SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 ss.240.14a-12
CNB Florida Bancshares, Inc.
(Name of Registrant as Specified in its Charter)
Not Applicable
(Name(s) of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total Fee Paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CNB Florida Bancshares, Inc.
9715 Gate Parkway North
Jacksonville, Florida 32246
April 14, 2003
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
CNB Florida Bancshares, Inc. to be held on Wednesday, May 28, 2003 beginning at
10:00 a.m. at the Jacksonville Marriott located at 4670 Salisbury Road,
Jacksonville, Florida. A formal notice describing the business to come before
the meeting and a proxy statement are attached. The purpose of the meeting is to
consider and vote upon the proposals explained in the notice and the proxy
statement.
It is important that your shares be represented at the annual meeting
whether or not you plan to attend the annual meeting in person. The board of
directors requests that you carefully review these materials before completing,
signing and dating the enclosed proxy and returning it in the postage paid
envelope provided for your use. If you later decide to attend the annual meeting
and vote in person, or if you wish to revoke your proxy for any reason prior to
the vote at the annual meeting, you may do so and your proxy will have no
further effect.
Sincerely,
/s/ K. C. Trowell
-------------------------------------------
K. C. Trowell
Chairman of the Board,
President and Chief Executive Officer
CNB Florida Bancshares, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 2003
To the holders of common stock:
CNB Florida Bancshares, Inc. invites you to attend the annual meeting of
shareholders which will be held on Wednesday, May 28, 2003 at 10:00 a.m. at the
Jacksonville Marriott in Jacksonville, Florida to consider and act upon the
following matters:
1. Election of nine directors, each for a one year term.
2. Such other business as may properly come before the annual meeting or
any adjournments thereof.
Only shareholders of record of our common stock at the close of business on
March 31, 2003 are entitled to receive notice of, and to vote on, all business
that may come before the annual meeting.
Whether or not you plan to attend the meeting, please complete, sign, date
and return the enclosed proxy as promptly as possible in the postage paid
envelope provided for your use. You may revoke the proxy at any time before it
is exercised by following the instructions set forth on the first page of the
accompanying proxy statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ G. Thomas Frankland
------------------------------------
G. Thomas Frankland
Corporate Secretary
Dated: April 14, 2003
1
PROXY STATEMENT
Annual Meeting of Shareholders
CNB Florida Bancshares, Inc.
9715 Gate Parkway North
Jacksonville, Florida 32246
GENERAL
CNB Florida Bancshares, Inc. (the "Company" or "We") is furnishing this
proxy statement to you as a holder of our common stock, $.01 par value, in
connection with the solicitation of proxies by our board of directors for use at
the annual meeting of shareholders. The annual meeting will be held on
Wednesday, May 28, 2003 beginning at 10:00 a.m. at the Jacksonville Marriott in
Jacksonville, Florida.
We have mailed this proxy statement and the attached notice and form of
proxy to holders of our common stock on or about April 14, 2003.
VOTING OF PROXIES
Shares represented by proxies properly signed and returned, unless
subsequently revoked, will be voted at the annual meeting in accordance with the
instructions marked on the proxy. If a proxy is signed and returned without
indicating any voting instructions, the shares represented by the proxy will be
voted FOR approval of the proposals stated in this proxy statement and in the
discretion of the holders of the proxies on other matters that may properly come
before the annual meeting.
If you have executed and delivered a proxy, you may revoke such proxy at
any time before it is voted by attending the annual meeting and voting in
person, by giving written notice of revocation of the proxy or by submitting a
signed proxy bearing a later date. Such notice of revocation or later proxy
should be sent to our transfer agent at the address indicated on the attached
proxy. In order for the notice of revocation or later proxy to revoke the prior
proxy, our transfer agent must receive such notice or later proxy prior to the
vote of shareholders at the annual meeting. Attendance at the annual meeting
alone will not revoke your proxy.
VOTING PROCEDURES
Our bylaws provide that a majority of shares entitled to vote and
represented in person or by proxy at a meeting of the shareholders constitutes a
quorum. Under the Florida Business Corporation Act (the "Act"), directors are
elected by a plurality of the votes cast at a meeting at which a quorum is
present. Other matters are approved if affirmative votes cast by the holders of
the shares represented at a meeting at which a quorum is present exceed votes
opposing the action, unless a greater number of affirmative votes or voting by
classes is required by the Act or our articles of incorporation. Therefore,
abstentions and broker non-votes have no effect under Florida law.
VOTING SECURITIES
Our board of directors has fixed the close of business on March 31, 2003 as
the record date for the determination of holders of common stock entitled to
receive notice of and to vote at the annual meeting. At the close of business on
March 31, 2003, there were issued and outstanding 6,142,450 shares of common
stock entitled to vote at the annual meeting. As a holder of our common stock
outstanding on March 31, 2003, you are entitled to one vote for each share held
of record upon each matter properly submitted at the annual meeting.
2
PURPOSE
We anticipate that our shareholders will act upon the following business at
the meeting:
PROPOSAL 1: Election of Directors
The directors nominated for election at the 2003 annual meeting are Thomas
R. Andrews, Lewis Ansbacher, Audrey S. Bullard, Raymon Land, Sr., Jon W.
Pritchett, Marvin H. Pritchett, Halcyon E. Skinner, William Streicher and K. C.
