SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e) (2))
REPUBLIC SECURITY FINANCIAL CORPORATION
(Name of Registrant as Specified in Its Charter)
REPUBLIC SECURITY FINANCIAL CORPORATION
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) 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:
[ ] 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>
REPUBLIC SECURITY FINANCIAL CORPORATION
450 SOUTH AUSTRALIAN AVENUE
WEST PALM BEACH, FL 33401
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2000
----------------
To our Shareholders:
The 2000 Annual Meeting of Shareholders of Republic Security Financial
Corporation will be held at The Palm Beach Airport Hilton, 150 Australian
Avenue, West Palm Beach, Florida, on Wednesday, April 26, 2000, beginning at
3:00 p.m. local time. At the meeting, shareholders will act on the following
matters:
(1) Election of five directors, each for a term of three years; and
(2) Any other matters that properly come before the meeting.
Shareholders of record at the close of business on February 28, 2000 are
entitled to vote at the meeting or any postponement or adjournment.
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO ENSURE YOUR
REPRESENTATION AT THE MEETING, PLEASE COMPLETE AND PROMPTLY MAIL YOUR PROXY IN
THE PREPAID RETURN ENVELOPE PROVIDED. THIS WILL NOT PREVENT YOU FROM VOTING IN
PERSON, SHOULD YOU SO DESIRE. SHAREHOLDERS HOLDING STOCK IN BROKERAGE ACCOUNTS
("STREET NAME" HOLDERS) WILL NEED TO BRING A COPY OF A BROKERAGE STATEMENT
REFLECTING STOCK OWNERSHIP AS OF THE RECORD DATE. CAMERAS, RECORDING DEVICES
AND OTHER ELECTRONIC DEVICES WILL NOT BE PERMITTED AT THE MEETING.
By order of the Board of Directors,
/s/ Alissa E. Ballot
Alissa E. Ballot
Secretary
March 23, 2000
West Palm Beach, Florida
<PAGE>
TABLE OF CONTENTS
PAGE
----
ABOUT THE MEETING ....................................................... 1
What is the purpose of the Annual Meeting? .............................. 1
Who is entitled to vote? ................................................ 1
Who can attend the meeting? ............................................. 1
What constitutes a quorum? .............................................. 1
How do I vote? .......................................................... 1
Can I change my vote after I return my proxy card? ...................... 2
What are the Board's recommendations? ................................... 2
What vote is required to approve each item? ............................. 2
Do the Company's directors or executive officers have a personal interest
in the outcome of any proposal? ........................................ 2
STOCK OWNERSHIP ......................................................... 3
Who are the largest owners of the Company's stock? ...................... 3
How much stock do the Company's directors and executive officers own? ... 3
ITEM 1--ELECTION OF DIRECTORS ........................................... 5
Directors standing for election ......................................... 5
Directors continuing in office .......................................... 6
How are directors compensated? .......................................... 7
How often did the Board meet during 1999? ............................... 8
What Committees has the Board established? .............................. 8
Certain relationships and related transactions .......................... 9
Management Indebtedness to the Bank ..................................... 9
Who are the Company's and the Bank's executive officers? ................ 10
Executive Compensation .................................................. 11
Report of the Compensation Committee .................................... 11
Compensation Committee Interlocks and Insider Participation ............. 13
Employment Agreements ................................................... 13
Change of Control Agreements ............................................ 15
Executive Compensation Summary Table .................................... 15
Option Grants for 1999 .................................................. 17
Option and SAR Exercises and Values for 1999 ............................ 18
Supplemental Executive Retirement Plan .................................. 18
Stock Performance ....................................................... 19
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT ....................... 21
WHO IS THE COMPANY'S INDEPENDENT AUDITOR? ............................... 21
OTHER MATTERS ........................................................... 21
ADDITIONAL INFORMATION .................................................. 21
i
<PAGE>
REPUBLIC SECURITY FINANCIAL CORPORATION
450 S. AUSTRALIAN AVENUE
WEST PALM BEACH, FLORIDA 33401
----------------
PROXY STATEMENT
----------------
This proxy statement contains information related to the Annual Meeting of
Shareholders of Republic Security Financial Corporation (the "Company"), the
holding company for Republic Security Bank (the "Bank"), to be held on
Wednesday, April 26, 2000, beginning at 3:00 p.m., at The Palm Beach Airport
Hilton, 150 Australian Avenue, West Palm Beach, Florida, and at any
postponements or adjournments thereof. We are first mailing this proxy
statement to our shareholders on or about March 23, 2000.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Company's Annual Meeting, shareholders will act upon the matters
outlined in the accompanying notice of meeting, including the election of five
directors for three-year terms. In addition, the Company's management will
report on the performance of the Company during 1999 and respond to questions
from shareholders.
WHO IS ENTITLED TO VOTE?
Only shareholders of record at the close of business on the record date,
February 28, 2000, are entitled to receive notice of the Annual Meeting and to
vote the shares of common stock that they held on that date at the meeting, or
any postponement or adjournment of the meeting. Each outstanding share entitles
its holder to cast one vote in the election of each director and one vote on
each other matter to be voted upon.
WHO CAN ATTEND THE MEETING?
All shareholders as of the record date, or their duly appointed proxies,
may attend the meeting. Each shareholder may be asked to present valid picture
identification, such as a driver's license or passport. Cameras, recording
devices and other electronic devices will not be permitted at the meeting. A
list of shareholders entitled to notice of and to attend the meeting will be
available for inspection by any shareholder, during regular business hours, for
a period of ten days before the meeting at the principal executive offices of
the Company. The list will also be available at the Annual Meeting.
Please note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a
brokerage statement reflecting your stock ownership as of the record date and
check in at the registration desk at the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. As of the
record date, 48,787,269 shares of common stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be
included in the calculation of the number of shares considered to be present at
the meeting.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return
it to the transfer agent (as agent for the Company), it will be voted as you
direct. If you are a registered shareholder
<PAGE>
and attend the meeting, you may deliver your completed proxy card in person.
"Street name" shareholders who wish to vote at the meeting will need to obtain
a proxy form from the institution that holds their shares.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised by filing with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not
by itself revoke a previously granted proxy.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board's recommendation is set
forth together with the description of each item in this proxy statement. In
summary, the Board recommends a vote:
FOR election of the nominated slate of directors (see pages 5-6).
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of directors. A properly
executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of one
or more directors will not be voted with respect to the director or directors
indicated, although it will be counted for purposes of determining whether
there is a quorum.
OTHER ITEMS. There are no other items expected to be presented at the
meeting. However, should there be any other matter properly brought before the
meeting, the affirmative vote of the holders of a majority of the shares
represented in person or by proxy and entitled to vote on the matter will be
required for approval. A properly executed proxy marked "ABSTAIN" with respect
to any such matter will not be voted, although it will be counted for purposes
of determining whether there is a quorum. Accordingly, an abstention will have
the effect of a negative vote.
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee will be permitted to exercise voting discretion
with respect to the matters to be acted upon. If you do not give your broker or
nominee specific instructions and your broker submits a signed proxy card that
does not give specific instructions for your shares, your shares will be voted
as the Board recommends on those matters and will be counted in determining the
number of shares necessary for approval. Shares represented by such "broker
non-votes" will, in addition, be counted in determining whether there is a
quorum.
DO THE COMPANY'S DIRECTORS OR EXECUTIVE OFFICERS HAVE A PERSONAL INTEREST IN
THE OUTCOME OF ANY PROPOSAL?
The Company's directors and executive officers have no personal interest
in the outcome of any proposal.
2
<PAGE>
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF THE COMPANY'S STOCK?
The Company knows of no single person or group that is the beneficial
owner of more than 5% of the Company's common stock.
HOW MUCH STOCK DO THE COMPANY'S DIRECTORS AND
EXECUTIVE OFFICERS OWN?
The following table shows the amount of common stock of the Company
beneficially owned (unless otherwise indicated) by the Company's directors, the
executive officers of the Company named in the Summary Compensation Table below
and the directors and executive officers of the Company as a group.
Each named individual and the members of the group are deemed to
beneficially own all shares over which they possess sole or shared voting or
dispositive power and an additional number of shares over which they may,
within 60 days after March 16, 2000, acquire sole or shared voting or
dispositive power, by exercise of a stock option or other existing contract
right. Except as otherwise indicated, all information is as of March 16, 2000
and each named individual has the sole power to vote and the sole power to
dispose of the shares he or she is deemed to beneficially own. The address of
all named individuals is c/o Republic Security Financial Corporation, 450 South
Australian Avenue, West Palm Beach, Florida 33401.
