SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FLORIDA PUBLIC UTILITIES COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1)Title of each class of securities to which transaction applies:
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2)Aggregate number of securities to which transaction applies:
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3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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5)Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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FLORIDA PUBLIC UTILITIES COMPANY
401 SOUTH DIXIE HIGHWAY
WEST PALM BEACH, FLORIDA 33401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 15, 1997
March 5, 1997
To the Common Stockholders of
FLORIDA PUBLIC UTILITIES COMPANY:
Notice is hereby given that the Annual Meeting of Stockholders of
Florida Public Utilities Company will be held at the Corporate Headqarters, 401
South Dixie Highway, West Palm Beach, Florida, on Tuesday, April 15, 1997, at
11:00 A.M., local time, for the following purposes:
1. To elect three directors;
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Further information regarding the business to be transacted at the
meeting is described in the accompanying Proxy Statement, which is hereby
made a part of this notice.
Only the holders of record of common stock at the close of business on
February 17, 1997 will be entitled to vote at the meeting or any adjournment
thereof. Whether or not you plan to attend the meeting, you are respectfully
requested to read the accompanying Proxy Statement and then date, sign and
return the enclosed proxy.
By order of the Board of Directors,
Jack R. Brown
Treasurer and Secretary
FLORIDA PUBLIC UTILITIES COMPANY
401 SOUTH DIXIE HIGHWAY
WEST PALM BEACH, FLORIDA 33401
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 15, 1997
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March 5, 1997
PROXY AND SOLICITATION
The accompanying proxy is solicited on behalf of the Board of Directors
of Florida Public Utilities Company (the "Company") for use at the Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held on
Tuesday, April 15, 1997, and at any adjournment thereof. A stockholder who
gives a proxy retains the right to revoke it any time before it is voted and
such revocation is not limited or subject to compliance with any formal
procedure. A proxy when given and not so revoked will be voted. This Proxy
Statement and the accompanying proxy are being mailed to stockholders commencing
on or about March 10, 1997.
The cost of soliciting proxies is to be borne by the Company. The
Company has retained Kissel-Blake Inc., 110 Wall Street, New York, New York
10005 to assist in the solicitation of proxies at an estimated cost of $4,000
plus reasonable out-of-pocket expenses. The Company will, upon request, pay
brokers and other persons holding stock in their names or in the names of
nominees their expenses for sending proxy material to principals and obtaining
their proxies. In addition to the solicitation of proxies by mail, proxies may
be solicited by personal interview, telephone or telegram by certain of the
Company's employees without compensation therefor.
STOCK OUTSTANDING AND VOTING RIGHTS
On February 17, 1997, the Company had outstanding 1,478,771 shares of
common stock (exclusive of 19,463 shares held of record by its wholly-owned
subsidiary, Flo-Gas Corporation, and 89,460 shares held of record as treasury
stock, none of which are entitled to vote), being the only class of stock
entitled to vote, the holders thereof being entitled to one vote for each share
held. Only stockholders of record at the close of business on February 17,
1997, the record date, will be entitled to vote at the Annual Meeting or any
adjournment thereof. Assuming a quorum is present,either in person or by proxy,
the affirmative vote of the holders of a majority of the votes present or
represented at the Annual Meeting is required for election of directors.
Therefore, any shares of common stock which are not voted on this matter at the
Annual Meeting, whether by abstention, broker non-vote or otherwise, will have
no effect on the election of directors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following are known to the Company to be the beneficial owners of
more than five percent of the Company's voting securities at the record date,
February 17, 1997:
Name and Address Amount and Nature
of Beneficial of Beneficial Percent
Title of Class Ownership Ownership of Class
-------------- ----------------- ----------------- --------
Common Essex & Company 156,777 Trusts(1) 10.6%
First Union Corporation
1200 First Union Plaza
Charlotte, North Carolina 28288
Common Robert L. Terry 85,500 Direct 5.8%
137 Kings Road
Palm Beach, Florida 33480
Common Atlee M. Kohl 101,100 Trusts(2) 6.8%
3007 Skyway Circle North
Irving, Texas 75038
Common Chesapeake Utilities Corporation 109,232 Direct 7.4%
861 Silverlake Boulevard
Cannon Building
Dover, Delaware 19901
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(1) Robert L. Terry, a director of the Company, is Co-Trustee for trust
accounts established under the wills of his parents and shares voting and
dispositive powers for this stock.
