UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
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Statement Pursuant to Section 14(a) of
the
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the Registrant ý
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o Definitive
Additional Materials
o Soliciting
Material Pursuant to § 240-14a-12
CAPITAL CITY BANK GROUP,
INC.
(Exact
name of Registrant as specified in its charter)
_________________________________________________
(Name of
Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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fee required.
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computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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Notice
of 2008 Annual Meeting
of
Shareowners and Proxy Statement
217 North Monroe Street
Tallahassee,
Florida 32301
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CONTENTS
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LETTER
TO SHAREOWNERS
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NOTICE
OF ANNUAL MEETING OF SHAREOWNERS
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PROXY
STATEMENT
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General
Information
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1
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Corporate
Governance
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3
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Board
and Committee Membership
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5
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Director
Compensation
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7
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Proposal
No. 1 – Nominees for Election as Directors
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9
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Continuing
Directors and Executive Officers
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10
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Share
Ownership
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12
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Executive
Officers and Transactions with Related Persons
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14
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Executive
Compensation
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16
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Audit
Committee Report
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30
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Proposal
No. 2 –Ratification of Auditors
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31
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Audit
Fees and Related Matters
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32
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Other
Matters
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33
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i
217
North Monroe Street
Tallahassee,
Florida 32301
March 28,
2008
Dear
Fellow Shareowners:
You are
cordially invited to attend the 2008 Annual Meeting of Shareowners at 10:00
a.m., Eastern Time, on Thursday, April 24, 2008, at the University Center Club,
Building B, Floor 3, University Center, Florida State University, 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 and ratify the appointment of our accountants for fiscal
2008.
Your
Board of Directors encourages every shareowner to vote. Your vote is very
important. Whether or not you plan to attend the meeting, we
hope you will vote as soon as possible. You may vote by mailing a
completed proxy card, by telephone, or over the Internet. Voting your
proxy will ensure your representation at the Annual Meeting.
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,
William
G. Smith, Jr.
Chairman,
President,
and Chief
Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
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BUSINESS (1)
Elect
three Class II directors to the Board of Directors;
(2) Ratify
the appointment of Ernst & Young LLP as our independent registered
public
accounting firm for the
current fiscal year; and
(3) Transact
other business properly coming before the meeting or any postponement
or
adjournment
of the
meeting.
DOCUMENTS The
Proxy Statement, proxy card, and Capital City Bank Group Annual Report are
included in this mailing.
RECORD DATE Shareowners
owning Capital City Bank Group shares at the close of business on February
29, 2008, are entitled to notice of, attend, and vote at the
meeting. A list of these shareowners will be available at the
Annual Meeting and for 10 days before the Annual Meeting between the hours
of 9:00 a.m. and 5:00 p.m., at our principal executive offices at 217
North Monroe Street, Tallahassee, Florida 32301.
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TIME 10:00
a.m., Eastern Time, April 24, 2008
PLACE University
Center Club
Building
B, Floor 3
University
Center
Florida
State University
Tallahassee,
Florida
VOTING Even
if you plan to attend the meeting in Tallahassee, Florida, please provide
us your voting 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; and
(3) Mail
- mark, sign, and date the proxy card and return in the enclosed
postage-paid envelope.
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By
Order of the Board of Directors
 J.
Kimbrough Davis
Executive
Vice President, Chief Financial Officer,
and
Corporate Secretary
Tallahassee,
Florida
March
28, 2008
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Why
am I receiving this Proxy Statement and proxy card?
We are
providing these proxy materials in connection with the solicitation by the Board
of Directors of Capital City Bank Group, Inc., a Florida corporation, of proxies
to be voted at our 2008 Annual Meeting of Shareowners and at any adjournments or
postponements of this Annual Meeting.
We will
hold our 2008 Annual Meeting at 10:00 a.m., Eastern Time, Thursday,
April 24, 2008, at the University Center Club, Building B, Floor 3,
University Center, Florida State University, Tallahassee, Florida.
We are
providing this Proxy Statement and the proxy card to our shareowners on or about
March 28, 2008.
At
Capital City, and in this Proxy Statement, we refer to our employees as
“associates.” Also in the Proxy Statement, we refer to
Capital City as the “Company,” “we,” or “us” and to the 2008 Annual Meeting
as the “Annual Meeting.”
What
is being voted upon?
You are
being asked to elect three Class II directors and to ratify our appointment of
Ernst & Young LLP as our independent registered public accounting firm for
2008. The proposals to be considered will not create appraisal or
dissenter’s rights.
How
does the Board recommend that I vote?
Our Board
recommends that you vote your shares FOR each of the nominees for
election to the Board and FOR the ratification of the
appointment of our independent registered public accounting firm.
Could
other matters be decided at the Annual Meeting?
We are
not aware of any matters to be presented at the Annual Meeting other than those
referred to in this Proxy Statement. If other matters are properly
presented at the Annual Meeting, the holders of the proxies (those persons named
on your proxy card) will have the discretion to vote on those matters for
you.
Who
can vote?
All
shareowners of record at the close of business on the record date of February
29, 2008 are entitled to receive these proxy materials. On that date,
there were 17,179,096 shares of our common stock outstanding and entitled to
vote, and these shares were held of record by approximately 1,750
shareowners.
How
much does each share count?
Each
share counts as one vote. For the proposals scheduled to be voted
upon at the Annual Meeting, withheld votes on directors, abstentions, and shares
held 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;
however, pursuant to a recent amendment to our Bylaws, if a director nominee in
an uncontested election does not receive at least a majority of the votes cast
at any meeting for the election of directors at which a quorum is present, the
director must tender his or her resignation to the Board, as more particularly
described under the heading “Corporate Governance-Director
Elections.” There is no cumulative voting.
How
many votes are required to have a quorum?
In order
for us to conduct the Annual Meeting, a majority of the shares entitled to vote
must be present in person or by proxy.
How
many votes are required to elect directors and to ratify Ernst & Young’s
appointment?
Directors
are elected by a plurality of the votes cast. “Plurality” means that
the nominees receiving the largest number of votes cast are elected as directors
up to the maximum number of directors who are nominated to be elected at the
meeting. At our Annual Meeting, the maximum number of directors to be
elected is three. Although our directors are elected by plurality, we
have recently amended our Bylaws such that if a director nominee in an
uncontested election does not receive at least a majority of the votes cast at
any meeting for the election of directors at which a quorum is present, the
director must tender his or her resignation to the Board.
Ernst
& Young’s appointment will be ratified if the affirmative votes cast by the
shareowners present, or represented, at the Annual Meeting and entitled to vote
on the matter exceed the votes cast in opposition.
What
is the difference between holding shares as a shareowner of record and as a
beneficial owner?
Many of
our shareowners hold their shares through a broker, trustee, or other nominee
rather than directly in their own name. As summarized below, there
are some distinctions between shares held of record and those shares owned
beneficially.
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§
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Shareowner of
Record. If your shares are registered directly in your
name with our transfer agent, American Stock Transfer & Trust Company,
you are considered, with respect to those shares, the “shareowner of
record.” As the shareowner of record, you have the right to
grant your voting proxy directly to us or to a third party, or to vote in
person at the Annual Meeting.
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Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
1
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§
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Beneficial
Owner. If your shares
are held in a brokerage account, by a trustee or, by another nominee, you
are considered the “beneficial owner” of those shares. As the
beneficial owner of those shares, you have the right to direct your
broker, trustee, or nominee how to vote and you also are invited to attend
the Annual Meeting. However, because a beneficial owner is not
the shareowner of record, you may not vote these shares in person at the
Annual Meeting unless you obtain a “legal proxy” from the broker, trustee
or nominee that holds your shares, giving you the right to vote the shares
at the Annual Meeting.
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How
do I vote my shares in person at the Annual Meeting?
Shares
held in your name as the shareowner of record may be voted in person at the
Annual Meeting. Shares for which you are the beneficial owner but not
the shareowner of record may be voted in person at the Annual Meeting only if
you obtain a legal proxy from the broker, trustee, or other nominee that holds
your shares giving you the right to vote the shares. Even if you plan
to attend the Annual Meeting, we recommend that you vote by proxy as described
below so that your vote will be counted if you later decide not to attend the
Annual Meeting.
The vote
you cast in person will supersede any previous votes that you submitted, whether
by Internet, phone, or mail.
How
can I vote my shares without attending the Annual Meeting?
Whether
you hold shares directly as a shareowner of record or through a broker, trustee,
or other nominee, you may direct how your shares are voted without attending the
Annual Meeting. You may give voting instructions 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.
How
will my voting instructions be treated?
If you
provide specific voting instructions, your shares will be voted as
instructed.
If you
hold shares as the shareowner of record and sign and return a proxy card or vote
by telephone or Internet without giving specific voting instructions, then your
shares will be voted as recommended by our Board of Directors.
If you
are the beneficial owner of shares held through a broker, trustee, or other
nominee, and you do not give instructions to that nominee on how you want your
shares voted, then generally your nominee can vote your shares on certain
“routine” matters. At our Annual Meeting, both Proposals 1 and 2 are
considered routine, which means that your broker, trustee, or other nominee can
vote your shares on these proposals if you do not timely provide instructions to
vote your shares.
If you
are the beneficial owner of shares held through a broker, trustee, or other
nominee, and that nominee does not have discretion to vote your shares on a
particular proposal and you do not give your broker instructions on how to vote
your shares, then the votes will be considered broker non-votes. A
“broker non-vote” will be treated as unvoted for purposes of determining
approval for the proposal and will have the effect of neither a vote for nor a
vote against the proposal.
What
is the deadline for voting my shares?
If you
hold shares as the shareowner of record, then your vote by proxy must be
received before 11:59 p.m., Eastern Time, on April 23, 2008 (the day before the
Annual Meeting).
If you
are the beneficial owner of shares held through a broker, trustee, or other
nominee, please follow the instructions provided by your broker, trustee, or
other nominee.
Can
I change my vote?
Yes, you
may revoke your proxy by submitting a later proxy or by written request received
by our corporate secretary before the Annual Meeting. You may also revoke your
proxy at the Annual Meeting and vote in person.
Who
pays for soliciting proxies?
We pay the cost of soliciting
proxies. Our officers or other associates may solicit proxies to have
a larger representation at the Annual Meeting.
What
does it mean if I get more than one proxy card?
You will
receive a proxy card for each account you have. Please vote proxies
for all accounts to ensure that all your shares are voted.
Where
can I find voting results of the Annual Meeting?
We will
announce preliminary voting results at the Annual Meeting and publish final
voting results in our quarterly report on Form 10-Q for our quarter ended June
30, 2008 or, if we elect, in an earlier filed Form 8-K.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
2
CORPORATE GOVERNANCE
GOVERNING
PRINCIPLES
We are a
financial holding company managed by a core group of officers and governed by a
Board of Directors. We are committed to maintaining a business
atmosphere where only the highest ethical standards and integrity
prevail. An unwavering adherence to high ethical standards provides a
strong foundation on which our business and reputation can thrive, and is
integral to creating and sustaining a successful, high-caliber
company.
INDEPENDENT
DIRECTORS
Our
common stock is listed on the NASDAQ Global Select Market. NASDAQ
requires that a majority of our directors be “independent,” as defined by
NASDAQ’s rules. Generally, a director does not qualify as an
independent director if the director or a member of a director’s immediate
family has had in the past three years certain relationships or affiliations
with us, our external or internal auditors, or other companies that do business
with us. Our Board has affirmatively determined that a majority of
our directors are independent directors under the categorical guidelines our
Board has adopted, which includes all objective standards of independence set
forth in the NASDAQ rules. The categorical independence standards
adopted by our Board are posted to the Corporate Governance section of our
website, www.ccbg.com. Based
on these standards, our Board determined that our independent directors include
the following current directors and nominees for director: DuBose Ausley,
Frederick Carroll, III, Cader B. Cox, III, J. Everitt Drew, John K.
Humphress, Lina S. Knox, Ruth A. Knox, and Henry Lewis III.
CORPORATE
GOVERNANCE GUIDELINES
The Board
has adopted Corporate Governance Guidelines that give effect to the NASDAQ
corporate governance listing standards and various other corporate governance
matters.
