REYNOLDS, SMITH AND HILLS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, JULY 24, 2001
To the Shareholders of
Reynolds, Smith and Hills, Inc.
The Annual Meeting of Shareholders of Reynolds, Smith and Hills, Inc. will
be held at the offices of the Company at 4651 Salisbury Road, Suite 400,
Jacksonville, Florida, 32256 on Tuesday, July 24, 2001 at 9:00 a.m., local time,
for the following purposes:
1. To elect seven Directors to serve until next year's Annual Meeting of
Shareholders and until their successors are elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the 2002 fiscal year; and
3. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Shareholders of record at the close of business on June 22, 2001 will be
entitled to vote at the meeting.
By Order of the Board of Directors,
/s/David K. Robertson
- ---------------------
David K. Robertson
Secretary
Jacksonville, Florida
June 22, 2001
Whether or not you plan to attend the meeting, please execute and promptly
return the enclosed proxy in the envelope provided.
REYNOLDS, SMITH AND HILLS, INC.
4651 Salisbury Road, Suite 400
Jacksonville, Florida 32256
PROXY STATEMENT
This proxy statement and the accompanying form of proxy are being furnished
to shareholders in connection with the solicitation of proxies by the Board of
Directors of Reynolds, Smith and Hills, Inc. (the Company) for use at its Annual
Meeting of Shareholders to be held on Tuesday, July 24, 2001. This proxy
statement and accompanying form of proxy will be sent to the Company's
shareholders on or about June 22, 2001.
The shares represented by your proxy will be voted in accordance with your
directions if the proxy is properly signed and returned to us before the
meeting. Your proxy may be revoked by written request that is received by the
Secretary of the Company before the Annual Meeting. If you are attending the
Annual Meeting, you may revoke your proxy at the meeting by voting in person.
The cost of soliciting proxies will be paid by the Company and is expected
to be nominal. Officers and other employees of the Company may solicit proxies
personally or by telephone in certain instances in an effort to have a larger
representation at the meeting.
Shareholders of record at the close of business on June 22, 2001, will be
entitled to vote. On that date there were 457,080 outstanding shares of Common
Stock. Each share of Common Stock is entitled to one vote. Shares of Common
Stock allocated to the account of a participant in the Company's 401(k) Plan
will be voted by the trustee in accordance with the participant's voting
instructions. For each proposal to be considered at the Annual Meeting, the
holders of a majority of the outstanding shares of stock entitled to vote on
such matter at the meeting, present in person or by proxy, shall constitute a
quorum.
Proxies solicited hereby will be voted FOR each of the following proposals,
and in accordance with the discretion of the named proxies on other matters
properly brought before the Annual Meeting, unless a vote against a proposal or
abstention is specifically indicated.
PROPOSAL I.
ELECTION OF DIRECTORS
Directors are elected to serve until the Annual Meeting of Shareholders in
2002. The Board of Directors has no reason to expect that any of the following
nominees will be unable to stand for election, but in the event a vacancy among
the original nominees occurs prior to the Annual Meeting, the proxies will be
voted for a substitute nominee or nominees named by the Board of Directors and
for the remaining nominees.
The By-Laws of the Company provide that the Board of Directors shall be
comprised of at least one and not more than fifteen persons, as determined by
the Board of Directors. The Board has fixed the number of directors at seven.
2
The seven nominees who receive the greatest number of votes cast for the
election of directors at the meeting shall become directors at the conclusion of
the tabulation of votes. Abstentions, broker non-votes and withheld votes are
not counted in determining the number of votes cast for any nominee for
director.
Certain information concerning each nominee for director of the Company,
including their principal occupations for the past five or more years, is set
forth below:
Leerie T. Jenkins, Jr. Principal positions are Chairman of the Board and
Chief Executive Officer of the Company, which he has held since 1990. He holds a
Masters and Bachelors degree in Landscape Architecture from the University of
Michigan and University of Georgia, respectively. Age 52.
David K. Robertson. Principal positions are Chief Operating Officer, which
he has held since June 1999, Secretary, Treasurer, and Director of the Company,
which he has held since 1990. From 1990 to 1999, Mr. Robertson also held the
position of Chief Financial Officer. He graduated from Florida State University
with a degree in Business. Age 49.