STOCK OWNERSHIP(17)
<TABLE>
<CAPTION>
AMOUNT AND NATURE AMOUNT OF SHARES PERCENT OF SHARES
OF SHARES ACQUIRABLE WITHIN OF COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED 60 DAYS(2) OUTSTANDING(3)
- ------------------------------------- -------------------- ------------------- ------------------
<S> <C> <C> <C>
Johnny Adcock ....................... 93,608(4) 0 *
Paula Berliner ...................... 189,732(5) 86,130 *
Thomas F. Carney .................... 568,221 25,000(16) 1.22%
Joseph D. Cesarotti, Sr. ............ 70,538(6) 107,797(16) *
Louis J. Dunham ..................... 5,141 16,666 *
Mary Anna Fowler .................... 109,297 25,000(16) *
H. Gearl Gore ....................... 97,510(7) 36,119 *
Fred A. Greene ...................... 20,134(8) 96,548 *
R. Randy Guemple .................... 161,446 3,333 *
Richard J. Haskins .................. 72,161 28,794 *
Eugene W. Hughes .................... 116,213(9) 86,130 *
Thomas J. Langan, Jr. ............... 7,895(10) 25,000(16) *
Lennart E. Lindahl, Jr. ............. 86,938(11) 48,247 *
Mary A. McCarty ..................... 4,322(12) 3,333 *
Carol R. Owen ....................... 200,503(13) 86,130 *
Richard C. Rathke ................... 112,461 48,247 *
Roger Savage ........................ 2,426 5,000 *
Rudy E. Schupp ...................... 118,168(14) 69,652 *
Daniel O. Sokoloff .................. 23,227 58,903 *
William F. Spitznagel ............... 259,868(15) 25,000(16) *
R. Michael Strickland ............... 9,901 16,666 *
Bruce E. Wiita ...................... 104,469 48,247 *
William Wolfson ..................... 9,132 30,250(16) *
All Directors and Executive Officers
as a group (27 persons)(1) ......... 2,723,368 1,046,729 7.57%
<FN>
- ----------------
* Represents less than 1% of the Company's outstanding common stock.
3
<PAGE>
(1) For all directors and executive officers as a group, includes 204,320
shares held in the Company's 401(k) Plan as of December 31, 1999, as to
which Mr. Haskins, as one of two trustees, shares voting and dispositive
power, although Mr. Haskins has indicated that he will not participate in
voting such shares with respect to his own re-election as a director. Mr.
Haskins has a pecuniary interest in 7,848 of such shares, which are
allocated to his account. For other executive officers, does not include
any shares held in the 401(k) Plan, as to which such officers have a
pecuniary interest in the shares allocated to their accounts, but no
voting and limited dispositive power. Includes 4,438 shares held by HSBC
as trustee of the First Bank of Florida Employee Stock Ownership Plan, as
to which one executive officer has voting but no dispositive power.
(2) Reflects the number of shares that could be purchased by exercise of
options and warrants available at March 16, 2000 or within 60 days
thereafter under the Company's 1997 Performance Incentive Plan or other
option or warrant grants.
(3) Based on the number of shares outstanding at March 16, 2000 plus, in the
case of each individual and the group, the number of additional shares
listed in the column headed "Acquirable within 60 days" for that
individual or group.
(4) Mr. Adcock shares voting and dispositive power on all but 2,800 of such
shares with his spouse.
(5) Ms. Berliner shares voting and dispositive power over such shares with her
spouse as co-trustees of two trusts.
(6) 35,269 of such shares are held by Mr. Cesarotti's spouse, who has sole
voting and dispositive power.
(7) 4,787 of such shares are held by Mr. Gore's spouse, who has sole voting
and dispositive power. In addition, Mr. Gore shares voting and dispositive
power over 87,193 of such shares with his spouse.
(8) Mr. Greene shares voting and dispositive power over 8,000 of such shares
with his spouse, with whom he is co-trustee of a revocable trust for the
benefit of his spouse.
(9) 706 of such shares are held by Mr. Hughes' spouse, who has sole voting and
dispositive power.
(10) 2,000 of such shares are held jointly with Mr. Langan's spouse, with whom
he shares voting and dispositive power.
(11) 13,125 of such shares are held jointly with Mr. Lindahl's spouse, with
whom he shares voting and dispositive power, and 2,521 of such shares are
held by Mr. Lindahl's spouse, who has sole voting and dispositive power.
(12) 4,000 of such shares are held by Ms. McCarty's spouse, who has sole voting
and dispositive power.
(13) 11,791 of such shares are held by Mr. Owen's spouse, who has sole voting
and dispositive power.
(14) 2,586 of such shares are held by Mr. Schupp's spouse, who has sole voting
and dispositive power.
(15) 109,061 of such shares are held by Mr. Spitznagel's spouse, who has sole
voting and dispositive power.
(16) Includes options which vest upon retirement immediately prior to the
Annual Meeting.
(17) In addition to the Company's common stock, each individual listed holds
one share, and the group holds 27 shares in the aggregate, of the 8.5%
Preferred Stock of RS Asset Management Corp., a third-tier subsidiary of
the Company. Each individual has sole dispositive power over such share
and no voting power, except in the limited circumstances in which such
shares have the right to vote. Of the 120 shares of outstanding Preferred
Stock not owned by subsidiaries of the Company, the group owns 22.5%.
</FN>
</TABLE>
4
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
DIRECTORS STANDING FOR ELECTION
The Board of Directors of the Company, which is currently comprised of 20
members, is divided into three classes, each having three-year terms that
expire in successive years. Six members of the Company's Board, Thomas Carney,
Joseph Cesarotti, Sr., Mary Anna Fowler, Thomas Langan, William Spitznagel and
William Wolfson, have indicated their intention to retire from the Board
effective immediately prior to the Company's Annual Meeting in 2000. The Board
has adopted an amendment to the Company's Bylaws, effective immediately
preceding the 2000 Annual Meeting, reducing the size of the Board to 14
members. Classes 1 and 3 will thereupon have five members each, and Class 2
will have four members. All members of the Company's Board are also members of
the Board of Directors of the Bank, whose Board will also be reduced to 14
members upon the retirement of the directors listed above.
The current three-year term of office of directors in Class 1 expires at
the 2000 Annual Meeting. The Board of Directors proposes that the nominees
described below, who are currently serving as Class 1 directors, be elected to
Class 1 for a new term of three years and until their successors are duly
elected and qualified.
Each of the nominees has consented to serve the terms indicated. If any of
them should become unavailable to serve as a director, the Board may designate
a substitute nominee. In that case, the persons named as proxies will vote for
the substitute nominee designated by the Board.
THE DIRECTORS STANDING FOR ELECTION ARE:
CLASS 1 DIRECTORS:
R. RANDY GUEMPLE Director since 1998
Mr. Guemple, 48, served as a director of First Palm Beach Bancorp, Inc.
("FFPB") from 1997 to 1998, when FFPB merged into the Company. Mr. Guemple also
served as Executive Vice President and Chief Operating Officer of FFPB and its
subsidiary, First Bank of Florida, from July, 1996 until the merger. Mr.
Guemple served as Senior Vice President, Treasurer and Chief Financial Officer
of FFPB and First Bank of Florida from 1992 to July 1996. Under the Agreement
and Plan of Merger by which the Company acquired FFPB, each of the three
directors added at the time of the acquisition (Messrs. Guemple and Greene and
Dr. Sokoloff) whose initial term expires before 2001 is expected to be
nominated for election to serve an additional term of three years following the
expiration of his initial term.
RICHARD J. HASKINS Director since 1986
Richard J. Haskins, 50, has been Senior Executive Vice President and Chief
Financial Officer of the Company and the Bank since January 1999. Mr. Haskins
had been Executive Vice President and Chief Financial Officer of the Company
and the Bank since 1989 and Senior Vice President of the Company and the Bank
since 1984. For ten years prior to 1984, Mr. Haskins had been an accountant
with the West Palm Beach, Florida office of Deloitte, Haskins & Sells,
certified public accountants, where he held the position of Manager.
EUGENE W. HUGHES Director since 1997
Mr. Hughes, 67, was a director of Family Bank from 1986 until its merger
into the Bank in 1997. Mr. Hughes, who is currently retired, served as Chief
Financial Officer of Family Bank from 1988 to 1994.
5
<PAGE>
LENNART E. LINDAHL, JR. Director since 1983
Mr. Lindahl, 56, has been Chairman of the Board of Lindahl, Browning,
Ferrari & Hellstrom, Inc., Consulting Engineers, in West Palm Beach, Florida
since 1994. From 1970 to 1994, Mr. Lindahl served as President of that firm. He
is a past Chairman of the Economic Council of Palm Beach County and a past
president of the Palm Beach County Development Board. Additionally, he served
as a member and past Chairman of the Florida Inland Navigation District.
BRUCE E. WIITA, M.D. Director since 1983
Dr. Wiita, 62, has been a surgeon and urologist practicing in Jupiter and
Palm Beach Gardens, Florida since 1973. He is the former Chief of Staff of the
Jupiter Hospital and Chief of Surgery of the Palm Beach Gardens Hospital and
Jupiter Hospital. Currently, he is a director of the American Heritage
Management and Development Corporation, a real estate development company, and
Chairman of the DevMed Group Inc., a medical device manufacturing company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION AS
DIRECTORS OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
DIRECTORS CONTINUING IN OFFICE:
CLASS 2 DIRECTORS. The following Class 2 directors have terms ending in 2001:
PAULA BERLINER Director since 1997
Ms. Berliner, 56, was a director of Family Bank from 1986 until its merger
with the Bank in 1997. Ms. Berliner has been Vice President and director of
Acorn Holding Corp., a public venture capital company traded on the Nasdaq
Small-Cap Market, since 1992. Prior to that, Ms. Berliner was Vice President
and a director of Broward Window Products, Inc., a company specializing in the
sale of window-related products.
