UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant x

Filed by a Party other than the Registrant  o

Check the appropriate box:

o Preliminary Proxy Statement

o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x Definitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material Pursuant to §240.14a-12

Fortegra Financial Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1	)	Title of each class of securities to which transaction applies:
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	(4	)	Proposed maximum aggregate value of transaction:
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o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1	)	Amount Previously Paid:
	(2	)	Form, Schedule or Registration Statement No.:
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NOTICE OF

2011 ANNUAL MEETING

AND PROXY STATEMENT

Fortegra Financial Corporation

 :                 10151 Deerwood Park Blvd.
Building 100, Suite 330
Jacksonville, FL 32256

April 28, 2011

Dear Stockholder,

You are invited to attend the 2011 Annual Meeting of Stockholders to be held at 9:00 a.m. local time on Tuesday, June 7, 2011, at the Ponte Vedra Inn & Club located at 200 Ponte Vedra Boulevard, Ponte Vedra Beach, Florida 32082.

The 2011 Annual Meeting will include a report on our business operations, discussion and voting on the matters set forth in the accompanying Notice of 2011 Annual Meeting of Stockholders and proxy statement, and discussion and voting on any other business matters properly brought before the meeting.

Whether or not you plan to attend, you can ensure your shares are represented at the meeting by promptly submitting your proxy by completing, signing, dating and returning your proxy card in the enclosed envelope.

Cordially,

Richard S. Kahlbaugh

Chairman of the Board,

President and Chief Executive Officer

NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS

9:00 a.m., June 7, 2011

Ponte Vedra Inn & Club

200 Ponte Vedra Boulevard

Ponte Vedra Beach, Florida 32082

April 28, 2011

To the Stockholders:

NOTICE IS HEREBY GIVEN that Fortegra Financial Corporation's 2011 Annual Meeting of Stockholders will be held at the Ponte Vedra Inn & Club located at 200 Ponte Vedra Boulevard, Ponte Vedra Beach, Florida 32082, on Tuesday, June 7, 2011, at 9:00 a.m. local time, to address all matters that may properly come before the Annual Meeting. In addition to receiving a report on our business operations, stockholders will vote on:

(1) the election of the seven nominees named in this proxy statement as directors for the ensuing year;

(2) an advisory vote on Executive Compensation;

(3) an advisory vote on the frequency of holding an advisory vote on Executive Compensation;

(4) the ratification of the selection of Johnson Lambert & Co. LLP, as our independent registered public accounting firm for 2011; and

(5) such other business as may properly come before the Annual Meeting or any adjournment thereof.

Stockholders of record at the close of business on April 27, 2011 will be entitled to vote at the meeting and any adjournments.

Cordially,

John G. Short

Secretary & General Counsel

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting

to Be Held on June 7, 2011

Fortegra's proxy statement and annual report to stockholders are available at http://investors.fortegra.com

Table of Contents

Proxy Statement	1
Information about the Annual meeting and Proxy Voting	1
Information about communications with Fortegra and our Board of Directors	5
General Counsel	5
Audit Committee	5
*Proposal 1-Election of Directors	6
Corporate Governance	9
Board of Directors and Committees	10
Information Relating to Directors, Director Nominees, Executive Officers and Significant Stockholders	13
Equity Compensation Plans	15
Executive and Director Compensation	15
Report of the Compensation Committee	19
Compensation Committee Interlocks and Insider Participation	32
Certain Relationship and Related Person Transactions	32
Section 16(a) Beneficial Ownership Reporting Compliance	34
Report of the Audit Committee	34
Independent Registered Public Accounting Firm	35
*Proposal 2 - Ratification of Selection of Independent Registered Public Accounting Firm	36
*Proposal 3 - Advisory Vote on Executive Compensation	36
*Proposal 4 - Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation	37

*To be voted on at the meeting

Every stockholder's vote is important. Please complete, sign,

date and return your proxy card.

PROXY STATEMENT

Fortegra Financial Corporation

10151 Deerwood Park Blvd.

Building 100, Suite 330

Jacksonville, FL 32256 

This proxy statement is furnished in connection with the solicitation of proxies by Fortegra Financial Corporation (“we,” “Fortegra” or the “company”) on behalf of the Board of Directors for the 2011 Annual Meeting of Stockholders (the “Annual Meeting”). Distribution to stockholders of this proxy statement and a proxy card is scheduled to begin on or about May 7, 2011.

Your vote is important. Whether or not you plan to attend the Annual Meeting, please take the time to vote your shares as soon as possible. You can ensure that your shares are voted at the meeting by submitting your proxy by completing, signing, dating and returning the enclosed proxy card in the envelope provided. Submitting your proxy by this method will not affect your right to attend the meeting and vote. A stockholder who gives a proxy may revoke it by voting in person at the Annual Meeting, by delivering a subsequent proxy or by notifying John G. Short, Fortegra's General Counsel and Secretary, in writing of such revocation.

INFORMATION ABOUT THE ANNUAL MEETING AND PROXY VOTING

What matters are to be voted on at the Annual Meeting?

Fortegra intends to present the following proposals for stockholder consideration and voting at the Annual Meeting:

(1) the election of the seven nominees named in this proxy statement as directors for the ensuing year;

(2) an advisory vote on Executive Compensation;

(3) an advisory vote on the frequency of holding an advisory vote on Executive Compensation;

(4) the ratification of the selection of Johnson Lambert & Co. LLP, as our independent registered public accounting firm for 2011; and

(5) such other business as may properly come before the Annual Meeting or any adjournment thereof.

What is the Board's recommendation with respect to each proposal?

The Board of Directors recommends that you vote your shares FOR the election of each of the nominees to the Board, FOR the approval, on an advisory basis, of executive compensation, FOR the approval of an advisory vote on executive compensation every THREE years and FOR the ratification of the independent registered public accounting firm.

Will any other matters be presented for a vote at the Annual Meeting?

At this time, we are not aware of any other matters that will be presented for a vote at the Annual Meeting. However, if another matter were to be properly presented, the proxies would use their own judgment in how to vote on that matter.

Who is entitled to vote?

All holders of record of our common stock, par value $0.01 (the “common stock”), at the close of business on April 27, 2011 (the “record date”) are entitled to vote at the Annual Meeting.

What shares will be entitled to vote at the Annual Meeting?

Our voting securities consist of our common stock of which 20,510,254 shares were outstanding on the record date. Each share outstanding on the record date will be entitled to one vote.

If you are the beneficial owner, but not the record owner, of our common stock, you will receive instructions about voting from the bank, broker or other nominee that is the stockholder of record of your shares. Contact your bank, broker or other nominee directly if you have questions.

Who can attend the Annual Meeting?

You are entitled to attend the Annual Meeting only if you are a stockholder of record or a beneficial owner as of the record date, or you hold a valid proxy for the Annual Meeting.

If you are a Fortegra stockholder of record and wish to attend the meeting, please so indicate on the proxy card. Your name will be verified against the list of stockholders of record prior to your being admitted to the Annual Meeting.

If a bank, broker or other nominee is the record owner of your shares, you will need to have proof that you are the beneficial owner to be admitted to the meeting. A recent statement or letter from your bank or broker confirming your ownership as of the record

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date, or presentation of a valid proxy from a bank, broker or other nominee that is the record owner of your shares, would be acceptable proof of your beneficial ownership.

You should be prepared to present photo identification for admittance. If you do not provide photo identification or comply with the other procedures outlined above upon request, you may not be admitted to the Annual Meeting.

How do I vote my shares?

Stockholders of record may vote their shares in person at the Annual Meeting, or may submit a proxy to cause their shares to be represented and voted at the Annual Meeting.

• Stockholders of record may grant a proxy with respect to their shares by mail.

• Voting instructions appear on your proxy card.

• If you are a stockholder of record or a duly appointed proxy of a stockholder of record, you may attend the meeting and vote in person. However, if your shares are held in the name of a bank, broker or other nominee, and you wish to attend the meeting to vote in person, you will have to contact your bank, broker or other nominee to obtain its proxy, and bring that document with you to the meeting.

• Proxies submitted by mail will be voted in the manner you indicate by the individuals named on the proxy.

• If you hold shares of our common stock through a benefit plan, you will receive a separate voting instruction card covering these shares from the plan trustee.

May I change or revoke my proxy after it is submitted?

Yes, you may change or revoke your proxy at any time before the Annual Meeting by:

• returning a later-dated proxy card;

• attending the Annual Meeting and voting in person; or

• sending your notice of revocation to John G. Short, our Secretary.

If you submit your changed proxy, it must be received by 5:00 p.m. Eastern time on June 6, 2011. If you submit your changed proxy or revocation by another method specified above, it must be received before the polls close for voting.

What is a quorum?

In order for business to be conducted at the Annual Meeting, a quorum must be present. A quorum will be present if stockholders of record holding a majority in voting power of the outstanding shares of stock entitled to vote at the meeting are present in person or are represented by proxies. Abstentions and broker non-votes (as described below) will be counted as shares present for purposes of determining whether a quorum is present.

What is a broker non-vote?

A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that matter and has not received voting instructions from the beneficial owner.

How are shares held by a broker or nominee voted?

Under New York Stock Exchange (“NYSE”) rules, the ratification of the selection of an independent registered public accounting firm (Proposal No. 4), is considered a “routine” matter, and brokers generally may vote on behalf of beneficial owners who have not furnished voting instructions, subject to the rules of the NYSE concerning transmission of proxy materials to beneficial owners, and subject to any proxy voting policies and procedures of those brokerage firms. However, brokers may not vote on the other proposals contained in this proxy statement, which are considered “non-routine” proposals, unless they have received voting instructions from the beneficial owner. To the extent that they have not received voting instructions, brokers report such number of shares as “non-votes.”

How will the proxy holders vote?

The Board selected the persons named in the accompanying proxy, who have advised the company that they intend to vote the shares represented by all properly executed and unrevoked proxies received by them FOR each of the Board nominees for director, FOR proposals 2 and 4 and FOR the approval of an advisory vote on executive compensation every THREE years, if no contrary instructions are given.

What vote is necessary to approve each of the proposals at the Annual Meeting?

Holders of common stock will vote as a single class and will be entitled to one vote per share with respect to each matter to be presented at the Annual Meeting.

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Election of Directors. Under our Bylaws, each of the nominees for director receiving a majority of votes cast by holders of our common stock, at the meeting in person or by proxy, shall be elected to our Board of Directors, unless the election is contested, in which case directors shall be elected by a plurality of votes properly cast. An election shall be contested if Fortegra's Secretary receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirement for stockholder nominees set forth in Fortegra's Bylaws and such nomination has not been withdrawn by such stockholder on or prior to the day next preceding the date that Fortegra first furnishes its notice of meeting for such meeting to the stockholders. A majority of votes cast means that the number of votes cast for a director exceeds the number of votes cast against that director, with abstentions and broker non-votes counting as votes neither for nor against such director's election, and thus do not have a direct affect on the outcome of the election of directors.

The Board of Directors has proposed seven nominees for election. No other nominees for election to the Board of Directors have been submitted for election in accordance with the Bylaws. Thus, the election will be uncontested, and each director will be elected by a majority of votes cast.

Advisory Vote on Named Executive Officer Compensation. The affirmative vote of the holders of a majority of shares of common stock present at the meeting, in person or by proxy, and entitled to vote on the matter is required to adopt the proposal. Abstentions will have the same effect as negative votes. Broker non-votes will have no effect for the purpose of determining whether the proposal has been approved.

Advisory Vote on Frequency of Holding an Advisory Vote on Named Executive Officer Compensation. The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be considered the stockholders' recommendation of the frequency for the advisory vote on named executive officer compensation. Abstentions and broker non-votes will have no effect on the vote.

Ratification of the Selection of Johnson Lambert & Co. LLP as our Independent Registered Public AccountingFirm. The affirmative vote of the holders of a majority of shares of common stock present at the meeting, in person or by proxy, and entitled to vote on the matter is required for the ratification of the selection of Johnson Lambert & Co. LLP as our independent registered public accounting firm for 2011. Abstentions will have the same effect as negative votes.

Other Matters. The affirmative vote of the holders of a majority of shares of common stock present at the meeting, in person or by proxy, and entitled to vote on the matter is required for approval of any other matters.

NYSE rules do not allow brokers discretionary authority to vote in the election of directors, in the approval, on an advisory basis, of executive compensation or in the approval, on an advisory basis, of the vote on the frequency of future advisory votes on executive compensation. Therefore, if you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on those proposals. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted in these matters.

Who is the inspector of election?

The Board of Directors has appointed a company officer to act as Inspector of Election at the Annual Meeting.

Who will bear the costs for soliciting proxies for the Annual Meeting?

Proxies will be solicited on behalf of the Board of Directors by mail, telephone, other electronic means or in person, and we will pay the solicitation costs. Copies of proxy materials and of the 2010 Annual Report will be supplied to brokers, dealers, banks and voting trustees, or their nominees, for the purpose of soliciting proxies from beneficial owners, and we will reimburse such record holders for their reasonable expenses. We estimate that the company's cost for soliciting proxies for the Annual Meeting to be $10,000.

What is the deadline for submission of stockholder proposals for the 2012 Annual Meeting?

The rules of the United States Securities and Exchange Commission (“SEC”) establish the eligibility requirements and the procedures that must be followed for a stockholder's proposal to be included in a public company's proxy materials. Under those rules, proposals submitted for inclusion in Fortegra's 2012 proxy materials must be received on or in accordance with Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) on or before the close of business on December 29, 2011. Proposals for inclusion in our 2012 proxy materials must comply with all requirements of the rules of the SEC.

In addition, our Bylaws establish an advance notice procedure with regard to director nominations and other business proposals by stockholders intended to be presented at our 2012 Annual Meeting but not included in our 2012 proxy materials. For these nominations or other business proposals to be properly brought before the meeting by a stockholder, assuming the 2012 Annual

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Meeting occurs on a date that is not more than 30 days before or 60 days after the anniversary of the Annual Meeting, the stockholder must deliver written notice to us not later than the close of business on March 9, 2012 nor earlier than the close of business on February 7, 2012. Such nominations and other business proposals must comply with all requirements set forth in our Bylaws. In the event the 2012 Annual Meeting occurs on a date that is not more than 30 days before or 60 days after the anniversary of the Annual Meeting, then notice by the stockholder must be received not later than the close of business on the tenth (10^th) day following the day on which notice of the date of the annual meeting was mailed or otherwise provided.

All notices of intention to present director nominations or other business proposals at the 2012 Annual Meeting, whether or not intended to be included in our proxy materials, should be addressed to: John G. Short, Secretary, Fortegra Financial Corporation, 10151 Deerwood Park Blvd., Building 100, Suite 330, Jacksonville, FL. 32256.

Where can I find the voting results of the 2011 Annual Meeting?

The preliminary voting results will be announced at the meeting. The final results will be posted in the corporate governance section of our website after the results have been tabulated and certified. To view the results, go to www.Fortegra.com and click “Investors” then click “2011 Annual Meeting Results.” In addition, within four business days following the meeting, we intend to file the final voting results with the SEC on Form 8-K. If the final voting results have not been certified within that four-day period, we will report the preliminary voting results on Form 8-K at that time and will file an amendment to the Form 8-K to report the final voting results within four business days of the date that the final results are certified.

May I request electronic delivery of my proxy statement and annual report in the future?

Stockholders of record may elect to receive future annual reports and proxy statements electronically by providing consent to electronic delivery on-line at http://www.amstock.com/proxyservices/requestmaterials.asp. Should you choose to receive your proxy materials electronically, your choice will remain in effect until you notify Fortegra or American Stock Transfer & Trust Company in accordance with applicable law that you wish to resume mail delivery of these documents. If you hold your Fortegra common stock through a bank, broker or other holder of record, refer to the information provided by that entity for instructions on how to receive your proxy materials electronically.

Where can I view this proxy statement and Fortegra's 2010 Annual Report electronically?

This proxy statement and Fortegra's 2010 Annual Report may be viewed online at Fortegra's website by going to www.Fortegra.com and clicking “Investors”.

How can I get a copy of Fortegra's Annual Report on Form 10-K?