Trowell. To be elected, each nominee must receive a plurality of the votes cast,
which shall be counted as described in Voting Procedures. Unless you mark the
accompanying proxy otherwise, the proxy will be voted FOR the election of the
persons named above. If any nominee should become unavailable, which is not now
anticipated, the persons voting the accompanying proxy may, in their discretion,
vote for a substitute.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES.
The following table provides certain information with respect to the
nominees. Members of the board will serve until the next annual meeting and
thereafter until their respective successors are elected and qualified. Except
as otherwise indicated, each person has been or was engaged in his or her
present or last principal occupation, in the same or a similar position, for
more than five years.
Name Age Positions Held and Principal Occupations
---- --- ----------------------------------------
During the Past Five Years
--------------------------
Thomas R. Andrews 57 Mr. Andrews was elected to our board of directors in 1994 and serves on the
Nominating and Corporate Governance, Audit and Compensation Committees of
our board. He is the owner of Belco Enterprises, a commercial real estate
company.
Lewis Ansbacher 74 Mr. Ansbacher currently serves on the board of directors of our wholly
owned subsidiary, CNB National Bank (the "Bank"). Mr. Ansbacher is
President of Ansbacher & Schneider, P.A., a Jacksonville law firm. Mr.
Ansbacher is Trustee and Director of Attorneys' Title Insurance Fund, Inc.
and a member of the Executive Council of the Real Property, Probate & Trust
Law Section of the Florida Bar. For the past ten years, Mr. Ansbacher has
served as Chairman of the Real Estate Forms Committee of the Section. Mr.
Ansbacher has authored various chapters of Florida Bar publications,
including Liens and Encumbrances and Subdivisions. Mr. Ansbacher has also
served as President of Jewish Family and Children's Services of
Jacksonville and Duval County Legal Aid Association.
Audrey S. Bullard 60 Ms. Bullard was elected to our board of directors in 1987 and serves on the
Nominating and Corporate Governance, Compensation and Executive Committees
of our board. Ms. Bullard also serves on the board of directors of the
Bank. A practicing certified public accountant, Ms. Bullard is an officer
and part owner of Bullard Development Co. and A&R of Lake City, Inc. as
well as several partnerships and land development firms. Ms. Bullard has
been active in numerous civic and service organizations, including the
Chamber of Commerce, the Lake Shore Hospital, the Advent Christian Advisory
Board, the Columbia County Public School Foundation, the Lake City/Columbia
County Beautification Board, the North Florida Advisory Council and the
Board of Santa Fe Health Care, Inc.
3
Name Age Positions Held and Principal Occupations
---- --- ----------------------------------------
During the Past Five Years
--------------------------
Raymon Land, Sr. 63 Mr. Land was elected to our board of directors in 1998 and serves on the
Audit Committee of our board. Mr. Land is the owner of Raymon J. Land, a
watermelon and produce brokerage and shipping business. Mr. Land is the
owner of a commercial cow and calf production operation and raises
registered quarter horses. Mr. Land is President of Land Truck Brokers,
Inc., a transportation company for produce. He served as President of both
the National Watermelon Association, Inc. and the Florida Watermelon
Association, Inc. and presently is on the Executive Committee of both
Associations. Mr. Land is also a licensed real estate salesman with Land
Brokerage Realtor.
Jon W. Pritchett 41 Mr. Pritchett was elected to the Board of Directors of the Company in 2001
and serves on the Nominating and Corporate Governance, Audit and Executive
Committees of the Company's Board of Directors as well as on the Bank's
Board of Directors. Mr. Pritchett serves as President and Chief Executive
Officer of Nextran Corporation and President of Pritchett Trucking, Inc. He
is a board member of the Mack Truck National Dealer Council and the Florida
Trucking Association. Mr. Pritchett also served as a board member on the
Gator Boosters from 1997 through 2001. Mr. Pritchett is the son of Mr. M.
Pritchett and the son-in-law of Mr. Streicher.
Marvin H. Pritchett 69 Mr. Pritchett was elected to our board of directors in 1988 and serves on
the Executive and Compensation Committees of our board as well as on the
Bank's board of directors. Mr. Pritchett serves as Chief Executive Officer
of Pritchett Trucking, Inc., President of Pritchett, Inc., a timber firm
and President of G. P. Materials, Inc., which sells aggregate material. Mr.
Pritchett is also the Chairman of Nextran Corporation, with heavy duty
truck dealerships in Jacksonville, Orlando, Tampa, Lake City, Miami,
Riveria Beach, Pompano, Kennasaw and Atlanta. Nextran Truck Centers
represent the following truck manufacturers: Mack, Volvo, Isuzu, Mitsubishi
and GMC. Mr. Pritchett is the father of Mr. J. Pritchett.
Halcyon E. Skinner 56 Mr. Skinner was elected to our board of directors in 2000 and serves on the
Executive Committee of our board. Mr. Skinner is the Managing Partner of
the Jacksonville law offices of McGuireWoods LLP and has been a partner in
that law firm for more than five years. He also serves on the Board of
Directors and the Finance Committee of the Jacksonville Symphony Orchestra.
William Streicher 67 Mr. Streicher was elected to our board of directors in 1990 and serves on
the Nominating and Corporate Governance, Audit and Compensation Committees
of our board. He has owned and operated several McDonald's restaurant
franchises in the Company's primary service area and also has served on the
Board of Ronald McDonald House Charities at Shands Hospital in Gainesville,
Florida for over ten years. He is past Chairman and a past board member of
the Lake City Community College Foundation and Regional Board of Trustees,
Lake City Community College, a past member of the Lake City Rotary Club,
past Vice President of McDonald's Owner/Operator Advertising Co-Operative
and a past representative to the McDonald's Advertising Advisory Board of
the State of Florida. Mr. Streicher is also a past real estate broker and
currently involved in real estate property and investments. Mr. Streicher
is the father-in-law of Mr. J. Pritchett.