H. GEARL GORE Director since 1983
Mr. Gore, 52, served as Secretary of the Company from 1983 until 1998. He
has been the President of H. Gearl Gore, Inc., a real estate appraisal firm in
Jupiter, Florida since 1983. Mr. Gore has been the President and Chief
Operating Officer of Northco Investment Properties, Inc., a real estate
brokerage firm in Jupiter, Florida, from 1981 to the present.
FRED A. GREENE Director since 1998
Mr. Greene, 68, served as a director of FFPB from 1984 to 1998, when FFPB
merged into the Company. Mr. Greene has served as a director, Chairman of the
Board, President and Chief Executive Officer of Gee & Jenson, Engineers,
Architects & Planners, Inc. since 1990, and has been a civil engineer with such
company since 1956. Under the Agreement and Plan of Merger by which the Company
acquired FFPB, each of the three directors added at the time of the acquisition
whose initial term expires before 2001 is expected to be nominated for election
to serve an additional term of three years following the expiration of his
initial term.
MARY MCCARTY Director since 1997
Ms. McCarty, 45, was a director of CFC and County from May 1997 until
CFC's merger into the Company in December 1997. Ms. McCarty was elected to
District IV Palm Beach County Commission in November 1990 and continues to
serve in such position. She was elected Chair of the Palm Beach County
Commission in November of 1992.
6
<PAGE>
CLASS 3 DIRECTORS: The following Class 3 directors have terms ending in
2002:
JOHNNY ADCOCK Director since 1999
Mr. Adcock, 55, became a director of the Company following the merger of
Northside Bank of Tampa ("Northside") into the Bank in February 1999. Mr.
Adcock had been a director of Northside since 1989 and was serving as Chairman
of the Board at the time of the merger. Mr. Adcock is also a member of the
University Community Hospital Foundation Board of Trustees and the University
Community Hospital Board of Trustees, both in Tampa, Florida. Mr. Adcock has
been President and a director of the Adcock Financial Group, which focuses in
the estate planning and executive fringe benefit areas, since 1967. Mr.
Adcock's experience is in the fields of insurance, investment and financial
planning. Mr. Adcock is also a director of Partners Financial Group, a
registered investment company in Austin, Texas.
CAROL R. OWEN Director since 1997
Mr. Owen, 64, has served as Chairman of the Board, Broward County, of the
Bank since it acquired Family Bank in June 1997. Prior to that time Mr. Owen
was a director, Chief Executive Officer and President of Family Bank since its
inception in 1986.
RICHARD C. RATHKE Director since 1983
Mr. Rathke, 68, has been the President of RCR Enterprises, Inc., a real
estate development firm in Jupiter, Florida, since 1979.
RUDY E. SCHUPP Director since 1984
Mr. Schupp, 49, has been Chairman of the Board, President and Chief
Executive Officer of the Company since 1985, and Chairman of the Board,
President and Chief Executive Officer of the Bank since 1984. Mr. Schupp is
also a director of Florida Public Utilities Corp., a public company whose
shares are listed on the American Stock Exchange, and of the Miami Branch of
the Federal Reserve Bank.
DANIEL O. SOKOLOFF, M.D. Director since 1998
Dr. Sokoloff, 48, served as a director of FFPB from 1996 to 1998, when
FFPB merged into the Company. Dr. Sokoloff has been a dermatologist in West
Palm Beach, Florida since 1982. Under the Agreement and Plan of Merger by which
the Company acquired FFPB, each of the three directors added at the time of the
acquisition whose initial term expires before 2001 is expected to be nominated
for election to serve an additional term of three years following the
expiration of his initial term.
HOW ARE DIRECTORS COMPENSATED?
BASE COMPENSATION. In 1999 each non-employee director received a retainer
based on an annualized rate of $3,840, together with a fee of $1,080 per
regular quarterly Board meeting attended. All Company directors are also
directors of the Bank, and directors are separately compensated for their
service on the Bank Board at an annualized rate of $6,804, together with a fee
of $333 per Board meeting attended. Committee fees during the period January 1,
1999-July 21, 1999 were $300 per Committee meeting attended ($350 per meeting
for the Chairman of the Committee). Effective for meetings after July 21, 1999,
Committee fees were raised to $350 per Committee meeting attended ($450 for the
Chairman of the Committee) for meetings held on the same day as regular Board
meetings, and $450 per Committee meeting attended ($550 for the Chairman of the
Committee) for meetings held on other days. Effective for meetings after
December 31, 1999, Committee fees were raised to $400 per Committee meeting
attended ($500 for the Chairman of the Committee) for meetings held on the same
day as regular Board meetings, and $500 per Committee meeting attended ($600
for the Chairman of the Committee) for meetings held on other days. Directors
who are also employees of the Company or the Bank receive no additional
compensation for service as directors.
7
<PAGE>
OPTIONS. In November 1999 each non-employee director then serving on the
Board was granted options to purchase 7,500 shares of the common stock of the
Company at an exercise price of $8.3125 per share under the Company's 1997
Performance Incentive Plan. Such options have a term of ten years and one-third
of the total number of options become exercisable on each of November 3, 2000,
November 3, 2001 and November 3, 2002. Such options, along with all other
previously non-vested options, vest upon retirement from the Board.
DIRECTORS RETIREMENT PLAN. In 1997 the Bank established a non-qualified
unfunded retirement plan for non-employee directors ("Directors Retirement
Plan"). To be eligible a director must be specifically included in the
Directors Retirement Plan by action of the Board, and to vest in benefits a
director generally must have served at least five years on the Bank's Board
prior to retirement. The annual benefit under the Directors Retirement Plan is
a percentage of the fees that would have been paid to the director for the full
calendar year in which the director terminates service, with such percentage
being calculated by multiplying 5% times the director's years of service
(including for this purpose service with any predecessor Board), with a maximum
of 75%. Such benefit will be paid for a total of 180 months.
HOW OFTEN DID THE BOARD MEET DURING 1999?
The Company's Board of Directors, which has regular meetings quarterly,
met 6 times during 1999, including 2 special meetings. The Bank's Board met 12
times during 1999. Each director attended more than 75% of the total number of
meetings of the Board and Committees on which he or she served, except for
Johnny Adcock, who, after joining the Board in March 1999, attended all of the
Company's Board meetings but only 64% of the combined meetings of the Company's
Board, the Bank's Board and the Trust Committee.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Company's Board of Directors has standing Executive, Compensation and
Audit Committees. The Board as a whole acted as the Nominating Committee in
connection with the nomination of directors for election at the 2000 Annual
Meeting.
BOARD COMMITTEE MEMBERSHIP
<TABLE>
<CAPTION>
NAME EXECUTIVE COMMITTEE AUDIT COMMITTEE COMPENSATION COMMITTEE
- ------------------------------- --------------------- ----------------- -----------------------
<S> <C> <C> <C>
Paula Berliner ................ * *
Thomas Carney ................. *
Mary Anna Fowler .............. *
H. Gearl Gore ................. *
R. Randy Guemple .............. *
Eugene Hughes ................. *
Thomas Langan, Jr. ............ *
Lennart Lindahl, Jr. .......... * **
Carol R. Owen ................. *
Richard Rathke ................ *
Rudy E. Schupp ................ **
William Spitznagel ............ *
Bruce E. Wiita ................ *
William Wolfson ............... **
<FN>
- ----------------
* Member.
** Chair.
</FN>
</TABLE>
EXECUTIVE COMMITTEE. The Executive Committee possesses all of the powers
of the Board except the power to approve or recommend to shareholders actions
required by law to be
8
<PAGE>
approved by shareholders, fill vacancies on the Board or any committees, amend
or repeal the bylaws, authorize or approve stock buybacks except in certain
circumstances, or issue stock, and certain other powers specifically reserved
by Florida law to the Board. In 1999, the Executive Committee held 8 meetings.
COMPENSATION COMMITTEE. The Compensation Committee is charged with
reviewing the Company's and the Bank's general compensation strategy;
establishing salaries and reviewing benefit programs for the Chief Executive
Officer and the other members of the Bank's Management Executive Committee;
reviewing, approving, recommending and administering the Company's 1997
Performance Incentive Plan (in its capacity as the Performance Incentive Plan
Committee); and approving certain employment and change of control agreements.
In 1999, the Compensation Committee met 5 times.
AUDIT COMMITTEE. The Audit Committee reviews, reports to and advises the
Board with respect to various auditing and accounting matters involving the
selection of and the nature of the services to be performed by the Company's
independent auditors, the performance of the independent and internal auditors
and the fees to be paid to the independent auditors, the scope of audit
procedures and the Company's accounting procedures and internal controls. The
Audit Committee met 4 times during 1999.
