<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended: June 30, 1996
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 1-11446
--------------
ACORDIA, INC.
-------------
(Exact Name of Registrant as
specified in its charter)
Delaware 31-1278880
------------ --------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
120 Monument Circle
Indianapolis, Indiana 46204
---------------------------------
(Address of principal executive offices)
(Zip Code)
(317) 488-6666
--------------------------------------
(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 or 15(d) 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 _______
-------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of June 30, 1996
----- -------------------------- ----
Common Stock, par value $1.00 a share 14,041,013 shares
This document is comprised of 35 pages.
<PAGE>
ACORDIA, INC.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS,
JUNE 30, 1996 AND DECEMBER 31, 1995.................... 1
CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS
AND QUARTER ENDED JUNE 30, 1996 AND 1995............... 2
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY FOR THE SIX MONTHS
ENDED JUNE 30, 1996 AND YEAR ENDED
DECEMBER 31, 1995...................................... 3
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
SIX MONTHS ENDED JUNE 30, 1996 AND 1995................ 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............. 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS............................................. 7
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................... 14
ITEM 2. CHANGES IN SECURITIES................................ 14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................... 14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.. 14
ITEM 5. OTHER INFORMATION.................................... 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................... 15
SIGNATURES.............................................................. 16
EXHIBIT 10.1 ROBERT C. NEVINS' EMPLOYMENT AGREEMENT..................... 17
EXHIBIT 10.2 KEITH A. MAIB EMPLOYMENT AGREEMENT......................... 24
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE.......................... 31
EXHIBIT 27 - FINANCIAL DATA SCHEDULE.................................... 32
EXHIBIT 99 - PRESS RELEASE ON THE ELECTION OF KEITH A. MAIB............. 33
<PAGE>
CONSOLIDATED BALANCE SHEETS
ACORDIA, INC.
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
JUNE 30 DECEMBER 31
1996 1995
ASSETS -------- ---------
- ------
Current assets:
Cash and cash equivalents $ 12,250 $ 11,160
Cash and cash equivalents held in
a fiduciary capacity 78,748 71,612
Premiums receivable, less
allowance for doubtful accounts
(1996 - $3,055; 1995 - $3,967) 132,870 149,639
Accounts receivable, less
allowance for doubtful accounts
(1996 - $416; 1995 - $421) 44,267 42,481
Accrued investment income 1,082 1,066
Deferred income taxes 4,280 1,515
Prepaid and other current assets 8,161 8,572
------------ -----------
Total current assets 281,658 286,045
Securities available-for-sale held in a
fiduciary capacity, at fair value 47,746 49,866
Other assets:
Cash escrow 6,714 6,562
Furniture, equipment and leasehold
improvements, less
accumulated depreciation 47,106 41,577
Goodwill and other intangible
assets, less accumulated
amortization 358,419 340,199
Other assets 14,133 12,202
------------ -----------
Total assets $755,776 $736,451
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Premiums due insurance companies $239,151 $248,546
Accounts payable 1,183 2,291
Accrued payroll and related
liabilities 17,156 15,479
Income taxes payable -- 505
Other liabilities and accrued
expenses 52,236 51,777
Current portion of long-term debt 9,976 15,053
------------ -----------
Total current liabilities 319,702 333,651
Long-term debt, less current portion 141,163 131,551
Other long-term liabilities, less
current portion 40,540 34,238
Deferred income taxes 32,325 24,936
------------ -----------
Total liabilities 533,730 524,376
Stockholders' equity:
Common stock, par value $1 per
share:
Authorized 100,000,000 shares;
issued and outstanding
(1996 - 14,041,013; 1995 -
13,961,741) 14,041 13,962
Additional paid-in capital 74,131 72,073
Stock warrants 10,000 10,000
Net unrealized (losses)
gains on securities (336) 360
Retained earnings 124,210 115,680
------------ -----------
Total stockholders' equity 222,046 212,075
------------ -----------
Total liabilities and stockholders'
equity $755,776 $736,451
============ ===========
See accompanying notes.
1
<PAGE>
ACORDIA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Revenues:
Commissions and fees $ 322,699 $ 261,571 $ 160,469 $ 131,028
Investment income 3,195 3,265 1,578 1,564
Net realized investment gains 38 420 38 320
Other 1,664 909 831 631
----------- ----------- ----------- ------------
Total revenues 327,596 266,165 162,916 133,543
Operating Expenses:
Employee compensation and benefits 178,963 142,900 89,518 72,431
Other 104,963 83,596 52,015 42,218
----------- ----------- ----------- ------------
283,926 226,496 141,533 114,649
----------- ----------- ----------- ------------
Operating profit 43,670 39,669 21,383 18,894
Interest expense 4,861 4,282 2,422 2,187
Amortization of goodwill and other
intangibles 12,646 11,266 6,337 5,712
----------- ----------- ----------- ------------
Income before income taxes 26,163 24,121 12,624 10,995
Income taxes 12,035 10,859 5,807 4,952
----------- ----------- ----------- ------------
Net income $ 14,128 $ 13,262 $ 6,817 $ 6,043
=========== =========== =========== ============
Earnings per share $0.98 $0.92 $0.47 $0.42
=========== =========== =========== ============
Weighted average shares outstanding 14,470,645 14,469,683 14,576,713 14,448,208
=========== =========== =========== ============
</TABLE>
See accompanying notes.
2
<PAGE>
ACORDIA, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NET
UNREALIZED
COMMON STOCK GAINS
------------ ADDITIONAL (LOSSES)
NUMBER OF PAID-IN STOCK ON RETAINED
SHARES PAR VALUE CAPITAL WARRANTS SECURITIES EARNINGS
---------- --------- ---------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 13,871,331 $13,871 $69,840 $10,000 $(1,823) $102,142
Issuance of stock for Company
plans 90,410 91 2,233 -- -- --
Net income -- -- -- -- -- 23,582
Dividends paid ($0.72 per share) -- -- -- -- -- (10,044)
Decrease in net unrealized losses
on securities available-for-
sale, less taxes of $230 -- -- -- -- 2,183 --
---------- --------- ---------- -------- ----------- ---------
Balance at December 31, 1995 13,961,741 13,962 72,073 10,000 360 115,680
Issuance of stock for Company
plans 79,272 79 2,058 -- -- --
Net income -- -- -- -- -- 14,128
Dividends paid ($0.40 per share) -- -- -- -- -- (5,598)
Decrease in net unrealized gains
on securities available-for-
sale, less taxes of $230 -- -- -- -- (696) --
---------- --------- ---------- -------- ----------- ---------
Balance at June 30, 1996 -
(unaudited) 14,041,013 $14,041 $74,131 $10,000 $ (336) $124,210
========== ========= ========== ======== =========== =========
See accompanying notes.
</TABLE>
3
<PAGE>
ACORDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 14,128 $ 13,262
Adjustments to reconcile net income to net cash
provided by (used by) operating activities:
Depreciation and amortization 20,332 17,124
Deferred income taxes (3,046) (3,071)
Losses on receivables 541 562
Loss on sale of furniture and equipment 24 (40)
Changes in operating assets and liabilities, net of
effect of purchases of subsidiaries:
Premiums receivable 18,686 2,563
Accounts receivable (232) (3,927)
Accrued investment income (16) 199
Other assets (103) (4,300)
Premiums due insurance companies (19,374) 4,126
Accounts payable and accrued liabilities (2,334) (19,129)
Income taxes payable (1,222) (7,327)
-------- --------
Net cash provided by operating activities 27,384 42
INVESTING ACTIVITIES:
Furniture, equipment and leasehold improvement additions (13,957) (9,865)
Proceeds from sales of furniture and equipment 1,404 4,189
Purchases of subsidiaries, net of cash acquired and
cash escrow (7,946) (11,616)
-------- --------
Net cash used in investing activities (20,499) (17,292)
FINANCING ACTIVITIES:
Proceeds from borrowings 9,000 24,005
Payments on borrowings (11,334) (8,212)
Issuance of stock for Company plans 2,137 2,163
Dividends paid (5,598) (5,019)
-------- --------
Net cash (used in) provided by financing activities (5,795) 12,937
-------- --------
Net increase (decrease) in cash and cash equivalents 1,090 (4,313)
Cash and cash equivalents at beginning of period 11,160 13,374
-------- --------
Cash and cash equivalents at end of period $ 12,250 $ 9,061
======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
ACORDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1996
NOTE 1 -- BASIS OF PRESENTATION
- ----------------------------------
The accompanying unaudited consolidated financial statements of Acordia, Inc.
