<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 1)
Under the Securities Exchange Act of 1934
The Seibels Bruce Group, Inc.
-----------------------------
(Name of Issuer)
Common Stock, $1.00 par value per share
---------------------------------------
(Title of Class of Securities)
816006-10-0
--------------
(CUSIP Number)
Charles H. Powers
2419 Sumner Street Extension
Florence, South Carolina 29502
Telephone: (803) 661-1941
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with copy to:
Stephen M. Lynch, Esq.
Robinson, Bradshaw & Hinson, P.A.
1900 Independence Center
Charlotte, North Carolina 28246
(704) 377-2536
May 18, 1998
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
This Amendment contains 18 pages. The
exhibit index is on page 11.
1
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SCHEDULE 13D
CUSIP NO. 816006-10-0 13D PAGE 2 OF PAGES
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CHARLES H. POWERS
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF 1,890,801
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY --
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH 1,328,301
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
562,500
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,890,801
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.8%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
---------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 816006-10-0 13D PAGE 3 OF PAGES
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WALKER S. POWERS
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF 363,750
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH 251,250
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
112,500
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
363,750
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.6%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
---------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 816006-10-0 13D PAGE 4 OF PAGES
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JANE E. HUGGINS
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF --
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 90,624
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH --
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
90,624
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
90,624
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.2%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
---------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 816006-10-0 13D PAGE 5 OF PAGES
--------------------- -------- --------
(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
REX W. HUGGINS
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
PF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF --
SHARES ---------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 90,624
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH --
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
90,624
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
90,624
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.2%
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
---------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE> 6
PRELIMINARY STATEMENT
This Amendment No. 1 (this "Amendment") amends and supplements the
Statement on Schedule 13D dated October 3, 1996 as filed with the Securities and
Exchange Commission on October 7, 1996 (the "Statement"), with respect to the
shares of Common Stock, $1.00 par value per share (the "Common Stock"), of The
Seibels Bruce Group, Inc., a South Carolina corporation (the "Issuer"), by
Charles H. Powers, Walker S. Powers, Jane E. Huggins and Rex W. Huggins (the
"Reporting Persons"). All share and per share references included in this
Amendment reflect the Issuer's one-for-four reverse stock split effected in
April 1997. Capitalized terms used herein without definition have the same
meaning as those ascribed to them in the Statement.
Item 4. Purpose of Transaction.
Pursuant to the Stock Purchase Agreement dated January 29, 1996, as
amended, between the Issuer and the Reporting Persons (the "Purchase
Agreement"), on September 25, 1996. The Reporting Persons collectively purchased
from the Company 1,562,500 shares of Common Stock at a price of $4.00 per share
in cash and were issued options by the Company to acquire 781,250 shares of
Common Stock at an exercise price of the greater of $6.00 per share or book
value which expire on December 31, 1998 (the "Year 1998 Options") and options to
acquire 781,250 shares of Common Stock at an exercise price of the greater of
$8.00 per share or book value which expire on December 31, 2000 (the "Year 2000
Options"). The Purchase Agreement provides that the Reporting Persons will be
entitled to designate up to two persons for election to the Issuer's Board of
Directors. The Reporting Persons have designated Charles H. Powers and Walkers
S. Powers for election to the Issuer's Board of Directors, and they have been so
elected.
Pursuant to a Stock Option Purchase Agreement among the Reporting
Persons, High Ridge Capital Partners Limited Partnership ("High Ridge Partners")
and the Issuer dated November 20, 1997 and a Stock Option Purchase Agreement
among the Reporting Persons, High Ridge Capital LLC ("High Ridge Capital") and
the Issuer dated November 20, 1997 (collectively, the "Option Purchase
Agreements") the Reporting Persons agreed, subject to receipt of necessary
regulatory approvals, to sell to High Ridge Partners for a total consideration
of $1.00 in cash Year 1998 Options for 351,562 shares of Common Stock and Year
2000 Options for 351,562 shares of Common Stock and to sell to High Ridge
Capital for a total consideration of $1.00 in cash Year 1998 Options for 351,562
shares of Common Stock and Year 2000 Options for 351,562 shares of Common Stock.
