<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
--------------------------------
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the fiscal year ended
December 31, 1996
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the transition period from
_________________ to _____________________
Commission File No. 0-21933
A. Full title and address of the plan, if different from that of the
issuer named below:
SUMMIT HOLDING SOUTHEAST, INC. RETIREMENT PLAN
(FORMERLY KNOWN AS SUMMIT CONSULTING, INC. RETIREMENT PLAN)
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
SUMMIT HOLDING SOUTHEAST, INC.
2310 A-Z PARK ROAD
LAKELAND, FLORIDA 33801
(941) 665-6060
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REQUIRED INFORMATION
The following financial statements and schedules, copies of which are included
herewith, have been prepared in accordance with the financial reporting
requirements of the Employee Retirement Income Security Act of 1974, as amended:
Summit Consulting, Inc. Retirement Plan
Financial Statements
Years ended December 31, 1996 and 1995
TABLE OF CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ..........................................................................3
Audited Financial Statements
Statements of Net Assets Available for Benefits..........................................................4
Statements of Changes in Net Assets Available for Benefits...............................................5
Notes to Financial Statements............................................................................6
Schedule of Assets Held for Investment Purposes.........................................................13
Schedule of Reportable Transactions.....................................................................14
</TABLE>
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Report of Independent Auditors
The Plan Administrator
Summit Consulting, Inc. Retirement Plan
We have audited the accompanying statements of net assets available for benefits
of Summit Consulting, Inc. Retirement Plan as of December 31, 1996 and 1995, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Ernst & Young LLP
September 23, 1997
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<PAGE> 4
Summit Consulting, Inc. Retirement Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
------------------------------------
<S> <C> <C>
ASSETS
Cash $ 1 $ 1,874
Investments 7,300,822 5,835,758
Contributions receivable:
Summit Consulting, Inc. 1,892 22,046
Participants 53,936 62,633
Other assets 16,198 14,565
====================================
Net assets available for benefits $7,372,849 $5,936,876
====================================
</TABLE>
See accompanying notes.
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Summit Consulting, Inc. Retirement Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1996 995
----------------------------
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 515,343 $ 375,056
Net realized and unrealized appreciation of fair
value of investments 185,136 570,672
----------------------------
700,479 945,728
Contributions from:
Summit Consulting, Inc. 411,013 326,243
Participants 797,287 664,456
Transfer of funds and participant loans from plan rollovers 33,012 521,104
----------------------------
1,241,312 1,511,803
----------------------------
1,941,791 2,457,531
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (505,818) (281,929)
----------------------------
Net increase 1,435,973 2,175,602
Net assets available for benefits at beginning of period 5,936,876 3,761,274
============================
Net assets available for benefits at end of period $ 7,372,849 $5,936,876
============================
</TABLE>
See accompanying notes.
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<PAGE> 6
Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements
December 31, 1996
1. DESCRIPTION OF THE PLAN
The Summit Consulting, Inc. Retirement Plan (the Plan) is a defined contribution
(401(k)) plan covering substantially all employees of Summit Consulting, Inc.
(the Company) who have met certain requirements as to length of service and have
elected to participate. The Plan was established effective May 1, 1992 and is
subject to the provisions of the Employee Retirement Income Security Act of
1974.
Each participant of the Plan may voluntarily contribute up to 16% of their
annual compensation subject to a maximum as defined by government regulations.
The Company makes a matching contribution in an amount equal to 75% of the
participant's tax deferred contribution, not to exceed 6% of the participant's
annual compensation.
Participants are immediately vested in their voluntary contributions plus actual
earnings thereon. The Company's matching contributions are subject to forfeiture
at varying percentages based on length of service and become fully vested after
five years of service. Forfeitures are used to reduce the Company's matching
contributions and not to increase benefits under the Plan.
The Plan provides for payments of benefits upon retirement, death, disability,
termination of employment, and hardship withdrawals.
The Plan provides that participants may obtain loans from the Plan in an amount
up to one-half of the participant's vested account balance up to a maximum of
$50,000. The minimum amount of any loan is $500. Interest rates for loans to
participants are established by the plan administrator and are generally a
function of market interest rate levels. As of December 31, 1996 and 1995,
interest rates for outstanding loans varied from 7% to 11% and such loans are
repayable over periods ranging up to 10 years. Certain loans have higher
interest rates than current prevailing rates, due to the loan being initiated
under a predecessor plan. Participant loans are collateralized by the
participants' vested account balances.
