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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
_____ EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
_____ EXCHANGE ACT OF 1934
For the transition period from ________________________ to
---------------------------------.
Commission file number 0-19239
LAW COMPANIES GROUP, INC. 401(k) SAVINGS PLAN
(the "Plan")
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(Full title of the Plan)
LAWGIBB GROUP, INC.
1105 Sanctuary Parkway, Suite 300, Alpharetta, Georgia 30004
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(Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office)
Exhibit Index at Page 13
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REQUIRED INFORMATION
Audited financial statements and supplemental schedule for the Plan prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended, are filed herein in lieu of an audited
statement of financial condition and statement of income and changes in plan
equity.
Financial Statements and Exhibits
---------------------------------
A) The following financial statements and schedule are being filed pursuant to
the Required Information to Form 11-K:
1) Statements of Net Assets Available for Benefits - December 31, 1999
and 1998
2) Statement of Changes in Net Assets Available for Benefits -
Year Ended December 31, 1999
3) Schedule
a) Assets Held for Investment Purposes - December 31, 1999
B) The following exhibit is filed as part of this annual report:
Exhibit 23 Consent of Independent Auditors
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Audited Financial Statements and Supplemental Schedule
Law Companies Group, Inc.
401(k) Savings Plan
December 31, 1999 and 1998 and year
ended December 31, 1999
with Report of Independent Auditors
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Law Companies Group, Inc.
401(k) Savings Plan
Audited Financial Statements and Supplemental Schedule
December 31, 1999 and 1998 and year ended December 31, 1999
Contents
Report of Independent Auditors.................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits................................2
Statement of Changes in Net Assets Available for Benefits......................3
Notes to Financial Statements..................................................4
Supplemental Schedule
Schedule of Assets Held for Investment Purposes at End of Year................11
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Report of Independent Auditors
Plan Administrator
Law Companies Group, Inc. 401(k) Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Law Companies Group, Inc. 401(k) Savings Plan as of December 31, 1999 and
1998, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1999. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of Assets
Held for Investment Purposes at End of Year as of December 31, 1999 is presented
for purposes of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Atlanta, Georgia
June 20, 2000
1
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Law Companies Group, Inc.
401(k) Savings Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
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Assets
Investments at contract value (Note 3) $19,361,174 $16,426,838
Investments, at fair value 35,107,261 35,522,932
Contribution receivables:
Employer 42,935 -
Participants 170,600 -
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Total receivables 213,535 -
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Net assets available for benefits $54,681,970 $51,949,770
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See accompanying notes.
2
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Law Companies Group, Inc.
401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1999
Additions to net assets attributed to:
Participant contributions $ 5,795,566
Employer contributions 1,287,340
Investment income 1,540,110
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8,623,016
Deductions from net assets attributed to:
Distributions to participants 6,992,285
Administrative expenses 110,220
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7,102,505
Net realized and unrealized appreciation
in fair value of investments 1,211,689
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Net increase 2,732,200
Net assets available for benefits at beginning of year 51,949,770
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Net assets available for benefits at end of year $54,681,970
===============
See accompanying notes.
3
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Law Companies Group, Inc.
401(k) Savings Plan
Notes to Financial Statements
December 31, 1999
1. Description of Plan
The Law Companies Group, Inc. 401(k) Savings Plan (the "Plan") is a defined
contribution plan sponsored by LawGibb Group, Inc. (the "Company").
The following description of the Plan provides only general information.
Participants should refer to the Summary Plan Description for Law Companies
Group, Inc. 401(k) Savings Plan for a more complete description of the Plan's
provisions. Copies of this booklet are available from the plan administrator.
General
The Plan covers substantially all U.S. employees of the Company who are age
twenty-one or older. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).
Contributions
Each year, participants may contribute up to the lesser of 20% of their pre-tax
annual compensation, as defined by the Plan, or the maximum allowable by the
Internal Revenue Service. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans.
The Company matches 100% of contributions from participants on the first 1% of
the participant's compensation, and 50% of contributions from participants on
the next 2% of the participant's compensation. All contributions are remitted to
the Plan bi-weekly.
4
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Law Companies Group, Inc.
401(k) Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Participant Accounts
Each participant's account is credited with the participant's contributions,
rollovers and allocations of (a) the Company's contributions and (b) Plan
earnings and losses. Investment results are allocated to participant's accounts
based upon relative balances of the individual accounts on the valuation date as
defined by the Plan. Forfeited balances of terminated participants' non-vested
accounts are applied to future employer contributions and used to offset Plan
expenses. Forfeitures in 1999 approximated $260,000 and were applied to employer
contributions.
Vesting
Participants are immediately vested in their contributions plus earnings
thereon. Company contributions plus earnings thereon vest 100 percent after 5
years of credited service.
Payment of Benefits
The vested value of benefits are payable to a participant upon termination of
service, retirement, disability, or to the participant's beneficiary upon death
of the participant in either lump-sum or annuity distributions.
Participant Loans Receivable
A participant may borrow from his or her fund account a minimum of $1,000 up to
a maximum of the lesser of $50,000 or 50% of his/her vested account balance. The
loans bear interest at the prime rate plus 2% and must be repaid within 5 years.
The respective participant's loan principal and interest are repaid ratably
through bi-weekly payroll deductions.
5
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1. Description of Plan (continued)
Administrative Expenses
The Plan pays from the forfeiture account all administrative expenses not paid
by the Company. In 1999, the Company paid the majority of the Plan's
administrative expenses.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Valuation of Investments
The Plan has a group annuity contract with Massachusetts Mutual Life Insurance
Company (Mass Mutual). Mass Mutual receives contributions in exchange for
participation units in various investment options.
