UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1998 Commission file No. 0-6764
Mobile America Corporation
(Exact name of registrant as specified in its charter)
FLORIDA 59-1218935
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10475 Fortune Parkway Suite 110
Jacksonville, Florida 32256
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 363-6339
Securities registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act: Common Stock $.025
par value (Title of Class)
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at June 1, 1999: $14,513,885
Common Stock ($.025 Par value) outstanding at June 1, 1999: 7,227,160 Shares
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
<PAGE>
This Amendment is being filed to include Items comprising the Part III
information required by Form 10-K as the Registrant has not filed its definitive
proxy statement within 120 days of the end of its fiscal year.
Part III
Item 10. Directors and Executive Officers of the Registrant.
--------------------------------------------------
The following table presents the names and ages of all individuals
currently serving as directors and executive officers of the Registrant, all
positions and offices held with the Registrant, and a brief account of their
business experience during the past five years.
<TABLE>
<CAPTION>
Offices Held in Company; Principal Year First
Name Age Occupations During the Past Five Years Became Director
- ---- --- -------------------------------------- ---------------
<S> <C> <C> <C>
J. Michael Garrity 58 Director; consultant to Guy Carpenter & Co. since 1994
October 1997; Senior Vice President of G.J.
Sullivan Co. from June 1994 to October 1997;
Senior Vice President of AON Reinsurance for
more than five years until June 1994.
Allan J. McCorkle 67 Chairman of the Board of Directors; President and 1968
Chief Executive Officer from August
1985 until May 24, 1999.
Thomas J. McCorkle 56 Vice President and Director; President of Fortune 1980
Life Insurance Company from December
1981 to April 1986; Vice President of
Fortune Insurance Company for more
than five years until April 1986;
President of Mobile America Insurance
Group since April 1986.
Thomas E. Perry 66 Director; private investor; President of Sing 1994
Development Company from 1990 to 1998.
R. Lee Smith 56 Director; private investor and real estate 1979
developer; practicing attorney from 1979 to 1997;
President of Fortune Life Insurance
Company from 1968 to 1997.
Robert Thomas, III 65 Director; private investor; Senior Vice President 1976
of Brown & Brown, Inc. (an insurance agency) since
1980; previously also a member of the Executive
Committee of Brown & Brown, Inc. from 1980 until
December 1998.
Holly J. McCorkle 33 Director since May 24, 1999; practicing attorney 1999
since 1991.
Arthur L. Cahoon 43 Interim President and CEO and Director since May 1999
24, 1999; member of the Board of Directors of
Verio Inc. since January 1999; Chairman of the
Board and CEO of Hiway Technologies, Inc., an
internet company, from May 1998 to January 1999;
since March 1993, general partner of Rock Creek
Partners, Ltd., an investment company, and
Executive Vice President of James Dahl & Co., an
investment banking company; since January 1995,
Executive Vice President of Timberland Investment
Services, LLP, an investment management company,
which he co-founded; in addition, from June 1995
to June 1996, President of QuinStone Industries,
Inc., a manufacturing company.
Duane A. Sanders 42 Vice President - Operations since August 1995; 1995
Regional Director/Asst. Vice President Cigna
Financial Institution Services from June 1994
until August 1995; Asst. Vice President
Consolidated International Insurance Group from
May 1993 until May 1994; Unit Supervisor, Division
Supervisor, Division Manager, Senior Financial
Business Analyst, Product Manager - Progressive
Insurance from May 1985 until April 1993.
</TABLE>
Allan J. McCorkle and Thomas J. McCorkle are brothers. Allan J.
McCorkle is the father of Holly J. McCorkle. Each director is elected to serve
until the next annual meeting of shareholders and until the election and
qualification of a successor or his or her earlier death, resignation or
removal. The term of office of each of the executive officers named above
expires at the first meeting of the Board of Directors following the annual
meeting of the shareholders.
Voting Agreement
On May 24, 1999, the Registrant, Allan J. McCorkle ("A. McCorkle") and
R. Lee Smith ("Smith") entered into a Shareholder Agreement (the "Voting
Agreement"). In the Voting Agreement, A. McCorkle and Smith agreed to vote all
of the shares over which they then have voting power (except 24,701 shares
contributed by McCorkle to the Kissaway County Charitable Trust) in favor of the
following slate of directors: (i) Allan J. McCorkle, Thomas J. McCorkle and
Holly J. McCorkle (the "Family Directors"), (ii) J. Michael Garrity, Thomas E.
Perry, R. Lee Smith and Robert Thomas (the "Non-Family Directors") and (iii)
Arthur L. Cahoon. In the event of a vacancy on the Board with respect to a
Family Director, A. McCorkle and Smith agreed to vote for a director nominated
by A. McCorkle, and in the event of a vacancy on the Board with respect to a
Non-Family Director, A. McCorkle and Smith agreed to vote in favor of an
individual nominated by the Non-Family Directors and Cahoon. In the event a new
President and CEO is hired and elected as a director, A. McCorkle and Smith
agreed to vote in favor of an additional nominee selected by A. McCorkle.
The Voting Agreement generally continues until, but not including, the
2002 Annual Meeting of the Registrant's shareholders. However, the Voting
Agreement will terminate earlier on the happening of any of the following
events: (i) the death of A. McCorkle, (ii) default by the Registrant under its
Consulting Agreement or Director Indemnification Agreement with A. McCorkle
after notice and opportunity to cure, (iii) the occurrence of a "material
adverse change" as defined in the Voting Agreement or (iv) failure of the
Company's Board to nominate as directors the Family Directors or Cahoon.
On May 24, 1999 the number of directors was increased by two and Holly
J. McCorkle and Arthur L. Cahoon were elected to serve as directors until the
next Registrant's annual meeting of shareholders and until their successors are
duly elected and qualified.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires the Registrant's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Registrant's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Registrant. Officers, directors, and greater
than ten percent stockholders are required by SEC regulation to furnish the
Registrant with copies of all Section 16(a) forms they file.
Based upon a review of its files in preparing this Amendment, the
Registrant discovered that its executive officers and directors inadvertently
failed to file information concerning the grant of stock options under the
Registrant's Incentive Plan. Grants have been disclosed in definitive proxy
statements filed by the Registrant. The Registrant is assisting its executive
officers and directors with reporting such options on late Form 5 filings in
July, 1999. As of the date of this filing, all of these filings were made except
the report of Jack Chambers, a former director of the Company, Thomas J.
McCorkle and Allan J. McCorkle. The late Form 5 filing of Thomas E. Perry
included one transaction in which he acquired 3,000 shares of the Registrant's
stock in December 1998 for which Mr. Perry inadvertently failed to file a Form
4. Effective December 31, 1996 Allan J. McCorkle transferred all of his stock in
Mobile America to a limited partnership controlled by Mr. McCorkle. Mr. McCorkle
inadvertently failed to file a Form 5 reflecting this change in form of
ownership and inadvertently failed to file a Form 3 initial statement of
ownership for the partnership. Mr. McCorkle has continued to report the shares
owned by the partnership as directly owned by him and has reported changes in
ownership by the partnership as changes in his direct ownership. The partnership
is in the process of preparing a late Form 3 filing and a late joint Form 5
filing with Mr. McCorkle for pre-1999 transactions by the partnership which Mr.
McCorkle reported as changes in his direct ownership. Other than the foregoing,
to the Registrant's knowledge, based solely on a review of the copies of such
reports furnished to the Registrant and written representations that no other
reports were required, during the Registrant's 1998 fiscal year all applicable
Section 16(a) filing requirements were complied with by the officers, directors,
and greater than ten percent beneficial owners.
Item 11. Executive Compensation
The following table sets forth information with respect to the
compensation paid or accrued by the Registrant and its subsidiaries for services
rendered during the last three fiscal years, to the Registrant's Chief Executive
Officer and each of the other executive officers of the Registrant who were
serving as executive officers at the end of the fiscal year.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
Securities
Other Underlying All
Annual Options / Other
Name and Position Year Salary(1) Bonus Compensation(2) SAR's Compensation(3)
- ---------------------------- ----------- ---------------- -------------- ------------------ --------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Allan J. McCorkle(4) 1998 $427,751 $169,260 - 15,000 $13,430
Chairman, President and 1997 413,953 176,312 - 15,000 13,363
Chief Executive Officer 1996 413,953 132,565 - 17,250(5) 13,589
Thomas J. McCorkle 1998 $127,000 $ 42,315 - 5,000 13,761
Vice President 1997 120,000 44,078 - 5,000 13,686
1996 114,043 33,142 - 5,750(5) 13,347
Duane A. Sanders 1998 $131,475 $ 42,315 - 5,000 13,761
Vice President 1997 124,439 44,078 - 5,000 13,686
1996 117,413 11,441 - 5,750(5) 11,770
Thomas L. Stinson(6) 1998 $126,300 $ 39,745 - 5,000 13,761
Vice President and 1997 115,750 22,369 - 5,000 12,664
Chief Financial Officer 1996 80,917 16,819 - 2,875(5) 9,094
</TABLE>
- ------------------------
(1) Includes amounts deferred under the Registrant's money purchase pension
plan.
(2) Each executive officer receives miscellaneous perquisites, the amount
of which does not exceed the applicable thresholds for specific
disclosure.
(3) The amounts shown in this column for 1998 include the following:
Company Contributions to Term Life
Money Purchase Pension Plan Insurance Premiums
--------------------------- ------------------
Allan J. McCorkle $12,126 $ 1,304
Thomas J. McCorkle 12,126 1,635
Duane E. Sanders 12,126 1,635
Thomas L. Stinson 12,126 1,635
(4) Allan J. McCorkle retired as President and Chief Executive Officer
effective May 24, 1999.
(5) Previously granted option shares have been adjusted to reflect the 15%
stock dividend effected in July 1997.
(6) Thomas L. Stinson terminated employment with the Registrant effective
March 31, 1999.
The Company has Agreements regarding Severance and Change in Control
(the "Severance Plans") with each of the executive officers other than Allan J.
McCorkle. The Severance Plans provide that if the executive is terminated other
than for cause (as defined in the Severance Plans) within 18 months after a
change in control of the Company, or if the executive terminates his or her
employment for good reason (as defined in the Severance Plans) within such
18-month period, the executive is entitled to receive a lump sum payment equal
to 18 months of his base salary and to continue to receive life and health
insurance benefits for an 18-month period after such termination. In addition,
the Severance Plans provide for the acceleration of all stock options held by
the executive. There are no other employment contracts outstanding on any of the
executive officers of the Registrant.
Options
The following table sets forth information concerning options granted
during the year ended December 31, 1998 under the Registrant's Incentive Plan to
the executives named in the Summary Compensation Table above. The Registrant did
not grant any stock appreciation rights during the year.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term
---------------------------------------------------------- -----------------------------
Percentage of
Number Total Options
Of Granted to
Options Employees in Exercise Expiration
Name Granted 1998(1) Price Date 5% 10%
- ------------------------- ------------- --------------- ----------- ---------------- -- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Allan J. McCorkle 15,000(2) 28.030% $ 7.125 08/27/2008 $ 67,213 70,331
Thomas J. McCorkle 5,000(2) 9.345% 7.125 08/27/2008 22,404 56,777
Duane A. Sanders 5,000(3) 9.345% 5.5625 11/20/2008 17,491 44,326
Thomas L. Stinson 5,000(3) 9.345% 5.5625 11/20/2008 17,491 44,326
</TABLE>
- ------------------------
(1) A total of 53,500 options were granted to key employees in 1998 under the
Company's Incentive Plan.
