FLORIDA BANKS, INC.
5210 Belfort Road, Suite 310
Jacksonville, Florida 32256
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 2000
The annual meeting of shareholders of Florida Banks, Inc. (the
"Company") will be held on Monday, May 15, 2000 at 11:00 a.m., at the Clarion
Hotel and Conference Center, 2101 Dixie Clipper Road, Jacksonville, Florida
32218, for the following purposes:
(1) To elect four directors to the Board of Directors, to serve for a
term of three years and until their successors are elected and qualified;
(2) To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditor for the fiscal year ending December 31, 2000; and
(3) To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on March 24, 2000
will be entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
A Proxy Statement and a proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the proxy promptly. If you
attend the meeting, you may, if you wish, withdraw your proxy and vote in
person.
By Order of the Board of Directors,
/s/ Charles E. Hughes, Jr.
CHARLES E. HUGHES, JR.
President and Chief Executive Office
Jacksonville, Florida
April 14, 2000
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY
PROMPTLY SO THAT YOUR VOTE MAY BE RECORDED AT THE MEETING IF YOU DO
NOT ATTEND PERSONALLY.
<PAGE>
FLORIDA BANKS, INC.
5210 Belfort Road, Suite 310
Jacksonville, Florida 32256
ANNUAL MEETING OF SHAREHOLDERS
May 15, 2000
-----------------------------------
PROXY STATEMENT
-----------------------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Florida Banks, Inc. (the "Company") for
the Annual Meeting of Shareholders to be held on Monday, May 15, 2000, and any
adjournments or postponements thereof, at the time and place and for the
purposes set forth in the accompanying notice of the meeting. The expense of
this solicitation, including the cost of preparing and mailing this Proxy
Statement, will be paid by the Company. In addition to solicitations by mail,
officers and regular employees of the Company, at no additional compensation,
may assist in soliciting proxies by telephone. This Proxy Statement and the
accompanying proxy are first being mailed to shareholders on or about April 14,
2000. The address of the principal executive offices of the Company is 5210
Belfort Road, Suite 310, Jacksonville, Florida 32256.
Any proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the meeting and gives oral notice of his election to
vote in person, without compliance with any other formalities. In addition, any
proxy given pursuant to this solicitation may be revoked prior to the meeting by
delivering to the Secretary of the Company an instrument revoking it or a duly
executed proxy for the same shares bearing a later date. Proxies which are
returned properly executed and not revoked will be voted in accordance with the
shareholder's directions specified thereon. Where no direction is specified,
proxies will be voted for the election of the director nominees named below and
for adoption of each of the proposals set forth in the accompanying notice of
the meeting. Abstentions and broker non-votes will not be counted as votes
either in favor of or against the proposal to ratify the appointment of Deloitte
& Touche LLP as the Company's independent auditor.
The record of shareholders entitled to vote at the annual meeting was
taken on March 24, 2000. On that date, the Company had outstanding and entitled
to vote 5,642,643 shares of common stock, $.01 par value per share (the "Common
Stock"), with each share of Common Stock entitled to one vote.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 31, 2000 by (i)
each person known by the Company to be the beneficial owner of more than five
percent (5 %) of the outstanding Common Stock; (ii) each director of the
Company; (iii) each Named Executive Officer (as defined herein); and (iv) all
directors and executive officers of the Company as a group. Unless otherwise
indicated, each shareholder has sole voting and investment power with respect to
the indicated shares.
- -------------------------------------------------------------------------------
Name of Shares
Beneficial Owner Beneficially Percentage
Owned(1) of Total(2)
- -----------------------------------------------------------------------------
Clay M. Biddinger............................... 18,000(3) *
Bruce Culpepper................................. 14,500(3) *
Charles E. Hughes, Jr........................... 184,586(4) 3.2%
T. Stephen Johnson.............................. 182,250(5) 3.2%
J. Malcolm Jones, Jr............................ 37,000(3) *
Richard B. Kensler.............................. 6,604(6) *
W. Andrew Krusen, Jr............................ 145,071(7) 2.5%
Nancy E. LaFoy.................................. 27,000(8) *
Wilford C. Lyon, Jr............................. 37,500(3) *
David McIntosh.................................. 7,225(3) *
Don D. Roberts.................................. 21,363(9) *
M.G. Sanchez.................................... 145,000(10) 2.5%
T. Edwin Stinson, Jr............................ 116,945(11) 1.9%
All directors and executive officers 941,044(12) 15.6%
- ------------------------------------------------------------------------------
* Less than 1% of outstanding shares,
(1) "Beneficial Ownership" includes shares for which an individual,
directly or indirectly, has or shares voting or investment power or
both and also includes options which are exercisable within sixty days
of the date of this Proxy Statement. Beneficial ownership as reported
in the above table has been determined in accordance with Rule l3d-3 of
the Securities Exchange Act of 1934. Pursuant to the Rules of the
Commission, certain shares of the Company's Common Stock that a
beneficial owner has the right to acquire within 60 days pursuant to
the exercise of stock options are deemed to be outstanding for the
purpose of computing the percentage ownership of such owner but are not
deemed outstanding for the purpose of computing the percentage
ownership of any other person.
(2) The percentages are based upon 5,642,643 shares of Common Stock issued
and outstanding as of March 24, 2000.
2
<PAGE>
(3) Includes 7,000 shares subject to immediately exercisable options.
(4) Includes 80,000 shares subject to immediately exercisable options.
Although Mr. Hughes' options will become exercisable in equal amounts
over eight years, if Mr. Hughes leaves the employment of the Company
for any reason, all options will become immediately exercisable.
