NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1999
Notice is hereby given that the Annual Meeting of the Stockholders of
GULF WEST BANKS, INC. (the "Company") will be held at the Feather Sound Country
Club located at 2201 Feather Sound Drive, St. Petersburg, Florida, on April 15,
1999, at 5:00 p.m. Eastern Daylight Time, for the following purposes:
1. To elect three directors to serve until the next Annual
Meeting of Stockholders at which their respective terms
terminate and until their successors are duly elected and
qualified.
2. To consider and vote upon the adoption of an Employee Stock
Purchase Plan.
3. To consider and vote upon an amendment to the Company's
Articles of Incorporation to increase the maximum authorized
shares of its common stock from 10,000,000 shares to
25,000,000 shares.
4. To transact such other business as may properly come before
the meeting.
Only stockholders of record at the close of business on February 28,
1999, are entitled to notice of and to vote at said meeting or at any
adjournments thereof.
By Order of the Board of Directors,
Gordon W. Campbell
Chairman of the Board
and President
March 16, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS, YOU ARE
URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. IF YOU DO ATTEND THE MEETING AND DECIDE THAT YOU
WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
<PAGE>
GULF WEST BANKS, INC.
425 22ND AVENUE NORTH, ST. PETERSBURG, FLORIDA 33704
PROXY STATEMENT
SOLICITATION
This proxy statement is furnished by and on behalf of the Board of
Directors of GULF WEST BANKS, INC., a Florida corporation ("Gulf West" or the
"Company"), in connection with the solicitation of proxies for use at the Annual
Meeting of Stockholders, to be held on April 15,1999 at the Feather Sound
Country Club located at 2201 Feather Sound Drive, St. Petersburg, Florida at
5:00 p.m. Eastern Daylight Time, and at any adjournment thereof (the "Annual
Meeting"). At the Annual Meeting, the presence in person or by proxy of the
holders of a majority of the total number of shares of Common Stock outstanding
as of the record date will constitute a quorum. Abstentions and broker non-votes
will be considered as present for purposes of determining a quorum. This Proxy
Statement and the accompanying proxy card, together with the Company's Annual
Report for the fiscal year ended December 31, 1998, are first being sent or
given to stockholders on or about __________________.
VOTING OF PROXIES
All shares represented by properly executed proxies will be voted in
accordance with the instructions indicated thereon unless such proxies
previously have been revoked. If any proxies of holders of Common Stock do not
contain voting instructions, the shares represented by such proxies will be
voted FOR the Director nominees named in PROPOSAL 1 and FOR the adoption of the
Employee Stock Purchase Plan described in PROPOSAL 2 and FOR the increase in the
maximum number of authorized shares of common stock as described in PROPOSAL 3.
The Board of Directors does not know of any business to be brought before the
Annual Meeting other than as indicated in the notice, but it is intended that,
as to any other such business, votes may be cast pursuant to the proxies in
accordance with the judgment of the persons acting thereunder. Abstentions will
be included in vote totals and considered negative votes; broker non-votes will
not be included in vote totals and will not be considered in determining the
outcome of the vote.
Any stockholder who executes and delivers a proxy may revoke it at any time
prior to its use upon (a) receipt by the Secretary of the Company of written
notice of such revocation; (b) receipt by the Secretary of the Company of a duly
executed proxy bearing a later date; or (c) appearance by the stockholder at the
Annual Meeting and his request for the return of his proxy made to the inspector
of elections prior to the taking of any vote.
Only stockholders of record at the close of business on February 28, 1999
are entitled to notice of, and to vote at, the Annual Meeting. As of, February
28, 1999 there were shares of Common Stock outstanding, each of which is
entitled to one vote. An additional _____________________ were held in escrow by
the Company's transfer agent representing shares to be issued to former
stockholders of Citizens National Bank and Trust Company upon surrender of their
Citizen's shares to the transfer agent.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of February 28, 1999, the record date,
the beneficial ownership of Gulf West's outstanding Common Stock by (i) each
person known by the Company to own beneficially more than 5% of the shares of
the Company's Common Stock (ii) each of the Named Officers named in the Summary
Compensation Table and each director of the Company and the Company's
wholly-owned subsidiary, Mercantile Bank ("Mercantile" or the "Bank"), and (iii)
all executive officers and directors as a group, based on information filed with
the Securities and Exchange Commission and information provided directly to the
Company by those persons. Unless otherwise indicated, all shares are held with
sole voting and investment power.
<TABLE>
<CAPTION>
POSITION SHARES
NAME AND ADDRESS OF WITH COMPANY BENEFICIALLY PERCENT
BENEFICIAL OWNER OR BANK OWNED(1) OF CLASS(2)
- ------------------- ------------ ------------ -----------
<S> <C> <C> <C>
5% BENEFICIAL OWNERS:
Northern Trust Corporation 863,335(3) 12.21%
of Florida, NA
700 Brickell Avenue
Miami, FL 33131
DIRECTORS:
Gordon W. Campbell Chairman of the Board 761,421(4) 10.76%
and President
Company and Mercantile
Henry W. Hanff, M.D. Director 307,958(5) 4.36%
Company and Mercantile
Thomas M. Harris Director 102,023(6) 1.44%
Company and Mercantile
Pandurang V. Kamat, M.D. Director 318,118(7) 4.50%
Company and Mercantile
John Cooper Petagna Director 24,566(8) *
Company and Mercantile
Ross E. Roeder Director 62,047(9) *
Company and Mercantile
Austin L. Fillmon Director 62,318(10) *
Mercantile
Van L. McNeel Director 16,335(11) *
Mercantile
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
POSITION SHARES
NAME AND ADDRESS OF WITH COMPANY BENEFICIALLY PERCENT
BENEFICIAL OWNER OR BANK OWNED(1) OF CLASS(2)
- ------------------- ------------ ------------ -----------
<S> <C> <C> <C>
DIRECTORS/NOMINEES:
Algis Koncius Director 177,205(12) 2.51%
Company and Mercantile
Louis P. Ortiz, CPA Director 85,783(13) 1.21%
Company and Mercantile
P.N. Risser, III Director 224,297(14) 3.17%
Company and Mercantile
OTHER NAMED EXECUTIVE OFFICERS:
Robert A. Blakley Vice President 49,293(15) *
Company
Executive Vice President
Mercantile
Barry K. Miller Executive Vice President 72,366(16) 1.02%
Mercantile;
Secretary/Treasurer
Company and Mercantile
Douglas Winton Vice President 27,012(17) *
Company
Executive Vice President
Mercantile
All Directors and Named Officers
as a group (14 persons) 2,290,742(18) 32.39%
</TABLE>
- ------------
* Represents less than one percent.
(1) The amount beneficially owned by each person has been determined under
Rule 13d-3, and includes shares which each person has the right to
acquire within the next sixty (60) days.
(2) In calculating the percentage ownership for a given individual or group,
the number of shares of Gulf West Common Stock outstanding includes
unissued shares subject to options, rights, or conversion privileges
exercisable within sixty (60) days held by such individual or group, but
are not deemed outstanding by any other person or group.
(3) Based on a Schedule 13G filing with the Securities and Exchange
Commission dated July 8, 1998. Shares held as trustee for the benefit of
John Wm. Galbraith. Mr. Galbraith also owns an additional 10,082 shares
outside the trust.
3
<PAGE>
(4) Consists of 94,985 shares which Mr. Campbell has the right to acquire
under presently exercisable outstanding stock options, 148,526 shares
held in a Revocable Trust, 22,305 shares held in an IRA account, and
484,000 shares held in a limited family partnership in which Mr. Campbell
is general partner and 11,605 shares owned by his spouse.
(5) Includes 6,050 shares which Dr. Hanff has the right to acquire under
presently exercisable outstanding stock options, 257,257 shares held in a
limited family partnership, 39,244 shares help by a profit sharing trust
of his business, 4,400 shares held by his business and 1,007 shares held
in his name.
(6) Includes 15,429 shares which Mr. Harris has the right to acquire under
presently exercisable outstanding stock options, 3,429 shares owned
jointly with his spouse, and 1,515 shares held only in his spouse's name
and as to which Mr. Harris disclaims beneficial ownership.
(7) Includes 6,050 shares which Dr. Kamat has the right to acquire under
presently exercisable outstanding stock options, 30,518 shares held
jointly with his spouse, and 148,684 shares held by his spouse as
guardian for their children.