In addition, the Board of the Bank has established a Loan Committee, a
Trust Committee and an Asset/Liability Committee. With respect to these Bank
Committees, Messrs. Lindahl (Chair), Gore, Haskins, Owen, Rathke and Schupp
serve on the Loan Committee; Messrs. Guemple (Chair), Haskins, Hughes, Langan,
Schupp and Wolfson serve on the ALCO/Investment Committee and Messrs. Hughes
(Chair), Adcock, Langan, Spitznagel, Cesarotti and Wolfson, and Mss. Fowler and
McCarty, serve on the Trust Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Owen provides consulting services to the Company and the Bank in his
capacity as Broward County Chairman. During 1999, the Company and the Bank paid
Mr. Owen an aggregate of $61,344 for these services.
MANAGEMENT INDEBTEDNESS TO THE BANK
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
requires that all loans or extensions of credit to executive officers and
directors must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. In addition, loans
made to a director or executive officer in excess of the greater of $25,000 or
5% of the Bank's capital and surplus (up to a maximum of $500,000) must be
approved in advance by a majority of the disinterested members of the Board of
Directors.
All loans made by the Bank to its directors and executive officers were
made in the ordinary course of business, were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and did not involve more than
the normal risk of collectibility or present other unfavorable features, except
for the following loan, which, at the time it was made, complied with all
applicable laws and regulations and Bank policies:
<TABLE>
<CAPTION>
LARGEST AMOUNT
OUTSTANDING
DURING THE YEAR BALANCE INTEREST RATE AT
OFFICER AND/OR DIRECTOR PURPOSE ENDED 12/31/99 12/31/99 12/31/99
- ------------------------- -------------------- ----------------- ---------- -----------------
<S> <C> <C> <C> <C>
H. Gearl Gore ........... Personal residence $159,777 $154,175 4.50%
</TABLE>
9
<PAGE>
WHO ARE THE COMPANY'S AND THE BANK'S EXECUTIVE OFFICERS?
The following individuals are the executive officers of the Company and/or
the Bank and hold the offices set forth below opposite their names.
<TABLE>
<CAPTION>
NAME AGE POSITIONS HELD
- ----------------------- ----- ----------------------------------------------------
<S> <C> <C>
Rudy E. Schupp 49 Chairman of the Board, President and
Chief Executive Officer of the Company and the Bank
Richard J. Haskins 50 Senior Executive Vice President and
Chief Financial Officer of the Company and the Bank
Louis J. Dunham 46 Senior Executive Vice President and
Chief Credit Officer of the Bank
Carla H. Pollard 35 Senior Executive Vice President and
Chief Information Officer of the Bank
R. Michael Strickland 49 Senior Executive Vice President and
Chief Banking Officer of the Bank
Alissa E. Ballot 44 Senior Vice President and Secretary of the Company
and Senior Vice President for Legal Affairs and
Secretary of the Bank
Bruce M. Keir 47 Market President--Broward County of the Bank
W. Andrew Kirkman 45 Market President--Central Florida of the Bank
Roger P. Savage 53 Market President--Dade County of the Bank
</TABLE>
The executive officers of the Company and the Bank are elected annually
and hold office until their respective successors have been elected and
qualified or until their earlier resignation or removal. The Company and/or the
Bank have entered into Employment Agreements and/or Change of Control
Agreements with the executive officers which set forth certain terms of such
officers' employment. These are discussed in more detail later in this proxy
statement.
Biographical information about the executive officers of the Company
and/or the Bank who are not directors is set forth below.
Louis J. Dunham joined the Bank as its Senior Executive Vice President and
Chief Credit Officer on February 26, 1999. Prior to that time, Mr. Dunham
served as the Executive Vice President and Chief Credit Officer of Vermont
National Bank from May 1991 until February 1999.
Carla H. Pollard has been Senior Executive Vice President and Chief
Information Officer of the Bank since February 2000. Prior to that time, she
served as Senior Vice President and Controller of the Company and the Bank from
March 1999 to February 2000, and as Vice President and Controller of the
Company and the Bank from June 1994 until March 1999. Before joining the
Company and the Bank, she was a certified public accountant with the accounting
firm of KPMG Peat Marwick for four years.
R. Michael Strickland joined the Bank as its Senior Executive Vice
President and Chief Banking Officer on February 16, 1999. Prior to that time,
Mr. Strickland was the Palm Beach County Market President for NationsBank from
the time it merged with Barnett Bank in January 1998 until February 1999, and
was the CEO of Barnett Bank of Palm Beach County from July 1985 until January
1998.
Alissa E. Ballot has been the Senior Vice President and Secretary of the
Company and the Senior Vice President for Legal Affairs and Secretary of the
Bank since October 1998, when FFPB merged into the Company and its subsidiary,
First Bank of Florida, merged into the Bank. Ms. Ballot had served as Senior
Vice President for Legal Affairs for First Bank of Florida from October 1997
until the merger, and as Vice President--Legal of First Bank of Florida from
April to October 1997. Prior thereto Ms. Ballot was the General Counsel of
North Side Savings Bank in Floral Park, New York from April 1992 until its
merger into North Fork Bank in December 1996.
10
<PAGE>
Bruce Keir has been Market President--Broward County of the Bank since
June 1997, when Family Bank merged into the Bank. Prior to that time, he had
served as the Executive Vice President of Family Bank for six years.
W. Andrew Kirkman has been Market President--Central Florida of the Bank
since January 2000. Prior to that time he had served as Senior Vice
President--Personal Banking of the Bank since August 1995. Prior thereto he
served as Vice President and Hub Manager for First Union Bank for ten years.
Roger P. Savage has been Market President-Dade County of the Bank since
December 1999. Prior thereto he had served as Senior Vice President-Business
Banking of the Bank since September 1992.
EXECUTIVE COMPENSATION
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPHS INCLUDED ELSEWHERE IN THIS PROXY STATEMENT DO NOT CONSTITUTE SOLICITING
MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY
OTHER COMPANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY
INCORPORATES THIS REPORT OR THE PERFORMANCE GRAPHS BY REFERENCE THEREIN.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for 1999.
WHAT IS THE COMPANY'S GENERAL POLICY WITH RESPECT TO
EXECUTIVE OFFICER COMPENSATION?
The Board Compensation Committee is responsible for making recommendations
to the Company's and the Bank's Boards of Directors as to compensation of the
Company's and the Bank's executive officers who serve on the Management
Executive Committee (currently Messrs. Schupp, Dunham, Haskins and Strickland
and Ms. Pollard), while compensation decisions with respect to executive
officers who do not serve on such committee are delegated to the appropriate
member of such committee. In addition, the Compensation Committee makes
recommendations to the Boards of Directors as to outside director compensation,
company-wide benefit programs, including the Company's 1997 Performance
Incentive Plan, 401(k) program and employee stock purchase program, and
executive employment agreements and retirement plans. For executive
compensation, the Compensation Committee bases its decisions primarily on its
overall assessment of the executive's contribution to the profitability of the
Company and the Bank on both a long-term and short-term basis, the executive's
performance in connection with the overall and specific strategic and tactical
plans in the prior year, and an assessment of the executive's role in ensuring
the overall financial success of the Company and the Bank in future periods. In
this respect, the Compensation Committee seeks to reward leadership,
innovation, strategic and tactical achievements and entrepreneurship. In its
deliberations, the Compensation Committee generally does not perform a rote
application of specific criteria, and its decisions are necessarily based in
part on the Committee's subjective assessment of the executive's performance.
Given the differences in magnitude of a business unit or division and its line
or staff configuration, goal achievement may or may not be weighted heavily on
financial performance of the business unit or division, as the amount of
non-financial accountability varies materially among executives of the Company.
The Compensation Committee continues to place emphasis on the close link
between the strategic and financial interests of shareholders and executive
compensation, as the Committee believes that this orientation both motivates
the executives and supports the highest levels of corporate strategic
performance over the Company's planning horizon. The Compensation Committee
approaches the mix of executive cash compensation with a belief that it should
involve a
11
<PAGE>
fair base salary combined with an emphasis on incentive compensation, as this
approach has served the Company well in the motivation and retention of its
senior executives.
HOW DID THE COMPANY APPLY THIS POLICY IN 1999?
In planning and deliberating 1999 compensation decisions, the Compensation
Committee reviewed the Company's and the Bank's financial performance on both a
long-term and short-term basis, the job performance of each executive officer,
both financial and non-financial, compensation survey information provided by
outside professional compensation consultants including national and regional
peer group data, internally prepared performance review analyses and other
information that the Compensation Committee viewed as relevant. In its
deliberations, the Compensation Committee reviewed the referenced information
for comparison purposes, and, in doing so, did not set the compensation for any
of the Company's executive officers at a specific level due solely to
comparisons with the peer group. Instead, the Committee's compensation
decisions generally reflect competitive factors, job performance in relation to
accountabilities, goal achievement, and circumstances and events that are
unique to each executive, such as extraordinary efforts and expanded
responsibilities. In assessing the Company's performance, the Compensation
Committee considered, among other things, the profitability of the Company as a
whole and progress with respect to the overall shareholder value plan, with
special emphasis on the executive's progress with respect to the long-term
strategic plan.
