P.O. Box 33042, St. Petersburg, Florida 33733
[LOGO] NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
[LOGO]
March 10, 1997
To the Common Shareholders:
The Annual Meeting of Shareholders of Florida Progress
Corporation (the "Company") will be held at the Omni Rosen
Hotel, 9840 International Drive, Orlando, Florida, on
Thursday, April 17, 1997, at 9:00 A.M., for the following
purposes:
1. To elect four directors to serve for a three-year
term;
2. To vote upon two shareholder proposals as set
forth in the accompanying proxy statement;
and to transact such other business as may properly come
before the meeting, or any adjournment thereof.
The Board of Directors has fixed the close of business
on February 6, 1997, as the record date for the
determination of the shareholders entitled to notice of,
and to vote at, the meeting and any adjournment thereof.
A complete list of the shareholders entitled to vote at the
meeting will be open to examination by the shareholders,
during regular business hours, for a period of ten days
prior to the meeting at the principal executive offices of
the Company, One Progress Plaza, St. Petersburg, Florida,
33701.
By order of the Board of Directors,
Kathleen M. Haley
Corporate Secretary
You are urged, whether you own one or many shares, to
mark, date, sign and promptly mail the enclosed Proxy in
the enclosed envelope, which requires no postage.
<PAGE>
Florida Progress Corporation, P. O. Box 33042, St. Petersburg, Florida 33733
March 10, 1997
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS/APRIL 17, 1997
This statement is furnished in connection with the
solicitation by the Board of Directors of Florida Progress
Corporation (the "Company") of proxies to be voted at the
Annual Meeting of Shareholders to be held at the Omni Rosen
Hotel, 9840 International Drive, Orlando, Florida, on
Thursday, April 17, 1997, at 9:00 A.M., or at any
adjournment thereof. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any
time prior to the voting thereof by giving written notice
of revocation to the Secretary of the Company at the
Company's principal executive offices at any time before
the proxy is voted, by executing and delivering a
later-dated proxy or by attending the Annual Meeting and
voting his or her shares in person. No such notice of
revocation or later-dated proxy, however, will be effective
unless and until received by the Company prior to or at
the Annual Meeting.
Shares of Common Stock, without par value (the "Common
Stock"), are the only outstanding voting securities of the
Company.
Only shareholders whose names appeared of record on
the books of the Company at the close of business on
February 6, 1997, are entitled to receive notice of and to
vote at the Annual Meeting and any adjournment thereof. As
of that date, there were 96,997,009 shares of Common Stock
outstanding. Each share is entitled to one vote for each
director to be elected and one vote for each other matter
to be considered. The attendance, in person or by proxy,
of the holders of a majority of the issued and outstanding
shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum to transact
business. The Florida Business Corporation Act (the
"FBCA") provides that directors are elected by a plurality
of the votes cast and all other matters are approved if the
votes cast in favor of the action exceed the votes cast
against the action (unless the matter is one for which the
FBCA, or other applicable laws, or the Company's articles
of incorporation require a greater vote). Therefore, under
the FBCA, abstentions and broker non-votes have no legal
effect, unless a specific percentage of those shareholders
entitled to vote is required by the FBCA, or other
applicable laws, or the Company's articles of incorporation
to approve a matter.
The cost of preparing and mailing proxy material and
soliciting proxies will be borne by the Company.
Solicitation of proxies from some shareholders will be made
by telephone or in person by regular employees of the
Company, who will receive no additional compensation
therefor. In addition, arrangements will be made with
brokerage firms and other custodians, nominees and
fiduciaries to forward solicitation material for the Annual
Meeting to beneficial owners, and the Company will
reimburse such firms for their expense in so doing.
This proxy statement and accompanying notice and form
of proxy are first being sent to the shareholders of the
Company on or about March 10, 1997.
Election of Directors
The Board of Directors of the Company consists of
eleven members, divided into three classes. The current
terms of the three classes expire in 1997 (Class I
directors), 1998 (Class II directors) and 1999 (Class III
directors). Directors are generally elected for three-year
terms.
<PAGE>
Four Class I directors with terms expiring in 2000 are
to be elected at the Annual Meeting. The Board of
Directors has nominated four persons, all of whom are
currently directors, to stand for election at the Annual
Meeting. The directors shall be elected by a plurality of
the votes cast, so that the four persons nominated for
election as Class I directors receiving the four highest
totals of votes cast in favor of his or her election will
be elected as Class I directors. Each share of Common Stock
entitles its holder to cast one vote in respect of each
director to be elected. Votes may not be cumulated.
It is the intention of the persons named in the
accompanying proxy, unless otherwise directed, to vote all
proxies FOR the election of the four nominees of the Board
of Directors as directors of the Company. Directors
elected at the Annual Meeting, after being duly qualified,
will serve until their successors are elected and
qualified.
The Board of Directors has been informed that all
nominees are willing to serve as directors, but if any of
them should decline or be unable to serve as a director,
the persons named in the accompanying proxy will vote for
the election of another person or persons as they, in their
discretion, may choose. The Board of Directors has no
reason to believe that any nominee will be unable or
unwilling to serve.
Information as to Nominees
The names and ages of the nominees for election as
directors, their principal occupations and employment
during the past five years, including a brief biography,
and the first year elected as a director, are as follows:
<TABLE>
<CAPTION>
NOMINEES FOR TERMS EXPIRING IN 2000
(CLASS I DIRECTORS)
<S> <C>
- - - - - - - - - MICHAEL P. GRANEY, age 53, Partner, Simpson Thacher Bartlett,
- - - - - - - - - Columbus, Ohio. He has practiced law with this New York based law
- - - - - - - - - firm since 1980 and is now resident partner in its Ohio office. His
- --PHOTO - specialties are utilities, antitrust and litigation. He is a member of the
- - - - - - - - - American, District of Columbia, Ohio and Columbus Bar Associations
- - - - - - - - - and the Federal Energy Bar Association. Committees: Executive;
- - - - - - - - - Compliance; Nominating, Chairman; Director since 1991
- - - - - - - - - RICHARD KORPAN, age 55, President and Chief Operating Officer
- - - - - - - - - of the Company, positions he has held for more than five years.
