EXHIBIT 99.1(b)
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the Company
for services rendered during fiscal 1997, 1996 and 1995 to the Company's Chief
Executive Officer and to the Company's three Managing Directors, the only other
executive officers whose total salary and bonus exceeded $100,000 during the
year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- --------------------------------
PERFORMANCE SECURITIES
NAME & PRINCIPAL STOCK UNDERLYING SPP LOAN ALL OTHER
POSITION YEAR SALARY(1) BONUS(2) AWARDS(3) OPTIONS/SARS(4) AWARDS(5) COMPENSATION(6)
- ----------------- ---- -------- --------- ------------ -------------- --------- ---------------
Martin E. Stein, Jr. 1997 $275,000 $197,500 $265,800 270,300 $186,338 $17,325
Chairman and Chief 1996 252,391 225,000 $168,000 0 186,338 35,439
Executive Officer 1995 240,000 144,400 0 0 103,950 24,331
Bruce M. Johnson 1997 180,000 104,400 132,900 139,600 84,083 18,143
Managing Director 1996 145,076 115,000 84,000 0 84,083 20,753
and Chief Financial 1995 135,000 71,400 0 0 41,580 15,142
Officer
Robert C. Gillander, Jr. 1997 175,000 100,000 116,288 139,600 80,502 16,480
Managing Director 1996 137,500 108,900 73,500 0 80,502 19,266
Investment Group 1995 125,000 60,000 0 0 41,580 14,175
James D. Thompson 1997 175,000 100,000 107,981 139,600 71,185 16,795
Managing Director 1996 129,826 103,000 68,250 0 71,185 18,929
Operations Group 1995 121,000 62,100 0 0 36,383 13,930
_________________________
(1) Includes amounts deferred under the 401(k) feature of the Company's profit
sharing plan.
(2) Bonuses for the year ended December 31, 1997 were paid 100% in cash; for
the year ended December 31, 1996 bonuses were paid 45% in cash and 55% in
stock; and for the year ended December 31, 1995 bonuses were paid 40% in
cash and 60% in stock.
(3) Consists of the fair market value of restricted stock awards on December
31, 1997 and December 31, 1996, the date of grants. Awards were earned by
cumulative annual shareholder return exceeding 15% beginning January 1,
1995, when the program was implemented. Awards vest 34%, 33% and 33% on
the first, second and third anniversary date of the grant provided that the
executive is employed by the Company or any affiliate on the date of
vesting. The executive is entitled to dividends and voting rights on
unvested shares. Shares representing the full amount of the awards listed
above, held by the named executives are as follows: Mr. Stein, 16,000
shares; Mr. Johnson, 8,000 shares; Mr. Gillander, 7,000 shares; and Mr.
Thompson, 6,500 shares. There is currently no additional restricted stock
available for management.
(4) Stock options granted for previous years performance that vest over 5 years
(Annual Options), and stock options granted related to the Company=s Stock
Purchase Plan (SPP Shares and SPP Matching Options), that vest over 1 and 9
years depending upon shares owned by the executive after 5 years, and
certain financial performance measures B see Stock Purchase Plan included
in the Executive Compensation section for specifics related to options
granted and vesting terms.
(5) Represents amounts earned by the named executive officers in the form of
loan forgiveness in accordance with the terms of the Stock Purchase Plan
that is part of the Company's 1993 Long Term Omnibus Plan, based upon FFO
per share growth greater than 7%, annual shareholder return of 15% or more
and cumulative return of 20% or more since January 1, 1996.
(6) Includes contributions in the form of stock to the Company's profit sharing
and 401(k) plan, the profit sharing portion of which was based on the
attainment of predetermined levels of funds from operations per share. The
profit sharing and 401(k) match amount for each executive officer was
$13,750 in 1997 and 1996, and $11,448 in 1995 and 1994. Also includes
amounts allocated in 1996 and 1995 to a deferred compensation plan as
follows: Mr. Stein, $19,879 and $11,073; Mr. Johnson, $5,193 and $1,884;
Mr. Gillander, $3,706 and $917; and Mr. Thompson, $3,369 and $672. The
remainder consists of: (a) annual Christmas compensation of $1,000, and
(b) excess term life insurance premiums.
EMPLOYMENT AGREEMENTS. The Company has entered into a three-year employment
agreement with Martin E. Stein, Jr., the Company's President and Chief Executive
Officer, providing for an annual base salary and participation in the Company's
executive compensation plans on the same terms as other executive officers. The
agreement, which was effective in October 1993, will be renewed automatically
for an additional year on each anniversary date thereof so that the remaining
term will be three years, unless either party gives written notice of non-
renewal. The agreement provides for Mr. Stein to receive base salary and
incentive compensation for the remainder of the term of the agreement in the
event that he is terminated, his responsibilities are materially reduced or the
Company's headquarters are relocated from Jacksonville, Florida as a result of a
sale, merger or other change of control of the Company. The Company has entered
into agreements with Messrs. Johnson, Gillander and Thompson that provide for
the payment of salary and benefits for a specified period in the event of a
change of control only.
STOCK PURCHASE PLAN. To align the interest of management with the Company's
shareholders, the Company has implemented a stock purchase plan ("SPP") as part
of its Long-Term Omnibus Plan to encourage stock ownership by management.
Management purchased 226,000 shares under this program during 1993 and 1996 at
fair market value at the time of purchase. The stock purchases were funded by
SPP loans from the Company (averaging 92% of the purchase price) and cash
provided directly from management. These SPP loans are fully secured by a
portion of the stock purchased, have full recourse to management, are interest
only (due quarterly) with fixed rates of interest of 7.34% to 7.79%, and mature
in 10 years. As part of the program, a portion of the loans may be forgiven
annually based on annual per share FFO growth of greater than 7%, total annual
shareholder return of at least 15%, and cumulative total annual shareholder
return of 20% or more since January 1, 1996.
