SCHEDULE 14A INFORMATION


                Proxy Statement Pursuant to Section 14(a) of the
                Securities Exchange Act of 1934 (Amendment No. 4)


                           Filed by the Registrant [X]
                 Filed by a Party other than the Registrant [ ]

Check the appropriate box:

         [X]   Preliminary Proxy Statement
         [ ]   Confidential,  for use of the  Commission  Only (as  permitted by
               Rule 14a-6(e)(2))
         [ ]   Definitive Proxy Statement
         [ ]   Definitive Additional Materials
         [ ]   Soliciting Material Pursuant to Section  240.14a-11(c) or Section
               240.14a-12

                          CUMBERLAND TECHNOLOGIES, INC.
                         ------------------------------
                (Name of Registrant as Specified In Its Charter)

              CUMBERLAND TECHNOLOGIES, INC. AND FRANCIS M. WILLIAMS
                         ------------------------------
                    (Name of Person(s) Filing Proxy Statement
                          if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  No fee required.

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     1.   Title of each class of securities to which transaction applies:

     2.   Aggregate number of securities to which transaction applies:

     3.   Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined.):

     4.   Proposed maximum aggregate value of transaction:

     5.   Total fee paid:

[ ]  Fee paid previously with preliminary materials.

[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

1.   Amount Previously Paid:

2.   Form, Schedule or Registration Statement No.:

3.   Filing Party:

4.   Date Filed:





                          CUMBERLAND TECHNOLOGIES, INC.
                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS


                         To be held on January __, 2004


TO THE SHAREHOLDERS
OF CUMBERLAND TECHNOLOGIES, INC.


     NOTICE  IS  HEREBY  GIVEN  that the  Special  Meeting  of  Shareholders  of
Cumberland  Technologies,  Inc., a Florida corporation (the "Company"),  will be
held at  ________  PM,  local  time,  on January  ___,  2004,  at the  Company's
headquarters  at 4311 W.  Waters  Avenue,  Tampa,  Florida  33614 to  approve an
amendment to the Company's Amended and Restated  Articles of Incorporation  (the
"Articles")  which will effect a 1-to-150  reverse  stock split of the Company's
common stock.


     Fractional  shares resulting from the reverse stock split will be cancelled
and  converted  into the right to  receive  a  minimum  of $0.70 per share (on a
pre-reverse stock split basis).  The reverse stock split will have the effect of
allowing the Company to terminate its registration under the Securities Exchange
Act of 1934.


     The Board of  Directors  has fixed the close of business  on December  ___,
2003 as the record date for determining  those  shareholders  entitled to notice
of, and to vote at, the Special Meeting and any  adjournments  or  postponements
thereof.


     Whether or not you expect to be present,  please sign,  date and return the
proxy form sent to you as promptly as possible.


                       By Order of the Board of Directors,




                /s/ Joseph M. Williams
                -------------------------------------
                Joseph M. Williams
                Secretary/Treasurer
                Tampa, Florida 33605



ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. THOSE SHAREHOLDERS
WHO ARE  UNABLE TO ATTEND  ARE URGED TO  EXECUTE  AND  RETURN  THE PROXY FORM AS
PROMPTLY AS  POSSIBLE.  SHAREHOLDERS  WHO EXECUTE A PROXY FORM MAY  NEVERTHELESS
ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.

NEITHER THE SEC NOR ANY STATE SECURITIES  COMMISSION HAS APPROVED OR DISAPPROVED
THIS  TRANSACTION,  PASSED UPON THE MERITS OR FAIRNESS OF THIS  TRANSACTION,  OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION  CONTAINED IN THIS PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.








                                TABLE OF CONTENTS

                                                                            PAGE

INTRODUCTION.................................................................. 1

INFORMATION CONCERNING PROXY.................................................. 1

PURPOSE OF THE MEETING........................................................ 1

OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS............................... 1

REQUIRED VOTE................................................................. 1

REVOCATION OF PROXY........................................................... 2

REVERSE STOCK SPLIT PROPOSAL.................................................. 3
   Summary of Reverse Stock Split Proposal.................................... 3
   Exchange of Stock Certificates and Payment for Fractional Shares........... 5
   Company Stock Options and Warrants......................................... 5

SPECIAL FACTORS............................................................... 5
   Background................................................................. 5
   Purpose and Reasons for the Reverse Stock Split............................ 6
   Fairness of Reverse Stock Split Proposal................................... 8
   Potential Detriments of Reverse Stock Split Proposal to Shareholders;
     Accretion in Ownership and Control of Certain Shareholders...............12
   Consideration for Determining Current Market Price.........................13
   Consideration for Determining Minimum Fixed Price..........................14
   Conduct of the Company's Business after Reverse Stock Split................19
   Structure of Reverse Stock Split...........................................20
   Certain Effects of Reverse Stock Split Proposal on the
     Company's Shareholders...................................................21
   Interests of Certain Persons in the Proposed Transaction...................22
   Material Federal Income Tax Consequences...................................22
   Appraisal Rights; Escheat Laws.............................................23
   Intention to Terminate Public Registration.................................24

MANAGEMENT....................................................................25

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................26

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................27

CERTAIN MARKET INFORMATION....................................................29
   Dividends..................................................................29

SHAREHOLDER PROPOSALS.........................................................30

SELECTED FINANCIAL DATA.......................................................30

FINANCIAL AND OTHER INFORMATION...............................................32

Appendix A     ARTICLES OF  AMENDMENT  TO THE AMENDED AND
               RESTATED  ARTICLES OF INCORPORATION OF
               CUMBERLAND TECHNOLOGIES, INC...................................33



                                       i



                         SPECIAL MEETING OF SHAREHOLDERS
                        OF CUMBERLAND TECHNOLOGIES, INC.

                           PRELIMINARY PROXY STATEMENT

                                  INTRODUCTION


     This Proxy  Statement is furnished in connection  with the  solicitation by
the Board of Directors of Cumberland  Technologies,  Inc., a Florida corporation
(the "Company"),  of proxies from the holders of the Company's common stock (the
"Stock")  for use at the Special  Meeting of  Shareholders  of the Company to be
held at the corporate  headquarters  of Cumberland  Technologies,  Inc., 4311 W.
Waters Avenue, Tampa, Florida 33614 at __________ PM, local time, on January __,
2004 or at any  adjournments or postponements  thereof (the "Special  Meeting").
The  approximate  date that this Proxy  Statement and the enclosed form of proxy
are first being sent or given to holders of common  stock is December  __, 2003.
The Company's  principal  executive offices are located at its corporate offices
at 4311 W. Waters  Avenue,  Tampa,  Florida 33614,  and its telephone  number is
(813) 885-2112.


                          INFORMATION CONCERNING PROXY

     The  enclosed  proxy is  solicited  on  behalf  of the  Company's  Board of
Directors  (the  "Board") and its majority  shareholder  and the Chairman of its
Board of Directors,  Francis M. Williams. The cost of preparing,  assembling and
mailing this Proxy Statement,  the Notice of Special Meeting of Shareholders and
the enclosed proxy will be borne by the Company.  The Company may request banks,
brokers and other custodians,  nominees and fiduciaries to forward copies of the
proxy material to their principals and to request authority for the execution of
proxies.

                             PURPOSE OF THE MEETING

     At the Special Meeting,  the Company's  shareholders will consider and vote
to approve an  amendment  to the  Company's  Amended  and  Restated  Articles of
Incorporation (the "Articles") which will effect a 1-for-150 reverse stock split
of the Company's common stock.

     The reverse  stock  split will have the effect of  allowing  the Company to
terminate its registration under the Securities Exchange Act of 1934.

     Unless  contrary  instructions  are  indicated on the enclosed  proxy,  all
shares  represented by valid proxies received pursuant to this solicitation will
be voted in favor of the amendment to the Articles as described  herein.  In the
event a shareholder specifies a different choice by means of the enclosed proxy,
his or her shares will be voted in accordance with the specifications so made.

                 OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS


     The Board of  Directors  has set the close of business on December __, 2003
as the record  date (the  "Record  Date") for  determining  shareholders  of the
Company  entitled  to notice of and to vote at the  Special  Meeting.  As of the
Record Date,  there were 5,597,244  shares of common stock  outstanding,  all of
which are entitled to one vote on the proposed amendment to the Articles.


                                  REQUIRED VOTE

     Pursuant to the  Articles  and the Florida  General  Corporation  law,  the
affirmative  vote of the  holders of a majority  of the common  shares  that are
present in person or by proxy, and voting, at the Special Meeting is required to
approve the proposed  amendment.  The  representation in person or by proxy of a
majority of the issued and  outstanding  shares of common  stock  entitled to be
cast is necessary to provide a quorum at the Special  Meeting.  Broker non-votes
are  treated  as  shares  as to which  voting  power  has been  withheld  by the
beneficial  owners  thereof  and,  therefore,  as shares not entitled to be cast
thereon.  Thus,  although broker non-votes have no effect on the vote, they have
the practical  effect of reducing the number of  affirmative  votes  required to
approve the  proposed  amendment to the Articles by reducing the total number of




                                       1



shares  entitled to vote  thereon.  Proxies  sent to the Company that are marked
"abstain" with respect to the approval of the proposed amendment will be counted
for the purpose of  determining  the number of common shares  represented at the
Special  Meeting,  but will have no effect in determining  whether the requisite
vote has been  obtained for approval of the  proposed  amendment  other than the
practical effect of reducing the number of affirmative votes required to approve
the  proposed  amendment  to the Articles by reducing the total number of shares
entitled to vote thereon.

     Francis M. Williams, a Director of the Company, directly or indirectly owns
or by irrevocable  proxy  controls,  the voting rights of 2,747,711  shares,  or
49.1%,  of the common  stock  eligible to vote on the  approval of the  proposed
amendment  to the Articles  (excluding  shares held by Kimmins  Corp.  described
below). Kimmins Corp., a Florida corporation ("Kimmins"), a major shareholder of
the Company,  directly or indirectly owns or by irrevocable proxy controls,  the
voting rights of 1,723,290  shares,  or 30.8%,  of the common stock  eligible to
vote on the approval of the proposed amendment to the Articles.  Mr. Williams is
Chairman and majority  shareholder of Kimmins.  Collectively,  Mr.  Williams and
Kimmins control 4,471,001 shares, or 79.9%, of the common stock eligible to vote
on the  proposal.  Mr.  Williams  and Kimmins have advised the Company that they
intend to be present at the meeting,  and currently  intend to vote their shares
for the approval of the Reverse Stock Split proposal. Since the number of shares
of common  stock  held or  controlled  by these  two  shareholders  represent  a
majority  of  the  votes  that  may  be  cast  at  the  Special  Meeting,  these
shareholders  will be able to approve the proposed  amendment  to the  Articles,
regardless of how the other holders of common stock vote their shares.

                               REVOCATION OF PROXY

     The giving of a proxy does not preclude the right to vote in person  should
any shareholder giving the proxy so desire.  Shareholders have a right to revoke
their proxy at any time prior to the exercise  thereof,  either in person at the
Special  Meeting,  or by filing with the  Company's  Secretary at the  Company's
principal  executive offices a written revocation or duly executed proxy bearing
a later date; however, no such revocation will be effective until written notice
of the revocation is received by the Company at or prior to the Special Meeting.




                                       2




                          REVERSE STOCK SPLIT PROPOSAL

SUMMARY OF REVERSE STOCK SPLIT PROPOSAL

     On December 10, 2002,  the Board  discussed the  mechanics and  anticipated
effects of a possible  reverse  stock split of the  Company's  common stock (the
"Reverse  Stock  Split").  On December 12, 2002, the Board adopted a resolution,
subject  to  shareholder  approval,  that the  Articles  be  amended to effect a
1-for-150  reverse stock split of the Company's common stock, such that each 150
shares of existing common stock will be respectively  combined into one share of
post-reverse stock split common stock. There are no material differences between
the respective rights,  preferences, or limitations of the existing common stock
and the  post-reverse  stock split  common  stock.  The form of amendment to the
Articles  to effect  this  transaction  is  attached  hereto as  Appendix A (the
"Amendment").

     In  order  to  complete  the  Reverse  Stock  Split,   a  majority  of  the
shareholders  entitled to vote and voting at the Special Meeting must approve an
amendment  to  the  Articles.  By  approving  this  proposal,  the  shareholders
authorize the Board to implement the Reverse Stock Split by filing the Amendment
with the Florida  Secretary of State's office within ten business days following
the proposal's approval at the Special Meeting  (hereinafter  referred to as the
"Effective  Date").  The  shareholders  may not  rescind  their vote even if the
timing of the Amendment may adversely affect any particular shareholder.

     o    Our Board of Directors has authorized a 1-for-150  reverse stock split
          of our common stock and recommends that all  shareholders  approve the
          proposal by voting for an amendment to our Articles of  Incorporation.
          See  also  the  information  under  the  caption  "Special  Factors  -
          Background."

     o    A majority of the shares  represented at the Special Meeting must vote
          in  favor  of  the  reverse   stock  split  for  the  proposal  to  be
          implemented;  however,  since the members of the Board have  indicated
          their  intention  to  vote  their  shares  for  the  approval  of such
          proposal,  and such  members  hold or control a majority  of the votes
          that may be cast at the  Special  Meeting,  approval  of the  proposed
          reverse  stock split is assured.  See also the  information  under the
          caption "Required Vote."

     o    The reverse stock split will not become  effective until the amendment
          is filed with the Florida  Secretary  of State's  office.  The Company
          will  file the  amendment  within  ten  business  days  following  the
          proposal's  approval at the Special Meeting.  See also the information
          under the  caption  "Special  Factors -  Structure  of  Reverse  Stock
          Split."

     o    Once the reverse stock split becomes  effective,  you will receive one
          post-reverse  split  share of common  stock for each 150 shares of the
          common stock that you may own at that time.

     o    For  those  who hold  fewer  than 150  shares or those who do not hold
          shares in an even  multiple  of 150  shares,  you will  receive a cash
          payment of a minimum of $0.70 per share for those  shares  which would
          otherwise be converted into a fraction of a share of the  post-reverse
          split stock. See also the information  under the caption  "Exchange of
          Stock Certificates and Payment for Financial Shares."

     o    The reverse stock split is not expected to affect our current business
          plan or  operations.  See  also  the  information  under  the  caption
          "Conduct of the Company's Business after Reverse Stock Split."

     o    Each member of the Board of Directors has indicated that he intends to
          vote in favor of the reverse  stock  split.  See also the  information
          under the caption "Fairness of Reverse Stock Split Proposal."

     o    If the reverse  stock split is approved,  we will probably be eligible
          to cease filing  periodic  reports with the SEC and we intend to cease
          public  registration  of our  common  stock.  However,  the  Board has
          reserved the right to maintain  registration,  even after implementing
          the reverse stock split, if it deems that continued registration is in
          the best  interests of the Company and the  shareholders  at the time.
          See also the  information  under the caption  "Purpose and Reasons for
          the Reverse Stock Split."