(5) Includes 75,000 shares subject to immediately exercisable options and
13,500 shares subject to immediately exercisable options granted to Mr.
Johnson's wife. Includes 13,500 shares which are owned by Mr. Johnson's
wife, 10,000 shares which are held by Mr. Johnson's wife as a custodian
for their children, and 250 shares which are held by Mr. Johnson as a
custodian for his nephew.
(6) Includes 5,000 shares subject to immediately exercisable options.
(7) Includes 47,000 shares subject to immediately exercisable options.
Includes 19,645 shares which are held jointly with Mr. Krusen's wife;
55,096 shares which are held by a partnership, of which Mr. Krusen is
the general partner; 20,001 shares which are held in trust for the
benefit of Mr. Krusen's wife; and 3,329 shares which are held for Mr.
Krusen's children in a trust, of which Mr. Krusen is the trustee.
(8) Includes 17,000 shares subject to immediately exercisable options.
(9) Includes 10,000 shares subject to immediately exercisable options or
options exercisable within 60 days.
(10) Includes 75,000 shares subject to immediately exercisable options.
(11) Includes 10,000 shares subject to immediately exercisable options and
101,291 shares held jointly with Mr. Stinson's spouse.
(12) Includes 374,500 shares subject to immediately exercisable options.
There are no arrangements known to the Company, the operation of which
may, at a subsequent date, result in a change in control of the Company.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of 11 directors, divided
into three classes, with members of each class of directors serving for
staggered three-year terms. The board members and classifications are as
follows:
Class I Class II Class III
T. Stephen Johnson Clay M. Biddinger Bruce Culpepper
J. Malcolm Jones, Jr. Wilford C. Lyon, Jr. Charles E. Hughes, Jr.
Nancy E. LaFoy M. G. Sanchez David McIntosh
T. Edwin Stinson, Jr. W. Andrew Krusen, Jr.
The term of the Class II directors will expire at the 2000 Annual
Meeting of Shareholders. The Board of Directors has nominated Clay M. Biddinger,
Wilford C. Lyon, Jr., M.G. Sanchez and T. Edwin Stinson, Jr. for election as
Class II directors of the Company. THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE ELECTION OF THESE NOMINEES.
Each of the nominees has consented to being named in this Proxy
Statement and to serve as a director of the Company if elected. In the event
that any nominee withdraws or for any reason is not able to serve as a director,
the proxy will be voted for such other person as may be designated by the Board
of Directors, but in no event will the proxy be voted for more than four
nominees. The affirmative vote of a plurality of all votes cast at the meeting
by the holders of the Common Stock is required for the election of the four
nominees standing for election. Management of the Company has no reason to
believe that any nominee will not serve if elected.
The following persons have been nominated by management for election to
the Board of Directors as Class II directors to succeed themselves for a term of
three years, expiring at the 2003 Annual Meeting of Shareholders, and until
their successors are elected and qualified:
Clay M. Biddinger, age 42, has served as a Class II Director of the
Company since April 1998 and as a director of Florida Bank, NA (the "Bank")
since its acquisition in August 1998. Mr. Biddinger is the founder of, and has
served as the Chief Executive Officer of, CMB Capital, LLC, since March of 1999.
Mr. Biddinger has more than 20 years experience in the financial services
industry including experience as an entrepreneur, founder, chairman, and chief
executive officer of Sun Financial Group, Inc. ("Sun"), now a subsidiary of GATX
Corporation, a $6 billion financial services company with an emphasis in
equipment and technology leasing and financing. From 1981 to 1998, Mr. Biddinger
served as the chief executive officer of Sun. Sun became a subsidiary of GATX
Capital in October 1995. Under Mr. Biddinger's leadership, from 1995 through
1998, Sun's annual lease originations in the technology sector grew from $72
million in 1995 to $310 million in 1998. Sun Financial was among Inc. Magazine's
500's fastest growing private companies four times between 1986-1990. A past
recipient of the Florida Entrepreneur of the Year award and the founding
Chairman of the Florida Chapter of the Council of Growing Companies, Mr.
Biddinger serves on the board of directors of Dominion Financial Group, Inc., a
merchant banking company which provides investment capital to emerging growth
companies; Experient Technologies, a portfolio technology company; the Council
4
<PAGE>
of Growing Companies; and various charitable and community non-profit
organizations. Mr. Biddinger is also a member of the Society of International
Business Fellows. Mr. Biddinger was also featured in Fortune Magazine in
December of 1993. Mr. Biddinger received his BS in Business Administration from
Rollins. College.
Wilford C. Lyon, Jr., age 64, has served as a Class II Director of the
Company since April 1998 and as a director of the Bank since its acquisition in
August 1998. Prior to his service with the Company, Mr. Lyon served as Chairman
of the Board and Chief Executive Officer of the Independent Insurance Group,
Inc., a publicly traded company. Mr. Lyon retired from that position on February
29, 1996 when the company merged with the American General Corporation, a
publicly traded company. Mr. Lyon has also served on the Board of Florida
National Banks of Florida, Inc. from 1983 to 1990 when it merged with First
Union National Bank of Florida; and thereafter he served on the Board of First
Union National Bank of Florida until 1991. Mr. Lyon is active in community
affairs, having served as Chairman of the Jacksonville Chamber of Commerce, and
District Governor of Rotary International.
