P. O. Box 33042, St. Petersburg, Florida 33733
[LOGO] NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
[LOGO]
February 29, 1996
To the Common Shareholders:
The Annual Meeting of Shareholders of Florida Progress Corporation
(the "Company") will be held at the Marriott Pavilion Hotel, One Broadway, St.
Louis, Missouri, on Thursday, April 18, 1996, at 9:00 A.M., CENTRAL DAYLIGHT
TIME, for the following purposes:
1. To elect four directors to serve for a three-year
term;
2. To vote upon the Company's proposal to approve a Stock
Plan for Non-Employee Directors of Florida Progress
Corporation and Subsidiaries that would pay 75% of
each non-employee director's retainer fee in common
stock;
3. To vote upon a shareholder proposal as set forth in
the accompanying proxy statement;
and to transact such other business as may properly come before the meeting, or
any adjournment thereof.
The Board of Directors has fixed the close of business on February 8,
1996, as the record date for the determination of the shareholders entitled to
notice of, and to vote at, the meeting and any adjournment thereof. A complete
list of the shareholders entitled to vote at the meeting will be open to
examination by the shareholders, during regular business hours, for a period of
ten days prior to the meeting at the principal executive offices of the Company,
One Progress Plaza, St. Petersburg, Florida, 33701.
By order of the Board of Directors,
Kenneth E. Armstrong
Vice President, General Counsel and Secretary
You are urged, whether you own one or many shares, to mark, date,
sign and promptly mail the enclosed Proxy in the enclosed envelope, which
requires no postage.
Florida Progress Corporation, P. O. Box 33042, St. Petersburg, Florida
33733, February 29, 1996
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS/APRIL 18, 1996
This statement is furnished in connection with the solicitation by
the Board of Directors of Florida Progress Corporation (the "Company") of
proxies to be voted at the Annual Meeting of Shareholders to be held at the
Marriott Pavilion Hotel, One Broadway, St. Louis, Missouri, on Thursday, April
18, 1996, at 9:00 A.M., Central Daylight Time, or at any adjournment thereof.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time prior to the voting thereof by giving written notice of
revocation to the Secretary of the Company at the Company's principal executive
offices at any time before the proxy is voted, by executing and delivering a
later-dated proxy or by attending the Annual Meeting and voting his or her
shares in person. No such notice of revocation or later-dated proxy, however,
will be effective unless and until received by the Company prior to or at the
Annual Meeting.
Shares of Common Stock, without par value (the "Common Stock"), are
the only outstanding voting securities of the Company.
Only shareholders whose names appeared of record on the books of the
Company at the close of business on February 8, 1996, are entitled to receive
notice of and to vote at the Annual Meeting and any adjournment thereof. As of
that date, there were 96,481,740 shares of Common Stock outstanding. Each share
is entitled to one vote for each director to be elected and one vote for each
other matter to be considered. The attendance, in person or by proxy, of the
holders of a majority of the issued and outstanding shares of Common Stock
entitled to vote at the Annual Meeting is necessary to constitute a quorum to
transact business. The Florida Business Corporation Act (the "FBCA") provides
that directors are elected by a plurality of the votes cast and all other
matters are approved if the votes cast in favor of the action exceed the votes
cast against the action (unless the matter is one for which the FBCA, or other
applicable laws, or the Company's articles of incorporation require a greater
vote). Therefore, under the FBCA, abstentions and broker non-votes have no legal
effect, unless a specific percentage of those shareholders entitled to vote is
required by the FBCA, or other applicable laws, or the Company's articles of
incorporation to approve a matter.
The cost of preparing and mailing proxy material and soliciting
proxies will be borne by the Company. Solicitation of proxies from some
shareholders will be made by telephone or in person by regular employees of the
Company, who will receive no additional compensation therefor. In addition,
arrangements will be made with brokerage firms and other custodians, nominees
and fiduciaries to forward solicitation material for the Annual Meeting to
beneficial owners, and the Company will reimburse such firms for their expense
in so doing.
This proxy statement and accompanying notice and form of proxy are
first being sent to the shareholders of the Company on or about February 29,
1996.
Election of Directors
The Board of Directors of the Company consists of twelve members,
divided into three classes of equal size. The current terms of the three classes
expire in 1996 (Class III directors), 1997 (Class I directors) and 1998 (Class
II directors). Directors are generally elected for three-year terms. Mr. Allen
J. Keesler, Jr., a Class II director, has resigned from the Board of Directors
effective April 1,
1
1996. On February 8, 1996, the Board of Directors approved an
amendment to the Company's Bylaws to decrease the Board's size to eleven members
and to decrease the number of Class II directors to three, effective with Mr.
Keesler's resignation on April 1, 1996. Four Class III directors with terms
expiring in 1999 are to be elected at the Annual Meeting. The Board of
Directors has nominated four persons, all of whom are currently directors, to
stand for election at the Annual Meeting. The directors shall be elected by a
plurality of the votes cast, so that the four persons nominated for election as
Class III directors receiving the four highest totals of votes cast in favor of
his or her election will be elected as Class III directors. Each share of Common
Stock entitles its holder to cast one vote in respect of each director to be
elected. Votes may not be cumulated.
It is the intention of the persons named in the accompanying proxy, unless
otherwise directed, to vote all proxies FOR the election of the four nominees of
the Board of Directors as directors of the Company. Directors elected at the
Annual Meeting, after being duly qualified, will serve until their successors
are elected and qualified.
The Board of Directors has been informed that all nominees are
willing to serve as directors, but if any of them should decline or be unable to
serve as a director, the persons named in the accompanying proxy will vote for
the election of another person or persons as they, in their discretion, may
choose. The Board of Directors has no reason to believe that any nominee will be
unable or unwilling to serve.
Information as to Nominees
The names and ages of the nominees for election as directors, their
principal occupations and employment during the past five years, including a
brief biography, and the first year elected as a director, are as follows:
NOMINEES FOR TERMS EXPIRING IN 1999
(CLASS III DIRECTORS)
- ----------- JACK B. CRITCHFIELD, age 62, Chairman of the
- ----------- Board and Chief Executive Officer. He was a
- ----------- director of Florida Power Corporation
- ----------- ("Florida Power") from 1975 through 1978 and
- ---PHOTO--- in 1983, became Vice President of Florida
- ----------- Power's Eastern and Ridge Divisions. He then
- ----------- served the Company as Group Vice President,
- ----------- Energy and Technology Group and President of
Electric Fuels Corporation ("Electric
Fuels"), a subsidiary, from 1987 until
February 1988, when he was elected President
and Chief Operating Officer. On February 1,
1990, he became President and Chief Executive
Officer and on January 1, 1991, became
Chairman of the Board. He is a director of
Barnett Banks, Inc., Jacksonville.
Committee: Executive, Chairman. Director
since 1988*
- ----------- CLARENCE V. MCKEE, ESQ., age 53, Chairman and Chief
- ----------- Executive Officer of McKee Communications, Inc.,
- ----------- Tampa, Florida. From 1987 to 1992, he served as
- ----------- Chairman and Chief Executive Officer of WTVT Holdings,
- ---PHOTO--- Inc. He served as Counsel to Pepper & Corazinni, a
- ----------- Washington, D.C. communications law firm, from 1980
- ----------- until 1987, when he became a co-owner of WTVT
- ----------- Holdings, Inc., licensee of WTVT-TV, Tampa, Florida.
He is a director of Barnett Banks, Inc., and American
Heritage Life Insurance Company, Jacksonville.
Committees: Compensation, Chairman; Audit.
Director since 1989*
*Director of Florida Power Corporation
2
- ----------- RICHARD A. NUNIS, age 63, Chairman of Walt
- ----------- Disney Attractions, Orlando, Florida. He has
- ----------- held various positions with the Disney
- ----------- organization since 1955, including Vice
- ---PHOTO--- President, Operations in 1968, Executive Vice
- ----------- President of DISNEYLAND and Walt Disney World
- ----------- in 1972, President of Walt Disney Attractions
- ----------- in 1980, and his current position since 1991.
