EXHIBIT 10.41
CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Binder For Casualty Insurance Program
January 1, 2007 — 2008
for
Gevity HR Inc.
In consultation with your Representative
Marsh USA, Inc.
by
AIG Global Risk Management

NOTICE
THESE POLICY FORMS AND THE APPLICABLE RATES ARE EXEMPT FROM THE FILING
REQUIREMENTS OF THE NEW YORK STATE INSURANCE DEPARTMENT. HOWEVER, SUCH FORMS AND
RATES MUST MEET THE MINIMUM STANDARDS OF THE NEW YORK INSURANCE DEPARTMENT.
(AIG LOGO) [g06030g0603002.gif]

WE KNOW RISK

     
PREPARED BY:
  JOYCE TAYLOR
DATED:
  12/21/2006
PROPOSED EFFECTIVE DATE:
  01/01/2007
VALID UNTIL:
  01/01/2007

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 1 — Policy Numbers, Policy Companies

              Policy Number   States Covered   Company Written In   Type of
Coverage
WC Various
  Various   VARIOUS   Statutory Workers’ Compensation and Employers’ Liability
 
           
GL 583-59-06
  ALL States   AMERICAN HOME ASSURANCE COMPANY   General Liability (Liability
other than Automobile)
 
           
CA 583-66-66
  FL, TX   AMERICAN HOME ASSURANCE COMPANY   Automobile Liability
 
           
DBP 292-05-93
  FL   National Union Fire Insurance Company   Deductible Buy Back

acknowledged on behalf of:
This Binder is intended to be a statement of the mutual interest of the parties
with respect to the Workers Compensation Risk Management program described above
and is subject to execution and delivery of a mutually satisfactory Payment
Agreement, RCAMP Agreement, and Collateral Trust Agreement. The parties will
become legally obligated with respect to the Workers Compensation Risk
Management program described above only in accordance with the terms contained
in the Payment Agreement, RCAMP Agreement and Collateral Trust Agreement
relating thereto if, as and when such document has been executed and delivered
by the parties.
 
SIGNATURES

                     
Signed by  
 
 
      Signed by    
 
        Thomas Agnello           Peter Grabowski         Regional Manager,
National Accounts           SVP & Chief Financial Officer    

                     
Dated
          Dated        
 
 
 
         
 
   

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 1 — THE CONTACTS
AIG Risk Management is committed to providing superior service on your Insurance
Program. The People listed below are the primary team representatives for your
account.

     
Contact Name:
  CHRISTOPHER P. DAVIS
Company Name:
  Gevity HR LP.
Street:
  9000 Town Center Parkway
City:
  Bradenton
State:
  FL
Zip:
  34202
Telephone #:
  941-741-4343

     
Your Representative Contact Name:
  Michael Weiss
Company Name:
  Marsh USA, Inc.
Street:
  1166 Avenue of the Americas
City:
  New York
State:
  NY
Zip:
  10036
Telephone #:
  212-345-3568

     
Our Account Representative Contact Name:
  Thomas Agnello
Company Name:
  AIG
Street:
  80 Pine Street
City:
  New York
State:
  NY
Zip:
  10005
Telephone #:
  212-770-1392

     
Other Important Contacts
   
Name:
  Florette Williams
Title:
  Account Manager
Telephone #
  212-770-1994
Name:
   
Title:
   
Telephone #
   
Name:
   
Title:
   
Telephone #
   

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION — 1 — Information About AIG National Accounts Division
AIG Risk Management — National Accounts Division
For more than 20 years, AIG Risk Management (AIGRM) has been known in the
marketplace as the leading provider of sophisticated risk management programs
for large, national accounts. Our National Accounts Division focuses on
corporations with annual revenue in excess of $750 million. AIGRM professionals
can devise integrated risk management programs for most hazards and exposures in
your operations. In designing a customized program for our clients, we explore a
variety of financing and coverage options: guaranteed cost; self-insured
retention; large deductibles; incurred-loss and paid-loss retention plans; and
captive arrangements. Buy-outs and loss portfolio transfers are handled by a
separate profit center within AIG Risk Management (Division 86). We can also
combine and/or coordinate our program with a spectrum of products and services
available within the diverse member companies of American International Group,
Inc. (AIG), allowing us to create a comprehensive program that meets most, if
not all, of your risk management needs. Our creative approach to solving our
clients’ simplest to most difficult problems has propelled us to be a market
leader in risk management solutions for national corporations.
Quality Service
In 2002, The Risk and Insurance Management Society awarded AIG the Arthur Quern
Quality Award in recognition of AIG’s Performance Management Program. Our
excellence is rooted in the belief that a quality insurance program entails more
than just sound underwriting; it also requires customer-driven service. Each
AIGRM client is assigned an Account Manager who focuses on your business
strategies, understands your needs, and works with you to find solutions to your
risk concerns. We will work with AIG Claim Services, Inc. or your chosen third
party administrator to provide an effective cost-containment program. Our AIG
Risk Consultants team is unmatched in its loss control and loss prevention
expertise. Additionally, we offer a variety of specialized services to enhance
your risk management programs, including IntelliRiskã, our on-line claims
management system. AIGRM professionals provide a full range of services to help
you manage and control your overall cost of risk.
Financial Strength
The AIG Companies’ ratings are among the highest of any insurance and financial
services organization in the world. The AIG Companies provide the most extensive
range of commercial and industrial coverages available for corporate and
commercial customers, from large multinationals to small businesses. The AIG
Companies are longtime market leaders in most lines, including the most complex
insurance lines. We typically provide the highest insurance limits available and
are first to address new or emerging risks. Policies underwritten by the AIG
Companies provide highly-rated financial strength, and specialized claims and
loss control services. AIG Companies refers to the domestic property and
casualty insurance subsidiaries of American International Group, Inc.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 2 — Program Rates and Premiums
Rates and Estimated Premiums for:

                                              Retention/                  
Claims   Deductible/   Estimated Line of Business   Rating Segment   Coverage
Plan Type   Administrator   SIR   Losses
Workers’ Compensation 
  The Entire Contract   Deductible/Full Coverage Retention   AIGCS   $ 500,000  
  $ 20,415,500  
Workers’ Compensation
  FL or OR Loss Re   Deductible Non-LRRP   AGICS   $ 500,000     $ 46,084,500  
General Liability
  The Entire Contract   Deductible   AIGCS   $ 500,000     $ 519,046  
Automobile Liability
  The Entire Contract   Deductible   AIGCS   $ 500,000     $ $271,966  

5

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 2 — Program Rates and Premiums
Estimated Subject Premium

                                                      Minimum   Estimated Line
Items   Rates   Per   Basis Types   Estimated Basis   Premium   Premium
Forecast of Subject Losses in Final Premium
  N/A     1     Ultimate Losses   $   N/A   [*]
Profit and Administration
  [*]     1     Unmodified Premium   [*]   [*]   [*]
GL and AL Profit and Administration
  Flat   Flat       Flat       [*]
Claims Service Fee
  Flat   Flat       Flat       [*]
Taxes, RMLs, B&B and Assessment
  [*]     1     Unmodified Premium   [*]       [*]
AL Taxes, RMLs, B&B and Assessment
  Flat                       [*]
GL Taxes, RMLs, B&B and Assessment
  Flat                       [*]
New York Second Injury Fund
  [*]     1     NY Standard Premium   [*]       [*]
Subtotal
                          $5,481,780
 
                            Estimated Subject Premium
  $5,481,780

Estimated Non-subject Premium

                                  Coverage Description   Rates   Per   Basis
Types   Estimated Basis   Minimum Premium   Estimated Premium
WC Excess Premium
    [*]       1     Unmodified Premium   [*]   [*]   [*]
GL Excess Premium
    [*]       1,000     Sales   [*]   [*]   [*]
AL Excess Premium
  Flat     1         Flat   [*]   [*]
Deductible Buyback Loss Provision
  Flat     N/A     Flat   Flat       [*]
Deductible Buy-Back Taxes
  Flat   Flat   Flat   flat       [*]
Insurance Charge
  Flat     N/A     Flat   Flat       [*]
Florida WC Standard Premium/ Loss Reimbursement Premium
    1       1     Standard Premium*   [*]   NA   [*]
Oregon WC Standard Premium/ Loss Reimbursement Premium
    1       1     Standard Premium*   [*]   NA   [*] Estimated Non-Subject
Premium
  $33,080,274

 

*   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.   *   THIS CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.   *  
THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Summary of Expected Cost

         
Estimated Premium (Subject and Non-subject)
    $38,562,054  
Expected Reimbursable Losses/ Deductible Loss/Self-Insured Losses and ALAE, if
applicable, excluding Deductible Buyback Loss Provision
    [*]  
Estimated Surcharges: Includes NY Security Fund Surcharge
    [*]  
Estimated Cost
    [*]  
Deposit Premium
  See Section 4
Installments #12
       
Total Pay-In Premium During the Policy Period
    $38,562,054  

 

*   Standard Premium Formula for Purposes of Calculating FL and OR Loss Re
Premium = Modified Standard Premium , less Loss Reimbursement Premium, less
Premium Discount , plus Tax Provision , plus Expense Constant , plus Terrorism
Risk Insurance Act Premium (as per policy detail).

Surcharge (breakdown by state, excluding NYSSIF):
CA = $129,699
CT = $10,782
DC = $1,725
IL = $1,472
IN = $117
KY = $10,077
MA = $3,882
ME = $350
MN = $53,910
MO = $3,592
MT = $580
NJ = $261,433
NY = $22,163
OR = $1,716
PA = $13,004
VT = $34
AL Surcharges = $3 (flat)
GL Surcharges = $386 (flat)

              Estimated Terrorism Charges Included in Premium By Line of
Business:   Charge
Workers’ Compensation (TRIA)
    [*]
General Liability (TRIA)
    [*]
Automobile Liability (Terrorism)
    [*]

If UM/UIM/PIP forms (as referenced in Section 3) are not signed and returned by
effective date, an additional premium of $          will be charged and the
Automobile Liability rate will be increased by $          by power unit.
     The Binder contemplates the following terms:

  1.   Based on unmodified manual premium of $109,941,904 with corresponding
estimated modified premium of $108,161,953, including FL and OR. Rates outlined
within this binder will be applied to unmodified manual premium.     2.  
Receipt of first installment due prior to inception.     3.   Annual manual
premium growth of no more than [*] in the states of CA, GA, TX,

 

*   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

      or FL (*) individually and no more than [*] in the aggregate. If
calculated at monthly audit
[*] or greater premiums are found for states other than FL
[*], we would retain the right to immediately increase and bill excess premium
and collateral by 1.25 times the relative exposure in the applicable states
above the trigger.     4.   If actual surcharges including NY second injury
exceed the deposit indicated below, Gevity will be responsible for the
additional cost.     5.   Continued compliance with monthly voluntary audits.  
  6.   This Binder contemplates that there are no material changes between the
date of this Binder and expiration. If a material change should occur, we
reserve the right to re-price account immediately and change our collateral
requirements. Material change is defined as inclusive but not limited to:
changes in management team, changes in
manual rate profile of Gevity, deterioration in either Gevity’s financials or
projected losses under the current program, acquisitions or transfer in whole or
in part of another similar organization or book of business, any breach of our
current contract.     7.   This Binder is net of brokerage commission.     8.  
Issuance of Deductible Buy-Back Policy, by a member Company of AIG, covering
deductible losses up to an aggregate of $14,000,000. In addition to providing
coverage up to the $14,000,000 aggregate, the deductible Buy-Back policy will
provide $20,000,000 of aggregate stop coverage above a $136,700,000 attachment
point. The $136,700,000 attachment point is a minimum and adjustable upwards
only based on audited unmodified premium.

Data Reporting Requirements
Gevity must report the renewal client base and, on a weekly basis, all client
additions, terminations and endorsements using the PEO standard template and the
FTP server. See PEO standard template attached.
Aggregate Stop Amount and Aggregate Stop Limit Schedule
The “Aggregate Stop Amount ”and the “Aggregate Stop Limit ”(if one is
applicable)
apply to the o first year of, or þ entire Rating Period.
Line(s) and Insurance Included:
“Aggregate Stop Amount” adjustable on the Basis and rate shown below.
$136,700,000

                 
Basis of Adjustment:
          Estimated Basis Amount:
Audited Unmodified Premium
          $109,941,904  
Adjustment Rate:
    1.2434     Per: 1
“Aggregate Stop Limit”
    20,000,000          

“Aggregate Stop Amount” means the maximum amount of:
Benefits, damages and ALAE (per the ALAE option selected herein) payable by you
for losses under policies issued that are subject to your
retention/deductible/loss reimbursement program, and if applicable, self-insured
retention program.
 