J. Ronald Ratliff. Principal positions are Executive Vice President, to
which he was appointed in June 1999, and Director of the Company, which he has
held since June 1990. From 1990 to 1999, Mr. Ratliff served as Senior Vice
President of the Company. He holds a Masters degree in Urban and Regional
Planning, and Bachelors degrees in Geology and Urban and Regional Planning from
the University of South Florida. Age 52.
Darold F. Cole. Principal positions are Senior Vice President and Director
of the Company, which he has held since 1990. He graduated from Kansas State
University with a degree in Electrical Engineering. Age 59.
David E. Thomas, Jr. Director of the Company since 1992. His principal
occupation, to which he was appointed in May 2000, is Chairman and Chief
Executive Officer of Safety-Kleen Corporation. From 1996 to May 2000, Mr. Thomas
was Senior Managing Director and Head of Investment Banking of Raymond James and
Associates, Inc. Mr. Thomas joined Raymond James in 1987. He graduated from
Emory University with an MBA and Juris Doctorate degree. He also holds a
Bachelors degree in Business Administration from the University of Richmond. Age
44.
R. Ray Goode. Director of the Company since 1998. His principal occupation
is Vice President of Public Affairs of Ryder System, Inc. which he has held
since 1993. Prior to joining Ryder, Mr. Goode served as president and chief
executive officer of We Will Rebuild, a non-profit agency established to rebuild
Greater Miami in the aftermath of Hurricane Andrew. He graduated from
Pennsylvania State University with a Master of Public Administration degree. He
also holds a Bachelor of Arts degree in political science and English from the
University of Charleston, West Virginia. Age 64.
3
James W. Apthorp. Director of the Company since 1999. His principal
occupation, to which he was appointed in 2000, is Director of the Collins Center
for Public Policy at Florida State University in Tallahassee, FL. From 1997 to
1999 he was Chairman Emeritus of Atlantic Gulf Communities, a real estate
development firm. From 1992 to 1997 he held the position of Chairman of Atlantic
Gulf Communities. In these two positions, Mr. Apthorp represented that company
in public settings and consulted with senior management on all major corporate
issues. He graduated from Florida State University with a Bachelor of Science in
Government. Age 62.
The Board of Directors recommends a vote FOR the nominees set forth above.
OTHER INFORMATION
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of June 22, 2001, certain information
with respect to beneficial ownership of the Company's Common Stock by: (1) each
director and nominee for director, (2) each named executive officer, (3) any
person beneficially owning more than 5%, and (4) all of the directors and
executive officers of the Company as a group. Except as noted below, the Company
believes that each of the persons listed has sole investment and voting power
with respect to the shares included in the table.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, which deem a person to beneficially own any
shares the person has or shares voting or dispositive power over and any
additional shares obtainable within 60 days through the exercise of options,
warrants or other purchase rights. Shares of Common Stock subject to options,
warrants or other rights to purchase which are currently exercisable or are
exercisable within 60 days are deemed outstanding for purposes of computing the
percentage ownership of the persons holding such options, warrants or other
rights, but are not deemed outstanding for purposes of computing the percentage
ownership of any other person.
4
Number of Shares Percentage of
Name Beneficially Owned Outstanding Shares
---- ------------------ ------------------
Leerie T. Jenkins, Jr. (a)(b)(1) 78,500 17.0%
David K. Robertson (a)(b)(1) 33,500 7.3%
Kenneth R. Jacobson (a) (1) 2,400 .5%
Darold F. Cole (a)(b)(2) 29,400 6.4%
J. Ronald Ratliff (a)(b)(1) 40,700 8.9%
David E. Thomas, Jr. --- ---
R. Ray Goode --- ---
James W. Apthorp --- ---
Joseph J. Hartnett (3) 24,000 5.3%
Henry C. Luke, Jr. (4) 24,700 5.4%
Directors and Executive
Officers as a Group (8 persons) 184,500 39.2%
(a) Includes shares which may be purchased upon exercise of options which
are exercisable as of June 22, 2001 or become exercisable within 60
days thereafter, for the following individuals; Mr. Jenkins - 5,300;
Mr. Robertson - 2,700; Mr. Jacobson - 400; Mr. Cole - 2,200; Mr.
Ratliff - 2,400; all executive officers, directors, and beneficial
owners as a group - 13,000.
(b) Participants in the Company's 401(k) plan may elect to have any
portion of their plan balance invested in the Company's common stock.
