Filed Pursuant to Rule 424(b)(5)
Registration No. 333-75158
PROSPECTUS
$250,000,000
BROWN & BROWN, INC.
DEBT SECURITIES, COMMON STOCK
AND WARRANTS
When we offer securities, we will provide you with a prospectus supplement
describing the terms of the specific issue of securities, including the offering
price of the securities. The prospectus supplements may also add, update or
change information contained in this prospectus. You should read this prospectus
and any supplements carefully before you invest.
Our common stock is traded on the New York Stock Exchange under the symbol
"BRO."
INVESTING IN THESE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 3 OF THIS PROSPECTUS.
The securities may be offered in amounts, at prices and on terms determined at
the time of offering. The securities may be sold directly to you through agents
which we may select, or through underwriters and dealers which we may select. If
we use agents, underwriters or dealers to sell the securities, we will name them
and describe their compensation in a prospectus supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is December 21, 2001.
TABLE OF CONTENTS
PAGE
----
About this prospectus....................................... 1
About Brown & Brown......................................... 1
Disclosure regarding forward-looking statements............. 2
Risk factors................................................ 3
Use of proceeds............................................. 9
Ratio of earnings to fixed charges.......................... 9
The securities.............................................. 10
Description of debt securities.............................. 10
Description of capital stock................................ 20
Description of warrants..................................... 23
Plan of distribution........................................ 25
Legal matters............................................... 26
Experts..................................................... 26
Where you can find more information......................... 26
Incorporation by reference.................................. 27
You should rely only on the information contained in this prospectus or any
supplement. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of those documents. Our
business, financial condition, results of operations and prospects may have
changed since that date.
The information in this prospectus or any supplement may not contain all of the
information that may be important to you. You should read the entire prospectus
or any supplement, as well as the documents incorporated by reference in the
prospectus or any supplement, before making an investment decision.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we filed
with the Securities and Exchange Commission utilizing a "shelf" registration
process. Under this shelf process, we may, from time to time, sell any
combination of securities described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any applicable
prospectus supplement together with additional information described below under
the heading "Where You Can Find More Information."
When used in this prospectus and any prospectus supplement, the terms "Brown &
Brown," "we," "our," "us" and the "Company" refer to Brown & Brown, Inc. and it
subsidiaries. The following summary contains basic information about us. It
likely does not contain all the information that is important to you. We
encourage you to read this entire prospectus and the documents we have referred
you to.
ABOUT BROWN & BROWN
OUR BUSINESS
We are a diversified insurance agency and brokerage that markets and sells
primarily property and casualty insurance products and services to its clients.
Because we do not engage in underwriting activities, we do not assume
underwriting risks. Instead, we act in an agency capacity to provide our clients
with targeted, customized risk management products. As of December 1, 2001, our
activities were conducted in 131 locations in 28 states. Of the 131 locations,
35 are in Florida; 18 in New York; ten in Virginia; eight in Louisiana; six in
Minnesota; five in each of Colorado and South Carolina; four in each of Georgia,
North Dakota, Texas and Washington; three in each of Arizona, California and New
Mexico; two in each of Connecticut, Michigan, Nevada, New Jersey and
Pennsylvania; and one in each of Indiana, Iowa, Missouri, Ohio, Oklahoma,
Tennessee, West Virginia, Wisconsin and Wyoming.
Our business is divided into four divisions: (1) the Retail Division; (2) the
National Programs Division; (3) the Services Division; and (4) the Brokerage
Division. The Retail Division is composed of Brown & Brown employees who market
and sell a broad range of insurance products to insureds. The National Programs
Division works with underwriters to develop proprietary insurance programs for
specific niche markets. These programs are marketed and sold primarily through
independent agencies and agents across the United States. We receive an override
on the commissions generated by these independent agencies. The Services
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. For the
fiscal year ended December 31, 2000 and the nine months ended September 30,
2001, we achieved commission and fee revenues of approximately $258.3 million
and $264.3 million, respectively.
RECENT DEVELOPMENTS
From January 1, 2001 through December 1, 2001, we acquired insurance agencies
based in Tampa, Florida; Rochester, New York; Lafayette, Louisiana; Phoenix,
Arizona (two); Thousand Oaks, California; Rome, New York; Titusville, Florida;
Manassas, Virginia; Tallahassee, Florida; Syracuse,
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New York; St. Louis, Missouri; Roswell, New Mexico; Deerfield Beach, Florida;
Las Vegas, Nevada; Newington, Connecticut; Pryor, Oklahoma; Orlando, Florida;
Clearwater, Florida; St. Petersburg, Florida; Wheat Ridge, Colorado; Salem,
Virginia; El Paso, Texas; Bethlehem, Pennsylvania; Baton Rouge, Louisiana;
Charleston, South Carolina; Grand Forks, North Dakota; Flint, Michigan; Tacoma,
Washington; Novato, California; and Seattle, Washington.
You should read this information in conjunction with our consolidated financial
statements and the notes thereto that are incorporated by reference into this
prospectus. For other recent developments, we refer you to our most recent and
future filings under the Securities Exchange Act of 1934.
Our principal executive offices are located at 220 South Ridgewood Avenue,
Daytona Beach, Florida 32114, and 401 East Jackson Street, Suite 1700, Tampa,
Florida 33602, and our telephone numbers at those addresses are (386) 252-9601
and (813) 222-4100, respectively. Our website is located at
http://www.bbinsurance.com. Information contained in our website is not a part
of this document.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
We make "forward-looking statements" within the "safe harbor" provision of the
Private Securities Litigation Reform Act of 1995 throughout this prospectus,
supplements to this prospectus and in the documents we incorporate by reference
into this prospectus. You can identify these statements by forward-looking words
such as "may," "will," "expect," "anticipate," "believe," "estimate," "plan" and
"continue" or similar words. We have based these statements on our current
expectations about future events. Although we believe that our expectations
reflected in or suggested by our forward-looking statements are reasonable, our
actual results may differ materially from what we currently expect. Important
factors which could cause our actual results to differ materially from the
forward-looking statements in this prospectus or in the documents that we
incorporate by reference into this prospectus include those described under
"Risk Factors" and:
- material adverse changes in economic conditions in the markets we serve;
- future regulatory actions and conditions in the states in which we conduct our
business;
- competition from others in the insurance agency and brokerage business;
- the integration of our operations with those of businesses or assets we have
acquired or may acquire in the future and the failure to realize the expected
benefits of such integration; and
- other risks and uncertainties as may be detailed from time to time in our
public announcements and Securities and Exchange Commission filings.
You should carefully read this prospectus, supplements to this prospectus and
the documents that we incorporate by reference into this prospectus completely
and with the understanding that our actual future results may be materially
different from what we expect. All forward-looking statements attributable to us
are expressly qualified by these cautionary statements.
We do not undertake any obligation to publicly update or revise any
forward-looking statements.
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RISK FACTORS
Before you invest in our securities, you should be aware that the occurrence of
any of the events described in this Risk Factors section and elsewhere in this
prospectus or in a supplement to this prospectus could have a material adverse
effect on our business, financial condition and results of operations. You
should carefully consider these risk factors and the specific risks set forth
under the caption "Risk Factors" in any supplement to this prospectus, together
with all of the other information included in this prospectus or in a supplement
to this prospectus and in documents we incorporate by reference before you
decide to purchase our securities. This prospectus contains forward-looking
statements that involve risks and uncertainties.
WE CANNOT ACCURATELY FORECAST OUR COMMISSION REVENUES BECAUSE OUR COMMISSIONS
DEPEND ON PREMIUM RATES CHARGED BY INSURANCE COMPANIES, WHICH HISTORICALLY HAVE
VARIED AND, AS A RESULT, HAVE BEEN DIFFICULT TO PREDICT.
We are primarily engaged in insurance agency and brokerage activities and derive
revenues from commissions paid by insurance companies and fees for
administrative, benefit consulting, and managed healthcare services. We do not
determine insurance premiums. Premium rates are determined by insurers based on
a fluctuating market. Historically, property and casualty premiums have been
cyclical in nature and have varied widely based on market conditions. From the
mid-1980s through 1999, general premium levels were depressed as a result of the
expanded underwriting capacity of insurance companies and increased competition.