- - - - - - - - - Since April 1996, he has also served as Chairman of the Board and
- - -PHOTO- Chief Executive Officer of Florida Power Corporation ("Florida
- - - - - - - - - Power"). He joined the Company in 1989 as Executive Vice President
- - - - - - - - - and Chief Financial Officer. He is a director of SunTrust Bank of
- - - - - - - - - Tampa Bay and Acordia Central Florida, Inc. Committees: Executive;
Finance and Budget. Director since 1989
<PAGE>
- - - - - - - - - JOAN D.RUFFIER, age 57, General Partner, Sunshine Cafes, Ltd.,
- - - - - - - - - Orlando, Florida, a food and beverage concession business at major
- - - - - - - - - Florida airports, a position she has held for more than five years.
- - - PHOTO- Previously, she practiced public accounting with the firm of Colley,
- - - - - - - - - Trumbower & Howell. She is a director of Florida Power and also
- - - - - - - - - serves on the boards of directors of Cyprus Equity Fund and
- - - - - - - - - INVEST, Inc. Committees: Audit; Compliance, Chairman; Finance and
Budget; Director since 1990
- - - - - - - - - ROBERT T. STUART, JR., age 64, Rancher and Investor, Dallas,
- - - - - - - - - Texas, for more than five years. He held numerous executive
- - - - - - - - - positions with Mid-Continent Life Insurance Company ("Mid
- - -PHOTO- - - - Continent") since 1949, including Vice President, President, Chairman
- - - - - - - - - of the Board and Chief Executive Officer until 1986 when
- - - - - - - - - Mid-Continent was acquired by the Company. Committee:
- - - - - - - - - Executive. Director since 1986
</TABLE>
Information as to Continuing Directors
The names and ages of directors who continue in terms
expiring in 1998 and 1999, their principal occupations, and
employment during the past five years, including a brief
biography, and the first year elected as a director, are as
follows:
<TABLE>
<CAPTION>
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1998
(CLASS II DIRECTORS)
<S> <C>
- - - - - - - - - W. D. ("BILL") FREDERICK, JR., age 62, citrus grower and investor,
- - - - - - - - - Orlando, Florida. From 1980 to 1992 Mr. Frederick served as Mayor
- - - - - - - - - of the City of Orlando. He practiced law as a public defender for the
- - - PHOTO - - - Ninth Judicial Circuit of Florida and in 1966 founded the Orlando law
- - - - - - - - - firm of Frederick, Wooten & Honeywell P.A. He returned to the
- - - - - - - - - practice of law in 1992 as a partner in the Orlando office of the firm
- - - - - - - - - of Holland & Knight from which he retired in 1995. He is a member
of the Board of Directors of Atlantic Gulf Communities, Inc. and Blue
Cross/Blue Shield of Florida. Committees: Compensation;
Compliance. Director since 1995
<PAGE>
- - - - - - - - - VINCENT J. NAIMOLI, age 59, Chairman, President and Chief
- - - - - - - - - Executive Officer of Anchor Industries International, Inc., an operating
- - - - - - - - - and holding company in Tampa, Florida, a position he has held for
- - - PHOTO - - - more than five years. He is also Managing General Partner of the
- - - - - - - - - Tampa Bay Devil Rays, Ltd. baseball partnership, St. Petersburg,
- - - - - - - - - Florida. He serves as a consultant to Harvard Industries, Inc., an
- - - - - - - - - original automotive equipment manufacturing company. In
conjunction with the business activities of Anchor Industries, Mr.
Naimoli serves as a director of New River Industries, Russell Stanley
Corp. and Simplicity Pattern Company. Committees: Finance and
Budget; Nominating. Director since 1992
- - - - - - - - - CHARLES B. REED, age 55, Chancellor of the State University
- - - - - - - - - System of Florida, Tallahassee, Florida. He has been Chancellor
- - - - - - - - - since 1985. Previously, he served as Deputy Chief and Chief of Staff
- - - PHOTO - - - to Florida Governor Bob Graham. He is a director of Capital Health
- - - - - - - - - Plan of Tallahassee. Committees: Finance and Budget; Nominating.
- - - - - - - - - Director since 1992
DIRECTORS WHOSE TERMS EXPIRE IN 1999
(CLASS III DIRECTORS)
- - - - - - - - - JACK B. CRITCHFIELD, age 63, Chairman of the Board and Chief
- - - - - - - - - Executive Officer of the Company, positions he has held for more
- - - - - - - - - than five years. Since 1983, he has held numerous executive
- - - PHOTO - - - positions with the Company and its subsidiaries including President,
- - - - - - - - - Chief Operating Officer, Group Vice President, President of Electric
- - - - - - - - - Fuels Corporation ("Electric Fuels") and Vice President of the Eastern
- - - - - - - - - and Ridge Divisions of Florida Power. He has been a director of
Florida Power since 1988 and served as a director from 1975 through
1978 and as Chairman of its Board from 1990 until April 1996. He
is a director of Barnett Banks, Inc., Jacksonville. Committee:
Executive, Chairman. Director since 1988
- - - - - - - - - CLARENCE V. MCKEE, ESQ., age 54, Chairman and Chief Executive
- - - - - - - - - Officer of McKee Communications, Inc., Tampa, Florida, a firm
- - - - - - - - - involved in the acquisition and management of television and radio
- - - PHOTO - - - stations. He served as Counsel to Pepper & Corazinni, a
- - - - - - - - - Washington, D.C. communications law firm, from 1980 until 1987
- - - - - - - - - when he became a co-owner of WTVT Holdings, Inc., where he held
- - - - - - - - - the position of Chairman and Chief Executive Officer until 1992. He
is a director of Barnett Banks, Inc., Florida Power, American Heritage
Life Insurance Company, and Checkers Drive In Restaurants, Inc.