M. G. Sanchez, age 65, has served as Chairman of the Board and a Class
II Director of the Company since February 1998. Since the acquisition of the
Bank, Mr. Sanchez has also served as Chairman of the Board of the Bank. Prior to
his service with the Company, Mr. Sanchez worked independently as a bank
management consultant, periodically performing contract work with T. Stephen
Johnson & Associates, Inc., a financial services consulting firm. From 1986 to
1997, Mr. Sanchez served as President and Chief Executive Officer of The FBF
Management Group, a provider of management consulting services to banks in
Florida. Prior to his service with The FBF Management Group, from 1979 to 1986
Mr. Sanchez served as the President and Chief Executive Officer of First Bankers
Corporation of Florida, a bank holding company with nine subsidiary banks in
Florida that was acquired by First Union Corporation in 1986. Mr. Sanchez has
also served as a Member of the Board of Directors for the Miami branch of the
Federal Reserve Bank of Atlanta and a Member of the Governors Advisory Committee
on Interstate Banking. Mr. Sanchez is also a past National President of Robert
Morris Associates, the association of bank loan and credit officers. Mr. Sanchez
serves on the Advisory Board at the College of Business at the University of
Florida and is a former President of Gator Boosters, Inc. at the University of
Florida.
T. Edwin Stinson, Jr., age 47, served as Executive Vice President,
Chief Operating Officer and as a director of First National Bank of Tampa from
1993 until its acquisition by the Company in August 1998. Mr. Stinson has served
as a Class II director of the Company and as its Chief Financial Officer,
Secretary and Treasurer since the acquisition of the Bank in August 1998. Prior
to his service with the Bank, Mr. Stinson served as the President of Florida
State Bank and Emerald Coast State Bank in Northwest Florida. Mr. Stinson has
been involved in the banking industry since 1978.
Each of the following persons is a member of the Board of Directors who
is not standing for election to the Board this year and whose term will continue
after the annual meeting of shareholders.
T. Stephen Johnson, age 48, has served as a Class I Director of the
Company since its inception and as its Vice Chairman since February 1998. Mr.
Johnson has served as a director of the Bank since its acquisition in August
5
<PAGE>
1998. Mr. Johnson has served as the Chairman of the Board of T. Stephen Johnson
& Associates, Inc. ("TSJ&A"), a financial services consulting firm, since its
inception in 1987. TSJ&A specializes in mergers, acquisitions and regulatory
consulting for financial institutions. Through TSJ&A, Mr. Johnson has founded
and serves as Chairman of several financial services companies including,
NetB@nk, Inc. a public company, which offers a full service financial bank
system of home banking via the internet; Directo, Inc., which provides financial
products/services to the un-banked market through the employer; BrightLane.com,
a super site that includes banking services, office supplies, recruiting and
payroll for small businesses via the internet; Maxrate.com, an auction site for
bank investment products including CD's. In addition, he is the principal owner
of Bank Assets, Inc., a provider of benefit programs for directors and officers
of banks.
J. Malcolm Jones, Jr., age 47, has served as a Class I Director of the
Company since April 1998. Mr. Jones has served as a director of the Bank since
its acquisition in August 1998. Mr. Jones is currently a private investor,
however, from 1997 through 1999, Mr. Jones had been Senior Vice President of The
St. Joe Company, a publicly traded real estate and timber company and, from 1995
to 1997, Mr. Jones served as The St. Joe Company's Vice President and Chief
Financial Officer. Mr. Jones formerly served as President, Chief Executive
Officer and Vice Chairman of the Board of Florida Bank, a Florida savings bank.
Nancy E. LaFoy, age 44, has served as a Class I Director of the Company
since its inception and as a director of the Bank since its acquisition in
August 1998. Prior to the acquisition of the Bank, Ms. LaFoy served as Secretary
and Treasurer of the Company. Ms. LaFoy has served as Senior Vice President of
TSJ&A since 1987. Prior to her service with TSJ&A, Ms. LaFoy served as Assistant
Vice President with Wachovia Corporation in Atlanta, Georgia, formerly First
National Bank of Atlanta, from 1984 to 1987. Ms. LaFoy has been involved in the
banking industry since 1977.
Charles E. Hughes, Jr., age 56, has served as President, Chief
Executive Officer and a Class III Director of the Company since January 1998 and
as President, Chief Executive Officer, and director of the Bank since its
acquisition in August 1998. Prior to his service with the Company, Mr. Hughes
served as Chairman of the Board, President and Chief Executive Officer of
SouthTrust Bank of Florida, N.A. ("SouthTrust"). At SouthTrust, Mr. Hughes was
responsible for negotiating bank acquisitions in Florida and overseeing the
entire Florida operations for SouthTrust. Prior to joining SouthTrust, Mr.
Hughes served as Executive Vice President and Chief Financial Officer of Baptist
Health System, Inc., a hospital management corporation from 1990 to 1992. Prior
to Baptist Health System, Inc., Mr. Hughes served as Executive Vice President of
Florida National Banks of Florida, Inc. and President of Florida National Bank
in Jacksonville from 1983 until Florida National Bank merged with First Union
National Bank in 1990. Mr. Hughes is a past Chairman and a present member of the
Board of Trustees of the Jacksonville Chamber of Commerce.
Bruce Culpepper, age 58, has served as a Class III Director of the
Company since April 1998 and as a director of the Bank since its acquisition in
August 1998. Mr. Culpepper has been an attorney with the Florida-based law firm
of Akerman, Senterfitt & Eidson, P.A. since 1997. Prior to 1997, Mr. Culpepper
was a partner with the law firm of Pennington, Culpepper, P.A. from 1992 to
1997.