In many cases, insurance companies lowered commission rates and increased volume
requirements. Significant reductions in premium rates occurred during the years
1986 through 1998 and continued, although to a lesser degree, through 1999. As a
result of increasing "loss ratios" (the comparison of incurred losses plus loss
adjustment expense against earned premiums) of insurance carriers through 1999,
there was a general increase in premium rates beginning in the first quarter of
2000 and continuing into the fourth quarter of 2001. Although the premium
increases varied by line of business, geographical region, insurance carrier and
specific underwriting factors, it was the first time since 1986 that we operated
in an environment of increased premiums for four consecutive quarters. The
terrorist attacks of September 11, 2001 caused the property and casualty
industry to experience significant losses. As a result, industry participants
expect that the rate increases and improving terms occurring before September 11
will continue through the remainder of 2001 and through at least 2002. However,
as traditional risk-bearing insurance carriers continue to outsource the
production of premium revenue to non-affiliated brokers or agents such as
ourselves, those insurance carriers may seek to reduce further their expenses by
reducing the commission rates payable to those insurance brokers or agents. The
reduction of these commission rates, along with general volatility and/or
declines in premiums, may significantly undermine our profitability. Because we
do not determine the timing and extent of premium pricing changes, we cannot
accurately forecast our commission revenues, including whether they will
significantly decline. As a result, our budgets for future acquisitions, capital
expenditures, dividend payments, loan repayments and other expenditures may have
to be adjusted to account for unexpected changes in revenues.
WE DERIVE A SUBSTANTIAL PORTION OF OUR COMMISSION REVENUES FROM ONE INSURANCE
COMPANY, THE LOSS OF WHICH COULD RESULT IN ADDITIONAL EXPENSE AND LOSS OF MARKET
SHARE.
The programs offered by our National Programs Division are primarily
underwritten by the CNA Insurance Companies (CNA). For the year ended December
31, 2000 and the nine months ended September 30, 2001, approximately $7.5
million, or 37.3%, and $4.0 million, or 32.6%, respectively, of our National
Programs Division's commissions and fees were generated from policies
underwritten by CNA. During the same periods, our National Programs Division
represented 7.8%
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and 4.7% of our total commission and fee revenues, respectively. In addition,
for the same periods, approximately $9.7 million, or 4.9%, and $9.4 million, or
4.4%, respectively, of our Retail Division's total commissions and fees were
generated from policies underwritten by CNA. Accordingly, revenues attributable
to CNA represent approximately 5.1% of our total commissions and fees. These
figures represent a decline of revenues generated by policies underwritten by
CNA in recent years. This decline results from certain of our programs and
program accounts moving from CNA to other carriers such as, for example, our
Lawyer's Protector Plan(R) moving from CNA to Clarendon National Insurance
Company in November of 1999.
We have an agreement with CNA relating to each program underwritten by it and
each such agreement provides for either six months' or one year's advance notice
of termination. In addition, we have an existing credit agreement with CNA under
which $2 million was outstanding as of December 1, 2001. Upon the occurrence of
an event of default by us under this credit agreement, including our termination
of any insurance program agreement with CNA, CNA may, at its option, declare any
unpaid balance due and payable on demand. If our relationship with CNA were
terminated, we believe that other insurance companies would be available to
underwrite the business, although some additional expense and loss of market
share would result.
BECAUSE OUR BUSINESS IS HIGHLY CONCENTRATED IN ARIZONA, FLORIDA AND NEW YORK,
ADVERSE ECONOMIC CONDITIONS OR REGULATORY CHANGES IN THESE STATES COULD
ADVERSELY AFFECT OUR FINANCIAL CONDITION.
For the year ended December 31, 2000, our Retail Division derived $14.9 million,
or 7.4%, and $92.7 million, or 47.7%, of its commissions and fees from its
Arizona and Florida operations, respectively, constituting 5.8% and 35.9%,
respectively, of our total commissions and fees. For the nine months ended
September 30, 2001, our Retail Division derived $13.1 million, or 6.0%, and
$89.0 million, or 41.8%, of its commissions and fees from its Arizona and
Florida operations, respectively, constituting 4.9% and 33.7%, respectively, of
our total commissions and fees. We believe that these revenues are attributable
predominately to clients in Arizona and Florida. Additionally, as a result of
the Riedman Insurance acquisition in January 2001, we now have four additional
Florida offices and have folded other Riedman insurance business into our
existing Florida offices. For the year ended December 31, 2000, Riedman derived
$9.9 million, or 18.2% of its commissions and fees, from its Florida operations
and $15.1 million, or 27.8%, of its commission and fees from its New York
operations. Additionally, as a result of this acquisition (as well as subsequent
acquisitions and office consolidations), we now have 18 offices in New York,
where $20.9 million, or 7.9%, of our insurance business was concentrated for the
nine-month period ended September 30, 2001. We believe the regulatory
environment for insurance agencies in Arizona, Florida and New York currently is
no more restrictive than in other states. The insurance business is a
state-regulated industry, and therefore, state legislatures may enact laws that
adversely affect the insurance industry. Because our business is concentrated in
a few states, we face greater exposure to unfavorable changes in regulatory
conditions in those states than insurance agencies whose operations are more
diversified through a greater number of states. In addition, the occurrence of
adverse economic conditions, natural or other disasters, or other circumstances
specific to or otherwise significantly impacting Arizona, Florida and/or New
York could adversely affect our financial condition and results of operations.
THE DEBT SECURITIES WILL BE EFFECTIVELY JUNIOR TO ALL OF OUR SECURED
OBLIGATIONS.
The debt securities will be unsecured obligations of Brown & Brown. The debt
securities will be effectively junior in right of payment to all secured
indebtedness of Brown & Brown. Upon any distribution of assets pursuant to any
liquidation, insolvency, dissolution, reorganization or similar proceeding, the
holders of secured indebtedness will be entitled to receive payment in full from
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the process of the collateral securing such secured indebtedness before the
holders of the debt securities will be entitled to receive any payment with
respect thereto. As a result, the holders of the debt securities may recover
proportionally less than holders of secured indebtedness of Brown & Brown. As of
September 30, 2001, Brown & Brown had approximately $97.2 million of unsecured
indebtedness outstanding, no secured indebtedness (except secured indebtedness
assumed pursuant to the Riedman and certain other acquisitions), and the
capacity to borrow approximately an additional $50 million of secured
indebtedness under our credit facility.
LOSS OF THE SERVICES OF J. HYATT BROWN, OUR CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION AND FUTURE
OPERATING RESULTS.
Although we operate with a decentralized management system, the loss of the
services of J. Hyatt Brown, our Chairman, President and Chief Executive Officer,
who beneficially owned approximately 17.2% of our outstanding common stock as of
December 1, 2001 and is key to the development and implementation of our
business strategy, could adversely affect our financial condition and future
operating results. We maintain a $5 million "key man" life insurance policy with
respect to Mr. Brown. We also maintain a $20 million insurance policy on the
lives of Mr. Brown and his wife. Under the terms of an agreement with Mr. and
Mrs. Brown, at the option of the Brown estate, we will purchase, upon the death
of the later to die of Mr. Brown or his wife, shares of our common stock owned
by Mr. and Mrs. Brown up to the maximum number that would exhaust the proceeds
of the policy.
OUR GROWTH STRATEGY DEPENDS IN PART ON THE ACQUISITION OF INSURANCE AGENCIES,
WHICH MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS IN THE FUTURE AND WHICH, IF
CONSUMMATED, MAY NOT BE ADVANTAGEOUS TO US.
Our growth strategy includes the acquisition of insurance agencies. Our ability
to successfully identify suitable acquisition candidates, complete acquisitions,
integrate acquired businesses into our operations, and expand into new markets
will require us to continue to implement and improve our operations, financial,
and management information systems. For example, most of our offices manage
their clients' information using The Application Manager For Windows (WinTAM)
computer program by Applied Systems. Part of the added time and expense related
to newly acquired agencies includes the integration of an acquired agency's
existing computer system into ours. Further, integrated, acquired entities may
not achieve levels of revenue, profitability, or productivity comparable to our
existing locations, or otherwise perform as expected. In addition, we compete
for acquisition and expansion opportunities with entities that have
substantially greater resources. Acquisitions also involve a number of special
risks, such as: diversion of management's attention; difficulties in the
integration of acquired operations and retention of personnel; entry into
unfamiliar markets; unanticipated problems or legal liabilities; and tax and
accounting issues, some or all of which could have a material adverse effect on
the results of our operations and our financial condition.
OUR CURRENT MARKET SHARE MAY DECREASE AS A RESULT OF INCREASED COMPETITION FROM
INSURANCE COMPANIES AND THE FINANCIAL SERVICES INDUSTRY.