4
Name Age Positions Held and Principal Occupations
---- --- ----------------------------------------
During the Past Five Years
--------------------------
K.C. Trowell 64 Mr. Trowell is our Chairman, President and Chief Executive Officer ("CEO")
and holds the same positions at the Bank. He was elected to our board of
directors in 1987 and serves as Chairman of the Executive Committee of our
board. He has served as the Chairman and CEO of the Company since its
inception in 1987 and of the Bank since its inception in 1986. Mr. Trowell
is a Lake City, Florida native and has been actively involved in commercial
banking management in North Florida for over 30 years. He has also held
management positions with NationsBank of Lake City (and its predecessors),
American Bank of Jacksonville, and Barnett Banks, Inc. in Jacksonville. He
is former Chairman of the Board of Trustees of Florida Bankers Insurance
Trust. He is a past director of Community Bankers of Florida, past director
of the Columbia County Committee of 100, a founding director of North
Central Florida Areawide Development Company, and a former board member and
chairman of both Lake City Medical Center and Columbia County Industrial
Development Authority.
BOARD OF DIRECTORS AND STANDING COMMITTEES; DIRECTOR COMPENSATION
If elected, the nine nominees will constitute our board of directors.
During 2002, the board held a total of twelve meetings.
Our board of directors maintains a Nominating and Corporate Governance
Committee, an Audit Committee, a Compensation Committee and an Executive
Committee, which are described below. Members of these committees are elected
annually at the board meeting immediately following the annual meeting. Under
our bylaws, the board is authorized to designate other members of the board to
serve in the place of absent members of any committee.
Members of the Nominating and Corporate Governance Committee include Ms.
Bullard and Messrs. J. Pritchett (Chairman), Streicher and Andrews, none of whom
is an officer or employee of the Company. The Nominating and Corporate
Governance Committee was created during 2002 and held one meeting during the
year. This committee is responsible for overall corporate governance oversight,
reviewing succession plans for executive positions and recommending to our full
board candidates for the Company and Bank boards of directors. The Nominating
and Corporate Governance Committee will consider board nominees from
shareholders. Shareholders wishing to submit recommendations to the Nominating
and Corporate Governance Committee should notify the Committee Chairman in
writing at the address of the Company as presented under the section titled
"Annual Report; Form 10-K."
Members of the Audit Committee include Messrs. Andrews (Chairman), Land, J.
Pritchett and Streicher, none of whom is an officer or employee of the Company.
During 2002 the Audit Committee held six meetings. The Audit Committee is
responsible for the matters set forth in its written charter as adopted by the
Board and attached to the proxy statement for the 2001 annual meeting. Such
responsibilities include selection and oversight of the Company's independent
pubic accountants and review of audit plans, audit reports and financial
statements.
Members of the Compensation Committee include Ms. Bullard and Messrs.
Andrews, M. Pritchett (Chairman) and Streicher. During 2002 this committee held
four meetings. The Compensation Committee is principally responsible for (1)
establishing and recommending to the board of directors the compensation of our
CEO and CFO; (2) establishing and recommending to the board of directors the
compensation plan of our other senior management; (3) periodically reviewing all
salary administration and employee benefits; and (4) developing and recommending
to our board of directors stock incentive compensation for officers and
employees.
Members of the Executive Committee include Ms. Bullard and Messrs. J.
Pritchett, M. Pritchett, Skinner, Trowell (Chairman) and our Executive Vice
President and Chief Financial Officer, G. Thomas Frankland. During 2002 this
committee held two meetings. The Executive Committee is authorized to act on
behalf of and exercise all powers of the board of directors when the board is
not in session, except as limited by Florida law.
5
In 2002 all members of the board attended at least 75% of all meetings of
the board and committees on which they served, except Mr. Land, who attended 50%
of the meetings of the board and committees on which he served.
Members of the board of directors receive an annual retainer of $3,600 for
serving on the board and $150 for each committee meeting they attend. In
addition, non-management directors receive non-qualified stock options in
accordance with our Performance-Based Incentive Plan.
AUDIT COMMITTEE REPORT
As set forth in its charter, the Audit Committee oversees the financial
statements and relations with the independent auditors. The Audit Committee
selects our independent auditors, meets annually with the auditors to discuss
whether current accounting principles and disclosures are appropriate and
verifies the independence of our independent auditors. All auditors employed or
engaged by us report directly to the Audit Committee. To fulfill its
responsibilities, the Audit Committee recommends the selection of auditors,
reviews the audit program on at least an annual basis to ensure the adequacy of
its scope, reviews all reports of auditors and examiners, as well as
management's responses to such reports to ensure the effectiveness of internal
controls and the implementation of remedial action, and recommends to the board
whether to include the audited financial statements in our Annual Report on Form
10-K. During 2002, the Audit Committee selected PricewaterhouseCoopers LLP as
our independent auditor to replace Arthur Andersen LLP.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing our relationship with the auditors that might bear on the
auditors' independence consistent with Independence Standards Board Standard No.