6
<PAGE>
W. Andrew Krusen, Jr., age 50, served as Chairman of the Board of First
National Bank of Tampa from 1991 until its acquisition by the Company in August
1998. Mr. Krusen has served as a Class III director of the Company and as a
director of the Bank since August 1998. Since 1988, Mr. Krusen has served as
Chairman of the Board of Dominion Energy and Minerals Corporation, an oil and
gas concern, and is Chairman of the Executive Committee of Dominion Financial
Group International LDC, a merchant banking company which provides investment
capital to various emerging business enterprises. He also serves as a Director
of General Group Holdings, Inc., a family controlled business involved in real
estate development, construction, leasing and manufacturing. Mr. Krusen is a
director of publicly traded Memry Corporation and Raymond James Trust Company.
David McIntosh, age 53, has served as a Class III Director of the
Company since April 1998 and as a director of the Bank since its acquisition in
August 1998. Mr. McIntosh has served as the Chief Executive Officer of Barricade
International, Inc. since July 1998. From 1984 until 1998, Mr. McIntosh served
as the Chief Executive Officer of Gunster, Yoakley, Valdes-Fauli & Stewart,
P.A., a 150 attorney law firm based in West Palm Beach, Florida. Mr. McIntosh
serves on the Board of Directors of U.S. Diagnostic, Inc., a publicly held
company. Over the past two years, Mr. McIntosh has served as Chairman of the
Governor's Task Force on Telecommunications, Chairman of the Florida Intangible
Tax Task Force, Chairman of Florida TaxWatch and Chairman of the Advisory Board
of the College of Business at Florida Atlantic University. Since 1980, Mr.
McIntosh has served as a member of the Board of Directors of the University of
Florida Foundation and is also a past President of the University Alumni.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who own more than 10% of the
outstanding Common Stock of the Company, to file with the Securities and
Exchange Commission reports of changes in ownership of the Common Stock of the
Company held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all forms
they file under this regulation. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and
representations that no other reports were required, during the year ended
December 31, 1999, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% shareholders were complied with.
Although it is not the Company's obligation to make filings pursuant to
Section 16 of the Securities Exchange Act of 1934, the company has adopted a
policy requiring all Section 16 reporting persons to report monthly to the Chief
Financial Officer of the Company as to whether any transactions in the Company's
Common Stock occurred during the previous month.
7
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
The Board of Directors held nine meetings during the year ended
December 31,1999. Each director attended at least 75% or more of the aggregate
number of meetings held by the Board of Directors and the committees on which
they served. The Company's Board of Directors has four standing committees --
the Executive Committee, the Audit Committee, the Compensation Committee, and
the Credit Policy Committee, each of which was established in May 1998. The
Board of Directors does not have a standing nominating committee, such function
being reserved to the full Board of Directors.
The Executive Committee presently consists of M.G. Sanchez, T. Stephen
Johnson, Charles E. Hughes, Jr., J. Malcolm Jones, Jr., W. Andrew Krusen, Jr.
and Wilford C. Lyon, Jr. The Executive Committee exercises the authority of the
Board of Directors in accordance with the By-Laws of the Company between regular
meetings of the Board of Directors. The Executive Committee held five meetings
in 1999.
The Audit Committee presently consists of David McIntosh, Bruce
Culpepper, Nancy E. LaFoy and Wilford C. Lyon. The Audit Committee has been
assigned the principal function of reviewing the internal and external financial
reporting of the Company, reviewing the scope of the independent audit and
considering comments by the auditors regarding internal controls and accounting
procedures and management's response to these comments. The Audit Committee held
six meetings during 1999.
The Compensation Committee presently consists of Clay M. Biddinger,
David McIntosh and Bruce Culpepper. The Compensation Committee has been assigned
the functions of approving and monitoring the remuneration arrangements for
senior management. The Compensation Committee held three meetings during 1999.
The Credit Policy Committee presently consists of W. Andrew Krusen,
Jr., Charles E. Hughes, Jr., J. Malcolm Jones and M. G. Sanchez. The Credit
Policy Committee has been assigned the principal oversight of the credit and
lending function of the company. The Credit Policy Committee held four meetings
during 1999.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
Name Age Position Held
Charles E. Hughes, Jr. 56 President and Chief Executive Officer
T. Edwin Stinson, Jr. 47 Chief Financial Officer, Secretary
and Treasurer
Richard B. Kensler 49 Chief Credit Officer
8
<PAGE>
Executive officers are appointed by the Board of Directors of the
Company and hold office at the pleasure of the Board. Executive officers devote
their full time to the affairs of the Company. See "Election of Directors" for
information with respect to Charles E. Hughes, Jr. and T. Edwin Stinson, Jr.
Richard B. Kensler, age 49, has served as the Chief Credit Officer of
the Company since April 1998. Prior to his service with this Company, Mr.
Kensler had served as a senior credit officer for Signet Banking Corporation
since 1987. Mr. Kensler's banking career began in the Florida market when he
served as an Assistant Vice President and Special Assets Manager for Sun Banks
of Florida, Inc. in Orlando from 1972 to 1980.
Certain Significant Employees
Donald D. Roberts, age 51, has served as President of the Jacksonville
Market since April 1998. Prior to his service with the Company, Mr. Roberts
served as President and Chief Executive Officer of Barnett Bank, N.A., Lake
County, Florida since 1993. Prior to his service in Lake County, he served as
President and Chief Executive Officer of Barnett Bank of Atlanta from 1990
through 1994. During his 13 year tenure with Barnett Banks, he served in several
positions, including Executive Vice President in charge of the Corporate Banking
Group.
Cynthia P. Runnion, age 51, has served as Senior Vice President, Human
Resources, of the Company since November 1998. Prior to her service with the
Company, Ms. Runnion served as Vice President, Human Resources, with Bombardier
Capital from 1997 to 1998. From 1989 to 1997, Ms. Runnion served as Vice
President, Human Resources with Independent Insurance Co.
