8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 17, 2005

Bancinsurance Corporation
__________________________________________
(Exact name of registrant as specified in its charter)

Ohio	0-8738	31-0790882
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
250 East Broad Street, 10th Floor, Columbus, Ohio		43215
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 614-228-2800

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed in a Form 8-K dated April 15, 2005, Bancinsurance Corporation (the "Company") entered into an Undertaking Agreement (the "Original Undertaking Agreement") with Sally J. Cress, former Secretary and Treasurer of the Company. Pursuant to the Original Undertaking Agreement, the Company agreed to advance to Sally J. Cress such legal fees and expenses (not to exceed $17,500 without the approval of the Company's disinterested directors) as are actually and reasonably incurred by her in connection with the Company's Audit Committee's investigation (the "Audit Committee Investigation") relating to Ernst & Young LLP's withdrawal of its audit reports for the years 2001 through 2003 for the Company. On October 17, 2005, the Company and Sally J. Cress entered into a First Amendment to Undertaking Agreement (the "First Amendment") which amended the Original Undertaking Agreement to (a) encompass legal fees and expenses incurred by her in connection with the Audit Committee Investigation and the p reviously disclosed Securities and Exchange Commission Investigation relating to the Company and (b) increase the maximum amount that may be advanced to her under the Original Undertaking Agreement from $17,500 to $35,000. A copy of the First Amendment is attached hereto as Exhibit 99.1 and incorporated by reference herein.

On October 17, 2005, the Compensation Committee of the Board of Directors (the "Board") of the Company recommended to the Board and the Board approved an increase in the maximum compensation payable to the Chairman of the Audit Committee (the "Audit Committee Chairman") for his service on the Board and any of its committees during fiscal year 2005 from $30,000 to $40,000. The Board did not otherwise change the compensation payable to the Audit Committee, the Audit Committee Chairman or the non-employee directors of the Company as previously disclosed in a Form 8-K dated March 9, 2005.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1 First Amendment to Undertaking Agreement dated October 17, 2005 between Bancinsurance Corporation and Sally J. Cress.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Bancinsurance Corporation
October 21, 2005	By:	John S. Sokol
		Name: John S. Sokol
		Title: President

Exhibit Index

Exhibit No.	Description
99.1	First Amendment to Undertaking Agreement dated October 17, 2005 between Bancinsurance Corporation and Sally J. Cress.

EX-99.1

FIRST AMENDMENT TO
UNDERTAKING AGREEMENT

THIS FIRST AMENDMENT TO UNDERTAKING AGREEMENT (this “First Amendment”), is entered into as of October 17, 2005 between Bancinsurance Corporation, an Ohio corporation (the “Company”), and Sally J. Cress (“Cress”).

RECITALS:

WHEREAS, the Company and Cress entered into an Undertaking Agreement, dated April 14, 2005 (the “Original Agreement”), whereby the Company agreed to advance Cress up to a maximum of $17,500 for legal fees and expenses incurred by Cress in connection with the internal investigation by the Audit Committee (the “Audit Committee Investigation”) related to the circumstances surrounding the withdrawal by the Company’s auditor of its audit opinions for the years 2001 through 2003, the withdrawal by the Company’s appointed actuary of his certification of Ohio Indemnity’s Company’s statutory reserves for the years 2001 to 2003, and the inability of Ernst & Young LLP to complete its audit of the Company’s 2004 financial statements (the “Accounting Matters”);

WHEREAS, the Securities and Exchange Commission is now undertaking an investigation relating to the Accounting Matters (the “SEC Investigation”);

WHEREAS, Cress has requested that the Original Agreement be amended to encompass legal fees and expenses incurred by her relating to both the Audit Committee Investigation and the SEC Investigation, and that the maximum amount able to be advanced under the Original Agreement be increased from $17,500 to $35,000;

WHEREAS, the directors of the Company have determined that Cress’s request is reasonable and in the best interests of the Company and its shareholders; and

WHEREAS, pursuant to Section 1701.13(E)(6) of the Ohio Revised Code, the directors of the Company adopted resolutions authorizing the Company to amend the Original Agreement accordingly by entering into this First Amendment;

NOW, THEREFORE, the parties hereto agree as follows:

Section 1. Amendments to the Original Agreement.

(a) All references to the “Investigation” in the Original Agreement shall be deemed to be references to both the Audit Committee Investigation and the SEC Investigation.

(b) The amount of $17,500 in paragraph 1 of the Original Agreement is hereby deleted and the amount of $35,000 is hereby inserted in lieu thereof.

Section 2. No Other Amendments. Except as explicitly set forth in this First Amendment, the terms and provisions of the Original Agreement, as amended by this First Amendment, shall remain in full force and effect in accordance with the terms thereof.

Section 3. Governing Law. This First Amendment shall be construed, governed and enforced in accordance with the laws of the State of Ohio.

Section 4. Entire Agreement. This First Amendment constitutes the entire and exclusive statement of the parties’ agreement and supersedes all prior agreements, understandings, negotiations and discussions among the parties, whether oral or written.

Section 5. Counterparts. This First Amendment may be executed in one or more counterparts, each of which shall be deemed to be a duplicate original, but all counterparts taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

BANCINSURANCE CORPORATION

By: /s/ Matt Nolan
Print Name: Matt Nolan
Title: Chief Financial Officer



/s/ Sally J. Cress
SALLY J. CRESS, individually

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