To obtain a copy of Fortegra's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 without charge, address your request to Investor Relations, Fortegra Financial Corporation, 10151 Deerwood Park Blvd., Building 100, Suite 330, Jacksonville, FL 32256. The Annual Report on Form 10-K also may be accessed at our website. To view, go to www.Fortegra.com, click “Investors,” then click “SEC Filings” and finally click “Annual Reports and Proxy Statements.” The Annual Report on Form 10-K also may be accessed at the SEC's website at www.sec.gov.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we are delivering a single copy of the proxy materials and the 2010 Annual Report to Stockholders to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs and fees. Stockholders who participate in householding will continue to be able to access and receive separate Proxy Cards. Upon written request, we will deliver promptly a separate copy of proxy materials and the Annual Report to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy of these proxy materials or the Annual Report, stockholders may write, email or call us at the following address, email address, and telephone number:

Fortegra Financial Corporation

c/o John G. Short, Secretary or c/o Investor Relations

10151 Deerwood Park Blvd.

Building 100, Suite 330

Jacksonville, FL 32256

904-352-2759

800-888-2738

http://investors.fortegra.com

Stockholders who hold shares in street name may contact their brokerage firm, bank, broker-dealer or other similar organization

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to request information about householding.

INFORMATION ABOUT COMMUNICATIONS WITH FORTEGRA AND OUR BOARD OF DIRECTORS

How may I communicate directly with the Board of Directors?

The Board of Directors provides a process for stockholders to send communications to the Board of Directors. You may communicate with the Board of Directors, individually or as a group, as follows:

By Mail:	By Phone:	By E-mail:
The Board of Directors	904-352-2759	Directors@Fortegra.com
Fortegra Financial Corporation	800-888-2738
c/o John G. Short, Secretary
10151 Deerwood Park Blvd.
Building 100, Suite 330
Jacksonville, FL 32256

You should identify your communication as being from a Fortegra stockholder. The Secretary may require reasonable evidence that your communication or other submission is made by a Fortegra stockholder before transmitting your communication to the Board of Directors.

How may interested parties communicate directly with the independent directors?

Interested parties may communicate directly with the independent directors, individually or as a group, by any of the means set forth above or as follows:

By Mail:

Independent Directors of the Board of Directors

Fortegra Financial Corporation

c/o John G. Short, Secretary

10151 Deerwood Park Blvd.

Building 100, Suite 330

Jacksonville, FL 32256 

How may stockholders or interested parties communicate directly with the Lead Director?

Stockholders and interested parties may communicate directly with the Lead Director by any of the means set forth above. If you choose to communicate via email or mail, please note Attn: Lead Director in the mailing address or subject line of the email.

How do I communicate directly with Fortegra?

You may communicate directly with Fortegra as follows:

By Mail:

Fortegra Financial Corporation

c/o John G. Short, Secretary or c/o Investor Relations

10151 Deerwood Park Blvd.

Building 100, Suite 330

Jacksonville, FL 32256 

How may I communicate with the Audit Committee regarding accounting, internal accounting controls or auditing matters?

The Audit Committee has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, as well as for confidential, anonymous submissions by company employees of concerns regarding questionable accounting or auditing matters. A communication or complaint to the Audit Committee regarding accounting, internal accounting controls or auditing matters may be submitted by any of the following means:

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GENERAL COUNSEL

By Mail:	Anonymously By Phone:	By E-mail:
General Counsel	866-847-8139	generalcounsel@Fortegra.com
Fortegra Financial Corporation
10151 Deerwood Park Blvd.
Building 100, Suite 330
Jacksonville, FL 32256

AUDIT COMMITTEE

By Mail:	Anonymously By Phone:	By E-mail:
Audit Committee	866-847-8139	Directors@Fortegra.com
Fortegra Financial Corporation
c/o John G. Short, General Counsel
10151 Deerwood Park Blvd.
Building 100, Suite 330
Jacksonville, FL 32256

PROPOSAL 1

ELECTION OF DIRECTORS

Each of the seven directors serving currently on our Board of Directors will stand for reelection. Our Board of Directors adopted a resolution in November 2010 setting the size of the Board of Directors at seven members, effective as of the completion of our initial public offering which occurred on December 16, 2010. At the Annual Meeting, all seven directors are to be elected to hold office until the 2012 Annual Meeting and until their successors have been elected and have qualified.

The seven nominees for election at the Annual Meeting are listed on pages 6 to 9 with brief biographies and descriptions of their qualifications and skills to serve as our directors. See the Board of Directors and Committees-Board Composition section for a description of how our directors' blend of backgrounds benefits our company. The Board of Directors has determined that four of the seven nominees are independent directors under the NYSE listing requirements and our Corporate Governance Guidelines and Principles (the “Governance Principles”), which are discussed below in the Corporate Governance section.

All of the nominees named in this proxy statement have been nominated by our Board of Directors to be elected by holders of our common stock. We are not aware of any reason why any nominee would be unable to serve as a director. If a nominee for election is unable to serve, the shares represented by all valid proxies will be voted for the election of any other person that our Board of Directors may nominate as a substitute.

Richard S. Kahlbaugh, 51, Chairman, President and Chief Executive Officer Mr. Kahlbaugh has been our President and Chief Executive Officer and a director since June 2007 and has been our Chairman since June 2010. Prior to becoming President and Chief Executive Officer, Mr. Kahlbaugh was our Chief Operating Officer from 2003 to 2007. Prior to joining us in 2003, Mr. Kahlbaugh served as President and Chief Executive Officer of Volvo's Global Insurance Group. He also served as the first General Counsel of the Walshire Assurance Group, a publicly traded insurance company, and practiced law with McNees, Wallace and Nurick. Mr. Kahlbaugh also currently serves on the board of directors of Campus Crest Communities, Inc. Mr. Kahlbaugh's brother-in-law, John G. Short, serves as our Senior Vice President and General Counsel. Mr. Kahlbaugh holds a J.D. from Delaware Law School of Widener University and a B.A. from the University of Delaware.           Qualifications:Mr. Kahlbaugh was selected to serve on our Board of Directors in light of his significant knowledge of our products and markets and his ability to provide valuable insight to our Board of Directors as to day-to-day business issues we face in his role as our Chief Executive Officer.

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Alfred R. Berkeley, III, 66, Chairman of Pipeline Financial Group, Inc. and Director since December 2010. Mr. Berkeley became a member of our Board of Directors in connection with our initial public offering in December 2010. Mr. Berkeley is currently the Chairman of Pipeline Financial Group, Inc., the parent of Pipeline Trading Systems, L.L.C., a block trading brokerage service, where he also served as Chief Executive Officer from December 2003 to March 2010. He also serves as a trustee of Johns Hopkins University and as a member of the Johns Hopkins University Applied Physics Laboratory, LLC. He formerly served as Vice Chairman of the Nomination Evaluation Committee for the National Medal of Technology and Innovation, which makes candidate recommendations to the Secretary of Commerce. Mr. Berkeley also serves as Vice Chairman of the National Infrastructure Advisory Council for the President of the United States and served as the Chairman of XBRL US, the non-profit organization established to set data standards for the modernization of the Securities and Exchange Commission's EDGAR reporting system, from 2007 until January 2010. Prior to that, he served as the Vice Chairman of NASDAQ from July 2000 to July 2003 and President of NASDAQ from 1996 until 2000. From 1972 to 1996, Mr. Berkeley served in a number of capacities at Alex. Brown & Sons Incorporated, which was acquired by Bankers Trust New York Corporation and later by Deutsche Bank AG. Most recently, he was Managing Director in the corporate finance department where he financed computer software and electronic commerce companies. He joined Alex. Brown & Sons Incorporated as a Research Analyst in 1972 and became a general partner in 1983. From 1985 to 1987, he served as Head of Information Services for the firm. From 1988 to 1990, Mr. Berkeley took a leave of absence from Alex. Brown & Sons Incorporated to serve as President and Chief Executive Officer of Rabbit Software Inc., a public telecommunications software company. He served as a captain in the United States Air Force and a major in the United States Air Force Reserve. Mr. Berkeley has served as a director of ACI Worldwide, Inc. since 2007. He also currently serves as a director of EDGAR Online, Inc., RealPage Inc. and XBRL US. Mr. Berkeley was previously a director of Kintera, Inc., a provider of software for non-profit organizations, from September 2003 until it was acquired by Blackbaud, Inc., Webex Communications Inc., a provider of meeting and web event software, until it was acquired by Cisco Systems, Inc. and National Research Exchange Inc., a registered broker dealer, until it ceased operations. Mr. Berkeley holds an M.B.A. from The Wharton School at the University of Pennsylvania and a B.A. from the University of Virginia. Qualifications: Mr. Berkeley was selected to serve on our Board of Directors in light of his experiences as a director of a number of public companies, his capital markets experience and his management and leadership experiences.

John R. Carroll, 43, Managing Director of Summit Partners. Director since June 2007. Mr. Carroll has served on our Board of Directors since June 2007. Mr. Carroll currently serves as a Managing Director of Summit Partners, which he joined in 1998. Prior to joining Summit Partners, Mr. Carroll worked as a consultant at Bain & Company from June 1997 to September 1997 and worked as a commercial banker at BayBanks, Inc. from March 1991 to March 1993. Mr. Carroll currently serves on the board of directors of FleetCor Technologies, Inc. and numerous other private companies. Mr. Carroll holds an M.B.A. from Northwestern University and a B.A. from Dartmouth College. Qualifications: Mr. Carroll was selected to serve on our Board of Directors in light of his experiences in banking, investment banking and private equity financing, and his experiences as a director with private companies.

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	Francis M. Colalucci, 66, Retired Chief Financial Officer and Treasurer of Tower Group, Inc. Director since December 2010. Mr. Colalucci became a member of our Board of Directors in connection with our initial public offering in December 2010. Mr. Colalucci was the Senior Vice President, Chief Financial Officer and Treasurer of Tower Group, Inc., from February 2002 until his retirement in May 2010. Prior to that, Mr. Colalucci was employed by the Empire Insurance Company from 1996 until 2001, a property and casualty insurance company, and ultimately served as Executive Vice President, Chief Financial Officer and Treasurer. Mr. Colalucci served as a director of Tower Group, Inc. from March 2002 until he retired from the board in March 2010, and was previously a director of Empire Insurance Company from 1996 until 2001. Mr. Colalucci holds a B.B.A. from St. John's University and is a New York State licensed Certified Public Accountant. Qualifications: Mr. Colalucci was selected to serve on our Board of Directors in light of his 40 years of relevant accounting and financial experience and more than 30 years of insurance industry-related experience.
	Frank P. Filipps, 63, Former President and Chief Executive Officer of Clayton Holdings, Inc. and Radian Group, Inc. Director since December 2010. Mr. Filipps became a member of our Board of Directors in connection with our initial public offering in December 2010. Mr. Filipps served as the Chairman and Chief Executive Officer of Clayton Holdings, Inc., a mortgage services company, from April 2005 to July 2008. Prior to that, Mr. Filipps served as the Chairman and Chief Executive Officer of Radian Group, Inc. and its principal subsidiary, Radian Guaranty, Inc. from June 1999 to April 2005. Mr. Filipps has been a director and a member of the compensation committee of the Board of Directors of Primus Guaranty, Ltd., a holding company primarily engaged in selling credit protection against investment grade credit obligations of corporate and sovereign entities, since September 2004. He has also been a director of Impac Mortgage Holdings, Inc. since August 1995. Mr. Filipps holds a B.A. from Rutgers University and an M.B. A. from New York University. Qualifications: Mr. Filipps was selected to serve on our Board of Directors in light of his diversified background of managing companies and his past senior executive positions and operating experience.
	J.J. Kardwell, 34, Principal of Summit Partners. Director since June 2007. Mr. Kardwell has served on our Board of Directors since June 2007. Mr. Kardwell joined Summit Partners in 2003 as a Vice President and currently serves as a Principal. Prior to joining Summit Partners, Mr. Kardwell worked as a Director at Windhorst New Technologies from May 2000 to August 2001 and in various finance roles at The Walt Disney Company from August 1998 to May 2000. Mr. Kardwell holds an M.B.A. from Harvard Business School and an A.B. from Harvard University. Mr. Kardwell serves on the board of directors of numerous private companies. Qualifications: Mr. Kardwell was selected to serve on our Board of Directors in light of his experiences with private equity financing, his experiences as a director with private companies and his management and leadership experience.
	Ted W. Rollins, 48, Co-chairman and Chief Executive Officer of Campus Crest Communities, Inc. Director since December 2010.           Mr. Rollins became a member of our Board of Directors in connection with our initial public offering in December 2010. Mr. Rollins currently serves as the co-chairman of the board of directors and Chief Executive Officer of Campus Crest Communities, Inc., a company he co-founded in 2004. Prior to that, Mr. Rollins co-founded and managed several companies that developed and operated housing properties and directed several private real estate focused investment funds. From 1998 through 2002, he served as president of St. James Capital, an investment company focused on research-based, structural land investment and niche income property opportunities. Mr. Rollins holds a B.S.B.A. from The Citadel and an M.B.A. from Duke University.           Qualifications: Mr. Rollins was selected to serve on our Board of Directors in light of his management and leadership experiences, including his senior executive positions.

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THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF MR. KAHLBAUGH, MR. BERKELEY, MR. CARROLL, MR. COLALUCCI, MR. FILIPPS, MR. KARDWELL AND MR. ROLLINS.

CORPORATE GOVERNANCE

Governance Principles

Our Governance Principles, which include guidelines for determining director independence and reporting concerns to non-management directors and the Audit Committee, are published on Fortegra's website, as are our other corporate governance materials, including the charters adopted by the Board for each of our standing committees and any key practices adopted by the committees. To view these materials, go to www.Fortegra.com, click “Investors” and then click “Corporate Governance.” The Board regularly reviews corporate governance developments and may modify these principles, charters and key practices as warranted. Any modifications will be reflected in the documents on Fortegra's website.

The Board held three meetings during 2010. During 2010, each of our directors attended more than 75% of aggregate of (1) the total number of meetings of the Board of Directors (held during the period for which he has been a director), and (2) the total number of meetings held by all committees of the Board on which he served (during the periods that he served). As set forth in the Governance Principles, directors are expected to attend the Annual Meeting. All of our directors serving at the time of our 2010 Annual Meeting of Stockholders attended the meeting.

Board Leadership Structure

Our Board of Directors functions in a collaborative fashion that emphasizes active participation and leadership by all of its members. With respect to the role of Chairman, our Board believes that one of its most important responsibilities is determining which director is most appropriate to serve in that role. The Board has determined that, by virtue of his tenure with and extensive knowledge of the company, Mr. Kahlbaugh is the appropriate choice to serve as Chairman of the Board at this time. The Board believes that the combination of Mr. Kahlbaugh as both Chairman and Chief Executive Officer (“CEO”), together with the Lead Director selected by the independent directors, is currently the appropriate leadership structure for the company. The Chairman and the Lead Director provide leadership to the Board as a whole in setting its strategic priorities. In his position as CEO, Mr. Kahlbaugh has primary responsibility for the day-to-day operations of the company and, accordingly, is able to effectively communicate the Board's strategic findings and guidance to management. In his position as Lead Director, Mr. Rollins presides at all meetings of independent directors, is available to work with the Chairman to discuss stockholder inquiries regarding the Board and exercises the other responsibilities described below. At this time, Messrs. Kahlbaugh, Carroll and Kardwell are the only members of the Board that are not independent. With a majority of independent directors, a strong committee structure, a Lead Director with well-defined responsibilities, and the fact that the Chairman/CEO does not serve on any independent Board committees, Fortegra's Board of Directors is comfortable with its existing leadership structure. Our Board reviews its leadership structure from time to time as appropriate.

In December 2010, the Board created the position of Lead Director and in January 2011 the independent members of the Board appointed Mr. Rollins to serve in this role. As more fully set forth in our Governance Principles, available on our website (to view, go to www.Fortegra.com, click “Investors,” then click “Corporate Governance,” then click “Governance Documents” and finally click “Corporate Governance Guidelines and Principles” one more time), the Lead Director's responsibilities and authority include:

• convene, chair and determine agendas for executive sessions, and coordinate feedback to the CEO regarding issues discussed in executive sessions;

• assist the Board in the evaluation of senior management (including the CEO) and communicate the results of such evaluation to the CEO;

• serve as an information resource for other directors and act as liaison between directors, committee chairs and management;

• provide advice and counsel to the CEO;

• develop and implement, with the Chairman and the Governance Committee, the procedures governing the Board's work;

• where appropriate and as directed by the Board, communicate with stockholders, rating agencies, regulators and interested parties; and

• as directed by the Chairman, speak for the Board in circumstances where it is appropriate for the Board to have a voice distinct from that of management.

