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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
/ X / SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
/ / SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-10356.
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CRAWFORD & COMPANY
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(Exact name of Registrant as specified in its charter)
Georgia 58-0506554
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(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
5620 Glenridge Dr., N.E., Atlanta, Georgia 30342
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 256-0830
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Class A Common Stock - $1.00 Par Value New York Stock Exchange
Class B Common Stock - $1.00 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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The aggregate market value of the voting stock held by nonaffiliates* of the
Registrant was $155,460,000 as of February 28, 1997, based upon the closing
price as reported on NYSE on such date.
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*All shareholders, other than Directors, Executive Officers, and 10% beneficial
owners.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The number of shares outstanding of each of the Registrant's classes of common
stock, as of February 28, 1997 was:
Class A Common Stock - $1.00 Par Value - 16,203,576 Shares
Class B Common Stock - $1.00 Par Value - 17,150,624 Shares
Documents incorporated by reference:
(1) Annual Report to Shareholders for the Year Ended December 31, 1996, Part I
- - Item 2; Part II - Items 5, 6, 7 and 8; Part IV - Item 14, and
(2) Proxy Statement for the Annual Meeting of Shareholders to be held April 22,
1997, Part III -Items 10, 11, 12, and 13.
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PART I
ITEM 1. BUSINESS
Crawford & Company (the "Registrant") is a worldwide diversified service firm
which provides claims adjusting and risk management information services to
insurance companies, self-insured corporations and governmental entities.
The Registrant is not owned by or affiliated with any insurance company.
DESCRIPTION OF SERVICES
The percentages of consolidated revenues derived from each of the Registrant's
principal service categories are shown in the following schedule:
Years Ended December 31,
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1996 1995 1994
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Domestic Operations 87.6% 86.1% 92.1%
International Operations 12.4% 13.9% 7.9%
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100.0% 100.0% 100.0%
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DOMESTIC OPERATIONS. Domestic claims services are provided by the Registrant
to two different markets. Insurance companies, which represent the major
source of revenues, customarily manage their own claims administration
function, but require various partial services which the Registrant provides.
The Registrant also services clients which are self-insured or commercially
insured through alternative loss funding methods, and provides them the more
complete range of services they typically require, including the supervision of
field locations, information services and medical cost- containment.
The major elements of domestic claims administration services (which include
the partial services required by most property and casualty insurance company
clients as well as the expanded services required by self-insured clients) are
as follows:
- Initial Reporting - the Registrant's XPressLinkSM service
provides 24-hour receipt, acknowledgement, and distribution of
claims information through Electronic Data Interchange,
customized reporting and referral programs, call center
reporting, and facsimile receipt and distribution.
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- Investigation - the development of information necessary to
determine the cause and origin of loss.
- Evaluation - the determination of the extent and value of
damage incurred and the coverage, liability and compensability
relating to the parties involved.
- Disposition - the resolution of the claim, whether by
negotiation and settlement, by denial or by other resolution.
Expanded services provided primarily, but not exclusively, to Registrant's
self-insured clients include the following:
- Information Services - provides reports of detailed claims
information of both a statistical and financial nature to
self-insured corporations, governmental entities and insurance
companies. The Registrant's basic information system is
SISDATSM, but the registrant also offers SISDAT+SM, a risk
management information system which integrates the basic
information provided by the SISDATSM system with the on-line
inquiry and flexible reporting capabilities of Risk Sciences
Group's SIGMASM system (discussed below).
- Management - the coordination and supervision of all parties
involved in the claims settlement process, including the
adjusting personnel directly involved in handling the claim.
Typically, this management function is performed by an
independent administrative unit within the Registrant which is
not involved in the initial investigation of a claim.
- Auditing Services - the Registrant's Sentinel Medical Review
System(R), a bill audit program, utilizes proprietary software
developed by the Registrant, to assist clients in controlling
medical costs associated with workers compensation claims by
comparing fees charged by health care providers with maximum
fee schedules prescribed by state workers compensation
regulations as well as usual and customary charges in non-fee
schedule states. The Registrant also performs hospital bill
audits related to workers compensation claims.
- Medical Review Services - provides a broad range of cost
containment and utilization review services to insurance
companies, service organizations and self-insured corporations
involved in employee group health insurance plans. These
services, which are designed to both control the cost and
enhance the efficient delivery of medical benefits, include
pre-admission review of hospitalizations, second surgical
opinions, concurrent hospital utilization review, discharge
planning, and the Early Medical Management InterventionSM
(EMMISM) program which provides services to actively control
workers compensation medical and indemnity costs at the onset
of a claim
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- through nurse screening for severity as claims are received
from XPressLink SM or directly from the client. The
Registrant also provides a workers compensation PPO network to
its self-insured clients.