He is a director of The Walt Disney Company;
SunTrust Bank, Central Florida N.A.,
Enterprise Florida, Inc., and University of
Central Florida Foundation, Inc.; and serves
as chairman of the Florida Council of 100,
and is a member of the Economic Development
Commission of Mid-Florida. Committees:
Executive; Compensation; Finance and Budget,
Chairman. Director since 1989
- ----------- JEAN GILES WITTNER, age 61, President of
- ----------- Wittner & Company, St. Petersburg, Florida, a
- ----------- firm involved in real estate management and
- ----------- insurance brokerage and consulting. She
- ---PHOTO--- previously served as President and Chief
- ----------- Executive Officer of a savings association
- ----------- from 1975 until it was sold on December 31,
- ----------- 1986. She then became President of Wittner
Securities, Inc. In November 1989, she became
President of Wittner & Company. She has been
a director of Florida Power since 1977. She
also serves on the board of Raymond James
Bank, F.S.B., Menorah Manor, a non-profit
nursing home, and the Pinellas County
Education Foundation. She is also a member
of the board of trustees of Eckerd College.
Committees: Audit, Chairman; Compensation;
Compliance. Director since 1982*
Information as to Continuing Directors
The names and ages of directors who continue in terms expiring in
1997 and 1998, their principal occupations, and employment during the past five
years, including a brief biography, and the first year elected as a director,
are as follows:
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1997
(CLASS I DIRECTORS)
- ----------- MICHAEL P. GRANEY, age 52, Partner, Simpson
- ----------- Thacher & Bartlett, Columbus, Ohio. He has
- ----------- practiced law with this New York based law
- ----------- firm since 1980 and is now resident partner
- ---PHOTO--- in its Ohio office. His specialties are
- ----------- utilities, anti-trust and litigation. He is
- ----------- a member of the American, District of
- ----------- Columbia, Ohio and Columbus Bar Associations
and the Federal Energy Bar Association.
Committees: Executive; Compliance;
Nominating, Chairman. Director since 1991
*Director of Florida Power Corporation
3
- ----------- RICHARD KORPAN, age 54, President and Chief
- ----------- Operating Officer and effective April 1,
- ----------- 1996, Chairman of the Board and Chief
- ----------- Executive Officer of Florida Power. He
- ---PHOTO--- joined the Company in June 1989, as Executive
- ----------- Vice President and Chief Financial Officer
- ----------- and was elected President and Chief Operating
- ----------- Officer effective December 1, 1991. Prior to
joining the Company, he was President and Chief
Executive Officer of Pacific Diversified Capital
Company, a subsidiary that comprises the non-utility
operations of San Diego Gas & Electric Company
("SDG&E"). From 1979 to 1986, he held several
positions with SDG&E including Senior Vice President
and Chief Financial Officer, Group Vice
President-Finance, and Treasurer. After practicing law
in Colorado, he served in various financial positions
at Public Service Company of Colorado before joining
SDG&E. He is a director of SunTrust Bank, Tampa Bay,
Acordia of Central Florida, Inc., Ruth Eckerd Hall's
PACT, Inc., the Florida Chamber of Commerce, and
Morton Plant Mease Health Care, Inc. Committees:
Executive; Finance and Budget. Director since 1989*
- ----------- JOAN D. RUFFIER, age 56, General Partner,
- ----------- Sunshine Cafes, Orlando, Florida, a food and
- ----------- beverage concession business at major Florida
- ----------- airports. From 1978 to 1982, she served as a
- ---PHOTO--- management consultant to the National
- ----------- Association of Bank Women. From 1982 to
- ----------- 1986, she practiced public accounting with
- ----------- the firm of Colley, Trumbower & Howell. In
1986, she assumed her present position. She
is a member of the Administrative Board of
SunTrust Bank, Central Florida, N.A. in
Orlando, and Chairman of the Board of the
Jacksonville Branch of the Federal Reserve
Bank of Atlanta. She also serves on the
board of directors of the Sun Health
Alliance, Charlotte, North Carolina. She was
a member and chairman of the Board of Regents
of the State University System of Florida.
She also serves as a director of the
University of Central Florida Foundation, the
University of Florida Foundation, the
Community Foundation of Central Florida Inc.,
Cyprus Equity Fund, and INVEST, INC.
Committees: Audit; Compliance, Chairman;
Finance and Budget. Director since 1990*
- ----------- ROBERT T. STUART, JR., age 63, Rancher and
- ----------- Investor, Dallas, Texas. He joined
- ----------- Mid-Continent Life Insurance Company ("Mid-
- ----------- Continent"), now a subsidiary, in 1949,
- ---PHOTO--- became a Vice President in 1951, President in
- ----------- 1954 and was Chairman of the Board and Chief
- ----------- Executive Officer from 1975 to 1986, when
- ----------- Mid-Continent was acquired by the Company.
He is a member of the Oklahoma Cattlemen's
Association, Texas & Southwestern Cattle
Raisers Association, and a trustee of The
Frontiers of Science Foundation. Committee:
Executive. Director since 1986
*Director of Florida Power Corporation
4
DIRECTORS WHOSE TERMS EXPIRE IN 1998, EXCEPT AS INDICATED
(CLASS II DIRECTORS)
- ----------- WILLARD D. FREDERICK, JR., age 61, Citrus
- ----------- grower and investor, Orlando, Florida. From
- ----------- 1980 to 1992, Mr. Frederick served as Mayor
- ----------- of the City of Orlando. He practiced law as
- ---PHOTO--- a public defender for the Ninth Judicial
- ----------- Circuit of Florida and in 1966 founded the
- ----------- Orlando law firm of Frederick, Wooten &
- ----------- Honeywell P.A. He returned to the practice
of law in 1992 as a partner in the Orlando office of
the firm of Holland & Knight from which he retired
effective April 1, 1995. He is a member of the Board
of Directors of Atlantic Gulf Communities
Corporation, Blue Cross Blue Shield of Florida, and
Sprint/United Telephone. He also serves as a member
and is incoming Chairman of the Board of Trustees of
Rollins College, and is a member of the Florida
Council of 100 and the Board of Trustees of the
University of Central Florida Foundation. In 1991, he
chaired the Florida Governor's Commission for
Government by the People (the "Frederick
Commission"). He serves as Commission Chairman and
Chairman of the Florida Benchmark Committee of the
Governor's Commission for Government Accountability &
Performance. Committees: Compensation; Compliance.
Director since January 1995
- ----------- ALLEN J. KEESLER, JR., age 57, Group Vice
- ----------- President, Utility Group and President and
- ----------- Chief Executive Officer of Florida Power
- ----------- until his retirement scheduled for April 1,
- ---PHOTO--- 1996. Mr. Keesler joined Florida Power in
- ----------- 1963. He served as President and Chief
- ----------- Executive Officer of Talquin Corporation, a
- ----------- former subsidiary, from January 1983 through
February 1988, and was Group Vice President,
Development Group of the Company from January
1986 through February 1988. He is a director
of SouthTrust Corporation and the Edison
Electric Institute and an officer and board
member of the Southeastern Electric Exchange.
Mr. Keesler has resigned from the Company's
Board of Directors effective with his
retirement on April 1, 1996. Committee:
Finance and Budget. Director since 1992*
- ----------- VINCENT J. NAIMOLI, age 58, Chairman,
- ----------- President and Chief Executive Officer of
- ----------- Anchor Industries International, Inc., and
- ----------- Harvard Industries, Inc., an operating and
- ---PHOTO--- holding company and an original automotive
- ----------- equipment manufacturing company, Tampa,
- ----------- Florida. He is also Managing General Partner
- ----------- of the Tampa Bay Devil Rays, Ltd. baseball
ownership group, St. Petersburg, Florida. Mr.
Naimoli currently serves as a director of
Resorts International, Inc., New River
Industries, Russell Stanley Corp. and
Simplicity Pattern Company. He was Chairman,
President and Chief Executive Officer of
Anchor Glass Container Corporation from 1983
through 1989; Chairman, President and Chief
Executive Officer of Doehler-Jarvis
Corporation from November 1991 to July 1995;
and Chairman, President and Chief Executive
Officer of Ladish Corp. from April 1993 to
September 1995. He began his current
occupation in January 1990. He is a Trustee
of the University of Tampa. Committees:
Finance and Budget; Compensation; Nominating.