Committees: Compensation; Audit, Chairman. Director since 1989
<PAGE>
- - - - - - - - - RICHARD A.NUNIS, age 64, Chairman of Walt Disney Attractions,
- - - - - - - - - Orlando, Florida. He has held various positions with the Disney
- - - - - - - - - organization since 1955, including Vice President, Operations in
- - - PHOTO - - - 1968, Executive Vice President of DISNEYLAND and Walt Disney
- - - - - - - - - World in 1972, President of Walt Disney Attractions in 1980, and his
- - - - - - - - - current position since 1991. He is a director of The Walt Disney
- - - - - - - - - Company and SunTrust Bank, Central Florida N.A. Committees:
Executive; Compensation; Finance and Budget, Chairman. Director
since 1989
- - - - - - - - - JEAN GILES WITTNER, age 62, President of Wittner & Co., Wittner
- - - - - - - - - Securities, Inc., and Wittner & Associates, Inc., St. Petersburg,
- - - - - - - - - Florida, firms involved in real estate management, insurance
- - - PHOTO - - - brokerage and consulting, positions she has held for more than five
- - - - - - - - - years. She previously served as President and Chief Executive Officer
- - - - - - - - - of a savings association until it was sold in 1986. She serves on the
- - - - - - - - - boards of Florida Power and Raymond James Bank, F.S.B.,
Committees: Audit; Compensation, Chairman; Compliance. Director
since 1982
</TABLE>
Security Ownership of Certain Beneficial Owners
The following table sets forth information concerning
shares of Common Stock that are held by persons known to the
Company to be the beneficial owners of more than 5% of said
stock as of December 31, 1996.
<TABLE>
<CAPTION>
Number of Shares Percent
Name and Address Beneficially Owned(1) of Class
<S> <C> <C>
Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404 6,652,575 6.9%
</TABLE>
Security Ownership of Management
The directors and nominees and all other named executive
officers individually, and the directors, nominees, named
executive officers and executive officers of the Company as a
group, beneficially owned Common Stock as follows:
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned(1) Class (2)
<S> <C> <C>
Jack B. Critchfield 38,377
W. D. ("Bill") Frederick, Jr. 2,182
Michael P. Graney 2,971(3)
Richard Korpan 17,339
Clarence V. McKee 2,436
Vincent J. Naimoli 6,353
Richard A. Nunis 18,658
Charles B. Reed 2,665
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned(1) Class (2)
<S> <C> <C>
Joan D. Ruffier 3,750
Robert T. Stuart, Jr. 1,506,404(4) 1.55%
Jean Giles Wittner 9,444
Kenneth E. Armstrong 2,335
Joseph H. Richardson 10,062
Jeffrey R. Heinicka 2,339
All 15 directors, nominees and
executive officers as a group, 1,636,858 1.69%
including those named above
</TABLE>
(1) As used in this table, "beneficial ownership" means the
direct or indirect, sole or shared power to vote, or to
direct the voting of, a security and/or investment power
with respect to a security. Unless otherwise noted, the
number of shares held are beneficially owned as of
December 31, 1996.
(2) Unless otherwise noted, less than 1% per individual.
(3) Includes 227 shares owned by Mr. Graney's son, as to which
shares Mr. Graney disclaims beneficial ownership.
(4) Includes 594 shares owned by Mr. Stuart's children, as to
which shares Mr. Stuart disclaims beneficial ownership.
Certain Relationships and Related Transactions
The Company is a party to certain transactions involving
the Tampa Bay Devil Rays major league baseball team in which
Vincent J. Naimoli, a director of the Company, has a material
interest. See "Compensation Committee Interlocks and Insider
Participation" on page 7.
Mr. Michael P. Graney is a partner in the law firm of
Simpson Thacher & Bartlett. That firm provided legal services
to the Company and Electric Fuels in 1996, and has been
providing legal services to the Company and Electric Fuels
during 1997.
Meetings of the Board of Directors and Standing Committees
During 1996, the Board of Directors held seven meetings.
In addition, certain directors attended standing committee
meetings, including the following:
Audit Committee. During 1996, the Audit Committee met four
times to review the financial statements and results of the 1995
audit, to recommend independent auditors for 1996 and to
discuss plans and objectives for internal audit activities for
1997.
Compensation Committee. During 1996, the Compensation
Committee met four times to review and approve the total
compensation opportunities and awards for the executive officers
of the Company and Florida Power, and to take actions relating
to the basic design of the Company's compensation and benefit
policies for all employees of the Company and its subsidiaries.
Nominating Committee. The Nominating Committee held no
meetings during 1996. The Committee will consider
recommendations for nominees for election to the Board of
Directors submitted by shareholders. These nominations should
be submitted to the Secretary of the Company for review by the
Committee. Such nominations for the 1998 Annual Meeting of
Shareholders should be submitted no later than November 10,
1997.
The Company also has Executive, Finance and Budget and
Compliance Committees. Members of all committees are identified
in the sections titled "Information as to Nominees" and
"Information as to Continuing Directors." During 1996, all
directors attended at least 75% of the total number of Board and
pertinent committee meetings.
<PAGE>
Compensation of Directors
At the 1996 Annual Meeting, the Company's shareholders
approved the Stock Plan for Non-Employee Directors of Florida
Progress Corporation and Subsidiaries (the "Director Plan").
Under the terms of the Director Plan, during 1996, 75% of each
non-employee director's $30,000 retainer fee was paid quarterly
in arrears in Common Stock. In addition, non-employee directors
were paid $1,500 for attendance at each meeting of the Company's
Board of Directors and a per day meeting fee of $1,500 for
subsidiary, committee and special meetings attended on any one
day. A $750 meeting fee was also paid to each Committee
Chairman for each meeting chaired. The cash portion of
directors' compensation is allowed to be deferred.
In accordance with the six practices adopted by the Board
in November 1995 with regard to director compensation, the
Compensation Committee meets each year to review all elements of
director compensation. In November of 1996, the Compensation
Committee reviewed the total value of all forms of director
compensation and determined that its current objectives to
increase stock ownership and provide directors with a fair and
competitive compensation package are being met. No adjustments
were recommended at this time.
Compensation Committee Interlocks and Insider Participation
The following persons served as members of the Compensation
Committee of the Board of Directors of the Company during 1996:
W. D. ("Bill") Frederick, Jr.; Vincent J. Naimoli (until July
30, 1996); Clarence V. McKee; Richard A. Nunis; and Jean Giles
Wittner. None of these individuals was during 1996, or
formerly, an officer or employee of the Company or any of its
subsidiaries.
