UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
Proxy Statement
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Soliciting Material Pursuant to Section 240.14a-12
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SEACOAST BANKING
CORPORATION OF FLORIDA
(Name of Registrant
as Specified in its Charter)
(Name of Person(s)
Filing Proxy Statement, if other than Registrant)
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Proxy Statement
2017
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815
Colorado Avenue
Stuart, FL 34994
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NOTICE
OF 2017 ANNUAL MEETING OF SHAREHOLDERS
Thursday, May 25, 2017
3:30 p.m. Eastern Time
Seacoast Banking Corporation of Florida
(“Seacoast”) will hold its 2017 Annual Meeting of Shareholders at the Founder’s Room, Orlando Science Center,
777 E. Princeton Street, Orlando, Florida, 32803, on Thursday, May 25, 2017 at 3:30 p.m. Eastern Time.
ITEMS OF BUSINESS
To vote on the following proposals:
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1.
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Election of Directors.
To elect four Class III directors
(“Proposal 1”);
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2.
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Ratification of Appointment of Independent Auditor.
To
ratify the appointment of Crowe
Horwath LLP as independent auditors for Seacoast
for the fiscal year ending December 31, 2017 (“Proposal 2”);
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3.
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Advisory (Non-binding) Vote on Compensation of Named Executive
Officers.
To hold an
advisory vote on the compensation of the Company’s
named executive officers as disclosed in this Proxy Statement (“Proposal 3”);
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4.
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To transact such other business as
may properly come before the Annual Meeting and any adjournment or postponement thereof.
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RECORD DATE
You can vote if you were a shareholder
of record on the close of business on March 23, 2017, with is the record date for the annual meeting. This Notice of the 2017
Annual Meeting of Shareholders and the accompanying proxy statement are sent by order of the Board of Directors.
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Dennis S. Hudson, III
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Chairman & Chief Executive Officer
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April 6, 2017
TABLE OF
CONTENTS
Annual Meeting Information
Date, Time and Place:
Thursday,
May 25, 2017, at 3:30 P.M. Eastern Time at the Founder’s Room, Orlando
Science Center, 777 E. Princeton Street, Orlando,
Florida 32803. The Annual Meeting shall be referred to herein as the “Meeting” or the “Annual Meeting.”
Street Name Holders:
If
your shares of Seacoast common stock are held in a bank, brokerage or other
institutional account (which is commonly referred
to as “street name”), you are a beneficial owner of these shares, but you are not the record holder. If your shares
are held in street name, you are invited to attend the Annual Meeting; however, to vote your shares in person at the meeting,
you must request and obtain a power of attorney or other authority from the bank, broker or other nominee who holds your shares
and bring it with you to submit with your ballot at the meeting. In addition, you may vote your shares before the meeting by phone
or over the Internet by following the instructions set forth below or, if you received a voting instruction form from your brokerage
firm, by mail by completing, signing and returning the form you received. Your voting instruction form will set forth whether
Internet or telephone voting is available to you. Although most brokers and nominees offer telephone and Internet voting, availability
and specific processes will depend on their voting arrangements. We encourage you to record your vote through the Internet if
such process is available to you.
How to View Proxy Materials Online
Important Notice Regarding the Availability of
Proxy Materials for the 2017 Shareholder Meeting
Our 2017 Proxy Statement and
the Annual Report on Form 10-K for the year ended December 31, 2016 (referred to collectively herein as the “proxy materials”)
are available online at: www.proxyvote.com or at www.seacoastbanking.com/GenPage.aspx?IID=100425&GKP=325642.
We have mailed to certain shareholders
a notice of internet availability of proxy materials on or about April 6, 2017. This notice contains instructions on how to access
and review the proxy materials on the internet. The notice also contains instructions on how to submit your proxy on the internet
or by phone, or, if you prefer, to obtain a paper or email copy of the proxy materials.
HOW TO CAST YOUR VOTE
You may vote common shares
that you owned as of the close of business on March 23, 2017, which is the record date for the Meeting.
Your vote is important. Whether
or not you plan to attend the Meeting, we hope you will vote as soon as possible. Please review the instructions on each of your
voting options described in this proxy statement, as well as in the notice you received in the mail. By voting prior to the Meeting,
you will help ensure that we have a quorum and that your preferences will be expressed on the matters that are being considered.
If you are able to attend the Meeting, you may vote your shares in person, even if you have previously voted by another means
by revoking your proxy vote at any time prior to its exercise, pursuant to the procedures specified in “Revocation of Proxies.”
You may vote by any of the following methods:
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BY TELEPHONE:
You can vote by calling the number on your proxy
card or voting instruction form, or provided on the website listed on your notice.
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BY INTERNET:
You can vote online at
www.proxyvote.com
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BY MAIL:
You also may vote your shares by requesting a paper
proxy card and completing, signing and returning it by mail in the envelope provided.
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IN PERSON:
You can vote in person at the Annual Meeting. If
you hold your shares in street name, you must obtain a proxy from the record holder in order to vote in person.
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For telephone and internet
voting, you will need the 16-digit control number included in your notice, on your proxy card or in the voting instructions that
accompanied your proxy materials.
For shares held in employee
plans, we must receive your voting instructions no later than 11:59 p.m. Eastern Time on May 18, 2017 (the “cut-off date”)
to be counted. Otherwise, you may vote up until 11:59 P.M. Eastern Time the day before the meeting date.
Introduction
Our balanced growth strategy, which is
focused on organic growth and completing value creating acquisitions in growing markets, is delivering value for our shareholders.
In this section, we summarize 2016 performance
highlights and other information contained elsewhere in this proxy statement. Please carefully review the information included
throughout this proxy statement and as provided in the 2016 Annual Report on Form 10-K before you vote.
2016 Performance Highlights
Value Creation for our Shareholders
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Seacoast continued to drive positive momentum in performance
metrics, leading to sustained outperformance in total shareholder returns.
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Total return combines share price appreciation and
dividends paid to show the total return to the shareholder expressed as an annualized percentage.
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Seacoast’s industry leading performance is supported
by five key themes:
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º
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Our balanced growth strategy is working. We are meeting
the needs of our customers and generating strong returns for shareholders.
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We have a singular view of how we serve the customer,
leveraging analytics to deepen and broaden relationships across all lines of business.
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We have a deep and talented management team and experienced
Board that we believe is able to execute our strategy and deliver shareholder value.
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We have an enviable position in a strong Florida market.
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We are only in the early innings of our balanced growth
strategy and have a clear roadmap to continue to create value.
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Execution of our strategy in 2016 produced outstanding results:
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Revenues increased $35.3 million year over year to $177.4
million, reflecting significant franchise growth from $142.1 million in 2015.
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Net income improved $7.1 million to $29.2 million from
$22.1 million in 2015, and fully diluted earnings per share rose 18% to 78 cents a share
from 66 cents in 2015. Adjusted net income
1
surged 51% to $37.5 million from
$24.9 million a year earlier, with adjusted diluted earnings per share rising 35 percent
from 74 cents per share in 2015.
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º
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Households we serve have grown to 95,591 from 66,826 in
2013, with Orlando households now representing nearly 22% of Seacoast’s overall
households served, up from 3.9% in 2013.
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Loans climbed $723 million, or 34%, from year-ago levels,
and adjusting for acquisitions, loan growth rose 18%, or $377 million. Our Accelerate
commercial banking delivery platform, which we invested in four years ago, has become
a significant part of our business. Also, we continue to maintain a very granular loan
portfolio with modest commercial real estate exposure.
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Our adjusted efficiency ratio
1
improved to 60.8%
for fourth quarter 2016 from 69.1 percent in the fourth quarter 2015, and our adjusted
return on average assets
1
increased to nearly 1 percent, at 0.99%, from 0.75%
in the fourth quarter a year ago. Our adjusted return on tangible common equity
1
increased to 13.1% at year end vs. 8.5 percent in the fourth quarter of 2015.
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Our balanced growth strategy combines organic growth and
select strategic M&A along with prudent risk management to deliver consistent results.
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Growth Highlights – Our balanced growth strategy has
led to strong results since January 2014.
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o
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Household growth increased 11% organically, 44% including mergers
and acquisitions
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o
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Deposit growth increased 19% organically, 95% including mergers
and acquisitions
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o
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Loan growth increased 34% organically, 115% including mergers
and acquisitions
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o
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Our focus on business banking has led to a 190% increase in
business loans outstanding since the beginning of 2014
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o
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Our focus on deepening relationships with current customers
has led to organic growth as well. Since the beginning of 2014:
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240% increase in loan sales to current customers
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107% increase in deposit accounts sold to current customers
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85% increase in debit cards sold to current customers
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Mergers and Acquisitions Highlights
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BankFIRST acquired October 2014
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IRR exceeded internal target of 19%
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Household growth in acquired branches = +15%
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Customer growth highlights
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o
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Consumer Installment Loans = +88%
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1
Non-GAAP measure; refer to Appendix A - Informtion
Regarding Non-GAAP Financial Measures.
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Consumer Lines of Credit = +24%
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o
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Grand Bank acquired July 2015
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IRR exceeded internal target of 24%
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Household growth in acquired branches = 9%
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Customer growth highlights
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o
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Floridian Financial Group acquired March 2016
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Strengthened presence in Daytona and Orlando, along attractive
I-4 Corridor
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Compelling financial metrics announced and on track
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Tangible book value dilution earn back of 4.2 years
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EPS accretion of $0.02 in 2016
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Acquisition closed and converted in March 2016
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o
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BMO Harris Orlando Banking Operations acquired June 2016
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Further strengthened franchise in Orlando, including business
banking
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Compelling financial metrics announced and on track
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More than 6% accretive to 2016 EPS
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Acquisition closed and converted in June 2016
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Full impact of cost savings were realized in Q4 2016
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o
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Looking ahead, we anticipate further gains upon the successful
integration of GulfShore Bancshares, which we expect to close during the second half
of 2017.
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Our conservative risk profile positions us well for sustainable
value creation
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o
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While the total loan portfolio has grown by 138% since 2011,
the average loan size has decreased by 42% in the same time period. We operate a granular,
diversified loan portfolio.
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o
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The top 10 loan relationships represent 40% of total risk based
capital, down by 35% since 2011
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Our approach to Commercial Real Estate is very different than
our Florida peers
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CRE loans as a percent of total capital remain relatively flat
and intentionally below Florida peers, at 200% vs 271% for our peer group as of Q3 2016.
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Our methodical transformation continues with strong evidence
of success and significant implications over time.
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Digital connectivity and big data are disrupting all industries,
including community banking, ushering in the age of the customer. Customers are better
informed and expect companies to revolve around them, not the other way around. Thus,
convenience has been fundamentally redefined, to the benefit of banks that take advantage
of transformational opportunities.
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We recognized the implications early and, through efforts aimed
at providing digital/electronic delivery to customers and through development of industry-leading
technology and analytics, we have begun to drive growth and reduce costs.
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o
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Today more than 80% of everything being done at a Seacoast branch
can be accomplished by mobile phone or ATM. We have invested in our 24/7 call center,
ATMs, ATM capabilities and use of mobile, while consolidating our high fixed-cost branch
network.
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o
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We continue to focus on driving routine transactions to lower
cost channels and have made significant progress. We expect to process more routine transactions
through non-branch channels (e.g. mobile, ATMs) than branch channels by the middle of
2017. Our ATMs and mobile app today process the equivalent servicing volume of 18 branches
combined.
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o
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Over 30% of eligible consumer accounts are using Seacoast’s
mobile app, following its launch only three years ago.
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o
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More than 37% of all physical checks are deposited outside the
branch as of February 2017, up from 30% in February 2016, driven by steady adoption of
mobile check deposit along with our ATM network.
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o
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Our progress in digital delivery is leading to tangible results
for shareholders. Since year-end 2012, deposits have increased 99% while branches have
only increased by 27%. This has led to a significant improvement in deposits per branch,
now up to $75 million compared to $48 million at year-end 2012.
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The Florida Economy continues to provide tailwinds for our
franchise.
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Florida is projected to be the 16th largest economy in the
world in 2019 based on World Bank rankings.
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Florida’s economy is accelerating at a faster pace than
the nation for next four years and becoming a $1 trillion economy in 2018
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Florida surpassed New York in 2014 to become the nation’s
third largest state.
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Florida is also among the nation’s top ten fastest growing
states.
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Florida offers a diversified economy, with growth in education,
health services, leisure & hospitality, trade, transportation, utilities, construction
and manufacturing.
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We have a skilled and engaged employee base, with multiple
awards over the past year.
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Our Director of Business Technology & Data Management was
recognized by Ventana Research as a Business Technology leadership award winner in Business
Intelligence.
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Our Digital Marketing Manager was recognized by Google as a
success story and also recognized as one of three Social Media Leaders of 2016 by Independent
Banker Magazine.
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We’ve been granted two provisional patents based on innovation
developments by our analytics and technology teams.
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And our focus on customers is what makes us
special.
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90 years of experience has firmly established our brand and
allowed us to hone our convenience service model.
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Our customer satisfactions scores remain high. 76% of our consumer
customers have recommended Seacoast to a friend, and 78% of our small business customers
have done so as well.
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Gallup indicates that “a customer who is fully engaged
represents an average 23%
premium
in terms of share of wallet, profitability,
revenue, and relationship growth compared with the average customer. In stark contrast,
an actively disengaged customer represents a 13%
discount
in those same
measures.”
1
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Executive Compensation Program Highlights
The Compensation and Governance Committee (“CGC”)
is committed to aligning our compensation strategies with the needs of our evolving business strategy, good governance and effective
risk management practices, and our efforts to generate superior returns for our long-term shareholders. To this end, we emphasize
pay-for-performance emphasis in our executive compensation programs and, ultimately, the alignment of management with shareholder
interests. Significant value only will be realized if we exceed our long-term performance expectations and deliver meaningful
value creation for our shareholders.
Our executive compensation strategy strongly aligns our CEO
and other executives with long-term shareholder interests.
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Base salary is the sole form of fixed compensation. For our
CEO, base salary represents approximately one-half of total pay.
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In general, variable or “at risk” pay approximates
or exceeds greater than one-half of the pay for our named executive officers.
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All incentive compensation for FY16 performance was paid in
the form of equity awards granted in April 2017.
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The majority of our variable pay opportunity is delivered as
performance-based stock that only can be earned if we attain or exceed minimal levels
of acceptable financial or market-based goals, as approved by the CGC.
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Performance-based stock is our primary form of incentive compensation,
ensuring that pay outcomes closely align with shareholder returns.
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1
Gallup Business Journal, July 22, 2014
Program Changes in 2016
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Introduction of individual performance scorecards for all of
our executives which, among other things, included our EPS performance goal of $1.00.
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Short-term cash bonuses for FY16 performance were replaced
with performance-based stock awards for the CEO and performance-contingent stock awards
for the other executive officers, which were granted in April 2017. The CGC took this
action in response to guidance we received from our shareholders that they would like
management to increase their direct ownership in the Company and to enhance the holding
power (retention) and risk sensitivity of our incentive strategies.
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Please refer to the
Compensation Discussion and Analysis
and
The Executive Compensation
Tables in this proxy statement for additional details.
Summary of Voting Matters and Board Recommendations
Item
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Proposal
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Board
Voting
Recommendation
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Vote
Required
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1
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Election
of Four Class III Directors
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FOR
ALL
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Plurality
vote*
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2
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Ratification
of Appointment of Crowe Horwath LLP as Independent Auditor for 2017
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FOR
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Affirmative
vote of a majority of votes cast
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3
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Advisory
(Non-binding) Vote on Executive Compensation (Say on Pay)
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FOR
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Affirmative
vote of a majority of votes cast
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* More fully described in Proposal 1 - Election of Directors,
Manner of Voting Proxies
Our Director Nominees
You
are being asked to, among other proposals, elect four Class III directors of Seacoast. All of the nominees, except Alvaro Monserrat,
are presently directors of Seacoast. All of the nominees also serve as members of the board of directors of Seacoast’s principal
banking subsidiary, Seacoast National Bank (the “Bank”). Alvaro J. Monserrat has been nominated by Seacoast’s
Board to replace T. Michael Crook, who intends to retire from the Company’s Board at the end of the Annual Meeting. If elected,
each director nominee will serve a three year term expiring at the 2020 Annual Meeting and until their successors have been elected
and qualified. Detailed information about each nominee’s background, skills and expertise can be found in
Proposal I
– Election of Directors.
Name
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Age
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Director
Since
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Current
Occupation
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Independent
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No.
of
Other
Public
Boards
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Stephen
E. Bohner
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64
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2003
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President
and owner of real estate company
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ü
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0
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Alvaro
J. Monserrat
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48
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new
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CEO
of a leading digital workspace technology company
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ü
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0
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Julie
H. Daum
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62
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2013
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Senior
director of national executive and board search firm
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ü
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0
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Dennis
S. Hudson, III
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61
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1984
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Chairman
of Company and Bank
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2
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Board and Governance Highlights
INFORMATION ABOUT OUR CURRENT BOARD COMMITTEE MEMBERSHIP AND
2016 COMMITTEE MEETINGS
Director
Name
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Audit
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Compensation
&
Governance
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Enterprise
Risk
Management
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Strategy
&
Innovation
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Dennis
J. Arczynski
(1)
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X
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X
(2)
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X
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Stephen
Bohner
(1)
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X
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Jacqueline
L. Bradley
(1)
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X
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T.
Michael Crook
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X
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H.
Gilbert Culbreth, Jr.
(1)
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X
(2)
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Julie
H. Daum
(1)
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X
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Christopher
E. Fogal
(1)
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X
(2)
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Maryann
Goebel
(1)
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X
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X
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X
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Roger
O. Goldman
(1) (3)
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Dennis
S. Hudson, Jr.
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X
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Dennis
S. Hudson, III
(4)
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X
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Timothy
S. Huval
(1)
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X
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Herbert
A. Lurie
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X
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Alvaro
J. Monserrat
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X
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Thomas
E. Rossin
(1)
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X
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X
(2)
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TOTAL
MEETINGS HELD
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9
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8
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5
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7
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(3)
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Independent Lead Director who serves as an ex-officio (non-voting)
member of all committees
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(4)
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Chairman of the Board
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Director Attendance:
All directors attended over 75%
or more of the meetings of the Board and
Board committees on which they served in 2016.
Board Composition
Over the past four years, we have continually recruited new
talent to our Board to increase diversity of thought and experience and to better align overall Board capability with our strategic
focus. During this time, our Chairman/CEO and our Lead Independent Director have focused considerable attention on Board refreshment
and we have added six new directors (seven should Alvaro Monserrat be elected at the Annual Meeting) with skill sets needed to
help navigate the fast-changing environment impacting our business. As a result, our overall Board composition has been significantly
altered across a number of important aspects creating a vibrant Board culture and unrelenting focus on creating shareholder value
over the long term.
Below is a graphic illustration of the changes in our Board
over the past four years:
Seacoast Board of Directors
Currently, our board has the following characteristics:
Since 2013, we have managed the Board talent pipeline and:
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·
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added three women to our Board;
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·
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added expertise in the areas of regulatory matters, risk
management, talent acquisition, corporate governance, credit management, strategic planning,
investment banking and technology; and
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·
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transitioned four retiring
long-tenured directors.
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Should Alvaro Monserrat be elected at
the Annual Meeting, we will have reduced the average tenure of our non-executive directors from 13.7 years to 9.5 years and decreased
the average age by nearly 6.8 years.
Our Board is committed to identifying, appointing and developing
directors who reflect the diverse profiles of our existing and prospective customers, have experience and expertise aligned with
our strategic objectives, and who can add significant value to the Board’s efforts to oversee Seacoast on behalf of our
shareholders. Constructing an effective Board and positioning it for success are key objectives for Seacoast. Under our Independent
Lead Director Goldman’s guidance, we have made significant progress in expanding the experience of the Board. These outcomes
have increased overall Board effectiveness while increasing its agility and the velocity of decision making, which are critical
inputs in the governance process. Under Mr. Goldman’s leadership, the Board is well-positioned to fulfill its duties to
our shareholders and meet the evolving needs of Seacoast.
Our
Corporate Governance Framework
|
Board
Independence
|
·
Assuming
the election of director nominee Monserrat, 11 of our 14 directors will be independent.
·
Our
CEO is the only member of management who serves as a director.
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Board
Refreshment & Diversity
|
·
We
seek a board that, considered as a group, will possess a diversity of experience, which
may, at any one or more times, include differences with respect to personal, educational
or professional experience, gender, ethnicity, national origin, geographic representation,
community involvement and age.
·
We
have a mix of new and longer tenured directors to help ensure fresh perspectives as well as continuity and experience.
The average tenure of our non-management directors is 9.5 years.
·
In
the event that director nominee Monserrat is elected to the Board, we have added 8 new directors to our Board since 2012,
including three women.
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Board
Committees
|
·
We
have four standing Board committees—Audit; Compensation and Governance (“CGC”);
Enterprise Risk Management (“ERMC”); and Strategy and Innovation (“S&I”).
·
The
Audit Committee and CGC consist entirely of independent, non-management directors.
·
Chairs
of the committees shape the agenda and information presented to their committees.
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Strong
Independent Lead Director
|
·
Our
independent directors elect an independent lead director.
·
Our
independent lead director chairs regularly scheduled executive sessions, without management present, at which directors
can discuss management performance, succession planning, board informational needs, board effectiveness or any other matter.
·
Our
lead independent director strongly influences our strategy and direction, and facilitates our annual strategic planning
sessions.
|
Board
Oversight of Strategy & Risk
|
·
Our
Board has ultimate oversight responsibility for strategy and risk management.
·
Our
Board directly advises management on development and execution of the company’s strategy and provides oversight
through regular updates.
·
The
S&I Committee helps ensure that the strategic vision for the Company is fulfilled by challenging, proposing, reviewing,
and monitoring strategic initiatives of the Company relating to M&A activity, capital allocation and planning, business
model transformation, innovation, and shareholder relations.
·
Through
an integrated enterprise risk management process, key risks are reviewed and evaluated by the ERMC before they are reviewed
by the Board.
·
The
ERMC oversees the integration of risk management at Seacoast, monitors the risk framework and makes recommendations to
the Board regarding the Company’s risk appetite.
·
The
Audit Committee oversees the Company’s financial risk management process.
·
The
CGC oversees risks and exposures related to the Company’s corporate governance, director succession planning, and
compensation practices to ensure that they do not encourage imprudent or excessive risk-taking.
·
The
CGC assists the Board with its leadership assessment and CEO succession.
|
Accountability
|
·
We
have a plurality vote standard for the election of directors, with a director resignation
policy for uncontested elections.
·
Each
common share is entitled to one vote.
·
We
have a process by which all shareholders may communicate with our Board, a Board committee or non-management directors
as a group, or other individual directors.
|
Director
Stock Ownership
|
·
A
minimum stock holding of three times the annual base retainer is required for each director, to be acquired within four years
of joining the Board.
|
Succession
Planning
|
·
CEO
and management succession planning is one of the Board’s highest priorities. Our Board ensures that appropriate attention
is given to identifying and developing talented leaders.
|
Board
Effectiveness
|
·
Our
Board strives to continually improve its effectiveness.
·
The
Board meets in a director-only session prior to each regular meeting to discuss the Company’s business condition.
Each regular meeting is followed by an executive session of non- management directors led by the lead independent director.
·
The
Board and its independent committees annually evaluate their performance.
|
Open
Communication
|
·
Our
Board receives regular updates from business leaders regarding their area of expertise.
·
Our
directors have access to all management and employees on a confidential basis.
·
Our
Board and its committees are authorized to hire outside consultants at their discretion and at the Company’s expense.
|
CORPORATE
GOVERNANCE AT SEACOAST
|
|
Our goal is to maintain a corporate governance framework that
supports an engaged, independent board with diverse perspectives and judgment that is committed to representing the long-term
interests of our shareholders. We believe our directors should possess the highest personal and professional standards for ethics,
integrity and values, as well as practical wisdom and mature judgment. Therefore, our Board, with the assistance of management
and the CGC, regularly reviews our corporate governance principles and practices.
Corporate Governance Principles and Practices
Governance Policies
Important elements of our corporate governance framework are
our governance policies, which include:
|
·
|
our Corporate Governance Guidelines
|
|
·
|
our Code of Conduct (applicable to all directors, officers
and employees)
|
|
·
|
our Code of Ethics for Financial Professionals (applicable
to, among others, our chief executive officer and chief financial officer); and
|
|
·
|
charters for each of our Board
Committees
|
You may view these and other corporate
governance documents at our investor relations website located at www.SeacoastBanking.com, or request a copy, without charge,
upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, P. O. Box 9012,
Stuart, Florida 34995.
Board Independence
Our
governance principles provide that a substantial majority of our directors will meet the criteria for independence required
by Nasdaq. If director nominee Monserrat is elected by our shareholders at the Annual Meeting, over 78% of our Board will
meet our criteria for independence.
|
The Company’s common stock is listed on the Nasdaq Global
Select Market (“Nasdaq”). Nasdaq requires that a majority of the Company’s directors be “independent,”
as defined by the Nasdaq rules. Generally, a director does not qualify as an independent director if the director (or, in some
cases, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations
with the Company, its external or internal auditors, or other companies that do business with the Company. The Board of Directors
has determined that a majority of the Company’s directors are independent directors under the Nasdaq rules. The Company’s
current independent directors are: Dennis J. Arczynski, Stephen E. Bohner, Jacqueline L. Bradley, H. Gilbert Culbreth, Jr., Julie
H. Daum, Christopher E. Fogal, Maryann Goebel, Roger O. Goldman, Timothy S. Huval and Thomas E. Rossin.
Board Leadership Structure
Board
leadership is provided through: 1) a combined Chairman and CEO role, 2) a clearly defined and substantial lead independent
director role, 3) active committees and committee chairs, and 4) talented directors who are committed and independent-minded.
At this time, the Board believes this governance structure is appropriate and best serves the interests of our shareholders.
|
Chairman and CEO Roles
The Board of Directors periodically assesses
who should serve as Chairman and as Chief Executive Officer, and whether the offices should be combined or separate, with appropriate
consideration of current facts and circumstances.
The Company’s current Chief Executive Officer, Dennis
S. Hudson, III, also serves as the Chairman of the Board of Directors. He has held the post of Chief Executive Officer for the
past 19 years, Chairman for the past 12 years, President for the nine years prior to being named Chairman, and has also served
as Chief Executive Officer of the Bank for the past 24 years. During this time, Mr. Hudson has led the Company through its growth
from a local community bank to the fourth largest Florida bank with nearly $4.7 billion in assets and 49 full-service branches
and five commercial banking centers in 15 counties today. In light of Mr. Hudson’s significant leadership tenure with the
organization, his breadth of knowledge of the Company and his relationship with the institutional investor community, as well
as the efficiencies, accountability, unified leadership and cohesive corporate culture that this structure provides, the Board
of Directors believes it is appropriate that he serve as both Chief Executive Officer and Chairman.
Independent Lead Director
To further strengthen our corporate governance environment,
our independent directors select a lead director from the independent directors if the positions of Chairman and Chief Executive
Officer are held by the same person or if the Chairman of the Board is not an independent director. The role of our Lead Independent
Director is described in our Corporate Governance Guidelines and in the table at the end of this section.
Our current Lead Independent Director is Mr. Roger Goldman.
He has served in this capacity since 2012. Mr. Goldman’s experience includes a number of high profile leadership assignments
at or on behalf of shareholders or other constituent groups at organizations significantly larger than Seacoast. The depth and
breadth of his experience and his willingness and capacity to dedicate a significant portion of his time on behalf of the Board
and our shareholders are key inputs in our transformative efforts. We aspire to be a significantly larger organization. Our ability
to attain our aspirations depends heavily on our success in developing and implementing innovative products and services that
are easily accessible, secure, and that make a meaningful difference to our customers. His vision for our future and his “operator”
level understanding of the required strategies, investments, talent needs, capabilities, infrastructure and the associated risks
provide our Board with an independent and objective perspective on our management.
Mr. Goldman’s affiliation with Seacoast enhances our
reputation within the industry, improves the performance and effectiveness of the Board, and enhances our exposure with the investment
community. He is uniquely suited to lead the Board during the normal course of business and in its day-to-day interactions with
and oversight of management.
In addition to Mr. Goldman’s efforts to ensure an effective
and results-oriented Board, he engages on the Board’s behalf with management and employees across the Company. Frequent
active, independent, and effective engagement by Mr. Goldman aids our Board of Directors in making informed decisions on our business
and risk strategies. He also is well-positioned to assess our executive and managerial talent, succession readiness plans, and
leadership development efforts, which are key to our success. Finally, his accessibility and high level of visibility within the
Company provides employees with ongoing opportunities to raise issues or concerns free from management’s direct influence.
Mr. Goldman provides a wide array of highly valuable services to Seacoast. We believe the associated replacement costs if he were
to step down from the Lead Independent Director role are significantly greater than the costs that we would incur to engage a
replacement to replicate the services he provides to the Board and our shareholders.
Mr. Goldman devotes significant time to serving as our Lead
Independent Director. While the structure of his role and scope of responsibilities are significantly greater than most other
US companies, we view his contributions and level of commitment as material to the Company’s success. In order to induce
Mr. Goldman to accept the role of Lead Independent Director and ensure that he is paid appropriately for his contributions and
time, the Board of Directors approved a compensation package that is discussed below in the “Director Compensation”
section under “Lead Independent Director Compensation and Agreement.”