- Vocational Services - provides vocational evaluation in order
to assess an injured employee's potential to return to work.
These services involve diagnostic testing and occupational,
personal and motivational counseling of the employee. The
Crawford Occupational Re-EmploymentSM (CORESM) program enlists
the services of our vocational, medical and employment
consultants to assist in the re-employment and preparation of
injured individuals to return to work.
- Medical Case Management Services - are typically provided by
rehabilitation nurses who work closely with attending
physicians and other medical personnel in order to expedite
the injured person's physical recovery and rehabilitation and
maximize the opportunity for the person to return to work.
These services also involve coordinating and monitoring
treatment plans and related costs to insure that such
treatment is appropriate and necessary in the circumstances.
- Elder Care - offers a full menu of elder care service
including comprehensive on-site assessments, complete care
coordination and on-going care monitoring. These services are
provided through experienced health care professionals with an
insight to local quality care needs and offers these services
in Florida and New York to senior citizens and their children,
attorneys and trust officers.
The claims administration services described above are provided to clients for
a variety of different referral assignments which generally are classified as
to the underlying insured risk categories used by insurance companies. The
major categories are described below:
- Automobile - relates to all types of losses involving use of
the automobile. Such losses include bodily injury, physical
damage, medical payments, collision, fire, theft and
comprehensive liability.
- Property - relates to losses caused by physical damage to
commercial or residential real property and certain types of
personal property. Such losses include those arising from
fire, windstorm, or hail damage to commercial and residential
property, burglary, robbery or theft of personal property and
damage to property under inland marine coverage.
- Workers Compensation - relates to claims arising under state
and federal workers compensation laws.
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- Public Liability - relates to a wide range of non-automobile
liability claims such as product liability, owners, landlords
and tenants' liabilities and comprehensive general liability.
The Registrant provides quick response catastrophe teams for support to clients
by servicing insurance claims following hurricanes, tornados, earthquakes,
floods and other natural disasters. In addition, the Registrant provides
catastrophic liability management services, including class action litigation
support, cost containment, claims management systems development, and
contingency planning, for clients faced with product liability, explosion, oil
spill, chemical release and other man-made disasters.
ADDITIONAL RISK MANAGEMENT AND OTHER SERVICES. The Registrant provides the
following additional risk management and other related services, which support
and supplement the claims and casualty risk management services offered:
- RISK CONTROL SERVICES - involves the identification of factors
which cause loss and the development of procedures and
techniques designed to prevent, minimize or control these
losses. These services are provided by risk control
consultants, who develop complete programs for the client
which emphasize preventative measures to reduce the costs of
losses. Risk control consultants also perform risk
assessments of larger, more complicated risks for the
insurance industry. Additionally, through Crawford/FPE the
Registrant provides fire protection consulting and system
design, industrial hygiene, and boiler and machinery
consulting. The Registrant sold its risk control services
business in January, 1997 and will no longer offer these
services.
- RISK SCIENCES GROUP, INC. - is a software applications and
consulting firm which is a wholly-owned subsidiary of the
Registrant. Risk Sciences Group (RSG) provides customized
computer-based information systems and analytical forecasting
services to the risk management and insurance industry. It
manages the Registrant's basic information systems SISDATSM
and SISDAT+SM, and has developed the SIGMASM system, an
on-line risk management information system which supports
multiple sources of claims, locations, risk control, medical,
litigation, exposure and insurance policy information. With
its staff of approximately 114 employees, RSG serves a variety
of clients with specialized computer programs for long-term
risk management planning; data and systems integration;
development of historical claims/loss databases; claims
administration and management; regulatory reporting; insurance
and risk management cost control; and actuarial and financial
analysis required for loss forecasting, reserve estimation and
financial reporting.
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- EDUCATION SERVICES - are provided by the Registrant's Learning
& Resource Center, whose principal objective is to provide
technical and management training to the Registrant's
employees in order to assure consistent quality in the
delivery of services to clients. In addition, the Learning &
Resource Center markets its classrooms and correspondence
courses in many risk management subjects to outside clients.
INTERNATIONAL OPERATIONS. International operations provided 12.4% of the
Registrant's 1996 revenues. Through its Canadian subsidiary, Crawford &
Company Insurance Adjusters Ltd., the Registrant provides in Canada generally
the same array of claims, risk management and disability management services as
the Registrant provides to the United States insurance and self-insured
marketplace. In December 1990, the Registrant acquired Graham Miller Group
Limited ("Graham Miller"), a London-based international loss adjusting firm.
