UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
Proxy Statement
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Securities Exchange
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Only (as permitted by Rule 14(a)-6(e)(2))
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Definitive Additional Materials
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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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box):
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computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
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to which transaction applies:
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Aggregate number of securities to
which transaction applies:
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was determined.):
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Proxy Statement
2018
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815 Colorado Avenue
Stuart, Florida 34994
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NOTICE
OF 2018 ANNUAL MEETING OF SHAREHOLDERS
Thursday,
May 24, 2018
3:00
p.m. Eastern Time
Seacoast Banking Corporation
of Florida (“Seacoast”) will hold its 2018 Annual Meeting of Shareholders at the Hutchinson Shores Resort, 3793 NE
Ocean Blvd, Jensen Beach, FL 34957, on Thursday, May 24, 2018 at 3:00 p.m. Eastern Time.
ITEMS
OF BUSINESS
The purpose of the Annual
Meeting is to vote on the following proposals:
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1.
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Election
of Directors.
To re-elect five Class I directors (“Proposal 1”);
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2.
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Amend
the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Capital Stock.
To approve the proposed
amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company’s
common stock from 60,000,000 to 200,000,000 shares (“Proposal 2”);
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3.
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Amend
the Company’s 2013 Incentive Plan to Increase Authorized Shares.
To approve the proposed amendment to the 2013 Incentive
Plan to increase the number of shares authorized to be issued under the Plan (“Proposal 3);
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4.
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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, 2018 (“Proposal 4”);
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5.
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Advisory
(Non-binding) Vote to Approve Compensation of Named Executive Officers.
To hold an advisory vote to approve the compensation
of the Company’s named executive officers as disclosed in this Proxy Statement (“Proposal 5”);
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6.
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Other
Business.
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 are eligible to vote
if you were a shareholder of record on the close of business on March 26, 2018, which is the record date for the Annual Meeting.
This Notice of the 2018 Annual Meeting of Shareholders and the accompanying proxy statement are sent by order of the Company’s
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, 2018
Table
of Contents
GENERAL INFORMATION
Annual Meeting Information
Date, Time and Place:
Thursday,
May 24, 2018, at 3:00 P.M. Eastern Time at the, Hutchinson Shores Resort, 3793 NE Ocean Blvd, Jensen Beach, FL 34957. 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 holding shares in “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 2018 Shareholder Meeting
Our 2018 Proxy Statement
and the Annual Report on Form 10-K for the year ended December 31, 2017 (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=393970
.
We have mailed to certain
shareholders a notice of internet availability of proxy materials on or about April 6, 2018. 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 26, 2018, which is the record date for the Meeting.
Your vote is important.
Please review the voting instructions 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 the meeting, pursuant to the procedures specified in “Revocation
of Proxies”.
You may vote by any of
the following methods:
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.
BY INTERNET:
You can vote online at
www.proxyvote.com
.
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.
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.
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 17, 2018 (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.
PROXY
SUMMARY
Introduction
Our balanced growth strategy,
which is focused on organic growth and acquisitions in growing markets, is delivering value for our shareholders.
In this section, we summarize
2017 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 2017 Annual Report on Form 10-K before you vote.
2017 Performance Highlights
Value Creation for our Shareholders
Seacoast continued to drive positive momentum
in performance metrics, leading to sustained outperformance in total shareholder returns.
* Total return combines share
price appreciation and dividends paid to show the total return to the shareholder expressed as an annualized percentage.
Execution of our strategy in 2017 produced
outstanding results:
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·
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Adjusted
net revenues
1
increased 32% year over year to $234.8 million and adjusted revenue
1
increased 24% year
over year to $219.5 million.
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Net
income improved 47% year over year to $42.9 million and adjusted net income
1
improved 42% year over year to $55.3 million.
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We
reported $0.99 in earnings per diluted share and $1.28 in adjusted earnings per share
1
, meeting our target range despite
the impacts of Hurricane Irma.
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Households
we serve have grown to 104,303 from 66,826 in 2013. Across Central Florida, we served over 23,000 households in 2017 compared
to 2,600 in 2013. In Tampa, households represent 3% of total households, serving over 3,300 households in 2017.
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Loans
climbed $938 million, or 33%, to $3.8 billion compared to prior year. Looking forward, we expect loan production will continue
to reflect the underpinnings of a strong Florida economy, and continued customer receptivity to our relationship and convenience-based
approach to helping meet their needs. Also, we continue to maintain a very granular loan portfolio with modest commercial real
estate exposure.
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For
the 4
th
quarter 2017, return on average tangible assets was 0.97%,return on average tangible shareholders’ equity
was 10.7% and the efficiency ratio was 64.0% compared to 1.12%, 12.5% and 58.9% respectively in the prior quarter and 1.00%, 12.5%,
and 62.4% in the fourth quarter of 2016. The adjusted return on average tangible assets
1
was 1.23%, adjusted return
on average shareholders’ equity
1
was 13.5%, and the adjusted efficiency ratio
1
was 52.6% compared
to 1.16%, 12.8%, and 57.7%, respectively, in the prior quarter, and 1.05%, 13.1%, and 60.8%, respectively, in the fourth quarter
of 2016.
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1
Non-GAAP measure;
refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Our balanced growth strategy combines
organic growth and select strategic M&A along with prudent risk management, leading to strong results since January 2014.
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Deposit
growth increased 4% organically, 30% including acquisitions.
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Loan
growth increased 10% organically, 33% including acquisitions
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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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159%
increase in loan sales to current customers
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29%
increase in deposit accounts sold to current customers
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33%
increase in debit cards sold to current customers
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Our performance and future growth are
driven by a differentiated strategy consisting of 6 key themes:
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Comprehensive
Customer Servicing Model
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We
focus on meeting customer needs profitably through an evolving distribution network consisting of branches, mobile apps, online
banking, ATMs, our Florida based call center, and commercial banking offices. This multi-channel distribution system is strategically
important, as it allows us to attract customers from much larger competitors who want modern convenience and community bank service.
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Our
distribution system has allowed us to innovate our business model as more transactions migrate outside the traditional branch
network. Specifically, we now process more routine transactions through our mobile app and ATMs than we do through our branches,
indicating a tipping point in customer behavior and expectations.
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The
movement of routine transactions to digital channels has enabled us to rationalize our branches. As of YE 2017, deposits increased
160% while branches increased only 45% since YE 2012.
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As
customers continue to visit traditional branches less and less, Seacoast has a proven ability to deepen relationships with clients
via its distribution system. Since launching automated marketing programs in 2014, Consumer and Business Loan unit sales have
increased incrementally by 168%, deposit accounts by 53%, and debit cards by 58%.
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Focus
on business banking, in particular, is driving significant growth in business loans outstanding, increasing 296% since year end
2013.
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We
have a number of advantages related to our approach to credit risk management. In particular, we have:
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Strong, skilled, independent underwriting teams that confirm
solid, multiple repayment sources.
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Well-defined portfolio limits and elevated credit portfolio
management/monitoring.
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Digestible loan sizes and no syndications.
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CRE concentrations below 220%.
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Credit culture is documented and reinforced throughout
the organization.
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Track
Record of Value Creating Acquisitions
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Our
acquisition strategy has enable us to expand in to some of Florida’s most attractive markets
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We
have successfully completed 7 acquisitions since 2014, with an average IRR of 20%.
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We
are the number one Florida headquartered bank in the Orlando MSA and the 4
th
largest Florida bank, up from 6
th
in 2014.
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Well-Positioned
to Benefit From Florida Market
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Projected
to be the 16
th
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 the next four years and is positioned to become a $1 trillion economy
in 2018.
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Florida’s
economy is diversified, with growth in education, health services, leisure and hospitality, trade, transportation, utilities,
construction and manufacturing.
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Yet
amidst the growth across the state, the number of Florida headquartered banks continues to decline, with a 54.5% reduction since
2008. This increases Seacoast’s scarcity value.
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Expanding
Analytical and Digital Capabilities
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Seacoast
has become a recognized leader amongst community banks for its use of analytics and digital capabilities to create value for our
customers and shareholders.
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·
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Experienced
Board and Management Team
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§
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Seacoast
has revitalized its board of directors which continues to be aligned with its balanced growth strategy. Eight key members have
been added to their board of directors since 2012.
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With
regard to executive management, strong talent has been added in key areas.
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Our Vision 2020 Innovation Plan Will
Drive Shareholder Returns Above an Already Strong Outlook
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Vision
2020 connects current and planned innovations over the next three years to necessary changes in our business model.
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Unveiled
at our first ever investor day in February 2017, Vision 2020 is a three pronged plan to drive compelling results for shareholders.
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Continue to develop direct sales channels and offerings
based on customer needs and preferences.
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Simplify processes for our customers and bankers.
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Reduce our cost to acquire.
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We are outpacing our peers in engaging our customers with
self-serve options for routine banking needs.
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This is creating the ability to reduce cost in the traditional
model, and invest in personalized service for more complex transactions.
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Data analytics is driving top line revenue, enhanced management
decision making and deeper customer penetration.
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We are making investments to reduce product delivery times
by streamlining internal processes through technology and reengineering.
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Vision 2020 Objectives
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Specific
objectives include:
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Return
on tangible assets target of 1.30%+
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Return
on tangible common equity target of 16%+
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Efficiency
ratio target below 50%
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Seacoast
is on track to achieve our ambitious Vision 2020 objectives.
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The
enactment of the Tax Cuts and Jobs Act of 2017 further enhances Seacoast’s ability to achieve these objectives.
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Executive
Compensation Program Highlights
The Compensation and
Governance Committee (“CGC”) is committed to aligning our compensation strategies with our evolving business strategy,
good governance and effective risk management practices, and our efforts to generate superior long-term returns for our shareholders.
To this end, we emphasize pay-for-performance in our executive compensation programs.
Our executive compensation
strategy strongly aligns our CEO and other executives with long-term shareholder interests.
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A
significant portion of executive pay is variable or at risk.
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We
use a blend of equity awards, including some that are performance-based with multi-year vesting.
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The
CGC determines the number of equity awards and value of annual incentive awards after assessing each executive’s performance
against his or her performance scorecard for the year. 2017 scorecards included individual performance objectives and an adjusted
EPS goal.
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Instead
of paying cash bonuses, short-term incentive compensation for FY17 performance was paid in the form of restricted stock units
granted in April 2018. The CGC took this action in response to guidance we received from our shareholders that indicated 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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The following
table summarizes the primary elements of our executive compensation program for 2017.
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Base Salary
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Recognize performance of job responsibilities and attract and retain individuals with superior talent.
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Reflects the CGC’s assessment of the executive’s experience, skills and value to Seacoast.
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Our CEO’s base salary increased by 9% in 2017. Base salaries for our named executive officers increased an average of 6% in 2017.
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Performance Share Units (PSUs)
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Provide a strong retention element and align compensation with our business strategy and long-term shareholder value.
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The number of PSUs granted is determined by the CGC after consideration of each executive’s performance scorecard. The number of PSUs that may be earned is based on the level of achievement of goals established by the CGC for a three-year performance period. Value realized also varies based on stock price performance over the vesting period.
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PSUs granted in 2017 vest based on the level of achievement of goals relating to growth in adjusted EPS and average adjusted return on average tangible common equity over a three-year period.
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Stock Options
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Directly link executive and shareholder interests by tying long-term incentive to stock price appreciation.
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The number of options granted is determined by the CGC after consideration of each executive’s performance scorecard. The realized value of options is based on stock price performance.
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Stock options granted in 2017 vest in equal installments over three years. The exercise price of the stock options was set at 120% of the grant date value of the shares.
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Restricted Stock Units (RSUs) granted in lieu of cash bonuses
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Provide a strong retention element and align executive and shareholder interests.
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The amount of short-term incentive is determined by the CGC after consideration of each executive’s performance scorecard. The realized value of RSUs is based on stock price performance over the vesting period.
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Similar to 2016, the CGC decided to pay out the annual incentive award for 2017 in the form of RSUs that vest in equal installments over three years.
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Please refer to the
Compensation
Discussion and Analysis
and
The Executive Compensation Tables
in this proxy statement for additional details about our
compensation programs.
Summary
of Proposals and Board Recommendations
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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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Re-election of Five Class I Directors
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FOR ALL
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Plurality vote*
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2
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Amend Articles of Incorporation to Increase Authorized Shares of Common Stock
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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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Amend the 2013 Incentive Plan to Increase Authorized Shares
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FOR
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Affirmative vote of a majority of votes cast
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4
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Ratification of Appointment of Crowe Horwath LLP as Independent Auditor for 2018
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FOR
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Affirmative vote of a majority of votes cast
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5
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Advisory (Non-binding) Vote to Approve 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, re-elect five Class I directors of Seacoast. All of the nominees 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”). If elected, each director nominee will serve a three year term expiring at the 2021 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.
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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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Jacqueline L. Bradley
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60
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2014
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Management and Financial Services
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✔
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0
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H. Gilbert Culbreth, Jr.
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72
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2008
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CEO and President of Auto and other sales companies
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✔
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0
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Christopher E. Fogal
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66
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1997
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Certified Public Accountant and Partner of Firm
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✔
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0
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Timothy S. Huval
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51
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2016
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CHRO of Humana, Inc.
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✔
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0
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Herbert A. Lurie
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57
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2016
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Senior Advisor of Guggenheim Securities
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0
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Board
and Governance Highlights
Board Committee Membership and 2017 Committee Meetings
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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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✔
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✔
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(2)
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✔
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Stephen E. Bohner
(1)
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✔
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Jacqueline L. Bradley
(1)
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✔
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H. Gilbert Culbreth, Jr.
(1)
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✔
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(2)
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Julie H. Daum
(1)
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✔
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Christopher E. Fogal
(1)
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✔
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(2)
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Maryann Goebel
(1)
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✔
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✔
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✔
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Roger O. Goldman
(1) (3)
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Dennis S. Hudson, Jr.
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✔
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Dennis S. Hudson, III
(4)
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✔
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Timothy S. Huval
(1)
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✔
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✔
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Herbert A. Lurie
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✔
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Alvaro J. Monserrat
(1)
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✔
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✔
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Thomas E. Rossin
(1)
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✔
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✔
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(2)
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TOTAL MEETINGS HELD
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8
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5
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6
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9
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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 2017.
Board
Composition
Over the past five 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 seven new directors 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 five years:
Currently, our board has
the following characteristics:
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Seacoast Policy:
Ensure a balanced mix of directors with a deep knowledge of Seacoast and its markets, as well as new members with fresh perspectives.
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Seacoast Policy:
Build a diverse board with experience aligned with our strategic mission.
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Since 2013, we have made
the following changes to the Board:
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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;
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·
|
transitioned
four retiring long-tenured directors; and
|
|
|
·
|
reduced
the average tenure of our non-executive directors from 13.7 years to 9.4 years and decreased the average age by nearly 5.8 years.
|
Our
Corporate Governance Framework
|
Board Independence
|
·
A
total of 11 of our 14 directors, or over 75% are considered independent.
·
Our
CEO is the only member of management who serves as a director.
|
|
Board Refreshment & Diversity
|
·
We
seek a board that, considered as a group, will possess a diversity of experience and 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 9.4 years.
|
|
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.
|
|
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, and assists with its leadership assessment
and CEO succession planning.
|
|
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
|
·
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
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,
Alvaro J. Monserrat and Thomas E. Rossin. Our governance principles provide that a substantial majority of our directors will meet
the criteria for independence required by Nasdaq. Over 78% of our Board meets our criteria for independence.
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 20 years, Chairman for the past 13 years, President for the 10 years prior to being named
Chairman, and has also served as Chief Executive Officer of the Bank for the past 25 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 $5.8 billion in assets and 51
full-service branches and five commercial banking centers in 15 counties as of year-end 2017. 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, 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.
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 the Board and our Shareholders.
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 are 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
|
|
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 four times in executive session in
2017.
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’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 2017 annual meeting increased compared to the prior year. (See
“Outcome of our 2017 Say-On-Pay vote” in the table below.) Shareholder support of directors standing for re-election
at the 2017 annual meeting also increased compared to the prior year.
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 2017 earnings target of $1.28 fully diluted adjusted earnings per share
1
(“EPS”). Improved adjusted efficiency ratio
1
from 64.6% in fourth quarter of 2016 to 57.0% in the fourth quarter of 2017.
|
|
Greater stock ownership by management and directors
|
Replacing Cash Bonuses with Equity.
Replaced 2016 and 2017 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 capital raise in 2017.
|
|
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 appointed 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.
|
|
Outcome of our 2017 Say-On-Pay vote
|
At our 2017 annual meeting of shareholders, our say-on-pay proposal received the support of 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 programs and welcomes input from our shareholders.
|
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.
1
Non-GAAP
measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
The Board and individual
Board members may advise, meet with 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
|
|
Chairman and CEO
|
|
|
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
|
|
|
·
Over 40 years of banking experience with Seacoast
|
|
Age:
62
Education:
MBA,
Florida State
University
Tenure:
41 years
|
|
OTHER AFFILIATIONS/CERTIFICATIONS:
|
|
|
·
Chesapeake Utilities Corporation, member of board, audit and compensation committees
|
|
|
·
Miami Branch of Federal Reserve Bank of Atlanta Board from 2005 to 2010
|
|
|
·
PENN Capital Funds, a mutual fund group managed by PENN Capital Management, independent director
|
|
|
·
Serves on boards of Martin Health System and Community Foundation for Palm Beach and Martin counties
|
Charles M. Shaffer
|
|
EVP, CFO and Head of Strategy
|
|
|
SELECT PRIOR EXPERIENCE:
|
|
|
·
EVP and Community Banking Executive 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
|
Age:
44
Education:
MBA,
University of Central
Florida
Tenure:
20 years
|
|
OTHER AFFILIATIONS/CERTIFICATIONS:
|
|
|
·
CPA licensed in Florida
|
|
|
·
Chartered
Global Management Accountant
|
|
|
·
United
Way of Martin County, Board member
|
|
|
·
Girl
Scouts of Southeast Florida, Board member
|
|
|
·
Florida Bankers Association, Government Relations Committee Member
|
|
|
·
Armellini
Logistics Corporation, Board Member
|
Charles K. Cross,
Jr.
|
|
EVP of Commercial Banking
|
|
|
SELECT PRIOR EXPERIENCE:
|
|
|
·
Seacoast’s SVP & Commercial Market Executive for Palm Beach County from March 2012 to July 2013
|
|
|
·
Over 30 years of banking experience in Palm Beach and Broward County markets
|
|
|
·
Market
leader for EverBank in Palm Beach County, FL from August 2010 to March 2012
|
Age:
60
Education:
BSBA,
University of Florida
Tenure:
6 years
|
|
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
|
|
EVP and Chief Risk Officer
|
|
|
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
|
Age:
57
Education:
MBA,
The Stonier Graduate
School of Banking
Tenure:
8 years
|
|
|
|
|
OTHER AFFILIATIONS/CERTIFICATIONS:
·
Member
of audit & compliance committee of Martin Health System, Stuart, FL
|
Juliette P. Kleffel
|
|
EVP and Community Banking Executive
|
|
|
SELECT PRIOR EXPERIENCE:
|
|
|
·
EVP and Community Banking Executive since January 2017
|
|
|
·
EVP and Commercial Sales Leader for BankFIRST prior to acquisition by Seacoast in October 2014
|
|
|
·
Held various positions managing Government Lending/SBA, Treasury Sales, Marketing, as well as Commercial Lending with BankFIRST since November 2000
|
|
|
·
Over 20 years of retail banking experience in the Orlando Market
|
|
|
|
Age:
47
Education:
The Stonier
Graduate School of Banking
Tenure:
3 years
|
|
OTHER AFFILIATIONS/CERTIFICATIONS:
|
|
|
·
Executive Director for the National Entrepreneur Center
|
|
|
·
Director for the West Orange County Chamber of Commerce
|
|
|
·
Board Member for the Central Florida YMCA Finance Committee, Garden Theatre, The Gardens of DePugh Nursing Home, and Edgewood Children’s Ranch
|
|
|
·
Certified Lender Business Banker
|
Management Stock Ownership
As of the Record Date,
based on available information, all directors, director nominees and executive officers of Seacoast as a group (18 persons) beneficially
owned approximately [●] outstanding shares of common stock, constituting [●]% 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 [●] outstanding shares, or [●]% 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 2017, no shareholder nominee
recommendations were received.