The insurance agency business is highly competitive and we actively compete with
numerous firms for clients and insurance carriers, many of which have
relationships with insurance companies or have a significant presence in niche
insurance markets, that may give them an advantage over us. Because
relationships between insurance agencies and insurance carriers or clients are
often local or regional in nature, this potential competitive disadvantage is
particularly pronounced outside of Florida.
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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.
However, to date, such direct writing has had relatively little effect on our
operations, primarily because our Retail Division is commercially oriented.
In addition, to the extent that the Gramm-Leach-Bliley Financial Services
Modernization Act of 1999 and regulations recently enacted thereunder permit
banks, securities firms and insurance companies to affiliate, the financial
services industry may experience further consolidation, and we therefore may
experience increased competition from insurance companies and the financial
services industry, as a growing number of larger financial institutions
increasingly, and aggressively, offer a wider variety of financial services,
including insurance, than we currently offer.
PROPOSED TORT REFORM LEGISLATION, IF ENACTED, COULD DECREASE DEMAND FOR
LIABILITY INSURANCE, THEREBY REDUCING OUR COMMISSION REVENUES.
Legislation concerning tort reform has been considered, from time to time, in
the United States Congress and in several states. Among the provisions
considered for inclusion in such legislation have been limitations on damage
awards, including punitive damages, and various restrictions applicable to class
action lawsuits, including lawsuits asserting professional liability of the kind
for which insurance is offered under policies sold by our National Programs
Division, particularly our Physicians' Protector Plan(R) and Professional
Protector Plan(R) for Dentists. Enactment of these or similar provisions by
Congress, or by states in which we sell insurance, could result in a reduction
in the demand for liability insurance policies or a decrease in policy limits of
such policies sold, thereby reducing our commission revenues.
WE COMPETE IN A HIGHLY REGULATED INDUSTRY, WHICH MAY RESULT IN INCREASED
EXPENSES OR RESTRICTIONS ON OUR OPERATIONS.
We conduct business in a number of states and are subject to comprehensive
regulation and supervision by government agencies in many of the states in which
we do business. The primary purpose of such regulation and supervision is to
provide safeguards for policyholders rather than to protect the interests of
stockholders. The laws of the various state jurisdictions establish supervisory
agencies with broad administrative powers with respect to, among other things,
licensing to transact business, licensing of agents, admittance of assets,
regulating premium rates, approving policy forms, regulating unfair trade and
claims practices, establishing reserve requirements and solvency standards,
requiring participation in guarantee funds and shared market mechanisms, and
restricting payment of dividends.
Also, in response to perceived excessive cost or inadequacy of available
insurance, states have from time to time created state insurance funds and
assigned risk pools, which compete directly, on a subsidized basis, with private
insurance providers. We act as agents and brokers for state insurance funds such
as these in California, Nevada, and certain other states. These state funds
could choose to reduce the sales or brokerage commissions we receive. Any such
event, in a state in which we have substantial operations, such as Florida,
Arizona or New York, could substantially affect the profitability of our
operations in such state, or cause us to change our marketing focus.
State insurance regulators and the National Association of Insurance
Commissioners continually re-examine existing laws and regulations, and such
re-examination may result in the enactment of insurance-related laws and
regulations, or the issuance of interpretations thereof, that adversely affect
our business. Although we believe that we are in compliance in all material
respects with applicable local, state and federal laws, rules and regulations,
there can be no assurance that more restrictive laws, rules or regulations will
not be adopted in the future that could make compliance more difficult or
expensive. Specifically, recently adopted federal financial services
modernization
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legislation is expected to lead to additional federal regulation of the
insurance industry in the coming years, which could result in increased expenses
or restrictions on our operations.
CARRIER OVERRIDE AND CONTINGENT COMMISSIONS ARE LESS PREDICTABLE THAN USUAL,
WHICH IMPAIRS OUR ABILITY TO FORECAST THE AMOUNT OF SUCH COMMISSIONS THAT WE
WILL RECEIVE.
We derive a portion of our revenues from carrier override and contingent
commissions. The aggregate of these commissions generally accounts for 3.1% to
5.2% of our total annual revenues. Contingent commissions are special revenue
sharing commissions from insurance companies based upon the volume and the
growth and/or profitability of the business placed with such companies during
the prior year. We primarily receive these commissions in the first and second
quarters of each year. Override commissions are paid by insurance companies
based on the volume of business that we place with them and are generally paid
over the course of the year. Due to recent changes in our industry, including
changes in underwriting criteria due in part to the high loss ratios experienced
by insurance companies, we cannot predict the payment of these commissions as
well as we have been able to in the past. Further, we have no control over the
ability of insurance companies to estimate loss reserves, which affects our
ability to make profit-sharing calculations. Because these commissions affect
our revenues, any decrease in their payment to us could adversely effect the
results of our operations and our financial condition.
OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION OR LIQUIDITY MAY BE
MATERIALLY ADVERSELY AFFECTED BY ERRORS AND OMISSIONS.
We have extensive operations and are subject to claims and litigation in the
ordinary course of business resulting from alleged errors and omissions. Because
we often assist our clients with matters, including the placement of insurance
coverage and the handling of related claims, that involve substantial amounts of
money, errors and omissions claims against us may in turn allege our potential
liability for all or part of the amounts in question, claimants can seek large
damage awards and these claims can involve potentially significant defense
costs. Errors and omissions could include, for example, our employees or
sub-agents failing, whether negligently or intentionally, to place coverage or
to notify insurance companies of claims on behalf of clients, to provide
insurance companies with complete and accurate information relating to the risks
being insured or to appropriately apply funds that we hold for our clients on a
fiduciary basis. It is not always possible to prevent and detect errors and
omissions and the precautions we take may not be effective in all cases.
While most of the errors and omissions claims made against us have, subject to
our self-insured deductibles, been covered by our professional liability
insurance, our results of operations, financial condition or liquidity may be
adversely affected if in the future our insurance coverage proves to be
inadequate or unavailable or there is an increase in liabilities for which we
self-insure. In addition, errors and omissions claims may harm our reputation or
divert management resources away from operating our business.
WE HAVE NOT DETERMINED THE AMOUNT OF RESOURCES AND THE TIME THAT WILL BE
NECESSARY TO ADEQUATELY RESPOND TO RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY,
WHICH MAY ADVERSELY AFFECT OUR BUSINESS AND OPERATING RESULTS.
Frequent technological changes, new products and services and evolving industry
standards are all influencing the insurance business. The Internet, for example,
is increasingly used to transmit benefits and related information to clients and
to facilitate business-to-business information exchange and transactions. We
believe that the development and implementation of new
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technologies will require additional investment of our capital resources in the
future. We have not determined, however, the amount of resources and the time
that this development and implementation may require, which may result in
short-term, unexpected interruptions to our business, or may result in a
competitive disadvantage in price and/or efficiency, as we endeavor to develop
or implement new technologies.
QUARTERLY AND ANNUAL VARIATIONS IN OUR COMMISSIONS THAT RESULT FROM THE TIMING
OF POLICY RENEWALS AND THE NET EFFECT OF NEW AND LOST BUSINESS PRODUCTION MAY
HAVE UNEXPECTED EFFECTS ON OUR RESULTS OF OPERATIONS.
Our commission income (including contingent commissions but excluding fees),
which typically accounts for approximately 87% to 90% of our total annual
revenues, can vary quarterly or annually due to the timing of policy renewals
and the net effect of new and lost business production. The factors that cause
these variations are not within our control. Specifically, consumer demand for
insurance products can influence the timing of renewals, new business and lost
business, which includes generally policies that are not renewed, and
cancellations. In addition, as discussed, we rely on insurance companies for the
payment of certain commissions. Because these payments are processed internally
by these insurance companies, we may not receive a payment that is otherwise
expected from a particular insurance company in one of our quarters or years
until after the end of that period, which can adversely affect our ability to
budget for significant future expenditures.
Quarterly and annual fluctuations in revenues based on increases and decreases
associated with the timing of policy renewals have had an adverse effect on our
financial condition in the past, and we may experience such effects in the
future.
WE MAY EXPERIENCE VOLATILITY IN OUR STOCK PRICE THAT COULD AFFECT YOUR
INVESTMENT.
The market price of our common stock may be subject to significant fluctuations
in response to various factors, including:
- quarterly fluctuations in our operating results;
- changes in securities analysts' estimates of our future earnings; and
- our loss of significant customers or significant business developments
relating to us or our competitors.
