<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>
THE ST. JOE COMPANY
- --------------------------------------------------------------------------------
(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
(ST. JOE LOGO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1999
The 1999 Annual Meeting of the shareholders of The St. Joe Company will be
held at the Radisson Riverwalk Hotel, 1515 Prudential Drive, Jacksonville,
Florida on Tuesday, May 11, 1999, at 10:00 a.m. Eastern Daylight Savings Time.
Shareholders will vote on the following matters:
1. Election of nine (9) members to the Board of Directors;
2. Management's proposal to adopt the 1999 Stock Incentive Plan, which
is described in the Proxy;
3. Ratification of the appointment of KPMG Peat Marwick, LLP, as the
Company's independent accountants for the 1999 fiscal year; and
4. Any other matters properly brought before the meeting.
Shareholders of record as of the close of business on March 31, 1999 are
entitled to vote at the meeting or any continuance of the meeting.
We hope you will attend the meeting in person. We urge you to designate the
Proxies named on the enclosed card to vote your shares whether you attend the
meeting or not. This will ensure your shares will be represented at the meeting.
The Proxy Statement describes proxy voting. Please read it carefully.
The Annual Report containing financial data and a summary of operations for
1998 is enclosed.
We look forward to your participation.
By order of the Board of Directors.
/s/ Robert M. Rhodes
Robert M. Rhodes
Senior Vice President, General Counsel
& Secretary
Dated: April 19, 1999
The St. Joe Company 1650 Prudential Drive, Suite 400, Jacksonville, FL
32207 904-396-6600 904-396-4042 Fax
<PAGE> 3
PROXY STATEMENT
-------------------------
This Proxy Statement contains information about the Annual Meeting of the
Shareholders of The St. Joe Company (the "Meeting").
The Meeting will be held on Tuesday, May 11, 1999, beginning at 10:00 a.m.,
at the Radisson Riverwalk Hotel, 1515 Prudential Drive, Jacksonville, Florida.
"We", "Our", "St. Joe" and the "Company" each refers to The St. Joe
Company.
"Proxy" or "Proxies" mean those individuals named in the enclosed Proxy
Card.
This Proxy Statement is first being sent to our Shareholders on or about
April 19, 1999.
-------------------------
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE. You are entitled to vote your stock if our records show that
you held your shares as of March 31, 1999. At the close of business on March 31,
1999, a total of 87,925,421 shares of Common Stock were outstanding and entitled
to vote. Each share of Common Stock has one vote. The enclosed Proxy Card shows
the number of shares you are entitled to vote. Your individual vote is
confidential and will not be disclosed to third parties.
VOTING BY PROXIES. If your Common Stock is held by a broker, bank or other
nominee, you will receive instructions from them which you must follow in order
to have your shares voted. If you hold your shares in your own name as a holder
of record, you may instruct the Proxies how to vote your Common Stock, by
signing, dating and mailing the Proxy Card in the postage-paid envelope which we
have provided to you. Of course, you can always come to the Meeting and vote
your shares in person. The Proxies will vote your shares in accordance with your
instructions. If you sign and return a Proxy Card without giving specific voting
instructions, your shares will be voted as recommended by our Board of
Directors. We are not aware of any other matters to be presented at the meeting
except for those described in this Proxy Statement. If any other matters not
described in this Proxy Statement are properly presented at the Meeting, the
Proxies will use their own judgment to determine how to vote your shares. If the
Meeting is continued, your Common Stock may be voted by the Proxies at the
continued Meeting as well, unless you revoke your proxy instructions.
HOW YOU MAY REVOKE YOUR PROXY INSTRUCTIONS. You can revoke your proxy
instructions if you advise the Secretary in writing before your Common Stock is
voted by the Proxies at the Meeting, or if you deliver later proxy instructions,
or if you attend the Meeting and vote your shares in person.
HOW VOTES ARE COUNTED. The Annual Meeting will be held if a majority of
the outstanding Common Stock is represented at the Meeting. If you have returned
valid proxy instructions or attend the Meeting in person, your Common Stock will
be counted for the purpose of determining a quorum, even if you wish to abstain
from voting on some or all matters introduced to the Meeting. "Broker Non-Votes"
also count for quorum purposes. If you hold your Common Stock through a broker,
bank or other nominee, the nominee may only vote the Common Stock which it holds
for you in accordance with your instructions. However, if the nominee does not
receive your instructions within ten (10) days of the
<PAGE> 4
Meeting, the nominee may vote on matters which the New York Stock Exchange
determines to be routine. If a nominee cannot vote on a particular matter
because it is not routine, there is a "Broker Non-Vote" on that matter. We do
not count abstentions and "Broker Non-Votes" as votes for or against any
proposal.
COST OF THIS PROXY SOLICITATION. We will pay the cost of this Proxy
solicitation. In addition to soliciting Proxies by mail, we expect a number of
our employees will solicit Proxies personally and by telephone. None of these
employees will receive any additional or special compensation for doing this. We
will, upon request, reimburse brokers, banks and other nominees for their
reasonable expenses in sending Proxy material to their principals and obtaining
their Proxies.
THE BOARD AND ITS COMMITTEES
THE BOARD. The Company is governed by a Board of Directors. The Board met
eight times in 1998. All members of the Board of Directors attended at least 75%
of the meetings of the Board and Committees on which the members served in the
last year.
COMMITTEES OF THE BOARD. The Board has three standing Committees. In
addition, the entire Board acts as a Committee to consider Nominees for election
to the Board and any written recommendation by a Shareholder which is made in
accordance with the Company's By-laws.
AUDIT COMMITTEE. The members of the Audit Committee are Walter L. Revell,
Chairman, Michael L. Ainslie, Russell B. Newton, Jr. and Winfred L. Thornton.
The Audit Committee met four times in 1998. The functions of the Audit Committee
are to recommend public accountants to audit the Company's financial records;
review with the independent auditor any reports or recommendations developed in
connection with the auditing engagement; review any reports or recommendations
with regard to the Company's internal control and regulatory compliance
procedures and practices; review any proposed changes in accounting policies
being considered by the Company; and to supervise the Company's Year 2000
Readiness Program.
COMPENSATION COMMITTEE. The members of the Compensation Committee are John
D. Uible, Chairman, John J. Quindlen and Frank S. Shaw, Jr. The Compensation
Committee met four times in 1998. The functions of the Compensation Committee
are to recommend, subject to full Board approval, compensation and benefits for
the Chairman and Chief Executive Officer, the President, Chief Operating
Officer, and Senior Vice Presidents of the Company; approve annual bonus and
merit plans for officers and employees of the Company; and supervise the
administration of all current employee benefit plans, stock incentive plans and
such other plans as may be created from time to time.
FINANCE COMMITTEE. The members of the Finance Committee are John J.
Quindlen, Chairman, Jacob C. Belin, Russell B. Newton, Jr., Frank S. Shaw, Jr.
and John D. Uible. The Finance Committee met four times in 1998. The functions
of the Finance Committee are to supervise the Company's investment policies;
make recommendations as to corporate dividends; review the Company's business
plan; review proposals to acquire and sell significant assets which would
require public disclosure; review and approve acquisitions and investments
pursuant to the Company's Capital Approval Policy; and make recommendations
regarding the issuance or purchase of the Company's Common Stock.
2
<PAGE> 5
DIRECTORS COMPENSATION
Each non-employee Director receives an annual retainer of $25,000, a Board
or Committee meeting fee of $1,250, and a telephone meeting fee of $500. In
addition to the standard fees, Directors are reimbursed for transportation and
other reasonable expenses incident to attendance at Board and Committee
Meetings.
In 1998, the Company adopted a Deferred Compensation Plan for non-employee
Directors. Each year participating Directors may elect to defer all or part of
their fees in cash or stock unit accounts. The accounts are payable in cash or
Common Stock, at the Director's election, upon retirement from the Board. Mr.