Robert H. Higel, age 45, has served as the Senior Operations Officer of
the Company since May 1999. Prior to his service with the Company, Mr. Higel
most recently served as the Chief Financial Officer of SunTrust of Volusia
County and was the Chief Financial Officer of BankAmerica/Barnett for several
consumer lending units. Mr. Higel spent over nine years with
BankAmerica/Barnett. Mr. Higel began his banking career in 1979 with Atlantic
Bank working in branch operations. He later joined SunTrust as an Audit Manager
over loan and operational audits on Florida's west coast.
Mark Walker, age 44, has served as President of the Alachua County
Market since October 1998. Prior to his service with the Company, Mr. Walker
served as President of Barnett Bank, N.A. Alachua County, Florida since 1989.
Mr. Walker has served in various positions with Barnett Banks, Inc. for over 20
years.
Douglas A. Tuttle, age 41, has served as President of the Tampa Market
since March 15, 1999, and as Executive Vice President and Senior Lender of the
Bank since August 1998. Prior to his services with the Company, Mr. Tuttle
served as Senior Vice President of the commercial lending division of SouthTrust
Bank of West Florida since 1999. Mr. Tuttle's past banking experience includes
management positions with Barnett Bank of Tampa, First Florida Banks and Florida
National Bank.
9
<PAGE>
A.G. "Buddy" Johnson, Jr., age 52, has served as President of the
Broward County Market since April 1999 and opened the Bank's office there in
September 1999. Prior to joining the Company, Buddy spent 28 years serving in
increasingly responsible positions with First Union organizations. His most
recent position, held from 1990 through 1997, was area president of the First
Union Broward County Unit.
Joseph M. Wheeler, age 50, has served as President of the Pinellas
County Market since March 1999 and opened the Bank's office there in October
1999. Prior to his service with the Company, Mr. Wheeler served as Chief
Executive Officer of SouthTrust Bank of Florida in Tallahassee since 1996 and as
Executive Vice President of Barnett Bank of Suncoast from 1993 to 1996. From
1982 to 1993, Mr. Wheeler served as Executive Vice President of Barnett Bank of
Pinellas County. Mr. Wheeler has over 25 years of banking experience in Florida.
EXECUTIVE COMPENSATION
The following table presents certain summary information for the fiscal
year ended December 31, 1999 concerning compensation earned for services
rendered in all capacities by the Company's Chief Executive Officer and the
other most highly compensated executive officers of the Company or of the
Company's subsidiaries (the "Named Executive Officers") whose total annual
salary and bonus exceeded $100,000 during fiscal 1999.
<TABLE>
Summary Compensation Table
for Fiscal Year 1999(1)
Annual Compensation Long Term Compensation
---------------------------------------- -------------------------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options/SARs Compensation
------------------ ---- ------ ----- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Charles E. Hughes, Jr. 1999 $250,000 $ 0 * -- $5,632(2)
President and Chief 1998 $223,783 $150,000 -- 80,000 $ 923
Executive Officer and
Director
T. Edwin Stinson, Jr. 1999 $121,647 $ 0 $13,402(3) --
Chief Financial Officer 1998 $140,834 $37,647 $32,156(5) 40,000 $4,194
and Director
Richard B. Kensler 1999 $114,584 $ 0 $13,208(6) -- $1,954(7)
Chief Credit Officer 1998 $78,487 $36,667 $33,253(8) 20,000 $ 693
Don D. Roberts 1999 $136,555 $57,000 * 5,000 $4,473(9)
President of Jacksonville 1998 $109,113 $43,333 $57,093(10) 20,000 --
Market
- ------------------
* Amount of perquisites and other benefits did not exceed the lesser of
either $50,000 or 10% of combined bonus and salary.
<FN>
(1) Prior to the fiscal year beginning January 1, 1998, the Company was in
the development stage and the Company did not pay any compensation to
any of its employees.
10
<PAGE>
(2) Includes income recognized from payment of $719 for life insurance
premiums on behalf of Mr. Hughes and $4,913 which represents the Bank's
matching contributions under the Bank's 401(k) Plan.
(3) Includes $7,284 for Company paid insurance and $3,718 for Mr. Stinson's
car allowance.
(4) Includes income recognized from payment of $241 for life insurance
premiums on behalf of Mr. Stinson and $3,509 which represents the
Bank's matching contributions under the Bank's 401(k) Plan.
(5) Includes $27,646 for relocation expense in connection with Mr.
Stinson's relocation to Jacksonville.
(6) Includes $5,274 for Company paid insurance and $6,000 for Mr. Kensler's
car allowance.
(7) Includes income recognized from payment of $229 for life insurance
premiums on behalf of Mr. Kensler and $1,725 which represents the
Bank's matching contribution under the Bank's 401(k) Plan.
(8) Includes $13,851 paid as relocation expense in connection with Mr.
Kensler's relocation to Jacksonville and $14,302 in membership dues
paid on behalf of Mr. Kensler.
(9) Represents income recognized from payment of $361 for life insurance
premiums on behalf of Mr. Roberts and $4,112 which represents the
Bank's matching contributions under the Bank's 401(k) Plan.
(10) Includes relocation expense in connection with Mr. Roberts' relocation
to Jacksonville.