The Company has the right to terminate the Plan at any time. If the Plan is
terminated, the assets remaining in the Plan, after payment of all liabilities,
will become fully vested to the participants in the Plan.
Further information about the Plan is contained in the Summary Plan Description
of the Summit Consulting, Inc. Retirement Plan which is available from the plan
administrator.
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<PAGE> 7
Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
The financial statements of the Plan are presented on the accrual basis.
INVESTMENTS
Participants in the Plan have the following five investment options in Merrill
Lynch mutual funds: the Government Securities Fund, the Federal Securities Fund,
the Capital Fund, the Basic Value Fund, and the Global Allocation Fund. The
current value of assets designated to the Federal Securities Fund, the Capital
Fund, the Basic Value Fund, and the Global Allocation Fund is determined based
upon quoted market values. Assets designated to the Government Securities Fund
are generally invested in money market funds which are backed by U.S. Government
securities and are stated at cost, which approximates fair market value. The
investment funds are described by The Merrill Lynch Trust Company (the Trustee)
as follows:
GOVERNMENT SECURITIES FUND: This fund invests only in short-term
securities backed by the full faith and credit of the U.S. Government.
FEDERAL SECURITIES FUND: This fund seeks high current income by
investing in U.S. Government and agency securities such as treasury
notes, Ginnie Maes and Fannie Maes. The Merrill Lynch Federal
Securities Fund is designed for conservative income-oriented investors.
CAPITAL FUND: This is a growth and income fund which seeks high total
return consistent with prudent risk. The Merrill Lynch Capital Fund
shifts investments among income stocks, growth stocks and bonds.
BASIC VALUE FUND: This is a growth fund with the primary investment
objective of capital appreciation. The Merrill Lynch Basic Value Fund
invests in what the fund manager believes to be undervalued equity
securities.
GLOBAL ALLOCATION FUND: This is a total return fund that invests
internationally and domestically in a broad range of asset classes.
CASH MANAGEMENT MONEY FUND: This is a cash holding account that
temporarily invests excess or idle cash into money market accounts
before it is used to purchase the above listed funds. The Merrill Lynch
Cash Management Money Fund is not an investment option for
participants.
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Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ALLOCATION OF INVESTMENT INCOME
The allocation of earnings or losses of each investment fund is based on the
average balance of each participant in each fund.
EXPENSES
Administrative expenses of the Plan are generally paid by the Company.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
3. INVESTMENTS
During the years ended December 31, 1996 and 1995, the Plan's investments
(including investments bought, sold, as well as held during the year)
appreciated in fair value by $185,136 and $570,672, respectively, as follows:
<TABLE>
<CAPTION>
NET APPRECIATION
(DEPRECIATION)
IN FAIR VALUE FAIR VALUE AT
DURING THE YEAR END OF YEAR
----------------------------------------
<S> <C> <C>
Year ended December 31, 1996:
Fair value as determined by quoted market price:
Government Securities Fund $ - $ 666,116
Federal Securities Fund (20,762) 1,187,160
Capital Fund 31,498 2,180,809
Basic Value Fund 137,913 1,849,843
Global Allocation Fund 36,487 1,033,488
Participant loans - 383,406
========================================
$ 185,136 $ 7,300,822
========================================
</TABLE>
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<PAGE> 9
Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NET APPRECIATION
(DEPRECIATION)
IN FAIR VALUE FAIR VALUE AT
DURING THE YEAR END OF YEAR
--------------------------------------
<S> <C> <C>
Year ended December 31, 1995:
Fair value as determined by quoted market price:
Cash Management Money Fund $ - $ 207,339
Government Securities Fund - 381,699
Federal Securities Fund 63,341 1,056,861
Capital Fund 229,776 1,792,079
Basic Value Fund 190,114 1,233,055
Global Allocation Fund 87,441 793,837
Participant loans - 370,888
=====================================
$ 570,672 $5,835,758
=====================================
</TABLE>
The above information includes investments that represent 5% or more of the
Plan's net assets.