(2) Atlee M. Kohl is deemed to be the beneficial owner and shares voting and
dispositive powers for 38,100 shares, 30,000 shares, 30,000 shares and
3,000 shares owned by Woodland Investment Company, Nicole Kohl Gift Trust,
Woodland Investment Trust and the Nicole F and Atlee Kohl Family
Foundation, respectively.
NOMINEES AND CONTINUING DIRECTORS
Three directors are to be elected for terms expiring at the Annual Meeting
in 2000, or until their respective successors are duly elected and qualified.
There are no arrangements or understandings between any director and any other
person pursuant to which the director was elected.
The shares represented by the proxies which are executed and returned will
be voted at the Annual Meeting for the election, as directors, of the nominees
named in the table set forth below unless authority to vote for the nominees is
expressly withheld.
Should any of the nominees become unavailable for any reason (which is not
anticipated), the proxies (except for those marked to the contrary) may be voted
for such other person or persons as may be selected by the Board of Directors
of the Company.
As of February 17, 1997, the nominees for directors and directors whose
terms of office as directors will continue after the Annual Meeting beneficially
owned stock of the Company in the amounts set forth opposite their names (such
ownership being as reported by these individuals to the Company.
Securities Owned
Nominee or Identity of Group, First Shares of Common Stock
Principal Occupation for Became a Benficial Percent
Last Five Years Age Director Ownership of Class
- ------------------------------ --- -------- -------- --------
TO BE ELECTED FOR TERMS ENDING IN 2000
Daniel Downey(1)(2)(3)(5) 74 1974 300 Less than 1%
Partner in the Palm Beach,
Florida Law Firm of Downey
& Downey, P.A.
John T. English 53 1994 3,037 Less than 1%
Senior Vice President of the
Company since January 1993;
Vice President March 1991 to
December 1992
Robert L. Terry(3)(6)(7) 77 1952 85,500 5.8%
Chairman of the Executive
Committee of the Company
TO CONTINUE IN OFFICE UNTIL 1999
E. James Carr, Jr. (1) (2) 70 1990 300 Less than 1%
Retired business executive since
December 1991
Gordon O. Jerauld (2) 75 1969 9,632 Less than 1%
Retired utility executive since
September 1991
TO CONTINUE IN OFFICE UNTIL 1998
Franklin C. Cressman(3)(4) 63 1981 10,586 Less than 1%
President and Chief Executive Officer
of the Company
Richard C. Hitchins (1) 51 1995 100 Less than 1%
President of R.C. Hitchins & Co.,P.A.,
a Florida CPA firm
In addition to the directors named above, the following executive officers
of the Company individually and beneficially owned the shares of common stock as
set forth opposite their respective names.
SHARES
NAME TITLE BENEFICIALLY OWNED
--------------------- ------------------------- ------------------
Jack R. Brown Treasurer and Secretary 2,150
Charles L. Stein Vice President 1,013
Darryl L. Troy Vice President 2,379
All directors and executive officers as a group (10 individuals)
beneficially owned 114,997 shares (7.8%) of common stock of the Company.
NOTES:
(1) Member of Audit Committee: Daniel Downey, Chairman.
(2) Member of Compensation Committee: E. James Carr, Jr., Chairman.
(3) Member of Executive Committee: Robert L. Terry, Chairman.
(4) In addition, Franklin C. Cressman's wife owns 1,043 shares of common
stock as to which Mr. Cressman disclaims any beneficial ownership; and
Mr. Cressman owns 316 shares of 4 3/4% preferred stock.