Newton, Mr. Quindlen and Mr. Uible are currently participating in the Plan.
Commencing with the 1998 Annual Meeting, each non-employee Director is
granted an option to purchase 2,000 shares of the Company's Common Stock on the
date of the Company's Annual Meeting. In 1998, Mr. Ainslie, Mr. Belin, Mr.
Newton, Mr. Quindlen, Mr. Revell, Mr. Shaw, Mr. Thornton and Mr. Uible received
grants under this Plan. Each option grant, vesting in equal installments over
five (5) years and having a ten (10) year term, permits the holder to purchase
shares at their fair market value on the date of the grant. The fair market
value of options granted in 1998 was $33.25.
EXECUTIVE OFFICERS
PETER S. RUMMELL was appointed Chairman and Chief Executive Officer of the
Company in January 1997. From 1985 until 1996, Mr. Rummell was employed by The
Walt Disney Company, most recently as Chairman of Walt Disney Imagineering, the
division responsible for Disney's worldwide creative design, real estate and
research and development activities. Mr. Rummell also served as President of
Disney Development Company, the community development arm of Walt Disney, from
1992 to 1994 and 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. Mr. Rummell also held management positions for the Sea Pines Company in
Hilton Head, South Carolina, and the Amelia Island Plantation and spent two
years as an employee of the Ocean Reef Club in Key Largo, Florida.
KEVIN M. TWOMEY was appointed President and Chief Financial Officer of the
Company in January 1999. Mr. Twomey is the former Vice Chairman and Chief
Financial Officer of H. F. Ahamanson & Company and its principal subsidiary,
Home Savings of America. Mr. Twomey joined Ahamanson and Home Savings in 1993 as
Executive Vice President and Chief Financial Officer.
ROBERT M. RHODES was named Senior Vice President and General Counsel in
February 1997. Prior to joining the Company, Mr. Rhodes was a partner in the law
firm of Steel, Hector and Davis L.L.P., specializing in real estate and land
development. From 1985 to 1988, Mr. Rhodes served as Senior Vice President and
General Counsel of Arvida/Disney Corporation and Disney Development Company. Mr.
Rhodes also served in Florida state government as counsel to the Speaker of the
Florida House of Representatives and as Chief of the Bureau of Land and Water
Management, which administers the state's growth management programs.
3
<PAGE> 6
MICHAEL N. REGAN joined the Company in July 1997 and was appointed Senior
Vice President, Finance and Planning in February 1999. Prior to joining the
Company, Mr. Regan was Vice President and Controller for Harrah's Entertainment,
Inc. Prior to that, Mr. Regan was Vice President and Controller of The Promus
Companies. Mr. Regan joined Harrah's as a Senior Financial Analyst in Strategic
Planning in 1980 and held several management positions in finance.
MICHAEL F. BAYER was named Vice President -- Human Resources and
Administration in February 1997. From 1987 until 1995, Mr. Bayer was employed by
The Walt Disney Company in a variety of executive positions in Human Resources.
Most recently he was Vice President of Human Resources of Walt Disney
Imagineering. Previously, Mr. Bayer served as Director -- Human Resources for
the Sarasota division of the Arvida Corporation.
EMPLOYMENT ARRANGEMENTS
KEVIN M. TWOMEY. On January 28, 1999, the Company's Board approved Mr.
Twomey's compensation package. Mr. Twomey is an at will employee; provided,
however Mr. Twomey is entitled to severance benefits if his employment is
terminated without cause or there is a change in control of the Company. His
base salary in 1999 is $450,000. Mr. Twomey is eligible for a performance based
incentive payment equal to between 0 and 75% of his base salary.
Mr. Twomey was granted an option to purchase 500,000 shares of the
Company's Common Stock under the 1998 Stock Incentive Plan. The exercise price
of the option is $22.50 per share, which was equal to the closing price of the
Company's Common Stock on February 12, 1999. The option becomes exercisable in
equal installments on the first five anniversaries of the date of the grant;
provided, however, the entire award vests in the event of termination without
cause, a change in control of the Company, or upon Mr. Twomey's death or
disability. The options expire on the tenth anniversary of the date of the
grant. Mr. Twomey was also granted 100,000 restricted shares of the Company's
Common Stock. Forty percent (40%) of the restricted shares vest on the second
anniversary of the date of grant and the remainder vest in equal installments on
the next three anniversaries of the date of the grant; provided, however, the
entire award vests in the event of termination without "cause", a "change in
control" of the Company, or upon Mr. Twomey's death or disability.
Mr. Twomey is reimbursed for relocation expenses and related income taxes.
EXECUTIVE COMPENSATION
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 consists of 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. The members were chosen
because of their business backgrounds and to ensure that the interests of the
shareholders are being served in all matters of executive compensation. This
report covers the actions of the Committee regarding the compensation of the
executive officers for 1998 and prospectively for 1999.
4
<PAGE> 7
COMPENSATION PHILOSOPHY
The main tenants of the Company's compensation philosophy are:
(1) Base salaries at the median of comparable companies that generate
value from the management of substantial assets;
(2) Provide for a competitive annual incentive based on Company and
individual performance; and
(3) Provide for the granting of stock options in order to align the
interests of the Executive Officers and shareholders.
1998 ANNUAL INCENTIVE PLAN
In February 1998 the Committee advised the Board that the Committee had
adopted a formal evaluation process to calculate annual incentives for 1998. The
1998 Plan is split between quantitative financial measures and more qualitative
strategic measures. The Committee considers corporate and individual performance
goals, together with trends in appropriate peer groups prior to awarding annual
incentives. Quantitative goals include corporate earnings and qualitative goals
include an assessment of an Executive Officer's role in implementing the
Company's strategic plan. The committee evaluated the performance of all
eligible employees utilizing this criteria to determine the amount of annual
incentives payable in 1998. Payments to Executive Officers under the 1998 Plan
ranged from approximately 40% to 63% of base salary.
CEO COMPENSATION
Mr. Rummell was appointed Chairman and CEO of the Company on January 7,
1997. The Compensation Committee used the compensation philosophy described
above to determine Mr. Rummell's compensation. Based upon these same criteria
the Committee recommended, and the Board approved, a 4.8% increase in base
salary from $630,000 to $660,000.00 effective December 31, 1998. The Committee
recommended, and the Board approved, the payment of an annual incentive under
the 1998 Plan to Mr. Rummell of $400,000 (63% of base salary) for the year ended
December 31, 1998.
Pursuant to the employment agreement with Mr. Rummell (the "Rummell
Agreement") the Company granted Mr. Rummell an option to purchase 4,043,520
shares of the Company's Common Stock under the St. Joe Corporation 1997 Stock
Incentive Plan. The exercise price of the options is $19.14 per share, which was
equal to the closing price of the Company's Common Stock on the day preceding
the execution of the Rummell Agreement. The exercise price was adjusted
equitably as a result of a partial liquidation distribution to the Company's
shareholders on March 25, 1997. 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 Mr. Rummell is "totally disabled", as defined in the Company's
disability plan, or in the event that the Company is subject to a change in
control. The option expires 10 years after the date of grant (or two years after
Mr. Rummell's death, if earlier).
Under the Rummell Agreement, the Company also granted Mr. Rummell 201,861
restricted shares of its Common Stock under the 1997 Incentive Plan. The
restricted shares are intended to compensate Mr. Rummell for the value of the
stock options he forfeited upon
5
<PAGE> 8
resigning his position with his former employer, based on the closing prices of
the two companies' Common Stock on the day preceding the execution of the
Rummell 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 (as defined in the Rummell Agreement), or
in the event that the Company is subject to a change in control. If Mr.
Rummell's employment terminates for any other reason, he forfeits any restricted
shares that have not vested.
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.
