FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998.
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 S. Ridgewood Ave., Daytona Beach, FL 32115
________________________________________ ____________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (904) 252-9601
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
____
The number of shares of the Registrant's common stock, $.10 par value,
outstanding as of November 1, 1998 was 13,500,857.
POE & BROWN, INC.
Index to Form 10-Q
For The Quarter Ended September 30, 1998
________________________________________
Page
____
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Income for the
three and nine months ended September 30, 1998 and 1997 3
Condensed Consolidated Balance Sheets as of September 30,
1998 and December 31, 1997 4
Condensed Consolidated Statements of Cash Flows for
the nine months ended September 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 14
ITEM 1: FINANCIAL STATEMENTS
POE & BROWN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
For the three months For the nine months
ended September 30, ended September 30,
____________________ ___________________
1998 1997 1998 1997
____ ____ ____ ____
REVENUES
Commissions and fees $37,868 $30,920 $111,928 $94,440
Investment income 896 933 2,484 3,087
Other income 54 213 9 747
_______ _______ ________ _______
Total revenues 38,818 32,066 114,421 98,274
_______ _______ ________ _______
EXPENSES
Employee compensation and
benefits 20,183 16,175 58,938 49,505
Other operating expenses 7,074 6,406 22,845 20,605
Interest and amortization 1,788 1,254 4,751 4,718
_______ _______ _______ _______
Total expenses 29,045 23,835 86,534 74,828
_______ _______ _______ _______
Income before income taxes 9,773 8,231 27,887 23,446
Income taxes 3,764 3,128 10,919 9,138
_______ _______ _______ _______
NET INCOME $ 6,009 $ 5,103 $ 16,968 $14,308
======= ======= ======== =======
Other comprehensive income, net
of tax:
Unrealized (loss) gain on
securities:
Unrealized holding (loss)
gain, net of tax benefit of
$598 and tax effect of $(528)
for the three-month periods
ended September 30, 1998 and
1997, respectively, and net
of tax benefit of $2,030 and
tax effect of $(27) for the
nine-month periods ended
September 30, 1998 and 1997,
respectively (916) 945 (3,248) 43
_______ _______ ________ ______
Comprehensive Income $ 5,093 $ 6,048 $ 13,720 $14,351
======= ======= ======== =======
Basic and diluted earnings
per share $ .45 $ .39 $ 1.27 $ 1.10
======= ======= ======== =======
Dividend declared per share $ .11 $ .0933 $ .31 $ .2667
======= ======= ======== =======
Diluted shares outstanding 13,476 13,169 13,408 13,056
See notes to condensed consolidated financial statements.
POE & BROWN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, December 31,
1998 1997
ASSETS
Cash and cash equivalents $ 32,339 $ 47,726
Short-term investments 933 1,299
Premiums, commissions and fees
receivable 63,295 62,148
Other current assets 10,023 6,507
________ ________
Total current assets 106,590 117,680
Fixed assets, net 13,335 11,863
Intangible assets, net 76,476 49,593
Investments 7,220 11,480
Other assets 5,166 3,513
________ ________
Total assets $208,787 $194,129
======== ========
LIABILITIES
Premiums payable to insurance
companies $ 88,285 $ 74,598
Premium deposits and credits due
customers 6,935 7,035
Accounts payable and accrued expenses 18,972 15,826
Current portion of long-term debt 3,825 5,339
________ ________
Total current liabilities 118,017 102,798
Long-term debt 4,804 4,093
Deferred income taxes 1,922 3,951
Other liabilities 7,243 6,145
________ ________
Total liabilities 131,986 116,987
________ ________
SHAREHOLDERS' EQUITY
Common stock, par value $.10
per share: authorized 70,000
shares; issued 13,501 shares
at 1998 and 13,107 shares at 1997 1,350 1,311
Retained earnings 71,955 69,087
Accumulated other comprehensive income 3,496 6,744
________ ________
Total shareholders' equity 76,801 77,142
________ ________
Total liabilities and
shareholders' equity $208,787 $194,129
======== ========
See notes to condensed consolidated financial statements
POE & BROWN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
For the nine months ended September 30,
_______________________________________
1998 1997
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 16,968 $ 14,308
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 6,960 6,299
Net gains on sales of investments,
fixed assets and customer accounts (6) (990)
Premiums, commissions and fees
receivable, decrease 3,567 10,231
Other assets (decrease) (1,000) (718)
Premiums payable to insurance
companies, increase (decrease) 5,566 (6,231)
Premium deposits and credits due
customers (decrease) (100) (2,065)
Accounts payable and accrued
expenses, increase 468 2,669
Other liabilities, increase (decrease) 604 (186)
_______ _______
NET CASH PROVIDED BY OPERATING ACTIVITIES 33,027 23,317
_______ _______
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to fixed assets (3,034) (2,079)
Payments for businesses acquired,
net of cash acquired (26,088) (1,837)
Proceeds from sales of fixed assets
and customer accounts 213 435
Purchases of investments (1,097) (252)
Proceeds from sales of investments 754 557
________ _______
NET CASH USED IN INVESTING ACTIVITIES (29,252) (3,176)
________ _______
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (7,596) (2,458)
Exercise of stock options and issuances
of stock 1,278 1,044
Purchases of stock for stock option
plan, employee stock purchase plan
and performance stock plan (8,835) (1,664)
Cash dividends paid (4,009) (3,398)
________ _______
NET CASH USED IN FINANCING ACTIVITIES (19,162) (6,476)
________ _______
Net (decrease) increase in cash and
cash equivalents (15,387) 13,665
Cash and cash equivalents at beginning
of period 47,726 31,786
________ _______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 32,339 $ 45,451
======== ========
See notes to condensed consolidated financial statements.
POE & BROWN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 1998
Note 1 - Basis of Financial Reporting
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. For further
information, refer to the consolidated financial statements and
the notes thereto included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
Results of operations for the three- and nine-month periods
ended September 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998.
Note 2 - Basic and Diluted Earnings Per Share
All share and per-share information in the financial statements
has been adjusted to give effect to the 3-for-2 common stock split
which became effective on February 27, 1998.
Basic earnings per share is based upon the weighted average
number of shares outstanding. Diluted earnings per share is adjusted
for the dilutive effect of stock options. Earnings per share is the
same on both a basic and a diluted basis.
As of December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" (SFAS 128). All
prior-period EPS information is required to be restated. The Company's
basic and fully diluted earnings per share (EPS) for the period ended
September 30, 1997 computed under SFAS 128 is not different than
previously computed.