The Company has invested $5 million for a 6.10% limited
partnership interest in the Tampa Bay Devil Rays, Ltd. ("Devil
Rays"), a Florida limited partnership that acquired in 1995 a
Major League Baseball franchise for the Tampa Bay area. A
corporation controlled by Vincent J. Naimoli, a director and
member of the Compensation Committee until July 30, 1996, is the
managing general partner and a limited partner in the Devil
Rays. Mr. Naimoli has a total indirect interest of 17.68% in
the Devil Rays. The foregoing percentage capital interests are
subject to change should additional investors be admitted to the
Devil Rays. The Company has also executed a Private Suite
License Agreement ("License") with the Devil Rays for the use of
a private suite to be constructed in Tropicana Field located in
St. Petersburg, Florida. The License fee in the amount of
$125,000 per year is subject to annual increases over the five-
year term of the License equal to 2.5% plus the percentage
increase in the Consumer Price Index. The term of the License
is expected to commence in 1998 and no later than the date of
the first regular championship season game scheduled to be
played by the Devil Rays baseball team in Tropicana Field. The
terms and conditions of the License are substantially similar to
those entered into with other licensees.
Executive Compensation
The following table contains information with respect to
compensation awarded, earned or paid during the years 1994-1996
to (i) the Chief Executive Officer ("CEO") of the Company; and
(ii) the other four most highly compensated executive officers
of the Company (collectively the "Named Executive Officers")
whose total remuneration paid in 1996 exceeded $100,000.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation (1) Payouts
(a) (b) (c) (d) (h) (i)
Name and Principal Position LTIP All Other
Year Salary Bonus Payouts(2) Compensation(3)
<S> <C> <C> <C> <C> <C>
JACK B. CRITCHFIELD 1996 $672,581 $498,000 $505,252(4) $25,060
Chairman and Chief
Executive Officer 1995 589,992 382,500 465,654 22,715
1994 589,992 346,000 345,636 23,910
RICHARD KORPAN 1996 $535,610 $333,500 $339,107(4) $18,900
President and Chief
Operating Officer 1995 440,003 257,000 284,109 19,800
1994 432,311 232,500 206,455 18,060
JOSEPH H. RICHARDSON 1996 $288,884 $214,000 $128,858(4) $16,585(5)
Group Vice President
and President and Chief 1995 215,009 113,000 110,473 8,835
Operating Officer, Florida
Power Corporation 1994 212,122 88,500 81,326 4,226
JEFFREY R. HEINICKA 1996 $258,456 $169,000 $113,139(4) $ 8,595
Senior Vice President and
Chief Financial Officer 1995 211,200 100,000 N/A 8,325
1994 174,723 76,000 N/A 7,943
KENNETH E. ARMSTRONG 1996 $212,785 $144,500 $101,748(4) $ 8,010
Vice President and
General Counsel 1995 197,995 77,000 N/A 8,910
1994 196,459 70,000 N/A 8,436
</TABLE>
(1) All other annual compensation paid to the Named
Executive Officers during 1996, other than salary
and annual incentive compensation, does not exceed
the minimum amounts required to be reported
pursuant to Securities and Exchange Commission
rules.
(2) The number of shares of restricted Common Stock
held by the Named Executive Officers as of December
31, 1996 as a result of awards earned under the
1992-1994 and 1993-1995 performance cycles, and the
value of such shares, is as follows: Jack B.
Critchfield 10,771 shares, $347,365; Richard Korpan
6,527 shares, $210,496; Joseph H. Richardson 2,548
shares, $82,173; Jeffrey R. Heinicka -0-; and
Kenneth E. Armstrong -0-.
(3) Company contributions to its Savings Plan and its
Executive Optional Deferred Compensation Plan on
behalf of the Named Executive Officers.
(4) Represents the dollar value as of February 20,
1997, the date of award, of shares of Common Stock
earned under the 1994-1996 performance cycle of the
Company's Long-Term Incentive Plan ("LTIP"), two-
thirds of which are restricted. The total number
of shares earned, including dividend equivalent
shares, is as follows: Jack B. Critchfield,
16,233 shares; Richard Korpan, 10,895 shares;
Joseph H. Richardson, 4,140 shares; Jeffrey R.
Heinicka, 3,635 shares; and Kenneth E. Armstrong,
3,269 shares. The vesting schedule for the
restricted stock is 50% on January 1, 1998 and 50%
on January 1, 1999.
See the discussion of the method of calculating
payouts contained in the Long-Term Incentive
Compensation portion of the Compensation Committee
Report of the Board of Directors on page 12.
Dividends are payable on the restricted Common
Stock to the extent and on the same date as
dividends are paid on all other Common Stock.
In the event of a change in control of the Company,
all restrictions on all shares of restricted stock
shall lapse upon such change in control.
(5) Represents $8,835 in Company Contributions to the
Savings Plan of Florida Progress and the Executive
Optional Deferred Compensation Plan and $7,750 of
director fees for services as a director of Echelon
International Corporation, a former subsidiary of
Florida Progress.
<PAGE>
The following table contains information with
respect to performance shares granted in 1996 to the Named
Executive Officers of the Company for the 1996-1998
performance cycle of the LTIP:
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN(1)
AWARDS IN 1996
Number of Performance
Performance Period Estimated Payout at End of Period (3)
Name Shares (2) Covered Threshold Target Maximum
<S> <C> <C> <C> <C> <C>
Kenneth E. Armstrong 2,414 1996-1998 1,207 shares 2,414 shares 3,621 shares
Jack B. Critchfield 13,460 1996-1998 6,730 shares 13,460 shares 20,190 shares
Jeffrey R. Heinicka 2,975 1996-1998 1,488 shares 2,975 shares 4,463 shares
Richard Korpan 7,719 1996-1998 3,860 shares 7,719 shares 11,579 shares
Joseph H. Richardson 4,211 1996-1998 2,106 shares 4,211 shares 6,317 shares
</TABLE>
(1) The LTIP is a Common Stock-based incentive plan to
reward participants for long-term growth and
performance of the Company. It was approved by the
shareholders in 1990. See the Long-Term Incentive
Compensation portion of the Report of the Compensation
Committee of the Board of Directors on page 12 for
additional information.