The annual incentive plan in place for 1998 may not satisfy the 162(m)
requirements for performance-based compensation. The Committee views the
potential loss of tax deductibility for these awards as 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is or ever was a St. Joe officer or
employee. No member of the Committee is, or was during 1998, an executive
officer of another company whose board of directors has a comparable committee
on which one of St. Joe's Executive Officers serves.
Submitted by the Compensation Committee.
John D. Uible, Chairman
John J. Quindlen
Frank S. Shaw, Jr.
6
<PAGE> 9
EXECUTIVE COMPENSATION TABLES
The following table sets forth the annual compensation of the Company's
five highest paid executive officers (the "Executive Officers") for the past
three (3) years.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
ANNUAL -----------------------------------------
COMPENSATION (E) (F) (G)
------------------- RESTRICTED SECURITIES ALL OTHER
(A) (B) (C) (D) STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY $ BONUS $ AWARD(S) ($) OPTIONS (#) (2) $
- --------------------------- ---- -------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Peter S. Rummell.............. 1998 630,000 400,000 N/A N/A 39,486
Chairman of the Board and 1997 591,538 300,000 3,863,620 4,043,520 413,022
Chief Executive Officer 1996 N/A N/A N/A N/A N/A
Charles A. Ledsinger, Jr.
(3)......................... 1998 248,941 N/A N/A N/A 16,158
President and Chief
Operating 1997 356,089 210,000 N/A 240,000 232,889
Officer 1996 N/A N/A N/A N/A N/A
Robert M. Rhodes.............. 1998 285,000 115,000 N/A N/A 41,964
Senior Vice President and 1997 231,167 165,000 N/A 168,480 41,325
General Counsel 1996 N/A N/A N/A N/A N/A
Michael N. Regan.............. 1998 192,500 100,000 N/A 15,000 5,812
Senior Vice President, 1997 84,792 45,000 N/A 45,000 90,940
Finance and Planning 1996 N/A N/A N/A N/A N/A
Michael F. Bayer.............. 1998 175,000 75,000 N/A N/A 9,765
Vice President, Human 1997 155,544 100,500 N/A 84,240 93,365
Resources and Administration 1996 N/A N/A N/A N/A N/A
</TABLE>
- -------------------------
(1) The Company began assembling a new executive management team in early 1997.
None of the Executive Officers served with the Company in 1996.
(2) The amounts disclosed in this column include:
Company contributions under St. Joe's Deferred Compensation Plan in fiscal
1998 of $14,368 for Mr. Rummell, $7,484 for Mr. Ledsinger, $7,312 for Mr.
Rhodes, $4,107 for Mr. Regan and $4,121, for Mr. Bayer; Company
contributions under St. Joe's Deferred Compensation Plan in fiscal 1997 of
$762 for Mr. Ledsinger, $1,418 for Mr. Rhodes, and $1,688 for Mr. Bayer;
payments of a relocation allowance and benefits in 1998 to Mr. Rummell of
$25,118, Mr. Ledsinger of $8,674, Mr. Rhodes of $34,652, Mr. Regan of
$1,705 and Mr. Bayer of $5,644; and payments of a relocation allowance and
benefits in 1997 to Mr. Rummell of $412,772, Mr. Ledsinger of $232,127,
Mr. Rhodes of $39,907, Mr. Regan of $90,940 and Mr. Bayer of $91,677.
(3) Mr. Ledsinger's 1997 salary includes $125,000 paid to Mr. Ledsinger to
compensate him for benefits forfeited upon resigning his position with his
former employer. Mr. Ledsinger resigned his position with the Company on
August 7, 1998, and surrendered certain options granted to him.
7
<PAGE> 10
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED TO ANNUAL RATES OF STOCK
UNDERLYING EMPLOYEES EXERCISE OR PRICE APPRECIATION FOR
OPTIONS IN FISCAL BASE PRICE EXPIRATION OPTION TERM(1)
NAME GRANTED YEAR ($/SH) DATE 5%($) 10%($)
- ---- ---------- ----------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Peter S. Rummell.................. 0 N/A N/A N/A N/A N/A
Chairman of the Board and Chief
Executive Officer
Charles A. Ledsinger, Jr.(2)...... 0 N/A N/A N/A N/A N/A
President and Chief Operating
Officer
Robert M. Rhodes.................. 0 N/A N/A N/A N/A N/A
Senior Vice President and
General Counsel
Michael N. Regan.................. 15,000 2.1 23.25 8/11/08 219,327 555,900
Senior Vice President, Finance
and Planning
Michael F. Bayer.................. 0 N/A N/A N/A N/A N/A
Vice President, Human Resources
and Administration
</TABLE>
- -------------------------
(1) There can be no assurance that the values actually realized upon the
exercise of these options will be at or near the values shown in the table.
The values set forth in the table should not be viewed in any way as a
forecast of future performance of the Company's Common Stock.
(2) Mr. Ledsinger resigned his position with the Company on August 7, 1998.
8
<PAGE> 11
AGGREGATED STOCK OPTIONS EXERCISES IN 1998 AND
OPTIONS VALUES AS OF YEAR END 1998
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AS OF IN-THE-MONEY OPTIONS AS OF
SHARES VALUE DECEMBER 31, 1998 DECEMBER 31, 1998(1)($)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter S. Rummell.......... 0 0 1,617,408 2,426,112 6,954,854 10,432,282
Chairman of the Board
and Chief Executive
Officer
Charles A. Ledsinger,
Jr.(2).................. 0 0 0 0 0 0
President and Chief
Operating Officer
Robert M. Rhodes.......... 0 0 67,392 101,088 29,652 44,479
Senior Vice President
and General Counsel
Michael N. Regan.......... 0 0 9,000 36,000 0 0
Senior Vice President,
Finance and Planning
Michael F. Bayer.......... 0 0 33,696 50,544 44,816 67,224
Vice President -- Human
Resources and
Administration
</TABLE>
- -------------------------
(1) Value based on $23.44 closing price per share of Common Stock on December
31, 1998.
(2) Mr. Ledsinger surrendered all of his 378,000 options to the Company in
exchange for $152,640 upon his resignation from the Company on August 7,
1998.
RETIREMENT BENEFITS
The Company maintains a cash balance pension plan, and a salary deferral
plan covering substantially all 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.
PENSION PLAN. The Company maintains a cash balance pension plan (the
"Pension Plan") which covers all employees of the Company and its participating
subsidiaries who have attained age 21 and completed one year of service. The
Pension Plan is funded by annual employer contributions. These contributions are
based upon the age and compensation of the participant. The employer
contributions do not discriminate in favor of directors or executive officers.
These benefits are not reduced for social security or other benefits received by
the participant. At the end of each calendar year, an employee's cash balance
account is credited with an amount equal to a percentage of pay earned that
year. Pay includes base salary and any annual incentive.
9
<PAGE> 12
The amounts credited depend on age at the beginning of a calendar year.
<TABLE>
<CAPTION>
EMPLOYER CONTRIBUTION
AS A
AGE PERCENTAGE OF PAY
- --- ---------------------
<S> <C>
Under 25................................. 8
25-34.................................... 9
35-44.................................... 10
45-54.................................... 11
55 and over.............................. 12
</TABLE>
An employee's cash balance account is also credited with an income
contribution at the end of each calendar year. Income is based upon the 30 year
US Treasury Bond rate.
If an employee leaves the Company for any reason with five or more years of
service, the employee is entitled to the full dollar balance of the cash balance
account. The account is payable in a lump sum or periodic payments.