Board Evaluation Process
Periodically, 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 as 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.
|
BOARD
MEETINGS AND COMMITTEES
Board Meeting Attendance
The Board of Directors
held four regular meetings and six special meetings during 2017. Each 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
Six of the 14 then-incumbent
Directors attended the Company’s 2017 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
|
Membership:
|
Christopher E. Fogal (Chair), Dennis J. Arczynski, Maryann Goebel, Alvaro J. Monserrat
|
|
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 eight meetings in 2017. Following these meetings, the Audit Committee met one time in private session with our independent auditor, and one time 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”)
|
Membership:
|
H. Gilbert Culbreth, Jr. (Chair), Julie H. Daum, Maryann Goebel and Timothy S. Huval
|
|
Responsibilities:
|
·
determines
the compensation of the Company’s and the Bank’s key executive officers;
·
oversees
the preparation of the “compensation discussion and analysis” portion of the proxy statement and the “Compensation
and Governance Committee Report”;
·
administers
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 five meetings in 2017.
|
|
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 interlocks under the rules of the SEC.
|
Enterprise
Risk Management Committee (“ERMC”)
|
Membership:
|
Dennis J. Arczynski (Chair), Stephen E. Bohner, Maryann Goebel, Dennis S. Hudson, Jr. and Thomas E. Rossin
|
|
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 six meetings in 2017.
|
Strategy
and Innovation (“S&I”) Committee
|
Membership:
|
Thomas
E. Rossin (Chair), Dennis J. Arczynski, Jacqueline L. Bradley, Dennis S. Hudson, III, Timothy S. Huval, Herbert A. Lurie, and
Alvaro J. Monserrat
|
|
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 nine meetings in 2017.
|
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 our
strategies and our implementation of such 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 or cybersecurity breaches; 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 assesses
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 four directors, Christopher E. Fogal (Chair), Dennis J. Arczynski Maryann Goebel, and Alvaro J. Monserrat.
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, 2017 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 eight meetings in
2017.
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, 2017. 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, 2017, for filing with the Securities and Exchange Commission.
The Audit Committee:
Christopher E. Fogal, Chairman
Dennis J. Arczynski
Maryann Goebel
Alvaro J. Monserrat
February 28, 2018
OWNERSHIP OF OUR COMMON STOCK
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,
[●] 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
|
|
|
|
|
|
|
|
BlackRock, Inc.
55 East 52
nd
Street
New York, NY 10055
|
|
6,156,934
(2)
|
|
13.1%
|
|
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202
|
|
4,313,495
(1)
|
|
9.1%
|
(1)
According
to a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) on March 8, 2018 with the SEC with respect to Seacoast common
stock beneficially owned as of February 28, 2018, BlackRock, Inc. has sole voting power with respect to 6,073,777 shares of Seacoast
common stock and sole dispositive power with respect to 6,156,934 shares of Seacoast common stock. The Schedule 13G/A provides
that BlackRock is a parent holding company and that the shares of common stock listed on the Schedule 13G/A 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.
(2)
According
to a Schedule 13G filed jointly by T. Rowe Price Associates, Inc., (“Price Associates”) and T. Rowe Price Funds on
February 14, 2018 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2017, T. Rowe Price
Associates, Inc. has sole voting power with respect to 664,396 shares of Seacoast common stock and sole dispositive power with
respect to 4,313,495 shares of Seacoast common stock. The Schedule 13G provides that Price Associates is an Investment Advisor
and that the shares of common stock listed on the Schedule 13G are owned by various subsidiaries of Price Associates. In addition,
Price Associates reported that in respect to securities owned by any one of the T. Rowe Funds, only the custodian has 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 person has shared voting and dispositive powers with respect to the following number of shares of Seacoast
common stock.
Ownership
of Directors and Executive Officers
|
Name of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership
|
|
|
Percentage
|
|
|
Dennis J. Arczynski
|
|
|
46,332
(1)
|
|
|
|
*
|
|
|
Stephen E. Bohner
|
|
|
55,965
(2)
|
|
|
|
*
|
|
|
Jacqueline L. Bradley
|
|
|
18,467
(3)
|
|
|
|
*
|
|
|
H. Gilbert Culbreth, Jr.
|
|
|
71,292
(4)
|
|
|
|
*
|
|
|
Julie H. Daum
|
|
|
48,422
(5)
|
|
|
|
*
|
|
|
Christopher E. Fogal
|
|
|
32,588
(6)
|
|
|
|
*
|
|
|
Maryann Goebel
|
|
|
21,076
(7)
|
|
|
|
*
|
|
|
Roger O. Goldman
|
|
|
250,430
(8)
|
|
|
|
*
|
|
|
Dennis S. Hudson, Jr.
|
|
|
325,068
(9)
|
|
|
|
*
|
|
|
Dennis S. Hudson, III
|
|
|
479,276
(10)
|
|
|
|
1.0%
|
|
|
Timothy S. Huval
|
|
|
2,768
(11)
|
|
|
|
*
|
|
|
Herbert A. Lurie
|
|
|
30,226
(12)
|
|
|
|
*
|
|
|
Alvaro J. Monserrat
|
|
|
6,902
(13)
|
|
|
|
*
|
|
|
Thomas E. Rossin
|
|
|
19,750
(14)
|
|
|
|
*
|
|
|
Charles K. Cross, Jr.
|
|
|
70,015
(15)
|
|
|
|
*
|
|
|
David D. Houdeshell
|
|
|
61,419
(16)
|
|
|
|
*
|
|
|
Juliette P. Kleffel
|
|
|
14,179
(17)
|
|
|
|
*
|
|
|
Charles M. Shaffer
|
|
|
60,089
(18)
|
|
|
|
*
|
|
|
All directors and executive officers as a group (18 persons)
|
|
|
1,424,700
|
|
|
|
[●]%
|
|
* 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 25,988 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 17,215 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 9,800 shares held in IRA and 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 7,046 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 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
11,950 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.
|
|
|
(5)
|
Includes 15,442 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.
|
|
|
(6)
|
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 10,438 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.
|
|
|
(7)
|
Includes 9,515 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.
|
|
|
(8)
|
Includes 7,660 shares held in IRAs, as to which shares
Mr. Goldman shares both voting and investment power with his wife. Also includes 42,344 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 175,561 shares that Mr. Goldman has the right to acquire by exercising options that are exercisable
within 60 days after the Record Date.
|
|
|
(9)
|
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 9,811 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.
|
|
|
(10)
|
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, of which 49,060 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 30,453 shares held in the Company’s
Retirement Savings Plan, and 121,201 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.
|
|
|
(11)
|
Includes 2,688 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.
|
|
|
(12)
|
Includes 5,840 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 and 4,386 shares that Mr. Lurie has the right to acquire by exercising options that are exercisable within
60 days after the Record Date.
|
|
|
(13)
|
Includes 1,760 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. Monserrat has no voting
or dispositive power and 2,142 shares that Mr. Monserrat has the right to acquire by exercising options that are exercisable within
60 days after the Record Date.
|
|
|
(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 9,811 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 50,140 shares that Mr. Cross has the right to
acquire by exercising options that are exercisable within 60 days after the Record Date.
|
|
|
(16)
|
Includes 42,757 shares that Mr. Houdeshell has the right
to acquire by exercising options that are exercisable within 60 days after the Record Date.
|
|
|
(17)
|
Includes 7,791 shares that Ms. Kleffel 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 844 shares held in the
Company’s Retirement Savings Plan and 2,257 shares held in the Company’s Employee Stock Purchase Plan. Also includes
39,575 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
2017
Performance Considerations
Our strategic plan for 2017 focused on
shareholder value creation, and the CGC once again used adjusted EPS
1
as an indicator
that management is on the right path. The CGC determined the amount of annual and long-term incentives to award to our named executive
officers (“NEOs”) for 2017 performance using a qualitative assessment of management’s performance. The assessment
process included scorecards that identified shared and individual goals for the year, with our adjusted EPS target of $1.28 serving
as the primary consideration. Based on the CGC’s assessment of our adjusted EPS performance and in the areas of operations,
technology, innovation, risk, talent, and business transformation, our NEO’s received a rating of “exceeds” expectations.
The incentive awards issued based on 2017 performance were granted in 2018. Grants made in 2017 were based on the scorecard assessment
of performance in the prior year.
Our Executive
Compensation Design Priorities and Prohibitions
|
Design Priorities (what we do)
|
Design Prohibitions (what we don’t do)
|
|
ü
Manage
our executive compensation programs to have a strong pay-for-performance orientation
ü
Link
performance-based incentive awards to enterprise-wide and individual performance goals.
ü
Grant
our NEOs equity-based awards based on Company and individual performance rather than paying annual cash bonuses.
ü
Emphasize
long-term stock-based awards in our executive compensation and total incentive strategies.
ü
Set
meaningful performance goals that align management with shareholder interests.
ü
Ensure that incentives are sensitive to risk considerations.
ü
Provide
minimal executive benefits and perquisites.
ü
Maintain
executive stock ownership requirements, and require post-settlement holding periods or mandatory deferral of certain performance-based
awards.
ü
Provide
reasonable executive post-employment and change-in-control protections.
ü
Require
“clawback” provisions for certain incentive-based compensation to ensure accountability.
ü
Engage
with shareholders on their concerns or priorities for our director and executive compensation programs.
|
û
No
repricing of stock options without shareholder approval.
û
No
incentives that encourage improper risk taking.
û
No
excise tax gross-ups upon a change in control.
û
No
single trigger vesting acceleration on unvested equity in connection with a change-in-control for awards granted since 2014.
û
No
hedging, and limited pledging, of our common shares by our directors and executive officers.
|
1
Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
2017
NEO Pay
|
|
·
|
Cumulative base salaries for our NEOs
increased year-over-year by 6%.
|
|
|
·
|
In 2017, our NEOs received awards of Performance
Share Units (“PSUs”) that vest based on the level of achievement of goals relating to growth in adjusted EPS and average
adjusted return on average tangible common equity over a three-year period.
|
|
|
·
|
In 2017, our NEOs received stock options
that vest over a three-year period. The exercise price of the options was set at 120% of the grant date value of the shares.
|
|
|
·
|
In lieu of cash bonuses, our CEO was granted
additional PSUs, and our other NEOs received awards of time-based Restricted Stock Units (“RSUs”) that vest over a
three-year period.
|
|
|
·
|
The number of PSUs, stock options, and
RSUs granted in 2017 was determined by the CGC based upon the scorecard assessment of 2016 performance. Awards granted based upon
2017 scorecard performance were granted in 2018. The CGC will use the grant date value of the PSUs or RSUs issued in lieu of cash
bonuses for purposes of calculating any potential severance benefits that are based upon prior year bonuses.
|
Summary
of Compensation Decisions in 2017
For planning purposes, the CGC focuses
on the sum of annual base salary and the values it considers and approves for cash bonuses and equity awards based on annual scorecard
performance but granted in the subsequent year. We refer to this planning value as Total Direct Compensation or “TDC”.
The CGC considered TDC in its decision process when determining the value of the total incentive award value to approve in 2018
for 2017 performance.
The following chart illustrates the relative
emphasis of each pay element in relation to TDC, as disclosed in our 2017 Summary Compensation Table (“SCT”). Base
salary represents the sole component of TDC that is not “at risk” for performance.
In general, the CGC typically structures
NEO pay so that at least one-half of TDC is structured as “at risk” incentive pay. 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.
Base
Salary
All of our named-executive officers receive
a base salary that reflects the CGC’s assessment of the NEO’s skills and value to Seacoast. It is the CGC’s philosophy
to keep salaries within a competitive market range and 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. The 2017 annualized base salary actions for our named executive officers
are summarized in the following table.
2017 Annualized Base Salary Actions
|
Named Executive Officer
|
|
2016
|
|
|
2017
|
|
|
% Change
|
|
|
Dennis S. Hudson, III
|
|
$
|
550,000
|
|
|
$
|
600,000
|
|
|
|
9
|
%
|
|
Charles K. Cross, Jr.
|
|
$
|
300,000
|
|
|
$
|
300,000
|
|
|
|
0
|
%
|
|
David D. Houdeshell
|
|
$
|
265,000
|
|
|
$
|
280,000
|
|
|
|
6
|
%
|
|
Charles M. Shaffer
|
|
$
|
300,000
|
|
|
$
|
320,000
|
|
|
|
7
|
%
|
|
Juliette P. Kleffel
|
|
|
—
|
|
|
$
|
280,000
|
|
|
|
—
|
|
|
NEOs as a Group
|
|
|
|
|
|
|
|
|
|
|
6
|
%
|
Equity
Awards
Seacoast’s equity strategy has evolve
in order to increase the alignment of equity recipients with shareholder interests, revitalize our retention strategies, and elevate
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 2013.
Evolution of Seacoast’s Performance-based
Equity Strategies, 2013-2017
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
on Average Tangible Common Equity
·
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
on Average Tangible Common Equity
·
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
|
|
2017 (Apr.)
|
PSUs
|
·
3-year
Performance Period
·
Payout
as a % of Target 0-200%
|
·
Adjusted
EPS
·
Return
on Average Tangible Common Equity
·
Tier
1 Capital Compliance
|
|
Options
|
·
3-year
ratable vesting
·
Exercise
price set at 120% of grant date fair market value of the underlying shares
|
·
Stock Price Appreciation above 120% of exercise price
|
2017
Performance Stock Unit (“PSU”) Awards
2017 PSUs represent stock-settled incentive
awards where payout can vary from 0% to 200% of the target number of shares granted. One-half of the target number of shares will
be earned for Seacoast’s three-year growth in adjusted EPS. The remaining one-half of the target number of shares will be
earned for Seacoast’s three-year average adjusted return on average tangible common equity. In each case, the earn-out of
the PSUs will be determined by our performance as compared to financial goals that were approved by the CGC at the time of grant.
PSUs that will be earned for adjusted EPS require escalating levels of double digit growth, starting at threshold. PSUs that will
be earned for adjusted return on tangible common equity require that we exceed our cost of capital. The CGC selected EPS and return
on average tangible common equity given their importance in our strategic plan and influence on our stock price performance over
sustained periods of time. The PSUs also include a risked-based condition (Tier 1 Regulatory Capital) that must be met in order
for the awards to vest.
2017
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 shareholders benefit before management realizes
any value from their stock option awards, 2017 options were issued with an exercise price set at 120% of the grant date fair market
value of the underlying shares. Restrictions on the 2017 options lapse in equal installments on the first, second and third anniversaries
of the grant date. The CGC relies on Options to reward management for value creation, which is of paramount importance to our shareholders.
The target value of the options represents significantly less potential value than the PSU awards.
Time-Based
Restricted Stock Units (“RSU”)
Given our strong pay-for-performance orientation,
we typically limit the use of time-based RSUs 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.
The CGC granted RSUs to the NEOs, other than the CEO, in lieu of annual cash bonuses. The RSUs granted in 2017 were issued in relation
to 2016 performance. The RSUs relating to 2017 performance were granted in early 2018.
Other
Considerations Involving 2017 Equity Awards
Our NEOs are also subject to stock ownership
requirements and holding periods in connection with stock-settled incentive awards. In addition, we introduced a mandatory deferral
on PSUs starting with the 2017 grant cycle.
Overview
of Executive Compensation
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.
|
Role and Independence of the Compensation
Consultant
The CGC is comprised solely of independent
directors and met six times in 2017. The Committee selected Compensation & Benefit Solutions, LLC, which was acquired by Alvarez
and Marsal on November 1, 2017, to advise the CGC in 2017. Starting in March 2017, Compensation & Benefit Solutions, LLC 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. The
CGC discussed these considerations pursuant to SEC and NASDAQ rules and concluded that the engagement of Compensation & Benefit
Solutions, LLC, and subsequently Alvarez and Marsal, 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 CGC added five banks to the Core Bank
Peer Group (“Peer Group”) in 2017. The addition of Flagstar Bancorp, Inc., First Midwest Bancorp, Inc., Trustmark Corporation,
Northwest Bancshares, Inc., and S&T Bancorp, Inc. was necessitated by continuing consolidation in the industry, and by our
growth that positioned Seacoast above the Peer Group’s median level of assets. The five banks were selected from the JD Powers’
List of Highest Rated Customer Service Banks, which reflected the CGC’s desire to incorporate an important performance dimension
that is critical to our efforts to continue to growth the value of Seacoast. Other selection criteria that the CGC considered included
type of ownership, focused solely on publicly traded company status, and size considerations, as defined by assets and the market
value of equity. Seacoast was positioned at the median of asset size and market value of the 2017 Peer Group. The CGC sees this
approach as appropriate given its expectations for performance and growth. Our 2017 Core Bank Peer Group was comprised of:
|
Ameris Bancorp (ABCB)
|
First Long Island Corp. (FLIC)
|
Pacific Premier Bancorp (PPBI)
|
|
BNC Bancorp (BNCN)
|
First Midwest Bankcorp, Inc. (FMBI
|
Renasant Corp. (RNST)
|
|
Cardinal Financial (CFNL)
|
German American Bancorp (GABC)
|
S&T Bancorp, Inc. (STBA)
|
|
City Holdings (CHCO)
|
Great Southern Bancorp (GSBC)
|
Sterling Bancorp (STL)
|
|
Eagle Bancorp (EGBN)
|
Horizon Bancorp (HBNC)
|
Stock Yards Bancorp (SYBT)
|
|
Enterprise Financial (EFSC)
|
Lakeland Financial (LKFN)
|
Tompkins Financial (TMP)
|
|
Fidelity Southern (LION)
|
Mainsource Financial (MSFG)
|
Trustmark Corporation (TRMK)
|
|
Flagstar Bancorp, Inc. (FBC)
|
Northwest Bancshares, Inc. (NWBI)
|
Washington TR Bancorp (WASH)
|
The CGC does not identify a specific target
level or percentile of base salary, incentive cash, or stock-based awards for our NEOs. 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.