Role of Board in the Oversight of Risk

Our Board of Directors recognizes that, although risk management is primarily the responsibility of Fortegra's management, the Board plays a critical role in the oversight of risk. As an insurance services company, the very nature of our business involves the management of regulatory and underwriting risks on behalf of our customers. The Board believes it is an important part of its

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responsibilities to oversee the company's overall risk assessment processes and management thereof. The Board as a whole discusses with management specific business risks as part of its regular reviews of the individual business units and also on a company-wide basis as part of its strategic reviews. The Board also utilizes its committees to oversee specific risks and receives regular reports from the committees on the areas of risk for which they have oversight. The Audit Committee has responsibility for oversight of risks associated with financial accounting and reporting, including the system of internal control. This oversight includes reviewing and discussing with management the company's risk assessment process and management policies with respect to the company's major financial risk exposures, including investments, and the procedures utilized by management to identify and mitigate the exposure to such risks. The Compensation Committee oversees the risks relating to compensation plans and programs, as well as management development and leadership succession in the company's various business units. Our Governance Committee is responsible for the oversight of risks relating to corporate governance. Our Audit Committee oversees risks associated with legal and regulatory compliance, as well as financial risk exposures, and assists the Board in fulfilling its oversight responsibilities regarding the Company's policies and processes with respect to risk assessment and risk management, including any significant non-financial risk exposures. We believe that our risk oversight structure is also supported by our current Board leadership structure, with the Chairman of the Board and the Lead Director working together with our independent Audit Committee and our other standing committees.

Director Independence

Our Board currently consists of seven directors, four of whom are independent (as defined by our Governance Principles and NYSE listing standards), one of whom is our President and CEO, and two of whom are employees of our principal stockholder. For a director to be independent, the Board must determine that the director does not have any direct or indirect material relationship with Fortegra. The Board has established guidelines to assist it in determining director independence, which conform to, or are more exacting than, the independence requirements of the NYSE. The independence guidelines are set forth in paragraph V.B. of our Governance Principles, which are available on our website. In addition to applying these guidelines, the Board will consider all relevant facts and circumstances in making an independence determination. The Board has determined that Messrs. Berkeley, Colalucci, Filipps and Rollins satisfy the NYSE's independence requirements and Fortegra's independence guidelines.

In addition to the independence guidelines discussed above, members of the Audit Committee also must satisfy additional independence requirements established by the SEC and the NYSE. Specifically, they may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from Fortegra or any of its subsidiaries other than their directors' compensation and they may not be affiliated with Fortegra or any of its subsidiaries. The Board has determined that all the members of the Audit Committee satisfy the relevant SEC and NYSE independence requirements.

Code of Business Conduct and Ethics

All of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, must act ethically at all times and in accordance with the policies comprising our code of business conduct and ethics set forth in our Code of Business Conduct and Ethics and, with respect to our principal executive officer, principal financial officer, principal accounting officer and controller our Supplemental Code of Ethics for CEO, CFO and Senior Officers. If an actual or potential conflict of interest arises for a director, the director shall promptly inform the Chief Executive Officer. Our Supplemental Code of Ethics for CEO, CFO and Senior Officers complements our Code of Business Conduct and Ethics and, among other things, promotes honest and ethical conduct; full, fair, accurate, timely and understandable disclosure in public communications; and compliance with applicable laws, rules and regulations. To view our Code of Business Conduct Ethics and Supplemental Code of Ethics for CEO, CFO and Senior Officers, go to www.Fortegra.com, click “Investors,” then click “Corporate Governance.” Within the time period required by the SEC and the NYSE, we will post on our website any amendment to our Code of Business Conduct and Ethics.

BOARD OF DIRECTORS AND COMMITTEES

Board Composition

Our Board of Directors is composed of individuals with diverse experience at policy-making levels in business, finance and insurance in areas that are relevant to the company's business activities. Each director was nominated on the basis of the unique set of qualifications and skills he brings to the Board, as well as how those qualifications and skills blend with those of the others on the Board as a whole. See the Election of Directors section for a description of each director nominee's qualifications and skills.

Our certificate of incorporation provides that the number of authorized directors of our company will be fixed from time to time by a resolution adopted by our Board of Directors, but will not be less than three nor more than 15. Our Board of Directors has set the size of the Board of Directors at seven members.

Each director elected by the holders of our common stock will serve until the next annual meeting of stockholders and until his or her successor is elected and qualified, or until the earlier of his or her death, resignation, disqualification or removal. The holders

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of common stock do not have cumulative voting rights in the election of directors.

Our Governance Principles provide that directors should limit the number of other boards on which they serve to between two and eight, with the lower limit applying to directors who are engaged full-time in another business.

Board Committees

The four standing committees of the Board are the Audit Committee, the Compensation Committee, the Governance Committee and the Executive Committee. These committees are described below. The Board has established written charters for each of its standing committees, other than the Executive Committee, which has only the powers delegated to it by the Board from time to time. Our Board of Directors may also establish various other committees to assist it in carrying out its responsibilities. The Audit Committee held one (1) meeting in 2010 and the Compensation Committee held two (2) meetings in 2010. The table below shows the current Board committee memberships.

Director	Audit	Compensation	Governance	Executive
Richard S. Kahlbaugh				C
John Carroll
J.J. Kardwell				X
Alfred R. Berkeley, III		C	X	X
Francis M. Colalucci	C	X
Frank P. Filipps	X	X	C
Ted W. Rollins+	X		X

* Non-Independent Director

+ Lead Director

C = Committee Chair

X = Committee Member

Audit Committee

The Audit Committee consists solely of “independent” directors as defined under the applicable rules of the NYSE and the SEC. In addition, the Board has determined that Mr. Colalucci is an “audit committee financial expert” as defined by SEC rules.

As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.Fortegra.com, click “Investors,” then click “Corporate Governance,” then click “Audit Committee”), the Audit Committee is concerned primarily with the accuracy and effectiveness of the audits of our financial statements. The Audit Committee's duties include overseeing:

• management's conduct of, and the integrity of, the company's financial reporting to any governmental or regulatory body, stockholders, other users of company financial reports and the public;

• the company's systems of internal control over financial reporting and disclosure controls and procedures;

• the qualifications, engagement, compensation, independence and performance of the registered public accounting firm that shall audit the company's annual financial statements and any other registered public accounting firm engaged to prepare or issue an audit report or to perform other audit, review or attest services for the company, their conduct of the annual audit of the company's financial statements and any other audit, review or attestation engagement, and their engagement to provide any other services;

• the company's legal and regulatory compliance; and

• the application of the company's codes of business conduct and ethics as established by management and the Board.

The Audit Committee has determined that in view of the increased demands and responsibilities of the committee, its members generally should not serve on more than two additional audit committees of other public companies. The Audit Committee's report appears on page 35 of this proxy statement.

Compensation Committee

The Compensation Committee consists solely of “independent” directors under the applicable rules of the NYSE. As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.Fortegra.com, click “Investors,” then click “Corporate Governance,” then click “Compensation Committee”), the Compensation Committee's responsibilities include:

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• assisting the Board in overseeing the company's employee compensation policies and practices;

• determining and approving the compensation of the Company's CEO and the company's other executive officers;

• reviewing and approving incentive compensation policies and programs, and exercising discretion in the administration of such programs;

• reviewing and approving equity compensation programs, and exercising discretion in the administration of such programs; and

• preparing the annual report of the Committee required by the rules of the SEC.

Under its charter, the Compensation Committee has authority to delegate any of its responsibilities to subcommittees as the Compensation Committee so long as such committee is comprised solely of one or more members of the Compensation Committee and such delegation is not inconsistent with law and applicable rules and regulations of the SEC and the NYSE. The Compensation Committee's report appears on page 19 of this proxy statement. Additional information regarding the Compensation Committee's processes and procedures for consideration of executive compensation is provided in the Compensation Discussion and Analysis below.

Governance Committee

The Governance Committee consists solely of “independent” directors under the applicable rules of the NYSE. As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.Fortegra.com, click “Investors,” then click “Corporate Governance,” then click “Corporate Governance Committee”), the Governance Committee's responsibilities include:

• identifying, screening and reviewing individuals qualified to serve as directors and recommending to the Board candidates for nomination for election at the annual meeting of stockholders or to fill Board vacancies;

• overseeing the company's policies and procedures for the receipt of stockholder suggestions regarding Board composition and recommendations of candidates or nominations by the Board;

• the application of the company's related person transaction policy as established by the Board;

• developing, recommending to the Board and overseeing implementation of the company's Governance Principles; and

• reviewing on a regular basis the overall corporate governance of the company and recommending improvements when necessary.

The Governance Committee makes recommendations to our Board of Directors of candidates for election to our Board, and our Board of Directors makes recommendations to our stockholders. This committee will consider all stockholder recommendations for candidates for the Board, which should be sent to the Governance Committee, c/o John G. Short, Secretary, Fortegra Financial Corporation, 10151 Deerwood Park Blvd., Building 100, Suite 330, Jacksonville, FL 32256.

The Governance Committee believes all director nominees should meet certain qualifications and possess certain qualities or skills that, when considered in light of the qualities and skills of the other director nominees, assist the Board in overseeing the company's operations and developing and pursuing its strategic objectives. The Governance Committee believes each director nominee should at a minimum, possess integrity, objectivity, independence, sound judgment, leadership, courage and diversity of experience (for example, in relation to finance and accounting, international operations, strategy, risk, technical expertise and policy-making). The qualifications, qualities and skills required for directors are further set forth in paragraph V of our Governance Principles, which are available on our website.

The Governance Committee will consider potential candidates recommended by stockholders using substantially the same criteria it applies to recommendations from the Governance Committee, directors and members of management. The Governance Committee will considers all potential candidates regardless of the source of the recommendation and determines whether potential candidates meet our qualifications, qualities and skills for directors. Where there is an interest in a particular candidate, the Governance Committee's review is multi-faceted and typically will include a review of written materials regarding the candidate, due diligence performed internally and externally, a review of a completed candidate questionnaire and one or more interviews with members of the Governance Committee.

Executive Committee

The purpose of the Executive Committee is to handle such matters as are specifically delegated by the Board. One independent director currently serves on the Executive Committee.

Compensation of Directors

The Governance Committee has the responsibility for reviewing and recommending to the Board compensation changes for directors. Currently, directors who are Fortegra employees or affiliated with Summit Partners, L.P., are not compensated for their Board service. Accordingly, Messrs. Kahlbaugh, Carroll and Kardwell do not receive any compensation for serving as a director.

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All other directors receive:

• a base annual retainer of $25,000 in cash;

• an additional annual retainer of $15,000 in cash to the lead director and an additional annual retainer of $10,000 in cash to each director who is the chair of a committee; and

• a fee of $2,500 for each board and committee meeting attended or $1,000 for meetings attended telephonically.

In 2010, Fortegra granted 15,000 shares of restricted stock, which vests annually over three years, to each of our newly appointed independent directors, Messrs. Berkeley, Colalucci, Filipps and Rollins. All directors are reimbursed for travel expenses to attend Board and committee meetings and to attend director education seminars, in accordance with policies approved from time to time.

Director Stock Ownership Policy

To help promote the alignment of the personal interests of the company's directors with the interests of our stockholders, we have established a stock ownership policy for all non-management directors. By the third anniversary of service on the Board, each non-management director is expected to hold a minimum amount of our common stock of three times the annual retainer amount. As a result of the initial stock grants described above, each non-management director's stock ownership currently meets our policy requirements.

Meetings of Independent Directors

Our Governance Principles provide that the independent directors on our Board (whose independence is determined in accordance with the NYSE listing standards and our Governance Principles) will meet separately at least one time each year without the presence of non-independent directors. The independent directors may meet without management present at such other times as determined by the Lead Director or at the request of the independent directors. The Board has determined that all of our current directors other than Richard S. Kahlbaugh, our President and CEO, and John Carroll and J.J. Kardwell, each employees of Summit Partners, L.P., are independent directors. The directors have determined that the Lead Director, currently Mr. Rollins, will preside at the meetings of the independent directors.

INFORMATION RELATING TO DIRECTORS, DIRECTOR NOMINEES, EXECUTIVE OFFICERS AND SIGNIFICANT STOCKHOLDERS

Ownership of Fortegra Common Stock

The following table sets forth information as of April 1, 2011, regarding the beneficial ownership of our common stock by:

• all persons (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act) known by us to own beneficially more than 5% of any class of our common stock (based on the most recently available information filed with the SEC);

• the named executive officers included in the Summary Compensation Table below;

• each of our directors; and

• all directors and named executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated in the footnotes to the table, directors and named executive officers possess sole voting and investment power with respect to all shares set forth by their name. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock issuable upon the exercise of stock options held by that person that are currently exercisable, or are exercisable within 60 days of April 1, 2011 are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of each other stockholder. As of April 1, 2011, there were 20,510,254 shares of common stock outstanding and no shares of any other class of voting securities outstanding.

The address of each director and executive officer listed below is c/o Fortegra Financial Corporation, 10151 Deerwood Park Blvd., Building 100, Suite 330, Jacksonville, FL 32256.

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Name and Address of Beneficial Owner	Shares	Percentage
5% Stockholders:
Summit Partners, L.P.(1) 222 Berkeley Street, 18th Floor, Boston, MA 02116	12,438,772	60.6%
T. Rowe Price Associates, Inc.(2) 100 E. Pratt Street, Baltimore, MD 21202	1,342,400	6.5%
Named Executive Officers and Directors
Richard S. Kahlbaugh(3)	551,541	2.7%
Walter P. Mascherin(4)	32,262	*
Michael Vrban(5)	79,221	*
W. Dale Bullard(6)	688,231	3.3%
Robert S. Fullington(7)	749,084	3.7%
Daniel A. Reppert(8)	70,399	*
John R. Carroll(9)	—	*
J.J. Kardwell(10)	—	*
Nicholas Santoro	—	*
Alfred R. Berkeley, III	15,000	*
Francis M. Colalucci	17,000	*
Frank P. Filipps	15,000	*
Ted W. Rollins	15,000	*
All directors and named executive officers as a group	2,232,738	10.1%

* less than 1%

(1) Includes 7,185,871 shares held by Summit Partners Private Equity Fund VII-A L.P., 4,315,949 shares held by Summit Partners Private Equity Fund VII-B L.P., 591,713 shares held by Summit Subordinated Debt Fund III-A L.P., 308,237 shares held by Summit Subordinated Debt Fund III-B L.P., and 37,002 shares held by Summit Investors VI L.P. (such entities are collectively referred to as "Summit Partners").

Summit Partners, L.P. is (i) managing member of Summit Partners PE VII, LLC, which is the general partner of Summit Partners PE VII, L.P., which is the general partner of Summit Partners Private Equity Fund VII-A, L.P. and Summit Partners Private Equity Fund VII-B, L.P., (ii) the managing members of Summit Partners SD III, LLC, which is the general partner of Summit Partners SD III, L.P., which is the general partner of Summit Subordinated Debt Fund III-A, L.P. and Subordinated Debt Fund III-B, L.P. and (iii) the managing member of Summit Partners VI (GP), LLC, which is the general partner of Summit Partners VI (GP), L.P., which is the general partner of Summit Investors VI, L.P.

Summit Partners, L.P., through a two-person investment committee, currently composed of Martin J. Mannion and Bruce R. Evans, has voting and dispositive authority over the shares held by each of these entities and therefore beneficially owns such shares. The address for each of these entities is 222 Berkeley Street, 18th Floor, Boston, MA 02116. Entities affiliated with Summit Partners hold private equity investments in one or more broker-dealers, and as a result Summit Partners is an affiliate of a broker-dealer. However, Summit Partners acquired the securities in Fortegra in the ordinary course of business for investment for its own account and not as a nominee or agent and, at the time of that purchase, had no contract, undertaking, agreement, understanding or arrangement, directly or indirectly, with any person to sell, transfer, distribute or grant participants to such person or to any third person with respect to those securities.

