UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
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by the Registrant x
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by a Party other than the Registrant ¨
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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)
Payment of Filing Fee (check the appropriate
box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
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Title of each class of securities 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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Proposed maximum aggregate value of transaction:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Form, Schedule, or Registration Statement No.:
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Proxy
Statement
2020
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815
Colorado Avenue
Stuart, Florida 34994
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NOTICE
OF 2020 ANNUAL MEETING OF SHAREHOLDERS
Wednesday,
May 27, 2020
10:00 a.m. Eastern Time
Seacoast
Banking Corporation of Florida (“Seacoast”, or the “Company”) intends to hold its 2020 Annual Meeting
of Shareholders (the “Annual Meeting”) at the Hutchinson Shores Resort, 3793 NE Ocean Blvd, Jensen Beach, FL 34957,
on Wednesday, May 27, 2020 at 10:00 a.m. Eastern Time. However, we are sensitive to the public health and travel concerns our
shareholders may have and recommendations that public health officials have and may continue to issue in light of the evolving
coronavirus (COVID-19) pandemic. As a result, we may impose additional procedures or limitations on meeting attendees or may decide
to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan
to announce any such updates on our proxy website www.proxyvote.com, and we encourage you to check this website prior to the meeting
if you plan to attend.
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 elect four Class III directors (“Proposal 1”);
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2.
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Ratification
of Appointment of Independent Auditor. To ratify the appointment of Crowe LLP as
independent auditors for Seacoast for the fiscal year ending December 31, 2020 (“Proposal
2”);
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3.
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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 3”); and
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4.
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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 30, 2020, which is the record date
for the Annual Meeting. This Notice of the 2020 Annual Meeting of Shareholders and the accompanying proxy statement are sent by
order of the Company’s Board of Directors.
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 or by e-mail.
By voting prior to the Annual Meeting, you will help ensure that we have a quorum and that your preferences will be expressed
on the matters that are being considered.
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Dennis S. Hudson, III
Chairman & Chief Executive Officer
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April
10, 2020
SHAREHOLDER
LETTER
To
our fellow shareholders, customers, partners and friends:
Seacoast
delivered record-breaking financial performance in 2019, propelled by our balanced growth strategy. Solid organic growth,
disciplined acquisitions, and careful cost controls enabled us to outperform our peers. Our outlook for 2020, as with all
businesses in the country and around the world, must be framed within the context of COVID-19. Our approach to address the
pandemic thus far has been to carefully adjust our operations to protect the health of our associates and customers, while
continuing to offer digital banking products and services that can be accessed anywhere. We are closely monitoring the
results of these operational adjustments and will continue to fine tune them in the weeks ahead in order to minimize risk and
maximize the bank’s performance.
In
2019, the bank produced net revenue of $300.4 million, an increase of 15 percent from 2018, and achieved $98.7 million in net
income, up 47 percent from the prior year. Adjusted net revenue1 in 2019 was $298.2 million, an increase of 14 percent
from 2018, and adjusted net income1 was $104.6 million, up 32 percent from the prior year. We achieved $1.90 in diluted
earnings per share, 38 percent higher than 2018, and $2.01 in adjusted earnings per share1, a rise of 24 percent from
2018 returns. In 2019, we also increased tangible book value per share to $14.76 from $12.33, an improvement of 20 percent for
a key indicator of improved shareholder value. Other 2019 highlights include:
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Loans
totaled $5.2 billion at December 31, 2019, an increase of $0.4 billion, or 8 percent, from December 31, 2018. Seacoast ended
the year with record originations of $1.8 billion, attributed to continued innovation in customer analytics and our continued
expansion into the fast-growing markets of Tampa, Orlando, and South Florida.
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Assets
at year’s end totaled $7.1 billion, up from $6.7 billion at year’s end 2018.
This reflects the 2018 acquisition of First Green Bancorp, Inc., which expanded our presence
in the attractive Orlando, Daytona and Fort Lauderdale markets.
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Total
deposits were $5.6 billion as of December 31, 2019, an increase of $408 million, or 8
percent, from the prior year. Interest bearing deposits increased year-over-year by $127
million, or 5 percent, to $2.8 billion. Noninterest bearing demand deposits increased
1 percent, and certificates of deposit increased 28 percent.
