1
<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996).
For the fiscal year ended December 31, 1996.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission file number 0-7201.
POE & BROWN, INC.
(Exact name of Registrant as specified in its charter)
Florida 59-0864469
_______________________________ __________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
220 South Ridgewood Avenue, Daytona Beach, FL 32114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 252-9601
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
(Title of class)
________________________________
Indicate by check mark whether the Registrant (1) has filed all reports re
quired to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past ninety (90) days. Yes X No ___
____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, computed by reference to the last reported price at which
the stock was sold on March 7, 1997, was $176,787,330.
The number of shares of the Registrant's common stock, $.10 par value, out
standing as of March 7, 1997, was 8,699,489.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1996 Annual Report to Shareholders are
incorporated by reference into Parts I and II of this Report. With the
exception of those portions which are incorporated by reference, the
Registrant's Annual Report to Shareholders is not deemed filed as part of
this Report.
Portions of the Registrant's Proxy Statement for the 1997 Annual Meeting of
Shareholders are incorporated by reference into Part III of this Report.
<PAGE 2>
POE & BROWN, INC.
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 1996
PART I
ITEM 1. BUSINESS
GENERAL
Poe & Brown, Inc. (the "Company") is a general insurance
agency headquartered in Daytona Beach and Tampa, Florida that
resulted from an April 28, 1993 business combination involving
Poe & Associates, Inc. ("Poe") and Brown & Brown, Inc. ("Brown").
Poe was incorporated in 1958 and Brown commenced business in
1939. Industry segment information is not presented because the
Company realizes substantially all of its revenues from the
general insurance agency business.
The Company is a diversified insurance brokerage and agency
that markets and sells primarily property and casualty insurance
products and services to its clients. Because the Company does
not engage in underwriting activities, it does not assume
underwriting risks. Instead, it acts in an agency capacity to
provide its customers with targeted, customized risk management
products.
The Company is compensated for its services by commissions
paid by insurance companies and fees for administration and
benefit consulting services. The commission is usually a
percentage of the premium paid by an insured. Commission rates
generally depend upon the type of insurance, the particular
insurance company, and the nature of the services provided by the
Company. In some cases, a commission is shared with other agents
or brokers who have acted jointly with the Company in a
transaction. The Company may also receive from an insurance
company a contingent commission that is generally based on the
profitability and volume of business placed with it by the
Company over a given period of time. Fees are principally
generated by the Company's Service Division, which offers
administration and benefit consulting services primarily in the
workers' compensation and employee benefit markets. The amount
of the Company's income from commissions and fees is a function
of, among other factors, continued new business production,
retention of existing customers, acquisitions, and fluctuations
in insurance premium rates and insurable exposure units.
Premium pricing within the property and casualty insurance
underwriting industry has been cyclical and has displayed a high
degree of volatility based on prevailing economic and competitive
conditions. Since the mid-1980s, the property and casualty
insurance industry has been in a "soft market" during which the
underwriting capacity of insurance companies expanded,
stimulating an increase in competition and a decrease in premium
rates and related commissions and fees. Significant reductions
in premium rates occurred during the years 1987 through 1989 and
continue, although to a lesser degree, through the present. The
effect of this softness in rates on the Company's revenues has
been somewhat offset by the Company's acquisitions and new
business production. The Company cannot predict the timing or
extent of premium pricing changes as a result of market
fluctuations or their effect on the Company's operations in the
future.
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The Company's activities are conducted in 19 locations
throughout Florida, and in eight additional locations in Arizona,
California, Connecticut, Georgia, New Jersey, North Carolina,
Pennsylvania, and Texas. Because the Company's business is
concentrated in Florida, the occurrence of adverse economic
conditions or an adverse regulatory climate in Florida could have
a materially adverse effect on its business, although the Company
has not encountered such conditions in the past.
The Company's business is divided into five divisions: (i)
the Retail Division; (ii) the Professional Programs Division;
(iii) the Commercial Programs Division; (iv) the Service
Division; and (v) the Brokerage Division. The Retail Division is
composed of Company employees in 23 offices who market and sell a
broad range of insurance products to insureds. The two Program
Divisions work with underwriters to develop proprietary insurance
programs for specific niche markets. These programs are marketed
and sold primarily through approximately 350 independent agencies
and more than 2,000 independent agents across the United States.
