SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. ____)
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Commercial Bankshares, Inc.
______________________________________________________________________
(Name of Registrant as Specified In Its Charter)
______________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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COMMERCIAL BANKSHARES, INC.
1550 S.W. 57th Avenue
Miami, Florida 33144
__________________________________________________________________________
Notice of Annual Meeting of Shareholders
to Be Held on April 21, 2005
__________________________________________________________________________
Dear Shareholders:
The Annual Meeting of Shareholders of Commercial Bankshares, Inc. (the
"Company") will be held in Miami, Florida, at the executive offices of the
Company located at 1550 S.W. 57th Avenue, at 10:00 a.m., local time, on
Thursday, April 21, 2005, for the following purposes:
1. To elect seven directors to the Company's Board of Directors;
2. To transact such other business as may properly come before the Annual
Meeting.
Only shareholders of record at the close of business on March 8,
2005 are entitled to notice of and to vote at the Annual Meeting and all
adjournments thereof.
All shareholders are cordially invited to attend the meeting in
person. Those shareholders who plan to attend are requested to so
indicate by marking the appropriate space on the enclosed proxy card.
Any shareholder attending the Annual Meeting may vote in person even
though he or she has previously returned a proxy.
A form of proxy card and the Proxy Statement of the Company relating
to the Annual Meeting of Shareholders are enclosed. Please complete,
date, sign and return the enclosed proxy card promptly so that your shares
can be voted, regardless of whether you expect to attend the meeting.
A copy of the Company's 2004 Annual Report to shareholders is also
enclosed.
By order of the Board of Directors,
JACK J. PARTAGAS
President and Chief Operating Officer
March 16, 2005
Miami, Florida
TABLE OF CONTENTS
PROXY STATEMENT INTRODUCTION
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Record Date and Outstanding Shares . . . . . . . . . . . . . . . . . 1
Voting and Solicitation. . . . . . . . . . . . . . . . . . . . . . . 1
PROPOSAL I - ELECTION OF DIRECTORS. . . . . . . . . . . . . . . . . . . 2
Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
BOARD GOVERNANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Board of Directors and Committees. . . . . . . . . . . . . . . . 3
Director Compensation. . . . . . . . . . . . . . . . . . . . . . . . 4
Report of the Audit Committee. . . . . . . . . . . . . . . . . . . . 4
EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . 5
Executive Officers of the Company. . . . . . . . . . . . . . . . . . 5
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . 5
Table of Option Grants in the Last Fiscal Year . . . . . . . . . . . 6
Fiscal Year-End Option Values. . . . . . . . . . . . . . . . . . . . 6
Equity Compensation Plan Information . . . . . . . . . . . . . . . . 7
Employment Agreements. . . . . . . . . . . . . . . . . . . . . . . . 7
Board Compensation Committee Report on Executive Compensation. . . . 8
Stock Performance Graph. . . . . . . . . . . . . . . . . . . . . . .11
Stock Option Plan Benefits . . . . . . . . . . . . . . . . . . . . .11
Compensation Committee Interlocks and Insider Participation. . . . .12
STOCK OWNERSHIP INFORMATION . . . . . . . . . . . . . . . . . . . . . .13
Security Ownership of Certain Beneficial Owners and Management . . .13
Section 16(a) Beneficial Ownership Reporting Compliance. . . . . . .14
SELECTION OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM. .15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . . . . .16
SHAREHOLDER COMMUNICATION WITH BOARD OF DIRECTORS . . . . . . . . . . .16
OTHER BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . .16
COMMERCIAL BANKSHARES, INC.
Annual Meeting of Shareholders
to be held on April 21, 2005
PROXY STATEMENT
__________________________________________________________________________
General
The Board of Directors of Commercial Bankshares, Inc. (the "Company")
is soliciting proxies to be used at the Annual Meeting of Shareholders to
be held on Thursday, April 21, 2005, and all adjournments thereof. This
Proxy Statement and the accompanying proxy card are first being sent to
shareholders on or about March 16, 2005.
The shares represented by all properly executed proxies received by the
Company will be voted as specified by the shareholders. If no specifications
are given (including broker non-votes), the shares represented by the proxy
will be voted for the election of the listed nominees as directors. A
shareholder who has given a proxy may revoke it at any time before it is
voted at the meeting by filing with the Secretary of the Company a written
notice of revocation, by submitting a proxy bearing a later date, or by
attending the meeting and voting in person.
Record Date and Outstanding Shares
On March 8, 2005, there were 5,962,704 shares of the Company's Common
Stock, par value $.08 per share, outstanding. Each share of Common Stock
of record on the books of the Company at the close of business on March 8,
2005 entitles its owner to one vote, either in person or by proxy, upon
each matter to come before the meeting.
Voting and Solicitation
A majority of the shares entitled to vote, represented in person or by
proxy, shall constitute a quorum. Votes cast in person or by proxy will
be tabulated by the inspectors of election, appointed by the Board of
Directors. The current Florida Business Corporation Act (the "Act")
provides that directors are elected by a plurality of the votes cast if
a quorum is present at the meeting, and all other matters are approved if
the votes cast in favor of the action exceed the votes cast against the
action (unless the matter is one for which the Act or the Articles of
Incorporation require a greater vote).
A proxy submitted by a shareholder may indicate that all or a portion
of the shares represented by such proxy are not being voted by such
shareholder with respect to a particular matter ("non-voted shares").
This could occur, for example, when a broker is not permitted to vote
shares held in "street name" on certain matters in the absence of
instructions from the beneficial owner of the shares. Non-voted shares
with respect to a particular matter will be counted for purposes of
determining the presence of a quorum but will not be counted as shares
present and entitled to vote on such matter for purposes of voting, and
therefore, will have no effect on matters brought to a vote at the Annual
Meeting. Shares voting to abstain as to a particular matter and directions
to "withhold authority" to vote for directors, will be counted for purposes
of determining the presence of a quorum and will be counted as present and
entitled to vote with respect to such matter for purposes of voting, and
therefore, will have the effect of votes against the matters brought to a
vote at the Annual Meeting.
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally by mail, but directors, officers and regular
employees of the Company or its subsidiaries may solicit proxies personally
or by telephone. The Company will reimburse custodians, nominees, or other
persons for their out-of-pocket expenses in sending proxy material to
beneficial owners.
