CAPITAL CITY BANK GROUP, INC.
217 North Monroe Street
Tallahassee, Florida 32301
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
TO BE HELD ON APRIL 27, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of Shareowners
of Capital City Bank Group, Inc. (the "Company") will be held at the Florida
State Conference Center, 555 West Pensacola Street, Tallahassee, Florida, on
Tuesday, April 27, 1999, at 4:00 p.m., for the following purposes:
(1) To elect three Class II directors of the Company to serve for a term of
three years each, or until their successors are duly elected and
qualified;
(2) To ratify the appointment of Arthur Andersen LLP as auditors for the
Company for the fiscal year ending December 31, 1999; and
(3) To transact any and all such other business as may properly come before
the meeting or any adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement dated April 7, 1999.
Only Shareowners of record at the close of business on March 1, 1999, will
be entitled to receive notice of and to vote at the Meeting.
By Order of the Board of Directors,
/s/ J. Kimbrough Davis
J. Kimbrough Davis
Corporate Secretary
Tallahassee, Florida
April 7, 1999
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY. A SELF-ADDRESSED,
STAMPED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. SHAREOWNERS WHO ARE
PRESENT AT THE MEETING MAY REVOKE THEIR PROXY AND VOTE IN PERSON IF THEY SO
DESIRE.
CAPITAL CITY BANK GROUP, INC.
217 North Monroe Street
Tallahassee, Florida 32301
PROXY STATEMENT
ANNUAL MEETING OF SHAREOWNERS
APRIL 27, 1999
Purpose of Solicitation
The Annual Meeting of the Shareowners (the "Meeting") of Capital City Bank
Group, Inc. (the "Company") will be held at the Florida State Conference
Center, 555 West Pensacola Street, Tallahassee, Florida, on Tuesday,
April 27, 1999, at 4:00 p.m., for the purposes set forth in the attached
Notice of Annual Meeting of Shareowners and in this Proxy Statement. The
accompanying Proxy is solicited on behalf of the Company's Board of
Directors, at the expense of the Company, in connection with such Meeting
and any adjournment thereof. This Proxy Statement and the enclosed Proxy are
being mailed to Shareowners on or about April 7, 1999.
Voting and Revocability of Proxies
When the Proxy is properly executed and returned to the Company, it will be
voted as directed by the Shareowner executing it unless it is revoked
prior to the vote of the Shareowners at the Meeting. If no directions are
given on the Proxy, the shares represented by the Proxy will be voted
(i) FOR the election of the three Class II directors as named herein to
serve as directors of the Company for a term of three years, or until
their successors are duly elected and qualified, (ii) FOR the ratification of
the appointment of Arthur Andersen LLP as the Company's auditors for
the fiscal year ending December 31, 1999, and (iii) as determined by the
Board of Directors on any other matter which may properly be brought at
the meeting.
Any person giving a Proxy may revoke it at any time before it is exercised
by the execution of another Proxy bearing a later date or by written
notification to the Corporate Secretary of the Company. Shareowners who are
present at the Meeting may revoke their Proxy and vote in person if they so
desire.
Voting Requirements
Under the Bylaws of the Company, a majority of the shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), entitled to
vote will constitute a quorum at a meeting of Shareowners. The presence of
a quorum at the Meeting, either in person or by written proxy, and a
favorable vote of a plurality of the shares represented and voted at the
Meeting shall be required for the election of directors and ratification of
the auditors. Abstentions and broker non-votes shall not be counted for
purposes of election or ratification. None of the proposals to be considered
at the Meeting shall create dissenters' rights under the Florida Business
Corporation Act.
Persons Entitled to Vote and Principal Shareowners
Only Shareowners of record at the close of business on Monday, March 1, 1999
(the "Record Date"), are entitled to notice of and to vote at the Meeting or
any adjournments thereof. Each share of Common Stock entitles the holder to
one vote on any matter coming before the Meeting. As of the Record Date,
there were 8,862,038 shares of Common Stock of the Company issued and
outstanding which were held of record by approximately 1,294 Shareowners.
All share and per share information in this Proxy Statement has been adjusted
to reflect a three-for-two stock split effective June 1, 1998, and a
two-for-one stock split effective April 1, 1997.
SHARE OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREOWNERS
Persons and groups beneficially owning in excess of 5% of the Common Stock
are required to file certain reports with respect to such ownership pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The following table sets forth, as of March 1, 1999, certain information as
to the Common Stock beneficially owned by: (i) all persons who have filed the
reports required of persons owning more than 5% of the Common Stock or who
were known to the Company to beneficially own more than 5% of the Common
Stock outstanding as of March 1, 1999, (ii) each director, (iii) the
executive officers of the Company named in the Summary Compensation Table
(the "named executive officers"), and (iv) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature Percent of Shares
Beneficial Owner of Beneficial Ownership(1) of Common Stock Outstanding
<S> <C> <C>
DuBose Ausley
Post Office Box 391
Tallahassee, Florida 32302 628,456(2) 7.09%
Godfrey Smith
Post Office Box 900
Tallahassee, Florida 32302 1,324,561(3)(4) 14.95%
Robert H. Smith
Post Office Box 11248
Tallahassee, Florida 32302 1,761,442(5)(6) 19.88%
William G. Smith, Jr.