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Seacoast
consolidated three banking center locations in 2019, achieving the Vision 2020 objective of reducing the Bank’s
footprint by 20 percent to meet evolving customer needs. Successful M&A and the repositioning of the banking center
network in strategic growth markets helped us achieve this goal ahead of plan.
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As
customer needs continue to evolve and operational efficiencies are created, so does our commitment to continual investments in
our people, processes, and technology. These important investments enable future growth and scalability. Key investments in 2019
include:
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The
implementation of a digital loan origination platform across all business banking units,
an initiative that began in late 2018. In the fourth quarter of 2019, this platform enabled
record loan originations by the commercial banking team. We expect further gains in operational
efficiency and banker productivity in 2020 and beyond.
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Enhancements
to the interactive voice response (IVR) system in the Florida-based Customer Support
Center. The system provides customers with secure, self-serve options, and expedites
call routing processes. This investment will continue to improve scalability and elevate
the customer experience.
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Exceptional
customer service is a critically important part of our value proposition. In 2019, Seacoast
partnered with a leading consumer insights firm to capture and analyze feedback from
customers. We will leverage these insights to improve the customer service experience
in 2020 and beyond.
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Looking
ahead, the economy will continue to be affected by the social distancing measures necessary to contain the COVID-19 virus.
However, we are encouraged by the relief bill passed by the U.S. Congress in an effort to blunt the effects of the virus.
And, as an SBA preferred lender, our focus for the second and third quarters will be operationalizing the Paycheck Protection
Program (PPP) and helping our customers take advantage of the program until and after the pandemic is contained.
In
2020, Seacoast will continue to seek to drive long-term value for shareholders with value-creating, disciplined acquisitions
as an accelerant. We were proud to be named Best M&A Strategy by Bank Director magazine as part of their 2020
RankingBanking study. The acquisition of First Bank of the Palm Beaches in the first quarter of 2020 increases
Seacoast’s market share as the #1 community bank in the attractive Palm Beach market. In January 2020, Seacoast
announced the proposed acquisition of Fourth Street Banking Company (Fourth Street), the holding company for Freedom Bank of
St. Petersburg. The transaction will be Seacoast’s third in the last three years in the Tampa-St. Petersburg
metropolitan statistical area (MSA), the second largest and one of the fastest growing MSAs in Florida.
1
Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
We
have a deep and highly talented management team and a board with the right skills and background to help us adapt to the current
economic environment and refine and implement our strategy. Our team and board jointly have been the architects of our highly
successful business model, which continues to evolve. As we seek to maximize our business model we remain committed to top-tier
performance and will maintain our risk profile and discipline.
While
the economic effects of COVID-19 may alter our pace in the second and third quarters of 2020, we are confident our strategy will
continue to create shareholder value now and in the years ahead.
Sincerely,
Dennis
S. Hudson, III
Chairman
and Chief Executive Officer
VOTING
INFORMATION
How
to Cast Your Vote
You
may vote if you were a shareholder as of the close of business on March 30, 2020.
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ONLINE:
www.proxyvote.com
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MAIL:
Complete,
sign, date and return your proxy card in the envelope provided.
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PHONE:
Call
the number on your proxy card or voting instruction form.
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IN
PERSON:
Vote
by ballot in person at the Annual Meeting
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For
telephone and internet voting, you will need the 16-digit control number included in your notice, proxy card or 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 20, 2020 (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.
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.
If
you are able to attend the Annual 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”.
If you hold your shares in street name, you must obtain a proxy from the record holder in order to vote in person.
If
Seacoast determines that the Annual Meeting will be held by remote-means only due to public safety and health concerns resulting
from the ongoing COVID-19 global pandemic, you will be able to vote your shares by any of the means outlined herein other than
in-person.
How
to View Proxy Materials Online
Important
Notice Regarding the Availability of Proxy Materials for the 2020 Shareholder Meeting
Our
2020 proxy statement and 2019 Annual Report on Form 10-K (referred to collectively as the “proxy materials”) are available
online at: www.proxyvote.com or at www.SeacoastBanking.com/CustomPage/Index?keyGenPage=1073754500.
We
have mailed to certain shareholders a notice of internet availability of proxy materials on or about April 10, 2020. 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.
PROXY
SUMMARY
Introduction
We
believe our balanced growth strategy, which is focused on organic growth and disciplined acquisitions in growing markets, is delivering
value for our shareholders.