Regardless of the number of shares you own, it is important that they
be represented at the Annual Meeting. You are respectfully requested to
sign, date and return the accompanying proxy card at your earliest
convenience.
PROPOSAL I -
ELECTION OF DIRECTORS
Unless you specify otherwise on the accompanying proxy, the shares
represented by the proxy will be voted for the election of the listed
nominees to serve as Directors until the next Annual Meeting of
Shareholders or until their successors are elected and qualified. If
a quorum is present at the Meeting, the plurality of the votes cast by
the shares entitled to vote in the election of Directors at the Meeting
is required to elect each nominee.
Nominees
Joseph W. Armaly, age 68, is Chairman of the Board of Directors and
Chief Executive Officer of the Company and of Commercial Bank of Florida
("Bank"), the Company's wholly-owned subsidiary. Mr. Armlay served as
President of Merchants Bank of Miami ("Merchants") from 1965 through
1988 and also served as Chairman of Merchants' Board of Directors from
1980 through 1988. Mr. Armaly was also President and Chairman of the
Board of Florida Commercial Banks, Inc. ("Florida Commercial") from 1980
through 1988. Mr. Armaly has been Chairman of the Board of the Company
and the Bank since its formation in 1988.
Jack J. Partagas, age 67, is a Director and the President, Chief Operating
Officer and Secretary of the Company and the Bank. Prior to joining the
Company and the Bank in 1988, Mr. Partagas was Vice President of Florida
Commercial between 1971 and 1988. Mr. Partagas has been a Director of
the Company and the Bank since 1988, Executive Vice President of the
Company and the Bank from 1988 through 1992 and President of the Company
and the Bank since 1992.
Cromwell A. Anderson, age 79, is a Director of the Company and the
Bank. Mr. Anderson has been in the private practice of law since 1954.
Mr. Anderson retired from the law firm of Fowler, White, Burnett,
Hurley, Banick & Strickroot, P.A. in 1999. Mr. Anderson has been a
Director of the Company and the Bank since 1988.
Robert Namoff, age 52, is a Director of the Company and the Bank.
Mr. Namoff is the Chairman of the Board of Allied Universal Corporation,
a chemical manufacturer. Mr. Namoff serves on the Board of Directors
of the Chlorine Institute in Washington, D.C. and serves as Commissioner
on the Florida State Transportation Commission in Tallahassee. Mr.
Namoff has been a Director of the Company and the Bank since 1990.
Sherman Simon, age 86, is a Director of the Company and the Bank.
Mr. Simon has been a private real estate investor for over 30 years.
Mr. Simon has been a Director of the Company and the Bank since 1988.
Michael W. Sontag, age 59, is a Director of the Company and the Bank.
Mr. sontag is an Architectural Engineer and a licensed general
contractor. Mr. Sontag has been a Director of the Company and the
Bank since 1997.
Martin Yelen, age 77, is a Director of the Company and the Bank and was
formerly a director of Florida Commercial. Mr. Yelen is a retired
attorney who engaged in private practice for 45 years with the firm of
Yelen & Yelen, P.A. Mr. Yelen has served on the Miami-Dade and Monroe
County chapters of the National Safety Council and was a councilman and
Mayor of the City of West Miami. Mr. Yelen has been a Director of the
Company and the Bank since 1988.
The Board of Directors recommends a vote "FOR" the election of all nominees.
2
BOARD GOVERNANCE
The Board of Directors and Committees
The Board of Directors of the Company consists of the same persons as
the Board of Directors of the Bank. The Company conducts its operations
through the Bank, which is its wholly-owned subsidiary. Both the Company
and the Bank held twelve meetings of the Board of Directors during 2004.
Each director attended at least 75% of the board meetings that were held
while he was serving as a director during the year, as well as attending
at least 75% of the committee meetings of those committees of which the
respective director was a member. During 2004, the Company's Board of
Directors had standing Audit and Compensation Committees, and the Bank's
Board of Directors had standing Audit, Executive, Loan and Compliance
Committees.
(a) Audit Committee. The Bank's Audit Committee consists of Messrs.
Anderson, Namoff, Simon, Sontag and Yelen. These persons were all
independent, non-employee directors of the Bank and the Company. The
Board of Directors has determined that each member of the Audit Committee
is financially literate and independent in accordance with NASDAQ's
listing standards and that Mr. Namoff is an "audit committee financial
expert", as defined by the Securities and Exchange Commission. The Audit
Committee held four meetings during 2004. The Audit Committee has
functional supervision over the internal audit staff, reviews the system
of internal controls and the adequacy of the internal audit system and
receives reports on activities of the internal auditing department. It
recommends the independent registered certified public accounting firm
to the Bank's and the Company's Boards of Directors, approves all services
provided by the independent registered certified public accounting firm
and related fees and reviews the scope of the audits and the actual audits
performed by both the independent registered certified public accounting
firm and the internal auditors. It is responsible for ensuring that the
audit findings are adequately addressed.
(b) Compensation Committee. The Company's Compensation Committee
consists of Messrs. Anderson, Simon and Yelen. These persons are all
independent, non-employee directors of the Company and constitute three
of the five non-employee directors of the Board. The Compensation
Committee held three meetings during 2004. The Compensation Committee
was delegated the duties of establishing and administering an executive
compensation program. Its activities include reviewing and approving the
design of the program, setting performance goals, assessing executive
performance and making grants of salary, bonuses and incentive
compensation. The Compensation Committee also administers the Amended
1994 Performance Stock Option Plan and the 2004 Employee Stock Option
Plan.
(c) Nominating Committee. The Company has no formal nominating
committee but rather the entire Board of Directors acts as the nominating
committee. All of the director nominees of the Company set forth in
Proposal I entitled "Election of Directors" were approved by a majority
of the independent, non-employee directors of the Company. Messrs.
Anderson, Namoff, Simon, Sontag and Yelen are all the independent, non-
employee directors of the Company. The Board of Directors believes it
is appropriate for the Company to nominate its director nominees through
a majority of the independent directors of the full board and not a
separate nominating committee due to the efficiencies gained by not having
a separate committee.