The Compensation Committee's compensation decisions reflect the factors
described, including objective factors and the subjective assessment of
executive performance, with no specific rigid criteria applied to compensation
decisions.
WHAT ARE THE COMPONENTS OF EXECUTIVE COMPENSATION?
BASE SALARY AND CASH INCENTIVE COMPENSATION
Cash compensation takes the form of base salary and cash incentive
compensation for the senior executive team. The Committee takes both a
long-term and short-term view in arriving at its determinations for overall
cash compensation. The evaluation of varied criteria, including objective and
subjective factors, is brought to the Compensation Committee's executive cash
compensation decisions. In this connection, in 1999 the Committee awarded an
increase in base salary to the one member of the Management Executive Committee
at that time (other than the CEO) who had been with the Bank throughout 1998,
Mr. Haskins. The other two members of the Management Executive Committee joined
the Bank in early 1999, and their compensation was determined in accordance
with the Employment Agreements entered into at the time their employment
commenced (see "Employment Agreements"), the terms of which Employment
Agreements in turn were determined by an assessment of the competitive factors
involved in recruiting such executives, the value such executives would add to
the Company and the Bank and the effect such compensation would have on the
Bank's salary structure. Incentive compensation for all these executives was
based directly on Company and Bank performance. The Compensation Committee
continues to place emphasis on "at risk" compensation related to executive
performance as it believes that such compensation is aligned with the Company's
and shareholders' short-term and long-term interests and such compensation also
presents a traceable record of motivating and retaining such executives.
LONG-TERM INCENTIVE COMPENSATION
The purpose of the Company's 1997 Performance Incentive Plan ("PIP") is to
encourage directors, officers and employees of the Company to contribute to the
growth and performance of the Company. The PIP is administered by the Board
Performance Incentive Plan Committee, whose members are the same as the members
of the Board Compensation Committee. The Compensation Committee granted
1,092,000 stock options to directors, officers and employees in 1999 at various
exercise prices, with all of such options vesting ratably over the three year
period beginning on the
12
<PAGE>
grant date and expiring ten years from the grant. The stock options granted in
1999 were designed to recognize the individual's contribution to the Company's
success during 1999 and/or to communicate the importance of the individual's
future contribution to upcoming corporate initiatives.
HOW IS THE COMPANY'S CHIEF EXECUTIVE OFFICER COMPENSATED?
In determining Mr. Schupp's compensation, the Committee's review
emphasizes the Company's current and prior year's financial performance,
achievement of the Company's overarching strategic growth goals and the
prevailing market rates of compensation for the position. With regard to its
strategic growth goals, the Company and the Bank successfully merged and
integrated over $2 billion in assets related to four separate transactions. A
variety of market data was analyzed by the Committee in order to assess Mr.
Schupp's relative compensation. It was the Compensation Committee's conclusion
that Mr. Schupp's base salary should be increased, while the rate applied in
the formula used to determine his cash incentive compensation, due to the
growth of the Company, was decreased, though the amount available to be earned
increased. This decision continues to place an emphasis on "at risk" incentive
compensation for Mr. Schupp revolving around the achievement of long-term and
short-term strategic and earnings goals for the Company. In this connection,
Mr. Schupp's compensation can expand and contract according to the performance
of the Company. As a result, a significant portion of Mr. Schupp's cash
compensation bears a close relationship to the shareholders' interests.
COMPENSATION COMMITTEE
Paula Berliner
Mary Anna Fowler
Lennart E. Lindahl, Jr.
William F. Spitznagel
Bruce E. Wiita, M.D.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Compensation Committee consisted of Ms. Berliner, Ms.
Fowler, Mr. Lindahl, Mr. Spitznagel and Dr. Wiita. None of these individuals
was an officer or employee of the Company or any of its subsidiaries during
1999, and none is a former officer of the Company or any of its subsidiaries.
During 1999, none of the Company's executive officers served as a director or a
member of the compensation committee (or equivalent body) of another entity of
which any director of the Company or member of the Company's Compensation
Committee was an executive officer.
EMPLOYMENT AGREEMENTS
AGREEMENTS WITH MESSRS. SCHUPP AND HASKINS. The Company and the Bank have
jointly entered into an employment agreement with Mr. Schupp to secure his
services as Chairman, President and Chief Executive Officer and an employment
agreement with Mr. Haskins to secure his services as Senior Executive Vice
President and Chief Financial Officer. The employment agreements have rolling
three-year terms which may be converted to a fixed three-year term by decision
of the executive or by joint decision of the Company and the Bank. These
agreements provide for minimum annual salaries of $415,000 (for Mr. Schupp) and
$170,000 (for Mr. Haskins), discretionary bonuses that are expected to be
determined with reference to consolidated net income before restructuring
charges, taxes and extraordinary items, life insurance coverage in prescribed
amounts, and participation on generally applicable terms and conditions in
other compensation and fringe benefit plans. They also guarantee customary
corporate indemnification and errors and omissions insurance coverage
throughout the employment term and, in the case of Mr. Schupp, for six years
thereafter.
The Bank and the Company may terminate either executive's employment, and
either executive may resign, at any time with or without cause. However, in the
event of termination during the term
13
<PAGE>
without cause, the Bank and the Company will owe the executive severance
benefits generally equal to the value of the cash compensation and fringe
benefits that the executive would have received if he had continued working for
an additional three years. The same severance benefits would be payable if the
executive resigns during the term following a loss of title, office or
membership on the Board of Directors, material reduction in duties, functions
or responsibilities, involuntary relocation of the executive's principal place
of employment to a location outside of a stated geographic area or other
material breach of contract by the Company and the Bank or if he resigns during
the term for any reason following a change of control.
If the Bank or the Company experiences a change in ownership, a change in
effective ownership or control or a change in the ownership of a substantial
portion of their assets as contemplated by section 280G of the Internal Revenue
Code, a portion of any severance payments made to Mr. Schupp or Mr. Haskins
under their respective employment agreements might constitute an "excess
parachute payment" under current federal tax laws. Any excess parachute payment
would be subject to a federal excise tax payable by Mr. Schupp and Mr. Haskins
and would be nondeductible by the Bank and the Company for federal income tax
purposes. Both Mr. Schupp's and Mr. Haskins' employment agreements require the
Bank and the Company to indemnify such executives against the financial effects
of such an excise tax, if it is assessed.
In general, compensation and other expenses incurred under the employment
agreements are to be allocated between the Bank and the Company. The Company
has guaranteed the performance of the Bank's obligations under these employment
agreements.
AGREEMENTS WITH MESSRS. DUNHAM AND STRICKLAND. The Company and the Bank
have jointly entered into employment agreements with Mr. Strickland to secure
his services as Senior Executive Vice President and Chief Banking Officer and
with Mr. Dunham to secure his services as Senior Executive Vice President and
Chief Credit Officer. These agreements have rolling two-year terms which may be
converted to a fixed two-year term by decision of the executive or by joint
decision of the Company and the Bank and provide for minimum annual salaries of
$200,000 (for Mr. Strickland) and $150,000 (for Mr. Dunham). Payments under
these agreements are limited such that payments will not be characterized as
"excess parachute payments" that would subject the executive to excise taxes or
the Company and the Bank to a loss of tax deductions. The terms and conditions
of these agreements are otherwise substantially the same as the terms and
conditions of the employment agreements with Messrs. Schupp and Haskins.
AGREEMENT WITH MR. SAVAGE. The Bank has entered into an employment
agreement with Mr. Savage that is currently scheduled to expire on December 31,
2000. This employment agreement automatically renews for an additional year
each December 31st unless the Bank or the executive chooses to discontinue the
renewals. This employment agreement provides for a minimum base salary of
$125,000, annual performance-based incentive compensation of up to 20% of base
salary, and participation on generally applicable terms and conditions in other
compensation and fringe benefit plans. The Bank may terminate Mr. Savage's
employment at any time with or without cause. In the event of termination
without cause during the term of the employment agreement, the Bank will owe
the terminated executive severance benefits equal to one year's base salary,
payable in a lump sum or in installments at the Bank's option.
The employment agreement prohibits Mr. Savage from working for or being
affiliated with a competitor of the Bank or soliciting the Bank's employees for
a period of 24 months after termination of employment, and prohibits the
disclosure of the Bank's trade secrets and other proprietary information
indefinitely.
OTHERS. The Bank is also party to an employment agreement with Ms.
Pollard, Senior Executive Vice President and Chief Information Officer of the
Bank, with terms similar to those in Messrs. Strickland and Dunham's
agreements, and is also a party to employment agreements with terms similar to
those in Mr. Savage's agreement with Bruce Keir, Market President--Broward
County and Andrew Kirkman, Market President--Central Florida.
14
<PAGE>
CHANGE OF CONTROL AGREEMENTS
AGREEMENT WITH MR. SAVAGE. The Company and the Bank have jointly entered
into a separate change of control agreement with Mr. Savage. Upon the
occurrence of a change of control, as defined, the change of control agreement
supersedes in its entirety the employment agreement between Mr. Savage and the
Bank. The change of control agreement provides for continuing employment for a
rolling two-year term which begins on the date of a change of control and may
be converted on any date after a change of control to a fixed term of two years
by decision of the Bank or the executive.
