FLORIDA ROCK INDUSTRIES, INC.
155 East 21st Street, Jacksonville, Florida 32206
___________________________________
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
To The Shareholders:
The Annual Meeting of Shareholders of Florida Rock Industries,
Inc. will be held at 9 o'clock in the morning, local time, on
Wednesday, February 7, 1996, at the general offices of the Company,
155 East 21st Street, Jacksonville, Florida 32206, for the
following purposes, as more fully described in the attached proxy
statement:
1. To elect one director to serve for a term of two years and
four directors to serve for a term of four years.
2. To act upon a proposal to approve and adopt the Company's 1996
Stock Option Plan.
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Shareholders of record at the close of business on December
11, 1995 are entitled to vote at said Annual Meeting or any
adjournment or adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
December 18, 1995 Dennis D. Frick
Secretary
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ACCOMPANYING ENVELOPE. IF YOU ATTEND THE MEETING,
YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
December 18, 1995
FLORIDA ROCK INDUSTRIES, INC.
155 East 21st Street, Jacksonville, Florida 32206
PROXY STATEMENT
ANNUAL MEETING - February 7, 1996
The attached proxy is solicited by the Board of Directors of
Florida Rock Industries, Inc. (the "Company") for use at the annual
meeting of the shareholders to be held on Wednesday, February 7,
1996 at 9 o'clock in the morning, local time, and any adjournments
thereof, at the principal offices of the Company, 155 East 21st
Street, Jacksonville, Florida 32206. The proxy is revocable by
written notice to the Secretary of the Company at any time before
its exercise. Shares represented by properly executed and returned
proxies will be voted at the meeting in accordance with the
shareholders' directions or, if no directions are indicated, will
be voted in favor of the election of the nominees proposed in this
proxy statement; in favor of the proposal adopting the Company's
1996 Stock Option Plan; and, if any other matters properly come
before the meeting, in accordance with the best judgment of the
persons designated as proxies.
The holders of record of common stock at the close of business
on December 11, 1995, may vote at the meeting. On such date there
were outstanding 9,487,109 shares of common stock of the Company.
Under the Company's Articles of Incorporation and Bylaws each share
of common stock is entitled to one vote. Under the Company's
Bylaws, the holders of a majority of the outstanding shares
entitled to vote shall constitute a quorum for the transaction of
business at the meeting. Under the Florida Business Corporation
Act, directors are elected by a plurality of the votes cast and
other matters are approved if the votes cast by the holders of the
shares represented at the meeting and entitled to vote on the
subject matter favoring the action exceed the votes opposing the
action, unless a greater number of affirmative votes is required by
this act or the Company's Articles of Incorporation. Broker non-
votes on non-routine matters are not "shares entitled to vote"
because the broker does not have authority to vote the shares, and
accordingly, broker non-votes would have no effect. Abstentions
and broker non-votes on routine matters, as shares entitled to
vote, are counted for purposes of determining whether a quorum is
present.
1. ELECTION OF DIRECTORS
Under the Company's Articles of Incorporation, the Board of
Directors is divided into four classes. One class of directors is
elected at each annual meeting of shareholders for a four-year term
of office. Mr. Robert D. Davis, who was first elected to the
Board of Directors by its members on February 1, 1995, is nominated
to be elected by the shareholders to hold office for a term
expiring at the 1997 meeting. Four other directors are nominated
to be re-elected to hold office until the 2000 annual meeting. The
enclosed proxy will be voted for the election of the persons named
as directors of the Company unless otherwise indicated by the
shareholders. If any of the nominees named should become
unavailable for election for any presently unforeseen reason, the
persons named in the proxy shall have the right to vote for a
substitute as may be designated by the Board of Directors to
replace such nominee, or the Board may reduce the number of
directors accordingly.
The following table sets forth information with respect to
each nominee for election as a director and each director whose
term of office continues after the 1996 annual meeting. Reference
is made to the sections entitled "Common Stock Ownership of Certain
Beneficial Owners" and "Common Stock Ownership by Directors and
Officers" for information concerning stock ownership of the
nominees and directors.
NAME AND PRINCIPAL DIRECTOR OTHER
OCCUPATION AGE SINCE DIRECTORSHIPS
Class II - Nominee for Term Expiring in 1997
Robert D. Davis 64 1995 Alliance Mortgage
Chairman of the Board Company
of DDI, Inc. (a diver- American Heritage
sified family holding Life Investment
company) Corporation
First Union Corpo-
ration
Stein Mart, Inc.
Winn-Dixie Stores,
Inc.
Class I - Nominees for Term Expiring in 2000
Edward L. Baker 60 1970 FRP Properties, Inc.
Chairman of the Board Regency Realty
and Chief Executive Corporation
Officer of the Company Flowers Industries,
Inc.
American Heritage
Life Insurance
Company
Francis X. Knott 50 1988 FRP Properties, Inc.
Chief Executive Officer
of Partners Management
Company
Radford D. Lovett 62 1984 First Union Cor-
Chairman of the Board of poration
Commodores Point Terminal Winn-Dixie Stores,
Corp. (marine terminal) Inc.
FRP Properties, Inc.
American Heritage
Life Investment
Corporation
W. Thomas Rice 83 1974 Tredegar Industries,
Chairman Emeritus of Inc.
Seaboard Coast Line
Industries, Inc.
Directors Continuing in Office After the 1996 Annual Meeting
Class II - Term Expiring in 1997
Thompson S. Baker 90 1955 FRP Properties, Inc.
Chairman Emeritus of
the Company
Frank M. Hubbard 75 1972
Chairman of the Board of
A. Friends' Foundation Trust
Class III - Term Expiring in 1998
Thompson S. Baker II 37 1991 FRP Properties, Inc.
Vice President of the
Company
Albert D. Ernest, Jr. 65 1989 FRP Properties, Inc.
President of Albert Regency Realty
Ernest Enterprises, an Corporation
investment and consulting Stein Mart, Inc.
firm Wickes Lumber Company
Luke E. Fichthorn III 54 1972 Bairnco Corporation
Partner in Twain FRP Properties, Inc.
Associates (a private
investment banking firm)
and Chairman of the Board and Chief
Executive Officer of
Bairnco Corporation
(manufacturing)
C. J. Shepherdson 79 1972
Vice President of the
Company
Class IV - Term Expiring in 1999
A. R. Carpenter 53 1993 Barnett Banks, Inc.
President and Chief Regency Realty
Executive Officer of CSX Corporation
Transportation, Inc.
(railroad industry)
John D. Baker II 47 1979 FRP Properties, Inc.
President of the Company Hughes Supply, Inc.
Charles H. Denny III 63 1975
Investments
All of the nominees and directors have been employed in their
respective positions for the past five years, except Thompson S.
Baker II, Albert D. Ernest, Jr. and Francis X. Knott.
In March 1995, Thompson S. Baker II was elected Executive Vice
President of the Company's Aggregates Group. From August 1991
through March 1995, he was President of The Arundel Corporation, a
subsidiary of the Company. Prior to August 1991 he served as
President of the Company's Capitol Concrete Division.
In the previous five years Albert D. Ernest, Jr. was a
director and Vice Chairman of Barnett Banks, Inc. He was named
President and Chief Operating Officer in 1988 where he served until
his retirement on January 1, 1991.
Francis X. Knott served as a Vice President of the Company
from February 1988 through July 1991 and was President of The
Arundel Corporation, a wholly owned subsidiary of the Company, from
March 1976 through July 1991.
Edward L. Baker and John D. Baker II are brothers and the sons
of Thompson S. Baker. Thompson S. Baker II is the son of Edward L.
Baker.
See "Compensation Committee Interlocks and Insider Partici-
pation" and "Certain Relationships and Related Transactions" for
a discussion of the relationships between the Company and FRP
Properties, Inc.
Other Information About the Board and Its Committees
Meetings. During the fiscal year ended September 30, 1995 the
Company's Board of Directors held five meetings. Directors who are
not employees of the Company or its subsidiaries are paid annual
fees of $10,000 plus $2,000 for each directors' meeting attended.