The Board of Directors, several months prior to the annual meeting of
the shareholders, conducts a process of identifying and evaluating Board
nominees. The Board initially looks to nominating its existing directors
for re-election to the Board as appropriate or to other Director nominees
proposed, as appropriate, by the Chairman of the Board and in doing so
considers each director's independence, if required, skills, performance
and attendance to the Board and respective committees. The Board of
Directors will also consider candidates recommended by Shareholders (see
the caption "Shareholder Proposal" contained herein). In evaluating any
candidates for potential director nomination, the Board of Directors, and
specifically a majority of the independent, non-employee directors, will
consider candidates that are independent, if required, who possess personal
and professional integrity, have good business judgment, relevant
experience and skills, including financial expertise, if required, and
who would be effective as a Director in conjunction with the full board
and collectively serving the long-term interests of the Company's
shareholders. All candidates will be reviewed in the same manner,
regardless of the source of recommendation.
The Company does not have a formal policy regarding attendance by
members of the Board of Directors at the Annual Meeting of Shareholders,
but it encourages its Directors to attend and historically, most have
done so. With respect to the 2004 Annual Shareholder Meeting, all of
the members of the Board of Directors, which at the time was comprised
of seven members, attended such Annual Shareholder Meeting.
3
Director Compensation
Directors of the Company who are salaried employees of the Bank do not
receive any additional compensation for serving as a director or committee
member. During the year 2004, non-employee directors of the Bank received
a retainer of $1,500 per calendar quarter, $300 per loan committee meeting
and $300 per audit committee meeting.
In addition, each non-employee director in office in June, 2004 received
options to purchase 2,500 shares of Common Stock for serving on the Board.
Report of the Audit Committee
The following report on the Audit Committee is made pursuant to the
rules of the Securities and Exchange Commission. The Audit Committee
has met and held discussions with management and the independent registered
certified public accounting firm. Management represented to the Audit
Committee that the Company's consolidated financial statements were
prepared in accordance with generally accepted accounting principles
and the Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent registered
certified public accounting firm. The Audit Committee discussed with the
independent registered certified public accounting firm matters required
to be discussed by Statement on Auditing Standards No. 61, "Communication
with Audit Committees".
The Audit Committee discussed with the Company's internal audit staff
and its independent registered certified public accounting firm the
overall scope and plans for their respective audits. The Audit Committee
meets with the internal audit staff and its independent registered
certified public accounting firm to discuss the results of their
examinations, the evaluations of the Company's internal controls and the
overall quality of the Company's financial reporting. The Audit Committee
also approves all services provided by the independent registered certified
public accounting firm and related fees.
The Audit Committee has received the written disclosures and the letter
from the independent registered certified public accounting firm required
by Independence Standards Board Standard No. 1 "Independence Discussions
with Audit Committees", as may be modified or supplemented, and has
discussed with the independent registered certified public accounting firm
the independent registered certified public accounting firm's independence.
The members of the Audit Committee are independent as independence is
defined in Rule 4200(a)(14) of the National Association of Securities
Dealers.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements for the year ended December 31, 2004 be included in the Company's
Annual Report on Form 10-K for the year 2004, for filing with the Securities
and Exchange Commission.
AUDIT COMMITTEE
Martin Yelen, Chairman Sherman Simon
Cromwell Anderson Michael Sontag
Robert Namoff
4
EXECUTIVE COMPENSATION
Executive Officers of the Company
The executive officers of the Company are elected to their offices for
one-year terms at the meeting of the Board of Directors in April of each
year. The terms of any executive officers elected after such date expire
at the same time as the terms of the executive officers elected at such
date.
Joseph W. Armaly, age 68, is Chairman of the Board of Directors and
Chief Executive Officer of the Company and the Bank. Mr. Armaly served
as President of Merchants from 1965 through 1988 and also served as
Chairman of Merchants' Board of Directors from 1980 through 1988.
Mr. Armaly was also President and Chairman of the Board of Florida
Commercial from 1980 through 1988. Mr. Armaly has been Chairman of
the Board of the Company and the Bank since its formation in 1988.
Jack J. Partagas, age 67, is a Director and the President, Chief
Operating Officer and Secretary of the Company and the Bank. Prior
to joining the Company and the Bank in 1988, Mr. Partagas was Vice
President of Florida Commercial between 1971 and 1988. Mr. Partagas
has been a Director of the Company and the Bank since 1988, Executive
Vice President of the Company and the Bank from 1988 through 1992 and
President of the Company and the Bank since 1992.
Bruce P. Steinberger, age 51, was elected Executive Vice President of
the Bank in January of 1996. Mr. Steinberger was previously Executive
Vice President of Intercontinental Bank from 1987-1995.
Barbara E. Reed, age 41, was elected Senior Vice President and Chief
Financial Officer of the Company and the Bank in June of 1995. Ms.
Reed previously served the Bank as Vice President and Controller and
as Auditor. Ms. Reed is a Certified Public Accountant and prior to
1991, was employed by Coopers & Lybrand LLP.
Summary Compensation Table
The following table sets forth as of December 31, 2004, all compensation
paid during the Company's latest fiscal year to the Company's Chief
Executive Officer and to those executive officers of the Company whose
total annual compensation exceeded $100,000 in any of the last three
completed fiscal years.
Long-Term
Compensation
____________
Number of
Annual Compensation Securities
___________________ Underlying
Name and Principal Options All Other
Position (1) Year Salary Bonus Granted (2) Compensation (3)
__________________ ____ ______ _____ __________ _______________
Joseph W. Armaly 2004 $360,000 $180,000 3,500 $ 7,556
Chairman and Chief 2003 $340,000 $180,000 6,250 $ 6,621
Executive Officer of the 2002 $340,000 $150,000 7,812 $ 7,271
Company and the Bank
Jack J. Partagas 2004 $275,000 $120,000 3,500 $ 5,962
President and Chief 2003 $255,000 $120,000 6,250 $ 5,029
Operating Officer of the 2002 $255,000 $100,000 7,812 $ 4,940
Company and the Bank
Bruce P. Steinberger 2004 $220,000 $ 75,000 2,500 $12,800
Executive Vice President 2003 $200,000 $ 75,000 3,125 $11,217
of the Bank 2002 $200,000 $ 60,000 4,688 $10,300
Barbara E. Reed 2004 $150,000 $ 40,000 2,500 $ 6,616
Senior Vice President 2003 $130,000 $ 40,000 3,125 $ 6,096
and Chief Financial 2002 $130,000 $ 30,000 3,125 $ 5,578
Officer of the Company
and the Bank
_______________________________
(1) All compensation or remuneration paid to employees is paid by the Bank.
