UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
FFLC BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
FFLC BANCORP, INC.
800 NORTH BOULEVARD, WEST
P.O. BOX 490420
LEESBURG, FLORIDA 34749-0420
(352) 787-3311
March 28, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of FFLC Bancorp, Inc. (the "Company") to be held on May 9, 2002, at the Leesburg
Community Building, 109 E. Dixie Avenue, Leesburg, Florida, at 2:00 p.m.
As described in the enclosed Proxy Statement, the election of two
directors, the approval of the 2002 Stock Option Plan and the ratification of
the appointment of auditors for fiscal 2002 are scheduled to be presented for
stockholder action at the Annual Meeting. There will also be a report on the
operations of First Federal Savings Bank of Lake County (the "Bank"), the
wholly-owned subsidiary of the Company. Detailed information concerning the
activities and operating performance of the Bank during the fiscal year ended
December 31, 2001, is contained in the 2001 Annual Report to Stockholders, which
accompanies the Proxy Statement. Directors and officers of the Company, as well
as representatives of the Company's independent auditors, will be present to
respond to any questions which stockholders may have.
The Board of Directors of the Company has determined that approval of
the matters to be considered at the meeting is in the best interests of the
Company and its stockholders. For the reasons set forth in the Proxy Statement,
the Board unanimously recommends a vote "FOR" each matter to be considered.
We hope you will be able to attend the Annual Meeting in person.
Whether or not you expect to attend, we urge you to sign, date and return the
enclosed proxy card so that your shares will be represented.
On behalf of the Board of Directors and all of the employees of the
Company and the Bank, I wish to thank you for your support and interest. I look
forward to seeing you at the Annual Meeting.
Sincerely,
/s/Stephen T. Kurtz
-------------------
Stephen T. Kurtz
President and Chief Executive Officer
FFLC BANCORP, INC.
800 NORTH BOULEVARD, WEST
P.O. BOX 490420
LEESBURG, FLORIDA 34749-0420
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 9, 2002
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ( the
"Annual Meeting") of FFLC Bancorp, Inc. (the "Company") will be held at the
Leesburg Community Building, 109 E. Dixie Avenue, Leesburg, Florida, on May 9,
2002, at 2:00 p.m. Eastern time.
A Proxy Statement and proxy card for the Annual Meeting are enclosed.
The Annual Meeting is being held for the purpose of considering and voting upon
the following matters:
1. The election of two directors for terms of three years, each;
2. The approval of the 2002 Stock Option Plan; and
3. The ratification of the appointment of Hacker Johnson & Smith
PA as independent auditors of the Company for the fiscal year
ending December 31, 2002; and
4. Such other matters as may properly come before the meeting,
and at any adjournments thereof.
Pursuant to the Bylaws of the Company, the Board of Directors has fixed
March 15, 2002, as the voting record date for determining stockholders entitled
to notice of and to vote at the Annual Meeting and any adjournments thereof.
Only holders of the common stock of the Company as of the close of business on
that date will be entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. In the event there are not sufficient votes for a quorum
or to approve or ratify any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned in order to permit further
solicitation of proxies by the Company. A list of stockholders entitled to vote
at the Annual Meeting will be available at 800 North Boulevard, West, Leesburg,
Florida, for a period of ten days prior to the Annual Meeting and will also be
available for inspection at the Annual Meeting.
By Order of the Board of Directors
/s/Sandra L. Rutschow
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Sandra L. Rutschow
Secretary
Leesburg, Florida
March 28, 2002
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE ANNUAL
MEETING, IS REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD WITHOUT
DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
FFLC BANCORP, INC.
800 NORTH BOULEVARD, WEST
P.O. BOX 490420
LEESBURG, FLORIDA 34749-0420
(352) 787-3311
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
May 9, 2002
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Solicitation and Voting of Proxies
This Proxy Statement is being furnished to stockholders of FFLC
Bancorp, Inc. (the "Company") in connection with the solicitation of proxies by
the Board of Directors for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held on Thursday, May 9, 2002, at 2:00 p.m., Eastern
time, at the Leesburg Community Building, 109 E. Dixie Avenue, Leesburg,
Florida, and at any adjournments thereof. The 2001 Annual Report to
Stockholders, containing the consolidated financial statements for the fiscal
year ended December 31, 2001, and a proxy card accompany this Proxy Statement
which is first being mailed to stockholders on or about March 28, 2002.
Regardless of the number of shares of common stock owned, it is
important that stockholders be represented by proxy or be present in person at
the Annual Meeting. Stockholders are requested to vote by completing the
enclosed proxy card and returning it, signed and dated, in the enclosed
postage-paid envelope. Stockholders are urged to indicate the way they wish to
vote in the spaces provided on the proxy card. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the directions given
therein. Where no instructions are indicated, signed proxies will be voted FOR
the election of each of the nominees for director named in this Proxy Statement
and FOR the ratification of Hacker Johnson & Smith PA as independent auditors
for the fiscal year ending December 31, 2001.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgement on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. However, if
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you are a stockholder whose shares are not registered in your own name, you will
need appropriate documentation from your recordholder to vote personally at the
Annual Meeting.
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Company. Proxies may also be solicited personally or by mail,
telephone, or telegraph by the Company's directors, officers and regular
employees, without additional compensation therefor. The Company will also
request persons, firms and corporations holding shares in their names, or in the
name of their nominees, which are beneficially owned by others, to send proxy
material to and obtain proxies from such beneficial owners, and will reimburse
such holders for their reasonable expenses in doing so.
Householding of Proxy Statements
The Securities and Exchange Commission recently adopted rules that
permit companies to mail a single proxy statement to two or more shareholders
sharing the same address--a practice known as "householding." Householding
provides greater convenience to shareholders and saves the Company money by
reducing excess printing costs. You may have been identified as living at the
same address as another Company shareholder. If this is the case and unless the
Company receives contrary instructions from you, we will continue to "household"
your proxy statement and annual report for the reasons stated above.
If you are a shareholder at a shared address to which a single copy of
both the proxy statement and the annual report have been delivered, Registrar
and Transfer Company, the Company's transfer agent, has undertaken to deliver a
separate copy of this proxy statement and the annual report to you promptly upon
written or oral request . If you are such a shareholder and you would like to
receive your own copy of this proxy statement and the annual report, please
contact Registrar and Transfer Company either by phone at (800) 368-5948, by fax
at (908) 497- 2318, by e-mail at info@rtco.com, or by mail at 10 Commerce Drive,
Cranford, New Jersey 07016-3572, and indicate that you are a shareholder at a
shared address and would like an additional copy of each document.
If, on the other hand, you are a multiple shareholder sharing an
address and are receiving multiple copies of this proxy statement, please
contact Registrar and Transfer Company at the phone number or address listed
above and all shareholders at the shared address can request that only a single
copy be mailed to your address in the future. If you are the beneficial owner,
but not the recordholder, of Company shares and wish to receive a copy of this
proxy, you will need to contact your broker and request that your broker send
you a copy of the proxy statement and the annual report.
If your shares are not registered in your own name, an intermediary
other than Registrar and Transfer Company may be responsible for "householding"
your proxy statement. If that is the case, and you want to obtain a separate
copy of the proxy statement and annual report, please contact Registrar and
Transfer Company either by phone at (800) 368-5948, by fax at (908) 497- 2318,
by e-mail at info@rtco.com, or by mail at 10 Commerce Drive, Cranford, New
Jersey 07016-3572, indicate that you are a shareholder at a shared address and
request an additional copy of each document. Since Registrar and Transfer has no
record of your stock ownership, it
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will be necessary for you to provide Registrar and Transfer Company with your
name and address and it will be necessary to identify who is the recordholder of
your shares.