Graham Miller provides loss adjusting services to international insurance
underwriters, including Lloyds of London, through owned or affiliated offices
in approximately 40 countries. In April of 1994, Crawford & Company Insurance
Adjusters Ltd. acquired all the outstanding capital stock of Finnamore &
Partners Limited ("Finnamore"), a Canadian specialty loss adjusting firm
headquartered in Halifax, Nova Scotia. Effective January 1, 1996, Finnamore
was amalgamated with Crawford & Company Insurance Adjusters Ltd. In September
of 1994, a subsidiary of the Registrant acquired all of the outstanding stock
of Arnold & Green Ltd. ("A & G"), a United Kingdom based liability adjusting
firm headquartered in Stockport, Cheshire, which handles claims in the fields
of employers' liability, public liability, products and product guaranties, as
well as professional indemnity errors and omissions and contractors' all risk
loss exposures. In November of 1994, subsidiaries of the Registrant acquired
the Brocklehurst Group ("Brocklehurst"), consisting primarily of a United
Kingdom based chartered loss adjusting firm specializing in property, aviation,
marine, agriculture and oil and energy exposures. In 1995 the Registrant
consolidated Graham Miller's existing United Kingdom branches with those of
Brocklehurst under the names "Crawford Brocklehurst" and "Brocklehurst Miller".
A & G continued to operate separately in the United Kingdom under the name
"Crawford Arnold & Green". Outside of the United Kingdom and North America,
the Registrant did business as "Crawford Graham Miller".
In December, 1996, an English subsidiary of the Registrant acquired all of the
non-United States operations of the Thomas Howell Group, a London, England
based international loss adjusting enterprise owned by a subsidiary of Swiss
Reinsurance Company of Zurich, Switzerland, which received stock in
Registrant's subsidiary as consideration for the transfer. Concurrently, all
of the Registrant's non-U.S. subsidiaries were transferred to that same English
subsidiary, in which Registrant now has a sixty percent (60%) interest and
Swiss Reinsurance Company's subsidiary has a forty percent (40%) interest.
Non-North American revenues and expenses were reported on a three-month delayed
basis until 1995. Such revenues and expenses are now reported on a two-month
delayed basis and, accordingly, the Registrant's December 31, 1996 and 1995
consolidated financial statements reflect the non-North American financial
position as of October 31, 1996 and 1995 and the results of non-North American
operations and cash flows for the 12-month period ended October 31, 1996, the
13-month period ended October 31, 1995, and the 12-month period ended September
30, 1994. This
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change had no material effect on the Registrant's financial position, results
of operations, or cash flows. Because of the deferred reporting of non-North
American operations, the merger of the international operations of the
Registrant with those of Thomas Howell Group is not reflected in the
Registrant's December 31, 1996 consolidated financial statements.
The major services offered by the Registrant through its U.K. headquartered
international operations are listed below:
- Property and Casualty - provides loss adjusting services for
property, general liability, professional indemnity for
directors and officers, product liability and medical
malpractice.
- Oil, Energy & Engineering - provides loss adjusting for oil,
gas, petrochemicals, other energy risks, utilities and mining
industries, as well as marine and off-shore risks.
- Environmental Pollution - provides cost-containment and claims
management services with respect to environmental related
losses.
- Construction - provides loss adjusting services under
contractors' all risk, engineering all risk, and contractors'
liability coverages. Additionally evaluates machinery
breakdown claims and provides peripheral services including
plant valuation and loss prevention surveys.
- Catastrophe - organizes major loss teams to provide claims
management and cost containment services through proprietary
information systems.
- Marine - provides loss adjusting services for freight carriers
liability, loss investigations, recoveries, salvage disposal,
yacht and small craft, cargo, container, discharge, draft,
general average, load, trailer and on/off live surveys, ship
repairer liability and port stevedore liability.
- Specie and Fine Art - provides loss adjusting services under
fine art dealers' block and jewelry and furriers' block
policies.
- Entertainment Industry - provides a broad range of loss
adjusting services for television, commercial and educational
film production, and theater and live events.
- Aviation - manages salvage removal and sale and provides loss
adjusting services for hull related risks, as well as cargo
and legal liability, hangar and airport owners'/operators'
liability policies.
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- Banking, Financial and Political Risks - performs loss
adjusting functions under bankers blanket bond, political
risk, and financial contingency policies.
- Livestock - performs loss adjusting on bloodstock,
liability/equestrian activity.