At the present time, there are no separate employees of the Company and
there is no compensation paid by the Company.
5
(2) Gives effect to the dilutive adjustments which were made with respect
to such options as a result of five-for-four stock splits declared by
the Company in December, 2002 and December, 2003.
(3) The Bank has adopted a plan pursuant to the provisions of Section 401(k)
of the Internal Revenue Code in which after one year of employment, all
employees of the Bank are eligible to participate. The Bank, in its
discretion, may match any amounts deferred by employees. The amount
of contribution made by the Bank with respect to all employees was
approximately $220,000 in 2004, $188,000 in 2003 and $167,000 in 2002.
Table of Option Grants in the Last Fiscal Year
% of Total
Options Potential
Granted Realizable
Number of to Value at Assumed
Securities Employees Exercise Annual Rates of
Underlying in or Stock Price
Options Fiscal Base Expiration Appreciation for
Name Granted(1) Year Price Date (2) Option Term
____________________ _________ _____ ________ ____________ _________________
5% 10%
________ ________
Joseph W. Armaly 3,500 11.0% $24.52 June 2, 2014 $ 53,972 $136,775
Jack J. Partagas 3,500 11.0% $24.52 June 2, 2014 $ 53,972 $136,775
Bruce P. Steinberger 2,500 8.0% $24.52 June 2, 2014 $ 38,551 $ 97,696
Barbara E. Reed 2,500 8.0% $24.52 June 2, 2014 $ 38,551 $ 97,696
_______________________________
(1) The Company's form of option agreement provides for early termination in
the event the option holder's employment is terminated, the option holder
dies, or the option holder becomes permanently or totally disabled. The
options may not be exercised until at least one year from the date of
grant, which was June 1, 2004.
Fiscal Year-end Option Values
Number of
Securities
Underlying Value of
Unexercised Unexercised In-the-
Options at Money Options at
Year End Year End ($)
Shares
Acquired on Value Exercisable and Exercisable and
Name Exercise Realized Unexercisable(1) Unexercisable
____________________ ________ _________ ____________ ___________
Joseph W. Armaly 1,700 $ 52,292 67,184/3,500 $ 1,746,147
Jack J. Partagas - $ - 80,279/3,500 $ 2,150,255
Bruce P. Steinberger 8,798 $ 140,240 28,493/2,500 $ 680,743
Barbara E. Reed 3,000 $ 57,449 32,122/2,500 $ 845,838
__________________
(1) The number of shares underlying the stock options described in this table
gives effect to the dilutive adjustments which were made with respect to
such options as a result of the 5% stock dividends which were declared by
the Company in each of December 1996, December, 1997, December, 1998, and
December, 1999 and five-for-four stock splits declared December, 2002 and
December, 2003.
6
Equity Compensation Plan Information
The following table sets forth information regarding our compensation plans
(including individual compensation arrangements) under which shares of our
Common Stock are authorized for issuance as of December 31, 2004:
Number of
Securities
Remaining
Available
for Future
Issuance
Number of Under Equity
Securities to Compensation
be Issued Plans
Upon Weighted Average [Excluding
Exercise of Exercise Price of Securities
Outstanding Outstanding Reflected in
Plan Category Options (a) Options Column (a)]
_____________________________ __________ _______ ____________
Equity compensation plans
approved by security holders:
1994 Performance Plan and
1994 Outside Director Plan 609,319 (1) $11.43 __
2004 Employee Plan and
2004 Outside Director Plan 43,500 (2) 24.52 256,500
Equity compensation
plans not approved
by security holders __ __ __
_______ ______ _______
652,819 $12.30 256,500
__________________
(1) Represents options to purchase 329,970 shares of Common Stock which have
previously been granted and which remain outstanding under our 1994
Performance Stock Option Plan and options to purchase 279,349 shares
of Common Stock which have previously been granted and which remain
outstanding under our 1994 Outside Director Stock Option Plan. The
1994 Performance Stock Option Plan and the 1994 Outside Director Stock
Option Plan expired in the first quarter of 2004. Therefore, there are
no securities reserved for future issuance under these plans.
(2) Represents options to purchase 31,000 shares of Common Stock which have
previously been granted and which remain outstanding under our 2004
Employee Stock Option Plan and options to purchase 12,500 shares of
Common Stock which have previously been granted and which remain
outstanding under our 2004 Outside Director Stock Option Plan. The
2004 Employee Stock Option Plan initially had 250,000 and 50,000,
respectively, shares of Common Stock reserved for issuance.
Employment Agreements
The Company and the Bank have entered into employment agreements with
Messrs. Armaly and Partagas. The Bank has entered into employment agreements
with Mr. Steinberger and Ms. Reed. These agreements, which are summarized
below, are intended to assure the Company and the Bank of the continued
services of its key officers.
With respect to Messrs. Armaly and Partagas, the agreements entered into
as of March 18, 1994 provide that each officer shall be employed by the
Company and the Bank in his current position for a period of three (3)
years. On March 31, 1995 the term was extended automatically for one
additional year and on each subsequent March 31 the term is automatically
extended for one additional year such that after each March 31 extension
the term of the agreement is a full three years. Compensation and benefits
are to be determined by the Board of Directors of the Company, provided
that the officer's participation in employee benefit plans and arrangements
shall provide benefits at least equal to those provided to all other
employees of the Company. In the event that the officer's employment is
terminated (except for death, disability, or cause) or if the officer
terminates his employment because of a reduction in position,
responsibility, salary, or for any other good reason, as defined in the
agreement, and including a change in control of the Company, the officer
is entitled to severance benefits equal to three year's salary and cash
incentive compensation plus the option to continue to receive fringe
benefits for an additional three years or an additional sixty (60%)
percent of annual salary and cash incentive compensation in lieu of fringe
benefits. In the event the officer terminates his employment other than
for good reason, as defined in the agreement, the officer is entitled to
severance benefits equal to one year's salary and cash incentive
compensation, plus an additional twenty (20%) percent in lieu of fringe
benefits. Such severance benefits will be based upon the executive's
then current salary and the aggregate cash incentive compensation last
paid to or earned by the officer in the immediately preceding twelve
months prior to termination. In the event that any of such payments
constitute "parachute payments" under Section 280G of the Internal Revenue
Code and therefore are subject to the excise tax on "excess parachute
payments" under Section 4999 of the Internal Revenue Code, the agreements
provide that the Company will pay an additional cash amount, as determined
7
by a formula set forth in the agreements, sufficient to pay both the
excise tax and any additional amounts which become due as the result of
the payment of the excise tax, to put the officer in the same position as
though no excise tax had been imposed.