In
this section, we summarize 2019 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 2019 Annual Report on Form 10-K
before you vote.
2019
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 2019 produced outstanding results year over year:
For
the year ended December 31, 2019, the Company reported $98.7 million in net income, or $1.90 per share, an increase of 47% year-over-year.
Net revenue for the same period was $300.4 million, an increase of 15% year-over-year. The Company continued to see positive performance
reflected in its ratios, with a return on average tangible assets of 1.56%, return on average tangible shareholders’ equity
of 14.7% and an efficiency ratio of 51.7%.
Our
balanced growth strategy combines organic growth and select strategic M&A along with prudent risk management, leading to strong
results. We transformed our integrated data analytics and marketing automation beginning in late 2014, and have seen success in
deepening existing customer relationships and achieving incremental organic growth among existing tenured customers.
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4th
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#1
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20%
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204,041
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Largest
Florida bank
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Florida
headquartered
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Average
IRR
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Customers
served
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bank
in Orlando MSA
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acquisition
execution
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1
Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Our
performance and future growth are driven by a differentiated strategy consisting of six key themes:
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Comprehensive
Organic
Growth
Model
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Focused
on Controls
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Track
Record of Value Creating
Acquisitions
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Multi-channel
distribution system
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Skilled
underwriting team
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Enabled
expansion in attractive Florida
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Attracts
customers from larger
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Well-defined
portfolio limits and
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markets
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competitors
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monitoring
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9
acquisitions successfully completed
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Mixes
modern convenience and
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Balanced
loan sizes and concentrations
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since
2014
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community
bank service
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Credit
culture is reinforced in organization
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Furthered
expansion along Florida’s
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Deepens
relationships
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I-4
corridor
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Innovates
our business model
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Drives
growth
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Well-Positioned
to Benefit
From Florida Market
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Advanced
Analytical & Digital
Capabilities
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Experienced
Board &
Management Team
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Projected
17th largest economy in the
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Creates
value for our customers and
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Refreshed
its Board of Directors
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world
based on World Bank ratings
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shareholders
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7
key members added since 2013
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Florida’s
economy surpassed $1 trillion
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Recognized
leader amongst community
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Lead
Director refreshment in 2018
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in
2018
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banks
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Strong
Executive talent added in
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Diversified,
with continued growth
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Recipient
of numerous awards
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key
areas
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opportunity
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Limited
Florida based headquarters
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increasing
Seacoast’s scarcity value
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Strategic
Execution Framework
Seacoast
meets customer needs profitably through an evolving distribution network.
Value
Creation for our Shareholders
Our
Balanced Growth Strategy is Driving Strong Earnings Performance
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YE
Total Assets
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YE
Market Capitalization
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Adjusted
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($
in Billions)
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($
in Billions)
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FY
EPS1
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Adjusted
FY Return on Tangible
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Adjusted
FY Return on Tangible
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Adjusted
FY
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Equity1
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Assets1
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Efficiency
Ratio1
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1
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Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP
Financial Measures.
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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 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. In 2019, the CGC redesigned the compensation
structure to better align compensation decisions relative to the peer group.
The
following table summarizes the primary elements of our executive compensation for 2019:
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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 did not increase in 2019. Base salaries for our other named executive officers remained unchanged
in 2019, except for adjustments made in recognition of Mr. Shaffer’s promotion to COO (23% salary increase) and
Ms. Kleffel’s expanded role as the Central Florida Market President (8% salary increase).
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Performance
Share Units (“PSUs”)
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Align
compensation with our business strategy and long-term shareholder value while providing a strong retention element.
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The
number of PSUs granted was 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 upon vesting varies based on stock price performance over the vesting period.
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PSUs
granted in 2019 vest based on the level of achievement of goals relating to average annual EPS growth and return on average
tangible common equity over a three-year period (2019-2021) relative to a peer group. PSUs for which performance goals
are met will vest on December 31, 2022, subject to the grantee’s continued service.
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Restricted
Stock Awards (“RSAs”)
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Provide
a strong retention element and align executive and shareholder interests.
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The
amount of RSAs granted is determined by the CGC after consideration of each executive’s performance scorecard. The
realized value of RSAs is based on stock price performance over the vesting period.