*   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Adjustment: The final “Aggregate Stop Amount” will be determined by our audit of
your books and records. In no event will the “Aggregate Stop Amount” be less
than the Estimated Amount shown.
“Aggregate Stop Limit” means the maximum amount of:
Benefits, damages and ALAE (per the ALAE option selected herein) above the
Aggregate Stop Amount that we will not require you to reimburse us for under
your retention/deductible/loss reimbursement program, and if applicable,
self-insured retention program.
Security Plan

                  Collateral               Collateral on Hand (by Type)   Amount
of Collateral          
RCAMP Cash
  $ 152,464,786          
Escrow
  $ 25,000          
Trust Funds
  $ 8,057,588          
Estimated Gross Amounts of Collateral on Hand
  $ 160,547,374     At 8/31/06

                  Additional Collateral Required (by Type)   Amount of
Collateral     Due Date
RCAMP (paid by captive)
  $ 52,439,010          
Deductible Buyback Loss Provision Included in Prem.
  $ 14,000,000          
Collateral included in Subject Premium
  $ 60,990          
Total Additional Collateral Required
  $ 66,500,000     12 equal due on 1st of
 
          each month starting
 
          with 01/01/2007.
Estimated Gross Amount of Collateral Required
  $ 227,047,374     Plus remaining 2006
 
          installments

Collateral Reviews
We will review our collateral requirement annually. In addition, we may review
our collateral requirement at any time that we may deem reasonably necessary. If
as a result of any review we find that we require additional collateral, you
will provide us such additional collateral within 30 days of our written
request, which shall be accompanied by a worksheet showing our calculation of
the amount thereof. If a return of collateral to you is indicated, we will
return annually the indicated amount to you within 30 days of our written
acknowledgement thereof.
The Additional/Return Collateral will be:
The difference between (Ultimate Losses) and (Loss Provision amount collected
during the policy period)

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Specific Loss Development Factors
We have agreed to use specific Loss Development Factors in determining Ultimate
Losses in our collateral calculation, the following applies:
GRID of Loss Development Factors

                      Kind of Insurance     Workers Comp   General Liability  
Auto Liability                                             Valuation Date  
LDF’s   LDF’s   LDF’s   LDF’s
6/30/08
  [*]            
6/30/09
  [*]            
6/30/10
  [*]            
6/30/11
  [*]            
6/30/12
  [*]            
6/30/13
  [*]            

NOTE THAT:
We may apply a different table of LDF’s that will enable us more accurately to
determine the Ultimate Losses in the security calculation, if during the term of
the policies, a change occurs in the hazards insured against because of Your
acquisition or disposition of a subsidiary, division or operation with assets at
least equal to 20% of your assets on the effective date hereof, or the
organization that provides claims service under the Policies is changed, or Your
retention/deductible/loss reimbursement limit under any of the Policies, or any
other change occurs which is likely to render the LDF’s shown in the Grid
ineffective as a tool for estimating with reasonable accuracy the amount of Loss
and ALAE that we will pay because of accidents, occurrences, or offenses covered
by the Policies.
Security will be on a depleting basis. Using the Deductible Buyback and the
Hybrid RCAMP as collateral, retained losses will first be paid out of the
Deductible Buyback until $14,000,000 is exhausted. Then Hybrid RCAMP will be
responsible for the rest of the retained losses. No monthly loss billings will
go to the insured.
The collateral pay-in during the 1/1/07 — 1/1/08 period will be adjusted on a
quarterly basis during the policy period based on the following formula:
Annual countrywide unmodified manual premium x.6049 = Total Collateral
Requirement
Excluding the $14,000,000 Deductible Buyback Loss Provision, the Total
Collateral requirement is subject to a minimum of $44,625,000 [85% of collateral
amount above excluding the Deductible Buyback Loss Provison] until the first
loss provision annual adjustment at 18 months after inception for 2007-08
program year. The minimum is not the minimum collateral amount AIG must hold at
any given time over the first eighteen months, but instead the amount that must
be paid in over the first year. In other words, if the unmodified manual premium
after the twelfth monthly adjustment is so low that it triggers the minimum of
$44,625,000, AIG will compare the minimum to what was submitted in collateral
over the year, in lieu of to what was on hand after depletion for paid losses.
If the program does not renew, then the collateral will be adjusted annually in
accordance with the terms outlined in the Payment Agreement and there will be no
return of collateral until 30 months from inception.
The Hybrid RCAMP portion of this deal will be structured as follows:
We will issue You Deductible Policies. Your captive, in turn, will issue You a
Deductible Reimbursement Policy providing coverage for the same liabilities
referenced in the policies we issue to you for the first $500,000 per
occurrence, excess of a $14,000,000 aggregate.
 

•   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Under the Hybrid RCAMP collateral option, You assign your rights under the
captive issued Deductible Reimbursement to Us. Furthermore, We will reinsure
Your captive for liabilities it assumes under the Deductible Reimbursement
Policy.
This deal will be documented via an Assignment Agreement, Reinsurance Quota
Share Agreement and the Payment Agreement/Schedule of Policies & Payments. The
Assignment Agreement and the cash premium received via this reinsurance
transaction will service to collateralize Your Deductible Obligations to Us.
The Captive has two Investment Selection options at its disposal which are
referenced below:
Investment Selection Options

1.   One-Year rate

Under this option, We would guarantee a fixed rate of return on the Reinsurance
Premium set at an enhanced spread of [*] basis points over the 6-month U.S.
Constant Maturity Treasury yield as it reads the day we are in receipt of the
first installment of the Reinsurance Premium. The interest rate will reset
annually based on then current market conditions. Should the Captive cancel the
Reinsurance Quota Share Agreement at any time prior to January 1, 2008, it is
understood and agreed that interest will be deemed to have accrued from the date
the premium is delivered to us, to the date of cancellation, at the 1-month U.S.
Constant Maturity Treasury yield as it read the day we were in receipt of the
first installment of Reinsurance Premium.

2.   Interest rate payable until all claims are closed

Under this option, We would guarantee a fixed rate of return on the Reinsurance
Premium set an enhanced spread of TBD basis points over the 3-year U.S. Constant
Maturity Treasury yield as it reads the day we are in receipt of the first
installment of the Reinsurance Premium. Said rate would be in effect until all
claims were closed. Should the Captive cancel the Reinsurance Quota Share
Agreement at any time, it is understood and agreed that interest will be deemed
to have accrued from the date the premium is delivered to us, to the date of
cancellation, at the applicable interest rate as per the following Interest Rate
Penalty Schedule.
The aforementioned TBD basis point spread over the 3-year U.S. Constant Maturity
Treasury yield may increase to a maximum spread of TBD basis points over the
3-year U.S. Constant Maturity Treasury yield. We will make the final
determination of the guaranteed spread at such time as the first installment of
the Reinsurance Premium is received.
Interest Rate Penalty Schedule

      Cancellation Date   Interest Rate *
 
   
Prior to January 1, 2008
  TBD
January 1, 2008 — January 1, 2009
  TBD
January 1, 2009 — January 1, 2010
  TBD
January 1, 2010 — January 1, 2011
  TBD
January 1, 2011 — January 1, 2012
  TBD
January 1, 2012 — January 1, 2013
  TBD
January 1, 2013 — January 1, 2014
  TBD

 

*   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

      Cancellation Date   Interest Rate *
 
   
January 1, 2014 — January 1, 2015
  TBD
January 1, 2015 — January 1, 2016
  TBD
January 1, 2016 — January 1, 2017
  TBD
January 1, 2017 until All Claims Closed
  TBD.

 

*   as each read, the day the first installment of the Reinsurance Premium is
received

For either Investment Selection Option referenced above, we will credit you
additional interest accrued monthly on the $52,500,000 in Reinsurance Premium on
the daily cash balances of the $14,000,000 referenced above, calculated at a
rate dependent upon which option you select.
Under either Investment Selection Option, the Captive will receive a monthly
accrued interest statement, detailing the opening fund balance, less losses paid
in each particular month, along with interest earned on the average investable
balance. This Binder contemplates that we will not collect Escrow. Therefore,
the monthly accrued interest statement will evidence losses being paid at the
mid-point of each month.
Should the Federal Reserve lower the targeted Federal Funds rate at any time
prior to the receipt of the first installment of the reinsurance premium, both
investment selection options will become null and void.
Letter of Credit
Any letter of credit must be clean, unconditional, irrevocable and evergreen. It
must be from a bank that we and the Securities Valuation Office of the National
Association of Insurance Commissioners have approved and in a form acceptable to
us. It must be in the amount shown in the Schedule. If any letter of credit is
canceled, no later than 30 days before that letter of credit expires, You must
deliver to us a substitute letter of credit that complies with the requirements
set forth above. Upon Your written request, we will not unreasonably withhold
our consent to a reasonable extension of the time within which You must deliver
such a substitute letter of credit to us. The substitute letter of credit must
take effect no later than the date of termination of the expiring letter of
credit. Your duty to deliver such a letter of credit will continue until You
have satisfied all Your obligations under this Agreement and the Policies. If
You fail to provide us with a qualifying substitute letter of credit as
indicated above, we may draw upon the existing letter of credit in full.
Collateral Trust
Cash will be invested in various securities, selected by you, in accordance with
the applicable trust agreement, executed between you (Grantor), us (Beneficiary)
and the bank (Escrow Agent). Our oversight fee charge for this arrangement will
be between 7 and 10 basis points of the market value of the trust. The Escrow
Agent may also ask you for a separate fee for their services. At our discretion,
we will determine if this cash will, or will not, be utilized to pay for losses
and expenses you incur.
Financial Covenants, Tests, or Minimum Credit Ratings
We may require additional collateral from You in the event of the following:

  a.) Credit Trigger:

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

  i.   If the credit rating of the entity named below and for the type of debt
described below, promulgated by Standard & Poor’s Corporation (“S&P”) or by
Moody’s Investors Services, Inc. (“Moody’s”), drops below the grade shown
respectively under S&P or Moody’s;     ii.   or If S&P or Moody’s withdraws any
such rating.

We may require and You must deliver such additional collateral according to the
Payment Agreement up to an amount such that our unsecured exposure will not
exceed the amount shown as the Maximum Unsecured Exposure next to such rating in
the grid below.
“Unsecured exposure” is the difference between the total unpaid amount of Your
Payment Obligation (including any similar obligation incurred before the
inception of the Payment Agreement and including any portion of Your Payment
Obligation that has been deferred and is not yet due) and the total amount of
Your collateral that we hold.
Name of Entity: Type of Debt Rated:

          Ratings at Effective Date S&P   Moody’s   Unsecured Exposure at
Effective Date
 
      $TBA

              Potential Future Ratings S&P   Moody’s   Maximum Unsecured
Exposure
 
        $ TBA
 
        $  
 
        $  
 
        $  

  b.  Other Financial Tests or Covenants:

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 3 — Limits, Program & Coverage
General Notes About Coverages
Coverage outlined in this document is for explanatory and reference purposes
only. The coverage provisions do not necessarily conform to any specifications
furnished in the submission received from your representative.
The policy (or policies) that we issue to you shall contain the full and
complete terms, conditions, exclusions and coverages provided under your
insurance program. In the case of any conflict between the insurance policy (or
policies), and the provisions contained in this proposal or binder, the
provisions in the policy (or policies) shall govern. Upon receipt, please review
the policy (policies) thoroughly with your broker, and notify us promptly in
writing if you have any questions or concerns.
The calculation of premiums, and other program features, included in this
document have been established based upon the information provided by you and
your representative. Additional locations, changes in exposure, or other
variations may make it necessary to re-evaluate the Proposal/Binder, premium
calculations and plan factors. Any modification we make shall be based on our
evaluation of these changes and whether they represent a measurable difference
from the insurance program originally contemplated at inception.
While it is our intention to honor the terms and conditions of our contract with
you, we are required to follow all regulatory and filing requirements in effect
for various states where you have an exposure. We shall adhere to all state
regulatory requirements. We shall not issue any form, or apply any program, that
is in contravention to a governing regulation, rule, statute or law.
Prior to the inception date of coverage, you must provide us with the following
information: All applicable FEIN numbers, DMV reporting information (other than
New York), and UAIN.
Entities included as Named Insureds are those shown as such on the policy
(policies) Declaration page, as well as in the appropriate Named Insured
Endorsements attached to each individual policy, whether such are issued at
inception, or included by an additional endorsement thereafter.
Any questions regarding this Proposal or Binder should be directed to Our AIG
Risk Management Representative shown in this document. No Alterations to this
Proposal or Binder May Be Made Without the Prior Written Approval of AIG Risk
Management.