(2) Based on information contained in a report on Form 13G that T. Rowe Price filed with the SEC, which contained information as of December 31, 2010.

(3) Includes 8,816 shares held by the Company for Mr. Kahlbaugh's benefit, 9,298 shares held jointly by Mr. Kahlbaugh and his wife, and 528,882 shares that are subject to options that are currently exercisable or exercisable within 60 days of April 1, 2011

(4) Includes 31,262 shares that are subject to options that are currently exercisable or exercisable within 60 days of April 1, 2011

(5) Includes 2,625 shares of stock owned by Mr. Vrban's wife and 61,101 shares that are subject to options that are currently exercisable or exercisable within 60 days of April 1, 2011

(6) Includes 2,625 shares of stock owned by Mr. Bullard's wife, 15,592 shares held in an IRA, 33,656 shares held by the Company for Mr. Bullard's benefit, and 483,096 shares that are subject to options that are currently exercisable or exercisable within 60 days of April 1, 2011

(7) Includes 15,750 shares of stock held in the Robert S. Fullington Grantor Retained Annuity Trust, 2,107 shares held by the Company for Mr. Fullington's benefit, 15,750 shares held by the Robert S. Fullington GRAT II, and 454,661 shares that are subject to options that are currently exercisable or exercisable within 60 days of April 1, 2011

(8) Includes 61,101 shares that are subject to options that are currently exercisable or exercisable within 60 days of April 1, 2011

(9) Excludes shares held by Summit Partners. Mr. Carroll is a member of the general partner of Summit Partners L.P. and as a result may be deemed to beneficially own the shares owned by Summit Partners. Mr. Carroll disclaims ownership of the shares held by Summit Partners, except to the extent of his pecuniary interest therein.

(10) Excludes shares held by Summit Partners. Mr. Kardwell is a principal of Summit Partners L.P. and as a result may be deemed to beneficially own the shares owned by Summit Partners. Mr. Kardwell disclaims ownership of the shares held by Summit Partners, except to the extent of his pecuniary interest therein.

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EQUITY COMPENSATION PLANS

The following table gives information as of December 31, 2010 about the common stock that may be issued under all of our existing equity compensation plans.

	(a)	(b)		(c)
Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options (1)	Weighted Average Exercise Price of Outstanding Options (2)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity Compensation Plans Approved by Stockholders (3)	1,659,070	$	3.29	3,751,732
Equity Compensation Plans Not Approved by Stockholders	296,723	3.25		N/A
Total	1,955,793	$	3.28	3,751,732

(1) Includes shares issuable pursuant to the exercise of stock options.

(2) Calculation of weighted average exercise price of outstanding awards includes stock options, which are exercisable for “net” shares of common stock for no consideration. The weighted average exercise price of outstanding stock options was $3.28.

(3) Consists of our 2005 Equity Incentive Plan and 2010 Fortegra Financial Corporation Omnibus Incentive Plan.

EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion & Analysis (“CD&A”) describes how we use different elements of compensation to achieve the objectives of our executive compensation program and how we determined the amounts of each component of total compensation paid to our named executive officers in 2010. This information should be read in conjunction with the data and associated narrative provided in the Summary Compensation Table and other tables following this CD&A.

Our company completed its initial public offering on December 16, 2010 and immediately following the offering constituted a new Compensation Committee formed entirely of independent directors. The newly constituted Compensation Committee met once in 2011 and is assessing all aspects of the company's compensation practices.  As a result, the existing compensation framework is attributable to the work of the Compensation Committee prior to the initial public offering.  The committee expects its initial compensation assessment to be completed in mid-2011.  

Named Executive Officers

For 2010, our named executive officers were:

• Richard S. Kahlbaugh, Chairman and Chief Executive Officer;

• Walter P. Mascherin, Senior Executive Vice President and Chief Financial Officer since October 1, 2010;

• Michael Vrban, Senior Vice President and Financial Executive of Payment Protection and our Acting Chief Financial Officer until October 1, 2010;

• W. Dale Bullard, Executive Vice President and Chief Marketing Officer;

• Robert S. Fullington, Executive Vice President Strategic Initiatives and Acquisitions

• Daniel A. Reppert, Executive Vice President and President, Bliss & Glennon; and

• Nicholas Santoro, our former Chief Financial Officer who resigned in April 2010.

Principles of Our Executive Compensation Program

Our executive compensation program is based on the following six tenets:

• Accountability for Business Performance.  Compensation should be tied to our financial performance to hold executives accountable for their contributions to our performance as a whole. Compensation should also incentivize our executives to manage our business to meet our short- and long-range objectives.

• Accountability for Individual Performance.  Compensation should be tied to individual performance to encourage and reflect individual contributions to our overall performance. In addition to individual performance, as appropriate we also consider the performance of the businesses and responsibility areas that an individual oversees.

• Alignment with Stockholder Interests.  To align the interests of our executives with those of our stockholders, equity compensation should represent an important component of the compensation program. Equity awards motivate our executives to increase stockholder value and reward them when stockholder value increases.

• Balance.  Compensation should balance short-term versus long-term incentives and awards, cash and equity components, and fixed and variable compensation in ways that we believe are most appropriate to incentivize the achievement of our performance objectives, align the interests of our executives with those of our stockholders and mitigate risks.

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• Fair and Equitable Compensation.  The total compensation program should be fair and equitable to both our executive officers and our stockholders. Compensation levels for each individual should also be fair relative to the compensation paid to other professionals in our organization.

• Competition.  Compensation should reflect the competitive insurance and financial services marketplace, so we can attract, motivate and retain talented executives whose knowledge skills and performance are critical to our success.

How Compensation Decisions are Made

Our compensation committee reviews and approves the compensation of our named executive officers and oversees and administers our executive compensation programs and initiatives.

To consider and determine the appropriate level of compensation for our Chief Executive Officer, the compensation committee meets outside the presence of all of our named executive officers. Our Chief Executive Officer does not have a role in the determination of his own compensation.

Before determining the compensation levels for all other named executive officers, the compensation committee considers the recommendations of our Chief Executive Officer. The chairman of the compensation committee or the entire compensation committee meets with our Chief Executive Officer to discuss those recommendations. The compensation committee then determines the appropriate level of compensation for those named executive officers.

The compensation committee did not engage any consultants in 2010. The compensation committee has engaged Steven Hall & Partners, a nationally recognized executive compensation consultant, to assist it in the execution of its duties for 2011.

Components of Our Executive Compensation Program

Our executive compensation program currently consists of:

• base salary;

• annual incentive awards paid in cash and linked to corporate performance as set forth by the compensation committee or board of directors;

• periodic equity awards under our equity incentive plans;

• deferred compensation provided to certain executives; and

• other executive benefits and perquisites.

We combine these elements in order to formulate compensation packages that provide competitive pay, reward the achievement of financial, operational and strategic objectives and align the interests of our named executive officers and other senior personnel with those of our stockholders.

Our compensation approach is tied to our stage of development. We expect that the specific direction, emphasis and components of our executive compensation program will continue to evolve.

Base Salary

Given the fact that we were privately owned, historically, the primary component of compensation for our executives was base salary. We believe that the base salary is required in order to provide our named executive officers with a stable income stream that is commensurate with their responsibilities and competitive market conditions.

Our compensation committee increases the base salaries paid to our named executive officers, based on:

• our performance relative to the annual financial objectives set for us;

• our expectations as to the performance and contribution of such named executive officer and our judgment as to his potential future value to us;

• our knowledge of the competitive factors within the industries in which we operate;

• the job responsibilities of the named executive officer; and

• the background and circumstances of the named executive officers, including experience and skill.

Historically, we have not applied specific formulas to set the base salary of our Chief Executive Officer, nor have we sought to benchmark his base salary against similarly situated companies. In 2010, before making his recommendations for base salaries for the other named executive officers to the compensation committee, our Chief Executive Officer reviewed publicly available information of companies operating in similar industries and geographies.

As of January 1, 2010, Mr. Kahlbaugh's base salary was $380,000 which was increased on June 1, 2010 to $450,000 in recognition of his responsibilities as our President and Chief Executive Officer; for the fiscal year 2010, Mr. Mascherin's base salary was

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$285,000; Mr. Vrban's base salary was $215,000; Messrs. Bullard's and Fullington's base salaries were $255,000; and Mr. Reppert's base salary was $250,000.

Annual Incentive Awards

We believe that annual incentive awards focus our named executive officers' efforts and reward them for annual results of operations that help create value for our stockholders. For 2010, our Chief Executive Officer's annual incentive award was tied exclusively to an adjusted EBITDA target set by our Board of Directors. For our other named executive officers, annual incentive awards in 2010 were tied to the achievement of adjusted EBITDA targets and such named executive officer's achievement of individual annual performance objectives recommended by our Chief Executive Officer and approved by our Board of Directors.

The following briefly outlines the individual annual performance objectives for each of the named executive officers, other than our Chief Executive Officer for 2010:

• Michael Vrban.  Mr. Vrban's individual annual performance objectives included: (i) finalization of monthly results by a specified date; (ii) satisfactory audits for the prior three (3) fiscal years; and (iii) completion of the Company's initial public offering in 2010.

• W. Dale Bullard.  Mr. Bullard's individual annual performance objectives included: (i) the successful acquisition of a target at a purchase price less than a specified EBITDA multiple; and (ii) such target's achievement of a specified EBITDA goal.

• Robert S. Fullington.  Mr. Fullington's individual annual performance objectives included, with respect to our Consecta brand, achievement of: (i)  $23.4 million in net revenue; (ii) $10 million in sales; (iii) expenses of $12.4 million; (iv) adjusted EBITDA of $11 million; and (v) EBITDA margin of 46.1%.

• Daniel A. Reppert.  Mr. Reppert's individual annual performance objectives included, with respect to our Bliss & Glennon brand, achievement of: (i) $27.6 million in net revenue; (ii) $20.3 million in expenses; (iii) $7.3 million in adjusted EBITDA; and (iv) EBITDA margin of 26.4%.

In the fiscal year ended December 31, 2010, we did not meet the target adjusted EBITDA of $40.6 million. Accordingly, the compensation committee determined in December 2010 not to pay any cash bonus to our named executive officers with respect to fiscal 2010 performance. Target and maximum performance amounts for named executive officers for 2011 have been established. The performance amounts are consistent with those set forth below for 2010 and are based on both corporate and individual performance objectives. The objectives are challenging, but attainable.

Target and actual cash incentive awards for each named executive officer, other than Mr. Mascherin, who was not eligible for a bonus, for the fiscal year ended December 31, 2010, were as follows:

Named Executive Officer	Target Annual Incentive Award		Actual Annual Incentive Award
Richard S. Kahlbaugh	$	225,000	$	—
Michael Vrban	80,625		—
W. Dale Bullard	95,625		—
Robert Fullington	95,625		—
Daniel A. Reppert	93,750		—

Our Board of Directors may exercise discretion in awarding cash performance bonuses. The Board of Directors did not exercise this discretion in 2010, except that in 2010 Mr. Bullard was awarded a special bonus of $40,000 in recognition of his work on corporate transactions. Each named executive officer received a holiday bonus of $1,000 (net of taxes) which is included in the “Bonus” column of the Summary Compensation Table.

Deferred Compensation

Under their respective employment agreements, Messrs. Bullard and Fullington are also eligible to receive a deferred bonus award that is paid in accordance with their respective deferred compensation agreements. The deferred bonus award is granted on or before May 1 of each year following the year we achieve our annual EBITDA target. Any deferred bonus awarded to each of Messrs. Bullard and Fullington is paid to a trust account that was set up pursuant to their respective deferred compensation agreements and deferred compensation trust agreements. See “-Nonqualified Deferred Compensation.” In 2010, each of Messrs. Bullard and Fullington were not entitled to a deferred bonus award because the company failed to meet its corporate performance target.

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Mr. Kahlbaugh also had a deferred compensation agreement prior to 2010. The deferred compensation agreements provide for certain payments from the trust upon the occurrence of retirement, death or termination upon a change of control. See “- Potential Payments upon Termination or Change of Control.”

Long-Term Equity-Based Compensation

We believe that our long-term performance is fostered by a compensation program that compensates named executive officers through the use of equity-based awards, such as stock options, restricted stock awards and other rights to receive compensation based on the value of our equity. We also believe that when our named executive officers possess an ownership interest in us, they have a continuing stake in our long-term success.

In 2010, Messrs. Kahlbaugh, Bullard and Fullington were awarded restricted stock pursuant to our 2010 Omnibus Incentive Plan and related restricted stock award agreements. The restricted stock will vest, if at all, when the annual EBITDA target of $36.5 million is met for our Payment Protection and BPO businesses as determined by our Board of Directors.

In 2010, Mr. Mascherin was awarded options to purchase 88,268 shares under our 2010 Omnibus Incentive Plan. Certain of our named executive officers currently own outstanding options that were issued under our 2005 Equity Incentive Plan, in addition to options granted outside of such plans. All outstanding unvested options granted under the 2005 Equity Incentive Plan, as well as the options granted outside of the plans, will be fully vested on July 31, 2011. See “- Outstanding Equity Awards at Fiscal Year-End.” Additionally, unvested options granted under this plan become fully vested and exercisable upon the occurrence of certain change of control events. See “- Potential Payments upon Termination or Change of Control.” No future options will be granted under the 2005 Equity Incentive Plan. All of our outstanding options are subject to certain forfeiture rights contained within each individual stock option agreement. Generally, the stock option agreements provide for termination of the option upon the earliest of certain events to occur including: (i) the term of the option; (ii) one or two years following the executive's termination due to death or disability; (iii) one year following the executive's termination without cause or for good reason; (iv) three months following the executive's retirement; or (v) the date the executive voluntarily terminates his employment or is terminated with cause.

Retirement Benefits

We offer all full-time employees the opportunity to participate in a 401(k) plan. The purpose of our 401(k) plan is to provide employees with an incentive to make regular savings in order to provide additional financial security during retirement. Our 401(k) plan provides that we may match an employee's contribution, up to an employee contribution of 5% of salary. Our employer match was suspended commencing in August 2010. Our named executive officers participate in this 401(k) plan on the same basis as all of our other participating employees.

Other Executive Benefits and Perquisites

We provide to all eligible employees, including our named executive officers, insurance coverage, including, medical, dental and group life insurance plans and programs. Each named executive officer also receives an executive medical reimbursement plan and an automobile allowance under his respective employment agreement, which is consistent with industry practice.

Employment Agreements and Termination and Change of Control Benefits

We have employment agreements with each of our named executive officers. We entered into employment agreements with Messrs. Kahlbaugh, Bullard and Fullington in connection with our acquisition by entities affiliated with Summit Partners. In October 2010, we entered into an employment agreement with Mr. Mascherin. We also entered into employment agreements with Messrs. Vrban and Reppert on January 1, 2009. In November 2010, Mr. Kahlbaugh's employment agreement was amended to provide for additional benefits. See Employment Agreements on page 27.

The primary purpose of the agreements is to establish the terms of employment and to protect both us and the executive. We are provided with reasonable protections that the executive will perform at acceptable levels and will not compete with or recruit employees from us during or after the termination of employment. The executive is provided financial protection in the event of certain reasons for termination of employment in recognition of the executive's professional career and a forgoing of present and future career options. The employment agreements provide for severance payments in the event of certain categories of termination. See “- Potential Payments upon Termination or Change of Control” and “- Employment Agreements.”

Risk Review

As part of its oversight of our executive compensation program, our compensation committee considers the impact of our compensation program on our risk profile. As part of this review, the committee reviews all of our compensation policies and procedures, including the incentives that they create, as well as factors that may reduce the likelihood of excessive risk taking to determine whether they present a significant risk to us. The committee also considers the accounting and tax impact to the company and executives of compensation decisions. Based on this review, we have concluded that our compensation policies and procedures

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are not reasonably likely to have a material adverse effect on us. 

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors oversees the compensation program of Fortegra Financial Corporation on behalf of the Board. In fulfilling its oversight responsibilities, the committee reviewed and discussed with management the above Compensation Discussion and Analysis included in this proxy statement.