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RSAs
granted in 2019 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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Election
of Three Class III Directors
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FOR
ALL
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Plurality
vote*
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2
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Ratification
of Appointment of Crowe LLP as Independent Auditor for 2020
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FOR
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Affirmative
vote of a majority of votes cast
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3
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Advisory
(Non-binding) Vote 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, elect three Class III 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
2023 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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Julie
H. Daum
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65
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2013
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Senior
director of national executive and board search firm
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✔
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0
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Dennis
S. Hudson, III
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64
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1984
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Chairman
of Company and Bank
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1
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Alvaro
J. Monserrat
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51
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2017
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Independent
advisor of business strategy and execution for CEOs of technology start-up companies
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✔
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0
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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
relevant 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 utilize 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 Chair 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:
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Director
Eligibility Guidelines
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Personal
Characteristics
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Core
Competencies
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• 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
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• substantial
business or professional experience and ability 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,
prominent academic or similar position of significant responsibility
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The
CGC also considers numerous other qualities, skills and characteristics when evaluating director nominees, such as a candidate’s:
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•
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understanding
of and experience in the financial services industry, as well as accounting, finance, legal, real estate, corporate governance
and technology expertise;
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•
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leadership
experience with public companies or other major organizations, as well as civic and community relationships;
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•
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availability
and commitment to carry out the responsibilities as a director;
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•
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knowledge,
experience and skills that enhance the mix of the Board’s core competencies and provide a different perspective;
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•
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the
absence of any real or perceived conflict of interest that would impair the director’s ability to act in the interest of
shareholders; and
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•
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qualification
as an independent director.
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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.
For our 2020 Shareholder Meeting, no shareholder nominee recommendations were received.
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.
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 shareholders also have expressed a preference for an annual vote. 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 2019 annual meeting increased compared to the prior year. (See “Outcome of our
2019 Say-On-Pay vote” in the table below.) Shareholder support of directors standing for re-election at the 2019 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
|
|
Continue
to deliver industry leading financial results and achieve Vision 2020 goals
|
Delivered Promised Results. Delivered
2019 earnings of $1.90 diluted EPS and $2.01 diluted adjusted EPS1. Improved efficiency ratio from 62.4% in fourth
quarter of 2016 to 48.4% in fourth quarter 2019 and adjusted efficiency ratio1 from 60.8% in fourth quarter 2016 to
47.5% in the fourth quarter of 2019.
|
|
Continue
to emphasize stock ownership by management and directors
|
Increased
the percentage of PSU Awards under the long-term incentive plan (“LTIP”) paid to executive officers for achievement
of performance objectives in 2019. All of our directors are paid a stock retainer; some defer a portion or all of their cash
compensation into our director deferred compensation plan.
|
|
Outcome
of our 2019 Say- On-Pay vote
|
At
our 2019 annual meeting of shareholders, our say-on-pay proposal received the support of 99.7% 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.
|
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 group of directors or individual director, as appropriate,
at the next regular meeting of the Board.
1
Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Board
and Governance Highlights
Board
Composition
Over
the past 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 Compensation and Governance Committee
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 focus on creating shareholder value over the
long term. Seacoast continues to build a diverse Board with experience aligned with our strategic mission to ensure a balanced
mix of directors with a deep knowledge of Seacoast and its markets, as well as new members with fresh perspectives.
Board
Refreshment and Characteristics (Non-Executive Directors)
|
|
Skills and Qualification Mix
We have revitalized our Board to align with our balanced
growth strategy. Below are the mix of skills and qualifications of our Board as of the Annual Meeting date:
|
Skills
and Qualifications
|
Dennis
J. Arczynski
|
Jacqueline
L. Bradley
|
H.