Our common stock's market price also may be affected by our ability to meet
analysts' expectations and any failure to meet such expectations, even if minor,
could cause the market price of our common stock to decline. In addition, stock
markets have generally experienced a high level of price and volume volatility,
and the market prices of equity securities of many companies have experienced
wide price fluctuations not necessarily related to the operating performance of
such companies. These broad market fluctuations may adversely affect our common
stock's market price. In the past, securities class action lawsuits frequently
have been instituted against companies following periods of volatility in the
market price of such companies' securities. If any such litigation is instigated
against us, it could result in substantial costs and a diversion of management's
attention and resources, which could have a material adverse effect on our
business, results of operations and financial condition.
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WE CANNOT ASSURE YOU THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE
SECURITIES OFFERED OTHER THAN OUR COMMON STOCK OR THAT SUCH A MARKET WILL NOT BE
VOLATILE.
There is no established trading market for the securities offered other than our
common stock, and we do not intend to apply for listing of the securities (other
than our common stock) offered on any national securities exchange or for
quotation of the securities offered on any automated dealer quotation system. We
expect that any underwriters we select will make a market in the securities
offered after the consummation of an offering of securities issued in connection
with this prospectus, although they would be under no obligation to do so and
may discontinue any market-making activities at any time without any notice.
Accordingly, no assurance can be given as to the price of the securities
offered, the liquidity of the trading market for the securities offered or that
an active public trading market for the securities offered will develop. If an
active public trading market for the securities offered does not develop, the
market price and liquidity of the securities offered may be adversely affected.
If the securities offered are traded, they may trade at a discount from their
offering price, depending upon prevailing interest rates, the market for similar
securities, our performance and certain other factors. The liquidity of, and
trading markets for, any debt securities offered may also be adversely affected
by general declines in the market for non-investment grade debt. Such declines
may adversely affect the liquidity of, and trading markets for, the securities
offered, independent of our financial performance or prospects. Historically,
the markets for non-investment grade debt securities have been subject to
disruptions that have caused substantial price volatility. There can be no
assurance that the market for any debt securities offered will not be subject to
similar disruptions. Any such disruptions may have a material adverse effect on
the value of such securities offered.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, the net proceeds from
the sale of securities offered by this prospectus will be used to fund
acquisitions and for general corporate purposes, including capital expenditures,
and to meet working capital needs. Pending such uses, we anticipate that we will
invest the net proceeds in interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for the
nine months ended September 30, 2001 and 2000 and the five years ended December
31, 2000.
-------------------------------------------------------------------------------------------------
FOR THE
NINE MONTHS
ENDED
SEPTEMBER 30, FOR THE YEAR ENDED DECEMBER 31,
-------------- --------------------------------
2001 2000 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------------------------
Ratio of earnings to fixed charges............ 14.0 46.6 42.3 34.9 34.1 20.4 19.5
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For purposes of computing the ratio of earnings to fixed charges, earnings
consist of the sum of pretax income from continuing operations, interest
amortized to cost of sales, interest expense (exclusive of capitalized interest)
and the portion of rent expense deemed to represent interest. Fixed charges
consist of the sum of interest expense, including capitalized interest and
amortization of debt issuance costs, if applicable, and the portion of rent
expense deemed to represent interest.
9
THE SECURITIES
From time to time, we may offer under this prospectus, separately or together:
- unsecured senior or subordinated debt securities;
- shares of common stock;
- warrants to purchase shares of common stock; and
- warrants to purchase debt securities.
The aggregate initial offering price of the offered securities will not exceed
$250,000,000.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth general terms and provisions of the debt
securities to which any prospectus supplement may relate. We will describe the
particular terms and provisions of the series of debt securities offered by a
prospectus supplement, and the extent to which such general terms and provisions
described below may apply thereto, in the prospectus supplement relating to such
series of debt securities.
The senior debt securities are to be issued in one or more series under an
indenture, as supplemented or amended from time to time between us and an
institution that we will name in the related prospectus supplement, as trustee.
For ease of reference, we will refer to the indenture relating to senior debt
securities as the senior indenture and we will refer to the trustee under that
indenture as the senior trustee. The subordinated debt securities are to be
issued in one or more series under an indenture, as supplemented or amended from
time to time, between us and an institution that we will name in the related
prospectus supplement, as trustee. For ease of reference, we will refer to the
indenture relating to subordinate debt securities as the subordinate indenture
and we will refer to the trustee under that indenture as the subordinate
trustee. This summary of certain terms and provisions of the debt securities and
the indentures is not necessarily complete, and we refer you to the copy of the
form of the indentures which are or will be filed as an exhibit to the
registration statement of which this prospectus forms a part, and to the Trust
Indenture Act of 1939, as amended. Whenever we refer to particular defined terms
of the indentures in this section or in a prospectus supplement, we are
incorporating these definitions into this prospectus or the prospectus
supplement.
GENERAL
The debt securities will be issuable in one or more series pursuant to the
applicable indenture, a supplemental indenture relating to such series of debt
securities, or a resolution of our board of directors or a committee of the
board. Unless otherwise specified in a prospectus supplement, each series of
senior debt securities will rank equally in right of payment with all of our
other senior obligations. Each series of subordinated debt securities will be
subordinated and junior in right of payment to the extent and in the manner set
forth in the subordinated indenture and any supplemental indenture relating to
that debt. In addition, such subordinated debt securities may rank equal or
senior in right of payment to other subordinated indebtedness which may have
been issued or will be issued in the future. Except as otherwise provided in a
prospectus supplement, the indentures will not limit our incurrence or issuance
of other secured or unsecured debt, whether under the indentures, any other
indenture that we may enter into in the future or otherwise. For more
information, you should read the prospectus supplement relating to a particular
offering of securities.
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The applicable prospectus supplement or prospectus supplements will describe the
following terms of each series of debt securities:
- the title of the debt securities and whether such series constitutes senior
debt securities or subordinated debt securities;
- any limit upon the aggregate principal amount of the debt securities;
- the percentage of principal amount at which the debt securities will be
issued;
- the date or dates on which the principal of the debt securities is payable or
the method of that determination or the right, if any, of Brown & Brown to defer
payment of principal;
- the rate or rates, if any, at which the debt securities will bear interest
(including reset rates, if any, and the method by which any such rate will be
determined), the interest payment dates on which interest will be payable and
the right, if any, of Brown & Brown to defer any interest payment;
- the place or places where, subject to the terms of the indenture as described
below under the caption "--Payment and Paying Agents," the principal of and
premium, if any, and interest, if any, on the debt securities will be payable
and where, subject to the terms of the indenture as described below under the
caption "--Denominations, Registration and Transfer," we will maintain an office
or agency where debt securities may be presented for registration of transfer or
exchange and the place or places where notices and demands to or upon us in
respect of the debt securities and the indenture may be made;
- any period or periods within, or date or dates on which, the price or prices
at which and the terms and conditions upon which debt securities may be
redeemed, in whole or in part, at our option pursuant to any sinking fund or
otherwise;
- the obligation, if any, of Brown & Brown to redeem or purchase the debt
securities pursuant to any sinking fund or analogous provisions or at the option
of a holder and the period or periods within which, the price or prices at
which, the currency or currencies including currency unit or units, in which and
the other terms and conditions upon which the debt securities will be redeemed
or purchased, in whole or in part, pursuant to such obligation;
- the denominations in which any debt securities will be issuable if other than
denominations of $1,000 and any integral multiple thereof;
- if other than in U.S. dollars, the currency or currencies, including currency
unit or units, in which the principal of, and premium, if any, and interest, if
any, on the debt securities will be payable, or in which the debt securities
shall be denominated;
- any additions, modifications or deletions in the events of default or
covenants of Brown & Brown specified in the indenture with respect to the debt
securities;
- if other than the principal amount, the portion of the principal amount of
debt securities that will be payable upon declaration of acceleration of the
maturity thereof;
- any additions or changes to the indenture with respect to a series of debt
securities that will be necessary to permit or facilitate the issuance of the
series in bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
- any index or indices used to determine the amount of payments of principal of
and premium, if any, on the debt securities and the manner in which such amounts
will be determined;
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- subject to the terms of the indenture as described below under the caption
"--Global Debt Securities," whether the debt securities of the series will be
issued in whole or in part in the form of one or more global securities and, in
such case, the depositary for the global securities;
- the appointment of any trustee, registrar, paying agent or agents;
- the terms and conditions of any obligation or right of Brown & Brown or a
holder to convert or exchange debt securities into preferred securities or other
securities;
- whether the defeasance and covenant defeasance provisions described under the
caption "--Satisfaction and Discharge; Defeasance" will be inapplicable or
modified;
- any applicable subordination provisions in addition to those set forth herein
with respect to subordinated debt securities; and
- any other terms of the debt securities not inconsistent with the provisions of
the applicable indenture.