If your shares and those of another shareholder sharing an address are
not registered in your own names, and you are receiving multiple copies of the
proxy statement and annual report, please contact your recordholder. All
shareholders at the shared address can request the record holder to mail only a
single copy to your address in the future.
Voting Securities
The securities which may be voted at this Annual Meeting consist of
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), with each share entitling its owner to one vote on each matter to be
voted on at the Annual Meeting, except as indicated below. There is no
cumulative voting for the election of directors.
The close of business on March 15, 2002, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. The total number of shares of the Company's Common Stock
outstanding on the Record Date (exclusive of Treasury shares) was 3,572,415
shares.
The presence, in person or by proxy, of at least a majority of the
total number of shares of Common Stock outstanding and entitled to vote (after
giving effect to the limitation described below, if applicable) is necessary to
constitute a quorum at the Annual Meeting. In the event there are not sufficient
votes for a quorum, or to approve or ratify any matter being presented, at the
time of the Annual Meeting, the Annual Meeting may be adjourned in order to
permit the further solicitation of proxies.
In accordance with the provisions of the Company's Certificate of
Incorporation, record holders of Common Stock who beneficially own in excess of
10% of the outstanding shares of Common Stock (the "Limit") are not entitled to
any vote with respect to the shares held in excess of the Limit. A person or
entity is deemed to beneficially own shares owned by an affiliate of, as well as
persons acting in concert with, such person or entity. The Company's Certificate
of Incorporation authorizes the Board of Directors (i) to make all
determinations necessary to implement and apply the Limit, including determining
whether persons or entities are acting in concert, and (ii) to demand that any
person who is reasonably believed to beneficially own stock in excess of the
Limit supply information to the Company to enable the Board to implement and
apply the Limit.
As to the election of Directors, the proxy card being provided by the
Board of Directors enables a shareholder to vote "FOR" the election of the
nominees proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for one or
more of the nominees being proposed. Under Delaware law and the Company's
Certificate of Incorporation and Bylaws, directors are elected by a plurality of
votes cast, without regard to either (i) broker non-votes, or (ii) proxies as to
which authority to vote for one or more of the nominees being proposed is
withheld.
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As to other matters that may properly come before the Annual Meeting,
by checking the appropriate box, a shareholder may: (i) vote "FOR" the item;
(ii) vote "AGAINST" the item; or (iii) ABSTAIN from voting on such item. Under
the Company's Certificate of Incorporation and Bylaws, other matters shall be
determined by a majority of the votes cast affirmatively or negatively, without
regard to (a) broker non-votes, or (b) proxies marked "ABSTAIN" as to that
matter unless otherwise required by law.
Proxies solicited hereby will be returned to the Company, and will be
tabulated by inspectors of election designated by the Board, who will not be
employed by, or be a director of, the Company or any of its affiliates.
Participants in the Bank's ESOP
If you participate in the First Federal Savings Bank of Lake County
Employee Stock Ownership Plan and 401(k) Plan (the "KESOP"), you will receive a
voting authorization form that reflects all shares you may vote under this plan.
Under the terms of the KESOP, all shares held by the KESOP are voted by the
trustee, but each participant in the KESOP may direct the trustee as to the
manner in which shares of Company common stock allocated to each participant's
account are to be voted. Allocated shares for which no voting instructions are
received will be voted by the trustee in the same proportion as shares for which
the trustee has received voting instructions. The deadline for returning your
voting instructions to the trustee is April 19, 2002.
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of five percent of the Company's
Common Stock are required to file certain reports regarding such ownership with
the Company and with the Securities and Exchange Commission ("SEC"), in
accordance with the Securities Exchange Act of 1934 (the "Exchange Act"). The
following table sets forth information regarding persons known to be beneficial
owners of more than five percent of the Company's outstanding Common Stock as of
March 15, 2002.
Amount and Nature
Name and Address of Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
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Common Stock First Federal Savings Bank of 367,239 10.28%
Lake County Employee Stock
Ownership and 401(k)Plan(1)
800 North Boulevard, West
Leesburg, Florida 34748
Common Stock First Manhattan Co. (2) 237,003 6.63%
437 Madison Avenue
New York, New York 10022
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(1) A committee of management has been appointed by the Board of Directors
(the "Retirement Committee") to administer the KESOP, and the Bank of
New York, an unaffiliated corporation, serves as trustee for the KESOP
(the "KESOP Trustee"). The KESOP Trustee must vote all allocated shares
held in the KESOP in accordance with the instructions of the
participating employees. As of the record date, all shares of the
Common Stock in the KESOP had been allocated.
(2) The information furnished is derived from a Schedule 13G filed by the
First Manhattan Co. on February 14, 2002, and a Schedule 13D filed by
First Manhattan Co. on October 29, 1996, as the general partner of
First Save Associates, L.P.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors currently consists of eight directors and is
divided into three classes. Each of the eight members of the Board of Directors
of the Company also serves on the Board of Directors of First Federal Savings
Bank of Lake County (the "Bank"). Directors are elected for classified terms of
three years, each, with the term of office of only one class of directors
expiring in each year. Directors serve until their successors are elected and
qualified.
The names of the two nominees for election to the Board of Directors
are set forth below, along with certain other information concerning such
individuals and the other members of the Board as of March 15, 2002. Management
believes that such nominees will stand for election and will serve if elected as
directors. However, if any person nominated by the Board of Directors fails to
stand for election or is unable to accept election, the proxies will be voted
for the election of such other person as the Board of Directors may recommend.
Unless authority to vote for the directors is withheld, it is intended that the
shares represented by the enclosed proxy card, if executed and returned, will be
voted FOR the election of all nominees proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED
IN THIS PROXY STATEMENT.
Information with Respect to the Nominees, Continuing Directors and Executive
Officers
The following table sets forth, as of March 15, 2002, the names of the
nominees, the continuing directors, and the named executive officers of the
Company as well as their ages; a brief description of their recent business
experience, including present occupations and employment; certain directorships
held by each; the year in which each became a director of the Bank and the year
in which his term as director of the Company expires. This table also sets forth
the amount of Common Stock and the percent thereof beneficially owned as of the
Record Date by each director and all directors and executive officers as a group
as of the Record Date.
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Shares of
Expiration Common Ownership
Name and Principal of Stock as
Occupation at Present Director Term as Beneficially a Percent of
and for Past Five Years Age Since(1) Director Owned(2)(6) Class
----------------------- --- -------- -------- ----------- -----
Nominees:
James P. Logan 53 1990 2002 48,770(4) 1.34%
A director of the Bank. President and
owner of Logan Sitework Contractors,
Inc., a firm primarily involved in the
residential construction industry.
Ted R. Ostrander, Jr. 53 1995 2002 19,573(4) *
A director of the Bank. President of
Lassiter-Ware, Inc., an insurance
agency.
Continuing Directors:
Claron D. Wagner 70 1987 2003 69,382(4) 1.91%
A director of the Bank and President,
Woody Wagner, Inc. Former partner
in Wagner Construction Company.
Paul K. Mueller 50 1993 2003 108,070 2.97%
Mr. Mueller was first employed by
the Bank in 1979. He became Senior
Vice President and Treasurer of the
Bank in 1985 and Executive Vice
President in 1997. He also serves as a
director of the Bank.
Joseph J. Junod 65 1987 2003 33,674(4) *
A director of the Bank, Mr. Junod
retired in 1991 as the general manager
of Avesta Sheffield Pipe, Wildwood,
Florida.
Howard H. Hewitt 64 2000 2004 28,342(3)(4) *
Mr. Hewitt is the President and CEO
of Hewitt Contracting Company, Inc.,
a highway and heavy construction
company which builds highways,
bridges and utilities and is engaged in
land development.