INDEPENDENT
DIRECTOR MEETINGS IN EXECUTIVE SESSIONS
Our
independent directors have established a policy to meet separately from the
other directors in regularly scheduled executive sessions at least twice
annually, and at such other times as may be deemed appropriate by our
independent directors. Any independent director may call an executive
session of independent directors at any time. In 2007, the
independent directors met in an executive session five times.
LEAD
DIRECTOR
The
independent directors of our Board of Directors annually elect an independent
director to serve in a lead capacity. Although annually elected, the
lead director is generally expected to serve for more than one
year.
Mr. Cox
currently serves as our lead director. Effective May 1, 2008, Mr.
Drew will begin to serve as our lead director. The lead director’s
duties, which are listed in a Board approved charter, include presiding at all
meetings of the Board at which the Chairman is not present, calling meetings of
the independent directors, coordinating with the Chairman the planning of
meeting agenda items, and serving as an independent point of contact for
shareowners wishing to communicate with the Board other than through the
Chairman. We have posted all of the lead director duties on our
website, www.ccbg.com.
SHAREOWNER
COMMUNICATIONS
Our
Corporate Governance Guidelines provide for a process by which shareowners may
communicate with the Board, a Board committee, the independent directors as a
group, or individual directors. Shareowners who wish to communicate
with the Board, a Board committee, or any other directors or individual
directors may do so by sending written communications addressed to the Board of
Directors of Capital City Bank Group, a Board committee, or such group of
directors or individual directors:
Capital
City Bank Group, Inc.
c/o
Corporate Secretary
217 North
Monroe Street
Tallahassee,
Florida 32301
Communications
will be compiled by our Corporate Secretary and submitted to the Board, a
committee of the Board, or the appropriate group of directors or individual
directors, as appropriate, at the next regular meeting of the
Board. The Board has requested that the Corporate Secretary submit to
the Board all communications received, excluding those items that are not
related to board duties and responsibilities, such as: mass mailings; job
inquiries and resumes; and advertisements, solicitations, and
surveys.
CODES
OF CONDUCT AND ETHICS
The Board
has adopted Codes of Conduct applicable to all directors, officers, and
associates, and a Code of Ethics applicable to our Chief Executive Officer and
our financial and accounting officers, all of which are available, without
charge, upon written request to:
Capital
City Bank Group, Inc.
c/o
Corporate Secretary
217 North
Monroe Street
Tallahassee,
Florida 32301
These
codes are designed to comply with NASDAQ and U.S. Securities and Exchange
Commission requirements.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
3
BOARD
AND COMMITTEE EVALUATIONS
The
Corporate Governance Committee uses written questionnaires to evaluate the Board
as a whole and its committees. The evaluation process occurs
annually. Directors submit completed questionnaires to the Chair of
the Corporate Governance Committee, who summarizes the results without
attribution. The full Board discusses the summary of the Board
evaluation, and each committee discusses the summary of its own
evaluation.
DIRECTOR
NOMINATING PROCESS
The
Nominating Committee annually reviews and makes recommendations to the full
Board regarding the composition and size of the Board so that the Board consists
of members with the proper expertise, skills, attributes, and personal and
professional backgrounds needed by the Board, consistent with applicable NASDAQ
and regulatory requirements.
The
Nominating Committee believes that all directors, including nominees, should
possess the highest personal and professional ethics, integrity, and values, and
be committed to representing the long-term interests of our
shareowners. The Nominating Committee will consider criteria
including the nominee’s current or recent experience as a senior executive
officer, whether the nominee is independent, as that term is defined in Rule
4200(a)(15) of the NASDAQ listing standards, the business experience currently
desired on the Board, geography, the nominee’s banking industry experience, and
the nominee’s general ability to enhance the overall composition of the
Board.
Our
Nominating Committee will identify nominees for directors primarily based upon
suggestions from shareowners, current directors, and executives. The
Chair of the Nominating Committee and at least one other member of the
Nominating Committee will interview director candidates. The full
Board will formally nominate candidates for director to be included in the slate
of directors presented for shareowner vote based upon the recommendations of the
Nominating Committee following this process.
DIRECTOR
SERVICE ON OTHER BOARDS
Directors
may not serve on more than three other Boards of public companies in addition to
our Board.
SUCCESSION
PLANNING
The Board
plans for succession to the position of Chief Executive Officer as well as
certain other senior management positions. To assist the Board,
William G. Smith, Jr., our Chairman, President, and CEO annually provides the
Board with an assessment of senior managers and of their potential to succeed
him. He also provides the Board with an assessment of persons
considered potential successors to certain senior management
positions. The Nominating Committee and our independent directors in
an executive session annually review this updated assessment.
CHANGE
IN DIRECTOR OCCUPATION
A
director whose principal occupation or business association changes
substantially during the director’s tenure must tender a resignation for
consideration by the Nominating Committee. The Nominating Committee
will recommend to the Board the action, if any, to be taken with respect to the
resignation.
DIRECTOR
ELECTIONS
In
November 2007, the Board of Directors amended our Bylaws to provide that in an
uncontested election, if a nominee for director does not receive the vote of at
least the majority of the votes cast at any meeting for the election of
directors at which a quorum is present, the director will promptly tender his or
her resignation to the Board of Directors. The Nominating Committee
will make a recommendation to the Board of Directors as to whether to accept or
reject the tendered resignation, or whether other action should be
taken. The Board of Directors will act on the tendered resignation
and publicly disclose its decision and the rationale behind the decision within
90 days from the date of the certification of the election
results. If a director’s resignation is not accepted by the Board of
Directors, such director will continue to serve until the next annual meeting
for the year in which his or her term expires and until his or her successor is
duly elected, or his or her earlier resignation or removal. If a
nominee’s resignation is accepted by the Board of Directors, then the Board of
Directors, in its sole discretion, may fill any remaining vacancy or decrease
the size of the Board of Directors. To be eligible to be a nominee for election
or reelection as our director, a person must deliver to our Corporate Secretary
a written agreement that such person will abide by these
requirements.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
4
BOARD
OF DIRECTORS
Our Board
of Directors oversees our business, property, and affairs pursuant to the
Florida Business Corporation Act and our Articles of Incorporation and
Bylaws. Members of our Board are kept informed of our business
through discussions with our senior management team, by reviewing materials
provided to them, and by participating in Board and Committee
meetings.
Our Board
met 11 times in 2007. All of our directors attended at least 75
percent of the total aggregate number of Board and Committee meetings on which
they served.
We expect
all directors to attend our Annual Meeting. All directors, who were
directors at the time of our Annual Meeting in 2007, attended the Annual
Meeting.
COMMITTEES
OF THE BOARD
Our Board
of Directors has four standing committees: Audit, Compensation, Corporate
Governance, and Nominating. The Board has adopted written charters
for each of its four standing committees. The Audit, Compensation,
and Nominating Committee charters are published on the Corporate Governance
section of our website at www.ccbg.com. The
Board has determined that all members of the Audit, Compensation, Corporate
Governance, and Nominating Committees are “independent” as that term is defined
under applicable NASDAQ and Securities and Exchange Commission
rules. As of January 1, 2008, the committee composition was as
follows:
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Name
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Audit
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Compensation
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Corporate
Governance
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Nominating
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DuBose
Ausley
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X
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X
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Thomas
A. Barron
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Frederick
Carroll, III*
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Chair
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Cader
B. Cox, III
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Chair
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X
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J. Everitt
Drew*
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X
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X
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John
K. Humphress*
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X
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Chair
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L.
McGrath Keen, Jr.
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Lina
S. Knox
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X
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X
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Ruth
A. Knox
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X
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Chair
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Henry
Lewis III
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X
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X
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William
G. Smith, Jr.**
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* Qualifies
as a financial expert
** Chairman
of the Board of Directors
Audit
Committee
The Audit
Committee met 14 times in 2007. Our Board has determined that
Frederick Carroll, III, Chairman of the Audit Committee, John K. Humphress, and
J. Everitt Drew are each an “audit committee financial expert” as defined by the
Securities and Exchange Commission.
Management
has the primary responsibility for our financial statements and reporting
process, including the systems of internal controls and
reporting. Our independent auditors are responsible for performing an
independent audit of our consolidated financial statements in accordance with
U.S. generally accepted auditing standards, issuing a report thereon, and
annually opining on the effectiveness of our internal control over financial
reporting. The Audit Committee monitors the integrity of our
financial reporting process, system of internal controls, and the independence
and performance of our independent and internal auditors.
In
addition, the Audit Committee: (a) monitors and reviews our
compliance with Section 112 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 and reviews regulatory reports; (b) reviews independent
auditors’ report on our financial statements, significant changes in accounting
principles and practices, significant proposed adjustments, and any unresolved
disagreements with management concerning accounting or disclosure matters; and
(c) recommends independent auditors and reviews their independence and
qualifications, services, fees, and the scope and timing of audits.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
5
Compensation
Committee
The
Compensation Committee met six times in 2007. The Compensation
Committee: (a) reviews and approves corporate goals and objectives relevant to
the Chief Executive Officer’s compensation, evaluates the performance of the
Chief Executive Officer in light of those goals and objectives, and sets the
Chief Executive Officer’s base salary, short-term incentive compensation, and
long-term incentive compensation based on this evaluation; (b) reviews and
approves base salary, short-term incentive compensation, and long-term incentive
compensation of our executive officers; (c) reviews the compensation of our
senior management team other than our executive officers; (d) reviews and
approves benefits, including retirement benefits and perquisites of our
executive officers; (e) reviews and approves employment agreements, severance
agreements, and change-in-control agreements for executive officers; (f)
evaluates and recommends the appropriate level of director compensation,
including compensation for service as a member or chair of a Board committee;
and (g) establishes and reviews stock ownership guidelines for directors and
executive officers.
Nominating
Committee
The
Nominating Committee met three times in 2007. The Nominating
Committee: (a) develops and reviews background information for
candidates for the Board of Directors, including candidates recommended by
shareowners, and makes recommendations to the Board of Directors about these
candidates; (b) evaluates the performance of current Board members proposed for
reelection; (c) recommends to the Board for approval a slate of nominees for
election to the Board; (d) reviews all candidates for nomination submitted by
shareowners; and (e) develops plans for our managerial succession.
Corporate
Governance Committee
The
Corporate Governance Committee met seven times in 2007. The Corporate
Governance Committee: (a) develops, implements, and monitors policies and
practices relating to corporate governance; (b) coordinates director orientation
and appropriate continuing education programs for directors; (c) oversees the
annual self-assessment of the Board and Board Committees; and (d) reviews all
shareowner proposals.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
6
COMPENSATION
ELEMENTS
We
currently have eight non-associate directors who qualify for compensation for
Board service. The elements of compensation include:
Cash
Compensation
Basic Annual
Retainer. The basic annual retainer is
$12,000. There was no change from 2006.
Audit
Committee. Members of the Audit Committee receive an annual
fee of $6,000 and the chairman of the Audit Committee receives an annual
chairman fee of $6,000. There was no change from 2006.
Compensation
Committee. Members of the Compensation Committee receive an
annual fee of $4,000 and the chairman of the Compensation Committee receives an
annual chairman fee of $4,000. There was no change from
2006.
Nominating
Committee. Members of the
Nominating Committee receive an annual fee of $2,000 and the chairman of the
Nominating Committee receives an annual chairman fee of $2,000. There
was no change from 2006.
Corporate
Governance Committee. Members of the Corporate Governance
Committee receive an annual fee of $2,000 and the chairman of the Corporate
Governance Committee receives an annual chairman fee of $2,000. There
was no change from 2006.
Lead Outside
Director Annual Fee. The Lead Outside
Director receives an annual fee of $2,000. There was no change from
2006.
Board Meeting
Fees. Directors receive
$750 for each board meeting attended. There was no change from
2006.
Equity
Compensation
Quarterly Stock
Grant. As part of annual director compensation, each director
who participates in our Director Stock Purchase Plan earns 100 shares of our
common stock per quarter, price based on the closing price of our common stock
on the NASDAQ as determined on the last stock trading day of the
quarter. Directors not participating in our Director Stock Purchase
Plan receive all 400 shares each January in the year following the year for
which service relates based on the average of the high and low prices of the
shares of our common stock on the NASDAQ for the last 10 trading days of the
previous year.