The following table shows the amounts which would be payable under the
Pension Plan to a hypothetical 40 year old employee assuming total earnings
increases and Internal Revenue Service Contribution limit increases as set forth
in the table:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
AGE 40 41 42 43 44 45 46 47 48 49
CONTRIBUTION % 10 10 10 10 10 11 11 11 11 11
- ------------------------------------------------------------------------------------------------------------------------------
INCLUDED TOTAL
EARNINGS EARNINGS 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 160,000 300,000 16,000 16,960 17,978 19,056 20,200 21,412 22,696 24,058 25,502 27,032
2000 160,000 315,000 16,000 16,960 17,978 19,056 20,200 21,412 22,696 24,058 25,502
2001 160,000 330,750 16,000 16,960 17,978 19,056 20,200 21,412 22,696 24,058
2002 160,000 347,288 16,000 16,960 17,978 19,056 20,200 21,412 22,696
2003 160,000 364,652 16,000 16,960 17,978 19,056 20,200 21,412
2004 164,000 382,884 18,040 19,122 20,270 21,486 22,775
2005 164,000 402,029 18,040 19,122 20,270 21,486
2006 164,000 422,130 18,040 19,122 20,270
2007 164,000 443,237 18,040 19,122
2008 164,000 465,398 18,040
2009 168,100 488,668
2010 168,100 513,102
2011 168,100 538,757
2012 168,100 565,695
2013 168,100 593,979
2014 176,505 623,678
2015 176,505 651,862
2016 176,505 687,605
2017 176,505 721,986
2018 176,505 758,085
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---- -------------------------------------------------------------------------------------------------
50 51 52 53 54 55 56 57 58 59
11 11 11 11 11 12 12 12 12 12
- ---- -------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
- ---- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 28,654 30,373 32,195 34,127 36,174 38,345 40,846 43,084 45,669 48,410
2000 27,032 28,654 30,373 32,195 34,127 36,174 38,345 40,846 43,084 45,669
2001 25,502 27,032 28,654 30,373 32,195 34,127 36,174 38,345 40,646 43,084
2002 24,058 25,502 27,032 28,654 30,373 32,195 34,127 36,174 38,345 40,646
2003 22,696 24,058 25,502 27,032 28,654 30,373 32,195 34,127 36,174 38,345
2004 24,142 25,590 27,125 28,753 30,478 32,307 34,245 36,300 38,478 40,787
2005 22,775 24,142 25,590 27,125 28,753 30,478 32,307 34,245 36,300 38,478
2006 21,486 22,775 24,142 25,590 27,125 28,753 30,478 32,307 34,245 36,300
2007 20,270 21,486 22,775 24,142 25,590 27,125 28,753 30,478 32,307 34,245
2008 19,122 20,270 21,486 22,775 24,142 25,590 27,125 28,753 30,478 32,307
2009 18,491 19,600 20,776 22,023 23,344 24,745 26,230 27,804 29,472 31,240
2010 18,491 19,600 20,776 22,023 23,344 24,745 26,230 27,804 29,472
2011 18,491 19,600 20,776 22,023 23,344 24,745 26,230 27,804
2012 18,491 19,600 20,776 22,023 23,344 24,745 26,230
2013 18,491 19,600 20,776 22,023 23,344 24,745
2014 21,181 22,451 23,799 25,226 26,740
2015 21,181 22,451 23,799 25,226
2016 21,181 22,451 23,799
2017 21,181 22,451
2018 21,181
657,159
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
DEFERRED COMPENSATION PLAN. The Company maintains a salary deferral plan
(the "401(k)") which covers all 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 eight accounts available are six mutual funds and common stock of either the
Company or FECI. The Company matches the employee contribution $1.00 per $1.00
for the first $500; $0.75 per $1.00 for the next $300.00, $.50 per $1.00 for the
next $300.00; and $0.25 per $1.00 for the excess of $1,101 up to the maximum
permitted employee contribution. 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 1998 the Company contributed the amounts set forth
in footnote (1) in the Summary Compensation Table on behalf of the Executive
Officers shown in that table.
10
<PAGE> 13
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. In August, 1997 the Board adopted
a Supplemental Executive Retirement Plan ("SERP"). The SERP is designed to
provide certain qualified executives benefits which may be lost due to
limitations placed on qualified pension plans and 401(k) plans by the Internal
Revenue Service. Pursuant to the Company's SERP, a qualified individual may
elect to defer between 1% and 75% of his or her salary in excess of the IRS
annual compensation limit ($160,000 for 1998). For every dollar the individual
elects to defer, the Company will contribute $.25, to a maximum of 6% of
compensation in excess of the IRS annual compensation limit.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS, AND EXECUTIVE OFFICERS
The following table shows the number of shares of Common Stock beneficially
owned as of December 31, 1998 by: (i) persons known by the Company to be the
beneficial owners of more than 5% of its outstanding Common Stock; (ii) each
Nominee for Director; (iii) the Executive Officers; and (iv) all Directors and
Executive Officers as a group.
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP PERCENT OF CLASS(1)
- ---------------- -------------------- -------------------
<S> <C> <C>
Alfred I. duPont Testamentary
Trust............................. 51,963,836(2)(3)(4) 59.1
1650 Prudential Drive, Suite 300
Jacksonville, Florida 32207
Michael L. Ainslie.................. 10,400(9) *
Michael F. Bayer.................... 33,696(5) *
Jacob C. Belin...................... 51,963,836(2)(3)(4)(9) 59.1
Russell B. Newton, Jr............... 6,400(9) *
John J. Quindlen.................... 1,000(9) *
Michael N. Regan.................... 9,000(6) *
Walter L. Revell.................... 1,400(9) *
Robert M. Rhodes.................... 67,392(7) *
Peter S. Rummell.................... 1,807,379(8) 2.1
Frank S. Shaw, Jr................... 4,400(9) *
Winfred L. Thornton................. 51,963,836(2)(3)(4)(9) 59.1
John D. Uible....................... 15,670(9) *
Total Directors and Executive
Officers.......................... 53,956,020(10) 61.4
</TABLE>
- -------------------------
* Less than one percent.
(1) All percentages are rounded to the nearest tenth of one percent.
(2) On December 17, 1998, the Alfred I. DuPont Testamentary Trust (the "Trust")
contributed 49,643,292 shares of the Company's Common Stock to Swamp Hall
Properties, L.P., a Delaware limited partnership (the "Partnership"). The
general partner of the Partnership is the Rockland Company, a Delaware
corporation (the "General Partner"). All of the outstanding stock of the
General Partner is owned by the Trust. In addition, the Trust is the sole
limited partner of the Partnership. The Trustees of the Trust are J. C.
Belin, Herbert Peyton, John Porter, W. T. Thompson, III, W. L. Thornton and
Hugh M. Durden on behalf of Wachovia Bank, N.A., a subsidiary of Wachovia
Corporation, as corporate trustee. A majority of the Trustees have the
right to elect the directors of the General Partner.
11
<PAGE> 14
(3) The Trustees of the Trust constitute the entire Board of Directors of The
Nemours Foundation (the "Foundation"). As of March 31, 1999, the Foundation
owned 2,232,408 shares of the Company's Common Stock. The Trustees, by
virtue of their power to elect the directors of the General Partner and
their status as directors of the Foundation, have the power to direct the
vote and the power to dispose or direct the disposition of the 49,643,292
shares of Common Stock owned by the Partnership and the 2,232,408 shares of
the Common Stock owned by the Foundation.
(4) Includes 27,765 shares owned by Mr. Belin, 56,500 owned by Mr. Thompson and
3,471 owned by Mr. Thornton.
(5) Includes 16,848 of Mr. Bayer's 84,240 options under the 1997 Stock
Incentive Plan that vested on February 25, 1998 and 16,848 of his options
that vested on March 2, 1999.
(6) Includes 9,000 of Mr. Regan's 45,000 options under the 1997 Stock Incentive
Plan that vested on August 11, 1998.
(7) Includes 33,696 of Mr. Rhodes' 168,480 options under the 1997 Stock
Incentive Plan that vested on March 3, 1998, and 33,696 of his options that
vested on March 2, 1999.
(8) Includes 189,971 restricted shares of common stock granted to Mr. Rummell
under the 1997 Stock Incentive Plan and 808,704 of his 4,043,520 options
under the 1997 Stock Incentive Plan that vested on January 8, 1998 and
808,704 of his options that vested on January 8, 1999.