1, "Independence Discussions with Audit Committees," discussed with the auditors
any relationships that may impact their objectivity and independence and
satisfied itself as to the auditors' independence. The Audit Committee also
discussed with management and the independent auditors the quality and adequacy
of our internal controls, accounting function's organization, responsibilities,
budget and staffing. The Audit Committee reviewed with the independent auditors
its audit plans, audit scope and identification of audit risks. The Audit
Committee also considered the auditors provision of services included under the
headings "Financial Information Systems Design and Implementation Fees" and "All
Other Fees" and has determined that any such services provided were compatible
with the independent auditors maintenance of independence.
The Audit Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and discussed and reviewed the results of
the independent auditors' examination of the financial statements.
The Audit Committee reviewed our audited financial statements as of and for
the year ended December 31, 2002 with management and the independent auditors.
Management has the responsibility for preparation of our financial statements,
and the independent auditors have the responsibility for examination of those
statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the board that our
audited financial statements be included in our Annual Report on Form 10-K for
the year ended December 31, 2002, for filing with the Securities and Exchange
Commission.
We have chosen to evaluate the independence of our directors based on the
Nasdaq, NYSE and Sarbanes-Oxley definitions of an independent director. All
members of the Audit Committee are independent directors according to these
definitions.
Thomas R. Andrews, Chairman
Raymon Land, Sr.
Jon W. Pritchett
William Streicher
6
Audit Fees
----------
We paid a total of $115,000 to PricewaterhouseCoopers LLP for services
rendered in connection with the audit of our financial statements for the fiscal
year ended December 31, 2002 and the reviews of the interim financial
statements.
Financial Information Systems Design and Implementation Fees
------------------------------------------------------------
There were no fees paid to PricewaterhouseCoopers LLP for services rendered
in connection with financial information systems design and implementation
during the fiscal year ended December 31, 2002.
All Other Fees
--------------
We will also pay other fees to PricewaterhouseCoopers LLP for tax services
for the year ended December 31, 2002 totaling $20,000.
COMPENSATION COMMITTEE REPORT
Our Compensation Committee presents this report on compensation for our
executive officers (Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer). Actual compensation during 2002 for the CEO and CFO is shown
in the Summary Compensation Table and other tables following this report. The
CEO is currently performing the additional duties of the Chief Operating
Officer.
Philosophy. As more fully described below, the Compensation Committee of
our board of directors administers the compensation programs for our executive
officers. Our compensation structure is intended to provide a compensation
package that will attract, motivate and retain qualified executives; to ensure a
compensation mix that focuses executive behavior on the fulfillment of annual
and long-term business objectives; and to create a sense of ownership that
causes executive decisions to be aligned with the best interests of our
shareholders.
The components of individual executive officer compensation are base
salary, annual bonus and long-term incentives.
Salary. Base salary is assigned to positions based on job responsibilities,
sustained performance and a periodic informal review of base salary practices
for comparable positions at similar community banking companies. In late 2002 we
engaged an independent compensation consultant to assist in the assessment and
evaluation of the appropriateness of our compensation packages. This assessment
consisted of an executive compensation review and a peer bank benchmark analysis
for the CEO, COO and CFO positions. The results of this assessment and
evaluation are expected to be completed in the second quarter of 2003. The banks
in the peer group were selected based on similarities with the Company relative
to asset size and markets served.
Our CEO recommends (except with respect to his own salary) and the
Compensation Committee approves salary adjustments for executive officers based
on achievement of specific annual performance goals, including personal,
departmental and our overall goals depending upon each officer's specific job
responsibilities. The Committee and the CEO also use their subjective judgment
to consider such criteria as the executive's knowledge of and importance to our
business, willingness and ability to accomplish the tasks for which he or she
was responsible, professional growth and potential, and our financial
performance in making salary decisions. No particular weighting is applied to
these factors.
Annual Bonus. For the annual bonus plan, the Committee establishes written,
objective, strategic and financial goals, both qualitative and quantitative, for
executive officers based on our business plan and budget approved by the board
of directors. Financial goals for the executive officers may include our
earnings per share, return on equity, overhead ratio, asset quality and return
on assets. Strategic goals may also include the accomplishment of expansion
objectives.
Other members of our senior management are also eligible to participate in
the annual incentive component of the bonus plan, but with accountability for
various business unit financial measures and specific individual objectives, as
well as our financial goals.
7
Long-Term Incentives. Under the Performance-Based Incentive Plan (the
"Incentive Plan"), we may provide performance-based incentive awards through the
grant of stock options, restricted stock, stock appreciation rights and
performance units. This Incentive Plan is designed to increase the personal
stake of participants in both our annual and long-term success and growth and
encourage them to remain in our employ. Because awards of options and restricted
stock are keyed to the market value of our common stock at the time of grant,
the future value of those awards is entirely dependent on increases in the
market value of our common stock. In making stock option grants under the
Incentive Plan, the Committee considers, without assigning a particular
weighting, the number of options previously granted to the executive, the
executive's salary, our financial results, the need for a long-term focus on
improving shareholder value and the executive's ability to positively impact our
performance.
Chief Executive Officer Compensation. The Compensation Committee determines
the base salary based on, without applying any specific weighting to these
factors, the base salary that we are obligated to pay under his employment
agreement, his length of service to us, amounts earned by the CEO in prior
years, our financial performance and growth and the pay practices of other
community banks.