We may sell debt securities at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. We will describe material U.S. federal income
tax consequences and special considerations applicable to those debt securities
in the applicable prospectus supplement.
If the purchase price of any of the debt securities is payable in one or more
foreign currencies or currency units or if any debt securities are denominated
in one or more foreign currencies or currency units or if the principal of,
premium, if any, or interest, if any, on any debt securities is payable in one
or more foreign currencies or currency units, we will set forth the
restrictions, elections, material U.S. federal income tax considerations,
specific terms and other information with respect to such issue of debt
securities and such foreign currency or currency units in the applicable
prospectus supplement.
If any index is used to determine the amount of payments of principal, premium,
if any, or interest on any series of debt securities, we will describe the
material U.S. federal income tax, accounting and other considerations applicable
thereto in the applicable prospectus supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable prospectus supplement, the debt
securities will be issuable only in registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. Debt securities of
any series will be exchangeable for other debt securities of the same issue and
series, of any authorized denominations of a like aggregate principal amount,
the same original issue date, stated maturity and bearing the same interest
rate.
Holders may present each series of debt securities for exchange as provided
above, and for registration of transfer, with the form of transfer endorsed
thereon, or with a satisfactory written instrument of transfer, duly executed,
at the office of the appropriate securities registrar or at the office of any
transfer agent designated by us for such purpose and referred to in the
applicable prospectus supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the indenture. We will
appoint the trustee of each series of debt securities as securities registrar
for such series under the indenture. If the applicable prospectus supplement
refers to any transfer agents, in addition to the securities registrar initially
designated by us with respect to any series, we may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent
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acts, provided that we maintain a transfer agent in each place of payment for
the series. We may at any time designate additional transfer agents with respect
to any series of debt securities.
In the event of any redemption, neither we nor the trustee will be required to:
- issue, register the transfer of or exchange debt securities of any series
during a period beginning at the opening of business 15 days before the day of
mailing of a notice for redemption of debt securities of that series, and ending
at the close of business on the day of mailing of the relevant notice of
redemption; or
- transfer or exchange any debt securities so selected for redemption, except,
in the case of any debt securities being redeemed in part, any portion not being
redeemed.
GLOBAL DEBT SECURITIES
Unless otherwise specified in the applicable prospectus supplement, the debt
securities of a series may be issued in whole or in part in the form of one or
more global securities that we will deposit with, or on behalf of, a depositary
identified in the prospectus supplement relating to such series. Global debt
securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual debt securities represented by it, a global debt security may not be
transferred except as a whole by the depositary for the global debt security to
a nominee of the depositary, or by a nominee of the depositary to the depositary
or another nominee of the depositary, or by the depositary or any nominee to a
successor depositary or any nominee of the successor.
The specific terms of the depositary arrangement with respect to a series of
debt securities will be described in the prospectus supplement relating to the
series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global debt security and the deposit of the global debt
security with or on behalf of the applicable depositary, the depositary for the
global debt security, or its nominee, will credit on its book-entry registration
and transfer system the respective principal amounts of the individual debt
securities represented by the global debt security to the accounts of persons,
more commonly known as participants, that have accounts with the depositary.
These accounts will be designated by the dealers, underwriters or agents with
respect to the debt securities or by us if the debt securities are offered and
sold directly by us. Ownership of beneficial interests in a global debt security
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in the global debt security will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable depositary or its nominee with respect to
interests of participants and the records of participants with respect to
interests of persons who hold through participants. The laws of some states
require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global debt security.
So long as the depositary for a global debt security, or its nominee, is the
registered owner of the global debt security, the depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by the global debt security for all purposes under the
indenture. Except as provided below, owners of beneficial interests in a global
debt security will not be entitled to have any of the individual debt securities
of the series represented by the global debt security registered in their names,
will not receive or be entitled to receive physical delivery of any debt
securities of the series in definitive form, and will not be considered the
owners or holders of them under the indenture.
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Payments of principal of, and premium, if any, and interest on individual debt
securities represented by a global debt security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee, as the
case may be, as the registered owner of the global debt security representing
the debt securities. None of Brown & Brown, the trustee, any paying agent, or
the securities registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interest of the global debt security for the debt
securities or for maintaining, supervising or reviewing any records relating to
those beneficial ownership interests.
We expect that the depositary for a series of debt securities or its nominee,
upon receipt of any payment of principal, premium or interest in respect of a
permanent global debt security representing any of the debt securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
the global debt security for the debt securities as shown on the records of the
depositary or its nominee. We also expect that payments by participants to
owners of beneficial interests in the global debt security held through the
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." These payments will be the responsibility
of these participants.
Unless otherwise specified in the applicable prospectus supplement, if the
depositary for a series of debt securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not appointed
by us within 90 days, we will issue individual debt securities of the series in
exchange for the global debt security representing the series of debt
securities. In addition, unless otherwise specified in the applicable prospectus
supplement, we may at any time and in its sole discretion, subject to any
limitations described in the prospectus supplement relating to the debt
securities, determine not to have any debt securities of the series represented
by one or more global debt securities and, in such event, will issue individual
debt securities of the series in exchange for such global debt securities.
Further, if we so specify with respect to the debt securities of a series, an
owner of a beneficial interest in a global debt security representing debt
securities of the series may, on terms acceptable to us, the trustee and the
depositary for the global debt security, receive individual debt securities of
the series in exchange for such beneficial interests, subject to any limitations
described in the prospectus supplement relating to the debt securities. In any
such instance, an owner of a beneficial interest in a global debt security will
be entitled to physical delivery of individual debt securities of the series
represented by the global debt security equal in principal amount to its
beneficial interest and to have the debt securities registered in its name.
Individual debt securities of the series so issued will be issued in
denominations, unless otherwise specified by us, of $1,000 and integral
multiples thereof. The applicable prospectus supplement may specify other
circumstances under which individual debt securities may be issued in exchange
for the global debt security representing any debt securities.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment of
principal of, and premium, if any, and any interest on debt securities will be
made at the office of the trustee in New York or at the office of such paying
agent or paying agents as we may designate from time to time in the applicable
prospectus supplement, except that at our option, payment of any interest may be
made:
- except in the case of global debt securities, by check mailed to the address
of the person or entity entitled thereto as such address shall appear in the
securities register; or
14
- by transfer to an account maintained by the person or entity entitled thereto
as specified in the securities register, provided that proper transfer
instructions have been received by the regular record date.
Unless otherwise indicated in the applicable prospectus supplement, we will make
payment of any interest on debt securities to the person or entity in whose name
the debt security is registered at the close of business on the regular record
date for the interest payment, except in the case of defaulted interest. We may
at any time designate additional paying agents or rescind the designation of any
paying agent; however, we will at all times be required to maintain a paying
agent in each place of payment for each series of debt securities.
Any moneys deposited with the trustee or any paying agent, or held by us in
trust, for the payment of the principal of, and premium, if any, or interest on
any debt security and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable will, at our
request, be repaid to us or released from such trust, as applicable, and the
holder of the debt security will thereafter look, as a general unsecured
creditor, only to us for payment.
OPTION TO DEFER INTEREST PAYMENTS OR TO PAY-IN-KIND
If provided in the applicable prospectus supplement, we will have the right, at
any time and from time to time during the term of any series of debt securities,
to defer the payment of interest for such number of consecutive interest payment
periods as may be specified in the applicable prospectus supplement, subject to
the terms, conditions and covenants, if any, specified in such prospectus
supplement, provided that an extension period may not extend beyond the stated
maturity of the final installment of principal of the series of debt securities.
If provided in the applicable prospectus supplement, we will have the right, at
any time and from time to time during the term of any series of debt securities,
to make payments of interest by delivering additional debt securities of the
same series. Certain material U.S. federal income tax consequences and special
considerations applicable to the debt securities will be described in the
applicable prospectus supplement.