The Option Purchase Agreements provide that in the event that High Ridge
Partners or High Ridge Capital exercises any of the Year 1998 Option or sells
any of the Year 1998 Options, it will pay to the Reporting Persons $2.00 per
share of Common Stock purchased upon such exercise or purchasable under the Year
1998 Option so transferred. The Issuer entered into the Option Purchase
Agreements to consent to the transfer of such options, and the transfer was
approved by the Issuer's Board of Directors.
The Reporting Persons had decided to transfer these options to High
Ridge Partners and High Ridge Capital for the limited consideration described
above as an inducement to High Ridge Partners and High Ridge Capital to permit a
principal of High Ridge Capital, James L. Zech, to
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<PAGE> 7
serve on the Issuer's Board of Directors. High Ridge Capital manages a private
equity fund focused exclusively on the property and casualty insurance, and the
Reporting Persons believed that Mr. Zech's experience in the property and
casualty insurance industry would be valuable and necessary to the Issuer.
Accordingly, the Reporting Persons recommended to the Issuer's Board of
Directors that Mr. Zech be elected to the Issuer's Board of Directors. Mr. Zech
was elected a director by the Issuer's Board of Directors on January 9, 1998.
The Reporting Persons may in the future recommend other changes to the
Issuer's Board of Directors, and Charles H. Powers and Walker H. Powers may, as
directors, be called upon to consider proposals made to, or considered by, the
Issuer's Board of Directors to change the number or term of directors or to fill
any existing vacancies on the Board of Directors.
In this regard, certain members of the Issuer's Board of Directors have
proposed reducing the size of the Board of Directors of the Issuer. Charles H.
Powers and Walker S. Powers intend to continue to participate in the
consideration of such proposals and may, from time to time in connection with
such discussions or otherwise, advance proposals to the Board of Directors or
others, including other shareholders, with respect to the size of the Board of
Directors and the individuals to serve on the Board of Directors.
In addition, the Reporting Persons may, from time to time, make other
proposals to protect their investment in the Issuer. Such proposals may concern
a sale of material transfer of the assets of the Issuer, an extraordinary
transaction, such as a merger, reorganization or liquidation, involving the
Issuer or any of its subsidiaries, a material change in the present
capitalization or dividend policy of the Issuer, other material changes in the
Issuer's business or corporate structure, changes to its charter or bylaws or
similar actions. In addition, the Reporting Persons may, from time to time,
acquire additional shares of Common Stock or dispose of shares of Common Stock.
Item 5. Interest in Securities of the Issuer.
(a) and (b) The following table sets forth the number of shares of
Common Stock beneficially owned by each of the Reporting Persons and
the extent to which each Reporting Person has sole voting power, shared
voting power, sole dispositive power or shared dispositive power with
respect to such shares:
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------------------------------------------------------------
Shared Voting Sole Dispositive Shared Dispositive
Reporting Person Sole Voting Power Power Power Power
---------------- ----------------- ------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Charles H. Powers 1,890,801(1) -- 1,328,301(2) 562,500(3)
Walker S. Powers 363,750(1) -- 251,250(2) 112,500(3)
Jane E. Huggins -- 90,624(1) -- 90,624(1)
Rex W. Huggins -- 90,624(1) -- 90,624(1)
</TABLE>
(1) Includes for Charles H. Powers options to acquire 563,750 shares of
Common Stock, of which options to acquire 562,500 shares are subject to
transfer pending regulatory
7
<PAGE> 8
approval; for Walker S. Powers options to acquire 113,750 shares of
Common Stock, of which options to acquire 112,500 are subject to
transfer pending approval; for each of Jane E. Huggins and Rex W.
Huggins options to acquire 28,124 shares of Common Stock that are
subject to transfer pending regulatory approval.
(2) Includes for each of Charles H. Powers and Walker S. Powers options to
acquire 1,250 shares of Common Stock.
(3) Represents shares that may be acquired upon exercise of options subject
to transfer pending regulatory approval.
(c) None.
(d) The information set forth in Items 4 and 6 of this Amendment
is incorporated herein by reference.
(e) Not applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships With Respect to
Securities of the Issuer.
The information set forth in Item 4 of this Amendment is incorporated
herein by reference.