Members of the Company's Audit and Compensation Committees receive
$300 and the Chairman of each committee receives $500 for each
committee meeting attended.
Executive Committee. Messrs. Thompson S. Baker, Edward L.
Baker and John D. Baker II. To the extent permitted by law, the
Executive Committee exercises the powers of the Board between
meetings of the Board of Directors. During the fiscal year ended
September 30, 1995, the Executive Committee acted on 12 different
resolutions by unanimous written consents.
Audit Committee. Messrs. Ernest, Fichthorn, Hubbard, Lovett
and Rice. The Audit Committee recommends the appointment of
independent accountants to audit the Company's consolidated
financial statements and to perform professional services related
to the audit, meets with the independent accountants and reviews
the scope and results of their audit, and reviews the fees charged
by the independent auditors. The Committee also reviews the scope
and results of internal audits. During fiscal 1995, the Audit
Committee held three meetings.
Compensation Committee. Messrs. Davis, Ernest, Hubbard,
Lovett and Rice. The Committee reviews and approves compensation
for corporate officers and certain other members of management. In
addition, the Committee administers the Company's stock option
plans, subject to control of the Board of Directors, and the
Management Incentive Compensation ("MIC") program. During fiscal
1995, the Compensation Committee held four meetings.
The full Board of Directors acts as the Nomination Committee.
During the last fiscal year each of the directors attended 75%
or more of all meetings of the Board and its Committees on which
the director served.
Executive Compensation
Summary Compensation Table
The following table sets forth information concerning the
compensation of the Company's Chief Executive Officer and its other
four most highly compensated executive officers who served in such
capacities at any time during the fiscal year ended September 30,
1995:
Long Term
Com-
Annual Compensation pensation All
Other
Compen-
Name and Principal Salary Bonus Options sation
Position Year ($)(a) ($)(a) (#) ($) (b)
Edward L. Baker 1995 368,563 112,500 0 35,391(c)
Chairman of the 1994 345,688 104,775 0 36,997(c)
Board and Chief 1993 329,250 83,750 0 6,982
Executive Officer
John D. Baker, II 1995 266,250 81,000 17,500 24,770(d)
President 1994 252,500 76,500 0 26,251(d)
1993 239,400 61,250 0 6,982
H. B. Horner 1995 213,750 64,500 0 11,591
Executive Vice 1994 208,750 62,370 0 12,928
President 1993 203,700 51,250 0 6,613
C. J. Shepherdson 1995 247,500 75,000 0 11,591
Vice President 1994 237,500 72,000 0 12,777
1993 227,500 0 0 6,736
Donald L. Bloebaum 1995 184,563 33,480 0 11,731
Vice President 1994 178,938 54,075 0 12,488
1993 166,250 52,500 0 6,585
(a) Includes amounts deferred under the Company's 401(k) Plan.
Bonuses are accrued in the year earned and paid in the
following year.
(b) Represents the contribution to the Company's Profit Sharing
and 401(k) Plan.
(c) Includes $23,800 in 1995 and $24,069 in 1994, the present
value of the benefit of a split-dollar premium paid during the
fiscal year.
(d) Includes $13,179 in 1995 and $13,323 in 1994, the present
value of the benefit of a split-dollar premium paid during the
fiscal year.
Option Grants in the Last Fiscal Year
The following table sets forth certain information concerning
stock options granted during the fiscal year ended September 30,
1995 to each executive officer named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Potential
Number of % of
Realizable
Secur- Total
Value at
ities Options at
Assumed
Under- Granted
Annual Rates
lying Employ- of
Stock Price
Options ees in Exercise Expir-
Appreciation for
<F2> Granted Fiscal Price ation Option
Term (b)
<F1> Name # Year ($/Share)(a) Date 5%($)
10%($)
<S> <C> <C> <C> <C> <C>
<C>
John D. Baker II 17,500 100.0% 27.9375 06/03/02
210,314 494,588
<FN>
(a) The exercise price was set to equal the fair market value
(average of the high and low stock prices for the Company's
stock as reported on the American Stock Exchange composite
transactions) of the Company's common stock on the date of
grant. The options become exercisable in cumulative
installments of 20% each year after a one year waiting period
from the date of grant.
(b) Potential realizable value is reported net of the option
exercise price, but before taxes associated with the exercise.
These amounts represent stated assumed rates of appreciation
only. Actual values realized, if any, on stock option
exercises are dependent on the future performance of the
common stock and the officer's continued employment throughout
the vesting period. Accordingly, the amounts reflected in
this table may not necessarily be achieved.
</FN>
</TABLE>
Options Exercises and Fiscal Year-end Values
No stock options were exercised by the named executives during
the fiscal year ended September 30, 1995. The following table sets
forth the number and value of unexercised options held by such
executive officers at fiscal year end.
Value of Unexercised
Number of Unexercised In-the-money Options
Options at Year-end at Year-end (a)
Exer- Unexer-
Exer- Unexer- cisable cisable
Name cisable cisable ($) ($)
Edward L. Baker 47,000 18,000 77,625 51,750
John D. Baker II 33,500 26,500 38,813 26,969
H. B. Horner 8,100 5,400 23,288 15,525
C. J. Shepherdson 25,800 7,200 31,050 20,700
Donald L. Bloebaum 23,100 5,400 23,288 15,525
(a) The closing price of the Company's common stock as reported on
the American Stock Exchange composite transactions on
September 29, 1995 (the last trading day prior to the
Company's fiscal year end) ($28.00) less the exercise price,
was used in calculating the value of unexercised options.
Pension Plan
The Company has a Management Security Plan (the "MSP Plan")
for certain officers, including directors who are officers, and
certain key employees. Benefit levels have been established on the
basis of base compensation and job responsibility. The MSP Plan
provides that in the event a participant dies prior to his
retirement his beneficiary will receive twice the amount of such
participant's benefit level in monthly payments for a period of 12
months and thereafter the benefit level in monthly payments for the
next 168 months or until such time as such participant would have
reached age 65, whichever is later. Upon reaching normal
retirement age, a participant is entitled to receive twice the
amount of his benefit level in equal monthly payments for 12 months
and thereafter until his death, the benefit level in monthly
payments. If a participant dies after his retirement, his
beneficiary, if any, will receive such participant's benefit for a
period of 15 years from the date of the participant's retirement or
until the death of the beneficiary, whichever occurs first. The
annual retirement benefit levels in effect at September 30, 1995
were:
Edward L. Baker $174,625
John D. Baker II $127,500
H. B. Horner $105,000
C. J. Shepherdson $120,000
Donald L. Bloebaum $ 90,125
In addition to amounts stated in the above table, the Company has
entered into a retirement benefit contract with C. J. Shepherdson
which provides for annual retirement benefits of $20,000. The
benefits are payable to the recipient or his spouse until the death
of the survivor.
Compensation Committee Report
The Compensation Committee of the Board of Directors
("Committee") determines the compensation of the Chief Executive
Officer and reviews and approves compensation of other officers and
members of management reaching a salary level established by the
Board. In addition, the Committee administers the Company's stock
option plans, subject to control of the Board, and the Management
Incentive Compensation ("MIC") program. The full Board ratifies
the recommendations of the Committee.
The Committee's goals are to develop and maintain executive
compensation programs that preserve and enhance shareholder value.
Under the direction of the Committee, management has developed a
compensation structure designed to compensate fairly executives for
their performance and contribution to the Company, to attract and
retain skilled and experienced personnel, to reward superior
performance and to align executive and shareholder long-term
interests.
Base salary levels for executives are established taking into
consideration business conditions, the Company's size and
performance and peer group and industry compensation levels. The
Chief Executive Officer's salary is based on these factors and his
performance in leading the Company and its businesses. In January
1995, the Committee increased Mr. Edward L. Baker's salary based
upon its determination that Mr. Baker had done a commendable job in
leading the Company, achieving cost and overhead reductions and
improving profitability.