(2) All options granted are fully vested.
(3) Options vest 20% annually beginning on the first anniversary of the date
of grant.
<PAGE>
The following table sets forth information concerning the value of
unexercised options as of December 31, 1998 held by the executives named in the
Summary Compensation Table above. No options were exercised by such persons
during 1998.
<TABLE>
<CAPTION>
OPTION YEAR-END VALUES TABLE
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1998 December 31, 1998
Name Exercisable/Unexercisable(1) Exercisable/Unexercisable(2)
---- ------------------------- -------------------------
<S> <C> <C>
Allan J. McCorkle 76,000 / -0- -
Thomas J. McCorkle 27,250 / -0- -
Duane A. Sanders 10,200 / 17,050(3) -
Thomas L. Stinson 4,600 / 17,050(3) -
</TABLE>
- ------------------------
(1) Option amounts have been adjusted to reflect the 15% stock dividend
effected in July 1997.
(2) None of the unexercised options held by executive officers were "in-the-
money" as of the end of the fiscal year.
(3) Options vest 20% annually beginning on the first anniversary of the date
of grant.
Directors' Compensation
In 1998, each outside director of the Registrant was paid $1,000 for
each Board of Directors' meeting and $500 for each Board Committee meeting
attended. Each outside director also participates in the Registrant's group
health insurance and medical reimbursement plans for its executive officers at
no cost to the director. In 1998, the Registrant reimbursed Mr. Perry and Mr.
Thomas $15,593 and $1,235, respectively, under the Registrant's medical
reimbursement plan for medical expenses not covered by group health insurance.
The Registrant also provided each outside director with $265,000 of term life
insurance coverage under the Registrant's group life insurance plans for its
executive officers.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table shows the name, address and beneficial ownership as
of June 1, 1999, of (i) each person known to the Registrant to be the beneficial
owner of more than five percent of its outstanding common stock, (ii) each
person who was a director or executive officer of the Registrant as of that
date, and (iii) all executive officers and directors of the Registrant as a
group:
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
--------------- ------------------- --------
<S> <C> <C>
Allan J. McCorkle(1) 3,051,866(2) 41.79%
R. Lee Smith(3) 374,999(4) 5.17%
Robert Thomas, III 216,645(5) 2.99%
Thomas J. McCorkle 29,838(6) *
J. Michael Garrity 23,800(7) *
Thomas E. Perry 26,225(8) *
Duane A. Sanders 10,200(9) *
Holly J. McCorkle 18,471(10) *
Arthur L. Cahoon 50,000(11) *
All executive officers and directors 3,802,044 50.77%
as a group (a total of 9 persons)
</TABLE>
- --------------------------
* Less than 1%.
(1) The address of Mr. Allan McCorkle is c/o Jones & McCorkle, 6712 Atlantic
Boulevard, Jacksonville, Florida 32211.
(2) Includes 2,928,965 shares owned by McCorkle Investments Limited
Partnership, a Nevada limited partnership, controlled by Mr. McCorkle.
Includes 24,701 shares held by a charitable trust of which Mr. McCorkle
is one of four trustees, as to which Mr. McCorkle disclaims beneficial
ownership. Includes immediately exercisable options to purchase 28,750
shares, 17,250 shares, 15,000 shares and 15,000 shares, granted to Mr.
Allan McCorkle under the Registrant's Incentive Plan, at exercise
prices of $8.365, $8.91, $9.75 and $7.125 per share, respectively.
Excludes 347,749 shares owned by R. Lee Smith which are subject to a
Voting Agreement between Mr. McCorkle and Mr. Smith. See "Voting
Agreement."
(3) The address of Mr. Smith is 1200 Riverplace Boulevard, Suite 902,
Jacksonville, Florida 32207.
(4) Includes immediately exercisable options to purchase 11,500 shares, 5,750
shares, 5,000 shares and 5,000 shares, granted to Mr. Smith under the
Registrant's Incentive Plan, at exercise prices of $8.365, $8.91, $9.75
and $7.125 per share, respectively. Excludes 2,980,965 shares owned
beneficially by Allan J. McCorkle which are subject to a Voting Agreement
between Mr. Smith and Mr. McCorkle. See "Voting Agreement."
(5) Includes immediately exercisable options to acquire 11,500 shares,
5,750 shares, 5,000 shares and 5,000 shares granted to Mr. Thomas under
the Registrant's Incentive Plan at exercise prices of $8,365, $8.91,
$9.75 and $7.125, respectively. Includes the following shares as to
which Mr. Thomas disclaims beneficial ownership:
o 15,075 shares owned by his wife
o 41,210 shares owned by a community foundation of which Mr. Thomas
may be deemed to share voting and investment control as a result of
his position as a member of the Board of Directors and Investment
Committee of the foundation
o 96,620 shares owned by a family limited partnership of which Mr.
Thomas may be deemed to share voting and investment power as a
result of his role as a financial advisor to the limited partner-
ship
Excludes 243,265 shares which Mr. Thomas expects to reacquire as a
result of the rescission of a sale of such shares by Mr. Thomas that
occurred in May, 1998.
(6) Includes immediately exercisable options to purchase 11,500 shares,
5,750 shares, 5,000 shares and 5,000 shares, granted to Mr. Thomas
McCorkle under the Registrant's Incentive Plan, at exercise prices of
$8.365, $8.91, $11.875 and $7.125, respectively.
(7) Includes immediately exercisable options to purchase 5,750 shares,
5,750 shares, 5,000 shares and 5,000 shares, granted to Mr. Garrity
under the Registrant's Incentive Plan, at exercise prices of $8.365,
$8.91, $9.75 and $7.125 per share, respectively.
(8) Includes immediately exercisable options to purchase 5,750 shares,
5,750 shares, 5,000 shares and 5,000 shares, granted to Mr. Perry under
the Registrant's Incentive Plan, at exercise prices of $8.365, $8.91,
$9.75 and $7.125 per share, respectively.
(9) All amounts shown are immediately exercisable options to purchase 6,900
shares, 2,300 shares and 1,000 shares, granted to Mr. Sanders under the
Registrant's Incentive Plan, at exercise prices of $8.1565, $8.91 and
$9.75, respectively.
(10) Includes 2,040 shares owned by Ms. McCorkle's husband as to which Ms.
McCorkle disclaims beneficial ownership.
(11) Includes an immediately exercisable option to purchase 50,000 shares at
$3.125 per share.
Item 13. Certain Relationships and Related Transactions.
----------------------------------------------
No director or executive officer of the Registrant, nor any security
holder who is known to the Registrant to own of record or beneficially more than
five percent of any class of the Registrant's voting securities, nor any member
of the immediate family of any of the foregoing persons had any material
interest, direct or indirect, in any transaction of the Company or its
subsidiaries for the year ended December 31, 1998 or in any proposed
transactions. The Company engages in routine business transactions with certain
directors of the Company involving less than $60,000 each, and the terms of
these transactions are as favorable to the Company as could be obtained from
unrelated parties.
On May 24, 1999, the Registrant entered into a Consulting and
Noncompetition Agreement (the "Consulting Agreement") with Allan J. McCorkle,
Chairman of the Board of Directors of the Registrant in connection with his
retirement on that date as the Company's President and CEO. Pursuant to the
Consulting Agreement, A. McCorkle agreed to provide consulting services to the
Registrant as requested by the Registrant and not to compete with the business
of the Registrant nor solicit its agents, employees and customers for a period
of seven years or until his earlier death (the "Consulting Term"). During the
Consulting Term, the Registrant agreed to pay A. McCorkle a consulting fee of
$250,000 per year. If the Consulting Term ends for reasons other than A.
McCorkle's death, the Registrant will pay McCorkle $250,000 per year for an
additional seven year period or until his earlier death (the "Restrictive Term")
as compensation for his compliance with certain restrictive covenants during
this period. After the Restrictive Term, the Registrant agreed to pay Rosemary
McCorkle, A. McCorkle's wife, if she is then alive a benefit of $125,000 per
year until her death. During the Consulting Term, the Registrant also agreed to
pay A. McCorkle a monthly allowance of $1,500 for secretarial and office space,
or alternatively, provide A. McCorkle with part-time secretarial assistance and
office space. As a director, A. McCorkle will participate in the life insurance
and medical insurance programs provided to the Company's directors, but will not
be eligible to receive director's fees, meeting fees or other compensation paid
or awarded to directors.
The Registrant from time to time employs the law firm of Jones &
McCorkle, P.A., of which Holly J. McCorkle and her husband are members, to
provide legal services to the Registrant. During the fiscal year ended December
31, 1998, the Registrant paid Jones & McCorkle $31,744.46 for such services.
<PAGE>
Exhibits:
3. (a) The Articles of Incorporation of the Registrant originally
filed on Form S-1 Registration Statement No. 2-42438, effective
March 3, 1972 are hereby incorporated herein by reference.
The Amendment to the Articles of Incorporation filed as Exhibit
C to the Registrant's Form 10-Q for the quarter ended September
30, 1980, is also hereby incorporated herein by reference.
The Amendment to the Articles of Incorporation filed as Exhibit
4 to the Registrant's Form 10-Q for the quarter ended September
30, 1987, is also hereby incorporated by reference.
The Amendment to the Articles of Incorporation filed as Exhibit
4 to the Registrant's Form 10-Q for the quarter ended September
30, 1993 is also hereby incorporated by reference.
(b) Bylaws, as amended May 24, 1999.
10. (a) Shareholder Agreement dated as of May 24, 1999 between the
Registrant and Allan J. McCorkle and R. Lee Smith.
(b) Consulting and Non-competition Agreement dated as of
May 24, 1999 between the Registrant and Allan J. McCorkle.
(c) Director Indemnification Agreement.
(d) Agreement Regarding Severance and Change of Control
11. Earnings Per Share Computations as filed on March 30, 1999 with the
Registrant's Form 10-K for the year ended December 31, 1998 and
incorporated herein by reference.
21. Subsidiaries of Registrant as filed on March 30, 1999 with the
Registrant's Form 10-K for the year ended December 31, 1998
and incorporated herein by reference.
23. Consent of Cherry Bekaert & Holland, L.L.P.
27. Financial Data Schedule as filed on March 30, 1999 with the
Registrant's Form 10-K for the year ended December 31, 1998 and
incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, The Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MOBILE AMERICA CORPORATION
Registrant
July 9, 1999 By: /s/ Duane A. Sanders
---------------------------------
Duane A. Sanders
Vice President
Exhibit 3(b)
AMENDED AND RESTATED
BYLAWS
OF
MOBILE AMERICA CORPORATION
(as last amended May 24, 1999)
ARTICLE I
Offices
The principal office of the corporation shall be in the City of
Jacksonville, Florida.
The corporation may also have offices at such other places as the
Board of Directors may from time to time appoint, or as the business of the
corporation may require.
ARTICLE II
Stockholders Meetings
Section 1. All meetings of the stockholders shall be held at such
place as shall be designated by the Board of Directors or the President, and the
place at which the meeting shall be held shall be stated in the notice and call
of the meeting.