The Bank and the Company (or their successors) may terminate the
employment of the executive, and the executive may resign, at any time with or
without cause. However, in the event of termination without cause following a
change of control (or within 3 months before the change of control occurs, if
termination is in connection with the change of control), the Bank and the
Company will owe the executive severance benefits generally equal to the value
of the cash compensation and fringe benefits that the executive would have
received if he had continued working for an additional two years. The same
severance benefits would be payable if the executive resigns during the term
following a loss of title or office, material reduction in duties, functions or
responsibilities, involuntary relocation of the executive's principal place of
employment to a location outside of a specified geographic region or other
material breach of contract by the Company and the Bank, or if he resigns
following the change of control for any reason within 90 days after
consummation of a merger or other business combination or reorganization that
is a change of control or within 90 days following the occurrence of any other
event that is a change of control.
The change of control agreement imposes a maximum limitation on the
severance benefits payable to the executive for the purpose of preventing the
characterization of any such benefits as an excess parachute payment under
section 280G of the Internal Revenue Code of 1986.
In general, compensation and other expenses incurred under the change of
control agreement are to be borne by the Bank. The Company has guaranteed the
performance of the Bank's obligations under the change of control agreement.
OTHERS. In the first quarter of 1999, the Company and the Bank entered
into change of control agreements with Alissa E. Ballot, Senior Vice President
and Secretary of the Company and the Bank, Bruce Keir, Market
President--Broward County of the Bank and W. Andrew Kirkman, Market
President--Central Florida of the Bank, with substantially the same terms as
the change of control agreement with Mr. Savage.
EXECUTIVE COMPENSATION SUMMARY TABLE
The following table sets forth information concerning total compensation
earned or paid to the Chief Executive Officer and the four other most highly
compensated executive officers of the Company and the Bank with salary and
bonus for 1999 of $100,000 or more who served in such capacities as of December
31, 1999 (the "named executive officers") for services rendered to the Company
and the Bank during each of the last three fiscal years.
15
<PAGE>
EXECUTIVE COMPENSATION SUMMARY TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ ---------------
OTHER ANNUAL NUMBER OF
SALARY BONUS COMPENSATION STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR ($)(1) ($)(2) ($)(3) GRANTED COMPENSATION(4)
- ------------------------------ ------------- ----------- ----------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Rudy E. Schupp 1999 $415,000 $407,035 -- 165,000 $128,467
Chairman, President and 1998 300,000 234,245 -- 100,000 149,634
CEO of the Company 1997 198,960 198,476 -- 50,000 71,599
and the Bank
Richard J. Haskins 1999 170,000 161,704 -- 25,000 39,385
Senior Executive Vice 1998 144,000 142,778 -- 65,000 71,928
President & CFO of the 1997 128,850 81,911 -- 25,820 48,102
Company and the Bank
R. Michael Strickland 1999(5) 175,000 75,000 -- 75,000 0
Senior Executive Vice 1998 N/A N/A N/A N/A
President and Chief 1997 N/A N/A -- N/A N/A
Banking Officer
of the Bank
Louis J. Dunham 1999(6) 125,000 73,069 -- 75,000 32,250
Senior Executive Vice 1998 N/A N/A -- N/A N/A
President and Chief Credit 1997 N/A N/A N/A N/A
Officer of the Bank
Roger Savage 1999 147,000 12,734 -- 10,000 16,314
Market President--Dade 1998 135,000 22,251 -- 20,000 56,359
County of the Bank 1997 116,665 16,000 25,307 45,591
<FN>
- ----------------
(1) For Messrs. Schupp and Haskins, total paid by the Company and the Bank for
the years indicated.
(2) Annual incentive compensation paid by the Company and the Bank for
financial results achieved and goals met during the year.
(3) The Company and/or the Bank provide the named executive officers with
certain group life, health, medical and other non-cash benefits generally
available to all salaried employees and not included in this column
pursuant to S.E.C. rules. Also not included is the value of perquisites
and other personal benefits which do not exceed the lesser of $50,000 or
10% of the total annual salary and bonus reported for the executive
officer.
(4) The amounts shown in this column include (i) matching contributions by the
Bank under the Bank's 401(k) Plan, all of which are invested in common
stock of the Company. During 1999, the Bank's matching contributions were
$10,000 for Mr. Schupp, $10,000 for Mr. Haskins and $0 for Mr. Savage.
Messrs. Strickland and Dunham were not yet eligible to participate in the
Bank's 401(k) Plan; (ii) for Mr. Schupp, annual premium value of death
benefit coverage provided under split-dollar life insurance where the
Company or the Bank owns the cash value of the policy. During 1999, the
annual premium value was $712; (iii) for Messrs. Schupp and Haskins,
annual premium on excess disability insurance, which in 1999 was $3,898
for Mr. Schupp and $5,382 for Mr. Haskins; (iv) for Mr. Dunham, moving
expenses of $32,250, and (v) present value of the additional benefit
earned with respect to Supplemental Executive Retirement Plan for Messrs.
Schupp, Haskins and Savage. During 1999, the present value of the
additional benefit earned was $114,569 for Mr. Schupp, $24,003 for Mr.
Haskins and $29,277 for Mr. Savage.
(5) Mr. Strickland's employment with the Bank commenced on February 16, 1999.
(6) Mr. Dunham's employment with the Bank commenced on February 26, 1999.
</FN>
</TABLE>
16
<PAGE>
OPTION GRANTS FOR 1999
The following table sets forth information with respect to option grants
to the named executive officers during 1999 and the potential realizable value
of such option grants:
(1) the number of shares of common stock underlying options granted during
the year;
(2) the percentage that such options represent of all options granted to
employees during the year;
(3) the exercise price;
(4) the expiration date; and
(5) the hypothetical present value, as of the grant date, of the options
under the option pricing model discussed below.
The hypothetical value of the options as of their date of grant has been
calculated below, using the Black-Scholes option pricing model, as permitted by
S.E.C. rules, based upon a set of assumptions set forth in the footnote to the
table. It should be noted that this model is only one method of valuing
options, and the Company's use of the model should not be interpreted as an
endorsement of its accuracy. The actual value of the options may be
significantly different, and the value actually realized, if any, will depend
upon the excess of the market value of the common stock over the option
exercise price at the time of exercise.
OPTION GRANTS DURING 1999
<TABLE>
<CAPTION>
NUMBER OF SECURITIES % OF TOTAL OPTIONS GRANT DATE
UNDERLYING OPTIONS GRANTED TO EMPLOYEES EXERCISE PRICE PRESENT
NAME GRANTED(#) IN FISCAL YEAR ($/SHARE) EXPIRATION DATE VALUE($)(1)
- ----------------------- ---------------------- ---------------------- ---------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Rudy E. Schupp 90,000 $9.375 1/21/09 $357,300
75,000 15.25% 8.3125 11/2/09 264,000
Richard J. Haskins 25,000 2.31% 8.3125 11/2/09 88,000
R. Michael Strickland 50,000 8.5625 2/15/09 176,000
25,000 6.93% 8.3125 11/2/09 88,000
Louis J. Dunham 50,000 8.8375 2/25/09 176,000
25,000 6.93% 8.3125 11/2/09 88,000
Roger Savage 10,000 .92% 8.3125 11/2/09 35,200
<FN>
- ----------------
(1) The estimated present value at grant date of options granted during 1999
has been calculated using the Black-Scholes option pricing model, based
upon the following assumptions: estimated time until exercise of 10 years;
a risk-free interest rate of 6%, a volatility rate of 34%; and a dividend
yield of 2%. The approach used in developing the assumptions upon which
the Black-Scholes valuation was done is consistent with the requirements of
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation."
</FN>
</TABLE>
One-third of all options granted become exercisable on each of the first,
second and third anniversaries of the date of grant.
17
<PAGE>
OPTION AND SAR EXERCISES AND VALUES FOR 1999
The table below sets forth the following information with respect to
option and stock appreciation right ("SAR") exercises during 1999 by each of
the named executive officers and the status of their options at December 31,
1999:
(1) the number of shares of common stock acquired upon exercise of options
or the number of securities with respect to which SARs were exercised
during 1999;
(2) the aggregate dollar value realized upon the exercise of such options;
(3) the total number of exercisable and non-exercisable stock options held
at December 31, 1999; and
(4) the aggregate dollar value of in-the-money exercisable options at
December 31, 1999.
AGGREGATED OPTION/SAR EXERCISES DURING 1999
AND OPTION VALUES ON DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
SHARES AT 12/31/99(#) AT 12/31/99($)(1)
ACQUIRED ON VALUE ----------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ------------- ------------ ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Rudy E. Schupp ................ 0 N/A 39,652 669,000 $91,747 $ 0
Richard J. Haskins ............ 0 N/A 28,794 269,154 56,714 28,125
R. Michael Strickland ......... 0 N/A 0 75,000 0 0
Louis J. Dunham ............... 0 N/A 0 75,000 0 0
Roger Savage .................. 0 N/A 5,000 50,307 0 0
<FN>
- ----------------
(1) In accordance with S.E.C. rules, values are calculated by subtracting the
exercise price from the fair market value of the underlying common stock.