                                       3


     o    Our Board of  Directors  did not  engage an  investment  bank or other
          financial adviser to render a report or fairness opinion in connection
          with the  Reverse  Stock  Split.  See also the  information  under the
          caption "Fairness of Reverse Stock Split Proposal."

     o    We expect that the reverse stock split should be treated as a tax-free
          "recapitalization"  for federal income tax purposes. For those holders
          that receive a cash  payment in lieu of  fractional  shares,  you will
          recognize  income  for  the  difference  between  the  amount  of cash
          received and the portion of the  aggregate tax basis in your shares of
          common stock which was not converted.  See the  information  under the
          caption "Material Federal Income Tax Consequences."

     o    There are no appraisal  rights for any  shareholder  who dissents from
          approval of the reverse  stock  split under the  Company's  governance
          documents.  We have also concluded that there are no appraisal  rights
          under  Florida  General  Corporation  law. We refer you,  however,  to
          Sections   607.1302  and  607.0604  of  the  Florida   Statutes  which
          respectively  prescribe  the rights of  shareholders  to  dissent  and
          treatment  of  fractional  shares.  There  may exist  other  rights or
          actions under state law for  shareholders who are aggrieved by reverse
          stock splits  generally.  See also the  information  under the caption
          "Appraisal Rights; Escheat Laws."

     The following  table  presents a summary of the effect of the Reverse Stock
Split proposal on the Company's  shareholders.  Please note that we refer herein
to  our  shareholders  whose  shares  are  registered  in  their  own  names  as
"Registered Shareholders."



                                                             
                      Shareholders as of                                     Net Effect After Reverse
                        Effective Date                                              Stock Split
                        --------------                                              -----------

         Registered Shareholders holding 150 shares             Shares of common stock will be converted into one
         of common stock.                                       whole share of post-reverse stock split common
                                                                stock.

         Registered Shareholders holding more than              Shares of common stock will be respectively
         150 shares of common stock.                            converted into one or more shares of post-reverse
                                                                stock split common  stock on a 1-for-150 basis,
                                                                with  a cash payment for any shares  that would
                                                                otherwise result in fractional shares.

         Registered Shareholders holding fewer than             Shares of common stock will be exchanged for a
         150 shares of common stock.                            cash payment of a minimum of $0.70 per share.

         Shareholders holding common stock in                   Nominees (such as a bank or broker) may have
         street name through a nominee, such as a               required procedures, and the Company shareholder
         bank or broker.                                        holding common stock in street name should
                                                                contact their nominees to determine how the
                                                                Reverse Stock Split will affect them.



     Following the Reverse Stock Split,  shareholders will no longer have access
to annual and quarterly reports. In addition, the Company's common stock will no
longer be quoted on OTC  Bulletin  Board,  and there  will be no active  trading
market for the shares. This means that the common stock will be less liquid.

     In lieu of the issuance of any  fractional  shares,  the Company will pay a
minimum of $0.70 per share for those shares of common stock that would otherwise
be converted into fractional  shares as a result of the Reverse Stock Split. The
Board has  determined  that the fair value of such stock shall be the greater of
(i) the  "Minimum  Fixed  Price"  which  has been set as $0.70  per  share (on a
pre-reverse  stock split basis) or (ii) the  "Current  Market  Price,"  which is
determined by reference to the prices quoted on the OTC Bulletin Board over a 20
trading day period,  as  described at  "Consideration  for  Determining  Current
Market Price." Because the Current Market Price cannot be determined until after
the Special  Meeting,  shareholders  will be asked to approve the merger without
knowing  the  final  consideration  for the  fractional  shares.  However,  that
consideration  will not be less than the $0.70 per share  Minimum  Fixed  Price.


                                       4


After the Special Meeting, management will issue a press release to announce the
final consideration, and will send each shareholder a letter of transmittal with
instructions for receiving the  consideration.  Payment in lieu of issuance of a
fractional  share will be made promptly  after  receipt of a properly  completed
letter of transmittal and stock certificates (see also the information under the
caption  "Exchange  of Stock  Certificates  and Payment for  Fractional  Shares"
below).

     There will be no service charge payable by  shareholders in connection with
the exchange of  certificates  or in connection with the payment of cash in lieu
of the issuance of a fractional share.

EXCHANGE OF STOCK CERTIFICATES AND PAYMENT FOR FRACTIONAL SHARES

     Continental Stock and Transfer have been appointed the Company's agent (the
"Transfer Agent") to carry out the exchange of certificates for the post-reverse
split common stock. Registered shareholders will receive a letter of transmittal
after the Reverse Stock Split is completed. These shareholders must complete and
sign the letter of transmittal and return it with their stock  certificate(s) to
the  Transfer  Agent  before they can receive  post-reverse  split  common stock
and/or the cash payment for those shares. You should not submit any certificates
until requested to do so. The post-reverse split common stock will be assigned a
new CUSIP number.

     If the Reverse Stock Split is effected,  each  Registered  Shareholder  who
holds fewer than 150 common shares immediately prior to the effectiveness of the
Reverse  Stock Split will cease to have any rights  with  respect to such common
shares and will have only the right to receive  the cash  payment in lieu of the
fractional  share to  which  such  shareholder  of  record  would  otherwise  be
entitled.  No service charges will be payable by shareholders in connection with
the exchange of certificates or the issuance of post-reverse split stock or cash
payments,  all the  expenses  of which  will be borne by the  Company.  Promptly
following the Effective Date, you will be furnished the necessary  materials and
instructions  to effect  such  exchange  (and to receive  the cash  payment,  if
applicable). These materials will include an explanation of the consideration to
be received by shareholders for their factional shares. The Company  anticipates
that you will receive the exchange materials within approximately one week after
the  Effective   Date.   Certificates   representing   shares  of  common  stock
subsequently  presented for transfer to a third party will not be transferred on
the books and records of the Company  until the  certificates  representing  the
shares have been  exchanged  for the cash payment or  certificates  representing
shares of post-split common stock (as applicable).  The Company anticipates that
the Transfer  Agent will  exchange the shares and remit the cash within one week
after receipt of the completed  documents  from you. No interest will be paid on
the cash payments pending receipt of the cash payments by shareholders.

COMPANY STOCK OPTIONS AND WARRANTS

     At the Effective  Date,  each option  outstanding  of common stock shall be
adjusted to reflect the right to receive one or more shares of common stock on a
1-for-150 basis. There are no outstanding warrants.

                                 SPECIAL FACTORS

BACKGROUND

     The Company has  approximately 811 Registered  Shareholders  holding common
stock.  Approximately  583 of these  shareholders hold 150 shares or less of the
common  stock  (the  "Small   Shareholders").   In  the  aggregate,   the  Small
Shareholders own  approximately  25,000 shares, or less than 0.42% of the common
stock.  In early 2002,  the Company  recognized  that the cost of management and
communication to the Small Shareholders on an annual basis exceeded the value of
the securities they held. For instance, the cost of printing and mailing a proxy
statement and annual  report to these  shareholders  each year is  approximately
$19,000  compared to a total value of these shares of less than $6,000 (based on
the closing price of $0.21 on July 31, 2003).

     The Company's  common stock was delisted from the NASDAQ SmallCap Market in
September  2002.  Since that  time,  the price of the stock as quoted on the OTC
Bulletin  Board has shown a significant  decline,  and the stock has low trading
volumes.



                                       5



     The Board initially  discussed a possible  Reverse Stock Split on September
13, 2002. The Board also met in October and November 2002 to continue discussion
of a Reverse Stock Split.  The Board met in December 2002 and approved a Reverse
Stock Split with a Minimum  Fixed Price of $0.60.  After the filing with the SEC
of a preliminary  proxy  statement in December 2002, the  implementation  of the
Reverse Stock Split was delayed while the Company completed its year-end closing
and  SEC  filings  for  2002.  Management  of the  Company  distributed  updated
information  on  the  Company  to  the  directors  in  July  2003.  The  updated
information consisted of the Supplement described below and the Company's recent
SEC filings.  The Board met via  teleconference  on July 25, 2003 to discuss the
updated information.  All directors were in attendance, and Joseph Williams also
attended to respond to questions.  The updated  information  indicated  that the
Company's   financial   performance  had  shown  some  improvement.   Management
re-performed its  calculations  under the various methods of valuation using the
updated financial  information,  and the net book value,  discounted book value,
and  comparative  company value all increased  from the prior  calculations,  as
detailed  under  "Consideration  for  Determining  Minimum Fixed  Price".  After
evaluating  updated  financial  results and analysis by management,  as detailed
below, the Board decided to increase the Minimum Fixed Price to $0.70.


     The  determination  of the  revised  Minimum  Fixed Price was made based on
management's  recommendations contained in the Supplement, after discussion with
the Board. Although management did not make a determination as to fairness,  the
Board used management's analysis in determining that the Minimum Fixed Price was
fair. A more  detailed  summary of the Board's  determination  in this regard is
included at "Consideration for Determining Minimum Fixed Price" below.

     The Board met again via telephone on October 7, 2003 with all directors and
Joseph  Williams  in  attendance,  to discuss  the SEC's  comments  on the proxy
statement,  and reviewed the revised preliminary proxy statement as subsequently
filed on  October  8,  2003.  The  Board  agreed  on the  language  in the proxy
statement and decided to proceed with the Reverse Stock Split with Minimum Fixed
Price of $0.70.

     The Board met again via  telephone on November 12, 2003 and  discussed  the
additional  comments  from the SEC.  The Board  revisited  the issue of having a
separate vote of unaffiliated  shareholders  and decided against such a vote due
to the  additional  time and cost  involved,  as  discussed  in more  detail  at
"Fairness of Reverse Stock Split Proposal."

PURPOSE AND REASONS FOR THE REVERSE STOCK SPLIT

     The low  trading  prices and the low  trading  volumes in the common  stock
following its delisting  from NASDAQ,  and also  resulting  from  generally poor
financial performance of the Company as well as other companies in its industry,
led the Board to consider  the  continued  desirability  of remaining a publicly
traded company.

     The purpose of the Reverse Stock Split  proposal is to reduce the number of
Small  Shareholders  and permit the Company to cease  registration of the common
stock under the  Securities  Exchange  Act of 1934 (the "1934  Act").  The Board
recommends  that the  Company  shareholders  approve  the  Reverse  Stock  Split
proposal to achieve this purpose for the reasons set forth below.

     For the Small  Shareholders,  typical  transaction costs for public sale of
common stock  significantly  reduce the  liquidity of the shares,  since in most
cases these transaction costs represent a large percentage of the value of their
holdings (at current stock  pricing  trends).  The Reverse Stock Split  proposal
will allow such shareholders to liquidate their holdings at a fair value without
these transaction costs.

     For shareholders of the Company other than the Small Shareholders, reducing
such a large number of Small Shareholders  (over 70% of the existing  registered
shareholders)   will  result  in  savings  to  the   Company  by  reducing   the
administrative  costs of providing annual reports,  proxy  information and other
shareholder  services.  In addition,  since it is important in certain corporate
transactions to be able to quickly  communicate  with its company  shareholders,
reducing  such a large  number of  Company  shareholders  that  cannot be easily
contacted reduces delays in implementing corporation strategies.

     As mentioned  above,  the Reverse Stock Split will position the Company for
terminating registration of its common stock under the 1934 Act. As a registered
company, the Company is subject to the periodic reporting and proxy solicitation


                                       6


requirements of the Securities and Exchange  Commission (the "SEC").  There is a
significant  likelihood that the purchase of the fractional shares following the
Reverse Stock Split will reduce the number of Registered  Shareholders of common
stock to fewer than 300. We estimate that the number of Registered  Shareholders
of common stock would be reduced to 228 following the  completion of the Reverse
Stock Split. If this occurs, the Company will be in a position to elect to cease
registration of its common stock under the 1934 Act. The Company  calculated the
1-to-150 ratio to reduce the number of shareholders below 300.

     As part of its  1934  Act  registration,  the  Company  incurs  direct  and
indirect  costs  associated  with  compliance  with  the  filing  and  reporting
requirements imposed on public companies.  Examples of direct costs savings from
terminating  registration of the common stock include lower printing and mailing
costs,  less  complicated  disclosure  due  to  the  Company's  private  status;
reduction in direct  miscellaneous  clerical and other expenses (e.g.,  the word
processing,  EDGARizing,  telephone and fax charges associated with SEC filings)
and  elimination  of the charges of brokers and  transfer  agents in  forwarding
materials to beneficial holders.

     The Company  also  incurs  substantial  indirect  costs due to the 1934 Act
registration  as a result of the  executive  time expended to prepare and review
such  filings.  In  addition,  compliance  with  the  new  requirements  of  the
Sarbanes-Oxley  Act of 2002 increases these costs and makes it difficult for the
Company to recruit senior  executives  for the Company  because it requires time
and increases risk to the executive.  Ceasing  registration  of the common stock
will reduce or  eliminate  these  costs,  as well as lower the risk of liability
that typically attends public (as distinguished from private) company status.

     Based on its experience in prior years, the Company's  direct costs,  which
include  the fees and  expenses  of  independent  auditors,  SEC legal  counsel,
directors' and officers' liability insurance coverage,  printing,  mailing,  and
SEC filing fees, were initially  estimated at approximately  $150,000  annually.
However,  the Company  recently  became  aware that there will be a  substantial
increase in audit fees and liability insurance, and management believes that the
cost  savings may exceed  $250,000 per year after these  increases  take effect.
These  amounts,  however,  are just  estimates,  and the  actual  savings  to be
realized  may be higher or lower than such  estimates.  It is expected  that the
majority of the estimated  savings will be not be realized until the fiscal year
ending December 31, 2004.

     Another  aspect of public  registration  is the  disclosure of  proprietary
information,  such as material contracts,  acquisitions,  growth strategies, and
financial information regarding overall operations.  Ceasing registration of the
common stock will increase the confidentiality of such proprietary  information,
which the  Company  believes  can be analyzed  by its  competitors  to place the
Company at a competitive disadvantage.

     There are many  advantages to being a publicly  traded  company,  including
stock value, stock liquidity,  and use of company stock to raise capital or make
acquisitions.  In the  opinion of the Board,  however,  the  pricing  trends and
trading  volume of the common stock have not allowed the Company to  effectively
take  advantage  of these  benefits,  at least to the extent of  justifying  the
continuing  direct and indirect  costs of public  registration.  In  particular,
because of the low  trading  volumes in the  stock,  the  Company is not able to
effectively market the stock to raise capital. The volume is typically less than
1,000 shares per day and frequently there are several  consecutive  trading days
with no trades.  The Company is not aware of any analysts who actively cover the
Company, and there is no institutional investor interest in the stock. The Board
does not believe that there will be a significant change in this equation in the
near term.

     Another factor that has impaired the Company's  ability to effectively take
advantage  of the  benefits of public  registration  is the  September  13, 2002
delisting of the  Company's  common  stock from  trading on the NASDAQ  SmallCap
Market.  Although  the common  stock  continues to be traded in the OTC Bulletin
Board, management believes that the delisting has had detrimental effects on the
trading volume and pricing of the common stock, which contributes to the failure
to realize some of the benefits of the Company's  continued  registration of the
common stock under the 1934 Act.

     Shareholders  should note that the decision by the Board to terminate  1934
Act registration does not require shareholder  approval and will not be voted on
at the Special Meeting.  Further,  there is no assurance that the number of such
shareholders  will be fewer than 300 following the Effective Date. If the number
of  shareholders  remains at 300 or above after the  Reverse  Stock  Split,  the
Company will not be able to terminate its registration under the 1934 Act. While
the Company  intends to cease public  registration of its common stock following
the Reverse Stock Split,  the Board may choose not to implement this strategy if


                                       7


the Board  determines  that it is not then in the best  interests of the Company
and its shareholders given the then existing market  conditions.  The Board will
make this determination only if the trading price and volume of the common stock
shown an unexpected  increase,  or if it appears that the Company will be unable
to terminate its 1934 Act  registration  despite the Reverse Stock Split. If the
Company does not terminate its 1934 Act  registration,  the expected benefits of
the Reverse Stock Split may not be achieved.