With respect to Mr. Steinberger, the agreement entered into as of
December 18, 1999 provides that he shall be employed by the Bank in his
current position for a period of one year. On December 18, 1999 the term
was extended automatically for one additional year and on each subsequent
December 18 the term is automatically extended for one additional year.
Compensation and benefits are to be determined by the Board of Directors
of the Bank, provided that the officer's participation in employee benefit
plans and arrangements shall provide benefits at least equal to those
provided to all other employees of the Bank. In the event that the officer's
employment is terminated (except for death, disability, or cause) or if the
officer terminates his employment because of a reduction in position,
responsibility, salary, or for any other good reason, as defined in the
agreement, Mr. Steinberger is entitled to severance benefits equal to his
base salary and cash incentive compensation through and including the
scheduled termination date of this agreement, as extended. If the
agreement is terminated by Mr. Steinberger pursuant to a change in control
of the Company, Mr. Steinberger is entitled to severance benefits equal to
two year's salary and cash incentive compensation plus the option to
continue to receive fringe benefits for an additional two years or an
additional forty (40%) percent of annual salary and cash incentive
compensation in lieu of fringe benefits. In the event that Mr. Steinberger
terminates his employment other than for good reason, as defined in the
agreement, the officer is entitled to severance benefits equal to his base
salary and cash incentive compensation through and including the date of
termination. Such severance benefits will be based upon Mr. Steinberger's
then current salary and the aggregate cash incentive compensation last
paid to or earned by the officer in the immediately preceding twelve
months prior to termination. In the event that any of such payments
constitute "parachute payments" under Section 280G of the Internal Revenue
Code and therefore are subject to the excise tax on "excess parachute
payments" under Section 4999 of the Internal Revenue Code, the agreements
provide that the Bank will pay an additional cash amount, as determined
by a formula set forth in the agreements, sufficient to pay both the
excise tax and any additional amounts which become due as the result of
the payment of the excise tax, to put the officer in the same position as
though no excise tax had been imposed.
With respect to Ms. Reed, the agreement entered into as of February 5,
1997 provides that she shall be employed by the Bank in her current
position for a period of one year. On December 14, 1997 the term was
extended automatically for one additional year and on each subsequent
December 14 the term is automatically extended for one additional year.
Compensation and benefits are to be determined by the Board of Directors
of the Bank, provided that the officer's participation in employee benefit
plans and arrangements shall provide benefits at least equal to those
provided to all other employees of the Bank. In the event that the officer's
employment is terminated (except for death, disability, or cause) or if
the officer terminates her employment because of a reduction in position,
responsibility, salary, or for any other good reason, as defined in the
agreement, Ms. Reed is entitled to severance benefits equal to her base
salary and cash incentive compensation through and including the scheduled
termination date of this agreement, as extended. If the agreement is
terminated by Ms. Reed pursuant to a change in control of the Company,
Ms. Reed is entitled to severance benefits equal to twelve times her then
current monthly salary. In the event that Ms. Reed terminates her
employment other than for good reason, as defined in the agreement, the
officer is entitled to severance benefits equal to her base salary and
cash incentive compensation through and including the date of termination.
Such severance benefits will be based upon Ms. Reed's then current salary
and the aggregate cash incentive compensation last paid to or earned by
the officer in the immediately preceding twelve months prior to termination.
Board Compensation Committee Report on Executive Compensation
1. Performance and Policies.
The Compensation Committee of the Board of Directors of the Company
oversees and administers the Company's executive compensation programs.
All members of the Compensation Committee are outside directors who are
not eligible to participate in any of the compensation programs that the
Committee oversees. The Compensation Committee recommends and the Board
of Directors determines, based on such recommendations, compensation for
the Chairman. Compensation levels for the other executive officers of
the Company are determined by the Compensation Committee, based on the
recommendations of the Chairman.
The Company's executive compensation program is designed to attract,
retain, motivate and appropriately reward individuals who are responsible
for the Company's short- and long-term profitability, growth and return
to shareholders. It is also designed to align the interests of high level
employees with those of the shareholders. Compensation for Company
8
executive officers consists of base compensation, annual cash incentive
awards and long-term incentive awards in the form of stock options.
Executive officers also participate in a savings incentive plan and a
medical plan available to employees generally.
The determination of base compensation increases, annual cash incentive
awards and long-term incentive awards is based upon the performance of the
Company, the contribution of each individual to that performance and
consideration for economic conditions and events which may impact the
future performance of the Company. Individual contribution is assessed
based upon factors such as level of responsibility, job complexity and
the importance of the position in the structure of the Company and the
Bank. Individual contribution is also judged more subjectively based upon
the Compensation Committee's overall evaluation of the officer's
professionalism and professional growth, judgment, business acumen and
ability and effort. The Compensation Committee also compares, on a random
and subjective basis, the salaries of the executive officers with the
salaries of executive officers of other bank holding companies of
comparable size. Finally the Compensation Committee considers whether
compensation increases are fair and equitable based upon individual
performance and a comparison with peers. Although the components of
compensation (base compensation, annual cash incentive awards, and long-
term incentive awards) are reviewed separately, compensation decisions
are made based on a review of total compensation.
(a) Base Compensation. Pay levels for each executive are set annually at
the beginning of the fiscal year and are based primarily on the
performance of the Company during the prior fiscal year. The
Compensation Committee considers factors such as earnings per share,
pre-tax earnings, net profits and return on equity. Secondarily, the
Compensation Committee considers individual performance in light of
each executive's job responsibilities. In determining the base
salaries for 2004, the Compensation Committee took into account the
Company's performance during 2003. Specifically, net income increased
13% during 2003, return on average assets and equity were 1.37% and
16.62%, respectively, credit performance remained strong; diluted
earnings per common share increased from $1.53 in 2002 to $1.69 in
2003; loan growth was 18% in 2003; average total deposits increased
21% and cash dividends declared during 2003 increased 16% over 2002.