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Shares of
Expiration Common Ownership
Name and Principal of Stock as
Occupation at Present Director Term as Beneficially a Percent of
and for Past Five Years Age Since(1) Director Owned(2)(6) Class
----------------------- --- -------- -------- ----------- -----
H.D. Robuck, Jr. 54 1997 2004 49,019(4) 1.35%
Mr. Robuck is a practicing attorney
and the Chief Executive Officer of
Romac Lumber Company, a Lake
County based supplier of construction
materials.
Stephen T. Kurtz 48 1990 2004 103,530 2.84%
Mr. Kurtz was first employed by the
Bank in 1978. He became President
and Chief Executive Officer in 1988.
He also serves as a director of the
Bank.
Executive Officer
Who Is Not A Director
Sandra L. Rutschow 62 - - 34,013(5) *
Secretary and Vice President of the
Bank and Secretary of the Company.
All directors and executive 494,373 13.58%
officers as a group (nine persons)
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*Does not exceed 1.0% of the Company's Common Stock.
(1) Includes years of service as a director of the Company's predecessor, the
Bank.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting or dispositive power as to shares reported.
(3) Includes 1,343 shares to Director Hewitt as a result of his election as a
Director on June 1, 2000.
(4) Includes 20,138 options granted to each Outside Director, serving on
January 4, 1994, under the FFLC Bancorp, Inc. 1993 Stock Option Plan for
Outside Directors, all of which became immediately exercisable upon the
date of grant (January 4, 1994), 2,368 options remaining (of 5,035 granted
to) Director Ostrander on January 26, 1995 upon his election as a director,
and 5,035 options granted to Director Robuck on December 31, 1997, upon his
election as a director.
(5) Includes options for 10,475 shares granted to Mrs. Rutschow which became
exercisable January 4, 1995.
(6) Includes a total of 50,314 options granted to three outside directors under
the FFLC Bancorp, Inc. 1993 Stock Option Plan for Outside Directors, which
are currently exercisable and includes a total of 10,475 options granted
under the FFLC Bancorp, Inc. 1993 Incentive Stock Option Plan to one
executive officer which are currently exercisable.
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Meetings of the Board of Directors and Committees of the Board of the Company
The Board of Directors of the Company conducts its business through
meetings of the Board and through the activities of its committees. The Board of
Directors of the Company meets monthly and may have additional meetings as
needed. The Board of Directors of the Company, held 12 meetings in 2001. All of
the directors of the Company attended at least 75% in the aggregate of the total
number of the Company's board meetings held and committee meetings on which such
director served during fiscal 2001. The Board of Directors of the Company
maintains committees, the nature and composition of which are described below:
The Executive Committee consists of all members of the Board of
Directors. The purpose of this Committee is to review matters pertaining to
day-to-day operations, including review of operational policies and procedures
and loan approval. During fiscal 2001, this Committee met 12 times.
The Audit Committee consists of three outside Directors of the Company,
Messrs. Logan (Chairman), Ostrander and Junod. This Committee meets with the
Bank's independent auditors, and evaluates policies and procedures relating to
auditing functions and internal controls. This Committee held five meetings in
fiscal 2001.
The Nominating Committee is not a standing committee but is convened as
needed with director members appointed by the Chairman. While the committee will
consider nominees recommended by stockholders, it has not actively solicited
recommendations from stockholders. Nominations by stockholders must comply with
certain procedural and informational requirements set forth in the Company's
Bylaws. See "Advance Notice of Business to be Conducted at an Annual Meeting."
The Nominating Committee met on February 7, 2002.
In 2001, the Compensation Committee of the Company consisted of
Directors Junod, Wagner, Logan, Ostrander, Robuck and Hewitt and is responsible
for the 2002 Compensation Committee Report on Executive Compensation. The
Committee establishes compensation for the chief executive officer and reviews
compensation for other officers and employees and the profit sharing program,
when necessary. The Compensation Committee met four times during 2001.
Directors' Compensation
Fees. Directors do not receive fees from the Company for services on
the Company's Board. In 2001, the monthly retainer for service on the Board of
Directors of the Bank was $900. Directors are paid additional fees of $200 per
member for attendance at meetings of the Bank's Executive Committee held on days
other than when the Board of Directors meets and $75 for Audit Committee, Loan
Committee and Bylaws Committee meetings. Messrs. Kurtz and Mueller, officers of
the Company, do not receive fees for serving as directors of the Company.
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1993 Stock Option Plan for Outside Directors. The Company maintains the
FFLC Bancorp, Inc., 1993 Stock Option Plan for Outside Directors (the
"Directors' Option Plan"). The Directors' Option Plan provides that each outside
director serving on the Board of Directors as of the effective date of the plan
and each subsequent outside director appointed or elected to the Board will be
granted an option to purchase 5,035 shares of Company common stock. All options
granted under the Directors' Option Plan expire upon the earlier of 20 years
following the date of grant or one year following the date the optionee ceases
to be a Director for any reason other than removal for cause.
Recognition and Retention Plan for Outside Directors. The Bank
maintains the First Federal Savings Bank of Lake County Recognition and
Retention Plan for Outside Directors (the "Directors' RRP"). The Directors' RRP
provides that each outside director serving on the Board as of the effective
date of the plan and each subsequent outside director will receive a stock award
for 2,014 shares of restricted Company common stock (if available under the
plan). The Awards vest in three equal annual installments commencing 15 months
after the effective date of the award. Awards are nontransferable and
nonassignable. Mr. Hewitt became an outside director on May 25, 2000 and was
awarded 2,014 shares of restricted Company common stock on June 1, 2000.
Executive Compensation
The report of the compensation committee and the stock performance
graph shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 (the "Securities Act") or the Securities Exchange Act of
1934 (the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Compensation Committee Report on Executive Compensation. Under rules
established by the Securities and Exchange Commission ("SEC"), the Company is
required to provide certain data and information in regard to the compensation
and benefits provided to the Company's Chief Executive Officer and other
executive officers of the Company. The disclosure requirements for the Chief
Executive Officer and other executive officers include the use of tables and a
report explaining the rationale and considerations that led to fundamental
executive compensation decisions affecting those individuals. In fulfillment of
that requirement, the Compensation Committee, at the direction of the Board of
Directors, has prepared the following report for inclusion in this proxy
statement.
The Compensation Committee is made up of all outside directors of the
Company and is responsible for determining annual compensation levels for the
Chief Executive Officer, the Executive Vice President and Treasurer and the
Senior Vice Presidents. The Compensation Committee also is responsible for
determining the amount to be contributed to the Bank's profit sharing plan,
which is distributed to all full-time employees who have completed at least one
year of service.
9
The Compensation Committee generally meets three times each year. In
December, the Compensation Committee reviews management recommendations for
officer compensation. The Compensation Committee determines salary levels after
reviewing published surveys of compensation paid to executives performing
similar duties with institutions of comparable asset size and geographic
location. Specifically, the Committee utilizes the salary survey of the Florida
Bankers Association, the survey of America's Community Bankers and the SNL
Executive Compensation Review. In addition, the Compensation Committee considers
available executive compensation data of other local, publicly traded financial
institutions. In making those compensation decisions, the Compensation Committee
also considers the earnings and condition of the Bank, the contribution of each
executive officer to the success of the Bank and the results of any supervisory
examination of the Bank. At the meeting held on December 28, 2001, and, based
upon the criteria listed above, the Compensation Committee increased the salary
of Stephen T. Kurtz, the President and Chief Executive Officer, from $180,000 to
$187,200, an increase of 4%. At that same meeting, the salary of Paul K.
Mueller, Executive Vice President and Treasurer was increased from $146,000 to
$151,840, also a 4% increase.
The Compensation Committee also meets in June and in November to
consider funding of the Bank's profit sharing plan. The profit sharing plan is
generally funded based upon the overall profitability of the Bank with profit
sharing plan distributions made in June and December. All full-time personnel
with at least one year of service are eligible to participate in the profit
sharing plan. Distribution of funds to employees under the profit sharing plan
is based upon salary and job performance.
