<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
St. Joe Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LOGO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 1997
The annual meeting of the shareholders of St. Joe Corporation will be held
on Tuesday, May 13, 1997, at 10:30 a.m. Eastern Daylight Savings Time, at the
Hilton Hotel & Towers, Duval Ballroom A & B, 1201 Riverplace Boulevard,
Jacksonville, Florida.
The meeting will consider the following business which is described in the
accompanying Proxy Statement:
1. Election of Board of Directors to hold office until their
successors are elected and qualified. The nominees intended to be presented
by the Board of Directors for election are described in the accompanying
Proxy Statement.
2. Approval of a Stock Option Plan which is described in the
accompanying Proxy Statement.
3. Such other business as may properly come before the meeting or any
continuance of the meeting.
The Board of Directors has fixed the close of business on April 1, 1997, as
the record date for determining those shareholders who will be entitled to vote
at the meeting.
All shareholders who find it convenient to do so are cordially invited and
urged to attend the meeting in person. The holders of a majority of the
outstanding shares entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum.
The attached Proxy Statement contains important information regarding the
matters to be acted upon at the Annual Meeting.
The Annual Report containing financial data and a summary of operations for
1996 is enclosed.
By order of the Board of Directors.
/s/ Robert M. Rhodes
Robert M. Rhodes
Senior Vice President and General
Counsel
Dated: April 11, 1997
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE PROXY CARD
ENCLOSED WITH THIS NOTICE AT YOUR EARLIEST CONVENIENCE.
<PAGE> 3
ST. JOE CORPORATION
1650 PRUDENTIAL DRIVE
JACKSONVILLE, FL 32207
April 11, 1997
PROXY STATEMENT
THIS PROXY is being mailed or otherwise furnished to stockholders on or
about March 31, 1997, in connection with the solicitation by the Board of
Directors of St. Joe Corporation (the "Company"), a Florida corporation, of
proxies to be voted at the Annual Meeting of Shareholders of the Company to be
held on May 13, 1997, and at any continuation thereof (the "Annual Meeting").
The address of the Company is 1650 Prudential Drive, Jacksonville, Florida
32207, and the telephone number is (904) 396-6600.
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is being solicited by order of the Board of Directors of
the Company for use in connection with the Annual Meeting of the Company's
Shareholders to be held May 13, 1997. The expense of printing and mailing this
Proxy Statement will be borne by the Company. In addition to solicitation of
proxies by mail, the Company may reimburse brokers and other nominees for the
expenses of forwarding proxy materials to the beneficial owners of shares held
in their names. Directors, officers and employees of the Company may solicit
proxies on behalf of the Board of Directors personally by mail, by telephone, or
by telecopy, but it is estimated that the expense of any such solicitation will
be nominal, and that no compensation will be paid specifically for such
solicitation.
Your proxy may be revoked at any time prior to its being voted by written
notice to the Secretary of the Company or by attendance and voting in person at
the Annual Meeting by ballot. If your proxy is properly signed and you do not
revoke it, your shares will be voted at the Meeting in accordance with your
instructions. If no instructions are given, your proxy will be voted in favor of
management's proposals.
It is the Company's policy that all proxies, ballots, and voting
tabulations that identify shareholders be kept confidential, except where
disclosure may be required by applicable law, where shareholders write comments
on their proxy cards, and in limited circumstances such as a proxy contest or
other solicitation of proxies.
Each year, the Board of Directors submits to the shareholders at the Annual
Meeting certain proposals. Other proposals may be submitted by the Board of
Directors or shareholders for inclusion in the Proxy Statement for action at the
Annual Meeting. Any proposal submitted by a shareholder for inclusion in the
1998 Annual Meeting Proxy Statement must be submitted in writing and must be
received by Company no later than January 2, 1998. Any such proposals, as well
as any questions related thereto, should be directed to the Corporate Secretary.
At the 1996 Annual Meeting, 79.03% of the outstanding shares of Company's
Common Stock were present.
<PAGE> 4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, nine Directors of the Company are to be elected to
serve until the next annual election and until their successors are duly elected
and qualified.
VOTE REQUIRED
The directors elected shall be the nine persons who receive the greatest
number of votes.
NOMINEES
The nine persons named below are the nominees for election as directors.
The enclosed proxy will be voted for the election of these directors unless
otherwise indicated by the shareholder. On the following pages there is
information on the nine nominees for director, stating, among other things,
their name, age and a brief description of their business experience.
The Board knows of no reason why any nominee for director would be unable
to serve as a director. If any nominee should, for any reason, be unable to
serve, the shares represented by all valid proxies would be voted for the
election of such other persons as the Board of Directors may designate, or the
Board may reduce the number of directors to eliminate the vacancy.
JACOB C. BELIN Director since 1953
Age 82
Mr. Belin was President of Company from 1968 to 1984, and Chairman of the
Board and Chief Executive Officer from 1982 to June 1991. He is an officer
and/or director of the subsidiaries of Company, including Florida East Coast
Industries, Inc., a majority owned subsidiary of the Company. Mr. Belin also
serves as a Trustee of the Alfred I. duPont Testamentary Trust, and as a member
of the Board of Directors of The Nemours Foundation. (See the Section entitled
"Voting Securities and Principal Holders Thereof.").
RUSSELL B. NEWTON, JR. Director since 1994
Age 72
Mr. Newton spent his early employment years with BOOZ, ALLEN & HAMILTON,
Management Consultants, and as President of Southern Stores, Inc. In 1968, he
became President of Charter Oil Company and held that position until 1975, when
he became principal owner and Chairman of Kern County Refineries, Inc. Since
selling his interest in Kern County Refineries in 1981, Mr. Newton has been an
investor in oil, marketing, shipping, public utilities, construction, direct
mail solicitation, and cable television. Mr. Newton is Chairman of Timucuan
Asset Management Company which is involved in investment portfolio management.
Mr. Newton is also a director of East Coast Oil Company and Alliance Mortgage
Company, as well as other smaller, closely held companies.
JOHN J. QUINDLEN Director since 1995
Age 64
Mr. Quindlen retired as Senior Vice President and Chief Financial Officer
of E. I. duPont de Nemours & Company in 1993. Except for three years he served
in the U.S. Navy as a Supply Officer, Mr. Quindlen worked for duPont from 1954
until his retirement, beginning in the Accounting Division of the Treasurer's
Department and advancing through various positions within the Finance and
Accounting Departments of duPont until reaching the position at which he
retired. Mr. Quindlen is a trustee of the Rodney Square Funds, the Kiewit Mutual
Fund, the Kalmar Pool Investment Trust, and the Henry Frances duPont Winterthur
Museum. He is a director of the Atlantic Aviation Company, and a member of the
Finance Council of the Archdiocese of Philadelphia.
2
<PAGE> 5
WALTER L. REVELL Director since 1994
Age 62
Mr. Revell was Secretary of Transportation for the State of Florida from
1972 to 1975, and then was President, CEO, and Director of Post, Buckley, Schuh
and Jernigan, Inc. until 1983. Mr. Revell is presently Chairman of the Board and
CEO of H. J. Ross Associates, Inc., a consulting engineering, architectural, and
planning firm in Coral Gables, Florida. He is also a Chairman of the Board and
CEO of Revell Investments International, Inc, and Infinity Technologies, Inc.
Mr. Revell is also a director of Spilliscandela and Partners, Inc., Diacom
Industries, Inc., Risk Corp, Inc., and Hotel Copy, Inc., and General Partner of
Kraft Forms.
PETER S. RUMMELL New Nominee
Age 51
Mr. Rummell was appointed Chairman and CEO of the Company in January, 1997.
From 1985 until 1996, Mr. Rummell was employed by The Walt Disney Company in a
variety of senior executive positions. Most recently he was Chairman of Walt
Disney Imagineering, the division responsible for the Company's world wide
creative design, real estate and research and development activities. Mr.
Rummell served as President of the Arvida Resort Communities Division during
1985. From 1983 until 1985, Mr. Rummell was Vice Chairman of the Rockefeller
Center Management Corporation in New York City. Mr. Rummell was general manager
and then President of Sawgrass, near Jacksonville, Florida, from 1977 until
1983. Following management positions for the Sea Pines Company in Hilton Head,
South Carolina, and the Amelia Island Plantation, Mr. Rummell spent two years at
the Ocean Reef Club in Key Largo, Florida.
FRANK S. SHAW, JR. Director since 1995
Age 65
Mr. Shaw is President of Shaw Securities, Inc., a financial services
company, and of Cherry Bluff, a North Florida development firm based in
Tallahassee, Florida. He is also the former President and owner of Tallahassee
Ford. Mr. Shaw is a director of First South Bank; Regional Financial Company and
is Chairman of the Board of the Tallahassean, a weekly newspaper. Mr Shaw serves
on the Board of Directors of The Southern Scholarship Foundation, Maclay School
Foundation, Leon County Library Foundation and the James Madison Institute.