Director Stock
Purchase Plan. Directors are
also permitted to purchase shares of common stock at a 10% discount from fair
market value under the Director Stock Purchase Plan. This Plan had 93,750 shares
of common stock authorized for issuance. During 2007, 10,238 shares
were purchased. As of December 31, 2007, there were 66,209 shares of
common stock available for issuance. Purchases under this Plan were
not permitted to exceed the annual retainer and committee and meeting fees
received. Our shareowners adopted the Director Stock Purchase Plan at
our 2004 Annual Meeting.
Perquisites
and Other Personal Benefits
We
provide directors with perquisites and other personal benefits that we believe
are reasonable, competitive and consistent with our overall director
compensation program. The value of the perquisites for each director
in the aggregate is less than $10,000.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
7
DIRECTOR
COMPENSATION TABLE
The
following table sets forth a summary of the compensation we paid to our
directors, other than directors who are also executive officers, in
2007:
|
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards
($)(1)
|
All
Other Compensation(2)
($)
|
Total
($)
|
|
|
DuBose
Ausley
|
$ 23,000 | $ 10,683 | $ 0 | $ 33,683 | |
|
Frederick
Carroll, III
|
31,500 | 11,122 | 0 | 42,622 | |
|
Cader
B. Cox, III
|
33,000 | 11,122 | 2,500 | 46,622 | |
|
J.
Everitt Drew
|
31,000 | 10,683 | 0 | 41,683 | |
|
John
K. Humphress
|
30,250 | 10,683 | 0 | 40,933 | |
|
L.
McGrath Keen, Jr.
|
0 | 0 | 0 | 0 | (3) |
|
Lina
S. Knox
|
22,250 | 10,683 | 0 | 32,933 | |
|
Ruth
A. Knox
|
30,250 | 11,122 | 1,000 | 42,372 | |
|
Henry
Lewis III
|
26,250 | 11,122 | 0 | 37,372 |
|
1.
|
We
pay each non-employee director an annual stock grant of 400 shares of our
common stock, issued under our Director Stock Purchase
Plan. Under the terms of the Director Stock Purchase Plan, each
non-employee director has the opportunity to participate in the Director
Stock Purchase Plan under two separate options. The first
option, Option A, permits non-employee directors to make an election
(“Option A Participants”) each January indicating the dollar amount of his
or her annual retainer and fees received from serving as a director in the
preceding year which he or she would like to be applied to the purchase of
shares of our common stock. The second option, Option B,
permits non-employee directors to make an election (“Option B
Participants”) each December indicating the percentage of his or her
annual retainer and fees to be received from serving as a director in the
upcoming year which he or she would like to be applied to the purchase of
shares of Common Stock. Option A Participants receive their
annual stock grant each January for the preceding year’s service as
director. Option B Participants will receive their annual stock
grant in four equal quarterly installments during the year to which the
non-employee director’s service relates. Messrs. Drew,
Humphress, and Ausley and Ms. Lina Knox are Option A Participants, and
therefore did not receive their stock grants in 2007. Instead,
these directors received their stock grants in January
2008. The amounts recognized in the fiscal year for financial
statement reporting purposes in accordance with Statement of Financial
Accounting Standards 123, as revised (SFAS 123(R)) are the same as the
amount reported in this column.
|
|
2.
|
The
amounts in this column represent director fees paid to the director for
serving as directors for certain subsidiaries of
ours.
|
|
3.
|
Mr.
Keen has been employed by Capital City Bank since the acquisition of
Farmers and Merchants Bank in October 2004. As our associate,
Mr. Keen receives a base salary, and may receive other benefits that our
associates receive, such as pension benefits. He received no
compensation for his board service in
2007.
|
STOCK
OWNERSHIP EXPECTATIONS
We
maintain stock ownership guidelines for all independent directors. Under our
current guidelines, all independent directors are expected to own our common
stock equal in value to 10 times their annual director compensation at the time
they were elected. Directors have 10 years from the date they are first
appointed or elected to our Board to meet the stock ownership
requirement. The Compensation Committee has determined that as of
December 31, 2007, all directors have met our share ownership expectations or
are on track to meet the ownership expectations within the stated time period of
10 years from date of appointment or election.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
8
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
Annual Meeting, the shareowners will elect three Class II
directors. The Board of Directors proposes the following three
nominees for election as directors at the Annual Meeting. 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.
The Board
of Directors has been set at 11 members. If all three director
nominees are elected, the Board of Directors will have no
vacancies.
Majority Vote Standard for Election
of Directors. Our Bylaws require that each director be elected
by a plurality of votes cast with respect to such director in uncontested
elections. Our Bylaws, however, also provide that in an uncontested
election, if a nominee for director does not receive the vote of at least the
majority of the votes cast at any meeting for the election of directors at which
a quorum is present, the director will promptly tender his or her resignation to
the Board of Directors. In a contested election (a situation in which
the number of nominees exceeds the number of directors to be elected), the
standard for election of directors would be a plurality of the shares
represented in person or by proxy at any such meeting and entitled to vote on
the election of directors. Whether an election is contested or not is
determined as of a date that is the day immediately preceding the date we first
mail our notice of meeting for such meeting to the shareowners; this year’s
election was determined to be an uncontested election, and the majority vote
standard will apply.
NOMINEES
TO SERVE FOR A THREE-YEAR TERM EXPIRING IN 2011
|
|
THOMAS
A. BARRON
Mr.
Barron, 55, has been a director since 1982. He is our Treasurer
and was appointed President of Capital City Bank in
1995.
|
|
|
|
J.
EVERITT DREW
Mr.
Drew, 52, has been a director since 2003. From 2000 through
January 2007, he was President of St. Joe Land Company where his duties
included overseeing the sale and development efforts of several thousand
acres of St. Joe property in northwest Florida and southwest Georgia.
Since January 2007, Mr. Drew has been President of SouthGroup Equities,
Inc., a private real estate investment and development
company.
|
|
|
|
LINA
S. KNOX
Ms.
Knox, 63, has been a director since 1998. She is a dedicated
community volunteer. Ms. Knox is the first cousin of Mr.
Smith.
|
|
|
The
Board of Directors unanimously recommends a vote “FOR” the
nominees.
|
||
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
9
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
CONTINUING
CLASS III DIRECTORS (Term expiring in 2009)
|
|
DuBOSE
AUSLEY
Mr.
Ausley, 70, has been a director since 1982, and was our Chairman from 1982
until 2003. He is employed by the law firm of Ausley &
McMullen and was Chairman of this firm and its predecessor for more than
20 years until 2002. Since 1992, he has served as a director of
TECO Energy, Inc. In addition, Mr. Ausley has served as a
director of Huron Consulting Group, Inc. since 2004 and a director of Blue
Cross and Blue Shield of Florida, Inc. since 1982.
|
|
|
|
FREDERICK
CARROLL, III
Mr.
Carroll, 57, has been a director since 2003. Since 1990, he has
been the Managing Partner of Carroll and Company, CPAs, an accounting firm
specializing in tax and audit based in Tallahassee,
Florida.
|
|
|
|
JOHN
K. HUMPHRESS
Mr.
Humphress, 59, has been a director since 1994. Since 1973, he
has been a shareholder of a public accounting firm, Wadsworth, Humphress,
Hollar, & Konrad, P.A. (and its predecessors).
|
|
|
|
HENRY
LEWIS III
Dr.
Lewis, 58, has been a director since 2003. He is a Professor
and Director of the College of Pharmacy and Pharmaceutical Studies at
Florida A&M University. Prior to Dr. Lewis’s appointment to
his position as director in 2004, Dr. Lewis served as Dean of the College
of Pharmacy and Pharmaceutical Studies at Florida A&M University since
1994.
|
|
|
CONTINUING
CLASS I DIRECTORS (Term expiring in 2010)
|
||
|
|
CADER
B. COX, III
Mr.
Cox, 58, has been a director since 1994. From 1976 to May 2006,
he has served as President, and since May 2006, he has served as CEO of
Riverview Plantation, Inc., a resort and agricultural
company.
|
|
|
|
L.
McGRATH KEEN, JR.
Mr.
Keen, 54, has been a director since 2004. He served as President
(2000-2004) and director (1980-2004) of Farmers and Merchants Bank, prior
to its merger with us. He was a principal shareowner of Farmers and
Merchants Bank at the time of the merger. Since 2004, Mr. Keen
has served as an associate of Capital City Bank.
|
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
10
|
|
RUTH
A. KNOX
Ms.
Knox, 54, has been a director since 2003. Since 2003, she has
served as President of Wesleyan College, Macon, Georgia. Prior
to this appointment, she practiced law in Atlanta and Macon, Georgia for
25 years.
|
|
|
|
WILLIAM G. SMITH,
JR.
Mr.
Smith, 54, is our Chairman of the Board and has been a director since
1982. In 1995, he was appointed our President and Chief
Executive Officer and Chairman of Capital City Bank. In 2003,
Mr. Smith was elected our Chairman of the Board of
Directors. Mr. Smith has served as a director of Southern
Company since February 2006. Mr. Smith is the first cousin of
Lina S. Knox.
|
|
|
NON-DIRECTOR
EXECUTIVE OFFICER
|
||
|
|
J.
KIMBROUGH DAVIS
Mr.
Davis, 54, was appointed our Executive Vice President and Chief Financial
Officer 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.
|
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
11
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and parties owning beneficially more than 10% of our common
stock, to file reports with the U.S. Securities and Exchange Commission to
reflect their interests in our common stock. Copies of these reports
must be furnished to us.
Based
solely upon on a review of these reports received by us for 2007 and any written
representations from reporting persons, we believe that during 2007 each
required Section 16(a) report for 2007 was filed on time.
SHARE
OWNERSHIP TABLE
The
following table sets forth information, as of February 29, 2008, with respect to
the number of shares of our common stock beneficially owned by our directors,
executive officers named in the Summary Compensation Table, and all executive
officers and directors as a group. The following table also provides information
with respect to each person known by us to beneficially own more than 5% of our
common stock.
As of
February 29, 2008, there were 17,179,096 shares of our common stock
outstanding.
|
Name
|
Shares Beneficially
Owned
(1)
|
Percentage
of Outstanding Shares Owned(2)
|
||
|
DuBose
Ausley
|
640,593
|
(3)
|
3.73%
|
|
|
Thomas
A. Barron
|
296,785
|
(4)
|
1.73%
|
|
|
Frederick
Carroll, III
|
6,989
|
*
|
||
|
Cader
B. Cox, III
|
402,384
|
(5)
|
2.34%
|
|
|
J.
Kimbrough Davis
|
71,400
|
(6)
|
*
|
|
|
J.
Everitt Drew
|
7,649
|
(7)
|
*
|
|
|
John
K. Humphress
|
511,455
|
(8)
|
2.98%
|
|
|
L.
McGrath Keen, Jr.
|
375,927
|
(9)
|
2.19%
|
|
|
Lina
S. Knox (10)
|
68,563
|
(11)
|
*
|
|
|
Ruth
A. Knox
|
6,092
|
*
|
||
|
Henry
Lewis III
|
4,626
|
*
|
||
|
Private
Capital Management, L.P.
8889
Pelican Bay Blvd., Naples, Florida 34108
|
1,543,721
|
(12)
|
8.99%
|
|
|
Robert
H. Smith (10)
Post
Office Box 30935, Sea Island, Georgia 31561
|
3,102,641
|
(13)
|
18.06%
|
|
|
William
G. Smith, Jr. (10)
Post
Office Box 11248, Tallahassee, Florida 32302
|
3,385,990
|
(14)
|
19.71%
|
|
|
All
Directors and Executive Officers as a Group
(12
Persons)
|
5,402,438
|
31.45%
|
||
|
|
(Please
refer to the footnotes on the following
page.)