Compensation Committee of the Company
Claron D. Wagner
James P. Logan
Joseph J. Junod
Ted R. Ostrander, Jr.
H.D. Robuck, Jr.
Howard H. Hewitt
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Stock Performance Graph. The following graph shows a comparison of
cumulative total shareholder return on the Company's Common Stock, based on the
market price of the Common Stock assuming reinvestment of dividends, with the
cumulative total return of companies in the Nasdaq National Market and Nasdaq
Savings Institution Stocks for the period beginning on December 31, 1996 through
December 31, 2001.
[GRAPHIC-GRAPH DEPICTING DATA POINTS LISTED BELOW]
FFLC Bancorp, Inc.
Total Return Performance
Period Ending
------------------------------------------------------------
Index 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
- -----------------------------------------------------------------------------------
FFLC Bancorp, inc. 100.00 171.69 130.76 125.84 126.71 182.60
NASDAQ - Total US* 100.00 122.48 172.68 320.89 193.01 153.15
NASDAQ Bank Index* 100.00 167.41 166.33 159.89 182.38 197.44
SNL NASDAQ Bank Index 100.00 172.74 178.27 171.27 197.73 215.22
*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2002. Used with permission. All rights
reserved. crsp.com
11
Summary Compensation Table. The following table sets forth the cash
compensation paid by the Bank, for services rendered during the fiscal years
ended December 31, 2001, 2000 and 1999, to the Chief Executive Officer and to
the Executive Vice President and Treasurer , who were the only executive
officers to receive compensation in salary and profit sharing in excess of
$100,000 in the fiscal year ended December 31, 2001.
Annual Compensation
--------------------------------
All Other
Name and Principal Compensation
Position Year Salary ($) Bonus ($) (1)(2)
- ------------------------------- -------- --------------- -------------- -----------------
Stephen T. Kurtz 2001 $180,010 $27,429 $ 18,269
President, Chief Executive 2000 156,755 28,140 34,637
Officer and Director 1999 142,506 23,132 33,207
Paul K. Mueller 2001 $146,001 $23,487 $18,223
Executive Vice President, 2000 132,855 21,021 29,884
Treasurer and Director 1999 123,016 20,238 29,057
- ----------------------------------
(1) Includes employer matching contributions under the 401(k) Plan of $10,200
and $10,169 for Messrs. Kurtz and Mueller.
(2) Includes $8,069 and $8,054 which represents the value of allocations made
under the Bank's ESOP for Messrs. Kurtz and Mueller, respectively.
Employment Agreements. The Bank and the Company have entered into
employment agreements with Mr. Stephen T. Kurtz and Mr. Paul K. Mueller. The
employment agreements provide for a three-year term of employment that extends
on a daily basis until either the executive, the Bank or the Company provides
written notice of non-renewal, at which time the term of the agreements becomes
fixed at three years. Under the employment agreements, the base salary for each
executive is reviewed annually by the Board of Directors of the Bank. In
addition to the base salary, the employment agreements provide for, among other
things, participation in various employee benefit plans and stock-based
compensation programs, as well as furnishing fringe benefits available to
similarly-situated executive personnel.
The employment agreements provide for termination by the Company and
the Bank for cause, as defined in the employment agreements, at any time. If the
Company or the Bank chooses to terminate the Mr. Kurtz's or Mr. Mueller's
employment for reasons other than for cause, or if Mr. Kurtz or Mr. Mueller
resigns from the Company or the Bank after specified circumstances that would
constitute constructive termination, then the executive or, if he dies, his
beneficiary, would be entitled to receive a sum equal to the remaining payments
due on the agreement, including base salary, profit sharing and contributions
that would have been made on executive's behalf to any employee benefit plans of
the Bank and the Company during the remaining term of his employment agreement.
The Company would also continue and/or pay for executive's life, medical, dental
and disability coverage for the remaining term of the employment agreement. The
employment agreements restrict Mr. Kurtz's and Mr. Mueller's
12
right to compete against the Bank or the Company for a period of one year from
the date of termination of the agreement if executive's employment is terminated
without cause, except if termination follows a change in control.
Under the agreements, if voluntary or involuntary termination follows a
change in control of the Bank or the Company (as defined in the agreements),
executive or, in the event of his death, executive's beneficiary would be
entitled to a severance payment or liquidated damages, or both, in a sum equal
to three times the average of the three preceding taxable years' "annual
compensation" (as defined in the agreements). The Bank or the Company would also
continue the executive's life, medical, dental and long-term disability coverage
for thirty-six months. Even though both the Bank and Company employment
agreements provide for a severance payment if a change in control occurs, the
executives would not receive duplicative payments or benefits under the
agreements.
The maximum present value of the severance benefits under the
employment agreement's is 2.99 times executive's average annual compensation
during the five-year period preceding the effective date of the change in
control (the "base amount"). The agreements also provide for continued coverage
under the Bank's life, medical, dental and long-term disability programs for a
36-month period following a change in control.
All reasonable costs and legal fees paid or incurred by the executives
under any dispute or question of interpretation relating to the employment
agreements shall be paid by the Bank or Company, respectively, if executive is
successful on the merits in a legal judgment, arbitration or settlement. The
employment agreements also provide that the Bank and Company shall indemnify Mr.
Kurtz and Mr. Mueller to the fullest extent legally allowable.
The following table provides certain information with respect to the
number of shares of Common Stock acquired on exercise of stock options and the
value realized thereon and the number of shares of Common Stock represented by
outstanding stock options held by the Named Executive Officers as of December
31, 2001. Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any such existing
stock options and the price of the Common Stock as of the end of the fiscal year
on December 31, 2001.
13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Securities
Underlying Unexercised
Shares Options at Fiscal Year End Value of Unexercised In-the-Money
Acquired on Value (#) Options at Fiscal Year End ($)(1)
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ ------------ ------------------------- -------------------------
Stephen T. Kurtz 13,000 168,350 0 0
Paul K. Mueller 11,400 149,490 0 0
- --------------------------
(1) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on December 31, 2001, less the
option exercise price. Options are in-the-money if the market value of the
shares covered by the options is greater than the exercise price.
Compliance with Section 16 of the Exchange Act
Section 16(a) of the Securities and Exchange Act requires the Company's
executive 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
and the National Association of Securities Dealers, Inc., and to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that all filing requirements
applicable to its executive officers, directors and 10% stockholder were met
during 2001.
Transactions with Related Persons
Federal regulations generally require that loans or extensions of
credit to executive officers and directors must be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with the general public and must not involve
more than the normal risk of repayment or present other unfavorable features. In
addition, loans made to a director or executive officer in excess of the greater
of $25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
must be approved in advance by a majority of the disinterested members of the
board of directors.
Except as hereafter indicated, the Bank currently makes loans to its
executive officers and directors on the same terms and conditions offered to the
general public. All loans made by the Bank to its executive officers and
directors are made in the ordinary course of business, on substantially the same
terms, including collateral, as those prevailing at the time for comparable
14
transactions with other persons and do not involve more than the normal risk of
collectibility or present other unfavorable features.
In accordance with applicable regulations, the Bank extends credit to
its directors and executive officers pursuant to a benefit program that is
widely available to employees of the Bank and does not give preference to any
executive officer or director over other employees of the Bank. Set forth below
is certain information relating to loans in excess of $60,000 made to executive
officers and directors which were outstanding at December 31, 2001.