(8) Consists of 24,566 shares Mr. Petagna owns jointly with his spouse.
(9) Includes 15,429 shares which Mr. Roeder has the right to acquire under
presently exercisable outstanding stock options and 2,200 shares owned by
his company pension plan.
(10) Includes 3,630 shares which Mr. Fillmon has the right to acquire under
presently exercisable outstanding stock options, 19,562 shares owned
jointly by Mr. Fillmon and his spouse and 19,171 shares held by his wife.
(11) Includes 3,630 shares which Mr. McNeel has the right to acquire under
presently exercisable outstanding stock options,
(12) Includes 8,257 shares owned by his spouse and 220 shares owned by his
children.
(13) Consists of 15,429 shares which Mr. Ortiz has the right to acquire under
presently exercisable outstanding stock options, and 70,354 shares in the
name of his partnership.
(14) Includes 15,429 shares which Mr. Risser has the right to acquire under
presently exercisable outstanding stock options, 49,404 shares held
through his company retirement plan and 2,541 shares held jointly.
(15) Includes 42,654 shares which Mr. Blakley has the right to acquire under
presently exercisable outstanding stock options and 1,622 shares held by
his spouse.
(16) Includes 49,006 shares which Mr. Miller has the right to acquire under
presently exercisable outstanding stock options and 19,637 shares held
jointly with his spouse and 1,989 held by his spouse.
(17) Includes 25,144 shares which Mr. Winton has the right to acquire under
presently exercisable outstanding stock options.
(18) Includes 292,865 shares the named officers and directors have the right
to acquire under agreements and presently exercisable stock options.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The bylaws of Gulf West and Mercantile both provide that directors will
be divided into three classes with the number of directors in each class being
as nearly equal as possible. The terms of all members of one class expire in the
same year, and each class is elected for a three-year term. There are no
arrangements or understandings between either Gulf West or Mercantile or any
director or executive officer pursuant to which any such individual has been
elected a director or executive officer of Gulf West or Mercantile. All
executive officers of Gulf West and Mercantile hold office at the pleasure of
their respective Boards of Directors. The following table sets forth the names
of the directors and executive officers of Gulf West and Mercantile, their ages,
and positions held by them with Gulf West and Mercantile.
<TABLE>
<CAPTION>
DIRECTOR OF
POSITION(S) POSITION(S) GULF WEST/ TERM
NAME AGE WITH GULF WEST WITH MERCANTILE BANK SINCE EXPIRES
- ---- --- -------------- --------------- ----------- -------
<S> <C> <C> <C> <C> <C>
Robert A. Blakley 50 Vice President Executive Vice President NA/NA NA/NA
Gordon W. Campbell 66 Chairman/President Chairman/President 1994/1990 2000/2000
Austin L. Fillmon 70 NA Director NA/1998 NA/1999
Henry W. Hanff, 56 Director Director 1998/1998 2001/2001
M.D.
Thomas M. Harris 65 Director Director 1988/1986 2001/2001
Pandurang V. Kamat, 59 Director Director 1998/1998 2000/2000
M.D.
Algis Koncius 54 Director Director 1994/1989 1999/1999
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR OF
POSITION(S) POSITION(S) GULF WEST/ TERM
NAME AGE WITH GULF WEST WITH MERCANTILE BANK SINCE EXPIRES
- ---- --- -------------- --------------- ----------- -------
<S> <C> <C> <C> <C> <C>
Barry K. Miller 50 Secretary/Treasurer Executive Vice President/ NA/NA NA/NA
Secretary/Treasurer
Van L. McNeel 73 NA Director NA/1998 NA/2001
Louis P. Ortiz, CPA 54 Director Director 1994/1986 1999/1999
John C. Petagna, Jr. 49 Director Director 1994/1994 2000/2000
P. N. Risser, III 57 Director Director 1994/1986 1999/1999
Ross E. Roeder 61 Director Director 1995/1995 2001/2001
John T. Sica 58 Vice President Executive Vice President NA/NA NA/NA
Douglas Winton 51 Vice President Executive Vice President NA/NA NA/NA
</TABLE>
Biographical information about the executive officers and directors of
Mercantile and Gulf West is set forth below. All such information has been
furnished to Gulf West by each such person.
GORDON W. CAMPBELL has served as director of Gulf West, in the capacity of
Chairman of the Board and President of Gulf West since its inception and has
served as Chairman of the Board and President of Mercantile since 1990. He
currently serves as Chairman of Templeton Funds Trust Company, Vice Chairman of
Templeton Funds Annuity Company an as a Director of Opus South Corporation. He
was Chairman of SouthTrust Bank of Tampa (formerly Gulf/Bay Bank) from 1985 to
1990, Vice Chairman of NCNB National Bank, Tampa from 1983-1984 and President
and CEO of Exchange Bancorp of Tampa from 1974-1983.
AUSTIN L. FILLMON has served as a Director of Mercantile since February,
1998. He served as a Director of Citizens National Bank and Trust Company, Port
Richey, Florida from its inception in 1988 until January, 1998 when Citizens was
merged into Mercantile. Mr. Fillmon retired from the general contracting and
real estate development business in 1996 after 18 years of operating his own
company.
HENRY W. HANFF, M.D. has served as a Director of Gulf West since January,
1998 and as a Director of Mercantile since February, 1998. He served as Chairman
of the Board of Citizens National Bank and Trust Company, Port Richey, Florida
from its inception in 1988 until January, 1998 when Citizens was merged into
Mercantile. Dr. Hanff is an orthopaedic surgeon .
THOMAS M. HARRIS has served as director of Gulf West since its inception
and has served as a director of Mercantile since 1986. He has been a partner
with the law firm of Harris, Barrett, Mann & Dew in St. Petersburg, Florida,
since 1979.
PANDURANG V. KAMAT has served as a Director of Gulf West since January,
1998 and as a Director of Mercantile since February, 1998. He served as a
Director of Citizens National Bank and Trust Company, Port Richey, Florida from
1989 to January, 1998 when Citizens was merged into Mercantile. Dr. Kamat is a
cardio-thoracic surgeon and has had his own practice since 1986.
ALGIS KONCIUS has served as director of Gulf West since its inception and
has served as a director of Mercantile since 1989. He has been the owner and
President of Koncius Enterprises, a real estate investment company in
Cincinnati, Ohio, since 1968.
5
<PAGE>
VAN L. MCNEEL has served as a director of Mercantile since February, 1998.
Mr. McNeel was Chairman and CEO of Polymer International Corp. from 1982 to 1989
and Chairman and CEO of McNeel International Corp. from 1989 to 1997. He
currently serves as Chairman of McNeel Capital Company.
LOUIS P. ORTIZ, CPA has served as director of Gulf West since its inception
and has served as a director of Mercantile since 1986. He is the President,
Managing Partner and a Director of the public accounting firm of Garcia & Ortiz,
P.A. located in St. Petersburg, Florida. He has been with that firm since 1972.
JOHN C. PETAGNA, JR. has served as director of Gulf West since its
inception and began serving as a director of Mercantile in 1994. He has been the
President of American Municipal Securities, Inc., an investment brokerage firm
with headquarters in St. Petersburg, Florida, since 1980.
P. N. RISSER, III has served as director of Gulf West since its inception
and has been a director of Mercantile since 1986. Since 1975 he also has been
the Chairman and Chief Executive Officer of Risser Oil Corporation, which is
involved in the petroleum industry with headquarters in Clearwater, Florida.
ROSS E. ROEDER joined the Board of Gulf West and Mercantile in 1995. Mr.
Roeder is Chairman and CEO of Smart & Final Stores Corporation, Vernon,
California. He is also a director of HTI Technologies, Inc., St. Petersburg,
Florida; Henry Lee, Miami, Florida; Chicos FAS, Inc., Ft. Myers, Florida; and
Port Stockton Foods, Stockton, California. Mr. Roeder is also Chairman and CEO
of M.D.R., Inc., an international consulting group. He was Chairman of Morgan
Kaufman Publishers, San Francisco, California from 1984 through 1998.
BARRY K. MILLER serves as Executive Vice President, Chief Financial
Officer, Corporate Secretary and Treasurer of Mercantile and has held an officer
position with Mercantile since 1986. He is also Corporate Secretary and
Treasurer of Gulf West. He has over 25 years of banking experience.
