-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WSKIkhJMVe7uQen0YM0ZHHoBQWtqCL4USh9e88mlhX6T/K5hXevYrtm+YV1DJpLV PdSOBbPDmLGFMgVJeDYFjQ== 0000912057-02-011637.txt : 20020415 0000912057-02-011637.hdr.sgml : 20020415 ACCESSION NUMBER: 0000912057-02-011637 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CCC INFORMATION SERVICES GROUP INC CENTRAL INDEX KEY: 0001017917 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 541242469 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28600 FILM NUMBER: 02586619 BUSINESS ADDRESS: STREET 1: WORLD TRADE CENTER CHICAGO STREET 2: 444 MERCHANDISE MART CITY: CHICAGO STATE: IL ZIP: 60654 BUSINESS PHONE: 3122224636 10-K 1 a2073198z10-k.htm FORM 10-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001
Commission File Number: 000-28600

CCC INFORMATION SERVICES GROUP INC.
(Exact name of registrant as specified in its charter)

Delaware		54-1242469
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

World Trade Center Chicago
444 Merchandise Mart
Chicago, Illinois 60654
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code:
(312) 222-4636
Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
None		None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.10 par value

Indicate by check mark whether the registrant (1) has filed all reports required 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 the 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 aggregate market value of voting shares (based on the closing price of those shares listed on the Nasdaq National Market and the consideration received for those shares not listed on a national or regional exchange) held by non-affiliates (as defined in Rule 405) of the registrant as of March 25, 2002 was $106,903,024. Solely for purposes of determining the aggregate market value of voting shares held by non-affiliates, we have deemed voting shares held by directors, officers and entities on whose behalf they act to be held by "affiliates."

As of March 26, 2002, 25,766,065 shares of CCC Information Services Group Inc. common stock, par value $0.10 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Annual Report on Form 10-K incorporates by reference portions of the registrant's Notice of 2002 Annual Meeting of Stockholders and Proxy Statement.

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

		Page(s)
PART I
Item 1.	Business	1-7
Item 2.	Properties	8
Item 3.	Legal Proceedings	8-13
Item 4.	Submission of Matters to a Vote of Security Holders	13
PART II
Item 5.	Market for Registrant's Common Equity and Related Stockholder Matters	13
Item 6.	Selected Financial Data	14-15
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15-31
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	31
Item 8.	Financial Statements and Supplementary Data	31
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	31
PART III
Item 10.	Directors and Executive Officers of the Registrant	32
Item 11.	Executive Compensation	32
Item 12.	Security Ownership of Certain Beneficial Owners and Management	32
Item 13.	Certain Relationships and Related Transactions	32
PART IV
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	33-76
Signatures		77
Directors and Executive Officers		78
Corporate Information		79

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

In addition to historical facts or statements of current conditions, this Annual Report on Form 10-K for the year ended December 31, 2001 ("Form 10-K") contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. These may include statements regarding market prospects of our products, sales and earnings projections, and other statements regarding matters that are not historical facts. Some of these forward-looking statements may be identified by the use of words in the statements such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," or other words and terms of similar meaning. Our performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions affecting the technology industry as well as more specific risks and uncertainties such as those set forth elsewhere in the Form 10-K. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such forward-looking statements. Furthermore, we do not intend, nor are we obligated, to update publicly any forward-looking statements. Risks that we anticipate are discussed in more detail in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Certain Risks Related to Our Business." This discussion is permitted by the Private Securities Litigation Reform Act of 1995.

PART I

Item 1. Business

Organization

CCC Information Services Group Inc. ("CCCG"), incorporated in Delaware in 1983 and headquartered in Chicago, Illinois, is a holding company that operates through its wholly owned subsidiary, CCC Information Services Inc. ("CCC") (collectively referred to as the "Company" or "we"), which, as a result of consolidating, divesting and winding down certain operations, now operates as one business segment. We automate the process of evaluating and settling automobile claims, which allows our customers to integrate estimate information, labor time and cost, recycled parts and various other calculations derived from our extensive databases, electronic images, documents and related information into organized electronic workfiles. We develop, market and supply a variety of automobile claim product and services which enable customers in the automobile claims industry, including automobile insurance companies, collision repair facilities, independent appraisers, automobile dealers and consumers, to manage the automobile claim and vehicle restoration process. In 2001, we shut down our International segment, consolidated our DriveLogic segment into our U.S. business segment and discontinued our CCC Consumer Services segment.

Our principal products and services are Total Loss valuation services and Pathways collision estimating software, which provide our customers with access to various automobile information databases and claims management software. Revenues from our Total Loss valuation services represented 25.5%, 26.7% and 28.6% of our consolidated revenues for the years ended December 31, 2001, 2000 and 1999, respectively. Pathways collision estimating software represented 58.3%, 55.6% and 56.6% of our consolidated revenues for the years ended December 31, 2001, 2000 and 1999, respectively.

We employ 862 full-time employees compared to 1,550 at the end of 2000. The number of full-time employees reflects the elimination of certain positions in connection with the consolidation of our DriveLogic segment into our U.S. business segment, the discontinued operations of CCC Consumer Services and the shut down of CCC International.

As of December 31, 2001, White River Ventures Inc. ("White River") held approximately 34% of our outstanding common stock. In June 1998, White River Corporation, the sole shareholder of White River, was acquired by Demeter Holdings Corporation, which is solely controlled by the President and Fellows of Harvard College, a Massachusetts educational corporation and title-holding company for the endowment fund of Harvard University. Charlesbank Capital Partners LLC is acting as investment manager with respect to the investment of White River in the Company.

CCC Products and Services

Pathways Collision Estimating and Appraisal Solution Products

Pathways Appraisal Solution and Pathways Estimating Solution. We developed Pathways collision estimating software in 1995 to help automobile insurance companies, collision repair facilities and independent appraisers manage aspects of their day-to-day automobile claim activities, including receipt of new assignments, preparation of estimates, communication of status and completed activity and maintenance of notes and reports. The Pathways platform allows customers to integrate our other services, including our Digital Imaging product, Recycled Parts Services and Total Loss valuation services, in order to organize individual claim information in electronic workfiles, which can be stored on our EZNet communications network, described in greater detail later in this section under "Workflow Products." We have received three United States patents for our Pathways line. Pathways collision estimating software can be used on laptops or desktop computers.

Pathways collision estimating software gives customers access to a comprehensive estimating guide, the MOTOR Crash Estimating Guide prepared by Motor Information Systems, a unit of Hearst Business Publishing, Inc. ("Hearst"), which provides pricing, labor and refinishing information for original equipment manufactured parts and recycled assemblies. We use this guide to create a database of parts, price and labor time for various repairs. An exclusive license from Hearst permits us to publish this guide electronically, which is an integral component of our Pathways collision estimating software. In March 2002, we extended the term of this exclusive license with Hearst until June 30, 2021. For more information about this license, please see the description under "Intellectual Property and Licenses."

Customers also use Pathways collision estimating software to access databases of information gathered from various vendors. These databases include a database that provides local part availability and price information on aftermarket and reconditioned parts and a database, which includes information on pricing and availability of over 12,000 tire models from 26 different manufacturers. Customers using Pathways collision estimating software with Recycled Parts Services also have access to a database that provides local part availability and price information on recycled or salvage parts. For example, a customer may access the database of recycled or salvage parts to determine if a specific recycled part is available from an identified vendor in his region and to ascertain the price of that part. If the customer selects that part for use in the repair process, Pathways collision estimating software integrates that choice into the estimate workfile.

The MOTOR Crash Estimating Guide and the other integrated databases (except for the Recycled Parts database, which the vendor periodically updates electronically) are updated for our customers monthly via a CD-ROM. We sell Pathways collision estimating software to automobile insurance companies, collision repair facilities and independent appraisers under multi-year contracts on a monthly subscription basis, which are billed to our customers one month in advance.

Pathways Digital Imaging. Pathways Digital Imaging allows automobile insurance companies, collision repair facilities and independent appraisers to digitally photograph and transmit images of damaged vehicles to the Pathways estimate workfile. These electronic images can be accessed by an authorized participant in the automobile claim process at any time and from any location that is web enabled. For example, an adjuster in the field in California may add a digital image of a damaged

vehicle to the Pathways estimate workfile using the integrated imaging function. The estimate can then be stored on our EZNet communications network, which allows an insurance company representative in New York to access the same workfile and digital image, review the estimate and approve the claim. Our EZNet communications network is described in greater detail later in this section under "Workflow Products". Pathways Digital Imaging reduces the need for onsite inspections and eliminates film, photo processing, travel and overnight delivery costs. We sell Pathways Digital Imaging to our customers as an integrated function within Pathways Appraisal Solution or Pathways Estimating Solution under multi-year contracts on a monthly subscription basis, which are billed to customers one month in advance.

Pathways Enterprise Solution and Pathways Professional Advantage. Pathways Enterprise Solution is an automotive repair shop management software system for multiple location collision repair organizations that allows them to manage accounts, prepare employee schedules and perform various other management functions. Pathways Professional Advantage, similar to Pathways Enterprise Solution, is a shop management software system for a single store location. We sell Pathways Professional Advantage and Pathways Enterprise Solution to our customers under multi-year contracts on a monthly subscription basis, which are billed to customers one month in advance.

Total Loss Valuation Services

Total Loss. Our Total Loss service is used primarily by automobile insurance companies in processing claims involving vehicles that have been heavily damaged or stolen. Typically, when the cost to repair a vehicle exceeds 70% to 90% of the vehicle's value, the automobile insurance company will declare that vehicle to be a "total loss." In such cases, we provide the insurer with the local market value of the vehicle to assist the insurer in processing the claim. Our values are based on local market data that identifies the specific location and price of comparable vehicles. To compile this data, more than 300 CCC representatives survey over 3,800 car dealerships in more than 250 markets at least twice each month to obtain detailed information on the vehicles on the dealers' used car lots. In addition, we subscribe to more than 1,800 local newspapers and other publications and cull information from the classified advertisements to provide additional information on vehicle availability and pricing. We believe our Total Loss database is among the most current and comprehensive vehicle databases in North America. Each Total Loss valuation also includes a vehicle identification search under VINguard, which matches a current vehicle claim against our database of previously totaled or stolen vehicles to identify potential duplication or possible fraud.

Customers of Total Loss who are also customers of Pathways collision estimating may access the Total Loss program electronically through the Pathways collision estimating software program. Customers also have the option to obtain Total Loss valuations from us by telephone, email or facsimile. TL2000 Solution allows customers and/or their insureds to access Total Loss services through the Internet via secured access. Customers may store Total Loss valuations on our EZNet communications network as part of a claims workfile.

We sell Total Loss to our customers, including those who are Pathways collision estimating customers, on a per transaction basis. Customers are billed in the month following the transaction.

Total Loss Advantage. Total Loss Advantage permits customers who are not users of our Pathways collision estimating software products to submit Total Loss valuation requests electronically to us. Our Total Loss service can be accessed through Pathways, Total Loss Advantage, telephone or facsimile.

Information Services Products

GuidePost Decision Support. GuidePost allows users to manage and review data. Through GuidePost, insurance managers electronically evaluate results, format reports, gather information for review of personnel or a particular subject and compare performance to industry and regional indices

from data generated in Pathways. We distribute GuidePost updates to our customers monthly. We are phasing out GuidePost and migrating customers to ClaimScope Navigator.

ClaimScope Navigator. ClaimScope Navigator is our next generation, on-line Web-based information service that provides a comprehensive method to create management reports comparing industry and company performance using Pathways collision estimating and Total Loss data. ClaimScope Navigator permits our customers to conduct in-depth analyses of claim information by parts and labor usage, cycle time measurements and vehicle type and condition. We completed our roll-out of ClaimScope Navigator release 1.0 in February of 2001. In January 2002 we released ClaimScope Navigator release 2.0, which introduced significant enhancements in flexibility and added Total Loss data.

Workflow Products

EZNet Communications Network. Our EZNet communications network is a central communications hub and repository for automobile insurance companies. Our customers can access EZNet in various ways, including, but not limited to, dedicated data lines and/or telephone line via modems. We offer various services such as dispatch of assignment information, estimate and supplement retrieval and electronic review of automobile appraisals to our customers that are provided over our EZNet communications network, all of which comprise our Electronic Direct Repair services. The network allows customers to electronically communicate claim information, including assignments, work files, estimates, images and auditable estimate data, internally and among appraisers, collision repair facilities, reinspectors and other parties involved in the automobile claims process. EZNet allows customers to share information and review claims, regardless of the location. EZNet provides customers with an electronic library to catalog, organize and store completed claims files.

When a customer completes an estimate, the customer may store the estimate information on our EZNet communications network in the electronic library. For example, a remote claims adjuster in New York may prepare an estimate using Pathways collision estimating and store the completed estimate on EZNet. EZNet allows the adjuster's supervisor and other members of his company's automobile claim team in California to access the estimate on a confidential basis using a claim reference number. We sell EZNet services to our customers under multi-year contracts and bill customers on both a per transaction basis and a monthly subscription basis.

Pathways Appraisal Quality Solution. Pathways Appraisal Quality Solution is the first computerized solution that allows for electronic audits (QAAR Plus) of automobile repair estimates prepared by direct repair facilities, independent appraisers and internal insurance staff for quality control and for identification and correction of errors or discrepancies prior to the completion of repairs. In addition, Pathways Appraisal Quality Solution allows automobile insurance companies to use available historical data to track performance of appraisers and provides a mechanism to establish and monitor compliance with certain reinspection objectives developed by the automobile insurance company. For example, Pathways Appraisal Quality Solution allows an insurance company to establish certain criteria for reviewing the preparation of estimates, which allows the insurance company to determine if an appraiser prepared an accurate estimate. We sell Pathways Appraisal Quality Solution to our customers on a subscription and/or per transaction basis under multi-year agreements.

Our new web-based portfolio aims to optimize efficiencies in the automobile claim and collision repair industries through Internet-based applications and communications. We expect to release solutions, including the Open Electronic Direct Repair Program (Open eDRP) and the Central Shop Dispatch, within this portfolio in 2002.

Sales and Marketing

All of our services are currently sold throughout the United States. Our sales and marketing strategy is to strengthen our relationships with existing customers and to expand our current customer base by providing efficient, integrated and value-added services in the automobile claims industry. We utilize approximately 170 sales and service professionals to market and sell our services.

Training and Support

Our training and support staff, consisting of approximately 110 employees, provide basic training in the field, advanced training courses, telephonic technical support and implementation services. Our training and support staff consists of individuals with technical knowledge relating not only to CCC software and services, operating systems and network communications, but also to new and used automobile markets and collision repair. We routinely analyze customer calls to modify services or training and, whenever necessary, will dispatch a field representative to a customer's location.

Customers and Customer Contracts

We provide our services primarily to automobile insurance companies and collision repair facilities. Our insurance company customers include most of the largest U.S. automobile insurance companies and small to medium size automobile insurance companies serving regional or local markets. Our automotive collision repair customers include more than 14,600 collision repair facilities, located in all 50 states, including most major metropolitan markets. No single customer accounted for more than 6.4% of our total revenues in any of the last three years. In 2001, our insurance customer base consisted of approximately 615 Total Loss services customers and 417 Pathways collision estimating services customers, as well as 130 customers for both Pathways Enterprise Solution and Pathways Professional Advantage. We charge fees for our services based on either a monthly subscription or a per transaction basis.

ChoiceParts Joint Venture

On May 4, 2000, we formed a new independent company, ChoiceParts, LLC ("ChoiceParts") with Automatic Data Processing, Inc. ("ADP") and The Reynolds and Reynolds Company ("Reynolds"). ChoiceParts develops and operates an electronic parts exchange for the auto parts marketplace for franchised auto retailers, collision repair facilities and other parts suppliers. We have a 27.5% equity interest in ChoiceParts. In addition to an initial capital contribution of $1.4 million, we initially committed to fund an additional $5.5 million to ChoiceParts based on our pro-rata ownership percentage through April 2001; however, we reached an agreement with ADP and Reynolds to extend the funding deadline to April 2002. In December 2000, we funded $1.4 million in connection with this additional funding commitment. In March 2001, we funded $2.1 million to ChoiceParts and in addition, funded $0.3 million in February 2002, leaving approximately $1.7 million of the funding commitment still outstanding. We currently expect that the balance of the funding will occur in 2002. ChoiceParts earned revenues during 2001, but has not yet realized positive earnings.

Intellectual Property and Licenses

Our competitive advantage depends upon our proprietary technology. We rely primarily on a combination of patents, contracts, intellectual property laws, confidentiality agreements and software security measures to protect our proprietary rights. We distribute our services under written license agreements, which grant our customers a license to use our services and contain provisions to protect our ownership and the confidentiality of the underlying technology. We also require all of our employees and other parties with access to our confidential information to sign agreements prohibiting the unauthorized use or disclosure of our technology.

We have trademarked virtually all of our products and services, and we use our trademarks in the advertising and marketing of our products and services. Pathways and CCC are well-known marks within the automobile insurance and collision repair industries. We have patents for our collision estimating service pertaining to the comparison and analysis of the "repair or replace" and the "new or used" parts decisions. In 1999, we received a patent for the Pathways method for managing insurance claim processing. Although we do not have a patent for the Total Loss calculation process, the processes involved in this program are our trade secrets and are essential to our Total Loss business. Despite these precautions, we believe that existing laws provide only limited protection for our technology. A third party may misappropriate our technology or independently develop similar technology. Additionally, it is possible that other companies could successfully challenge the validity or scope of our patents and that our patents may not provide a competitive advantage to us.

We license certain data used in our services from third parties to whom we pay royalties. With the exception of the MOTOR Crash Estimating Guide that we license from Hearst, we do not believe that our services are significantly dependent upon licensed data which cannot be obtained from other vendors. Although we have licensed the estimating guide from Hearst through June 30, 2021, we do not have access to an alternative database that would provide comparable information in the event the license is terminated. Hearst may terminate the license if any of the following events occur: (1) we fail to make payment of license fees, royalties and other charges due under the agreement; (2) we do not comply with the material terms and conditions of the agreement; (3) we become bankrupt or insolvent and we are unable to perform our obligations under the agreement; or (4) upon two years' notice, if Hearst discontinues or abandons publication of the estimating guide.

Any interruption of our access to the estimating guide provided by MOTOR could have a material adverse effect on our business, financial condition and results of operations.

In addition, we license data used in the Recycled Parts database. The provider of this data is undergoing a reorganization pursuant to Chapter 11 of the Bankruptcy Code. To ensure continued access to recycled parts data, we are currently investigating other sources for this data. We believe that the current provider will continue to supply data or that we will obtain access to alternative databases that provide comparable information, however, there can be no assurance that the current data supplier will continue to supply data or that we will be able to enter into new or additional licenses on economic terms that are beneficial to us. Any interruption of our access to the data contained in the Recycled Parts database could have a material adverse effect on our business.

We are not engaged in any material disputes with other parties with respect to the ownership or use of our proprietary technology. We cannot assure you that other parties will not assert technology infringement claims against us in the future. Defending any such claim may involve significant expense and management time. In addition, if any such claim were successful, we could be required to pay monetary damages, refrain from distributing the infringing product or obtain a license from the party asserting the claim, which may not be available on commercially reasonable terms.

Competition

The industry in which we compete is highly competitive. We compete by offering value added products and services that we believe are unique and by providing superior customer service for these solutions. Historically, our principal competitors have included 1) the dealers services division of ADP, which offers a personal computer-based collision estimating and digital imaging system and a vehicle valuation service to the automobile insurance industry and a collision estimating and digital imaging system to the collision repair industry, and 2) Mitchell International Inc. ("Mitchell"), which publishes crash guides for both the automobile insurance and collision repair industries and markets collision estimating, shop management and imaging products. Over the past few years, however, we have faced new competition from several new companies, many of which focus on the delivery of services over the

Internet. We also compete with companies offering both collision estimating programs that are not computer based. Over the past few years, we have experienced steady competitive price pressure.

We intend to address competitive price pressures by providing higher quality value added solutions services that offer more advanced features to our clients. We also intend to continue to develop unified, user-friendly claim services that incorporate our comprehensive proprietary inventory of data. We expect that Pathways will continue to provide a unique service for our insurance and collision repair customers and allow us to effectively address competitive price pressures.

At times, insurance companies have entered into agreements with companies (including ADP, Mitchell and CCC) that provide that the insurance company will either use the product or service of that company exclusively or designate the company as its preferred provider of that product or service. If the agreement is exclusive, the insurance company requires that collision repair facilities, independent appraisers and regional offices use the particular product or service. If the company is simply a preferred provider, the collision repair facilities, independent appraisers and regional offices are encouraged to use the preferred product, but may still choose another company's product or service. Being included on the approved list of an insurance company or having a product that is endorsed by the insurance company provides certain benefits, including immediate customer availability and an advantage over competitors who may not have such approval. To the extent an insurance company has endorsed ADP or Mitchell, but not us, we will experience a competitive disadvantage.

Research and Development

For the years 2001, 2000 and 1999 we incurred research and development costs of $13.0 million, $11.1 million and $3.9 million, respectively.

Former Businesses

CCC International

CCC International provided claims consulting for a large insurance company, in which we helped identify potential collision repair facilities for this insurer to acquire. In December 2000, we decided to shutdown D.W. Norris, a 100% owned subsidiary of CCC International acquired in August of 1999. In June 2001, we decided to shut down CCC International. The decision to shut down the business was the result of continued underperformance and expected future losses.

In 1998, CCC International entered into a joint venture, Enterstand Limited ("Enterstand"), with Hearst Communications Inc. ("Hearst Communications") to jointly develop and implement our services for the European market. In 2001, as part of our decision to shut down CCC International, we ceased funding and discontinued our participation in Enterstand. In March 2002, CCC International and Hearst Communications terminated their joint venture agreement, CCCG issued a warrant to Hearst Communications, exercisable for five years, to purchase up to 250,000 shares of the common stock of CCCG for $12 per share and CCC International purchased Hearst Communications' interest in the joint venture for a nominal sum.

CCC Consumer Services

Through CCC Consumer Services we provided third party outsourcing services to the insurance industry. CCC Consumer Services' Access product was dependent on certain software resources of CCC U.S. and was unable to provide this service without use of certain CCC U.S. resources. CCC Consumer Services experienced both a decline in revenue and in the number of transactions processed for its customers. As a result of these factors, in April 2001, we decided to discontinue the operations of our CCC Consumer Services segment. By the end of 2001 we sold certain assets and closed the CCC Consumer Services segment business.

Item 2. Properties

Our corporate office is located in Chicago, Illinois, where we lease two spaces of a multi-tenant facility, one for approximately 104,000 square feet which expires in November 2008 and the second for approximately 37,000 square feet which expires in January 2004. In Glendora, California, we lease approximately 84,000 square feet of a facility under a lease expiring in December 2004, where a satellite development center and distribution center are housed. We own a 50,000 square foot facility in Sioux Falls, South Dakota used primarily for certain customer service and claims processing operations. During 2001 we vacated approximately 34,000 feet of a multi-tenant facility in Chicago previously occupied by our DriveLogic segment under a lease expiring in March 2006. We are currently attempting to sublease these premises. In addition, we vacated facilities previously occupied by CCC Consumer Services and CCC International and we are currently subleasing 6,700 square feet of our Sioux Falls facility. We believe that our existing facilities are adequate to meet our requirements for the foreseeable future.

Item 3. Legal Proceedings

On January 31, 2000, a putative class action lawsuit was filed against CCC, Dairyland Insurance Co., and Sentry Insurance Company in the Circuit Court of Johnson County, Illinois. The case is captioned SUSANNA COOK v. DAIRYLAND INS. CO., SENTRY INS. and CCC INFORMATION SERVICES INC., No. 2000 L-1. Plaintiff alleges that her insurance company, using a valuation prepared by CCC, offered an inadequate amount for her automobile. Plaintiff seeks to represent a nationwide class of all insurance customers, who, during the period from January 28, 1989, up to the date of trial, had their total loss claims settled using a valuation report prepared by CCC. The complaint also seeks certification of a defendant class consisting of all insurance companies who used CCC's valuation reports to determine the "actual cash value" of totaled vehicles. Plaintiff asserts various common law and contract claims against the defendant insurance companies, and various common law claims against CCC. Plaintiff seeks an unspecified amount of compensatory and punitive damages, as well as an award of attorney's fees and costs.

During January and February of 2001, the group of plaintiffs' lawyers who filed the COOK lawsuit filed ten (10) additional putative class action lawsuits against CCC and several of its insurance company customers in the Circuit Court of Madison County, Illinois. Those cases are captioned as follows: LANCEY v. COUNTRY MUTUAL INS. CO., COUNTRY CASUALTY INS. d/b/a COUNTRY COMPANIES, and CCC INFORMATION SERVICES INC., Case No. 01 L 113 (filed January 29, 2001); SCHOENLEBER v. PRUDENTIAL PROPERTY AND CASUALTY INC. CO. and CCC INFORMATION SERVICES INC., Case No. 01 L 99 (filed January 18, 2001); EDWARDS v. MID-CENTURY INS. CO. d/b/a FARMERS INS. AND CCC INFORMATION SERVICES INC., Case No. 01 L 151 (filed February 6, 2001); BORDONI v. CGU INS. GROUP d/b/a CGU INS. CO. OF ILLINOIS and CCC INFORMATION SERVICES INC., Case No. 01 L 157 (filed February 6, 2001); RICHARDSON v. PROGRESSIVE PREMIER INS. CO. OF ILLINOIS d/b/a PROGRESSIVE and CCC INFORMATION SERVICES INC., Case No. 01 L 149 (filed February 6, 2001); BILLUPS v. GEICO GENERAL INS. CO. and CCC INFORMATION SERVICES INC., Case No. 01 L 159 (filed February 6, 2001); HUFF v. HARTFORD INS. CO. OF ILLINOIS d/b/a THE HARTFORD AND CCC INFORMATION SERVICES INC., Case No. 01 L 158 (filed February 6, 2001); KNACKSTEDT v. ST. PAUL FIRE AND MARINE INS. CO. and CCC INFORMATION SERVICES INC., Case No. 01 L 153 (filed February 6, 2001); MOORE v. SHELTER INS. COS. and CCC INFORMATION SERVICES INC., Case No. 01 L 160 (filed February 6, 2001); TRAVIS v. KEMPER CASUALTY INS. CO. d/b/a KEMPER INSURANCE and CCC INFORMATION SERVICES INC., Case No. 01 L 290 (filed February 16, 2001). The plaintiff in the BILLUPS case dismissed his claims against CCC without prejudice on October 5, 2001. The allegations and claims asserted in these cases are substantially similar to those in the COOK case, as is the relief sought. Each plaintiff seeks to represent a nationwide class of the customers of the

insurance company that is the defendant in that case who, during the period from January 28, 1989, up to the date of trial, had their total loss claims settled using a valuation report prepared by CCC. The LANCEY case seeks certification of a defendant class, as does the COOK case.

CCC and certain of its insurance company customers have been engaged in settlement discussions with the plaintiffs' attorneys who filed the above-referenced cases in Johnson County and Madison County, Illinois. Upon completion, the anticipated settlement would resolve potential claims arising out of approximately 30 percent of the CCC's total transaction volume during the time period covered by the lawsuits, and it would also resolve a number of the putative class action suits currently pending against CCC and certain of its customers. These settlement negotiations are ongoing, but at this time CCC and certain of its insurance company customers have reached an agreement in principle as to CCC's proposed contribution to the potential settlement. During the fourth quarter of 2001, CCC recorded a pre-tax charge of $4.3 million, net of an expected insurance reimbursement of $2.0 million, as an estimate of the amount that CCC will contribute toward the potential settlement. Upon completion of the anticipated settlement, CCC would agree to enter into the settlement for the purpose of avoiding the expense and distraction of protracted litigation, without any express or implied acknowledgment of any fault or liability to the plaintiff, the putative class or anyone else.

The consummation of the settlement with the plaintiffs and the amount of CCC's contribution to the proposed settlement remain subject to a number of significant contingencies, including, among other things, the extent of participation on the part of CCC's insurance company customers, the negotiation of settlement terms between the plaintiffs and those of CCC's customers that are participating in the settlement negotiations, as well as judicial approval of any proposed settlement agreement. As a result, at this time, there is no assurance that the settlement will be successfully consummated or, if completed, that the final settlement will be on the terms or levels of participation set forth above. There is also no assurance that existing or potential claims arising out of the remainder of CCC's total loss transaction volume could be settled on comparable terms.

Between October of 1999 and July of 2000, a separate group of plaintiffs' attorneys filed a series of putative class action lawsuits against CCC and several of its insurance company customers in the Circuit Court of Cook County, Illinois. The cases (excluding cases that have since been dismissed) are captioned as follows: ALVAREZ-FLORES v. AMERICAN FINANCIAL GROUP, INC., ATLANTA CASUALTY CO., and CCC INFORMATION SERVICES INC., No. 99 CH 15032 (filed October 19, 1999); GIBSON v. ORIONAUTO, GUARANTY NATIONAL INS. CO. and CCC INFORMATION SERVICES INC., No. 99 CH 15082 (filed October 20, 1999); STEPHENS v. THE PROGRESSIVE CORP., PROGRESSIVE PREFERRED INS. CO. and CCC INFORMATION SERVICES INC., No. 99 CH 15557 (filed October 28, 1999); LEPIANE v. THE HARTFORD FINANCIAL SERVICES GROUP, INC., HARTFORD INSURANCE COMPANY OF THE MIDWEST and CCC INFORMATION SERVICES INC., No. 00 CH 10545 (filed July 18, 2000). The same group of plaintiffs' attorneys filed an additional case in the Circuit Court of Cook County on or about May 16, 2001. That case is captioned SCALES v. GEICO GENERAL INSURANCE COMPANY AND CCC INFORMATION SERVICES INC., NO. 01 CH 8198 (filed May 16, 2001). CCC was not served with the SCALES complaint until November of 2001. These cases contain allegations and claims that are substantially similar to the cases pending in Madison County, Illinois described above.

offered plaintiff an inadequate amount for his or her automobile and that CCC's Total Loss valuation service provides values that do not comply with the applicable Georgia regulations. The plaintiffs assert various common law and statutory claims against the defendants and seek to represent a nationwide class of insurance company customers. Additionally plaintiffs seek to represent a similar statewide sub-class for claims under the Georgia RICO statute. Plaintiffs seek unspecified compensatory, treble and punitive damages, as well as an award of attorneys' fees and expenses.

On August 2, 2000, a putative class action purportedly on behalf of certain residents of fourteen states was filed in the Franklin County Court of Common Pleas, State of Ohio, against Nationwide Mutual Insurance Company and CCC. WHITWORTH v. NATIONWIDE MUTUAL INS. CO. and CCC INFORMATION SERVICES INC., Case No. CVH-08-6980 (filed August 2, 2000). The Whitworth lawsuit was filed by a group of plaintiffs' attorneys that includes certain attorneys who previously filed the McGOWAN, DASHER, and WALKER cases (reported above). The plaintiffs assert substantially the same claims and seek substantially the same relief as in those previously filed Fulton County actions. The plaintiffs further allege that CCC's Total Loss valuation service provides values that do not comply with applicable regulations in Ohio and other states. Subsequent to filing, the plaintiff amended the complaint to purport to represent a national class of certain customers of Nationwide Mutual Insurance Company.

Together with its co-defendant Nationwide, CCC has entered into an agreement to settle the WHITWORTH case. If consummated, the proposed settlement in the WHITWORTH case would resolve all claims on behalf of a national settlement class consisting of all policyholders of Nationwide (and all its affiliates): (a) who have submitted first party property damage claims; (b) whose vehicle was declared a total loss; (c) for whose vehicle Nationwide (or its affiliate) received a valuation of the total loss vehicle from CCC; and (d) who received payment for the total loss claim between January 1, 1987 and the date on which notice of the settlement is mailed. These class members constitute approximately 5 percent of CCC's total loss transaction volume during the period covered by the lawsuit. Class members who do not opt out of the settlement would release any and all claims against CCC and Nationwide (and its affiliates) arising out of or relating to first party property damage claims made to Nationwide (or its affiliates) and/or our CCC's valuation of their total loss vehicles for Nationwide (or its affiliates). Class members who exercise their right to opt out of the settlement, however, would not be bound by the settlement and would not release any claims as part of the settlement.

Pursuant to the proposed settlement, Nationwide has agreed to provide certain cash compensation to members of the class who submit timely and accurate claim forms. In addition, Nationwide has agreed to pay for the costs of notice and administration of the settlement as well as class counsel's attorneys' fees and expenses (up to the amount of $8,750,000) that may be awarded by the Court. Pursuant to the settlement agreement, CCC has agreed to provide certain information necessary to identify and provide notice to class members as well as the information necessary to administer the settlement. In addition, CCC has agreed to the entry of injunctive relief requiring CCC, for a period of three years, to undertake additional periodic studies to validate certain of the information used in its Total Loss valuation service. CCC has agreed to enter into the settlement agreement for the purpose of avoiding the expense and distraction of protracted litigation, without any express or implied acknowledgment of any fault or liability to the Plaintiffs, the settlement class, or anyone else.

The settlement agreement does not require any cash contribution by CCC towards the monetary compensation for the class, the cost of notice and administration, or class counsel's attorneys' fees and expenses. CCC estimates that the cost to CCC of providing information necessary to identify and provide notice to class members and the information necessary to administer the settlement, together with the cost of complying with the proposed injunctive relief, would not, on a yearly basis, have a material impact on operating cash flow. Nationwide has previously demanded indemnification from CCC in connection with certain litigation matters involving CCC's Total Loss valuation service, including the WHITWORTH case. That demand is unaffected by the settlement agreement in the

WHITWORTH case. Nationwide's indemnification demand was one of the indemnification demands discussed in more detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. CCC has asserted various defenses to Nationwide's indemnification demand.

The Court granted preliminary approval of the WHITWORTH settlement on March 8, 2002, and the settlement is subject to final Court approval at a fairness hearing. Also, under certain circumstances, Nationwide has the right to withdraw from the settlement and cancel the settlement agreement prior to the fairness hearing. If the proposed settlement is not approved by the Court at the fairness hearing, or if the Court approves the settlement and that approval is vacated, modified, or reversed on appeal, the settlement agreement would be terminated.

The proposed settlement of the WHITWORTH case would not affect any other pending lawsuits relating to CCC's Total Loss valuation service involving any of CCC's other insurance company customers. The cost to CCC to settle any such other pending lawsuits could be materially greater than the cost of settling the WHITWORTH case.

In 2001, one of the plaintiffs' attorneys who filed the McGOWAN, DASHER AND WALKER cases discussed above filed additional complaints against CCC and certain of its insurance company customers. Those cases are BEARDEN v. GEORGIA FARM BUREAU INSURANCE COMPANIES and CCC INFORMATION SERVICES INC., Civil Action File No. 01-CV-22114-1 (filed May 21, 2001 in the Superior Court of Fulton County, Georgia); STOUDEMIRE v. METROPOLITAN GENERAL INSURANCE COMPANY, MET LIFE AUTO & HOME INSURANCE AND CCC INFORMATION SERVICES INC., Civil Action No. CV 01-3135-TSM (filed October 16, 2000 in the Circuit Court of Montgomery County, Alabama); HECKLER v. PROGRESSIVE EXPRESS INSURANCE COMPANY, PROGRESSIVE AMERICAN INSURANCE COMPANY and CCC INFORMATION SERVICES INC., Case No. 00003573 (filed against CCC on November 5, 2001 in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillborough County, Florida); and ROMERO v. VESTA FIRE INSURANCE CORPORATION and CCC INFORMATION SERVICES INC., Case No. 367282 (filed November 19, 2001 in the Superior Court of the State of California, County of Riverside). The plaintiffs in these cases allege that the insurer, using a valuation provided by CCC, offered them an inadequate amount for their automobile. The plaintiffs also allege that CCC's Total Loss valuation service provides values that do not comply with applicable state regulations governing total loss claims settlements. On that basis, the plaintiffs assert various claims against CCC and seek an award of unspecified compensatory and punitive damages, attorneys' fees, interest and costs. The plaintiff in ROMERO also seeks injunctive and declaratory relief. The STOUDEMIRE and HECKLER cases are pled as individual actions, while the plaintiff in BEARDEN seeks to represent a class of Georgia Farm Bureau customers whose total loss claims were adjusted using a CCC valuation and the plaintiff in ROMERO seeks to represent a class of certain California residents insured under a Vesta California policy whose total loss claims were adjusted using a CCC valuation.

On or about January 18, 2002, a complaint was filed in the State Court of Fulton County, Georgia against CCC, one of its insurance company customers, Allstate, and other defendants. The case is captioned HUTCHINSON v. ALLSTATE INSURANCE COMPANY, BRANCH BANKING & TRUST COMPANY, SADISCO CORPORATION, and CCC INFORMATION SERVICES INC., Civil Action No. 02V5027697C (filed January 18, 2002). The plaintiffs in the HUTCHINSON case allege that their insurer declared their vehicle a total loss despite a dispute over the value of the vehicle. Plaintiffs further allege that, despite their instructions not to dispose of the vehicle, Allstate had the car towed and subsequently sold. Plaintiffs allege that CCC provided Allstate with a reduced fair market value for their vehicle. Plaintiffs assert various common law claims against CCC and the other defendants, as well as a claim under the Georgia RICO statute. Plaintiffs seek an award of unspecified compensatory and punitive damages and attorneys' fees.

CCC is aware of two class certification rulings in cases involving CCC's Total Loss valuation service, to which CCC is not a party. In JOSEPH JOHNSON ET AL. v. FARMERS INSURANCE EXCHANGE, NO. D035649 (SUPERIOR COURT NO. 726452), the California Court of Appeal reversed an order by the San Diego County Superior Court denying class certification. The Court of Appeal ordered the Superior Court to certify a class consisting of all California residents insured under a Farmers California private party passenger vehicle policy who, from December 10, 1994 through the present, received a first party total loss settlement or settlement offer that was less than the CCC base value because of a deduction for one or more condition adjustments, and whose overall vehicle condition was at least average and up to, but not including, "dealer ready." CCC is not a party to the JOHNSON case but has become aware of the Court of Appeal's class certification ruling.

In PAK, ET AL. v FARMERS GROUP, INC. AND FARMERS INSURANCE EXCHANGE, CASE NO. CV98-04873, the Second Judicial District Court of the State of Nevada in and for Washoe County has certified a class of Nevada customers insured by Farmers whose total loss claims were paid on the basis of valuations prepared by CCC. CCC is not a party to the PAK case but has become aware of the court's class certification ruling. CCC has also become aware that the Nevada Supreme Court has agreed to review the trial court's class certification ruling and the case has been stayed pending that review.

Four of CCC's automobile insurance company customers have made contractual and, in some cases, also common law indemnification claims against CCC for litigation costs, attorneys' fees, settlement payments and other costs allegedly incurred by them in connection with litigation relating to their use of CCC's Total Loss valuation product. These four claims include the indemnification demand made by Nationwide Mutual Insurance Company discussed above. CCC has asserted various defenses to these indemnification claims.

CCC intends to vigorously defend its interests in all of the above described lawsuits and claims to which it is a party and support its customers in other actions. Due to the numerous legal and factual issues that must be resolved during the course of litigation, CCC is unable to predict the ultimate outcome of any of these actions. If CCC was held liable in any of the actions (or otherwise concludes that it is in CCC's best interest to settle any of them), CCC could be required to pay monetary damages (or settlement payments). Depending upon the theory of recovery or the resolution of the plaintiff's claims for compensatory and punitive damages, or potential claims for indemnification or contribution by CCC's customers in any of the actions, these monetary damages (or settlement payments) could be substantial and could have a material adverse effect on CCC's business, financial condition or results of operations. CCC is unable to estimate the magnitude of its exposure, if any, at this time. As additional information is gathered and the lawsuits proceed, CCC will continue to assess its potential impact.

In addition to the foregoing, two cases previously disclosed by CCC during 2001 were resolved during the last quarter of 2001.

In or around March of 2001, CCC was added as a defendant in a case that had been filed previously against one of its insurance company customers. The case, which is captioned LAWHON v. NATIONWIDE INSURANCE COMPANY and CCC INFORMATION SERVICES INC., No. CIV-01-001-B, was filed in the United States District Court for the Eastern District of Oklahoma. The plaintiffs alleged that Nationwide, using a valuation provided by CCC, offered plaintiffs an inadequate amount for their automobile. The plaintiffs also alleged that CCC's Total Loss valuation service produces values that do not comply with applicable state regulations governing total loss claims settlements. The plaintiffs asserted various common law claims against CCC, and they sought an award of unspecified compensatory and punitive damages, penalties, attorneys' fees, interest, and costs. The plaintiffs' attorneys who filed the LAWHON case included one of the plaintiffs' attorneys who filed the WHITWORTH, DASHER, McGOWAN, WALKER, BEARDEN, STOUDEMIRE and HECKLER

cases discussed above. The case was resolved during the last quarter of 2001 and the plaintiffs' claims against CCC and its co-defendant, Nationwide, have been dismissed with prejudice. The resolution of this case will not have a material adverse impact on CCC's results of operations or financial condition.

On May 30, 2001, CCC filed an action in the Circuit Court of Cook County, Illinois against Superior Insurance Group, Inc. seeking to recover approximately $5.2 million in fees due under a Quality Audit Services Agreement between CCC and Superior. CCC INFORMATION SERVICES INC. v. SUPERIOR INSURANCE GROUP, INC., Case No. 01L6337 (filed May 30, 2001). On July 27, 2001, Superior filed a counterclaim alleging that CCC fraudulently induced Superior to enter into the Quality Audit Services Agreement, a service provided by our CCC Consumer Services segment, failed to perform the services promised, and overcharged Superior for the services provided. On that basis, Superior asserted claims against CCC for breach of contract and fraudulent inducement. Superior sought compensatory damages in an amount not less than $1 million and punitive damages in an amount not less than $2 million. Superior also sought declaratory relief regarding the termination of the agreement as well as an accounting. CCC filed an answer denying Superior's counterclaims and asserting various affirmative defenses. CCC and Superior have reached an agreement to settle the litigation in exchange for a payment to CCC by Superior in the amount of $220,000 and an exchange of mutual releases. The parties are currently in the process of documenting this settlement, after which the action will be dismissed in its entirety by both parties.

Item 4. Submission of Matters to A Vote of Security Holders

None.

PART II

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

Our common stock (symbol: CCCG) is traded on the Nasdaq National Market ("Nasdaq"). For the last two fiscal years, low and high sales prices of our common stock were as follows:

	2001								2000
	Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Low	$	5.37	$	4.95	$	5.94	$	6.75	$	6.25	$	8.06	$	8.88	$	14.88
High	$	8.15	$	7.47	$	10.35	$	9.88	$	9.75	$	11.25	$	18.25	$	30.13

Since our initial public offering of common stock in August of 1996, no dividends have been declared on shares of our common stock and our Board of Directors currently has no intention of declaring such dividends. As of March 26, 2002, there were 25,766,065 shares of common stock outstanding. There were 80 stockholders of record on March 22, 2002.

Item 6. Selected Financial Data

Below are the Company's condensed consolidated statements of operations and selected balance sheet information for the five years ended December 31, 2001. The selected balance sheets as of December 31, 2001 and 2000 and the condensed consolidated statement of operations for the five years ended December 31, 2001 have been restated to reflect the CCC Consumer Services segment as a discontinued operation in accordance with Accounting Principles Board Statement No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.

		Year Ended December 31,
		2001			2000			1999			1998			1997
		(In Thousands, Except Per Share Data)
Consolidated Statement of Operations Data:
Revenues		$	187,941		$	184,641		$	179,021		$	168,811		$	151,293
Expenses:
	Operating expenses		175,768			181,018			160,751			145,045			126,310
	Restructuring charges		10,499			6,017			2,242			1,707			—
	Litigation settlements		4,250			2,375			—			1,650			—

Operating income (loss)			(2,576	)		(4,769	)		16,028			20,409			24,983
Interest expense			(5,680	)		(3,135	)		(1,358	)		(252	)		(139	)
Other income (expense), net			(248	)		5,101			412			697			1,505
Gain on exchange of investment securities, net			—			18,437			—			—			—
Loss on investment securities and notes			(28,267	)		—			—			—			—
CCC Capital Trust minority interest expense			(1,371	)		—			—			—			—
Equity in losses of ChoiceParts investment			(2,486	)		(2,071	)		—			—			—

Income (loss) from continuing operations before income taxes			(40,628	)		13,563			15,082			20,854			26,349
Income tax (provision) benefit			18,329			(3,452	)		(7,352	)		(8,997	)		(10,917	)

Income (loss) from continuing operations before equity losses			(22,299	)		10,111			7,730			11,857			15,432
Equity in net losses of affiliates			(2,354	)		(15,650	)		(6,645	)		(11,658	)		—

Income (loss) from continuing operations			(24,653	)		(5,539	)		1,085			199			15,432
Income (loss) from discontinued operations, net of income taxes			(5,972	)		(3,704	)		(333	)		(280	)		400

Net income (loss)			(30,625	)		(9,243	)		752			(81	)		15,832
Dividends and accretion on mandatorily redeemable preferred stock			—			—			(2	)		43			(365	)

Net income (loss) applicable to common stock		$	(30,625	)	$	(9,243	)	$	750		$	(38	)	$	15,467

Income (loss) per common share—basic
Income (loss) applicable to common stock from:
	Income (loss) from continuing operations	$	(1.12	)	$	(0.25	)	$	0.05		$	0.01		$	0.63
	Income (loss) from discontinued operations		(0.27	)		(0.17	)		(0.02	)		(0.01	)		0.02

Net income (loss) applicable to common stock		$	(1.39	)	$	(0.42	)	$	0.03		$	—		$	0.65

Income (loss) per common share—diluted
Income (loss) applicable to common stock from:
	Income (loss) from continuing operations	$	(1.12	)	$	(0.25	)	$	0.05		$	0.01		$	0.60
	Income (loss) from discontinued operations		(0.27	)		(0.17	)		(0.02	)		(0.01	)		0.02

Net income (loss) applicable to common stock		$	(1.39	)	$	(0.42	)	$	0.03		$	—		$	0.62

Weighted average shares outstanding:
	Basic		21,967			21,851			22,856			24,616			23,807
	Diluted		21,967			21,851			23,162			25,188			24,959

		December 31,
		2001			2000			1999			1998		1997
		(In Thousands)
Consolidated Balance Sheet Data:
	Cash and marketable securities	$	766		$	912		$	1,378		$	1,526	$	32,118
	Working capital		(20,256	)		(24,886	)		(3,868	)		3,281		28,735
	Net assets of discontinued operations		—			4,848			—			—		—
	Total assets		62,194			94,688			84,549			79,018		83,494
	Current portion of long-term debt		421			314			440			—		111
	Net liabilities of discontinued operations		536			—			—			—		—
	Long-term debt, excluding current maturities		7,145			42,000			24,685			11,000		—
	Mandatorily redeemable preferred stock		13,370			—			—			688		5,054
	Stockholders' equity (deficit)		(6,811	)		2,118			15,261			35,303		45,827

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

Cautionary Statement Regarding Forward-Looking Statements

In addition to historical facts or statements of current conditions, this Form 10-K, including the following management's discussion and analysis of financial condition and results of operations, contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. These may include statements regarding market prospects for our products, sales and earnings projections, and other statements regarding matters that are not historical facts. Some of these forward-looking statements may be identified by the use of words in the statements such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," or other words and terms of similar meaning. Our performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions affecting the technology industry as well as more specific risks and uncertainties such as those set forth under "Certain Risks Related to Our Business" and elsewhere in this Form 10-K. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such forward-looking statements. Furthermore, we do not intend, nor are we obligated, to update publicly any forward-looking statements. This discussion is permitted by the Private Securities Litigation Reform Act of 1995. The following discussion should be read together with the Company's consolidated financial statements and notes thereto, appearing elsewhere in this Form 10-K.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to our accounts receivable, net, fair value of financial instruments, goodwill, income taxes, commitments and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies relate to those policies that are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments.

Accounts Receivable, net. Accounts receivable as presented in the accompanying consolidated balance sheet are net of reserves for customer allowances and doubtful accounts. We determine allowances for accounts receivable based on specific identification of customer accounts requiring allowances and the application of a predetermined percentage to the remaining accounts receivable balances.

Deferred Income Taxes. Deferred income taxes are provided for timing differences in recognizing certain income and expense items for financial reporting purposes. Such deferred income taxes primarily relate to the timing of recognition of certain revenue items, the timing of the deductibility of certain reserves and accruals for income tax purposes. We establish a tax valuation allowance to the extent that it is more likely than not that the deferred tax assets will not be realizable against future taxable income. During 2001 we recorded a net loss of $27.1 on the write-off of the ChannelPoint investment and note receivable, including accrued interest. For tax purposes, $20.8 million of this loss will be considered a capital loss which can only be offset with net capital gains. We believe that it is more likely than not that the capital loss will not be realized; therefore, a valuation allowance has been established for this item. For tax purposes, we have incurred a domestic net operating loss of $32.2 million during 2001. The realization of these net operating loss deferred assets is more likely than not, therefore, we have not established a valuation allowance related to these assets. We also have foreign net operating losses related to our former CCC International operations. We have established a valuation allowance for the full amount of these foreign net operating losses because realization of these assets is not more likely than not.

Goodwill. The excess of purchase price paid over the estimated fair value of identifiable tangible and intangible net assets of acquired businesses is capitalized and amortized on a straight-line basis over periods not exceeding 20 years. When events or changes in circumstances indicate that the carrying value of such assets may not be recoverable, we perform an analysis of undiscounted future cash flows to determine whether recorded amounts are impaired. In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 142 will be effective for the Company beginning January 1, 2002. Under SFAS 142, goodwill will no longer be amortized to earnings, but instead will be reviewed for impairment on at least an annual basis. We adopted SFAS 142 on January 1, 2002 and ceased the amortization of goodwill against earnings. We expect the impact of the adoption of SFAS 142 to reduce amortization expense by $0.8 million in 2002.

The unamortized goodwill balance as of December 31, 2001 was $4.9 million. This goodwill originated from a 1988 acquisition that included the Total Loss service. We currently generate approximately 26% of our total revenue from Total Loss and related services. In the future, net cash flows from the Total Loss service will be utilized in determining if the goodwill is impaired. At January 1, 2002, no such impairment existed.

Fair Value of Financial Instruments. The carrying amount of our financial instruments approximates their estimated fair value based upon market prices for the same or similar type of financial instruments. We perform an impairment review whenever events or changes in circumstances indicate that the carrying value of these investments and notes receivable may not be recoverable. Factors we consider important which could trigger an impairment review include market conditions, valuations for similar companies, financial performance and a going concern risk. During the year ended December 31, 2001, we determined that certain investments and notes receivable had incurred a decline in value that was considered other than temporary. We determined that the carrying value of our investments in and related notes receivable from ChannelPoint and Info4cars may not be recoverable based upon the existence of one or more of the above impairment factors. We recorded a charge of $22.7 million and $0.3 million for ChannelPoint and Info4cars, respectively, which represented the remaining carrying value of these investments. In addition, we provided allowances of $4.9 million and $0.8 million for the notes receivables and accrued interest from ChannelPoint and Info4cars, respectively.