- Security Consultancy - performs loss prevention and bank
surveys and adjusts cash-in- transit losses.
- Reinsurance - provides external audits, portfolio analyses,
and management and marketing research. Additionally provides
underwriting review, cash control and management of
discontinued operations.
During 1994, the Registrant opened a health care management services office in
London to provide medical and vocational case management services to the
employer liability market and to provide specialized return to work and expert
testimony services in the auto liability market. It is hoped these services
will expand in the coming years, both within and outside of the United Kingdom.
COMPETITION, EMPLOYMENT AND OTHER FACTORS
The claims services markets, both domestically and internationally, are highly
competitive and are composed of a large number of companies of varying size and
scope of services. These include large insurance companies and insurance
brokerage firms which, in addition to their primary services of insurance
underwriting or insurance brokerage, also provide services such as claims
administration, health and disability management, and risk management
information systems, which compete with services offered by the Registrant.
Many of these companies are larger than the Registrant in terms of annual
revenues and total assets; however, based on experience in the market, the
Registrant believes that few, if any, such organizations derive revenues from
independent claims administration activities which equal those of the
Registrant.
The majority of property and casualty insurance companies maintain their own
staffs of salaried adjusters, with field adjusters located in those areas in
which the volume of claims justifies maintaining a salaried staff. These
companies utilize independent adjusters to service claims when the volume of
claims exceeds the capacity of their staffs and when claims arise in areas not
serviced by staff adjusters. The volume of property claim assignments referred
to the Registrant fluctuates primarily depending on the occurrence of severe
weather.
The United States insurance industry generally uses internal adjusting
personnel to make automobile claims adjustments by telephone and assigns the
limited function of appraising physical damage to outside service
organizations, such as the Registrant. The Registrant believes that such
limited assignments from automobile insurers may continue, reflecting a
perception by insurance companies
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that they can reduce adjusting expenses in amounts greater than the higher
losses associated with telephone adjusting. In certain instances, however,
insurers have attempted to reduce the fixed cost of their claims departments by
increasing outside assignments to independent firms such as the Registrant.
As insurance premiums have increased and corporate risk management personnel
have become more aware of alternative methods of financing losses, there has
been a trend toward higher retention levels of risk insurance or implementation
of self-insurance programs by large corporations and governmental
instrumentalities. These programs generally utilize an insurance company which
writes specialized policies that permit each client to select its own level of
risk retention, as well as permit certain risk management services to be
provided to the client by service companies independent of the insurance
company. In addition to providing full claims administration services for such
clients, the Registrant generally provides statistical data such as loss
experience analysis. The services are usually the subject of a contractual
agreement with the specialty insurance company or the self-insured client that
specifies the claims to be administered by the Registrant and the fee to be
paid for its services (generally a fixed rate per assignment within the various
risk classifications).
In addition to the large insurance companies and insurance brokerage firms, the
Registrant competes with a great number of smaller local and regional risk
management services firms located throughout the United States and
internationally. Many of these smaller firms have rate structures that are
lower than the Registrant's, but do not offer the broad spectrum of risk
management services which the Registrant provides and, although such firms may
secure business which has a local or regional source, the Registrant believes
its broader scope of services and its large number of geographically dispersed
offices provide it with a competitive advantage in securing business from
national and international clients.
The Registrant has approximately 530 offices which provide some or all of
Registrant's services in the fifty states of the United States, and through
subsidiaries in nine provinces of Canada and Puerto Rico. Internationally, the
Registrant and its affiliates have 180 offices serving approximately 49
non-North American countries.
The Registrant has branch profit-sharing agreements with most of its branch
managers in the United States under which those managers participate in the
profits of their respective branches. These agreements provide a formula for
the determination of branch office profits and specify the managers'
participation percentage, which is generally 40%.
During 1996, revenues derived from services provided to American International
Group and its subsidiaries (AIG) approximated 9.5% of total revenues. During
1995 and 1994, revenues derived from services provided by the Registrant to AIG
were 12% and 14% of total revenue in each of such years. Revenues derived from
AIG, an insurance holding company, principally relate to claims administration
services provided under the high-risk retention programs described above. In
addition, the Registrant also provides disability management services and other
risk management services to AIG. The Registrant believes that its
relationships with all its customers, including AIG, are good.
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At December 31, 1996, the total number of full-time employees was 6,844
compared with 7,189 at December 31, 1995. The Registrant, through its Learning
& Resource Center, provides many of its employees with formal classroom
training in basic and advanced skills relating to claims administration and
disability management services. Such training is generally provided at the
Registrant's education facility in Atlanta, Georgia, although much of the
material is also available through correspondence courses. In many cases,
employees are required to complete these or other professional courses in order
to qualify for promotion from their existing positions.