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
12
|
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.
|
An
asterisk in this column means that the respective director or executive
officer is the beneficial owner of less than 1% of our common
stock.
|
|
3.
|
Includes
(i) 285,431 shares held in trust under which Mr. Ausley serves as
trustee and has sole voting and investment power; (ii) 12,500 shares owned
by Mr. Ausley’s wife, of which he disclaims beneficial ownership; and
(iii) 350 shares owned by Mr. Ausley and his
wife.
|
|
4.
|
Includes
(i) 56,825 shares held in trusts under which Mr. Barron serves as
trustee; (ii) 716 shares for which Mr. Barron has power of
attorney and may be deemed to be a beneficial owner; and (iii) 28,906
shares owned by Mr. Barron's wife, of which he disclaims beneficial
ownership. Of the shares of our common stock beneficially owned
by Mr. Barron, 133,799 shares are pledged as
security.
|
|
5.
|
Includes
(i) 376,015 shares held in a trust under which Mr. Cox shares voting and
investment power as a co-trustee; and (ii) 2,500 shares owned by Mr. Cox’s
wife, all of which he disclaims beneficial ownership. Of the shares
beneficially owned by Mr. Cox, 376,015 shares are also beneficially owned
by Mr. Humphress.
|
|
6.
|
Includes
(i) 1,162 shares in accounts for his children for which Mr. Davis is
custodian; (ii) 20,559 shares owned jointly by Mr. Davis and his
wife; and (iii) 5,708 shares owned by Mr. Davis’s wife, directly and
through an Individual Retirement Account of which he disclaims beneficial
ownership.
|
|
7.
|
Includes
624 shares in accounts for his children for which Mr. Drew is
custodian.
|
|
8.
|
Includes
(i) 90,890 shares held by a limited partnership of which Mr. Humphress is
a general partner and shares voting and investment power; and (ii) 376,015
shares held in a trust under which Mr. Humphress shares voting and
investment power as a co-trustee, of which he disclaims beneficial
ownership. Of the shares beneficially owned by Mr. Humphress,
376,015 shares are also beneficially owned by Mr.
Cox.
|
|
9.
|
Includes
118,490 shares held in trust of which Mr. Keen serves as sole
trustee.
|
|
10.
|
Robert
H. Smith and William G. Smith, Jr. are brothers, and Lina S. Knox is their
first cousin.
|
|
11.
|
Includes
3,750 shares owned jointly by Ms. Knox and her
husband.
|
|
12.
|
As
reported in a Schedule 13G amendment dated February 14,
2008. Private Capital Management, L.P., a registered investment
adviser, reported that it is deemed to be the beneficial owner of the
shares held by Private Capital Management’s clients and managed by Private
Capital Management. Private Capital Management reported shared
voting and investment power over 1,543,721 shares, and disclaimed
beneficial ownership of all shares.
|
|
13.
|
Includes
(i) 100,294 shares in accounts for his children for which Mr. Smith is
custodian; (ii) 569,524 shares held in certain trusts under which Mr.
Smith shares voting and investment power as a co-trustee; and (iii)
617,423 shares held by a partnership under which Mr. Smith shares voting
and investment power. Of the shares beneficially owned by
Robert H. Smith, 1,186,947 shares are also beneficially owned by
William G. Smith, Jr.
|
|
14.
|
Includes
(i) 569,524 shares held in certain trusts under which Mr. Smith
shares voting and investment power as a co-trustee; (ii) 617,423
shares held by a partnership under which Mr. Smith shares voting and
investment power; (iii) 44,644 shares owned by Mr. Smith’s wife, of which
he disclaims beneficial ownership; and (iv) 47,968 shares that may be
acquired pursuant to non-voting stock options that are or will become
exercisable within 60 days. Of the shares beneficially owned by
William G. Smith, Jr., 1,186,947 shares are also beneficially owned
by Robert H. Smith. Of the shares of our common stock
beneficially owned by Mr. Smith, 333,024 shares are pledged as
security, including 223,024 shares of the 617,423 shares held by a
partnership under which Mr. Smith shares voting and
investment.
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
13
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. Thomas A. Barron and William G.
Smith, Jr. serve as directors and executive officers and J. Kimbrough Davis is
an executive officer. 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.”
PROCEDURES FOR REVIEW, APPROVAL, OR
RATIFICATION OF RELATED PERSON TRANSACTIONS
We
recognize that related person transactions may raise questions among our
shareowners as to whether the transactions are consistent with our best
interests and our shareowners’ best interests. We generally do not enter into or
ratify a related person transaction unless our Board of Directors, acting
through the Audit Committee or otherwise, determines that the related person
transaction is in, or is not inconsistent with, our best interests and our
shareowners’ best interests. We have adopted a written Related Person
Transaction Policy, and expect to fully implement this policy in
2008.
For the
purpose of our procedures, a “related person transaction” is a transaction in
which we participate and in which any related person has a direct or indirect
material interest, other than
(1)
transactions available to all associates or clients generally, (2) transactions
involving less than $120,000 when aggregated with all similar transactions, (3)
loans made by Capital City Bank in the ordinary course of business, made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable loans with persons not related to the
lender, and not involving more than the normal risk of collectibility or
presenting other unfavorable features, or (4) employment arrangements with
executive officers that are reviewed and approved by the Compensation
Committee.
Under our
procedures, each director, executive officer, and nominee for director submits
to our designated compliance officer, to the best of his or her knowledge, the
following information: (a) a list of his or her immediate family members; (b)
for each person listed and the director, executive officer, or nominee for
director, each firm, corporation or other entity in which such person is an
executive officer, a partner or principal or in a similar position or in which
such person has a 5% or greater beneficial ownership interest; and (c) for each
person listed and the director, executive officer, or nominee for director, each
charitable or non-profit organization for which the person actively serves as a
director or trustee. We call this list our Related Parties List.
On an
ongoing basis, and to the best of their knowledge, directors and executive
officers are expected to notify our designated compliance officer of any updates
to the Related Parties List, changes regarding their employment, and
relationships with charitable organizations. On an annual basis, our designated
compliance officer re-circulates the most current information to the directors
and executive officers for review and re-verification of the information. Each
director and executive officer must either (i) update the list to reflect
changes in family, changes in employment, and the addition of new parent
companies, subsidiaries and sibling companies, or (ii) confirm in writing that
no changes have occurred.
We use
our best efforts to follow similar procedures with each shareowner who owns more
than 5% of our common stock.
Our
designated compliance officer distributes the Related Parties List (and the
periodic updates thereof) to (a) each senior manager who oversees our purchasing
decisions and (b) the Chief Financial Officer and Chief Executive Officer for
use in monitoring of corporate transactions. In addition, our designated
compliance officer distributes the portion of the Related Parties List
containing the names of immediate family members of directors, executive
officers and nominees for director to the Chief People Officer and the portion
of the Related Parties List containing the names of related charitable and
non-profit organizations to the Capital City Bank Group, Inc. Foundation,
President. The recipients of the Related Parties List use the compiled
information to implement the review and approval requirements of this
policy.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
14
We use
our best efforts to have our Audit Committee pre-approve all related person
transactions. In the event a related person transaction was not pre-approved by
the Audit Committee, the transaction is immediately submitted for the Audit
Committee’s review for ratification or attempted rescission.
Prior to
our fully implementing the policy described above, we have historically
circulated a questionnaire each quarter to our directors and executive officers,
in which each respondent was required to disclose, to the best of their
knowledge, all related person transactions that occurred in the previous
quarter. We intend to continue to circulate these questionnaires.
TRANSACTIONS
WITH RELATED PERSONS
Based on
our current practice, for the year ended December 31, 2007, we have not
identified any transactions or series of similar transactions for which we are a
party in which the amount involved exceeded or will exceed $120,000 and in which
any current director, executive officer, holder of more than 5% of our capital
stock had or will have a direct or indirect material interest.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
15
COMPENSATION
COMMITTEE PROCESS AND PROCEDURES
Scope
of Authority
The
Compensation Committee has strategic and administrative responsibility for a
broad range of issues, including reviewing, authorizing, and approving
compensation to be paid to our executive officers, directors, and our senior
management team. The Nominating Committee recommends to the Board,
and the Board appoints, each member of the Compensation
Committee. The Corporate Governance Committee has evaluated, and the
Board has determined, that each member of the Compensation Committee is an
independent director.
The
Compensation Committee’s policy is to review executive compensation, including
incentive goals, at least annually. The Compensation Committee also
periodically reviews benefits and perquisites, reviews and provides oversight of
our compensation philosophy, serves as the administrative committee for our
equity-based plans, and reviews stock ownership guidelines for our executive
officers and directors.
Delegation
of Authority
The
Compensation Committee’s charter permits the delegation of its authority to our
Chief People Officer to administer compensation and benefits
programs. In 2007, the Compensation Committee delegated the
administration of all associate compensation, benefit and welfare plans to
Bethany H. Corum, our Executive Vice President and Chief People
Officer.
None of
the members of the Compensation Committee is an executive officer of a public
company of which one of our executive officers is a director.
Independent
Consultants
In carrying out its
responsibilities, the Compensation Committee evaluates the information and
recommendations put forth by management and its independent advisors in making
its decisions regarding executive compensation. The Compensation
Committee’s decisions are made with the objective of providing fair, equitable
and performance-based compensation to executives in a manner that is affordable
and cost effective for our shareowners.
The
Compensation Committee did not engage any independent compensation consultants
in 2007.
Management’s
Role
The
Compensation Committee sets compensation for the Chief Executive Officer based
on data provided by the Chief People Officer. In addition, the
Compensation Committee reviews and approves recommendations for other executive
officers’ compensation. In making these decisions, the Compensation
Committee relies on information and recommendations provided by the Chief
Executive Officer and Chief People Officer. The key elements of
management’s role in determining compensation levels for our named executive
officers (other than William G. Smith, Jr., our Chairman, President, and Chief
Executive Officer) are as follows:
|
§
|
Develop performance
measures: identify appropriate performance measures and recommend
performance targets that are used to determine annual and long-term awards
for the Chief Executive Officer and senior managers of the
company.
|
|
§
|
Compile benchmark data:
management participates in compensation surveys through reputable
third-party firms which are used to gather data on base salary, annual
cash and long-term performance awards. In 2007, we used Watson-Wyatt’s
survey report on Financial Institution’s Compensation General Executive
Positions. The Chief People Officer also provides historical
compensation data for each position reviewed by the Compensation
Committee.
|
|
§
|
Develop compensation
guidelines: using the benchmark survey data and publicly disclosed
compensation information as the foundation, management develops
compensation guidelines for each executive position. These guidelines are
provided to the CEO as the basis for his recommendations regarding
individual compensation actions. In addition, executives are
briefed on the guidelines established for their
positions.
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
16
The key
members of management involved in the compensation process were Mr. Smith and
Ms. Corum. Mr. Smith was not present during the Compensation
Committee’s deliberations regarding his compensation. Ms. Corum
attends all meetings of the Compensation Committee to provide information to the
Compensation Committee members and to take minutes of the
meetings. At times, the Compensation Committee conducts executive
sessions. Ms. Corum is excused from all executive sessions and the
Chairman of the Committee communicates any decisions for inclusion in
minutes.
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
Compensation and
Benefits Philosophy. Our compensation
philosophy provides broad guidance on executive compensation and more
specifically on the compensation of the named executive
officers. Specifically, the compensation philosophy is
to:
|
§
|
Align
compensation with shareowner value;
|
|
§
|
Provide
a direct and transparent link between the performance of the Company and
pay for the CEO and top management;
|
|
§
|
Make
wise use of the Company’s equity resources to ensure compatibility between
management and shareowner
interests;
|
|
§
|
Align
the interests through performance-based incentive plans of the Company’s
senior executive officers with that of shareowners;
and
|
|
§
|
Award
total compensation that is both reasonable and effective in attracting,
motivating and retaining key
associates.
|
We
believe that accomplishing corporate goals is essential for our continued
success and sustained financial performance. Therefore, we believe that
executive officer compensation should be largely performance-based. Specific
targets and weightings used for establishing short-term and long-term
performance goals are subject to change at the beginning of each measurement
period, and are influenced by the Board’s desire to emphasize performance in
certain areas. Each year, the Compensation Committee reviews and approves all
executive officer performance-based goals.
The
compensation and benefits programs for our executives are designed with the goal
of providing compensation that is fair, reasonable and competitive. The programs
are intended to help us recruit and retain qualified executives, and provide
rewards that are linked to performance while also aligning the interests of
executives with those of our shareowners.
Compensation
Committee Activity in 2007. The Compensation
Committee met six times in 2007, including two executive sessions with only the
Compensation Committee members present. The chair of the Compensation
Committee sets the meeting dates and agenda for the committee.