14

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Workers’ Compensation
Policy Term: Effective at 12:01 AM 01/01/2007 to 01/012008

      Workers’ Compensation Coverage   Statutory
Employers Liability:
   
Bodily Injury by Accident — Each Accident
  $2,000,000
Each Employee Bodily Injury by Disease
  $2,000,000
Policy Limit Bodily Injury by Disease
  $2,000,000
States Covered: AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN,
KS, KY, LA, MD, ME, MA, MI, MN, MO, MS, MT, NE, NH, NJ, NM, NV, NY, NC, OK, OR,
PA, RI, SC, SD, TN, TX, UT, VA, VT, WI(i.e. Item 3A):
     
Stop Gap Liability:
   
Bodily Injury by Accident — Each Accident
  $2,000,000
Each Employee Bodily Injury by Disease
  $2,000,000
Policy Limit Bodily Injury by Disease
  $2,000,000
States Covered: OH, ND, WA, WV, WY, (i.e. other states covered 3C):
   

                  Retained/Loss         Reimbursement/Amount   Applicable To:
Workers’ Compensation and Employers Liability under State Law — Insured States
  $ 500,000     Each Accident or
each Person for
Disease
Workers’ Compensation and Employers Liability under Federal Law — Insured States
  $ 500,000     Each Accident or
each Person for
Disease
Workers’ Compensation and Employers Liability — Self Insured States
  $ N/A     Each Accident or
each Person for
Disease
Employers Liability — Monopolistic States
  $ 500,000     Each Accident or
each Person for
Disease

Note: 1)For Insured States, the limit of coverage as shown in this document
include(s) the Retention/Loss Reimbursement Limit layer amount(s) retained by
the Insured . 2) For Self-Insured States, the limits of liability shown are in
excess of the Self Insured Retention amount. 3) Aggregate Limits apply where
applicable.
Coverage Extensions and Exclusions

15

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
 
       
WC 000000A
      OTHER STATE INSURANCE
 
       
WC 000104
  04/84   FEDERAL EMPLOYERS LIABILITY ACT COVERAGE
 
     
•   This endorsement continues to be used in New Jersey and Texas.
 
     
The remaining states approved the newer version WC 000104A (10-04).
 
       
WC 000104A
  10/04   FEDERAL EMPLOYERS LIABILITY ACT COVERAGE
 
      This endorsement is approved in Alabama, Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware, DC, Florida, Georgia, Hawaii,
Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan (exempt from filing), Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina,
Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota,
Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and
Wyoming.
 
       
 
      New Jersey and Texas will continue to use the prior version WC 000104
(4-84) until the AIG adoption filing is approved.
 
       
WC 000106A
  04/92   LONGSHORE AND HARBOR WORKERS COMPENSATION ACT COVERAGE ENDORSEMENT
(California approved a state-specific version)
 
       
WC 000109A
  04/92   OUTER CONTINENTAL SHELF LANDS ACT COVERAGE ENDORSEMENT
 
      “No such work at this time. It is agreed that if any work is subject to
the Outer Continental Shelf Lands Act, the Insurer will endorse the policy
within sixty (60) days of the notification.”
 
       
WC 000111
      MIGRANT AND SEASONAL AGRICULTURAL WORKERS PROTECTION ACT COVERAGE
ENDORSEMENT
 
       
WC 000201A
  04/92   MARITIME COVERAGE
 
      Description of work: “No such work at this time. It is agreed that if any
work is subject to the Maritime Coverage Endorsement, the Insurer will endorse
the policy within sixty (60) days of the notification”.
 
       
WC 000203
  04/84   VOLUNTARY COMPENSATION MARITIME COVERAGE ENDORSEMENT
(ATTACHED TO FLORIDA MASTER POLICY ONLY)
 
      EMPLOYEES: “All employees who are masters or members of the crew of any
vessel.”
 
      Workers Compensation Law: “State of Hire”
 
      DESCRIPTION OF WORK: “No such work at this time. It is agreed that if any
work is subject to the Maritime Coverage Endorsement, the Insurer will endorse
the policy within sixty (60) days of the notification.”
 
       
WC 000301
  04/84   ALTERNATE EMPLOYER ENDORSEMENT (STATE APPROVED — HI, OK, MI AND TX)
 
      Requires specifics name of Alternate Employer

16

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
WC 000301A
  02/89   ALTERNATE EMPLOYER ENDORSEMENT (ALL OTHER STATES WHERE WE ARE USING A
MASTER POLICY,
EXCEPT CA, DE, PA, WI)
 
     
•   Requires specifics name of Alternate Employer
 
     
•   This endorsement is not approved in Alaska.
 
     
•   Hawaii, Oklahoma and Texas continue to use the prior version WC 000301
(4-84).
 
     
•   The remaining states approved this endorsement.
 
       
WC 000302
  04/84   DESIGNATED WORKPLACES EXCLUSION ENDORSEMENT
 
     
•   California disapproved this endorsement, but uses Endorsement Agreement
Limiting & Restricting This Insurance Form# 7606H for this purpose.
 
     
•   Pennsylvania disapproved this endorsement, but uses Exclusion of Employees
Endorsement WC 370303 for wrap-ups. The sponsor is named as statutory employer.
 
     
•   Connecticut approved a state-specific version of this endorsement.
 
     
•   The remaining states approved this endorsement.
 
       
WC 000310
  04/84   SOLE PROPRIETOR, PARTNER, OFFICER AND OTHERS
 
     
•   California and Texas approved a state-specific version.
 
 
     
This endorsement is not approved in Pennsylvania
 
     
Partners: All partners
 
     
Officers: All executive officers
 
     
Others: Each person named in Item 4 of the Information Page
 
       
WC 000311
  04/84   VOLUNTARY COMPENSATION AND EMPLOYERS LIABILITY
 
     
Employees: All Officers and Employees, including any volunteers not subject to
the Workers Compensation law except masters and members of the crew of any
vessel.
 
     
State of Employment: Any state designated in Item 3.A. of the Information Page
of this policy
 
     
Compensation Law: State of Hire
 
       
WC 000311A
  08/91   VOLUNTARY COMPENSATION AND EMPLOYERS LIABILITY
 
     
Employees: All Officers and Employees, including any volunteers not subject to
the Workers Compensation law except masters and members of the crew of any
vessel
 
     
State of Employment: Any state designated in Item 3.A. of the Information Page
of this policy
 
     
Compensation Law: State of Hire
 
       
WC 000313
  04/84   WAIVER OF SUBROGATION
 
     
•   A waiver of subrogation is not permitted in Kentucky, New Hampshire and New
Jersey.
 
     
•   California, Tennessee, Texas and Utah approved a state-specific version.
 
 
      Schedule:
 
      “Any person or organization to whom you become obligated to waive your
rights of recovery against, under any contract or agreement you enter into prior
to the occurrence of loss.”
 
       
WC 60904
  08/94   FOREIGN VOLUNTARY COVERAGE ENDORSEMENT

17

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements  
 
     
•   Minnesota, New Jersey, North Carolina and Pennsylvania do not permit usage
of this endorsement. Foreign coverage is dictated by state law.
 
     
•   Alaska, California, Florida and Massachusetts approved a state-specific
version.
 
     
•   New York and Wisconsin require usage of a state-prescribed Bureau form.
 
     
•   This endorsement is approved in Alabama, Arizona, Arkansas, Colorado,
Connecticut, Delaware, DC, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Mexico, Oklahoma, Oregon, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia
and Wyoming.
 
       
 
      Schedule:
 
      Name(s) of Employee: “All officers and Employees while stationed or
traveling outside of the United States of America, its territories or
possessions, except masters and members of the crew of any vessel”
 
       
 
      State or Country of Operations: “Anywhere in the world, including
international waters or airspace, but excluding the United States of America
(including its territories and possessions) and Puerto Rico and those countries
against which the Office of Foreign Assets Control of the U.S. Department of the
Treasury administers and enforces economic and trade sanctions”
 
      Designated Workers Compensation Law: State of hire
 
      Limits of Liability for Excess Repatriation Expense:
 
     
$25,000 — Each employee
 
     
$25,000 — Each accident
 
      Limits of Liability for Part Two-Employers Liability:
 
     
$2,000,000 — Bodily Injury by Accident
 
     
$2,000,000 — Bodily Injury by Disease. [policy limit and each employee]
 
       
WC 990008A
  10/03   AMENDMENT OF YOUR DUTIES IF INJURY OCCURS ENDORSEMENT
 
     
•   This endorsement is approved in Alabama, Arizona, Connecticut, Delaware, DC,
Hawaii, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan,
Mississippi, New Hampshire, New Mexico, Pennsylvania, Rhode Island, South
Dakota, Utah, Vermont and Virginia.
 
       
WC 990011A
  10/03   UNINTENTIONAL ERRORS AND OMISSIONS ENDORSEMENT
 
     
•   California continues to use the prior version WC 990011.

This endorsement is approved in Approved in Alabama, Arizona, Connecticut,
Delaware, DC, Hawaii, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine,
Maryland, Michigan, Mississippi, New Hampshire, New Mexico, Pennsylvania, Rhode
Island, South Dakota, Utah, Vermont and Virginia.
 
       
WC 990039
  08/02   ADVANCE NOTICE OF CANCELLATION/NON-RENEWAL BY US
 
      (10 DAYS NON-PAYMENT AND 120 DAYS FOR NON-RENEWAL)

18

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements  
 
     
•   Alaska, California, Florida, Georgia, Illinois, Massachusetts, Nevada and
Texas approved a state-specific version.
 
 
     
•   This endorsement is not approved in Arizona, Minnesota, New Jersey, Ohio,
Pennsylvania and Wisconsin.
 
 
     
•   The remaining states approved this endorsement.
 
       
WC000420
  12-02   Terrorism Risk Insurance Extension Act Endorsement
 
       
WC000320A
  2-92   Labor Contractor Endorsement
 
      This endorsement is used in certain states where a Multiple Coordinated
Policy approach is required.
 
       
 
      New York uses a state specific endorsement.
 
       
 
      Florida continues to use the prior version WC000320 (4-91).
 
       
WC000323
  4-84   Multiple Coordinated Policy Endorsement
And
      This endorsement is used in certain states where a Multiple Coordinated
Policy
WC000323A (1-06)
      approach is required.

19

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 3 — Limits, Program & Coverage
Coverage Extensions and Exclusions

          Form #   Edition Date   All Mandatory State Endorsements
WC 000104A
  10/04   FEDERAL EMPLOYERS LIABILITY ACT COVERAGE
 
       
WC 040101A
  04/92   LONGSHORE AND HARBOR WORKERS COMPENSATION ACT COVERAGE ENDORSEMENT
 
       
WC 000109A
  04/92   OUTER CONTINENTAL SHELF LANDS ACT COVERAGE ENDORSEMENT
 
      Description of work
 
     
“No such work at this time. It is agreed that if any work is subject to the
Outer Continental Shelf Lands Act, the Insurer will endorse the policy within
sixty (60) days of the notification.”
 
       
WC 000201A
  04/92   MARITIME COVERAGE ENDORSEMENT
 
      Description of work:
 
     
“No such work at this time. It is agreed that if any work is subject to the
Maritime Coverage Endorsement, the Insurer will endorse the policy within sixty
(60) days of the notification”.
 
       
WC 040315
  09/05   CA LABOR CONTRACTOR AS NAMED INSURED WITH LCF DESIGNATION —
RESTRICTION OF COVERAGE TO CLIENT WORKERS — (Replaces Alternate Employer
Liability Endorsement)
 
       
7606H
      DESIGNATED WORKPLACES EXCLUSION ENDORSEMENT
 
     
•   CA Designated Workplace Endorsement 7606H is designed to exclude
locations/worksites that are part of a construction wrap up.
 
     
•   This endorsement will be issued and attached when specifically requested.
There is no one CA policy.
 
       
WC 040304
  04/84   CA SOLE PROPRIETOR COVERAGE ENDORSEMENT
 
     
Partners: All partners
 
     
Officers: All executive officers
 
     
Others: Each person named in Item 4 of the Information Page
 
       
WC 040305
  01/85   CA VOLUNTARY COMPENSATION AND EMPLOYERS LIABILITY
 
      Employees: “It is agreed that if any such person is subject to the
Voluntary Compensation and Employers Liability Coverage Endorsement, the Insurer
will endorse the policy within sixty (60) days of notification”.
 
       
WC 990422
  10/05   FOREIGN VOLUNTARY COVERAGE ENDORSEMENT
 
       
 
      Schedule
 
     
Name(s) of Employee: “All officers and Employees while stationed or traveling
outside of the United States of America, its territories or possessions, except
masters and members of the crew of any vessel”.
 
