Releasor while employed by Company, and (3) any claims as a result of any failure of performance under this Agreement. F. Releasor's last day of full time employment with the Company shall be April 17, 2001. Thereafter, from the period beginning on April 18, 2001 and ending on May 15, 2001, Company will employ Releasor as a consultant to perform the consulting services specified in the Consulting Agreement which is attached hereto as Exhibit "B". II. RELEASOR PROMISES: A. Releasor's employment in all capacities with the Company is hereby terminated and Releasor will execute contemporaneously with the execution of this Agreement a resignation from all offices and positions, substantially in the form of Exhibit "A" attached hereto and made a part hereof, to be effective as of April 17, 2001. Provided further, Releasor will not seek or accept any employment or any contractual or independent contractor relationship with Company or any of Company's current subsidiaries, divisions, parents or affiliates at any time hereinafter except as specifically provided for herein. B. Releasor hereby waives, terminates and otherwise releases any and all of Releasor's right, title and interest in and to any and all present or future options or agreements for Releasor to purchase or otherwise acquire stock in the Company and/or any of Company's subsidiaries and affiliates. C. Releasor irrevocably and unconditionally waives, releases and discharges Company, its current subsidiaries, divisions, parents, affiliates, predecessors, successors and assigns, and their respective principals, directors, officers, employees, agents, attorneys, and others acting in concert with the foregoing (collectively, "Released Parties") from and against any and all legal, equitable, or administrative claims, known and unknown, contingent or otherwise, that Releasor may have or believes to have against any or all such Released Parties arising on or before the Separation Date, including but not limited to, any and all claims arising from Releasor's employment with or separation from Company (except for any dispute arising out of the performance or enforcement of this Agreement) and arising from Releasor's term as an officer of Company. This release specifically includes, but is not limited to, any claims arising under the Florida Civil Rights Act, the Federal Civil Rights Act of 1866, 1871, 1964 and 1991 (respectively), the Fair Labor Standards Act, the Equal Pay Act, the Employee Retirement Income Security Act (except as to any vested retirement benefits), the Occupational Safety and Health Act, the American with Disabilities Act, the Family Medical Leave Act; any workers compensation law dealing with work related injuries or illness, any unemployment benefits law dealing with unemployment benefit claims, and all other claims (negligence, breach of contract, fraud, deceit, outrage, etc.) arising under federal, state, or local statutes, common law, or ordinances, including but not limited to the federal Age Discrimination in Employment Act. This release also includes but is not limited to a release of and from any and all claims for tortious conduct, wrongful discharge or for 3 4 attorneys' fees and costs arising from or in any manner related to the activities covered by this Agreement. D. Releasor agrees to keep this Agreement strictly confidential, including without limitation, any and all information regarding the terms of this Agreement and any discussions and negotiations among the parties hereto regarding this Agreement. Releasor further agrees that Releasor will not: 1. provide or disclose any terms of this Agreement and/or any information concerning this Agreement or the negotiations involving this Agreement to anyone whomsoever; provided, however, Releasor may disclose such information to Releasor's spouse or professional representative, such as attorneys and accountants, on the specific condition that such person(s) is/are informed of and agree to be bound by this confidentiality requirement; and 2. disparage the reputation, character or name of Company and Company's affiliates and subsidiaries in any manner whatsoever to any person or entity. This Section shall not prohibit disclosure of the terms, amount or existence of this Agreement to the extent legally necessary to enforce this Agreement or to the extent otherwise legally required. If Releasor or Releasor's counsel receives a subpoena or request to produce this Agreement or testify concerning it in any court or legal proceeding, Releasor agrees to notify Company before responding to such subpoena or request and, in the absence of any judicial order to the contrary, to afford Company an opportunity to assert any objection it may have before Releasor appears to testify or produces this document. E. Releasor promises never to file a charge, claim or lawsuit, asserting any claims that are released in Section II.C. or to seek or accept any relief for any such claim. Moreover, Releasor agrees that if Releasor breaks the promise contained in this Section II.C. and files a lawsuit based on legal claims Releasor has released herein, Releasor shall pay any and all costs incurred in defending the claim by any of the Released Parties, including, without limitation, reasonable attorneys' fees and expenses. F. Releasor represents and agrees that all Company products, customer correspondence, internal memoranda, products and designs, sales brochures, training manuals, project files, price lists, customer and vendor lists, prospectus reports, customer or vendor information, sales literature, notebooks, textbooks, existing and contemplated business and financial methods, concepts, practices, and know-how, plans, pricing, marketing and selling techniques and information, employee lists and records, customer credit ratings and credit histories, and all other like information, documents or products, including all copies, duplications, replications, and derivatives of such information, documents or products (collectively, "Confidential Information"), now in the possession of Releasor or acquired by Releasor while in the employ of Company, are and shall remain the exclusive property of Company and shall be returned to legal counsel for Company no later than the fifth (5th) day after the Separation Date (the foregoing provision being a condition precedent to Company's obligation to make any payment to Releasor hereunder). Further, Releasor will not, directly or indirectly, disclose any Confidential Information to any person or entity unless such disclosure is authorized in advance and 4 5 in writing by Company and Releasor will not, directly or indirectly, use any Confidential Information in any manner whatsoever. The term Confidential Information means all information about the Company and or its customers that was provided to Releasor, whether such information is conveyed directly by the Company or otherwise. The term Confidential Information does not include information that (i) is or becomes available to the public other than as a result of disclosure by Releasor, (ii) was within Releasor's possession prior to being furnished to Releasor by the Company, provided that the source of such information was not known by Releasor to be bound by a confidentiality agreement with the Company or (iii) becomes available to Releasor on a non-confidential basis and lawfully from a source other than the Company or any of this representatives, provided that such other source is not bound by a confidentiality agreement with the Company. Notwithstanding the foregoing, this Section shall not prohibit disclosure of Confidential Information to the extent otherwise legally required. III. ARBITRATION OF DISPUTES: A. The parties agree that any dispute about the validity, interpretation, effect or alleged violations of this Agreement ("Arbitrable Dispute") between Releasor and any Release Parties, must be submitted to final and binding arbitration in Tampa, Florida before an experienced employment arbitrator licensed to practice law in Florida and selected in accordance with the Employment Dispute Rules of the American Arbitration Association. The arbitrator may not modify or change this Agreement in any way. B. Each party shall pay the fees of their respective attorneys, the expenses of their witnesses and any other expenses connected with the arbitration, but all other costs of the arbitration, including the fees of the arbitration, cost of any record or transcript of the arbitration, administrative fees and other fees and costs shall be paid in equal shares by Releasor and Company. The party losing the arbitration shall reimburse the party who prevailed for all expenses the prevailing party paid pursuant to the preceding two sentences. C. Arbitration in this manner shall be the exclusive remedy for any Arbitrable Dispute. The arbitrator's decision or award shall be fully enforceable and subject to an entry of judgment by a court of competent jurisdiction. Should Releasor or Company attempt to resolve an Arbitrable Dispute by any method other than arbitration pursuant to this Section, the responding party shall he entitled to recover from the initiating party all damages, expenses and attorneys' fees incurred as a result and the responding party shall be entitled to the return of any payments that party made under this Agreement. D. Notwithstanding the foregoing, a dispute relating to alleged violations of Section I.D.(1) and II.D.(1) involving the disclosure of the existence, terms or amounts of this Agreement, may be resolved through a means other than Arbitration. IV. RESTRICTIVE COVENANTS: A. Releasor hereby expressly covenants and agrees, which covenants and agreements are the essence of this Agreement, that Releasor will not, for a period of one year from the 5 6 Separation Date, for any reason whatsoever, directly or indirectly, on Releasor's behalf or on behalf of or in conjunction with any other person, persons, company, partnership, corporation, association, trust or joint venture, whether as an individual, partner, officer, director, employee, advisor, Releasor, agent, representative of a corporation, trustee or fiduciary: 1. Counsel, solicit, or attempt to induce any person employed by Company (or any of Company's affiliated or related companies), whether that employee is a full time employee, part time employee, or independent contractor, to terminate Releasor's employment with Company; 2. Provide goods or services to any EXISTING CUSTOMERS of Company (or any of Company's affiliated or related companies) through any entity other than Company (or party of Company's affiliated or related companies) in competition with the business of Company (or any of Company's affiliated or related companies), as such business now exists or as it may exist at the time of termination of this Agreement. For the purposes of this Agreement, the term "Existing Customers" shall mean any entity, whether a corporation, partnership, limited liability company, joint venture, association, or other business organization to which Company (or any of Company's affiliated or related companies) has, within the one (1) year immediately preceding the termination of Releasor's employment with Company: (a) agreed to provide goods and services; or (b) provided goods and services. The Company and Releasor agree that the restrictive covenants contained in this Section IV, or any of its sub-paragraphs, are reasonable and necessary restraint of trade and does not violate the Sherman Antitrust Act, the Florida Antitrust Act, or the common law, and that each restrictive covenant is supported by a valid business interest. The Company and Releasor also agree that the restrictive covenants contained in this Section, or any of its sub-paragraphs, are severable and separate and the illegality, invalidity, or unenforceability of any specific covenant therein shall not affect the legality, validity or enforceability of any other covenants set forth herein. These covenants on the part of Releasor shall be construed as an agreement independent of any other provision of this Agreement, and the existence of any claim or cause of action of Releasor against the Company, whether predicated on this Agreement or otherwise shall not constitute a defense to the enforcement by the Company of said covenants. Releasor agrees and hereby acknowledges that any violation by Releasor of the covenants set forth in this Section IV may cause damage to the Company, and Releasor further agrees that upon proof of the existence of such a violation of the covenants set forth in this Section, the Company will be entitled to injunctive relief against Releasor by any Court of competent jurisdiction. V. MISCELLANEOUS TERMS AGREED TO BY THE PARTIES: In exchange for the mutual promises made by the parties hereto, the parties mutually agree to the following additional terms: 6 7 A. This Agreement, and performance under its terms, shall be governed in all respects by the law of Florida without regard to its law concerning choice of laws. B. By entering into this Agreement, Company and Releasor do not admit to violating any state, federal, or local laws, or to any wrongful conduct of any kind. Company and Releasor expressly deny any wrongdoing or violation of any law. This Agreement shall not be admissible as evidence of an admission of liability, wrongdoing or a violation of any law by Company (including Company's agents or employees) or Releasor in any proceeding under any federal, state or local law. C. This Agreement contains the entire and only agreement between Company and Releasor on any subject encompassed herein. Both parties waive any oral or written promises or assurances that are not contained in this Agreement, other than claims to vested pension benefits. D. The provisions of this Agreement are severable. If any part of it is found to be unenforceable, all other provisions shall remain fully valid and enforceable. E. This agreement shall bind Releasor's heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of all Released Parties and their respective heirs, administrators, representatives, executors, successors and assigns. F. All paragraph headings are for reference purposes only and are not intended to alter the meaning or interpretation of any provision. G. All of the rights of the Company and Releasor hereunder shall be cumulative and not alternative. A waiver or indulgence on the part of the Company or Releasor of any rights or entitlements hereunder shall not be construed as a waiver of any other rights or entitlements hereunder by either the Company or Releasor. In the event that a material breach occurs or that a material breach is alleged, the injured party shall give the breaching party written notice of their intention to terminate this Agreement. The notice shall specify the nature of the material breach and shall give the breaching party fifteen (15) days to cure such material breach. If the material breach is not cured within the time allowed, this Agreement shall automatically terminate without further notice and the injured party may pursue any and all legal remedies available. VI. RELEASOR'S ACKNOWLEDGMENTS AND ASSURANCES TO COMPANY: This Agreement is a legal document with legal consequences. Company wants to be certain that Releasor fully understands the legal effect of signing this Agreement. Releasor, therefore, makes the following assurances to Company: A. Releasor has read this Agreement and understands all of its provisions. Releasor has had a full twenty-one (21) days within which to consider this Agreement before executing it, or has voluntarily waived such time period to obtain the payments set forth in Section I.A. B. Releasor voluntarily enters into this Agreement, which is contractual in nature and contains a release of all known and unknown claims. 7 8 C. Releasor has been given reasonable time to review this Agreement, and has consulted with Releasor's lawyer concerning the terms of this Agreement. Releasor acknowledges that Releasor is executing this Agreement freely and voluntarily, solely because Releasor has already fully and carefully considered this Agreement before signing it. D. Releasor has the capacity to execute this Agreement and be bound by it. E. Releasor understands that rights or claims by either party that may arise after the date this Agreement is executed are not waived. 8 9 PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. RELEASOR: /s/ Chris P. Breakiron - ------------------------------------------ Chris P. Breakiron SWORN TO AND SUBSCRIBED BEFORE ME THIS 12th DAY OF APRIL, 2001. /s/ Gail T. Basile - ------------------------------------------ [NOTARY SEAL] Notary Public My Commission Expires: April 12, 2004 COMPANY: INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. By: /s/ D. M. Howard --------------------------------------- D. M. Howard Title: President/CEO ------------------------------------ 9 10 Exhibit "A" RESIGNATION FROM OFFICE I, Chris P. Breakiron, do hereby resign and any and all offices that I may hold or have held in Insurance Management Solutions Group, Inc., a Florida corporation or any of its subsidiaries or affiliates including, but not limited to, the following: Insurance Management Solutions, Inc. IMS Direct, Inc. Geotrac of America, Inc. Colonial Claims Corporation This resignation shall be effective as of April 17, 2001. ------------------------------------- Chris P. Breakiron EX-10.80 6 g67403ex10-80.txt CONSULTING AGREEMENT, DATED APRIL 12, 2001 1 Exhibit 10.80 CONSULTING AGREEMENT THIS CONSULTING AGREEMENT ("Agreement") is dated to be effective this 18 day of April, 2001 ("Effective Date"), by and between INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., a Florida corporation, and its subsidiaries and affiliates (collectively, the "Company") whose address is 360 Central Avenue, St. Petersburg, Florida 33701, and CHRISTOPHER P. BREAKIRON ("Breakiron") whose address is 2415 Pelham Road North, St. Petersburg, FL 33710. WHEREAS, the Company is engaged in the business of soliciting, servicing and administering insurance accounts and risks throughout the United States; WHEREAS, the Company's business requires secrecy in connection with certain aspects of its business, and for the proper protection of the Company, it is absolutely necessary and essential (which necessity Breakiron expressly recognizes) confidential and proprietary matters be kept secret and confidential as goodwill belonging to the Company; NOW, THEREFORE, the Company and Breakiron, in consideration of the covenants and agreements contained herein, and in further consideration of the benefits and advantages flowing from each to the other, covenant and agree as follows: I. CONSULTATION SERVICES The Company hereby employs Breakiron to perform the following services in accordance with the terms and conditions set forth in this Agreement: A. Breakiron will consult with the officers and employees of the Company concerning matters relative to the general operations of the Company. B. Given the nature of the position that Breakiron will occupy, Breakiron will report to David Howard, President of Company. II. TIME DEVOTED BY BREAKIRON Breakiron shall devote as much time as he deems reasonably necessary for the workload as it exists from time to time. Notwithstanding the foregoing, Breakiron shall be scheduled to work a minimum of thirty (30) hours per week. III. TERMS OF EMPLOYMENT A. During the term of this Agreement, Company will pay Breakiron the sum of ELEVEN THOUSAND FIVE HUNDRED AND THIRTY EIGHT 46/100 DOLLARS ($11,538.46), which shall be payable in two equal bi-weekly installments of FIVE THOUSAND SEVEN HUNDRED AND SIXTY NINE AND 23/100 DOLLARS ($5,769.23) with the first payment due on the 4th day of May, 2001. B. With the exception of paid time off (PTO), Breakiron shall be provided the same benefits and on the same basis as other employees of the Company including, but not limited to, the 401(k) plan, life insurance, disability insurance and health insurance. 2 C. Breakiron recognizes and acknowledges that the list of the Company's customers, trade secrets, data processing systems, computer software, computer programs, or other systems, data, methods, or procedures developed or used by the Company, as they may exist from time to time, are valuable, special and unique assets of the Company's business. Breakiron will not, during the term of his employment without the prior written consent of the Company, which consent may be arbitrarily withheld, and except to the extent necessary to accomplish assignments on behalf of the Company in which Breakiron is, at any given time during the term of Breakiron's tenure with the Company, currently and actively engaged, possess, transmit, copy, reproduce, or disclose the list of the Company's customers or any part thereof or any of the Company's present or future trade secrets, or any data processing systems, computer software, computer programs or other systems, data, methods, or procedures to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, nor will Breakiron assist anyone else to do so. In the event of a breach or threatened breach by Breakiron of the provisions hereof, the Company shall be entitled to an injunction restraining Breakiron from disclosing, in whole or in part, the list of the Company's customers or the Company's trade secrets, or from rendering any services to any person, firm, corporation, association, or other entity to whom such list or such trade secrets, in whole or in part, has been disclosed or is threatened to be disclosed and requiring the return to the Company of all copies of customer lists, manuals, data, software, computer programs, or written procedures in the possession of Breakiron. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of damages from Breakiron. The existence of any claim or cause of action of Breakiron against the Company shall not constitute a defense to the enforcement by the Company of this covenant. No failure of the Company to exercise any right given hereunder shall be taken or construed as a waiver of its right to seek any remedies by reason of any past, present, or future breaches of the Agreement on the part of Breakiron. IV. COMPANY PROPERTY Breakiron shall be responsible for any and all technical data, books, equipment, or other company property which may come into his possession by reason of this Agreement. In the event this Agreement is terminated for any reason whatsoever, Breakiron shall immediately turn in to the Company and account for all such equipment and property which may be in the possession of Breakiron at such termination. V. TERM The term of this Agreement shall commence as of the 18 day of April, 2001 and shall continue thereafter up to and including the 15 day of May, 2001. 2 3 VI. SEVERABILITY All agreements and covenants contained herein are severable and in the event any of them shall be held to be illegal, invalid or unenforceable by any Court of competent jurisdiction, this Agreement shall be interpreted as if such illegal, invalid, or unenforceable agreements or covenants were not contained herein. VII. ARBITRATION OF DISPUTES: A. The parties agree that any dispute about the validity, interpretation, effect or alleged violations of this Agreement ("Arbitrable Dispute") between Breakiron and Company, must be submitted to final and binding arbitration in Tampa, Florida before an experienced employment arbitrator licensed to practice law in Florida and selected in accordance with the Employment Dispute Rules of the American Arbitration Association. The arbitrator may not modify or change this Agreement in any way. B. Each party shall pay the fees of their respective attorneys, the expenses of their witnesses and any other expenses connected with the arbitration, but all other costs of the arbitration, including the fees of the arbitration, cost of any record or transcript of the arbitration, administrative fees and other fees and costs shall be paid in equal shares by Breakiron and Company. The party losing the arbitration shall reimburse the party who prevailed for all expenses the prevailing party paid pursuant to the preceding two sentences. C. Arbitration in this manner shall be the exclusive remedy for any Arbitrable Dispute. The arbitrator's decision or award shall be fully enforceable and subject to an entry of judgment by a court of competent jurisdiction. Should Breakiron or Company attempt to resolve an Arbitrable Dispute by any method other than arbitration pursuant to this Section, the responding party shall be entitled to recover from the initiating party all damages, expenses and attorneys' fees incurred as a result and the responding party shall be entitled to the return of any payments that party made under this Agreement. VIII. LAW APPLICABLE This Agreement, and performance under its terms, shall be governed in all respects by the law of Florida except its law concerning choice of laws. IX. ENTIRE AGREEMENT This Agreement and the Release and Separation Agreement entered into simultaneously herewith expresses the whole and entire agreement between the parties with reference to Breakiron's arrangement and supersedes all prior agreements and understandings between Breakiron and the Company. These agreements cannot be modified or changed by any verbal agreement, nor shall any written modification be binding on the Company until such written modification shall have been approved in writing by the President and the Board of Directors of the Company. 