Commitments and Contingencies. Loss contingencies are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. Disclosure is required when there is a reasonable possibility that the ultimate loss will exceed the recorded provision. Contingent liabilities are often resolved over long time periods. Estimating probable losses requires analysis of multiple forecasts that often depend on judgments about potential actions by third parties such as regulators.

Liquidity and Capital Resources, Including "Off-Balance Sheet Arrangements"

Liquidity and Capital Resources

During the year ended December 31, 2001, net cash provided by operating activities was $18.7 million. Net proceeds from the sale of Trust Preferred Securities and warrants and the Rights Offering and related transactions were approximately $14 million and $18.1 million, respectively. The Company used $35.5 million, net, for repayments on CCC's former credit facility, $2.9 million for the purchase of equipment and software, and $3.1 million and $2.1 million for investments in Enterstand and ChoiceParts, respectively.

Trust Preferred Securities

On February 23, 2001, CCC Capital Trust ("CCC Trust"), a business trust controlled by CCCG, issued 15,000 Trust Preferred Securities ("Trust Preferred Securities") and CCCG issued 100 shares of its Series F Preferred Stock, par value $1.00 per share, and a warrant to purchase 1,200,000 shares of its common stock at an exercise price of $10.00 per share to Capricorn Investors III, L.P., one of our existing stockholders. CCCG and CCC Trust received an aggregate purchase price of $15.0 million from the sale of these securities. The proceeds from the sale were used for general corporate purposes.

In connection with the issuance of the Trust Preferred Securities by CCC Trust and our related purchase of all of CCC Trust's common securities, we issued an Increasing Rate Note Due 2006 in the principal amount of approximately $15.5 million, due February 23, 2006 ("Increasing Rate Note"), to CCC Trust. The sole asset of CCC Trust is the Increasing Rate Note and any interest accrued thereon. The interest payment dates on the Increasing Rate Note correspond to the distribution dates on the Trust Preferred Securities. The Trust Preferred Securities mature simultaneously with the Increasing

Rate Note. We unconditionally guaranteed all of the Trust Preferred Securities to the extent of the assets of CCC Trust.

The Increasing Rate Note is subordinated to our bank debt. Cumulative distributions on the Trust Preferred Securities accrue at a rate of (i) 9% per annum, payable in cash or in kind at our option, for the first three years from February 23, 2001 and (ii) 11% per annum, payable in cash, thereafter. The Trust Preferred Securities are mandatorily redeemable on February 23, 2006. In addition, all or any portion of the outstanding Trust Preferred Securities may be called for redemption at our option at any time on or after February 23, 2004. The redemption price for both the mandatory and the optional redemptions is equal to the liquidation amount of the Trust Preferred Securities plus accrued but unpaid distributions. CCCG issued payment-in-kind notes for quarterly interest payments due on March 31, June 30, September 30, and December 31, 2001.

On November 30, 2001, the Indenture relating to the Trust Preferred Securities was amended to permit us to conduct a rights offering and enter into a new bank credit facility. In addition, the 1,200,000 warrants issued to Capricorn Investors III, L.P. were amended to change the exercise price to $6.875, revised from the original exercise price of $10.00, in consideration for certain waivers and amendments that allowed us to conduct a rights offering and execute a new credit facility agreement.

Credit Facility

On November 30, 2001, in conjunction with a $20 million rights offering (the "Rights Offering"), CCC entered into a new $30 million credit facility agreement (the "New Credit Facility") with two lenders from the existing credit facility. The New Credit Facility replaced CCC's former credit facility. As compared to the former credit facility, the New Credit Facility provides CCC with improved terms and additional flexibility. The New Credit Facility contains negative covenants that, among other things, restrict CCC's ability to sell or transfer assets, make certain investments and make capital expenditures. In addition, the New Credit Facility has certain covenants that require CCC to maintain specified levels of quarterly operating cash flow, debt coverage, fixed charge coverage and net worth. CCC is also required to provide the bank group with monthly, quarterly and annual financial reporting. The New Credit Facility matures on November 30, 2004. The New Credit Facility is guaranteed by CCC and is secured by a blanket first priority lien on substantially all of the assets of CCC and its subsidiaries. All advances under the New Credit Facility bear interest, at CCC's election, at the London Interbank Offered Rate ("LIBOR") plus a variable spread based on our leverage ratio or the prime rate in effect from time to time plus a variable spread based on our leverage ratio. CCC pays a commitment fee of 0.50% on any unused portion of the New Credit Facility. As of December 31, 2001, the outstanding New Credit Facility balance was $6.5 million.

Rights Offering

On June 29, 2001, CCCG filed with the Securities and Exchange Commission ("SEC") a Form S-3 Registration Statement to register $100 million of securities. The SEC declared this shelf registration statement effective on July 27, 2001. On November 7, 2001, we announced the approval by the Board of Directors of the Rights Offering to be effectuated pursuant to the shelf registration statement previously filed with the SEC on June 29, 2001.

Upon completion of the Rights Offering on December 31, 2001, the total number of outstanding shares of common stock increased by approximately 3.6 million shares, or approximately 15.8%. We utilized net proceeds of $18.1 million from the Rights Offering to reduce our outstanding debt.

aggregate of $20 million. In consideration for this, we issued these stockholders 293,000 warrants to purchase shares of our common stock at a price of $5.50 per share.

The closing of the New Credit Facility prior to the Rights Offering required the utilization of an interim loan provided by White River Ventures and Capricorn Investors II and III L.P. as part of their agreement to purchase all those shares not subscribed for by our other stockholders or warrant holders. In consideration for this, we issued White River Ventures and Capricorn Investors II and III L.P. 99,612 warrants to purchase shares of our common stock at a price of $5.50 per share. This interim loan was repaid upon the closing of the Rights Offering on December 31, 2001.

Our principal liquidity requirements consist of our operating activities, including product development, our investments in internal and customer capital equipment and funding requirements for our ChoiceParts investment. We have the ability to operate with a working capital deficit, as we receive substantial payments from our customers for our services in advance of recognizing the revenues and the costs incurred to provide such services. We invoice each customer one month in advance for the following month's Pathways Collision Estimating software services. As such, we typically receive cash from our customers prior to recognizing the revenue and incurring the expense for the services provided. These amounts are reflected as deferred revenue in the consolidated balance sheet until these amounts are earned and recognized as revenues. In addition, management believes that cash flows from operations, our available New Credit Facility, the funding we received from the Trust Preferred Securities and the Rights Offering will be sufficient to meet our liquidity needs for the year ending December 31, 2002. There can be no assurance, however, that we will be able to satisfy our liquidity needs in the future without engaging in financing activities beyond those described above.

Off-Balance Sheet Arrangements

We are not party to any transactions, arrangements and other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect liquidity or the availability of or requirements for capital resources.

Contractual Obligations and Commercial Commitments

Our contractual obligations under capital leases, operating leases and revolving credit facility are summarized below.

	Total		2002		2003		2004		2005		2006		Thereafter
Credit Facility	$	6,500	$	—	$	—	$	6,500	$	—	$	—	$	—
Capital lease obligations	$	1,267	$	552	$	552	$	163	$	—	$	—	$	—
Operating leases	$	37,484	$	11,539	$	8,769	$	6,271	$	3,342	$	2,668	$	4,895

Effects of Transactions with Related and Certain Other Parties

On February 23, 2001, CCC Trust issued 15,000 Trust Preferred Securities and CCCG issued 100 shares of its Series F Preferred Stock, par value $1.00 per share, and a warrant to purchase 1,200,000 shares of its common stock at an exercise price of $10.00 per share to Capricorn Investors III, L.P., one of our existing stockholders. CCCG and CCC Trust received an aggregate purchase price of $15.0 million from the sale of these securities. The proceeds from the sale were used for general corporate purposes.

Three of our largest institutional stockholders and warrant holders, White River Ventures, Inc. and Capricorn Investors II and III L.P., agreed to purchase their pro-rata share of the Rights Offering, as well as all of the shares not subscribed for by our other stockholders or warrant holders, up to an aggregate of $20 million. In consideration for this, we issued these stockholders 293,000 warrants to purchase shares of our common stock at a price of $5.50 per share.

In January 2002, we received a promissory note from the Chief Executive Officer and Chairman of the Board in the amount of $1.2 million for the purchase of 192,000 treasury shares at a price of $6.25 per share. This promissory note accrues interest, payable on an annual basis beginning March 1, 2003, at 6.75% and matures in January 2007.

In March 2002, CCC International and Hearst Communications terminated their Enterstand joint venture agreement, CCCG issued a warrant to Hearst Communications, exercisable for five years, to purchase up to 250,000 shares of the common stock of CCCG for $12 per share and CCC International purchased Hearst Communications' interest in the joint venture for a nominal sum.

Pro Forma Financial Results

We prepare and release quarterly unaudited financial statements prepared in accordance with generally accepted accounting principles ("GAAP"). We also disclose and discuss certain pro forma financial information in the related earnings release and investor conference call. This pro forma financial information excludes certain non-cash and special charges, consisting primarily of the shut down and sale of certain business segments, the amortization of deferred financing costs, impairment of notes receivable and equity investments and restructuring, lease abandonment and litigation costs for 2001. We believe the disclosure of the pro forma financial information helps investors more meaningfully evaluate the results of our ongoing operations. However, we urge investors to carefully review the GAAP financial information included as part of our Quarterly Reports on Form 10-Q, or Annual Reports on Form 10-K, and our quarterly earnings releases and compare that GAAP financial information with the pro forma financial results disclosed in our quarterly earnings releases and investor calls.

Results of Operations

The Company's results of operations for the periods indicated are set forth below:

		Year Ended December 31,
		2001			2000			1999
		(In Thousands)
Revenues:
	CCC U.S	$	186,259		$	176,889		$	173,723
	CCC International		1,682			7,752			5,298

Total revenues			187,941			184,641			179,021
Expenses:
	Production and customer support		32,498			41,449			40,286
	Commissions, royalties and licenses		10,129			13,512			16,247
	Selling, general and administrative		90,892			86,663			73,146
	Depreciation and amortization		11,820			11,499			9,036
	Product development and programming		30,429			27,895			22,036
	Restructuring charges		10,499			6,017			2,242
	Litigation settlements		4,250			2,375			—

Operating income (loss)			(2,576	)		(4,769	)		16,028
Interest expense			(5,680	)		(3,135	)		(1,358	)
Other income (expense), net			(248	)		5,101			412
Gain on exchange of investment securities, net			—			18,437			—
Loss on investment securities and notes			(28,267	)		—			—
CCC Capital Trust minority interest expense			(1,371	)		—			—
Equity in losses of ChoiceParts investment			(2,486	)		(2,071	)		—

Income (loss) from continuing operations before income taxes			(40,628	)		13,563			15,082
Income tax (provision) benefit			18,329			(3,452	)		(7,352	)

Income (loss) from continuing operations before equity losses			(22,299	)		10,111			7,730
Equity in net losses of affiliates			(2,354	)		(15,650	)		(6,645	)

Income (loss) from continuing operations			(24,653	)		(5,539	)		1,085
Loss from discontinued operations, net of income taxes			(5,972	)		(3,704	)		(333	)

Net income (loss)		$	(30,625	)	$	(9,243	)	$	752

Net Income (Loss) as a Percentage of Revenue

To aid in your analysis and understanding, the following table sets forth our revenues, expenses and net income (loss), as a percentage of revenue for the last three fiscal years:

		Year Ended December 31,
		2001		2000		1999
Revenues:
	CCC U.S	99.1	%	95.8	%	97.0	%
	CCC International	0.9		4.2		3.0

Total revenues		100.0		100.0		100.0
Expenses:
	Production and customer support	17.3		22.5		22.5
	Commissions, royalties and licenses	5.4		7.3		9.1
	Selling, general and administrative	48.3		46.9		40.8
	Depreciation and amortization	6.3		6.2		5.0
	Product development and programming	16.2		15.1		12.3
	Restructuring charges	5.6		3.3		1.3
	Litigation settlements	2.3		1.3		—

Operating income (loss)		(1.4	)	(2.6	)	9.0
Interest expense		(3.0	)	(1.7	)	(0.8	)
Other income (expense), net		(0.1	)	2.8		0.2
Gain on exchange of investment securities, net		0.0		10.0		—
Loss on investment securities and notes		(15.1	)	—		—
CCC Capital Trust minority interest expense		(0.7	)	—		—
Equity in losses of ChoiceParts investment		(1.3	)	(1.1	)	—

Income (loss) from continuing operations before income taxes		(21.6	)	7.4		8.4
Income tax (provision) benefit		9.7		(1.9	)	(4.1	)

Income (loss) from continuing operations before equity losses		(11.9	)	5.5		4.3
Equity in net losses of affiliates		(1.2	)	(8.5	)	(3.7	)

Income (loss) from continuing operations		(13.1	)	(3.0	)	0.6
Income (loss) from discontinued operations, net of income taxes		(3.2	)	(2.0	)	(0.2	)

Net income (loss)		(16.3	)%	(5.0	)%	0.4	%

2001 Compared with 2000

For the year ended December 31, 2001, we reported a net loss of $(30.6) million, or $(1.39) per share on a diluted basis, versus a net loss applicable to common stock of $(9.2) million, or $(0.42) per share on a diluted basis, for the same period last year. For the year ended December 31, 2001, we had an operating loss of $(2.6) million compared to an operating loss of $(4.8) million in 2000. The decrease in operating losses of $2.2 million from 2000 was principally the result of an increase in revenues of $3.3 million, or 1.8%. Operating expenses increased $1.1 million, or 0.58%.

For 2001, CCC U.S. had revenues of $186.3 million and CCC International had revenues of $1.6 million, which represented 99.1% and 0.9% of the total 2001 consolidated revenues, respectively. For 2000, CCC U.S. had revenues of $176.9 million and CCC International had revenues of $7.8 million, which represented 95.8% and 4.2% of the total 2000 consolidated revenues, respectively. These changes were primarily due to an increase in CCC U.S.'s revenue from its EZNet communications network and its Pathways Appraisal Quality Solution and Pathways Collision Estimating products, and our decision in the second quarter of 2001 to shut down CCC International.

In 2001, operating margins (operating income (loss) as a percentage of revenue), for our two revenue producing segments were 0.50% for CCC U.S. and (206.2)% for CCC International compared to 3.1% for CCC U.S. and (131.2)% for CCC International in 2000. The operating margins for CCC U.S. include operating results for DriveLogic, previously reported as a segment, and shared services and exclude the results for the discontinued operations of CCC Consumer Services, which we wound down during 2001.

Revenues. Revenues for the year ended December 31, 2001 of $187.9 million were $3.2 million, or 1.8%, higher than the same period last year. The increase in revenues was primarily attributable to an increase in CCC U.S.'s revenue of $9.4 million, or 5.3%, from its EZNet communications network due to higher transaction volume and its Pathways Collision Estimating product due to an increase in the number of units used by automotive collision repair customers. Electronic Direct Repair, Pathways Appraisal Quality Solution and Recycled Parts Service, which comprised less than 15% of our total consolidated revenues in 2001, increased by approximately 30% in 2001 over the prior year. CCC International revenues decreased year-over-year by $6.2 million, or 78.3%, due to the Company's decision in June 2001 to shut down these operations. The decision to shut down the business was the result of continued underperformance and expected future losses.

Production and Customer Support. Production and customer support decreased from $41.4 million, or 22.5% of revenue, to $32.5 million, or 17.3% of revenue. The year over year decrease was due primarily to lower expenses associated with the Company's decision to shut down CCC International. The expenses related to CCC International decreased $8.0 million. In addition, CCC U.S.'s decrease was primarily due to lower headcount and associated costs related to improved efficiency in the customer support area including the consolidation of certain customer support functions from Glendora, California to our headquarters in Chicago, Illinois in March 2001.

Commissions, Royalties and Licenses. Commission, royalties and licenses decreased from $13.5 million, or 7.3% of revenues, to $10.1 million, or 5.4% of revenues. The decrease in dollars and as a percentage of revenues was due mainly to a reduction in license fees associated with our Pathways Enterprise Solution and Pathways Professional Advantage products. In the third quarter of 2000, we determined that certain prepaid marketing fees paid to a third party associated with these products were impaired. This determination was based on an analysis of projected future revenue and profitability streams of the shop management products associated with this marketing fee. As a result we recorded a charge of $1.9 million in connection with the write-off of this asset. In addition, outside sales commissions paid to independent sales representatives decreased from the completion of the conversion of these representatives to salaried employees in the first half of 2000.

Selling, General and Administrative. Selling, general and administrative increased from $86.7 million, or 46.9% of revenues, to $90.9 million, or 48.4% of revenues. This increase is primarily attributable to the investments of $3.0 million made in the first half of 2001 in DriveLogic, when DriveLogic was operated as a separate business unit. In addition, CCC U.S. recorded a fourth quarter 2000 gain of $4.3 million related to the final resolution of previously accrued expenses associated with a vendor agreement focused on technology testing and rollout of certain products and services. Other contributing factors were the conversion of independent sales representatives to salaried employees and higher outside legal fees.

Depreciation and Amortization. Depreciation and amortization increased from $11.5 million, or 6.2% of revenues, to $11.8 million, or 6.3% of revenues. The increase was mainly the result of additional amortization of internal use software costs of $0.6 million, primarily a new human resources and payroll system implemented in 2000. Depreciation and amortization also increased as a result of additional investments in computer equipment and software, leasehold improvements and office furniture associated with our former DriveLogic segment. Partially offsetting this increase was a decrease of $1.1 million in CCC International due to our decision to shut down the operations in the U.K.

Product Development and Programming. Product development and programming increased from $27.9 million, or 15.1% of revenue, to $30.4 million, or 16.2% of revenue. This increase occurred during the first half of 2001 due to new product development efforts related to DriveLogic, a former segment of CCC. In June of 2001, we instituted a cost savings plan as part of a company-wide effort to improve profitability. As a result, we consolidated the development efforts of CCC U.S. and DriveLogic and reduced expenses in the second half of the year by $2.8 million.

Restructuring Charges. In June 2001, we announced a set of strategic decisions as part of a company-wide effort to improve profitability. As a result, we recorded a restructuring charge of $2.8 million, which consisted primarily of severance and outplacement costs related to the termination of 130 employees. During the fourth quarter of 2001, we recorded a charge of $4.3 million to write off excess office space in Chicago, formerly occupied by DriveLogic. This charge was recorded after a complete review of our short-term and long-term facility requirements. The charge included future rent commitments of $5.4 million and the write off of leasehold improvements of $2.1 million, net of expected future sublease income of $3.2 million. See Note 8 of the Notes to Consolidated Financial Statements—Restructuring Charges.

In addition, we recorded a charge of $3.4 million in June 2001 related to our decision to shut down CCC International in order to focus on U.S. market opportunities. This charge consisted of a write-off of goodwill of $1.1 million, contractual commitments, including office space, of $0.5 million and severance and related costs to terminate 39 employees of $1.8 million. In December 2000, we decided to shutdown the D.W. Norris outsourcing business due to the significant losses incurred since the acquisition, the continued deterioration of the overall business and the poor long-term assessment of the business. As a result, the Company recorded a charge of $6.0 million in the fourth quarter of 2000 to write-off the goodwill, severance and related costs to terminate approximately 86 employees, write-down the fixed assets to net realizable value and contractual commitments. See Note 8 of the Notes to Consolidated Financial Statements—Restructuring Charges.

Litigation Settlements. We recorded a charge of $4.3 million, net of an expected insurance reimbursement of $2.0 million, in the fourth quarter of 2001 as an estimate of the amount we will contribute towards the potential settlement of the largest of the class action lawsuits related to our Total Loss valuation service. This charge was based on Statement of Financial Accounting Standards No. 5 "Accounting For Contingencies" that establishes standards of financial accounting and reporting for loss contingencies. It requires accrual by a charge to income for an estimated loss from a loss contingency if two conditions are met: (a) information available prior to issuance of the financial statements indicates that it is probable that as asset has been impaired or a liability has been incurred at the date of the financial statements, and (b) the amount of loss can be reasonably estimated. CCC anticipates that the settlement would eliminate the viability of class claims in 14 of the 21 class action suits pending against the Company related to the Total Loss service. Upon completion, the anticipated settlement would resolve potential claims arising out of approximately 30% of the Company's total transaction volume during the time period covered by the lawsuit. The Company currently anticipates that the proposed settlement would include a resolution of any potential claims for indemnification or contribution by its customers relating to the transactions covered by the settlement.

In 2000, we recorded a charge of $1.4 million related to settlement costs of an arbitration proceeding before the American Arbitration Association captioned Autobody Software Solutions, Inc. v. CCC Information Services Inc. In addition, we recorded a charge of $1.0 million in the fourth quarter of 2000 related to settlement costs of a litigation matter with American Salvage Pool Association. See Note 10 of the Notes to Consolidated Financial Statements—Litigation Settlements.

Interest Expense. Interest expense increased from $3.2 million in 2000 to $5.7 million in 2001. The increase from 2000 was driven by a higher level of borrowings, an increase in interest rates charged and higher amortization of deferred financing fees related to amendments to the Company's credit facility

agreement, including the write off of unamortized deferred financing fees of $1.4 million related to the prior credit facility.

Other Income (Expense), Net. Other income (expense), net decreased from $5.1 million in 2000 to $(0.2) million in 2001. The decrease from prior year was principally due to a $4.1 million gain recorded in the first quarter of 2000 on the termination of the sales and marketing agreement between InsurQuote Systems, Inc. and CCC. See Note 3 of the Notes to Consolidated Financial Statements—Investment in InsurQuote/ChannelPoint.

Gain on Exchange of Investment Securities, Net. We recorded a gain in the second quarter of 2000 of approximately $18.4 million in connection with the exchange of our equity investment in InsurQuote securities for ChannelPoint common stock. Net of income taxes, the gain was approximately $17.7 million. See Note 3 of the Notes to Consolidated Financial Statements—Investment in InsurQuote/ChannelPoint.

Loss on Investment Securities and Notes. We recorded a loss in the second quarter of 2001 of approximately $27.1 million in connection with the write-off of the investment in ChannelPoint, including a $4.9 million allowance related to a note receivable plus accrued interest. This charge was based on our evaluation of the collectibility of the note and the review of our carrying value of the ChannelPoint common stock. See Note 6 of the Notes to Consolidated Financial Statements—Investment in InsurQuote/ChannelPoint. In addition, we recorded a loss in the fourth quarter of 2001 of approximately $1.1 million for the write-off of our investment in Info4cars.com Inc., a provider of vehicle history reports and other products ("Info4cars"), including a $0.8 million allowance related to notes receivable plus accrued interest. This charge was based on a review of Info4cars' financial statements and representations from Info4cars' management.

Minority Interest Expense. We recorded minority interest expense of $1.4 million associated with the issuance on February 23, 2001 of the Trust Preferred Securities to Capricorn Investors III, L.P. The minority interest expense represents Capricorn Investors III, L.P.'s share of CCC Capital Trust's income.

Equity in Net Losses of ChoiceParts. We recorded a charge of $2.5 million for the year ended December 31, 2001 related to our share of the losses in ChoiceParts compared to a charge of $2.1 million for the period May 4, 2000 through December 31, 2000. ChoiceParts was established in May 2000. See Note 5 of the Notes to Consolidated Financial Statements—Investment in ChoiceParts.

Income Taxes. Income taxes decreased from $3.5 million, or 25.5% of income from continuing operations before taxes, to a tax benefit of $18.3 million, or 45.1% of losses from continuing operations before taxes. The tax benefit of $18.3 million reflects the tax effect of the shut down of CCC International of $13.9 million, the ChannelPoint allowance recorded of $2.4 million and other pre-tax losses of $2.0 million.

Equity in Net Losses of Affiliates. Equity in net losses of affiliates decreased from $15.7 million in 2000 to $2.4 million in 2001. The Enterstand losses during the year ended December 31, 2000 reflect the change in percentage of losses recognized from 19.9% to 85% for the period April 1, 2000 through September 30, 2000 which corresponded to the level of funding we provided Enterstand during that period. During the fourth quarter of 2000 and the first quarter of 2001, we funded 100% of the operating losses of Enterstand and recorded 100% of Enterstand's operating losses. In conjunction with our decision to reduce investments in and shut down CCC International, in May 2001, we ceased funding the operating losses of Enterstand. As a result, the operations of Enterstand ceased and we stopped recording the losses of Enterstand.

Discontinued Operations. Loss from discontinued operations, the former CCC Consumer Services segment, net of income taxes increased from $3.7 million in 2000 to $6.0 million in 2001.

2000 Compared with 1999

For the year ended December 31, 2000, we reported a net loss applicable to common stock of $(9.2) million, or $(0.42) per share on a diluted basis, versus net income applicable to common stock of $0.8 million, or $0.03 per share on a diluted basis, for the same period last year. For the year ended December 31, 2000, we had an operating loss of $(4.8) million compared to operating income of $16.0 million in 1999. The decline in operating income of $20.8 million from 1999 was principally the result of an increase in operating expenses. Operating expenses increased $26.4 million, or 16.2%, reflecting a full year of spending of $18.4 million associated with DriveLogic, which was established late in 1999, costs of $6.0 million associated with the shutdown of International's D.W. Norris outsourcing business in December 2000 and $2.4 million of litigation settlements in 2000 related to the settlement cost of an arbitration proceeding with Autobody Software Solutions, Inc. and a lawsuit settlement with American Salvage Pool Association.

For 2000, CCC U.S. had revenues of $176.9 million and CCC International had revenues of $7.8 million, which represented 95.8% and 4.2% of the total 2000 consolidated revenues, respectively. For 1999, CCC U.S. had revenues of $173.7 million and CCC International had revenues of $5.3 million, which represented 97.0% and 3.0% of the total 1999 consolidated revenues, respectively.

In 2000, operating margins (operating income (loss) as a percentage of revenue), for our two revenue producing segments were 3.1% for CCC U.S. and (131.2)% for CCC International compared to 9.9% for CCC U.S. and (21.2)% for CCC International in 1999. The operating margins for CCC U.S. include results for DriveLogic, previously reported as a segment, and shared services. The operating margins for CCC International reflect the Company's decision to shutdown this segment.

CCC U.S. had well-established products in the marketplace and as such, was able to generate higher operating margins than the other segments. CCC U.S.'s operating income and margin improved from 1999 based on cost reduction efforts in 1999 and 2000. These efforts included, but were not limited to, a reduction-in-force and the sale of its dealer services business both of which occurred in the fourth quarter of 1999 and the relocation of certain claims settlement functions to Sioux Falls, South Dakota in 1998. In addition, in the fourth quarter of 2000, CCC U.S. recorded a gain of $4.6 million related to the final resolution of previously accrued expenses related to a vendor agreement focused on technology testing and roll-out of certain products and services. Offsetting these decreases in operating expenses from 1999, were the costs associated with settling two litigation matters totaling $2.4 million and a charge of $1.9 million related to the determination that certain prepaid marketing fees paid to a third party related to the CCC U.S. Division's shop management products were impaired. This impairment determination was based on an analysis of projected future revenue and profitability streams of the shop management products associated with this marketing fee. In addition, certain contractually committed consulting fees and development expenses of $0.8 million related to this third party were recorded in the third quarter of 2000.

CCC International's operating losses were mainly the result of its D.W. Norris outsourcing business acquired in August of 1999. D.W. Norris operating losses were $10.5 million for 2000 and accounted for the majority of CCC International's operating losses. D.W. Norris's results in 2000 included total charges of $6.8 million associated with our decision in December 2000 to shutdown the business. The decision to shutdown the business was the result of continued underperformance and expected future losses due to the loss of a significant customer.

Shared Services operating expenses for 2000 of $83.8 million increased $14.7 million from $69.1 million in 1999, excluding the reduction-in-force charge of $1.9 million. The increase in expenses was primarily related to higher amortization expense related to internal use software costs, mainly those relating to a new customer relationship management system implemented in late 1999 and a new human resources and payroll system implemented in 2000. Further, increased MIS costs associated with internal infrastructure and consulting costs associated with the Company reviewing strategic alternatives

for its Consumer Services segment contributed to the increase operating expenses. Offsetting these increases, in part, was a one-time compensation charge of $1.2 million recorded in 1999 as a result of a stock repurchase from a charitable trust funded by our former chairman, David M. Phillips.

Revenues. Revenues for the year ended December 31, 2000 of $184.7 million were $5.7 million, or 3.1%, higher than the same period last year. The increase in revenues was primarily attributable to an increase in CCC U.S.'s revenue of $3.2 million, or 1.9%, from its EZNet communications network and a reduction in CCC U.S.'s accounts receivable allowance reserves in the first quarter of 2000 of approximately $1.2 million. This adjustment, which was reversed to the same line as the original provisions were recorded, was based on a detailed analysis of exposures and required reserves on an individual account basis of our accounts receivables. CCC International revenues increased year-over-year by $2.5 million, or 46.3%, due to the acquisition of D.W. Norris Limited, in late 1999.

Production and Customer Support. Production and customer support increased from $40.3 million, or 22.5% of revenue, to $41.4 million, or 22.5% of revenue. The year over year increase was due primarily to higher operating costs resulting from CCC International's acquisition of D.W. Norris in August of 1999. This increase was offset, in part, by lower expenses associated with CCC U.S.'s automotive services group and claims settlement group. CCC U.S.'s automotive services group decrease was principally due to lower training and implementation fees associated with the Pathways Digital Imaging, Pathways Enterprise Solution and Pathway Professional Advantage products and the sale of the CCC U.S.'s dealer services business in December 1999. CCC U.S.'s claims settlement decrease was primarily due to lower headcount and associated costs due to improved efficiency in the customer support area and lower monthly production costs associated with Pathways Collision Estimating product's monthly updates.

Commissions, Royalties and Licenses. Commission, royalties and licenses decreased from $16.3 million, or 9.1% of revenues, to $13.5 million, or 7.3% of revenues. The decrease in dollars and as a percentage of revenue was due mainly to a decrease in commissions resulting from CCC U.S.'s conversion of its independent sales representatives for collision repair facilities to salaried employees and the elimination of CCC U.S.'s highly commissioned dealer services products as part of the sale of this business in late 1999. In the third quarter of 2000, we determined that certain prepaid marketing fees paid to a third party for CCC U.S.'s Pathways Enterprise Solution and Pathways Professional Advantage were impaired. This impairment determination was based on an analysis of projected future revenue and profitability streams of the shop management products associated with this marketing fee. We recorded a charge of $1.9 million in connection with the write-off of this asset that offset, in part, the decreases in commissions.

Selling, General and Administrative. Selling, general and administrative increased from $73.1 million, or 40.8% of revenues, to $86.7 million, or 46.9% of revenues. Of this increase, approximately $12.1 million, or 89.0% of the net increase, was due to costs associated with DriveLogic. Additional increases were the result of CCC U.S.'s conversion of its independent sales representatives for collision repair facilities to salaried employees, consulting of $1.5 million associated with reviewing strategic alternatives for Consumer Services and a bad debt provision of $0.8 million recorded in connection with the decision to shut-down CCC International's D.W. Norris business in December 2000. These increases were offset, in part, by the impact of a 1999 one-time compensation charge of $1.2 million as a result of a stock repurchase from a charitable trust funded by our former chairman, David M. Phillips and lower consulting costs for projects aimed at improving the internal telecommunications and customer service infrastructure incurred in the first half of 1999. In addition, CCC U.S. recorded a fourth quarter 2000 gain of $4.6 million related to the final resolution of previously accrued expenses associated with a vendor agreement focused on technology testing and roll-out of certain products and services.

Depreciation and Amortization. Depreciation and amortization increased from $9.0 million, or 5.0% of revenues, to $11.5 million, or 6.2% of revenues. The increase was mainly the result of additional amortization of internal use software costs, primarily those relating to a new customer relationship management system implemented in late 1999 and a new human resources and payroll system in 2000. In addition, as a result of the D.W. Norris acquisition in late 1999, goodwill amortization and depreciation on acquired fixed assets increased year-over year for CCC International. Depreciation and amortization also increased as a result of increased investment in computer equipment and software and DriveLogic's leasehold improvements and office furniture associated with its new office space.

Product Development and Programming. Product development and programming increased from $22.0 million, or 12.3% of revenue, to $27.9 million, or 15.1% of revenue. The dollar and percentage of revenue increases were due primarily to DriveLogic's new product development efforts and CCC U.S.'s Total Loss development efforts.

Restructuring Charges. In December 2000, we decided to shut down the D.W. Norris outsourcing business due to the significant losses incurred since the acquisition, the continued deterioration of the overall business and the poor long-term assessment of the business. As a result, the Company recorded a charge of $6.0 million in the fourth quarter of 2000 to write-off the goodwill, severance and related costs to terminate approximately 86 employees, write-down the fixed assets to net realizable value and contractual commitments. Excluding the restructuring charge, D.W. Norris had a net loss of $5.1 million in 2000. In the fourth quarter of 1999, the company recorded a reduction-in-force charge of $2.2 million. This charge consisted primarily of severance and outplacement costs related to the termination of approximately 100 employees. This reduction was part of a company-wide effort to improve profitability to help fund new initiatives, such as DriveLogic.

Litigation Settlements. We recorded a charge of $1.4 million in the third quarter of 2000 related to settlement costs of an arbitration proceeding before the American Arbitration Association captioned Autobody Software Solutions, Inc. v. CCC Information Services Inc. In addition, we recorded a charge of $1.0 million in the fourth quarter of 2000 related to settlement costs of a litigation matter with American Salvage Pool Association. See Note 10 of the Notes to Consolidated Financial Statements—Litigation Settlements.

Interest Expense. Interest expense increased from $1.4 million in 1999 to $3.1 million in 2000. The increase from 1999 was due to a higher level of borrowings in late 1999 and 2000 under our bank credit facility. The increase in borrowings was mainly the result of our stock repurchase program, acquisitions, funding to Enterstand and startup costs for DriveLogic.

Other Income, Net. Other income, net increased from $0.4 million in 1999 to $5.1 million in 2000. The increase from prior year was principally due to a $4.1 million gain recorded in the first quarter of 2000 on the termination of the sales and marketing agreement between InsurQuote Systems, Inc. and CCC. See Note 3 of the Notes to Consolidated Financial Statements—Investment in InsurQuote/ChannelPoint.

Equity in Losses of ChoiceParts. We recorded a charge of $2.1 million for the period May 4, 2000 through December 31, 2000 related to our share of the losses of ChoiceParts, LLC. See Note 5 of the Notes to Consolidated Financial Statements—Investment in ChoiceParts.

Income Taxes. Income taxes decreased from $7.4 million, or 48.7% of income from continuing operations before taxes, to $3.5 million, or 25.5% of income from continuing operations before taxes. The dollar decrease was mainly attributable to lower pretax income.

Equity in Net Losses of Affiliates. Equity in net losses of affiliates increased from $6.6 million in 1999 to $15.7 million in 2000. The results included $4.2 million in losses relating to InsurQuote for 1999, and $15.7 million and $2.4 million in losses relating to Enterstand for 2000 and 1999, respectively. The increase in Enterstand losses reflects the change in percentage of losses recognized from 19.9% to 85% for the period April 1, 2000 through September 30, 2000 which corresponded to the level of funding we provided Enterstand during that period. During the fourth quarter of 2000, we funded 100% of the operating losses of Enterstand. As a result of this funding, we recorded 100% of the losses incurred during this period. We also recorded a charge of $3.7 million to write-off our net investment and receivables from Enterstand given its recent level of losses and future projections for cash flow and profits. We ceased recording the net losses of InsurQuote in the second quarter of 1999 as a result of a new investor funding InsurQuote's net losses subsequent to March 31, 1999.

Discontinued Operations. Loss from discontinued operations, net of income taxes increased from $0.3 million in 1999 to $3.7 million in 2000.

Certain Risks Related to our Business

We may not be able to successfully develop new services, which may adversely affect our business.

The markets in which we compete are increasingly characterized by technological change. The introduction of competing services incorporating new technologies could render some or all of our services unmarketable. We believe that our future success depends on our ability to enhance our current services and to develop new services that address the increasingly sophisticated needs of our customers. As a result, we have in the past and intend to continue to commit substantial resources to product development and programming. The development of new products may result in unanticipated expenditures and capital costs which may not be recovered in the event one or more of our products is unsuccessful. Our failure to develop and introduce new or enhanced services and products in a timely and cost-effective manner in response to changing technologies or customer requirements would have a material adverse effect on our business, financial condition and results of operations.

Our ability to provide collision estimating services to our customers could be severely limited if our access to data is interrupted.

A substantial portion of the data utilized in our collision estimating products is derived from the MOTOR Crash Estimating Guide, a publication of a subsidiary of The Hearst Corporation. We have a license to use the MOTOR Crash Estimating Guide data under an agreement with Hearst which expires on June 30, 2021. Hearst may terminate the license if any of the following events occur: (1) we fail to make payment of license fees, royalties and other charges due under the agreement; (2) we do not comply with the material terms and conditions of the agreement; (3) we become bankrupt or insolvent and we are unable to perform our obligations under the agreement; or (4) upon two years' notice, if Hearst discontinues or abandons publication of the estimating guide.

There can be no assurance that we will be able to renew the Hearst license on economic terms that are beneficial to us or at all. We do not believe that we have access to an alternative database that would provide comparable information. Any interruption of our access to the MOTOR Crash Estimating Guide data could have a material adverse effect on our business, financial condition and results of operations. For additional information regarding our license with Hearst, see Item 1. Business—Intellectual Property and Licenses.

If we are unable to protect our trade secrets and proprietary information, our ability to compete effectively could be adversely impacted.

We regard the technology underlying our services and products as proprietary. We rely primarily on a combination of intellectual property laws, patents, trademarks, confidentiality agreements and contractual provisions to protect our proprietary rights. We have registered certain of our trademarks. Our Total Loss calculation process is not patented; however, the underlying methodology and processes are trade secrets and are essential to our Total Loss business. Existing trade secrets and copyright laws afford us limited protection. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our software or to obtain and use information that we regard as proprietary. Policing unauthorized use of our software is difficult. There can be no assurance that the obligations to maintain the confidentiality of our trade secrets and proprietary information will effectively prevent disclosure of our confidential information or provide meaningful protection for our confidential information, or that our trade secrets or proprietary information will not be independently developed by our competitors. There can be no assurance that our trade secrets or proprietary information will provide competitive advantages or will not be challenged or circumvented by its competitors. We may be required to litigate to defend against claims of infringement, to protect our intellectual property rights and could result in substantial cost to, and diversion of efforts by, us. There can be no assurance that we would prevail in any such litigation. If we are unable to protect our proprietary rights in our intellectual property, it could have a material adverse effect on our business, financial condition and results of operations.

We are involved in legal proceedings that, if adversely adjudicated or settled, could materially impact our financial condition.

We are currently involved in several legal proceedings that may result in substantial payments by the Company. We currently are defendants in 21 class action suits regarding our Total Loss service. If we were to face a full court trial and be held liable in any of the actions (or otherwise determine that it is in our best interests to settle any of them), we could incur significant legal expenses and be required to pay monetary damages (or settlement payments) that may have a significant negative impact on our financial condition. See Item 3. Legal Proceedings for further discussion.

We have a history of operating losses and our future profitability is uncertain, which may impact our ability to continue operations.

We have an accumulated net deficit from inception of approximately $86.0 million through December 31, 2001. Additionally, we failed to generate a profit for the years 2001, 2000 and 1998, and have seen a persistent decrease in cash flow for the last four years. Losses have resulted principally from costs incurred in product acquisition and development, from servicing of debt and from general and administrative costs. These costs have exceeded our revenues in most years, which have been derived primarily from the sale of our Total Loss services and Pathways products. Although we increased our revenue in each of the years ended December 31, 2001, 2000 and 1999, there can be no assurance that we will be able to sustain this growth or achieve or maintain profitability in the future.

If we are unable to generate sufficient cash flow to service our indebtedness or other obligations or find alternative financing sources, our business may be adversely affected.

Our ability to make payments on our indebtedness and other obligations and to fund planned expenditures depends on our ability to generate future cash flow. This, to some extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. In addition, our ability to borrow funds under our $30 million New Credit Facility, depends on our satisfying various covenants, which require us to maintain certain levels of operating cash flow, debt coverage and net worth and limits our ability to make certain investments. As of December 31, 2001, we were in compliance with all of these covenants.

We cannot assure you that our business will generate cash flow from operations or that future borrowings will be available to us under the Credit Facility or otherwise. In addition, we can give no assurances as to whether we will be able to obtain additional financing from other sources. Inability to obtain financing from alternative sources may have an adverse effect on our financial position, results of operations and cash flow.

Various state laws and regulations govern the use of our Total Loss service by insurance companies.

Changes in those laws or regulations in a way that restricts the use of this service by insurance companies may have a material adverse effect on our business, financial condition and results of operations.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

As a result of the 1998 acquisition of CCC International and the 1999 acquisition of D.W. Norris Limited, we had operations in the U.K. All foreign operations were measured in British Pounds. Due to the shut down of our operations in the U.K., we no longer believe our financial results will be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets.

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data required with respect to this Item 8 are listed in Item 14(a)(1) and 14(a)(2) included elsewhere in this filing.

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

None.

PART III

Item 10. Directors and Executive Officers of The Registrant

The information required by this item is hereby incorporated by reference in our definitive proxy statement, which is to be filed with the Securities and Exchange Commission within 120 days of the Company's fiscal year ended December 31, 2001.

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions

PART IV

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

(a)

Index to Consolidated Financial Statements and Schedules

1.: Consolidated Financial Statements

		Page(s)
Report of Independent Accountants		34
Consolidated Financial Statements:
	Consolidated Statement of Operations	35
	Consolidated Balance Sheet	36
	Consolidated Statement of Cash Flows	37-38
	Consolidated Statement of Stockholders' Equity (Deficit)	39
	Notes to Consolidated Financial Statements	40-72

2.: Financial Statement Schedule

Schedule II Valuation and Qualifying Accounts

All other schedules have been omitted because the required information is included in the financial statements or notes thereto or because they are not required.

3.: Exhibits

The exhibits required by this item are set forth on the exhibit index attached hereto.

74-76

(b): Reports on Form 8-K

A report on Form 8-K, dated November 30, 2001, was filed on December 3, 2001 filing various exhibits related to the Company's rights offering and bank credit facility agreement.

A report on Form 8-K, as amended, dated November 30, 2001, was filed on December 4, 2001 filing various exhibits related to the Company's rights offering and bank credit facility agreement.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of CCC Information Services Group Inc.:

In our opinion, the consolidated financial statements listed in the index appearing under Item 14(a)1 present fairly, in all material respects, the financial position of CCC Information Services Group Inc. and its subsidiaries at December 31, 2001 and December 31, 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14(a)2 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
February 1, 2002, except as to paragraph 6
of Note 4, which is as of March 15, 2002

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(In Thousands, Except Per Share Amounts)

		Year Ended December 31,
		2001			2000			1999
Revenues		$	187,941		$	184,641		$	179,021
Expenses:
	Production and customer support		32,498			41,449			40,286
	Commissions, royalties and licenses		10,129			13,512			16,247
	Selling, general and administrative		90,892			86,663			73,146
	Depreciation and amortization		11,820			11,499			9,036
	Product development and programming		30,429			27,895			22,036
	Restructuring charges		10,499			6,017			2,242
	Litigation settlements		4,250			2,375			—

Operating income (loss)			(2,576	)		(4,769	)		16,028
Interest expense			(5,680	)		(3,135	)		(1,358	)
Other income (expense), net			(248	)		5,101			412
Gain on exchange of investment securities, net			—			18,437			—
Loss on investment securities and notes			(28,267	)		—			—
CCC Capital Trust minority interest expense			(1,371	)		—			—
Equity in losses of ChoiceParts investment			(2,486	)		(2,071	)		—

Income (loss) from continuing operations before income taxes			(40,628	)		13,563			15,082
Income tax (provision) benefit			18,329			(3,452	)		(7,352	)

Income (loss) from continuing operations before equity losses			(22,299	)		10,111			7,730
Equity in net losses of affiliates			(2,354	)		(15,650	)		(6,645	)

Income (loss) from continuing operations			(24,653	)		(5,539	)		1,085
Loss from discontinued operations, net of income taxes			(5,972	)		(3,704	)		(333	)

Net income (loss)			(30,625	)		(9,243	)		752
Dividends and accretion on mandatorily redeemable preferred stock			—			—			(2	)

Net income (loss) applicable to common stock		$	(30,625	)	$	(9,243	)	$	750

Per Share Data:
Income (loss) per common share—basic from:
	Income (loss) from continuing operations	$	(1.12	)	$	(0.25	)	$	0.05
	Loss from discontinued operations		(0.27	)		(0.17	)		(0.02	)

	Income (loss) per common share—basic	$	(1.39	)	$	(0.42	)	$	0.03

Income (loss) per common share—diluted from:
	Income (loss) from continuing operations	$	(1.12	)	$	(0.25	)	$	0.05
	Loss from discontinued operations		(0.27	)		(0.17	)		(0.02	)

	Income (loss) per common share—diluted	$	(1.39	)	$	(0.42	)	$	0.03

Weighted average shares outstanding:
	Basic		21,967			21,851			22,856
	Diluted		21,967			21,851			23,162

The accompanying notes are an integral part of these consolidated financial statements.

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(In Thousands, Except Share Amounts)

		December 31,
		2001			2000
ASSETS
Cash		$	766		$	912
Accounts receivable, net			11,346			16,867
Current portion deferred income taxes			5,322			—
Other current assets			6,461			5,212

	Total current assets		23,895			22,991
Property and equipment, net			13,487			21,812
Goodwill, net			4,896			7,224
Deferred income taxes, net			18,587			8,004
Investments			302			23,764
Notes receivable			—			5,257
Other assets			1,027			788
Net assets of discontinued operations			—			4,848

	Total assets	$	62,194		$	94,688

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Book overdraft		$	1,205		$	8,682
Accounts payable and accrued expenses			36,228			34,462
Income taxes payable			—			375
Current portion of long-term debt			421			314
Deferred revenues			6,297			4,044

	Total current liabilities		44,151			47,877
Long-term debt			7,145			42,000
Deferred revenues			66			120
Other liabilities			3,737			2,573
Net liabilities of discontinued operations			536			—

	Total liabilities		55,635			92,570

Commitments and contingencies (Notes 24 and 26)
Company obligated mandatorily redeemable preferred securities of subsidiary trust holding solely company-guaranteed debentures			13,370			—

Common stock ($0.10 par value, 40,000,000 shares authorized, 25,503,567 and 21,759,279 shares outstanding at December 31, 2001 and 2000, respectively)			2,967			2,593
Additional paid-in capital			124,188			103,279
Accumulated deficit			(85,587	)		(54,962	)
Accumulated other comprehensive loss			(10	)		(423	)
Treasury stock, at cost (4,286,665 common shares in treasury at December 31, 2001 and December 31, 2000)			(48,369	)		(48,369	)

	Total stockholders' equity (deficit)		(6,811	)		2,118

	Total liabilities and stockholders' equity (deficit)	$	62,194		$	94,688

The accompanying notes are an integral part of these consolidated financial statements.

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(In Thousands)

			Year Ended December 31,
			2001			2000			1999
Operating Activities:
	Net income (loss)		$	(30,625	)	$	(9,243	)	$	752
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Loss from discontinued operations, net of income taxes			5,972			3,704			—
	Equity in net losses of affiliates			2,354			15,650			6,645
	Equity in net losses of ChoiceParts			2,486			2,071			—
	Depreciation and amortization of property and equipment			10,574			9,698			7,967
	Amortization of goodwill			1,247			2,173			2,415
	Deferred income tax provision (benefit)			(17,331	)		(1,254	)		721
	Loss on investment securities and notes receivable			28,267			—			—
	Gain on exchange of investment securities, net			—			(18,437	)		—
	Gain on settlement of marketing agreement			—			(3,644	)		—
	Restructuring charges			10,499			6,017			—
	CCC Capital Trust minority interest expense			1,371			—			—
	Write-off of internally developed software			—			2,906			—
	Other, net			326			(86	)		947
	Changes in:
		Accounts receivable, net		5,521			1,824			2,158
		Other current assets		(1,331	)		1,619			(6,320	)
		Other assets		1,689			1,439			606
		Accounts payable and accrued expenses		(4,656	)		811			9,719
		Current income taxes		3,533			1,101			2,336
		Deferred revenues		2,198			895			(1,007	)
		Other liabilities		112			(22	)		(764	)

	Net cash provided by operating activities:
		Continuing operations		22,206			17,222			26,175
		Discontinued operations		(3,485	)		(4,783	)		—

	Net cash provided by operating activities			18,721			12,439			26,175

Investing Activities:
	Capital expenditures			(2,889	)		(17,508	)		(10,357	)
	Purchase of investment securities			—			—			(1,484	)
	Purchase of subsidiaries, net of cash received			—			—			(5,584	)
	Investment in affiliates			(5,163	)		(13,691	)		—
	Purchase of InsurQuote securities			—			(527	)		—
	Settlement of ChannelPoint note receivable			460			—			—
	Proceeds from sales of investment securities			—			—			1,484
	Proceeds from sale of discontinued businesses			657			—			—
	Decrease in long-term notes receivable			18			—			—
	Other, net			102			(75	)		(768	)

	Net cash used for investing activities			(6,815	)		(31,801	)		(16,709	)

		Year Ended December 31,
		2001			2000			1999
Financing Activities:
	Book overdraft		(7,477	)		7,052			—
	Principal repayments on long-term debt		(88,875	)		(35,811	)		(41,142	)
	Proceeds from borrowings on long-term debt		53,375			53,000			54,000
	Proceeds from Rights Offering		20,000			—			—
	Payment of Trust Preferred, Credit Facility and Rights Offering costs		(4,342	)		—			—
	Proceeds from issuance of trust preferred securities and warrants		15,206			—			—
	Redemption of preferred stock, including accrued dividends		—			—			(690	)
	Proceeds from exercise of stock options		109			2,498			1,602
	Proceeds from employee stock purchase plan		530			632			762
	Payments to acquire treasury stock		—			(8,235	)		(24,146	)
	Principal repayments of capital lease obligations		(578	)		—			—
	Other, net		—			(51	)		—

	Net cash provided by (used for) financing activities		(12,052	)		19,085			(9,614	)

Net decrease in cash			(146	)		(277	)		(148	)
Cash:
Beginning of year			912			1,189			1,526

End of year		$	766		$	912		$	1,378

The accompanying notes are an integral part of these consolidated financial statements.