Post Office Box 11248
Tallahassee, Florida 32302 2,967,030(7)(8) 33.48%
Thomas A. Barron 252,167(9) 2.85%
Cader B. Cox, III 7,397 **
J. Kimbrough Davis 33,656(10) **
John K. Humphress 117,633(11) 1.33%
Lina S. Knox 69,225(12)(13) **
Payne H. Midyette, Jr. 250,932(14) 2.83%
All Directors and Executive
Officers as a Group (9 persons) 4,848,852 50.61%
** Less than 1%
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner, for purposes of this table, of any shares of Common
Stock if he or she has or shares voting or investment power with respect to such
Common Stock or has a right to acquire beneficial ownership at any time within
60 days from the Record Date. As used herein, "voting power" is the power to
vote or direct the voting of shares and "investment power" is the power to
dispose or direct the disposition of shares. Except as otherwise noted,
ownership is direct, and the named individuals exercise sole voting and
investment power over the shares of the Common Stock. Share amounts have been
rounded to the nearest whole share.
(2) Includes (i) 182,676 held in trust under which Mr. Ausley serves as trustee
and has sole voting and investment power; (ii) 30,000 shares owned by a
corporation of which Mr. Ausley is Chairman and as to which Mr. Ausley controls
voting and investment power; (iii) 50,430 shares held in trusts under which Mr.
Ausley serves as a trustee and has shared voting and investment power; and (iv)
4,425 shares owned by Mr. Ausley's wife, of which he disclaims beneficial
ownership.
(3) Includes 158,356 shares held by Mr. Smith's wife, of which he disclaims
beneficial ownership. Of the 1,324,561 shares beneficially owned by Godfrey
Smith, 1,166,205 shares are also beneficially owned by William G. Smith, Jr.
(4) Godfrey Smith is the father of William G. Smith, Jr. and Robert H. Smith
and the uncle of Lina S. Knox.
(5) Includes (i) 63,817 shares in accounts for his children for which Mr. Smith
is Custodian; (ii) 609,346 shares held in certain trusts under which Mr. Smith
shares voting and investment power as a co-trustee; (iii) 336,628 shares held by
a partnership under which Mr. Smith shares voting and investment power; and (iv)
27,281 shares owned by Mr. Smith's wife, of which he disclaims beneficial
ownership. Of the 1,761,442 shares beneficially owned by Robert H. Smith,
945,974 shares are also beneficially owned by William G. Smith, Jr.
(6) Robert H. Smith is the son of Godfrey Smith, the brother of William G.
Smith, Jr., and the first cousin of Lina S. Knox.
(7) Includes (i) 49,837 shares in accounts for his children for which Mr. Smith
is Custodian; (ii) 1,166,205 shares directly owned by Godfrey Smith over which
Mr. Smith has voting and investment power pursuant to a power of attorney
granted by Godfrey Smith; (iii) 609,346 shares held in certain trusts under
which Mr. Smith shares voting and investment power as a co-trustee; (iv) 336,628
shares held by a partnership under which Mr. Smith shares voting and investment
power; and (v) 21,852 shares owned by Mr. Smith's wife, directly and through an
Individual Retirement Account, all of which he disclaims beneficial ownership.
Of the 2,967,030 shares beneficially owned by William G. Smith, Jr., 1,166,205
shares are also beneficially owned by Godfrey Smith and 945,974 shares are also
beneficially owned by Robert H. Smith.
(8) William G. Smith, Jr. is the son of Godfrey Smith, the brother of Robert H.
Smith and the first cousin of Lina S. Knox.
(9) Includes (i) 103,542 shares held in trusts under which Mr. Barron serves as
trustee; (ii) 459 shares for which Mr. Barron has power of attorney and may be
deemed to be a beneficial owner; and (iii) 16,500 shares owned by Mr. Barron's
wife, of which he disclaims beneficial ownership.
(10) Includes (i) 924 shares in accounts for his children for which Mr. Davis
is Custodian; (ii) 12,861 shares owned jointly by Mr. Davis and his wife; and
(iii) 3,573 shares owned by Mr. Davis's wife, directly and through an Individual
Retirement Account, all of which he disclaims beneficial ownership.
(11) Includes (i) 77,370 shares held by a limited partnership of which Mr.
Humphress is a general partner and shares voting and investment power; (ii)
2,841 shares owned jointly by Mr. Humphress and his wife; (iii) 2,100 shares in
accounts for his children for which Mr. Humphress is Custodian; and (iv) 1,102
shares owned by Mr. Humphress's wife, directly and through an Individual
Retirement Account, all of which he disclaims beneficial ownership.
(12) Includes 2,400 shares owned jointly by Ms. Knox and her husband.
