SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [ ] 240.14a-11(c) or [ ] 240.14a-12
MOBILE AMERICA CORPORATION
(Name of Registrant as Specified in its Charter)
-----------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
MOBILE AMERICA CORPORATION
Notice and Proxy Statement
--------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
To the Holders of Common Stock:
PLEASE TAKE NOTICE that the annual meeting of shareholders of MOBILE
AMERICA CORPORATION will be held on Tuesday, the 16th of May, 2000, at 10:00
a.m. local time, at the Embassy Suites Hotel, 9300 Baymeadows Road,
Jacksonville, Florida 32256.
The meeting will be held for the following purposes:
1. To elect a board of eight directors pursuant to the bylaws of the
Company;
2. To approve amending the Mobile America Incentive Plan by
increasing to 220,000 the limit on the number of shares which may
be granted to a new employee for recruitment purposes;
3. To amend the Articles of Incorporation to change the name of
Mobile America Corporation to Fortune Financial, Inc.;
4. To approve a 3-for-1 reverse stock split;
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 20, 2000, are
entitled to vote at the annual meeting.
Shareholders are requested to date, sign and return the enclosed proxy
in the enclosed envelope, postage for which has been provided, even if you plan
to attend the meeting. Prompt response is helpful and your cooperation will be
appreciated. If you are able to be present at the meeting, you may revoke your
proxy and vote in person.
By order of the Board of Directors,
Carlena E. Purcell
Secretary
Date: April 14, 2000
<PAGE>
MOBILE AMERICA CORPORATION
10475-103 Fortune Parkway
Jacksonville, Florida 32256
April 14, 2000
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
This proxy statement and the enclosed form of proxy are first being
sent to shareholders of Mobile America Corporation on or about April 14, 2000,
in connection with the solicitation by the Company's Board of Directors of
proxies to be used at the annual meeting of the shareholders of the Company. The
meeting will be held on Tuesday, May 16, 2000, at 10:00 a.m. local time, at the
Embassy Suites Hotel, 9300 Baymeadows Road, Jacksonville, Florida 32256.
If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked at any time insofar as it has not been exercised.
Revocation of the proxy may be effected in a writing delivered to the Secretary,
by delivering a later dated proxy or by attendance at the annual meeting and
electing to vote in person. The shares represented by the proxy will be voted
unless the proxy is received in such form or at such time as to render it not
votable. For example, a proxy will be considered not votable if it is received
unexecuted or if the proxy form or signature thereon is so mutilated or defaced
so as to render it illegible.
The Board of Directors has designated Arthur L. Cahoon, Chairman, and
Carlena E. Purcell, Secretary of the Company, and each or any of them, as
proxies to vote shares of common stock solicited on its behalf.
Voting Securities and Principal Holders Thereof
Each share of common stock entitles its holder to one vote.
Shareholders representing a majority of the outstanding common stock must be
present to constitute a quorum at the annual shareholders meeting. Directors
will be elected by a plurality of votes cast by the shares entitled to vote in
the election of directors provided a quorum is present. Any other matter
properly coming before the meeting will be approved by a majority of the votes
cast on the matter, provided that a quorum exists. Broker non-votes and
abstentions will have no effect on the vote, but will be counted for purposes of
determining if a quorum is present at the meeting.
The record of shareholders entitled to vote at the annual meeting was
taken at the close of business on March 20, 2000. As of March 20, 2000, the
Company had outstanding and entitled to vote 7,552,744 shares of common stock.
The following table shows the name, address and beneficial ownership as
of March 1, 2000, of (i) each person known to the Company to be the beneficial
owner of more than five percent of its outstanding common stock, (ii) each
person who was a director or executive
<PAGE>
officer of the Company as of that date, and (iii) all officers and directors of
the Company 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) 2,872,110(2) 38.03%
R. Lee Smith(3) 792,074(4) 10.49%
Robert Thomas, III(5) 469,909(6) 6.22%
Thomas J. McCorkle 27,250(7) *
J. Michael Garrity 38,800(8) *
Thomas E. Perry 36,225(9) *
Duane A. Sanders 25,650(10) *
Holly J. McCorkle 35,922(11) *
Arthur L. Cahoon 222,500(12) 2.95%
J. John Wortman 186,363(13) 2.47%
Mark P. Brockelman 0 *
All executive officers and directors as a 4,706,803 62.32%
group (a total of 11 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 2,847,409 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. Excludes 754,824 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, 5,000 shares and 10,000 shares, granted to
Mr. Smith under the Company's Incentive Plan, at exercise prices of
$8.365, $8.91, $9.75, $7.125 and $2.00 per share, respectively.
Excludes 2,847,409 shares owned beneficially by Allan J. McCorkle which
are subject to a Voting Agreement between Mr. Smith and Mr. McCorkle.
See "Voting Agreement."
(5) The address of Mr. Thomas is 126 N. Broad Street, Thomasville, Georgia
31792.
(6) Includes immediately exercisable options to acquire 11,500 shares,
5,750 shares, 5,000 shares, 5,000 shares and 10,000 shares granted to
Mr. Thomas under the Company's Incentive Plan at exercise prices of
$8.365, $8.91, $9.75, $7.125 and $2.00, respectively. Includes the
following shares as to which Mr. Thomas disclaims beneficial ownership:
2
<PAGE>
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 339,885 shares owned by a family limited partnership of which
Mr. Thomas may be deemed to share investment power as a
result of his role as a financial advisor to the limited
partnership
(7) Amounts shown are 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 Company's Incentive Plan, at exercise prices
of $8.365, $8.91, $11.875 and $7.125, respectively.
(8) Includes immediately exercisable options to purchase 5,750 shares,
5,750 shares, 5,000 shares, 5,000 shares and 10,000 shares, granted to
Mr. Garrity under the Company's Incentive Plan, at exercise prices of
$8.365, $8.91, $9.75. $7.125 and $2.00 per share, respectively.
(9) Includes immediately exercisable options to purchase 5,750 shares,
5,750 shares, 5,000 shares, 5,000 shares and 10,000 shares, granted to
Mr. Perry under the Company's Incentive Plan, at exercise prices of
$8.365, $8.91, $9.75, $7.125 and $2.00 per share, respectively.
(10) Includes immediately exercisable options to purchase 9,200 shares,
3,450 shares, 2,000 shares and 1,000 shares, granted to Mr. Sanders
under the Company's Incentive Plan, at exercise prices of $8.1565,
$8.91, $11.875 and $5.5625, respectively.
(11) Includes an immediately exercisable option to purchase 10,000 shares,
granted to Ms. McCorkle under the Company's Incentive Plan, at an
exercise price of $2.00 per share. Includes 9,501 shares owned by Ms.
McCorkle's husband as to which Ms. McCorkle disclaims beneficial
ownership.
(12) Includes an immediately exercisable option to purchase 10,000 shares,
granted to Mr. Cahoon under the Company's Incentive Plan, at an
exercise price of $2.75 per share.