BOARD LEADERSHIP STRUCTURE - DEFINITION
OF ROLES
Lead
Independent Director Role
|
|
Chair/CEO
Role
|
Full
Board Meetings
|
·
Participates
in Board meetings
·
Acts
as Chairperson of the Board in situations where the Chairperson/ CEO is unable to serve in that capacity, including chairing
meetings of the Board in the absence of the Chairperson/CEO
|
|
·
Has
the authority to request meetings of the Board of Directors and drafts the agenda for each meeting
·
Chairs
board meetings and meetings of shareholders
|
|
|
|
Executive
Session Responsibilities
|
·
Has
the authority to call meetings of the Independent Directors
·
Chairs
executive sessions of the non-management directors
·
Sets
the agenda for executive sessions
·
Meets
separately with the Chair/CEO after executive sessions to review the matters discussed during the executive sessions
|
|
·
Receives
full feedback from Lead Independent Director on the matters discussed in executive sessions and required follow-up
|
|
|
|
Board
Communications Responsibilities
|
·
Facilitates
communication among the non- management Directors on key issues and concerns outside of Board meetings
·
Serves
as the principal, but non-exclusive, liaison and intermediary between the CEO and the Independent Directors regarding
views, concerns, and issues of the Independent Directors
·
Functions
as a resource to the CEO on Board issues and other matters affecting the Company
|
|
·
Communicates
with all Directors on key issues and concerns outside of Board meetings
·
Expected
to inform the Lead Independent Director of all significant issues facing the Company
|
|
|
|
Board
Agenda and Information Responsibilities
|
·
Collaborates
with the Chair/CEO to set the Board meeting agendas and communicates Board information
·
Seeks
Board meeting agenda input from other Directors
|
|
·
Drafts
the Board meeting agendas and works with Lead Independent Director to ensure that the requisite agendas and information is
provided to the Board for it to fulfill its duties
|
|
|
|
External
Stakeholder Responsibilities
|
·
Reviews
responses to direct shareholder communications with the Board
·
If
requested by major shareholder or the CEO, is available for consultation and direct communication
|
|
·
Represents
the Company and interacts with external stakeholders and employees
|
Lead
Independent Director Role
|
|
Chair/CEO
Role
|
Strategy
and Execution Responsibilities
|
·
Collaborates
with the Board and the CEO to establish and support appropriate short term and long term strategies, objectives, goals, and
programs that support sustainable growth and profitability.
|
|
·
Leads
the management team to establish and support the development of appropriate short term and long term strategies
·
Leads
the development of overall corporate and business unit objectives and goals
·
Develops
and implements programs, and drives overall execution to achieve desired objectives and goals
|
Company
Operations Responsibilities
|
·
Has
no role in managing Company operations
·
Officers
and employees report to the CEO, not to the Lead Independent Director
|
|
·
Leads
Company operations
·
Officers
and employees report to the CEO
|
Non-Management Executive Sessions
In
order to give a significant voice to our non-management directors, our corporate governance guidelines provide for executive
sessions of our non-management and independent directors. Our board believes this is an important governance practice that
enables the Board to discuss matters (such as strategy, CEO and management performance, succession planning and board effectiveness)
without management present.
|
Our non-management directors generally meet in executive session
following each regularly scheduled Board meeting. Our independent directors 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 the Company’s
independent directors. Our Lead Independent Director presides at all executive sessions of the independent directors and non-management
directors, and sets the agenda for such executive sessions. Any independent director may call an executive session of independent
directors at any time. The independent directors met eight times in executive session in 2016.
Committee Structure & Other Matters
Oversight is also provided through the extensive work of the
Board’s committees – Audit Committee; Compensation and Governance Committee (“CGC”); Enterprise Risk Management
Committee (“ERMC”); and Strategy and Innovation (S&I) Committee – in key areas such as financial reporting,
internal controls, compliance, corporate governance, succession planning, compensation programs, strategic planning and risk management.
The Audit Committee and the CGC consist entirely of independent, non-management directors.
In addition, at the end of each year, the Board and each of
its committees review a schedule of agenda topics to be considered in the coming year. Each Board and committee member may raise
subjects that are not on the agenda at any meeting and suggest items for inclusion in future agendas.
The Company believes that the foregoing
structure, policies, and practices, when combined with the Company’s other governance policies and procedures, provide appropriate
opportunities for oversight, discussion, evaluation of decisions and direction from the Board of Directors.
Shareholder Engagement and Board Responsiveness
The
company engages with our shareholders to ensure that the Board and management are aware of and address issues of importance
to our investors. We regularly meet with various institutional shareholders and welcome feedback from other shareholders,
which is considered by the Board or appropriate Board committee.
|
The company communicates with shareholders in a number of ways:
|
·
|
Discussing important business developments and answering
shareholder questions at annual meetings;
|
|
·
|
Holding conference calls regarding quarterly earnings
and significant corporate developments;
|
|
·
|
Through this proxy statement, chairman’s letters,
news releases, website, participation in industry conferences, and other periodic events.
|
The Company’s Corporate Governance Guidelines provide
for a process by which shareholders may communicate with the Board, a Board committee or the non-management directors as a group,
or other individual directors. Shareholders who wish to communicate with the Board of Directors, a Board committee, the Lead Independent
Director, other directors or an individual director may do so by sending written communications addressed to the Board of Directors,
a Board committee or such group of directors or individual director, c/o Corporate Secretary, Seacoast Banking Corporation of
Florida, 815 Colorado Avenue, P.O. Box, 9012, Stuart, Florida 34995. All communications will be compiled by the Company’s
Secretary and submitted to the Board of Directors, a committee of the Board of Directors or the appropriate group of directors
or individual director, as appropriate, at the next regular meeting of the Board.
Since 2009 the Company has annually included in its proxy statement
a separate advisory vote on the compensation paid to its executives, as disclosed in the Compensation Discussion and Analysis,
the compensation tables and related proxy disclosure, commonly known as a “say-on-pay” proposal. Independent surveys
have shown that an annual vote is the preferred frequency of most institutional investors. Our Board also endorses an annual vote
as we believe it gives shareholders an opportunity to voice their concerns with respect to executive compensation. Shareholder
support of our say-on-pay proposal at our 2016 annual meeting declined compared to prior years. (See “Outcome of our 2016
Say-On-Pay vote” in the table below.) Shareholder support of directors standing for re-election at the 2016 annual meeting
also dropped compared to prior year. To better understand shareholder interests and concerns, we expanded our shareholder outreach
in 2016, taking the following actions:
|
·
|
Members of our Board and executive management team met
in-person and by phone with shareholders representing a significant portion of Seacoast’s
outstanding unaffiliated shares.
|
|
·
|
In March 2016, the Company entered into an Observer Rights
Agreement with one of our largest shareholder, Basswood Capital Management, L.L.C. (“Basswood”)
and Matthew Lindenbaum, a principal of Basswood, pursuant to which we gave Mr. Lindenbaum
the right to attend all meetings of our Board of Directors in a non-voting observer capacity,
and to receive materials provided to board members, subject to certain exceptions. The
agreement can be terminated by either party at any time, but remains in effect. Mr. Lindenbaum’s
viewpoint on matters impacting institutional investors has been very insightful and beneficial
to the Company.
|
|
·
|
We have hosted visits with a number of large investors
at our facilities in Stuart to provide them with a better understanding of the depth
and talent of our management team, the execution of our balanced strategy and our progress
in creating shareholder value.
|
|
·
|
We hosted an Investor Day and webcast on February 22,
2017, where Seacoast’s management team provided a detailed update of the Company’s
strategy and long-term vision.
|
In these meetings,
our shareholders expressed a wide range of viewpoints relating to our performance, compensation, governance and other matters.
This engagement process was very informative and constructive.
Below are highlights
of the feedback we have received from shareholders and our Board’s response:
What
We Heard
|
Our
Board’s Response
|
Improve
financial performance to deliver results expected from acquisitions
|
Delivered
Promised Results.
Achieved our 2016 earnings target of $1.00 fully diluted adjusted earnings per share
1
(“EPS”)
despite economic headwinds. Improved adjusted efficiency ratio
1
by 12% year over year, and from 74.9% in fourth
quarter of 2014 to 60.8% in the fourth quarter of 2016.
|
Higher
stock ownership by management and directors
|
Replacing
Cash Bonuses with Equity.
Replaced 2016 cash bonuses paid to executive officers for achievement of performance objectives
with performance based and performance-contingent stock awards. All of our directors are paid a stock retainer; several participated
in our recent capital raise.
|
Reduce
Board tenure and the risk of entrenchment
|
Three
New Directors.
In 2016, our Board appointed two new directors, Timothy S. Huval and Herbert Lurie, further enforcing its
commitment to a balanced mix of new directors with fresh perspectives and, for continuity, seasoned, experienced directors
with deep knowledge of the Company and its markets. In 2017, our Board has nominated another new Board member, Alvaro Monserrat,
to replace a longer-tenured director. In addition, two long-tenured directors rotated off the CGC in 2016 and one short-tenured
director was added, resulting in the majority of the CGC now comprised of short-tenured directors.
|
1
Non-GAAP measure; refer to Appendix A - Informtion
Regarding Non-GAAP Financial Measures.
What
We Heard
|
Our
Board’s Response
|
Concerns
regarding our severance payments under Change-in-Control agreements and award agreements
|
Modifications
to Existing Named Executive Officer (“NEO”) Change-in-Control (“CIC”) Agreements.
In September
2016, we entered into new CIC agreements with our NEOs which: i) eliminate excise tax gross-up payments, and ii) do not provide
benefits that are paid before a CIC closes or if the acquirer retains the executive. Since 2015, our equity award agreements
require a CIC and job loss or failure of the acquirer to convert awards into new issuer awards before vesting occurs.
|
Outcome
of our 2016 Say-On-Pay vote
|
At
our 2016 annual meeting of shareholders, our say-on-pay proposal received the support of 67.6% of the votes cast. In contrast,
since 2009, our previous annual say-on-pay proposals received support of over 94% of the votes cast. Our CGC considered the
vote in relation to: 1) the alignment of our compensation program with the long-term interests of our shareholders, 2) the
evolution of our business strategy with emerging opportunities and in fulfilling customer demand for innovative products and
services, and 3) the relationship between risk-taking and the incentive compensation provided to our executives. The CGC will
continue to evaluate and refine our executive compensation plan to place greater emphasis on creating shareholder value, long-term
performance and profitability based on emerging opportunities.
|
Suggestion
to better articulate our business strategy
|
We
have redoubled our efforts in our quarterly communications with shareholders and investors, and our enhanced our investor
outreach, to convey our balanced business strategy of: 1) organic growth, 2) accretive and thoughtful M&A, and 3) innovation
and digitally-engaged distribution. We formed the S&I Committee to provide oversight of these efforts.
|
The Board and the CGC will continue to monitor best practices,
future advisory votes on executive compensation and other shareholder feedback to guide it in addressing issues of importance
to our investors.
Management Succession Planning and Development
Our
Board understands that a strong succession framework reduces Company risk and therefore ensures that appropriate attention
is given to identifying and developing talented leaders. Consequently, we have a robust management succession and development
plan which is reviewed and updated annually.
|
The Board maintains oversight
responsibility for succession planning with respect to the position of CEO and monitors and advises management regarding succession
planning for other executive officers. The Board’s goal is to have a long-term and continuing program for effective senior
leadership development and succession. The Board also has short-term contingency plans in place for emergency and unexpected occurrences,
such as the sudden departure, death, or disability of our CEO or other executive officers.
The CGC, working with
the CEO, annually evaluates succession planning at the senior levels of management and reports the results of such evaluation
to the Board, along with recommendations on management development and succession planning. The updated succession plan is reviewed
and approved by the Board to ensure that competencies are in alignment with our strategic plan. The annual review of the CEO succession
planning includes a review of specific individuals identified as active CEO succession candidates, and each of those individuals
is reviewed with respect to progress in his or her current job position and progress toward meeting his or her defined leadership
development plan. The Company’s CEO and senior management are similarly responsible for supporting “next generation”
leadership development by: identifying core talent, skills and capabilities of future leaders within the Company; assessing the
individuals against leadership capabilities; identifying talent and skill gaps and development needs; assisting with internal
candidate development; and identifying significant external hiring needs.
The Board and individual
Board members may meet with, advise and assist CEO succession candidates and become familiar with other senior and future leaders
within the Company. Directors are encouraged to become sufficiently familiar with the Company’s executive officers to be
able to provide perspective on the experience, capabilities and performance of potential CEO candidates. The Board urges senior
management, as well as other members of management who have future leadership potential within the Company, to attend and present
at Board meetings so that each can be given appropriate exposure to the Board. The Board may contact and meet with any employee
of the Company at any time, and are encouraged to make site visits, to meet with management, and to attend Company, industry and
other events.
Executive
Officers
Executive officers
are appointed annually at the organizational meeting of the respective Boards of Directors of Seacoast and the Bank, to serve
until the next annual meeting and until successors are chosen and qualified.
Dennis S. Hudson, III
Age:
61
Education:
MBA,
Florida
State University
Tenure
with Seacoast:
40 years
|
|
CURRENT
ROLE:
|
|
|
|
Chairman
and CEO of Seacoast and Bank
|
|
|
|
SELECT
PRIOR EXPERIENCE:
|
|
|
|
·
Chairman
of Seacoast since July 2005
|
|
·
CEO
of Seacoast since June 1998
|
|
·
Chairman
and CEO of the Bank since 1992
|
|
·
Director
of Seacoast since 1984
|
|
·
40
years of banking experience with Seacoast
|
|
|
|
OTHER
AFFILIATIONS/CERTIFICATIONS:
|
|
|
|
·
Member
of board of directors and audit committee of Chesapeake Utilities Corporation, Dover, DE
|
|
·
Board member,
Miami Branch of Federal Reserve Bank of Atlanta from 2005 to 2010
|
|
·
Independent
director, PENN Capital Funds, a mutual fund group managed by PENN Capital Management
|
|
·
Served
on boards of Martin County YMCA Foundation, Council on Aging, American Heart Association, and as Chairman of the Economic
Council of Martin County
|
Stephen A. Fowle
Age: 51
Education: MBA,
Northwestern University
Tenure with Seacoast:
2 years
|
|
CURRENT ROLE:
EVP and former CFO of Seacoast and
Bank from April 2015 to March 15, 2017
SELECT PRIOR EXPERIENCE:
·
CFO of WSFS Financial Corporation, a $4.9 billion publicly-traded financial institution in Wilmington,
Delaware, from 2005 to March 2015
·
CFO at Third Federal Savings and Loan Association of Cleveland, MHC, an $8+ billion multibank holding
company of 15+ subsidiaries, from 2000 to 2004
OTHER AFFILIATIONS/CERTIFICATIONS:
·
Member,
Financial Executives International
|
Charles K. Cross, Jr.
Age: 59
Education: BSBA,
University of Florida
Tenure with Seacoast: 5 years
|
|
CURRENT
ROLE:
|
|
|
|
EVP
of Commercial Banking of Bank since July 2013
|
|
|
|
SELECT
PRIOR EXPERIENCE:
|
|
|
|
·
Seacoast’s
SVP & Commercial Market Executive for Palm Beach County from March 2012 to July 2013
|
|
·
30
years of banking experience and thorough knowledge of Palm Beach and Broward County markets
|
|
·
Market leader for EverBank in Palm Beach County, FL from August 2010 to March 2012
|
|
|
|
OTHER
AFFILIATIONS/CERTIFICATIONS:
|
|
|
|
·
Chairman, District Board of Trustees of Palm Beach State College
|
|
|
|
·
Past board member of Florida Atlantic University College of Business Dean’s Council, Economic Council of
Palm Beach County, West Palm Beach Chamber of Commerce, Business Development Board of Palm Beach County and Black Business
Investment Corporation.
|
David D. Houdeshell
Age: 56
Education: MBA, The Stonier
Graduate School of Banking
Tenure with Seacoast: 7 years
|
|
CURRENT
ROLE:
|
|
|
|
EVP
and Chief Risk Officer of Seacoast and Bank since May 2015
|
|
|
|
SELECT
PRIOR EXPERIENCE:
|
|
·
EVP
and Chief Credit Officer of Seacoast and Bank since June 2010
|
|
·
EVP
and Credit Administrative Executive for The South Financial Group in Greenville, SC for 3 years
|
|
·
Chief
Credit Officer of Bombardier Capital, a financial services entity of a global transportation manufacturer, for 4 years
|
|
|
|
OTHER
AFFILIATIONS/CERTIFICATIONS:
|
|
|
|
·
Member
of audit & compliance committee of Martin Health System, Stuart, FL
|
|
|
|
|
|
|
Charles M. Shaffer
Age: 43
Education: MBA,
University of Central Florida
Tenure with Seacoast: 19 years
|
|
CURRENT
ROLE:
|
|
|
|
EVP,
CFO and Head of Strategy of Seacoast and Bank since March 15, 2017
|
|
|
|
SELECT
PRIOR EXPERIENCE:
|
|
|
|
·
EVP
and Community Banking Group of Bank from October 2013 to March 2017
|
|
·
SVP
and Controller of Bank from 2005 to 2013
|
|
·
Diverse
experience from multiple roles including strategy, corporate finance, traditional sales, and alternative sales platforms
|
|
|
|
OTHER
AFFILIATIONS/CERTIFICATIONS:
|
|
|
|
·
CPA
licensed in Florida
|
|
·
Chartered
Global Management Accountant
|
|
·
Board
member, United Way of Martin County
|
|
·
Board
member, Girl Scouts of Southeast Florida
|
Management Stock Ownership
As of the Record Date, based on available information,
all directors, director nominees and executive officers of Seacoast as a group (19 persons) beneficially owned approximately 1,286,400
outstanding shares of common stock, constituting 3.2% of the total number of shares of common stock outstanding at that date.
In addition, as of the Record Date, various subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared
voting power over 49,621 outstanding shares, or 0.1% of the outstanding shares, of Seacoast common stock, including shares held
as trustee or agent of various Seacoast employee benefit and stock purchase plans.
Director Nomination Process
The CGC serves as the nominating committee
of the Company. The committee annually reviews and makes recommendations to the full Board of Directors regarding the composition
and size of the Board of Directors and its committees, and if determined necessary, recommends potential candidates to the Board
for nomination for election to the Board by the Company’s shareholders. The CGC’s goal is to ensure that the Board
of Directors consists of a diverse group of members with the proper expertise, skills, personal attributes and professional backgrounds
who, individually and collectively, are appropriate to achieve the Company’s strategic vision and business objectives, and
best serve the Company’s and shareholders’ long-term interests.
As
part of the assessment process, the CGC evaluates whether the addition of a director or directors with particular attributes,
experience, or skill sets could enhance the Board’s effectiveness. The CGC identifies director candidates through business,
civic and legal contacts, and may consult with other directors and senior officers of the Company. The CGC may also hire a search
firm to help it identify, evaluate and conduct due diligence on potential director candidates. Once a candidate has been identified,
the CGC confirms that the candidate meets the minimum qualifications for director nominees, and gathers information about the
candidate through interviews, questionnaires, background checks, or any other means that the CGC deems to be helpful in the evaluation
process. Director candidates are interviewed by the Chairman of the CGC and at least one other member of the committee. Each member
of the committee participates in the review and discussion of director candidates. Where appropriate, directors who are not on
the CGC are encouraged to meet with and evaluate the suitability of potential candidates. The CGC then evaluates the qualities
and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board
in relation to the Company’s strategic goals, and recommends nominees to the Board. The full Board formally nominates candidates
to be included in the slate of directors presented for shareholder vote based upon the recommendations of the CGC following this
process.
Given
the evolving needs and business strategy of the Company, the CGC believes that the Board of Directors as a whole should have diversity
of thought and experience, which may, at any one or more times, include differences with respect to personal, educational or professional
experience, gender, ethnicity, national origin, geographic representation, community involvement and age. However, the CGC does
not assign specific weights to any particular criteria. Its goal is to identify nominees that, considered as a group, will possess
the talents and characteristics necessary for the Board of Directors to fulfill its responsibilities and advance our strategic
mission. In addition, each director must have the qualifications set forth in the Company’s Bylaws, as well as the personal
characteristics and core competencies described below as our Director Eligibility Guidelines:
Director
Eligibility Guidelines
|
Personal
Characteristics
|
|
Core
Competencies
|
·
the
highest ethical character
·
a
personal and professional reputation consistent with Seacoast’s values as reflected in its Code of Conduct
·
the
ability to exercise sound business judgment
·
a
willingness to listen to differing points of view and work in a mutually respectful manner
·
the
absence of any real or perceived conflict of interest that would impair the director’s ability to act in the interest
of shareholders
|
|
·
substantial
business or professional experience and be able to offer meaningful advice and guidance to the Company’s management
based on that experience
·
professional
achievement through service as a principal executive of a major company, partner in a law or accounting firm, successful
entrepreneur, a prominent academic or similar position of significant responsibility
|
The CGC also considers numerous other qualities,
skills and characteristics when evaluating director nominees, such as a candidate’s:
|
·
|
understanding of and experience in the financial services
industry, as well as accounting, finance, legal, real estate, corporate governance and
technology expertise;
|
|
·
|
leadership experience with public companies or other major
organizations, as well as civic and community relationships;
|
|
·
|
availability and commitment to carry out the responsibilities
as a director;
|
|
·
|
knowledge, experience and skills that enhance the mix
of the Board’s core competencies and provide a different perspective; and
|
|
·
|
qualification as an independent director.
|
In addition to nominations by the CGC,
any Company shareholder entitled to vote generally on the election of directors may recommend a candidate for nomination as a
director by providing advance notice of such proposed nomination to the Corporate Secretary at the Company’s principal offices.
The written submission must comply with the applicable provision in the Company’s Articles of Incorporation. To be considered,
recommendations with respect to an election of directors to be held at an annual meeting must be received not less than 60 days
nor more than 90 days prior to the anniversary of the Company’s last annual meeting of shareholders (or, if the date of
the annual meeting is changed by more than 20 days from such anniversary date, within 10 days after the date that the Company
mails or otherwise gives notice of the date of the annual meeting to shareholders), and 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 shareholders. Recommendations meeting these requirements will be brought to
the attention of the Company’s CGC. Candidates for director recommended by shareholders in compliance with these provisions
and who satisfy the Director Eligibility Guidelines will be afforded the same consideration as candidates for director identified
by Company directors, executive officers or search firms, if any, employed by the Company. In 2016, no shareholder nominee recommendations
were received.
Board Evaluation Process
Annually,
our Board and each Board committee evaluate their performance and effectiveness, along with processes and structure, to identify
areas for enhancement. The process is described below.
|
Element
|
Description
|
Corporate
Governance Review and Investor Feedback
|
The
CGC reviews corporate governance principles with consideration given to generally accepted practices and feedback from investors
and advocacy groups and makes recommendations for Board changes. This committee also oversees the process for annual board
evaluations.
|
Annual
Board & Committee Self-Evaluations
|
The
Board and committee evaluations for 2016 were conducted through a questionnaire completed by each director or committee member
and reviewed s described below.
|
Summary
and Review
|
For
the 2016 Board evaluation, an independent consultant to the CGC compiled and summarized the Board evaluation responses, including
comments, which were then reviewed by Lead Independent Director Goldman and Chairman Hudson. Committee evaluations were reviewed
by the respective committee chairs. Chairman Hudson discussed the individual results of the Board evaluation with each director,
and together with Lead Independent Director Goldman, presented summary results to the Board. The committee chairs discussed
the results with their respective committees and the full Board.
|
Actions
|
As
a result of the Board evaluation process, the Board conducted a rigorous search and assessment of experienced potential new
director candidates. Following this search, the Board selected Alvaro Monserrat asa director nominee for the 2017 Annual Meeting.
|
BOARD MEETINGS AND BOARD COMMITTEES
Board Meeting Attendance
The Board of Directors held eight regular
meetings and two special meetings during 2016. All of the directors attended at least 75% of the total number of meetings of the
Board of Directors and committees on which they served.
Annual Meeting Attendance
Ten of the 12 then-incumbent Directors
attended the Company’s 2016 annual shareholders’ meeting. The Company encourages all of its directors to attend its
shareholders’ meetings but understands that situations may arise that prevent such attendance.
Board
Committees
The Company’s Board of Directors
has four standing permanent committees: the Audit Committee, the Compensation and Governance Committee, the Enterprise Risk Management
Committee, and the Strategy and Innovation Committee. These committees serve the same functions for the Company and the Bank.
The current composition of each Company committee is set forth in the table under
Proxy Summary - Board and Governance Highlights.
Each committee has a charter specifying
such committee’s responsibilities and duties. The Audit Committee and CGC charters are reviewed annually. These charters
are available on the Company’s website at www.SeacoastBanking.com or upon written request.
Audit Committee
Members:
|
Christopher
E. Fogal (Chair), Dennis J. Arczynski and Maryann Goebel
Comprised of members who have not participated in the preparation of the financial statements of the Company or any current
subsidiary at any time during the last three fiscal years.
|
|
As
set forth in the Audit Committee charter, as adopted by the full Board of Directors, this committee:
|
Responsibilities:
|
·
reviews
Seacoast’s and its subsidiaries’ financial statements and internal accounting controls, and reviews reports
of regulatory authorities and determines that all audits and examinations required by law are performed;
·
appoints
the independent auditors, reviews their audit plan, and reviews with the independent auditors the results of the audit
and management’s response thereto;
·
reviews
the adequacy of the internal audit budget and personnel, the internal audit plan and schedule, and results of audits performed
by the internal audit staff and those outsourced to a third party;
|
·
oversees
the audit function and appraises the effectiveness of internal and external audit efforts;
·
reviews
the procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and changes to the Company’s Code of Conduct, and approves related party
transactions; and
·
periodically
reports its findings to the Board of Directors.
|
#
of Meetings:
|
This
committee held nine meetings in 2016. Following these meetings, the Audit Committee met two times in private session with
our independent auditor, and two times in private session without members of management present, but with a third party accounting
firm who co-sources a portion of the Company’s internal audit function.
|
Independence:
|
Our
Board has determined that each member of the committee is independent under Nasdaq and SEC rules. Our Board has also determined
that Mr. Fogal is an “audit committee financial expert” as defined by Item 407 of Regulation S-K.
|
Compensation and Governance Committee (“CGC”)
Members:
|
H.
Gilbert Culbreth, Jr. (Chair), Julie H. Daum and Maryann Goebel.
|
|
As
set forth in the CGC’s charter, and as adopted and approved by the full Board of Directors, this committee:
|
Responsibilities:
|
·
determines
the compensation of the Company’s and the Bank’s key executive officers;
·
oversees
the preparation of a “compensation discussion and analysis” on executive compensation and an annual compensation
committee report which is included herein under “Compensation and Governance Committee Report”;
·
administers
the provisions of the Company’s incentive compensation plans and other employee benefits plans;
·
identifies
and recommends to the Board qualified individuals to serve as members of the boards of directors of the Company and/or
the Bank;
|
·
oversees
efforts to create a diverse workforce that fosters and supports an inclusive culture;
·
takes
a leadership role in shaping corporate governance policies and practices, including recommending to the Board of Directors
the corporate governance guidelines applicable to Seacoast and monitoring Seacoast’s compliance with these policies
and guidelines; and
·
makes
recommendations to the Board of Directors concerning management development and succession planning activities at the
senior levels of management, including an appropriate successor in the event of the unexpected death, incapacity or resignation
of the CEO.
|
|
The
CGC has the resources and authority to discharge its responsibilities, including authority to retain and terminate any compensation
consulting firms, director search firms, independent legal counsel and other compensation advisers used to assist in carrying
out its responsibilities. The CGC may delegate to a subcommittee consisting of two or more members, to the extent permitted
by applicable law, such of its duties and responsibilities as it deems appropriate and advisable.
|
#
of Meetings:
|
This
committee held eight meetings in 2016.
|
Independence:
|
Our
Board of Directors has determined that each member of the committee is independent under Nasdaq and SEC rules.
|
CGC
Interlocks
and Insider Participation:
|
None
of the members of the committee is a former or current officer or employee of the company or any of its subsidiaries. None
of them has any relationship with the Company requiring disclosure under this caption under the rules of the SEC.
|
Enterprise Risk Management Committee (“ERMC”)
Members:
|
Dennis J. Arczynski (Chair), Stephen
E. Bohner, T. Michael Crook, Maryann Goebel, Dennis S. Hudson, Jr. and Thomas E. Rossin
|
|
As set forth in the ERMC’s
charter, and as adopted and approved by the full Board of Directors, this committee:
|
Responsibilities:
|
·
monitors
the risk framework to assist the Board in identifying, considering, and overseeing critical issues and opportunities;
·
evaluates
strategic opportunities from a risk perspective, highlights key risk considerations embedded in such strategic opportunities,
and makes recommendations on courses of action to the Board based on such evaluation;
·
provides
oversight of the risk management monitoring and reporting functions to help ensure these functions are independent of
business line or risk-taking processes;
|
·
reviews
key management, systems, processes and decisions, and assesses the integrity and adequacy of the risk management function
to help build risk assessment data into critical business systems, and reports significant issues to the Board;
·
makes
recommendations to the Board regarding the Company’s risk appetite, limits and policies and reviewing the strategic
plan to help ensure it aligns with the Board-approved risk appetite; and
·
recommends
to the Board the capital policy consistent with the Company’s risk appetite and reviews capital adequacy and its
allocation to each line of business.
|
#
of Meetings:
|
This
committee held five meetings in 2016.
|
Strategy and Innovation (“S&I”)
Committee
Members:
|
Thomas
E. Rossin (Chair), Dennis J. Arczynski, Dennis S. Hudson, III, Timothy S. Huval and Herbert A. Lurie
|
|
As
set forth in the S&I Committee charter, and as adopted and approved by the full Board of Directors, this committee:
|
Responsibilities:
|
·
supports,
sources and/or challenges M&A activities related to banks and non-bank entities as pertinent to the Company’s
stated strategic objectives;
·
supports,
sources and/or challenges business model transformation activities including investments in technology and/or partners;
·
reviews
capital allocations and planning to ensure an acceptable return on capital while ensuring timely exits from businesses
that do not provide an acceptable return or have limited growth prospects;
|
·
ensures
that the Company actively promotes and rewards a culture of innovation in a manner that benefits customers and shareholders;
·
ensures
that appropriate strategic metrics and modeling capabilities are used in order to assess the strength of existing strategies
and potential investments, aligned with the Company’s stated strategic objectives; and
·
ensures
that management is effectively and consistently communicating with shareholders in a manner that is consistent with the
Company’s broader strategic vision.
|
#
of Meetings:
|
This
committee held seven meetings in 2016.
|
The Board’s Role in
Strategy and Risk Oversight
The Board of Directors actively reviews our long term strategy
and the plans and programs that management develops to implement our strategy. While the Board meets formally at least once every
year to consider overall long term strategy, it generally reviews various elements of strategy, and our progress towards implementation,
at every regular meeting. Under the leadership of Lead Independent Director Goldman, our directors are active in our strategic
planning process and exercise robust oversight of and challenges to both strategies and our implementation of the strategies.