(the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management all adjustments, consisting of normal recurring accruals, considered
necessary for a fair presentation have been included. Operating results for the
six month period ended June 30, 1996, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1996. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
NOTE 2 -- NEW ACCOUNTING STANDARD
- ------------------------------------
In October 1995, the Financial Accounting Standards Board issued SFAS No. 123,
"Accounting for Stock-Based Compensation," which is effective for fiscal years
beginning after December 15, 1995. In accordance with the statement, the
Company will provide new footnote disclosures in its 1996 annual report
presenting pro forma net income and earnings per share amounts as if employee
stock options had been expensed based on their estimated fair value on the grant
date, determined by using certain option pricing models.
NOTE 3 -- ACQUISITIONS
- -------------------------
During the first six months of 1996, the Company made acquisitions at an
aggregate cost, including future contingent payments, of approximately $24.5
million. The excess of the total acquisition cost over the net assets acquired
of approximately $33.5 million was assigned to goodwill and other intangible
assets. At June 30, 1996, the cash escrow represents funds on deposit to fund
future obligations related to a 1995 acquisition.
All of these acquisitions have been accounted for as purchases, and the net
assets and results of operations are included in the Company's consolidated
financial statements from the respective purchase dates.
Subsequent to June 30, 1996, the Company acquired two insurance brokers that in
the aggregate had 1995 revenues of approximately $11.5 million.
NOTE 4 -- RELATED PARTIES
- ----------------------------
In October 1995, Anthem Insurance Companies, Inc. ("Anthem") Board of Directors
authorized the purchase of up to one million shares of the Company's common
stock. Purchases are made from time to time in the open market at prevailing
prices or in privately negotiated transactions. Since October 1995, Anthem has
purchased 481,500 shares of the Company's common stock resulting in Anthem's
ownership increasing to 62% as of June 30, 1996. Approximately 40% of the
Company's revenues during the six months ended June 30, 1996 are related to
insurance products placed with Anthem and its wholly owned insurance affiliates.
During October 1995 and March 1996, the Company entered into additional
agreements with Anthem and its affiliates to perform certain marketing services
in connection with Anthem's insurance products in select geographic and
demographic markets.
5
<PAGE>
NOTE 5 -- CONTINGENCIES
- --------------------------
The Company and its subsidiaries are subject to claims and lawsuits that arise
in the ordinary course of business. Some of these cases are being litigated in
jurisdictions which have judicial precedence and evidentiary rules which are
generally believed to favor individual plaintiffs against corporate defendants.
The damages that may be claimed in such cases can be substantial, but are often
covered by insurance. Accruals for these claims and lawsuits have been provided
to the extent that losses are deemed probable and are estimable.
On April 17, 1996, National Benefits Consultants, LLC ("plaintiff") filed suit
in California Superior Court against one of the Company's operating
subsidiaries, as well as Anthem, an affiliated company. The suit alleges breach
of an engagement letter allegedly entered into among the parties. Plaintiff
seeks actual damages in excess of $100 million, as well as additional
unspecified damages and punitive damages. Management believes that it has
meritorious defenses to this lawsuit and will vigorously defend it, as well as
pursue all of its legal rights and remedies against the plaintiff and others.
Although the ultimate outcome of these suits cannot be ascertained and
liabilities in indeterminate amounts may be imposed on the Company or its
subsidiaries, on the basis of present information, and advice received from
counsel, it is the opinion of management that the disposition or ultimate
determination of such claims and lawsuits will not have a material effect on the
consolidated financial position of the Company.
The Company is unaware of any current recommendations by regulatory authorities
that could have a material effect on liquidity, capital resources or operations
of the Company.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Six Months Ended June 30, 1996 and 1995
- ---------------------------------------
Operating profit for the six months ended June 30, 1996, was $43.7 million, an
increase of 10 percent over operating profit of $39.7 million for the comparable
period in 1995. Net income for the six months ended June 30, 1996, was $14.1
million, an increase of 6 percent over net income of $13.3 million for the
comparable period in 1995. Total stockholders' equity was $222.0 million at June
30, 1996, compared to $212.1 million at December 31, 1995.
REVENUES
Total revenues for the six months ended June 30, 1996, were $327.6 million, an
increase of 23% over revenues of $266.2 million for the comparable period in
1995.
Total related party revenues were $131.2 million and $114.3 million for the six
months ended June 30, 1996 and 1995, respectively. The net increase was
primarily attributable to new agreements with Anthem Insurance Companies,
Inc. ("Anthem").
Commissions and Fees
Commissions and fees for the six months ended June 30, 1996 were $322.7 million,
an increase of 23% over commissions and fees of $261.6 million for the
comparable period in 1995. New acquisitions accounted for approximately $34.1
million of the increase. The remaining increase of approximately $27.0 million
resulted primarily from net new business, the establishment of new agreements
with Anthem and growth in contingent commissions from unaffiliated carriers.
Investment Income
Investment income and net realized investment gains were was $3.2 million
and $3.7 million for the six months ended June 30, 1996 and 1995, respectively.
Investment income consists primarily of interest earned on premiums and claims
collected and held prior to being remitted to insurers and clients. Such funds
are held in a fiduciary capacity. Net investment yield was approximately 5.1%
and 5.6% for the six months ended June 30, 1996 and 1995, respectively.
Other Revenues
Other revenues include revenues from marketing and consulting services, gains
and losses on the sale of fixed assets and other miscellaneous items. Such
revenues were $1.7 million and $0.9 million for the six months ended June 30,
1996 and 1995, respectively.
7
<PAGE>
EXPENSES
- --------
Total operating expenses for the six months ended June 30, 1996, were $283.9
million, an increase of 25% over operating expenses of $226.5 million for the
comparable period in 1995. The majority of the increase was due to new
acquisitions and expansion of existing operations.
Reimbursements to Anthem pursuant to an intercompany services agreement were
$37.4 million and $20.6 million for the six months ended June 30, 1996 and 1995,
respectively. The increase was primarily attributable to agreements with
Anthem.
Employee Compensation and Benefits
Employee compensation and benefits costs for the six months ended June 30, 1996,
were $179.0 million, an increase of 25% over employee compensation and benefits
of $142.9 million for the comparable period in 1995. New acquisitions accounted
for approximately $21.4 million of the increase. The remaining increase of $14.7
million was principally due to the expansion of existing operations, including
the new agreements with Anthem.
Other Operating Expenses
Other operating expenses for the six months ended June 30, 1996, were $105.0
million, an increase of 26% over other operating expenses of $83.6 million for
the comparable period in 1995. New acquisitions accounted for the majority of
this increase with the remaining costs associated with the expansion of existing
operations, including the new agreements with Anthem.
Interest Expense and Amortization of Goodwill and Other Intangible Assets
Interest expense for the six months ended June 30, 1996 and 1995, respectively,
was $4.9 million and $4.3 million. Interest expense increased due to additional
borrowings under the revolving credit agreement. These borrowings were
used to finance acquisitions and the general needs of the Company.
Acquisitions made subsequent to June 30, 1995, resulted in an additional $45.7
million of goodwill and other intangible assets. Such increases, less the effect
of certain assets being fully amortized, caused amortization expense to increase
to $12.6 million for the six months ended June 30, 1996 compared to $11.3
million for the comparable period in 1995.
Income Taxes
The Company's effective income tax rates for the six months ended June 30, 1996
and 1995, were 46.0% and 45.0%, respectively. Income taxes include both federal
and state income taxes. The effective tax rates are higher than the U.S.
statutory rate of 35 percent primarily due to U.S. state and local income taxes
and to the non-deductibility of certain expenses, including meals and
entertainment and amortization of goodwill and other intangible assets related
to prior and current year acquisitions.
8
<PAGE>
Three Months Ended June 30, 1996 and 1995
- -----------------------------------------
Operating profit for the three months ended June 30, 1996, was $21.4 million, an
increase of 13 percent over operating profit of $18.9 million for the comparable
period in 1995. Net income for the three months ended June 30, 1996, was $6.8
million, an increase of 13 percent over net income of $6.0 million for the
comparable period in 1995. Total stockholders' equity was $222.0 million at June
30, 1996, compared to $216.9 million at March 31, 1996.
REVENUES
Total revenues for the three months ended June 30, 1996, were $162.9 million, an
increase of 22% over revenues of $133.5 million for the comparable period in
1995.
Total related party revenues were $66.2 million and $61.4 million for the three
months ended June 30, 1996 and 1995, respectively. The net increase was
primarily attributable to new agreements with Anthem.
