DEF 14A 1 proxy2002.txt SCHEDULE 14A INFORMATION 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 [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240-14a-12 Capital City Bank Group, Inc. --------------------------------------------------------------- (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 appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(1) and 0-11 (1) Title of each class of securities to which transaction applies: (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 and 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: NOTICE OF 2002 ANNUAL MEETING OF SHAREOWNERS AND PROXY STATEMENT Capital City Bank Group, Inc. 217 North Monroe Street Tallahassee, Florida 32301 -------- CONTENTS -------- LETTER TO SHAREOWNERS NOTICE OF ANNUAL MEETING OF THE SHAREOWNERS PROXY STATEMENT General Information 1 Corporate Governance 2 Nominees for Election as Directors 3 Continuing Directors and Executive Officers 4 Audit Committee Report 5 Compensation Committee Report 6 Share Ownership 8 Executive Officers and Transactions with Management 10 Summary Compensation Table 11 Incentive Compensation and Stock Purchase Plans 12 Retirement Plans 13 Five-Year Performance Graph 15 Auditors 16 Annual Report 17 --------------------- LETTER TO SHAREOWNERS --------------------- CAPITAL CITY BANK GROUP, INC. 217 North Monroe Street Tallahassee, Florida 32301 April 2, 2002 Dear Fellow Shareowners: You are cordially invited to attend the 2002 Annual Meeting of Shareowners at 10:00 a.m., local time, on Tuesday, April 23, 2002, at University Center Club, Building B, Floor 3, University Center, Florida State University, Doak Campbell Stadium in Tallahassee, Florida. At the meeting, I will give an update on Capital City's business and plans for the future. Also, we will elect three Class II directors to the Board of Directors. In contrast to prior years, we will not be ratifying our accountants at the meeting. In response to the Enron/Arthur Andersen situation, our Audit Committee has begun a comprehensive review and selection process to recommend to the Board of Directors the selection of an independent auditor for fiscal year 2002. This selection process is on-going as of the date of this letter. Your Board of Directors encourages every shareowner to vote. Your vote is very important. Whether or not you plan to attend the meeting, please review the proxy materials and return your proxy instructions by Friday, April 12, 2002. The meeting will begin at 10:00 a.m. I hope you will come early and join your friends for light refreshments at 9:30 a.m. Sincerely, /s/ William G. Smith, Jr. William G. Smith, Jr. President and Chief Executive Officer --------------------------------------- NOTICE OF ANNUAL MEETING OF SHAREOWNERS --------------------------------------- ---- ----- TIME PLACE ---- ----- 10:00 a.m., local time, on University Center Club April 23, 2002 Building B, Floor 3 University Center Florida State University Doak Campbell Stadium Tallahassee, Florida -------- ----------- BUSINESS RECORD DATE -------- ----------- (1) Elect three Class II Shareowners owning Capital directors to the Board of City Bank Group shares at the Directors close of business on March 6, 2002, are entitled to attend (2) Transact other business and vote at the meeting properly coming before the meeting or any adjournment of the meeting --------- ------ DOCUMENTS VOTING --------- ------ The Proxy Statement, proxy Even if you plan to attend the card, and Capital City Bank meeting in Tallahassee, please Group Annual Report are provide us your voting included in this mailing instructions in one of the following ways as soon as possible: (1) Internet - use the internet address on the proxy card (2) Telephone - use the toll free number on the proxy card (3) Mail - mark, sign, and date the proxy card and return in the enclosed postage-paid envelope By Order of the Board of Directors, J. Kimbrough Davis, Corporate Secretary, April 2, 2002 PROXY STATEMENT - GENERAL INFORMATION Q:WHY AM I RECEIVING THIS Q:CAN I CHANGE MY VOTE? PROXY STATEMENT AND PROXY A:Yes, you may revoke your CARD? proxy by submitting a later A:The Board of Directors is proxy or by written request soliciting your proxy for received by the Company's the 2002 Annual Meeting of corporate secretary before Shareowners and any the meeting. You may also adjournments of this revoke your proxy at the meeting. The meeting will meeting and vote in person. be held at 10:00 a.m., local time, on Tuesday, Q:WHAT DOES IT MEAN IF I GET April 23, 2002, at the MORE THAN ONE PROXY CARD? University Center Club, A:You will receive a proxy Building B, Floor 3, card for each account that University Center, Florida you have. Please vote State University, Doak proxies for all accounts to Campbell Stadium, ensure that all your shares Tallahassee, Florida. This are voted. Proxy Statement and the proxy card are being Q:WHEN ARE SHAREOWNER provided to shareowners on PROPOSALS DUE FOR THE 2003 or about April 2, 2002. ANNUAL MEETING? A:Shareowner proposals that Q:WHAT IS BEING VOTED UPON? are to be included in the A:The election of three Class Proxy Statement for the II directors. The proposal 2003 meeting must be to be considered will not received by December 5, create dissenter's rights. 