UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549
(Mark One)
[  X  ]                                              FORM 10-K
                                   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                                     For the fiscal year ended March 31, 1999
                                                            OR
[    ]                  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                               for the transition period from _______ to _______

                                            Commission File No. 0-13084

                                              WARRANTECH CORPORATION
  ______________________________________________________________________________
                          (Exact name of registrant as specified in its charter)
 _____Delaware____                                             ___13-3178732____
(State or other jurisdiction of                                    (IRS Employer
incorporation or organization                                Identification No.)

       300 Atlantic Street, Stamford, Connecticut                    ___06901___
       (Address of Principal Executive Offices)                       (Zip Code)

Registrant's telephone number, including area code  (203) 975-1100
Securities registered pursuant to Section 12(b) of  the Act:

Title of Each Class                    Name of each Exchange on which registered
Common Stock $.007 par value                             NASDAQ National Market

               Securities registered pursuant to Section 12(g) of the Act:
                                           Common Stock, $.007 par value
________________________________________________________________________________
                                              (Title of Class)

     Indicate by checkmark  whether the  Registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                            Yes __X__                  No_______

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this form 10-K or any amendment to this
form 10-K [ ].

                    _______________________________

     The  number of  shares  outstanding  of the  Registrant's  common  stock is
15,222,861 as of August 2, 1999.

     The aggregate  market value of the voting stock held by  non-affiliates  of
the Registrant is $14,459,639 as of August 2, 1999.

DOCUMENTS  INCORPORATED  BY REFERENCE

None.

Index to Exhibits is on page 29
Document contains 61 pages

                                                           1

<PAGE>

                                                          PART I

     Warrantech Corporation  ("Warrantech" or the "Company") maintains executive
offices  at  300  Atlantic  Street,   Stamford,   Connecticut  06901,  operating
facilities  at 150  Westpark Way and 1441 West Airport  Freeway,  Euless,  Texas
76040, as well as other Texas  locations.  The telephone number of the executive
offices is (203) 975-1100.

Item 1.           Business

     Warrantech Corporation, through its wholly owned subsidiaries,  markets and
administers  service contracts and extended  warranties.  The Company is a third
party  administrator for a variety of dealer/clients in selected  industries and
offers  call  center  and  technical  computer  services.  The  Company  assists
dealer/clients  in obtaining  insurance  policies from highly rated  independent
insurance  companies  for all  contracts  and programs  offered.  The  insurance
company is then  responsible  for the cost of repairs  or  replacements  for the
contracts administered by Warrantech.

     The  Company  operates  under three major  business  segments:  Automotive,
Consumer  Products  and  International.   The  Automotive  segment  markets  and
administers  extended  warranties on  automobiles,  light  trucks,  recreational
vehicles and  automotive  components.  These  products are sold  principally  by
franchised  and  independent  automobile  dealers,  leasing  companies,   repair
facilities,  retail stores and  financial  institutions.  The Consumer  Products
segment markets and  administers  extended  warranties on household  appliances,
electronics  and  homes.  These  products  include  home  appliances,   consumer
electronics,  televisions,  computers,  home office  equipment and homes.  These
products are sold principally by retailers, distributors, manufacturers, utility
companies  and  financial  institutions.  Warrantech  also direct  markets these
products  to  the  ultimate  consumer  through  telemarketing  and  direct  mail
campaigns.  The International segment markets and administers outside the United
States  predominately  the same  products  and  services  of the other  business
segments.  The  International  segment  is  currently  operating  in the  United
Kingdom, Central and South America, Puerto Rico and the Caribbean.

     The  predominant  terms of the service  contracts  and extended  warranties
range from twelve (12) to eighty-four  (84) months.  The Company acts as a third
party administrator on behalf of the dealer/clients and insurance companies. The
actual repairs and replacements  required under the service contract  agreements
are performed by independent third party authorized repair facilities. While the
dealer/retailer,  and, in some instances, a Company subsidiary,  are the sellers
of the service  contract,  the cost of these  repairs is borne by the  insurance
companies which have the ultimate  responsibility  for the claims. The insurance
policy  indemnifies  the  dealer/clients  and the Company's  subsidiary  against
losses  resulting  from  service  contract  claims and  protects the consumer by
ensuring their claims will be paid.

     The Company's  service contract  programs  benefit  consumers with expanded
and/or  extensions  of product  coverage for a specified  period of time (and/or
mileage in the case of automobiles and recreational  vehicles),  similar to that
provided by  manufacturers  under the terms of their  product  warranties.  Such
coverage generally  provides for the repair or replacement of the product,  or a
component thereof,  in the event of its failure.  The Company's service contract
programs benefit the dealer/clients by providing enhanced value to the goods and
services they offer. It also provides the opportunity for increased  revenue and
income while outsourcing the costs and responsibilities of operating an extended
warranty program.

                                   2

<PAGE>

Warrantech Automotive Segment

     The Company's  Automotive  segment markets and administers  vehicle service
contract ("VSC") programs,  credit life and other related automotive  after-sale
products,  all of which enhance the  profitability  of the sale of  automobiles,
light trucks,  recreational vehicles and automotive  components.  These products
are sold principally by franchised and independent  automobile dealers,  leasing
companies, repair facilities, retail stores, and financial institutions.

     Additionally,  Warrantech  Automotive  has  expanded  its  efforts  in  the
automotive field to provide administrative expertise and secure the placement of
insurance  coverage to other parties  requiring such services on either VSC's or
similar products.

     The VSC is a  contract  between  the  dealer/lessor  (and  in  some  states
Warrantech  Automotive)  and the vehicle  purchaser/lessee  that offers coverage
which runs from twelve (12) to  eighty-four  (84) months and/or 1,000 to 100,000
miles.  Coverage  is  afforded  in the event of the  failure of a broad range of
mechanical  components  that  occurs  during the term of the VSC,  exclusive  of
failures covered by a manufacturers warranty.

     The programs  marketed and  administered by Warrantech  Automotive  require
that the dealer enter into an agreement  whereby  Warrantech  Automotive  is the
provider of services to the dealer.  Among these services is the development and
distribution of marketing  materials,  processing of dealer produced VSC's,  and
the  administration  and payment of claims filed by contract  holders  under the
terms of their VSC.

     Warrantech  Automotive  utilizes the services of independent agents to call
on dealers to solicit  their use of the VSC programs.  At this time,  Warrantech
Automotive is represented by more than 90 agents in 46 states as well as Canada.

     With respect to the VSC programs which  Warrantech  Automotive  markets and
administers,  liability is borne by insurers who have issued insurance  policies
to assume this risk in exchange  for the  payment of agreed  upon  premiums  and
fees. The Company  recently  reached an agreement with Reliance  Insurance Group
(Reliance) pursuant to which Reliance will insure effective January 1, 1999, all
of the  Warrantech  Automotive  VSC  programs.  Effective  from  March 1,  1993,
insurance  for the  Warrantech  Automotive  VSC programs was provided by the New
Hampshire Insurance Company and other American International Group, Inc. ("AIG")
member companies.

     Essential  to the  success  of  Warrantech  Automotive  is its  ability  to
capture,  maintain,  track and analyze  all  relevant  data  regarding a VSC. To
support this  function,  the Company  operates  proprietary  software  developed
internally   that  consists  of  custom  designed   relational   databases  with
interactive  capabilities.   This  configuration  provides  ample  capacity  and
processing  speed for  current  requirements  as well as the  ability to support
significant future growth in this area.


Warrantech Consumer Products Segment

     The Company's  Consumer Product segment  develops,  markets and administers
consumer product extended  warranties on household  appliances,  electronics and
homes and offers call center and technical  computer  services.  These  products
include home appliances,  consumer  electronics,  televisions,  computers,  home
office  equipment  and  homes.  These  products  are  sold  principally  through
retailers,   distributors,   manufacturers,   utility  companies  and  financial
institutions.  Warrantech  also direct  markets  these  products to the ultimate
consumer through telemarketing and direct mail campaigns.

     The  Warrantech  Consumer  Product  segment has developed a niche market by
specializing  in the personal  computer  industry.  This segment has expanded to
include some of the premier  retailers and distributors of computer and computer
related   products.   The  call   center  is  staffed  by   technical   services
representatives with extensive training in computers and peripherals.


                                   3

<PAGE>

     The Consumer Products segment has one significant customer,  CompUSA, which
accounted for approximately 48% of revenue of this business segment. The Company
has notified CompUSA of premium increases imposed by CIGNA Insurance Company. On
June  24,  1999,  CompUSA  publicly  announced  as  part  of a  major  corporate
restructuring   their   intentions  to  leverage   their  internal  call  center
capabilities by taking over customer contact regarding  extended warranty repair
calls. On June 28, 1999,  Warrantech received formal notification of termination
from CompUSA effective July 28, 1999.

     The  Warrantech  Consumer  Product  segment  also  develops,   markets  and
administers  service contract programs in the United States covering  mechanical
breakdowns  of the working  systems and  components  in homes.  The core program
protects homeowners against the cost of repairs in case of a breakdown of one or
more of the major home systems including heating and air conditioning, plumbing,
electrical, and built-in appliances. The Warrantech Home Service warranty is one
of the  first of its  kind.  It  offers  greater  protection  than what has been
available until now and it provides this security at a lower cost.

     The programs  marketed and  administered  by Warrantech  Consumer  Products
require  that the selling  dealer,  distributor  or  manufacturer  enter into an
agreement with Warrantech  that outlines the duties of each party.  Those duties
specifically assumed by Warrantech Consumer Products include the development and
distribution of marketing materials, sales and motivational training, processing
of service contracts,  operating a call center and the adjustment and payment of
claims.  Warrantech  has  also  entered  into  service  center  agreements  with
independent third party authorized repair  facilities  located  throughout North
America.

     In exchange for agreed upon  premiums and fees,  the  liability  for claims
incurred by service  contracts  issued by a dealer,  distributor or manufacturer
have been assumed by CIGNA Insurance  Company  (CIGNA).  At the present time, in
addition to CIGNA,  certain programs offered by Warrantech Consumer Products are
being  insured  by  Tokio  Marine  & Fire  Insurance  Company,  Zurich  American
Insurance and certain AIG member companies.

     It is essential to the success of Warrantech  Consumer  Products that it be
able to  capture,  maintain,  and  analyze all  relevant  information  about its
service contracts. To support this function, Warrantech has internally developed
application  programs  that allow the  tracking  of a database  for  millions of
service  contracts.  This  also  allows  for  the  development  of  current  and
historical  statistical  data,  which is used to monitor its  service,  contract
program's performance,  and will also support significant growth of Warrantech's
Consumer Product business.


Warrantech International Segment

     In July 1995, Warrantech International,  Inc. (WII) acquired Home Guarantee
Corporation plc (subsequently renamed Warrantech Europe Plc.), a British company
which markets home warranty  products in the United Kingdom covering  mechanical
breakdowns  of the working  systems and  components  in homes  (e.g.,  furnaces,
electrical  and plumbing  systems,  and major  appliances).  In addition to home
warranty products, Warrantech Europe's business has expanded to include extended
warranties  on  a  wide  range  of  products  including  automobiles,   business
equipment, office and home computers, mobile telephones, and major appliances as
well as credit card enhancement programs similar to those marketed in the United
States. This subsidiary also provides database management,  marketing, training,
brokerage  services,  and customer  care service for clients in the  automotive,
financial,  manufacturing,  retail and service sectors, including other segments
of the Company.

                                   4

<PAGE>

     WII  also  conducts  its  efforts  on a  direct  basis  and  has  developed
relationships  with retailers and distributors  throughout Puerto Rico,  Central
and South America.  The Company is currently doing business in Mexico, Chile and
Guatemala.

Sales and Marketing

     The sales and  marketing  activities  of  Warrantech  are  managed  by each
segment's  own sales and  marketing  personnel.  In certain  circumstances,  the
business  segments  have  entered into  marketing  agreements  with  independent
organizations  that  solicit  dealers  at  their  own  expense,  and  receive  a
commission on all service contracts sold by such dealers.

     The  Warrantech  business  segments  foster  awareness of their  respective
programs through cooperative  advertising programs,  which may be jointly funded
by Warrantech and the client/dealer or independent agent.

     Sales training and motivational  programs are a primary form of specialized
assistance  provided  by the  Company  to  retailers/dealers,  distributors  and
manufacturers,  to assist them in increasing the effectiveness and profitability
of their service contract program sales efforts.  The Company develops materials
and conducts  educational  seminars.  These seminars are conducted either at the
client's   place  of  business,   an  offsite   facility  or  at  the  Company's
state-of-the-art  training facility at its Euless, Texas administrative offices.
This facility  features the latest in audio/video  technology  that enhances the
training and learning experience.

     Warrantech   also  direct   markets  to  the  ultimate   consumer   through
telemarketing and direct mail campaigns. The direct marketing campaigns generate
sales  through  renewals  of  expiring  contracts  and  second-effort  sales  to
customers who did not buy at the time of purchase.

Significant Customers

     The Company has one  significant  customer,  CompUSA,  which  accounted for
approximately 24%, 24% and 23%, respectively, of consolidated gross revenues for
the years ended March 31, 1999, 1998 and 1997. The Company has notified  CompUSA
of premium  increases  imposed by CIGNA  Insurance  Company.  On June 24,  1999,
CompUSA  publicly  announced as part of a major  corporate  restructuring  their
intentions to leverage  their internal call center  capabilities  by taking over
customer  contact  regarding  extended  warranty repair calls. On June 28, 1999,
Warrantech  received formal  notification of termination from CompUSA  effective
July 28,  1999.  The loss of CompUSA  will have a  significant  impact on future
revenues.  However,  the Company believes that this customer has not contributed
significantly  to net income and  therefore  will not be material  to  operating
results.

Competition

     Warrantech competes with a number of independent administrators,  divisions
of  distributors  and  manufacturers,   financial   institutions  and  insurance
companies.  While the Company  believes  that it occupies a preeminent  position
among  competitors  in its  field,  it  may  not be  the  largest  marketer  and
administrator of service contracts and limited warranties,  and some competitors
may have greater operating  experience,  more employees and/or greater financial
resources.  Further,  many  manufacturers,  particularly  those  producing motor
vehicles,  market and  administer  their own service  contract  programs for and
through their dealers.


Insurance Coverage

     Liability for performance  under the terms of service contracts and limited
warranties issued by clients/dealers, retailers, distributors, utility companies
or  manufacturers  is  assumed by the  insurer in return for the  payment of the
agreed-upon  premium  for the  assumption  of the risk  from the  insured.  This
coverage provides  indemnification  against loss resulting from service contract
claims and protects the consumer by ensuring that their claim will be paid.

                              5

<PAGE>

     The insurance protection is provided by highly rated independent  insurance
companies.  This includes  Reliance  Insurance Group and CIGNA Insurance Company
which are rated A - (Excellent) by A.M. Best Company. Other programs are insured
by New Hampshire  Insurance  Company,  and other AIG member  companies and Tokio
Marine & Fire Insurance Company. These companies are all rated A++ (Superior) by
the A.M. Best Company.  Zurich  American  Insurance  Company is an A+ (Superior)
rated carrier by A.M.  Best  Company.  Warrantech is currently in the process of
exploring  strategic  relations  with other  highly  rated  insurance  companies
regarding the Consumer Products Services business segment.

     In accordance with the insurance  arrangements with these insurers, a fixed
amount is remitted  for each  service  contract or limited  warranty  sold.  The
amount is based upon  actuarial  analysis of data  collected and  maintained for
each type of  coverage  and  contract  term.  The insured or the Company are not
obligated to the insurer if claims exceed the premium remitted.

     Additionally,  agreements  between the Company and the insurers may contain
profit-sharing features that permit the Company to share in underwriting profits
earned by the service contract programs. The amounts to be received, if any, are
determined in accordance with certain specified  formulas by the type of program
and by policy year. Certain of these agreements require interim calculations and
distributions  for  various  programs,  with  final  calculations  being made as
contracts  expire by term.  The  Company  did not accrue or  receive  any profit
sharing amounts during the 1999, 1998 or 1997 fiscal years.

Federal and State Regulation

     The service  contract  programs  developed  and  marketed by the  Company's
subsidiaries and their related  operations with regard to service  contracts and
limited  warranties,  are  regulated  by  federal  law  and  the  statutes  of a
significant number of states. The Company  continually  reviews all existing and
proposed  statutes and  regulations  to  ascertain  their  applicability  to its
existing operations, as well as new programs that are developed by the Company.

     Generally  speaking,  these statutes  concern the scope of service contract
coverage and content of the service  contract or limited warranty  document.  In
such instances, the state statute will require that specific wording be included
in the service  contract or limited  warranty  expressly  stating the consumer's
rights in the event of a claim,  how the service  contract  may be canceled  and
identification   of  the  insurance   company  that   indemnifies  the  dealers,
distributors or  manufacturers  against loss for performance  under the terms of
the service contract.

     Insurance  departments in some states have sought to interpret the consumer
product service contract,  or certain items covered under the contract as a form
of  insurance,  requiring  that the  issuer  be a duly  licensed  and  chartered
insurance company. The Company and its subsidiaries do not believe that they are
insurers and have no intention of filing the  documents  and meeting the capital
and surplus requirements that are necessary to obtain such a license.

     There are instances where the  applicability of statutes and regulations to
programs  marketed and  administered  by the Company and  compliance  therewith,
involve  issues of  interpretation.  The Company uses its best efforts to comply
with  applicable  statutes  and  regulations  but  it  cannot  assure  that  its
interpretations,  if challenged,  would be upheld by a court or regulatory body.
In any  situation  in which the  Company has been  specifically  notified by any
regulatory bodies that its methods of doing business were not in compliance with
state regulation, the Company has taken the steps necessary to comply.

                              6

<PAGE>

     If the Company's right to operate in any state is challenged  successfully,
the Company may be required to cease operations in the state and the state might
also impose financial sanctions against the Company. These actions,  should they
occur, could have materially adverse consequences and could affect the Company's
ability to continue operating.  However, within the framework of currently known
statutes, the Company does not feel that this is a present concern.

Trademarks

     The Company holds numerous  registered United States  trademarks,  the most
important of which are the "Warrantech" and its stylized "W" logo service marks.
The  registration  for all service marks are kept current by the Company and its
trademark counsel.  Additional service marks are registered  covering subsidiary
names and product names and descriptions.

Employees

     The  Company  and  its  subsidiaries  currently  employ  approximately  750
individuals, an increase of approximately 50 over the preceding fiscal year. The
increase is partly  attributable to the conversion of temporary  employees as of
March 31, 1999 versus the prior year and to the  expansion  of customer  service
and  claims  representatives  to  meet  the  needs  of the  Company's  expanding
business. None of the Company's employees are covered by a collective bargaining
agreement. The Company considers its relations with its employees to be good.