(b) Annual Cash Incentive Awards. Annual cash incentive awards to the
Company's executive officers are granted at the discretion of the
Compensation Committee and are determined at the end of the fiscal
year. The determination of the amount of such awards is made by the
Compensation Committee based upon the performance of the Company and
on a subjective basis as indicated above. For purposes of determining
the level of the annual cash incentive awards to be paid to senior
executives for 2004, it was the Compensation Committee's view that
the Company's 2004 results represented a strong performance. The
Compensation Committee noted the following factors in support of its
findings: net income increased 10% during 2004; return on average
assets and equity were 1.35% and 16.12%; credit performance remained
excellent; diluted earnings per common share increased from $1.69 in
2003 to $1.82 in 2004; the senior executive officers were successful
in implementing the growth strategy of the Bank, as average loans
increased by 11% from 2003 to 2004; average total deposits increased
12% from 2003 to 2004; and cash dividends declared during 2004
increased 6% over 2003.
(c) Stock Option Awards. The Compensation Committee also uses stock
options to reward management and to link them to the long-term results
and stockholder interests of the Company. Option grants are usually
determined in the spring of each fiscal year. The levels of option
grants are determined at the discretion of the Compensation Committee
on a subjective basis. Previous grants of stock options are reviewed
but are not considered the most important factor in determining the
size of any executive's stock option award in a particular year. In
determining the levels of option grants for 2004, the Compensation
Committee considered the performance of the Company for fiscal year
2003, the performance of the Company for the beginning of 2004, and
efforts and initiatives by the executive officers to implement and
support the strategic objectives of the Bank.
2. CEO Compensation.
Joseph Armaly is eligible to participate in the same executive
compensation program available to the other executive officers within the
Company. His 2004 base salary was set at $360,000, as compared to $340,000
in 2003. Mr. Armaly's base salary was based primarily on the Company's
performance during 2003; specifically, net income increased 13% during
2003; return on average assets and equity were 1.37% and 16.62%
respectively; credit performance remained strong; diluted earnings per
common share increased from $1.53 in 2002 to $1.69 in 2003; loan growth
was 18% in 2003; average total deposits increased 21%; and cash dividends
declared during 2003 increased 16% over 2002.
The stock option grants made to Mr. Armaly in 2004 were based on the
analysis discussed above for fiscal year 2003, together with performance
of the Company for the first half of 2004. In June 2004, Mr. Armaly was
awarded ten-year options covering 3,500 shares. The terms and conditions
of this grant were consistent with the grants to all other executive
officers.
9
In December, 2004, Mr. Armaly received an annual cash incentive award
of $180,000. This annual cash incentive award was based upon the Company's
performance during the 2004 fiscal year and the individual performance of the
executive. In determining this award, the Compensation Committee considered
the increase in the Company's earnings during 2004. Specifically, the
Compensation Committee considered the following factors: net income
increased 10% during 2004; return on average assets and equity were 1.35%
and 16.12%; diluted earnings per common share increased from $1.69 in 2003
to $1.82 in 2004; the Bank was successful in implementing its growth
strategy, as average loans increased by 11% from 2003 to 2004; average
total deposits increased 12% from 2003 to 2004; and cash dividends
declared during 2004 increased 6% over 2003.
COMPENSATION COMMITTEE
Cromwell A. Anderson, Chairman
Sherman Simon
Martin Yelen
10
Stock Performance Graph
The following table compares cumulative five-year shareholder returns
(including reinvestment of dividends) on an indexed basis with the Center
for Research in Security Prices ("CRSP") Index for the NASDAQ Stock Market
(U.S. Companies) and the CRSP Index for NASDAQ Bank Stocks (SIC codes 602
and 671). These indices are included for comparative purposes only, and
do not necessarily reflect management's opinion that such indices are an
appropriate measure of the relative performance of the stock involved and
are not intended to forecast or be indicative of possible future
performance of the Common Stock. The graph assumes that the value of an
investment in the Common Stock and in each index was $100 on December 31,
1999, and that all dividends were reinvested.
Comparison of Five-Year Cumulative Return
Commercial Bankshares, Inc., Common Stock
December 31,
_________________________________________
2004 2003 2002 2001 2000 1999
____ ____ ____ ____ ____ ____
Commercial Bankshares, Inc. 343 234 188 126 86 100
NASDAQ Stock Market Bank Stocks 186 163 127 124 114 100
NASDAQ Stock Market Index 54 49 33 48 60 100
(US Companies)
Stock Option Plan Benefits
The table below indicates options granted and outstanding under the 1994 and
2004 Outside Director Stock Option Plans, the 1994 Performance Stock Option
Plan and the 2004 Employee Stock Option Plan as of December 31, 2004:
Number of
Options Granted
Name and Position and Outstanding
_________________ _______________
Executive officer group 220,078
Non-executive director group 291,849
Non-executive officer employee group 140,892
_______
Total options granted 652,819
=======
11
Executive Officers
__________________
Joseph W. Armaly 70,684
Chairman and CEO
Jack J. Partagas 83,779
President and COO
Bruce P. Steinberger 30,993
Executive Vice President
Barbara E. Reed 34,622
Senior Vice President and CFO
Nominees for Director
_____________________
Joseph W. Armaly 70,684
Jack J. Partagas 83,779
Cromwell A. Anderson 69,718
Robert Namoff 62,119
Sherman Simon 69,718
Michael W. Sontag 24,376
Martin Yelen 65,918
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was an officer or employee of the
Company or of any of its subsidiaries during the prior year or was formerly
an officer of the Company or any of its subsidiaries. During the last
fiscal year, none of the executive officers of the Company have served on
the Board of Directors or Compensation Committee of any other entity, any
of whose officers served either on the Board of the Company or on the
Compensation Committee of the Company.
12
STOCK OWNERSHIP INFORMATION
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of the Company's outstanding Common Stock as of March
1, 2005, by (i) one person known to the Company to be the beneficial owner
of more than 5% of the Company's Common Stock, (ii) each director and
executive officer of the Company and (iii) the directors and the executive
officers of the Company as a group. Except as otherwise indicated, the
persons named in the table have sole voting and investment power with
respect to all shares of Common Stock owned by them.