ROBERT A. BLAKLEY serves as Chairman of the Board of Liberty Leasing
Corporation, Vice President of Gulf West and Executive Vice President of
Mercantile and manages all bank lending functions. He has been with Mercantile
since 1991. Prior to joining Mercantile he was with Southeast Bank from 1989 to
1991 as Vice President in Commercial Lending. He has been in the banking
business since 1978.
JOHN T. SICA serves as Vice President of Gulf West and as Executive Vice
President of Mercantile, with responsibility for administration of Mercantile's
branch office network. He joined Mercantile in 1993. Prior to joining Mercantile
he was Executive Vice President and Chief Operating Officer with SouthTrust Bank
of Tampa where he was employed from 1985 to 1993.
DOUGLAS WINTON serves as Vice President of Gulf West and as Executive Vice
President of Mercantile with responsibility for community banking, marketing,
and business development. He joined Mercantile in 1995. Prior to joining
Mercantile, he was President, Chief Executive Officer and a director of The
Terrace Bank in Temple Terrace, Florida.
6
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The bylaws of the Company provide that Directors will be divided into three
classes, with the number of directors in each class being as nearly equal as
possible. The terms of all members of one class expire in the same year, and
each class is elected for a three-year term. The number of Directors whose term
is expiring this year is three. Accordingly, the Board of Directors proposes the
election of three Directors, each to hold office until the Annual Meeting of
Stockholders to be held in the year 2002 or until a successor has been elected
and qualified. Unless otherwise instructed by the stockholder, the persons named
in the accompanying proxy intend to vote for the election of the persons listed
below, all of whom are currently Directors of the Company. If any nominee
becomes unavailable for any reason or should a vacancy occur before the election
(which events are not anticipated), the proxies will be voted for the election
of a substitute nominee to be selected by the persons named in the proxy.
CERTAIN INFORMATION REGARDING DIRECTOR NOMINEES
<TABLE>
<CAPTION>
NAME AGE OCCUPATION/BACKGROUND
- ---- --- ---------------------
<S> <C> <C>
Algis Koncius 54 Director of Company since its inception and Director of
Bank since 1989. He has been the owner and President of
Koncius Enterprises, a real estate investment company in
Cincinnati, Ohio, since 1968.
Louis P. Ortiz, CPA 54 Director of the Company since 1994 and Director of the
Bank since 1986. He has been a partner with the public
accounting firm of Garcia & Ortiz, P.A. located in St.
Petersburg, Florida, since 1972.
P. N. Risser, III 57 Director of Company since 1994 and a Director of
Mercantile since 1986. Since 1975 he also has been
the Chairman and Chief Executive Officer of Risser
Oil Corporation, which is involved in the petroleum
industry with headquarters in Clearwater, Florida.
</TABLE>
The election of Directors will require the affirmative vote of a plurality
of shares voting in person or by proxy at the Annual Meeting. THE BOARD
RECOMMENDS THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE ABOVE LISTED NOMINEES
AS DIRECTORS.
--- --- --- ---
7
<PAGE>
PROPOSAL 2
APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE COMPANY'S EMPLOYEE
STOCK PURCHASE PLAN AND URGES EACH SHAREHOLDER TO VOTE "FOR" THE APPROVAL.
At its October 16, 1998 meeting, the Company's Board of Directors
unanimously adopted an Employee Stock Purchase Plan (the "Plan"), subject to
shareholder approval. The purpose of the plan is to reward the employees of the
Company with an opportunity to purchase the common stock of the Company at a
discount to market thereby incenting employees to have an ownership interest in
their Company. The Board believes that the ownership of the Company's common
stock by its employees results in a closer link between the interests of the
employees, the performance of the Company and shareholder interests.
PLAN SUMMARY
The Plan will be administered by a committee of the Board comprised of no
fewer than three Directors. The committee has the authority to interpret and
construe all provisions of the Plan, to adopt rules and regulations for
administering the Plan and to make all other determinations necessary for
administering the Plan.
The maximum number of shares to be issued pursuant to the Plan is 100,000
shares. These shares may be authorized but unissued shares or treasury shares.
The maximum number of shares that any employee may purchase during any calendar
year is 1,000 shares subject to the additional limitation of a maximum dollar
amount purchased in any calendar year of $25,000.
To participate in the Plan an employee must be regularly scheduled to work
more than 20 hours per week and must have completed six months of employment
prior to the annual Offering Commencement Date of January 1. An eligible
employee becomes a Plan participant by completing an authorization for a payroll
deduction on the form provided by the Company and filing it with the Payroll
Department of the Company on or before the date set by the Company, which date
shall be prior to the annual Offering Commencement Date. Payroll deductions must
be in whole percentages from 1% through 15%. In lieu of payroll deductions, a
participant may elect to make a single cash payment to the Company prior to the
Offering Commencement Date.
The price at which a participant shall purchase Company stock will be the
lesser of:
(a) 85% of the closing price of the stock on the
Offering Commencement Date or the nearest prior
business day on which trading occurred on the
NASDAQ National Market System; or
(b) 85% of the closing price of the stock on the
Offering Termination Date or the nearest prior
business day on which trading occurred on the
NASDAQ National Market System.
The participant will be able to purchase as many whole shares of stock as the
balance in the participant's account will permit. Fractional shares will not be
issued.
The Plan is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended.
As such, employees will not recognize taxable income on the grant or exercise of
the option to purchase stock. Instead the employee is taxed when the employee
sells or otherwise disposes of the stock. If the employee has not terminated
employment more
8
<PAGE>
than three months prior to the exercise of the option to purchase stock and has
not made a disqualifying disposition (as described below), then
(a) the excess of : (i) the lesser of the fair
market value of the stock at disposition or the
fair market value at grant, over (ii) the
amount paid for the stock, is taxable as
ordinary income; and
(b) all other appreciation is taxed as a capital
gain.
For a qualifying disposition, the company is not entitled to a federal income
tax deduction for the income recognized by the employee and federal income tax
withholding is not required.
If the employee disposes of the stock within either (i) one year from the
date of exercise, or (ii) two years from the date of grant, it will be
considered a disqualifying disposition and the employee will be required to
recognize ordinary income for the full differential between the stock's fair
market value at exercise and the amount paid for the stock. The Company will be
entitled to a federal income tax deduction for the amount of the income
recognized by the employee.
The complete Plan is included in "Appendix A" to this Proxy Statement.
PROPOSAL 3
APPROVAL TO INCREASE THE MAXIMUM NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF AN AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE MAXIMUM AUTHORIZED SHARES OF
ITS COMMON STOCK FROM 25,000,000 SHARES TO 50,000,000 SHARES AND URGES EACH
SHAREHOLDER TO VOTE "FOR" THE PROPOSAL.
On February 18, 1998, subject to shareholder approval, the Board of
Directors unanimously voted to amend Article V of the Company's Articles of
Incorporation to increase the number of shares the Company is authorized to
issue from 10,000,000 shares to 25,000,000 shares. This amendment will become
effective if approved at the meeting by shareholders who hold a majority of all
the outstanding shares of common stock. If the amendment is approved by
shareholders, the amendment will be filed with the Florida Secretary of State
and it will become effective immediately.
The Company currently has over 6,600,000 shares issued and outstanding
leaving less than 4,000,000 shares available for issuance (i) in raising
additional capital, (ii) for stock dividends, (ii) the exercise of stock
options, (iv) the sale of shares under the Employee Stock Purchase Plan and (v)
for the possible acquisition of other financial services companies. The Board
believes that it is in the best interests of the Company to have an adequate
number of authorized unissued shares available and recommends the approval of
this proposal.
9
<PAGE>
ADDITIONAL INFORMATION CONCERNING DIRECTORS
DIRECTORS' FEES
The standard compensation for the Company's directors consists of an annual
retainer fee and a fee per meeting attended, which are set by the Board each
year. The Company's Directors were paid an annual retainer fee of $5,000 in 1998
for their services on the Company's Board. This fee was paid to the directors in
the form of 833 shares of Gulf West Common Stock. The Company's Directors were
also paid $500 per each Board meeting attended and $250 per each committee
meeting attended on other than Board meeting days. Directors of the Bank who are
otherwise employed by the Bank are not compensated for their services as
directors. Outside directors of the Bank, most of whom are also Directors of the
Company, were paid $1,000 per each Board meeting attended and $250 per each
committee meeting attended on other than Board meeting days .