(13) Includes an immediately exercisable option to purchase 36,363 shares at
$2.75 per share, granted to Mr. Wortman.
PROPOSAL 1:
NOMINATION AND ELECTION OF DIRECTORS
At the meeting, a Board of eight Directors will be elected pursuant to
the bylaws of the Company to serve until the next annual meeting of shareholders
and until the election and qualification of their successors. The accompanying
proxy will be voted, if authority to do so is not withheld, for the election as
directors of the following persons who have been designated by management as
nominees. Each nominee has consented to being named as such in the proxy
statement and is at present available for election. If any nominee should become
unavailable, the persons voting the accompanying proxy may in their discretion
vote for a substitute.
3
<PAGE>
Information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
Offices Held in Company; Principal Year First
Name Age Occupations During the Past Five Years Became Director
---- --- -------------------------------------- ---------------
<S> <C> <C> <C>
Arthur L. Cahoon 44 Director since May 24, 1999; Chairman of the Board 1999
since August 9, 1999; Interim President and CEO from
May 24, 1999 to July 20, 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.
J. Michael Garrity 59 Consultant to Guy Carpenter & Co. since October 1997; 1994
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.
Holly J. McCorkle 34 Director since May 24, 1999; practicing attorney since 1999
1991.
Allan J. McCorkle 68 Director; Chairman Emeritus; Chairman of the Board of 1968
Directors until August 9, 1999; President and Chief
Executive Officer from August 1985 until May 24, 1999.
Thomas J. McCorkle 57 Vice President of the Company since July 1980; 1980
President of Fortune 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 from
April 1986 until August 1999.
Thomas E. Perry 67 Director; private investor; President of Sing 1994
Development Company From 1990 to 1998.
R. Lee Smith 57 Director; private investor and real estate developer; 1979
practicing attorney from 1979 to 1997; President of
Fortune Life Insurance Company from 1968 to 1997.
Robert Thomas, III 66 Director; private investor; Senior Vice President of 1976
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.
</TABLE>
4
<PAGE>
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 proxy is in ballot form so that a specification may be made to
grant or withhold authority to vote for the election of each director. The
shares represented by the proxy will be voted "for" the election of directors
nominated by the Board of Directors unless authority to do so is withheld. The
Board of Directors recommends that shareholders vote "FOR" the election of each
of the above nominees.
Executive Officers
The following table presents information concerning all executive
officers of the Company.
Business Experience
Name Age During Past Five Years
---- --- ----------------------
Mark P. Brockelman 45 Vice President and Chief Financial Officer
since September 1999; Vice President CFO
Services, Inc. from March 1999 until
September 1999; Manager of Profitability,
Senior Vice President and Director of
Finance of Barnett Banks, Inc. from July
1990 until March 1998.
Thomas J. McCorkle 57 See Nomination and Election of Directors.
Duane A. Sanders 43 Vice President - Operations since August
1995; Regional Director/Assistant Vice
President of Cigna Financial Institution
Services from June 1994 until August 1995;
Assistant Vice President of 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.
J. John Wortman 59 President and Chief Executive Officer since
July 1999; President and CEO of Wortman
Capital Associates from 1997 until 1999;
President and CEO of Anthem Casualty Group
from 1995 until 1997; President and CEO of
Amerisure Companies from 1989 until 1995.
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
stockholders.
5
<PAGE>
Voting Agreement
On May 24, 1999, the Company, 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 any additional nominee selected by A. McCorkle.
The Voting Agreement generally continues until, but not including, the
2002 Annual Meeting of the Company'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 Company 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
Company's next 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 Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company'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 Company. Officers, directors, and greater
than ten percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the Company's 1999 fiscal year, the following
individuals made late filings:
Allan J. McCorkle, President and Chief Executive Officer until his
retirement in May 1999 and Chairman Emeritus, made three late filings
of Form 4 relating to a total of 7 transactions. In addition, he made a
late filing on Form 5 for holdings or transactions previously reported
in his individual capacity that were held or made through McCorkle
Investments Limited Partnership, a Nevada limited partnership he
controls. J. John Wortman filed a late Form 3 after he joined the
Company as President and Chief
6
<PAGE>
Executive Officer in July 1999. Holly McCorkle and R. Lee Smith,
directors of the Company, each filed a late Form 4 reporting 2 and
2 transactions, respectively. In addition, the following individuals
filed a late Form 5 for 1998, primarily to report stock option grants
which through inadvertence they had not previously reported: Jack H.
Chambers, a former director (4 option grants); Michael Garrity, a
director (4 option grants); Allan J. McCorkle ((i) 1 transactions; (ii)
4 option grants; and (iii) 42 transactions on the part of McCorkle
Limited Partnership, a Nevada limited partnership that Mr. McCorkle
controls, which Mr. McCorkle had previously reported individually);
Thomas J. McCorkle, Vice President (2 transactions and 4 option
grants); Thomas E. Perry, a director (1 transaction and 4 option
grants); Randal Ringhaver, a former director (2 option grants); Duane
H. Sanders, Vice President-Operations (4 option grants); R. Lee Smith,
a director (4 option grants); Thomas L. Stinson, formerly Vice
President and Chief Financial Officer (4 option grants); and Robert L.
Thomas, a director (4 option grants).
Certain Relationships and Related Transactions
No director or executive officer of the Company, nor any security
holder who is known to the Company to own of record or beneficially more than
five percent of any class of the Company'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, 1999 or in any proposed transactions except as set
forth below. 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 Company entered into a Consulting and
Noncompetition Agreement (the "Consulting Agreement") with Allan J. McCorkle,
then Chairman of the Board of Directors of the Company, 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
Company as requested by the Company and not to compete with the business of the
Company 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 Company 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 Company will pay A. 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 Company 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 Company 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 participates in the life insurance and medical insurance
programs provided to the Company's directors, but is not eligible to receive
directors fees, meeting fees or other compensation paid or awarded to directors.
7
<PAGE>
During 1999, in order to encourage equity ownership in the Company by
senior management, the Company sold 150,000 shares of common stock to Arthur L.
Cahoon, who served as interim President and CEO for approximately two months and
who serves as Chairman of the Board, and sold 150,000 shares to J. John Wortman,
who joined the Company as President and CEO in July 1999. The stock sales, which
took place pursuant to the Company's Incentive Plan at prices determined to be
the fair market value of the shares on the date of sale, were 100% financed with
purchase money loans from the Company. Mr. Cahoon purchased 50,000 shares on
May 24, 1999 at a price of $3.125 per share and purchased 100,000 shares on
July 20, 1999 at a price of $2.75 per share. Mr. Wortman purchased his 150,000
shares on July 20, 1999 at a price of $2.75 per share. The purchase money loans
to Mr. Cahoon, which are payable in full at the end of their five-year terms, do
not bear interest so long as Mr. Cahoon performs substantial services for the
Company. The purchase money loan to Mr. Wortman, which is payable in full at the
end of five years, bears interest at 8% per year, payable annually. The highest
amount outstanding under the loans to Messrs. Cahoon and Wortman since the loans
were made (and the amount outstanding as of the date of this proxy statement)
consists of the original principal amount of $431,250 in the case of Mr. Cahoon
and $412,500 in the case of Mr. Wortman. The loans are secured by pledges of the
purchased shares.