</FN>
</TABLE>
The following table provides certain information concerning individual
grants of stock options under the Company's 1998 Stock Option Plan made during
the year ended December 31, 1999 to the Named Executive Officers:
<TABLE>
Option Grants in Last Fiscal Year
Individual Grants
% of Total
Options
Granted to Grant
Name Options Employees Exercise Expiration Date
Granted (#) in Fiscal Price ($ Date Present
Year Per Share) Value(1)
-------------------------------------------------------------------------------------------------------
<S> <C>
Charles E. Hughes, Jr. 0 -- -- -- --
T. Edwin Stinson, Jr. 0 -- -- -- --
Richard B. Kensler 0 -- -- -- --
Don D. Roberts 5,000 6.3% $10.00 5/25/09 $17,628
- ---------------
<FN>
(1) The grant date present value is estimated using a variation of the
Black-Sholes option pricing model with the following weighted average
assumptions; dividend yield of 0%, expected volatility of 27.50%,
risk-free interest rate of 4.30% and expected life of 10 years.
</FN>
</TABLE>
The following table provides information regarding the options
exercised by the Named Executive Officers during fiscal 1999 and the value of
options outstanding for such individuals at December 31, 1999:
11
<PAGE>
<TABLE>
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year End Option Values
Value of
Number of Securities Unexercised
Underlying In-the-Money
Name Shares Unexercised Options Options at Fiscal
Acquired on at Fiscal Year End Year End
Exercise Value Realized Exercisable/ Exercisable/
Unexercisable Unexercisable
- ---------------------------------------- ------------- --------------- ---------------------- --------------------
<S> <C> <C> <C> <C> <C>
Charles E. Hughes, Jr. 0 $0 80,000/0 $0/$0
T. Edwin Stinson, Jr. 0 0 10,000/30,000 $0/$0
Richard B. Kensler 0 0 5,000/15,000 $0/$0
Don D. Roberts 0 0 5,000/20,000 $0/$0
</TABLE>
Employment Agreements
In January 1998, Charles E. Hughes, Jr. entered into an employment
agreement (the "Employment Agreement") with the Company which provides that Mr.
Hughes will serve as the President and Chief Executive Officer of the Company
and the Bank. Mr. Hughes also serves as a member of the Board of Directors of
the Company and the Bank. The Employment Agreement has a three-year term and
provides for an annual base salary of $250,000. In connection with the Employee
agreement, the Board has issued an option to Mr. Hughes to purchase 80,000
shares of Common Stock at the initial public offering price of the Common Stock
sold in the Company's initial public offering. This option is exercisable for a
period of ten years.
In the event of a "change in control" of the Company (as defined in the
Employment Agreement), Mr. Hughes will be entitled to give written notice to the
Company of termination of the Employment Agreement and to receive a cash payment
equal to approximately 300% times the compensation received by Mr. Hughes in the
one-year period immediately preceding the change in control. In addition, if Mr.
Hughes elects to terminate the Employment Agreement pursuant to a change in
control, Mr. Hughes will further be entitled, in lieu of shares of Common Stock
issuable upon the exercise of options to which Mr. Hughes is entitled, an amount
in cash or Common Stock equal to the excess of the fair market value of the
Common Stock as of the date of closing of the transaction effecting the change
of control over the per share exercise price of the options held by Mr. Hughes,
times the number of shares of Common Stock subject to such options.
The Employment Agreement may be terminated by the Board of Directors
without notice and without further obligation other than for monies already
paid, if Mr. Hughes is terminated for Cause (as that term is defined in the
Employment Agreement). Upon thirty days' written notice to Mr. Hughes, the Bank
may terminate the Employment Agreement without Cause upon the condition that Mr.
Hughes will be entitled to the same compensation as he would have been entitled
to receive in the event of a change of control of the Company. Likewise, Mr.
Hughes may upon thirty days' written notice to the Company terminate the
Employment Agreement without Cause. In the event of termination by Mr. Hughes,
the Company will have no further obligation other than for monies paid and the
Company shall be entitled to enforcement of the non-compete and non-solicitation
provisions. In the event of Mr. Hughes' death, the Company will pay to Mr.
Hughes' designated beneficiary an amount equal to Mr. Hughes' base salary
through the end of the month in which Mr. Hughes' death occurred. The Employment
12
<PAGE>
Agreement also provides a non-compete provision which provides that in the event
of termination of employment under the Employment Agreement by Mr. Hughes
pursuant to the giving of notice by Mr. Hughes, Mr. Hughes has agreed that for a
period of twelve months after such termination date, Mr. Hughes shall not,
without the prior written consent of the Company, within Duval County, Florida
either directly or indirectly, serve as an executive officer of any bank, bank
holding company or other financial institution. The Employment Agreement further
obligates Mr. Hughes to protect the confidentiality of the Company's information
following termination of his employment.
The Company has also entered into employment agreements with Mr.
Stinson and Mr. Kensler. Mr. Stinson's employment agreement provides that he
will serve as Chief Financial Officer of the Company for a three year term
expiring on August 4, 2001. Mr. Stinson's employment agreement provides for an
annual base salary of $117,000 and the grant of options to purchase 40,000
shares of Common Stock at the initial public offering price. Mr. Kensler's
employment agreement provides that he will serve as Chief Credit Officer of the
Company for a three year term expiring August 14, 2001. Mr. Kensler's employment
agreement provides for an annual base salary of $110,000 and the grant of
options to purchase 20,000 shares of the Common Stock at the initial public
offering price. In the event of a "change in control," both agreements provide
that Mr. Stinson and Mr. Kensler may elect to give written notice to the Company
of termination of their respective agreements and to receive a cash payment
equal to approximately 300% times the compensation received by them in the year
preceding the change in control. Each of Mr. Stinson's and Mr. Kensler's
agreements contain a non-compete provision which provides that in the event of
termination by the executive, Mr. Stinson and Mr. Kensler have agreed for a
period of twelve months that neither will serve as an executive officer of any
bank, bank holding company or financial institution in the surrounding counties.