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board met, in person or by teleconference, ten times during the last
fiscal year. Each incumbent Director attended at least 75% of the Board meetings
and Committee meetings of which they were a member.
The Company has an Executive Committee which in 1998 was comprised of
Messrs. Campbell, Hanff, Harris, Petagna and Roeder. Mr. Campbell serves as
Chairman. The Executive Committee, when the Board is not in session, has the
authority to act on behalf and exercise all powers of the Board except as
limited by any resolution of the Board or by the Company's Bylaws. The Executive
Committee may not declare dividends; amend the charter or bylaws; recommend to
stockholders a merger, consolidation or conversion; sell, lease or otherwise
dispose of all or substantially all of the property and assets of the Company;
dissolve the Company; or approve a transaction in which any member of the
Executive Committee has any material beneficial interest. The Executive
Committee also serves as the Company's Compensation/Stock Option Committee. The
function of this committee is to review and establish compensation and benefit
plans for executive officers of the Company and its subsidiaries and to review
and approve the award of stock options to officers and directors of the Company
and its subsidiaries. The Company's Executive Committee met twice during 1998.
The Company's Audit Committee in 1998 was comprised of Messrs. Ortiz (who
served as Chairman), Kamat and Roeder. This committee's principal function is to
oversee and direct the Company's internal audit program and determine that
adequate internal audit controls and procedures are being maintained. The Audit
Committee met four times during 1998.
The Bank's Board of Directors met four times during 1998. The Bank
presently has four committees -- an Executive Committee, an Audit Committee, an
Investment Committee, and a Director Loan Committee, which meet as necessary.
Pursuant to the Bank's Bylaws, the Board of Directors, by resolution adopted by
a majority of the full Board, shall designate members of the various committees
of the Board.
The Bank's Executive Committee in 1998 was comprised of Messrs. Campbell
(who served as Chairman), Hanff, Harris, Petagna and Roeder. The principal
function of the Executive Committee is to act on behalf and exercise all powers
of the Board of Directors of the Bank which may lawfully be delegated to it in
the management of the business and affairs of the Bank, when the Board of
Directors is not in session. The Executive Committee also serves as the Bank's
Compensation Committee. The function of this committee is to review and
establish compensation and benefit plans for executive officers of the Bank and
to recommend to the Company's Executive Committee the award of stock options to
Bank officers and directors. The Committee met nine times during 1998.
The Audit Committee in 1998 was comprised of Messrs. Ortiz (who served as
Chairman), Kamat and
10
<PAGE>
Roeder. This committee's principal function is to oversee and direct the
Bank's internal audit program and determine that adequate internal audit
controls and procedures are being maintained. The Audit Committee met four times
during 1998.
The Investment Committee in 1998 was comprised of Messrs. Koncius (who
served as Chairman), Campbell and Petagna. The Investment Committee's principal
function is to ensure adherence to investment policies, to recommend amendments
thereto and to advise management on investment strategies. This Committee met
once during 1998.
The Director Loan Committee in 1998 was comprised of Messrs. Campbell (who
served as Chairman), Fillmon, Harris, Ortiz, Petagna and Roeder. The remaining
directors serve as alternate members. The principal function of the Director
Loan Committee is to ensure compliance with loan policies, to recommend any
amendments thereto, to approve or recommend action on designated credits above
any bank officer's lending authority, to exercise authority regarding loans and
to exercise, when the Board of Directors is not in session, all other powers of
the Board regarding loans that may be lawfully delegated to it. This committee
meets jointly with the Board of Directors at its regularly scheduled monthly
meetings and on-call as needed. Including such joint meetings, the Committee met
a total of twenty-two times in 1998.
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 1998,
December 31, 1997, and December 31, 1996, the cash compensation paid by the
Company, as well as other compensation paid or accrued for these years, as to
the (i) Company's Chief Executive Officer and (ii) to each of the other
executive officers whose total salary and bonus for the year exceeded $100,000
("Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------------------------------------
ALL
OTHER OTHER
NAME & PRINCIPAL SALARY BONUS ANNUAL COMPENSATION(2)
POSITION YEAR ($) ($) COMPENSATION(1) ($)
----------------- ---- ------ ----- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Gordon W. Campbell 1998 200,000 -- 6,000 6,180
Chairman and President 1997 145,000 -- 6,000 4,530
1996 145,000 14,500 6,000 5,182
Robert A. Blakley 1998 104,000 2,700(3) 6,000 3,300
Executive Vice President 1997 84,000 -- 6,000 2,700
1996 84,000 8,400 6,000 3,078
Barry K. Miller 1998 115,000 3,180(3) 6,000 3,630
Executive Vice President 1997 100,000 -- 6,000 3,180
Secretary/Treasurer 1996 100,000 10,000 6,000 3,630
Douglas Winton 1998 100,000 2,580(3) 6,000 3,180
Executive Vice President 1997 80,000 -- 6,000 2,580
1996 80,000 8,000 6,000 1,470
</TABLE>
- ------------
(1) An automobile allowance of $500.
(2) Represents Bank's match of officer's contribution to 401(k) plan.
(3) For 1997 calendar year paid in 1998
11
<PAGE>
STOCK OPTION PLAN
The Company has a stock option plan for the directors and employees of the
Company and the Bank. Under the plan, the Company's Board may award options
totaling up to 12% of the Company's total outstanding shares. The option price
is established by the Company's Board but shall not be less than the greater of
the fair market value of the stock as of the date the option is granted or the
par value of such shares. If the shares are not publicly traded, the book value
may be substituted for the fair market value. The period over which options may
be exercised and vesting periods are determined by the Board for each option
granted. Upon sale or change in control of the Company, all options become
immediately vested and exercisable. The following table sets forth information
with respect to the Named Officers concerning the exercise of options during
1998 and unexercised options held by the Named Officers at fiscal year end
pursuant to such Stock Option Plan and including any other Stock Option granted.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS HELD AT 12/31/98 AT 12/31/98
NAME EXERCISE (#) REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- ---- ------------ ----------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Gordon W. Campbell 123,456 $307,882 94,985/0 388,059/0
Robert A. Blakley 0 0 36,604/24,200 239,329/97,768
Barry K. Miller 19,057 34,493 49,308/24,200 227,544/97,768
Douglas Winton 0 0 17,923/42,688 92,211/145,246
</TABLE>
- ------------
(1) Market value of underlying common stock at exercise date, minus the
exercise price.
OPTION GRANTS IN LAST FISCAL YEAR AND LONG-TERM INCENTIVE PLANS
<TABLE>
<CAPTION>
NUMBER OF PERCENT POTENTIAL REALIZABLE VALUE AT
SECURITIES OF TOTAL ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM(2)
GRANTED(#) EMPLOYEES IN BASE PRICE EXPIRATION --------------
NAME (1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- --------- ----------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Gordon W. Campbell 84,700 25.89% $4.96 1/15/08 $263,914 $668,815
Robert A. Blakley 24,200 7.40% $4.96 1/15/08 $ 75,404 $191,090
Barry K. Miller 24,200 7.40% $4.96 1/15/08 $ 75,404 $191,090
Douglas Winton 35,200 10.76% $4.96- 1/15/08- $131,991 $334,495
$8.18 11/19/08
</TABLE>
- ------------
(1) These options were vested immediately.
(2) The potential realizable value of grant of options, assuming that the
market price of common stock appreciates in value from the date of grant
to the end of the option term at either a 5% or a 10% annualized rate.
The ultimate values of the options will depend on the future market price
of the common stock, which cannot be forecast with reasonable accuracy.
The actual value, if any, an optionee will realize upon exercise of an
option will depend on the excess of the market value of the common stock
over the exercise price on the date the option is exercised.
There are no other long-term incentive programs for the Named Officers.
12
<PAGE>
SALARY CONTINUATION AGREEMENTS
The Bank has entered into agreements with six of its officers whereby the
Bank has agreed to make certain payments to the executives upon their severance
or retirement and to their designated beneficiaries in the event of their
deaths. The payments will be made to the officers or beneficiaries over a period
of fifteen years. The table below provides information relative to each of the
executives covered under this plan.