Item 2.           Properties

     The  Company's  executive  offices  are  located in leased  premises at 300
Atlantic Street, Stamford,  Connecticut. The premises, which are leased pursuant
to a lease agreement (the "Lease"), consists of approximately 14,317 square feet
for space A and 6,683  square  feet for space B. The  Lease,  which was  renewed
effective on April 1, 1998 and expires on March 31, 2005,  provide for remaining
annual base rent payments ranging from $207,173 to $472,461 respectively.

     The  operating  facilities  are located in leased  premises at 150 Westpark
Way,  Euless,  Texas. The premises,  consisting of  approximately  25,505 square
feet,  are leased  pursuant to a lease  agreement  (the "Texas Lease") which was
favorably renegotiated effective on March 1, 1993 and amended effective on March
1, 1996 to add an additional 1,448 square feet to the original 24,057. The Texas
Lease  expires on July 31,  2003 and  provides  for  remaining  annual base rent
payments ranging from $323,063 to $352,819.

     Effective  April 15, 1996, the Company  leased an additional  36,814 square
feet at 1441 West Airport  Freeway,  Euless,  Texas to accommodate the expanding
operations of the Company.  These premises are being leased  pursuant to a lease
agreement  that expires March 31, 2004.  The lease provides for annual base rent
payments ranging from $404,954 to $441,768 during the term of the lease.

     Additional  facilities  that  support the direct  marketing  operation  are
located at 2701/2705  Brown Trail,  Bedford,  Texas (4,915 square  feet).  These
premises  are leased  under the terms of leases (the "Other  Leases")  that were
effective on December 1, 1994,  March 1, 1996 and December 1, 1997  respectively
expiring March 31, 2004,  February 28, 2001 and November 30, 1998  respectively.
The Other Leases provide for annual base rent payments  ranging from $255,651 to
$177,162.  The lease which expired  November 30,1998 is currently being utilized
on a month to month basis.

     The operating  facilities of Warrantech  Europe,  plc are located in leased
premises at 248A Marylebone Road, London.  These premises are leased pursuant to
a lease agreement which expires June 23, 2010 and provides for remaining  annual
base rent payments ranging from lb.94,050 to lb.108,450.

                                   7

<PAGE>

     Warrantech  International's  Puerto Rico  operations  are located in leased
premises at 1225 Ponce de Leon Avenue, Santurce, Puerto Rico pursuant to a lease
agreement which expires March 31, 2003. The remaining  annual base rent payments
range from $52,353 to $54,928.

    Item 3.       Legal Proceedings

        The Oak Agency, Inc. and The Oak Financial Services, Inc. (collectively,
        "Oak") v. Warrantech Dealer Based Services, Inc. ("WDBS").

        Final judgment in this matter was entered on November 12, 1997. WDBS was
        directed to pay Oak (i) $1,243,359 which represents  commissions  earned
        by Oak for the period July 1, 1991  through May 31,  1997,  (ii) $28,500
        which  represents  costs of the  action  recoverable  by Oak,  and (iii)
        future  commissions earned on vehicle service contracts sold on or after
        June 1, 1997 by a specified  group of automobile  dealers.  Furthermore,
        Oak was directed to pay Warrantech  Corporation  $7,500 which represents
        Warrantech's recoverable costs of a separate action which previously had
        been dismissed by the Court with prejudice.

        WDBS has made all  payments  described in clauses (i) and (ii) above and
        continues to make those periodic payments  described in clause (iii). No
        further  legal  action is  anticipated  and WDBS  considers  this matter
        closed.

        Proteva,  Inc. v.  Warrantech  Help Desk,  Inc. v. William Lynch,  Civil
        Action No. 499CV162BE (U.S. District Court, Northern District of Texas).
        This matter arose out of an Agreement, effective as of December 9, 1997,
        between  Proteva,  Inc.  ("Proteva")  and  Warrantech  Help  Desk,  Inc.
        ("Warrantech")   pursuant   to   which   Warrantech   was   to   provide
        administration services for the warranties on certain personal computers
        manufactured by Proteva.  In December 1998,  Warrantech  determined that
        Proteva had failed to report a material  number of computers  subject to
        the Agreement and remit the corresponding  fees.  Therefore,  Warrantech
        notified  Proteva in January 1999 that it was terminating the Agreement.
        Proteva  sought  injunctive  relief in the  Illinois  state  courts  and
        commenced  a lawsuit  against  Warrantech  alleging  failure  to provide
        service in accordance with the requirements of the Agreement and failure
        to remit certain  payments.  Warrantech  had the  litigation  removed to
        Federal District Court in Chicago and it was subsequently transferred to
        the Northern  District of Texas.  Following  that  transfer,  Warrantech
        counterclaimed against Proteva and its Chairman, William Lynch, alleging
        fraud and breach of the Agreement arising out of the  under-reporting of
        computer sales and the failure to remit  corresponding fees. The parties
        have  reached  agreement on a Settlement  Agreement  and Mutual  Release
        which will result in a final  dismissal of this action.  Warrantech will
        receive  financial and other  considerations  as part of the  settlement
        although  specific  details are subject to a  confidentiality  agreement
        among the parties.


    Item 4.       Submission of Matters to Vote of Security Holders

        No  matters  were  submitted  to a vote of the  Company's  shareholders,
        through  the  solicitation  of proxies or  otherwise,  during the fourth
        quarter of the Company's fiscal year ended March 31, 1999.

                                        8

<PAGE>


                                                         PART II

                                                  EXPLANATORY STATEMENT

     As reported in Form 8-K dated July 30, 1999, the Company  announced on July
15, 1999 that it is  reviewing  its  accounting  policy with  respect to revenue
recognition.  For the past eight  years,  the  Company  has  recognized  revenue
immediately in direct  proportion to costs  incurred.  The review was undertaken
after  the  Company's  independent  auditor,  Ernst & Young,  raised  the  issue
concerning the Company's revenue  recognition policy shortly before the due date
for filing this Annual Report on Form 10-K for the Company's 1999 fiscal year.

     Prior to adopting its revenue  recognition  policy in 1991, the Company had
its revenue recognition policy reviewed with the Financial  Accounting Standards
Board ("FASB") and the Securities and Exchange Commission (the "SEC"). Both FASB
and the SEC concurred with the Company's  revenue  recognition  policy and, as a
result  of  their  affirmation,  for the  past  eight  years,  the  Company  has
recognized   revenue   immediately  in  direct  proportion  to  costs  incurred.
Furthermore, the Company has consistently received unqualified opinions from its
independent auditors.

     In view of the issues  raised by Ernst & Young,  the Company  will  shortly
again request the views of FASB with respect to the revenue recognition issue to
confirm  that its  current  manner of  presentation  of its  results is still in
conformity  with  generally  accepted  accounting   principles.   It  should  be
emphasized that the issue concerning the Company's  revenue  recognition  policy
does not involve any accounting irregularities;  it only involves a disagreement
with the  Company's  new auditors as to whether an  accounting  policy which the
Company  has been  following  for the past eight  years  should  continue  to be
followed.

     Because  of  the  unresolved  issues  regarding  the  Company's   financial
statements, the Company was unable to timely file this Report on Form 10-K. As a
consequence  of the Company's  inability to file this Form 10-K, the Company has
received notice from Nasdaq that the Company's  common stock is subject to being
delisted from the Nasdaq Stock Market.  The Company has informed  Nasdaq that it
is appealing  such delisting and a formal hearing with respect to such delisting
has been scheduled for August 27, 1999. Pending the outcome of this hearing, the
Company's  common  stock will  continue to trade on the Nasdaq  system under the
symbol  "WTECE".  In light of the Nasdaq action,  and the recent weakness in the
Company's  common  stock,  as well as to clarify  any  confusion  regarding  the
Company's  financial  condition and operations  and to address rumors  regarding
such financial  condition and  operations,  the Company has decided to file this
Form 10-K,  including all of the information  required under Parts I, III and IV
plus Item 5 of Part II, but  excluding the  information  required to be provided
under  Part  II  with  respect  to  the  Company's   financial   statements  and
management's  discussion  and analysis of results of  operations  and  financial
condition, which will be promptly filed by amendment following the resolution of
the issue regarding  revenue  recognition and the completion of the audit of the
Company's financial statements.

The Company's Revenue Recognition Policy

     Ernst & Young has informed the Company that it believes  that the Company's
revenue  recognition  policy  should be  changed  because  in  recent  years the
Company's subsidiaries have been classified as the obligors for a portion of the
service contracts which they administer,  and as a result, the Company should be
required  to  straight  line its  revenues  over  the  duration  of the  service
contracts,  as opposed to the current  method,  in which the Company  recognizes
revenues in direct proportion to the cost incurred.

     The Company's management believes that Ernst & Young is not correct because
100% of the risk related to the payment of claims under the service contracts is
and has been covered by an  unaffiliated  insurance  company and the Company and
its  subsidiaries  are not exposed to any risk of payment  for  claims.  All the
insurance  companies  used by the Company to cover the claims made by  consumers
under the service  contracts  are rated not less than  Excellent by A.M.  Best &
Company.

                                   9

<PAGE>

     The Company,  through its wholly owned  subsidiaries,  designs and provides
administration  for,  Extended Service  Contract (ESC) Programs,  which are sold
through retailers,  utility companies and financial  institutions in conjunction
with their sale of consumer products such as televisions, VCR's, computers, home
office  equipment,  stereo  equipment,  refrigerators  and other  electronic and
household  appliances,  and dealers in automotive  products such as automobiles,
trucks and recreational  vehicles.  In addition,  the Company offers its program
development  and  administrative  expertise  and services to  manufacturers  and
insurance companies as an administrator of warranty programs.  The International
segment provides these same services outside the United States  predominately in
the United Kingdom, Central and South America, Puerto Rico and the Caribbean.

     An ESC program  provides the retailer's  customer with an extension,  for a
specified  period  of  time  (or  mileage,  in the  case of  automotive  related
programs),  of coverage similar to that provided by the  manufacturer  under the
terms  of  their  product  warranty(s).  This  coverage  generally  provides  an
insurance  arrangement  for the  repair  or  replacement  of the  product,  or a
component thereof, in the event of a failure in workmanship or parts. Except for
a small deductible paid by the consumer, in some of the programs,  the repair or
replacement will be provided by the insurance company at no cost to the consumer
during the term of the contract.

     The extended service contract is a transaction  consummated by the retailer
with the  consumer.  Some of the  transactions  occur  with the  business  being
"Dealer Obligor",  while other transactions occur as "Administrator Obligor". In
both cases,  the  obligation  is assumed in total by the insurer.  The length of
term of the ESC  ranges  from one year to seven  years,  with an average of four
years.

     The  payments  made by the  consumer  for the  ESC and  claims  made by the
consumer under the ESC are handled in the same manner  regardless of whether the
Company or the retailer is  classified  as the obligor  under the ESC. In either
instance, the Company acts as intermediary between the customer who receives the
service  contract  and the  insurance  company  which pays the claims  under the
service  contract.  The retailer  receives  payment from the consumer and, after
deducting a  commission,  forwards the balance to the Company as trustee for the
insurance  company.  The  Company,  in  turn,  retains  a fee  for  its  Program
Development,  Marketing and Sales,  Regulatory  Compliance and Data  Acquisition
efforts required in the installation of the ESC program and deposits the balance
of the amount  received from the retailer or dealer into a trust account for the
benefit of the insurance company. The Company is designated as the Administrator
or Managing General Agent of the insurance carrier which covers claims under the
vehicle service contracts administered by the Company.  Certain of the Company's
subsidiaries  are  licensed as insurance  agents or brokers in most states.  The
monies  deposited  into the trust  account are deemed to be  premiums  under the
agent/administrator agreements between the Company and the insurance company.

     When a claim for repair is made by a consumer  under the ESC,  the consumer
calls the Company.  The Company  evaluates the claim and, if it is covered,  the
Company  refers the  consumer  to an  independent  repair  facility  to make the
repair.  The Company itself does not make the repair.  After the repair is made,
the  Company  causes a check to be drawn  from  the  insurance  carrier's  trust
account and arranges for payment to the repair facility.

     Whether the Company or the  retailer is the  seller/obligor  under the ESC,
the risk of loss is borne  100% by the  insurance  company  under a  Contractual
Liability Insurance policy in which the Company and retailer or dealer are named
insureds.  All of the ESC's marketed  under the ESC program  contain a provision
which  gives  the  consumer  the  express  right to assert a claim  against  the
insurance carrier directly for the cost of the repair. Some states have statutes
or regulations  which give the consumer this "pass through" right as a matter of
law. If the  payments  for claims  under the ESC's  exceed the premium  reserves
maintained by the insurance  company,  the insurance company incurs the loss and
no portion of such loss may be charged to the Company.

                              10

<PAGE>

Prior Review of Revenue Recognition Policy

     In 1991, the Company  sought the views of FASB and the SEC staff  regarding
the Company's  application of the revenue  recognition policy described above to
the Company's  operations and, in particular,  confirmation  that FASB Technical
Bulletin  90-1 ("TB 90-1"),  which would  require  revenue to be recognized on a
straight line basis rather than in direct proportion to costs incurred,  was not
applicable  to the  Company.  The  Company's  accountants  received  an informal
opinion from FASB that TB 90-1 is not  appropriate  if an ESC obligor  transfers
risk of loss through the purchase of insurance.  In such case,  the full cost of
insurance  would  have  to be  known  and  fixed  and all  risk of loss  must be
transferred  to the  carrier.  Based  on  such  informal  opinion,  the  Company
requested  a  determination  from  the  SEC  staff  that TB  90-1  would  not be
applicable   and  that  the  Company  was  permitted  to  continue  to  use  the
proportional method of revenue recognition. In a letter dated November 15, 1991,
the Company was informed that the staff would not object to the  conclusions  of
the Company and its independent  accountants  that TB 90-1 is not applicable and
that proportional revenue recognition is appropriate.

Anticipated Impact of any Required Change in Revenue Recognition Policy

     The Company  believes  that the  revenue  recognition  policy  which it has
followed over the past eight years  correctly  reflects the economic  reality of
its business  because it enables the Company to match  revenues  with  expenses.
Under its present  accounting  policy, the Company includes in the revenue which
it  recognizes  the premiums  which it receives  from the dealers and  retailers
because, pursuant to its agreements with the insurance companies, the Company is
required  immediately  to deposit those  premiums into the insurance  companies'
trust accounts for the payment of claims.  Under the accounting  policy proposed
by Ernst & Young,  the Company would be required to defer a substantial  portion
of the premium  revenues over the life of the service  contracts even though the
Company is not  required  to expend  any of its own assets for claims  which are
made.

     Because the Company is seeking review of its revenue recognition policy, it
has not  reported  and filed its  financial  results for the fourth  quarter and
fiscal year ended March 31, 1999. Under the revenue recognition policy which the
Company  has been  following,  the  Company  would  have  reported a net loss of
$709,000  for the fourth  fiscal  quarter of 1999 and a net loss of $1.1 million
for the fiscal year ended March 31, 1999.  These are unaudited  results and they
are subject to change in the event that it is determined, following FASB review,
that the Company is required to recognize revenue in accordance with TB 90-1. If
the Company is required to utilize TB 90-1,  assuming  that the results of prior
years are restated in conformity with such Technical Bulletin, it is likely that
shareholders'  equity would be substantially  adversely impacted.  However,  the
Company does not believe that the accounting change would have a material effect
on the  Company's  operation  or cash flow.  The  Company  is in the  process of
completing its analysis of what its financial results would be under TB 90-1 for
the  fiscal  year  ended  March 31,  1999 and prior  years.  Depending  upon the
magnitude  of the  restatement,  it is possible  that the Company  would fail to
satisfy certain Nasdaq listing criteria,  which could be an additional basis for
termination of the Company's Nasdaq listing.

     As a practical  matter,  if the Company were required to change its revenue
recognition  policy  to that  required  under TB 90-1,  the  effect  would be to
substantially  distort the results of  operations  and the  Company's  financial
condition because of the significant delay in recognizing  revenues as an offset
to recognized  expenses.  The Company further  believes that such a presentation
would result in a gross  distortion of the Company's  operations  which would be
materially  misleading  to  shareholders  and others with which the Company does
business.

     Under such  presentation,  the  Company's  prior period  revenues  could be
significantly  reduced  with a  corresponding  increase  in  revenues  in future
periods.  Earnings for current and prior  periods could be reduced or eliminated
entirely and losses increased.  However, there could be a corresponding increase
in earnings in future periods.

                                   11

<PAGE>

     The Company  believes  that its revenue  recognition  policy is an industry
standard  followed by public  companies in the service  contract  administration
business.  It is the Company's  understanding  that other  publicly held service
contract   administrators  which  are  subject  to  SEC  reporting  requirements
recognize  revenue in the same manner as the Company.  The Company believes that
this industry practice is correct in that its present revenue recognition policy
provides  the  most  realistic  and  faithful  representation  of the  Company's
operating  results - and it is far more  meaningful to investors,  shareholders,
customers and vendors than that which would result from  recognition  of revenue
under the TB 90-1 guidelines.

The Company's Immediate Plans

     As previously  indicated,  the Company is proceeding to request a review of
its  revenue  recognition  policy by FASB,  which it  expects  to submit to FASB
shortly.  The Company will submit written  materials in support of its appeal of
the Nasdaq  delisting  action no later than  Wednesday,  August 4, 1999 and will
proceed with its appeal of such Nasdaq action. The Company also will continue to
consider alternatives to its present operating model which might have the effect
of minimizing or eliminating the TB 90-1 issue so that its impact, if the result
of FASB inquiry is unfavorable, can be minimized. There can be no assurance that
any such alternative structure will be available to the Company.

Safe Harbor  Statement made pursuant to the Private  Securities  Litigation
Reform Act of 1995

     The  foregoing  Explanatory  Statement  may  contain  statements  which are
forward  looking in nature.  It should be  understood  that,  at this time,  the
correct  accounting  policy to apply or the potential  impact of the  accounting
policy which is ultimately  adopted has not conclusively been determined.  While
management  believes that the revenue  recognition  policy which the Company has
followed is the proper  policy,  no  assurance  can be made that FASB or the SEC
will continue to concur with the Company's  position.  Many accounting  policies
are  subject  to  different   interpretations   by  accountants   and  governing
organizations.


                                   12

<PAGE>


Item 5.           Market for Registrant's Common Equity and Related Stockholder
                  Matters

     The Company's Common Stock has been reported in the National Association of
Securities  Dealers  Automated  Quotation  System  ("NASDAQ"),  and currently is
reported on NASDAQ's  National Market System  ("NMS"),  under the trading symbol
"WTEC".

     As of August 2, 1999 there were 15,222,861  Common Shares  outstanding.  On
that date, the closing bid price for the Company's  common stock, as reported by
NASDAQ was $1.75.