3 4 X. NON-WAIVER OF RIGHTS All of the rights of the Company and Breakiron hereunder shall be cumulative and not alternative. A waiver or indulgence on the part of the Company or Breakiron of any rights or entitlements hereunder shall not be construed as a waiver of any other rights or entitlements hereunder by either the Company or Breakiron. In the event that a breach occurs or that a breach is alleged, the injured party shall give the breaching party written notice of his/its intention to terminate this Agreement. The notice shall specify the nature of the breach and shall give the breaching party fifteen (15) days to cure said breach. If the breach is not cured within the time allowed, this Agreement shall automatically terminate without further notice and the injured party may pursue any and all legal remedies available. XI. MISCELLANEOUS PROVISIONS The provisions of this Agreement shall extend to the successors, surviving corporations and assigns of the Company. Singular and masculine pronouns shall include plural, feminine, and artificial persons and entities whenever the context permits. XII. HEADINGS All paragraph headings are for reference purposes only and are not intended to alter the meaning or interpretation of any provision. XIII. BREAKIRON'S ACKNOWLEDGMENT Breakiron has been given reasonable time to study this Agreement, and has consulted with his lawyer concerning the terms of this Agreement. Breakiron acknowledges that he executes this Agreement freely and voluntarily, solely because he already fully and carefully considered the Agreement before signing it. 4 5 IN WITNESS WHEREOF, the parties hereto have executed this agreement as of 12th day of April 2001. "BREAKIRON" /s/ Chris P. Breakiron - ------------------------------------------ Chris P. Breakiron SWORN TO AND SUBSCRIBED BEFORE ME THIS 12th DAY OF APRIL, 2001. /s/ Gail T. Basile - ------------------------------------------ [NOTARY SEAL] Notary Public My Commission Expires: April 12, 2004 COMPANY INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. By: /s/ D. M. Howard --------------------------------------- D. M. Howard Title: President/CEO ------------------------------------ 5 EX-10.81 7 g67403ex10-81.txt ASSET PURCHASE AGREEMENT, EFFECTIVE JULY 31, 2000 1 Exhibit 10.81 ASSET PURCHASE AGREEMENT This ASSET PURCHASE AGREEMENT ("AGREEMENT") is entered into effective this 31st day of July, 2000 ("Closing Date"), by and between IMS DIRECT, INC., a Florida corporation ("SELLER") and BANKERS INSURANCE SERVICES, INC. (or its assigns), a Florida corporation ("PURCHASER"). Seller and Purchaser are hereinafter collectively referred to as the "PARTIES." RECITALS: A. Seller is in the business of direct market solicitation of agents and policyholders on behalf of insurance companies (the "BUSINESS"). B. Purchaser desires to purchase and Seller desires to sell certain assets related to the Business upon the terms and conditions set forth below in this Agreement. NOW THEREFORE, in consideration of the foregoing, and the mutual agreements, covenants, representations and warranties contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: ARTICLE 1 PURCHASE AND SALE OF ASSETS 1.1 PURCHASE AND SALE. On the terms and subject to the conditions of this Agreement, Purchaser shall purchase and Seller shall sell, assign, transfer, convey and deliver to Purchaser, at Closing, those assets of Seller used in the operation of the Business and listed on SCHEDULE 1.1 hereto (the "PURCHASED ASSETS"). 1.2 PURCHASE PRICE; PAYMENT. The aggregate purchase price (the "PURCHASE PRICE") to be paid by Seller to Purchaser for assumption of the Purchased Assets and the Assumed Liabilities (as hereinafter defined) is TWO THOUSAND FOUR HUNDRED AND SIXTY TWO AND 63/100 DOLLARS ($2,462.63). 1.3 ASSUMPTION OF LIABILITIES. At Closing, Purchaser shall assume the liabilities and obligations of Seller set forth in SCHEDULE 1.2 hereto ("Assumed Liabilities"), except for: (1) liability for unpaid wages under the Fair Labor Standards Act from the period beginning with the workweek April 16, 1998 through the workweek ending July 22, 2000; and (2) liability for return commissions on flood insurance policies (issued between December 1, 1999 and July 31, 2000) that were cancelled by insureds between the period of time that begins on August 1, 2000 and ends on July 31, 2001 and that were written under the agent account numbers listed in SCHEDULE 1.3. ARTICLE 2 COVENANTS REGARDING EMPLOYEES 2.1 SELLER'S EMPLOYEES. All of the employees of Seller who are in employment status on the day immediately prior to the Closing (the "AFFECTED EMPLOYEES") shall cease their employment status with Seller on the Closing Date and immediately thereafter shall be offered employment by Purchaser under terms that recognize prior employment with Seller and its affiliated entities for purposes of all benefit plans, programs, arrangements or other seniority-based programs or benefits maintained by Purchaser on and after the Closing Date for the benefit of the Affected Employees. The term "EMPLOYMENT STATUS" includes any individual who is actively at work and any individual not actively at work due to illness, short-term disability or sick leave, long-term disability, authorized leave of absence, layoff for lack of work, or service in the Armed Force of the United States. 1 2 2.2 RETAINED RESPONSIBILITIES. Except to the extent such claims constitute Assumed Liabilities, Seller shall be responsible for paying or ensuring payment of claims incurred on or prior to the Closing Date under any employee benefit programs in which Seller participates with respect to the Affected Employees, in accordance with the terms and conditions of such programs. A claim is "INCURRED" on the date the service or property that gives rise to the claim is rendered or furnished, without regard to when the individual who receives the service is billed. 2.3 EMPLOYEE PLANS. Effective as of the Closing Date, the Purchaser shall assume the reserves corresponding to Seller's vacation and sick pay plans for each Affected Employee, and shall permit the Affected Employees to take any unused paid vacation and/or paid sick days that have accrued prior to Closing in accordance with the terms of such plans or programs. 2.4 PAYROLL AND PAYROLL TAX. Seller shall pay directly all wages and other remuneration due to Affected Employees in respect of the period prior to Closing and there shall be a clean cutoff of payroll for payroll tax purposes. ARTICLE 3 CLOSING The closing of the transactions to be affected hereunder (the "CLOSING") shall be held contemporaneously with the execution and delivery of this Agreement on July 31, 2000 (the "Closing Date") at the offices of Purchaser, or at such place as shall be mutually agreed upon by Purchaser and Seller. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants to Purchaser that the following statements are true, correct and complete as of the date of this Agreement: 4.1 ORGANIZATION AND GOOD STANDING OF SELLER. Seller is a corporation duty organized, validly existing and of active status under the laws of the State of Florida and has all of the requisite corporate power and authority to make the representations, warranties and agreements made hereunder, to execute and deliver this Agreement and to perform its obligations under this Agreement. 4.2 AUTHORIZATION OF AGREEMENT AND ENFORCEABILITY. This Agreement and the other agreements and documents contemplated hereby have been duly and validly authorized, executed and delivered by Seller and constitute the legal, valid and binding obligations of Seller, enforceable against Seller in a accordance with their respective terms. 4.3 TITLE TO PURCHASED ASSETS. Seller has good and marketable title to the personal property contained in the Purchased Assets. At Closing, Purchaser shall receive good and marketable title to all of the Purchased Assets, free and clear of all liens, security interests or other claims. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to Seller that the following statements are true, correct and complete as of the date of the Agreement: 5.1 ORGANIZATION AND GOOD STANDING OF PURCHASER. Purchaser is a corporation duly organized, validly existing and of active status under the laws of the State of Florida, and has all of the requisite corporate power and authority to make the representations, warranties and agreements made hereunder, to execute and deliver this Agreement and to perform its obligations under this Agreement. 2 3 5.2 AUTHORIZATION OF AGREEMENT AND ENFORCEABILITY. This Agreement and the other agreements and documents contemplated hereby have been duly and validly authorized, executed and delivered by Purchaser and constitute the valid and legally binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms. ARTICLE 6 DELIVERIES AT CLOSING 6.1 DELIVERIES BY SELLER. At Closing, Seller shall deliver or cause to be delivered to Purchaser (1) a Bill of Sale in form and substance reasonably satisfactory to Purchaser, (2) an Indemnification Agreement in form and substance reasonably satisfactory to Buyer relative to a certain NationsBank security interest on the Purchased Assets, and (3) if required, payment of the amount determined in accordance with the provisions of Section 1.2 hereof. 6.2 DELIVERIES BY PURCHASER. At Closing, Purchaser shall deliver to Seller (i) documentation evidencing the assumption of the Assumed Liabilities in form and substance reasonably satisfactory to Seller and (ii) if required, payment of the amount determined in accordance with the provisions of Section 1.3 hereof. ARTICLE 7 GENERAL 7.1 NOTICES. All notices, requests, demands and other communications which are required to be or may be given under this Agreement shall be in writing and shall be deemed to have been duly delivered (a) on the date of delivery if by personal delivery; or (b) on the date on which return receipt is signed or delivery is refused if dispatched by certified or registered first class mail, Federal Express, or similar service, postage prepaid, return receipt requested, to the party to whom the same is so given: If to Seller: IMS Direct, Inc. 360 Central Avenue St. Petersburg, Florida 33701 Attn: President if to Purchaser: Bankers Insurance Services, Inc. 360 Central Avenue St, Petersburg, Florida 33701 Attn: President 7.2 FURTHER ASSURANCES. After the Closing, each party shall, at the reasonable request of the other and without further consideration, execute and deliver all such further documents, and take such other action, as such other party may reasonably request to consummate or effectuate the transactions contemplated plated by this Agreement. 7.3 ENTIRE AGREEMENT. This Agreement (including the Schedules hereto) supersedes all prior agreements and understandings, oral and written, between the Parties with respect to the subject matter hereof, and this Agreement together with the agreements and documents contemplated hereunder, constitutes the entire agreement between the Parties. 7.4 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. 3 4 7.5 GOVERNING LAW. This Agreement shall be construed both as to validity and performance and governed by the and enforced in accordance with the laws of the State of Florida, without giving effect to any choice of law principles. 7.6 SEVERABILITY. If any term, covenant, condition, or provision of this Agreement or the application thereof to any circumstance shall be invalid or unenforceable to any extent, the remaining terms, covenants, conditions, and provisions of this Agreement shall not be affected, and each remaining term, covenant, condition, and provision of this Agreement shall be valid and shall be enforceable to the fullest extent permitted by law. If any provision of this Agreement is so broadly as to be unenforceable, such provision shall be interpreted to be only as broad as is enforceable. 7.7 AMENDMENTS. This Agreement may not be modified or changed except by an instrument or instruments in writing signed by both Parties. 7.8 SUCCESSORS AND ASSIGNS. The covenants, agreements and conditions contained or granted herein shall be binding upon and shall inure to the benefit of Purchaser and Seller and their respective successors and assigns. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first above written. IMS DIRECT, INC. BANK INSURANCE SERVICES, INC. By: /s/ Chris Breakiron By: /s/ G. Kristin Delano --------------------------------- --------------------------------- Chris Breakiron G. Kristin Delano Its: Secretary Its: Secretary --------------------------------- --------------------------------- Date: 9/6/2000 Date: 9/6/2000 -------------------------------- -------------------------------- 4 5 SCHEDULE 1.1 LIST OF PURCHASED ASSETS Item # Equipment Description Net Book Value - ------ --------------------- -------------- 1 HP Laser Jet Printer 224.07 2 HP Laser Jet 400ONT Printer 1325.90 3 CTX 17" Monitor 127.46 4 CTX 17" Monitor 127.46 5 CTX 17" Monitor 127.46 6 Compaq 17" Monitor V75 187.96 7 Steel Case Furniture 265.91 8 Various Steel Case Furniture 146.26 9 Sales Logix Software 6073.42 10 Sales Logix Setup 19378.78 11 MS008 Handsfree Display Telephone 196.52 12 MS008 Handsfree Display Telephone 196.52 13 MS008 Handsfree Display Telephone 196.52 14 MS008 Handsfree Display Telephone 196.52 15 MS008 Handsfree Display Telephone 196.52 16 MS008 Handsfree Display Telephone 196.52 17 MS008 Handsfree Display Telephone 196.52 18 MS008 Handsfree Display Telephone 196.52 19 MS008 Handsfree Display Telephone 196.52 20 MS008 Handsfree Display Telephone 196.52 21 MS008 Handsfree Display Telephone 196.52 22 MS008 Handsfree Display Telephone 198.52 23 MS2518 Handsfree Display Telephone 196.52 24 MS2616 Handsfree Display Telephone 196.52 -------- 30735.96 ======== 5 6 SCHEDULE 1.2 LIST OF ASSUMED LIABILITIES Accrued Compaq lease obligation (14,675.03) *(the relevant Compaq lease equipment that is subject to the lease is specified below) Payroll accrual (7,637.01) Payroll tax accrual (584.23) 0.0765 Vacation accrual (9,570.20) Vacation tax accrual (732.12) 0.0765 *DETAILED COMPAQ COMPUTER LEASE OBLIGATION: WK95R KCASALE 8002 10000 20 18 183.93 12 1,967.18 6843BW32A100 OMLACY 8002 10000 8 24 77.16 19 1,466.04 6843BW32D669 JDROUNDT 8002 10000 8 24 77.16 18 1,466.04 6843BW32A146 KCASALE 8002 10000 8 24 77.16 18 1,466.04 6843BW32D678 MDDENNAR 8002 10000 8 24 77.16 19 1,466.04 6843BW32D693 VAKENDAL 8002 10000 8 24 77.16 19 1,466.04 6838BW32J167 SDSEANE 8002 10000 8 24 77.16 19 1,466.04 6848BW32F369 WXALVARE 8002 10000 13 24 61.85 16 969.60 6848BW32F731 NVASQUEZ 8002 10000 13 24 61.85 16 969.60 8848BW32F732 PECULVER 8002 10000 13 24 61.85 16 969.60 8914BW4PA847 DTWALKER 8002 10000 24 24 56.97 11 626.57 8914BW4PA803 KCASALE 8002 10000 24 24 56.97 11 626.57 6946CKP7K464 KCASALE 8002 10000 25 24 47.80 7 334.60 638CF03DQ805 OMLACY 8002 10000 7 48 11.70 19 222.30 638CF03DQ799 MDDENNAR 8002 10000 7 48 11.70 19 222.30 850CF03DF355 PECULVER 8002 10000 14 48 10.60 16 168.00 852CF03DH430 KCASALE 8002 10000 15 48 10.54 15 158.10 850CF03DF090 WXALVARE 8002 10000 18 48 11.43 13 148.69 922CF47DF425 KCASALE 8002 10000 25 48 10.86 11 119.46 741GB02AB191 VAKENDAL 8002 10000 4 48 20.45 21 429.45 905GO02AC521 LOROUNDT 8002 10000 25 48 16.36 11 179.85 ------ --------- 19,527.46 4,852.43 --------- 14,675.03 ========= 6 7 SCHEDULE 1.3 AGENT ACCOUNT NUMBERS 1. 62001 2. 62003 3. 62008 4. 62009 5. 62012 6. 62013 7. 62014 8. 62015 7 8 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT is executed to be effective as of the 31st day of July, 2000 by Insurance Management Solutions Group, Inc., a (herein, "Indemnitor"). R E C I T A L S : - - - - - - - - NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, Indemnitor shall indemnify Bankers Insurance Services, Inc. and hold its officers, directors, employees and agents (herein collectively called, "Indemnified Parties") harmless against any expenses (including, but not limited to a reasonable attorney's fees in all investigations, trials, appeals, bankruptcies and administrative proceedings) losses or other liabilities and judgments (including without limitation, any expenses reasonably incurred by an Indemnified Party in connection with investigating, defending and appealing any claims alleged or proceedings brought against the Indemnified Party, any amounts paid in settlement of any such claims or proceedings to the extent such settlement is effected with the consent of the Indemnitor which consent shall not be unreasonably withheld or delayed) that the Indemnified Party may reasonably incur by reason of: The exercise of a security interest that is held by NationsBank, N.A., pursuant to a certain Loan Agreement by and between NationsBank, N.A. and Insurance Management Solutions Group, Inc., in certain "Purchase Assets" (as that term is defined in the Asset Purchase Agreement by and between Bankers Insurance Services, Inc. and IMS Direct) If an Indemnified Party should bring a court action alleging breach of this Indemnification Agreement, the prevailing party shall be entitled to recover all of its legal expenses, including reasonable attorney's fees and costs (including legal expenses for any appeals taken), and to have the same awarded as part of the judgement in the proceeding in which such legal expenses and attorney's fees were incurred. IN WITNESS WHEREOF, the Indemnitor has caused this Indemnification Agreement to be executed as of the day and year first above set forth. Insurance Management Solutions Group, Inc. BY: /s/ Chris P. Breakiron ---------------------------------- Chris P. Breakiron As Its: CFO ---------------------------------- Date: 9/6/00 ---------------------------------- 9 BILL OF SALE KNOW ALL MEN BY THESE PRESENTS: That, INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., its subsidiaries and affiliates (including, but not limited to IMS DIRECT, INC. and INSURANCE MANAGEMENT SOLUTIONS, INC.) of the first part, for and in consideration of the sum of Ten Dollars, in lawful money (and other good and valuable consideration unto it moving) to it paid by BANKERS INSURANCE SERVICES, INC., of the second part, the receipt of which is hereby acknowledged by it, has granted, bargained, sold, transferred, set over and delivered, and by these presents does grant, bargain, sell, transfer, set over and deliver unto the party of the second part, their successors and assigns, all those certain goods and chattels, described as follows: All of party of the first parts right, title and interest in the assets listed in the attached Schedule 1.1. TO HAVE AND TO HOLD the same unto the party of the second part, its and assigns forever. And the party of the first part, for itself and its successors, hereby covenants to and with the party of the second part its successors and assigns that it is the lawful owner of the said goods and chattels; that subject to the foregoing limitations, they are free from all liens and encumbrances; that it has good right to sell the same as aforesaid, and that it will warrant and defend the same against the lawful claims and demands of all persons whomsoever subject to the foregoing limitations. IN WITNESS WHEREOF, the party of the first part has caused his name to be hereunto subscribed and his seal to be affixed this 31st day of July, 2000. IMS Direct, Inc. BY: /s/ Chris P. Breakiron ---------------------------------- As Its: Secretary ------------------------------ Date: 9/6/00 -------------------------------- INSURANCE MANAGEMENT SOLUTIONS, INC. BY: /s/ Chris P. Breakiron ---------------------------------- As Its: CFO ------------------------------ Date: 9/6/00 -------------------------------- INSURANCE MANAGEMENT SOLUTIONS, GROUP, INC. BY: /s/ Chris P. Breakiron ---------------------------------- As Its: CFO ------------------------------ Date: 9/6/00 -------------------------------- 2 10 ASSIGNMENT OF FLOOD INSURANCE MONITORING AGREEMENT KNOW ALL MEN BY THESE PRESENTS, that IMS DIRECT, INC., a Florida corporation, in consideration of the sum of Ten Dollars ($10.00) and other valuable consideration in hand paid, receipt whereof is hereby acknowledged, does hereby assign and transfer over unto BANKERS INSURANCE SERVICES, INC., or its assigns, all of it's right, title and interest in and to that certain Flood Insurance Monitoring Agreement entered into on the 1st day of August, 1996 by and between IMS Direct, Inc.; NationsBank, N.A.; NationsBank Insurance Services and NationsBank Hutchins Banking Center. IN WITNESS WHEREOF, the undersigned has set their hands and seals as of the 31st day of July, 2000. IMS Direct, Inc. BY: /s/ Chris P. Breakiron ---------------------------------- Chris P. Breakiron As Its: Secretary ------------------------------ Date: 9/6/00 -------------------------------- ACCEPTANCE I HEREBY ACCEPT the Assignment of the Flood Insurance Monitoring Agreement described above. Bankers Insurance Services, Inc. BY: /s/ G. Kristen Delano ---------------------------------- G. Kristen Delano As Its: Secretary ------------------------------ Date: 9/6/00 -------------------------------- EX-10.82 8 g67403ex10-82.txt LETTER AGREEMENT, DATED APRIL 13, 2001 1 EXHIBIT 10.82 April 13, 2001 Bankers Insurance Group, Inc. 360 Central Avenue St. Petersburg, Florida 33731 RE: AMENDMENT/EXTENSION/TERMINATION OF EXISTING AGREEMENTS WHEREAS, Insurance Management Solutions, Inc. ("IMS"), a wholly-owned subsidiary of Insurance Management Solutions Group, Inc. ("IMSG"), is currently providing insurance administration services to Bankers Security Insurance Company ("BSIC"), First Community Insurance Company ("FCIC"), and Bankers Insurance Company ("BIC") pursuant to separate insurance administration services agreements (as amended to date, the "Services Agreements") all dated January 1, 1998, between IMS and each of BSIC, FCIC and BIC (collectively, the "Insurance Subsidiaries"),; WHEREAS, the term of each of the Services Agreements is scheduled to expire on June 1, 2001, unless renewed pursuant to its terms; WHEREAS, the respective parties desire to extend the term of each of the Services Agreements for an additional period of eighteen (18) months, subject to the terms and conditions set forth herein; WHEREAS, the respective parties desire to amend the Service Agreements to provide for the continuing provision of insurance administration services at current, competitive rates; WHEREAS, the parties desire that the Insurance Subsidiaries assume responsibility for data and technical services (and assume the personnel and accompanying payroll of those persons providing such technical and data services) that were previously provided by IMS to the Insurance Subsidiaries under the Services Agreements; WHEREAS, Bankers Insurance Group, Inc. ("BIG") provides certain management support services to IMS pursuant to a certain Administrative Services Agreement (as amended to date, the "Administration Agreement"), dated January 1, 1998, between IMS and BIG; WHEREAS, BIG and IMS desire to terminate the existing Administration Agreement and enter into a new Corporate Services Agreement (the "Corporate Services Agreement") pursuant to which BIG will provide certain corporate marketing and training services to IMS; WHEREAS, IMS provides certain system development support services to BIG pursuant to a certain Technical Support Services Agreement (as amended to date, the "Old Support Agreement") dated April 1, 1999, between IMS and BIG,; and WHEREAS, IMS and BIG wish to terminate the Old Support Agreement and enter into a new Technical Support Services Agreement (the "New Support Agreement") pursuant to which BIG will assume certain personnel and obligations of IMS and provide certain data and technical support services to IMS. 2 Bankers Insurance Group, Inc. 4/13/01 Page 2 NOW, THEREFORE, IMS, BIG, BSIC, BIC and FCIC hereby agree as follows: I. Amendments to Services Agreements: IMS and the Insurance Subsidiaries hereby agree that, effective June 1, 2001 (a) the term of each of the Services Agreements shall be extended to December 1, 2002 and (b) the following service fee schedule shall apply:
POLICY PROCESSING --------------------------------------------------------------------------------------------------- LINE OF BUSINESS SERVICE FEE CONSIDERATION --------------------------- -------------- -------------------------------------------------------- Flood 5.5% Based upon direct written premium and 60% of Flood business processed via internet * --------------------------- -------------- -------------------------------------------------------- Homeowners 7% Based upon direct written premium --------------------------- -------------- -------------------------------------------------------- Commercial 3% Based upon direct written premium --------------------------- -------------- -------------------------------------------------------- Auto No Change Once new system created then services fees will be amended, upon mutual agreement, for this Line of Business --------------------------------------------------------------------------------------------------- CLAIMS PROCESSING --------------------------------------------------------------------------------------------------- LINE OF BUSINESS SERVICE FEE CONSIDERATION --------------------------- -------------- -------------------------------------------------------- Flood 3.3% Based upon net claim after deductible --------------------------- -------------- -------------------------------------------------------- All other Claims Service No Change --------------------------------------------------------------------------------------------------- AS 400 USAGE --------------------------------------------------------------------------------------------------- The Insurance Subsidiaries shall pay an aggregate flat fee of Ten Thousand Dollars ($10,000) per month for AS 400 usage --------------------------------------------------------------------------------------------------- DATA AND TECHNICAL SUPPORT --------------------------------------------------------------------------------------------------- IMS will no longer provide data and technical support services to the Insurance Subsidiaries under the Services Agreements. ---------------------------------------------------------------------------------------------------
IMS and the Insurance Subsidiaries hereby further agree to act in good faith to execute and deliver, on or before June 1, 2001, a more definitive amendment to the Services Agreements incorporating the terms set forth herein. In the event that such a definitive amendment to the Services Agreements has not been executed and delivered by June 1, 2001, however, the parties agree that the amendments to the Services Agreements provided for herein shall be binding and given full force and effect. * Within sixty (60) calendar days after IMS provides internet access (which shall include deployment of the internet access into live production) to the Insurance Subsidiaries' insurance sales agents for the Flood insurance line of business ("Internet Access Milestone"), the Insurance Subsidiaries shall ensure that within any monthly billing period a minimum of sixty percent (60%) of all new business that is processed by IMS for the Flood insurance line of business is processed via internet access but rather without the manual intervention of IMS. If in any given monthly billing period, after the Internet Access Milestone, more than forty percent (40%) of such new Flood insurance line of business is not processed by IMS via internet access and with the manual intervention of IMS, then the Insurance Subsidiaries shall retroactively pay IMS on a time and material basis for the manual processing of any new business that is in excess of the forty percent (40%) level. 3 Bankers Insurance Group, Inc. 4/13/01 Page 3 II. Termination of Administration Agreement/Execution of Corporate Services Agreement IMS and BIG hereby agree that the Administration Agreement shall be terminated effective April 1, 2001. IMS and BIG hereby further agree to act in good faith to negotiate, execute and deliver, on or before June 1, 2001, the Corporate Services Agreement, pursuant to which BIG shall provide, among other things, the following services to IMS at the rates specified below:
