<PAGE> 1
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>
SOUTHWEST BANKS, INC.
- --------------------------------------------------------------------------------
(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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[SOUTHWEST BANKS LETTERHEAD]
March 28, 1996
Dear Shareholder:
Enclosed are the materials relating to the Annual Meeting of Shareholders of
Southwest Banks, Inc. This meeting will be held at 5:00 p.m. on MONDAY, APRIL
15, 1996 at The Naples Beach Hotel & Golf Club, 851 Gulfshore Boulevard North,
Naples, Florida, in the Sunset Terrace Room.
The matters to be considered at the meeting are fully explained in the enclosed
proxy material. WE URGE YOU TO READ THE MATERIAL, AND SIGN AND RETURN YOUR
PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE AS SOON AS POSSIBLE, EVEN IF
YOU PLAN TO ATTEND OUR MEETING. If you attend the meeting, you may, if you
wish withdraw your proxy and vote in person.
I am proud to report that 1995 was an exciting and rewarding year for your
Company. We plan to review last year's highlights and discuss the strategic
affiliation with F.N.B. Corporation at the shareholder meeting and hope you
will be able to join us. Immediately following the business portion of the
meeting is a cocktail reception. Please see the enclosed invitation for
details. We look forward to seeing you there!
Very truly yours,
/s/ Gary L. Tice
<PAGE> 3
SOUTHWEST BANKS, INC.
900 Goodlette Road, North
Naples, Florida 33940
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 15, 1996
The Annual Meeting of Shareholders of Southwest Banks, Inc. will be
held on Monday, April 15, 1996, at 5:00 P.M., at the Naples Beach Hotel & Golf
Club, 851 Gulfshore Boulevard North, Naples, Florida 33940, for the following
purposes:
(1) To elect two directors to serve for a term of three years and
until their successors are elected and qualified;
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 15, 1996
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.
A Proxy Statement and a proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the proxy promptly. If you
attend the meeting, you may, if you wish, withdraw your proxy and vote in
person.
By Order of the Board of Directors,
Gary L. Tice
Chairman of the Board, President
and Chief Executive Officer
Naples, Florida
March 28, 1996
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR
VOTE MAY BE RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 4
SOUTHWEST BANKS, INC.
900 GOODLETTE ROAD, NORTH
NAPLES, FLORIDA 33940
ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1996
-----------------------
PROXY STATEMENT
-----------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Southwest Banks, Inc. (the "Company")
for the Annual Meeting of Shareholders to be held on Monday, April 15, 1996,
and any adjournment thereof, at the time and place and for the purposes set
forth in the accompanying notice of the meeting. The expense of this
solicitation, including the cost of preparing and mailing this Proxy Statement,
will be paid by the Company. In addition to solicitations by mail, officers
and regular employees of the Company, at no additional compensation, may assist
in soliciting proxies by telephone. This Proxy Statement and the accompanying
proxy are first being mailed to shareholders on or about March 28, 1996. The
address of the principal executive offices of the Company is 900 Goodlette
Road, North, Naples, Florida 33940.
Any proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the meeting and gives oral notice of his election to
vote in person, without compliance with any other formalities. In addition,
any proxy given pursuant to this solicitation may be revoked prior to the
meeting by delivering to the Secretary of the Company an instrument revoking it
or a duly executed proxy for the same shares bearing a later date. Proxies
which are returned properly executed and not revoked will be voted in
accordance with the shareholder's directions specified thereon. Where no
direction is specified, proxies will be voted FOR each of the matters set forth
in the Notice accompanying this proxy statement. Abstentions and broker
non-voters will not be counted as votes either in favor of or against the
matter with respect to which the abstention or broker non-vote relates;
however, on proposals other than the election of directors, an abstention or
broker non-vote would have the effect of a vote against such proposal.
The record of shareholders entitled to vote at the annual meeting was
taken on March 15, 1996. On that date the Company had outstanding and entitled
to vote 3,654,089 shares of Common Stock, par value $0.10 per share, with each
share entitled to one vote.
<PAGE> 5
AGENDA ITEM ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of eight members. The
Company's Articles of Incorporation provide for a classified Board of
Directors, whereby one-third of the members of the Company's Board of
Directors, and any new Nominees, are elected each year at the Company's Annual
Meeting of Shareholders. At each Annual Meeting of Shareholders, successors to
the class of directors whose term expires at the annual meeting will be elected
for a three- year term. The Company's By-Laws provide that the Board of
Directors shall consist of not less than six nor more than eighteen members,
the precise number to be determined from time to time by the Board of
Directors. The Board of Directors has set the number of directors at eight,
two of whom are presently standing for re-election to the Board. The Board of
Directors recommends the election of the two nominees listed below.
The following persons have been nominated by management for
re-election to the Board of Directors to serve for a term of three years
(expiring in 1999) and until their successors are elected and qualified: JAMES
S. LINDSAY, PETER MORTENSEN.
In the event that any nominee withdraws or for any reason is not able
to serve as director, the proxy will be voted for such other person as may be
designated by the Board of Directors, but in no event will the proxy be voted
for more than two nominees. The affirmative vote of a plurality of all votes
cast at a meeting at which a quorum is present is required for the election of
the two nominees standing for election. Management of the Company has no
reason to believe that they will not serve if elected.