The CEO is eligible for an annual bonus targeted at 50% of base salary. In
determining this amount, the Committee exercised its subjective judgment and
considered, among other factors and with no particular weighting, the CEO's
contribution to the following achievements; our expansion progress, recruitment
of the necessary staff, increasing our loan volume and asset base and
maintaining our strong capital position.
The Committee will consider any federal income tax limitations on the
deductibility of executive compensation in reaching compensation decisions and
will seek shareholder approval where such approval will eliminate any
limitations on deductibility.
Marvin H. Pritchett, Chairman
Thomas R. Andrews
Audrey S. Bullard
William Streicher
8
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth for the years ended
December 31, 2002, 2001 and 2000, the cash compensation paid or accrued, as well
as certain other compensation paid or accrued for those years to our CEO and the
additional most highly compensated executive officer for services rendered to
the Company and the Bank during the periods indicated.
Summary Compensation Table (1)
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
Annual Compensation Long Term Compensation
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
Awards
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
Name and Restricted Securities All other
Principal stock Underlying Compensation
Position Year Salary Bonus award(s) Options/SARs ($) (2)
($) ($) ($) (#)
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
K. C. Trowell, 2002 285,000 142,500 - - 6,888
Chairman, President and --------- ------------ --------------- ---------------- ----------------- ------------------
Chief Executive Officer 2001 270,000 108,000 - - 6,216
--------- ------------ --------------- ---------------- ----------------- ------------------
2000 270,000 135,000 - 25,000 6,216
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
G. Thomas Frankland, 2002 210,000 105,000 - - 6,888
Executive Vice President --------- ------------ --------------- ---------------- ----------------- ------------------
and Chief Financial 2001 200,000 81,250 - - 6,216
Officer (3) --------- ------------ --------------- ---------------- ----------------- ------------------
2000 200,000 100,000 - 20,000 6,216
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
--------------------------- --------- ------------ --------------- ---------------- ----------------- ------------------
(1) Columns relating, respectively, to "other annual compensation" and "LTIP
payouts" have been deleted because no compensation required to be reported
in such columns was awarded to, earned by, or paid to the named executives
during the periods covered by such columns. Non-cash perquisites are not
disclosed in this table because the aggregate value does not exceed the
lesser of $50,000 or 10% of total annual salary and bonus.
(2) The amounts shown in this column for 2002 consist of payments for term life
insurance premiums (Mr. Trowell - $888; and Mr. Frankland - $888 and our
matching contributions to the 401(k) plan for 2002 (Mr. Trowell - $6,000
and Mr. Frankland - $6,000).
(3) Mr. Frankland, 56, is the Executive Vice President and Chief Financial
Officer of the Company and the Bank. Mr. Frankland served as Vice President
and Chief Financial Officer of AirNet Communications Corporation in
Melbourne, Florida, from March 1998 until he joined the Company in November
1998. From May 1994 until August 1996, Mr. Frankland was Vice Chairman and
Chief Financial Officer of Ideon Group, Inc. ("Ideon"). Following the
acquisition of Ideon by CUC International, Inc. ("CUC"), in August 1996,
Mr. Frankland continued in a consulting capacity with CUC through December
1997. Prior to May 1994, Mr. Frankland was a partner with Price Waterhouse
LLP. During his 24 years with Price Waterhouse LLP, including the seven
years he served as managing partner of the Jacksonville office, he
specialized primarily in the financial services industry. He currently
serves on the Audit Committee of the Board of Directors of the University
of Florida Foundation, the Warrington College of Business Advisory Council
and the Fisher School of Accounting Steering Committee at the University of
Florida and the Board of Directors of the North Florida Land Trust.
Option/SAR Grants in Last Fiscal Year
Stock Options. There were no options/SAR granted to the executive officers
listed in the above table during the fiscal year ended December 31, 2002.
9
Aggregated Option/SAR Exercises and Fiscal Year-End Options. The following table
sets forth information concerning the exercise of stock options during the last
completed fiscal year by the named executive officers and the fiscal year-end
value of unexercised options.
Aggregated Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Options/SAR Values (1)
--------------------------- --------------- ------------------- -------------------------------- --------------------------------
Number of
Securities Value of
Underlying Unexercised in-
Shares Value Unexercised the-money
acquired on Realized options/SARs at options/SARs at
Name exercise (Market-Strike) fiscal year end fiscal year end (2)
--------------------------- --------------- ------------------- -------------- ----------------- -------------- -----------------
Exercisable Unexercisable Exercisable Unexercisable
--------------------------- --------------- ------------------- -------------- ----------------- -------------- -----------------
K.C. Trowell 6,922 $83,895 197,562 6,250 $1,815,507 $43,063
--------------------------- --------------- ------------------- -------------- ----------------- -------------- -----------------
G. Thomas Frankland - - 55,000 5,000 418,950 34,450
--------------------------- --------------- ------------------- -------------- ----------------- -------------- -----------------
(1) All information in this table relates to options. We have not granted any
SARs.
(2) As of December 31, 2002, the market value of our common stock was $15.89
per share.
Long-Term Incentive Plans--Awards In Last Fiscal Year
Long-Term Incentive Plans. There were no long-term incentive plan awards granted
to the executive officers listed in the above table in the last fiscal year.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents the Company's Equity Compensation Plans. In
April 1998, shareholders approved the terms of the Performance-Based Incentive
Plan ("the Plan") allowing a maximum of 540,000 shares to be granted. In May
2001, shareholders approved a proposal to amend the number of shares that may be
granted under the Plan to 800,000 shares. In addition to options granted under
the Plan, there were also options outstanding under a previous, Board-only
approved long-term incentive plan. This long-term incentive plan allowed for
periodic stock option grants based on the Company's financial performance. There
are no further grants being made under this plan.