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
1998 1997 1998 1997
BASIC EARNINGS PER SHARE
Net Income $ 6,009 $ 5,103 $16,968 $14,308
======= ======= ======= =======
Weighted average shares
outstanding 13,476 13,167 13,408 13,053
======= ======= ======= =======
Basic earnings per share $ .45 $ .39 $ 1.27 $ 1.10
======= ======= ======= =======
DILUTED EARNINGS PER SHARE
Weighted average number of
shares outstanding 13,476 13,167 13,408 13,053
Net effect of dilutive
stock options, based on
the treasury stock method - 2 - 3
_______ _______ _______ _______
Total diluted shares used
in computation 13,476 13,169 13,408 13,056
======= ======= ======= =======
Diluted earnings per share $ .45 $ .39 $ 1.27 $ 1.10
======= ======= ======= =======
The Company has adopted SFAS No. 130, "Reporting Comprehensive
Income", in the first quarter of 1998, and has reported comprehensive
income on the accompanying consolidated statements of income.
Note 3 - Acquisitions
During the third quarter of 1998, the Company acquired
substantially all of the assets of MacMillan-Buchanan Insurance
Agency, of Melbourne, Florida; Lake Sumter Insurance, of Wildwood,
Florida; Franchini Consolidated Agency, of Albuquerque, New Mexico;
Gulfcoast Commercial Insurance, of Naples, Florida and KRB
& Associates, of Houston, Texas. There were no acquisitions
of agency assets during the third quarter of 1997.
During the second quarter of 1998, the Company acquired
substantially all of the assets of the John F. Phillips Insurance
Agency, of Prescott, Arizona; Harris Insurance Services, of Las Vegas,
Nevada; the Fordham Agency, of St. Petersburg, Florida; Adlerman,
Click & Co., of Princeton, New Jersey; Zel Schwanz & Associates, of
Phoenix, Arizona; and the Fort Lauderdale office of Hilb, Rogal and
Hamilton Company. There were no acquisitions of agency assets during
the second quarter of 1997.
During the first quarter of 1998, the Company acquired
substantially all of the assets of Arizona General Insurance,
of Tucson, Arizona; Boynton Brothers & Company, of Perth Amboy,
New Jersey; Great Northern Insurance, of Phoenix, Arizona; and
the Heine-Miles Insurance Agency, of Phoenix, Arizona. During the first
quarter of 1997, the Company acquired substantially all of the assets
of Dade Underwriters Insurance Agency, of Aventura, Florida and
Willits Insurance Agency, of Ft. Lauderdale, Florida.
These acquisitions have been accounted for using the purchase
method of accounting. The results of operations for the acquired
companies have been combined with those of the Company since their
respective acquisition dates. If the acquisitions had occurred at
the beginning of the periods presented, the Company's results of
operations would be as shown in the following table. These unaudited
pro forma results are not necessarily indicative of the actual results
of operations that would have occurred had the acquisitions actually
been made at the beginning of the respective periods
NINE-MONTH PERIOD ENDED SEPTEMBER 30 (Unaudited),
(In thousands, except per share data)
1998 1997
____ ____
Operating revenue $119,782 $112,367
Income before income taxes 28,250 25,117
Net income 17,232 15,321
Earnings per share $ 1.29 $ 1.16
During the third quarter of 1998, the Company issued 92,188
shares of its common stock in exchange for all of the outstanding
stock of Jerry F. Nichols & Associates, located in Naples, Florida.
During the quarter, the Company also issued 65,131 shares of its
common stock for all of the outstanding stock of Boulton Agency, Inc.,
located in Miami, Florida. During the third quarter of 1997 the Company
issued 25,471 shares of its common stock for all of the outstanding stock
of Shanahan, McGrath & Bradley, Inc., an Arizona corporation.
During the second quarter of 1998, the Company issued 278,765
shares of its common stock in exchange for all of the outstanding
stock of Daniel-James Insurance Agency, Inc., an Ohio corporation with
offices in Perrysburg, Ohio and Indianapolis, Indiana, and for all of
the outstanding membership interests of Becky-Lou Realty Limited,
an Ohio limited liability company with offices in Perrysburg, Ohio.
During the first quarter of 1998, the Company issued 22,500 shares
of its common stock in exchange for all of the outstanding stock of
Thim Insurance Agency, Inc., an Arizona corporation.
These acquisitions have been accounted for as poolings-of-interests;
however, due to the immaterial nature of the transactions, the Company's
consolidated financial statements have not been restated for all periods
prior to the transactions. The operating results of each company for
periods prior to their respective acquisitions are not material to
the Company's consolidated operating results.
Note 4 - Long-Term Debt
The Company continues to maintain its credit agreement with a
major insurance company under which $4 million (the maximum amount
available for borrowing) was outstanding at September 30, 1998, at
an interest rate equal to the prime lending rate plus one percent
(9.0% at September 30, 1998). In accordance with the amendment
to the loan agreement dated August 1, 1998, the available amount
will decrease by $1 million each October beginning in 2000.
In November, 1994, the Company entered into a revolving credit
facility with a national banking institution that provides for
borrowings of up to $10 million. As of September 30, 1998, there were no
outstanding borrowings against the line of credit.
Note 5 - Contingencies
The Company is not a party to any legal proceedings other than
various claims and lawsuits arising in the normal course of business.
Management of the Company does not believe that any such claims or
lawsuits will have a material effect on the Company's financial
condition or results of operations.
Note 6 - Supplemental Disclosures of Cash Flow Information
The Company's significant non-cash investing and financing
activities are as follows:
For the nine-month period ended Sept. 30,
_________________________________________
(in thousands) 1998 1997
____ ____
Unrealized (depreciation)
appreciation of available-
for-sale securities net of
tax benefit of $2,030
for 1998 and tax effect of
$(27) in 1997 $(3,248) $ 43
Long-term debt issued for
purchased customer accounts 3,463 -
Notes received on the sale of
fixed assets and customer
accounts 1,011 228
Common stock issued in
acquisitions 12,128 144
Cash paid during the year for:
Interest 745 464
Income taxes 9,992 8,314
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Net Income. Net income for the third quarter of 1998 was
$6,009,000, or $.45 per share, compared with net income in the third
quarter of 1997 of $5,103,000, or $.39 per share, an 18% increase.
Net income for the nine months ended September 30, 1998 was $16,968,000,
or $1.27 per share, compared with 1997 same period net
income of $14,308,000, or $1.10 per share, a 19% increase.
Commissions and Fees. Commissions and fees for the third quarter
of 1998 increased $6,948,000, or 22%, from the same period in 1997.