The participant has both voting and dispositive control of such shares
which are held for the benefit of such participant by INVESCO
Retirement Plan Services, Inc., as trustee. The number of shares shown
includes shares held in the 401(k) plan as follows: Mr. Jenkins -
17,900; Mr. Robertson - 7,500; Mr. Cole - 8,200; Mr. Ratliff - 7,900;
all executive officers, directors, and beneficial owners as a group
41,500.
(1) 4651 Salisbury Road, Suite 400, Jacksonville, FL 32256
(2) 2235 N. Courtenay Pkwy, Suite C, Merritt Island, FL 32953
(3) 2700 S. Courtenay Pkwy, Merritt Island, FL 32952
(4) 345 Greencastle Drive, Jacksonville, FL 32225
Certain Relationships and Related Transactions
The Company has outstanding notes receivable from ten officers, totaling
$95,000. The group of officers includes the following executive officers: Leerie
T. Jenkins, Jr., David K. Robertson, Darold F. Cole, and J. Ronald Ratliff. The
loans, with interest at 8.5% per year, mature in 2006. Principal and interest
are paid biweekly.
Meetings of the Board of Directors and Committees
The Board of Directors held four meetings during fiscal year 2001. All of
the Directors attended at least 75% of the meetings of the Board of Directors
and the committees of the Board of which they were members.
5
The Board of Directors has delegated certain functions to the following
standing committees of the Board:
The Compensation Committee is responsible for setting and administering
executive officers' salaries and the annual bonus and long-term incentive plans
that govern the compensation paid to all senior managers of the Company. The
Compensation Committee is composed of Messrs. Apthorp, Goode and Thomas and held
four meetings during fiscal year 2001.
The Audit Committee's functions are to recommend for appointment by the
Board of Directors a firm of independent certified public accountants to act as
auditors for the Company and to meet with the auditors to review the scope,
preparation and results of the Company's audits, the Company's internal
accounting and financial controls and to consider such other matters relating to
the financial reporting process and safeguarding of the Company's assets as it
may consider appropriate. During fiscal year 2001, the Audit Committee met twice
and was composed of Messrs. Apthorp, Cole, Goode and Robertson. On June 13, 2001
Messrs. Cole and Robertson each resigned from the Audit Committee. As discussed
more fully below in the Audit Committee Report, the Audit Committee is now
comprised solely of Messrs. Apthorp and Goode, both of whom meet the applicable
definition of independence.
The Benefits Committee's functions are to review and make findings, reports
and recommendations to the Board of Directors regarding matters relative to
benefits plans, packages and/or programs for the Company's officers and
employees. The Benefits Committee held three meetings during fiscal year 2001
and is composed of Messrs. Cole, Ratliff, and Robertson.
The Nominating Committee's functions are to review and make recommendations
to the Board of Directors regarding the composition of the Board of Directors of
the Company. The Nominating Committee normally expects to be able to identify
from its own resources the names of qualified nominees, but it will accept from
shareholders recommendations of individuals to be considered as nominees. Any
such recommendations in connection with the 2002 Annual Meeting of Shareholders
should be submitted in writing to the Company, Attention: Corporate Secretary,
no later than February 20, 2002. The Nominating Committee did not hold any
meetings during fiscal year 2001 and is composed of Mr. Jenkins.
Directors Compensation
Non-employee directors receive an $8,000 annual fee and 300 shares of
Common stock of the Company for their service on the Board, plus $1,000 for each
Board meeting attended and $500 for each telephonic meeting attended.
Non-employee directors who serve on a board committee receive $500 per committee
meeting attended, and the committee chairman receives an additional $250 per
meeting. Officers of the Company do not receive any additional compensation for
serving as members of the Board or any of its committees.
6
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's executive officers, directors and persons who
beneficially own more than 10% of the Company's registered equity securities to
file with the Securities and Exchange Commission various forms reporting
information regarding their beneficial ownership. To the best of the Company's
knowledge, based on review of the copies of such forms furnished to the Company,
and written representations that no other forms were required, Section 16(a)
filing requirements were complied with during fiscal year 2001.
7
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth, for the Company's last three fiscal years
the compensation paid to the Chief Executive Officer and the four other most
highly compensated executive officers of the Company (the "named executive
officers") who earned more than $100,000 in the current fiscal year in all
capacities in which they serve.