In reliance on the review and discussion referred to above, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Fortegra's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and its proxy statement on Schedule 14A to be filed in connection with the company's 2011 Annual Meeting of Stockholders, each of which has been or will be filed with the United States Securities and Exchange Commission.

This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such acts. This report is provided by the following independent directors, who constitute the committee:

Alfred R. Berkeley, III, Chair

Francis M. Colalucci

Frank P. Filipps

Summary Compensation Table

The following table and accompanying footnotes provide information regarding compensation earned, held by, or paid to, individuals holding the positions of Chief (Principal) Executive Officer and Chief (Principal) Financial Officer throughout 2010, the three most highly compensated of our other executive officers who served throughout the year. We refer to these executive officers as our named executive officers. In accordance with SEC rules, the following table provides information with respect to 2010 and 2009 compensation. Messrs. Mascherin and Santoro were not employees in 2009; therefore, information for 2009 compensation is not included.

	Fiscal  Year	Salary ($) (1)		Bonus ($) (2)		Stock Awards ($) (3)		Option Awards ($) (4)		Non-Equity Incentive Plan Compensation($) (5)		All Other Compensation ($) (6)		Total ($)
Name and Principal Position
Richard S. Kahlbaugh, Chairman, President and Chief Executive Officer	2010	$	420,385	$	1,015	$	50,222	$	—	$	—	$	44,001	$	515,623
	2009	379,615		76,346		—		—		230,000		45,458		731,419
Walter P. Mascherin, Senior Executive Vice President and Chief Financial Officer (7)	2010	72,346		1,083		—		280,720		—		8,578		362,727
Michael Vrban, Senior Vice President and Financial Executive of Payment Protection (8)	2010	215,000		1,015		—		—		—		36,562		252,577
	2009	223,269		24,261		—		—		47,085		33,882		328,497
W. Dale Bullard, Executive Vice President and Chief Marketing Officer	2010	255,000		41,015		25,117		—		—		35,137		356,269
	2009	264,807		1,552		—		—		52,294		42,809		361,462
Robert Fullington, Executive Vice President	2010	255,000		1,015		25,117		—		—		27,885		309,017
	2009	264,807		4,217		—		—		82,129		36,007		387,160
Daniel A. Reppert, Executive Vice President and President, Bliss & Glennon	2010	250,000		1,015		—		—		—		39,448		290,463
	2009	259,615		12,565		—		—		38,781		37,807		348,768
Nicholas Santoro, Retired Chief Finanancial Officer (9)	2010	46,154		—		—		—		—		2,000		48,154

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(1) The amounts reported in this column reflect the base salaries paid in 2010 and 2009 to each named executive officer. Forecasted annual salaries are generally based on 26 bi-weekly pay periods. In the year ended December 31, 2009, our named executive officer's were paid bi-weekly pay for 27 pay periods.

(2) “Bonus” represents discretionary cash amounts awarded by our Board of Directors to named executive officers. In 2009, Messrs. Kahlbaugh, Vrban, Bullard, Fullington and Reppert earned $50,000, $2,915, $206, $2,871 and $11,219, respectively, as a discretionary bonus above the amounts they earned under our non-equity incentive plan compensation and Messrs. Kahlbaugh and Vrban earned a one-time 2009 payment of $25,000 and $20,000, respectively, in connection with a significant financial transaction. In 2010 and 2009, as applicable, each of Messrs. Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert earned additional bonus compensation of approximately $1,015 for the holidays. Other bonus amounts paid in each year were made under each executive's employment agreement and are included in the column “Non-Equity Incentive Plan Compensation.”

(3) Consists of restricted stock that vests, if at all, when the annual EBITDA target of $36.5 million is met for our Payment Protection and BPO businesses as determined by our Board of Directors.

(4) Consists of option to purchase 88,268 shares of the Company's common stock awarded to Mr. Mascherin in connection with his joining the company. One quarter of the options vested on December 16, 2010. The remaining shares subject to the option vest ratably on a monthly basis over the 36 months thereafter and will vest in full as of December 31, 2013.

(5) Reflects annual performance bonuses earned by the named executive officers for the year ended December 31, 2009 based upon the named executive officers' respective base salaries as of December 31, 2009. For Messrs. Kahlbaugh, Bullard and Fullington, such amount includes $40,000, $15,000 and $15,000, respectively, earned in 2009, pursuant to the deferred compensation arrangements. Such amounts are payable in the following year once the respective year's financial statements have been audited. See “- Compensation Discussion and Analysis - Components of our Executive Compensation Program - Deferred Compensation.” Mr. Kahlbaugh elected to take his $40,000 bonus as a cash payment rather than as deferred compensation.

(6) This column also includes the following:

Name	Year	401(k) Match(a)		Allowance(b)		Plan(c)		Benefits(d)		Total
Richard S. Kahlbaugh	2010	$	13,231	$	13,200	$	8,385	$	9,185	$	44,001
	2009	9,846		13,200		13,317		9,095		45,458
Walter P. Mascherin	2010	—		2,000		—		6,578		8,578
Michael Vrban	2010	7,029		12,000		8,489		9,044		36,562
	2009	6,202		12,000		6,543		9,137		33,882
W. Dale Bullard	2010	8,336		13,200		4,416		9,185		35,137
	2009	7,356		13,200		13,187		9,066		42,809
Robert S. Fullington	2010	8,336		13,200		2,678		3,671		27,885
	2009	7,356		13,200		11,051		4,400		36,007
Daniel A. Reppert	2010	8,173		12,000		10,111		9,164		39,448
	2009	7,212		12,000		9,514		9,081		37,807
Nicholas Santoro	2010	—		2,000		—		—		2,000

(a) Reflects amounts of contributions paid to such executive under 401(k) matching for eligible employees.

(b) Represents the automobile allowance payable under such executive's employment agreement.

(c) Represents the amount of reimbursement for eligible expenses not covered by available group health, dental or vision plans.

(d) Reflects amounts paid to various vendors on behalf of our named executive officer's for insurance coverage such as health, dental, vision, life, accidental death and dismemberment, long term care, and short term and long term disability.

(7) Mr. Mascherin became our Chief Financial Officer effective on October 1, 2010.

(8) Mr. Vrban served as our Acting Chief Financial Officer prior to October 1, 2010 and is currently our Senior Vice President for Finance Operations for Payment Protection.

(9) Mr. Santoro served as our Chief Financial Officer until his resignation in April 2010.

Reported amounts in the table above represent the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. The Company measures stock-based compensation related to options using the calculated value method. Under that method, we estimate the fair value of each option on the grant date using the Black-Scholes valuation model. We used historical data to estimate expected employee behavior related to stock award exercises and forfeitures. Since there is not sufficient historical market experience for shares of our stock, we have chosen to estimate its volatility, by using the average volatility of our peers. Expected dividends are based on the assumption that no dividends were expected to be distributed in the near future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the options. Assumptions related to stock option awards are included under the heading “Stock-Based Compensation” on pages 38-40 of our Annual Report on Form 10-K for the period ended December 31, 2010.

2010 Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards for the year ended December 31,

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2010 with respect to the named executive officers.

Grants of Plan Based-Awards
Name	Grant Date	Threshold($)		Target ($)		Maximum($)		All Other Stock Awards: Number of Shares of Stock (#)	All Other Option Awards: Number of Securities Underlying Options (#)(3)	Exercise or Base Price of Options Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards ($)
Richard S. Kahlbaugh
Restricted Stock(1)	12/16/2010	$	—	$	—	$	—	4,545	—	$	—	$	50,222
Cash Incentive Award(2)	n/a	—		225,000		450,000		—	—	—		—
Walter P. Mascherin
Options	12/16/2010	—		—		—		—	88,268	11.00		280,720
Cash Incentive Award(2)	n/a	—		—		—		—	—	—		—
Michael Vrban
Cash Incentive Award(2)	n/a	—		80,625		107,500		—	—	—		—
W. Dale Bullard
Restricted Stock(1)	12/16/2010	—		—		—		2,273	—	—		25,117
Deferred Bonus(4)	n/a	—		15,000		30,000		—	—	—		—
Cash Incentive Award(2)	n/a	—		95,625		127,500		—	—	—		—
Robert S. Fullington
Restricted Stock(1)	12/16/2010	—		—		—		2,273	—	—		25,117
Deferred Bonus(4)	n/a	—		15,000		30,000		—	—	—		—
Cash Incentive Award(2)		—		95,625		127,500		—	—	—		—
Daniel A. Reppert
Cash Incentive Award(2)	n/a	—		93,750		125,000		—	—	—		—
Nicholas Santoro
Cash Incentive Award	n/a	—		—		—		—	—	—		—

(1) Reflects restricted stock grant that will vest, if at all, when the annual EBITDA target of $36.5 million is met for our Payment Protection and BPO businesses as determined by our Board of Directors.

(2) Reflects annual cash performance awards as estimated payments to the named executive officers under our non-equity incentive plan. The amounts in the “threshold,” “target” and “maximum” columns reflect a percentage of base salary for such named executive officer, which we discussed above under “- Compensation Discussion and Analysis - Components of our Executive Compensation Program - Cash Incentive Awards.” Any level of our performance which falls between two specific points shall entitle the named executive to receive a percentage of base salary determined on a straight-line basis between two such points. If actual performance in any fiscal year does not exceed the “target,” then no cash award is granted to a named executive officer for that fiscal year, except for the Chief Executive Officer who may be awarded a discretionary bonus if such target is not met.

(3) One quarter of the options vested on December 16, 2010. The remaining shares subject to the option vest ratably on a monthly basis over the 36 months thereafter and will vest in full as of December 31, 2013.

(4) Reflects annual deferred compensation awards as estimated payments to Messrs. Bullard and Fullington under deferred compensation arrangements. The amounts in the “threshold,” “target” and “maximum” columns reflect a certain bonus award amount based on the achievement of certain adjusted EBITDA targets, which we discussed above under “- Compensation Discussion and Analysis - Components of our Executive Compensation Program - Deferred Compensation.” If actual performance in any fiscal year does not exceed the “target,” then no deferred bonus is granted to a named executive officer for that fiscal year.

For additional information, see “- Employment Agreements.”

Outstanding Equity Awards at Fiscal Year-

The following table sets forth certain information with respect to outstanding equity awards held by our named executive officers as of December 31, 2010.                     

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	Options Awards					Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)		Option Expiration Date	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1)
Richard S. Kahlbaugh
Options	262,500	—	$	3.03	11/17/2015	—	$	—
Options(2)	238,044	34,006	3.25		10/24/2017	—	—
Common Stock (3)						4,545	50,222
Walter P. Mascherin
Options(4)	22,067	66,201	11.00		12/15/2020	—	—
Michael Vrban
Options(5)	54,460	9,301	3.25		10/24/2017	—	—
W. Dale Bullard
Options	27,300	—	1.55		3/8/2011	—	—
Options	262,500	—	3.03		11/17/2015	—	—
Options(2)	197,129	28,164	3.25		10/24/2017	—	—
Common Stock (3)						2,273	25,117
Robert S. Fullington
Options	231,000	—	1.55		3/8/2011	—	—
Options	262,500	—	3.03		11/17/2015	—	—
Options(2)	168,694	28,164	3.25		10/24/2017	—	—
Common Stock (3)						2,273	25,117
Daniel A. Reppert
Options(5)	54,460	9,301	3.25		10/24/2017	—	—
Nicholas Santoro
Options(5)	—	—	—		—	—	—

(1)    Market value of unvested shares is based on December 31, 2010 closing price of $11.05.

(2)    Of the shares subject to the option, 25% vested on June 20, 2008. The remaining shares subject to the option vested ratably on a monthly basis over the 36 months thereafter and will vest in full as of June 30, 2011.

(3)    Assuming the performance target is met, unvested restricted stock will vest in full at such time.

(4)    Of the shares subject to the option, 25% vested on December 16, 2010. The remaining shares subject to the option vested ratably on a monthly basis over the 36 months thereafter and will vest in full as of December 31, 2013.

(5)    Of the shares subject to the option, 25% vested on July 25, 2008. The remaining shares subject to the option vested ratably on a monthly basis over the 36 months thereafter and will vest in full as of July 31, 2011.

Option Exercises

The following table sets forth certain information with respect to option exercises during the year ended December 31, 2010 by our named executive officers. Only Mr. Fullington exercised options in 2010.

	Option Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)(1)
Robert S. Fullington	44,185	$	369,221

⁽¹⁾  The aggregate dollar value realized on exercise is the difference between the market price of shares of common stock on the exercise date and the $1.55 per share exercise price of the options with respect to the 15,750 shares and $3.25 with respect to 28,435 shares, multiplied by the number of shares subject to the applicable option exercised.

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Nonqualified Deferred Compensation

Each of Messrs. Bullard and Fullington are entitled to deferred compensation pursuant to their respective employment agreements. Mr. Kahlbaugh also was entitled to deferred compensation prior to 2010 under his employment agreement. See “- Compensation Discussion and Analysis - Components of Our Executive Compensation Program - Deferred Compensation” above. Earnings on the nonqualified deferred compensation are not considered above market or preferential. 

The following table presents information regarding nonqualified deferred compensation to the applicable named executive officers for the year ended December 31, 2010.

Name	Registrant Contributions in Last FY ($)(1)		Aggregate Earnings in Last FY ($)(2)		Aggregate Withdrawals/ Distributions ($)	Aggregate Balance as Last FYE ($)
Richard S. Kahlbaugh	$	—	$	30,862	n/a	$	107,164
W. Dale Bullard	15,000		119,812		n/a	426,099
Robert S. Fullington	15,000		15,917		n/a	126,844

⁽¹⁾  Amounts in this column reflect deferrals of annual cash awards earned in 2009 and deferred in 2010.

⁽²⁾  All or a portion of a named executive officer's plan assets may be held in our common stock. The fair market value of such stock is the closing price on December 31, 2010 of $11.05 per share. Each named executive officer may credit his investment gains and/or losses against the “Vanguard Index - Trust 500 Portfolio” or a similar index fund. Gains and/or losses are based on the actual investment experience of the underlying investment. We may provide alternative “deemed” investment vehicles from time to time and permit the named executive officers to select which “deemed” investment vehicle against which they will credit their investments.

Potential Payments upon Termination or Change of Control

The information below describes and quantifies certain compensation that would become payable under each named executive officer's employment agreement if, as of December 31, 2010, his employment had been terminated. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event. Each of Messrs. Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert are entitled to termination payments and benefits pursuant to their employment agreements. In the event of death or physical or mental disability rendering any of these executives substantially unable to perform their duties in any material respect for a period of at least 180 days out of any 12-month period, their employment agreements will automatically terminate. In such instances, Messrs. Kahlbaugh, Mascherin, Vrban and Reppert will be entitled to receive: (i) accrued but unused vacation pay and unpaid base salary; (ii) any payments and benefits to which he is entitled under any of our arrangements or plans; (iii) a pro-rated annual bonus, based on the executive's date of termination, for the current fiscal year and any unpaid annual bonus for the prior fiscal year; and (iv) continued coverage by the same medical, dental and life insurance coverages as in effect immediately prior to termination for a period of one year. If Mr. Bullard or Mr. Fullington is terminated due to death or disability, each is entitled to receive: (i) accrued but unused vacation pay; (ii) unpaid base salary; (iii) any unpaid annual bonus for the prior fiscal year; and (iv) any payments and benefits to which he is entitled under any of our arrangements or plans. In the case of death, each of the named executive officer's base salary will continue through the end of the month in which death occurs. In addition, each of Messrs. Kahlbaugh, Bullard and Fullington will be entitled to receive his deferred bonus from the prior year.

If any executive is terminated for cause, or if any executive voluntarily terminates his employment without good reason, the executive is entitled to receive only his unpaid base salary, accrued but unused vacation pay, his prior year unpaid annual bonus and any payments and benefits to which he is entitled under any of our arrangements or plans. In addition, each of Messrs. Kahlbaugh, Bullard and Fullington will be entitled to receive his deferred bonus from the prior year.