WINFRED L. THORNTON Director since 1968
Age 68
Mr. Thornton was President and Chief Operating Officer of the Company from
1984 to June 1991, at which time he became Chairman of the Board and CEO. He
resigned as Chairman of the Board and CEO, effective January 13, 1997. He served
as an officer and/or director of each of the subsidiaries of the Company and has
been Chairman and/or President of Florida East Coast Industries, Inc., since it
was incorporated in 1983. Mr. Thornton is a member of the United States Business
and Investural Council and National Right to Work Committee. Mr. Thornton also
serves as a Trustee of the Alfred I. duPont Testamentary Trust, and as a member
of the Board of Directors of the Nemours Foundation. (See the Section entitled
"Voting Securities and Principal Holders Thereof").
JOHN D. UIBLE Director since 1994
Age 61
Mr. Uible was employed by the Charter Company during the years 1958 to 1976
and held a number of top financial positions. In 1976, he became Chairman of the
Board and CEO of Jacksonville National Bank and held that position until the
bank was merged into Florida National Banks of Florida. Mr. Uible was Chairman
of the Board and CEO of Florida National Banks of Florida from 1982 to 1990,
when it was acquired by First Union Corporation, Charlotte, North Carolina.
Since 1990, Mr. Uible has been an investor and Director of First Union
Corporation.
3
<PAGE> 6
CARL F. ZELLERS, JR. Director since 1995
Age 64
Mr. Zellers is President and a Director of Florida East Coast Industries,
Inc. and President and a director of Florida East Coast Railway Company and Gran
Central Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS -- THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ABOVE SLATE OF NOMINEES.
GENERAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors. The Board holds one regular meeting following the Annual
Shareholders' meeting and three scheduled quarterly meetings. During 1996, the
Board held six meetings, one annual, three quarterly, and two special. To assist
it in carrying out its duties, the Board has authority to appoint committees.
Under that authority, the Board, during 1996, has five standing committees. All
members of the Board of Directors attended at least seventy-five percent (75%)
of the total number of Board Meetings and meetings held by committees on which
each served.
COMMITTEES OF THE BOARD
The Audit Committee includes W. L. Revell, Chairman, R. B. Newton, Jr., and
J. J. Quindlen. The Audit Committee recommends to the Board the independent
auditors to be engaged by the Company, reviews the engagement including the
renumeration to be paid, and reviews with the Company's auditors, on a
continuing basis, the plan, scope and results of the Company's audit and such
other matters as may be delegated by the Board. The Audit Committee met twice in
1996
The Compensation Committee includes J. D. Uible, Chairman, and F. S. Shaw,
Jr. The Compensation Committee is responsible for assuring that the Chief
Executive Officer and other executive officers of the Company are compensated
effectively and in a manner consistent with the stated compensation strategy of
the Company and the requirements of the appropriate regulatory bodies. The
Compensation Committee met once during 1996.
The Executive Committee includes J. C. Belin, Chairman, R. E. Nedley and W.
L. Thornton. The Executive Committee met 11 times during 1996.
The Investment and Finance Committee includes J. J. Quindlen, Chairman,
R.E. Nedley, F. S. Shaw, Jr. and C. F. Zellers, Jr. J. M. Jones, Jr., Vice
President and CFO of the Company, is an ex officio member of the Committee. This
Committee is responsible for setting investment policies of the Company and to
recommend to the Board changes to be made to these policies. The Investment and
Finance Committee met four times during 1996.
The Pension Committee includes R. E. Nedley, W. L. Thornton and C. F.
Zellers. The Plan Administrator, Ronald A. Anderson, under the provisions of the
Company's pension plans serves as Chairman of the Pension Committee. The Pension
Committee has the responsibility to supervise the operations and administration
of the Company's two pension plans. The Pension Committee met five times during
1996.
During 1996 the Company did not have a Nominating Committee.
During 1996, the Board appointed R. B. Newton, Chairman, J. J. Quindlen, W.
L. Revell. F. S. Shaw, Jr., and J. D. Uible to serve on a Special Committee. The
purpose of this Special Committee is to evaluate a possible transaction with
Florida East Coast Industries, Inc. (See the section entitled Certain
Transactions, FECI).
On March 18, 1997, the Board amended the Company's By-laws. The provision
of the By-laws which required the Board to appoint an Executive Committee was
changed to provide that the Board may establish such committees as are necessary
to assist the Board in managing the business affairs of the Company.
4
<PAGE> 7
COMPENSATION OF DIRECTORS
The Board of Directors has the authority to fix the compensation of
directors. During 1996, directors were paid a quarterly retainer of $2,500.00,
plus $600.00 for each Board meeting and $400.00 for attendance at Audit,
Compensation, and Investment and Finance Committee meetings. Employee directors
received $200.00 for each board meeting attended. At its regular meeting held on
February 25, 1996, the Board authorized directors who are not employees of the
Company to receive a retainer of $25,000.00 per annum and a board or committee
meeting fee of $1,250.00. In addition to the standard fees, directors are
reimbursed for transportation and other reasonable expenses incident to
attendance at Board and Committee Meetings.
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation for Company's
Executive Officers whose 1996 total annual compensation exceeded $100,000, as
well as the total compensation paid to those executives for the past three (3)
years.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY $(2) BONUS $(3)
--------------------------- ---- ----------- ---------- ------------
<S> <C> <C> <C> <C>
W. L. Thornton 1996 $181,200.00 $30,000.00 $3,975.00
Chairman of the 1995 181,800.00 20,000.00 3,810.00
Board and CEO 1994 160,350.00 -- 3,586.00
J. C. Belin 1996 $154,200.00 -- $ -0-
Chairman of the 1995 150,050.00 -- 741.00
Executive Committee 1994 144,725.00 -- 719.00
R. E. Nedley 1996 $161,200.00 $15,000.00 $2,230.00
President and COO 1995 161,800.00 16,000.00 2,087.00
1994 136,150.00 -- 1,652.00
J. M. Jones, Jr. 1996 $147,000.00 $15,000.00 $2,805.00
Vice President and 1995 110,072.00 -- 1,125.00
CFO 1994 n/a n/a n/a
E. C. Brownlie 1996 $100,000.00 $ 7,500.00 $2,600.00
Vice President 1995 n/a n/a n/a
1994 n/a n/a n/a
</TABLE>
- ---------------
(1) Includes all executive officers with total annual compensation in excess of
$100,000. The table does not include an "Other Annual Compensation" column
as no executive officer received an aggregate amount of these items in
excess of either $50,000 or 10% of total annual salary. The Company did not
have a stock award or option program in 1996.
(2) Includes base salary and directors' fees received from the Company and any
subsidiary of the Company.
(3) Includes contributions made by the Company to the Deferred Compensation
Plan-401(k) and the ESOP during 1996 as follows:
<TABLE>
<S> <C> <C> <C>
J. C. Belin -401(k) $ -0- -ESOP - $ -0-
W. L. Thornton -401(k) $2,975.00 -ESOP - $1000.00
R. E. Nedley -401(k) $1,350.00 -ESOP - $ 880.00
M. J. Jones,
Jr. -401(k) $2,805.00 -ESOP - $ -0-
E. C. Brownlie -401(k) $2,100.00 -ESOP - $ 500.00
</TABLE>
(4) Under an arrangement approved by the Board of Directors of both St. Joe and
FECI, Mr. Thornton's salary and expenses are paid by St. Joe, with FECI
reimbursing St. Joe for $20% of his salary and expenses common to both
companies, as compensation as Chairman and CEO of FECI. Expenses incurred
for the
5
<PAGE> 8
exclusive benefit of either the Company or FECI are borne 100% by the
benefitted company. The salary shown in this table represents 100% of Mr.
Thornton's salary.
EMPLOYEE BENEFIT PLANS
The Company maintains an employee stock ownership plan, a defined benefit
pension plan, and a deferred compensation plan covering substantially all
salaries employees of the Company and its participating subsidiaries. Such plans
as described in detail below, do not discriminate in favor of directors or
executive officers in the nature or level of benefits provided to participants.
ESOP. The Company maintains an employee stock ownership plan (the "ESOP)
which covers all salaried employees of the Company and its participating
subsidiaries who have attained age 20 years, 6 months of age and completed 18
months of service. The Company contributes to the ESOP an amount equal to 1/2 of
1% of the aggregate annual compensation paid to participants during the year,
subject to a maximum amount of compensation that may be considered under the
ESOP of $150,000 per employee for the 1995 plan year. This maximum will be
adjusted for future plan years in accordance with Section 401(a)(17)(B) of the
Internal Revenue Service Code. Contributions to the ESOP made by the Company are
primarily used to purchase Company common stock which is then allocated to the
individual accounts of the participants in the ESOP. The normal retirement date
under the plan is age 65, however, a participant may elect to early retire upon
reaching age 55 and 15 years of service. Distributions may also be made upon
termination of employment, death of the participant, disability of the
participant or the participant's attainment of age 59 1/2. In 1996, the Company
contributed the amounts set forth in footnote (3) in the Summary Compensation
Table on behalf of the executive officers shown in that table. The ESOP was
terminated, effective December 31, 1996 and distributions to the participates
will be made in 1997.