Director since 1992
*Director of Florida Power Corporation
5
- ----------- CHARLES B. REED, age 54, Chancellor of the
- ----------- State University System of Florida,
- ----------- Tallahassee, Florida. He has been Chancellor
- ----------- since 1985. From 1979 to 1985, he served as
- ---PHOTO--- Deputy Chief and Chief of Staff to Florida
- ----------- Governor Bob Graham. He is a director of
- ----------- Capital Health Plan in Tallahassee. He also
- ----------- serves on the Florida Council of 100, the
Council on Foreign Relations, and the
Business-Higher Education Forum. Committees:
Finance and Budget; Nominating. Director
since 1992
Security Ownership of Certain Beneficial Owners
The following table sets forth information concerning shares of
Common Stock that are held by persons known to the Company to be the beneficial
owners of more than 5% of said stock as of December 31, 1995.
Number of Shares Percent
Name and Address Beneficially Owned(1) of Class
Franklin Resources, Inc. 5,014,875 5.2%
777 Mariners Island Blvd.
San Mateo, California 94404
Security Ownership of Management
The directors and nominees and all other named executive officers
individually, and the directors, nominees, named executive officers and
executive officers of the Company as a group, beneficially owned Common Stock as
follows:
Number of Shares Percent of
Name Beneficially Owned(1) Class (2)
Jack B. Critchfield 28,249
Willard D. Frederick, Jr. 1,500
Michael P. Graney 2,153(3)
Allen J. Keesler, Jr. 50,632
Richard Korpan 11,995
Clarence V. McKee 1,770
Vincent J. Naimoli 5,216
Richard A. Nunis 17,992
Charles B. Reed 1,569
Joan D. Ruffier 2,885
Robert T. Stuart, Jr. 1,506,230(4) 1.56%
Jean Giles Wittner 8,639
Richard D. Keller 7,835
Joseph H. Richardson 8,150
All 16 directors, nominees and
executive officers as a group, 1,658,956 1.72%
including those named above
(1) As used in this table, "beneficial ownership" means the direct or
indirect, sole or shared power to vote, or to direct the voting of, a
security and/or investment power with respect to a security. Unless
otherwise noted, the number of shares held are beneficially owned as of
December 31, 1995.
(2) Unless otherwise noted, less than 1% per individual.
(3) Includes 214 shares owned by Mr. Graney's son, as to
which shares Mr. Graney disclaims beneficial ownership.
(4) Includes 594 shares owned by Mr. Stuart's children, as to
which shares Mr. Stuart disclaims beneficial ownership.
6
Certain Relationships and Related Transactions
The Company is a party to certain transactions involving the Tampa Bay
Devil Rays major league baseball team in which Vincent J. Naimoli, a director of
the Company, has a material interest. See "Compensation Committee Interlocks and
Insider Participation" on page 9.
Mr. Michael P. Graney is a partner in the law firm of Simpson Thacher &
Bartlett. That firm provided legal services to the Company and Electric Fuels in
1995, and has been providing legal services to the Company and Electric Fuels
during 1996.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange. Officers, directors and greater than
ten-percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company during 1995, or written representations that no Forms 5 were required,
the Company believes that all persons who at any time during 1995 were officers,
directors, or greater than ten-percent beneficial owners of the Company's Common
Stock, filed their applicable Section 16(a) reports on a timely basis during
1995 and prior fiscal years.
Meetings of the Board of Directors and Standing Committees
During 1995, the Board of Directors held six meetings. In addition,
certain directors attended standing committee meetings, including the following:
Audit Committee. During 1995, the Audit Committee met three times to
review the financial statements and results of the 1994 audit, to recommend
independent auditors for 1995 and to discuss plans and objectives for internal
audit activities for 1996.
Compensation Committee. During 1995, the Compensation Committee met
three times to review and approve the total compensation opportunities and
awards for the executive officers of the Company and Florida Power, and to take
actions relating to the basic design of the Company's compensation policies for
all employees of the Company and its subsidiaries.
Nominating Committee. The Nominating Committee held no meetings during
1995. The Committee will consider recommendations for nominees for election to
the Board of Directors submitted by shareholders. These nominations should be
submitted to the Secretary of the Company for review by the Committee. Such
nominations for the 1997 Annual Meeting of Shareholders should be submitted no
later than November 1, 1996.
The Company also has Executive, Finance and Budget and
Compliance Committees. Members of all committees are identified in the
sections titled "Information as to Nominees" and "Information as to Continuing
Directors." During 1995, all directors, except Robert T. Stuart, Jr., attended
at least 75% of the total number of Board and pertinent committee meetings.
Compensation of Directors
For 1995, the compensation for each non-employee director of the
Company was $22,500 per year as a retainer fee, plus a fee of $1,500 for each
meeting of the Company's Board of Directors attended. Each non-employee director
who served on committees of the Board or on the Boards of the Company's
subsidiaries was paid a daily meeting fee of $1,500 for subsidiary and committee
meetings attended on any one day. Effective in May of 1995, each Committee
Chairman was compensated by an additional $750 for each meeting chaired. All or
a portion of these fees were allowed to be deferred at the discretion of a
director.
7
Upon retiring from the Board, directors who were not employees of the
Company, or one of its subsidiaries, were eligible for appointment to an
Advisory Board. When appointed, a fee equal to the annual retainer of the Board
member at the time of his or her retirement multiplied by a percentage equal to
10% for each year served on the Board up to 100% was payable in quarterly
installments for the life of the retired director. As discussed below, the
Advisory Board was abolished effective January 1, 1996.
1996 Implementation of Six Practices
In November of 1995, the Compensation Committee recommended and the
Board adopted the following six practices with regard to director compensation
to formalize the Company's current practices and to embrace the philosophy
contained in the Report of the National Association of Corporate Directors
("NACD") Blue Ribbon Commission on Director Compensation ("Blue Ribbon Report"):
1. Establish a process by which directors can
determine the compensation program in a deliberate
and objective way.
2. Set a substantial target for stock ownership by
each director.
3. Define the desirable total value of all forms of
director compensation.
4. Pay directors solely in the form of equity and cash - with
equity representing a substantial portion of the total up to
100 percent; dismantle existing benefit programs and avoid
creating new ones.
5. Adopt a policy stating the Company should not hire a director
or director's firm to provide professional or financial
services to a corporation without the approval of the Board of
Directors, or its Executive Committee.
6. Disclose fully in the proxy statement the
philosophy and process used in determining director
compensation and the value of all elements of
compensation.
Consistent with the above practices, effective January 1, 1996, the
Board abolished, on a prospective basis, its Advisory Board. Also, to encourage
and assist directors to achieve substantial stock ownership, the Board adopted,
and is recommending to the shareholders for their approval, a stock plan for
non-employee directors through which 75% of each non-employee director's $30,000
retainer fee will be paid in Common Stock, as described in more detail below.
Only the cash portion of directors' compensation will be allowed to be deferred.
Company Proposal to Approve Stock Plan for Non-Employee
Directors
Following careful review of compensation issues for non-employee or
"outside" directors, the Company is proposing to change the way these members of
the Board of Directors are paid.
Specifically, the Board is recommending that 75% of an outside
director's annual retainer fee be paid in Common Stock, instead of cash.
This approach is consistent with the recommendations contained in the
NACD Blue Ribbon Report discussed above, which suggested that directors be paid
solely in the form of equity and cash, with equity representing a substantial
portion of the total. Paying the retainer fee for outside directors with common
stock instead of cash will more effectively align the decisions made by the
Company's governance board with the interests of shareholders.
In order to achieve the objectives of this philosophy, the Board
adopted the Stock Plan for Non-Employee Directors of Florida Progress
Corporation and Subsidiaries (the "Stock Plan") at its meeting held November 16,
1995, subject to approval by the Company's shareholders. The complete text of
the Stock Plan is set forth in Exhibit "A" of this Proxy Statement, and the
following summary of certain terms of the Stock Plan is qualified in its
entirety by reference thereto.
Highlights of the Stock Plan are as follows:
- - Participants in the Stock Plan shall include all nine outside
directors of the Company and all other approved subsidiaries, which at
present includes two outside directors at Florida Power.
8
- - The Stock Plan provides that 75% of a director's retainer fee shall be
paid in Common Stock.
- - The Stock Plan will be effective January 1, 1996, subject
to approval by the shareholders.
- - The Stock Plan authorizes the issuance of up to 150,000 shares of
Common Stock to be issued from the Company's authorized but unissued
shares of Common Stock.
- - Common Stock will be issued under the Stock Plan in such a manner that
the shares will not be treated as a purchase for short-swing profit
purposes under Section 16 of the Securities Exchange Act of 1934
("Section 16").
- - Common Stock will be issued quarterly on March 31, June 30, September
30 and December 31 of each year, except that the initial issuance will
not be made until the Stock Plan has been approved by the shareholders.