FAIRNESS OF REVERSE STOCK SPLIT PROPOSAL

     The Board  believes that the Reverse Stock Split proposal is fair to and in
the best interests of the Company and its shareholders,  including  unaffiliated
shareholders,  those  shareholders  who will  receive the cash payment and those
shareholders  who will receive shares of  post-reverse  split common stock.  The
Board also  believes  that the process by which the Reverse Stock Split is to be
approved is fair. Francis M. Williams,  individually,  believes that the Reverse
Stock Split is fair to the shareholders of the Company,  including  unaffiliated
shareholders,  those  shareholders  who will  receive the cash payment and those
shareholders  who will receive shares of  post-reverse  split common stock,  and
considered the same factors as the Board considered in reaching that conclusion.
All references to considerations and conclusions by the Board as to fairness and
to factors  considered  by the Board apply as well to Francis M.  Williams.  The
Board unanimously  approved the Reverse Stock Split proposal and recommends that
the  shareholders  vote for its approval and adoption.  Francis  Williams  also,
individually,  recommends that  shareholders  vote in favor of the Reverse Stock
Split proposal.  Each member of the Board and each member of management who owns
shares of common stock have  indicated  that they intend to vote in favor of the
Reverse Stock Split proposal,  including the Board members who are not employees
of the Company.

     In anticipation of the Board's  consideration of the Reverse Stock Split in
November 2002, the Board had a report provided by management of the Company (the
"Management  Report"),  to analyze the factors affecting the value of the common
stock.  In August 2003,  management  provided the Board with a supplement to the
Management  Report  (the  "Supplement")  to update  the  analysis.  The  Board's
analysis of the value is based upon the data provided in the  Management  Report
and the  Supplement.  The Management  Report and the Supplement were prepared by
Joseph M. Williams,  Secretary and Treasurer,  and Carol Black,  Chief Financial
Officer. Joseph Williams is also the nephew of Francis Williams, the Chairman of
the Board,  Chief Executive Officer and controlling  shareholder of the Company.
The Board is responsible for determining the fairness of the Reverse Stock Split
to the shareholders. In accordance with Section 607.0830 of the Florida Statues,
the  directors  have  relied in good faith  upon the  information  and  analysis
contained in the  Management  Report and the Supplement to assist them in making
that determination. The Board also reviewed the historical financial information
of the  Company.  Copies of the  Management  Report and the  Supplement  will be
available at the meeting.  The Board and Mr.  Williams  relied on the Management
Report and the Supplement in making their  determinations  that the  transaction
was fair.

     The Management Report included copies of:

     o    the  Company's  Form 10-K for the year ended  December 31, 2001,

     o    the Company's Form 10-Q for the quarter ended September 30, 2002,

     o    historical price data for the Company's common stock,

     o    estimates  of number of  shares  to be  cashed  out and the  resulting
          number of  shareholders  assuming a 1-for-150  reverse stock split,

     o    summary   financial  data  for  seven  property  and  casualty  surety
          companies  which  management  considered  comparable to the Company in
          terms of lines of business,

     o    financial  analyses of:

          >>  market  price,



                                       8


          >> book value,

          >> discounted book value,

          >> comparable company value.

The Supplement included copies of:

     o    Updates to the analyses of:

          >>   market price,

          >>   book value,

          >>   discounted book value,

          >>   comparable company value,

     o    Updated comparable company data.

     The analysis in the Management  Report and the Supplement  formed the basis
for the discussion below regarding the fairness of the transaction. In addition,
management  had  previously  made available to the Board the current SEC filings
and reports.

     In reviewing the historical financial information of the Company, the Board
noted that the Company's  financial  performance has deteriorated  significantly
over the past several quarters.  In particular,  from September 30, 2001 to June
30,  2003,  the  Company's  shareholders  equity  declined  from  $8,296,737  to
$6,369,721,  and the Company has incurred net losses totaling  $1,927,016 during
that time.  In  addition,  the  Company's  losses and loss  adjustment  expenses
increased  from $3.4  million to $8.5  million for the years ended  December 31,
2000 to 2002,  respectively,  and for those  year ends the  reserve  for  losses
increased  from  $5.2  million  to $8.9  million  and the  derivative  liability
increased  from $0 to $4.3  million.  See "Selected  Financial  Data." The Board
concluded that the Company's  financial  performance  would make it difficult to
market the Company as a business unit.

     Management  recommended the 1-for-150 ratio based on calculations to reduce
the number of shareholders to less than 300. The Board decided to use this ratio
based on management's recommendation. The Board did not consider any alternative
ratios.

     The Board considered a number of factors in determining the fairness of the
Reverse Stock Split prior to approval of the proposed transaction. These factors
are discussed below in this section and under  "--Consideration  for Determining
Minimum Fixed Price." The Board  recognized the existing  liquidity  concerns of
the  Small  Shareholders.  It  recognized  that  reducing  the  number  of Small
Shareholders  would  decrease  (but  not  necessarily  eliminate)  the  problems
associated  with not being able to readily  communicate  with a large portion of
its shareholders.  See "Potential  Detriments of Reverse Stock Split Proposal to
Shareholders; Accretion in Ownership and Control of Certain Shareholders."

     It also  recognized  that the Reverse  Stock  Split will likely  enable the
Company  to cease  public  registration  of the common  stock,  so in making its
determination  of the fairness of the Reverse  Stock Split  proposal,  the Board
also  factored  in the added  administrative  costs and  resources  involved  in
providing annual reports,  proxy information,  and other shareholder services to
such a large proportion of shareholders holding fewer than 150 shares.  Although
public registration has some benefits,  in the Company's situation the costs and
burdens associated with the public  registration harm the shareholders who would
not be cashed out in the Reverse Stock Split, and the elimination of those costs
will  benefit  those  shareholders.  However,  even if  termination  of 1934 Act
registration is not implemented,  the Board still concluded that the elimination
of the  Small  Shareholders  is in the best  interests  of the  Company  and its
shareholders,  when  taken as a whole.  The Board  noted  that the  unaffiliated
holders of 150 or more shares will not benefit from the proceeds of the cash out
of the Small Shareholders' shares. In addition, these shareholders will bear the


                                       9


burden  of  the  lack  of  access  to  Company  information,  unlike  affiliated
shareholders  who will  continue  to have access to this  information.  However,
these  remaining  shareholders  will  benefit  from the cost savings and reduced
burdens on the Company  associated  with the Reverse  Stock Split,  as discussed
above at  "Purpose  and Reasons for the  Reverse  Stock  Split".  Based on these
benefits,  as well as the fairness of the  consideration to be paid to the Small
Shareholders,  the Board  concluded  that the Reverse Stock Split is fair to the
unaffiliated shareholders with 150 or more shares.

     The  Board did not  retain  either an  investment  bank or other  financial
adviser  to render a report or  opinion  with  respect  to the  fairness  of the
Reverse  Stock Split  proposal to the  Company or its  shareholders.  Management
estimated  that the cost of such report or opinion  would  exceed  $80,000.  The
Board  determined that this expense was unwarranted  since it concluded that the
Board itself could adequately  establish the fairness of the Reverse Stock Split
proposal,  without  such  report or  opinion,  by  addressing  the  factors  and
considerations  described in this section.  However, there is a risk that in the
absence  of an opinion  from an  independent  party,  the Board may have over or
underestimated  the value to be paid to Small  Shareholders in the Reverse Stock
Split.  If this value is over  estimated,  the  Company  may pay too much to the
Small  Shareholders,   to  the  detriment  of  the  Company  and  the  remaining
shareholders.  The  maximum  amount the  Company  would over pay,  assuming  the
Minimum  Fixed Price,  overstates  the value by 100% of the Minimum Fixed Price,
would be  approximately  $50,000.  If the Minimum  Fixed Price  understates  the
value, the Small Shareholders would not receive the full value for their shares.

     The Board  concluded that the Reverse Stock Split is  procedurally  fair to
non-affiliated  shareholders  for  the  following  reasons.  The  Board  did not
establish  an  unaffiliated   representative   to  represent  the   unaffiliated
shareholders  of the Company in determining the terms of the Reverse Stock Split
proposal because the Board concluded that there was sufficient representation in
the decision  making at the Board level to protect the interests of unaffiliated
shareholders.  This  decision  was based on the fact that two of the three Board
members are not controlled  by, or under common  control with, the Company,  and
these  Board  members  are  not  employees  of  the  Company.  In  addition,  no
independent  committee  of the Board has  reviewed  the  fairness of the Reverse
Stock Split proposal  because the Board concluded that such  unaffiliated  Board
members could adequately  convey their opinions and concerns to the entire Board
without the need for the establishment of such a committee. The Board recognized
that there was an inherent  conflict of interest in Mr. Williams'  position as a
director,  on the one hand,  and a major  shareholder,  on the other  hand.  The
other,  independent directors did not act formally as an independent  committee,
but did unanimously approve the transaction with Mr. Williams  abstaining.  None
of the Board members are Small Shareholders, although Francis Williams does have
some family  members who are Small  Shareholders  and who will have their shares
cashed out. The  independent  directors  will continue to have access to Company
information after the Reverse Stock Split, unlike the unaffiliated shareholders,
who will no longer have access to information  after the Company  terminates its
SEC reporting.  However,  the Board concluded that it was more important to have
independent  directors to represent the interests of all shareholders as opposed
to having Small Shareholders on the Board. In addition,  it would be impractical
and  time  consuming  to  restructure   the  Board  to  add  Small   Shareholder
representatives.  Since each Small  Shareholder  has very  little at stake,  the
Board  considered  that it may be  difficult  to identify  one who is willing to
undertake this task given the time involved and potential liability.

     The  Board   determined   that  the  Reverse   Stock  Split   proposal  was
substantively   fair  to  all  unaffiliated   shareholders.   In  reaching  this
determination, the Board considered the following supporting factors:

          The Small  Shareholders will be allowed to liquidate their holdings in
     a cost-effective  manner,  a task that they could not otherwise  accomplish
     since all of the  Small  Shareholders  own less  than 150  shares of common
     stock (one Small Shareholder owns one share), with a total estimated market
     value  for each ten  shares of less than  $3.00  (based on $0.30  price per
     share - the  highest  closing  price  for  common  stock  during  the third
     calendar  quarter of 2002).  On November 14, 2002,  management  conducted a
     summary review of the current  pricing of transaction  fees, and found that
     the lowest  transaction fee for a stock trade was approximately  $11.65 per
     trade. (The sole purpose of identifying  estimated  transaction fees was to
     provide a context for establishing the approximate  low-end cost of selling
     small stock  holdings of common stock in the public market  relative to the
     estimated  value of such  holdings;  its purpose  was not to  identify  the
     absolute lowest cost or the best value with regard to brokerage services.)

          The Reverse  Stock Split will not change the  rights,  preferences  or
     limitations of unaffiliated  shareholders,  with the exception of the Small
     Shareholders.



                                       10


          No shareholder,  whether  affiliated or  unaffiliated  (other than the
     Small  Shareholders),  will have a material decrease in their percentage of
     ownership  interest of the Company  following the Reverse Stock Split,  and
     any  decrease  that  will  occur  will  apply  equally  to  affiliated  and
     unaffiliated  shareholders.  Any shareholder whose holdings are not in even
     multiples of 150 shares will experience a slight relative decrease in their
     percentage of interest  after the split,  but the maximum  number of shares
     that  could  be  affected  would  be 149.  As an  example,  the  percentage
     ownership  interest of a shareholder  with 3,149 shares would  experience a
     relative  decrease of 0.0025% of his or her interest  following the Reverse
     Stock Split due to the cancellation of the 149 odd-lot shares in return for
     a cash payment.  We have  qualified  the foregoing  statements as "relative
     decreases"   because  the   percentage   of  ownership  of  the   remaining
     shareholders  following the split,  affiliated  and  unaffiliated,  will be
     slightly  increased  to  the  extent  of  the  cancellation  of  the  Small
     Shareholders'  holdings and any other  odd-lot  holdings that are not in an
     even multiple of 150 shares.

          Small  Shareholders  may  retain  their  ownership  in the  Company by
     increasing  their  number of shares to 150. The highest  closing  price for
     common  stock during the third  quarter 2002 on the OTC Bulletin  Board was
     $0.30 per share and the lowest  closing  price during such period was $0.14
     per share.  Consequently,  using the foregoing pricing, a Small Shareholder
     could remain a shareholder  of the Company for a maximum cost  estimated at
     or between $21.00 and $45.00, plus transaction fees.

          Only the  Small  Shareholders  will  cease to be  shareholders  of the
     Company  following the split,  and they are the only  shareholders who will
     lose a significant  percentage of their existing  ownership interest in the
     Company. As generally described in the information  contained herein in the
     sections  captioned  "Background"  and  "Purpose and Reason for the Reverse
     Stock Split," locating and communicating  with the Small Shareholders is no
     longer  economically  feasible.  The Board concluded that  conditioning the
     approval  of the Reverse  Stock Split  transaction  on the  affirmative  by
     majority  vote of the  unaffiliated  shareholders  might  not  reflect  the
     collective  judgment  of the  Small  Shareholders  because  in the  Board's
     opinion it would be unlikely that a large number of such shareholders would
     vote (in person or by proxy) due to the inconsequential financial impact on
     the shares they hold. The Board  therefore  concluded that the interests of
     the unaffiliated shareholders who were directly impacted by the split would
     not be represented because they would not likely be aware of the importance
     of the vote and, even if they were aware, their interests would represent a
     minority of the  unaffiliated  shareholders.  Since,  unlike the Board, the
     unaffiliated  shareholders  have no fiduciary duty to fellow  shareholders,
     the Board  decided  that it should not grant the veto on the Reverse  Stock
     Split to the  unaffiliated  shareholders.  Even if the  Small  Shareholders
     could be effectively communicated with, so as to allow such shareholders to
     convey the  interests  of the  majority of this group,  the holdings of the
     Small Shareholders  represent less than 0.42% of the ownership interests of
     the  Company.  Since the Board has a fiduciary  duty to the Company and its
     shareholders,  it determined that an abrogation of the  responsibility  for
     the decision to move forward on the Reverse  Stock Split  transaction  to a
     group holding such a small interest in the Company would also not be in the
     best interest of the Company and its shareholders.

          The  Board  also  considered  that  a  large  number  of  unaffiliated
     shareholders  holding more than 150 shares would likely not vote on this or
     any proposal  given the low values and trading  volume in the common stock.
     Over the  past  several  years,  none of these  shareholders  has  attended
     meetings  and many of them do not vote their  shares.  The Board also noted
     that there is no permissible  procedure under the Bylaws to allow a vote by
     only the shareholders holding more than 150 shares. Allowing a vote by only
     unaffiliated   shareholders   would  probably  require  the  use  of  proxy
     solicitation  firms at  additional  cost and delay to the  Company  and may
     result in a lack of quorum for the meeting.  If the Board allowed a vote of
     only those unaffiliated  shareholders who vote, this likely would mean that
     the  decision  would  be  determined  by  small  numbers  of   unaffiliated
     shareholders  who hold  larger  blocks  and who  would not  necessarily  be
     concerned about the fairness to the Small Shareholders. The Board concluded
     that this burden would not be a  cost-effective  use of Company  resources,
     and concluded that the Company's need to move forward with the  transaction
     was urgent given the significant cost savings to the Company given its size
     and recent financial  performance.  The Board also concluded that,  despite
     Francis  Williams'  ability  to  control  the  outcome  of the vote and the
     absence of a separate vote by the  unaffiliated  shareholders,  the Reverse
     Stock  Split was  procedurally  fair to those  shareholders  because of the
     review by the transaction by the independent directors. The Board concluded


                                       11


     that the Reverse  Stock Split was  substantively  fair to the  unaffiliated
     shareholders  holding more than 150 shares because those  shareholders will
     benefit  from the cost savings to the Company and because the price paid to
     Small Shareholders will be appropriate based on the analysis provided below
     under "Consideration for Determining Minimum Fixed Price."