In
January, the Compensation Committee met in Executive Session to discuss the 2006
performance of the Chief Executive Officer and to set 2007
compensation. In accordance with the Compensation Committee charter,
Compensation Committee Chairman Cader Cox distributed an evaluation to all
outside directors, and then collected and compiled the results of the
evaluations. He presented the results for review by the Compensation
Committee. Based in part on this review, the Compensation Committee
approved Mr. Smith’s 2007 base salary of $275,000 and target cash incentive of
$225,000. Mr. Smith’s base salary determination was primarily a
function of the Compensation Committee’s attempt to gradually increase Mr.
Smith’s base salary to the peer benchmark level as we discuss
below. The Compensation Committee also reviewed and approved Capital
City Bank President Thomas A. Barron’s 2007 base salary of $236,000 and target
cash incentive of $190,000 and Chief Financial Officer J. Kimbrough Davis’s 2007
base salary of $230,000 and target cash incentive of $75,000. The
increase in compensation for Messrs. Barron and Davis was primarily a function
of maintaining their compensation at the predetermined peer benchmark level as
we discuss below.
The
Compensation Committee authorized replacement of Mr. Smith’s Stock Option Plan
with a Performance Share Units Plan based on the compound annual growth rate in
Diluted Earnings Per Share over a three-year period.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
17
In March,
the Compensation Committee reviewed 2007 compensation for our 12 senior
managers. The Compensation Committee also reviewed director compensation and
made no changes to the fee structure for 2007. The Compensation
Committee approved the 2007 Profit Participation Plan at this
meeting.
In July,
the Compensation Committee met with Mr. Smith to discuss strategic
compensation issues. No actions were taken during this
meeting.
Compensation
Objectives
The
Compensation Committee, with Board approval, has set the following compensation
objectives:
|
§
|
Pay
base salaries to our senior executives at a level that is greater than the
60th
percentile of our selected peer group of
banks;
|
|
§
|
Provide
total direct compensation (salary and incentive compensation) to our
senior executives at a level greater than the 75th
percentile of our selected peer group of
banks;
|
|
§
|
Provide
total incentive compensation (the sum of cash incentives and equity
incentives) at a level greater than 30 percent of total direct
compensation; and
|
|
§
|
Continue,
over time, the alignment of senior management’s interest with that of
shareowners (the percentage of equity compensation should increase
relative to total incentive
compensation).
|
We
discuss the composition of our peer group and our benchmarking practices in
further detail below.
Executive
Compensation Policy Decisions
The
Compensation Committee has adopted a number of policies to further the goals of
our executive compensation program, particularly with respect to strengthening
the alignment of our executives’ interests with our shareowners’ long-term
interests.
Stock Ownership
Expectations. We maintain stock
ownership expectations for all senior managers, including our executive
officers. In October 2007, after review of other publicly-traded
company guidelines, the stock ownership guidelines were
changed. Under the new guidelines, all senior managers are expected
to own shares of our common stock equal in value to at least two times their
annual base salary; Mr. Barron and Mr. Davis are expected to own shares of our
common stock equal in value to at least three times their annual base salary;
and Mr. Smith is expected to own shares of our common stock equal in value to at
least five times his annual base salary. The Compensation Committee has
determined that as of December 31, 2007, all named executive officers have met
our share ownership expectations and all other senior managers covered by this
program are making significant strides in meeting the ownership
expectations.
Expensing Stock
Options. We
have expensed stock options since 2003.
Prohibition on
Repricing Stock Options. By the terms of the
2005 Associate Incentive Plan, which is the only plan we use to grant stock
options, repricing stock options is prohibited without shareowner
approval.
Employment
Agreements and Severance Agreements. We believe the
employment of our executive officers should remain “at
will.” Therefore, none of our executive officers have employment
agreements or severance agreements with us.
The
Compensation Committee believes the above policies are effective for the
following reasons: stability of management team, our ability to
attract talent from outside the Company, and historical stock
performance.
Compensation
Program Design
Compensation
Framework. We design our specific compensation elements based
on the following:
|
§
|
Performance: We believe that
the best way to accomplish alignment of compensation plans with the
participants’ interests is to link pay directly to individual and company
performance.
|
|
§
|
Competitiveness: Compensation
and benefits programs are designed to be competitive with those provided
by companies with whom we compete for talent. Benefits programs
are designed to be competitive with other companies’ programs and are not
based on performance.
|
|
§
|
Cost: Compensation
and benefit programs are designed to be cost-effective and affordable,
ensuring that the interests of our shareowners are
considered.
|
|
§
|
Comparator
Group: The relevant comparator group for compensation
and benefits programs consists of commercial banks and thrifts, with a
geographic footprint or asset base similar to
ours.
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
18
Specific
Compensation Elements. Our executive
compensation program is comprised of five discrete elements:
|
§
|
Base
salary
|
|
§
|
Short-term
incentives
|
|
§
|
Long-term
incentives
|
|
§
|
Benefits
and perquisites
|
|
§
|
Post-termination
compensation and benefits
|
Benchmarking.
In setting 2007 CEO compensation, we used a peer group chosen and
published by SNL Financial based on their similarities to us relative to our
asset size, performance, and markets served. The 2007 peer group
composition changed slightly from 2006, primarily due to merger and
acquisition. Seven new institutions were added and five institutions
were removed. The asset size ranged from $720 million to $2.65 billion and
averaged $1.89 billion as of December 31, 2006 (see chart below for peer
group). Approximately 30% of the peer group includes
institutions that serve the same geographic region as we do. A
compensation study is one of the many tools we use to determine the level of
compensation for our named executive officers.
The
compensation peer group is not identical to the peer group used to measure
company performance, due to difficulty in gathering compensation dated from
non-public companies. Company performance can be gathered from
financial institution call reports for public and non-public financial
institutions. However, many of the institutions represented on the
compensation peer group are included in the company performance peer
group. We continue to seek a credible, published source that
identifies the same peer group for company performance and
compensation.
|
FINANCIAL
INSTITUTIONS
|
||
|
Ameris
Bancorp
|
Bank
of the Ozarks
|
Bank
of Florida Corp.
|
|
Cadence
Financial Corp.
|
Cardinal
Financial Corp.
|
CenterState
Banks of Florida, Inc.
|
|
City
Holding Company
|
Coast
Financial Holdings
|
Fidelity
Southern Corp.
|
|
First
Bancorp
|
First
Community Bancshares, Inc.
|
Florida
Community Banks, Inc.
|
|
FNB
United Corp.
|
GB&T
Bancshares
|
Great
Florida Bank
|
|
Green
Bankshares, Inc.
|
Home
Bancshares, Inc.
|
Pinnacle
Financial Partners, Inc.
|
|
Renasant
Corporation
|
SCBT
Financial Corp.
|
Seacoast
Banking Corp.
|
|
Security
Bank Corp.
|
Simmons
First National Corp.
|
StellerOne
Corp.
|
|
TIB
Financial Corp.
|
TowneBank
|
Union
Bankshares Corp.
|
|
Virginia
Commerce Bancorp
|
||
Base
Salary
We grant
annual base salary increases to our named executive officers based on
performance and standing as relative to established compensation guidelines of
60th
percentile for base salary and 75th percentile for total
direct compensation. We chose the 60th and
75th
percentiles based on our philosophy that these levels will attract and retain
the talent necessary to achieve performance goals. Base salaries for the named
executive officers are determined by assessing available competitive market data
by position and the experience and performance of the individual. In
2007, Mr. Smith’s base compensation was significantly below the 60th
percentile and the Compensation Committee recommended and the Board approved, an
increase to base salary of 20%. Mr. Smith’s low base compensation is
not reflective of his performance or experience level. It has been
historically low and the Compensation Committee has placed great emphasis on
bringing Mr. Smith’s base salary in line with the stated
objective. Mr. Barron’s and Mr. Davis’s base salaries were at the
60th
percentile for their respective positions.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
19
Short-term
Incentives
Each
named executive officer has the opportunity to earn annual cash
bonuses. These cash bonuses, paid through the profit participation
plan, are based solely on whether we achieve a target earnings per share (EPS).
The Compensation Committee selected EPS as the goal based on a perceived
correlation of EPS to overall stock performance. EPS goals are set at
the beginning of the year, based on the budget as recommended by management and
approved by the Board of Directors. In 2007, no bonuses would be paid
if our actual EPS was 75% or less of the targeted EPS. Bonuses ranging from 4%
to 200% of a specified target award are paid to named executive officers if our
actual EPS is between 75% and 125% of targeted EPS of $1.91.
In 2007,
nine associates, including the named executive officers, participated in the
profit participation plan.
In 2007,
the target awards for the Executive Officers were $225,000 for Mr. Smith,
$190,000 for Mr. Barron, and $75,000 for Mr. Davis. The target awards
for cash incentive are set relative to each executive’s cash compensation
against the peer group. Mr. Smith’s base and cash incentive placed
him below the 75th
percentile for total cash compensation. Mr. Barron and Mr. Davis’s
base and cash incentive placed them at the 75th
percentile for total cash compensation, relative to their respective peer
groups.
In 2007,
EPS was $1.66, resulting in a payout of 50.9% of target. In 2006, the
payout was 90.77% of target, and in 2005, the payout was 102.4% of
target.
Long-term
Incentives
The
Compensation Committee believes a competitive compensation package will include
cash bonus and equity awards. The equity component creates ownership
in the Company and focuses attention on the Company’s
performance. The Compensation Committee believes incentive
compensation equal to or greater than 30% of compensation is sufficient to
change behaviors relative to performance. As a result, we
believe our total incentive-based compensation of 30% of total compensation is
appropriate.
Stock
Options. During the course of
2006, the Compensation Committee made the determination that the granting of
stock options should be discontinued. After careful consideration,
the Compensation Committee voted to discontinue Mr. Smith's stock option plan,
effective December 31, 2006, in favor of a more simple to administer long-term
incentive plan, discussed below.
Performance Share
Units.
Stock Based Incentive Plan.
In
April 2006, following the completion of a compensation study conducted by our
independent consultant, the Compensation Committee and Board approved a new
design for earning Performance Share Units based on one goal — the earnings
progression necessary to achieve our goal of $50 million by 2010. We
call this our Stock-Based Incentive Plan.
In early
2008, our management determined that, while on track to achieve its goal through
2006, due to recent changes in financial market conditions and the unknown
duration of the current economic cycle, both of which are outside of our
control, we now anticipate that we will not reach this goal. Thus,
while it is unlikely that any further payouts will be made under the Stock-Based
Incentive Plan, the plan remains in effect and, to date, has not been replaced
by other forms of compensation.
The
Stock-Based Incentive Plan is a performance-based equity bonus plan in which
selected members of management, including all named executive officers, are
eligible to participate. The Stock-Based Incentive Plan is
administered under our 2005 Associate Incentive Plan. The Stock-Based
Incentive Plan replaced all of our previous stock-based compensation
plans.
The
Stock-Based Incentive Plan consists of performance shares, as well as a tax
supplement bonus paid in cash, and is designed to align the economic interests
of management with our previously announced Project 2010. Under the
Stock-Based Incentive Plan, all participants are eligible to earn an equity
award in each year of the five-year period ending December 31,
2010. Annual awards are tied to the earnings progression necessary to
achieve the Project 2010 goal. The Compensation Committee has
predetermined the earnings goals for each of the five years covered by the
Stock-Based Incentive Plan. If we achieve 100% of the predetermined
earnings goal in any year, the Stock-Based Incentive Plan participants will
receive 100% of the performance share award for that particular
year. For each year from 2006 through 2009, if we achieve at least
75% of the predetermined year over year growth in earnings required to meet the
Project 2010 goal, but less than the predetermined earnings goal, then the
Stock-Based Incentive Plan participants will receive 75% of the performance
share award for that particular year. No award will be granted for a
year when less than 75% of the predetermined year over year growth in earnings
required to meet the Project 2010 goal is achieved. For the year
2010, no award may be earned unless we meet our Project 2010 goal. We
believe a payout in years 2006 through 2009 at a level less than 100% is
appropriate considering actual earnings don’t necessarily follow a linear
progression to the 2010 goal, given that in any one year, the economy and the
local market conditions may not support 10% growth without engaging in business
activities which subject the Company to an unacceptable level of
risk.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
20
For each
of the five years covered by the Stock-Based Incentive Plan, the named executive
officers are eligible to receive the following shares:
|
Name
|
Annual
75% Payout
|
Annual
100% Payout
|
Maximum
Payout
|
|
William
G. Smith, Jr.
|
2,657
|
3,543
|
17,715
|
|
Thomas
A. Barron
|
2,254
|
3,005
|
15,025
|
|
J.
