UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 1999
BROWN & BROWN, INC.
__________________________________________________________________
(Exact name of registrant as specified in its charter)
Florida 0-7201 59-0864469
_______ ______ __________
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
220 S. Ridgewood Ave., Daytona Beach, Florida 32114
____________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 252-9601
______________
N/A
____________________________________________________________________
(Former name or former address, if changed since last report)
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Item 5. Other Events
Effective July 29, 1999, the Board of Directors of Brown & Brown,
Inc. (the "Company") adopted a Shareholder Rights Plan (the "Rights
Plan"). The purpose of the Rights Plan is to deter certain coercive
takeover tactics and enable the Board of Directors to represent
effectively the interests of the Company, its shareholders, and its other
constituencies. The Rights Plan will not deter negotiated mergers or
business combinations that the Board of Directors determines to be in
the best interests of the Company, its shareholders, and its other
constituencies.
To implement the Rights Plan, the Board of Directors declared a
dividend distribution of one right ("Right") for each outstanding share
of common stock, par value $.10 per share (the "Common Stock"), of
the Company to shareholders of record at the close of business on
August 11, 1999. When exercisable, each Right will entitle the
registered holder to purchase from the Company one share of Common
Stock at a price of $100.00 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement between the Company and First Union National
Bank, as Rights Agent, dated as of July 30, 1999 (the "Rights
Agreement").
Initially, the Rights will be evidenced by the Common Stock
certificates representing shares then outstanding, and no separate
certificates for the Rights ("Rights Certificates") will be distributed.
The Rights will be exercisable and transferable apart from the shares of
Common Stock and a Distribution Date will occur upon the earliest of
(i) 10 days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 20% or more of
the outstanding shares of Common Stock (the "Stock Acquisition
Date"), (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in the beneficial ownership by
a person or group of 20% or more of such outstanding shares of
Common Stock, or (iii) immediately after the Board of Directors
declares any individual or entity, owning at least 10% of the
outstanding Common Stock, an Adverse Person (as defined in the
Rights Agreement) (the earlier of such dates is called the "Distribution
Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates
issued after August 11, 1999 will contain a notation incorporating the
Rights Agreement by reference, and (iii) the surrender for transfer of
any certificates for Common Stock outstanding will also constitute the
transfer of the Rights associated with the Common Stock represented
by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 30, 2009, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of
Common Stock issued before the Distribution Date will be issued with
Rights.
If any person (other than an Exempt Person, as defined in the Rights
Agreement) becomes the beneficial owner of 20% or more of the then
outstanding shares of Common Stock
<PAGE 3>
(except pursuant to an offer for
all outstanding shares of Common Stock determined by the Board of
Directors to be fair to and otherwise in the best interests of the
Company and its shareholders) or the Board of Directors declares any
individual or entity (alone or together with its affiliates and associates
as defined in Rule 12b-2 of the Securities and Exchange Act of 1934, as
amended) owning at least 10% of the outstanding Common Stock to be
an Adverse Person (as defined in the Rights Agreement), each holder of
a Right will thereafter have the right to receive, upon exercise thereof,
the number of shares of Common Stock (or, in certain circumstances,
cash, property, or other securities of the Company or a reduction in the
purchase price) having a value equal to two times the exercise price of
the Right. Notwithstanding any of the foregoing, following the
occurrence of the event described above, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be void. The Rights
are not, however, exercisable following the occurrence of the event set
forth above until such time as the Rights are no longer redeemable by
the Company, as described below. Further, Rights generally are
exercisable only after the effectiveness of a registration statement
covering the underlying Common Stock under the Securities Act of
1933, as amended. J. Hyatt Brown, Chairman of the Board, President,
and Chief Executive Officer of the Company and currently the
beneficial owner of approximately 20% of the Company's Common
Stock, is classified as an Exempt Person in the Rights Agreement.
For example, at an exercise price of $100, each Right not owned by
an Acquiring Person or an Adverse Person (or by certain related
parties) following an event set forth in the preceding paragraph would
entitle its holder to purchase $200 worth of Common Stock (or other
consideration, as noted above) for $100. Assuming that the Common
Stock had a per share market value of $50 at such time, the holder of
each valid Right would be entitled to purchase four shares of Common
Stock for $100.