This increase is primarily attributable to revenues from acquired agencies.
Commissions and fees for the nine months ended September 30, 1998 were
$111,928,000 compared to $94,440,000 for the same period in 1997, a 19%
increase. The 1998 increase is due to approximately $15,372,000 of revenues
from acquired agencies, with the remainder due to new business production.
Investment Income. Investment income for the quarter and
nine-month periods ended September 30, 1998 decreased $37,000
and $603,000, respectively, from the same periods in 1997, primarily
due to a decrease in available cash to invest and a decrease in
recorded gains in the sale of certain investments.
Other Income. Other income for the third quarter ended
September 30, 1998 decreased $159,000 over the same period in
1997, primarily due to reductions in gains from the sale of
customer accounts and other assets. Other income for the nine-month
period ended September 30, 1998 decreased $738,000 over the same
period in 1997, due primarily to the disposition of the assets of
the Company's Charlotte, North Carolina office, in the first quarter of
1998, which resulted in a loss of $518,000.
Employee Compensation and Benefits Employee compensation and
benefits increased 25% and 19%, respectively, during the three-month
and nine-month periods ended September 30, 1998 over the same periods in
1997. These increases primarily relate to the addition of new employees
as a result of acquisitions. Employee compensation and benefits as a
percentage of total revenue increased to 52% in both the three- and
nine-month periods ended September 30, 1998, compared to 50% in each
of the same periods in 1997.
Other Operating Expenses. Other operating expenses for the
third quarter of 1998 increased $668,000, or 10%, over the same period
in 1997, primarily due to acquisitions, but decreased as a percentage
of total revenues from 20% to 18%. Other operating expenses increased
$2,240,000 for the nine months ended September 30, 1998 versus the
prior year, but decreased as a percentage of total revenues from 21%
to 20%.
Interest and Amortization. Interest and amortization increased
$534,000, or 43%, and $33,000, or 1%, for the three-and nine-month
periods ended September 30, 1998, respectively, over the same periods
in 1997. The increase for the three-month period is primarily due to
increased amortization from acquisitions. The change for the
nine-month period is due to increased amortization from acquisitions,
offset by the effect of a one-time write-off of the remaining
intangible assets related to a terminated agreement in the second
quarter of 1997.
Liquidity and Capital Resources
________________________________
The Company's cash and cash equivalents of $32,339,000 at
September 30, 1998 decreased by $15,387,000 from $47,726,000 at
December 31, 1997. During the nine months ended September 30,
1998, $33,027,000 of cash was provided from operating activities.
From both this amount and existing cash balances, $26,088,000 was used to
acquire businesses, $8,835,000 was used for purchases of the Company's
stock, $7,596,000 was used to repay long-term debt, $4,009,000 was
used for payment of dividends, and $3,034,000 was used for additions
to fixed assets. The current ratio at September 30, 1998 was 0.90
compared to 1.14 as of December 31, 1997.
The Company has a revolving credit agreement with a major
insurance company under which up to $4 million presently may be
borrowed at an interest rate equal to the prime lending rate plus
one percent. The amount of available credit will decrease by
$1 million each year beginning in October 2000 in accordance
with the August 1, 1998 amendment to the original loan agreement.
As of September 30, 1998, the maximum amount of borrowings
was outstanding. In November 1994, the Company entered into a
revolving credit facility with a national banking institution that
provides for available borrowings of up to $10 million. As of
September 30, 1998, there were no borrowings against this line of
credit. The Company believes that its existing cash, cash equivalents,
short-term investments portfolio, funds generated from operations, and
available credit facility borrowings are sufficient to satisfy its
normal financial needs.
Year 2000 Date Conversion
__________________________
Year 2000 issues relate to system failures or errors resulting
from computer programs and embedded computer chips which utilize
dates with only two digits instead of four digits to represent a
year. A data field with two digits representing a year may result
in an error or failure due to the inability of a system to
recognize "00" as the Year 2000. The Company is reviewing its
computer systems for Year 2000 readiness and is implementing a
plan to resolve existing issues.
The Company has evaluated and identified the risks of failure
of its information and financial systems which may be adversely
affected by Year 2000 issues. This internal assessment is approximately
60% complete at present and the Company expects to finish the assessment
process by the end of January 1999. To date, limited testing of
systems has been performed. The Company may conduct further testing
and/or an external evaluation following the conclusion of its internal
assessment. To date, approximately $120,000 has been expended in
systems upgrades directly relating to Year 2000 issues. Present
estimates for further expenditures to address Year 2000 issues are
between $300,000 and $750,000.
Based on its assessments to date, the Company believes it will
not experience any material disruption as a result of Year 2000 issues
in processing information, interfacing with key vendors, or with
processing orders and billing. However, the Year 2000 issue creates
risk for the Company from unforeseen problems in its own computer
systems and from third parties on which the Company relies.
Accordingly, the Company is requesting assurances from software
vendors from which it has purchased or from which it may purchase
software that the software sold to the Company will continue to
correctly process date information through the Year 2000 and beyond.
In addition, the Company is querying its independent brokers and
insurance carriers as to their progress in identifying and
addressing problems that their computer systems may experience
in correctly processing date information as the year 2000
approaches and thereafter. However, there are no assurances that
the Company will identify all date-handling problems in its business
systems or that the Company will be able to successfully remedy Year
2000 compliance issues that are discovered.
To the extent that the Company is unable to resolve its
Year 2000 issues prior to January 1, 2000, operating results could
be adversely affected. In addition, the Company could be adversely
affected if other entities (e.g., insurance carriers and independent
agents through which the Company brokers business) not affiliated with the
Company do not appropriately address their own Year 2000 compliance
issues in advance of their occurrence. There is also risk that
insureds may attempt to recover damages from the Company if their
insurance policies procured with the assistance of the Company
are believed by such insureds to cover Year 2000-related claims,
but do not do so. The impact of these potential legal disputes
cannot be reasonably estimated. At present, the
Company has not developed contingency plans but intends to determine
whether to develop any such plan early in 1999. There can be no
assurance that Year 2000 issues will not have a material adverse
effect on the Company's business, results of operation and financial
condition.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not Applicable.
POE & BROWN, INC.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company is involved in various pending or threatened
proceedings by or against the Company or one or more of its
subsidiaries which involve routine litigation relating to insurance
risks placed by the Company and other contractual matters. The
Company's management does not believe that any of such pending or
threatened proceedings will have a material adverse effect on the
Company's financial position or results of operations.
ITEM 2 - CHANGE IN SECURITIES AND USE OF PROCEEDS
Effective July 1, 1998 and August 4, 1998, the Company acquired
all of the outstanding shares of Jerry F. Nichols & Associates, Inc.