SUBORDINATION
Except as set forth in the applicable prospectus supplement, the subordinated
indenture will provide that the subordinated debt securities will be
subordinated and junior in right of payment to all senior indebtedness of Brown
& Brown. The term "senior indebtedness" will be defined in the applicable
prospectus supplement. If:
- We default in the payment of any principal, or premium, if any, or interest on
any senior indebtedness when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or declaration or otherwise; or
- an event of default occurs with respect to any senior indebtedness permitting
the holders thereof to accelerate the maturity thereof and written notice of
such event of default, requesting that payments on subordinated debt securities
cease, is given to us by the holders of senior indebtedness,
then unless and until the default in payment or event of default shall have been
cured or waived or shall have ceased to exist, no direct or indirect payment, in
cash, property or securities, by set-off or otherwise, will be made or agreed to
be made on account of the subordinated debt securities or interest thereon or in
respect of any repayment, redemption, retirement, purchase or other acquisition
of subordinated debt securities.
15
Except as set forth in the applicable prospectus supplement, the subordinated
indenture will provide that in the event of:
- any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to us, our
creditors or our property;
- any proceeding for the liquidation, dissolution or other winding-up of Brown &
Brown, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings;
- any assignment by us for the benefit of creditors; or
- any other marshaling of the assets of us;
all present and future senior indebtedness, including, without limitation,
interest accruing after the commencement of the proceeding, assignment or
marshaling of assets, will first be paid in full before any payment or
distribution, whether in cash, securities or other property, will be made by us
on account of subordinated debt securities. In that event, any payment or
distribution, whether in cash, securities or other property, other than
securities of Brown & Brown or any other corporation provided for by a plan of
reorganization or a readjustment, the payment of which is subordinate, at least
to the extent provided in the subordination provisions of the indenture, to the
payment of all senior indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or readjustments
and other than payments made from any trust described below under the caption
"Satisfaction and Discharge; Defeasance," which would otherwise, but for the
subordination provisions, be payable or deliverable in respect of subordinated
debt securities, including any such payment or distribution which may be payable
or deliverable by reason of the payment of any other indebtedness of Brown &
Brown being subordinated to the payment of subordinated debt securities, will be
paid or delivered directly to the holders of senior indebtedness or to their
representative or trustee, in accordance with the priorities then existing among
such holders, until all senior indebtedness shall have been paid in full. No
present or future holder of any senior indebtedness will be prejudiced in the
right to enforce subordination of the indebtedness evidenced by subordinated
debt securities by any act or failure to act on our part.
MODIFICATION OF INDENTURES
From time to time, we and the trustees may modify the indentures without the
consent of any holders of any series of debt securities with respect to some
matters, including:
- to cure any ambiguity, defect or inconsistency or to correct or supplement any
provision which may be inconsistent with any other provision of the indenture;
- to qualify, or maintain the qualification of, the indentures under the Trust
Indenture Act of 1939, as amended; and/or
- to make any change that does not materially adversely affect the interests of
any holder of such series of debt securities.
In addition, under the indentures, we and the trustees may modify some of our
rights, covenants and obligations and the rights of holders of any series of
debt securities with the written consent of the holders of at least a majority
in aggregate principal amount of the series of outstanding debt securities; but
no extension of the maturity of any series of debt securities, reduction in the
interest rate or extension of the time for payment of interest, change in the
optional redemption or repurchase provisions in a manner adverse to any holder
of the series of debt securities, other modification in the terms of payment of
the principal of, or interest on, the series of debt
16
securities, or reduction of the percentage required for modification, will be
effective against any holder of the series of outstanding debt securities
without the holder's consent.
In addition, we and the trustees may execute, without the consent of any holder
of the debt securities, any supplemental indenture for the purpose of creating
any new series of debt securities.
EVENTS OF DEFAULT
The indentures will provide that any one or more of the following described
events with respect to a series of debt securities that has occurred and is
continuing constitutes an "event of default" with respect to that series of debt
securities:
- failure for 60 days to pay any interest or any sinking fund payment on the
series of debt securities when due (subject to the deferral of any due date in
the case of an extension period);
- failure to pay any principal or premium, if any, on the series of the debt
securities when due, whether at maturity, upon redemption, by declaration or
otherwise;
- failure to observe or perform in any material respect certain other covenants
contained in the indenture for 90 days after written notice has been given to us
from the trustee or the holders of at least 25% in principal amount of the
series of outstanding debt securities;
- default resulting in acceleration of other indebtedness of Brown & Brown for
borrowed money, where the aggregate principal amount so accelerated exceeds $50
million and the acceleration is not rescinded or annulled within 60 days after
the written notice thereof to us by the trustee or to us and the trustee by the
holders of 25% in aggregate principal amount of the debt securities of the
series then outstanding, provided that the event of default will be remedied,
cured or waived if the default that resulted in the acceleration of such other
indebtedness is remedied, cured or waived; or
- certain events in bankruptcy, insolvency or reorganization of Brown & Brown.
The holders of not less than a majority in outstanding principal amount of the
series of debt securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee of the series.
The trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the series may declare the principal due and payable
immediately upon an event of default. The holders of a majority in aggregate
outstanding principal amount of the series may annul the declaration and waive
the default if the default (other than the non-payment of the principal of the
series which has become due solely by the acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the trustee of the
series.
The holders of a majority in outstanding principal amount of a series of debt
securities affected thereby may, on behalf of all the holders of the series of
debt securities, waive any past default, except a default in the payment of
principal or interest, unless the default has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the trustee of the series, or a default in
respect of a covenant or provision which under the related indenture cannot be
modified or amended without the consent of the holder of each outstanding debt
security of the series. We are required to file annually with the trustees a
certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to it under the indentures.
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In case an event of default shall occur and be continuing as to a series of debt
securities, the trustee of the series will have the right to declare the
principal of and the interest on the debt securities, and any other amounts
payable under the indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the debt securities.
No holder of any debt securities will have any right to institute any proceeding
with respect to the indenture or for any remedy thereunder, unless the holder
shall have previously given to the trustee written notice of a continuing event
of default, the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the series shall have made written request and
offered reasonable indemnity to the trustee of the series to institute the
proceeding as a trustee, and the trustee shall not have received from the
holders of a majority in aggregate principal amount of the outstanding debt
securities of the class a direction inconsistent with the request and shall have
failed to institute the proceeding within 60 days. However, these limitations do
not apply to a suit instituted by a holder of a debt security for enforcement of
payment of the principal or interest on the debt security on or after the
respective due dates expressed in the debt security.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
Unless otherwise indicated in the applicable prospectus supplement, the
indentures will provide that we will not consolidate with or merge into any
other person or entity or sell, assign, convey, transfer or lease its properties
and assets substantially as an entirety to any person or entity unless:
- either we are the continuing corporation, or any successor or purchaser is a
corporation, partnership, or trust or other entity organized under the laws of
the United States of America, any State thereof or the District of Columbia, and
the successor or purchaser expressly assumes our obligations on the debt
securities under a supplemental indenture; and
- immediately before and after giving effect thereto, no event of default, and
no event which, after notice or lapse of time or both, would become an event of
default, shall have happened and be continuing.
Unless otherwise indicated in the applicable prospectus supplement, the general
provisions of the indentures do not afford holders of the debt securities
protection in the event of a highly leveraged or other transaction involving us
that may adversely affect holders of the debt securities.
SATISFACTION AND DISCHARGE; DEFEASANCE
The indentures will provide that when, among other things, all debt securities
not previously delivered to the trustee for cancellation:
- have become due and payable; or
- will become due and payable at their stated maturity within one year, and we
deposit or cause to be deposited with the trustee, as trust funds in trust for
the purpose, an amount in the currency or currencies in which the debt
securities are payable sufficient to pay and discharge the entire indebtedness
on the debt securities not previously delivered to the trustee for cancellation,
for the principal, and premium, if any, and interest to the date of the deposit
or to the stated maturity, as the case may be;
then the indenture will cease to be of further effect (except as to our
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel described therein), and we
will be deemed to have satisfied and discharged the indenture.
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The indentures will provide that we may elect either:
- to terminate, and be deemed to have satisfied, all its obligations with
respect to any series of debt securities, except for the obligations to register
the transfer or exchange of such debt securities, to replace mutilated,
destroyed, lost or stolen debt securities, to maintain an office or agency in
respect of the debt securities, and to compensate and indemnify the trustee
("defeasance"); or
- to be released from its obligations with respect to certain covenants
("covenant defeasance") upon the deposit with the trustee, in trust for such
purpose, of money and/or U.S. Government Obligations, as defined in the
indenture, which through the payment of principal and interest in accordance
with the term used will provide money, in an amount sufficient (in the opinion
of a nationally recognized firm of independent public accountants) to pay the
principal of, interest on, and any other amounts payable in respect of the
outstanding debt securities of the series.