(13) Ms. Knox is the first cousin of Robert H. Smith and William G. Smith, Jr.,
and the niece of Godfrey Smith.
(14) Includes (i) 93,060 shares for which Mr. Midyette has power of attorney
and may be deemed to be a beneficial owner; and (ii) 69,351 shares owned by Mr.
Midyette's wife, of which he disclaims beneficial ownership.
</TABLE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Pursuant to the Company's Amended and Restated Articles of Incorporation,
the Board of Directors is divided into three classes, designated Class I,
Class II and Class III. The Company's Amended and Restated Articles of
Incorporation provide that, beginning with the 1998 Annual Meeting of
Shareowners, directors of the class standing for re-election at each annual
meeting are to be elected for terms of three years or until their successors
are duly elected and qualified.
At the meeting, three persons will be elected as Class II directors. It is
intended that the persons named in the proxies solicited by the Board of
Directors will vote for the election of the named nominees. If any nominee
is unable to serve, the shares represented by all valid proxies which have
not been revoked will be voted for the election of such substitute as the
Board of Directors may recommend, or the Board of Directors may by resolution
reduce the size of the Board to eliminate the resulting vacancy. At this
time, the Board of Directors knows of no reason why any nominee might be
unavailable to serve. Godfrey Smith, Thomas A. Barron and Lina S. Knox
currently serve as Class II directors and have been nominated by the Board of
Directors for election at the Meeting as Class II directors. If elected,
Messrs. Smith and Barron and Ms. Knox will serve as Class II directors until
the 2002 Annual Meeting. Cader B. Cox, III and William G. Smith, Jr.
currently serve as Class I directors until the 2001 Annual Meeting.
John K. Humphress, Payne H. Midyette, Jr. and DuBose Ausley currently serve
as Class III directors until the 2000 Annual Meeting.
Information Regarding Director Nominees, Continuing Directors and Executive
Officers
The following table sets forth information with respect to the continuing
directors, director nominees and executive officers of the Company.
The nominees listed below have indicated they are willing and able to serve
as directors if elected.
<TABLE>
<CAPTION>
Age as
of the
Record Positions with the Company and
Name Date Business Experience During the Last Five Years
<S> <C> <C>
Class II Director Nominees:
Thomas A. Barron 46 A director since 1982, he is Treasurer of the Company
and was elected President of Capital City Bank in
January 1995. He served as President of Capital City
Second National Bank from 1979 to 1995 and President
of Industrial National Bank from 1982 to 1995.
Lina S. Knox 54 A director since January 1998, she is a community
volunteer. Ms. Knox is the first cousin of William G.
Smith, Jr. and the niece of Godfrey Smith.
Godfrey Smith 84 A director since 1982, he was elected Vice Chairman of
the Company and Capital City Bank in January 1995. Mr.
Smith served as President of the Company from 1982 to
1995. Mr. Smith is the father of William G. Smith, Jr.
and the uncle of Lina S. Knox.
Continuing Class III Directors:
(Term expiring in 2000)
DuBose Ausley 61 A director since 1982, he is Chairman of the Board of
the Company. Mr. Ausley is Chairman of the law firm of
Ausley & McMullen and has served as a director of TECO
Energy, Inc., since 1992. In March of 1993, Mr. Ausley
was elected to the Board of Sprint Corporation and he
served as a director of Centel Corporation from 1982
to 1993.
John K. Humphress 50 A director since October 1994, he has been a
shareholder in Krause Humphress Pace & Wadsworth,
Chartered CPA's, since 1973.
Payne H. Midyette, Jr. 71 A director since 1983, he is Chairman of the Executive
Committee of Midyette-Moor, a division of Palmer &
Cay/Carswell, Inc, an insurance agency. From 1985 to
1992, he was Chairman of Alexander & Alexander, Inc.,
a Florida corporation, d/b/a Midyette-Moor Insurance
Agency.
Continuing Class I Directors:
(Term expiring in 2001)
Cader B. Cox, III 49 A director since October 1994, he has been President
of Riverview Plantation, Inc., a resort/agricultural
company, since June 1976.
William G. Smith, Jr. 45 A director since 1982, he was elected President and
Chief Executive Officer of the Company and Chairman of
Capital City Bank in January 1995. Mr. Smith served as
Executive Vice President and Chief Operating Officer
of the Company from 1987 to 1995 and President and
Chief Executive Officer of Capital City First National
Bank of Tallahassee from 1989 to 1995. Mr. Smith is
the son of Godfrey Smith and the first cousin of
Lina S. Knox.
Other Executive Officers:
J. Kimbrough Davis 45 Mr. Davis was elected Executive Vice President and
Chief Financial Officer of the Company in January 1997.
He served as Senior Vice President and Chief
Financial Officer from 1991 to 1997 and in January 1997 he
was elected Executive Vice President and Chief
Financial Officer of Capital City Bank.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREOWNERS VOTE "FOR"
THE ELECTION OF THOMAS A. BARRON, LINA S. KNOX AND GODFREY SMITH AS CLASS II
DIRECTORS OF THE COMPANY. MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors (the "Board") conducts its business through
meetings of the Board and its committees. The Board of Directors
of the Company meets monthly and may have additional special meetings.