- - The Stock Plan will be administered by the Company's
Compensation Committee. Costs of administering the Stock
Plan will be borne by the Company.
- - The Stock Plan may be amended by the Board of Directors
as it deems advisable, including to add to the list of
subsidiaries that may participate in the Stock Plan.
However, no amendment may be made that would, absent
shareholder approval, disqualify the Plan for an
exemption from Rule 16b-3 under Section 16, and the
formula award provisions of the Stock Plan may not be
amended more than once every six months unless to comply
with changes in the Internal Revenue Code of 1986 or the
Employee Retirement Income Security Act of 1974, as
amended.
- - If the Stock Plan is not approved by the shareholders,
each director's retainer fee shall be paid in cash.
The following table sets forth estimated amounts to be paid under the
Stock Plan in 1996:
Stock Plan for Non-Employee Directors
Number
Dollar of
Name and Position Value Shares(1)
- ----------------- ------ ---------
Named Executive Officers $ 0 0
Executive Officers as a Group 0 0
Non-Executive Directors as a Group 202,500 5,625
Non-Executive Officers and Employees as a Group 0 0
(1) Based on an estimated stock price of $36 per share.
It is the intention of the persons named in the accompanying proxy,
unless otherwise directed, to vote all proxies FOR approval of the Stock Plan.
Approval of this proposal requires the affirmative votes of the holders of a
majority of the shares of Common Stock present, or represented, and entitled to
vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE STOCK PLAN
Compensation Committee Interlocks and Insider Participation
The following persons served as members of the Compensation
Committee of the Board of Directors of the Company during 1995:
Willard D. Frederick, Jr.; Vincent J. Naimoli; Clarence V. McKee;
Richard A. Nunis; and Jean Giles Wittner. None of these
individuals was during 1995, or formerly, an officer or employee of
the Company or any of its subsidiaries.
The Company has invested $5 million for a 6.09% limited partnership
interest in the Tampa Bay Devil Rays, Ltd. ("Devil Rays"), a Florida limited
partnership that acquired in 1995 a Major League Baseball franchise for the
Tampa Bay area. A corporation controlled by Vincent J. Naimoli, a director and
member of the Compensation Committee, is the managing general partner and a
limited partner in the Devil Rays. Mr. Naimoli has a total indirect interest of
18.29% in the Devil Rays. The foregoing
9
percentage capital interests are subject to change should additional
investors be admitted to the Devil Rays. The Company has also executed a
Private Suite License Agreement ("License") with the Devil Rays for the use
of a private suite to be constructed in the ThunderDome located in St.
Petersburg, Florida. The License fee in the amount of $125,000 per year is
subject to annual increases over the five-year term of the License equal to
2.5% plus the percentage increase in the Consumer Price Index. The term of
the License is expected to commence in 1998 and no later than the date of
the first regular championship season game scheduled to be played by the
Devil Rays baseball team in the ThunderDome. The terms and conditions of
the License are substantially similar to those entered into with other
licensees.
Executive Compensation
The following table contains information with respect to compensation
awarded, earned or paid during the years 1993-1995 to (i) the Chief Executive
Officer ("CEO") of the Company; and (ii) the other four most highly compensated
executive officers of the Company (collectively the "Named Executive Officers")
whose total remuneration paid in 1995 exceeded $100,000.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation (1) Payouts
(h) (i)
(a) (b) (c) (d) LTIP All other
Name and Principal Position Year Salary Bonus Payouts(2) Compensation (3)
- ------------------ ---- ------ ----- ---------- ----------------
JACK B. CRITCHFIELD 1995 $589,992 $382,500 $465,654(4) $22,715
Chairman and Chief
Executive Officer 1994 589,992 346,000 345,636 23,910
1993 585,186 396,500 277,844 10,595
RICHARD KORPAN 1995 $440,003 $257,000 $284,109(4) $19,800
President and Chief
Operating Officer 1994 432,311 232,500 206,455 18,060
1993 395,196 265,000 152,813 10,595
ALLEN J. KEESLER, JR. 1995 $397,848 $240,000 $260,419(4) $16,785
Group Vice President
and President and Chief 1994 383,011 172,500 178,904 15,837
Executive Officer,
Florida Power 1993 379,548 208,000 217,250 9,888
Corporation (5)
RICHARD D. KELLER 1995 $284,466 $108,500 $146,882(4) $9,813
Group Vice President
and President and 1994 233,074 141,000 132,543 10,065
Chief Executive Officer,
Electric Fuels Corp. 1993 222,495 135,000 10,010
JOSEPH H.RICHARDSON 1995 $215,009 $113,000 $110,473(4) $8,835
Senior Vice President,
Florida Power 1994 212,122 88,500 81,326 4,226
Corporation (5)
1993 198,071 100,000 78,875 119
(1) All other annual compensation paid to the Named Executive Officers
during 1995, other than salary and annual incentive compensation, does
not exceed the minimum amounts required to be reported pursuant
to Securities and Exchange Commission rules.
(2) The number of shares of restricted Common Stock held by
the Named Executive Officers as of December 31, 1995 as
a result of awards earned under the 1991-1993 and/or
1992-1994 performance cycles, and the value of such
shares,is as follows: Jack B. Critchfield 10,082 shares
$356,651; Richard Korpan 5,882 shares $208,076; Allen J.
Keesler, Jr. 6,001 shares $212,285; Richard D. Keller
2,730 shares $96,574; and Joseph H. Richardson 2,515
shares $88,968.
10
(3) Company contributions to its Savings Plan and/or its
Executive Optional Deferred Compensation Plan on behalf
of the Named Executive Officers.
(4) Represents the dollar value as of February 8, 1996, the
date of grant, of shares of Common Stock earned under the 1993-1995
performance cycle of the Company's Long-Term Incentive Plan ("LTIP"),
two-thirds of which are restricted. The total number of shares earned,
including dividend equivalent shares, is as follows: Jack B.
Critchfield, 13,071 shares; Richard Korpan 7,975 shares; Allen J.
Keesler, Jr., 7,310 shares; Richard D. Keller 4,123 shares; and Joseph
H. Richardson 3,101 shares. The vesting schedule for the restricted
stock is 50% on January 1, 1997 and 50% on January 1, 1998, except
that all of Mr. Keesler's restricted stock will vest on January 1,
1997. Dividends are payable on the restricted Common Stock to the
extent and on the same date as dividends are paid on all other Common
Stock. In the event of a change in control of the Company, all
restrictions on all shares of restricted stock shall lapse upon such
change in control.
(5) Allen J. Keesler, Jr., will retire as Company Group Vice President and
President and Chief Executive Officer of Florida Power on April 1,
1996. Joseph H. Richardson has been promoted to the positions of
Company Group Vice President and President and Chief Operating Officer
of Florida Power effective April 1, 1996.
The following table contains information with respect to performance
shares awarded in 1995 to the Named Executive Officers of the Company for the
1995-1997 performance cycle of the LTIP:
LONG-TERM INCENTIVE PLAN(1)
AWARDS IN 1995
Number of Performance
Performance Period Estimated Payout at End of Period (3)
------------------------------------------------------------
Name Shares (2) Covered Threshold Target Maximum
---- ------------ ----------- -------------- --------------- -----------
Jack B. Critchfield 12,757 1995-1997 6,379 shares 12,757 shares 19,136 shares
Richard Korpan 6,116 1995-1997 3,058 shares 6,116 shares 9,174 shares
Allen J. Keesler, Jr. 4,942 1995-1997 2,471 shares 4,942 shares 7,413 shares
Richard D. Keller 3,603 1995-1997 1,802 shares 3,603 shares 5,405 shares
Joseph H. Richardson 2,324 1995-1997 1,162 shares 2,324 shares 3,486 shares
(1) The LTIP is a Common Stock-based incentive plan to reward participants
for long-term growth and performance of the Company. It was approved by
the shareholders in 1990. See the Long-Term Incentive Compensation
portion of the Report of the Compensation Committee of the Board of
Directors on page 15 for additional information.