Pension Plan. The Company maintains a defined benefit pension plan (the
"Pension Plan") which covers all salaried employees of the Company and its
participating subsidiaries who have attained age 21 and completed one year of
service. Upon reaching normal retirement age of 65, each salaried employee with
at least five years of service will be eligible to receive annual retirement
benefits based on the "50% Joint and Survivors" form of payment (normal form)
equal to the product 1.5% of his or her "Final Average Earnings" multiplied by
the number of complete years and any monthly fraction thereof. These benefits
are not reduced for social security or other benefits received by the
participant. A participant may elect to receive actuarially equivalent benefits
payable through the "life only", "five or ten year certain and continuous" or
the "66 2/3%, 75% or 100% joint and survivor" annuity options, or any other form
of payment permitted by law and agreed to by the Pension Committee. "Final
Average Earnings" is defined as the greater of the participant's average annual
earnings over the 60 or 120 month period immediately preceding the participant's
retirement, termination, disability or death. Earnings used in the
aforementioned calculation are substantially the same as those disclosed in the
Summary Compensation Table on page 8. Employees who have reached age 55 with 15
years of credited service may elect to receive retirement benefits for life as
set forth above, reduced by 1/2 of 1% for each month by which the early
retirement date precedes the normal retirement date.
The following table shows estimated annual benefits payable under the
Pension Plan upon retirement to participants using specified average annual
earnings and years of service assuming the normal form of payout is selected.
<TABLE>
<CAPTION>
FINAL ANNUAL EARNINGS 15 20 25 30 35
- --------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$ 50,000.............................................. 11,150 15,000 18,750 22,500 26,250
75,000.............................................. 16,875 22,500 28,125 33,750 39,375
100,000.............................................. 22,500 30,000 37,500 45,000 52,500
125,000.............................................. 28,125 37,500 46,875 56,250 65,625
150,000.............................................. 33,000 45,000 56,250 67,500 78,750
</TABLE>
6
<PAGE> 9
The years of service credited for retirement purposes as of December 31,
1996 for the individuals listed in the Summary Compensation Table are:
<TABLE>
<S> <C>
J. C. Belin................................................. 58
W. L. Thornton.............................................. 13
R. E. Nedley................................................ 34
J. M. Jones, Jr............................................. 0
E. C. Brownlie.............................................. 34
</TABLE>
See the Section entitled Certain Transactions, Early Retirement Program for
additional information regarding the Pension Plan.
Deferred Compensation Plan. The Company maintains a deferred compensation
plan (the "401(k)") which covers all salaried employees of the Company and its
participating subsidiaries who elect to have their salary reduced by up to 6%
and have that money contributed into the 401(k) and invested as directed by the
participant. The five accounts available are three mutual funds and common stock
of either the Company or FECI. The Company matches the employee contribution
$1.00 for $1.00 for the first $500; $0.75 per $1.00 for the next $300.00, $.50
for the next $300.00; and $0.25 per $100 for the excess of $1,100 up to the
maximum allowed contribution of 6%. Under certain conditions the 401(k) plan
allows a participant to borrow from the fund. The funds are normally paid out in
a lump sum in the case of death, termination, disability, retirement or after
attainment of age 59 1/2. In 1996 the Company contributed the amounts set forth
in footnote (3) in the Summary Compensation Table on behalf of the executive
officers shown in that table.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for reviewing and approving the
compensation policies and programs for the Company's executive officers
including the Company's officers named in the Summary Compensation Table. The
Compensation Committee members of the Board of Directors, who are all
independent non-employee directors and have no interlocking relationships as
defined by the Securities and Exchange Commission, were chosen because of their
business backgrounds and to ensure that the interests of the shareholders are
being served as it relates to all matters of executive compensation. This report
covers the actions of the Committee regarding the compensation of the executive
officers for 1996 and prospectively for 1997.
In reviewing performance for 1996 to determine appropriate performance
based bonuses, the committee used a discretionary process. The key factors that
the Committee considered in making their determination was the progress the
Company had made in developing and executing a new St. Joe strategy. Given Mr.
Thornton's significant contributions in these areas, the Committee elected to
provide a bonus of $30,000.00 (16.7% of base salary) to Mr. Thornton. Also based
on these same criteria, the Committee approved an increase in base salary from
$180,000.00 to $185,000.00 (2.8%) effective as of January 1, 1997.
Bonuses were paid to three additional executive officers based on the same
criteria as for the CEO. These bonuses ranged from approximately 7.5% to 10% of
base salary. In addition, the base salary of one other executive officer was
increased by approximately 1.3%.
Early in 1997, working with Mr. Rummell who was elected CEO effective
January 7, 1997, and a nationally recognized outside consulting firm, the
Compensation Committee reexamined its compensation philosophy striving to more
closely align the compensation of the executive officers with company
performance and the interests of shareholders. The main tenants of the revised
compensation philosophy are:
- Base salaries at the median of comparable companies that generate value
from the management of substantial assets
- Provide for a competitive but conservative annual incentive based on
company and individual performance
- Provide for the granting of stock options in order to align the interests
of the executives with shareholders
7
<PAGE> 10
In accordance with this revised philosophy, the Committee is proposing that
shareholders approve the 1997 Stock Incentive Plan (see Proposal No. 2 for more
information on the Incentive Plan.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally limits the company's
tax deduction to $1,000,000 for compensation paid to the CEO and the four most
highly compensated executive officers who are executive officers as of the last
day of the applicable year. Exceptions are made, however, for
"performance-based" compensation. For 1996, the Committee believes that all
compensation paid to executive officers is fully deductible.
Awards under the new 1997 Stock Incentive Plan, if approved by
shareholders, will satisfy the 162(m) requirements for performance-based
compensation. The new annual incentive plan in place for 1997 will not satisfy
the 162(m) requirements for performance-based compensation. The Committee views
the potential loss of tax deductibility for these awards as relatively minor and
not material. The Committee retains the discretion to pay non-deductible
compensation if it believes that it would be in the best interest of the company
and its shareholders.
Submitted by the Compensation Committee.
J. D. Ubile, Chairman
8
<PAGE> 11
PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative
shareholder returns for the period February 28, 1992 through February 28, 1997
assuming $100 invested on February 28, 1992 in the Company's common stock, in
the Russell 1000 Index and in the Standard & Poor's Paper and Forest Products
Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS*
<TABLE>
<CAPTION>
S&P PAPER &
MEASUREMENT PERIOD ST. JOE FOREST PRODUCTS
(FISCAL YEAR COVERED) CORPORATION RUSSELL 1000 INDEX INDEX
<S> <C> <C> <C>
2/28/92 100 100 100
2/28/93 107.02 107.82 109.37
2/28/94 146.89 114.13 121.11
2/28/95 163.59 118.49 129.33
2/28/96 168.26 156.06 128.88
2/28/97 214.81 190.19 148.24
</TABLE>
9
<PAGE> 12
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors of the Company has designated April 1, 1997 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting and any adjournment thereof. As of April 1, 1997, the
Company has sixty million (60,000,000) authorized and 30,565,937 shares
outstanding of Common Stock, no par value, which is its only voting security.
Each share is entitled to one vote at the Meeting. The following table sets
forth information as of March 31, 1997 with respect to persons known by the
Company to be the beneficial owners of more than five percent (5%) of its
outstanding common stock:
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS NUMBER OF SHARES CLASS(1)
---------------- ---------------- ----------
<S> <C> <C>
Alfred I. duPont Testamentary Trust(2)(3)................... 21,291,900 69.8
P. O. Box 1380
Jacksonville, FL 32201
State Farm Mutual Automobile Insurance Company(4)........... 1,720,600 5.6
One State Farm Plaza
Bloomington, Illinois 61710
Franklin Resources Inc.(5).................................. 1,573,675 5.2
Charles B. Johnson
Rupert H. Johnson
777 Mariners Island Blvd.
San Mateo, CA 94404
</TABLE>
- ---------------
(1) All percentages are rounded to the nearest tenth of one percent.
(2) The Trust owns 20,547,764 shares in its name and The Nemours Foundation owns
744,136 in its name. The Trustees constitute the entire Board of Directors
of The Nemours Foundation and, therefore, have sole voting and sole
dispositive power over these shares.
(3) Under the provisions of the Will creating the Trust, the Trustees of the
Trust having the power to vote the shares of stock specified above are J. C.
Belin, Alfred duPont Dent, Herbert Peyton, John Porter, W. T. Thompson, III,
W. L. Thornton and NationsBank of Florida, a subsidiary of NationsBank
corporation. A majority of the Trustees have the right to vote all the stock
of the Company owned by the Trust. In addition to the Trust, NationsBank
Corporation and its subsidiaries have sole voting power of 3,850 shares.
(4) According to a Schedule 13G filed with the Securities and Exchange
Commission, as of December 31, 1996, State Farm Mutual Automobile Insurance
Company owns 761,300 shares and State Farm Employee Retirement Trust owns
959,300 shares of the Company's stock. The Board of Directors of State Farm
Automobile Insurance Company and the Trustees of State Farm Employees
Retirement Trust have sole voting and sole dispositive power over the shares
of Common Stock each owns.
(5) According to a Schedule 13G filed with the Securities and Exchange
Commission, as of December 31, 1996, the above shares are beneficially owned
by one or more open or closed end investment companies or other managed
accounts which are advised by direct and indirect advisory subsidiaries (the
"Advisory Subsidiaries") of Franklin Resources, Inc. ("FRI"). Such advisory
contracts grant to such Advisory Subsidiaries all voting and investment
power over the securities owned by such advisory clients. Therefore, such
Advisory Subsidies may be deemed to be, for purposes of Rule 13d-3 under the
Securities Exchange Act of 1934, the beneficial owner of the securities
listed above.