Section 2. The annual meeting of the stockholders of the corporation
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting shall
be held at such time within four months after the close of the corporation's
fiscal year as shall be designated by the Board of Directors or the President.
If the annual meeting of the stockholders is not held as prescribed, the
election of directors may be held at any meeting thereafter called pursuant to
the bylaws.
Section 3. The voting at all meetings of stockholders may be viva
voce, but any qualified voter may demand a stock vote, whereupon such stock vote
shall be taken by ballot, each of which shall state the name of the stockholder
voting and the number of shares voted by them, and if such ballot be cast by a
proxy, it shall also state the name of such proxy.
At any meeting of the stockholders, every stockholder having the right
to vote shall be entitled to vote in person, or by proxy appointed by an
instrument in writing subscribed by such stockholder and bearing a date not
more than three months prior to the meeting. Each holder of common stock shall
have one vote for each share of such stock registered in his name on the books
of the corporation as of the record date fixed by the Board of Directors prior
to the meeting for the determination of stockholders entitled to vote.
Section 4. The order of business at the annual meeting of stock-
holders shall be as follows:
(A) Calling meeting to order.
(B) Proof of notice of meeting.
(C) Reading of minutes of last previous meeting.
(D) Reports of officers.
(E) Reports of committees.
(F) Election of Directors.
(G) Miscellaneous business.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
President, or by a majority of the Board of Directors, or by the Secretary, upon
the request of stockholders owning twenty-five percent (25%) of the outstanding
stock of the corporation entitled to vote at such meeting.
Section 6. Notice of the time and place of the annual meeting of
stockholders shall be given by mailing written or printed notice of the same at
least ten (10) days and not more than forty (40) days prior to the meeting, and
notice of the time and place and purpose of special meetings shall be given by
written or printed notice of the same at least ten (10) days, and not more than
forty (40) days prior to the meeting, with postage prepaid, to each stockholder
of record of the corporation entitled to vote at such meeting, and addressed to
the stockholder's last known post office address, or to the address appearing on
the corporate books of the corporation; but notice of meetings may be waived.
The Board of Directors may fix in advance a date, not exceeding forty (40) days
preceding the date of any meeting of stockholders as the record date for the
determination of the stockholders entitled to notice of and to vote at any such
meeting.
Section 7. A quorum at any annual or special meeting of stockholders
shall consist of stockholders representing, either in person or by proxy, a
majority of the outstanding voting stock of the corporation entitled to vote at
such meeting, except as otherwise specially provided by law.
Section 8. The Corporation hereby elects out of Florida Statute
Section 607.0902 (the "Control Share Act") in respect of any transaction
concluded prior to the earlier of (a) May 31, 2002 or (b) the earlier termina-
tion of that certain Shareholder Agreement dated May 24, 1999, among Allan J.
McCorkle ("McCorkle"), R. Lee Smith and this Corporation provided, if a proposed
transaction would require McCorkle to obligate himself to conclude the trans-
action, then McCorkle shall have provided this Corporation with written notice
of his intention to so obligate himself to the transaction (which notice shall
include a description of the proposed transaction and copies of all agreements
pertaining to the proposed transaction) twenty (20) days prior to his so
obligating himself.
ARTICLE III
Board of Directors
Section 1. The management of all of the affairs, property and business
of the corporation shall be vested in a Board of Directors. In addition to the
powers and authorities by these Bylaws, and the Certificate of Incorporation
expressly conferred upon it, the Board of Directors may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the Certificate of Incorporation or by these Bylaws directed or required
to be exercised or done by the stockholders.
Section 2. The number of directors shall be not less than five (5),
but subject to that limitation the number of directors shall be fixed by a
majority vote of the stockholders at each annual meeting or adjournment thereof;
provided, however, that the Board of Directors shall have the right at any time
during the ensuing year to increase the number of directors fixed by the stock-
holders by not more than five (5) additional members. A director may be removed
at any time, with or without cause, by the affirmative vote of a majority of the
shares entitled to vote at a special meeting of the stockholders called for that
purpose.
Section 3. All vacancies in the Board of Directors, whether caused by
resignations, death, or otherwise, may be filled by the remaining directors or a
majority of the remaining directors attending a stated or special meeting called
for that purpose, even though less than a quorum be present. A director thus
elected to fill any vacancy shall hold office until the next annual meeting of
the stockholders and until his successor is elected and qualified.
Section 4. The annual meeting of the Board of Directors shall be held
at the same place as the annual stockholders' meeting, immediately following the
annual meeting of the stockholders. Other regular meetings of the Board shall be
held at such time and at such place within or without the State of Florida as
the Board of Directors or the President may from time to time designate.
Section 5. Special meetings of the Board of Directors may be called at
any time by the President, or in his absence, by the Vice President, or by a
majority of the Directors; to be held at the principal office of the corpora-
tion, or at such other place or places, within or without the State of Florida,
as the notice calling the meeting may designate.
Section 6. Notice of all special meetings of the Board of Directors
shall be given to each director by three (3) days' service of the same by
telegram, by letter, or personally, and notice of meetings may be waived.
Section 7. A quorum at all meetings of the Board of Directors shall
consist of a majority of the directors, but less than a quorum may adjourn any
meeting, which may be held on subsequent dates without further notice, provided
a quorum be present at such deferred meeting.
Section 8. Standing or temporary committees may be appointed from its
own number by the Board of Directors from time to time, and the Board of
Directors may from time to time invest such committees with such powers as it
may see fit, subject to such conditions as may be prescribed by resolution
passed by a majority of the Directors, and it shall have all the powers provided
by statute except as specially limited by the Board. All committees so appointed
shall keep regular minutes of the transactions of their meetings, and shall
cause them to be recorded in books kept for that purpose in the office of the
corporation, and shall report same to the Board of Directors at its next
meeting.
ARTICLE IV
Officers
Section 1. The officers of the Company shall be a President, one or
more Vice Presidents, a Secretary, a Treasurer and such other officers as may be
designated by the Board of Directors. Officers shall be elected by the directors
at their first meeting after the annual meeting of stockholders, and they shall
hold office until their successors are elected and qualify. No officer need be a
stockholder or a member of the Board of Directors. The same person may hold two
or more offices except that the President may not also be the Secretary or the
Assistant Secretary.
Section 2. The President shall preside at all meetings of the stock-
holders and the Board of Directors, shall have general supervision of the
affairs of the corporation, shall sign or countersign all certificates,
contracts, and other instruments of the corporation as authorized by the Board
of Directors, shall make reports to the Board of Directors and stockholders and
shall perform all such other duties as are incident to his office or are
properly required of him by the Board of Directors.
Section 3. The Vice President in the absence or disability of the
President shall perform the duties of the President and shall also perform such
other duties as may be delegated to him from time to time by the Board of
Directors or by the President.
Section 4. The Secretary shall issue notice for all meetings, shall
keep minutes of all meetings, shall have charge of the seal and the corporate
books, and shall make such reports and perform such other duties as are incident
to his office, or are properly required of him by the Board of Directors.
Section 5. The Treasurer shall have the custody of all moneys and
securities of the corporation and shall keep regular books of account. He shall
disburse the funds of the corporation in payment of the just demands against the
corporation, or as may be ordered by the President or the Board of Directors,
taking proper vouchers for such disbursements, and shall render to the President
and the Board of Directors, from time to time as may be required of him, an
account of all of his transactions as Treasurer and of the financial condition
of the corporation. He shall perform all duties incident to his office or which
are properly required of him by the Board of Directors. He may also hold the
office of Secretary.
Section 6. In the case of absence or inability to act of any officer
of the corporation and of any person herein authorized to act in his place, the
Board of Directors may from time to time delegate the powers or duties of such
officer to any other officer, or any director or other person whom it may elect.
Section 7. Vacancies in any office arising from any cause may be
filled by the Directors at any regular or special meeting.
Section 8. The Board of Directors may appoint such other officers and
agents as it shall deem necessary or expedient, who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
Section 9. The salaries of all officers of the corporation shall be
fixed by the Board of Directors. The compensation of other employees and agents
shall be fixed by the officers of the company. No member of the Board of
Directors shall be disqualified from voting on salaries to be paid to officers
by reason of the fact that he is an officer as well as a director except that
his vote shall not be counted in fixing his own salary.
Section 10. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
Board of Directors may be removed at any time with or without cause, by the
affirmative vote of a majority of the whole Board of Directors.
Section 11. The Board of Directors may, by resolution, require any and
all of the officers to give bonds to the corporation, with sufficient surety or
sureties, for the faithful performance of the duties of their respective
offices.
ARTICLE V
Stock
Section 1. Certificates of stock of each of the classes provided for
in the Certificate of Incorporation shall be issued in numerical order, and each
stockholder shall be entitled to a certificate signed by the President or a Vice
President and the Treasurer, or an Assistant Treasurer or the Secretary, or an
Assistant Secretary, certifying to the number and class of shares owned by him.
Where, however, such certificate is signed by a transfer clerk acting in behalf
of the corporation, the signature of any of the above-named officers may be
facsimile.
In case any officer who has signed, or whose facsimile signature has
been used on a certificate, has ceased to be an officer before the certificate
has been delivered, such certificates may, nevertheless, be adopted and issued
and delivered by the corporation as though the officer who signed such certifi-
cate or certificates, or whose facsimile signature or signatures shall have been
used thereon, had not ceased to be such officer of the corporation.
Section 2. Transfer of stock shall be made upon the transfer books of
the corporation, kept at the office of the corporation or respective transfer
agents designated to transfer the several classes of stock, and before a new
certificate is issued, the old certificate shall be surrendered for
cancellation.
Section 3. Registered stockholders only shall be entitled to be
treated by the corporation as the holders in fact of the stock standing in their
respective names, and the corporation shall not be bound to recognize any
equitable or other claim to or interest in any share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of Florida.
Section 4. In case of loss or destruction of any certificates of stock
another may be issued in its place upon proof of such loss or destruction, and
upon the giving of a satisfactory bond of indemnity to the corporation and/or to
the transfer agent and registrar of such stock in such sum as the officers of
the corporation may provide.
Section 5. Record Date. The Board of Directors shall fix a date, not
more than forty (40) days before the date (a) of any meeting of stockholders,
(b) of the allotment of any rights or the payment of any dividends declared,
(c) when any exchange or conversion of capital stock shall go into effect, or
(d) when any consent shall be obtained, as a record date for the determination
of the stockholders entitled to notice of and to vote at any such meeting, to
any allotment of rights or to receive any dividends declared, or to exercise
rights in respect of any change, conversion, or exchange of capital stock, or to
give any consent without actually closing the transfer books, and only stock-
holders of record on the date so fixed shall be entitled to notice of and to
vote at the meeting, receive the allotment of rights or payment of dividends, or
exercise any other rights as the case may be, notwithstanding any transfer of
stock on the books of the corporation after the record date so fixed.
ARTICLE VI
Dividends and Finances
Section 1. Subject to the limitations set forth in the Certificate of
Incorporation, dividends may be declared by the Board of Directors and paid from
the net earnings or from the surplus of the assets over the liabilities
including capital of the corporation.