Compensation of Directors
Directors of the Company and the Bank will not receive any compensation
based on their attendance at board meetings until the Bank becomes profitable
for two consecutive quarters. In August 1998, certain of the non-employee
directors of the Company were granted immediately exercisable stock options
under the 1998 Plan to purchase 2,000 shares. The options are exercisable at the
initial public offering price of $10.00 and will expire ten years from the date
of grant. In addition, members of the Board of Directors are reimbursed for
out-of-pocket expenses incurred in connection with attendance at Board meetings.
The members of the local advisory boards of directors receive compensation of
$200 per meeting attended and annual stock option awards of 1,000 which are
exercisable at fair market value.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is currently
comprised of Clay M. Biddinger, Bruce Culpepper and David McIntosh. None of the
members of the Compensation Committee served as an officer or employee of the
13
<PAGE>
Company or any of its subsidiaries during fiscal 1999. There were no material
transactions between the Company and any of the members of the Compensation
Committee during fiscal 1999.
401(k) Profit Sharing Plan
The Company maintains a 401(k) Profit Sharing Plan (the "401(k) Plan")
which is intended to be a tax-qualified defined contribution plan under Section
401(k) of the Internal Revenue Code of 1986, as amended (the "Code"). In
general, all employees of the Company who have completed three months of service
and have attained age 21 are eligible to participate. The 401(k) Plan includes a
salary deferral arrangement pursuant to which participants may contribute,
subject to certain Code limitations, a maximum of 15% of their salary on a
pre-tax basis (up to $10,000 per year). Subject to certain Code limitations, the
Company may make both matching and additional contributions at the discretion of
the Board of Directors of the Company each year. A separate account is
maintained for each participant in the 401(k) Plan. The portion of a
participant's account attributable to his or her own contributions is 100%
vested. Distributions from the 401(k) Plan are made in the form of a lump-sum
cash payment.
Stock Option Plan
In March 1998, the Board of Directors adopted the 1998 Stock Option
Plan (the "Plan") to promote the Company's growth and success. The Plan was
approved by the shareholders on June 4, 1998. Options may be granted under the
Plan to the Company's directors, officers and employees as well as certain
consultants and advisors. The Plan currently provides for the grant of incentive
and non-qualified stock options to purchase up to 900,000 shares of Common Stock
at the discretion of the Board of Directors of the Company or a committee
designated by the Board of Directors to administer the Plan. The option exercise
price of incentive stock options must be at least 100% (110% in the case of a
holder of 10% or more of the Common Stock) of the fair market value of the stock
on the date the option is granted and the options are exercisable by the holder
thereof in full at any time prior to their expiration in accordance with the
term of the Plan. Incentive stock options granted pursuant to the Plan will
expire on or before (1) the date which is the tenth anniversary of the date the
option is granted, or (2) the date which is the fifth anniversary of the date
the option is granted in the event that the option is granted to a key employee
who owns more than 10% of the total combined voting power of all classes of
stock of the Company or any subsidiary of the Company. Options granted under the
Plan typically vest over a period of four to five years. As of March 24, 2000,
options to purchase 799,598 shares of Common Stock were outstanding pursuant to
the Plan.
CERTAIN TRANSACTIONS
The Bank may extend loans from time to time to certain of the Company's
and the Bank's directors, their associates and members of the immediate families
14
<PAGE>
of the directors and executive officers of the Company. These loans will be made
in the ordinary course of business on substantially the same terms, including
interest rates, collateral and repayment terms, as those prevailing at the time
for comparable transactions with persons not affiliated with the Company or the
Bank, and will not involve more than the normal risk of collectibility or
present other unfavorable features.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was established in
1998 and is responsible for: (i) establishment of the Company's compensation
philosophy and policies; (ii) review and approval of pay recommendations for the
executive officers of the Company; and (iii) initiation of all compensation
actions for the Chief Executive Officer of the Company.
The Company's compensation policies have been designed to align the
financial interests of the Company's management with those of its shareholders,
and reflect the nature of the Company by taking into account the Company's
operating environment and the expectations for continued growth and enhanced
profitability. Compensation for each of the Company's executive officers
consists of a base salary, an annual performance bonus and, in some cases, stock
options. The Company does not currently provide executive officers with other
long term incentive compensation other than the ability to contribute their
earnings to the Company's 401(k) Plan.
The Compensation Committee's philosophy is that the predominant portion
of an executive's compensation should be based directly upon the value of
long-term incentive compensation in the form of stock ownership or stock option
awards. The Compensation Committee believes that providing executives with the
opportunities to acquire significant stakes in the growth and prosperity of the
Company (through grants of stock options), while maintaining other elements of
the Company's compensation program at conservative levels, will enable the
Company to attract and return executives with the outstanding management
abilities and entrepreneurial spirit which are essential to the Company's
ongoing success. Furthermore, the Compensation Committee believes that this
approach to compensation motivates executives to perform to their full
potential.
At least annually, the Compensation Committee will review salary
recommendations for the Company's executives and then approve such
recommendations, with any modifications it deems appropriate. The annual salary
recommendations are made under the ultimate direction of the Chief Executive
Officer, based on peer group and national industry surveys of total compensation
packages, as well as evaluations of the individual executive's past and expected
future performance. Similarly, the Compensation Committee fixes the base salary
of the Chief Executive Officer based on a review of competitive compensation
data, the Chief Executive Officer's overall compensation package, and the
Compensation Committee's assessment of his past performance and its expectation
as to his future performance in leading the Company.