CCC INFORMATION SERVICES GROUP, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(In Thousands, Except Number of Shares)

		Outstanding Common Stock
															Treasury Stock
												Accumulated Other Comprehensive Loss			Treasury Stock
		Number of Shares		Par Value		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Number of Shares		Cost			Total Stockholders' Equity (Deficit)
December 31, 1998		23,700,165		$	2,510	$	95,573		$	(46,469	)	$	(26	)	1,521,925		$	(16,285	)	$	35,303
	Preferred stock dividends accrued	—			—		—			(2	)		—		—			—			(2	)
	Stock options exercised including income tax benefit	310,467			31		2,448			—			—		—			—			2,479
	Employee stock purchase plan	77,384			8		754			—			—		—			—			762
	Treasury stock purchases	(2,108,190	)		—		—			—			—		2,108,190			(24,146	)		(24,146	)
	Translation adjustment	—			—		—			—			(39	)	—			—			(39	)
	Other	12,000			—		24			—			—		(12,000	)		128			152
	Net income	—			—		—			752			—		—			—			752

	Comprehensive loss	—			—		—			(81	)		(26	)	—			—			(107	)

December 31, 1999		21,991,826		$	2,549	$	98,799		$	(45,719	)	$	(65	)	3,618,115		$	(40,303	)	$	15,261

	Stock options exercised including income tax benefit	358,267			36		3,856			—			—		—			—			3,892
	Employee stock purchase plan	77,736			8		624			—			—		—			—			632
	Treasury stock purchases	(683,550	)		—		—			—			—		683,550			(8,235	)		(8,235	)
	Translation adjustment	—			—		—			—			(358	)	—			—			(358	)
	Other	15,000			—		—			—			—		(15,000	)		169			169
	Net loss	—			—		—			(9,243	)		—		—			—			(9,243	)

	Comprehensive loss	—			—		—			(9,243	)		(358	)	—			—			(9,601	)

December 31, 2000		21,759,279		$	2,593	$	103,279		$	(54,962	)	$	(423	)	4,286,665		$	(48,369	)	$	2,118

	Rights Offering proceeds, net of offering costs	3,636,364			363		18,108			—			—		—			—			18,471
	Issuance of warrants in connection with interim loan	—			—		206			—			—		—			—			206
	Warrants issued in connection with Trust Preferred Securities	—			—		3,000			—			—		—			—			3,000
	Issuance costs of Trust Preferred Securities	—			—		(1,039	)		—			—		—			—			(1,039	)
	Stock options exercised including income tax benefit	14,600			1		114			—			—		—			—			115
	Employee stock purchase plan	93,324			10		520			—			—		—			—			530
	Translation adjustment	—			—		—			—			413		—			—			413
	Net loss	—			—		—			(30,625	)		—		—			—			(30,625	)

	Comprehensive loss	—			—		—			(30,625	)		413		—			—			(30,212	)

December 31, 2001		25,503,567		$	2,967	$	124,188		$	(85,587	)	$	(10	)	4,286,665		$	(48,369	)	$	(6,811	)

The accompanying notes are an integral part of these consolidated financial statements.

CCC INFORMATION SERVICES GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—DESCRIPTION OF BUSINESSES AND ORGANIZATION

CCC Information Services Group Inc. ("CCCG"), incorporated in Delaware in 1983 and headquartered in Chicago, Illinois, is a holding company that operates through its wholly-owned subsidiary, CCC Information Services Inc. ("CCC") (collectively referred to as the "Company" or "we"), which, as a result of consolidating, divesting and winding down certain operations, now operates as one business segment, employing 862 full-time employees. The number of full-time employees reflects the elimination of certain positions in connection with the consolidation of our DriveLogic segment into our U.S. business segment, the discontinued operations of CCC Consumer Services and the shut down of CCC International. We automate the process of evaluating and settling automobile claims, which allows our customers to integrate estimate information, labor time and cost, recycled parts and various other calculations derived from our extensive databases, electronic images, documents and related information into organized electronic workfiles. We develop, market and supply a variety of automobile claims services which enable customers in the automobile claims industry, including automobile insurance companies, collision repair facilities, independent appraisers, automobile dealers and consumers, to manage the automobile claims and vehicle restoration process. Our principal products and services are Total Loss valuation services and Pathways collision estimating software, which provide our customers with access to various automobile information databases and claims management software.

As of December 31, 2001, White River Ventures Inc. ("White River") held approximately 34% of our outstanding common stock. In June 1998, White River Corporation, the sole shareholder of White River, was acquired by Demeter Holdings Corporation, which is solely controlled by the President and Fellows of Harvard College, a Massachusetts educational corporation and title-holding company for the endowment fund of Harvard University. Charlesbank Capital Partners LLC acts as the investment manager with respect to the investment of White River in the Company.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, which are currently wholly owned or majority owned. The results of companies acquired are included in the consolidated financial statements from the date of acquisition. See Note 6—Acquisitions.

Discontinued Operations

The balance sheets as of December 31, 2001 and 2000, the consolidated statement of operations for the three years ended December 31, 2001 and the consolidated statement of cash flows for the two years ended December 31, 2001 have been restated to reflect the CCC Consumer Services segment as a discontinued operation in accordance with Accounting Principles Board Statement No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.

Revenue Recognition

Revenues are recognized after services are provided, when persuasive evidence of an arrangement exists, the fee is fixed and determinable and when collection is probable. If collectibility is not considered probable, revenue recognition is deferred until the fee is collected. Revenues are reflected

net of customer allowances, which are based on the application of a predetermined percentage. During the years ended December 31, 2001, 2000 and 1999, 60%, 62% and 62%, respectively, of consolidated revenues were derived from insurance companies.

Accounts Receivable, net

Accounts receivable as presented in the accompanying consolidated balance sheet are net of reserves for customer allowances and doubtful accounts. The Company determines allowances for accounts receivable based on specific identification of customer accounts requiring allowances and the application of a predetermined percentage to the remaining accounts receivable balances. As of December 31, 2001 and 2000, $2.3 million, and $3.3 million, respectively, have been applied as a reduction of accounts receivable. As of December 31, 2000, the reserve balance includes a bad debt provision of $0.8 million recorded in connection with the decision to shut-down CCC International's D.W. Norris business in December 2000. In 2001, receivables were either collected or written off against this reserve. Of total accounts receivable, net of reserves, at December 31, 2001 and 2000, $10.4 million and $15.6 million, respectively, were due from insurance companies.

Change in Estimate

Effective January 1, 2000, the Company modified its methodology for determining allowances for accounts receivable. The previous method applied primarily a predetermined percentage to the accounts receivable aging balances, while considering the specific identification of customer accounts requiring allowances. The modified method incorporates a higher degree of specific identification of customer accounts requiring allowances in conjunction with the general percentage application on remaining accounts receivable balances. As a result of the change, the Company reduced allowance reserves by approximately $1.2 million in the first quarter of 2000. This amount was reflected in revenue in the consolidated statement of operations for the year ended December 31, 2000. The adjustment was reflected in revenue as the original provisions for allowances were recorded against revenue. Management believes that the methodology provides for an accurate valuation of the Company's accounts receivable balances.

Software Development Costs

The Company expenses research and development costs as incurred. The Company has evaluated the establishment of technological feasibility of its software products in accordance with Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed." The Company sells its products in a market that is subject to rapid technological change, new product development and changing customer needs. Accordingly, technological feasibility of the Company's products is generally not established until the development of the product is nearly complete. The Company defines technological feasibility as the completion of a working model. The time period during which costs could be capitalized, from the point of reaching technological feasibility until the time of general product release, has historically been very short and, consequently, amounts subject to capitalization have not been significant. For the years 2001, 2000 and 1999, research and development costs of approximately $13.0 million, $11.1 million and $3.9 million, respectively, are reflected in the accompanying consolidated statements of operations.

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation of equipment is computed on a straight-line basis over estimated useful lives. The Company uses a 2-3 year life for computer equipment; 2-3 year life for purchased software, licenses and databases; 5 year life for furniture and other equipment; the life of the lease, ranging from 3 to 15 years for leasehold improvements; the life of the lease for capital leases and 20 year life for buildings.

Goodwill

The excess of purchase price paid over the estimated fair value of identifiable tangible and intangible net assets of acquired businesses is capitalized and amortized on a straight-line basis over periods not exceeding 20 years. When events or changes in circumstances indicate that the carrying value of such assets may not be recoverable, the Company performs an analysis of undiscounted future cash flows to determine whether recorded amounts are impaired.

The unamortized goodwill balance as of December 31, 2001 was $4.9 million. This goodwill originated from a 1988 acquisition that included the Total Loss service. The Company currently generates approximately 26% of its total revenue from Total Loss and related services. In the future, net cash flows from the Total Loss service will be utilized in determining if the goodwill is impaired. At January 1, 2002, no such impairment existed.

See Note 8—Restructuring Charges for discussion of the write-off of goodwill in 2000 and 2001 related to the shut down of CCC International.

Debt Issue Costs

Debt issue costs are capitalized and amortized over the life of CCC's underlying debt. As of December 31, 2001 and 2000, deferred debt issue costs, net of accumulated amortization, of $0.9 million and $0.4 million, respectively, were included in other assets in the Company's consolidated balance sheet.

Foreign Currency

The Company has determined that the functional currency of each foreign operation is the local currency. Assets and liabilities denominated in foreign currencies are translated into United States dollars at the exchange rate on the balance sheet date, while revenues and expenses are translated at average rates of exchange prevailing during the period. During the fourth quarter of 2001, the Company recorded a foreign currency loss of $0.4 million in connection with the shut down of CCC International. Translation adjustments of $0.4 million and $(0.4) million for 2001 and 2000, respectively, are included in accumulated other comprehensive loss as a separate component of stockholders' equity (deficit) in the consolidated balance sheet.

Income Taxes

Deferred income taxes are provided for timing differences in recognizing certain income and expense items for financial reporting purposes. Such deferred income taxes primarily relate to the timing of recognition of certain revenue items, the timing of the deductibility of certain reserves and accruals for income tax purposes. The Company establishes a tax valuation allowance to the extent that

it is more likely than not that the deferred tax assets will not be realizable against future taxable income.

Fair Value of Financial Instruments

The carrying amount of the Company's financial instruments approximates their estimated fair value based upon market prices for the same or similar type of financial instruments. The Company performs an impairment review whenever events or changes in circumstances indicate that the carrying value of these investments and notes receivable may not be recoverable. Factors the Company considers important which could trigger an impairment review include market conditions, valuations for similar companies, financial performance and a going concern risk. During the year ended December 31, 2001, the Company determined that certain investments and notes receivable had incurred a decline in value that was considered other than temporary. The Company determined that the carrying value of our investments in and related notes receivable from ChannelPoint and Info4cars may not be recoverable based upon the existence of one or more of the above impairment factors. The Company recorded a charge of $22.7 million and $0.3 million for ChannelPoint and Info4cars, respectively, which represented the remaining carrying value of these investments. In addition, the Company provided allowances of $4.9 million and $0.8 million for the notes receivables and accrued interest from ChannelPoint and Info4cars, respectively. See Note 3—Investment in InsurQuote/ChannelPoint and Note 7—Dispositions.

Stock Based Compensation

The Company follows SFAS No. 123, "Accounting for Stock Based Compensation" ("SFAS 123"). As allowed by SFAS 123, the Company has elected to continue to account for its stock based compensation programs according to the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." The Company has adopted the disclosure provisions required by SFAS 123. The Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation—an Interpretation of APB Opinion No. 25 in March 2000 ("FIN 44"). The Company's adoption of FIN 44 did not have a material effect on the Company's consolidated results of operations or financial position.

Per Share Information

The Company follows SFAS No. 128, "Earnings Per Share" ("SFAS 128") in computing per share information. SFAS 128 requires the presentation of basic and diluted earnings per share. Earnings per share are based on the weighted average number of shares of common stock outstanding and common stock equivalents using the treasury stock method. See Note 23—Earnings Per Share.

Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

New Accounting Pronouncements

In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"). SFAS 141 is effective for business combinations initiated after June 30, 2001. The provisions of SFAS 141 require that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, specific criteria is provided for the initial recognition and measurement of intangible assets apart from goodwill and unamortized negative goodwill is to be written off immediately as an extraordinary gain instead of being deferred and amortized. SFAS 141 also requires that upon adoption of SFAS 142 the Company reclassify the carrying amounts of certain intangible assets into or out of goodwill, based on certain criteria. Use of the pooling-of-interests method is no longer permitted. The adoption of SFAS 141 did not have a significant effect on the Company's results of operations or its financial position.

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 142 will be effective for the Company January 1, 2002. Under SFAS 142, goodwill should no longer be amortized to earnings, but instead be reviewed for impairment on at least an annual basis. The Company adopted SFAS 142 on January 1, 2002 and ceased the amortization of goodwill against earnings. The Company expects the impact of the adoption of SFAS 142 to reduce amortization expense by $0.8 million in 2002.

On August 15, 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143 addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS 143 is required for adoption for fiscal years beginning after June 14, 2002. The Company anticipates that the adoption of SFAS 143 will not have a significant effect on the Company's results of operations or its financial position.

On October 3, 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). The objectives of SFAS 144 are to address the significant issues relating to the implementation of Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121"), and to develop a single accounting model, based on the framework established in SFAS 121, for long-lived assets to be disposed of by sale, whether previously held or used or newly acquired. The Company anticipates that the adoption of SFAS 144 will not have a significant effect on the Company's results of operations or its financial position.

Reclassifications

Certain reclassifications have been made to the prior year's financial statements in order to conform to the current year's presentation.

NOTE 3—INVESTMENT IN INSURQUOTE/CHANNELPOINT

On February 10, 1998, the Company invested $20.0 million in InsurQuote Systems, Inc. ("InsurQuote"). InsurQuote, formed in 1989, was a provider of insurance rating information and software tools used to manage that information. The Company's $20.0 million investment included 19.9% of InsurQuote common stock, an $8.9 million subordinated note, warrants, shares of Series C redeemable convertible preferred stock and Series D convertible preferred stock.

In February 1998, the Company and InsurQuote entered into a sales and marketing agreement that gave the Company certain rights to market and sell InsurQuote products to the automobile insurance carrier market. This agreement was subsequently amended in March 1999. In March 2000, the Company and InsurQuote agreed to terminate the sales and marketing agreement. As part of the termination agreement, the Company received $5.0 million, of which $4.5 million was paid in the form of an unsecured, subordinated promissory note maturing in September 2002 and bearing interest at 7.5%, and was paid $0.5 million in cash. As a result of the termination agreement, the Company recorded a gain on the settlement of this agreement of approximately $4.1 million, which was included in other income in the consolidated statement of operations for the year ended December 31, 2000.

In June 2001, the Company evaluated the collectibility of the $4.5 million note receivable from ChannelPoint, which had since acquired InsurQuote. Based on the evaluation, the Company provided an allowance of $4.9 million for the note receivable and accrued interest through June 30, 2001. A deferred tax benefit of $1.8 million was recorded as a result of this allowance. This determination was based on ChannelPoint's financial performance, cash balances and a going concern risk. Subsequently, the Company received $460,000 from ChannelPoint in full settlement of the loan obligations outstanding.

The Company accounted for its investment in InsurQuote on the equity method. Notwithstanding the Company's 19.9% common stock equity share, the Company recorded 100% of InsurQuote's net losses for the period from the Company's initial investment, February 10, 1998 to March 31, 1999. The recording of 100% of InsurQuote's losses was the result of the Company's $20.0 million investment being the primary source of funding for InsurQuote's operating losses during that period. On March 31, 1999, InsurQuote received a $20.0 million investment from a new investor for convertible preferred stock with a 19.0% voting interest. As a result of this new investment, the Company's ownership percentage decreased to 14.7% and the Company ceased recording losses on its investment, unless it was determined that its remaining investment was impaired. The Company has not recorded an income tax benefit on the InsurQuote losses recorded in 1999 and 1998.

On April 7, 2000, ChannelPoint, Inc., an e-commerce exchange services and technology platform provider for insurance and benefits companies, acquired InsurQuote. Under the terms of the transaction, the Company exercised its warrant for InsurQuote common stock in exchange for surrendering its $8.9 million subordinated note from InsurQuote. In addition, the Company invested $0.5 million in cash and converted $0.3 million in interest receivables associated with the $8.9 million subordinated note for additional common stock. Subsequent to these transactions being completed, the Company's securities in InsurQuote were then exchanged for common stock in the combined entity, ChannelPoint, Inc. ("ChannelPoint"). As a result of this transaction, the Company now owns 5,036,635 shares, representing approximately 5.8%, on a fully diluted basis, of ChannelPoint's common stock.

As a result of the Company exchanging its equity investment in InsurQuote securities for ChannelPoint's common stock, the Company's investment was recorded at its fair market value, and as a result, a gain was reflected in the consolidated statement of operations for the year ended December 31, 2000. Prior to the end of the second quarter of 2000, the Company reviewed its carrying value of the ChannelPoint common stock. Based on this review, the Company determined that there had been an other than temporary decline in market value of these securities. This determination was based on market conditions for like companies, restrictions on the stock holding, delay in the initial public offering of ChannelPoint's common stock and the limited liquidity of a private security. The resulting charge related to this change in carrying value has been included in the net gain on the exchange of securities of $18.4 million reflected in the consolidated statement of operations for the

year ended December 31, 2000. The Company accounts for its investment in ChannelPoint as a cost based investment. The impact on the Company's tax provision resulting from this gain on exchange of investment securities was minimal, since for tax purposes it primarily represented a reversal of prior equity losses for which no tax benefit was recorded. As such, the tax impact of $0.7 million related to the increase from the original cost of the investment of $20.8 million to the carrying value of $22.7 million. The Company reviewed its carrying value of the ChannelPoint investment at December 31, 2000 and at March 31, 2001 and determined that there had been no change in the estimated fair value of its investment in ChannelPoint since the end of the second quarter of 2000.

At the end of the second quarter of 2001, the Company again reviewed its carrying value of the ChannelPoint common stock. Based on this review, the Company determined that there had been an other than temporary decline in fair market value of these securities. This determination was based on market conditions, valuations for similar companies, financial performance and a going concern risk. As a result, the Company recorded a charge of $22.7 million, representing the remaining carrying value of its investment in ChannelPoint, which is reflected in the consolidated statement of operations for the year ended December 31, 2001.

NOTE 4—ENTERSTAND JOINT VENTURE

On December 30, 1998, the Company and Hearst Communications, Inc. ("Hearst Communications") established a joint venture, Enterstand Limited ("Enterstand"), in Europe to develop and market claims processing tools to insurers and collision repair facilities. Under the provision of the Subscription and Stockholders Agreement relating to the formation of Enterstand ("Subscription Agreement"), the Company invested $2.0 million for a 19.9% equity interest in Enterstand. The Subscription Agreement also provided the Company with an option to purchase 85% of Hearst Communication's shares of Enterstand at an agreed upon purchase price. The option was exercisable by the Company beginning one year after the date of the Subscription Agreement.

On March 17, 2000, the Company and Hearst Communications agreed to terms for an amendment to the Subscription Agreement. Under the terms of the amendment, both parties contributed additional funds to Enterstand to provide additional working capital. On March 20, 2000, the Company funded $0.5 million and Hearst Communications funded $5.0 million to Enterstand. After these investments, the Company's ownership percentage decreased to 14.2%. The Company's option was adjusted to include a right to purchase 78% of the shares issued to Hearst Communications in connection with this transaction and would give the Company an 84.5% ownership in the joint venture if exercised. In addition, on March 31, 2000, the Company and Hearst Communications loaned Enterstand $8.5 million and $1.5 million, respectively, which were evidenced by promissory notes. Of the $8.5 million loaned to Enterstand by the Company, $3.5 million was funded in cash and $5.0 million of receivables from Enterstand were converted into the note receivable. These promissory notes mature in March 2005 and bear interest at 9.0%. This investment was treated as an additional investment in affiliates for financial statement purposes.

The Company applied the equity method of accounting for its investment in Enterstand. Since the inception date through March 31, 2000, the Company recorded 19.9% of Enterstand's losses. For the period April 1, 2000 through September 30, 2000, the Company recorded 85.0% of Enterstand's losses based on the Company's proportionate share of the total funding to Enterstand, which occurred on March 31, 2000. During the fourth quarter of 2000 and through May 2001, the Company funded 100% of the operating losses of Enterstand. As a result of this funding, the Company recorded 100% of the

losses incurred during this period. In May 2001, the Company ceased funding the operating losses of Enterstand in connection with the decision to shut down CCC International.

In addition, at December 31, 2000, the Company recorded a charge of $3.7 million as a result of review of the Company's net investments in and receivables from Enterstand. This write-off was based on Enterstand's recent level of losses and future projections for cash flow and profits of this business. The Company's equity in net losses of Enterstand totaled $4.3 million, $15.7 million and $2.4 for the years ended December 31, 2001, 2000 and 1999, respectively. The Company has not recorded any income tax benefit on the equity in Enterstand's losses recorded since inception.

During 1998, CCC and Enterstand entered into an agreement whereby CCC developed, for the benefit of Enterstand, certain claims processing software tools and databases. During 2001, 2000 and 1999, CCC charged Enterstand $0.7 million, $4.4 million and $8.8 million, respectively, for development work performed. In addition, CCC International and Enterstand entered into an agreement whereby CCC International provided Enterstand with certain administrative and operating services and office space. For the years ended December 31, 2001, 2000 and 1999, CCC International charged Enterstand $2.4 million, $8.9 million and $4.1 million, respectively, for these services. These reimbursements from Enterstand are shown as reductions of the Company's operating expenses in the consolidated statement of operations.

The operations of Enterstand were discontinued in 2001. In March 2002, CCC International and Hearst Communications terminated their joint venture agreement, CCC International purchased Hearst Communications' interest in the venture for a nominal sum, and CCCG issued a warrant to Hearst Communications, exercisable for five years, to purchase up to 250,000 shares of the common stock of CCCG for $12 per share. The Company recorded a charge of $0.5 million for these warrants in December 2001, which is reflected in the statement of operations for the year ended December 31, 2001.

Summary unaudited Enterstand financial information for the years ended December 31, 2001, 2000 and 1999 was as follows:

	2001			2000			1999
	(In Thousands)
Revenues	$	—		$	—		$	—
Income (loss) from operations	$	4,776		$	(15,904	)	$	(12,891	)
Net income (loss)	$	3,731		$	(16,457	)	$	(12,453	)
Current assets	$	22		$	553		$	516
Total assets	$	22		$	1,457		$	2,267
Current liabilities	$	31		$	5,394		$	5,674
Stockholders' equity (deficit)	$	(11,559	)	$	(3,937	)	$	(3,407	)

NOTE 5—INVESTMENT IN CHOICEPARTS, LLC

On May 4, 2000, the Company formed a new independent company, ChoiceParts, LLC ("ChoiceParts") with Automatic Data Processing, Inc. ("ADP") and The Reynolds and Reynolds Company. ChoiceParts develops and operates an electronic parts exchange for the auto parts marketplace for franchised auto retailers, collision repair facilities and other parts suppliers. The Company has a 27.5% equity interest in ChoiceParts. In addition to an initial capital contribution of $1.4 million, the Company initially committed to fund an additional $5.5 million to ChoiceParts based

on its pro-rata ownership percentage through April 2001; however, the Company reached an agreement with ADP and the Reynolds and Reynolds Company to extend the deadline to April 2002. In December 2000, the Company funded $1.4 million in connection with this additional funding commitment. In March 2001, the Company funded $2.1 million to ChoiceParts, leaving approximately $2.0 million of the commitment still outstanding as of December 31, 2001. This later amount is expected to be funded during 2002. The Company applies the equity method of accounting for its investment in ChoiceParts and recorded a charge of $2.5 million and $2.1 for the year ended December 31, 2001 and from the inception date May 4, 2000 through December 31, 2000, respectively. Based on the nature of the Company's investment, the Company has recorded a related income tax benefit on its share of the losses.

Summary financial information for ChoiceParts for the year ended December 31,2001 and from inception date of May 4, 2000 through December 31, 2000 was as follows:

	2001			2000
Revenues	$	14,953		$	9,817
Gross profit	$	6,205		$	3,803
Operating loss	$	(9,088	)	$	(7,583	)
Net loss	$	(8,896	)	$	(7,445	)
Net loss applicable to non-preferred members' interest	$	(9,037	)	$	(7,530	)
Current assets	$	2,681		$	5,503
Total assets	$	4,913		$	6,856
Current liabilities	$	3,232		$	3,878
Mandatorily redeemable preferred member's interest	$	1,300		$	1,160
Members' equity	$	1,381		$	1,818

NOTE 6—ACQUISITIONS

On August 13, 1999, the Company's CCC International segment acquired 100% of the outstanding stock of D.W. Norris Limited ("D.W. Norris") for $5.2 million in cash. D.W. Norris provided vehicle accident damage assessment, accident investigation, theft investigation and other third-party insurance services throughout the United Kingdom. The purchase agreement provided for the payment of a contingent purchase price, not to exceed approximately $3 million, in the event that D.W. Norris met certain performance measures through December 2002. As part of a settlement agreement with the former owner of D.W Norris and the Company's decision to shut down the business, no further commitments exist related to the contingent purchase price associated with the D.W. Norris acquisition. See Note 8—Restructuring Charges.

On October 13, 1999, the Company's Consumer Services segment acquired certain assets of Fleming and Hall Administrators ("Fleming and Hall") for a purchase price of $0.3 million in cash. Fleming and Hall provided third party claims administration to automobile insurance companies in the southeastern United States. The purchase agreement provided for the payment of a contingent purchase price, not to exceed approximately $1.4 million, in the event that Fleming and Hall met certain performance measures through December 2004. No amounts had been earned or accrued for this contingent purchase price. As part of the Company's decision to exit the Consumer Services segment, these assets were sold back to the original owners for $0.6 million and no further commitments exist related to the contingent purchase price associated with the acquisition. See Note 9—Discontinued Operations.

The above acquisitions were all accounted for as purchases. Results of operations were included in the consolidated financial statements as discontinued operations from their respective acquisitions dates. The purchase price for each acquisition was allocated based on estimated fair values at the date of acquisition. Substantially all the purchase prices were allocated to goodwill, which was being amortized on a straight-line basis over its estimated useful life. See Note 14—Goodwill. There were no acquisitions for the year ended December 31, 2001. See Note 9—Discontinued Operations.

NOTE 7—DISPOSITIONS

On December 23, 1999, the Company sold certain net assets related to its dealer services products to Info4cars.com Inc. ("Info4cars") in exchange for a note receivable of $0.6 million and common stock representing a 9.0% interest in Info4cars. Info4cars provides vehicle history reports and other products, such as custom auto buying programs, warranties, and competitive finance/lease programs. In connection with this disposition, the Company recorded a loss of $0.2 million, which was a component of other income, net in the consolidated statement of operations. The note receivable matures on November 1, 2002. The annual interest rate is the lesser of the prime rate as published by the Chase Manhattan Bank plus 2%, or 9%. Interest is payable quarterly commencing February 1, 2000, and quarterly thereafter. Commencing on December 1, 2000 and continuing every month thereafter, principal and interest is payable in equal installments of approximately $29,500. In addition, in December 1999, the Company invested approximately $0.3 million for an additional 7.5% interest in Info4cars.

During 2000, Info4cars failed to make interest payments due and payable to the Company under the terms of the note on February 1, May 1, and August 1. In September 2000, the Company and Info4cars agreed to amend the principal amount and terms of repayment of the note receivable ("Amended Note"). The Amended Note includes the past due interest payments owed to the Company on the original note, matures in May 2003 and bears interest at the prime rate. In addition, the Company converted its common stock into shares of Series A Convertible Preferred Stock ("Series A Preferred Stock"). As holders of the Series A Preferred Stock, the Company is entitled to receive, when and as declared by the board of directors of Info4cars, cash dividends at the rate of 8.0% of the original issue price per annum on each outstanding share of Series A Preferred Stock.

Based on a review of Info4cars' financial statements and representations from Info4cars' management, the Company determined that it was more likely than not that Info4cars would not have the ability to satisfy their obligations to the Company. In the fourth quarter of 2001, the Company recorded a loss of approximately $1.1 million in connection with the write-off of our investment in Info4cars, including a $0.8 million bad debt provision related to the notes receivable plus accrued interest.

See discussion in Note 8—Restructuring Charges concerning the Company's decision to shut down the D.W. Norris business in late December 2000 and International in June 2001 and Note 9—Discontinued Operations concerning the Company's decision to discontinue the operations of its CCC Consumer Services segment.

NOTE 8—RESTRUCTURING CHARGES

In the fourth quarter of 1999, the Company recorded a reduction-in-force charge of approximately $2.2 million of which, $1.9 million was paid in 1999 and the remaining $0.3 million was paid in 2000. The charge consisted primarily of severance costs and included approximately $0.1 million for health

care and outplacement costs related to the termination of approximately 100 employees. The actual expenditures related to the reduction-in-force approximated the amount originally estimated. This reduction-in-force was part of a company wide effort to improve the Company's profitability and to fund new initiatives.

In December 2000, the Company decided to shutdown the D.W. Norris outsourcing business due to the significant losses incurred since the acquisition, the continued deterioration of the overall business and the poor long-term assessment of the business. As a result, the Company recorded a related charge of $6.0 million. This charge included a write-off of the remaining goodwill of $4.3 million, contractual commitments, including the office lease, of $0.8 million, severance and related costs to terminate approximately 86 employees of $0.5 million and a write-down of the fixed assets to net realizable value of $0.4 million. At December 31, 2001, all payments were made for the severance and contractual commitments during 2001. In addition, the Company recorded a charge of $3.4 million related to the shut down of CCC International's operations. This charge included a write-off of the remaining goodwill of $1.1 million, contractual commitments, including office space, of $0.5 million and severance and related costs to terminate 39 employees of $1.8 million. In connection with this shut down, CCC repurchased the shares of CCC International's president and minority shareholder for a nominal sum and sold back the claims consulting business of CCC International to the president. As of December 31, 2001, $0.3 million of the payments remain unpaid for the severance and contractual commitments.

In June 2001, the Company announced a set of strategic decisions as part of a company-wide effort to improve profitability. As a result the Company recorded a restructuring charge of $2.8 million, which consisted primarily of severance and outplacement costs related to the termination of 130 employees. Through December 31, 2001, $2.0 million in severance and outplacement payments had been made. In December 2001, the Company decreased the original restructuring charge by $0.3 million based on a review of severance and outplacement costs payments made.

During the fourth quarter of 2001, the Company recorded a charge of $4.3 million to write-off excess office space in Chicago. This charge was recorded after a complete review of the Company's short-term and long-term facility requirements. The charge included future rent commitments of $5.4 million and the write off of leasehold improvements of $2.1 million, net of expected future sublease income of $3.2 million.

NOTE 9—DISCONTINUED OPERATIONS

On April 19, 2001, the Company announced its decision to discontinue the operations of its CCC Consumer Services segment. The Company's plan included the sale of certain assets and the closure of the remaining Consumer Services segment business. Proceeds from the sale of the related assets were $0.7 million. As a result of this decision, during the first quarter of 2001, the Company recorded a loss from discontinued operations of $7.0 million, net of an income tax benefit of $2.6 million. This original loss was comprised of operating losses of $1.0 million, net of tax, prior to the measurement date, and estimated loss on disposal, net of tax, of $6.0 million. Included in the loss on disposal are severance costs related to the termination of 365 employees, loss on the disposal of the assets of this business and operating losses after the measurement date through the completion of the wind-down of operations in December 2001. In December 2001, the Company reviewed its remaining obligations related to the disposal of this segment, and as result, recorded a favorable adjustment of $1.0 million from the original estimate. This adjustment consisted of a reduction to the loss on disposal of $0.6 million and an increase to the tax benefit associated with the full loss on discontinued operations of $0.4 million.

As of December 31, 2001, accrued charges of $0.7 million for severance costs and other contractual commitments were included in the consolidated balance sheet.

In June 2001, the Company completed the sale of the assets of its subsidiary, CCC Consumer Services Southeast, Inc., ("CCC SE") to Fleming and Hall Administrators. Net proceeds from the sale were approximately $0.6 million. The Company purchased this claims administration business from Fleming and Hall Administrators in 1999. In addition, the Company also completed the sale of Professional Claims Services, Inc. ("PCSI") and received cash proceeds of approximately $0.1 million. PCSI was sold to a company affiliated with certain of the individuals from whom PCSI was purchased in 1998. Proceeds from both sales were used to repay amounts outstanding on the Company's bank credit facility. The losses on disposal of CCC SE and PCSI, which approximated the original estimates recorded during the first quarter of 2001, were $0.8 million and $2.6 million, respectively.

In September 2001, the Company completed the sale of its policy services and loss reporting operation, based in Sioux Falls, South Dakota and its remaining claims administration operation, based in Battle Creek, Michigan. Proceeds from each sale were minimal. The losses on disposal of these operations approximated the original estimates recorded during the first quarter of 2001.

Revenues and income (loss) from discontinued operations were as follows:

	2001			2000			1999
Revenues	$	4,587		$	25,139		$	28,776
Income (loss) before income taxes	$	(1,920	)	$	(5,590	)	$	(324	)
Income tax benefit	$	931		$	1,886		$	(9	)
Income (loss) from operations	$	(989	)	$	(3,704	)	$	(333	)
Loss on disposal	$	(7,105	)	$	—		$	—
Income tax benefit	$	2,122		$	—		$	—
Net loss on disposal	$	(4,983	)	$	—		$	—
Income (loss) from discontinued operations, net of tax	$	(5,972	)	$	(3,704	)	$	(333	)

The net liabilities of discontinued operations as of December 31, 2001 and the net assets of discontinued operations as of December 31, 2000 consisted of the following:

	2001			2000
Cash	$	—		$	723
Accounts receivable	$	114		$	4,515
Goodwill, net	$	—		$	2,372
Accounts payable and accruals	$	(650	)	$	(836	)
Deferred revenues	$	—		$	(865	)
Other liabilities	$	—		$	(767	)
Other	$	—		$	(294	)
Net assets (liabilities) of discontinued operations	$	(536	)	$	4,848

NOTE 10—LITIGATION SETTLEMENTS

CCC was a defendant in an arbitration proceeding before the AMERICAN ARBITRATION ASSOCIATION CAPTIONED AUTOBODY SOFTWARE SOLUTIONS, INC. v. CCC INFORMATION SERVICES INC. The plaintiff had demanded damages in excess of $23.0 million in that proceeding. The parties settled this action by execution of a Release and Settlement Agreement ("Settlement Agreement") as of October 12, 2000, pursuant to which CCC paid the plaintiff $0.3 million and conveyed 15,000 shares of the Company's common stock. The Company will also make a total of four additional annual payments in the amount of $0.2 million each, commencing six months after the date of the Settlement Agreement. The plaintiff has released CCC from all claims and has stipulated to the dismissal of its action with prejudice. In connection with this settlement, the Company has recorded and included a charge of $1.4 million in the consolidated statement of operations for the year ended December 31, 2000.

In December 2000, the Company completed a settlement of a lawsuit against the American Salvage Pool Association. The settlement called for (i) an immediate cash payment by CCC of $0.9 million which was made on December 28, 2000; (ii) a cash payment of $0.3 million to be made on or before March 31, 2001; (iii) a cash payment of $0.3 million to be made on or before June 30, 2001; (iv) the shortening of the covenant not to compete by 6 months, to June 30, 2002; and (v) a general release of all claims. The Company made the required payments of $0.3 million on March 20, 2001 and June 25, 2001.

In December 2001, the Company recorded a charge of $4.3 million, net of an expected insurance reimbursement of $2.0 million, as an estimate of the amount we will contribute towards the potential settlement of the largest of the class action lawsuits related to our total loss valuation service. CCC anticipates that the settlement would eliminate the viability of class claims in 14 of the 21 class action suits pending against the Company related to the total loss service. Upon completion, the anticipated settlement would resolve potential claims arising out of approximately 30% of the Company's total transaction volume during the time period covered by the lawsuit. The Company currently anticipates that the proposed settlement would include a resolution of any potential claims for indemnification or contribution by its customers relating to the transactions covered by the settlement. See discussion in Note 26—Legal Proceedings.

NOTE 11—INCOME TAXES

Income taxes applicable to income (loss) before equity losses and minority interest consisted of the following:

		2001			2000			1999
		(In Thousands)
Current (provision) benefit:
	Federal	$	12,005		$	(4,270	)	$	(5,680	)
	State		1,418			(434	)		(909	)
	Foreign		(8	)		(4	)		—

	Total current (provision) benefit		13,415			(4,708	)		(6,589	)

Deferred (provision) benefit:
	Federal		4,558			1,132			(442	)
	State		356			186			(321	)
	Foreign		—			(62	)		—

	Total deferred (provision) benefit		4,914			1,256			(763	)

	Total income tax (provision) benefit	$	18,329		$	(3,452	)	$	(7,352	)

The Company's effective income tax rate applicable to continuing operations differs from the federal statutory rate as follows:

	2001					2000					1999
	(In Thousands, Except Percentage)
Federal income tax provision at statutory rate	$	14,219		35.0	%	$	(4,747	)	(35.0	)%	$	(5,279	)	(35.0	)%
State and local taxes, net of federal income tax effect and before valuation allowances		1,152		2.8			(161	)	(1.2	)		(799	)	(5.3	)
Foreign taxes		—		—			(448	)	(3.3	)		(41	)	(0.3	)
Goodwill amortization		(334	)	(0.6	)		(971	)	(7.2	)		(696	)	(4.6	)
Change in valuation allowance		(8,663	)	(21.3	)		(2,826	)	(20.8	)		150		0.9
Nondeductible expenses		(140	)	(0.4	)		(255	)	(1.9	)		(293	)	(1.9	)
InsurQuote		—		—			5,800		42.8			15		0.1
Write-off of foreign investments		12,101		29.7			—		—			—		—
Other, net		(6	)	(0.1	)		156		1.2			(409	)	(2.6	)

Income tax benefit (provision)	$	18,329		45.1	%	$	(3,452	)	(25.4	)%	$	(7,352	)	(48.7	)%

See Note 3—Investment in InsurQuote/ChannelPoint for discussion of income taxes as it relates to our investment in InsurQuote.

During 2001, the Company received net refunds of $4.5 million, of which $2.5 million related to the carryback to 1998 of losses incurred in 2000 and $2.0 million related to refunded tax payments previously made in 2000. During 2000 and 1999, the Company made income tax payments, net of refunds, of $1.6 million and $4.3 million, respectively. In conjunction with the exercise of certain stock options, the Company has reduced current income taxes payable with an offsetting credit to paid-in-capital for the tax benefit of these option exercises. During 2000 and 1999, these tax benefits totaled $1.4 million and $0.9 million, respectively.

The approximate income tax effect of each type of temporary difference giving rise to deferred income tax assets and liabilities was as follows:

		December 31,
		2001			2000
		(In Thousands)
Deferred income tax assets:
	Deferred revenue	$	1,998		$	1,396
	Depreciation and amortization		1,948			1,842
	Bad debt expense		856			833
	Rent		846			939
	Litigation settlement		1,995			606
	Accrued compensation		467			729
	Intangible amortization		1,055			1,097
	Net operating loss		11,252			—
	Lease termination		1,692			—
	Capital loss carryforward		7,280			—
	Foreign net operating losses		4,209			2,826
	Other, net		1,800			1,268

Subtotal			35,398			11,536
Valuation allowance			(11,489	)		(2,826	)

Total deferred income tax asset			23,909			8,710
Deferred income tax liabilities			—			(706	)

Net deferred income tax asset		$	23,909		$	8,004

During 2001 the Company recorded a net loss of $27.1 on the write-off of the ChannelPoint investment and note receivable, including accrued interest. For tax purposes, $20.8 million of this loss will be considered a capital loss which can only be offset with net capital gains. The Company believes that it is more likely than not that the capital loss will not be realized; therefore, a valuation allowance has been established for this item. For tax purposes, the Company has incurred a domestic net operating loss of $32.2 million during 2001. The realization of these net operating loss deferred tax assets is more likely than not, therefore, the Company has not established a valuation allowance related to these assets. The Company also has foreign net operating losses related to its former CCC International operations. The Company has established a valuation allowance for the full amount of these foreign net operating losses because realization of these assets is not more likely than not.

NOTE 12—OTHER CURRENT ASSETS

Other current assets consisted of the following:

		December 31,
		2001		2000
		(In Thousands)
Prepaid data royalties		$	1,854	$	1,892
Prepaid equipment maintenance			783		926
Prepaid insurance			536		282
Insurance reimbursement for litigation settlement			2,000		—
Computer inventory			164		603
Other			1,124		1,509

	Total	$	6,461	$	5,212

In connection with reductions in the former credit facility, the Company wrote off $0.2 million of unamortized deferred financing costs. In addition, with the closing of the new credit facility in November 2001, the Company wrote off unamortized deferred financing costs of $1.2 million related to the former credit facility.

In December 2001, the Company recorded a charge of $4.3 million, net of an expected insurance reimbursement of $2.0 million, in connection with a litigation settlement.

NOTE 13—PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

		December 31,
		2001			2000
		(In Thousands)
Computer equipment		$	9,163		$	24,792
Purchased software, licenses and databases			16,364			15,199
Furniture and other equipment			5,027			7,209
Leasehold improvements			6,513			4,957
Building and land			1,796			1,796

	Total, gross		38,863			53,953
Less accumulated depreciation			(25,376	)		(32,141	)

	Total, net	$	13,487		$	21,812

As a result of a review of the Company's computer equipment and software in 2001 and 2000, the Company wrote off out-of-service fully depreciated assets totaling $8.6 million and $15.8 million, respectively.

As of December 31, 2001 and 2000, computer equipment, net of accumulated depreciation, that is on lease to certain customers under operating leases of $0.2 million and $1.0 million, respectively, is included in computer equipment. Future minimum rentals under noncancelable customer leases aggregate approximately $0.4 million and $0.1 million in 2002 and 2003, respectively.

During the fourth quarter of 2001, the Company recorded a charge of $4.3 million to write off excess office space in Chicago. Included in this charge was $2.1 million of leasehold improvements.

During 2001, the Company entered into two separate agreements to lease software licenses. These leases, which are for 36 months expiring in early 2004, are classified as capital leases. The Company made payments of $0.4 million, which included interest of $0.1 million. Future minimum lease payments under these capital lease obligations aggregate approximately $0.6 million, $0.6 million and $0.2 million in 2002, 2003 and 2004, respectively.

NOTE 14—GOODWILL

Goodwill consisted of the following:

			December 31,
		Life	2001			2000
			(In Thousands)
CCC acquisition (1988)		20 years	$	16,458		$	16,458
UCOP acquisition (1994)		7 years		—			3,665
CCC International acquisition (1998)		7 years		—			1,910
Other (1999)		3 years		—			518

	Total, gross			16,458			22,551
Less accumulated amortization				(11,562	)		(15,327	)

	Total, net		$	4,896		$	7,224

See discussion in Note 8—Restructuring Charges concerning the Company's decision to shut down the D.W. Norris business in late 2000, the shut down of CCC International in June 2001 and the write-off of D.W. Norris's and CCC International's goodwill and Note 9—Discontinued Operations concerning the Company's decision to discontinue the operations of its CCC Consumer Services segment.

NOTE 15—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	December 31,
	2001		2000
	(In Thousands)
Accounts payable	$	13,081	$	16,040
Compensation		9,978		9,830
Professional fees		2,260		1,884
Litigation settlements		6,850		1,623
Sales tax		1,434		1,589
Health insurance		1,230		887
Commissions		673		874
Other, net		722		1,735

Total	$	36,228	$	34,462

NOTE 16—CCC CAPITAL TRUST

On February 23, 2001, CCC Capital Trust ("CCC Trust"), a business trust controlled by CCCG, issued 15,000 Trust Preferred Securities, which are presented on the consolidated balance sheet as "Company obligated manditorily redeemable preferred securities of subsidiary trust holding solely company guaranteed debentures", ("Trust Preferred Securities") and CCCG issued 100 shares of its Series F Preferred Stock, par value $1.00 per share, and a warrant to purchase 1,200,000 shares of its common stock at an exercise price of $10.00 per share to Capricorn Investors III, L.P., one of our existing stockholders. CCCG and CCC Trust received an aggregate purchase price of $15.0 million from the sale of these securities. The proceeds from the sale have been used for general corporate purposes.

In connection with the issuance of the Trust Preferred Securities by CCC Trust and the related purchase by the Company of all of the common securities of CCC Trust, the Company issued an Increasing Rate Note Due 2006 in the principal amount of $15.5 million, due February 23, 2006 ("Increasing Rate Note") to CCC Trust. The sole asset of CCC Trust is the Increasing Rate Note and any interest accrued thereon. The interest payment dates on the Increasing Rate Note correspond to the distribution dates on the Trust Preferred Securities. The Trust Preferred Securities mature simultaneously with the Increasing Rate Note. The Company has unconditionally guaranteed all of the Trust Preferred Securities to the extent of the assets of CCC Trust.

The Increasing Rate Note is subordinated to the Company's bank debt. Cumulative distributions on the Trust Preferred Securities accrue at a rate of (i) 9% per annum, payable in cash or in kind at the Company's option, for the first three years from February 23, 2001 and (ii) 11% per annum, payable in cash, thereafter. The Trust Preferred Securities are mandatorily redeemable on February 23, 2006. In addition, all or any portion of the outstanding Trust Preferred Securities may be called for redemption at the option of the Company at any time on or after February 23, 2004. The redemption price for both the mandatory and the optional redemptions is equal to the liquidation amount of the Trust Preferred Securities plus accrued but unpaid distributions. The Company issued payment-in-kind notes for quarterly interest payments due on March 31, June 30, September 30, 2001 and December 31, 2001.

On November 30, 2001, the Indenture relating to the Trust Preferred Securities was amended to permit the Company to conduct a rights offering and enter into a new bank credit facility. In addition, the 1,200,000 warrants issued to Capricorn Investors III, L.P. were amended to change the exercise price to $6.875, revised from the original exercise price of $10.00, in consideration for certain waivers and amendments that allowed the Company to conduct a rights offering and execute a new credit facility agreement. Using the Black-Scholes pricing model, the fair value of this amended pricing was estimated to be $0.7 million. See discussion in Note 17—Rights Offering and Note 18—Long Term Debt.

NOTE 17—RIGHTS OFFERING

On June 29, 2001, the Company filed with the Securities and Exchange Commission ("SEC") a Form S-3 Registration Statement to register $100 million of securities. The SEC declared this shelf registration statement effective on July 27, 2001. On November 7, 2001, the Company announced the approval by the Board of Directors of a $20 million rights offering ("Rights Offering") to be effectuated pursuant to the shelf registration statement previously filed with the SEC on June 29, 2001.

Upon completion of the Rights Offering on December 31, 2001, the total number of outstanding shares of common stock increased by approximately 3.6 million shares, or approximately 15.8%. The

Company utilized net proceeds of $18.1 million from the Rights Offering to reduce its outstanding debt.

Three of the Company's largest institutional stockholders and warrant holders, White River Ventures, Inc. and Capricorn Investors II and III L.P., agreed to purchase their pro-rata share of the Rights Offering, as well as all of the shares not subscribed for by the Company's other stockholders or warrant holders, up to an aggregate of $20 million. In consideration for this, the Company issued these stockholders 293,000 warrants to purchase shares of its common stock at a price of $5.50 per share.

NOTE 18—LONG-TERM DEBT

Under the amended and restated credit facility agreement dated October 28, 1998 with LaSalle National Bank, as agent, CCC increased its ability to borrow under the revolving line of credit from $20 million to $50 million and provided that the credit facility would be increased from $50 million to $100 million when the bank syndicate participating in the credit facility was completed, which occurred on February 10, 1999. The interest rate under this amended bank credit facility was the London Interbank Offered Rate ("LIBOR") plus 1.0% or the prime rate in effect from time to time, as selected by CCC. CCC paid a commitment fee of 0.25% on any unused portion of the revolving credit facility.

At December 31, 2000, CCC was not in compliance with certain of the covenants included in the credit facility. On February 15, 2001, CCC received a waiver from its bank group with respect to those covenants. The credit facility agreement was also amended on February 15, 2001 to reduce the available credit line from $100 million to $60 million effective December 31, 2000, and to place a general security lien on our assets on behalf of the bank group.

On April 17, 2001 and August 14, 2001, CCC and the bank group further amended the existing credit facility agreement. Each amendment provided CCC with waivers of certain amendments to the financial covenants and obligations. The terms of the amended agreements reduced the credit facility from $60 million to $50.5 million, the maturity date was changed to September 30, 2002, interest rates were increased to reflect current market and credit conditions, the credit facility availability stipulated reductions of $3.0 million per quarter beginning on September 30, 2001, and other mandatory prepayments or reductions of the credit facility were to apply in the event of certain transactions or events. On November 6, 2001, the bank group extended the maturity of the existing credit facility to October 1, 2002.

On November 30, 2001, in conjunction with the Rights Offering, CCC entered into a new $30 million credit facility agreement (the "New Credit Facility") with two lenders from the existing credit facility. The New Credit Facility replaces CCC's former credit facility. As compared to the former credit facility, the New Credit Facility provides CCC with improved terms and additional flexibility. The New Credit Facility contains negative covenants that, among other things, restrict CCC's ability to sell or transfer assets, make certain investments and make capital expenditures. In addition, the New Credit Facility has certain covenants that require CCC to maintain specified levels of quarterly operating cash flow, debt coverage, fixed charge coverage and net worth. CCC is also required to provide the bank group with monthly, quarterly and annual financial reporting. The New Credit Facility matures on November 30, 2004. The New Credit Facility is guaranteed by CCC and is secured by a blanket first priority lien on substantially all of the assets of CCC and its subsidiaries. All advances under the New Credit Facility bear interest, at CCC's election, at LIBOR plus a variable spread based on our leverage ratio or the prime rate in effect from time to time plus a variable spread based on our

leverage ratio. CCC pays a commitment fee of 0.50% on any unused portion of the New Credit Facility.

The closing of the Credit Facility prior to the Rights Offering required the utilization of an interim loan provided by White River Ventures and Capricorn Investors II and III L.P. as part of their agreement to purchase all those shares not subscribed for by the Company's other stockholders or warrant holders. In consideration for this, the Company issued White River Ventures and Capricorn Investors II and III L.P. 99,612 warrants to purchase shares of its common stock at a price of $5.50 per share. This interim loan was repaid upon the closing of the Rights Offering on December 31, 2001.

During the years ended December 31, 2001, 2000 and 1999, the weighted average interest rates were 7.8%, 7.6% and 6.8%, respectively. CCC made cash interest payments of $3.5 million, $2.6 million and $1.1 million, during the years ended December 31, 2001, 2000 and 1999, respectively. During 2001, CCC had net repayments under the line of credit of $35.5 million, resulting from draws under the credit facility of $53.4 million and repayments of $88.9 million. During 2000, CCC had net borrowings under the line of credit of $18.0 million, resulting from draws under the credit facility of $53.0 million and repayments of $35.0 million.

In addition, management believes that cash flows from operations, its available credit line facility, the funding it received from the Trust Preferred Securities and the Rights Offering will be sufficient to meet our liquidity needs for the year ending December 31, 2002. There can be no assurance, however, that we will be able to satisfy our liquidity needs in the future without engaging in financing activities beyond those described above.