<TABLE>
<CAPTION>
ANNUAL BENEFIT RETIREMENT EFFECTIVE VESTING
OFFICER AT RETIREMENT DATE DATE PERIOD
- ------- -------------- ---------- --------- -------
<S> <C> <C> <C> <C>
Gordon W. Campbell....... $50,000 9/1/02 8/17/92 10 years
Philip H. Chesnut........ $15,000 2/1/10 1/01/98 12 years
Barry K. Miller.......... $50,000 2/1/14 1/01/94 20 years
Robert A. Blakley........ $50,000 2/1/14 1/01/94 20 years
John T. Sica............. $25,000 6/1/05 5/01/95 10 years
Douglas Winton........... $40,000 2/1/13 1/01/97 16 years
</TABLE>
The Bank has not committed to fund these agreements and the covered
executives or their beneficiaries shall be general creditors of the Bank in the
same manner as any other creditor having an unsecured claim against the Bank.
The cost of providing these benefits is being accrued by the Bank over the
working lives of the executives. The benefits are self-funded because the plan
is self-funded. The Bank will have use of these assets for investment in the
Bank's loan and securities portfolio throughout the term. These accruals are
charged to employee benefit expense on the Bank's income statement. The table
below shows the amount which was or will be charged to expense by period
indicated.
<TABLE>
<CAPTION>
TIME EXPENSE AMOUNT
---- --------------
<S> <C>
1995 $ 66,000
1996 76,000
1997 96,000
1998 111,000
1999 121,000
2000 131,000
2001-2005 565,000
2006-2010 467,000
</TABLE>
STOCK PURCHASE PLAN
At its October 16, 1998 meeting, the Company's Board of Directors
unanimously adopted an Employee Stock Purchase Plan (the "Plan"), subject to
shareholder approval. See "Proposal 2 - Approval of Employee Stock Purchase
Plan" for a description of the Plan. Prior to the adoption of this new Plan, the
Company maintained a different Employee Stock Purchase Plan for the officers and
employees of the Company and its subsidiaries. Under that plan, officers and
employees were able to purchase up to 480 shares of the Company's Common Stock
each calendar year, with a minimum purchase of 24 shares per year. Stock
purchases were paid for in cash or through payroll deduction during the year of
purchase. Elections to purchase stock were made prior to January 15 of each
year. The purchase price was the greater of market value or book value as of the
close of business on December 31 of the year immediately prior to the year of
purchase. Any officer or employee who could not complete the current year's
purchase commitment was barred from any more purchases under the plan for the
current year plus one full calendar year.
13
<PAGE>
KEY MAN LIFE INSURANCE
The Bank is the beneficiary of life insurance contracts purchased on the
lives of six of its officers. These policies are whole life policies with the
premiums paid either lump sum at inception or over a five year period. The cash
values of these policies are carried as an asset on the Company's financial
statements. Information relative to these policies is shown below.
<TABLE>
<CAPTION>
CASH VALUE AT
INSURED FACE AMOUNT DECEMBER 31, 1998
------- ----------- -----------------
<S> <C> <C>
Robert A. Blakley............ $ 771,235(1) $139,225
$ 285,000(2) $119,244
Philip H. Chesnut............ $ 359,000(2) $161,610
Gordon W. Campbell........... $ 900,000(3) $657,561
Barry K. Miller.............. $1,026,895(1) $190,209
John T. Sica................. $ 428,000(4) $236,405
Douglas Winton............... $ 775,000(5) $327,263
</TABLE>
- ------------
(1) Insurer is Phoenix Home Life Mutual Insurance Company.
(2) Insurer is West Coast Life Insurance Company.
(3) Insurer is Alexander Hamilton Life Insurance Company of America.
(4) Insurer is Chubb Life America.
(5) Insurer is The Mutual Group.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Bank has entered into an employment contract with Gordon W. Campbell.
The contract is for a term of ten years ending August 25, 2002 at such
reasonable salary as the parties shall agree to from time to time. The contract
requires him to perform the duties associated with the position of Chairman and
President. Upon separation from the Bank for any reason other than cause, Mr.
Campbell shall be retained as a consultant for a salary of $60,000 per year for
the remaining term of the contract. In the event there is a "sale of the bank"
(as defined therein), the term of the contract may be reduced to the lesser of 5
years from the date of the reduction or the balance of the contract.
Additionally, pursuant to the contract, Mr. Campbell was granted options to
acquire 63,525 shares of stock at the price of $2.41 per share, as adjusted for
stock dividends and stock splits, upon execution. These options were exercised
by Mr. Campbell in 1998. For loan transactions with management, see
"--Indebtedness of Management."
INDEBTEDNESS OF MANAGEMENT
From time to time the Bank will extend loans to its directors, executive
officers and their related entities, as well as to directors of the Company. All
such loans made in 1998, as well as in 1997 and 1996: (A) were made in the
ordinary course of business, (B) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (C) did not involve more than
the normal risk of collectability or present other unfavorable features.
Total loans outstanding to Company and Mercantile's directors, executive
officers, and their related entities at December 31 1998 and December 31, 1997
and 1996 were $2,041,000, $1,105,000 and $697,000 respectively.
14
<PAGE>
REGISTRATION RIGHTS AGREEMENT
The Company has entered into a Registration Rights Agreement with Gordon W.
Campbell and John Wm. Galbraith. Under the Registration Rights Agreement, the
Company has agreed with Messrs. Campbell and Galbraith that if it files a
registration statement as to any of its securities with the SEC at any time
while either of them owns Gulf West stock, the Company will at its expense
register or qualify all or, at their option, any portion of the Gulf West stock
owned by them concurrently with the registration of Gulf West securities.
In addition, Messrs. Campbell and Galbraith have the right under the
Registration Rights Agreement (subject to certain exceptions) at any time to
direct the Company to prepare and file with the SEC, at Gulf West's expense, a
registration statement sufficient to permit the public offering and sale of Gulf
West stock owned by them through the facilities of all appropriate securities
exchanges and the over-the-counter market. The Company shall, however, only be
obligated to file one such registration statement at the direction of Messrs.
Campbell and Galbraith.
If the managing underwriter of any offering covered by a registration
statement described above advises Messrs. Campbell and Galbraith in writing that
marketing factors require a limitation of the number of shares to be
underwritten, Gulf West stock held by stockholders other than Messrs. Campbell
and Galbraith shall first be excluded from such registration on a pro rata basis
in proportion to ownership of Gulf West stock by such other holders of Gulf West
stock to the extent required by such limitation. Thereafter, Gulf West stock
held by Messrs. Campbell and Galbraith shall be excluded from such registration
on a pro rata basis in proportion to their ownership of Gulf West stock to the
extent required by such limitation.
The Registration Rights Agreement also contains provisions pursuant to
which (i) Gulf West agrees to indemnify Messrs. Campbell and Galbraith against
losses, costs, and expenses incurred by them as a result of any untrue statement
of a material fact contained in any registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto,
relating to the sale of any of the Gulf West stock owned by them, or in any
application or other document or communication executed by or on behalf of the
Company or based upon written information furnished by or on behalf of Gulf West
filed in any jurisdiction in order to register or qualify Gulf West stock owned
by them under the securities or blue sky laws of any state or filed with the SEC
or any other securities commission, and (ii) Messrs. Campbell and Galbraith
agree to indemnify Gulf West, to the same extent as the foregoing indemnity by
the Company, and under the same circumstances, with respect to information
furnished by them. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of Gulf West pursuant to such provisions, or otherwise, the Company has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4 or 5 and amendments thereto
furnished to the Company pursuant to Rule 16(a)-3(e) during its most recent
fiscal year, and any written representation received from the reporting persons
as to any such Forms not being required, the Company believes that all
directors, officers or beneficial owners of more than 10 percent of the
Company's stock have filed, on a timely basis, any such reports required to be
filed with the Securities and Exchange Commission.
15
<PAGE>
EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Company has no Compensation Committee, but the Executive
Committee of the Company acts as the Compensation/Stock Option Committee and in
this capacity reviews and approves executive compensation of the Company and its
subsidiaries' executive officers. The 1997 Commitee that reviewed executive
compensation for 1998 was comprised of Messrs. Campbell (who served as
Chairman), Harris, Ortiz, and Roeder .
