-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GTZPdI7cFMt/r3FpaqVfYEIbVCJBA461Cd9dZwX5SwVsV6dEF5o6wUMBl4b5MEZL mLvMJMYYp6Vo0gjkXPJrYw== /in/edgar/work/20000811/0000905870-00-000029/0000905870-00-000029.txt : 20000921 0000905870-00-000029.hdr.sgml : 20000921 ACCESSION NUMBER: 0000905870-00-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESTORS TITLE CO CENTRAL INDEX KEY: 0000720858 STANDARD INDUSTRIAL CLASSIFICATION: [6361 ] IRS NUMBER: 561110199 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11774 FILM NUMBER: 692112 BUSINESS ADDRESS: STREET 1: 121 N COLUMBIA ST STREET 2: P O DRAWER 2687 CITY: CHAPEL HILL STATE: NC ZIP: 27514 BUSINESS PHONE: 9199682200 MAIL ADDRESS: STREET 1: 121 NORTH COLUMBIA STREET CITY: CHAPEL HILL STATE: NC ZIP: 27514 10-Q 1 0001.txt 2ND QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: June 30, 2000 ---------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _____________ Commission File Number: 0-11774 ----------- INVESTORS TITLE COMPANY ------------------------ (Exact name of registrant as specified in its charter) North Carolina 56-1110199 -------------- ---------- (State of Incorporation) (I.R.S. Employer) 121 North Columbia Street, Chapel Hill, North Carolina 27514 - ------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (919) 968-2200 -------------- (Registrant's Telephone Number Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- Shares outstanding of each of the issuer's classes of common stock as of June 30, 2000: Common Stock, no par value 2,587,159 -------------------------- --------- Class Shares Outstanding 1 INVESTORS TITLE COMPANY AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Balance Sheets as of June 30, 2000 and December 31, 1999...3 Consolidated Statements of Income: Three and Six Months Ended June 30, 2000 and June 30, 1999.........4 Consolidated Statements of Cash Flows: Three and Six Months Ended June 30, 2000 and June 30, 1999.........5 Notes to Consolidated Financial Statements..............................6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..............................................7 Item 3. Quantitative and Qualitative Disclosures About Market Risk .......10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a vote of Security Holders...............10 Item 6. Exhibits and Reports on Form 8-K................................. 10 SIGNATURES.................................................................11 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements - ------------------------------ Investors Title Company and Subsidiaries Consolidated Balance Sheets As of June 30, 2000 and December 31, 1999 (Unaudited)
June 30, 2000 December 31, 1999 ----------------- ----------------------- Assets Cash and cash equivalents $ 8,619,670 $ 7,554,297 Investments in securities: Fixed maturities: Held-to-maturity, at amortized cost 4,384,246 4,565,871 Available-for-sale, at fair value 25,939,238 25,931,918 Equity securities, at fair value 4,963,176 5,012,259 ----------------- ------------------- Total investments 35,286,660 35,510,048 Premiums receivable (less allowance for doubtful accounts: 2000 and 1999: $725,000 and $775,000) 3,358,347 3,292,001 Accrued interest and dividends 517,440 521,624 Prepaid expenses and other assets 1,066,261 930,981 Property acquired in settlement of claims 191,617 191,617 Property, net 5,724,889 5,836,466 Prepaid federal income taxes - 705,437 Deferred income tax asset, net 452,662 614,093 ----------------- ------------------- Total Assets $ 55,217,546 $ 55,156,564 ================= =================== Liabilities and Stockholders' Equity Liabilities: Reserves for claims (Note 2) $ 16,309,665 $ 15,864,665 Accounts payable and accrued liabilities 1,084,933 1,560,936 Commissions and reinsurance payables 212,981 208,605 Premium taxes payable - 20,618 Current income taxes payable 589,875 - ----------------- ------------------- Total liabilities 18,197,454 17,654,824 ----------------- ------------------- Stockholders' Equity: Common stock-no par value (shares authorized 6,000,000; 2,855,744 and 2,855,744 shares issued; and 2,587,159 and 2,736,961 shares outstanding 2000 and 1999, respectively) 1 1 Retained earnings 35,536,763 36,311,613 Accumulated other comprehensive income (net unrealized gain on investments) (net of deferred taxes: 2000: $764,698; 1999: $613,667) (Note 3) 1,483,328 1,190,126 ----------------- ------------------- Total stockholders' equity 37,020,092 37,501,740 ----------------- ------------------- Total Liabilities and Stockholders' Equity $ 55,217,546 $ 55,156,564 ================= ===================
See notes to consolidated financial statements. 3 Investors Title Company and Subsidiaries Consolidated Statements of Income June 30, 2000 and 1999 (Unaudited)