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
LONG TERM
COMPENSATION
------------
ANNUAL AWARDS
------ ------
COMPENSATION
------------
NAME SECURITIES
AND UNDERLYING ALL OTHER
PRINCIPAL SALARY BONUS OPTIONS/ COMPEN-SATION
POSITION YEAR ($) ($) SARs (#) (1)($)
- ------------------------------------ ---- ------ ----- ---------- -------------
Leerie T. Jenkins, Jr. Chairman of 2001 296,000 140,000 --- 7,400
the Board and CEO 2000 250,000 50,000 1,100 6,200
1999 202,000 75,000 --- 3,800
David K. Robertson, COO, Executive 2001 214,000 83,000 --- 5,700
Vice President, Secretary, 2000 180,000 30,000 1,000 4,600
Treasurer, and Director 1999 149,000 44,000 --- 3,100
Kenneth R. Jacobson, CFO, 2001 173,000 20,000 --- 3,100
Executive Vice President, and
General Counsel
Darold F. Cole, Senior Vice 2001 124,000 29,000 --- 7,600
President and Director 2000 115,000 6,000 1,000 6,300
1999 107,000 7,000 --- 4,700
J. Ronald Ratliff, Exec. Vice 2001 176,000 64,000 --- 5,400
President and Director 2000 157,000 23,000 1,000 3,900
1999 133,000 31,000 --- 2,900
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) For 2001 includes: (a) the Company's matching contribution to the 401(k)
Plan which is applicable to all Plan participants (Mr. Jenkins $5,000;
Mr. Robertson $4,300; Mr. Jacobson $3,100; Mr. Cole $3,100; Mr. Ratliff
$3,200) and (b) premiums paid for supplemental term life insurance
policies in which the Beneficiary is named by the individual (Mr. Jenkins
$2,400; Mr. Robertson $1,400; Mr. Cole $4,500; Mr. Ratliff $2,200).
</FN>
8
Option Exercises and Fiscal Year-End Values
There were no options exercised by the named executive officers during the
last fiscal year. The following table sets forth information with respect to the
unexercised options held by the named executive officers as of the end of fiscal
year March 31, 2001.
AGGREGATED OPTIONS/SAR EXERCISES IN
LAST FISCAL YEAR AND
FISCAL YEAR END OPTIONS/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL AT FISCAL
YEAR END (#) YEAR END ($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE (1)
- ------------------------------- ------------- -----------------
Leerie T. Jenkins, Jr. 4,900/ 700 $10,700/$ -
David K. Robertson 1,900/1,900 5,900/4,000
Kenneth R. Jacobson 400/1,600 - / -
Darold F. Cole 1,600/1,700 4,800/3,200
J. Ronald Ratliff 1,700/1,800 5,300/3,600
(1) Represents the excess of the fair market value of the Common Stock of
$15.00 per share (the value determined in June of 2001 based on the
financial statements for the year ended March 31, 2001) above the exercise
price of the options.
9
Performance Graph
The graph below is a comparison of the Company's cumulative shareholder
returns on an indexed basis with the S&P 500 stock index and an industry peer
group over the period from April 1, 1996 to March 31, 2001.
COMPARISON FROM APRIL 1, 1996
TO MARCH 31, 2001 OF CUMULATIVE TOTAL SHAREHOLDER RETURN
AMONG THE COMPANY, S&P 500 INDEX AND PEER GROUP
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
3/96 3/97 3/98 3/99 3/00 3/01
- --------------------------------------------------------------------------------
RS&H $100 $122 $127 $130 $130 $148
- --------------------------------------------------------------------------------
S&P 500 $100 $117 $171 $199 $232 $180
- --------------------------------------------------------------------------------
PEER $100 $91 $126 $142 $116 $204
- --------------------------------------------------------------------------------
* Assumes a reinvestment of dividends and a $100 initial investment on April
1, 1996 in the Company, S&P 500 Index, and the Peer Group.
* For the year ended March 31, 2001 the members of the peer group are Michael
Baker Corp., Jacobs Engineering Group, Inc. and STV Group, Inc. The members
of the peer group were selected based on their similarity in business to
the Company.
* The Company's stock is not presently traded on any public stock exchange or
other public market. In constructing the performance graph, the Company
used the appraised value of the stock determined for purposes of setting
the price at which the Company's stock will be sold to and traded within
the Company's 401(k) plan. The appraised value of the stock was determined
by an independent valuation firm based on the current year's financial
statements. All purchases and trades within the Company's 401(k) plan after
receipt of a new appraisal are made at the new appraisal value. The
appraisal value does not necessarily represent the price at which a
shareholder could sell shares of the Company's stock.