Management Incentive Compensation ("MIC") provides an
opportunity for annual incentive compensation to officers and key
employees. The purpose of the plan is to provide a direct
financial incentive in the form of an annual cash bonus to
participants to achieve their business unit's and the Company's
goals and objectives. Profit levels are set for various segments
of the business. Depending on the level of profitability obtained,
an individual may become eligible for a bonus equal to a certain
percentage of his year end base salary ranging up to a maximum of
30%. However, that bonus may then be adjusted down based on the
degree by which the individual accomplishes his individual goals
and objectives for the year. The total amount of MIC for the
entire company in any year is limited to 15% of consolidated income
before income taxes. At the beginning of each year, after taking
into consideration the outlook for the general economy, the
construction materials industry, the Company's markets, prior year
performance and the budget for the upcoming year the Committee
approves target levels of net income as adjusted by certain items
("MIC Income") as profit levels on which the Chief Executive
Officer's MIC is based.
The Committee believes that long-term compensation in the form
of stock options is critical in motivating and rewarding the
creation of long-term shareholder value by linking the compensation
provided to officers and other key management personnel with gains
realized by the stockholders. In addition, the vesting periods
associated with stock options encourage this key group to continue
in the employ of the Company. All options granted have been
granted at an option price equal to the fair market value of the
Company's common stock on the date of grant. In subjectively
determining the number of options to be granted to an individual,
including the Chief Executive Officer, the Committee takes into
account the cost to exercise the option and the individual's
relative base salary, scope of responsibility, ability to affect
profits and value to the Company.
Compensation Committee Members
W. Thomas Rice, Chairman
Robert D. Davis
Albert D. Ernest, Jr.
Frank M. Hubbard
Radford D. Lovett
Compensation Committee Interlocks and Insider Participation
Two members of the Compensation Committee, Messrs. Lovett and
Ernest, are among the eight directors of the Company who are also
directors of FRP Properties, Inc. ("FRPP"). The other six
directors of both FRPP and the Company who are not members of the
Compensation Committee are Thompson S. Baker, Edward L. Baker, John
D. Baker II, Thompson S. Baker II, Luke E. Fichthorn III and
Francis X. Knott. The eight directors own approximately 38% of the
stock of FRPP and 30% of the stock of the Company. The Bakers may
be considered to be control persons of both the Company and FRPP.
Messrs. Edward L. Baker, Albert D. Ernest, Jr. and A. R.
Carpenter serve as members of the Compensation Committee of the
Board of Directors of Regency Realty Corporation. Mr. Martin E.
Stein, Jr., who is a director of FRPP, is a director, President and
Chief Executive Officer of Regency Realty Corporation.
There were no other interlocks of executive officers or board
members of the Company serving on the compensation or equivalent
committee of another entity which has any director or executive
officer serving on the Compensation Committee, other committees or
Board of Directors of the Company.
Shareholder Return Performance
The following graph compares the performance of the Company's
Common Stock to that of the AMEX Market Value Index and a peer
group of industry companies for the period commencing September 30,
1990 and ending on September 30, 1995. The graph assumes that $100
was invested on September 30, 1990 in the Company's common stock
and in each of the indices and assumes the reinvestment of
dividends. The Peer Group consists of the following companies:
CalMat Co., Dravo Corporation, Florida Rock Industries, Inc.,
Lafarge Corporation, Medusa Corporation, Southdown, Inc., Texas
Industries, Inc. and Vulcan Materials Company.
THE CHART LISTED BELOW IS GRAPHICALLY REPRESENTED IN THE PAPER
VERSION OF THIS DOCUMENT:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG FLORIDA ROCK INDUSTRIES, INC., THE AMEX MARKET VALUE INDEX
AND PEER GROUP
September
1990 1991 1992 1993 1994 1995
Florida Rock
Industries, Inc. 100 107 119 135 135 146
Peer Group 100 105 103 140 155 158
AMEX Market Value 100 122 122 150 149 177
2. PROPOSAL TO ADOPT THE COMPANY'S 1996 STOCK OPTION PLAN
The proposed Florida Rock Industries, Inc. 1996 Employee Stock
Option Plan ("the Company's 1996 Option Plan") was adopted by the
Company's Board of Directors on December 6, 1995, subject to
shareholder approval. The Company's 1996 Option Plan authorizes
options for up to 500,000 shares of the Company's common stock.
While there are also 101,750 shares of the Company's stock
available for options authorized under the Company's 1991 Employee
Stock Option Plan, the Board of Directors has directed that no
additional options be issued under that plan if the Company's 1996
Option Plan is approved by the shareholders.
The purpose of the Company's 1996 Option Plan is to provide
additional incentive for officers, directors and key employees of
the Company and its subsidiaries to invest in the Company's common
stock and thereby increase their proprietary interest in the
Company's business, to encourage such officers and employees to
remain in the employ of the Company and its subsidiaries, and to
increase their personal interest in the continued success and
progress of the Company.
The options may take the form of either incentive stock
options ("Incentive Stock Options") which qualify for certain tax
advantages to the option holder under Section 422 of the Internal
Revenue Code ("IRC"), or options which do not qualify for such
advantages and are taxable under Section 83 of the IRC ("Non
Statutory Stock Options"). The following is a summary of the major
features of the Company's 1996 Option Plan. The summary is
necessarily selective and is qualified in its entirety by reference
to the text of the Company's 1996 Option Plan which is set forth in
the Appendix I.
Terms of Plan
If the Company's 1996 Option Plan is approved by the
shareholders, it will continue in effect until all options granted
have been exercised or expired without exercise, whichever is
earlier. No options intended to be an Incentive Stock Option may
be granted under the Company's 1996 Option Plan after November 30,
2005 nor may they be exercised later than ten years after the date
of grant. The Board of Directors or the shareholders of the
Company may terminate the Company's 1996 Plan at any time, except
that no action of the Board or shareholders may impair the vested
rights of the holder of an outstanding option without his consent.
Approval of the shareholders is required to extend the last date
upon which options intended to be Incentive Stock Options may be
granted under the Company's 1996 Option Plan.
Shares Subject to Option
The maximum number of shares of common stock of the Company
which may be optioned and sold under the Company's 1996 Option Plan
is 500,000 shares. No more than 50,000 shares shall be optioned to
any one person in any fiscal year. The number and price of shares
available for option and subject to option will be adjusted in the
event of any change in the outstanding shares of common stock by
reason of any stock dividends, stock split, combination or exchange
of shares, recapitalization, reclassification, merger,
consolidation, reorganization or similar transaction. Except for
the foregoing adjustments, approval of the shareholders is required
to increase the number of shares available for option under the
Company's 1996 Option Plan.
Administration
The Company's 1996 Option Plan will be administered by the
Board of Directors of the Company or by a committee (the
"Committee") of not less than two independent directors of the
Company selected by and serving at the pleasure of the Board. The
Committee shall have authority, subject to the terms of the
Company's 1996 Option Plan, to designate persons to whom options
will be granted, the number of shares and purchase price per share
of common stock to be included in the options awarded and the time
or times at which such options may be granted and exercised.
Whether or not a Committee is appointed, all of the powers and
functions of the Committee may at any time be exercised by the
Company's Board of Directors and references to "Committee" shall
hereafter include the Company's Board.
Eligibility
Incentive Stock Options may be granted only to officers and
other executive, managerial or professional persons deemed by the
Committee to be key employees of the Company or a subsidiary. The
identification and selection of key employees shall be a function
of the Committee. Non Statutory Stock Options may be granted to
officers, directors and other executive, managerial or
professional persons deemed by the Committee to be key employees of
the Company or of any subsidiary of the Company. As of September
30, 1995 there were approximately 2,218 employees of the Company
and its subsidiaries. There are no other eligibility requirements.
Approval of the shareholders is required to amend the eligibility
requirements under the Company's 1996 Option Plan.