Pursuant to a Stock Option Purchase Agreement (the "IBS Option
Agreement") among the Reporting Persons, IBS Consulting LLC ("IBS") and the
Issuer dated November 20, 1997 the Reporting Persons agreed to sell to IBS for a
total consideration of $1.00 in cash Year 1998 Options for 78,125 shares of
Common Stock and Year 2000 Options for 78,125 shares of Common. The IBS Option
Agreement provides that in the event that IBS exercises any of the Year 1998
Option or sells any of the Year 1998 Options, it will pay to the Reporting
Persons $2.00 per share of Common Stock purchased upon such exercise or
purchasable under the Year 1998 Option so transferred. IBS facilitated the
Reporting Persons' transfer of Year 1998 Options and Year 2000 Options to High
Ridge Partners and High Ridge Capital.
8
<PAGE> 9
Item 7. Material to be Filed as Exhibits.
The following documents are filed as exhibits to this Amendment:
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
99.1 Joint Filing Agreement dated May 18, 1998 among the Reporting
Persons
99.2 Stock Purchase Agreement dated January 29, 1996, as amended,
between the Issuer and the Reporting Persons (incorporated by
reference to Annex A to the Issuer's definitive proxy
statement on Schedule 14A filed with the Securities and
Exchange Commission on May 10, 1996)
99.3 Stock Option Agreement dated January 29, 1996, as amended,
between the Issuer and the Reporting Persons (incorporated by
reference to Annex B to the Issuer's definitive proxy
statement on Schedule 14A filed with the Securities and
Exchange Commission on May 10, 1996)
99.4 Stock Option Purchase Agreement among the Reporting Persons,
High Ridge Capital Partners Limited Partnership and the Issuer
dated November 20, 1997
99.5 Stock Option Purchase Agreement among the Reporting Persons,
High Ridge Capital LLC and the Issuer dated November 20, 1997
99.6 Stock Option Purchase Agreement among the Reporting Persons,
IBS Consulting LLC and the Issuer dated November 20, 1997
</TABLE>
9
<PAGE> 10
Signatures.
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this Amendment is
true, complete and correct.
Dated: May 18, 1998
/s/ Charles H. Powers
----------------------------------
Charles H. Powers
/s/ Walker S. Powers
----------------------------------
Walker S. Powers
/s/ Jane E. Huggins
----------------------------------
Jane E. Huggins
/s/ Rex W. Huggins
----------------------------------
Rex W. Huggins
10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
99.1 Joint Filing Agreement dated May 18, 1998 among the Reporting
Persons
99.2 Stock Purchase Agreement dated January 29, 1996, as amended,
between the Issuer and the Reporting Persons (incorporated by
reference to Annex A to the Issuer's definitive proxy
statement on Schedule 14A filed with the Securities and
Exchange Commission on May 10, 1996)
99.3 Stock Option Agreement dated January 29, 1996, as amended,
between the Issuer and the Reporting Persons (incorporated by
reference to Annex B to the Issuer's definitive proxy
statement on Schedule 14A filed with the Securities and
Exchange Commission on May 10, 1996)
99.4 Stock Option Purchase Agreement among the Reporting Persons,
High Ridge Capital Partners Limited Partnership and the Issuer
dated November 20, 1997 (incorporated by reference to Exhibit
II to the Schedule 13D of High Ridge Capital, LLC, HRC General
Partner Limited Partnership, High Ridge Capital Partners
Limited Partnership and James L. Zech with respect to the
Common Stock of The Seibels Bruce Group, Inc. filed with the
Securities and Exchange Commission on November 26, 1997)
99.5 Stock Option Purchase Agreement among the Reporting Persons,
High Ridge Capital LLC and the Issuer dated November 20, 1997
(incorporated by reference to Exhibit I to the Schedule 13D of
High Ridge Capital, LLC, HRC General Partner Limited
Partnership, High Ridge Capital Partners Limited Partnership
and James L. Zech with respect to the Common Stock of The
Seibels Bruce Group, Inc. filed with the Securities and
Exchange Commission on November 26, 1997)
99.6 Stock Option Purchase Agreement among the Reporting Persons,
IBS Consulting LLC and the Issuer dated November 20, 1997
</TABLE>
11
<PAGE> 1
EXHIBIT 99.1
JOINT FILING AGREEMENT
The undersigned parties hereby agree that the Schedule 13D/A filed
herewith (and any amendments thereto) relating to the stock of The Seibels Bruce
Group, Inc. is being filed jointly with the Securities and Exchange Commission
pursuant to Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended,
on behalf of each such person. In addition, each of the undersigned hereby
authorizes Charles H. Powers and Walker S. Powers and each of them, with full
power of substitution, to execute in the name and on behalf of the undersigned
any report pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended, including any amendment to the Schedule 13D/A filed herewith with
respect to the undersigned's beneficial ownership of securities, including
derivative securities, of The Seibels Bruce Group, Inc. (the "Company") and any
joint filing agreement with respect thereto and to file the same, with any
exhibits thereto (including this Joint Filing Agreement), and any amendments
thereto as the person(s) so acting deems appropriate with the Securities and
Exchange Commission, The Nasdaq Stock Market and the Company.