Current Beneficial Ownership
____________________________
Number of Percent of
Name and Address of Beneficial Owner Shares(1)(11) Class*
____________________________________ _____________ ______
(a) Certain beneficial owners:
John Hancock Advisors, LLC (2) 383,710 5.96%
101 Huntington Avenue
Boston, MA 02199
(b) Directors:
Cromwell A. Anderson 224,707 (3) 3.49%
1550 S.W. 57th Avenue
Miami, Florida 33144
Joseph W. Armaly 302,768 (4) 4.70%
1550 S.W. 57th Avenue
Miami, Florida 33144
Robert Namoff 189,899 (3) 2.95%
1550 S.W. 57th Avenue
Miami, Florida 33144
Jack J. Partagas 97,499 (5) 1.51%
1550 S.W. 57th Avenue
Miami, Florida 33144
Sherman Simon 246,488 (6) 3.83%
1550 S.W. 57th Avenue
Miami, Florida 33144
Michael W. Sontag 69,097 (7) 1.07%
1550 S.W. 57th Avenue
Miami, Florida 33144
Martin Yelen 111,487 (8) 1.73%
1550 S.W. 57th Avenue
Miami, Florida 33144
(c) Executive officers listed in Summary
Compensation table who are not Directors:
Barbara E. Reed 42,963 (9) **
1550 S.W. 57th Avenue
Miami, Florida 33144
Bruce P. Steinberger 53,324 (10) **
1550 S.W. 57th Avenue
Miami, Florida 33144
All directors and the executive officers 1,338,232 20.79%
as a group (9 persons)
________________________________
* Percentages of shares beneficially owned are based upon 5,955,460
shares of Common Stock outstanding as of March 1, 2005 plus, for each
person named above, any shares of Common Stock that may be acquired by
such person within 60 days of such date upon exercise of outstanding
options or other rights. Options granted under the Outside Director
Plan vest immediately.
** Less than 1%.
(1) In accordance with Rule 13d-3 promulgated pursuant to the Securities
Exchange Act of 1934, a person is deemed to be the beneficial owner
13
of a security for purposes of the rule if he or she has or shares
voting power or investment power with respect to such security or has
the right to acquire such ownership within 60 days. As used herein,
"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, irrespective of any economic interest therein.
(2) Through their parent-subsidiary relationship to John Hancock Advisors,
LLC., John Hancock Life Insurance Company, John Hancock Subsidiaries,
LLC., John Hancock Financial Services, Inc. and The Berkeley Financial
Group, LLC have indirect Beneficial ownership of these same shares.
(3) Includes options granted to purchase 62,119 shares of Common Stock.
(4) Includes options granted to purchase 67,184 shares of Common Stock.
Does not include 45,196 shares held of record by Mr. Armaly's wife.
Mr. Armaly disclaims beneficial ownership of all such shares.
Inclusion of such shares would result in Mr. Armaly owning 347,964
shares or 5.41% and all directors and executive officers owning as a
group 1,383,428 shares or 21.49% of the total issued and outstanding
shares of Common Stock.
(5) Includes options granted to purchase 68,884 shares of Common Stock.
(6) Includes options granted to purchase 69,718 shares of Common Stock.
(7) Includes options granted to purchase 24,376 shares of Common Stock.
(8) Includes options granted to purchase 65,918 shares of Common Stock.
(9) Includes options granted to purchase 32,122 shares of Common Stock.
(10) Includes options granted to purchase 28,493 shares of Common Stock.
(11) The number of shares underlying the stock options described in this
table and the foregoing footnotes, and the exercise prices for such
shares, give effect to the dilutive adjustments, which were made with
respect to such options as a result of the 5% stock dividends which
were declared by the Company in each of December, 1996, December,
1997, December, 1998 and December, 1999 and five-for-four stock
splits declared in December, 2002 and December, 2003.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers (as defined in Rule 16a-1(f)), directors, and persons owning more
than ten percent of a registered class of the Company's equity securities
to file reports of ownership and changes of ownership with the Securities
and Exchange Commission ("SEC"). Such persons are required by SEC
regulations to furnish the Company with all Section 16(a) forms they file.
Based solely upon a review of the copies of forms furnished to the Company,
the Company believes that during the 2004 fiscal year, all filing
requirements applicable to its officers and directors and 10% shareholders
were met.
14
SELECTION OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
The Board of Directors has selected PricewaterhouseCoopers LLP,
Independent Registered Certified Public Accounting Firm, to audit the
financial statements of the Company and the Bank for the fiscal year
ending December 31, 2005, and to perform such other services as may be
required of them. Representatives of PricewaterhouseCoopers LLP will be
present at the 2005 Annual Meeting and will have an opportunity to make a
statement if they desire to do so and to respond to appropriate questions
raised at the meeting.
Principal Accounting Firm Fees
The following table presents the aggregate fees billed to the Company by
PricewaterhouseCoopers, LLP, for the audit of the Company's annual financial
statements for the fiscal years ended December 31, 2004 and 2003 and other
services provided during those periods:
December
________________________
2004 2003
____ ____
Audit Fees (1) $337,000 $110,000
Audit-Related Fees (2) 15,000 8,300
Tax Fees (3) 17,650 12,850
All Other Fees (4) - -
________ ________
Total Fees $369,650 $131,150
____________________________
(1) Audit Fees consist of fees billed for services rendered for the annual
audit of the Company's consolidated financial statements, the audit of
management's assessment of internal control over financial reporting,
the review of condensed consolidated financial statements included in
the Company's quarterly reports on Form 10-Q and services that are
normally provided in connection with statutory and regulatory filings
or engagements.
(2) Audit-Related Fees consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit
or review of the Company's consolidated financial statements that are
not reported under the caption "Audit Fees". The category includes
fees related to audit of the Company's retirement plan and consultation
related to acquisitions or other business transactions.
(3) Tax Fees consist of fees billed for services rendered for tax
compliance, tax advice and tax planning.
(4) All Other Fees consist of fees billed for products and services other
than fees as reported in the above three categories. These fees
principally relate to consulting services in connection with the
Company's retirement plan.