     Following  is a summary of the price range of the  Company's  Common  Stock
during its 1999 and 1998 fiscal years and the first quarter of fiscal year 2000:

<TABLE>
<S>                                                         <C>              <C>

Common Stock
                                                                        High & Low Bid

Quarter of Fiscal 2000

First                                                          $ 3.81           $ 2.44


Quarter of Fiscal 1999

First                                                          $ 7.44           $ 3.94
Second                                                         $ 4.31           $ 2.44
Third                                                          $ 4.25           $ 2.44
Fourth                                                         $ 5.00           $ 2.72


Quarter of Fiscal 1998

First                                                          $12.38           $ 8.88
Second                                                         $12.81           $ 9.25
Third                                                          $13.25           $ 7.88
Fourth                                                         $10.69           $ 5.19

</TABLE>

     The number of  shareholders  of record of the Company's  Common Stock as of
August 2, 1999 was 983.

Dividends

     No cash dividends have been paid to holders of Common Stock since inception
of the  Company.  The  Company  anticipates  that,  in the  foreseeable  future,
earnings,  if  any,  will  be  retained  for use in the  business  or for  other
corporate purposes and it is not anticipated that cash dividends will be paid.


Item 6 - Selected Financial Data

TO BE FILED BY AMENDMENT


Item 7.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations

TO BE FILED BY AMENDMENT


Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

TO BE FILED BY AMENDMENT

                              13

<PAGE>


Item 8.   Financial Statements and Supplementary Data

TO BE FILED BY AMENDMENT


Item 9.     Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosures

      N/A


                                        14

<PAGE>


                                                         PART III


Item 10.  Directors And Executive Officers Of The Registrant


     The Company's Board of Directors consists of five directors.  All directors
hold office until the next annual  meeting and until their  successors  are duly
elected and qualified.

<TABLE>
<S>                                          <C>         <C>                                                 <C>
                                                                                                              Director
Name                                           Age        Positions with Company                               Since

Joel San Antonio                               46         Chairman of the Board, Chief Executive Officer
                                                          and Director                                          1983

William Tweed                                  59         Director                                              1983

Jeff J. White                                  48         Director                                              1983

Lawrence Richenstein                           46         Director                                              1993

Gordon A. Paris                                46         Director                                              1998

</TABLE>

     No family relationships exist among any of the Company's executive officers
or directors,  except that Randall San Antonio,  President of Warrantech Direct,
Inc., a subsidiary of the Company, is the brother of Joel San Antonio.

     The business experience of each of the Company's directors is as follows:

     Joel San Antonio, 46, one of the Company's founders, was a director,  Chief
Executive  Officer and  President  of the  Company  from  incorporation  through
February 1988.  Since  February 1988 Mr. San Antonio has been a director,  Chief
Executive Officer and Chairman of the Board of Directors and since October 1989,
he has also been Chairman and Chief Executive Officer of the Company's principal
operating subsidiaries. In 1975, Mr. San Antonio founded and, thereafter through
August 1982, served as President of Little Lorraine,  Ltd., a company engaged in
the  manufacturing of women's apparel.  Mr. San Antonio is currently a member of
the  Southwestern  Connecticut Area Commerce & Industry  Association,  the World
Forum,  the  Connecticut  Business and Industry  Association,  the  Metropolitan
Museum of Art, and the Young Presidents' Organization,  Inc. Mr. San Antonio has
been a director of Corniche Group  Incorporated,  a company in insurance  and/or
insurance-related businesses based in Euless, Texas, since May 1998.

     William  Tweed,  59, one of the Company's  founders,  was a director,  Vice
President and Secretary of the Company from incorporation through February 1988.
From February  1988 until April 1996,  Mr. Tweed was a director and President of
the  Company.  From April  1996 to March  1998,  Mr.  Tweed was  Executive  Vice
President  of European  Operations  and  director  for the  Company.  Mr.  Tweed
relinquished  his  title of Vice  President  on April 1,  1998.  From  July 1976
through August 1982, he was Vice President of Little  Lorraine,  Ltd.  Mr. Tweed
served as a director of Nationwide  Extended Warranty  Service,  Inc. from on or
about October 1981 through on or about January 1983.

     Jeff J. White,  48, one of the Company's  founders,  has been a director of
the Company from its inception. Mr. White was Vice President of the Company from
its  inception  until June 1988 and  Treasurer of the Company from its inception
until October 1990. In September 1982, Mr. White, with two partners, established
Marchon Eyewear,  Inc. a leading  international  distributor and manufacturer of
eyewear and sunwear,  including such worldwide well-known  collections as Calvin
Klein,   Fendi,   Disney,   and  Flexon,   their  patented  frames  utilizing  a
state-of-the-art  metal with a "memory".  He is  Co-President  of Marchon (along
with his two partners) and is responsible for internal  operations,  information
systems,  and interfacing with counsel on patent,  trademark,  and general legal
matters.  Mr.  White also  serves as an  associate  trustee  of the North  Shore
University Hospital Health System.


                                   15

<PAGE>

     Lawrence Richenstein, 46, has been a director of the Company since 1993. In
early 1997, Mr. Richenstein formed Laral Group LLC. Laral Group  manufacturers a
line of wireless  audio/video and computer  accessories under its Unwired brand.
It is also an OEM  supplier of wireless  multimedia  products to the  automotive
market.  Mr.  Richenstein has been President and Chief Executive Officer of Peak
Ventures, Inc., since May 1996. Peak Ventures, Inc., located in Farmingdale, New
York, provides services to the consumer  electronics  industry.  Mr. Richenstein
also has been a managing member of Long Hall  Technologies,  L.L.C.  since 1994.
Long Hall  Technologies,  L.L.C.  is a consumer  electronics  company located in
Farmingdale,  New York. Long Hall Technologies  manufactures  products under the
Nickelodeon  brand under license from MTV  Networks.  From 1985 until July 1996,
Mr.   Richenstein  was  President  and  Chief  Executive   Officer  of  Lonestar
Technologies,  Ltd., a consumer  electronics company located in Hicksville,  New
York. Lonestar Technologies,  Ltd. filed for Chapter 11 bankruptcy protection on
January 22,  1996.  The  proceeding  was  subsequently  converted to a Chapter 7
bankruptcy  liquidation  effective July 2, 1996. In addition to having sales and
marketing  experience,  Mr. Richenstein is involved in product development.  Mr.
Richenstein  is an  attorney  admitted  to  practice in New York and has, in the
past, served as a director of two public companies,  both of which were involved
in the electronics industry.

     Gordon A. Paris,  46, has been a director of the Company  since April 1998.
Mr.  Paris is Managing  Director  and Group Head of High Yield  Origination  and
Capital  Markets and Mergers and  Acquisitions  at TD  Securities  (USA) Inc., a
subsidiary  of The  Toronto-Dominion  Bank since March  1996.  From June 1994 to
March 1996,  Mr. Paris was a Managing  Director in the  Leveraged  Finance Group
with CS First  Boston.  From March 1991 to June 1994,  Mr.  Paris was a Managing
Director at Lehman Brothers in charge of the High Yield and Restructuring Group.

Other Executive Officers and Key Employees

     Michael  A.  Basone,  41,  has been Vice  President  and Chief  Information
Officer  since  joining the Company in August 1994 and Chief  Operating  Officer
since January 1997 and Executive Vice President  since April 1998.  From 1986 to
1994,   Mr.   Basone  held  various   management   positions   with   Pepsi-Cola
International, ultimately serving as Director of Management Information Systems.

     Desiree Kim Caban,  34, has been  Secretary of the Company  since July 1993
and Senior Vice President of Human Resources since April 1998. From October 1996
to March 1998,  Ms. Caban was the Vice  President of Human  Resources.  Prior to
October 1996 and since 1989, Ms. Caban served as the Executive  Assistant to the
Chairman and the Office Services Manager for the Company.  She has been employed
by the Company  since May 1986.  Ms. Caban is currently a member of the National
Association for Female Executives and a member of the Society for Human Resource
Professionals.

     Jeanine Folz, 34, has been the Senior Vice President of Insurance  Services
since April 1998 and has been  Assistant  Secretary of the Company since January
1995.  From  October  1995 to March  1998 Ms.  Folz  was the Vice  President  of
Insurance Services.  Ms. Folz joined the Company in 1987. From 1987 to 1995, Ms.
Folz held various positions  including  Director of Insurance Services and other
customer service and project analyst positions. She is currently a member of the
Risk and Insurance  Management  Society and the National  Association for Female
Executives.

     Christopher  Ford, 51, has been President of Warrantech  Automotive Inc., a
wholly owned  subsidiary of the Company,  since May 1999.  From 1994 until 1999,
Mr. Ford held various  executive  positions  with American  International  Group
(AIG) in Japan  and  Australia.  From 1968  until  1979 Mr.  Ford  held  various
management  positions  with The Ford Motor  Company  and  American  Motors  Jeep
Corporation.  From 1989 to 1994 he held  several key  marketing  and  management
positions within the vehicle service contract industry.

     Richard F. Gavino,  52, has been Executive Vice President,  Chief Financial
Officer,  Chief Accounting  Officer and Treasurer since April 1998. From 1995 to
March 1998, Mr. Gavino was Chief Financial  Officer at Maxon Auto Group,  one of
the largest  automobile  retailers in New Jersey.  From 1993 to 1995, Mr. Gavino
was a  turnaround  consultant.  From 1984 to 1993,  Mr.  Gavino was Senior  Vice
President and Chief Financial  Officer of Tops Appliance City, a publicly traded
consumer electronics and appliance superstore chain.

     Ronald Glime, 54, has been President of U.S. and Canadian  Operations since
March  1999.  From  October  1992 to  March  1999 Mr.  Glime  was  President  of
Warrantech  Automotive,  Inc., a wholly owned  subsidiary of the Company.  Prior
thereto he was Regional  Sales Manager for  Warrantech  Automotive,  Inc.  (then
known as  Warrantech  Dealer Based  Services,  Inc.) from  February 1991 through
October 1992.  From 1983 through  February  1991,  Mr. Glime was an  independent
insurance  agent for various  insurance  companies.  From 1978 through 1982, Mr.
Glime was  employed  by  American  Warranty  Corp.,  a company  in the  warranty
administration  business.  He resigned as its  President in 1982.  Mr. Glime has
been a director  of  Corniche  Group  Incorporated,  a company in the  insurance
and/or insurance-related businesses based in Euless, Texas, since May 1998.

                                   16

<PAGE>


     Sean Hicks,  32, has been Chief Operating  Officer for Warrantech  Consumer
Product  Services,  Inc.  and  Warrantech  Help  Desk  Inc.  since  May 1999 and
President of Warrantech  Home Service  Company  since  January  1999.  Mr. Hicks
joined Warrantech Home Service Company in 1997 as Vice President  Operations and
was later appointed to Senior Vice  President,  Marketing and has served in that
capacity  until  January  1999.  With over 10 years  experience  in the  service
industry,  Mr. Hicks  previously was Director of Product  Services at Montgomery
Ward and held various positions with Sears, Roebuck & Co., Inc.

     Andrew  Impavido,   57,  has  been  Senior  Vice  President  of  Warrantech
Motivation,  a Corporate  Division which  consists of Training and  Development,
Multimedia Services, and Corporate Communications since April 1998. Mr. Impavido
joined the Company in 1991 as Director of Training  and has held the position of
Vice President of Training and Development prior to his present position.  Prior
thereto,  Mr.  Impavido  had spent over 25 years in the retail  industry and has
held various  management and training  positions,  with industry leaders such as
Sears, Montgomery Ward, and the 350 store Belk Chain.

     James F.  Morganteen,  49, has been General  Counsel for the Company  since
April 1997 and Senior Vice President  since February 1998. Mr.  Morganteen  most
recently  served  as a  Vice  President  for  Bankers  Trust  of New  York  with
responsibility  for counseling  its OTC risk  management  operations.  From 1987
through  1994,  Mr.  Morganteen  served as Senior  Counsel to Xerox  Corporation
managing the legal function of Xerox Credit Corporation,  the financial services
unit of Xerox Corporation.

     Richard  Rodriguez,  45, has been  President of  Warrantech  International,
Inc., a wholly owned subsidiary of the Company,  since May 1999. From April 1998
until May 1999,  Mr.  Rodriguez  was President of  Warrantech  Consumer  Product
Services,  Inc., a wholly owned  subsidiary  of the Company.  From December 1996
until March 1998, Mr. Rodriguez has been Vice President and Managing Director of
Warrantech  International,  Inc.  From February 1992 until  December  1996,  Mr.
Rodriguez  served as Chief  Operating  Officer of the Company's  Texas operating
facilities.  From 1987 until 1992,  Mr.  Rodriguez  served in various  executive
positions with the Company.  Prior to 1987, Mr. Rodriguez served as an executive
and/or  consultant  to  retailers  and  manufacturers  of  consumer   electronic
products.

     Randall San Antonio,  45, has been President of Warrantech Direct,  Inc., a
wholly owned  subsidiary  of the  Company,  since June 1996 and from May 1994 to
June 1996 served as that subsidiary's Vice President and General Manager.  Prior
thereto he was Vice  President of Finance of Castle Hill  Productions  Inc. from
June 1984.

     Judith M. Thomas,  45, has been President of Warrantech Help Desk,  Inc., a
wholly owned  subsidiary of the Company,  since April 1997.  Ms. Thomas has been
President  of Unlimited  Business  Services,  Inc.,  a  consulting  company that
specializes in the improvement of operational,  financial and revenue streams of
major  retailers,  including  the  development  and  implementation  of  service
contract  programs  since 1993.  From 1970 until 1993 Ms. Thomas was employed by
Highland  Superstores,  holding various positions during her tenure,  ending her
employment with that Company as Corporate Vice President-Operations.


Information Concerning Meetings of the Board of Directors

     During the fiscal year ended March 31, 1999,  the Board of  Directors  held
seven meetings.  All such meetings were fully attended. The Company has an Audit
Committee consisting of Messrs. Paris, Richenstein and White. Such committee met
three  times  during  the 1999  fiscal  year.  The  Company  has a  Compensation
Committee consisting of Messrs. Paris, Richenstein and White. This committee met
once during the 1999 fiscal year.


                                   17

<PAGE>


Item 11.  Executive Compensation


Summary Compensation Table

     The  following  table  provides  information  for the years ended March 31,
1999,  1998 and 1997,  concerning the annual and long-term  compensation  of the
Chief Executive Officer and the next four highest paid executive officers of the
Company for the fiscal year ended March 31, 1999.
<TABLE>
<S>                             <C>        <C>            <C>          <C>           <C>               <C>              <C>
                                                                                       Long Term Compensation
                                             Annual Compensation                             Awards (1)
                                       --------------------------------------------- --------------------------

                                                                      Other Annual     Restricted Stock  Stock Option    All Other
Name of Principal Positions       Year      Salary          Bonus     Compensation (2) (Shares) Awards   (Shares)       Compensation
                                                                                                          Awards             (3)

Joel San Antonio                  1999          $590,430        $1,600        $29,750       $   -         400,000          $2,245
Chairman of the Board             1998           557,865       211,941         28,104           -               -           1,070
and Chief Executive Officer       1997           507,150       193,089         26,525           -               -               -

Ronald Glime                      1999          $200,000       $52,951         $9,523       $   -          70,816          $1,547
President of U.S. and Canadian    1998           160,385       110,903          7,837           -               -           1,972
   Operations                     1997           137,404        60,500          4,034           -          24,749               -

Richard F. Gavino                 1999          $182,308       $25,000         $9,587     $25,000          92,308          $    -
Executive Vice President, Chief   1998                 -             -              -           -               -               -
  Financial Officer and Treasurer 1997                 -             -              -           -               -               -

Judith M. Thomas                  1999          $171,154        $2,999        $15,985     $50,000          24,490           $ 702
President of Warrantech Help      1998           150,000        45,050         30,230           -               -             455
  Desk, Inc.                      1997                 -             -              -           -               -               -

Michael A. Basone                 1999          $193,269          $400        $12,677        $  -          32,653          $1,106
Executive Vice President, Chief   1998           158,939        43,277         12,318           -               -           2,341
  Information Officer and         1997           159,940        25,100         15,343           -          11,600               -
  Chief Operating Officer

</TABLE>

          The 1998 Stock Option Plan is the Company's only long-term incentive
          plan.

(2)       Included in Other Annual  Compensation  are auto  allowances  given to
          each officer in fiscal 1997,  1998 and 1999,  life insurance  premiums
          for the years 1997,  1998 and 1999, and  relocation  expenses paid Mr.
          Basone in fiscal 1997 and Ms. Thomas in fiscal 1998.

(3)       Represents  amounts  contributed by the Company in accordance with the
          Company's 401(K) Plan.





                              18

<PAGE>

Option Grants in Last Fiscal Year

     The following table sets forth certain  information with respect to options
to purchase  Common Stock granted during the fiscal year ended March 31, 1999 to
each of the named executive officers.


<TABLE>
<S>                           <C>                 <C>                           <C>         <C>           <C>          <C>
                                                                                   Potential Realizable Value
                                                                                   At Assumed Annual Rates
                                                                                   Of Stock Price Appreciation
_________________________Individual Grants__________________________               ___For Option Term_(1)_

                                Number of             % of Total
                                Securities            Options/SARs
                                Underlying            granted to                 Exercise or
                                Options/SARs          Employee in Fiscal         Base Price   Expiration
                                Granted               Year                       Per Share    Date           5% ($)       10% ($)



Joel San Antonio                   400,000                   43.2%                   3.370    08/24/03       1,627,514     2,053,722
Ronald Glime                        40,816                    4.4%                   6.125    04/26/08         211,954       337,501
                                    30,000                    3.2%                   3.500    03/14/09         155,787       248,066
Richard F. Gavino                   92,308                   10.0%                   3.250    04/26/08         479,348       763,281
Judith M. Thomas                    24,490                    2.6%                   6.125    04/26/08         127,175       202,504
Michael A. Basone                   32,653                    3.5%                   6.125    04/26/08         169,564       270,003


</TABLE>

(1)   Based upon the Company's price per share of $3.188, as reported on NASDAQ
      National Market System on March 31, 1999.

                              19

<PAGE>


Options Exercised and Holdings


     The following table sets forth  information with respect to the individuals
listed in the Summary  Compensation  Table above,  concerning  options exercised
during, and unexercised options held as of the end of, the 1999 fiscal year.

<TABLE>
<S>                    <C>             <C>              <C>              <C>                 <C>                   <C>
                    Shares Acquired                   Number of Unexercised Options at       Value of Unexercised In-the-Money
      Name             On Exercise    Value Realized             Fiscal Year-End(#)             Options at Fiscal Year-End ($)(1)
------------------------------------------------------------------------------------------------------------------------------------
                                                        Exercisable    Unexercisable           Exercisable          Unexercisable
                                                       ----------------------------------------------------------------------------

Joel San Antonio        1,204,080      $ 4,515,300             -           400,000              $       -             $           -
Ronald Glime                   -                -          24,749           70,816                      -                         -
Richard F. Gavino              -                -              -            92,308                      -                         -
Judith M. Thomas               -                -              -            24,490                      -                         -
Michael A. Basone              -                -          14,458           34,557                      -                         -

</TABLE>

(1)   Based upon the Company's price per share of 3.188, as reported on the
      NASDAQ National Market System on March 31, 1999.