During the year ended December 31, 1998, the Board met 13 times.
No director attended fewer than 75% of the sum of (i) the total number of
Board meetings held during the year ended December 31, 1998, and (ii) the
total number of meetings held by committees on which each such director
served during such fiscal year.
The Company's Board of Directors has a standing Audit Committee which for
fiscal year 1998 consisted of Cader B. Cox, III, John K. Humphress,
Lina S. Knox and Payne H. Midyette, Jr. Mr. Humphress serves as the Audit
Committee's chairman. The Audit Committee has the responsibility of
recommending the independent auditors; reviewing and approving the annual
plans of the independent auditors; approving the annual financial statements;
reviewing regulatory reports; reviewing and approving the annual plan
for the internal audit department, as well as a summary report of such
department's findings and recommendations; and monitoring and reviewing the
Company's compliance with Section 112 of the Federal Deposit Insurance
Corporation Improvement Act of 1991. The Audit Committee met four times
in fiscal year 1998. The Board of Directors does not have a standing
nominating committee, as the full Board performs this function.
Compensation Committee Interlocks and Insider Participation
For fiscal year 1998, the Compensation Committee consisted of directors
Cader B. Cox, III, John K. Humphress, Lina S. Knox, and Payne H. Midyette,
Jr. Mr. Midyette serves as the Compensation Committee's chairman. The
Compensation Committee meets periodically to evaluate the compensation
and fringe benefits of the Company's President and Chief Executive Officer,
and to recommend changes to the Board. This committee met four times in
fiscal year 1998.
Director Compensation
In 1998, the Company paid directors fees of $400 per meeting of the full
Board of Directors attended, plus a $2,500 retainer fee. Members of
committees of the Board of Directors are paid a fee of $50 per hour for each
meeting attended, and the chairman of each committee annually receives
an additional $1,000 chairman's fee. Directors who are officers of the
Company are not paid directors fees or a retainer. On February 23,
1996, the Company adopted the 1996 Director Stock Purchase Plan which, as of
January 1, 1997, gave directors of the Company the ability to purchase
shares of Common Stock at a 10% discount from fair market value, as
determined on January 1 of each year, in an amount not to exceed the
aggregate of their annual retainer and monthly fees received from their
service as directors in the previous calendar year.
Compensation Committee Report
The Compensation Committee is responsible for making recommendations to the
Board of Directors regarding compensation of Mr. William G. Smith, Jr., the
Company's President and Chief Executive Officer. The primary objective of
the Committee is to establish a level of total compensation which is
competitive while assuring it is reflective of the Company's performance.
Compensation should be designed to strengthen Company performance and
enhance Shareowner value. To achieve these objectives, the Company's
compensation program ties a significant portion of the President and Chief
Executive Officer's compensation to the Company's success in meeting
specified performance goals which the Committee believes enhances shareowner
value.
The Compensation Committee periodically engages an independent executive
compensation consultant to assist in its assessment and evaluation of the
appropriateness of the compensation of the President and Chief Executive
Officer. The Company has established a peer group of banks as a
guide for determining the level of compensation. The banks in the peer group
were chosen based on the similarities with the Company relative to size
and markets served.
It is the intention of the Company to maintain moderate increases in salary
and to provide additional opportunity through performance-based
incentives. During 1998, Mr. William G. Smith, Jr.'s compensation was based
upon earnings growth, stock price appreciation and other designated
financial performance measurements, including operating efficiency, asset
quality and growth.
A description of each of the major elements of Mr. William G. Smith, Jr.'s
1998 compensation and its specific relationship to corporate performance and
a summary of the decisions and actions taken by the Compensation Committee
with regard to his compensation are described below.
Base salary is determined principally by the responsibilities required by
the position, the experience of the individual, and the competitive
market. Mr. William G. Smith, Jr. was elected to serve as President and
Chief Executive Officer of the Company as of January 1, 1995. There has been
no adjustment to his base salary since 1993, although he has assumed
additional responsibilities during such time. Instead, Mr. William G. Smith,
Jr. has had the opportunity to earn additional compensation under various
performance-based compensation plans.
The profit participation plan enables executive officers to earn a cash
incentive based on the Company's and/or its subsidiaries' profitability
targets, established at the beginning of the year by the Board of Directors
for the Company and for each of its subsidiaries. The amount of cash
bonus which may be earned increases or decreases, within a range, by a
multiple of the percentage by which net income exceeds or falls short of the
established profit goals. The goals are based upon earnings performance.
The Committee believes improved earnings performance will translate into
long-term increases in Shareowner value.
Mr. William G. Smith, Jr.'s annual bonus under this plan was tied directly
to the Company's actual profitability for 1998 compared to targeted
profitability. It is the Committee's belief his performance and influence
are best measured by the Company's profitability and stock performance. In
1998, his incentive compensation represented 57% of his total cash
compensation.