INFORMATION WITH RESPECT TO THE NOMINEES, CONTINUING DIRECTORS AND
EXECUTIVE OFFICERS
The following descriptions set forth, as of March 15, 1996, the names
of the nominees, continuing directors and Named Executive Officers, and their
ages; a brief description of their recent business experience, including
present occupations and employment; certain directorships held by each; the
year in which each became a director of the Company; the year in which their
term (or in the case of nominees, their proposed term) as director of the
Company expires.
NOMINEES
JAMES S. LINDSAY (47) Mr. Lindsay has
been a licensed real estate broker since
1983 and the Managing Partner of Dor-J's
Partnership, a private investment company,
(PHOTO) since 1974. Mr. Lindsay has been a
director of the Company since 1988, whose
current term, if re-elected, will expire
in 1999. He attended all of the Company
Board and Compensation Committee meetings
held in 1995.
PETER MORTENSEN (60) Mr. Mortensen has
served as the Chairman of the Board of
First National Bank of Pennsylvania,
Hermitage, Pennsylvania, since 1987 and
was its President from 1972 to 1988. He
has served as Chairman of the Board of
F.N.B. Corporation ("F.N.B.") since 1987
and as the President since 1974. He
(PHOTO) serves as Chairman of the Board of Regency
Finance Company; as a director of
Liberty Steel Products, Inc., Metropolitan
Savings Bank of Youngstown, and Jamestown
Paint & Varnish Co. Mr. Mortensen has
been a director of the Company since 1988
whose current term, if re-elected, will
expire in 1999. He attended five out of
the six Company Board and all of the
Compensation Committee meetings held in
1995.
2
<PAGE> 6
CONTINUING DIRECTORS
DAVID W. GOMER (54) Mr. Gomer is an
Executive Vice President of the Company
and has served as the President and CEO of
Cape Coral National Bank since the bank's
inception in December 1994. Previously,
Mr. Gomer served as a Board member of
Community National Bank and then its
(PHOTO) successor, SouthTrust Bank, during
1985-93. Mr. Gomer also served as the
President and CEO of Community National
Bank and SouthTrust Bank from 1985 to
1991. Mr. Gomer has been a director of
the Company since 1994 whose current term
will expire in 1997. He attended all of
the Company Board meetings held in 1995.
EDWARD J. MACE (39) Mr. Mace has been a
practicing Certified Public Accountant
since 1979, owner of Edward J. Mace,
C.P.A. since 1985, Vice President,
Secretary/Treasurer and a director of
Ribek Corporation since 1982, and
(PHOTO) Secretary/Treasurer and a director of
Comprehensive Care of Collier County, Inc.
d/b/a Healthcare Personnel since 1986.
Mr. Mace has been a director of the
Company since 1988, whose current term
will expire in 1998. He attended all of
the Company Board and Compensation
Committee meetings held in 1995.
RICHARD C. MYERS (68) Mr. Myers was the
President and majority owner of Naples
Dodge from 1971 until his retirement in
1991 and has been a director of Naples
(PHOTO) Dodge since 1971. Mr. Myers has been a
director of the Company since 1988 whose
current term will expire in 1997. He
attended all of the Company Board and
Compensation Committee meetings held in
1995.
GARRETT S. RICHTER (45) Mr. Richter is an
Executive Vice President and the Corporate
Secretary of the Company. He has served
as the President and Chief Executive
Officer of First National Bank of Naples
(PHOTO) ("First National Bank") since 1994 and
served as Executive Vice President of
First National Bank from 1988-1994. Mr.
Richter was appointed to the Board in
August, 1994 and his current term will
expire in 1998. He attended five out of
the six Company Board meetings held in
1995.
GARY L. TICE (48) Mr. Tice has served as
Chairman of the Board, President and Chief
Executive Officer of the Company and
(PHOTO) Chairman of the Board of First National
Bank of Naples since 1988. He was
previously Chief Executive Officer and
President of First National Bank of Naples
from 1988-1994. Mr. Tice has been a
director of the Company since 1988, whose
current term will expire in 1998. He
attended all of the Company Board meetings
held in 1995.
3
<PAGE> 7
LARRY A. WYNN (48) Mr. Wynn has been the
Managing Director of Wynn Properties since
1984, the Vice President and part owner of
Sunshine Hardware, Inc. and Wynn's Family
Market since 1969, owner of L.A.W.
(PHOTO) Enterprises, a warehouse rental company,
since 1982, and has been a partner with
Pine Ridge Storage since 1974. Mr. Wynn
has been a director of the Company since
1988 whose current term will expire in
1997. He attended all of the Company
Board and Compensation Committee meetings
held in 1995.
EXECUTIVE OFFICERS
LEWIS S. ALBERT (43) Mr. Albert has
served as Senior Vice President and Chief
Financial Officer of the Company since
November 1993. From 1991 to November
(PHOTO) 1993, Mr. Albert served as Chairman and
President of Trebla Sales, Inc. of Ft.
Lauderdale, Florida, a capital equipment
distribution company. From 1987 to 1991,
Mr. Albert was a partner with Deloitte &
Touche, Certified Public Accountants.