The Company 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 Company. During the fiscal year ended December 31, 1999, the
Company paid Jones & McCorkle $54,695.29 for such services.
In November 1999, Fortune Life Insurance Company, a subsidiary of the
Company, entered into an agreement to sell land and a building to Holly McCorkle
and certain other purchasers for $207,000. An independent appraisal in October
1998 placed the value of the property at $230,000. The difference between the
appraised value and the purchase price is equal to an estimate of the marketing
and realtor fees that the Company anticipated incurring to sell the property had
it placed the property for sale to the general public. The sale is scheduled to
close in May 2000.
Board of Directors and Committees
The Board of Directors has an Executive Committee which is authorized
to exercise all of the powers of the Board of Directors when the Board is not in
session, subject to the limitations of Florida law. The Executive Committee
currently consists of Arthur L. Cahoon, Allan J. McCorkle, and R. Lee Smith. Two
meetings of the Executive Committee were held in 1999.
The Board of Directors has an Audit Committee which met four times
during 1999. The Audit Committee currently consists of J. Michael Garrity, Holly
J. McCorkle and Thomas E. Perry. The Audit Committee reviews the scope and
results of the audit examination for the Company's previous fiscal year,
consults with the Company's independent auditors and its internal financial
staff with respect to internal accounting systems and controls, and consults
with the Company's independent auditors with regard to the audit plan. In
addition, this committee approves the engagement or discharge of the Company's
independent auditors and negotiates the fees for the coming year.
8
<PAGE>
The Company has a Compensation Committee which met three times during
1999. The Compensation Committee currently consists of Holly J. McCorkle, R. Lee
Smith and Robert Thomas, III. The Compensation Committee recommends for approval
by the full Board of Directors, the nature and amount of all compensation for
executive officers of the Company.
The Company does not have a standing Nominating Committee.
During 1999, the Board of Directors held three regular meetings and 15
special meetings. Each director attended 75% or more of the aggregate of the
meetings of the board and the committees on which he served.
9
<PAGE>
Executive Compensation
Summary of Cash and Certain Other Compensation
The following table sets forth information with respect to the
compensation paid by the Company and its subsidiaries for the last three fiscal
years, to the Chief Executive Officer and each of the other executive officers
of the Company in all capacities in which they served.
<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>
Arthur L. Cahoon(4) 1999 $ 43,810 $ -0- -- 160,000 $ 530
Interim President and
Chief Executive Officer
Allan J. McCorkle(5)(6) 1999 $ 226,779 $ -0- -- -0- $ 166,722
Chairman Emeritus, 1998 427,751 169,260 -- 15,000 13,430
Former President & CEO 1997 413,953 176,312 -- 15,000 13,363
J. John Wortman 1999 $ 138,299 $ -0- -- 368,178 $ 833
President and
Chief Executive Officer
Mark P. Brockelman 1999 $ 19,231 $ -0- -- 10,000 $ 13,761
Vice President and
Chief Financial Officer
Thomas J. McCorkle 1999 $ 132,894 $ -0- -- 10,000 $ 12,780
Vice President 1998 127,000 42,315 -- 5,000 13,761
1997 120,000 44,078 -- 5,000 13,686
Duane A. Sanders 1999 $ 138,601 $ -0- -- 20,000 $ 13,271
Vice President 1998 131,475 42,315 -- 5,000 13,761
1997 124,439 44,078 -- 5,000 13,686
</TABLE>
- ------------------------
(1) Includes amounts deferred under the Company'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 1999 include the following:
10
<PAGE>
Company Contributions
to Money Purchase Term Life
Pension Plan Insurance Premiums
---------------------- ------------------
Arthur L. Cahoon $ -0- $ 530
Allan J. McCorkle 12,986 1,751
J. John Wortman -0- 833
Mark P. Brockelman -0- 279
Thomas J. McCorkle 10,655 2,125
Duane A. Sanders 11,146 2,125
(4) Arthur L. Cahoon was employed as interim President and Chief Executive
Officer from May 24, 1999 until July 20, 1999.
(5) Allan J. McCorkle retired as President and Chief Executive Officer
effective May 24, 1999.
(6) Allan J. McCorkle, or a corporation controlled by him, also received
medical reimbursements of $1,651.86, consulting fees of $145,831 and
$4,500 for secretarial/office expenses in 1999. These amounts are
included in "All Other Compensation" above.
Employment Agreements
The Company has Agreements regarding Severance and Change in Control
(the "Severance Plans") with each of the executive officers. 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.
In July 1999, the Company entered into a three-year employment
agreement with J. John Wortman when he joined the Company as President and CEO.
The agreement provides for annual base salary of at least $250,000, plus bonuses
of not less than 40% of base salary subject to attainment of performance goals
approved by the compensation committee of the Board of Directors. The agreement
also provided for stock options and stock loans that are described elsewhere
herein. If Mr. Wortman is terminated without cause during the term of the
agreement, he is entitled to his then current base salary for the remaining term
of the agreement, plus 50% of any annual bonus he would otherwise have been
eligible to receive on the date of termination.
In June 1999, the Company entered into a three-year employment
agreement with Thomas J. McCorkle, Vice President of the Company. The agreement
provides for annual base salary of at least $134,620, plus bonuses pursuant to
executive bonus policies in effect from time to time. If the Company terminates
Mr. McCorkle without cause or Mr. McCorkle leaves for good reason, e.g., because
the Company requires him to relocate outside Florida, and the termination takes
place during the first two years of the agreement, Mr. McCorkle is entitled to
his then base salary through the end of the second year of the agreement (less
compensation received by Mr. McCorkle from a new employer). Upon Mr. McCorkle's
termination for any reason, the Company is required to enter into a consulting
and non-competition agreement with Mr. McCorkle which provides for Mr. McCorkle
to furnish consulting services to the Company as requested by the Company and
not to compete with the business of the Company or solicit its agents, employees
or customers for a period of five years. During the term of the consulting
agreement, Mr. McCorkle is entitled to a consulting fee of $50,000 per year.