------------------------------------- -------------------------- ------------------------- ------------------------
Number of shares to be Weighted average Number of securities
Plan Category issued upon exercise of exercise price of remaining available
outstanding options, outstanding options, for future issuance
warrants and rights warrants and rights
------------------------------------- -------------------------- ------------------------- ------------------------
Equity compensation plans approved 578,000 $9.33 169,025
by security holders
------------------------------------- -------------------------- ------------------------- ------------------------
Equity compensation plans not
approved by security holders 106,712 5.12 -
------- ---- --------
------------------------------------- -------------------------- ------------------------- ------------------------
Total 684,712 $8.68 169,025
======= ===== =======
------------------------------------- -------------------------- ------------------------- ------------------------
10
EMPLOYMENT AGREEMENTS
Mr. Trowell's Employment Agreement. On December 10, 1998, we entered into
an employment agreement with K.C. Trowell (the "Trowell Agreement") which
provides that Mr. Trowell will serve as our Chairman and CEO. The Trowell
Agreement has a rolling three-year term, provided Mr. Trowell's employment term
ends on the first day of the month following his 70th birthday. The Trowell
Agreement originally provided for a minimum annual base salary of $250,000. The
annual base salary is currently $285,000. The Trowell Agreement also provides
for participation in the Incentive Plan, and participation in our various
savings, retirement and welfare benefit plans. Mr. Trowell also is eligible to
receive an annual bonus targeted at 50% of his annual base salary. We also
agreed to provide Mr. Trowell with a company car. The Trowell Agreement contains
a noncompetition provision. In the event we terminate Mr. Trowell's employment
for a reason other than for cause, death or disability, or if Mr. Trowell
terminates his employment for good reason (as defined in the Trowell Agreement),
then we must pay Mr. Trowell a lump sum equal to (i) the amount of any earned
but unpaid salary and bonus, deferred compensation and vacation pay, plus (ii)
an amount equal to 50% of the sum of Mr. Trowell's annual base salary and
highest annual bonus from the date of termination until the end of the
employment period. If we terminate Mr. Trowell's employment without cause, or if
Mr. Trowell terminates his employment for good reason within two years of a
change of control of the Company, then we will pay Mr. Trowell 100% of the
amount referred to in (ii) above. In addition, all options to acquire shares of
common stock and all restricted stock previously granted to Mr. Trowell
immediately become vested and non-forfeitable upon a change in control.
Mr. Frankland's Employment Agreement. On November 30, 1998, we entered into
an employment agreement with G. Thomas Frankland (the "Frankland Agreement")
which provides that Mr. Frankland will serve as our Executive Vice President and
Chief Financial Officer. The Frankland Agreement originally provided for an
annual base salary of $185,000. The annual base salary is currently $210,000.
The Frankland Agreement also provides for participation in the Incentive Plan,
and participation in our various incentive, savings, retirement and welfare
benefit plans. Mr. Frankland also received a signing bonus of $35,000 and is
eligible to receive an annual bonus targeted at 50% of his annual base salary
subject to meeting goals and objectives determined by the board. We also agreed
to grant Mr. Frankland options to purchase 40,000 shares of common stock at a
price of $8.00 per share, 20,000 of which vested on the first anniversary of the
Frankland Agreement and 10,000 of which vested in each of the next two
succeeding anniversary dates. We also agreed to grant Mr. Frankland 5,000 shares
of restricted stock, 2,500 of which vested and became nonforfeitable on the
first anniversary of the Frankland Agreement and 2,500 of which vested and
became nonforfeitable on the second anniversary of the Frankland Agreement. In
all other terms, the Frankland Agreement is substantially similar to the Trowell
Agreement.
PERFORMANCE GRAPH
The Securities and Exchange Commission ("SEC") requires a five-year (or
such shorter period as a company's stock has been publicly traded) comparison of
our stock price performance with both a broad equity market index and a
published industry index or peer group. Our total return compared with the
Nasdaq Total U.S. Market Index and the Nasdaq Bank Index, as well as the SNL
$500 Million-$1 Billion Bank Asset-Size Index since our common stock began
trading on the Nasdaq National Market System is shown on the following graph.
The Nasdaq Bank Index includes all types of banks, savings institutions and
holding companies performing functions closely related to banking. The SNL $500
Million-$1 Billion Bank Asset-Size Index includes 122 banks, traded over a major
public exchange, whose most recent financial information indicates assets
between $500 million and $1 billion.
This graph assumes that $100 was invested on January 29, 1999, the date
that our stock first traded on the Nasdaq National Market System, and all
dividends were reinvested in the common stock and the other indices. Each of the
indexes is weighted on a market capitalization basis at the time of each
reported data point.
11
CNB Florida Bancshares, Inc.
[OBJECT OMITTED]
Period Ending
------------------------------------------------------
Index 06/30/99 12/31/99 12/31/00 12/31/01 12/31/02
--------------------------------------------------------------------------------------
CNB Florida Bancshares, Inc. 100.00 97.22 82.80 105.40 170.55
NASDAQ - Total US* 100.00 151.48 91.12 72.30 49.97
NASDAQ Bank Index* 100.00 93.31 106.44 115.25 117.83
SNL $500M-$1B Bank Index 100.00 92.27 88.32 114.58 146.29
* Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2003.