          The Board  ascertained to its  satisfaction  that this transaction was
     not the typical Rule 13e-3 "going private" transaction,  which involves the
     involuntary  or  threat of  involuntary  purchase  of all of the  ownership
     interests  of the  unaffiliated  shareholders.  In the Reverse  Stock Split
     transaction   the   unaffiliated   shareholders,   other   than  the  Small
     Shareholders,  will retain their percentage ownership in the Company in all
     material respects.  The ownership  interests of the Small Shareholders will
     be  terminated as a result of the Reverse Stock Split (unless they purchase
     additional  shares as described  above),  but the Board  concluded that the
     completion  of  the  split  would  be  an  overall  benefit  to  the  Small
     Shareholders because of the illiquidity issues discussed above.

     As part of its considerations,  the Board considered the following negative
consequences:

     o    potential liquidity concerns of the unaffiliated minority shareholders
          after the Reverse Stock Split should the Company,  as expected,  cease
          public registration of the common stock;

     o    possible negative impact on the stock price caused by the announcement
          of the Reverse Stock Split;

     o    decreased access to Company  information by  shareholders,  especially
          given that the Company  will no longer be  required  to file  periodic
          reports under the 1934 Act.

     Excluding  the  holdings  of the  officers  and other  "affiliates"  of the
Company (as defined in Rule 144 under the Securities Act of 1933), almost all of
the  outstanding  shares  of common  stock  are  available  for  resale  without
registration.  While this issue  relates to the ceasing of public  registration,
rather than the  Reverse  Stock  Split,  the Board  acknowledged  that the split
facilitates this action and therefore the Board identified it as a contradicting
factor.  The Board  weighed  these  contradicting  factors  against  what it had
determined  were the overall  benefits to the  shareholders  and the Company for
this Reverse Stock Split and concluded that they were  insufficient  to outweigh
such  benefits in light of the  considerations  and  conclusions  stated in this
section.

     The Board  believes  that it determined in good faith that the cash payment
to be paid for stock in lieu of issuance of fractional shares constitutes a fair
value.  Section  607.0604(5)  of the  Florida  Statutes  states  that,  "When  a
corporation is to pay in money the value of fractions of a share, the good faith
judgment of the board of  directors  as to the fair value shall be  conclusive."
The Board believes that its review of the Management  Report and the Supplement,
including the analysis described below under  "Consideration for Determining the
Minimum Fixed Price,"  satisfies  this  statutory  provision  because the review
demonstrated  that  the  Board  used  due  care  and the  decision  was  made by
independent directors who acted in good faith.

     The Board adopted the higher of the Minimum  Fixed Price or Current  Market
Price methodology  (both as described below) as the most appropriate  measure of
cash  payment in lieu of  issuance of  fractional  shares.  Francis M.  Williams
reviewed the Management  Report and the  Supplement  and the  conclusions of the
Board,  and agreed with and adopted those  conclusions in  determining  that the
Reverse Stock Split is procedurally and substantively fair to the shareholders.

POTENTIAL DETRIMENTS OF REVERSE STOCK SPLIT PROPOSAL TO SHAREHOLDERS;  ACCRETION
IN OWNERSHIP AND CONTROL OF CERTAIN SHAREHOLDERS

     The  potential   detriments  to  shareholders  who  remain  as  holders  of
post-reverse  split common  stock after  effecting  the Reverse  Stock Split and
termination of registration  under the 1934 Act include decreased  liquidity and
decreased  access  to  information  about  the  Company.   Upon  termination  of
registration  of the common stock,  the Company will no longer be subject to the
periodic reporting  requirements and the proxy rules of the 1934 Act. This means
that unaffiliated shareholders who are not cashed out in the Reverse Stock Split
will lose the benefits of the greater financial transparency associated with SEC
reporting  companies.  Only  shareholders  who are officers and directors of the
Company  will have  regular  access to  information  about  the  Company.  These
shareholders  will own approximately  88.1% of the outstanding  shares after the


                                       12


Reverse Stock Split.  Unaffiliated shareholders will hold approximately 11.9% of
the  outstanding  shares after the Reverse  Stock  Split.  The  Company's  major
subsidiary,  Cumberland Casualty & Surety Company  ("Cumberland  Casualty") will
continue  to file  publicly  available  financial  statements  with the  Florida
Department of  Insurance.  Under  Sections  607.1601 and 607.1602 of the Florida
Statutes,  the Company must continue to maintain accurate accounting records and
make these records  available for inspection by  shareholders,  although such an
inspection  would require the  shareholder  to visit the offices of the Company.
Since there will no longer be a public  market for the  purchase and sale of the
stock,  the  liquidity  and market  value of the shares of common  stock will be
adversely affected.

     The Small Shareholders will have their shares cashed out and will no longer
have an ownership interest in the Company.  The Small Shareholders will not have
the opportunity to benefit from the reduced costs resulting from the termination
of the 1934 Act registration.  If the Company otherwise improves, they also will
not benefit.

     The Company will incur  approximately  $118,000 in costs as a result of the
Reverse  Stock  Split.  In  addition,  the Company will no longer have its stock
posted on the OTC Bulletin Board and thus will lose the potential opportunity to
offer and sell its stock in that market.

     If the Reverse Stock Split proposal is effected,  the Company believes that
228 Registered  Shareholders of common stock will remain (based on the Company's
current shareholder  records).  In addition,  individuals who are members of the
Board and executive  officers of the Company now owning  approximately  86.8% of
the common  stock will own  approximately  88.1% of the common  stock  after the
Reverse Stock Split (the proportionate  holdings of the common stock will not be
affected).  Control of the Company by Francis M. Williams as generally described
in the information contained herein in the section captioned "Security Ownership
of Certain Beneficial Owners and Management" will not be materially  affected by
the Reverse Stock Split. As a result of the Reverse Stock Split,  Mr.  Williams'
beneficial ownership will increase from 79.9% to 81.1% of the outstanding common
stock.

CONSIDERATION FOR DETERMINING CURRENT MARKET PRICE

     The Board  considered  current  market  price as a  stand-alone  factor and
decided to use the greater of (i) the average of the  closing  market  price for
the 20-day  period  immediately  ending on the date of the filing of the initial
preliminary Schedule 14a Proxy Statement,  on December 23, 2002, which is $0.14,
or (ii) the 20-day  period  ending the day before the meeting date for the final
vote on the definitive  proxy matter (Current  Market Price).  This analysis and
discussion  ensued and was treated  separately from fixed price.  The Board felt
that in the event the  market  determines  that a  Reverse  Stock  Split and the
intent of the Company to cease  registration  of the common stock under the 1934
Securities  Act results in a higher  trading value for the stock of the Company,
it was  appropriate  that the  fractional  shareholders  be paid that  increased
value.  If the Current Market Price were  calculated  based on the 20-day period
ending September 30, 2003 it would be $0.20.  This amount is considerably  lower
than the fixed  price.  In  addition,  if for any reason the stock on the 20-day
period prior to the filing of the  preliminary  proxy  should  increase in value
above the fixed  number,  and at a later date decrease as a result of this proxy
statement,  the Board felt that the higher number should be fair and appropriate
to pay the Small  Shareholders.  Because  the  Current  Market  Price  cannot be
determined  until  after  the  special  meeting,  shareholders  will be asked to
approve the merger without  knowing the final  consideration  for the fractional
shares.  However,  that  consideration will not be less than the $0.70 per share
Minimum Fixed Price.

     The Board further considered the possible effect on stock pricing caused by
the disclosure of the Company's  intention to terminate  public  registration of
the common stock. Consequently,  the Board adopted the 20-day period immediately
prior to the initial  preliminary  filing of this Proxy  Statement  because this
would reflect market valuation prior to the disclosure. The Board also concluded
that  the  Current  Market  Price  should  not be less  than  the  market  value
immediately  prior to the meeting date since this date  constitutes  the date of
approval of the  purchase of the stock and hence the  purchase  price  should at
least reflect the market  valuation as close to this time as practical given the
stock  volatility  issues described in the foregoing  paragraph.  Because of the
uncertainty inherent in any valuation, the Board also concluded that the Current
Market Price should constitute the greater value of the two established  periods
to ensure  maximum  fairness to the Small  Shareholders,  since their  ownership
interest in the Company would be  terminated  (absent any action on their behalf
to remain shareholders by purchasing  additional shares).  Therefore,  the Board
determined  that the Current Market Price should be determined by the greater of
(i)  the  average  closing  price  of  common  stock  for  the 20  trading  days
immediately  preceding the initial  preliminary  filing of this Proxy Statement,


                                       13


and (ii) the average of bid and asked  prices of common stock for the 20 trading
days immediately preceding the meeting date.


     In  considering  the  structure  of the  Reverse  Stock  Split,  management
reviewed the structure  used by another  small public  company based in Florida,
Lucor,  Inc. The Lucor  transaction  was selected for  comparison  by management
after  looking for small public  companies  based in Florida who had completed a
"going private"  transaction.  The Lucor  transaction was of interest because it
used a reverse  stock  split  structure  similar  to the one  considered  by the
Company  and Lucor was a Florida  corporation.  Management  did not do search of
comparable transactions for valuation purposes. This transaction was reviewed to
consider the structure and methodology  for  implementing a reverse stock split.
For this reason, no non-Florida companies were reviewed.

     After  establishing  the  Current  Market  Price of the  common  stock as a
stand-alone  method  of  calculating  the cash  payment,  the Board  focused  on
identifying  the  appropriate  data or time period to apply this  method.  After
reviewing  the method used in the Lucor  transaction,  management  informed  the
Board that  although  five to ten  trading  days is  sometimes  used to minimize
temporary fluctuations in pricing which do not reflect the true market valuation
of the stock, a longer period may be appropriate in the case of the Company. The
Board noted that the historic  volatility  of the common  stock,  due to its low
trading  volume,  dictated  that a longer  period  should be adopted to minimize
these effects and chose 20 days as a fairer measure.


CONSIDERATION FOR DETERMINING MINIMUM FIXED PRICE

     In order to determine the Minimum Fixed Price, the Board considered several
methods  of  valuation  (based  upon  the  data and  analysis  contained  in the
Management   Report  and  the   Supplement)  to  the  price  of  the  fractioned
shareholders  and  concluded  that the $0.70 as a minimum price  (Minimum  Fixed
Price) was fair to the Small Shareholders.  The following is a discussion of the
analysis the Board  reviewed to determine the valuation of the amount to be paid
for the fractional shares.

     In determining the Minimum Fixed Price,  the Board considered the following
methods of  valuation.  They then used an average of those  values to  determine
what the  Minimum  Fixed  Price  should be. The Board  considered  weighing  the
various factors based on what it believed was important and should be considered
more heavily.  After a discussion  among the members of the Board, and the broad
spectrum each of the values created, the Board determined that the fairest value
would be a simple  average  without  attempting  to weight any  individual  item
greater than any other.

     Historical  market  prices - For purposes of  assessing  an average  market
price over an extended period of time,  management reviewed the stock price over
the 12 months prior to the  announcement  of the Reverse Stock Split.  The stock
had been declining steadily to a level of $0.13 on November 6, 2002.  Management
believes  this  decline  occurred  primarily  because  the Company has failed to
perform over the past two years and has incurred  losses of  approximately  $1.9
million.  This coupled with our de-listing  from the NASDAQ  SmallCap Market and
ultimate  listing on the OTC  Bulletin  Board,  has  caused  the stock  price to
decline steadily.  In the assessment of the historical market price,  management
believes that these closing prices must be weighted in reverse order so that the
most current price is weighted the highest and the oldest price was weighted the
least.  The closing  prices from each period were  weighted and averaged on that
basis.  In  determining  the  historical  market price,  the Board looked at the
average closing price for the previous 12 months on a monthly basis,  that being
the last day of each  trading  month.  Management  used 12 months of stock price
history and weighted  each month such that the most recent month had a weighting
of 12, the next most recent  month had a weighting  of 11, and so on through the
12 months.  Management  used this  weighting  because it believed  that the more
recent price data was more  relevant to the current  financial  condition of the
Company,  and that each month  going  backward  in time was  incrementally  less
relevant than the more recent month. This weighting mathematically captured this
concept of  relevance.  The data in the original  Management  Report  yielded an
average on a weighted basis of $0.41, as follows:

          MONTH                     PRICE        WEIGHT      WEIGHTED PRICE
          -----                     -----        ------      --------------

     November          2001         $0.86           1             0.86
     December          2001         $0.92           2             1.84
     January           2002         $0.95           3             2.85


                                       14


     February          2002         $0.95           4             3.80
     March             2002         $0.84           5             4.20
     April             2002         $0.65           6             3.90
     May               2002         $0.49           7             3.43
     June              2002         $0.43           8             3.44
     July              2002         $0.22           9             1.98
     August            2002         $0.15          10             1.50
     September         2002         $0.21          11             2.31
     October           2002         $0.13          12             1.56

     Totals for Average                            78            31.67

     Weighted Average               $0.41

     The updated data for the Supplement  indicated a weighted average of $0.19,
as follows:

          MONTH                     PRICE        WEIGHT      WEIGHTED PRICE
          -----                     -----        ------      --------------

     April             2002          0.65           1             0.65
     May               2002          0.49           2             0.98
     June              2002          0.43           3             1.29
     July              2002          0.22           4             0.88
     August            2002          0.15           5             0.75
     September         2002          0.21           6             1.26
     October           2002          0.13           7             0.91
     November          2002          0.15           8             1.20
     December          2002          0.08           9             0.72
     January           2003          0.18          10             1.80
     February          2003          0.20          11             2.20
     March             2003          0.20          12             2.40
                                     ----

     Totals for Average              3.09          78            15.04
                                     ====

     Months                           12

     AVERAGE MARKET PRICE FOR
     LAST 12 MONTHS                 $0.26
                                    =====

     WEIGHTED AVERAGE               $0.19
                                    =====


     The Board adopted management's analysis on historical prices and considered
this factor important because it believes market prices are an objective measure
of value.  This factor in isolation would indicate that the price paid should be
lower than the Minimum  Fixed  Price.  However,  the Board  concluded  that this
measure  cannot be viewed in  isolation  and must be  considered  with the other
factors.  As part of the combined analysis of the Minimum Fixed Price, the Board
concluded that this factor supports the fairness of the Minimum Fixed Price.


     Net book value - As of September 30, 2002, the Company had a net book value
of $5,546,823.  As of the same date,  there were 5,596,744 shares of outstanding
common  stock.  The net book  value per share as a result  of these  numbers  at
September 30, 2002 was $0.99 per share.  As of March 31, 2003, the Company had a
net book value of  $6,319,967.  The net book value per share as of that date was
$1.13.