       
 
     
State or Country of Operations: “Anywhere in the world, including international
waters or airspace, but excluding the United States of America (including its
territories and possessions) and Puerto Rico

20

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

          Form #   Edition Date   All Mandatory State Endorsements
 
     
and Those countries against which the Office of Foreign Assets Control of the
U.S. Department of the Treasury administers and enforces economic and trade
sanctions”.
 
       
 
     
Designated Workers Compensation Law: “California”
 
       
 
     
Limits of Liability for Excess Repatriation Expense:
 
     
$25,000 — Each employee
 
     
$25,000 — Each accident
 
     
Limits of Liability for Part Two-Employers Liability:
 
     
$2,000,000 — Bodily Injury by Accident
 
     
$2,000,000 - Bodily Injury by Disease. [policy limit and each employee]
 
     
Rates: “Included in the State of regular employment”.
 
       
WC 040361
  11/90   CA BLANKET WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS
Schedule:
 
     
“Any person or organization to whom you become obligated to waive your rights of
recovery against, under any contract or agreement you enter into prior to the
occurrence of loss.”
 
       
WC 040306
  04/84   CA BLANKET WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS
 
       
WC 990011A
  10/03   UNINTENTIONAL ERRORS AND OMISSIONS ENDORSEMENT
 
       
WC 990017
  01/01   CA CANCELLATION ENDORSEMENT
 
       
WC 990411
  08/03   CA ADVANCE NOTICE OF CANCELLATION/NON-RENEWAL BY US EXTENDED
ENDORSEMENT
 
      (10 days Non-payment and 120 days for Non-renewal)

Defense Base Act Coverage is not provided. Premium will be quoted separately by
Worldsource and, unlike expiring, will be billable outside of this program.

21

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Commercial General Liability
Policy Term: Effective at 12:01 AM 01/01/2007 to 01/01/2008
Your Coverage Trigger þ Occurrence o Claims Made

         
Each Occurrence Combined Single Limit
  $ 2,000,000  
Personal & Advertising Injury Limit
  $ 2,000,000  
Damage to Premises Rented to You
  $ 1,000,000  
Medical Expense Limit (any one person)
  $ 10,000  
Employee Benefits Liability*
  $ 2,000,000  
Subject to a Deductible of: $500,000
       
þ *A Claims Made Form — Retrospective Date 06/16/1995
       
o *An Occurrence Form
       
General Aggregate Limit — Per Policy
  $ 4,000,000  
General Aggregate Limit — Per Location/Per Project
  $    
Products-Completed Operations Aggregate Limit
  $ 4,000,000  
Liquor Liability — Aggregate Limit (A separate policy will be issued for this
coverage.)
  $ 0  

                      Retained/Deductible/   Applicable To
Premises, Operations, Personal and Advertising Injury, Medical Payments, or
Damage to Property Liability
  $ 500,000     Each Occurrence
Products-Completed Operations Liability
  $ 500,000     Each Occurrence

Note: 1)For Insured States, the limit of coverage as shown in this document
include(s) the Deductible/Retention Limit layer amount(s) retained by the
Insured . 2) For Self-Insured States, the limits of liability shown are in
excess of the Self Insured Retention amount. 3) Aggregate Limits apply where
applicable.
Coverage Extensions and Exclusions

22

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
CG 0001
  12/04   COMMERCIAL GENERAL LIABILITY COVERAGE FORM
CG 2011
  01/96   ADDITIONAL INSURED — MANAGERS OR LESSORS OF PREMISES
 
     
•   NAME OF PERSON OR ORGANIZATION: ALL LESSORS
WHERE REQUIRED BY CONTRACT
CG 2015
  07/04   ADDITIONAL INSURED — VENDOR
 
     
•   VENDORS: ANY VENDOR FOR WHOM THE INSURED HAS AGREED TO PROVIDE SUCH
INSURANCE UNDER CONTRACT.
 
     
•   PRODUCTS: ALL PRODUCTS OF THE NAMED INSURED
CG 00 62
  12/02   WAR LIABILITY EXCLUSION
CG 0224
  10/93   EARLIER NOTICE OF CANCELLATION PROVIDED BY US (90/10 DAYS)
CG 2116
  07/98   EXCLUSION — DESIGNATED PROFESSIONAL SERVICES
CG 2147
  07/98   EMPLOYMENT-RELATED PRACTICES EXCLUSION
CG 21 49
  09/99   TOTAL POLLUTION EXCLUSION ENDORSEMENT
CG 24 04
  10/93   WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS
TO US
61714
  09/01   ADDITIONAL INSURED — WHERE REQUIRED UNDER CONTRACT OR AGREEMENT WITH
PROFESSIONAL SERVICES EXCLUSION
58332
      TOTAL LEAD EXCLUSION
51767
  04/02   EMPLOYEE BENEFITS LIABILITY COVERAGE (CLAIMS-MADE)
 
     
•   Alaska, Connecticut, Illinois, Maine, Missouri, New Hampshire and
Pennsylvania approved a state-specific endorsement.
 
 
     
The endorsement is not approved in Arkansas, Louisiana, Massachusetts, Nebraska,
New Mexico, New York, North Carolina, Texas, Vermont, Virginia, Washington and
Wyoming.
 
 
     
The endorsement is approved in the remaining states.
 
 
      RETROACTIVE DATE: 06/15/1995
DEDUCTIBLE: $500,000
61944
  02/95   BROAD FORM NAMED INSURED ENDORSEMENT
62132
  03/95   UNINTENTIONAL ERRORS AND OMISSIONS
62898
  09/01   RADIOACTIVE MATTER EXCLUSION
65324
  11/96   MARITIME LIABILITY ENDORSEMENT IN REM COVERAGE
67265
  03/97   AMENDMENT OF OTHER INSURANCE
64009
  11/95   NON-OWNED WATERCRAFT ENDORSEMENT
74435
  09/01   AMENDMENT OF WHO IS AN INSURED
74439
  10/99   CLUBS
IL 0021
  07/02   NUCLEAR ENERGY LIABILITY EXCLUSION (BROAD FORM)
 
     
•   New York approved IL 0023.
 
 
     
The 11-85 edition is approved in Virginia.
 
 
     
•   The 5-02 edition is approved in Nebraska.
 
 
     
•   The 6-02 edition is approved in Vermont.
 
 
     
•   The 5-04 edition is approved in Texas.

23

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
 
     
The remaining states approved the 7-02 edition
 
64004
  09/01   ERISA EXCLUSION
64011
  11/05   AMENDMENT OF COVERAGE TERRITORY
62251
  09/01   AIRCRAFT PRODUCTS EXCLUSION AND GROUNDING ENDORSEMENT
65329
  09/01   DELETION OF CONTRACTUAL LIABILITY EXCLUSION (COVERAGE B)
67260
  03/97   BODILY INJURY DEFINITION EXTENSION
73187
  09/03   DEDUCTIBLE COVERAGE ENDORSEMENT — A
82540
  04/05   ASBESTOS & SILICOSIS EXCLUSION
53820
  07/92   LRRP SHORT FORM ENDORSEMENT
POLICY NUMBER: TBD
81127
  12/02   TERRORISM EXCLUSION

NOTES ON SPECIAL COVERAGE(S)

24

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Commercial Automobile Liability
Policy Term: Effective at 12:01 AM 01/01/2007 to 01/01/2008

              Coverage   Coverage Symbols   Limits
Combined Single Limit —
    1   $2,000,000
 
           
Personal Injury Protection — (Per Insured’s Selection)
    5   $Statutory
 
           
Medical Payments — Each Person Insured —
    2   $5,000
 
           
Uninsured Motorists/Underinsured Motorists —
(Per Insured’s Selection)*
    8 & 9   Options: (check applicable option):
*Not Available in Indiana, Ohio or Michigan
          þ 1.) Rejection where possible/minimum limits elsewhere
 
           
 
          o 2.) Policy limits where possible/maximum limits elsewhere
 
           
 
          o 3.) Other limits (identify limit(s))
 
          $

              Retained/Deductible/         Self Insured Retention   Applicable
To
Automobile Liability, Including UM/UIM/PIP, If Any
  $500,000   Each Accident

Note: 1)For Insured States, the limit of coverage as shown in this document
include(s) the Deductible/Retention Limit layer amount(s) retained by the
Insured . 2) For Self-Insured States, the limits of liability shown are in
excess ofthe Self Insured Retention amount. 3) Aggregate Limits apply where
applicable.
Commercial Automobile Physical Damage

      Physical Damage — Coverage symbol(s)   N/A
Limit — Except for Hired Cars is Actual Cash Value or Cost To Repair, whichever
is less,
   
Minus a Comprehensive Deductible of:
  $ Each Covered Vehicle
Minus a Collision Deductible of:
  $ Each Covered Vehicle
Limit for Hired Cars is Actual Cash Value or Cost To Repair, whichever is less.
Subject to a Maximum Limit of: $
   
Minus a Comprehensive Deductible of:
  $ Each Covered Vehicle
Minus a Collision Deductible of:
  $ Each Covered Vehicle

25

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Coverage Extensions and Exclusions

         
Form #
  Edition Date   All Mandatory State Endorsements
 
       
CA 0001
  03/06   BUSINESS AUTO COVERAGE FORM
 
       
 
     
•   STATE APPROVALS:
 
     
Texas continues to use the TAISO version of this policy.
 
       
 
     
•   Alaska, California, Connecticut, Hawaii, Louisiana, Massachusetts, New
Hampshire, New York and Virginia continue to use the 10-01 edition.
 
       
 
     
The remaining states use the 3-06 edition.
 
       
CA 2001
  03/06   LESSOR — ADDITIONAL INSURED AND LOSS PAYEE
 
       
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Kansas and Texas.
 
       
 
     
•   Hawaii, Massachusetts and Virginia use a state-specific endorsement.
 
       
 
     
•   The 10-01 edition is approved AK, CT, GA, LA, NH, NY and OR.
 
       
 
     
•   The 3-06 edition is approved in the remaining states.
 
       
 
      DESCRIPTION: ALL LEASED AUTOS
 
       
61944
  02/95   BROAD FORM NAMED INSURED
 
      STATE APPROVALS:
 
      Texas approved a state-specific version of this endorsement.
 
       
 
      This endorsement is not approved in Arkansas, Delaware, Idaho,
Massachusetts, Nebraska, North Carolina, Ohio, Vermont and Virginia.
 
       
 
      The endorsement is approved in the remaining states.
 
       
CA 2313
  12/93   TRAILER INTERCHANGE FIRE AND FIRE AND THEFT COVERAGES
 
       
 
     
•    STATE APPROVALS:
 
     
This endorsement is not approved in Texas.
 
       
 
     
•   The endorsement is approved in the remaining states.
 
       
 
      Limit of Insurance: $2,000,000
 
      Rate: Flat
 
      Minimum Premium: Included
 
       
9910
  09/02   Drive Other Car Coverage — Broadened Coverage For Named Individuals
 
     
•   STATE APPROVALS:
 
     
California, Massachusetts, Texas and Virginia approved a state-specific version
of this endorsement.
 
       
 
     
•   The endorsement is approved in the remaining states.
 
     
Name of Individual: “All executives of the named insured who are furnished autos
by the Named Insured and who do not have

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
 
     
personal auto insurance”
 
CA 9916
  12/93   HIRED AUTOS SPECIFIED AS COVERED AUTOS YOU OWN
 
       
 
     
•   STATE APPROVALS:
 
     
Hawaii and Texas approved a state-specific version of this endorsement.
 
     
•   This endorsement is not approved in Kansas.
 
     
•   The endorsement is approved in the remaining states.
 
       
 
      Description of Auto:
 
      “Any auto hired, loaned, leased or furnished to the Named Insured for a
period of six (6) months or more”.
 
       
CA 9933
  02/99   EMPLOYEES AS INSUREDS
 
     
•   STATE APPROVALS:
 
     
Texas approved a state-specific version of this endorsement.
 
       
 
     
•   The endorsement is approved in the remaining states.
 
       
CA 9948
  03/06   POLLUTION LIABILITY — BROADENED COVERAGE FOR COVERED AUTOS — BUSINESS
AUTO, MOTOR CARRIER AND TRUCKERS COVERAGE FORMS
 
      STATE APPROVALS:
 
     
•   Massachusetts and Texas approved a state-specific version of this
endorsement.
 
     
•   This endorsement is not approved in New York, Vermont and Virginia.
 
     
•   The 9-02 edition is approved in AK, CT, GA, HI, LA, NH and OR.
 