10
COMPENSATION COMMITTEE REPORT
The Compensation Committee is composed of three non-employee directors. The
committee is responsible for setting and administering executive officer
salaries and the annual bonus and long-term incentive plans that govern the
compensation paid to all officers of the Company. The following report
represents the actions of the committee regarding compensation paid to the
executive officers during fiscal year 2001.
The Company's compensation programs are designed to link executives'
compensation to the performance of the Company and provide competitive
compensation for executives. The compensation plan consists of annual incentive
awards, long-term incentive awards, and equity-based incentives. Annual
incentive awards are granted based on current year corporate financial
performance and individual performance. Long-term incentive awards are based on
the Company's long-term profitability and return on capital. Equity-based
compensation is used to build shareholder value and motivate executive behavior
over the long-term. These types of compensation aid in attracting and retaining
the executive talent needed to ensure the continued success of the Company.
The compensation plan for the executives of the Company is comprised of two
elements: (1) an annual component, i.e. base salary and annual bonus, and (2) a
long-term component, i.e. long-term incentives, stock options and grants. The
policies regarding each of these elements, as well as the basis for determining
the compensation of Mr. Jenkins, the Chairman of the Board of Directors and
Chief Executive Officer, are described below.
(1) Annual Component: Base Salary and Annual Bonus
Base salaries for executive officers are determined by evaluating the
responsibilities of the position and comparing it to other executive officer
positions in the local marketplace and similar positions in competitive
architectural, engineering, planning and environmental services firms of similar
size. These salaries are reviewed annually and are adjusted based on the
Company's performance and the individual's contribution to that performance.
The Management Annual Incentive Compensation Plan links compensation to the
performance of the Company. A percentage of pre-tax profits is allocated to the
bonus fund and the total of all participants' awards is generally limited to the
fund amount. Bonuses are distributed in cash.
(2) Long-Term Component: Long-term Incentive Plan, Stock Options and Shares
To align executive officers' interests with those of the shareholders, the
long-term component relates compensation to the value of the Company's common
stock. The Long-term Incentive Plan links a compensation component to the
Company's profitability over a three-year period funding an award pool with 50%
of the Company's pre-tax earnings which are in excess of a threshold reasonable
rate of return for its shareholders. Awards are distributed in cash (50%) and
stock (50%).
11
The Compensation Committee determines the number of shares subject to grant
and option, including vesting, duration and other terms and conditions. Stock
options are exercisable up to ten years from the grant date. Such stock options
provide incentive for the creation of shareholder value over the long-term,
since the full benefit of the compensation package cannot be realized unless
appreciation in the price of Company's common stock occurs over a specified
number of years.
The details regarding specific provisions of annual and long-term
compensation components described above apply to certain senior managers of the
Company including the named executive officers.
Chief Executive Officer Compensation
During fiscal year 2001, the Company's most highly compensated officer was
Leerie T. Jenkins, Jr., Chairman of the Board and CEO. Mr. Jenkins' performance
was reviewed by the committee as it related to the annual and long-term
component of his compensation.
Both the annual and long-term components are based in part on the Company's
financial performance, realizing business development goals and overall
corporate growth for the fiscal years involved. Base pay for Mr. Jenkins
increased approximately 18% during fiscal year 2001. Mr. Jenkins also received a
$140,000 cash bonus.
The committee has concluded that Mr. Jenkins' performance warrants the
compensation for fiscal year 2001 as reflected in the Summary Compensation
Table.
The Compensation Committee
--------------------------
R. Ray Goode, Chairman
David E. Thomas, Jr.
James W. Apthorp
12
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of two
independent directors and operates under a written charter adopted by the Board
of Directors.
Management is responsible for the Company's internal controls, financial
reporting process and compliance with the laws and regulations and ethical
business standards. The independent accountants are responsible for performing
an independent audit of the Company's financial statements in accordance with
generally accepted auditing standards and to issue a report thereon. The Audit
Committee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with
management and the independent accountants. The Audit Committee has reviewed and
discussed the financial statements with management and the independent
accountants. The Audit Committee discussed with the independent accountants
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit committees).
The Company's independent accountants also provided to the Audit Committee
the written disclosures and letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent accountants that firm's independence.
Based upon the review and discussions described in this report, the Audit
Committee recommended that the Board of Directors include the audited financial
statements in the Company's Annual Report on Form 10-K for the year ended March
31, 2001 filed with the Securities and Exchange Commission.