--------------------------------------------------------------------------------------------------- CORPORATE MARKETING --------------------------------------------------------------------------------------------------- FUNCTION HOURLY RATE SERVICES --------------------------- --------------- ------------------------------------------------------- Graphic Design & Writing $ 55 Basic brochures, letters, proposals, and sales presentations --------------------------- --------------- ------------------------------------------------------- Administrative Fees $ 40 Promotional items, ordering follow-up, meeting management, and business cards --------------------------- --------------- ------------------------------------------------------- Web Site Development $ 75 Site planning, design and formatting, navigation, and animation and effects. --------------------------- --------------- ------------------------------------------------------- Creative/Marketing $100 Management and Strategy --------------------------------------------------------------------------------------------------- CORPORATE TRAINING --------------------------------------------------------------------------------------------------- FUNCTION HOURLY RATE SERVICES --------------------------- --------------- ------------------------------------------------------- DDI Training $ 42 Leadership training --------------------------- --------------- -------------------------------------------------------
In the event that the Corporate Services Agreement has not been executed and delivered by June 1, 2001, BIG hereby agrees to provide the foregoing services to IMS at the above specified rates until the earlier of (a) the execution and delivery of the Corporate Services Agreement, or (b) December 31, 2002. III. Termination of Old Support Agreement/Execution of New Support Agreement: IMS and BIG hereby agree that the Old Support Agreement shall be terminated effective April 1, 2001. IMS and BIG hereby further agree to act in good faith to negotiate, execute, and deliver the New Support Agreement, pursuant to which BIG shall provide, among other things, the following data and technical support services to IMS at the rates specified below:
--------------------------------------------------------------------------------------------------- TECHNICAL SUPPORT --------------------------------------------------------------------------------------------------- FUNCTION PER MONTH/EMPLOYEE RATE -------------------------------------------------------------------------- ------------------------ Desktop and Telecom Support $130 -------------------------------------------------------------------------- ------------------------ Microsoft Desktop Software $ 50 -------------------------------------------------------------------------- ------------------------ Internet Usage, Firewall $ 10 -------------------------------------------------------------------------- ------------------------ Maintenance of Infrastructure, AS 400 Infrastructure and Basic Upgrades $ 10 -------------------------------------------------------------------------- ------------------------ Development Time and Materials Rate -------------------------------------------------------------------------- ------------------------
In the event that the New Support Agreement has not been executed and delivered by June 1, 2001, BIG hereby agrees to provide the foregoing data and technical support services to IMS at the above specified rates until the earlier of (a) the execution and delivery of the New Support Agreement or (b) December 1, 2002. 4 Bankers Insurance Group, Inc. 4/13/01 Page 4 IV. If either party should bring any legal action alleging breach of this Letter Agreement or seeking to enforce, rescind, renounce, declare void or terminate this Letter Agreement or any provisions hereof, the prevailing party shall be entitled to recover all of its legal expenses, including reasonable attorney's fees and costs (including legal expenses for any appeals taken), and to have the same awarded as part of the judgment in the proceeding in which such legal expenses and attorney's fees were incurred. V. The parties agree not to disclose the terms and conditions of this Letter Agreement to any third party, except (a) as required in the normal conduct of their respective businesses or (b) as required by law or regulation including, without limitation, any federal securities law or regulation. VI. Legal Effect: This Letter Agreement shall constitute a definitive and binding agreement by and among the parties hereto. If you are in agreement with the foregoing, please indicate by signing this Letter Agreement in the space set forth below. Sincerely, David M. Howard, President Insurance Management Solutions, Inc. 5 Bankers Insurance Group, Inc. 4/13/01 Page 5 Accepted and agreed to as of this 13th day of April, 2001 IMS: Insurance Management Solutions, Inc. By: /s/ D. M. Howard -------------------------------- As Its: President/CEO ---------------------------- Date: 4/13/01 ------------------------------ BIG: Bankers Insurance Group, Inc. By: /s/ Robert G. Menke -------------------------------- As Its: President/CEO ---------------------------- Date: 4/13/01 ------------------------------ Insurance Subsidiaries: Bankers Insurance Company ("BIC") By: /s/ Robert G. Menke -------------------------------- As Its: President/CEO ---------------------------- Date: 4/13/01 ------------------------------ First Community Insurance Company ("FCIC") By: /s/ Robert G. Menke -------------------------------- As Its: President/CEO ---------------------------- Date: 4/13/01 ------------------------------ Bankers Security Insurance Company ("BSIC") By: /s/ Robert G. Menke -------------------------------- As Its: President/CEO ---------------------------- Date: 4/13/01 ------------------------------ EX-10.83 9 g67403ex10-83.txt SETTLEMENT AGREEMENT, DATED FEBRUARY 20, 2001 1 Exhibit 10.83 SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT ("Agreement") is entered into as of February 20, 2001 between INSTANT INSURANCE HOLDINGS, INC. ("Instant Holdings"), a corporation organized and existing under the laws of the State of Delaware with its principal place of business located at 8113 Ridgepoint Drive, Suite 214, Irving Texas, 75063, INSTANT AUTO INSURANCE COMPANY ("Instant Auto"), a corporation organized and existing under the laws of the State of Missouri with its principal place of business located at 8113 Ridgepoint Drive, Suite 214, Irving, Texas 75063 (collectively, "Instant Holdings" and "Instant Auto" shall herein be referred to as "Instant"), and INSURANCE MANAGEMENT SOLUTIONS , INC. ("IMS"), a Florida corporation, with reference to the following: A. On June 22, 2000, IMS and Instant entered into an Insurance Administration Services Agreement ("Initial Agreement") pursuant to which IMS was to provide claims, development and insurance outsourcing services (collectively, "Services") to Instant B. On June 30, 2000, IMS and Instant entered into a Development Services Agreement ("Development Agreement") and an (interim) Insurance Administration Services Agreement ("Interim Claims Agreement") pursuant to which IMS was to provide additional Services to Instant. C. IMS asserts that pursuant to the Initial Agreement, Development Agreement and the Interim Claims Agreement, IMS performed Services on behalf of Instant and, pursuant to invoices submitted to Instant but not yet paid by Instant, IMS is due approximately $848,000 for such Services performed on behalf of Instant through September 30, 2000. 2 D. IMS further asserts that as a result of such non-payment, the Initial Agreement, Development Agreement and Interim Claims Agreement (collectively, the "Services Agreements") were terminated by IMS effective October 4, 2000 ("Termination Date"). E. After the Termination Date, IMS continued to perform runoff claims administration services ("Runoff Claim Services") on behalf of Instant and Instant's third party insurance company clients ("Third Party Insurers"), including Millers American Group, Inc. ("Millers"), State and County Mutual Insurance Company ("State & County") and Independent Fire ("Independent"). With respect to the Runoff Claim Services performed on behalf of Millers after October 1, 2000, IMS performed such Runoff Claim Services pursuant to a Claim Administration Service Agreement ("Millers Agreement") between Millers and IMS effective October 1, 2000. Instant acknowledges that the Millers Agreement was negotiated at the request and with the full knowledge of Instant. F. Disputes have arisen between the parties as to performance and/or payments due under the Services Agreements and with respect to the Runoff Claim Services, and the parties now wish to settle any disputes that may have arisen between the parties regarding performance and/or payments due under the Service Agreements and with respect to the Runoff Claim Services. NOW THEREFORE, the parties hereby agree as follows: 1. Termination. Instant and IMS hereby acknowledge and agree that the Initial Agreement, the Development Agreement and the Interim Claims Agreement were terminated effective as of the Termination Date and the parties shall have no further rights and obligations thereunder. Further, except as to any arbitration action that may relate to or arise from the Runoff Claim Services performed by IMS after January 1, 2001, any pending - 2 - 3 arbitration action relating to the Services Agreements filed by either IMS or Instant shall be promptly terminated and dismissed with prejudice. 2. Payment. In consideration of the covenants, warranties, and conditions herein, Instant shall contemporaneously with the execution and delivery of this Agreement by the parties pay to IMS the sum of $800,000 (the "Payment"), by wire transfer to an account designated by IMS. Except as provided in Section 9(f) hereof, the parties shall have no other obligations to pay any fees or other amounts, including (without limitation) the return of any fees or other amounts paid to date under the Services Agreements or with respect to the performance of Runoff Claim Services on or after October 1, 2000. 3. Code Materials. Pursuant to the Development Agreement and the Initial Agreement, IMS was in the process of developing software programming code and related programming materials specifically for Instant, all as specifically identified in Exhibit A hereto (collectively, the "Code Materials"). IMS hereby assigns and transfers to Instant any and all right, title and interest, if any, IMS may have in and to the Code Materials, including without limitation any and all intellectual property rights, if any, IMS may have therein. 4. Confidential Information. To the date hereof, each of IMS and Instant has returned to the other party all tangible (i.e., paper and diskette) copies of Confidential Information (as defined in the Services Agreements) in its possession belonging to such other party, as more particularly described in Exhibit B hereto. Each of IMS and Instant shall promptly delete all electronic (including disk) copies of Confidential Information in its possession belonging to the other party. Each of IMS and Instant represents and warrants to the other party that it is not aware of any other Confidential Information of such other party in its possession, but in any event shall promptly return to such other party all tangible copies, and - 3 - 4 delete all electronic copies, of any such additional Confidential Information discovered hereafter. From and after the date hereof, neither IMS nor Instant shall retain any rights whatsoever to the Confidential Information of the other party, and neither party shall use or disclose any Confidential Information to any third party, except as required by law. Each of IMS and Instant represents and warrants to the other that the Confidential Information of the other party has not been used or disclosed except as specifically permitted by the Services Agreements or pursuant to the performance of Runoff Claim Services by IMS since October 1, 2000. Each of IMS and Instant shall defend and indemnify the other party, and its directors, officers, and affiliates, from and against any third party claim arising from the breach of any covenant, warranty or representation hereunder, provided the indemnified party gives prompt written notice of any such claim and provides reasonable assistance to the indemnifying party in such defense. 5. No Warranties Relating to Code Materials. Instant is acquiring the Code Materials on an "as is" basis, with no representations or warranties whatsoever as to title, working condition, suitability for a particular purpose, noninfringement or misappropriation of third-party intellectual property rights, or otherwise. 6. Mutual Releases. Except for rights and obligations expressly created or preserved by this Agreement, and in consideration of the Payment and execution and delivery of this Agreement, Instant, on the one hand, and IMS on the other hand, mutually release and forever discharge each other and their past and present parent companies, subsidiaries, partners, officers, shareholders, affiliated entities, agents, directors, attorneys, and employees, and their respective predecessors, successors, and assigns, from any and all claims, liabilities, demands, obligations or causes of action of any nature whatsoever based on conduct or omissions relating to or arising out of (a) the Initial Agreement, the Development Agreement, the Interim Claims - 4 - 5 Agreement, or (b) the Runoff Claim Services prior to January 1, 2001; including, but not limited to, IMS' withdrawal and utilization of funds from Instant's Claim Account (as defined in the Services Agreements) to facilitate its performance of the Runoff Claim Services under the Millers Agreement or otherwise. Each of the parties expressly acknowledges that it may in the future discover facts in addition to or different from those it now knows or believes to be true, but each of the parties agrees nevertheless to fully, finally and forever settle such claims, whether or not hidden or excluded, known or unknown, without regard to the subsequent discovery or existence of different or additional facts. 7. Runoff Claim Services. The parties acknowledge that IMS has been paid $236,600 in fees from the period October 1,2000 through December 31,2000 for Runoff Claim Services. The above amount was the total fees that were due and payable to IMS for Runoff Claim Services performed on behalf of Millers during the period ending December 31, 2000. No further payments shall be due from Instant to IMS for such Runoff Claim Services performed on behalf of Third Party Insurers or Instant prior to January 1, 2001 and currently outstanding invoices for Runoff Claim Services performed on behalf of State & County and Independent Fire totaling approximately $83,000 shall be considered paid and no longer due. With respect to Runoff Claim Services performed or to be performed on or after January 1, 2001, IMS will perform Runoff Claim Services on behalf of Instant and Third Party Insurers pursuant to the Runoff Claim Administration Services Agreement ("Runoff Agreement") attached hereto as Exhibit C. In the interim, until the Runoff Agreement is executed and delivered, Instant hereby gives IMS authority to withdraw and utilize funds from its Claim Account for the specific purpose of making loss payments to insureds, claimants, and related payments to providers of services and various third parties other than IMS, in the performance of Runoff Claim Services - 5 - 6 on behalf of Instant and Third Party Insurers. IMS is specifically prohibited from withdrawing funds for services rendered as payment to IMS. 8. Confidentiality and Publicity. The nature, terms and substance of this Agreement shall be held in strict confidence by the parties. Notwithstanding the foregoing, the parties and their counsel may disclose the terms hereof for tax or financial reporting, SEC reporting, regulatory reporting, accounting, professional liability insurance purposes, for purposes of enforcing this Agreement, or as otherwise required by law (including, without limitation, applicable securities or regulatory statutes and regulations). Neither party will disparage the other to third parties in relation to the subject of this Agreement. Neither party shall issue any other publicity regarding this Agreement without the prior written consent of all of the parties, which consent shall not be unreasonably withheld. 9. Miscellaneous. (a) Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, executors, administrators, agents, representatives, and permitted assigns. (b) Integration. This Agreement and the related Exhibits attached hereto represent and contain the entire agreement and understanding between the parties and supersede any and all prior agreements, representations and understandings with respect to the matters contained herein. Each party agrees that it has not relied upon any representation, warranty, condition, understanding or agreement of any kind in entering into this Agreement other than those actually set forth herein. (c) No Assignment. The parties represent and warrant that they have not assigned, transferred, or purported to assign or transfer, in whole or in part, any interest in - 6 - 7 any of the rights and claims subject to this Agreement. This Agreement may not be assigned or transferred, in whole or in part, by either party without the prior written consent of the other, which consent may be withheld for any reason. (d) No Amendment. This Agreement may not be amended or modified in any respect except by a written instrument executed by the parties. (e) Applicable Law; Forum. This Agreement shall be interpreted, construed and enforced in accordance with the laws of the state of Texas, without regard to its conflict of laws principles. Except for requests for injunctive or other equitable relief, which may be heard in any court of competent jurisdiction, all disputes hereunder shall be decided by courts located in Dallas, County, Texas, to whose exclusive jurisdiction the parties hereby consent. (f) Execution of Additional Documents. The parties shall execute and exchange such additional documentation as may be reasonably necessary to accomplish and fulfill their respective obligations and agreements as set forth herein (provided, however, that the party requesting such additional documentation shall reimburse the other party for the costs and expenses, including reasonable attorneys' fees incurred in preparing, executing and delivering the same). (g) Notices. Any and all notices and any other communications hereunder may not be delivered via e-mail but shall be given in writing by hand delivery, by overnight carrier, by registered or certified mail or by facsimile transmission and shall be addressed as follows (unless properly notified of a new address): As to Instant: Instant Insurance Holdings, Inc. 8113 Ridgepoint Drive, Suite 214 Irving, Texas 75063 Fax Number: 214-496-3611 Attention: President As to IMS: Insurance Management Solutions, Inc. 360 Central Avenue, 16th Floor St. Petersburg, FL 33701 Fax Number: (727) 823-6518 Attention: President - 7 - 8 Notices sent by hand delivery should be deemed effective on the date of that hand delivery. Notices sent by overnight carrier should deemed effective on the next business day after being placed into the hands of the overnight carrier. Notices sent by registered or certified mail shall be deemed effective on the fifth business day after being deposited into the post office. Notices sent by facsimile transmission shall be deemed to be effective on the day when sent if sent prior to 4:30 p.m. (the time being determined by the time zone of the recipient), otherwise they shall be deemed effective on the next business day. (h) Joint and Several Obligations. Instant shall be jointly and severally liable to IMS for all agreements, obligations, covenants, representations and warranties made by Instant to IMS pursuant to this Agreement. IMS shall be liable to Instant for all agreements, obligations, covenants, representations and warranties made by IMS to Instant pursuant to this Agreement. - 8 - 9 "IMS": "Instant Holdings": INSURANCE MANAGEMENT SOLUTIONS, INC. INSTANT INSURANCE HOLDINGS, INC. By: /s/ D. M. Howard By: /s/ B. G. Porter --------------------------------- ---------------------------------- D. M. Howard B. G. Porter As its: President/CEO As its: President/COO ----------------------------- ------------------------------ Date: 20 February 2001 Date: 22 February 2001 ------------------------------- -------------------------------- "Instant Auto": INSTANT AUTO INSURANCE COMPANY By: B. G. Porter --------------------------------- As its: President/COO ------------------------------------- Date: 22 February 2001 --------------------------------------- EXHIBIT A - CODE MATERIALS EXHIBIT B - CONFIDENTIAL INFORMATION EXHIBIT C - RUNOFF CLAIM ADMINISTRATION AGREEMENT - 9 - 10
Exhibit "A" - CODE MATERIALS ---------------------------- Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- - ----------------------------------------------------------------------------------------------------------------- BFBFR006 PRTF IA - Output file/Outstanding Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR009 PRTF Flex Billing - Outstanding Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR016 PRTF wutput file for Aged Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR01A PRTF IA - Output file for Aged Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR01B PRTF Output file for Aged Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR01C PRTF Output file for Aged Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR01D PRTF Output file for Aged Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR021 PRTF IA- Payment Plan / Install Fee Report PRTF Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR030 PRTF Flex Billing - Waived Cash Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR301 PRTF Flex Billing - Collections Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR350 PRTF Flex Billing - Collections Activity Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFR621 PRTF Flex Billing - Daily Activity Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS000 DSPF FB - Main On Line Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS020 DSPF Flex Billing Ctrl - Pay Plans Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS025 DSPF Flex Billing Ctrl - Equity Options Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS035 DSPF Flex Billing Ctrl - Billing Notices Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS045 DSPF Flex Billing Ctrl - Notice Transaction Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS055 DSPF Flex Billing Ctl - Notice Type Maintenance Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS060 DSPF Flex Billing Ctrl - System File Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS065 DSPF Flex Billing Ctrl - Fees Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS080 DSPF Flex Billing Ctrl - Equity Options Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS100 DSPF DB - Maintenance screens Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS115 DSPF Flex Billing Ctrl - Billing Methods Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS150 DSPF Flex Billing Ctrl - Transaction Fees Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBFS250 DSPF Flex Billing Ctrl - Bill to Record Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB004 RPGLE Cash payment processing Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB005 RPGLE NSF on Flex Bill Policy Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB006 RPGLE DB - Waive application and reversal Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB007 RPGLE CALCULATE Installment amounts Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB008 RPGLE Process Endorsement for Billing Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB009 SQLRPGLE process endorsement for billing sql select Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB010 RPGLE FB - Billing Cycle Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB011 RPGLE CALCULATE RATES, downpayments and billing days Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB012 RPGLE Calculate equity at New Business time Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB013 RPGLE Cash payment processing Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB015 RPGLE Calculate Equity and write Billing record Flex Billing - -----------------------------------------------------------------------------------------------------------------
Page 1 11