Balance as of
Date of Loan or Original December 31,
Name Modification Amount 2001 Note Rate Market Rate
- ---------------------- ------------------ --------------- ---------------- -------------- ---------------
Stephen T. Kurtz 12/07/90 $125,000 $86,500 7.125% 7.625%
Ted R. Ostrander 06/28/91 $300,000 $260,697 6.375% 6.875%
07/05/94 $112,000 $85,297 7.250% 7.750%
James P. Logan 10/14/93 $160,000 $99,294 6.25% 6.50%
Paul K. Mueller 12/31/99 $100,000 $81,606 6.75% 7.00%
H.D. Robuck, Jr. 2/12/99 $259,795 $235,903 6.375% 6.50%
H. D. Robuck, Jr., a director of the Company is the owner and President
of H. D. Robuck, Jr., P.A., an attorney representing the Company. In 2001, the
Company paid H.D. Robuck, Jr., P.A., legal fees aggregating $56,416. Ted R.
Ostrander, Jr., a director of the Company, is the President of Lassiter-Ware,
Inc., an insurance agency. In 2001, the Company paid $127,714 in insurance
premiums through the agency to the insurance companies Mr. Ostrander represents
as agent.
Report Of the Audit Committee
The Audit Committee of the Board of Directors is responsible for
assisting the Board in fulfilling its responsibility to the shareholders
relating to corporate accounting, reporting practices and the quality and
integrity of the financial reports of the Company. Additionally, the Audit
Committee selects the auditors and reviews their independence and their annual
audit. The Audit Committee is comprised of 3 directors, each of whom is
independent under the Nasdaq's listing standards. The Audit Committee acts under
a written charter adopted by the Board of Directors.
15
The Audit Committee reviewed and discussed the annual financial statements
with management and the independent accountants. As part of this process,
management represented to the Audit Committee that the financial statements were
prepared in accordance with generally accepted accounting principles. The Audit
Committee also received and reviewed written disclosures and a letter from the
accountants concerning their independence as required under applicable standards
for auditors of public companies. The Audit Committee discussed with the
accountants the contents of such materials, the accountant's independence and
the additional matters required under Statement on Auditing Standards No. 61.
Based on such review and discussions, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial statements in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001 for
filing with the Securities and Exchange Commission.
James P. Logan, Chairman
Ted R. Ostrander, Jr.
Joseph J. Junod
Proposal 2 -- Approval of 2002 Stock Option Plan
The Board of Directors has adopted the 2002 Stock Option Plan, subject to
approval by the Company's stockholders. A copy of the 2002 plan is attached to
the proxy statement as Appendix A. The 2002 plan will supplement the Company's
existing stock option plans.
As of March 15, 2002, 308,475 shares of the Company's common stock had
been issued pursuant to the exercise of stock options under the existing plans,
118,115 shares were subject to outstanding, unexercised options granted under
the existing plans and 33,713 shares were available for additional stock option
grants.
The ability to grant stock options in the future both to attract people of
experience and ability and to retain existing key managers is critical to
sustain the Company's continued growth and success. The granting of stock
options advances the interests of the Company and its stockholders by providing
employees, directors and third-party consultants, upon whose judgment,
initiative and efforts the successful conduct of the business of the Company
largely depends, with additional incentive in the form of a proprietary interest
in the Company to perform in a superior manner. Furthermore, the Company's Board
of Directors believes that the granting of stock options can be very effective
over time and can be an important component of the Company's overall
compensation strategy. In order to continue to be able to retain key employees,
the Company must have the ability to offer market competitive long-term
compensation opportunities. Stock options, because of their upside potential,
are a key component in retaining employees. For these reasons, the Company
wishes to continue its stock option program.
16
Summary of the Plan
Type of Stock Option Grants and Participants. The 2002 plan provides for
the grant of non-statutory stock options to employees, third-party consultants
and non-employee directors of the Company and its affiliates and for the grant
of incentive stock options to employees.
Number of Shares of Common Stock Available. A total of 250,000 shares of
common stock are authorized for issuance under the 2002 plan. Those shares may
come from either authorized but unissued shares or shares held in treasury.
Amendment of the Plan. The Board of Directors has the authority to amend
or terminate the 2002 plan, provided such action does not adversely affect any
option previously granted under the 2002 plan. The stockholders, however, must
approve any amendment that would materially: (1) increase the benefits accruing
to participants under the plan; (2) increase the total number of shares that may
be issued under the plan; or (3) modify the eligibility requirements.
Administration of Plan and Grants of Stock Options. The 2002 plan is
administered by a committee of the Board of Directors of the Company. The
committee has the power to decide: (1) who will be granted options; (2) the
number of shares underlying each option; (3) the date or dates when each option
will vest in whole or in part and the terms and conditions of vesting; and (4)
any other terms and conditions of an option, so long as those other terms and
conditions are not inconsistent with the 2002 plan. The committee's
determinations and interpretations of the 2002 plan and the options granted
under the 2002 plan are final and binding upon all 2002 plan participants. All
options granted under the 2002 plan will be granted at not less than 100% of the
fair market value of the Company's common stock on the date of grant. No
incentive option shall have a term of longer than ten years from the date of
grant.
Effect of Termination of Employment or Service. If a participant's
employment or service is terminated, he or she may exercise his or her options
for the period of time specified in the optionee's award agreement.
Effect of a Change in Control. The 2002 plan provides that if a change in
control (as defined in the plan) occurs, regardless of an optionee's termination
of employment or service, all outstanding options will become and remain
immediately exercisable for the full term of the options.
Transferability. The 2002 plan generally does not allow for the transfer
of options, except if specified in a written will of an optionee or by the laws
of descent and distribution. However, under limited circumstances, non-statutory
stock options may be transferred for valid estate planning purposes.
Certain Federal Income Tax Consequences. The following brief description
of the tax consequences of stock option grants under the 2002 plan is based on
federal income tax laws currently in effect and does not purport to be a
complete description of such federal income tax consequences.
17
The grant of a non-statutory stock option is not a taxable event. However,
upon the exercise of a non-statutory stock option, an optionee will recognize
ordinary income equal to the difference between the option exercise price and
the fair market value of the Company common stock on the date of exercise,
multiplied by the number of shares purchased upon exercise of the option. The
Company will receive a tax deduction equal to the ordinary income recognized by
the optionee. Employees exercising non-statutory stock options are subject to
federal, state and local (if any) tax withholding on the option income. Outside
Directors and third-party consultants are not subject to tax withholding.
The grant of an incentive stock option is not a taxable event, nor is the
exercise of an incentive stock option, if an optionee does not dispose of the
common stock acquired upon exercise for a period of two years from the date of
grant or one year following the date of exercise. If the optionee disposes of
the shares prior to the expiration of the required holding periods, the optionee
will have a disqualifying disposition and will recognize ordinary income equal
to the difference between the option exercise price and the fair market value of
the Company common stock on the date of exercise, multiplied by the number of
shares purchased upon exercise of the option. In such a case, the Company will
receive a tax deduction equal to the ordinary income recognized by the optionee.
Currently the Internal Revenue Service does not require tax withholding on
disqualifying dispositions.
New Plan Benefits
The Company anticipates that option grants will primarily be made to
employees and non-employee directors after the effective date of the 2002 plan,
as deemed appropriate. As of the date of this proxy statement, no specific
determinations have been made regarding any future grants under the plan at this
time.
The Board of Directors recommends that you vote "FOR" the approval of the
2002 Stock Option Plan.
PROPOSAL 3. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's financial statements as of December 31, 2000 and 2001 and
for each of the years in the three-year period ended December 31, 2001 were
audited by Hacker Johnson & Smith PA.
The Company's Board of Directors has reappointed Hacker Johnson & Smith
PA to continue as independent auditors for the Bank and the Company for the year
ending December 31, 2002, subject to ratification of such appointment by the
stockholders.
18
A representative of Hacker Johnson & Smith PA will be present at the
Annual Meeting, will be given an opportunity to make a statement if so desired
and will be available to respond to appropriate questions from stockholders
present at the Annual Meeting.