11
<PAGE>
Options
The following table sets forth information concerning options granted
during the year ended December 31, 1999 under the Company's Incentive Plan to
the executives named in the Summary Compensation Table above. The Company 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 1999(1) Price Date 5% 10%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arthur L. Cahoon 10,000 N/A(2) $ 2.00 09/23/2009 $ 12,578 $ 31,875
J. John Wortman 218,178(3) 59.42% 2.75 07/20/2009 377,330 956,229
Mark P. Brockelman 10,000(4) 2.72% 2.125 09/23/2009 13,364 33,867
Thomas J. McCorkle 10,000(4) 2.72% 2.00 11/22/2009 12,578 31,875
Duane A. Sanders 20,000(4) 5.45% 2.00 11/22/2009 25,156 63,750
</TABLE>
(1) A total of 367,178 options were granted to key employees in 1999 under
the Company's Incentive Plan.
(2) Fully vested options were granted to Mr. Cahoon after he left the
office of interim President and CEO.
(3) Options vest as follows: 1/6 immediately on date of grant and 1/6 each
anniversary date of grant thereafter.
(4) Options vest 20% annually beginning on the first anniversary of the
date of grant.
The following table sets forth information concerning the value of
unexercised options as of December 31, 1999 held by the executives named in the
Summary Compensation Table above. No options were exercised by such persons
during 1999.
12
<PAGE>
OPTION YEAR-END VALUES TABLE
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1999 December 31, 1999
Name Exercisable/Unexercisable(1) Exercisable/Unexercisable(2)
---- ------------------------- -------------------------
<S> <C> <C>
Arthur L. Cahoon 10,000 / -0-(3)
J. John Wortman 36,363 / 181,815(4) -
Mark P. Brockelman -0- / 10,000(5) -
Thomas J. McCorkle 27,250 / 10,000(5) -
Duane A. Sanders 15,650 / 31,600(5) -
- ------------------------
</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) Fully vested options were granted to Mr. Cahoon after he left the
office of interim President and CEO.
(4) Options vest as follows: 1/6 vest immediately on date of grant, and 1/6
each anniversary date of grant thereafter.
(5) Options vest 20% annually beginning on the first anniversary of the
date of grant.
Directors' Compensation
In 1999, each outside director of the Company was paid $1,000 for each
Board of Directors meeting and $500 for each Board Committee meeting attended.
Such amounts have been included in the cash compensation table above with
respect to the individuals named who are directors. Each outside director also
participates in the Company's group health insurance and medical reimbursement
plans for its executive officers at no cost to the director. In 1999, the
Company reimbursed Mr. Perry, Mr. Smith and Mr. Thomas $2,186, $4,988 and
$5,517, respectively, under the Company's medical reimbursement plan for medical
expenses not covered by group health insurance. The Company also provided each
outside director with $265,000 of term life insurance coverage under the
Company's group life insurance plans for its executive officers.
See "Certain Relationships and Related Transactions" for information
concerning consulting compensation being paid to Mr. McCorkle, the Company's
Chairman Emeritus.
13
<PAGE>
Compensation Committee Report
The Company's Compensation Committee establishes, and recommends for
approval by the full Board of Directors, the compensation to executive officers
of the Company as well as approving the Company's annual bonus pool in order to
attract and motivate management to enhance shareholder value.
The Committee's decisions on compensation for the Chief Executive
Officer are ultimately subjective, based on consideration of several factors:
(i) historic salary increments, (ii) annual performance of individual and (iii)
Company performance as measured by the return on equity and increase in the
value of the Company's stock.
Annual performance incentive compensation by way of cash bonuses is
established by the Company's ultimate results for each fiscal year, compared
with previously targeted objectives. The combination of base compensation and
cash bonuses provides a level of risk and opportunity that encourages management
performance in the achievement of the Company's long-term objectives and goals.
MOBILE AMERICA CORPORATION
COMPENSATION COMMITTEE
R. Lee Smith, Chairman
Holly J. McCorkle
Robert Thomas
14
<PAGE>
Performance Graph
The performance graph set forth below compares the cumulative total
shareholder return on the Company's common stock with the Nasdaq Index and
Nasdaq Insurance Index for the years 1994 through 1999.
[OBJECT OMITTED]
Date Company Index Market Index Peer Index
---- ------------- ------------ ----------
12/30/1994 100.000 100.000 100.000
01/31/1995 107.167 100.527 102.582
02/28/1995 132.887 105.809 107.458
03/31/1995 147.890 108.953 107.500
04/28/1995 128.600 112.385 111.142
05/31/1995 162.893 115.289 113.545
06/30/1995 143.603 124.622 116.365
07/31/1995 147.890 133.774 118.227
08/31/1995 162.893 136.490 123.950
09/29/1995 197.187 139.634 129.364
10/31/1995 201.473 138.829 129.689
11/30/1995 195.043 142.086 137.433
12/29/1995 177.897 141.335 142.048
01/31/1996 199.038 142.042 141.969
02/29/1996 203.461 147.457 142.786
03/29/1996 194.615 147.952 141.201
04/30/1996 194.615 160.210 138.787
05/31/1996 207.884 167.557 141.804
06/28/1996 207.884 160.004 144.306
07/31/1996 194.615 145.764 137.328
08/30/1996 187.980 153.954 142.862
09/30/1996 179.134 165.725 147.480
10/31/1996 175.817 163.882 148.820
11/29/1996 174.711 174.044 156.878
12/31/1996 185.769 173.898 161.922
01/31/1997 238.269 186.240 161.325
02/28/1997 224.523 175.937 170.643
03/31/1997 224.523 164.466 166.673
04/30/1997 210.776 169.591 166.950
05/30/1997 208.485 188.793 180.028
06/30/1997 213.411 194.600 193.507
07/31/1997 213.411 215.102 202.131
08/29/1997 202.872 214.784 202.571
09/30/1997 202.872 227.516 214.475
10/31/1997 273.350 215.662 212.045
11/28/1997 247.662 216.800 217.233
12/31/1997 295.087 213.067 237.522
01/30/1998 299.913 219.811 231.141
02/27/1998 293.158 240.479 242.673
03/31/1998 256.683 249.366 243.191
04/30/1998 232.365 253.569 242.569
05/29/1998 221.558 239.480 237.063
06/30/1998 210.750 256.207 226.422
07/31/1998 194.538 253.220 214.632
08/31/1998 151.308 203.026 195.988
09/30/1998 154.010 231.195 193.372
10/30/1998 132.394 241.359 205.562
11/30/1998 108.077 265.891 210.206
12/31/1998 85.111 300.431 211.625
01/29/1999 91.615 344.017 196.552
02/26/1999 90.227 313.166 194.433
03/31/1999 61.077 336.721 192.040
04/30/1999 74.958 347.520 199.612
05/28/1999 80.511 338.248 209.684
06/30/1999 72.182 368.444 206.309
07/30/1999 69.406 361.925 198.265
08/31/1999 73.570 377.049 191.716
09/30/1999 53.442 377.376 178.142
10/29/1999 41.643 406.822 178.042
11/30/1999 47.196 454.354 168.487
12/31/1999 43.032 555.988 164.411
Assumes $100 invested on December 31, 1994 in the
Company's common stock, Nasdaq Stock
Market and Nasdaq Insurance Stocks.