Pursuant to the Company's 1996 Associate Incentive Plan (the "1996 Incentive
Plan"), Mr. William G. Smith, Jr. was eligible to earn shares of Common
Stock. Actual grants are determined by the Board based on the achievement
of short-term and long-term performance goals. These goals are set by
the Board with reference to several performance factors. The factors are
generally based on financial performance, including earnings, operating
efficiency, asset quality and growth.
Specific targets and weightings used for establishing short-term and
long-term performance goals are subject to change at the beginning of
each measurement period, and are influenced by the Board's desire to
emphasize performance in certain areas. In addition to stock earned in 1998,
the Company provided a cash bonus equal to 31% of the value of stock as a
partial offset to the tax liability incurred by Mr. William G. Smith, Jr.
On January 21, 1999, Mr. William G. Smith, Jr. received a payout of 535
shares under the Company's 1996 Incentive Plan, with a fair market
value as of December 31, 1998, of $27.625 per share, based upon the
achievement of predetermined short-term performance goals for 1998. The
opportunity at maximum performance was 972 shares.
During the five-year period, January 1, 1997 to December 31, 2001,
Mr. William G. Smith, Jr. is entitled to receive 22,500 shares of restricted
stock pursuant to the terms of an award granted under the 1996 Incentive
Plan. This restricted stock award vests in five 4,500-share increments as
the Company's stock meets certain price thresholds as provided in the award
agreement. Any shares received by Mr. Smith are subject to forfeiture if
Mr. Smith's employment is terminated under certain conditions and subject to
certain limitations during the five-year period. On December 19, 1997,
Mr. Smith was granted 18,000 shares of Common Stock in accordance with the
provisions of this award. As of such date, the closing price of the Common
Stock was $26.83 per share. On February 27, 1998, Mr. Smith received
the remaining 4,500 shares subject to this award. As of such date, the
closing price of the Common Stock was $29.25 per share.
The Committee believes that the executive compensation program described in
this Report serves the interests of the Shareowners and the Company.
Compensation is linked to individual and Company short- and long-term
performance objectives. The Committee will continue to ensure that the
compensation program, and each element therein, meets the Company's business
objectives and philosophy.
Compensation Committee
Cader B. Cox, III
John K. Humphress
Lina S. Knox
Payne H. Midyette, Jr.
EXECUTIVE OFFICERS, COMPENSATION AND OTHER INFORMATION
Executive Officers
Executive officers are elected annually by the Board of Directors of the
Company at its meeting following the Annual Meeting of Shareowners to
serve for a one year term and until their successors are elected and
qualified. Messrs. Ausley, Barron, Godfrey Smith and William G. Smith, Jr.
serve as directors and executive officers of the Company. For information
pertaining to the business experience and other positions held by these four
individuals, see "PROPOSAL ONE-ELECTION OF DIRECTORS-Information Regarding
Director Nominees, Continuing Directors and Executive Officers."
Transactions with Management and Related Parties
During 1998, Capital City Bank, a wholly-owned subsidiary of the Company,
had outstanding loans to certain of the Company's directors, executive
officers, their associates and members of the immediate families of such
directors and executive officers. These loans were made in the ordinary
course of business and were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with others. These loans do not involve more than the normal
risk of collectability or present other unfavorable features.
DuBose Ausley, Chairman of the Board, is Chairman of Ausley & McMullen,
the Company's general counsel. During 1998, the Company and the Company's
subsidiaries paid legal fees to this law firm of approximately $340,000.
Capital City Bank's Apalachee Parkway Office is located on land leased from
the Smith Interests General Partnership ("SIGP") in which Godfrey Smith,
William G. Smith, Jr., Robert H. Smith and Lina S. Knox are partners.
In addition, a trust for the benefit of Elaine W. Smith, Godfrey Smith's
sister-in-law, of which DuBose Ausley, Chairman of the Board, is trustee,
is also a partner of SIGP. As trustee of this trust, Mr. Ausley has the
power to vote the SIGP interests owned by the trust. Lease payments during
1998 from the Company to SIGP totaled approximately $65,000.
Executive Compensation
The following summary compensation table sets forth information concerning
compensation for services in all capacities earned or paid to the Company's
President and Chief Executive Officer and the three other executive officers
of the Company who earned over $100,000 in aggregate salary, bonus and other
compensation in the fiscal year ended December 31, 1998.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Annual Compensation Compensation
Name and Fiscal Other Annual Restricted LTIP
Principal Position Year Salary Bonus Compensation Stock Awards Payouts(1)
<S> <C> <C> <C> <C> <C> <C>
William G. Smith, Jr. 1998 $132,000 $190,108(2) $ 4,582(3) $131,625(4) $ -
President and Chief 1997 $132,000 $254,750(2) $ 51,075(3) $483,000(4) $145,962
Executive Officer 1996 $132,000 $230,580(2) $ 94,550(3) - $315,000
Thomas A. Barron 1998 $150,000 $174,038(2) $ 4,607(3) - -
Treasurer 1997 $150,000 $229,936(2) $48,535(3) - $145,346
1996 $150,000 $206,856(2) $65,068(3) - $210,000
Godfrey Smith 1998 $100,000 $ 75,000 - - -
Vice Chairman 1997 $100,000 $ 75,000 - - -
1996 $125,000 $ 75,000 - - -
J. Kimbrough Davis 1998 $115,000 $ 55,704(2) $ 2,295(3) - -
Executive Vice 1997 $105,000 $ 69,486(2) $22,861(3) - $ 64,962
President and Chief 1996 $ 99,999 $ 68,310(2) $ 5,015(3) - -
Financial Officer
(1) The dollar value of all payouts made pursuant to long-term performance
awards granted under the 1996 Incentive Plan.