The fair values of the participation units owned by the Plan in Mass Mutual's
separate investment accounts are based on quoted redemption values as determined
by Mass Mutual on the last business day of the plan year. The investment in the
guaranteed income fund is stated at contract value, as determined by Mass
Mutual, which represents contributions made under the contract, plus interest,
less distributions and administrative expenses.
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2. Summary of Significant Accounting Policies (continued)
Valuation of Investments (continued)
Investments in LawGibb Group Common Stock are stated at fair value based on a
third party appraisal.
Reclassifications
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
3. Investments
During 1999, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated in fair value as determined by quoted
market prices for shares of pooled separate accounts and by a third party
appraisal for common stock as follows:
Net Realized and
Unrealized
Appreciation in Fair
Value of Investments
----------------------
Common Stock $ 401,236
Shares of pooled separate accounts 810,453
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$1,211,689
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3. Investments (continued)
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
December 31
1999 1998
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Massachusetts Mutual Life Insurance Company
Guaranteed Income Fund $19,361,174 $16,426,838
Core Equity Account 14,953,603 20,451,234
Balanced Account 4,129,534 5,895,221
Indexed Equity Account 3,014,081 -
Contrafund Account 6,026,736 -
Small Cap Equity Account - 3,041,629
4. Investment with Insurance Company
The guaranteed income fund held by the Plan is fully benefit-responsive and as
such has been recorded at contract value. The average yield for the guaranteed
income fund for the year ended December 31, 1999 and 1998 was 7.1%. The
crediting interest rate was also 7.1% at December 31, 1999 and 1998. At December
31, 1999 and 1998, the fair values of the investment accounts approximated
$20,168,000 and $17,019,000, respectively, as determined by Mass Mutual. The
Plan's intention is to hold the guaranteed income fund until maturity and to
make withdrawals from the accounts to pay benefits in the normal course of
operations of the Plan.
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5. Plan Termination
Under provisions of the Plan, the Company reserves the right to amend or
terminate the Plan at any time provided that amendments will not divert a vested
interest, permit any part of the Plan's assets to revert to the Company, or
permit any part of the Plan's assets to be used for any purpose other than for
the exclusive benefit of participants or their beneficiaries. Upon Plan
termination, each participant's account will become fully vested.
6. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated March 5, 1998, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
7. Transactions with Related Party
Effective May 14, 1996, the Plan was amended to eliminate the ability of
participants to invest in the Company common stock and to eliminate the
Company's matching contributions in the form of the Company common stock. As of
December 31, 1999 and 1998, the Plan held 43,300 and 59,310 shares of Company
common stock respectively, with a fair value of $1,230,604 and $1,284,058,
respectively.
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8. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
accompanying financial statements to those per the Form 5500 as of December 31:
1999 1998
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Net assets available for benefits per the
financial statements $54,681,970 $51,949,770
Benefits payable to participants (443,290) (494,671)
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Net assets available for benefits per
the Form 5500 $54,238,680 $51,455,099
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The following is a reconciliation of benefits paid to participants per the
financial statements to those per the Form 5500:
Year ended
December 31,
1999
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Benefits paid to participants per the financial statements $6,992,285
Benefits payable to participants at December 31, 1999 443,290
Benefits payable to participants at December 31, 1998 (494,671)
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Benefits paid to participants per the Form 5500 $6,940,904
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<TABLE>
<CAPTION>
Law Companies Group, Inc.
401(k) Savings Plan
EIN: 58-0537111
Plan Number: 002
Schedule H Line 4i
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
Identity of Issue, Borrower,
Lessor or Similar Party Description of Investment Cost Current Value
--------------------------------- ---------------------------------------- ----------- ----------------
<S><C> <C> <C> <C>
* Massachusetts Mutual Life Guaranteed Income Fund, (1) maturing
Insurance Company December 31, 2000, 7.1% $ 19,361,174
* Massachusetts Mutual Life
Insurance Company Core Equity Account 14,953,603
* Massachusetts Mutual Life
Insurance Company Balanced Account 4,129,534
* Massachusetts Mutual Life
Insurance Company Indexed Equity Account 3,014,081
* Massachusetts Mutual Life
Insurance Company Small Cap Equity Account 2,052,750
* Massachusetts Mutual Life
Insurance Company Core Bond Account 713,663
* LawGibb Group, Inc. LawGibb Common Stock 1,230,604
* Massachusetts Mutual Life
Insurance Company Money market account 414,746
* Massachusetts Mutual Life
Insurance Company Destiny Aggressive Account 445,179
* Massachusetts Mutual Life
Insurance Company Destiny Ultra Aggressive Account 90,549
* Massachusetts Mutual Life
Insurance Company Destiny Equity Account 312,859
* Massachusetts Mutual Life
Insurance Company Destiny Moderate Account 218,446
* Massachusetts Mutual Life
Insurance Company Contrafund Account 6,026,736
Participants Loans, rates from 9.75% to 11.00%,
maturing through December 31, 2004 1,504,511
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Total investments $54,468,435
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*Indicates a party-in-interest to the Plan.
(1)Reported at contract value.
Note: Cost information has not been included because all investments are participant directed.
</TABLE>
11
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SIGNATURE
The Plan.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on their behalf by the undersigned
hereunto duly authorized.
LAW COMPANIES GROUP, INC.
401(k) SAVINGS PLAN
/s/ R.B. Fooshee
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Robert B. Fooshee
Member of the Plan Administrative Committee
Dated: June 28, 2000
12