(2) Performance shares awarded under the LTIP which, upon
achievement of performance criteria, would result in the
payout of shares of Common Stock of the Company, two-thirds of
which would be restricted for periods of time. Payouts of
shares of Common Stock are made for achieving returns on
equity goals, equal to or exceeding the thresholds determined
by the Compensation Committee. The Compensation Committee has
determined that Allen J. Keesler, Jr. will be eligible to earn
42% of his award. In the event of a change in control of the
Company, 150% of all performance shares awarded under the LTIP
and then outstanding would automatically be considered earned
and would be paid in shares of unrestricted Common Stock
together with shares of unrestricted Common Stock payable for
dividend equivalents accrued to the change in control. Also,
all restrictions on shares of restricted Common Stock
previously granted and then held would lapse.
(3) Awards are earned upon achievement of Company and/or
subsidiary return-on-equity goals for the three-year
performance cycle.
11
Pension Plan Table
The table below illustrates the estimated annual benefits (computed as
a straight life annuity beginning at retirement at age 65) payable under the
Company's Retirement Plan and Nondiscrimination Plan for specified final average
compensation and years of service levels. As explained below, the table also
provides information about the estimated annual lifetime benefits payable under
the Company's Supplemental Executive Retirement Plan ("SERP").
Estimated Annual Retirement Benefits Payable Under
the Retirement Plan and Nondiscrimination Plan
Average Annual
Compensation Service Years
5 10 15 20 25 30 35 or more
- -- -- -- -- -- ----------
$ 200,000 $ 18,000 $ 36,000 $ 54,000 $ 72,000 $ 90,000 $108,000 $126,000
300,000 27,000 54,000 81,000 108,000 135,000 162,000 189,000
400,000 36,000 72,000 108,000 144,000 180,000 216,000 252,000
500,000 45,000 90,000 135,000 180,000 225,000 270,000 315,000
600,000 54,000 108,000 162,000 216,000 270,000 324,000 378,000
700,000 63,000 126,000 189,000 252,000 315,000 378,000 441,000
800,000 72,000 144,000 216,000 288,000 360,000 432,000 504,000
900,000 81,000 162,000 243,000 324,000 405,000 486,000 567,000
1,000,000 90,000 180,000 270,000 360,000 450,000 540,000 630,000
1,100,000 99,000 198,000 297,000 396,000 495,000 594,000 693,000
1,200,000 108,000 216,000 324,000 432,000 540,000 648,000 756,000
Under the Retirement Plan and the Nondiscrimination Plan, the
compensation taken into account in calculating benefits is salary only. The
years of credited service that would be used in calculating benefits under the
Retirement Plan and the Nondiscrimination Plan for the Named Executive Officers
in the summary compensation table are as follows: Dr. Critchfield, 12 years of
service; Mr. Korpan, 6 years of service; Mr. Keesler, 33 years of service; Mr.
Keller, 17 years of service; and Mr. Richardson, 20 years of service. The
benefits under the Retirement Plan and the Nondiscrimination Plan are subject to
offset by an amount equal to 1 1/7% of a participant's primary Social Security
benefit for each year of service (with a maximum offset of 40%).
The Named Executive Officers are also entitled to benefits under the
SERP. These benefits are offset by the benefits payable under the Retirement
Plan and the Nondiscrimination Plan, as well as 100% of the executive's primary
Social Security benefit. The estimated annual SERP benefit for the Named
Executive Officers (prior to any offsets) may be determined using the table set
forth above for the Retirement Plan and the Nondiscrimination Plan. For these
purposes, the current compensation for each executive that would be used in
calculating benefits under the SERP is substantially the same as that reported
as salary and bonus in the summary compensation table, and the number of years
of deemed credited service that would be used in calculating benefits under the
SERP for each such executive is as follows: Dr. Critchfield 35 years of service;
Mr. Korpan 35 years of service; Mr. Keesler 35 years of service; Mr. Keller 17
years of service; and Mr. Richardson 20 years of service.
Accrued benefits may also be paid under each of the Retirement Plan,
Nondiscrimination Plan and the SERP if a participant terminates employment
before age 65 and meets the requirements for early retirement, disability, death
or other termination of employment benefits after becoming vested under the
rules of the particular plan.
The SERP also provides for a lump sum benefit payable in the event of a
change in control. In most instances, this benefit is equal to the sum of (1)
two times the executive's current annual salary and bonus, (2) the value of the
executive's prospective award under the SERP if he were to continue to work
until age 65 (including amounts that later would have been payable to any
surviving spouse) and (3) the amount of any federal excise taxes (and income
taxes on any reimbursement under this provision) imposed on the executive under
Section 4999 of the Internal Revenue Code with respect to all compensation plans
and arrangements of the Company.
12
Employment Contracts and Termination of Employment
In 1995, the Company entered into an Employment Contract with Mr.
Korpan. The term of the agreement is from June 1, 1995 through March 1, 1998,
with automatic one-year extensions on each March 1, unless either party gives 90
days' written notice to the contrary. His annual base salary will not be less
than $440,000 with award opportunities as a participant in the Management
Incentive Compensation Plan ("MICP") and LTIP of not less than 45% of base
salary for each plan. Severance pay established in the agreement is three times
annual base pay and MICP target amount. All unvested Common Stock previously
awarded under the LTIP would vest and all LTIP-imposed restrictions would lapse.
In addition, if terminated before March 1, 1997, he would be deemed vested under
the Company's Supplemental Executive Retirement Plan. Severance pay is due upon
termination by the Company without cause or upon termination by the employee for
good reason. The agreement contains a covenant not to compete. The Company will
pay the employee's attorneys fees in the event of an action to enforce the
agreement after a change-in-control.
Mr. Keesler is taking early retirement effective April 1, 1996,
pursuant to the "special early retirement" provisions of the SERP which are
separate and in lieu of those mentioned on page 12. Under his arrangement, Mr.
Keesler will receive, until age 62, an annual retirement benefit of $375,762.
After age 62, the annual benefit will be reduced by $11,856, the amount of his
annual Social Security benefit. After his death, his spouse will receive an
annual survivor benefit of $187,881. Approximately 61% of those benefits are
payable pursuant to the SERP, with the balance payable under the Retirement and
Nondiscrimination Plans. The Company will also pay 95% of his company medical
insurance premiums and 71% of his spouse's. Mr. Keesler will also be eligible to
be paid a pro rata 1996 MICP award and 75% and 42% of his 1994-1996 and
1995-1997 LTIP performance cycle awards, respectively, if any are determined to
be earned.
Report of the Compensation Committee of the Board of Directors
Executive Compensation Design
The Company's executive compensation system is intended to attract,
retain and motivate high quality executives with individually tailored market-
and performance-based compensation packages that reward protection of Company
assets and enhancement of shareholder value. The Compensation Committee of the
Board of Directors of Florida Progress Corporation (the "Committee"), comprised
solely of outside directors, approves total compensation opportunities and
awards for executive officers of the Company and Florida Power. In May 1995,
following due diligence efforts that have occurred since February 1994, the
Committee recommended that the Company enter into an employment agreement with
the Company's President and Chief Operating Officer to protect the Company's
vested interest due to his length of service and his key strategic role. The
terms of the agreement are discussed above. The target compensation for each
executive officer is established annually by the Committee and is made up of
three principal components: base salary; annual incentive cash compensation; and
long-term incentive compensation payable in Common Stock. Each executive
officer's total direct compensation is generally targeted around the 50th
percentile of compensation of persons holding similar positions or having
similar responsibilities at other electric utilities or industrial companies. A
significant portion of each executive officer's total target compensation
(approximately 35-55%) is variable, at risk and dependent upon the Company's
annual and long-term performance.
The Committee believes this "pay-for-performance" program, which
compensates an executive officer at his target level of compensation only if
specific goals are achieved, is a fair way to structure an executive
compensation program. The program rewards executives for meeting financial
targets, thus producing benefits for the entire Company and its shareholders. It
also helps protect Company assets and builds long-term shareholder value.
A discussion of the three compensation components and the actions taken
by the Committee with respect to compensation reported for 1995 for the Named
Executive Officers including the CEO follows.
13
Base Salary
The base salary component is based, in most instances, on an equal
weighting of market data from both utility and general industry sources. An
executive officer's base salary is expected to remain relatively flat, in the
absence of increased responsibilities, increased compensation levels for
comparable positions or other circumstances deemed by the Committee to justify
an increase. Each year an executive officer's base salary is evaluated in light
of available compensation surveys and market data and the executive's current
responsibilities. The Committee approved base salary increases in 1995 for two
of the five Named Executive Officers based on recommendations approved by the
CEO for positions other than his that took into account increased job
responsibilities in one instance and increased compensation levels for
comparable positions. The 1995 base salary of the CEO did not increase over that
in effect for 1994.