If any executive's employment is terminated without cause or by the executive for good reason, the executive is entitled to receive: (i) provided he does not violate the non-compete and non-solicitation clauses in his employment agreement, severance pay equal to the executive's monthly base salary at the time of termination for 12 months from the date of termination (or in the case of Messrs. Bullard and Fullington, 18 months from the date of termination); (ii) in the case of Messrs. Kahlbaugh, Mascherin, Vrban and Reppert, a pro-rated annual bonus based on the executive's date of termination, for the current fiscal year and unpaid base salary and any unpaid annual bonus for the prior fiscal year; (iii) paid vacation accrued up until the date of termination; and (iv) continued coverage by the same medical, dental and life insurance coverages as in effect immediately prior to the termination of his employment and continuing until his severance pay expires or he commences new employment and becomes eligible for comparable benefits. In addition, each of Messrs. Kahlbaugh, Bullard and Fullington will be entitled to receive his deferred bonus from the prior year.

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Under each executive's employment agreement, “cause” generally means that we have determined that any or more than one of the following has occurred: (i) the executive has been convicted of or has pleaded guilty or nolo contendere to any felony or any crime involving moral turpitude or misrepresentation; (ii) the executive failed to carry out any reasonable and lawful instructions and this failure or refusal continued for a period of ten days following written notice; (iii) the executive violated any of the various non-compete clauses in his employment agreement; (iv) the executive committed fraud, embezzlement, misappropriation of our funds, misrepresentation, breached his fiduciary duty or engaged in any other material act of dishonesty against us; or (v) the executive engaged in any gross or willful misconduct resulting in a substantial loss to us or substantial damage to our reputation.

Under each executive's employment agreement, “good reason” generally means (i) assignment to the executive of any duties inconsistent in any substantial respect with his position, authority or responsibilities as contemplated in his employment agreement, or any duties which are illegal or unethical, subject to a 30-day cure period after notice has been given; (ii) any material failure to pay the compensation or benefits set out in his employment agreement; or (iii) relocation of the executive's primary place of employment to a location not within a 50-mile radius of Jacksonville, Florida.

In addition, each of Messrs. Kahlbaugh, Bullard and Fullington are entitled to payments pursuant to their deferred compensation agreements. In the event of death during their employment and the achievement of certain adjusted EBITDA targets, we are obligated to contribute the executive's deferred bonus award for the prior fiscal year to the executive's deferred compensation trust account. See “- Compensation Discussion and Analysis - Components of Our Executive Compensation Program - Deferred Compensation.” Additionally, the designated recipients of Messrs. Kahlbaugh, Bullard and Fullington are entitled to a lump sum payment of the account balance of the deferred compensation trust account. Upon a change of control and termination without cause or with good reason within 12 months of the change of control, Messrs. Kahlbaugh, Bullard and Fullington are entitled to a lump sum payment of the account balance of their respective deferred compensation trust account. Upon any other termination of employment, Messrs. Kahlbaugh, Bullard and Fullington are entitled to the balance of their respective deferred compensation trust account paid out in a lump sum or 120 substantially equal monthly installments at their respective normal retirement date. These payments are conditioned upon the executive rendering reasonable business consulting and advisory services as our Board of Directors may require.

Pursuant to the stock options we issued under our 2005 Equity Incentive Plan, and outside of our existing plans to Messrs. Kahlbaugh, Vrban, Bullard, Fullington and Reppert, all unvested options immediately vest and become exercisable upon a transaction where (i) a person of group of persons, other than Summit Partners or certain permitted transferees, owns more than 50% of our securities or (ii) a sale of all or substantially all of our assets. In addition, our compensation committee may provide for: (i) continuation of such options by us or the surviving company; (ii) substitution of the options by the surviving company with substantially the same terms; (iii) upon written notice, provide that all outstanding options must be exercised within 15 days or such other determined period; or (iv) cancellation of all or any portion of outstanding options for fair value.

Furthermore, the restricted stock we issued to Messrs. Kahlbaugh, Bullard and Fullington under our 2010 Omnibus Incentive Plan will immediately vest in full if we experience a change of control as defined in the 2010 Omnibus Incentive Plan. Also, the options we granted to Mr. Mascherin under our 2010 Omnibus Incentive Plan will vest in full if Mr. Mascherin is terminated without cause or he terminates his employment for good reason within the one-year period following a change of control. A change of control under our 2010 Omnibus Incentive Plan is generally deemed to occur when (i) any one person or group acquires on an arms length basis ownership of stock of the company that, together with stock held by such person or group, is more than 50% of the total fair market value or total voting power of our common stock; (ii) on the date that the individuals who constituted the Board as of the effective date (the “Incumbent Board”) of the plan no longer to constitute at least a majority of the Board, provided, that if the election, or nomination for election by our stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, such new director shall be considered a member of the Incumbent Board; and (iii) a change in the ownership of a substantial portion of our assets occurs on the date that any one person or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets from us that have a total gross fair market value of more than 50% of the total gross fair market value of all of our assets immediately prior to such acquisition or acquisitions.

The following table summarizes the potential payments to Messrs. Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert assuming that such events occurred as of December 31, 2010:

Name	Severance Amounts ($)	Bonus ($)	Deferred Compensation Bonus ($)	Deferred Compensation Account(1)(2) ($)	Paid Vacation ($)(3)	Accelerated Vesting of Options ($)(4)	Accelerated Vesting of Restricted Stock(5) ($)	Benefit Continuation ($)	Total ($)
Richard S. Kahlbaugh

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Name	Severance Amounts ($)		Bonus ($)		Deferred Compensation Bonus ($)		Deferred Compensation Account(1)(2) ($)		Paid Vacation ($)(3)		Accelerated Vesting of Options ($)(4)		Accelerated Vesting of Restricted Stock(5) ($)		Benefit Continuation ($)		Total ($)
Termination with cause or without good reason	$	—	$	—	$	—	$	—	$	34,615	$	—	$	—	$	—	$	34,615
Termination without cause or for good reason	450,000		—		—		—		34,615		—		—		17,570		502,185
Termination upon death or disability	—		—		—		107,164		34,615		—		—		17,570		159,349
Termination upon change of control(6)	450,000		—		—		107,164		34,615		265,247		50,222		17,570		924,818
Walter P. Mascherin
Termination with cause or without good reason	—		—		—		—		5,481		—		—		—		5,481
Termination without cause or for good reason	285,000		—		—		—		5,481		—		—		6,578		297,059
Termination upon death or disability	—		—		—		—		5,481		—		—		6,578		12,059
Termination upon change of control(6)	285,000		—		—		—		5,481		3,310		—		6,578		300,369
Michael Vrban
Termination with cause or without good reason	—		—		—		—		16,538		—		—		—		16,538
Termination without cause or for good reason	215,000		—		—		—		16,538		—		—		17,533		249,071
Termination upon death or disability	—		—		—		—		16,538		—		—		17,533		34,071
Termination upon change of control(6)	215,000		—		—		—		16,538		72,548		—		17,533		321,619
W. Dale Bullard
Termination with cause or without good reason	—		—		—		—		19,615		—		—		—		19,615
Termination without cause or for good reason	382,500		—		—		—		19,615		—		—		20,402		422,517
Termination upon death or disability	—		—		—		426,099		19,615		—		—		—		445,714
Termination upon change of control(6)	382,500		—		—		426,099		19,615		219,679		25,117		20,402		1,093,412
Robert S. Fullington

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Name	Severance Amounts ($)	Bonus ($)	Deferred Compensation Bonus ($)	Deferred Compensation Account(1)(2) ($)	Paid Vacation ($)(3)	Accelerated Vesting of Options ($)(4)	Accelerated Vesting of Restricted Stock(5) ($)	Benefit Continuation ($)	Total ($)
Termination with cause or without good reason	—	—	—	—	19,615	—	—	—	19,615
Termination without cause or for good reason	382,500	—	—	—	19,615	—	—	9,524	411,639
Termination upon death or disability	—	—	—	126,844	19,615	—	—	—	146,459
Termination upon change of control(6)	382,500	—	—	126,844	19,615	219,664	25,117	9,524	783,264
Daniel A. Reppert
Termination with cause or without good reason	—	—	—	—	19,231	—	—	—	19,231
Termination without cause or for good reason	250,000	—	—	—	19,231	—	—	19,275	288,506
Termination upon death or disability	—	—	—	—	19,231	—	—	19,275	38,506
Termination upon change of control(6)	250,000	—	—	—	19,231	72,548	—	19,275	361,054

(1) The amounts reported in the Deferred Compensation Bonus column reflect the deferred bonus award earned by such executive in 2010. See “- Compensation Discussion and Analysis - Components of Our Executive Compensation Program - Deferred Compensation.” The amounts reported in the Deferred Compensation Account column reflect a lump sum payment of the balance of such executive's deferred compensation trust account.

(2) The amounts reported in this column for termination upon a change of control are only applicable if, after a change of control, such executive was terminated without cause or by the executive for good reason. If such executive is terminated for any other reason, his deferred compensation account is paid out at his normal retirement date.

(3) The amounts reported in this column assume that no vacation by such executive has been taken for the year ended December 31, 2010.

(4) The amounts reported in this column reflect the aggregate dollar value of unvested stock options held by such executive on December 31, 2010 that would accelerate upon such change of control. In the case of Messrs. Kahlbaugh, Bullard, Fullington, Reppert and Vrban the aggregate dollar value is the difference between the closing value of shares of our common stock on December 31, 2010 of $11.05 and the $3.25 per share exercise price of the options, multiplied by the number of shares subject to the unvested option. In the case of Mr. Mascherin the aggregate dollar value is the difference between the closing value of shares of our common stock on December 31, 2010 of $11.05 and the $11.00 per share exercise price of the options, multiplied by the number of shares subject to the unvested option.

(5) The amounts reported in this column reflect the aggregate fair market value, based on the closing price of $11.05 of our common stock as of December 31, 2010, of unvested shares held by such executive on December 31, 2010.

(6) Assumes the executive is terminated without cause or for good reason in connection with such change of control.

Employment Agreements

We have entered into employment agreements with each of Mr. Kahlbaugh, our Chairman, President and Chief Executive Officer; Mr. Mascherin, our Senior Executive Vice President and Chief Financial Officer; Mr. Vrban, our Senior Vice President, Finance Executive for Payment Protection and Treasurer; Mr. Bullard, our Executive Vice President and Chief Marketing Officer; Mr. Fullington, our Executive Vice President, Strategic Initiatives; and Mr. Reppert, our Executive Vice President and President, Bliss & Glennon. Each agreement provides for a rolling three-year term of employment, with each agreement automatically renewing for an additional year upon every anniversary of the agreement, unless either party gives at least 90 days notice prior to the anniversary of the agreement that no extension is desired. If notice is given, the agreement will terminate three years from the anniversary of the agreement that next follows such notice. 

The salaries of Messrs. Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert were initially established pursuant to their respective employment agreements. Our compensation committee reviews the salary of Mr. Kahlbaugh annually and may, at its sole discretion, make any increases in his annual base salary, as it deems appropriate. Our Chief Executive Officer reviews and recommends changes to the salaries of Messrs. Mascherin, Vrban, Bullard, Fullington and Reppert annually and the compensation committee may, at its sole discretion, make any increases in any of their annual base salaries, as it deems appropriate. Each named executive officer is eligible to receive an annual performance bonus, periodic grants of long-term equity incentive awards and

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deferred compensation. See “- Compensation Discussion and Analysis - Components of Our Executive Compensation Program.” The employment agreements also provide that each executive is entitled to participate in any benefits plan comparable to our other executives, and to receive a monthly automobile allowance. Mr. Kahlbaugh is also entitled to reimbursements for reasonable medical, health physical fitness and wellness expenses, including such expenses incurred while traveling for business, and business entertainment expenses, including two golf club memberships. Messrs. Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert are entitled to certain benefits if their employment is terminated. See “- Potential Payments upon Termination and Change of Control” above.

Non-Competition and Non-Solicitation

Pursuant to their respective employment agreements, each of Messrs. Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert are subject to non-competition and non-solicitation clauses. Each executive has agreed not to engage or participate in, directly or indirectly, any business that offers products or provides related services and products or engages in any other business that we are engaged in or have taken steps to engage in prior to termination. Messrs. Kahlbaugh and Mascherin have agreed not to compete with us anywhere in the world for a period of 12 months after termination. Messrs. Vrban and Reppert have agreed not to compete with us in the United States for a period of 24 months after termination. Messrs. Bullard and Fullington have agreed not to compete with us anywhere in the world for a period of 18 months after termination. Mr. Bullard is also subject to the non-competition clauses contained in the merger agreement related to the Summit Partners Transactions. See “Certain Relationships and Related Person Transactions - Merger Agreement and Related Transactions.” However, in the event that Mr. Bullard is terminated without cause or voluntarily terminates his employment with good reason, the non-competition clauses in the merger agreement are no longer applicable.

Additionally, Messrs.  Kahlbaugh, Mascherin, Vrban, Bullard, Fullington and Reppert have agreed to not solicit or attempt to directly solicit any of our officers, directors, consultants or executives (other than immediate family members) to leave, unless such solicitation relates solely to a business that is not competitive with us. Messrs. Kahlbaugh, Vrban and Reppert have agreed to a non-solicitation period of 24 months; Messrs. Bullard and Fullington have agreed to a non-solicitation period of 18 months; Mr. Mascherin agreed to a non-solicitation period of 12 months.

2010 Omnibus Incentive Plan

We adopted our 2010 Omnibus Incentive Plan (the Omnibus Plan) in December 2010. The Omnibus Plan provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation. Directors and employees of us and our subsidiaries, as well as other individuals performing services for us, will be eligible for grants under the Omnibus Plan. The purpose of the Omnibus Plan is to provide incentives that will attract, retain and motivate highly competent officers, directors, employees and other service providers by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. The following is a summary of the material terms of the Omnibus Plan, but does not include all of the provisions of the Omnibus Plan.

Administration

The Omnibus Plan provides for its administration by the compensation committee of our Board of Directors or any committee designated by our Board of Directors to administer the Omnibus Plan. The committee is empowered to determine the form, amount and other terms and conditions of awards, clarify, construe or resolve any ambiguity in any provision of the Omnibus Plan or any award agreement and adopt such rules, forms, instruments and guidelines for administering the Omnibus Plan as it deems necessary or proper. All actions, interpretations and determinations by the committee or by our Board of Directors are final and binding.

Shares Available

The Omnibus Plan makes available an aggregate of 4,000,000 shares of our common stock, subject to adjustments. In the event that any outstanding award expires, is forfeited, canceled or otherwise terminated without the issuance of shares or is otherwise settled for cash, shares of our common stock allocable to such award, to the extent of such forfeiture, cancellation, expiration, termination or settlement for cash, shall again be available for the purposes of the Omnibus Plan. If any award is exercised by tendering shares of our common stock to us, either as full or partial payment, in connection with the exercise of such award under the Omnibus Plan or to satisfy our withholding obligation with respect to an award, only the number of shares of our common stock issued net of such shares tendered will be deemed delivered for purposes of determining the maximum number of shares of our common stock then available for delivery under the Omnibus Plan.

Eligibility for Participation

Members of our Board of Directors, as well as employees of, and service providers to, us or any of our subsidiaries and affiliates are eligible to participate in the Omnibus Plan. The selection of participants is within the sole discretion of the committee.

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Types of Awards

The Omnibus Plan provides for the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation, collectively, the “awards.” The committee will, with regard to each award, determine the terms and conditions of the award, including the number of shares subject to the award, the vesting terms of the award, and the purchase price for the award. Awards may be made in assumption of or in substitution for outstanding awards previously granted by us or our affiliates, or a company acquired by us or with which we combine.

Award Agreement

Awards granted under the Omnibus Plan shall be evidenced by award agreements (which need not be identical) that provide additional terms and conditions associated with such awards, as determined by the committee in its sole discretion; provided, however, that in the event of any conflict between the provisions of the Omnibus Plan and any such award agreement, the provisions of the Omnibus Plan shall prevail.