Terms and Conditions of Options
(a) Price. The option price per share shall not be less than
the fair market value of a share of common stock of the Company on
the date the option is granted.
(b) Time and Method of Exercise. Each option intended to be
an Incentive Stock Option shall expire no later than ten years
after the date granted. Each option may be exercisable in
installments or immediately, depending upon the terms of the grant.
(c) Manner of Payment. Subject to any limitations which may
be contained in the instrument evidencing options granted under the
Company's 1996 Option Plan, and subject to limitations on use of
stock obtained under other Company options, the holder of an option
may pay the option price in cash, in shares of common stock of the
Company, or in any other property acceptable to the Committee. The
Company's 1996 Option Plan provides that the Company may provide or
arrange for financial assistance to holders of options for payment
of the purchase price for shares purchased pursuant to the exercise
of options granted under the Company's 1996 Option Plan.
Termination of Employment, Death or Disability of Employee
The Company's 1996 Option Plan provides limitations upon, and,
under some circumstances, termination of rights related to the
exercise of both Incentive Stock Options and Non Statutory Stock
Options upon the death, disability or termination of employment of
any holder.
Nontransferability
No option may be assigned or transferred by the holder
thereof, except by will or by the applicable laws of descent and
distribution. During the lifetime of the holder of any option,
such option may be exercised only by the holder.
Payments in Lieu of Stock
The instrument evidencing the option may provide that, in lieu
of accepting payment of the option price and delivering shares of
common stock of the Company to which such option has been
exercised, the Company may elect to pay the holder of such option
an amount in cash, or in a combination of cash and shares of
common stock, equal to the amount by which the fair market value of
such shares of common stock on the date of exercise exceeds the
purchase price that would otherwise be payable.
Merger, Consolidation, Reorganization or Liquidation
In the event of a merger, consolidation, or reorganization of
the Company except where the Company is the surviving corporation,
or in the event of any sale or disposition of all or substantially
all of the assets of the Company, or of liquidation or dissolution
of the Company, then, any outstanding option not then exercisable
in full shall be accelerated and become exercisable in full for a
period of thirty days following receipt by the holder of such
option of notice thereof. The Committee, in its discretion, may,
prior to happening of an event requiring notice of acceleration,
cancel the acceleration of exercisability of all, but not less than
all, such outstanding options.
Change of Control
The Company's 1996 Option Plan provides that a change of
control of the Company, as a result of one of the events enumerated
therein, may result in the acceleration of outstanding options.
The Committee may, however, by action taken prior to one of the
enumerated events, cancel the acceleration of exercisability of
all, but not less than all, of such outstanding options.
Indemnification of Committee
The Company's 1996 Option Plan provides that members of the
Committee shall be indemnified and held harmless by the Company
from all liability claims and damages arising from any action or
determination made by them in good faith with respect to the
Company's 1996 Option Plan or any option granted under the
Company's 1996 Option Plan. Such indemnification shall include all
costs and expenses incurred by such members of the Committee in
any action or proceeding in which it is claimed they acted
improperly or failed to act when required under or in connection
with the Company's 1996 Option Plan or any option granted
thereunder.
Tax Treatment
The Company's 1996 Option Plan provides for both Incentive
Stock Options designed to secure the benefits of Section 422 of the
IRC and Non Statutory Stock Options which are taxable under Section
83 of the IRC.
If the option and the Company's 1996 Option Plan meet the
requirements of Section 422, and upon exercise of the option the
stock constitutes a capital asset in the hands of the holder, the
option holder will recognize no income or gain for regular income
tax purposes, both when the option is granted and when the option
is exercised. The difference between the option exercise price and
the fair market value of the stock at the time of exercise of the
option will constitute an item of tax preference that may subject
the holder of the option to Alternate Minimum Tax in the year in
which he exercises the option. Upon a subsequent sale of the
stock, the option holder will be taxed at capital gains rates on
the amount by which the sale price he receives exceeds the option
price he paid provided he does not dispose of the stock within two
years after the option is granted nor within one year after the
stock was transferred to him. If the option holder does not meet
both the two year and one-year holding period requirements, then
upon sale of the stock a portion or all of the gain, if any, may be
treated as ordinary income at the time of the sale.
If the option holder qualifies for capital gains tax
treatment, the Company gets no deduction with respect to the
Incentive Stock Option. If the option holder is subject to
ordinary income tax treatment, the Company will be allowed a
corresponding deduction at that time.
The Company's 1996 Option Plan provides that the option price
may be paid in cash or in stock of the Company (provided it is the
same class of stock). The Internal Revenue Service (IRS) has
issued proposed regulations on this subject; these regulations have
not become final and are subject to change or withdrawal at any
time without notice; thus the tax treatment of the stock for stock
exchange is not certain. Under the proposed regulations, applying
the principles of Section 1036 of the IRC, no gain or loss is
recognized if common stock in a corporation is exchanged solely for
common stock in the same corporation upon exercise of an incentive
stock option; the basis of the stock surrendered is carried over to
the stock received in the exchange; if the option holder holds the
new stock for the required holding periods pursuant to Section 422
of the IRC, any gain or loss on a subsequent sale will be taxable
as long-term capital gain or loss; however, if the option holder
fails to meet both Section 422 holding period requirements with the
new stock (regardless of his holding period in the transferred
stock) all or a portion of the gain realized on a disqualifying
disposition may be taxable as ordinary income.
Payments to a holder of an Incentive Stock Option by the
Company in cash or common stock for the appreciation in value of
the stock covered by the option (see "Payment in Lieu of Stock"
above) will not disqualify the grant of the Incentive Stock Option
or the Company's 1996 Option Plan from the benefits of Section 422,
but the cash or stock payment would be treated as ordinary income
to the employee and deductible by the Company.
The Company's 1996 Option Plan also provides that the Company
may have the right to reacquire the stock purchased under the
option. This will not disqualify the option and should not affect
the tax treatment of the gain if the repurchase is not made within
two years of the grant of the option and the option holder has
held the stock for at least one year.
Upon a tax-free merger, consolidation or other corporate
reorganization where the Company does not survive, the option may
be assumed by the surviving corporation or replaced with a new
option of the surviving corporation having the same terms as the
old option without affecting the qualification of the option.
In the event of a change in the outstanding shares of the
Company due to any stock dividend, stock split, recapitalization
or reorganization, the Committee may make appropriate changes in
the number and purchase price of shares under the option without
affecting the qualification of such options.
If any option granted under the Company's 1996 Option Plan
does not meet the conditions set forth in the IRC for Incentive
Stock Options, then the option is a Non Statutory Stock Option.
Such an option is taxable under Section 83 of the IRC. The value
of the option constitutes ordinary income to the employee when
granted if the option has a readily ascertainable fair market
value. Such amount of ordinary income would be added to the
exercise price to determine the tax basis of the stock acquired
upon exercise of the option and no further income would be
recognized upon exercise of the option. If the option does not
have a readily ascertainable fair market value when granted then,
when the option is exercised, the difference between the fair
market value of the stock at exercise and the option price
constitutes ordinary income to the employee. The tax basis of the
stock would then be its fair market value upon the exercise date.
The Company is generally allowed a business expense deduction equal
to the amount includible in the employee's income in the Company's
corresponding taxable year.
When stock obtained under a Non Statutory Stock Option is
disposed of by the shareholder, the difference between the sales
price and the tax basis of the stock will be treated as long-term
or short-term capital gain or loss, depending on the holding period
of the shares.
It is not required that the Company obtain a ruling from the
IRS as to the qualification of the Company's 1996 Option Plan and
one has not been requested.
Estimate of Benefits
The number of shares of stock that will be awarded to the
Company's Chief Executive Officer and the other four most highly
compensated executive officers of the Company pursuant to the
Company's 1996 Option Plan cannot be predicted. Previous awards
of stock options to the Company's five most highly compensated
executive officers are described under "Executive Compensation"
starting on page 6.