(Nichols) and Boulton Agency, Inc. (Boulton), respectively. In exchange
for all of the outstanding stock of Nichols and Boulton, the Company
issued 92,188 and 65,131 shares, respectively, of the Company's common
stock to the former shareholders of those agencies. The Company's
shares were offered and sold privately in both transactions and no
underwriting was involved in either transaction.
The Company issued the shares without registration under the
Securities Act of 1993 (the "Act"). The Company relied upon the
exemptions set forth in Section 4(2) of the Act and Rule 505 (in
the case of the Boulton transaction) and Rule 506 (in the case of
the Nichols transaction) of Regulation D, promulgated thereunder. In
each transaction, the Company (i) made available to the purchasers the
information required by Rule 502(b) of Regulation D, (ii) did not offer
the shares by means of any advertisement, general solicitation or other
means proscribed by Rule 502(c) of Regulation D, (iii) informed the
purchasers of the limitations on resale of the shares and placed an
appropriate restrictive legend on the share certificates, and (iv) filed
a notice on Form D with the Securities and Exchange Commission within
15 days after the sale.
In the Nichols transaction, the Company shares were offered
privately by the issuer to fewer than 35 purchasers and the issuer
reasonably believed that each purchaser (or representative of such
purchaser) had such knowledge and experience in financial and business
matters that he was capable of evaluating the merits and risks
of the prospective investment. In the Boulton transaction, (i) the
aggregate offering price of the Company shares offered to the
purchasers, together with all other Company shares offered during
the prior twelve months in reliance on an exemption under Rule 505,
did not exceed $5 million, and (ii) the shares were offered privately to
fewer than 35 purchasers.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 3a - Amended and Restated Articles of
Incorporation (filed herewith)
Exhibit 3b - Amended and Restated Bylaws (incorporated
by reference to Exhibit 3b to Form 10-K
for the year ended December 31, 1996)
Exhibit 10c(2) - Extension to Loan Agreement, dated
August 1, 1998, between the
Registrant and Continental Casualty
Company (filed herewith)
Exhibit 10k - Employment Agreement, dated May 6, 1998,
between the Registrant and Kenneth E. Hill
(filed herewith)
Exhibit 10l - Deferred Compensation Agreement,
dated May 6, 1998, between Brown &
Brown, Inc. and Kenneth E. Hill
(filed herewith)
Exhibit 10m - Letter Agreement, dated May 4, 1998,
between the Registrant and Kenneth E.
Hill (filed herewith)
Exhibit 11 - Statement re: Computation of Basic
and Diluted Earnings Per Share
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) There were no reports filed on Form 8-K during the quarter
ended September 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
POE & BROWN, INC.
Date: November 13, 1998 /s/ WILLIAM A. ZIMMER
___________________________________
William A. Zimmer
Chief Financial Officer and Treasurer
(duly authorized officer, principal
financial officer and principal
accounting officer)
EXHIBIT 3a
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
POE & BROWN, INC.
Poe & Brown, Inc. (the "Corporation") hereby files the following
Amended and Restated Articles of Incorporation under the Florida
Business Corporation Act:
ARTICLE I
The name of the Corporation shall be Poe & Brown, Inc.
ARTICLE II
Section 1. The general nature of the business or businesses to
be transacted by the Corporation is the acting as an agent or broker
in the sale of all forms of insurance.
In addition, the Corporation may engage in any activity or
business permitted under the laws of the United States and of the
State of Florida.
Section 2. The Corporation shall also have power:
(a) To construct, erect, repair and remodel buildings and
structures of all types for itself and others and to manufacture,
purchase, or otherwise acquire, and to own, mortgage, pledge, sell,
assign, transfer or otherwise dispose of, and to invest in, trade in,
deal in and with, goods, wares, merchandise, personal property and
services of every class, kind and description; except that it is not
to conduct a banking, safe deposit, trust, insurance surety, express,
railroad, canal, telephone, telegraph or cemetary company, a building
and loan association, mutual fire insurance association, cooperative
association, fraternal benefit society, state fair or exposition.
(b) To act as broker, agent or factor for any person,
firm or corporation.
(c) To purchase, lease or otherwise acquire real and personal
property and leaseholds thereof and interest therein, and to own, hold,
manage, develop, improve, equip, maintain and operate, and to sell,
convey, exchange, lease or otherwise alienate and dispose of, and to
mortgage, pledge or otherwise encumber any and all such property and
any and all legal and equitable rights thereunder and interests therein.
(d) To borrow or raise money for any of the purposes of the
Corporation, and from time to time without limit as to amount, to draw,
make, accept, endorse, execute and issue promissory notes, drafts, bills
of exchange, warrants, bonds, debentures and other negotiable and
non-negotiable instruments and evidences of indebtedness, and to
secure payment thereof and any interest therein by mortgage, pledge,
conveyance, or other assignment in trust, in whole or in part, of the
assets of the Corporation, real, personal or mixed, including contract
rights, whether at the time owned or thereafter acquired.
(e) To guarantee, endorse, purchase, hold, sell, transfer,
mortgage, pledge or otherwise acquire or dispose of the shares of
the capital stock of, or any bonds, security, or other evidences of
indebtedness created by any other corporation of the State of Florida
or any other state or government, and while owner of such stock to
exercise all the rights, powers, and privileges of ownership, including
the right to vote such stock.
(f) To enter into, make, perform and carry out contracts and
arrangements of every sort and kind which may be necessary or convenient
for the business of the Corporation or business of a similar nature,
with any person, firm, corporation, association or syndicate, or any
private, public or municipal body existing under the government of the
United States or any state, territory, colony or dependency thereof or
foreign government so far as or to the extent that the same may be done
or performed pursuant to law.
(g) To enter into, or become a partner in, any agreement for
sharing profits, union of interests, cooperation, joint venture or
otherwise, with any person, firm or corporation now carrying on or
about to carry on any business which this Corporation has the direct
or incidental authority to pursue.
(h) To include in its Bylaws any regulatory or restrictive
provisions relating to the proposed sale, transfer of other disposition
of any of its outstanding stock by any of its stockholders or in the
event of the death of any of its stockholders. The manner and form,
as well as all relevant terms, conditions and details hereof shall be
determined by the stockholders of this Corporation provided, however,
that no such regulatory or restrictive provision shall affect the
rights of third parties without actual knowldge thereof, unless such
provision shall be noted upon the certificate evidencing the ownership
of said stock.