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
RSUs were issued in lieu of cash bonuses
for fiscal years 2016 and 2017
|
|
EQUITY:
|
|
|
·
Performance-based,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
·
3-year
PSU performance period aligning program design with typical industry practices. A mandatory 12-month deferral requirement ensures
sensitivity to risk considerations and additional holding power.
·
Risk
considerations serve as an additional vesting requirement on PSUs
|
·
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 management
·
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
|
2017
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.
Despite refinements to various aspects of our executive compensation philosophy and the underlying strategies for 2017, 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.
Our CEO works closely with the Compensation
Committee in establishing executive compensation and overall bonus and incentive payments. The CEO evaluates the performance of
the other senior executives, and, based on these performance evaluations, market compensation surveys, and other data, he will
then make recommendations to the Compensation Committee and shares with its members the basis for his recommendations. The CEO
also presents incentive compensation payment recommendations for the Committee’s consideration. The Committee evaluates the
CEO’s performance and determines his compensation without the CEO present.
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 2017
Dennis.
S. Hudson, III, Chairman of the Board and Chief Executive Officer
|
Key Influences in the CGC’s Decision Process
|
2017 Pay Outcomes
|
|
·
Achievement
of adjusted EPS
1
goal of $1.28 for FY17; leading contributor to our efforts to attain this goal to the benefit of our
shareholders
·
Adjusted
net income of $55.3 million compared to $39.1 million in 2016
·
Adjusted
return on tangible common equity
1
for 4Q17 of 13.5%, compared to 13.1% in 2016
·
Strengthening
of the executive team and other improvements in key operating areas
·
Strong
credit quality and appropriate risk management
·
No
major 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 Gulfshore, Northstar, and Palm Beach Community 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
|
·
Annualized Base Salary increase to
$600,000 effective April 1, 2017 compared to an annualized 2016 Base Salary of $550,000
·
Performance-based
equity (PSU granted in 2017) valued at $533,000 compared to $357,500 in 2016
·
Performance
Option valued at $287,000 compared to $192,500 in 2016
·
All
Other Compensation of $32,685
·
Bonus equivalent cash value of $[●]
to be used as an input in our CIC severance calculations.
|
1 Non-GAAP measure; refer to Appendix
A – Information Regarding Non-GAAP Financial Measures.
Compensation
Paid to Other Named Executive Officers in 2017
Charles
M. Shaffer, Executive Vice President, Chief Financial Officer
|
Key Influences in the CGC’s Decision Process
|
2017 Pay Outcomes
|
|
·
Achievement
of adjusted EPS
1
goal of $1.28 for FY17
·
Adjusted
net income of $55.3 million compared to $39.1 million in 2016
·
Adjusted
return on tangible common equity
1
for 4Q17 of 13.5%, compared to 13.1% in 2016
·
Ongoing
leadership of and contributions to our business transformation and strategy efforts
·
Substantial
talent upgrading across entire function
|
·
Annualized
Base Salary increase to $320,000 effective April 1, 2017 compared to an annualized 2016 Base Salary of $300,000
·
RSUs
with a target award value of $280,000 granted in lieu of a cash bonus compared to $259,000 in 2016
·
Performance-based
equity (PSU granted in 2017) valued at $195,000 compared to $146,250 in 2016
·
Performance
Option valued at $105,000 compared to $78,750 in 2016
·
All
Other Compensation of $20,107
·
Bonus
Equivalent Cash Value of $200,000 to be used as an input in our CIC severance calculations
|
1 Non-GAAP measure; refer to Appendix
A – Information Regarding Non-GAAP Financial Measures.
Charles
K. Cross, Jr., Executive Vice President, Commercial Banking
|
Key Influences in the CGC’s Decision Process
|
2017 Pay Outcomes
|
|
·
Achievement
of adjusted EPS
1
goal of $1.28 for FY17
·
Adjusted
net income of $55.3 million compared to $39.1 million in 2016
·
Adjusted
return on tangible common equity
1
for 4Q17 of 13.5%, compared to 13.1% in 2016
·
No
major operational risk failures
·
Contributions
to enterprise-wide business transformation efforts
·
Collaboration
and leadership across the organization leading to substantial improvements in business unit performance. improvements regarding
sales function
·
Development
and successful implementation of talent and staffing initiatives
·
Successful
integration of three acquisition targets.
|
·
No
Base Salary increase.
·
RSUs
with a target award value of $210,000 granted in lieu of a cash bonus was unchanged compared to 2016
·
Performance-based
equity (PSU granted in 2017) valued at $169,000 was unchanged compared to 2016
·
Performance
Option valued at $91,000 was unchanged compared to 2016
·
All
Other Compensation of $22,064
·
Bonus
Equivalent Cash Value of $150,000 to be used as an input in our CIC severance calculations
|
1 Non-GAAP measure; refer to Appendix
A – Information Regarding Non-GAAP Financial Measures.
David D.
Houdeshell, Executive Vice President, Chief Risk Officer
|
Key Influences in the CGC’s Decision Process
|
2017 Pay Outcomes
|
|
·
Achievement
of adjusted EPS
1
goal of $1.28 for FY17
·
Adjusted
net income of $55.3 million compared to $39.1 million in 2016
·
Adjusted
return on tangible common equity
1
for 4Q17 of 13.5%, compared to 13.1% in 2016
·
No
major operational risk failures
·
Contributions
to enterprise-wide business transformation efforts
·
Effective
partnering with other functions in the development and launch of new products and services
·
Substantial
focus and improvement in unit associate engagement scores
·
Talent
build out and oversight in governance areas
·
Continues
to maintain credit quality metrics in a rapid growth environment,
|
·
Annualized
Base Salary increase to $280,000 effective April 1, 2017 compared to an annualized 2016 Base Salary of $265,000
·
RSUs
with a target award value of $168,000 granted in lieu of a cash bonus compared to $140,000 in 2016
·
Performance-based
equity (PSU granted in 2017) valued at $113,750 compared to $91,000 in 2016
·
Performance
Option valued at $61,250 compared to $49,000 in 2016
·
All
Other Compensation of $11,070
·
Bonus
Equivalent Cash Value of $120,000 to be used as an input in our CIC severance calculations
|
1 Non-GAAP measure; refer to Appendix
A – Information Regarding Non-GAAP Financial Measures.
Juliette
P. Kleffel, Executive Vice President, Community Banking
|
Key Influences in the CGC’s Decision Process
|
2017 Pay Outcomes
|
|
·
Achievement
of adjusted EPS
1
goal of $1.28 for FY17
·
Adjusted
net income of $55.3 million compared to $39.1 million in 2016
·
Adjusted
return on tangible common equity
1
for 4Q17 of 13.5%, compared to 13.1% in 2016
·
No
major operational risk failures
·
Contributions
to enterprise-wide business transformation efforts
·
Organizational
realignment achieved while achieving substantial gains in new organizational units.
·
Executive
role model and champion of the customer experience.
·
Successful
integration of three acquisitions
|
·
Annualized
Base Salary increase to $280,000 effective April 1, 2017 compared to an annualized 2016 Base Salary of $197,000
·
RSUs
with a target award value of $196,000 granted in lieu of a cash bonus compared to $119,000 in 2016
·
Performance-based
equity (PSU granted in 2017) valued at $172,200 compared to $39,000 in 2016
·
Performance
Option valued at $83,340 compared to $18,858 in 2016
·
All
Other Compensation of $16,195
·
Bonus
Equivalent Cash Value of $140,000 to be used as an input in our CIC severance calculations
|
1 Non-GAAP measure; refer to Appendix
A – Information Regarding Non-GAAP Financial Measures.
Other
Elements of the 2017 Compensation Program for Executive Officers
Change
in Control Severance Benefits
We provide change in control severance
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 “2017
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 occurs.
In response to the unintended negative
consequence created by granting equity awards in lieu of cash bonuses for 2016 and 2017 performance, the CGC determined that the
severance would be calculated using the same bonus cash equivalent values that it relied on in determining the value of RSU awards.
Change-in-control severance benefits attributable
to cash bonuses for Mr. Hudson reflect the highest value payment he receives during the three-years prior to a transaction. Change-in-control
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 change-in-control and job loss must occur within a stated period of time before
our executives will be eligible to receive change-in-control 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 2017, the
Company paid a total of $5,080 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 Incentive
Compensation Plans
The CGC reviews the sensitivity of our
performance and incentives to risk considerations for our executives throughout the year. It also periodically reviews our cash
and equity incentive strategies for other key contributors. In 2017, the CGC with the assistance of our Chief Human Resources Officer
completed a review of our incentive strategies for our incentive eligible non-executive employees. The CGC concluded that our incentive
compensation programs are designed with the appropriate balance of risk and reward in relation to our overall business strategy
and will not motivate people to take excessive or imprudent risks.
Risk Analysis of Retail Sales
Incentive Plans
During 2016, Seacoast launched a proactive
review program of our retail sales incentive plans; this program includes ongoing monitoring for anomalies, review of complaints,
and interviews with associates. Independent assessment is completed by the Bank’s Operational Risk Officer and results are
reported to the Bank’s Operational Risk & Compliance Committee. Based on data gathered throughout the year, we believe
Seacoast is acting in customers’ best interests and that Seacoast’s customer-first culture is sound. Seacoast empowers
associates to do the right thing and to deliver our promise to customers to “get you comfortable with the right products
and the right team to serve you.” At the same time, quality control and risk management are constant priorities. We
have ongoing review processes to promptly identify areas that may be potentially inconsistent with our customer-first posture.
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 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:
|
Individual/Group
|
Stock Ownership Target
|
Holding Requirement
|
|
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 five 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.
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. Prior to
enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), this limitation did not generally apply to compensation
paid to the chief financial officer or to compensation paid based on achievement of pre-established performance goals if certain
requirements were met. The exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed,
effective for taxable years beginning after December 31, 2017, such that compensation paid to all of our named executive officers
in excess of $1 million in 2018 and future years will not be deductible unless it qualifies for transition relief applicable to
certain arrangements in place as of November 2, 2017. The CGC reserves the right to pay executives’ compensation that is
not deductible under Section 162(m).
Strategies
to ensure that Incentive Compensation is Sensitive to Risk Considerations
Seacoast implemented a number of changes
to our incentive strategies, starting with the 2015 equity award cycle. These strategies have been updated in response to shareholder
feedback and governance considerations. The CGC and our Chief Risk Officer share the view that our incentive strategies strike
the right balance between risk and reward, motivating and retaining our executives in ways that align with shareholder interests
but do not motivate inappropriate or excessive risk taking. The evolution of our incentive strategies reflect our commitment to
listen to our shareholders and continuously refine our programs to align with our governance and risk management efforts given
the growth of Seacoast and changes within the industry and what is deemed as best practice. Specifically:
|
Impetus for Change
|
Design Changes
|
|
Shareholder feedback that our executives needs to own more shares of Seacoast stock
|
RSUs were granted in lieu of cash bonuses for 2016 and 2017
performance
Performance period for new PSU awards starting in 2016 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 starting in April 2017
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 starting in April 2017 from cumulative earnings
with a modifier based on Return on Tangible Common Equity (“ROTCE”) to three-year compound annualized growth in adjusted
EPS and average return on tangible common equity, which our shareholders views as key indicators of our performance
Option performance feature modified starting in April 2017 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 Governance Committee
has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the
Compensation and Governance 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 2018 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
|
|
|
Timothy S. Huval
|
executive
COMPENSATION tables
2017
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.
Name and Principal
Position
|
|
Year
|
|
|
Salary
($)
(1)
|
|
|
Bonus
($)
(2)
|
|
|
Stock
Awards
($)
(3)
|
|
|
Option
Awards
($)
(3)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
All
Other
Compensation
($)
(4)
|
|
|
Total
($)
|
|
Dennis S. Hudson, III
Chairman & CEO of Seacoast and Bank
|
|
|
2017
2016
2015
|
|
|
|
587,500
550,000
537,852
|
|
|
|
—
—
100,000
|
|
|
|
532,954
357,489
454,049
|
|
|
|
359,677
175,881
39,773
|
|
|
|
—
—
—
|
|
|
|
32,685
33,530
42,434
|
|
|
|
1,512,816
1,116,900
1,174,108
|
|
Charles M. Shaffer
EVP, CFO of Seacoast and Bank
|
|
|
2017
2016
2015
|
|
|
|
315,000
287,499
248,333
|
|
|
|
—
—
100,000
|
|
|
|
453,955
146,244
204,606
|
|
|
|
131,588
71,952
17,923
|
|
|
|
—
—
—
|
|
|
|
20,107
19,901
22,218
|
|
|
|
920,650
525,596
593,080
|
|
Charles K. Cross, Jr.
EVP, Commercial Banking of Bank
|
|
|
2017
2016
2015
|
|
|
|
300,000
293,750
273,333
|
|
|
|
—
—
125,000
|
|
|
|
378,974
168,992
249,443
|
|
|
|
114,042
83,144
21,850
|
|
|
|
—
—
—
|
|
|
|
22,064
23,165
29,285
|
|
|
|
815,080
569,051
698,911
|
|
David D. Houdeshell
EVP & Chief Risk Officer of Seacoast and Bank
|
|
|
2017
2016
2015
|
|
|
|
276,250
265,000
262,500
|
|
|
|
—
—
75,000
|
|
|
|
253,709
90,995
163,559
|
|
|
|
76,757
44,769
14,327
|
|
|
|
—
—
—
|
|
|
|
11,070
11,141
17,911
|
|
|
|
617,786
411,905
533,297
|
|
Juliette P. Kleffel
EVP, Community Banking of Bank
|
|
|
2017
|
|
|
|
259,250
|
|
|
|
—
|
|
|
|
255,335
|
|
|
|
83,340
|
|
|
|
—
|
|
|
|
16,195
|
|
|
|
614,120
|
|
|
|
(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 FY17 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 2018 and, pursuant to proxy rules, are not reported in 2017 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, 2017. 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 2017 Compensation Program for Executive Officers – Equity Awards.” See also “2017 Grants of Plan-Based
Awards” below.
|
Each of our
executive officers received PSUs. They also each received RSUs, with the exception of the CEO. 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
|
|
|
Maximum Value
|
|
|
Dennis S. Hudson, III
|
|
$
|
532,954
|
|
|
$
|
1,065,907
|
|
|
Charles M. Shaffer
|
|
|
194,962
|
|
|
|
389,924
|
|
|
Charles K. Cross, Jr.
|
|
|
168,995
|
|
|
|
337,992
|
|
|
David D. Houdeshell
|
|
|
113,715
|
|
|
|
227,432
|
|
|
Juliette Kleffel
|
|
|
172,200
|
|
|
|
332,229
|
|
2017
componEnts of all other compEnsation
|
Name
|
|
Company Paid
Contributions
to Retirement
Savings Plan
|
|
|
Company Paid
Contributions to
EDCP
(1)
|
|
|
Car
Allowance
|
|
|
Cell
Phone
Allowance
|
|
|
Other
Perquisites
|
|
|
Total
|
|
|
Dennis. S. Hudson, III
|
|
$
|
10,800
|
|
|
$
|
12,885
|
|
|
$
|
9,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
32,685
|
|
|
Charles M. Shaffer
|
|
$
|
9,107
|
|
|
$
|
2,000
|
|
|
$
|
9,000
|
|
|
|
|
|
|
|
—
|
|
|
$
|
20,107
|
|
|
Charles K. Cross, Jr.
|
|
$
|
10,800
|
|
|
|
—
|
|
|
$
|
9,000
|
|
|
$
|
180
|
|
|
$
|
2,084
|
(2)
|
|
$
|
22,064
|
|
|
David D. Houdeshell
|
|
$
|
10,800
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
270
|
|
|
|
—
|
|
|
$
|
11,070
|
|
|
Juliette P. Kleffel
|
|
$
|
9,175
|
|
|
|
—
|
|
|
$
|
6,750
|
|
|
$
|
270
|
|
|
|
—
|
|
|
$
|
16,195
|
|
|
|
(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
$10 for gym membership.
|
2017
GRANTS OF PLAN-BASED AWARDS
The following table sets forth certain
information concerning plan-based awards granted during 2017 to the named executive officers.
|
|
|
Grant
|
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards
|
|
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
|
|
|
All Other Option
Awards: Number
of Securities
Underlying
Options
|
|
|
Exercise
or Base
Price of
Option
Awards
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards
(1)
|
|
|
Name
|
|
Date
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)
|
|
|
Dennis S. Hudson, III
|
|
4/3/2017
|
|
|
5,572
|
|
|
|
22,290
|
|
|
|
44,580
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
$
|
532,954
|
|
|
|
|
4/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,021
|
(2)
|
|
|
28.69
|
|
|
|
|
|
|
Charles M. Shaffer
|
|
4/3/2017
|
|
|
2,038
|
|
|
|
8,154
|
|
|
|
16,308
|
|
|
|
10,832
|
|
|
|
|
|
|
|
|
|
|
|
453,955
|
|
|
|
|
4/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,544
|
(2)
|
|
|
28.69
|
|
|
|
|
|
|
Charles K. Cross, Jr.
|
|
4/3/2017
|
|
|
1,762
|
|
|
|
7,068
|
|
|
|
14,136
|
|
|
|
8,782
|
|
|
|
|
|
|
|
|
|
|
|
378,973
|
|
|
|
|
4/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,738
|
(2)
|
|
|
28.69
|
|
|
|
|
|
|
David D. Houdeshell
|
|
4/3/2017
|
|
|
1,189
|
|
|
|
4,756
|
|
|
|
9,512
|
|
|
|
5,855
|
|
|
|
|
|
|
|
|
|
|
|
253,709
|
|
|
|
|
4/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,650
|
(2)
|
|
|
28.69
|
|
|
|
|
|
|
Juliette P. Kleffel
|
|
4/3/2017
|
|
|
1,291
|
|
|
|
7,202
|
|
|
|
13,895
|
|
|
|
5,515
|
|
|
|
|
|
|
|
|
|
|
|
255,334
|
|
|
|
|
4/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,078
|
(2)
|
|
|
28.69
|
|
|
|
|
|
|
|
(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, 2017.
|
|
|
(2)
|
Option with two-tiered vesting as described under “Design
Highlights of Equity Awards Issued in FY17 – Performance Stock Options”. The performance criteria were met and option
began vesting in 1/3rd share annual increments on December 31, 2017, 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 CEO Hudson
On June 27, 2017, the Company and the Bank
entered into an amendment to an employment agreement between Dennis S. Hudson, III and Seacoast and the Bank dated December 18,
2014. The employment agreement dated December 18, 2014 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 amended agreement extends Mr. Hudson’s
employment under the agreement terms for a term of three 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 “2017 Other Potential Post-Employment Payments.”