(5) Daniel Downey's wife owns 2,669 shares of common stock as to which Mr.
Downey disclaims any beneficial ownership.
(6) In addition, Robert L. Terry's wife owns 3,086 shares of common stock
and 205 shares of 4 3/4% preferred stock as to which Mr. Terry
disclaims any beneficial ownership.
(7) Robert L. Terry may be considered a control person.
All of the above are also directors of Flo-Gas Corporation, a wholly-owned
subsidiary, of which Mr. Cressman is the President and Chief Executive Officer.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
each of the Company's directors and executive officers, and any beneficial owner
of more than 10% of the Company's common stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of beneficial ownership of the
Company's common stock and reports of changes in such beneficial ownership.
Such persons also are required by SEC regulations to furnish the Company with
copies of such reports. To the Company's knowledge, based solely on its review
of the copies of such reports furnished to the Company and on the written
representations made by such persons that no other reports were required, during
the fiscal year ending December 31, 1996, no director, officer or 10% beneficial
owner failed to file on a timely basis the reports required by Section 16(a).
BOARD OF DIRECTORS AND COMMITTEES
During 1996 the directors held four meetings. All of the directors attended
at least 75% of the meetings of the Board of Directors and the committees on
which they served.
Each director who is not also an officer or employee of the Company
receives an annual retainer in the form of 100 shares of the Company's common
stock and is paid $300 and $100 in cash for attendance at each meeting of the
Boards of Directors of the Company and of Flo-Gas Corporation, a wholly-owned
subsidiary, respectively, and an annual fee of $300 in cash for each
board-constituted Committee on which he serves, plus reasonable expenses.
Directors who are employees of the Company receive no compensation for attending
board meetings or serving on committees.
Members of the Board of Directors are elected to various committees. The
present committees of the Board and their respective chairmen are: Executive
Committee, Robert L. Terry; Audit Committee, Daniel Downey; and Compensation
Committee, E. James Carr, Jr. The Company does not have a Nominating Committee.
During 1996, the Audit Committee and the Compensation Committee each met one
time. The Executive Committee held no meetings in 1996.
The functions of the Audit Committee are to: (1) recommend the selection,
retention and termination of the Company's external auditors; (2) approve in
advance the types of professional services for which the Company would retain
the external auditors and consider whether any such service would impair the
independence of the external auditors; (3) review the overall scope of the audit
with external auditors, the financial statements and external audit results and
recommendations of the independent audit with management; and (4) provide
whatever additional function it deems necessary in connection with the internal
accounting and reporting practices of the Company.
The functions of the Compensation Committee are to: (1) develop and define
a corporate executive compensation policy; (2) review and recommend to the Board
of Directors adjustments to the salaries of elected officers of the Company; and
(3) perform such related duties as may be requested by the Board.
EXECUTIVE COMPENSATION
Mr. Franklin C. Cressman, President and Chief Executive Officer, is the
only executive officer of the Company who had annual compensation of more than
$100,000. Mr. Cressman's compensation, consisting of annual salary only, was
$148,937, $144,696 and $139,548 for the years ended December 31, 1996, 1995 and
1994 respectively.
The Company has no stock option plans, bonus plans, long-term incentive
plans or any other form of executive compensation.
EMPLOYMENT AND SEVERANCE AGREEMENT
In December 1991, the Company entered into an employment agreement with
John T. English which terminated on June 1, 1996. In May 1996 and in accordance
with provisions contained in the Agreement, the Company amended the employment
agreement with Mr. English to terminate on June 1, 1997. The agreement
specifies the terms of employment, including a minimum annual salary. Employment
shall be at will; but, if employment is terminated (1) without cause, Mr.
English shall receive severance benefits equal to his then current annual salary
payable in twenty-four semi-monthly payments, or (2) upon change of control (as
defined in such employment agreement), he shall receive a lump sum payment equal
to three times his pre-change of control annual base salary. In addition, the
Company shall provide him, his spouse and his children with the same medical and
life insurance benefits provided by the Company's employee benefits program,
which benefits shall continue from the date of termination for one year in the
event of termination without cause, or for two years in the event of termination
upon change of control.