2002. Shareowner proposals We are not aware of any for the 2003 meeting that other matters to be are not intended to be presented to the meeting; included in the proxy however, the holders of the statement for that meeting proxies will vote in their must be received by discretion on any other February 18, 2003 or the matters properly presented. Board of Directors can vote the proxies in its discretion on the proposal. Q:WHO CAN VOTE? Proposals must comply with A:All shareowners of record the proxy rules on the record date of and be submitted in writing to: March 6, 2002. On that date, there were 10,627,669 J. Kimbrough Davis Capital City Bank Group Corporate Secretary common shares outstanding Capital City Bank Group, Inc. and entitled to vote, and 217 North Monroe Street these shares were held of Tallahassee, Florida 32301 record by approximately 1,473 shareowners. Q:WHO PAYS FOR SOLICITING PROXIES? Q:HOW MUCH DOES EACH SHARE A:The Company pays the COUNT? cost of soliciting proxies. A:Each share counts as one The officers or other vote. For the proposals employees of the Company scheduled to be voted upon or its subsidiaries may at the meeting, withheld solicit proxies to have a votes on directors, larger representation at the abstentions and shares held meeting. by a broker that the broker fails to vote are all counted to determine a quorum, but are not counted for or against the matters being considered. Q:HOW DO I GIVE VOTING INSTRUCTIONS? A:You may attend the meeting and give instructions in person or by the Internet, by telephone, or by mail. Instructions are on the proxy card. The appropriate individuals named on the enclosed proxy card will vote all properly executed proxies that are delivered in response to this solicitation and not later revoked in accordance with the instructions given by you. -------------------- CORPORATE GOVERNANCE -------------------- HOW IS THE COMPANY ORGANIZED? . Oversees the Company's Capital City Bank Group is a auditing, accounting, financial holding company financial reporting, and managed by a core group of internal control functions officers and governed by a Board of Directors that has . Monitors and reviews the been set at seven members. Company's compliance with The Board of Directors is Section 112 of the Federal divided into three classes. Deposit Insurance Corporation Improvement Act of 1991 and WHAT ARE DIRECTORS PAID? reviews regulatory reports Only non-employee directors are compensated for board . Reviews independent service. The pay components accountants' report on the for 2001 were: Company's financial statements, significant Annual Retainers: changes in accounting principles and practices, . $6,000 for each non- significant proposed employee member of the Board adjustments, and any of Directors unresolved disagreements with management concerning . $1,000 additional annual accounting or disclosure retainer if serving as matters chairman of a board committee . Recommends independent Meeting Fees: accountants and reviews their services, fees, . $500 for each board and the scope meeting attended and timing of audits . $50 per hour for each . Operates according to a committee meeting attended written charter adopted by the Board of Directors Directors are also permitted to purchase shares of common Compensation Committee: stock at a 10% discount from fair market value under the . Members are Cader B. Cox, III 1996 Director Stock Purchase (Chairman), John K. Humphress, Plan. Purchases under this Lina S. Knox and John R. Lewis. Plan may not exceed the annual John B. Wight, Jr. also served retainer and meeting fees on the Compensation Committee received. For 2001. Mr. Wight reached the age of 72 in 2001 and resigned COMMITTEES OF THE BOARD from the Board of Directors at the end of 2001 in accordance Audit Committee: with Company policy. . Members are John K. Humphress . Met six times in 2001 (Chairman), John R. Lewis, and Lina S. Knox . Evaluates performance of the President and Chief Executive Officer and . Consists only of members recommends compensation that are "independent" as that term is defined in Rule The Board of Directors does 4200(a)(15) of the National not have a standing nominating Association of Securities committee. The whole Board of Dealers listing standards Directors performs this function. . Met four times in 2001 MEETINGS The Board of Directors met 12 times in 2001. Average director attendance at all board and committee meetings was approximately 97%. No director attended less than 75% of the applicable meetings. ---------------------------------- NOMINEES FOR ELECTION AS DIRECTORS ---------------------------------- ITEM NO. 1 -- ELECTION OF DIRECTORS ----------------------------------- The Board of Directors is divided into three classes, designated Class I, Class II and Class III. The directors in each class are elected for terms of three years or until their successors are duly elected and qualified. At the meeting, the shareowners will elect three Class II directors. The individuals named on the enclosed proxy card will vote, unless instructed otherwise, each properly delivered proxy for the election of the following nominees as directors. If a nominee is unable to serve, the shares represented by all valid proxies that have not been revoked will be voted for the election of a substitute as the Board of Directors may recommend, or the Board of Directors may by resolution reduce the size of the Board of Directors to eliminate the resulting vacancy. At this time, the Board of Directors knows of no reason why any nominee might be unable to serve. CLASS II DIRECTOR NOMINEES: --------------------------- THOMAS A. BARRON JOHN R. LEWIS Mr. Barron, 49, has been a Mr. Lewis, 59, has been a director since 1982. He is director since December Treasurer of the Company and 1999. He is President and was elected President of Chief Executive Officer of Capital City Bank in 1995. Super-Lube, Inc., Tallahassee, Florida, which LINA S. KNOX he founded in 1979. Ms. Knox, 57, has been a director since January 1998. She is a dedicated community volunteer. Ms. Knox is the first cousin of William G. Smith, Jr. Except as provided above, if elected, Messrs. Barron and Lewis and Ms. Knox will serve as Class II directors until the 2005 Annual Meeting. Mr. Barron has served as a director for at least the past five years. Ms. Knox has served as a director since January 1998, and Mr. Lewis has served as a director since December 1999. The affirmative vote of a plurality of shares present and entitled to vote is required for the election of directors. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES. ------------------------------------------- CONTINUING DIRECTORS AND EXECUTIVE OFFICERS ------------------------------------------- CONTINUING CLASS III CONTINUING CLASS I DIRECTORS: DIRECTORS: ----------------------------- --------------------------- (Term expiring in 2003) (Term expiring in 2004) DUBOSE AUSLEY CADER B. COX, III Mr. Ausley, 64, has been a Mr. Cox, 52, has been a director since 1982. He is director since 1994. Since the Chairman of the Board of 1976, he has served as the Company and is also President of Riverview Chairman of the law firm of Plantation, Inc., a resort Ausley & McMullen. Since and agricultural company. 1992, he has served as a director of TECO Energy, Inc. WILLIAM G. SMITH, JR. Since 1993, Mr. Ausley has Mr. Smith, 48, has been a served as a director of Sprint director since 1982. In Corporation. 1995, he was elected President and Chief JOHN K. HUMPHRESS Executive Officer of the Mr. Humphress, 53, has been a Company and Chairman of director since 1994. Since Capital City Bank. 1973, he has been a Mr. Smith is the first shareholder of Krause cousin of Lina S. Knox. Humphress Pace & Wadsworth, Chartered CPA's. OTHER EXECUTIVE OFFICERS: ------------------------- J. KIMBROUGH DAVIS Mr. Davis, 48, was appointed Executive Vice President and Chief Financial Officer of the Company in 1997. He served as Senior Vice President and Chief Financial Officer from 1991 to 1997. In 1998, he was appointed Executive Vice President and Chief Financial Officer of Capital City Bank. ---------------------- AUDIT COMMITTEE REPORT ---------------------- The Audit Committee has reviewed and discussed with Capital City Bank Group's management the Company's audited financial statements for fiscal year 2001. The Audit Committee has also discussed with Arthur Andersen LLP, the Company's independent auditors for fiscal year 2001, the matters required to be discussed by Statement on Auditing Standards No. 61, received the written disclosures from Arthur Andersen LLP required by Independence Standards Board Standard No. 1, and discussed with Arthur Andersen LLP its independence. Based primarily on such review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for fiscal year 2001. Members of the Committee: John K. Humphress Lina S. Knox John R. Lewis The foregoing Audit Committee Report shall not be deemed to be incorporated by reference into any of the Company's previous or future filings with the Commission, except as otherwise expressly identified by the Company in any such filing. ----------------------------- COMPENSATION COMMITTEE REPORT ----------------------------- WHAT IS THE EXECUTIVE and the competitive market. COMPENSATION PHILOSOPHY? Mr. Smith was elected as We are responsible for President and Chief Executive recommending to the Board of Officer in 1995. His initial Directors the compensation of base salary was set at William G. Smith, Jr., the $132,000 per year, and we Company's President and Chief have increased his base Executive Officer. Our intent salary periodically since is to provide a competitive that time. In 2001, compensation program linked Mr. Smith's base salary was directly to the Company's set at $158,000 per year, and strategic business objectives it has been adjusted in 2002 and its short-term and long- to $175,000 per year. term operating performance. Mr. Smith has also had the With the objectives of opportunity to earn strengthening company additional compensation under performance and maximizing various performance-based shareowner value over time, compensation plans. this policy serves to align the interests of the President ANNUAL PERFORMANCE BONUSES and Chief Executive Officer Annual cash bonuses are paid with those of the shareowners. through the profit participation plan. All WHAT COMPRISES TOTAL EXECUTIVE senior level executives COMPENSATION? participate in this plan. . Base pay PERFORMANCE GOALS We base annual performance . Short-term incentives bonuses on the attainment of corporate and individual goals . Long-term incentives that we set at the beginning of the year. TOTAL EXECUTIVE COMPENSATION We use a peer group of banks We believe that accomplishing as a guide for determining the corporate goals is essential level of compensation. The for the Company's continued banks in the peer group were success and sustained chosen based on the similarities financial performance. with the Company relative to size and markets served. The amount of cash bonus