C.C. COGHILL (52) Mr. Coghill has served
as Senior Vice President of the Company
since November 1995 and the Executive Vice
President of First National Bank of Naples
since 1994. He served as Vice President
(PHOTO) of the Company from 1990 to 1995.
Previously, Mr. Coghill was a Senior Vice
President of First National Bank of Naples
from 1990-1994. Mr. Coghill has served as
a director of First National Bank of
Naples since 1990.
SIDNEY T. JACKSON (53) Mr. Jackson has
served as Senior Vice President since
(PHOTO) October 1994 and Vice President of the
Company since March 1994. Previously, Mr.
Jackson served as Executive Vice President
and Chief Administrative Officer of
Sunbank/Naples, N.A. from 1986-1994.
GARRETT S. RICHTER Mr. Richter is
described above.
DAVID H. SCHAEFFER (50) Mr. Schaeffer has
been a Senior Vice President of the
Company since November 1995 and a Senior
Vice President of First National Bank of
Naples since 1991. Mr. Schaeffer has
(PHOTO) served as a director of First National
Bank of Naples since 1993. Prior to
joining First National Bank, Mr. Schaeffer
was City Executive of Citizens and
Southern Bank prior to its succession by
NationsBank in 1991.
GARY L. TICE Mr. Tice is described
above.
4
<PAGE> 8
The following table sets forth certain information as of March 15,
1996, with respect to the beneficial ownership of the Company's Common Stock by
(i) each director and director nominee of the Company, (ii) each of the
executive officers named in the Summary Compensation table on Page 8, and (iii)
all directors and executive officers as a group.
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
Shares of Common Stock Percent
Name Beneficially Owned+ of Class
---- ------------------- --------
<S> <C> <C> <C>
Lewis S. Albert 3,121 (1) *
C.C. Coghill 41,950 (2) 1.1%
David W. Gomer 21,848 (3) *
Sidney T. Jackson 3,620 (4) *
James S. Lindsay 109,932 (5) 3.0%
Edward J. Mace 86,382 (6) 2.4%
Peter Mortensen 197,517 (7) 5.4%
Richard C. Myers 81,712 (8) 2.2%
Garrett S. Richter 37,283 (9) 1.0%
David H. Schaeffer 44,092 (10) 1.2%
Gary L. Tice 70,636 (11) 1.9%
Larry A. Wynn 68,444 (12) 1.9%
Executive Officers and Directors as a Group 765,517 (13) 20.9%
(12 persons)
</TABLE>
* Does not exceed 1.0% of the Company's voting securities.
+ Unless otherwise indicated, each person has sole voting and investment power
as to all such shares.
(1) Includes 3,121 shares subject to presently exercisable incentive stock
options.
(2) Includes 18,972 shares subject to presently exercisable incentive stock
options. Mr. Coghill owns 22,978 shares individually.
(3) Includes 6,242 shares subject to presently exercisable incentive stock
options. Mr. Gomer owns 15,606 shares individually.
(4) Includes 2,580 shares subject to presently exercisable incentive stock
options. Mr. Jackson owns 1,040 shares individually.
(5) Includes warrants to purchase 11,143 shares, 7,427 shares owned
individually by Mr. Lindsay, 15,895 shares held in individual
retirement accounts, 7,863 shares held by Mr. Lindsay as custodian for
his three children and 67,604 shares owned by Dor-J's Partnership, a
private investment company of which Mr. Lindsay is the managing
partner. Mr. Lindsay disclaims beneficial ownership of 5,836 shares
held by his wife, which are not included in the amount shown.
5
<PAGE> 9
(6) Includes warrants to purchase 1,592 shares, 260 shares owned jointly by
Mr. Mace and his mother, 8,843 shares owned individually by Mr. Mace,
312 shares held as custodian for three minor children (104 each), 5,148
shares owned by The Beckler Children Trusts, of which Mr. Mace is
trustee, 46,818 shares owned by Ribek Corporation, of which Mr. Mace is
an officer and beneficial owner, and 23,409 shares held by the Ribek
Corporation Defined Contribution Pension Trust.
(7) Includes warrants to purchase 1,857 shares and 13,223 shares owned
individually by Mr. Mortensen. Also includes 172,621 shares owned by
F.N.B. Corporation ("F.N.B."), a bank holding company of which Mr.
Mortensen is Chairman of the Board, and currently exercisable warrants
to purchase 9,816 shares held by F.N.B. Mr. Mortensen disclaims
beneficial ownership of the shares held by F.N.B., and 212 shares
(which are not included in the amount shown) held by his wife.
(8) Includes warrants to purchase 11,673 shares and 70,039 shares owned
jointly by Mr. Myers and his wife.
(9) Includes 31,567 shares subject to presently exercisable incentive stock
options. Mr. Richter owns 5,541 shares individually, 106 shares owned
jointly with his wife, and 69 shares are held by his wife as custodian
for their three children (23 shares each).
(10) Includes 11,548 shares subject to presently exercisable incentive stock
options. Mr. Schaeffer owns 15,196 shares jointly with his wife and
17,358 shares individually.