The Board believes that strategic risk
is an exceptionally important risk element among a number of risks that the Company faces and works to ensure that this risk is
appropriately managed in the context of the rapidly changing environment in which the Company and its customers operate. The Board
does not believe this risk can be delegated and the Board as a whole regularly spends a significant amount of its time engaged
with management and in executive session discussing our long term strategy, the effectiveness of our plans to implement such strategy,
and our progress against those plans.
The Board believes that an integral part of managing strategic
risk is the appointment of a strong lead director to: i) regularly engage with the CEO on an ongoing basis, ii) interact from
time to time with other key members of management and other leaders throughout the Company to examine alignment around our chosen
long-term strategy, and iii) ensure that the Board’s views are considered as our strategy evolves. The Board strongly believes
that having an active and engaged lead director better ensures that the Board as a whole can serve as a credible challenge to
management’s plans and programs and increases transparency into the fast-paced changes management is implementing.
The Board’s committees also work to ensure that we have
the right alignment to support our long-term strategic direction including: (i) an active Board recruitment process focused on
developing or acquiring the skill, experience and attributes of both individuals and the Board as a whole needed to support our
strategy, (ii) ensuring an appropriate link is established between our compensation design and our long-term strategy to encourage
and reward the achievement of our long-term goals and protect shareholder value by discouraging excessive risk, and (iii) ensuring
that our risk management structure can effectively manage the inherent risks that underlie our strategy.
Other types of risks that the Company faces include:
·
|
macro-economic risks, such as inflation, reductions in economic
growth, or recession;
|
|
·
|
political or regulatory risks,
such as restriction on access to markets;
|
|
·
|
event risks, such as natural
disasters; and
|
|
·
|
business specific risks related
to financial reporting, credit, asset/liability management, market, operational execution
(corporate governance, legal and regulatory compliance), and reputation.
|
Our ERMC regularly accesses our overall risk profile and oversees
our risk management programs which are implemented by our chief risk officer.
AUDIT
COMMITTEE REPORT
The Audit Committee is currently comprised
of three directors, Christopher E. Fogal (Chair), Dennis J. Arczynski and Maryann Goebel.
The purpose of the Audit Committee (the
“Committee”) is to assist the Board of Directors (the “Board”) of Seacoast Banking Corporation of Florida
(the “Company”) in its general oversight of the Company’s accounting, auditing and financial reporting practices.
Management is primarily responsible for the Company’s financial statements, systems of internal controls and compliance
with applicable legal and regulatory requirements. The Company’s independent registered public accounting firm, Crowe Horwath
LLP, for the year ended December 31, 2016 is responsible for performing an independent audit of the consolidated financial statements
and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the
United States, as well as expressing an opinion (pursuant to Section 404 of the Sarbanes-Oxley Act of 2002) on the effectiveness
of internal control over financial reporting.
The members of the Committee are not professional
auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent registered
public accounting firm, nor can the Committee certify that the Company’s registered public accounting firm is “independent”
under applicable rules. The Committee serves a board-level oversight role, in which it provides advice, counsel and direction
to management and the independent registered public accounting firm on the basis of the information it receives, discussions with
management and the independent registered public accounting firm, and the experience of the Committee’s members in business,
financial and accounting matters. To carry out its responsibilities, the Committee held nine meetings in 2016.
In the performance of its oversight responsibilities,
the Committee has reviewed and discussed with management and Crowe Horwath LLP the audited financial statements of the Company
for the year ended December 31, 2016. Management represented to the Committee that all financial statements were prepared in accordance
with accounting principles generally accepted in the United States and that these statements fairly present the financial condition
and results of operations of the Company at the dates and for the periods described. The Committee has relied upon this representation
without any independent verification, except for the work of Crowe Horwath LLP. The Committee also discussed these statements
with Crowe Horwath LLP, both with and without management present, and has relied upon their reported opinion on these financial
statements. The Committee’s review included discussion with Crowe Horwath LLP of the matters required to be discussed under
Public Company Accounting Oversight Board standards.
With respect to the Company’s independent
registered public accounting firm, the Committee, among other things, discussed with Crowe Horwath LLP matters relating to its
independence and received from Crowe Horwath LLP the written disclosures and the letter required by applicable requirements of
the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning
independence.
On the basis of these reviews and discussions,
and subject to the limitations of its role, the Committee recommended that the Board approve the inclusion of the Company’s
audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, for filing
with the Securities and Exchange Commission.
The Audit Committee:
Christopher E. Fogal, Chairman
Dennis J. Arczynski
Maryann Goebel
March 14, 2017
OWNERSHIP OF OUR COMMON
STOCK SHARES
The tables below provide information
regarding the beneficial ownership of our common stock as of the Record Date by:
|
·
|
each of the Company’s
directors;
|
|
·
|
each of the executive officers
named in the Summary Compensation Table;
|
|
·
|
all current directors and
executive officers as a group; and
|
|
·
|
each beneficial owner of more
than 5%.
|
As of the Record Date, 40,729,656 shares
of common stock were outstanding. Beneficial ownership is determined in accordance with SEC rules and regulations. Unless otherwise
indicated, and subject to community property laws where applicable, the Company believes that each of the shareholders named in
the tables below has sole voting and investment power with respect to the shares indicated as beneficially owned. Some of the
information in the tables is based on information included in filings made by the beneficial owners with the SEC.
Principal Shareholders (5%
Owners Exclusive of Directors and Officers)
The following table sets forth information
regarding the number and percentage of shares of common stock held by all persons and entities known by the Company to beneficially
own 5% or more of the Company’s outstanding common stock. The information regarding beneficial ownership of common stock
by the entities identified below are included in reliance on reports filed by the entities with the SEC, except that the ownership
percentage is based on the Company’s calculations.
Name of
Beneficial Owner
|
|
Amount
and Nature of Beneficial
Ownership
|
|
|
Percentage
of
Outstanding Shares
|
|
Basswood Capital Management, LLC
|
|
|
|
|
|
|
|
|
645 Madison Avenue,
10th Floor
|
|
|
2,355,043
(1)
|
|
|
|
6.2%
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
|
|
|
|
|
|
|
|
|
55 East 52nd Street
|
|
|
2,692,607
(2)
|
|
|
|
7.1%
|
|
New York, NY 10055
|
|
|
|
|
|
|
|
|
1
Non-GAAP measure; refer to Appendix A
- Informtion Regarding Non-GAAP Financial Measures.
|
(1)
|
According to a Schedule 13D/A filed
jointly by Basswood Capital Management, LLC, Matthew Lindenbaum, Bennett Lindenbaum,
and their affiliates on December 12, 2016 with the SEC with respect to Seacoast common
stock beneficially owned, each reporting person has shared voting and dispositive powers
with respect to the following number of shares of Seacoast common stock:
|
Reporting Person
|
|
#
of Shares
|
|
Basswood Capital Management,
LLC
|
|
|
2,355,043
|
|
Basswood Partners, LLC
|
|
|
430,430
|
|
Basswood Enhanced Long Short GP,
LLC
|
|
|
1,236,601
|
|
Basswood Financial Fund, LP
|
|
|
180,649
|
|
Basswood Financial Fund, Inc.
|
|
|
47,394
|
|
Basswood Financial Long Only Fund,
LP
|
|
|
38,576
|
|
Basswood Enhanced Long Short Fund,
LP
|
|
|
1,236,601
|
|
Basswood Opportunity Partners, LP
|
|
|
211,205
|
|
Basswood Opportunity Fund, Inc.
|
|
|
162,564
|
|
Matthew Lindenbaum
|
|
|
2,355,043
|
|
Bennett Lindenbaum
|
|
|
2,355,043
|
|
|
(2)
|
According to a Schedule 13G/A filed
by BlackRock, Inc. (“BlackRock”) on January 27, 2017 with the SEC with respect
to Seacoast common stock beneficially owned as of December 31, 2016, BlackRock, Inc.
has sole voting power with respect to 2,692,607 shares of Seacoast common stock and sole
dispositive power with respect to 2,692,607 shares of Seacoast common stock. The Schedule
13G provides that BlackRock is a parent holding company and that the shares of common
stock listed on the Schedule 13G are owned by various subsidiaries of BlackRock. In addition,
BlackRock reported that various persons have the right to receive, or the power to direct
the receipt of, dividends from, or the proceeds from the sale of, these shares of common
stock, and that no one person is known to have more than 5% of Seacoast common stock.
|
Ownership of Directors and
Executive Officers
Name of
Beneficial Owner
|
|
Amount
and Nature of
Beneficial Ownership
|
|
|
Percentage
|
|
Dennis J. Arczynski
|
|
|
44,819
(1)
|
|
|
|
X
|
|
Stephen E. Bohner
|
|
|
54,452
(2)
|
|
|
|
X
|
|
Jacqueline L. Bradley
|
|
|
16,954
(3)
|
|
|
|
X
|
|
T. Michael Crook
|
|
|
85,566
(4)
|
|
|
|
X
|
|
H. Gilbert Culbreth, Jr.
|
|
|
68,054
(5)
|
|
|
|
X
|
|
Julie H. Daum
|
|
|
45,839
(6)
|
|
|
|
X
|
|
Christopher E. Fogal
|
|
|
31,075
(7)
|
|
|
|
X
|
|
Maryann Goebel
|
|
|
19,563
(8)
|
|
|
|
X
|
|
Roger O. Goldman
|
|
|
264,955
(9)
|
|
|
|
X
|
|
Dennis S. Hudson, Jr.
|
|
|
323,555
(10)
|
|
|
|
X
|
|
Dennis S. Hudson, III
|
|
|
409,813
(11)
|
|
|
|
1.0%
|
|
Timothy S. Huval
|
|
|
1,255
(12)
|
|
|
|
X
|
|
Herbert A. Lurie
|
|
|
28,819
(13)
|
|
|
|
X
|
|
Alvaro J. Monserrat
|
|
|
5,142
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Rossin
|
|
|
18,237
(14)
|
|
|
|
X
|
|
Charles K. Cross, Jr.
|
|
|
33,780
(15)
|
|
|
|
X
|
|
Stephen A. Fowle
|
|
|
35,096
(16)
|
|
|
|
X
|
|
David D. Houdeshell
|
|
|
34,297
(17)
|
|
|
|
X
|
|
Charles M. Shaffer
|
|
|
34,304
(18)
|
|
|
|
X
|
|
All directors and executive officers as a group
(19 persons)
|
|
|
1,148,923
|
|
|
|
2.8%
|
|
X Less than 1%
|
(1)
|
Includes 1,672 shares held in a limited
liability company, as to which shares Mr. Arczynski has sole voting and investment power.
Also includes 9,110 shares held jointly with his wife, as to which shares Mr. Arczynski
may be deemed to share both voting and investment power. Also includes 24,475 shares
held in the Bank’s Directors’ Deferred Compensation Plan for which receipt
of such shares has been deferred, and as to which shares Mr. Arczynski has no voting
or dispositive power. Also includes 5,561 shares that Mr. Arczynski has the right to
acquire by exercising options that are exercisable within 60 days after the Record Date.
|
|
(2)
|
Includes 15,702 shares held in
the Bank’s Directors’ Deferred Compensation Plan for which receipt of such
shares has been deferred, and as to which shares Mr. Bohner has no voting or dispositive
power. Also includes 5,561 shares that Mr. Bohner has the right to acquire by exercising
options that are exercisable within 60 days after the Record Date.
|
|
(3)
|
Includes
5,533 shares held in the Bank’s Directors’ Deferred Compensation Plan for
which receipt of such shares has been deferred, and as to which shares Ms. Bradley has
no voting or dispositive power. Also includes 4,421 shares that Ms. Bradley has the right
to acquire by exercising options that are exercisable within 60 days after the Record
Date.
|
|
(4)
|
Includes 17,800 shares held jointly
with Mr. Crook’s wife and 2,800 shares held by Mr. Crook’s wife, as to which
shares Mr. Crook may be deemed to share both voting and investment power. Also includes
42,032 shares held in the Bank’s Directors’ Deferred Compensation Plan for
which receipt of such shares has been deferred, and as to which shares Mr. Crook has
no voting or dispositive power. Also includes 5,561 shares that Mr. Crook has the right
to acquire by exercising options that are exercisable within 60 days after the Record
Date.
|
|
(5)
|
Includes 10,000 shares held in
an IRA, 26,000 shares held in a family limited liability company, and 8,200 shares held
in a family sub-S corporation, as to which shares Mr. Culbreth has sole voting and investment
power. Also includes 1,000 shares held jointly with Mr. Culbreth’s children and
10,328 shares held jointly with his wife, as to which shares Mr. Culbreth may be deemed
to share both voting and investment power. Also includes 8,712 shares held in the Bank’s
Directors’ Deferred Compensation Plan for which receipt of such shares has been
deferred, and as to which shares Mr. Culbreth has no voting or dispositive power. Also
includes 2,142 shares that Mr. Culbreth has the right to acquire by exercising options
that are exercisable within 60 days after the Record Date.
|
|
(6)
|
Includes 12,859 shares held in
the Bank’s Directors’ Deferred Compensation Plan for which receipt of such
shares has been deferred, and as to which shares Ms. Daum has no voting or dispositive
power. Also includes 5,561 shares that Ms. Daum has the right to acquire by exercising
options that are exercisable within 60 days after the Record Date.
|
|
(7)
|
Includes 4,490 shares held jointly
with Mr. Fogal’s wife and 738 shares held by Mr. Fogal’s wife, as to which
shares Mr. Fogal may be deemed to share both voting and investment power. Also includes
8,925 shares held in the Bank’s Directors’ Deferred Compensation Plan for
which receipt of such shares has been deferred, and as to which shares Mr. Fogal has
no voting or dispositive power. Also includes 5,561 shares that Mr. Fogal has the right
to acquire by exercising options that are exercisable within 60 days after the Record
Date.
|
|
(8)
|
Includes 8,002 shares held in
the Bank’s Directors’ Deferred Compensation Plan for which receipt of such
shares has been deferred, and as to which shares Ms. Goebel has no voting or dispositive
power. Also includes 5,561 shares that Ms. Goebel has the right to acquire by exercising
options that are exercisable within 60 days after the Record Date.
|
|
(9)
|
Includes 11,660 shares held in
IRAs, as to which shares Mr. Goldman shares both voting and investment power with his
wife. Also includes 1,200 shares held in a special needs trust of which Mr. Goldman’s
wife is trustee, as to which shares Mr. Goldman may be deemed to share voting and investment
power and as to which Mr. Goldman disclaims beneficial ownership. Also includes 39,762
shares held in the Bank’s Directors’ Deferred Compensation Plan for which
receipt of such shares has been deferred, and as to which shares Mr. Goldman has no voting
or dispositive power. Also includes 185,561 shares that Mr. Goldman has the right to
acquire by exercising options that are exercisable within 60 days after the Record Date.
|
|
(10)
|
Includes 224,356 shares held by Sherwood
Partners, Ltd., a family limited partnership (“Sherwood Partners”), of which
Mr. Hudson and his son, Dennis S. Hudson, III, are general partners, and Mr. Hudson and
his children are limited partners. Mr. Hudson may be deemed to share voting and investment
power with respect to such shares, but disclaims beneficial ownership, except to the
extent of his 1.0% interest in Sherwood Partners. Also includes 8,298 shares held in
the Bank’s Directors’ Deferred Compensation Plan for which receipt of such
shares has been deferred, and as to which shares Mr. Hudson has no voting or dispositive
power.
|
|
(11)
|
Includes 224,356 shares held by Sherwood
Partners, of which Mr. Hudson and his father, Dennis S. Hudson, Jr., are general partners.
Mr. Hudson may be deemed to share voting and investment power with respect to such shares
with the other general partners, but disclaims beneficial ownership, except to the extent
of his 35.0% interest in Sherwood Partners and his beneficial interest in trusts having
a 53.2% interest in Sherwood Partners. Also includes 49,386 shares held jointly with
Mr. Hudson’s wife which were pledged as security for a margin loan, as to which
shares Mr. Hudson may be deemed to share voting and investment power. Also includes 30,866
shares held in the Company’s Retirement Savings Plan, and 55,743 shares that Mr.
Hudson has the right to acquire by exercising options that are exercisable within 60
days after the Record Date. Also includes 280 shares held by Mr. Hudson’s wife
as custodian and 20 shares held by his son, as to which shares Mr. Hudson may be deemed
to share both voting and investment power and as to which Mr. Hudson disclaims beneficial
ownership.
|
|
(12)
|
Includes 1,175 shares held in the
Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares
has been deferred, and as to which shares Mr. Huval has no voting or dispositive power.
|
|
(13)
|
Includes 3,258 shares held in the
Bank’s Directors’ Deferred Compensation Plan for which receipt of such shares
has been deferred, and as to which shares Mr. Lurie has no voting or dispositive power.
|
|
(14)
|
Includes 200 shares held by Mr. Rossin’s
wife, as to which shares Mr. Rossin may be deemed to share both voting and investment
power and as to which Mr. Rossin disclaims beneficial ownership. Also includes 8,298
shares held in the Bank’s Directors’ Deferred Compensation Plan for which
receipt of such shares has been deferred, and as to which shares Mr. Rossin has no voting
or dispositive power.
|
|
(15)
|
Includes 23,808 shares that Mr. Cross
has the right to acquire by exercising options that are exercisable within 60 days after
the Record Date.
|
|
(16)
|
Includes 16,855 shares held jointly
with Mr. Fowle’s wife, as to which shares Mr. Fowle may be deemed to share both
voting and investment power. Also includes 490 shares held in the Company’s Retirement
Savings Plan, and 895 shares that Mr. Fowle has the right to acquire by exercising options
that are exercisable within 60 days after the Record Date.
|
|
(17)
|
Includes 22,760 shares that Mr.
Houdeshell has the right to acquire by exercising options that are exercisable within
60 days after the Record Date.
|
|
(18)
|
Includes
1,571 shares held jointly with Mr. Shaffer’s wife, as to which shares Mr. Shaffer
may be deemed to share both voting and investment power. Includes 797 shares held in
the Company’s Retirement Savings Plan and 1,577 shares held in the Company’s
Employee Stock Purchase Plan. Also includes 22,868 shares that Mr. Shaffer has the right
to acquire by exercising options that are exercisable within 60 days after the Record
Date.
|
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION &
ANALYSIS
Executive Summary
2016 Performance Considerations
The attainment of adjusted EPS
1
of $1.00 set the
stage for the CGC’s qualitative assessment of management’s performance and the resulting pay actions for 2016. The
assessment process included scorecards that identified shared and individual goals for the year. The CGC relied on scorecards
for each of our NEOs as performance guidelines in arriving at pay decisions for our named executive officers (“NEOs”)
in 2016. Based on the CGC’s assessment of our adjusted EPS
1
performance and in the areas of operations, technology,
innovation, risk, talent, and business transformation, our NEO’s received a rating of “exceeds” expectations.
2016 NEO PAY
|
·
|
Cumulative base salaries for
our NEOs increased year-over-year by 4%.
|
|
·
|
Cumulative bonus equivalent
cash values for our NEOs increased year-over-year by 44%.
|
|
·
|
Our NEOs, other than our CEO,
received awards of Performance-contingent Restricted Stock Units (“PRSUs”)
in April 2017 for performance in 2016. These awards were issued in lieu of cash bonuses
and will be earned over three years upon the satisfaction of service and risk conditions.
Proxy rules require disclosure of PRSU award values in the 2018 Summary Compensation
Table.
|
|
·
|
Our CEO received a performance-based equity award in April
2017 for performance in 2016. The CGC increased the target value of the CEO’s performance-based
equity award in lieu of a cash bonus or PRSU award for 2016 performance.
|
|
·
|
Each continuing NEO received
a bonus cash equivalent value that will be used to estimate the value of change-in-control
(“CIC”) severance benefits that otherwise would be unfairly reduced for a
zero bonus value in an “exceeds” performance year.
|
|
·
|
The CGC approved changes effective with our 2017 equity
program in response to shareholders and to enhance and advance incentive governance and
the sensitivity between incentives and risk.
|
|
·
|
As a group, the year-over-year change in 2016 NEO Total
Direct Compensation (“TDC”), representing base salary and the target award
values of performance-based equity granted in February 2016, and as disclosed in our
2016 Summary Compensation Table, declined by 17%. The negative trajectory in 2016 NEO
TDC is solely a function of proxy disclosure rules rather than the CGC’s assessment
of NEO performance.
|
|
1
|
Non-GAAP measure; refer to
Appendix A - Informtion Regarding Non-GAAP Financial Measures.
|
Our
Executive Compensation Design Priorities and Prohibitions
The CGC is committed
to establishing and maintaining an executive compensation philosophy that allows us to attain our business and talent objectives,
is transparent, reflects a high standard of corporate governance, ensures that our incentive programs are sensitive to risk, and
above all else, promotes and protects the interests of our shareholders. The CGC accomplishes these objectives by continuously
assessing our executive compensation program and adhering to the following set of Design Priorities and Prohibitions.
Design
Priorities (what we do)
|
|
✓
Manage
our executive compensation programs to have a strong pay-for-performance orientation
|
|
✓
Fully
link participation in and settlement of performance-based incentive awards to the attainment of enterprise-wide and individual
performance goals.
|
|
✓
Emphasize
long-term stock-based awards in our executive compensation and total incentive strategies, typically representing 65% to 75%
of the total incentive value we provide to our executives.
|
|
✓ Set
meaningful performance goals that align management with shareholder interests. Ensure that incentives are sensitive to risk
considerations.
|
|
✓ Provide
minimal executive benefits and perquisites.
|
|
✓
Maintain
executive stock ownership requirements, post-settlement holding periods or mandatory deferral of performance-based awards.
|
|
✓
Prohibit
hedging and limit pledging of our common shares by our directors and executive officers
|
|
✓
Provide
reasonable executive post-employment and change-in-control protections.
|
|
✓
Discuss
our CEO’s pay and performance in executive sessions in which our CEO does not participate. Require “clawback”
of certain incentive-based compensation paid to current or former executive officers in the event of an accounting restatement.
|
|
✓
Engages
with shareholders on their concerns or priorities for our director and executive compensation programs.
|
|
Design
Prohibitions (what we don’t do)
|
✓
No
issuance of time-based restricted stock to executives except in connection with offers of employment, individual retention
or recognition programs, or as considered by the CGC on a case-by-case basis.
✓
No
repricing of underwater stock options without shareholder approval.
✓
No
incentives that encourage improper risk taking.
✓
No
excise tax gross-ups upon a change in control.
✓
No
single trigger accelerated lapse of restrictions on unvested equity in connection with a change-in-control for new awards
granted since 2014.
|
Summary of Compensation Decisions
in 2016
For planning purposes, the CGC focuses on the sum of base salary
paid during the performance year and the values it considers and approves for cash bonus value and the new performance-based equity
award earned for the performance year but approved in a subsequent year. We refer to this planning value as Total Direct Compensation
or “TDC”. TDC provides a different perspective on pay than is provided by SCTP, which reflects the values shown in
the summary compensation table less all other compensation. The CGC considered TDC in its decision process when determining the
value of the total incentive award value to approve in 2017 for 2016 performance.
The following chart illustrates the relative emphasis of each
pay element in relation to TDC, as disclosed in our 2016 Summary Compensation Table (“SCT”). Base salary represents
the sole component of TDC that is not “at risk” for performance. The percentage of TDC “at risk” would
have increased in relation to fixed pay if our NEO’s received cash bonuses for 2016 performance rather than PRSUs.
2016
NEO Mix of Total Direct Compensation
In general, the CGC typically structures NEO pay so that at
least one-half of TDC is structured as “at risk” incentive pay. The incentive pay portion of TDC is allocated to cash
bonus and performance-based equity using target weightings of 25% to 35% and 65% to 75%, respectively. The value allocated to
performance-based equity is further allocated into PSUs and options using target weightings of 65% and 35%, respectively. The
CGC relies on this structure to ensure that both short-term and long-term incentive awards are fully reflective of performance
for the year in which cash bonuses are earned and new target award values are determined and that performance-based equity serves
as our primary form of incentive compensation. For 2016, the weightings used to allocate total incentive award values represented
a departure from this philosophy given that 100% of each NEO’s total incentive was granted as performance-contingent and
or performance-based equity for 2016 performance.
The CGC approved PRSU awards in lieu of cash bonuses for 2016
performance for three reasons:
|
·
|
increase the level of Seacoast
stock ownership among our NEOs in response to shareholder concerns
|
|
·
|
reinforce
the holding power (retention) of our equity compensation program during a critical time
in our corporate history, and
|
|
·
|
maintain
and reinforce the sensitivity between incentives and risk for those most accountable
for our success and the safety and soundness of the Company.
|
PRSU target award values
were developed for each of our continuing NEOs using the total incentive methodology described previously. This effort was led
by our CEO, who is responsible for developing pay proposals for the management team, which are then presented to the CGC for consideration.
The first step in the process involved the CEO’s assessment of each recipient’s performance, as defined by their contributions
in helping Seacoast attain the goal of adjusted EPS
1
of $1.00 and in terms of individual goals defined on their scorecards.
Our CEO then developed
total incentive compensation proposals for each of our continuing NEOs, relying on input from the CGC and to a lesser extent our
Chief Human Resources Officer. In developing pay proposals for the NEOs, our CEO considered a number of factors, including: performance;
the target value of past total incentive awards; the potential of each executive; flight risk and succession readiness; the holding
power (retention) of prior equity awards, including performance-based equity awards granted in April 2017; relative internal value
considerations; and market competitiveness. The total incentive values were then allocated to a bonus equivalent cash value and
the target award values of performance-based equity.
Bonus equivalent cash
values were converted into target PRSU values using an equity value adjustment factor of 1.4. The CEO and the CGC, with input
from its consultant, relied on the equity adjustment factor to balance the different risk profiles of unrestricted cash and a
restricted stock-settled award subject to service and risk conditions over a multi-year vesting period. The CEO, working in concert
with the CGC, evaluated equity value adjustment factors from 1.2 to 1.5 times the bonus equivalent cash value. Based on input
from the CEO and the CGC’s consultant, the CGC approved an equity value adjustment factor of 1.4 and an equity structure
featuring three-year ratable vesting conditions tied to continuing service and Seacoast’s ongoing compliance with its Tier
1 Regulatory Capital requirement.
The following table
summarizes the CGC’s actions in regards to 2016 bonus cash equivalent values, how it compared to 2015 cash bonuses, and
the target value of PRSU awards issued in April 2017 for 2016 performance.
1
Non-GAAP
measure; refer to Appendix A - Informtion Regarding Non-GAAP Financial Measures.
Cash Equivalent Bonus Values
& Target PRSU Award Values for 2016
Named
Executive Officer
|
|
2015
Cash
Bonus (a)
|
|
|
2016
Bonus
Equivalent
Cash (b)
|
|
|
%
Change
(c = b / a - 1)
|
|
|
2016
Target PRSU
Award Value
(d = c x 1.4)
(1)
|
|
Dennis S. Hudson, III
|
|
$
|
100,000
|
|
|
$
|
140,000
|
|
|
|
40
|
%
|
|
|
0
|
(2)
|
Charles K. Cross, Jr.
|
|
$
|
125,000
|
|
|
$
|
150,000
|
|
|
|
20
|
%
|
|
$
|
210,000
|
|
David D. Houdeshell
|
|
$
|
75,000
|
|
|
$
|
100,000
|
|
|
|
33
|
%
|
|
$
|
140,000
|
|
Charles M. Shaffer
|
|
$
|
100,000
|
|
|
$
|
185,000
|
|
|
|
85
|
%
|
|
$
|
259,000
|
|
NEOs as a Group
|
|
|
|
|
|
|
|
|
|
|
44
|
%
|
|
|
|
|
|
(1)
|
The 2016 Target PRSU Award Values reflects the planning values
approved by the CGC, which will differ from the accounting values disclosed in next year’s
Summary Compensation Table and Grants of Plan-based Awards Table pursuant to the proxy
disclosure rules.
|
|
(2)
|
Our CEO did not receive a PRSU
award. Instead, the CGC increased the target value of the performance-based equity award
he received in April 2017.
|
The remaining portion of each NEO’s total incentive award
was granted as performance-based equity awards in April 2017 for 2016 performance. Seacoast will disclose details of these awards
in next year’s proxy statement. The CGC applied the same methodology as used by our CEO to determine the target value of
his performance-based equity award granted in April 2017 for 2016 performance.
Base Salary.
All of our named-executive
officers receive a base salary that appropriately reflects
the CGC’s assessment of NEO’s skills and
value to Seacoast. This process generally results in base salaries that are within a competitive market range. The CGC reviews
base salaries annually. It is the CGC’s philosophy to increase base salaries in response to increases in the size, scope
or complexity of an executive’s job, in connection with a promotion or other forms of recognition that appropriately reflect
value considerations, or to maintain the desired level of internal relative value. 2016 annualized base salary actions for our
named executive officers are summarized in the following table.
2016 Annualized
Base Salary Actions
Named Executive
Officer
|
|
2015
|
|
|
2016
|
|
|
% Change
|
|
Dennis S. Hudson, III
|
|
$
|
550,000
|
|
|
$
|
550,000
|
|
|
|
0
|
%
|
Steven A. Fowle
|
|
$
|
330,000
|
|
|
$
|
330,000
|
|
|
|
0
|
%
|
Charles K. Cross, Jr.
|
|
$
|
275,000
|
|
|
$
|
300,000
|
|
|
|
9
|
%
|
David D. Houdeshell
|
|
$
|
265,000
|
|
|
$
|
265,000
|
|
|
|
0
|
%
|
Charles M. Shaffer
|
|
$
|
250,000
|
|
|
$
|
300,000
|
|
|
|
20
|
%
|
NEOs as a Group
|
|
|
|
|
|
|
|
|
|
|
4
|
%
|
Mr.
Cross and Mr. Shaffer received base salary adjustments in 2016 given the impact of their respective businesses on our performance,
organic growth and the expansion of their businesses in response to recent acquisitions, their leadership, and the maturation
of our executive compensation philosophy and the underlying strategies.