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<PAGE> 10
Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets during the year ended December 31, 1996 for the
separate funds are as follows:
<TABLE>
<CAPTION>
GOVERNMENT FEDERAL
SECURITIES SECURITIES
COMBINED FUND FUND
--------------------------------------------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 515,343 $ 34,518 $ 73,487
Net realized and unrealized appreciation
(depreciation) in fair value of investments 185,136 - (20,762)
--------------------------------------------
700,479 34,518 52,725
Contributions:
Summit Consulting, Inc. 411,013 44,861 74,970
Participants 797,287 80,006 131,634
Rollovers 33,012 - -
--------------------------------------------
--------------------------------------------
1,241,312 124,867 206,604
--------------------------------------------
1,941,791 159,385 259,329
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (505,818) (37,229) (109,722)
--------------------------------------------
Net increase prior to interfund transfers 1,435,973 122,156 149,607
Interfund transfers (net) - (54,228) (22,245)
--------------------------------------------
Net increase in net assets available for benefits 1,435,973 67,928 127,362
Net assets available for benefits at beginning of
period 5,936,876 617,636 1,070,797
===========================================
Net assets available for benefits at end of period $ 7,372,849 $685,564 $1,198,159
===========================================
<CAPTION>
BASIC GLOBAL
CAPITAL VALUE ALLOCATION PARTICIPANT
FUND FUND FUND LOANS
--------------------------------------------------------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 197,343 $ 113,818 $ 96,177 $ -
Net realized and unrealized appreciation
(depreciation) in fair value of investments 31,498 137,913 36,487 -
--------------------------------------------------------
228,841 251,731 132,664
Contributions:
Summit Consulting, Inc. 124,232 99,063 67,887 -
Participants 241,291 208,718 135,638 -
Rollovers 11,265 13,575 8,172 -
--------------------------------------------------------
--------------------------------------------------------
376,788 321,356 211,697 -
--------------------------------------------------------
605,629 573,087 344,361 -
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (155,804) (89,031) (114,032) -
--------------------------------------------------------
Net increase prior to interfund transfers 449,825 484,056 230,329 -
Interfund transfers (net) (60,552) 129,129 (4,622) 12,518
--------------------------------------------------------
Net increase in net assets available for benefits 389,273 613,185 225,707 12,518
Net assets available for benefits at beginning of
period 1,812,557 1,247,962 817,036 370,888
========================================================
Net assets available for benefits at end of period $2,201,830 $1,861,147 $1,042,743 $383,406
========================================================
</TABLE>
(a) Participant loan interest income has been allocated to the other funds.
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Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets during the year ended December 31, 1995 for the
separate funds are as follows:
<TABLE>
<CAPTION>
GOVERNMENT FEDERAL
SECURITIES SECURITIES
COMBINED FUND FUND
---------------------------------------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 375,056 $ 25,289 $ 60,490
Net realized and unrealized appreciation in
fair value of investments 570,672 - 63,341
---------------------------------------
945,728 25,289 123,831
Contributions:
Summit Consulting, Inc. 326,243 39,360 71,893
Participants 664,456 70,006 110,734
Rollovers 521,104 22,671 104,193
---------------------------------------
1,511,803 132,037 286,820
---------------------------------------
2,457,531 157,326 410,651
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (281,929) (25,411) (37,984)
---------------------------------------
Net increase prior to interfund transfers 2,175,602 131,915 372,667
Interfund transfers (net) - 117,529 (85,870)
---------------------------------------
---------------------------------------
Net increase in net assets available for benefits 2,175,602 249,444 286,797
Net assets available for benefits at beginning of
period 3,761,274 368,192 784,000
=======================================
Net assets available for benefits at end of period $5,936,876 $617,636 $1,070,797
=======================================
<CAPTION>
BASIC GLOBAL
CAPITAL VALUE ALLOCATION PARTICIPANT
FUND FUND FUND LOANS
-------------------------------------------------------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends 179,068 $ 48,397 $ 61,812 $ -
Net realized and unrealized appreciation in
fair value of investments 229,777 190,114 87,440 -
-------------------------------------------------------
408,845 238,511 149,252 -
Contributions:
Summit Consulting, Inc. 107,403 79,657 68,470 -
Participants 183,450 138,731 120,995 -
Rollovers 143,883 204,732 45,625 -
-------------------------------------------------------
434,736 423,120 235,090 -
-------------------------------------------------------
843,581 661,631 384,342 -
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (72,513) (63,788) (82,233) -
-------------------------------------------------------
Net increase prior to interfund transfers 771,068 597,843 302,109 -
Interfund transfers (net) (131,123) 106,154 (111,886) 105,196
-------------------------------------------------------
Net increase in net assets available for benefits 639,945 703,997 190,223 105,196
Net assets available for benefits at beginning of
period 1,172,612 543,965 626,813 265,692
=======================================================
Net assets available for benefits at end of period $1,812,557 $1,247,962 $817,036 $370,888
=======================================================
</TABLE>
(a) Participant loan interest income has been allocated to the other funds.