     
•   The 3-06 edition is approved in the remaining states.
 
       
53820
  07/92   LRRP SHORT FORM ENDORSEMENT
 
      POLICY NUMBER: WC FL TBA
 
       
61709
  12/94   AMENDMENT OF DUTIES IN THE EVENT OF ACCIDENT, CLAIMS, SUIT OR LOSS
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Arkansas, North Carolina, Ohio and Virginia.
 
     
•   The endorsement is approved in the remaining states.
 
       
61710
  12/94   ADDITIONAL INSURED — WHERE REQUIRED UNDER CONTRACT OR AGREEMENT
[EXCLUDES CONTRACTS OR AGREEMENTS FOR PROFESSIONAL SERVICES]
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Arkansas, Nebraska, North Carolina, Ohio,
Texas, and Virginia.
 
     
•   The endorsement is approved in the remaining states.
 
       
62135
  03/95   WHEN WE DO NOT RENEW
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Arkansas, Delaware, Idaho, Massachusetts,
Michigan, Nebraska, New Hampshire, North Carolina, South Carolina, Vermont,
Virginia and Washington.
 
     
•   The endorsement is approved in the remaining states.
 
       
62138
  03/95   EARLY NOTICE OF CANCELLATION PROVIDED BY US
 
     
•   (90 Days for Non-Renewal and 10 days for Non-Payment
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Arkansas, Delaware,

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
 
     
Idaho, Massachusetts, Michigan, Nebraska, New Hampshire, North Carolina, South
Dakota and Vermont.
 
       
 
     
•   The endorsement is approved in the remaining states.
 
       
62897
  06/95   WAIVER OR TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Arkansas, North Carolina and Ohio.
 
     
•   The endorsement is approved in the remaining states.
 
       
65330
  11/96   MEXICAN COVERAGE BROAD FORM
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Texas and Virginia.
 
     
•   The endorsement is approved in the remaining states.
 
       
67264
  03/97   EXPECTED OR INTENDED INJURY EXCLUSION AMENDMENT
(REASONABLE FORCE EXCEPTION)
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Minnesota and Texas.
 
     
•   The endorsement is approved in the remaining states.
 
       
73187
  09/03   DEDUCTIBLE COVERAGE ENDORSEMENT — A
 
       
74438
  10/99   BODILY INJURY DEFINITION EXTENSION
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved in Idaho, Maine, Michigan, Mississippi, South
Dakota, Virginia, West Virginia and Wisconsin.
 
     
•   The endorsement is approved in the remaining states.
 
       
86203
  07/04   TERRORISM EXCLUSION
 
       
 
     
•   STATE APPROVALS:
 
     
Alaska, Hawaii, Illinois and Oregon approved a state-specific version of this
AIG endorsement.
 
       
 
     
•   This AIG endorsement is not approved in Ohio and South Carolina. However,
you may use ISO Exclusion of Terrorism CA2384.
 
       
 
     
•   This AIG endorsement is not approved in New Jersey and Oklahoma. However,
you may use ISO Exclusion of Terrorism Above Minimum Statutory Limits CA2386.
These states only permit the exclusion of terrorism above MFR.
 
       
 
     
•   There are no approved exclusions for Florida, Georgia, New York and
Virginia. Coverage must be approved and priced for.
 
       
 
     
•   This AIG endorsement is approved in the remaining states.
 
       
86679
  08/04   FELLOW EMPLOYEE EXCLUSION DELETED
 
      Note: This endorsement previously had form number 64007 (11-95). Since
there is a GL form with the same number, we had to assign a new form number to
this endorsement. It is now 86679.
 
     
•   STATE APPROVALS:
 
     
This endorsement is not approved Maryland, New Jersey, Virginia and Wisconsin.
 
     
•   The endorsement is approved in the remaining states.
 
       
MCS — 90
  04/00   MOTOR CARRIER PUBLIC LIABILITY ENDORSEMENT (MCS-90)
 
       
IL 0021
  07/02   NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT (BROAD FORM)

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

         
Form #
  Edition Date   All Mandatory State Endorsements
 
      STATE APPROVALS:
 
       
 
     
•   This endorsement is not approved in New York.
 
     
•   Washington uses IL 01 98 7-02.
 
     
•   The 3-92 edition is approved on Texas.
 
     
•   The 4-98 edition is approved in Massachusetts.
 
     
•   The 5-02 edition is approved in Nebraska.
 
     
•   The 6-02 edition is approved in Vermont.
 
     
•   The remaining states approved the 7-02 edition.
 
       
MANUSCRIPT
  MANUSCRIPT   KNOWLEDGE OF OCCURRENCE
 
      It is understood and agreed that knowledge of an occurrence, claim or suit
by any agent, servant or employee of the insured shall not constitute knowledge
by the insured unless the Vice President of Risk Management & Insurance of the
GEVITY HR, Inc. has received such notice.
MANUSCRIPT
  MANUSCRIPT   NOTICE OF ACCIDENT
 
      The Company shall not deny coverage as the result of an unintentional
failure by the insured to give notice as respects to any accident, provided
notice is given as soon as practicable after the Vice President of Finance of
Gevity HR, Inc. becomes aware that this policy may apply to such accident.

NOTES ON SPECIAL COVERAGE(S)
UM/UIM Automobile Coverage
For Uninsured Motorists coverage (UM), Underinsured Motorist coverage (UIM) and
Personal Injury Protection coverage (PIP), there are specific rejection/election
of coverage forms that must be completed, signed, and returned to us prior to
the inception of automobile coverage. You must complete, sign and return such
forms to us by the Policy(ies) inception date of coverage. Your failure to
return all required selection forms shall be deemed your acceptance that the
automobile policy(ies) will be issued and rated to include the limits of UM/UIM
coverage equal to the policy limits of liability, or equal to the maximum limits
required by law if lower than policy limits, and the limit for PIP coverage that
we are required to offer for each state. In the event you fail to return the
signed forms and we apply UM/UIM and PIP limits as described herein an
additional charge for this change in coverage will be added to your Automobile
Liability premium, as referenced in Section 2., Program Rates and Premiums. Your
acceptance of the casualty insurance program supersedes anything to the contrary
in specification(s), proposal(s), quotation(s), this binder(s) or any other
“agreement” or “understanding”, and you will be responsible for the payment of
UM/UIM/PIP damages within your “retention or deductible” whichever is
applicable.
Please be advised that we do not offer UM/UIM coverage in Indiana, Michigan and
Ohio. This program does not include in its pricing UM/UIM for vehicles garaged
in Indiana, Michigan or Ohio.
In any State permitting election of UM limit “stacking”, any UM coverage
contemplated herein is predicated upon rejection of the “stacking” provision by
each Named Insured.
State DMV Proof of Coverage Reporting Requirements
The department of Motor Vehicles (DMV) in various states has implemented
anti-fraud systems that require that proof of coverage be on file in their data
bases. These various state DMV’s presently mandate the

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
filing of specific data elements as State law(s) require. These data elements
must be supplied to us upon binding Automobile Liability Coverage. Without the
information, we are unable to make our mandatory reports to the DMV. It is
critical that you provide information in a timely manner to your broker. If we
are unable to comply with the reporting requirements, it may result in loss of
your tags, fines, impoundment of your vehicle(s), including cargo, and your
inability to register your vehicle(s). In addition, you may be subject to State
fines and penalties.
We have advised your broker as to the Automobile Liability Insurance Reporting
Procedures information available on our web site. Additionally, we have advised
your broker on how to retrieve “templates” on our web site for capture and
transmission of vehicle information for such reporting.
For more about the DMV reporting requirements visit the Virtual Office web site
under https://.accessaig.com/accessaig/public/login/frameset.
It is your responsibility to supply us, through your broker, with all of the
required data on changes to your list of vehicles that are covered by the policy
(vehicle list) after the inception date of the policy. Failure to do so may
result in the previously mentioned consequences.
Please contact your broker to ensure that all of the necessary information has
been, and continues to be, provided to us.
Automobile Coverage where a Composite Rate Applies
For automobile coverage, the earned premium will be computed based on the number
of units at inception of the casualty insurance program plus the number of units
at expiration, divided by two (2).
COMMERCIAL AUTOMOBILE TERRORISM RISK EXTENSION ACT OF 2005 NOTIFICATION
You are hereby notified that under the Terrorism Risk Insurance Extension Act of
2005 (which amends the Terrorism Risk Insurance Act of 2002), Commercial
Automobile is excluded from the covered lines of the Act. While no federal
backstop currently exists for Commercial Automobile, we are willing to provide
you with Terrorism coverage subject to the limitations and exclusions of each
automobile insurance contract for the additional premium indicated below.
For your convenience, our standard terrorism definition follows, however, the
definition may vary based on modifications required by individual state
regulatory offices.
DEFINITIONS — The following definitions shall apply:
“Terrorism” means the use or threatened use of force or violence against person
or property, or commission of an act dangerous to human life or property, or
commission of an act that interferes with or disrupts an electronic or
communication system, undertaken by any person or group, whether or not acting
on behalf of or in any connection with any organization, government, power,
authority or military force, when the effect is to intimidate, coerce or harm:

  a.   A government;     b.   The civilian population of a country, state or
community; or     c.   To disrupt the economy of a country, state or community.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
This quotation for Commercial Automobile includes a charge for Terrorism
coverage, which is referenced in Section 2. Program Rates and Premiums.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Underwriting Guidelines
At a minimum we will not provide coverage for the following

  •   [*]

The following clients must be referred to AIG for approval

  •   [*]     •   [*]     •   [*]

Referral Items

  •   Policy Issuance and Weekly reporting Information     •   4 years including
current policy period currently valued hard copy loss information     •  
Historical Payroll Information     •   Application

Special Conditions
You must execute and return an original executed copy of both the Payment
Agreement and the Schedule, and any other documents we deem necessary to
adequately document the terms of the program, to us at our address shown above
within 30 days after the Effective Date above.
If not so returned and delivered, we may void the Finance Plan summarized herein
and set forth in detail in the Payment Agreement. Upon our notice of our voiding
of the Finance Plan to you at your address shown above, the entire amount of the
“Estimated Total Cost” specified under FINANCE PLAN herein will become
immediately due and payable to us in cash at our address shown above. Failure to
pay such amount within 10 days thereafter shall entitle us to cancel the
insurance and any reinsurance and to terminate all services under this Program
by notice to you when not less than 10 days thereafter the cancellation and
termination shall become effective.
Claims Administration
Claims will be handled by AIG Claims Services, Inc. The claims administration
pricing is included in the insurance company expenses. Rehabilitation and
managed care services are billed separately at prevailing rates. Claim
Investigations conducted by the Investigative Services Division to assist the
claims adjusters are an allocated expense and charged to the file at Prevailing
Time & Expense. Fraud investigations conducted for the purpose of criminal
prosecution are not billed to the file and considered part of the overall claim
fee.
The claims administration charges include four intellirisk setups and 12 monthly
tape to tape triangles to Marsh STARS system. If the program does not renew, AIG
agrees to continue to provide access to Intellirisk setups and monthly tapes as
long as Gevity requires, at prevailing rates. Also if the program does not
renew, AIG will continue to grant access to data and tape to tape triangles to
Marsh at prevailing rates.
Allocated loss adjustment expenses, as defined above, are not included in the
Insurance Company expenses.
Loss Control Services
We understand that Gevity HR’s loss control professionals are providing ongoing
loss control services to your clients and that additional loss control services
have not been requested as part of the AIG program. Only
 

*   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
those loss control surveys needed for underwriting purposes and those services
mandated by state regulatory requirements will be included in the AIG program.
Of course, additional loss control services can be provided on an unbundled
basis at any point during the policy year.
AIG Consultants will provide a Technical Services Manager — [*] — to manage the
delivery of all services. We maintain a nationwide network of loss control
consultants to provide service at your key clients’ facilities, which can serve
as a cost effective complement to the work done by Gevity’s field risk
consultants. AIG Consultants, Inc. can provide personnel with experience and
expertise commensurate with the services needed. Ergonomic and/or industrial
hygiene specialists can be provided as appropriate. Consultant training and/or
specialty training in industrial hygiene/ergonomics can be provided to your
field risk consultants. To ensure readily available competent consultants near
our clients various locations, we maintain a complement of approved
subcontractor consultants to supplement our internal loss control professionals.
These subcontractors are subject to our Quality Management System approval
process as a requirement of AIG Consultant’s Inc. ISO 9000 certification.
Coverages
A specimen policy will be prepared for the MCP states with all appropriate forms
attached and this will serve as the master sample for each of those states where
multiple policies are required.
All endorsements may not be approved for use in all states and we can only
include those endorsements where they are approved.
Named insured will include all Gevity HR, Inc. affiliated or subsidiary entities
for which payroll are reported to AIG Risk Management shown as follows:
Gevity HR, Inc. and it’s wholly-owned subsidiaries:
     Gevity HR, L.P.
     Gevity HR II, LP.
     Gevity HR, III, LP.
     Gevity HR IV, L.P.
     Gevity HR V, L.P.
     Gevity HR VI, L.P.
     Gevity HR VII, L.P.
     Gevity HR VIII, L.P.
     Gevity HR IX, L.P.
     Gevity HR X, L.P.
     Gevity HR XI, LLC