which Mr. Smith may earn increases We also periodically engage an or decreases, within a range, independent executive by a multiple of the compensation consultant to percentage by which net income assist in the assessment and exceeds or falls short of evaluation of the appropriateness established profit goals. The of the compensation. goals are based upon earnings performance. We believe BASE SALARY improved earnings performance We determine base salary by will translate into long-term assessing the responsibilities increases in shareowner value. required by the position, the experience of the individual, ANNUAL BONUS PAYMENTS Mr. Smith's annual bonus was tied directly to the Company's actual profitability for 2001 compared to targeted profitability. We believe his performance and influence are best measured by the Company's profitability and performance goals. In 2001, his incentive compensation $143,454, represented approximately 47% of his total cash compensation. During the five-year period from January 1, 1997 to December 31, 2001, William G. Smith, Jr. was entitled to receive 22,500 shares of INCENTIVE PLAN common stock as a restricted The Company maintains an stock award under the Associate Incentive Plan. Associate Incentive Plan. The Under this plan, Mr. Smith is award vested in five 4,500- eligible to earn common stock. share increments as the Actual grants are determined Company's stock met certain by the Board of Directors price thresholds. On December based on the achievement of 19, 1997, Mr. Smith was short-term and long-term granted 18,000 shares of performance goals. These common stock in accordance goals are set by the Board of with the provisions of this Directors with reference to award. On that date, the several performance factors. closing price of the common The factors are generally stock was $26.83 per share. based on financial On February 28, 1998, Mr. performance, including Smith received the remaining earnings, operating 4,500 shares subject to this efficiency, asset quality and award. On that date, the growth. closing price of the common stock was $29.25 per share. Specific targets and Mr. Smith has satisfied all weightings used for the conditions for receiving establishing short-term and these shares. long-term performance goals are subject to change at the On January 1, 2002, Mr. Smith beginning of each measurement and the Company entered into period, and are influenced by an agreement under which Mr. the Board of Directors' desire Smith will be eligible to to emphasize performance in receive Company stock options certain areas. In addition to based on the compound growth stock earned in 2001, the rate of the Company's earnings Company provided a cash bonus per share over a three year equal to 31% of the value of period. Under this agreement, stock as a partial offset to any stock options received by the tax liability incurred by Mr. Smith will vest at a rate Mr. Smith. of one-third per year for each of the three years after the For achieving short-term date of grant. performance goals for 2001, Mr. Smith received a payout of SUMMARY 738 shares under the Associate We believe that the policies Incentive Plan, with a fair and programs described in this market value of $24.23 per report link pay and share as of December 31, 2001. performance and serve the best The opportunity at maximum interests of shareowners. We performance was 1,136 shares. frequently review the various Except as discussed below, pay plans and policies and Mr. Smith was not eligible to modify them as we deem earn CCBG shares for achieving necessary to continue to meet any long-term performance goals. the Company's business objectives and philosophy. Members of the Committee during 2001: Cader B. Cox, III John K. Humphress Lina S. Knox John R. Lewis John B. Wight, Jr.1 1 Mr. Wight reached the age of 72 in 2001 and resigned from the Board of Directors at the end of 2001 in accordance with Company policy. --------------- SHARE OWNERSHIP --------------- SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Company's directors and executive officers, and parties owning beneficially more than 10% of the common stock, must file reports with the Securities and Exchange Commission to reflect their interests in the Company's common stock. Copies of these reports must be furnished to the Company. Based solely upon on a review of these reports received by the Company for fiscal 2001 and written representations from some of its officers and directors, the Company believes that each required Section 16(a) report for 2001 was filed on time. SHARE OWNERSHIP TABLE Beneficial owners of more than 5% of the common stock are required to file reports with the Securities and Exchange Commission. The following table provides information, as of March 6, 2002, on the common stock beneficially owned by beneficial owners who have filed the required reports, beneficial owners who were known to the Company to beneficially own more than 5% of the common stock, directors, executive officers named in the Summary Compensation Table, and all executive officers and directors as a group. Shares Percentage Beneficially of Owned (1) Outstandin g Shares Owned Robert H. Smith(2) 2,001,164(3) 18.83% Post Office Box 11248 Tallahassee, Florida 32302 William G. Smith, Jr.