A copy of the written charter of the Audit Committee of the Company, which
was adopted by the Board of Directors on July 11, 2000, is attached to this
Proxy Statement as Appendix A.
The Audit Committee
-------------------
James W. Apthorp, Chairman
R. Ray Goode
PROPOSAL II.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending March 31, 2002, subject to
ratification by the shareholders. Deloitte & Touche LLP has audited the
Company's financial statements for many years. Representatives of Deloitte &
Touche LLP are expected to be present at the Annual Meeting with the opportunity
13
to make a statement if they so desire and to respond to appropriate questions
from shareholders. The affirmative vote of the holders of a majority of votes
cast on this matter is required to ratify the selection of Deloitte & Touche
LLP. Abstentions and broker non-votes will have no effect on the outcome of this
proposal.
Deloitte & Touche LLP billed the Company $123,000 during fiscal year 2001. Of
this amount, $75,000 was for audit and audit-related services. The balance was
for tax and valuation services. No services were rendered for financial
information systems design and implementation.
The Board recommends a vote FOR ratification of the selection of Deloitte &
Touche LLP.
PROPOSAL III.
OTHER BUSINESS
The Company does not know of any business to be presented at the meeting
other than as set forth above. However, if any other business is properly
brought before the meeting, it is intended that the holders of proxies solicited
hereby will vote in accordance with their judgement on such matters.
Shareholder Proposals for Next Annual Meeting
Any shareholder proposal intended to be included in the Company's proxy
statement for the 2002 Annual Meeting of Shareholders should be sent to the
Company, Attention: Corporate Secretary, and must be received no later than
February 20, 2002. For any proposal that is not submitted for inclusion in next
year's Proxy Statement, but is instead sought to be presented directly at the
2002 Annual Meeting of Shareholders, management will be able to vote proxies
solicited by the Board of Directors in its discretion if the Company: (1)
receives notice of the proposal before the close of business on May 5, 2002, and
advises shareholders in the 2002 Proxy Statement about the nature of the matter
and how management intends to vote on such matter, or (2) does not receive
notice of the proposal prior to the close of business on May 5, 2002.
Annual Report on Form 10-K
On or about June 22, 2001, the Company's 2001 Annual Report on Form 10-K
for the fiscal year ended March 31, 2001 was mailed to all shareholders of
record at the close of business on June 22, 2001.
*****************************************
14
APPENDIX A
REYNOLDS, SMITH AND HILLS, INC. AUDIT COMMITTEE CHARTER
1. Role and Independence: Organization
The Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing, internal
control, and financial reporting practices of the Company. It may also have such
duties as may from time to time be assigned to it by the Board. The membership
of the Committee shall consist of at least two (2) directors who are each free
of any relationship that, in the opinion of the Board, may interfere with such
member's individual exercise of independent judgment. Each Committee member
shall also meet the independence and financial literacy requirements for serving
on audit committees, and at least one member shall have accounting or related
financial management expertise, all as set forth in the applicable rules of the
NASDAQ. The Committee shall maintain free and open communication with the
independent auditors, the internal auditors, and Company management. In
discharging its oversight role, the Committee is empowered to investigate any
matter relating to the Company's accounting, auditing, internal control, or
financial reporting practices brought to its attention, with full access to all
Company books, records, facilities, and personnel. The Committee may retain
outside counsel, auditors or other advisors.
One member of the Committee shall be appointed as chair. The chair shall be
responsible for leadership of the Committee, including scheduling and presiding
over meetings, preparing agendas, and making regular reports to the Board. The
chair will also maintain regular liaison with the CEO, CFO and the lead
independent audit partner.
The Committee shall meet at least two (2) times a year, or more frequently
as the Committee considers necessary. At least once each year the Committee
shall have separate private meetings with the independent auditors and
management.
2. Responsibilities
Although the Committee may wish to consider other duties from time to time,
the general recurring activities of the Committee in carrying out its oversight
role are described below. The Committee shall be responsible for:
o Recommending to the Board the independent auditors to be retained (or
nominated for shareholder approval) to audit the financial statements of
the Company. Such auditors are ultimately accountable to the Board and the
Committee, as representatives of the shareholders.