For purposes of this table, fair market value is deemed to be $7.15625,
the closing price reported for NASDAQ transactions on December 31, 1999.
</FN>
</TABLE>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Bank has entered into a separate supplemental executive retirement
plan, or "SERP", agreement with each of Messrs. Schupp, Haskins and Savage.
The SERP agreement with Mr. Schupp provides an annual retirement benefit
equal to a percentage of Mr. Schupp's average annual base salary for the three
years during his final five years of employment that produces the highest
average. If Mr. Schupp terminates employment with the Bank at age 55, the
percentage is 60%. If Mr. Schupp terminates employment with the Bank prior to
age 55, the percentage will be equal to the sum of 30% plus an additional
1.875% for each year of his employment with the Bank after attaining age 39, up
to and including his attainment of age 55. If Mr. Schupp terminates employment
with the Bank after age 55, the percentage will be equal to the sum of 60% plus
an additional 1.4% for each year of his employment with the Bank after
attaining age 55, but no higher than 75%. The annual benefit will be payable
beginning at the later of termination of employment or attainment of age 55 and
will be paid in monthly installments for a fixed period of 240 months.
Provision is also made for payments in cases of death or disability while
employed by the Bank. In the event that Mr. Schupp's employment is terminated
other than due to death or disability or cause coupled with a determination
that he has engaged in conduct inimical to the interests of the Bank and the
Company, he may elect to receive a lump sum payment of the present value of the
future retirement benefit to which he is entitled, computed as though his final
rate of salary were equal to his average annual base salary for the three years
during his final five years of employment
18
<PAGE>
that produces the highest average if that assumption yields a higher benefit.
In the event of a change of control, as defined, Mr. Schupp will be entitled to
an annual retirement benefit equal to 75% of his average annual base salary for
the three years during his final five years of employment that produces the
highest average, payable immediately in a lump sum. If Mr. Schupp's employment
is terminated for cause coupled with a determination that he has engaged in
conduct inimical to the interests of the Bank and the Company, no benefit will
be paid.
The SERP agreement for Mr. Haskins is substantially the same as Mr.
Schupp's, except that it provides for an annual retirement benefit equal to the
following percentages of his average annual base salary for the three years
during his final five years of employment that produces the highest average:
60% if he terminates employment at age 55; the sum of 30% plus an additional 2%
for each year of employment after attaining age 39, if he terminates employment
after age 40 and before age 55; and the sum of 60% plus an additional 1.4% for
each year of employment after age 55, to a maximum of 75%, if he terminates
employment after age 55.
The SERP Agreement for Mr. Savage provides for an annual retirement
benefit payable commencing upon attainment of age 62 equal to 30% of his
average annual base salary for the three years during his final five years of
employment that produces the highest average. Benefits are payable in equal
monthly installments for a fixed period of 240 months. Provision is also made
for payments in cases of death or disability while employed by the Bank. In the
event that Mr. Savage's employment is terminated other than due to death or
disability or cause coupled with a determination that he has engaged in conduct
inimical to the interests of the Bank and the Company, he may elect to receive
a lump sum payment of the present value of the future retirement benefit to
which he is entitled, computed as though his final rate of salary were equal to
his average annual base salary for the three years during his final five years
of employment that produces the highest average. In the event of a change of
control, as defined, Mr. Savage will be entitled to an annual retirement
benefit equal to 30% of his average annual base salary for the three years
during his final five years of employment that produces the highest average,
payable immediately in a lump sum. If Mr. Savage's employment is terminated for
cause coupled with a determination that he has engaged in conduct inimical to
the interests of the Bank and the Company, no benefit will be paid.
If Messrs. Schupp, Haskins and Savage had terminated employment on
December 31, 1999 their future annual benefits under their SERP agreements
would have been: Mr. Schupp, $148,519 payable commencing at age 55; Mr.
Haskins, $76,761 payable commencing at age 55; and Mr. Savage $39,817 payable
commencing at age 62. If they continued employment through their respective
62nd birthdays at their current annual salary rates, their future annual
benefits would be: Mr. Schupp, $311,250; Mr. Haskins, $127,500; and Mr. Savage,
$43,950.
STOCK PERFORMANCE
The following graph compares the performance of the Company's common stock
with the performance of the Russell 2000 Index, which is a broad equity market
index, and a peer group index over the five-year period ending on December 31,
1999. The graph assumes that $100 was invested on December 31, 1994 in the
Company's common stock, the Russell 2000 Index and the peer group index, and
that all dividends were reinvested.
19
<PAGE>
Included in the Republic Security Peer Group, in addition to the Company,
are all publicly traded banks with assets as of 9/30/99 between $2 billion and
$3.5 billion, as follows:
<TABLE>
<CAPTION>
BANK
<S> <C> <C>
1st Source Corporation First Republic Bank Republic Bancshares, Inc.
Area Bancshares Corporation First United Bancshares, Inc. S&T Bancorp, Inc.
BancFirst Corporation Greater Bay Bancorp Southwest Bancorporation of Texas, Inc.
BSB Bancorp, Inc. Hancock Holding Company Texas Regional Bancshares, Inc.
BT Financial Corporation Investors Financial Services Corp. Triangle Bancorp, Inc.
Carolina First Corporation Local Financial Corporation Trust Company of New Jersey (The)
City Holding Company National Bancorp of Alaska, Inc. TrustCo Bank Corp of NY
Community Trust Bancorp, Inc. National City Bancshares, Inc. UCBH Holdings, Inc.
Corus Bankshares, Inc. National Penn Bancshares, Inc. United National Bancorp
East West Bancorp, Inc. Pacific Capital Bancorp USBANCORP, Inc.
F&M National Corporation Park National Corporation W Holding Company Incorporated
First Commerce Bancshares, Inc. WesBanco, Inc.
</TABLE>
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
PERIOD ENDING
------------------------------------------------------------------
INDEX 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Republic Security Financial Corporation ......... 100.00 136.95 157.68 260.40 328.69 199.26
Russell 2000 .................................... 100.00 128.45 149.64 183.10 178.44 216.37
Republic Security Peer Group* ................... 100.00 127.04 157.06 249.07 217.11 232.34
<FN>
- ---------------
* Republic Security Peer group consists of all publicly traded banks with
assets $2B-$3.5B.
</FN>
</TABLE>
20
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of filings with the Securities and Exchange
Commission and written representations that no other reports were required, the
Company believes that all of the persons required to file reports of ownership
of the Company's common stock under section 16(a) of the Securities Exchange
Act of 1934 complied during 1999 with such requirements, with the exception of
the sale by Dr. Bruce Wiita of 12,500 shares in November 1999, which was not
reported until January 2000.
WHO IS THE COMPANY'S INDEPENDENT AUDITOR?
The Company has selected Ernst & Young LLP to serve as its firm of
independent public accountants for the fiscal year ending December 31, 2000.
The same firm has served in this capacity since 1990. Representatives of this
firm are expected to be present at the Annual Meeting. Such representatives
will have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
OTHER MATTERS
As of the date of this proxy statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than the
items referred to above and procedural matters incident to the conduct of the
meeting. If any other matter is properly brought before the meeting for action
by shareholders, the dates by which shareholder proposals and notices of
business to be conducted at an Annual Meeting having been previously disclosed,
proxies in the enclosed form returned to the transfer agent (as agent for the
Company) will be voted in accordance with the recommendation of the Board of
Directors or, in the absence of such a recommendation, in accordance with the
judgment of the proxy holder.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING. Shareholders interested
in presenting a proposal for consideration at the Company's Annual Meeting of
Shareholders in 2001 may do so by following the procedures prescribed in Rule
14a-8 under the Securities Exchange Act of 1934 and the Company's Bylaws. To be
eligible for inclusion into the Company's proxy statement, shareholder
proposals must be received by the Company's Secretary no later than November
24, 2000. Any such proposal will be subject to 17 C.F.R. /section/240.14a-8
promulgated by the SEC under the Exchange Act. In addition, the Board of
Directors will consider proposals for nominees for director from shareholders
which are made in writing to the Secretary of the Company in accordance with
the procedures set forth below.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING. The Bylaws of the
Company provide an advance notice procedure for a shareholder to properly bring
business before an annual meeting or to nominate any person for election to the
Board. For business other than nominating directors, the shareholder must give
written advance notice to the Secretary of the Company not less than sixty (60)
nor more than ninety (90) days before the anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the
annual meeting is more than thirty (30) days before or more than sixty (60)
days after such anniversary date, notice by the shareholder must be delivered
not later than the later of the close of business on the 60th day prior to such
annual meeting or the 10th day following the date on which public announcement
of the date of such meeting is first made by the Company. The advance notice by
shareholders must include the shareholder's name and address, as they appear on
the Company's record of shareholders, the class and number of shares of the
Company's capital stock that are beneficially owned by such shareholder, a
brief description of the proposed business, and any material interest of such
shareholder in the proposed
21
<PAGE>
business. In the case of nominations for election to the Board, such
nominations must be made in writing and delivered by registered or certified
mail, postage prepaid, return receipt requested, to the Secretary of the
Company not less than thirty (30) nor more than sixty (60) days prior to the
Annual Meeting. Certain information regarding the nominee must also be
provided. Nothing in this paragraph shall be deemed to require the Company to
include in its proxy statement and proxy relating to an annual meeting any
shareholder proposal or nomination which does not meet all of the requirements
for inclusion established by the SEC in effect at the time such proposal is
received or any shareholder nomination is made.
PROXY SOLICITATION COSTS. The proxies being solicited hereby are being
solicited by the Company. The cost of soliciting proxies in the enclosed form
will be borne by the Company.
Officers and regular employees of the Company or the Bank may, but without
compensation other than their regular compensation, solicit proxies by further
mailing or personal conversations, or by telephone, telex, facsimile or
electronic means. The Company will, upon request, reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation material to the
beneficial owners of stock.
By order of the Board of Directors,
/s/ Alissa E. Ballot
Alissa E. Ballot
Secretary
March 23, 2000
22
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
REPUBLIC SECURITY FINANCIAL CORPORATION
450 S. AUSTRALIAN AVENUE
WEST PALM BEACH, FLORIDA 33401
The undersigned hereby appoints Rudy E. Schupp and Alissa E. Ballot, and each of
them, acting alone, with the power to appoint his or her substitute, proxy to
represent the undersigned and vote as designated on the reverse all of the
shares of common stock of Republic Security Financial Corporation ("RSFC") held
of record by the undersigned on February 28, 2000, at the Annual Meeting of
Shareholders to be held on April 26, 2000 and at any adjournment or postponement
thereof.
(CONTINUED ON REVERSE SIDE)
PLEASE DATE, SIGN AND MAIL YOUR PROXY
CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
REPUBLIC SECURITY FINANCIAL CORPORATION
APRIL 26, 2000
Please Detach and Mail in the Envelope Provided
[X] Please mark your
votes as in this
example.
1. Election of five directors, each for a term of three years.
NOMINEES: 3-YEAR TERM:
R. Randy Guemple
Richard J. Haskins
Eugene W. Hughes
Lennart E. Lindahl, Jr.
Bruce E. Wiita, M.D.
WITHHOLD
AUTHORITY
FOR TO VOTE
[ ] [ ]
(Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- ----------------------------------------
<PAGE>
2. In his or her discretion, the proxy is authorized to vote upon such
other matters as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature Dated
-------------------- ------------------------- ----------------
Signature if held jointly
NOTE: Please sign exactly as name appears above. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. 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.
<PAGE>
Appendix A
[Graphic omitted]
March 23, 2000
Dear ESOP Account Holder:
As you may know, in connection with the conversion of First Bank of
Florida ("First Bank") from a mutual to a stock form of organization in
September 1993, and the formation of First Palm Beach Bancorp, Inc. (the
"Company") as the parent holding company for First Bank, 423,200 shares of
common stock of the Company were acquired by the Employee Stock Ownership Plan
("ESOP") for the benefit of participating employees. These shares of common
stock were purchased with borrowed funds and placed in a suspense account for
future transfer to the allocated accounts of individual participating employees
as the borrowed funds are repaid. Upon the merger of the Company with Republic
Security Financial Corporation ("RSFC") on October 29, 1998, the shares of
common stock of the Company were exchanged for shares of Common Stock of RSFC
("Common Stock").
A total of 764,463 shares of Common Stock of RSFC were held by the ESOP as
of February 28, 2000, which is the voting record date (the "Record Date") for
RSFC's Annual Meeting of Shareholders to be held on April 26, 2000 (the "2000
Annual Meeting"). All of such shares were allocated to participants. As a
participant in the ESOP, you may direct the voting, at the 2000 Annual Meeting,
of the shares of RSFC's Common Stock held by the ESOP Trust and allocated to
your account as of the Record Date.
A committee consisting of Messrs. Haskins and Guemple and Ms. Schimelman
administers the ESOP (the "ESOP Committee"). An unrelated corporate trustee for
the ESOP has been appointed, HSBC (the "ESOP Trustee").
HOW YOU EXERCISE YOUR VOTING RIGHTS
Because the ESOP Trustee is the owner of record of all of the Common Stock
held in the ESOP Trust, only it may submit an official proxy card or ballot to
cast votes for this Common Stock. You exercise your right to direct the vote of
Common Stock that has been allocated to your account by submitting a
Confidential Voting Instruction Card that will tell the ESOP Trustee how to
complete the proxy card or ballot for your shares. The ESOP Committee is
furnishing to you the enclosed Confidential Voting Instruction Card, together
with a copy of the Company's Proxy Statement for the 2000 Annual Meeting, so
that you may exercise your right to direct the voting of shares of Common Stock
allocated to your account. The Confidential Voting Instruction Card indicates
how many shares of Common Stock were allocated to your account, and thus how
many votes you have, as of the Record Date. The Confidential Voting Instruction
Card also lists the specific proposals to be voted on at the 2000 Annual
Meeting.
In order to direct the voting of shares allocated to your account under
the ESOP, you must fill-out and sign the enclosed Confidential Voting
Instruction Card and return it in the accompanying envelope by April 17, 2000.
The Confidential Voting Instruction Card will be delivered directly to the
ESOP Trustee who will tally all the instructions received. If your Confidential
Voting Instruction Card is received on or before April 17, 2000, the ESOP
Trustee will vote the number of shares of Common Stock indicated on your
Confidential Voting Instruction Card in the manner you direct. The contents of
your Confidential Voting Instruction Card will be kept confidential. No one at
Republic Security Bank or RSFC will have access to information about anyone's
individual choices.
<PAGE>
UNSPECIFIED PROPOSALS
At the 2000 Annual Meeting, it is possible, although very unlikely, that
stockholders will be asked to vote on matters other than those specified on the
attached Confidential Voting Instruction Card. In such a case, there may not be
time to ask you for further voting directions. If this situation arises, the
ESOP Trustee has a legal duty to decide how to vote all of the shares held in
the ESOP Trust. In making a decision, it will act solely in the interest of
participating employees and their beneficiaries.
IF YOU DO NOT VOTE
The ESOP Trustee has a legal duty to see that all voting rights for shares
of Common Stock held in the ESOP Trust are exercised. If you do not file a
Confidential Voting Instruction Card, or if the independent tabulator receives
your Confidential Voting Instruction Card after the deadline, the ESOP Trustee
will decide how to exercise the votes for your shares. In making a decision, it
will act solely in the interest of participating employees and their
beneficiaries.
This voting direction procedure is your opportunity to participate in
decisions that will affect the future of Republic Security Bank and RSFC.
Please take advantage of it by completing and signing the Confidential Voting
Instruction Card using the envelope provided.
Sincerely,
ESOP Committee
Enclosure: Proxy Statement
<PAGE>
CONFIDENTIAL VOTING INSTRUCTION CARD
NAME: ____________________________________
ALLOCATED SHARES: ________________________
I, the undersigned, understand that the ESOP Trustee is the holder of
record and custodian of all shares of Republic Security Financial Corporation
(the "Company") Common Stock allocated to my account under the First Bank of
Florida Employee Stock Ownership Plan. Further, I understand that my voting
directions are solicited on behalf of the ESOP Trustee for the Annual Meeting
of Shareholders on April 26, 2000.
As a named fiduciary with respect to the Company Common Stock allocated to
me, I direct you to vote all such Company Common Stock as follows:
1. The election of five directors for terms of three years each, as listed
below:
R. Randy Guemple, Richard J. Haskins, Eugene W. Hughes, Lennart E. Lindahl,
Jr., Bruce E. Wiita, M.D.
FOR ALL NOMINEES
(EXCEPT AS INDICATED BELOW) VOTE WITHHELD AS TO ALL NOMINEES
[ ] [ ]
INSTRUCTION: To withhold your vote for any individual nominee, write that
nominee's name in the space provided:
_____________________________________________________________________________.
2. In the discretion of the ESOP Trustee, as to any other matter or proposal to
be voted on by the Company's shareholders at the Annual Meeting of
Shareholders.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' ALL NOMINEES.
The ESOP Trustee is hereby directed to vote any shares allocated to me. I
understand that if I sign this form without indicating specific instructions,
shares attributable to me will be voted FOR all nominees.
By signing below, I acknowledge receipt of a copy of the Proxy Statement
dated March 23, 2000 that was furnished to shareholders of the Company in
connection with the Annual Meeting of Shareholders and the accompanying letter
dated March 23, 2000 from the Committee appointed to administer the ESOP.
Dated: ______________________, 2000.
____________________________________
PRINT NAME OF ESOP ACCOUNT HOLDER
____________________________________
SIGNATURE OF ESOP ACCOUNT HOLDER
PLEASE DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED ENVELOPE TO BE RECEIVED
NO LATER THAN APRIL 17, 2000.