     The Board  adopted  management's  analysis of this  factor.  This factor in
isolation  would  indicate a higher  Minimum  Fixed  Price;  however,  the Board
considered  that it would be difficult to sell the net assets at full book value
in the  foreseeable  future,  because  many of the  assets  are based on a going
concern,  accrual basis and are not readily saleable, and the assets are subject
to  substantial  insurance  regulatory  reserves  which are  based on  actuarial
estimates and would have to be settled prior to any sale.  Therefore,  the Board
concluded that it was  appropriate to merely include this factor with the others



                                       15



in the overall  determination  of a fair price but not to consider book value as
the determinative  factor. As part of the combined analysis of the Minimum Fixed
Price, the Board concluded that this factor supports the fairness of the Minimum
Fixed Price.

     Discounted book value - In order to ascertain what a cash book value was as
of the date of this transaction,  management  developed a discounted book value.
This  would be the  book  value in the  event  of the sale of the  assets  after
discounting  those assets that have a limited value as a result of the period of
time it would  take to  convert  those  assets  into  assets  utilizable  by the
business.  Cumberland has four assets on its balance sheet that would  basically
not be  utilized by the  business in a sale,  and  management  discounted  these
assets.  The Management Report analyzed the assets as of September 30, 2002. The
deferred tax asset of approximately  $640,872 will be realized over the next two
years  and,  as a  result,  management  established  a  discount  factor of 12%,
resulting in a discounted value of approximately  $483,000.  Management believes
that 12%  represents  a low  estimate  of the rate of  return  demanded  by most
investors in small cap stocks. The Company has intangible assets and goodwill of
approximately  $444,000.  These intangibles and goodwill, in the event of a sale
of the  Company's  assets,  would carry no value.  The Company  currently has an
investment  in an  agency  that is not  consistent  with its  line of  business.
Although the  investment  has a book value of  $640,000,  in the event of a sale
management  believes this asset would be discounted over the five years it would
take to recover the investment  value. As a result,  this discount  reduces that
asset from $641,000 to $338,209. The Company has approximately $355,000 in fixed
and other assets that consist primarily of computer hardware and software. These
assets have little or no value in the event of an asset  sale.  After  adjusting
the  discounted  book value for the  discounts,  the  discounted  book value was
$4,291,330  for a per  share  value of $.77 as of  September  30,  2002.  In the
Supplement,  the analysis was updated  through  March 31, 2003.  The  discounted
value of the  deferred  tax asset had  declined to $376,355  and the  discounted
value of the  investment in the agency had increased to $690,284.  The resulting
discounted  book  value per share as of March 31,  2003 was $.93.  This value is
higher than the Minimum Fixed Price.

     The Board adopted management's analysis of this factor. The Board concluded
that,  although  discounting  the asset values  probably  yields a more accurate
approach  than  straight  book  value,  the issue of  saleability  of the assets
continues to mitigate against viewing this factor as determinative. In addition,
there is  uncertainty  involving the valuation of the reserves for insurance and
derivative  losses.  The Board  decided to use this factor as one of the several
factors to  consider  in the overall  conclusion  of fair value.  As part of the
combined  analysis of the Minimum  Fixed Price,  the Board  concluded  that this
factor supports the fairness of the Minimum Fixed Price.


     Comparative Company Value - The Board reviewed  management's  assessment of
publicly traded  insurance  companies,  included in the Management  Report.  The
Company reviewed 105 companies that were listed as insurance industry,  property
and  casualty  insurers.  It  narrowed  down  that  list to 11 that  had  market
capitalizations  of $5 million or less.  Of the 11, six were  eliminated  on the
basis that they were either not property or casualty insurance companies, or had
ceased writing  insurance.  The remaining  five companies were Alkity  Insurance
Company,  Gainsco,  Inc., Goran Capital Inc.,  Symons  International  Group, and
Universal Insurance Holdings, Inc. Of these five, management determined that the
price to sales  ratio and the  price to book  ratio of the  comparable  entities
provided a meaningful  comparable  valuation factor. A sixth company, CNA Surety
Company,  was not considered  comparable because it has a much larger scale than
the  Company  and unlike the  Company,  has  remained  profitable  over the past
several years.  After applying the price to book ratio, only three resulted in a
positive ratio and the two with negative  ratios were excluded.  On the price to
sales ratio,  all five were  meaningful.  The average price to sale ratio of the
five comparable  companies resulted in a 6.39% ratio, which would reflect a $.20
value on the price of Cumberland. In the valuation of price to book, it resulted
in a 26.33 ratio,  which would translate into $.26 per share.  Taking an average
of the two resulted in a valuation of the Cumberland  stock at $.23 per share on
a  comparable  company  basis.  Management  believed  that this was a meaningful
analysis as it relates to the value of  Cumberland.  In the  Supplement  update,
this average was  determined  to be $.31.  Management  was not familiar with any
recent merger and acquisition  transactions among small insurance  companies and
therefore did not perform a comparable transaction analysis.


     The Board  adopted  management's  analysis of this  factor.  This factor in
isolation  would  indicate  that the price paid should be lower than the Minimum
Fixed  Price.  The Board  considered  this  factor  somewhat  important  because
comparable  companies  provide  an  objective  measure  of value.  However,  the
usefulness of this factor is mitigated by the  difficulty in  ascertaining  true
comparability  in companies.  The Board therefore used this as merely one of the



                                       16



several factors in its fairness determination.  As part of the combined analysis
of the Minimum Fixed Price,  the Board  concluded that this factor  supports the
fairness of the Minimum Fixed Price.

     Liquidation   Value.  In  consideration  of  the  Minimum  Fixed  Price  of
Cumberland's  common stock,  the value of the Company in the case of liquidation
was  determined.  The balance sheet was analyzed for items where  immediate cash
value was not equal to the value recorded on the books. The items that would not
have the same cash value  versus book value were deemed  inconsequential  in the
analysis.  Inasmuch  as the  majority  of the assets of the  business  are cash,
accounts receivables or payables,  management determined that the utilization of
liquidation value would simply develop a second value that would be identical to
discounted book value, and as a result,  did not add anything to the analysis of
determination  of a true fair market value for the odd lot  shareholders as part
of the reverse stock split. In addition,  management recognized that the primary
operating  asset  of the  business  is an  insurance  company  and as a  result,
liquidation is not a viable  alternative in light of the fact that it would take
some 5-7 years for all the  liabilities  of the insurance  company to expire and
pay all of the  liabilities of the business.  Management  considered that taking
the book value and  discounting  it back five years would yield a  significantly
reduced cash value today.  This reduced cash value is  approximately  $2,576,000
using a 12% discount rate (the low end of an equity investors' expected yield in
small cap stocks). This would result in a per share value of approximately $.46,
skewing  the  discounted  book value  downward  and  adding in an  average  that
management  believes doesn't add to the assessment and determination of what the
fair value should be for purposes of purchasing the odd lot shareholders' stock.
This factor in isolation would indicate that the price paid should be lower than
the Minimum Fixed Price. The Board considered and adopted management's  analysis
and  decided  not to  consider  liquidation  value in its  determination  of the
Minimum Fixed Price.  The Board  considered that this factor was not material to
the fairness of the Minimum Fixed Price.

     Going  Concern  Value.  As a  separate  analysis,  management  performed  a
separate Discounted Cash Flow, or Going Concern, analysis. This analysis was not
initially  performed in connection with the Management  Report, but was added by
management  to the  Supplement  after  receiving  comments  from  the SEC on the
initial filing of the proxy  statement.  The  Discounted  Cash Flow Analysis (or
Going  Concern)  approach  utilizes  the concept that the value of a business is
represented  by  discounting  the cash flow streams it is estimated to generate.
The estimated cash flow streams of a business enterprise are then present valued
to  reflect  the time  value of money  as well as the  associated  business  and
economic risks of that  enterprise.  Annual cash flows were based on EBITDA less
scheduled debt principal payments. A terminal value was computed on the basis of
an EBITDA  multiple  of 3.5 X, plus net working  capital,  less  remaining  debt
outstanding  and  minority  interest  in the  Company's  subsidiary.  Management
utilized  discount  rates of 18%,  20%,  and 25% to account for risks  typically
associated with equity  investments in small-cap  companies  because  management
reviewed these as rates that were indicative of those risks.  Management and the
Board  concluded  that based on their  knowledge and  experience in dealing with
investors in small-cap  companies,  investors  generally  demand returns in this
range.  Management used multiple discount rates to understand the sensitivity of
the value to changes in the rate. This yielded per share values of $0.76,  $0.65
and  $0.61,  respectively.  The  average of these  results  is $0.67.  The Board
concluded  that this factor  supported  the fairness of the Minimum Fixed Price.
The Board adopted  management's  analysis of the going concern value.  The Board
reviewed these  calculations and determined that they were not inconsistent with
the $0.70  Minimum Fixed Price based upon the  Supplement.  This average was not
factored into the $0.70 Minimum Fixed Price because it would not have materially
changed the result.


     Reconciliation of Board's  determination on minimum fixed price - After the
assessment  of the  Board  and the  review  of the  market  price,  book  value,
discounted book value, and comparative  company value, the Board determined that
there was no one factor that should be more  significant  than the others in the
assessment  and  determination  of the fair value for  purposes  of the  odd-lot
shareholders. As a result, the Board made a determination that what was fair was
the average of the valuation methods applied.  As of December 2002, this average
is the sum of market price  ($.41),  book value  ($.99),  discounted  book value
($.77),  comparative company value ($.23), divided by four, resulting in a value
per share of $.60.  In the August  2003  Supplement,  the  average is the sum of
market  price  ($.19),  book  value  ($1.13),   discounted  book  value  ($.93),
comparative  company  value  ($.31),  divided by four,  resulting in a value per
share of $.64. Management recommended as a matter of judgment that this value be
increased to $.70 to provide  additional  assurance that the Small  Shareholders
were being adequately  compensated for their shares,  and the Board adopted this
recommendation. The Board did not discuss other alternative minimum prices.



                                       17


     The Company and its affiliates are not aware of any firm offers to purchase
the Company  that have been made  during the past two years by any  unaffiliated
person. Consequently, the Board did not consider this factor in establishing the
fair value of the stock for the cash payment.

     The  Company  has not  engaged in a merger or  consolidation  with  another
company or in the sale or other transfer of a substantial  part of its assets in
the last two years,  so the Board did not consider  this factor in  establishing
the fair value of the stock for the cash payment.

     The Company has not  purchased any of its shares during the past two years.
Francis  Williams made two isolated  private  purchases during 2002 at prices of
$2.77 and $2.94 per share,  as described  under  "Security  Ownership of Certain
Beneficial  Owners and  Management."  Although these  purchases were at a higher
price  than the  Minimum  Fixed  Price of $0.70  per  share,  the  Board did not
consider these  purchases as a material factor because of the isolated nature of
these purchases and the Company's  financial  condition has  deteriorated  since
these purchases in April and July 2002.

     The Board  considered an  independent  analysis and  evaluation of the fair
market  value of the  common  stock that would be  converted  into a  fractional
share,  but,  as noted  earlier,  determined  that the  time and  expense  of an
independent  analysis  and  evaluation  were  unjustified  in the  circumstances
because the Board concluded that the method of valuation chosen by the Board was
a fair  representation  of value of the  stockholdings  for the  reasons  stated
above.  Although the Board relied on the financial  data provided by management,
the  Management  Report and the Supplement  did not contain a  determination  of
fairness, and management did not make a conclusion as to the fairness. The Board
came to its conclusion as to fairness as described in this proxy statement after
reviewing all of the data provided.  The absence of a fairness  determination by
management did not impact the Board's final determination of fairness.

     In  its  November  2002  meeting,   the  Board  discussed  two  alternative
transactions for reducing or eliminating the Small Shareholders,  a tender offer
and open market purchases.  The Board, however,  determined that either of these
alternatives would not result in shares being tendered by a sufficient number of
record  shareholders  so  as  to  accomplish  the  Company's  objectives.   This
determination  was based upon the low trading  volumes in the common stock.  The
Board  considered  that given the large  number of  holders of small  numbers of
shares,  even if they were aware of the offer,  it is  unlikely  that they would
make the effort to tender their shares in sufficient  numbers to accomplish  the
Company's objective.  For instance, there are over 580 shareholders each holding
less than 150 shares;  and each of those  holdings is worth less than $40 at the
average  market  price of $0.26 noted above.  Management  did not think that the
Company had sufficient  resources to purchase all the shares,  even if tendered.
In addition,  management  did not believe that it would be good use of resources
to attempt to offer a substantial premium to purchase some of the shares if such
a premium was necessary to attract otherwise  uninterested  Small  Shareholders.
The Board adopted  Management's  analysis on these points.  The Board ultimately
determined that the Reverse Stock Split proposal was the preferred method.

     In addition,  the Board discussed the possibility of selling the Company or
its assets.  The Board concluded that selling the Company as a business unit was
not a viable alternative because of the following factors:

     o    The Company's recent financial performance (as discussed above)

     o    The  recent  increase  in the  level of  reserves  for the  derivative
          instrument  and policy losses,  which  increased in the aggregate from
          $5.2  million  to $8.9  million  from  year end 2000 to 2002,  and the
          uncertainty surrounding potential losses from the derivative

     o    The  general  state of the  economy  and  particularly  the pattern of
          losses in the  indemnity  business,  as  indicated  in the  Management
          Report and discussed below under Comparable Companies


     The Board noted in this  connection  that the Company has not  received any
offers to buy the  business in the last  several  years.  The same  factors also
indicated  that  selling the assets  would be  difficult,  and in  addition  the
illiquid  nature  of the  assets  and the  difficulty  in  resolving  all of the
liabilities   underlying  the  reserves  would  make  selling  the  assets  more
difficult,  as discussed above under  "Consideration for determining the Minimum
Fixed Price - Discounted  Book Value." The Board  discussed this  alternative at
its  meeting in  November  2002.  Because the sale of the Company did not appear


                                       18


feasible, the Board did not explore the advantages and disadvantages of the sale
of the Company as compared to the other alternatives.

     The Board  also  weighed  all the  alternatives  against  the  prospect  of
remaining a public  company and  maintaining  the  Company's  posting on the OTC
Bulletin  Board.  For the  reasons  described  at  "Purpose  and Reasons for the
Reverse  Stock  Split." the Board  concluded  that this would not be in the best
interest of the either the Small  Shareholders or the unaffiliated  shareholders
who will remain after the Reverse  Stock  Split.  The Board  concluded  that the
Small  Shareholders would be better served by having their shares cashed out due
to the  current low market  price and low  volumes,  and the other  unaffiliated
shareholders would be better served by realizing the cost savings to the Company
which are expected from the Reverse Stock Split.

     After  consideration  of all the foregoing  factors,  all of the directors,
including  those who are not employees of the Company,  have determined that the
Reverse  Stock Split  proposal is  procedurally  and  substantively  fair to the
shareholders of the Company,  including the  unaffiliated  shareholders  and the
Small Shareholders.

     The Board also considered the timing of implementation of the Reverse Stock
Split  proposal  and  the  intended   termination  of  the  Company's  1934  Act
registration  for the  common  stock.  The Board  concluded  that the  continued
monetary and human resource expense of such  registration was unjustified  given
the Company's inability to effectively take advantage of many of the benefits of
public  registration.  To  achieve  the  savings  from  termination,  the  Board
instructed  management  to  implement  the  Reverse  Stock  Split  proposal  and
termination of registration  of the common stock as soon as practicable.  Please
see the section  contained herein captioned  "Purpose and Reason for the Reverse
Stock Split Proposal" for further discussion of the expenses of registration and
the Company's experiences with respect to the benefits of such registration.