COMPENSATION COMMITTEE REPORT
The Company's executive compensation philosophy is to establish and
maintain appropriate executive compensation levels comparable to the
compensation practices of other regulated utilities of similar size based on
annual revenues and number of employees. The philosophy is essentially to
maintain compensation near the average for the comparable survey group. The
Compensation Committee establishes and administers the Company's executive
compensation program to achieve objectives which support the long-term success
of the Company. These objectives include the ability to attract and retain high
caliber executives, to motivate and reward executive and corporate performance
and to align the interests of executives with those of the Company's
stockholders. Executive compensation has been, and will continue to be, tax
deductible.
The Compensation Committee is comprised of three members appointed by the
Board of Directors. Two of the members of the Compensation Committee are
independent directors who are not, and have not been, employees of the Company.
The Compensation Committee periodically directs an independent consulting firm
to perform a study of executive compensation levels in order to establish salary
grade ranges. The study is based on comparable positions in companies from the
small electric, gas and combination utility sector selected by the consultant.
The comparable company group is not used as an index for the corporate
performance graph included as a part of this proxy statement.
Annually, the Chief Executive Officer informs the Committee as to
management proposals for remuneration of the Company's executive officers other
than that of the Chief Executive Officer. Factors considered by the Chief
Executive Officer are typically subjective and include his perception of the
individual's performance, decision-making responsibility, experience and
leadership skills. Performance is considered the single most important factor
and half of the weight is placed in this area. The remaining factors are
weighted equally in the total measurement. The recommendations of the
Compensation Committee are reviewed for approval.
The Compensation Committee reviews the Chief Executive Officer's annual
recommendations on executive compensation, compares them to the established
salary ranges, makes adjustments, if any, and recommends the adjusted
compensation levels to the Board of Directors for approval. The recommendations
of the Committee are reviewed and approved by the Board of Directors, except
that the Chief Executive Officer and other directors who are also officers or
employees of the Company do not attend that portion of the Board meeting at
which their compensation is discussed, nor do they participate in the review or
vote on the approval of their compensation.
As indicated in the discussion above, the Company's executive compensation
program is based on competitive comparative salary ranges which are adjusted
annually upon review by the Compensation Committee. Executive officers
receiving increases, except the Chief Executive Officer, were granted increases
in annual salaries ranging from 3.3% to 4.8% in 1996.
The Company's executive compensation program contains no incentive
components such as stock options, bonus plans, excess pension awards or
long-term incentive plans. All executives are covered by the Company's
non-participating defined benefit pension program, as set forth in another
section of this proxy statement, and are eligible to participate in the
Company's employee stock purchase plan according to the terms and conditions
available to all employees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Board of Director's Compensation Committee are E. James
Carr, Jr. (Chairman), Daniel Downey and Gordon O. Jerauld. Mr. Jerauld was a
Senior Vice President of the Company when he retired in 1991. Mr. Downey is a
partner in the Palm Beach, Florida law firm of Downey & Downey, P.A., whose firm
renders various legal services to the Company in the ordinary course of its
business. In addition, no executive officer or director serves on the Board of
Directors or Compensation Committee of another company where an executive
officer or director of the other company also serves on the Board of Directors
or Compensation Committee of the Company.
CORPORATE PERFORMANCE GRAPH
The following graph compares total shareholder returns over the last five
calendar years to the Standard & Poor's 500 Stock Index (S&P 500) and Standard
& Poor's Utilities Index (S&P Utilities). Total return values for the S&P 500,
S&P Utilities and Florida Public Utilities Company (FPU) were calculated based
on cumulative total return values assuming reinvestment of dividends. The
shareholder return shown on the graph below is not necessarily indicative of
future performance.