(11) Includes 46,602 shares subject to presently exercisable incentive stock
options. Mr. Tice owns 17,366 shares individually, 4,456 shares held
jointly with his mother, 520 shares are held by his wife and 1,692
shares are held jointly with his two children (846 shares each).
(12) Includes warrants to purchase 11,673 shares, 15,918 shares owned
individually by Mr. Wynn, 38,733 shares owned by Wynn Partnership, a
family partnership of which Mr. Wynn is trustee, and 2,120 shares held
as custodian for his two minor children (1,060 shares each).
(13) Includes warrants to purchase an aggregate of 49,346 shares held by
certain directors and 120,632 shares subject to presently exercisable
stock options (or options exercisable in the next 60 days) held by
certain officers.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16 of the Securities Exchange Act of 1934,
directors and executive officers of the Company are required to file reports
with the Securities and Exchange Commission indicating their holdings of and
transactions in the Company's stock. Based solely on the review of the copies
of such reports furnished to the Company and written representations that no
other reports were required during 1995, all directors and executive officers
of the Company complied with all filing requirements under Section 16 of the
Securities Exchange Act.
6
<PAGE> 10
The following table sets forth certain information as of March 15,
1996, with respect to the beneficial ownership of the Company's Common Stock by
each person outside of Management known by the Company to own beneficially more
than five percent (5%) of the Company's Common Stock.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
---------------- ----------------------- --------
<S> <C> <C>
F.N.B. Corporation 1,009,710 (1)(2) 27.63%
One Hermitage Square
Hermitage, Pennsylvania 16148
</TABLE>
(1)This total reflects Mr. Mortensen's warrants to acquire 1,857 shares
at an exercise price of $5.64 per share, 172,621 shares owned by F.N.B.,
F.N.B.'s warrants to acquire 9,816 shares at an exercise price of $5.64, 98,253
shares owned by directors and executive officers of F.N.B., and the option
granted to F.N.B. by the Company to purchase 727,163 shares at $15 per share,
which become exercisable upon the occurrence of certain events, as defined (see
"Other Matters").
(2)Based upon a statement on Schedule 13D dated February 9, 1996, filed
by F.N.B. Corporation ("F.N.B."), F.N.B. disclaims beneficial ownership of
827,273 of these shares pursuant to Rule 13d-4 under the Securities Exchange
Act of 1934, as amended.
MEETINGS & COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held 4 regular meetings and 2
special meetings during the year ended December 31, 1995. Each director
attended at least five of the six meetings held by the Board and all of the
Committee meetings on which the director served. During fiscal year 1995, the
Company had no committees except for the Compensation Committee. The functions
of audit, nominating or other standing committees performing similar functions
were reserved to the entire Board of Directors.
The Compensation Committee, currently consisting of all five of the
Company's directors who are not officers of the Company or of a subsidiary,
provides overall guidance to officer compensation programs, including salaries
and other forms of compensation. The Committee reviews and approves officer
salaries, including salary grades and ranges, salary surveys and promotions.
During 1995, the Committee was made up of Messrs. Lindsay, Mace, Mortensen,
Myers and Wynn and held two meetings.
COMPENSATION OF DIRECTORS
During fiscal 1995, directors of the Company received $1,000 per
regular and special meeting for their services as a director. Directors of
the Company, who are also officers, are required to defer all directors' fees
pursuant to a deferred compensation plan whereby all fees are deferred until
retirement or termination of employment. Directors serving on the Company's
Compensation Committee received $200 per meeting and met twice in 1995. Each
of the directors of the Company is also a director of First National Bank of
Naples whose board met twelve times in 1995. Directors of First National Bank
of Naples received $650.00 for each Board meeting attended and $200 for
meetings of each Committee on which they serve.
7
<PAGE> 11
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the other most highly compensated executive
officers of the Company and/or the Bank (determined as of the end of the last
fiscal year) (hereinafter referred to as the "Named Executive Officers") whose
1995 salary and bonus exceeded $100,000, for the fiscal years ended December
31, 1995, 1994 and 1993:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- -------------------
AWARDS
------
Other Annual (a) Securities All Other (b)
Salary Bonus Compensation Underlying Options Compensation
Year ($) ($) ($) (#) ($)
---- ------- ------ ---------------- ------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
GARY L. TICE 1995 166,972 55,125 34,421 - 0 - 24,198
Chairman, President & CEO 1994 157,508 47,252 34,758 - 0 - 23,097
of the Company; Chairman of 1993 157,508 48,101 22,883 40,000 23,430
First National Bank of Naples
GARRETT S. RICHTER 1995 111,332 31,500 29,129 - 0 - 14,659
VP, Secretary & Director of 1994 105,014 21,003 21,853 - 0 - 12,188
the Company; President and 1993 105,014 21,880 16,712 26,000 10,700
CEO of First National Bank
C.C. COGHILL 1995 100,932 23,800 21,078 - 0 - 14,042
VP of Company; EVP & Sr. 1994 95,212 19,042 21,183 - 0 - 10,616
Lending Officer of First 1993 95,212 18,598 17,093 20,000 10,052
National Bank
DAVID H. SCHAEFFER 1995 89,024 21,000 18,962 - 0 - 11,185
Sr. VP of Corp. Lending & 1994 83,980 16,796 24,496 - 0 - 9,644
Exec. Banking of First 1993 83,980 17,164 11,696 20,000 8,860
National Bank
</TABLE>
(a) The column entitled "Other Annual Compensation" is an aggregate of
automobile allowances, club membership fees and directors' fees.