In addition to this technical training, the Registrant also provides ongoing
professional education for certain of its management personnel on general
management, marketing and sales topics. These programs involve both in-house
and external resources.
ITEM 2. PROPERTIES
The Registrant's home office and educational facilities are owned by the
Registrant and located in Atlanta, Georgia. As of December 31, 1996, the
Registrant leased approximately 594 office locations under leases with
remaining terms ranging from a few months to ten years. The remainder of its
office locations are occupied under various short-term rental arrangements.
The Registrant also leases certain computer equipment. See Note 6 of Notes to
Consolidated Financial Statements included in the Registrant's 1996 Annual
Report to Shareholders filed herewith as Exhibit 13.1, which notes are
incorporated herein by reference.
The Registrant owns or leases approximately 2,553 automobiles which are used by
the Registrant's field adjusters and certain of its management personnel in the
United States and Canada. Additional vehicles are owned or leased by the
Registrant's foreign subsidiaries for use by field and management personnel.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of the claims administration services business, the
Registrant is named as a defendant in suits by insureds or claimants contesting
decisions by the Registrant or its clients with respect to the settlement of
claims. Additionally, clients of the Registrant have brought actions for
indemnification on the basis of alleged negligence on the part of the
Registrant, its agents or employees in rendering service to clients. The
majority of these claims are of the type covered by insurance maintained by the
Registrant; however, the Registrant is self-insured for the deductibles under
its various insurance coverages. In the opinion of the Registrant, adequate
reserves have been provided for such self-insured risks.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to security holders for a vote during the fourth
quarter of 1996.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following are the names, positions held, and ages of each of the executive
officers of the Registrant:
Name Office Age
---- ------ ---
D. A. Smith Chairman, President and Chief Executive Officer 47
A. L. Meyers, Jr. President - Claims Services 59
J. R. Bryant President - Risk Management Services 46
D. R. Chapman Executive Vice President - Finance 57
J. F. Osten Senior Vice President - General Counsel & Corporate Secretary 55
All of the above officers, except as indicated below, have been associated with
the Registrant in management capacities for more than five years and have held
the positions indicated in the above table for more than five years.
Mr. Smith was appointed to his present position effective January 1, 1996.
Prior to January 1, 1996 and since November 1, 1994, he was President and Chief
Operating Officer. From August 1, 1992 to November 1, 1994, Mr. Smith was
President - Claims Services. From January 1, 1991 to August 1, 1992, Mr. Smith
was President of Crawford & Company International, Inc., and he was Vice
President, and later, Senior Vice President with responsibility for the
Registrant's Midwest Region from January 1, 1986 to January, 1991.
Mr. Meyers was appointed to his present position effective September 1, 1995.
He had previously retired from the Company in April 1994, after having served
as General Manager of the Registrant's Fairfax, Virginia branch office since
1988. During the period between his retirement and appointment to his present
position he served as a consultant and operations supervisor for the
Registrant.
Mr. Bryant was appointed to his present position effective August 1, 1995.
Prior to August 1, 1995 and since November 1, 1994, he was President - Claims
Services. From January 1, 1993 to November 1, 1994, he was Vice President -
National Sales Manager and from March, 1989 to December, 1992 he was Regional
Director - RMS for the Registrant's Midwest Region becoming an Assistant Vice
President on July 1, 1990.
Officers of the Registrant are appointed annually by the Board of Directors.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The information required by this Item is included on pages 40-41 of the
Registrant's Annual Report to Shareholders for the year ended December 31, 1996
under the caption "Quarterly Financial Data" and is incorporated herein by
reference.