Dated: May 18, 1998
/s/ Charles H. Powers
----------------------------------
Charles H. Powers
/s/ Walker S. Powers
----------------------------------
Walker S. Powers
/s/ Jane E. Huggins
----------------------------------
Jane E. Huggins
/s/ Rex W. Huggins
----------------------------------
Rex W. Huggins
1
<PAGE> 1
EXHIBIT 99.6
STOCK OPTION PURCHASE AGREEMENT
This Stock Option Agreement, dated as of November 20, 1997 (this
"Agreement"), is made between and among Charles H. Powers, Walker S. Powers, Rex
Huggins and Jane Huggins (collectively, the "Sellers," and each individually a
"Seller"), IBS Consulting LLC, a North Carolina limited liability corporation
("IBS"), and The Seibels Bruce Group, Inc., a South Carolina corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of a Stock Option Agreement, dated as of
January 30, 1996, among the Sellers and the Company (the "Stock Option
Agreement") and a Stock Purchase Agreement, dated as of January 29, 1996, among
Charles H. Powers, Walker S. Powers and the Company (the "Stock Purchase
Agreement") the Sellers own options (the "Options") to purchase an aggregate of
1,562,500 shares of the common stock, par value $1.00 per share, of the Company
( the "Common Stock");
WHEREAS, one half of the Options expire on December 31, 1998 (the "1998
Options") and one half of the Options expire on December 31, 2000 (the "2000
Options"); and
WHEREAS, the Sellers propose to sell and assign a portion of such
Options to IBS, IBS has agreed to purchase such portion of such Options, and the
Company has consented to such sale and assignment, all in accordance with the
terms hereof.
NOW, THEREFORE, in consideration of the promises, representations,
warranties and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Sellers, jointly and severally, and IBS and the Company hereby agree as follows:
<PAGE> 2
1. Sale and Assignment.
Each of the Sellers hereby sells, transfers and assigns to IBS, Options
for the purchase of the number of shares of the common stock of the Company set
forth next to the name of such Seller below in this Section 1, together with all
rights and interests attendant to such Options pursuant to the Stock Option
Agreement and the Stock Purchase Agreement (other than Sections 6.1 and 7.2
thereof), and each of the Sellers acknowledges receipt of cash in the amount of
$1 from IBS:
<TABLE>
<CAPTION>
Number of Shares Number of Shares 2000
Name 1998 Options Options
- ---------------------------------------- -------------------------- --------------------------
<S> <C> <C>
Charles H. Powers 62,500 62,500
Walker S. Powers 12,500 12,500
Rex Huggins and Jane Huggins 3,125 3,125
------ ------
78,125 78,125
====== ======
</TABLE>
2. Company's Consent and Acknowledgment. The Company hereby
consents, pursuant to Section 3.2 of the Stock Option Agreement and Section
6.4(3) of the Stock Purchase Agreement and otherwise, to the sale and transfer
of the Options by the Sellers to IBS as provided herein. The Company
acknowledges and agrees that as to such Options, the terms of the Stock Option
Agreement will continue to apply and shall be enforceable in accordance with
their terms by and against IBS, including without limitation Section 2.4
thereof, which makes applicable to shares of Common Stock purchased through
exercise of the Options the provisions of Section 7 of the Stock Purchase
Agreement, which provide registration rights with respect to such shares. For
purposes of such Section 7, IBS shall be deemed a Purchaser thereunder and
2
<PAGE> 3
shall have the same rights as other Purchasers with respect to its shares (other
than Section 7.2 thereof).