(9) Includes 400 of each Director's 2,000 options under the 1998 Stock
Incentive Plan that will vest on May 11, 1999.
(10) Includes 35,047 shares held in the Company's 401(k) plan for which the
Trustee has sole voting power and the participants have sole dispositive
power. The Trustee of the plan is Merrill Lynch.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Commission initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. The Company believes
all filings were timely made, except by Mr. Ainslie who inadvertently filed a
late Form 4 reporting the purchase of 5000 shares of the Company's Common Stock.
The Company has policies and procedures in place to assist its officers and
Directors in complying with Section 16(a) filing requirements.
12
<PAGE> 15
PERFORMANCE GRAPH(1)
The following performance graph compares the Company's cumulative
shareholder returns for the period from March 31, 1994 through March 31, 1999
assuming $100 invested on March 31, 1994 in the Company's Common Stock, in the
Russell 1000 Index and in the Wilshire Real Estate Securities Index. The stock
price performance shown on the graph below is not necessarily indicative of
future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(2)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD THE ST. JOE RUSSELL 1000 WILSHIRE
(FISCAL YEAR COVERED) COMPANY INDEX REAL ESTATE
<S> <C> <C> <C>
3/94 100 100 100
3/95 115 111 93
3/96 107 144 102
3/97 137 166 130
3/98 187 243 144
3/99 135 279 108
</TABLE>
- -------------------------
(1) Through 1996, the Company used the Standard & Poor's Paper and Forest
Products Index. With the sale of the Company's linerboard mill and container
plants in 1996 and management's focus on the Company's real estate
operations, the Company believes a real estate index is a more appropriate
measure.
(2) $100 invested on March 31, 1994 in stock or index including reinvestment of
dividends.
CERTAIN TRANSACTIONS
Jacob C. Belin and Winfred L. Thornton are trustees of the Trust and also
serve as directors of the Company and Florida East Coast Industries, Inc.
("FECI").
On May 1, 1997, the Company entered into consulting agreements with Mr.
Belin and Mr. Thornton (the "Consulting Agreements"). Pursuant to the Consulting
Agreements, Messrs. Belin and Thornton advise and counsel the Company on various
corporate matters at the request of the Chairman and Chief Executive Officer.
The Consulting Agreements provide
13
<PAGE> 16
that Messrs. Belin and Thornton receive annual compensation of $100,000 and
$112,000, respectively, and are reimbursed for expenses actually incurred up to
$10,000.00 per year.
Mr. Belin's Agreement expires on December 31, 1999 and Mr. Thornton's
Agreement expires on April 30, 2001.
In addition, the Nemours Foundation and the Company rent office space from
one of the Company's subsidiaries at rates approximating market rentals.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
A Board of Directors consisting of nine members is to be elected at this
Annual Meeting. Each Director elected shall hold office until the next Annual
Meeting and the election of a successor.
VOTE REQUIRED. Directors must be elected by a plurality of the votes cast
at the Annual Meeting. The nominees receiving the greatest number of votes will
be elected. Votes withheld for any Director will not be counted.
VOTING BY PROXIES. The Proxies will vote your Common Stock in accordance
with your instructions. If you have not given specific instructions to the
contrary, your Common Stock will be voted to approve the election of the
Nominees named in this Proxy Statement. We know 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 Proxies will vote your Common Stock to approve
the election of any substitute Nominee proposed by the Board of Directors.
Alternatively, the Board may choose to reduce the number of Directors to
eliminate the vacancy.
GENERAL INFORMATION ABOUT THE NOMINEES. All of the Nominees have served as
Directors since the last Annual Meeting. Each has agreed to be named in this
Proxy Statement and to serve if elected. Information about the nine Nominees for
Directors is set forth on the following pages. The age indicated in each
Nominee's biography is as of March 31, 1999.
INFORMATION ABOUT THE NOMINEES
-------------------------
MICHAEL L. AINSLIE
Director since 1998 Age 55
Mr. Ainslie, a private investor, is the former President, Chief Executive
Officer and a Director of Sotheby's Holdings. He was Chief Executive Officer of
Sotheby's from 1984 to 1994. From 1980 to 1984 he was President of the National
Trust for Historic Preservation. From 1975 to 1980 he was Chief Operating
Officer of N-Ren Corp., a Cincinnati-based chemical manufacturer. From 1971 to
1975, he was President of Palmas Del Mar, a real estate development company. He
began his career as an associate with McKinsey & Company. He is Vice Chairman of
the Board of Directors of the New York Landmarks Conservancy, as well as a
Trustee of Vanderbilt University. Mr. Ainslie serves as a Director of the United
States Tennis Association and is also Chairman of the Posse Foundation.
14
<PAGE> 17
JACOB C. BELIN
Director since 1953 Age 84
Mr. Belin was President of the Company from 1968 to 1984, and Chairman of the
Board and Chief Executive Officer from 1982 to June 1991. He is a director of
the Company and has served as such since 1953. Mr. Belin also serves as a member
of the Board of Directors of The Nemours Foundation, and as a Trustee of the of
the Alfred I. duPont Testamentary Trust and as a director of FECI.
RUSSELL B. NEWTON, JR.
Director since 1994 Age 75
Mr. Newton is Chairman of Timucuan Asset Management Company, which is involved
in investment portfolio management. Mr. Newton is a director of Alliance
Mortgage Company, as well as other smaller, closely held companies. Since 1981,
Mr. Newton has been an investor in oil, marketing, shipping, public utilities,
construction, direct mail solicitation and cable television. From 1975 to 1981,
Mr. Newton was principal owner and Chairman of Kern County Refineries, Inc. From
1968 to 1975, Mr. Newton was President of Charter Oil Company. Mr. Newton spent
his early employment years with Booz, Allen & Hamilton, Management Consultants
and as President of Southern Stores, Inc.
JOHN J. QUINDLEN
Director since 1995 Age 65
Mr. Quindlen retired as Senior Vice President and Chief Financial Officer of E.
I. duPont de Nemours & Company in 1993 ("duPont"). Mr. Quindlen worked for
duPont from 1954 until his retirement, except for three years as a naval Supply
Officer. Mr. Quindlen is a trustee of the Rodney Square Funds and the Kalmar
Pool Investment Trust. Mr. Quindlen is a member of the Finance Council of the
Archdiocese of Philadelphia and the President of its Board of Education.
WALTER L. REVELL
Director since 1994 Age 64
Mr. Revell has been Chairman of the Board and CEO of H. J. Ross Associates,
Inc., a consulting engineering, architectural and planning firm in Coral Gables,
Florida since 1991, and also Chairman of the Board and CEO of Revell Investments
International, Inc. since 1984. Mr. Revell was President, CEO and Director of
Post, Buckley, Schuh and Jernigan, Inc. until 1983 after serving as Secretary of
Transportation for the State of Florida from 1972 to 1975. Mr. Revell is also a
director of Dycom Industries, Inc., RISCORP, Inc. and other closely-held
companies, and is Chairman of the Greater Miami Foreign Trade Zone, Inc.
PETER S. RUMMELL
Director since 1997 Age 52
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, most
recently as Chairman of Walt Disney Imagineering, the division responsible for
Disney's worldwide creative design, real estate and research and development
activities. Mr. Rummell also served as President of Disney Development Company,
the community development arm of Walt Disney, from 1992 to 1994 and 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. Mr. Rummell
15
<PAGE> 18
also held management positions for the Sea Pines Company in Hilton Head, South
Carolina, and the Amelia Island Plantation and spent two years as an employee of
the Ocean Reef Club in Key Largo, Florida.
FRANK S. SHAW, JR.