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- - ----------------------------------------------------------------------------------------------------------------- BFBPB017 RPGLE FB Installment Detail Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB018 RPGLE Flex Bill - Waive application and reversal Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB020 RPGLE Rewrite offer program Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB021 RPGLE FB - Balance Due Notice Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB030 RPGLE Create Transaction History for Rewrite Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB128 RPGLE Credit Card declined Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPB141 RPGLE Get Fees for Premium Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPC002 CLP DB - CL Driver For Direct Bill BDBPB002 Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPC004 CLP DB - Driver for DB BDBPB004-Payments/Release Cash Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPC011 CLP DB - CL Driver For Direct Bill BFBPB010 Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPC013 CLP NB - Driver for NB BFBPB013- NB Batch Processing Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR006 RPGLE IA/FB - FLEXBILL Outstanding Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR009 RPGLE Flex Billing - Outstanding Receivables Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR010 RPGLE IA/FB - Pending Overpayment Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR016 RPGLE IA/FB - Aged Receivables Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR021 RPGLE DB - Payment Plan / Installment Fee Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR025 RPGLE IA/FB - Cash Receipt/NSF Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR030 RPGLE Flex Billing - Waived Cash Report Program Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR301 SQLRPGLE Flex Billing - Collections Receivable Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR350 RPGLE Flex Billing - Collections Activity Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPR621 RPGLE Flex Billing - Daily Activity Report Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS000 RPGLE Flex Billing Inquity Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS020 RPGLE Flex Billing Ctl - Pay Plans Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS025 RPGLE Flex Billing Ctrl - Equity Options Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS035 RPGLE Flex Billing Ctl - Bill Notices Maintenance Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS045 RPGLE Flex Billing Ctl - Equity Options Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS055 RPGLE Flex Billing Ctrl - Notice Type Maintenance Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS060 RPGLE Flex Billing Ctl - System Control File Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS065 RPGLE Flex Billing Ctrl - Fees Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS080 RPGLE Flex Billing Ctrl - Equity Options Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS100 RPGLE Flex Billing Ctrl - Billing Methods Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS115 RPGLE Flex Billing Ctl - Equity Options Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS150 RPGLE Flex Billing Ctl - Transaction Fees Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPS250 RPGLE Flex Billing Ctl - Bill to Records Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPSIVR RPGLE Stored procedure for IVR Flex Billing - ----------------------------------------------------------------------------------------------------------------- BFBPW025 RPGLE Endorsement Quote Inquiry Flex Billing - ----------------------------------------------------------------------------------------------------------------- CALCAGE RPGLE Calculate Age Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 2 12
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- - ----------------------------------------------------------------------------------------------------------------- CHKPHYDMG RPGLE Check for Physical damage eligibility Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDITA_GT_B RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDITGOTDED RPGLE Edit deductible exists on I40FLR20 record Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDITGOTLMT RPGLE Edit limit exists on I40FLR20 record Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDITVEHAGE RPGLE Edit limit vehicle age greater than 25 Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTABARTE RPGLE Edit ABA Routing Number Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTBNKACT RPGLE Edit Bank Account Number Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTBUSSTA RPGLE Edit Business State Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTCHKNBR RPGLE Edit Check Number Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTCRDEXP RPGLE Edit Credit Card Expiration Date Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTCRDNBR RPGLE Edit Credit Card Number Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTCRDTYP RPGLE Edit Credit Card Type Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTDWNPAY RPGLE Edit Down Payment Amount Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTMMB_MMB RPGLE Edit make/model/bstyl from vin valid. = item recrd Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTOLDVEHS RPGLE Edit for any vehicles older than 25 years old Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTPHONE# RPGLE Edit a Phone Number Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTPHYSDAM RPGLE Determine Eligibility for Physical Damage Coverage Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTVEHSYM RPGLE Edit Vehicle Symbol < 23 Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTVIN10 RPGLE Edit for VIN length >= 10 Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTVIN17 RPGLE Edit for VIN length = 17 Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTVINMAK RPGLE Edit VIN and/or Make,Model are present Instant Rater - ----------------------------------------------------------------------------------------------------------------- EDTZIPCDE RPGLE Edit Zip Code Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CEIAI RPGLE Instant Rater General Panel Critical Errors Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005A RPGLE Retrieve Make when Vin# <> *Blanks Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005B RPGLE Retrieve Model when Vin# <> *Blanks Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005C RPGLE Retrieve Performance Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005D RPGLE Retrieve Body Style Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005E RPGLE Retrieve AntiLock Brakes Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005F RPGLE Retrieve Airbag Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005G RPGLE Retrieve Daytime Lights Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005H RPGLE Retrieve Performance Description. Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005I RPGLE Retrieve Vehicle Symbol Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005J RPGLE Retrieve Anti-Lock Description. Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005K RPGLE Retrieve Airbag Description. Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005L RPGLE Retrieve Daytime Lights Description. Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005M RPGLE Retrieve Anti-Theft Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI005N RPGLE Retrieve Anti-Theft Description Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 3 13
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- - ----------------------------------------------------------------------------------------------------------------- I40CI005P RPGLE Retrieve Physical Damage Flag Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007 RPGLE Load WGZIP2 for file I40FPR07 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007A RPGLE Load WGZIP3 for file I40FPR07 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007B RPGLE Load WGZIP4 for file I40FPR07 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007C RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007D RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007E RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007F RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007G RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007H RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007I RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI007J RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011A RPGLE Load CODE1 Addr to AADDR1of I40FL011 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011B RPGLE Load CODE1 city to ACITY of I40FL011 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011C RPGLE Load CODE1 state to ASTATof I40FL011 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011D RPGLE Load CODE1 zip to AZIP of I40FL011 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011E RPGLE Default ANAME of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011F RPGLE Default ADDR1 of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011G RPGLE Default ADDR2 of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011H RPGLE Default ACITY of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011I RPGLE Default ASTATE of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011J RPGLE Default AZIP of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011K RPGLE Default APNAME of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011L RPGLE Default APHONE of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011M RPGLE Default APOLST of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011N RPGLE Default APOLNO of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011O RPGLE Default APOLCD of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011P RPGLE Default APOLOC of I40FL011 from B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI011Q RPGLE Condition driver training based on driver's age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI013A RPGLE Condition driver training based on driver's age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI018A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020A RPGLE Calculate WOCCOV1 value limit code Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020B RPGLE Calculate WPRCOV1 value limit code Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020C RPGLE Calculate WOCCOV2 value from WOCCOV1 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020D RPGLE Calculate WOCCOV3 value from WOCCOV1 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020E RPGLE Calculate WOCCOV4 value from WOCCOV1 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020F RPGLE Calculate WPRCOV2 value from WOCCOV1 Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 4 14
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- I40CI020G RPGLE Calculate WPRCOV3 value from WOCCOV1 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI020H RPGLE Calculate WPRCOV3 value from WOCCOV1 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI031A RPGLE Initialize CTYPE to 'O' Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CI031B RPGLE Insert Screen ID into CDESC Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA005 RPGLE Panel IR05 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA007 RPGLE Panel IR07 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA008 RPGLE Panel IR08 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA018 RPGLE IR18 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA019 RPGLE Panel IR19 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA020 RPGLE Panel IR20 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA021 RPGLE Panel IR21 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA022 RPGLE Panel IR22 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA023 RPGLE Panel IR23 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA024 RPGLE Panel IR24 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DA031 RPGLE Panel IR31 - Display Attribute Manager Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL005 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL013 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL019 DSPF Template DDS for List Panels (Screen IR19) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL020 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL025 DSPF Instant Rater - List Panel IR25 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL027 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DL510 DSPF Auto System Rating Summary Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DLR04 DSPF Instant Rater - Search Screen Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DR007 RPGLE Database relationship driver - I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DR020 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DR021O RPGLE Format I40OPRDS Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DROO01 RPGLE Instant Auto-Objection Overcome Driver - Pnl 07 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DROO02 RPGLE Instant Auto-Objection Overcome Driver - Pnl 15 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DROO03 RPGLE Instant Auto-Objection Overcome Driver - Pnl 19 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DROO04 RPGLE Instant Auto-Objection Overcome Driver - Pnl 25 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DROO05 RPGLE Instant Auto-Objection Overcome Driver - Pnl 05 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DRR07A RPGLE IR07 - Database Relationship Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DRR08A RPGLE IR08 - Database Relationship Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DRR15A RPGLE IR15 - Database Relationship Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DRR18A RPGLE IR18 - Database Relationship Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DRR19A RPGLE IR19 - Database Relationship Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS005 DSPF No Description Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 5 15
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- I40DS007 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS008 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS009 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS010 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS011 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS012 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS013 DSPF Additional Driver - Flat Panel Template (IR13) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS015 DSPF Instant Rater Coverage1 Flat Panel Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS016 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS017 DSPF IR17 - Flat panel Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS018 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS021 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS022 DSPF Instant Auto - Panel IR22 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS023 DSPF Instant Auto - Panel IR23 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS024 DSPF Panel IR24 Flat Panel Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS028 DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS031 DSPF Template DDS for Flat Panels Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40DS16A DSPF No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED005C RPGLE Low Level Pgm - Edit for Cost New Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED007 RPGLE Low level program for Code 1 processing Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED008A RPGLE Low Level Pgm - Edit for Driver Age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED008B RPGLE Low Level Pgm - Edit for Social Security # Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED008C RPGLE Low Level Pgm - Edit for Driver Age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED010A RPGLE Edit for Impair. = 'Y' and Doctor's Letter = 'N' Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED010B RPGLE Edit for Impair. = 'Y' and Doctor's Letter = 'N' Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED011 RPGLE Condition driver's course based on driver's Age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED011Q RPGLE Condition driver's course based on driver's Age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ED017 RPGLE Edit limits for IR17 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EDUMC RPGLE IAI-Question response for UM/UIM BI Signed-CO Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EDUMR RPGLE IAI-Question response for UM/UIM BI Rejection Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EDUMS RPGLE IAI-Question response for UM/UIM BI Signed AZ Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI005A RPGLE EI- Edit for Vin Number Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI005B RPGLE EI- Edit ISO Symbol Not greater than 22 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI005C RPGLE EI- Edit Cost New Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI005D RPGLE EI- Edit Year Make Model for Symbol Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI005E RPGLE EI- Edit for Year + Vin#/Make,Model present Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI005F RPGLE EI- Edit for Vin and/or Make,Model present Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 6 16
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- I40EI007A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007B RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007C RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007D RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007E RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007F RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007G RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007H RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI007I RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI008A RPGLE EI- Edit for Drivers Age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI008C RPGLE EI- Edit for Drivers Spouse Age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI010A RPGLE EI- Edit Impairm = "Y" and doctor's letter = "N" Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI013B RPGLE EI- Edit Impairm = "Y" and doctor's letter = "N" Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI017A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI017B RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020A RPGLE EI- Edit coverage elligibility based on veh 1 age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020B RPGLE EI- Edit coverage elligibility based on veh 2 age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020C RPGLE EI- Edit coverage elligibility based on veh 3 age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020D RPGLE EI- Edit coverage elligibility based on veh 4 age Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020E RPGLE EI - Edit MP and mutually exclusive covs existing Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020F RPGLE EI - Edit UIM/BI Limits > BI Limits Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020G RPGLE EI - Edit UIM/PD Limits > PD Limits Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020H RPGLE EI - Edit UMPD dependent on UMBI Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020I1 RPGLE EI - RVEH w/o COMP/COLL for item 1 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020I2 RPGLE EI - RVEH w/o COMP/COLL for item 2 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020I3 RPGLE EI - RVEH w/o COMP/COLL for item 3 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020I4 RPGLE EI - RVEH w/o COMP/COLL for item 4 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020J1 RPGLE EI- COLL w/o COMP item Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020J2 RPGLE EI- COLL w/o COMP item Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020J3 RPGLE EI- COLL w/o COMP item Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EI020J4 RPGLE EI- COLL w/o COMP item Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EV022 RPGLE Event Driver Panel IR23 - Post Credit Card Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EV023 RPGLE Event Driver Panel IR23 - Post Credit Card Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVBREAK RPGLE Force exit of repeated Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVNAV RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVNAV2 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVNAV20 RPGLE No Description Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 7 17
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- I40EVNAVCC RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVNAVCK RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVPOLST RPGLE update LDBRNC, LDSLOB, LDPOLS from garaging state Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR07 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR09 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR10 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR13 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR15 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR16 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVR16A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40EVSETNV RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FK021 RPGLE IR21 - function key formatter Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FK02801 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FK03101 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FKNAV01 RPGLE Flat panel function key formatter-fixed fmt/no txt Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FKNAV02 RPGLE Flat panel function key formatter-fixed fmt/no txt Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FKNAV03 RPGLE Flat panel function key formatter-fixed fmt/no txt Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FKNAV11 RPGLE Flat panel function key formatter-fixed fmt/no txt Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40FKR09 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40II011 RPGLE Input Module for I40FL011 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40II021 RPGLE II Module - for B40FL021 File (IR21) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40II02B RPGLE Instant Rater: Birth Date Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40II02N RPGLE Instant Rater: OLNAME, OFNAME Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR05 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR07 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR08 RPGLE Full-function DB File Input Module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR09 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR10 RPGLE IR10- Flat Panel II module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR1001 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR15 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR16A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR17 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR18 RPGLE IR18- Flat Panel II module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR19 RPGLE Full-function DB File Input Module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR20 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IIR27 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IO011 RPGLE I/O Module For I40FL011 Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 8 18
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- -------------------- I40IOA16 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR05 RPGLE I40FLR05 I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR05A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR07 RPGLE I40FLR07 I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR07A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR08 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR08A RPGLE DB File I/O module - Use if you don't have recd Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR08A2 RPGLE DB File I/O module - Use if you don't have recd Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR09 RPGLE I40FLR09 I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR09A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR10 RPGLE I40FLR10 I/O Module - Used for IR13 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR10A RPGLE I40FLR10 I/O Module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR10A2 RPGLE I40FLR10 I/O Module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR11 RPGLE I40FLR10 I/O Module - Used for IR11 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR12 RPGLE I40FLR10 I/O Module - Used for IR12 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR15 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR15A RPGLE I40FLR15 I/O Module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR16 RPGLE I40IOR16 I/O Module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR16A RPGLE I40FLR16A I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR16A1 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR17A RPGLE I40FLR17 I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR18A RPGLE I40FLR18 I/O module Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR19A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR20 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40IOR27A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40KER05 RPGLE Edit allowability to add more vehicles Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LK00501 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LK02001 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LKNAV01 RPGLE List Panel function key formatter-fixed fmt/no txt Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LKR04 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LO005 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LO025 RPGLE List panel option formatter - Panel IR25 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40LOR04 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND005 RPGLE Set data entry-related non-display attributes Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND007 RPGLE Set data entry-related non-display attributes Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND011 RPGLE Set data entry-related non-display attributes Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND012 RPGLE Set data entry-related non-display attributes Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 9 19