Section 2. Before making any distribution of profits there may be set
aside out of the net profits of the corporation, such sum or sums as the
directors may from time to time, in their absolute discretion, deem expedient,
as a reserve fund to meet contingencies, or for equalizing dividends, or for
maintaining any property of the corporation, or for any other purpose, and any
profits of any year not distributed as dividends shall be deemed to have been
thus set apart until otherwise disposed of by the Board of Directors.
Section 3. The moneys of the corporation shall be deposited in the
name of the corporation in such bank or banks or trust company or trust
companies as the Board of Directors shall designate, and shall be drawn out
only by check signed by persons designated by resolution by the Board of
Directors.
Section 4. The fiscal year of the corporation shall begin on the first
day of September in each year, unless otherwise provided by the Board of
Directors.
ARTICLE VII
Books and Records
The books, accounts and records of the corporation except as may be
otherwise required by the laws of the State of Florida may be kept outside of
the State of Florida at such place or places as the Board of Directors may from
time to time appoint. The Board of Directors shall determine whether and to what
extent the accounts and books of the corporation, or any of them other than the
stock ledger, shall be open to the inspection of the stockholders, and no stock-
holder shall have any right to inspect any account or book or document of the
corporation, except as conferred by law or by resolution of the stockholders or
directors, provided that the provisions of this paragraph shall not be construed
as changing in any way the duty of the Treasurer to make proper reports to the
stockholders at the annual meeting.
ARTICLE VIII
Notices
Section 1. Whenever the provisions of a statute or these Bylaws
require notice to be given to any director, officer, or stockholder, this shall
not be construed to mean personal notice; such notice may be given in writing by
depositing the same in a post office or letter box, in a postpaid, sealed
wrapper, addressed to such director, officer or stockholder, at his or her
address as the same appears on the books of the corporation, and the time when
the same shall be mailed shall be deemed to be the time of the giving of such
notice.
Section 2. A waiver of any notice in writing, signed by a stockholder,
director or officer, whether before or after the time stated in said waiver for
holding a meeting, shall be deemed equivalent to a notice required to be given
to any director, officer or stockholder.
ARTICLE IX
Seal
The corporate seal of the corporation shall consist of two concentric
circles, between which shall be the name of the corporation, and in the center
shall be inscribed the words and figures "Corporate Seal," "Florida" and "1968."
ARTICLE X
Amendment of Bylaws
Alteration, amendment or repeal of the Bylaws may be made by a
majority of the stockholders entitled to vote at any meeting, or by the Board of
Directors by a majority vote of the directors at any regular or special meeting,
provided notice of such alteration, amendment or repeal has been given to each
director in writing at least three (3) days prior to said meeting.
SHAREHOLDER AGREEMENT
THIS AGREEMENT is dated as of the 24th day of May, 1999, by and among
Mobile America Corporation, a Florida corporation (the "Company"), Allan J.
McCorkle ("McCorkle") and R. Lee Smith ("Smith") and their respective affiliates
signing below (collectively referred to herein as the "Shareholders").
Preliminary Statement
The Shareholders collectively own, or have voting power over,
approximately 48% of the Company's outstanding stock. The Company and the
Shareholders believe it to be in their respective best interest and in the best
interest of the Company to provide for continuity and harmony in the management
of the Company by providing for and specifically defining the composition of the
Board of Directors of the Company.
1. Ownership of Shares.
a. Representations and Warranties of McCorkle. McCorkle hereby
represents and warrants that McCorkle directly or indirectly owns of record or
has the right to exercise voting power with respect to the shares of Company
stock listed on Schedule 1(a) and that McCorkle does not own of record or have
the right to exercise or share voting power with respect to any shares of
Company common stock not shown thereon other than 50,000 shares (the "Excluded
Shares") that McCorkle contributed to the Kissaway County Charitable Trust, of
which McCorkle is one of four trustees and as to which McCorkle may be
prohibited by applicable trust laws from joining in this Agreement.
b. Representations and Warranties of Smith. Smith hereby represents
and warrants that Smith directly or indirectly owns of record or has the right
to exercise voting power with respect to the shares of Company stock listed on
Schedule 1(b) and that Smith does not own of record or have the right to
exercise or share voting power with respect to any shares of Company common
stock not shown thereon.
2. Voting of Shares. At the 1999 Annual Meeting of the Company's
Shareholders (the "1999 Annual Meeting") and thereafter at each annual or
special meeting of the Company's shareholders at which directors are to be
elected, until, but not including, the Annual Meeting of the Company's Share-
holders to be held in June, 2002 (the "2002 Annual Meeting"), each Shareholder
agrees to vote all of the shares of common stock of the Company then
beneficially owned by the Shareholder and all such shares as to which the
Shareholder is then entitled to exercise voting power as follows (and to use
best efforts to cause to be voted all shares other than Excluded Shares as to
which the Shareholder shares voting power as follows):
a. Agreed Director Nominees. In favor of the nomination and
election of the following individuals (the "Agreed Director Nominees") as
directors to serve a term beginning at the 1999 Annual Meeting and continuing
until their successors are elected and qualified at the 2002 Annual Meeting:
Allan J. McCorkle
Thomas J. McCorkle
Holly J. McCorkle
(the above 3 nominees and any additional nominee named by McCorkle pursuant to
Section 2(c) below, together with any replacements named pursuant to this
Agreement, are referred to herein collectively as the "Family Directors");
J. Michael Garrity
Thomas E. Perry
R. Lee Smith
Robert Thomas
(the above 4 nominees, together with any replacements named pursuant to this
Agreement, are referred to herein collectively as the "Non-Family Directors");
and
Arthur L. Cahoon ("Cahoon");
b. Vacancies. In the event of a vacancy on the Board of Directors
with respect to the Non-Family Directors, in favor of an individual nominated in
writing by 75% of a group comprised of the remaining Non-Family Directors and
Cahoon; in the event of a vacancy on the Board of Directors with respect to the
Family Directors, in favor of an individual nominated in writing by McCorkle;
c. Expansion of Board. In the event that a new President and CEO is
hired and becomes a director, in favor of an additional nominee nominated in
writing by McCorkle, who shall also be a Family Director; and
d. Anti-Takeover Measures. Against any anti-takeover measures such
as a staggered board of directors, a stock dividend or distribution plan
intended to dilute the interest of a purchaser of the Company's stock, contracts
providing for golden parachute payments to the Non-Family Directors, limitations
on shareholder rights to act by written consent or to otherwise propose or take
corporate action (other than 30 days notice of any nominee for election as a
director), or amend or repeal Article II, Section 8 of the Bylaws, which
measures the Company hereby agrees not to adopt without the consent of the
Shareholders.
3. Chairman of the Board; Board Committees. It is contemplated that at
the 1999 annual meeting of directors, McCorkle will be elected as Chairman
Emeritus of the Board of Directors and that Cahoon will be elected Chairman of
the Board. It is also contemplated that McCorkle, Smith and Cahoon will be
appointed as members for three years of a new senior officer selection committee
of the Board of Directors, the purpose of which will be to interview prospective
senior officers of the Company and its subsidiaries and make hiring recommenda-
tions with respect to such candidates to the Board of Directors.
4. No Proxy Contests. During the term of this Agreement, except in
respect of the 2002 Annual Meeting, each Shareholder agrees (i) not to solicit,
initiate, encourage or participate in any solicitation of proxies or become a
participant in any election contest or take action by written consent as a
shareholder the purpose or effect of which would be to cause the election of any
person as a director of the Company, the election of whom would be inconsistent
with the provisions of this Agreement, and (ii) not to assist, advise, encourage
or act in concert with any person with respect to any such conduct.
5. Term. This Agreement shall begin on the date hereof and shall
continue until the first to occur of the following events: (i) the 2002 Annual
Meeting, which the parties agree will be held during June, 2002; (ii) the death
of McCorkle; (iii) default by the Company under its Consulting and Non-Competi-
tion Agreement (the "Consulting Agreement") or Director Indemnification Agree-
ment with McCorkle, each dated the date hereof, after receipt of written notice
thereof and a failure to cure within the later of 10 days of receipt of such
notice by the Company or 10 days after resolution of any bona fide dispute with
respect thereto; (iv) the occurrence of a Material Adverse Change; or (v) the
Company's Board fails to nominate the Family Directors and Cahoon, or his
successor selected pursuant to his Section, for election at an Annual Meeting
prior to the 2002 Annual Meeting.
For purposes of the foregoing, Material Adverse Change shall mean (i) the
Company's shareholders' equity as reflected in the Company's quarterly or annual
financial statements filed with the Securities and Exchange Commission in its
Form 10-Q or 10-K is less than such shareholders' equity at March 31, 1999 minus
(x) $6,600,000 and (y) any reserves required to be established in respect of
obligations arising under the Consulting Agreement; (ii) the Company is in
default under an Employment Agreement or Consulting and Non-Competition
Agreement with Thomas J. McCorkle, both of even date herewith, after receipt of
written notice thereof and a failure to cure within the later of 10 days of
receipt of such notice by the Company or 10 days after resolution of any bona
fide dispute with respect thereto; (iii) any local, state or federal regulatory
authority takes control of the Company or Fortune Insurance Company under
administrative supervision or receivership; (iv) any outstanding indebtedness of
the Company for money borrowed is accelerated or matures and is not paid,
extended or reinstated within 60 days; (v) the Company files a petition for
relief under federal bankruptcy laws or an involuntary petition is filed against
the Company and is not dismissed within 90 days; or (vi) Cahoon resigns, is
removed, dies or otherwise ceases to serve as Chairman of the Board or as a
director of the Company and the Board fails to appoint a successor reasonably
satisfactory to McCorkle.
6. Transferees. This Agreement shall be binding upon the transferees,
direct or indirect, of any shares held by the Shareholders unless such a
transferee is an unrelated third party which purchases or otherwise acquires
such shares in a bona fide arms length transaction (an "Unrestricted
Transferee") from the Shareholder or a subsequent transferee. For purposes of
this Agreement, an "unrelated third party" means any person or entity, as the
case may be, who is neither a "member of the family" of the Shareholder nor an
"affiliate" of the Shareholder (as that term is defined in 1933 Act Rule 405 of
the Securities and Exchange Commission) nor any entity in which the Shareholder
or any member of his family owns in excess of a 5% beneficial interest or over
which the Shareholder or any member of his family may exercise control. A
"member of the family" includes any person related, directly or indirectly, by
blood, marriage, adoption, or any combination thereof, to the Shareholder in
question. A transferor transferring shares to a person who does not qualify as
an Unrestricted Transferee shall, as a condition to such transfer, require the
transferee to acknowledge in writing that such transferee agrees to all the
terms and conditions of this Agreement.
7. Notice to Transfer Agent. The Company and the Shareholders shall
jointly notify the Company's transfer agent of the existence of this Agreement.
8. Specific Performance. The Company and the Shareholders acknowledge
that, in view of the uniqueness of the arrangements contemplated by this Agree-
ment, the parties hereto would not have an adequate remedy at law for money
damages in the event that this Agreement were not performed in accordance with
its terms, and therefore the parties agree that any party hereto, including the
Company, shall be entitled to specific performance of the terms hereof in
addition to any other remedy to which the parties may be entitled at law or in
equity.