Used with permission. All rights reserved. crsp.com.
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name of Director Amount and Nature of Percent of Shares of
or Executive Officer Beneficial Ownership (1) Common Stock Outstanding (10)
--------------------- ------------------------ -----------------------------
Thomas R. Andrews..................... 211,500 (2) 3.17%
Lewis Ansbacher....................... 11,000 (3) *
Audrey S. Bullard..................... 233,363 (4) 3.49%
G. Thomas Frankland.................. 146,000 (5) 2.19%
Raymon Land, Sr....................... 122,574 (2) 1.84%
Jon W. Pritchett...................... 218,954 (6) 3.28%
Marvin H. Pritchett................... 1,092,491 (7) 16.36% (11)
Halcyon E. Skinner.................... 4,500 (8) *
William Streicher..................... 205,342 (2) 3.07%
K.C. Trowell.......................... 414,023 (9) 6.20% (12)
Directors and Executive Officers
as a Group (10 persons) (10).......... 2,659,747 39.82%
(1) Pursuant to the rules of the SEC, the determinations of "beneficial
ownership" of common stock are based upon Rule 13d-3 under the Exchange
Act, which provides that shares will be deemed to be "beneficially owned"
where a person has, either solely or in conjunction with others, the power
to vote or to direct the voting of shares and/or the power to dispose, or
to direct the disposition of shares or where a person has the right to
acquire any such power within 60 days after the date such "beneficial
ownership" is determined. Shares of common stock that a beneficial owner
has the right to acquire within 60 days pursuant to the exercise of stock
options or warrants are deemed to be outstanding for the purpose of
computing the percentage ownership of such owner but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person. All amounts are determined as of February 28, 2003.
(2) Includes currently exercisable options to purchase 2,500 shares.
(3) Includes 2,000 shares owned by Mr. Ansbacher and Mr. Michael N. Schneider,
as Trustees of the Ansbacher & Schneider, P.A. 401K Profit Sharing Plan and
Trust.
(4) Includes 9,614 shares owned by Ms. Bullard's husband, 2,000 shares
transferred to a revocable trust for benefit of her daughter and currently
exercisable options to purchase 2,500 shares.
(5) Includes 60,000 shares underlying options that are exercisable within 60
days of February 28, 2003.
(6) Includes 25,000 shares owned by Mr. Pritchett's wife, 11,750 shares owned
by Mr. Pritchett's daughters and currently exercisable options to purchase
1,000 shares.
(7) Includes 107,126 shares owned by New River Developers, 113,702 shares owned
by Pritchett Trucking, Inc., 87,692 shares owned by Mid-Florida Hauling,
Inc., 50,938 shares owned by Bulldog Trucking, 40,148 shares owned by Mr.
Pritchett's wife and 55,000 shares owned by Pritchett, Inc. Mr. Pritchett
shares voting and investment power with respect to all such shares. Also
includes currently exercisable options to purchase 2,500 shares.
(8) Includes currently exercisable options to purchase 1,000 shares.
(9) Includes 50,000 shares owned by Mr. Trowell's former spouse with respect to
which he shares voting and investment power. Also includes 203,812 shares
underlying options that are exercisable within 60 days of February 28,
2003.
(10) Based on a total of 6,125,500 shares of common stock outstanding as of
February 28, 2003, plus shares of common stock which may be acquired by the
beneficial owner, or group of beneficial owners, within 60 days of February
28, 2003, by exercise of 553,128 options.
(11) Mr. Pritchett is a shareholder with beneficial ownership of over 5%. His
address is Post Office Box 311, Lake Butler, Florida 32054.
(12) Mr. Trowell is a beneficial shareholder with ownership of over 5%. His
address is 9715 Gate Parkway North, Jacksonville, Florida 32246.
* Represents less than 1% of the outstanding shares of common stock.
13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last two fiscal years, the Bank loaned funds to certain of our
executive officers and directors in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other customers, and
which did not involve more than the normal risk of collectability or present
other unfavorable features.
Mr. Skinner is a partner in the law firm of McGuireWoods LLP, which
periodically provides legal services to the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires our executive officers and directors, and any persons
owning more than 10 percent of a class of our stock, to file certain reports on
ownership and changes in ownership with the SEC. During 2002, our executive
officers and directors filed with the SEC on a timely basis all required reports
relating to transactions involving our equity securities beneficially owned by
them, except that Ms. Bullard, Mr. J. Pritchett and Mr. Trowell made one late
filing.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP served as our independent public
accountants for the year ending December 31, 2002. Representatives of
PricewaterhouseCoopers LLP will be present at the annual meeting and will have
an opportunity to make a statement if they desire to do so and will be available
to respond to appropriate questions. Currently, no accounting firm has been
selected to provide accounting services to us for the fiscal year ending
December 31, 2003. The board of directors and the Audit Committee plan to
consider the engagement of independent accountants at a later date.
On May 22, 2002 the Company's Audit Committee dismissed its independent
public accountants, Arthur Andersen LLP ("Andersen") and appointed
PricewaterhouseCoopers LLP as its new independent public accountants, effective
immediately. This termination followed the Company's decision to seek statements
of qualifications from independent public accountants to audit the Company's
financial statements for the fiscal year ending December 31, 2002. The decision
to dismiss Andersen and to retain PricewaterhouseCoopers LLP was approved by the
Company's Board of Directors on May 22, 2002, upon the recommendation of its
Audit Committee.