Charles B. Johnson and Rupert H. Johnson, Jr. (the "Principal Shareholders")
each own in excess of 10% of the outstanding Common Stock of FRI and are the
principal shareholders of FRI. FRI and the Principal Shareholders may be
deemed to be, for purposes of Rule 13d-3 under the 1934 Act, the beneficial
owner of securities held by persons and entities advised by FRI and it
subsidiaries. FRI, the Principal Shareholders and each of the Advisor
Subsidiaries has disclaimed any economic interest or beneficial ownership in
any of the above shares.
10
<PAGE> 13
According to the Schedule 13G, Templeton Global Advisors Limited has the
sole power to vote or to direct the vote and the sole power to dispose or
direct the disposition of 1,145,500 shares and Franklin Mutual Advisors,
Inc. has the sole power to vote or to direct the vote and the sole power to
dispose or direct the disposition of 428,175 shares of the Company's stock.
SECURITY OWNERSHIP OF MANAGEMENT
Shown below is information concerning the beneficial ownership of the
Company's Common Stock for each director and for all directors and officers as a
group as of December 31, 1996. Under Rules of the Securities and Exchange
Commission, beneficial ownership and quotes is deemed to include shares for
which the individual, directly or indirectly, has or shares voting and/or
dispositive power.
<TABLE>
<CAPTION>
SOLE VOTING SHARED VOTING PERCENT OF
NAME DISPOSITIVE POWER DISPOSITIVE POWER CLASS(1)
- ---- ----------------- ----------------- ----------
<S> <C> <C> <C>
J. C. Belin.................................. 9,255 21,291,900(2) 69.8
E. C. Brownlie............................... 291(3) *
J. M. Jones, Jr.............................. 154(3) *
R. E. Nedley................................. 125 *
R. B. Newton, Jr............................. 2,000 *
W. L. Revell................................. 100 *
J. J. Quindlen............................... 200 *
W. L. Thornton............................... 21,293,629(2)(3) 69.8
J. D. Uible.................................. 1,000 *
Directors and Officers as a Group............ 63,239(4) 21,306,414(2)(5) 69.9
</TABLE>
- ---------------
(1) All percentages are rounded to the nearest tenth of one percent. An
asterisk(*) indicates that the percentage is less than one-half of one
percent.
(2) Includes 20,547,764 shares or 67.3% of the Company's common stock owned by
the Trust of which the named individuals are trustees and 744,136 shares or
2.5% owned by The Nemours Foundation of which the named individuals are
directors.
(3) Includes shares held in the accounts of the named individuals in the St. Joe
Paper Company Salary Deferral Plan "the Salary Deferral Plan" for which the
participants have sole dispositive power and the trustee of the Plan has
sole voting power. Of the shares shown for W. L. Thornton, 729 are held in
the Salary Deferral Plan.
(4) Includes 52,784 (.17%) shares held in the St. Joe Paper Company Employee
Stock Ownership Plan for which the trustee of the Plan has sole voting and
dispositive power.
(5) Includes 13,944 (.05%) shares held in the Salary Deferral Plan for which the
Trustee of the Plan has sole voting power and the participants have sole
dispositive power. The trustee of this plan and the St. Joe Paper Company
Employee Stock Ownership Plan is Ronald A. Anderson, Corporate Secretary of
the Company.
CERTAIN TRANSACTIONS
EMPLOYMENT AGREEMENTS
PETER S. RUMMELL. On January 7, 1997, the Company entered into an
Employment Agreement (the "Agreement") with Peter S. Rummell, its Chairman of
the Board and Chief Executive Officer. The Agreement has a five-year term but
may be terminated earlier under certain circumstances. The Agreement provides
for a salary of not less than $600,000 per year and a performance-based
incentive bonus ranging from 0% to 100% of salary, except that the potential
bonus for the year 1997 is $250,000 and is contingent upon the timely submission
to, and acceptance by, the Board of Directors, of a business plan for the
Company. The Agreement also provides for the reimbursement of relocation costs
and related income taxes.
Pursuant to the Agreement, the Company has granted Mr. Rummell an option to
purchase 1.2 million shares of the Company's Common Stock under the Company's
1997 Stock Incentive plan (the "Incentive Plan"). (See "Proposal No. 2 for more
information on the Incentive Plan). The exercise price of the option is $64.50
per share,
11
<PAGE> 14
which was equal to the closing price of the Company's Common Stock on the day
preceding the execution of the Agreement. The exercise price is adjusted
equitably in the event that the Company makes a partial liquidation distribution
to its shareholders. The option becomes exercisable in equal installments on the
first five anniversaries of the date of grant, but the entire option becomes
exercisable in the event that the Company terminates Mr. Rummell's employment
without cause, in the event of Mr. Rummell's death or in the event that the
Company is subject to a change in control. (See "Proposal Number 2" for a
summary of the definition of "change in control.") In the event that the Company
terminates Mr. Rummell's employment because of his disability, the option
becomes exercisable to the extent it would have become exercisable within 12
months after the termination if employment had continued. The option expires 10
years after the date of grant or two years after Mr. Rummell's death, whichever
is earlier.
Under the Agreement, the Company has also granted Mr. Rummell 67,287
restricted shares of its Common Stock under the Incentive Plan. The restricted
shares are intended to compensate Mr. Rummell for the value of the stock options
he forfeited upon resigning his position with his former employer, based on the
closing prices of the two Companys' Common Stock on the day preceding the
execution of the Agreement. The restricted shares vest in equal installments on
the first five anniversaries of the date of grant but the entire award vests in
the event that the Company terminates Mr. Rummell's employment without cause, in
the event of Mr. Rummell's death or disability or in the event that the Company
is subject of a change in control. If Mr. Rummell's employment terminates for
any other reason, he forfeits any restricted shares that have not vested.
The Company may terminate Mr. Rummell's employment at any time for cause
(as defined in the Agreement), in which event no further compensation is due.
The Company may also terminate Mr. Rummell's employment if he has been disabled
for more than six months, in which event no further cash compensation is due but
benefit coverage continues for the remaining term of the Agreement and the
option and restricted shares vest to the extent described above. Following a
change in control, Mr. Rummell may resign for good reason and receive his salary
for the balance of the term of the Agreement., "Good Reason" means a demotion, a
reduction in compensation or a relocation. For one year following a resignation
for good reason, the Agreement precludes Mr. Rummell from competing with the
Company in certain respects.
ROBERT M. RHODES. On February 25, 1997, the Board of Directors approved an
Employment Agreement (the "Agreement") with Robert M. Rhodes, the Company's
Senior Vice President and General Counsel. The Agreement provides that Mr.
Rhodes is an employee "at will". The Agreement provides for a salary of
$275,000.00 and a performance based incentive bonus ranging from 0% to 60% of
salary, except that the potential bonus for 1997 is not less than $100,000. The
Agreement also provides for the reimbursement of relocation costs and related
income taxes.
Pursuant to the Agreement, the Company has granted Mr. Rhodes an option to
purchase 50,000 shares of the Company's Common Stock under the Company's 1997
Stock Incentive Plan (the "Incentive Plan"). (See "Proposal No. 2" for more
information on the Incentive Plan). The exercise price of the option is $77.50
per share, which was equal to the closing price of the Company's Common Stock on
the day preceding Mr. Rhodes first day of employment. The exercise price is
adjusted equitably in the event that the Company makes a partial liquidation
distribution to its shareholders. The option becomes exercisable in equal
installments on the first five anniversaries of the date of grant, but the
entire option becomes exercisable in the event that the Company terminates Mr.
Rhodes employment without cause, in the event of Mr. Rhodes's death or in the
event that the Company is subject to a change in control. (See "Proposal No. 2"
for a summary of the definition of "change in control.") The option expires 10
years after the date of grant.
The Agreement provides that, in the event the Company terminates Mr.
Rhodes's employment for any reason other than for cause or disability, Mr.
Rhodes will receive severance pay in a lump sum in an amount equal to 150% of
Mr. Rhodes salary, plus 50% of any bonus awarded to Mr. Rhodes in the year prior
to the termination. However, if the termination occurs within 12 months after a
change in control (See "Proposal No. 2" for a summary of the definition of
"change in control.") Mr. Rhodes will receive severance pay in a lump sum in an
amount equal to 200% of Mr. Rhodes's salary, plus 75% of any bonus awarded to
Mr. Rhodes in the year prior to the termination.
12
<PAGE> 15
MICHAEL F. BAYER. On February 25, 1997, the Board of Directors approved an
Employment Agreement (the "Agreement") with Michael F. Bayer, the Company's Vice
President -- Human Resources and Administration. The Agreement provides that Mr.
Bayer is an employee "at will". The Agreement provides for a salary of
$167,500.00 and a performance based incentive bonus ranging from 0% to 60% of
salary. The Agreement also provides for the reimbursement of relocation costs
and related income taxes.