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ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is included on page 39 of the
Registrant's Annual Report to Shareholders for the year ended December 31,
1996, under the caption "Selected Financial Data" and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this Item is included on pages 18-22 of the
Registrant's Annual Report to Shareholders for the year ended December 31, 1996
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included on pages 23-41 of the
Registrant's Annual Report to Shareholders for the year ended December 31, 1996
under the captions "Consolidated Statements of Income", "Consolidated Balance
Sheets", "Consolidated Statements of Shareholders' Investment", "Consolidated
Statements of Cash Flows", "Notes to Consolidated Financial Statements", and
"Quarterly Financial Data", and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item is included on page 2 under the caption
"Nominee Information" of the Registrant's Proxy Statement for the Annual
Meeting of Shareholders to be held April 22, 1997, and is incorporated herein
by reference. For other information required by this Item, see "Executive
Officers of the Registrant" on page 11 herein.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is included on pages 4-9 under the
captions "Executive Compensation and Other Information", "Report of the Senior
Compensation and Stock Option Committee of the Board of Directors on Executive
Compensation", and "Compensation Committee Interlocks and Insider
Participation" and on page 15 under the caption "Five Year Comparative Stock
Performance Graph" of the Registrant's Proxy Statement for the Annual Meeting
of Shareholders to be held April 22, 1997, and is incorporated herein by
reference.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item is included on pages 10-14 under the
caption "Stock Ownership Information" of the Registrant's Proxy Statement for
the Annual Meeting of Shareholders to be held April 22, 1997, and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is included on page 14 under the caption
"Information with Respect to Certain Business Relationships" of the
Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held
April 22, 1997, and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
The Registrant's 1996 Annual Report to Shareholders contains
the consolidated balance sheets as of December 31, 1996 and
1995, the related consolidated statements of income,
shareholders' investment and cash flows for each of the three
years in the period ended December 31, 1996, and the related
report of Arthur Andersen LLP on the financial statements.
These financial statements and the report of Arthur Andersen
LLP are incorporated herein by reference and included as
Exhibit 13.1 to this Form 10-K. The financial statements,
incorporated by reference, include the following:
- Consolidated Balance Sheets -- December 31, 1996 and 1995
- Consolidated Statements of Income for the Years Ended
December 31, 1996, 1995 and 1994
- Consolidated Statements of Shareholders' Investment
for the Years Ended December 31, 1996, 1995 and 1994
- Consolidated Statements of Cash Flows for the Years
Ended December 31, 1996, 1995 and 1994
- Notes to Consolidated Financial Statements - December
31, 1996, 1995 and 1994
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The report of Touche Ross & Co. as of and for the year ended September
30, 1994 is incorporated by reference to pages 19-21 of Registrant's
Report on Form 10-K for the year ended December 31, 1994.
2. Financial Statement Schedule
- Report of Independent Public Accountants as to Schedule
Schedule
Number
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II Valuation and Qualifying Accounts for the Years Ended December 31, 1996, 1995 and 1994
Schedules I and III through V not listed above have been omitted because they are not
applicable.
3. Exhibits filed with this report.
Exhibit No. Document
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3.1 Restated Articles of Incorporation of the Registrant, as amended (incorporated by reference to
Exhibit 19.1 to the Registrant's quarterly report on Form 10-Q for the quarter ended June 30,
1991).
3.2 Restated By-laws of the Registrant, as amended.
10.1 * Crawford & Company Incentive Stock Option Plan (incorporated by reference to Exhibit 10(a) to
the Registrant's annual report on Form 10-K for the year ended December 31, 1981).
10.2 * Amendment to Crawford & Company Incentive Stock Option Plan (incorporated by reference to
Appendix D on page D-1 of Registrant's Proxy Statement for the Special Meeting of Shareholders
held on July 24, 1990).
10.3 * Crawford & Company 1987 Stock Option Plan (incorporated by reference to Exhibit 28(a) to the
Registration Statement on Form S-8, Registration No. 33-22595).
10.4 * Amendment to Crawford & Company 1987 Stock Option Plan (incorporated by reference to Appendix C
on page C-1 of the Registrant's Proxy Statement for the Special Meeting of Shareholders held on
July 24, 1990).
14
15
10.5 * Crawford & Company 1990 Stock Option Plan, as amended (incorporated by reference to Exhibit
10.5 to the Registrant's annual report on Form 10-K for the year ended December 31, 1992).
10.6 * Crawford & Company 1997 Key Employee Stock Option Plan (incorporated by reference to Appendix A
on page A-1 of the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be
held on April 22, 1997).
10.7 * Crawford & Company 1997 Non-Employee Director Stock Option Plan (incorporated by reference to
Appendix B on page B-1 of the Registrant's Proxy Statement for the Annual meeting of
Shareholders to be held on April 22, 1997).
10.8 * Crawford & Company Annual Incentive Compensation Plan (incorporated by reference to Exhibit
10.7 to the Registrant's annual report on Form 10-K for the year ended December 31, 1992).
10.9 * Crawford & Company 1996 Annual Incentive Compensation Plan (incorporated by reference to
Exhibit 10.7 to the Registrant's annual report on Form 10-K for the year ended December 31,
1995).
