United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 22, 2003
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Commission file number 1-11983
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FPIC Insurance Group, Inc.
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(Exact name of registrant as specified in its charter)
Florida 59-3359111
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
225 Water Street, Suite 1400, Jacksonville, Florida 32202
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(Address of principal executive offices) (Zip Code)
(904)354-2482
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(Registrant's telephone number, including area code)
www.fpic.com
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(Registrant's Internet Address)
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
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Exhibit Number Description of Exhibits
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10(ddd) Placement Agreement dated May 13, 2003 among
FPIC Insurance Group, Inc. and its financing
subsidiary, FPIC Capital Trust I, together as
offerors, and Sandler O'Neill & Partners, L.P.,
as placement agent
10(eee) Capital Securities Subscription Agreement
dated May 13, 2003 among FPIC Insurance
Group, Inc. and FPIC Capital Trust I,
together as offerors, and InCapS Funding I,
Ltd., as purchaser
10(fff) Amended and Restated Declaration of Trust of
FPIC Capital Trust I dated May 22, 2003 by and
among FPIC Insurance Group, Inc., as sponsor,
Wilmington Trust Company, as Delaware trustee,
Wilmington Trust Company, as institutional
trustee, and Kim D. Thorpe, Roberta Goes Cown
and Pamela D. Deyo, as administrators
10(ggg) Guarantee Agreement dated as of May 22,
2003 by and between FPIC Insurance Group,
Inc., as guarantor, and Wilmington Trust
Company, as guarantee trustee
10(hhh) Indenture dated as of May 22, 2003 between FPIC
Insurance Group, Inc., as issuer and Wilmington
Trust Company, as trustee
10(iii) Placement Agreement dated May 13, 2003 between
FPIC Insurance Group, Inc., as offeror, and
Sandler O'Neill & Partners, L.P., as
placement agent
10(jjj) Senior Notes Subscription Agreement dated May
13, 2003 between FPIC Insurance Group, Inc. and
InCapS Funding I, Ltd., as purchaser
10(kkk) Indenture dated as of May 22, 2003 between
FPIC Insurance Group, Inc., as issuer, and
Wilmington Trust Company, as trustee
99 FPIC Insurance Group, Inc. Press Release dated
May 29, 2003
Item 9. Regulation FD Disclosure.
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The following information, including exhibits, is furnished under Item 9,
Regulation FD Disclosure.
On May 13, 2003, FPIC Insurance Group, Inc. ("FPIC") entered into a Placement
Agreement with Sandler O'Neill & Partners, L.P., ("Sandler O'Neill"), acting as
placement agent, for the private placement of $5.0 million of trust preferred
securities. A copy of FPIC's Placement Agreement dated May 13, 2003, is attached
as Exhibit 10 (ddd) and is furnished as a part of this filing. The offering was
completed May 22, 2003.
FPIC, through its wholly owned statutory trust, along with other insurance and
insurance holding company participants, issued trust preferred securities to the
Sandler O'Neill investment pool, which in turn issued its securities to
institutional and accredited investors. A copy of FPIC's Capital Securities
Subscription Agreement dated May 13, 2003 and a copy of the Amended and Restated
Declaration of Trust of FPIC Capital Trust I dated May 22, 2003 are attached
hereto as Exhibit 10(eee) and Exhibit 10(fff), respectively, and are
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furnished as a part of this filing. A copy of FPIC's Guarantee Agreement dated
May 22, 2003 is also attached hereto as Exhibit 10(ggg) and is furnished as a
part of this filing.
The securities issued to the investment pool by FPIC mature in 30 years and will
bear a floating per annum interest rate equal to LIBOR plus 4.2%, for an initial
rate of approximately 5.5%. The floating interest rate will be adjustable
quarterly with changes in LIBOR, and the maximum rate that may be charged under
the securities within the first five years is 12.5%. A copy of FPIC's Indenture
dated May 22, 2003 is attached hereto as Exhibit 10(hhh) and is furnished as a
part of this filing. FPIC has purchased hedging instruments designed to maintain
the ultimate floating rate interest cost on the securities within the range of
5.4% to 8.6% for five years from closing. FPIC will have the option to call
these securities at par beginning May 23, 2008.