Change in Control Agreements with Other
Named Executive Officers
The Company entered into a change in control
employment agreement with Ms. Kleffel on April 6, 2017. The CIC agreement with the Executive has an initial term of one year and
provides for automatic one-year extension 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:
|
|
o
|
cash severance equal to a one times multiple 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”);
|
|
|
o
|
a prorated final year bonus, based on the Executive’s Average Annual Performance Bonus; and
|
|
|
o
|
health and other welfare benefits, as defined in the agreement, for a period of time following
termination of 12 months.
|
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.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END 2017
The following table sets forth certain
information concerning outstanding equity awards as of December 31, 2017 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, 2017. Also reported are restricted stock units and restricted stock awards, and their market value, that had
not vested as of December 31, 2017.
|
|
|
Option
Awards
|
|
Stock Awards
|
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Option
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Option
(#)
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
Number
of
Shares or
Units of
Stock That
Have Not
Vested
(1)
(#)
|
|
|
Market
Value of
Shares or
Units
of
Stock That
Have
Not Vested
(2)
($)
|
|
|
Equity
incentive
plan awards:
number of
unearned shares,
units or other
rights that have
not vested
(#)
|
|
|
Equity
incentive
plan awards:
market or payout
value
of unearned
shares, units or
other
rights that
have not
vested
(2)
($)
|
|
|
D. Hudson, III
|
|
|
15,520
|
|
|
|
3,880
|
(3)
|
|
|
11.00
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(4)
|
|
|
—
|
|
|
|
10.54
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,220
|
|
|
|
6,755
|
(5)
|
|
|
12.63
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,086
|
|
|
|
37,870
|
(6)
|
|
|
14.82
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
78,021
|
(7)
|
|
|
23.91
|
|
|
04/03/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,394
|
(8)
|
|
$
|
539,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,950
|
(9)
|
|
$
|
906,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,122
|
(10)
|
|
|
608,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,145
|
(11)
|
|
|
280,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,145
|
(12)
|
|
|
280,965
|
|
|
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
|
Name
|
|
|
Number
of
Securities
Underlying
Unexercised
Option
(#)
Exercisable
|
|
|
|
Number
of
Securities
Underlying
Unexercised
Option
(#)
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
Number
of
Shares or
Units of
Stock That
Have Not
Vested
(1)
(#)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have
Not
Vested
(2)
($)
|
|
|
Equity
incentive
plan awards:
number of
unearned shares,
units or other
rights that have
not vested
(#)
|
|
|
Equity
incentive
plan awards:
market or payout
value of unearned
shares, units or
other rights that
have not
vested
(2)
($)
|
|
|
C. Shaffer
|
|
|
1,920
|
|
|
|
480
|
(3)
|
|
|
11.00
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)
|
|
|
—
|
|
|
|
10.54
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,040
|
|
|
|
3,060
|
(5)
|
|
|
12.63
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,785
|
|
|
|
15,470
|
(6)
|
|
|
14.82
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
28,544
|
(7)
|
|
|
28.69
|
|
|
04/03/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,170
|
(8)
|
|
|
205,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,200
|
(9)
|
|
|
408,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,868
|
(10)
|
|
|
248,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,832
|
(13)
|
|
|
273,075
|
|
|
|
4,077
|
(11)
|
|
|
102,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,077
|
(12)
|
|
|
102,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Cross, Jr.
|
|
|
1,920
|
|
|
|
480
|
(3)
|
|
|
11.00
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)
|
|
|
—
|
|
|
|
10.54
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,150
|
|
|
|
3,725
|
(5)
|
|
|
12.63
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,676
|
|
|
|
17,885
|
(6)
|
|
|
14.82
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
24,738
|
(7)
|
|
|
28.69
|
|
|
04/03/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
488
|
(14)
|
|
|
12,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,935
|
(8)
|
|
|
225,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,750
|
(9)
|
|
|
497,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,403
|
(10)
|
|
|
287,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,782
|
(13)
|
|
|
221,394
|
|
|
|
3,534
|
(11)
|
|
|
89,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,534
|
(12)
|
|
|
89,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Houdeshell
|
|
|
3,360
|
|
|
|
840
|
(3)
|
|
|
11.00
|
|
|
06/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)
|
|
|
—
|
|
|
|
10.54
|
|
|
04/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,020
|
|
|
|
2,455
|
(5)
|
|
|
12.63
|
|
|
01/29/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,600
|
|
|
|
9,625
|
(6)
|
|
|
14.82
|
|
|
02/29/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
16,650
|
(7)
|
|
|
28.69
|
|
|
04/03/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,916
|
(8)
|
|
|
224,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,950
|
(9)
|
|
|
326,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,140
|
(10)
|
|
|
154,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,855
|
(13)
|
|
|
147,605
|
|
|
|
2,378
|
(11)
|
|
|
59,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,378
|
(12)
|
|
|
59,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Kleffel
|
|
|
1,438
|
|
|
|
3,815
|
(6)
|
|
|
15.99
|
|
|
3/31/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
18,078
|
(7)
|
|
|
28.69
|
|
|
04/03/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,439
|
(15)
|
|
|
61,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,250
|
(16)
|
|
|
31,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
995
|
(17)
|
|
|
25,084
|
|
|
|
2,038
|
(18)
|
|
|
51,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,482
|
(13)
|
|
|
62,571
|
|
|
|
2,582
|
(11)
|
|
|
65,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,582
|
(12)
|
|
|
65,092
|
|
|
|
(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 option to purchase common stock, of which the
remaining shares will, as long as named executive officer remains employed by the Company, vest on June 28, 2018.
|
|
|
(4)
|
Represents option to purchase fully vested common stock,
as long as named executive officer remains employed by the Company.
|
|
|
(5)
|
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.
|
|
|
(6)
|
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.
|
|
|
(7)
|
Represents option to purchase common stock, of which one-third
of the unexercisable shares covered by this award will vest on April 3, 2018, and the remaining unexercisable shares will, as
long as named executive officer remains employed by the Company, vest one-half on April 3, 2019 and April 3, 2020.
|
|
|
(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 the remaining shares will vest on 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.
|
|
|
(11)
|
Represents performance-vesting restricted stock units granted
on April 3, 2017, 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 “2017
Equity Awards–Performance Share Unit (“PSU”) Awards”.
|
|
|
(12)
|
Represents performance-vesting restricted stock units granted
on April 3, 2017, 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, 2020. The awards are more fully described above under “2017
Equity Awards–Performance Share Unit (“PSU”) Awards”.
|
|
|
(13)
|
Represents time-vested restricted stock units granted on
April 3, 2017, of which one-third of the shares will vest on April 3, 2018, and the remaining shares will, as long as names executive
officer remains employed by the Company, vest one-third on April 3, 2019 and April 3, 2020.
|
|
|
(14)
|
Represents time-vested restricted stock award of common
stock granted to Mr. Cross on April 1, 2013. The remaining shares will, as long as Mr. Cross remains employed by the Company,
vest on April 1, 2018.
|
|
|
(15)
|
Represents performance-vesting restricted stock units granted
on April 1, 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.
|
|
|
(16)
|
Represents time-vested restricted stock units granted on
October 1, 2016, of which one-half of the shares will vest on October 1, 2018 and the remaining shares will, as long as Ms. Juliette
Kleffel remains employed by the Company, vest one-half on October 1, 2019.
|
|
|
(17)
|
Represents time-vested restricted stock units granted on
April 1, 2017, of which one-third of the shares will vest on April 1, 2018, and the remaining shares will, as long as Ms. Juliette
Kleffel remains employed by the Company, vest one-third on April 1, 2019 and April 1, 2020.
|
|
|
(18)
|
Represents performance-vesting restricted stock units granted
on April 1, 2017, 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, 2020.
|
2017
OPTION EXERCISES AND STOCK VESTED
The following table reports the exercise
of stock options, and vesting of stock awards or similar instruments during 2017, granted to the named executive officers and the
value of the gains realized on vesting. No stock options were exercised in 2017.
|
Name
|
|
Number of Shares Acquired
on Vesting
|
|
|
Value Realized on
Vesting
|
|
|
Dennis S. Hudson, III
|
|
|
21,394
|
|
|
$
|
539,318
|
|
|
Charles M. Shaffer
|
|
|
8,166
|
|
|
$
|
205,865
|
|
|
Charles K. Cross, Jr.
|
|
|
9,420
|
|
|
$
|
236,878
|
|
|
David Houdeshell
|
|
|
8,913
|
|
|
$
|
224,697
|
|
|
Juliette P. Kleffel
|
|
|
2,825
|
|
|
$
|
67,489
|
|
2017
NONQUALIFIED DEFERRED COMPENSATION
The following table discloses, for each
of the named executive officers, contributions, earnings and balances during 2017 under the Executive Deferred Compensation Plan,
described below.
|
Name
|
|
Executive
Contributions in
Last Fiscal Year
($)
|
|
|
Registrant
Contributions in
Last Fiscal Year
($)
(1)
|
|
|
Aggregate
Earnings in Last
fiscal Year
($)
(2)
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
Aggregate
Balance at Last
Fiscal Year End
($)
|
|
|
Dennis S. Hudson, III
|
|
|
16,106
|
|
|
|
12,885
|
|
|
|
160,582
|
|
|
|
—
|
|
|
|
1,021,710
|
(3)
|
|
Charles M. Shaffer
|
|
|
9,720
|
|
|
|
2,000
|
|
|
|
2,888
|
|
|
|
—
|
|
|
|
23,855
|
(4)
|
|
Charles K. Cross, Jr.
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
David Houdeshell
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Juliette P. Kleffel
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1)
|
Total amount included in the All Other Compensation column
of the Summary Compensation Table. This amount was contributable in 2017, but was credited to the account of the named executive
officer in 2018.
|
|
|
(2)
|
None of the earnings or dividends paid under the Executive
Deferred Compensation Plan are above-market or preferential.
|
|
|
(3)
|
Includes $265,181 contributed by the Company, as well as
executive contributions, which were included in the Summary Compensation Table for previous years.
|
|
|
(4)
|
Includes $3,750 contributed by the Company, as well as
executive contributions, which were included in the Summary Compensation Table for previous years.
|
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.
2017
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, 2017. The
closing market price of the Company’s common stock on that date was $25.21 per share. None of the named executive officers
would be eligible for any of these payments if they were terminated for cause.
|
Name
|
|
Term
(in
years)
(#)
|
|
|
Cash
Severance
($)
|
|
|
Value
of
Other
Annual
Benefits
($)
|
|
|
Total
Value of
Outstanding
Stock
Awards that
Immediately
Vest
($)
|
|
|
In-the-Money
Value
of
Outstanding Stock
Option Awards or
SARs that
Immediately Vest
($)
|
|
|
Total
Value of
Benefit
($)
|
|
|
Dennis
S. Hudson, III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon
Termination without Cause or with Resignation for Good Reason
(1)
|
|
|
2
|
(2)
|
|
|
1,400,000
|
|
|
|
3,840
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,403,840
|
|
|
Upon
Death or Disability
(1)
|
|
|
2
|
(2)
|
|
|
1,200,000
|
|
|
|
3,840
|
|
|
|
2,615,689
|
(3)
|
|
$
|
533,582
|
(3)
|
|
|
4,353,111
|
|
|
Upon
Termination Following a Change-in-Control
(1)
|
|
|
3
|
|
|
|
2,100,000
|
|
|
|
5,760
|
|
|
|
2,615,689
|
(3)
|
|
|
533,582
|
(3)
|
|
|
5,255,031
|
|
|
Upon
Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,615,689
|
(3)
|
|
|
533,582
|
(3)
|
|
|
3,149,271
|
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
539,343
|
(3)
|
|
|
55,135
|
(3)
|
|
|
594,478
|
|
|
Charles
M. Shaffer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon
Death, Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,341,701
|
(3)
|
|
|
206,049
|
(3)
|
|
|
1,547,750
|
|
|
Upon
Termination Following a Change-in-Control
(4)
|
|
|
2
|
|
|
|
740,000
|
|
|
|
3,480
|
|
|
|
1,341,701
|
|
|
|
206,049
|
|
|
|
2,291,230
|
|
|
Upon
Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,341,701
|
(3)
|
|
|
206,049
|
(3)
|
|
|
1,547,750
|
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
205,890
|
(3)
|
|
|
6,821
|
(3)
|
|
|
212,711
|
|
|
Charles
K. Cross, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon
Death or Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,422,474
|
(3)
|
|
|
239,506
|
(3)
|
|
|
1,661,980
|
|
|
Upon
Termination Following a Change-in-Control
(4)
|
|
|
2
|
|
|
|
725,000
|
|
|
|
3,149
|
|
|
|
1,422,474
|
|
|
|
239,506
|
|
|
|
2,390,129
|
|
|
Upon
Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,422,474
|
(3)
|
|
|
239,506
|
(3)
|
|
|
1,661,980
|
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
237,529
|
(3)
|
|
|
6,821
|
(3)
|
|
|
244,350
|
|
|
David
D. Houdeshell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon
Death or Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
973,535
|
(3)
|
|
|
142,824
|
(3)
|
|
|
1,116,359
|
|
|
Upon
Termination Following a Change-in-Control
(4)
|
|
|
1
|
|
|
|
330,000
|
|
|
|
2,095
|
|
|
|
973,535
|
|
|
|
142,824
|
|
|
|
1,448,454
|
|
|
Upon
Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
973,535
|
(3)
|
|
|
142,824
|
(3)
|
|
|
1,116,359
|
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
224,772
|
(3)
|
|
|
11,936
|
(3)
|
|
|
236,708
|
|
|
Juliette
P. Kleffel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upon
Death, Disability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
362,217
|
(3)
|
|
|
35,174
|
(3)
|
|
|
397,391
|
|
|
Upon
Termination Following a Change-in-Control
(4)
|
|
|
1
|
|
|
|
280,000
|
|
|
|
1,782
|
|
|
|
362,217
|
|
|
|
35,174
|
|
|
|
679,173
|
|
|
Upon
Change-in-Control without Termination
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
362,217
|
(3)
|
|
|
35,174
|
(3)
|
|
|
397,391
|
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(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 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 12 months for Mr. Houdeshell and Ms. Kleffel. “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 and bonus.
|
CEO
Pay Ratio
In compliance with Section
953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company’s
CEO pay ratio was calculated. At December 31, 2017, the median annual total compensation of our employees (other than Mr. Hudson,
our CEO) was $59,455 and the annual total compensation for Mr. Hudson was $1,512,516. Based on this information, for 2017, the
estimate of the ratio of compensation for our Chief Executive Officer to the median employee was 25.4. This ratio is specific to
our Company and is not comparable to any ratio disclosed by another company.
To identify the median
of the annual total compensation of all of our employees, we reviewed 2017 compensation reflected in our payroll records for our
over 600 associates as of December 31, 2017, which includes all full-time employees throughout the year not including any acquired
associates. Based on our payroll data, we determined the value of compensation earned by associates including regular pay, incentive,
bonus, business continuity, and any other perquisites. No assumptions, adjustments, or estimates were made to our payroll data
in our efforts to identify the median employee. The median employee’s annual total compensation for 2017 was calculated in
accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K for the Summary Compensation Table on page 45, consistent
with the calculations we provide all of our Named Executive Officers. No adjustments were made to the annual total compensation
of our Chief Executive Officer, as reported in the Summary Compensation Table, to calculate the reported ratio of the annual total
compensation of our Chief Executive Officer to the median of the annual total compensation of all employees.
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 five Class I directors of Seacoast, each of whom has been nominated by the CGC of the
Board of Directors. All of the nominees 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 T. Michael Crook, who are currently directors of the Bank only. If elected, each Class
I director nominee will serve a three year term expiring at the 2021 Annual Meeting and until their successors have been elected
and qualified.
Currently, the Board
of Directors is classified as follows:
|
Class
|
Term
|
Names 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 2020 Annual Meeting
|
Stephen E. Bohner
Alvaro J. Monserrat
Julie H. Daum
Dennis S. Hudson, III
|
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 five 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
(five 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, which means that the director nominees who receive the highest
voted “for” their election are elected. 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 or reject 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 five 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 five nominees listed below.
Nominees
for Re-election at the Annual Meeting
|
Jacqueline
L. Bradley
Age:
60
Director Since:
2015
Bank Director Since:
2014
Committees:
§
Bank
Trust (Chair)
§
Strategy
& Innovation
|
Ms. Bradley served as a director of BankFIRST
from 2005 until BANKshares was acquired by Seacoast in 2014. During her tenure at BankFIRST, she served on BankFIRST’s Special
Assets Committee and Audit Committee and chairs the Bank’s Trust and Wealth Management Committee. Ms. Bradley serves on the
Orange County Tourist Development Council and the board of directors of the Boys & Girls Club of Central Florida, serving as
chairperson in 2002 and 2003. Additionally, Ms. Bradley is a board member of The Studio Museum in Harlem. She also served on the
finance committee for the Central Florida Expressway Authority and the board of directors of the Greater Orlando Aviation Authority,
Florida Arts Council, and 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 8 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.
Key Qualifications & Experience:
§
diversity
of management experience in the financial services industry;
§
knowledge
of, and stature and philanthropic service to, the Central Florida market, which is valuable in understanding the customer segments
in this market; and
§
ability
to provide guidance regarding accounting and financial matters.
|
|
H.
Gilbert Culbreth, Jr.
Age:
72
Director Since:
2008
Bank Director Since:
2006
Committees:
§
Compensation
and Governance (Chair)
§
Bank’s
Directors Credit Risk
|
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 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 2006, and has served on the Bank’s board of directors since the acquisition. 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.
Key Qualifications & Experience:
§
diversity
of business experience in the Okeechobee, Florida market, which is valuable in understanding the customer segments in this market;
§
entrepreneurial
and management skills; and
§
stature
and knowledge of the local community.
|
|
Christopher
E. Fogal
Age:
66
Director Since:
1997
Bank Director Since:
1997
Committees:
§
Audit
(Chair)
§
Bank
Trust
|
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. 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.