10.10 * Crawford & Company 1994-1996 Long-Term Executive Bonus Plan (incorporated by reference to
Exhibit 10.7 to the Registrant's annual report on Form 10-K for the year ended December 31,
1993).
10.11* Amended and Restated Supplemental Executive Retirement Plan (incorporated by reference to
Exhibit 10.9 to the Registrant's annual report on Form 10-K for the year ended December 31,
1993).
10.12 * Crawford & Company 1996 Employee Stock Purchase Plan (incorporated by reference to Appendix A
on page A-1 of Registrant's Proxy Statement for the Annual Meeting of Shareholders held on
April 18, 1996).
10.13 * Amended and Restated Crawford & Company Medical Reimbursement Plan (incorporated by reference
to Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the year ended December 31,
1994).
10.14 * Discretionary Allowance Plan (incorporated by reference to Exhibit 10.10 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1994).
10.15 * Deferred Compensation Plan (incorporated by reference to Exhibit 10.11 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1994).
11.1 Computation of Fully Diluted Earnings Per Share for the year ended December 31, 1996.
15
16
13.1 The Registrant's Annual Report to Shareholders for the year ended December 31, 1996 (only
those portions incorporated herein by reference).
21.1 Subsidiaries of Crawford & Company.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Deloitte & Touche.
24.1-9 Powers of Attorney.
27.1 Financial Data Schedule.
99.1 Touche Ross & Co. report as of and for the year ended September 30, 1994 (incorporated by
reference to pages 19-21 of Registrant's Report on Form 10-K for the year ended December 31,
1994).
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 601 of Regulation S-K.
(b) No reports on Form 8-K have been filed during the last quarter of the
year ended December 31, 1996.
(c) The Registrant has filed the Exhibits listed in Item 14(a)(3).
(d) Separate financial statements of Crawford & Company have been omitted
since it is primarily an operating company. All subsidiaries included
in the consolidated financial statements are wholly-owned.
16
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CRAWFORD & COMPANY
Date March 20, 1997 By /s/ D. A. Smith
--------------- ---------------------------------
D. A. SMITH, Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
NAME AND TITLE
--------------
Date March 20, 1997 /s/ D. A. Smith
--------------- ---------------------------------
D. A. SMITH, Chairman, President and Chief
Executive Officer (Principal Executive
Officer) and Director
Date March 20, 1997 /s/ D. R. Chapman
--------------- ---------------------------------
D. R. CHAPMAN, Executive Vice President-
Finance (Principal Financial Officer)
Date March 20, 1997 /s/ J. F. Giblin
--------------- ---------------------------------
J. F. GIBLIN, Vice President and Controller
(Principal Accounting Officer)
Date March 24, 1997 *
--------------- ---------------------------------
VIRGINIA C. CRAWFORD, Director
17
18
NAME AND TITLE
Date March 24, 1997 *
--------------- ---------------------------------
FORREST L. MINIX, Director
Date March 24, 1997 *
--------------- ---------------------------------
J. HICKS LANIER, Director
Date March 24, 1997 *
--------------- ---------------------------------
CHARLES FLATHER, Director
Date March 24, 1997 *
--------------- ---------------------------------
JESSE S. HALL, Director
Date March 24 , 1997 *
--------------- ---------------------------------
LINDA K. CRAWFORD, Director
Date March 24, 1997 *
--------------- ---------------------------------
JESSE C. CRAWFORD, Director
Date March 24, 1997 *
--------------- ---------------------------------
LARRY L. PRINCE, Director
Date March 24, 1997 *
--------------- ---------------------------------
JOHN A. WILLIAMS, Director
Date March 24 , 1997 By /s/ Judd F. Osten
--------------- ---------------------------------
JUDD F. OSTEN - As attorney-in-fact for the
Directors above whose name an asterisk
appears
18
19
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES
To Crawford & Company:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements included in Crawford & Company's annual
report to shareholders incorporated by reference in this Form 10-K and have
issued our report thereon dated January 28, 1997. Our audit was made for the
purposes of forming an opinion on those statements taken as a whole. We did
not audit the 1994 financial statements of certain foreign operations, which
statements reflect approximately 4% of consolidated revenues in 1994. The
schedule listed in Item 14(a)2 is the responsibility of the Company's
management, is presented for purposes of complying with the Securities and
Exchange Commission's rules, and is not part of the basic consolidated
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
January 28, 1997
19
20
SCHEDULE II
CRAWFORD & COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
----------------------------------------------------
(In Thousands of Dollars)
Col. A Col. B Col. C Col. D Col. E
------ ------ ------ ------ ------
Balance at Additions Additions Balance
Beginning of Charged to (Deductions) End of
Period Period Costs and from Period
Expenses Allowances(1)
1996
Deducted in
Consolidated balance
sheets from accounts
receivable $10,303 $1,025 $364 $11,692
------- ------- ------ -------
1995
Deducted in
Consolidated balance
sheets from accounts
receivable $10,220 $193 $(110) $10,303
------- ------- ------ -------
1994
Deducted in
Consolidated balance
sheets from accounts
receivable $10,128 $(1,373) $1,465 $10,220
------- ------- ------ -------
(1) Represents uncollectible accounts written off, net of recoveries.