Kimbrough Davis
|
1,757
|
2,316
|
11,580
|
The
number of shares an executive officer is eligible to earn is based on a five
year smoothing of base salary and cash incentives, using a formula of 15% of
total cash compensation and 19.08% of base salary for Mr. Smith; and 15% of
total cash compensation and 15.27% of base salary, for Messrs. Barron and
Davis. The formula assumes a 4% increase in total compensation each
year and uses a December 31, 2005 stock price of $34.29 to arrive at the number
of shares. Maximum payout assumes a 100% payout for each of the five
years covered by the Incentive Plan. The varying amounts are a
subjective judgment meant to recognize
the different levels of responsibility and authority for each executive
officer.
At the
end of each calendar year, the Compensation Committee will confirm that the
performance goals have been met prior to the payout of any
awards. Any performance shares earned under the Stock-Based Incentive
Plan will be issued in the calendar quarter following the calendar year in which
the shares were earned. For the past three years, any performance
shares earned were awarded in February. Participants will also
receive a cash payment equal to 31% of the market value of the performance
shares at the time of issue as a tax supplement bonus. The tax
supplement bonus allows the associate to retain all of the shares he/she
receives, rather than having to sell a portion of the shares to satisfy any tax
obligation. This supports our philosophy of ownership expectations
and aligns the interest of our officers with that of the
shareowner.
Long-term Incentive Plan -
Compound Annual Growth Rate in
Diluted EPS. In January 2007,
the Compensation Committee entered into an agreement with Mr. Smith to award
Performance Share Units as provided in the 2005 Associate Incentive
Plan. Only Mr. Smith participates in this particular compensation
plan because our Compensation Committee believes that it is in the best
interests of our shareowners for our Chief Executive Officer to have more of his
compensation “at risk” with a bigger potential reward when our stock price
outperforms the Board’s expectations.
Under the
agreement, we agreed to award Performance Share Units with an economic value
equivalent ranging from $0 to $500,000, including a 31% tax supplement
bonus. The target award of $250,000 is based on 10% Compound Annual
Growth Rate in Diluted Earnings Per Share over a three-year period, with a
phased in approach in years 2007 and 2008. No award is earned
if actual performance is below a 7.5% Compound Annual Growth Rate in Diluted
Earnings Per Share, the minimum performance level. A maximum award of $500,000
is earned if the Compound Annual Growth Rate in Diluted Earnings Per Share
equals or exceeds 12.5%, the maximum performance level. The
Compensation Committee selected the $500,000 target because if the full target
is met and the $500,000 award was paid to Mr. Smith, Mr. Smith’s total direct
compensation would be at the 75th percentile of our selected peer group of
banks. As with all of our stock-based plans, the Compensation
Committee has determined to pay a tax supplement bonus to help ensure that the
executive retains all of the shares he or she received, rather than having to
sell a portion of the shares to satisfy any tax obligation.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
21
Benefits
and Perquisites
Determining
Benefit Levels. Benefit levels are
reviewed periodically to ensure that the plans and programs provided are
competitive and cost-effective for us, and support our human capital
needs. Benefit levels are not tied to company, business area or
individual performance.
Perquisites. We
provide our named executive officers with perquisites that we believe are
reasonable, competitive and consistent with our overall executive compensation
program. The value of the perquisites for each named executive
officer in the aggregate is less than $10,000.
Health, Dental,
Disability and Life Insurance Coverage. The
core insurance package for our named executive officers and senior management
team includes health, dental, disability and basic group life insurance
coverage. Our named executives and senior management participate in
these benefits on the same basis as our other associates.
Paid Time-Off
Benefits. We provide
vacation and other paid holidays to all associates, including our named
executive officers and senior management team, which are comparable to those
provided at similarly sized financial institutions.
Post-Termination
Compensation and Benefits
Retirement
Plans. We provide
retirement benefits to named executive officers and senior management through a
combination of qualified (under the Internal Revenue Code) and nonqualified
plans. The objectives of our retirement program is (1) to
provide our named executive officers with reasonable and competitive levels of
protection against contingencies, including retirement, death and disability,
which could interrupt their employment with and income received from us and
(2) reward the named executive officers for continued service with
us.
|
§
|
Retirement Plan: The Retirement
Plan is a tax-qualified, noncontributory defined benefit plan intended to
provide for an associate’s financial security in retirement. All full-time
and part-time associates with 1,000 hours of service annually are eligible
for the Retirement Plan.
|
|
§
|
401(k) Plan: The 401(k)
plan provides associates the opportunity to save for retirement on a
tax-favored basis. We studied the overall competitiveness of
our retirement benefits package and its long-term costs. To
better align the retirement benefits package with associates’ preferences
and recruitment needs, a decision was made to change the benefit design of
the Retirement Plan and the 401(k) Plan. For associates hired
after January 1, 2002, the pension benefit under the Retirement Plan was
reduced and in the 401(k) Plan, a 50% matching contribution was introduced
into the 401(k) Plan. This change was intended to be
cost-neutral. Executives may elect to participate in the 401(k)
Plan on the same basis as our other similarly situated
associates. No named executive officers are currently eligible
for the company-sponsored match.
|
|
§
|
Supplemental Executive
Retirement Plan (SERP): Each of our named executive
officers participates in our SERP, a nonqualified plan which provides
benefits in excess of the Retirement Plan. The SERP is designed to restore
a portion of the benefits Messrs. Smith, Barron, and Davis would otherwise
receive under our Retirement Plan, if these benefits were not limited by
U.S. tax laws. This more closely aligns the benefits of Messrs.
Smith, Barron, and Davis with those of other Retirement Plan
participants. We have no obligation to fund the SERP but accrue
for our anticipated obligations under the SERP on an annual
basis.
|
Impact
of Regulatory Requirements
Tax Deductibility
of Compensation. Section 162(m) of the Internal Revenue Code
imposes a $1 million limit on the amount that a publicly traded company may
deduct for compensation paid to an executive officer who is employed on the last
day of the fiscal year. “Performance-based compensation” is excluded from this
$1 million limitation. In general, our policy is to provide
compensation that we may fully deduct for income tax purposes. However, in order
to maintain ongoing flexibility of our compensation programs, our Compensation
Committee may from time to time approve annual compensation that exceeds the $1
million limitation. We recognize that the loss of the tax deduction may be
unavoidable under these circumstances.
Accounting for
Stock-Based Compensation. In 2003, we began accounting for
stock-based payments in accordance with Statement of Financial Accounting
Standards 123R, “Share-Based
Payment.”
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
22
Conclusion
The
Compensation Committee believes the philosophy and objectives set forth have
allowed us to attract and retain talent needed to deliver above average
shareowner return. We believe by placing a significant portion of pay
at risk, behaviors are changed and management focus is placed on strategic
objectives of the company. This philosophy, along with the stock
ownership expectations and current levels of ownership by our senior management,
aligns the interests of management with that of shareowners. We
believe our compensation philosophy and objectives have been successful in
attracting and retaining qualified executives with capabilities that enable the
Company to achieve or exceed its designated performance targets.
COMPENSATION
COMMITTEE REPORT
We, as a
Compensation Committee, have reviewed and discussed with management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K
included in this Proxy Statement. Based on that review and
discussion, we have recommended to the Board of Directors of the Company that
the Compensation Discussion and Analysis be included in this Proxy
Statement.
2007
COMPENSATION COMMITTEE
CADER B.
COX, III CHAIR
J.
EVERITT DREW
DR. HENRY
LEWIS III
This
report shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933, or the Securities Exchange Act of 1934, and shall
not otherwise be deemed filed under these acts.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
23
INFORMATION
ABOUT EXECUTIVE COMPENSATION
Summary
Compensation Table
The
following summary compensation table shows compensation information for our
principal executive officer, principal financial officer, and our president (the
other executive officer whose total compensation exceeded $100,000) for the
fiscal year ended December 31, 2007.
We have
no employment agreements with our named executive officers. None of
the named executive officers were entitled to receive payments which would be
characterized as “Bonus” payments for 2005, 2006 or 2007. Amounts
listed under column (g), “Non-Equity Incentive Plan Compensation” are determined
by the Compensation Committee at its first meeting following the year in which
the compensation is earned and paid to the executives shortly after such
determination is made.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)(1)
|
Option
Awards
($)(2)
|
Non-Equity
Incentive Plan Compensation
($)(3)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)(4)
|
All
Other Compensation
($)(5)
|
Total
($)
|
|
William
G. Smith, Jr.,
Chairman,
President, and Chief Executive Officer
|
2007
|
$ 275,000
|
$ 0
|
$
0
|
$ 125,004
|
$ 114,525
|
$ 326,151
|
$ 552
|
$ 841,232
|
|
2006
|
230,000
|
0
|
91,109
|
205,176
|
204,233
|
174,214
|
29,467
|
934,199
|
|
|
2005
|
210,000
|
0
|
40,803
|
192,884
|
230,423
|
239,894
|
12,798
|
926,802
|
|
|
Thomas
A. Barron,
President,
Capital City Bank
|
2007
|
236,000
|
0
|
0
|
--
|
96,710
|
208,106
|
1,032
|
541,848
|
|
2006
|
220,000
|
0
|
77,290
|
--
|
172,463
|
92,660
|
25,057
|
587,470
|
|
|
2005
|
200,000
|
0
|
38,474
|
--
|
215,061
|
246,618
|
12,076
|
712,229
|
|
|
J.
Kimbrough Davis,
Executive
Vice President and Chief Financial Officer
|
2007
|
230,000
|
0
|
0
|
--
|
38,175
|
193,720
|
552
|
462,447
|
|
2006
|
200,000
|
0
|
59,562
|
--
|
77,155
|
122,355
|
19,399
|
478,471
|
|
|
2005
|
185,000
|
0
|
25,322
|
--
|
87,048
|
156,770
|
7,999
|
462,139
|
|
1.
|
The
amounts in column (e) reflect the dollar amount recognized for financial
statement reporting purposes for the respective fiscal year, in accordance
with SFAS 123R of awards under our Stock-Based Incentive
Plan. Thus, they may include amounts from awards granted prior
to the year in which the compensation is reported in this
table.
|
|
2.
|
The
amounts in column (f) reflect the dollar amount recognized for financial
statement reporting purposes for the respective fiscal year, in accordance
with SFAS 123R of awards pursuant to our Stock Option Program, and thus
may include amounts from awards granted prior to the year in which the
compensation is reported in this table. Awards are discussed in
further detail on page 20 under the heading “Stock
Options.” Assumptions used in the calculation of these amounts
are included in footnote 11 to our audited consolidated financial
statements for the fiscal year ended December 31, 2007 included in our
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 17, 2008.
|
|
3.
|
The
amounts in column (g) reflect the cash awards to the named individuals
under the Cash Bonus Plan, which is discussed in further detail on page 20
under the heading “Short-term Incentives.” Awards were paid out
at 50.9%, 90.77% and 102.41% of the target awards for 2007, 2006 and 2005,
respectively.
|
|
4.
|
The
amounts in column (h) reflect the actuarial increase in the present value
of the named executive officer’s benefits under all pension plans
established by us determined using the assumptions consistent with those
used in our financial statements, which are discussed in further detail on
page 28 under the heading “Pension
Benefits.”
|
|
5.
|
The
amount shown in column (i) reflects for each named executive officer: tax
supplement bonus paid and life insurance premium. In 2007, no
tax supplement bonuses were paid.