Gilbert Culbreth, Jr.
|
Julie
H. Daum
|
Christopher
E. Fogal
|
Maryann
Goebel
|
Dennis
S. Hudson, III
|
Robert
J. Lipstein
|
Herbert
A. Lurie
|
Alvaro
J. Monserrat
|
Thomas
E. Rossin
|
|
Accounting
experience is important in overseeing our financial reporting and internal controls and M&A
|
✔
|
|
|
|
✔
|
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Banking
/ Investments experience is important to guide product evolution and lead investment initiatives
|
✔
|
✔
|
|
|
✔
|
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Executive
Leadership experience is important to monitor strategy and performance
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Financial
Services experience is important to manage our business model and revenue generating services
|
✔
|
✔
|
|
|
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Governance
/ Legal experience is important to conduct decision-making and validate implementation
|
✔
|
|
|
✔
|
|
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Data
Analytics experience is important for innovation and strengthening profitability and understanding customers
|
✔
|
|
|
|
|
✔
|
✔
|
|
|
✔
|
|
|
Local
Community experience and stature is important in understanding the customer segments in markets served
|
|
✔
|
✔
|
|
✔
|
|
✔
|
|
|
✔
|
✔
|
|
Marketing
/ Digital experience is important to assess brand loyalty, customer experiences and create valuable customer relationships
and long-term profitability
|
✔
|
|
|
|
|
|
✔
|
|
|
✔
|
|
|
Regulatory
/ Compliance experience is important to monitor compliance and regulatory requirements
|
✔
|
|
|
|
✔
|
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Risk
Management experience is important in overseeing the risks throughout the organization
|
✔
|
|
✔
|
|
|
✔
|
✔
|
✔
|
✔
|
✔
|
✔
|
|
Technology
/ Information Security experience is important to assess tools to enhance business operations, customer service and cyber
and information security
|
✔
|
|
|
|
|
✔
|
✔
|
✔
|
|
✔
|
|
|
Human
Capital Management experience is important to assess compensation practices, diversity mix, talent, training programs
and corporate culture within the company
|
✔
|
✔
|
|
✔
|
|
✔
|
✔
|
|
✔
|
✔
|
|
Our
Corporate Governance Framework
|
Board
Independence
|
• A
total of 10 of our 11 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 8.5 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.
|
|
Lead
Independent Director
|
• Our
independent directors elect a lead independent director.
• Our
lead independent 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.
|
|
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, including those related to privacy and cybersecurity 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.
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. Our directors are active in our
strategic planning process and exercise robust oversight of and challenges 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 ensuring that the Board’s views are considered as our
strategy evolves. The Board strongly believes that having active and engaged committee chairs and a lead independent 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, interest rate fluctuations, reductions in economic growth,
or recession;
|
|
|
•
|
Political
or regulatory risks, such as restriction on access to markets;
|
|
|
•
|
Event
risks, such as global pandemics, including COVID-19, 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
Enterprise Risk Management Committee (“ERMC”) regularly assesses our overall risk profile and oversees our risk management
programs which are implemented by our chief risk officer. Information security is a significant operational risk for financial
institutions, and includes the risk of losses resulting from cyber-attacks. Our Board recognizes the importance of maintaining
the trust and confidence of our customers, clients, and employees, and information security risk. In light of these risks, the
Board also assesses the risks and changes in the cyber environment through presentations and reports provided to our ERMC.
Our
Board also recognizes the importance to operate in a responsible and sustainable manner aligned with our mission, vision and values.
Workforce inclusion and development, social impact and environmental sustainability are critical components in the Company’s
culture and business practice. Our Compensation and Governance Committee (“CGC”) will continue to monitor ESG efforts
in the communities where we operate.
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)
|
|
|
•
|
charters
for each of our Board Committees
|
You
may view these and other corporate governance documents on the investor relations page on our 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. Information included on our website, other than the proxy
statement and form of proxy, is not a part of the proxy soliciting material.
Board Independence
The
Company’s common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol
“SBCF”. 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 independent directors in 2019 were: Dennis J. Arczynski, Stephen E. Bohner, Jacqueline L. Bradley, H.
Gilbert Culbreth, Jr., Julie H. Daum, Christopher E. Fogal, Maryann Goebel, Timothy S. Huval, Robert J. Lipstein, Herbert A.
Lurie, Alvaro J. Monserrat and Thomas E. Rossin. Mr. Bohner passed away in January 2019, and Mr. Huval resigned from the
Board in April 2019 due to an extended illness. Mr. Lurie is a senior advisor of Guggenheim Securities that, from time to
time, provides financial advisory services to Seacoast. The Board considered this relationship when assessing Mr.
Lurie’s independence. Our governance principles provide that a substantial majority of our directors will meet the
criteria for independence required by Nasdaq. Over 75% of our Board meets our criteria for independence.