2016 Total Incentives.
The following table identifies
the various forms of incentive compensation
that the CGC approved for our NEOs during 2016 or in connection with
2016 performance, excluding the target value of performance-based equity granted in April 2017 that will be disclosed in our 2018
proxy statement.
Named
Executive
Officer
|
|
Cash
Bonus
(a)
|
|
|
Target
Value of
PSUs granted
in Feb 2016 (b)
|
|
|
Target
Value of
Options granted
in Feb. 2016 (c)
|
|
|
Target
Value of
PRSUs granted in
Apr. 2017 (d)
|
|
|
Cumulative
2016
Total Incentive
Value (e=a+b+c+d)
|
|
Dennis
S. Hudson, III
|
|
$
|
0
|
|
|
$
|
357,489
|
|
|
$
|
175,881
|
|
|
$
|
0
|
|
|
$
|
533,370
|
|
Steven
A. Fowle
|
|
$
|
0
|
|
|
$
|
97,486
|
|
|
$
|
47,968
|
|
|
$
|
0
|
|
|
$
|
145,454
|
|
Charles
K. Cross, Jr.
|
|
$
|
0
|
|
|
$
|
168,992
|
|
|
$
|
83,144
|
|
|
$
|
210,000
|
|
|
$
|
462,136
|
|
David
D. Houdeshell
|
|
$
|
0
|
|
|
$
|
90,995
|
|
|
$
|
44,769
|
|
|
$
|
140,000
|
|
|
$
|
275,764
|
|
Charles
M. Shaffer
|
|
$
|
0
|
|
|
$
|
146,244
|
|
|
$
|
71,952
|
|
|
$
|
259,000
|
|
|
$
|
477,196
|
|
Equity Awards
Seacoast’s equity strategy has continued to evolve since
the financial crisis. For each of the past three years, the CGC took action to accelerate the acquisition of our stock by our
senior leadership team and other key contributors across the Company upon the attainment of performance and risk-based goals.
These actions increased the alignment of equity recipients with shareholder interests, revitalized our retention strategies, and
elevated our visibility and appeal as an employer of choice for highly skilled talent. The following tables summarize the evolution
and emphasis of our equity strategies since 2014.
Evolution of Seacoast’s
Performance-based Equity Strategies, 2013-2016
Grant
Cycle
|
Type
of
Equity
|
Performance
Period /
Payout Range /
Option Vesting Period
|
Performance
Objective(s)
|
2013
(Jun)
|
PSUs
|
·
3-year Performance Period
·
Payout as % of Target: 0-150%
|
·
Cumulative Earnings
|
|
Options
|
·
3-year ratable vesting
|
·
Stock Price Appreciation
|
2015
(Jan)
|
PSUs
|
·
4-year Performance Period with catch-up
·
Payout as % of Target: 0-150%
|
·
Cumulative Earnings
·
Return
·
Tier 1 Capital Compliance
|
|
Options
|
·
4-year monthly vesting, starting when stock price closes above exercise price by 120%
|
·
Stock Price Appreciation
·
Tier 1 Capital Compliance
|
2016
(Feb)
|
PSUs
|
·
4-year Performance Period with catch-up
·
Payout as % of Target 0-175%
|
·
Cumulative Earnings
·
Return
·
Tier 1 Capital Compliance
|
|
Options
|
·
4-year monthly vesting, starting when stock price closes above exercise price of 120%
|
·
Stock Price Appreciation
·
Tier 1 Capital Compliance
|
In 2016, the CGC approved two forms of
stock-based long-term incentive awards in connection with Seacoast’s incentive compensation strategy for our named executives.
Collectively, we refer to each award type as “performance-based equity.”
2016 Performance Stock
Unit (“PSU”) Awards
2016 PSUs represent stock-settled incentive awards where payout
can vary from 0% to 175% of the target number of shares granted based on our cumulative four-year earnings and average return
on average tangible common equity. For each of the past two award cycles, the CC approved cumulative earnings goals that require
escalating levels of double digit growth at threshold, goal and maximum performance levels. The CGC also approved a return on
tangible common equity goal that is set above our cost of capital for 2016. The return goal will modify the performance score
that is generated by our cumulative earnings by up to +/- 25%, resulting in a long-term incentive opportunity that reflects earnings
and return. The CGC selected earnings and return as metrics for our PSU program given the influence they exert on stock price
over sustained periods of time. PSU awards also include a “catch-up” provision that allows for a reduced payout after
the end of year four if our year five performance equals or exceeds the original four-year goal. This feature reduces the motivation
for our executives to take excessive or inappropriate risks by extending the performance period during slower economic periods
that could adversely affect our growth expectations and our ability to retain our executives.
2016 Performance Stock
Options (“Options”)
Options allow recipients to purchase shares of our common stock
in the future at a predetermined price. In order to ensure that our shareholders receive an appropriate return before management
can exercise its vested stock options, the awards are issued with a stock price performance hurdle equal to 120% of the grant
date closing price of the underlying shares. Once the stock price hurdle is attained for a specified number of days, restrictions
start to lapse on stock options at a rate of 1/48 per month for four years. As is the case with PSUs, the CGC relies on an extended
vesting period to provide holding power. The CGC relies on Options to reward management for value creation, which is of paramount
importance to our shareholders. We issue Options to our executives given the simplicity and transparency of this type of award
structure. In recognition that Options could be perceived as motivating the recipient to take excessive risks, the CGC manages
the target value of the awards so that they represent significantly less award opportunity than might be realized from PSU awards.
Other Considerations Involving
2016 Equity Awards
As is the case with PRSUs, employees must meet service, performance
or market, and a risked-based condition (e.g., Tier 1 Regulatory Capital) in order to receive their performance-based equity awards.
The CGC relies on compliance with our Tier 1 Regulatory Capital requirement since it relates our equity capital to our total risk
weighted assets, determining our level of capital adequacy. Our NEOs are also subject to stock ownership requirements and holding
periods in connection with stock-settled incentive awards. In addition, we will be introducing a mandatory deferral on PSUs starting
with the 2017 grant cycle.
Time-Based
Restricted Stock Units
Given our strong pay-for-performance orientation, we typically
limit the use of time-based restricted stock awards for our top executives to offers of employment, to enhance holding power (retention)
of our stock incentive strategy, or in special situations that are evaluated on a case-by-case basis at the discretion of the
CGC.
Overview of Executive Compensation
Compensation Philosophy and
Objectives
Our Board of directors views equity compensation as the foundation
of our performance, talent and incentive strategies. We rely on equity compensation to motivate recipients to create significant
wealth for themselves and our shareholders. Our stock price performance over the past few years has reinforced the attractiveness
of equity compensation to our associates, as evidenced by the number of our executives and middle managers who elected to receive
PRSUs in lieu of all or in connection with reduced cash bonuses for 2016 performance. Associate participation levels also are
increasing in our Employee Stock Purchase Plan. Seacoast provides multiple paths to associate stock ownership. All of these paths
lead to higher engagement scores and a unique and differentiating associate and customer experience. The CGC intends to continue
to rely on significant performance-based stock awards for our CEO, NEOs and other key associates given the benefits of executive
and associate stock ownership for our shareholders.
In terms of the broader aspects of our executive compensation
program, we consider: 1) the alignment of our compensation program with the long-term interests of our shareholders, 2) the desire
to structure pay in ways that promotes the evolution of our business strategy in response to emerging opportunities and customer
demand for innovative products and services, and 3) the relationship between risk-taking and incentive compensation provided to
our executives.
Specific Objectives of our executive compensation program include:
|
·
|
Attract and Retain Talented
Executives
|
|
·
|
Establish clear and enterprise-wide
expectations for growth, return and risk management
|
|
·
|
Alignment with Shareholders
|
|
·
|
Recognize Individual Contributions
|
|
·
|
Encourage Entrepreneurial
Thinking
|
|
·
|
Discourage Taking Excessive
Risk
|
Our business and talent strategies dictate that we seek to
hire and retain entrepreneurial-minded executives who are focused on value creation, share our values and commitment to effective
risk management, and possess the skills required to support our business strategies and to attain our goals and objectives. Our
goals are to motivate and reward high performance levels, as well as enhance morale and associate engagement in order to drive
superior customer service within our defined risk parameters.
Determining Executive Compensation
Role of the CGC
The CGC is responsible for establishing our compensation philosophy
and for overseeing our executive compensation policies and programs generally. As part of this responsibility, the CGC:
|
·
|
regularly interacts with our executives
in order to make informed decisions on performance, potential, developmental needs and
their value to Seacoast;
|
|
·
|
approves our executive compensation
programs, including construction of our peer group, issuance of equity awards, and certification
of results;
|
|
·
|
evaluates the performance of the
CEO and determines the CEO’s compensation;
|
|
·
|
reviews the performance of other
members of executive management and approves their compensation based on recommendations
made by the CEO; and
|
|
·
|
assesses our incentive strategies
from a risk perspective, ensuring that earnings opportunities strike the right balance
between risk and reward and that our executives are not motivated to take excessive risks.
|
The CGC reviews executive officer compensation
to ensure that such compensation supports the business and talent needs of our business and is fully aligned with our compensation
philosophies, Company and personal performance, changes in market practices and changes in individual responsibilities.
Role and Independence of
the Compensation Consultant
The CGC endeavors to adhere to effective governance practices
and principles. As such, our Committee is comprised solely of independent directors. The CGC pursuant to its Charter oversees
executive compensation and talented-related considerations, such as succession planning, and our efforts in creating a diverse
and inclusive high performance workforce capable of feeding our leadership needs across the Company. The Committee met eight times
in 2016. The Committee retained Grant Thornton in 2015 and 2016 to serve as its independent consultant. Grant Thornton attended
CGC meetings, including executive sessions, and provided information and advice independent of management and, at the direction
of CGC Chairperson, assisted management with various activities that support Seacoast’s executive compensation program.
Grant Thornton did not provide any other services to Seacoast. The CGC discussed these considerations pursuant to SEC and NASDAQ
rules and concluded that the engagement of Grant Thornton and the services it provided did not raise any conflict of interest.
Benchmarking
and Comparator Group
The CGC relies on market pay data and related research to inform
its decision on the construction and expected outcomes of our director and executive compensation programs. In considering peer
group construction, the CGC recognizes that Seacoast competes for executive talent against a wide variety of financial services
organizations and companies in other industries that rely on or want to acquire the skill sets that our executives offer. As a
result, the CGC relies substantially on information developed from a size-appropriate, high-performing core bank industry compensation
peer group in its decision process. It also considers, to a lesser extent, the pay strategies employed by large, most admired
or innovative financial services companies, and high-performing customer service and technology companies. In terms of assessing
the effect of the CGC’s decisions on how we position pay vis-à-vis market, we rely exclusively on pay and performance
data developed using our core bank industry compensation peer group or, as needed, from the McLagan Regional Bank Survey.
The 2016 peer group is unchanged from
the 2015 peer group, except that Bridge Capital Holdings, which was acquired by Western Alliance, a bank with $16.7 billion in
assets, was removed. Our Core Bank Peer Group is now comprised of:
1. Ameris Bancorp (ABCB)
|
11. Horizon Bancorp (HBNC)
|
2. BNC Bancorp (BNCN)
|
12. Lakeland Financial (LKFN)
|
3. Cardinal Financial (CFNL)
|
13. Mainsource Financial (MSFG)
|
4. City Holdings (CHCO)
|
14. Pacific Premier Bancorp (PPBI)
|
5. Eagle Bancorp (EGBN)
|
15. Renasant Corp. (RNST)
|
6. Enterprise Financial (EFSC)
|
16. Sterling Bancorp (STL)
|
7. Fidelity Southern (LION)
|
17. Stock Yards Bancorp (SYBT)
|
8. First Long Island Corp. (FLIC)
|
18. Tompkins Financial (TMP)
|
9. German American Bancorp (GABC)
|
19. Washington TR Bancorp (WASH)
|
10. Great Southern Bancorp (GSBC)
|
|
The CGC does not identify a specific target level or percentile
of base salary, incentive cash, or the target value of stock-based awards for our named executive officers. Instead, pay outcomes,
which include the target value of stock awards to be earned for future performance, initially are determined by internal performance
and talent considerations. The CGC then compares its initial thinking on NEO pay actions against market pay levels. Market assessments
serve as key points of reference and validation in the CGC’s process. Ensuring that are pay is appropriate positioned appropriately
vis-à-vis those organization against which we compete for talent, customers, and investors. Pay for our NEOs always will
be sensitive to performance and risk considerations. The CGC expects that for performance reasons NEO pay over-time will fluctuate
within an appropriate range of market pay levels.
Executive Compensation Framework
Highlights
Structure
|
Reasoning
|
PEER
GROUP:
|
|
A
core peer group of banks of similar size, business model and financial performance, and, for a secondary reference, select
companies beyond the banking industry.
|
Our business
model requires us to compete with these groups for executive talent in order to achieve our business objectives related to
growth, innovation and profitability.
|
BASE SALARY, TOTAL
INCENTIVE
& TDC:
·
No
specific target level or percentile of pay relative to comparable positions
·
Pay
decisions reflect the performance of the Company and each executive in relation to prior year pay and performance, planning
considerations, and pay relationship to market pay levels and pay practices of peer group
·
Competitiveness
will vary based on performance in terms of the calibration of total incentive awards and amounts ultimately earned from
our long-term stock incentive program
|
·
Improve pay for performance linkage
·
Align pay with overall value of each individual to Seacoast
|
CASH
BONUS:
|
|
Performance
scorecards serve as the basis for cash bonuses and the target value of performance-based long-term incentive/equity awards
|
Establish
clear expectations for individual goals as well as link with enterprise-wide growth, return and risk management objectives
|
EQUITY:
|
|
·
Simple,
performance-based, shareholder-friendly structure with 2 components, PSUs and stock options, both with a long-term emphasis,
but weighted more heavily with PSUs
·
Meaningful
stock-based award opportunities “right-sized” for company and individual performance considerations and needs
·
Approximately
50% or more of TDC for our named executive officers delivered as performance-based pay.
·
Annual
award cycles
·
4-year
PSU performance period, with an opportunity for reduced awards after five years
·
Risk considerations serve as an additional vesting requirement on both PSUs and Performance Options
|
·
PSUs allow for upside in underlying shares, providing direct linkage between potential award payouts and management’s
success at driving earnings growth and improving returns without inappropriate risk taking
·
Performance Options first require that shareholders receive a meaningful return before option begins to vest
·
Provide more compensation contingent upon achievement of performance goals or our stock’s performance
·
Aligns more closely with the shareholder interests
·
Continuously recalibrate performance expectations and promote consistent improvement
·
Enhance
retention of management team
·
Enhance long-term performance accountability
·
Improves
retention
·
Augment alignment with shareholder interests
·
Provide executives with an economic incentive to deliver sustainable results within a risk appropriate framework
|
Please
note that 2016 was the first year in which the CGC relied on PRSU awards to motivate and retain our NEOs. For this reason, PRSUs
are not identified or discussed in the preceding table.
2016 Executive Compensation
Actions
Each year the CEO makes a qualitative assessment of NEO performance
and the CGC makes a qualitative assessment of CEO performance. The assessment process relies on scorecards that are approved at
the start of each year, establishing performance guidelines against which results are compared at the end of the year. Performance
ratings are then developed for each NEO, which are used to inform the CGC’s decision regarding pay actions for the corresponding
year’s performance. Despite refinements to various aspects of our executive compensation philosophy and the underlying strategies
for 2016, the performance assessment process did not change.
The CGC and our CEO rely on qualitative assessments of the
performance of our NEOs and other members of senior management team given our accelerated growth, the rapid evolution of business,
and the changing demands on our executives. The CGC believes that qualitative assessments of NEO performance for the purpose of
compensation, development and advancement continue to serve the best interests of our shareholders.
The culmination of the CGC’s activities in regards to
CEO and NEO performance and pay are reflected in the following tables.
Compensation Paid to Chief
Executive Officer in 2016
Dennis. S. Hudson, III, Chairman
of the Board and Chief Executive Officer
Key
Influences in the CGC’s Decision Process
|
2016
Pay Outcomes
|
·
Achievement
of adjusted EPS
1
goal of $1.00 for FY16; leading contributor to our efforts to attain this goal to the benefit
of our shareholders
·
Adjusted
net income
1
of $37.5 million compared to $25.3 million in 2015
·
Adjusted
return on tangible common equity
1
for 4Q16 of 13.1%, representing a 480 basis point improvement from 4Q15 of
8.3%
·
Enhanced
executive talent and performance management system to drive improved accountability and performance by executive management
·
Strong
credit quality and appropriate risk management
·
No
major risk operational risk failures and significant upgrades and oversight in our risk management capabilities, across
the Company in general and in regards to compensation and retail sales related risks in particular
·
Successful
integration of Floridian and Orlando BMO franchises
·
Attainment
of growth and strategic initiatives measured by household growth, accretive acquisitions, increased percentages of new
accounts and loans originated through alternative channels, and a lower fixed cost structure
·
Implementation
of plan to improve operating leverage and customer experience via channel optimization
·
Associate
engagement and enterprise-wide alignment with the business strategy
·
Heightened
community and investor outreach and engagement
|
·
No
Base Salary Increase
·
Replaced
Bonus by increasing the target value of the Performance-based Equity award granted in April 2017 for 2016 performance
as compared to 2015 Bonus of $100,000
·
Performance-based
equity (PSU granted in 2016) valued at $357,489 compared to $454,049 in 2015
·
Performance
Option valued at $175,881 compared to $39,773 in 2015
·
All
Other Compensation of $33,530
·
Bonus
equivalent cash value of $140,000 to be used as an input in our CIC calculations.
|
1
Non-GAAP measure; refer to Appendix A - Informtion
Regarding Non-GAAP Financial Measures.
Compensation Paid to Our Other
Named Executive Officers in 2016
Charles K. Cross, Jr., Executive
Vice President, Commercial Banking
Key
Influences in the CGC’s Decision Process
|
2016
Pay Outcomes
|
·
Achievement
of adjusted EPS
1
goal of $1.00 for FY16
·
Adjusted
Net Income
1
of $37.5 million compared to $25.3 million in 2015
·
Adjusted
return on tangible common equity
1
for 4Q16 of 13.1%, representing a 480 basis point improvement from 4Q15 of
8.3%
·
No
major risk operational risk failures
·
Contributions
to enterprise-wide business transformation efforts
·
Line
of Business and Specialty Line of Business performance, on average, of 146% of goal
·
Development
and successful implementation of business process improvements regarding sales function
·
Development
and successful implementation of talent and staffing initiatives
·
Enhanced
and advanced customer engagement scores
|
·
Annualized
Base Salary increase to $300,000 effective April 1, 2016 compared to an annualized 2015 Base Salary of $275,000
·
PRSUs
with a target award value of $210,000 granted in lieu of a cash bonus compared to a 2015 cash bonus of $125,000
·
Performance-based
equity (PSU granted in 2016) valued at $168,992 compared to $249,443 in 2015
·
Performance
Option valued at $83,144 compared to $21,850 in 2015
·
All
Other Compensation of $23,165
·
Bonus
Equivalent Cash Value of $150,000 to be used as an input in our CIC calculations
|
1
Non-GAAP measure; refer to Appendix A - Informtion
Regarding Non-GAAP Financial Measures.
David D. Houdeshell, Executive
Vice President, Chief Risk Officer
Key
Influences in the CGC’s Decision Process
|
2016
Pay Outcomes
|
·
Achievement
of adjusted EPS
1
goal of $1.00 for FY16
·
Adjusted
Net Income
1
of $37.5 million compared to $25.3 million in 2015
·
Adjusted
return on tangible common equity
1
for 4Q16 of 13.1%, representing a 480 basis point improvement from 4Q15 of
8.3%
·
No
major risk operational risk failures
·
Contributions
to enterprise-wide business transformation efforts
·
Maintained
credit quality metrics during a high growth year
·
Successful
implementation of Credit Origination System for small business loans
·
Developed
and implemented significant enhancements to our enterprise and operational risk capabilities through new programs, systems
and performance analytics
·
Effective
partnering with other functions in the development and launch of new products and services
|
·
No
Base Salary increase.
·
PRSUs
with a target award value of $140,000 granted in lieu of a cash bonus compared to a 2015 cash bonus of $75,000
·
Performance-based
equity (PSU granted in 2016) valued at $90,995 compared to $163,559 in 2015
·
Performance
Option valued at $44,769 compared to $14,327 in 2015
·
All
Other Compensation of $11,141
·
Bonus
Equivalent Cash Value of $100,000 to be used as an input in our CIC calculations
|
1
Non-GAAP measure; refer to Appendix A - Informtion
Regarding Non-GAAP Financial Measures.
Charles M. Shaffer, Executive
Vice President, Community Banking
Key
Influences in the CGC’s Decision Process
|
2016
Pay Outcomes
|
·
Achievement
of adjusted EPS
1
goal of $1.00 for FY16; major contributor to our efforts to attain this goal to the benefit
of our shareholders
·
Adjusted
Net Income
1
of $37.5 million compared to $25.3 million in 2015
·
Adjusted
return on tangible common equity
1
for 4Q16 of 13.1%, representing a 480 basis point improvement from 4Q15 of
8.3%
·
Double
digit growth in consumer and small business commitments
·
Successful
development and implementation of sales and service transformation strategies
·
Double
digit growth in trust revenue and highest year ever in terms of growth in new trust assets
·
Changed
the mindset of Community Banking team members to one of a high performing organization that consistently wins in the marketplace
by providing a unique and differentiating customer experience
·
Ongoing
leadership of and contributions to our business transformation and strategy efforts
|
·
Annualized
Base Salary increase to $300,000 effective April 1, 2016 compared to an annualized 2015 Base Salary of $250,000
·
PRSUs
with a target award value of $259,000 granted in lieu of a cash bonus compared to a 2015 cash bonus of $100,000
·
Performance-based
equity (PSU granted in 2016) valued at $146,244 compared to $204,606 in 2015
·
Performance
Option valued at $71,952 compared to $17,923 in 2015
·
All
Other Compensation of $19,901
·
Bonus
Equivalent Cash Value of $185,000 to be used as an input in our CIC calculations
|
Stephen A. Fowle, Executive
Vice President, & Chief Financial Officer
The CGC took separate actions for Mr. Fowle given his departure
from the Company on March 31, 2017. Details are provided in the section below entitled “Transition Agreement with CFO”.
1
Non-GAAP measure; refer to Appendix A - Informtion
Regarding Non-GAAP Financial Measures.
Other Elements of the 2016
Compensation Program for Executive Officers
Change in Control Benefits
We provide change in control benefits to the named executive
officers to encourage them to consider the best interests of shareholders by stabilizing any concerns about their own personal
financial well-being in the face of a potential change in control of the Company. These agreements are described under “Employment
and Change in Control Agreements”, and detailed information is provided under “2016 Other Potential Post-Employment
Payments.”
In the event that our NEOs qualify for change-in-control severance
benefits, a portion of the payments they might receive are a function of highest paid bonus or average bonus paid for the three-year
period preceding the year in which a change-in-control (“CIC”) occurs. While issuing PRSUs in lieu of cash bonuses,
or in the case of our CEO increasing the value of his performance-based equity award, creates multiple potential benefits, the
CGC recognized that it also disadvantaged our NEOs if a CIC occurs. Specifically, as none of our NEOs received a cash bonus for
2016 performance, under the terms of their agreements their highest paid or average bonus paid for the purpose of CIC severance
benefits will reflect a zero value for a performance year in which a high value bonus otherwise would have been paid.
In response to the unintended negative consequence created
by granting PRSUs in lieu of cash bonuses for 2016 performance or in the case of our CEO increasing the target value of his performance-based
equity award, the CGC approved the same bonus cash equivalent values that it relied on in determining the value of PRSU awards.
An analysis of the impact of a zero cash bonus and the bonus equivalent cash value for each of our continuing NEOs appears in
the following table.
Cash Bonus CIC Severance Input Analysis,
2014-2016
Per Agreement:
|
|
D. Hudson
|
|
|
C. Cross
|
|
|
D. Houdeshell
|
|
|
C. Shaffer
|
|
2014 Cash Bonus
|
|
$
|
0
|
|
|
$
|
80,000
|
|
|
$
|
35,000
|
|
|
$
|
48,100
|
|
2015 Cash Bonus
|
|
$
|
100,000
|
|
|
$
|
125,000
|
|
|
$
|
75,000
|
|
|
$
|
100,000
|
|
2016 Cash Bonus
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
CIC Severance Input
|
|
$
|
100,000
|
|
|
$
|
68,333
|
|
|
$
|
36,667
|
|
|
$
|
49,367
|
|
Per CGC Directive:
|
|
D. Hudson
|
|
|
C. Cross
|
|
|
D. Houdeshell
|
|
|
C. Shaffer
|
|
2016 Cash Equivalent Bonus
|
|
$
|
140,000
|
|
|
$
|
150,000
|
|
|
$
|
100,000
|
|
|
$
|
185,000
|
|
Modified CIC Severance Input
|
|
$
|
140,000
|
|
|
$
|
118,333
|
|
|
$
|
70,000
|
|
|
$
|
111,033
|
|
CIC severance benefits attributable to cash bonus for Mr. Hudson
reflect the highest value payment he receives during the three-years prior to a transaction. CIC severance benefits attributable
to cash bonuses for our other continuing NEOs reflect the value of average cash bonus they receive during the three-years prior
to a transaction. A CIC and job loss must occur within a stated period of time before our executives will be eligible to receive
CIC severance benefits.
Retirement and Employee
Welfare Benefits
We sponsor a retirement savings plan for employees of the Company
and its affiliates (the “Retirement Savings Plan”) and a nonqualified deferred compensation plan for certain executive
officers (the “Executive Deferred Compensation Plan”). We offer these plans, and make contributions to them, to provide
employees with tax-advantaged savings vehicles and to encourage them to save money for their retirement.
The Executive Deferred Compensation Plan is described under
“Executive Compensation–Nonqualified Deferred Compensation.”
In addition to our retirement programs, we provide employees
with welfare benefits, including hospitalization, major medical, disability and group life insurance plans and paid vacation.
We also maintain a Section 125 cafeteria plan that allows our employees to set aside pre-tax dollars to pay for certain benefits.
All of the full-time employees of the Company and the Bank, including the named executive officers, are eligible to participate
in the Retirement Savings Plan and our welfare plans, subject to the terms of those plans.
The Bank provides supplemental disability insurance to certain
members of executive management, including the named executive officers, in excess of the maximum benefit of $10,000 per month
provided under the group plan for all employees. The supplemental insurance provides a benefit up to 70% of the executive’s
monthly pre-disability income based on the executive’s base salary and annual incentive compensation. Coverage can be converted
and maintained by the individual participant after employment ends. The benefit may be reduced by income from other sources, and
a partial benefit is paid if a disabled participant is able to work on a part-time basis. In 2016, the Company paid a total of
$4,917 for supplemental disability insurance for the named executive officers.
The retirement and employee welfare benefits paid by the Company
for the named executive officers that are required to be disclosed in this proxy statement are included below in the “Summary
Compensation Table,” the “Components of All Other Compensation,” and the “Nonqualified Deferred Compensation
Table,” and are described in the footnotes thereto.
Executive Perquisites
We do not consider perquisites to be a significant element
of our compensation program. However, we believe they are important and effective for attracting and retaining certain executive
talent. We do not provide tax reimbursements, or “gross-ups,” on perquisites. For additional details regarding the
executive perquisites, see below the “Summary Compensation Table” and the “Components of All Other Compensation.”
Risk Analysis of Executive
Compensation
In 2016, the CGC and our Chief Human Resources Officer conducted
a risk assessment of our compensation plans and programs to determine whether our incentive compensation programs are reasonably
likely to have a material adverse effect on the Company. This risk assessment consisted of a review of cash and equity compensation
provided to our employees, with a focus on incentive compensation plans which provide variable compensation to employees based
upon performance of the Company, one of its subsidiaries or business units, or the individual employee. The incentive plans are
designed to provide a strong link between performance and pay.
In light of the review, the Company concluded that the compensation
programs are designed with the appropriate balance of risk and reward in relation to our overall business strategy and do not
create risk that is reasonably likely to have a material adverse effect on the Company. The Company also concluded that risks
can be effectively monitored and managed. The CGC will continue to consider compensation risk implications when making decisions
regarding our compensation programs.
Risk Analysis of Retail
Sales Incentive Plans
Seacoast initiated a proactive review of our retail sales incentive
plans in May 2016. Management, including our Chief Risk Officer, Chief Human Resources Officer, and head of Community Banking,
initiated this effort in connection with our ongoing enterprise-wide business transformation efforts. After speaking to a number
of third party firms, Seacoast engaged McLagan Partners (“McLagan”), to lead the effort. We asked McLagan to provide
an independent assessment of the alignment of our retail sales incentive plans with industry best practices and our business and
customer strategies. We also asked McLagan to identify and recommend action in regards to any potential points of concern that
could motivate our incentive eligible associates to engage in inappropriate, unsafe or unsound sales practice.
McLagan presented its findings and recommendations to management
in August 2016. Management reviewed McLagan’s work and, in response, developed a Phase I implementation Plan that is currently
underway. Our Phase I Implementation Plan is resulting in modifications to our plans and how we oversee and manage incentive-related
risks. One example is the formation of our Incentive Oversight Committee (“IOC”), which we established in the Fall
of 2016. Our senior leaders, including those identified above, serve on the IOC. The IOC benefits Seacoast by providing centralized
oversight of our retail sales incentive plans and other incentive plans. The IOC also ensures that we are making satisfactory
progress on our Phase I Implementation activities, which we intend to expand in the future. The expanded effort will encompass
other incentive eligible associates in different areas of the Company. It also will enhance and advance the existing controls
and governance of our incentive plans, along with the supporting training and performance management processes.
Clawback Policy
We have adopted a Compensation Recoupment Policy to recover,
to the extent practicable and appropriate, incentive compensation from any executive officer when:
|
·
|
the incentive compensation payment or award (or the vesting
of such award) was based upon the achievement of financial results that were subsequently
the subject of a restatement, regardless of whether the executive engaged in misconduct
or otherwise contributed to the requirement for the restatement; and
|
|
·
|
a lower payment or award would have been made to the executive
officer based upon the restated financial results.
|
The policy is available on our website at www.SeacoastBanking.com.