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I40ND016 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND020 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND021O RPGLE IR21 - Non-display attributes - Operators Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND021V RPGLE IR21 - Non-display attributes - Vehicles Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40ND16A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40OER05 RPGLE Do not allow user to delete only vehicle Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PL005 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PL013 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PL019 RPGLE List Panel template for Screen I40DS021 (IR19) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PL020 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PL025 RPGLE List Panel template for Screen I40DS025 (IR25) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PL510 RPGLE Auto System Rating Summary - List Panel Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PLR04 RPGLE Instant Rater: Search Screen Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS005 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS007 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS008 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS009 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS010 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS011 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS012 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS015 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS016 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS016A RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS017 RPGLE IR17 - Flat Panel Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS018 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS019 RPGLE Policy Fee Retrieval Program (For History Update) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS021 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS022 RPGLE IR22- Flat Panel Screen Program Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS022 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS023 RPGLE IR23- Flat Panel Screen Program Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS023 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS024 RPGLE Flat Panel template Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS024 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS028 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS028 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS031 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40PS031 RPGLE No Description Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 10 20
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I40PSR13 RPGLE IR- Flat Panel for Screen IR13 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB005 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB005 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB007 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB007 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB016AB RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB019 RPGLE IAI Sub Process - Call Payments screen (IR19) Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB020 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB022 RPGLE Instant Auto - Sub Process Module for Panel IR22 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB023 RPGLE Instant Auto - Sub Process Module for Panel IR22 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB025 RPGLE IAI Sub Proc-Call Appt Locs IR25 then Mk App Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB027 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SB031 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SBR04 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40SBR04 RPGLE No Description Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR05LA RPGLE Translate R05 to Item file B99FL080 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR05LB RPGLE Translate R05 to Vehicle file B40FL500 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR07FA RPGLE Translate R07 to Client file B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR07FB RPGLE Translate R07 to Property file B99FL021 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR07XA RPGLE Translate R07 to Item file B99FL080 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR08FA RPGLE Translate R08 to Operator file B40FL021 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR08FB RPGLE Translate R08 to Client file B99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR09LA RPGLE Translate R09 to Violations file B40FL031 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR10FB RPGLE Translate R10 to BAS Master file B40FL001 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR10FC RPGLE Translate R10 to Client Ext. file I99FL010 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR10LA RPGLE Translate R10 to Operator file B40FL021 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR10XA RPGLE Translate R10 to Vehicle file B99FL080 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR15XA RPGLE Translate R15 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR15XB RPGLE Translate R15 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR15XC RPGLE Translate R15 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR15XD RPGLE Translate R15 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR16LA RPGLE Translate R16 to Preexist Damage file B40FL311 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR16XA RPGLE Translate R16 to Additional Insured file B99FL031 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR16XB RPGLE Translate R16 to Lienholder file B99FL140 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR17ZA RPGLE Translate R17 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR17ZB RPGLE Translate R17 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR17ZC RPGLE Translate R17 to Coverage file B99FL071 Instant Rater - -----------------------------------------------------------------------------------------------------------------
Page 11 21
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- - ----------------------------------------------------------------------------------------------------------------- I40XTR17ZD RPGLE Translate R17 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR18XA RPGLE Translate R18 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR18XB RPGLE Translate R18 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR18XB RPGLE Translate R18 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20DA RPGLE Translate R20 to Coverage file B99FL071 Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20DA RPGLE Translate R20 to Coverage file B99FL071 Driver Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XA RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XA RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XB RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XB RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XC RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XC RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XD RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XD RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XE RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XE RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XF RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XF RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XG RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XH RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XI RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40XTR20XJ RPGLE Translate R20 to Coverage file B99FL071 Instant Rater - ----------------------------------------------------------------------------------------------------------------- I99II073 RPGLE Input Module - Coverages, Omit PD Records Instant Rater - ----------------------------------------------------------------------------------------------------------------- I99IO102 RPGLE I/O Module - Fee Transaction File Instant Rater - ----------------------------------------------------------------------------------------------------------------- I40CIPN CLP IAI - Texas MVR/CLUE Uprate Letter Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FR025 PRTF IA - Forms Mailing Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FR620 PRTF Instant Auto MVR history report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS000 DSPF BAS Policy Register File Processing Display Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS160 DSPF Coverage Rating Module File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS340 DSPF (In/Out)bound Call Reason File Maintenance Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS350 DSPF (In/Out)bound Call Outcome File Maintenance Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS380 DSPF Endorsement Reason Window Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS400 DSPF Base Rate Control File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS410 DSPF Driver Class Rating File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS420 DSPF Zip/Territory Rating File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS430 DSPF Vehicle Symbol/Age Rate File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40FS440 DSPF Miles to Work Rate/Age of Vehicle Rate Policy Administration - -----------------------------------------------------------------------------------------------------------------
Page 12 22
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- - ----------------------------------------------------------------------------------------------------------------- I40FS450 DSPF IAI Point Factor File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB600 RPGLE IAI Automatic Issuance (MVR Triggers AI #1) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB632 RPGLE Batch Processing of RI / RG to Policy Form (5) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB635 RPGLE IAI RI / RG Trigger Batch Program (1 for RI/RG) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB637 RPGLE IAI Auto Issuance forms detector batch program Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB638 RPGLE IAI B99FL060 Policy Activity File Update (3) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB640 RPGLE IAI update the policy register with cancel date Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PB660 RPGLE IAI POPULATE PRIMARY RATING ZIP FILE I40FP540 Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PBCAP RPGLE cvt lower/uppercase and remove . clnt and opr Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PBCMT RPGLE IAI - Program to commit records after Re-Write Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PBMKD RPGLE IAI - Market Analysis Report by Market Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PC610 CLP CLP - IA - CL for VIN Validation Request Letter Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCAPN CLP IA - CLP Additional Premium Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCATC CLP CLP - Generic Policy Attachments - IAI Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCDTX CLP CLP - Instant Auto Program DEC Prt Program Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCJ42 CLP CLP - Policy Jacket - IAI Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCMKD CLP IAI - Daily Market Report by Market Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCNDE CLP IA CLP - Named Driver Exclusion Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCPIP CLP CLP- IA-VIN Validation Request Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCUMP CLP CLP - Intent To Rej/Lmt Unins Motor Protection Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PCVIN CLP CLP - IA- CL for VIN Validation Request letter Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PRNUM RPGLE iai list of available policy numbers Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS019 RPGLE Policy Fee Retrieval Program (For History Update) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS160 RPGLE Coverage Rating Module File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS340 RPGLE (In/Out)bound Call Reason File Maintenance Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS350 RPGLE (In/Out)bound Call Outcome File Maintenance Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS370 RPGLE IAI Phone Call Processor File Maintenace Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS380 RPGLE Endorsement Reasons Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS400 RPGLE Base Rate Control File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS410 RPGLE Driver Class Rating File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS420 RPGLE Zip/Territory Rating File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS430 RPGLE Vehicle Symbol/Age Rating File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS440 RPGLE Miles to Work/Age of Vehicle Rate File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PS450 RPGLE IAI Point Factor File Policy Administration - ----------------------------------------------------------------------------------------------------------------- I40PW260 RPGLE IAI - Window pgm for "Confirmation of Proof" Policy Administration - -----------------------------------------------------------------------------------------------------------------
Page 13 23
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I40PW370 RPGLE IAI Window for Phone Call History Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FR640 PRTF IA - Policies with BAS3033 messages report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRHRD PRTF IA - Hierarchy Daily Activity Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRINBDA PRTF IAI Balance Due Notice (IN-Agent) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRINBDC PRTF IAI Balance Due Notice (IN-Company) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRINBDI PRTF IAI Balance Due Notice (IN-Insured) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRU10 PRTF IA - 10 DAY-Underwriter Review Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRU18 PRTF IA - 18 DAY-Underwriter Review Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRU28 PRTF IA - 28 DAY-Underwriter Review Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FRX30 PRTF IA - 30 DAY Cancellation Listing Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FS020 DSPF Client Search Screen For Instant Auto Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99FS060 DSPF Display for policy history screen Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PB640 RPGLE IA - Policies with missing images Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PBCLR RPGLE Remove any unwanted policy Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PBDLDP RPGLE Producer-Agent application Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PC300 CLP Nightly Cancellation/Check Writer Processor Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PC640 CLP IAI - Missing Images Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PC860 CLP IA - CLP To Handle Retreive Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCCONOC CLP IAI - Cancellation Confirmation - Lender Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCCONON CLP IAI - Notice of Nonrenewal (Colorado) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCCONSF CLP IAI - Insufficient Funds Notice (Colorado) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCCOPDC CLP IAI - Premium Due/Cancellation Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCCX2 CLP IA - Cancellation List report-Cxl in 2 days Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCDCC CLP IAI - Declined Credit Card Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCDLDX CLP Shutdown instant auto data queue Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCFLT CLP IAI - Cancellation Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCHRD CLP IA - Daily Hierarchy Activity Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINBDN CLP IAI - Balance Due Notice ((Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINCCN CLP IAI - Cancellation Confirmation (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINCIR CLP IAI - Cancellation Confirmation - (IN-Insured) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINCNL CLP IAI - Cancellation Confirmation - (IN-Lender) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINDCC CLP IAI - Declined Credit Card Notice (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINFLT CLP IAI - Cancellation Notice (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINNON CLP IAI - Notice of Nonrenewal (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINPCN CLP IAI - Premium Pay/Cancel Notice (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCINPDC CLP IAI - Premium Due/Cancel Notice (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCLET CLP Automatic Letters Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNIF CLP IAI - Insufficent Funds Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMBDN CLP IAI - Balance Due Notice (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMCBN CLP IAI - Premium Pay/Cancel Notice (New Mexico-Combo) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMCCN CLP IAI - Cancellation Confirmation (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMCIR CLP IAI - Cancellation Confirmation - Insured (NM) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMCNL CLP IAI - Cancellation Confirmation -(NM) Lender Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMDCC CLP IAI - Declined Credit Card Notice (New Mexico) Policy Administration - -----------------------------------------------------------------------------------------------------------------
Page 14 24
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99PCNMFLT CLP IAI - Cancellation Notice New Mexico Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMLET CLP Automatic Letters Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMNIF CLP IAI - Insufficent Funds Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMNON CLP IAI - Notice of Nonrenewal (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMPCN CLP IAI - Premium Pay/Cancel Notice (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNMPDC CLP IAI - Premium Due/Cancel Notice (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCNON CLP IAI - Notice of Nonrenewal Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCPCN CLP IAI - Premium Pay/Cancel Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCPDC CLP IAI - Premium Due/Cancel Notice Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCRIN CLP Notice Of Reinstatement Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCU10 CLP IA - 10 Day-Underwriter Review Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCU18 CLP IA - 18 Day Underwriter Review Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCU28 CLP IA - 28 Day Underwriter Review Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PCX30 CLP IA - 30 day Cancellation List/rewrite report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PR640 RPGLE IAI - Missing Images Report (BAS 3033) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRAZBDN RPGLE Balance Due Notice Form (AZ) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRAZCBN RPGLE Premium Pay/Cancel Notice Form (AZ-Combo) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRAZCIR RPGLE Cancel Confirmation-Insured Request (AZ) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRAZNON RPGLE Notice of Nonrenewal Form (Arizona) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRBDN RPGLE IAI - Balance Due Notice Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCCN RPGLE IAI - Cancellation Confirmation/Rewrite Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCIR RPGLE IAI - Cancellation Confirmation - Insured Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCNL RPGLE IAI - Cancellation Confirmation - Lender Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCOBDN RPGLE IAI - Balance Due Notice Form (CO) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCOCBN RPGLE IA- Premium Pay/Cancel Notice Form(Colorado Combo) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCOCIR RPGLE IA-Cancellation Confirmation-Insrd Rqst(Colorado) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCOCNL RPGLE IAI - Colorado Cancellation Confrmtn - Lender form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCOCXR RPGLE IA-Cancellation Confirmation/Rewrite Frm(Colorado) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCODCC RPGLE IAI - Decl Credit Card Notice-CO Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCONOC RPGLE IAI - Cancellation Confirmation - Lender Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCONON RPGLE IAI - Notice of Nonrenewal Form (Colorado) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCONSF RPGLE IAI - Insufficient Funds Notice Form (Colorado) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCOPDC RPGLE IAI - Colorado Premium Due/Cancel Notice Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRCX2 RPGLE IA - Cancellation List Report-Cxl in 2 days Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRDCC RPGLE IAI - Declined Credit Card Notice Form Policy Administration - -----------------------------------------------------------------------------------------------------------------
Page 15 25
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99PRFLT RPGLE IAI - TX Notice of Cancellation Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRHRD RPGLE IAI - Daily Hierarchy Report Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRINBDN RPGLE IAI - Balance Due Notice Form (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRINCIR RPGLE IAI - Cancellation Confirmation -Insured Form(IN) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRINDCC RPGLE IAI - Declined Credit Card Notice Form (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRINNIF RPGLE IAI - Insufficient Funds Notice Form (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRINNON RPGLE IAI - Notice of Nonrenewal Form (Indiana) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRLET RPGLE IA - Automated Correspondence Letters Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNIF RPGLE Insufficient Funds Notice Form (Texas) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMBDN RPGLE Balance Due Notice Form (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMCBN RPGLE Premium Pay/Cancel Notice (New Mexico-Combo) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMCCN RPGLE Cancellation Confirmation/Rewrite Form (NM) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMCIR RPGLE Cancellation Confirmation-Insured Form(NM) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMDCC RPGLE Declined Credit Card Notice Form (NM) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMFLT RPGLE Notice of Cancellation (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMLET RPGLE Automated Correspondence Letters(New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMNON RPGLE IAI - Notice of Nonrenewal Form (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNMPCN RPGLE IAI - Premium Pay/Cancel Notice Form (New Mexico) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRNON RPGLE IAI - Notice of Nonrenewal Form Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRPCN RPGLE IAI - Premium Pay/Cancel Notice Form (Texas) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRPDC RPGLE IAI - Premium Due/Cancel Notice Form (Texas) Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRRIN RPGLE Form - Notice of Reinstatement Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PRX30 RPGLE IA - CXL report >30 days & pymt Rec'd Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS020 RPGLE Policy Search By Screen Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02A RPGLE Policy Search By Policy Number Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02B RPGLE Policy Search By Policy Number Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02C RPGLE Policy Search By Name Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02D RPGLE Policy Search By Address Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02E RPGLE Policy Search Garaging Address Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02F RPGLE Policy Search By Work Phone Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02G RPGLE Policy Search By Home Phone Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02H RPGLE Policy Search By Drivers License Number Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02I RPGLE Policy Search By VIN Number Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02J RPGLE Policy Search By Operator Number Policy Administration - ----------------------------------------------------------------------------------------------------------------- I99PS02K RPGLE Policy Search By Excluded Driver Policy Administration - -----------------------------------------------------------------------------------------------------------------
Page 16 26
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I40FRANA PRTF IA - Addl Premium Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRANC PRTF IA - Addl Premium Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRANI PRTF IA - Addl Premium Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRANL PRTF IA - Addl Premium Notice (Lender) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRANM PRTF IA - Addl Premium Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRANP PRTF IA - Addl Premium Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRANX PRTF IA - Addl Prem Notice (Addl Insured) ' Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRAPC PRTF IAI - Application (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRAPI PRTF IAI - Application (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRAPM PRTF IAI - Application (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCA PRTF IAI - Declaration / Attachments - (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCC PRTF IAI - Declaration / Attachments - (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCI PRTF IAI - Declaration / Attachments - (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCL PRTF IAI - Declaration / Attachments - (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCM PRTF IAI - Declaration / Attachments - (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCP PRTF IAI - Declaration / Attachments - (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDCX PRTF IAI - Declaration / Attachments - (Addl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDTI PRTF IAI TX DEC / Attachments - Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDTL PRTF IAI TX DEC / Attachments - Lender Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDTM PRTF IAI TX DEC / Attachments - Microfilm Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRDTX PRTF IAI TX DEC / Attachments - Additional Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRFAC PRTF IAI - Follow-up Application (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRFAI PRTF IAI - Follow-up Application (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRFAM PRTF IAI - Follow-up Application (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRFLC PRTF IAI - Follow-up Cover Letter (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRFLI PRTF IAI - Follow-up Cover Letter (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRFLM PRTF IAI - Follow-up Cover Letter (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRLTC PRTF IAI - Application Cover Letter (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRLTI PRTF IAI - Application Cover Letter (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRLTM PRTF IAI - Application Cover Letter (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRNDA PRTF IA - Named Driver Exclusion (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRNDC PRTF IA - Named Driver Exclusion (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRNDI PRTF IA - Named Driver Exclusion (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRNDL PRTF IA - Named Driver Exclusion (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRNDM PRTF IA - Named Driver Exclusion (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 17 27