Director since 1995 Age 66
Mr. Shaw is President of Shaw Securities, Inc., a financial services company,
and of Cherry Bluff, Inc., a northern Florida development firm based in
Tallahassee, Florida. Mr. Shaw also serves on the Board of Directors of First
South Bank, Regional Financial Company, The Southern Scholarship Foundation,
Maclay School Foundation, Leon County Library Foundation and the James Madison
Institute.
WINFRED L. THORNTON
Director since 1968 Age 69
Mr. Thornton was Chairman of the Board and CEO from June 1991 to January 1997,
and was President and Chief Operating Officer of the Company from 1984 to June
1991. Mr. Thornton also serves as a member of the Board of Directors of the
Nemours Foundation, a Trustee of the Alfred I. duPont Testamentary Trust, and a
director of FECI.
JOHN D. UIBLE
Director since 1994 Age 62
Mr. Uible was Chairman of the Board and CEO of Florida National Bank from 1982
to 1990, when it was acquired by First Union Corporation. He served as a
Director of First Union Corporation until 1998. Since 1990, Mr. Uible has been a
private investor in financial markets, as well as smaller closely-held companies
and partnerships. From 1976 to 1982, he was Chairman of the Board and CEO of
Jacksonville National Bank of Florida, Inc. and was employed by the Charter
Company from 1958 to 1976.
The Board recommends the Shareholders vote FOR management's nominees.
PROPOSAL NO. 2
APPROVAL OF THE 1999 STOCK INCENTIVE PLAN
VOTE REQUIRED. An affirmative vote of the majority of the votes cast at
the Annual Meeting is required to approve the 1999 Stock Incentive Plan.
HISTORY OF THE PLAN. The Company's 1999 Stock Incentive Plan was adopted
by the Board of Directors in February 1999. It became effective on February 23,
1999, subject to the approval of the shareholders. The Board of Directors may
amend or terminate the 1999 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 1999 Incentive Plan are summarized below. This
summary, however, is not intended to be a complete description of all terms of
the 1999 Incentive Plan. A copy of the plan text will be furnished to any
shareholder upon request. Such a request should be directed to Robert M. Rhodes,
Secretary, The St. Joe Company, 1650 Prudential Drive, Suite 400, Jacksonville,
Florida 32207.
ADMINISTRATION AND ELIGIBILITY. The 1999 Incentive Plan is administered by
the Compensation Committee of the Board of Directors. The Compensation Committee
also
16
<PAGE> 19
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 1999 Incentive Plan provides for awards in the form of
restricted shares, stock appreciation rights 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.
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, 1999, the closing price of the Company's
Common Stock on the New York Stock Exchange Composite Transactions Report was
$24.25 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 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
withholding 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.
STOCK APPRECIATION RIGHTS. A Stock Appreciation Right entitles the
Recipient, upon exercise, to receive in cash an amount equal to the difference
between the Fair Market Value of a share of Common Stock on the date of grant
("Base Value") and the Fair Market Value of a share of Common Stock on the date
the Stock Appreciation Right is exercised. Each Award of a Stock Appreciation
Right 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
Appreciation Rights Agreement. The Stock Appreciation Rights Agreement shall
also specify the term of the Stock Appreciation Right; provided that the term of
a Stock Appreciation Right shall in no event exceed 10 years from the date of
grant. A Stock Appreciation Rights Agreement may provide for accelerated vesting
in the event of the Participant's death, disability or retirement or other
events. The Compensation Committee may determine, at the time of granting stock
Appreciation Rights or thereafter, that all or part of such Stock Appreciation
Rights shall become vested in the event that a Change in Control occurs with
respect to the Company. The Compensation Committee may at any time, at such
terms and conditions as it determines, buy out a Stock Appreciation Right for a
payment in shares of Common Stock (which may or may not include Restricted
Shares), Stock Options and cash for any fractional shares of Common Stock. The
value of such combination of shares of
17
<PAGE> 20
Common Stock, Stock Options, and cash may not exceed the difference between Base
Value and Fair Market Value of a share of Common Stock on the date of such buy
out. The Committee may, at its discretion, use Options with an Exercise Price
below Fair Market Value on date of grant to buy out Stock Appreciation Rights.
If Options are used to buy out Stock Appreciation Rights, the Exercise Price of
these Options will not be lower than the Exercise Price of the Stock
Appreciation Rights that are being bought out.
VESTING CONDITIONS. As noted above, the Compensation Committee determines
the number of restricted shares, stock appreciation rights 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 1999 Incentive Plan, the term "change in control" means
generally that (i) any person or group, other than the Trust and the Foundation
acquires 30% or more of the outstanding voting stock of the Company and the
Trust and the Foundation no longer own more shares of 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 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, to exchange new
options for outstanding options, including outstanding options with a higher
exercise price than the new options, or to convert outstanding stock appreciate
rights to 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 1999 Stock 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, stock
appreciation rights and options available for grant under the 1999 Incentive
Plan is 1.5 million (subject to anti-dilution adjustments). If any restricted
shares, Stock Appreciation Rights or options are forfeited, or if options
terminate for any other reason prior to exercise, then they again become
available for awards. No individual may receive Stock Appreciate Rights and
options covering more than .5 million shares in any calendar year (subject to
anti-dilution adjustments).
Awards under the 1999 Stock Incentive Plan are discretionary. Therefore, it
is not possible to determine the benefits that will be received in the future by
participants in the 1999 Stock Incentive Plan or the benefits that would have
been received by such participants if the 1999 Stock Incentive Plan had been in
effect in 1998. To date no options have been granted under the 1999 Stock
Incentive Plan.
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,
18
<PAGE> 21
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.
The Board recommends the shareholders vote FOR the approval of the 1999
Stock Incentive Plan.
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board, upon the recommendation of the Audit Committee, has appointed
the firm of KPMG Peat Marwick L.L.P. to audit the consolidated financial
statements for the Company for the 1999 fiscal year.
The firm of KPMG Peat Marwick L.L.P. has been Company's accountant of
record since August, 1990. It is expected that a representative of KPMG Peat
Marwick L.L.P. will be present at the Annual Meeting to answer shareholders'
questions and will be given an opportunity to make a statement. An affirmative
vote of the majority of the votes cast at the Annual Meeting is required to
ratify KPMG Peat Marwick L.L.P. as the Company's independent accountants for the
1999 fiscal year.
The Board recommends the shareholders vote FOR ratification of KPMG Peat
Marwick L.L.P. as the Company's independent accountants for the 1999 fiscal
year.
SHAREHOLDER PROPOSALS
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 to be presented at the
Annual Meeting or for inclusion in the 2000 Annual Meeting Proxy Statement must
be submitted in writing and must be received by the Company no sooner than
November 22, 1999 and no later than December 21, 1999. The notice must contain
information required by the By-laws. Copies of the By-laws may be obtained from
the Secretary.
19
<PAGE> 22
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, it is the intention of the persons named in the accompanying Proxy to
vote pursuant to the Proxy in accordance with their judgment on such matters.
BY ORDER OF THE BOARD OF
DIRECTORS,
/s/ Robert M. Rhodes
Robert M. Rhodes
Senior Vice President, General
Counsel & Secretary
Dated April 19, 1999.
20
<PAGE> 23
-- FOLD AND DETACH HERE --
-------------------------------------------------------------------------------
PROXY
THE ST. JOE COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 11, 1999.
The undersigned having received Notice of Annual Meeting and Proxy Statement
dated April 19, 1999, appoints Peter S. Rummell as Proxy with full power of
substitution to represent the undersigned and to vote all shares of common stock
of The St. Joe Company, which the undersigned is entitled to vote at the Annual
Meeting of Shareholders, to be held on Tuesday, May 11, 1999, at 10:00 a.m.
Eastern Daylight Savings Time, at the Radisson Riverwalk Hotel, 1515 Prudential
Drive, Jacksonville, Florida, or at any continuance thereof, with discretionary
authority as provided in the Proxy Statement.