The Company receives an override on the commissions generated by
these independent agencies. The Service Division provides
insurance-related services such as third-party administration and
consultation for workers' compensation and employee benefit
markets. The Brokerage Division markets and sells excess and
surplus commercial insurance, as well as certain niche programs,
primarily through independent agents.
The following table sets forth a summary of (i) the
commission and fee revenues realized from each of the Company's
operating divisions for each of the three years in the period
ended December 31, 1996 (in thousands of dollars), and (ii) the
percentage of the Company's total commission and fee revenues
represented by each division for each of such periods:
1994 % 1995 % 1996 %
____ ____ ____ ____ _____ ___
Retail Division $56,018 58.4% $ 59,552 58.4% $ 66,798 58.4%
Professional Programs Division 20,907 21.8% 21,463 21.0% 20,377 17.8%
Commercial Programs Division 5,612 5.9% 6,079 6.0% 5,355 4.7%
Service Division 10,643 11.1% 10,751 10.5% 11,887 10.4%
Brokerage Division 2,672 2.8% 4,153 4.1% 9,961 8.7%
_______ _____ ________ _____ ________ _____
Total $95,852 100 % $101,998 100 % $114,378 100%
======= ===== ======== ===== ======== =====
RETAIL DIVISION
The Company's Retail Division operates through 23 locations
in eight states. These locations employ approximately 591
persons. The Company's retail insurance agency business consists
primarily of selling and marketing property and casualty
insurance coverages to commercial, professional and, to a limited
extent, individual customers. The categories of insurance
principally sold by the Company are: Casualty - insurance
relating to legal liabilities, workers' compensation, commercial
and private passenger automobile coverages, and fidelity and
surety insurance; and Property - insurance against physical
damage to property and resultant interruption of business or
extra expense caused by fire, windstorm or other perils. The
Company also sells and services all forms of group and individual
life, accident, health, hospitalization, medical and dental
insurance programs. Each category of insurance is serviced by
insurance specialists employed by the Company.
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No material part of the Company's retail business depends
upon a single customer or a few customers. During 1996, the
Company's Retail Division received approximately $440,000 of fees
and commissions from Rock-Tenn Company, the Company's largest
single Retail Division customer. Such amount represented
approximately 1% of the Retail Division's total commission and
fee revenues for 1996.
In connection with the selling and marketing of insurance
coverages, the Company provides a broad range of related services
to its customers, such as risk management surveys and analysis,
consultation in connection with placing insurance coverages, and
claims processing. The Company believes these services are
important factors in securing and retaining customers.
PROFESSIONAL AND COMMERCIAL PROGRAMS DIVISIONS
In 1996, the Company's National Programs Division was
divided into two distinct market-responsive groups as a result of
changes in market conditions. The two divisions created as a
result of this separation are the Professional Programs Division
and the Commercial Programs Division. These divisions tailor
insurance products to the needs of a particular professional or
trade group, negotiate policy forms, coverages and commission
rates with an insurance company and, in certain cases, secure the
formal or informal endorsement of the product by a professional
association or trade group. Programs are marketed and sold
primarily through a national network of approximately 350
independent agencies and more than 2,000 independent agents, who
solicit customers though advertisements in association
publications, direct mailings and personal contact. The Company
also markets a variety of these products through certain of its
retail offices. Under agency agreements with the insurance
companies that underwrite these programs, the Company usually has
authority to bind coverages, subject to established guidelines,
to bill and collect premiums and, in some cases, to process
claims.