In connection with the acquisition of D.W. Norris in August of 1999, the Company assumed $0.5 million of debt outstanding under a credit facility agreement with Barclays Bank PLC bearing interest at LIBOR plus 3%. This credit facility was paid in full in December 2000 and no further borrowings are permitted under this facility. D.W. Norris made cash interest payments of $0.2 million during the year ended December 31, 2000.

Long-term debt consisted of the following:

		December 31,
		2001		2000
		(In Thousands)
Credit Facility		$	6,500	$	42,000
Capital lease obligations			1,066		314

	Total debt		7,566		42,314
Due within one year (capital lease obligations)			421		314

Due after one year		$	7,145	$	42,000

NOTE 19—MANDATORILY REDEEMABLE PREFERRED STOCK

On June 16, 1994, pursuant to a reorganization and recapitalization, the Company issued: (a) 5,000 shares of its preferred stock, par value $1.00, designated as Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock"), (b) 34,000 shares of its preferred stock, par value $1.00, designated as Series D Cumulative Redeemable Preferred Stock ("Series D Preferred Stock") and (c) 7,050,840 shares of the Company's Common Stock, par value $0.10, to White River in exchange for the Company's subordinated debt and Series A, B and C warrants acquired from the original subordinated debtholders by White River on April 15, 1994.

Through the date of redemption, Preferred Stock dividends accrued at a rate of 2.75% per annum. Because the Company completed the required redemption of Preferred Stock through the use of proceeds from the Company's initial public offering of common stock, Preferred Stock dividends from the date of redemption through June 16, 1998 have been eliminated. Beginning June 17, 1998, Preferred Stock dividends, payable quarterly, accrued at an annual rate of 8%. The Preferred Stock was mandatorily redeemable, at stated value plus accrued dividends, on June 16, 1999. Prior to the mandatory redemption date, under the terms of the Preferred Stock, White River was only required to accept an offer to redeem that was funded through a public offering of the Company's common stock. On May 29, 1998, the Company made an offer to White River to redeem all outstanding Preferred Stock. This redemption offer was declined by White River. Accordingly, under the terms of the Preferred Stock, the dividend rate on the Preferred Stock subject to the redemption offer was reduced from 8% to 1%.

On December 31, 1998, the Company redeemed all of the Series C Preferred stock outstanding and 3,601 Shares of Series D Preferred Stock at a discounted value of 14% of the future redemption value and stated dividends plus accrued dividends as of December 31, 1998. In accordance with the terms of the Preferred Stock, the remaining 184 Shares of Series D Preferred Stock and 500 Shares of Series E Preferred Stock were redeemed on June 16, 1999.

NOTE 20—TREASURY STOCK

During 1999 and 1998, the Board of Directors authorized the Company to repurchase 4.1 million common shares at a price not to exceed $15 per share. On June 12, 2000, the Board of Directors authorized the Company to purchase an additional 2.0 million common shares. At December 31, 2001, the Company has authorization to purchase 1.9 million of its common shares. The Company repurchased in 2000 and 1999 approximately 0.7 million shares and 2.1 million shares, respectively, with cash outlays of $8.2 million and $24.1 million, respectively. As part of the legal settlement between

CCC and Autobody Software Solutions, Inc ("Autobody") (See Note 10—Litigation Settlements), the Company issued 15,000 common shares at a cost of $0.2 million to Autobody. In 1999, the Company recorded a compensation charge of $1.2 million as a result of a stock repurchase of 500,000 common shares from a charitable trust funded by the Company's former chairman, David M. Phillips. In addition, in June 1999, the Company issued 12,000 common shares valued at $12.75 per share on the date of issuance as additional compensation to a member of the Company's Board of Directors. In January 2002, the Company received a promissory note from the Chief Executive Officer and Chairman of the Board in the amount of $1.2 million for the purchase of 192,000 treasury shares at a price of $6.25 per share. This promissory note accrues interest, payable on an annual basis beginning March 1, 2003, at 6.75% and matures in January 2007.

NOTE 21—EMPLOYEE BENEFIT PLANS

Defined Contribution Savings and Investment Plan

The Company sponsors a tax-qualified defined contribution savings and investment plan ("Savings Plan"). Participation in the Savings Plan is voluntary, with substantially all employees eligible to participate. Expenses related to the Savings Plan consist primarily of Company contributions that are based on percentages of certain employees' contributions. Defined contribution expense for the years ended December 31, 2001, 2000 and 1999 was $1.2 million, $1.1 million and $1.2 million, respectively.

Employee Stock Purchase Plan

In March of 1998, the Company established an employee stock purchase plan that enables eligible employees to purchase shares of the Company's common stock at the lesser of (i) 85 percent of the fair market value of the Company's stock on the applicable grant date (February 1, May 1, August 1, or November 1) or (ii) 85 percent of the fair market value of the Company's stock on the last day of that month during the offering period. Under the employee stock purchase plan, 500,000 shares have been authorized for issuance and 306,362 are available for issuance at December 31, 2001. During 2001, 2000 and 1999, the Company issued 93,324, 77,736 and 77,384 shares pursuant to the employee stock purchase plan at prices ranging from $4.64 to $7.23, $5.63 to $14.13 and $8.18 to $11.05, respectively. See Note 22—Stock Option Plan for pro forma results had compensation expense been recognized based on fair value as of the grant dates as prescribed by SFAS 123.

NOTE 22—STOCK OPTION PLAN

In May 1988, the Company's Board of Directors adopted a nonqualified stock option plan ("1988 Plan"). Under the 1988 Plan, as amended in 1992, options may be granted at a per share price of not less than the greater of $1.375 or the fair market value as of the date of grant, as determined by the Compensation Committee of the Board of Directors ("Committee"). The 1988 Plan's options are generally exercisable within 5 years from the date of grant, subject to vesting schedules determined at the discretion of the Committee. In general, however, option grants vest over 4 years. Under the 1988 Plan, 2,956,040 total options were available to be granted. At December 31, 2001, no additional options can be granted and 154,680 options were outstanding under the 1988 Plan.

During 1997, the Company's Board of Directors adopted a new stock option plan ("1997 Plan") that provided for the granting of 675,800 options to purchase the Company's common stock. As under the 1988 Plan, options are generally exercisable within five years from the date of grant. In 1998, the 1997 Plan was amended to increase the number of shares available to be granted to 1,500,000 shares. In addition, the term of the option was extended from 5 years to 10 years on new stock option grants. The 1997 Plan was amended in 1999 to increase the number of shares available to be granted up to 2,500,000.

On June 28, 2000, the Company's shareholders approved a new stock incentive plan ("2000 Plan") as an amendment and restatement of the 1997 Plan. The terms of the 2000 Plan were applied to all outstanding options under the 1997 Plan. No additional awards will be granted under the 1997 Plan. The 2000 Plan provides that the aggregate number of shares of the Company's common stock that may be issued under the 2000 Plan, including shares authorized but not issued or reserved under the 1997 Plan, shall not exceed 3,900,000. In the event of a lapse, expiration, termination, forfeiture or cancellation of any option granted under the 2000 Plan or the 1997 Plan without the issuance of shares or payment of cash, the common stock subject to or reserved for such incentive may be used again. At December 31, 2001, additional options of 938,474 are available to be granted under the 2000 Plan.

Option activity during 2001, 2000 and 1999 is summarized below:

			2001				2000				1999
			Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Options Outstanding:
	Beginning of year		3,190,013		$	10.57	2,210,136		$	6.48	1,975,050		$	9.64
	Granted		998,524		$	7.32	1,911,671		$	10.45	871,775		$	11.80
	Exercised		(14,600	)	$	7.50	(358,267	)	$	6.95	(310,467	)	$	4.15
	Surrendered or terminated		(1,168,485	)	$	11.38	(573,527	)	$	12.83	(326,222	)	$	13.54

		End of year	3,005,452		$	9.31	3,190,013		$	10.57	2,210,136		$	6.48

Options exercisable at year-end			1,211,629		$	9.61	788,665		$	10.29	858,274		$	8.25

Weighted average fair value of options granted during the year					$	3.22			$	4.72			$	11.80

The following table summarizes information about fixed stock options outstanding at December 31, 2001:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$1.38 to $1.38	154,680	3.23	$	1.38	154,680	$	1.38
$5.51 to $6.75	333,540	9.76	$	6.11	25,000	$	5.51
$6.88 to $6.88	92,333	8.82	$	6.88	23,375	$	6.88
$7.11 to $8.69	1,010,442	8.34	$	8.18	328,817	$	8.32
$8.75 to $12.75	1,143,707	7.70	$	10.95	553,756	$	11.31
$13.73 to $18.50	270,750	6.04	$	15.88	126,001	$	17.90
$1.38 to $18.50	3,005,452	7.75	$	9.31	1,211,629	$	9.61

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. The principal determinants of option pricing are: fair market value of the Company's common stock at the date of grant, expected volatility, risk-free interest rate, expected

option lives and dividend yields. Weighted average assumptions employed by the Company were: expected volatility of 43%, 41% and 36% for 2001, 2000 and 1999, respectively; and a risk-free interest rate of 4.6%, 5.9% and 5.5% for 2001, 2000 and 1999, respectively. In addition, the Company assumed an expected option life of 5.5 years for 2001, 2000 and 1999. No dividend yield was assumed for all years.

The Company applies Accounting Principle Board Opinion No. 25 in accounting for its fixed stock option plans and employee stock purchase plan, and accordingly, has not recognized compensation cost in the accompanying consolidated statement of operations. Had compensation cost been recognized based on fair value as of the grant dates as prescribed by SFAS 123, the Company's net income (loss) applicable to common stock and related per share amounts would have been impacted as indicated below:

		2001			2000			1999
		(In Thousands, Except Per Share Data)
Net income (loss) applicable to common stock:
	As reported	$	(30,625	)	$	(9,243	)	$	750
	Pro forma	$	(32,704	)	$	(11,051	)	$	(638	)
Per share net income (loss) applicable to common stock assuming dilution:
	As reported	$	(1.39	)	$	(0.42	)	$	0.03
	Pro forma	$	(1.49	)	$	(0.51	)	$	(0.03	)

The effects of applying SFAS 123 in the above pro forma disclosures are not necessarily indicative of future amounts as they do not include the effects of awards granted prior to 1995, some of which would have had income statement effects in 2001, 2000 and 1999. Additionally, future amounts are likely to be affected by the number of grants awarded since additional awards are generally expected to be made at varying amounts.

NOTE 23—EARNINGS PER SHARE

A summary of the calculation of basic and diluted earnings per share for the years ended December 31, 2001, 2000 and 1999, is presented below (in thousands, except per share data):

		Year Ended December 31,
		2001			2000			1999
Net income (loss)		$	(30,625	)	$	(9,243	)	$	752
Less: Dividends and accretion on mandatorily redeemable preferred stock			—			—			(2	)

Net income (loss) applicable to common stock		$	(30,625	)	$	(9,243	)	$	750

Weighted average common shares			21,967			21,851			22,856
Effect of common stock options			—			—			306

Weighted average diluted shares			21,967			21,851			23,162

Income (loss) per common share—basic:
	Income (loss) from continuing operations	$	(1.12	)	$	(0.25	)	$	0.05
	Loss from discontinued operations		(0.27	)		(0.17	)		(0.02	)

Income per common share—basic		$	(1.39	)	$	(0.42	)	$	0.03

Income (loss) per common share—diluted:
	Income (loss) from continuing operations	$	(1.12	)	$	(0.25	)	$	0.05
	Loss from discontinued operations		(0.27	)		(0.17	)		(0.02	)

Income per common share—diluted		$	(1.39	)	$	(0.42	)	$	0.03

Options and warrants to purchase a weighted average number of 4,070,040 shares, 820,178 shares and 708,919 shares of common stock for 2001, 2000 and 1999, respectively, were not included in the computation of diluted earnings per share because the options' exercise prices were greater than the average market price of the common shares during those periods. The price of these options and warrants ranged from $7.50 to $18.50 per share. At December 31, 2001, 3,613,649 of these options and warrants, which expire between 2002 and 2011, were still outstanding. In addition, since the Company had net losses for the years ended December 31, 2001 and December 31, 2000, options to purchase a weighted average of 93,687 and 228,849 shares, respectively, were not included in the computation of diluted earnings per share because the options, if included, would have been antidilutive.

NOTE 24—COMMITMENTS AND CONTINGENCIES

The Company leases facilities, computers, telecommunications and office equipment under noncancelable operating lease agreements that expire at various dates through 2008. As of December 31, 2001, future minimum cash lease payments were as follows:

	(In Thousands)
2002	$	11,539
2003		8,769
2004		6,271
2005		3,342
2006		2,668
Thereafter		4,895

Total	$	37,484

During 2001, 2000 and 1999, operating lease rental expense was $8.1 million, $7.6 million and $6.7 million, respectively.

The Company has a $0.1 million letter of credit available until October 2003 for the CCC International office space in Peterborough, United Kingdom, a $0.4 million letter of credit until April 2002 for a utility company and a $0.7 million letter of credit available until March 31, 2003 for office space in Chicago. The pricing for each letter of credit is determined pursuant to the terms outlined in the Credit Facility. The Company is currently in the process of canceling the letter of credit for the office space in the U.K. due to the shut down of CCC International. There was no amount outstanding under the letter of credits at December 31, 2001.

NOTE 25—BUSINESS SEGMENTS

We currently operate our business as one segment. Our products and services facilitate the processing of automobile physical damage claims and help to improve decision making and communication between various parties, such as automobile insurance companies and collision repair facilities, involved in the automobile claims process. See discussion in Note 10—Restructuring Charges concerning the Company's decision to shut down CCC International, previously reported as a segment. DriveLogic, formed in 1999 and previously reported as a segment, develops products and services that serve the automobile claims industry supply chain through the Internet. As part of a restructuring at the end of June 2001, the Company consolidated the operations of DriveLogic with the CCC U.S. segment. In addition, the Company previously reported CCC Consumer Services as a segment. See discussion in Note 11—Discontinued Operations concerning the Company's decision to shut down the Consumer Services business. Shared services, tasked with facilitating the performance of the revenue producing divisions, now supports the one reported segment.

Statement of Financial Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and Related Information" ("SFAS 131"), establishes standards for the reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

We market our products and services through one U.S. sales and service organization. Our chief operating decision maker evaluates resource allocation decisions and our performance based on

financial information on a total company profit level and at the product revenue level, accompanied by disaggregated information about revenues by geographic regions.

Revenues by geographic region were as follows (in thousands):

	2001		2000		1999
United States	$	186,259	$	176,889	$	173,723
Europe		1,682		7,752		5,298

Total	$	187,941	$	184,641	$	179,021

Revenue by major products in the U.S. include:

	2001		2000		1999
Pathways Workstation/Collision Estimating Products	$	109,568	$	102,585	$	101,279
Total Loss Valuation Services		47,977		49,332		51,229
Information Services		828		487		362
Workflow Products		19,706		14,054		9,612
Other		8,180		10,431		11,241

Total	$	186,259	$	176,889	$	173,723

NOTE 26—LEGAL PROCEEDINGS

On January 31, 2000, a putative class action lawsuit was filed against CCC, Dairyland Insurance Co., and Sentry Insurance Company in the Circuit Court of Johnson County, Illinois. The case is captioned SUSANNA COOK v. DAIRYLAND INS. CO., SENTRY INS. and CCC INFORMATION SERVICES INC., No. 2000 L-1. Plaintiff alleges that her insurance company, using a valuation prepared by CCC, offered an inadequate amount for her automobile. Plaintiff seeks to represent a nationwide class of all insurance customers, who, during the period from January 28, 1989, up to the date of trial, had their total loss claims settled using a valuation report prepared by CCC. The complaint also seeks certification of a defendant class consisting of all insurance companies who used the Company's valuation reports to determine the "actual cash value" of totaled vehicles. Plaintiff asserts various common law and contract claims against the defendant insurance companies, and various common law claims against CCC. Plaintiff seeks an unspecified amount of compensatory and punitive damages, as well as an award of attorney's fees and costs.

and CCC INFORMATION SERVICES INC., Case No. 01 L 159 (filed February 6, 2001); HUFF v. HARTFORD INS. CO. OF ILLINOIS d/b/a THE HARTFORD AND CCC INFORMATION SERVICES INC., Case No. 01 L 158 (filed February 6, 2001); KNACKSTEDT v. ST. PAUL FIRE AND MARINE INS. CO. and CCC INFORMATION SERVICES INC., Case No. 01 L 153 (filed February 6, 2001); MOORE v. SHELTER INS. COS. and CCC INFORMATION SERVICES INC., Case No. 01 L 160 (filed February 6, 2001); TRAVIS v. KEMPER CASUALTY INS. CO. d/b/a KEMPER INSURANCE and CCC INFORMATION SERVICES INC., Case No. 01 L 290 (filed February 16, 2001). The plaintiff in the BILLUPS case dismissed his claims against CCC without prejudice on October 5, 2001. The allegations and claims asserted in these cases are substantially similar to those in the COOK case, as is the relief sought. Each plaintiff seeks to represent a nationwide class of the customers of the insurance company that is the defendant in that case who, during the period from January 28, 1989, up to the date of trial, had their total loss claims settled using a valuation report prepared by CCC.. The LANCEY case seeks certification of a defendant class, as does the COOK case.

CCC and certain of its insurance company customers have been engaged in settlement discussions with the plaintiffs' attorneys who filed the above-referenced cases in Johnson County and Madison County, Illinois. Upon completion, the anticipated settlement would resolve potential claims arising out of approximately 30 percent of the CCC's total transaction volume during the time period covered by the lawsuits, and it would also resolve a number of the putative class action suits currently pending against CCC and certain of its customers. These settlement negotiations are ongoing, but at this time CCC and certain of its insurance company customers have reached an agreement in principle as to CCC's proposed contribution to the potential settlement. During the fourth quarter of 2001, the Company recorded a pre-tax charge of $4.3 million, net of an expected insurance reimbursement of $2.0 million, as an estimate of the amount that CCC will contribute toward the potential settlement. Upon completion of the anticipated settlement, CCC would agree to enter into the settlement for the purpose of avoiding the expense and distraction of protracted litigation, without any express or implied acknowledgment of any fault or liability to the plaintiff, the putative class or anyone else.

The consummation of the settlement with the plaintiffs and the amount of CCC's contribution to the proposed settlement remain subject to a number of significant contingencies, including, among other things, the extent of participation on the part of CCC's insurance company customers, the negotiation of settlement terms between the plaintiffs and those of CCC's customers that are participating in the settlement negotiations, as well as judicial approval of any proposed settlement agreement. As a result, at this time, there is no assurance that the settlement will be successfully consummated or, if completed, that the final settlement will be on the terms or levels of participation set forth above. There is also no assurance that existing or potential claims arising out of the remainder of the Company's total loss transaction volume could be settled on comparable terms.

SERVICES INC., No. 00 CH 10545 (filed July 18, 2000). The same group of plaintiffs' attorneys filed an additional case in the Circuit Court of Cook County on or about May 16, 2001. That case is captioned SCALES v. GEICO GENERAL INSURANCE COMPANY AND CCC INFORMATION SERVICES INC., NO. 01 CH 8198 (filed May16, 2001). CCC was not served with the SCALES complaint until November of 2001. These cases contain allegations and claims that are substantially similar to the cases pending in Madison County, Illinois described above.

Between June and August of 2000, a separate group of plaintiffs' attorneys filed three putative class action cases against CCC and various of its insurance company customers in the State Court of Fulton County, Georgia. Those cases are McGOWAN v. PROGRESSIVE CASUALTY INS. CO., PROGRESSIVE INS. CO., and CCC INFORMATION INC., Case No. 00VS006525 (filed June 16, 2000), DASHER v. ATLANTA CASUALTY CO. and CCC INFORMATION SERVICES INC., Case No. 00VS006315 (filed 6/16/00) and WALKER v. STATE FARM MUTUAL AUTOMOBILE INS. CO. and CCC INFORMATION SERVICES INC., Case No. 00VS007964 (filed August 2, 2000). The plaintiff in each case alleges that his or her insurance company, using a valuation prepared by CCC, offered plaintiff an inadequate amount for his or her automobile and that CCC's Total Loss valuation service provides values that do not comply with the applicable Georgia regulations. The plaintiffs assert various common law and statutory claims against the defendants and seek to represent a nationwide class of insurance company customers. Additionally plaintiffs seek to represent a similar statewide sub-class for claims under the Georgia RICO statute. Plaintiffs seek unspecified compensatory, treble and punitive damages, as well as an award of attorneys' fees and expenses.

Together with its co-defendant Nationwide, CCC has entered into an agreement to settle the WHITWORTH case. If consummated, the proposed settlement in the WHITWORTH case would resolve all claims on behalf of a national settlement class consisting of all policyholders of Nationwide (and all its affiliates): (a) who have submitted first party property damage claims; (b) whose vehicle was declared a total loss; (c) for whose vehicle Nationwide (or its affiliate) received a valuation of the total loss vehicle from CCC; and (d) who received payment for the total loss claim between January 1, 1987 and the date on which notice of the settlement is mailed. These class members constitute approximately 5 percent of the Company's total loss transaction volume during the period covered by the lawsuit. Class members who do not opt out of the settlement would release any and all claims against CCC and Nationwide (and its affiliates) arising out of or relating to first party property damage claims made to Nationwide (or its affiliates) and/or our CCC's valuation of their total loss vehicles for Nationwide (or its affiliates). Class members who exercise their right to opt out of the settlement, however, would not be bound by the settlement and would not release any claims as part of the settlement.

allege that the insurer, using a valuation provided by CCC, offered them an inadequate amount for their automobile. The plaintiffs also allege that CCC's Total Loss valuation service provides values that do not comply with applicable state regulations governing total loss claims settlements. On that basis, the plaintiffs assert various claims against CCC and seek an award of unspecified compensatory and punitive damages, attorneys' fees, interest and costs. The plaintiff in ROMERO also seeks injunctive and declaratory relief. The STOUDEMIRE and HECKLER cases are pled as individual actions, while the plaintiff in BEARDEN seeks to represent a class of Georgia Farm Bureau customers whose total loss claims were adjusted using a CCC valuation and the plaintiff in ROMERO seeks to represent a class of certain California residents insured under a Vesta California policy whose total loss claims were adjusted using a CCC valuation.

On or about January 18, 2002, a complaint was filed in the State Court of Fulton County, Georgia against the Company, one of its insurance company customers, Allstate, and other defendants. The case is captioned HUTCHINSON v. ALLSTATE INSURANCE COMPANY, BRANCH BANKING & TRUST COMPANY, SADISCO CORPORATION, and CCC INFORMATION SERVICES INC., Civil Action No. 02V5027697C (filed January 18, 2002). The plaintiffs in the HUTCHINSON case allege that their insurer declared their vehicle a total loss despite a dispute over the value of the vehicle. Plaintiffs further allege that, despite their instructions not to dispose of the vehicle, Allstate had the car towed and subsequently sold. Plaintiffs allege that CCC provided Allstate with a reduced fair market value for their vehicle. Plaintiffs assert various common law claims against CCC and the other defendants, as well as a claim under the Georgia RICO statute. Plaintiffs seek an award of unspecified compensatory and punitive damages and attorneys' fees.

Four of the Company's automobile insurance company customers have made contractual and, in some cases, also common law indemnification claims against the Company for litigation costs, attorneys' fees, settlement payments and other costs allegedly incurred by them in connection with litigation relating to their use of the Company's Total Loss valuation product. These four claims include the indemnification demand made by Nationwide Mutual Insurance Company discussed above. The Company has asserted various defenses to these indemnification claims.

CCC intends to vigorously defend its interests in all of the above described lawsuits and claims to which it is a party and support its customers in other actions. Due to the numerous legal and factual issues that must be resolved during the course of litigation, CCC is unable to predict the ultimate outcome of any of these actions. If CCC were held liable in any of the actions (or otherwise concludes that it is in CCC's best interest to settle any of them), CCC could be required to pay monetary damages (or settlement payments). Depending upon the theory of recovery or the resolution of the plaintiff's claims for compensatory and punitive damages, or potential claims for indemnification or contribution by CCC's customers in any of the actions, these monetary damages (or settlement payments) could be substantial and could have a material adverse effect on CCC's business, financial condition or results of operations. The Company is unable to estimate the magnitude of its exposure, if any, at this time. As additional information is gathered and the litigations proceed, CCC will continue to assess its potential impact.

In addition to the foregoing, two cases previously disclosed by CCC during 2001 were resolved during the last quarter of 2001.

NOTE 27—SUMMARIZED QUARTERLY OPERATING RESULTS (UNAUDITED)

The following table sets forth unaudited consolidated statements of operations for the quarters in the years ended December 31, 2001 and 2000. These quarterly statements of operations have been prepared on a basis consistent with the audited financial statements. They include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the quarterly results of operations, when such results are read in conjunction with the audited consolidated financial statements and the notes thereto. The operating results for any quarter are not necessarily indicative of results for any future period. Amounts are in thousands, except for per share data.

		2001												2000
		First			Second			Third			Fourth			First			Second			Third			Fourth
Revenues		$	47,390		$	46,128		$	46,592		$	47,831		$	47,680		$	44,479			45,782		$	46,700
Operating expenses			(45,632	)		(46,885	)		(42,741	)		(40,510	)		(41,290	)		(43,835	)		(49,318	)		(46,575	)
Restructuring charges			—			(6,199	)		—			(4,300	)		—			—			—			(6,017	)
Litigation settlements			—			—			—			(4,250	)		—			—			(1,425	)		(950	)

Operating income (loss)			1,758			(6,956	)		3,851			(1,229	)		6,390			644			(4,961	)		(6,842	)
Interest expense			(1,251	)		(1,188	)		(1,145	)		(2,096	)		(650	)		(739	)		(864	)		(882	)
Other income (expense), net			286			401			44			(979	)		4,377			225			145			354
Gain on exchange of investment securities, net			—			—			—			—			—			18,437			—			—
CCC Capital Trust minority interest expense			(150	)		(384	)		(410	)		(427	)		—			—			—			—
Loss on investment securities and notes			—			(27,595	)		—			(672	)		—			—			—			—
Equity in losses of ChoiceParts			(876	)		(795	)		(481	)		(334	)		—			(312	)		(476	)		(1,283	)

Income (loss) from continuing operations before income taxes			(233	)		(36,517	)		1,859			(5,737	)		10,117			18,255			(6,156	)		(8,653	)
Income tax benefit (provision)			105			17,957			(946	)		1,213			(4,990	)		2,208			2,658			(3,328	)

Income (loss) from continuing operations before equity losses			(128	)		(18,560	)		913			(4,524	)		5,127			20,463			(3,498	)		(11,981	)
Equity in net income (losses) of affiliates			(2,692	)		79			259			—			(813	)		(3,496	)		(3,657	)		(7,684	)

Income (loss) from continuing operations			(2,820	)		(18,481	)		1,172			(4,524	)		4,314			16,967			(7,155	)		(19,665	)
Income (loss) from discontinued operations, net of income taxes			(6,982	)		—			—			1,010			221			290			(447	)		(3,768	)

Net income (loss)		$	(9,802	)	$	(18,481	)	$	1,172		$	(3,514	)	$	4,535		$	17,257		$	(7,602	)	$	(23,433	)

Per Share Data:
	Income (loss) per common share—basic	$	(0.45	)	$	(0.85	)	$	0.05		$	(0.16	)	$	0.20		$	0.79		$	(0.35	)	$	(1.08	)

	Income (loss) per common share—diluted.	$	(0.45	)	$	(0.85	)	$	0.05		$	(0.16	)	$	0.20		$	0.78		$	(0.35	)	$	(1.08	)

Weighted average shares outstanding:
	Basic		21,768			21,794			21,821			22,480			22,149			21,959			21,613			21,687
	Diluted		21,768			21,794			21,895			22,480			22,811			22,113			21,613			21,687

CCC INFORMATION SERVICES GROUPING INC.
AND SUBSIDIARIES

Supplemental Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts
(In Thousands)

Description	Balance at Beginning of Period	Charged to Costs and Expenses	Charged to Other Accounts	Additions/ Deductions		Balance at End of Period
1999 Allowance for Doubtful Accounts	3,258	8,280	—	(7,563	)(a)	3,975
2000 Allowance for Doubtful Accounts(b)	3,914	4,172	97	(4,912	)(a)	3,271
2001 Allowance for Doubtful Accounts(b)	3,271	1,920	83	(2,986	)(a)	2,288
1999 Deferred Income Tax Valuation Allowance	341	—	—	(341	)(c)	—
2000 Deferred Income Tax Valuation Allowance	—	—	—	2,826	(d)	2,826
2001 Deferred Income Tax Valuation Allowance	2,826	—	—	8,663	(e)	11,489

(a): Accounts receivable write-offs, net of recoveries.
(b): The allowance for doubtful accounts for 2000 and 2001 have been restated to exclude balances related to discontinued operations.
(c): Decrease in deferred income tax valuation allowance for expired capital loss carryforward and utilization of foreign net operating losses.
(d): Increase in deferred income tax valuation allowance for foreign net operating losses.
(e): Increase in deferred income tax valuation allowance for foreign net operating losses and ChannelPoint capital loss carryforward.

EXHIBIT INDEX

3.1		Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 of the Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
3.2		Certificate of Amendment of Amended and Restated Certificate of Incorporation for the Company (incorporated herein by reference to Exhibit 3.2 of the Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
3.3		Second Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 of the Company's 1996 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on March 14, 1997)
10.1		Purchase Agreement, dated as of November 29, 2001, between CCC Information Services Group Inc., White River Ventures, Inc., Capricorn Investors II, L.P. and Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 3, 2001)
10.2		Second Amended and Restated Credit Facility, dated as of November 30, 2001, by and among CCC Information Services Inc., the financial institutions from time to time parties thereto and LaSalle Bank National Association, as Administrative Agent (incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 3, 2001)
10.3		First Amendment and Waiver, dated as of November 30, 2001, to the Warrant dated as of February 23, 2001, issued by CCC Information Services Group Inc. for the benefit of Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 3, 2001)
10.4		Supplemental Indenture, dated as of November 30, 2001, by and between CCC Information Services Group Inc. and Wilmington Trust Company (incorporated herein by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 3, 2001)
10.5		Agreement, dated as of November 30, 2001, between CCC Information Services Group Inc. and Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.5 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 3, 2001)
10.6		Amended and Restated Security Agreement, dated as of November 30, 2001, between CCC Information Services Inc. and LaSalle Bank National Association (incorporated herein by reference to Exhibit 10.6 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 4, 2001)
10.7		Amended and Restated Pledge Agreement of Domestic Subsidiaries, dated as of November 30, 2001, between CCC Information Services Inc.'s Subsidiaries and LaSalle Bank National Association (incorporated herein by reference to Exhibit 10.7 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 4, 2001)

10.8		Amended and Restated Domestic Subsidiary Guaranty, dated as of November 30, 2001, between CCC Information Services Inc.'s Subsidiaries and LaSalle Bank National Association (incorporated herein by reference to Exhibit 10.8 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 4, 2001)
10.9		Amended and Restated Pledge Agreement, dated as of November 30, 2001, between CCC Information Services Group Inc. and LaSalle Bank National Association (incorporated herein by reference to Exhibit 10.9 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 4, 2001)
10.10		Amended and Restated Guaranty, dated as of November 30, 2001, between CCC Information Services Group Inc. and LaSalle Bank National Association (incorporated herein by reference to Exhibit 10.10 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 4, 2001)
10.11		Subordination Agreement, dated as of November 30, 2001, by and among LaSalle Bank National Association, White River Ventures, Inc., Capricorn Investors II, L.P. and Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.11 of the Company's Current Report on Form 8-K, as amended, Commission File Number 000-28600 filed on December 4, 2001)
10.12		Securities Purchase Agreement dated as of February 23, 2001 Among CCC Information Services Group Inc., CCC Capital Trust and Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.14 of Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
10.13		Registration Rights Agreement dated as of February 23, 2001 Between CCC Information Services Group Inc. and Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.15 of Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
10.14		Warrant dated as of February 23, 2001 issued by CCC Information Services Group Inc. for the benefit of Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.16of Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
10.15		Agreement dated as of February 23, 2001 between CCC Information Services Group Inc. and Capricorn Investors III, L.P. (incorporated herein by reference to Exhibit 10.17 of Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
10.16	*	Amended and Restated MOTOR Crash Estimating Guides Database License Agreement
10.17		ChoiceParts, LLC Members' Agreement By and Among ChoiceParts, LLC, ADP, Inc., CCC Information Services, Inc. and the Reynolds and Reynolds Company dated May 4, 2000 (incorporated herein by reference to Exhibit 10.13 of Company's 2000 Annual Report on Form 10-K, as amended, Commission File Number 000-28600 filed on April 17, 2001)
10.18		2000 Stock Option Plan (incorporated herein by reference to Exhibit 4.01 of the Company's Registration Statement on Form S-8, Commission File Number 333-51328 filed on December 6, 2000)
10.19		1997 Stock Option Plan, as amended (incorporated herein by reference to Exhibit 4.04 of the Company's Registration Statement on Form S-8, Commission File Number 333-67645 filed November 20, 1998)

10.20		1997 Stock Option Plan, as amended (incorporated herein by reference to the Company's Registration Statement on Form S-8, Commission File Number 333-79983 filed June 4, 1999)
10.21	*	401(K) Company Retirement Savings & Investment Plan, as amended and restated effective January 1, 2001, dated February 27, 2002
10.22		1998 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 4.04 of the Company's Registration Statement on Form S-8, Commission File Number 333-47205 filed March 2, 1998)
10.23	*	Employment Agreement, effective July 1, 2001, by and between CCC Information Services Inc. and Githesh Ramamurthy (management contract required to be filed pursuant to Item 601 of Regulation S-K)
10.24	*	Executive Loan Arrangement by and between CCC Information Services Inc. and Charlesbank Capital Partners dated July 16, 2001
10.25	*	Promissory Note from Githesh Ramamurthy to CCC Information Services Group Inc. (management contract required to be filed pursuant to Item 601 of Regulation S-K)
10.26	*	Promissory Note from Githesh Ramamurthy to CCC Information Services Group Inc. (management contract required to be filed pursuant to Item 601 of Regulation S-K)
13.1	*	ChoiceParts, LLC Audited Financial Statements for the year ended December 31, 2001
13.2	*	Enterstand Limited Audited Financial Statements for the year ended December 31, 2001
21	*	List of Subsidiaries
23.1	*	Consent of PricewaterhouseCoopers LLP

*: Filed herewith.

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 26, 2002		CCC INFORMATION SERVICES GROUP INC.
By:	/s/ Githesh Ramamurthy	By:	/s/ Thomas L. Kempner
Name:	Githesh Ramamurthy	Name:	Thomas L. Kempner
Title:	Chairman and Chief Executive Officer	Title:	Director
By:	/s/ Reid E. Simpson	By:	/s/ Dudley C. Mecum
Name:	Reid E. Simpson	Name:	Dudley C. Mecum
Title:	Executive Vice President and Chief Financial Officer	Title:	Director
By:	/s/ Morgan W. Davis	By:	/s/ Mark A. Rosen
Name:	Morgan W. Davis	Name:	Mark A. Rosen
Title:	Director	Title:	Director
By:	/s/ Michael R. Eisenson	By:	/s/ Herbert S. Winokur Jr.
Name:	Michael R. Eisenson	Name:	Herbert S. Winokur Jr.
Title:	Director	Title:	Director

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

Directors		Morgan W. Davis Senior Advisor White Mountain Insurance Group
		Michael R. Eisenson Managing Director and Chief Executive Officer Charlesbank Capital Partners LLC
		Thomas L. Kempner Chairman and Chief Executive Officer Loeb Partners Corporation
		Dudley C. Mecum Managing Director Capricorn Holdings, LLC and Capricorn Holdings III, LLC
		Githesh Ramamurthy Chairman and Chief Executive Officer CCC Information Services Group Inc.
		Mark A. Rosen Managing Director Charlesbank Capital Partners LLC
		Herbert S. "Pug" Winokur Jr. Chairman and Chief Executive Officer Capricorn Holdings, Inc.
Executive Officers		Githesh Ramamurthy Chairman and Chief Executive Officer
		J. Laurence Costin Jr. Vice Chairman
		Edward B. Stevens President and Chief Operating Officer
		James T. Beattie Executive Vice President and Chief Technology Officer
		Robert S. Guttman Senior Vice President, General Counsel and Secretary
		Mary Jo Prigge President—Sales and Service
		Oliver G. Prince, Jr. Senior Vice President, Human Resources
		Reid E. Simpson Executive Vice President and Chief Financial Officer

CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES

Corporate Information

Corporate Office
World Trade Center Chicago
444 Merchandise Mart
Chicago, Illinois 60654
(312) 222-4636

Transfer Agent Registrar for Common Stock
Computershare Investor Services LLC
Shareholder Inquiries
P.O. Box A3504
Chicago, Illinois 60602
(312) 588-4990
(312) 461-5633 (TDD)

Stockholder Services
You should contact the Transfer Agent for the stockholder services listed below:
Change of Mailing Address
Consolidation of Multiple Accounts
Elimination of Duplicate Report Mailings
Lost or Stolen Certificates
Transfer Requirements
Duplicate 1099 Forms
Please be prepared to provide your tax identification or social security number,
description of securities and address of record.

Stock Listing and Trading Symbol
Our common stock is listed on the Nasdaq National Market System under the trading symbol CCCG.

Independent Accountants
PricewaterhouseCoopers LLP
One North Wacker Drive
Chicago, Illinois 60606

Stockholder and Investment
Community Inquiries
Written inquiries should be sent to our corporate office to the attention of Investor Relations.

Additional Information

This Annual Report on Form 10-K provides all annual information filed with the Securities and Exchange Commission, except for exhibits. A listing of exhibits appears on pages 74-76 of this Form 10-K. Copies of exhibits will be provided upon request for a nominal charge. Written requests should be directed to the Investor Relations Department at our corporate office.

QuickLinks

CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS
PART I

Item 1. Business

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Submission of Matters to A Vote of Security Holders