(i) In general, to do any and all of the acts and things herein
set forth to the same extent as natural persons could do and in any part
of the world, as principal, factor, agent, contractor, broker or
otherwise, either alone or in company with any entity or individual;
to establish one or more offices, both within the State of Florida and
any part or parts of the world, at which meetings of directors may be
held and all or any part of the Corporation's business may be conducted;
and to exercise all or any of its corporate powers and rights in the
State of Florida and in any and all other states, territories,
districts, dependencies, colonies or possessions in the United
States of America and in any foreign countries.
To do everything necessary, proper, advisable or convenient for
the accomplishment of any of the purposes or the attainment of any of
the objects or the furtherance of any of the powers herein set forth,
and to do every other act and thing incidental thereto or connected
therewith, to the extent permitted by law.
ARTICLE III
The number of shares of capital stock authorized to be issued
by this Corporation is 70,000,000 shares of Common Stock, par value
$.10 per share.
ARTICLE IV
The amount of capital with which this Corporation will begin
business will be Five Hundred Dollars ($500).
ARTICLE V
This Corporation shall have perpetual existence.
ARTICLE VI
The principal office of the Corporation shall be located at
608 Jackson Street, in Tampa, Hillsborough County, Florida, or at
such other place as the Board of Directors may direct; and the
Corporation shall have the power to establish branch offices and
other places of business at such other places, within or without
the State of Florida, as may be determined and deemed expedient by
the Board of Directors.
ARTICLE VII
The Board of Directors shall consist of not less than three (3)
directors. The number of directors may be increased or diminished
form time to time by action in accordance with the Bylaws of the
Corporation. All of the said directors shall be at least
twenty-one (21) years of age and at least one of them shall be a
citizen of the United States.
ARTICLE VIII
The names and post office addresses of the first officers and
Board of Directors, who, subject to these Articles of Incorporation,
the Bylaws of this Corporation and the laws of the State of Florida,
shall hold office for the first year of the Corporation's existence
or until their successors are elected and have qualified, are:
President W. F. Poe 7702 Park Drive
Tampa, Florida
Vice President William T. Driscoll, Jr. 2903 Beach Drive
Tampa, Florida
Vice President William C. McElmurray 101 Adalia
Tampa, Florida
Secretary-
Treasurer Charles W. Poe 4807 Sunset Blvd.
Tampa, Florida
The initial Board of Directors shall consist of the foregoing individuals.
ARTICLE IX
The name and post office addresses of each subscriber to these
Articles of Incorporation, and the number of shares of common stock
each agrees to take, are:
W.F. Poe 7702 Park Drive 20 shares
Tampa, Florida
William T. Driscoll, Jr. 2903 Beach Drive 20 shares
Tampa, Florida
Charles W. Poe 4807 Sunset Blvd. 20 shares
Tampa, Florida
the proceeds of which will amount to at least $600.00.
ARTICLE X
Section 1. For the regulation of the business and for the
conduct of the affairs of the Corporation, to create, divide, limit
and regulate the powers of the Corporation, the directors and the
stockholders, provision is made as follows:
(a) General authority is hereby conferred upon the Board of
Directors of the Corporation, except as the stockholders may otherwise
from time to time provide or direct, to fix the consideration for which
the shares of stock of the Corporation shall be issued and disposed of,
and to provide when and how such consideration shall be paid.
(b) Meetings of the incorporators, of the stockholders, and of
the directors of the Corporation, for all purposes, may be held at any
place, either inside or outside of the State of Florida.
(c) All corporate powers, including the sale, mortgage,
hypothecation, and pledge of the whole or any part of the corporate
property, shall be exercised by the Board of Directors, except as
otherwise expressly provided by law.
(d) The Board of Directors shall have power from time to time
to fix and determine and vary the amount of the working capital of the
Corporation and direct and determine the use and disposition of any surplus
or net profits over and above the capital stock paid in, and in its
discretion, the Board of Directors may use and apply any such surplus or
accumulated profits in purchasing or acquiring bonds or
other obligations of the Corporation or shares of its own capital
stock, to such extent, in such manner and upon such terms as the
Board of Directors may deem expedient, but any shares of such
capital stock so purchased or acquired may not be resold unless
such shares shall have been retired in the manner provided by law
for the purpose of decreasing the Corporation's capital stock.
(e) The Board of Directors shall have the power of fixing
the compensation, by way of salaries and/or bonuses, and/or pensions,
of the employees, the agents, the officers, and directors, all or each
of them, in such sum and form and amount as may seem reasonable in and
by their discretion.
(f) The Board of Directors may designate from their number
an executive committee, which shall, for the time being, in the
intervals between meetings of the Board and to the extent provided
by the Bylaws and authorized by law, exercise the powers of the
Board of Directors in the management of the affairs and business
of the Corporation.
(g) Any one or more or all of the directors may be removed,
either with or without cause, at any time, by the vote of the
stockholders holding a majority of the stock entitled to vote of
the Corporation, at any special meeting, and thereupon the term of
each director or directors who shall have been so removed shall
forthwith terminate, and there shall be a vacancy or vacancies in
the Board of Directors, to be filled as provided by the Bylaws.
(h) Any officers of the Corporation may be removed either with
or without cause, at any time, by vote of a majority of the Board of
Directors.
(i) No contract or other transaction between the Corporation
and any other corporation shall be affected or invalidated by the fact
that any one or more of the directors or officers of this Corporation
is or are interested in or is a director or officer or are directors
or officers of such other corporation, nor shall such contract or
other transaction be affected by the fact that the directors or
officers of the Corporation are personally interested therein.
Any director or directors, officer or officers, individually or
jointly, may be a party or parties to or may be interested
in any contract or transaction of or with this Corporation or in
which this Corporation is interested; and no contact, act
or transaction of this Corporation with any person or persons,
firm, association, or corporations shall be affected or invalidated
by the fact that any director or directors or officer or
officers of this Corporation is a party or are parties to, or
interested in, such contract, act or transaction or in any way
connected with such person or persons, firm, association or
corporation, and each and every person who may become a director
or officer of this Corporation is hereby relieved, as far as is
legally permissible, from any disability which might otherwise
prevent him from contracting with the Corporation for the benefit of
himself or of any firm, association or corporation in which
he may be in anywise interested.
(j) Subject always to Bylaws made by the stockholders, the
Board of Directors may make Bylaws and from time to time alter, amend
or repeal any Bylaws, but any Bylaws made by the Board of Directors
may be altered or repealed by the stockholders.