Board Recommendation
The Board of Directors recommends a vote for approval of the
Company's 1996 Option Plan. The text of the proposed Company's
1996 Option Plan is set forth in Appendix I.
INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as
independent certified public accountants to examine the consoli-
dated financial statements of the Company for fiscal 1996. Repre-
sentatives of Deloitte & Touche LLP are expected to be present at
the shareholders' meeting with the opportunity to make a statement
if they so desire and will be available to respond to appropriate
questions.
On May 4, 1994 the Company's previous independent accountants,
Ernst & Young, were dismissed and Deloitte & Touch LLP were
engaged. Ernst & Young's reports on the financial statements of
the Company for the fiscal years ended September 30, 1992 and 1993
contained no adverse opinions or disclaimers of opinion and were
not qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change independent
accountants was recommended and approved by the audit committee of
the Board of Directors of the Company. During the fiscal years
ended September 30, 1992 and 1993 and all subsequent interim
periods preceding such dismissal, there were no disagreements with
the former accountants on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of the former
accountants, would have caused the former accountants to make
reference to the matter in their report.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Eight of the Company's directors (Thompson S. Baker, Edward L.
Baker, John D. Baker II, Thompson S. Baker II, Albert D. Ernest,
Jr., Luke E. Fichthorn III, Francis X. Knott and Radford D. Lovett)
are directors of FRP Properties, Inc. ("FRPP"). Such directors own
approximately 38% of the stock of FRPP and 30% of the stock of the
Company. Accordingly, the Bakers may be considered to be control
persons of both the Company and FRPP. See "COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION" for further information on
related party transactions between the Company and FRPP.
The Company and FRPP routinely are engaged in business
together through the hauling by FRPP of construction aggregates
products for the Company and the leasing to the Company of
construction aggregates mining and other properties. FRPP has
numerous aggregates hauling competitors at all terminal and mine
sites and the rates charged are, accordingly, established by
competitive conditions. Approximately 10% of FRPP's revenue was
attributed to the Company during fiscal year 1995.
A wholly owned subsidiary of the Company, on September 30,
1995, entered into an agreement to sell a 134 acre tract of surplus
real estate in Edgewood, Maryland, formerly used for mining, to a
wholly owned subsidiary of FRPP for $500,000 and the assumption of
certain reclamation costs and benefits relating to the site. An
appraisal of the property was obtained. The transaction was
approved by the Company's Board of Directors with those directors
who are also directors of FRPP abstaining.
Thompson S. Baker is entitled to receive sand mining royalty
payments of $.05 per ton from the Company under lease agreements
which terminate in 2002 and 2048 relating to approximately 489
acres. No payments were made to Mr. Baker during fiscal 1995 under
these agreements.
On May 14, 1974 the Company exercised its option to purchase
the sand on 71 acres of land in Putnam County, Florida. The land
is owned by Thompson S. Baker and certain other interests. The
term of the agreement ends on June 30, 2004. The landowners will
receive $.08 per ton (subject to escalation provisions) for sand as
it is mined with an annual minimum payment of $6,000. The mining
agreement may be terminated at any time by the Company.
Mr. Fichthorn provided the Company with financial consulting
and other services during fiscal 1995 for which he received
$55,000.
In the opinion of the Company, the terms, conditions,
transactions and payments under the agreements with the persons
described above were not less favorable to the Company than those
which would have been available from unaffiliated persons.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and notes set forth the beneficial
ownership of common stock of the Company by each person known by
the Company to own beneficially more than 5% of the common stock of
the Company.
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
Baker Investments, Ltd. 2,070,167 (1) 21.8%
P.O. Box 4667
Jacksonville, FL 32201
Quest Advisory Corp. 922,100 (2) 9.7%
Quest Management Company 33,400 (2) .4%
(a general partnership)
Charles M. Royce 35 (2) -
1414 Avenue of the Americas
New York, NY 1000 955,535 (2) 10.1%
(1) Baker Investments, Ltd. is a limited partnership owned and
controlled by the Baker family. Edward L. Baker and John D. Baker
II are general partners and as such have shared voting and
dispositive power over the shares owned by the partner-ship.
Ownership is reported as of November 1, 1995.
(2) Quest Advisory Corp. ("Quest"), Quest Management Company
("QMC") and Charles M. Royce reported that they are members of a
group pursuant to Securities and Exchange Commission Rule 13d-
(1)(b)(ii)(H). Mr. Royce may be deemed to be a controlling person
of Quest and QMC, and as such may be deemed to own beneficially the
shares of common stock of the Company owned beneficially by Quest
and QMC. Mr. Royce owns 35 shares outside of Quest and QMC, and
disclaims beneficial ownership of the shares held by Quest and QMC.
Quest and QMC are investment advisers registered under Section 203
of the Investment Advisers Act of 1940. Each has sole voting and
dispositive power as to the shares shown. Ownership is reported as
of July 6, 1995, except as to the 35 shares owned by Mr. Royce
which are reported as of August 22, 1995.
COMMON STOCK OWNERSHIP BY DIRECTORS AND OFFICERS
The following table and notes set forth the beneficial
ownership of common stock of the Company by each director and each
non-director named in the Summary Compensation Table and by all
officers and directors of the Company as a group as of November 1,
1995 and also includes shares held under options which are
exercisable within 60 days of December 18, 1995.
NAME OF AMOUNT AND NATURE PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
Thompson S. Baker 54,774 (1)(2)(3)(4) *
Edward L. Baker 2,312,108 (1)(3)(4)(5) 24.3%
John D. Baker II 451,924 (1)(3)(4)(5)(6)(7) 4.7%
Thompson S. Baker II 25,187 (3) *
Donald L. Bloebaum 29,930 *
A. R. Carpenter 100 *
Robert D. Davis 40,000 (8) *
Charles H. Denny III 127,544 (9) 1.3%
Albert D. Ernest, Jr. 1,100 *
Luke E. Fichthorn III 21,939 *
H. B. Horner 8,744 *
Frank M. Hubbard 2,295 *
Francis X. Knott 1,602 *
Radford D. Lovett 9,047 *
W. Thomas Rice 8,140 *
C.J. Shepherdson 56,194 *
All Directors and
Officers as a group (25
people) 3,256,943 (10) 33.6
*Less than 1%
The preceding table includes the following shares held under
the Company's Tax Reduction Act Employee Stock Ownership Plan
("TRAESOP") as of November 1, 1995, as to which the named person
has sole voting power, and shares held under options which are
exercisable within 60 days of December 18, 1995.
SHARES UNDER TRAESOP SHARES UNDER OPTION
Thompson S. Baker 2,656 -
Edward L. Baker 5,840 47,000
John D. Baker II 3,565 37,000
Thompson S. Baker II 28 12,100
C.J. Shepherdson 4,823 25,800
H. B. Horner --- 8,100
Donald L. Bloebaum 3,720 23,100
All directors and
officers as a group 33,378 211,700
(1) 864 of the shares shown opposite Thompson S. Baker are held in
a fiduciary account and beneficially by Thompson S. Baker and,
under certain circumstances, by members of his family, including
his sons, Edward L. Baker and John D. Baker II who are also
directors and officers of the Company. Thompson S. Baker, who is
co-trustee with SunTrust Bank/North Florida, N.A. and Edward L.
Baker as to these shares, has shared voting power with the
remaining trustees; however, the individual trustees have the power
to remove the corporate trustee and appoint a successor corporate
trustee and the individual trustees share investment power to the
exclusion of the corporate trustee in the event of disagreement.
Such shares are excluded from those shown opposite the names of
Edward L. Baker and John D. Baker II.
(2) Includes 49,775 shares owned by Mrs. Thompson S. Baker as to
which Thompson S. Baker disclaims any beneficial interest.
(3) Thompson S. Baker, Edward L. Baker, John D. Baker II and
Thompson S. Baker II may be considered to be control persons of the
Company.