Commissions and Fees
Commissions and fees for the three months ended June 30, 1996 were $160.5
million, an increase of 23% over commissions and fees of $131.0 million for the
comparable period in 1995. New acquisitions accounted for approximately $17.9
million of the increase. The remaining increase of approximately $11.6 million
resulted primarily from net new business, the establishment of new agreements
with Anthem and growth in contingent commissions from unaffiliated carriers.
Investment Income
Investment income and net realized investment gains were $1.6 million
and $1.9 million for the three months ended June 30, 1996 and 1995,
respectively. Investment income consists primarily of interest earned on
premiums and claims collected and held prior to being remitted to insurers and
clients. Such funds are held in a fiduciary capacity.
Other Revenues
Other revenues include revenues from marketing and consulting services, gains
and losses on the sale of fixed assets and other miscellaneous items. Such
revenues were $0.8 million and $0.6 million for the three months ended June 30,
1996 and 1995, respectively.
EXPENSES
- --------
Total operating expenses for the three months ended June 30, 1996, were $141.5
million, an increase of 23% over operating expenses of $114.6 million for the
comparable period in 1995. The majority of the increase was due to new
acquisitions and expansion of existing operations.
Reimbursements to Anthem pursuant to an intercompany services agreement were
$21.2 million and $10.9 million for the three months ended June 30, 1996 and
1995, respectively. The increase was primarily attributable to new agreements
with Anthem.
9
<PAGE>
Employee Compensation and Benefits
Employee compensation and benefits costs for the three months ended June 30,
1996, were $89.5 million, an increase of 24%, over employee compensation and
benefits of $72.4 million for the comparable period in 1995. New acquisitions
accounted for approximately $11.4 million of the increase. The remaining
increase of $5.7 million was principally due to the expansion of existing
operations, including the new agreements with Anthem.
Other Operating Expenses
Other operating expenses for the three months ended June 30, 1996, were $52.0
million, an increase of 23% over other operating expenses of $42.2 million for
the comparable period in 1995. New acquisitions accounted for the majority of
this increase with the remaining costs associated with the expansion of existing
operations, including the new agreements with Anthem.
Interest Expense and Amortization of Goodwill and Other Intangible Assets
Interest expense for the three months ended June 30, 1996 and 1995,
respectively, was $2.4 million and $2.2 million. Interest expense increased due
to additional borrowings under the revolving credit agreement. These
borrowings were used to finance acquisitions and the general needs of the
Company.
Acquisitions, less the effect of certain assets being fully amortized, caused
amortization expense to increase to $6.3 million for the three months ended June
30, 1996 compared to $5.7 million for in the comparable period in 1995.
Income Taxes
The Company's effective income tax rates for the three months ended June 30,
1996 and 1995, were 46.0% and 45.0%, respectively. Income taxes include both
federal and state income taxes. The effective tax rates are higher than the
U.S. statutory rate of 35 percent primarily due to U.S. state and local income
taxes and to the non-deductibility of certain expenses, including meals and
entertainment and amortization of goodwill and other intangible assets related
to prior and current year acquisitions.
FINANCIAL CONDITION
- -------------------
During 1996, cash flow generated from operations and funds available under the
revolving credit agreement were sufficient to fund the operating and capital
expenditure requirements of the Company. The Company's business is not capital
intensive. The Company anticipates that cash flow from operations and, if
necessary, borrowings under its existing credit agreement will be sufficient to
fund the liquidity needs of the Company. Cash generated from operating
activities was $27.4 million and zero for the six months ended June 30, 1996 and
1995, respectively.
The Company maintains a high quality investment portfolio consisting of
securities which the Company believes to be readily marketable. There are no
derivatives in the portfolio.
The Company maintains a $150 million revolving credit agreement with a syndicate
of banks. The revolving credit agreement matures in November 1998, and with the
consent of the lenders it may be extended for an additional term of one year.
The revolving credit agreement requires the Company to maintain certain
financial ratios and comply with certain other covenants.
10
<PAGE>
Additionally, the cost of funds increases and decreases with the Company's debt
leverage. The agreement does not restrict the payment of dividends.
As of June 30, 1996, long-term debt, excluding the current portion due, totaled
$141.2 million, which compares to $131.6 million at December 31, 1995.
Borrowings under the revolving credit agreement were $127.0 million at June 30,
1996 and $118.0 million at December 31, 1995.
Capital expenditures were $14.0 million and $9.9 million for the six months
ended June 30, 1996 and 1995, respectively. The increase primarily resulted
from additional leasehold improvements made as a result of certain existing
company offices expanding into additional space.
Net cash flow (used in)/provided by financing activities totaled $(5.8 million)
and $12.9 million for the six months ended June 30, 1996 and 1995, respectively.
On January 31, 1996, the Board of Directors increased the quarterly dividend by
11% to $0.20 per share of common stock per annum. The dividend had previously
been increased by 20% to $0.18 per share of common stock per annum on February
6, 1995. The Company intends to continue to pay quarterly dividends.
Other long-term liabilities primarily consist of future payments relating to
contractual agreements negotiated with the previous owners of acquired
businesses, deferred lease incentives and other liabilities not due within one
year including liabilities relating to the Company's retirement and employee
benefit plans. The future contingent payments to the previous owners of acquired
businesses are generally based upon the amount of net commission income
generated from the books of business acquired. These amounts were $21.4 million
and $19.8 million at June 30, 1996 and December 31, 1995, respectively.
OUTLOOK
- -------
In 1995, the Company and Anthem, as a part of their continuing strategic
initiatives, began a project with the assistance of an outside consultant to
look at ways to reduce their administrative expenses. The Company believes that
the probable long-term outcome of this effort will be to reduce administrative
cost through the introduction of enabling technology in the Company's core
health administrative processes, the consolidation of processing sites, the
increased use of automation in the Company's property and casualty brokerage
business and the outsourcing or elimination of non value-added services (mail
rooms, data entry, etc.). The Company and Anthem believe that these changes
and improved efficiencies will be necessary in order for the Company's
products to remain competitive over the next several years.
In October 1995, Anthem's Board of Directors authorized the purchase of up to
one million shares of the Company's common stock. Purchases are made from time
to time in the open market at prevailing prices or in privately negotiated
transactions. Since October 1995, Anthem has purchased 481,500 shares of the
Company's common stock resulting in Anthem's ownership increasing to 62% as of
June 30, 1996. Approximately 40% of the Company's revenues during the six months
ended June 30, 1996 are related to insurance products placed with Anthem and its
wholly owned insurance affiliates.
Since its' inception in 1989, the Company has derived a substantial, although
declining, percentage of its' revenues and profits from providing marketing and
administrative services for or on behalf of Anthem and its affiliates. Many
administrative functions are those related to claims processing. Due to market
driven pressures, over time the claims processing function will become more
standardized and automated, and be less of a differentiating, value added
service for the Company's clients. In anticipation of these changes, the
Company has initiated plans to improve efficiencies and consolidate certain of
these functions. As a part of these efforts to
11
<PAGE>
improve efficiencies and consolidate functions, the Company and Anthem have
announced their intent for their relationship to evolve so that the Company's
relationship with Anthem is principally as a sales, underwriting management and
marketing and customer service arm for Anthem, with less involvement in claims
processing. Specifically, Anthem and Acordia have agreed that Acordia will
assume virtually all of the wholesale distribution functions for Anthem products
nationwide while Anthem will reassume and consolidate certain administrative
functions currently being performed by the Company outside of the midwest
region. As part of the restructured arrangement, the Company will no longer
receive contingent commissions related to the health business placed with
Anthem.
The revenue and profits from the new arrangements with Anthem are expected to
at least offset the lost profits from contingent commissions and any lost
profits from Anthem reassuming certain administrative functions.
Acquisitions have been an important historical part of the Company's strategy to
become a full-service insurance broker to mid-market companies in targeted
areas. The Company is regularly engaged in discussions with third parties
regarding potential acquisitions but has no current commitments or agreements
which individually or in the aggregate would be material. No assurances can be
given with respect to the likelihood or financial or business effect of any
possible future acquisition.
Softness in the property and casualty insurance market and uncertainty about the
effects of national and state health care reform initiatives continues. The
underwriting capacity of property and casualty insurance companies has continued
to expand, increasing competition and decreasing premium rates, thereby reducing
related commissions and fees.
Many states where the Company does business have already initiated various
healthcare reforms, and many more are considering them. In these states and
elsewhere, the Company has joined with providers and has developed information
systems to manage costs and is providing clients with managed care products,
services and advice.