The Company is committed to ongoing market research and
development of new proprietary programs. The Company employs a
variety of methods, including interviews with members of various
professional and trade groups to which the Company does not
presently offer insurance products, to assess the coverage needs
of such professional associations and trade groups. If the
initial market research is positive, the Company studies the
existing and potential competition and locates potential carriers
for the program. A proposal is then submitted to and negotiated
with a selected carrier and, in most instances, a professional or
trade association from which endorsement of the program is
sought. New programs are introduced through written
communications, personal visits with agents, placements of
advertising in trade publications and, where appropriate,
participation in trade shows and conventions. Several new
programs are currently being reviewed or implemented by the
Company. There can be no assurance, however, as to whether the
Company will be successful in developing or implementing any such
new programs, or what the market reception will be.
Professional Programs. The professional groups serviced by
the Professional Programs Division include dentists, lawyers,
physicians, chiropractors, and optometrists and opticians. Set
forth below is a brief description of the programs offered to
these major professional groups.
- Dentists: The largest program marketed by the
Professional Programs Division is a package insurance policy
known as the Professional Protector PlanR, which provides
comprehensive coverage for dentists, including practice
protection and professional liability. This program, initiated
in 1969, is endorsed by 31 state or local dental societies, and
is offered in 49 states, the District of Columbia, the Virgin
Islands and Puerto Rico. This program presently insures
approximately 36,300 dentists, which the Company
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believes represents approximately 28% of the eligible practicing dentists
within the Company's marketing territories.
- Lawyers: The Company began marketing lawyers'
professional liability insurance in 1973, and the national
Lawyer's Protector PlanR was introduced in 1983. The program
presently insures approximately 36,000 attorneys and is offered
in 45 states, the District of Columbia and the Virgin Islands.
- Physicians: The Company markets professional liability
insurance for physicians, surgeons, and other health care
providers through a program known as the Physicians Protector
PlanR. The program, initiated in 1980, is currently offered in
thirteen states and insures approximately 3,000 physicians.
- Optometrists and Opticians: The Optometric Protector
PlanR was created in 1973 to provide optometrists and opticians
with a package of practice and professional liability coverage.
This program insures approximately 7,100 optometrists and
opticians in all 50 states and Puerto Rico.
- Chiropractors: The Chiropractic Protector PlanSM (the
"CPP") was introduced in 1996 to provide professional liability
and comprehensive general liability coverage for chiropractors.
This program is currently being offered in Florida and Illinois
with the expectation that it will soon be offered in other
states.
The professional programs described above are underwritten
predominantly through CNA Insurance Companies ("CNA"). The
Company and CNA are parties to Program Agency Agreements with
respect to each of the programs described above except for the
CPP, with respect to which an agreement is currently being
finalized. Among other things, these agreements grant the
Company the exclusive right to solicit and receive applications
for program policies directly and from other licensed agents and
to bind and issue such policies and endorsements thereto. In
fulfilling its obligations under the agreements, the Company must
comply with the administrative and underwriting guidelines
established by CNA. The Company must use its best efforts to
promote the programs and solicit and sell program policies. The
Company is compensated through commissions on premiums, which
vary according to insurance product (e.g., workers' compensation,
commercial umbrella, package coverage, monoline professional and
general liability) and the Company's role in the transaction. The
commission to which the Company is entitled may change upon 90
days written notice from CNA. The Program Agency Agreements are
generally cancellable by either party for any reason on advance
written notice of six months or one year. An agreement may also
be terminated upon breach, by the non-breaching party, subject to
certain opportunities to cure the breach.
Commercial Programs. The Commercial Programs Division's
Towing Operators Protector PlanR was introduced in 1993 and
currently provides specialized insurance products to tow-truck
operators in 42 states. The Automobile Dealers Protector PlanR
insures non-franchised automobile dealers whose primary business
is the sale of used cars and trucks. In Florida, the program is
endorsed by the Florida Independent Auto Dealers Association.
Since 1994, this program has been expanded into all 50 states and
currently insures approximately 3,600 dealers. The Automobile
Transporters Protector PlanSM , introduced in 1996 and offered in
all 50 states, encompasses risks engaged in the transportation of
automobiles and trucks on vehicles designed for multiple
automobile transportation. The Automotive Aftermarket Protector
PlanSM , introduced in 1996 and currently offered in 47 states,
is a property and casualty program for manufacturers of
automotive parts, manufacturers of machinery and equipment that
make or alter parts, and companies in
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the business of vehicle conversion. The Company also plans to
introduce its Manufacturers Protector PlanSM and Railroad Protector
PlanSM in 1997.