For The Three For The Six Months Ended Months Ended June 30 June 30 -------------------------------- -------------------------------- ------------- ------------- -------------- ------------- 2000 1999 2000 1999 ------------- ------------- -------------- ------------- Revenues: Underwriting income: Premiums written $ 10,173,816 $ 12,463,764 $ 18,617,123 $ 23,235,392 Less-premiums for reinsurance ceded 108,784 78,877 181,953 156,268 ------------- ------------- -------------- ------------- Net premiums written 10,065,032 12,384,887 18,435,170 23,079,124 Investment income-interest and dividends 576,317 498,650 1,168,108 968,777 Net realized gain on sales of investments 21,899 88,953 84,766 280,358 Other 374,233 224,521 675,670 385,068 ------------- ------------- -------------- ------------- Total 11,037,481 13,197,011 20,363,714 24,713,327 ------------- ------------- -------------- ------------- Operating Expenses: Commissions to agents 4,032,464 4,818,820 7,410,335 8,810,108 Provision for claims (Note 2) 1,822,322 1,712,861 3,067,126 3,293,729 Salaries and employee benefits 2,384,751 2,538,340 4,873,080 5,081,092 Office occupancy and operations 872,449 1,019,035 1,780,913 1,907,368 Business development 399,660 363,574 662,216 638,484 Taxes, other than payroll and income 128,475 105,533 181,936 147,941 Premium and retaliatory taxes 192,113 216,290 403,737 478,200 Professional fees 259,402 225,348 431,093 391,506 Other 8,180 55,385 36,406 103,254 ------------- ------------- -------------- ------------- Total 10,099,816 11,055,186 18,846,842 20,851,682 ------------- ------------- -------------- ------------- Income Before Income Taxes 937,665 2,141,825 1,516,872 3,861,645 Provision For Income Taxes 202,906 669,798 260,506 1,213,300 ------------- ------------- -------------- ------------- Net Income $ 734,759 $ 1,472,027 $ 1,256,366 $ 2,648,345 ============= ============= ============== ============= Basic Earnings per Common Share (Note 4) $ 0.28 $ 0.53 $ 0.48 $ 0.95 ============= ============= ============== ============= Weighted Average Shares Outstanding-Basic (Note 4) 2,587,075 2,782,431 2,615,159 2,793,929 ============= ============= ============== ============= Diluted Earnings per Common Share (Note 4) $ 0.28 $ 0.53 $ 0.48 $ 0.94 ============= ============= ============== ============= Weighted Average Shares Outstanding-Diluted (Note 4) 2,588,244 2,791,298 2,619,077 2,806,542 ============= ============= ============== ============= Dividends Paid $ 85,673 $ 85,673 $ 171,345 $ 171,345 ============= ============= ============== ============= Dividends per Share $ 0.03 $ 0.03 $ 0.06 $ 0.06 ============= ============= ============== =============
See notes to consolidated financial statements. 4 Investors Title Company and Subsidiaries Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
2000 1999 ---------------- ------------------- Operating Activities: Net income $ 1,256,366 $ 2,648,345 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 382,052 192,810 Amortization, net 785 46,965 Net (gain) loss on disposals of property (4,355) 2,431 Net realized gain on sales of investments (84,766) (280,358) Provision (benefit) for deferred income taxes 10,400 (278,000) Provision for claims 3,067,126 3,293,729 Payments of claims, net of recoveries (2,622,126) (1,503,729) Changes in assets and liabilities: (Increase) decrease in receivables and other assets (73,957) 562,146 Decrease in accounts payable and accrued liabilities (476,003) (49,088) Increase in commissions and reinsurance payables 4,376 94,903 Decrease in premium taxes payable (144,103) (341,626) Increase (decrease) in current income taxes payable 1,295,312 (157,627) ---------------- ------------------- Net cash provided by operating activities 2,611,107 4,230,901 ---------------- ------------------- Investing Activities: Purchases of available-for-sale securities (1,058,856) (3,077,623) Purchases of held-to-maturity securities - (100,986) Proceeds from sales of available-for-sale securities 1,628,458 1,326,147 Proceeds from sales of held-to-maturity securities 182,000 449,086 Purchases of property (290,549) (1,076,198) Proceeds from sales of property 24,429 4,875 ---------------- ------------------- Net cash provided by (used in) investing activities 485,482 (2,474,699) ---------------- ------------------- Financing Activities: Repurchases of common stock (1,867,451) (874,740) Exercise of options 7,580 - Dividends paid (171,345) (171,345) ---------------- ------------------- Net cash used in investing activities (2,031,216) (1,046,085) ---------------- ------------------- Net Increase in Cash and Cash Equivalents 1,065,373 710,117 Cash and Cash Equivalents, Beginning of Year 7,554,297 8,141,354 ---------------- ------------------- Cash and Cash Equivalents, End of Period $ 8,619,670 $ 8,851,471 ================ =================== Supplemental Disclosures: Cash Paid During the Year for: Income Taxes $ 26,210 $ 1,638,827 ================ ===================