The statements under "Outlook" and the other statements which are not historical
facts are forward looking. Such statements involve a number of risks and
uncertainties. While the statements represent Acordia's current judgement as to
the near term future of its business, such risks and uncertainties could cause
actual results to
12
<PAGE>
differ from the above statements. Factors which could cause actual results to
differ include the following: the effect of economic conditions, cyclicallity of
property and casualty and health insurance markets, the impact of competitive
products and pricing, product development, technological difficulties, the
results of financing efforts, the effect of the Company's accounting policies,
unanticipated regulatory changes having the effect of lowering prices and other
risks.
13
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
The Company and its subsidiaries are subject to claims and lawsuits that arise
in the ordinary course of business. Some of these cases are being litigated in
jurisdictions which have judicial precedence and evidentiary rules which are
generally believed to favor individual plaintiffs against corporate defendants.
The damages that may be claimed in such cases can be substantial, but are often
covered by insurance. Accruals for these claims and lawsuits have been provided
to the extent that losses are deemed probable and are estimable.
On April 17, 1996, National Benefits Consultants, LLC ("plaintiff") filed suit
in California Superior Court against one of the Company's operating
subsidiaries, as well as Anthem, an affiliated company. The suit alleges breach
of an engagement letter allegedly entered into among the parties. Plaintiff
seeks actual damages in excess of $100 million, as well as additional
unspecified damages and punitive damages. Management believes that it has
meritorious defenses to this lawsuit and will vigorously defend it, as well as
pursue all of its legal rights and remedies against the plaintiff and others.
Although the ultimate outcome of these suits cannot be ascertained and
liabilities in indeterminate amounts may be imposed on the Company or its
subsidiaries, on the basis of present information, and advice received from
counsel, it is the opinion of management that the disposition or ultimate
determination of such claims and lawsuits will not have a material effect on the
consolidated financial position of the Company.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders on May 20, 1996. The
following is a summary of the matters voted on at that meeting.
(a) Election of Directors to serve three year terms ending at the Company's
1999 annual meeting:
Nominee Votes For Votes Withheld
---------------- ----------------- --------------
John C. Crane 13,690,447 84,906
Ernie Green 13,690,447 84,906
Dwane R. Houser 13,690,063 85,290
Thomas C. Roberts 13,690,447 84,906
Michael L. Smith 13,690,447 84,906
14
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(b) Ratification of amendment of Acordia, Inc.
Director's Stock Compensation Plan:
Votes For: 13,622,347
Votes Against 85,206
Abstained 67,800
(c) Ratification of amendment of Acordia, Inc. 1992
Stock Compensation Plan:
Votes For: 12,842,401
Votes Against 899,433
Abstained 33,519
(d) Ratification of appointment of Ernst & Young LLP
as the Company's principal independent auditors:
Votes For: 13,753,007
Votes Against 4,282
Abstained 18,064
Item 5. Other Information
In August 1996, the Company's Board of Directors appointed Keith Maib, as the
Company's new Executive Vice President and Chief Financial Officer. Mr. Maib,
age 37, succeeds Patrick M. Sheridan who had served as the Company's Chief
Financial Officer since its founding in 1989. Mr. Sheridan will continue as
Chief Financial Officer of Anthem, and will remain as a director of the Company.
For the last year and a half, Mr. Maib was a partner in the Dallas and New York
offices of Coopers & Lybrand, L.L.P. From February 1994 to December 1994 he
served as Chief Operating Officer of Borland International, Inc., a California-
based international software developer. Prior to 1994, Mr. Maib was a partner
with Price Waterhouse, L.L.P.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 10.1 - Employment Agreement dated April 1, 1996 with Robert C. Nevins
Exhibit 10.2 - Employment Agreement dated August 1, 1996 with Keith A. Maib
Exhibit (11) - Computation of earnings per share
Exhibit 99 - Press Release on the election of Keith A. Maib
During the second quarter of the fiscal year covered by this report, no report
on Form 8-K was filed.
15
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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, thereunto duly authorized.
ACORDIA, INC.
(Registrant)
Date: 8/14/96 /s/Robert S. Schneider
- ---------------------------------------- ------------------------------------
Robert S. Schneider
Senior Vice President and
Controller
16
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EXHIBIT 10.1
------------
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT ("Agreement"), between Acordia, Inc., a Delaware
corporation (the "Company"), and Robert C. Nevins (the "Executive"), dated as of
the 1st day of April, 1996.
W I T N E S S E T H:
-------------------
WHEREAS, the Company desires to assure itself of the services of Executive
for the period provided in this Agreement, and Executive is willing to serve in
the employ of the Company on a full-time basis for such period, all in
accordance with the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby employs Executive, and Executive hereby
----------
accepts such employment with the Company for the period provided for in Section
2, all upon the terms and conditions contained in this Agreement. As a
condition to Executive's employment by the Company, Executive affirms and
represents that Executive is under no obligation to any former employer or other
person which is in any way inconsistent with, or which imposes any restriction
upon, Executive's acceptance of employment with the Company, the employment of
Executive by the Company, or Executive's undertakings under this Agreement.
2. Term of Employment. Unless sooner terminated pursuant to Section 15,
------------------
the term of Executive's employment under this Agreement shall be for a period
commencing on the date hereof and continuing for twenty-one ( 21) months through
December 31, 1997 (the "Initial Term"). If no termination has occurred pursuant
to Section 15 of this Agreement on or before November 30 of the then current
year, it being expressly understood and agreed that the Company does not now,
nor hereafter shall have any obligation to continue Executive in its employ
after expiration of the Initial Term, this Agreement shall automatically be
extended for an additional year term unless either party gives written notice of
the non-renewal to the other party on or before November 30th of the then
current year.
3. Duties. During the Employment Term, Executive shall render general
------
administrative and managerial services to the Company, or any Subsidiary to
which the Executive is assigned ("Assigned Subsidiary"), and shall perform such
other reasonable employment duties as the Chief Executive Officer of the
Company, or the Board of Directors of the Assigned Subsidiary, may from time to
time prescribe. During the Employment Term, Executive shall also serve, if
elected, as an officer or director of the Company or any of its subsidiaries,
including, but not limited to, the Assigned Subsidiary. Executive shall perform
his duties at such places and times as the Chief Executive Officer of the
Company or the Board of Directors of the Assigned Subsidiary may reasonably
prescribe. Except as may otherwise be approved in advance by the Board of
Directors of the Assigned Subsidiary with respect to memberships on the Boards
of Directors of, and other offices or positions in, companies or organizations
which, in their judgment, will not present any conflict of interest with the
Company or any of its subsidiaries or materially affect the performance of
Executive's duties and except during vacation periods and reasonable periods of
absence due to sickness, personal injury or other disability, Executive shall
devote his full time throughout the Employment Term to the services required of
Executive. Executive shall render his services exclusively to the Company and
its subsidiaries during the Employment Term, and shall use his best efforts,
judgment and
17
<PAGE>
energy, to improve and advance the business and interests of the
Company and its subsidiaries in a manner consistent with the duties of
Executive's position.
4. Salary. As compensation for the services to be performed by Executive
------
during the Employment Term, the Company shall pay or shall cause to be paid to
Executive, an annual base salary of not less than Two Hundred Twenty-five
Thousand Dollars ($225,000) (the "Base Salary"); the Base Salary together with
any adjustments or increments thereto being hereinafter referred to as the
"Salary." The payment of any Salary hereunder shall be subject to applicable
withholding and payroll taxes, and such other deductions as may be required
under the Company's employee benefit plans. Any Salary payable shall be paid in
installments in accordance with the Company's salary administration practices as
they may from time to time exist and subject to withholdings and payroll
deductions.
5. Benefits. In addition to the payments required by section 4 to be paid
--------
to Executive during the Employment Term, Executive shall:
(a) be eligible to participate in all employee fringe benefits,
stock option, bonus and incentive compensation programs or plans and any
pension and/or profit sharing plans that may be provided by the Company for
its key executive employees in accordance with the provisions of any such
programs or plans; provided, however, that the Company expressly reserves
the right to alter, modify, amend or terminate any such programs or plans
at any time and for any reason during the Employment Term;
(b) participate in any life or other similar insurance plans,
medical and health plans or other employee welfare benefit plans that may
be provided by the Company for its key executive employees in accordance
with the provisions of any such plans;
(c) be entitled to annual paid vacation in accordance with
Company policy that may be applicable to key executive employees; and
(d) be entitled to sick leave and sick pay in accordance with any
Company policy that may be applicable to key executive employees.