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
     Gevity HR XII Corp.
     Gevity HR XIV, LLC
     Gevity Insurance Agency, Inc.
     Staff Leasing, LLC.
     Concorda Insurance Company Limited
 

*   THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Workers’ Compensation Premiums
Except for guaranteed cost policies, the Workers’ Compensation premium does not
include the non-ratable elements mandated by the various states.
WC/EL premiums and non-ratable elements are subject to rates approved by the
various states and the actual experience modifications promulgated. Premium
adjustments resulting from WC/EL rate/premium changes applicable at inception,
which were not recognized at the time the workers’ compensation policy was
initially rated, will result in revised installments reflecting the amount of
any such adjustments. The revised amounts will be an obligation of yours under
the insurance program.
Workers’ Compensation Loss Reimbursement (Deductible) Policy/Plan Premiums
A discount in the premium for the loss reimbursement (deductible) policies shown
in the schedule is calculated in accordance with our deductible rating plan. The
premium includes a provision for certain taxes and assessments (including
residual market plan assessments), which we expect to become obligated to pay
based on the premium.
Furthermore, in the event that any state regulatory authority determines that
deductible reimbursements are taxable as premium or subject to assessments you
will be obligated to pay the premium taxes and/or assessments applicable to the
Policies.
Any additional premium amounts calculated under this insurance program do not
accrue toward maximum or aggregates which may be included in your Casualty
Insurance Program.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
DEDUCTIBLE BUYBACK ADJUSTABLE PREMIUM OPTION
Deductible Liability Protection policy also known as the Deductible Buyback
policy buys back losses that are incurred within your filed loss
reimbursement/deductible policies. The Deductible Buyback form provides for a
feature that allows for the adjustability of the Deductible Buyback premium
based on developed losses from the policies being bought back.
Lines of Business Bought Back — Workers Compensation/Employers Liability
Deductible Buyback Premium —

                 
Premium includes:
               
Losses being bought back by policy
  $ 14,000,000          
Taxes on Deductible Buyback Losses
  $ 71,377          
Other Expenses (Including FET)
  $ 70,000     (if applicable)
 
               
Total Premium Pay in for Deductible Buyback
  $ 14,141,377          
 
               
Aggregate Limit of Losses being bought back
  $ 14,000,000          

This Deductible Buy Back Program for Workers Compensation will not be
adjustable.
Other Terms and Conditions: Mandatory endorsements required on policies
AIG Global Risk Management will pay all losses incurred within the Loss
Reimbursement/Deductible layer of $500,000 each accident/occurrence up to the
aggregate of $14,000,000.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Your responsibility for the payment of “Allocated Loss Adjustment Expenses” For
Loss Sensitive
Programs/Plan is:

              ALAE Option         (enter ALAE Option         A, B, C or D as  
If ALAE Option C, Coverage   applicable)   enter Excess %
Worker’s Compensation
  C   100%
General Liability
  C   100%
Automobile Liability
  C   100%
 
           %

A:    100% of the total “Allocated Loss Adjustment Expenses” up to the “Retained
Limit”. However, the most you are responsible for with respect to damages and/or
indemnity and “Allocated Loss Adjustment Expenses” combined shall not exceed the
“Retained Limit”.   B:    100% of the total “Allocated Loss Adjustment
Expenses”.   C:    All or part of the “Allocated Loss Adjustment Expenses”
determined according to the following:       If we incur NO obligation under the
policy(ies) to pay damages resulting from a claim, you are responsible for all
“Allocated Loss Adjustment Expenses” up to the applicable “Retained Limit” plus
a percentage of all remaining “Allocated Loss Adjustment Expenses” in excess
thereof. That percentage is shown above under “Option C Excess %”; or.       If
we DO incur an obligation under the policy(ies) to pay damages resulting from a
claim, you will be responsible for a percentage of “Allocated Expense Adjustment
Expenses”. That percentage shall be determined by dividing the “Retained Limit”
paid by the total damages paid subject to the Limits of Insurance.   D:    No
“Allocated Loss Adjustment Expenses”.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 4 — Premium Payments and Program Terms
Incurred Loss Payment Plan:
Cash Deposit, Installments and Estimated Deferred Amounts

                                                              Provision        
          Provision for                 for Expenses   Special   Deductible  
Limited   Estimated             and Excess   Taxes and   Buyback Loss   Losses  
Payment Payment No.   Due Date   Losses (1)   Surcharges   Provision   (RCAMP)
(2)   Obligation
1
    01/01/2007     $ 2,041,756     $ 520,976     $ 5,541,667     $ 0     $
8,104,399  
2
    02/01/2007     $ 2,041,756     $       $ 5,541,667     $ 0     $ 7,583,423  
3
    03/01/2007     $ 2,041,756     $       $ 2,916,666     $ 2,625,001     $
7,583,422  
4
    04/01/2007     $ 2,041,756     $       $       $ 5,541,666     $ 7,583,422  
5
    05/01/2007     $ 2,041,755     $       $       $ 5,541,667     $ 7,583,422  
6
    06/01/2007     $ 2,041,755     $       $       $ 5,541,667     $ 7,583,422  
7
    07/01/2007     $ 2,041,755     $       $       $ 5,541,667     $ 7,583,422  
8
    08/01/2007     $ 2,041,755     $       $       $ 5,541,667     $ 7,583,422  
9
    09/01/2007     $ 2,041,755     $       $       $ 5,541,667     $ 7,583,422  
10
    10/01/2007     $ 2,041,755     $       $       $ 5,541,666     $ 7,583,421  
11
    11/01/2007     $ 2,041,755     $       $       $ 5,541,666     $ 7,583,421  
12
    12/01/2007     $ 2,041,755     $       $       $ 5,541,666     $ 7,583,421  
13
          $       $       $               $    
Subtotals
          $ 24,501,064     $ 520,976     $ 14,000,000     $ 52,500,000     $
91,552,040  
DLP*
            N/A       N/A       N/A     $       $    
DEP*
          $       $       $         N/A     $    
Totals
          $ 24,501,064     $ 520,976     $ 14,000,000     $ 52,500,000     $    

DLP means “Deferred Loss Provision”. This is the estimated amount You must pay
us as “Additional Payments” described below.
DEP means “Deferred Expense Provision”. This is an estimated amount that You
must pay us as such shown in the Schedule of Policies and Premiums to the
Payment Agreement.
Notes: (1) “Provision for Expenses and Excess Losses” is a part of the Premium.
The remainder of the Premium is included under “Provision for Limited Losses”.
2) “Provision for Limited Losses” includes provision for Loss within your
Retention (both Deductible and Loss Reimbursement Limit) and Your share of ALAE.
Any “Deposit” in this column is the Claims Payment Deposit. Refer to definitions
in the Payment Agreement.
Additional Payments
You must pay us the installment amounts by the due dates as specified in this
document. We have calculated the part of those installments designated as
“Provision for Limited Losses” to equal the Losses within Your
retention/deductible/loss reimbursement limit and Your share of ALAE that we
expect to incur during the period for which Provision for Limited Losses amounts
are shown. The amount we incur will be the sum of the amounts we pay and the
amounts we reserve for payment on claims that have been reported to us, but
shall not include our reserves for losses that have been incurred but have not
been reported to us.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Billing Method
Billing to:

þ     You at Your address shown in the Schedule, or   o     Your Representative
at its address shown in the Schedule; or   o     Automatic Withdrawal from the
account described below.

   
 
If Automatic Withdrawal Account applies:    Minimum Amount: $       Name of
Depository Institution:       Address:       Account Number:      
 

Incurred Loss Accounting Adjustments
The first Premium Plan Adjustment will take place as soon as practicable after
the expiration date of the policies. The adjustment will be based on the rates
shown in this document, audited exposures and loss information valued as of
06/30/2008 to the minimums indicated within the terms of your insurance program.
Thereafter, annual Ultimate Incurred Loss Plan adjustments will take place and
continue until you and we agree in writing to perform no further recalculation.
Additional premium due us, or return premium due you, resulting from the
adjustment, will be payable in its entirety within the time permitted by notice
to you and subject to the terms of the Payment Agreement.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 5— Important Notes
Documentation
By accepting this Casualty Insurance Program, the Insured agrees to provide AIG
Risk Management with the correctly completed and signed documents as requested
by AIG Risk Management:

•   For Loss Sensitive Programs/Plans, the Payment Agreement, including any
Addendum(s), and Security required under any Premium Deferral Plan (when
required), within 30 days of the inception date of the program.

      Please Note: The Payment Agreement, together with all schedules, addenda,
policies and any related agreements between you and us, constitutes the basis
for a program of insurance coverage. We would not have entered into any of them
without your agreement on all of them. For that reason, you should review all
such documents together when making any accounting, tax or legal determinations
relating to the insurance program.

•   Completed UM/UIM/PIP Automobile Election/Rejection forms prior to inception
of automobile coverage.

•   A signed copy of the Acknowledgement form included in this document, which
confirms acceptance of all aspects of the Casualty Insurance Program by the
Insured and Agent, returned within 30 days of the inception date of the program.

•   PEO Addendum to Payment Agreement

All documents requiring signature must be signed by a authorized representative
of the Insured and in some instances, on behalf of Your Insurance
Representative. All documents must be dated as of the inception date of the
program.
Failure to execute any of the requisite documents within the time periods
required will render the Financial Plan of your Casualty Insurance Program
voidable at the discretion of AIG Risk Management. The entire amount of the
“Estimated Cost” specified under the program will thereafter become immediately
due and payable to us in cash. Failure to pay premium within 5 Days of the
billing date may result in the exercise of various default remedies including,
but not limited to, cancellation.
Acquisitions and Divestitures
With respect to any acquisitions or divestitures that represent a greater than
10% increase in exposure, AIG Risk Management may, at its discretion, require a
program review. That review MAY result in a premium adjustment.
Estimated Premium Quoted in This Proposal or Binder
The estimated premium(s) shown in this Proposal or Binder is based on rates, and
experience modifications (if applicable) in use at the time this proposal is
submitted to you. Any reference to Total or Final Premium is for explanatory
purposes only. None of the numbers herein are intended to represent final
calculation. Neither AIG Global Risk Management, nor any member company of
American International, Inc. shall be bound by the calculations arrived at in
the tables shown. The tables serve merely to demonstrate the calculation
process. All amounts are subject to modification through the binding process and
to program adjustments after binding. The terms of the Casualty Insurance
Program, our manuals of rules, classifications, rates and rating plan will
determine the adjusted premium and surcharges (if any). All information required
to conduct our adjustments are subject to verification and change.
Estimated Taxes and Assessments Quoted in this Proposal or Binder For Loss
Sensitive
Programs/Plans