(2) Performance shares granted under the LTIP which, upon
achievement of performance criteria, would result in
the payout of shares of Common Stock of the Company,
two-thirds of which would be restricted for periods of
time. Payouts of shares of Common Stock are made for
achieving financial goals, equal to or exceeding the
thresholds determined by the Compensation Committee.
In the event of a change in control of the Company,
150% of all performance shares granted under the LTIP
and then outstanding would automatically be considered
earned and would be paid in shares of unrestricted
Common Stock together with shares of unrestricted
Common Stock payable for dividend equivalents accrued
to the change in control. Also, all restrictions on
shares of restricted Common Stock previously awarded
and then held would lapse.
(3) Grants of performance shares are earned upon
achievement of Company or subsidiary financial goals
for the three-year performance cycle.
Pension Plan Table
The table below illustrates the estimated annual benefits
(computed as a straight life annuity beginning at retirement at
age 65) payable under the Company's Retirement Plan and
Nondiscrimination Plan for specified final average compensation
and years of service levels. As explained below, the table also
provides information about the estimated annual lifetime
benefits payable under the Company's Supplemental Executive
Retirement Plan ("SERP").
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits Payable Under
the Retirement Plan and Nondiscrimination Plan
Average Annual
Compensation Service Years
5 10 15 20 25 30 35 or more
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 18,000 $ 36,000 $ 54,000 $ 72,000 $ 90,000 $108,000 $126,000
300,000 27,000 54,000 81,000 108,000 135,000 162,000 189,000
400,000 36,000 72,000 108,000 144,000 180,000 216,000 252,000
500,000 45,000 90,000 135,000 180,000 225,000 270,000 315,000
600,000 54,000 108,000 162,000 216,000 270,000 324,000 378,000
700,000 63,000 126,000 189,000 252,000 315,000 378,000 441,000
800,000 72,000 144,000 216,000 288,000 360,000 432,000 504,000
900,000 81,000 162,000 243,000 324,000 405,000 486,000 567,000
1,000,000 90,000 180,000 270,000 360,000 450,000 540,000 630,000
1,100,000 99,000 198,000 297,000 396,000 495,000 594,000 693,000
1,200,000 108,000 216,000 324,000 432,000 540,000 648,000 756,000
1,300,000 117,000 234,000 351,000 468,000 585,000 702,000 819,000
1,400,000 126,000 252,000 378,000 504,000 630,000 756,000 882,000
1,500,000 135,000 270,000 405,000 540,000 675,000 810,000 945,000
</TABLE>
<PAGE>
Under the Retirement Plan and the Nondiscrimination
Plan, the compensation taken into account in calculating
benefits is salary only. The years of credited service
that would be used in calculating benefits under the
Retirement Plan and the Nondiscrimination Plan for the
Named Executive Officers in the summary compensation table
are as follows: Dr. Critchfield, 13 years of service; Mr.
Korpan, 8 years of service; Mr. Richardson, 21 years of
service; Mr. Heinicka, 19 years of service; and Mr.
Armstrong, 10 years of service. The benefits under the
Retirement Plan and the Nondiscrimination Plan are subject
to offset by an amount equal to 1 1/7% of a participant's
primary Social Security benefit for each year of service
(with a maximum offset of 40%).
The Named Executive Officers are also entitled to
benefits under the SERP. These benefits are offset by the
benefits payable under the Retirement Plan and the
Nondiscrimination Plan, as well as 100% of the executive's
primary Social Security benefit. The estimated annual SERP
benefit for the Named Executive Officers (prior to any
offsets) may be determined using the Pension Plan Table set
forth on page 9 for the Retirement Plan and the
Nondiscrimination Plan. For these purposes, the current
compensation for each executive that would be used in
calculating benefits under the SERP is substantially the
same as that reported as salary and bonus in the summary
compensation table, and the number of years of deemed
credited service that would be used in calculating benefits
under the SERP for each such executive is as follows: Dr.
Critchfield, 35 years of service; Mr. Korpan, 35 years of
service; Mr. Richardson, 21 years of service; Mr. Heinicka,
19 years of service; and Mr. Armstrong, 15 years of
service. .
Accrued benefits may also be paid under each of the
Retirement Plan, Nondiscrimination Plan and the SERP if a
participant terminates employment before age 65 and meets
the requirements for early retirement, disability, death or
other termination of employment benefits after becoming
vested under the rules of the particular plan.
The SERP also provides for a lump sum benefit payable
in the event of a change in control. In most instances,
this benefit is equal to the sum of (1) two times the
executive's current annual salary and bonus, (2) the value
of the executive's prospective award under the SERP if he
were to continue to work until age 65 (including amounts
that later would have been payable to any surviving spouse)
and (3) the amount of any federal excise taxes (and income
taxes on any reimbursement under this provision) imposed on
the executive under Section 4999 of the Internal Revenue
Code with respect to all compensation plans and
arrangements of the Company.
Employment Contracts
In 1995, the Company entered into an employment
contract with Mr. Korpan. The term of the agreement is
from June 1, 1995 through March 1, 1998, with automatic
one-year extensions on each March 1, unless either party
gives 90 days' written notice to the contrary. His annual
base salary will not be less than $440,000 with award
opportunities as a participant in the Management Incentive
Compensation Plan ("MICP") and LTIP of not less than 45% of
base salary for each plan. Severance pay established in
the agreement is three times annual base pay and MICP
target amount. All unvested Common Stock previously
awarded under the LTIP would vest and all LTIP-imposed
restrictions would lapse. Severance pay is due upon
termination by the Company without cause or upon
termination by the employee for good reason. The agreement
contains a covenant not to compete. The Company will pay
the employee's attorneys fees in the event of an action to
enforce the agreement after a change-in-control.
Report of the Compensation Committee of the Board of
Directors
Executive Compensation Design
The Company's executive compensation system is
intended to attract, retain and motivate high quality
executives with individually tailored market- and
performance-based compensation packages that reward
protection of Company assets and enhancement of shareholder
value. The Compensation Committee of the Board of
Directors of Florida Progress Corporation (the
"Committee"), comprised solely of outside
<PAGE>
directors, approves total compensation opportunities and awards for
executive officers of the Company and Florida Power. The
target compensation for each executive officer is
established annually by the Committee and is made up of
three principal components: base salary; annual incentive
cash compensation; and long-term incentive compensation
payable in Common Stock. A significant portion of each
executive officer's total target compensation is variable,
at risk and dependent upon the Company's annual and long-
term performance.