     With  respect  to  its  intent  to  terminate   the   Company's   1934  Act
registration,  the Board has considered and will continue to consider the effect
that  terminating the  registration of the common stock might have on the market
for the holders of the common stock and the ability of those shareholders to buy
and sell  their  shares.  The Board also has  considered  and will  continue  to
consider  whether the value of the common stock is being fully recognized in the
public  market,  and as a result,  whether  the  Company  can  effectively  take
advantage of a public market for its stock.  The Board also has  considered  and
will  continue  to  consider  the need to  protect  the  confidentiality  of the
Company's proprietary information,  along with the potential direct cost savings
and savings related to the time and effort  currently  required of management to
comply with the reporting  and other  requirements  associated  with a reporting
company.  After taking into account all of the  considerations  and  conclusions
described herein with respect to the benefits and  disadvantages of registration
of the  common  stock  under  the 1934 Act at the  present  time,  the Board has
determined  that it will terminate  registration  of common stock under the 1934
Act  as  soon  as  practical  following  the  Reverse  Stock  Split  absent  any
significant  changes in the  foregoing  considerations  that would result in the
Board determining that the benefits of continued registration would outweigh the
disadvantages. The Board does not foresee any such change in circumstance in the
reasonably near future. See also the section contained herein captioned "Purpose
and Reason for the Reverse Stock Split Proposal."

CONDUCT OF THE COMPANY'S BUSINESS AFTER REVERSE STOCK SPLIT

     The Company  expects its  business and  operations  to continue as they are
currently  being  conducted and,  except as disclosed  below,  the Reverse Stock
Split is not anticipated to have any effect upon the conduct of its business.

     Other than as  described in this Proxy  Statement,  neither the Company nor
its  management  has any current plans or proposals to effect any  extraordinary
corporate transaction,  such as a merger, reorganization or liquidation; to sell
or  transfer  any  material  amount  of its  assets;  to  change  its  Board  or
management;  to  change  materially  its  indebtedness  or  capitalization;   or
otherwise to effect any material change in its corporate  structure or business.
See also the information  contained herein in the section captioned "Purpose and
Reasons for the Reverse Stock Split."

     As a result of the  Reverse  Stock  Split,  the  Company  plans to become a
privately held company by termination of  registration of the common stock under
the 1934 Act,  if the number of  Registered  Shareholders  is fewer than 300. In
addition,  because  the common  stock will be held by fewer than 300  registered
holders, the Company will be relieved of the obligation to comply with the proxy
rules of  Regulation  14A under  Section 14 of the 1934 Act,  its  officers  and


                                       19


directors  and  shareholders  owning  more than 10% of the common  stock will be
relieved of certain  reporting  obligations  under the 1934 Act, and the Company
will cease filing periodic reports under the 1934 Act.

STRUCTURE OF REVERSE STOCK SPLIT

     The Reverse Stock Split is of the common stock.  If the Reverse Stock Split
proposal is  approved  and  occurs,  the  Reverse  Stock Split will occur on the
Effective  Date,  unless  management  elects to abandon the Reverse Stock Split.
Assuming  shareholder  approval of the Reverse Stock Split proposal is obtained,
the Company will file the Amendment  within 10 business  days of the  proposal's
approval at the Special  Meeting.  The structure of the Reverse Stock Split, for
each shareholder is as follows:

     1. Registered Shareholders with Fewer Than 150 shares. If the Reverse Stock
Split proposal is implemented and you are a Registered  Holder of fewer than 150
shares of common stock of the  Effective  Date,  you will receive a cash payment
instead of a fractional share of common stock. After the reverse split, you will
have no  further  interest  in the  common  stock.  You will not have to pay any
service  charges or brokerage  commissions in connection  with the Reverse Stock
Split  or the  cash  payments.  Because  the  Current  Market  Price  cannot  be
determined  until  after  the  special  meeting,  shareholders  will be asked to
approve the merger without  knowing the final  consideration  for the fractional
shares.  However,  that  consideration will not be less than the $0.70 per share
Minimum Fixed Price.

     2.  Registered  Holder With 150 or More Shares.  If the Reverse Stock Split
proposal is implemented and you are a Registered Holder of 150 or more shares of
common stock as of the Effective Date, we will convert your shares into 1/150 of
the number of shares you held  immediately  prior to the reverse  split,  with a
cash payment for any shares that would  otherwise  result in fractional  shares.
For  example,  if you are a Registered  Holder of 10,010  shares of common stock
immediately  prior to the  Effective  Date,  your shares will be converted to 66
shares of common stock and you will receive a cash payment for 110 shares.

     3.  Beneficial  Owners of the Company  Stock.  Nominees  (such as a bank or
broker) may have required  procedures,  and shareholders holding common stock in
street name should contact their nominees to determine how they will be affected
by the Reverse Stock Split.  NOTE:  If you are a beneficial  owner of fewer than
150 shares of common  stock or the  beneficial  owner of more than 150 shares of
common  stock,  but not in an even  multiple  of 150,  and you want to have your
shares exchanged for cash payment,  you should instruct your nominee to transfer
your  shares into a record  account in your name in a timely  manner so that you
will be considered a holder of record immediately prior to the Effective Date.

     In the event any  certificate  representing  shares of common  stock is not
presented  for exchange or cash payment upon request by the Company,  the common
stock or the cash payment,  as applicable,  will be  administered  in accordance
with the  relevant  abandoned  property  laws.  Until the  common  stock or cash
payments have been  delivered to the public  official  pursuant to the abandoned
property  laws,  such cash payments or  certificates  will be paid to the holder
thereof or his designee, without interest, at such time as the stock certificate
has been properly presented for exchange or cash payment.

     The Reverse Stock Split is structured to be a "going  private"  transaction
as defined in Rule 13e-3  promulgated  under the 1934 Act because it is intended
to,  and,  if  completed,   will  likely   terminate  the  Company's   reporting
requirements  under the 1934 Act. In  connection  with the  Reverse  Stock Split
proposal,  the Company has filed with the SEC a Schedule  13E-3 pursuant to Rule
13e-3 under the 1934 Act.

     Even if the  Reverse  Stock  Split is  approved,  the Board may abandon the
proposed  Reverse  Stock Split at any time before or after the meeting and prior
to the filing of the amendment if for any reason the Board deems it advisable to
do so. In addition, the Board may make any and all changes to the amendment that
it deems necessary to file the amendment with the Florida Secretary of State and
give effect to the Reverse Stock Split.



                                       20


CERTAIN EFFECTS OF REVERSE STOCK SPLIT PROPOSAL ON THE COMPANY'S SHAREHOLDERS

     1. Rights,  Preferences and Limitations.  There are no material differences
between the respective rights, preferences or limitations of the existing common
stock and the "post-reverse split" common stock.

     2.  Financial  Effect.  The Reverse  Stock Split and the  expenditures  for
professional  fees and other expenses related to the transaction will not have a
material effect on the Company's  balance sheet,  statement of income,  earnings
per share,  ratio of  earnings  to fix  charges  or book  value per  share.  The
expenditures have been estimated as follows:  cash payment for fractional shares
- $50,000;  fees and expenses of legal  counsel - $40,000;  fees and expenses of
accountants  - $8,000;  printing  and  postage - $10,000;  and  miscellaneous  -
$10,000.  The only consideration to be paid will be the cash payment, to be paid
for shares that would otherwise be converted into fractional shares. The Company
will use its  cash-on-hand  and  investments as the sole source of funds for the
expenditures for the cash payout to the small  stockholders and for professional
fees and other expenses related to the transaction. Management believes that the
Company has sufficient  liquid assets to cover these payments,  even if there is
an increase in the amount needed to cash out fractional shares.

     3. Effect on Market for Shares.  The Company  estimates  that the number of
shares of common stock  outstanding  after the Reverse Stock Split, if effected,
will be as follows:

             CLASS            NUMBER OF SHARES         NUMBER OF SHAREHOLDERS
             -----            ----------------         ----------------------
             Common                39,435                        228

     The termination  will also cause the common stock to be ineligible to trade
on the OTC Bulletin Board.  Although the Company  believes that the common stock
may be listed on the Pink  Sheets,  there  can be no  assurance  that it will be
listed.  In addition,  management  believes  that trading  volumes are generally
lower on Pink Sheets, which may reduce the market for the common stock.

     The Company has no current plans to issue  additional  shares of stock, but
the  Company  reserves  the  right to do so at any time and from time to time at
such  prices  and on  such  terms  as the  Board  determines  to be in the  best
interests  of the Company  and its then  shareholders.  Persons who  continue as
shareholders  following  implementation of the Reverse Stock Split proposal will
not have any  preemptive  or other  preferential  rights to purchase  any of the
Company's  stock that may be issued by the  Company in the  future,  unless such
rights are currently specifically granted to such shareholder.

     4. As a  result  of the  Reverse  Stock  Split,  Mr.  Williams'  beneficial
ownership will increase from 79.9% to 81.1% of the outstanding  common stock. As
a result of the Reverse  Stock  Split,  Mr.  Williams'  interest in the net book
value and net  earnings of the Company  also will  increase  from 79.9% to 81.1%
causing his interest to increase as shown below:



                                                                                       
                                                                          F. Williams'              F. Williams'
                                                                        Interest Before            Interest After
                                                Company Total         Reverse Stock Split       Reverse Stock Split
                                              ------------------      ---------------------     ---------------------

Net loss for year ended 12/31/02.......          $1,569,169                $1,253,766                $1,272,596

Book value as of 12/31/02..............           6,487,279                 5,183,336                 5,261,183

Book value as of 9/30/03...............           6,303,427                 5,036,438                 5,112,079



     There will not be a significant income tax effect on Francis Williams.  Mr.
Williams and his family members collectively will receive approximately $700 for
small holdings  beneficially owned by him through family members and trusts. The
record holder will pay capital gains tax on the proceeds from these shares.  See
"Material Federal Income Tax Consequences".

     5. Securities  Laws Relating to the  Post-Reverse  Split Common Stock.  The
Company has not filed with the SEC a registration statement under the Securities
Act of 1933 (the "1933  Act") for the  registration  of the  post-reverse  split


                                       21


common  stock to be issued and  exchanged  pursuant to the  Reverse  Stock Split
proposal.  Instead,  the  post-reverse  split  common  stock  will be  issued in
reliance on exemptions contained in Section 3(a)(9) and Rule 145(a)(1) under the
1933  Act.  Upon  consummation  of  the  Reverse  Stock  Split,  the  shares  of
post-reverse split common stock are expected to be freely transferable under the
1933 Act by those  shareholders  of the Company not deemed to be "affiliates" of
the Company.  Shares of post-reverse  split common stock acquired by persons who
are  "affiliates"  of the Company will be subject to the resale  restrictions of
Rule 144 under the 1933 Act.

     6.  Termination of 1934 Act Registration of common stock. The Reverse Stock
Split proposal will affect the public  registration of the common stock with the
SEC under the 1934 Act, as the Company intends to terminate this registration as
soon as  practicable  after  approval of the Reverse Stock Split proposal by the
shareholders.  Registration  under the 1934 Act may be terminated by the Company
if the common  stock is no longer  held by 300 or more  shareholders  of record.
Termination  of  registration  of the  common  stock  under  the 1934 Act  would
substantially  reduce the information required to be furnished by the Company to
its  shareholder  and to the SEC and would make certain  provisions  of the 1934
Act, such as proxy statement  disclosure in connection with shareholder meetings
and the  related  requirement  of an annual  report to  shareholders,  no longer
applicable to the Company.

     The termination  will also cause the common stock to be ineligible to trade
on the OTC Bulletin Board.  Although the Company  believes that the common stock
may be listed on the Pink Sheets,  there can be no assurance  that it will be so
listed.  In addition,  management  believes  that trading  volumes are generally
lower on Pink Sheets,  which will substantially reduce the market for the common
stock.

     With respect to the executive officers and directors of the Company, in the
event of the intended  termination of registration of the common stock under the
1934 Act: (a) executive officers, directors and other affiliates would no longer
be subject to many of the reporting  requirements  and  restrictions of the 1934
Act,   including  without   limitation  the  reporting  and  short-swing  profit
provisions of Section 16 of the 1934 Act, and (b) executive officers,  directors
and other affiliates of the Company may be deprived of the ability to dispose of
shares of common stock pursuant to Rule 144 under the 1933 Act. Upon termination
of 1934 Act registration, the Company will continue to be subject to the general
anti-fraud  provisions of federal and applicable state securities laws. See also
the  information  contained  above in the  section  captioned  "Securities  Laws
Relating to the Post-Reverse Split Common Stock."

INTERESTS OF CERTAIN PERSONS IN THE PROPOSED TRANSACTION

     Upon  completion  of the Reverse  Stock Split,  the  percentage  beneficial
ownership  of the  outstanding  shares  of the  directors  will  increase.  This
increase is summarized in the table below:

                                            Percentage Ownership
                                    --------------------------------------
                                       Pre-Split           Post-Split
                                    -----------------    -----------------

     Francis M. Williams                 79.9%                81.1%
     Joseph M. Williams                   6.4%                 6.5%
     Andrew J. Cohen                       *                    *
     R. Donald Finn                        *                    *
     --------------------
        *less than 1%

     See also "Security Ownership of Certain Beneficial Owners and Management."

     The directors also will receive cash for their fractional shares, estimated
to be less than $700 in the case of Francis Williams and less than $100 for each
of the other directors.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

     We summarize  below the material  federal  income tax  consequences  to the
Company and shareholders  resulting from the Reverse Stock Split proposal.  This
summary is based on existing U.S. federal income tax law, which may change, even
retroactively.  This summary is not binding on the Internal Revenue Service (the
"IRS"). The applicable laws may be changed, possibly retroactively, resulting in


                                       22


United States federal tax consequences different from those set forth below. The
Company has not sought, and will not seek, any ruling from the IRS or opinion of
counsel with respect to the statements made in the following summary,  and there
can be no  assurance  that the IRS will not  take a  position  contrary  to such
statements  or that any such  contrary  position  taken by the IRS  would not be
sustained by a court.  There can be no assurance  and none is given that the IRS
or the  courts  will not adopt a position  that is  contrary  to the  statements
contained in this summary.  This summary does not discuss all aspects of federal
income  taxation,  which  may be  important  to you in light of your  individual
circumstances,  and many  shareholders  may be subject to special tax rules.  In
addition,  this summary does not discuss any state, local, foreign, or other tax
considerations.  You  should  consult  your  tax  advisor  as to the  particular
federal,  state, local,  foreign,  and other tax consequences,  in light of your
specific circumstances.

     This  summary  also  assumes  that  you are a one of the  following:  (i) a
citizen or resident of the United  States;  (ii) a  corporation  or other entity
taxable as a corporation created or organized under U.S. law (federal or state);
(iii) an estate the income of which is subject to U.S.  federal income  taxation
regardless  of its  sources;  (iv) a trust if a U.S.  court is able to  exercise
primary  supervision  over  administration  of the  trust  and one or more  U.S.
persons have authority to control all substantial decisions of the trust; or (v)
any other person whose  worldwide  income and gain is otherwise  subject to U.S.
federal income  taxation.  This summary also assumes that you have held and will
continue to hold your shares as capital assets for investment purposes under the
Internal Revenue Code of 1986, as amended.