The Insurance Administration Center ("IAC") became a wholly-
owned subsidiary of the Company in 1989. IAC was founded in 1962
to serve as insurance consultant to the National Association of
Wholesaler-Distributors ("NAW"), including NAW's Industry
Associations, which have a total of approximately 40,000 member
companies. IAC currently serves NAW members as a third-party
administration facility for life and health coverages, and
markets and sells various employee benefit and property and
casualty insurance products to NAW members.
IAC's third-party administration services include billing,
premium accounting, eligibility, enrollment, claims payments and
financial reporting, and IAC currently processes claims for
approximately 265 employers associated with NAW in a program for
which John Hancock Life Insurance Company is the lead
underwriter. Since April 1995, IAC's property and casualty
offerings have been principally underwritten by General Accident
Insurance Company. Premiums written in 1996 totalled $37.8
million.
In April 1996, the Company sold substantially all the assets
of Health Care Insurers, Inc. ("HCI"), a wholly-owned subsidiary
located in Colorado Springs, Colorado. HCI marketed and sold
professional health care liability insurance and property
coverages through independent agents to hospitals, laboratories,
nursing homes, medical groups and clinics.
SERVICE DIVISION
The Service Division consists of two separate components:
(i) insurance and related services as a third-party administrator
("TPA") and consultant for employee health and welfare benefit
plans, and (ii) insurance and related services providing
comprehensive risk management and third-party administration to
self-funded workers' compensation plans.
In connection with its employee benefit plan administrative
services, the Service Division provides TPA services and
consulting related to benefit plan design and costing,
arrangement for the placement of stop-loss insurance and other
employee benefit coverages, and settlement of claims. The
Service Division provides utilization management services such as
pre-admission review, concurrent/retrospective review, pre-
treatment review of certain non-hospital treatment plans, and
medical and psychiatric case management. In addition to the
administration of self-funded health care plans, the Service
Division offers administration of flexible benefit plans,
including plan design, employee communication, enrollment and
reporting. The Service Division's workers' compensation TPA
services include risk management services such as loss control,
claim administration, access to major reinsurance markets, cost
containment consulting, and services for secondary disability and
subrogation recoveries.
The Service Division provides workers' compensation TPA
services for approximately 2,500 employers representing more than
$3 billion of employee payroll. The Company's largest workers'
compensation contract represents approximately 69% of the
Company's workers' compensation TPA revenues, or 4% of the
Company's total commission and fee revenues.
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BROKERAGE DIVISION
The Brokerage Division markets excess and surplus lines and
specialty niche insurance products to the Company's Retail
Division, as well as to other retail agencies throughout Florida
and the southeastern United States. The Brokerage Division
represents various U.S. and U.K. surplus lines companies and is
also a Lloyd's of London correspondent. In addition to surplus
lines carriers, the Brokerage Division represents admitted
carriers for smaller agencies that do not have access to large
insurance carrier representation. Excess and surplus products
include commercial automobile, garage, restaurant, builder's risk
and inland marine lines. Difficult-to-insure general liability
and products liability coverages are a specialty, as is excess
workers' compensation. Retail agency business is solicited
through mailings and direct contact with retail agency
representatives. In 1996, the Company acquired a 75% ownership
interest in Florida Intracoastal Underwriters, Limited Company
("FIU") of Miami Lakes, Florida. FIU is a managing general
agency that specializes in providing insurance coverages for
coastal and inland high-value condominiums and apartments. FIU
has developed a unique reinsurance facility to support the
underwriting activities associated with these risks.
EMPLOYEES
At December 31, 1996, the Company had 1,075 full-time
equivalent employees. The Company has contracts with its sales
employees that include provisions restricting their right to
solicit the Company's customers after termination of employment
with the Company. The enforceability of such contracts varies
from state to state depending upon state statutes, judicial
decisions and factual circumstances. The majority of these
contracts are terminable by either party; however, the agreements
not to solicit the Company's customers generally continue for a
period of three years after employment termination.