Please mark your vote as indicated in the 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:
- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS
Nominees: Michael L. Ainslie, Jacob C. Belin, Russell B. Newton, Jr., John
J. Quindlen, Walter L. Revell, Peter S. Rummell, Frank S. Shaw, Jr., Winfred
L. Thornton, John D. Uible
[ ] FOR [ ] WITHHELD [ ] FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING
NOMINEES
2. APPROVAL OF THE 1999 STOCK INCENTIVE PLAN
See Proposal No. 2 in the Enclosed Proxy Statement for more information on
the Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 24
-- FOLD AND DETACH HERE --
-------------------------------------------------------------------------------
3. RATIFICATION OF INDEPENDENT ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
X ----------------------------
X ----------------------------
Date -------------------------
Please sign exactly as your
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.
<PAGE> 25
ST. JOE COMPANY
1999 STOCK INCENTIVE PLAN
(AS ADOPTED EFFECTIVE FEBRUARY 23, 1999)
<PAGE> 26
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. INTRODUCTION..........................................................................................1
ARTICLE 2. DEFINITIONS...........................................................................................1
ARTICLE 3. ADMINISTRATION........................................................................................4
3.1 Committee Composition.....................................................................................4
3.2 Committee Responsibilities................................................................................4
ARTICLE 4. SHARES AVAILABLE FOR GRANTS...........................................................................4
4.1 Basic Limitation..........................................................................................4
4.2 Additional Shares.........................................................................................4
ARTICLE 5. ELIGIBILITY...........................................................................................4
5.1 Nonstatutory Stock Options, Stock Appreciation Rights and Restricted Shares...............................4
5.2 Incentive Stock Options...................................................................................5
5.3 Prospective Employees.....................................................................................5
ARTICLE 6. OPTIONS...............................................................................................5
6.1 Stock Option Agreement....................................................................................5
6.2 Number of Shares..........................................................................................5
6.3 Exercise Price............................................................................................5
6.4 Exercisability and Term...................................................................................5
6.5 Effect of Change in Control...............................................................................6
6.6 Modification or Assumption of Options.....................................................................6
6.7 Buyout Provisions.........................................................................................6
ARTICLE 7. PAYMENT FOR OPTION SHARES.............................................................................6
7.1 General Rule..............................................................................................6
7.2 Surrender of Stock........................................................................................6
7.3 Exercise/Sale.............................................................................................6
7.4 Exercise/Pledge...........................................................................................7
7.5. Promissory Note..........................................................................................7
7.6 Other Forms of Payment....................................................................................7
ARTICLE 8. RESTRICTED SHARES.....................................................................................7
8.1 Time, Amount and Form of Awards...........................................................................7
8.2 Payment for Awards........................................................................................7
8.3 Vesting Conditions........................................................................................7
8.4 Voting and Dividend Rights................................................................................7
ARTICLE 9. STOCK APPRECIATION RIGHTS.............................................................................8
9.1 Time, Amount and Form of Awards...........................................................................8
</TABLE>
<PAGE> 27
<TABLE>
<S> <C> <C>
9.2 Rights to Receive.........................................................................................8
9.3 Conditions................................................................................................8
9.4 Number of Stock Appreciation Rights.......................................................................8
9.5 Buyout Provisions.........................................................................................8
ARTICLE 10. PROTECTION AGAINST DILUTION..........................................................................9
10.1 Adjustments..............................................................................................9
10.2 Dissolution or Liquidation...............................................................................9
10.3 Reorganization...........................................................................................9
ARTICLE 11. AWARDS UNDER OTHER PLANS............................................................................ 9
ARTICLE 12. LIMITATION ON RIGHTS................................................................................10
12.1 Retention Rights........................................................................................10
12.2 Stockholders' Rights....................................................................................10
12.3 Regulatory Requirements.................................................................................10
12.4 Transfer................................................................................................10
ARTICLE 13. WITHHOLDING TAXES...................................................................................10
13.1 General.................................................................................................10
13.2 Share Withholding.......................................................................................10
ARTICLE 14. FUTURE OF THE PLAN..................................................................................11
14.1 Term of the Plan........................................................................................11
14.2 Amendment or Termination................................................................................11
ARTICLE 15. EXECUTION...........................................................................................11
</TABLE>
ii
<PAGE> 28
ST. JOE COMPANY
1999 STOCK INCENTIVE PLAN
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board of Directors effective
February 23, 1999. 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 and (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, Options or Stock Appreciation Rights.
The Plan shall be governed by, and construed in accordance
with, the laws of the State of Florida (excluding their choice-of-law
provisions).
Actual awards of Restricted Shares, Options, or Stock
Appreciation Rights under this Plan shall be made and documented in each case
with a separate Stock Option Agreement or Restricted Stock Agreement, as set
forth in this Plan. Each of these Stock Option Agreements and Restricted Stock
Agreements may differ one from the other. The purpose of providing separate
Stock Option Agreements and Restricted Stock Agreements is to allow the
Compensation Committee the broadest possible flexibility in tailoring specific
grants for specific individuals, consistent with this plan.
ARTICLE 2. DEFINITIONS.
2.1. "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.
2.2. "AWARD" means any award of an Option, Stock
Appreciation Right or a Restricted Share under the Plan.
2.3. "BOARD" means the Company's Board of Directors, as
constituted from time to time.
2.4. "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
<PAGE> 29
(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.
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.
2.5. "CODE" means the Internal Revenue Code of 1986, as
amended.
2.6. "COMMITTEE" means the Compensation Committee of the
Board, as further described in Article 3.
2.7. "COMMON SHARE" means one share of the common stock
of the Company.
2.8. "COMPANY" means St. Joe Company, a Florida Company.
2.9. "EMPLOYEE" means a common-law employee of the
Company, a Parent, a Subsidiary or an Affiliate.
2.10. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
2.11. "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.
2.12. "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.
2.13. "ISO" means an incentive stock option described in
section 422(b) of the Code.
2
<PAGE> 30
2.14. "NSO" means a stock option not described in sections
422 or 423 of the Code.
2.15. "OPTION" means an ISO or NSO granted under the Plan
and entitling the holder to purchase Common Shares.
2.16. "OPTIONEE" means an individual or estate who holds
an Option or a Stock Appreciation Right.
2.17. "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 5.2.
2.18. "PARENT" means any Company (other than the Company)
in an unbroken chain of Companies ending with the Company, if each of the
Companies other than the Company owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other Companies in
such chain. A Company 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.
2.19. "PARTICIPANT" means an individual or estate who
holds an Award.
2.20. "PLAN" means this St. Joe Company 1997 Stock
Incentive Plan, as amended from time to time.
2.21. "RESTRICTED SHARE" means a Common Share awarded
under the Plan.
2.22. "STOCK APPRECIATION RIGHT" means a grant under the
Plan which entitles a recipient to receive in cash an amount equal to the
difference between the Fair Market Value of a Common Share on the date of grant
and the Fair Market Value of a Common Share on the date the Stock Appreciation
Right is exercised.
2.23. "STOCK APPRECIATION RIGHTS AGREEMENT" means the
agreement between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to his or her Stock Appreciation Right.
2.24. "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.
2.25. "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.
2.26. "SUBSIDIARY" means any Company (other than the
Company) in an unbroken chain of Companies beginning with the Company, if each
of the Companies other than the last Company 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 Companies in such chain. A
3
<PAGE> 31
Company 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 3. ADMINISTRATION.
3.1. COMMITTEE COMPOSITION. The Plan shall be
administered by the Compensation Committee of the Board of Directors. 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.
3.2. COMMITTEE RESPONSIBILITIES AND AUTHORITY. 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 binding on all persons. The Committee has authority to grant
Restricted Shares, Options, and Stock Appreciation Rights to non-executive
officers of the Company and to Company Employees.
ARTICLE 4. SHARES AVAILABLE FOR GRANTS.