(2) Includes cash bonuses and the dollar value of short-term incentive
stock awards.
(3) Consists of cash bonuses paid as a tax supplement to participants in the
1996 Incentive Plan.
(4) During the five-year period January 1, 1997 to December 31, 2001, Mr.
Smith is entitled to receive 22,500 shares of Common Stock as a
restricted stock award under the 1996 Incentive Plan. This award vests
in five 4,500-share increments as the Company's stock meets certain
price thresholds as provided in the award agreement. The shares
received by Mr. Smith are subject to forfeiture if Mr. Smith's
employment is terminated under certain conditions and subject to
certain limitations during the five-year period. On December 19, 1997,
Mr. Smith was granted 18,000 shares of Common Stock in accordance with
the provisions of this award. As of such date, the closing price of
the Common Stock was $26.83 per share. On February 28, 1998, Mr. Smith
received the remaining 4,500 shares subject to this award. As of such
date, the closing price of the Common Stock was $29.25 per share.
No long-term performance share units were awarded in 1998 to the Company's
President or any of the other named executive officers.
</TABLE>
1996 Associate Incentive Plan
The 1996 Incentive Plan was adopted by the Shareowners of the Company on
April 30, 1996. The 1996 Incentive Plan became effective on February 23,
1996, and awards may be made until December 31, 2005. Under the 1996
Incentive Plan, key associates of the Company who have been selected as
participants are eligible to receive awards in various forms of equity-based
incentive compensation, including stock options, stock appreciation rights,
restricted stock awards, performance share units and phantom stock, and
awards consisting of combinations of such incentives. The aggregate number
of shares of Common Stock made subject to awards under the 1996 Incentive
Plan may not exceed 750,000, subject to adjustment in certain circumstances.
The 1996 Incentive Plan is administered by the Board of Directors. The Board
has the authority, subject to the provisions of the 1996 Incentive Plan, to
establish, adopt or revise such rules and regulations and to make all such
determinations relating to the 1996 Incentive Plan as it may deem necessary
or advisable for the administration of the 1996 Incentive Plan.
The Board is authorized to establish long-term performance share programs to
be effective over designated award periods of not less than one year nor more
than five years. At the beginning of each award period, the Board establishes
in writing performance goals based upon financial or other objectives for the
Company for such award period. Performance goals may include financial or
other measures of corporate performance and may be determined on an individual
basis or by categories of participants. The Board has the discretionary
authority to adjust performance goals or performance measurement standards as
it deems equitable in recognition of extraordinary or non-recurring events
experienced during an award period by the Company or by any other corporation
whose performance is relevant to the determination of whether performance
goals have been attained. The Board determines the number of performance
share units to be awarded, if any, to each participant who is selected to
receive an award. The Board may add new participants to a performance share
program after its commencement by making pro rata grants. At the completion
of a performance share program, or at other times as specified by the Board,
the Board will calculate the number of shares earned with respect to each
participant's award by multiplying the number of performance share units
granted to the participant by a performance factor representing the degree of
attainment of the performance goals.
1995 Associate Stock Purchase Plan
The Company's 1995 Associate Stock Purchase Plan (the "1995 Purchase Plan")
was adopted by the Shareowners of the Company on April 26, 1995, and was
amended by the Board of Directors on February 27, 1998. The 1995 Purchase
Plan became effective on March 20, 1995. Up to 450,000 shares of Common
Stock may be purchased under the 1995 Purchase Plan, subject to adjustment
in certain circumstances. The purpose of the 1995 Purchase Plan is to
provide associates of the Company and its Designated Subsidiaries (as defined
in the 1995 Purchase Plan) who do not own 5% or more of all outstanding
Common Stock on a fully diluted basis (i.e., after taking into account
outstanding stock options and other Common Stock equivalents), with an
opportunity to purchase Common Stock of the Company through accumulated
payroll deductions or other contributions. The 1995 Purchase Plan is
intended to qualify as an "Employee Stock Purchase Plan" under Section 423
of the Internal Revenue Code of 1986, as amended (the "Code"). On February
27, 1998, the Board of Directors amended the 1995 Purchase Plan to delete
the one-year service requirement and to remove certain restrictions on
administration that had previously been required by Rule 16b-3 promulgated
under the Exchange Act prior to its amendment by the Securities and
Exchange Commission (the "Commission") in November 1996. Under the terms of
the 1995 Purchase Plan, the shares of the Common Stock purchased by
participants are purchased directly from the Company. The 1995 Purchase Plan
provides that Common Stock may be purchased at a discount, not to exceed 15
percent, which is to be fixed by the Board of Directors from time to time.