Noncash Financing Activites: Accrued bonuses totaling $116,848 and $150,323 were paid for the six months ended June 30, 2000 and 1999, respectively, by issuance of the Company's common stock. See notes to consolidated financial statements. 5 INVESTORS TITLE COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 2000 (Unaudited) Note 1 - Basis of Presentation - ------------------------------ The consolidated financial statements include Investors Title Company and its subsidiaries, and have been prepared in conformity with accounting principles generally accepted in the United States of America. In the opinion of management all necessary adjustments have been reflected for a fair presentation of the financial position, results of operations and cash flows in the accompanying unaudited consolidated financial statements. All such adjustments are of a normal recurring nature. Reference should be made to the "Notes to Consolidated Financial Statements" of the Registrant's Annual Report to Shareholders for the year ended December 31, 1999 for a description of accounting policies. Note 2 - Reserves for Claims - ---------------------------- Transactions in the reserves for claims for the six months ended June 30, 2000 were as follows: Balance, beginning of year $ 15,864,665 Provision, charged to operations 3,067,126 Recoveries 225,161 Payments of claims (2,847,287) ------------- Balance, June 30, 2000 $ 16,309,665 ============== In management's opinion, the reserves are adequate to cover claim losses which might result from pending and possible claims. Note 3 - Comprehensive Income - ----------------------------- Total comprehensive income for the three months ended June 30, 2000 and 1999 was $681,024 and $963,831, respectively. Total comprehensive income for the six months ended June 30, 2000 and 1999 was $1,549,568 and $1,972,402, respectively. Other comprehensive income is comprised solely of unrealized gains or losses on the Company's available-for-sale securities. Note 4 - Earnings Per Common Share - ---------------------------------- Employee stock options are considered outstanding for the diluted earnings per common share calculation and are computed using the treasury stock method. The total increase in the weighted average shares outstanding related to these equivalent shares was 1,169 and 8,867 for the three months ended June 30, 2000 and 1999, respectively and 3,918 and 12,613 for the six months ended June 30, 2000 and 1999, respectively. Options to purchase 132,060 and 59,106 shares of common stock were outstanding for the three months ended June 30, 2000 and 1999, respectively and 71,560 and 54,606 for the six months ended June 30, 2000 and 1999, respectively but were not included in the computation of diluted EPS because the options' exercise prices were greater than the average market price of the common shares. 6 Subsequent to June 30, 2000 the Company repurchased 5,000 common shares at a price of $10.63 per share under a stock repurchase program. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ---------------------------------------------------------------- The 1999 Form 10-K and the 1999 Annual Report should be read in conjunction with the following discussion since they contain important information for evaluating the Company's operating results and financial condition. Results of Operations: --------------------- For the quarter ended June 30, 2000, net premiums written decreased 19% to $10,065,032, investment income increased 16% to $576,317, revenues decreased 16% to $11,037,481 and net income decreased 50% to $734,759 all compared with the same quarter in 1999. Net income per basic and diluted common share both decreased 47% to $.28 as compared with the year ago period. For the six months ended June 30, 2000, net premiums written decreased 20% to $18,435,170, investment income increased 21% to $1,168,108, revenues decreased 18% to $20,363,714, net income decreased 53% to $1,256,366, and both net income per basic and diluted common share decreased 49% to $.48 as compared with the same period in 1999. Premiums written continue to be adversely affected by the impact of higher interest rates on mortgage refinance activity. Mortgage refinancing represented less than 15% of loan applications in the second quarter. Nationwide existing home sales, which represent the bulk of residential activity, remained slightly below prior year levels. According to the Mortgage Bankers Association of America, the monthly average 30-year fixed mortgage interest rates increased to 8.26% for the six months ended June 30, 