Options

An option granted under the Omnibus Plan will permit a participant to purchase from us a stated number of shares at an option price established by the committee, subject to the terms and conditions described in the Omnibus Plan, and such additional terms and conditions, as established by the committee, in its sole discretion, that are consistent with the provisions of the Omnibus Plan. Options shall be designated as either a nonqualified stock option or an incentive stock option. An option granted as an incentive stock option shall, to the extent it fails to qualify as an incentive stock option, be treated as a nonqualified option. The exercise price of an option granted under the Omnibus Plan may not be less than 100% of the fair market value of a share of our common stock on the date of grant, provided the exercise price of an incentive stock option granted to a person holding greater than 10% of our voting power may not be less than 110% of such fair market value on such date. The committee will determine the term of each option at the time of grant in its discretion; however, the term may not exceed ten years (or, in the case of an incentive stock option granted to a ten percent stockholder, five years).

Stock Appreciation Rights

A stock appreciation right entitles the holder to receive, upon its exercise, the excess of the fair market value of a specified number of shares of our common stock on the date of exercise over the grant price of the stock appreciation right. The payment of the value may be in the form of cash, shares of our common stock, other property or any combination thereof, as the committee determines in its sole discretion. Subject to the terms of the Omnibus Plan and any applicable award agreement, the grant price (which shall not be less than 100% of the fair market value of a share of our common stock on the date of grant), term, methods of exercise, methods of settlement, and any other terms and conditions of any stock appreciation right shall be determined by the committee. The term of a stock appreciation right may not exceed 10 years.

Restricted Stock

An award of restricted stock is a grant of a specified number of shares of our common stock, which are subject to forfeiture upon the occurrence of specified events. Each award agreement evidencing a restricted stock grant shall specify the period(s) of restriction, the number of shares of restricted stock subject to the award, the performance, employment or other conditions (including the termination of a participant's service whether due to death, disability or other cause) under which the restricted stock may be forfeited to the company and such other provisions as the committee shall determine. The committee may require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed. Unless otherwise determined by the committee and set forth in the award agreement, a participant holding restricted stock will not have the right to vote and will not receive dividends with respect to such restricted stock.

Other Stock-Based Awards

The committee, in its sole discretion, may grant awards of shares of our common stock and awards that are valued, in whole or in part, by reference to, or are otherwise based on the fair market value of, such shares (the “other stock-based awards”). Such other stock-based awards shall be in such form, and dependent on such conditions, as the committee shall determine, including, without limitation, the right to receive one or more shares of our common stock (or the equivalent cash value of such stock) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives. Subject to the provisions of the Omnibus Plan, the committee shall determine to whom and when other stock-based awards will be made, the number of shares of our common stock to be awarded under (or otherwise related to) such other stock-based awards, whether such other stock-based awards shall be settled in cash, shares of our common stock or a combination of cash and such shares, and all other terms and conditions of such awards.

Performance-Based Compensation

To the extent permitted by Section 162(m) of the Internal Revenue Code, or the Code, the committee is authorized to design any award so that the amounts or shares payable and distributable thereunder are treated as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code. The vesting, crediting and/or payment of performance-based compensation

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shall be based on the achievement of objective performance goals based on one or more of the following measures: (a) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (b) net income; (c) operating income; (d) earnings per share; (e) book value per share; (f) return on stockholders' equity; (g) expense management; (h) return on investment; (i) improvements in capital structure; (j) profitability of an identifiable business unit or product; (k) maintenance or improvement of profit margins; (l) stock price; (m) market share; (n) revenues or sales; (o) costs; (p) cash flow; (q) working capital; (r) return on assets; (s) return on stockholders' equity; (t) customer satisfaction; (u) measurable achievement in quality and compliance initiatives; (v) working capital; (w) debt; (x) business expansion; (y) objectively determinable measure of non-financial operating and management performance objectives; (z) stockholder returns, dividends and/or other distributions; (aa) operating efficiency or (bb) profit margin. Such measures may be used to measure our performance or the performance of any of our business units and may be used to compare our performance against the performance of a group of comparable companies, or a published index.

Transferability

Unless otherwise determined by the committee, an award shall not be transferable or assignable by a participant except in the event of his or her death (subject to the applicable laws of descent and distribution) and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against us or any of our subsidiaries or affiliates. Any permitted transfer of the awards to heirs or legatees of a participant shall not be effective to bind us unless the committee has been furnished with written notice thereof and a copy of such evidence as the committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of the Omnibus Plan.

Stockholder Rights

Except as otherwise provided in the applicable award agreement, a participant has no rights as a stockholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares. 

Adjustment of Awards

In the event of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares of our common stock, exchange of shares of our common stock, dividend in kind, extraordinary cash dividend, or other like change in capital structure (other than normal cash dividends) to our stockholders, or any similar corporate event or transaction, the committee, to prevent dilution or enlargement of participants' rights under the Omnibus Plan, shall substitute or adjust, in its sole discretion, the number and kind of shares that may be issued under the Omnibus Plan or under particular forms of awards, the number and kind of shares subject to outstanding awards, the option price, grant price or purchase price applicable to outstanding awards, the annual award limits, and/or other value determinations applicable to the Omnibus Plan or outstanding awards. 

Upon the occurrence of a change in control, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governing governmental agencies or national securities exchanges, or unless the committee shall determine otherwise in the award agreement, the committee is authorized (but not obligated) to make adjustments in the terms and conditions of outstanding awards, including without limitation the following (or any combination thereof): (i) continuation or assumption of such outstanding awards under the Omnibus Plan by us (if it is the surviving company or corporation) or by the surviving company or corporation or its parent; (ii) substitution by the surviving company or corporation or its parent of awards with substantially the same terms for such outstanding awards; (iii) accelerated exercisability, vesting and/or lapse of restrictions under all then outstanding awards immediately prior to the occurrence of such event; (iv) upon written notice, provide that any outstanding awards must be exercised, to the extent then exercisable, within fifteen days immediately prior to the scheduled consummation of the event, or such other period as determined by the committee (in either case contingent upon the consummation of the event), and at the end of such period, such awards shall terminate to the extent not so exercised within the relevant period; and (v) cancellation of all or any portion of outstanding awards for fair value (as determined in the sole discretion of the committee) which, in the case of options and stock appreciation rights, may equal the excess, if any, of the value of the consideration to be paid in the change of control transaction to holders of the same number of shares subject to such options or stock appreciation rights (or, if no such consideration is paid, fair market value of the shares subject to such outstanding awards or portion thereof being canceled) over the aggregate option price or grant price, as applicable, with respect to such awards or portion thereof being canceled. 

Amendment and Termination

Our Board of Directors may amend, alter, suspend, discontinue, or terminate the Omnibus Plan or any portion thereof or any award (or award agreement) thereunder at any time.

Compliance with Code Section 409A

To the extent that the Omnibus Plan and/or awards are subject to Section 409A of the U.S. Internal Revenue Code, or the Code, the committee may, in its sole discretion and without a participant's prior consent, amend the Omnibus Plan and/or awards, adopt

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policies and procedures, or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to (a) exempt the Omnibus Plan and/or any award from the application of Section 409A of the Code, (b) preserve the intended tax treatment of any such award, or (c) comply with the requirements of Section 409A of the Code, Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date of the grant. This plan shall be interpreted at all times in such a manner that the terms and provisions of the Omnibus Plan and awards are exempt from or comply with Section 409A guidance. 

Employee Stock Purchase Plan

We adopted our Employee Stock Purchase Plan (ESPP) in connection with our initial public offering in December 2010. The purpose of the ESPP is to provide our eligible employees and employees of our subsidiaries with an opportunity to purchase shares of our common stock at a discount through payroll deductions. The ESPP is designed to provide an incentive to attract, retain and reward eligible employees. The ESPP is generally available to all eligible employees, including our named executive officers, under the same offering and eligibility terms, and is not tied to any performance criteria. The ESPP is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended. 

The following is a summary of the material terms of the ESPP, but does not include all of the provisions of the ESPP.

Administration

The ESPP will be administered by the compensation committee of our Board of Directors or any other committee designated by the board to administer the ESPP. The plan administrator will have the authority to construe and interpret the terms of the ESPP and the purchase rights granted under it, to determine eligibility to participate and to establish policies and procedures for administration of the ESPP. All actions taken and all interpretations and determinations made by the administrator are final and binding upon the participants and the Company. 

Shares Subject to the Plan

The shares of our common stock issuable under the ESPP may be either newly issued shares or shares we acquire, including by purchase on the open market. The number of shares reserved pursuant to the ESPP is 1,000,000, subject to adjustment. 

If any change is made to the Company's outstanding common stock in connection with any merger, consolidation, reorganization, recapitalization, stock split, stock dividend, or other like change, the committee shall make appropriate adjustments to, without limitation, the number or kind of shares subject to the ESPP and the purchase price of such shares in order to prevent dilution or enlargement of participants' rights. 

Eligibility

All full-time employees of us or of any subsidiary will generally be eligible to participate in the ESPP, except that an employee may not be granted a right to purchase stock under the ESPP if, immediately after the grant, the employee would own stock possessing 5% or more of the total combined voting power or value of all classes of our capital stock or of any parent or subsidiary entity. 

Participation

Eligible employees who enroll in the ESPP may elect to have between one and ten percent of their eligible compensation withheld and accumulated for the purchase of shares at the end of each offering period in which they participate, unless otherwise determined by the administrator.

Each participant may cancel his or her election to participate in the ESPP by written notice to the committee in such form and at such times as the committee may require. Participation shall end automatically upon termination of employment for any reason. 

Offerings

Shares of our common stock are offered for purchase under the ESPP pursuant to a series of six-month offering periods, which will commence on January 1 and July 1 of each year, unless otherwise determined by the administrator. 

Purchase of Shares

Amounts accumulated for each participant will be used to purchase shares of our common stock at the end of each offering period at a price, unless otherwise determined by the administrator, equal to 85% of the lesser of (i) the fair market value on the first day of the offering period and (ii) the fair market value on the last day of the offering period. No participant may purchase shares at a rate which exceeds $25,000 per year or more than 3,500 shares per offering period. 

Resale Restrictions 

The ESPP is intended to provide our shares for investment by employees and not for resale. However, we do not intend to restrict

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or influence any participant from selling shares purchased under the ESPP at any time, subject to compliance with applicable laws. 

Stockholder Rights 

No participant will have any rights as a stockholder with respect to the shares covered by his or her purchase right until the shares are actually purchased on the participant's behalf. No adjustment will be made for dividends, distributions, or other rights for which the record date is prior to the date of such purchase. 

Amendment and Termination

Our Board of Directors may amend or terminate the ESPP at any time, provided that no amendment may increase the number of shares reserved for purchase without the approval of our stockholders. Upon a termination, shares may be issued to participants and any amounts not applied to the purchase of shares shall be refunded to the participants. 

Director Compensation

Prior to our initial public offering, our directors, other than the directors affiliated with Summit Partners, received $5,000 in compensation for each Board of Directors meeting that they attended in person and received $1,000 in compensation for each Board of Directors meeting that they attended telephonically. Committee chairs received an additional $10,000 in compensation annually. Current compensation for directors is described above under "Board of Directors and Committees -- Compensation of Directors."

The following table sets forth information concerning compensation paid or accrued by us in 2010 to our directors.

2010 Director Compensation Table
Name	Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)		Total ($)
Richard S. Kahlbaugh	$	—	$	—	$	—
John Carroll	—		—		—
J.J. Kardwell	—		—		—
Alfred R. Berkeley, III(3)	1,458		2,302		3,760
Francis M. Colalucci(3)	1,458		2,302		3,760
Frank P. Filipps(3)	1,458		2,302		3,760
Ted W. Rollins(3)	1,042		2,302		3,344
Kenneth N. Hamil(4)	5,000		—		5,000

(1) Amounts reflect the portion of the annual Board and Committee retainer that was accrued based on Board service in 2010. With respect to Messrs. Berkeley, Colalucci and Filipps, the amount includes the pro rata portion of $10,000 accrued in 2010 for service as Chair of the Compensation, Audit and Governance committees, respectively.

(2) Messrs. Berkeley, Colalucci, Filipps and Rollins were granted 15,000 shares of common stock on December 16, 2010 one-third of which will vest on each of the first, second and third anniversaries of the grant date. The value of the stock on the grant date was $11.00 per share. The 2010 accrued amount is included in the Stock Awards column.

(3) Messrs. Berkeley, Colalucci, Filipps and Rollins were elected to our Board of Directors on December 16, 2010.

(4) Mr. Hamil decided not to stand for election at our 2010 annual meeting of stockholders and resigned as chairman of our Board of Directors effective May 15, 2010.

Indemnification of Officers and Directors

Our bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law (DGCL). We have established directors' and officers' liability insurance that insures such persons against the costs of defense, settlement or payment of a judgment under certain circumstances. 

Our certificate of incorporation provides that our directors will not be liable for monetary damages for breach of fiduciary duty, except for liability relating to any breach of the director's duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, violations under Section 174 of the DGCL or any transaction from which the director derived an improper personal benefit. 

We entered into indemnification agreements with each of our directors and named executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by the DGCL, including

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indemnification of expenses such as attorneys' fees, judgments, fines, and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a director or executive officer. At present, we are not aware of any pending or threatened litigation or proceeding involving any of our directors, named executive officers, employees, or agents in which indemnification would be required or permitted. We believe these indemnification agreements are necessary to attract and retain qualified persons as directors and named executive officers. 

In addition, in 2010 the Company entered into indemnity agreements with Messrs. Kahlbaugh, Vrban and Santoro, the Company's former Chief Financial Officer who resigned in April 2010, in connection with their service as agents for the plan administrators of the Fortegra Corporation 401(k) Savings Plan and as plan committee members. These agreements, among other things, require the Company to indemnify each plan committee member to the extent permitted by then-applicable law, including indemnification of expenses such as attorneys' fees, judgments, fines, taxes and judgment or settlement amounts incurred by the executive officer in any action, suit or proceeding by or in right of us, arising out of such person's service as an agent of the plan administrators of the plan or a plan committee member. The Company will not indemnify such executive officers for violations of criminal law, transactions in which improper personal benefits were received or willful misconduct or gross negligence in performance of duties.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The membership of the Compensation Committee was re-constituted on December 16, 2010. Since that time, Messrs. Berkeley, Colalucci and Filipps have served on our Compensation Committee. None of them was an officer or employee of Fortegra in 2010 or any time prior thereto. During 2010, none of the members of the Compensation Committee had any relationship with Fortegra requiring disclosure under Item 404 of Regulation S-K. Mr. Kahlbaugh serves on the Board of Directors, is Lead Independent Director, and a member of the Audit Committee and chairman of the Nominating and Governance Committee of Campus Crest Communities, of which Mr. Rollins is the Chairman and Chief Executive Officer. No other of our executive officers served as a member of the Board of Directors or compensation committee, or similar committee, of any other company whose executive officer(s) served as a member of our Board of Directors or our Compensation Committee.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Set forth below is a description of certain relationships and related person transactions between the Company and its directors, executive officers and holders of more than 5% of our voting securities for the year ended December 31, 2010. The Company believes that all of the following transactions were entered into with terms as favorable as could have been obtained from unaffiliated third parties.

Merger Agreement and Related Transactions

On March 7, 2007, the Company entered into an agreement and plan of merger with entities affiliated with Summit Partners, or the Summit Funds, LOS Acquisition Co., an entity formed by affiliates of Summit Partners, the stockholders party thereto, including current and former directors and executive officers, and N.G. Houston, III, as the stockholder representative, which was amended on June 20, 2007. The merger agreement provided for a series of transactions in which entities affiliated with Summit Partners acquired 2,522,598.71 shares of our Class A common stock, 91.2% of our capital stock. The acquisition was financed through (i) $20.0 million of subordinated debentures maturing in 2012 issued to affiliates of Summit Partners, (ii) $35.0 million of preferred trust securities maturing in 2037 and (iii) an equity investment of $43.1 million by affiliates of Summit Partners. In connection with the acquisition, all of the Company's $11.5 million of redeemable preferred stock outstanding prior to the acquisition remained outstanding and certain stockholders prior the acquisition continued to hold such shares after the acquisition. In addition to acquiring our capital stock in the acquisition, the proceeds from the equity and debt financings were used to repay pre-transaction indebtedness of $10.1 million and pay transaction costs of $5.8 million. We consummated the merger on June 20, 2007. We refer to the acquisition of capital stock by affiliates of Summit Partners and the financing and other transactions related to such acquisition as the “Summit Partners Transactions.”