6. Expenses. The Company shall, upon submission of expense reports
--------
acceptable to the Company, reimburse Executive in accordance with existing
Company policy for all reasonable and necessary business expenses incurred by
him in connection with the performance of Executive's obligations.
7. Death of Executive. In the event Executive's employment is
------------------
terminated as a result of Executive's death, Executive's spouse or, if the
Executive is not married at the time of his death, the estate of Executive shall
be entitled to receive Executive's Salary earned through the date of death.
8. Disability of Executive. In the event Executive's employment is
-----------------------
terminated as a result of Disability, as defined in section 15 of this
Agreement, Executive shall be entitled to receive his Salary and Benefits as
described in sections 4 and 5 of this Agreement through the date of termination.
9. Termination of Executive Other Than for Cause. In the event
---------------------------------------------
Executive's employment is terminated by the Company other than for cause (as
defined in section 15 of this Agreement), Executive shall be entitled to receive
the greater of (i) twelve months Salary or (ii) the Salary remaining to be paid
through the date the Agreement would have expired but for such termination; such
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<PAGE>
amount to be paid in monthly installments or in one lump sum, at the option of
the Company, as soon as reasonably possible following the termination of
Executive.
10. Employment Relationship. Executive acknowledges that Executive's
------------------------
employment by the Company creates a relationship of confidence and trust between
Executive and the Company with respect to certain information applicable to the
business of any Existing Client or Potential Client (as the terms "Existing
Client" and "Potential Client" are respectively defined in Section 15) of the
Company or its subsidiaries which may be made known to Executive during the
period of his employment.
11. Proprietary and Confidential Information. Executive acknowledges
-----------------------------------------
that the Company possesses and will continue to possess information that has
been created, discovered or developed by, or otherwise become known to it
(including, without limitation, information created, discovered, developed or
made known by Executive during the period of or arising out of his employment)
or in which property rights have been or may be assigned or otherwise conveyed
to the Company which information has commercial value in the Business and is
treated by the Company as confidential. Executive further acknowledges and
agrees that the success of the Company's Business depends, in part, upon an in-
depth knowledge of the needs of the Company's customers and clients and serving
these needs through frequent contacts, and that the Company has invested
substantial time, money and manpower to develop such relationships.
12. Non-Disclosure. Executive shall not without the prior written
--------------
consent of the Chief Executive Officer of the Company (i) use for Executive's
benefit or disclose at any time during Executive's employment by the Company, or
thereafter, except to the extent required by the performance by Executive of his
duties as an executive of the Company, any information obtained or developed by
Executive while in the employ of the Company with respect to any customers,
suppliers, products, employees, financial affairs, business methods or services
of the Company or any of its subsidiaries (including, without limitation,
customer lists, pricing, underwriting, marketing, financial or sales
information, forecasts, business and strategic plans, customer needs and renewal
dates, personnel, applications to or any matters pending or under the
jurisdiction of any regulatory agency or court, any threatened litigation, and
corporate policies and procedures), or any other confidential matter or trade
secrets, except information which at the time is generally known to the public
other than as a result of disclosure by Executive not permitted hereunder, or
(ii) take with Executive upon leaving the employ of the Company any document or
paper relating to any of the foregoing or any physical property of the Company
or any of its sources with which insurance is placed, policyholders, expiration
or renewal dates, inspection or credit reports, and data on insurance risks
being written.
13. Return of Property. Upon termination of Executive's employment
------------------
for any reason, or at any other time the Company requests in writing, Executive
shall immediately deliver to the Company all memoranda, notes, plans, records,
reports and other documents (and copies thereof) and other property in
Executive's possession or control relating to the business of the Company or any
of its subsidiaries.
14. Competition, etc. During Executive's employment by the Company
-----------------
and during the two (2) year period commencing on the date of Executive's
termination of employment:
(a) Executive will not make any statement or perform any act
intended to advance an interest of any existing or prospective competitor
of the Company or any of its subsidiaries in any way that will or may
materially injure an interest of the Company or any of its subsidiaries in
its relationship and dealings with Existing or Potential clients, or
solicit or encourage any other executive of the Company or any of its
subsidiaries to do any act that is disloyal to the
19
<PAGE>
Company or any of its subsidiaries or inconsistent with the interests of
the Company or any of its subsidiaries interests or in violation of any
provision of this Agreement;
(b) Executive will not discuss with any Existing or Potential
client of the Company or any of its subsidiaries the present or future
availability of services or products by a business, if Executive has or
expects to acquire a proprietary interest in such business or is or expects
to be an employee, officer or director of such business, where such
services or products, are competitive with services or products which the
Company or any Subsidiary provides and where the acquisition of such
proprietary interest or Executive's becoming an employee, officer or
director of such business will or may materially injure an interest of the
Company or any of its subsidiaries;
(c) Executive will not make any statement or do any act intended
to cause any Existing or Potential client of the Company or any Subsidiary
to make use of the services or purchase the products of any competitive
business in which the Executive has or expects to acquire a proprietary
interest or in which Executive is or expects to be made an employee,
officer or director, if such services or products in any way relate to or
arise out of the services or products sold or provided or expected to be
sold or provided by the Company or any of its subsidiary to any existing or
potential client;
(d) Executive will not directly or indirectly (as a director,
officer, partner, sole proprietor, employee, manager, consultant,
independent contractor, advisor or otherwise) engage in, own any interest
in, perform any services for, participate in or be connected with (i) any
business or organization that directly engages in competition with the
Assigned Subsidiary in any geographical area where any business is
presently carried on by the Assigned Subsidiary, or (ii) any business or
organization that directly engages in competition with the Assigned
Subsidiary in any geographical area where any business shall be hereafter,
during the period of Executive's employment by the Company, carried on by
the Assigned Subsidiary, if such business is then being carried on by the
Assigned Subsidiary in such geographical area; provided, however, that the
provisions of this subparagraph (d) shall only be effective during
Executive's employment by the Company and during the one (1) year period
commencing on the date of Executive's termination and shall not be deemed
to prohibit Executive's ownership of not more than one percent (1%) of the
total shares of all classes of stock outstanding of any publicly held
company; provided, further, that this subparagraph (d) shall be null and
void in the event the Executive is terminated for failure of the Executive
to achieve reasonable performance objectives.
(e) Executive will not directly or indirectly employ, solicit for
employment, or advise or recommend to any other person not affiliated with
the Company or of its subsidiaries that they employ or solicit for
employment, any employee of the Company or of its subsidiaries.
For purposes of this Section 14, proprietary interest in a business is
ownership, whether through direct or indirect stock holdings or otherwise, of
one percent (1%) or more of such business. Executive shall be deemed to expect
to acquire a proprietary interest in a business or to be made an officer or
director of such business if such possibility has been discussed with any
officer, director, employee, agent, or promoter of such business.
Notwithstanding anything in this Section 14 to the contrary, Executive's
engagement in, ownership of, performance of services for, participation in or
connection with any business or organization other than the Company or a
Subsidiary, with respect to which the Chief Executive Officer of the Company,
has consented in writing shall not be deemed a breach of this Agreement.
20
<PAGE>
15. Termination. Executive's employment shall be terminated upon the
-----------
occurrence of any of the following:
(a) the death of Executive;
(b) Executive's disability (as such term is defined pursuant to
the provisions of the Company's long-term executive disability plan, as in
effect from time to time) ("Disability");
(c) the termination of Executive's employment by Executive at any
time for any reason whatsoever (including, without limitation, resignation
or retirement) provided Executive submits 90 days' prior written notice of
such termination to the Chief Executive Officer of the Company and/or Board
of Directors of the Assigned Subsidiary;
(d) the termination of Executive's employment by the Company at
any time "for cause", such termination to take effect immediately upon
written notice by the Company to Executive; or
(e) the termination of Executive's employment by the Company
other than for cause, such termination to take effect immediately upon
written notice by the Company to Executive.
For purposes of this Agreement, the term "Potential Client" shall mean
a person or entity who was the target of sales or marketing activity by the
Company during the one (1) year period preceding the Executive's termination of
employment or, in the event Executive has been employed by the Company less than
one (1) year at the time of termination, during the period of Executive's
employment with the Company. The term "Existing Client" shall mean a person or
entity who is a customer of the Company at the time of Executive's termination
of employment or with whom the Executive had direct contact on behalf of the
Company at any time during the period of Executive's employment with the
Company.