2000 compared with 7.04% for the six months ended June 30, 1999. The volume of business decreased in the second quarter of 2000 as the number of policies and commitments issued declined to 52,374, a decrease of 27% compared with 71,731 in the same period in 1999. Policies and commitments issued for the six months ended June 30, 2000 were 99,602 compared with 139,922 in 1999. Branch net premiums written as a percentage of total net premiums written were 43% and 45% for the three months ended June 30, 2000 and 1999, respectively and 43% and 47% for the six months ended June 30, 2000 and 1999, respectively. Net premiums written from branch operations decreased 22% and increased 2% for the three months ended June 30, 2000 and 1999, respectively, as compared with the same periods in the prior year. For the six months ended June 30, 2000 and 1999, net premiums written from branch operations decreased 26% and increased 7%, respectively, as compared with the same prior year periods. 7 Agency net premiums written as a percentage of total net premiums written were 57% and 55% for the three months ended June 30, 2000 and 1999, respectively. Agency net premiums decreased 16% and increased 17% for the three months ended June 30, 2000 and 1999, respectively, as compared with the same periods in the prior year. For the six months ended June 30, 2000 and 1999, net premiums written from agency operations decreased 15% and increased 16%, respectively, as compared with the same prior year periods. Shown below is a schedule of premiums written for the six months ended June 30, 2000 and 1999 in all states where the Company's two insurance subsidiaries, Investors Title Insurance Company and Northeast Investors Title Insurance Company, currently underwrite insurance: 2000 1999 ---- ---- Georgia $ 124,170 $ 261,038 Indiana 243,773 167,864 Kentucky - 3,833 Maryland 297,741 288,138 Michigan 3,165,216 3,675,834 Minnesota 357,216 907,518 Mississippi 13,727 11,268 Nebraska 617,651 525,574 New York 164,799 287,743 North Carolina 7,944,430 10,698,551 Pennsylvania 363,203 - South Carolina 1,733,832 2,302,900 Tennessee 500,641 258,146 Virginia 2,453,869 3,352,962 West Virginia 614,663 468,504 Wisconsin 4,938 1,433 --------------- -------------- Direct Premiums 18,599,869 23,211,306 Reinsurance, net (164,699) (132,182) ---------------- -------------- Net Premiums $18,435,170 $ 23,079,124 ================ =============== Total operating expenses decreased 9% and 10% for the three and six-month periods ended June 30, 2000 compared with the same period in 1999. This decrease was due in part to the decrease in premiums written. Certain operating expenses increased due to continued ongoing investments in technology and costs associated with entering and supporting new markets. The provision for claims as a percentage of net premiums written was 18% and 17% for the three and six months ended June 30, 2000, versus 14% for the same periods in 1999. The increase in the percentage of the provision for claims to net premiums written is the result of a recent increase in claims coupled with a decrease in premium volume. 8 The provision for income taxes was 22% of income before income taxes for the three months ended June 30, 2000 versus 31% for the same period in 1999. For the six months ended June 30, 2000 and 1999, the provision for income taxes was 17% and 31% of income before income taxes. The decrease in the tax provision was primarily due to a higher mix of tax-exempt investment income to total income before taxes in 2000 compared with 1999. Liquidity and Capital Resources: ------------------------------- Net cash provided by operating activities for the six months ended June 30, 2000, amounted to $2,611,107 compared with $4,230,901 for the same six-month period during 1999. The decrease is primarily the result of a decrease in net income, an increase in payments of claims, (net of recoveries), an increase in receivables and a decrease in payables, partially offset by an increase in current income taxes payable. On May 11, 1999, the Board of Directors approved the repurchase of 200,000 shares of the Company's common stock. Pursuant to this approval, the Company has repurchased 152,034 shares in the six-months ended June 30, 2000 at an average price of $12.33 per share. On May 9, 2000, the Board of Directors approved the repurchase of an additional 500,000 shares of the Company's common stock. As of July 27, 2000, no shares have been repurchased. Management believes that funds generated from operations (primarily underwriting and investment income) will enable the Company to adequately meet its operating needs and is unaware of any trend likely to result in adverse liquidity changes. In addition to operational liquidity, the Company maintains a high