purchase price of $23.60 per share during 1998.  On May 11, 1999 the Board of Directors approved the repurchase of an additional 200,000  shares of the Company' s common stock. Pursuant to this approval, the Company repurchased  174,234 shares in the twelve months ended December 31, 2000 at an average per share price of  $12.18.  On May 9, 2000 the Board of Directors approved the repurchase of an additional 500,000 shares  of the Company' s common stock. As of March 29, 2001, no shares have been repurchased  pursuant to this approval.  During the twelve months ended December 31, 2000, the Company repurchased common stock  for $2,230,797 and issued common stock totaling $142,680 in satisfaction of stock option  exercises, stock bonuses and other stock issuances. In 2000, retained earnings had a net increase  of $709,657, after repurchases and issuances reduced retained earnings by $2,088,117.  Management believes that funds generated from operations (primarily underwriting and  investment income) will enable the Company to adequately meet its operating needs and is  unaware of any trend likely to result in adverse liquidity changes. In addition to operational  liquidity, the Company maintains a high degree of liquidity within its investment portfolio in the  form of short-term investments and other readily marketable securities.  The Company' s primary exposure to market risk relates to the impact of adverse changes in  interest rates and market prices of its investment portfolio. Increases in interest rates diminish the  value of fixed-income securities and preferred stock and decreases in stock market values  diminish the value of common stocks held.  $^{ }$QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK $^{ }$CORPORATE OVERSIGHT The Company generates substantial investable funds from its two insurance subsidiaries. In  formulating and implementing policies for investing new and existing funds, the Company has  emphasized maximizing total after-tax return on capital and earnings while ensuring the safety of  funds under management and adequate liquidity. The Company' s Board of Directors oversees  investment risk management processes. The Company seeks to invest premiums and other  income to create future cash flows that will fund future claims, employee benefits and expenses,  and earn stable margins across a wide variety of interest rate and economic scenarios. The Board  has established specific investment policies that define the overall framework for managing  market and other investment risks, including the accountabilities and controls over these  activities. The Company may use the following tools to manage its exposure to market risk  within defined tolerance ranges: 1) rebalance its existing asset portfolios or 2) change the  character of future investments.  16 © Investors Title Company 