Unless marked to the contrary, the shares represented by the enclosed
Proxy, if executed and returned, will be voted FOR ratification of the
appointment of Hacker Johnson & Smith PA as the independent auditors of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF HACKER JOHNSON & SMITH PA AS THE INDEPENDENT AUDITORS OF THE
COMPANY.
ADDITIONAL INFORMATION
Stockholder Proposals
To be considered for inclusion in the Company's proxy statement in
connection with the annual meeting of stockholders to be held following fiscal
year ending December 31, 2001, a stockholder proposal must be received by the
Secretary of the Company, at the address set forth on the first page of this
Proxy Statement, no later than December 1, 2001. Any shareholder proposal
submitted to the Company will be subject to SEC Rule 14a-8 under the Exchange
Act.
Advance Notice of Business to be Conducted at an Annual Meeting
The Bylaws of the Company provide an advance notice procedure for
certain business, or nominations to the Board of Directors, to be brought before
an annual meeting. In order for a stockholder to properly bring business before
an annual meeting, or to propose a nominee to the Board, the stockholder must
give written notice to the Secretary of the Company not less than ninety (90)
days before the date fixed for such meeting; provided, however, that in the
event that less than one hundred (100) days notice or prior public disclosure of
the date of the meeting is given or made, notice by the stockholder to be timely
must be received not later than the close of business on the tenth day following
the day on which such notice of the date of the Annual Meeting was mailed or
such public disclosure was made. The notice must include the stockholder's name,
record address, and number of shares owned by the stockholder, and describe
briefly the proposed business, the reasons for bringing the business before the
Annual Meeting, and any material interest of the stockholder in the proposed
business. In the case of nominations to the Board, certain information regarding
the nominee must be provided. Nothing in this paragraph shall be deemed to
require the Company to include in its proxy statement and proxy relating to an
annual meeting any stockholder proposal which does not meet all of the
requirements for inclusion established by the SEC in effect at the time such
proposal is received.
19
Other Matters which may Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy card to vote the shares represented thereby on such matters in accordance
with their best judgment.
INDEPENDENT AUDITORS
The independent public accounting firm of Hacker Johnson & Smith PA has
acted as the independent auditors of the Company and the Bank for 2001 and it is
anticipated that the same firm will be selected to perform the same duties for
2002 for the Company and the Bank. A representative of the firm will be
available to respond to appropriate questions at the Annual Meeting of the
Stockholders.
Audit Fees
Hacker Johnson & Smith PA billed the Company aggregate fees of $67,000
for professional services rendered for the audit of the Company's annual
consolidated financial statements and for the reviews of the condensed
consolidated financial statements included in the Company's Forms 10-Q for the
year ended December 31, 2001.
Financial Information Systems Design and Implementation Fees
Hacker Johnson & Smith PA did not provide any such services to the
Company for the year ended December 31, 2001.
Audit Committee Determination
The Audit Committee of the Board of Directors has considered and
determined that the independent auditor's provision of other non-audit services
to the Company is compatible with maintaining the auditor's independence.
Please Return Your Proxy Card.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are present at the Annual
Meeting and wish to vote your shares in person, your proxy may be revoked by
voting at the Annual Meeting.
20
A copy of the Form 10-K (without exhibits) for the year ended December
31, 2001, as filed with the SEC, will be furnished without charge to
stockholders of record upon written request to FFLC Bancorp, Inc., Ms. Sandra L.
Rutschow, Secretary, P.O. Box 490420, Leesburg, Florida 34749-0420. The Form
10-K can also be accessed through the Bank's World-Wide Web Internet Site at
"http://www.1stfederal.com".
By Order of the Board of
Directors
/s/Sandra L. Rutschow
---------------------
Sandra L. Rutschow
Secretary
Leesburg, Florida
March 28, 2002
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
21
APPENDIX A
FFLC BANCORP, INC.
2002 STOCK OPTION PLAN
FFLC BANCORP, INC. (the "Company") has adopted this STOCK OPTION PLAN
for the following purposes:
o to make it easier to attract able persons to become Outside Directors,
employees and third-party consultants of the Company, and
o to provide an additional inducement for Outside Directors, employees
and third-party consultants to remain with the Company.
Certain capitalized terms used in this Plan are defined in Section 14.
1. WHO IS ELIGIBLE; WHO MAKES GRANTS?
----------------------------------
(a) Eligibility. Employees, Outside Directors and third-party
consultants of the Company are eligible to receive stock
option grants under this Plan.
(b) Plan Administration. The Plan will be administered by either
the entire Board of Directors of the Company or a committee
composed of two or more disinterested directors (the
"Committee"). A member of the Board is deemed to be
"disinterested" only if he or she satisfies the requirements
as the Securities and Exchange Commission may establish for
Outside Directors administering plans intended to qualify for
an exemption under Rule 16b-3 (or its successor) under the
Securities Exchange Act of 1934, as amended.
The Committee has the power to decide:
(i) who will be granted stock options;
(ii) the number of shares to be covered by each stock
option;
(iii) the date or dates when each stock option will vest in
whole or in part and the terms and conditions of
vesting; and
(iv) any other terms and conditions subject to a stock
option, so long as those other terms and conditions
are not inconsistent with this Plan.
The Committee's determinations and interpretations of this
Plan and the Options granted hereunder are final and binding
upon all Plan participants.
(c) Confirmation of an Option Grant. Each Option grant
must be evidenced by a written award agreement. The
agreement must be in a form acceptable to the
Committee and executed by both a representative of
the Committee and the Optionee.
A-1
2. STOCK OPTIONS.
--------------
This Plan provides for the grant of Incentive Stock Options and
Non-Statutory Stock Options to employees, Outside Directors and
third-party consultants of the Bank and the Company. The terms and
conditions of each Option grant will be set forth by the Committee in
each Optionee's award agreement.
3. EXERCISE OF STOCK OPTIONS; PAYMENT.
(a) Time of exercise. The period of time during which each Option
may be exercised will be fixed by the Committee at the time of
grant. However, no Incentive Stock Option may be exercised
more than 10 years after the Date of Grant.
(b) How to exercise. To exercise an Option, an Optionee must
complete an Option Exercise Notice and return it to the
Committee or the Committee's designee.
(c) Payment of the Option Price in cash or Common Stock.
(i) Cash payment. All or any portion of the Option Price
for any Option may be paid in cash or a certified
check at the time of exercise.
(ii) Other forms of payment. The Committee may, from time
to time, specify other methods of payment that may be
used to exercise Options, including a "cashless"
exercise procedure or the use of mature shares of
Common Stock as payment.
4. DETERMINATION OF FAIR MARKET VALUE.
-----------------------------------
(a) Public market. If the Common Stock is listed on a generally
recognized United States securities exchange or is listed in
the National Association of Securities Dealers Automated
Quotations System ("NASDAQ"), Fair Market Value shall mean the
average of the bid and ask prices of the Common Stock as
reported by NASDAQ (as published by the Wall Street Journal,
if published) on the effective date of the grant, or if the
Common Stock was not traded on such date, on the next
preceding day on which the Common Stock was traded.
(b) No public market. If the Common Stock is not so listed, then
Fair Market Value on any day will be determined by the
Committee in good faith, using such criteria as the Committee
may believe appropriate.
5. TRANSFERABILITY
---------------
No Incentive Stock Option may be transferred except, after the death of
the Optionee, by the will of the Optionee or by the laws of descent and
distribution in intestacy proceedings. As long as the Optionee is
alive, only the Optionee may exercise the Option. After the death of
the Optionee, the Option may be exercised under the will of the
A-2
Optionee, or by the laws of descent and distribution in intestacy
proceedings, as provided in paragraph (f) of Section 6 of this Plan.