(2) 2,147,254(4) 20.20% Post Office Box 11248 Tallahassee, Florida 32302 John B. Wight, Jr. 635,900(5) 5.98% Post Office Box 58 Cairo, Georgia 31728 DuBose Ausley 520,776(6) 4.90% Thomas A. Barron 217,110(7) 2.04% Cader B. Cox, III 251,373(8) 2.37% J. Kimbrough Davis 36,894(9) * John K. Humphress 360,724(10) 3.39% Lina S. Knox(2) 69,225(11) * John R. Lewis 5,063 * All Directors and Executive 3,608,419 33.95% Officers as a Group (8 Persons) *Represents less than one percent. (1) For purposes of this table, a person is deemed to be the beneficial owner of any shares of common stock if he or she has or shares voting or investment power with respect to the shares or has a right to acquire beneficial ownership at any time within 60 days from the record date. "Voting power" is the power to vote or direct the voting of shares and "investment power" is the power to dispose or direct the disposition of shares. (2) Robert H. Smith and William G. Smith, Jr. are brothers, and Lina S. Knox is their first cousin. (3) Includes (i) 63,972 shares in accounts for his children for which Mr. Smith is Custodian; (ii) 361,202 shares held in certain trusts under which Mr. Smith shares voting and investment power as a co-trustee; and (iii) 368,322 shares held by a partnership under which Mr. Smith shares voting and investment power. Of the shares beneficially owned by Robert H. Smith, 729,524 shares are also beneficially owned by William G. Smith, Jr. (4) Includes (i) 24,991 shares in an account for his son for which Mr. Smith is Custodian; (ii) 361,202 shares held in certain trusts under which Mr. Smith shares voting and investment power as a co-trustee; (iii) 368,322 shares held by a partnership under which Mr. Smith shares voting and investment power; and (iv) 21,874 shares owned by Mr. Smith's wife, of which he disclaims beneficial ownership. Of the shares beneficially owned by William G. Smith, Jr., 729,524 shares are also beneficially owned by Robert H. Smith. (5) Includes 92,708 shares owned by Mr. Wight's wife, of which he disclaims beneficial ownership. (6) Includes (i) 182,676 held in trust under which Mr. Ausley serves as trustee and has sole voting and investment power; and (ii) 4,425 shares owned by Mr. Ausley's wife, of which he disclaims beneficial ownership. (7) Includes (i) 48,542 shares held in trusts under which Mr. Barron serves as trustee; (ii) 459 shares for which Mr. Barron has power of attorney and may be deemed to be a beneficial owner; and (iii) 18,500 shares owned by Mr. Barron's wife, of which he disclaims beneficial ownership. (8) Includes 242,150 shares held in a trust under which Mr. Cox shares voting and investment power as a co-trustee, of which he disclaims beneficial ownership. (9) Includes (i) 944 shares in accounts for his children for which Mr. Davis is Custodian; (ii) 12,507 shares owned jointly by Mr. Davis and his wife; and (iii) 3,266 shares owned by Mr. Davis's wife, directly and through an Individual Retirement Account, all of which he disclaims beneficial ownership. (10)Includes (i) 77,370 shares held by a limited partnership of which Mr. Humphress is a general partner and shares voting and investment power; (ii) 2,841 shares owned jointly by Mr. Humphress and his wife; (iii) 2,100 shares in accounts for his children for which Mr. Humphress is Custodian; (iv) Includes 242,150 shares held in a trust under which Mr. Humphress shares voting and investment power as a co trustee; and (v) 1,102 shares owned by Mr. Humphress's wife, directly and through an Individual Retirement Account, all of which he disclaims beneficial ownership. (11)Includes 2,400 shares owned jointly by Ms. Knox and her husband. --------------------------------------------------- EXECUTIVE OFFICERS AND TRANSACTIONS WITH MANAGEMENT --------------------------------------------------- EXECUTIVE OFFICERS Executive officers are elected annually by the Board of Directors at its meeting following the annual meeting of shareowners to serve for a one year term and until their successors are elected and qualified. Messrs. Ausley, Barron and William G. Smith, Jr. serve as directors and executive officers of the Company and Mr. Davis is an executive officer of the Company. For information pertaining to the business experience and other positions held by these individuals, see "NOMINEES FOR ELECTION AS DIRECTORS" and "CONTINUING DIRECTORS AND EXECUTIVE OFFICERS." TRANSACTIONS WITH MANAGEMENT AND RELATED PARTIES During 2001, Capital City Bank, a wholly-owned subsidiary of the Company, had outstanding loans to several of the Company's directors, executive officers, their associates and members of the immediate families of these directors and executive officers. These loans were made in the ordinary course of business and were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others. These loans do not involve more than the normal risk of collectability or present other unfavorable features. DuBose Ausley, Chairman of the Board, is Chairman of Ausley & McMullen, the Company's general counsel. During 2001, the Company and the Company's subsidiaries paid legal fees to this law firm of approximately $533,653. Capital City Bank's Apalachee Parkway Office is located on land leased from the Smith Interests General Partnership L.L.P. ("SIGP") in which William G. Smith, Jr., Robert H. Smith and Lina S. Knox are partners. In addition, a trust for the benefit of Elaine W. Smith, a relative of William G. Smith, Jr. and Robert H. Smith, of which DuBose Ausley, Chairman of the Board, is trustee, is also a partner of SIGP. As trustee of this trust, Mr. Ausley has the power