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Summit Consulting, Inc. Retirement Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Internal Revenue Service has ruled (August 5, 1993) that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and is, therefore, not
subject to tax under present income tax law. Once qualified, the Plan is
required to be operated in conformity with the IRC to maintain its
qualification. The Plan administrator is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Fees charged during 1996 and 1995 for accounting, administrative and other
services rendered by parties-in-interest were based on customary and reasonable
rates for such services and are generally paid by the Company.
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Summit Consulting, Inc. Retirement Plan
Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
IDENTITY OF
ISSUE, BORROWER, CURRENT VALUE
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Merrill Lynch 666,116 units Merrill Lynch Government
Securities Fund $ 666,116 $ 666,116
Merrill Lynch 123,921 units Merrill Lynch Federal
Securities Fund 1,194,017 1,187,160
Merrill Lynch 71,595 units Merrill Lynch Capital Fund 2,023,305 2,180,809
Merrill Lynch 60,393 units Merrill Lynch Basic Value
Fund 1,558,437 1,849,843
Merrill Lynch 71,970 units Merrill Lynch Global
Allocation Fund 964,208 1,033,488
-----------------------------
6,406,083 6,917,416
Participant loans 7% - 11% - 383,406
=============================
$6,406,083 $7,300,822
=============================
</TABLE>
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<PAGE> 14
Summit Consulting, Inc. Retirement Plan
Schedule of Reportable Transactions
Year ended December 31, 1996
<TABLE>
<CAPTION>
CURRENT
VALUE
COST OF ASSET ON NET
IDENTITY OF DESCRIPTION PURCHASE SELLING OF TRANSACTION GAIN
PARTY INVOLVED OF ASSET PRICE PRICE (A) ASSET (A) DATE (LOSS)
- ----------------------------------------------------------------------------------------------------------------------
Category (III)-Series of Transactions in Excess of 5% of Plan Assets
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Merrill Lynch Cash Management Money
Fund $2,203,158 $2,203,158 $2,203,158 $ -
Merrill Lynch Cash Management Money
Fund $1,995,819 1,995,819 1,995,819
Merrill Lynch Government Securities
Fund 326,421 326,421 326,421 -
Merrill Lynch Government Securities
Fund 610,838 610,838 610,838
Merrill Lynch Federal Securities Fund 290,040 294,370 290,040 (4,330)
Merrill Lynch Federal Securities Fund 441,101 441,101 441,101
Merrill Lynch Capital Fund 295,483 274,705 295,483 20,778
Merrill Lynch Capital Fund 652,714 652,714 652,714
Merrill Lynch Basic Value Fund 152,284 127,925 152,284 24,359
Merrill Lynch Basic Value Fund 631,159 631,159 631,159
Merrill Lynch Global Allocation Fund 178,059 161,000 178,059 17,059
Merrill Lynch Global Allocation Fund 381,224 381,224 381,224
</TABLE>
(a) Commissions and fees related to purchases and sales of investments are
included in the cost of the investment or the proceeds from the sale and
are not separately identified by the trustee.
There were no Category (I), (II) or (IV) reportable transactions during the year
ended December 31, 1996.
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<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Annual Report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Lakeland, State of Florida, on
September 25, 1997.
SUMMIT HOLDING SOUTHEAST, INC.
RETIREMENT PLAN
By: SUMMIT HOLDING SOUTHEAST, INC.
RETIREMENT PLAN COMMITTEE
Plan Administrator
By: /s/ Russell L. Wall
--------------------------
Russell L. Wall
Committee Chairman
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