Unless otherwise determined by the Committee, no Non-statutory Stock
Option may be transferred except, after the death of the Optionee, by
the will of the Optionee or by the laws of descent and distribution in
intestacy proceedings. The Committee may, however, in its sole
discretion permit transferability or assignment of a Non-statutory
Stock Option if such transfer, or assignment is, in its sole
discretion, for valid estate planning purposes and such transfer or
assignment is permitted by the Code and Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
6. TERMINATION OF EMPLOYMENT OR SERVICE.
-------------------------------------
(a) Quit. Unless otherwise determined by the Committee, if a
person's service with the Bank or Company terminates because
of the voluntary resignation of such person, all unvested
Options held by such person on the date of such termination
(the "Termination Date") will immediately and automatically be
canceled as of the Termination Date and may not be exercised.
Vested Options may be exercised within 90 days of the
Termination Date, but only to the extent such Options were
vested and could have been exercised on the date the
resignation is effective.
(b) Termination for Cause. Unless otherwise determined by the
Committee, if a person's service with the Bank or the Company
terminates because such person is dismissed with Cause (as
defined below) or, in the case of an Outside Director, such
person is removed from office for Cause, all vested and
unvested Options held by such person on his or her Termination
Date will immediately and automatically be canceled as of the
Termination Date and may not be exercised.
For purposes of this Plan, a participant is terminated or
removed for Cause if his or her termination or removal results
from the participant's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or material breach of
any provision of any employment agreement between the Company
or the Bank and the participant.
(c) Termination Without Cause. Unless otherwise determined by the
Committee, if a person's service with the Bank terminates
because such person is dismissed without Cause, or because
such person resigns at the written request of the Bank or the
Company, all unvested Options held by such person on his or
her Termination Date will immediately and automatically be
canceled as of the Termination Date and may not be exercised.
Vested Options may be exercised within 90 days of the
Termination Date, but only to the extent such Options were
vested and could have been exercised on the Termination Date.
(d) Disability. Unless otherwise determined by the Committee, if a
person's service with the Bank or the Company is terminated
because such person has become disabled (within the meaning of
Section 22(e)(3) of the Code), then all Options held by such
A-3
person on his or her Termination Date immediately vest and
remain exercisable for a period of two (2) years after the
Termination Date. Any Option originally designated as an
Incentive Stock Option will be treated as a Non-Statutory
Stock Option if exercised more than one (1) year after the
Termination Date.
(e) Retirement. Unless otherwise determined by the Committee, if a
person's service is terminated because such person has retired
under any retirement plan of the Bank or the Company or under
any retirement policy established with respect to Board
members, all vested Options held by such person on his or her
Termination Date may be exercised by such person at any time
within one (1) year after the Termination Date, but only to
the extent that the Options could have been exercised on the
day before the Termination Date. Any Option originally
designated as an Incentive Stock Option will be treated as a
Non-Statutory Stock Option if exercised more than three (3)
months after the Termination Date.
(f) Death. Unless otherwise determined by the Committee, if a
person's service with the Bank or the Company is terminated
because of the death of such person, all Options held by such
person on the date of his or her death immediately vest and
remain exercisable by the person's estate or designated
beneficiary for a period of two (2) years after his or her
death. Any Option originally designated as an Incentive Stock
Option will be treated as a Non-Statutory Stock Option if
exercised more than one (1) year after an Optionee's death.
7. SPECIAL PROVISIONS FOR A CHANGE IN CONTROL.
-------------------------------------------
(a) Acceleration of options upon a Change in Control. If a Change
in Control occurs, then all Options held by Optionees under
this Plan which are outstanding on the date of the Change in
Control will become and remain immediately exercisable in full
for the remainder of the term of such Options, regardless of
the Optionee's termination of employment or service, or any
provision to the contrary in this Plan or in an Option award
agreement.
(b) Change in Control. For purposes of this Plan, a Change in
Control shall mean an event of a nature that: (i) would be
required to be reported in response to Item 1(a) of the
current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"); or (ii) results in a Change in
Control of the Institution or the Company within the meaning
of the Home Owners' Loan Act of 1933, as amended, the Federal
Deposit Insurance Act, and the Rules and Regulations
promulgated by the Office of Thrift Supervision (or its
predecessor agency), as in effect on the date hereof
(provided, that in applying the definition of change in
control as set forth under the rules and regulations of the
OTS, the Board shall substitute its judgment for that of the
OTS); or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (A) any
"person" (as the term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
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indirectly, of voting securities of the Bank or the Company
representing 20% or more of the Bank's or the Company's
outstanding voting securities or right to acquire such
securities except for any voting securities of the Bank
purchased by the Company and any voting securities purchased
by any employee benefit plan of the Company or the Bank, or
(B) individuals who constitute the Board on the date hereof
(the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board, or whose nomination for
election by the Company's stockholders was approved by a
Nominating Committee solely composed of members which are
Incumbent Board members, shall be, for purposes of this clause
(B), considered as though he were a member of the Incumbent
Board, or (C) a plan of reorganization, merger, consolidation,
sale of all or substantially all the assets of the Bank or the
Company or similar transaction occurs or is effectuated in
which the Bank or Company is not the resulting entity;
provided, however, that such an event listed above will be
deemed to have occurred or to have been effectuated upon the
receipt of all required federal regulatory approvals not
including the lapse of any statutory waiting periods, or (D) a
proxy statement has been distributed soliciting proxies from
stockholders of the Company, by someone other than the current
management of the Company, seeking stockholder approval of a
plan of reorganization, merger or consolidation of the Company
or Bank with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to
such plan or transaction are exchanged for or converted into
cash or property or securities not issued by the Bank or the
Company shall be distributed, or (E) a tender offer is made
for 20% or more of the voting securities of the Bank or
Company then outstanding.
8. SHARES AVAILABLE UNDER THIS PLAN: ADJUSTMENTS FOR STOCK DIVIDENDS,
------------------------------------------------------------------
RECAPITALIZATIONS, ETC.
-----------------------
(a) Shares available for grant. Two hundred fifty thousand
(250,000) shares, subject to adjustment under paragraph (b)
below, are available for purchase upon the exercise of Options
granted under this Plan. If any Option granted under this Plan
is cancelled, terminates, or expires for any reason without
having been exercised in full, the number of unexercised
shares subject to the Option will again be available for the
grant of Options under this Plan. Payment of an Option Price
with shares will not increase the number of shares of Common
Stock available under this Plan.
(b) Adjustments for stock dividends, recapitalizations, etc. The
Committee is authorized to and may make adjustments to the
Option Price and number of securities covered by outstanding
Options as the Committee believes are equitable to preserve
the rights of Optionees after a stock dividend, stock split,
recapitalization, merger, division or other similar event, if
any occur in the future.
(c) No fractional shares. No adjustment under paragraph (b) above
will require the Company to issue a fraction of a share or
other security. Accordingly, all fractional shares or other
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securities which result from any such adjustment or
substitution will be eliminated and not carried forward to any
later adjustment or substitution.
9. NO RIGHT TO OPTIONS OR EMPLOYMENT
---------------------------------
Neither the adoption of this Plan, nor any action by the Committee,
will give any person:
(a) any right to be granted an Option, or
(b) any right to be employed by the Bank or the Company, or
(c) any right to serve on the Board of Directors of the Bank or
the Company, or
(d) any right to serve as a third-party consultant to the Bank or
the Company.
10. SPECIAL PROVISIONS FOR INCENTIVE STOCK OPTIONS.
-----------------------------------------------
The following provisions will apply to Options that are intended to be
Incentive Stock Options:
(a) Grant. Incentive Stock Options may only be granted to
employees of the Bank or the Company, not to Outside Directors
or and third-party consultants.