The current executive compensation program consists of base salary, annual
performance incentives, and long-term incentive opportunity in the form of stock
options. Base salaries are comparable with those of similar asset-sized,
publicly traded banking companies. The Committee believes this policy allows the
Company to attract and retain high quality personnel, while at the same time
maximizing Company performance. Long-term incentive is based on stock
performance through stock options. The Committee's position is that stock
ownership by management is beneficial in aligning management's and stockholder's
interests to enhance stockholder value.
Currently, the executive officers of the Company are not compensated for
their services and are only compensated for their services as officers of the
Bank through the salaries established by the Executive Committee of the Bank.
Due to recent changes in tax laws, certain non-performance-based compensation to
executives of public companies in excess of $1,000,000 is no longer deductible
for tax purposes. It is the responsibility of the Committee to determine whether
any actions with respect to this new compensation limit should be taken by the
Company. During 1998, no executive officers of the Company received any
compensation in excess of this limit nor is it anticipated that any executive
officer will receive any such compensation during 1999. Therefore, the Committee
has not taken any action to date to comply with this limit. The Committee will
continue to monitor this situation and will take appropriate action if same is
warranted in the future.
BASE SALARY. In setting the 1998 base salary for the Chief Executive
Officer, the Committee reviewed the Bank's overall financial performance during
1997, considering in particular, return on equity, net income, earnings per
share, asset quality and growth in assets compared to 1996 performance as well
to the performance of comparable community banks. The Committee also took into
consideration the Chief Executive Officer's individual performance and direct
contribution to the Bank's performance during 1997 in addition to market levels
of compensation for this position. The Bank made significant progress during
1997 in achieving its goals for all of the measures of performance reviewed by
the Committee. The Committee determined that the Chief Executive Officer's
salary for 1998 should be increased to $200,000 for 1998. The 1998 base salary
levels for the remaining Named Officers were based on similar criteria and
considerations as well as the recommendations of the Chief Executive Officer to
the Committee, and such officers' salaries were also increased.
ANNUAL BONUS. The Company's executive officers are eligible for an annual
cash bonus under the Company's Incentive Bonus Program. The Bonus Program
provides for the payment of cash incentive awards to the eligible executives
pursuant to a formula based on the Company's annual return on average
shareholder equity. There were no payments made under this plan during 1998.
LONG-TERM INCENTIVES. Directors, officers and employees of the Company and
its subsidiaries are eligible to participate in the Company's Stock Option Plan.
The Stock Option Plan is designed to assist the Company in securing and
retaining quality employees by allowing them to participate in the ownership and
financial success of the Company. The granting of stock options gives those
employees receiving the grants significant additional incentives to work for the
long term success of the Company. The Committee determines the number of option
grants made to specific individuals by evaluating their relative degree of
influence over the results of the operations of the Company. There is no
specific formula that the Committee uses in determining the individuals who will
be awarded option grants or the timing, vesting
16
<PAGE>
and amounts of such grants.
The Company granted 327,140 stock options to directors, officers and
employees in 1998 at various exercise prices, with some options vested
immediately and some vested over four years and all options expiring ten years
from the grant.
COMPENSATION COMMITTEE
Gordon W. Campbell
Ross E. Roeder
Thomas M. Harris
Louis P. Ortiz
17
<PAGE>
STOCK PERFORMANCE
The following graph presents a comparison of the cumulative total
shareholder return on the Company's common stock with the cumulative total
return of the Russell 2000 Index and the Nasdaq Bank Index since December 31,
1997. (The Company's stock started trading on the Nasdaq National Market System
on March 25, 1998.) The graph assumes that $100 was invested on December 31,
1997 in the Company's common stock, Russell 2000 Index and the Nasdaq Bank
Index.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
Gulf West Banks, Inc. 100 181.53
Nasdaq Bank Index 100 88.23
Russell 2000 Index 100 96.55
</TABLE>
18
<PAGE>
OTHER MATTERS
The Board of Directors of the Company knows of no other matters that may
come before the meeting. However, if any other matters should properly come
before the meeting or any adjournment thereof, it is the intention of the
persons named in the proxy to vote the proxy in accordance with their best
judgement.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Hacker, Johnson, Cohen & Grieb, P.A. served as the Company's
independent public accountants for the fiscal year ended December 31, 1998. The
Board of Directors has re-appointed Hacker, Johnson, Cohen & Grieb, P.A. to act
as the public accountants for the fiscal year ending December 31, 1999. A
representative of Hacker, Johnson, Cohen & Grieb, P.A. is expected to be present
at the Annual Meeting of Stockholders and will have the opportunity to make a
statement, if his firm so elects, and to respond to appropriate questions from
stockholders.
STOCKHOLDERS' PROPOSALS FOR 2000 ANNUAL MEETING
Proposals for stockholder action which eligible stockholders wish to have
included in the Company's proxy materials to be mailed to stockholders in
connection with the Company's 2000 Annual Meeting must be received by the
Company at its corporate headquarters on or before December 31, 1999.
LISTING OF STOCKHOLDERS
A complete list of the stockholders entitled to vote at the Annual Meeting
of the Stockholders, to be held on April 15, 1999, will be available for
inspection during normal business hours at the Company's headquarters for a
period of at least ten days prior to the Annual Meeting, upon written request to
the Company by a stockholder, and at all times during the Annual Meeting at the
place of the meeting.
PROXY SOLICITATION EXPENSES
The cost of this proxy solicitation, including the reasonable expenses of
brokerage firms or other nominees for forwarding proxy materials to the
beneficial owners, will be borne exclusively by the Company. In addition to
solicitation by mail, proxies may be solicited by telephone, telecopy or
personally. Proxies may be solicited by Directors, executive officers and other
employees of the Company without additional compensation.
19
<PAGE>
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 1998 is being
mailed with this Proxy Statement but is not to be considered a part hereof.
REQUESTS FOR ADDITIONAL INFORMATION
A copy of the Company's annual report on Form 10-K for the year ended
December 31, 1998, including the financial statements and schedules thereto but
excluding the exhibits, may be obtained without charge by any stockholder whose
proxy is solicited hereby upon written request to:
Barry K. Miller
Secretary
Gulf West Banks, Inc.
425 22nd Avenue North
St. Petersburg, Florida 33704
--- --- --- ---
By order of the Board of Directors,
Gordon W. Campbell
Chairman of the Board, and President
St. Petersburg, Florida
20
<PAGE>
APPENDIX A
GULF WEST BANKS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The Gulf West Banks, Inc. Employee Stock Purchase Plan is intended to
provide a method whereby employees of Gulf West Banks, Inc. and its Subsidiary
Corporations (hereinafter referred to, unless the context otherwise requires, as
the "Company") will have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Common Stock of the Company.
"Subsidiary Corporation" shall mean any present or future corporation which (a)
would be a "subsidiary corporation" of Gulf West Banks, Inc. as that term is
defined in Section 424 of the Code and (b) is designated as a participant in the
Plan by the Committee. "Committee" shall mean the individuals described in
Section 9. It is the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
2. ELIGIBILITY AND PARTICIPATION
2.01. Initial Eligibility. Any employee who is customarily employed on a
full-time or part-time basis by the Company and is regularly scheduled to work
more than 20 hours per week, and who shall have completed six months of
employment, shall be eligible to participate in offerings under the Plan which
commence on or after such six month period has concluded.
2.02. Leave of Absence. For purposes of participation in the Plan, a person
on leave of absence shall be deemed to be an employee for the first 90 days of
such leave of absence and such employee's employment shall be deemed to have
terminated at the close of business on the 90th day of such leave of absence
unless such employee shall have returned to regular full-time or part-time
employment (as the case may be) prior to the close of business on such 90th day.
Termination by the Company of any employee's leave of absence, other than
termination of such leave of absence on return to full-time or part-time
employment, shall terminate an employee's employment for all purposes of the
Plan and shall terminate such employee's participation in the Plan and right to
exercise any option.
2.03. Restrictions on Participation. Notwithstanding any provisions of the
Plan to the contrary, no employee shall be granted an option to participate in
the Plan:
(a) if, immediately after the grant, such employee would own stock, and/or
hold outstanding options to purchase stock, possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company (for
purposes of this paragraph, the rules of Section 424(d) of the Code shall apply
in determining stock ownership of any employee); or
(b) which permits the employee rights to purchase stock under all employee
stock purchase plans of the Company to accrue at a rate which exceeds $25,000 in
fair market value of the stock (determined at the time such option is granted)
for each calendar year in which such option is outstanding.