(4) Shares shown opposite the name of Edward L. Baker include
2,070,167 shares owned by Baker Investments, Ltd. See note (1) on
page 20. Such shares are excluded from those shown opposite the
names of Thompson S. Baker and John D. Baker II.
(5) Includes 1,900 shares owned by Mrs. Edward L. Baker and 12,239
shares owned by a child of Edward L. Baker, as to all of which he
disclaims any beneficial interest. Includes 48,714 shares held by
Edward L. Baker as trustee for the children of John D. Baker II, as
to which Edward L. Baker has sole investing and voting power but
disclaims any beneficial interest. Such shares are excluded from
those shown opposite the name of John D. Baker II.
(6) Includes 1,400 shares owned by Mrs. John D. Baker II, as to
which John D. Baker II disclaims any beneficial interest.
(7) Regency Square II, a Florida general partnership, owns 27,000
shares of the Company. Trust B under the will of Martin E. Stein,
deceased, as a general partner, holds a 46.2128% interest in the
partnership. John D. Baker II is a co-trustee of the trust and as
such has a one-third shared voting and dispositive power as to the
trust. The partnership's shares in the Company are included in the
above table for John D. Baker II, who disclaims any pecuniary or
other beneficial interest in such shares.
(8) Includes 35,000 shares held by Cede & Co. in the name of
American Heritage Life Insurance Company, a wholly owned subsidiary
of American Heritage Life Investment Corporation. Mr. Davis is a
director and shareholder of American Heritage Life Investment
Corporation and a director, executive officer and shareholder of
D.D.I., Inc. which holds 30.17% of the outstanding American
Heritage Life Investment Corporation shares.
(9) Includes 2,000 shares owned by Mrs. Charles H. Denny III, as
to which Charles H. Denny III disclaims any beneficial interest.
(10) Includes, in addition to all of the individual holdings for
persons named above, 106,315 shares owned by other officers of the
Company, of which 100 shares are owned by the wife of one officer
and 12,746 shares are held under the Company's Tax Reduction Act
Employee Stock Ownership Plan as to which such other officers,
respectively, have sole voting power and 58,600 shares held under
options which were exercisable within 60 days of December 18, 1995.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders to be presented at the next annual
meeting of shareholders must be received at the principal executive
offices of the Company on or before August 20, 1996.
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 executive officers and directors to file initial
reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission and the American Stock Exchange.
Executive officers and directors are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms
furnished to the Company and written representations from the
Company's executive officers and directors, the Company believes
all persons subject to these reporting requirements filed the
required reports on a timely basis.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the
Company, including expenses in connection with the preparation and
mailing of this proxy statement. The Company will reimburse
brokers and nominees their reasonable expenses for sending proxy
material to principals and obtaining their proxies. In addition to
solicitation by mail, proxies may be solicited in person or by
telephone or other electronic means by directors, officers and
other employees of the Company.
OTHER MATTERS
As far as is known, no business will be presented for
consideration at the meeting other than that shown above. However,
if any such other business shall come before the meeting, the
persons named in the enclosed form of proxy or their substitutes
will vote said proxy in respect of any such business in accordance
with their best judgment pursuant to the discretionary authority
conferred thereby.
BY ORDER OF THE BOARD OF DIRECTORS
December 18, 1995 Dennis D. Frick
Secretary
PLEASE RETURN THE ENCLOSED FORM OF PROXY,
DATED AND SIGNED, IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE.
SHAREHOLDERS MAY RECEIVE WITHOUT CHARGE A COPY OF FLORIDA ROCK
INDUSTRIES, INC.'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K INCLUDING THE FINANCIAL STATEMENTS AND THE
FINANCIAL STATEMENT SCHEDULES BY WRITING TO THE TREASURER AT POST
OFFICE BOX 4667, JACKSONVILLE, FLORIDA 32201.
APPENDIX I
RESOLVED, that the Florida Rock Industries, Inc. 1996 Stock
Option Plan be approved in the form as follows:
FLORIDA ROCK INDUSTRIES, INC.
1996 STOCK OPTION PLAN
(1) Purpose
The Florida Rock Industries, Inc. 1996 Stock Option Plan ("the
Company's 1996 Option Plan"), is intended to provide incentives to
officers and other key employees and directors of Florida Rock
Industries, Inc. (the "Company"), its Subsidiaries and its
Affiliates, by providing them with opportunities to purchase shares
of common stock of the Company, par value $.10 per share ("Common
Stock"), pursuant to options ("Options") which are incentive stock
options ("Incentive Stock Options") under Section 422 of the
Internal Revenue Code of 1954, as amended (the Code"), or options
which are not Incentive Stock Options (Non Statutory Stock
Options"). As used herein, the terms "parent" and "Subsidiary"
shall have the meanings specified in Section 425 of the Code, and
the term "Affiliate" shall mean an Affiliate of the Company within
the meaning of Section 517.021 of the Florida Securities Act.
(2) Administration
(a) The Company's 1996 Option Plan shall be administered by
the Board of Directors of the Company (the "Board") or by a
committee (the "Committee") of not less than two independent
outside directors of the Company selected by, and serving at the
pleasure of, the Board, all of whom, to the extent necessary to
comply with Rule l6b-3 under the Securities Exchange Act of 1934,
as amended, also shall be "disinterested" within the meaning of
such Rule. Directors who are current or former officers or
employees of the Company or any Affiliate thereof or are
compensated by the Company or any affiliate other than in the
capacity of director, may not serve on the Committee.
(b) The Committee shall select a chairman. A majority of the
members of the Committee shall constitute a quorum. All
determinations of the Committee shall be made by the affirmative
vote of a majority of its members. Any decision or determination
reduced to writing and signed by all the members of the Committee
shall be as fully effective as if it had been made by a majority
vote of the members at a meeting duly called and held. The
Committee shall make such other rules and regulations for the
conduct of its business as it shall deem advisable.
(c) Whether or not the Committee is appointed, all powers and
functions of the Committee may at any time and from time to time be
exercised by the Board (provided that any members of the Board who
would not be eligible to be a member of the Committee shall have no
vote).
(d) The Board or the Committee shall have authority, subject
to the terms of the Company's 1996 Option Plan: to determine the
persons to whom Options shall be granted, the number of shares of
Common Stock to be covered by each Option, the purchase price per
share of Common Stock covered by each Option, the time or times at
which Options may be granted and exercised, and the terms and
provisions of the instruments by which Options shall be evidenced;
to grant in substitution for outstanding Options replacement
Options and to cancel such outstanding Options; to adjust the price
or number of shares under Options pursuant to and in keeping with
the principles and requirements set forth in regulations under
Section 424 of the Code; to interpret the Company's 1996 Option
Plan; to establish, amend and rescind rules and guidelines for
administering the Company's 1996 Option Plan; and to make all
determinations necessary or advisable, in its sole discretion, for
the administration of the Company's 1996 Option Plan.
(e) The Board or the Committee may designate any officer of
the Company to assist it in the administration of the Company's
1996 Option Plan and may grant authority to any such officer to
execute agreements or other documents and otherwise take action on
behalf of the Board or the Committee, as the case may be.
(f) The Board or the Committee may employ legal counsel and
such other professional advisors as it may deem desirable for the
administration of the Company's 1996 Option Plan and may rely on
any opinion received from such counsel or advisor.
(3) Eligibility
Incentive Stock Options may be granted only to officers and
other persons deemed by the Committee to be key employees of the
Company or any subsidiary thereof and Non Statutory Stock Options
may be granted only to officers and other persons deemed by the
Committee to be key employees and directors of the Company or any
subsidiary thereof. The granting of any Option to any person under
the Company's 1996 Option Plan shall neither entitle such person
to, nor disqualify such person from, participation in any other
grant of Options or in any other incentive plan.
(4) Stock
The maximum number of shares of Common Stock which may be
issued upon the exercise of Options granted under the Company's
1996 Option Plan shall be 500,000 shares. No more than 50,000
shares shall be optioned to any one person in any fiscal year. The
same shares of Common Stock may be subject to simultaneous, tandem
or successive Options. Upon the exercise of Options, the Company
may either issue reserved but unissued shares of Common Stock or
transfer shares of Common Stock held in its treasury.