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
24
Grants
of Plan-Based Awards in 2007
As
discussed in the Compensation Discussion and Analysis, cash bonus plan payouts,
stock options and performance share units are granted only when we achieve board
approved established levels of performance. Each stock option permits
Mr. Smith to purchase one share of our common stock at the market price of our
stock on the date of grant. Stock options generally expire 10 years
from the date of grant. As of December 31, 2006, our
Compensation Committee terminated Mr. Smith’s stock option plan.
|
(a)
Name
|
Award
Type
|
(b)
Grant
Date
|
Estimated
Possible Payouts Under Non-Equity Incentive Plan Awards
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
|
(l)
Grant
Date Fair Value of Options and Stock Awards
|
||||
|
(c)
Threshold
($)
|
(d)
Target
($)
|
(e)
Maximum
($)
|
(f)
Threshold
(#)
|
(g)
Target
(#)
|
(h)
Maximum
(#)
|
||||
|
William
G. Smith, Jr.
|
Cash1
|
N/A
|
$ 0
|
$ 225,000
|
$ 450,000
|
--
|
--
|
--
|
N/A
|
|
PSU2
|
1/18/07
|
--
|
--
|
--
|
$ 0
|
$
250,000
|
$
500,000
|
$ 0
|
|
|
Thomas
A. Barron
|
Cash1
|
N/A
|
0
|
190,000
|
380,000
|
--
|
--
|
--
|
N/A
|
|
J.
Kimbrough Davis
|
Cash1
|
N/A
|
0
|
75,000
|
150,000
|
--
|
--
|
--
|
N/A
|
|
1.
|
The
amounts shown in column (c) reflect the minimum payment level under our
Cash Bonus Plan. The amount shown in column (e) is 200%
of the target amount. The Compensation Committee determines
these amounts annually.
|
|
2.
|
As
discussed in the Compensation Discussion and Analysis, performance share
units are awarded pursuant to our 2005 Associate Incentive
Plan. In 2007, we entered into an agreement with Mr. Smith to
award him performance share units with an economic value equivalent
ranging from $0 to $500,000, including a 31% tax supplement
bonus. The award would be paid if our compound annual growth
rate in diluted earnings per share EPS met certain levels as discussed in
detail on page 21. Since our EPS compound growth rate was less
than 7.5% in 2007, Mr. Smith did not receive an award. Thus, no
amount is shown in column (l)
|
Outstanding
Equity Awards at Fiscal Year-End 2007
The
following table provides information, for our executive officers named in the
Summary Compensation Table, on stock option holdings at the end of
2007.
|
Option
Awards
|
|||||
|
Number
of Securities Underlying Unexercised Options
(#)
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
||
|
Name
|
Exercisable
|
Unexercisable
|
|||
|
William
G. Smith, Jr.
|
23,138
|
0
|
--
|
32.96
|
3/12/2014
|
|
24,831
|
12,415
|
--
|
32.69
|
3/14/2015
|
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
25
Option
Exercises
There
were no exercises of stock options by any of our named executive officers during
the 2007 fiscal year.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The
amount of compensation (if any) that is payable to our named executive officers
upon termination of employment depends on the nature and circumstances under
which employment is ended.
Change
in Control
In the
event of a change in control, our named executive officers will be credited with
an additional two years of credited service for purposes of computation of
retirement benefits payable under the SERP. Accrued benefits based
upon normal retirement are payable to the named executive officer upon a change
in control. A “change in control” under the SERP means the sale of
substantially all of our assets, a change in share ownership of greater than 50%
within a 24-month period, or any other determination of change in control made
by our Board of Directors.
In the
event of a change in control, our named executive officers would not receive any
additional benefit under the Retirement Plan but would have the same benefits as
any associate who separates employment with the Company.
In the
event of a change in control, any stock options previously granted to one of our
named executive officers under the 1996 or 2005 Associate Incentive Plans would
become immediately vested. A “change in control” for purposes of the
immediate vesting of options means an acquisition of 25% of our Common Stock by
any “person” as defined in the Securities Exchange Act of 1934, or, during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority of
the Board, unless the election or the nomination for election by our shareowners
of each new director was approved by a vote of at least three-quarters of the
directors then still in office who were directors at the beginning of the
period.
We have
no post-employment compensation programs designed to provide benefits upon a
change in control of the Company, other than those discussed above.
Payments
Upon Termination of Employment
Voluntary
Termination. If a named executive officer voluntarily resigns
from our employment, no amounts are payable under the Cash Bonus Plan or the
Stock-Based Incentive Plan. The executive may be entitled to receive benefits
from the Retirement Plan, and the SERP to the extent those benefits have been
earned under the provisions of the plans and the executive officer has
met the vesting requirements of the plans. In addition, the executive would
be entitled to receive any amounts voluntarily deferred (and the earnings on
deferrals) under the 401(k) Plan.
Early
Retirement. Currently, Mr. Barron is the only named executive
officer eligible to retire as defined by the Retirement Plan and the
SERP. As such, he may be entitled to receive benefits from the
Retirement Plan and SERP to the extent those benefits have been earned under the
provisions of the plans. No other named executive officer is eligible
for early retirement from the Retirement Plan or the SERP.
Death. If
a named executive officer dies while employed by us, the Retirement Plan and the
SERP will provide benefits to heirs of the deceased executive. The
benefits are of the same value as those provided for a voluntary termination or
early retirement as applicable.
Involuntary
Termination with or without Cause. If a named executive
officer’s employment is involuntarily terminated, the executive may be entitled
to receive benefits from the Retirement Plan and the SERP to the extent those
benefits have been earned under the provisions of the plans and the executive
officer has met the vesting requirements of the plans. In addition,
the executive would be entitled to receive any amounts voluntarily deferred (and
the earnings on deferrals) under the 401(k) Plan.
Disability. In
the event that a named executive officer becomes disabled on a long-term basis,
the executive officer’s employment by us would not necessarily
terminate. Therefore, we do not disclose any such amounts in the
table below. If a named executive officer becomes disabled under the
terms of the Retirement Plan and SERP, the executive will continue to accrue a
retirement benefit until the earliest of recovery, death or
retirement. This benefit cannot be paid as a lump sum
distribution.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
26
Payment
Tables
William G. Smith,
Jr. would have
received the following payments had he terminated on December 31, 2007 under the
following triggering events:
|
Compensation
Components
|
Change
in Control1
|
Voluntary
Termination1
|
Early
Retirement1
|
Death1
|
Disability 2
|
Involuntary
Termination1
|
||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
||||||||||||
|
Retirement
Plan
|
$ | 863,084 | $ | 863,084 |
Not
eligible
|
$ | 863,084 | $ | 15,000 | $ | 863,084 | |||||||
|
SERP
|
1,152,006 | 1,146,031 |
Not
eligible
|
1,146,031 | 10,446 | 1,146,031 | ||||||||||||
|
Accelerated
Vesting of Stock options
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Thomas A.
Barron would have received the following payments had he terminated on
December 31, 2007 under the following triggering events:
|
Compensation
Components
|
Change
in Control1
|
Voluntary
Termination1
|
Early
Retirement1
|
Death1
|
Disability2
|
Involuntary
Termination1
|
|||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
|||||||||||
|
Retirement
Plan
|
$ | 1,341,600 |
Not
eligible
|
$ | 1,341,600 | $ | 1,341,600 | $ | 15,000 | $ | 1,341,600 | ||||||
|
SERP
|
1,314,179 |
Not
eligible
|
1,314,179 | 1,314,179 | 6,708 | 1,314,179 | |||||||||||
J. Kimbrough
Davis would have received the following payments had he terminated on
December 31, 2007 under the following triggering events:
|
Compensation
Components
|
Change
in Control1
|
Voluntary
Termination1
|
Early
Retirement1
|
Death1
|
Disability 2
|
Involuntary
Termination1
|
|||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
|||||||||||
|
Retirement
Plan
|
$ | 787,976 | $ | 787,976 |
Not
eligible
|
$ | 787,976 | $ | 14,688 | $ | 787,976 | ||||||
|
SERP
|
408,831 | 316,758 |
Not
eligible
|
316,758 | 1,648 | 316,758 | |||||||||||
PENSION
BENEFITS
Retirement
Plan
The key
provisions of the Retirement Plan are as follows:
Monthly
Benefit. Named executive officers with a vested benefit will
be eligible to receive the following retirement benefits each month for the rest
of their lives beginning at age 65:
|
§
|
1.90%
of final average monthly compensation multiplied by years of service after
1988 (limited to 30 years), plus
|
|
§
|
0.40%
of final average monthly compensation in excess of $2,000 multiplied by
years of service after 1988 (generally limited to 30 years),
plus
|
|
§
|
the
monthly benefit accrued as of December 31, 1988 updated for salary
increases since 1988
|
1 Lump
Sum. Lump sum payments
are determined as of December 31, 2007 using the Retirement Plan’s applicable
basis, namely, the mortality table found in Revenue Ruling 2001-62 and an
interest rate of 4.69%. Under the Retirement Plan and the SERP, lump
sum payments are triggered upon a change in control, voluntary termination,
retirement, death, and involuntary termination. No further benefits
would be payable after the lump sum payment is made.
2 Annuity
Payments. In the event that
a named executive officer becomes disabled on a long-term basis, the named
executive officer would receive annuity payments beginning at age
65. These payments coordinate with our long-term disability
program.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
27
Total benefits are limited by the Internal Revenue Code. In 2007, the limit was $180,000 per year or $15,000 per month. Additional provisions may apply for participants who were hired after January 1, 2002 or who worked for a bank that we acquired.
Final Average
Monthly Compensation. The final average
monthly compensation is the average of the highest five consecutive years of W-2
earnings (plus 401(k) deferrals). Compensation is limited to the limits
described in Internal Revenue Code, which was $225,000 per year (or $18,750 per
month) for 2007.
Beginning
in 2008, the value of stock awarded under any of our incentive compensation
plans will be included in the average monthly compensation.
Vesting. Participants
become vested after reaching five years of service.
Early Retirement
Benefits. Participants may
elect to retire prior to their Normal Retirement Date.
|
§
|
Reduced
Retirement: If participants are at least age 55 and have
at least 15 years of service, then they may commence benefits early on a
reduced basis. The monthly benefit will be calculated using the
benefit formula described above, reduced 6.67% times the number of years
(up to five) that the Benefit Commencement Date precedes the Normal
Retirement Date, and 3.33% times any additional years (up to
five).
|
|
§
|
Unreduced
Retirement: If they are at least age 61 and have at
least 30 years of service, then they may commence benefits early on an
unreduced basis. The monthly benefit will be calculated using
the benefit formula described above, reduced 6.67% times the number of
years (up to five) that the Benefit Commencement Date precedes the later
of age 61 or 30 years of service, and 3.33% times any additional years (up
to five).
|
Form of
Payment. Participants may
receive their pension benefit as an annuity or as a lump sum.
SERP
In
general, the plan provisions for the SERP are identical to the provisions of the
Retirement Plan, except the benefits are calculated without regard to the limits
set by the Internal Revenue Code on compensation and benefits. The
net benefit payable from the SERP is the difference between this gross benefit
and the benefit payable by the Retirement Plan. The SERP limits gross
benefits to 60% of final average monthly compensation. As a general
rule, we do not grant extra years of service under the
SERP. Exceptions may occur in limited instances such as a mid-career
hire.
2007
Pension Benefit Tables
The
following table shows the years of credited service, present value of the
accumulated benefit for the named executive officers as of December 31, 2007,
assuming payment at age 61, and payments made during the last fiscal
year.
|
Name
|
Plan
Name
|
Number
of Years of Credited Service
(#)
|
Present
Value of Accumulated Benefit
($)
|
Payments
During Last Fiscal Year
($)
|
|
William
G. Smith, Jr.
|
Retirement
Plan
|
29
|
$ 963,431
|
$ 0
|
|
Supplemental
Executive Retirement Plan
|
29
|
1,294,313
|
0
|
|
|
Thomas
A. Barron
|
Retirement
Plan
|
33
|
1,119,294
|
0
|
|
Supplemental
Executive Retirement Plan
|
33
|
1,109,304
|
0
|
|
|
J.
Kimbrough Davis
|
Retirement
Plan
|
26
|
879,590
|
0
|
|
Supplemental
Executive Retirement Plan
|
26
|
357,743
|
0
|
Assumptions
Used to Calculate Pension Values
Because
the pension amounts shown in the Summary Compensation Table and the Pension
Benefits Table are projections of future retirement benefits, numerous
assumptions must be applied. In general, the assumptions should be
the same as those used to calculate the pension liabilities in accordance with
SFAS No. 87, Employers’ Accounting for Pensions on the measurement date,
although the Security and Exchange Commission specifies some exceptions (as
noted in the table below).