15
o Evaluating, together with the Board and management, the performance of the
independent auditors and, where appropriate, replacing such auditors.
o Obtaining annually from the independent auditors a formal written statement
describing all relationships between the auditors and the Company,
consistent with Independence Standards Board Standard Number 1. The
Committee shall actively engage in a dialogue with the independent auditors
with respect to any relationships that may impact the objectivity and
independence of the auditors and shall take, or recommend that the Board
take, appropriate actions to oversee and satisfy itself as to the auditors'
independence.
o Reviewing the audited financial statements and discussing them with
management and the independent auditors. These discussions shall include
the matters required to be discussed under Statement of Auditing Standards
No. 61 and consideration of the quality of the Company's accounting
principles as applied in its financial reporting, including a review of
particularly sensitive accounting estimates, reserves and accruals,
judgmental areas, audit adjustments (whether or not recorded), and other
such inquiries as the Committee or the independent auditors shall deem
appropriate. Based on such review, the Committee shall make its
recommendation to the Board as to the inclusion of the Company's audited
financial statements in the Company's Annual Report on Form 10-K.
o Annually issuing a report to be included in the Company's proxy statement
as required by the rules of the Securities and Exchange Commission.
o Overseeing the relationship with the independent auditors, including
discussing with the auditors the nature and rigor of the audit process,
receiving and reviewing audit reports, and providing the auditors full
access to the Committee (and the Board) to report on any and all
appropriate matters.
o Discussing with a representative of management and the independent
auditors: (1) the interim financial information contained in the Company's
Quarterly Report on Form 10-Q prior to its filing, (2) the earnings
announcement prior to its release (if practicable), and (3) the results of
the review of such information by the independent auditors. (These
discussions may be held with the Committee as a whole, with the Committee
chair in person, or by telephone.)
o Discuss with the independent auditors all accounting pronouncements issued
by the Financial Accounting Standards Board (including exposure drafts for
future pronouncements) which will impact the Company when implemented.
o Discussing with management and the independent auditors the quality and
adequacy of and compliance with the Company's internal controls.
16
o Discussing with management and/or the Company's general counsel any legal
matters (including the status of pending litigation) that may have a
material impact on the Company's financial statements and any material
reports or inquiries from regulatory or governmental agencies.
The Committee's job is one of oversight. Management is responsible for the
preparation of the Company's financial statements and the independent auditors
are responsible for auditing those financial statements. The Committee and the
Board recognize that management and the independent auditors have more resources
and time and more detailed knowledge and information regarding the Company's
accounting, auditing, internal control and financial reporting practices than
the Committee does; accordingly, the Committee's oversight role does not provide
any expert or special assurance as to the financial statements and other
financial information provided by the Company to its shareholders and others.
REYNOLDS, SMITH AND HILLS, INC.
Common Stock Proxy
This Proxy Solicited on Behalf of the Board of Directors
Annual Meeting of Shareholders to be held Tuesday, July 24, 2001
The undersigned hereby appoints Leerie T. Jenkins, Jr. and David K. Robertson,
jointly and severally, proxies, with full power of substitution and with
discretionary authority, to represent and to vote, in accordance with the
instructions set forth below, all shares of Common Stock of Reynolds, Smith and
Hills, Inc. held of record by the undersigned on June 22, 2001 at the Annual
Meeting of Shareholders and any adjournment thereof. The meeting will be held at
the offices of the Company at 4651 Salisbury Rd., Suite 400, Jacksonville,
Florida, 32256 on Tuesday, July 24, 2001 at 9:00 a.m., local time.
1. Election of seven Directors to serve until the 2002 Annual Meeting of
Shareholders and until their successors are elected and qualified.
________ For all nominees listed below (except as marked to the contrary
below).
________ Withhold authority to vote for all nominees listed below.
Instruction: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.
L. Jenkins; D. Robertson; D. Cole; R. Ratliff; D. Thomas; R. Goode; J.
Apthorp
2. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
public accountants of the Company for the fiscal year ending March 31,
2002.
_____________For _____________Against _____________Abstain
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed by the
undersigned shareholder. If no direction is made, this proxy will be voted "FOR"
the election of the director nominees named above and "FOR" Item 2.
Please sign below. When shares are held by joint tenants, both should sign.
Signature______________________________________Date_______________
Signature______________________________________Date_______________
When signing as Attorney, Administrator, Guardian or Trustee please give full
title as such. If a corporation, please sign in full corporate name by president
or other authorized officer. If a partnership name, please sign by authorized
person.