In determining target compensation, the Committee
reviews market values prepared by human resource
professionals established from several independent surveys
based upon an equal blend of compensation levels of both
electric power and general industry median rates, where
possible. This philosophy is intended to reflect the
changing nature of the utility industry and to recognize
the fact that pay practices in the future must be adequate
to attract talented employees from industries other than
solely electric utilities. In 1996, the Committee received
a comparison of target compensation for each executive
officer based on survey data from two, separate outside
consultants.
The Committee believes its "pay-for-performance"
program, which compensates an executive officer at his or
her target level of compensation only if specific goals are
achieved, is a fair way to structure an executive
compensation program. The program rewards executives for
meeting financial targets, thus producing benefits for the
entire Company and its shareholders.
A discussion of the three compensation components and
the actions taken by the Committee with respect to
compensation reported for 1996 for the Named Executive
Officers including the CEO follows.
Base Salary
The base salary component is based, in most instances,
on an equal weighting of market data from both utility and
general industry sources. An executive officer's base
salary will vary within this competitive framework based on
experience, responsibilities, leadership and performance.
As a result of the retirement of Florida Power's CEO and
restructuring of the utility's operations in 1996, most of
the Named Executive Officers were given increased
responsibilities. In addition, updated market data showed
increases were appropriate for almost all executive
officers. These increases are reflected in the Summary
Compensation Table. The CEO's base salary was increased
based on the Committee's determination that the updated
market data and the CEO's performance warranted the
increase.
Annual Incentive Cash Compensation
The Company's MICP provides annual incentive cash
compensation opportunities to officers and key employees of
the Company and its subsidiaries (including the Named
Executive Officers) by creating performance award pools
associated with the achievement of corporate goals. The
goals associated with the threshold, target and maximum
funding levels for each performance award pool under the
MICP are established by the Committee, based upon objective
measures of corporate performance. For 1996, the goals
established by the Committee for the performance award
pools in which each of the Named Executive Officers was a
participant were based upon return-on-equity goals for the
Company's principal operating subsidiaries s well as
operating and maintenance expense, capital expenditure and
revenue and cost savings goals at Florida Power. The
Committee considers the projections and assumptions
contained in the relevant annual profit plan in
establishing threshold, target and maximum funding level
goals for each performance award pool. Executive officers
having responsibility primarily for a single operating
subsidiary were assigned to subsidiary performance award
pools having goals based solely on that subsidiary's
performance. Executive officers having Company-wide
responsibilities were assigned to the holding company
performance award pool whose goals were a composite of
weighted, operating subsidiary goals. The Committee
explicitly retains discretion to take into account, in
determining if performance goals were met, whether
assumptions contained in the relevant profit plan were in
fact valid, and if they were
<PAGE>
not, to make appropriate adjustments to reported financial results for
purposes of computing goal achievement levels.
Performance award pool funding levels typically are
based upon a mathematical function of pool participants'
target annual incentive cash compensation opportunity
(expressed as a percentage of base salary) and the pool
goal level achieved. The Committee may exercise its
discretion in approving the amount of the award pool and
the specific amount of the annual incentive cash
compensation to be paid to executive and other key officers
from the appropriate pools based upon the Committee's
subjective evaluation of the officer's overall
contributions to the Company. The Committee takes into
account recommendations of the CEO in approving annual
incentive cash compensation for individual executive and
key officers (other than the CEO).
The 1996 annual incentive compensation targets for the
Named Executive Officers (other than the CEO) ranged from
40% to 50% of base salary. These targets were increased
from the 1995 percentages for all of the Named Executive
Officers as part of the review of total compensation
targets taking into account the increased responsibilities
and changes in market data. The CEO's 1996 target annual
incentive compensation was increased to 60% of his base
salary.
The amounts contained in the bonus column of the
Summary Compensation Table for the Named Executive Officers
(other than the CEO) for 1996 are the result of the
Committee's determination that 1996 results exceeded the
MICP threshold goals of Florida Power and that the 1996
results did not meet the threshold goal for Electric Fuels
for the Named Executive Officers. The amount contained in
the bonus column of the Summary Compensation Table for the
CEO for 1996 is based on the same results since the holding
company's MICP goals were weighted 85% on the Florida Power
goals and 15% on the goals of Electric Fuels. The amounts
contained in the bonus column for all the Named Executive
Officers were the result of the application of a
mathematical formula converting the goal levels achieved,
which were above threshold levels, into dollar amounts,
without the Committee making any discretionary adjustments.
In addition, Mr. Armstrong and Mr. Heinicka, as senior
officers of a task force of employees that devoted
significant efforts towards the successful spin-off of
Echelon International Corporation, each received a special
bonus in view of that accomplishment.
Long-Term Incentive Compensation
To facilitate executive stock ownership and align the
interest of key executives with that of the Company's other
shareholders in the long-term growth and performance of the
Company, the Committee awarded in 1996 the Named Executive
Officers the opportunity to earn Common Stock through the
grant of performance shares under the Company's LTIP, as
indicated in the table appearing on page 9. To date, under
the LTIP, the Committee has granted performance shares for
seven consecutive three-year performance cycles beginning
with the 1991-1993 performance cycle. To the extent
earned, performance shares are converted into shares of
Common Stock. Two-thirds of the Common Stock earned is
restricted for periods of time (see footnotes 2 and 4 to
the Summary Compensation Table). While restricted, such
stock is subject to forfeiture upon termination of
employment and thus is not vested. As a result, and
subject to certain exceptions (e.g. death, disability,
retirement or change in control), an LTIP participant would
not realize the full economic benefit of his award unless
he remains an employee for two years after the end of the
period for which it is earned. Thus, a portion of an LTIP
participant's total compensation for any year remains at
risk for five years thereafter.