Key Qualifications & Experience:
§
accounting
expertise as a Certified Public Accountant 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;
§
business,
management and decision-making skills, including his experience as managing partner of an accounting firm for 30+ years; and
§
stature
and knowledge of the local community.
|
|
Timothy
S. Huval
Age:
51
Director Since:
2016
Bank Director Since:
2016
Committees:
§
Bank’s
Directors Credit Risk
§
Compensation
and Governance
§
Strategy
& Innovation
|
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 steering a cultural transformation at Humana
focused on integrating its core values enterprise-wide. 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, home loan servicing executive, chief operations officer and Delaware market president, human resources executive
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, United Way, Peninsula Alliance for Economic
Development, and Youth Homes. 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.
Key Qualifications & Experience:
§
diverse
background in human resources, information technology, consumer banking, operational management, and financial services industry,
which provides a unique and holistic perspective;
§
experience
in cultural transformation and integration of corporate values deep in the organization and business model, which is applicable
to the Company’s rapidly changing business model; and
§
understanding
of technology as a platform for creating efficiencies and optimizing resources.
|
|
Herbert
A. Lurie
Age:
57
Director Since:
2016
Bank Director Since:
2016
Committees:
§
Bank’s
Directors Credit Risk
§
Strategy
& Innovation
|
Mr. Lurie was Senior
Managing Director and Chairman of the Financial Institutions Group of Guggenheim Securities from 2011 to 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. 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 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/BA in Finance and Economics from the University at Albany.
Key Qualifications & Experience:
§
expertise
and seasoned insights in evaluating M&A and other financial and strategic opportunities, which is useful in promoting Seacoast’s
growth strategy;
§
comprehensive
knowledge of the financial services and commercial banking industries;
§
knowledge
and perspective regarding the interests of various investor groups, which is valuable in considering the interests of all Seacoast
shareholders; and
§
extensive
experience and stature in the investment banking community.
|
Director
Terms Extended Beyond the Annual Meeting
|
Dennis
J. Arczynski
Age:
66
Director Since:
2013
Bank Director Since:
2007
Committees:
§
Risk
(Chair)
§
Audit
§
Strategy
& Innovation
|
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. 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.
Key Qualifications & Experience:
§
knowledge
of effective management practices of the largest and most complex mid-size banks;
§
expertise
in all facets of commercial banking and fiduciary operations, including risk assessment and BSA/AML; and
§
risk
management, corporate governance, and regulatory background specific to the financial services industry, and alternative perspective
in the areas of government relations and regulatory matters that impact the Company.
|
|
Stephen
E. Bohner
Age:
65
Director Since:
2003
Bank Director Since:
2003
Committees:
§
Bank’s
Directors Credit Risk (Chair)
§
Risk
Management
|
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. 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.
Key Qualifications & Experience:
§
business
leadership and expertise in real estate 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;
§
business
leadership and entrepreneurial and management skills developed over the past 39 years; and
§
stature
in the local community garnered from his years of professional and community involvement.
|
|
Julie H. Daum
Age: 63
Director Since:
2013
Bank Director Since:
2013
Committees:
§
Compensation
and Governance
§
Bank
Trust
|
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. 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.
Key Qualifications & Experience:
§
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;
§
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;
§
stature
in the corporate governance community garnered from her years of professional involvement; and
§
ability
to serve as a mentor and catalyst to bring more women into senior leadership positions with the Company.
|
|
Maryann
Goebel
Age:
67
Director
Since:
2014
Bank
Director Since:
2014
Committees:
§
Audit
§
Compensation
and Governance
§
Risk
|
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 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. 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; Frito-Lay from 2001 to 2002; General
Motors Europe from 1999 to 2001; General Motors Truck Group from 1997 to 1999; and Bell Atlantic NYNEX Mobile (now Verizon Mobile)
from 1995 to 1997. 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 2017, Ms. Goebel was awarded the CERT Certificate in cybersecurity oversight by the NACD.
Key Qualifications & Experience:
§
knowledge
of complex information technology environments and focus on innovation and aligning IT objectives with corporate priorities;
§
expertise
in strategizing and implementing best-practice processes, tools and structure that are essential to supporting a superior customer
experience; and
§
leadership
and ability to help transform the company digitally to deliver state-of-the-art customer services.
|
|
Roger
O. Goldman
Lead
Director
Age:
73
Director Since:
2012
Bank Director Since:
2012
Committees:
§
ex-officio
for all committees
|
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. As of April 1, 2018, American Express Bank, FSB, for which Mr. Goldman serves as Chairman, merged with and into
American Express National Bank (“AENB”). Mr. Goldman will serve as a director and member of the Executive, Audit, and
Compliance and Risk Committees of AENB. 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.
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.
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.
Key Qualifications & Experience:
§
diversity
of leadership experience in the financial services industry, particularly with respect to his retail banking and consumer and small
business lending background;
§
marketing
and risk management expertise;
§
legal
background and knowledge of corporate governance matters;
§
considerable
insights and perspectives garnered from years of service on public, private and not-for-profit boards; and
§
improved
performance and effectiveness of the Board under his leadership as Lead Independent Director.
|
|
Dennis
S. Hudson, III
Chairman
& CEO
Age:
62
Director Since:
1984
Bank Director Since:
1984
Committees:
§
Bank’s
Director Credit Risk
§
Strategy
& Innovation
|
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.
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. In November 2015, Mr. Hudson was appointed as an
independent director to PENN Capital Funds, a mutual fund group managed by PENN Capital Management. Mr. Hudson also serves on the
board of Martin Health System and the Community Foundation for Palm Beach and Martin counties. 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. 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.
Key Qualifications & Experience:
§
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;
§
knowledge
and relationships with the institutional investor community, including the Company’s past and present institutional investors
legal background and knowledge of corporate governance matters;
§
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
§
stature
in the local community, including through service on the boards of the non-profit organizations discussed above.
|
|
Dennis
S. Hudson, Jr.
Age:
90
Director Since:
1983
Bank Director Since:
1983
Committees:
§
Bank’s
Directors Credit Risk
§
Risk
Management
|
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.
Key Qualifications & Experience:
§
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;
§
tenure
as director that spans a full range of banking and economic cycles affecting the Company; and
§
stature
in the local community including numerous leadership positions with community organizations.
|
|
Alvaro
J. Monserrat
Age:
49
Director Since:
2017
Bank Director Since:
2017
Committees:
§
Audit
§
Strategy
& Innovation
|
Mr. Monserrat has been
the Executive Vice President and General Manager at Nuance Imaging, a subsidiary of Nuance Communications, Inc. (ticker: NUAN),
a multinational computer software technology corporation since January 2018. Prior to Nuance, he was the former CEO of RES Software
(acquired by Invanti in 2017), a leading digital workspace technology company from 2015 to 2017, and also served as Citrix Systems’
Senior Vice President of worldwide sales & service from 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.
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, the national partner board of the Leukemia
and Lymphoma Society and 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.
Key Qualifications & Experience:
§
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;
§
abilities
as a leader in transforming and infusing existing business models with multi-directional and diversified routes to market, and
delivering rapid growth, which provides insights for our effective management of Seacoast’s growth and transformation;
§
experience
and acumen in building, restructuring and motivating teams to produce high-performance units; and
§
global
view of markets and competitors combined with his knowledge of technology and go-to-market execution, which provides constructive
oversight in these areas.
|
|
Thomas
E Rossin
Age:
84
Director Since:
2003
Bank Director Since:
2003
Committees:
§
Risk
Management
§
Strategy
& Innovation (Chair)
|
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. 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.
Key Qualifications &
Experience:
§
legal
background and, in particular, his knowledge of legal issues related to financial institutions and underlying corporate governance
matters;
§
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; and
§
significant
experience in the financial services industry.
|
DIRECTOR
COMPENSATION
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.
|
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. 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.
There were no changes to director compensation
for fiscal year 2017 compared to 2016. However, beginning in 2018, the annual stock award payment will increase by $25,000 and
all Annual Committee Chair Retainers will equal $25,000.
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 $20,000 annual housing allowance, is provided with office space in a Company-owned facility, and is reimbursed for company-related
travel expenses, reasonable customer or staff entertainment expenses and extraordinary use of his office staff.
Director Stock Ownership Policy
To align the interests of our directors
and shareholders, our Board of Directors believes that directors should hold a significant financial stake in Seacoast. Consequently,
our Corporate Governance Guidelines require that directors own Seacoast stock equal in value to a minimum of three times their
base annual retainer within four years of joining the Board. Each director must retain 75% of their shares until reaching the minimum
share ownership requirement, and after the ownership target is met, must retain at least 50% of the shares for one year. All of
our directors own more than the minimum stock requirement, except for two of our newest directors who have been on the Board for
three years or less, and are on track to be compliant with our policy within the prescribed time frame.
The table below sets forth the total compensation
paid to Board members who are not employees of the Company or the Bank for fiscal year 2017.
2017 DIRECTOR
COMPENSATION TABLE
|
Director
|
|
Fees Earned or
Paid in Cash
($)
(1)
|
|
|
Stock Awards
($)
(2)
|
|
|
Option Awards
($)
(3)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
Dennis J. Arczynski
|
|
|
52,500
|
(3)(4)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
90,007
|
|
|
Stephen E. Bohner
|
|
|
47,500
|
(3)(5)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,007
|
|
|
Jacqueline L. Bradley
|
|
|
47,500
|
(3)(6)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,007
|
|
|
H. Gilbert Culbreth, Jr.
|
|
|
47,500
|
(8)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85,007
|
|
|
Julie H. Daum
|
|
|
37,500
|
(3)(7)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,007
|
|
|
Christopher E. Fogal
|
|
|
52,500
|
(3)(9)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
90,007
|
|
|
Maryann Goebel
|
|
|
37,500
|
(3)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,007
|
|
|
Roger O. Goldman
|
|
|
312,500
|
(3)(7)(10)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
20,000
|
(11)
|
|
|
370,007
|
|
|
Dennis S. Hudson, Jr.
|
|
|
37,500
|
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,007
|
|
|
Timothy S. Huval
|
|
|
37,500
|
(7)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,007
|
|
|
Alvaro J. Monserrat
|
|
|
37,500
|
(3)(7)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,007
|
|
|
Herbert Lurie
|
|
|
37,500
|
(3)(7)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
75,007
|
|
|
Thomas E. Rossin
|
|
|
62,500
|
(12)
|
|
|
37,507
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100,007
|
|
|
|
(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 2017 is provided below in the table entitled “Stock Awards Granted to Directors in 2017”.
|
|
|
(2)
|
A breakdown of the stock awards made to each director in
2017 is provided below in the table entitled “Stock Awards Granted to Directors in 2017”. No stock awards held by
directors were outstanding as of December 31, 2017.
|
|
|
(3)
|
Certain directors elected to take a portion of their 2017
cash compensation in the form of stock option awards. As of December 31, 2017, all of the stock option awards described below
in the table entitled “Stock Awards Granted to Directors in 2017” were outstanding, as well as 170,000 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 2017 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:
|
|
|
(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)
|
Includes $25,000 for his service as Chair of the Strategy
and Innovation Committee.
|
|
Director
|
|
Cash Deferred
into DDCP
Stock Account in
2017 ($)
|
|
|
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
|
|
|
|
9,811
|
|
|
|
25,989
|
|
|
Stephen E. Bohner
|
|
|
—
|
|
|
|
11,483
|
|
|
|
9,811
|
|
|
|
21,294
|
|
|
Jacqueline L. Bradley
|
|
|
—
|
|
|
|
—
|
|
|
|
7,046
|
|
|
|
7,046
|
|
|
H. Gilbert Culbreth, Jr.
|
|
$
|
26,250
|
|
|
|
2,139
|
|
|
|
9,811
|
|
|
|
11,950
|
|
|
Julie H. Daum
|
|
$
|
26,250
|
|
|
|
5,630
|
|
|
|
9,811
|
|
|
|
15,441
|
|
|
Christopher E. Fogal
|
|
|
—
|
|
|
|
627
|
|
|
|
9,811
|
|
|
|
10,438
|
|
|
Maryann Goebel
|
|
|
—
|
|
|
|
—
|
|
|
|
9,515
|
|
|
|
9,515
|
|
|
Roger O. Goldman
|
|
$
|
26,250
|
|
|
|
32,533
|
|
|
|
9,811
|
|
|
|
42,344
|
|
|
Dennis S. Hudson, Jr.
|
|
|
—
|
|
|
|
—
|
|
|
|
9,811
|
|
|
|
9,811
|
|
|
Timothy S. Huval
|
|
|
—
|
|
|
|
—
|
|
|
|
2,688
|
|
|
|
2,688
|
|
|
Herbert A. Lurie
|
|
$
|
26,250
|
|
|
|
2,565
|
|
|
|
3,275
|
|
|
|
5,840
|
|
|
Alvaro J. Monserrat
|
|
|
—
|
|
|
|
247
|
|
|
|
1,513
|
|
|
|
1,760
|
|
|
Thomas E. Rossin
|
|
|
—
|
|
|
|
—
|
|
|
|
9,811
|
|
|
|
9,811
|
|
stock
awards & Options GRANTed to directors in 2017
The following table sets forth certain
information concerning stock awards and options granted to directors during 2017. As of December 31, 2017, all stock awards granted
to directors were fully vested, and all of the option awards listed below were outstanding, as well as 180,000 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
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Stephen E. Bohner
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Jacqueline L. Bradley
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
H. Gilbert Culbreth, Jr.
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Julie H. Daum
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Christopher E. Fogal
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Maryann Goebel
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Roger O. Goldman
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Dennis S. Hudson, Jr.
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
Timothy S. Huval
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
Herbert A. Lurie
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Alvaro J. Monserrat
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
|
2/6/2017
|
|
|
—
|
|
|
|
2,142
|
|
|
|
22.65
|
|
|
|
11,246
|
|
|
Thomas E. Rossin
|
|
10/24/2017
|
|
|
1,513
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,507
|
|
|
|
(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 $5.25 per share for all option awards.
|
|
|
(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, 2017.
|
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
Approval
of amendment to the
AMENDed
and restated Articles of incorporation of
seacoast
banking corporation of florida
TO
INCREASE the number of AUTHORIZED SHARES of common stock
On March 13, 2018, our Board of
Directors adopted, subject to shareholder approval at the Annual Meeting, an amendment to our amended and restated articles of
incorporation to increase the number of authorized shares of the Company’s common stock, $0.10 par value per share, from
60 million shares to 200 million shares.
The proposed
amendment to Seacoast’s amended and restated articles of incorporation is attached to this proxy statement as Appendix A.
No other changes to the Company’s articles of incorporation are being proposed, which will remain at 4 million.
Reasons
for Amendment
Our Board of Directors
is proposing the adoption of an amendment to the Company’s amended and restated articles of incorporation to increase the
number of authorized shares of common stock from 60 million to 120 million shares. Of the 60 million shares that are currently
authorized to be issued under the Company’s articles of incorporation, as of the Record Date, [●] shares are issued
and outstanding, [●] shares are held in treasury, 500,000 shares are reserved for issuance under our dividend reinvestment
and stock purchase plan and [●] are reserved for issuance under our equity incentive plans. Accordingly, we currently have
less than [●] shares of common stock available for future issuances.
In order to assure flexibility
of action in the future and meet our future business needs as they arise, our Board of Directors believes that it is desirable
and in the best interests of the Company and its shareholders that there be a substantial number of authorized but unissued shares
of common stock. The Board of Directors believes that having the authority to issue additional shares of common stock will avoid
the possible delay and significant expense of calling and holding a special meeting of shareholders to increase the authorized
shares at a later date and will enhance its ability to respond promptly to business and other opportunities that may arise. The
Company strategically plans to grow through mergers and acquisitions. Seacoast successfully consummated three acquisitions in 2017:
GulfShore Bancshares, Inc. in April 2017; NorthStar Banking Corporation in October 2017; and Palm Beach Community Bank in November
2017. These mergers involved, and potential future mergers and acquisitions may involve the issuance of shares of Seacoast common
stock or securities convertible into shares of common stock.
Additional shares of
Seacoast common stock may also be necessary in connection with the declaration of stock dividends or stock splits, future public
and private financings, investment opportunities, other distributions, or other corporate purposes, as well as to meet anticipated
future obligations under our existing equity incentive plans or any future incentive plans, under which we may grant future equity
awards to our employees, officers and directors. We believe that having the ability to grant equity awards is critical to retaining
and recruiting a qualified management team.
Other than issuances
pursuant to potential merger and acquisition opportunities, our existing dividend reinvestment and stock purchase plan and our
equity incentive plans (each as described above), as of the date of this proxy statement, we have no plans, arrangements or understandings
regarding the issuance of additional shares of common stock that would be authorized pursuant to this proposal and there are no
negotiations pending with respect to the issuance thereof for any purpose.
If Proposal 2 is approved,
the number of authorized shares of Seacoast common stock will be increased and the Board of Directors will have the right to issue,
without further shareholder approval, subject to potential restrictions described below, an additional 140 million shares
of common stock. If approved, the amendment will be effective upon the filing of the Articles of Amendment to the Amended and Restated
Articles of Incorporation with the Department of State of the State of Florida promptly after the Annual Meeting.
Anti-Takeover
Effect
The proposed increase
in the authorized number of shares of common stock could, in some situations, have the effect of discouraging unsolicited takeover
attempts or inhibiting the removal of incumbent management and may limit the opportunity for shareholders to dispose of their shares
at the higher price generally available in takeover attempts or that may be available under a merger proposal. For example, the
issuance of the newly authorized shares of common stock could be used to deter or prevent a change of control through dilution
of stock ownership of persons seeking to take control or by rendering a transaction proposed by such persons more costly. However,
the Board of Directors is not aware of any third-party attempts to assume control of Seacoast and has not presented this Proposal
2 with the intent that it be utilized as an anti-takeover device or to inhibit the removal of incumbent management.
Terms
of our Common Stock
If Proposal 2 is approved,
the additional authorized shares of common stock may be issued for such consideration, cash or otherwise, at such terms, times
and amounts as the Board of Directors may determine without further shareholder approval, except to the extent that shareholder
approval is required by applicable laws, rules or regulations. Because our common stock is traded on the NASDAQ Global Select Market,
shareholder approval must be obtained, under applicable NASDAQ rules, prior to the issuance of shares for certain purposes, including
the issuance of greater than 20% of Seacoast’s then outstanding shares of common stock or voting power in connection with
a private financing or an acquisition or merger.
The authorization of
additional shares of common stock will not, by itself, have any effect on the rights of present shareholders. The additional 140 million
shares to be authorized would be part of Seacoast’s existing class of common stock and, if and when issued, would have the
same rights and privileges as the shares of common stock presently authorized, issued and outstanding. Shareholders do not have
preemptive rights with respect to our commons stock and therefore, do not have any preferential rights to subscribe for or purchase
additional shares of common stock in order to maintain proportionate ownership of their shares. Accordingly, the issuance of additional
shares of common stock for corporate purposes other than a stock split or stock dividend could have a dilutive effect on the ownership
and voting rights of shareholders at the time of issuance.