On May 13, 2003, FPIC also entered into a Placement Agreement with Sandler
O'Neill for the private placement of $10.0 million of unsecured senior notes. A
copy of FPIC's Placement Agreement dated May 13, 2003, is attached as Exhibit
10(iii) and is furnished as a part of this filing. The offering was completed
May 22, 2003. A copy of FPIC's Senior Notes Subscription Agreement dated May 13,
2003 is attached hereto as Exhibit 10(jjj) and is furnished as part of this
filing.
The floating rate 30-year senior notes will bear a per annum interest rate equal
to LIBOR plus 4.2%, for an initial rate of approximately 5.5%. The floating
interest rate will be adjustable quarterly with changes in LIBOR, and the
maximum rate that may be charged under the notes within the first five years is
12.5%. A copy of FPIC's Indenture dated May 22, 2003 is attached hereto as
Exhibit 10(kkk) and is furnished as a part of this filing. FPIC has purchased a
hedging instrument designed to maintain the ultimate floating rate interest cost
on the notes within 5.4% to 8.6% for five years from closing. FPIC will have the
option to call these notes at par beginning May 23, 2008.
The net proceeds from the trust preferred securities and the senior notes are
being used primarily to pay down FPIC's revolving credit facility and to
partially unwind a related hedge agreement. FPIC has secured from its bank
lender group the necessary approvals and amendments to its credit facility to
allow for the issuance of the trust preferred securities and the senior notes
and such use of the proceeds.
FPIC estimates it will incur charges of approximately $1.0 million after tax in
the second quarter of 2003 in connection with the completion of the recent FTN
Financial Capital Markets/Keefe Bruyette & Woods, Inc. (see FPIC's Form 8-K
dated May 16, 2003 filed with the Securities and Exchange Commission) and
Sandler O'Neill private placements, consisting primarily of the costs to unwind
swap agreements associated with the pay downs of its bank debt. Other costs
associated with the private placements of approximately $1.0 million will be
amortized over the expected life of the newly issued securities, which have
stated maturities of 30 years. During the remainder of 2003, FPIC expects to
realize net cost savings of approximately $0.3 million after tax, primarily from
lower interest and hedging costs associated with the new securities, with
additional savings continuing thereafter. Total incremental costs associated
with the newly issued securities for the year 2003 are expected to be
approximately $1.1 million (approximately $0.7 million after tax).
A copy of FPIC's press release dated May 29, 2003 regarding FPIC's participation
in Sandler O'Neill's private offering is attached hereto as Exhibit 99 and is
furnished as a part of this filing.
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Signature
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Pursuant to 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 hereunto duly authorized.
FPIC INSURANCE GROUP, INC.
Date: May 29, 2003 By: /s/ John R. Byers
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John R. Byers
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit Number Description of Exhibits
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10(ddd) Placement Agreement dated May 13, 2003 among
FPIC Insurance Group, Inc. and its financing
subsidiary, FPIC Capital Trust I, together as
offerors, and Sandler O'Neill & Partners, L. P.,
as placement agent
10(eee) Capital Securities Subscription Agreement
dated May 13, 2003 among FPIC Insurance
Group, Inc. and FPIC Capital Trust I,
together as offerors, and InCapS Funding I,
Ltd., as purchaser
10(fff) Amended and Restated Declaration of Trust of
FPIC Capital Trust I dated May 22, 2003 by and
among FPIC Insurance Group, Inc., as sponsor,
Wilmington Trust Company, as Delaware trustee,
Wilmington Trust Company, as institutional
trustee, and Kim D. Thorpe, Roberta Goes Cown
and Pamela D. Deyo, as administrators
10(ggg) Guarantee Agreement dated as of May 22,
2003 by and between FPIC Insurance Group,
Inc., as guarantor, and Wilmington Trust
Company, as guarantee trustee
10(hhh) Indenture dated as of May 22, 2003 between FPIC
Insurance Group, Inc., as issuer and Wilmington
Trust Company, as trustee
10(iii) Placement Agreement dated May 13, 2003 between
FPIC Insurance Group, Inc., as offeror, and
Sandler O'Neill & Partners, L.P., as placement
agent
10(jjj) Senior Notes Subscription Agreement dated May
13, 2003 between FPIC Insurance Group, Inc. and
InCapS Funding I, Ltd., as purchaser
10(kkk) Indenture dated as of May 22, 2003 between FPIC
Insurance Group, Inc., as issuer and Wilmington
Trust Company, as trustee
99 FPIC Insurance Group, Inc. Press Release dated
May 29, 2003
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