Pursuant to the Agreement, the Company has granted Mr. Bayer an option to
purchase 25,000 shares of the Company's Common Stock under the Company's 1997
Stock Incentive Plan (the "Incentive Plan"). (See "Proposal No. 2" for more
information on the Incentive Plan). The exercise price of the option is $74.50
per share, which was equal to the closing price of the Company's Common Stock on
the day preceding the day the Board approved the Agreement. The exercise price
is adjusted equitably in the event that the Company makes a partial liquidation
distribution to its shareholders. The option becomes exercisable in equal
installments on the first five anniversaries of the date of grant, but the
entire option becomes exercisable in the event that the Company terminates Mr.
Bayer employment without cause, in the event of Mr. Bayer's death or in the
event that the Company is subject to a change in control. (See "Proposal No. 2"
for a summary of the definition of "change in control.") The option expires 10
years after the date of grant.
The Agreement provides that, in the event the Company terminates Mr.
Bayer's employment for any reason other than for cause or disability, Mr. Bayer
will receive severance pay in a lump sum in an amount equal to 100% of Mr.
Bayer's salary, plus 50% of any bonus awarded to Mr. Bayer in the year prior to
the termination. However, if the termination occurs within 12 months after a
change in control (See "Proposal No. 2" for a summary of the definition of
"change in control.") Mr. Bayer will receive severance pay in a lump sum in an
amount equal to 100% of Mr. Bayer's salary, plus 75% of any bonus awarded to Mr.
Bayer in the year prior to the termination.
J. MALCOM JONES. The Company has granted Mr. Jones an option to purchase
25,000 shares of the Company's Common Stock under the Company's 1997 Stock
Incentive Plan (the "Incentive Plan"). (See "Proposal No. 2" for more
information on the Incentive Plan). The exercise price of the option is $74.50
per share, which was equal to the closing price of the Company's Common Stock on
the day preceding the day the Board approved the Grant. The exercise price is
adjusted equitably in the event that the Company makes a partial liquidation
distribution to its shareholders. The option becomes exercisable in equal
installments on the first five anniversaries of the date of grant. The option
expires 10 years after the date of grant.
EARLY RETIREMENT PROGRAM
On February 25, 1997, the Board of Directors adopted a resolution amending
the Company's Pension Plan. Effective March 1, 1997, the Plan was amended as
follows:
1. Effective for participants who are active employees of the
Corporation on or after March 1, 1997, benefit service shall be credited
for periods of employment with any company in which the Corporation owned
50% or more of the common stock during such periods of employment.
2. Effective for participants who are active employees of the
Corporation on or after March 1, 1997, a participant who has attained age
62 and has earned 30 or more years of vesting service, or whose age and
years of vesting service when added together equal at least 92, shall be
eligible to retire and receive the Accrued Benefit not reduced for early
payment.
3. Effective March 1, 1997, enhanced early retirement benefits shall
be offered to all participants who are active employees as of February 28,
1997, who have attained age 55 and earned 27 or more years of vesting
service, or whose age and vesting service, when added together, equal at
least 82 ("rule of 82" retirement), and who elect to retire on or before
June 30, 1997, or 45 days after the employee's receipt of written
notification of eligibility for such enhanced benefits, if later. Any
employee who is still employed but disabled shall be presumed to be age 60
for purposes of the age-plus-service eligibility test.
13
<PAGE> 16
The enhanced retirement benefits shall include:
(a) benefit service credit granted as if the participant's
employment had continued until the normal retirement date;
(b) earnings during the additional period of benefit service deemed
to continue at the participant's current salary rate (excluding any
bonuses) for purposes of determining final average earnings;
(c) immediate payment of the accrued benefit, unreduced for early
payment commencement;
(d) a temporary Social Security supplement of 80% of the
participant's current estimated Primary Social Security amount payable
monthly until the participant attains age 62, and in the event of the
participant's earlier death, the remainder of such monthly payments
payable in a single sum to the participant's designated beneficiary;
(e) a temporary supplement of $500.00 per month for participants
with dependents, or $250.00 per month for single participants payable
monthly until the participant attains age 65, and in the event of the
participant's earlier death, continuing to be payable to the
participant's beneficiary until the date the participant would have
attained age 65. The intent of the supplement is to approximate the
before-tax-cost of a premium for medical insurance.
4. Effective March 1, 1997, enhanced early retirement benefits shall
be offered to all participants who are active employees as of February 28,
1997, who have attained age 55 and earned 15 or more years of vesting
service, or whose age and vesting service, when added together, equal at
least 70 ("rule of 70" retirement), and who elect to retire on or before
June 30, 1997, or 45 days after the employee's receipt of written
notification of eligibility for such enhanced benefits, if later.
The enhanced retirement benefits shall include:
(a) five years of benefit service credit granted as if the
participant's employment had continued for five years;
(b) Earnings during the additional period of benefit service deemed
to continue at the participant's current salary rate (excluding any
bonuses) for purposes of determining final average earnings;
(c) immediate payment of the accrued benefit, unreduced for early
payment commencement.
INTERIM SEVERANCE PROGRAM
On February 25, 1997, the Board of Directors approved an Interim Severance
Program. The program is available to all employees (including early and regular
retirees) who elect to leave employment with the Company prior to May 2, 1997.
These employees will receive a severance payment equivalent to two weeks of
salary at their regular rate times their number of years of service, with a
minimum of six weeks pay and a maximum of 40 weeks pay. Partial years will be
credited on a prorated quarterly formula. The Company will provide COBRA
coverage at Company cost for 18 months or until the employee is covered by
another plan, whichever comes first. All accrued vacation is included in the
severance payment.
FLORIDA EAST COAST INDUSTRIES, INC.
Florida East Coast Industries, Inc. (FECI), in which the Company
beneficially owns 54% of the outstanding shares of common stock, appointed a
Special Committee of the Board of Directors (the "FECI Special Committee") to
consider whether its railroad transportation business now owned by its wholly
owned subsidiary, Florida East Coast Railway Company (FEC), should be disposed
of in a merger or sale transaction. The FECI Special Committee reached the
conclusion that a disposition should be pursued but only under certain
conditions. The FECI Special Committee advised the Company that the FECI Special
Committee would not pursue a disposition of the railroad unless the FECI Special
Committee had adequate assurance that the remaining business of FECI, the real
estate operations conducted by its wholly owned subsidiary, Gran Central
Corporation (GCC), could also be disposed of on acceptable terms.
14
<PAGE> 17
The FECI Special Committee has recognized that it might be possible for
FECI to merge with another company with substantial railroad operations in a
transaction in which no gain or loss would be recognized to FECI or its
shareholders. FECI believes that the likelihood of such a merger is
significantly lessened as long as GCC remains a FECI subsidiary. The Company has
indicated to FECI that, if a merger of FECI with another corporation, on terms
acceptable to the Company, would be facilitated by an exchange of GCC stock for
the FECI stock held by the Company, the Company would be willing to consider a
tax free exchange of shares of FECI stock it owns for all of the shares of GCC
stock held by FECI.
The Company and FECI each hired an appraisal firm to assist in evaluating
the property of GCC, and the Company and FECI have conducted negotiations on the
possible terms of an exchange. The terms of an exchange have not yet been agreed
upon; and before proceeding with discussions concerning either the acquisition
of GCC or the disposition of FECI's railroad transportation business, the
Special Committee of the Company's Board of Directors is providing the Company's
new Chairman and Chief Executive Officer an opportunity to review the possible
transactions and report his views to the Special Committee. Accordingly, there
can be no assurance when, if and on what terms the Company may acquire GCC from
FECI or a disposition of FEC may be made.
President Clinton's Proposed Fiscal 1998 Budget and implementing
legislation (the "Proposed Budget") and could have a substantial and adverse
effect upon a merger of FECI with another company subsequent to the acquisition
of GCC common stock by the Company in exchange for FECI common stock. The
Proposed Budget would amend current laws to provide that a merger of FECI with
another company within two years of the exchange of GCC common stock for FECI
common stock, pursuant to which the FECI shareholders would own less than fifty
percent of the voting power, and less than fifty percent of the value of the
stock of the surviving company, could cause FECI to recognize gain on the
exchange of the GCC common stock. The gain would be measured by the difference
between the fair market value of the GCC common stock and FECI's adjusted tax
basis in such stock. If enacted, the Proposed Budget would be effective for
distributions made after the date of first Congressional Committee action to
amend the current law. There can be no assurance that the Proposed Budget will
be enacted by Congress, and if enacted, the final form of the legislation.
Accordingly, there can be no assurance when, if, and on what terms a
transaction including FECI and another corporation may be made, or sale of FEC
or GCC, may be made. Also, there can be no assurance when, if and on what terms
the Company may acquire GCC from FECI.
PROPOSAL NO. 2
APPROVAL OF THE 1997 STOCK INCENTIVE PLAN
HISTORY OF THE PLAN. The Company's 1997 Stock Incentive Plan (the
"Incentive Plan") was adopted by the Board of Directors in January of 1997. It
became effective on January 7, 1997, subject to the approval of the
shareholders. The Board of Directors may amend or terminate the Incentive Plan
at any time and for any reason. Amendments require the approval of the Company's
shareholders only to the extent provided by applicable laws, regulations or
rules.