The Board of Directors
unanimously recommends a vote "
FOR
" Proposal 2.
PROPOSAL
3
AMEND THE COMPANY’S 2013 INCENTIVE PLAN
TO
INCREASE AUTHORIZED SHARES
We are asking our shareholders to approve
an amendment to the Seacoast Banking Corporation of Florida 2013 Incentive Plan (the “2013 Plan”). Our 2013 Plan is
the only plan under which equity-based compensation may currently be awarded to our executive officers and employees. As of the
Record Date, there were 584,167 shares of our common stock remaining available for the grant of equity awards under the 2013 Plan.
In order to enable us to continue to offer meaningful equity-based incentives, as well as cash-based incentives, to our employees,
officers, directors and consultants, our board of directors believes that it is both necessary and appropriate to increase the
number of shares of our common stock available for these purposes. As a result, on February 13, 2018, the Board of Directors adopted,
subject to shareholder approval at the Annual Meeting, an amendment to add 2,000,000 shares to the 2013 Plan. The share increase
is the only change to the 2013 Plan, a summary of which is provided below.
If the amendment to the 2013 Plan is approved
by our shareholders at the Annual Meeting, it will become effective on the date of the Annual Meeting. If the amendment is not
approved by our shareholders, then the 2013 Plan will remain in effect as it presently exists.
Background
for the Current Request to Approve an Increase in the Share Reserve under the 2013 Plan
In setting the number of proposed shares
issuable under our amended 2013 Plan, our Compensation and Governance Committee and our Board of Directors considered a number
of factors, including the following (each of which are discussed further below):
• Key data
relating to outstanding equity awards and shares available for grant;
• Significant
historical award information; and
• Future share
needs.
Key Data
Relating to Outstanding Awards
The following table provides information
regarding outstanding equity awards and shares available for future awards under the 2013 Plan as of our Record Date (and without
giving effect to approval of the amendment to the 2013 Plan under this proposal).
|
Total shares underlying outstanding stock options
|
|
|
896,269
|
|
|
Weighted-average exercise price of outstanding stock options
|
|
$
|
17.62
|
|
|
Weighted-average remaining contractual life of outstanding stock options
|
|
|
7.0 years
|
|
|
Total shares underlying full value awards outstanding
|
|
|
585,734
|
|
|
Total shares currently available for grant
|
|
|
584,167
|
|
Information Regarding our Authorized Shares
and Stock Price
Our amended and restated articles of incorporation
authorize the issuance of 60 million shares of common stock. As of our Record Date, there were [●] shares of common stock
issued and outstanding and the closing price of a share of our common stock as of that date was $[●].
Significant Historical Award Information
Common measures of a stock plan’s
cost include burn rate, dilution and overhang. The burn rate refers to how fast a company uses the supply of shares authorized
for issuance under its stock plan. Dilution measures the degree to which our shareholders’ ownership has been diluted by
stock-based compensation awarded under our various equity plans and also includes shares that may be awarded under our various
equity plans in the future, which is commonly referred to as overhang.
We closely monitor our share usage and
believe we have been judicious in our use of shares previously authorized by our shareholders under the 2013 Plan. The following
table and related footnotes show our key equity metrics over the last three years.
|
Key Metrics (At Target)
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
Burn Rate
(1)
|
|
|
0.94
|
%
|
|
|
1.48
|
%
|
|
|
1.35
|
%
|
|
Overhang
(2)
|
|
|
6.60
|
%
|
|
|
7.03
|
%
|
|
|
5.02
|
%
|
|
Dilution
(3)
|
|
|
3.83
|
%
|
|
|
3.99
|
%
|
|
|
3.74
|
%
|
|
|
(1)
|
Adjusted burn rate is calculated under Institutional Stockholder
Services, or ISS, methodology by dividing the number of shares subject to equity awards granted during the applicable fiscal period,
adjusted to address the dilutive effect of stock-based awards other than stock options and SARs, by the total weighted-average
number of shares outstanding during the applicable fiscal period. The adjustment is based on the volatility of a company’s
stock price, and in 2017, our applicable adjustment factor was
25.4.
|
|
|
(2)
|
Overhang is calculated by dividing (a) the sum of (x) the
number of shares subject to equity awards outstanding at the end of the year and (y) the number of shares available for future
grants, by (b) the number of shares outstanding at the end of the year.
|
|
|
(3)
|
Dilution is calculated by dividing the number of shares
subject to equity awards outstanding at the end of the fiscal year by the number of shares outstanding at the end of the fiscal
year.
|
Number
of Shares Requested
Several factors were evaluated in determining
to request an increase of 2,000,000 shares for the 2013 Plan:
|
|
·
|
The original 2013 Plan included authorization
for 1,300,000 shares (after adjusting for our reverse stock split on December 13, 2013), and in 2015 the shareholders approved
an amendment to the 2013 Plan to increase the share authorization by 1,700,000 additional shares. The additional 2,000,000 shares
requested under this proposal, together with the remaining shares under the 2013 Plan, represent the shares the Company anticipates
needing for the next three (3) years under normal circumstances.
|
|
|
·
|
Although we must manage our share reserve
under the possibility that awards will be earned at the maximum level, this will only occur if we achieve the maximum performance
under each metric in each award, which is not expected to be the case. Our actual share usage will also vary from our estimate
based upon changes in market grant values, changes in the number of recipients, changes in our stock price, changes in the structure
of our long-term incentive program, changes in our dividend rate and forfeitures of outstanding awards. We believe that the proposed
share reserve reflects an appropriate balance between our desire to allow maximum flexibility in a competitive labor market and
shareholder interests of limiting dilution.
|
|
|
·
|
As of the Record Date, the plan share
reserve represented less than [●]% of our common shares outstanding.
|
|
|
·
|
As of the Record Date, the total overhang
resulting from the share request, including our outstanding awards under the 2013 Plan represents approximately [●]% of our
fully-diluted common shares outstanding.
|
Aside from the increase in shares available
under the 2013 Plan, the current proposal does not amend or change any provisions of the 2013 Plan, which were approved by shareholders
at the 2013 annual meeting and the 2015 annual meeting. However, to enable you to evaluate the proposed share increase, the following
is a description of the material terms of the 2013 Plan.
Summary
of the 2013 Plan
Important
Provisions
The 2013 Plan contains a number of provisions
that we believe are consistent with the interests of shareholders and sound corporate governance practices, including:
|
|
·
|
No liberal share counting
. The
plan prohibits the reuse of shares withheld or delivered to satisfy the exercise price of an option or SAR or to satisfy tax withholding
requirements.
|
|
|
|
|
|
|
·
|
No repricing of stock options or SARs
.
The plan prohibits the repricing of stock options or SARs without shareholder approval.
|
|
|
·
|
No discounted stock options or SARs
.
All stock options and SARs must have an exercise price or base price equal to or greater than the fair market value of the underlying
common stock on the date of grant.
|
|
|
·
|
No dividends on unearned awards
.
The plan prohibits the current payment of dividends or dividend equivalent rights on unearned awards.
|
|
|
·
|
Compensation recoupment policy
.
Awards under the plan will be subject to any compensation recoupment policy that the Company may adopt from time to time.
|
|
|
·
|
Limit on awards to non-employee directors
.
The plan imposes a maximum number of shares (1,000,000) that may be granted to any one non-employee director in any 12-month period.
|
Purpose
The purpose of the 2013 Plan is to promote
the success, and enhance the value of the Company success by linking the personal interests of its employees, officers, and directors
to those of the Company’s shareholders, and by providing participants with an incentive for outstanding performance. The
Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of
employees, officers, directors, consultants and advisors upon whose judgment, interest, and special effort the successful conduct
of the Company’s operation is largely dependent.
Permissible Awards
The 2013 Plan authorizes the grant of awards
in any of the following forms:
|
|
·
|
Options to purchase shares of common stock,
which may be nonstatutory stock options or incentive stock options under the U.S. Internal Revenue Code (the “Code”).
The exercise price of an option granted under the 2013 Plan may not be less than the fair market value of the Company’s common
stock on the date of grant. Stock options granted under the 2013 Plan have a maximum term of ten years.
|
|
|
·
|
Stock appreciation rights, or SARs, which
give the holder the right to receive the excess, if any, of the fair market value of one share of common stock on the date of exercise,
over the base price of the stock appreciation right. The base price of a SAR may not be less than the fair market value of the
Company’s common stock on the date of grant. SARs granted under the 2013 Plan have a maximum term of ten years.
|
|
|
·
|
Restricted stock, which is subject to
restrictions on transferability and subject to forfeiture on terms set by the Committee.
|
|
|
·
|
Restricted stock units, which represent
the right to receive shares of common stock (or an equivalent value in cash or other property) in the future, based upon the attainment
of stated vesting or performance goals set by the Committee.
|
|
|
·
|
Deferred stock units, which represent
the right to receive shares of common stock (or an equivalent value in cash or other property) in the future, generally without
any vesting or performance restrictions.
|
|
|
·
|
Performance awards, including qualified
performance-based awards under Code section 162(m).
|
|
|
·
|
Other stock-based awards in the discretion
of the Committee, including unrestricted stock grants.
|
All awards will be evidenced by a written
award certificate between the Company and the participant, which will include such provisions as may be specified by the Committee.
Dividend equivalent rights, which entitle the participant to payments in cash or property calculated by reference to the amount
of dividends paid on the shares of stock underlying an award, may be granted with respect to awards other than options or SARs.
Awards to Non-Employee Directors
Awards granted under the 2013 Plan to the
Company’s non-employee directors will be made only in accordance with the terms, conditions and parameters of a plan, program
or policy for the compensation of non-employee directors as in effect from time to time. The Committee may not make discretionary
grants under the 2013 Plan to non-employee directors. The maximum aggregate number of shares underlying any award granted under
the 2013 Plan in any 12-month period to any one non-employee director is 1,000,000 shares.
Shares Available for Awards
In 2013, shareholders approved an aggregate
of 1,300,000 shares under the 2013 Plan, and in 2015, shareholders approved an additional 1,700,000 shares under the 2013 Plan.
The current proposal will add 2,000,000 shares, for a total of 5,000,000 shares available under the 2013 Plan. This amount is reduced
by the number of shares that have already been granted under the 2013 Plan, as discussed above. No further awards are being granted
under any prior plans, and any prior plans sponsored by the Company shall remain in effect only so long as awards granted thereunder
shall remain outstanding.
Share Counting
Shares subject to awards that terminate
or expire unexercised, or are cancelled, forfeited or lapse for any reason, and shares underlying awards that are ultimately settled
in cash, will become available for future grants of awards under the 2013 Plan. Similarly, to the extent that the full number of
shares subject to a performance award is not issued by reason of failure to achieve maximum performance goals, the unearned shares
originally subject to the award will be added back to the 2013 Plan share reserve and again be available for issuance pursuant
to awards granted under the 2013 Plan. However, the following shares may not again be made available for issuance as awards under
the 2013 Plan: (i) shares not issued or delivered as a result of the net settlement of an outstanding option or SAR, (ii) shares
used to pay the exercise price or withholding taxes related to an outstanding option or SAR, or (iii) shares repurchased on
the open market with the proceeds of the exercise price of an option.
Limitations on Awards
The maximum aggregate number of shares
subject to stock-based awards that may be granted under the 2013 Plan in any 12-month period to any one participant is as follows:
|
Type of Award
|
|
Number of Shares
|
|
|
Options
|
|
|
1,000,000
|
|
|
SARs
|
|
|
1,000,000
|
|
|
Restricted Stock or Restricted Stock Units
|
|
|
1,000,000
|
|
|
Other Stock-Based Awards
|
|
|
1,000,000
|
|
|
Awards to Non-Employee Directors
|
|
|
1,000,000
|
|
The maximum aggregate dollar amount that
may be paid with respect to cash-based awards under the 2013 Plan to any one participant in any fiscal year of the Company is $1,000,000.
Administration
The 2013 Plan will be administered by the
Compensation and Governance Committee, or such other committee as may be determined by the Board (the “Committee”).
The Committee will have the authority to grant awards; designate participants; determine the type or types of awards to be granted
to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may
deem advisable to administer the 2013 Plan; prescribe forms of award certificates, and make any rules, interpretations, and any
and all other decisions and determinations that may be required under the 2013 Plan. The Board may at any time administer the 2013
Plan. If it does so, it will have all the powers of the Committee under the 2013 Plan.
In addition, the Board or the Committee
may expressly delegate to a special committee some or all of the Committee’s authority, within specified parameters, to grant
awards to eligible participants who, at the time of grant, are not executive officers.
Deductibility under Section 162(m)
Section 162(m) of the Internal Revenue
Code generally provides that a corporation may not deduct compensation amounts in excess of $1,000,000 paid to any of its named
executive officers in any year. Prior to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), this limitation did not
apply to options, SARs or awards that were conditioned on the achievement of performance goals if certain requirements were met.
The 2013 Plan was designed to allow the Committee to grant awards that were intended to qualify as performance-based compensation
under Section 162(m), although the Committee reserved the discretion to grant or approve awards or compensation that were not exempt
from the deduction limits.
The Tax Act repealed the performance-based
compensation exemption under Section 162(m), effective for tax years beginning after December 31, 2017. Other than certain outstanding
awards that meet the “grandfather” requirements under the Tax Act, awards granted under the 2013 Plan will be subject
to the deduction limit under Section 162(m).
Performance Goals
As noted above, prior to the Tax Act, the
Committee could designate awards under the 2013 Plan as qualified performance-based awards for purposes of Section 162(m).
If an award was so designated, the Committee established objectively determinable performance goals for the award. Performance
goals for such awards were based on one or more criteria provided in the 2013 Plan, which performance goals could be expressed
in terms of Company-wide objectives or in terms of objectives that relate to the performance of an affiliate or a division, region,
department or function within the Company or an affiliate. Certain outstanding awards that meet the “grandfather” requirements
under the Tax Act remain subject to these requirements under the 2013 Plan. In addition, while the performance-based compensation
exemption is no longer available for new awards, the Committee may continue to grant awards with performance-based vesting requirements
under the 2013 Plan.
Performance goals with respect to the business
criteria listed in the 2013 plan may be specified in absolute terms, in percentages, or in terms of growth from period to period
or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or
special index, or a stock market index, that the Committee deems appropriate. Any member of a comparator group or an index that
ceases to exist during a measurement period shall be disregarded for the entire measurement period. Performance goals need not
be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the
status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion).
Each qualified performance-based award
(other than a market-priced option or SAR) will be earned, vested and payable, as applicable, upon the achievement of performance
goals established by the Committee based upon one or more of the above-listed qualified business criteria, together with the satisfaction
of any other conditions, such as continued employment, as the Committee may determine to be appropriate. However, the Committee
may provide, either in connection with the grant of an award or by amendment, that achievement of such performance goals will be
waived, in whole or in part, upon the death or disability of the grantee or the occurrence of a change in control of the Company.
Performance periods established by the Committee for any such qualified performance-based award may be as short as three months
and may be any longer period.
The Committee may provide in any qualified
performance-based award that any evaluation of performance will exclude or otherwise objectively adjust for any of the following
events that occurs during a performance period: (a) asset write-downs or impairment charges; (b) litigation or claim judgments
or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results;
(d) accruals for reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in the then-current
accounting principles; (f) extraordinary nonrecurring items as described in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (g)
acquisitions or divestitures; and (h) foreign exchange gains and losses.
Any payment of a qualified performance-based
award will be conditioned on the written certification of the Committee in each case that the performance goals and any other material
conditions were satisfied. Except as specifically provided above, no qualified performance-based award that is exempt under Section
162(m) may be amended, nor may the Committee exercise any discretionary authority it may otherwise have under the 2013 Plan, in
any manner to waive the achievement of the applicable performance goal based on qualified business criteria or to increase the
amount payable pursuant to the performance goal or the value of the award, or otherwise in a manner that would cause the award
to cease to qualify for the Section 162(m) exemption. However, the Committee has the right, in connection with the grant of a qualified
performance-based award, to exercise negative discretion to determine that the portion of such award actually earned, vested and/or
payable (as applicable) shall be less than the portion that would be earned, vested and/or payable based solely upon application
of the applicable performance goals.
Limitations on Transfer; Beneficiaries
No award will be assignable or transferable
by a participant other than by will or the laws of descent and distribution; provided, however, that the Committee may permit other
transfers (other than transfers for value) where the Committee concludes that such transferability does not result in accelerated
taxation, does not cause any option intended to be an incentive stock option to fail to qualify as such, and is otherwise appropriate
and desirable, taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities
laws or regulations applicable to transferable awards. A participant may, in the manner determined by the Committee, designate
a beneficiary to exercise the rights of the participant and to receive any distribution with respect to any award upon the participant’s
death.
Acceleration upon Certain Events
Treatment of Awards upon a Participant’s
Death or Disability
Unless otherwise provided in an award certificate
or any special plan document governing an award, upon the termination of a participant’s service due to death or disability:
|
|
·
|
all of that participant’s outstanding
options and SARs will become fully vested and remain exercisable for a period of one year or until the earlier expiration of the
original term of the option or SAR;
|
|
|
·
|
all time-based vesting restrictions on
that participant’s outstanding awards will lapse as of the date of termination; and
|
|
|
·
|
the payout opportunities attainable under
all of that participant’s outstanding performance-based awards will vest as follows:
|
|
|
o
|
if the date of termination occurs during the first half of the applicable performance period, all
relevant performance goals will be deemed to have been achieved at the “target” level.
|
|
|
o
|
if the date of termination occurs during the second half of the applicable performance period,
the awards will be deemed to have been achieved at the greater of the “target” level or the level of achievement as
measured at the end of the quarter immediately preceding the date of termination.
|
Treatment of Awards upon a Participant’s
Retirement
The 2013 Plan does not provide special
treatment for a participant’s retirement. Any such treatment may be addressed in an individual award certificate, or left
to the Committee’s discretion.