     We believe  that the Reverse  Stock Split  proposal  should be treated as a
tax-free  "recapitalization" for federal income tax purposes. This should result
in no material federal income tax  consequences to the Company.  If you continue
to hold common stock after the Reverse Stock Split, you should not recognize any
gain or loss in the Reverse  Stock Split,  and you should have the same adjusted
tax  basis  and  holding  period  in your  new  stock  as you had in your  stock
immediately prior to the Reverse Stock Split.

     The  receipt by a  shareholder  of a cash  payment in lieu of a  fractional
share  pursuant to the Reverse  Stock  Split will be a taxable  transaction  for
federal  income tax purposes.  Accordingly,  a shareholder  who receives cash in
lieu of a fractional share should recognize gain or loss equal to the difference
between the amount of cash  received and the portion of the  aggregate tax basis
in his or her shares of common stock allocable to the fractional  share interest
for which he or she  received  cash.  If the shares of your stock were held as a
capital asset on the Effective Date, then the shareholder's gain or loss will be
a capital gain or loss.  Such  capital gain or loss will be a long-term  capital
gain or loss if the shareholder's  holding period for the shares of common stock
is longer than one year.

APPRAISAL RIGHTS; ESCHEAT LAWS

     There  are no  appraisal  rights  for any  shareholder  who  dissents  from
approval of the Reverse  Stock Split  proposal  under the  Company's  governance
documents.  Also, the Company  concluded that there are no appraisal  rights for
any  shareholder  who dissents from approval of the Reverse Stock Split proposal
under  Florida  General  Corporation  law.  We refer you,  however,  to Sections
607.1302 and 607.0604 of the Florida Statutes which  respectively  prescribe the
rights of  shareholders to dissent and general  treatment of fractional  shares.
Section 607.0604 (5) of the Florida Statutes states that, "when a corporation is
to pay in money the value of  fractions of a share,  the good faith  judgment of
the Board of Directors as to the fair value shall be conclusive." The absence of
appraisal  rights does not limit any other rights or actions under state law for
shareholders who are aggrieved by reverse stock splits generally.

     Shareholders whose shares are eliminated and whose addresses are unknown to
the Company,  or who do not return their stock certificates and request payment,
generally  have a certain  number of years  from the date of the  Reverse  Stock
Split to claim the cash payment payable to them. If no claim is made within this
period,  state law generally  provides that these payments are deemed  abandoned
and  forfeited  to the  state.  The  state  law of the  state of the last  known
residence of the shareholder,  as shown on Company records,  usually governs. In
Florida,  this holding period is 5 years, but the exact number of years may vary
from state to state.



                                       23


INTENTION TO TERMINATE PUBLIC REGISTRATION

     The Company  intends to terminate  public  registration of the common stock
with the SEC under the 1934 Act as soon as  practicable  after  approval  of the
Reverse Stock Split proposal by the shareholders.  Shareholders should note that
the decision by the Board to terminate  1934 Act  registration  does not require
shareholder  approval and will not be voted on at the Special Meeting.  Further,
there is no assurance  that the number of such  shareholders  will be fewer than
300  following  the Effective  Date.  While the Company  intends to cease public
registration  of its common stock  following the Reverse Stock Split,  the Board
may choose not to implement this strategy if the Board determines that it is not
then in the best  interests of the Company and its  shareholders  given the then
existing market conditions. See also the discussion of this issue in the section
contained herein captioned "Fairness of Reverse Stock Split Proposal."

     The  termination  will also cause the common stock to be  ineligible on the
OTC Bulletin Board.  Although the Company  believes that the common stock may be
listed on the Pink Sheets,  there can be no assurance that it will be so listed.
In addition,  management  believes that trading  volumes are generally  lower on
Pink Sheets, which will substantially reduce the market for the common stock.

     The Board  recommends  that you vote FOR the Reverse Stock Split  proposal.
Proxies  solicited  by the Board  will be voted  FOR this  Reverse  Stock  Split
proposal, unless you specify otherwise in your proxy.



                                       24



                                   MANAGEMENT

The current directors and executive officers of the Company are as follows:



Name                        Age          Position
----                        ---          --------
Francis M. Williams         62           Chairman of the Board of Directors
Joseph M. Williams          47           President and Treasurer
Andrew J. Cohen             49           Director
R. Donald Finn              60           Director


     All  Directors of the Company hold office until the next annual  meeting of
shareholders and the election and qualification of their successors. Officers of
the Company are elected  annually by the Board of  Directors  and hold office at
the discretion of the Board.

     Set forth  below is  information  regarding  the  directors  and  executive
officers of the Company:

     Francis M. Williams has been Chairman of the Board of the Company since its
inception and, until June 1992, was President of the Company.  In addition,  Mr.
Williams has been  Chairman of the Board and Director of  Cumberland  Casualty &
Surety Company  ("Cumberland  Casualty") and Surety  Specialists,  Inc.,  wholly
owned subsidiaries of the Company,  from inception and President and Chairman of
the Board of Kimmins since its inception in 1979.  Prior to November  1988,  Mr.
Williams  was the Chairman of the Board and Chief  Executive  Officer of Kimmins
Corp. and its  predecessors  and sole owner of K Management Corp. From June 1981
until January 1988,  Mr.  Williams was the Chairman of the Board of Directors of
College  Venture Equity Corp., a small business  investment  company;  and since
June 1981, he has been Chairman of the Board,  Director, and sole shareholder of
Kimmins Coffee Service, Inc., an office coffee service company. Mr. Williams has
also been a director of the National Association of Demolition Contractors and a
member of the executive committee of the Tampa Bay International Trade Council.

     Joseph M. Williams has served as the Treasurer and President of the Company
since June 1992.  He also served as Vice  President and Secretary of the Company
from its inception on November 18, 1991 through June 1992. Mr.  Williams  served
as a member of the Board of  Directors  of the Company  from  November  18, 1991
through February 24, 1997. In addition,  Mr. Williams has been the Secretary and
Treasurer  of  Kimmins  Corp.  since  October  1988 and a member of the Board of
Directors of Cumberland  Casualty  since 1988. He held the position of President
of Cumberland  Casualty from 1991 through August of 1996. From 1989 through 1990
he held the position of Secretary and Treasurer of Cumberland  Casualty and from
1991 through 1994 served as Treasurer of Cumberland  Casualty.  Mr. Williams has
been employed by the Company and Kimmins Corp. in various capacities since 1994.
From January  1982 to December  1983,  he was  managing  partner of Williams and
Grana, a firm engaged in public accounting.  From January 1978 to December 1981,
Mr.  Williams was employed as a senior tax  accountant  with Price  Waterhouse &
Company. Joseph M. Williams is the nephew of Francis M. Williams.

     Andrew J. Cohen was elected as a Director to the Company's  Board effective
February 24, 1997.  Mr. Cohen  currently  is  Co-President  and Chief  Executive
Officer of ABC Capital  Corp.,  an  investment  management  firm based in Tampa,
Florida and also acts as Co-Chairman on its Board of Directors. In addition, Mr.
Cohen  is  President  of  Albany  Associates,  Inc.,  a Tampa  based  management
consulting  firm. From June of 1972 through 1997, Mr. Cohen was  co-President of
ABC Fabric of Tampa,  Inc.  which was the fourth  largest  private retail fabric
company in the United States.

     R. Donald Finn was elected as a Director to the Company's  Board  effective
September  9,  1999.  For more than the last  five  years,  Mr.  Finn has been a
partner in the law firm of Gibson,  McAskill & Crosby,  located in Buffalo,  New
York, where Mr. Finn has practiced law for more than the last 25 years.



                                       25




                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  Company and its  subsidiaries  have  entered  into  transactions  with
Kimmins  and  companies  affiliated  through  common  ownership.   Kimmins  owns
approximately  30% of the  Company's  outstanding  common  stock.  In  addition,
Francis Williams,  a Director of the Company,  owns  approximately  66.7% of the
outstanding  common stock of Kimmins and serves as its Chairman of the Board and
Chief Executive Officer. Cumberland Casualty writes surety bonds for Kimmins and
its affiliates.  Qualex Consulting Group, Inc.  ("Qualex"),  a subsidiary of the
Company, performs consulting services for Kimmins and affiliates.  For the years
ended  December  31, 2002 and 2001,  the Company and its  subsidiaries  received
$16,586 and $121,089,  respectively,  in revenue from Kimmins. Other income from
affiliates in the accompanying  consolidated  statements of operations  consists
primarily of claims  consulting  services as well as commission  income from the
Company's  subsidiary  agencies  on  bonds  sold  through  carriers  other  than
Cumberland Casualty.

     The  Company's  operating  subsidiaries  rent or lease  office space in the
cities in which they are  located.  Cumberland  Casualty and Qualex lease office
space in Tampa,  Florida from a company owned by Francis Williams,  the Chairman
of the Board of the Company,  at a monthly rate of $10,885,  pursuant to a lease
that was executed June 1, 1999 and is effective through May 31, 2009.

     In 1988,  Cumberland  Casualty  issued a surplus  debenture  to  Kimmins in
exchange for $3,000,000  which bears interest at 10 percent per annum.  In 1992,
the  debenture  due to Kimmins  from  Cumberland  Casualty  was  assigned to the
Company.  Interest and principal payments are subject to approval by the Florida
Department of Financial Services. On April 1, 1997, the Company forgave $375,000
of its $3,000,000 surplus debenture due from Cumberland  Casualty.  As a result,
Cumberland  Casualty increased  paid-in-capital by $375,000.  As of December 31,
1999, no payments  could be made under the terms of the  debenture.  On June 30,
1999, the Company forgave $576,266 of its $2,625,000  surplus debenture due from
Cumberland Casualty. As a result,  Cumberland Casualty increased paid-in-capital
to $1,000,000 from $423,734.  As of December 31, 2002, no payments could be made
under the terms of the debenture.  In 2003,  the Company  forgave the balance of
its  surplus  note to  Cumberland  Casualty  in the amount of  $2,048,734.  As a
result,  paid-in and  contributed  surplus of Cumberland  Casualty  increased to
$3,048,734.

     Effective  November  10,  1988,  the  Company  entered  into  a  $1,000,000
convertible term note agreement with TransCor Waste Services, Inc., a subsidiary
of Kimmins.  The note,  originally  due November 10, 2001,  has been extended to
November  10,  2004.  The annual  rate of  interest  is equal to one half of one
percent per annum in excess of the stated interest rate  established by the Bank
of America.  The average  interest rate for 2002 was 8.6%. On December 26, 2001,
the Company  made a principal  note  payment of  $395,945  reducing  the note to
$604,055.  The lender may convert the principal  amount of the note or a portion
thereof  into  common  stock  at  $3.00  per  share  subsequent  to a  six-month
anniversary and prior to the close of business on the maturity date.

     Cumberland  Casualty  writes  surety bonds for Kimmins and its  affiliates.
Revenues attributable to transactions with Kimmins and its affiliates were $264,
$88  and  $7,816  for  the  years  ended  December  31,  2002,  2001  and  2000,
respectively.  Qualex  performs claims  consulting  services for Kimmins and its
affiliates and other surety carriers.  Revenue  attributable to transaction with
affiliates  were  $16,586,  $121,089 and  $171,292 for years ended  December 31,
2002, 2001 and 2000, respectively.



                                       26


                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The name and address of each person or entity who owned  beneficially 5% or
more of the  outstanding  shares of common stock of the Company on September 30,
2003, together with the number of shares owned and the percentage of outstanding
shares that ownership  represents is set forth in the following table. The table
also shows information  concerning  beneficial ownership by the President of the
Company,  the  President  of  Cumberland  Casualty,  and  by all  directors  and
executive  officers  as a group.  The  number  of shares  beneficially  owned is
determined  under the rules of the SEC, and the  information is not  necessarily
indicative of  beneficial  ownership  for any other  purpose.  Under such rules,
beneficial ownership includes any shares as to which the individual has the sole
or  shared  voting  power or  investment  power  and also any  shares  which the
individual has the right to acquire within 60 days after the date hereof through
the  exercise of any stock option or other right.  Unless  otherwise  indicated,
each person has sole  investment  and voting  powers (or shares such powers with
his or her spouse) with respect to the shares set forth in the following table:



                                                                             
                                                         NUMBER OF                    PERCENTAGE OF
                                                  SHARES OF CUMBERLAND STOCK       OUTSTANDING SHARES OF
                BENEFICIAL OWNER (1)(2)              BENEFICIALLY OWNED              CUMBERLAND STOCK
                -----------------------              ------------------              ----------------

       Francis M. Williams
       c/o Kimmins Corp.
       1501 2nd Avenue
       Tampa, Florida  33605...................         4,471,001 (3)                     79.9%

       Kimmins Corp.
       1501 2nd Avenue
       Tampa, Florida  33605...................         1,723,290 (4)                     30.8%

       Joseph M. Williams......................           360,493 (5)                      6.4%

       Andrew J. Cohen.........................            47,590 (6)                       *

       R. Donald Finn..........................             7,131 (7)                       *

       All current Directors and Executive
       Officers as a group (4 persons).........         4,886,213 (8)                     86.8%

     * Ownership represents less than 1% of outstanding Company common stock.


(1)  The address of all Officers  and  Directors  of the Company  listed  above,
     unless listed separately,  are in care of Cumberland Technologies,  Inc. at
     4311 West Waters Avenue, Suite 401, Tampa, Florida 33614.

(2)  The Company  believes  that the persons named in the table have sole voting
     and   investment   power  with  respect  to  all  shares  of  common  stock
     beneficially owned by them, unless otherwise noted.

(3)  Includes 2,677,322 shares owned by Francis Williams;  1,723,290 shares held
     by Kimmins;  29,345 shares owned by Mr. Williams' wife;  22,748 shares held
     by Mr. Williams as trustee for his wife and children and 18,296 shares held
     by Mr. Williams as custodian under the New York Uniform Gifts to Minors Act
     for his children.  Mr. Williams owns 66.7% of the outstanding  common stock
     of Kimmins Corp. and is its Chairman and Chief Executive Officer.

(4)  Francis Williams has investment and voting control over these shares.

(5)  Includes  133,500 shares owned by Joseph M. Williams;  1,010 shares held by
     Mr.  Williams as trustee for his  children;  219 shares held by the Kimmins
     401(k) Plan and ESOP of which Mr.  Williams is fully vested.  Also includes
     205,764 shares held by Kimmins 401(k) Plan, Profit  Participation  Plan and
     ESOP,  and options to acquire  20,000 shares of the Company's  common stock
     held by the  ESOP,  of  which  Mr.  Williams  is a  trustee;  Mr.  Williams
     disclaims beneficial ownership of these shares.



                                       27


(6)  Includes 50% of the 72,540 shares owned by C&C Properties, a partnership in
     which Mr.  Cohen has a 50%  ownership,  6,320  shares held in trust for Mr.
     Cohen's  minor  children and options to acquire  5,000 shares of Cumberland
     common stock.

(7)  Includes 2,131 shares owned by R. Donald Finn; and options to acquire 5,000
     shares of Company common stock.

(8)  Includes  1,723,290  shares held by Kimmins  and options to acquire  30,000
     shares of Company common stock.