(k) No holder of shares of the capital stock of any class of the
Corporation shall have any pre-emptive or preferential right of
subscription to any shares of any class of stock of the Corporation,
whether now or hereafter authorized, or to any obligations convertible
into stock of the Corporation, issued or sold, nor any right of
subscription to any thereof other than such, if any, as the Board of
Directors, in its discretion, may from time to time determine and at
such price as the Board of Directors may from time to time fix;
and any shares of stock or convertible obligations which the
corporation may determine to offer for subscription to the
holders of stock may, as the Board of Directors shall determine,
be offered to more than one class of stock, in such proportions
as between said classes of stock as the Board of Directors in its
discretion may determine. As used in this paragraph, the expression
"convertible obligations" shall include any notes, bonds or other
evidences of indebtedness to which are attached or with which are
issued warrants or other rights to purchase stock of the Corporation
of any class or classes; and the Board of Directors is hereby
expressly authorized, in its discretion, in connection with the
issue of any obligations or stock of the Corporation (but without
intending hereby to limit its general power so to do in any other
cases) to grant rights or options to purchase stock of the
Corporation of any class upon such terms and during such periods
as the Board of Directors shall determine, and to cause such
rights or options to be evidenced by such warrants or other
instruments as it may deem advisable.
(l) The Bylaws of the Corporation may provide for the
indemnification of the officers and directors of the Corporation
for their actions and omissions up to the maximum extent permitted by law.
ARTICLE XI
These Articles of Incorporation may be amended in the manner
provided by law. Every amendment shall be approved by the Board of
Directors, proposed by them to the stockholders, and approved at a
stockholders' meeting by a majority of the stock entitled to vote
thereon, unless all the directors and all the stockholders sign a
written statement manifesting their intention that a certain amendment
of these Articles of Incorporation be made.
The undersigned officer of Poe & Brown, Inc. has executed these
Amended and Restated Articles of Incorporation this 18th day of May, 1998.
POE & BROWN, INC.
By: /s/ JAMES L. OLIVIER
___________________________
James L. Olivier
Vice President
CERTIFICATE
The undersigned officer of Poe & Brown, Inc. (the "Corporation")
hereby supplies this Certificate to the Corporation's Amended and
Restated Articles of Incorporation pursuant to Section 607.1007(4),
Florida Statutes:
1. The foregoing Amended and Restated Articles of Incorporation
contain an amendment to the Corporation's Articles of Incorporation
requiring shareholder approval. The amendment consists of deleting
the old Article III in its entirety and replacing it with the new
Article III.
2. The amendment to the Articles of Incorporation was adopted by
a vote of the shareholders of the Corporation at the Corporation's
Annual Meeting of Shareholders on April 29, 1998. The number of
votes cast for the amendment by the shareholders was sufficient
for approval.
IN WITNESS WHEREOF, the undersigned officer of the Corporation
has executed this Certificate this 18th day of May, 1998.
POE & BROWN, INC.
By: /s/ JAMES L. OLIVIER
_____________________________
James L. Olivier
Vice President
EXHIBIT 10c2
EXTENSION TO LOAN AGREEMENT
This Extension to Loan Agreement dated as of the 1st day of August,
1998 between Continental Casualty Company, an Illinois insurance company
("Company") and Poe and Brown, Inc., a Florida corporation ("Agency").
WHEREAS, Company and Agency entered into a Loan Agreement dated
August 23, 1991 as amended by First Amendment to Loan Agreement dated
April 12, 1993 ("Loan Agreement"), and in conjunction therewith the
Agency executed a Promissory Installment Note dated August 23, 1991
("Note") and Collateral Assignment of Commissions and Security
Agreement of even date therewith as amended by First Amendment to
Collateral Assignment of Commissions and Security Agreement dated
April 28, 1993 ("Security Agreement"); and,
WHEREAS, pursuant to the merger agreement dated December 29, 1992
("Merger Agreement"), Azure Acquisition Corporation, a newly formed
Florida corporation which is wholly-owned by the Agency ("Newco") and
Brown & Brown, Inc., a Florida corporation have merged, the surviving
corporation being Brown & Brown, Inc., now a wholly-owned subsidiary
of the Agency; and,
WHEREAS, pursuant to the Merger Agreement, the Agency's Articles
of Incorporation have been amended to change the Agency's name from
"Poe & Associates, Inc." to "Poe and Brown, Inc."; and,
WHEREAS, the Company and the Agency, entered into Second Amendment
to Loan Agreement dated July 1, 1993 to provide for the aforesaid
change of name, and to amend the name Poe & Associates, Inc. to
Poe and Brown, Inc.
WHEREAS, as of August 1, 1998 the principal balance of the loan
is $4,000,000. In accordance with the terms of the Loan Agreement
and Note, the Agency is obligated to reduce the principal amount of
the loan by $1,000,000 on August 1, 1998 and on each August 1st
thereafter until August 1, 2001, when the entire outstanding balance
is due in full.
WHEREAS, the Company and the Agency desire to extend the term of
the loan to August 1, 2003 and defer the payments of the principal
amount of the note and loan due on August 1, 1998 and August 1, 1999.
NOW, THEREFORE, for and in consideration of the mutual covenants
and conditions contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Company and Agency agree as follows:
1. Effective as of August 1, 1998, the date "August 1, 2001" in
the second paragraph of Section 3 of the Loan Agreement shall be
amended to "August 1, 2003."
2. Effective as of August 1, 1998, the following shall be
inserted after the second sentence in Section 2.B of the Loan Agreement:
"On August 1, 1998 and August 1, 1999 the funds available
for disbursement (and the principal amount of the Note and the Loan)
will not be reduced on the anniversary date of this Agreement.
Commencing on August 1, 2000 and each subsequent year, the amount of funds
available for disbursement (and the principal amount of the Note and Loan)
shall be reduced by $1,000,000 on the anniversary date of this Agreement
irrespective of any amount repaid by the Borrower hereunder.
This Extension to Loan Agreement is only a supplement to the
Loan Agreement and is not a novation thereof. Except as expressly
provided in this Extension to Loan Agreement, all terms and conditions
of the Loan Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this Extension to Loan Agreement has been
duly executed by the Company and Agency as of the date first appearing
in this Amendment.
ATTEST: CONTINENTAL CASUALTY COMPANY
_______________________ By: /s/ THOMAS TAYLOR
Assistant Secretary ______________________________
Title:___________________________
POE & BROWN INC.
By: /s/ WILLIAM ZIMMER
_______________________________
Title: Chief Financial Officer
_____________________________
EXHIBIT 10k
POE & BROWN, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into by and between POE &
BROWN, INC., hereinafter called the "Company" and KENNETH E. HILL,
hereinafter called "Employee." The parties wish to memorialize their
agreement concerning the continuation of Employee's employment with
Company through April 30, 2005, the compensation to be paid to Employee
by Company during the period May 1, 1998 through April 30, 2005, and
related matters pertaining to Employee's employment with the Company.