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I40FRNDP PRTF IA - Named Driver Exclusion (Prem Fin) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRNDX PRTF IA - Named Driver Exclusion (Addl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPIA PRTF IA - PIP Deductible (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPIC PRTF IA - PIP Deductible (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPII PRTF IA - PIP Deductible (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPIL PRTF IA - PIP Deductible (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPIM PRTF IA - PIP Deductible (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPIP PRTF IA - PIP Deductible (Premium Finance) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRPIX PRTF IA - PIP Deductible (Additional Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUMA PRTF Intent To Rej/Lmt Unins. Motor Prot (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUMC PRTF Intent To Rej/Lmt Unins. Motor Prot (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUMI PRTF Intent To Rej/Lmt Unins. Motor Prot (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUML PRTF Intent To Rej/Lmt Unins. Motor Prot (Leinholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUMM PRTF Intent To Rej/Lmt Unins. Motor Prot (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUMP PRTF Intent To Rej/Lmt Unins. Motor Prot (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRUMX PRTF Intent To Rej/Lmt Unins. Motor Prot (Add Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVIA PRTF IA - VIN Validation Request (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVIC PRTF IA - VIN Validation Request (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVII PRTF IA - VIN Validation Request (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVIL PRTF IA - VIN Validation Request (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVIM PRTF IA - VIN Validation Request (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVIP PRTF IA - VIN Validation Request (Premium Finance) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40FRVIX PRTF IA - VIN Validation Request (Additional Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRAPN RPGLE IA-Form Increased Premium Notice Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRAPP RPGLE IAI - Application Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRATC RPGLE IAI TX - Generic Policy Attachments Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRDTX RPGLE IAI TX - Auto Declarations / Attachments Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRFAP RPGLE IAI - Follow-up Application Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRFLT RPGLE IAI - Follow-up Cover Letter Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRJ42 RPGLE IAI TX - Policy Jacket Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRLET RPGLE IAI - Application Cover Letter Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRNDE RPGLE IA Form - Named Driver Exclusion Letter Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRPIP RPGLE IA Form - PIP Deductible Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRUMP RPGLE Form - Intent To Rej/Lmt Unins Motor Prot Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40PRVIN RPGLE IA - Form- VIN Validation Request Letter Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 18 28
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRAZBDA PRTF IAI - Balance Due Notice (Agent)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZBDC PRTF IAI - Balance Due Notice (Cmpny)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZBDI PRTF IAI - Balance Due Notice (Insrd)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZBDL PRTF IAI - Balance Due Notice (Lien)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZBDM PRTF IAI - Balance Due Notice (Micro)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZBDP PRTF IAI - Balance Due Notice (PFC)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZBDX PRTF IAI - Balance Due Notice (ADLINS)-AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCIA PRTF IAI - Cancel Conf-Ins Req (AZ-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCIC PRTF IAI - Cancel Conf-Ins Req (AZ cmpny) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCII PRTF IAI - Cancel Conf-Ins Req (AZ Insrd) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCIL PRTF IAI - Cancel Conf-Ins Req (AZ Lien) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCIM PRTF IAI - Cancel Conf-Ins Req (AZ Micro) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCIP PRTF IAI - Cancel Conf-Ins Req (AZ PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCIX PRTF IAI - Cancel Conf-Ins Req (AZ Adlins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNA PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNC PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNI PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNL PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Lnhlder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNM PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Mcroflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNP PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCNX PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Adl Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXA PRTF IA-Cancel Conf/Rewrite Offer (AZ-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXC PRTF IA-Cancel Conf/Rewrite Offer (AZ-Cmpny) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXI PRTF IA-Cancel Conf/Rewrite Offer (AZ-Insrd) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXL PRTF IA-Cancel Conf/Rewrite Offer (AZ-Lien) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXM PRTF IA-Cancel Conf/Rewrite Offer (AZ-Micro) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXP PRTF IA-Cancel Conf/Rewrite Offer (AZ-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZCXX PRTF IA-Cancel Conf/Rewrite Offer (AZ-Adlin) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZDCA PRTF No Description Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZDCC PRTF No Description Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZDCI PRTF No Description Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZDCL PRTF No Description Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZDCM PRTF IAI - CANCEL/NON PAYMENT (DECL CRDT CRD) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNCA PRTF IAI - Cancellation Conf-AZ (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNCC PRTF IAI - Cancellation Conf-AZ (Cmpny) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 19 29
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRAZNCI PRTF IAI - Cancellation Conf-AZ (Insrd) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNCL PRTF IAI - Cancellation Conf-AZ (Lien) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNCM PRTF IAI - Cancellation Conf-AZ (Micro) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNCP PRTF IAI - Cancellation Conf-AZ (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNCX PRTF IAI - Cancellation Conf-AZ (Adlins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOA PRTF IAI - Arizona - Nonrenewal Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOC PRTF IAI - Arizona - Nonrenewal Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOI PRTF IAI - Arizona - Nonrenewal Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOL PRTF IAI - Arizona - Nonrenewal Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOM PRTF IAI - Arizona - Nonrenewal Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOP PRTF IAI - Arizona - Nonrenewal Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNOX PRTF IAI - Arizona - Nonrenewal Notice (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSA PRTF IAI - Cxl Notice-NSF AZ (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSC PRTF IAI - Cancel Notice-NSF AZ (Cmpny) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSI PRTF IAI - Cancel Notice NSF-AZ (Insrd) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSL PRTF IAI - Cancel Notice NSF-AZ (Lien) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSM PRTF IAI - Cancel Notice NSF AZ (Micro) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSP PRTF IAI - Cancel Notice NSF AZ (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRAZNSX PRTF IAI - Cancel notice NSF AZ (Adlin) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDA PRTF IAI - Balance Due Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDC PRTF IAI - Balance Due Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDI PRTF IAI - Balance Due Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDL PRTF IAI - Balance Due Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDM PRTF IAI - Balance Due Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDP PRTF IAI - Balance Due Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRBDX PRTF IAI - Balance Due Notice (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCA PRTF IAI - Cancel Confirm/Rewrite Notice (TX-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCC PRTF IAI - Cancel Confirm/Rewrite Notice (TX-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCI PRTF IAI - Cancel Confirm/Rewrite Notice (TX-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCL PRTF IAI - Cancel Confirm/Rewrite Notice (TX-Lienhlder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCM PRTF IAI - Cancel Confirm/Rewrite Notice (TX-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCP PRTF IAI - Cancel Confirm/Rewrite Notice (TX-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCCX PRTF IAI - Cancel Confirm/Rewrite Notice (TX-Adtl Ins.) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCIA PRTF IAI - Cancellation Conf-Insured (TX-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCIC PRTF IAI - Cancellation Conf-Insured (TX-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 20 30
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRCII PRTF IAI - Cancellation Conf-Insured (TX-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCIL PRTF IAI - Cancellation Conf-Insured (TX-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCIM PRTF IAI - Cancellation Conf-Insured (TX-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCIP PRTF IAI - Cancellation Conf-Insured (TX-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCIX PRTF IAI - Cancellation Conf-Insured (TX-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNA PRTF IAI - Cancellation Conf-Lender (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNC PRTF IAI - Cancellation Conf-Lender (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNI PRTF IAI - Cancellation Conf-Lender (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNL PRTF IAI - Cancellation Conf-Lender (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNM PRTF IAI - Cancellation Conf-Lender (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNP PRTF IAI - Cancellation Conf-Lender (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCNX PRTF IAI - Cancellation Conf-Lender (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDA PRTF IAI - Balance Due Notice (Agent) - CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDC PRTF IAI - Balance Due Notice (Company)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDI PRTF IAI - Balance Due Notice (Insured)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDL PRTF IAI - Balance Due Notice (Lien)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDM PRTF IAI - Balance Due Notice (Micro)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDP PRTF IAI - Balance Due Notice (PFC)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOBDX PRTF IAI - Balance Due Notice (ADLINS)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCA PRTF IAI - Colorado Cancellation Conf-Lender (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCC PRTF IAI - Colorado Cancellation Conf-Lender (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCI PRTF IAI - Colorado Cancellation Conf-Lender (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCL PRTF IAI - Colorado Cancellation Conf-Lender (Lienhold) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCM PRTF IAI - Colorado Cancellation Conf-Lender (Microflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCP PRTF IAI - Colorado Cancellation Conf-Lender (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCCX PRTF IAI - Colorado Cancellation Conf-Lender (Adtl Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCIA PRTF IAI - Cancellation Conf-Insured (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCIC PRTF IAI - Cancellation Conf-Insured (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCII PRTF IAI - Cancellation Conf-Insured (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCIL PRTF Cancellation Conf-Insured (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCIM PRTF Cancellation Conf-Insured (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCIP PRTF Cancellation Conf-Insured (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCIX PRTF Cancellation Conf-Insured (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCNA PRTF Premium Pay/Cancel Notice (Colorado-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCNC PRTF Premium Pay/Cancel Notice (Colorado-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 21 31
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRCOCNI PRTF Premium Pay/Cancel Notice (Colorado-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCNL PRTF Premium Pay/Cancel Notice (Colorado-Lienhld) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCNM PRTF IAI- Premium Pay/Cancel Notic (Colorado-Microflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCNP PRTF IAI - Premium Pay/Cancel Notice (Colorado-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCNX PRTF IAI- Premium Pay/Cancel Notice (Colorado-Adl Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXA PRTF IA-Cancel Confirm/Rewrite Notice (Colorado-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXC PRTF IA-Cancel Confirm/Rewrite Notice(Colorado-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXI PRTF IA-Cancel Confirm/Rewrite Notice(Colorado-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXL PRTF IA-Cancel Confirm/Rewrite Notice(Colorado-Lien..) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXM PRTF IA-Cancel Confirm/Rewrite Notice(Colorado-Micro..) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXP PRTF IA-Cancel Confirm/Rewrite Notice (Colorado-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOCXX PRTF IA-Cancel Confirm/Rewrite Notice(Colorado-Adt Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCA PRTF IAI - Decl Credit Card Notice (Agent)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCC PRTF IAI - Decl Credit Card Notice (CMPNY)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCI PRTF IAI - Decl Credit Card Notice (INSRD)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCL PRTF IAI - Decl Credit Card Notice (Lien)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCM PRTF IAI - Decl Credit Card Notice (Micro)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCP PRTF IAI - Decl Credit Card Notice (PFC)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCODCX PRTF IAI - Decl Credit Card Notice (ADLINS)-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNA PRTF IAI - Colorado - Nonrenewal Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNC PRTF IAI - Colorado - Nonrenewal Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNI PRTF IAI - Colorado - Nonrenewal Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNL PRTF IAI - Colorado - Nonrenewal Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNM PRTF IAI - Colorado - Nonrenewal Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNP PRTF IAI - Colorado - Nonrenewal Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONNX PRTF IAI - Colorado - Nonrenewal Notice (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOA PRTF IAI - Cancellation Conf-Colorado (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOC PRTF IAI - Cancellation Conf-Colorado (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOI PRTF IAI - Cancellation Conf-Colorado (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOL PRTF IAI - Cancellation Conf-Colorado (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOM PRTF IAI - Cancellation Conf-Colorado (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOP PRTF IAI - Cancellation Conf-Colorado (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONOX PRTF IAI - Cancellation Conf-Colorado (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONSA PRTF IAI - Insufficient Funds Notice (Colorado-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONSC PRTF IAI - Insufficient Funds Notice (Colorado-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 22 32
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRCONSI PRTF IAI - Insufficient Funds Notice (Colorado-Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONSL PRTF IAI - Insufficient Funds Notice (Colorado-Lnhldr) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONSM PRTF IAI - Insufficient Funds Notice (Colorado-Mcrflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONSP PRTF IAI - Insufficient Funds Notice (Colorado-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCONSX PRTF IAI - Insufficient Funds Notice (Colorado-Adt Ins Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDA PRTF IAI - Colorado Premium Due/Cancel Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDC PRTF IAI - Premium Due/Cancel Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDI PRTF IAI - Premium Due/Cancel Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDL PRTF IAI - Premium Due/Cancel Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDM PRTF IAI - Premium Due/Cancel Notice (Microflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDP PRTF IAI - Premium Due/Cancel Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCOPDX PRTF IAI - Premium Due/Cancel Notice (Adtl Insd) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRCX2 PRTF IA - Cxl within 2 days for non-pay Report Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCA PRTF IAI - Declined Credit Card Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCC PRTF IAI - Declined Credit Card Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCI PRTF IAI - Declined Credit Card Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCL PRTF IAI - Declined Credit Card Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCM PRTF IAI - Declined Credit Card Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCP PRTF IAI - Declined Credit Card Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRDCX PRTF IAI - Declined Credit Card Notice (Addtl Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLA PRTF IAI - Cancellation Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLC PRTF IAI - Cancellation Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLI PRTF IAI - Cancellation Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLL PRTF IAI - Cancellation Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLM PRTF IAI - Cancellation Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLP PRTF IAI - Cancellation Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRFLX PRTF IAI - Cancellation Notice (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINBDL PRTF IAI - Balance Due Notice (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINBDM PRTF IAI - Balance Due Notice (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINBDP PRTF IAI - Balance Due Notice (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINBDX PRTF IAI - Balance Due Notice (IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINCIA PRTF IAI - Cancellation Conf-Insured (IN-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINCIC PRTF IAI - Cancellation Conf-Insured (IN-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINCII PRTF IAI - Cancellation Conf-Insured (IN-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINCIL PRTF IAI - Cancellation Conf-Insured (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 23 33
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRINCIM PRTF IAI - Cancellation Conf-Insured (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINCIP PRTF IAI - Cancellation Conf-Insured (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINCIX PRTF IAI - Cancellation Conf-Insured (IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCA PRTF IAI - Declined Credit Card Notice (IN-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCC PRTF IAI - Declined Credit Card Notice (IN-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCI PRTF IAI - Declined Credit Card Notice (IN-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCL PRTF IAI - Declined Credit Card Notice (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCM PRTF IAI - Declined Credit Card Notice (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCP PRTF IAI - Declined Credit Card Notice (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINDCX PRTF IAI-Declined Credit Card Notice(IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLA PRTF IAI - Cancellation Notice (IN-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLC PRTF IAI - Cancellation Notice (IN-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLI PRTF IAI - Cancellation Notice (IN_Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLL PRTF IAI - Cancellation Notice (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLM PRTF IAI - Cancellation Notice (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLP PRTF IAI - Cancellation Notice (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINFLX PRTF IAI - Cancellation Notice (IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNIA PRTF IAI - Insufficient Funds Notice (IN-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNIC PRTF IAI - Insufficient Funds Notice (IN-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNII PRTF IAI - Insufficient Funds Notice (IN-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNIL PRTF IAI - Insufficient Funds Notice (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNIM PRTF IAI - Insufficient Funds Notice (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNIP PRTF IAI - Insufficient Funds Notice (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNIX PRTF IAI - Insufficient Funds Notice (IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOA PRTF IAI - Nonrenewal Notice (IN-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOC PRTF IAI - Nonrenewal Notice (IN_Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOI PRTF IAI - Nonrenewal Notice (IN-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOL PRTF IAI - Nonrenewal Notice (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOM PRTF IAI - Nonrenewal Notice (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOP PRTF IAI - Nonrenewal Notice (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINNOX PRTF IAI - Nonrenewal Notice (IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPCA PRTF IAI - D742Premium Pay/Cancel Notice (IN-Combo-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPCC PRTF IAI - Premium Pay/Cancel Notice (IN-Combo-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPCI PRTF IAI - Premium Pay/Cancel Notice (IN-Combo-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPCL PRTF IAI - Premium Pay/Cancel Notice (IN-Combo-Lnhlder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 24 34
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRINPCM PRTF IAI - Premium Pay/Cancel Notice (IN-Combo-Mcroflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPCP PRTF IAI - Premium Pay/Cancel Notice (IN-Combo-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPCX PRTF IAI - Premium Pay/Cancel Notice (IN-Combo-Adl Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDA PRTF IAI - Premium Due/Cancel Notice (IN-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDC PRTF IAI - Premium Due/Cancel Notice (IN-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDI PRTF IAI - Premium Due/Cancel Notice (IN-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDL PRTF IAI - Premium Due/Cancel Notice (IN-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDM PRTF IAI - Premium Due/Cancel Notice (IN-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDP PRTF IAI - Premium Due/Cancel Notice (IN-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRINPDX PRTF IAI - Premium Due/Cancel Notice (IN-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTA PRTF IA - Automated Letters - Agent Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTC PRTF IA - Automated Letters - Company Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTI PRTF IA - Automated Letters - Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTL PRTF IA - Automated Letters - Lender Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTM PRTF IA - Automated Letters - Microfilm Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTP PRTF IA - Automated Letters - Premium Financial Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRLTX PRTF IA - Automated Letters - Additional Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNIA PRTF IAI - Insufficient Funds Notice (TX-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNIC PRTF IAI - Insufficient Funds Notice (TX-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNII PRTF IAI - Insufficient Funds Notice (TX-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNIL PRTF IAI - Insufficient Funds Notice (TX-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNIM PRTF IAI - Insufficient Funds Notice (TX-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNIP PRTF IAI - Insufficient Funds Notice (TX-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNIX PRTF IAI - Insufficient Funds Notice (TX-Addtl Insure Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDA PRTF IAI Balance Due Notice (NM - Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDC PRTF IAI Balance Due Notice (NM - Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDI PRTF IAI Balance Due Notice (NM - Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDL PRTF IAI Balance Due Notice (NM - Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDM PRTF IAI Balance Due Notice (NM - Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDP PRTF IAI Balance Due Notice (NM - PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMBDX PRTF IAI Balance Due Notice (NM - Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCCA PRTF IAI Cancel Confirm/'Rewrite Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCCC PRTF IAI Cancel Confirm/'Rewrite Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCCI PRTF IAI Cancel Confirm/'Rewrite Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCCL PRTF IAI Cancel Confirm/'Rewrite Notice (TX- Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 25 35