degree of liquidity within the investment portfolio in the form of short-term investments and other readily marketable securities. Safe Harbor Statement --------------------- Except for the historical information presented, the matters disclosed in the foregoing discussion and analysis and other parts of this report include forward-looking statements. These statements represent the Company's current judgment on the future and are subject to risks and uncertainties that could cause actual results to differ materially. Such factors include, without limitation: (i) that the demand for title insurance will vary with factors beyond the control of the Company such as changes in mortgage interest rates, availability of mortgage funds, level of real estate activity, cost of real estate, consumer confidence, supply and demand for real estate, inflation and general economic conditions; (ii) that losses from claims may be greater than anticipated such that reserves for possible claims are inadequate; (iii) that unanticipated adverse changes in securities markets could result in material losses on investments made by the Company; and (iv) the dependence of the Company on key management personnel the loss of whom could have a material adverse effect on the Company's business. Other risks and uncertainties may be described from time to time in the Company's other reports and filings with the Securities and Exchange Commission. 9 Item. 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Company's market risk exposure has not changed materially from the exposure as disclosed in the Company's 1999 Annual Report on Form 10-K. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- Investors Title Company's Annual Meeting of Shareholders was held May 9, 2000. The proposals voted upon and the results of the voting were as follows: Election of three Directors for a three-year term.
Broker For Against Abstentions Withheld Non-votes --- ------- ---------- -------- --------- James A. Fine, Jr. 2,208,049 N/A N/A 53,118 N/A James R. Morton 2,206,761 N/A N/A 54,406 N/A Lillard H. Mount 2,207,199 N/A N/A 53,968 N/A
Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- (10)(xii) Form of Amendment to Incentive Stock Option Agreement between Investors Title Company and James Allen Fine, James Allen Fine, Jr., William Morris Fine, George Abbitt Snead, Ralph Nichols Strayhorn, III and Raeford Wilder Wall, Jr., respectively. (27) Financial Data Schedule included herewith. (b) Reports on Form 8-K ------------------- There were no reports filed on Form 8-K for this quarter. 10 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed in its behalf by the undersigned hereunto duly authorized. INVESTORS TITLE COMPANY (Registrant) By: /s/ James A. Fine, Jr. ---------------------- James A. Fine, Jr. President By: /s/ Elizabeth P. Bryan ---------------------- Elizabeth P. Bryan Vice President (Principal Accounting Officer) Dated: August 11, 2000 11 Exhibit Index (10)(xii) Form of Amendment to Incentive Stock Option Agreement between Investors Title Company and James Allen Fine, James Allen Fine, Jr., William Morris Fine, George Abbitt Snead, Ralph Nichols Strayhorn, III and Raeford Wilder Wall, Jr., respectively. (27) Financial Data Schedule included herewith. EX-10 2 0002.txt EXHIBIT 10(XII)-AMENDMENT TO ISO AGREEMENT EXHIBIT 10(xii) INVESTORS TITLE COMPANY AMENDMENT TO INCENTIVE STOCK OPTION AGREEMENT --------------------------------------------- THIS AMENDMENT, dated as of the _____________, to the Incentive Stock Option Agreement dated as of the ___________________(the "Option Agreement") between Investors Title Company, a North Carolina corporation (the "Company"), and (the "Optionee") an officer of the Company or one of its subsidiaries (the Optionee's employer is hereinafter referred to as "Employer"). W I T N E S S E T H : WHEREAS, the Company recognizes the value to it and Employer of the services of the Optionee and is desirous of furnishing him with added incentive and inducement to contribute to the success of the Company and its subsidiaries; and WHEREAS, the Board of Directors has adopted, and the shareholders of the Company have approved, the 1997 Stock Option and Restricted Stock Plan (the "Plan"); and WHEREAS, pursuant to the Option Agreement and under the terms of the Plan, the Company granted the Optionee a stock option (the "Option") to purchase up to ____ shares of the Company's common stock at the price of______, and WHEREAS, under the Plan, the Committee has sole authority to grant options, accelerate the time at which options may be exercised and to amend the terms of any stock options granted under the Plan; NOW, THEREFORE, in consideration of the mutual promises and representations contained herein and other good and valuable consideration, it is agreed by and between the parties as follows: 1. The Option Agreement is hereby amended by deleting clause (d) of paragraph 5 thereof and renumbering clause (e) as new clause (d). 