3. IBS's Agreement to Be Bound.
IBS hereby acknowledges and agrees that with respect to the Options
purchased hereunder, and any shares of Common Stock acquired through exercise
thereof, it shall be bound by the terms of the Stock Option Agreement, including
without limitation Sections 2.6 and 3.2 thereof, which among other things
restrict transfers of the Options and shares of Common Stock acquired through
the exercise thereof. Without limiting the generality of the foregoing, IBS
hereby acknowledges and agrees it shall be bound by the provisions of Section
5.4 of the Stock Purchase Agreement entitled "Securities Act of 1933" (including
Sections 5.4.1 and 5.4.2 thereunder), Section 5.3 of the Stock Purchase
Agreement entitled "The Shares," Section 5.4 of the Stock Purchase Agreement
entitled "Cooperation with Filings," Section 6.4 of the Stock Purchase Agreement
entitled "Restrictions on Resale" and Section 9 of the Stock Purchase Agreement
entitled "Indemnification By the Purchasers" of the Stock Purchase Agreement
(including Sections 9.1 and 9.2 thereunder) provided, however, that IBS shall
not provide indemnification with respect to acts or omissions of any other
Purchaser.
4. Contingent Payment Obligation.
In the event that IBS should exercise any of the 1998 Options, or
transfer, sell or assign any of the 1998 Options to a party other than a party
controlled by or under common control with IBS, IBS shall, within 10 days after
any such transaction, pay in cash to the Sellers, pro rata in proportion to the
1998 Options sold by the respective Sellers hereunder, an amount equal to the
product of $2 and the number of shares of Common Stock subject to such 1998
Options exercised, transferred, sold or assigned by IBS. In the event of any
stock dividend, stock split,
3
<PAGE> 4
combinations of shares or other similar change with respect to the Common Stock
of the Company, the amount payable by IBS under this Section 4 shall be adjusted
accordingly.
5. Representations and Warranties by Sellers.
Each Seller jointly and severally represents, warrants and covenants as
follows:
(a) The Sellers have all right, title and interest in and to the
options, subject to no lien, encumbrance or right of any other party.
(b) The execution, delivery and performance of this Agreement by
the Sellers does not conflict with, or constitute a default under, any agreement
or instrument to which any Seller is a party or is bound.
6. Representations and Warranties by IBS.
IBS represents and warrants as follows:
(a) IBS is acquiring options hereunder for investment purposes
only.
(b) The execution, delivery and performance of this Agreement by
IBS does not conflict with or constitute a default under any Agreement or
instrument to which IBS is a party or is bound.
(c) IBS is a limited liability company formed under the laws of
the state of North Carolina. The execution and delivery of the agreement, the
receipt of the options and compliance by IBS with all of the other provisions of
this Agreement are within the powers and capacity of IBS.
(d) Except for a Form 13D under the United States Securities
Exchange Act of 1934 as amended, and Rule 13-3 thereunder, no approval, consent
or authorization of, or declaration or filing with, any governmental or judicial
authority is required in connection with the execution and delivery of the
Agreement by IBS or the performance by IBS hereunder.
4
<PAGE> 5
(e) This Agreement has been duty executed by or on behalf of IBS
and is a valid and binding obligation enforceable against IBS in accordance with
its terms, except as enforceability thereof may be limited by the exercise of
judicial discretion, the laws of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws from time to time in effect relating to or
affecting generally the enforcement of creditors' rights, and except as
enforcement of remedies may be limited by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
7. Amendments. No amendments or modification of this Agreement
will be effective unless it is in writing and duly executed by each party to be
charged thereunder.
8. Counterpart. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE SELLERS
/s/ Charle H. Powers
----------------------------------
Charles H. Powers
/s/ Walker S. Powers
----------------------------------
Walker S. Powers
/s/ Rex Huggins
----------------------------------
Rex Huggins
/s/ Jane Huggins
----------------------------------
Jane Huggins
5
<PAGE> 6
THE SEIBELS BRUCE GROUP, INC.
By: /s/ E.N. Csiszar
----------------------------------
Ernst N. Csiszar
President and Chief Executive Officer
THE BUYERS
IBS CONSULTING, LLC
By: /s/ Tony Stone
----------------------------------
Tony Stone
President
6