If an option is granted to an individual whose stock ownership exceeds the
limitation of the above Section 2.03(a), no portion of such option will be
treated as having been granted under a Code Section 423 employee stock purchase
plan.
A-1
<PAGE>
2.04. Commencement of Participation. An eligible employee may become a
participant by completing an authorization for a payroll deduction on the form
provided by the Company and filing it with the Payroll Department of the Company
on or before the date set therefore by the Committee, which date shall be prior
to the Offering Commencement Date for the Offering (as such terms are defined
below). Payroll deductions shall commence on the applicable Offering
Commencement Date when the participant's authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date to which such
authorization is applicable unless sooner terminated as provided in Section 7.
3. OFFERING DATES
3.01. Annual Offerings. The Plan will be implemented by annual offerings of
the Company's Common Stock (the "Offerings") beginning on the 1st day of January
in each year (the "Offering Commencement Date"), and terminating on the
following December 31 (the "Offering Termination Date"). The Committee shall
determine the number of shares available for purchase during each Offering,
taking into account the aggregate number of shares available for purchase under
this Plan as set forth in Section 8.01, and the number of shares previously sold
and remaining to be sold under this Plan.
4. PAYROLL DEDUCTIONS
4.01. Amount of Deduction. At the time a participant files an authorization
for payroll deduction, the participant shall elect to have deductions made from
his or her pay on each payday during the time he or she is a participant in an
Offering at the rate of 1% to 15%, in whole percentages, of the participant's
Base Pay in effect at the Offering Commencement Date. "Base Pay" shall mean
regular straight time earnings excluding payments for overtime, shift premium,
bonuses and other special payments, and other marketing incentive payments. In
the case of a part-time hourly employee, such employee's Base Pay during an
Offering shall be determined by multiplying such employee's hourly rate of pay
in effect on the Offering Commencement Date by the number of regularly scheduled
hours of work for such employee during such Offering.
4.02. Participant's Account. All payroll deductions made for a participant
shall be credited to the participant's account under the Plan. A participant may
not make any separate cash payment into such account except as provided in
Sections 4.03 and 4.05.
4.03. Cash Payment. A participant may elect to make a single cash payment
to his or her account in lieu of payroll deductions by completing a payment
election form provided by the Company, and submitting the form along with the
participant's payment to the Payroll Department on or before the date set
therefor by the Committee, which date shall be prior to the Offering
Commencement Date. The payment shall be an amount, as elected by the
participant, equal to a whole percentage, from 1% to 15%, of the participant's
Base Pay in effect at the date of the participant's election. A participant who
elects to make a single payment for an Offering pursuant to this Section may not
also elect payroll deductions during such Offering.
4.04. Changes in Payroll Deductions. A participant may discontinue
participation in the Plan as provided in Section 7, but no other change can be
made during an Offering and, specifically, a participant may not alter the
amount of his or her payroll deductions for that Offering.
4.05. Leave of Absence. If a participant goes on a leave of absence, such
participant shall have the right to elect: (a) to withdraw the balance in his or
her account pursuant to Section 6.02, (b) to discontinue contributions to the
Plan but remain a participant in the Plan, or (c) to remain a participant in the
Plan during such leave of absence, authorizing deductions to be made from
payments by the Company to the participant during such leave of absence and
undertaking to make cash payments to the Plan at the end of each payroll period
to the extent that amounts payable by the Company to such participant are
A-2
<PAGE>
insufficient to meet such participant's authorized Plan deductions.
5. GRANTING OF OPTION
5.01. Number of Option Shares. On the Commencement Date of each Offering, a
participating employee shall be deemed to have been granted an option to
purchase as many shares of stock as the participant will be able to purchase
with the payroll deductions credited to the participant's account during
participation in the Offering; provided, however, that such number of shares
shall not exceed 1,000 shares in any single Offering.
5.02. Option Price. The option price of stock purchased with payroll
deductions made during such annual offering for a participant therein shall be
the lower of:
(a) 85% of the closing price of the stock on the Offering Commencement Date
or the nearest prior business day on which trading occurred on the NASDAQ
National Market System; or
(b) 85% of the closing price of the stock on the Offering Termination Date
or the nearest prior business day on which trading occurred on the NASDAQ
National Market System.
If the Common Stock of the Company is not admitted to trading on any of the
aforesaid dates for which closing prices of the stock are to be determined, then
reference shall be made to the fair market value of the stock on that date, as
determined on such basis as shall be established or specified for this purpose
by the Committee.
6. EXERCISE OF OPTION
6.01. Automatic Exercise. Unless a participant gives written notice to the
Company as hereinafter provided, the participant's option for the purpose of
stock with payroll deductions made during any Offering will be deemed to have
been exercised automatically on the Offering Termination Date. Except as
provided in Section 8.02, the participant's option will be exercised for the
purchase of the number of full shares of stock which the accumulated payroll
deductions in his or her account at that time will purchase at the applicable
option price, and any excess in his or her account at that time will be returned
to the participant, without interest.
6.02. Withdrawal of Account. By written notice to the Company, at any time
prior to the Offering Termination Date applicable to any Offering, a participant
may elect to withdraw all the accumulated payroll deductions in his or her
account at such time, without interest.
6.03. Fractional Shares. Fractional shares will not be issued under the
Plan and any accumulated payroll deductions which would have been used to
purchase fractional shares will be returned to any employee promptly following
the termination of an Offering, without interest.
6.04. Transferability of Option. During a participant's lifetime, options
held by such participant shall be exercisable only by that participant.
6.05 Delivery of Stock. As promptly as practicable after the Offering
Termination Date of each Offering, the Company will deliver to each participant,
as appropriate, the stock purchased upon exercise of the participant's option.
7. WITHDRAWAL
7.01. In General. As indicated in Section 6.02, a participant may withdraw
payroll deductions credited
A-3
<PAGE>
to his or her account under the Plan at any time by giving written notice to the
Company. All of the participant's payroll deductions credited to his or her
account will be paid to the participant promptly after receipt of notice of
withdrawal, without interest, and no further payroll deductions will be made
from his or her pay during such Offering. The Company may, at its option, treat
any attempt to borrow by a participant on the security of his or her accumulated
payroll deductions as an election, under Section 6.02, to withdraw such
deductions.
7.02. Effect on Subsequent Participation. A participant's withdrawal from
any Offering will not have any effect upon the participant's eligibility to
participate in any succeeding Offering or in any similar plan which may
hereafter be adopted by the Company.
7.03. Termination of Employment. Upon termination of the participant's
employment for any reason, including retirement (but excluding death while in
the employ of the Company or continuation of a leave of absence for a period
beyond 90 days), the payroll deductions credited to his or her account will be
returned to the participant, without interest, or, in the case of death
subsequent to the termination of employment, to the person or persons entitled
thereto under Section 10.01.
7.04. Termination of Employment Due to Death. Upon termination of the
participant's employment because of death while in the employ of the Company,
the participant's beneficiary (as defined in Section 10.01) shall have the right
to elect, by written notice given to the Company prior to the earlier of the
Offering Termination Date or the expiration of a period of sixty (60) days
commencing with the date of the death of the participant, either:
(a) to withdraw all of the payroll deductions credited to the participant's
account under the Plan, without interest, or
(b) to exercise the participant's option for the purchase of stock on the
Offering Termination Date next following the date of the participant's death for
the purchase of the number of full shares of stock which the accumulated payroll
deductions in the participant's account at the date of the participant's death
will purchase at the applicable option price, and any excess in such account
will be returned to said beneficiary, without interest.
In the event that no such written notice of election shall be duly received
by the Company, the beneficiary shall automatically be deemed to have elected,
pursuant to paragraph (b), to exercise the participant's option.
7.05. Leave of Absence. A participant on leave of absence shall, subject to
the election made by such participant pursuant to Section 4.05, continue to be a
participant in the Plan so long as such participant is on continuous leave of
absence. A participant who has been on leave of absence for more than 90 days
and who therefore is not an employee for the purpose of the Plan shall not be
entitled to participate in any offering commencing after the 90th day of such
leave of absence. Notwithstanding any other provisions of the Plan, unless a
participant on leave of absence returns to regular full-time or part-time
employment with the Company at the earlier of: (a) the termination of such leave
of absence or (b) three months from the 90th day of such leave of absence, such
participant's participation in the Plan shall terminate on whichever of such
dates first occurs.