The policy, as written, anticipates the final rules implementing the clawback provision of the Dodd Frank Wall Street Reform and
Consumer Protection Act of 2010, but will be amended, if necessary, when final regulations are issued by the SEC.
Hedging and Pledging Policy
The Company has adopted a hedging and pledging policy. The
policy prohibits our employees, including our executive officers and directors, from purchasing any financial instrument or entering
into any transaction that is designed to hedge or offset any decrease in the market value of our stock, including exchange funds,
prepaid variable forward contracts, equity swaps, puts, calls, collars, forwards or short sales.
In addition, directors and executive officers are required
to obtain advance approval of any pledging of Company shares as collateral for loans, including holding Company shares in margin
accounts. The policy also limits pledging to reasonable purposes (as defined in the policy) and limits the value of the securities
pledged in connection with a loan or other indebtedness to $250,000.
Stock Ownership Guidelines
The Board has established stock ownership guidelines for its
officers and directors, as described below:
|
|
Holding
Requirement
|
Individual/Group
|
Stock
Ownership Target
|
Before Ownership
Target Met
|
After Ownership
Target Met
|
Chief
Executive Officer
|
5 times annual base salary
|
75%
of net shares until target number of shares is met
|
50%
of net shares held for one year after vesting/ exercise
|
Other
Senior Executive Officers
|
3 times annual base salary
|
Non-Employee
Directors
|
3 times annual retainer
|
Our executive compensation program is designed to allow a participant
to earn targeted ownership over a reasonable period, usually within four years, provided individual and Company targets are achieved
and provided the participant fully participates in the program. “Net Shares” means shares of stock in excess of those
sold or withheld to satisfy the minimum tax liability upon vesting or conversion. CEO Dennis S. Hudson, III and CFO Stephen A.
Fowle have met the stock ownership guidelines. The other named executive officers, two of whom have been in senior executive officer
positions for less than four years, have not yet met the established stock ownership guidelines.
Impact of Deduction Limit
Code Section 162(m) generally establishes, with certain exceptions,
a $1 million deduction limit for all publicly held companies on compensation paid to an executive officer in any year. The CGC
gives strong consideration to the deductibility of compensation in making its compensation decisions for executive officers, balancing
the goal of maintaining a compensation program which will enable the Company to attract and retain qualified executives with the
goal of creating long-term shareholder value. The CGC reserves the right to pay executives’ compensation that is not deductible
under Section 162(m).
2017 Compensation Actions
The CGC met in March 2017 and approved a number of changes
to our equity incentive strategy, starting with this year’s grant cycle. These changes were made in direct response to shareholder
feedback and to ensure that our performance-based equity strategies continue to support our governance and risk management efforts.
Specifically:
Impetus
for Change
|
Design
Changes
|
Shareholder
feedback that our executives needs to own more shares of Seacoast stock
|
·
PRSUs
were granted in lieu of cash bonuses for 2016 performance
·
Performance
period for new PSU awards reduced from four years to three years, accelerating the rate at which our executives accumulate
shares of Seacoast stock if we perform
·
Vesting
period for new Option awards reduced from four years to three years, accelerating the rate at which our executives have
the right to exercise their options and receive shares of our common stock
|
Shareholder
feedback that Seacoast needs to perform at levels that equal or exceed the industry
|
·
PSU
metrics changed from cumulative earnings with a modifier based on Return on Tangible Common Equity (“ROTCE”)
to three-year compound annualized growth in EPS and average return on equity, which our shareholders views as key indicators
of our performance
·
Option
performance feature modified so that the stock price vesting hurdle used for prior awards is replaced by a premium option
feature for new awards whereby the exercise price of the option is set above the face value of the closing stock price
on the date of grant, placing shareholders in front of management for value realized through stock price appreciation
|
Governance
Considerations
|
·
Reduced
PSU performance period, allowing for direct and relevant pay and performance comparisons with industry competitors and
alternative investments that share our risk profile
·
Increased
the transparency of our PSU program and performance goals by replacing a single type of PSU award with two types of PSU
awards. Starting with PSUs granted in April 2017, one type of PSU will be earned for compound annualized growth in EPS
and one type of PSU will be earned for average return on equity.
|
Risk-Considerations
|
·
Implemented
a mandatory deferral feature on new PSU awards so that settlement of 50% of any shares earned for performance will be
delayed for an additional 12 months
·
Maintained
the 12-month stock holding requirement on 50% of the net shares received upon the exercise of options
·
Maintained
service and risk-based vesting requirements on all new performance-contingent and performance-based equity awards and
options
·
Continue
to grant options with a target value significantly less than the target value of PSU awards and, in most years, and total
incentive award values
|
COMPENSATION
AND GOVERNANCE COMMITTEE REPORT
|
The Compensation and Benefits Committee
has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the
Compensation and Benefits Committee recommended to the board of directors, and the board of directors approved, that the Compensation
Discussion and Analysis be included in this proxy statement.
This report shall not be deemed to be
“soliciting material” or to be “filed” with the Securities Exchange Commission, nor shall this report
be incorporated by reference by any general statement incorporating by reference this 2017 Proxy Statement into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed
filed under such Acts.
|
Compensation
and Governance Committee:
|
|
|
|
|
|
H. Gilbert Culbreth,
Jr., Chair
|
|
|
Julie H. Daum
|
|
|
Maryann Goebel
|
|
EXECUTIVE
COMPENSATION TABLES
|
2016 SUMMARY COMPENSATION
TABLE
The table below sets forth the elements that comprise total
compensation for the named executive officers of the Company for the periods indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
Name and Principal
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Position
|
|
Year
|
|
($)
(1)
|
|
|
($)
(2)
|
|
|
($)
(3)
|
|
|
($)
(3)
|
|
|
($)
|
|
|
($)
(4)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis S. Hudson,
III
|
|
2016
|
|
|
550,000
|
|
|
|
—
|
|
|
|
357,489
|
|
|
|
175,881
|
|
|
|
—
|
|
|
|
33,530
|
|
|
|
1,116,900
|
|
Chairman & CEO of
|
|
2015
|
|
|
537,852
|
|
|
|
100,000
|
|
|
|
454,049
|
|
|
|
39,773
|
|
|
|
—
|
|
|
|
42,434
|
|
|
|
1,174,108
|
|
Seacoast and Bank
|
|
2014
|
|
|
500,000
|
|
|
|
—
|
|
|
|
264
|
|
|
|
111,168
|
|
|
|
—
|
|
|
|
24,669
|
|
|
|
636,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen A. Fowle
|
|
2016
|
|
|
330,000
|
|
|
|
—
|
|
|
|
97,486
|
|
|
|
47,968
|
|
|
|
—
|
|
|
|
2,750
|
|
|
|
478,204
|
|
EVP & CFO of Seacoast
|
|
2015
|
|
|
243,903
|
|
|
|
150,000
|
(5)
|
|
|
757,998
|
|
|
|
—
|
|
|
|
—
|
|
|
|
93,216
|
|
|
|
1,245,117
|
|
and Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles K. Cross, Jr
.
|
|
2016
|
|
|
293,750
|
|
|
|
—
|
|
|
|
168,992
|
|
|
|
83,144
|
|
|
|
—
|
|
|
|
23,165
|
|
|
|
569,051
|
|
EVP, Commercial Banking
|
|
2015
|
|
|
273,333
|
|
|
|
125,000
|
|
|
|
249,443
|
|
|
|
21,850
|
|
|
|
—
|
|
|
|
29,285
|
|
|
|
698,911
|
|
of Bank
|
|
2014
|
|
|
257,500
|
|
|
|
80,000
|
|
|
|
128,956
|
|
|
|
55,584
|
|
|
|
—
|
|
|
|
28,051
|
|
|
|
550,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David D. Houdeshell
|
|
2016
|
|
|
265,000
|
|
|
|
—
|
|
|
|
90,995
|
|
|
|
44,769
|
|
|
|
—
|
|
|
|
11,141
|
|
|
|
411,905
|
|
EVP & Chief Risk Officer of
|
|
2015
|
|
|
262,500
|
|
|
|
75,000
|
|
|
|
163,559
|
|
|
|
14,327
|
|
|
|
—
|
|
|
|
17,911
|
|
|
|
533,297
|
|
Seacoast and Bank
|
|
2014
|
|
|
250,000
|
|
|
|
35,000
|
|
|
|
264
|
|
|
|
55,584
|
|
|
|
—
|
|
|
|
15,227
|
|
|
|
356,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles M. Shaffer
|
|
2016
|
|
|
287,499
|
|
|
|
—
|
|
|
|
146,244
|
|
|
|
71,952
|
|
|
|
—
|
|
|
|
19,901
|
|
|
|
525,596
|
|
EVP, Community Banking
|
|
2015
|
|
|
248,333
|
|
|
|
100,000
|
|
|
|
204,606
|
|
|
|
17,923
|
|
|
|
—
|
|
|
|
22,218
|
|
|
|
593,080
|
|
of Bank
|
|
2014
|
|
|
220,000
|
|
|
|
48,100
|
|
|
|
116,634
|
|
|
|
55,584
|
|
|
|
—
|
|
|
|
24,550
|
|
|
|
464,868
|
|
|
(1)
|
A portion of executive’s base salary included in this number
may have been deferred into the Company’s Executive Deferred Compensation Plan
(“EDCP”), the amounts of which are disclosed in the Nonqualified Deferred
Compensation Table for the applicable year. Executive officers who are also directors
do not receive any additional compensation for services provided as a director.
|
|
(2)
|
Cash bonuses earned for FY16 performance were replaced with performance-based
stock awards for our CEO and with restricted stock units for our other executive officers,
each of which were granted in 2017 and, pursuant to proxy rules, are not reported in
2016 compensation.
|
|
(3)
|
Represents the aggregate grant date fair value as of the respective
grant date for each award calculated in accordance with FASB ASC Topic 718. The assumptions
made in valuing stock awards reported in this column are discussed in Note J to the Company’s
audited financial statements included in its Annual Report on Form 10-K for the year
ended December 31, 2016. Generally, the aggregate grant date fair value is the amount
that the company expects to expense for accounting purposes and does not correspond to
the actual value that the named executives will realize from the award. For additional
information regarding such grants, see “Compensation Discussion and Analysis -
Elements of the 2016 Compensation Program for Executive Officers - Equity Awards.”
See also “2016 Grants of Plan-Based Awards” below.
|
Each of our executive officers received
PSUs. With respect to the PSU awards, the grant date fair value included in the table assumes that target performance is achieved.
The maximum value for each executive as of the grant date, assuming the highest level of performance will be achieved, is:
Name
|
|
Target Value In
Table Above
|
|
|
Maximum Value
|
|
Dennis S. Hudson, III
|
|
$
|
357,489
|
|
|
$
|
625,611
|
|
Stephen A. Fowle
|
|
$
|
97,486
|
|
|
$
|
170,608
|
|
Charles K. Cross, Jr.
|
|
$
|
168,992
|
|
|
$
|
295,733
|
|
David D. Houdeshell
|
|
$
|
90,995
|
|
|
$
|
159,241
|
|
Charles M. Shaffer
|
|
$
|
146,244
|
|
|
$
|
255,927
|
|
|
(4)
|
Additional information regarding other compensation is provided
in “2016 Components of All Other Compensation” below.
|
|
(5)
|
Cash incentive award guaranteed in offer letter dated February
10, 2015.
|
2016 COMPONENTS
OF ALL OTHER COMPENSATION
|
|
Company Paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
Company Paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to Retirement
|
|
|
Contributions
|
|
|
Car
|
|
|
Cell Phone
|
|
|
Other
|
|
|
|
|
Name
|
|
Savings Plan
|
|
|
to
EDCP
(1)
|
|
|
Allowance
|
|
|
Allowance
|
|
|
Perquisites
|
|
|
Total
|
|
Dennis. S. Hudson, III
|
|
$
|
16,097
|
|
|
$
|
8,433
|
|
|
$
|
9,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
33,530
|
|
Stephen A. Fowle
|
|
$
|
2,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
2,750
|
|
Charles K. Cross, Jr.
|
|
$
|
11,430
|
|
|
|
—
|
|
|
$
|
9,000
|
|
|
|
540
|
|
|
|
2,194
|
(2)
|
|
$
|
23,165
|
|
David D. Houdeshell
|
|
$
|
10,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
540
|
|
|
|
—
|
|
|
$
|
11,141
|
|
Charles M. Shaffer
|
|
$
|
9,150
|
|
|
$
|
1,750
|
|
|
$
|
9,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
19,901
|
|
|
(1)
|
Earned in reporting year, but contributed in following year. Also
reported in the “Nonqualified Deferred Compensation Table.”
|
|
(2)
|
Includes $2,074 for personal use of club membership and $120 for
gym membership.
|
2016 GRANTS OF PLAN-BASED
AWARDS
The following table sets forth certain information concerning
plan-based awards granted during 2016 to the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Number
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
Under Equity Incentive
|
|
|
of Shares
|
|
|
Securities
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
|
|
Plan Awards
|
|
|
of Stock
|
|
|
Underlying
|
|
|
of Option
|
|
|
and Option
|
|
|
|
Grant
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
or Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
(1)
|
|
Name
|
|
Date
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)
|
|
Dennis S. Hudson, III
|
|
2/29/2016
|
|
|
12,061
|
|
|
|
24,122
|
|
|
|
42,214
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
357,489
|
|
|
|
2/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,956
|
(2)
|
|
|
14.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen A. Fowle
|
|
2/29/2016
|
|
|
3,289
|
|
|
|
6,578
|
|
|
|
11,512
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
97,486
|
|
|
|
2/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,170
|
(2)
|
|
|
14.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles K. Cross, Jr.
|
|
2/29/2016
|
|
|
5,702
|
|
|
|
11,403
|
|
|
|
19,955
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
168,992
|
|
|
|
2/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,561
|
(2)
|
|
|
14.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David D. Houdeshell
|
|
2/29/2016
|
|
|
3,070
|
|
|
|
6,140
|
|
|
|
10,745
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
90,995
|
|
|
|
2/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,225
|
(2)
|
|
|
14.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles M. Shaffer
|
|
2/29/2016
|
|
|
4,934
|
|
|
|
9,868
|
|
|
|
17,269
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
146,244
|
|
|
|
2/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,255
|
(2)
|
|
|
14.82
|
|
|
|
|
|
|
(1)
|
Represents the aggregate grant date fair value as of the respective
grant date for each award, calculated in accordance with FASB ASC Topic 718. The assumptions
made in valuing stock awards reported in this column are discussed in Note J to the Company’s
audited financial statements included in its Annual Report on Form 10-K for the year
ended December 31, 2016.
|
|
(2)
|
Option with two-tiered vesting as described under “Design
Highlights of Equity Awards Issued in FY16 – Performance Stock Options”.
The performance criteria were met and option began vesting in 1/48th share increments
on December 1, 2016, subject to continuing service requirements.
|
Employment and Change in Control
Agreements
The Company and the Bank currently maintain employment and
change in control agreements with certain of the Company’s executive officers, the terms of which are described in more
detail below.
Employment Agreement with
Mr. Hudson
In December 18, 2014, the Company and the Bank entered into
an employment agreement with Dennis S. Hudson, III. The new employment agreement replaced the previous employment agreement between
Mr. Hudson and Seacoast and the Bank dated January 18, 1994, as amended December 31, 2008, and the change of control agreement
between these parties dated December 24, 2003.
The new employment agreement has an initial term of three (3)
years. Under the agreement, Mr. Hudson receives a minimum base salary of $500,000 per year, medical, long-term disability and
life insurance in accordance with the Bank’s insurance plans for senior management, as well as a car allowance and any other
perquisites that are approved by the Board. Mr. Hudson may also receive other compensation including bonuses, and he will be entitled
to participate in all current and future employee benefit plans and arrangements in which senior management of the Bank may participate.
In addition, the agreement contains certain non-competition, non-disclosure and non-solicitation covenants.
Under the agreement, if Mr. Hudson is terminated for “cause”,
or resigns without “good reason,” as defined in the agreement, he will receive payment of his base salary and unused
vacation through the date of termination, and any unreimbursed expenses (collectively, the “Accumulated Obligations”).
The employment agreement also contains provisions for termination upon Mr. Hudson’s death or permanent disability.
The agreement also provides for termination upon the occurrence
of a change in control. If Mr. Hudson resigns for “good reason” or is terminated “without cause” prior
to a change in control, he will receive: 1) the Accumulated Obligations; and 2) upon execution of a release of all claims against
the Company, severance of: a) two times his base salary in effect on the date of separation, b) two times a bonus equal to the
highest bonus earned by the Executive for the previous three full fiscal years (“Cash Bonus”), and c) continuing group
medical, dental, vision and prescription drug plan benefits (“Continuing Benefits”) for two years. If Mr. Hudson resigns
for “good reason” or is terminated “without cause”, within twelve months following a change in control
(as defined in the agreement), he will receive: 1) the Accumulated Obligations; and 2) upon execution of a release of all claims
against the Company, severance of: a) three times his base salary in effect on the date of separation, b) three times the Cash
Bonus; and c) Continuing Benefits for 36 months.
In addition, under the agreement, Mr. Hudson is subject to
the Company’s policies applicable to executives generally, including its policies relating to claw-back of compensation.
For a further discussion of the payments and benefits to which
Mr. Hudson would be entitled upon termination of his employment see “2015 Other Potential Post-Employment Payments.”
Change in Control Agreement
with Chief Financial Officer
The Company entered into a change in control employment agreement
with Stephen A. Fowle (referred to here as the “Executive”) on August 6, 2015, as previously agreed to in his offer
letter dated February 10, 2015. This agreement terminated with Mr. Fowle’s departure from the Company on March 31, 2017.
The change in control agreement has an initial term of one year and provides for automatic one-year extensions unless expressly
not renewed. A change in control, as defined in the agreement, must occur during the period (the “Change in Control Period”)
to trigger the agreement.
The agreement provides that, once a change in control has occurred,
the Executive and the Company agree to continue, for the Change in Control Period, the Executive’s employment in the same
position as held in the 120 day period prior to the change in control. If the Executive is terminated for “cause”
or resigns without “good reason,” as defined in the agreement, the Executive will receive payment of his base salary
and unused vacation through the date of termination; and any previously accrued and deferred compensation (collectively, the “Accrued
Obligations”). If the Executive resigns for “good reason” or is terminated “without cause,” the
Executive will receive: 1) the Accrued Obligations; 2) a bonus equal to the highest bonus earned by the Executive for the previous
three full fiscal years (“Highest Bonus”) multiplied by a fraction (the numerator of which is the number of days between
January 1 and the Executive’s date of termination and the denominator of which is 365); 3) an amount equal to the Executive’s
annual base salary in effect on the date of termination, plus the Highest Bonus; and 4) health and other welfare benefits, as
defined in the agreement, for one year following termination. In addition, all unvested stock options to acquire stock of the
Company and all awards of restricted stock of the Company held by Executive as of the date of termination shall be immediately
and fully vested as of the date of termination and, in the case of stock options, shall be fully exercisable as of the date of
termination and shall remain exercisable for the period of time set forth in the applicable option agreement. The Executive is
required to execute a release of claims as a condition to receipt of severance under the CIC Agreement.
Change in Control Agreements
with Other Named Executive Officers
The Company entered into change in control employment agreements
with Messrs. Cross, Houdeshell and Shaffer (each referred to here as the “Executive” or by name) on September 21,
2016. The CIC agreement with each Executive supersedes the previous change in control agreement between each Executive and the
Company dated October 28, 2014. The new agreement: 1) eliminates the excise tax gross-up payment contained in the 2014 agreements
and ii) does not provide benefits that are paid before a change in control closes or if the acquirer retains the executive.
Each agreement has an initial term of one year and provides
for automatic one-year extensions unless expressly not renewed. A change in control, as defined in the agreement, must occur during
the period (the “Change in Control Period”) to trigger the agreement. The agreement provides that, once a change in
control has occurred, the Company agrees to continue the employment of the Executive subject to the contract for a one-year period,
in a comparable position as the Executive held in the 120-day period prior to the change in control, and with the same annual
base pay and target bonus opportunity. If the Executive is terminated “without cause” or resigns for “good reason,”
as defined in the agreement, during the one-year period following a change in control, the Executive will receive:
|
·
|
cash severance equal to a multiple (two times, for Messrs.
Cross and Shaffer, and one times for Mr. Houdeshell) of the sum of (i) Executive’s
Annual Base Salary at the rate in effect on the date of termination, and (ii) the Executive’s
average annual performance bonus for the last three full fiscal years prior to the date
of termination (“Executive’s Average Annual Performance Bonus”);
|
|
·
|
a prorated final year bonus, based on the Executive’s
Average Annual Performance Bonus; and
|
|
·
|
health and other welfare benefits, as defined in the agreement,
for a period of time following termination (18 months for Messrs. Cross and Shaffer,
and 12 months for Mr. Houdeshell).
|
The Executive is required to execute a release of claims as
a condition to receipt of severance under the CIC Agreement and is subject to protective covenants prohibiting the disclosure
and use of the Company’s confidential information and, during the one-year period following a termination by the company
any reason other than for death or disability, or by the Executive for Good Reason, protective covenants regarding non-competition,
non-solicitation of protected customers; non-solicitation of employees, and non-disparagement of the Company or its directors,
officers, employees or affiliates.
Transition Agreement with
CFO
On February 3, 2017, the Bank entered into a Transition Agreement
with Stephen A. Fowle which became effective on February 10, 2017, related to his decision to stepdown as CFO and his termination
of employment with the Company on March 31, 2017. The agreement provides that Mr. Fowle will be entitled to certain severance
benefits upon the execution of a mutual release of claims against the Bank and its affiliates. The release of claims was signed
on March 30, 2017 and becomes became effective on March 31, 2017. Pursuant to the terms of the Transition Agreement, Mr. Fowle
will be entitled to receive a payment in the amount of $165,000 no later than 15 days following the effective date of the release.
Mr. Fowle will be entitled to receive an additional payment in the amount of $82,500 on October 1, 2017 in the event Mr. Fowle
has not obtained new employment. Subject to certain exceptions, Mr. Fowle will not be entitled to such additional payment in the
event he has obtained new employment on or before such date. The Bank will make a lump sum payment to Mr. Fowle equal to 18 months
of certain COBRA insurance premiums. In addition, certain of Mr. Fowle’s unvested and outstanding shares of restricted stock
will vest and certain unvested and outstanding performance options will vest and become exercisable. The Transition Agreement
requires Mr. Fowle be subject to certain restrictive covenants, which include non-solicitation of Bank customers and employees,
and non-disclosure of confidential and proprietary information about the Bank, its employees, customers and clients.
For a further discussion of the benefits and payments provided
for under these agreements see “2016 Other Potential Post-Employment Payments.”
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END 2016
The following table sets forth certain
information concerning outstanding equity awards as of December 31, 2016 granted to the named executive officers. This table includes
the number of shares of common stock covered by both exercisable options, non-exercisable options or stock appreciation rights
(“SARs”), and unexercised unearned options or SARs awarded under an equity incentive plan that were outstanding as
of December 31, 2016. Also reported are restricted stock units and restricted stock awards, and their market value, that had not
vested as of December 31, 2016.
|
|
OPTION
AWARDS
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Equity incentive plan
|
|
|
Equity incentive plan awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value of
|
|
|
awards: number of
|
|
|
market or payout value of
|
|
|
|
Number of Securities
|
|
|
Number of Securities
|
|
|
Option
|
|
|
Option
|
|
|
Number of Shares or
|
|
|
Shares or Units of
|
|
|
unearned shares, units or
|
|
|
unearned shares, units or
|
|
Name
|
|
Underlying
Unexercised
Option (#) Exercisable
|
|
|
Underlying
Unexercised
Option (#) Unexercisable
|
|
|
Exercise
Price ($)
|
|
|
Expiration
Date
|
|
|
Units
of Stock That
Have Not Vested
(1)
(#)
|
|
|
Stock
That Have Not
Vested
(2)
($)
|
|
|
other
rights that have not
Vested (#)
|
|
|
other
rights that have not
Vested
(2)
($)
|
|
|
|
|
14,627
|
(3)
|
|
|
—
|
|
|
|
111.10
|
|
|
|
04/02/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,640
|
|
|
|
7,760
|
(4)
|
|
|
11.00
|
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,333
|
|
|
|
16,667
|
(5)
|
|
|
10.54
|
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis S. Hudson, III
|
|
|
6,755
|
|
|
|
11,220
|
(6)
|
|
|
12.63
|
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,102
|
|
|
|
50,854
|
(7)
|
|
|
14.82
|
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,786
|
(8)
|
|
|
943,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,950
|
(9)
|
|
|
793,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,122
|
|
|
|
532,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen A. Fowle
|
|
|
305
|
|
|
|
13,865
|
(7)
|
|
|
14.82
|
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,223
|
(11)
|
|
|
754,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,578
|
(10)
|
|
|
145,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,440
|
|
|
|
960
|
(4)
|
|
|
11.00
|
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,667
|
|
|
|
8,333
|
(5)
|
|
|
10.54
|
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles K. Cross Jr.
|
|
|
3,725
|
|
|
|
6,150
|
(6)
|
|
|
12.63
|
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
544
|
|
|
|
24,017
|
(7)
|
|
|
14.82
|
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
976
|
(12)
|
|
|
21,531
|
|
|
|
19,750
|
(9)
|
|
|
435,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,866
|
(8)
|
|
|
394,124
|
|
|
|
11,403
|
(10)
|
|
|
251,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,520
|
|
|
|
1,680
|
(4)
|
|
|
11.00
|
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,667
|
|
|
|
8,333
|
(5)
|
|
|
10.54
|
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,455
|
|
|
|
4,020
|
(6)
|
|
|
12.63
|
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David D. Houdshell
|
|
|
300
|
|
|
|
12,925
|
(7)
|
|
|
14.82
|
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,829
|
(8)
|
|
|
393,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,950
|
(9)
|
|
|
285,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,140
|
(10)
|
|
|
135,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
993
|
(3)
|
|
|
—
|
|
|
|
111.10
|
|
|
|
04/02/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,440
|
|
|
|
960
|
(4)
|
|
|
11.00
|
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,667
|
|
|
|
8,333
|
(5)
|
|
|
10.54
|
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles M. Shaffer
|
|
|
3,060
|
|
|
|
5,040
|
(6)
|
|
|
12.63
|
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
481
|
|
|
|
20,774
|
(7)
|
|
|
14.82
|
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,333
|
(8)
|
|
|
360,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,200
|
(9)
|
|
|
357,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,868
|
(10)
|
|
|
217,688
|
|
|
(1)
|
During
the vesting period, the named executive officer has full voting and dividend rights with
respect to the restricted stock, but does not have dividend rights with respect to the
units until the performance criteria has been met.
|
|
(2)
|
For the purposes
of this table, the market value is determined using the closing price of the Company’s
common stock on December 31, 2016 ($22.06).
|
|
(3)
|
Represents fully-vested stock-settled
stock appreciation rights granted to the named executive officer on April 2, 2007.
|
|
(4)
|
Represents option to purchase common stock, of which one-half of
the unexercisable shares covered by this award will vest on June 28, 2017, and the remaining
unexercisable shares will, as long as named executive officer remains employed by the
Company, vest on June 28, 2018.
|
|
(5)
|
Represents option to purchase common
stock, of which the remaining shares will, as long as named executive officer remains
employed by the Company, vest on April 29, 2017.
|
|
(6)
|
Represents option to purchase common stock; the shares covered
by this award began vesting in 1/48th share increments on August 1, 2015, and the remaining
shares will, as long as named executive officer remains employed by the Company, vest
in 1/48th increments each month thereafter.
|
|
(7)
|
Represents option to purchase common stock; the shares covered
by this award began vesting in 1/48th share increments on December 1, 2016, and the remaining
shares will, as long as named executive officer remains employed by the Company, vest
in 1/48th increments each month thereafter.
|
|
(8)
|
Restricted stock
units granted on June 28, 2013 and August 1, 2014 which were subject to performance requirements
over a period ending December 31, 2015. The performance requirements were met and one-half
of the indicated shares vest each year on December 31, 2017 and December 31, 2018.
|
|
(9)
|
Represents performance-vesting
restricted stock units granted on January 29, 2015, representing the named executive
officer’s right to earn, on a one-for-one basis, shares of common stock, subject
to performance requirements over a period ending December 31, 2018.
|
|
(10)
|
Represents performance-vesting restricted stock units granted
on February 29, 2016, representing the named executive officer’s right to earn,
on a one-for-one basis, shares of common stock, subject to performance requirements over
a period ending December 31, 2019. The awards are more fully described above under “2016
Equity Awards–Performance Share Unit (“PSU”) Awards”.
|
|
(11)
|
Represents time-vested restricted
stock award of common stock granted to Mr. Fowle on May 12, 2015, of which 16,856 shares
covered by this award vested on March 15, 2017, and the remaining 17,367 shares vested
on March 31, 2017 pursuant to the Transition Agreement between Mr. Fowle and the Company
described above.
|
|
(12)
|
Represents
time-vested restricted stock award of common stock granted to Mr. Cross on April 1, 2013.
One-half of the outstanding shares vested on April 1, 2017, and the remaining shares
will, as long as Mr. Cross remains employed by the Company, vest on April 1, 2018.
|
2016
OPTION EXERCISES AND STOCK VESTED
The following table reports the exercise of stock
options, and vesting of stock awards or similar instruments during 2015, granted to the named executive officers and the value
of the gains realized on vesting. No stock options were exercised in 2016.
|
|
Stock Awards
|
|
Name
|
|
Number of Shares Acquired
on Vesting (#)
|
|
|
Value Realized
on Vesting
($)
|
|
|
|
|
|
|
|
|
Dennis S. Hudson, III
|
|
|
41,261
|
|
|
$
|
793,195
|
|
|
|
|
|
|
|
|
|
|
Stephen A. Fowle
|
|
|
16,885
|
|
|
$
|
254,964
|
|
|
|
|
|
|
|
|
|
|
Charles K. Cross, Jr.
|
|
|
9,420
|
|
|
$
|
204,843
|
|
|
|
|
|
|
|
|
|
|
David D. Houdeshell
|
|
|
14,477
|
|
|
$
|
286,591
|
|
|
|
|
|
|
|
|
|
|
Charles M. Shaffer
|
|
|
10,286
|
|
|
$
|
214,422
|
|
|
|
|
|
|
|
|
|
|
2016
NONQUALIFIED DEFERRED COMPENSATION
The following table discloses, for each of the
named executive officers, contributions, earnings and balances during 2016 under the Executive Deferred Compensation Plan, described
below.