Such a trust may be established only if, among other things, we have delivered
to the trustee an opinion of counsel (as specified in the indenture) with regard
to certain matters, including an opinion to the effect that the holders of the
debt securities will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of the deposit and discharge, and will be subject to
U.S. federal income tax on the same amounts, in the same manner, and at the same
times as would have been the case if the deposit and defeasance or covenant
defeasance, as the case may be, had not occurred.
REDEMPTION
Unless otherwise indicated in the applicable prospectus supplement, debt
securities will not be subject to any sinking fund requirements.
Unless otherwise indicated in the applicable prospectus supplement, we may, at
our option, redeem the debt securities of any series in whole at any time or in
part from time to time, at the redemption price set forth in the applicable
prospectus supplement plus accrued and unpaid interest to the date fixed for
redemption, and debt securities in denominations larger than $1,000 may be
redeemed in part but only in integral multiples of $1,000. If the debt
securities of any series are so redeemable only on or after a specified date or
upon the satisfaction of additional conditions, the applicable prospectus
supplement will specify the date or describe the conditions.
We will mail notice of any redemption at least 30 days but not more than 60 days
before the redemption date to each holder of debt securities to be redeemed at
the holder's registered address. Unless we default in the payment of the
redemption price on and after the redemption date, interest shall cease to
accrue on the debt securities or portions thereof called for redemption.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable prospectus supplement, the debt
securities of any series may be convertible or exchangeable into other
securities. The specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at our option, in which case
the number of shares of other securities to be received by the holders of debt
securities would be calculated as of a time and in the manner stated in the
applicable prospectus supplement.
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CERTAIN COVENANTS
The indentures will contain certain covenants regarding, among other matters,
corporate existence, payment of taxes and reports to holders of debt securities.
If and to the extent indicated in the applicable prospectus supplement, these
covenants may be removed or additional covenants added with respect to any
series of debt securities.
GOVERNING LAW
The indentures and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEES
Each trustee shall have and be subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act of
1939, as amended. Subject to these provisions, each trustee is under no
obligation to exercise any of the powers vested in it by the indenture at the
request of any holder of the debt securities, unless offered reasonable
indemnity by the holder against the costs, expenses and liabilities which might
be incurred thereby. Each trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
We are authorized to issue 140,000,000 shares of common stock, $0.10 par value
per share. Each holder of our common stock is entitled to one vote for each
share held. Shareholders do not have the right to cumulate their votes in
elections of directors. Accordingly, directors are elected by a plurality of the
votes cast by the shares entitled to vote.
Our common stock is listed on The New York Stock Exchange. Holders of our common
stock will be entitled to dividends on a pro rata basis upon declaration of
dividends by our board of directors. Dividends will be payable only out of
unreserved and unrestricted surplus that is legally available for the payment of
dividends. Dividends that may be declared on our common stock will be paid in an
equal amount to the holder of each share. No pre-emptive rights are conferred
upon the holders of such stock and there are no liquidation or conversion
rights. There are no redemption or sinking fund provisions and there is no
liability to further calls or to assessments by us. Any determination to declare
or pay dividends in the future will be at the discretion of our board of
directors and will depend on our results of operations, financial condition,
contractual or legal restrictions and other factors deemed relevant by our board
of directors. Upon our liquidation, holders of our common stock will be entitled
to a pro rata distribution of our assets, after payment of all amounts owed to
our creditors.
RIGHTS PLAN
Effective July 29, 1999, our board of directors adopted a shareholder rights
plan. To implement the rights plan, our board of directors declared a dividend
distribution of one right for each outstanding share of common stock, to
shareholders of record at the close of business on
20
August 11, 1999, and for each share of common stock issued between August 11,
1999 and the distribution date. When exercisable, each right will entitle the
registered holder to purchase from us one share of common stock at a purchase
price of $100.00, subject to adjustment. The description and terms of the rights
are set forth in a rights agreement between us and First Union National Bank, a
national banking institution, as rights agent, dated as of July 30, 1999, a copy
of which is attached as Exhibit 4.1 to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on August 2, 1999. This summary
description does not purport to be complete and is qualified in its entirety by
reference to the rights agreement.
Common stock certificates representing right. Initially, the rights will be
evidenced by Brown & Brown common stock certificates representing shares then
outstanding, and no separate certificates for the rights will be distributed.
The rights will be exercisable and transferable apart from our common stock and
a distribution date will occur upon the earliest of (1) 10 days following the
stock acquisition date, which is 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 our outstanding
common stock, (2) 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 our outstanding common stock, or (3) immediately after
our board of directors declares any individual or entity, owning at least 10% of
our 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, (1) the rights will be evidenced by Brown & Brown
common stock certificates and will be transferred with and only with such common
stock certificates, (2) new common stock certificates issued after August 11,
1999 will contain a notation incorporating the rights agreement by reference,
and (3) 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.
Issuance of rights certificates. As soon as practicable following the
distribution date, separate certificates representing only rights shall be
mailed to the holders of record of our common stock as of the close of business
on the distribution date, and such separate rights certificates alone shall
represent such rights from and after the distribution date. Except as otherwise
determined by our board of directors, only shares of our common stock issued
before the distribution date will be issued with rights.
Expiration of rights. The rights are not exercisable until the distribution date
and will expire at the close of business on July 30, 2009, unless earlier
redeemed or exchanged by us as described below.
Exercise of 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 our common stock (except pursuant to an offer for all
outstanding shares of our common stock determined by our board of directors to
be fair to and otherwise in the best interests of us and our shareholders), or
our 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 then-outstanding
shares of our 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 our common stock (or, in certain
circumstances, cash, property, or other securities of Brown & Brown 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 either 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
21
the event set forth above until such time as the rights are no longer redeemable
by us, as described below. Further, rights generally are exercisable only after
the effectiveness of a registration statement covering the underlying shares of
our common stock under the Securities Act of 1933, as amended. J. Hyatt Brown,
Chairman of the Board, President, and Chief Executive Officer of Brown & Brown,
is classified as an exempt person in the rights agreement.
For example, at an exercise price of $100.00, 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 $200.00 worth of common stock (or other consideration, as noted above)
for $100.00. Assuming that the common stock had a per-share market value of
$50.00 at such time, the holder of each valid right would be entitled to
purchase four shares of our common stock at $100.00.
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, (1) we are acquired in a merger or other business combination
transaction in which we are not the surviving corporation (other than pursuant
to a tender offer or exchange offer for all outstanding shares of common stock
determined by our board of directors to be fair to and otherwise in the best
interests of us and our shareholders), or (2) more than 50% of our assets or
earning power is sold or transferred (each of such events is referred to as a
"Section 13 Event"), then each holder of a right (except rights that have been
previously 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.
Adjustments to prevent dilution. 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
(1) in the event of a stock dividend on, or a subdivision, combination, or
reclassification of, the common stock, (2) 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 (3)
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).
With certain exceptions, no adjustment in the purchase price will be required
until cumulative adjustments amount to at least 1% 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.
Redemption of rights. At any time until 10 days following the stock acquisition
date (or such later date as our board of directors may determine), we 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 our
board of directors. Thereafter, our 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 our common stock in a transaction or series of
transactions not involving us and there are no other acquiring persons.
Immediately upon the action of our 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.
22
Exchange. 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 our
common stock, our board of directors 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 our common stock per right (subject to
adjustment).
Three-year independent director evaluation provision. The rights agreement
includes a three-year Independent Director Evaluation provision. Under this
provision, our 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.
No shareholder rights before exercise. Until a right is exercised, the holder
thereof, as such, will have no rights as a shareholder of Brown & Brown,
including the right to vote or to receive dividends. While the distribution of
the rights will not be taxable to shareholders or to us, shareholders may,
depending upon the circumstances, recognize taxable income if the rights become
exercisable for common stock (or other consideration) or for common stock of an
acquiring company as set forth above.
Amendment of rights agreement. Any of the provisions of the rights agreement may
be amended by our board of directors before the distribution date. After the
distribution date, the provisions of the rights agreement may be amended by our
board of directors to cure any ambiguity, to correct inaccuracies and
inconsistencies, 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.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities or common stock.