As part of the financing for the merger, on June 20, 2007, the Company's direct subsidiary, LOTS Intermediate Co., which was formed by affiliates of Summit Partners in connection with the merger, issued $20.0 million of its subordinated debentures to entities affiliated with Summit Partners. LOTS Intermediate Co., which also issued $35.0 million of its preferred trust securities to an entity not affiliated with us, then made a dividend payment to the Company with the net proceeds from the issuances of the debentures of approximately $54.1 million, which the Company used to pay a portion of the merger consideration and other transaction fees and expenses.

The $20.0 million subordinated debentures issued by LOTS Intermediate Co. to the affiliates of Summit Partners bear interest at a rate of 14% per annum and mature on December 13, 2013. For the year ended December 31, 2010, the Company paid interest on such subordinated debentures to the affiliates of Summit Partners of $2.1 million. In January 2011, the Company redeemed

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the subordinated debentures for $20.6 million, which includes accrued but unpaid interest to the redemption date.

Stockholders Agreement

On March 7, 2007, in connection with the Summit Partners Transactions and as a condition to the merger, the Company entered into a stockholders agreement with the Summit Funds, the rollover stockholders and employee stockholders. The rollover stockholders and employee stockholders party to the agreement include Messrs. Kahlbaugh, Fullington, Hamil and Smith and Prince Rental & Leasing Systems, Inc.

The Stockholders Agreement includes provisions regarding the election of members of the board of directors, share transfer restrictions, rights of first refusal, tag-along rights and drag-along rights. All of these provisions terminated in connection with the Company's initial public offering in December 2010.

The Stockholders Agreement also provided for (i) demand rights, which require the Company to effect a registration of registrable securities upon a written request from any of the Summit Funds; (ii) piggyback registration rights, which require the Company to register any registrable securities held by our stockholders party to the Stockholders Agreement if the Company proposes to register any of our equity securities for sale to the public (whether for our account or the account of any stockholder); and (iii) shelf demand registration rights after 12 months following an initial public offering when we are eligible to use a registration statement on Form S-3.

Our obligation to effect any demand for registration by the Summit Funds is subject to certain conditions, including that the Company need not effect more than two demand registrations and the registrable securities to be sold by holders requesting such registration must represent more than 35% of the total number of registrable securities held by all holders party to the Stockholders Agreement. The Summit Funds have not used any of their demand registrations. In connection with any registration effected pursuant to the terms of the Stockholders Agreement, the Company pays for all of the fees and expenses incurred in connection with such registration, including registration fees, filing fees and printing fees. However, the underwriting discounts, commissions and fees payable in respect of registrable securities included in any registration are paid by the persons including such registrable securities in any such registration. We also agreed to indemnify the holders of registrable securities against all claims, losses, damages and liabilities with respect to each registration effected pursuant to the registration rights agreement.

Class A Common Stock Conversion

Under the Company's current amended and restated certificate of incorporation, the Company is required to pay each holder of our Class A common stock a conversion amount on each share of Class A common stock converted. The Class A conversion amount is (i) $17.066 for all shares of Class A common stock issued on or about June 20, 2007 and (ii) $42.35 for all shares of Class A common stock issued on or about April 15, 2009 multiplied by 8% per annum (calculated daily), compounded annually from the date of issuance of such shares until the date of conversion. In connection with the Company's initial public offering and the conversion of Class A common stock to common stock, the Company paid affiliates of Summit Partners approximately $14.0 million. The Company also made an aggregate payment of approximately $100,000 to certain of its executive officers that hold Class A common stock.

Bonus Pool

In connection with the Company's initial public offering, it terminated its cash bonus pool and granted shares of restricted stock to Messrs. McCaw, Short and Romano and the other bonus pool participants under the 2010 Omnibus Incentive Plan. The number of shares of restricted stock granted to each participant was based on the $11.00 initial public offering price of shares. Messrs. McCaw, Short and Romano received 28,708, 14,354 and 4,785 shares of restricted stock, respectively, and the other bonus pool participants received an aggregate of 43,062 shares of restricted stock. Subject to the participant's continued service, all of the shares of restricted stock will vest, if at all, when the annual EBITDA target of $36.5 million is met for the Company's Payment Protection and BPO businesses as determined by the Board of Directors. In addition, the Company granted 4,545, 2,273 and 2,273 shares of restricted stock to Messrs. Kahlbaugh, Bullard and Fullington, respectively, with the same vesting terms as the restricted stock granted to the bonus pool participants.

Transactions with Others

Messrs. Kahlbaugh and Short are brothers-in-law. Mr. Short received aggregate compensation, including base salary, bonus and other compensation, of approximately $285,329 in the year ended December 31, 2010. Mr. Short's base salary as of April 2011 is $205,000. Mr. Short also received 14,354 shares of restricted stock in connection with our bonus pool , which is described immediately above under "Bonus Pool."

Kenneth N. Hamil's son, Alan Hamil, is employed as a manager of purchasing. Alan Hamil received aggregate compensation,

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including base salary, bonus and management fees, of approximately $116,783, during the year ended December 31, 2010.

Policies for Approval of Related Person Transactions

The governance committee reviews and approves or ratifies all relationships and related person transactions between the Company and (i) our directors, director nominees, executive officers or their immediate family members, (ii) any 5% record or beneficial owner of our common stock or (iii) any immediate family member of any person specified in (i) and (ii) above. The Company's general counsel is primarily responsible for the development and implementation of processes and controls to obtain information from the Company's directors and executive officers with respect to related party transactions and for determining, based on the facts and circumstances, whether the Company or a related person have a direct or indirect material interest in the transaction.

As set forth in the related person transaction policy, in the course of its review and approval or ratification of a related party transaction, the committee will consider:

• the nature of the related person's interest in the transaction;

• the availability of other sources of comparable products or services;

• the material terms of the transaction, including, without limitation, the amount and type of transaction; and

• the importance of the transaction to us.

Any member of the governance committee who is a related person with respect to a transaction under review will not be permitted to participate in the discussions or approval or ratification of the transaction. However, such member of the governance committee will provide all material information concerning the transaction to the audit committee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such person with respect to our securities.

To our knowledge, all other filings required to be made by reporting persons during 2010 were timely made in accordance with the requirements of Section 16(a) of the Securities Exchange Act of 1934, except for one late report on Form 4 reporting a purchase transaction for Francis M. Colalucci.

REPORT OF THE AUDIT COMMITTEE

Each member of the Audit Committee is an independent director as determined by our Board of Directors, based on the New York Stock Exchange listing standards and the company's independence guidelines. Each member of the committee also satisfies the United States Securities and Exchange Commission's (“SEC”) additional independence requirement for members of audit committees. In addition, our Board of Directors has determined that Mr. Colalucci is an “audit committee financial expert,” as defined by SEC rules. For more information about the committee's charter and key practices, visit the corporate governance section of the company's website. To view, go to www.Fortegra.com, click “Investors,” then click “Corporate Governance” and finally click “Audit Committee.”

We have reviewed and discussed the company's audited financial statements with management, which has primary responsibility for the financial statements. Johnson Lambert & Co. LLP, the company's independent registered public accounting firm for 2010 (“Johnson Lambert”), is responsible for expressing an opinion on the conformity of the company's audited financial statements with U.S. generally accepted accounting principles. The committee has discussed with Johnson Lambert the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The committee has received the written disclosures and the letter from Johnson Lambert in accordance with applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and the committee discussed with Johnson Lambert that firm's independence. The committee also concluded that Johnson Lambert's provision of audit and non-audit services, as described in the next section, to the company and its affiliates is compatible with Johnson Lambert's independence.

Based on the review and discussions referred to above, the committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for 2010 and selected Johnson Lambert as the independent registered public accounting firm for the company for 2011. This report is provided by the following independent directors, who constitute the committee:

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Francis M. Colalucci, Chair

Frank P. Filipps

Ted W. Rollins

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Upon the approval of the Audit Committee, Fortegra retained Johnson Lambert to audit our financial statements for 2011. In addition, Fortegra retained Johnson Lambert, as well as other accounting firms, to provide other auditing and advisory services in 2010. We understand the need for Johnson Lambert to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of Johnson Lambert, our Audit Committee has restricted the non-audit services that Johnson Lambert may provide to us and has determined that we would obtain these non-audit services from Johnson Lambert only when the services offered by Johnson Lambert are more effective or economical than services available from other providers, and, to the extent possible, only after competitive bidding.

The services and all other fees presented in the table below were pre-approved by the Audit Committee. The aggregate fees billed by Johnson Lambert in 2010 and 2009 for professional services rendered were:

Type of Fees	2010		2009
Audit Fees (1)	$	313,688	$	321,838
Audit-Related Fees(2)	285,958		—
Tax Fees	—		—
All Other Fees	—		—
Total	$	599,646	$	321,838

⁽¹⁾  Fees for services to perform an audit or review in accordance with generally accepted auditing standards and services that generally only the Company's independent registered public accounting firm can reasonably provide, including the audit of Fortegra's financial statements included in public offerings or filings, including the Company's Initial Registration Statement on Form S-1 and amendments thereto (the "Registration Statement"), and for services that are normally provided by accountants in connection with statutory and regulatory filings or engagements.

⁽²⁾  Fees for assurance and related services that are traditionally performed by the Company's independent registered public accounting firm, including preparation of comfort letters in connection with the Registration Statement, and consultation concerning financial accounting and reporting standards.

On September 14, 2010, we re-appointed Johnson Lambert & Co. LLP as our independent accounting firm. Johnson Lambert &

Co. LLP previously audited our 2009, 2008 and 2007 financial statements, and we dismissed them as our independent accountants on April 20, 2010. On March 26, 2010, we engaged PricewaterhouseCoopers LLP to re-audit our 2009, 2008 and 2007 financial statements. We dismissed PricewaterhouseCoopers LLP on September 13, 2010 as a result of unresolved independence issues arising from services that they had performed for overseas affiliates of Summit Partners, our largest stockholder. PricewaterhouseCoopers LLP audited the financial statements of Bliss and Glennon, Inc. at December 31, 2008 (Successor) and 2007 (Predecessor), for the period from October 1, 2008 to December 31, 2008 (Successor), for the period from January 1, 2008 to September 30, 2008 (Predecessor) and for the year ended December 31, 2007. The members of our audit committee participated in and approved the decisions to appoint and dismiss PricewaterhouseCoopers LLP and dismiss and re-appoint Johnson Lambert & Co. LLP.

The report of Johnson Lambert & Co. LLP on our financial statements at December 31, 2009 and 2008, and for the years ended

December 31, 2009 and 2008, which appears in our Annual Report on form 10-K for the year ended December 31, 2010 ("2010 Annual Report") , contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principle. PricewaterhouseCoopers LLP did not issue any reports with respect to the Company's financial statements. Accordingly, there were no reports issued by PricewaterhouseCoopers LLP with respect to us that contained an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.

During the years ended December 31, 2010, 2009 and 2008, there were no disagreements with Johnson Lambert & Co. LLP on

any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Johnson Lambert & Co. LLP, would have caused it to make reference thereto in its reports on the financial statements for such periods. During the period from March 26, 2010 through September 13, 2010, there were no disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of

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PricewaterhouseCoopers LLP, would have caused it to make reference thereto in any reports issued on our financial statements.

During the years ended December 31, 2010, 2009 and 2008, there have been no reportable events (as defined in Item 304(a)(1)

(v) of Regulation S-K) involving Johnson Lambert & Co. LLP. Except as disclosed in the second paragraph under the heading "Risk Factors - Our internal control over financial reporting has not been tested and may not meet the standards required by Section 404 of SOX and the failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of SOX could materially and adversely affect us," during the period from March 26, 2010 through September 13, 2010, there have been no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K) involving PricewaterhouseCoopers LLP.

We requested that Johnson Lambert & Co. LLP and PricewaterhouseCoopers LLP each furnish us with a letter addressed to the

Securities and Exchange Commission stating whether or not it agrees with the substance of above statements. A copy of such letters, each dated September 23, 2010, are listed as Exhibits 16.1 and 16.2 to our 2010 Annual Report.

During the years ended December 31, 2010 and 2009, we had not consulted with PricewaterhouseCoopers LLP regarding any of the matters described in Item 304(a)(2)(i) or Item 304(a)(2)(ii) of Regulation S-K. During the period from April 20, 2010 through September 14, 2010, we had not consulted with Johnson Lambert & Co. LLP regarding any of the matters described in Item 304 (a)(2)(i) or Item 304(a)(2)(ii) of Regulation S-K.

As a practice, our Audit Committee has refrained from hiring a Johnson Lambert partner, director, manager, staff, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other persons having responsibility for providing audit assurance on any aspect of their certification of the company's financial statements.

PROPOSAL 2

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has selected Johnson Lambert & Co. LLP as our independent registered public accounting firm to perform the audit of our financial statements and to attest to the effectiveness of the company's internal control over financial reporting for 2011. Johnson Lambert was our independent registered public accounting firm for the year ended December 31, 2010. The firm is a registered public accounting firm with the Public Company Accounting Oversight Board (the “PCAOB”), as required by the Sarbanes-Oxley Act of 2002 and the rules of the PCAOB.

Johnson Lambert representatives are expected to attend the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate stockholder questions.

We are asking our stockholders to ratify the selection of Johnson Lambert as our independent registered public accounting firm. Although ratification is not required by our certificate of incorporation or Bylaws or otherwise, the Board is submitting the selection of Johnson Lambert to our stockholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the company and our stockholders.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF JOHNSON LAMBERT & CO. LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2011.

PROPOSAL 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our stockholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executives officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC.

As described in detail under the heading “Executive and Director Compensation - Compensation Discussion and Analysis,” we seek to closely align the interests of our named executive officers with the interests of our stockholders. Our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total stockholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.

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The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC. The vote is advisory, which means that the vote is not binding on the company, our Board of Directors or the Compensation Committee of the Board of Directors. To the extent there is any significant vote against our named executive officer compensation as disclosed in this proxy statement, the Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders.

The affirmative vote of a majority of the shares present or represented and entitled to vote either in person or by proxy is required to approve this Proposal 3.

Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:

“RESOLVED, that the Company's stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company's Proxy Statement for the 2011 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2010 Summary Compensation Table and the other related tables and disclosure.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE -APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS -DISCLOSED IN THIS PROXY STATEMENT.

PROPOSAL 4

ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act also provides that stockholders must be given the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our named executive officers as disclosed in accordance with the compensation disclosure rules of the SEC, which we refer to as an advisory vote on executive compensation. By voting with respect to this Proposal 4, stockholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation once every one, two or three years. Stockholders also may, if they wish, abstain from casting a vote on this proposal.

Our Board of Directors has determined that an advisory vote on executive compensation that occurs once every three years is the most appropriate alternative for the company and therefore our Board recommends that you vote for a three-year interval for the advisory vote on executive compensation. In determining to recommend that stockholders vote for a frequency of once every three years, the Board considered how an advisory vote at this frequency will provide our stockholders with sufficient time to evaluate the effectiveness of our overall compensation philosophy, policies and practices in the context of our long-term business results for the corresponding period, while avoiding over-emphasis on short term variations in compensation and business results. An advisory vote occurring once every three years will also permit our stockholders to observe and evaluate the impact of any changes to our executive compensation policies and practices which have occurred since the last advisory vote on executive compensation, including changes made in response to the outcome of a prior advisory vote on executive compensation. We will continue to engage with our stockholders regarding our executive compensation program during the period between advisory votes on executive compensation.

The company recognizes that the stockholders may have different views as to the best approach for the company, and therefore we look forward to hearing from our stockholders as to their preferences on the frequency of an advisory vote on executive compensation.

This vote is advisory and not binding on the company or our Board of Directors in any way. The Board of Directors and the Compensation Committee will take into account the outcome of the vote, however, when considering the frequency of future advisory votes on executive compensation. The Board may decide that it is in the best interests of our stockholders and the company to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our stockholders.

The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE OPTION OF ONCE EVERY THREE YEARS AS THE PREFERRED FREQUENCY FOR ADVISORY VOTES ON EXECUTIVE COMPENSATION.

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Fortegra Financial 10151 Deerwood Park Blvd. Building 100, Suite 330 Jacksonville, FL 32256 Fortegra.com ©2010 Fortegra Financial Corporation All rights reserved.

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