9. Further Assurances. Each Shareholder agrees, upon the request of
the Company, to execute such further documents, including proxies, as the
Company may reasonably request from time to time and to take such other actions
as may be reasonably necessary or desirable to carry out the intent of this
Agreement. The parties acknowledge that any proxies so executed and delivered
constitute proxies coupled with interest and may not be revoked during the term
of this Agreement.
10. Notices. Any notice or other communication required or permitted to
be delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by nationally recognized overnight courier service or by certified
or registered mail, first-class postage prepaid and return receipt requested,
(iii) deemed to have been received on the date of delivery, and (iv) addressed
as follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):
i. Notices. if to Company, to:
Mobile America Corporation
10475 Fortune Parkway, Suite 110
Jacksonville, Florida 32256
Attention: President
Telephone: (904) 363-6339
Fax: (904) 363-3856
with a copy to:
Foley & Lardner
200 North Laura Street
Jacksonville, FL 32202
Attention: Linda Y. Kelso, Esq.
Telephone: (904) 359-2000
Fax: (904) 359-8700
ii. if to McCorkle, to:
Allan J. McCorkle
11657 Village Lane
Jacksonville, FL 32223
Telephone: (904) 880-1601
Fax: (904) 292-0703
with copies to:
Smith Hulsey & Busey Holly J. McCorkle, Esq.
P.O. Box 53315 13914 Mandarin Oaks Lane
225 Water Street, #1800 Jacksonville, FL 32223
Jacksonville, FL 32202 Telephone: (904) 880-7399
Attention: John R. Smith, Jr., Esq. Facsimile: (904) 880-5118
Telephone: (904) 359-7700
Facsimile: (904) 359-7708
iii. if to Smith, to:
R. Lee Smith
Suite 902
1200 Riverplace Boulevard
Jacksonville, FL 32202
Telephone: (904) 396-2957
Facsimile: (904) 393-9003
with a copy to:
Holland & Knight, LLP
50 North Laura Street, Suite 3900
Jacksonville, FL 32202
Attention: James L. Main, Esq.
Telephone: (904) 354-4141
Facsimile: (904) 358-2199
11. Invalid Provision. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
12. Modification. No change or modification of this Agreement shall be
valid unless the same be in writing and signed by the party against whom
enforcement is sought.
13. Governing Laws; Binding Effect. This Agreement is governed by the
laws of the State of Florida and shall be construed in accordance therewith.
This Agreement shall be binding upon the heirs, personal representatives,
successors and assigns of the parties hereto, including any person other than an
Unrestricted Transferee receiving any Shares from a Shareholder.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the date set forth above.
MOBILE AMERICA CORPORATION
By: /s/ R. Lee Smith
---------------------------------
Name: R. Lee Smith
Title: Director
/s/ Allen J. McCorkle
------------------------------------
Allan J. McCorkle
/s/ R. Lee Smith
------------------------------------
R. Lee Smith
<PAGE>
SCHEDULE 1(a)
McCorkle Shares
Beneficial Owner No. of Shares
Allan J. McCorkle 3,095,939
<PAGE>
SCHEDULE 1(b)
Smith Shares
Beneficial Owner No. of Shares
R. Lee Smith 347,749
CONSULTING AND NON-COMPETITION AGREEMENT
CONSULTING AND NON-COMPETITION AGREEMENT, dated this 24th day of May,
1999 (this "Agreement"), between MOBILE AMERICA CORPORATION, a Florida
corporation ("Company") and ALLAN J. McCORKLE ("McCorkle").
W I T N E S S E T H :
WHEREAS, the Company is engaged, through its wholly owned subsidiaries,
in the underwriting and marketing of minimum requirement automobile insurance
and other insurance products and related businesses;
WHEREAS, effective as of the date of this Agreement (the "Resignation
Date") McCorkle has retired from his officer and employee positions with the
Company and its subsidiaries and the Company has accepted such resignation;
WHEREAS, the Company desires to retain McCorkle as a consultant on the
terms and conditions set forth in this Agreement in order (i) to provide for a
smooth transition in management and (ii) to continue to give the Company the
benefit of the invaluable contacts, experience and expertise acquired by
McCorkle over his many years of service with the Company; and
WHEREAS, the Company desires to obtain, and McCorkle desires to
provide, assurances that McCorkle will (i) refrain from competing with the
Company for a specified period, (ii) not solicit agents, employees or customers
of the Company and (iii) not disclose confidential information concerning the
Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein and for other good and valuable consideration,
the Company and McCorkle hereby agree as follows:
1. Retention as Consultant. McCorkle shall be retained by the Company
as an independent contractor and consultant, and not as an employee, during the
period (the "Consulting Period") beginning on the Resignation Date and ending on
the first to occur of (i) the seventh anniversary of the Resignation Date (the
"Termination Date"); or (ii) the last day of the month in which McCorkle's death
occurs (the "Date of Death").
2. Consulting Services. During the Consulting Period, McCorkle shall
personally provide the Company, at the request of the President or interim
President or the Board, consulting services consistent with his present skills,
training, job activities and stature with the Company. The services required
hereunder shall not require McCorkle to maintain regular hours at Company
offices, shall be rendered at places and times reasonably acceptable to
McCorkle, shall not require more than 500 hours per year and shall not conflict
with other entrepreneurial or business activities of interest to McCorkle which
are not in violation of this Agreement. McCorkle will be asked to provide
consulting advice to the Company on matters as to which his knowledge of and
experience with the Company and its business make him uniquely qualified to
render such advice, including reinsurance matters and such matters as assisting
with the transition of duties and providing background information to the
Company's new President and, introducing his successor to his various industry
contacts and financial analysts. McCorkle shall perform such services as an
independent contractor and consultant and not as an employee and shall not have
authority to bind the Company for any purpose.
3. Compensation.
(a) During the Consulting Period, in exchange for the consulting
services provided by McCorkle hereunder, and subject to paragraph 3(e) hereof
provided that McCorkle is not in breach of the covenants set forth in Sections
5, 6, 7, 8 and 9 of this Agreement, the Company will pay McCorkle a consulting
fee of $250,000 per year, payable in equal monthly installments in arrears .
(b) If the Consulting Period ends for reasons other than McCorkle's
death, after the end of the Consulting Period and during the remainder of the
Restrictive Period (as hereinafter defined), the Company will pay McCorkle
$250,000 per year, payable in arrears in equal monthly installments, in exchange
for McCorkle's compliance with the covenants described in Sections 5, 6, 7, 8
and 9 of this Agreement.
(c) After the end of the Restrictive Period, if McCorkle's wife,
Rosemary McCorkle, is then alive, the Company will pay to Rosemary McCorkle a
benefit of $125,000 per year, payable in arrears in equal monthly installments,
continuing until the last day of the month in which her death occurs.
(d) During the Consulting Period, McCorkle shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred by
him in the performance of his consulting services hereunder, consistent with the
Company's policies for the reimbursement of business expenses. For a period of
three years beginning on the Resignation Date, at McCorkle's election, the
Company shall either (i) provide McCorkle with office space and part-time
secretarial assistance or (ii) pay McCorkle $1,500 per month as an allowance for
such space and assistance.
(e) No payments shall be due and payable under this Section 3 in
the event that and for so long as McCorkle is in breach of Section 5, 6, 7, 8 or
9 of this Agreement or the Shareholder Agreement of even date herewith between
the Company, McCorkle and R. Lee Smith, after receipt of a written notice
thereof and a failure to cure within the later of 10 days of such notice or
resolution of any bona fide dispute with respect thereto.
4. Benefits.
(a) Director Benefits. During McCorkle's tenure as a director, the
Company will provide McCorkle with the life insurance and medical insurance and
other fringe benefits as may be provided from time to time to the Company's
outside directors for so long as the Company provides such benefits to its
outside directors, but McCorkle shall not be entitled to receive directors'
fees, Board or committee meeting fees or other compensation paid to or awarded
to outside directors.
(b) Employee Benefits. Effective on the Resignation Date, McCorkle
shall no longer be eligible to participate in the Company's money purchase
pension plan or any other benefit plans and programs provided by the Company to
its employees. The Company acknowledges that McCorkle has satisfied the minimum
hours of services requirements prior to the Resignation Date for participation
in the money purchase plan in 1999 and will not contest allocations to his
account thereunder.
(c) Health and Life Insurance at McCorkle's Cost. If McCorkle
ceases to be a director of the Company, or if the Company ceases to provide its
directors with group health and life insurance:
(i) The Company will include McCorkle and Rosemary McCorkle in
its group health insurance plan for so long as either shall remain alive
provided that (A) they are not able to obtain supplemental Medicare
coverage comparable to the Company's group coverage, including cost and
terms of benefits, (B) Medicare is the primary coverage and the group plan
is secondary, and (C) McCorkle (or Rosemary McCorkle upon McCorkle's
death) reimburses the Company for the cost of so including McCorkle and
Rosemary McCorkle in the Company's group plan; and
(ii) The Company will include McCorkle in its group life
insurance plan so long as McCorkle remains alive provided that (A) such
Company plan, as then in effect, permits McCorkle as a retired employee to
be included in the plan, and (B) McCorkle reimburses the Company for the
cost of including him in such plan.
5. Covenant Not to Compete.
(a) Restriction. In consideration for the payments and benefits to
be provided to McCorkle under Section 3(b), and to the fullest extent permitted
under applicable law, McCorkle shall not, directly or indirectly engage in,
participate in, represent in any way or be connected with, as an officer,
director, partner, owner, employee, agent, independent contractor, consultant,
proprietor or stockholder (except for the ownership of a less than 5% stock
interest in a publicly traded corporation) or otherwise, any business or
activity, in any state in which the Company is then doing business, which
competes with the Business of the Company (as hereinafter defined).
(b) Restrictive Period. The provisions of Section 5 shall be in
effect for a period beginning on the Resignation Date and continuing until the
earlier of (i) the seventh anniversary of the Termination Date or (ii) the Date
of Death (the "Restrictive Period").
(c) Business of the Company. For purposes of this Agreement, the
"Business of the Company" shall mean any business line or activity that is
engaged in by the Company or any of its subsidiaries, or any assignee or
successor of the Company during the Restrictive Period.
6. Non-Solicitation of Agents, Employees and Representatives. In
consideration for the payments and benefits to be provided to McCorkle under
Section 3(b), during the Restrictive Period, McCorkle shall not, directly or
indirectly, for his own account or the account of any other person or entity
with which he shall become associated in any capacity or in which he shall have
any ownership interest, (a) without the prior written consent of the Company,
solicit for employment or employ or engage as an agent or representative any
person who, at any time during the preceding 12 months, is or was employed by or
otherwise engaged, as an employee, agent or representative of the Company to
perform services for the Company or any of its affiliates, regardless of whether
such employment or engagement is direct or through an entity with which such
person is employed or associated, or (b) otherwise intentionally interfere with
the relationship of the Company or any of its affiliates with any person or
entity who or which is at the time employed by or otherwise engaged to perform
services for the Company or any such affiliate, or (c) induce any employee,
agent or representative of the Company or any of its affiliates to engage in any
activity which McCorkle is prohibited from engaging in under Sections 5,6, 7 and
8 hereof or to terminate his or her employment or engagement with the Company or
such affiliate.