None of the Company's employees is represented by a labor
union, and the Company considers its relations with its employees
to be satisfactory.
COMPETITION
The insurance agency business is highly competitive, and
numerous firms actively compete with the Company for customers
and insurance carriers. Although the Company is the largest
insurance agency headquartered in Florida, a number of firms with
substantially greater resources and market presence compete with
the Company in Florida and elsewhere. This situation is
particularly pronounced outside Florida. Competition in the
insurance business is largely based on innovation, quality of
service and price.
A number of insurance companies are engaged in the direct
sale of insurance, primarily to individuals, and do not pay
commissions to agents and brokers. To date, such direct writing
has had relatively little effect on the Company's operations,
primarily because the Company's Retail Division is commercially
oriented.
REGULATION, LICENSING AND AGENCY CONTRACTS
The Company or its designated employees must be licensed to
act as agents by state regulatory authorities in the states in
which the Company conducts business. Regulations and licensing
laws vary in individual states and are often complex.
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The applicable licensing laws and regulations in all states
are subject to amendment or reinterpretation by state regulatory
authorities, and such authorities are vested in most cases with
relatively broad discretion as to the granting, revocation,
suspension and renewal of licenses. The possibility exists that
the Company could be excluded or temporarily suspended from
carrying on some or all of its activities in, or otherwise
subjected to penalties by, a particular state.
ITEM 2. PROPERTIES
The Company's executive offices are located at 220 South
Ridgewood Avenue, Daytona Beach, Florida 32114 and 401 East
Jackson Street, Suite 1700, Tampa, Florida 33602. The Company
also maintains offices in the following cities: Phoenix, Arizona;
San Francisco, California; Glastonbury, Connecticut; Aventura,
Florida; Brooksville, Florida; Ft. Lauderdale, Florida; Ft.
Myers, Florida; Jacksonville, Florida; Kissimmee, Florida;
Leesburg, Florida; Maitland, Florida; Melbourne, Florida; Miami
Lakes, Florida; Naples, Florida; Orlando, Florida; St.
Petersburg, Florida; Sarasota, Florida; West Palm Beach, Florida;
Winter Haven, Florida; Atlanta, Georgia; Clark, New Jersey;
Charlotte, North Carolina; Philadelphia, Pennsylvania; and
Houston, Texas.
The Company occupies office premises under noncancellable
operating leases expiring at various dates. These leases
generally contain renewal options and escalation clauses based on
increases in the lessors' operating expenses and other charges.
The Company expects that most leases will be renewed or replaced
upon expiration. See Note 8 of the "Notes to Consolidated
Financial Statements" in the Company's 1996 Annual Report to
Shareholders for additional information on the Company's lease
commitments.
In 1996, the Company sold a building located in downtown
Daytona Beach, Florida, having an aggregate book value of
approximately $128,000, for a nominal gain. The Company also owns
an office condominium in Venice, Florida which has a net book
value of $188,000, with no outstanding mortgage.
ITEM 3. LEGAL PROCEEDINGS
On February 21, 1995, an Amended Complaint was filed in an
action pending in the Superior Court of Puerto Rico, Bayamon
division, and captioned Cadillac Uniform & Linen Supply Company,
et al. v. General Accident Insurance Company, Puerto Rico,
Limited, et al. The case was originally filed on November 23,
1994, and named General Accident Insurance Company, Puerto Rico
Limited, and Benj. Acosta, Inc. as defendants. The Amended
Complaint added several defendants, including the Company and Poe
& Brown of California, Inc. ("P&B/Cal."), a subsidiary of the
Company, as parties to the case. The Plaintiffs allege that
P&B/Cal. failed to procure sufficient coverage for a commercial
laundry facility that was rendered inoperable for a period of
time as the result of a fire, and further allege that the Company
is vicariously liable for the actions of P&B/Cal. The Amended
Complaint seeks damages of $11.2 million against P&B/Cal., the
Company, the P&B/Cal. employee who handled the account and LBI
Corp., a/k/a Levinson Bros., Inc. The Company and P&B/Cal.
believe that P&B/Cal. has meritorious defenses to each of the
claims asserted against it, and that the Company likewise has
meritorious defenses to allegations premised upon theories of
vicarious liability. Both the Company and P&B/Cal. are
contesting this action vigorously, and trial is currently
scheduled for December 1997. In the event that damages are
awarded against P&B/Cal. or the Company, P&B/Cal. and the Company
believe that insurance would be available to cover such loss.