                                                           20

<PAGE>

Employment Agreements

     On August  25,  1998,  the  Company  entered  into a five  year  employment
agreement,  effective April 1, 1998,  with Joel San Antonio.  Under the terms of
the  agreement,  Mr. San  Antonio's  initial base  compensation  is $585,000 per
annum,  subject to an increase of 5% per annum beginning January 1, 1999 through
the term of the agreement.  Mr. San Antonio is entitled to be reimbursed for all
ordinary,  reasonable and necessary  expenses incurred by him in the performance
of his duties,  including  an  automobile  allowance  of $12,000 per annum.  The
Company  provides Mr. San Antonio with a comprehensive  medical dental insurance
policy as well as disability  coverage and a life insurance death benefit policy
in excess of $1,000,000. Mr. San Antonio is entitled to an incentive bonus equal
to 2% of the net  after tax  profits  of the  Company.  In  connection  with his
entering  into such  agreement,  the Board  awarded Mr. San  Antonio  options to
purchase an  aggregate  of 400,000  shares of the  Company's  common stock at an
exercise  price of $3.37 (fair  market  value on the date of grant plus 10%) per
share, all of which options vest contingent upon the Company  achieving  certain
specified  performance goals. The employment  agreement  continues in full force
and effect for  additional  one year periods  unless either party  terminates by
giving 90 days written  notice prior to the end of any term or renewal term. Mr.
San Antonio also entered into an agreement not to compete for two years with the
Company  which may be exercised by the Company  upon the  expiration  or earlier
termination  of the  employment  agreement  by delivery to Mr. San Antonio of an
aggregate of 100,000 shares of the Company's common stock.

     Effective January 1, 1998 the Company entered into an employment  agreement
with Michael Basone to serve as the Company's  Executive Vice  President,  Chief
Information  Officer  and  Chief  Operating  Officer.  Under  the  terms of such
Agreement,  Mr.  Basone's  current  salary is  $200,000,  subject  to  automatic
increases of 5% after the first fifteen  months and annually  thereafter  during
the term of the  Agreement.  Mr. Basone was granted stock options in April 1998,
pursuant to the  Agreement,  to purchase  $200,000 of the Company's  stock which
vest  equally  over a three year  period.  In  addition  he will be  entitled to
receive  cash  bonuses  based upon the  Company and its  subsidiaries  achieving
certain  revenue and  operating  goals.  The Company  provides  Mr.  Basone with
medical and dental  insurance,  an automobile  allowance of $6,000 per annum and
life  insurance  benefits  similar to that provided by the Company to certain of
its other executives.

     Effective  January  1, 1998  Warrantech  Automotive,  Inc.  entered  into a
five-year employment agreement with Ronald Glime, its President. Under the terms
of such  Agreement  Mr.  Glime is entitled  to an initial  annual base salary of
$200,000 subject to automatic increases of 5% after the first fifteen months and
annually  thereafter during the term of the Agreement.  Effective April 1, 1999,
Mr. Glime's annual base salary, in conjunction with his new role as President of
U.S. and  Canadian  Operations,  was changed to $275,000.  Mr. Glime was granted
stock options in April 1998, pursuant to the Agreement,  to purchase $250,000 of
the  Company's  stock which vest equally  over a five year period.  Mr. Glime is
entitled  to  receive  a cash  bonus  based  upon  a  percentage  of  Warrantech
Automotive,  Inc.'s operating  performance.  The Company provides Mr. Glime with
medical and dental  insurance,  an automobile  allowance of $6,000 per annum and
life  insurance  benefits  similar to that provided by the Company to certain of
its other executives.

     Effective  April 16, 1998, the Company entered into a three year employment
agreement  with Mr.  Richard F. Gavino to serve as the Company's  Executive Vice
President,  Chief  Financial  Officer  and  Treasurer.  Under  the terms of such
Agreement,  Mr. Gavino is entitled to an initial  annual base salary of $200,000
subject to annual  increases  of 5%. Mr.  Gavino  received a $25,000  bonus upon
signing of the  employment  agreement.  Mr.  Gavino was granted  stock  options,
pursuant to the Agreement, to purchase $25,000 of the Company's stock which vest
at the end of the first year and to  purchase  $300,000 of the  Company's  stock
which vest equally over a three year period. Mr. Gavino is entitled to receive a
cash bonus based upon a  percentage  of  Company's  operating  performance.  The
Company  provides Mr.  Gavino with medical and dental  insurance,  an automobile
allowance  of $6,000  per  annum and life  insurance  benefits  similar  to that
provided by the Company to certain of its other executives.

                                   21

<PAGE>


     Effective April 1, 1997, the Company and Warrantech Help Desk, Inc. entered
into a five year employment  agreement with Judith Thomas, its President.  Under
the terms of such  Agreement  Ms.  Thomas is entitled to an initial  annual base
salary of $150,000  subject to automatic  increases  of 5%  annually.  Effective
April 1, 1998,  Ms Thomas'  annual base salary was  adjusted  to  $175,000.  Ms.
Thomas received a $50,000 stock bonus upon signing of the employment  agreement.
The stock was  granted in April 1998.  Ms.  Thomas is entitled to receive a cash
bonus equal to a percentage  of her current base salary upon the  attainment  of
certain  operating goals  established for Warrantech Help Desk, Inc. The Company
provides Ms. Thomas with medical and dental insurance,  relocation benefits,  an
automobile  allowance of $6,000 per annum and life insurance benefits similar to
that provided by the Company to certain of its other executives.

Other Incentives and Compensation

     The Company  has  provided  executives  equity-based  long-term  incentives
through its 1998  Employee  Incentive  Stock Option Plan,  which was designed to
award key management  personnel and other  employees of the Company with bonuses
and stock options based on the Company's and the employee's performance.

     The Company provides executive officers with an incentive bonus plan, which
provides cash and/or stock bonuses upon meeting certain performance criteria.

     The Company  provides an  incentive  bonus plan for all  employees  for the
referral  of  potential  new  employees  for  employment  by the Company who are
subsequently hired by the Company.  The amount of the bonus is predicated on the
skill and professional level of the new employee.

     Additionally, the Company provides an incentive bonus to existing employees
who  are  claims  adjusters  for  obtaining  and  maintaining  certification  as
professionals in their field.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     Section  16(a) of the  Securities  Exchange Act of 1934  requires  that the
Company's  executive officers and directors and persons who own more than 10% of
a registered class of the Company's equity  securities file reports of ownership
and changes in  ownership  with the  Securities  and  Exchange  Commission  (the
"Commission").  Officers,  directors  and  greater  than  10%  shareholders  are
required by  Commission  regulation  to furnish  the Company  with copies of all
Section  16(a)  forms they file.  Based on a review of the  reports,  during the
fiscal year ended March 31, 1999, all Section 16 filing requirements  applicable
to its officers,  directors and greater than 10% beneficial owners were complied
with.

Non-Management Directors' Compensation

     Effective  January 1, 1998,  each  non-employee  director  is  entitled  to
receive  compensation  of $2,500 plus 250 shares of Company  stock per  calendar
quarter of board  service.  Committee  service is  compensated at $500 plus 62.5
shares of Company stock per calendar quarter.  During fiscal 1999, the following
cash amounts were paid:

                           William Tweed                                $10,000
                           Jeff J. White                                 14,000
                           Lawrence Richenstein                          14,000
                           Gordon A. Paris                               12,000

No directors' fees are payable to employees of the Company who serve as
directors.

                                                           22

<PAGE>

Item 12.    Security Ownership of Certain Beneficial Owners and Management


     The following  table sets forth  information as of June 30, 1999 concerning
shares of Common Stock,  par value $.007 per share,  the  Company's  only voting
securities, owned beneficially by each of the Company's directors by each person
who is known by the Company to own beneficially  more than 5% of the outstanding
voting  securities  of the Company and by the Company's  executive  officers and
directors as a group.

<TABLE>
<S>                                                      <C>                                      <C>

Name and Address of Beneficial Owner                      Amount and Nature of                    Percent
                                                          Beneficial Ownership                    of Class

    Joel San Antonio                                      3,201,648 shares(1)                       21.03%
    300 Atlantic Street
    Stamford, Connecticut 06901

    William Tweed                                         1,841,236 shares(2)                       12.10%
    300 Atlantic Street
    Stamford, Connecticut 06901

    Jeff J. White                                         1,591,910 shares(3)                       10.46%
    35 Hub Drive
    Melville, New York 11747

    Lawrence Richenstein                                     12,750 shares                            .08%
    500 Eastern Parkway
    Farmingdale, New York  11735

    Gordon A. Paris                                           1,625 shares                              -
    31 West 52nd Street, 22nd floor
    New York, New York  10019-6101

All directors and executive officers
as a group (17 persons)
                                                          6,960,210 shares(1,2,3,4)                 45.09%
</TABLE>

__________________

(1)     Includes 5,000 shares held by Mr. San Antonio as custodian for two minor
        children.  Includes 10,800 shares owned by Mr. San  Antonio's wife as to
        which he disclaims beneficial ownership.  Does not include 13,354 shares
        owned by Mr. San Antonio's  brother and  sister-in-law  and 5,000 shares
        owned by his mother as to which he disclaims  any  beneficial  interest.
        Includes an aggregate of 200,000 shares held in trusts for his children,
        of which Mr. San Antonio's wife is a trustee as to which Mr. San Antonio
        disclaims beneficial ownership.

(2)     Includes  23,000  shares held by Mr. Tweed  as custodian  for one child.
        Does not include an aggregate of 7,500 shares held by Mr. Tweed's mother
        and sister.  Includes  1,500 shares held by Mr. Tweed's wife, and 25,000
        shares held in trust for the benefit of Mr.  Tweed's  granddaughter,  of
        which Mr.  Tweed's  wife is the trustee,  as to which he  disclaims  any
        beneficial interest.

(3)     Does not include an  aggregate  of 90,000  shares  owned by  Mr. White's
        mother and sister as to which he disclaims any beneficial interest.

(4)     Includes  options held by executive  officers of the Company to purchase
        an aggregate of 214,706 shares, which are presently exercisable.


Item 13.  Certain Relationships and Related Transactions

     On April 1, 1996 Michael  Salpeter,  former  President  and Director of the
Company,  and William  Tweed,  former  President  and  Director of the  Company,
entered into an Agreement whereby Mr. Tweed granted to Mr. Salpeter an option to
purchase  487,000  shares of common stock owned by Mr. Tweed.  Such options were
exercisable  at various  prices in whole or in part,  and expire on October  22,
2000. In May 1998,  such Agreement was modified,  pursuant to which Mr. Salpeter
relinquished  his  rights  with  respect to  125,000  shares,  leaving an option
exercisable  for 362,000  shares.  In March 1999,  62,000 shares were  purchased
under the Agreement leaving an option exercisable for 300,000 shares.

                                   23

<PAGE>

     On July 6, 1998 Joel San Antonio, Chairman and Chief Executive Officer, and
William Tweed and Jeff J. White,  members of the Board of  Directors,  exercised
3,000,000  of their vested  options to purchase  Warrantech  Corporation  common
stock.  Promissory  Notes totaling  $8,091,430 were signed with interest payable
over three years at an annual interest rate of 6%. The promissory  notes,  which
are with recourse and secured by the stock certificates  issued,  mature July 5,
2001. An additional  promissory note was signed by Joel San Antonio for $595,634
on March 22,  1999 which  represents  the  amounts  funded by the  Company  with
respect to his payroll  taxes for the  exercise of these  options.  On March 25,
1999,  Messrs.  Jeff J. White and William Tweed sold 155,000 and 100,000  shares
respectively  of  Warrantech  Corporation  common  stock to the Company at $3.25
(closing  price per  share on  3/25/99  less  $.25)  per  share to  satisfy  tax
liabilities related to the exercise of their options.

     Warrantech Consumer Product Services, Inc. and Warrantech Direct, Inc. have
made commission payments to Unlimited Business Services,  Inc. totaling $328,690
for the fiscal year 1999 pursuant to Representative  Agreements.  Judith Thomas,
President of Warrantech Help Desk,  Inc. is the President of Unlimited  Business
Services, Inc.



                                                           24
<PAGE>


                                            PART IV


Item 14.       Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)     1. and 2. Financial  Statements and Financial  Statement  Schedule:  see
        accompanying  Index to  Financial  Statements  and  Financial  Statement
        Schedule, page 21.

(b)     Reports on Form 8-K during the last quarter: None.

(c)     Exhibits

    3(a)  - Certificate of Incorporation filed June 22, 1983.  Incorporated by
            reference  to the  Company's  Registration  Statement  on Form S-18,
            filed on November 23, 1983, Registration No. 2-88097-NY.

    (b)   - Certificate  of Amendment of Certificate  of  Incorporation  filed
            October  24,  1983.  Incorporated  by  reference  to  the  Company's
            Registration  Statement  on Form S-18,  filed on November  23, 1983,
            Registration No. 2-88097-NY.

    (c)   - Certificate  of Amendment of Certificate  of  Incorporation  dated
            June 29, 1987.  Incorporated  by reference to the  Company's  Form 8
            Amendment to the Company's Annual Report on Form 10-K for the fiscal
            year ended March 31, 1987, file no. 0-13084.

    (d)  -  Certificate  of  Designation  of the Company  with respect to the
            Preferred  Stock as filed with the Secretary of State of Delaware on
            October 12, 1993.  Incorporated by reference to the Company's Report
            on Form 10-K for the fiscal year ended March 31, 1994.

    (e)   - By-laws of the Company,  as amended.  Incorporated by reference to
            the Company's  Quarterly  Report on Form 10-Q for the fiscal quarter
            ended September 10, 1988, file no. 0-13084.

    10(a) - Form of Sales Distributor Agreement.  Incorporated by reference to
            the  Company's  Annual Report on Form 10-K for the fiscal year ended
            March 31, 1985, file no. 0-13084.

    (b)   - Form of Service Center Agreement. Incorporated by reference to the
            Company's Annual Report on Form 10-K for the fiscal year ended March
            31, 1985, file no. 0-13084.

    (c)  -  Form  of  Dealer  Agreement.  Incorporated  by  reference  to the
            Company's Annual Report on Form 10-K for the fiscal year ended March
            31, 1985, file no. 0-13084.

    (d)   - Form of Sales Agent  Agreement.  Incorporated  by reference to the
            Company's  Registration Statement on Form S-1, filed on September 5,
            1986, Registration No. 3-8517.

    (e)   - 1998 Employee Incentive Stock Option Plan of the Company.

    (f)   - Employment  Agreement  dated April 1, 1998 between the Company and
            Joel San Antonio.

                                   25

<PAGE>

    (g)   - Insurance policy between the Company and Houston General Insurance
            Company   pertaining   to   service   contracts   issued  by  Inacom
            Corporation.  Incorporated  by reference to the Company's  Report on
            Form  10-K for the  fiscal  year  ended  March  31,  1992,  file no.
            0-13084.

    (h)   - Insurance policy between the Company and Houston General Insurance
            Company  pertaining  to  service  contracts  issued by  Damark  Inc.
            Incorporated  by reference to the Company's  Report on Form 10-K for
            the fiscal year ended March 31, 1992, file no. 0-13084.

    (i)   - Insurance policy between the Company and Houston General Insurance
            Company pertaining to service contracts written in all states except
            Florida.

    (j)   - Insurance policy between the Company and Houston General Insurance
            Company pertaining to service contracts issued by CompUSA.

    (k)   - Insurance policy between the Company and Houston General Insurance
            company  pertaining to service contracts written by WCPS of Florida,
            Inc. (excluding Inacom Corporation).

    (l)   - Insurance policy between the Company and Houston General Insurance
            company  pertaining to service contracts written by WCPS of Florida,
            Inc. through CompUSA.

    (m)   - Settlement and Runoff  Agreement  between the Company,  its wholly
            owned  subsidiaries  Warrantech  Dealer  Based  Services,  Inc.  and
            Warrantech  Consumer Product  Services,  Inc. and American  Hardware
            Mutual Insurance Company ("AHM") regarding  termination of insurance
            coverage  by AHM.  (This  document  has been  omitted  and  accorded
            confidential  treatment by the  Securities  and Exchange  Commission
            pursuant  to an Order  Granting  Application  Pursuant to Rule 24b-2
            Under the  Securities  Exchange Act of 1934, As Amended,  Respecting
            Confidential  Treatment  of Exhibits  10(v) and 10(w)  Contained  in
            Registrant's  Form 10-K for the fiscal  year ended  March 31,  1992,
            issued by the Division of Corporation Finance.)

    (n)   - Revolving Loan Agreement between the Company and Peoples Bank.

    (o)  -  Administrator  Agreement  - Consumer  Products,  between  Houston
            General Insurance Company and Warrantech  Consumer Product Services,
            Inc. (This  document has been omitted and has been filed  separately
            with  the   Securities  and  Exchange   Commission   pursuant  to  a
            Confidential Treatment Request.)

    (p)   - General Agency  Agreement  between American  International  Group,
            Inc. and Warrantech Automotive, Inc. (This document has been omitted
            and has been  filed  separately  with the  Securities  and  Exchange
            Commission pursuant to a Confidential Treatment Request.)

    (q)   - Master Agreement  between American  International  Group, Inc. and
            the Company  (Section 1.6 of this  document has been omitted and has
            been filed  separately  with the Securities and Exchange  Commission
            pursuant to a Confidential Treatment Request.)

                                        26

<PAGE>

    21.   - Subsidiaries of the Company.

    27.   - Financial Data Schedule.

    28.  -  Stipulation  and  Consent  Order  of  Illinois.  Incorporated  by
            reference  to the  Company's  Quarterly  Report on Form 10-Q for the
            fiscal quarter ended December 31, 1988, file no. 0-13084.

    99(a) - Complaint  in  Action  entitled  David  Robertson  v.  Warrantech
            Corporation and Warrantech  Automotive  Incorporated by reference to
            the Company's  Quarterly  Report on Form 10-Q for the fiscal quarter
            ended December 31, 1993, file no. 0-13084.

    (b)   - Amended Complaint in Action entitled The Oak Agency,  Inc. and The
            Oak Financial  Services,  Inc. vs. Warrantech Dealer Based Services,
            Inc., Case No. 91 C 6677,  filed in the United States District Court
            for the Northern District of Illinois.  Incorporated by reference to
            the  Company's  Annual Report on Form 10-K for the fiscal year ended
            March 31, 1997, file 0-13084.