7. Nonsolicitation of Customers. In consideration for the payments and
benefits to be provided to McCorkle under Section 3(b), during the Restrictive
Period, McCorkle shall not undertake any business with or solicit the business
of any person, firm or company who shall have been a customer of the Company and
with whom any executive of Company or his subordinates has dealt with during the
then immediately preceding twelve (12) months which might affect the Company's
business relationship with such customer (if the Company reasonably determines
that such activities will not adversely affect its business relationship with
its customer and such activities do not otherwise violate the covenants not to
compete contained herein, the Company shall provide McCorkle its written consent
to such activities). During the Restrictive Period, McCorkle shall not cause or
attempt to cause any customer to cease being a customer of the Company, or to
change its relationship with the Company in a manner which would adversely
affect the Company's business. For purposes hereof, "customer" includes any
contractor, supplier, licensee or other person with a business relationship with
the Company.
8. Unauthorized Disclosure. During and after the Restrictive Period,
without the written consent of the Company, (i) McCorkle shall not disclose to
any person (other than an employee or director of the Company or its affiliates,
or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by McCorkle of his duties under this Agreement
or as a director of the Company) or use to compete with the Company or any of
its affiliates any confidential or proprietary information, knowledge or data
that is not theretofore publicly known and in the public domain obtained by him
while in the employ of the Company or while acting as a consultant hereunder
with respect to the Company or any of its affiliates or with respect to any
products, improvements, customers, methods of distribution, sales, prices,
profits, costs, contracts (including, without limitation the terms and
provisions of this Agreement), suppliers, business prospects, business methods,
techniques, research, trade secrets or know-how of the Company or any of its
affiliates (collectively, "Proprietary Information"), and (ii) McCorkle shall
use reasonable best efforts to keep confidential any such Proprietary Informa-
tion and to refrain from making any such disclosure, in each case except as may
be required by law or as may be required in connection with any judicial or
administrative proceedings or inquiry.
9. Compliance with Shareholder Agreement. McCorkle hereby agrees to
comply with his obligations under the Shareholder Agreement of even date here-
with.
10. Injunctive Relief with Respect to Covenants. McCorkle acknowledges
and agrees that the covenants and obligations of McCorkle with respect to
non-competition, non-solicitation, confidentiality and non-disclosure with
respect to the Company and its affiliates relate to special, unique and
extraordinary matters and that, notwithstanding any other provision of this
Agreement to the contrary, a violation of any of the terms of such covenants and
obligations will cause the Company and its affiliates irreparable injury for
which adequate remedies are not available at law. Therefore, McCorkle expressly
agrees that the Company and its affiliates (which shall be express third-party
beneficiaries of such covenants and obligations) shall be entitled to an
injunction (whether temporary or permanent), restraining order or such other
equitable relief (including the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain McCorkle
from committing any violation of the covenants and obligations contained in
Sections 5, 6, 7, and 8 hereof. These injunctive remedies are cumulative and in
addition to any other rights and remedies the Company and its affiliates may
have at law or in equity.
11. Entire Agreement. Except as otherwise expressly provided herein,
this Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof, and all promises, representations, under-
standings, arrangements and prior agreements relating to such subject matter
(including those made to or with McCorkle by any other person or entity) are
merged herein and superseded hereby and thereby.
12. Legal Expenses. The Company shall reimburse McCorkle for the
reasonable attorneys' fees and expenses incurred by him in connection with the
negotiation and execution of this Agreement and the other agreements being
executed by McCorkle contemporaneously herewith.
13. Miscellaneous.
(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICT OF LAWS THEREUNDER. ANY AND ALL SUITS, LEGAL ACTIONS
OR PROCEEDINGS AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT SHALL BE
BROUGHT IN ANY STATE COURT OR UNITED STATES FEDERAL COURT SITTING IN DUVAL
COUNTY IN THE STATE OF FLORIDA, AS THE PARTY BRINGING SUCH SUIT MAY ELECT IN ITS
SOLE DISCRETION, AND EACH PARTY HEREBY SUBMITS TO AND ACCEPTS THE EXCLUSIVE
JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUIT, LEGAL ACTION OR
PROCEEDING. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER PROCESS AND AGREES THAT SERVICE THEREOF MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, LEGAL
ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT
ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(b) Taxes. McCorkle recognizes that the payments provided under
this Agreement including without limitation those provided pursuant to Section 3
may result in taxable income to him which the Company and its affiliates will
report to their appropriate taxing authorities. McCorkle agrees to pay all
necessary and appropriate income and self-employment taxes on such income.
(c) Attorney's Fees. If any party to this Agreement breaches any
provision of this Agreement, then the breaching party shall pay to the non-
breaching party all of the non-breaching party's costs and expenses incurred by
that party in enforcing this Agreement, including reasonable attorneys' fees and
expenses, whether or not suit be brought and whether incurred before or at
trial, on appeal or on remand.
(d) Amendments. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is approved
by the Company or a person authorized thereby and is agreed to in writing by
McCorkle, and such officer of the Company as may be specifically designated by
the Company. No waiver by any party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No waiver of any provision of this Agreement shall be implied
from any course of dealing between or among the parties hereto or from any
failure by any party hereto to assert its rights hereunder on any occasion or
series of occasions. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
(e) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby. Should any
restrictive covenant in Sections 5, 6, 7 or 8 of this Agreement be determined by
a court of law or equity to be unreasonable or unenforceable, McCorkle agrees
that to the extent it is valid and enforceable, McCorkle shall be bound by the
same, the intention of the parties being that the Company be given the broadest
protection allowed by law or equity with respect to such provision.
(f) Notices. Any notice or other communication required or
permitted to be delivered under this Agreement shall be (i) in writing,
(ii) delivered personally, by nationally recognized overnight courier service or
by certified or registered mail, first-class postage prepaid and return receipt
requested, (iii) deemed to have been received on the date of delivery, and
(iv) addressed as follows (or to such other address as the party entitled to
notice shall hereafter designate in accordance with the terms hereof):
(i) if to Company, to:
Mobile America Corporation
10475 Fortune Parkway, Suite 110
Jacksonville, Florida 32256
Attention: President
Telephone: (904) 363-6339
Fax: (904) 363-3856
with a copy to:
Foley & Lardner
200 North Laura Street
Jacksonville, FL 32202
Attention: Linda Y. Kelso, Esq.
Telephone: (904) 359-2000
Fax: (904) 359-8700
(ii) if to McCorkle, to:
Allan J. McCorkle
11657 Village Lane
Jacksonville, FL 32223
Telephone: (904) 880-1601
Fax: (904) 292-0703
with copies to:
Smith Hulsey & Busey Holly J. McCorkle, Esq.
P.O. Box 53315 13914 Mandarin Oaks Lane
225 Water Street, #1800 Jacksonville, FL 32223
Jacksonville, FL 32202 Telephone: (904) 880-7399
Attention: John R. Smith, Jr., Esq. Facsimile: (904) 880-5118
Telephone: (904) 359-7700
Facsimile: (904) 359-7708
(g) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(h) Headings. The section and other headings contained in this
Agreement are for the convenience of the parties only and are not intended to be
a part hereof or to affect the meaning or interpretation hereof.
(i) Assignment. This is a contract for personal services by
McCorkle and may not be assigned by McCorkle without the Company's prior written
consent except to a corporation or other entity controlled by him which assumes
his obligations hereunder and provided McCorkle affirms that such assignment
does not release McCorkle's obligations hereunder. The Company shall have the
right to assign this Agreement, which shall inure to the benefit of the Company
and its successors and assigns.
<PAGE>
IN WITNESS WHEREOF, the Company has duly executed this Agreement by its
authorized representative and McCorkle has hereunto set his hand, in each case
effective as of the date first above written.
MOBILE AMERICA CORPORATION
By: /s/ R. Lee Smith
---------------------------------
Name: R. Lee Smith
Title: Director
/s/ Allan J. McCorkle
------------------------------------
ALLAN J. McCORKLE
DIRECTOR INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made as of the _____ day of May 1999,
by and between:
MOBILE AMERICA CORPORATION, a Florida corporation, and the subsidiaries
executing this Agreement, with their principal offices and places of business at
10475 Fortune Parkway, Suite 110, Jacksonville, Florida 32256, jointly and
severally, (collectively, the "Corporation"), and
____________________ ("Director"), whose residence address is:
___________________________________
___________________________________
___________________________________
Background
The Corporation desires that Director continue to serve as a director
of the Corporation. Director has indicated that Director is willing to continue
to serve in that capacity, on the condition that Director be indemnified as
provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and as an inducement
to Director to continue to serve as Director, the Corporation hereby covenants
and agrees with Director, as follows:
1. Definitions. For purposes of this Agreement:
a. "Expenses" include all expenses actually and reasonably
incurred with respect to a Proceeding, including, without limitation,
fees, expenses and disbursements of attorneys, accountants, financial
consultants and other professionals, and any federal, state, local and
foreign taxes imposed on the Director as a result of the actual or
deemed receipt of any payments under this Agreement.
b. "Liabilities" includes obligations to pay a judgment, settle-
ment, penalty, fine or tax (including, without limitation, any with-
holding or employment tax and any excise tax assessed with respect to
the Corporation, any Subsidiary, any employee benefit plan or any other
enterprise as to which Director is or was Serving in an Official
Capacity), together with any obligation to pay interest thereon.
c. "Proceeding" includes any potential, threatened, asserted,
pending or completed claim, action, suit or other type of proceeding,
whether civil, criminal, administrative or investigative, whether
formal or informal, including, without limitation, any arbitration
proceeding or other proceeding for the resolution of any claim or
dispute and any privately conducted negotiations, and including,
without limitation, any settlement, hearing, trial or appeal of any of
the foregoing.
d. "Serving in an Official Capacity" includes serving, regardless
of whether such service occurred before or after the date of this
Agreement, (i) as a director or officer of the Corporation or any
Subsidiary or (ii) at the request of the Corporation or any Subsidiary
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including any
employee benefit plan.
e. "Subsidiary" means any corporation or other entity directly or
indirectly controlled by the Corporation which now exists or may
hereafter be formed.
2. Statutory Indemnification. The Corporation hereby agrees to
indemnify and hold harmless Director to the fullest extent permitted or required
by the provisions of Chapter 607 of the Florida Statutes, as amended, or the
laws of the state of incorporation of any successor to the Corporation against
any Liability or Expense incurred by Director by reason of the fact that
Director is or was Serving in an Official Capacity. The Corporation agrees that
such obligation shall be to the fullest extent required or permitted by any
subsequent amendment to any of such provisions of the Florida Statutes or by any
other applicable statutory provisions permitting or requiring such
indemnification which are in effect or adopted after the date of this Agreement
(but in the case of any amendment or subsequent statutory provisions, only to
the extent that such amendment or provisions permit or require broader or more
extensive indemnification rights than prior thereto).