During the Company's two most recent fiscal years ended December 31, 2001,
and the subsequent interim period through March 31, 2002, there were no
disagreements between the Company and Andersen on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements if not resolved to Andersen's satisfaction would
have caused them to make reference to the subject matter of the disagreement in
connection with their reports.
None of the reportable events described under Item 302 (a) (1) (v) of
Regulation S-K occurred within the Company's two most recent fiscal years and
the subsequent interim period through March 31, 2002.
The audit reports of Andersen on the consolidated financial statements of
the Company and its subsidiary as of December 31, 2001 and 2000 did not contain
any adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles.
During the Company's two most recent fiscal years ended December 31, 2001
and the subsequent interim period through March 31, 2002, the Company did not
consult with PricewaterhouseCoopers LLP regarding any of the matters or events
set forth in Item 302 (a) (2) (i) and (ii) of Regulation S-K.
During the Company's most recent fiscal year ended December 31, 2002, there
were no disagreements between the Company and PricewaterhouseCoopers on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements if not resolved to
PricewaterhouseCoopers' satisfaction would have caused them to make reference to
the subject matter of the disagreement in connection with their report.
14
SHAREHOLDER PROPOSALS
Shareholders who want to include a proposal in our proxy statement for the
2004 annual meeting should deliver a written copy of their proposal to our
principal executive offices no later than December 13, 2003. Proposals should be
directed to G. Thomas Frankland, Corporate Secretary, CNB Florida Bancshares,
Inc., 9715 Gate Parkway North, Jacksonville, Florida 32246. Proposals must
comply with the SEC proxy rules relating to shareholder proposals in order to be
included in our proxy materials. To be considered timely, we must receive all
other proposals of stockholders intended to be presented at the next annual
meeting by February 13, 2004. Additionally, we may solicit proxies in connection
with next year's annual meeting which confer discretionary authority to vote on
any shareholder proposals of which we do not receive notice by February 13,
2004.
ANNUAL REPORT; FORM 10-K
A copy of our Annual Report to Shareholders for the fiscal year ended
December 31, 2002 is being provided to each shareholder simultaneously with
delivery of this proxy statement. Additional copies of the Annual Report to
Shareholders or copies of our Annual Report on Form 10-K, filed with the SEC,
may be obtained by writing to G. Thomas Frankland, Executive Vice President and
Chief Financial Officer, CNB Florida Bancshares, Inc., 9715 Gate Parkway North,
Jacksonville, Florida 32246.
OTHER MATTERS
As of the date of this proxy statement, our board of directors does not
anticipate that other matters will be brought before the annual meeting. If,
however, other matters are properly brought before the annual meeting, the
persons appointed as proxies will have the discretion to vote or act thereon
according to their best judgment.
COST OF SOLICITATION
We will bear the cost of solicitation of proxies, including expenses in
connection with the preparation and mailing of this proxy statement. In addition
to the use of the mail, proxies may be solicited by personal interview,
telephone, facsimile or e-mail by our directors, officers or regular employees,
who will not receive additional compensation for such solicitation but may be
reimbursed for reasonable out-of-pocket expenses incurred in connection
therewith.
Holders of common stock are requested to complete, date and sign the
accompanying form of proxy and promptly return it to our transfer agent in the
enclosed, addressed postage paid envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ G. Thomas Frankland
-----------------------
G. Thomas Frankland
Corporate Secretary
Dated: April 14, 2003
15
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
I, the undersigned shareholder of CNB Florida Bancshares, Inc.,
Jacksonville, Florida, do hereby nominate, constitute and appoint, Mr. K. C.
Trowell and Mr. G. Thomas Frankland, or either of them my true and lawful proxy
and attorney(s) with full power of substitution for me and in my name, place and
stead, to represent and vote all of the CNB Florida Bancshares, Inc. common
stock par value $.01 per share, held in my name on its books on March 31, 2003
at the annual meeting of shareholders to be held on Wednesday, May 28, 2003.
PROPOSAL 1. Election of the following directors:
[ ] FOR all nominees listed below (except as marked to [ ] WITHHOLD AUTHORITY to vote for all
the contrary below) nominees listed below
Thomas R. Andrews Marvin H. Pritchett
Lewis Ansbacher Halcyon E. Skinner
Audrey S. Bullard William Streicher
Raymon Land, Sr. K.C. Trowell
Jon W. Pritchett
(INSTRUCTION: To withhold authority to vote for any individual nominee write
the name(s) of such nominee(s) below.)
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES.
IMPORTANT: PLEASE SIGN AND DATE ON REVERSE
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, the proxy will
be voted FOR Proposal 1. Should any other matter requiring a vote of the
shareholders arise, the proxies named above are authorized to vote in accordance
with their best judgment in the interest of CNB Florida Bancshares, Inc.
---------------------------------
Date
---------------------------------
Signature
---------------------------------
Signature (if jointly held)
---------------------------------
Print Name Here
IMPORTANT: Please sign exactly as your name appears hereon. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign the full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ADDRESSED ENVELOPE OR OTHERWISE TO SUNTRUST BANK, ATLANTA, N.A., MAIL CODE 258,
P.O. BOX 4625, ATLANTA, GEORGIA 30302. IF YOU DO NOT SIGN AND RETURN A PROXY OR
ATTEND THE MEETING AND VOTE, YOUR SHARES CANNOT BE VOTED.