<PAGE 9>
The Company is involved in various other pending or
threatened proceedings by or against the Company or one or more
of its subsidiaries that involve routine litigation relating to
insurance risks placed by the Company and other contractual
matters. Management of the Company does not believe that any of
such pending or threatened proceedings (including the proceeding
described above) will have a materially adverse effect on the
consolidated financial position or future operations of the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders
during the Company's fourth quarter ended December 31, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's common stock is traded on the National Market
System of The Nasdaq Stock Market under the symbol "POBR." The
number of shareholders of record as of March 7, 1997 was 799, and
the closing price per share on that date was $26.50.
The table below sets forth information for each quarter in
the last two fiscal years concerning (i) the high and low sales
prices for the Company's common stock, and (ii) cash dividends
declared per share.
Stock Price Range Cash
Dividends
High - Low Per Share
1996
First quarter $25.50 $24.00 $0.12
Second quarter 24.75 22.75 0.12
Third quarter 25.38 23.50 0.12
Fourth quarter 27.50 24.00 0.13
1995
First quarter $22.50 $20.25 $0.12
Second quarter 24.25 22.00 0.12
Third quarter 25.25 23.25 0.12
Fourth quarter 25.25 24.25 0.12
ITEM 6. SELECTED FINANCIAL DATA
Information under the caption "Financial Highlights" on page
6 of the Company's 1996 Annual Report to Shareholders is
incorporated herein by reference.
<PAGE 10>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Information under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on
pages 20-24 of the Company's 1996 Annual Report to Shareholders
is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of Poe & Brown, Inc.
and its subsidiaries, together with the reports thereon of Arthur
Andersen LLP and Ernst & Young LLP, appearing on pages 25-41 of
the Company's 1996 Annual Report to Shareholders, are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information contained under the captions "Management" and
"Section 16(a) Beneficial Ownership Reporting Compliance" on
pages 4-6 of the Company's Proxy Statement for its 1997 Annual
Meeting of Shareholders is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information contained under the caption "Executive
Compensation" on pages 7-10 of the Company's Proxy Statement for
its 1997 Annual Meeting of Shareholders is incorporated herein by
reference; provided, however, that the report of the Compensation
Committee on executive compensation, which begins on page 9
thereof, and the stock performance graph on page 11 thereof shall
not be deemed to be incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information contained under the caption "Security Ownership
of Management and Certain Beneficial Owners" on pages 2-3 of the
Company's Proxy Statement for its 1997 Annual Meeting of
Shareholders is incorporated herein by reference.
<PAGE 11>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information contained under the caption "Executive
Compensation -- Compensation Committee Interlocks and Insider
Participation" on page 9 of the Company's Proxy Statement for its
1997 Annual Meeting of Shareholders is incorporated herein by
reference.
<PAGE 12>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) The following documents are filed as part of this
report:
1. Consolidated Financial Statements of Poe & Brown,
Inc. (incorporated herein by reference from pages 25-
41 of the Company's 1996 Annual Report to
Shareholders) consisting of:
(a) Consolidated Statements of Income for each
of the three years in the period ended December
31, 1996.
(b) Consolidated Balance Sheets as of December
31, 1996 and 1995.
(c) Consolidated Statements of Shareholders'
Equity for each of the three years in the period
ended December 31, 1996.
(d) Consolidated Statements of Cash Flows for
each of the three years in the period ended
December 31, 1996.
(e) Notes to Consolidated Financial Statements.
(f) Reports of Independent Certified Public
Accountants.
2. Consolidated Financial Statement Schedule included
on page 11 of this report, consisting of:
(a) Schedule II - Valuation and Qualifying
Accounts.