1. Definitions - "Company" means Poe & Brown, Inc. and with respect
to paragraph 8, hereof, also means its subsidiaries, affiliated companies
and any company operated or supervised by the Company, as well as any
successor entity formed by merger or acquisition, including any company
that may acquire a majority of the stock of Poe & Brown, Inc. "Employee"
means Kenneth E. Hill and with respect to paragraph 9 hereof also means
any company or business in which employee has a controlling or managing
interest.
2. Employment - The Company hereby employs Employee upon the terms
and conditions set forth in this Agreement.
3. Term - The term of the Agreement shall be continuous until
April 30, 2005.
4. Extent of Duties - Employee shall perform such duties as agreed
upon from time to time by Employee and the officers of the Company.
During the term of his employment under this Agreement, Employee shall
not directly or indirectly engage in the insurance business in any of
its phases, either as a broker, agent, solicitor, consultant or
participant, in any manner or in any firm or corporation engaged
in the business of insurance or re-insurance, except for account
of the Company or as directed by the Company. It is understood
and agreed that the restrictive covenants contained in this paragraph
4 are a material portion of the consideration to Company under
this Agreement, and, so long as such covenants are complied with
and this Agreement has not terminated due to the death of Employee,
Company's obligations under paragraph 5, below, shall be irrevocable.
5. Compensation - Commencing May 1, 1998, Employee shall receive
annual salary as indicated below, less applicable taxes, to be paid
in accordance with normal Company payroll practices.
May 1, 1998 $250,000
May 1, 1999 $260,000
May 1, 2000 $270,000
May 1, 2001 $280,000
May 1, 2002 $290,000
May 1, 2003 $300,000
May 1, 2004 $310,000
6. Benefits - Employee shall be entitled to enjoy the same benefits
and privileges as conferred upon any other employees of comparable rank
within the Company. This includes plans such as life and health
insurance, sick pay, paid vacation and employee discounts. Employee
acknowledges that the applicable benefits have been explained to him.
7. (a) Employee recognizes and acknowledges that the Confidential
Information (as hereafter defined) constitutes valuable, secret, special,
and unique assets of Company. Employee covenants and agrees that,
during the term of this agreement and following its expiration, he
will not disclose the Confidential Information to any person, firm,
corporation, association, or other entity for any reason or purpose
without the express written approval of Company and will not use the
Confidential Information except in Company's business. It is expressly
understood and agreed that the Confidential Information is the property
of Company and must be immediately returned to Company upon demand
therefor. The term Confidential Information includes each, every,
and all written documentation related to Company or its business that
is not public information, whether furnished by Company or compiled
by Employee, including but not limited to: (1) lists of the
Company's customers, companies, accounts and records pertaining thereto;
(2) customer lists, prospect lists, policy forms, and/or rating
information, expiration dates, information on risk characteristics,
information concerning insurance markets for large or unusual
risks, and all types of written information customarily used by
Company or available to the Employee; (3) information related to
any of Company's programs and marketing strategies; (4) underwriting
information received from customers; and (5) Employee's recollection of
Confidential Information.
(b) For a period of two (2) years following the expiration
of this Agreement, Employee specifically agrees not to solicit, accept,
nor service, directly or indirectly, as insurance solicitor, insurance
agent, insurance broker, insurance wholesaler, managing general agent,
consultant, or otherwise, for Employee's accounts or the accounts of
any other agent, or broker, or insurer, either as officer, director,
stockholder, owner, partner, employee, promoter, consultant, manager,
or otherwise, any insurance or bond business of any kind or character
from any person, firm, corporation, or other entity, that is a
customer or account of the Company during the term of this Agreement
or from any prospective customer or account to whom the Company
made proposals while Employee was employed by Company. Should a
court of competent jurisdiction declare any of the covenants set
forth in this paragraph unenforceable due to an unreasonable restriction
of duration, geographical area or otherwise, each of the parties
hereto agrees that such court shall be empowered to rewrite or reform any
such covenant and shall grant Company injuctive relief reasonably
necessary to protect its interest.
(c) Employee agrees that Company shall have the right to
communicate the terms of this Agreement to any third parties, including
but not limited to, any past, present or prospective employer of
Employee. Employee waives any right to assert any claim for damages
against Company or any officer, employee or agent of Company arising
from disclosure of the terms of this paragraph.
(d) In the event of the breach or threatened breach of the
provisions of this paragraph, Company shall be entitled to injunctive
relief as well as any other applicable remedies at law or in equity.
8. Organizing Competitive Businesses; Soliciting Company Employees
- - Employee agrees that so long as he is working for Company he will not
undertake the planning or organizing of any business activity competitive
with the work he performs. Employee agrees that he will not, for a period
of two (2) years following termination of employment with Company,
directly or indirectly, solicit any of the Company's employees to
work for Employee or any other competitive company.
9. Protection of Company Property - All records, files manuals,
lists of customers, blanks, forms, materials, supplies, computer
programs and other materials furnished to the Employee by the
Company, used by him on its behalf, or generated or obtained by
him during the course of his employment, shall be and remain the
property of Company. Employee shall be deemed the bailee thereof
for the use and benefit of Company and shall safely keep and preserve
such property, except as consumed in the normal business operations
of Company. Employee acknowledges that this property is confidential
and is not readily accessible to Company's competitors.
10. Attorney Fees - Should either party be required to retain
counsel to enforce any provision of this Agreement, the prevailing
party in any resulting litigation shall be entitled to recover, in
addition to any other remedy obtained, all expenses and attorney's
fees incurred, including fees and expenses incurred at the trial
and appellate levels of all court, administrative, arbitration, and
alternative dispute resolution proceedings.
11. Assignment - Employee agrees that Company may assign this
Agreement to any entity in connection with any sale of some or all
of Company's assets or subsidiary corporations, or the merger by
Company with or into any business entity.
12. Notices - Any notices required or permitted to be given under
this Agreement shall be sufficient in writing and if sent by Certified
Mail to:
Employee at:
8 Moss Point Drive
Ormond Beach, Florida 32174
and to the Company at:
401 E. Jackson Street, Suite 1700
Tampa, Florida 33602
or such other address as either shall give to the other in writing
for this purpose.
13. Waiver of Breach - The waiver of either party of a breach of
any provision of the Agreement shall not operate or be construed as a
waiver of any subsequent breach by the other party.