3. Additional Indemnification. Subject only to the exclusions set
forth in this Section 3, the Corporation further agrees to indemnify and hold
harmless Director against any and all Liabilities and Expenses incurred by
Director in connection with any Proceeding to which Director is or was a party
or is threatened to be made a party or in which Director is called to testify as
a witness or deponent by reason of the fact that Director is or was Serving in
an Official Capacity. Director shall not be entitled to any indemnification
pursuant to this Section 3 if a judgment or other final adjudication establishes
that any act or omission of Director was material to the cause of action so
adjudicated and that such act or omission constituted:
a. A criminal violation, unless Director had reasonable cause to
believe that Director's conduct was lawful or had no reasonable cause
to believe that such conduct was unlawful;
b. A transaction from which Director derived an improper personal
benefit;
c. An act or omission giving rise to liability for an unlawful
distribution under Section 607.0834, Florida Statutes, or any successor
provision; or
d. Willful misconduct or a conscious disregard for the best
interests of the Corporation (or any Subsidiary or any other enterprise
as to which Director is or was Serving in an Official Capacity).
For purposes of this Agreement, the termination of any claim, action, suit or
Proceeding, by judgement, order, settlement (whether with or without court
approval) or upon a plea of nolo contendere, or its equivalent, shall not create
a presumption that Director did not meet any particular standard of conduct or
have a particular belief or that a court has determined that indemnification is
not permitted by applicable law.
4. Advance of Expenses; Partial Indemnification. The Corporation shall
advance Expenses incurred by Director in defending any Proceeding for which
Director may be entitled to indemnification hereunder. The advances to be made
hereunder shall be paid by the Corporation to or for the benefit of Director
within ten days following delivery of a written request therefor, accompanied by
copies of invoices therefor or other reasonable documentation, by Director to
the Corporation. Director hereby agrees to repay any such advances of Expenses
made hereunder without interest thereon prior to judgment with respect to a
matter if Director is ultimately found not to be entitled to indemnification
hereunder with respect to such matter. If Director is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of any Expense or Liability but not entitled to indemnification for all
of the total amount thereof, the Corporation shall indemnify Director for such
portion thereof to which Director is entitled.
5. Separate Obligation. It is the intention of the parties that
Director be entitled to indemnification to the broadest possible extent allowed
by law. Accordingly, any ambiguity in this Agreement shall be construed in favor
of indemnification. The obligations of the Corporation under this Agreement are
separate, independent and primary obligations of the Corporation, and may be
enforced directly against the Corporation without any necessity for joining any
other enterprise as to which Director is or was Serving in an Official Capacity,
for recovering or seeking to enforce any judgment against such other enterprise,
or for otherwise seeking to recover from or out of the assets of any such other
enterprise, whether or not any such other enterprise has assets sufficient for
such recovery.
6. Notification of Defense of Claim. Promptly after receipt by
Director of the notice of the commencement of any Proceeding (including any
threat thereof) as to which Director may be entitled to indemnification here-
under, Director shall notify the Corporation in writing of the commencement
thereof. Failure to so notify the Corporation shall not relieve the Corporation
from any obligation hereunder except to the extent that it may suffer material
prejudice by reason of such failure. With respect to any such Proceeding as to
which Director notifies the Corporation of the commencement thereof:
a. The Corporation shall be entitled to participate therein at its
own expense.
b. Except as otherwise provided below, the Corporation shall
be entitled to assume the defense thereof on behalf of Director, with
counsel satisfactory to Director and the Corporation. Director shall
have the right to employ separate counsel in such Proceeding, and the
fees, expenses and disbursements of Director's own separate counsel
incurred after written notice from the Corporation to Director of its
assumption of the defense thereof and after the full assumption of such
defense by counsel engaged by the Corporation and satisfactory to
Director, shall be the expense of Director except (i) if the employment
of counsel by Director has been authorized in writing by the Corpora-
tion, or (ii) if Director shall have reasonably concluded that there
may be a conflict of interest between Director and the Corporation with
respect to the defense of such action, in which case the reasonable
fees, expenses and disbursements of Director's own separate counsel
shall be paid by the Corporation. The Corporation shall not be
entitled to assume the defense of any Proceeding brought by or on
behalf of the Corporation or as to which Director shall have made the
conclusion provided for in (ii) above.
c. The Corporation shall not be obligated to indemnify Director
under this Agreement for any amounts paid in settlement of any
Proceeding effected without its written consent, which shall not be
unreasonably withheld or delayed; provided that, notwithstanding the
foregoing, Director may effect any such settlement without the Corpora-
tion's consent if the Corporation has not (i) agreed in writing to
indemnify Director with respect to such proceeding hereunder and
(ii) given Director adequate financial and other assurances that such
indemnification will be made. The Corporation shall not settle any
action or claim in any manner which would impose any penalty, limita-
tion, Liability or Expense on Director without Director's written
consent unless the Corporation has (i) agreed in writing to indemnify
Director with respect to such proceeding hereunder and (ii) given
Director adequate financial and other assurances that such indemnifica-
tion will be made.
d. If the Corporation has any applicable directors and officers or
other applicable insurance in effect at the time it receives notice
pursuant to this Section 6 of the commencement or potential or
threatened commencement of a Proceeding, the Corporation shall give
prompt notice thereof to the insurer(s) in accordance with the
procedures set forth in the related insurance policies. The Corporation
shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of Director, all amounts payable with
respect to such Proceeding under the terms of such policies.
7. Insurance. As long as Director shall continue Serving in an
Official Capacity and thereafter as long as Director shall be subject to any
possible Proceeding for which indemnification may be provided hereunder, the
Corporation shall use best efforts to maintain directors and officers liability
insurance as to all directors and officers in reasonable amounts from
established and reputable insurers. Notwithstanding the foregoing, the
Corporation shall have no obligation to maintain such insurance if the
Corporation determines in good faith that such insurance is not reasonably
available or the premium costs are unreasonably disproportionate to the coverage
provided. In the event the Corporation maintains policies of directors and
officers liability insurance, Director shall be named as an insured in such
manner as to provide Director the same rights and benefits as are accorded to
the most favorably insured of the Corporation's directors.
8. Expenses of Determination. Notwithstanding any other provision in
this Agreement to the contrary, the Corporation shall indemnify Director against
all Expenses incurred by Director in connection with any Proceeding involving
the interpretation or enforcement of the rights of Director hereunder or under
the Corporation's director and officer liability insurance policy to the extent
that the Director is successful in such Proceeding.
9. No Restriction of Other Indemnification Rights. The Corporation
shall not adopt any amendment to its Articles of Incorporation or Bylaws, the
effect of which would be to deny, diminish or encumber Director's rights to
indemnity hereunder or pursuant to the Corporation's Articles of Incorporation,
the Corporation's Bylaws, or applicable law.
10. Merger or Consolidation. In the event that the Corporation shall be
a constituent corporation in a merger, consolidation or other reorganization,
the Corporation, if it shall not be the surviving, resulting or acquiring
corporation therein, shall require, as a condition thereto, that the surviving,
resulting, or acquiring corporation agree to indemnify Director to the full
extent provided in this Agreement and to adopt and assume the Corporation's
obligations under this Agreement. Whether or not the Corporation is the
surviving, resulting or acquiring corporation in any such transaction, Director
shall also stand in the same position under this Agreement as he or she would
have with respect to the Corporation if its separate existence had continued.
11. Non-exclusivity. The provision for indemnification and advancement
of expenses set forth in this Agreement shall not be deemed exclusive of any
other rights which Director may have under any provision of law, the
Corporation's Articles of Incorporation or Bylaws, the vote of the Corporation's
stockholders or disinterested directors, other agreements, or otherwise, whether
Serving in an Official Capacity or actions in another capacity. Director's
rights hereunder shall continue after Director has ceased Serving in an Official
Capacity.
12. No Third Party Beneficiaries. This Agreement is not intended for
the benefit of and shall not create any rights in favor of any third parties, it
being the intent of the parties that this Agreement be solely for the benefit of
Director, Director's heirs and personal representatives, in the event that
Director incurs any Liability or Expense for which Director is entitled to
indemnification hereunder.
13. Miscellaneous. This Agreement shall continue in force during the
period that Director is Serving in an Official Capacity and shall continue
thereafter so long as Director shall be subject to any possible claim or
Proceeding by reason of the fact that Director was Serving in an Official
Capacity. In the event that any provision of this Agreement is held to be void
or unenforceable, the remaining provisions shall not be affected thereby. No
amendment or modification to this Agreement shall be effective unless made in a
writing signed by the party against whom enforcement is sought.
14. Notice. Any notice or other communication required or permitted to
be delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by nationally recognized overnight courier service or by certified
or registered mail, first-class postage prepaid and return receipt requested,
(iii) deemed to have been received on the date of delivery, and (iv) addressed
as follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):
i. Notices. if to Company, to:
Mobile America Corporation
10475 Fortune Parkway, Suite 110
Jacksonville, Florida 32256
Attention: President
Telephone: (904) 363-6339
Fax: (904) 363-3856
with a copy to:
Foley & Lardner
200 North Laura Street
Jacksonville, FL 32202
Attention: Linda Y. Kelso, Esq.
Telephone: (904) 359-2000
Fax: (904) 359-8700
ii. if to Director, to:
IN WITNESS WHEREOF, the Corporation and the Director have duly executed and
delivered this Director Indemnification Agreement as of the date and year
first above written.
MOBILE AMERICA CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
FORTUNE INSURANCE COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
FORTUNE LIFE INSURANCE COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
MOBILE AMERICA INSURANCE GROUP, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
____________________________________
Director
Director Indemnification Agreement Continuation of Signature Page
FORTUNE FINANCIAL CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
BIG GORILLA, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
PEGASUS INSURANCE COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
Exhibit 10(d)
AGREEMENT REGARDING SEVERANCE
AND CHANGE IN CONTROL
AGREEMENT made this ____ day of ______________, 199__, between Mobile
America Corporation, Inc., a Florida corporation, hereinafter called
"Corporation," and ____________, hereinafter called "you."
WHEREAS, the "Corporation" considers it essential to the best interests
of its shareholders to foster the continuous employment of key management
personnel, and in this connection, the Board of Directors of the Corporation
("Board") recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control may exist and that such possibility, and
the uncertainty and questions which it may raise among management, may result in
the departure or distraction of management personnel to the detriment of the
Corporation and its shareholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Corporation's management, including yourself, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a change in control of the Corporation;
NOW THEREFORE, in order to induce you to remain in the employ of the
Corporation and in consideration of your agreement set forth below, the
Corporation agrees that you will receive the severance benefits set forth in
this agreement ("Agreement") in the event your employment with the Corporation
is terminated under the circumstances described below subsequent to a "change in
control of the Corporation" (as defined below).
1. No benefits shall be payable hereunder unless there shall have been
a change in control of the Corporation. For purposes of this Agreement, a
"change in control of the Corporation" shall be deemed to have occurred if:
A. Acquisition of 30% of the voting stock within a 12-month period
by a person or group who did not previously own 30% of the voting
stock. Any "Person," which shall mean a "person" as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Corporation, any trustee
or other fiduciary holding securities under an employee benefit plan of
the Corporation, or any corporation owned, directly or indirectly, by
the shareholders of the Corporation in substantially the same propor-
tions as their ownership of stock of the Corporation), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation repre-
senting 30% or more of the combined voting power of the Corporation's
then outstanding securities within a 12-month period. However, a
change of control shall not have been deemed to occur pursuant to this
subsection in the event the above outlined acquisition occurs as the
result of a public registered offering in the normal course of business
where there is no substantial change in the Board or management of the
Corporation.