All other schedules are omitted because they are not applicable
or not required, or because the required information is included
in the Consolidated Financial Statements or the Notes thereto.
The independent auditors' report with respect to the above-
referenced financial statement schedule appears on page 12 of
this report on Form 10-K.
3. EXHIBITS
3a Articles of Incorporation of the
Registrant, as last amended on April 28, 1993
(incorporated by reference to Exhibit 3a to Form
10-K for the year ended December 31, 1994).
3b Amended and Restated Bylaws of the
Registrant effective July 30, 1996 (filed
herewith).
4 Revolving Loan Agreement dated November 9, 1994, by and
among the Registrant and SunTrust Bank, Central Florida,
N.A., f/k/a SunBank, National Association
<PAGE 13>
(incorporated by reference to Exhibit 4 to Form 10-K for
the year ended December 31, 1994).
10a(1) Lease of the Registrant for office
space at 220 South Ridgewood Avenue, Daytona
Beach, Florida dated August 15, 1987
(incorporated by reference to Exhibit 10a(3) to
Form 10-K for the year ended December 31, 1993).
10a(2) Lease Agreement for office space at
SunTrust Financial Centre, Tampa, Florida, dated
February 1995, between Southeast Financial Center
Associates, as landlord, and the Registrant, as
tenant (incorporated by reference to Exhibit
10a(4) to Form 10-K for the year ended
December 31, 1994).
10b Registrant's 1985 Stock Option Plan
(incorporated by reference to Exhibit 10b(1) to
Form 10-K for the year ended December 31, 1984).
10c Registrant's 1989 Stock Option Plan
(incorporated by reference to Exhibit 10f to Form
10-K for the year ended December 31, 1989).
10d Loan Agreement between Continental
Casualty Company and the Registrant dated August
23, 1991 (incorporated by reference to Exhibit
10d to Form 10-K for the year ended December 31,
1991).
10e Indemnity Agreement dated January 1, 1979,
among the Registrant, Whiting National
Management, Inc., and Pennsylvania Manufacturers'
Association Insurance Company (incorporated by
reference to Exhibit 10g to Registration
Statement No. 33-58090 on Form S-4).
10f Agency Agreement dated January 1, 1979
among the Registrant, Whiting National
Management, Inc., and Pennsylvania Manufacturers'
Association Insurance Company (incorporated by
reference to Exhibit 10h to Registration
Statement No. 33-58090 on Form S-4).
10g Indemnification Agreement, dated February
22, 1993, between the Registrant and William F.
Poe, Sr. (incorporated by reference to Exhibit
10k to Registration Statement No. 33-58090 on
Form S-4).*
10h Deferred Compensation Agreement, dated May
1, 1983, as amended April 27, 1993, between Brown
& Brown, Inc. and Kenneth E. Hill (incorporated
by reference to Exhibit 10i to Form 10-K for the
year ended December 31, 1993).
10i Employment Agreement, dated April 28,
1993, between the Registrant and William F. Poe,
Sr. (incorporated by reference to Exhibit 10j to
Form 10-K for the year ended December 31, 1993).
10j Employment Agreement, dated April 28, 1993
between the Registrant and J. Hyatt Brown
(incorporated by reference to Exhibit 10k to Form
10-K for the year ended December 31, 1993).
<PAGE 14>
10k Portions of Employment Agreement, dated
April 28, 1993 between the Registrant and Kenneth
E. Hill (incorporated by reference to Exhibit 10l
to Form 10-K for the year ended December 31,
1993).
10l Portions of Employment Agreement, dated
April 28, 1993 between the Registrant and Jim W.
Henderson (incorporated by reference to Exhibit
10m to Form 10-K for the year ended December 31,
1993).
10m Registrant's Stock Performance Plan
(incorporated by reference to Exhibit 4 to
Registration Statement No. 333-14925 on Form S-8).
10n Asset Purchase Agreement, dated as of April
1, 1996, among the Registrant, Health Care
Insurers, Inc., Richard J. Greenwood, Bruce G.
Geer, and Richard J. Greenwood & Bruce G. Geer,
Inc. (filed herewith).