The aggregate Fair Market Value on the Date of Grant of the
shares covered by Incentive Stock Options which are first
exercisable by any person in any calendar year under all plans
of the Bank or Company and any predecessor of the Bank or
Company may not exceed $100,000 or any higher amount allowed
by law (including amounts resulting from changes in the Code)
under the requirements for treatment as Incentive Stock
Options.
(b) Option Price. The Option Price may not be less than 100% of
the Fair Market Value per share of the shares covered by the
stock option on the Date of Grant.
If an Incentive Stock Option is granted to a person who,
immediately before the grant, owned stock constituting more
than ten percent of the total combined voting power of all
classes of stock of the Company (a "Ten Percent Holder"), the
Option Price may not be less than 110% of the Fair Market
Value per share of the shares covered by the Option on the
Date of Grant. For purposes of this paragraph, a person will
be considered as owning not only shares of Common Stock owned
individually but also all shares that are at the time owned,
directly or indirectly, by or for the spouse, ancestors,
lineal descendants and brothers and sisters (whether by the
whole or half blood) of such person, and such person will also
be considered as owning proportionately any shares owned,
directly or indirectly, by or for any corporation,
partnership, estate or trust in which such person is a
shareholder, partner or beneficiary.
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(c) Exercise. Incentive Stock Options held by a Ten Percent Holder
may not be exercised more than five (5) years after the Date
of Grant.
(d) Adjustments. If any adjustment under paragraph (b) of Section
8 would cause any Incentive Stock Option to fail to continue
to qualify as an Incentive Stock Option under the Code, or
would be deemed a modification, extension or renewal of any
Incentive Stock Option, the Committee may adjust Incentive
Stock Options as the Committee in its discretion believes fair
under the circumstances and which will not result in any
disqualification, modification, extension or renewal of any
Incentive Stock Option.
If any such adjustment requires the approval of Company
stockholders in order to enable the Company to grant Incentive
Stock Options, then no such adjustment will be made without
stockholder approval.
(e) Disqualifying Disposition. In order to receive Incentive Stock
Option tax treatment under Section 422 of the Code, an
Optionee may not dispose of shares of Common Stock acquired
under an Incentive Stock Option grant (i) for two (2) years
from the Date of Grant and (ii) for one (1) year after the
date of exercise. In the event the required holding periods
are not met ("disqualifying disposition"), an Optionee must
notify the Committee.
11. EFFECTIVE DATE OF PLAN.
-----------------------
The Plan shall become effective upon approval of the Company's
stockholders.
12. AMENDMENT AND TERMINATION OF PLAN.
-----------------------------------
The Board may amend this Plan at any time and from time to time, or may
terminate this Plan at any time, except that approval of the Company_s
shareholders will be required for any amendment that (i) would
materially increase the benefits accruing to participants under the
Plan, (ii) would materially increase the total number of shares of
Common Stock or other securities as a percentage of the overall
ownership of the Company that may be issued under the Plan, or (iii)
would materially modify the requirements for eligibility to participate
in the Plan. No such termination will terminate or adversely affect any
outstanding Options granted under the Plan before such termination. No
such amendment of the Plan will adversely affect any outstanding Option
granted under the Plan before such amendment.
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13. MISCELLANEOUS.
--------------
(a) Withholding. Any person exercising an Option must make
arrangements satisfactory to the Company for the payment of
any withholding tax obligations relating to the exercise. The
Company will not be obligated to issue any Common Stock or to
make any payment under any Option until these withholding tax
obligations are satisfied.
(b) Stock Certificates. The Company will issue stock certificates
representing the shares purchased upon any exercise of
Options, as soon as practicable after exercise. Such
certificates will be registered as directed by the Optionee.
(c) Governing Law. This Plan, all Options granted under this Plan,
and all actions taken or omitted which relate to this Plan or
such Options, will be governed by the laws of the State of
Delaware to the extent not pre-empted by federal law.
14. DEFINITIONS.
------------
The following terms will have the following meanings, when used in this
Plan:
"Bank" means First Federal Bank of Lake County.
"Board" means the Board of Directors of the Company.
"Change of Control" is defined in Section 7.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock of the Company.
"Date of Grant" means the date on which the Committee grants an option
to a particular person.
"Fair Market Value" is defined in Section 4.
"Incentive Stock Options" means an Option qualifying as "incentive
stock options" under Section 422 of the Code.
"Non-Statutory Stock Option" means an Option that does not qualify as
an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Statutory Stock
Option granted to an employee or Outside Director of the Bank or the
Company.
"Optionee" means a participant in this Plan who has been granted an
Option.
"Option Price" means the price at with an Optionee can purchase shares
of Common Stock pursuant to an Option, with respect to an Option
granted under this Plan, no Option shall be granted at less than 100%
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of the Fair Market Value of the Common Stock underlying the Option on
the Date of Grant.
"Outside Director" means a member of the Board of Directors of the
Company or Bank who is not an employee of the Bank or the Company.
"Plan" means this FFLC Bancorp, Inc. 2002 Stock Option Plan, as it may
be amended from time to time.
APPROVED BY COMPANY BOARD OF DIRECTORS:
DATE: February 28, 2002 BY: /s/ Claron D. Wagner
--------------------
Claron D. Wagner
For the Entire Board of Directors
APPROVED BY STOCKHOLDERS OF THE COMPANY:
DATE: ____________________________ BY: ____________________________
Secretary
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[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
FFLC BANCORP, INC.
Annual Meeting of Stockholders
May 9, 2002 2:00 p.m.
The undersigned hereby appoints the official proxy committee, consisting of each
member of the Board of FFLC Bancorp, Inc. (the "Company"), each with full power
of substitution, to act as attorneys and proxies for the undersigned, and to
vote all shares of Common Stock of the Company which the undersigned is entitled
to vote only at the Annual Meeting of Stockholders, to be held at the Leesburg
Community Building, 109 E. Dixie Avenue, Leesburg, Florida, on May 9, 2002, at
2:00 p.m., and at any and all adjournments thereof, as follows:
1. The election as directors of both nominees listed (except as marked to the
contrary below): James P. Logan and Ted R. Ostrander, Jr.
With- For all
[ _ ] For [ _ ] hold [ _ ] Except
INSTRUCTION: To withhold authority to vote for one nominee, mark "Except" and
write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The approval of the 2002 Stock Option Plan.
With- For all
[ _ ] For [ _ ] hold [ _ ] Except
3. The approval of Hacker Johnson & Smith PA as the Company's independent
auditors for the fiscal year ending December 31, 2002.
With- For all
[ _ ] For [ _ ] hold [ _ ] Except
4. Such other matters as may properly come before the meeting, and at any
adjournment thereof.
With- For all
[ _ ] For [ _ ] hold [ _ ] Except
The above signed acknowledges receipt from the Company prior to the execution of
this proxy of a Notice of the Meeting and of a Proxy Statement dated March 28,
2002, as well as a copy of FFLC Bancorp's 2001 Annual Report.
The Board of Directors recommends a vote "FOR" each of the listed proposals.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
This proxy is revocable and will be voted as directed, but if no instructions
are specified, this proxy will be voted FOR each of the proposals listed. If any
other business is presented at the Annual Meeting, this proxy will be voted by
those named in this proxy in their best judgment. At the present time, the Board
of Directors knows of no other business to be presented at the Annual Meeting.
Please be sure to sign and date
this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card,sign, date and mail in postage paid envelope provided.
FFLC BANCORP, INC.
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign, but the signature of
one holder is sufficient, unless contested.
PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY
Stockholder Assistance
Stockholders requiring a change of address, records or information about lost
certificates or dividend checks should contact FFLC Bancorp's transfer agent:
Registrar and Transfer Company
10 Commerce Drive Cranford, New Jersey 07016 1-800-368-5948
IF YOUR ADDRESS HS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE EMVELOPE PROVIDED.
_________________________________________
_________________________________________
_________________________________________