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 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 2018 were formally conducted by legal counsel through one-on-one discussions with each
director. In 2019, Board and committee evaluations were individually conducted in written format to assess the effectiveness
of the Board and committees of the Board.
|
|
Summary
and Review
|
For
the 2019 Board and committee evaluations, responses were compiled and summarized, including comments, which were reviewed
by the Chairman and Lead Independent Director, and together presented summary results to the full Board. The committee evaluations
were reviewed by the respective committee chairs, who then discussed the results with their respective committees and the
full Board.
|
|
Actions
|
As
a result of the Board evaluation process, the Board gained insight as to committee structure, implemented process improvements
to facilitate broader engagement around governance matters and examined possible enhancements to Board orientation and continued
education.
|
Board
Leadership Structure
At
least annually, our Board, in coordination with our Compensation and Governance Committee, discusses and deliberates the
appropriate Board leadership structure. Based on its assessment, the Board leadership framework is provided through: 1) a
combined Chairman and CEO role, 2) a clearly defined 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. We believe that Seacoast and
our shareholders benefit from an executive Chairman with deep experience and knowledge of the financial services industry, the
Company, its businesses, and leadership that helps drive growth and revenue to deliver strong financial returns to shareholders.
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 22 years, Chairman for the past 15 years, President
for the 12 years prior to being named Chairman, and has also served as Chief Executive Officer of the Bank for the past 27
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 $7.1 billion in assets and 48 full-service branches in 15 counties and a group of commercial banking
centers throughout the footprint as of year-end 2019. 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.
Lead
Independent Director
To
further strengthen our corporate governance, our independent directors annually 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. Our Board believes that the Lead Director serves an important corporate governance function by providing
separate leadership for the non-management and independent directors. In January 2020, the Board re-elected Christopher E. Fogal
to serve as Lead Independent Director. Additional information of the role of our lead director is outlined in the following chart.
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 call meetings of the Board of Directors
• Chairs
Board meetings and meetings of shareholders
• Facilitates
productive Board meetings by encouraging Board director engagement
|
|
Executive
Session Responsibilities
|
|
• Has
the authority to call meetings of the non-management directors or independent directors
• Chairs
executive sessions of the non-management directors and independent directors
• Sets
the agenda for executive sessions
• Meets
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 and independent directors on key issues
and concerns
• Serves
as the principal, but non-exclusive, liaison and intermediary between the Chair/CEO and the non-management directors regarding
views, concerns, and issues of the non-management directors and independent directors
• Functions
as a resource to the Chair/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 to other Board members
• Seeks
Board meeting agenda input from other directors and reviews meeting schedule to ensure sufficient time for discussion
of all agenda items
|
• Drafts
the Board meeting agendas and works with Lead Independent Director to ensure that the requisite agendas and information are
provided to the Board in a timely manner for it to fulfill its duties
|
|
External
Shareholder Responsibilities
|
|
• Reviews
responses to direct shareholder communications with the Board
• If
requested by major shareholder or the Chair/CEO, is available for consultation and direct communication
|
• Represents
the Company and interacts with external shareholders and employees
|
|
Strategy
and Execution Responsibilities
|
|
• Collaborates
with the Board and the Chair/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 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 two
times in executive session in 2019.
Management
Succession Planning and Development
Our
Board understands that a strong succession framework reduces Company risk and therefore ensures that appropriate attention is
given to identifying and developing talented leaders. Consequently, we have a robust management succession and development plan
which is reviewed and updated annually. The Board maintains oversight responsibility for succession planning with respect to the
position of CEO and monitors and advises management regarding succession planning for other executive officers. The Board’s
goal is to have a long-term and continuing program for effective senior leadership development and succession. The Board also
has short-term contingency plans in place for emergency and unexpected occurrences, such as the sudden departure, death, or disability
of our CEO or other executive officers.
The
CGC, working with the CEO, annually evaluates succession planning at the senior levels of management and reports the results of
such evaluation to the Board, along with recommendations on management development and succession planning. The updated succession
plan is reviewed and approved by the Board to ensure that competencies are in alignment with our strategic plan. The annual review
of the CEO succession planning includes a review of specific individuals identified as active CEO succession candidates, and each
of those individuals is reviewed with respect to progress in his or her current job position and progress toward meeting his or
her defined leadership development plan. The Company’s CEO and senior management are similarly responsible for supporting
“next generation” leadership development by: identifying core talent, skills and capabilities of future leaders within
the Company; assessing the individuals against leadership capabilities; identifying talent and skill gaps and development needs;
assisting with internal candidate development; and identifying significant external hiring needs.