    (c)  -  Complaint  in Action  entitled  The Oak Agency,  Inc.,  et al. v.
            Warrantech,  Inc., et al.,  Case No. 96 C 1106,  filed in the United
            States  District  Court  for  the  Northern  District  of  Illinois.
            Incorporated  by reference to the  Company's  Annual  Report on Form
            10-K for the fiscal year ended March 31, 1997, file 0-13084.

                              27
<PAGE>

                                                        SIGNATURES

Pursuantto the  requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereto duly authorized.

                                                          WARRANTECH CORPORATION

Dated:        August 3, 1999                     By:   /s/ Joel San Antonio
                                                       ___________________
                                                       Joel San Antonio
                                                       Chairman of the Board and
                                                       Chief Executive Officer


Dated:        August 3, 1999                      By:  /s/ Richard F. Gavino
                                                       _____________________
                                                       Richard F. Gavino,
                                                       Chief Financial Officer
                                                       and Chief Accounting
                                                       Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

<TABLE>
<S>                                                     <C>

Signature                                               Title                                         Date

                                                        Chief Executive Officer,
                                                        Chairman of the Board
                                                        and Director                                  August 3, 1999
/s/ Joel San Antonio
--------------------------------------------------
(Joel San Antonio)

                                                        Director                                      August 3, 1999
--------------------------------------------------
(William Tweed)

/s/ Gordon Paris                                        Director                                      August 3, 1999
--------------------------------------------------
(Gordon Paris)


/s/ Jeffrey J. White                                     Director                                      August 3, 1999
--------------------------------------------------
(Jeffrey J. White)


/s/ Lawrence Richenstein                                 Director                                      August 3, 1999
--------------------------------------------------
(Lawrence Richenstein)

</TABLE>
                                   28
<PAGE>

                                                       Exhibit List



    3(a)  - Certificate of Incorporation filed June 22, 1983.  Incorporated by
            reference  to the  Company's  Registration  Statement  on Form S-18,
            filed on November 23, 1983, Registration No. 2-88097-NY.

    (b)   - Certificate  of Amendment of Certificate  of  Incorporation  filed
            October   24,1983.   Incorporated  by  reference  to  the  Company's
            Registration  Statement  on Form S-18,  filed on November  23, 1983,
            Registration No. 2-88097-NY.

    (c)   - Certificate  of Amendment of Certificate  of  Incorporation  dated
            June 29, 1987.  Incorporated  by reference to the  Company's  Form 8
            Amendment to the Company's Annual Report on Form 10-K for the fiscal
            year ended March 31, 1987, file no. 0-13084.

    (d)  -  Certificate  of  Designation  of the Company  with respect to the
            Preferred  Stock as filed with the Secretary of State of Delaware on
            October 12, 1993.  Incorporated by reference to the Company's Report
            on Form 10-K for the fiscal year ended March 31, 1994.

    (e)   - By-laws of the Company,  as amended.  Incorporated by reference to
            the Company's  Quarterly  Report on Form 10-Q for the fiscal quarter
            ended September 10, 1988, file no. 0-13084.

    10(a) - Form of Sales Distributor Agreement.  Incorporated by reference to
            the  Company's  Annual Report on Form 10-K for the fiscal year ended
            March 31, 1985, file no. 0-13084.

    (b)   - Form of Service Center Agreement. Incorporated by reference to the
            Company's Annual Report on Form 10-K for the fiscal year ended March
            31, 1985, file no. 0-13084.

    (c)  -  Form  of  Dealer  Agreement.  Incorporated  by  reference  to the
            Company's Annual Report on Form 10-K for the fiscal year ended March
            31, 1985, file no. 0-13084.

    (d)   - Form of Sales Agent  Agreement.  Incorporated  by reference to the
            Company's  Registration Statement on Form S-1, filed on September 5,
            1986, Registration No. 3-8517.

    (e)   - 1998 Employee Incentive Stock Option Plan of the Company.

    (f)   - Employment  Agreement  dated April 1, 1998 between the Company and
            Joel San Antonio.

                                   29

<PAGE>

    (g)   - Insurance policy between the Company and Houston General Insurance
            Company   pertaining   to   service   contracts   issued  by  Inacom
            Corporation.  Incorporated  by reference to the Company's  Report on
            Form  10-K for the  fiscal  year  ended  March  31,  1992,  file no.
            0-13084.

    (h)   - Insurance policy between the Company and Houston General Insurance
            Company  pertaining  to  service  contracts  issued by  Damark  Inc.
            Incorporated  by reference to the Company's  Report on Form 10-K for
            the fiscal year ended March 31, 1992, file no. 0-13084

    (i)   - Insurance policy between the Company and Houston General Insurance
            Company pertaining to service contracts written in all states except
            Florida.

    (j)   - Insurance policy between the Company and Houston General Insurance
            Company pertaining to service contracts issued by CompUSA.

    (k)   - Insurance policy between the Company and Houston General Insurance
            company  pertaining to service contracts written by WCPS of Florida,
            Inc. (excluding Inacom Corporation).

    (l)   - Insurance policy between the Company and Houston General Insurance
            company  pertaining to service contracts written by WCPS of Florida,
            Inc. through CompUSA.

    (m)   - Settlement and Runoff  Agreement  between the Company,  its wholly
            owned  subsidiaries  Warrantech  Dealer  Based  Services,  Inc.  and
            Warrantech  Consumer Product  Services,  Inc. and American  Hardware
            Mutual Insurance Company ("AHM") regarding  termination of insurance
            coverage  by AHM.  (This  document  has been  omitted  and  accorded
            confidential  treatment by the  Securities  and Exchange  Commission
            pursuant  to an Order  Granting  Application  Pursuant to Rule 24b-2
            Under the  Securities  Exchange Act of 1934, As Amended,  Respecting
            Confidential  Treatment  of Exhibits  10(v) and 10(w)  Contained  in
            Registrant's  Form 10-K for the fiscal  year ended  March 31,  1992,
            issued by the Division of Corporation Finance.)

    (n)   - Revolving Loan Agreement between the Company and Peoples Bank.

    (o)   -  Administrator  Agreement  - Consumer  Products,  between  Houston
            General Insurance Company and Warrantech  Consumer Product Services,
            Inc. (This  document has been omitted and has been filed  separately
            with  the   Securities  and  Exchange   Commission   pursuant  to  a
            confidential Treatment Request.)

    (p)   - General Agency  Agreement  between American  International  Group,
            Inc. and Warrantech Automotive, Inc. (This document has been omitted
            and has been  filed  separately  with the  Securities  and  Exchange
            Commission pursuant to a Confidential Treatment Request.)


                                   30

<PAGE>

    (q)   - Master Agreement  between American  International  Group, Inc. and
            the Company  (Section 1.6 of this  document has been omitted and has
            been filed  separately  with the Securities and Exchange  Commission
            pursuant to a Confidential Treatment Request.)

    21.   - Subsidiaries of the Company.

    27.   - Financial Data Schedule.

    28.  -  Stipulation  and  Consent  Order  of  Illinois.  Incorporated  by
            reference  to the  Company's  Quarterly  Report on Form 10-Q for the
            fiscal quarter ended December 31, 1988, file no. 0-13084.

    99(a) - Complaint  in  Action  entitled  David  Robertson  v.  Warrantech
            Corporation and Warrantech  Automotive  Incorporated by reference to
            the Company's  Quarterly  Report on Form 10-Q for the fiscal quarter
            ended December 31, 1993, file no. 0-13084.

    (b)   - Amended Complaint in Action entitled The Oak Agency,  Inc. and The
            Oak Financial  Services,  Inc. vs. Warrantech Dealer Based Services,
            Inc., Case No. 91 C 6677,  filed in the United States District Court
            for The Northern District of Illinois.  Incorporated by reference to
            the  Company's  Annual Report on Form 10-K for the fiscal year ended
            March 31, 1997, file 0-13084.

    (c)  -  Complaint  in Action  entitled  The Oak Agency,  Inc.,  et al. v.
            Warrantech,  Inc., et al.,  Case No. 96 C 1106,  filed in the United
            States  District  Court  for  the  Northern  District  of  Illinois.
            Incorporated  by reference to the  Company's  Annual  Report on Form
            10-K for the fiscal year ended March 31, 1997, file 0-13084.

                                        31
<PAGE>

                                   EXHIBIT 10(e)


                                 WARRANTECH CORPORATION
                                      1998 STOCK PLAN


     1. Purpose. The purpose of the Warrantech  Corporation 1998 Stock Plan (the
"Plan") is to encourage key employees of Warrantech  Corporation (the "Company")
and of any  present  or  future  parent or  subsidiary  of the  Company  (each a
"Related  Corporation"  and  collectively,  "Related  Corporations")  and  other
individuals  who render services to the Company or any Related  Corporation,  by
providing  opportunities  to participate in the ownership of the Company and its
future growth through (a) the grant of options which qualify as "incentive stock
options"  ("ISOs") under Section 422(b) of the Internal Revenue Code of 1986, as
amended  (the  "Code");  (b) the grant of options  which do not  qualify as ISOs
("Non-Qualified  Options");  (c) awards of stock in the Company ("Awards");  and
(d)   opportunities   to  make  direct   purchases   of  stock  in  the  Company
("Purchases").  Both ISOs and  Non-Qualified  Options are  referred to hereafter
individually as an "Option" and collectively as "Options."  Options,  Awards and
authorizations  to make  Purchases  are  referred to hereafter  collectively  as
"Stock Rights." As used herein, the terms "parent" and "subsidiary" mean "parent
corporation"  and  "subsidiary  corporation,"  respectively,  as those terms are
defined in Section 424 of the Code.

     2.           Administration of the Plan.

     (a) Board or Committee Administration.  The Plan shall be administered by a
committee  (the  "Committee")  of the Board of  Directors  of the  Company  (the
"Board"). The Committee,  to the extent required by applicable regulations under
Section 162(m) of the Code, shall be comprised of two or more outside  directors
(as defined in applicable regulations thereunder) who, to the extent required by
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, or
any successor  provision ("Rule 16b-3"),  shall be disinterested  administrators
within the meaning of Rule 16b-3.  All  references in this Plan to the Committee
shall mean the Board if no Committee has been appointed. Subject to ratification
of the grant or  authorization  of each Stock Right by the Board (if so required
by applicable  state law),  and subject to the terms of the Plan,  the Committee
shall have the  authority  to (i)  determine  to whom  (from  among the class of
employees eligible under paragraph 3 to receive ISOs) ISOs shall be granted, and
to whom  (from  among the  class of  individuals  and  entities  eligible  under
paragraph 3 to receive  Non-Qualified  Options and Awards and to make Purchases)
Non-Qualified  Options,  Awards  and  authorizations  to make  Purchases  may be
granted;  (ii)  determine  the time or times at which Options or Awards shall be
granted or Purchases made;  (iii) determine the purchase price of shares subject
to each  Option or  Purchase,  which  prices  shall not be less than the Minimum
Price specified in paragraph 6; (iv) determine whether each Option granted shall
be an ISO or a Non-Qualified  Option; (v) determine (subject to paragraph 7) the
time or times when each Option shall become  exercisable and the duration of the
exercise period;  (vi) extend the period during which outstanding Options may be
exercised;  (vii)  determine  whether  restrictions  are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any,  and  (viii)  interpret  the Plan  and  prescribe  and  rescind  rules  and
regulations relating to it. If the Committee determines to issue a Non-Qualified

                                  -1-

<PAGE>

Option, it shall take whatever actions it deems necessary,  under Section 422 of
the Code and the regulations promulgated thereunder,  to ensure that such Option
is not treated as an ISO. The  interpretation  and construction by the Committee
of any  provisions  of the Plan or of any Stock Right  granted under it shall be
final unless  otherwise  determined by the Board. The Committee may from time to
time adopt such rules and  regulations  for carrying out the Plan as it may deem
advisable.

     (b) Committee  Actions.  The Committee may select one of its members as its
chairman, and shall hold meetings at such time and places as it may determine. A
majority of the  Committee  shall  constitute a quorum and acts of a majority of
the members of the Committee at a meeting at which a quorum is present,  or acts
reduced  to or  approved  in writing by all the  members  of the  Committee  (if
consistent with applicable state law), shall be the valid acts of the Committee.
From time to time the Board may increase the size of the  Committee  and appoint
additional  members thereof,  remove members (with or without cause) and appoint
new members in substitution  therefor,  fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan.

     (c) Grant of Stock Rights to Board  Members.  Subject to the  provisions of
paragraph 3 below, if applicable,  Stock Rights may be granted to members of the
Board.  All grants of Stock  Rights to  members of the Board  shall in all other
respects be made in accordance  with the  provisions of this Plan  applicable to
other  eligible  persons.  Consistent  with the provisions of paragraph 3 below,
members  of the Board who  either (i) are  eligible  to receive  grants of Stock
Rights  pursuant to the Plan or (ii) have been granted  Stock Rights may vote on
any matters  affecting the  administration of the Plan or the grant of any Stock
Rights  pursuant  to the Plan,  except  that no such  member  shall act upon the
granting  to  himself or herself  of Stock  Rights,  but any such  member may be
counted in  determining  the  existence  of a quorum at any meeting of the Board
during  which  action is taken with  respect to the  granting  to such member of
Stock Rights.

     (d)  Exculpation.  No  member  of the  Board  or  the  Committee  shall  be
personally  liable  for any  action  taken or any  failure to take any action in
connection  with the  Plan or the  granting  of Stock  Rights  under  the  Plan,
provided that this  subparagraph  2(d) shall not apply to (i) any breach of such
member's  duty of  loyalty  to the  Company  or its  stockholders,  (ii) acts or
omissions  not in good faith or involving  intentional  misconduct  or a knowing
violation of law, (iii) acts or omissions  that would result in liability  under
Section 174 of the General Corporation Law of the State of Delaware, as amended,
and (iv) any  transaction  from which the member  derived an  improper  personal
benefit.

     (e) Indemnification. Service on the Committee shall constitute service as a
member of the Board.  Each member of the  Committee  shall be  entitled  without
further  act on his or her part to  indemnity  from the  Company to the  fullest
extent provided by applicable law and the Company's Certificate of Incorporation
and/or  By-laws  in  connection  with  or  arising  out of any  action,  suit or
proceeding  with  respect to the  administration  of the Plan or the granting of
Stock Rights  thereunder  in which he or she may be involved by reason of his or
her being or having  been a member of the  Committee,  whether  or not he or she
continues  to be a member of the  Committee  at the time of the action,  suit or
proceeding.

                                   -2-

<PAGE>

     3. Eligible Employees and Others.  ISOs may be granted only to employees of
the  Company  or any  Related  Corporation.  Non-Qualified  Options,  Awards and
authorizations  to make  Purchases  may be granted to any  employee,  officer or
director  (whether or not also an employee) or  consultant of the Company or any
Related  Corporation.  The Committee may take into  consideration  a recipient's
individual  circumstances  in  determining  whether to grant a Stock Right.  The
granting of any Stock Right to any  individual or entity shall  neither  entitle
that  individual or entity to, nor  disqualify  such  individual or entity from,
participation in any other grant of Stock Rights.

     4.           Stock Rights.

     (a) Number of Shares  Subject to Rights.  The stock subject to Stock Rights
shall be  authorized  but unissued  shares of Common  Stock of the Company,  par
value  $0.007  per share  (the  "Common  Stock"),  or  shares  of  Common  Stock
reacquired by the Company in any manner.  The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall  initially  not exceed
1,041,987  shares.  Such authorized share reserve is comprised of (i) the number
of shares which remained available for issuance,  as of the Plan Effective Date,
under the  Warrantech  Corporation  1988  Employee  Incentive  Stock Option Plan
(amended  as of July,  1996)  (the  "Predecessor  Plan"),  including  the shares
subject  to the  outstanding  options  incorporated  into the Plan and any other
shares  which  would have been  available  for future  option  grants  under the
Predecessor Plan, plus (ii) an additional 600,000 shares, subject to stockholder
approval.  The  aggregate  number of shares which may be issued  pursuant to the
Plan is subject to  adjustment  as provided in paragraph  13. If any Stock Right
granted under the Plan shall expire or terminate for any reason  without  having
been  exercised in full or shall cease for any reason to be exercisable in whole
or in part,  the shares of Common Stock  subject to such Stock Right shall again
be available for grants of Stock Rights under the Plan.

     (b) Nature of Awards.  In addition to ISOs and Non-Qualified  Options,  the
Committee may grant or award the following  Stock  Rights.  Participants  may be
granted the right to purchase Common Stock,  subject to such restrictions as may
be specified by the  Committee  ("Restricted  Shares").  Such  restrictions  may
include,  but are not limited to, the  requirement of continued  employment with
the Company or a Related Corporation and achievement of performance  objectives.
The Committee shall determine the purchase price of the Restricted  Shares,  the
nature of the restrictions and the performance objectives, all of which shall be
set forth in the agreement relating to each right awarded to purchase Restricted
Shares. The performance  objectives shall consist of (A) one or more in business
criteria,  and (B) a target level or levels of performance  with respect to such
criteria. The performance objectives shall be objective and shall otherwise meet
the  requirements  of  Section  162(m)(4)(C)  of the Code.  In  addition  to the
foregoing,  awards of Common Stock may be made to  participants as bonuses or as
additional compensation, as may be determined by the Committee.

                                   -3-

<PAGE>

     5. Granting of Stock Rights.  Stock Rights may be granted under the Plan at
any time on or after August 25, 1998 and prior to August 24,  2008.  The date of
grant  of a Stock  Right  under  the  Plan  will be the  date  specified  by the
Committee at the time it grants the Stock Right;  provided,  however,  that such
date shall not be prior to the date on which the  Committee  acts to approve the
grant.  Options  granted  under the Plan are intended to qualify as  performance
based  compensation  to the extent required under proposed  Treasury  Regulation
Section 1.162-27.

     6.           Minimum Option Price; ISO Limitations.

     (a) Price for  Non-Qualified  Options,  Awards and Purchases.  The exercise
price per share specified in the agreement relating to each Non-Qualified Option
granted,  and the  purchase  price  per share of stock  granted  in any Award or
authorized  as a  Purchase,  under  the Plan  shall in no event be less than the
minimum legal consideration required therefor under the laws of any jurisdiction
in  which  the  Company  or  its   successors  in  interest  may  be  organized.
Non-Qualified  Options  granted under the Plan, with an exercise price less than
the fair  market  value  per share of  Common  Stock on the date of  grant,  are
intended to qualify as  performance-based  compensation under Section 1652(m) of
the Code  and any  applicable  regulations  thereunder.  Any such  Non-Qualified
Options granted under the Plan shall be exercisable  only upon the attainment of
a pre-established, objective performance goal established by the Committee.