Annual Incentive Cash Compensation
The Company's Management Incentive Compensation Plan (the "MICP")
provides annual incentive cash compensation opportunities to officers and key
employees of the Company and its subsidiaries (including the Named Executive
Officers) by creating performance award pools associated with the achievement of
corporate goals. The goals associated with the threshold, target and maximum
funding levels for each performance award pool under the MICP are established by
the Committee, based upon objective measures of corporate performance. For 1995,
the goals established by the Committee for the performance award pools in which
each of the Named Executive Officers was a participant were based upon return-
on-equity goals for the Company's principal operating subsidiaries. The
Committee considers the projections and assumptions contained in the relevant
annual profit plan in establishing threshold, target and maximum funding level
return-on-equity goals for each performance award pool. Executive officers
having responsibility primarily for a single operating subsidiary were assigned
to subsidiary performance award pools having goals based solely on that
subsidiary's return on equity. Executive officers having Company-wide
responsibilities were assigned to the holding company performance award pool
whose goals were a composite of weighted, operating subsidiary return-on-equity
goals. The Committee explicitly retains discretion to take into account, in
determining if performance goals were met, whether assumptions contained in the
relevant profit plan were in fact valid, and if they were not, to make
appropriate adjustments to reported financial results for purposes of computing
goal achievement levels ("assumption adjustments").
Performance award pool funding levels typically are based upon a
mathematical function of pool participants' target annual incentive cash
compensation opportunity (expressed as a percentage of base salary) and the pool
goal level achieved. The Committee may exercise its discretion in approving the
amount of the award pool and the specific amount of the annual incentive cash
compensation to be paid to executive and other key officers from the appropriate
pools based upon the Committee's subjective evaluation of the officer's overall
contributions to the Company. The Committee takes into account recommendations
of the CEO in approving annual incentive cash compensation for individual
executive and key officers (other than the CEO).
The 1995 annual incentive compensation targets for the Named Executive
Officers (other than the CEO) ranged from 35% to 45% of base salary and were not
changed from the 1994 targets. The CEO's 1995 target annual incentive
compensation was 50% of his base salary and also was not changed from 1994. The
amounts contained in the bonus column of the Summary Compensation Table for the
Named Executive Officers (other than the CEO) for 1995 are the result of the
Committee's determination that 1995 results exceeded the MICP return-on-equity
threshold, target or maximum goals of the Named Executive Officers. The amount
contained in the bonus column of the Summary Compensation Table for the CEO for
1995 is the result of the Committee's determination that the 1995 results
exceeded the holding company's MICP return-on-equity target goals. His goals
were based upon Florida Power's return on equity, weighted 75%, and a composite
return on equity of certain Company non-utility subsidiaries, weighted 25%. The
amounts contained in the bonus column for all the Named Executive Officers were
the result of the application of a mathematical formula converting the goal
levels achieved, which were above threshold levels, into dollar amounts, without
the Committee making any discretionary adjustments.
14
Long-Term Incentive Compensation
To facilitate executive stock ownership and align the interest of key
executives with that of the Company's other shareholders in the long-term growth
and performance of the Company, the Committee awarded in 1995 the Named
Executive Officers the opportunity to earn Common Stock through the grant of
performance shares under the Company's LTIP, as indicated in the table appearing
on page 11. To date, under the LTIP, the Committee has granted performance
shares for six consecutive three-year performance cycles beginning with the
1991-1993 performance cycle. To the extent earned, performance shares are
converted into shares of Common Stock. Two- thirds of the Common Stock earned is
restricted for periods of time (see footnotes 2 and 4 to the Summary
Compensation Table). While restricted, such stock is subject to forfeiture upon
termination of employment and thus is not vested. As a result, and subject to
certain exceptions (e.g. death, disability, retirement or change in control), an
LTIP participant would not realize the full economic benefit of his award unless
he remains an employee for two years after the end of the period for which it is
earned. Thus, a portion of an LTIP participant's total compensation for any year
remains at risk for almost five years thereafter. The Committee believes that
the phased vesting of LTIP awards helps retain key executives for the long term,
while enabling participants to realize the economic benefit of a portion of
their awards within the year after they are earned.
The return-on-equity goals for the 1993-1995 performance cycle of the
LTIP were established, in accordance with the administration policies adopted by
the Committee in 1993, to be the sum of the three annual MICP return-on-equity
goals for the three years in the relevant performance cycle (the "Cycle III
goals"). The goal weighting used in the MICP is also used for the LTIP goals.
The payouts listed in the Long-Term Compensation column of the Summary
Compensation Table for the Named Executive Officers on page 10 for the 1993-1995
performance cycle are the result of (i) the Committee's determination that the
results exceeded the Cycle III goals, after taking into account assumption
adjustments to 1993 results relating to the increase in the corporate federal
income tax rate and costs recorded in 1993 for the Company's early retirement
programs and (ii) the application of a mathematical formula converting the goal
level achieved into the number of performance shares earned and adding dividend
equivalents on shares earned for the period of the performance cycle. The CEO's
LTIP payout was based on Florida Power's return on equity, weighted 75%, and a
composite return-on-equity of certain Company non-utility subsidiaries, weighted
25%.
During 1995, the Committee approved the number of performance shares
granted to each Named Executive Officer (other than the CEO) for the 1995-1997
performance cycle that had a value on the date of grant equal to 35%, 40% or 45%
of 1995 base salary, depending on the total compensation opportunity established
by the Committee for each executive. There were no changes in the percentages
from the previous performance cycle for those officers. For the CEO, the number
of performance shares granted for the 1995-1997 performance cycle had a value on
the date of grant equal to 70% of his 1995 base salary. This percentage was
increased from the previous performance cycle to reflect increased compensation
levels for comparable positions.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code would deny the Company a
deduction for compensation paid to each Named Executive Officer in a taxable
year to the extent it exceeds $1 million per officer, unless the compensation
qualifies as "performance based compensation." The Committee approved an
amendment to the Company's MICP in 1994 that provides for the mandatory deferral
of annual cash incentive compensation which would not qualify for a Company tax
deduction due to Section 162(m) of the Internal Revenue Code until such time as
it becomes deductible.
Respectfully submitted,
Clarence V. McKee, Chairman Richard A. Nunis
Willard D. Frederick, Jr. Jean Giles Wittner
Vincent J. Naimoli
15
Company Performance
The following graph compares the Company's performance, as measured by
the change in price of its Common Stock plus reinvested dividends, with the
Standard & Poor's ("S&P") 500 stock index and the S&P Electric Companies stock
index for the five years ended December 31, 1995:
[GRAPH]
1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------------------------------------------------------------
Florida Progress 100 131 145 159 151 190
- -----------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 100 130 140 155 157 215
- -----------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's Electrics 100 130 138 155 135 177
* $100 invested on 12/31/90 in stock or index -- including
reinvestment of dividends. Fiscal year ending december 31.
Relationship with Independent Accountants
The firm of KPMG Peat Marwick LLP, which has been the Company's
independent certified public accountants since February 2, 1990, was recommended
by the Audit Committee and approved
16
by the Board of Directors as the Company's auditor for the year ended
December 31, 1995. Representatives of KPMG Peat Marwick are expected to be
present at the Annual Meeting, will have the opportunity to make a statement if
they desire to do so and are expected to be available to respond to appropriate
questions.
The Company has not yet selected its independent auditors for the
current year. The Audit Committee presently intends to make its recommendation
concerning the Company's auditors no later than August 1996, in accordance with
past practice.
Shareholder Proposal
It is the intention of the persons named in the accompanying proxy,
unless otherwise directed, to vote all proxies AGAINST the following shareholder
proposal. The shareholder proposal will be approved if the votes cast for the
proposal by holders of the shares represented at the Annual Meeting and entitled
to vote exceeds the votes cast against the proposal.
Joseph E. Deddo, 2935 E. Buck Court, Inverness, Florida 34452, a holder
of 114 shares of the Company's Common Stock, hereby notifies the Company of his
intention to present the following proposal for action at the Annual Meeting:
NOW, THEREFORE BE IT RESOLVED that the shareholders request the Board
of Directors to adopt a policy that requires annual salary increases
for executive officers that are greater than 4% of their prior year's
salary to be approved by a vote of the shareholders.