Treatment of Awards upon a Change in Control
Unless otherwise provided
in an award certificate or any special plan document governing an award:
|
|
(A)
|
upon the occurrence of a change in control of the Company in which awards are not assumed by the
surviving entity or otherwise equitably converted or substituted in connection with the change in control in a manner approved
by the Committee or the Board:
|
|
|
·
|
all outstanding options and SARs will
become fully vested and exercisable;
|
|
|
·
|
all time-based vesting restrictions on
outstanding awards will lapse as of the date of the change in control; and
|
|
|
·
|
the payout opportunities attainable under
all outstanding performance-based awards will vest based on target (if the change in control occurs during the first half of the
performance period) or actual performance measured (if greater) as of the end of the calendar quarter immediately preceding the
change in control (if the change in control occurs during the second half of the performance period), and
|
|
|
(B)
|
with respect to awards assumed by the surviving entity or otherwise equitably converted or substituted
in connection with a change in control, if within two years after the effective date of the change in control, a participant’s
employment is terminated without Cause or the participant resigns for Good Reason (as such terms are defined), then:
|
|
|
·
|
all of that participant’s outstanding
options and SARs will become fully vested and exercisable;
|
|
|
·
|
all time-based vesting restrictions on
that participant’s outstanding awards will lapse as of the date of termination; and
|
|
|
·
|
the payout opportunities attainable under
all outstanding performance-based awards will vest based on target (if the change in control occurs during the first half of the
performance period) or actual performance measured as of the end of the calendar quarter immediately preceding the change in control
(if the change in control occurs during the second half of the performance period). In both cases, the awards will payout on a
pro rata basis, based on the time elapsed prior to the change in control.
|
Acceleration for Other Reasons
The Committee may, in its sole discretion
determine that, upon a Participant’s termination of service or a change in control, all or a portion of such participant’s
awards shall become fully or partially exercisable, that some or all restrictions shall lapse, and that any performance criteria
shall be deemed fully or partially satisfied. The Committee may discriminate among participants and among awards in exercising
this discretion.
Adjustments
In the event of a nonreciprocal transaction
between the Company and its shareholders that causes the per share value of the common stock to change (including, without limitation,
any stock dividend, stock split, reverse stock split, spin-off, rights offering, or large nonrecurring cash dividend), the share
authorization limits under the 2013 Plan will be adjusted proportionately, and the Committee must make such adjustments to the
2013 Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting
from such transaction.
Termination and Amendment
If the increase in shares is approved by
shareholders at the Annual Meeting, the 2013 Plan will terminate on the tenth anniversary of the date of the Annual Meeting. Otherwise,
the 2013 Plan will terminate on the tenth anniversary of the date of the 2015 Annual Meeting. In either case, the 2013 Plan may
be terminated earlier by the Board or the Committee. The Board or the Committee may, at any time and from time to time, terminate
or amend the 2013 Plan, but if an amendment to the 2013 Plan would constitute a material amendment requiring shareholder approval
under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to shareholder approval.
No termination or amendment of the 2013 Plan may adversely affect any award previously granted under the 2013 Plan without the
written consent of the participant. Without the prior approval of the Company’s shareholders, the 2013 Plan may not be amended
to directly or indirectly reprice, replace or repurchase “underwater” options or SARs.
The Committee may amend or terminate outstanding
awards. However, such amendments may require the consent of the participant and, unless approved by the shareholders or otherwise
permitted by the anti-dilution provisions of the 2013 Plan, (i) the exercise price or base price of an option or SAR may not be
reduced, directly or indirectly, (ii) an option or SAR may not be cancelled in exchange for cash, other awards, or options or SARS
with an exercise price or base price that is less than the exercise price or base price of the original option or SAR, or otherwise,
(iii) the Company may not repurchase an option or SAR for value (in cash or otherwise) from a participant if the current fair market
value of the shares of common stock underlying the option or SAR is lower than the exercise price or base price per share of the
option or SAR, and (iv) the original term of an option or SAR may not be extended.
Prohibition on Repricing
As indicated above under “Termination
and Amendment,” outstanding stock options and SARs cannot be repriced, directly or indirectly, without the prior consent
of the Company’s shareholders. The exchange of an “underwater” option or stock appreciation right (i.e., an option
or stock appreciation right having an exercise price or base price in excess of the current market value of the underlying stock)
for cash or for another award would be considered an indirect repricing and would, therefore, require the prior consent of the
Company’s shareholders.
Certain Federal Tax Effects
The following discussion is limited to
a summary of the U.S. federal income tax provisions relating to the grant, exercise and vesting of awards under the 2013 Plan and
the subsequent sale of common stock acquired under the 2013 Plan. The tax consequences of awards may vary depending upon the particular
circumstances, and it should be noted that the income tax laws, regulations and interpretations thereof change frequently. Participants
should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability
and effect of state, local, and foreign tax laws.
Nonstatutory Stock Options
There will be no federal income tax consequences
to the optionee or to the Company upon the grant of a nonstatutory stock option under the 2013 Plan. When the optionee exercises
a nonstatutory option, however, he or she will recognize ordinary income in an amount equal to the excess of the fair market value
of the common stock received upon exercise of the option at the time of exercise over the exercise price, and the Company will
be allowed a corresponding deduction. Any gain that the optionee realizes when he or she later sells or disposes of the option
shares will be short-term or long-term capital gain, depending on how long the shares were held.
Incentive Stock Options
There typically will be no federal income
tax consequences to the optionee or to the Company upon the grant or exercise of an incentive stock option. If the optionee holds
the option shares for the required holding period of at least two years after the date the option was granted or one year after
exercise, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will
be long-term capital gain or loss, and the Company will not be entitled to a federal income tax deduction. If the optionee disposes
of the option shares in a sale, exchange, or other disqualifying disposition before the required holding period ends, he or she
will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time
of exercise (or, if less, the amount realized on the disposition of the shares) over the exercise price, and the Company will be
allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in
current taxable income, the excess of the fair market value of the option shares at the time of exercise over the exercise price
will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.
Stock Appreciation Rights
A participant receiving a stock appreciation
right will not recognize income, and the Company will not be allowed a tax deduction, at the time the award is granted. When the
participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of common stock
received will be ordinary income to the participant and the Company will be allowed a corresponding federal income tax deduction
at that time.
Restricted Stock
Unless a participant makes an election
to accelerate recognition of income to the date of grant as described below, the participant will not recognize income, and the
Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject
to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will
recognize ordinary income equal to the fair market value of the common stock as of that date (less any amount he or she paid for
the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable
limitations under Code Section 162(m). If the participant files an election under Code Section 83(b) within 30 days
after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the
fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding
federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). Any future appreciation
in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant
will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.
Stock Units
A participant will not recognize income,
and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Upon receipt of shares of common
stock (or the equivalent value in cash) in settlement of a stock unit award, a participant will recognize ordinary income equal
to the fair market value of the common stock or other property as of that date, and the Company will be allowed a corresponding
federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).
Cash-Based Awards
A participant will not recognize income,
and the Company will not be allowed a tax deduction, at the time a cash-based award is granted (for example, when the performance
goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to
the cash received, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable
limitations under Code Section 162(m).
Benefits to Named Executive Officers
and Others
Awards under the 2013 Plan are granted
at the discretion of the Compensation Committee. Accordingly, future awards under the 2013 Plan are not determinable.
As of the Record Date, 2,415,833 shares
of our common stock have been issued under the 2013 Plan (or remain subject to outstanding awards under the 2013 Plan) since its
inception in 2013. The table below shows the number of shares issued, or subject to outstanding awards, under the Plan to the named
executive officers and the other individuals and groups indicated.
|
Name
|
|
Aggregate Number of Shares
Subject to Options Granted
under the Plan Since Plan
Inception
|
|
|
Aggregate Number of
Shares Subject to
Restricted Stock or
Stock Units Granted
under the Plan Since
Plan Inception
|
|
|
Dennis S. Hudson, III
|
|
|
217,352
|
|
|
|
192,169
|
|
|
Charles M. Shaffer
|
|
|
85,299
|
|
|
|
88,365
|
|
|
Charles K. Cross, Jr.
|
|
|
86,574
|
|
|
|
93,995
|
|
|
David D. Houdeshell
|
|
|
65,550
|
|
|
|
66,987
|
|
|
Juliette P. Kleffel
|
|
|
23,331
|
|
|
|
30,025
|
|
|
All Current Executive Officers as a Group
|
|
|
478,106
|
|
|
|
471,541
|
|
|
All Non-Employee Directors as a Group
|
|
|
235,508
|
|
|
|
131,963
|
|
All Employees as a Group
(Excluding Executive Officers)
|
|
|
341,603
|
|
|
|
757,112
|
|
Securities Authorized for Issuance
Under Equity Compensation Plans
The following table
sets forth information about our common stock that may be issued under all of our existing compensation plans as of December 31,
2017.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
|
remaining available
|
|
|
|
|
(a)
|
|
|
|
|
|
for future issuance
|
|
|
|
|
Number of securities
|
|
|
Weighted average
|
|
|
under equity
|
|
|
|
|
to be issued upon
|
|
|
exercise price of
|
|
|
compensation plans
|
|
|
|
|
exercise of outstanding
|
|
|
outstanding
|
|
|
(excluding securities
|
|
|
|
|
options, warrants
|
|
|
options, warrants
|
|
|
represented
|
|
|
Plan Category
|
|
and rights
|
|
|
and rights
|
|
|
in column (a))
|
|
|
Equity compensation plans approved by shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2000 Plan (1)
|
|
|
0
|
|
|
$
|
0.00
|
|
|
|
0
|
|
|
2008 Plan (2)
|
|
|
0
|
|
|
|
0.00
|
|
|
|
0
|
|
|
2013 Plan (3)
|
|
|
951,349
|
|
|
|
17.29
|
|
|
|
598,913
|
|
|
Employee Stock Purchase Plan (4)
|
|
|
0
|
|
|
|
0.00
|
|
|
|
84,659
|
|
|
TOTAL
|
|
|
951,349
|
|
|
$
|
17.29
|
|
|
|
683,572
|
|
|
|
(1)
|
Seacoast
Banking Corporation of Florida 2000 Long-Term Incentive Plan. Shares reserved under this
plan are available for issuance pursuant to the exercise of stock options and stock appreciation
rights granted under the plan, as well as vesting of performance award shares, and awards
of restricted stock or stock-based awards, previously issued.
|
|
|
(2)
|
Seacoast
Banking Corporation of Florida 2008 Long-Term Incentive Plan. Shares reserved under this
plan are available for issuance pursuant to the exercise of stock options and stock appreciation
rights granted under the plan, as well as vesting of performance award shares, and awards
of restricted stock or stock-based awards, previously issued.
|
|
|
(3)
|
Seacoast
Banking Corporation of Florida 2013 Long-Term Incentive Plan. Shares reserved under this
plan are available for issuance pursuant to the exercise of stock options and stock appreciation
rights granted under the plan, and may be granted as awards of restricted stock, performance
shares, or other stock-based awards, prospectively.
|
|
|
(4)
|
Seacoast
Banking Corporation of Florida Employee Stock Purchase Plan, as amended.
|
The Board of Directors unanimously recommends
a vote “
FOR
” Proposal 3.
PROPOSAL
4
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,
2017, to serve as the Company’s independent auditor for the fiscal year ending December 31, 2018. 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, 2018. 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 4.
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, 2017 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, 2017. 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, 2017 and 2016, including expenses:
|
|
|
2017
|
|
|
2016
|
|
|
Audit Fees
(1)
|
|
$
|
732,907
|
|
|
$
|
548,591
|
|
|
Audit-Related Fees
(2)
|
|
$
|
184,500
|
|
|
$
|
53,500
|
|
|
Tax Fees
(3)
|
|
$
|
59,200
|
|
|
$
|
12,000
|
|
|
All Other Fees
(4)
|
|
$
|
43,465
|
|
|
$
|
10,087
|
|
|
|
(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 2017 for professional services performed in connection with the Company’s filing of certain registration statements
and the related issuance of consents.
|
|
|
(3)
|
Includes tax preparation and compliance activities for the Company and related tax compliance.
|
|
|
(4)
|
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
5
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 2018 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.
Currently,
say-on-pay votes are held by the Company annually, and the next shareholder advisory vote will occur at the 2019 annual
meeting of shareholders.
This Proposal 5 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 5.
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 four directors, Christopher E. Fogal (Chair), Dennis J. Arczynski, Maryann Goebel and Alvaro Monserrat.
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 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 2017, Seacoast paid Humana approximately $73,802 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 originating and executing the matter. In 2017, Seacoast paid Guggenheim Securities $125,000 for advisory services, and
$3.3 million in underwriting fees related to the Company’s capital raise in February 2017.
|
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,
2017, was approximately $1,149,107, which represented approximately 0.17% 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 2017, 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 H. Gilbert Culbreth, Jr.
filed with the SEC on February 1, 2017 which reported the acquisition of 414 shares of common stock on January 25, 2017. The Company
believes that the Form 4 filed on February 1, 2017 reflects Mr. Culbreth’s current holdings. The Form 4 for H. Gilbert Culbreth,
Jr. filed with the SEC on August 2, 2017 which reported the acquisition of 380 shares of common stock on July 14, 2017.
|
|
|
·
|
The Form 4 for Julie H. Daum filed with
the SEC on February 1, 2017 which reported the purchase of 300 shares of common stock on January 25, 2017. The Company believes
that the Form 4 filed on February 1, 2017 reflects Ms. Daum’s current holdings. The Form 4 for Julie H. Daum filed
with the SEC on August 2, 2017 which reported the purchase of 275 shares of common stock on July 14, 2017.
|
|
|
·
|
The Form 4 for Roger O. Goldman filed
with the SEC on February 6, 2017 which reported the acquisition of 300 shares of common stock on January 25, 2017. The Company
believes that the Form 4 filed on February 6, 2017 reflects Mr. Goldman’s current holdings. The Form 4 for Roger O. Goldman
filed with the SEC on August 2, 2017 which reported the acquisition of 275 shares of common stock on July 14, 2017. The Form 5
for Roger O. Goldman filed with the SEC on February 14, 2018 which reported the disposition of 5,500 shares of common stock on
November 17, 2017.
|
|
|
·
|
The Form 4 for Herbert A. Lurie filed
with the SEC on February 1, 2017 which reported the acquisition of 300 shares of common stock on January 25, 2017. The Company
believes that the Form 4 filed on February 1, 2017 reflects Mr. Lurie’s current holdings. The Form 4 for Herbert A. Lurie
filed with the SEC on August 2, 2017 which reported the acquisition of 275 shares of common stock on July 14, 2017.
|
|
|
·
|
The Form 3 for Juliette P. Kleffel filed
with the SEC on December 29, 2017 which reported Ms. Kleffel’s initial statement of beneficial ownership on December 12,
2017.
|
Other
Matters
Principal Offices
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, 2017, 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 2019
Shareholder Proposals
for Inclusion in 2019 Proxy Statement
To be considered for
inclusion in the Company’s proxy statement and proxy card for the 2019 Annual Meeting of Shareholders, a shareholder proposal
must be received at the Company’s principal executive offices no later than December 7, 2018, 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 2019 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 2019 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 25, 2019 and no later than March 25, 2019. 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
Voting at Annual Meeting
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
|
Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock
|
FOR
|
|
3
|
Amend the Company’s 2013 Incentive Plan
|
FOR
|
|
4
|
Ratification of Auditor
|
FOR
|
|
5
|
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 26, 2018, 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 17, 2018 (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 holding in shares “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 on how to vote your shares. It will then be the
record holder’s responsibility to vote your shares 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
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, 2, 3 and 5 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 [●]
shares of common stock issued, outstanding and entitled to be voted, which were held by approximately [●] holders of record.
Therefore, at least [●] 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 2018 Annual Meeting, the following votes are required:
|
|
Proposal
|
Vote Required
|
Do abstentions and
broker non-votes
count as votes cast?
|
Is broker discretionary
voting allowed?
|
|
1
|
Election of Directors
|
Plurality vote
(1)
|
No
|
No
|
|
2
|
Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock
|
Affirmative vote of a majority of votes cast
|
No
|
No
|
|
3
|
Amend the Company’s 2013 Incentive Plan
|
Affirmative vote of a majority of votes cast
|
No
|
No
|
|
4
|
Ratification of Auditor
|
Affirmative vote of a majority of votes cast
|
No
|
Yes
|
|
5
|
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 or reject 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, 2018
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 measures should not be considered an alternative to GAAP.