For purposes of this Agreement, the term "for cause" or "cause" shall
mean a reasonable determination by the Chief Executive Officer of the Company,
that Executive (i) failed to obey the reasonable and lawful orders of the
Company's Chief Executive Officer or the Board of Directors of the Assigned
Subsidiary, (ii) failed to achieve reasonable performance objectives, (iii)
acted with gross negligence in the performance of his obligations or in a manner
materially detrimental to the Company and/or its subsidiaries, (iv) willfully
breached or habitually neglected his duty, (v) has been convicted of a felony or
committed any act involving dishonesty or fraud, or (vi) violated any provisions
of Sections 12 through 14.
16. Nonalienation. Except as may otherwise be required by law, no
-------------
right to receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge,
bankruptcy or hypothecation or to exclusion, attachment, levy or similar process
or assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
17. Assignment. The Company, in its sole discretion, may assign its
----------
rights and duties under this Agreement, but Executive may not. This Agreement
shall be binding upon and inure to the benefit of (a) the Company and its
successors and assigns and any purchaser of the Company or substantially all of
the assets of the Company and (b) Executive, and his designees and his estate.
21
<PAGE>
18. Change in Control. Notwithstanding anything to the contrary
-----------------
expressed or implied herein, Executive shall be entitled to the benefits set
forth in Section 9 (in addition to any change of control benefits under the
Acordia, Inc. 1992 Stock Compensation Plan) if, following a change in control of
the Company, (i) Executive is assigned to any duties substantially inconsistent
with his position, duties or responsibilities with the Company immediately prior
to the change in control or his duties or responsibilities are substantially
reduced as compared with such duties and responsibilities immediately prior to
the change in control; (ii) Executive's Salary is materially reduced as compared
to his Salary immediately prior to the change in control; (iii) the Company
fails to obtain the assumption of its obligations to perform this Agreement by
any successor; or (iv) the Company's long-term strategic plan is materially
changed or abandoned such that the maximum potential payout of incentive
compensation to Executive is substantially reduced. For purposes of this
Agreement, a "change in control" of the Company shall be deemed to have occurred
if (i) any "person" (within the meaning ascribed to such term in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), as in
effect on the date of this Agreement) becomes the "beneficial owner" (as defined
in Rule 13d-3 promulgated under the Exchange Act, as in effect on the date of
this Agreement), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; (ii) at any time less than a majority of the members of
the Board of Directors of the Company shall be persons who were either nominated
for election by the Board or were elected by the Board; (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 60% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
19. Notices. Any notice required or permitted to be given under this
-------
Agreement shall be sufficient if in writing and will be deemed to have been
given when delivered in person (to Executive if such notice is for Executive) or
five days following mailing by first class certified or registered mail, postage
prepaid, to Executive at his home address, or such addresses as Executive shall
have designated in writing, or if to the Company, to the attention of the Chief
Executive Officer, at the Company's principal place of business.
20. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Indiana.
21. Severability. If any provision of this Agreement shall be
------------
determined to be invalid, illegal or unenforceable in whole or in part, neither
the validity of the remaining part of such provision nor the validity of any
other provision of this Agreement shall in any way be affected.
22. Waiver. Failure to insist upon strict compliance with any of the
------
terms, covenants or conditions of this Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power under this Agreement at any one or more times be deemed a waiver
or relinquishment of such right or power at any other time or times.
23. Entire Agreement; Modifications; and Conditions. This Agreement
-----------------------------------------------
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes (a) all prior
22
<PAGE>
agreements, oral and written, between the Company and Executive with respect to
Executive's employment. This Agreement may be modified or amended only by an
instrument in writing signed by both the Company and Executive.
24. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
25. Headings. The various headings of this Agreement are inserted
--------
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any of its provisions.
26. Remedies. Executive acknowledges that a remedy at law for any
--------
breach or threatened breach of the provisions of this Agreement would be
inadequate and therefore agrees that the Company shall be entitled to injunctive
relief, both preliminary and permanent, in addition to any other available
rights and remedies in case of any such breach or threatened breach; provided,
however, that nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available for any such breach or
threatened breach. Executive further acknowledges and agrees that in the event
of a breach by Executive of any provision of this Agreement, the Company shall
be entitled, in addition to all other remedies to which the Company may be
entitled under this Agreement, to recover from Executive all reasonable attorney
fees incurred by the Company in enforcing this Agreement.
IN WITNESS WHEREOF, the Company and Executive have duly executed and
delivered this Agreement as of the day and year first above written.
EXECUTIVE
By: __________________________
ACORDIA, INC.
By ___________________________
Name:
Title:
23
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EXHIBIT 10.2
------------
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT ("Agreement"), between Acordia, Inc., a Delaware
corporation (the "Company"), and Keith A. Maib (the "Executive"), dated as of
the 1st day of August, 1996.
W I T N E S S E T H:
-------------------
WHEREAS, the Company desires to assure itself of the services of
Executive for the period provided in this Agreement, and Executive is willing to
serve in the employ of the Company on a full-time basis for such period, all in
accordance with the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby employs Executive, and Executive
----------
hereby accepts such employment with the Company for the period provided for in
Section 2, all upon the terms and conditions contained in this Agreement. As a
condition to Executive's employment by the Company, Executive affirms and
represents that Executive is under no obligation to any former employer or other
person which is in any way inconsistent with, or which imposes any restriction
upon, Executive's acceptance of employment with the Company, the employment of
Executive by the Company, or Executive's undertakings under this Agreement.
2. Term of Employment. Unless sooner terminated pursuant to Section
------------------
15, the term of Executive's employment under this Agreement shall be for a
period commencing on the date hereof and continuing for seventeen (17) months
through December 31, 1997 (the "Initial Term"). If no termination has occurred
pursuant to Section 15 of this Agreement on or before November 30 of the then
current year, it being expressly understood and agreed that the Company does not
now, nor hereafter shall have any obligation to continue Executive in its employ
after expiration of the Initial Term, this Agreement shall automatically be
extended for an additional year term unless either party gives written notice of
the non-renewal to the other party on or before November 30th of the then
current year.
3. Duties. During the Employment Term, Executive shall render
------
general administrative and managerial services to the Company, or any Subsidiary
to which the Executive is assigned ("Assigned Subsidiary"), and shall perform
such other reasonable employment duties as the Chief Executive Officer of the
Company, or the Board of Directors of the Assigned Subsidiary, may from time to
time prescribe. During the Employment Term, Executive shall also serve, if
elected, as an officer or director of the Company or any of its subsidiaries,
including, but not limited to, the Assigned Subsidiary. Executive shall perform
his duties at such places and times as the Chief Executive Officer of the
Company or the Board of Directors of the Assigned Subsidiary may reasonably
prescribe. Except as may otherwise be approved in advance by the Board of
Directors of the Assigned Subsidiary with respect to memberships on the Boards
of Directors of, and other offices or positions in, companies or organizations
which, in their judgment, will not present any conflict of interest with the
Company or any of its subsidiaries or materially affect the performance of
Executive's duties and except during vacation periods and reasonable periods of
absence due to sickness, personal injury or other disability, Executive shall
devote his full time throughout the Employment Term to the services required of
Executive. Executive shall render his services exclusively to
24
<PAGE>
the Company and its subsidiaries during the Employment Term, and shall use his
best efforts, judgment and energy, to improve and advance the business and
interests of the Company and its subsidiaries in a manner consistent with the
duties of Executive's position.
4. Salary. As compensation for the services to be performed by
------
Executive during the Employment Term, the Company shall pay or shall cause to be
paid to Executive, an annual base salary of not less thanTwo Hundred Twenty-five
Thousand Dollars ($225,000) (the "Base Salary"); the Base Salary together with
any adjustments or increments thereto being hereinafter referred to as the
"Salary." The payment of any Salary hereunder shall be subject to applicable
withholding and payroll taxes, and such other deductions as may be required
under the Company's employee benefit plans. Any Salary payable shall be paid in
installments in accordance with the Company's salary administration practices as
they may from time to time exist and subject to withholdings and payroll
deductions.
5. Benefits. In addition to the payments required by section 4 to
--------
be paid to Executive during the Employment Term, Executive shall:
(a) be eligible to participate in all employee fringe benefits,
stock option, bonus and incentive compensation programs or plans and any
pension and/or profit sharing plans that may be provided by the Company for
its key executive employees in accordance with the provisions of any such
programs or plans; provided, however, that the Company expressly reserves
the right to alter, modify, amend or terminate any such programs or plans
at any time and for any reason during the Employment Term;
(b) participate in any life or other similar insurance plans,
medical and health plans or other employee welfare benefit plans that may
be provided by the Company for its key executive employees in accordance
with the provisions of any such plans;
(c) be entitled to annual paid vacation in accordance with
Company policy that may be applicable to key executive employees; and
(d) be entitled to sick leave and sick pay in accordance with any
Company policy that may be applicable to key executive employees.