The
Board and individual Board members may 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 encourages 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.
Committee
Structure and 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.
BOARD
MEETINGS AND COMMITTEES
Board
Meeting Attendance
The
Board of Directors held five regular meetings and four special meetings during 2019. 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
Five
of the 14 then-incumbent Directors attended the Company’s 2019 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. These committees serve the same functions for the Company
and the Bank. The current composition of each Company committee and the number of meetings held in 2019 are set forth in the table:
Board
Committee Membership and 2019 Committee Meetings
|
Director
Name
|
Audit
|
Compensation
& Governance
|
Enterprise
Risk Management
|
Strategy
&
Innovation
|
|
Dennis
J. Arczynski (1)
|
✔
|
|
✔
(2)
|
✔
|
|
Jacqueline
L. Bradley (1)
|
|
|
|
✔
|
|
H.
Gilbert Culbreth, Jr. (1)
|
|
✔
|
|
|
|
Julie
H. Daum (1)
|
|
✔
|
|
|
|
Christopher
E. Fogal (1)(3)
|
✔
|
|
|
|
|
Maryann
Goebel (1)
|
✔
|
✔
(2)
|
✔
|
|
|
Dennis
S. Hudson, III (4)
|
|
|
|
✔
|
|
Robert
J. Lipstein (1)
|
✔
(2)
|
|
✔
|
|
|
Herbert
A. Lurie (1)
|
|
|
|
✔
|
|
Alvaro
J. Monserrat (1)
|
✔
|
✔
|
|
✔
|
|
Thomas
E. Rossin (1)
|
|
|
✔
|
✔
(2)
|
|
TOTAL
MEETINGS HELD IN 2019
|
9
|
11
|
6
|
7
|
(1)
Independent Director
(2)
Committee Chair
(3)
Lead Independent Director
(4)
Chairman of the Board
Each
committee has a charter specifying such committee’s responsibilities and duties. Each committee charter, including the
Audit Committee and Compensation and Governance Committee charters, are reviewed annually. These charters are available on the
Company’s website at www.SeacoastBanking.com or upon written request.
Key
Committee Responsibilities
|
AUDIT COMMITTEE
|
COMPENSATION
AND GOVERNANCE COMMITTEE
|
|
Key
Responsibilities
|
Key
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 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
•
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
|
•
determines the compensation of the Company’s and the Bank’s key executive officers
•
recommends director compensation for Board approval
•
administers the Company’s incentive compensation plans and other employee benefits plans
•
oversees the preparation of the “Compensation Discussion and Analysis” section of this proxy statement
•
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, practices, and guidelines, and oversees the Board’s
governance processes
• proposes recommendations to the Board of Directors concerning management development and succession planning activities
at the senior levels of management
|
|
Independence
/ Qualifications
|
Independence
/ Qualifications
|
|
•
all committee members are independent under Nasdaq and SEC rules and each member is able
to read and understand financial statements
•
at least one committee member is an “audit committee financial expert” as defined by Item 407 of Regulation
S K; the Board has determined that Christopher E. Fogal and Robert J. Lipstein are such financial experts
•
the Audit Committee met one time in private session with our independent auditor, and one time in private session without
members of management present, following meetings in 2019
|
• all committee members are independent under Nasdaq and SEC rules
•
no member of the committee is a former or current officer or employee of the company or any of its subsidiaries
•
no member has any interlocking relationship with the Company requiring disclosure under the rules of the SEC
|
|
ENTERPRISE RISK MANAGEMENT COMMITTEE
|
STRATEGY AND INNOVATION COMMITTEE
|
|
Key
Responsibilities
|
Key
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
•
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
•
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
•
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
|
•
supports, sources and/or challenges M&A activities related to banks and non-bank
entities as pertinent to the Company’s stated strategic objectives
• oversees 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
•
makes inquiries of management 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
•
ensures that management is effectively and consistently communicating with shareholders in a manner that is consistent
with the Company’s broader strategic vision
|
AUDIT
COMMITTEE REPORT
The
Audit Committee is currently comprised of five directors: Dennis J. Arczynski, Christopher E. Fogal, Maryann Goebel, Robert J.