Directors' fees are deferred until retirement or termination of
employment. Mr. Tice's auto allowance and directors' fees for fiscal
years 1993 and 1994 were $13,668 and $7,400; and $13,668 and $10,400,
respectively. In 1995, Mr. Tice's auto allowance and directors' fees
were $14,892 and $13,800, respectively. These totals for Mr. Richter's
auto allowance and directors fees during fiscal years 1993, 1994 and
1995 were $9,616 and $5,400; $10,056 and $9,100; $10,056 and $12,800,
respectively. These totals for Mr. Coghill during fiscal years 1993,
1994 and 1995 were: $9,000 and $4,950; $9,780 and $7,800; $9,780 and
7,800, respectively. These totals for Mr. Schaeffer during fiscal
years 1993, 1994 and 1995 were $9,000 and $0; $9,000 and $7,800; $9,402
and 7,800, respectively.
(b) The column entitled "All Other Compensation" is an aggregate of Company
401(k) contributions and certain insurance premiums paid by the Company
on behalf of the Named Executive Officer. These contribution and
premium payments, made during the last completed fiscal year, 1995, are
as follows: Mr. Tice $12,960 and $1,740, respectively; Mr. Richter
$12,855 and $1,804, respectively; Mr. Coghill $11,271 and $2,771,
respectively; and Mr. Schaeffer $9,902 and $1,283, respectively. The
amounts shown for Mr. Tice also reflect a present valued deferred
compensation package, which he would receive upon termination,
disability or death. The amount of such deferred compensation for 1995
was $9,498.
8
<PAGE> 12
STOCK OPTIONS
While there were no options granted to or exercised by any of the Named
Executive Officers during the fiscal year ended December 31, 1995, the
following table provides certain information with respect to the number of
shares and value of Common Stock represented by outstanding options held by the
Named Executive Officers as of December 31, 1995.
FISCAL YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Fiscal Year End (#) Fiscal Year End ($) (1)
-------------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Gary L. Tice 46,602 48,074 332,342 279,056
Garrett S. Richter 31,567 31,563 226,362 185,177
C.C. Coghill 18,477 23,055 127,751 130,841
David H. Schaeffer 11,548 19,872 61,681 98,220
</TABLE>
(1) The values for "in-the-money" options represent the positive spread
between the exercise price of any such existing stock options and the
year-end market price of the Common Stock ($14.00 per share).
9
<PAGE> 13
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, as the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this proxy statement, in whole or in part, the following
Shareholder Return Performance Graph and Compensation Committee Report on
Executive Compensation shall not be incorporated by reference into any such
filings.
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR FIVE-YEAR PERIOD ENDING
DECEMBER 31, 1995 (1)
The following graph compares the yearly percentage change in the
Company's cumulative total shareholders' return on the Company's Common Stock
with (i) the NASDAQ stock index, and (ii) the Carson Medlin Company's
Independent Bank Index ("IBI"). The IBI is a compilation of the total return
to shareholders over the past five years of a group of eighteen independent
community banks located in the southeastern states of Florida, Georgia, North
Carolina, Tennessee, and Virginia.
[GRAPH]
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Southwest Banks, Inc. 100 123 123 157 196 237
Independent Bank Index 100 111 152 188 225 299
NASDAQ Index 100 161 187 215 210 296
----------------------------------
1 Assumes that the value of the investment in Company Common Stock and
each index was $100 on December 31, 1989 and that all dividends were
reinvested.
10
<PAGE> 14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company
provides overall guidance to the Company's executive compensation programs.
During 1995 the Committee was composed of all five of the outside directors.
The Committee met once to review the Company's compensation programs, including
executive salary administration and incentive compensation plans. Mr. Tice
makes recommendations to the Committee regarding the compensation of the other
executive officers. The Committee makes recommendations to the Board of
Directors regarding the compensation of the Chief Executive Officer. The Chief
Executive Officer does not participate in those discussions or in the making of
such recommendations by the Compensation Committee. The Board of Directors
must approve all compensation actions regarding the Chief Executive Officer.
GENERAL EXECUTIVE COMPENSATION POLICIES
The Company's executive compensation policies have two primary goals:
(1) to attract and retain the highest quality executive officers, and (2) to
reward those officers for superior corporate performance measured by the
Company's strategic results and achievements.
The Company pays its executive officers three principal types of
compensation: base salary, annual incentive compensation, and long-term
incentive compensation, each of which is more fully described below. Executive
officers also participate in the Company's employee benefit plans designed to
provide retirement savings.
1. Base Salary.
The relative levels of base salary for the executive officers
are designed to reflect each executive officer's scope of
responsibility and accountability within the Company. To
determine the necessary amounts of base salary to attract and
retain top quality management, the Committee extensively
reviews comparable salary and other compensation arrangements
in effect at comparable competitor financial institutions.