B. A 50% change in the composition of the Board of Directors if
the new members are not endorsed by the old board, and during any
period of three (3) consecutive years (not including any period prior
to the execution of this Agreement), individuals, who at the beginning
of such period constitute the Board, and any new director (other than a
director designated by a Person who has entered into an agreement with
the Corporation to effect a transaction described in clause (A), (C) or
(D) of this section) whose nomination by the Board or election by the
Corporation's shareholders was approved by a vote of at least 50% of
the directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;
C. The shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other Corporation the sub-
sequent consummation of the approved transaction shall not constitute a
separate change of control, other than (1) a merger or consolidation
which would result in the voting securities of the Corporation out-
standing immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity) more than 70% of the combined voting power of the
voting securities of the Corporation or such surviving entity outstand-
ing immediately after such merger or consolidation or (2) a merger or
consolidation effected to implement a recapitalization of the
Corporation (or similar transaction) in which no Person acquires 30% or
more of the combined voting power of the Corporation's then outstanding
securities (if the approved transaction is abandoned the change of
control shall cease on the date of the Board of Director's announcement
of such), or
D. The shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposi-
tion by the Corporation of 50% or more of the Corporation's assets
within a 12-month period.
2. The term of this Agreement shall begin on the date of a change in
control of the Corporation and shall end on the date which is 18 months after a
change in control of the Corporation (or, if later, the date which is 18 months
after the date of the consummation of the transaction approved in Clause C of
Section 1 if the change in control of the Corporation is shareholder approval in
such Clause C). If any of the events constituting a change in control of the
Corporation shall have occurred, you shall be entitled to the benefits provided
herein upon the subsequent termination of your employment during the term of
this Agreement unless such termination is (i) because of your death or
Disability, (ii) by the Corporation for Cause, or (iii) by you other than for
Good Reason. In the event your employment with the Corporation is terminated for
any reason and subsequently a change in control of the Corporation occurs, you
shall not be entitled to any benefits hereunder. Further, no benefits hereunder
shall be provided under this contract if a termination occurs before or after
the term of this Agreement.
A. Termination by the Corporation of your employment for "Cause"
shall mean termination upon (i) the willful and continued failure by
you to substantially perform your duties with the Corporation (other
than any such failure resulting from your incapacity due to physical or
mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination (as defined herein) by you for Good
Reason (as defined herein)) after a written demand for substantial
performance is delivered to you by the Board, which demand specifically
identifies the manner in which the Board believes that you have not
substantially performed your duties and you do not immediately begin to
substantially perform your duties, or (ii) the willful engaging by you
in conduct which is demonstrably and materially injurious to the
Corporation, monetarily or otherwise. For purposes of this section, no
act or failure to act on your part shall be deemed "willful" unless
done, or omitted to be done, by you not in good faith without
reasonable belief that your action or omission was in the best interest
of the Corporation, or (iii) due to a felony conviction involving moral
turpitude or in which the company was a victim. Notwithstanding
the foregoing, you shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to you a copy of
a resolution duly adopted by the affirmative vote of the majority of
the entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the
Board), finding that in the good faith opinion of the Board you were
guilty of conduct set forth above and specifying the particulars
thereof in detail.
B. You shall be entitled to terminate your employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean, with
or without your express written consent, the occurrence after a change
in control of the Corporation of any of the following circumstances
unless such circumstances are fully corrected prior to the Date of
Termination (as defined herein) specified in the Notice of Termination
(as defined herein) given in respect thereof:
i. A change in your title with the Corporation which
substantially reduces the status of your responsibilities from
those in effect immediately prior to the change in control of
the Corporation;
ii. A reduction by the Corporation in your annual base salary
as in effect on the dale hereof or as the same may be increased
from time to time except for across-the-board salary reductions
similarly affecting all management personnel of any Person in
control of the Corporation;
iii. The relocation of the Corporation's offices at which you
are principally employed to a location more than sixty miles from
the location of such offices immediately prior to the change
in control of the Corporation, or the Corporation's requiring
you to be based anywhere other than such offices, except for
required travel on the Corporation' s business to an extent
substantially consistent with your present business travel
obligations;
iv. The failure by the Corporation to timely pay to you any
portion of your current compensation or to timely pay to you
any portion of an installment of deferred compensation under
any deferred compensation program of the Corporation;
v. The failure by the Corporation to continue, in substantial
effect, the current bonus program, car allowance, or benefit plan,
in which you participate immediately prior to the change in control
of the Corporation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Corporation to continue your
participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of your participation
relative to other participants, as existed at the time of the
change in control of the Corporation;
vi. The failure by the Corporation to continue to provide you
with benefits substantially similar (determined on the basis of the
plan as a whole as it applies to all participants) to those enjoyed
by you under any of the Corporation's pension, life insurance,
medical, health and accident, or disability plans in which you were
participating at the time of the change in control of the Corpora-
tion, the taking of any action by the Corporation which would
directly or indirectly materially reduce any of such benefits, or
the failure by the Corporation to provide you with the number of
paid vacation days to which you are entitled on the basis of years
of service with the Corporation's normal vacation policy in effect
at the time of the change in control of the Corporation; or
vii. The failure of the Corporation to obtain a satisfactory
agreement from any successor to assume and agree to perform
this Agreement.
3. Any purported termination of your employment by the Corporation or
by you shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the
provision so indicated.
4. "Date of Termination" shall mean (a) if your employment is
terminated for Disability, fourteen (14) days after Notice of Termination is
given (provided that you shall not have returned to the full-time performance of
your duties during such period), and (b) if your employment is terminated for
any other reason, the date specified in the Notice of Termination (which, in the
case of a termination for Cause shall not be less than thirty (30) days, and in
the case of a termination for Good Reason shall not be less than fourteen (14)
nor more than thirty (30) days, respectively, from the date such Notice of
Termination is given.
5. Following a change in control of the Corporation, you shall be
entitled to the following benefits upon termination of your employment by the
Corporation other than for Cause, your death or Disability or by you for Good
Reason provided that such period or termination occurs during the term of this
Agreement:
A. The Corporation shall pay you your base salary for 18 months,
plus all other vested amounts to which you are entitled under any
compensation plan of the Corporation, at the time such payments are
due, except as otherwise provided below;
B. Any earned but unpaid bonus from any prior periods shall be
paid.
C. You may accelerate outstanding stock options ("Options"), if
any, granted to you under the Corporation's stock option plans other
than as provided in applicable Federal or state securities or corporate
law. You may purchase stock at option price and sell or gift it when
you so desire. In the event you are transferred from an employee to the
Board of Directors, you will be entitled to accelerate your stock
options as a director.
D. For an 18 month period after such termination, the Corporation
shall arrange to provide you with life and health insurance benefits
substantially similar to those which you were receiving immediately
prior to the Notice of Termination. In addition to the foregoing life
insurance benefits, at the end of said above-stated period, to the
extent permitted by the life insurance policies then maintained by the
Corporation, the Corporation shall take whatever steps are appropriate
to assign to you from such policies a life insurance benefit on your
life providing term insurance to the age of sixty-five (65) years in a
face amount substantially similar to the life insurance protection
provided to you immediately prior to the Notice of Termination;
provided however, that you shall be responsible for the premiums with
respect to said policy for said term.
E. The Corporation shall reimburse you for reasonable outplacement
assistant services up to a maximum of $15,000.
6. The payments provided for herein shall be made not later than the
30th day following the Date of Termination; provided, however, that if the
amounts of such payments cannot be finally determined on or before such day, the
Corporation shall pay to you on such day an estimate, as determined in good
faith by the Corporation, of the minimum amount of such payments and shall pay
the remainder of such payments (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined, but in no event later than the 90th day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Corporation to you, payable on the 30th day after demand by the
Corporation (together with interest at the rate provided in section
1274(b)(2)(B) of the Code).
7. You shall not be required to mitigate the amount of any payment
provided for herein by seeking other employment or otherwise, nor shall the
amount of any payment or benefit provided for herein be reduced by any
compensation earned by you as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by you to
the Corporation, or otherwise.
8. The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or sub-
stantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place. Failure of the Corporation to obtain such assumption and agree-
ment prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Corporation in the same
amount and on the same terms to which you would be entitled hereunder if you
terminate your employment for Good Reason following a change in control of the
Corporation, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of Termina-
tion. As used in this Agreement, "Corporation" shall mean the Corporation as
hereinbefore defined and any successor to its business and/or assets as afore-
said which assumes and agrees to perform this Agreement by operation of law, or
otherwise.
9. This Agreement shall inure to the benefit of and be enforceable by
you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
10. In the event that the transaction constituting a change in control
of the Corporation is intended to be treated as a "Pooling of Interests" for
accounting purposes, any provision or provisions in this Agreement will be
deemed null and void to the extent that such provision or provisions would
preclude "Pooling of Interests" accounting treatment.
11. For the purpose of this Agreement, notices and all other communica-
tions provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage paid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Corporation shall be directed to the attention of the
Board with a copy to the Secretary of the Corporation, or, if either party has
furnished another address to the other in writing in accordance herewith, to
such other address, except that notice of change of address shall be effective
only upon receipt.
12. The Corporation is authorized to make all applicable withholding
on any payments hereunder.
13. Time is of the essence of this agreement. This agreement is made in
the State of Florida and shall be governed by Florida law. This is the entire
agreement between the parties and may not be modified or amended except by a
written document signed by the party against whom enforcement is sought. This
agreement may be signed in more than one counterpart, in which case each
counterpart shall constitute an original of this agreement. Paragraph headings
are for convenience only and are not intended to expand or restrict the scope or
substance of the provisions of this agreement. Wherever used herein, the
singular shall include the plural, the plural shall include the singular, and
pronouns shall be read as masculine, feminine or neuter as the context requires.
The prevailing party in any litigation, arbitration or mediation relating to
this agreement shall be entitled to recover its reasonable attorneys fees from
the other party for all matters, including but not limited to appeals. Duval
County, Florida, shall be proper venue for any litigation involving this
agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have signed this agreement as of the
day and year first above written.
Corporation: Mobile America Corporation
__________________________________ _________________________________________
(Seal)
__________________________________
Witnesses
Employee:
__________________________________ _________________________________________
(Seal)
__________________________________
Witnesses
The foregoing instrument was acknowledged before me this ____ day of
________________, 19___ by _____________________, who is personally known to me
or who has produced __________________________ as identification and who did
(did not) take an oath. (Notary must check applicable box).
[_] is/are personally known to me.
[_] produced a current Florida driver's license as identification.
[_] produced _____________________ as identification.
{Notary Seal must be affixed}
__________________________________________
SIGNATURE OF NOTARY
__________________________________________
Name of Notary (Typed, Printed or Stamped)
Commission Number ________________________
[if not legible on seal]
My Commission Expires ____________________
[if not legible on seal]
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (SEC File Numbers 333-10331 and 333-58587) of Mobile
America Corporation of our report dated March 17, 1999, relating to the
consolidated balance sheets of Mobile America Corporation and subsidiaries as of
December 31, 1998 and 1997 and the related consolidated statements of
operations, comprehensive income, changes in stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1998, and all
related schedules, which report appears in the annual report on Form 10-K of
Mobile America Corporation for the year ended December 31, 1998.
Cherry, Bekaert & Holland L.L.P.
Certified Public Accountants
Orlando, Florida
July 9, 1999