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
contributions
|
|
|
Contributions
|
|
|
Earnings in
|
|
|
Withdrawals/
|
|
|
Balance at
|
|
|
|
in Last Fiscal
|
|
|
in Last Fiscal
|
|
|
Last Fiscal
|
|
|
Distributions
|
|
|
Last Fiscal
|
|
Name
|
|
Year ($)
|
|
|
Year
($)
(1)
|
|
|
Year
($)
(2)
|
|
|
($)
|
|
|
Year End ($)
|
|
Dennis. S. Hudson, III
|
|
|
5,590
|
|
|
|
8,433
|
|
|
|
109,180
|
|
|
|
—
|
|
|
|
840,570
|
(3)
|
Stephen
A. Fowle
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Charles
K. Cross, Jr.
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
David
D. Houdeshell
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Charles M. Shaffer
|
|
|
5,930
|
|
|
|
1,750
|
|
|
|
744
|
|
|
|
—
|
|
|
|
10,997
|
|
|
(1)
|
Total
amount included in the All Other Compensation column of the Summary Compensation Table.
This amount was contributable in 2016, but was credited to the account of the named executive
officer in 2017.
|
|
(2)
|
None of the earnings or dividends paid
under the Executive Deferred Compensation Plan are above-market or preferential.
|
|
(3)
|
Includes $252,296 contributed by the
Company, as well as executive contributions, which were included in the Summary Compensation
Table for previous years.
|
|
(4)
|
Messrs. Fowle, Cross, and Houdeshell
were not participants in the Executive Deferred Compensation Plan in 2016.
|
Executive
Deferred Compensation Plan
The Bank’s Executive Deferred Compensation
Plan is designed to permit a select group of management and highly compensated employees, including two of the current named executive
officers (Messrs. Hudson and Shaffer), to elect to defer a portion of their compensation until their separation from service with
the Company, and to receive matching and other Company contributions that are precluded under the Company’s Retirement Savings
Plan as a result of limitations imposed under ERISA.
The Executive Deferred Compensation Plan was amended
and restated in 2007 to reflect changes arising from requirements under Code Section 409A and the underlying final regulations.
As a result, each participant account is separated into sub-accounts to reflect:
|
·
|
contributions and investment gains or losses that were
earned and vested on or before December 31, 2004, and any subsequent investment gains
or losses thereon (the “Grandfathered Benefits”); and
|
|
·
|
contributions and earnings
that were earned and vested after December 31, 2004 (the “Non-Grandfathered Benefits”).
|
A participant’s elective deferrals to
the Executive Deferred Compensation Plan are immediately vested. The Company contributions to the Executive Deferred Compensation
Plan vest at the rate of 25 percent for each year of service the participant has accrued under the Retirement Savings Plan, with
full vesting after four years of service. If a participant would become immediately vested in his Company contributions under
the Retirement Savings Plan for any reason (such as death, disability, or retirement on or after age 55), then he would also become
immediately vested in his account balance held in the Executive Deferred Compensation Plan.
Each participant directs how his account in the
Executive Deferred Compensation Plan is invested among the available investment vehicle options. The plan’s investment options
are reviewed and selected annually by a committee appointed by the Board of Directors of the Company to administer the plan. The
plan committee may appoint other persons or entities to assist it in its functions. No earnings or dividends paid under the Executive
Deferred Compensation Plan are above-market or preferential.
All
amounts paid under the plan are paid in cash from the general assets of the Company, either directly by the Company or via a “rabbi
trust” the Company has established in connection with the plan. Nothing contained in the plan creates a trust or fiduciary
relationship of any kind between the Company and a participant, beneficiary or other person having a claim to payments under the
plan. A participant or beneficiary does not have an interest in his plan account that is greater than that of an unsecured creditor.
Upon a participant’s separation from service
with the Company, he will receive the balance of his account in cash in one of the following three forms specified by the participant
at the time of initial deferral election, or a subsequent permitted amendment:
|
·
|
monthly installments over
a period not to exceed five years; or
|
|
·
|
a combination of an initial
lump sum of a specified dollar amount and the remainder in monthly installments over
a period not to exceed five (5) years.
|
A participant may change his
existing distribution election relating to Non-Grandfathered Benefits only in very limited circumstances. Upon death of the participant,
any balance in his account will be paid in a lump sum to his designated beneficiary or to his estate.
2016
OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS
The following table quantifies, for each
of the named executive officers, the potential post-employment payments under the provisions and agreements described above under
“Employment and Change in Control Agreements,” assuming that the triggering event occurred on December 31, 2016. The
closing market price of the Company’s common stock on that date was $22.06 per share. None of the named executive officers
would be eligible for any of these payments if they were terminated for cause.
|
|
Term (in
|
|
|
|
|
|
Value of Other Annual
|
|
|
Total Value of Outstanding Stock
|
|
|
In-the-Money Value of Outstanding Stock
Option
|
|
|
Total Value of
|
|
Name
|
|
years) (#)
|
|
|
Cash Severance
($)
|
|
|
Benefits
($)
|
|
|
Awards that
Immediately Vest ($)
|
|
|
Awards or
SARs that Immediately Vest ($)
|
|
|
Benefit
($)
|
|
Dennis S. Hudson, III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon Termination
without Cause or with Resignation for Good Reason
(1)
|
|
|
2
|
(2)
|
|
|
1,300,000
|
|
|
|
4,240
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,304,240
|
|
Upon Death or Disability
(1)
|
|
|
2
|
(2)
|
|
|
1,100,000
|
|
|
|
4,240
|
|
|
|
2,269,070
|
(3)
|
|
|
751,817
|
(3)
|
|
|
4,125,127
|
|
Upon Termination Following
a Change-in-Control
(1)
|
|
|
3
|
|
|
|
1,950,000
|
|
|
|
6,360
|
|
|
|
2,269,070
|
(3)
|
|
|
751,817
|
(3)
|
|
|
4,977,247
|
|
Upon Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,269,070
|
(3)
|
|
|
751,817
|
(3)
|
|
|
3,020,887
|
|
Upon Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
943,881
|
(3)
|
|
|
277,830
|
(3)
|
|
|
1,221,711
|
|
Stephen A. Fowle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon Termination without
Cause or with Resignation
(4)
|
|
|
—
|
|
|
|
397,000
|
|
|
|
2,120
|
|
|
|
754,959
|
|
|
|
100,383
|
|
|
|
1,254,462
|
|
Upon Death or Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
900,070
|
(3)
|
|
|
100,383
|
(3)
|
|
|
1,000,453
|
|
Upon Termination Following
a Change-in-Control
(5)
|
|
|
1
|
|
|
|
630,000
|
|
|
|
2,120
|
|
|
|
900,070
|
|
|
|
100,383
|
|
|
|
1,632,573
|
|
Upon Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
900,070
|
(3)
|
|
|
100,383
|
(3)
|
|
|
1,000,453
|
|
Upon Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
754,959
|
(3)
|
|
|
—
|
(3)
|
|
|
754,959
|
|
Charles K. Cross Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon Death or Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,102,956
|
(3)
|
|
|
338,491
|
(3)
|
|
|
1,441,447
|
|
Upon Termination Following
a Change-in-Control
(6)
|
|
|
2
|
|
|
|
805,000
|
|
|
|
3,038
|
|
|
|
1,102,956
|
|
|
|
338,491
|
|
|
|
2,249,485
|
|
Upon Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,102,956
|
(3)
|
|
|
338,491
|
(3)
|
|
|
1,441,447
|
|
Upon Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
415,722
|
(3)
|
|
|
106,614
|
(3)
|
|
|
522,336
|
|
David D. Houdshell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon Death or Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
814,433
|
(3)
|
|
|
246,063
|
(3)
|
|
|
1,060,496
|
|
Upon Termination Following
a Change-in-Control
(6)
|
|
|
1
|
|
|
|
338,333
|
|
|
|
1,991
|
|
|
|
814,433
|
|
|
|
246,063
|
|
|
|
1,400,820
|
|
Upon Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
814,433
|
(3)
|
|
|
246,063
|
(3)
|
|
|
1,060,496
|
|
Upon Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
393,308
|
(3)
|
|
|
114,577
|
(3)
|
|
|
507,885
|
|
Charles M. Shaffer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon Death or Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
935,476
|
(3)
|
|
|
304,545
|
(3)
|
|
|
1,240,021
|
|
Upon Termination Following
a Change-in-Control
(6)
|
|
|
2
|
|
|
|
658,100
|
|
|
|
2,958
|
|
|
|
935,476
|
|
|
|
304,545
|
|
|
|
1,901,079
|
|
Upon Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
935,476
|
(3)
|
|
|
304,545
|
(3)
|
|
|
1,240,021
|
|
Upon Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
360,416
|
(3)
|
|
|
106,614
|
(3)
|
|
|
467,030
|
|
|
(1)
|
As
provided for in Mr. Hudson’s employment agreement, the Bank would continue to pay
to Mr. Hudson or his estate or beneficiaries his annual base salary, including any other
cash compensation to which he would be entitled at termination date, for the period indicated
under Term. In addition, the Bank would continue to pay the insurance premium for Mr.
Hudson, his spouse and eligible dependents for continued participation in any group medical,
dental, vision and/or prescription drug plan benefits (including any excess COBRA cost
of coverage) for the term indicated or until his earlier death. In the case of termination
without cause or resignation for good reason, Mr. Hudson’s severance for the Term
also would include an amount equal to his highest annual bonus for the previous three
full fiscal years. In the case of termination without cause or resignation for good reason
within twelve months following a change in control, severance payments would be made
in a lump sum.
|
|
(2)
|
The initial term of agreement is three
years, but benefits under the agreement are paid for the Term as indicated in the table.
|
|
(3)
|
As provided for in the award document. Starting with awards granted
in January 2015, there is no vesting of equity in a change in control if the award is
assumed by the surviving entity or otherwise equitably converted or substituted.
|
|
(4)
|
As provided for in the Transition Agreement with Mr. Fowle described
above, which became effective on February 10, 2017. Mr. Fowle’s last day with the
Company was March 31, 2017, terminating the payments which would be made under the Change
in Control Agreement and triggering payment as provided under the Transition Agreement.
|
|
(5)
|
As provided for change in control agreement,
the Company shall pay the executive officer in a lump sum in cash within thirty (30)
days after the date of termination the aggregate of the: (i) base salary through the
termination date to the extent not paid (assumed already paid in table above), (ii) annual
bonus (prorated in the event that the executive was not employed by the Company for the
whole of such fiscal year), and (iii) annual base salary and annual bonus, multiplied
by the Term as indicated in the table. Annual base salary is equal to 12 times the highest
monthly base salary paid or payable, including any base salary which has been earned
but deferred, to the executive officer by the Company in the 12-month period immediately
preceding the month in which the triggering event occurs. Annual bonus is equal to the
executive officer’s highest annual bonus for the last three full fiscal years prior
to the triggering event. All unvested stock options and restricted stock of the Company
held by the executive officer shall immediately and fully vest on termination. In addition,
the Company will pay or provide to the executive officer or eligible dependents with
similar medical, prescription, dental, and vision insurance plans benefits paid by the
Company prior to the change in control. If the executive officer’s employment is
terminated by reason of death, disability, retirement or for cause within the term indicated
following a change in control, no further payment is owed to the executive except for
accrued obligations, such as earned but unpaid salary and bonus.
|
|
(6)
|
As
provided for in the respective change in control agreement, the Company shall pay the
executive officer in a lump sum in cash within thirty (30) days after the date of termination
the aggregate of the: (i) base salary through the termination date to the extent not
paid (assumed already paid in table above), (ii) annual bonus (prorated in the event
that the
executive was not employed by the Company for
the whole of such fiscal year), and (iii) annual base salary and annual bonus, multiplied
by the Term as indicated in the table. Annual base salary is equal to 12 times the highest
monthly base salary paid or payable, including any base salary which has been earned
but deferred, to the executive officer by the Company in the 12-month period immediately
preceding the month in which the triggering event occurs. Annual bonus is equal to the
executive officer’s average annual bonus for the last three full fiscal years prior
to the triggering event. All unvested stock options and restricted stock of the Company
held by the executive officer shall immediately and fully vest on termination. In addition,
the Company will pay or provide to the executive officer or eligible dependents “Welfare
Benefits”, for a period of 18 months for Messrs. Cross and Shaffer and 1 year for
Mr. Houdeshell. “Welfare Benefits” include similar medical, prescription,
dental, and vision insurance plans benefits paid by the Company prior to the change in
control. If the executive officer’s employment is terminated by reason of death,
disability, retirement or for cause within the term indicated following a change in control,
no further payment is owed to the executive except for accrued obligations, such as earned
but unpaid salary a
nd bonus.
|
PROPOSAL
1
ELECTION
OF DIRECTORS
General
Seacoast views talent as our primary competitive
advantage. Our talent focus starts with our non-employee directors, the individuals appointed to act on behalf of shareholders
by overseeing critical aspects of our business strategy, operations, risk management and governance efforts. Our belief is that
superior talent in the board room will generate exceptional levels of customer service, financial performance and, ultimately,
superior shareholder returns compared to alternative investments. To this end, the Board is committed to identifying the best
available talent to make meaningful contributions to our business and fully execute its duties and responsibilities on behalf
of shareholders. The profile of our Board continues to evolve in response to the needs of a dynamic and growing organization.
Our Board of Directors plays a meaningful role in helping Seacoast develop, test and implement our business, risk management,
talent and reward strategies. The Board’s activities are focused on representing our shareholders in ways that position
Seacoast to create significant value for customers, employees and our shareholders within a risk appropriate framework.
As of the date of this proxy statement, Seacoast’s
Board of Directors consists of fourteen members divided into three classes, serving staggered three year terms as provided in
our Articles of Incorporation.
The Annual Meeting is being held to, among other
things, elect four Class III directors of Seacoast, each of whom has been nominated by the CGC of the Board of Directors. All
of the nominees, except Alvaro J. Monserrat, are presently directors of Seacoast. All of the nominees also serve as members of
the Board of Directors of Seacoast National Bank (the “Bank”). The members of the Boards of Directors of the Bank
and the Company are the same except for Dale M. Hudson and Alvaro J. Monserrat, who are currently directors of the Bank only.
If elected, each Class III director nominee will serve a three year term expiring at the 2020 Annual Meeting and until their successors
have been elected and qualified.
On January 31, 2017, the Board of Directors, following the recommendation
of the CGC, nominated Alvaro J. Monserrat to stand for election at the Annual Meeting, replacing T. Michael Crook who intends
to retire from the Company’s Board as of the Annual Meeting. Mr. Crook will remain on the board of directors of the Bank.
Mr. Monserrat has served as a director of the Bank since January 2017.
Currently, the Board of Directors is classified
as follows:
Class
|
Term
|
Name
of Directors
|
Class
I
|
Term
Expires at the 2018
Annual
Meeting
|
Jacqueline L. Bradley
H. Gilbert
Culbreth, Jr.
Christopher
E. Fogal
Timothy
S. Huval
Herbert A. Lurie
|
Class
II
|
Term
Expires at the 2019
Annual
Meeting
|
Dennis
J. Arczynski
Maryann Goebel
Roger
O. Goldman
Dennis
S. Hudson, Jr.
Thomas E. Rossin
|
Class
III
|
Term
Expires at the 2017
Annual
Meeting
|
Stephen
E. Bohner
T. Michael
Crook*
Julie
H. Daum
Dennis S. Hudson,
III
|
*Will be replaced by Alvaro J. Monserrat, if elected
at the Annual Meeting.
Manner for Voting Proxies
All shares represented by valid proxies, and not
revoked before they are exercised, will be voted in the manner specified therein. If a valid proxy is submitted but no vote is
specified, the proxy will be voted
FOR
the election of each of the four nominees for election as directors. Please note
that banks and brokers that do not receive voting instructions from their clients are not able to vote their client’s shares
in the election of directors. Although all nominees are expected to serve if elected, if any nominee is unable to serve, then
the persons designated as proxies will vote for the remaining nominees and for such replacements, if any, as may be nominated
by the CGC. Proxies cannot be voted for a greater number of persons than the number of nominees specified herein (four persons).
Cumulative voting is not permitted.
The affirmative vote of the holders of shares of
common stock representing a plurality of the votes cast at the Annual Meeting at which a quorum is present is required for the
election of the directors listed below. However, to provide shareholders with a meaningful role in uncontested director elections,
which is the case for the election of the director nominees listed below, our Corporate Governance Guidelines provide that if
any director nominee receives a greater number of votes “withheld” for his or her election than votes “for”
such election, then the director will promptly tender his or her resignation to the Board following certification of the shareholder
vote, with such resignation to be effective upon acceptance by the Board of Directors. The CGC would then review and make a recommendation
to the Board of Directors as to whether the Board should accept the resignation, and the Board would ultimately decide whether
to accept the resignation. The Company will disclose its decision-making process regarding any resignation in a Form 8-K filed
with the SEC. In contested elections, the required vote would be a plurality of votes cast and the resignation policy would not
apply. Further details of this policy and the corresponding procedures are set forth in our Corporate Governance Guidelines, available
on our website at www.SeacoastBanking.com.
The four nominees have been nominated by Seacoast’s
Compensation and Governance Committee, and the Board of Directors unanimously recommends a vote “FOR” the election
of all four nominees listed below.
Nominees for Election at the
Annual Meeting
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Stephen E. Bohner
,
age 64, is a member of
the Enterprise Risk Management Committee, chairman of the Bank’s Directors Credit Risk Committee and has been a
director of Seacoast since 2003.
Mr. Bohner has been president and owner of Premier Realty
Group, a real estate company located in Sewall’s Point, Florida, specializing in the sale of luxury homes, since
1987.
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In addition to his 39 years of experience in real
estate, Mr. Bohner is actively involved in several professional and community organizations, having served as president of the
Greater Martin County Association of Realtors and The Pine School. He was awarded the Realtor Association’s Distinguished
Service Award in 2001, and has served on numerous professional standards’ panels in arbitration hearings and chaired the
Realtors Association’s grievance committee. Mr. Bohner is a graduate of Vanderbilt University with dual degrees in Business
and Economics.
In making the determination that Mr. Bohner should
be a nominee for director of Seacoast, the CGC considered these qualifications and his qualification as an independent director,
as well as:
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his business leadership and
expertise in real estate, which provides the Board of Directors with valuable insight
related to local real estate markets in which the Bank’s customers are located
and helps the Board make critical judgments regarding the Bank’s lending activities
since such judgments rely upon the proper valuation of real estate;
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his business leadership and
entrepreneurial and management skills developed over the past 39 years;
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his stature in the local community
garnered from his years of professional and community involvement; and
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his experience with the Company.
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Julie H. Daum
,
age 62, is a member of the
Compensation and Governance Committee and has been a director of Seacoast since 2013.
Ms. Daum has been a senior director of Spencer Stuart,
a privately-held global executive search firm, since 1993. As co-head of the North American Board and CEO Practice at
Spencer Stuart, she has helped place over 1,000 directors on corporate boards, including the boards of Coach, Delta Air
Lines, American Express, CVS Caremark, General Motors and Amazon.
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Prior to her work at Spencer Stuart, Ms. Daum was
the executive director of the corporate board resource at Catalyst, where she managed all board of directors’ activities
and worked with companies to identify qualified women for their boards. A widely renowned expert on corporate governance topics,
Ms. Daum was recognized by the National Association of Corporate Directors (“NACD”) as one of the top 100 most influential
leaders in corporate governance in 2013. Ms. Daum also advises corporate boards on succession planning for themselves and their
CEOs, as well as best practices and governance issues. Each year, Ms. Daum develops the Spencer Stuart Board Index, a publication
detailing trends at national boardrooms. She also co-founded and developed a program for board members entitled “Fresh Insights
and Best Practices for Directors” at the Wharton School of the University of Pennsylvania, where she earned her MBA.
In making the determination that Ms. Daum should
be a nominee for director of Seacoast, the CGC considered these qualifications and her qualification as an independent director,
as well as:
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her expertise in recruiting, human resources and corporate
governance, which provides valuable insights to help the Board make key decisions on
director talent and governance matters;
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her associations in the Florida market and her understanding
of public, private and not-for-profit boards which is useful for the Board’s consideration
of alternative practices;
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her stature in the corporate governance community garnered
from her years of professional involvement; and
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her ability to serve as a mentor and catalyst to bring
more women into senior leadership positions with the Company.
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Dennis S. Hudson, III
,
age 61, serves as Chairman of the Board
and has been a director of Seacoast since 1984.
Mr. Hudson was named Chairman of Seacoast
in July 2005, and has served as Chief Executive Officer of the Company since June 1998. Mr. Hudson has also served as
Chairman and Chief Executive Officer of the Bank since 1992. He was President of Seacoast from June 1998 to July 2005,
after serving in various positions with the Company and the Bank since 1978.
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Mr. Hudson also serves on the board of directors,
the audit committee and the compensation committee of Chesapeake Utilities Corporation (ticker: CPK), a public gas and electric
utilities company headquartered in Dover, Delaware. Prior to that time, he served as a member of the board of directors of FPU.
In November 2015, Mr. Hudson was appointed as an independent director to PENN Capital Funds, a mutual fund group managed by PENN
Capital Management. From 2005 through 2010, he also served as a member of the board of directors of the Miami Branch of the Federal
Reserve Bank of Atlanta.
Mr. Hudson is actively involved in the community,
having served on the boards of the Martin County YMCA Foundation, Council on Aging, The Pine School, the Job Training Center,
American Heart Association, Martin County United Way, the Historical Society of Martin County and as chairman of the board of
the Economic Council of Martin County, on which he still serves. He has been recognized for his achievements with several awards
including the Florida Senate Medallion of Excellence Award presented by Florida Senator Ken Pruitt in 2001. Mr. Hudson is a graduate
of Florida State University with a Bachelor’s degree in Finance, and a Master’s degree in Business Administration.
In making the determination that Mr. Hudson should
be a nominee for director of Seacoast, the CGC considered these qualifications, as well as:
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his significant experience in the financial services industry
and the organization, including his service as Chairman and Chief Executive Officer of
the Company, which provides a unique understanding of our operations;
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his knowledge and relationships with the institutional
investor community, including the Company’s past and present institutional investors;
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his service on other public company boards, which provides
insight regarding general public company operations, policies, internal controls and
corporate governance, which is useful and applicable to Seacoast; and
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his stature in the local community, including through
service on the boards of the non-profit organizations discussed above.
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Alvaro J. Monserrat
,
age 48, was elected
as a director of the Bank in January 2017 and is a member of the Strategy and Innovation Committee.
Mr. Monserrat became CEO of RES Software, a leading digital
workspace technology company in April 2015, after serving as Citrix Systems’ senior vice president of worldwide
sales & service from July 2008 to 2015. Mr. Monserrat’s career spans more than 25 years in large companies and
entrepreneurial ventures within enterprise software, mobility, cloud, networking and business strategy.
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At Citrix, Monserrat was part
of the executive leadership team that grew the company from hundreds of millions to more than $3 billion in revenue by 2014, and
was instrumental in crafting the strategy that helped Citrix grow from a single-product company to a multi-product industry leader.
Prior to joining Citrix, Mr. Monserrat was a principal in Innovex Group (acquired by Citrix) and received numerous awards including
Microsoft’s Best E-Commerce Solution and Best Small Business Solution Awards. In addition, Mr. Monserrat has served on the
board of advisors for Virsto and Whiptail (2010 to 2013), the national partner board of the Leukemia and Lymphoma Society (2008-2009)
and on the board of the Children’s Harbor Society. Mr. Monserrat holds a Masters of Business Administration degree from
the University of Texas at Austin and a Bachelor of Science degree in Computer Science from the University of Miami.
In making the determination that Mr. Monserrat
should be a nominee for director of Seacoast, the CGC considered these qualifications and his qualification as an independent
director, as well as:
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his entrepreneurial vision, innovation and resourcefulness
in taking an initiative from concept to a successful money-making enterprise, which is
applicable to our changing business model;
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his abilities as a change leader in transforming and infusing
existing business models with multi-directional and diversified routes to market, delivering
rapid growth, which provides insights for our effective management of Seacoast’s
growth and transformation;
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his experience and acumen in building, restructuring and
motivating teams to produce high-performing units; and
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his global view of markets and competitors combined with
his knowledge of technology and go-to-market execution which provides constructive oversight
in these areas.
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Directors Whose Terms Extend
Beyond the Annual Meeting
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Dennis J. Arczynski
,
age 65, is the chairman
of the Enterprise
Risk Management Committee, is a member of the Audit Committee and the Strategy and Innovation
Committee, and has been a director of the Company since 2013 and a director of the Bank since 2007.
Mr. Arczynski has been a risk management, corporate governance,
regulatory affairs and banking consultant since 2007. He previously served for 33 years in various managerial and examiner
positions in the U.S. Office of the Comptroller of the Currency’s (the “OCC”) headquarters in Washington,
D.C. and in several other OCC districts until 2007.
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As a National Bank Examiner with the OCC, Mr. Arczynski
was responsible for the supervision and examination of the largest and most complex mid-size banks, community banks and trust
companies; provided guidance to banks in all facets of commercial banking and fiduciary operations including international activities;
performed risk assessment and conducted BSA/AML reviews and examinations of internationally active banks; and developed formal
enforcement actions and corrective action plans for struggling and deficient institutions. Mr. Arczynski’s other positions
of responsibility with the OCC were Assistant Director for Trust Operations, Special Assistant to the Senior Deputy Comptroller
(FFIEC Liaison), Associate Director for Financial Management (Financial Systems and Review) and Field Office Manager (Miami Field
Office). His duties included the formation of national policies and programs, development of OCC supervisory initiatives, establishment
of interagency relations, drafting regulations and writing OCC examiner handbooks. Mr. Arczynski received his Bachelor’s
degree from University of Maryland in Finance and his Master’s degree from Johns Hopkins University.
In making the determination that Mr. Arczynski
should remain a director of Seacoast, the CGC considered these qualifications and his qualification as an independent director,
as well as:
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his knowledge of the most effective management practices
of the largest and most complex mid-size banks;
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his expertise in all facets of commercial banking and
fiduciary operations, including risk assessment and BSA/AML;
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his risk management, corporate governance, and regulatory
background specific to the financial services industry; and
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his public service which provides the Board of Directors
with an alternative perspective in the areas of government relations and regulatory matters
that impact the Company.
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Jacqueline L. Bradley
,
age 59, is chairman
of the Bank’s Trust
Committee, is a member of the Strategy and Innovation Committee, has been a director
of the Company since May 2015 and a director of the Bank since October 2014.
Ms. Bradley served as a director of BankFIRST from April
2005 until BANKshares was acquired by Seacoast on October 1, 2014. During her tenure at BankFIRST, she served on BankFIRST’s
Special Assets Committee and Audit Committee. Ms. Bradley has served on the Orange County Tourist Development Council
since 2010.
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Ms. Bradley served on the finance committee for
the Central Florida Expressway Authority from 2012 to 2013 and on the board of directors of the Greater Orlando Aviation Authority
from 2000 to 2009. She is also a member of the board of directors of the Boys & Girls Club of Central Florida (since 1998),
serving as chairperson in 2002 and 2003, and a member of the boards of the Studio Museum in Harlem (since 2006) and The Lawrenceville
School in Lawrenceville, New Jersey (since 2008). Ms. Bradley provides support to charities throughout the Central Florida community,
and has served on the boards of the Florida Arts Council (2003-2008) and the Cornell Museum of Fine Arts. Ms. Bradley has had
a 20 year career in financial services, including seven years with SunTrust Bank in Central Florida, culminating in her last position
as senior vice president leading its Private Client Group (1999-2002). Her previous experience also includes eight years as vice
president with Moody’s Investors Services and 3 years providing consulting services for McKinsey Management Consultants
and Touché Ross. Ms. Bradley received her Bachelor of Arts degree in Economics and Political Science from Yale College,
and her Master’s degree in Business Administration from Columbia University Graduate School of Business with a concentration
in Finance and Marketing.
Ms. Bradley’s appointment to the Board of
Directors is pursuant to the Merger Agreement under which BANKshares merged with and into Seacoast. Pursuant to the Merger Agreement,
Seacoast was required to appoint one former BANKshares’ director to our Board of Directors.
In making the determination that Ms. Bradley should
remain a director of Seacoast, the CGC considered these qualifications and her qualification as an independent director, as well
as:
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her diversity of management experience in the financial
services industry;
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her knowledge of, and stature and philanthropic service
to, the Central Florida market, which is valuable in understanding the customer segments
in this market; and
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her ability to provide guidance to the Board of Directors
regarding accounting and financial matters.
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H. Gilbert Culbreth, Jr.
,
age 71, is chairman
of the Company’s Compensation and Governance Committee and has been a director of Seacoast since 2008.
Mr. Culbreth has been chief executive officer and owner
of Gilbert Chevrolet Company, Inc., a car dealership located in Okeechobee, Florida, for over 40 years. He also owns and
manages Gilbert Ford, another car dealership in Okeechobee, Florida. Mr. Culbreth was previously a member of Big Lake
Financial Corporation’s (“Big Lake”) board of directors for 10 years prior to the acquisition of Big
Lake by Seacoast in April 2006, and has served on the Bank’s board of directors since the acquisition.
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In addition, Mr. Culbreth is president of several
other family businesses, including: Culbreth Realty, Inc. (a real estate brokerage company), Parrott Investments, Inc. (a holding
company for two other businesses), Gilbert Cattle Co., LLC (a cattle operation), Grace Marine (a watercraft sales company), Gilbert
Aviation Inc. (an aircraft sales and service company), Gilbert Oil Company, LLC and Gilbert Trucking, Inc. Mr. Culbreth is a former
director of the Florida Council on Economic Education, the Okeechobee County Board of Realtors, the Okeechobee Economic Council,
and the United Way of Okeechobee and is a member of the Masonic Lodge.