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Any references made in this proposal or binder to taxes or tax rates or
assessments are subject to change if such taxes or tax rates or assessments are
changed or modified by the respective taxing authority(ies) prior to inception
or following inception. You shall be obligated for any resulting increase that
occurs.
Premium Tax on Deductibles For Loss Sensitive Programs/Plans
If any state regulatory authority that mandates amounts which you have paid as
deductible reimbursements are considered premium, and thus are subject to
premium taxes and/or assessments makes any claim, we will notify you of the
existence of such a claim. We will give you the opportunity of joining with us
in any proceeding to contest such claim at your own expense, or to contest such
claim independently at your own expense. In the event a determination is made
that said reimbursed amounts are taxable as premium or subject to assessments,
you will be responsible to pay the premium taxes and/or assessments and any
related fines, penalties or interest that may be imposed as a result of the
non-payment of premium taxes and/or assessments applicable to the Policies.
Notice about the Office of Foreign Assets Control (OFAC)
This proposal or resulting binder, the continuation of any bound insurance, and
any payments to you, to a claimant or to another third party, may be affected by
the administration and enforcement of U. S. economic embargoes and trade
sanctions by the Office of Foreign Assets Control (OFAC), if we determine that
any such party is on the “Specially Designated Nationals or Blocked Persons”
list maintained by OFAC.
Notice Applicable to Policies Issued Using the New York Trade Zone
For policies issued using the New York Trade Zone rule, the policy forms and the
applicable rates are exempt from the filing requirements of the New York State
Insurance Department. However, such forms and rates must meet the minimum
standards of the New York Insurance Department.
Vermont Statute, Title 18: Health, Chapter 38: Lead Poisoning
Affidavit Attesting To Compliance With
§1759. Essential Maintenance Practices
In 1996, the State of Vermont passed legislation (Act 165) pertaining to lead
poisoning. The Act requires owners of pre-1978 rental dwellings or apartments,
and operators of child care facilities housed in buildings constructed prior to
1978, to perform ESSENTIAL MAINTENANCE PRACTICES (EMP’s) unless the property is
certified pursuant to Act 165 to be lead-free.
An important part of §1759 addressing EMP’s requires an owner/landlord to sign
an affidavit indicating essential maintenance practices have been performed, the
dates they were completed, and who performed them. This affidavit attesting to
compliance must be filed annually with us (as your liability insurance carrier)
as well as the Vermont Department of Health.
The member companies of American International Group, Inc., in accordance with
instructions by the Vermont Department of Banking, Insurance, Securities and
Health Care Administration, is reaffirming with owners/landlords of affected
properties their obligations for compliance with Act 165. If §1759 is applicable
to you, your affidavit is an important component of our underwriting file.
Compliance with the Essential Maintenance Practices, and receipt of
certification from a licensed inspector, provides the owner/landlord with
certain liability protections.
Please ensure you follow through with certification and provide us with the
required affidavit so that you enjoy the full protection the statute provides.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
NOTE: This notice is not intended to detail the provisions of Act 165. Please
see full text of the section of Act 165 (§1759) addressing EMP’s on the internet
at URL:
http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=18&Chapter=038&Section=01759
Terrorism Risk Insurance Act Of 2002
And
Terrorism Risk Insurance Extension Act Of 2005
You are hereby notified that under the federal Terrorism Risk Insurance Act of
2002 (the “Act”) effective November 26, 2002, and its amendment, the Terrorism
Risk Insurance Extension Act of 2005 (jointly referred to as the “Act”), you now
have a right to purchase insurance coverage for General Liability losses arising
out of an Act of Terrorism, which is defined in the Act as an act certified by
the Secretary of the Treasury (i) to be an act of terrorism, (ii) to be a
violent act or an act that is dangerous to (A) human life; (B) property or
(C) infrastructure, (iii) to have resulted in damage within the United States,
or outside of the United States in case of an air carrier or vessel or the
premises of a U.S. mission and (iv) to have been committed by an individual or
individuals acting on behalf of any foreign person or foreign interest, as part
of an effort to coerce the civilian population of the United States or to
influence the policy or affect the conduct of the United States Government by
coercion.
On workers’ compensation policies, coverage for acts of terrorism is mandatory
and your quotation will automatically include a charge for terrorism coverage.
You should read the Act for a complete description of its coverage. The
Secretary’s decision to certify or not to certify an event as an Act of
Terrorism and thus covered by this law is final and not subject to review. There
is a $100 billion dollar annual cap on all losses resulting from Acts of
Terrorism above which no coverage will be provided under this policy and under
the Act unless Congress makes some other determination.
For your information, coverage provided under this proposal or binder for losses
caused by an Act of Terrorism may be partially reimbursed by the United States
under a formula established by the Act. Under this formula the United States
pays 90% of terrorism losses covered by this law exceeding a statutorily
established deductible that must be met by the insurer, and which deductible is
based on a percentage of the insurer’s direct earned premiums for the year
preceding the Act of Terrorism.
Payment of Premium
Wire Transfers
The Broker will be sent a premium invoice for the insured and the insured will
then forward the money to the broker who will then wire transfer the money,
indicating what the payment is for, to our account:
     CHASE MANHATTAN BANK, NEW YORK, N. Y.
     ABA NO. 021-000-021
     ACCOUNT NAME: NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA.
     ACCOUNT NO. 323-160-387 Phone #: 1-877-204-1124
The broker is to notify AIG Risk Management the day the wire transfer is made so
that we may notify our New York accounting department.
Express Mail: Premium Payments can be express mailed to the following address:
AMERICAN INTERNATIONAL COMPANIES
4 CHASE METROTECH CENTER, 7TH FLOOR EAST

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
LOCKBOX 10472
BROOKLYN, N. Y. 11245
Premium Audit
Premium audits are required in all states covered under your Casualty Insurance
Program. AIG Risk Management has a staff devoted to the professional auditing of
our accounts. An auditor will be available to meet with you to set the
parameters and timetable for the audit process. Records for audit purposes
should be available at each location within 30 Days after the policy(ies)
anniversary or expiration.
Any premium adjustment developed in the course of an audit of programs/plans
that are subject to the terms of the Payment Agreement will be deferred until
Plan Adjustment. Changes in the premium amount, based on the completed audits,
of all other types of program/plans, including Guaranteed cost programs, will be
due within 30 Days of the billing date.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 6 — attachments
(AIG LOGO) [g06030g0603003.gif]
Overview
AIG Claim Services (AIGCS) is dedicated to enhancing our customers’ competitive
position by delivering effective risk control and claim management services
which measurably reduce the ultimate cost of risk. We are committed to
excellence, responsible stewardship and superior performance. Some 2,400 claim
professionals manage workers’ compensation and property and casualty claims in
our service centers strategically located throughout the country.
Special Account Instructions
Where applicable, during AIGCS’ initial set up meeting we develop Special
Account Instructions, with your input, to provide information to claim
specialists regarding the custom claim management, reporting and threshold
requirements you need. Change requests may be submitted by the broker or
customer to the AIGCS Team Representative. All service centers managing claims
will be trained on these Special Account Instructions.
The Special Account Instructions that are developed and tailored for you are
communicated electronically with all updates immediately available through the
system to our service centers. Our claim specialists view the Special Account
Instructions prior to the handling of any claim.
Claims Reporting
1-800 Reporting — AIG Early Notice® (AIG EN) is a toll-free claims reporting
service which allows customers to report workers’ compensation, general
liability, automobile, and property claims by telephone 24 hours a day, 7 days a
week. There is no cost for this service.
Internet Claim Reporting — AIGCS offers its customers IntelliRisk® First Notice
of Loss (FNL) reporting through the Internet. This service is available to all
of AIGCS’ active customers who have registered for Internet claim reporting
through their service representative. For further details visit our Website at
www.aigcs.net.
Risk Management Information Systems (RMIS)
Our Risk Management Information Services (RMIS) Division provides a valuable
source of claim information solutions for today’s demanding risk management
concerns. Through our suite of IntelliRisk® e-Services and the support of our
designated business and technology professionals, we help the policyholders of
AIG member companies manage their claim program and reduce costs.
The suite of IntelliRisk e-Services was designed to help facilitate every step
of the claim process, and includes:
IntelliRisk NetSource® — An Internet-based online claim analysis and reporting
system that provides real-time claim, payment and adjuster activity information
for companies of all types and sizes. Available features include:

•   A powerful query function to pinpoint and analyze claim information

•   Profiling to identify potential high severity claims

•   A communication feature to facilitate e-mail correspondence

•   An online reporting tool that draws on current and historical claim data

IntelliRisk NetData® — Offers various methods of receiving electronic reports
and data. Features include an Internet e-mail service that “pushes” an
electronic version of our loss report as a file attachment in an e-mail, reports
on CD-ROM, and the ability to send data via FTP (File Transfer Protocol) and on
tape, cartridge or diskette.
IntelliRisk® First Notice of Loss (FNL) — Allows customers to report workers’
compensation and Property and Casualty claims online, sending the information
directly into the AIGCS claim system and to the appropriate AIGCS service
center.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
IntelliRisk® Medical Provider Listing (MPL) — Provides easy, fully searchable
web-access to information on nearby network doctors, hospitals or specialists.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 6 — attachments
(AIG CONSULTANTS, INC. LOGO) [g06030g0603004.gif]
Executive Summary
AIG Consultants, Inc.®, (AIGC), a member company of American International
Group, Inc., provides comprehensive safety, healthcare, environmental, property,
and crisis management services. AIGC has been providing clients with quality
service for over two decades. Quality and measurable results: these factors make
the difference for AIGC’s customers. AIGC is ISO 9001-2000 certified, a
distinction which guarantees our organization adheres to a recognized global
framework for delivering excellence in customer service, best practices and
business leadership. At the core of our operating philosophy is a commitment to
delivering the highest level of professional service. Drawing on our expertise,
we provide customized assistance focused on our customers’ needs. Through our
international network of operations, we offer our services worldwide, and have
built a record of success in effectively servicing the needs of our customers.
Our international team of over 400 consultants, supplemented by our network of
qualified and approved subcontractors/vendors provide technical expertise in a
wide array of specialties to ensure your specific needs are met and sound
business solutions are delivered.
AIGC constantly strives to add value to our consulting services by offering
specialty programs designed to meet our customers’ needs above and beyond the
traditional offerings. Innovative programs include:
PATROL™ (Planning And Tracking Response On-Line)
Threat and Vulnerability Risk Assessment (TVRA)
AIG Caring Advantage
PIER ( Pollution Incident and Environmental Response) Program
Best Practices Assessments (BPA)
AIG RISK TOOL
Our services are consultative in nature and focus on loss drivers and your
specific needs. The following key planning elements are offered for your review
and consideration:

  •   A single Account Manager assigned to your account providing you a single
point of contact for all services provided by AIGC.     •   Safety training and
safety materials (programs, videos, etc.) in Spanish and English can be
provided.     •   Additional key services can also be utilized as required to
provide business solutions to issues of most concern to our customers in today’s
challenging society. Such areas as; Industrial Hygiene/Occupational Health,
Safety Accountability and Incentive Programs, Behavioral Based Safety,
Ergonomics, Fleet Training (on-line and personalized), and Early Return to Work
Programs.     •   Web based and on-site fleet safety programs, evaluations and
specialized training programs.     •   Development of customized video and web
based training and informational programs.

NOTE: Basic risk control services for underwriting purposes have been included
in your program. Additional risk control services are available by contacting
your AIGC representative.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 6 — attachments
LETTER OF CREDIT SAMPLE WORDING
BANK NAME
Page 1 of 2
FOR INTERNAL IDENTIFICATION
PURPOSES ONLY
OUR NO.:                                  OTHER                     
APPLICANT:                                                              
ISSUE DATE:                                                             
IRREVOCABLE LETTER OF CREDIT NO.                     
TO:
National Union Fire Insurance Co. of Pittsburgh, PA, and
American Home Assurance Company, and
American International Specialty Lines Insurance Company, and
The Insurance Company of the State of Pennsylvania, and
Commerce and Industry Insurance Company, and
AIU Insurance Company, and
Birmingham Fire Insurance Company of Pennsylvania, and
Illinois National Insurance Company, and
American International South Insurance Company, and
National Union Fire Insurance Company of Louisiana, and
American International Pacific Insurance Company, and
Granite State Insurance Company, and
New Hampshire Insurance Company, and
Lexington Insurance Company, and
Landmark Insurance Company, and
Starr Excess Liability Insurance Company Limited,
P.O. Box 923
Wall Street Station
New York, N.Y. 10268
Attn: Mr. Donato DiLuzio
We hereby establish this Irrevocable Letter of Credit in Favor of the aforesaid
addressees (each, the “Beneficiary”) for drawings up to United States Dollars
(Amount in Words) effective immediately. This Letter of Credit is issued,
presentable and payable at our office at (Issuing Bank’s Address) and expires
with our close of business on (Date). The term “Beneficiary” includes any
successor by operation of law of each Named Beneficiary, including, without
limitation, any Liquidator, Rehabilitator, Receiver or Conservator.
We here undertake to promptly honor your sight draft(s) drawn on us, indicating
our Credit No.
(                    ), for all or part of this credit if presented at our
office specified in paragraph one on or before the expiry date or any
automatically extended expiry date. Any one Beneficiary or combination of
Beneficiaries, acting individually or collectively, may draw on this Letter of
Credit in full or in part, and any action taken by any or all Beneficiaries
hereunder shall bind each of them.