SHAREHOLDER'S SUPPORTING STATEMENT
Entitlements such as high executive salary must be controlled to better
benefit the Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS
PROPOSAL
FOR THE FOLLOWING REASONS
The Company believes that decisions concerning compensation of its
executive officers should remain the responsibility of the Company's Board of
Directors. It is the Board's philosophy that arbitrarily restricting executive
pay would be an unwise policy. The Board believes it needs to retain flexibility
to establish and modify compensation levels in order to attract and retain the
executive talent needed to lead the Company in a changing industry that is also
becoming increasingly more competitive.
Specifically, executive pay is set by the Board's Compensation
Committee, which is comprised of five outside directors. The committee's goal is
to establish target compensation levels that are appropriate in light of current
executive pay levels. The committee examines compensation data from several
independent sources. Such data provides guidance for committee members by giving
comparisons of executive pay at other similar-sized companies.
In recent years, the Compensation Committee has decided to tie an
executive's pay more closely to Company performance by using three components:
base salary, annual incentive compensation and long-term incentive awards. If
certain goals are not met, the executives' compensation falls below the target
levels. This places a significant portion of an executive's total compensation
at risk.
17
The Compensation Committee believes this kind of "pay- for-performance"
system, as measured by specific goals, is a fair way to structure an executive
compensation plan. It rewards executives for accomplishing financial and
operational targets, which benefit the entire Company and its shareholders. This
also helps protect Company assets and build long-term shareholder value.
ACCORDINGLY, THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL
1997 Shareholder Proposals
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received for inclusion in the proxy statement and form of proxy
relating to that meeting on or before November 1, 1996. Proposals should be sent
to the Secretary of the Company, Florida Progress Corporation, P.O.
Box 33042, St. Petersburg, Florida 33733.
General
The Board of Directors does not know of any other matters which will
come before the Annual Meeting. In the event that any other matters properly
come before the Annual Meeting, the persons named in the form of proxy intend to
vote all proxies in accordance with their judgment on such matters.
Enclosed is the Annual Report of the Company for the year ended
December 31, 1995. It is not to be regarded as proxy soliciting material.
By order of the Board of Directors,
Kenneth E. Armstrong
Vice President, General Counsel and Secretary
18
EXHIBIT "A"
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS OF
FLORIDA PROGRESS CORPORATION AND SUBSIDIARIES
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption. The Board of Directors of Florida Progress Corporation, a
Florida corporation (the "Company"), has adopted this Stock Plan for
Non-Employee Directors of Florida Progress Corporation and Subsidiaries (the
"Plan"), effective January 1, 1996, subject to approval of the Plan by the
Company's shareholders at the annual meeting of shareholders to be held in 1996.
1.2 Purpose. The Plan is designed to more closely align the interests
of directors of the Company and its Approved Subsidiaries (as hereafter defined)
with the interests of the Company's shareholders through ownership of the
Company's common stock, no par value (the "Stock").
ARTICLE II -DEFINITIONS
2.1 "Approved Subsidiary" shall mean any affiliate or subsidiary of
the Company (a) which the Company's Board of Directors may from time to time
determine to bring under the Plan, and (b) whose own Board of Directors may also
approve the Plan. The Approved Subsidiaries are listed on Schedule A, attached
hereto, as such Schedule may be amended from time to time.
2.2 "Commission" shall mean the Securities and Exchange Commission.
2.3 "Committee" shall mean the Compensation Committee of the Company's
Board of Directors.
2.4 "Company" shall mean Florida Progress Corporation.
2.5 "Effective Date" shall mean January 1, 1996, subject to
shareholder approval of the Plan as required by Section 1.1 hereof.
2.6 "Exchange Act" shall mean the Securities and Exchange Act of 1934,
as amended.
2.7 "Fair Market Value" shall mean the average of the high and low
sale prices of the Stock, as published in the Wall Street Journal in its report
of New York Stock Exchange composite transactions, on the date such market value
is to be determined (or the average of the high and low sale prices on the
trading day immediately preceding such determination date if the Stock is not
traded on the applicable valuation date).
2.8 "Non-Employee Director" shall mean any person who (a) serves on
the Board of Directors of the Company or one or more Approved Subsidiaries on or
after January 1, 1996; (b) receives fees for his or her services; and (c) is not
an active employee of the Company or any subsidiary of the Company.
2.9 "Participant" shall mean each Non-Employee Director who meets the
requirements of Article III of the Plan.
2.10 "Plan" shall mean this Stock Plan for Non-Employee Directors of
Florida Progress Corporation and Subsidiaries, as amended from time to time.
2.11 "Plan Year" shall mean the calendar year.
2.12 "Progress Insider" shall mean any officer or director of the
Company or person who is directly or indirectly the beneficial owner of more
than ten percent of the Company's common stock, within the meaning of Section 16
of the Exchange Act.
19
2.13 "Retainer Fee" shall mean the retainer fee established by the
Board of Directors of the Company or an Approved Subsidiary payable quarterly in
arrears to a Non-Employee Director for service as a director, excluding any
meeting fees or compensation for other services performed at the request of such
Board of Directors and any reimbursement for expenses.
2.14 "Rule 16b-3" shall mean Rule 16b-3 under the Exchange Act, as such
Rule may be amended from time to time.
2.15 "Stock" shall mean the Company's common stock, no par value.
2.16 "Stock Issue Date" shall mean March 31, June 30, September 30 and
December 31 of each Plan Year.
ARTICLE III - ELIGIBILITY
3.1 Eligibility Requirements. Subject to the provisions of Section
3.2, each Non-Employee Director shall become a Participant in the Plan on the
effective date of his or her election to the Board of Directors of the Company
or any Approved Subsidiary.
3.2 Initial Plan Year. Notwithstanding the foregoing, for purposes of
the initial 1996 Plan Year, each Non-Employee Director elected as such prior to
the date of the annual meeting of shareholders to be held in 1996, who otherwise
satisfies the eligibility requirements of Section 3.1, shall become a
Participant in the Plan effective as of the Effective Date, subject to approval
of the Plan by the Company's shareholders as described in Section 1.1.
ARTICLE IV - TERMS AND CONDITIONS OF STOCK ISSUANCES
4.1 Stock Reserved for Issuance. The aggregate number of shares of
Stock that may be issued to Participants hereunder shall not exceed 150,000
shares, subject to adjustment pursuant to Section 4.7 hereof. The shares of
Stock issued under the Plan will be from the authorized but unissued shares of
common stock of the Company.
4.2 Issuance of Stock. Each Participant shall automatically receive
seventy-five percent (75%) of his or her Retainer Fee in Stock. Such Stock shall
be issued on a quarterly basis on March 31, June 30, September 30 and December
31 of each Plan Year (each, a "Stock Issue Date"). The total number of shares of
Stock to be issued on each Stock Issue Date shall be determined by the following
formula:
Shares of Stock = .75 x Retainer
FMV
where "Retainer" is the Retainer Fee payable to the Participant for services
rendered during the quarter ended March 31, June 30, September 30 or December
31, as the case may be; and "FMV" is the Fair Market Value of a share of Stock
on such March 31, June 30, September 30 or December 31. Only whole shares of
Stock shall be issued under the Plan; Participants will receive cash in lieu of
any fractional shares.
(b) Initial Plan Year. Notwithstanding the foregoing, for
purposes of the initial 1996 Plan Year, no Stock distributions shall be made
prior to receipt of the requisite shareholder approval under Section 1.1 hereof.
If the Plan is approved by the shareholders, the Stock for the quarter ended
March 31, 1996 will not be issued on March 31, 1996, but instead will be issued
on the date on which the annual meeting of shareholders is held in 1996; for
purposes of calculating the number of shares of Stock to be issued on that date,
the FMV in the formula above shall be the Fair Market Value of a share of Stock
on March 31, 1996. If the Plan is not approved by the shareholders, the Retainer
Fee otherwise payable in Stock will instead be paid in cash.
20
4.3 Compliance with Laws. Notwithstanding the foregoing, each issuance
of Stock hereunder shall be subject to the requirement that, if at any time
counsel to the Company shall determine that the Stock is required to be listed,
registered or qualified upon any securities exchange or under any state or
Federal law, or the consent or approval of any governmental or regulatory body
is necessary as a condition of, or in connection with, the issuance of Stock
hereunder, such issuance may not be completed in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
completed or obtained on conditions acceptable to the Committee.