The Compensation Committee also determines, based upon the
recommendation of the Chief Executive Officer, the annual bonus, if any, to be
paid to executive officers (other than the Chief Executive Officer). The amount
15
<PAGE>
of each individual bonus is determined based upon an evaluation of such factors
as individual performance, increases in the Company's revenue, net income, net
income per share and market penetration, as well as the executive's contribution
to the Company's performance. The Compensation Committee applies similar
criteria in setting the amount of annual bonus, if any, earned by the Chief
Executive Officer.
Stock options represent a substantial portion of compensation for the
Company's executive officers. Stock options are granted at or above the
prevailing market price on the date of grant, and thus will only have value if
the Company's stock price increases. Generally, grants vest in equal amounts
over a period of five years (although certain special types of grants may vest
either immediately or over a shorter period) and executives must be employed by
the Company at the time of vesting in order to exercise the options. Grants of
stock options generally are based upon the level of the executive's position
with the Company and an evaluation of the executive's past and expected future
performance. The Compensation Committee believes that dependence on stock
options for a significant portion of executives' compensation more closely
aligns such executives' interests with those of the Company's shareholders,
since the ultimate value of such compensation is linked directly to stock price.
The Compensation Committee will continually evaluate the Company's
compensation policies and procedures with respect to executives. Although the
Compensation Committee believes that current compensation policies have been
successful in aligning the financial interests of executive officers with those
of the Company's shareholders and with Company performance, it continues to
examine what modifications, if any, should be implemented to further link
executive compensation with both individual and Company performance.
The Compensation Committee evaluated the compensation of the Chief
Executive Officer on the same basis used to evaluate salaries and other
compensation of the other executive officers. The Committee's determination of
an appropriate level of compensation for the Chief Executive Officer was based
on a comparison of the Company's actual performance with the projected
performance and the responsibilities of the Chief Executive Officer within the
Company. The Committee recommended that Mr. Hughes' salary for 1999 remain at
$250,000.
Clay M. Biddinger Bruce Culpepper David McIntosh
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the foregoing
Report of the Compensation Committee on Executive Compensation and the
Stockholder Return Performance Graph shall not be incorporated by reference into
any such filings.
16
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the monthly percentage change
in the cumulative total stockholder return on the Company's Common Stock against
the cumulative total return of the Nasdaq Market Index and the Nasdaq Financial
Index for the period commencing on July 30, 1998 (the date of the Company's
initial public offering of Common Stock) and ending December 31, 1999 (the
"Measuring, Period"). The graph assumes that the value of the investment in the
Company's Common Stock and each index was $100 on July 30, 1998. The change in
cumulative total return is measured by dividing (i) the sum of (A) the
cumulative amount of dividends for the Measuring Period, assuming dividend
reinvestment, and (B) the change in share price between the beginning and end of
the Measuring Period, by (ii) the share price at the beginning of the Measuring
Period. The Company has not paid any cash dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
FLORIDA BANKS, INC., NASDAQ MARKET INDEX AND
NASDAQ FINANCIAL INDEX
[graphic omitted]
7/30/98 12/98 6/99 12/99
------- ----- ---- -----
Florida Banks, Inc. $100 $ 76 $ 77 $ 59
Nasdaq $100 $116 $142 $214
Nasdaq Financial Stocks $100 $ 96 $106 $ 95
17
<PAGE>
RATIFICATION OF PROPOSAL TWO
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has served as independent auditors of the Company
for the fiscal year ended December 31, 1999 and have been selected by the Board
of Directors to serve as independent auditors of the Company for the fiscal year
ending December 31, 2000. Deloitte & Touche LLP is familiar with the Company's
business and management. The Board of Directors believes that Deloitte & Touche
LLP has the personnel, professional qualifications and independence necessary to
act as the Company's independent auditors.
Representatives of Deloitte & Touche LLP are expected to be present at
the shareholders' meeting and will have the opportunity to make a statement if
they desire to do so and to respond to appropriate questions.
Although stockholder approval of the Company's auditors is not
required, the Board of Directors is submitting such appointment to a vote of the
Company's stockholders. Approval of this proposal will require the affirmative
vote of the holders of a majority of the shares of Common Stock present in
person or by proxy and entitled to vote. In the event this proposal is not
approved, management will reconsider its selection of Deloitte & Touche LLP as
independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE RATIFICATION
OF DELOITTE & TOUCHE LLP AS AUDITORS
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, as filed with the Securities and Exchange Commission, is
available to shareholders who make written request therefor to the Company's
Investor Relations Department, 5210 Belfort Road, Suite 310, Jacksonville,
Florida 32256. Copies of exhibits and basic documents filed with that report or
referenced therein will be finished to shareholders of record upon request.
SHAREHOLDER PROPOSALS
The deadline for submission of shareholder proposals pursuant to Rule
14a-8 of the Securities Exchange Act of 1934 for inclusion in the Company's
proxy statement for the 2001 Annual Meeting of Shareholders is December 14,
2000. Additionally, the Company must receive notice of any shareholder proposal
to be submitted at the 2001 Annual Meeting of Shareholders (but not required to
be included in the Company's proxy statement) by February 28, 2001, or such
proposal will be considered untimely pursuant to Rule 14a-4 and 14a-5(e) under
the Exchange Act and the persons named in the proxies solicited by management
may exercise discretionary voting authority with respect to such proposal.
18
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the annual meeting. However, if other matters should come before the annual
meeting it is the intention of the persons named in the enclosed form of Proxy
to vote the Proxy in accordance with their judgment of what is in the best
interest of the Company.
By Order of the Board of Directors,
/s/ Charles E. Hughes, Jr.
CHARLES E. HUGHES, JR.
President and Chief Executive Officer
Jacksonville, Florida
April 14, 2000