PART II

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

Item 6. Selected Financial Data

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

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

Item 8. Financial Statements and Supplementary Data

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

PART III

Item 10. Directors and Executive Officers of The Registrant

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions

PART IV

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

CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (In Thousands, Except Per Share Amounts)
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In Thousands, Except Share Amounts)
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In Thousands)
CCC INFORMATION SERVICES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (In Thousands, Except Number of Shares)
CCC INFORMATION SERVICES GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CCC INFORMATION SERVICES GROUPING INC. AND SUBSIDIARIES
Supplemental Financial Statement Schedules Schedule II—Valuation and Qualifying Accounts (In Thousands)
EXHIBIT INDEX
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
SIGNATURES
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES Corporate Information
EX-10.16 3 a2073198zex-10_16.txt (800) 688 - 1933 AMENDED AND RESTATED MOTOR CRASH ESTIMATING GUIDES DATABASE LICENSE AGREEMENT This Amended and Restated Motor Crash Estimating Guides Database License Agreement, entered into as of January 1, 2002 (the "Agreement"), amends and restates, in its entirety, the Agreement dated as of the 1st day of April, 1998, between Motor Information Systems, a unit of Hearst Business Publishing, Inc., a Delaware corporation, with offices at 5600 Crooks Road, Suite 200, Troy, Michigan 48098 (hereinafter "LICENSOR"), and CCC Information Services Inc. ("CCCIS"), a Delaware corporation, with offices at World Trade Center Chicago, 444 Merchandise Mart, Chicago, IL 60654-1005 and CCC Information Services Group Inc., formerly Info Vest Corporation, formerly known as Financial Protection Services, Inc. ("CCCISG"), a Delaware corporation with offices at World Trade Center Chicago, 444 Merchandise Mart, Chicago, IL 60654-1005 (CCCIS and CCCISG hereinafter jointly and severally "LICENSEE"). WHEREAS, Licensor, as the successor to Motor Publications and Motor Books, has title to, and ownership of printed Motor Crash Estimating Guides for the United States market (the "Periodicals") and electronic database versions which contain the data and illustrations set forth in the Periodicals, together with additional United States market data fields, layouts and illustrations described in Schedule A, attached hereto, as amended from time to time (the "Database"), exclusive of any datum which is not the subject of a copyright or other ownership right in favor of Licensor as more specifically set forth in Schedule A, and WHEREAS, Licensor and Licensee now desire to amend and restate the Database License Agreement made as of the 1st day of April, 1998 in order to grant Licensee an exclusive License to use the Database within the United States, Canada, Puerto Rico and the geographical area generally known as the Caribbean (collectively the "Territory") and a non-exclusive license to use the Database within Mexico, Central America and South America (collectively the "New Territory"), and to sublicense the Database to certain duly licensed value added marketers ("VARS") located in the Territory or New Territory and through such VARS, or directly, to duly licensed automotive industry and/or insurance industry (which includes independent appraisers) businesses (such users of the Database are referred to as the "End-Users") located in the Territory or New Territory to enable them to access the Database information on a computer or work station with Licensee's collision estimating software programs or any derivative works, or other application software programs (collectively the "Software") used to electronically estimate collision costs as part of Licensee's EZEST and Pathways (or successor names) systems and derivative works comprised of the Software and the Database (the "Systems"). NOW, THEREFORE, in consideration of the foregoing premises and the terms and conditions hereinafter set forth, the parties hereby agree as follows: 1. (a) Licensor hereby grants Licensee an exclusive license, subject to the rights of Licensor's VARS existing as of April 1, 1998, in accordance with Section 11, to use the Database described in Schedule A, within the Territory, provided that the license within Canada will become non-exclusive if, within eighteen months from the execution of this Agreement, Licensee does not commence the sale in Canada of a collision estimating system using Licensor's database. Licensor also grants Licensee a non-exclusive license to use the Database described in Schedule A within the New Territory in accordance with the terms of this Agreement. Licensor agrees to provide Licensee with the Database and to perform the services in accordance with Schedule A. Licensor will continue to provide Canadian market coverage comparable to that presently provided without additional charge during the eighteen month period of exclusivity. If Licensee thereafter wishes to maintain exclusivity to use the Database in Canada and receive Canadian data, Licensee agrees to pay Licensor the greater of the End-User Licensee Fees in accordance with Schedule B for Canadian End-Users, or a minimum of One Hundred Thousand Dollars ($100,000) per annum, with the minimum commencing with the second anniversary date of execution of this Agreement, payable on the third anniversary date of execution of this Agreement, with an annual escalation of such minimum by a percentage equal to the percentage increase in the most recent Consumer Price Index, All Urban Consumers ("CPI-U"), U.S. City Average, All Items, 1982-84=100, U.S. Department of Labor, publicly available each January as compared with such Index publicly available in the previous January, commencing with the third anniversary date of execution of this Agreement and each anniversary date thereafter. (b) Unless a Licensee subsidiary or affiliate is a party to this Agreement and has executed a counterpart hereof, it shall not be entitled to use the Database and none of the rights and benefits of Licensee shall extend to such subsidiary or affiliate. An "affiliate" shall be any entity directly or indirectly in control of, controlled by, or under common control with a Licensee party. The term "control" (including the terms "controlling", "in control of", "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. 2. Licensee acknowledges that the Database is confidential, proprietary material owned and copyrighted by Licensor. Licensee agrees that the Licensor shall retain exclusive ownership of the Database, new editions, updates, new releases and all modifications and enhancements, versions, and derivative works thereof, all of which will be deemed included in the term "Database", and such ownership rights of Licensor shall include all literary property rights, copyrights, trademarks, trade secrets, trade names or service marks, including goodwill relating thereto. Licensor will treat as confidential and shall not use, except in the performance of its obligations to Licensee hereunder, any proprietary methodology, processes or other proprietary information belonging to or contributed by Licensee. CCC's proprietary information as it exists as of the date of execution of this Agreement consists of the data structure specifications of the thirteen (13) files identified in Schedule A-2, but excluding any data in such files. In the future, Licensee will identify by written notice to Licensor any additional information it believes is proprietary to Licensee. 3. The Database is intended for use solely by Licensee for (i) marketing, demonstration, sub-licensing and distribution of authorized copies on any media now in existence or hereafter developed to duly licensed End-Users for use with the Software as part of the Systems to electronically estimate collision costs and (ii) performing on behalf of End-Users collision estimating services utilizing the Database with the Software as part of the Systems, in which event Licensee shall be subject to the obligations of an End-User. In the event that the Software and the Systems permit an End-User to manually or automatically override the Database, Licensee's Software and the Systems will mark all estimates and invoices with an asterisk to denote any elements of the estimate or invoice which are not exactly as in the Database information provided by Licensor. Except as expressly permitted in this Agreement, Licensee agrees not to copy, modify, sublicense, assign, transfer or resell the Database, in whole or in part. Licensee further agrees not to establish or act as a service bureau for insurance companies or others whereby Licensee utilizes the Database to directly or indirectly prepare estimates, supplements to estimates and/or invoices for and on behalf of insurance companies or others unless Licensee itself has executed an End-User Agreement. Licensee agrees to use its best efforts to restrict access to the Database to duly licensed End-Users and designated employees and to use its best efforts to prevent violation of these restrictions by agents, employees, and others, taking such steps and security precautions as may reasonably be necessary to ensure compliance herewith. In the event that Licensee discovers any breach by an End-User of any of the restrictions on use of the Database, Licensee shall take immediate steps to remedy such breach and if such breach cannot be remedied to terminate such End-User's license. Licensee agrees to encrypt, compile or otherwise secure each End-User file to prevent the use of the file after a given date as appropriate under the terms of the End-User license. Licensee further agrees to use reasonable efforts to monitor compliance by End-Users and VARS with the restrictions on the use of the Database and cooperate with Licensor and take necessary and appropriate legal action in asserting any and all claims against an End-User or VAR for the unauthorized use of the Database, it being understood that Licensor will pay the costs of such legal action except if the End-User or VAR has also infringed the Software, in which event the costs associated with the protection of the Software shall be borne by Licensee and if no allocation is made, the parties' costs will be shared. 4. Licensee agrees to submit to the Licensor, for approval in advance, all advertising copy and promotional material regarding the Database, and to identify the Licensor as the copyright owner and trademark registrant in such copy and material and the computer screen where appropriate to give notice to End-Users, and to label all copies of advertising, promotional material and Database distributed to End-Users and VARS, and on printed estimates from the Systems accordingly. Any objection of the Licensor to the Licensee's advertising or promotional material must be reasonable and must be made in writing within ten (10) days from the date that such material is submitted by the Licensee to the Licensor for review. If such approval is not received within such ten (10) day period, Licensor shall be deemed to have approved any such advertising or promotional material. Licensee shall be accorded the same right of pre-approval of Licensor's advertising or promotional material regarding the Software as Licensor has with respect to Licensee's advertising regarding the Database. 5. Licensee shall require that all End-Users sign agreements substantially in the form of the Software and Database License Agreements (body shop/insurance industry - with or without equipment) (each the "End-User Agreement") or, if appropriate, a Licensor approved form of Database trial agreement ("Evaluation Agreement"), attached hereto as Exhibits I (a-e), prior to End-Users receiving copies of the Database or Licensee performing Section 3 (ii) services for End-Users. Licensee shall be free to establish End-User Agreement fees, however, Licensee shall obtain the prior written consent of the Licensor to any other proposed change in terms and conditions of End-User Agreements pertaining to the Database, which is inconsistent with this Agreement or affects Licensor's proprietary rights, restrictions on use of the Database or Licensor's interests therein, and any alternative form of End-User Agreement or Evaluation Agreement to be offered to End-Users containing other provisions regarding the Database, which is inconsistent with this Agreement or affects Licensor's proprietary rights, restrictions on use of the Database or Licensor's interests therein, shall be approved in advance by Licensor, which shall not be unreasonably withheld or delayed. Within ninety (90) days following the end of the month during which End-User Agreements including the VAR End-User Agreements, and each End-User for whom Licensee performs collision estimating services, and VAR Agreements are executed and/or renewed, Licensee shall provide Licensor with a written report listing the name and address and expiration date for each such Agreement. Licensee shall be responsible for reproducing and/or distributing to duly licensed End-Users copies of the Database in machine readable form and for replacing defective or damaged copies. Licensee shall maintain records of all transactions involving use of the Database with Licensee End-Users, including End-Users for whom Licensee performs services, VARS, and VAR End-Users, and shall provide Licensor with access to such records for review, and to verify Licensee's, End-Users' and VARS' compliance with this Agreement once each quarter during normal business hours upon ten (10) days prior written notice. Licensee will not be obligated to reimburse Licensor's reasonable costs in conducting any such audit unless Licensor discovers that any fees payable hereunder were underpaid by five percent (5%) or more with respect to the period which is the subject of such audit. All information produced by Licensee for such audit shall be held in strict confidence by Licensor and shall be used for no other purpose. Licensor's outside auditors shall be required to sign the form of confidentiality agreement attached hereto as Exhibit A. Licensor shall be liable for any breach of this confidentiality obligation by its employees, agents or representatives. 6. In consideration for this Agreement and the grant of the license to use the Database and for the services to be performed by Licensor, Licensee agrees to pay Licensor, during the term of this Agreement, the applicable license fees, and other applicable fees and charges provided for in and payable in the manner and on the dates set forth in Schedule B attached hereto. Licensee also agrees to pay any and all applicable taxes which may now or hereafter be assessed upon the rental, license, possession and/or use of the Database by Licensee, excluding taxes based on Licensor's income. 7. In addition to the right to grant sublicenses to End-Users directly, Licensor grants Licensee a limited right to sublicense the Database to VARS that desire to sublicense the Database and the Software as a System to End-Users, provided the VARS and their End-Users are bound by the terms and conditions and restrictions on use set forth in this Agreement. Accordingly Licensee shall require that all such VARS sign an agreement substantially in form of the Distribution Agreement, attached as Exhibit II, (the "VAR Agreement") and Licensee shall further require that such VARS enter into End-User agreements in substantially the same form as the End-User Agreement or, if appropriate, a Licensor approved form of Evaluation Agreement prior to VARS' End-Users receiving copies of the Database, provided that any change to such forms of agreement, which is inconsistent with this Agreement or affects Licensor's proprietary rights, restriction on use of the Database or Licensor's interest therein shall be approved in advance by Licensor, which approval shall not be unreasonably withheld or delayed. All references throughout this Agreement to End-Users shall include VARS' End-Users and all references to obligations and covenants of Licensee with respect to the Database shall be equally applicable to VARS. 8. The term of this Agreement shall commence as of January 1, 2002 and will expire on June 30, 2021 (the period from July 1, 2018 through June 30, 2021, is hereinafter referred to as the "Extension Period"). The term of this Agreement and license shall be automatically renewed thereafter for two (2) successive renewal periods of five (5) years (sixty months) each, unless either party gives written notice to the other party of its termination of the Agreement at least two (2) years (twenty-four months) prior to the expiration of the initial term or renewal period, as the case may be. Within thirty (30) days following termination of this License Agreement, Licensee shall return, postage prepaid, or shall destroy, all copies of the tapes or other media containing the Database, in whole or in part, and shall expunge the Database and all machine-readable material, data or information relating thereto from its data storage facilities, personal computers, central processing units, disks and other media. Licensee shall not retain any Database machine-readable material, data or information and shall cease all use of the Database. Continued use of the Database or any information contained therein or supplied under this Agreement after termination or expiration of this Agreement is expressly prohibited. Notwithstanding the stated term of this Agreement, this Agreement and license may be terminated (a) by Licensee without cause at any time, upon thirty (30) days written notice to Licensor, provided Licensee pays Licensor the liquidated damages required in accordance with Rider A to Schedule B, attached hereto, (b) by Licensor upon the failure of the Licensee to make payment of license fees, royalties and other charges due hereunder, in accordance with Schedule B, or (c) by either party (i) upon the failure of the other party to comply with the material terms and conditions of this Agreement, or to perform any of its material obligations hereunder for a period of thirty (30) days after notice thereof (sixty (60) days as to Licensor's failure to cure a performance requirement under Schedule A as provided for in Section 10), in which event the provisions of Section 10 or Rider A to Schedule B, as applicable, shall apply, unless such failure or nonperformance is capable of being cured within a reasonable period and commencement of the cure has commenced prior to the expiration of such period, (ii) upon the bankruptcy or insolvency of the other party, however evidenced, resulting in an inability or failure to perform hereunder or inability or failure to perform any other material obligation or agreement, which failure shall continue for a period of sixty (60) days, or (iii) two (2) years (twenty-four months) following notice to the other party of its intention to discontinue or abandon, as distinguished from a sale of, publication of the Database (but not as to discontinuing publication of the Periodicals), as to Licensor, or marketing and distributing the Software or other similar collision estimating software system and performing collision estimating services, as to Licensee. In the event of such "abandonment" or "discontinuance" by either Licensor or Licensee, the parties shall negotiate in good faith to reach mutually agreeable terms for the abandoning or discontinuing party to sell, transfer and assign to the other party the business and assets being abandoned or discontinued in order for the other party to continue its business and carry out the purposes of this Agreement. In the event that Licensee gives notice of termination under subparagraph (c) of this paragraph 8, and it is later determined that Licensee did not have grounds for termination under that subparagraph, the termination will be treated as a termination by Licensee without cause under subparagraph (a) of this paragraph 8 and the payment due Licensor pursuant to paragraph 8(a) shall be calculated as of the date of Licensee's notice of termination and shall bear interest from the date of such notice until the date of payment at a rate of 7% per annum. The prevailing party in any action under this Section shall be entitled to costs and counsel fees incurred in connection therewith. The above rights of termination are in addition to such other rights as the parties may have hereunder or as otherwise provided by law. All End-User Agreements and VAR Agreements and their agreements with End-Users, and collision estimating service agreements between Licensee and End-Users shall terminate on or before termination of this Agreement. 9. (a) Licensor warrants its ownership rights in and to the Database and agrees to defend, indemnify and hold Licensee harmless from, or settle at its option any action against Licensee, or End-Users arising from a claim that Licensee's, or an End-User's use of the Database under this Agreement or the End-User Agreement infringes any copyright, patent, trademark or other rights of any third party, except with respect to Database elements for which Licensor has no copyright or ownership right and acquired no rights as specified in Schedule A. Licensor further warrants that it will affirmatively take all steps reasonable and necessary to protect the Database in order to preserve its ownership rights and copyrights in and to the Database. LICENSOR MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE ACCURACY OF THE DATABASE, THE MERCHANTABILITY AND FITNESS OF THE DATABASE FOR A PARTICULAR PURPOSE, NOR THE COMPATIBILITY OF THE DATABASE WITH LICENSEE'S, VARS' OR END-USERS' COMPUTER HARDWARE AND/OR SOFTWARE SYSTEMS. (b) (i) Licensee agree to defend, indemnify and hold Licensor harmless from, or settle at its option, any action against Licensor arising from a claim that the Software and Systems infringes any copyright, patent, trademark or other right of any third party, except that this indemnity obligation does not arise for any such claim based solely on, Licensee's, or End-User's use of the Database. (ii) Licensee agrees to defend, indemnify and hold harmless, or settle at its option, Licensor, its parent, subsidiaries, affiliates, successors, assigns, directors, officers, employees, agents, and representatives ("Indemnitees") against expenses (including attorney's fees), judgments, fines, and amounts paid in settlement, actually and reasonably incurred by Indemnitees in connection with any threatened or actual action, suit, or proceeding whether civil, criminal, administrative or investigate arising out of or based on Licensor issuing the Notice of non-renewal to its VARS and the assignment of the VAR Database License Agreements to Licensee in accordance with Section II (b), or any subsequent conduct by Licensee with respect to its dealings with the VARS. Licensor agrees to defend, indemnify and hold harmless, or settle at its option, Licensee and its Indemnities in the same manner and to the same extent as Licensee agrees to indemnify Licensor with respect to any subsequent conduct by Licensor with respect to its dealings with the VARS. 10. Neither party shall be liable to the other party for any indirect, special or consequential damages of any kind, including, without limitation, damages for loss of goodwill, work stoppage, computer failure or malfunction resulting from or caused by a breach of this Agreement. Damages in such event shall be limited to the actual and direct damages attributable to the breach, except that the foregoing limitations on damages available to the parties shall apply respectively only to such defaults, breaches and other violations of this Agreement referenced in and that give rise to a claim by Licensor pursuant to Rider A to Schedule B or a claim by Licensee pursuant to this Section 10(i) or (ii) for liquidated damages and such claim has been satisfied in accordance with Rider A or this Section 10(i) or (ii), respectively. With respect to Licensee, (i) in the event Licensor materially fails to meet the performance requirements set forth in Schedule A, except with respect to Mechanical Labor Overlap and Relational Database Support, and fails to cure such failure within sixty (60) days following written notice from Licensee setting forth in detail such failure, Licensee shall be entitled, in lieu of any other remedy other than specific performance, to receive as liquidated damages for such failure Ten Thousand Dollars ($10,000) for each business day such failure continues in effect, or (ii) in the event Licensor willfully fails and refuses to perform a substantial and material portion of any performance requirements set forth in Schedule A, except with respect to Mechanical Labor Overlap and Relational Database Support, and fails to cure such failure and refusal within sixty (60) days following written notice from Licensee setting forth in detail such failure and refusal, Licensee shall be entitled, in lieu of any other remedy, other than specific performance, to receive as liquidated damages for such failure and refusal Twenty Thousand Dollars ($20,000) for each business day such failure and refusal continues in effect. In the event of Licensor's material failure to meet the performance requirements set forth in Schedule A with respect to the Mechanical Labor Overlap and Relational Database Support, and failure to cure such failure within sixty (60) days following written notice from Licensee setting forth in detail such failure, Licensee shall be entitled, as its sole remedy in lieu of any other remedy including termination of this Agreement pursuant to Section 8(c)(i), other than specific performance, to an abatement of the pro rata portion of the Step-up Fees for such period of time until Licensor cures such failure. Promptly following execution of this Agreement, the parties shall select a mutually acceptable escrow agent and negotiate and enter into an escrow agreement on terms mutually agreed upon, pursuant to which Licensor shall deposit with the escrow agent, on a monthly basis, the Database management tools Licensor uses to maintain the Database (the "Tools"). In the event Licensor has failed to substantially cure such Section 10 (ii) failure and refusal within the sixty (60) day cure period, the escrow agent in accordance with the terms of the escrow agreement will release and provide the Tools to Licensee. Licensee acknowledges and agrees that such Tools are highly confidential and proprietary information and material owned by Licensor and that they shall be held in strictest confidence by Licensee and not be copied or disclosed to or used by any person other than Licensee and, on a need to know basis, its employees and independent contractors engaged by Licensee to perform services on the premises of Licensee, provided such independent contractors execute a form of confidentiality agreement acceptable to Licensor, it being agreed that Licensee shall be liable for the independent contractor's wrongful acts and breaches of this Agreement and the confidentiality agreement. Licensee and its employees and independent contractors shall be permitted to use the Tools internally solely to maintain the Database and not for any other purpose. All modifications and enhancements to the Tools made by Licensee or its independent contractors shall be the property of Licensor and shall be deemed included in the defined term Tools and Licensee shall promptly deliver copies of such enhancements and modifications to Licensor and the escrow agent. No license or other rights to the Tools are or will be granted to Licensee in such event; Licensee shall be deemed a bailee holding the Tools in trust for the benefit of Licensor. Licensor shall provide Licensee and the escrow agent with written notice (the "Notice") when Licensor has substantially cured the failure and refusal cited in Licensee's written notice under this Section 10(ii). The Tools (including any and all copies) shall be redelivered by Licensee to the escrow agent within sixty (60) days following Licensee's receipt of Licensor's Notice and Licensee shall also immediately purge all Tools from all storage devices and media and cease all use of the Tools, unless the Licensee has submitted the issue of the adequacy of Licensor's cure to arbitration hereunder. Upon issuing such Notice, Licensor shall resume performance under the terms of this Agreement, subject to a reasonably delay which may result due to alteration of the Tools by Licensee or its independent contractors if use of such altered Tools is required by Licensee. The liquidated damages payable by Licensor to Licensee under this Section 10(ii) shall continue to be payable until the date of Licensor's Notice. Licensee shall continue to pay Licensor the license fees payable in accordance with Schedule B during the period Licensee is in possession of the Tools and thereafter following the return of the Tools to the escrow agent. In the event of any dispute between Licensor and Licensee regarding this Section 10(ii) or the escrow agreement, the parties agree to promptly submit the matter to binding arbitration. Such arbitration shall be conducted under the commercial rules of the American Arbitration Association by a single arbitrator appointed by the American Arbitration Association. Insofar as possible, such arbitrator shall be, at the time of his selection, a retired judge or a partner of a national or regional law firm not regularly employed by Licensor or any Licensee, and such arbitrator shall be required to have substantial experience in the field of computer software technology and licensing. The decision of the arbitrator shall be final, non-appealable and binding on Licensor, Licensee, and the escrow agent and may be entered and enforced in any court of competent jurisdiction by any such party. The prevailing party in the arbitration proceedings shall be awarded reasonable attorney's fees, expert witness costs and expenses, and all other costs and expenses incurred directly or indirectly in connection with the proceedings (including those of the escrow agent), unless the arbitrator for good cause determines otherwise. Nothing in this Section 10 shall be construed as limiting the indemnity obligations of the parties set forth in Section 9. 11. (a) With respect to the Territory, in consideration for the Licensee's covenant of exclusivity and non-compete agreement, Licensor agrees that during the term of this Agreement, except as to the current Database License Agreements with VARS it will not (i) enter into new Database license agreements with any other entity, including but not limited to other VARS in the Territory for collision estimating purposes as distinguished from mechanical estimating purposes utilizing the Motor Parts and Time Guide, or (ii) develop or acquire (other than the acquisition of Comp-Est, Inc., pursuant to the Option and Acquisition Agreement dated as of February 6, 1998, provided, however, that Comp-Est, Inc. shall not be granted the right to use the Automated Guide to Estimating or the right to distribute the Database to insurance industry End-Users) its own estimating software product to compete with the Software within the Territory. During the term of this Agreement, in the Territory, Licensee agrees that the Software and Systems and all derivative works and systems using the Software will be distributed to End-Users and used by Licensee solely and exclusively with the Database, the Software and Systems will not be used or licensed for use with any other crash/collision estimating database, and no other crash/collision estimating database will be used, licensed or distributed for use with the Software and Systems by Licensee, directly or indirectly, to any other entity, including but not limited to VARS or End-Users, except as expressly permitted in this Agreement. This covenant to market and distribute the Database exclusively with the Software is unconditional. Licensee agrees that the Software will not be licensed, sold, transferred or assigned to or used by any subsidiary or affiliate of Licensee which is not a Licensee signatory to this Agreement. As an additional inducement for the Licensor to enter into this Agreement, the Licensee represents and agrees that now and during the term of this Agreement, neither it nor its subsidiaries, shall, directly or indirectly, for itself, or as agent of, or on behalf of, or in conjunction with, any person, firm or corporation, or as partner of any partnership or joint venture, or, as shareholder of any corporation, own (except for investment purposes only and not with intent to control), manage, acquire, operate, control or participate in any manner in the development, ownership, license, marketing, distribution, operation or control of, or be associated with, or otherwise connected in any manner with, any database(s) which compete with the Database, except that the Network established for the purpose of transferring estimates or invoices electronically directly or indirectly between or among appraisers, mechanical repair shops, body shops and/or insurance companies may permit the transmission of estimates and invoices. However, the Licensee shall not permit use of the Network to carry a database that competes with the Database or software that competes with the Software for the purpose of enabling users of the Network to prepare estimates, supplements to estimates, or invoices. Notwithstanding any of the foregoing, Licensee may commence efforts to convert to a competitive database, whether developed by Licensee or third parties, following notice of termination of this Agreement, provided that the Software and Systems are not distributed with the competitive database until after the effective date of termination of this Agreement. This provision, however, does not prevent Licensee from distributing beta or test versions of the competitive database prior to the effective date of termination. (b) Attached hereto as Exhibit B is a form of Notice which Licensor agree to deliver to its current VARS in the Territory listed in Appendix A to such Exhibit, which the parties expressly agree shall exclude Comp-Est, Inc. Licensee hereby agrees to accept the assignment of each Database License Agreement with each such VAR and to thereupon perform all of Licensor's obligations thereunder; it being agreed that Licensee and Licensor will negotiate in good faith and enter into a fulfillment agreement, pursuant to which Licensor will perform the obligations for and on behalf of Licensee on terms mutually agreed upon by the parties. Licensee further undertakes and agrees to be bound by the indemnity obligation to Licensor set forth in Section 9(b) of this Agreement. The exclusivity grant to Licensee in the Territory, set forth in Section 1 in this Agreement, is subject to and conditioned upon the effective date of Licensor's Notice to such VARS and Licensee's performance of the obligation to assume and perform (i) the Database License Agreements with such VARS and (ii) the indemnity obligation set forth in Section 9(b). 12. (a) Licensor and Licensee agree that the remedy at law for any breach by either of them of this Agreement, including the provisions on exclusivity and non-compete, may be inadequate and that in the event of any alleged breach or threatened breach, Licensor or Licensee, as the case may be, shall, in addition to all other remedies available to it, be entitled to seek injunctive relief therefor and specific performance. (b) Neither party shall be liable for failure or delay in performance of its obligations hereunder when such failure or delay is caused by events beyond the reasonable control of such party, including but not limited to acts of God, casualty, labor disputes, failure of equipment despite proper use and regular maintenance, or compliance with governmental authority. Such party shall (i) use reasonable best efforts to notify the other party in advance, if possible, of conditions which may result in such delay in or failure to perform; (ii) use its reasonable best efforts to avoid or remove such conditions and (iii) immediately resume performance when such conditions are removed. Notwithstanding the foregoing, if such Licensor failure or delay in performance continues for a period of sixty (60) days, the escrow provisions (but not the liquidated damages provisions) of Section 10(ii) shall be applicable. 13. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties. Neither party may assign this Agreement or the performance of its obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld. In the event of a sale of the stock or substantially all of the assets of either party which results in a change in control, the other party shall be entitled to sixty (60) days prior written notice. In the case of such a sale of stock or assets of Licensor by Licensor or its parent, Licensee shall be entitled to require Licensor or its parent to assign and transfer this Agreement to the successor, by giving the Licensor written notice within thirty (30) days after the date of Licensor's notice. This Database License Agreement shall not be transferred or assigned by operation of law or otherwise to any Licensee entity or affiliate of Licensee or any other party unless all rights, title and interest in and to the Software is owned and operated by the same legal entity as this Agreement is to be transferred or assigned to. In the case of such a proposed sale of stock or assets of Licensee by Licensee or its parent, Licensor shall be entitled to require Licensee or its parent to assign and transfer this Agreement to the successor. Licensor and Licensee further agree that notwithstanding anything to the contrary in this Agreement, in the event of a hostile takeover or acquisition by any means, directly or indirectly, by ADP or Mitchell, or by any of their respective subsidiaries or affiliates, or any of their respective successors, of either Licensor or Licensee or the controlling interest in Licensor or Licensee, or in the event of a hostile takeover or acquisition by any means, directly or indirectly, of ADP or Mitchell or any of their respective successors, or the acquisition by any means of a controlling interest in any such entity, by either Licensor or Licensee, the other party hereto, Licensor or Licensee as the case may be, shall be entitled to require that the surviving entity, and all of its or their subsidiaries and affiliates, or their respective successors, accept an assignment of this Agreement, agreeing to be bound by all of the terms and conditions of this Agreement. In such event, (a) if Licensor is the acquired or acquiring party, this Agreement shall automatically be deemed amended to provide that the Term of this Agreement shall be for a period of three (3) years from the effective date of such acquisition and thereafter shall be automatically renewed from year to year unless terminated at the sole option of Licensee, exercisable upon sixty (60) days notice to Licensor and the acquiring company prior to the commencement of the renewal period, or (b) if Licensee is the acquired or acquiring party, this Agreement and Schedule B shall automatically be deemed amended to provide that (i) the restrictions on Licensee concerning another database in Section 11(a) shall be suspended for a period of five (5) years from the effective date of the acquisition and (ii) the annual license fee payable to Licensor for each year for the balance of the Term of the Agreement by Licensee and the acquiring company, or Licensee and the acquired company as the case may be shall be the greater of (x) the average annual license fees actually paid to Licensor in the two years preceding the acquisition (including any license fees paid thereafter applicable to such two (2) years preceding as a result of the dispute resolution provisions of paragraph 11 of Schedule B), or (y) the fees due under this Agreement and Schedule B, plus, in either case, the Step-up Fees payable in accordance with Paragraph 14 of Schedule B. At the conclusion of such five (5) year period, the restrictions on Licensee concerning another database in Section 11(a) shall be reinstated, in full force and effect, and binding on Licensee and the acquired or acquiring company as the case may be unless Licensee has terminated this Agreement pursuant to Section 8(a) effective on or before the conclusion of such five (5) year period. In the event Licensee is acquired or is the acquiring party after commencement of the Extension Period, the license fees payable each year for the balance of the term of this Agreement will be the greater of the average annual license fee actually paid to Licensor in the two (2) years preceding such acquisition of or by Licensee or $8,000,000, plus the Step-up Fees, subject to the provisions of Rider A to Schedule B. 14. The Schedules, Riders, Appendixes, and Exhibits to this Agreement are incorporated herein and constitute an integral part of this Agreement. The respective rights and obligations of the parties under the Agreement which arose prior to the date of execution of this Amended and Restated Agreement shall remain in effect and be governed by the terms and conditions of the Agreement in effect prior to the date of execution of this Amended and Restated Agreement, it being acknowledged and agreed by the parties that the changes to the Agreement made in this Amended and Restated Agreement shall be effective following execution of this Amended and Restated Agreement. This Agreement, together with the Comp-Est Purchase Agreement, is the complete and exclusive statement of the understanding between the parties, with respect to the subject matter, superseding all prior agreements, representations, statements and proposals, oral or written. 15. All amendments to this Agreement shall be in writing, signed by both parties. Notice hereunder shall be delivered to the following addresses by hand, or by certified mail, return receipt requested: Licensor: Motor Information Systems Division Hearst Business Publishing 5600 Crooks Road Suite 200 Troy, Michigan 48098 Attention: Mr. Kevin F. Carr President With a copy to: General Counsel The Hearst Corporation 959 Eighth Avenue New York, New York 10019 Licensee: CCC Information Services Inc. or CCC Information Services Group, Inc. World Trade Center Chicago 444 Merchandise Mart Chicago, IL 60654-1005 Attention: CEO with a copy to the same address, attention: General Counsel. 16. No term or provision hereof shall be deemed waived and no breach excused, unless such waiver or consent shall be in writing and signed by the party claimed to have waived or consented. Any consent by any party to, or waiver of, a breach by the other, whether express or implied, shall not constitute a consent to, waiver of, or excuse for any other different or subsequent breach. 17. The following provisions shall survive termination of this Agreement: Section 2; the 3rd, 5th, 6th and 8th sentences of Section 3; the 5th through the last sentence of Section 5, except that as to the 5th sentence, Licensee's obligation to maintain records shall survive only for 6 years and Licensee's obligation to provide Licensor access for review and verification shall survive only for 2 years; Section 6 as to the term of any End-User Agreement that extends beyond the term of this Agreement, notwithstanding Schedule B Item 10(b); the 3rd through the 5th sentence, the 6th sentence through c(i) and the last sentence of Section 8; the 1st sentence of Section 9(a) and Section 9(b); Section 10; Section 12(a); the 1st sentence of Section 13; Section 14, and to the extent necessary to interpret and enforce the surviving provisions of this Agreement referred to in this Section 17, the Schedules, Riders, Appendices and Exhibits to this Agreement; Section 15; Section 16; Section 17; Section 18; Section 20; and Section 21. 18. This Agreement shall be governed by the internal laws of the State of New York, without regard to conflicts of law principles thereof. 19. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 20. If any provision of this Agreement or any Schedule, Rider, Appendix or Exhibit is for any reason held invalid, illegal, void or unenforceable, all other provisions of this Agreement any such Schedule, Rider, Appendix or Exhibit will remain in full force and effect and the invalid, illegal, void or unenforceable provision shall be replaced by a mutually acceptable, valid, legal and enforceable provision that is closest to the original intention to the parties. 21. The parties agree that each party shall undertake performing its obligations pursuant to this Agreement as an independent contractor. Nothing contained herein or done pursuant to this Agreement shall make any party or its agents or employees the legal representative, agent or employee of the other party for any purpose whatsoever. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. Motor Information Services Division Hearst Business Publishing, Inc. By: /s/ Kevin F. Carr -------------------------------------------- Kevin F. Carr CCC Information Services Group, Inc. By: /s/ Reid E. Simpson -------------------------------------------- CCC Information Services Inc. By: /s/ Reid E. Simpson -------------------------------------------- EX-10.21 4 a2073198zex-10_21.txt (800) 688 - 1933 CCC INFORMATION SERVICES INC. 401(k) RETIREMENT SAVINGS & INVESTMENT PLAN As Amended and Restated Effective January 1, 2001 TABLE OF CONTENTS

i 7.7. Computation of Period of Service...............................................27 7.8. Treatment of Forfeitures.......................................................28 ARTICLE VIII. Distributions.............................................................................30 8.1. Commencement and Form of Distributions.........................................30 8.2. Distributions to Beneficiaries.................................................32 8.3. Beneficiaries..................................................................33 8.4. Installment or Deferred Distributions..........................................34 8.5. Form of Elections and Applications for Benefits................................34 8.6. Unclaimed Distributions........................................................34 8.7. In-Service Withdrawals.........................................................35 8.8. Loans..........................................................................37 8.9. Facility of Payment............................................................38 8.10. Claims Procedure...............................................................39 8.11. Eligible Rollover Distributions................................................40 ARTICLE IX. Top-Heavy Plan Requirements...............................................................42 9.1. Definitions....................................................................42 9.2. Top-Heavy Plan Requirements....................................................45 ARTICLE X. Powers and Duties of Plan Committee.......................................................47 10.1. Appointment of Plan Committee..................................................47 10.2. Powers and Duties of Committee.................................................47 10.3. Committee Procedures...........................................................48 10.4. Consultation with Advisors.....................................................49 10.5. Committee Members as Participants..............................................49 10.6. Records and Reports............................................................49 10.7. Investment Policy..............................................................49 10.8. Designation of Other Fiduciaries...............................................50 10.9. Obligations of Committee.......................................................50 10.10. Indemnification of the Committee...............................................51 ARTICLE XI. Trustee and Trust Fund....................................................................52 11.1. Trust Fund.....................................................................52 11.2. Payments to Trust Fund and Expenses............................................52 11.3. Trustee's Responsibilities.....................................................52 11.4. Reversion to an Employer.......................................................52 11.5. Allocation of Assets...........................................................52 ARTICLE XII. Amendment or Termination..................................................................53 12.1. Amendment......................................................................53 12.2. Termination....................................................................53 12.3. Form of Amendment, Discontinuance of Employer Contributions, and Termination...53 12.4. Limitations on Amendments......................................................53 12.5. Level of Benefits Upon Merger..................................................54

ii 12.6. Vesting Upon Termination or Discontinuance of Employer Contributions; Liquidation of Trust...........................................................54 ARTICLE XIII. Miscellaneous.............................................................................56 13.1. No Guarantee of Employment, Etc................................................56 13.2. Nonalienation..................................................................56 13.3. Qualified Domestic Relations Order.............................................56 13.4. Controlling Law................................................................57 13.5. Severability...................................................................57 13.6. Notification of Addresses......................................................57 13.7. Gender and Number..............................................................57 ARTICLE XIV. Adoption by Affiliates....................................................................58 14.1. Adoption of Plan...............................................................58 14.2. The Company as Agent for Employer..............................................58 14.3. Adoption of Amendments.........................................................58 14.4. Termination....................................................................58 14.5. Data to Be Furnished by Employers..............................................58 14.6. Joint Employers................................................................58 14.7. Expenses.......................................................................59 14.8. Withdrawal.....................................................................59 14.9. Prior Plans....................................................................59