4.4 Book-Entry or Certificates. The registrar for the Company shall
make an appropriate book entry on its records evidencing that any Stock issued
hereunder has been duly issued as of the appropriate date; provided, however,
that a Participant may at any time elect to receive a stock certificate
representing all or a portion of the number of whole shares of Stock issued to
such Participant under the Plan.
4.5 Effect of Certain Changes in Capitalization. In the event of any
recapitalization, stock split, reverse stock split, stock dividend,
reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange, or other corporate transaction or event affecting the Stock, the
Committee shall equitably adjust the maximum number or class of shares of Stock
available under the Plan, and the number or class of shares of Stock to be
delivered to Participants.
4.6 Death, Resignation, Retirement or Removal. In the event of a
Participant's death, or if a Participant shall resign, retire or be removed as a
Non-Employee Director, all accrued Retainer Fees then owed such Participant
(prorated as appropriate) shall be paid to such Participant on the next
succeeding Stock Issue Date, in cash or in Stock in accordance with the terms
hereof.
4.7 Dividend Reinvestment. Participants who receive Stock under the
Plan may elect to have the cash dividends on all or a portion of their shares
automatically reinvested in additional shares of Stock, by enrolling in the
Company's Progress Plus Stock Plan or such other dividend reinvestment plan as
the Company shall make available from time to time.
ARTICLE V - RESTRICTIONS ON TRANSFER
5.1 No Assignment of Rights. Neither the Participant nor his or her
legal representative shall have any right to sell, assign, transfer or otherwise
convey the right to receive any Stock due hereunder or any interest under the
Plan. Any attempt to assign or transfer any right to payment or interest under
the Plan shall be null and void and of no effect.
5.2 Restrictions on Transfer of Stock. The Stock issued to Participants
under the Plan will not be restricted, except that any Progress Insider who
wishes to sell, assign, transfer, pledge, hypothecate or otherwise dispose of
any Stock acquired under the Plan will be subject to the provisions of Section
16 of the Exchange Act and Rule 16b-3 thereunder. The Stock issued to any
Progress Insider shall, if necessary, bear an appropriate restrictive legend, if
issued in certificated form, and be subject to appropriate "stop transfer"
orders. Any additional stock or other securities or property that may be issued
with respect to Stock issued under the Plan as a result of any stock dividend,
stock split, business combination or other event shall be subject to the
restrictions and other terms and conditions of the Plan.
ARTICLE VI - ADMINISTRATION OF PLAN
6.1 Administrator. The Plan shall be administered by the Committee,
which shall adopt such rules as it may deem appropriate in order to carry out
the purpose of the Plan. All questions of interpretation, administration and
application of the Plan shall be determined by the Committee, except that the
Committee may authorize any one or more of its members, or any officer of the
Company, to execute and deliver documents on behalf of the Committee. The
Committee shall take all steps necessary to ensure that the Plan complies with
the law at all times, and the determination of the Committee shall be final and
binding in all matters relating to the Plan.
21
6.2 Indemnification. The Company and each Approved Subsidiary shall
indemnify the members of the Committee against any and all claims, losses,
damages, expenses and liability arising from any action or failure to act in
connection with the administration of the Plan, except when the same is due to
gross negligence or willful misconduct. The Company and each Approved Subsidiary
may purchase at its own expense sufficient liability insurance to cover any and
all claims, losses, damages and expenses arising from any action or failure to
act in connection with the execution of the duties of the Committee.
ARTICLE VII - MISCELLANEOUS
7.1 Term and Termination; Amendment. This Plan shall become effective
on the Effective Date, and remain in effect until all shares authorized pursuant
to Section 4.1 hereof have been issued to Plan Participants, unless sooner
terminated as hereafter provided. The Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time by the Company's Board
of Directors; provided, however, that without the approval of the shareholders
of the Company entitled to vote thereon, no amendment may be made that would,
absent such shareholder approval, disqualify the Plan for coverage under Rule
16b-3; and provided further that the formula award provisions of the Plan may
not be amended more than once every six months unless such amendment is made in
order to comply with changes to either the Internal Revenue Code of 1986, as
amended, or the Employee Retirement Income Security Act of 1974, as amended, and
the rules thereunder. Notwithstanding the foregoing, no such amendment or
termination shall impair any rights to payments to which a Participant may be
entitled prior to the effective date of such amendment or termination.
7.2 Rights of Directors. Participation hereunder shall not be construed
as creating a right in any Participant to continued service or future service on
the Board of Directors of the Company or any Approved Subsidiary, and shall not
interfere with or limit in any way the right of the shareholders of the Company
or any Approved Subsidiary to remove any Participant from his or her position as
a director. Participation hereunder does not constitute an employment contract
between any Participant and the Company or any Approved Subsidiary.
7.3 Compliance with Rule 16b-3. With respect to Progress Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
that any provision of this Plan or action by the Committee fails to comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
7.4 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to the conflict
of laws provisions thereof, and only to the extent such laws are not otherwise
superseded by the laws of the United States.
22
Schedule A
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS OF
FLORIDA PROGRESS CORPORATION AND SUBSIDIARIES
Approved Subsidiaries
1. Florida Power Corporation
23
[LOGO]
FLORIDA PROGRESS CORPORATION
I M P 0 R T A N T
PROXY CARD BELOW
Your proxy card is attached below. Please follow these steps
1. Please clearly mark your voting selections.
2. Sign and date your card on the reverse side.
3. Please detach and return to us in the enclosed postage-paid envelope.
4. Please help us avoid the expense of follow-up mailings by completing
and returning your proxy card promptly.
(Tear here) (Tear here) (Tear here)
FLORIDA PROGRESS CORPORATION - Annual Meeting, April 18, 1996 -
Proxy solicited on behalf of the Board of Directors
The undersigned hereby appoints Jack B. Critchfield, Richard Korpan and Kenneth
E. Armstrong, and each of them, with power of substitution, proxies to
represent, and to vote all shares of Common Stock of Florida Progress
Corporation, which the undersigned is entitled to vote, at the Annual Meeting of
Shareholders to be held in St. Louis, Missouri, on April 18, 1996, at 9 a.m.
CDT, and at any and all adjournments thereof, and hereby revokes any prior
proxies given with respect to such stock, and the undersigned authorizes the
voting of such stock as follows:
1. Election of Class III Directors
Square FOR ALL Nominees Listed (except as Jack B. Critchfield
Box marked to the contrary) Clarence V. McKee, Esq.
1 INSTRUCTION: To withhold authority to Richard A. Nunis
vote for any individual nominee, strike Jean Giles Wittner
a line through the nominee's name in
the list to the right.
Square WITHHOLD AUTHORITY To Vote For All Nominees Listed.
Box
3
2. The Board of Directors recommends a vote "FOR" for the following Company
proposal:
FOR AGAINST ABSTAIN
Approve a Stock Plan for Non-Employee square square square
Directors of the Company and its box box box
Subsidiaries to require 75% of each 1 2 3
director's annual retainer be paid in
common stock to further align the interests
of shareholders and directors.
3. The Board of Directors recommends a vote "AGAINST" the following shareholder
proposal requesting the Board to:
FOR AGAINST ABSTAIN
Require shareholder approval of annual square square square
salary increases for executive officers box box box
greater than 4%. 1 2 3
(Please date and sign on reverse side.)
[LOGO]
FLORIDA PROGRESS CORPORATION
I M P 0 R T A N T
YOUR PROXY CARD IS BELOW
Your proxy card is attached below, please follow these steps:
1. Please clearly mark your voting selections on the reverse side.
2. Sign and date your card below.
3. Please detach and return to us in the enclosed postage-paid envelope.
4. Please help us avoid the expense of follow-up mailings by completing
and returning your proxy card promptly.
(Tear here) (Tear here) (Tear here)
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no contrary specification is made, this proxy
will be voted "FOR" the nominees listed in the Election of Class III Directors,
"FOR" the Stock Plan for Non-Employee Directors of Florida Progress Corporation
and Subsidiaries and "AGAINST" the Shareholder Proposal.
Dated.......................... 1996
...............................
(signature)
...............................
(signature)
When signing as attorney, executor
administrator, trustee or guardian,
please give title. For joint account,
each joint owner should sign. If the
signer is a corporation, please sign
full corporation name by duly
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
(Please mark, date, sign, detach and mail in the enclosed envelope.)
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
PAGE 16
Appearing above the table is a graph showing pictorially what is listed in the
table.