4.1. BASIC LIMITATION. Common Shares issued pursuant to
the Plan may be authorized but unissued shares or treasury shares. The
aggregate number of Options, Restricted Shares and Stock Appreciation Rights
awarded under the Plan shall not exceed 1,500,000. The limitations of this
Section 4.1 shall be subject to adjustment pursuant to Article 10.
4.2. 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. If Stock Appreciation
Rights are forfeited or terminate for any other reason before being exercised,
they shall again become available for grant under the Plan.
ARTICLE 5. ELIGIBILITY.
5.1. NONSTATUTORY STOCK OPTIONS, STOCK APPRECIATION
RIGHTS AND RESTRICTED SHARES. Only Employees and Outside Directors shall be
eligible for the grant of
4
<PAGE> 32
NSOs, Stock Appreciation Rights and Restricted Shares. For purposes of this
Article 5.1, Employees shall be defined as including both common law employees
and leased employees.
5.2. 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.
5.3. PROSPECTIVE EMPLOYEES. For purposes of this Article
5, the term "Employee" shall include a Prospective Employee who accepts a
written offer of employment from the Company, a Parent or a Subsidiary. If an
ISO is granted to a Prospective Employee, the date when his or her service as
an Employee commences shall be deemed to be the date of grant of such ISO for
all purposes under the Plan (including, without limitation, Section 6.3). No
Award granted to a prospective Employee shall become exercisable or vested
unless and until his or her service as an Employee commences.
ARTICLE 6. OPTIONS.
6.1. 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.
6.2. 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 10. Options granted to
any Optionee in a single fiscal year of the Company shall not cover more than
500,000 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 750,000 Common Shares. The limitations set
forth in the preceding sentence shall be subject to adjustment in accordance
with Article 10.
6.3. EXERCISE PRICE. Except as provided for in Article
9.5, 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 prior to the date of
grant specified by the Committee. For example, if the Committee approves a
grant on July 15, a Thursday, the exercise price will be equal to the closing
price as of July 14, a Wednesday. 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.
6.4. 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
5
<PAGE> 33
Option Agreement shall also specify the term of the Option; provided that the
term of an Option shall in no event exceed 10 years from the date of grant. A
Stock Option Agreement may provide for accelerated exercisability 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.
6.5. 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.
6.6. 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.
6.7. BUYOUT PROVISIONS. The Committee may at any time (a)
offer to buyout 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 7. PAYMENT FOR OPTION SHARES.
7.1. 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 7.
7.2. SURRENDER OF STOCK. To the extent that this Section
7.2 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.
7.3. EXERCISE/SALE. To the extent that this Section 7.3
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> 34
7.4. EXERCISE/PLEDGE. To the extent that this Section 7.4
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.
7.5. PROMISSORY NOTE. To the extent that this Section 7.5
is applicable, payment may be made with a full-recourse promissory note.
7.6. OTHER FORMS OF PAYMENT. To the extent that this
Section 7.6 is applicable, payment may be made in any other form that is
consistent with applicable laws, regulations and rules.
ARTICLE 8. RESTRICTED SHARES.
8.1. 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.
8.2. 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.
8.3. 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 10. 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.
8.4. 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 Shares invest any cash
dividends received in additional Restricted Shares. Such additional
7
<PAGE> 35
Restricted Shares shall be subject to the same conditions and restrictions as
the Award with respect to which the dividends were paid.
ARTICLE 9. STOCK APPRECIATION RIGHTS.
9.1. TIME, AMOUNT AND FORM OF AWARDS. Each Award of a
Stock Appreciation Right under the Plan shall be evidenced by a Stock
Appreciation Rights Agreement between the recipient and the Company. Such Award
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
Stock Appreciation Rights Agreements need not be identical.
9.2. RIGHTS TO RECEIVE. An Award of a Stock Appreciation
Right entitles the Recipient, upon exercise, to receive in cash an amount equal
to the difference between the Fair Market Value of a Common Share on the date
of grant ("Base Value") and the Fair Market Value of a Common Share on the date
the Stock Appreciation Right is exercised. The Base Value will be determined
consistent with the provisions of Article 6.3.
9.3. ONDITIONS. Each Award of a Stock Appreciation Right
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
Appreciation Rights Agreement. The Stock Appreciation Rights Agreement shall
also specify the term of the Stock Appreciation Right; provided that the term
of a Stock Appreciation right shall in no event exceed 10 years from the date
of grant. A Stock Appreciation Rights 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 Stock
Appreciation Rights or thereafter, that all or part of such Stock Appreciation
Rights shall become vested in the event that a Change in Control occurs with
respect to the Company.
9.4. NUMBER OF STOCK APPRECIATION RIGHTS. The aggregate
number of Stock Appreciation Rights awarded under the Plan shall not exceed
1,500,000, and in no event shall the number of Stock Appreciation Rights which
are granted to any Participant in a single calendar year exceed 500,000,
subject in each case to adjustment in accordance with Article 10. If Stock
Appreciation Rights are forfeited or terminate for any other reason before
being exercised, they shall again become available for grant under the Plan.
The foregoing limits the number of Stock Appreciation Rights outstanding and
the Base Value thereof shall be adjusted in the same manner as the limits on
the number of Options, the number of Common Shares covered by an outstanding
Option, and the Exercise Price thereof are adjusted in accordance with Article
10.
9.5. BUYOUT PROVISIONS. The Committee may at any time, at
such terms and conditions as it determines, buyout a Stock Appreciation Right
for a payment in Common Shares (which may or may not include Restricted
Shares), Stock Options and cash for any fractional Common Share. The value of
such combination of Stock Options, cash and Common Shares may not exceed the
difference between Base Value and Fair Market Value of a Common Share on the
date of such buyout. The Committee may, at its discretion, use Options with an
Exercise Price below Fair Market Value on date of grant to buyout Stock
Appreciation Rights. If Options are used to buyout Stock Appreciation Rights,
the Exercise Price of these Options will not be
8
<PAGE> 36
lower than the Exercise Price of the Stock Appreciation Rights that are being
bought out. For purposes of this provision, the value of Stock Options will be
determined by the Committee at its discretion.
ARTICLE 10. PROTECTION AGAINST DILUTION.
10.1. 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 spin-off 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, Restricted Shares and Stock
Appreciation Rights available for future Awards under Article 4, (b) the
limitations set forth in Section 6.2, (c) the number of Common Shares covered
by each outstanding Option or Stock Appreciation Right or (d) the Exercise
Price under each outstanding Option or Stock Appreciation Right. Except as
provided in this Article 10, 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.
10.2. 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.
10.3. REORGANIZATION. In the event that the Company is a
party to a merger or other reorganization, outstanding Options, Restricted
Shares and Stock Appreciation Rights 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 Company), for their assumption by the surviving Company or its parent
or subsidiary, for the substitution by the surviving Company 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 11. 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 shall be
9
<PAGE> 37
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 4.
ARTICLE 12. LIMITATION ON RIGHTS.
12.1. 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).
12.2. 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.
12.3 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.
12.4 TRANSFER. Except as expressly provided in the case
of death, only the participant may exercise any grants. The participant cannot
transfer or assign grants made under this plan. If the grant is sold or used as
security for a loan, this grant will be immediately cancelled. The participant
may dispose of this grant in a will or a beneficiary designation.
ARTICLE 13. WITHHOLDING TAXES.
13.1. 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.
13.2. 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
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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.
ARTICLE 14. FUTURE OF THE PLAN.
14.1. TERM OF THE PLAN. The Plan, as set forth herein,
shall become effective on February 24, 1998. The Plan shall remain in effect
until it is terminated under Section 13.2, except that no ISOs shall be granted
after January 6, 2007.
14.2. 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 15. 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 COMPANY
By
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SCHEDULE A
PERFORMANCE CRITERIA
<TABLE>
<S> <C>
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
</TABLE>
12