     Upon  completion of the Reverse Stock Split,  the  beneficial  ownership of
these persons will be as follows:



                                                                        
                                                   NUMBER OF SHARES OF            PERCENTAGE OF
                                                     CUMBERLAND STOCK         OUTSTANDING SHARES OF
              BENEFICIAL OWNER (1)(2)               BENEFICIALLY OWNED          CUMBERLAND STOCK
              -----------------------               ------------------          ----------------

       Francis M. Williams
       c/o Kimmins Corp.
       1501 2nd Avenue
       Tampa, Florida  33605...............                29,806                     81.1%

       Kimmins Corp.
       1501 2nd Avenue
       Tampa, Florida  33605...............                11,488                     31.3%

       Joseph M. Williams..................                 2,402                      6.5%

       Andrew J. Cohen.....................                   316                       *

       R. Donald Finn......................                    47                       *

       All current Directors and Executive
       Officers as a group (4 persons).....                32,571                     88.1%



     There have been no purchases of the  Company's  common stock by officers or
directors  within  the last  sixty  days.  During  the past two  years,  Francis
Williams made the following purchases:

           PERIOD             NO. OF SHARES      PRICE RANGE      AVERAGE PRICE
           ------             -------------      -----------      -------------
      Second Quarter 2002          6,000             2.77               2.77
      Third Quarter 2002           9,650             2.94               2.94




                                       28




                           CERTAIN MARKET INFORMATION

     The common stock trades on the OTC Bulletin  Board.  Prior to September 12,
2002, the common stock traded on the NASDAQ  SmallCap  Market.  The following is
the high and low sales prices for the common  stock for each quarter  during the
past two years:

              QUARTER                         HIGH             LOW
              -------                         ----             ----
              First 2001                      1.91             1.38
              Second 2001                     1.10             1.10
              Third 2001                       .98              .90
              Fourth 2001                      .95              .95

              First 2002                      1.00              .75
              Second 2002                      .59              .35
              Third 2002                       .30              .14
              Fourth 2002                      .16              .06


              First 2003                       .51              .08
              Second 2003                      .25              .17
              Third 2003                       .51              .18
              Fourth 2003 (through
                December 8, 2003)             1.30              .20


     As of September 30, 2003, there were 5,597,244 outstanding shares of common
stock, $0.001 par value per share.

DIVIDENDS

     The  payment by the Company of  dividends,  if any, in the future is within
the  discretion  of its Board of  Directors  and will depend upon the  Company's
earnings,  capital  requirements  (including  working capital needs),  and other
financial  needs.  The Company did not declare or pay dividends in 2002 and does
not  anticipate  paying any dividends on the Company's  common stock in the near
future.

     The future payment of dividends,  if any, by Cumberland  Casualty is within
the  discretion  of its  Board of  Directors  and will  depend  upon  Cumberland
Casualty's earnings,  statutory  limitations,  capital  requirements  (including
working  capital  needs)  and  financial  condition,  as well as other  relevant
factors. Applicable state laws and regulations restrict the payment of dividends
by Cumberland  Casualty to the extent of surplus profits less any dividends that
have been paid in the preceding  twelve months or net investment  income for the
year,  whichever is less, unless Cumberland Casualty obtains prior approval from
the insurance  commissioner.  Cumberland Casualty does not anticipate paying any
dividends on Cumberland Casualty common stock in the near future.




                                       29



                              SHAREHOLDER PROPOSALS

     Shareholders of the Company may submit proposals on matters appropriate for
shareholder action at meetings of the Company's  shareholders in accordance with
Rule 14a-8  promulgated  under the Exchange Act ("Rule  14a-8").  If the Reverse
Stock Split is  effected,  the Company  will no longer be subject to Rule 14a-8.
Rule 14a-8 allows certain shareholder  proposals to be included in Company proxy
statements relating to annual meetings of the shareholders,  if submitted to the
Company in a timely manner.  The Company is not required to hold annual meetings
of the  shareholders  and has no current plans to do so in 2003. In the event an
annual  meeting  is held,  in order for the  Company  to  consider  including  a
shareholder proposal in its proxy materials relating to such meeting pursuant to
Rule 14a-8,  the proposal must be received  within a reasonable  time before the
Company begins to print and mail proxy materials by the Secretary of the Company
at 4311 W. Waters Avenue,  Tampa, Florida 33614. If the Company fails to receive
notice of a shareholder  proposal within a reasonable time before it mails proxy
materials for an annual meeting,  the proposal will not be considered timely, in
which case proxies for that meeting may confer  discretionary  authority to vote
on the proposal.  If the Company fixes a date for an annual  meeting in 2003, it
will notify you of the meeting date and deadlines for delivering any shareholder
proposals.


     If you want to present a proposal  under Rule 14a-8 of the  Exchange Act at
our 2004 Annual  Meeting of  Shareholders,  send the  proposal in time for us to
receive it by  September  __,  2004.  If the date of our 2004 Annual  Meeting is
subsequently  changed by more than 30 days from the date of this year's meeting,
we  will  inform  you of the  change  and  the  date by  which  we must  receive
proposals. If you want to present business at our 2004 Annual Meeting outside of
the shareholder  proposal rules of Rule 14a-8 of the Exchange Act, the Secretary
must  receive  notice of your  proposal  by  October  __,  2004,  but not before
_________,  2004 and you must be a  shareholder  of record on the date notice to
shareholders  is mailed  and on the  record  date for  determining  shareholders
entitled to notice of the meeting and to vote.


                             SELECTED FINANCIAL DATA


     The  following  selected  financial  data  are  taken  from  the  Company's
consolidated  financial statements.  The data should be read in conjunction with
the  accompanying  consolidated  financial  statements  and the  related  notes,
Management's Discussion and Analysis and other financial information included in
the Company's  Form 10-Q for the quarter ended  September 30, 2003 and Form 10-K
for the year ended December 31, 2002, copies of which are mailed with this proxy
statement.


                                                                               
                                          Nine
                                      Months Ended                      Year Ended December 31,
                                       September 30,  -----------------------------------------------------------------
                                          2003            2002          2001         2000         1999         1998
                                     ---------------- ------------ ------------- ------------ ------------ ------------
                                                                   (In Thousands - except per share data)
Statement of Operations Data:
    Net premium income.............  $     6,084      $    13,432  $    13,641   $    12,128  $     9,618  $    7,534
    Net investment income..........          209              486          605           576          333         377
    Net  realized   capital
     gains (losses)................           70               66          306            38          129        (437)
    Commission and other income....        1,536            2,256        1,909         1,683        1,375       1,537
       Total revenue...............        7,899           16,241       16,461        14,425       11,455       9,011


    Benefits and expenses..........        8,094           18,660       16,034        12,416       10,056       9,214
    Impairment of long-lived assets            -                -          437             -            -           -
    Interest expense...............           25               62          166           203          214         118
    Income (loss) from continuing
     operations before
     extraordinary item............         (220)          (2,481)        (176)        1,806        1,185        (321)
    Income tax (benefit) expense...          (75)            (912)         (76)          764           37           -
    Extraordinary gain on
       restructuring  of note,  net
       of tax......................            -                -          158             -            -           -

    Net income (loss)..............         (145)          (1,569)          58         1,042        1,148        (321)
Income  (loss) per  common  share -
  diluted .........................  $     (0.03)     $     (0.28) $      0.01   $      0.19  $      0.21  $    (0.06)



                                       30



                                                                                         

                                         As of                           As of December 31,
                                      September 30,   ---------------------------------------------------------------
                                         2003              2002        2001          2000         1999         1998
                                      -------------------------------------------------------------------------------
                                                                               (In thousands)
Assets Balance Sheet Data:
    Investments....................  $     6,452      $     9,269  $    10,815   $     9,955  $     8,394  $    3,987
    Cash and cash equivalents......          190              593        2,654           694        2,000       4,202
    Accrued investment income......           88              124          154           185           66          55
    Accounts receivable............        1,499            2,518        4,687         4,258        3,301       3,105
    Reinsurance recoverable........       13,310           12,089        6,634         5,970        4,730       2,306
    Deferred policy acquisition
      costs........................        1,613            1,665        1,904         1,955        1,601       1,247
    Intangibles....................          376              441          534         1,115        1,267       1,456
    Other investment...............          700              700          641           583          559         553
    Deferred tax asset.............          411              401          499           175          305           -
    Income tax recoverable.........           99            1,073            -           168            -           -
    Other assets...................          186              302          372           311          315         354
    Total assets...................  $    24,924      $    29,178  $    28,894   $    25,369  $    22,538  $   17,265






                                                                                        
                                         As of                           As of December 31,
                                      September 30,   ---------------------------------------------------------------
                                         2003              2002        2001          2000         1999         1998
                                      -------------------------------------------------------------------------------
                                                                              (In thousands)
Policy Liabilities and Accruals:
    Unearned premiums..............  $     4,313      $     4,587  $     5,583   $     5,775  $     4,844  $    3,750
    Losses and LAE.................        6,615            8,896        5,285         6,246        6,409       3,220
    Derivative instruments.........        4,131            4,346        3,598             -            -           -
    Ceded  reinsurance and accounts
     payable.......................        2,557            3,803        5,142         3,359        2,277       2,615
    Income tax payable.............            -                -          113             -           35           -
    Term note to affiliate.........          604              604          604         1,000        1,000       1,000
    Non affiliate debt.............          401              455          652         1,103        1,281       1,331
    Total liabilities..............       18,621           22,691       20,977        17,483       15,846      11,916
    Total shareholders' equity.....  $     6,303      $     6,487  $     7,917   $     7,886  $     6,692  $    5,349




     The ratio of  earnings  to fixed  charges  was (i)  (4.46) and 0.07 for the
fiscal years ended  December 31, 2002 and December 31, 2001,  respectively,  and
(ii) (0.91) for the nine months ended September 30, 2003.

     The book value per share was $1.16 as of December  31, 2002 and $1.13 as of
September 30, 2003.


     Pro Forma  Information.  The transaction will not have a material effect on
the Company's balance sheet,  statement of income,  earnings per share, ratio of
earnings to fix charges or book value per share.




                                       31






                         FINANCIAL AND OTHER INFORMATION


     The information  contained in the Company's  Annual Report on Form 10-K for
the fiscal year ended  December 31, 2002 and  Quarterly  Report on Form 10-Q for
the quarter  ended  September  30,  2003,  including  the  financial  statements
contained  under the caption  "Selected  Financial  Data" on page 10 of the Form
10-K, and in the Company's Quarterly Reports, has been filed with the Securities
and Exchange Commission and is incorporated  herein by reference.  Copies of the
Form 10-K and Form 10-Q  accompany this proxy  statement.  You may read and copy
any  materials  we file with the SEC at the SEC's Public  Reference  Room at 450
Fifth Street,  N.W.,  Washington,  D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains a website at www.sec.gov  that contains  information  that we
file electronically with the SEC.



By Order of the Board of Directors,


                                /s/ Joseph M. Williams
                                ------------------------------------
                                Joseph M. Williams,
                                President and Treasurer



Tampa, Florida


                                       32



                                   APPENDIX A

                ARTICLES OF AMENDMENT TO THE AMENDED AND RESTATED
                          ARTICLES OF INCORPORATION OF
                          CUMBERLAND TECHNOLOGIES, INC.

     Pursuant to the Florida  Business  Corporation Act of the State of Florida,
the  undersigned,  being the Chairman of the Board of  Directors  of  Cumberland
Technologies,  Inc.,  a Florida  corporation  (the  "Corporation"),  does hereby
execute  these  Articles of Amendment  to the Amended and  Restated  Articles of
Incorporation  of Cumberland  Technologies,  Inc., on behalf of the Corporation,
and certify as follows:

     1.   The name of the  corporation  is  Cumberland  Technologies,  Inc. (the
          "Corporation").

     2.   Article IV of the  Corporation's  Amended  and  Restated  Articles  of
          Incorporation  is hereby  deleted in its entirety,  with the following
          substituted in its place:

                    This corporation is authorized to issue 10,000,000 shares of
               Common Stock,  $.15 par value,  and 1,000,000 shares of Preferred
               Stock,  $.15 par  value,  with  such  rights  and  privileges  as
               determined by the Directors of the corporation. The Common Shares
               and  Preferred  Shares shall be issued at such times and for such
               consideration  as  determined  by the Board of  Directors  of the
               Corporation.


     3.   Upon  the   effectiveness  of  the  foregoing   amendment,   each  150
          outstanding  shares  of  Common  Stock of the  Corporation,  par value
          $.001,  shall be  combined  into  one  share  of  Common  Stock of the
          Corporation, par value $.15. Outstanding shares of Common Stock with a
          par value of $.001,  which would otherwise be  respectively  converted
          into a fractional share of Common Stock of the Corporation,  each with
          a par  value of $.15,  will be  cancelled,  with the  holders  of such
          shares  receiving cash payment equal to $0.70 per share. The amendment
          will become effective on _______, 2004.

     4.   The date of adoption of the  resolution  approving the  combination of
          shares of this  Corporation  set forth in the  foregoing  amendment is
          January ___, 2004.


     5.   The   foregoing   amendment   was  required  to  be  approved  by  the
          shareholders  of the  Corporation and the number of votes cast for the
          amendment  by  the   shareholders   was  sufficient  for  approval  in
          accordance with Florida General Corporation Law.

     IN WITNESS WHEREOF,  the undersigned  Chairman of the Board of Directors of
the  Corporation  has caused  these  Articles  of  Amendment  to the Amended and
Restated Articles of Incorporation of Cumberland Technologies,  Inc., as of this
____ day of __________________.

                                          CUMBERLAND TECHNOLOGIES, INC.


                                       By:______________________________________
                                           Francis M. Williams,
                                           Chairman
ATTEST:

By: _______________________________
Carol Black
Secretary
                                [CORPORATE SEAL]


                                       33




                          CUMBERLAND TECHNOLOGIES, INC.

                          PROXY SOLICITED ON BEHALF OF
             THE BOARD OF DIRECTORS OF CUMBERLAND TECHNOLOGIES, INC.


     The undersigned  hereby appoints Joseph M. Williams as proxy, with power of
substitution,   to  represent  the   undersigned  at  the  Special   Meeting  of
Shareholders of Cumberland  Technologies,  Inc. (the  "Company"),  to be held at
__________ p.m., local time, on January __, 2004, at the Company's  headquarters
located at 4311 W. Waters Avenue,  Tampa, Florida 33614, and at any adjournments
thereof, to vote the number of shares which the undersigned would be entitled to
vote if present in person in such manner as such proxies may  determine,  and to
vote on the following proposals as specified below by the undersigned.


(1) Reverse Stock Split 1-for-150

                    _____VOTE FOR ____VOTE AGAINST ___ABSTAIN

     This  proxy when  properly  executed  will be voted in the manner  directed
herein by the undersigned  shareholder.  IN THE ABSENCE OF SPECIFIED DIRECTIONS,
THIS PROXY WILL BE VOTED IN FAVOR OF THE APPROVAL OF THE AMENDMENT  DESCRIBED IN
THIS PROXY.  The proxies are also  authorized to vote in their  discretion  upon
such other  matters as may properly  come before the meeting or any  adjournment
thereof, and which were not known within a reasonable time before the meeting.

     If signing as attorney, administrator,  executor, guardian, trustee or as a
custodian for a minor,  please add your title as such. If a corporation,  please
sign in full  corporate  name and indicate the  signer's  office.  If a partner,
please sign in the partnership's name.


                  X_________________________________________________________

                  Printed
                  Name______________________________________________________

                  X_________________________________________________________

                  Printed
                  Name______________________________________________________

                  Dated
                  __________________________________________________________






                                       34