     (b) Price for ISOs. The exercise price per share specified in the agreement
relating  to each ISO  granted  under  the Plan  shall not be less than the fair
market value per share of Common Stock on the date of such grant. In the case of
an ISO to be  granted  to an  employee  owning  stock  possessing  more than ten
percent (10%) of the total combined  voting power of all classes of stock of the
Company  or any  Related  Corporation,  the  price per  share  specified  in the
agreement  relating  to such ISO shall not be less than one  hundred ten percent
(110%) of the fair market  value per share of Common Stock on the date of grant.
For purposes of determining  stock ownership under this paragraph,  the rules of
Section 424(d) of the Code shall apply.

     (c) $100,000 Annual  Limitation on ISO Vesting.  Each eligible employee may
be granted  Options  treated as ISOs only to the extent that,  in the  aggregate
under this Plan and all  incentive  stock  option  plans of the  company and any
related  Corporation,  ISOs do not become exercisable for the first time by such
employee  during any  calendar  year with  respect to stock having a fair market
value (determined at the time the ISOs were granted) in excess of $100,000.  The
Company intends to designate any Options granted in excess of such limitation as
Non-Qualified Options.

     (d)  Determination  of Fair  Market  Value.  If,  at the time an  Option is
granted under the Plan,  the Company's  Common Stock is publicly  traded,  "fair
market  value" shall be  determined as of the date of grant or, if the prices or
quotes  discussed  in this  sentence  are  unavailable  for such date,  the last
business day for which such prices or quotes are available  prior to the date of
grant and shall mean (i) the  average  (on that date) of the high and low prices
of the Common Stock on the principal national  securities  exchange on which the

                                        -4-

<PAGE>

Common  Stock is  traded,  if the  Common  Stock is then  traded  on a  national
securities  exchange;  or (ii) the  closing bid price (or average of bid prices)
last   quoted  (on  that  date)  by  an   established   quotation   service  for
over-the-counter  securities,  if the Common Stock is not reported on a national
securities  exchange.  If the Common Stock is not publicly traded at the time an
Option is granted under the Plan,  "fair market value" shall mean the fair value
of  the  Common  Stock  as  determined  by  the  Committee   after  taking  into
consideration  all  factors  which  it  deems  appropriate,  including,  without
limitation,  recent  sale and  offer  prices  of the  Common  Stock  in  private
transactions negotiated at arm's length.

     7.  Option  Duration.   Subject  to  earlier  termination  as  provided  in
paragraphs 9 and 10 or in the  agreement  relating to such  Option,  each Option
shall expire on the date specified by the  Committee,  but not more than (i) ten
years  from the date of grant in the case of  Options  generally,  and (ii) five
years from the date of grant in the case of ISOs  granted to an employee  owning
stock  possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(b). Subject to earlier termination as provided in paragraphs 9
and 10,  the term of each  ISO  shall  be the  term  set  forth in the  original
instrument granting such ISO.

     8. Exercise of Option and Transfer of Shares Upon Exercise.  Subject to the
provisions of paragraphs 9 through 12, each Option  granted under the Plan shall
be exercisable as follows:

     (a) Vesting.  The Option shall either be fully  exercisable  on the date of
grant  or  shall  become  exercisable  thereafter  in such  installments  as the
Committee may specify.

     (b) Full Vesting of Installments.  Once an installment becomes exercisable,
it shall remain  exercisable  until  expiration  or  termination  of the Option,
unless otherwise specified by the Committee.

     (c) Partial  Exercise.  Each Option or installment  may be exercised at any
time or from time to time,  in whole or in part,  for up to the total  number of
shares with respect to which it is then exercisable.

     (d)  Acceleration  of  Vesting.  The  Committee  shall  have  the  right to
accelerate  the date that any  installment  of any Option  becomes  exercisable;
provided  that the  Committee  shall not,  without the  consent of an  optionee,
accelerate the permitted  exercise date of any installment of any Option granted
to any employee as an ISO if such acceleration  would violate the annual vesting
limitation  contained in Section  422(d) of the Code,  as described in paragraph
6(c).

     (e) Transfer of Shares Upon Exercise of the Non-Qualified  Options.  In the
event that the shares  received upon the exercise of the  Non-Qualified  Options
are registered  under the  Securities Act of 1933, as amended,  the Optionee may
not sell more than 50% of such  shares  within  the first  year  following  such
exercise,  and shall be  permitted  to sell all of such shares  thereafter.  The
certificate(s)   issued   reflecting   any  such  shares  shall  bear  a  legend
substantially as follows:

                                   -5-

<PAGE>

        "No more than 50% of the shares  represented by this  certificate may be
        sold within one year following the date of original  issue thereof.  All
        of such shares may be sold thereafter."

     9. Termination of Employment.  Unless otherwise specified in the agreements
relating to such ISOs,  if an ISO optionee  ceases to be employed by the Company
and all Related  Corporations  other than by reason of death or disability or as
otherwise specified in paragraph 10, no further  installments of his or her ISOs
shall become exercisable,  and his or her ISOs shall terminate on the earlier of
(a) ninety (90) days after the date of termination of his or her employment,  or
(b)  their  specified  expiration  dates.  For  purposes  of this  paragraph  9,
employment shall be considered as continuing  uninterrupted during any bona fide
leave of absence (such as those attributable to illness, military obligations or
governmental  service) provided that the period of such leave does not exceed 90
days  or,  if  longer,   any  period  during  which  such  optionee's  right  to
reemployment  is  guaranteed  by statute.  A bona fide leave of absence with the
written  approval of the Committee  shall not be considered an  interruption  of
employment   under  this  paragraph  9,  provided  that  such  written  approval
contractually  obligates the Company or any Related  Corporation to continue the
employment of the optionee  after the approved  period of absence.  ISOs granted
under the Plan shall not be affected by a change of  employment  within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. Nothing in the Plan shall be
deemed to give any  grantee  of any Stock  Right  the  right to be  retained  in
employment  or other service by the Company or any Related  Corporation  for any
period of time.

     10.          Death; Disability; Voluntary Termination; Breach.

     (a) Death.  If an ISO optionee ceases to be employed by the Company and all
Related  Corporations  by  reason  of his or her  death,  any ISO  owned by such
optionee may be exercised,  to the extent  otherwise  exercisable on the date of
death, by the estate,  personal  representative  or beneficiary who has acquired
the ISO by will or by the laws of descent and distribution, until the earlier of
(i) the specified  expiration date of the ISO or (ii) one (1) year from the date
of the optionee's death.

     (b) Disability. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his or her disability, such optionee shall
have the right to exercise any ISO held by him or her on the date of termination
of employment, for the number of shares for which he or she could have exercised
it on that date,  until the earlier of (i) the specified  expiration date of the
ISO or (ii) one (1) year  from the  date of the  termination  of the  optionee's
employment.  For the  purposes  of the Plan,  the term  "disability"  shall mean
"permanent and total  disability" as defined in Section  22(e)(3) of the Code or
any successor statute.

     (c) Voluntary  Termination;  Breach. If an ISO optionee  voluntarily leaves
the employ of the Company and all Related  Corporations or ceases to be employed
by the Company  and all Related  Corporations,  then,  in either such event,  in

                                   -6-

<PAGE>

addition  to  immediate  termination  of the  Option,  the  ISO  optionee  shall
automatically  forfeit all shares for which the  Company  has not yet  delivered
share  certificates  upon  refund by the Company of the  exercise  price of such
Option.  Notwithstanding  anything  herein  to the  contrary,  the  Company  may
withhold  delivery of share  certificates  pending the resolution of any inquiry
that could lead to a finding resulting in a forfeiture.

     11.  Assignability.  No Stock Right shall be assignable or  transferable by
the grantee except by will, by the laws of descent and  distribution  or, in the
case of  Non-Qualified  Options  only,  pursuant to a valid  domestic  relations
order.  Except as set forth in the previous  sentence,  during the lifetime of a
grantee each Stock Right shall be exercisable only by such grantee.

     12.  Terms  and  Conditions  of  Options.  Options  shall be  evidenced  by
instruments  (which need not be  identical)  in such forms as the  Committee may
from time to time  approve.  Such  instruments  shall  conform  to the terms and
conditions  set forth in  paragraphs  6 through 11 hereof and may  contain  such
other  provisions as the Committee deems  advisable  which are not  inconsistent
with the Plan,  including  restrictions  applicable  to  shares of Common  Stock
issuable  upon  exercise  of  Options.   The  Committee  may  specify  that  any
Non-Qualified  Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may  determine.  The Committee may from time to time confer  authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such  instruments.  The proper officers of
the Company are authorized and directed to take any and all action  necessary or
advisable from time to time to carry out the terms of such instruments.

     13.  Adjustments.  Upon the occurrence of any of the following  events,  an
optionee's  rights with respect to Options  granted to such  optionee  hereunder
shall  be  adjusted  as  hereinafter  provided,  unless  otherwise  specifically
provided in the written  agreement  between the optionee and the Company related
to such Option:

     (a) Stock  Dividends and Stock Splits.  If the shares of Common Stock shall
be subdivided  or combined into a greater or smaller  number of shares or if the
Company  shall  issue  any  shares of Common  Stock as a stock  dividend  on its
outstanding  Common Stock, the number of shares of Common Stock deliverable upon
the  exercise  of  Options  shall  be   appropriately   increased  or  decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.

     (b) Consolidations or Mergers. If the Company is to be consolidated with or
acquired by another entity in a merger,  sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"),  the Committee or the board of
directors of any entity assuming the  obligations of the Company  hereunder (the
"Successor  Board"),   shall,  as  to  outstanding  Options,   either  (i)  make
appropriate  provision for the continuation of such Options by substituting on a
equitable  basis for the  shares  then  subject to such  Options  either (A) the
consideration  payable with respect to the outstanding shares of Common Stock in
connection  with  the  Acquisition,   (B)  shares  of  stock  of  the  surviving

                                   -7-

<PAGE>

corporation  or  (C)  such  other   securities  as  the  Successor  Board  deems
appropriate,  the fair market value of which shall  approximate  the fair market
value  of the  shares  of  Common  Stock  subject  to such  Options  immediately
preceding the Acquisition; or (ii) upon written notice to the optionees, provide
that all Options must be  exercised,  to the extent then  exercisable,  within a
specified number of days of the date of such notice,  at the end of which period
the Options shall  terminate;  or (iii)  terminate all Options in exchange for a
cash payment equal to the excess of the fair market value of the shares  subject
to such  Options  (to the  extent  then  exercisable)  over the  exercise  price
thereof.

     (c) Recapitalization or Reorganization.  In the event of a recapitalization
or  reorganization  of the  Company  (other  than  a  transaction  described  in
subparagraph  (b)  above)  pursuant  to which  securities  of the  Company or of
another  corporation are issued with respect to the outstanding shares of Common
Stock,  an optionee  upon  exercising an Option shall be entitled to receive for
the purchase  price paid upon such exercise the  securities he or she would have
received if he or she had exercised  such Option prior to such  recapitalization
or reorganization.

     (d) Modification of ISO's.  Notwithstanding the foregoing,  any adjustments
made  pursuant to  subparagraphs  (a),  (b) or (c) with respect to ISOs shall be
made only after the Committee,  after  consulting  with counsel for the Company,
determines  whether such adjustments  would constitute a "modification"  of such
ISOs (as that term is  defined in  Section  424 of the Code) or would  cause any
adverse  tax  consequences  for the  holders  of  such  ISOs.  If the  Committee
determines that such  adjustments  made with respect to ISOs would  constitute a
modification  of such  ISOs or  would  cause  adverse  tax  consequences  to the
holders, it may refrain from making such adjustments.

     (e) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company,  each Option will terminate immediately prior to the
consummation  of such proposed  action or at such other time and subject to such
other conditions as shall be determined by the Committee.

     (f)  Issuances of  Securities.  Except as  expressly  provided  herein,  no
issuance  by the  Company  of  shares  of  stock  of any  class,  or  securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason  thereof  shall be made with respect to, the number or price of shares
subject to Options.  No adjustments  shall be made for dividends paid in cash or
in property other than securities of the Company.

     (g) Fractional  Shares. No fractional shares shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such  fractional
shares.

     (h)  Adjustments.  Upon the  happening  of any of the events  described  in
subparagraphs  (a), (b) or (c) above,  the class and aggregate  number of shares
set  forth  in  paragraph  4 hereof  that are  subject  to  Stock  Rights  which
previously have been or subsequently may be granted under the Plan shall also be
appropriately  adjusted to reflect the events  described in such  subparagraphs.

                                   -8-

<PAGE>

The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and,  subject to paragraph 2, its  determination
shall be conclusive.

     14.  Means of  Exercising  Options.  An Option (or any part or  installment
thereof)  shall be  exercised  by giving  written  notice to the  Company at its
principal  office  address,  or to such  transfer  agent  as the  Company  shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase  price thereof  either (a) in United  States  dollars in
cash or by check,  (b) at the discretion of the Committee,  through  delivery of
shares of Common  Stock  having a fair market  value equal as of the date of the
exercise to the cash exercise price of the Option,  (c) at the discretion of the
Committee,  by delivery of the grantee's personal recourse note bearing interest
payable  not less than  annually  at no less than 100% of the lowest  applicable
Federal rate, as defined in Section  1274(d) of the Code,  (d) at the discretion
of the Committee and consistent with applicable law,  through the delivery of an
assignment  to the Company of a sufficient  amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company,  which sale shall
be at  the  participant's  direction  at the  time  of  exercise,  or (e) at the
discretion of the Committee,  by any combination of (a), (b), (c) and (d) above.
If the  Committee  exercises its  discretion  to permit  payment of the exercise
price of an ISO by means of the methods set forth in clauses  (b),  (c),  (d) or
(e) of the preceding sentence,  such discretion shall be exercised in writing at
the time of the grant of the ISO in question.  The holder of an Option shall not
have the rights of a  shareholder  with  respect  to the shares  covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares.  Except as  expressly  provided  above in  paragraph  13 with respect to
changes in capitalization  and stock dividends,  no adjustment shall be made for
dividends  or similar  rights for which the record  date is before the date such
stock  certificate  is  issued.  In the  absence  of an  effective  registration
statement  covering the shares issuable upon exercise of any Stock Rights,  such
notice may, at the option of the  Committee,  also include a statement  that the
person  exercising  the  Stock  Rights  is  purchasing  the  Common  Stock as an
investment and not with a view to the sale or distribution of any of such Common
Stock, and the holder's agreement not to sell any Common Stock received upon the
exercise of the Stock Rights except either (i) in compliance with the Securities
Act of 1933, as amended  (provided that the Company shall be under no obligation
to register either the Plan, or any securities obtained by the Optionee pursuant
thereto,  with the Securities and Exchange  Commission),  or (ii) with the prior
written approval of the Company.

     15.  Term and  Amendment  of Plan.  This Plan was  adopted  by the Board on
August 25, 1998,  subject,  with respect to the validation of ISOs granted under
the Plan, to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders, or in lieu thereof, by written consent. If the approval
of  stockholders  is not obtained on or prior to August 24, 1999,  any grants of
ISOs  under the Plan made prior to that date will be  rescinded.  The Plan shall
expire  at  the  end of the  day on  August  24,  2008,  (except  as to  Options
outstanding  on that  date).  Subject to the  provisions  of  paragraph 5 above,
Options may be granted under the Plan prior to the date of stockholder  approval
of the Plan.  The Board may  terminate  or amend the Plan in any  respect at any

                                   -9-

<PAGE>

time, except that,  without the approval of the stockholders  obtained within 12
months  before or after the Board  adopts a  resolution  authorizing  any of the
following  actions:  (a) the total number of shares that may be issued under the
Plan may not be increased (except as provided in paragraph 4(a) or by adjustment
pursuant to paragraph 13); (b) the benefits  accruing to participants  under the
Plan may not be materially increased; (c) the requirements as to eligibility for
participation in the Plan may not be materially modified;  (d) the provisions of
paragraph 3 regarding  eligibility  for grants of ISOs may not be modified;  (e)
the  provisions of paragraph  6(b)  regarding the exercise price at which shares
may be  offered  pursuant  to ISOs may not be  modified  (except  by  adjustment
pursuant  to  paragraph  13);  (f) the  expiration  date of the  Plan may not be
extended;  and (g) the Board may not take any action  which would cause the Plan
to fail to  comply  with  Rule  16b-3.  Except  as  otherwise  provided  in this
paragraph  15, in no event may  action  of the  Board or  stockholders  alter or
impair the rights of a grantee, without such grantee's consent, under any Option
previously granted to such grantee.

     16.  Application  of Funds.  The proceeds  received by the Company from the
sale of shares  pursuant to Options granted and Purchases  authorized  under the
Plan shall be used for general corporate purposes.

     17.  Notice to Company of  Disqualifying  Disposition.  By accepting an ISO
granted under the Plan,  each  optionee  agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying  Disposition (as described
in Sections  421,  422 and 424 of the Code and  regulations  thereunder)  of any
stock  acquired  pursuant to the  exercise  of ISOs  granted  under the Plan.  A
Disqualifying  Disposition is generally any  disposition  occurring on or before
the later of (a) the date two years  following  the date the ISO was  granted or
(b) the date one year following the date the ISO was exercised.

     18.  Withholding  of  Additional  Income  Taxes.  Upon  the  exercise  of a
Non-Qualified  Option, the grant of an Award, the making of a Purchase of Common
Stock  for less  than its fair  market  value,  the  making  of a  Disqualifying
Disposition  (as defined in paragraph 17), the vesting or transfer of restricted
stock or  securities  acquired on the  exercise of an Option  hereunder,  or the
making  of a  distribution  or  other  payment  with  respect  to such  stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation  includable in gross income.  The Committee in its  discretion  may
condition (i) the exercise of an Option,  (ii) the grant of an Award,  (iii) the
making of a Purchase  of Common  Stock for less than its fair market  value,  or
(iv) the vesting or transferability  of restricted stock or securities  acquired
by exercising an Option,  on the grantee's making  satisfactory  arrangement for
such withholding. Such arrangement may include payment by the grantee in cash or
by check of the amount of the  withholding  taxes or, at the  discretion  of the
Committee,  by the grantee's  delivery of previously held shares of Common Stock
or the withholding  from the shares of Common Stock otherwise  deliverable  upon
exercise of a Option shares  having an aggregate  fair market value equal to the
amount of such withholding taxes.

     19. Governmental  Regulation.  The Company's obligation to sell and deliver
shares of the Common  Stock  under this Plan is subject to the  approval  of any
governmental  authority required in connection with the authorization,  issuance

                                   -10-


<PAGE>

or sale of such shares.  Government  regulations  may impose  reporting or other
obligations  on the Company with respect to the Plan.  For example,  the Company
may be required  to send tax  information  statements  to  employees  and former
employees  that exercise ISOs under the Plan, and the Company may be required to
file tax  information  returns  reporting  the income  received  by  grantees of
Options in connection with the Plan.

     20.  Governing  Law.  The  validity  and  construction  of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of Delaware.