In fiscal year 1998, 24,416 shares of the Common Stock were purchased under
the 1995 Purchase Plan. The Board of Directors has the right to amend or
terminate the 1995 Purchase Plan at any time, provided that no such amendment
or termination may adversely affect purchase rights previously granted,
except that an offering period may be terminated by the Board of Directors
on any exercise date if the Board of Directors determines that the
termination of the 1995 Purchase Plan is in the best interests of the
Company and its Shareowners.
401(k) Profit Sharing Plan
On October 1, 1997, the Company adopted the 1997 Capital City Bank Group, Inc.
401(k) Profit Sharing Plan, as amended (the "401(k) Plan"). The purpose of
the 401(k) Plan is to serve as a supplementary retirement plan for employees
who are eligible to participate. It is primarily intended to provide a
convenient program of regular savings and investment for eligible employees.
The 401(k) Plan is presently administered by the Retirement Committee of
Capital City Bank, a wholly-owned subsidiary of the Company, and Capital City
Trust Company, an indirect wholly-owned subsidiary of the Company, serves as
trustee of the trust fund into which funds contributed under the 401(k) Plan
and the earnings thereof are held. One investment option provided by the
401(k) Plan is a fund of the Company's Common Stock. Up to 75,000 shares of
Common Stock may be purchased under the 401(k) Plan. During fiscal year 1998,
a total of 1,633 shares of Common Stock were issued under the 401(k) Plan.
Supplemental Employee Retirement Plan
In September 1995, the Board of Directors of the Company approved a
supplemental employee retirement plan (the "Supplemental Plan") for
Mr. William G. Smith, Jr. and Mr. Thomas A. Barron, effective as of January 1,
1996. The Supplemental Plan is designed to restore a portion of the
benefits of Messrs. Smith and Barron which they would otherwise receive under
the Retirement Plan (as hereinafter defined), but for limitations imposed
pursuant to provisions of the Code. In general, participants under the
Retirement Plan receive benefits determined pursuant to a formula which is
based on average monthly compensation. Because of the above-referenced
limitations, the relative benefits payable to Messrs. Smith and Barron, as a
percentage of total compensation under the Retirement Plan, are significantly
less than those of other Retirement Plan participants. The Supplemental Plan
provides additional benefits, which, when combined with benefits payable
under the Retirement Plan, approximate 60 percent of average monthly
compensation, which more closely aligns the benefits payable to
Messrs. Smith and Barron with those of other Retirement Plan participants.
The Supplemental Plan will not be a qualified plan under Section 401(a)
of the Code. The Company has no obligation to fund the Supplemental Plan
but will accrue for its anticipated obligations under the Supplemental
Plan on an annual basis.
Retirement Plan
The Company maintains a noncontributory, defined benefit retirement plan
(the "Retirement Plan") which covers all full-time associates (and certain
part-time associates with 1,000 hours of service annually) of the Company and
its subsidiaries. The following table sets forth annual retirement benefits
payable under the Retirement Plan to associates in the specified
period-of-service and compensation classifications, assuming the
participant was born in 1954 or later, all service is after 1988, and
retirement is at the age of 65.
<TABLE>
RETIREMENT PLAN TABLE
<CAPTION>
Estimated Annual Pension for
Representative Years of Service Credit(2)
Highest (Exclusive of Social Security Benefits)
Consecutive Five-Year
Average Salary(1) 10 Years 20 Years 30 Years
<S> <C> <C> <C>
$ 10,000 $ 1,900 $ 3,800 $ 5,700
20,000 3,800 7,600 11,400
30,000 5,900 11,900 17,800
40,000 8,200 16,400 24,600
50,000 10,500 21,000 31,500
60,000 12,800 25,500 38,300
70,000 15,000 30,100 45,100
80,000 17,300 34,700 52,000
90,000 19,600 39,200 58,800
100,000 21,900 43,800 65,700
125,000 27,600 55,200 82,800
150,000 33,300 66,600 99,900
160,000 35,600 71,100 106,700
(1) Maximum annual compensation recognized for benefit purposes for 1999 is $160,000.
(2) Maximum annual benefit permitted under IRS regulations for 1999 is $130,000.