|
|
|
QUARTER
|
|
|
|
|
Fourth
|
|
|
Third
|
|
|
Second
|
|
|
First
|
|
|
Fourth
|
|
|
(Dollars in thousands
except per share data)
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
13,047
|
|
|
$
|
14,216
|
|
|
$
|
7,676
|
|
|
$
|
7,926
|
|
|
$
|
10,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOLI income (benefits upon death)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Gain on Sale of Visa Class B Shares
|
|
|
(15,153
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Security (gains) / losses
|
|
|
(112
|
)
|
|
|
47
|
|
|
|
(21
|
)
|
|
|
0
|
|
|
|
(7
|
)
|
|
Total
Adjustments to Revenue
|
|
|
(15,265
|
)
|
|
|
47
|
|
|
|
(21
|
)
|
|
|
0
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger related charges
|
|
|
6,817
|
|
|
|
491
|
|
|
|
5,081
|
|
|
|
533
|
|
|
|
561
|
|
|
Amortization of intangibles
|
|
|
963
|
|
|
|
839
|
|
|
|
839
|
|
|
|
719
|
|
|
|
719
|
|
|
Business continuity expenses - Hurricane Irma
|
|
|
0
|
|
|
|
352
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Branch reductions and other expense initiatives
|
|
|
0
|
|
|
|
(127
|
)
|
|
|
1,876
|
|
|
|
2,572
|
|
|
|
163
|
|
|
Early redemption cost for FHLB advances
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Total
Adjustments to Noninterest Expense
|
|
|
7,780
|
|
|
|
1,555
|
|
|
|
7,796
|
|
|
|
3,824
|
|
|
|
1,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate on adjustments
|
|
|
3,147
|
|
|
|
(673
|
)
|
|
|
(2,786
|
)
|
|
|
(1,480
|
)
|
|
|
(404
|
)
|
|
Effect of change in corporate tax rate
|
|
|
8,552
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Adjusted
Net Income
|
|
$
|
17,261
|
|
|
$
|
15,145
|
|
|
$
|
12,665
|
|
|
$
|
10,270
|
|
|
$
|
11,803
|
|
|
Earnings per diluted share, as reported
|
|
|
0.28
|
|
|
|
0.32
|
|
|
|
0.18
|
|
|
|
0.20
|
|
|
|
0.28
|
|
|
Adjusted
Earnings per Diluted Share
|
|
|
0.37
|
|
|
|
0.35
|
|
|
|
0.29
|
|
|
|
0.26
|
|
|
|
0.31
|
|
|
Average shares outstanding (000)
|
|
|
46,673
|
|
|
|
43,792
|
|
|
|
43,556
|
|
|
|
39,499
|
|
|
|
38,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
74,868
|
|
|
$
|
57,183
|
|
|
$
|
54,644
|
|
|
$
|
48,070
|
|
|
$
|
47,354
|
|
|
Total Adjustments to Revenue
|
|
|
(15,265
|
)
|
|
|
47
|
|
|
|
(21
|
)
|
|
|
0
|
|
|
|
(7
|
)
|
|
Adjusted
Revenue
|
|
|
59,603
|
|
|
|
57,230
|
|
|
|
54,623
|
|
|
|
48,070
|
|
|
|
47,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
|
|
|
39,184
|
|
|
|
34,361
|
|
|
|
41,625
|
|
|
|
34,746
|
|
|
|
30,297
|
|
|
Total Adjustments to Noninterest Expense
|
|
|
7,780
|
|
|
|
1,555
|
|
|
|
7,796
|
|
|
|
3,824
|
|
|
|
1,443
|
|
|
Adjusted
Noninterest Expense
|
|
|
31,404
|
|
|
|
32,806
|
|
|
|
33,829
|
|
|
|
30,922
|
|
|
|
28,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Noninterest Expense
|
|
|
31,404
|
|
|
|
32,806
|
|
|
|
33,829
|
|
|
|
30,922
|
|
|
|
28,854
|
|
|
Foreclosed property expense and net (gain)/loss
on sale
|
|
|
(7
|
)
|
|
|
(298
|
)
|
|
|
297
|
|
|
|
(293
|
)
|
|
|
(78
|
)
|
|
Net Adjusted Noninterest Expense
|
|
|
31,411
|
|
|
|
33,104
|
|
|
|
33,532
|
|
|
|
31,215
|
|
|
|
28,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
|
|
|
59,603
|
|
|
|
57,230
|
|
|
|
54,623
|
|
|
|
48,070
|
|
|
|
47,347
|
|
|
Impact of FTE adjustment
|
|
|
174
|
|
|
|
154
|
|
|
|
164
|
|
|
|
211
|
|
|
|
204
|
|
|
Adjusted Revenue on a fully taxable equivalent
basis
|
|
|
59,777
|
|
|
|
57,384
|
|
|
|
54,787
|
|
|
|
48,281
|
|
|
|
47,551
|
|
|
Adjusted
Efficiency Ratio
|
|
|
52.6
|
%
|
|
|
57.7
|
%
|
|
|
61.2
|
%
|
|
|
64.7
|
%
|
|
|
60.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Assets
|
|
$
|
5,716,230
|
|
|
$
|
5,316,119
|
|
|
$
|
5,082,002
|
|
|
$
|
4,699,745
|
|
|
$
|
4,572,188
|
|
|
Less average goodwill and intangible assets
|
|
|
(149,432
|
)
|
|
|
(118,364
|
)
|
|
|
(114,563
|
)
|
|
|
(78,878
|
)
|
|
|
(79,620
|
)
|
|
Average Tangible Assets
|
|
|
5,566,798
|
|
|
|
5,197,755
|
|
|
|
4,967,439
|
|
|
|
4,620,867
|
|
|
|
4,492,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Assets (ROA)
|
|
|
0.91
|
%
|
|
|
1.06
|
%
|
|
|
0.61
|
%
|
|
|
0.68
|
%
|
|
|
0.94
|
%
|
|
Impact of removing average intangible assets
and related amortization
|
|
|
0.06
|
|
|
|
0.06
|
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
0.06
|
|
|
Return on Tangible Average Assets (ROTA)
|
|
|
0.97
|
|
|
|
1.12
|
|
|
|
0.66
|
|
|
|
0.74
|
|
|
|
1.00
|
|
|
Impact of other adjustments for Adjusted Net
Income
|
|
|
0.26
|
|
|
|
0.04
|
|
|
|
0.36
|
|
|
|
0.16
|
|
|
|
0.05
|
|
|
Adjusted
Return on Average Tangible Assets
|
|
|
1.23
|
|
|
|
1.16
|
|
|
|
1.02
|
|
|
|
0.90
|
|
|
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shareholders' Equity
|
|
$
|
657,100
|
|
|
$
|
587,919
|
|
|
$
|
567,448
|
|
|
$
|
466,847
|
|
|
$
|
437,077
|
|
|
Less average goodwill and intangible assets
|
|
|
(149,432
|
)
|
|
|
(118,364
|
)
|
|
|
(114,563
|
)
|
|
|
(78,878
|
)
|
|
|
(79,620
|
)
|
|
Average Tangible Equity
|
|
|
507,668
|
|
|
|
469,555
|
|
|
|
452,885
|
|
|
|
387,969
|
|
|
|
357,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Shareholders' Equity
|
|
|
7.9
|
%
|
|
|
9.6
|
%
|
|
|
5.4
|
%
|
|
|
6.9
|
%
|
|
|
9.8
|
%
|
|
Impact of removing average intangible assets
and related amortization
|
|
|
2.8
|
|
|
|
2.9
|
|
|
|
1.9
|
|
|
|
1.9
|
|
|
|
2.7
|
|
|
Return on Average Tangible Common Equity
(ROTCE)
|
|
|
10.7
|
|
|
|
12.5
|
|
|
|
7.3
|
|
|
|
8.8
|
|
|
|
12.5
|
|
|
Impact of other adjustments for Adjusted Net
Income
|
|
|
2.8
|
|
|
|
0.3
|
|
|
|
3.9
|
|
|
|
1.9
|
|
|
|
0.6
|
|
|
Adjusted
Return on Average Tangible Common Equity
|
|
|
13.5
|
|
|
|
12.8
|
|
|
|
11.2
|
|
|
|
10.7
|
|
|
|
13.1
|
|
|
|
|
YTD
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
(Dollars
in thousands except per share data)
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
42,865
|
|
|
$
|
29,202
|
|
|
|
|
|
|
|
|
|
|
|
|
BOLI income (benefits upon death)
|
|
|
0
|
|
|
|
(464
|
)
|
|
Gain on Sale of Visa Class B Shares
|
|
|
(15,153
|
)
|
|
|
0
|
|
|
Security (gains) / losses
|
|
|
(86
|
)
|
|
|
(368
|
)
|
|
Total
Adjustments to Revenue
|
|
|
(15,239
|
)
|
|
|
(832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Merger related charges
|
|
|
12,922
|
|
|
|
9,028
|
|
|
Amortization of intangibles
|
|
|
3,360
|
|
|
|
2,486
|
|
|
Business continuity expenses - Hurricane Irma
|
|
|
352
|
|
|
|
0
|
|
|
Branch reductions and other expense initiatives
|
|
|
4,321
|
|
|
|
3,357
|
|
|
Early redemption cost for
FHLB advances
|
|
|
0
|
|
|
|
1,777
|
|
|
Total
Adjustments to Noninterest Expense
|
|
|
20,955
|
|
|
|
16,648
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate on adjustments
|
|
|
(1,792
|
)
|
|
|
(5,949
|
)
|
|
Effect of change in corporate
tax rate
|
|
|
8,552
|
|
|
|
0
|
|
|
Adjusted
Net Income
|
|
$
|
55,341
|
|
|
$
|
39,069
|
|
|
Earnings per diluted share, as reported
|
|
|
0.99
|
|
|
|
0.78
|
|
|
Adjusted
Earnings per Diluted Share
|
|
|
1.28
|
|
|
|
1.04
|
|
|
Average shares outstanding (000)
|
|
|
43,350
|
|
|
|
37,508
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
234,765
|
|
|
$
|
177,383
|
|
|
Total Adjustments to Revenue
|
|
|
(15,239
|
)
|
|
|
(832
|
)
|
|
Adjusted
Revenue
|
|
|
219,526
|
|
|
|
176,551
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
|
|
|
149,916
|
|
|
|
130,881
|
|
|
Total Adjustments to Noninterest
Expense
|
|
|
20,955
|
|
|
|
16,648
|
|
|
Adjusted
Noninterest Expense
|
|
|
128,961
|
|
|
|
114,233
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Noninterest Expense
|
|
|
128,961
|
|
|
|
114,233
|
|
|
Foreclosed property expense
and net (gain)/loss on sale
|
|
|
(301
|
)
|
|
|
43
|
|
|
Net Adjusted Noninterest
Expense
|
|
|
129,262
|
|
|
|
114,190
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
|
|
|
219,526
|
|
|
|
176,551
|
|
|
Impact of FTE adjustment
|
|
|
703
|
|
|
|
204
|
|
|
Adjusted Revenue on a fully
taxable equivalent basis
|
|
|
220,229
|
|
|
|
176,755
|
|
|
Adjusted
Efficiency Ratio
|
|
|
58.7
|
%
|
|
|
64.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average Assets
|
|
$
|
5,206,617
|
|
|
$
|
4,201,819
|
|
|
Less average goodwill and
intangible assets
|
|
|
(115,511
|
)
|
|
|
(66,608
|
)
|
|
Average Tangible Assets
|
|
|
5,091,106
|
|
|
|
4,135,211
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Assets (ROA)
|
|
|
0.82
|
%
|
|
|
0.69
|
%
|
|
Impact of removing average
intangible assets and related amortization
|
|
|
0.06
|
|
|
|
0.05
|
|
|
Return on Tangible Average
Assets (ROTA)
|
|
|
0.88
|
|
|
|
0.74
|
|
|
Impact of other adjustments
for Adjusted Net Income
|
|
|
0.21
|
|
|
|
0.20
|
|
|
Adjusted
Return on Average Tangible Assets
|
|
|
1.09
|
|
|
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shareholders' Equity
|
|
$
|
570,399
|
|
|
$
|
406,084
|
|
|
Less average goodwill and
intangible assets
|
|
|
(115,511
|
)
|
|
|
(66,608
|
)
|
|
Average Tangible Equity
|
|
|
454,888
|
|
|
|
339,476
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Shareholders' Equity
|
|
|
7.5
|
%
|
|
|
7.2
|
%
|
|
Impact of removing average
intangible assets and related amortization
|
|
|
2.4
|
|
|
|
1.9
|
|
|
Return on Average Tangible
Common Equity (ROTCE)
|
|
|
9.9
|
|
|
|
9.1
|
|
|
Impact of other adjustments
for Adjusted Net Income
|
|
|
2.3
|
|
|
|
2.4
|
|
|
Adjusted
Return on Average Tangible Common Equity
|
|
|
12.2
|
|
|
|
11.5
|
|
LOCATION
OF THE 2018 ANNUAL MEETING OF SHAREHOLDERS
Our 2018 Annual Meeting will be held at
the Hutchinson Shores Resort:
3793 NE Ocean Blvd, Jensen Beach, FL 34957
Directions Taking Florida’s Turnpike
|
|
·
|
Exit 142 at Port St. Lucie
|
|
|
|
|
|
|
·
|
Turn right onto Port St. Lucie Boulevard from the exit ramp.
|
|
|
|
|
|
|
·
|
Turn right at US Highway 1
|
|
|
|
|
|
|
·
|
Turn left onto Jensen Beach Boulevard
|
|
|
|
|
|
|
·
|
Turn left at NE Indian River Drive
|
|
|
|
|
|
|
·
|
Merge onto Causeway Boulevard from the first exit at the rotary
|
|
|
|
|
|
|
·
|
Merge right on Highway A1A / NE Ocean Boulevard
|
|
|
|
|
|
|
·
|
Hutchinson Shores Resort will be on the left hand side
|
|
|
|
|
|
|
·
|
Visitor’s parking is on the left side of the property
|
Directions Taking Interstate 95
|
|
·
|
Exit I-95 at SR 76 Kanner Hwy. (Exit 101)
|
|
|
|
|
|
|
·
|
If traveling northbound on I-95 turn right onto Kanner Hwy from the
exit ramp.
|
|
|
|
|
|
|
·
|
If traveling southbound on I-95 turn left onto Kanner Hwy from the
exit ramp.
|
|
|
|
|
|
|
·
|
Merge right onto NE Ocean Boulevard / Highway A1A from the first exit
at the rotary.
|
|
|
|
|
|
|
·
|
Hutchinson Shores Resort will be on the right hand side
|
|
|
|
|
|
|
·
|
Visitor’s parking is on the left side of the property
|
Arriving by Car Service or Taxi:
If arriving by a car service, please direct drop off at the
front entrance lobby.
*** Exercise Your Right to Vote *** Important Notice Regarding
the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 24, 2018. 815 COLORADO AVENUE P.O. BOX 9012
STUART, FL 34995-9012 ATTN: KATHY HSU Meeting Information Meeting Type: Annual Meeting of Shareholders Record Date: March 26,
2018 Meeting Date: May 24, 2018 Time: 3:00 PM EDT Location: Hutchinson Shores Resort 3793 NE Ocean Blvd. Jensen Beach, Florida
34957 You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot
use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are
available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy
(see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before
voting. See the reverse side of this notice to obtain proxy materials and voting instructions. E42083-P05184
Before You Vote How to Access the Proxy Materials Proxy Materials
Available to VIEW or RECEIVE: 1. Notice & Proxy Statement 2. 2017 Annual Report on Form 10-K 3. Chairman's Letter How to View
Online: Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page)
and visit: www.proxyvote.com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy
of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods
to make your request: 1) BY INTERNET: www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*: sendmaterial@proxyvote.com
* If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the
arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. Requests, instructions and other inquiries sent
to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before
May 10, 2018 to facilitate timely delivery. How To Vote Please Choose One of the Following Voting Methods Vote In Person: Please
check the proxy materials for any special requirements for voting in person at the meeting. We recommend you vote in advance even
if you plan to attend the meeting. You can vote in person at the meeting even if you previously voted and such in-person vote
will replace your prior vote. Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is
printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions.
Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. E42084-P05184
Voting Items The Board of Directors recommends a vote FOR ALL
director nominees and FOR Proposals 2, 3, 4 and 5. 1. Elect Directors 01) Jacqueline L. Bradley 02) H. Gilbert Culbreth, Jr. 03)
Christopher E. Fogal 04) Timothy S. Huval 05) Herbert A. Lurie 2. Amendment to the Company’s Amended and Restated Articles
of Incorporation to Increase Authorized Common Stock 3. Amend the 2013 Incentive Plan to Increase Authorized Shares 4. Ratification
of Appointment of Independent Auditor 5. Advisory (Non-binding) Vote on Executive Compensation In their discretion, the Proxies
are authorized to vote upon such other matters as may properly come before the Annual Meeting. E42085-P05184
E42086-P05184
815 COLORADO AVENUE P.O. BOX 9012 STUART, FL 34995-9012 ATTN:
KATHY HSU VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery
of information up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the
day before the meeting date (for all other shares). Have your proxy card in hand when you access the web site and follow the instructions
to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone
telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held
in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you call and
then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have
provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS If you would like to reduce the costs incurred by Seacoast in mailing proxy materials, you can consent to receiving
all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic
delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive
or access proxy materials electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E42075-P05184
KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY SEACOAST
BANKING CORPORATION OF FLORIDA For Withhold For All To withhold authority to vote for any individual All All Except nominee(s),
mark "For All Except" and write the The Board of Directors recommends a vote FOR number(s) of the nominee(s) on the
line below. ALL director nominees and FOR Proposals 2, 3, 4 and 5. 1. Elect Directors 01) Jacqueline L. Bradley 02) H. Gilbert
Culbreth, Jr 03) Christopher E. Fogal 04) Timothy S. Huval For Against Abstain 05) Herbert A. Lurie 2. Amendment to the Company’s
Amended and Restated Articles of Incorporation to Increase Authorized Common Stock 3. Amend the 2013 Incentive Plan to Increase
Authorized Shares 4. Ratification of Appointment of Independent Auditor 5. Advisory (Non-binding) Vote on Executive Compensation
In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting.
Please sign exactly as your name(s) appear(s) hereon. Joint owners should each sign personally. When signing as attorney, executor,
administrator, trustee, custodian or guardian, please give full title as such. If a corporation or partnership, please sign in
full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting: The Notice & Proxy Statement, our 2017 Annual Report on Form 10-K and the Chairman's Letter are available
at www.proxyvote.com. E42076-P05184 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEACOAST BANKING CORPORATION OF FLORIDA
FOR THE 2018 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD THURSDAY, MAY 24, 2018 at 3:00 P.M. FOR REGISTERED SHAREHOLDERS: The undersigned
shareholder(s) hereby appoint(s) Tracey Dexter and John R. Turgeon, or either of them, each with full power of substitution, as
Proxies, and hereby authorize(s) them to represent and to vote all shares of the Common Stock of Seacoast Banking Corporation
of Florida (“Seacoast”) that the undersigned may be entitled to vote at the Annual Meeting of Shareholders to be held
at Hutchinson Shores Resort, 3793 NE Ocean Blvd., Jensen Beach, Florida, on Thursday, May 24, 2018, at 3:00 P.M., local time,
and at any adjournments or postponements thereof (the “Annual Meeting”), as designated on the reverse side of this
ballot, upon the proposals described in the Proxy Statement and the Notice of Annual Meeting of Shareholders, both dated April
6, 2018. FOR PARTICIPANTS IN SEACOAST’S EMPLOYEE BENEFIT PLANS: This form provides voting instructions to the trustees for
the shares of the Common Stock of Seacoast Banking Corporation of Florida (“Seacoast”) held in Seacoast’s Employee
Stock Purchase Plan and Retirement Savings Plan (collectively and individually, the “Employee Plans”). Please complete
this form, sign your name exactly as it appears on the reverse side and return it in the enclosed envelope. To allow sufficient
time for the trustees to tabulate and vote the plan shares, we must receive your voting instructions no later than 11:59 p.m.
on May 18, 2018 (the “cut-off date”) to be counted. As a participant in one or both of the Employee Plans, the undersigned
authorizes One America as Trustee of the Retirement Savings Plan for Employees of Seacoast National Bank and/or authorizes Seacoast
National Bank as Trustee of Seacoast’s Employee Stock Purchase Plan to vote all shares of the Common Stock in Seacoast allocated
to the undersigned’s account under such plan(s) at Seacoast’s Annual Meeting of Shareholders to be held at Hutchinson
Shores Resort, 3793 NE Ocean Blvd., Jensen Beach, Florida, on Thursday, May 24, 2018, at 3:00 P.M., local time, and at any adjournments
or postponements thereof (the “Annual Meeting”), as directed below, upon the proposals described in the Proxy Statement
and the Notice of Annual Meeting of Shareholders, both dated April 6, 2018. When this form is properly executed and received by
the cut-off date, the shares in the Employee Plans will be voted as directed by you. Shares held in the Employee Stock Purchase
Plan will not be voted if you do not give voting instructions on such shares. If you do not give voting instructions for the shares
allocated to your account in the Retirement Savings Plan, the Trustee may vote or not vote, in its sole discretion, the shares
of stock equivalents in your account. When this proxy is properly executed, all shares will be voted in the manner directed herein.
If no direction is specified, this proxy will be voted in accordance with the recommendations of the Board of Directors. (Continued,
and to be marked, dated and signed, on the other side)
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