Comparison of Five Year Cumulative Total Shareholders Return
Among Florida Public Utilities Company, S&P 500 and S&P Utilities
Florida S&P
Public 500 S&P
Measurement Period Utilities Stock Utilities
(Fiscal Year Covered) Company Index Index
1991 $100.00 $100.00 $100.00
1992 108.22 107.61 108.07
1993 108.48 118.40 123.58
1994 99.87 120.01 113.85
1995 124.48 164.94 161.47
1996 144.35 202.71 166.49
EMPLOYEE STOCK PURCHASE PLAN
This Plan was approved by the stockholders on April 19, 1966. It
provides that eligible employees of the Company who are participants in the
Plan may save regularly by payroll deductions and twice each year use these
savings to purchase common stock of the Company at a price of 90% of the closing
price on the American Stock Exchange on the date such option is granted, or on
the last preceding day such quotation is available. The maximum allowable amount
of payroll deduction is 15% of the employee's regular pay. In 1996, cash credits
for purchases under the Plan amounted to $1,801 for Franklin C. Cressman. Future
cash credits will be based on the number of shares purchased, option price, fair
market value and whether the Plan continues in effect.
RETIREMENT PLAN
The Company maintains a defined benefit Pension Plan for substantially
all employees. Plan benefits are based on an employee's years of credited
service and average Plan compensation during his highest five consecutive years
in his last ten years of service. The following table shows estimated annual
benefits payable upon normal retirement to persons in specified remuneration and
year-of-service classifications.
AVERAGE FINAL
COMPENSATION
DURING THE ESTIMATED ANNUAL RETIREMENT BENEFIT
MEMBER'S HIGHEST AT AGE 65 OF A NEW PLAN MEMBER FOR
5 OF THE LAST REPRESENTATIVE YEARS OF SERVICE
10 YEARS OF ----------------------------------------------------------
CREDITED SERVICE 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
---------------- -------- -------- -------- -------- --------
$ 20,000 $ 3,000 $ 4,000 $ 5,000 $ 6,000 $ 7,000
40,000 6,000 8,000 10,000 12,000 14,000
60,000 9,500 12,000 15,000 18,000 21,000
80,000 14,500 18,600 22,600 26,900 31,300
100,000 19,400 25,200 30,900 36,800 42,900
120,000 24,400 31,800 39,100 46,700 54,400
140,000 29,300 38,400 47,400 56,600 66,000
160,000 34,300 45,000 55,600 66,500 77,500
180,000 39,200 51,600 63,900 76,400 89,100
200,000 44,200 58,200 72,100 86,300 100,600
Compensation under the Plan is the regular salary paid to an employee
for service rendered to the Company, including commissions but excluding any
bonuses and pay for overtime or special pay. Mr. Cressman has completed 35
years of credited service in the Plan.
The benefits shown in the above table are straight-life annuity
amounts. They are not subject to any deduction for Social Security or other
offset amounts. The benefit formula is dependent in part on each employee's
Social Security Covered Compensation which varies by year of birth and is an
average of Social Security taxable wage bases.
STOCKHOLDER PROPOSALS
Stockholder proposals intended for inclusion in the 1998 Proxy and
Proxy Statement must be received by the Secretary of the Company, 401 South
Dixie Highway, West Palm Beach, Florida 33401, not later than November 14,
1997.
ANNUAL REPORT
The financial statements and auditors' opinion are contained in the
Company's Annual Report for the year ended December 31, 1996, which has been
mailed to all stockholders of the Company.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP, independent public accountants, has
been appointed by the Board of Directors each year for many years to examine the
accounts of the Company. Representatives of Deloitte & Touche LLP are expected
to be present at the Annual Meeting and will have the opportunity to make a
statement if they so desire and to respond to appropriate questions.
DISCRETIONARY AUTHORITY
The Company has no knowledge of any business to be brought before the
Annual Meeting other than that which is specified in the notice of such meeting
or may arise in connection with or for the purpose of effecting the same. Should
any other business properly come before the meeting, it is intended that proxies
will be voted in respect thereof in accordance with the judgment of the person
or persons voting the proxies.