Such comparable competitor institutions include all similarly
sized institutions listed in the Sheshunoff Bank Executive and
Director Compensation Survey (the "Survey"). The Survey
divides the executive compensations for each position into
four equal portions, or "quartiles". The first quartile
contains the highest bracket of compensation, while the fourth
quartile contains the lowest. The second and third quartiles
are divided by the mean salary of all of the comparable
competitor institutions. The amounts of base salaries paid
during 1995 to the Named Executive Officers, as compared to
the aforementioned similar sized institutions' quartiles, are
as follows: Mr. Tice's salary is in the second quartile; Mr.
Richter's salary is in the fourth quartile; Mr. Coghill's
salary is in the third quartile; and Mr. Schaeffer's salary is
in the second quartile. However, when levels of experience
and scope of responsibility are considered, it is the Board of
Directors' opinion that such base salaries are justified.
2. Annual Incentive Compensation.
The Company provides performance-related compensation to its
executive officers on an annual basis under its annual bonus
plan. Under this plan, the Company establishes for each year
an incentive compensation fund, the size of which depends upon
the Company achieving certain objective strategic and
financial goals that are established by the Board of Directors
each year. The fund is then allocated by the Committee among
the executive officer participants based on an assessment of
each participant's individual performance for the year. The
Committee may in its discretion make no awards under the
annual bonus plan for a given year.
An individual executive officer's award, pursuant to the
annual bonus plan with respect to a fiscal year, is based on
the Company's performance and the attainment of specific
financial performance goals detailed within the employment
agreements executed between the Named Executive Officers and
the Company's Board of Directors (see "Employment and
Retention Agreements" below). When the financial performance
goals are attained, the employment agreements specify the
following bonus plan award percentages of their respective
annual salaries: Mr. Tice: 35%; Mr. Richter: 30%;
Mr. Coghill: 25%; and Mr. Schaeffer: 25%.
11
<PAGE> 15
3. Long-term Incentive Compensation.
The Compensation Committee and the entire Board of Directors
believes that stock ownership is the best way to align the
interests of the executive officers with those of the
Company's shareholders. To that end, the Committee may award
executive officers with incentive stock options under the
Company's 1988 Incentive Stock Option Plan. The Plan, which
has been previously approved by the shareholders, establishes
the number of shares available for award. The determinations
of incentive stock option awards are made by the Committee, as
follows: The Chief Executive Officer will assess the other
executive officers' performances in relation to the Company's
financial and strategic goals for the year, including the
results of the business units for which the executive officer
has responsibility, and may also take into account the
executive officer's contributions toward achievement of
corporate strategic goals during the year and over time.
While Mr. Tice makes recommendations to the Committee
regarding the executive officers' contributions, the relative
weights of these criteria are determined by the Committee in
its discretion. A similar assessment is made of the Chief
Executive Officer by the Compensation Committee and
subsequently by the entire Board of Directors. Awards are
made to non-executive officers upon the recommendation of
executive management, including Mr. Tice, to the Committee.
The Board of Directors acts on the recommendations of the
Compensation Committee regarding proposed awards under the
Plan.
Awards are intended to serve as compensation over a period of
several years, and are therefore not required to be made every
year. Also, in order to provide additional incentives for a
participant to remain in service with the Company, an award
vests in the participant in ten equal annual installments
beginning on the day of the award. In 1995, there were no
awards made to Named Executive Officers.
1995 COMPENSATION FOR MR. TICE
The general policy described above for the compensation of executive
officers also applies to the compensation recommendations made by the
Compensation Committee and approved by the Board of Directors (other than
Messrs. Gomer, Richter and Tice) with respect to the 1995 compensation of Mr.
Tice as the Company's Chief Executive Officer.
Based on the Committee's review of financial targets attained and the
base salary levels of chief executive officers at the comparable competitor
financial institutions referred to above, Mr. Tice's annualized base salary for
1995 was $166,972. The Company's financial results in 1995, in light of the
Board of Directors' directive that the Company increase market share and focus
on quality asset growth, and based on the financial targets explained within
Mr. Tice's employment agreement (see Employment and Retention Agreements
section below), accounts for a portion of Mr. Tice's annualized bonus plan
award. The Committee also takes into account the Company's growth and the
competitive environment faced by Mr. Tice's management team and staff. The
Company's asset size grew by 46% to $386.5 million by December 31, 1995. The
Company pays annualized bonus plan awards during the first quarter of the year
subsequent to the year earned. In 1995, Mr. Tice was paid an annualized bonus
plan award of $55,125, or 35% of his 1994 base salary, in recognition of the
Company's performance in 1994.
The Compensation Committee believes that the mix of conservative market
based salaries, variable cash incentives for both long-term and short-term
performance and a potential for equity ownership in the Company represents a
balance that will motivate the management team to continue to produce strong
returns. The Compensation Committee further believes this program strikes an
appropriate balance between the interests and needs of the Company in operating
the business and appropriate awards based on shareholder value.
Submitted by the Compensation Committee of the Company's Board of
Directors.