iii CCC INFORMATION SERVICES INC. 401(k) RETIREMENT SAVINGS & INVESTMENTS PLAN (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001) ARTICLE I. INTRODUCTION 1.1. ESTABLISHMENT AND PURPOSE. CCC Information Services Inc. (the "Company"), a Delaware corporation, previously established the CCC Information Services Inc. 401(k) Retirement Savings and Investment Plan (the "Plan") in order to provide eligible employees with the opportunity to accumulate funds for their retirement on a tax-deferred basis. The Plan is hereby amended and restated effective January 1, 2001 (the "Effective Date"), to incorporate the requirements of recent legislation and to make certain other changes to the Plan. The funds contributed to the Plan are held in a Trust under a trust agreement which is made a part of the Plan by reference. The Plan is intended to continue to satisfy the requirements of a tax-qualified plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and of a cash or deferred arrangement under Section 401(k) of the Code, and to continue to comply with the applicable requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The related Trust is intended to continue to be exempt from tax under Section 501(a) of the Code. 1.2. APPLICABILITY OF THE PLAN. The provisions of the Plan as set forth herein are applicable only to Employees in the employ of an Employer on and after the Effective Date. The rights and benefits of Employees whose employment terminated prior to the Effective Date and their Beneficiaries who are or will be receiving benefits under the Plan shall be determined in accordance with the Plan as in effect on the last day such Employees were employed by the Employer. ARTICLE II. DEFINITIONS Whenever used in the Plan, the following words and phrases shall have the respective meanings stated below unless a different meaning is plainly required by the context, and when the defined meaning is intended, such term is capitalized. 2.1. "ACCOUNT" means each of the individual accounts established pursuant to Article VI representing a Participant's allocable share of the Trust Fund. 2.2. "ACCOUNTS" means the collective individual accounts established pursuant to Article VI. 2.3. "ACTIVE PARTICIPANT" means a Participant who, on a given date, is employed by the Employer as an Eligible Employee. 2.4. "ACTUAL DEFERRAL PERCENTAGE" and "ACTUAL DEFERRAL PERCENTAGE TEST" shall have the meaning set forth in Section 4.3. 2.5. "AFFILIATE" means any corporation or entity, other than the Company that, as of a given date, is a member of a controlled group of corporations, a group of trades or businesses under common control or an affiliated service group, as determined in accordance with Code Sections 414(b), (c), (m) or (o), of which the Company is a member. For purposes of determining the amount of a Participant's Annual Addition or Section 415 Compensation and applying the limitations of Code Section 415 set forth in Article VI, "Affiliate" shall include any corporation or enterprise which, as of a given date, is a member of a controlled group of corporations or a group of trades or businesses under common control, as determined in accordance with Code Sections 414(b) or (c), as modified by Code Section 415(h), of which the Company is a member. 2.6. "ANNUAL ADDITION" means, for any Limitation Year, the sum of (a) all Before-Tax Contributions and Employer Matching Contributions allocated to the Accounts of a Participant under this Plan; (b) any employer contributions and forfeitures allocated to such Participant under any other defined contribution plan maintained by the Employer or an Affiliate; and (c) amounts allocated to an individual medical account as defined in Code Section 415(1)(2) and amounts attributable to post-retirement medical benefits allocated to an account described in Code Section 419A(d)(2) maintained by the Employer or an Affiliate. 2.7. "BEFORE-TAX CONTRIBUTIONS" means the sum of the Matched Before-Tax Contributions and the Supplemental Before-Tax Contributions made on behalf of a Participant by the Employer as described in Section 4.2. 2.8. "BENEFICIARY" means the person, persons, trust or other entity designated in accordance with Section 8.3 to receive a benefit after the death of the Participant. 2 2.9. "CODE" means the Internal Revenue Code of 1986, as from time to time amended, and the temporary and final regulations issued thereunder. 2.10."COMMITTEE" means the Plan Committee appointed pursuant to Article X. 2.11."COMPANY" means CCC Information Services Inc., a Delaware corporation, and any successor thereto. 2.12."CONSIDERED COMPENSATION" means the Participant's Section 415 Compensation for the Plan Year paid while he or she was an Active Participant, plus, for Plan Years beginning on and after January 1, 1998, amounts excluded from the Participant's income for the period under Code Sections 125 or 402(g)(3) and, for Plan Years beginning on and after January 1, 2001, amounts excluded from the Participant's income for the period under Code Section 132(f)(4), but excluding in all years bonuses and commissions; provided, however, that Considered Compensation shall not include any amount in excess of $170,000 ($200,000 for Plan Years beginning on and after January 1, 2002) (as adjusted by the Commissioner of the Internal Revenue Service for increases in the cost of living in accordance with Code Section 401(a)(17)(B)). The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. 2.13."CONTRIBUTION PERCENTAGE" and "CONTRIBUTION PERCENTAGE TEST" are described in Section 4.5. 2.14."DEFINED BENEFIT DOLLAR LIMITATION" means an amount equal to $90,000, or, if greater, the amount in effect as of the last day of the Limitation Year under Code Section 415(b)(1)(A), as adjusted by the Secretary of the Treasury pursuant to Code Section 415(d). 2.15."DEFINED CONTRIBUTION DOLLAR LIMITATION" means an amount equal to $30,000 (as adjusted by the Secretary of the Treasury pursuant to Code Section 415(d)), prorated for any Limitation Year of less than 12 months. Notwithstanding the foregoing, effective for Limitation Years beginning after December 31, 2001, the Defined Contribution Dollar Limitation described above shall mean an amount equal to $40,000 or such greater amount as determined by the Secretary of the Treasury for that year. 2.16."ELIGIBLE EMPLOYEE" means any employee carried on the payroll of the Employer other than (i) a Leased Employee, (ii) a member of a collective bargaining unit, provided that retirement benefits were the subject of good-faith bargaining between the members of the collective bargaining unit and the Employer, unless the collective bargaining agreement makes this Plan applicable to such employee, (iii) non-resident alien employees, and (iv) any person providing services to an Employer during the time when he or she is or was designated by the Company, in its sole discretion, as an independent contractor. 3 2.17."ELIGIBILITY PERIOD" is the twelve-month period used for the purpose of determining when certain employees are eligible to begin making Before-Tax Contributions under the Plan. An employee's first Eligibility Period shall commence on the date on which he or she first completes an Hour of Service. Subsequent Eligibility Periods shall commence on each January 1 which occurs after said date. Notwithstanding the foregoing, the initial Eligibility Period of a former employee who is reemployed after incurring one or more One-Year Breaks in Service and who is not eligible immediately to receive Employer Matching Contributions pursuant to Section 3.1(c), shall commence on the date on which he or she first completes an Hour of Service after such One-Year Break in Service, and subsequent Eligibility Periods shall commence on the January 1 which occurs after said date. 2.18."EMPLOYER" means the Company and any Affiliate which adopts this Plan pursuant to Article XIV. 2.19."EMPLOYER MATCHING CONTRIBUTIONS" means the contributions described in Section 4.4. 2.20."ENTRY DATE" means the first day of each calendar month. 2.21."ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. 2.22."EXCESS FORFEITURE SUSPENSE ACCOUNT" is the account described in Section 6.8. 2.23."FIVE-PERCENT OWNER" means an employee described in Code Section 416(i)(1). 2.24."FUND" means one of the Funds established and maintained pursuant to Article VI. 2.25."HIGHLY COMPENSATED EMPLOYEE" means an employee of the Employer or an Affiliate who was a Participant eligible during the Plan Year to make Before-Tax Contributions and who: (a) was a Five-Percent Owner at any time during the Plan Year or the preceding Plan Year; or (b) received Section 415 Compensation in excess of $80,000 (as adjusted for increases in the cost of living by the Secretary of the Treasury) during the preceding Plan Year and was among the top 20% of the employees (disregarding those employees excludable under Code Section 414(q)(5)) when ranked on the basis of Section 415 Compensation paid for that year). 2.26."HOUR OF SERVICE" means: (a) Each hour for which an employee is paid or entitled to payment for the performance of duties for the Employer or an Affiliate; 4 (b) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer or an Affiliate; and (c) Each hour for which an employee is paid or entitled to payment for a period during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, layoff, jury duty, military duty, or leave of absence. In crediting Hours of Service pursuant to this subparagraph (c), all payments made or due shall be taken into account, whether such payments are made directly by the Employer or an Affiliate or indirectly (e.g., through a trust fund or insurer to which the Employer or an Affiliate makes payments, or otherwise), except that: (i) no such Hours of Service shall be credited if payments are made or due under a plan maintained solely for the purpose of complying with any workers' compensation, unemployment compensation or disability insurance laws; and (ii) no such Hours of Service shall be credited for payments which are made solely to reimburse the employee for medical or medically related expenses. The Hours of Service, if any, for which an employee is credited for a period in which he or she performs no duties shall be computed and credited to computation periods in accordance with 29 C.F.R. 2530.200b-2 and other applicable regulations promulgated by the Secretary of Labor. For purposes of computing the Hours of Service to be credited to an employee for whom a record of hours worked is not maintained, an employee shall be credited with 45 Hours of Service for each week in which he or she completes at least one Hour of Service. In addition, an employee shall be credited with Hours of Service for each week the employee is on a leave of absence in accordance with Section 3.4. 2.27."LEASED EMPLOYEE" means any individual who is not carried on the payroll of the Employer or an Affiliate and who provides services for the Employer or an Affiliate if: (a) such services are provided pursuant to an agreement between the Employer or an Affiliate and any other person ("leasing organization"); (b) such individual has performed such services for the Employer or an Affiliate (or a related person within the meaning of Code Section 144(a)(3)) on a substantially full-time basis for a period of at least one year; and (c) such services have been performed under the primary direction or control of the Employer or an Affiliate. 2.28."LIMITATION YEAR" means the Plan Year. 5 2.29."MATCHED BEFORE-TAX CONTRIBUTIONS" means (i) the first $2,000 of Before-Tax Contributions during the Plan Year for Participants whose Considered Compensation is less than $33,400 and (ii) Before-Tax Contributions up to 6% of Considered Compensation during the Plan Year for Participants whose Considered Compensation is $33,400 and above. 2.30."NON-HIGHLY COMPENSATED EMPLOYEE" means, for any Plan Year, any employee of the Employer or Affiliate who (a) at any time during the Plan Year was a Participant eligible to make Before-Tax Contributions, and (b) was not a Highly Compensated Employee for such Plan Year. 2.31."NORMAL RETIREMENT DATE" means a Participant's 65th birthday. 2.32."ONE-PERCENT OWNER" means an employee described in Code Section 416(i)(1). 2.33."ONE-YEAR BREAK IN SERVICE" is a Plan Year in which an employee completes 500 Hours of Service or less. Solely for purposes of determining whether a One-Year Break in Service has occurred, "Hours of Service" shall also include each hour for which the employee otherwise would normally have been credited but for the employee's absence on a maternity or paternity absence. A maternity or paternity absence is an absence from work: (a) by reason of the pregnancy of the employee; (b) by reason of the birth of a child of the employee; (c) by reason of the placement of a child with the employee in connection with the adoption of such child by the employee; or (d) for purposes of caring for such child for a period beginning immediately following such birth or placement. Any employee requesting such credit shall promptly furnish the Committee such information as the Committee requires to show that the absence from work is a maternity or paternity absence and the number of days for which there was such an absence. Except as otherwise provided in this Plan, no more than 501 hours shall be credited for a maternity or paternity absence. All such hours shall be credited in the Plan Year in which the absence begins if necessary to prevent a One-Year Break in Service in such Plan Year. If such hours are not necessary to prevent a One-Year Break in Service in such Plan Year, the hours shall be credited in the succeeding Plan Year if necessary to prevent a One-Year Break in Service in such Plan Year. In the event the Committee is unable to determine the hours which otherwise would normally have been credited for such absence, the employee shall be credited with 8 hours per day. 2.34."PARTICIPANT" means: (a) a current employee of the Employer who has become a Participant in the Plan pursuant to Section 3.1 or; 6 (b) a former employee for whose benefit an Account in the Trust Fund is maintained. 2.35."PLAN" means the CCC Information Services Inc. 401(k) Retirement Savings & Investment Plan, as set forth herein and as amended from time to time. 2.36."PLAN YEAR" means the calendar year. 2.37."REQUIRED BEGINNING DATE" means: (a) for a Participant who is a Five-Percent Owner or who attained age 70 1/2 prior to January 1, 1999, April 1 following the calendar year in which the Participant attains age 70 1/2; or (b) for a Participant who attains age 70 1/2 on or after January 1, 1999 and who is not a Five-Percent Owner, April 1 following the later of the calendar year in which the Participant attains age 70 1/2 or the calendar year in which the Participant terminates employment. 2.38."ROLLOVER CONTRIBUTION" means: (a) all or a portion of an eligible rollover distribution received by an employee from another qualified plan which is eligible for tax-free rollover to a qualified plan and which is rolled over by the employee to this Plan within 60 days following his or her receipt thereof; (b) amounts rolled over to this Plan from a conduit individual retirement account which has no assets other than assets (and the earnings thereon) which were (i) previously distributed to the employee by another qualified plan as an eligible rollover distribution, (ii) eligible for tax-free rollover to a qualified plan, and (iii) deposited in such conduit individual retirement account within 60 days of receipt thereof; (c) amounts distributed to the employee from a conduit individual retirement account meeting the requirements of (b) above, and rolled over by the employee to this Plan within 60 days of his or her receipt thereof from such conduit individual retirement account; and (d) amounts rolled over directly to this Plan by the trustee of another qualified plan pursuant to the provisions of Code Section 401(a)(31) and to any other related laws and regulations as in effect at the time of such direct rollover. 2.39."SECTION 415 COMPENSATION" for a period means the Participant's wages as defined in Code Section 3401(a) for purposes of income tax withholding at the source, and all other payments of compensation to the Participant by the Employer for which the Employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3) 7 and 6052, but determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed, plus, for Plan Years beginning on and after January 1, 1998, amounts excluded from the Participant's income for the period under Code Section 125 or 402(g)(3) and, for Plan Years beginning on and after January 1, 2001, amounts excluded from the Participant's income for the period under Code Section 132(f)(4). 2.40."SEGREGATED LOAN" is any loan treated as a separate investment in accordance with Section 6.1. 2.41."THE 1.25 TEST" is the test described in Sections 4.3(b)(i)(A) and 4.5(a)(i). 2.42."THE 2.0 TEST" is the test described in Sections 4.3(b)(i)(B) and 4.5(a)(ii). 2.43."TRUST" or "TRUST FUND" means the Trust established in accordance with Article XI. 2.44."TRUSTEE" means the Trustee or Trustees under the Trust referred to in Article XI. 2.45."VALUATION DATE" means the daily date as of which the Investment Committee shall determine the value of each Account. 2.46."YEAR OF SERVICE" is any Plan Year in which an employee completes 1,000 or more Hours of Service. 8 ARTICLE III. ELIGIBILITY AND PARTICIPATION 3.1. ELIGIBILITY REQUIREMENTS. (a) All Participants in the Plan as of December 31, 2000, shall continue to be Participants in this Plan as of the Effective Date. (b) All other Eligible Employees, who are regularly scheduled to work more than 20 hours per week, shall be eligible to participate in the Plan on the Entry Date following the later of (i) the date on which they complete an Hour of Service and (ii) their 21st birthday. (c) Eligible Employees who are regularly scheduled to work 20 hours per week or less shall be eligible to participate on the Entry Date coinciding with or next following the later of (i) the last day of the first Eligibility Period in which they complete 1,000 Hours of Service and (ii) their 21st birthday. 3.2. ENROLLMENT PROCEDURE. Each Eligible Employee who intends to participate in the Plan shall complete such enrollment steps as may be established from time to time by the Committee signifying his or her election to become a Participant and specifying the rate of his or her contributions pursuant to Section 4.2. Subject to such rules as shall be prescribed by the Committee, an Eligible Employee who has met the eligibility requirements of Section 3.1 shall become a Participant as of the first Entry Date after his or her completing of an election to participate in the Plan. 3.3. ELIGIBLE EMPLOYEES WHO DECLINE PARTICIPATION. An Eligible Employee who does not become a Participant when first eligible may nevertheless elect to become a Participant as of any subsequent date by filing a participation election as described in Section 3.2 in accordance with the procedures that the Committee may prescribe, provided he/she is still an Eligible Employee. 3.4. LEAVES OF ABSENCE. An employee shall be credited with 45 Hours of Service for each full week that the employee is on a layoff or a leave of absence, if he or she is not otherwise credited with such Hours of Service. Any such leave of absence must be granted in writing and pursuant to the Employer's established leave policy, which shall be administered in a uniform and nondiscriminatory manner to similarly situated employees. 3.5. QUALIFIED MILITARY SERVICE. Notwithstanding any provision of this Plan to the contrary, effective on and after December 12, 1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u). 9 ARTICLE IV. CONTRIBUTIONS BY EMPLOYER 4.1. EMPLOYER CONTRIBUTIONS. Subject to the right reserved to the Employer to alter, amend or discontinue this Plan and the Trust, the Employer shall for each Plan Year contribute to the Trust Fund an amount equal to the sum of: (a) the Before-Tax Contributions; and (b) the Employer Matching Contributions. Notwithstanding the foregoing, the total Employer contributions made under Section 4.1(b) for any taxable year shall not exceed the amount deductible for that year under Section 404(a)(3)(A) of the Code, and shall not exceed the total amount allowable as Annual Additions to Participants' Accounts for the Plan Year in which that taxable year ends. The Employer shall make such contributions as of the close of the Plan Year, or at such other times as the Employer shall determine, but in no event later than such time as the Code may allow to qualify such contributions for current federal income tax deduction by the Employer for its fiscal year. 4.2. BEFORE-TAX CONTRIBUTIONS. Subject to the provisions of Sections 4.1, 4.3 and 6.8, each Active Participant may for each Plan Year elect to have the Employer make a Before-Tax Contribution on his or her behalf in an amount (in whole percentages) equal to at least 1% but not in excess of 14% (25% for Plan Years beginning on and after January 1, 2002) of his or her Considered Compensation. Any election under Section 4.1(a) above shall be deemed to be a continuing election until changed by the Participant. An Active Participant may change his or her election once each calendar month by filing written notice at the time and in the manner as the Committee shall prescribe in its procedures; provided, however, that an Active Participant who ceases making Before-Tax Contributions may not resume making Before-Tax Contributions for 12 months following such cessation (six months effective January 1, 2002). All Before-Tax Contributions shall be made through periodic payroll deductions. The Employer will transmit Before-Tax Contributions to the Trustee for investment as soon as practicable after the deduction from Considered Compensation, but in no event later than 15 days after the end of the month in which the particular deductions are made. 4.3. LIMITATIONS ON BEFORE-TAX CONTRIBUTIONS. (a) In no event shall a Participant's Before-Tax Contributions during any calendar year exceed the dollar limitation contained in Code Section 402(g) in effect at the beginning of such calendar year (which for 2002 shall be $11,000), as adjusted by the Secretary of the Treasury. If a 10 Participant's Before-Tax Contributions, together with any additional elective contributions to a qualified cash or deferred arrangement, and any elective deferrals under a tax-sheltered annuity program or a SIMPLE plan, exceed such dollar limitation for any calendar year, such excess, and any earnings allocable thereto, shall be distributed to the Participant by April 15 of the following year; provided that, if such excess contributions were made to a plan or arrangement not maintained by the Employer or an Affiliate, the Participant must first notify the Committee of the amount of such excess allocable to this Plan by March 1 of the following year. (b) Notwithstanding any other provision of this Plan to the contrary, the Before-Tax Contributions for the Highly Compensated Employees for the Plan Year shall be reduced in accordance with the following provisions: (i) The Before-Tax Contributions of the Highly Compensated Employees shall be reduced if neither of the Actual Deferral Percentage Tests set forth in (A) or (B) below is satisfied after taking into account the provisions of subsection (f) below: (A) THE 1.25 TEST. The Actual Deferral Percentage of the Highly Compensated Employees is not more than the Actual Deferral Percentage of the Non-Highly Compensated Employees multiplied by 1.25. (B) THE 2.0 TEST. The Actual Deferral Percentage of the Highly Compensated Employees is not more than 2 percentage points greater than the Actual Deferral Percentage of the Non-Highly Compensated Employees and the Actual Deferral Percentage of the Highly Compensated Employees is not more than the Actual Deferral Percentage of the Non-Highly Compensated Employees multiplied by 2.0. (C) As used in this subsection, "Actual Deferral Percentage" means: (i) With respect to Non-Highly Compensated Employees, the average of the ratios of each Non-Highly Compensated Employee's Before-Tax Contributions with respect to the prior Plan Year, to each such Participant's Considered Compensation for such Plan Year; and (ii) With respect to Highly Compensated Employees, the average of the ratios of each Highly Compensated Employee's Before-Tax 11 Contributions with respect to the current Plan Year, to each such Participant's Considered Compensation for such Plan Year. (ii) All Before-Tax Contributions made under this Plan and all before-tax contributions made under any other plan that is aggregated with this Plan for purposes of Code Sections 401(a)(4) and 410(b) shall be treated as made under a single plan. If any plan is permissively aggregated with this Plan for purposes of Code Section 401(k), the aggregated plans must also satisfy Code Sections 401(a)(4) and 410(b) as though they were a single plan. The Actual Deferral Percentage ratios of any Highly Compensated Employee will be determined by treating all plans subject to Code Section 401(k) under which the Highly Compensated Employee is eligible as a single plan. (iii)If neither Actual Deferral Percentage Test is satisfied as of the end of the Plan Year, the Committee shall cause the Before-Tax Contributions for Highly Compensated Employees to be reduced and refunded to each such Highly Compensated Employee in accordance with this paragraph (iii) and paragraph (iv), respectively, until either Actual Deferral Percentage Test is satisfied. The sequence for determining the amount of such reductions shall begin with Highly Compensated Employees who elected to defer the greatest percentage of Considered Compensation, assuming that Supplemental Before-Tax Contributions represent the last contribution made to the Participant's Account, then the second greatest percentage amount, continuing until either Actual Deferral Percentage Test is satisfied. This process shall continue through the remaining Supplemental Before-Tax Contributions and continuing with the Matched Before-Tax Contributions until either Actual Deferral Percentage Test is satisfied. Notwithstanding the foregoing, effective for Plan Years beginning on or after January 1, 1997, reductions will be determined in order of the dollar amount of Considered Compensation deferred by the Highly Compensated Employees, rather than in order of the percentage of Considered Compensation deferred. (iv) Once the total amount of reductions have been determined under (iii) above, the Committee shall direct the Trustee to distribute as a refund to the appropriate Highly Compensated Employees an allocable portion of such reduction and to treat as forfeitures the appropriate amount of Employer Matching Contributions, together with the net earnings or losses allocable thereto. The Committee 12 shall designate such distribution and forfeiture as a distribution of excess Before-Tax Contributions and forfeiture of excess Employer Matching Contributions, determine the amount of the allocable net earnings or losses to be distributed and forfeited in accordance with subsections (c) and (d) below, and cause such distributions and forfeitures to occur prior to the end of the Plan Year following the Plan Year in which the excess Before-Tax Contributions and excess Employer Matching Contributions were made. Notwithstanding anything in this subsection (b) to the contrary, the provisions of this subsection shall apply separately with respect to each group of employees who are members of a collective bargaining unit (if any) and the group of employees who are not members of a collective bargaining unit. (c) Net earnings or losses to be refunded with the excess Before-Tax Contributions shall be equal to the net earnings or losses on such contributions for the Plan Year in which the contributions were made. The net earnings or losses allocable to the excess Before-Tax Contributions for the Plan Year shall be determined in the manner set forth in Article VI. (d) Net earnings or losses to be treated as forfeitures together with the Employer Matching Contributions shall be equal to the net earnings or losses on such contributions for the Plan Year in which the contributions were made. Net earnings or losses on Employer Matching Contributions shall be determined in the same manner as in subsection (c) above, except that the phrase "Employer Matching Contribution" shall be substituted for the phrase "Before-Tax Contribution" wherever used therein. (e) Any Employer Matching Contribution treated as a forfeiture pursuant to subsection (b) above shall be used to reduce the Employer Matching Contribution in Section 4.4. (f) For the purpose of avoiding the necessity of adjustments pursuant to this Section or Section 6.8: (i) The Committee may adopt such rules as it deems necessary or desirable to: (A) impose limitations during a Plan Year on the percentage of Before-Tax Contributions elected by Participants pursuant to Section 4.2 for the purpose of avoiding the necessity of 13 adjustments pursuant to this Section or Section 6.8 or to comply with any other applicable law or regulation; or (B) increase during a Plan Year the percentage of Considered Compensation with respect to which a Participant may elect a Before-Tax Contribution for the purpose of providing Participants with the opportunity to increase their Before-Tax Contributions within the limitations of this Section 4.3; (ii) The Employer may at its sole discretion make fully vested contributions to the Plan which will be allocated to the Before-Tax Accounts of one or more Participants who are Non-Highly Compensated Employees in such amounts as the Employer directs for the purpose of complying with the applicable limits on Before-Tax Contributions in the Code. Such contributions will not be taken into account in the allocation of Employer Matching Contributions. (iii)The Committee, in its sole discretion, may elect for a Plan Year to perform the test under subsection (b) separately for those Active Participants who have not yet attained age 21 and completed one Year of Service or, alternatively, beginning with the 1999 Plan Year, exclude such Active Participants who are Non-Highly Compensated Employees from testing under this subsection (iii). (g) The amount of the Before-Tax Contributions to be made pursuant to a Participant's election shall reduce the compensation otherwise payable to the Participant by the Employer. (h) The amount of each Participant's Matched Before-Tax Contributions and Supplemental Before-Tax Contributions as determined under this Section 4.3 is subject to the provisions of Section 6.8. 4.4. EMPLOYER MATCHING CONTRIBUTION. Subject to the provisions of Sections 4.1 and 6.8, the Employer shall pay to the Trustee, for each Plan Year, an amount which, when added to the forfeitures of Employer Matching Contributions for the Plan Year, shall be equal to 50% of the Matched Before-Tax Contributions made on behalf of each Participant. 4.5. CODE SECTION 401(m) LIMITATION ON EMPLOYER MATCHING CONTRIBUTIONS. Notwithstanding any other provision to the contrary, the Employer Matching Contributions of the Highly Compensated Employees (after any reduction under Section 4.3(b)(iii) shall be reduced in accordance with the following provisions: (a) The Employer Matching Contributions of the Highly Compensated Employees shall be reduced if neither of the Contribution Percentage Tests 14 set forth in (i) or (ii) below is satisfied, after taking into account the provisions of subsection (i) below: (i) THE 1.25 TEST. The Contribution Percentage of the Highly Compensated Employees is not more than the Contribution Percentage of all Non-Highly Compensated Employees multiplied by 1.25. (ii) THE 2.0 TEST. The Contribution Percentage of the Highly Compensated Employees is not more than 2 percentage points greater than the Contribution Percentage of all Non-Highly Compensated Employees, and the Contribution Percentage of the Highly Compensated Employees is not more than the Contribution Percentage of all Non-Highly Compensated Employees multiplied by 2.0. (b) As used in this Section 4.5, "Contribution Percentage" means either (i) or (ii) below: (i) (A) With respect to Non-Highly Compensated Employees, the average of the ratios of each Non-Highly Compensated Employee's Employer Matching Contributions with respect to the prior Plan Year, to each such Participant's Considered Compensation for such Plan Year; and (B) With respect to Highly Compensated Employees, the average of the ratios of each Highly Compensated Employee's Employer Matching Contributions with respect to the current Plan Year, to each such Participant's Considered Compensation for such Plan Year. (ii) (A) With respect to Non-Highly Compensated Employees, the average of the ratios of each Non-Highly Compensated Employee's share of Employer Matching Contributions, plus designated Before-Tax Contributions, if applicable, with respect to the prior Plan Year, to each such Participant's Considered Compensation for such Plan Year; and (B) With respect to Highly Compensated Employees, the average of the ratios of each Highly Compensated Employee's share of Employer Matching Contributions, plus designated Before-Tax Contributions, if applicable, with respect to the current Plan Year, to each such Participant's Considered Compensation for such Plan Year. 15 If neither Contribution Percentage Test is satisfied using the definition of Contribution Percentage set forth in this subsection 4.5(b)(i), the tests shall be applied using the definition of Contribution Percentage set forth in this subsection 4.5(b)(ii). (iii)All Employer Matching Contributions made under this Plan and all employee contributions and matching contributions made under any other plan that is aggregated with this Plan for purposes of Code Sections 401(a)(4) and 410(b) shall be treated as made under a single plan. If any plan is permissively aggregated with this Plan for purposes of Code Section 401(m), the aggregated plans must also satisfy Code Sections 401(a)(4) and 410(b) as though they were a single plan. The Contribution Percentage ratio of any Highly Compensated Employee will be determined by treating all plans subject to Code Section 401(m) under which the Highly Compensated Employee is eligible as a single plan. (c) If neither Contribution Percentage Test is satisfied as of the end of the Plan Year, the Committee shall first cause the Employer Matching Contributions of the Highly Compensated Employees to be reduced and refunded or forfeited, as the case may be, in accordance with this subsection (c) and subsection (d) until either Contribution Percentage Test is satisfied. The sequence for determining the amount of such reductions shall begin with Highly Compensated Employees who received the greatest amount of Employer Matching Contributions as a percentage of Considered Compensation, then the second greatest percentage amount, continuing until either Contribution Percentage Test is satisfied. This process shall continue through the remaining Employer Matching Contributions for Highly Compensated Employees until either Contribution Percentage Test is satisfied. Notwithstanding the foregoing, effective for Plan Years beginning on or after January 1, 1997, reductions will be determined in order of the dollar amount of the Employer Matching Contributions that are made on behalf of the Highly Compensated Employees, rather than in order of the percentage of Employer Matching Contributions (as a percentage of Considered Compensation). (d) Once the total amount of reductions have been determined under (c) above, the Committee shall direct the Trustee to distribute to the appropriate Highly Compensated Employees the amount of any excess vested Employer Matching Contribution attributable to such Highly Compensated Employees, and to treat as a forfeiture the appropriate amount of any excess nonvested Employer Matching Contributions, together with the net earnings or losses allocable thereto. The Committee shall designate such distribution and forfeiture as a distribution and 16 forfeiture of excess contributions, determine the amount of the allocable net earnings or losses to be distributed in accordance with subsection (e) below, and cause such distributions and forfeitures to occur prior to the end of the Plan Year following the Plan Year in which such excess Employer Matching Contributions were made. (e) Net earnings or losses to be refunded with the excess Employer Matching Contributions shall be equal to the net earnings or losses on such contributions for the Plan Year in which the contributions were made. Net earnings or losses shall be determined in the same manner as in Section 4.3(c), except that the phrases ("Employer Matching Contributions") and ("Matching Account") shall be substituted for the phrases "Before-Tax Contributions" and "Before-Tax Account" wherever used therein. (f) Net earnings or losses to be treated as forfeitures together with the Employer Matching Contributions shall be equal to the net earnings or losses on such contributions for the Plan Year in which the contributions were made. Net earnings or losses shall be determined in the same manner as in Section 4.3(c), except that the phrases "Employer Matching Contribution" and "Matching Account" shall be substituted for the phrases "Before-Tax Contribution" and "Before-Tax Account" wherever used therein. (g) Any Employer Matching Contributions which are treated as forfeitures pursuant to subsection (d) above shall be used to reduce the Employer Matching Contribution in Section 4.4. (h) For the purpose of avoiding the necessity of adjustments pursuant to this Section or Section 6.8, the Employer may in its sole discretion make fully vested contributions to the Plan, which will be allocated to the Matching Accounts of one or more Participants who are Non-Highly Compensated Employees, in such amounts as the Employer directs for the purpose of complying with applicable limits on Employer Matching Contributions in the Code. Such contributions will not be taken into account in the allocation of Employer Matching Contributions. (i) The Committee, in its sole discretion, may elect for a Plan Year to perform the test under subsection (a) separately for those Active Participants who have not yet attained age 21 and completed one Year of Service or, alternatively, beginning with the 1999 Plan Year, exclude such Active Participants who are Non-Highly Compensated Employees from testing under this subsection (i). 17 4.6. MULTIPLE USE. (a) This Section 4.6 will be applicable if the 2.0 Test is used to satisfy both the Actual Deferral Percentage Test and the Contribution Percentage Test. If this Section 4.6 is applicable, the Committee shall determine whether a "Multiple Use" has occurred, and if such a Multiple Use has occurred, the Employer Matching Contributions of the Highly Compensated Employees shall be reduced in accordance with the provisions of subsection (c) below. (b) A Multiple Use occurs when, for the Highly Compensated Employees, the sum of the Actual Deferral Percentage used to satisfy the 2.0 Test plus the Contribution Percentage used to satisfy the 2.0 Test exceeds the "Aggregate Limit." The Aggregate Limit is the greater of (i) or (ii) below, determined as follows: (i) (A) First, multiply 1.25 by the greater of (I) the Actual Deferral Percentage, or (II) the Contribution Percentage of the Non-Highly Compensated Employees; (B) Second, add 2.0 to the lesser of (I) or (II) above, provided that such sum shall not exceed 2 times the lesser of (I) or (II) above; and (C) Finally, add the results from (A) and (B) to determine the Aggregate Limit; or (ii) (A) First, multiply 1.25 by the lesser of (I) the Actual Deferral Percentage, or (II) the Contribution Percentage of the Non-Highly Compensated Employees; (B) Second, add 2.0 to the greater of (I) or (II) above, provided that such sum shall not exceed 2 times the greater of (I) or (II) above; and (C) Finally, add the results from (A) and (B) to determine the Aggregate Limit. (c) If a Multiple Use has occurred, such Multiple Use shall be corrected by reducing the Contribution Percentage of Highly Compensated Employees, in accordance with the provisions of Section 4.5, until the sum of the Actual Deferral Percentage plus the Contribution Percentage for the Highly Compensated Employees equals the Aggregate Limit. (d) Net earnings or losses to be treated as forfeitures together with the excess nonvested Employer Matching Contributions shall be equal to the net 18 earnings or losses on such contributions for the Plan Year in which the contributions were made. Net earnings or losses shall be determined in the same manner as in Section 4.3(c) except that the phrase "Employer Matching Contribution" shall be substituted for the phrase "Before-Tax Contribution" wherever used therein. (e) Any Employer Matching Contributions which are treated as forfeitures pursuant to Section 4.5(d) above shall be used to reduce the Employer Matching Contribution in Section 4.4. (f) Notwithstanding the foregoing, the restriction on the Multiple Use, which may occur as a result of the testing under the limitations described in Sections 4.3 and 4.5 of the Plan, shall not apply for Plan Years beginning after December 31, 2001. 4.7. CATCH-UP CONTRIBUTIONS. In addition to the ability to elect Before-Tax Contributions under Section 4.2 of the Plan, effective after December 31, 2001, all Eligible Employees who have attained age 50 before the close of the Plan Year shall be eligible to make "Catch-Up Contributions" in accordance with, and subject to the limitations of, Section 414(v) of the Code. An Eligible Employee who is eligible to make Catch-Up Contributions who contributes the maximum permissible amount pursuant to Section 4.3 of the Plan (and Code Section 402(g)) shall be deemed to have elected to make the maximum Catch-Up Contribution permitted under Code Section 414(v) for that Plan Year. Such deemed election shall be in effect until revoked or changed in accordance with the procedures prescribed by the Committee, as set forth in Section 4.2 of the Plan. Within a reasonable period prior to the effective date of this Section 4.7, all Eligible Employees shall receive a notice that explains the automatic election prescribed by this Section and the right to have no such election made or to alter the amount of such election. This notice shall also explain the procedures for exercising this right. Catch-Up Contributions shall not be taken into account for purposes of the limitation on the maximum amount of such Participant's Before-Tax Contributions for a Plan Year under Section 4.3 of the Plan (and Section 402(g) of the Code) or the limitation on contributions for a Plan Year under Section 6.8 of the Plan (and Section 415(c) of the Code). Further, by allowing such Catch-Up Contributions, the Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of the Code, as applicable. 19 ARTICLE V. PARTICIPANT CONTRIBUTIONS 5.1. NO AFTER-TAX CONTRIBUTIONS. No after-tax contributions are required or permitted under the Plan. 5.2. ROLLOVER CONTRIBUTIONS. (a) A Rollover Contribution may be rolled over in cash to the Trust Fund for the benefit of an Eligible Employee with the permission of the Committee; provided that such amount is not attributable to a partial withdrawal made pursuant to Section 8.7. Prior to accepting any rollover which is intended to be a Rollover Contribution, the Committee may require the Eligible Employee to establish that the amount to be rolled over meets the definition of a Rollover Contribution and any other limitations of the Code applicable to such rollovers. (b) If the Committee determines after a Rollover Contribution has been made that such Rollover Contribution did not in fact constitute a Rollover Contribution as defined in Section 2.38, the amount of such Rollover Contribution and any earnings thereon shall be returned to the Eligible Employee. (c) Each Participant's Rollover Contribution shall be credited to his or her Rollover Account and invested in accordance with Article VI. A Participant's Rollover Account shall be fully vested and nonforfeitable. (d) The Rollover Contribution of a Participant shall be allocated to his or her Rollover Account as of the Valuation Date coinciding with or next succeeding the date on which such amounts are received by the Trustee. (e) Amounts may be distributed from a Participant's Rollover Account under the terms and conditions described in Articles VII and VIII. 20 ARTICLE VI. ACCOUNTING PROVISIONS AND ALLOCATIONS 6.1. PARTICIPANT'S ACCOUNTS. (a) For each Participant there shall be maintained as appropriate a separate Before-Tax Account, Matching Account (which shall be divided into a Pre-1999 Matching Subaccount and a Post-1998 Matching Subaccount) and Rollover Account. Each Account (and subaccount) shall be credited with the amount of contributions, forfeitures, interest and earnings of the Trust Fund allocated to such Account and shall be charged with all distributions, withdrawals and losses of the Trust Fund allocated to such Account. (b) The Committee shall also establish and maintain an Account with respect to each Segregated Loan made to a Participant pursuant to Section 8.8. The Participant's Segregated Loan Account shall be credited with the value of any notes held by the Account. The value of any principal payments by the Participant to the Segregated Loan Account shall be promptly charged to the Segregated Loan Account and transferred along with any interest payments to the separate investment Funds. 6.2. INVESTMENT FUNDS. (a) The Trust Fund shall consist of separate investment funds ("Funds") as established from time to time by the Committee. Each Participant's (or Beneficiary's) share in the Trust Fund shall consist of an undivided interest in the respective assets of one or more Funds. Except as otherwise provided, each Participant's (or Beneficiary's) share in each such Fund shall be measured by the proportion of the Fund that is attributable to the Participant's Account, as compared to the proportion of the Fund that is attributable to all other Accounts as of the date such share is being determined. For purposes of allocation of income and valuation, such Fund shall be considered separately. No Fund shall share in the gains or losses of any other, and no Fund shall be valued by taking into account any assets or distributions from any other. (b) Each Fund shall be established and invested by the Trustee in accordance with the investment policies determined, or as the Trustee may be directed, from time to time by the Committee. The Committee may from time to time also direct the Funds with similar investment objectives be consolidated. (i) One Fund shall be the CCC Stock Fund, through which the Participant may invest up to 25% of current Before-Tax Contributions and Employer Matching Contributions in common 21 stock of CCC Information Services Group Inc. ("CCC Stock"). Any such election shall be made by the Participant giving notice thereof to the Trustee by such notice as the Trustee deems necessary, and such notice shall specify the amount of such funds to be transferred and the Account from which the transfer is to be made. Any such election shall be at the absolute discretion of the Participant and shall be binding upon the Trustee. Upon any such election being made, the amount of such funds to be transferred shall be deducted from his or her Account as appropriate and added to a controlled account of the Participant. All dividends and interest thereafter received with respect to such transferred funds, as well as any appreciation or depreciation in his or her investments shall be added to or deducted from his or her controlled account. (ii) A Participant shall be entitled to direct the Trustee as to the manner in which voting and other rights will be exercised with respect to the shares of CCC Stock allocated to the Participant's Accounts. All Participants whose Accounts include investments in CCC Stock shall be notified within a reasonable time before such rights are to be exercised. Such notification shall include all information distributed by the Employer to shareholders regarding the exercise of such rights. To the extent a Participant fails to provide the Trustee with directions, the Trustee shall abstain from voting or otherwise exercising such rights. The Committee may establish such additional procedures with respect to voting and other rights as it, in its discretion, deems appropriate. (c) Each Participant shall file a written election, in accordance with the procedures that the Committee may prescribe, directing that the amounts allocated to his or her respective Accounts and received by the Trustee shall be invested proportionately in one or more of the Funds in multiples of 1% of each such allocation. Such investment election shall remain in effect for any subsequent allocations to the Participant's Accounts, except that the Participant shall be entitled to change the investment election once each business day for future contributions and forfeitures in a manner and at a time prescribed by the Committee. In the event a Participant fails to file an effective investment election form with the Committee, 100% of the contributions and forfeitures allocated to his or her Accounts shall be invested in a fixed income fund, or such other fund as the Committee shall establish. (d) Each Business Day, in accordance with procedures prescribed by the Committee, a Participant shall also be entitled to elect to change the investment of his or her Accounts from one Fund to any other Fund in multiples of 1% of the balance of such Account in such Fund. 22 (e) Wherever in this Section 6.2 the term "Participant" is used, it shall be deemed to include, where applicable, (i) the Beneficiary of a deceased Participant who is entitled to any portion of the deceased Participant's Accounts, and (ii) an alternate payee under a qualified domestic relations order described in Code Section 414(p). (f) The Plan is intended to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act and Title 29 of Federal Regulations Section 2550.404c-1. To the extent permitted by law, the fiduciary of the Plan shall be relieved of liability for any losses which are the direct and necessary result of investment instructions given by any Participant. 6.3. ALLOCATION PROCEDURE. (a) As of each Valuation Date, the Committee shall: (i) first, allocate the net earnings or losses of the Trust Fund pursuant to Section 6.5; (ii) second, allocate Before-Tax Contributions pursuant to Section 6.6; (iii)third, allocate Employer Matching Contributions pursuant to Section 6.7; (iv) fourth, allocate Rollover Contributions pursuant to Section 5.2. (b) All contributions to the Trust made by or on behalf of a Participant shall be deposited in the form of cash or other acceptable assets in the Trust Fund as soon as practicable and shall be credited to the appropriate Accounts of such Participant as of the Valuation Date received by the Trust Fund; provided that any contributions made with respect to a Plan Year must be credited to the appropriate Accounts of such Participant as of no later than the last day of such Plan Year. All contributions to the Trust shall be credited at the values determined as of the date received by the Trust Fund. 6.4. DETERMINATION OF VALUE OF TRUST FUND AND OF NET EARNINGS OR LOSSES. As of each Valuation Date, the Trustee shall determine for the period then ended the sum of the net earnings or losses of the Trust Fund, which shall reflect accrued but unpaid interest, dividends, gains or losses realized from the sale, exchange or collection of assets, other income received, appreciation or depreciation in the fair market value of assets, administration expenses, and taxes and other expenses paid. Gains or losses realized and adjustments for appreciation or depreciation in fair market value shall be computed with respect to the difference between such value as of the preceding Valuation Date or date of purchase, whichever is later, and the value as of the date of disposition or the current Valuation Date, whichever is earlier. To the extent that 23 any assets of the Trust have been invested in one or more separate investment trusts, mutual funds, investment contracts or similar investment media, the net earnings or losses attributable to such investments shall be determined in accordance with the procedures of such investment media. 6.5. ALLOCATION OF NET EARNINGS OR LOSSES. As of each Valuation Date, the net earnings or losses of each Fund established under Section 6.2 for the day shall be allocated to the Accounts of all Participants (or Beneficiaries of deceased Participants) having credits in the Fund both then and at the beginning of that day. Such allocation shall be in the ratio that (i) the net credits to each Account of each Participant at the beginning of such day, less the total amount of any distributions from such Account to such Participant during that day bears to (ii) the total net credits to all such Accounts of all Participants at the beginning of such day, less the total amount of distributions from all such Accounts to all Participants during such day. Notwithstanding the foregoing, to the extent the assets of the Trust have been invested in one or more separate investment trusts, mutual funds, investment contracts or similar investment media, the net earnings or losses attributable to such investments shall be allocated to the Accounts of Participants or Beneficiaries on the basis of the balances of such Accounts, but in accordance with the procedures of the respective investment media in which such assets are invested. 6.6. ALLOCATION OF BEFORE-TAX CONTRIBUTIONS. As of each Valuation Date, the Before-Tax Contributions received on behalf of each Participant shall be allocated to such Participant's Before-Tax Account in accordance with Section 6.3. 6.7. ALLOCATION OF EMPLOYER MATCHING CONTRIBUTIONS. As of each Valuation Date, the Employer Matching Contribution received on behalf of each Participant shall be allocated to the Matching Account of such Participant in accordance with Section 6.3. 6.8. LIMITATION ON ANNUAL ADDITIONS. (a) The Annual Additions allocated to the Account of a Participant during a Limitation Year shall not exceed the lesser of: (i) 25% of the Participant's Section 415 Compensation for the Limitation Year; or (ii) the Defined Contribution Dollar Limitation for the Limitation Year. Notwithstanding the foregoing, and except to the extent permitted under Section 4.7 of the Plan and Section 414(v) of the Code, effective for Limitation Years beginning after December 31, 2001, the Annual Addition that may be contributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of: (i) 100% of the Participant's Section 415 Compensation for the Limitation Year; or 24 (ii) the Defined Contribution Dollar Limitation for the Limitation Year. For purposes of subsection (i) immediately above, Section 415 Compensation shall not include any contribution for medical benefits after separation from service (within the meaning of Sections 401(h) or 419(A) of the Code) which is otherwise treated as an Annual Addition. (b) If the Annual Addition for a Participant for a Limitation Year exceeds the limitation set forth in Section 6.8(a), the Annual Addition shall be reduced until it equals the maximum permissible Annual Addition for such Participant. The contribution allocable to such Participant's respective Accounts shall be reduced by reducing (A) the Supplemental Before-Tax Contributions and (B) the Matched Before-Tax Contributions and Employer Matching Contributions, proportionately. The Annual Addition remaining after such reductions shall be allocated to the Participant's respective Accounts. (c) Any forfeiture which cannot be allocated under the Plan because of the application of the above limit shall be carried in the Excess Forfeiture Suspense Account for such Plan Year. In the next succeeding Plan Year, the amounts included in such Account shall be treated as a forfeiture for such Plan Year and shall be allocated to the Eligible Participants' Matching Accounts (and as such will be again subject to the limitations of this Section 6.8 for such Plan Year). Amounts which are included in the Excess Forfeiture Suspense Account as of the end of a Plan Year shall be treated as a liability of the Trust Fund. Upon termination of the Plan, amounts then held in the Excess Forfeiture Suspense Account which cannot be allocated pursuant to this Section shall revert to the Employer. (d) Notwithstanding anything to the contrary in this Plan, any Before-Tax Contributions reduced in accordance with subsection (b) above shall be distributed to the Participant with allocable earnings in accordance with Treasury Regulation Section 1.415-6(b)(6)(iv). 25 ARTICLE VII. AMOUNT OF PAYMENTS TO PARTICIPANTS 7.1. GENERAL RULE. (a) Upon the retirement, disability, resignation or dismissal of a Participant, the Participant, or in the event of his or her death, the Participant's Beneficiary, shall be entitled to receive from the Participant's respective Accounts in the Trust Fund the following amounts as of the Valuation Date coinciding with the date distributions are made: (i) the value of the Participant's Before-Tax Account, Pre-1999 Matching Subaccount, and Rollover Account; and (ii) the value of the nonforfeitable portion of his or her Post-1998 Matching Subaccount determined as hereafter set forth; provided that such amounts shall be adjusted to reflect any contributions made by or on behalf of the Participant but not yet included in (i) or (ii) above. (b) The time and manner of distribution of a Participant's Accounts shall be determined in accordance with Article VIII. 7.2. RETIREMENT. Any Participant may retire on or after his or her Normal Retirement Date, at which date the forfeitable portion, if any, of his or her Post-1998 Matching Subaccount shall become nonforfeitable. If the retirement of a Participant is deferred beyond his or her Normal Retirement Date, he/she shall continue in full participation in the Plan and Trust Fund. 7.3. DEATH. As of the date any Participant shall die while in the employ of the Employer or an Affiliate, the forfeitable portion, if any, of his or her Post-1998 Matching Subaccount shall become nonforfeitable. 7.4. DISABILITY. (a) As of the date any Participant shall be determined by the Committee to have become totally and permanently disabled because of physical or mental infirmity while in the employ of the Employer or an Affiliate and his or her employment shall have terminated, the forfeitable portion, if any, of his or her Post-1998 Matching Subaccount shall become nonforfeitable. (b) A Participant shall be deemed totally and permanently disabled when he/she has been determined to be eligible for disability benefits under the Company's Long-Term Disability Plan by reason of such disability. 26 7.5. VESTING. A Participant's interest in his or her Before-Tax Account, Pre-1999 Matching Subaccount and Rollover Account shall be nonforfeitable at all times. A Participant's interest in his or her Post-1998 Matching Subaccount shall be determined under Section 7.6. 7.6. RESIGNATION OR DISMISSAL. (a) If any Participant shall resign or be dismissed from the service of the Employer and all Affiliates on or after January 1, 1999, there shall become nonforfeitable a portion or all of his or her Post-1998 Matching Subaccount determined in accordance with the following schedule, subject to Section 7.7:
Nonforfeitable Years of Service Percentage ---------------- ---------- Less than 1 0% 1 but less than 2 33% 2 but less than 3 67% 3 or more 100%
Notwithstanding anything in the foregoing to the contrary, any Participant with 3 or more Years of Service as of December 31, 1998, shall be 100% vested in his or her Post-1998 Matching Subaccount at all times. (b) Any part of the Post-1998 Matching Subaccount of such Participant which does not become nonforfeitable shall be treated as a forfeiture pursuant to Section 7.8. 7.7. COMPUTATION OF PERIOD OF SERVICE. (a) For purposes of determining the nonforfeitable percentage of the Participant's Post-1998 Matching Subaccount, and subject to all applicable laws and regulations, all Years of Service shall be taken into account, except that the following shall be disregarded: (i) In the case of a Participant whose nonforfeitable balance of his or her Matching Account is 0, Years of Service before a period consisting of 5 consecutive One-Year Breaks in Service, if the number of consecutive One-Year Breaks in Service equals or exceeds the aggregate number of Years of Service before such One-Year Breaks in Service. Such aggregate number of Years of Service before such One-Year Breaks in Service shall not include any Years of Service disregarded by reason of any prior One-Year Breaks in Service. 27 (ii) An Eligible Employee who completes an Eligibility Period which overlaps two calendar years, but fails to complete 1,000 Hours of Service in either of such Plan Years, shall also be credited with one Year of Service with respect to such Eligibility Period. (iii)In the case of a Participant who incurs 5 or more consecutive One-Year Breaks in Service, Years of Service completed after such One-Year Breaks in Service for purposes of determining his or her nonforfeitable right in the balance of his or her Post-1998 Matching Subaccount determined as of the date such One-Year Breaks in Service began. 7.8. TREATMENT OF FORFEITURES. (a) Upon termination of a Participant's employment with the Employer and all Affiliates, that part of his or her Post-1998 Matching Subaccount which becomes a forfeiture pursuant to Section 7.6 shall be applied to reduce the Employer Matching Contribution of such Participant's Employer as of the end of the month in which the termination of employment occurred if the Participant is not then reemployed by the Employer or an Affiliate. Such amounts shall be used first to pay the Plan's administrative expenses in the year in which the forfeiture arises, and then used to reduce the Employer Matching Contributions under Section 4.4. (b) If the Participant is reemployed by the Employer or an Affiliate without incurring 5 consecutive One-Year Breaks in Service and before distribution of the nonforfeitable portion of his or her Post-1998 Matching Subaccount, the amount of the forfeiture (plus any earnings and losses attributable thereto if the Participant did not receive a complete distribution of the Participant's Vested Account) shall be restored to the Participant's Matching Account as of the last day of the month in which he/she is reemployed. (c) If the Participant is reemployed by the Employer or an Affiliate without incurring 5 consecutive One-Year Breaks in Service, but after distribution of the nonforfeitable portion of his or her Matching Account, and if the Participant repays the amount distributed before the earlier of (i) 5 years from the date of such reemployment; or (ii) the end of 5 consecutive One-Year Breaks in Service following the date of such distribution, the amount of the Matching Account distributed to the Participant and the amount of the forfeiture shall be restored to his or her Matching Account as of the last day of the Plan Year in which such repayment is made. 28 (d) Amounts restored to a Participant's Matching Account pursuant to (b) or (c) above shall be deducted from the forfeitures which otherwise would be allocable for the Plan Year in which such reemployment or repayment occurs or, to the extent such forfeitures are insufficient, shall require a supplemental contribution from the Employer. 29 ARTICLE VIII. DISTRIBUTIONS 8.1. COMMENCEMENT AND FORM OF DISTRIBUTIONS. (a) Distribution of a Participant's Accounts in the Trust Fund following termination of employment with the Employer and all Affiliates shall commence on or as soon as practicable after the first to occur of: (i) the date set forth in the Participant's request for distribution; provided that, if (A) the Committee has notified the Participant of the availability of such distribution in a manner that would satisfy the notice requirements of Treasury Regulation Section 1.411(a)-11(c), and (B) such notification is given no more than 90 days prior to the distribution date requested by the Participant. Such distribution may commence less than 30 days after the date the notice required under Treasury Regulation Section 1.411(a)-11(c) is given if: (A) the Committee clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution; and (B) the Participant, after receiving the notice, affirmatively elects a distribution; or (ii) the 60th day after the close of the later of the Plan Year in which the Participant attains age 65 or terminates employment with the Employer and all Affiliates, unless the Participant has elected to defer the distribution to a later date. (b) In all events, distribution shall commence no later than the Required Beginning Date, and subsequent distributions required to be made each year for compliance with Code Section 401(a)(9) and the regulations promulgated thereunder shall be made no later than December 31 of such year. (c) The value of a Participant's Accounts which is distributable to a Participant who has terminated employment with the Employer and all Affiliates for any reason shall be distributed in either of the following ways, as the Participant may request by filing such election form as shall be prescribed by the Committee, and in accordance with applicable laws and regulations (i) by payment in one lump sum; or 30 (ii) substantially equal annual installments over a period not to exceed ten years, which except for the final payment shall not be less than $100; A Participant may change such election under subsection (c)(i) above at any time which is both before his or her Required Beginning Date and before any payment is made from the Plan pursuant to a prior election of the Participant. If no election as to the form of distribution is made, such distribution shall be made in a lump sum payment. In addition, subject to such restrictions and conditions as may be adopted by the Committee, a Participant may change the specified period of his or her quarterly payment election after distributions have commenced. (d) The vested balance of a Participant's Accounts shall be paid to the Participant over a period not to exceed his or her life expectancy or the joint life expectancy of the Participant and his or her Beneficiary. The minimum amount of any installment distribution and determination of the life expectancy of a Participant and the joint life expectancy of a Participant and his or her Beneficiary shall be determined in accordance with the regulations prescribed under Code Section 401(a)(9); provided that the life expectancy of a Participant or his or her spouse shall be redetermined annually. In no event shall the amount distributable in any year be less than the amount determined in accordance with the minimum distribution incidental benefit requirements of Treasury Regulation Section 1.401(a)(9)-2. (e) Notwithstanding anything in this Section 8.1 to the contrary, if a Participant has terminated employment with the Employer and all Affiliates, and if the vested balance of such Participant's Accounts does not exceed $3,500 ($5,000 for Plan Years beginning on and after January 1, 1998) at the time a distribution is to be made from the Plan and distribution pursuant to this Section 8.1 has not otherwise commenced, the Committee shall direct the Trustee to distribute such amount in a lump sum payment to the individual so entitled and the payment thereof shall be in full satisfaction of any liability of the Trust to such individual. Any Participant whose vested balance of his or her Accounts is 0% shall be deemed to have received a lump sum payment upon termination of employment. Notwithstanding the foregoing, and for purposes of applying the provisions of this Section 8.1(e) and Section 12.6(c) of the Plan, for distributions made on or after October 17, 2000, a non-consensual cash-out may occur even if the vested balance of the Participant's Accounts exceeded $5,000 on a prior distribution date. In addition, effective after December 31, 2001, for purposes of 31 determining whether the sum of such Participant's vested Account balances is less than or equal to $5,000 in accordance with this Section 8.1(e) of the Plan, as well as under Section 12.6(c) of the Plan, the balance of the Participant's Rollover Account (and earnings allocated thereto) shall be disregarded. If the sum of the Participant's vested Account balances is less than or equal to $5,000 without regard to the balance of his or her Rollover Account (and earnings allocated thereto), the Plan Committee shall direct the Trustee to distribute the Participant's vested Account balance in a lump sum (in cash) without the consent of the Participant (or Beneficiary) in accordance with this Section 8.1(e) of the Plan. A Participant may request by filing such notice as shall be prescribed by the Committee, and in accordance with applicable laws and regulations, a direct rollover of such single sum distribution to an employee's trust in which he/she is a participant, which is described in Code Section 401(a) and which is exempt from tax under Code Section 501(a), or to an individual retirement arrangement described in Code Section 408 in accordance with Section 8.11. (f) Notwithstanding anything in this Section 8.1 to the contrary, if the amount of any distribution required to commence on a certain date cannot be ascertained by such date, a payment retroactive to such date may be made no later than 60 days after the earliest date on which such amount can be ascertained. 8.2. DISTRIBUTIONS TO BENEFICIARIES. (a) (i) If a Participant should die before benefit payments have commenced, the balance of the deceased Participant's Accounts which is distributable to a Beneficiary shall be distributed to such Beneficiary in one lump sum amount, as soon as practicable after the Participant's death, but in no event later than the December 31 coinciding with or next following the 5th anniversary of the Participant's death; provided, however, that if the Beneficiary is the Participant's spouse, such spouse may elect a direct rollover to an individual retirement arrangement described in Code Section 408, in accordance with Section 8.11. (ii) If a Participant should die after commencement of his or her benefit under Section 8.1(c)(ii), the Participant's Beneficiary may elect to receive the remaining balance in the Participant's Accounts in a lump sum amount; provided, however, that if the Beneficiary is the Participant's surviving spouse, such Beneficiary may also elect (A) to receive installments over any period which is at least as rapid as the method of distribution in effect at the time of the 32 Participant's death or (B) a direct rollover to an individual retirement arrangement described in Code Section 408, in accordance with Section 8.11. (b) In the event that the distribution of the Participant's Accounts has begun in accordance with Section 8.1(c)(ii), any form of distribution to a Beneficiary under this Article VIII shall be designed to distribute the balance of the deceased Participant's Accounts at least as rapidly as under the method of distribution in effect at the time of the Participant's death. (c) If a Beneficiary to whom payments have commenced dies prior to receipt of all such payments, the remaining balance of the Participant's Accounts shall be distributed to any contingent or successor Beneficiary at least as rapidly as under the method of distribution in effect at the time of the Beneficiary's death, or if there is no such contingent or successor Beneficiary, in a lump sum to the deceased Beneficiary's estate. (d) The life expectancy of a Beneficiary who is the surviving spouse of the Participant shall be redetermined annually in accordance with regulations prescribed under Code Section 401(a)(9). (e) Notwithstanding anything contained herein to the contrary, with respect to distributions under the Plan made in Plan Years beginning on and after January 1, 2001, the Plan will apply the minimum distribution requirements of Section 401(a)(9) of the Code in accordance with the regulations under Section 401(a)(9) that were proposed on January 17, 2001, until the end of the last Plan Year before the effective date of final regulations issued or such other date specified in guidance provided by the Internal Revenue Service. 8.3. BENEFICIARIES. (a) The balance of a deceased Participant's Accounts shall be distributed to the persons effectively designated by the Participant as his or her Beneficiaries. To be effective, the designation shall be filed in such written form as the Committee requires and in such manner as the Committee may prescribe, and may include contingent or successive Beneficiaries; provided that any designation by a Participant who is married at the time of his or her death or, if earlier, the date his or her benefit payments commence, which fails to name the Participant's surviving spouse as the sole primary Beneficiary, shall not be effective unless such surviving spouse has consented to the designation in writing, witnessed by a Plan representative or notary public, acknowledging the effect of the designation and the specific non-spouse Beneficiary, including any class of Beneficiaries or any contingent Beneficiary. Such consent shall not be required if, at the time of filing such designation, the 33 Participant established to the satisfaction of the Committee that the consent of the Participant's spouse could not be obtained because there is no spouse, such spouse could not be located or by reason of such other circumstances as may be prescribed by regulations. Any consent (or establishment that the consent could not be obtained) shall be effective only with respect to such spouse. Any Participant may change his or her beneficiary designation at any time by filing with the Committee a new beneficiary designation (with such spousal consent as may be required). Notwithstanding the foregoing, designation of a Beneficiary by a Participant who did not have an Hour of Service after August 22, 1984, shall not require the consent of his or her surviving spouse to be effective. (b) If a Participant dies, and to the knowledge of the Committee after reasonable inquiry leaves no surviving spouse, has not filed an effective beneficiary designation or has revoked all such designations, or has filed an effective designation but the Beneficiary or Beneficiaries predeceased him/her, the distributable portion of the Participant's Accounts shall be paid to the executor or administrator of the Participant's estate. (i) If the Beneficiary, having survived the Participant, shall die prior to the final and complete distribution of the Participant's Accounts, then the distributable portion of said Accounts shall be paid: (A) to the contingent or successive Beneficiary named in the most recent effective Beneficiary designation filed by the Participant in accordance with such designation; or (B) if no such Beneficiary has been named, to the executor or administrator of the Beneficiary's estate. 8.4. INSTALLMENT OR DEFERRED DISTRIBUTIONS. If distribution is made to a Participant or to the Beneficiary of a deceased Participant in installments or is deferred, the undistributed vested balance shall share in the net earnings or losses (including the net adjustments in the value of the Trust Fund) as provided in Section 6.5. 8.5. FORM OF ELECTIONS AND APPLICATIONS FOR BENEFITS. Any election, revocation of an election or application for benefits pursuant to the Plan shall not be effective unless it is (a) made on such form, if any, as the Committee may prescribe for such purpose; (b) signed by the Participant and, if required by Section 8.3, by the Participant's spouse; and (c) filed with the Committee. 8.6. UNCLAIMED DISTRIBUTIONS. In the event any distribution cannot be made because the person entitled thereto cannot be located and the distribution remains unclaimed for 2 years after the distribution date established by the Committee, then such amount shall be treated as a forfeiture and shall be used to reduce the Employer Matching Contribution. In the event such 34 person subsequently files a valid claim for such amount, such amount shall be restored to the Participant's Accounts in a manner similar to the restoration of forfeitures under Section 7.8. 8.7. IN-SERVICE WITHDRAWALS. (a) A Participant who has attained his or her Normal Retirement Age may make a withdrawal of the nonforfeitable portion of his or her Accounts without any restrictions or limitations, except that such withdrawal shall not reduce the nonforfeitable value of the Participant's Accounts below the amount of any loans outstanding to such Participant pursuant to Section 8.8. (b) A Participant who has not attained his or her Normal Retirement Age may not make a withdrawal from his or her Matching Account. (c) A Participant who has attained age 59 1/2 may make a withdrawal from his or her Before-Tax Account without any restrictions or limitations, except that such withdrawal shall not reduce the nonforfeitable value of the Participant's Accounts below the amount of any loans outstanding to such Participant pursuant to Section 8.8. (d) A Participant who has not reached the age of 59 1/2 may make a withdrawal of amounts in his or her Before-Tax Account only upon furnishing proof to the Committee of immediate and heavy financial hardship. In addition, except as may otherwise be permitted by the Committee on a uniform and nondiscriminatory basis, such withdrawal shall not reduce the nonforfeitable value of the Participant's Accounts below the amount of any loans outstanding to such Participant pursuant to Section 8.8. The Committee shall only make a determination of financial hardship if the distribution to be made is made on account of an immediate and heavy financial need of the Participant, and the funds distributed are necessary to satisfy the Participant's need. The amount of the distribution shall not be in excess of the immediate and heavy financial need of the Participant, taking into account any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution. (i) The determination of whether a Participant has an immediate and heavy financial need is to be made by the Committee on the basis of all relevant facts and circumstances. Only the following expenses shall be deemed to constitute an immediate and heavy financial need: (A) expenses for medical care (as described in Code Section 213(d)) incurred by the Participant, the Participant's spouse or any dependents of the Participant (as defined in Code 35 Section 152) or necessary for these persons to obtain such care; (B) the purchase (excluding mortgage payments) of a Participant's principal residence; (C) tuition and related educational fees for the next 12 months of post-secondary education for the Participant, the Participant's spouse, children or dependents; (D) preventing foreclosure on or eviction from the Participant's principal residence; (E) any other event or expense deemed an immediate and heavy financial need by the Internal Revenue Service. (ii) The determination of whether a distribution is necessary to satisfy the immediate and heavy financial need of the Participant shall be made by the Committee on the basis of all relevant facts and circumstances. The Committee shall determine that a distribution is necessary to satisfy the financial need if the Participant demonstrates to the satisfaction of the Committee that all of the following requirements are satisfied: (A) the distribution is not in excess of the amount of the immediate and heavy financial need of the Participant, taking into account any amount necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution; (B) the Participant has obtained all distributions (other than hardship distributions) and all nontaxable loans currently available under all of the plans maintained by the Employer or any Affiliate; (C) the Participant will not make any contributions to any retirement plan (other than mandatory employee contributions to a defined benefit plan) maintained by the Employer or any Affiliate for 12 months after receiving the hardship distribution, and the Participant may not make any contributions to this Plan until the January 1 coinciding with or next following the first anniversary of the date on which the Participant received the hardship distribution; and 36 (D) the Participant's Before-Tax Contributions to this Plan and to all plans maintained by the Employer and any Affiliate, in the calendar year following the calendar year of the hardship distribution, do not exceed the limitation in Code Section 402(g)(1) applicable to such following calendar year, minus the amount of his or her Before-Tax Contributions for the calendar year of the hardship distribution. Notwithstanding the provisions in Section 8.7(d)(ii)(C), a Participant who receives a hardship withdrawal after December 31, 2001, under Section 8.7 of the Plan shall have his or her contributions suspended for 6 months beginning on the date as of which he or she receives the hardship withdrawal. In addition, for Plan Years beginning after December 31, 2001, the limitation set forth in Section 8.7(d)(ii)(D) shall no longer be effective. (iii)Withdrawals on account of financial hardship shall not exceed the lesser of: (A) The amount of the immediate and heavy financial need; (B) The value of the Participant's Before-Tax Account at the time of the distribution; and (C) (I) the value of the Participant's Before-Tax Account as of December 31, 1988, plus the Participant's Before-Tax Contributions made on or after January 1, 1989, reduced by (II) the aggregate amount distributed on or after January 1, 1989. 8.8. LOANS. (a) Upon the submission by the Participant of a loan application form as prescribed by the Committee, a Participant may borrow from the Trust, in accordance with the procedures established by the Committee, under such uniform rules as it shall adopt, an amount no less than $1,000 and not in excess of 50% of his or her vested Accounts (as of the Valuation Date coinciding with the date such loan is granted); provided, however, that the amount of such loan shall not exceed $50,000, reduced by the greater of (i) the highest outstanding balance of loans from the Trust Fund during the 1-year period ending on the date before the date on which such loan is made or modified, or (ii) the outstanding balance of loans from the Trust Fund on the date on which such loan is made or modified. 37 (b) Loans shall be made available on a reasonably equivalent basis to each Participant or Beneficiary who has vested Account benefits and who either (i) is an Eligible Employee, or (ii) the Committee determines is a "party in interest" as such term is defined in Section 3(14) of ERISA, so long as the making of such loan does not discriminate in favor of highly compensated employees (as defined by Code Section 414(q)). (c) Loans shall be made on such terms as the Committee may prescribe, provided that any such loan shall be evidenced by a note or such documents as the Committee, in its sole discretion, shall determine under uniform rules prescribed by it, shall bear interest on the unpaid balance thereof at one percentage point above and shall be secured by the Participant's Segregated Loan Account. (d) Loans shall be repaid by the Participant by payroll deductions or any other method approved by the Committee which requires level amortization of principal and repayments not less frequently than quarterly. All loans, except those made for the purchase of a primary residence, shall be repaid over a period not to exceed 5 years in accordance with procedures established by the Committee from time to time. (e) Loans shall be an asset of the Participant's Accounts, shall be treated in the manner of a segregated account and shall be subject to the provisions of Section 6.1(b). Upon the failure of a Participant to make loan payments or some other event of default set forth in the promissory note, upon the Participant's termination of employment, or upon termination of the Plan pursuant to Section 12.2, such loan shall become due and payable, and the unpaid balance of such loan, including any unpaid interest, may in the Committee's discretion be charged against the Participant's Segregated Loan Account; provided that any unpaid balance of such loan, including any unpaid interest, shall be charged against the Participant's Segregated Loan Account before any distribution to the Participant. (f) Loan repayments will be suspended under the Plan as permitted under Code Section 414(u) during periods of military service. 8.9. FACILITY OF PAYMENT. When, in the Committee's opinion, a Participant or Beneficiary is under a legal disability or is incapacitated in any way so as to be unable to manage his or her affairs, the Committee may direct the Trustee to make payments: (a) directly to the Participant or Beneficiary; (b) to a duly appointed guardian or conservator of the Participant or Beneficiary; 38 (c) to a custodian for the Participant or Beneficiary under the Uniform Gifts to Minors Act; (d) to an adult relative of the Participant or Beneficiary; or (e) directly for the benefit of the Participant or Beneficiary. Any such payment shall constitute a complete discharge therefor with respect to the Trustee and the Committee. 8.10. CLAIMS PROCEDURE. (a) Any person who believes that he or she is then entitled to receive a benefit under the Plan, including one greater than that initially determined by the Committee, may file a claim in writing with the Committee. (b) The Committee shall within 90 days of the receipt of a claim either allow or deny the claim in writing. A denial of benefits shall be written in a manner calculated to be understood by the claimant and shall include: (i) the specific reason or reasons for the denial; (ii) specific references to pertinent Plan provisions on which the denial is based; (iii)a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the Plan's claim review procedure. (c) A claimant whose claim is denied (or the claimant's duly authorized representative) may, within 60 days after receipt of denial of his or her claim: (i) submit a written request for review to the Committee; (ii) review pertinent documents; and (iii)submit issues and comments in writing. (d) The Committee shall notify the claimant of its decision on review within 60 days of receipt of a request for review. The decision on review shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. 39 (e) The 90-day and 60-day periods described in subsections (b) and (d), respectively, may be extended at the discretion of the Committee for a second 90- or 60-day period, as the case may be, provided that written notice of the extension is furnished to the claimant prior to the termination of the initial period, indicating the special circumstances requiring such extension of time and the date by which a final decision is expected. (f) Participants and Beneficiaries shall not be entitled to challenge the Committee's determinations in judicial or administrative proceedings without first complying with the procedures in this Article. The Committee's decisions made pursuant to this Section are intended to be final and binding on Participants, Beneficiaries and others. 8.11. ELIGIBLE ROLLOVER DISTRIBUTIONS. (a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Article VIII, a distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (b) Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); any 401(k) hardship withdrawal; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (c) Eligible retirement plan: An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee's eligible rollover distribution. Effective January 1, 2002, an eligible retirement plan should also include an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from the Plan. However, in the case of an eligible rollover distribution to a surviving spouse prior to January 1, 40 2002, an eligible retirement plan is an individual retirement account or individual retirement annuity only. (d) Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse. (e) Direct rollover: A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. 41 ARTICLE IX. TOP-HEAVY PLAN REQUIREMENTS 9.1. DEFINITIONS. For purposes of this Article IX: (a) A "Key Employee" is any current or former employee (and the beneficiaries of such employee) who at any time during the Determination Period was an officer of the Employer or an Affiliate if such individual's annual compensation exceeds 50% of the Defined Benefit Dollar Limitation, an owner (or considered an owner under Code Section 318) of one of the 10 largest interests in the Employer if such individual's compensation exceeds 100% of the Defined Contribution Dollar Limitation, a Five-Percent Owner, or a One-Percent Owner of the Employer who has an annual compensation of more than $150,000. Annual compensation means Section 415 Compensation plus amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the employee's gross income under Code Section 125, 402(e)(3), 402(h), 132(f) or 403(b). The "Determination Period" is the Plan Year containing the Top-Heavy Determination Date and the four preceding Plan Years. Notwithstanding the foregoing, effective for Plan Years beginning after December 31, 2001, "Key Employee" means any employee or former employee (including any deceased employee) who at any time during the Determination Period was (i) an officer of an Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i) of the Code for Plan Years beginning after December 31, 2002), (ii) a 5% owner of an Employer, or (iii) a 1% owner of an Employer having annual compensation of more than $150,000. Effective for Plan Years beginning after December 31, 2001, the Determination Period is the current Plan Year. The determination of who is a Key Employee will be made in accordance with Code Section 416(i)(1) and the regulations thereunder. (b) For any Plan Year beginning after December 31, 1983, this Plan is "Top-Heavy" if any of the following conditions exists: (i) The Top-Heavy Ratio for this Plan exceeds 60% and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans; (ii) This Plan is a part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans exceeds 60%; 42 (iii)This Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%. (c) The "Top-Heavy Ratio" shall be determined as follows: (i) If the Employer maintains one or more defined contribution plans and the Employer has not maintained any defined benefit plan that, during the 5-year period ending on the Top-Heavy Determination Date(s), has or has had accrued benefits, the Top-Heavy Ratio for this Plan alone or for the Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Top-Heavy Determination Date(s) (including any part of any account balance distributed in the 5-year period ending on the Top-Heavy Determination Date(s)), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 5-year period ending on the Top-Heavy Determination Date(s)), both computed in accordance with Code Section 416 and the regulations thereunder. Both the numerator and denominator of the Top-Heavy Ratio are increased to reflect any contribution not actually made as of the Top-Heavy Determination Date, but which is required to be taken into account on that date under Code Section 416 and the regulations thereunder. (ii) If the Employer maintains one or more defined contribution plans and the Employer maintains or has maintained one or more defined benefit plans that, during the 5-year period ending on the Top-Heavy Determination Date(s), has or has had any accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with (i) above, and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Top-Heavy Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Participants, determined in accordance with (i) above, and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Participants as of the Top-Heavy Determination Date(s), all determined in accordance with Code Section 416 and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top-Heavy Ratio are increased for any 43 distribution of an accrued benefit made in the 5-year period ending on the Top-Heavy Determination Date. (iii)For purposes of (i) and (ii) above, the value of account balances and the Present Value of accrued benefits will be determined as of the most recent valuation date that falls within or ends with the 12-month period ending on the Top-Heavy Determination Date, except as provided in Code Section 416 and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a Participant (A) who is not a Key Employee but who was a Key Employee in a prior year, or (B) who has not been credited with at least one hour of service with any employer maintaining the Plan at any time during the 5-year period ending on the Top-Heavy Determination Date will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account, will be made in accordance with Code Section 416 and the regulations thereunder. Deductible employee contributions will not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the Top-Heavy Determination Date(s) that fall within the same calendar year. The accrued benefit of a Participant other than a Key Employee shall be determined under (1) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or (2) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Code Section 411(b)(1)(C). (iv) Notwithstanding any provision of this Section 9.1(c) to the contrary, this subsection (iv) shall apply for purposes of determining the amounts of account balances of employees as of the Top-Heavy Determination Date, effective for Plan Years beginning after December 31, 2001. (A) DISTRIBUTIONS DURING YEAR ENDING ON THE DETERMINATION DATE. The amounts of account balances of a Key Employee as of the Top-Heavy Determination Date shall be increased by the distributions made with respect to the employee under the Plan and any plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1-year period ending on the Top-Heavy Determination Date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 44 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than a severance from service, death or disability, this provision shall be applied by substituting a 5-year period for a 1-year period. (B) EMPLOYEES NOT PERFORMING SERVICES DURING YEAR ENDING ON THE DETERMINATION DATE. The accounts of any individual who has not performed services for an Employer during the 1-year period ending on the Top-Heavy Determination Date shall not be taken into account. (d) "Permissive Aggregation Group" means the Required Aggregation Group of plans plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code Sections 401(a)(4) and 410. (e) "Required Aggregation Group" means (i) each qualified plan of the Employer in which at least one Key Employee participates or participated at any time during the Determination Period (regardless of whether the plan has terminated), and (ii) any other qualified plan of the Employer which enables a plan described in (i) to meet the requirements of Code Section 401(a)(4) or 410. Notwithstanding the foregoing, effective for Plan Years beginning after December 31, 2001, the Required Aggregation Group shall exclude qualified plans that consist solely of a safe harbor cash or deferred arrangement under Code Section 401(k)(12) and safe harbor matching contributions under Code Section 401(m)(11). (f) "Top-Heavy Determination Date" means the first Plan Year, the last day of the preceding Plan Year or, for the first Plan Year of the Plan, the last day of that year. (g) "Present Value" shall be based on the interest assumption and post-retirement mortality assumption specified in the defined benefit plan. (h) "Employer" means the Employer and all Affiliates except for purposes of determining ownership under Code Section 416(i)(1). 9.2. TOP-HEAVY PLAN REQUIREMENTS. (a) Except as otherwise provided in (ii) and (iii) below, the Employer contributions and forfeitures allocated on behalf of any Participant who is not a Key Employee shall not be less than the lesser of five percent of such Participant's Section 415 Compensation, as limited by Code Section 401(a)(17), or in the case where the Employer has no defined benefit plan 45 which designates this Plan to satisfy Code Section 401, the largest percentage of Employer contributions and forfeitures, as a percentage of any Key Employee's Section 415 Compensation, as limited by Code Section 401(a)(17), allocated on behalf of any Key Employee for that year. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (A) the Participant's failure to complete 1,000 Hours of Service (or any equivalent provided in the Plan), (B) the Participant's failure to make mandatory employee contributions to the Plan, or (C) Section 415 Compensation less than a stated amount. Effective for Plan Years after December 31, 2001, Employer Matching Contributions shall be taken into account for purposes of satisfying the minimum allocation requirements of Section 416(c)(2) of the Code and Section 9.2 of the Plan. The preceding sentence shall apply with respect to Employer Matching Contributions under the Plan or, if under subsection (iii) immediately below, the minimum allocation requirement shall be met in another plan, such other plan. Employer Matching Contributions that are used to satisfy the minimum allocation requirements shall be treated as Employer Matching Contributions for purposes of the Contribution Percentage Test and other requirements of Section 401(m) of the Code and Section 4.5 of the Plan. (i) The provision in (a) above shall not apply to any Participant who was not employed by the Employer or an Affiliate on the last day of the Plan Year. (ii) The provision in (a) above shall not apply to any Participant to the extent the Participant is covered under any other plan or plans of the Employer and the Employer's contribution and forfeitures allocated under such plan or plans are equal to or exceed the amount required to be allocated under (a) above. (b) The minimum allocation required (to the extent required to be nonforfeitable under Code Section 416(b)) may not be forfeited under Code Section 411(a)(3)(B) or 411(a)(3)(D). 46 ARTICLE X. POWERS AND DUTIES OF PLAN COMMITTEE 10.1. APPOINTMENT OF PLAN COMMITTEE. (a) The Board of Directors of the Company (the "Board of Directors") or its duly authorized designee shall name a Plan Committee (the "Committee") to consist of not less than 3 persons to serve as administrator and a named fiduciary of the Plan. Any person, including directors, shareholders, officers, and employees of the Employer, shall be eligible to serve on the Committee. Every person appointed as a member of the Committee shall signify his or her acceptance in writing to the Board of Directors or its duly authorized designee. (b) Members of the Committee shall serve at the pleasure of the Board of Directors or its designee and may be removed by the Board of Directors or its designee at any time with or without cause. Any member of the Committee may resign by delivering his or her written resignation to the Board of Directors or its designee, and such resignation shall become effective at delivery or at any later date specified therein. Vacancies in the Committee shall be filled by the Board of Directors or its designee. (c) Usual and reasonable expenses of the Committee shall be paid by the Trustee out of the principal or income of the Trust Fund except to the extent the Employer agrees to pay such expenses in whole or in part. The members of the Committee shall not receive any compensation for their services as such. 10.2. POWERS AND DUTIES OF COMMITTEE. Except as otherwise provided in this Article X, the Committee shall have final and binding discretionary authority to control and manage the operation and administration of the Plan, including all rights and powers necessary or convenient to the carrying out of its functions hereunder, whether or not such rights and powers are specifically enumerated herein. In exercising its responsibilities hereunder, the Committee may manage and administer the Plan through the use of agents who may include employees of the Employer. Without limiting the generality of the foregoing, and in addition to the other powers set forth in this Article X, the Committee shall have the following discretionary authorities: (a) To construe and interpret the Plan, decide all questions of eligibility, and determine the amount, manner, and time of payment of any benefits hereunder; (b) To prescribe procedures to be followed by Participants or Beneficiaries filing applications for benefits; 47 (c) To prepare and distribute, in such manner as the Committee determines to be appropriate, information explaining the Plan; (d) To request and receive from the Employer, Participants, and others such information as shall be necessary for the proper administration of the Plan; (e) To furnish to the Employer, upon request, such annual and other reports with respect to the administration of the Plan as are reasonable and appropriate; (f) To review the performance of the Trustee and any Investment Manager of the Trust Fund; (g) To establish investment guidelines and objectives for the Trustee or any Investment Manager; (h) To appoint one or more Investment Managers to manage any assets of the Plan and to remove any such Investment Managers in accordance with Section 10.7(c); (i) To appoint one or more trustees; (j) To review Trustee records of the Participant loans and to maintain, in addition, accurate records of such loans internally; (k) To receive, review, and retain (as it deems convenient or proper) reports of the investments and the receipts and disbursements of the Trust Fund from the Trustee and/or any Investment Managers; and (l) To add or delete investment Funds under Section 6.2. 10.3. COMMITTEE PROCEDURES. (a) The Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs. (b) A majority of the members of the Committee at the time in office shall constitute a quorum for the transaction of business. All resolutions or other actions taken by the Committee at any meeting shall be by the vote of the majority of the members of the Committee present at the meeting. The Committee may act without a meeting by written consent of a majority of its members. (c) The Committee may elect one of its members as chairman and shall appoint a secretary, who may or may not be a Committee member, and shall advise the Trustee and the Employer of such actions in writing. The 48 secretary shall keep a record of all actions of the Committee and shall forward all necessary communications to the Employer or the Trustee. (d) Filing or delivery of any document with or to the secretary of the Committee in person or by registered or certified mail, addressed in care of the Company, is deemed a filing with or delivery to the Committee. 10.4. CONSULTATION WITH ADVISORS. The Committee (or any fiduciary designated by a Committee pursuant to Section 10.8) may employ or consult with counsel, actuaries, accountants, physicians or other advisors (who may be counsel, actuaries, accountants, physicians or other advisors for the Employer). 10.5. COMMITTEE MEMBERS AS PARTICIPANTS. The Committee member may also be a Participant, but no Committee member shall have power to take part in any discretionary decision or action affecting his or her own interest as a Participant under this Plan unless such decision or action is upon a matter which affects all other Participants similarly situated and confers no special right, benefit or privilege not simultaneously conferred upon all other such Participants. 10.6. RECORDS AND REPORTS. The Committee shall take all such action as it deems necessary or appropriate to comply with governmental laws and regulations relating to the maintenance of records, notifications to Participants, registrations with the Internal Revenue Service, reports to the U.S. Department of Labor and all other requirements applicable to the Plan. 10.7. INVESTMENT POLICY. (a) The Committee from time to time shall determine the type of investment options to be held in the Plan. The Committee shall determine the investment Funds, as well as the Plan's short-term and long-term financial needs, with which the investment policy of the Trust shall be appropriately coordinated, and such needs shall be communicated from time to time to the Trustee, Investment Managers or others having any responsibility for management and control of the Trust assets. (b) Subject to the provisions of Section 6.2 and to (c) below, the Trustee shall have exclusive authority and discretion to manage and control the assets of the Trust pursuant to an investment policy coordinated with the needs of the Plan as determined by the Committee. (c) The Committee may in its discretion appoint itself or one or more Investment Managers to manage (including the power to acquire and dispose of) any assets of the Plan pursuant to an investment policy coordinated with the needs of the Plan as determined by the Committee, in which event the Trustee shall not be liable for the acts or omissions of the Committee or any such Investment Manager or be under an obligation to 49 invest or otherwise manage any asset of the Plan which is subject to the management of the Committee or any such Investment Manager except as directed. Any such Investment Manager shall acknowledge in writing that he/she is a fiduciary with respect to the Plan. (d) The term "Investment Manager" shall mean: (i) a registered investment adviser under the Investment Advisers Act of 1940; (ii) a bank as defined in the Investment Advisers Act of 1940; or (iii) an insurance company qualified under the laws of more than one state to manage, acquire and dispose of plan assets. 10.8. DESIGNATION OF OTHER FIDUCIARIES. The Committee may designate in writing other persons to carry out a specified part or parts of its responsibilities hereunder (including the power to designate other persons to carry out a part of such designated responsibility), but not including the power to appoint Investment Managers. Any such designation shall be accepted by the designated person, who shall acknowledge in writing that he/she is a fiduciary with respect to the Plan. 10.9. OBLIGATIONS OF COMMITTEE. (a) The Committee or its properly authorized delegate shall make such determinations as are necessary to accomplish the purposes of the Plan with respect to individual Participants or classes of such Participants. The Employer shall notify the Committee of facts relevant to such determinations, including, without limitation, length of service, compensation for services, dates of death, permanent disability, granting or terminating of leaves of absence, ages, retirement and termination of service for any reason (but indicating such reason), and termination of participation. The Employer shall also be responsible for notifying the Committee of any other facts which may be necessary for the Committee to discharge its responsibilities hereunder. (b) The Committee is hereby authorized to act solely upon the basis of such notifications from the Employer and to rely upon any document or signature believed by the Committee to be genuine and shall be fully protected in so doing. For the purpose of this Section, a letter or other written instrument signed in the name of the Employer by any officer thereof shall constitute a notification therefrom; except that any action by the Company or its Board of Directors with respect to the appointment or removal of a member of a Committee or the amendment of the Plan and Trust or the designation of a group of employees to which the Plan is applicable shall be evidenced by an instrument in writing, signed by a duly authorized officer or officers, certifying that said action has been authorized and directed by a resolution of the Board of Directors of the Company. 50 (c) The Committee shall notify the Trustee of its actions and determinations affecting the responsibilities of the Trustee and shall give the Trustee directions as to payments or other distributions from the Trust Fund to the extent they may be necessary for the Trustee to fulfill the terms of the Trust Agreement. (d) The Committee shall be under no obligation to enforce payment of contributions hereunder or to determine whether contributions delivered to the Trustee comply with the provisions hereof relating to contributions, and is obligated only to administer this Plan pursuant to the terms hereof. 10.10. INDEMNIFICATION OF THE COMMITTEE. The Company shall indemnify the Committee, members of the Committee, and their authorized delegates who are employees of the Employer for any liability or expenses, including attorneys' fees, incurred in the defense of any threatened or pending action, suit or proceeding by reason of their status as members of the Committee or its authorized delegates, to the full extent permitted by the law of the Company's state of incorporation. 51 ARTICLE XI. TRUSTEE AND TRUST FUND 11.1. TRUST FUND. A Trust Fund to be known as the CCC Information Services Inc. 401(k) Retirement Savings & Investment Trust (herein referred to as the "Trust" or the "Trust Fund") has been established by the execution of a trust agreement with one or more Trustees and is maintained for the purposes of this Plan and other qualified plans of the Company and its Affiliates. The assets of the Trust will be held, invested, and disposed of by the Trustee, in accordance with the terms of the Trust, for the benefit of the Participants and their Beneficiaries. 11.2. PAYMENTS TO TRUST FUND AND EXPENSES. All contributions hereunder will be paid into and credited to the Trust Fund and all benefits hereunder and expenses chargeable thereto will be paid from the Trust Fund and charged thereto. 11.3. TRUSTEE'S RESPONSIBILITIES. The powers, duties, and responsibilities of the Trustee shall be as set forth in the Trust Agreement and nothing contained in this Plan, either expressly or by implication, shall impose any additional powers, duties or responsibilities upon the Trustee. 11.4. REVERSION TO AN EMPLOYER. An Employer has no beneficial interest in the Trust Fund and no part of the Trust Fund shall ever revert or be repaid to an Employer, directly or indirectly, except that an Employer shall, upon written request, have a right to recover: (a) within one year of the date of payment of a contribution by such Employer, any amount (less any losses attributable thereto) contributed through a mistake of fact; (b) within one year of the date on which any deduction for a contribution by such Employer under Code Section 404 is disallowed, an amount equal to the amount disallowed (less any losses attributable thereto); and (c) at the termination of the Plan, any amounts with respect to its employees remaining in the Excess Forfeiture Suspense Account. 11.5. ALLOCATION OF ASSETS. The Trust Fund may also include assets attributable to contributions made by the Company and its Affiliates to fund other defined contribution plans maintained by the Company and its Affiliates. In this event, separate accounting for assets in the Trust Fund shall be kept by the Company and Trustee so that the value of assets attributable to the Plan is readily ascertainable. 52 ARTICLE XII. AMENDMENT OR TERMINATION 12.1. AMENDMENT. While it is intended that the Plan shall continue in effect indefinitely, the Company reserves the right at any time or from time to time to modify or amend the Plan or to discontinue contributions thereto. 12.2. TERMINATION. The Company reserves the right to terminate this Plan at any time. 12.3. FORM OF AMENDMENT, DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS, AND TERMINATION. Any amendment, discontinuance of Employer contributions or termination shall be made only by resolution of the Board of Directors of the Company or by any person so duly authorized by the Board of Directors. 12.4. LIMITATIONS ON AMENDMENTS. The provisions of this Article are subject to the following restrictions: (a) Except as provided in Section 11.4, no amendment shall operate either directly or indirectly to give the Employer any interest whatsoever in any funds or property held by the Trustee under the terms hereof, or to permit corpus or income of the Trust to be used for or diverted to purposes other than the exclusive benefit of the Participants and their Beneficiaries. (b) Except to the extent necessary to conform to the laws and regulations or to the extent permitted by any applicable law or regulation, no amendment shall operate either directly or indirectly to deprive any Participant of his or her nonforfeitable beneficial interest in his or her Accounts as of the date of the amendment. (c) No amendment shall change any vesting schedule unless each Participant who has completed 3 or more Years of Service is permitted to elect to have the nonforfeitable percentage of his or her Matching Account computed under the Plan without regard to such amendment. The period for making such election shall commence no later than the date of the adoption of such amendment and shall expire no earlier than 60 days after the latest of the following dates: (i) the date the Plan amendment is adopted, (ii) the date the Plan amendment becomes effective, or (iii) the date the Participant is issued written notice of the Plan amendment by the Committee. Notwithstanding the foregoing, no election need be offered to a Participant whose nonforfeitable percentage of his or her Matching Account cannot at any time be lower than such percentage determined without regard to such amendment. (d) Except as permitted by applicable law, no amendment shall eliminate or reduce an early retirement benefit or a retirement-type subsidy or eliminate an optional form of benefit. 53 12.5. LEVEL OF BENEFITS UPON MERGER. This Plan shall not merge or consolidate with, or transfer assets or liabilities to, any other plan, unless each Participant shall be entitled to receive a benefit immediately after said merger, consolidation or transfer (if such other plan were then terminated) which shall be not less than the benefit he/she would have been entitled to receive immediately before said merger, consolidation or transfer (if this Plan were then terminated). 12.6. VESTING UPON TERMINATION OR DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS; LIQUIDATION OF TRUST. (a) This Plan shall be deemed terminated if and only if the Plan terminates by operation of law or pursuant to Section 12.2. In the event of any termination or partial termination within the meaning of the Code, or in the event the Employer permanently discontinues the making of contributions to the Plan, the Matching Account of each affected Participant who is employed by the Employer on the date of the occurrence of such event shall be nonforfeitable; provided, however, that in no event shall any Participant or Beneficiary have recourse to other than the Trust Fund for the satisfaction of benefits hereunder. (b) In the event the Employer permanently discontinues the making of contributions to the Plan, the Trustee shall make or commence distribution, to each Participant or his or her Beneficiaries, of the value of such Participant's Accounts as provided herein within the time prescribed in Article VII. However, if, after such discontinuance, the Company shall determine it to be impracticable to continue the Trust any longer, the Company may, in its discretion, declare the date of termination of the Plan to be the Valuation Date for all Participants for whom a Valuation Date has not yet occurred. Such date shall also constitute the final distribution date for each Participant or Beneficiary whose Accounts are being distributed in installments. (c) The liquidation of the Trust, if any, in connection with any Plan termination shall be accomplished by the Committee acting on behalf of the Company. After directing that sufficient funds be set aside to provide for the payment of all expenses incurred in the administration of the Plan and the Trust, to the extent not paid or provided for by the Employer, the Committee shall, as promptly as shall then be reasonable under the circumstances, liquidate the Trust assets and distribute to each Participant or Beneficiary his or her share in the Trust Fund. Notwithstanding the foregoing, if the Employer or an Affiliate maintains another defined contribution plan, other than an employee stock ownership plan (as defined in Code Section 4975(e) or 409) or a simplified employee pension plan (as defined in Code Section 408(k)), the Before-Tax Account of such Participant shall be transferred to such other plan; provided, however, that if fewer than 2% of the Participants in this Plan at the time this Plan is 54 terminated are or were eligible to participate under such other defined contribution plan at any time during the 24-month period beginning 12 months before the time of termination, the Before-Tax Account shall be treated in the same manner as the Participant's remaining Accounts. The Participant's remaining Accounts (and, if such other defined contribution plan does not meet the requirements described above, the Participant's Before-Tax Account) shall be transferred to such other plan unless the vested balance of such Accounts does not exceed $3,500 ($5,000 effective beginning with the 1998 Plan Year) (or at the time of any prior distribution did not exceed $5,000) or the Participant consents to the distribution of such Accounts. For purposes of the preceding sentence, effective October 17, 2000, the non-consensual cash-out limit will be applied at the time of transfer or distribution, regardless of whether the balance in the Accounts was less than $5,000 at the time of any previous distribution. Upon completion of such liquidation and distribution, the Trust shall finally and completely terminate. In the event the Committee is no longer in existence, the actions to be taken by the Committee pursuant to this Section shall be taken by the Trustee. 55 ARTICLE XIII. MISCELLANEOUS 13.1. NO GUARANTEE OF EMPLOYMENT, ETC. Neither the creation of the Plan nor anything contained in the Plan or trust agreement shall be construed as a contract of employment between the Employer and the Participant or as giving any Participant hereunder or other employee of the Employer any right to remain in the employ of the Employer, any equity or other interest in the assets, business or affairs of the Employer, or any right to complain about any action taken or any policy adopted or pursued by the Employer. 13.2. NONALIENATION. (a) Except as may be provided in the Plan with respect to loans to Participants, no Participant shall have any right to sell, assign, pledge, hypothecate, anticipate or in any way create a lien upon any part of the Trust Fund. Except to the extent required by law or provided in the Plan, no interest in the Trust Fund, or any part thereof, shall be assignable in or by operation of law, or be subject to liability in any way for the debts or defaults of Participants, their Beneficiaries, spouses or heirs-at-law, whether to the Employer or to others. (b) Prior to the time that distributions are to be made hereunder, the Participants, their spouses, Beneficiaries, heirs-at-law or legal representatives shall have no right to receive cash or other things of value from the Employer or the Trustee from or as a result of the Plan and Trust. (c) Notwithstanding the foregoing, effective August 5, 1997, for judgments, orders and decrees issued, and settlements, a Participant's benefit in the Plan may be reduced to satisfy liabilities of the Participant to the Plan due to (a) the Participant's conviction of a crime involving the Plan; (b) a civil judgment (or consent order or decree) entered by a court or an action brought in connection with a violation of the fiduciary provisions of ERISA; or (c) a settlement agreement between the Secretary of Labor or the PBGC and the Participant in connection with a violation of the fiduciary provisions of ERISA. To be effective, the court order establishing such liability must require that the Participant's benefit in the Plan be applied to satisfy the liability. Spousal consent is required to offset the liability, unless the court order also requires the spouse to pay an amount to the Plan. 13.3. QUALIFIED DOMESTIC RELATIONS ORDER. Notwithstanding anything in this Plan to the contrary, the Committee shall distribute a Participant's Accounts, or any portion thereof, in accordance with the terms of any domestic relations order entered on or after January 1, 1985, which the Committee determines to be a qualified domestic relations order described in Code Section 414(p). Further notwithstanding any other provision of this Plan to the contrary, such distribution of a Participant's Accounts, or any portion thereof, to an alternate payee under a 56 qualified domestic relations order shall, unless such order otherwise provides, be made in one lump sum, as soon as administratively practicable, after the Committee has determined that a domestic relations order is a qualified domestic relations order described in Code Section 414(p). 13.4. CONTROLLING LAW. To the extent not preempted by the laws of the United States of America, the laws of the State of Illinois shall be the controlling state law in all matters relating to the Plan. 13.5. SEVERABILITY. If any provision of this Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of this Plan, but this Plan shall be construed and enforced as if said illegal or invalid provision had never been included herein. 13.6. NOTIFICATION OF ADDRESSES. Each Participant and each Beneficiary of a deceased Participant shall file with the Committee from time to time in writing his or her post-office address and each change of post-office address. Any communication, statement or notice addressed to the last post-office address filed with the Committee, or if no such address was filed with the Committee, then to the last post-office address of the Participant or Beneficiary as shown on the Employer's records, will be binding on the Participant and his or her Beneficiary for all purposes of this Plan, and neither the Committee nor the Employer shall be obliged to search for or ascertain the whereabouts of any Participant or Beneficiary. 13.7. GENDER AND NUMBER. Whenever the context requires or permits, the gender and number of words used herein shall be interchangeable. 57 ARTICLE XIV. ADOPTION BY AFFILIATES 14.1. ADOPTION OF PLAN. Subject to any resolution or terms of any agreement approved by the Board of Directors of the Company or a committee thereof to the contrary, any Affiliate may adopt this Plan for the benefit of its eligible employees if authorized to do so by the Board of Directors of the Company. Such adoption shall be by resolution of such Affiliate's board of directors, a certified copy of which shall be filed with the Company, the Committee, and the Trustee. Upon such adoption, such Affiliate shall become an "Employer." 14.2. THE COMPANY AS AGENT FOR EMPLOYER. Each Employer which has adopted this Plan pursuant to Section 14.1 hereby irrevocably gives and grants to the Company full and exclusive power conferred upon it by the terms of the Plan and Trust to take or refrain from taking any and all action which such Employer might otherwise take or refrain from taking with respect to the Plan, including sole and exclusive power to exercise, enforce or waive any rights whatsoever which such Employer might otherwise have with respect to the Trust, and each such Employer, by adopting this Plan, irrevocably appoints the Company its agent for such purposes. Neither the Trustee, the Committee, nor any other person shall have any obligation to account to any such Employer or to follow the instructions of or otherwise deal with any such Employer, the intention being that all persons shall deal solely with the Company as if it were the sole company which had adopted this Plan. Each such Employer shall contribute such amounts as determined under Article IV. 14.3. ADOPTION OF AMENDMENTS. Any Employer which adopts this Plan pursuant to Section 14.1 may amend this Plan with respect to its own employees by resolution of its board of directors, if authorized to do so by the Board of Directors of the Company or any person so duly authorized by the Board of Directors of the Company. Any Employer shall be deemed conclusively to have assented to any amendment of this Plan by the Company without the necessity of any affirmative action on the part of such Employer. 14.4. TERMINATION. Any Employer which adopts this Plan pursuant to Section 14.1 may terminate this Plan with respect to its own employees by resolution of its board of directors, if authorized to do so by the Board of Directors of the Company, or any person so duly authorized by the Board of Directors of the Company. 14.5. DATA TO BE FURNISHED BY EMPLOYERS. Each Employer which adopts this Plan pursuant to Section 14.1 shall furnish information and maintain such records with respect to its Participants as called for hereunder, and its determinations and notifications with respect thereto shall have the same force and effect as comparable determinations by the Company with respect to its Participants. 14.6. JOINT EMPLOYERS. If a Participant receives Considered Compensation during a Plan Year from more than one Employer, the total amount of such Considered Compensation shall be considered for the purposes of the Plan, and the respective Employers shall share in contributions to the Plan on account of said Participant based on the Considered Compensation paid to such Participant by the Employer. 58 14.7. EXPENSES. Each Employer shall pay such part of any expenses incurred in the administration of the Plan as the Company shall determine. 14.8. WITHDRAWAL. An Employer may withdraw from the Plan by giving 60 days' written notice of its intention to the Company and the Trustee, unless a shorter notice shall be agreed to by the Company. 14.9. PRIOR PLANS. If an Employer adopting the Plan already maintains a defined contribution plan covering employees who will be covered by this Plan, it may, with the consent of the Company, provide in its resolution adopting this Plan for the termination of its own plan or for the merger, restatement, and continuation of its own plan by this Plan. In either case, such Employer may, subject to the approval of the Company, provide in its resolution of adoption of this Plan for the transfer of the assets of such plan to the Trust for this Plan for the payment of benefits accrued under such other plan. IN WITNESS WHEREOF, the Company has caused this amendment and restatement of the Plan to be executed by its duly authorized officer. CCC INFORMATION SERVICES INC. By /s/ Oliver G. Prince, Jr. -------------------------------- Its Senior Vice President ------------------------------- Date February 27, 2002 ------------------------------ 59 EX-10.23 5 a2073198zex-10_23.txt EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT THIS AGREEMENT, effective as of July 1, 2001, is entered into by and between CCC INFORMATION SERVICES INC. (the "Company") and GITHESH RAMAMURTHY ("Executive"). WITNESSETH: WHEREAS, the Company currently employs Executive as its President and Chief Executive Officer, and Executive also serves as Chairman of the Company's Board of Directors; and WHEREAS, the parties have previously entered into an agreement effective July 1, 1996, with respect to Executive's employment by the Company, and desire to amend and restate such agreement as provided herein in order to provide for Executive's continued employment by the Company; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below and other good and valuable consideration, the receipt of which is hereby acknowledged, Executive and the Company hereby agree as follows: 1. TERM. The initial term of employment under this Agreement will be from July 1, 2001 through December 31, 2004, unless sooner terminated as provided in Section 5 below (the "Initial Term"). Either party may provide the other party with sixty (60) days' written notice of its intention not to extend this Agreement beyond the Initial Term. If this Agreement is not terminated at the end of the Initial Term or at the end of any Renewal Term, it then shall be renewed for successive two-year periods (the "Renewal Terms"), provided that either party may provide the other party with sixty (60) days' written notice of its intention not to extend the Agreement beyond any Renewal Term. The Initial Term and any Renewal Term are hereinafter collectively referred to as the "Term." 2. EMPLOYMENT OF EXECUTIVE; PERFORMANCE OF SERVICES. (a) EMPLOYMENT. Subject to the terms and conditions of this Agreement, the Company hereby agrees to employ Executive as its President and Chief Executive Officer, and Executive hereby agrees to accept such employment, during the Term. The Executive shall also serve as Chairman of the Company's Board of Directors for no additional compensation commencing June 28, 2000. (b) DUTIES AND SERVICES. While Executive is employed by the Company, Executive shall devote his full time (reasonable sick leave and vacations excepted) and best efforts, energies and talents to serving in the positions set forth in paragraph (a). Executive will have such authorities, powers, responsibilities and duties as are inherent to his position and necessary to carry out his responsibilities and the duties required of him hereunder, and such other duties as may be assigned to him by the Board of Directors; provided, that Executive shall not, without his consent, be assigned tasks that would be inconsistent with those of a President and Chief Executive Officer. While employed by the Company, Executive may devote reasonable time to activities other than those required under this Agreement, including activities involving professional, charitable, educational, religious and similar types of organizations, speaking engagements, membership on the boards of directors of other profit or not-for-profit organizations, and similar activities, to the extent that such other activities do not, in the judgment of the Board of Directors of the Company, inhibit or prohibit the performance of Executive's duties under this Agreement or conflict in any material way with the Company's business. 3. COMPENSATION AND BENEFITS. Subject to the terms of this Agreement, while Executive is employed by the Company, the Company shall compensate him for his services as follows: (a) BASE SALARY. The Executive shall receive, for each 12-consecutive month period beginning on the first day of the Initial Term and on each anniversary thereof, an annual base salary of $450,000 (the "Salary"), payable in bi-monthly installments of $18,750. This payment schedule may be changed in the future if the Company changes its exempt payroll schedule on a Company-wide basis. Executive may be eligible for merit raises on an annual basis subject to the terms and conditions of the Company's merit increase policy, as amended from time to time. All reasonable and necessary expenses incurred in connection with Executive's services on behalf of the Company, will be separately reimbursed subject to the terms of the Company's expense reimbursement policy. The Company shall have the right to withhold from Executive's Salary any taxes or other amounts required to be withheld by any governmental entity or authority having jurisdiction over the matter. (b) BONUS; EXECUTIVE BENEFITS. Executive will be entitled to participate in the Company's Corporate Management Bonus program, as amended from time to time (the "Bonus"). This will entitle Executive to a target bonus of 75% of his Salary. The Bonus will be based both upon Company performance and Executive's performance, as determined by the Compensation Committee of the Board of Directors. Executive may also be eligible to participate in other benefit plans that may be established for the benefit of the Company's Executive Management Group; provided, however, that the eligibility requirements and other terms of any such plans shall govern Executive's participation therein. The Company reserves the right to change its Company bonus programs and executive benefit plans provided such changes are Company wide. (c) OTHER BENEFITS. Executive will be entitled to participate in all benefit plans maintained by the Company for its salaried employees generally, including the 401(k) plan, the employee stock purchase plan, health, dental, vision, life, short-term and long-term disability insurance, flexible spending accounts and educational assistance. In all cases, however, the eligibility requirements and other terms of any such plans will govern Executive's participation therein. -2- (d) VACATION. Executive shall be entitled to no less than four weeks of vacation per year. 4. STOCK OWNERSHIP. (a) STOCK OPTION AND STOCK GRANTS. Executive has previously been granted options to purchase shares of the Company's common stock pursuant to the terms of the Company's 1997 Employee Stock Option Plan and the 2000 Stock Incentive Plan. Additional options may be granted to Executive in the discretion of the Compensation Committee of the Company's Board of Directors. Notwithstanding anything to the contrary contained in the Company's 1997 Employee Stock Option Plan, in the Company's 2000 Stock Incentive Plan, or in any other document related to the grant by the Company to Executive of stock options: (i) Executive shall have the right to exercise all vested stock options granted to him by the Company within 18 months following a termination by Executive of his employment with the Company pursuant to paragraph 5(d), provided that Executive cooperates fully with the Company to provide a smooth transition in the transfer of his responsibilities to his successor, as determined by the Compensation Committee of the Company's Board of Directors in its reasonable discretion; and (ii) and Executive shall have the right to exercise all stock options granted to him by the Company, whether or not Executive's rights with respect to the options have vested, within 18 months of a Change of Control. For purposes of this paragraph 4(a), the term "Change of Control" shall have the meaning set forth in paragraph 5(g) of this Agreement. (b) EXECUTIVE MANAGEMENT GROUP STOCK OWNERSHIP GUIDELINES. Executive agrees that he will make a good-faith effort to comply with the stock ownership guidelines approved by the Compensation Committee for members of the Executive Management Group (the "Guidelines"). Pursuant to the Guidelines, and the terms of the 2000 Stock Incentive Plan, Executive may elect to defer up to one-third of his annual Bonus in the form of restricted stock that will vest over a three-year period at the rate of one-third each year. The Company will match one-third of the deferred amount with additional restricted stock that will vest at the same rate. (c) LOANS. Pursuant to the Guidelines and the 2000 Stock Incentive Plan, the Compensation Committee of the Board of Directors, in its discretion, may grant a loan or loans to Executive for the purpose of acquiring common stock under the 2000 Stock Incentive Plan. 5. TERMINATION. Executive's employment with the Company may be terminated under the following circumstances. (a) DEATH. Executive's employment hereunder shall terminate upon his death. (b) DISABILITY. If Executive becomes Disabled, the Company may terminate his employment with the Company. For the purpose of this Agreement, Executive will be deemed to be Disabled if he has been unable to perform his duties under this Agreement for a period of six (6) consecutive months and the Board of Directors of the Company determines, on the basis of a written statement of a licensed medical doctor or psychologist, that it is not likely -3- that Executive will be able to resume substantially performing his duties on a full time basis within sixty (60) days. (c) CAUSE. The Company may terminate Executive's employment hereunder immediately and at any time for Cause by written notice to the Executive detailing the basis for the termination. For purposes of this Agreement, "Cause" means in the reasonable judgment of the Company's Board of Directors (i) gross negligence or willful and continued failure by Executive to substantially perform his duties as an employee of the Company (other than any such failure resulting from incapacity due to physical or mental illness), (ii) willful misconduct by Executive which is demonstrably and materially injurious to the Company, monetarily or otherwise, (iii) the engaging by Executive in egregious misconduct involving serious moral turpitude to the extent that his credibility and reputation no longer conforms to the standard of senior executives of the Company, or (iv) the commission by Executive of a material act of dishonesty or breach of trust resulting or intending to result in personal benefit or enrichment to Executive at the expense of the Company. For purposes of this provision, no act or failure to act shall be deemed "willful" unless done or omitted to be done in bad faith and without reasonable belief that such action or omission was in the best interest of the Company. (d) TERMINATION BY EXECUTIVE. Executive may terminate his employment hereunder at any time for any reason by giving the Company prior written notice not less than 60 days prior to such termination. A termination shall be deemed to have occurred under this paragraph 5(d), only if it is not a termination for Good Reason under paragraph 5(f). (e) MUTUAL AGREEMENT. This Agreement may be terminated at any time by mutual written agreement of the parties. (f) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate Executive's employment hereunder at any time for any reason by giving Executive written notice of such termination; provided, however, termination by the Company shall be deemed to have occurred under this paragraph 5(f) only if such termination by the Company is not pursuant to paragraph 5(b), 5(c), 5(d) or 5(e). For purposes of this paragraph 5(f), a failure by the Company to extend this Agreement beyond the Initial Term or beyond any Renewal Term or a termination by Executive for "Good Reason" shall be considered a termination by the Company without Cause. "Good Reason" for termination by Executive shall mean his voluntary resignation following: (i) a material change in the duties, authorities, responsibilities and status of Executive's position, or a material reduction or alteration in the nature or status of Executive's authorities, duties or responsibilities from those in effect at the beginning of the Initial Term ("material diminution") with the result that Executive makes a good faith determination (by written notice delivered to the Chairman of the Compensation Committee of the Board of Directors) that he cannot continue to carry out his job in substantially the same manner as it was intended to be carried out immediately before such material diminution; (ii) a Change of Control (as defined in paragraph 5(g)); -4- (iii) any failure by the Company to comply with any of the provisions of Section 3 of this Agreement, other than an isolated, insubstantial, or inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of written notice from Executive; (iv) a change in Executive's reporting responsibilities such that Executive no longer reports to the Board of Directors of the Company; or (v) Executive is required by the Company to relocate his personal residence outside of a 50-mile radius of the Company's current principal place of business. Notwithstanding the foregoing, a termination by Executive for any of the reasons described in clauses (i), (iii), and (iv) above shall not be deemed to be a termination for Good Reason within the meaning of this section until and unless thirty (30) days have elapsed from the date the Chairman of the Compensation Committee of the Board of Directors of the Company receives a written notice from Executive declaring his intention to terminate employment for Good Reason and the Company fails to cure or cause to be cured the circumstances set forth in this section on the basis of which the declaration of termination for Good Reason is given. (g) CHANGE OF CONTROL. For purposes of this Agreement, a "Change of Control" shall occur if: (i) any person or group (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than White River Ventures, Inc. (including its affiliates or stockholders if a dividend in their favor is granted by White River), becomes the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of 50% or more of the Company's then outstanding voting Shares AND the "Continuing Directors" cease for any reason to constitute a majority of the Board of Directors of CCC Information Services Group, Inc. ("CCCISG"); or (ii) the business of the Company is disposed of pursuant to a sale or other disposition of all or substantially all of the business (including stock or assets) of the Company. For purposes of this section, "Continuing Director" shall mean a member of the Board of Directors of CCCISG who either is a member of that Board on the date of the execution of this Agreement, or who subsequently became a director of CCCISG and whose election was approved by a vote of a majority of the Continuing Directors then on the Board (which term, for purposes of this definition, shall mean the whole Board and not any committee thereof). (h) DATE OF TERMINATION. "Date of Termination" means the last day that Executive is employed by the Company under the terms of this Agreement, provided that his employment is terminated in accordance with one of the foregoing provisions of this Section 5. 6. RIGHTS UPON TERMINATION. Executive's right to payments and benefits under this Agreement for periods after his Date of Termination shall be determined in accordance with the following provisions of this Section 6. (a) RIGHTS UPON TERMINATION GENERALLY. If Executive's Date of Termination occurs during the Term for any reason, the Company shall pay to the Executive: -5- (i) Executive's Salary for the period ending on the Date of Termination. (ii) Payment for unused vacation days, as determined in accordance with Company policy as in effect from time to time. (iii) Any other payments or benefits to be provided to Executive by the Company pursuant to any employee benefit plans or arrangements adopted by the Company, to the extent such payments and benefits are earned and vested as of the Date of Termination, or are required by law to be offered for periods following Executive's Date of Termination. The amounts payable under clauses (i) and (ii) above shall be paid in a lump sum as soon as practicable following such Date of Termination. Any amounts payable under clause (iii) above shall be paid in accordance with the terms of the applicable plan or arrangement. (b) If Executive's Date of Termination occurs under paragraph 5(f) (relating to non-Cause termination by the Company) other than a termination related to a Change of Control, then in addition to the amounts payable under paragraph 6(a), Executive shall be entitled to (i) a lump sum cash payment equal to 18 months of Salary and target Bonus, at the rate in effect as of his Date of Termination and (ii) one (1) year of executive outplacement services commencing with his Date of Termination. The cash payment shall be paid in four substantially equal quarterly installments, with the first installment due and payable on the first day of the month following the Executive's Date of Termination. In addition, if Executive's Date of Termination occurs under paragraph 5(f) (relating to non-Cause Termination by the Company) other than a termination relating to a Change of Control, then 50% of Executive's rights with respect to each option that has been granted to him by the Company to purchase shares of the Company's stock, but which has not vested, shall vest on the Date of Termination; and Executive shall have the right to exercise all vested stock options granted to him by the Company within 18 months of the Date of Termination. (c) If Executive's Date of Termination occurs under paragraph 5(f)(ii) (relating to a Change of Control), then in addition to the amounts payable under paragraph (6)(a), Executive shall be entitled to (i) a lump sum cash payment equal to 24 months of Salary and target Bonus, at the rate in effect as of his Date of Termination, and (ii) one (i) year of Executive outplacement services commencing with the Date of Termination. The cash payment shall be paid as soon as practicable after the Date of Termination. In addition, if Executive's Date of Termination occurs under paragraph (5)(f)(ii)(relating to a Change of Control), then his rights with respect to the stock options that have been granted to him by the Company shall be determined as set forth in paragraph 4(a). (d) (i) If Executive's Date of Termination occurs under paragraph 5(f) (relating to non-Cause termination by the Company), then: (A) the Company shall not have the right to demand payments of any amounts due under the loan made by the Company to Executive to finance the purchase by Executive of 200,000 shares of Company stock (the "Company Loan") -6- for a period of one year from the Date of Termination; and (B) Executive shall have the right to sell to the Company the 200,000 shares of Company stock which he purchased with the proceeds of the Company Loan (the "Financed Shares") at any time within two years of the Date of Termination. The purchase price for the Financed Shares shall be either (A) the price of the Company's stock prevailing on a national securities exchange which is registered under Section 6 of the Securities Exchange Act of 1934, or (B) if the Company's stock is not traded on a registered national securities exchange, then the offering price for the stock as established by the current bid and asked prices quoted by persons independent of the Company. If there is no generally-recognized market for the Company's stock at the time that Executive exercises his option to sell the Financed Shares back to the Company, then the purchase price for the Financed Shares shall be their fair market value, as determined by an independent professional business valuation firm jointly selected by Executive and the Company. For this purpose, the fair market value of the Financed Shares shall be deemed to be equal to that percentage of the total enterprise value of the Company equal to the percentage which the number of Financed Shares bears to the total number of outstanding shares of the Company. No discount for lack of control or for lack of marketability shall be taken in determining the fair market value of the Financed Shares. (ii) If there is a generally-recognized market for the Company's stock, then the closing of the purchase and sale of the Financed Shares shall take place within 30 days after Executive delivers written notice to the Company of his election to sell the Financed Shares. If there is no generally-recognized market for shares of the Company's stock at the time that Executive delivers written notice of his election to sell the Financed Shares, then the closing of the purchase and sale of the Financed Shares shall take place within 60 days after delivery of the notice. (iii) The proceeds from the sale by Executive of the Financed Shares shall be applied as follows: first, the Company shall deliver to Executive cash in an amount sufficient to cover all federal, state, and local income taxes that will be imposed upon Executive in connection with the sale; then the remaining sale proceeds shall be applied by the Company in satisfaction of all amounts due from Executive to the Company under the terms of the Company Loan; and any remaining balance shall be distributed to Executive. If the proceeds from the sale by Executive of the Financed Shares are insufficient to pay the full amount due from Executive to the Company in satisfaction of the Company Loan (the "Amount Due"), then the Company shall forgive that portion of the excess of the Amount Due over the proceeds from the sale (the "Excess Amount") equal to the difference between (A) the Excess Amount, and (B) an amount equal to 25 percent of the difference between (I) the fair market value of the shares of the Company covered by those options which have been granted to Executive by the Company and which are listed on Exhibit "A," and (II) the price which Executive must pay to purchase those shares pursuant to the terms of the options. The fair market value of the shares covered by the options shall be determined as of the date of the closing of the sale of the Financed Shares to the Company. (d) Notwithstanding any provision of this Agreement to the contrary, in the event that within 60 days of Executive's Date of Termination, the Company discovers -7- circumstances which would have permitted the Company to terminate the Executive's employment for Cause under paragraph 5(c), or the Board reasonably determines that the Executive has violated paragraphs 7 or 8 of this Agreement, all payments under this Agreement, except those described in paragraph 6(a), shall cease and be permanently forfeited. 7. CONFIDENTIALITY. During Executive's association with the Company, or any affiliate, Executive will be exposed to confidential and proprietary information of the Company and its affiliates which may be disclosed to Executive both orally and/or in writing concerning the Company, its affiliates, subsidiaries, customers, products, systems, marketing, financial, legal and such other information relating to the Company and its affiliates, or subsidiaries. Executive agrees to keep such information confidential, and Executive will not, without the Company's prior written consent, disclose to any person or entity the confidential information. Executive also agrees to take all reasonably necessary precautions to prevent any unauthorized disclosure of such matters. It is agreed that the obligations of confidentiality which Executive has agreed to will continue in full force and effect while Executive is associated with the Company and for three (3) years following the termination of this Agreement. For purposes of the foregoing, confidential and proprietary information shall not include information in the public domain or information that becomes public through no fault of Executive. 8. NONCOMPETITION. Executive also agrees that without the express prior written consent of the Company and as consideration for the above-mentioned compensation, Executive will not (on behalf of Executive or any other person or entity), during the Term and for a period of one (1) year after the date of any termination of Executive's employment for any reason whatsoever (i) directly or indirectly own, manage, join, invest in, finance, control or participate in, accept employment with, provide consulting or advisory services to, or be connected with, any business (other than the Company or any of its affiliates) anywhere, that markets, sells, or provides access to databases or services substantially similar to those offered by the Company or that the Company is actively and demonstrably developing or has developed and then actively and demonstrably intends to market presently as of the date of termination of this Agreement, (ii) rely on proprietary technology or know-how used by, or documents that contain confidential information (specifically including customer lists and the contents of marketing documents and marketing materials) of the Company or any of its affiliated companies to engage in any activity with the intent or effect of competing with the Company or any of its affiliated companies, or (iii) directly or indirectly (on behalf of Executive or any other person who markets, sells or provides access to databases, or services substantially similar to those offered by the Company or that the Company is actively developing or has developed and then intends to market presently), employ, solicit for employment or otherwise assist in the solicitation for employment, any other employee or consultant of the Company or any of its affiliated companies (collectively the "non-competition obligations"). Executive will not, however, be prevented from owning, directly or indirectly, solely for investment purposes, no more than one percent (1%) of the shares of stock of any publicly traded corporation that does compete with the Company. Executive also will not be prevented from rendering services to another company which competes with the Company so long as Executive's performance of services to or for the benefit of the other company is solely for the benefit of those businesses of the other company which do not compete with the business of the Company. -8- In addition, during the Term and for a period of one (1) year after the date of any termination of Executive's employment for any reason whatsoever, Executive shall not directly or indirectly (1) induce or attempt to induce any employee of the Company, its affiliates or subsidiaries to leave the employee of the Company or in any way interfere with the relationship between the Company and any employee thereof, (2) hire directly or through another entity any person who was an employee of the Company as of the date of Executive's termination, (3) induce or attempt to induce any customer, supplier, licensee, licensor, or other business relation of the Company to cease doing business with the Company or its affiliates, or in any way interfere with the relationship between any such customer, supplier, licensee, licensor or business relation and the Company, (4) disparage the Company, its management, or its business in any public or private manner, or (5) induce, directly or indirectly, any person to compete with the Company. Executive agrees that if Executive fails fully to honor Executive's obligations of confidentiality and non-competition hereunder, such act will constitute a material breach of this Agreement and the Company shall have, in addition to any other rights, the right to cease all further payments hereunder and/or seek a refund of such payments previously paid to Executive as a part of this Agreement after the date of Executive's breach of Executive's confidentiality or non-competition obligations and the right to obtain specific performance of the confidentiality and non-compete obligations agreed to herein, without any showing of actual damage or inadequacy of legal remedy. Only payments made after the Date of Termination are subject to reimbursement. 9. MAKE-WHOLE PAYMENTS. In the event that the benefits provided for in the Agreement, when aggregated with any other payments or benefits received by Executive, would (i) constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Company will pay to Executive an additional amount which is equal to (i) the amount of the Excise Tax, plus (ii) the aggregate amount of any interest, penalties, fines or additions to any tax which are imposed in connection with the imposition of such Excise Tax, plus (iii) all income, excess and other applicable taxes imposed on Executive under the laws of any Federal, state or local government or taxing authority by reason of the payments required under clause (i) and clause (ii) and this clause (iii). Unless the Company and Executive otherwise agree in writing, any determination required under this Section 9 shall be made in writing by the Company's independent public accountants (the "Accountants") whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 9, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 9. -9- 10. ARBITRATION. All controversies and disputes between Executive and the Company arising out of Executive's employment the termination thereof, or the provisions of this Agreement (with the sole exception of all controversies and disputes arising under the confidentiality and non-compete provisions of Sections 7 and 8 of this Agreement), including but not limited to all claims involving federal, state and local laws relating to employment discrimination based on race, color, national original, religion, sex, age, disability or any other protected status, shall be subject to mandatory arbitration as provided for in this Section. All such disputes shall be submitted to arbitration in Chicago, Illinois under the Employment Dispute Resolution Rules of the American Arbitration Association. The arbitrator(s) selected under this Section may award damages, reinstatement and all other relief available under all applicable federal, state or local laws, except that each party shall be responsible for its own attorney's fees and costs. Any arbitration award issued hereunder shall be in writing, shall state its underlying reasons and shall be final and binding on the parties to this Agreement and anyone claiming through them, and the parties to this Agreement expressly waive their rights to have their claims heard by a judge and/or jury in a court of law. Any judgment upon an award issued under this Section may be entered in any court having jurisdiction thereof. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 10, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S RELATIONSHIP WITH THE COMPANY. 11. NONALIENATION. The interests of Executive under this Agreement are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by the Executor's creditors or beneficiaries. 12. SUCCESSORS. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company's assets and business. 13. NOTICES. Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid overnight courier to the parties at the addresses set forth below (or such other addresses as shall be specified by the parties by like notice). -10- To the Company: CCC International Services Inc. World Trade Center Chicago 444 Merchandise Mart Chicago, Illinois 60654-1005 Attention: Chairman of the Compensation Committee of the Board Copy to: General Counsel To Executive: Githesh Ramamurthy World Trade Center Chicago 444 Merchandise Mart Chicago, Illinois 60654-1005 14. SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified). 15. WAIVER OF BREACH. No waiver of any party hereto of a breach of any provision of this Agreement by any other party will operate or be construed as a waiver of any subsequent breach by such other party. The failure of any party hereto to take any action by reason of such breach will not deprive such party of the right to take action at any time while such breach continues. 16. AMENDMENT. This Agreement may be amended or canceled only by mutual agreement of the parties in writing without the consent of any other person. So long as the Executive lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof. 17. SURVIVAL OF AGREEMENT. Except as otherwise expressly provided in this Agreement, the rights and obligations of the parties to this Agreement shall survive the termination of Executive's employment with the Company. 18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, if any, between the parties relating to the subject matter hereof. 19. ACKNOWLEDGEMENT BY EXECUTIVE. Executive represents to the Company that he is knowledgeable and sophisticated as to business matters, including the subject matter of this Agreement, that he has read this Agreement and that he understands its terms. Executive acknowledges that, prior to assenting to the terms of this Agreement, he has been given a -11- reasonable time to review it, to consult with counsel of his choice, and to negotiate at arm's-length with the Company as to the contents. Executive and the Company agree that the language used in this Agreement is the language chosen by the parties to express their mutual intent, and that no rule of strict construction is to be applied against any party hereto. IN WITNESS WHEREOF, the parties have executed this Agreement this 19th day of September, 2001, to be effective as of the date above first written. EXECUTIVE CCC INFORMATION SERVICES INC. Githesh Ramamurthy BY : Herbert S. Winokur Jr. - ------------------------------- ---------------------------- ITS : Chairman of Compensation Committee --------------------------- -12- EX-10.24 6 a2073198zex-10_24.txt EXECUTIVE LOAN AGMT DTD 7-16-01 Exhibit 10.24 [CCC Letterhead] July 16, 2001 Mr. Mark Rosen Managing Director Charlesbank Capital Partners 600 Atlantic Avenue - 26th Floor Boston, MA 02210-2203 Re: EXECUTIVE LOAN ARRANGEMENT Dear Mark: This letter will commemorate our understanding that effective February 1, 2001, Charlesbank Capital Partners will provide to CCC the services of Andrew Janower, Brandon White and Ryan Carroll, or such other of your employees as you may designate and are acceptable to us ("Loaned Executives"). We expect that in the aggregate, such services from all Loaned Executives will average approximately one (1) "person" day per week, but we may mutually agree on a greater or lesser amount of resources. Loaned Executives will work as our agents together with our senior management, including the Office of General Counsel, and outside counsel for the Company, and you will clearly communicate to them that they are to follow our directions and keep confidential all documents and information regarding our affairs, except for such disclosure as we may authorize. Initially, Loaned Executives will be assigned to advise senior management, work with counsel for the Company and participate in decision-making regarding financing, closing of our consumer services business, and our International operations including any activities involving Hearst and the Enterstand Joint Venture. This arrangement shall continue until terminated by either of us. During the period from February 1, 2001 until termination, we will reimburse you for the percentage of your costs representing our utilization of the time of the Loaned Executives, plus all out-of-pocket expenses incurred by you in connection with their work for us or similarly incurred by them and for which you reimbursed them. Aggregate compensation to be paid to Charlesbank Capital Partners by CCC shall not exceed $50,000. Please confirm that this letter accurately reflects the arrangement between us by signing and returning the enclosed copy of this letter. Very truly yours, /s/ Robert S. Guttman Agreed and confirmed this 31st day July, 2001 Charlesbank Capital Partners By: Mark A. Rosen ---------------------------------------- Managing Director EX-10.25 7 a2073198zex-10_25.txt PROMISSORY NOTE EFF. DT. 01-15-2002 PROMISSORY NOTE PRINCIPAL AMOUNT EFFECTIVE DATE $1,200,000.00 JANUARY 15, 2002 CHICAGO, ILLINOIS 1. PRINCIPAL AMOUNT. For value received, the undersigned ("MAKER") does hereby promise to pay to the order of CCC Information Services Group Inc., a Delaware corporation, or its assignee ("PAYEE"), the principal sum of One Million Two Hundred Thousand and 00/100 Dollars ($1,200,000) (the "LOAN"), upon the terms and conditions set forth herein. 2. INTEREST. (a) ACCRUAL OF INTEREST. Interest shall accrue on the unpaid principal of this promissory note (the "NOTE") from the date hereof until all amounts due hereunder are paid in full at an interest rate equal to 6.75% per annum. Interest hereon shall be calculated on the basis of the actual number of days elapsed and a year of 365 days. Payments of interest on the unpaid principal hereof shall be due and payable on an annual basis, beginning on March 1, 2003 and every March 1 of each year thereafter (or the next Business Day (as hereafter defined) if such day does not constitute a Business Day) and pursuant to Sections 3 or 4 hereof, as appropriate. The March 1, 2003 payment shall include all accrued payments of interest on the unpaid principal (b) NO USURY. It is the intention of Maker and Payee to conform to applicable usury laws, if any. Accordingly, notwithstanding anything to the contrary in this Note or any other agreement entered into in connection herewith, it is agreed as follows: (i) the aggregate of all interest and any other charges constituting interest under applicable law and contracted for, chargeable, or receivable under this Note or otherwise in connection with the obligation evidenced hereby shall under no circumstances exceed the maximum amount of interest permitted by applicable law, if any, and any excess shall be deemed a mistake and cancelled automatically and, if theretofore paid, shall, at the option of Maker, be refunded to Maker or credited on the principal amount of this Note; and (ii) in the event that the entire unpaid balance of this Note is declared due and payable by Payee, then earned interest may never include more than the maximum amount permitted by applicable law, if any, and any unearned interest shall be cancelled automatically and, if theretofore paid, shall at the option of Maker, either be refunded to Maker or credited, to the extent permitted by law, on the principal amount of this Note. 3. POST-MATURITY INTEREST. Any amount of principal and/or interest hereon which is not paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest from the date when due until said principal and/or interest amount is paid in full, at the lesser of (a) an interest rate equal to two percent (2%) per annum in excess of the interest rate set forth in Section 2(a) hereof and (b) the highest rate of interest allowable under applicable law. 4. PAYMENTS. (a) PRINCIPAL; INTEREST AND ENFORCEMENT COSTS. Subject to Section 7 below and, if applicable, Section 6(d) of the Employment Agreement, effective as of July 1, 2001 between Payee and Maker, (i) the outstanding principal amount of this Note, (ii) all accrued and unpaid interest thereon and (iii) all of Payee's costs and expenses (including reasonable fees and expenses of Payee's attorneys, accountants and other professional commitments) of enforcing this Note ("ENFORCEMENT COSTS"), shall be due and payable in full on the earliest to occur of (A) the fifth (5th) anniversary of the date hereof, (B) any acceleration of the Obligations pursuant to Section 7 below, (C) 30 days following the termination of Maker's employment with CCC Information Services Inc. (the "Company") for any reason (each such event, the "MATURITY"). All amounts due under this Note, including, without limitation, principal, interest and Enforcement Costs are collectively referred to herein as the "OBLIGATIONS". (b) MAKING OF PAYMENTS. All payments of the Obligations in respect of this Note shall be made by delivery of a certified or bank cashier's check or of other immediately available funds and delivered to Payee on the date or dates due at the address of Payee set forth on the signature page hereof, or at such other place as the holder hereof may from time to time designate in writing. Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day (as defined below), such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest on this Note. For purposes of this Note, "BUSINESS DAY" means each day other than a Saturday, a Sunday or any other day on which banking institutions in Chicago, Illinois are authorized or obligated by law or executive order to be closed. 5. PREPAYMENT. (a) VOLUNTARY PREPAYMENT. Maker, without premium or penalty, may prepay the Obligations in whole or in part upon three (3) Business Days' prior written notice to Payee. (b) APPLICATION OF PREPAYMENT PROCEEDS. All proceeds of any prepayments made pursuant to this Section 5 shall be applied first to the payment of Enforcement Costs, second to the payment of accrued but unpaid interest hereon and third to the payment of the outstanding principal balance of this Note. 6. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an "EVENT OF DEFAULT" under this Note: (a) PRINCIPAL PAYMENT DEFAULT. Maker shall fail to pay the outstanding principal amount due hereunder, or any portion thereof within five (5) business days of when due, whether at Maturity, at such earlier date as is required by Section 7, or otherwise; 2 (b) INTEREST AND ENFORCEMENT COST PAYMENT DEFAULT. Maker shall fail to pay any interest which has accrued hereunder or any Enforcement Costs within (5) days of when due; (c) DISSOLUTION; TERMINATION. The dissolution, termination and/or liquidation of Payee or the Company; (d) COVENANT DEFAULT. Maker shall default in the observance or performance of any covenant or agreement contained in this Note (other than those set forth in Sections 6(a), 6(b), 6(c), 6(e), 6(f) and 6(g)) and such default shall not of its nature be curable by Maker, or if such default shall be curable, such default shall continue uncured for a period of ten (10) days after receipt by Maker of written notice from Payee to such effect; (e) BANKRUPTCY, ETC. Maker becomes insolvent or generally fails to pay, or admits in writing his inability or refusal to pay, his debts as they become due; or Maker's application for, consent to or acquiescence in, the appointment of a trustee in bankruptcy, receiver or other custodian for Maker or any of his property or assets, or Maker's making a general assignment for the benefit of his creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for Maker or for a substantial part of his property or assets and such appointment is not discharged within 60 days thereafter; or any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any liquidation proceeding is commenced in respect of Maker and, if such case or proceeding is not commenced by Maker, it is either (i) consented to or acquiesced in by Maker, or (ii) remains undismissed for 60 days; (f) DEFAULT UNDER OTHER OBLIGATIONS TO PAYEE. Maker defaults on any obligations of Maker to Payee (or its subsidiaries) under any agreements between Payee (and/or its subsidiaries) and the Maker relating to Maker's employment or engagement by the Company (and/or its subsidiaries), which default has not been cured during any applicable cure period provided in such agreements; or (g) USE OF PROCEEDS. Use of the proceeds of the Loan for any purpose other than payment of the purchase price upon the "exercise" of Maker's right to acquire shares of up to 192,000 of common stock held by Payee as "TREASURY STOCK." 7. REMEDIES. Upon or at any time after the occurrence of an Event of Default specified in Sections 6(a), 6(b), 6(c), 6(d), 6(f) or 6(g) hereof, the Obligations shall, at the option of Payee, become due and payable without presentment, demand, protest, notice of acceleration, notice of intent to accelerate or other notice of any kind, all of which are hereby expressly waived by Maker, anything in this Note to the contrary notwithstanding. Upon the occurrence of an Event of Default specified in Section 6(e) hereof, the Obligations shall thereupon and concurrently therewith become due and payable. The Maker and every endorser or guarantor hereof agrees, subject only to any limitation imposed by law, to pay on demand all expenses, including reasonable attorneys' fees, disbursements and legal expenses, incurred by the holder of this Note 3 in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by acceleration or otherwise, in addition to any other remedy available in law or equity. 8. WAIVERS. Maker and every endorser and guarantor of this Note hereby jointly and severally waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement hereof and that no such extension or other indulgence, and no substitution, release or surrender of collateral, and no discharge or release of any other party primarily or secondarily liable hereof, shall discharge or otherwise affect the liability of Maker. No delay or omission on the part of holder in exercising any right hereunder shall operate as a waiver of any such right, and the waiver of any such right on any one occasion shall not be construed as a bar to or waiver of any such right on any future occasion. 9. TRANSFER OF NOTE. Until notified by Payee in writing of the transfer of this Note, Maker shall be entitled to deem Payee or such person who has been so identified by Payee in writing to Maker as the owner and holder of this Note. 10. NOTICES. Every notice or other communication required or desired to be given hereunder shall be in writing and shall be delivered either by personal delivery, telegram, a nationally recognized courier service, postage prepaid certified or registered mail, return receipt requested, or facsimile transmission with acknowledgment of receipt, addressed to the party to whom intended at the address set forth on the signature page attached to this Note or at such other address as the intended recipient previously shall have designated by written notice. Notice by courier or certified or registered mail shall be effective on the date it is officially recorded as delivered to the intended recipient by return receipt or similar acknowledgment, or the date of attempted delivery where delivery is refused by the intended recipient. All notices and communications delivered in person shall be deemed to have been delivered to and received by the addressee, and shall be effective, on the date of personal delivery. Any notice transmitted by telegram or facsimile transmission shall be deemed to have been delivered to and received by the addressee, and shall be effective, on the date said notice is delivered to the telegram company for transmission or received by the recipient, respectively. 11. GOVERNING LAW. This Note shall be governed and construed and the rights and liabilities of the parties hereto shall be determined in accordance with the internal laws of the State of Illinois, without regard to the conflict of laws principles thereof. 12. JURISDICTION; SERVICE OF PROCESS. Maker hereby submits to the nonexclusive jurisdiction of the United States Federal and State of Illinois courts for all purposes of or in connection with this Agreement; provided that nothing in this Agreement shall affect Payee's right to bring any action or proceeding against Maker or Maker's property in the courts of any other jurisdiction. Maker hereby consents to process being served in any suit, action or proceeding of the nature referred to above either (a) by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to its address shown below its signature hereto or (b) by serving a copy thereof upon Maker's authorized agent for service of process (to the extent permitted by applicable law, regardless whether the appointment of such agent for service of process for any reason shall prove to be ineffective or such agent for service 4 of process shall accept or acknowledge such service); provided that, to the extent lawful and practicable, written notice of said service upon said agent shall be mailed by registered or certified mail, postage prepaid, return receipt requested, to Maker at Maker's address shown below its signature hereto. Maker agrees that such service, to the fullest extent permitted by law, (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall be taken and held to be valid personal service upon and personal delivery to Maker. Nothing herein shall affect Payee's right to serve process in any other manner permitted by law, or limit Payee's right to bring proceedings against Maker in the courts of any other jurisdiction. 13. WAIVER OF JURY TRIAL. MAKER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS NOTE, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 14. ASSIGNMENT. This Note and all rights and remedies hereunder shall be fully assignable by Payee and, following such assignment, any such assignee shall be deemed the "Payee" for all purposes hereunder. Neither this Note nor any obligations or duties hereunder may be sold, assigned or delegated by the Maker without the prior written consent of the Payee. 15. DISTRIBUTION INSTRUCTIONS. Maker hereby instructs Payee to make payment of all amounts borrowed hereunder by Maker directly to Payee in payment of the exercise price upon the "exercise" of Maker's options to acquire common stock shares from Payee. 5 IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the day and year first above written, though this note was executed at a later date. MAKER: /s/ Githesh Ramamurthy ------------------------------ Githesh Ramamurthy PAYEE'S ADDRESS: CCC Information Services Group Inc. World Trade Center Chicago 444 Merchandise Mart Chicago, Illinois 60654 Attention: Chief Financial Officer Telephone No.: (312) 222-4636 6 EX-10.26 8 a2073198zex-10_26.txt PROMISSORY NOTE 10-27-2000 PROMISSORY NOTE $199,208.90 OCTOBER 27, 2000 CHICAGO, ILLINOIS 1. PRINCIPAL AMOUNT. For value received, the undersigned ("MAKER") does hereby promise to pay to the order of CCC Information Services Group Inc., a Delaware corporation, or its assignee ("PAYEE"), the principal sum of One Hundred Ninety-Nine Thousand Two Hundred Eight and 90/100 Dollars ($199,208.90) (the "LOAN"), upon the terms and conditions set forth herein. 2. INTEREST. (a) ACCRUAL OF INTEREST. Interest shall accrue on the unpaid principal of this promissory note (the "NOTE") from the date hereof until all amounts due hereunder are paid in full at an interest rate equal to 6.75% per annum. Interest hereon shall be calculated on the basis of the actual number of days elapsed and a year of 365 days. Payments of interest on the unpaid principal hereof shall be due and payable on an annual basis, beginning on March 1, 2003 and every March 1 of each year thereafter (or the next Business Day (as hereafter defined) if such day does not constitute a Business Day) and pursuant to Sections 3 or 4 hereof, as appropriate. The March 1, 2003 payment shall include all accrued payments of interest on the unpaid principal (a) on March 1 of each year (or the next Business Day (as hereafter defined) if such day does not constitute a Business Day) and pursuant to Sections 3 or 4 hereof, as appropriate. (b) NO USURY. It is the intention of Maker and Payee to conform to applicable usury laws, if any. Accordingly, notwithstanding anything to the contrary in this Note or any other agreement entered into in connection herewith, it is agreed as follows: (i) the aggregate of all interest and any other charges constituting interest under applicable law and contracted for, chargeable, or receivable under this Note or otherwise in connection with the obligation evidenced hereby shall under no circumstances exceed the maximum amount of interest permitted by applicable law, if any, and any excess shall be deemed a mistake and cancelled automatically and, if theretofore paid, shall, at the option of Maker, be refunded to Maker or credited on the principal amount of this Note; and (ii) in the event that the entire unpaid balance of this Note is declared due and payable by Payee, then earned interest may never include more than the maximum amount permitted by applicable law, if any, and any unearned interest shall be cancelled automatically and, if theretofore paid, shall at the option of Maker, either be refunded to Maker or credited, to the extent permitted by law, on the principal amount of this Note. 3. POST-MATURITY INTEREST. Any amount of principal and/or interest hereon which is not paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest from the date when due until said principal and/or interest amount is paid in full, at the lesser of (a) an interest rate equal to two percent (2%) per annum in excess of the interest rate set forth in Section 2(a) hereof and (b) the highest rate of interest allowable under applicable law. 4. PAYMENTS. (a) PRINCIPAL; INTEREST AND ENFORCEMENT COSTS. Subject to Section 7 below and, if applicable, Section 9 of the CCC Information Services Group Inc. 2000 Stock Incentive Plan, (i) the outstanding principal amount of this Note, (ii) all accrued and unpaid interest thereon and (iii) all of Payee's costs and expenses (including reasonable fees and expenses of Payee's attorneys, accountants and other professional commitments) of enforcing this Note ("ENFORCEMENT COSTS"), shall be due and payable in full on the earliest to occur of (A) the fifth (5th) anniversary of the date hereof, (B) any acceleration of the Obligations pursuant to Section 7 below, (C) 30 days following the termination of Maker's employment with CCC Information Services Inc. (the "Company") for any reason (each such event, the "MATURITY"). All amounts due under this Note, including, without limitation, principal, interest and Enforcement Costs are collectively referred to herein as the "OBLIGATIONS." (b) MAKING OF PAYMENTS. All payments of the Obligations in respect of this Note shall be made by delivery of a certified or bank cashier's check or of other immediately available funds and delivered to Payee on the date or dates due at the address of Payee set forth on the signature page hereof, or at such other place as the holder hereof may from time to time designate in writing. Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day (as defined below), such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest on this Note. For purposes of this Note, "BUSINESS DAY" means each day other than a Saturday, a Sunday or any other day on which banking institutions in Chicago, Illinois are authorized or obligated by law or executive order to be closed. 5. PREPAYMENT. (a) VOLUNTARY PREPAYMENT. Maker, without premium or penalty, may prepay the Obligations in whole or in part upon three (3) business days' prior written notice to Payee. (b) APPLICATION OF PREPAYMENT PROCEEDS. All proceeds of any prepayments made pursuant to this Section 5 shall be applied first to the payment of Enforcement Costs, second to the payment of accrued but unpaid interest hereon and third to the payment of the outstanding principal balance of this Note. 6. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an "EVENT OF DEFAULT" under this Note: 2 (a) PRINCIPAL PAYMENT DEFAULT. Maker shall fail to pay the outstanding principal amount due hereunder, or any portion thereof within five (5) business days of when due, whether at Maturity, at such earlier date as is required by Section 7, or otherwise; (b) INTEREST AND ENFORCEMENT COST PAYMENT DEFAULT. Maker shall fail to pay any interest which has accrued hereunder or any Enforcement Costs within (5) days of when due; (c) DISSOLUTION; TERMINATION. The dissolution, termination and/or liquidation of Payee or the Company; (d) COVENANT DEFAULT. Maker shall default in the observance or performance of any covenant or agreement contained in this Note (other than those set forth in Sections 6(a), 6(b), 6(c), 6(e), 6(f) and 6(g)) and such default shall not of its nature be curable by Maker, or if such default shall be curable, such default shall continue uncured for a period of ten (10) days after receipt by Maker of written notice from Payee to such effect; (e) BANKRUPTCY, ETC. Maker becomes insolvent or generally fails to pay, or admits in writing his inability or refusal to pay, his debts as they become due; or Maker's application for, consent to or acquiescence in, the appointment of a trustee in bankruptcy, receiver or other custodian for Maker or any of his property or assets, or Maker's making a general assignment for the benefit of his creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for Maker or for a substantial part of his property or assets and such appointment is not discharged within 60 days thereafter; or any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any liquidation proceeding is commenced in respect of Maker and, if such case or proceeding is not commenced by Maker, it is either (i) consented to or acquiesced in by Maker, or (ii) remains undismissed for 60 days; (f) DEFAULT UNDER OTHER OBLIGATIONS TO PAYEE. Maker defaults on any obligations of Maker to Payee (or its subsidiaries) under any agreements between the Payee (and/or its subsidiaries) and the Maker relating to Maker's employment or engagement by the Company (and/or its subsidiaries), which default has not been cured during any applicable cure period provided in such agreements; or (g) USE OF PROCEEDS. Use of the proceeds of the Loan for any purpose other than payment of the exercise price upon the "exercise" of Maker's options to acquire shares of common stock from Payee. 7. REMEDIES. Upon or at any time after the occurrence of an Event of Default specified in Sections 6(a), 6(b), 6(c), 6(d), 6(f) or 6(g) hereof, the Obligations shall, at the option of Payee, become due and payable without presentment, demand, protest, notice of acceleration, notice of intent to accelerate or other notice of any kind, all of which are hereby expressly waived by Maker, anything in this Note to the contrary notwithstanding. Upon the occurrence of an Event of Default specified in Section 6(e) hereof, the Obligations shall thereupon and concurrently 3 therewith become due and payable. The Maker and every endorser or guarantor hereof agrees, subject only to any limitation imposed by law, to pay on demand all expenses, including reasonable attorneys' fees, disbursements and legal expenses, incurred by the holder of this Note in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by acceleration or otherwise, in addition to any other remedy available in law or equity. 8. WAIVERS. Maker and every endorser and guarantor of this Note hereby jointly and severally waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement hereof and that no such extension or other indulgence, and no substitution, release or surrender of collateral, and no discharge or release of any other party primarily or secondarily liable hereof, shall discharge or otherwise affect the liability of Maker. No delay or omission on the part of holder in exercising any right hereunder shall operate as a waiver of any such right, and the waiver of any such right on any one occasion shall not be construed as a bar to or waiver of any such right on any future occasion. 9. TRANSFER OF NOTE. Until notified by Payee in writing of the transfer of this Note, Maker shall be entitled to deem Payee or such person who has been so identified by Payee in writing to Maker as the owner and holder of this Note. 10. NOTICES. Every notice or other communication required or desired to be given hereunder shall be in writing and shall be delivered either by personal delivery, telegram, a nationally recognized courier service, postage prepaid certified or registered mail, return receipt requested, or facsimile transmission with acknowledgment of receipt, addressed to the party to whom intended at the address set forth on the signature page attached to this Note or at such other address as the intended recipient previously shall have designated by written notice. Notice by courier or certified or registered mail shall be effective on the date it is officially recorded as delivered to the intended recipient by return receipt or similar acknowledgment, or the date of attempted delivery where delivery is refused by the intended recipient. All notices and communications delivered in person shall be deemed to have been delivered to and received by the addressee, and shall be effective, on the date of personal delivery. Any notice transmitted by telegram or facsimile transmission shall be deemed to have been delivered to and received by the addressee, and shall be effective, on the date said notice is delivered to the telegram company for transmission or received by the recipient, respectively. 11. GOVERNING LAW. This Note shall be governed and construed and the rights and liabilities of the parties hereto shall be determined in accordance with the internal laws of the State of Illinois, without regard to the conflict of laws principles thereof. 12. JURISDICTION; SERVICE OF PROCESS. Maker hereby submits to the nonexclusive jurisdiction of the United States Federal and State of Illinois courts for all purposes of or in connection with this Agreement; provided that nothing in this Agreement shall affect Payee's right to bring any action or proceeding against Maker or Maker's property in the courts of any other jurisdiction. Maker hereby consents to process being served in any suit, action or proceeding of the nature referred to above either (a) by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to its address shown below 4 its signature hereto or (b) by serving a copy thereof upon Maker's authorized agent for service of process (to the extent permitted by applicable law, regardless whether the appointment of such agent for service of process for any reason shall prove to be ineffective or such agent for service of process shall accept or acknowledge such service); provided that, to the extent lawful and practicable, written notice of said service upon said agent shall be mailed by registered or certified mail, postage prepaid, return receipt requested, to Maker at Maker's address shown below its signature hereto. Maker agrees that such service, to the fullest extent permitted by law, (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall be taken and held to be valid personal service upon and personal delivery to Maker. Nothing herein shall affect Payee's right to serve process in any other manner permitted by law, or limit Payee's right to bring proceedings against Maker in the courts of any other jurisdiction. 13. WAIVER OF JURY TRIAL. MAKER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS NOTE, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. 14. ASSIGNMENT. This Note and all rights and remedies hereunder shall be fully assignable by Payee and, following such assignment, any such assignee shall be deemed the "Payee" for all purposes hereunder. Neither this Note nor any obligations or duties hereunder may be sold, assigned or delegated by the Maker without the prior written consent of the Payee. 15. DISTRIBUTION INSTRUCTIONS. Maker hereby instructs Payee to make payment of all amounts borrowed hereunder by Maker directly to Payee in payment of the exercise price upon the "exercise" of Maker's options to acquire common stock shares from Payee. 5 IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the day and year first above written, though this note was executed at a later date. MAKER: /s/ Githesh Ramamurthy ------------------------------ Githesh Ramamurthy PAYEE'S ADDRESS: CCC Information Services Group Inc. World Trade Center Chicago 444 Merchandise Mart Chicago, Illinois 60654 Attention: Chief Financial Officer Telephone No.: (312) 222-4636 6 EX-13.1 9 a2073198zex-13_1.txt CHOICEPARTS AUDITED FINANCIALS Exhibit 13.1 Financial Statements CHOICEPARTS, LLC YEAR ENDED DECEMBER 31, 2001 AND PERIOD FROM MAY 4, 2000 (INCEPTION) TO DECEMBER 31, 2000 WITH REPORT OF INDEPENDENT AUDITORS ChoiceParts, LLC Financial Statements Year ended December 31, 2001 and period from May 4, 2000 (inception) to December 31, 2000 CONTENTS Report of Independent Auditors.................................................1 Financial Statements Balance Sheets.................................................................2 Statements of Operations.......................................................3 Statements of Members' Equity..................................................4 Statements of Cash Flows.......................................................5 Notes to Financial Statements..................................................6