The key provisions of the Incentive Plan are summarized below. This
summary, however, is not intended to be a complete description of all terms of
the Incentive Plan. A copy of the plan text will be furnished to any shareholder
upon request. Such a request should be directed to the Corporate Secretary at
the Company's principal executive office.
ADMINISTRATION AND ELIGIBILITY. The Incentive Plan is administered by the
Compensation Committee of the Board of Directors. The Compensation Committee
also selects the individuals who receive awards, determines the size of any
award and establishes any vesting or other conditions. Employees and
non-employee directors of the Company are eligible to participate in the
Incentive Plan, although incentive stock options may be granted only to
employees.
FORM OF AWARDS. The Incentive Plan provides for awards in the form of
restricted shares or options. No payment is required upon receipt of an award,
except that a recipient of newly issued restricted shares may be required to pay
the par value of such restricted shares to the Company.
15
<PAGE> 18
RESTRICTED SHARES. Restricted shares are shares of Common Stock that are
subject to forfeiture in the event that the applicable vesting conditions are
not satisfied Restricted shares have the same voting and dividend rights as
other shares of Common Stock.
OPTIONS. Options may include nonstatutory stock options ("NSOs") as well
as incentive stock options ("ISOs") intended to qualify for special tax
treatment. The term of an option cannot exceed 10 years, and the exercise price
must be equal to or greater than the fair market value of the Common Stock on
the date of grant. As of March 31, 1997, the closing price of the Company's
Common Stock on the New York Stock Exchange Composite Transactions Report was
$73 7/8 per share.
The exercise price of an option may be paid in any lawful form permitted by
the Compensation Committee, including (without limitation) a full-recourse
promissory note or the surrender of shares of Common Stock or restricted shares
already owned by the optionee. The Compensation Committee may likewise permit
optionees to satisfy their withholding tax obligation upon exercise of an NSO by
surrendering a portion of their option shares to the Company. The Incentive Plan
also allows the optionee to pay the exercise price of an option by giving
"exercise/sale" or "exercise/pledge" directions. If exercise/sale directions are
given, a number of option shares sufficient to pay the exercise price and any
withholding taxes is issued directly to a securities broker selected by the
Company, who, in turn, sells these shares in the open market. The broker remits
to the Company the proceeds from the sale of these shares, and the optionee
receives the remaining option shares. If exercise/pledge directions are given,
the option shares are issued directly to a securities broker or other lender
selected by the Company. The broker or other lender holds the shares as security
and extends credit for up to 50% of their market value. The loan proceeds are
paid to the Company to the extent necessary to pay the exercise price and any
withholdings taxes. Any excess loan proceeds may be paid to the optionee. If the
loan proceeds are insufficient to cover the exercise price and withholding
taxes, the optionee is required to pay the deficiency to the Company at the time
of exercise.
The Committee may at any time offer to buy out an outstanding option for
cash or give an optionee the right to surrender his or her option for cash.
VESTING CONDITIONS. As noted above, the Compensation Committee determines
the number of restricted shares or options to be included in the award as well
as the vesting and other conditions. The vesting conditions may be based on the
length of the recipient's service, his or her individual performance, the
Company's performance or other appropriate criteria. Vesting may be accelerated
in the event of the recipient's death, disability or retirement or in the event
of a change in control with respect to the Company.
For purposes of the Incentive Plan, the term "change in control" means
generally that (i) any person or group, other than the Alfred I. duPont
Testamentary Trust (the "Trust"), and the Nemours Foundation (the "Foundation"),
acquires 30% or more of the outstanding voting stock of the Company and the
Trust and the Foundation no longer own more voting stock than such person or
group, (ii) the Company is a party to a merger or similar transaction as a
result of which the Company's shareholders own 50% or less of the surviving
entity's voting securities or (iii) shareholders other than the Trust and the
Foundation cause a change of 50% or more in the composition of the Board of
Directors in a contested election of directors. For purposes of the Incentive
Plan, no "change in control" can occur as long as the combined ownership of the
Trust and the Foundation exceeds 50% of the Company's outstanding voting stock.
MODIFICATION OF AWARDS. The Compensation Committee is authorized, within
the provisions of the Incentive Plan, to amend the terms of outstanding
restricted shares, to modify or extend outstanding options or to exchange new
options for outstanding options, including outstanding options with a higher
exercise price than the new options.
GRANTS TO NON-EMPLOYEE DIRECTORS. Members of the Company's Board of
Directors who are not employees of the Company may receive option grants under
the Incentive Plan. The exercise price of all options that may be granted to
non-employee directors is equal to the market value of Common Stock on the date
of grant.
NUMBER OF RESERVED SHARES. The total amount of restricted shares and
options available for grant under the Incentive Plan is 1.85 million (subject to
anti-dilution adjustments). If any restricted shares or options are
16
<PAGE> 19
forfeited, or if options terminate for any other reason prior to exercise, then
they again become available for awards. No individual may receive options
covering more than one million shares in any calendar year (subject to
anti-dilution adjustments), except that the limit is 1.5 million for a new
employee in the year in which he or she is hired.
Awards under the Incentive Plan are discretionary. Therefore, it is not
possible to determine the benefits what will be received in the future by
participants in the Incentive Plan or the benefits that would have been received
by such participants if the Incentive Plan had been in effect in 1996. To date,
the following options have been granted under the Incentive Plan (subject to
shareholder approval):
NEW PLAN BENEFITS
1997 STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
NUMBER OF SHARES
GROUP COVERED BY OPTIONS
- ----- ------------------
<S> <C>
All Current Executive Officers as a Group................... 1.3 million
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS. Neither the optionee nor the
Company incurs any federal tax consequences as a result of the grant of an
option. The optionee has no taxable income upon exercising an ISO (except that
the alternative minimum tax may apply), and the Company receives no deduction
when an ISO is exercised. Upon exercising an NSO, the optionee generally must
recognize ordinary income equal to the "spread" between the exercise price and
fair market value of Common Stock on the date of exercise; the Company
ordinarily will be entitled to a deduction for the same amount. In the case of
an employee, the option spread at the time an NSO is exercised is subject to
income tax withholding, but the optionee generally may elect to satisfy the
withholding tax obligation by having shares of Common Stock withheld from those
purchased under the NSO. The tax treatment of a disposition of option shares
acquired under the Incentive Plan depends on how long the shares have been held
and on whether such shares were acquired by exercising an ISO or by exercising a
NSO. The Company is not entitled to a deduction in connection with a disposition
of options shares, except in the case of a disposition of shares acquired under
an ISO before the applicable ISO holding periods have been satisfied.
RECOMMENDATION OF THE BOARD OF DIRECTORS -- THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1997 STOCK INCENTIVE PLAN.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The firm of KPMG Peat Marwick L.L.P. has been Company's Accountant of
record since August, 1990, and Company is expected to select that firm for the
audit of the current fiscal year's records. It is expected that a representative
of KPMG Peat Marwick L.L.P. will be present at the Annual Meeting to answer
shareholders's questions and will be given an opportunity to make a statement.
17
<PAGE> 20
OTHER MATTERS
The Board of Directors does not know of any other business to be presented
at the Annual Meeting; however, if any other matters come before the Annual
Meeting comes, it is the intention of the persons named in the accompanying
Proxy to vote pursuant to the Proxy in accordance with their judgment in such
matters.
BY ORDER OF THE BOARD OF DIRECTORS,
--------------------------------------
/s/ Robert M. Rhodes
Robert M. Rhodes
Senior Vice President and General
Counsel
Dated April 11, 1997.