In 1997, the Company granted the executive officers the option for 2 years to
purchase approximately 198,000 shares ("SPP Shares") at $25.25 per share, the
stock price on the grant date, 65,300 of which are subject to certain financial
performance goals. The Company will loan the participants 95% of the purchase
price at an interest rate equal to the lower of 6% or the dividend rate. The
loans will be secured by stock, will be full recourse to the employee, and will
mature in 10 years. On January 12, 1998, the executive officers exercised
132,700 SPP Shares. The 1997 SPP loan does not provide for loan forgiveness.
In 1997, the Company granted the executive officers 396,000 SPP Matching
Options, which expire in 10 years. These options are vested after 9 years. The
vesting may be accelerated if the executive exercises the options to purchase
the SPP Shares and then holds those shares in accordance with the plan over 5
years. The Company also granted 95,100 options to the executive officers in
1997 based upon 1996 performance (Annual Options). Annual Options vest over 5
years and expire after 10 years. The SPP Matching Options and the Annual
Options have an exercise price equal to $25.25 per share, the stock price on the
grant date. Annual options accrue dividends (Dividend Equivalents) based on the
Company's annual dividend less the average dividend yield of the S&P 500 for the
corresponding year. Dividend Equivalents are converted into common stock
immediately and vest over 5 years.
The following table sets forth as of March 1, 1998, the amounts outstanding
under the SPP loan program due from each of the Company's executive officers.
LARGEST BALANCE
SPP LOAN BALANCE DURING FISCAL YEAR ENDED
EXECUTIVE OFFICER MARCH 1, 1998 DECEMBER 31, 1997
----------------- ---------------- ------------------------
Martin E. Stein, Jr. $1,511,180 $651,662
Bruce M. Johnson 943,114 314,767
Robert C. Gillander, Jr. 926,406 294,479
James D. Thompson 903,140 261,896
STOCK OPTIONS. The following table sets forth information concerning the
value of unexercised options as of December 31, 1997 held by the executive
officers named in the Summary Compensation Table above.
AGGREGATED OPTION EXERCISES DURING FISCAL 1997
AND OPTION YEAR-END VALUES TABLE
NUMBER OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES VALUE OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED UPON REALIZED DECEMBER 31, 1997 DECEMBER 31, 1997
EXERCISE OF UPON EXERCISABLE/ EXERCISABLE/
NAME OPTIONS EXERCISE UNEXERCISABLE UNEXERCISABLE
---- -------------- --------- ---------------------- -----------------------
Martin E. Stein, Jr. 5,556 $149,328 78,044 (E) / $289,933 (E) /
226,700 (U) $552,581 (U)
Bruce M. Johnson 4,198 $112,812 41,502 (E) / $ 91,171 (E) /
109,900 (U) $267,881 (U)
Robert C. Gillander, Jr. 4,198 $112,812 41,502 (E) / $ 89,652 (E) /
109,900 (U) $267,881 (U)
James D. Thompson 3,857 $103,662 39,843 (E) / $ 83,723 (E) /
109,900 (U) $267,881 (U)
The following table sets forth information with respect to option grants to the
executive officers named in the Summary Compensation Table above during 1997 and
the potential realizable value of such option grants. See Stock Purchase Plan
for discussion of stock options granted during 1997.
OPTION GRANTS DURING FISCAL 1997
NUMBER OF OPTIONS % OF TOTAL OPTIONS EXERCISE PRICE EXPIRATION HYPOTHETICAL VALUE
EXECUTIVE OFFICER GRANTED GRANTED DURING 1997 ($/SHARE) DATE AT GRANT DATE
----------------- ----------------- ------------------- -------------- ---------- ------------------
Martin E. Stein, Jr. 270,300 21.6% $25.25 1-13-2007 $842,610
Bruce M. Johnson 139,600 11.2% $25.25 1-13-2007 435,814
Robert L. Gillander, Jr. 139,600 11.2% $25.25 1-13-2007 435,814
James D. Thompson 139,600 11.2% $25.25 1-13-2007 435,814
(1) The estimated present value at grant date of options granted during 1997 has
been calculated using the Black-Scholes option pricing model, based upon the
following assumptions: estimated time until exercise of 5.7 years; a risk-
free interest rate of 6.3%; a volatility rate of 21%; and a dividend yield
of 6.3%. The approach used in developing the assumptions upon which the
Black-Scholes valuation was calculated is consistent with the requirements
of Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation." The actual value of the options may be
significantly different, and the value actually realized, if any, will
depend upon the excess of the market value of the Common Stock over the
option exercise price at the time of exercise.
COMPENSATION OF DIRECTORS. In 1997, the Company paid an annual fee of $17,000
to each of its non-employee Directors, plus $2,500 per year for service on a
Board committee ($3,000 per year for chairing a committee). Directors' fees are
currently paid in shares of Common Stock, unless the Director elects to receive
all or any portion of the fees in cash. Non-employee Directors also receive
non-qualified options to purchase 1,000 shares of Common Stock at the end of
each year and may elect to participate in a stock purchase matching program that
provides for a stock value match equal to 50% of the stock purchased by the
Director, limited to $10,000 per year. The options vest one year after grant
and have a term of ten years and an exercise price equal to the greater of the
fair market value of the Common Stock on the date of grant or the average
trading price of the Common Stock on the 20 business days preceding the date of
grant.