14. Binding Effect - This Agreement shall be binding on and inure
to the benefit of the respective parties and their respective heirs,
legal representatives, successors and assigns.
15. Florida Law to Govern; Venue - This Agreement shall be governed
by and construed according to the laws of the State of Florida. Any
action to enforce or interpret this Agreement shall be brought in
Volusia County, Florida.
WITNESSES: AGREED TO:
KENNETH E. HILL
/s/ JANET JEWELL /s/ KENNETH E. HILL
____________________ ________________________
Kenneth E. Hill
/s/ DIANE JONE Date: 5/6/98
____________________
as to Employee
POE & BROWN, INC.
/s/ WILLIAM ZIMMER By: /s/ J. HYATT BROWN
______________________ _________________________
Name: J. Hyatt Brown
/s/ JANE S. JENS
______________________
as to Poe & Brown Title: CEO
Date: 5/6/98
EXHIBIT 10l
DEFERRED COMPENSATION AGREEMENT
_______________________________
This Deferred Compensation Agreement is made and entered into
this 6 day of May, 1998, by and between Brown & Brown, Inc., a Florida
corporation and wholly-owned subsidiary of Poe & Brown, Inc.
(collectively, "Company"), and Kenneth E. Hill ("Hill").
Background
The parties entered into an Agreement dated April 27, 1993,
which they now wish to clarify to reflect, among other things, that
Hill may begin to receive payments prior to the date that he retires
from employment with the Company, and to fix the amounts to be paid to
Hill by the Company. Therefore, the parties are entering into this
Deferred Compensation Agreement, which will replace the Agreement
described above.
Terms
1. Payments to Hill. (a) In consideration of services which have
been rendered to the Company by Hill prior to the date of this Deferred
Compensation Agreement and for other good and valuable consideration,
receipt of which is hereby acknowledged, commencing June 1, 1998, and
continuing annually thereafter for a period of ten years, the Company
will pay Hill the sum of Two Hundred and Seventy-Six Thousand Seven
Hundred Ninety-Two and 00/100 Dollars ($276,792.00) per annum, less
applicable payroll taxes, which shall be withheld by the Company.
Company shall be responsible for payment of the employer's portion
of FICA and Medicare tax related to these payments. It is understood
and agreed that any and all loans made to Hill by the Company have been
fully repaid, and that Hill has no further obligation to the Company
for any such loans.
(b) If Hill dies before receiving ten annual payments, the
Company shall continue to make such annual payments to Hill's wife if
she survives him, or to the personal representative of Hill's estate
in the event that Hill's wife fails to survive him. In the event that
Hill's wife survives Hill, but dies before all ten payments provided
for herein have been made by the Company, the Company shall pay the
remaining annual payments to the personal representative of Hill's
estate, or to such other beneficiary or beneficiaries as may have been
designated by Hill to the Company in writing, or in his last will.
2. Entire Agreement. Upon execution of this Deferred Compensation
Agreement, the Agreement between the parties dated April 27, 1993, shall
terminate, and have no further force or effect, and neither party shall
have any rights under that agreement.
3. Successors and Assigns. This Deferred Compensation Agreement
shall be binding on and inure to the benefit of any successor or
successors of the Company and the legal representatives and heirs of Hill.
IN WITNESS WHEREOF, the parties have executed this Deferred
Compensation Agreement this __ day of May, 1998.
WITNESSES: COMPANY
/s/ WILLIAM ZIMMER By: /s/ J. HYATT BROWN
_____________________ _______________________
J. Hyatt Brown
/s/ JANE S. JENS President
_____________________
As to Company
/s/ JANET JEWELL /s/ KENNETH E. HILL
___________________ _________________________
Kenneth E. Hill
/s/ DIANE JONES
____________________
As to Hill
EXHIBIT 10m
May 4, 1998
Ken Hill
Poe & Brown, Inc.
220 S. Ridgewood Avenue
Daytona Beach, FL 32114
Re: Health Insurance; Life Insurance
Dear Ken:
This will confirm that, in consideration of the agreements entered
into between Poe & Brown, Inc. (the "Company") and you this date,
the Company has agreed to the following arrangement in the event of
your death during the first four years of the term of the Addendum
to Employment Agreement, that is, prior to April 30, 2002: the
Company will pay to your spouse $10,000 per year (or a prorated
fraction thereof for each portion of a year) for use in purchasing health
insurance benefits for herself and any covered dependents for each year
or portion thereof after the expiration of the 36-month period during
which your spouse and covered dependents would be eligible to purchase
continuation coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) and the terms of the Company's
medical plan, and prior to May 1, 2005.
This will further confirm the Company's agreement to purchase,
and to keep in effect throughout the term of your Employment Agreement,
that is, until April 30, 2005, a life insurance policy naming your
wife if she survives you, or the personal representative of your
estate, if your wife fails to survive you, or such other beneficiary
or beneficiaries as you may designate to the Company in writing, as
beneficiaries. The life insurance policy is intended to supply to your
designated beneficiary an amount representing the balance of the annual
salary payments provided for in your Employment Agreement which remain
unpaid at the time of your death.
Sincerely,
POE & BROWN, INC.
/s/ J. HYATT BROWN
J. Hyatt Brown
Chairman, President and
Chief Executive Officer
Exhibit 11 - Statement Re: Computation of Basic and Diluted
Earnings Per Share (Unaudited)
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
1998 1997 1998 1997
____ ____ ____ ____
BASIC EARNINGS
PER SHARE
Net Income $ 6,009 $ 5,103 $16,968 $14,308
======= ======= ======= =======
Weighted average
shares outstanding $13,476 $13,167 $13,408 $13,053
======= ======= ======= =======
Basic earnings
per share $ .45 $ .39 $ 1.27 $ 1.10
======= ======= ======= =======
DILUTED EARNINGS
PER SHARE
Weighted average
number of
shares outstanding 13,476 13,167 13,408 13,053
Net effect of
dilutive stock
options, based on
the treasury stock
method - 2 - 3
_______ _______ _______ _______
Total diluted shares
used in computation 13,476 13,169 13,408 13,056
====== ====== ======= =======
Diluted earnings per
share $ .45 $ .39 $ 1.27 $ 1.10
======= ======= ======= =======
5
1000
9-MOS
DEC-31-1998
SEP-30-1998
32,339
8,153
63,295
0
0
106,590
32,142
(18,807)
208,787
118,017
0
0
0
1,350
75,451
208,787
0
114,421
0
86,534
0
0
4,751
27,887
10,919
16,968
0
0
0
16,968
1.27
1.27