20
21
EXHIBIT INDEX
Sequential
Page Number
Exhibit No. Description of Exhibit of Exhibit
----------- ---------------------- ----------
3.1 Restated Articles of Incorporation of the Registrant, as
amended (incorporated by reference to Exhibit 19.1 to the
Registrant's quarterly report on Form 10-Q for the quarter
ended June 30, 1991).
3.2 Restated By-laws of the Registrant, as amended.
10.1 Crawford & Company Incentive Stock Option Plan (incorporated
by reference to Exhibit 10(a) to the Registrant's annual
report on Form 10-K for the year ended December 31, 1981).
10.2 Amendment to Crawford & Company Incentive Stock Option Plan
(incorporated by reference to Appendix D on page D-1 of
Registrant's Proxy Statement for the Special Meeting of
Shareholders held on July 24, 1990).
10.3 Crawford & Company 1987 Stock Option Plan (incorporated by
reference to Exhibit 28(a) to the Registration Statement on
Form S-8, Registration No. 33-22595).
10.4 Amendment to Crawford & Company 1987 Stock Option Plan
(incorporated by reference to Appendix C on page C-1 of the
Registrant's Proxy Statement for the Special Meeting of
Shareholders held on July 24, 1990).
10.5 Crawford & Company 1990 Stock Option Plan, as amended
(incorporated by reference to Exhibit 10.5 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1992).
10.6 Crawford & Company 1997 Key Employee Stock Option Plan
(incorporated by reference to Appendix A on page A-1 of the
Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on April 22, 1997).
10.7 Crawford & Company 1997 Non-Employee Director Stock Option
Plan (incorporated by reference to Appendix B on page B-1 of
the Registrant's Proxy Statement for the Annual meeting of
Shareholders to be held on April 22, 1997).
22
EXHIBIT INDEX
Sequential
Page Number
Exhibit No. Description of Exhibit of Exhibit
----------- ---------------------- ----------
10.8 Crawford & Company Annual Incentive Compensation Plan
(incorporated by reference to Exhibit 10.7 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1992).
10.9 Crawford & Company 1996 Annual Incentive Compensation Plan.
(incorporated by reference to Exhibit 10.7 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1995).
10.10 Crawford & Company 1994-1996 Long-Term Executive Bonus Plan
(incorporated by reference to Exhibit 10.7 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1993).
10.11 Amended and Restated Supplemental Executive Retirement Plan
(incorporated by reference to Exhibit 10.9 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1993).
10.12 Crawford & Company 1996 Employee Stock Purchase Plan
(incorporated by reference to Appendix A on page A-1 of
Registrant's Proxy Statement for the Annual Meeting of
Shareholders held on April 18, 1996).
10.13 Amended and Restated Crawford & Company Medical Reimbursement
Plan (incorporated by reference to Exhibit 10.9 to the
Registrant's annual report on Form 10-K for the year ended
December 31, 1994).
10.14 Discretionary Allowance Plan (incorporated by reference to
Exhibit 10.10 to the Registrant's annual report on Form 10-K
for the year ended December 31, 1994).
10.15 Deferred Compensation Plan (incorporated by reference to
Exhibit 10.11 to the Registrant's annual report on Form 10-K
for the year ended December 31, 1994).
11.1 Computation of Fully Diluted Earnings Per Share for the year
ended December 31, 1996.
23
EXHIBIT INDEX
Sequential
Page Number
Exhibit No. Description of Exhibit of Exhibit
----------- ---------------------- ----------
13.1 The Registrant's Annual Report to Shareholders for the year
ended December 31, 1996 (only those portions incorporated
hereby by reference).
21.1 Subsidiaries of Crawford & Company.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Deloitte & Touche.
24.1-9 Powers of Attorney.
27.1 Financial Data Schedule.
99.1 Touche Ross & Co. report as of and for the year ended
September 30, 1994 (incorporated by reference to pages 19-21
of Registrant's Report on Form 10-K for the year ended
December 31, 1994).