6. Expenses. The Company shall, upon submission of expense reports
--------
acceptable to the Company, reimburse Executive in accordance with existing
Company policy for all reasonable and necessary business expenses incurred by
him in connection with the performance of Executive's obligations.
7. Death of Executive. In the event Executive's employment is
------------------
terminated as a result of Executive's death, Executive's spouse or, if the
Executive is not married at the time of his death, the estate of Executive shall
be entitled to receive Executive's Salary earned through the date of death.
8. Disability of Executive. In the event Executive's employment is
-----------------------
terminated as a result of Disability, as defined in section 15 of this
Agreement, Executive shall be entitled to receive his Salary and Benefits as
described in sections 4 and 5 of this Agreement through the date of termination.
9. Termination of Executive Other Than for Cause. In the event
---------------------------------------------
Executive's employment is terminated by the Company other than for cause (as
defined in section 15 of this Agreement), Executive shall be entitled to receive
the greater of (i) twelve months Salary or (ii) the Salary remaining to be paid
through the date the Agreement would have expired but for such termination; such
25
<PAGE>
amount to be paid in monthly installments or in one lump sum, at the option of
the Company, as soon as reasonably possible following the termination of
Executive.
10. Employment Relationship. Executive acknowledges that Executive's
------------------------
employment by the Company creates a relationship of confidence and trust between
Executive and the Company with respect to certain information applicable to the
business of any Existing Client or Potential Client (as the terms "Existing
Client" and "Potential Client" are respectively defined in Section 15) of the
Company or its subsidiaries which may be made known to Executive during the
period of his employment.
11. Proprietary and Confidential Information. Executive acknowledges
-----------------------------------------
that the Company possesses and will continue to possess information that has
been created, discovered or developed by, or otherwise become known to it
(including, without limitation, information created, discovered, developed or
made known by Executive during the period of or arising out of his employment)
or in which property rights have been or may be assigned or otherwise conveyed
to the Company which information has commercial value in the Business and is
treated by the Company as confidential. Executive further acknowledges and
agrees that the success of the Company's Business depends, in part, upon an in-
depth knowledge of the needs of the Company's customers and clients and serving
these needs through frequent contacts, and that the Company has invested
substantial time, money and manpower to develop such relationships.
12. Non-Disclosure. Executive shall not without the prior written
--------------
consent of the Chief Executive Officer of the Company (i) use for Executive's
benefit or disclose at any time during Executive's employment by the Company, or
thereafter, except to the extent required by the performance by Executive of his
duties as an executive of the Company, any information obtained or developed by
Executive while in the employ of the Company with respect to any customers,
suppliers, products, employees, financial affairs, business methods or services
of the Company or any of its subsidiaries (including, without limitation,
customer lists, pricing, underwriting, marketing, financial or sales
information, forecasts, business and strategic plans, customer needs and renewal
dates, personnel, applications to or any matters pending or under the
jurisdiction of any regulatory agency or court, any threatened litigation, and
corporate policies and procedures), or any other confidential matter or trade
secrets, except information which at the time is generally known to the public
other than as a result of disclosure by Executive not permitted hereunder, or
(ii) take with Executive upon leaving the employ of the Company any document or
paper relating to any of the foregoing or any physical property of the Company
or any of its sources with which insurance is placed, policyholders, expiration
or renewal dates, inspection or credit reports, and data on insurance risks
being written.
13. Return of Property. Upon termination of Executive's employment
------------------
for any reason, or at any other time the Company requests in writing, Executive
shall immediately deliver to the Company all memoranda, notes, plans, records,
reports and other documents (and copies thereof) and other property in
Executive's possession or control relating to the business of the Company or any
of its subsidiaries.
14. Competition, etc. During Executive's employment by the Company
-----------------
and during the two (2) year period commencing on the date of Executive's
termination of employment:
(a) Executive will not make any statement or perform any act
intended to advance an interest of any existing or prospective competitor
of the Company or any of its subsidiaries in any way that will or may
materially injure an interest of the Company or any of its subsidiaries in
its relationship and dealings with Existing or Potential clients, or
solicit or encourage any other executive of the Company or any of its
subsidiaries to do any act that is disloyal to the
26
<PAGE>
Company or any of its subsidiaries or inconsistent with the interests of
the Company or any of its subsidiaries interests or in violation of any
provision of this Agreement;
(b) Executive will not discuss with any Existing or Potential
client of the Company or any of its subsidiaries the present or future
availability of services or products by a business, if Executive has or
expects to acquire a proprietary interest in such business or is or expects
to be an employee, officer or director of such business, where such
services or products, are competitive with services or products which the
Company or any Subsidiary provides and where the acquisition of such
proprietary interest or Executive's becoming an employee, officer or
director of such business will or may materially injure an interest of the
Company or any of its subsidiaries;
(c) Executive will not make any statement or do any act intended
to cause any Existing or Potential client of the Company or any Subsidiary
to make use of the services or purchase the products of any competitive
business in which the Executive has or expects to acquire a proprietary
interest or in which Executive is or expects to be made an employee,
officer or director, if such services or products in any way relate to or
arise out of the services or products sold or provided or expected to be
sold or provided by the Company or any of its subsidiary to any existing or
potential client;
(d) Executive will not directly or indirectly (as a director,
officer, partner, sole proprietor, employee, manager, consultant,
independent contractor, advisor or otherwise) engage in, own any interest
in, perform any services for, participate in or be connected with (i) any
business or organization that directly engages in competition with the
Assigned Subsidiary in any geographical area where any business is
presently carried on by the Assigned Subsidiary, or (ii) any business or
organization that directly engages in competition with the Assigned
Subsidiary in any geographical area where any business shall be hereafter,
during the period of Executive's employment by the Company, carried on by
the Assigned Subsidiary, if such business is then being carried on by the
Assigned Subsidiary in such geographical area; provided, however, that the
provisions of this subparagraph (d) shall only be effective during
Executive's employment by the Company and during the one (1) year period
commencing on the date of Executive's termination and shall not be deemed
to prohibit Executive's ownership of not more than one percent (1%) of the
total shares of all classes of stock outstanding of any publicly held
company; provided, further, that this subparagraph (d) shall be null and
void in the event the Executive is terminated for failure of the Executive
to achieve reasonable performance objectives.
(e) Executive will not directly or indirectly employ, solicit for
employment, or advise or recommend to any other person not affiliated with
the Company or of its subsidiaries that they employ or solicit for
employment, any employee of the Company or of its subsidiaries.
For purposes of this Section 14, proprietary interest in a business is
ownership, whether through direct or indirect stock holdings or otherwise, of
one percent (1%) or more of such business. Executive shall be deemed to expect
to acquire a proprietary interest in a business or to be made an officer or
director of such business if such possibility has been discussed with any
officer, director, employee, agent, or promoter of such business.
Notwithstanding anything in this Section 14 to the contrary, Executive's
engagement in, ownership of, performance of services for, participation in or
connection with any business or organization other than the Company or a
Subsidiary, with respect to which the Chief Executive Officer of the Company,
has consented in writing shall not be deemed a breach of this Agreement.
27
<PAGE>
15. Termination. Executive's employment shall be terminated upon the
-----------
occurrence of any of the following:
(a) the death of Executive;
(b) Executive's disability (as such term is defined pursuant to
the provisions of the Company's long-term executive disability plan, as in
effect from time to time) ("Disability");
(c) the termination of Executive's employment by Executive at any
time for any reason whatsoever (including, without limitation, resignation
or retirement) provided Executive submits 90 days' prior written notice of
such termination to the Chief Executive Officer of the Company and/or Board
of Directors of the Assigned Subsidiary;
(d) the termination of Executive's employment by the Company at
any time "for cause", such termination to take effect immediately upon
written notice by the Company to Executive; or
(e) the termination of Executive's employment by the Company
other than for cause, such termination to take effect immediately upon
written notice by the Company to Executive.
For purposes of this Agreement, the term "Potential Client" shall mean
a person or entity who was the target of sales or marketing activity by the
Company during the one (1) year period preceding the Executive's termination of
employment or, in the event Executive has been employed by the Company less than
one (1) year at the time of termination, during the period of Executive's
employment with the Company. The term "Existing Client" shall mean a person or
entity who is a customer of the Company at the time of Executive's termination
of employment or with whom the Executive had direct contact on behalf of the
Company at any time during the period of Executive's employment with the
Company.