James S. Lindsay Richard C. Myers
Edward J. Mace Larry A. Wynn
Peter Mortensen
12
<PAGE> 16
EMPLOYMENT AND RETENTION AGREEMENTS
The Compensation Committee, in order to retain incumbent management,
authorized the execution of employment agreements with Messrs. Richter, Coghill
and Schaeffer, effective July 20, 1994 for a period of three years. The
Compensation Committee also authorized a similar agreement with Mr. Tice
effective June 19, 1994 (all 4 of the employment agreements are defined as the
"Agreements") for a period of five years. All of the Agreements allow for
automatic extensions unless terminated earlier by the Named Executive Officer
or the Board of Directors. These Agreements were all approved by the Board of
Directors.
All of the Agreements set out in detail the means of determining each
Named Executive Officer's base salary and annual bonus plan award and the
manner in which increases are tied to certain target levels with respect to
specific qualitative and quantitative performance related factors. The
Agreements stipulate that the Named Executive Officers' annual base salaries
increase depending on the profitability of the Company's lead bank, First
National Bank of Naples. In the case of Mr. Tice, the Committee will analyze
the profitability of the Company or the lead Bank. If First National Bank
reaches the indicated minimum financial requirements, then the Named Executive
Officer receives the corresponding increase. In 1995, the minimum financial
requirements were met and the Named Executive Officer's were compensated in
accordance with their respective Agreements, as outlined in the above Summary
Compensation Table.
The Agreements set out the details of the right of termination by both
the Named Executive Officer and the Board of Directors, for cause and without
cause. In those cases where termination is without cause or due to a change in
control of the Company, the Named Executive Officer is entitled to severance
payments which shall be paid in 24 equal monthly installments equal to a
percentage of the Named Executive Officer's compensation, including bonus,
received by the Named Executive Officer in the one-year period immediately
preceding the change in control or termination. In the cases of Messrs.
Richter, Coghill, and Schaeffer the percentage is 200%; in Mr. Tice's case it
is 250%. The Agreements require the non-competition and non-solicitation by
the Named Executive Officers for a period of two years after their termination
date. This provision prohibits the Named Executive Officer from preforming
banking services or engaging in the business of banking in any capacity,
directly or indirectly, within the Company's Primary Service Area without the
prior written consent of the Company; and prohibits the Named Executive Officer
from employing or attempting to employ any present employee of the Company, or
any of its subsidiaries, for the purpose of preforming any banking services.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each of the non-employee directors of the Company served as members of
the Company's Compensation Committee during 1995. The Compensation Committee
does not include any former or present officers or employees of the Company,
nor are there any interlocks as defined and referred to in 17 CFR 229.402(j).
CERTAIN TRANSACTIONS
The Company is leasing a bank facility from the Castle Partnership
("Castle"), a Florida general partnership of which 25.4% is directly or
indirectly controlled by Edward J. Mace, one of the Company's directors. The
term of the lease is 10 years, expiring in 1998, with renewal options for six
additional five-year terms, and calls for an initial annual base rent of
$152,640 for the first three years, to be adjusted annually thereafter based
upon the Consumer Price Index. The Company paid aggregate rents of $186,414
during fiscal 1995 under this lease.
The Company entered into a land lease with Commons II Land Partnership
("Commons II"), a Florida general partnership, in 1993, that runs commensurate
with the Castle agreement, for real property located adjacent to the bank
facility upon which stands an additional drive-through at 900 Goodlette Road
North. Mr. Mace directly or indirectly controls 23.5% of Commons II. The
Company paid aggregate rents of $7,496 during fiscal year 1995 under this
lease. In 1994, the Company purchased, for $1,950,000 based on independent
appraisal, the office building at 840 Goodlette Road North, Naples, Florida
33940 ("840"), an office building adjacent to the bank facility.
Simultaneously, the Company entered into a land lease with Commons II for the
property upon which 840 stands. The rent payments during fiscal 1995 under
this lease totaled $59,413.
13
<PAGE> 17
The Bank has a correspondent relationship with the First National Bank
of Pennsylvania, Hermitage, Pennsylvania (the "Pennsylvania Bank"), whereby the
Bank solicits the sale and purchase of loan participations. Peter Mortensen, a
director of the Company, is Chairman of the Board of Pennsylvania Bank. Mr.
Mortensen is also Chairman of the Board and President and a minority
shareholder of F.N.B. Corporation ("F.N.B."), the holding company parent of
Pennsylvania Bank. F.N.B. owns 172,621 shares of Common Stock of the Company
and currently exercisable warrants to purchase 9,816 shares. In addition, the
Company has granted F.N.B. an option to purchase 727,163 shares of the
Company's Common Stock for $15 per share, which becomes exercisable upon the
occurrence of certain events, as defined (see "Other Matters"). During fiscal
1995, the Bank did not sell any participations to Pennsylvania Bank but
purchased participations totalling $2,000,000 from Pennsylvania Bank. At
December 31, 1995, $14,391,377 and $1,927,467 in principal balances,
respectively, were outstanding. No fees were paid or received by the Bank in
connection with such participations. All purchases and sales of loan
participations were at the market value of the loans at the date of sale.
In 1995, the Company and/or its subsidiaries, purchased $103,593 in
services, supplies and promotional items from Wynn's Family Market (the
"Market"), of which Larry A. Wynn, a Company director, is a part owner who
directly or indirectly controls 20.0% of the Market.
The Board of Directors of the Company believes that the above described
transactions were made on terms as favorable as the Company and the Bank could
have obtained in comparable transactions with unaffiliated third parties.