(5) Granting of Options
No Options intended to be Incentive Stock Options may be
granted under the Company's 1996 Option Plan after November 30,
2005. The date of grant of an Option under the Company's 1996
Option Plan will be the date on which the Option is awarded by the
Board or the Committee, unless a later date is specified by the
Board or the Committee at the time of the award.
(6) Terms and Conditions of Options
Options shall be evidenced by instruments in such form or
forms as the Board or the Committee may from time to time approve.
Such instruments shall conform to the following terms and
conditions:
(a) Option Price. In the case of an Incentive Stock Option,
the Option price per share shall not be less than the fair market
value of the Company's Common Stock on the date of grant. In order
for an option holder to receive special tax treatment with respect
to stock acquired under an Option intended to be an Incentive Stock
Option, the Option holder of such Option must be, at all times
during the period beginning on the date of grant and ending on the
day three months before the date of exercise of such Option, an
employee of the Company or any of the Company's subsidiary
corporations (within the meaning of Code Section 424), or of a
corporation or subsidiary corporation of such corporation issuing
or assuming a stock option in a transaction to which Code Section
424(a) applies. If an Option granted under the Company's 1996
Option Plan is intended to be an Incentive Stock Option, and if the
option holder, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes
of stock of the option holder's employer corporation or of its
subsidiary corporation, then (i) the option exercise price per
share shall in no event be less than 110 percent of the fair market
value of the Common Stock on the date of such grant and (ii) such
Option shall not be exercisable after the expiration of five years
after the date such Option is granted. In the case of a Non
Statutory Stock Option, the Option price per share shall not be
less than the fair market value of a share of Common Stock on the
date of grant thereof (determined by the Board or the Committee).
(b) Term of Options. Each Option intended to be an Incentive
Stock Option shall expire no later than the day before the tenth
anniversary of the date of its grant.
(c) Exercisability. Each Option shall become exercisable
immediately or in one or more installments at the time or times and
upon the satisfaction of such conditions as may be provided in the
instrument evidencing such Option. Except as stated herein an
Option may be exercised from time to time, in whole or in part, up
to the total number of shares with respect to which it is then
exercisable.
(d) Payment. Each instrument evidencing an Option shall
provide for the terms of payment of the Option price. Subject to
any limitations in such instrument, the holder of an Option may pay
the option price in cash, by transfer of shares of Common Stock or
any other property acceptable to the Board or the Committee, or any
combination thereof, provided that the holder of an Option may not
pay the option price by transfer of shares of Common Stock received
upon the exercise of any Incentive Stock Option under the Company's
1996 Option Plan or any Incentive Stock Option under another stock
option plan of the Company unless (i) such shares have been held by
such holder for more than one year prior to such payment and (ii)
such shares were acquired by the holder pursuant to the exercise of
an Option granted to the holder not less than two years prior to
such payment. The instrument evidencing an Option may provide for
the giving of or arranging for financial assistance (including,
without limitation, bonuses, subsidies, direct loans from the
Company where approved by the Board in compliance with Chapter 607,
Florida Statutes, with or without interest, secured or unsecured,
or guarantees by the Company of third party loans) to the holder of
an Option for the purpose of providing funds for the purchase of
shares of Common Stock upon exercise of an Option.
(e) Termination of Employment. If the holder of an Incentive
Stock Option ceases to be employed by the Company or any parent or
subsidiary thereof, or if the holder of a Non Statutory Stock
Option ceases to be employed by the Company or any Affiliate
thereof (or, in the case of a holder of a Non Statutory Stock
Option who is a director but not also an employee of the Company or
any Affiliate thereof, ceases to be such a director), other than by
reason of death, or if the holder of a Non Statutory Stock Option
ceases to be employed by the Company or any affiliate thereof in a
capacity similar or greater in responsibility to that held at the
time of grant (as determined by the Board or Committee) such Option
shall terminate no later than three months from the date of
termination of such employment, or of such directorship, or of such
determination of employment to be in a lesser capacity, as the case
may be; provided that, in the case of termination of employment
(or directorship) due to a disability within the meaning of Section
105(d) (4) of the Code, such Option shall terminate no later than
one year from the date of termination of employment (or
directorship), but in any event no later than its specified
expiration date. Whether authorized leave of absence or absence on
military or governmental service may constitute employment for the
purposes of the Company's 1996 Option Plan shall be conclusively
determined by the Board or the Committee. Notwithstanding the
foregoing, if the employment of the holder of an Option is
terminated for cause (as hereinafter defined) or is terminated by
such holder in violation of any agreement between such holder and
the Company or any of its Affiliates, or if it is discovered after
any such termination of employment that such holder had engaged in
conduct that would have justified termination for cause, all
unexercised Options of such holder shall immediately be cancelled.
Termination of employment shall be deemed to be for cause if the
holder of an Option shall, in connection with such holder's duties
as an employee of the Company or any of its Affiliates, have
committed a fraud or any felony, have engaged in willful misconduct
or have committed any other act which causes or may reasonably be
expected to cause substantial injury to the Company or any of its
Affiliates.
(f) Death. If the holder of an Option dies, such Option may
be exercised, to the extent of the number of shares of Common
Stock with respect to which such holder could have exercised such
Option on the date of death, by such holder's estate, personal
representative or beneficiary who acquires such Option by will or
by the laws of descent and distribution, at any time prior to the
earlier of such Option's specified expiration date and the first
anniversary of such holder's death. On the earlier of such dates,
such Option shall terminate.
(g) Assignability. No Option may be assigned or transferred
by the holder thereof, except by will or by the laws of descent and
distribution, and during the lifetime of any holder of an Option,
such Option maybe exercised only by such holder. At the request of
the holder of an Option, shares of Common Stock purchased upon the
exercise of such Option may be issued in or transferred into the
name of such holder and another person, jointly with the right of
survivorship.
(h) Withholding. The Company's obligation to deliver shares
of Common Stock or make any payment upon the exercise of any Option
shall be subject to applicable federal, state and local tax
withholding requirements.
(i) Limitation on Exercise. Stock options granted under this
Plan shall be limited and/or conditioned as may be required so that
the aggregate fair market value (using values determined at the
respective times of grant of the options involved) of all shares of
stock that may be purchased by any one individual by exercise of
Incentive Stock Options granted under the Company's 1996 Option
Plan together with incentive stock options (within the meaning of
Section 422 of the Internal Revenue Code) granted, on or after
January 1, 1987, under any and all other plans of the Company,
(including its parent and subsidiaries, if any) first becoming
exercisable in any one calendar year shall not exceed $100,000.
(j) Shareholder Approval. The grant of any Option under this
Plan is conditioned upon approval of the Company's 1996 Option Plan
by the shareholders in accordance with Florida law within twelve
months after the date the Company's 1996 Option Plan is adopted by
the Board, and no Option may be exercised until such approval has
been obtained. In the event of the failure to obtain such approval
within such period, the Company's 1996 Option Plan shall
automatically terminate and all Options theretofore granted under
the Company's 1996 Option Plan shall automatically be cancelled.
(k) Other Terms. Instruments evidencing Options may contain
such other provisions, not inconsistent with the Company's 1996
Option Plan, as the Board or the Committee deems advisable. Among
these provisions may be (i) a requirement that the holder of an
Option represent to the Company in writing, when the Option is
granted or when such holder purchases shares of Common Stock on its
exercise, that such holder is accepting such Option, or purchasing
such shares (unless they are then covered by an effective
registration statement under the Securities Act of 1933), for such
holder's own account for investment; (ii) a provision under which
the Company, in the discretion of the Board or the Committee, shall
have the right, in lieu of accepting payment of the option price
and delivering any or all shares of Common Stock as to which an
Option has been exercised, to elect to pay the holder of such
Option an amount in cash or shares of Common Stock equal to the
amount by which the fair market value of such shares of Common
Stock on the date of exercise exceeds the purchase price that would
otherwise be payable by the holder of such Option to acquire such
shares of Common Stock; and (iii) a provision under which the
Company may have either the right or the obligation, or both, to
repurchase shares of Common Stock sold under the Company's 1996
Option Plan at a price not to exceed the higher of (x) the option
price for such shares, plus twice the increase, if any, in the book
value of such shares from the date of the grant of the Option to
the date of such repurchase, and (y) the fair market value of the
shares at the time of repurchase.