                                   -11-

<PAGE>

                              EXHIBIT 10(f)

                           EMPLOYMENT AGREEMENT


     This EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of the
1st day of April,  1998, by and between  WARRANTECH  CORPORATION,  a corporation
organized under the laws of the State of Delaware (the "Company"),  and JOEL SAN
ANTONIO (the "Executive")

                                               W I T N E S S E T H:

     WHEREAS,  the Executive has been  instrumental  in the  development  of the
Company since its inception and the Company  desires to continue the services of
the Executive; and

     WHEREAS,  the parties are desirous of entering into this Agreement in order
to ensure the Company of the valuable services of the Executive  pursuant to the
terms and conditions contained herein;

     NOW,  THEREFORE,  in  consideration  of the premises  and mutual  covenants
contained herein and for other good and valuable consideration,  the receipt and
sufficiency of which are hereby mutually acknowledged,  the parties hereby agree
as follows:

     1.           EMPLOYMENT CONDITIONS

     (a)  Effective  upon the  commencement  of the Term  hereof (as  defined in
Section 2), the Company  hereby  employs the Executive as its Chairman and Chief
Executive Officer and the Executive hereby accepts such employment, on the terms
and conditions  hereinafter set forth. As Chairman and Chief Executive  Officer,
the  Executive  shall report only to the Board of  Directors of the Company.  In
addition,  for as long as the  Executive  shall be employed by the Company,  the
Executive  shall be  nominated  for  election to the Board of  Directors  of the
Company, and the Company shall use its best efforts to cause the election of the
Executive as Director. Each of the parties hereto agrees that the failure of the
Executive  to be duly and validly  elected as a Director  (for any reason  other
than  refusal of the  Executive  to stand for  election or  re-election)  or any
removal of the Executive as a Director,  shall  constitute a material  breach of
this Agreement by the Company.


<PAGE>


     2.           TERM

     The initial Term of the  Executive's  engagement  hereunder  (the  "Initial
Term") shall  commence as of April 1, 1998 (the  "Commencement  Date") and shall
terminate on March 31,  2003.  Upon the  expiration  of the Initial  Term,  this
Agreement shall  automatically renew for successive periods of one-year (each, a
"Renewal Term" and collectively with the Initial Term, the "Term") unless either
party shall give the other written notice of  non-renewal  not less than 90 days
prior to the expiration of the Initial Term or any Renewal Term. The Executive's
base salary  under any Renewal Term shall be not less than the final base salary
in effect at the end of the prior term

     3.           DUTIES OF EXECUTIVE

     (a) The Executive shall be the Chief Executive  Officer of the Company (and
any and all of its  subsidiaries)  and shall  perform  the  services  and duties
attendant to such  position and attendant to the office of Chairman as set forth
in this Agreement or in the By-Laws of the Company, subject to the direction and
supervision  of the Board of  Directors  of the  Company.  As Chairman and Chief
Executive  Officer of the Company,  the Executive shall report only to the Board
of  Directors of the Company,  and shall have powers and  authority  superior to
those of any officer or employee of the Company or any subsidiary thereof.

     (b) Anything  contained in Section 3(a) hereof or in any other provision of
this  Agreement to the contrary  notwithstanding,  nothing shall be construed to
limit the ability of the  Executive  to serve on the Boards of  Directors  or as
Chairman   of  such   other   corporations,   trade   associations,   charitable
organizations  or other entities as the Executive shall from  time-to-time  deem
appropriate,  and to engage in such other activities as the Executive shall deem
not to be in conflict with his duties to the Company.

     4.           COMPENSATION

     (a) Base Annual Salary.  Subject to any other  provision of this Agreement,
the  Executive  shall receive a base annual salary in the amount of $585,000 per
annum (which amount shall be payable effective as of April 1, 1998),  subject to
adjustment as hereinafter provided (the "Base Salary Amount"),  payable in equal
bi-weekly  payments (less applicable  withholding  taxes) in accordance with the
usual  payroll  practices  of the  Company.  The  Base  Salary  Amount  shall be
increased, effective as of January 1 of each year, by an amount to be determined

                                   -2-

<PAGE>

by the Board of Directors,  which  percentage  increase shall in any event be at
least equal to five percent (5%).

     (b)  Cash  Incentive  Bonus.  The  Executive  shall be  entitled  to a cash
incentive  bonus in an amount  equal to two percent  (2%) of the  after-tax  net
income  of  the  Company,  determined  in  accordance  with  generally  accepted
accounting  principles  ("GAAP").  The  calculation  and  distribution  of  such
incentive  bonus amount shall be made  quarterly,  within  forty-five  (45) days
after  the  conclusion  of  each  calendar   quarter.   Such   calculations  and
distributions  shall be cumulative within each fiscal year of the Company,  such
that if at the  conclusion  of any fiscal year it is  determined  that the bonus
award previously distributed hereunder exceeds (or falls short of) the amount to
which the Executive  shall be entitled,  the Company shall  promptly  notify the
Executive  of the amount of such excess (or  arrearage) . The amount of any such
arrearage  shall be paid by the Company to the  Executive in a lump sum,  within
ten (10) days  following  the  computation  of such  amount.  The amount of such
excess  payment,  if any,  shall be refunded by the  Executive  to the  Company,
provided, however, that such repayment shall be accomplished by reducing each of
the four quarterly  incentive bonus payments in the succeeding year by an amount
equal to twenty-five (25%) percent of such overpayment. Notwithstanding anything
contained herein to the contrary,  in any year during or after which a Change in
Control (as  hereinafter  defined) shall have  occurred,  the amount of the cash
incentive  bonus payable  pursuant to this paragraph 4(b) shall not be less than
the amount of the cash  incentive  bonus paid during the  immediately  preceding
year.

     5.           EMPLOYEE BENEFITS

     (a) In  addition  to the  compensation  and  other  benefits  provided  for
elsewhere in this Agreement,  the Executive shall be entitled to eight (8) weeks
of paid  vacation  during  each  year,  as well as to  health,  life  insurance,
pension,  supplemental  pension,  savings,  stock award,  stock option and other
employment benefits which are provided to other executive officers and employees
of the Company,  to be  reimbursed  by the Company for  ordinary  and  necessary
business  expenses  incurred by the Executive and to participate in all employee
benefit  plans of the Company as in effect on the date hereof  and/or as adopted
or modified  from  time-to-time  after the date  hereof.  The Company  shall not
terminate  any such  employee  benefits or employee  benefit  plans which are in
effect on the date hereof.

                                   -3-

<PAGE>

     (b)  In  addition  to any  other  life  insurance  maintained  pursuant  to
paragraph  5(a) above,  the Company shall continue to maintain in full force and
effect for the  benefit of the  Executive,  the "split  dollar"  life  insurance
arrangement  presently in effect with  respect to the two policies  insuring the
Executive having policy numbers 1042887 and 1026492.

     (c) In addition to any other  insurance  maintained  pursuant to  paragraph
5(a) above, the Company shall maintain,  in full and effect,  for the benefit of
the Executive,  long term disability insurance, on terms reasonably satisfactory
to the Executive.

     (d) The Company  shall provide the  Executive  with an  automobile  expense
allowance of not less than $12,000 per year.

     (e) Promptly following the execution of this Agreement, the Company and the
Executive shall enter into an option agreement  memorializing the previous grant
by the  Company  to  Executive  of  options to  purchase  400,000  shares of the
Company's  common  stock,  par value .007 per share (the  "Common  Stock") at an
exercise  price of $3.37 per share,  as more fully  described in the  resolution
adopted  by  the  Board  of  Directors  of  the  Company  on  August  28,  1998.
Notwithstanding  anything contained herein to the contrary  (including,  without
limitation,  pursuant to  paragraph 9 hereof) all of such  options and any other
options granted to the Executive pursuant to any other Agreement or benefit plan
shall become 100% vested without any further action on the part of the Executive
upon the  occurrence  of any Change in Control (as  hereinafter  defined) of the
Company.

     6.           COUNSEL FEES AND INDEMNIFICATION

     The Company shall pay, or reimburse to the Executive, the fees and expenses
of personal counsel for their professional services rendered to the Executive in
connection  with this  Employment  Agreement and any other  agreement or benefit
plan entered into or adopted in connection  herewith and matters  related hereto
and thereto,  including in connection with any  enforcement  hereof and thereof.
Without limiting the foregoing, in the event that (i) the Company terminates, or
seeks  to  terminate  this  Agreement,   alleging  as  justification   for  such
termination  "good cause" as specified in Section 8(b) hereof and the  Executive
disputes such termination or attempted termination, or (ii) the Executive elects
to  terminate  this  Agreement  pursuant to Section  8(c) hereof and the Company
disputes its  obligations  pursuant to Section 8 or any other  provision of this
Agreement;  the Company shall pay, or reimburse to the Executive, all reasonable

                              -4-

<PAGE>

costs incurred by the Executive in such dispute,  including  attorneys' fees and
costs.

     7.           REPRESENTATIONS. WARRANTIES AND AGREEMENTS OF THE COMPANY

     (a) The Company  hereby  represents  and warrants to, and agrees with,  the
Executive as follows

     (i) the Executive is and shall continue to be covered and insured up to the
     maximum  limits  provided by all insurance  which the Company  maintains to
     indemnify  its directors and officers (and to indemnify the Company for any
     obligations which it incurs as a result of its undertaking to indemnify its
     officers and directors);

     (ii) that the  Company  will  continue to maintain in full force and effect
     such insurance,  at not less than its present limits,  in effect throughout
     the Term of this Agreement (or any renewal or continuation hereof);

     (iii)  this  Agreement,  and  each  of the  terms  and  provisions  hereof,
     including,  without  limitation the  undertakings  with respect to payment,
     indemnification  and maintenance of insurance set forth in Sections 6 and 7
     hereof,  do not violate or conflict with any provisions of the  Certificate
     of Incorporation and Bylaws of the Company,  (B) any agreement by which the
     Company is bound, or (C) any federal,  state or local law, rule, regulation
     or judicial  order;  this  Agreement has been duly and validly  authorized,
     executed and  delivered by the Company,  and is a legal,  valid and binding
     obligation  of the Company,  enforceable  against the Company in accordance
     with its terms;

     (iv) the Company has all power and  authority  necessary to enter into this
     Agreement in accordance with its terms;

     (v) this Agreement, and the employment of the Executive by the Company have
     been duly approved by the Board of Directors of the Company;

     (vi)  during the Term  hereof,  the Company  will not change the  corporate
     title  of the  Executive  or alter  or  diminish  the  powers,  duties  and
     authority of the Executive in his position as Chairman and Chief  Executive
     Officer of the Company (or any  subsidiary  of the  Company),  nor will the
     Company  change by more than  twenty-five  (25) miles the  location  of the

                                   -5-

<PAGE>

     offices in which Executive's services are to be performed (i.e.,  Stamford,
     Connecticut), or take any other action which would constitute "Good Reason"
     as defined in Section 8(c) hereof if such action were to occur  following a
     "Change in Control" as defined in Section 8(c) hereof;

     (vii) the Company  shall  indemnify  and hold harmless the Executive to the
     fullest  extent  permitted  by  applicable  law.  To the  extent  that  the
     Company's Certificate of Incorporation,  By-laws,  resolutions of Company's
     Board of Directors or stockholders,  or other corporate acts, agreements or
     instruments  of the Company,  each as in effect on the date hereof,  confer
     additional or specific rights relating to  indemnification,  advancement of
     expenses of directors and officers,  agents or others,  the Executive shall
     continue to be entitled to such rights,  which rights may not be diminished
     by subsequent modification or amendment; and

     (viii) each of the persons executing this Agreement hereby acknowledges and
     agrees that, in entering into this  Agreement,  the Executive has relied on
     each of the  representations  and  warranties and agreements of the Company
     contained  herein and  failure of the Company to comply with or perform any
     of such  representations,  warranties or agreements  shall  constitute  the
     material breach by the Company of this Agreement.

     8.           TERMINATION

         This Agreement may be terminated only as follows:

     (a)  Termination  by the Company Other than for Good Cause.  If the Company
shall  terminate the employment of the Executive  during the Term other than for
"good cause", as defined herein, then the Executive shall be entitled to receive
the following:

     (i)  payment  of cash in an  amount  equal to the  greater  of (A) the Base
     Salary  Amount  (as in  effect  on the  date of such  termination)  for the
     remainder of the Term or (B) three year's Base Salary  Amount (as in effect
     on the date of such termination);

     (ii) the bonus amount payable pursuant to Section 4(b) hereof, which amount
     shall be pro rated in the case of any partial period; and

     (iii)any and all unvested stock options, restricted stock awards or similar
     items  subject to future  vesting  shall  immediately  become  100%  vested
     without any further action on the part of the Executive.

                                        -6-

<PAGE>

     (b)  Termination  by the  Company  for Good  Cause.  Except as  provided in
Section 8(d) below,  this Agreement may only be terminated by the Company,  upon
written notice to the Executive,  for "good cause" as hereinafter  defined.  For
purposes of this Section 8(b) "good cause" shall mean the willful and  continued
failure of the  Executive  to perform his duties or the willful  engaging by the
Executive in illegal  conduct or gross  misconduct  materially  injurious to the
Company.  If the Company  desires to terminate  the  employment of the Executive
pursuant  to this  Section  8(b) the  Company  shall  first  send  notice to the
Executive describing the action constituting the act of breach or default and on
receipt  thereof the Executive shall have thirty (30) days in which to cure such
breach or default.  Upon  termination in accordance  with the provisions of this
Section  8(b)  the  Company  shall  be  obligated  to pay to the  Executive  the
annualized  Base Salary Amount only through the period ending on the last day of
the month in which  such  termination  occurs,  plus such  other  amounts as are
payable to the Executive pursuant to this Agreement and which have accrued as of
the  last day of the  month in which  such  termination  occurs  (including  the
pro-rating of amounts in respect of any partial period)

     (c)  Termination by the Executive by  Resignation  upon Breach or Change in
Control.  (i) This  Agreement may be terminated by the  Executive,  upon written
notice to the Company,

     (A) for breach by the Company of any of the terms or  provisions  hereof or
     any other  agreement or benefit plan entered into or adopted in  connection
     herewith,

     (B) during the "Window Period" (as hereinafter defined) following a "Change
     in Control" of the Company as hereinafter defined, or

     (C) upon the occurrence of "Good Reason" (as hereinafter defined) following
     a "Change in Control" of the Company as hereinafter defined.

Upon any such  termination in accordance  with this Section 8 (c), the Executive
shall be entitled to receive  payments in the same amounts and  acceleration  of
vesting or other benefit as would be payable or would occur upon  termination of
the  Executive by the Company other than for "good cause" as provided in Section
8(a) hereof.

                                   -7-

<PAGE>

     (ii) For purposes of this  Agreement,  a "Change in Control" of the Company
shall mean any of the following events:

     (A) An acquisition  (whether directly from the Company or otherwise) of any
     voting securities of the Company (the "Voting  Securities") by any "Person"
     (as the term person is used for  purposes of Section 13 (d) or 14(d) of the
     Securities  and Exchange Act of 1934,  as amended (the "1934 Act"))  (other
     than the Executive or an entity  controlled by the Executive),  immediately
     after which such Person has "Beneficial  Ownership"  (within the meaning of
     Rule 13d-3  promulgated  under the 1934 Act) of forty percent (40%) or more
     of the  combined  voting power of the  Company's  then  outstanding  Voting
     Securities.

     (B) The  individuals  who, as of the date hereof,  are members of the Board
     (the "Incumbent Board"),  cease for any reason to constitute at least sixty
     percent (60%) of the Board;  provided,  however,  that if the election,  or
     nomination for election by the Company's stockholders,  of any new director
     was  approved by a vote of at least sixty  percent  (60%) of the  Incumbent
     Board,  such  new  director  shall,  for  purposes  of this  Agreement,  be
     considered as a member of the Incumbent Board; provided,  further, however,
     that no individual  shall be considered a member of the Incumbent  Board if
     such individual initially assumed office as a result of either an actual or
     threatened  "Election  Contest" (as  described  in Rule 14a-ll  promulgated
     under the 1934 Act) or other actual or threatened  solicitation  of proxies
     or  consents  by or on  behalf of a Person  other  than the Board (a "Proxy
     Contest")  including by reason of any agreement intended to avoid or settle
     any Election Contest or Proxy Contest; or

     (C) Approval by the Board of Directors or stockholders  of the Company,  or
     execution  by  the  Company  of  any  agreement  with  respect  to,  or the
     consummation of:

     (1) A merger, consolidation or reorganization involving the Company;

     (2)  A  liquidation  or  dissolution  of  or  appointment  of  a  receiver,
     rehabilitator, conservator or similar person for, the Company;

                                   -8-

<PAGE>

                               or

     (3) An agreement for the sale or other  disposition of all or substantially
     all of the assets of the Company to any Person  (other than a transfer to a
     Subsidiary).

     (D) Any other  change in  "control"  of the  Company.  For  purposes of the
     immediately  preceding sentence,  the term "control" shall have the meaning
     ascribed  thereto  pursuant to Rule 405 of the Rules and Regulations of the
     Securities and Exchange Commission  promulgated  pursuant to the Securities
     Act of 1933, as amended.