<PAGE>
PROPOSAL 2:
AMENDMENT TO MOBILE AMERICA CORPORATION INCENTIVE PLAN
In July 1999, the Company's Board of Directors adopted, subject to
stockholder approval, an amendment to the Mobile America Corporation Incentive
Plan (the "Plan") increasing to 220,000 the number of shares which may be
granted to a new employee for recruitment purposes. The Board of Directors
believes that the increase in recruitment awards is desirable because of the
need to continue to attract and retain key employees who are in a position to
contribute materially to the Company's success through the grant of awards under
the Plan.
On July 20, 1999, the Company granted J. John Wortman incentive options
under the Plan to acquire 218,178 shares of common stock in connection with his
employment as the Company's President and CEO. See the Option Grants Table
elsewhere in this proxy statement for additional information concerning the
terms of the options. If shareholders do not
15
<PAGE>
approve the amendment, the options will be treated as non-qualified options
granted outside the Plan.
Summary of Plan
Purpose; Eligibility. The purpose of the Plan is to assist the Company
in attracting and retaining key employees and directors who will contribute to
the Company's success, and motivating such persons in a manner that will align
their interests with those of the Company's stockholders. A total of 1,045,000
shares have been reserved for issuance under the Plan. Key employees and
directors of the Company are eligible to receive awards under the Plan. As of
March 1, 2000, there were approximately 19 key employees of the Company
(including executive officers and employee directors) and six non-employee
directors considered eligible to receive awards under the Plan.
Administration. The Plan is administered as to key employees by a
committee of at least two non-employee directors who must qualify as
"disinterested" persons under Rule 16b-3 under the Securities Exchange Act of
1934 and as "outside directors" under 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and is administered as to non-employee directors
by a committee of at least two directors who also are Company employees or by
the full Board of Directors if at any time there are not two directors who also
are Company employees. Subject to the provisions of the Plan, the committees
determine, as to the respective segments of the plan they administer, who
qualifies for awards, the type, timing and expiration dates of awards, vesting
schedules and other terms and conditions of awards. All awards are non-
transferable.
Stock Options. Options awarded under the Plan may be either incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986 (the "Code"), which permits the deferral of taxable income related to the
exercise of such options, or non-qualified options not entitled to such
deferral. The committees determine the exercise price of options, which cannot
be less than 100% of the fair market value of the common stock on the date of
grant, expiration dates and other terms and conditions of options, including
whether the option exercise price may be paid in shares of common stock of the
Company. Under the Code, only employees may receive incentive options, which
cannot have a term of more than 10 years. In the case of an incentive option
granted to an individual who owns (or is deemed to own) at least 10% of the
total combined voting power of the Company, the exercise price must be at least
110% of the fair market value of the common stock on the date of grant and the
option term cannot exceed five years. Incentive options may be granted only
within 10 years from the date of adoption of the Plan. The aggregate fair market
value (determined at the time the option is granted) of shares with respect to
which incentive options may be granted to any one individual under the Plan, or
any other plan of the Company or any parent or subsidiary, which stock options
are exercisable for the first time during any calendar year, may not exceed
$100,000. No participant may receive options or stock appreciation rights under
the Plan for an aggregate of more than 25,000 shares during any single year,
except that the Plan currently allows a one-time grant to a participant of
75,000 shares for recruiting purposes. The proposed amendment would increase
this limit from 75,000 to 220,000 shares.
As of March 1, 2000, there were outstanding options to acquire 571,516
shares of common stock. A total of 93,484 additional shares are available for
award under the Plan as of the date of this proxy statement. See the "Options"
tables under "Executive Compensation"
16
<PAGE>
above for information on options granted to the Company's executive officers
named in the Summary Compensation Table. The following table sets forth
information concerning options held by the groups listed therein:
Group(1) Options
-------- -------
All current executive officers 312,678
All current non-employee directors 157,500
All employees 101,338
- ---------------------------------
(1) No recipients of awards are associates of either directors or executive
officers of the Company. No persons other than (i) those shown on the
"Options" tables under "Executive Compensation" and (ii) the Company's
outside directors, hold 5% or more of the total options outstanding
under the Plan.
The number of options awarded to each participant was based on the
recipient's potential ability to contribute to the Company's success, including
position within the Company, and, in a number of instances, previous length of
service with the Company.
All outstanding options have exercise prices equal to the fair market
value of the common stock on the date of grant, ranging from $2.00 per share to
$11.875 per share.
The following table sets forth information relating to outstanding
options:
Outstanding
Exercise Price Numbers of Shares
-------------- -----------------
$ 2.00 129,000
2.125 10,000
2.75 218,178
2.813 10,000
5.5625 25,500
7.125 25,000
8.1565 11,500
8.365 47,438
8.91 47,150
9.63 5,000
9.75 20,000
11.875 22,750
Approximately 36% of all outstanding options awarded under the Plan
were fully vested and exercisable on the grant dates. The remaining outstanding
options vest 20% annually beginning on the first anniversary date of grant.
Outstanding options expire if not exercised prior to the tenth anniversary date
of grant. The option exercise price may be paid in whole or in part in shares of
common stock, valued at their closing sale price on the date of exercise.
17
<PAGE>
As of March 1, 2000 the closing sale price of the common stock on the
Nasdaq National Market was $2.00 per share.
Other Types of Awards. The Plan also permits the award of other
stock-based awards, including stock appreciation rights ("SARs") and restricted
stock awards. An SAR entitles the recipient to receive the difference between
the fair market value of the common stock on the date of exercise and the SAR
price, in cash or in shares of common stock, or a combination of both, as
determined in the discretion of the committee awarding the SAR. Restricted stock
awards entitle the recipient to receive shares of common stock, subject to
forfeiture restrictions that lapse over time or upon the occurrence of events
specified by the committee making the award, with the shares required to be
forfeited if the recipient ceases to be an employee or a director of the
Company, as the case may be, before the restrictions lapse. See "Certain
Relationships and Related Transactions" for information on 300,000 shares sold
under the Plan in 1999.
Federal Income Tax Consequences of Options. An optionee does not
recognize income for federal income tax purposes upon the grant of a
non-qualified option but generally must recognize ordinary income upon exercise,
to the extent of the excess of the fair market value of the underlying shares of
common stock on the date of exercise over the exercise price. The amount of
compensation includable in gross income by an optionee ordinarily is deductible
by the Company during the Company's taxable year in which the income is
includable by the optionee provided among other things that the applicable
information reporting requirements are satisfied. Upon the sale of shares
acquired pursuant to the exercise of non-qualified options, the optionee
recognizes capital gain or loss to the extent the amount realized differs from
the fair market value of the shares on the date of exercise. If an optionee pays
the exercise price of a non-qualified option solely with cash, the tax basis of
the shares received will equal the sum of the cash plus the amount of
compensation income includable by the optionee as a result of the exercise.