to vote the SIGP interests owned by the trust. Lease payments during 2001 from the Company to SIGP totaled approximately $69,000. -------------------------- SUMMARY COMPENSATION TABLE -------------------------- The following summary compensation table shows compensation information for the Company's President and Chief Executive Officer and the two other executive officers of the Company who earned over $100,000 in aggregate salary, bonus and other compensation in the fiscal year ended December 31, 2001. Long-Term Annual Compensation Compensation --------------------------------------- ---------------------- Long- Term Name and Restricted Incentive Principal Other Annual Stock Plan Position Year Salary Bonus Compensation(1) Awards Payouts(2) William G. Smith, Jr. 2001 $158,000 $159,452(3) $5,543 --- --- President and 2000 $145,000 $260,337(3) $16,576 --- $36,177 Chief Executive Officer 1999 $145,000 $223,981(3) $3,612 --- --- Thomas A. Barron 2001 $168,000 $148,915(3) $5,461 --- --- Treasurer 2000 $160,000 $254,857(3) $21,145 --- $50,965 1999 $160,000 $171,131(3) $3,607 --- --- J. Kimbrough Davis 2001 $150,000 $59,460(3) $3,320 --- --- Executive Vice 2000 $135,000 $82,062(3) $8,569 --- $18,113 President and 1999 $125,000 $61,396(3) $1,846 --- --- Chief Financial Officer (1) Consists of cash bonuses paid as a tax supplement to participants in the 1996 Associate Incentive Plan. (2) Consists of the dollar value of all payouts made for long- term performance awards earned under the 1996 Associate Incentive Plan. (3) Includes cash bonuses and the dollar value of short-term incentive stock awards. ----------------------------------------------- INCENTIVE COMPENSATION AND STOCK PURCHASE PLANS ----------------------------------------------- 1996 ASSOCIATE INCENTIVE PLAN number of performance share units to be awarded, if any, The 1996 Associate Incentive to each participant who is Plan became effective on selected to receive an award. February 23, 1996. Awards The Board of Directors may add under this plan may be made new participants to a until December 31, 2005. performance share program Under the plan, key associates after its commencement by of the Company who have been making pro rata grants. At selected as participants are the completion of a eligible to receive awards of performance share program, or equity-based incentive at other times as specified by compensation, including stock the Board of Directors, the options, stock appreciation Board of Directors will rights, restricted stock calculate the number of shares awards, performance share earned by multiplying the units and phantom stock, and number of performance share combinations of these units granted to the incentives. The aggregate participant by a performance number of shares of common factor representing the stock subject to awards under attainment of the performance the plan may not exceed goals. 750,000. The plan is administered by the Board of 1995 ASSOCIATE STOCK PURCHASE Directors which has the PLAN authority under the plan to establish, adopt and revise The 1995 Associate Stock plan rules and regulations and Purchase Plan became effective to make all determinations on March 20, 1995. Up to relating to the plan. 450,000 shares of common stock may be purchased under the The plan authorizes the 1995 Purchase Plan. The establishment of long-term purpose of the plan is to performance share programs to provide associates of the be effective over designated Company and its subsidiaries award periods of not less than with an opportunity to one year nor more than five purchase common stock of the years. At the beginning of Company through accumulated each award period, the Board payroll deductions or other of Directors establishes contributions. The plan is performance goals. intended to qualify as an Performance goals may include "Employee Stock Purchase Plan" financial or other measures of under Section 423 of the corporate performance and may Internal Revenue Code of 1986. be determined on an individual Under the terms of the plan, basis or by categories of the common stock purchased by participants. The Board of participants is purchased Directors has the directly from the Company. discretionary authority to The plan provides that common adjust performance goals or stock may be purchased at a performance measurement discount, not to exceed 15 standards as it deems percent, which is to be fixed equitable in recognition of by the Board of Directors. extraordinary or non-recurring events experienced during an In fiscal year 2001, 15,004 award period. The Board of shares of common stock were Directors determines the purchased under the plan. The Board of Directors has the right to amend or terminate the plan at any time. However, no amendment or termination may adversely affect purchase rights previously granted, unless the Board of Directors determines that the termination of the plan is in the best interests of the Company and its shareowners. In this situation, the Board of Directors may terminate an offering period under the plan on the last day of the offering period even though it may adversely affect purchase rights. ---------------- RETIREMENT PLANS ---------------- RETIREMENT PLAN The Company maintains a noncontributory, defined benefit retirement plan which covers all full-time associates and part time associates with 1,000 hours of service annually that are employed by the Company and its subsidiaries. The