</TABLE>
The Retirement Plan, which contains a five year vesting requirement,
provides monthly payments upon retirement at age 65 based generally upon the
average monthly compensation for the last five consecutive years in which
compensation washighest within the last ten years of employment, with
additional pre-retirement disability and death benefits. The Retirement
Plan includes profit participation payments as part of the compensation
covered therein. The 1998 compensation covered by the Retirement Plan for
each of the named executive officers was $400,567 for Mr. Barron, $190,702
for Mr. Davis, $175,000 for Mr. Godfrey Smith and $411,000 for Mr. William
G. Smith, Jr. As of December 31, 1998, Messrs. Barron, Davis, and William
G. Smith, Jr., had 24, 17 and 20 Years of credited service, respectively,
under the Retirement Plan. At December 31, 1998, Mr. Godfrey Smith had
61 years of service. On July 1, 1983, Mr. Godfrey Smith, being beyond the
age of 65, withdrew a portion of his vested benefits in a lump sum from the
Retirement Plan. On January 1, 1992, Mr. Godfrey Smith began receiving a
required minimum distribution of $5,061 per month.
Benefits are equal to the adjusted accrued benefits as of December 31, 1988,
computed in accordance with a prior formula, plus a percentage of average
monthly compensation for each year of service after 1988. Employees with
service prior to 1989 or born prior to 1955 will have different benefits
from those shown above, depending upon their year of birth, years of service
prior to 1989, and compensation level. No single table is possible for these
employees due to the multiple variables involved.
COMPARATIVE STOCK PERFORMANCE GRAPH
The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total Shareowner return on its Common Stock
over a five-year period with the cumulative Shareowner return of (i) a broad
equity market index and (ii) a published industry index or a peer group
selected by management. The chart below compares total return of the
Company's common stock over a five-year period with the NASDAQ - Total US
and the NASDAQ Bank Index.
The performance graph assumes an initial investment of $100 on December 31,
1993. This investment grows each year based on the total Shareowner returns
of the Company's Common Stock, the NASDAQ - Total US and the NASDAQ Bank
Index, in each case with dividends reinvested.
<TABLE>
<CAPTION>
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C>
Capital City Bank Group, Inc. $100.00 $140.55 $144.81 $264.06 $427.08 $443.79
NASDAQ - Total US $100.00 $ 97.75 $138.26 $170.01 $208.58 $293.21
NASDAQ Bank Index $100.00 $ 99.64 $148.38 $195.91 $328.02 $324.90
SNL Securities LC
Charlottsville, VA
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and any persons who beneficially own more than 10% of
the Common Stock, to file with the Securities and Exchange Commission initial
reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock. Such persons are also required by regulations of
the Securities and Exchange Commission to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely upon on a review of (i) copies of Section 16(a) filings received
by the Company during or with respect to the 1998 fiscal year and
(ii) certain written representations of its officers and directors with
respect to the filing of annual reports of changes in beneficial ownership
on Form 5, the Company believes that each filing required to be made pursuant
to Section 16(a) of the Exchange Act during the 1998 fiscal year has been
filed in a timely manner.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
certified public accountants, as the Company's independent auditors for the
fiscal year ending December 31, 1999. Arthur Andersen LLP has served as the
Company's independent auditors since the 1994 fiscal year.
It is contemplated that the services to be provided to the Company and its
subsidiaries by Arthur Andersen LLP with respect to fiscal year 1999 include
the audit of the Company's consolidated financial statements, limited reviews
of quarterly reports, services related to filings with the Securities and
Exchange Commission, preparation of the Company's tax returns and other
various consultation services.
Representatives of Arthur Andersen LLP may be present at the Meeting to
respond to appropriate questions and to make such statements as they may
desire.
Ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending December 31, 1999 will
require the affirmative vote of at least a plurality of the shares of Common
Stock represented in person or by proxy and voted at the Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
SHAREOWNERS' PROPOSALS
Shareowners who intend to submit proposals to the Company's Shareowners at
the 2000 Annual Meeting of Shareowners must submit such proposals to the
Company no later than December 11, 1999, in order to be considered for
inclusion in the Proxy Statement and Proxy to be distributed by the Board
of Directors in connection with that meeting. Proposals must comply with the
proxy rules relating to shareowner proposals in order to be included in the
Company's proxy materials. Shareowners who wish to submit a proposal for
consideration at the Company's 2000 Annual Meeting of Shareowners, but who
do not wish to submit the proposal for inclusion in the Company's Proxy
Statement pursuant to Rule 14a-8 as promulgated under the Exchange Act, must
submit their proposal to the Company no later than February 23, 2000.
Shareowner proposals should be submitted to J. Kimbrough Davis, Capital City
Bank Group, Inc., Post Office Box 11248, Tallahassee, Florida 32302.
MISCELLANEOUS
The Company has filed an annual report for the fiscal year ended December 31,
1998, on Form 10-K with the Commission. Shareowners may obtain, free of
charge, a copy of the Company's annual report on Form 10-K by writing to the
Chief Financial Officer at the Company's corporate address.
The Board of Directors knows of no other matters which will be brought
before the Meeting. Execution of the proxy, however, confers on the
designated proxy holders discretionary authority to vote the shares in
accordance with the decision of the Board of Directors on other business, if
any, that may properly come before this meeting or any adjournments thereof.
For the Board of Directors,
/s/ J. Kimbrough Davis
J. KIMBROUGH DAVIS
Corporate Secretary
Tallahassee, Florida
April 7, 1999