The holder of an incentive option generally recognizes no income for
federal income tax purposes at the time of the grant or exercise of the option
(but the spread between the exercise price and the fair market value of the
underlying shares on the date of exercise generally will constitute a tax
preference item for purposes of the alternative minimum tax). The optionee
generally will be entitled to long term capital gain treatment upon the sale of
shares acquired pursuant to the exercise of an incentive stock option, if the
shares have been held for more than two years from the date of grant of the
option and for more than one year after exercise. Generally, if the optionee
disposes of the stock before the expiration of either of these holding periods
(a "disqualifying disposition"), the gain realized on disposition will be
compensation income to the optionee to the extent the fair market value of the
underlying stock on the date of exercise (or, if less, the amount realized on
disposition of the underlying stock) exceeds the applicable exercise price. The
Company will not be entitled to an income tax deduction in connection with the
exercise of an incentive stock option but will be entitled to a deduction equal
to the amount of any ordinary income recognized by an optionee upon a
disqualifying disposition. If an optionee pays the exercise price of an
incentive option solely with cash, the optionee's tax basis in the stock
received is equal to the amount of cash paid.
If the employee pays the exercise price with shares of Common Stock,
the employee should not recognize capital gain or loss on the shares delivered
in payment of the exercise
18
<PAGE>
price, and the employee's basis in the number of shares purchased upon exercise
equal to the number of shares exchanged will be equal to the employee's original
basis in the shares exchanged. The employee's basis in any shares purchased upon
exercise in excess of that amount will be equal to the gain, if any, recognized
upon exercise and any cash paid upon exercise.
The shares represented by the proxy will be voted "for" the proposal
unless authority to do so is withheld. The Board of Directors recommends that
shareholders vote in favor of the amendment to the Plan.
PROPOSAL 3:
APPROVAL OF AMENDMENT TO THE ARTICLES OF
INCORPORATION TO CHANGE THE CORPORATE NAME
The Board believes that changing the Company's corporate name to
"Fortune Financial, Inc." is justified and appropriate for the following
reasons:
o "Fortune Financial, Inc." more suitably reflects the
Company's business strategy. Over the years, the Company
has divested much of its insurance coverage on mobile homes
and broadened the type of insurance products it sells in
response to changing market conditions, and the term
"Mobile" is no longer descriptive.
o "Fortune Financial, Inc." prevents confusion concerning the
Company's current and past core business.
The name change will be effective upon the filing of Articles of amendment to
the Company's Articles of Incorporation, the form of which is attached as
Exhibit A.
The shares represented by the proxy will be voted "for" the proposal
unless authority to do so is withheld. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
"FOR" CHANGING THE CORPORATE NAME TO "FORTUNE FINANCIAL CORPORATION."
19
<PAGE>
PROPOSAL 4:
3-FOR-1 REVERSE STOCK SPLIT
General
The Board has adopted, subject to shareholder approval, a resolution
proposing that the Company amend its Articles of Incorporation, substantially in
the form of Exhibit A, to effect a reverse stock split pursuant to which each
three shares of common stock currently outstanding ("Old Common Stock") will
become one share of the Company's new common stock ("New Common Stock").
The Articles of Incorporation presently authorize 18,000,000 shares of
common stock, of which 7,552,744 shares were issued and outstanding as of the
record date. In addition, as of the record date, 571,516 shares of common stock
were subject to issuance upon exercise of outstanding warrants and options.
Purposes of the reverse stock split
In deciding to approve and recommend the reverse stock split, the Board
considered that the common stock has traded since January 1, 1999 at prices
ranging from $1.625 to $4.250. During the week preceding the date of this proxy
statement, the trading price ranged between $1.625 and $2.00. This trading price
may not be appealing to many brokerage firms, which may be reluctant to
recommend lower priced securities to their clients or to deal in lower priced
stocks for various reasons, including the perception that such stocks are unduly
speculative. Investors may also be dissuaded from purchasing lower priced stocks
because the brokerage commissions, as a percentage of the total transaction,
tend to be higher for these stocks. Moreover, the analysts at many brokerage
firms will not monitor the trading activity of lower priced stocks. In addition,
the Board believes that most investment funds are reluctant to invest in lower
priced stocks. The Board hopes that the reverse stock split will result in a
price level for the New Common Stock that will mitigate the present reluctance
on the part of brokers and investors to trade in the Old Common Stock.
There can be no assurance either that the reverse stock split will
result in a price level that will mitigate the present reluctance on the part of
brokers and investors to trade in the Company's common stock, especially since
there are many other factors that affect both demand for and the price of stock.
The Board also considered that the reverse stock split could decrease the
trading price of the common stock. The reverse stock split may result in a
shareholder owning an odd lot of common stock. Generally, an odd lot is fewer
than 100 shares and a round lot is 100 shares. Shareholders may incur higher
transactional costs to trade an odd lot of common stock than they would incur to
trade a round lot.
The reverse stock split also will facilitate continued listing of the
Company's common stock on the Nasdaq National Market. Stocks that do not
maintain a minimum bid price of $1 on the market are subject to delisting.
Effectiveness of the reverse stock split
If Proposal No. 4 is approved by the shareholders, the reverse stock
split would become effective at such time as the Company files the amendment to
the Company's Articles of Incorporation with the Secretary of State of Florida.
Even if the reverse stock split is approved by the shareholders, it is within
the discretion of the Board of Directors not to carry out the reverse stock
split. Upon the filing of the amendment, all the Old Common Stock will be
converted into New Common Stock as set forth in the amendment.
20
<PAGE>
No fractional shares will be issued. In lieu of any fractional shares,
each holder of Old Common Stock who would otherwise have been entitled to a
fraction of a share of New Common Stock upon surrender of the holder's
certificates will be entitled to receive a cash payment (without interest)
determined by multiplying (i) the fractional interest to which the holder would
otherwise be entitled (after taking into account all shares of Old Common Stock
then held of record by the holder), and (ii) three times the average last sale
price of shares of Old Common Stock for the 20 trading days immediately prior to
the effective date or, if no such sale takes place on such days, the average of
the closing bid and asked prices thereof for such days, in each case as
officially reported on the Nasdaq National Market.
From and after the effective date, certificates representing shares of
Old Common Stock shall be deemed to represent only the right to receive shares
of New Common Stock to which an individual shareholder is entitled.
Certificates and Fractional Shares
As soon as practicable after the effective date, the Company will
request all shareholders to return their stock certificates representing issued
shares of Old Common Stock outstanding on the effective date ("Old
Certificates") in exchange for certificates representing the number of whole
shares of New Common Stock into which the shares of Old Common Stock have been
converted ("New Certificates") as a result of the reverse stock split. Each
shareholder will receive a letter of transmittal from the Company's transfer
agent containing instructions on how to exchange certificates. SHAREHOLDERS
SHOULD NOT SUBMIT THEIR OLD CERTIFICATES TO THE TRANSFER AGENT UNTIL THEY
RECEIVE THESE INSTRUCTIONS. In order to receive New Certificates, shareholders
must surrender their Old Certificates pursuant to the transfer agent's
instructions, together with the properly executed and completed letter of
transmittal and such evidence of ownership of such shares as the Company may
require.