The financial goals for the 1994-1996 performance
cycle of the LTIP were established, in accordance with the
administration policies adopted by the Committee, to be the
sum of the three annual MICP return-on-equity goals for the
three years in the relevant performance cycle (the "Cycle
IV goals"). The goal weighting used in the MICP is also
used for the LTIP goals.
The payouts listed in the Long-Term Compensation
column of the Summary Compensation Table for the Named
Executive Officers on page 8 for the 1994-1996 performance
cycle are the result of (i) the
<PAGE>
Committee's determination that the results exceeded the Cycle IV goals, after
taking into account the exclusion of a provision for loss on coal
properties in determining Electric Fuels's return-on-equity
(ii) the application of a mathematical formula converting
the goal level achieved into the number of performance
shares earned and (iii) adding dividend equivalents on
shares earned for the period of the performance cycle. The
CEO's LTIP payout was based on Florida Power's return on
equity, weighted 78%, and a composite return-on-equity of
certain Company non-utility subsidiaries, weighted 22%.
During 1996, the Committee approved the number of
performance shares granted to each Named Executive Officer
(other than the CEO) for the 1996-1998 performance cycle
that had a value on the date of grant equal to 40% or 50%
of 1996 base salary, depending on the total compensation
opportunity established by the Committee for each
executive. The percentages were increased from previous
performance cycles for all of the Named Executive Officers
as part of the review of total compensation targets taking
into account the increased responsibilities and changes in
market data. For the CEO, the number of performance shares
granted for the 1996-1998 performance cycle had a value on
the date of grant equal to 70% of his 1996 base salary.
This percentage was not increased from the previous
performance cycle.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code would deny
the Company a deduction for compensation paid to each Named
Executive Officer in a taxable year to the extent it
exceeds $1 million per officer, unless the compensation
qualifies as "performance based compensation." The
Committee approved an amendment to the Company's MICP in
1994 that provides for the mandatory deferral of annual
cash incentive compensation which would not qualify for a
Company tax deduction due to Section 162(m) of the Internal
Revenue Code until such time as it becomes deductible. The
Company was not able to take deduct the full amount of the
CEO's compensation for 1996 after the mandatory deferral,
although the amount of the foregone deduction was not
material.
Respectfully submitted,
Jean Giles Wittner, Chairman Vincent J. Naimoli - Member until July 30, 1996
W. D. ("Bill") Frederick, Jr. Richard A. Nunis
Clarence V. McKee
<PAGE>
Company Performance
The following graph compares the Company's
performance, as measured by the change in price of its
Common Stock plus reinvested dividends, with the Standard
& Poor's ("S & P") 500 stock index and the S & P Electric
Companies stock index for the five years ended December 31,
1996:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG FLORIDA PROGRESS CORPORATION, THE S & P 500 INDEX
AND THE S & p ELECTRIC COMPANIES INDEX
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995 1996
Florida Progress 100 111 121 115 145 145
Standard & Poor's 500 100 108 118 120 165 203
Standard & Poor's Electrics 100 106 119 104 136 136
</TABLE>
* $100 invested on 12/31/91 in stock or index--including reinvestment of
dividends. Fiscal year ending December 31.
<PAGE>
Relationship with Independent Accountants
The firm of KPMG Peat Marwick LLP, which has been the
Company's independent certified public accountants since
February 2, 1990, was recommended by the Audit Committee
and approved by the Board of Directors as the Company's
auditor for the year ended December 31, 1996.
Representatives of KPMG Peat Marwick are expected to be
present at the Annual Meeting, will have the opportunity to
make a statement if they desire to do so and are expected
to be available to respond to appropriate questions.
The Company has not yet selected its independent
auditors for the current year. The Audit Committee
presently intends to make its recommendation concerning the
Company's auditors no later than August 1997, in accordance
with past practice.
Shareholder Proposals
It is the intention of the persons named in the
accompanying proxy, unless otherwise directed, to vote all
proxies AGAINST the following shareholder proposals. The
shareholder proposals will be approved if the votes cast
for the proposal by holders of the shares represented at
the Annual Meeting and entitled to vote exceeds the votes
cast against the proposal.
1. Joseph E. Deddo, 2935 E. Buck Court, Inverness,
Florida 34452, a holder of 133 shares of the Company's
Common Stock, hereby notifies the Company of his intention
to present the following proposal for action at the Annual
Meeting:
RESOLVED: that the shareholders request the
Board of Directors to adopt a policy that
requires annual salary increases for executive
officers that are greater than 3% of their prior
year's salary to be approved by a vote of the
shareholders.
SHAREHOLDERS' SUPPORTING STATEMENT
Entitlements such as high executive salary must be
controlled to better benefit the Shareholders. In a year
where Florida Power Corp. was fined $500,000 dollars for
violations cited persistent problems of ineffective
management oversight and poor engineering work. In recent
years, the Compensation Committee has decided to tie an
executive's pay more closely to Company performance. From
1993 thru 1995, Customers Complaints to the Florida Public
Service Commission soared 109.5%. The Shareholders are
entitled to approve executive officers pay instead of
executives shifting $500,000 dollars in fines over to the
Shareholders, for ineffective management. Compensation is
earned not granted. THANK YOU FOR YOUR SUPPORT.
2. Frank R. LoBue, 12242 74th Avenue North, Seminole,
Florida 33722, the holder of record of 2,813 shares of the
Company's Common Stock, hereby notifies the Company of his
intention to present the following proposal for action at
the annual shareholders' meeting:
NOW, THEREFORE, BE IT RESOLVED, that the
shareholders request the Board of Directors to
limit, for long-term or otherwise, the Management
Incentive Compensation Plan, otherwise known as
"MICP", to an amount not greater than five
percent of the annual base salaries of each of
the five top executives and lesser amounts to
other beneficiaries of the plan; and further, to
limit the Long-Term Incentive Plan (LTIP) to an
amount of stock shares not greater than five
percent of the annual base salaries of each of
the five top executives and lesser amounts to the
other beneficiaries of the plan.