Warrants may be issued independently or together with any other securities
offered by any prospectus supplement and may be attached to or separate from
such securities. Each series of warrants will be issued under a separate warrant
agreement to be entered into between Brown & Brown and a warrant agent specified
in the applicable prospectus supplement. The warrant agent will act solely as an
agent of Brown & Brown in connection with the warrants of such series and will
not assume any obligation or relationship of agency or trust for or with any
holders of the warrants. Further terms of the warrants and the applicable
warrant agreements will be set forth in the applicable prospectus supplement.
Copies of the form of warrant agreement and warrant will be filed as exhibits to
or incorporated by reference in the registration statement of which this
prospectus forms a part, and the following summary is qualified in its entirety
by reference to such exhibits.
The applicable prospectus supplement will describe the terms of the warrants,
including, where applicable, the following:
- the title of the warrants;
- the aggregate number of warrants;
- the price or prices at which warrants will be issued;
- the designation, terms and number of securities purchasable upon exercise of
warrants;
23
- the designation and terms of the securities, if any, with which warrants are
issued and the number of warrants issued with each security;
- the date, if any, on and after which warrants and the related securities will
be separately transferable;
- the price at which each security purchasable upon exercise of warrants may be
purchased;
- the date on which the right to exercise the warrants shall commence and the
date on which that right shall expire;
- the minimum or maximum amount of warrants which may be exercised at any one
time;
- information with respect to book-entry procedures, if any; and
- any other terms of the warrants, including terms, procedures and limitations
relating to the exchange and exercise of the warrants.
24
PLAN OF DISTRIBUTION
We may offer and sell the securities to or through underwriting syndicates
represented by managing underwriters, to or through underwriters without a
syndicate or through dealers or agents. The underwriters, dealers or agents may
include J.P. Morgan Securities Inc. and SunTrust Capital Markets, Inc. The
prospectus supplement with respect to the offered securities will set forth the
terms of the offering, including the following:
- the name or names of any underwriters, dealers or agents;
- the purchase price and the proceeds we will receive from the sale;
- any underwriting discounts, agency fees and other items constituting
underwriters' or agents' compensation; and
- the initial public offering price and any discounts or concessions allowed,
re-allowed or paid to dealers.
If any underwriters are involved in the offer and sale, the securities will be
acquired by the underwriters and may be resold by them, either at a fixed public
offering price established at the time of offering or from time to time in one
or more negotiated transactions or otherwise, at prices related to prevailing
market prices determined at the time of sale. Unless otherwise set forth in the
applicable prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the securities described in the
prospectus supplement if any are purchased. Any initial public offering price
and any discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
We may offer and sell the securities directly or through an agent or agents
designated by us from time to time. An agent may sell securities it has
purchased from us as principal to other dealers for resale to investors and
other purchasers, and may reallow all or any portion of the discount received in
connection with the purchase from us to the dealers. After the initial offering
of the securities, the offering price (in the case of securities to be resold at
a fixed offering price), the concession and the discount may be changed. Any
agent participating in the distribution of the securities may be deemed to be an
"underwriter," as that term is defined in the Securities Act of 1933, as
amended, of the securities so offered and sold.
If any underwriters are involved in the offer and sale, they will be permitted
to engage in transactions that maintain or otherwise affect the price of the
securities. These transactions may include over-allotment transactions,
purchases to cover "short" positions created by the underwriter in connection
with the offering, and the imposition of penalty bids. If an underwriter creates
a short position in the securities in connection with the offering, i.e., if it
sells more securities than set forth on the cover page of the applicable
prospectus supplement, the underwriter may reduce that short position by
purchasing the securities in the open market. In general, purchases of a
security to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases. As noted above,
underwriters may also choose to impose penalty bids on other underwriters and/or
selling group members. This means that if underwriters purchase securities on
the open market to reduce their short position or to stabilize the price of the
securities, they may reclaim the amount of the selling concession from those
underwriters and/or selling group members who sold such securities as part of
the offering.
Neither we nor any underwriter make any representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the securities. In addition, neither we nor any underwriter
make any representation that such
25
underwriter will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
Underwriters, dealers and agents may be entitled, under agreements entered into
with us, to indemnification by us against some liabilities, including
liabilities under the Securities Act of 1933, as amended.
The place and time of delivery for the securities in respect of which this
prospectus is delivered will be set forth in the applicable prospectus
supplement if appropriate.
Unless otherwise indicated in the prospectus supplement, each series of offered
securities will be a new issue of securities for which there currently is no
market, other than the common stock, which is listed on The New York Stock
Exchange. Any underwriters to whom securities are sold for public offering and
sale may make a market in such series of securities as permitted by applicable
laws and regulations, but such underwriters will not be obligated to do so, and
any such market making may be discontinued at any time without notice.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the securities
Underwriters, agents and dealers may engage in transactions with or perform
services, including various investment banking and other services, for us and/or
any of our affiliates in the ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the validity of the securities offered
hereby will be passed upon for Brown & Brown by Holland & Knight LLP, Tampa,
Florida, and for any underwriters, dealers or agents by counsel named in the
applicable prospectus supplement.
EXPERTS
The financial statements and schedule of Brown & Brown incorporated by reference
in this prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent certified public accountants, as indicated
in their reports with respect thereto, and are incorporated by reference herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said reports.
The financial statements of Riedman Insurance (a division of Riedman
Corporation) incorporated by reference in this prospectus and elsewhere in the
registration statement have been audited by KPMG LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the Commission. You may read and copy any materials we file
with the Commission at the Commission's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the Commission at
1-800-SEC-0330 for more information on its public reference rooms. The
Commission also maintains an Internet Website at http://www.sec.gov that
contains reports, proxy
26
and information statements, and other information regarding issuers that file
electronically with the Commission.
We have filed a registration statement on Form S-3 to register with the
Commission the securities described herein. This prospectus is a part of that
registration statement and constitutes a prospectus of Brown & Brown. As allowed
by Commission rules, this prospectus does not contain all the information that
can be found in the registration statement or the exhibits to the registration
statement.
INCORPORATION BY REFERENCE
The Commission allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus, and later information that we file
with the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, until we sell all of the
securities, or after the date of this initial registration statement and before
the effectiveness of this registration statement. The documents incorporated by
reference are:
- Annual Report on Form 10-K for the year ended December 31, 2000 (including
information specifically incorporated by reference into our Form 10-K from our
definitive Proxy Statement) filed with the Commission on March 14, 2001.
- Amendment to Annual Report on Form 10-K/A, filed with the Commission on March
27, 2001.
- Current Report on Form 8-K, filed with the Commission on January 18, 2001.
- Amendment to Current Report on Form 8-K/A, filed with the Commission on March
20, 2001.
- Amendment No. 2 to Current Report on Form 8-K/A, filed with the Commission on
March 23, 2001.
- Current Report on Form 8-K, filed with the Commission on October 12, 2001.
- Current Report on Form 8-K, filed with the Commission on October 24, 2001.
- Current Report on Form 8-K, filed with the Commission on November 6, 2001.
- Current Report on Form 8-K, filed with the Commission on December 12, 2001.
- Quarterly Report on Form 10-Q for the three-month period ended March 31, 2001,
filed with the Commission on May 15, 2001.
- Quarterly Report on Form 10-Q for the six-month period ended June 30, 2001,
filed with the Commission on August 8, 2001.
- Quarterly Report on Form 10-Q for the nine-month period ended September 30,
2001, filed with the Commission on November 14, 2001.
- Registration Statement on Form 8-A12B, filed with the Commission on November
17, 1997.
- All documents subsequently filed by Brown & Brown pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, shall be
deemed to be incorporated by reference in this prospectus and to be part hereof
from the date of filing of such documents.
27
- All documents filed by Brown & Brown after the date of filing the initial
registration statement on Form S-3, of which this prospectus is a part, and
prior to the effectiveness of such registration statement pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
shall be deemed to be incorporated by reference into this prospectus and to be
part hereof from the date of filing of such documents.
On request we will provide at no cost to each person, including any beneficial
owner who receives a copy of this prospectus, a copy of any or all of the
documents incorporated in this prospectus by reference. We will not provide
exhibits to any such documents, however, unless such exhibits are specifically
incorporated by reference into those documents. Written or telephone requests
for such copies should be addressed to Brown & Brown's executive offices located
at 401 East Jackson Street, Suite 1700, Tampa, Florida 33602, Attention:
Corporate Secretary, telephone number (813) 222-4100.
28
$250,000,000
BROWN & BROWN, INC.
DEBT SECURITIES, COMMON STOCK
AND WARRANTS
PROSPECTUS
,