11 Statement Re: Computation of Per Share
Earnings.
13 Portions of Registrant's 1996 Annual Report
to Shareholders (not deemed "filed" under the
Securities Exchange Act of 1934, except for those
portions specifically incorporated by reference
herein).
22 Subsidiaries of the Registrant.
23a Consent of Ernst & Young LLP.
23b Consent of Arthur Andersen LLP.
24a Powers of Attorney pursuant to which this
Form 10-K has been signed on behalf of certain
directors and officers of the Registrant.
24b Resolutions of the Registrant's Board of
Directors, certified by the Secretary.
27 Financial Data Schedule.
______________________
* The registrant has Indemnification Agreements with certain of
its other directors and former directors (Joseph E. Brown,
Bruce G. Geer, V.C. Jordan, Jr., Byrne Litschgi, Charles W.
Poe, William F. Poe, Jr., and Bernard H. Mizel) that are
identical in all material respects to Exhibit 10g except for
the parties involved and the dates executed.
(b) REPORTS ON FORM 8-K
None.
<PAGE 15>
SCHEDULE II
POE & BROWN, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 1996, 1995 and 1994
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
___________________________
(1) (2)
__________ ____________
Balance at Charged to Charged to Balance at
beginning cost and other accounts- Deductions- end of
Description of period expenses expenses describe period
___________ _________ __________ _______________ ___________ ___________
Year ended December 31, 1996
Deducted from asset account:
Allowance for doubtful
accounts $100,000 $259,000 $ ------ $359,000(A) $ -----
________ ________ _________ ___________ _________
Year ended December 31, 1995
Deducted from asset account:
Allowance for doubtful
accounts $ 69,000 $ 72,000 $ ------- $ 41,000(A) $100,000
________ ________ __________ ___________ _________
Year ended December 31, 1994
Deducted from asset account:
Allowance for doubtful
accounts $435,000 $ 19,000 $ ------ $385,000(A) $ 69,000
________ ________ __________ ___________ _________
________________________
(A) Uncollectible accounts written off, net of recoveries.
<PAGE 16>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
of Poe & Brown, Inc.:
We have audited in accordance with generally accepted auditing
standards, the 1996 and 1995 consolidated financial statements
included in Poe & Brown, Inc.'s Annual Report to Shareholders
incorporated by reference in this Form 10-K, and have issued our
report thereon dated January 24, 1997. Our audit was made for
the purpose of forming an opinion on those statements taken as a
whole. The schedule listed in Item 14(a)2(a) Schedule II -
Valuation and Qualifying Accounts is the responsibility of the
Company's management and is presented for purposes of complying
with the Securities and Exchange Commission's rules and is not
part of the basic consolidated financial statements. The 1996
and 1995 amounts in this schedule have been subjected to the
auditing procedures applied in the audit of the 1996 and 1995
basic consolidated financial statements and, in our opinion,
fairly state in all material respects the financial data required
to be set forth therein in relation to the 1996 and 1995 basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Orlando, Florida
January 24, 1997
<PAGE 17>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
POE & BROWN, INC.
Registrant
By: *
___________________________________
J. Hyatt Brown
Chief Executive Officer
Date: March 21, 1997
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the date
indicated.
Signature Title Date
___________ ______ ____
* Chairman of the Board, President March 21, 1997
_______________________ and Chief Executive Officer
J. Hyatt Brown (Principal Executive Officer)
*
_______________________ Director March 21, 1997
Samuel P. Bell, III
*
_______________________ Director March 21, 1997
Bradley Currey, Jr.
*
_______________________ Director March 21, 1997
Bruce G. Geer
*
______________________ Director March 21, 1997
Jim W. Henderson
*
_______________________ Director March 21, 1997
Kenneth E. Hill
*
______________________ Director March 21, 1997
Theodore J. Hoepner
*
______________________ Vice President, Treasurer and March 21, 1997
James A. Orchard Chief Financial Officer
(Principal Financial and Accounting Officer)
*By: /s/ LAUREL L. GRAMMIG
_______________________________
Laurel L. Grammig
Attorney-in-Fact