If at any time following the Stock Acquisition Date or the date on
which an individual or entity is declared an Adverse Person pursuant to
the Rights Agreement, (i) the Company is acquired in a merger or other
business combination transaction in which the Company is not the
surviving corporation (other than pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock determined by the
Board of Directors to be fair to and otherwise in the best interests of the
Company and its shareholders), or (ii) more than 50% of the
Company's assets or earning power is sold or transferred (each of such
events is referred to as a "Section 13 Event"), each holder of a Right
(except Rights that previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the
exercise price of the Right. If the Rights cannot be exercised for
common stock of the acquiring company as set forth above, Rights
holders will be entitled to put the Rights to the acquiring company for
cash equal to the exercise price of the Rights (i.e., at a 50% discount).
The events described in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination, or
reclassification of, the Common Stock, (ii) if holders of the Common
Stock are granted certain rights or warrants to subscribe for Common
Stock or convertible securities at less than the current market price of
the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
<PAGE 4>
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least one percent of
the Purchase Price. No fractional share of Common Stock will be
issued and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Common Stock on the last trading date before
the date of exercise.
At any time until ten days following the Stock Acquisition Date (or
such later date as the Board of Directors of the Company may
determine), the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, payable in cash, or shares of Common
Stock or other consideration deemed appropriate by the Board of
Directors. Thereafter, the Company's right of redemption may be
reinstated if the period has expired during which holders of such Rights
may exercise their rights for common stock following the Stock
Acquisition Date, no Triggering Event has occurred, and an Acquiring
Person reduces his beneficial ownership to 5% or less of the
outstanding shares of common stock in a transaction or series of
transactions not involving the Company and there are no other
Acquiring Persons. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the $.01
redemption price.
At any time after any Person becomes an Acquiring Person and
before the acquisition by such Person of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such
person or group that will have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to
adjustment).
The Rights Agreement includes a "TIDE" (Three-year Independent
Director Evaluation) provision. Under the TIDE provision, the Board
of Directors' Shareholder Rights Plan Committee composed of
independent directors will review the Rights Plan periodically (at least
every three years). This committee will communicate its conclusions to
the full Board of Directors after each review, including any
recommendation of whether the Rights Agreement should be modified
or the Rights should be redeemed.
Until a Right is exercised, the holder of the Right, as such, will have
no rights as a shareholder of the Company, including the right to vote
or to receive dividends. While the distribution of the Rights will not be
taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income if the
Rights become exercisable for Common Stock (or other consideration)
of the Company or for common stock of an acquiring company as set
forth above.
Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company before the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board of Directors in order to cure any
ambiguity, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or
to shorten or lengthen any time period under the Rights Agreement;
however, no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
The form of the Rights Agreement is included as Exhibit 4.1 hereto.
A copy of the Rights Agreement is available free of charge from the
Company to any shareholder of the Company. The above description
of the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is incorporated
herein by reference.
<PAGE 5>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit
No. Description
_______ ___________
4.1 Rights Agreement, dated as of July 30, 1999, between the
Company and First Union National Bank, as Rights Agent,
which includes the form of the Rights Certificate as Exhibit
A, and the Summary of Rights to Purchase Common Stock
as Exhibit B.
99.1 Press Release, dated July 29, 1999, announcing the adoption
of the Shareholder Rights Plan.
<PAGE 6>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: August 2, 1999 BROWN & BROWN, INC.
(Registrant)
By: /S/ JAMES L. OLIVIER
_______________________
James L. Olivier
Vice President
<PAGE 7>
EXHIBIT INDEX
BROWN & BROWN, INC.
Current Report on Form 8-K
Dated August 2, 1999
Exhibit
No. Description
________ ___________
4.1 Rights Agreement, dated as of July 30, 1999, between the Company
and First Union National Bank, as Rights Agent, which includes
the form of the Rights Certificate as Exhibit A, and the Summary
of Rights to Purchase Common Stock as Exhibit B.
99.1 Press Release, dated July 29, 1999, announcing the adoption
of the Shareholder Rights Plan.