Independent Auditors' Report Board of Directors ChoiceParts, LLC We have audited the accompanying balance sheets of ChoiceParts, LLC (the Company) as of December 31, 2001 and 2000, and the related statements of operations, members' equity, and cash flow for the year ended December 31, 2001 and the period from May 4, 2000 (inception) to December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to report on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ChoiceParts, LLC at December 31, 2001 and 2000, and the results of its operations and its cash flows for the year ended December 31, 2001 and the period from May 4, 2000 (inception) to December 31, 2000, in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses since inception and filed a lawsuit against a competitor in January 2001 citing anticompetitive practices by this competitor and its ultimate owners. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with regard to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result from the outcome of this uncertainty. February 15, 2002 /s/ Ernst & Young LLP 1 ChoiceParts, LLC Balance Sheets
DECEMBER 31 2001 2000 --------------------------------- ASSETS Current assets: Cash and equivalents $ 1,036,955 $ 3,566,620 Due from Reynolds & Reynolds and ADP 1,409,453 1,517,973 Deposits and other current assets 234,164 418,000 -------------------------------- Total current assets 2,680,572 5,502,593 Property and equipment, net 771,041 853,457 Capitalized software, net of $274,270 of amortization 961,730 ------ Restricted cash 500,000 500,000 -------------------------------- Total assets $ 4,913,343 $ 6,856,050 ================================ LIABILITIES AND MEMBERS' EQUITY Current liabilities: Accounts payable $ 912,864 $ 1,627,144 Due to Reynolds & Reynolds and ADP 772,892 941,972 Accrued payroll 819,444 572,398 Other accrued liabilities 726,822 736,756 -------------------------------- Total current liabilities 3,232,022 3,878,270 Mandatorily redeemable preferred member's interest 1,300,320 1,159,468 Members' equity: Members' interests 16,948,002 9,348,002 Accumulated deficit (16,567,001) (7,529,690) -------------------------------- Total members' equity 381,001 1,818,312 -------------------------------- Total liabilities and members' equity $ 4,913,343 $ 6,856,050 ================================
See accompanying notes. 2 ChoiceParts, LLC Statements of Operations
PERIOD FROM MAY 4, 2000 YEAR ENDED (INCEPTION) TO DECEMBER 31, DECEMBER 31, 2001 2000 ---------------------------------- Net sales $ 14,952,980 $ 9,816,867 Cost of sales (8,747,901) (6,013,591) ---------------------------------- Gross profit 6,205,079 3,803,276 Sales and marketing 1,624,097 553,661 Product development 4,301,381 3,060,066 Asset impairment - 3,396,859 General and administrative 9,367,446 4,375,934 ---------------------------------- Total operating expenses 15,292,924 11,386,520 Operating loss (9,087,845) (7,583,244) ---------------------------------- Interest income 191,386 138,022 ---------------------------------- Net loss $ (8,896,459) $ (7,445,222) ==================================
See accompanying notes. 3 ChoiceParts, LLC Statements of Members' Equity
MEMBERS' ACCUMULATED INTERESTS DEFICIT TOTAL ----------------------------------------------- Balance at May 4, 2000 $ - $ - $ - Capital contributions 9,348,002 - 9,348,002 Dividends on Mandatorily Redeemable Preferred (84,468) (84,468) Member's Interest Net loss (7,445,222) (7,445,222) ----------------------------------------------- Balance at December 31, 2000 9,348,002 (7,529,690) 1,818,312 Capital contributions 7,500,000 7,500,000 Dividends on Mandatorily Redeemable Preferred (140,852) (140,852) Member's Interest Warrants issued in acquisition 100,000 100,000 Net loss (8,896,459) (8,896,459) ----------------------------------------------- Balance at December 31, 2001 $ 16,948,002 $ (16,567,001) $ 381,001 ===============================================
See accompanying notes 4 ChoiceParts, LLC Statements of Cash Flows
PERIOD FROM MAY 4, 2000 YEAR ENDED (INCEPTION) TO DECEMBER 31, DECEMBER 31, 2001 2000 ------------------------------------ OPERATING ACTIVITIES Net loss $ (8,896,459) $ (7,445,222) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 640,188 69,641 Asset impairment -- 3,396,859 Changes in operating assets and liabilities: Due from Reynolds & Reynolds and ADP 108,520 (1,517,973) Deposits and other assets 183,836 (418,000) Accounts payable (714,280) 1,627,144 Due to Reynolds & Reynolds and ADP (169,080) 941,972 Accrued payroll 247,046 572,398 Other accrued liabilities (9,934) 736,756 ------------------------------------ Net cash used in operating activities (8,610,163) (2,036,425) INVESTING ACTIVITIES Purchase of property and equipment (283,502) (923,098) Acquisition of software (1,136,000) Purchases and development of software (2,973,857) Purchases of letter of credit (restricted cash) -- (500,000) ------------------------------------ Net cash used in investing activities (1,419,502) (4,396,955) FINANCING ACTIVITIES Member equity contributions 7,500,000 8,925,000 Preferred member equity contributions -- 1,075,000 ------------------------------------ Net cash provided by financing activities 7,500,000 10,000,000 ------------------------------------ Net increase in cash (2,529,665) 3,566,620 Cash - Beginning of period 3,566,620 -- ------------------------------------ Cash - End of period $ 1,036,955 $ 3,566,620 ==================================== Noncash activities: Contribution of developed software $ -- $ 423,002 Warrants issued in acquisition of software $ 100,000 $ -- ====================================
See accompanying notes. 5 ChoiceParts, LLC Notes to Financial Statements December 31, 2001 1. DESCRIPTION OF BUSINESS AND FORMATION OF COMPANY ChoiceParts, LLC (the Company) develops and operates aftermarket auto parts locator/transaction products for the automobile dealer and collision repair market. The Company was formed in April 2000 and commenced operations May 4, 2000, as a limited liability company in accordance with the Limited Liability Company Act (LLCA) of the state of Delaware. The Company does not have a termination date. Simultaneously with the formation of the Company, the Company's members entered into an operating agreement dated May 4, 2000. The Members, comprised of ADP, CCC Information Services and Reynolds & Reynolds, formed the Company to develop the next-generation internet-based auto parts locator product. The Members contributed $10,423,002, including $423,002 of contributed technology, during 2000 and $7,500,0000 during March 2001. ADP and Reynolds & Reynolds contributed beneficial ownership of legacy locator products owned by ADP and Reynolds & Reynolds to the Company. The contributed products are subscription-based and provided to approximately 6,800 auto dealerships across the United States. In accordance with the terms of the Operating Agreement, the Members continue to deliver the locator products to customers, collect amounts due from the customers and charge operating and royalty expenses to the Company. The net amount collected from the customer less operating costs and royalty costs is remitted to the Company from Reynolds & Reynolds or ADP. The Operating Agreement states that these billing services will end on the earlier of the first anniversary of the commencement of operations, May 4, 2001, or 60 days after the launch of the internet-based product. By mutual agreement, these Founders continue to provide billing services and the Company expects these services to continue on an as needed basis. 2. GOING CONCERN AND MANAGEMENT'S PLANS The Company has incurred significant net losses since its inception. Due to the uncertainty of the lawsuit as described in Note 10, there is a risk that certain data required in order for the Company to offer its product to the large majority of the target market will not be made available, or will be made available at such a late date as to make questionable the Company's ability to capture significant market share. The anticipated increase in revenues from the new product may not be realized, and the operating losses may continue. The Company expects that significant on-going operating expenditures 6 will be necessary to successfully implement its business plan and develop its service offering. These factors raise substantial doubt about the Company's ability to continue as a going concern. Implementation of the plans the Members have for the Company and its ability to continue as a going concern depend on successful resolution of the lawsuit and/or successful development of alternative products and services. While there is no assurance that the Company will be successful in its efforts, the Company continues to pursue the lawsuit, and expects to achieve a favorable outcome. The Company also continues to pursue and develop additional products and services in its market. In accordance with the Members' Agreement, at December 31, 2001 the Members are committed to contribute up to an additional $7,500,000 capital investment, of which $1,000,000 was received in February 2002. The Company believes its present funding will be sufficient to support the Company's liquidity requirements through April 2002. If the Company is unable to secure rights to the data sought in the lawsuit and is unsuccessful in the development of alternative products and services, management may be required to curtail the Company's development and other activities, a cessation of operations is likely. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair value. Restricted cash represents cash held in a certificate of deposit as security for the Company's office lease obligations. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 7 PROPERTY AND EQUIPMENT Property and equipment is stated on the basis of cost. Depreciation is computed by the straight-line method over the estimated useful lives as follows:
ESTIMATED ASSET CLASSIFICATION USEFUL LIFE ------------------------------------------------------------------ Computers 3 Office equipment 3 Capitalized Software 3 Leasehold improvements 5
REVENUE RECOGNITION The Company recognized revenue upon notification of delivery of the locator product from ADP or Reynolds & Reynolds. ADVERTISING COSTS The Company expenses advertising costs as incurred. Advertising costs expensed were $96,892 and $363,460 in 2001 and 2000, respectively. PRODUCT DEVELOPMENT COSTS Product development costs consist primarily of payroll and related expenses and the expenses of outside technical contractors, which were incurred for the development of the Company's web-based locator/transaction product. Product development costs are accounted for in accordance with EITF 00-2, ACCOUNTING FOR WEB SITE DEVELOPMENT Costs and SOP 98-1, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE. During 2001, the Company incurred internal payroll costs related to its web-based locator product. Total costs of $3,073,000 were incurred in 2001 for maintenance and minor enhancements to the web-based locator/transaction products. These costs were expensed as incurred. 8 INCOME TAXES The Company was formed as a limited liability company. The Company's income (loss) is treated for federal and state income tax purposes, substantially as if it were a partnership. Each Member's respective equitable shares in the taxable income of the Company are reported on that Member's income tax returns. Accordingly, the accompanying financial statements reflect no provision or liability for income taxes. STOCK COMPENSATION As permitted by Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ( SFAS 123), the Company uses the intrinsic value method to account for stock options as set forth in Accounting Principles Board No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25). RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Number (FAS) 141, BUSINESS COMBINATIONS, and FAS 142, GOODWILL AND OTHER INTANGIBLES, effective for fiscal years beginning after December 31, 2001. The application of the provisions of these statements are not expected to affect the earnings or financial position of the Company. 4. ASSET IMPAIRMENT During 2000, the Company capitalized $3,396,859 of certain costs paid to outside consultants and to employees to develop the Company's web-based locator/transaction product. Pursuant to SFAS No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, the Company evaluated the recoverability of these long-lived assets. This web-based locator product requires authorization to utilize certain data from automobile manufacturers in order to be of commercial use to the Company's customers. However, to date, the Company has been unable to obtain such data from, General Motors, Ford, and Daimler Chrysler. While the Company has filed a lawsuit to obtain this data and related relief (see Note 10), the uncertainty of the outcome of the lawsuit, the rapidly changing e-commerce environment, and potentially increased competition in this market has raised substantial doubt about the recoverability of this asset. Accordingly, during the fourth quarter of 2000, the Company adjusted the carrying value of this asset to zero. 9 5. PROPERTY AND EQUIPMENT Property and equipment consist of the following:
DECEMBER 31 2001 2000 ----------------------------- ----------------------------- Computers $ 968,104 $ 702,002 Office furniture and equipment 78,432 73,759 Leasehold improvements 160,064 147,337 ----------------------------- 1,206,600 923,098 Less: Accumulated depreciation and (435,559) (69,641) amortization ----------------------------- $ 771,041 $ 853,457 =============================
6. ROYALTIES The Company is required to pay royalty fees to the Members as defined in the Services Agreement. These royalty fees approximate 30% of the Company's revenues through May 4, 2001; 25% of revenues from May 4, 2001 through May 4, 2002; 20% of revenues from May 4, 2002 through May 4, 2005; 15% of revenues from May 4, 2005 through May 4, 2006; and 10% of revenues from May 4, 2007 through May 4, 2010. Royalty fees amounted to $3,953,536 and $2,945,046 in 2001 and 2000 respectively, and were classified as cost of sales. 7. COMMITMENTS The Company leases premises and equipment under operating lease agreements and contracted services. Total rental expense under these agreements was approximately $1,633,000 and $426,000 in 2001 and 2000, respectively. Future minimum lease payments, as of December 31, 2001, relating to operating lease agreements are shown below: 2002 $ 1,361,836 2003 725,626 2004 719,522 2005 719,522 2006 and thereafter 239,841 ------------ $ 3,766,347 ============