following table shows the annual retirement benefits payable under the retirement plan to associates based on the stated compensation and years of service, assuming the participant was born in 1955 or later, all service is after 1988, and retirement is at the age of 65. Years of Accredited Service (Social Security Benefits Not Included) Compensation 10 Years 20 Years 30 Years $ 10,000 $ 1,900 3,800 5,700 20,000 3,800 7,600 11,400 30,000 5,900 11,900 17,800 40,000 8,200 16,400 24,600 50,000 10,500 21,000 31,500 60,000 12,800 25,500 38,300 70,000 15,000 30,100 45,100 80,000 17,300 34,700 52,000 90,000 19,600 39,200 58,800 100,000 21,900 43,800 65,700 150,000 33,300 66,600 99,900 200,000 44,700 89,400 134,100 250,000 44,700 89,400 134,100 Benefits for retirement plan purposes are calculated based upon the average monthly compensation for the highest five consecutive years in the last 10 years of employment. The Company's retirement plan also provides pre-retirement disability and death benefits. For 2002, the maximum annual compensation recognized for benefit purposes is $200,000, and the maximum annual benefit permitted under IRS regulations is $160,000. As of December 31, 2001, the applicable compensation levels and accredited service for determination of pension benefits for the named executive officers would have been: Accredited Compensation Service Thomas A. Barron $494,997 27 William G. Smith, Jr. $484,734 23 J. Kimbrough Davis $258,775 20 Benefits are equal to the adjusted accrued benefits as of December 31, 1988, computed in accordance with a prior formula, plus a percentage of average monthly compensation for each year of service after 1988. Employees with service prior to 1989 or born prior to 1955 will have different benefits from those shown above, depending upon their year of birth, years of service prior to 1989, and compensation level. No single table is possible for these employees due to the multiple variables involved. SUPPLEMENTAL EMPLOYEE 401(K) PROFIT SHARING PLAN RETIREMENT PLAN On October 1, 1997, the Effective January 1, 1996, the Company adopted a 401(k) plan. Board of Directors of the The purpose of the 401(k) plan Company implemented a is to serve as a supplementary supplemental employee retirement plan for employees retirement plan covering who are eligible to William G. Smith, Jr. and participate. It is primarily Thomas A. Barron. In 2001, intended to provide a the Board extended the convenient program of regular coverage of this plan to savings and investment for J. Kimbrough Davis. This plan eligible employees. The is designed to restore a 401(k) plan is presently portion of the benefits administered by the Retirement Messrs. Smith, Barron and Committee of the Company. Davis would otherwise receive Capital City Trust Company, an under the Retirement Plan if indirect wholly-owned these benefits were not subsidiary of the Company, limited by the tax laws. serves as trustee of the trust Participants under the fund into which funds Retirement Plan receive contributed under the 401(k) benefits determined by a plan and the earnings under formula that is based on the 401(k) plan are held. One average monthly compensation. investment option provided by Due to the tax law the 401(k) plan is a fund of limitations, the relative the Company's common stock. benefits payable to Messrs. Up to 50,000 shares of common Smith, Barron and Davis are stock may be purchased under significantly less than those the 401(k) plan. During of other Retirement Plan fiscal year 2001, no shares of participants. The common stock were issued under supplemental plan provides the 401(k) plan, but plan additional benefits, which, participants made open market when combined with benefits purchases in the amount of payable under the Retirement 1,747 shares. Purchases of Plan, approximate 60 percent the Company's common stock of average monthly under this plan are voluntary, compensation, which more and the Company does not closely aligns the benefits restrict the sale of its payable to Messrs. Smith, common stock under the 401(k) Barron and Davis with those of plan. other Retirement Plan participants. The Supplemental Plan is not a qualified plan under the tax laws. The Company has no obligation to fund the supplemental plan but accrues for its anticipated obligations under the supplemental plan on an annual basis. FIVE-YEAR PERFORMANCE GRAPH This performance graph compares the cumulative total shareholder return on the Company's common stock with the NASDAQ - Total US and the NASDAQ Bank Index for the past five years. The graph assumes that $100 was invested on December 31, 1996 in the Company's common stock and each of the above indices, and that dividends are reinvested. The shareholder return shown below for the five-year historical period may not be indicative of future performance. Capital City Bank Group, Inc. [PERFORMANCE GRAPH APPEARS HERE] -------- AUDITORS -------- The Audit Committee is in the process of selecting an independent auditor for Capital City Bank Group for the fiscal year ending December 31, 2002. This process was not complete as of the mailing of this Proxy Statement. For this reason, the shareowners of Capital City Bank Group are not being requested to ratify the selection of the Company's auditors this year. Once the Audit Committee completes its review, it will recommend to the Board of Directors the selection of an independent auditor for the Company for fiscal year 