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRNMCCM PRTF IAI Cancel Confirm/'Rewrite Notice (TX-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCCP PRTF IAI Cancel Confirm/'Rewrite Notice (TX - PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCCX PRTF IAI Cancel Confirm/'Rewrite Notice (TX - Adtl Ins.) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCIA PRTF IAI Cancel Confirm/'Rewrite Notice (TX - Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCIC PRTF IAI - Cancellation Conf-Insured (TX-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCII PRTF IAI - Cancellation Conf-Insured (TX-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCIL PRTF IAI - Cancellation Conf-Insured (TX-Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCIM PRTF IAI - Cancellation Conf-Insured (TX-Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCIP PRTF IAI - Cancellation Conf-Insured (TX-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCIX PRTF IAI - Cancellation Conf-Insured (TX-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNA PRTF IAI - Premium Pay/Cancel Notice (New Mxco-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNC PRTF IAI - Premium Pay/Cancel Notice (New Mxco-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNI PRTF IAI - Premium Pay/Cancel Notice (New Mxco-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNL PRTF IAI - Premium Pay/Cancel Notice (New Mxco-Lienhld) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNM PRTF IAI - Premium Pay/Cancel Notice (New Mxco-Mcrflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNP PRTF IAI - Premium Pay/Cancel Notice (New Mxco-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMCNX PRTF IAI - Premium Pay/Cancel Notice (New Mxco-Adl Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCA PRTF IAI - Declined Credit Card Notice (Agent) (NM) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCC PRTF IAI - Declined Credit Card Notice (Company) (NM) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCI PRTF IAI - Declined Credit Card Notice (Insured) (NM) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCL PRTF IAI - Declined Credit Card Notice (Lienholder)(NM) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCM PRTF IAI - Declined Credit Card Notice (Microfilm)(NM) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCP PRTF IAI - Declined Credit Card Notice (PFC) (NM) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMDCX PRTF IAI -Declined Credit Card Notice (Addtl Insured) NM Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLA PRTF IAI - Cancellation Notice (NM - Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLC PRTF IAI - Cancellation Notice (NM - Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLI PRTF IAI - Cancellation Notice (NM - Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLL PRTF IAI - Cancellation Notice (NM - Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLM PRTF IAI - Cancellation Notice (NM - Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLP PRTF IAI - Cancellation Notice (NM - PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMFLX PRTF IAI - Cancellation Notice (NM - Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNNA PRTF IAI - Nonrenewal Notice (NM - Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNNC PRTF IAI - Nonrenewal Notice (NM - Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNNI PRTF IAI - Nonrenewal Notice (NM - Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNNL PRTF IAI - Nonrenewal Notice (NM - Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 26 36
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRNMNNM PRTF IAI - Nonrenewal Notice (NM - Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNNP PRTF IAI - Nonrenewal Notice (NM - PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNNX PRTF IAI - Nonrenewal Notice (NM - Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSA PRTF IAI - Insufficient Funds Notice (New Mxco-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSC PRTF IAI - Insufficient Funds Notice (New Mxco-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSI PRTF IAI - Insufficient Funds Notice (New Mxco-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSL PRTF IAI - Insufficient Funds Notice (New Mxco-Lnhldr) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSM PRTF IAI - Insufficient Funds Notice (New Mxco-Mcrflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSP PRTF IAI - Insufficient Funds Notice (New Mxco-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMNSX PRTF IAI - Insufficient Funds Notice (New Mxco-Adt Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCA PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCC PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCI PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCL PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-Lnhlder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCM PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-Mcroflm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCP PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPCX PRTF IAI - Premium Pay/Cancel Notice (NM-Combo-Adl Ins) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDA PRTF IAI - Premium Due/Cancel Notice (NM - Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDC PRTF IAI - Premium Due/Cancel Notice (NM - Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDI PRTF IAI - Premium Due/Cancel Notice (NM - Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDL PRTF IAI - Premium Due/Cancel Notice (NM - Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDM PRTF IAI - Premium Due/Cancel Notice (NM - Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDP PRTF IAI - Premium Due/Cancel Notice (NM - PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNMPDX PRTF IAI - Premium Due/Cancel Notice(NM-Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOA PRTF IAI - Nonrenewal Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOC PRTF IAI - Nonrenewal Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOI PRTF IAI - Nonrenewal Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOL PRTF IAI - Nonrenewal Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOM PRTF IAI - Nonrenewal Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOP PRTF IAI - Nonrenewal Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRNOX PRTF IAI - Nonrenewal Notice (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPCA PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPCC PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Compan Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPCI PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Insure Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPCL PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Lnhlde Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 27 37
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FRPCM PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Mcrof Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPCP PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPCX PRTF IAI - Premium Pay/Cancel Notice (TX-Combo-Adl I Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDA PRTF IAI - Premium Due/Cancel Notice (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDC PRTF IAI - Premium Due/Cancel Notice (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDI PRTF IAI - Premium Due/Cancel Notice (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDL PRTF IAI - Premium Due/Cancel Notice (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDM PRTF IAI - Premium Due/Cancel Notice (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDP PRTF IAI - Premium Due/Cancel Notice (PFC) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRPDX PRTF IAI - Premium Due/Cancel Notice (Addtl Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNA PRTF Notice of Reinstatement (Agent) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNC PRTF Notice of Reinstatement (Company) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNI PRTF Notice of Reinstatement (Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNL PRTF Notice of Reinstatement (Lienholder) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNM PRTF Notice of Reinstatement (Microfilm) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNP PRTF Notice of Reinstatement (Premium Finance) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99FRRNX PRTF Notice of Reinstatement (Additional Insured) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCATC CLP CLP - Generic Policy Attachments - No Data fmt Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZBDN CLP Balance Due Notice (AZ) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZCBN CLP Premium Pay/Cancel Notice (AZ) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZCIR CLP Cancel Conf-Ins Req (AZ) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZCXR CLP Cancel Conf/Rewrite Offer (AZ) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZDCC CLP Declined Credit Card Notice (Arizona) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZNOC CLP Cancellation Confirmation (AZ) Lender Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZNON CLP Notice of Non Renewal (Arizona) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCAZNSF CLP Cancel notice NSF AZ Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCBDN CLP Balance Due Notice Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCCN CLP Cancellation Confirmation Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCIR CLP Cancellation Confirmation - Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCNL CLP Cancellation Confirmation - Lender Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCOBDN CLP Balance Due Notice (CO) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCOCBN CLP Premium Pay/Cancel Notice (Colorado) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCOCIR CLP Cancellation Confirmation - Insured Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCOCNL CLP Colorado Cancellation Confirmation - Lender Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I99PCCOCXR CLP Cancellation Confirmation (Colorado) Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------
Page 28 38
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99PCCODCC CLP Declined Credit Card Notice-CO Policy Administration; Forms - ------------------------------------------------------------------------------------------------------------------------ I40DL510 DSPF Auto System Rating Summary Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DL511 DSPF Auto System Rating Detail Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DL511W DSPF DSPF - IAI Fees Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR401A RPGLE DB Relationship Driver - Base Rate Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR411 RPGLE DB Relationship Driver - Driver Class Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR411A RPGLE DB Relationship Driver - Driver Class Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR421A RPGLE DB Relationship Driver - Territory Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR431A RPGLE DBR Driver - Vehicle Symbol/Age Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR441A RPGLE IAI Disc/Sur Driver - MTW/VA Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40DR451A RPGLE DBR Driver - Driver Points Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40FD102 RPGLE IAI Fee Driver Program Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40II021 RPGLE Input Module - IAI Highest Rated Operators Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40II161 RPGLE Input Module - IAI Algorithm Control File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40II162 RPGLE Input Module - IAI Algorithm Control File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40II511 RPGLE Input Module - Rating Detail Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40II511W RPGLE Input Module - Fee Records Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40IO021 RPGLE I/O module - Operator File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40IO081 RPGLE I/O module - Vehicle File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40IO500A RPGLE DB File I/O module - For B40FP500 file Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40IO511 RPGLE I/O Module - Rating Detail File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40IO512 RPGLE I/O Module - Rating Detail File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40LK500 RPGLE Auto Rating Function Key Fomatter - List Panel Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40LK510 RPGLE Auto Rating Function Key Fomatter - List Panel Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40LK511W RPGLE Window function key formatter - Fees Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40PL510 RPGLE System Rating Summary - List Panel Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40PL511 RPGLE System Rating Detail - List Panel Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40PL511W RPGLE Panel Window - Fees Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40RD500 RPGLE IAI Highest to Highest Rating Driver Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40RD510 RPGLE IAI Rating Algorithm Driver Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99DL102W DSPF Template DDS for List Panel windows Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99DR073 RPGLE Database relationship driver - I/O Module Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99DR080 RPGLE Database relationship driver - I/O Module Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99II073 RPGLE Input Module - Coverages, Omit PD Records Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99II073A RPGLE Inp Mod - Cov - Omit PD,PI,PS,DL Recs - Screen Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------
Page 29 39
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99II081 RPGLE Input Module - IAI Highest Rated Vehicles Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99II081A RPGLE Input Module - IAI Rating Algorithm Vehicles Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99IO102 RPGLE I/O Module - Fee Transaction File Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99LK102W RPGLE Window List Panel function key formatter Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I99PL102W RPGLE List Panel Window template Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ ICFDR271A RPGLE DBR Driver - Coverage Deductible Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ ICFDR421A RPGLE DBR Driver - Coverage Limit Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ ICFDR443A RPGLE IAI Disc/Sur Driver - Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ ICFDR451A RPGLE DBR Driver - Term Factor Policy Administration; Rating - ------------------------------------------------------------------------------------------------------------------------ I40XIRTE RPGLE Auto-External rating interface Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XL020 RPGLE Auto-External Operator list Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XL030 RPGLE Auto-External Violations List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XL180 RPGLE Auto-Violations Description List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XL300 RPGLE Auto-External Filing Fee List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XS000 PF Auto-External Auto system master (Questions) Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XS020 PF Auto-External operator panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XS030 PF Auto-External Violations panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XS180 PF Auto-External Violations description list Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XS300 PF Auto-External Filing fee panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XSRTE PF Auto-External Rating Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XU000 RPGLE External Interface-Questions Record Level Update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XU020 RPGLE External interface-Record level update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XU030 RPGLE External interface-Violations Record level update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40XU300 RPGLE External interface-Filing fees Record level update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I98PB100DL RPGLE Pending Cash file download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I98PB130DL RPGLE Credit Card/ACH File Download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I98PB200DL RPGLE Pending Cash DETAIL FILE DOWNLOAD Web Rater - ------------------------------------------------------------------------------------------------------------------------ I98XICRD RPGLE Generate new quote or copy exisiting quto next seq Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99ED010C1 RPGLE Code 1 edit for B99FP010 client file Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99ED020C1 RPGLE Code 1 edit for B99FP020 Garaging address Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FL010 LF I99FP010 - Client No,RCDST,INSFR,EMPST,IMPAR,YRCUR Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FL040 LF I99FP040 - Co,Br,Prdct,Slob,Pol# (4-part),rcd sts Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FL042 LF I99FP040 - Full Policy No (4-part) Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FL04W LF I99FP040 - Web User,Co,Br,Prdct,Slob,Pol# (4-part) Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FL080 LF I99FP080 - Policy Number, Item Number, Sts = ' 'U Web Rater - ------------------------------------------------------------------------------------------------------------------------
Page 30 40
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- --------------------- I99FL081 LF I99FP080 - Comp/Branch/Policy Number/Item Number Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FL082 LF I99FP080 - Comp/Branch/prod/slob Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FP010 PF Client File- Extention of B99FP010 Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FP040 PF Policy Register File- Extention of B99FP040 Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99FP080 PF System Item File Extention of B40FP080 Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB010DL RPGLE Client file Download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB010DM RPGLE Client Extention file Download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB020DL RPGLE Property File Download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB030DL RPGLE Additionai Insured file download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB040DL RPGLE Policy register file Download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB040DM RPGLE Policy register extension file Download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB070DL RPGLE Coverage file download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB080DL RPGLE Vehicle Item file download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB100DL RPGLE Policy Fees file download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB130DL RPGLE LEINHOLDER FILE DOWNLOAD Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PB750DL RPGLE Question file download Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99PCINZIA CLP IAI-Instant auto Web rater initialization Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XIPCK RPGLE Global-Load Coverage package defaults Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XL030 RPGLE Auto-External Additional Insured List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XL040 RPGLE Auto-External Policy Register List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XL070 RPGLE Auto-External Coverage List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XL080 RPGLE Auto-External Vehicle List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XL140 RPGLE Auto-External Lien Holder List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XL260 RPGLE Auto-External Discounts List Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS010 PF Global-External Client panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS020 PF Global-External Garaging address Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS030 PF Global-External Additional Insured panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS040 PF Global-External Policy Register Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS070 PF Global-External Coverage panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS080 PF Auto-External vehicle panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS140 PF Global External Lienholder Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XS260 PF Global-External Discount panel Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XSDLD PF Global-Policy download structure for data que Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XSPCK PF Global External coverage package load Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XSPOL PF Global-External Generate Policy Web Rater - ------------------------------------------------------------------------------------------------------------------------
Page 31 41
Name Type Size Description Project - ------------ ---------- ---- ------------------------------------------------- ---------------------------- I99XSQTE PF Global-External Generate Quote Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU010 RPGLE Global-External client record level update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU020 RPGLE External Interface-Garaging Address Record LvlUpd Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU030 RPGLE External Interface-Additional Insured Record LvlUp Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU040 RPGLE External Interface-Policy Reg. Record LvlUpd Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU070 RPGLE External Interface-Coverage Record Level Update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU080 RPGLE External Interface-Violations Record level update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I99XU140 RPGLE External interface-Lien holder Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICDPB000 RPGLE IAI - Get Next Availible Quote Number Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICDPB010 RPGLE IAI - Get Next Availible Policy Number Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICDXL400 RPGLE Auto-Marital status Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICDXL410 RPGLE Auto-Employment Status Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICDXL420 RPGLE Auto-Phone Type Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICDXL460 RPGLE Credit Card Type Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL010 RPGLE Global-State code list Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL110 RPGLE Coverage Descriptions List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL120 RPGLE Coverage Deductibles List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL140 RPGLE Coverage Limits List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL560 RPGLE Coverage Package List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL600 RPGLE Auto-Occupation Description List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL610 RPGLE Auto-Relationship List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL620 RPGLE Auto-License Status List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ICFXL830 RPGLE Auto-Prior Insurance List Web Rater - ------------------------------------------------------------------------------------------------------------------------ ISCXI110 RPGLE External Interface-Security update Web Rater - ------------------------------------------------------------------------------------------------------------------------ I40PB000DL RPGLE Bas Master file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I40PB020DL RPGLE operator file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I40PB030DL RPGLE Policy Violations file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I40PB300DL RPGLE policy filling fee download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I40PB310DL RPGLE pre existing damage file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I40PB500DL RPGLE Vehile file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I99PB140DL RPGLE Lienholder file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I99PB150DL RPGLE Policy cross reference down Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I99PB260DL RPGLE Discount file download Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------ I99PBDLQ RPGLE IA_ Send Policy to dataque Web Rater; Download - ------------------------------------------------------------------------------------------------------------------------
Page 32 42 - ------------------------------------------------------------------------------- EXHIBIT "B" CONFIDENTIAL INFORMATION - ------------------------------------------------------------------------------- HARDCOPY ITEMS