Beginning with the effective date, each Old Certificate, until
surrendered and exchanged as described above, will be deemed for all purposes to
evidence ownership of the whole number of shares of New Common Stock into which
the shares evidenced by the Old Certificates have been converted.
No fractional shares of New Common Stock will be issued as a result of
the reverse stock split. In lieu of receiving fractional shares, shareholders
who hold a number of shares not evenly divisible immediately prior to the
reverse stock split will be entitled to receive cash for any fractional share,
as described above.
Certain effects of the reverse stock split
The principal effect of the reverse stock split will be to decrease the
number of shares of Common Stock outstanding from approximately 7,552,744 to
approximately 2,517,581. In addition, the Board will take appropriate action to
adjust proportionately the number of shares of Common Stock issuable upon
exercise of outstanding options, and to adjust the related exercise and
conversion prices, to reflect the reverse stock split. As a result, following
the effective date, the number of shares of Common Stock issuable upon the
exercise of outstanding warrants and options will be reduced from 571,516 to
190,505 shares.
21
<PAGE>
The shares of New Common Stock will be fully paid and non-assessable.
The amendment does not change the terms of the Company's common stock. The
shares of the Company's common stock after giving effect to the reverse stock
split will have the same voting rights and rights to dividends and distributions
and will be identical in all other respects to the shares of the Company's
common stock now authorized. Because no fractional shares of New Common Stock
will be issued, any shareholder who owns less than three shares of Old Common
Stock will cease to be a shareholder of the Company as of the effective date;
nevertheless, the Company does not anticipate that the reverse stock split will
result in any material reduction in the number of holders of Common Stock. Each
shareholder's percentage ownership of the New Common Stock will not be altered
except for the effect of the elimination of fractional shares. The Company
estimates that it will cost less than $3,000.00 to pay for fractional shares.
Because the authorized Common Stock of the Company will not be reduced,
the overall effect will be an increase in authorized but unissued shares of
Common Stock as a result of the reverse stock split. These shares may be issued
by the Board in its discretion. Any future issuance will have the effect of
diluting the percentage of stock ownership and voting rights of the present
holders of common stock.
Moreover, while the Board believes it advisable to authorize and
approve the reverse stock split for the reasons set forth above, the Board is
aware that the increase in the number of authorized but unissued shares of
Common Stock may have a potential anti-takeover effect in that it would enhance
the ability of the Company to issue additional shares which could be used to
thwart persons, or otherwise dilute the stock ownership of shareholders seeking
to control the Company. In addition, the mere availability of such additional
shares may work to discourage an attempt to acquire control of the Company other
than through negotiations with the Board. The reverse stock split is not being
recommended by the Board as part of an anti-takeover strategy, and the Board has
no knowledge of any party seeking to alter its current stockholding position in
the Company.
The reverse stock split will increase the par value of the shares of
Common Stock from a par value of $.025 per share to a par value of $.075 per
share. This increase should have no material effect on the value of the shares
of Common Stock. The total capital of the Company will not be reduced as a
result of the reverse stock split.
Certain Federal Income Tax Consequences
The following description of certain federal income tax consequences is
based on the Internal Revenue Code of 1986, as amended (the "Code"), the
applicable Treasury Regulations promulgated thereunder, judicial authority and
current administrative rulings and practices as in effect on the date of this
proxy statement. This discussion is for general information only and does not
discuss consequences which may apply to special classes of taxpayers (for
example, nonresident aliens, broker-dealers or insurance companies) or any
aspects of state, local or foreign tax laws. Shareholders are urged to consult
their own tax advisors to determine the particular tax consequences to them of
the reverse stock split.
The Company has been advised that because the reverse stock split is
not part of a plan to increase periodically a shareholder's proportionate
interest in the assets or earnings and profits of the Company, the reverse stock
split should not result in the recognition by shareholders of any gain or loss
for federal income tax purposes (except to the extent of the
22
<PAGE>
cash received in lieu of fractional shares). The holding period for each share
of New Common Stock received by a shareholder will include the shareholder's
holding period for its shares of Old Common Stock with respect to which the
shares of New Common Stock are issued, provided that the shares of Old Common
Stock were held as capital assets. The adjusted tax basis of each share of New
Common Stock received by a shareholder (including the fractional share for which
cash is received) will be the same as the adjusted tax basis of the shares of
Old Common Stock with respect to which the share of New Common Stock is issued.
A shareholder who receives cash in lieu of a fractional share of New Common
Stock generally will recognize taxable gain or loss equal to the difference, if
any, between the amount of cash received and the portion of the shareholder's
aggregate adjusted tax basis in the shares of Old Common Stock allocated to the
fractional share. If the shares of Old Common Stock allocated to the fractional
shares were held by such shareholder as capital assets, the gain or loss
resulting from the payment of cash in lieu of the issuance of a fractional share
will be taxed as capital gain or loss.
Miscellaneous
The Board may abandon the proposed reverse stock split at any time
before or after the meeting and prior to the filing of the amendment if for any
reason the Board deems it advisable to do so. In addition, the Board may make
any and all changes to the amendment that it deems necessary to file the
amendment with the Florida Secretary of State and give effect to the reverse
stock split.
Florida law provides that dissenters' rights do not apply with respect
to shares, such as the Old Common Stock, that are listed on the Nasdaq National
Market.
The Shares Represented By The Proxy Will Be Voted "For" The Proposal
Unless Authority To Do So Is Withheld. The Board Unanimously Recommends A Vote
"For" The Reverse Stock Split.
Independent Certified Public Accountants
The Company has selected the firm of KPMG L.L.P., independent certified
public accountants, as auditors to examine the books and accounts of the Company
for the fiscal year ending December 31, 2000. KPMG L.L.P. was engaged by the
Company on April 13, 2000.
A representative of both KPMG L.L.P. and Cherry, Bekaert & Holland
L.L.P. is expected to be available at the annual meeting with an opportunity to
make statements and to respond to appropriate questions by shareholders.
On April 13, 2000, upon recommendation of the Audit Committee of the
Board of Directors and the approval of the Board of Directors, the Company
advised Cherry, Bekaert & Holland L.L.P., the Company's auditors since fiscal
1987, that the Company would be engaging a national accounting firm. Cherry,
Bekaert & Holland L.L.P. served as the Company's auditors for the fiscal year
ending December 31, 1999.
Cherry, Bekaert & Holland L.L.P.'s report on the Company's financial
statements for the fiscal year ended December 31, 1999 did not contain an
adverse opinion or a disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope or accounting principles. During the Company's
fiscal year ended December 31, 1999, and the subsequent interim period, there
were no disagreements with the Company's auditors on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure which if not resolved to the accounting firm's satisfaction would have
caused it to make reference to the subject matter of the disagreement in
connection with its report.