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
28
The key
assumptions used to determine the pension values are summarized
below. The changes in the pension values shown in the Summary
Compensation Table are determined as the change in the values during the fiscal
year (including the impact of changing assumptions from the prior fiscal
year). The accumulated pension values shown in the Pension Benefits
Table are based on the assumptions as of the end of the fiscal
year.
|
Assumption
|
Basis
for assumption
|
12/31/2004
|
12/31/2005
|
12/31/2006
|
12/31/2007
|
|
Discount
rate
|
Under
SEC rules, discount rate used to measure pension liabilities under SFAS
No. 87, Employers’ Accounting for
Pensions
|
6.00%
|
5.75%
|
6.00%
|
6.25%
|
|
Rate
of future salary increases
|
Under
SEC rules, no salary projection
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
|
Form
of payment
|
Retirement
Plan: form elected by officer
|
80%
elect a lump sum and 20% elect an annuity
|
80%
elect a lump sum and 20% elect an annuity
|
80%
elect a lump sum and 20% elect an annuity
|
80%
elect a lump sum and 20% elect an annuity
|
|
SERP:
form elected by officer
|
Lump
sum
|
Lump
sum
|
Lump
sum
|
Lump
sum
|
|
|
Lump
sum interest rate
|
Interest
rate defined by the plan for the upcoming plan year
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
|
Date
of retirement
|
As
per SEC guidance, use first age eligible for unreduced
retirement
|
61
|
61
|
61
|
61
|
|
Post-retirement
mortality
|
Retirement
Plan: same assumption used to measure pension liabilities under SFAS No.
87, Employers’ Accounting for
Pensions
|
For
lump sums, the long-term IRC § 417(e) basis
For
annuity payments, RP2000 Mortality Table for males
|
For
lump sums, the long-term IRC § 417(e) basis
For
annuity payments, RP2000 Mortality Table for males
|
For
lump sums, the long-term IRC § 417(e) basis
For
annuity payments, RP2000 Mortality Table for males
|
For
lump sums, the long-term IRC §
417(e)
basis
For
annuity payments, RP2000 Mortality Table for
males
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
29
The Audit
Committee, which operates under a written charter adopted by the Board of
Directors, monitors the Company’s financial reporting process on behalf of the
Board of Directors. This report reviews the actions taken by the
Audit Committee with regard to the Company’s financial reporting process during
2007 and particularly with regard to the Company’s audited consolidated
statements of financial condition as of December 31, 2007 and 2006, and the
related statements of income, changes in shareowners’ equity, and cash flows for
each of the years in the three-year period ended December 31,
2007.
The Audit
Committee believes that it has taken the actions necessary or appropriate to
fulfill its oversight responsibilities under the Audit Committee’s
charter. In fulfilling its oversight responsibilities, the Audit
Committee reviewed and discussed with management the audited financial
statements to be included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2007, including a discussion of the quality
(rather than just the acceptability) of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.
The Audit
Committee also reviewed with Ernst & Young their judgments as to quality
(rather than just the acceptability) of the Company’s accounting principles and
such other matters as are required to be discussed with the Audit Committee
under Statement on Auditing Standards No. 61, Communication with Audit
Committees. In addition, the Audit Committee discussed with
Ernst & Young, the auditor’s independence from management and the Company,
including the written disclosures, letter, and other matters required of Ernst
& Young by Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees.
Additionally,
the Audit Committee discussed with the Company’s internal and independent
auditors the overall scope and plan for their respective audits. The
Audit Committee met with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the Company’s internal controls, and the overall quality of the
Company’s financial reporting.
In
reliance on the reviews and discussions referred to above, 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 the year ended
December 31, 2007, for filing with the Securities and Exchange
Commission.
THE
AUDIT COMMITTEE
FREDERICK CARROLL,
III,
CHAIRMAN J.
EVERITT DREW
JOHN K.
HUMPHRESS
RUTH A. KNOX
This
report shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not
otherwise be deemed filed under these acts.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
30
APPOINTMENT
OF AUDITOR
Our Audit
Committee appointed Ernst & Young LLP as our independent auditor for the
2008 fiscal year. Shareowner ratification of the selection of Ernst
& Young as our independent public accountants is not required by our Bylaws
or other applicable legal requirement. However, the Board is
submitting the selection of Ernst & Young to the shareowners for
ratification as a matter of good corporate practice. If the
shareowners fail to ratify the selection, the Audit Committee will reconsider
whether or not to retain that firm. Even if the selection is
ratified, the Audit Committee at its discretion may direct the appointment of a
different independent accounting firm at any time during the year if it
determines that such a change would be in our and our shareowners’ best
interests.
Representatives
of Ernst & Young may attend the 2008 Annual Meeting and, if in attendance,
will have an opportunity to make a statement if they so desire and to respond to
appropriate questions.
The
proposal to ratify Ernst & Young as independent auditors will be approved if
the votes cast by the shareowners present, or represented, at the Annual Meeting
and entitled to vote on the matter favoring this proposal exceed the votes cast
in opposition to the proposal.
CHANGE
IN AUDITOR
During
2006, the Audit Committee solicited proposals from four major accounting firms
and conducted an extensive evaluation process in connection with the selection
of our independent auditor for the fiscal year ending December 31,
2007. Following this process, on December 21, 2006, the Audit
Committee dismissed KPMG LLP as our independent auditor for our fiscal year
ending December 31, 2007, and appointed Ernst & Young to serve as our
independent auditor for 2007. KPMG served as our independent auditor
for the fiscal year ended December 31, 2006.
KPMG’s
audit report on our consolidated financial statements as of and for the fiscal
year ended December 31, 2006 did not contain an adverse opinion or disclaimer of
opinion, nor was it qualified or modified as to uncertainty, audit scope, or
accounting principles.
During
the fiscal year ended December 31, 2006 and the subsequent interim period
through March 15, 2007, the date we filed our Annual Report on Form 10-K for the
fiscal year ended December 31, 2006, (i) there were no disagreements between us
and KPMG on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of KPMG, would have caused KPMG to make
reference to the subject matter of the disagreement in its report on our
consolidated financial statements, and (ii) there were no “reportable events” as
that term is defined in Item 304(a)(1)(v) of Regulation S-K.
During
the fiscal year ended December 31, 2006 and the subsequent interim period
through March 15, 2007, neither we nor anyone acting on our behalf consulted
Ernst & Young regarding (1) the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on our consolidated financial statements; or (2)
any matter that was either the subject of a disagreement as defined in Item
304(a)(1)(iv) of Regulation S-K or a “reportable event” described in Item
304(a)(1)(v) of Regulation S-K.
|
The
Board of Directors unanimously recommends a vote “FOR”
ratification
of the appointment of Ernst &
Young.
|
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
31
FEES
PAID TO PRINCIPAL ACCOUNTANTS
The
following table represents aggregate fees, including out-of-pocket expenses,
paid or to be paid to Ernst & Young for the 2007 fiscal year and paid or to
be paid to KPMG for the 2006 fiscal year.
|
2007
|
2006
|
||
|
Audit
Fees
|
$ 582,269
|
$ 703,490
|
|
|
Audit-Related
Fees
|
-
|
11,850
|
|
|
Tax
Fees
|
74,000
|
43,000
|
|
|
All
Other Fees
|
-
|
-
|
|
|
Total
|
$ 656,269
|
$ 758,340
|
|
Audit
fees primarily represent amounts billed to us for auditing our annual
consolidated financial statements (including services incurred with rendering an
opinion under Section 404 of the Sarbanes-Oxley Act of 2002), reviewing the
financial statements included in our Quarterly Reports on Form 10-Q, and for
services that are normally provided by the auditor in connection with statutory
and regulatory filings. Also included are $70,749 and $68,500 in
out-of-pocket expenses in the 2007 and 2006 fees,
respectively. Audit-Related Fees were fees paid to KPMG in connection
with the transition of the auditor of our annual financial statements from KPMG
to Ernst & Young. Tax fees are fees related to the preparation of
our original and amended tax returns, claims for refunds, and tax
planning.
POLICY
ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES OF INDEPENDENT
AUDITOR
The Audit
Committee’s policy is to pre-approve all audit and non-audit services provided
by the independent auditors. These services may include audit
services, audit-related services, tax services, and other
services. Pre-approval is generally provided for up to 12 months from
the date of pre-approval, and any pre-approval is detailed as to the particular
service or category of services and is generally subject to a specific
budget. The Audit Committee may delegate pre-approval authority to
one or more of its members when expedition of services is
necessary. The independent auditors and management are required to
periodically report to the full Audit Committee regarding the extent of services
provided by the independent auditors in accordance with this pre-approval policy
and the fees for the services performed to date. The Audit Committee
pre-approved all audit and non-audit services provided by Ernst & Young in
2007 and KPMG in 2006.
The Audit
Committee has determined that the non-audit services provided by Ernst &
Young during the fiscal year ended December 31, 2007, were compatible with
maintaining their independence.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
32
ANNUAL
REPORT
We filed
an annual report for the fiscal year ended December 31, 2007, on Form 10-K
with the U.S. Securities and Exchange Commission. Shareowners may obtain,
free of charge, a copy of our annual report on Form 10-K by writing to our
Corporate Secretary at our principal offices.
HOUSEHOLDING
We have
adopted a procedure approved by the Securities and Exchange Commission known as
“householding.” Under this procedure, shareowners of record who have
the same address and last name will receive only one copy of our Notice of
Annual Meeting, Proxy Statement, and Annual Report, unless one or more of these
shareowners notifies our transfer agent that they wish to continue receiving
individual copies. This procedure will reduce our printing costs and
postage fees. If you wish to receive your own copy of these
materials, you may contact our transfer agent, American Stock Transfer &
Trust Company, in writing, by telephone, or on the Internet:
American
Stock Transfer & Trust Company
59 Maiden
Lane, Plaza Level
New York,
NY 10038
(800)
937-5449 (U.S. and Canada)
(718)
921-8124 (International)
www.amstock.com
Shareowners
who participate in householding will continue to receive separate proxy
cards. Also, householding will not in any way affect dividend check
mailings. If you are eligible for householding, but you and other
shareowners of record with whom you share an address currently receive multiple
copies of our Notice of Annual Meeting, Proxy Statement, and Annual Report, or
if you hold stock in more than one account, and in either case you wish to
receive only a single copy of each document for your household, please contact
our transfer agent as indicated above. Beneficial owners can request
information about householding from their banks, brokers, or other holders of
record.
SHAREOWNER
PROPOSALS
Shareowner
proposals that are to be included in the Proxy Statement for the 2009 meeting
must be received by December 1, 2008. Shareowner proposals for the
2009 meeting that are not intended to be included in the Proxy Statement for
that meeting must be received by January 31, 2009, or the Board of Directors can
vote the proxies in its discretion on the proposal. Proposals must
comply with the proxy rules and be submitted in writing to J. Kimbrough
Davis, Corporate Secretary, at our principal offices.
DIRECTOR
NOMINATIONS
Any
shareowner entitled to vote generally in the election of directors may recommend
a candidate for nomination as a director. A shareowner may recommend
a director nominee by submitting the name and qualifications of the candidate
the shareowner wishes to recommend, pursuant to Article VII of our Articles of
Incorporation, to:
Nominating
Committee of the Board of Directors
c/o
Capital City Bank Group, Inc.
217 North
Monroe Street
Tallahassee,
Florida 32301
To be considered, recommendations with
respect to an election of directors to be held at an annual meeting must be
received no earlier than 180 days and no later than 120 days prior to
March 31, 2009, the first anniversary of this year’s Notice of Annual
Meeting date. In other words, director nominations must be received
no earlier than October 2, 2008, and no later than December 1,
2008. Recommendations with respect to an election of directors to be
held at a special meeting called for that purpose must be received by the 10th
day following the date on which notice of the special meeting was first mailed
to shareowners. Recommendations meeting these requirements will be
brought to the attention of the Nominating Committee. Candidates for
director recommended by shareowners are afforded the same consideration as
candidates for director identified by our directors, executive officers, or
search firms, if any, employed by us.
Capital
City Bank Group, Inc. Notice of Annual Meeting and Proxy
Statement
33
