Other Commission and Fee Income ------------------------------- Other commission and fee income are as follows:
Other Operating Expenses generally do not change significantly with changes in production. This is true for both increases and decreases in production. Operating expenses increased $216,715 (8%) for the year ended December 31, 2005, compared to the year ended December 31, 2004. Operating expenses decreased $240,576 (8%) for the year ended December 31, 2004, compared to the year ended December 31, 2003.
Stock-Based Compensation - ------------------------ The Company applies the intrinsic-value based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations including FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation," an interpretation of APB Opinion No. 25, to account for its fixed-plan stock options. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. FASB Statement No. 123 (SFAS 123), "Accounting for Stock-Based Compensation," and FASB Statement No. 148, "Accounting for Stock Based Compensation - Transition and Disclosure," an amendment of SFAS 123, established accounting and disclosure requirements using a fair-value based method of accounting for stock-based employee compensation plans. As permitted by existing accounting standards, the Company has elected to continue to apply the intrinsic-value based method of accounting described above and has adopted only the disclosure requirements of SFAS 123, as amended. In December 2004, FASB Statement No. 123R (SFAS 123R) which revised SFAS 123 was issued and will be applicable for the Company in 2006 (see Note 15).
Year ended December 31 ---------------------- 2005 2004 2003 ---- ---- ---- Net income As reported $6,715,004 $5,681,500 $1,068,650
compared to incurred losses of prior years of $835,434 (favorable development) for the year ended December 31, 2004, and incurred losses of prior years of $2,751,585 (adverse development) for the year ended December 31, 2003.
NOTE 8 - DEFERRED POLICY ACQUISITION COSTS - ------------------------------------------ The following table provides an analysis of the roll forward of Crusader's deferred policy acquisition costs:
Premium payable $2,494,285 $3,394,181 Unearned claim administration income 30,000 100,000 Profit sharing contributions 645,000 636,186 Accrued salaries 333,354 331,054 Commission payable 210,451 333,525 Other 195,331 429,837 --------- --------- Total accrued expenses and other liabilities $3,908,421 $5,224,783 ========= =========
Money Purchase Plan - ------------------- During the year ended December 31, 1999, the Company adopted the Unico American Corporation Money Purchase Plan. This plan covers the present executive officers of the Company. Pursuant to the terms of such Plan, the Company annually contributes for the account of each participant an amount equal to a percentage of the participant's eligible compensation as determined by the Board of Directors. However, amounts contributed to the Unico American Corporation Profit Sharing Plan will be considered first in determining the actual amount available under the Internal Revenue Service maximum contribution limits. Participants must be employed by the Company on the last day of the plan year to be eligible for contribution. Participants are entitled to receive distribution of benefits under the Plan upon retirement, termination of employment, death or disability.
Weighted Average Options Exercise Price ------- -------------- Outstanding at December 31, 2002 287,000 $5.356 Options granted - - Options exercised - - Options terminated (10,000) 9.250 ------- Outstanding at December 31, 2003 277,000 5.216 Options granted - - Options exercised (2,500) 3.110 Options terminated (2,500) 3.110 ------- Outstanding at December 31, 2004 272,000 5.254 Options granted - - Options exercised (4,000) 3.110 Options terminated - - ------- Outstanding at December 31, 2005 268,000 $5.286 =======