During its fiscal year ended December 31, 1999, and the subsequent
interim period, the Company did not consult with KPMG LLP regarding (i) the
application of accounting principles to a specified transaction or the type of
audit opinion that might be rendered on the Company's financial statements or
(ii) any matter that was either the subject of a disagreement or a reportable
event.
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Annual Report
A copy of the Company's annual report for the fiscal year ended
December 31, 1999 accompanies this proxy statement. Any shareholder who does not
receive a copy may obtain one by writing the Corporate Secretary at 10475-103
Fortune Parkway, Jacksonville, Florida 32256.
Other Matters
Management does not know of any other matters to come before the
meeting. However, if any other matters properly come before the meeting, it is
the intention of the persons designated as proxies to vote in accordance with
their best judgment on such matters.
Expenses of Solicitation
The cost of soliciting proxies will be borne by the Company. The
Company does not expect to pay any compensation for the solicitation of the
proxies but may reimburse brokers and other persons holding stock in their
names, or in the names of nominees, for their expense for sending proxy material
to principals and obtaining their proxies.
Shareholder Proposals
Any shareholder desiring to present a proposal for action at the annual
meeting of shareholders which is expected to be held at the end of May, 2001,
and desiring that such proposal be included in the Company's proxy material
pursuant to Rule 14a-8 of the Securities and Exchange Commission, should submit
a written copy of such proposal to the Company's principal offices not later
than December 7, 2000. Such proposal should be submitted by certified mail,
return receipt requested, and should in all respects comply with applicable
proxy rules relating to shareholder proposals in order to be included in the
Company's proxy materials.
Proposals should be directed to the attention of the Secretary. Notice
to the Company of a shareholder proposal submitted otherwise than pursuant to
Rule 14a-8 will be considered untimely if received by the Company after February
20, 2001 and the persons named in proxies solicited by the Company's Board of
Directors for its Annual Meeting of Shareholders to be held in 2001 may exercise
discretionary voting power with respect to any such proposal as to which the
Company does not receive timely notice.
Shareholders are urged to specify their choices, date, sign and return
the enclosed proxy in the enclosed envelope, postage for which has been
provided. Prompt response is helpful and your cooperation will be appreciated.
Dated: April 14, 2000
24
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EXHIBIT A
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
MOBILE AMERICA CORPORATION
(reflecting name change to Fortune Financial, Inc.)
Pursuant to Sections 607.1001, 607.1003, 607.1006, and 607.1009,
Florida Business Corporation Act (the "Act"), the following provisions of the
Articles of Incorporation of Mobile America Corporation, a Florida corporation,
first filed in Tallahassee on August 15, 1968 and assigned document number
333831, be and they hereby are amended as follows:
1. Article I of the Articles of Incorporation is hereby amended in
its entirety to read as follows:
Article I - Name
----------------
The name of the corporation is Fortune Financial, Inc.
2. Article III, Section I of the Articles of Incorporation is hereby
amended in its entirety to read as follows:
a. 18,000,000 shares of common stock, par value $.075 per share
b. 500,000 shares of preferred stock, par value $.10 per share.
Simultaneously with the effective date of the filing of this amendment to the
Corporation's Articles of Incorporation, as amended (the "Effective Date"), each
share of Common Stock of the Corporation issued and outstanding or held as
treasury shares immediately prior to the Effective Date (the "Old Common Stock")
shall automatically be reclassified and continued (the "Reverse Split"), without
any action on the part of the holder thereof, as one-third of one share of
Common Stock. The Corporation shall not issue fractional shares on account of
the Reverse Split. Holders of Old Common Stock who would otherwise be entitled
to a fraction of a share on account of the Reverse Split shall receive, upon
surrender of the stock certificates formerly representing shares of the Old
Common Stock, in lieu of such fractional share, an amount in cash (the
"Cash-in-Lieu Amount") equal to the product of (i) the fractional share which a
holder would otherwise be entitled to, multiplied by (ii) 3 times the average of
the last sale price per share of the Old Common Stock on the 20 trading days
immediately prior to the Effective Date or, if no such sale takes place on such
days, the average of the closing bid and asked prices thereof for such days, in
each case as officially reported on the Nasdaq National Market. No interest
shall be payable on the Cash-in-Lieu Amount.
The foregoing amendments were adopted by the directors of the
corporation at a meeting on the 15th day of March, 2000, and by the shareholders
at a meeting held on the ____ day of ___________, 2000. The only class of stock
entitled to vote on approval of the
2
<PAGE>
Articles of Amendment was the common stock. The number of votes cast by such
voting group was sufficient for approval by that voting group.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment this ______ day of _______________, 2000.
_________________________________________
Name: J. John Wortman
Title: President and Chief Executive
Officer
2
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MOBILE AMERICA CORPORATION
100 FORTUNE PARKWAY
JACKSONVILLE, FLORIDA 32256
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2000
The undersigned hereby appoints Arthur L. Cahoon and Carlena E.
Purcell, and each or either of them, as Proxies, each with full power to appoint
a substitute, and hereby authorizes them or either of them to represent and to
vote, as designated below, all the shares of common stock of Mobile America
Corporation held of record by the undersigned on March 20, 2000, at the annual
meeting of shareholders to be held on May 16, 2000, or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed (Except [ ] WITHHOLD AUTHORITY to
as marked to the contrary below). vote for all nominees
listed below.
Nominees: Arthur L. Cahoon, J. Michael Garrity, Allan J. McCorkle,
Holly J. McCorkle, Thomas J. McCorkle, Thomas E. Perry,
R. Lee Smith, Robert Thomas, III.
To withhold authority to vote for any individual nominee, write that
nominee's name on the space provided below:
__________________________________________________________________________
2. APPROVAL OF AMENDMENT TO INCENTIVE PLAN
To approve an amendment to the Mobile America Corporation Incentive
Plan increasing to 220,000 the limit on the number of shares which may
be granted to a new employee for recruitment purposes.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF NAME CHANGE TO FORTUNE FINANCIAL, INC.
To approve an amendment to the Articles of Incorporation changing the
name of the corporation from Mobile America Corporation to Fortune
Financial, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
4. APPROVAL OF 3-FOR-1 REVERSE STOCK SPLIT
To approve amending the Articles of Incorporation to effect a reverse
stock split pursuant to which each three shares of common stock
currently outstanding will become one share of common stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
If any other matter requiring a vote of the shareholders arises, the
Proxies are authorized to vote upon the matter in accordance with their
best judgement in the interest of the Corporation.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED
FOR EACH OF THE PROPOSALS.
Please sign exactly as names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give
full title. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated ______________________________, 2000
-------------------------------------------
Signature
-------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