8. STOCK
8.01. Maximum Shares. The maximum number of shares which shall be issued
under the Plan, subject to adjustment upon changes in capitalization of the
Company as provided in Section 10.04, shall be 100,000 shares. The shares of
stock sold pursuant to this Plan may be authorized but unissued shares or
A-4
<PAGE>
treasury shares.
8.02. Shares Subject to Each Offering. The maximum number of shares of
stock which shall be made available for sale under this Plan during any Offering
shall be determined by the Committee. If the total number of shares for which
options are exercised on any Offering Termination Date exceeds the maximum
number of shares for the applicable offering, the Company shall make a pro rata
allocation of the shares available for delivery and distribution in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to the account of each
participant under the Plan shall be returned, without interest, as promptly as
possible. The maximum number of shares of stock which shall be made available
for sale under this Plan during any Offering to any individual participant shall
not exceed 1,000 shares.
8.03. Participant's Interest in Option Stock. The participant will have no
interest in stock covered by his or her option until such option has been
exercised.
9. ADMINISTRATION
9.01. Appointment of Committee. The Board of Directors shall appoint a
committee (the "Committee") to administer the Plan, which shall consist of no
fewer than three members of the Board of Directors. No member of the Committee
shall be eligible to purchase stock under the Plan.
9.02. Authority of Committee. Subject to the express provisions of the
Plan, the Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations deemed
necessary or advisable for administering the Plan. The Committee's determination
on the foregoing matters shall be conclusive.
9.03. Rules Governing the Administration of the Committee. The Board of
Directors may from time to time appoint members of the Committee in substitution
for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee. The Committee may select one of its members as
its Chairman and shall hold its meetings at such times and places as it shall
deem advisable and may hold telephone meetings. A majority of its members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan, in the manner and to the extent it
shall deem desirable. Any decision or determination reduced to writing and
signed by a majority of the members of the Committee shall be as fully effective
as if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary and shall make such rules and regulations for
the conduct of its business as it shall deem advisable.
10. MISCELLANEOUS
10.01. Designation of Beneficiary. A participant may file a written
designation of a beneficiary who is to receive any stock and/or cash. Such
designation of beneficiary may be changed by the participant at any time by
written notice to the Company. Upon the death of a participant and upon receipt
by the Company of proof of identity and existence at the participant's death of
a beneficiary validly designated by him under the Plan, the Company shall
deliver such stock and/or cash to such beneficiary. In the event of the death of
a participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such stock and/or cash to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver such
stock and/or cash to the spouse or to any one or more dependents of the
participant as the Company may designate. No beneficiary shall, prior to the
death of the participant by whom designated, acquire any interest in the stock
or cash
A-5
<PAGE>
credited to the participant under the Plan.
10.02. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 6.02.
10.03. Use of Funds. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.
10.04. Adjustment Upon Changes in Capitalization. If, while any options are
outstanding, the outstanding shares of Common Stock of the Company have
increased, decreased, changed into, or been exchanged for a different number or
kind of shares or securities of the Company through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, or similar transaction, appropriate and proportionate adjustments may
be made by the Committee in the number and/or kind of shares which are subject
to purchase under outstanding options and on the option exercise price or prices
applicable to such outstanding options. In addition, in any such event, the
number and/or kind of shares which may be offered in the Offerings described in
Section 3 hereof shall also be proportionately adjusted.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or stock of the Company to
another corporation, the holder of each option then outstanding under the Plan
will thereafter be entitled to receive at the next Offering Termination Date
upon the exercise of such option for each share as to which such option shall be
exercised, as nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Common Stock was entitled to
receive upon and at the time of such transaction. The Board of Directors shall
take such steps in connection with such transactions as the Board shall deem
necessary to assure that the provisions of this Section 10 04 shall thereafter
be applicable, as nearly as reasonably may be determined, in relation to the
said cash, securities and/or property as to which such holder of such option
might thereafter be entitled to receive.
10.05. Amendment and Termination. The Board of Directors shall have
complete power and authority to terminate or amend the Plan; provided, however,
that the Board of Directors shall not, without the approval of the stockholders
of the Corporation (a) increase the maximum number of shares which may be issued
under any Offering (except pursuant to Section 12.04); (b) amend the
requirements as to the class of employees eligible to purchase stock under the
Plan or (c) permit the members of the Committee to purchase stock under the
Plan. No termination, modification, or amendment of the Plan may, without the
consent of an employee then having an option under the Plan to purchase stock,
adversely affect the rights of such employee under such option.
10.06. Effective Date. The Plan shall become effective as of January 1,
1999, subject to approval by the holders of the majority of the Common Stock
present and represented at a special or annual meeting of the shareholders held
on or before December 31, 1999. If the Plan is not so approved, the Plan shall
not become effective.
10.07. No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company,
A-6
<PAGE>
and it shall not be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, an employee's employment at any time.
10.08. Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
employee participating in the Plan, including, without limitation, such
employee's estate and the executors, administrators or trustees thereof, heirs
and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such employee.
10.09. Compliance with Other Laws and Procedures. This Plan, the grant and
exercise of options hereunder, and the obligations of the Company to sell and
deliver shares under such options shall be subject to all applicable federal and
state laws, rules and regulations and of such approvals by the government or any
regulatory agency as may be required. The Company shall not be required to issue
or deliver any certificates for shares of Stock prior to the completion of any
registration or qualification of such shares under any federal or state law, or
any ruling or regulation of any government body which the Company shall, in its
discretion, determine to be necessary or advisable. The law of the State of
Florida will govern all matters relating to this Plan except to the extent it is
superseded by the laws of the United States.
10.10. Interpretation of this Plan. The terms of this Plan are subject to
all present and future rules and regulations of the Secretary of the Treasury or
its delegate regarding the qualifications of employee stock purchase plans
under, and this Plan is intended to comply with the provisions of Section 423 of
the Code, and it shall be interpreted and construed accordingly. If any
provision of this Plan conflicts with any such rule or regulation, then such
provision of this Plan shall be void and of no force and effect.
A-7
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
GULF WEST BANKS, INC.
425 22ND AVENUE NORTH
ST. PETERSBURG, FLORIDA 33704
The undersigned hereby appoints Gordon W. Campbell and Thomas M. Harris or
any of them acting in the absence of the other, with power of substitution, my
true and lawful attorney or attorneys, for me and in my name and stead to vote
as proxy or proxies upon all shares of stock of GULF WEST BANKS, INC. entitled
to vote, owned by me or standing in my name on the books of the Company, at the
close of business on February 28, 1999, at the Annual Meeting of Shareholders of
GULF WEST BANKS, INC. to be held at Feather Sound Country Club located at 2201
Feather Sound Drive, St. Petersburg, Florida, on the 15th day of April, 1999 at
5:00 p.m. in the afternoon of that day, or any adjournment thereof.
(CONTINUED AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- FOLD AND DETACH HERE -
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ITEMS 1, 2, 3 AND 4.
<TABLE>
<CAPTION>
WITHHELD
FOR FOR ALL FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
ITEM 1-TO ELECT AS DIRECTORS FOR [ ] [ ] ITEM 2-TO APPROVE THE ADOPTION OF [ ] [ ] [ ] ITEM 4-IN THEIR
THE TERMS INDICATED AN EMPLOYEE STOCK PURCHASE PLAN. DISCRETION,
Nominees: THE PROXIES
Algis Koncius ITEM 3-TO APPROVE AN AMENDMENT TO [ ] [ ] [ ] ARE
(3 years) THE COMPANY'S ARTICLES OF AUTHORIZED
Louis P. Ortiz, CPA INCORPORATION TO INCREASE TO VOTE
(3 years) THE MAXIMUM AUTHORIZED UPON SUCH
P.N. Risser, III SHARES OF ITS COMMON STOCK OTHER
(3 Years) FROM 10,000,000 SHARES TO BUSINESS AS
25,000,000 SHARES. MAY PROPERLY
COME BEFORE
THE MEETING.
</TABLE>
WITHHELD FOR: (Write that nominee's name in the space
provided below).
_____________________________________________________
Signature(s)_____________________________________ Date______________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- FOLD AND DETACH HERE -