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Expect as expressly states herein, this undertaking is not subject to any
agreement, condition or qualification. The obligation of (Issuing Bank) under
this Letter of Credit is the individual obligation of (Issuing Bank), and is in
no way contingent upon reimbursement with respect thereto.
It is a condition of this Letter of Credit that it shall be deemed automatically
extended without amendment for one year from the expiry date hereof, or any
future expiration date, unless at least thirty days prior to any expiration date
we notify you by registered mail that we elect not to consider this Letter of
Credit renewed for any such additional period.
This Letter of Credit is subject to the and governed by the laws of the State of
New York, and the 1993 Revision of the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce (Publication 500)
and, in the event of any conflict, the laws of the State of New York will
control. If this credit expires during an interruption of business as described
in Article 17 of said Publication 500, the Bank hereby specifically agrees to
effect payment if this credit is drawn against within Thirty (30) days after the
resumption of business.
Very truly yours,
(ISSUING BANK)

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 6 - attachments

     
«Date»
   
 
   
«Policyholder»
  SAMPLE
«StreetAddress»
   
«City», «State» «Zip»
   

RE:   «Insured Name»
«Account Number»
«Policy Number(s) and Effective/Expiration Date»

POLICYHOLDER DISCLOSURE STATEMENT UNDER
 
TERRORISM RISK INSURANCE ACT OF 2002
AND
TERRORISM RISK INSURANCE EXTENSION ACT OF 2005
You are hereby notified that under the federal Terrorism Risk Insurance Act of
2002 (the “Act”) effective November 26, 2002, and its amendment, the Terrorism
Risk Insurance Extension Act of 2005 (jointly referred to as the “Act”), you now
have a right to purchase insurance coverage for General Liability losses arising
out of an Act of Terrorism, which is defined in the Act as an act certified by
the Secretary of the Treasury (i) to be an act of terrorism, (ii) to be a
violent act or an act that is dangerous to (A) human life; (B) property or
(C) infrastructure, (iii) to have resulted in damage within the United States,
or outside of the United States in case of an air carrier or vessel or the
premises of a U.S. mission and (iv) to have been committed by an individual or
individuals acting on behalf of any foreign person or foreign interest, as part
of an effort to coerce the civilian population of the United States or to
influence the policy or affect the conduct of the United States Government by
coercion. You should read the Act for a complete description of its coverage.
The Secretary’s decision to certify or not to certify an event as an Act of
Terrorism and thus covered by this law is final and not subject to review. There
is a $100 billion dollar annual cap on all losses resulting from Acts of
Terrorism above which no coverage will be provided under this policy and under
the Act unless Congress makes some other determination.
For your information, coverage provided by this policy(ies) for losses caused by
an Act of Terrorism may be partially reimbursed by the United States under a
formula established by the Act. Under this formula the United States pays 90% of
terrorism losses covered by this law exceeding a statutorily established
deductible that must be met by the insurer, and which deductible is based on a
percentage of the insurer’s direct earned premiums for the year preceding the
Act of Terrorism.
Please indicate your selection below.
o Coverage for acts of Terrorism under your General Liability policy(ies) may be
purchased for an annual premium amount of $«underwriter enters premium». I
hereby reject coverage and accept the Terrorism Exclusion on my policy(ies) in
accordance with the Act. Please contact your broker with any questions.

     
 
   
 
Signature of Insured
   
 
   
 
Print Name/Title
   
 
   
 
Date
   
 
   
«Underwriter/Account Manager»
   

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.

cc:   Broker

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
SECTION 8 — Glossary
Aggregate Stop Amount
The maximum amount of benefits, damages and, if stipulated, Allocated Loss
Adjustment Expense payable by you for losses under policies that are subject to
your retention/deductible/loss reimbursement, and (if applicable) self-insured
retention insurance plan.
Aggregate Stop Limit
If shown in conjunction with the Aggregate Stop Amount, the Aggregate Stop Limit
is the maximum amount of benefits, damages and, if stipulated, Allocated Loss
Adjustment Expense that we will not require you to reimburse to us under your
retention/deductible/loss reimbursement, and (if applicable) self-insured
retention insurance plan.
ALAE (Allocated Loss Adjustment Expense)
Loss adjustment expenses that are assignable or allocated to specific claims.
“Allocated Loss Expenses” or “ALAE” will include, but are not limited to, all
fees for service of process and court costs and court expenses; pre- and
post-judgment interest; attorney’s fees; cost of undercover operative and
detective services; costs of employing experts; costs for legal transcripts,
copies of any public records and costs of depositions and court-reported or
recorded statements; costs and expenses of subrogation; and any similar fee,
cost or expense reasonably chargeable to the investigation, negotiation,
settlement or defense of a loss or a claim or suit against you, or to the
protection and perfection of either your or our subrogation rights.
ALAE will not include loss adjustment expenses explicitly included in the
premium calculation formula or otherwise explicitly included in the rating
values, nor the salary, employee benefits, or overhead of any of our employees,
nor the fees of any attorney who is our employee or under our permanent
retainer; nor the fees of any attorney we retain to provide counsel to us about
our obligations, if any, under any policy issued by us or our affiliated
companies, with respect to a claim or suit against you.
ALIR System
Automobile Liability Insurance Reporting software system used for the reporting
of required vehicle data to the various state DMV offices.
Automatic Withdrawal
An insured funded account established to facilitate the carrier’s payment of the
insured’s losses and ALAE within the insureds deductible layer. The Insured
authorizes the insurer to make withdrawals as necessary and upon the insurer’s
demand from the account. The insured is obligated to fund the account to cover
expected losses and ALAE within the Insured’s retained/deductible layer. The
Insured is responsible to replenish the account as necessary.
Basis of Adjustment
Exposure (such as payroll) and factor (such as a rate) used to determine a
specific number or amount.
Claims Payment Deposit
The amount deposited into the Claims Payment Fund.
Claims Payment Fund

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
“Claims Payment Fund” is a non-interest bearing escrow fund established in the
amount of two and one half (2 1/2) months’ estimated Reimbursable Loss Plus
Allocated Loss Expenses. The Claims Payment Fund is deposited with the Claims
Administrator for the payment of claims. The Claims Payment Fund is an estimated
amount, and it will be adjusted depending upon the actual claims paid. The prior
four months’ paid losses will be reviewed by the Company to determine a two and
one-half (2 1/2) month average.
Claims Service Charges
Fees associated with the Third Party Administrator’s handling of claims
adjustment for a given account.
Deductible
The amount of any damages or benefits arising out of any single accident,
occurrence, claim or suit, paid or payable by you and which is not included in
the computation of the Subject Premium.
Deferred Expense Provision
Is an estimated amount of expenses that you must pay as shown in the Schedule of
Policies and Premiums to the Payment Agreement.
Deferred Loss Provision
Is the estimated amount you must pay us as regular (usually billed monthly) loss
payments and sizable loss payments as described in the Schedule of Policies and
Premiums to the Payment Agreement.
DMV
Department of Motor Vehicles.
Estimated Deferred Amounts
Estimate of the Deferred Loss Provision and Deferred Expense Provision shown in
the Schedule of Policies and Premiums to the Payment Agreement.
Estimated Cost
All costs and amounts set out in the binder are considered estimated amounts
subject to change prior to program binding and in the case of adjustable
programs post program inception. Tax amounts quoted through out the binder are
estimated and subject to change based on revised tax rates and additional
assessments that come due during the policy period
Experience Modifications
A factor to adjust the premium in anticipation of loss experience that is
expected to vary from the provision for losses in the rates. It is based upon
the past variance of experience from expected experience.
FEIN numbers
Federal Employer Identification number.
Guaranteed Cost Policies
Policies of insurance under which premium is charged on a prospective basis
without adjustment for loss experience during the policy period.
Incurred Loss Conversion

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Amendment of a program from one in which you are reimbursing us for loss and
expense actually paid out, to a program in which you are paying loss and expense
actually paid out, but also for reserve amounts established on pending claim
activity.
Insured States
States that are covered by insurance
Loss Conversion Factor
Are factors used in the retention rating formula that provide a charge to cover
the cost of the insurer’s claims service fee.
Loss Development Factors
Loss Development Factors shall mean those factors promulgated by the Company
from time to time which are applied to Incurred Loss(es) to project Outstanding
Loss Reserves and Allocated Loss Expense Reserves to ultimate and contain a
reserve for IBNR.
Loss Reimbursement Limit
The portion of any loss and ALAE we pay that you must reimburse us for under any
“Loss Reimbursement” provisions of a Policy.
LRRP endorsement
LRRP (Large Risk Rating Plan) is RMG’s version of the NCCI/ISO Large Risk
Alternative Rating Option. The LRRP endorsement moves the adjustment process
from the individual policies to the overall program adjustment and moves
expenses among different lines of insurance.
Maximum Cost
The maximum amount that you must pay for the Subject Premium, and if applicable,
non-subject premium, Self-Insured losses and ALAE.
Maximum Insurance Cost
Subject, non-subject and deductible reimbursements and surcharges and special
taxes.
Maximum Premium
Largest amount that the subject premium can attain.
Minimum Cost
The minimum amount that you must pay for the Subject Premium, and if applicable,
non-subject premium, Self-Insured losses and ALAE.
Monopolistic States
Those states where employers must obtain workers compensation insurance from
compulsory state funds or qualify as a self-insurer. North Dakota, Ohio,
Washington, West Virginia and Wyoming (for certain codes only) are monopolistic
states.
Non-Ratable

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
A type of charge, especially in workers compensation rating, that is based on a
catastrophic type exposure and is thus excluded from ordinary rate-making and is
also not subject to experience rating and retrospective rating.
Non-Subject Premium
All other premium under a policy that is not subject to adjustment on the basis
of loss adjustment.
Plan Adjustment
Recalculation of the estimated premium from policy inception based on audited
exposures and factors shown in the binder, plus losses and expenses, where
applicable.
Paid Loss adjustments
Recalculation of the estimated premium based on audited exposures and factors
shown in the binder, plus the difference between losses and expenses you have
paid to date and the losses and expenses paid by us as of the loss and expense
evaluation date used in the Paid Loss Adjustment.
Paid Losses
Losses paid under the insurance program as they become due.
Premium Deferral Plan
Plan under which the Insured and insurer agree to defer the insurance program
premium over the course of the policy period. The Plan is set out in the
schedule to the payment agreement and the insured is obligated to provide
collateral to secure for the deferred payment plan.
Premium Discount
A discount granted to reflect expense savings relative to the size of the
standard premium.
Retention
The amount of any damages or benefits arising out of any single accident,
occurrence, claim or suit, paid or payable by you and which is included in the
computation of the Subject Premium.
Self-Insured Retention
A specific amount the Insured retains as its obligation for a covered loss. It
is the Insured providing primary insurance over which the carrier provides
excess coverage. Unlike a Deductible, the Insurer is not obligated to pay the
Insured’s SIR and then seek reimbursement form the Insured. The insured is
directly responsible to the claimant for the amount of the SIR.
Self Insured States
Those states in which you, the insured, are providing the primary layer of
insurance.
Sizable Loss Payments
A set amount shown in the Payment Agreement schedule for which the Insured will
be obligated to reimburse us following our payment of any Loss and ALAE within
the Insured’s retention.

 

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CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.
Stacking
Refers to a condition allowed in some states that permits you to add the policy
limits of other vehicles covered by you, either on the same policy
(interpolicy) or from other policies (intrapolicy), and recover the sum of these
limits.
Standard Premium
Premium based upon the exposure rates and increase limit factors, but without
application of premium discount or deductible discounts.
Stop Gap Liability
Provides Employers Liability coverage for those states where employers must
obtain statutory workers compensation insurance from a compulsory state fund.
Subject Premium
“Subject Premium” is the portion of the Gross Program Premium subject to
adjustments in accordance with the adjustment formula shown in this Binder. At
the commencement of the program, it is the amount stated on the Pricing Page.
Texas Premium Discount
Premium discounts on automobile policies with premiums in excess of $5,000.
These discounts are set when the policy is issued and cannot be changed until an
audit of the policy is completed.
UAIN
Unemployment Account Identification Number
Ultimate Incurred Loss Plan
Loss Sensitive program in which you are paying, in advance of actual loss dollar
payment, for the ultimate cost of expected losses and expenses that will occur
during the policy period.
Ultimate Losses
Paid losses and expense dollars, and reserve loss and expense dollars developed
using Loss Development Factor(s) to establish the maximum expected total loss
and expense amount.
UM/UIM/PIP
Uninsured Motorist Coverage, Underinsured Motorist Coverage and Personal Injury
Protection. All three are specific coverage available under a Business Auto,
Truckers’ or Garage Liability Policy. UM and UIM coverage provides an insured
with bodily injury (and in some states, property damage) coverage from its own
carrier as if collecting from the tortfessor’s carrier. PIP is a statutorily
provided coverage that has insurers provide first party benefits for medical
expenses, loss of income, funeral expenses and such without regard to fault.
Valuation Date
The cut off date for adjustments made to paid claims and reserve estimates in a
loss report.