2002. The Company's current auditing firm, Arthur Andersen LLP, has served as its independent auditors since the 1994 fiscal year. With respect to fiscal year 2002, the independent auditor selected for the Company will audit the Company's consolidated financial statements, provide limited reviews of quarterly reports, perform services related to filings with the Securities and Exchange Commission and other non-audit related services. Fees billed to Capital City Bank Group by Arthur Andersen LLP during fiscal 2001 were as follows: Audit Fees - Audit fees billed to Capital City Bank Group by Arthur Andersen LLP during the Company's 2001 fiscal year for audit of the Company's annual financial statements and review of the financial statements included in the Company's quarterly reports on Form 10-Q totaled $180,200. Financial Information Systems Design and Implementation Fees - The Company did not engage Arthur Andersen LLP to provide advice to the Company regarding financial information systems design and implementation during the fiscal year ended December 31, 2001. All Other Fees - Other fees billed to the Company by Arthur Andersen LLP during the Company's 2001 fiscal year totaled $194,077. These fees include $79,100 for audit related services and $114,977 for non-audit services. All Other Fees consist primarily of fees for preparation of income and property tax returns, co-sourcing of the information technology internal audit, acquisition related filings with the SEC and auditing of the Company's retirement plans. The Audit Committee has determined that the non-audit services provided by Arthur Andersen LLP during the fiscal year ended December 31, 2001 were compatible with maintaining their independence. Representatives of Arthur Andersen LLP may be present at the meeting to respond to appropriate questions and to make any statements as they may desire. ------------- ANNUAL REPORT ------------- The Company has filed an annual report for the fiscal year ended December 31, 2001 on Form 10-K with the Securities and Exchange Commission. Shareowners may obtain, free of charge, a copy of the Company's annual report on Form 10-K by writing to the Chief Financial Officer at the Company's corporate address. CAPITAL CITY BANK GROUP, INC. 217 North Monroe Street Tallahassee, Florida 32301 PROXY FOR ANNUAL MEETING OF SHAREOWNERS APRIL 23, 2002 KNOW ALL MEN BY THESE PRESENTS that I, the undersigned shareowner of Capital City Bank Group, Inc. (the "Company"), Tallahassee, Florida, do hereby nominate, constitute and appoint Randolph M. Pople and Dale A. Thompson, or any one of them (with full power to act alone), my true and lawful attorneys proxies with full power of substitution, for me and in my name, place and stead to vote all the shares of Common Stock of the Company, standing in my name on its books as of the close of business on Wednesday, March 6, 2002, at the annual meeting of its shareowners to be held at University Center Club, Building B, Floor 3, University Center, Florida State University, Tallahassee, Florida, on Tuesday, April 24, 2001, at 4:00 p.m., or at any adjournments thereof with all the power the undersigned would possess if personally present. (Continued and to be signed on the other side) ANNUAL MEETING OF SHAREHOLDERS OF CAPITAL CITY BANK GROUP, INC. Tuesday, April 23, 2002 PROXY VOTING INSTRUCTIONS TO VOTE BY MAIL --------------- Please date, sign and mail your proxy card in the envelope provided as soon as possible. TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY) -------------------------------------------- Please call toll-free 1-800-PROXIES and follow the instructions. Have you control number and the proxy card available when you call. TO VOTE BY INTERNET ------------------- Please access the web page at "www.voteproxy.com" and follow the on-screen instructions. Have your control number available when you access the web page. YOUR CONTROL NUMBER IS ----> Please Detach and Mail in the Envelope Provided [x] Please mark your votes as in this example. (1) To elect the three persons listed at right as Class II directors of the Company to serve a term of three years each, or until their successors are duly elected and qualified. Nominees: Thomas A. Barron Lina S. Knox John R. Lewis FOR [ ] WITHHOLD [ ] INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below. ---------------------------------------------- (2) In the discretion of the Board of Directors of the Company, to approve such other business properly coming before the meeting or any adjournment of the meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSAL 1. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE. THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTIONS ARE GIVEN ON THE PROXY, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED FOR PROPOSAL 1 AND AS DETERMINED BY THE BOARD OF DIRECTORS ON ANY OTHER MATTER WHICH MAY PROPERLY BE BROUGHT AT THE MEETING. The undersigned Shareowner(s) hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. Signature Signature ---------------------- --------------------- Dated: ---------------- Note: When signed as attorney, personal representative, administrator, trustee or guardian, please give full title. If more than one trustee, all should sign. If owned jointly, at least one joint owner must sign. If by a corporation please sign full name by president or other authorized officer. If by a partner ship please sign by an authorized person.