EX-10.41 FINANAL PROPOSAL, AIG RISK MANAGEMENT INC



 





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.










WE KNOW RISK




	 	 	 
	PREPARED BY:

	 	JOYCE TAYLOR
	DATED:

	 	12/21/2006
	PROPOSED EFFECTIVE DATE:

	 	01/01/2007
	VALID UNTIL:

	 	01/01/2007






 









 





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	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 




 









 





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 #
	 	 






3









 





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.




4









 





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









 





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.




6









 










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.




7









 










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.






8









 





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)




9









 






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.




10









 






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.




11









 






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:




12









 






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:




13









 






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









 





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









 





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









 





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









 





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









 





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









 





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









 





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









 








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









 





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









 





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









 








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








 





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 







26









 




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,







27









 





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)






28









 





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


29









 





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.






30









 





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.


31









 





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.




32









 










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



33









 





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.




34









 










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.





35









 








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.





36









 








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”.




37









 











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.





39









 






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




40









 








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









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









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:



PATROLTM (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)





48









 








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»
	 	 






 









 






CONFIDENTIAL TREATMENT REQUESTED BY GEVITY HR, INC.





			
	cc:	 	Broker






 









 






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




 









 








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




 









 








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




 









 







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.




 









 







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.