     (iii) Notwithstanding anything contained in this Agreement to the contrary,
if the Executive's employment is terminated prior to a Change in Control and the
Executive  reasonably  demonstrates that such termination (i) was at the request
of a third  party who has  indicated  an  intention  or taken  steps  reasonably
calculated to effect a Change in Control and who effectuates a Change in Control
(a  "Third  Party")  or  (ii)  otherwise  occurred  in  connection  with,  or in
anticipation  of,  a Change  in  Control  which  actually  occurs,  then for all
purposes of this Agreement,  the date of a Change in Control with respect to the
Executive shall mean the date immediately  prior to the date of such termination
of the Executive's employment

     (iv) In order to provide the Executive with an incentive to remain with the
Company for an appropriate period of transition following a Change in Control of
the Company,  for purposes of this  Agreement  the "Window  Period" shall be the
ninety (90) day period  beginning  on the date which is six (6) months after the
date of any Change in Control of the  Company;  provided,  however,  that if any
such Change in Control shall occur within the last six (6) months of the Term of
this Agreement,  the Window Period shall be the last forty-five (45) days of the
Term hereof (or such lesser period as shall remain in the Term hereof  following
such  Change in  Control);  and  provided,  further,  that if any such Change in
Control  shall  occur  during  the  last  six  (6)  months  of the  Term of this
Agreement, unless the Executive shall have given written notice to the contrary,
the Executive shall without further action automatically be deemed to have given
the written  notice  specified in Section 8(c) (i) hereof on the last day of the
Term hereof (unless such notice shall have been  previously  given) and shall be
entitled to receive the payments specified in such Section 8(c) (i)

                              -9-

<PAGE>

     (v) For purposes of this Agreement, "Good Reason" shall mean the occurrence
after a Change in  Control  of any of the  events  or  conditions  described  in
subsections (A) through (G) hereof:

     (A) a change in the Executive's status, title, position or responsibilities
     (including reporting responsibilities) which, in the Executive's reasonable
     judgment,  represents an adverse change from his status, title, position or
     responsibilities as in effect at any time within ninety (90) days preceding
     the date of a Change in Control or at any time  thereafter;  the assignment
     to  the  Executive  of  any  duties  or  responsibilities   which,  in  the
     Executive's  reasonable judgment,  are inconsistent with his status, title,
     position or  responsibilities  as in effect at any time within  ninety (90)
     days  preceding the date of a Change in Control or at any time  thereafter;
     or any removal of the Executive from or failure to reappoint or reelect him
     to any of such offices or positions;

     (B) any failure to award the Executive bonus payments  and/or  increases in
     Base Annual Salary in a manner  consistent with the practice of the Company
     prior to any such Change in Control;

     (C) the Company's  requiring the Executive to be based at any place outside
     a 25-mile radius from Stamford, Connecticut, except for reasonably required
     travel on the Company's business  (including such travel to Euless,  Texas)
     which is not materially greater than such travel  requirements prior to the
     Change in Control;

     (D) the failure by the Company to (a) continue in effect (without reduction
     in benefit level, and/or reward opportunities) any material compensation or
     employee benefit plan in which the Executive was  participating at any time
     within ninety (90) days preceding the date of a Change in Control or at any
     time  thereafter,  or (b)  provide  the  Executive  with  compensation  and
     benefits,  in the  aggregate,  at least  equal (in terms of benefit  levels
     and/or  reward  opportunities)  to those  provided  for  under  each  other
     employee  benefit  plan,  program and practice in which the  Executive  was
     participating  at any time within ninety (90) days  preceding the date of a
     Change in Control or at any time thereafter;

                              -10-
<PAGE>

     (E) the insolvency or the filing (by any party, including the Company) of a
     petition  for  bankruptcy  or  similar  insolvency  of the  Company,  which
     petition is not dismissed within sixty (60) days;

     (F) any material breach by the Company of any provision of this Agreement;

     (G) any  purported  termination  of the  Executive's  employment  for "good
     cause" by the Company  which does not comply with the terms of Section 8(b)
     hereof.

     (d)  Termination  by the Company upon  Disability  of the  Executive.  This
Agreement may, at the option of the Company, be terminated by the Company,  upon
thirty  (30)  day's  prior  written  notice to the  Executive  (or his  personal
representative)  , upon the Disability of the Executive as hereinafter  defined.
For purposes of this Section 8(d) "Disability" shall mean if the Executive shall
become physically or mentally disabled, whether totally or partially, so that he
is unable to perform substantially all of his services hereunder for a period of
twelve (12)  consecutive  months.  Upon any such  termination in accordance with
this Section 8 (d), the Executive shall be entitled to receive  payments of Base
Salary Amount (as in effect on the date of such termination), together with such
increases as would be applicable pursuant to Section 4(a) hereof for a period of
twelve (12) months from the effective date of such termination. In addition, the
Executive  shall be entitled to such other  benefits as would be available  upon
termination  of the  Executive  by the  Company  other than for "good  cause" as
provided in subsections  (ii) and (iii) of Section 8(a) hereof.  Notwithstanding
anything  contained  herein to the contrary,  the cash payment pursuant to which
the  Executive  shall be  entitled  pursuant  to this  Section  8(d)  during the
twelve-month   period   following  any  such   termination   shall  be  reduced,
dollar-for-dollar  by the amount of any disability insurance payment received by
the Executive  during such period pursuant to any disability  insurance  policy,
the entire premium of which was paid for by the Company.

     (e) Termination by the Company upon Death of the Executive.  This Agreement
shall  terminate  upon  death of the  Executive.  Upon any such  termination  in
accordance   with  this  Section  8  (e)  ,  the   Executive  (or  his  personal
representative)  shall be entitled to receive payment of cash in an amount equal
to  one  year's  Base  Salary  Amount  (as in  effect  upon  the  date  of  such
termination)  plus  the pro  rata  portion  of any  bonus  payable  pursuant  to
paragraph 4(b) hereof through the date of such termination.

                                   -11-

<PAGE>

     (f) Payment Terms.  Payment of any amounts to which the Executive  shall be
entitled  pursuant to the  provisions  of this  Section 8 shall be made no later
than ten (10) days  following  receipt  of notice  of  termination  or the event
giving rise to such termination.  Any amounts payable pursuant to this Section 8
which are not made within the period  specified  in this Section 8(f) shall bear
interest  at a rate  equal  to the  lesser  of (i)  the  maximum  interest  rate
allowable  pursuant to applicable law or (ii) five points above the "prime rate"
of interest as published from  time-to-time  in the Eastern  Edition of the Wall
Street Journal.

     (g) Benefits.  In the event the Executive's  employment with the Company is
terminated  for any reason prior to the end of the Term,  the  Executive and his
dependents,  if any,  will  continue  to  participate  in any group  health plan
sponsored by the Company in which the Executive was participating on the date of
such  termination,  at no  cost  to the  Executive  or his  dependents,  for the
remainder of the Term.  Thereafter,  the Executive and his  dependents,  if any,
shall be entitled to elect  continuation  health coverage under Section 4980B of
the  Internal  Revenue Code of 1986,  as amended,  or any  successor  provisions
thereto,  to the extent permitted by applicable law. In addition to any payments
to which the  Executive  may be  entitled  upon  termination  of his  Employment
pursuant to any provision of this Agreement,  the Executive shall be entitled to
any benefits under any life insurance,  pension,  supplemental pension, savings,
or other employee  benefit plan in which the Executive was  participating on the
date of any such termination.

     9.           LIMITATION ON PAYMENTS

     (a) In the  event  that  Deloitte  &  Touche,  LLP,  or any  successor  tax
accountants  to the  Company  (the  "Auditors")  determine  that any  payment or
distribution by the Company to or for the benefit of the Executive, whether paid
or payable  (or  distributed  or  distributable)  pursuant  to the terms of this
Agreement or otherwise (a "Payment"),  would be nondeductible by the Company for
federal income tax purposes because of section 280G of the Internal Revenue Code
of 1986,  as amended  (the  "Code"),  then the  aggregate  present  value of the
amounts payable or distributable to or for the benefit of the Executive pursuant
to this Agreement  (the  "Agreement  Payments")  shall be reduced (but not below
zero) to the Reduced Amount. For purposes of this Section 9, the "Reduced Amount
shall be an amount  expressed in present  value which  maximizes  the  aggregate
present  value  of  Agreement   Payments  without  causing  any  Payment  to  be
nondeductible by the Company because of section 280G of the Code.

                                        -12-

<PAGE>
     (b) If the Auditors  determine that any Payment would be  nondeductible  by
the Company because of section 280G of the Code, then the Company shall promptly
give the Executive notice to that effect and a copy of the detailed  calculation
thereof and of the Reduced Amount, and the Executive may then elect, in his sole
discretion,  which and how much of the Agreement Payments shall be eliminated or
reduced  (as long as after such  election  the  aggregate  present  value of the
Agreement  Payments  equals the Reduced  Amount) and shall advise the Company in
writing of his  election  within 10 days of his  receipt  of notice.  If no such
election is made by the Executive  within such 10-day  period,  then the Company
may elect which and how much of the  Agreement  Payments  shall be eliminated or
reduced  (as long as after such  election  the  aggregate  present  value of the
Agreement  Payments  equals the Reduced  Amount) and shall  notify the  Employee
promptly of such  election.  For purposes of this Section 9, present value shall
be  determined  in  accordance  with  section  280G(d)  (4)  of  the  Code.  All
determinations  made by the Auditors  under this Section 9 shall be binding upon
the  Company  and  the  Executive  and  shall  be  made  within  60  days of the
Executive's termination of employment. As promptly as practicable following such
determination  and  the  elections  hereunder,  the  Company  shall  pay  to  or
distribute to or for the benefit of the  Executive  such amounts as are then due
to him under this  Agreement  and shall  promptly pay to or  distribute  for the
benefit of the  Executive  in the future such amounts as become due to him under
this Agreement.

    (c) As a result of the uncertainty in the application of section 280G of the
Code at the time of the initial  determination by the Auditors hereunder,  it is
possible that Agreement Payments will have been made by the Company which should
not have been made (an  "Overpayment")  or that  additional  Agreement  Payments
which  will  not  have  been  made by the  Company  could  have  been  made  (an
"Underpayment"),  consistent  in each case with the  calculation  of the Reduced
Amount hereunder. In the event that the Auditors,  based upon the assertion of a
deficiency by the Internal  Revenue Service against the Company or the Executive
which the Auditors believe has a high probability of success,  determine that an
Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the  Executive  which he shall  repay to the  Company,  together  with
interest at the applicable  federal rate provided for in section 7872 (f) (2) of
the Code; provided, however, that no amount shall be payable by the Executive to
the Company if and to the extent that such payment.  would not reduce the amount
which is subject to taxation  under  section 4999 of the Code. In the event that
the Auditors,  based upon controlling precedent,  determine that an Underpayment

                              -13-

<PAGE>

has occurred,  such Underpayment shall promptly be paid by the Company to or for
the benefit of the Executive,  together with interest at the applicable  federal
rate provided for in section 7872(f) (2) (A) of the Code.

     10.          WAIVER

     No  waiver  of any  provision  of this  Agreement  shall be  effective  and
enforceable  unless set forth in a written  instrument  executed  by the parties
hereto.  No waiver of any provision of this Agreement  shall affect the validity
or  enforceability,  or  constitute  a waiver  of  future  enforcement,  of such
provision or of any other provision of this Agreement

     11.          GOVERNING LAW

     This  Agreement  shall in all  respects  be  subject  to,  governed  by and
construed in accordance with the laws of the State of Connecticut

     12.          SEVERABILITY

     The invalidity or unenforceability of any provision of this Agreement shall
not in any manner  whatsoever affect the validity or enforceability of any other
provision hereof. Whenever possible, this Agreement shall be construed to permit
the full enforcement of each provision hereof, and any declaration of invalidity
or  unenforceability  with regard to any provision  hereof shall be construed to
minimize the effect of such declaration.

     13.          NOTICES

     All notices  required or permitted  hereunder shall be in writing and shall
be sufficiently  given if: (a) hand delivered (in which case the notice shall be
effective upon delivery) ; (b) telecopied,  provided that in such case a copy of
such notice shall be concurrently  sent by registered or certified mail,  return
receipt requested,  postage prepaid (in which case the notice shall be effective
one day following  dispatch);  (c) delivered by Express Mail, Federal Express or
other nationally  recognized overnight courier service (in which case the notice
shall be effective  one business day  following  dispatch);  or (d) delivered or
mailed by  registered  or certified  mail,  return  receipt  requested,  postage
prepaid  (in which  case the notice  shall be  effective  three  days  following
dispatch),  to the parties at the following addresses and/or telecopier numbers,
or to such other address or number as a party shall specify by written notice to
the others in accordance with this Section.

                                   -14-

<PAGE>

                                                If to the Company:

                                                     Warrantech Corporation
                                                     300 Atlantic Street
                                                     Stamford, Connecticut 06901
                                                     Attn:   President
                                                     Telecopier No.:203-327-1587


                                                with a copy to:

                                                    Ralph A. Siciliano, Esq.
                                                    Newman, Tannenbaum, Helpern,
                                                    Syracuse & Hirschtritt, LLP
                                                    900 Third Avenue
                                                    New York, New York 10022
                                                    Telecopier No.: 212-371-1084

                                                If to Executive:

                                                    Joel San Antonio
                                                    56 North Stanwich Road
                                                    Greenwich, Connecticut 06831

                                                with a copy to:

                                                    Kenneth E. Thompson, Esq.
                                                    McCarter & English, LLP
                                                    Four Gateway Center
                                                    100 Mulberry Street
                                                    Newark, NJ  07102
                                                    Telecopier No. :973-624-7070

     14.          DEATH OR DISABILITY

     In the event of the death or disability of the  Executive,  the  Executive,
his  estate  or his  designated  beneficiaries  shall  be  entitled  to the same
compensation, rights and benefits as are referred to in Sections 8 and 9 hereof.

     15.          BINDING EFFECT

     This  Agreement  together  with any  written  amendments  hereto,  shall be
binding  upon and shall  inure to the  benefit of the  parties  hereto and their
respective successors,  assigns, heirs and personal  representatives.  Except as
otherwise  provided  in Section 14 hereof,  this  Agreement  is not  intended to

                              -15

<PAGE>

confer any rights or remedies upon any person or entity other than the Executive
and the Company

     16.          NO MITIGATION OF DAMAGES: NO SET-OFF

     In the event of any  termination of this Agreement by either the Company or
the  Executive  for any  reason,  the  Executive  shall not be  required to seek
comparable  employment  so as to  minimize  any  obligation  of the  Company  to
compensate  the  Executive  for any damages that he may suffer by reason of such
termination  or  for  any  severance  or  other  payment.  No  salary  or  other
compensation  received by the Executive in connection with any employment of the
Executive after termination of the Executive's  employment with the Company will
reduce any amounts payable under this Agreement or any agreement entered into in
connection  herewith.  There  shall be no right of  set-off or  counterclaim  on
behalf of the Company, in respect of any claim, debt or obligation,  against any
payments to the Executive, his dependents,  beneficiaries or estate provided for
in this Agreement

     17.          AMENDMENTS

     No provision of this  Agreement may be modified,  altered or amended except
by written agreement executed by all of the parties hereto.

     18.          ENTIRE AGREEMENT

     This  Agreement  and any benefit  plans of the Company are  intended by the
parties as the final expression of their agreement and intended to be a complete
and exclusive  statement of the  agreements  and  understandings  of the parties
hereto in respect  of the  subject  matter  contained  herein or in such  letter
agreements.  There are no  restrictions,  promises,  warranties or undertakings,
other than those set forth or  referred  to herein or  therein.  This  Agreement
supersedes  all prior  agreements  and  understandings  between the parties with
respect to the subject matter hereof.

     19.          HEADINGS

     The various headings set forth in this Agreement are inserted for reference
purposes  only and shall in no way effect the meaning or intent of any provision
hereof.

                                   -16-

<PAGE>

     20.          INTERPRETATION

     It is expressly agreed by the parties that the authorship of this Agreement
will  have no  bearing  upon  its  interpretation.  Each of the  parties  hereto
acknowledges and agrees that the terms and provisions of this Agreement are fair
and reasonable and that no such term or provision shall in any event be deemed a
penalty.

     21.          COUNTERPARTS

     This  Agreement  may be  executed  in  counterparts  each of which shall be
deemed  an  original  but  all of  which  together  shall  constitute  a  single
instrument.

     22.          DISPUTE RESOLUTION

     At the sole election of the Executive, any dispute arising pursuant to this
Agreement may be resolved pursuant to an arbitration  proceeding  conducted by a
panel of three neutral arbitrators in accordance with the commercial arbitration
rules of the American Arbitration Association. Any such proceedings will be held
in  Stamford,  Connecticut.  Notwithstanding  anything  contained  herein to the
contrary all costs associated with such proceeding shall borne by the Company.

     23.          COVENANT NOT TO COMPETE UPON ELECTION OF COMPANY

     (a)  During  the  period  of 30  days  following  the  termination  of  the
employment of the Executive during the Term (other than termination  pursuant to
Section 8 (c) (A) or Section 8 (c) (C)), the Company shall have the option,  but
not the obligation, to deliver to the Executive a written notice of the election
of the Company to invoke the covenant not to compete contained in Section 23 (b)
hereof

     (b) Upon timely receipt by the Executive of a notice specified in Paragraph
23(a) hereof, the Executive shall not, for a period of two years,  engage in the
business  of  (i)  the  offering  of  service  contracts  to  consumers  through
retailers,  dealers,  distributors  and  manufacturers,  or  (ii)  administering
service  contracts offered by others to consumers  through  retailers,  dealers,
distributors and  manufacturers.  Nothing herein shall impair the ability of the
Executive  to engage in any other  activity  not  specified  in the  immediately
preceding sentence, including, without limitation, offering service contracts or
administering   service  contracts  offered  to  consumers  other  than  through
retailers, dealers, distributors and manufacturers.

                              -17-

<PAGE>

     (c) Upon the  election  of the  Company  to invoke the  provisions  of this
Section 23, and  simultaneously  with the submission of the notice  specified in
paragraph 23 (a), the Company shall issue to the Executive One Hundred  Thousand
(100,000) shares of Common Stock.

     (d) The  obligations of the Executive under this Section 23 shall terminate
upon the breach by the Company of any  obligation to the  Executive  pursuant to
this Agreement or any other agreement.

     IN WITNESS  WHEREOF,  the Company and  Executive  have duly  executed  this
Agreement as of the day and year first written above.


                                                WARRANTECH CORPORATION

                                                By: /s/ Richard Gavino
                                                    --------------------
                                                    Richard Gavino
                                                    Financial Officer


                                                /s/ Joel San Antonio
                                                ------------------------
                                                Joel San Antonio


                                                       -18-


<PAGE>


                                                EXHIBIT 21
                              LIST OF SUBSIDIARIES OF WARRANTECH CORPORATION

         WARRANTECH CONSUMER PRODUCT SERVICES, INC.
                  a Connecticut corporation

         WCPS OF FLORIDA, INC.
                  a Florida corporation

         WARRANTECH AUTOMOTIVE, INC.
                  a Connecticut corporation

         WARRANTECH AUTOMOTIVE OF CALIFORNIA, INC.
                  a California corporation

         WARRANTECH AUTOMOTIVE RISK PURCHASING GROUP, INC.
                  a Michigan corporation

         WARRANTECH AUTOMOTIVE OF FLORIDA, INC.
                  a Florida corporation

         WARRANTECH DIRECT, INC.
                  a Texas corporation

         WARRANTECH (UK) LIMITED
                  a company incorporated in England

         WARRANTECH INTERNATIONAL, INC.
                  a Delaware corporation

         WCPS OF CANADA, INC.
                  a Connecticut corporation

         WARRANTECH AUTOMOTIVE OF CANADA, INC.
                  a Connecticut corporation

         WARRANTECH EUROPE PLC
                  a company incorporated in England

         WARRANTECH ADDITIVE, INC.
                  a Texas corporation

         WARRANTECH HOME SERVICE COMPANY
                  a Connecticut corporation

         WARRANTECH CARIBBEAN LTD
                  a company incorporated in the Cayman Islands

         WARRANTECH HOME ASSURANCE COMPANY
                  a Florida corporation

         WARRANTECH HELP DESK, INC.
                  a Delaware corporation

         WCPS DIRECT, INC.
                  a Texas corporation

         WHSC DIRECT, INC.
                  a Texas corporation

         WARRANTECH HOME ASSURANCE COMPANY
                  a Connecticut corporation

         WARRANTECH INTERNATIONAL de CHILE
                  a Chile corporation

         VEMECO, INC.
                  a Connecticut corporation