SUPPORTING STATEMENT
In keeping with the current budget cutbacks and
possible deregulation concerns, it is only reasonable to
expect a reduction in bonus programs to a more realistic
and conservative level. Since executive salaries and
expense accounts have increased considerably in the past
five years, large incentive bonus programs are no longer
feasible or fair to the shareholders and employees of the
Corporation. Excessive profits of
<PAGE>
the Corporation should be more equally distributed among shareholders,
employees, and retirement programs. By limiting the M.I.C.P. and
L.T.I.P., the Corporation could realize annual savings of
several million dollars.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THESE PROPOSALS FOR THE FOLLOWING REASONS
The Company believes that decisions regarding employee
compensation and its various performance incentive plans --
including the "Sharing the Success" incentive plan
implemented in 1996 for non-executive employees of the
Company and Florida Power -- should remain the
responsibility of the Company's management and Board of
Directors.
The proposals of former Florida Power employee LoBue
and current employee Deddo present their grievances with
management to the shareholders in the form of requests to
limit executive compensation. However, in providing
incentive programs like Sharing the Success, the Management
Incentive Compensation Plan, and the Long-Term Incentive
Compensation Plan, the Board of Directors believes it is
creating shareholder value by providing its workforce with
appropriate incentives that reward employees for the
contributions they make to the successful financial
performance of the Company and its subsidiaries.
Comparable incentive plans are in place at similarly sized
U.S. electric utilities.
The Board's Compensation Committee, comprised of four
outside directors, is charged with establishing target
compensation levels for executives based on data developed
through research of national industry standards and
consultations with internal and external compensation
professionals. Executive compensation is primarily
composed of salary and awards under incentive compensation
plans that together are targeted to provide a competitive
level of compensation. Incentive plan performance goals
are tied to financial performance and business unit and
individual contributions, thereby putting a significant
portion of the executive's total compensation at risk.
It is the philosophy of the Board of Directors that
executive compensation for all Florida Progress companies
be market driven. It is targeted at levels that allow the
Company to meet the demands of the competitive marketplace
for executive leadership. It is structured to provide a
financial stimulus and rewards for contributing to the
continued success of the Company. The recommended
limitations and restrictions put forward by the proponents
would place the Company at a competitive disadvantage to
the detriment of you, its owners.
ACCORDINGLY, THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST" THESE PROPOSALS
1998 Shareholder Proposals
Proposals of shareholders intended to be presented at
the 1998 Annual Meeting must be received for inclusion in
the proxy statement and form of proxy relating to that
meeting on or before November 10, 1997. Proposals should
be sent to the Secretary of the Company, Florida Progress
Corporation, P.O. Box 33042, St. Petersburg, Florida 33733.
General
In the event that any other matters properly come
before the Annual Meeting, the persons named in the form of
proxy intend to vote all proxies in accordance with their
judgment on such matters.
Enclosed is the Annual Report of the Company for the
year ended December 31, 1996. It is not to be regarded as
proxy soliciting material.
By order of the Board of Directors,
Kathleen M. Haley
Corporate Secretary
<PAGE>
[LOGO]
FLORIDA PROGRESS CORPORATION
I M P 0 R T A N T
YOUR PROXY CARD IS BELOW
Your proxy card is attached below. Please follow these steps:
1. Please clearly mark your voting selections on the reverse side.
2. Sign and date your card on the reverse side.
3. Please detach and return to us in the enclosed postage-paid
envelope.
4. Please help us avoid the expense of follow-up mailings by
completing and returning your proxy card promptly.
DETACH HERE FPC.F
FLORIDA PROGRESS CORPORATION - Annual Meeting, April 17, 1997
Proxy solicited on behalf of the Board of Directors
P
R
O
X The undersigned hereby appoints Jack B. Critchfield,
Y Richard Korpan and Kathleen M. Haley and each of them, with
power of substitution, proxies to represent, and to vote all
shares of Common Stock of Florida Progress Corporation,
which the undersigned is entitled to vote, at the Annual
Meeting of Shareholders to be held in Orlando, Florida on
April 17, 1997, at 9 a.m. EDT, and at any and all
adjournments thereof, and hereby revokes any prior proxies
given with respect to such stock, and the undersigned
authorizes the voting of such stock as follows on the
reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE Square
Box
with
"SEE
REVERSE
SIDE"
<PAGE>
[LOGO]
FLORIDA PROGRESS CORPORATION
I M P 0 R T A N T
YOUR PROXY CARD IS BELOW
Your proxy card is attached below. Please follow these steps:
1. Please clearly mark your voting selections.
2. Sign and date your card.
3. Please detach and return to us in the enclosed postage-paid envelope.
4. Please help us avoid the expense of follow-up mailings by completing
and returning your proxy card promptly.
DETACH HERE FPC.F
Square Please mark
box with votes as in
an X in this example.
it
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no contrary specification is made,
this proxy will be voted "FOR" the nominees listed in the Election of Class I
Directors, and "AGAINST" the Shareholder Proposals.
1. Election of Class I Directors
Nominees: Michael P. Graney, 2. Square box with "The Board of
Richard Korpan, Joan D. Ruffier Directors recommends a vote
Robert T. Stuart, Jr. "AGAINST" the following
following shareholder proposals
For Withheld MARK HERE square requesting the Board to:"
square square IF YOU PLAN box FOR AGAINST ABSTAIN
box box TO ATTEND THE sq. sq. sq.
MEETING A. Require shareholder box box box
approval of annual
salary increases for
executive officers
greater than 3%.
FOR AGAINST ABSTAIN
sq. sq. sq.
B. Limit the Management box box box
square Incentive Compensation
box______________________ Plan and the Long-Term
For all nominees except those Incentive Plan to amounts
written on the line above no greater than 5% of the
annual base salaries of
the top five executive
officers and lesser amounts
to others.
In their discretion, the proxies
are authorized to vote upon such
other matters as may properly come
before the meeting or any
adjournment thereof.
(Please mark, date, sign, detach and mail
in the enclosed envelope.)
When signing as attorney, executor,
administrator, trustee, or
guardian, please give title. For
joint account, each joint owner
should sign. If the signer is a
corporation, please sign full
corporation name by duly authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
Signature:______________ Date:________ Signature_________________ Date:_______
<PAGE>
APPENDIX TO THE ELECTRONIC FORMAT DOCUMENT
PAGE 14
Appearing above the table is a graph showing pictorially what is listed in the
table.