In making the determination that Mr. Culbreth should
remain a director of Seacoast, the CGC considered these qualifications and his qualification as an independent director, as well
as:
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his diversity of business experience for more than 40
years in the Okeechobee, Florida market, which is valuable in understanding the customer
segments in this market;
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his entrepreneurial and management skills;
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his stature in and knowledge of the local community; and
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his experience with the Company.
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Christopher E. Fogal
,
age 65, is chairman
of the Company’s Audit Committee and has been a director of Seacoast since 1997.
Mr. Fogal is a certified public accountant
and a partner with the public accounting firm of Carr, Riggs & Ingram, LLC (“Carr Riggs”), a top 25 firm
that is the second largest super-regional in the southeastern U.S. He was previously a principal with the public accounting
firm of Proctor, Crook, Crowder & Fogal, P.A. (“Proctor Crook”), a BDO affiliate firm, located in Stuart,
Florida, from 2009 to January 31, 2017 when the firm merged with Carr Riggs.
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Mr. Fogal was the managing partner of Fogal &
Associates from 1979 until the firm merged with Proctor Crook in 2009. He also served on the board of directors of Port St. Lucie
National Bank until it was acquired by Seacoast in 1996. Currently, Mr. Fogal is treasurer of the St. Lucie County Economic Development
Council. He has also served as past chairman of the Treasure Coast Private Industry Council and past president of the St. Lucie
County Chamber of Commerce, and is active in a number of professional organizations including the American Institute of Certified
Public Accountants and the Florida Institute of Certified Public Accountants.
In making the determination that Mr. Fogal should
remain a director of Seacoast, the CGC considered these qualifications and his qualification as an independent director, as well
as:
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his accounting expertise as a Certified Public Accountant
(“CPA”) for over 40 years, including audits of public companies regulated
by the SEC, which provides the Board of Directors with guidance related to internal controls
and financial and accounting matters;
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his business, management and decision-making skills, including
his experience as managing partner of an accounting firm for 30+ years;
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his stature and knowledge of the local community; and
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his experience with the Company.
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Maryann Goebel
,
age 66, is a member of the
Company’s Audit Committee, Compensation and Governance Committee, and Enterprise Risk Management Committee, and
has been a director of Seacoast since February 2014.
Ms. Goebel has been an independent IT management consultant
since 2012. She was executive vice president and chief information officer of Fiserv, Inc. (NASDAQ: FISV) from 2009 to
July 2012. In this role, she was responsible for all internal Fiserv IT systems (infrastructure and applications), as
well as IT infrastructure, operations, engineering and middleware services for Fiserv clients who chose to outsource the
processing of their Fiserv applications.
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In her 40+ year career, Ms. Goebel has shaped the
strategic direction of information technology for major corporations around the world, serving in the critical role of chief information
officer for: DHL Express from 2006 to 2009; General Motors North America from 2003 to 2006; General Motors Europe from 1999 to
2001; General Motors Truck Group from 1997 to 1999; Bell Atlantic NYNEX Mobile (now Verizon Mobile) from 1995 to 1997; and Frito-Lay
from 2001 to 2002. She has also held senior IT leadership positions at Texas Instruments, Inc., Aérospatiale Helicopter
Corporation, and the Southland Corporation, among others. Ms. Goebel received the “100 Leading Women in the North American
Auto Industry” award in 2005. She also received an award for outstanding professional achievement from her alma mater, Worcester
Polytechnic Institute, where she earned a Bachelor of Science degree in mathematics and currently serves on their Arts and Sciences
Advisory Board.
In making the determination that Ms. Goebel should
remain a director of Seacoast, the CGC considered these qualifications and her qualification as an independent director, as well
as:
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her knowledge of complex information technology environments
and focus on innovation;
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her expertise in strategizing and implementing best-practice
processes, tools and structure that are essential to supporting a superior customer experience;
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her extensive experience in aligning IT objectives with
corporate priorities; and
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her leadership and ability to help transform Seacoast
into an organization that uses technology to deliver state-of-the-art customer services.
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Roger
O. Goldman
,
age 72, has been the Board’s Lead
Independent Director since November
2012 and a director of Seacoast since February 2012.
Mr. Goldman was appointed
Chairman of American Express Bank FSB, a federally chartered savings bank located in Salt Lake City, Utah (“AEBFSB”)
in September 2016. Prior to this, he was Lead Independent Director since January 2015 and chairman of AEBFSB’s Audit
and Risk Committee since September 2005. Mr. Goldman has been a director of AEBFSB since 2005, and presently serves on
its Compliance Committee, Audit & Risk Committee and Executive Committee.
In addition, Mr. Goldman
is President and managing partner of Berkshire Opportunity Fund, which he founded in 2008 to provide financing and mentoring
for small businesses in the Northeast. From 2009 to 2010, Mr. Goldman served as temporary volunteer CEO for 1Berkshire
to create a powerful economic development engine for the Berkshires by integrating the work of four primary economic development
agencies and raising larger and more sustainable funding. From 1997 to 2000, Mr. Goldman was president and chief executive
officer of Global Sourcing Services, LLC, a start-up venture specializing in outsourced marketing services and account
acquisition and customer retention programs, which he grew to a substantial size before it was sold.
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Mr. Goldman’s extensive banking experience
also includes management positions at Citicorp from 1969 to 1983; service as president and chief executive officer of Redwood
Bank, a community bank in San Francisco, California, from 1983 to 1986; executive vice president and senior operating officer
of Coreast Savings Bank from 1989 to 1991; and executive vice president in charge of the community banking group of NatWest Bancorp
(with $31 billion in assets) from 1991 to 1996 where he was responsible for managing all consumer and small business activities.
In addition, he previously served on the boards of several public and private corporations, including Minyanville (a new media
company), Cyota (an Internet security company), and American Express Centurion Bank, where he also served as a member of the audit
committee. He is Chairman Emeritus of the Lighthouse International, a charitable foundation for the visually impaired which is
headquartered in New York, and is the former Chairman of the Juvenile Diabetes Research Foundation. Mr. Goldman received his Bachelor’s
degree from New York University in Marketing and his Juris Doctorate from the Washington College of Law at American University.
He is an emeritus member of the New Jersey bar and former member of the Washington D.C. bar.
In making the determination that Mr. Goldman should
remain a director of Seacoast, the CGC considered these qualifications and his qualification as an independent director, as well
as:
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his diversity of leadership experience in the financial
services industry, particularly with respect to his retail banking and consumer and small
business lending background;
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his marketing and risk management expertise;
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his legal background and knowledge of corporate governance
matters;
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his considerable insights and perspectives garnered from
years of service on public, private and not-for-profit boards; and
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the improved performance and effectiveness of the Board
under his leadership as Lead Independent Director.
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Dennis S. Hudson, Jr.
,
age 89, is a member
of the Enterprise Risk Management Committee and has been a director of Seacoast since 1983.
Mr. Hudson retired in June 1998 after a 48-year career
with the Company and Bank. He served as Chairman of the Board of Seacoast from 1990 to June 1998. Prior thereto, he served
as Chief Executive Officer of Seacoast from 1983 until 1992, President of Seacoast from 1983 until 1990 and Chairman of
the Bank from 1969 until 1992.
Mr. Hudson also served on the board of the Miami Branch
of the Federal Reserve Bank of Atlanta from 1983 to 1985. Active in the community and with charitable organizations, he
has served as chairman of the American Red Cross of Martin County, president of the Stuart Rotary, and as a director of
Hospice of Martin County.
In making the determination that Mr. Hudson should remain
a director of Seacoast, the CGC considered these qualifications, as well as:
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his significant experience in the financial services industry
and the organization, including his prior service as Chief Executive Officer of the Company,
which provides a unique understanding of our operations;
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his tenure as director that spans a full range of banking
and economic cycles affecting the Company; and
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his stature in the local community, including the leadership
positions with the community organizations discussed above.
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Timothy Huval
,
age 50, is a member of the
Strategy & Innovation Committee and has been a director of Seacoast since July 2016.
Mr. Huval is the Chief Human Resources Officer of Humana
Inc., a leading health and well-being company, where he is responsible for all aspects of human resources and business
services. He also serves as a member of the management team that is bringing about a cultural transformation at Humana
focused on integrating its core values enterprise-wide.
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Prior to joining Humana in January 2013, Mr. Huval
served in multiple senior-level roles at Bank of America (BOA). Handpicked to solve critical business challenges at BOA, his roles
included consumer service and operations executive (2011-2012), home loan servicing executive (2010-2011), chief operations officer
and Delaware market president (2007-2010), human resources executive (2006-2007) and chief information officer for Global Wealth
& Investment Management. He also served as chair of BOA’s Consumer Banking, Business Banking and Enterprise Client Coverage
Diversity & Inclusion Business Council. Mr. Huval has also been involved with various non-profit and community boards, including
Family and Children’s Place in Louisville, Delaware United Way, Peninsula Alliance for Economic Development, and Youth Homes,
Charlotte, NC. Mr. Huval earned a Master’s degree in public administration from Brigham Young University, a Bachelor’s
degree in marketing from Weber State and an associate degree in business management from Salt Lake Community College. He was also
awarded an honorary doctorate in Humane Letters from Salt Lake Community College.
In making the determination that Mr. Huval should
remain a director of Seacoast, the CGC considered these qualifications and his qualification as an independent director, as well
as:
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his diverse background in human resources, information
technology, consumer banking, and operational management, which provides a unique and
holistic perspective;
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his experience in cultural transformation and integration
of corporate values deep in the organization and business model, which is applicable
to Seacoast’s rapidly changing business model;
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his understanding of technology as a platform for creating
efficiencies and optimizing resources; and
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his significant experience in the financial services industry.
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Herbert Lurie
,
age 56, is a member of the
Strategy & Innovation Committee and has been a director of Seacoast since April 2016.
Mr. Lurie was Senior Managing Director and Chairman of
the Financial Institutions Group of Guggenheim Securities from June 2011 to April 2016, and is now a senior advisor at
the firm. Previously, he led the Global Financial Institutions Group at Merrill Lynch, which he helped found, and was
a member of Merrill Lynch’s Global Investment Banking Management Committee.
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Mr. Lurie has advised on numerous financial institution
transactions world-wide, including Bank One Corp.’s merger with First Chicago Corp., and NationsBank Corp.’s merger
with BankAmerica Corp. to form Bank of America. He began his Wall Street career as an M&A and securities attorney at Simpson
Thacher & Bartlett LLP. Mr. Lurie also has also served on a number of philanthropic and corporate boards, including as Vice
Chairman of the Board of the United States Equestrian Team, a Trustee of Princeton’s Eden Autism Institute and The Seeing
Eye. Mr. Lurie holds a JD from the University of California at Berkeley, an MA in Clinical Psychology from Columbia University,
and a dual BS in Finance and Economics from the University at Albany.
In making the determination that Mr. Lurie should
remain a director of Seacoast, the CGC considered these qualifications, as well as:
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his expertise and unique insights in evaluating M&A
and other strategic opportunities, which is useful in promoting Seacoast’s balanced
growth strategy;
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his “rainmaking” ability with respect to fostering
strategically beneficial relationships;
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his knowledge and perspective on the interests of various
investor groups, which is insightful in considering the interests of all shareholders;
and
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his extensive experience and stature in the investment
banking community.
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Thomas E. Rossin
,
age 83, is chairman of
the Strategy and Innovation Committee, is a member of the Enterprise Risk Management Committee, and has been a director
of Seacoast since 2004.
Mr. Rossin is a retired attorney in West Palm Beach, Florida,
previously serving as management chairman with the firm of St. John, Rossin & Burr, PLLC from 1993 to 2016. He served
as a Florida State Senator from 1994 to 2002, the last two years as minority leader, and was a candidate for Florida Lt.
Governor in 2002.
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Mr. Rossin founded Flagler National Bank in 1974,
serving as president, chief executive officer and director and growing it to the largest independent bank in Palm Beach County
with over $1 billion in assets. Forming The Flagler Bank Corporation, the holding company for Flagler National Bank, in 1983 and
serving as president, chief executive officer and director, he took it public in 1984 and facilitated the acquisition of three
financial institutions, until both Flagler National Bank and the holding company were sold in 1993 to SunTrust Bank. Prior thereto,
Mr. Rossin was vice chairman and director of First Bancshares of Florida, Inc. after consolidating four banks under one charter,
including First National Bank in Riviera Beach at which he served as president and chief executive officer. He has served as past
president of the Community Bankers Association of Florida and Palm Beach County Bankers Association, and is currently a member
of the Florida Bar Association. In March 2014, Mr. Rossin received the Exemplary Elected Official Award from the Forum Club of
the Palm Beaches.
In making the determination that Mr. Rossin should
remain a director of Seacoast, the CGC considered these qualifications and his qualification as an independent director, as well
as:
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his legal background and, in particular, his knowledge
of legal issues related to financial institutions and underlying corporate governance
matters;
|
|
·
|
his public service which, combined with his legal background,
provides the Board of Directors with knowledge in the areas of government relations and
regulatory matters that impact the Company;
|
|
·
|
his significant experience in the financial services industry;
and
|
|
·
|
his experience with the Company.
|
Decisions regarding our non-employee director compensation
program are approved by our full board of directors based on recommendations from the CGC. In making its recommendations, the
CGC considers the director compensation practices of peer companies and whether such recommendations align with the interests
of our shareholders with respect to total compensation and each element thereof. Our compensation program for non-employee directors
is designed to:
|
·
|
appropriately compensate directors for the work required
at a company of Seacoast’s size, growth, and dynamic and evolving business model;
|
|
·
|
align directors’ interests with the long-term interests
of Seacoast’s shareholders; and
|
|
·
|
make meaningful adjustments every few years, rather than
small annual adjustments.
|
At the direction of the CGC, in January 2017, Grant
Thornton analyzed the competitive position of Seacoast’s average director pay against the Core Bank Peer Group used for
executive compensation purposes (see “Benchmarking and Comparator Group” for information about the peer group), including
how each element of director compensation compares to the group. Grant Thornton’s analysis showed that Seacoast’s
average total compensation for non-employee directors was above the peer group median, but was more heavily weighted in equity
compensation.
Non-Employee Director Compensation
Structure
Annual Retainer paid to All Non-employee Directors of the Company or the Bank:
|
|
|
|
|
|
|
|
|
|
Cash
(1)
|
|
$
|
37,500
|
|
|
|
|
|
|
Stock
Award
(2)
|
|
$
|
37,500
|
|
|
|
|
|
|
Annual Committee Chair Retainer for CGC and Bank Committees
|
|
$
|
10,000
|
|
|
|
|
|
|
Annual Committee Chair Retainer for Audit & ERMC Committees
|
|
$
|
15,000
|
|
|
|
|
|
|
Annual Committee Chair Retainer for S&I Committee
|
|
$
|
25,000
|
|
|
(1)
|
A number of directors have elected to receive all or a portion
of their cash retainer in stock or stock options as described below.
|
|
|
|
|
(2)
|
Granted under the 2013 Incentive Plan following election
or reelection at each annual meeting of shareholders.
|
All
cash retainers are paid in quarterly installments. To further align directors’ interests with long-term shareholder interests,
directors may elect to receive: 1) all or a portion of their annual cash retainer in Company common stock, and 2) up to a maximum
of 30% of their annual cash retainer in the form of non-qualified options to purchase shares of Company common stock (a new element
added in 2016). Retainers are pro-rated for directors who join or leave the Board or have a change in Board role during a quarterly
period.
Non-employee directors are also reimbursed for
their travel, lodging and related expenses incurred in connection with attending Board, committee and shareholders meetings and
other designated Company events. Executive officers who are also directors do not receive any compensation for services provided
as a director.
Lead Independent Director Compensation
& Agreement
The Board appointed Roger Goldman as Lead Independent
Director in November 2012. Mr. Goldman’s compensation reflects the additional time commitment for this role compared to
other non-employee directors, the enhanced credibility with the investment community his affiliation with Seacoast provides the
Company, and the improved performance and effectiveness of the Board under his leadership. His significant role is more fully
described under the section entitled “Board Leadership Structure”.
On March 1, 2014, the Company
entered into a three-year agreement with Lead Independent Director Goldman which automatically renews for successive three-year
terms on the first day of each month following the effective date. Under the agreement, Lead Independent Director Goldman receives
an additional annual retainer of $275,000 for his service as Lead Independent Director, paid in a combination of cash, restricted
stock and other stock-based awards as mutually agreed by the Company and the Lead Independent Director. Upon signing of the agreement,
he also received a stock option to purchase 200,000 shares of Seacoast common stock at an exercise price equal to the fair market
value of the stock on the grant date ($10.78). The stock option vested on a pro rata monthly basis beginning on March 1, 2014
and became fully vested and exercisable on February 28, 2017. In addition, under the agreement, Lead Independent Director Goldman
receives a $20,000 annual housing allowance, is provided with office space in a Company-owned facility, and is reimbursed for
company-related travel expenses, reasonable customer or staff entertainment expenses and extraordinary use of his office staff.
Director Stock Ownership Policy
To align the interests of our directors and shareholders,
our Board of Directors believes that directors should hold a significant financial stake in Seacoast. Consequently, our Corporate
Governance Guidelines require that directors own Seacoast stock equal in value to a minimum of three times their base annual retainer
within four years of joining the Board. Each director must retain 75% of their shares until reaching the minimum share ownership
requirement, and after the ownership target is met, must retain at least 50% of the shares for one year. All of our directors
own more than the minimum stock requirement, except for our three newest directors who have been on the Board for two years or
less, and are on track to be compliant with our policy within the prescribed time frame.
The table below sets forth the total compensation
paid to Board members who are not employees of the Company of the Bank for fiscal year 2016.
2016 DIRECTOR
COMPENSATION TABLE
Director
|
|
Fees
Earned or
Paid in Cash ($)
(1)
|
|
|
Stock
Awards
($)
(2)
|
|
|
Option
Awards
($)
(2)
|
|
|
All Other
Compensation
($)
|
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis J. Arczynski
|
|
|
52,500
|
(3)(4)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
90,014
|
|
Stephen E. Bohner
|
|
|
47,500
|
(3)(5)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,014
|
|
Jacqueline L. Bradley
|
|
|
45,000
|
(3)(6)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
82,514
|
|
T. Michael Crook
|
|
|
37,500
|
(3)(7)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,014
|
|
H. Gilbert Culbreth, Jr.
|
|
|
47,500
|
(8)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,014
|
|
Julie H. Daum
|
|
|
37,500
|
(3)(7)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,014
|
|
Christopher E. Fogal
|
|
|
55,000
|
(3)(9)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
92,514
|
|
Maryann Goebel
|
|
|
37,500
|
(3)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,014
|
|
Roger O. Goldman
|
|
|
312,500
|
(3)(7)(10)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
20,000
|
(11)
|
|
|
370,014
|
|
Dennis S. Hudson, Jr.
|
|
|
37,500
|
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,014
|
|
Timothy
S. Huval
(11)
|
|
|
18,750
|
(7)
|
|
|
18,765
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,515
|
|
Herbert
Lurie
(11)
|
|
|
28,125
|
(3)(7)
|
|
|
28,139
|
|
|
|
—
|
|
|
|
13,155
|
(13)
|
|
|
69,419
|
|
Thomas E. Rossin
|
|
|
58,750
|
(14)
|
|
|
37,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
96,264
|
|
|
(1)
|
Certain directors elected to take a portion of their cash compensation
in the form of non-qualified options to purchase shares of Company common stock. A breakdown
of the option awards made to each director in 2016 is provided below in the table entitled
“Stock Awards Granted to Directors in 2016”.
|
|
(2)
|
A breakdown of the stock awards made to each director in 2016 is
provided below in the table entitled “Stock Awards Granted to Directors in 2016”.
No stock awards held by directors were outstanding as of December 31, 2016.
|
|
(3)
|
Certain directors elected to take a portion of their 2016 cash
compensation in the form of stock option awards. As of December 31, 2016, all of the
stock option awards described below in the table entitled “Stock Awards Granted
to Directors in 2016” were outstanding, as well as 190,000 shares of the stock
option held by Mr. Goldman described under “Lead Independent Director Agreement”
above.
|
|
(4)
|
Includes $15,000 for his service as Chair of the ERMC.
|
|
(5)
|
Includes $10,000 for his service as Chair of the Bank’s Credit
Review Committee.
|
|
(6)
|
Includes
$10,000 for her service as Chair of the Bank’s Wealth Committee.
|
|
(7)
|
The table below shows the cash amounts that the directors deferred
into the Directors’ Deferred Compensation Plan (“DDCP”) described below
in 2016 and the total number of shares held in the DDCP Seacoast Stock Account and Equity
Deferral Account for each director as of the Record Date:
|
Director
|
|
Cash Deferred
into
DDCP
Stock Account in
2016 ($)
|
|
|
Shares held in
DDCP
Stock
Account as of
Record Date (#)
|
|
|
Shares held in
DDCP
Equity
Deferral
Account (#)
|
|
|
Total Shares
held
in DDCP
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis J. Arczynski
|
|
|
—
|
|
|
|
16,178
|
|
|
|
8,298
|
|
|
|
24,476
|
|
Stephen E. Bohner
|
|
|
—
|
|
|
|
9,970
|
|
|
|
8,298
|
|
|
|
18,268
|
|
Jacqueline L. Bradley
|
|
|
—
|
|
|
|
—
|
|
|
|
5,533
|
|
|
|
5,533
|
|
T. Michael Crook
|
|
|
21,250
|
|
|
|
17,800
|
|
|
|
8,298
|
|
|
|
26,098
|
|
H. Gilbert Culbreth, Jr.
|
|
|
—
|
|
|
|
414
|
|
|
|
8,298
|
|
|
|
8,712
|
|
Julie H. Daum
|
|
|
26,251
|
|
|
|
4,561
|
|
|
|
8,298
|
|
|
|
12,859
|
|
Christopher E. Fogal
|
|
|
—
|
|
|
|
627
|
|
|
|
8,298
|
|
|
|
8,925
|
|
Maryann Goebel
|
|
|
—
|
|
|
|
—
|
|
|
|
8,002
|
|
|
|
8,002
|
|
Roger O. Goldman
|
|
|
26,250
|
|
|
|
31,464
|
|
|
|
8,298
|
|
|
|
39,762
|
|
Dennis S. Hudson, Jr.
|
|
|
—
|
|
|
|
—
|
|
|
|
8,298
|
|
|
|
8,298
|
|
Timothy S. Huval
|
|
|
—
|
|
|
|
—
|
|
|
|
1,175
|
|
|
|
1,175
|
|
Herbert Lurie
|
|
|
19,688
|
|
|
|
1,496
|
|
|
|
1,762
|
|
|
|
3,258
|
|
Thomas E. Rossin
|
|
|
—
|
|
|
|
—
|
|
|
|
8,298
|
|
|
|
8,298
|
|
|
(8)
|
Includes $10,000 for his service as Chair of the CGC.
|
|
(9)
|
Includes $15,000 for his service as Chair of the Audit Committee.
|
|
(10)
|
Includes $275,000 for his service as Lead Independent Director.
|
|
(12)
|
Mr. Huval was elected to Seacoast’s Board in July 2016 and
Mr. Lurie was elected to Seacoast’s Board in March 2016. Their compensation was
prorated accordingly for 2016.
|
|
(13)
|
Reimbursement by the Company of medical insurance premiums.
|
|
(14)
|
Includes $21,250 for his service as Chair of the Strategy and
Innovation Committee.
|
STOCK
AWARDS & OPTIONS GRANTED TO DIRECTORS IN 2016
The following table sets forth certain information
concerning stock awards and options granted to directors during 2016. As of December 31, 2016, all stock awards granted to directors
were fully vested, and all of the option awards listed below were outstanding, as well as 190,000 shares underlying the stock
option held by Mr. Goldman described under “Lead Independent Director Agreement” above.
Name
|
|
Grant Date
|
|
Stock
Awards
(1)
(#)
|
|
|
Option
Awards: Number
of Securities
Underlying
Options
(2)
(#)
|
|
|
Exercise or Base
Price of Option
Awards ($/Sh)
|
|
|
Grant
Date Fair
Value of Stock
and Option
Awards
(3)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis J. Arczynski
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
Stephen E. Bohner
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
Jacqueline L. Bradley
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
2,279
|
|
|
|
14.39
|
|
|
|
7,498
|
|
T. Michael Crook
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
H. Gilbert Culbreth, Jr.
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
Julie H. Daum
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
Christopher E. Fogal
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
Maryann Goebel
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
Roger O. Goldman
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
|
2/3/2016
|
|
|
—
|
|
|
|
3,419
|
|
|
|
14.39
|
|
|
|
11,249
|
|
Dennis S. Hudson, Jr.
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
Timothy S. Huval
|
|
7/26/2016
|
|
|
1,175
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,765
|
|
Herbert Lurie
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
28,139
|
|
|
|
4/19/2016
|
|
|
—
|
|
|
|
2,244
|
|
|
|
16,47
|
|
|
|
8,437
|
|
Thomas E. Rossin
|
|
7/26/2016
|
|
|
2,349
|
|
|
|
—
|
|
|
|
—
|
|
|
|
37,514
|
|
|
(1)
|
All of the shares were deferred into the Company’s Directors’
Deferred Compensation Plan described below.
|
|
(2)
|
Purchased with cash compensation and valued using Black Scholes
model at $3.29 per share for all option awards, except Mr. Lurie’s which was valued
at $3.76 per share.
|
|
(3)
|
Represents the aggregate grant date fair value as of the respective
grant date for each award, calculated in accordance with FASB ASC Topic 718. The assumptions
made in valuing stock awards reported in this column are discussed in Note J to the Company’s
audited financial statements included in its Annual Report on Form 10-K for the year
ended December 31, 2016.
|
Directors’
Deferred Compensation Plan
The Company has a Directors’ Deferred Compensation
Plan (“DDCP”) to allow each non-employee director of the Company and the Bank to defer receipt of his director compensation,
both cash and equity, until his separation from service with the Company. Each participant account is separated into sub-accounts
for cash deferrals (“Cash Deferral Account”) and equity deferrals (“Equity Deferral Account”). Each participant
directs how his Cash Deferral Account in the DDCP is invested among the available investment vehicle options, including a Company
stock fund (“Stock Account”). The plan’s investment options are reviewed and selected annually by a Committee
appointed by the Board of Directors of the Company to administer the plan. No earnings or dividends paid under the DDCP are above-market
or preferential.
All amounts paid under the plan are paid in cash
from the general assets of the Company, either directly by the Company or via a “rabbi trust” the Company has established
in connection with the plan. Nothing contained in the plan creates a trust or fiduciary relationship of any kind between the Company
and a participant, beneficiary or other person having a claim to payments under the plan. A participant or beneficiary does not
have an interest in his plan account that is greater than that of an unsecured creditor.
Upon a participant’s separation from service,
the participant will receive the balance of his Stock Account and/or Equity Deferral Account in shares of Company common stock
and the balance of his other plan accounts in cash in one of the following three forms specified by the participant at the time
of initial deferral election: i) a lump sum; ii) monthly installments over a period not to exceed five years; or iii) a combination
of an initial lump sum of a specified dollar amount and the remainder in monthly installments over a period not to exceed five
years.
Upon death of a participant, any balance in his
account shall be paid in a lump sum to his designated beneficiary or to his estate.
PROPOSAL
2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITOR
The Audit Committee, acting pursuant to authority delegated
to it by the Board of Directors, appointed Crowe Horwath LLP, an independent registered certified public accounting firm and the
Company’s independent auditor for the fiscal year ending December 31, 2016, to serve as the Company’s independent
auditor for the fiscal year ending December 31, 2017. Although it is not required to do so, the Board of Directors is submitting
the Audit Committee’s appointment of Crowe Horwath LLP for ratification by the Company’s shareholders in order to
ascertain the views of the shareholders regarding such appointment and as a matter of good corporate practice. If the shareholders
should not ratify the appointment of Crowe Horwath LLP, the Audit Committee will reconsider the appointment.
Representatives of Crowe Horwath LLP will be present
at the Annual Meeting and will be given the opportunity to make a statement on behalf of the firm, if they so desire, and will
also be available to respond to appropriate questions from shareholders.
All shares represented by valid proxies received
pursuant to this solicitation and not revoked before they are exercised will be voted in the manner specified therein. If no specification
is made, the proxies will be voted for the ratification of the appointment of Crowe Horwath LLP for the fiscal year ending December
31, 2017.
Ratification of this proposal requires approval
by the affirmative vote of a majority of votes cast at the Annual Meeting.
The Board of Directors unanimously
recommends a vote “
FOR
” Proposal 2.
RELATIONSHIP WITH INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Crowe Horwath LLP’s report on Seacoast’s
consolidated financial statements for the fiscal year ended December 31, 2016 did not contain an adverse opinion or a disclaimer
of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles. Crowe Horwath LLP’s
report on Seacoast’s internal control over financial reporting expressed an unqualified opinion on the effectiveness of
the Company’s internal control over financial reporting as of December 31, 2016. Crowe Horwath LLP has advised Seacoast
that neither the firm nor any of its partners has any direct or material interest in Seacoast and its subsidiaries except as auditors
and independent certified public accountants of Seacoast and its subsidiaries.
Independent Registered Public
Accounting Firm’s Fees
The following table shows the fees paid or accrued
by the Company for the audit and other services for the fiscal years ended December 31, 2016 and 2015, including expenses:
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Audit
Fees
(1)
|
|
$
|
548,591
|
|
|
$
|
495,000
|
|
Audit-Related
Fees
(2)
|
|
$
|
53,500
|
|
|
$
|
108,750
|
|
Tax Fees
|
|
$
|
12,000
|
|
|
$
|
—
|
|
All
Other Fees
(3)
|
|
$
|
10,087
|
|
|
$
|
35,200
|
|
|
(1)
|
Includes the aggregate fees for professional services and expenses
rendered for the audit of the Company’s consolidated financial statements, reviews
of consolidated financial statements included in the Company’s Forms 10-Q filed
during the respective fiscal year, and audit of the Company’s internal control
over financial reporting.
|
|
(2)
|
Includes the aggregate fees billed for assurance and related services
that are reasonably related to the performance of the audit of the Company’s financial
statements and are not reported under “Audit Fees.” These services primarily
relate to audits of the Company’s compliance with certain requirements applicable
to the U.S. Department of Housing and Urban Development (HUD) assisted programs, and
related attestation reporting thereon. Also includes the aggregate fees billed in 2015
for professional services performed in connection with the Company’s filing of
certain registration statements and the related issuance of consents.
|
|
(3)
|
Includes the aggregate fees for professional services and expenses
rendered in connection with the audit of the Company’s retirement savings plan.
|
Pre-Approval Policy
Under the Audit Committee’s Charter, the
Audit Committee is required to approve in advance the terms of all audit services provided to the Company as well as all permissible
audit-related and non-audit services to be provided by the independent auditors. All services set forth above under the captions
“Audit Fees”, “Audit-Related Fees”, “Tax Fees”, and “All Other Fees” were approved
by the Company’s Audit Committee pursuant to SEC Regulation S-X Rule 2-.01(c)(7)(i).