2. The Option Agreement is hereby amended by deleting paragraph 10 thereof in its entirety and inserting in lieu thereof a new paragraph 10 to read in its entirety as follows: 1 "10. Immediate Vesting of Option. The Option granted hereunder shall become immediately exercisable as to all shares upon the occurrence of any one of the following events: (a) Upon the termination of the Optionee's employment by the Company following a "change of control" as hereinafter defined other than for "cause" as hereinafter defined, or (b) Upon the Optionee's terminating his employment with the Company following a "change of control," as hereinafter defined, upon the occurrence of the following events (a "Triggering Event"): (i) his authority and/or responsibility are substantially reduced, without his consent, below that in effect as of the date hereof, (ii) the Optionee is required to change his residence or principal place of business from Chapel Hill, North Carolina, or (iii) the travel obligations of the Optionee are, without his consent, increased materially above those in effect as of the date hereof. For purposes of this paragraph 10, "cause" shall mean termination due to (i) continued willful or gross neglect of duties for 30 days following receipt by the Optionee of one or more written warnings from his immediate supervisor specifying in detail the duties neglected, (ii) continued intentional refusal to perform the duties for which employed 30 days following receipt by the Optionee of one or more written warnings from his immediate supervisor specifying in detail the Optionee's misconduct, (iii) fraud or embezzlement committed against the Company, or (iv) the Optionee's conviction for a felony. For purposes of this paragraph 10, a "change of control" shall be deemed to have occurred upon the occurrence of any of the following events: (i) Any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") but excluding any employee benefit plan of the Company) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's outstanding securities then entitled ordinarily (and apart from rights accruing under special circumstances) to vote for the election of directors; or 2 (ii) Individuals who are "Continuing Directors," as hereinafter defined, cease for any reason to constitute at least a majority of the Board of Directors; or (iii) The Board of Directors shall approve a sale of all or substantially all of the assets of the Company; or (iv) Any merger, consolidation, or like business combination or reorganization of the Company is consummated that results in the occurrence of any event described in clause (i) or (ii) above. For purposes of the foregoing, "Continuing Directors" shall mean (i) the directors of the Company in office on the date hereof and (ii) any successor to any such director (and any additional director) who after the date hereof (y) was nominated or selected by a majority of the Continuing Directors in office at the time of his nomination or selection and (z) who is not an "affiliate" or "associate" (as defined in Regulation 12B under the Exchange Act) of any person who is the beneficial owner, directly or indirectly, of securities representing 50% or more of the combined voting power of the Company's outstanding securities then entitled ordinarily to vote for the election of directors. 3. Except as expressly provided herein, the terms of the Option Agreement shall continue to be effective as provided in the Option Agreement. 4. This Amendment shall be binding upon and inure to the benefit of the Optionee, his personal representatives, heirs and legatees. IN WITNESS WHEREOF, this Amendment shall become effective on the date first written above. INVESTORS TITLE COMPANY By: ----------------------- ATTEST: ____________________ Assistant Secretary (Corporate Seal) _________________________ Optionee 3 EX-27 3 0003.txt WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
7 *Not disclosed on a quarterly basis. 3-MOS 6-MOS DEC-31-2000 DEC-31-2000 MAR-31-2000 JUN-30-2000 26,019,938 25,939,238 4,471,811 4,305,264 0* 0* 5,002,307 4,963,176 0 0 0 0 35,572,911 35,286,660 6,637,676 8,619,670 0 0 0 0 53,649,495 55,217,546 15,964,665 16,309,665 0 0 191,502 212,981 0 0 0 0 0 0 0 0 1 1 36,549,212 37,020,091 53,649,495 55,217,546 8,370,138 18,435,170 591,791 1,168,108 62,867 84,766 301,437 675,670 1,244,804 3,067,126 0 0 7,502,222 15,779,716 579,207 1,516,872 57,600 260,506 521,607 1,256,366 0 0 0 0 0 0 521,607 1,256,366 .20 .48 .20 .48 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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