Pre-approval of Services Provided by the Independent Auditor
The Audit Committee has adopted a policy to pre-approve all audit and
permissible non-audit services provided by the independent auditor. The
Audit Committee will consider annually and, if appropriate, approve the
scope of the audit services to be performed during the fiscal year as
outlined in an engagement letter proposed by the independent auditor. For
permissible non-audit services, the Company will submit to the Audit
Committee, at least annually, a list of services and a corresponding budget
estimate that it recommends the Audit Committee engage the independent
auditor to provide. To facilitate the prompt handling of certain
unexpected matters, the Audit Committee delegates to its Chairman the
authority to approve in advance all audit and non-audit services below
$2,000 to be provided by the independent auditor if presented to the full
Audit Committee at the next regularly scheduled meeting. The Company will
routinely inform the Audit Committee as to the extent of services provided
by the independent auditor in accordance with this pre-approval policy and
the fees incurred for the services performed to date.
15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank has had and expects to have in the future various loan and
other banking transactions in the ordinary course of business with
directors, executive officers, and principal shareholders of the Bank and
the Company (or associates of such persons). In the opinion of management,
all such transactions: (i) have been and will be made in the ordinary
course of business; (ii) have been and will be made on substantially the
same terms, including interest rates and collateral on loans, as those
generally prevailing at the time for comparable transactions with
unrelated persons; and (iii) do not involve more than the normal risk
of collectibility or present other unfavorable features. The total
amount of extensions of credit to directors, executive officers, those
stockholders named in the table in "Security Ownership of Certain
Beneficial Owners and Management" (set forth above), and any of their
associates was $3.8 million as of February 28, 2005, which represented
approximately 5.0% of total shareholders equity.
SHAREHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS
Any shareholder of the Company who wishes to communicate with the Board
of Directors, a committee of the Board, the non-management Directors as a
group or any member of the Board, may send correspondence to the Chief
Financial Officer at Commercial Bankshares, Inc., 1550 S.W. 57th Avenue,
Miami, Florida 33144. The Chief Financial Officer will forward such
communication to the Board of Directors or as appropriate to the particular
committee Chairman, unless the communication is a personal or similar
grievance, a shareholder proposal or related communication, an abusive or
inappropriate communication or a communication not related to the duties
or responsibilities of the Board of Directors, in which case the Chief
Financial Officer has the authority to disregard the communication. All
such communications will be kept confidential to the extent possible.
The Chief Financial Officer will maintain a log of, and copies of, all
communications for inspection and review by any Board member, and will
regularly review all such communications with the Board Chairman.
OTHER BUSINESS
The Board of Directors does not know of any other business to be
presented at the meeting and does not intend to bring before the meeting
any matter other than the proposals described herein. However, if any
other business should come before the meeting or any adjournments thereof,
the persons named in the accompanying proxy will have discretionary
authority to vote all proxies.
SHAREHOLDER PROPOSALS
Proposals on matters appropriate for shareholder consideration
consistent with the regulations of the Securities and Exchange Commission
submitted by shareholders for inclusion in the proxy statement and form of
proxy for the 2006 Annual Meeting of Shareholders must be received at the
Company's principal executive offices on or before November 21, 2005.
Such shareholder proposals may be mailed to Barbara E. Reed, Senior Vice
President and Chief Financial Officer, Commercial Bankshares, Inc., 1550
S.W. 57th Avenue, Miami, Florida 33144.
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 2004 is being provided to each shareholder
simultaneously with delivery of this proxy statement. Additional copies
of the Annual Report to Shareholders or copies of the Company's Annual
Report on Form 10-K, filed with the Securities and Exchange Commission,
may be obtained by writing Barbara E. Reed, Commercial Bankshares, Inc.,
1550 S.W. 57th Avenue, Miami, Florida 33144. Copies of such reports are
also available electronically at the SEC's internet website www.sec.gov,
or via the Company's website at www.commercialbankfl.com.
16
PROXY
COMMERCIAL BANKSHARES, INC.
1550 S.W. 57th Avenue, Miami, Florida 33144
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints JOSEPH W. ARMALY and JACK J. PARTAGAS,
or any of them, with power of substitution, as proxies of the undersigned
(the "Proxy"), with power to appoint his substitute, and hereby authorizes
him to represent and to vote, as specified below, all of the shares of
common stock of the undersigned held of record by the undersigned on March
8, 2005, at the Annual Meeting of Shareholders of Commercial Bankshares,
Inc. (the "Company") on April 21, 2005, and at all adjournments thereof
(the "Annual Meeting"), on the matters set forth below AND TO VOTE IN HIS
DISCRETION FOR THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY COME BEFORE
THE ANNUAL MEETING.
WHEN PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS SET FORTH ON THIS PROXY CARD. A
VOTE TO ABSTAIN WILL NOT BE COUNTED TOWARDS THE REQUISITE AFFIRMATIVE VOTE
TO APPROVE SUCH PROPOSALS.
PLEASE COMPLETE, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE, AND MAIL
IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
________________________________________________________________________
Address Change/Comments (Mark the corresponding box on the reverse side)
________________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
___
Please Mark Here for Address Change or Comments |___|
SEE REVERSE SIDE
1. Election of Directors:
NOMINEES: 01 Joseph W. Armaly
02 Jack J. Partagas
03 Cromwell A. Anderson
04 Robert Namoff
05 Sherman Simon
06 Michael W. Sontag
07 Martin Yelen
___
FOR ALL Nominees listed (except as indicated to the contrary) |___|
___
WITHHOLD AUTHORITY to vote for all nominees listed |___|
Instructions: (To withhold authority to vote for any nominee,
write the name of the nominee below.)
____________________________________________________________________
2. Other Business: In his discretion, the Proxy is authorized to vote on
such other business as may properly come before the Annual Meeting or
any adjournment or postponement thereof.
___ ___ ___
FOR |___| AGAINST |___| ABSTAIN |___|
___
I PLAN TO ATTEND THE ANNUAL MEETING |___|
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Shareholders to be held on April 21, 2005.
Dated: ________________________________, 2005
______________________________________________
Signature
______________________________________________
Signature
______________________________________________
Name (please print)
______________________________________________
Company/Title
Your signature should appear exactly as your name appears in the space
above. For joint accounts, both should sign. When signing in a fiduciary
or representative capacity, please give your full title as such. If a
corporation or partnership, sign in full corporate or partnership name by
authorized officer or partner.