(7) Capital Adjustments
In the event of any change in the outstanding shares of Common
Stock by reason of any stock dividend, stock split, combination or
exchange of shares, recapitalization, reclassification, merger,
consolidation, reorganization, or other similar transaction, the
Board or the Committee shall make appropriate adjustments in the
number and purchase price of shares of Common Stock covered by each
option outstanding on the date of such transaction (by means of a
grant of a substitute Option or an additional Option, or
otherwise), and in the total number of shares of Common Stock
reserved for future grant of Options under the Company's 1996
Option Plan.
(8) Merger, Consolidation or Reorganization
In the event of (i) any merger, consolidation, or other
reorganization of the Company with or into another Company (other
than any merger, consolidation, or reorganization in which the
Company is the surviving or continuing company and which does not
result in any change in the outstanding shares of Common Stock);
(ii) any sale or other disposition of all, substantially all, or a
substantial portion of the assets of the Company (including a
distribution of stock to which Section 355 of the Code is
applicable); or (iii) any liquidation or dissolution of the
Company, then, and in any such event, any outstanding Option not
exercisable in full shall (unless the stock option agreement
evidencing such option expressly provides to the contrary) be
accelerated and become exercisable in full for a period of 30 days
following receipt by the holder of such Option of notice of such
event, whether received before or after such event, provided that
it shall be the duty of the Board (or the Committee for the Board)
to give such notice (or in the alternative, the notice contemplated
in the last sentence of this Section 8) on or before seven (7) days
after such event. Any Option not exercised during the 30-day
period described in this sentence shall, following such 30-day
period, be exercisable in accordance with Section 6 as if the event
and the temporary acceleration under this Section 8 had not
occurred. The Board or the Committee, in its discretion, may, by
written notice to the holders of outstanding Options prior to such
event (but not thereafter), prevent the acceleration of
exercisability as to all (but not less than all) such Options under
this Section 8.
(9) Change in Control
In the event (a) any person, including a "group" as defined in
Section 13(d) (3) of the Securities Exchange Act of 1934 (but
excluding the following persons who are directors of the Company:
Thompson S. Baker, Edward L. Baker, John D. Baker II, Thompson S.
Baker II and members of their immediate family) shall become the
beneficial owner of 35% or more of the shares of Common Stock, or
(b) in connection with any cash tender offer, exchange offer,
contested election, merger, consolidation, reorganization (other
than any merger, consolidation or reorganization which is subject
to the provisions of Section 8), sale or other disposition of all
or substantially all the assets of the Company or other similar
transaction, persons who were directors of the Company prior to
commencement of any such offer or prior to any vote of the
shareholders of the Company on any such contested election or other
transaction, as the case may be, shall cease to constitute a
majority of the Board, or (c) the Company files with the Securities
and Exchange Commission a report on Form 8-K reporting the change
in control pursuant to Item 1 thereof, then, and in any such event,
any outstanding Option not exercisable in full shall (unless the
stock option agreement evidencing such Option expressly provides to
the contrary) be accelerated and become exercisable in full for the
remaining term of such Option, provided that the Board or the
Committee, in its discretion, may, by written notice to the holders
of outstanding Options prior to any such event referred to in
clause (a) or (c) of this Section 9, or prior to commencement of
any such offer or prior to any vote of the shareholders of the
Company on any such contested election or other transaction
referred to in clause (b) of this Section 9, as the case may be
(but not thereafter), cancel the acceleration of exercisability of
all (but not less than all) such outstanding Options under this
Section 9.
(10) Indemnification of Board and Committee
No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the
Company's 1996 Option Plan or any Option granted under the
Company's 1996 Option Plan. In addition to such other rights of
indemnification as they may have as members of the Board or as
members of the Committee, the members of the Board or the Committee
shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of
any action taken or failure to act under or in connection with the
Company's 1996 Option Plan, or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided
such settlement is approved by legal counsel selected by the
company) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except a judgment based upon a finding
of bad faith. Upon the institution of any such action, suit or
proceeding, a Board or Committee member shall notify the Company in
writing, giving the Company an opportunity, at its own expense, to
handle and defend the same before such Board or Committee member
undertakes to handle it on his own behalf.
(11) Amendment of the Company's 1996 Option Plan
The Company's 1996 Option Plan shall become effective upon its
adoption by the Board, subject only to approval by the shareholders
of the Company in accordance with Florida law within twelve months
from the date the Company's 1996 Option Plan is so adopted. The
Board or the shareholders of the Company may terminate or amend the
Company's 1996 Option Plan in any respect at any time, with the
exceptions that (a) no action of the Board or the shareholders of
the company may impair the rights of the holders of any outstanding
Option without his consent (except as specified in Section 6 or 7),
and (b) without the approval of the shareholders of the Company,
(i) the total number of shares that may be sold under the Company's
1996 Option Plan may not be increased (except by adjustment
pursuant to Section 7), (ii) the provisions of Section 3 regarding
eligibility may not be modified, and (iii) the date until which
Options may be granted under the Company's 1996 Option Plan may not
be extended.
(12) Use of Proceeds
Proceeds from the sale of shares of Common Stock pursuant to
Options granted under the Company's 1996 Option Plan shall
constitute general funds of the Company. Shares of Common Stock
tendered upon the exercise of Options granted under the Company's
1996 Option Plan may be cancelled, retired or become treasury
shares of the Company as determined by the Company.
FLORIDA ROCK INDUSTRIES, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS CALLED FOR
FEBRUARY 7, 1996
The undersigned hereby appoints Edward L. Baker and John D.
Baker II, or either of them, the attorneys, agents and proxies of
the undersigned with full power of substitution to vote all the
shares of common stock of Florida Rock Industries, Inc. which the
undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at the general offices of
the Company, 155 East 21st Street, Jacksonville, Florida on
February 7, 1996, at 9 o'clock in the morning, and all adjournments
thereof, with all the powers the undersigned would possess if then
and there personally present. Without limiting the general
authorization and power hereby given, the above proxies are
directed to vote as instructed on the matters below:
1. The election of one director to serve for a term of two years
and four directors to serve for a term of four years.
/ / FOR the nominees listed below (except / / WITHHOLD AUTHORITY
as marked to the contrary below) to vote for all
nominees listed below
Robert D. Davis
to serve for a term of two years
Edward L. Baker, Francis X. Knott, Radford D. Lovett and
W. Thomas Rice
to serve for a term of four years
To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided.
_________________________________________________________________
2. To act upon a proposal to approve and adopt the Company's 1996
Stock Option Plan.
/ / FOR/ / AGAINST
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
(Continued and to be signed on other side)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- -
The undersigned hereby revokes any proxy heretofore given with
respect to said stock, acknowledges receipt of the Notice and the
Proxy Statement for the meeting accompanying this proxy, each dated
December 18, 1995, and authorizes and confirms all that the said
proxies or their substitutes, or any of them, may do by virtue
hereof.
Dated:_______________________________________,199___
____________________________________________________
Signature
____________________________________________________
Signature, if held jointly
IMPORTANT: Please date this proxy and sign exactly as your
name or names appear(s) hereon. If the stock is held jointly,
signatures should include both names. Personal representa-
tives, trustees, guardians and others signing in a
representative capacity should give full title. If you attend
the meeting you may, if you wish, withdraw your proxy and vote
in person.
PLEASE RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE