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<PAGE> 21
APPENDIX A
ST. JOE CORPORATION
1997 STOCK INCENTIVE PLAN
(AS ADOPTED EFFECTIVE JANUARY 7, 1997)
<PAGE> 22
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1. INTRODUCTION ................................................... 1
ARTICLE 2. ADMINISTRATION ................................................. 1
2.1 Committee Composition ................................................ 1
2.2 Committee Responsibilities ........................................... 1
ARTICLE 3. SHARES AVAILABLE FOR GRANTS .................................... 1
3.1 Basic Limitation ..................................................... 1
3.2 Additional Shares .................................................... 2
ARTICLE 4. ELIGIBILITY .................................................... 2
4.1 Nonstatutory Stock Options and Restricted Shares ..................... 2
4.2 Incentive Stock Options .............................................. 2
ARTICLE 5. OPTIONS ........................................................ 2
5.1 Stock Option Agreement ............................................... 2
5.2 Number of Shares ..................................................... 2
5.3 Exercise Price ....................................................... 2
5.4 Exercisability and Term .............................................. 2
5.5 Effect of Change in Control .......................................... 3
5.6 Modification or Assumption of Options ................................ 3
5.7 Buyout Provisions .................................................... 3
ARTICLE 6. PAYMENT FOR OPTION SHARES ...................................... 3
6.1 General Rule ......................................................... 3
6.2 Surrender of Stock ................................................... 3
6.3 Exercise/Sale ........................................................ 3
6.4 Exercise/Pledge ...................................................... 4
6.5 Promissory Note ...................................................... 4
6.6 Other Forms of Payment ............................................... 4
ARTICLE 7. RESTRICTED SHARES .............................................. 4
7.1 Time, Amount and Form of Awards ...................................... 4
7.2 Payment for Awards ................................................... 4
7.3 Vesting Conditions ................................................... 4
7.4 Voting and Dividend Rights ........................................... 4
ARTICLE 8. PROTECTION AGAINST DILUTION .................................... 5
8.1 Adjustments .......................................................... 5
8.2 Dissolution or Liquidation ........................................... 5
8.3 Reorganization ....................................................... 5
</TABLE>
<PAGE> 23
<TABLE>
<S> <C>
ARTICLE 9. AWARDS UNDER OTHER PLANS ....................................... 5
ARTICLE 10. LIMITATION ON RIGHTS .......................................... 6
10.1 Retention Rights .................................................... 6
10.2 Stockholders' Rights ................................................ 6
10.3 Regulatory Requirements ............................................. 6
ARTICLE 11. WITHHOLDING TAXES ............................................. 6
11.1 General ............................................................. 6
11.2 Share Withholding ................................................... 6
ARTICLE 12. FUTURE OF THE PLAN ............................................ 7
12.1 Term of the Plan .................................................... 7
12.2 Amendment or Termination ............................................ 7
ARTICLE 13. DEFINITIONS ................................................... 7
ARTICLE 14. EXECUTION ..................................................... 9
</TABLE>
ii
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ST. JOE CORPORATION
1997 STOCK INCENTIVE PLAN
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board effective January 7, 1997. The
purpose of the Plan is to promote the long-term success of the Company and the
creation of stockholder value by (a) encouraging Employees and Outside Directors
to focus on critical long-range objectives, (b) encouraging the attraction and
retention of Employees and Outside Directors with exceptional qualifications (c)
linking Employees and Outside Directors directly to stockholder interests
through increased stock ownership. The Plan seeks to achieve this purpose by
providing for Awards in the form of Restricted Shares or Options.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Florida (excluding their choice-of-law provisions).
ARTICLE 2. ADMINISTRATION
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Company, who shall be appointed by the Board. In addition, the composition
of the Committee shall satisfy;
(a) Such requirements as the Securities and Exchange Commission
may establish for administrators acting under plans intended to qualify for
exemption under rule 16b-3 (or its successor) under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify for
exemption under section 162(m)(4)(C) of the Code.
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the
Employees and Outside Directors who are to receive Awards under the Plan, (b)
determine the type, number, vesting requirements and other features and
conditions of such Awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan. The
Committee's determinations under the Plan shall be final and bidning on all
persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may
be authorized but unissued shares or treasury shares. The aggregate number of
Options and Restricted Shares Awarded under the Plan shall not exceed
1,850,000. The limitations of this Section 3.1 shall be subject to adjustment
pursuant to Article 8.
<PAGE> 25
3.2. ADDITIONAL SHARES. If Options are forfeited or terminate for
any other reason before being exercised, then the corresponding Common Shares
shall again become available for the grant of Options and Restricted Shares
under the Plan. If Restricted Shares are forfeited, then the corresponding
Common Shares shall again become available for the grant of NSOs and Restricted
Shares (but not ISOs) under the Plan.
ARTICLE 4. ELIGIBILITY.
4.1. NONSTATUTORY STOCK OPTIONS AND RESTRICTED SHARES. Only
Employees and Outside Directors shall be eligible for the grant of NSOs and
Restricted Shares.
4.2. INCENTIVE STOCK OPTIONS. Only Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. In addition, an Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.
ARTICLE 5. OPTIONS.
5.1. STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are consistent with the Plan. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a cash
payment or in consideration of a reduction in the Optionee's other
compensation.
5.2. NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 8. Options granted to any
Optionee in a single fiscal year of the Company shall not cover more than
1,000,000 Common Shares, except that Options granted to a new Employee in the
fiscal year of the Company in which his or her service as an Employee first
commences shall not cover more than 1,500,000 Common Shares. The limitations
set forth in the preceding sentence shall be subject to adjustment in
accordance with Article 8.
5.3. EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price shall in no event be less than
100% of the Fair Market Value of a Common Share on the most recent trading day
before the date of grant. In the case of an NSO, a Stock Option Agreement may
specify an Exercise Price that varies in accordance with a predetermined
formula while the NSO is outstanding.
5.4. EXERCISABILITY AND TERM. Each Stock Option Agreement shall
specify the date or event when all or any installment of the Option is to
become exercisable. The Stock Option Agreement shall also specify the term of
the Option; provided that the term of an Option
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<PAGE> 26
shall in no event exceed 10 years from the date of grant. A Stock Option
Agreement may provide for accelerated excercisability in the event of the
Optionee's death, disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee's service.
5.5. EFFECT OF CHANGE IN CONTROL. The Committee may determine, at
the time of granting an Option or thereafter, that all or part of such Option
shall become exercisable as to all Common Shares subject to such Option in the
event that a Change in Control occurs with respect to the Company.
5.6. MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations
of the Plan, the Committee may modify, extend or assume outstanding Options or
may accept the cancellation of outstanding Options (whether granted by the
Company or by another issuer) in return for the grant of new Options for the
same or a different number of shares and at the same or a different exercise
price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option.
5.7. BUYOUT PROVISIONS. The Committee may at any time (a) offer to
buy out for a payment in cash or cash equivalents an Option previously granted
or (b) authorize an Optionee to elect to cash out an Option previously granted,
in either case at such time and based upon such terms and conditions as the
Committee shall establish.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
6.1. GENERAL RULE. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash or cash equivalents at the
time when such Common Shares are purchased, except that the Stock Option
Agreement may specify that payment may be made in any form(s) described in this
Article 6.
6.2. SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which are already owned by the Optionee. Such Common Shares shall
be valued at their Fair Market Value on the most recent trading day before the
date when the new Common Shares are purchased under the Plan. The Optionee
shall not surrender Common Shares in payment of the Exercise Price if such
surrender would cause the Company to recognize compensation expense with
respect to the Option for financial reporting purposes.
6.3. EXERCISE/SALE. To the extent that this Section 6.3 is
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by the
Company to sell Common Shares and to deliver all or part of the sales proceeds
to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
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<PAGE> 27
6.4. EXERCISE/PLEDGE. To the extent that this Section 6.4 is
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Common Shares to a securities
broker or lender approved by the Company, as security for a loan, and to
deliver all or part of the loan proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.
6.5. PROMISSORY NOTE. To the extent that this Section 6.5 is
applicable, payment may be made with a full-recourse promissory note.
6.6. OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
ARTICLE 7. RESTRICTED SHARES.
7.1. TIME, AMOUNT AND FORM OF AWARDS. Each grant of Restricted Shares
under the Plan shall be evidenced by a restricted Stock Agreement between the
recipient and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are
consistent with the Plan. The provisions of the various restricted Stock
Agreements need not be identical.
7.2. PAYMENT FOR AWARDS. To the extent that an Award is granted in
the form of Restricted Shares, the Award recipient, as a condition to the grant
of such Award, may be required to pay the Company in cash or cash equivalents
an amount equal to the par value of such Restricted Shares.
7.3. VESTING CONDITIONS. Each Award of Restricted Shares may or may
not be subject to vesting. Vesting shall occur, in full or in installments,
upon satisfaction of the conditions specified in the Stock Award Agreement. The
Committee may include among such conditions the requirement that the
performance of the Company or a business unit of the Company (as determined by
the Company's independent auditors) for a specified period of one or more years
equal or exceed a target determined in advance by the Committee. Such target
shall be based on one or more of the criteria set forth in Schedule A. The
Committee shall determine such target not later than the 90th day of such
period. In no event shall the number of Restricted Shares which are subject to
performance-based vesting conditions and which are granted to any Participant in
a single calendar year exceed 500,000, subject to adjustment in accordance with
Article 8. A Stock Award Agreement may provide for accelerated vesting in the
event of the Participant's death, disability or retirement or other events. The
Committee may determine, at the time of granting Restricted Shares or
thereafter, that all or part of such Restricted Shares shall become vested in
the event that a Change in Control occurs with respect to the Company.
7.4. VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders. A Stock Award Agreement, however, may require
that the holders of Restricted
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<PAGE> 28
Shares invest any cash dividends received in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid.
ARTICLES. PROTECTION AGAINST DILUTION.
8.1. ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spinoff
or a similar occurrence, the Committee shall make such equitable adjustments as
it, in its sole discretion, deems appropriate in one or more of (a) the number
of Options and Restricted Shares available for future Awards under Article 3,
(b) the limitations set forth in Section 5.2, (c) the number of Common Shares
covered by each outstanding Option or (d) the Exercise Price under each
outstanding Option. Except as provided in this Article 8, a Participant shall
have no rights by reason of any issue by the Company of stock of any class or
securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class.
8.2. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Committee shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Committee in its discretion may provide for an Optionee to
have the right to exercise his or her Options until 10 days prior to such
transaction as to some or all of the Common Shares covered thereby, including
Common Shares as to which the Options would not otherwise be exercisable. In
addition, the Committee may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or to any
Restricted Shares shall lapse as to some or all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent not previously exercised, Options shall terminate
immediately prior to the consummation of such proposed action.
8.3. REORGANIZATION. In the event that the Company is a party to a
merger or other reorganization, outstanding Options and Restricted Shares shall
be subject to the agreement of merger or reorganization. Such agreement may
provide, without limitation, for the continuation of outstanding Awards by the
Company (if the Company is a surviving corporation), for their assumption by
the surviving corporation or its parent or subsidiary, for the substitution by
the surviving corporation or its parent or subsidiary of its own awards for
such Awards, for accelerated vesting and accelerated expiration, or for
settlement in cash or cash equivalents.
ARTICLE 9. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such
awards may be settled in the form of Common Shares issued under this Plan. Such
Common Shares
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<PAGE> 29
shall be treated for all purposes under the Plan like Restricted Shares and
shall, when issued, reduce the number of Common Shares available for the grant
of Restricted Shares under Article 3.
ARTICLE 10. LIMITATION ON RIGHTS.
10.1. RETENTION RIGHTS. Neither the Plan nor any Award granted under
the Plan shall be deemed to give any individual a right to remain an Employee or
Outside Director. The Company and its Parents, Subsidiaries and Affiliates
reserve the right to terminate the service of any Employee or Outside Director
at any time, with or without cause, subject to applicable laws, the Company's
certificate of incorporation and bylaws and a written employment agreement (if
any).
10.2. STOCKHOLDERS' RIGHTS. A Participant shall have no dividend
rights, voting rights or other rights as a stockholder with respect to any
Common Shares covered by his or her Award prior to the time when a stock
certificate for such Common Shares is issued or, in the case of an Option, the
time when he or she becomes entitled to receive such Common Shares by filing a
notice of exercise and paying the Exercise Price. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to such
time, except as expressly provided in the Plan.
10.3. REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to
the issuance of such Common Shares, to their registration, qualification or
listing or to an exemption from registration, qualification or listing.
ARTICLE 11. WITHHOLDING TAXES.
11.1 General. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The Company
shall not be required to issue any Common Shares or make any cash payment under
the Plan until such obligations are satisfied.
11.2. SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that
otherwise would be issued to him or her or by surrendering all or a portion of
any Common Shares that he or she previously acquired. Such Common Shares shall
be valued at their Fair Market Value on the most recent trading day before the
date when taxes otherwise would be withheld in cash.
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ARTICLE 12. FUTURE OF THE PLAN.
12.1. TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on January 7, 1997. The Plan shall remain in effect until it is
terminated under Section 12.2, except that no ISOs shall be granted after
January 6, 2007.
12.2. AMENDMENT OR TERMINATION. The Board may, at any time and for
any reason, amend or terminate the Plan. An amendment of the Plan shall be
subject to the approval of the Company's stockholders only to the extent
required by applicable laws, regulations or rules. No Awards shall be granted
under the Plan after the termination thereof. The termination of the Plan, or
any amendment thereof, shall not affect any Award previously granted under the
Plan.
ARTICLE 13. DEFINITIONS.
13.1. "AFFILIATE" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.
13.2. "AWARD" means any award of an Option or a Restricted Share
under the Plan.
13.3. "BOARD" means the Company's Board of Directors, as constituted
from time to time.
13.4. "CHANGE IN CONTROL" means that:
(a) 30% or more of the outstanding voting stock of the Company
is acquired by any person or group other than the Alfred I. DuPont
Testamentary Trust and the Nemours Foundation, except that this Subsection (a)
shall not apply as long as the Alfred I. DuPont Testamentary Trust or the
Nemours Foundation, or any combination of both, owns more voting stock than
such person or group; or
(b) Stockholders of the Company other than the Alfred I.
DuPont Testamentary Trust and the Nemours Foundation vote in a contested
election for directors of the Company and through exercise of their votes cause
the replacement of 50% or more of the Company's directors (the mere change of
50% or more of the members of the Board does not cause a Change in Control
unless it occurs as a result of a contested election); or
(c) The Company is a party to a merger or similar transaction
as a result of which the Company's stockholders own 50% or less of the
surviving entity's voting securities after such merger or similar transaction.
No Change in Control occurs in any event as long as the combined
ownership of the Alfred I. DuPont Testamentary Trust and the Nemours
Foundation exceeds 50% of the outstanding voting stock of the Company.
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<PAGE> 31
A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Company's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such transaction.
13.5. "CODE" means the Internal Revenue Code of 1986, as amended.
13.6. "COMMITTEE" means the Compensation Committee of the Board, as
further described in Article 2.
13.7. "COMMON SHARE" means one share of the common stock of the
Company.
13.8. "COMPANY" mews St. Joe Corporation, a Florida corporation.
13.9. "EMPLOYEE" means a common-law employee of the Company, a
Parent, a Subsidiary or an Affiliate.
13.10. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
13.11 "EXERCISE PRICE" means the amount for which one Common Share
may be purchased upon exercise of such Option, as specified in the applicable
Stock Option Agreement.
13.12. "FAIR MARKET VALUE" means the closing price of Common Shares,
as stated in The New York Stock Exchange Composite Transactions Report and
reported in The Wall Street Journal. If a closing price of Common Shares is not
stated in The New York Stock Exchange Composite Transactions Report, the Fair
Market Value of Common Shares shall be determined by the Committee in good
faith on such basis as it deems appropriate. The determination of Fair Market
Value by the Committee shall be conclusive and binding on all persons.
13.13. "ISO" means an incentive stock option described in section
422(b) of the Code.
13.14. "NSO" means a stock option not described in sections 422 or
423 of the Code.
13.15. "OPTION" means an ISO or NSO granted under the Plan and
entitling the holder to purchase Common Shares.
13.16. "OPTIONEE" means an individual or estate who holds an Option.
13.17. "OUTSIDE DIRECTOR" means a member of the Board who is not an
employee. Service as an Outside Director shall be considered employment for
all purposes of the Plan other than Section 4.2.
13.18. "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes
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<PAGE> 32
of stock in one of the other corporations in such chain. A corporation that
attains the status of a Parent on a date after the adoption of the Plan shall
be considered a Parent commencing as of such date.
13.19. "PARTICIPANT" means an individual or estate who holds an
Award.
13.20. "PLAN" means this St. Joe Corporation 1997 Stock Incentive
Plan, as amended from time to time.
13.21. "RESTRICTED SHARE" means a Common Share awarded under the
Plan.
13.22. "STOCK AWARD AGREEMENT" means the agreement between the
Company and the recipient of a Restricted Share that contains the terms,
conditions and restrictions pertaining to such Restricted Share.
13.23. "STOCK OPTION AGREEMENT", means the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.
13.24. "SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.
ARTICLE 14. EXECUTION.
To record the adoption of the Plan by the Board, the Company has
caused its duly authorized officer to affix the corporate name and seal
hereto.
ST. JOE CORPORATION
By
---------------------------------
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SCHEDULE A
PERFORMANCE CRITERIA
Cash Flow Expense Reduction
Earnings Revenue Growth
Earnings per Share Stock Price Increase
Operating Income
Return on Assets
Return on Equity
Return on Invested Capital
Total Shareholder Return
Growth in any of the above
measures
10
<PAGE> 34
Appendix
PROXY
ST. JOE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 13, 1997.
The undersigned having received Notice of Annual Meeting and Proxy Statement
dated March 31, 1997, appoints Peter S. Rummell as Proxy with full power of
substitution to represent the undersigned and to vote all shares of common stock
of St. Joe Corporation, which the undersigned is entitled to vote at the Annual
Meeting of Shareholders, to be held on Tuesday, May 13, 1997, at 10:30 a.m.
Eastern Daylight Savings Time, at the Hilton Hotel & Towers, Duval Ballroom A &
B, 1201 Riverplace Boulevard, Jacksonville, Florida, or at any continuance
thereof, with discretionary authority as provided in the Proxy Statement.
In his discretion, the Proxy holder is authorized to vote upon such business
as may properly come before the Meeting, hereby revoking all prior proxies to
vote the same shares.
Your vote is important. Please sign and date and return this card promptly
to First Union National Bank, 230 South Tryon Street, Charlotte, North Carolina
28288, Attn.: Proxy Tabulation Unit, in the enclosed envelope, so that your
shares can be represented at the meeting.
Please mark votes as in this example: [X]
This Proxy will be voted as directed. If no direction is made, it will be
voted "For" the proposals set forth on this card. The Board of Directors
recommends a vote "FOR" the following proposals.
(Continued and to be dated and signed on reverse side)
(Continued from front)
1. ELECTION OF DIRECTORS
Nominees: J. C. Berlin, R. B. Newton, Jr., J. J. Quindlen, W. L. Ravell, P.
S. Rummell, F. S. Shaw, Jr., W. L. Thornton, C. F. Zellers, Jr.
[ ] FOR Nominees [ ] WITHHELD from all Nominees [ ] FOR, except vote
withheld from the following nominees
- --------------------------------------------------------------------------------
2. APPROVAL OF THE 1997 STOCK INCENTIVE PLAN
See Proposal No. 2 in the Enclosed Proxy Statement for more information on
the Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
X____________________________________
X____________________________________
Date_________________________________
Please sign exactly as name appears
on shares. Joint owners should each
sign. When signing as a fiduciary or
for an estate, trust, corporation, or
partnership, your title or capacity
should be stated.