For purposes of this Agreement, the term "for cause" or "cause" shall
mean a reasonable determination by the Chief Executive Officer of the Company,
that Executive (i) failed to obey the reasonable and lawful orders of the
Company's Chief Executive Officer or the Board of Directors of the Assigned
Subsidiary, (ii) failed to achieve reasonable performance objectives, (iii)
acted with gross negligence in the performance of his obligations or in a manner
materially detrimental to the Company and/or its subsidiaries, (iv) willfully
breached or habitually neglected his duty, (v) has been convicted of a felony or
committed any act involving dishonesty or fraud, or (vi) violated any provisions
of Sections 12 through 14.
16. Nonalienation. Except as may otherwise be required by law, no
-------------
right to receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge,
bankruptcy or hypothecation or to exclusion, attachment, levy or similar process
or assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
17. Assignment. The Company, in its sole discretion, may assign its
----------
rights and duties under this Agreement, but Executive may not. This Agreement
shall be binding upon and inure to the benefit of (a) the Company and its
successors and assigns and any purchaser of the Company or substantially all of
the assets of the Company and (b) Executive, and his designees and his estate.
28
<PAGE>
18. Change in Control. Notwithstanding anything to the contrary
-----------------
expressed or implied herein, Executive shall be entitled to the benefits set
forth in Section 9 (in addition to any change of control benefits under the
Acordia, Inc. 1992 Stock Compensation Plan) if, following a change in control of
the Company, (i) Executive is assigned to any duties substantially inconsistent
with his position, duties or responsibilities with the Company immediately prior
to the change in control or his duties or responsibilities are substantially
reduced as compared with such duties and responsibilities immediately prior to
the change in control; (ii) Executive's Salary is materially reduced as compared
to his Salary immediately prior to the change in control; (iii) the Company
fails to obtain the assumption of its obligations to perform this Agreement by
any successor; or (iv) the Company's long-term strategic plan is materially
changed or abandoned such that the maximum potential payout of incentive
compensation to Executive is substantially reduced. For purposes of this
Agreement, a "change in control" of the Company shall be deemed to have occurred
if (i) any "person" (within the meaning ascribed to such term in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), as in
effect on the date of this Agreement) becomes the "beneficial owner" (as defined
in Rule 13d-3 promulgated under the Exchange Act, as in effect on the date of
this Agreement), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; (ii) at any time less than a majority of the members of
the Board of Directors of the Company shall be persons who were either nominated
for election by the Board or were elected by the Board; (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 60% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
19. Notices. Any notice required or permitted to be given under this
-------
Agreement shall be sufficient if in writing and will be deemed to have been
given when delivered in person (to Executive if such notice is for Executive) or
five days following mailing by first class certified or registered mail, postage
prepaid, to Executive at his home address, or such addresses as Executive shall
have designated in writing, or if to the Company, to the attention of the Chief
Executive Officer, at the Company's principal place of business.
20. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Indiana.
21. Severability. If any provision of this Agreement shall be
------------
determined to be invalid, illegal or unenforceable in whole or in part, neither
the validity of the remaining part of such provision nor the validity of any
other provision of this Agreement shall in any way be affected.
22. Waiver. Failure to insist upon strict compliance with any of the
------
terms, covenants or conditions of this Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power under this Agreement at any one or more times be deemed a waiver
or relinquishment of such right or power at any other time or times.
23. Entire Agreement; Modifications; and Conditions. This Agreement
-----------------------------------------------
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes (a) all prior
29
<PAGE>
agreements, oral and written, between the Company and Executive with respect to
Executive's employment. This Agreement may be modified or amended only by an
instrument in writing signed by both the Company and Executive.
24. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
25. Headings. The various headings of this Agreement are inserted
--------
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any of its provisions.
26. Remedies. Executive acknowledges that a remedy at law for any
--------
breach or threatened breach of the provisions of this Agreement would be
inadequate and therefore agrees that the Company shall be entitled to injunctive
relief, both preliminary and permanent, in addition to any other available
rights and remedies in case of any such breach or threatened breach; provided,
however, that nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available for any such breach or
threatened breach. Executive further acknowledges and agrees that in the event
of a breach by Executive of any provision of this Agreement, the Company shall
be entitled, in addition to all other remedies to which the Company may be
entitled under this Agreement, to recover from Executive all reasonable attorney
fees incurred by the Company in enforcing this Agreement.
IN WITNESS WHEREOF, the Company and Executive have duly executed and
delivered this Agreement as of the day and year first above written.
EXECUTIVE
By: __________________________
ACORDIA, INC.
By ___________________________
Name:
Title:
30
<PAGE>
EXHIBIT 11
ACORDIA, INC.
COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SIX MONTHS ENDED QUARTER ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
------- ------ ------ -------
PRIMARY
- -------
Average number of common shares
outstanding 14,022 13,945 14,036 13,957
Net effect of dilutive stock options
and warrants - based on the
treasury stock method of using
average market price 449 525 541 491
-------- ------- ------- -------
Total average number of common shares
outstanding 14,471 14,470 14,577 14,448
======== ======= ======= =======
Net income $14,128 $13,262 $ 6,817 $ 6,043
======== ======= ======= =======
Earnings per share $ 0.98 $ 0.92 $ 0.47 $ 0.42
======== ======= ======= =======
FULLY DILUTED
- -------------
Average number of common shares
outstanding 14,022 13,945 14,036 13,957
Net effect of dilutive stock options
and warrants - based on the
treasury stock method of using
the period-end price if higher
than average market price 653 528 661 529
-------- ------- ------- -------
Total average number of common shares
outstanding 14,675 14,473 14,697 14,486
======== ======= ======= =======
Net income $14,128 $13,262 $ 6,817 $ 6,043
======== ======= ======= =======
Earnings per share $ 0.96 $ 0.92 $ 0.46 $ 0.42
======== ======= ======= =======
31
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 12250
<SECURITIES> 47746
<RECEIVABLES> 177137
<ALLOWANCES> 3471
<INVENTORY> 0
<CURRENT-ASSETS> 281658
<PP&E> 47106
<DEPRECIATION> 40063
<TOTAL-ASSETS> 755776
<CURRENT-LIABILITIES> 319702
<BONDS> 0
0
0
<COMMON> 14041
<OTHER-SE> 208005
<TOTAL-LIABILITY-AND-EQUITY> 755776
<SALES> 322699
<TOTAL-REVENUES> 327596
<CGS> 0
<TOTAL-COSTS> 283385
<OTHER-EXPENSES> 12646
<LOSS-PROVISION> 541
<INTEREST-EXPENSE> 4861
<INCOME-PRETAX> 26163
<INCOME-TAX> 12035
<INCOME-CONTINUING> 12035
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14128
<EPS-PRIMARY> .98
<EPS-DILUTED> .96
</TABLE>
<PAGE>
EXHIBIT 99
Contact: William Carmichael
317-488-6248
FOR IMMEDIATE RELEASE -- August 12, 1996
ACORDIA APPOINTS CFO
INDIANAPOLIS -- Acordia, Inc. (NYSE: ACO) announced today that Keith A. Maib has
joined the Indianapolis-based insurance brokerage firm as Executive Vice
President and Chief Financial Officer.
"At Acordia, we have been growing rapidly and expanding our international
capability," said President Frank C. Witthun. "With his unique combination of
skills and experience, Keith Maib will make a valuable contribution in the
vitally important position of Chief Financial Officer."
As a partner in the Dallas office of Coopers & Lybrand, L.L.P., Maib was
primarily responsible for the firm's southern United States corporate finance
practice. Previously, Maib held the position of Chief Operating Officer of
Borland International, Inc., one of the world's largest PC software developers.
As Chief Operating Officer, Maib was responsible for managing the Scotts Valley,
California-based company's worldwide operations. Prior to joining Borland, Maib
was a partner with Price Waterhouse, L.L.P., in Dallas.
Maib succeeds Patrick M. Sheridan as Chief Financial Officer (CFO). Since
Acordia's founding in 1989, Sheridan has simultaneously held the CFO positions
of both Acordia and Anthem, Inc., a Fortune 500 health care management company
that is Acordia's majority shareholder. Sheridan will continue as CFO of the
rapidly expanding, $6 billion (revenues) Anthem, which is headquartered in
Indianapolis.
Maib holds a degree in accounting from the University of Kansas.
Acordia, the 7th largest insurance broker in the world, is a network of
companies that provide insurance broking, managed health care services, and
consulting.
####
33