PROPOSAL
3
ADVISORY (NON-BINDING)
VOTE ON COMPENSATION OF
NAMED EXECUTIVE
OFFICERS
In accordance with the Exchange Act, we are required to include
in this Proxy Statement and present at the Annual Meeting a non-binding shareholder vote to approve the compensation of our named
executive officers, as disclosed in this Proxy Statement pursuant to the compensation rules of the SEC. This Proposal, commonly
known as a “say-on-pay” proposal, gives shareholders the opportunity to endorse or not endorse the compensation of
the Company’s named executive officers as disclosed in this Proxy Statement. The Proposal will be presented at the Annual
Meeting in the form of the following resolution:
RESOLVED, that the holders of common stock
of the Company approve the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion
and Analysis, the compensation tables and related material in the Company’s Proxy Statement for the 2017 Annual Meeting.
This advisory vote will not be binding on the Company’s
Board of Directors and may not be construed as overruling a decision by the Board of Directors or creating or implying any additional
fiduciary duty on the Board of Directors, nor will it affect any compensation paid or awarded to any executive. The CGC and the
Board of Directors will take into account the outcome of the vote when considering future executive compensation arrangements.
The purpose of our compensation policies and procedures
is to attract and retain experienced, qualified talent critical to our long-term success and enhancement of shareholder value.
Seacoast’s Board of Directors believes that our compensation policies and procedures achieve this objective.
This Proposal 3 requires approval by the affirmative
vote of a majority of votes cast at the Annual Meeting.
The Board of Directors unanimously
recommends a vote “
FOR
” Proposal 3.
OTHER
INFORMATION
|
|
|
Certain
Transactions and Business Relationships
|
|
RELATED
PARTY TRANSACTIONS
|
The Board of Directors recognizes that related
party transactions present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof) and
therefore has adopted a Related Party Transaction Policy to guide the Company in connection with all related party transactions.
The policy is available on the Company’s website at www.seacoastbanking.com. The Company defines a related party as:
|
·
|
any employee, officer, director or director nominee of
the Company and/or its subsidiaries;
|
|
·
|
a shareholder (or group of affiliated shareholders) beneficially
owning in excess of 5% of the Company (or its controlled affiliates);
|
|
·
|
a shareholder (or group of affiliated shareholders) with
the right to designate a director or board observer to the Board of Directors of the
Company and/or any of its subsidiaries;
|
|
·
|
an immediate family member of any of the foregoing; and
|
|
·
|
an entity which is owned or controlled by someone listed
above, or an entity in which someone listed above has a substantial ownership interest
or control of such entity.
|
The policy requires the Audit Committee or a majority
of disinterested members of the Board to approve or ratify a transaction between the Company and any related party (including
any transactions requiring disclosure under Item 404 of Regulation S-K under the Securities Exchange Act of 1934), other than:
|
·
|
transactions available on similar terms to all employees
or customers generally;
|
|
·
|
transactions involving less than $25,000 when aggregated
with all similar transactions; and
|
|
·
|
loans made by the Bank in the ordinary course of business,
on substantially the same terms, including interest rates and collateral, as, and following
credit underwriting procedures that are not less stringent than, those prevailing at
the time for comparable loans with parties not related to the lender, and not involving
more than the normal risk of repayment or presenting other unfavorable features, and
in compliance with applicable law, including the Sarbanes Oxley Act of 2002 and Regulation
O of the Board of Governors of the Federal Reserve System.
|
The Audit Committee is currently
comprised of three directors, Christopher E. Fogal (Chair), Dennis J. Arczynski and Maryann Goebel. None of the current Audit
Committee members is or has been an officer or employee of Seacoast or its subsidiaries and each is independent.
The
Company enters into commercial dealings with certain related persons that it considers arms-length and comparable to dealings
between unrelated parties. Each such dealing is described below:
|
·
|
Director T. Michael Crook’s brother-in-law has a
minority, non-controlling interest in Mayfair Plaza, which leases to the Bank 21,245
square feet of space adjacent to the Seacoast National Center in Stuart, Florida, pursuant
to a lease agreement which expires in May 2017. The Bank paid rent of approximately $295,215
on this property in 2016, of which Mr. Crook’s brother-in-law’s individual
interest was approximately $50,187.
|
|
·
|
Director Timothy S. Huval is employed as Chief Human Resources
Officer of Humana, Inc., a leading health and well-being company that provides group
vision insurance to Seacoast. In 2016, Seacoast paid Humana approximately $69,243 in
premiums. We believe Mr. Huval has no material direct or indirect interest in such arrangement.
|
|
·
|
Director Herbert A. Lurie is a senior advisor of Guggenheim
Securities that provides financial advisory services to Seacoast. In his capacity as
senior advisor to the firm, Mr. Lurie may receive customary fees that are based in part
on fees paid to Guggenheim Securities, depending on Mr. Lurie’s role in securing,
working and dispatching the matter. In 2016, Seacoast paid Guggenheim Securities $83,333
for advisory services.
|
The Audit Committee has approved each of these
transactions.
Several of Seacoast’s directors, executive
officers and their affiliates, including corporations and firms of which they are directors or officers or in which they and/or
their families have an ownership interest, are customers of Seacoast and its subsidiaries. These persons, corporations and firms
have had transactions in the ordinary course of business with Seacoast and its subsidiaries, including borrowings, all of which,
in the opinion of Seacoast’s management and in accordance with the Bank’s written loan policy, were on substantially
the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated
persons and did not involve more than the normal risk of collectability or present other unfavorable features. Seacoast and its
subsidiaries expect to have such transactions on similar terms with their directors, executive officers, and their affiliates
in the future.
As a federally insured bank, the Bank is subject
to Regulation O, which governs loans to “insiders”, defined as any executive officer, director or principal shareholder
of the Company or the Bank, and their related interests. Regulation O limits loans to insiders and requires that the terms and
conditions of credits granted to insiders are substantially the same as those extended to other customers of the Bank. The Bank’s
written loan policy requires compliance with the provisions of Regulation O.
The aggregate amount of loans outstanding by the
Bank to directors, executive officers, and related parties of Seacoast or the Bank as of December 31, 2016, was approximately
$2,115,286, which represented approximately 0.49% of Seacoast’s consolidated shareholders’ equity on that date. These
loans were made in the ordinary course of business and they did not involve more than the normal risk of collectability or present
other unfavorable features.
CERTAIN FAMILY RELATIONSHIPS
|
Certain members of the Company’s Board of
Directors and management are related. Director Dennis S. Hudson, Jr.’s brother, Dale M. Hudson, serves on the Bank’s
board of directors. Dennis S. Hudson, III, the Company’s Chairman and Chief Executive Officer, is the son of Dennis S. Hudson,
Jr. and the nephew of Dale M. Hudson. As an executive officer, Dennis S. Hudson, III’s compensation is approved by the CGC,
which is comprised solely of independent directors.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Securities Exchange Act of
1934, as amended requires the Company’s directors and executive officers, and persons who beneficially own more than 10%
of the Company’s common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Company. Directors, executive officers and persons beneficially owning more than
10% of the Company’s common stock are required to furnish the Company with copies of all Section 16(a) reports they file.
Based on the Company’s review of such reports and written representations from the reporting persons, the Company believes
that, during and with respect to fiscal year 2016, all filing requirements applicable to its directors, executive officers and
beneficial owners of more than 10% of its common stock were complied with in a timely manner, except for:
|
·
|
The Form 4 for Dennis J. Arczynski filed with the SEC
on January 20, 2016 which reported the acquisition of 8,255 shares of common stock on
January 14, 2016. The Company believes that the Form 4 filed on February 17, 2017 reflects
Mr. Arczynski’s current holdings.
|
|
·
|
The Form 4 for Stephen E. Bohner filed with the SEC on
April 11, 2016 which reported the sale of four shares of common stock on March 18, 2016.
The Company believes that the Form 4 filed on February 17, 2017 reflects Mr. Bohner’s
current holdings.
|
|
·
|
The Form 4 for Julie H. Daum filed with the SEC on May
23, 2016 which reported the purchase of 5,000 shares of common stock on May 4, 2016.
The Company believes that the Form 4 filed on February 17, 2017 reflects Ms. Daum’s
current holdings.
|
|
·
|
The Form 4 for Maryann Goebel filed with the SEC on June
2, 2016 which reported the purchase of 5,850 shares of common stock on May 25, 2016.
The Company believes that the Form 4 filed on February 8, 2017 reflects Ms. Goebel’s
current holdings.
|
Other
Matters
The principal executive offices of Seacoast are
located at 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995, and its telephone number is (772) 287-4000.
AVAILABILITY OF FORM
10-K
|
Upon the written request of any person whose proxy
is solicited by this Proxy Statement, Seacoast will furnish to such person without charge (other than for exhibits) a copy of
Seacoast’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, including financial statements and schedules
thereto, as filed with the SEC. Requests may be made to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, P.O.
Box 9012, Stuart, Florida 34995.
SOLICITATION OF PROXIES;
EXPENSES
|
The Board of Directors of the Company is soliciting
proxies to be voted at the Annual Meeting. The Company will bear the cost of preparing, printing and mailing the proxy materials
and soliciting proxies for the Annual Meeting. In addition to the solicitation of shareholders of record by mail, telephone, electronic
mail, facsimile or personal contact, Seacoast will be contacting brokers, dealers, banks, and/or voting trustees or their nominees
who can be identified as record holders of the Company’s common stock; such holders, after inquiry by Seacoast, will provide
information concerning quantities of proxy materials needed to supply such information to beneficial owners, and Seacoast will
reimburse them for the reasonable expense of mailing proxy materials. Seacoast may retain other unaffiliated third parties to
solicit proxies and pay the reasonable expenses and charges of such third parties for their services.
NOTICE OF BUSINESS TO
COME BEFORE THE MEETING
|
Management of Seacoast does not know of any matters
to be brought before the Annual Meeting other than those described above. If any other matters properly come before the Annual
Meeting, the persons designated as proxies will vote on such matters in accordance with their best judgment.
Shareholder
Proposals for 2018
SHAREHOLDER PROPOSALS
FOR INCLUSION IN 2018 PROXY STATEMENT
|
To be considered for inclusion in the Company’s
proxy statement and proxy card for the 2018 Annual Meeting of Shareholders, a shareholder proposal must be received at the Company’s
principal executive offices no later than December 7, 2017, which is 120 calendar days before the one-year anniversary of the
date on which the Company first mailed this Proxy Statement.
SHAREHOLDER PROPOSALS
FOR PRESENTATION AT 2018 ANNUAL MEETING
|
If you do not wish to submit a proposal for inclusion
in next year’s proxy materials, but instead wish to present it directly at the 2018 Annual Meeting of Shareholders, you
must give timely written notice of the proposal to the Company’s Secretary pursuant to the Company’s advance notice
provisions. To be timely, the notice (including a notice recommending a director candidate) must be delivered to the Company’s
principal executive offices no fewer than 60 nor more than 90 days before the one-year anniversary of the date of the Annual Meeting.
To be timely, the written notice (including a notice recommending a director candidate) must be received no earlier than February
24, 2018 and no later than March 26, 2018. The notice must describe your proposal in reasonable detail and provide certain other
information required by the Company’s Articles of Incorporation. A copy of the Company’s Articles of Incorporation
is available upon request from the Company’s Secretary.
ADDITIONAL VOTING INFORMATION
|
Shares represented by valid proxies and voting
instruction forms that are received on time will be voted as specified. If you sign and return your proxy card or voting instruction
form but do not provide voting instructions, your shares represented by the proxy will be voted as recommended by our Board of
Directors as indicated below:
Proposal
|
Board
Recommendation
|
1
|
Election
of Directors
|
FOR
ALL
|
2
|
Ratification of Auditor
|
FOR
|
3
|
Advisory Vote on Executive Compensation
|
FOR
|
If any other matters are properly presented at
the Annual Meeting for action, the persons named and acting as proxy will have the discretion to vote for you on these matters
in accordance with their best judgment. We do not currently expect that any other matters will be properly presented for action
at the Annual Meeting.
Each share of common stock is entitled to one vote
on each matter properly brought before the meeting.
Record Date
You may
vote all common shares that you owned as of the close of business on March 23, 2017, which is the record date for the meeting.
Forms
of Ownership of Shares
If you
receive more than one proxy card or notice, it means you have multiple holdings.
You may own common shares in one or more ways, including:
|
·
|
Directly in your name as the shareholder of record (which
may be held individually, jointly, or another title), including shares purchased through
Seacoast’s Dividend Reinvestment and Stock Purchase Plan or restricted stock awards
issued to employees under our long-term incentive plans;
|
|
·
|
Indirectly through a bank, broker or other nominee in
“street name”;
|
|
·
|
Indirectly through Seacoast’s Retirement Savings
Plan or Employee Stock Purchase Plan.
|
If your shares of common stock are registered directly in your
name, we are sending the proxy materials directly to you. If you hold our shares in street name, your bank, broker or other nominee
is sending proxy materials to you and you must direct them how to vote on your behalf by completing the voting instruction form
that accompanies your proxy materials or by following the instructions in the notice you received.
If you are a participant in Seacoast’s Dividend Reinvestment
and Stock Purchase Plan, follow the instructions on the Notice or proxy card to provide voting instructions to the Trustee. Shares
held in your plan account will be combined and voted at the Annual Meeting in the same manner in which you voted those shares
registered in your own name either by proxy or in person.
If you are a participant in Seacoast’s Retirement Savings
Plan or Employee Stock Purchase Plan, your voting instructions must be received by May 18, 2017 (the “cut-off date”)
to allow sufficient time for the trustees to vote. When your voting instructions are received by the cut-off date, your shares
in these plans will be voted as directed by you. For the shares in your account in Seacoast’s Retirement Savings Plan, if
you do not submit your voting instructions by following the instructions on the Notice or proxy card, then the trustee of the
Retirement Savings Plan will vote, or not vote, in its sole discretion, the shares of common stock in your account. For shares
held in your account in the Employee Stock Purchase Plan, your shares will not be voted if you do not give voting instructions
as to such shares by proxy.
Please follow the instructions on each notice or proxy card to
ensure that all of your shares are voted.
Street
Name Holders
If you are a beneficial owner and a broker, bank or other nominee
is the record holder (which is commonly referred to as “street name”), then you received the notice of the Annual
Meeting or proxy materials from the record holder. You have the right to direct your broker or nominee how to vote your shares,
and such broker or other nominee is required to vote the shares in accordance with your instructions. Your broker or nominee should
have given you instructions for you to provide direction on how to vote your shares. It will then be the record holder’s
responsibility to vote your shares for you in the manner you direct. Generally, brokers and other record holders may vote on discretionary
or routine matters, but cannot vote on non-routine or non-discretionary matters unless they have received voting instructions
from street name holder. We therefore encourage you to provide directions to your broker as to how you want your shares voted
on all matters to be brought before the Annual Meeting.
If your shares are held in street name, you are invited to attend
the Annual Meeting; however, you may not vote your shares of common stock held in street name in person at the Annual Meeting
unless you request and obtain a power of attorney or other authority from your broker or other nominee who holds your shares and
bring it to the Annual Meeting. Even if you plan to attend the Annual Meeting, we ask that you vote in advance of the Annual Meeting
in case your plans change.
Effect
of not Casting Your Vote
If you hold your shares in street name, you have the right
to direct your broker or nominee how to vote your shares, and such broker or other nominee is required to vote the shares in accordance
with your instructions. Your broker or nominee should have given you instructions for you to provide direction on how to vote
your shares. It is then the record holder’s responsibility to vote your shares for you in the manner you direct.
Under the rules of various securities exchanges, brokers
and other record holders may generally vote on discretionary or routine matters, but cannot vote on non-routine or non-discretionary
matters, such as the election of directors, unless they have received voting instructions from the person for whom they are holding
shares. Proposals 1 and 3 are considered non-routine matters, and cannot be voted on by your broker without your instructions.
We therefore encourage you to provide directions to your broker as to how you want your shares voted on all matters to be voted
on at the meeting.
Revocation
of Proxies
If your shares of common stock are registered directly in your
name, you may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this
by:
|
·
|
timely submitting another proxy via the telephone or internet;
|
|
·
|
delivering to Seacoast a written notice bearing a date later
than the date of the proxy card, stating that you revoke the proxy, with such written
notice to be sent to: 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995, Attention:
Corporate Secretary;
|
|
·
|
signing
and delivering to Seacoast a proxy card relating to the same shares and bearing a later
date; or
|
|
·
|
attending the meeting and voting in person by written ballot,
although attendance at the meeting will not, by itself, revoke a proxy.
|
Also, please note that if you have voted through your broker, bank
or other nominee and you wish to change your vote, you must follow the instructions received from such entity to change your vote.
Quorum
and Required Vote
To hold a vote on any proposal, a quorum must be present in person
or by proxy at the Annual Meeting. A quorum is a majority of the total votes entitled to be cast by the holders of the outstanding
shares of common stock as of the close of business on the record date.
In determining whether a quorum exists at the Annual Meeting for
purposes of all matters to be voted on, all votes “for” or “against,” as well as all abstentions and broker
non-votes, will be counted. A “broker non-vote” occurs when a nominee does not have discretionary voting power with
respect to that proposal and has not received instructions from the beneficial owner.
On the Record Date, there were 40,729,656 shares of common stock
issued, outstanding and entitled to be voted, which were held by approximately 2,318 holders of record. Therefore, at least 20,364,829
shares need to be present at the Annual Meeting or represented by proxy in order for a quorum to exist.
If a quorum is not present at the scheduled time of the Annual
Meeting, a majority of the shareholders present or represented by proxy may adjourn the Annual Meeting until a quorum is present.
The time and place of the adjourned Annual Meeting will be announced at the time of the adjournment, if any, and no other notice
will be given. An adjournment will have no effect on the business that may be conducted at the Annual Meeting. If the Annual Meeting
is adjourned more than 120 days after the date fixed for the original Annual Meeting, the Board of Directors must fix a new record
date to determine the shareholders entitled to vote at the adjourned Annual Meeting.
To elect directors and adopt the other proposals at the 2017 Annual
Meeting, the following votes are required:
Proposal
|
Vote
Required
|
Do
abstentions count
as votes cast?
|
Is
broker
d
iscretionary
voting allowed?
|
1
|
Election
of Directors
|
Plurality
vote
(1)
|
No
|
No
|
2
|
Ratification
of Auditor
|
Affirmative
vote of a
majority
of votes cast
|
No
|
Yes
|
3
|
Advisory
(Non-binding) Vote
on Executive Compensation
|
Affirmative
vote of a
majority of votes cast
|
No
|
No
|
|
(1)
|
Under
our Bylaws, all elections of directors are decided by plurality vote. However, notwithstanding
the plurality standard, in an uncontested election for directors, which is the case for
the election under Proposal 1, our Corporate Governance Guidelines provide that if any
director nominee receives a greater number of votes “withheld” from his or
her election than votes “for” such election, then the director will promptly
tender his or her resignation to the Board following certification of the shareholder
vote, with such resignation to be effective upon acceptance by the Board of Directors.
The CGC would then review and make a recommendation to the Board of Directors as to whether
the Board should accept the resignation, and the Board would ultimately decide whether
to accept the resignation. The Company will disclose its decision-making process regarding
the resignation in a Form 8-K furnished to the SEC. In contested elections, the required
vote would be a plurality of votes cast and the resignation policy would not apply. Full
details of this policy are set forth in our Corporate Governance Guidelines, available
on our website at www.seacoastbanking.com.
|
Cumulative voting is not permitted. Abstentions and broker non-votes,
if any, will not be counted for purposes of determining whether any of the proposals have received sufficient votes for approval,
but will count for purposes of determining whether or not a quorum is present. So long as a quorum is present, abstentions and
broker non-votes will have no effect on any of the matters presented for a vote at the Annual Meeting.
Multiple Shareholders Sharing
the Same Address
The SEC permits delivery of one copy of the proxy materials to
shareholders who have the same address and last name under a procedure referred to as “householding”. We do not utilize
householding for our shareholders of record. However, if you hold your shares through a broker, bank or other nominee, you may
receive only one copy of the notice and, as applicable, any additional proxy materials that are delivered.
If you receive a single set of proxy materials as a result of householding,
and you would like to have separate copies of proxy materials mailed to you in the future, please contact your broker, bank or
other nominee. However, if you want to receive a paper proxy or notice or other proxy materials for purposes of this year’s
Annual Meeting, follow the instructions included in the notice that was sent to you.
* * * *
You can find the directions to our Annual Meeting on the inside
back cover of this proxy statement. Whether or not you plan to attend the meeting, we hope you will vote as soon as possible.
You may vote over the internet, as well as by telephone. You also may vote your shares by requesting a paper proxy card and completing,
signing and returning it by mail. Please review the instructions on each of your voting options described in this proxy statement,
as well as in the notice you received in the mail.
|
|
|
DENNIS S. HUDSON III
|
|
Chairman & Chief Executive Officer
|
|
|
April 6, 2017
|
|
APPENDIX
A
|
INFORMATION
REGARDING NON-GAAP FINANCIAL MEASURES
|
This letter contains financial information determined by methods
other than Generally Accepted Accounting Principles (“GAAP”). Management uses these non-GAAP financial measures in
its analysis of the Company’s performance and believes these presentations provide useful supplemental information, and
a clearer understanding of the Company’s performance. The Company believes the non-GAAP measures enhance investors’
understanding of the Company’s business and performance and if not provided would be requested by the investor community.
These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial
institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness
of items comprising these measures and that different companies might calculate these measures differently. The Company provides
reconciliations between GAAP and these non-GAAP measures. These disclosures should not be considered an alternative to GAAP. Certain
prior period amounts have been revised to conform to the current period presentation.
(Dollars in thousands except per share data)
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
29,202
|
|
|
$
|
22,141
|
|
|
$
|
5,696
|
|
|
$
|
47,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security gains
|
|
|
(368
|
)
|
|
|
(161
|
)
|
|
|
(469
|
)
|
|
|
(419
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOLI income (benefits upon death)
|
|
|
(464
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bargain purchase gain
|
|
|
0
|
|
|
|
(416
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
1,222
|
|
|
|
898
|
|
|
|
1,199
|
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger related charges
|
|
|
8,673
|
|
|
|
3,775
|
|
|
|
4,544
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branch closure charges and costs related to expense initiatives
|
|
|
2,490
|
|
|
|
0
|
|
|
|
4,261
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early redemption cost for FHLB advances
|
|
|
1,777
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
0
|
|
|
|
281
|
|
|
|
26
|
|
|
|
(1,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand Refresh
|
|
|
0
|
|
|
|
0
|
|
|
|
697
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense and other incentive costs related to improved
outlook
|
|
|
0
|
|
|
|
0
|
|
|
|
1,213
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of deferred tax asset valuation allowance
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(42,993
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect of adjustments
|
|
|
(5,077
|
)
|
|
|
(1,651
|
)
|
|
|
(4,734
|
)
|
|
|
673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
37,455
|
|
|
$
|
24,867
|
|
|
$
|
12,433
|
|
|
$
|
3,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (000)
|
|
|
37,508
|
|
|
|
33,744
|
|
|
|
27,717
|
|
|
|
19,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Diluted Share
|
|
$
|
1.00
|
|
|
$
|
0.74
|
|
|
$
|
0.45
|
|
|
$
|
0.20
|
|
|
|
Fourth Quarter
|
|
|
Fourth Quarter
|
|
|
Fourth Quarter
|
|
(Dollars in thousands except per share data)
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
10,771
|
|
|
$
|
6,036
|
|
|
$
|
(1,517
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security gains
|
|
|
(7
|
)
|
|
|
(1
|
)
|
|
|
(108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bargain purchase gain
|
|
|
0
|
|
|
|
(416
|
)
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments to Revenue
|
|
|
(7
|
)
|
|
|
(417
|
)
|
|
|
(108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
165
|
|
|
|
187
|
|
|
|
478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger related charges
|
|
|
559
|
|
|
|
1,043
|
|
|
|
2,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branch closure charges and costs related to expense initiatives
|
|
|
0
|
|
|
|
0
|
|
|
|
4,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand Refresh
|
|
|
0
|
|
|
|
0
|
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous losses
|
|
|
0
|
|
|
|
48
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense and other incentive costs related to improved outlook
|
|
|
0
|
|
|
|
0
|
|
|
|
1,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments to Noninterest Expense
|
|
|
724
|
|
|
|
1,278
|
|
|
|
9,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate on adjustments
|
|
|
(152
|
)
|
|
|
(328
|
)
|
|
|
(3,753
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
|
|
$
|
11,336
|
|
|
$
|
6,569
|
|
|
$
|
4,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted share, as reported
|
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Diluted Share
|
|
$
|
0.30
|
|
|
$
|
0.19
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (000)
|
|
|
38,252
|
|
|
|
34,395
|
|
|
|
33,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
47,354
|
|
|
$
|
37,299
|
|
|
$
|
31,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments to Revenue
|
|
|
(7
|
)
|
|
|
(417
|
)
|
|
|
(108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
|
|
$
|
47,347
|
|
|
$
|
36,882
|
|
|
$
|
31,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
|
|
$
|
30,297
|
|
|
$
|
27,169
|
|
|
$
|
34,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments to Noninterest Expense
|
|
|
724
|
|
|
|
1,278
|
|
|
|
9,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Noninterest Expense
|
|
$
|
29,573
|
|
|
$
|
25,891
|
|
|
$
|
24,520
|
|
|
|
Fourth Quarter
|
|
|
Fourth Quarter
|
|
|
Fourth Quarter
|
|
(Dollars in thousands except per share data)
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Noninterest Expense
|
|
$
|
29,573
|
|
|
$
|
25,891
|
|
|
$
|
24,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed property expense & amortization of intangible
|
|
|
(641
|
)
|
|
|
(324
|
)
|
|
|
(528
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Adjusted Noninterest Expense
|
|
$
|
28,932
|
|
|
$
|
25,567
|
|
|
$
|
23,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
|
|
$
|
47,347
|
|
|
$
|
36,882
|
|
|
$
|
31,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of FTE adjustment
|
|
|
204
|
|
|
|
117
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue on a fully taxable equivalent basis
|
|
$
|
47,551
|
|
|
$
|
36,999
|
|
|
$
|
32,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Efficiency Ratio
|
|
|
60.8
|
%
|
|
|
69.1
|
%
|
|
|
74.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets
|
|
$
|
4,572,188
|
|
|
$
|
3,463,277
|
|
|
$
|
3,037,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Assets (ROA)
|
|
|
0.94
|
%
|
|
|
0.69
|
%
|
|
|
-0.20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of adjustments for Adjusted Net Income
|
|
|
0.05
|
%
|
|
|
0.06
|
%
|
|
|
0.74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted ROA
|
|
|
0.99
|
%
|
|
|
0.75
|
%
|
|
|
0.54
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shareholders' Equity
|
|
$
|
437,077
|
|
|
$
|
353,392
|
|
|
$
|
319,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less average goodwill and intangible assets
|
|
|
(79,620
|
)
|
|
|
(34,457
|
)
|
|
|
(33,803
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Tangible Equity
|
|
$
|
357,457
|
|
|
$
|
318,935
|
|
|
$
|
285,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Shareholders' Equity
|
|
|
9.8
|
%
|
|
|
6.8
|
%
|
|
|
-1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of removing average intangible assets and related amortization
|
|
|
2.7
|
%
|
|
|
1.1
|
%
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Tangible Common Equity (ROTCE)
|
|
|
12.5
|
%
|
|
|
7.8
|
%
|
|
|
-1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of adjustments for Adjusted Net Income
|
|
|
0.6
|
%
|
|
|
0.7
|
%
|
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Average Tangible Common Equity
|
|
|
13.1
|
%
|
|
|
8.5
|
%
|
|
|
6.1
|
%
|
LOCATION
OF THE 2017 ANNUAL MEETING
|
Our 2017 Annual Meeting will be held at the Founder’s Room,
Orlando Science Center.
Please use the address below for directions to the Orlando Science
Center:
777 E Princeton St, Orlando, FL
32803
Taking Florida’s Turnpike
|
·
|
Exit 259 to merge onto I-4 East
|
|
·
|
Turn right onto Princeton St. from the exit ramp.
|
|
·
|
Orlando Science Center will be on the left hand side with
the OSC Parking Garage on the right hand side.
|
|
·
|
Turn right at the traffic light into the parking garage.
|
|
·
|
Park closest to the 2nd ramp of the garage and use the pedestrian
walk way to enter into Orlando Science Center
|
Directions To The Orlando Science Center From I-4
|
·
|
Exit I-4 at Princeton St. (Exit 85)
|
|
·
|
If traveling eastbound on I-4 turn right onto Princeton St.
from the exit ramp.
|
|
·
|
If traveling westbound on I-4 turn left onto Princeton St.
from the exit ramp. You will then be going east on Princeton St.
|
|
·
|
Orlando Science Center will be on the left hand side with
the OSC Parking Garage on the right hand side.
|
|
·
|
Turn right at the traffic light into the parking garage.
|
|
·
|
Park closest to the 2nd ramp of the garage and use the pedestrian
walk way to enter into Orlando Science Center
|
Arriving by Car Service or Taxi:
If arriving by a car service, please direct drop off on level 2
of the parking garage and cross into the building by the pedestrian walkway.
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