- ------------------------------------------------------------------------------------------------------------- DOCUMENT DESCRIPTION NUMBER OF COPIES - ------------------------------------------------------------------------------------------------------------- Colorado forms proof changes; Dated 9/14/00 From Kathy Biggs 1 - ------------------------------------------------------------------------------------------------------------- Colorado Motorists Insurance Information Letter and regulatory 1 Database (MIIDB) information for the state of Colorado - ------------------------------------------------------------------------------------------------------------- DT37511 Instant Rater Project Definition and Business 3 Requirements - ------------------------------------------------------------------------------------------------------------- DT37512 Flex Billing Business Requirements 2 - ------------------------------------------------------------------------------------------------------------- DT37515 Texas Rollout Business Requirements 3 - ------------------------------------------------------------------------------------------------------------- DT37516 Colorado Rollout Business Requirements 3 - ------------------------------------------------------------------------------------------------------------- DT37517 Arizona Rollout Business Requirements 4 - ------------------------------------------------------------------------------------------------------------- DT37518 New Mexico Rollout Business Requirements 4 - ------------------------------------------------------------------------------------------------------------- DT37519 Indiana Rollout Business Requirements 4 - ------------------------------------------------------------------------------------------------------------- DT37547 Tiered Rating Project Definition and Business 1 Requirements - ------------------------------------------------------------------------------------------------------------- Faxed copy of Colorado Application and From Lisa Burdine, sample of 1 registration; Dated 5/19/00 incoming documents to be imaged - ------------------------------------------------------------------------------------------------------------- Faxed copy of Colorado Dec Pages; Dated From Lisa Burdine 1 8/28/00 - ------------------------------------------------------------------------------------------------------------- Faxed copy of Texas Application; Dated 2/7/00 From Derik Pomaville 1 - ------------------------------------------------------------------------------------------------------------- Implementation change requests Folder of signed change requests 1 from the project - ------------------------------------------------------------------------------------------------------------- Indiana forms portfolio changes; Dated 9/14/00 From Kathy Biggs 1 - ------------------------------------------------------------------------------------------------------------- New Mexico forms proof changes; dated 9/20/00 From Kathy Biggs 1 - ------------------------------------------------------------------------------------------------------------- Program Guide Arizona Underwriting Manual, Forms, and 4 Rates - ------------------------------------------------------------------------------------------------------------- Program Guide Colorado Underwriting Manual, Forms, and 4 Rates - ------------------------------------------------------------------------------------------------------------- Program Guide Indiana Underwriting Manual, Forms, and 3 Rates - ------------------------------------------------------------------------------------------------------------- Program Guide New Mexico Underwriting Manual, Forms, and 4 Rates - ------------------------------------------------------------------------------------------------------------- Program Guide Texas Underwriting Manual, Forms, and 3 Rates - ------------------------------------------------------------------------------------------------------------- The eCoverage Report Document produced by Instant Auto 2 - -------------------------------------------------------------------------------------------------------------
43 ELECTRONIC COPY ITEMS
- ------------------------------------------------------------------------------------------------------------- DOCUMENT DESCRIPTION TYPE - ------------------------------------------------------------------------------------------------------------- ACE Updated.xls Ace locations provided by IA Excel Document - ------------------------------------------------------------------------------------------------------------- Appd G TX Rules.doc Tiered rate underwriting rules Word Document changes - ------------------------------------------------------------------------------------------------------------- Appd H CO Rules.doc Tiered rate underwriting rules Word Document changes - ------------------------------------------------------------------------------------------------------------- Appd I AZ Rules.doc Tiered rate underwriting rules Word Document changes - ------------------------------------------------------------------------------------------------------------- Appd J NM Rules.doc Tiered rate underwriting rules Word Document changes - ------------------------------------------------------------------------------------------------------------- Appd J NM Rules.doc Tiered rate underwriting rules Word Document changes - ------------------------------------------------------------------------------------------------------------- Arizona DBR V1.0.doc DBR Created by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Arizona Knockouts 041800.txt Policy rejection information Text File - ------------------------------------------------------------------------------------------------------------- Arizona Market Code 5-25-00.xls Market Codes Excel Document - ------------------------------------------------------------------------------------------------------------- AZ reporting.pdf State of Arizona reporting Acrobat Reader requirements File - ------------------------------------------------------------------------------------------------------------- AZ Timely Payments.doc and AZ Timely Summary of Arizona state Word Document Payments V2.doc laws in Word Documents regard to policy payments - ------------------------------------------------------------------------------------------------------------- AZ_IAI Rating Tiered.xls Tiered rate tables Excel Document - ------------------------------------------------------------------------------------------------------------- Az_IAI(oldRates).xls Arizona non-tiered rates Excel Document - ------------------------------------------------------------------------------------------------------------- CO Coverage Table Clare.doc Colorado coverage codes and cause Word Document of loss codes - ------------------------------------------------------------------------------------------------------------- CO Forms Mapping v4.0.xls Field mapping from Zyquest Word Document - ------------------------------------------------------------------------------------------------------------- CO_IAI Rating Tiered.xls Tiered rate tables Excel Document - ------------------------------------------------------------------------------------------------------------- Co_IAI(oldRates).xls Colorado non-tiered rates Excel Document - ------------------------------------------------------------------------------------------------------------- Colorado Knockouts 041800.txt Policy rejection information Text File - ------------------------------------------------------------------------------------------------------------- colorado market code 5-25-00.xls Market Codes Excel Document - ------------------------------------------------------------------------------------------------------------- Combined ROC V2.xls Tiered rate order calculation Excel Document - -------------------------------------------------------------------------------------------------------------
2 44
- ------------------------------------------------------------------------------------------------------------- DOCUMENT DESCRIPTION TYPE - ------------------------------------------------------------------------------------------------------------- Current SQLStatements.txt SQL statements from Zyquest Text Document - ------------------------------------------------------------------------------------------------------------- Customer Service Call Codes.xls Codes for incoming and outgoing Word Document phone calls and outcomes - ------------------------------------------------------------------------------------------------------------- CWRater2000_IMSG.xls Excel rating engine Excel Document - ------------------------------------------------------------------------------------------------------------- Data Fields Setup - Tx 113098.xls Instant Rater field mapping and Excel Document rules - ------------------------------------------------------------------------------------------------------------- Dec Changes - Time918.zip Tiered program changes Winzip file - ------------------------------------------------------------------------------------------------------------- Detailed Business Requirements V1.0 - Instant DBR developed by IMS Word Document Rater.doc - ------------------------------------------------------------------------------------------------------------- Detailed Business Requirements V1.0 - POS.doc DBR developed by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Detailed Business Requirements V1.0- Global DBR developed by IMS Word Document Enhancements.doc - ------------------------------------------------------------------------------------------------------------- Detailed Business Requirements V1.0- Texas.doc DBR created by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Detailed Business Requirements V1.1 - Colorado.doc DBR created by IMS Word Document - ------------------------------------------------------------------------------------------------------------- driver averaging.xls, driver averaging v2.xls, Driver averaging rules Excel Documents driver averaging v3.xls - ------------------------------------------------------------------------------------------------------------- DT37514 Detailed Business Requirements V1.0 - DBR developed by IMS Word Document Transition.doc - ------------------------------------------------------------------------------------------------------------- DT37514 Project Definition V1.0 - IAI Transistion.doc Project Definition developed by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Endorsements v1.0.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- Equity Billing Training.ppt Equity billing presentation Power Point - ------------------------------------------------------------------------------------------------------------- Presentation Extract.dot Amis extract layouts Word Document - ------------------------------------------------------------------------------------------------------------- filing memo-forms 08 00.doc Filing memo for forms Word Document - ------------------------------------------------------------------------------------------------------------- Form Changes Rev 1.3.doc, Tier Form Changes Rev List of required form changes for Word Documents 12.doc tiered rating - ------------------------------------------------------------------------------------------------------------- Forms.TIF Forms image file TIF file - ------------------------------------------------------------------------------------------------------------- IAI Cash Flow - Current.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- IAI Cash Flow - Proposed.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- IAI Coverage Code Final version033100.xls Coverage Codes, Cause of Loss Codes Excel Document - ------------------------------------------------------------------------------------------------------------- IAI dot com overview.doc High level web site overview Word Document - ------------------------------------------------------------------------------------------------------------- IAI GP Flow v3.1 6-22-00 Get a policy flowchart Visio Document - -------------------------------------------------------------------------------------------------------------
3 45
- ------------------------------------------------------------------------------------------------------------- DOCUMENT DESCRIPTION TYPE - ------------------------------------------------------------------------------------------------------------- IAI Point Surcharge Business Rules.doc MVR surcharge business roles Word Document - ------------------------------------------------------------------------------------------------------------- IAI POS Network Architecture.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- IAI POS Proposed Data Flow.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- IAI-2000525-02 wo pricing.doc Agreement with Zyquest Word Document - ------------------------------------------------------------------------------------------------------------- IMS IVR Script V1.0.doc Script verbiage for IVR Word Document - ------------------------------------------------------------------------------------------------------------- IMS IVR Workflow V1.0.vsd Workflow for IVR Visio Document - ------------------------------------------------------------------------------------------------------------- IMSG Letters Tiered Version 3.doc Tiered underwriting letters Word Document - ------------------------------------------------------------------------------------------------------------- IMSG Sample Hierarchy Reports.xls and IMSG Sample Sample reports for requirements Excel Document Hierarchy Reports V2.xls - ------------------------------------------------------------------------------------------------------------- IMSG Underwriting Letters 041700.doc Underwriting letters for Word Document requirements - ------------------------------------------------------------------------------------------------------------- IN_IAI Rating Tiered.xls Tiered rate tables Excel Document - ------------------------------------------------------------------------------------------------------------- Indiana Knockouts 041800.txt Policy rejection information Text File - ------------------------------------------------------------------------------------------------------------- instant rater presentation ARIZONA 0825.doc Screen verbiage Word Document - ------------------------------------------------------------------------------------------------------------- instant rater presentation COLORADO 0825.doc Screen verbiage Word Document - ------------------------------------------------------------------------------------------------------------- instant rater presentation INDIANA0825.doc Screen verbiage Word Document - ------------------------------------------------------------------------------------------------------------- instant rater presentation NEW MEXICO 0825.doc Screen verbiage Word Document - ------------------------------------------------------------------------------------------------------------- instant rater presentation TEXAS working.doc Screen verbiage Word Document - ------------------------------------------------------------------------------------------------------------- Instant rater Site map 1.02.vsd Screen flow Visio Document - ------------------------------------------------------------------------------------------------------------- instant rater version 1.08.vsd Screen mockups Visio Document - ------------------------------------------------------------------------------------------------------------- INSTANT REAL ROC AND EXH'S.xls Rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Instantauto dotcom Project Definition.doc Document developed by IA Word Document - ------------------------------------------------------------------------------------------------------------- InstantRaterScreensWorking.vsd Screen mockups Visio Document - ------------------------------------------------------------------------------------------------------------- Interoffice Communication Bank Recon's.doc Memo from Arthur Anderson Word Document - ------------------------------------------------------------------------------------------------------------- ISOTable.doc ISO Symbols Document provided by IA Word Document - ------------------------------------------------------------------------------------------------------------- LEINHOLDERS.xls IA Leinholder List Excel Document - ------------------------------------------------------------------------------------------------------------- Logo Files Company Logo's Bitmap, Tif - -------------------------------------------------------------------------------------------------------------
4 46
- ------------------------------------------------------------------------------------------------------------- DOCUMENT DESCRIPTION TYPE - ------------------------------------------------------------------------------------------------------------- Mapping.doc Amis data warehouse mapping Word Document document - ------------------------------------------------------------------------------------------------------------- Millers Name Chg Notice 05 99.doc Copy of notice to policyholders of Word Document carrier change - ------------------------------------------------------------------------------------------------------------- Multiple form copies in Word Format (AZA Received from Zyques Word Documents - - MA 01 50 04 99.page1.doc through TXI - IA 54222 07 99.doc) - ------------------------------------------------------------------------------------------------------------- Multiple Forms documents for all states Forms Word Documents - ------------------------------------------------------------------------------------------------------------- Multiple tiered rating state filing information Filings Excel and Word Documents - ------------------------------------------------------------------------------------------------------------- New Business v1.0.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- New Mexico DBR V1.0 .doc DBR created by IMS Word Document - ------------------------------------------------------------------------------------------------------------- New Mexico Market Code 5-25-00.xls Market Codes Excel Document - ------------------------------------------------------------------------------------------------------------- NM_IAI Rating Tiered.xls Tiered rate tables Excel Document - ------------------------------------------------------------------------------------------------------------- NM_IAI(oldRates).xls Non-tiered rates for New Mexico Excel Document - ------------------------------------------------------------------------------------------------------------- Numerous Equity Billing Options Files Payment option examples Excel Documents - ------------------------------------------------------------------------------------------------------------- Numerous Equity Billing Testing Matrices Test Matrices 1-4a Excel Documents - ------------------------------------------------------------------------------------------------------------- Numerous versions of Equity Billing Guides Equity billing explanation and Word Document procedures - ------------------------------------------------------------------------------------------------------------- Numerous web rater HTML Html files for screen samples HTML - ------------------------------------------------------------------------------------------------------------- Objection Overcomers Final.doc Requirements detail provided by IA Word Document - ------------------------------------------------------------------------------------------------------------- POS Application Overview.doc Overview of point of sale system Word Document with prior vendor provided by IA - ------------------------------------------------------------------------------------------------------------- POS Camera Logic.doc Enhancement explanation provided Word Document by IA - ------------------------------------------------------------------------------------------------------------- Ppolicy1 new business.xls - ppolicy 1f new business Test rates Excel Documents with SR22.xls - ------------------------------------------------------------------------------------------------------------- Producer List - Security Access.xls Producers and security levels Excel Document - ------------------------------------------------------------------------------------------------------------- Project Definition - POSV1.0.doc Project Definition created by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Project Definition Draft V1.0 - IAI Web Rater.doc Project definition developed by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Project Definition Draft V1.0 - Texas Rollout.doc Project Definition created by IMS Word Document - -------------------------------------------------------------------------------------------------------------
5 47
- ------------------------------------------------------------------------------------------------------------- DOCUMENT DESCRIPTION TYPE - ------------------------------------------------------------------------------------------------------------- Project Definition Tiered Rating V1.doc Project definition created by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Project Definition V1.0 - Instant Rater.doc Project definition developed by IMS Word Document - ------------------------------------------------------------------------------------------------------------- Revised ROC AZ.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC CO.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC for NNO AZ.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC for NNO CO.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC for NNO IN.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC for NNO NM.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC for NNO TX.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC IN.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROC NM.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- Revised ROCTX.xls Tiered rate order calculation Excel Document - ------------------------------------------------------------------------------------------------------------- SVC_DICTIONARY3.doc Standard violation code Word Document descriptions - ------------------------------------------------------------------------------------------------------------- Test1.xls - Test4.xls Test Rates Excel Documents - ------------------------------------------------------------------------------------------------------------- Texas Market Code 5-25-00.xls Market Codes Excel Document - ------------------------------------------------------------------------------------------------------------- TX Base Rates 07-00.xls Base Rates Excel Document - ------------------------------------------------------------------------------------------------------------- TX_IAI Rating Tiered Replaced 8312000.xls Tiered rate tables Excel Document - ------------------------------------------------------------------------------------------------------------- TX_IAI Rating Tiered.xls Tiered rate tables Excel Document - ------------------------------------------------------------------------------------------------------------- Underwriting 1.0.vsd Workflow provided by IA Visio Document - ------------------------------------------------------------------------------------------------------------- ViolatonsCO.xls Colorado Violations Excel Document - -------------------------------------------------------------------------------------------------------------
6 EX-10.84 10 g67403ex10-84.txt COMMITMENT LETTER, DATED APRIL 13, 2001 1 Exhibit 10.84 April 13, 2001 Bankers Insurance Group, Inc. 360 Central Avenue St. Petersburg, Florida 33731 RE: COMMITMENT TO ADVANCE SERVICE FEE PAYMENTS WHEREAS, Insurance Management Solutions, Inc. ("IMS"), a wholly-owned subsidiary of Insurance Management Solutions Group, Inc. ("IMSG"), is currently providing insurance administration services to Bankers Security Insurance Company ("BSIC"), First Community Insurance Company ("FCIC"), and Bankers Insurance Company ("BIC") pursuant to separate insurance administration services agreements (as amended to date, the "Services Agreements") all dated January 1, 1998, between IMS and each of BSIC, FCIC and BIC (collectively, the "Insurance Subsidiaries"); WHEREAS, BIC and FCIC are wholly owned by Bankers Insurance Group, Inc. ("BIG") and BSIC is owned by both BIG and BIC; WHEREAS, the Services Agreements provide that the Insurance Subsidiaries shall advance such funds to IMS as IMS and the Insurance Subsidiaries may mutually agree are reasonable necessary; and WHEREAS, BIG, on behalf of the Insurance Subsidiaries, has agreed to advance up to One Million Five Hundred Thousand Dollars ($1,500,000.00) per month to IMS as prepayment of Service Fees due by the Insurance Subsidiaries under the Services Agreements. NOW, THEREFORE, IMS and BIG hereby agree as follows: I. Commitment to Advance Service Fee Payments: BIG agrees that, effective June 1, 2001, and continuing until December 1, 2002, it shall advance upon demand such funds to IMS as IMS may request, up to a limit of One Million Five Hundred Thousand ($1,500,000.00) per month. Any funds advanced by BIG to IMS under this Letter Agreement shall constitute prepayment of, and be credited towards the Service Fees that will be due IMS for insurance administration services performed by IMS on II. Disclosure: The parties agree not to disclose the terms and conditions of this Letter Agreement to any third party, except (a) as required in the normal conduct of their respective businesses or (b) as required by law or regulation including, without limitation, any federal securities law or regulation. III. Legal Effect: This Letter Agreement shall constitute a definitive and binding agreement by and among the parties hereto. If you are in agreement with the foregoing, please indicate by signing this Letter Agreement in the space set forth below. Sincerely, /s/ David M. Howard ------------------------------------- David M. Howard, President Insurance Management Solutions, Inc. Accepted and agreed to as of this 13th day of April, 2001 IMS: Insurance Management Solutions, Inc. By: David M. Howard ----------------------------- As Its: President/CEO ------------------------- Date: 4/16/01 --------------------------- BIG: Bankers Insurance Group, Inc. By: Edwin Hussemann ----------------------------- As Its: Treasurer ------------------------- Date: 4/16/01 --------------------------- -----END PRIVACY-ENHANCED MESSAGE-----