10 8. MANDATORILY REDEEMABLE PREFERRED MEMBER'S INTEREST AND MEMBERS' EQUITY The Operating Agreement indicates the Preferred Member, Reynolds & Reynolds, will be allocated operating profits and losses prior to allocating operating profits and losses to the Members. The Preferred Member will accrue a dividend each year (12% for the first three years since inception and 15% for the next two years). The Company shall, at any time with the majority of the votes of the Board of Directors, have the right to redeem the Preferred Member's equity interest plus any accrued and unpaid dividends (Preferred Amount). The Preferred Amount shall be redeemed upon a change in control of the Company or at the initial public offering of the Company stock, as defined in the Operating Agreement. The Preferred Amount shall be redeemed automatically on the fifth anniversary of inception of the Company. 9. SHARE OPTION PLAN During December 2000, the Company's Board of Directors approved the 2000 Share Option Plan (the Plan). The Plan provides for the issuance of options to purchase membership interests in the Company. The options are convertible into shares equal to .00001 percent of the aggregate membership interests in the Company. The options will not be exercisable, even if vested, prior to the earliest of (a) the date the Company becomes a publicly traded corporation; (b) a change in control of the Company; or (c) July 31, 2003. The options can be granted for periods of up to 10 years and generally vest ratably over a four-year period with initial vesting occurring on the first anniversary from the grant date and semi-annually thereafter. Had stock options been accounted for under the fair value method recommended by SFAS 123, the Company's net loss on a pro forma basis would have been:
DECEMBER 31, 2001 2000 ~~Net loss, as reported ($8,896,459) ($7,445,222) Net loss, pro forma ($8,974,784) ($7,562,790)~~
The fair value of stock options used to compute pro forma net loss is the estimated present value at the grant date using the minimum value option-pricing model with the following assumptions: dividend yield of 0%; risk-free interest rate of 6.00%; and a weighted-average expected option life of five years. 11 A summary of stock option information follows:
WEIGHTED- AVERAGE NUMBER OF EXERCISE SHARES PRICE ----------------------------------- Options granted 723,500 $ 2.50 ------------ Options outstanding at December 31, 2000 723,500 2.50 Options granted 181,500 2.50 Options canceled (423,000) 2.50 ------------ Options outstanding at December 31, 2001 482,000 2.50
The fair value of options granted during 2001 was $.65. No options were exercisable at December 31, 2001. The outstanding options at December 31, 2001, have a weighted-average remaining contractual life of 9.2 years. 12 10. PENDING LITIGATION On January 4, 2001, the Company filed a federal antitrust lawsuit against General Motors, Ford, DaimlerChrysler, and a venture controlled by these entities known as OEConnection, LLC, asserting multiple violations of the Sherman Antitrust Act. Among other relief, the Company is requesting the federal district court in Chicago to enjoin the defendants' alleged concerted anticompetitive efforts aimed at blocking the Company from providing its customized electronic automotive parts locator/transaction system to automobile retailers and repair shops nationwide. The case has been litigated through the preliminary injunction stage, although the federal court has determined to withhold any ruling at the present time to enable the parties an opportunity to conduct commercial settlement talks, which are continuing. 11. ACQUISITION OF SOFTWARE On April 12th, 2001 the Company acquired the exclusive rights to commercialize the CarStation CommerceSystem, a product of OnStation Corporation. Under the agreement, the Company became the exclusive source for providing the CarStation CommerceSystem (CCS), an integrated Internet-based parts management and communication system that enables automotive collision repair professionals and their parts suppliers to transact and communicate online. As part of the agreement, the Company also acquired the CarStation.com e-commerce hub and its customer base of automotive parts dealers, recyclers, and collision repair shops. The Company paid $950,000 in cash, issued warrants to acquire 1% of the Company, and incurred $186,000 in transition costs to transfer the product to its operating platform. The warrants have an exercise price of $1.00 and a term of 10 years. The Company ascribed a value to these warrants of $100,000. The acquisition costs of $1,236,000 will be amortized over a thirty-six month period. During 2001, 274,270 of these costs were amortized to general and administrative expense in the statement of operations. 12. SUBSEQUENT EVENTS In February 2002, the Company received an additional capital contribution of $1,000,000 from its three Members. 13 EX-13.2 10 a2073198zex-13_2.txt ENTERSTAND LIMITED AUDITED FINANCIALS Exhibit 13.2 ENTERSTAND LIMITED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2001 ENTERSTAND LIMITED TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2001 - --------------------------------------------------------------------------------
PAGES Report of Independent Accountants 1 Financial Statements: Statement of Operations 2 Balance Sheet 3 Statement of Cash Flows 4 Statement of Stockholders' Deficit and Comprehensive Income 5 Notes to Financial Statements 6-8
REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Enterstand Limited: In our opinion, the accompanying balance sheet and the related statements of operations, of cash flows and stockholders' deficit and comprehensive income present fairly, in all material respects, the financial position of Enterstand Limited at December 31, 2001 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In June of 2001 the Company's shareholders decided to shut down its operations. As of December 31, 2001 the related wind-down of the joint venture was substantially complete. Further, in March of 2002 the minority shareholder of the Company purchased all of the remaining shares of the Company. See Note 8 for additional information. /s/ PricewaterhouseCoopers LLP Leicester, England March 15, 2002 ENTERSTAND LIMITED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2001 - --------------------------------------------------------------------------------
[British Pound] Revenues - Operating expenses: General and administrative, related parties (2,293,578) Depreciation (114,199) Forgiveness of intercompany balances, related parties 6,194,700 Other general and administrative (470,594) -------------- Operating income 3,316,329 Other income and expense: Interest expenses, related parties (592,106) Interest income 31 Foreign exchange loss, related party debt (133,527) -------------- Income before income taxes 2,590,727 Income taxes - -------------- Net income and comprehensive income 2,590,727 ==============
The accompanying notes are an integral part of these financial statements. -2- ENTERSTAND LIMITED BALANCE SHEET DECEMBER 31, 2001 - --------------------------------------------------------------------------------
[British Pound] ASSETS Cash 15,118 ------------- Total assets 15,118 ============= LIABILITIES AND STOCKHOLDERS' DEFICIT Accruals and other current liabilities 21,007 ------------- Total current liabilities 21,007 Long-term debt, related parties 7,942,788 ------------- Total liabilities 7,963,795 ------------- Commitments and contingencies Common stock (L1 part value, 50,000 shares authorized, 17,500 shares issued and outstanding) 17,500 Additional paid-in capital 9,430,083 Accumulated deficit (17,396,260) ------------- Total stockholders' deficit (7,948,677) ------------- Total liabilities and stockholders' deficit 15,118 =============
The accompanying notes are an integral part of these financial statements. -3- ENTERSTAND LIMITED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2001 - --------------------------------------------------------------------------------
[British Pound] Operating activities: Net income 2,590,727 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 114,199 Other, net (42,984) Changes in operating assets and operating liabilities: Accounts receivable, net 6,600 Other current assets 606,832 Accounts payable and accrued expenses 17,507 Related party payable (4,043,143) Other liabilities 725,633 ------------ Net cash used in operating activities (24,629) ------------ Cash flows from investing activities: Capital expenditures (11,281) Other, net 50,910 ------------ Net cash provided by investing activities 39,629 ------------ Cash flows from financing activities: Principal payments on long-term debt - ------------ Net cash used in financing activities - ------------ Net increase in cash 15,000 Cash and cash equivalents: Beginning of year 118 ------------ End of year 15,118 ============
The accompanying notes are an integral part of these financial statements. -4- ENTERSTAND LIMITED STATEMENT OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2001 - --------------------------------------------------------------------------------
OUTSTANDING COMMON STOCK ------------------------------------ ADDITIONAL TOTAL NUMBER OF PAR VALUE PAID-IN ACCUMULATED STOCKHOLDERS' SHARES CAPITAL DEFICIT DEFICIT December 31, 2000 17,500 17,500 9,430,083 (19,986,987) (10,539,404) Proceeds from issuance of common stock - - - - - Translation adjustment - - - - - Net income and comprehensive income - - - 2,590,727 2,590,727 ---------- ---------- ------------ ------------- ----------- December 31, 2001 17,500 17,500 9,430,083 (17,396,260) (7,948,677) ========== ========== ============ ============= ===========
The accompanying notes are an integral part of these financial statements. -5- ENTERSTAND LIMITED NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2001 - -------------------------------------------------------------------------------- 1. NATURE OF OPERATIONS AND BUSINESS CONDITIONS Enterstand Limited ("Enterstand" or the "Company") was incorporated in December 1998 and is in the business of software development. The Company is located and conducts its business in the United Kingdom ("U.K."). In June 2001 Hearst Communications, Inc. ("Hearst"), the majority shareholder, and Rayfield Limited ("Rayfield"), the minority shareholder, decided to shut down the operations of Enterstand. As of December 31, 2001, with the exception of certain remaining contractual commitments, the related wind-down is substantially completed. See Note 8 for additional information. 2. SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments readily convertible into cash (with original maturities of three months or less) to be cash equivalents. SOFTWARE DEVELOPMENT COSTS The Company expenses research and development costs as incurred. The Company has evaluated the establishment of technological feasibility of its software products in accordance with Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed." The Company intends to sell its products in a market that is subject to rapid technological change, new product development and changing customer needs. Accordingly, technological feasibility of the Company's products is generally not established until the development of the product is nearly complete. The Company defines technological feasibility as the completion of a working model. The time period during which costs could be capitalized, from the point of reaching technological feasibility until the time of general product release, is very short and, consequently, amounts subject to capitalization have not been significant. FUNCTIONAL CURRENCY AND FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's functional currency is the U.K. Pound. Financial assets and liabilities denominated in currencies other than the U.K. Pound are valued at their fair value in Pounds in the Company's balance sheet and any changes in fair value are reflected in operations in the period of the change. INCOME TAXES The Company did not pay any amounts for income taxes during the year ended December 31, 2001. The Company has deferred tax assets of approximately British Pound 4.6 million relating to net operating loss carryforwards. The Company has established a deferred income tax asset valuation allowance for the full amount of these deferred tax assets, as it is more likely than not that the future benefit of these losses will not be realized. The Company's net operating losses do not expire. -6- COMPREHENSIVE PROFIT Statement of Financial Accounting Standards (SFAS) No. 130 requires that a full set of general purpose financial statements include the reporting of "comprehensive income." Comprehensive income is comprised of two components: net income and other comprehensive income, with other comprehensive income being comprised of foreign currency items, minimum pension liability adjustments and unrealized gains and losses on certain investments in debt and equity securities. During the year ended December 31, 2001, comprehensive income consisted only of net income. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION During its history the Company operated as one segment. Substantially all of the Company's identifiable assets and activities were located in the United Kingdom. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES On January 1, 2001, the Company adopted the provisions of SFAS No. 133, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" ("SFAS 133"). SFAS 133 requires the Company to recognize all derivative instruments as assets or liabilities in its balance sheet and measure them at fair value. The effect of adopting SFAS 133 did not have a material effect on the Company's consolidated results of operations or financial position, as we have not been party to any derivative instruments. PERVASIVENESS OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 3. FIXED ASSETS During 2001 the Company wrote-off or disposed of all fixed assets. 4. INVESTMENTS During 2000, the Company invested British Pound 9,254 in common stock of CCC Pathways Espana, a software development company located in Spain. Also during 2000, the Company determined that this investment and the Company's receivable balance with CCC Pathways Espana were impaired and recorded an impairment loss totaling British Pound 149,420. On October 26, 2001 the Company terminated its consulting contract entered into in Spain and as part of the termination agreement it was agreed that the Spanish consultant would provide appropriate assistance and advice in respect of winding down the operations of CCC Pathways Espana. -7- 5. RELATED PARTIES During the year the Company was invoiced British Pound 398,201 by CCC Information Services Inc. ("CCC") for salary purchases paid out on the Company's behalf. The amount owed to CCC at December 31, 2000 which has been forgiven was British Pound 2,986,845. The Company was also invoiced British Pound 1,967,099 by Rayfield Limited ("Rayfield"), a subsidiary of CCC and a minority shareholder, for salary costs and fixed asset purchases paid out on the Company's behalf. The amount owed to Rayfield at December 31, 2001 which has been forgiven was British Pound 3,207,855. 6. LONG-TERM DEBT, RELATED PARTIES Long-term debt, related parties consists of the following:
British Pound Due to CCC Information Services, Inc. 6,751,370 Due to Hearst Communications, Inc. 1,191,418 -------------- Total long-term debt, related parties 7,942,788 ==============
The above debt bears interest at an annual rate of 9%, compounded quarterly. All long-term debt matures on March 3, 2005. This debt is denominated in United States Dollars and has been adjusted to its fair value as of December 31, 2001, based on the period-end exchange rate. As a result, a foreign exchange loss of British Pound 133,527 was recognized in operations during the year ended December 31, 2001. No interest was paid during the year ended December 31, 2001. 7. COMMON STOCK At December 31, 2001, the Company had authorized 50,000 shares of British Pound 1 par value common stock and 17,500 shares were issued and outstanding. All proceeds from common stock in excess of the stated par value per share are reflected in additional paid-in capital. 8. SUBSEQUENT EVENTS In March 2002, Hearst and Rayfield, the Company's majority and minority shareholders, respectively, terminated their joint venture agreement regarding the Company, and Rayfield purchased Hearst's interest in the Company for a nominal sum. Additionally, all long-term debt obligations of the Company were forgiven by Hearst and CCC Information Services, Inc. in connection with the decision to terminate the joint venture agreement. -8- EX-21 11 a2073198zex-21.txt SUBSIDIARIES OF CCC INFORMATION SERVICES GROUP EXHIBIT 21 SUBSIDIARIES OF CCC INFORMATION SERVICES GROUP INC. CCC INFORMATION SERVICES INC. CERTIFIED COLLATERAL CORPORATION OF CANADA, LTD. CCC CONSUMER SERVICES INC. CCC CONSUMER SERVICES SOUTHEAST INC. CCC INTERNATIONAL HOLDING LTD RAYFIELD LIMITED (DBA CCC INTERNATIONAL) CCC PARTSCO HOLDINGS, INC. ASSET MANAGEMENT INC. CREDIT CARD SERVICE CORPORATION EX-23 12 a2073198zex-23.txt CONSENT OF PWC CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No.'s 333-51328, 333-67645, 333-79983, and 333-47205) and Form S-3 (No. 333-64132) of CCC Information Services Group Inc. of our report dated February 1, 2002, except as to paragraph 6 of Note 4, which is as of March 15, 2002, relating to the financial statements and financial statement schedule, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP Chicago, Illinois March 25, 2002 ~~-----END PRIVACY-ENHANCED MESSAGE-----~~