Except as described herein, there are no other currently proposed transactions
with officers, directors or owners of 5% or more of the outstanding Common
Stock of the Company. Any future transactions with such persons will be made
on terms no less favorable to the Company and the Bank than could be obtained
from unaffiliated third parties.
During fiscal 1995, the Bank had outstanding loans to certain of the
Company's directors, executive officers, their associates and members of the
immediate families of such directors and executive officers. These loans were
made in the ordinary course of business, were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with persons not affiliated with the Company or the
Bank and did not involve more than the normal risk of collectibility or present
other unfavorable features.
INDEPENDENT PUBLIC ACCOUNTANTS
Hill, Barth & King, Inc. ("HBK") served as independent auditors of the
Company for the fiscal year ended December 31, 1995. The Board of Directors
has not yet selected independent auditors for the fiscal year ending December
31, 1996. Representatives of HBK are expected to be present at the
shareholders' meeting and will have the opportunity to make a statement if they
desire to do so and to respond to appropriate questions.
REPORT ON FORM 10-K
The Company's Annual Report for fiscal year ended December 31, 1995, on
Form 10-K as filed with the Securities and Exchange Commission, is available to
shareholders who make written request therefor to the Secretary of the Company,
Garrett S. Richter, at the offices of the Company, 900 Goodlette Road North,
Naples, Florida 33940. Copies of exhibits and basic documents filed with that
report or references therein will be furnished to shareholders of record upon
request and payment of the Company's expenses in furnishing such documents.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's
1997 Annual Meeting must be received at the Company's principal executive
offices by November 30, 1996 in order to be eligible for inclusion in the
Company's proxy statement and form of proxy for that meeting.
OTHER MATTERS
On February 2, 1996, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with F.N.B. Corporation, which provides for the
merger of a wholly-owned subsidiary of F.N.B. into the Company. If the Merger
is consummated, the Company will become a wholly-owned subsidiary of F.N.B.
Upon effectiveness of the Merger, the Company's shareholders will become
entitled to receive .78 shares of F.N.B. Common Stock in exchange for each
share
14
<PAGE> 18
of Common Stock of the Company then held by them. In connection with
this Merger Agreement, the Company has granted F.N.B. an option to purchase
727,163 shares of the Company's Common Stock for $15 per share, which becomes
exercisable upon the occurrence of certain events, as defined.
The Merger Agreement and the transactions contemplated in that
agreement are subject to the approval of a majority of the outstanding shares
of the Company, excluding those shares held by F.N.B., entitled to vote at a
special meeting of shareholders, to be in June 1996, as well as the receipt of
certain regulatory consents.
The proposed merger is expected to be treated as a tax free
reorganization under Section 368(a) of the Internal Revenue Code and shall be
treated as a pooling-of-interests for accounting purposes. At December 31,
1995, F.N.B. had total assets of approximately $1.7 billion.
With regard to this pending merger transaction, Messrs. Tice, Richter,
Coghill and Schaeffer all waived their rights to the severance payments
provided for in the Agreements, as outlined above under "Employment and
Retention Agreements".
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if other matters should come before the Annual
Meeting, it is the intention of the persons named in the enclosed form of Proxy
to vote the Proxy in accordance with their judgment of what is in the best
interest of the Company.
By Order of the Board of Directors,
Gary L. Tice
Chairman of the Board, President
and Chief Executive Officer
Naples, Florida
March 28, 1996
15
<PAGE> 19
EXHIBIT A
SOUTHWEST BANKS, INC.
900 Goodlette Road, North
Naples, Florida 33940
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT
THE 1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Lewis S. Albert and C.C. Coghill, and
each of them, attorneys and proxies with full power of substitution, to vote in
the name of and as proxy for the undersigned at the Annual Meeting of
Shareholders of Southwest Banks, Inc. to be held on Monday, April 15, 1996 at
5:00 p.m. at the Naples Beach Hotel & Golf Club, 851 Gulfshore Boulevard North,
Naples, Florida 33940, and at any adjournment thereof, according to the number
of votes that the undersigned would be entitled to cast if personally present.
(1) To elect two directors to serve for a term of three years and until their
successors are elected and qualified:
JAMES S. LINDSAY PETER MORTENSEN
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to vote
(except as indicated to the for all nominees
contrary below)
To withhold authority for any nominee, write the nominee's name on the
line below:
- --------------------------------------------------------------------------------
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
(2) To consider and take action upon such other matters as may properly
come before the meeting or any adjournment or postponement thereof.
PROPERLY EXECUTED PROXIES WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO SUCH DIRECTIONS ARE GIVEN, SUCH
<PAGE> 20
PROXIES WILL BE VOTED FOR ALL NOMINEES REFERRED TO IN PARAGRAPH (1).
The undersigned revokes any prior proxies to vote the shares covered
by this proxy:
-------------------------------
Signature
-------------------------------
Signature
Date:
-------------------, 1996
(When signing as attorney, executor,
administrator, trustee or guardian,
please give title as such. If
stockholder is a corporation,
corporate name should be signed by
an authorized officer. For joint
accounts, each joint owner should
sign.)
PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED REPLY ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