Lipstein (Chair) 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 LLP, for the year ended December 31, 2019 is responsible
for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of
those financial statements with accounting principles generally accepted in the United States, as well as expressing an
opinion (pursuant to Section 404 of the Sarbanes-Oxley Act of 2002) on the effectiveness of internal control over financial
reporting.
The
members of the Committee are not professional auditors, and their functions are not intended to duplicate or to certify the activities
of management and the independent registered public accounting firm, nor can the Committee certify that the Company’s registered
public accounting firm is “independent” under applicable rules. The Committee serves a board-level oversight role,
in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the
basis of the information it receives, discussions with management and the independent registered public accounting firm, and the
experience of the Committee’s members in business, financial and accounting matters. To carry out its responsibilities,
the Committee held nine meetings in 2019.
In
the performance of its oversight responsibilities, the Committee has reviewed and discussed with management and Crowe LLP the
audited financial statements of the Company for the year ended December 31, 2019. 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
LLP. The Committee also discussed these statements with Crowe 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 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 LLP matters relating to its independence and received from Crowe 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, 2019, for filing with the Securities and Exchange Commission.
The
Audit Committee:
Robert
J. Lipstein, Chair
Dennis J. Arczynski
Christopher E. Fogal
Maryann Goebel
Alvaro
J. Monserrat
February
27, 2020
OWNERSHIP
OF OUR COMMON STOCK
The
tables below provide information regarding the beneficial ownership of our common stock as determined in accordance with SEC
rules and regulations as of the Record Date by (i) each of the Company’s directors, (ii) each of the executive officers
named in the Summary Compensation Table, (iii) all current directors and executive officers as a group, and (iv) each
beneficial owner of more than 5%. As of the Record Date, 52,706,857 shares of common stock were outstanding. Unless otherwise
indicated, and subject to community property laws where applicable, the Company believes that each of the shareholders named
in the table below has sole voting and investment power with respect to the shares indicated as beneficially
owned.
Director,
Executive Officers and Certain Beneficial Stock Ownership
As
of the Record Date, based on available information, all directors, director nominees and executive officers of Seacoast as a group
(15 persons) beneficially owned approximately 1,559,616 outstanding shares of common stock, constituting 3.0% of the total number
of shares of common stock outstanding at that date as set forth in the table below. In addition, as of the Record Date, various
subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting power over 39,790 outstanding shares,
or 0.1% of the outstanding shares, of Seacoast common stock, including shares held as trustee or agent of various Seacoast employee
benefit and stock purchase plans.
The
following table also sets forth information regarding the number and percentage of shares of common stock held by all persons
and entities, or principal shareholders, known by the Company to beneficially own 5% or more of the Company’s outstanding
common stock, exclusive of directors and officers. 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
Directors
and Executive Officers
|
Amount
and Nature of
Beneficial
Ownership
|
Percentage
of
Outstanding
Shares
|
|
Dennis
J. Arczynski
|
50,776
(1)
|
*
|
|
Jacqueline
L. Bradley
|
25,489
(2)
|
*
|
|
H.
Gilbert Culbreth, Jr.
|
79,071
(3)
|
*
|
|
Julie
H. Daum
|
57,424
(4)
|
*
|
|
Christopher
E. Fogal
|
43,559
(5)
|
*
|
|
Maryann
Goebel
|
25,521
(6)
|
*
|
|
Dennis
S. Hudson, III
|
770,268
(7)
|
1.5%
|
|
Robert
J. Lipstein
|
3,112
(8)
|
*
|
|
Herbert
A. Lurie
|
38,511
(9)
|
*
|
|
Alvaro
J. Monserrat
|
13,448
(10)
|
*
|
|
Thomas
E. Rossin
|
22,395
(11)
|
*
|
|
Charles
K. Cross, Jr.
|
120,472
(12)
|
*
|
|
David
D. Houdeshell
|
113,503
(13)
|
*
|
|
Juliette
P. Kleffel
|
46,489
(14)
|
*
|
|
Charles
M. Shaffer
|
149,578
(15)
|
*
|
|
All
directors and executive officers as a group (15 persons)
|
1,559,616
|
3.0%
|
|
Name
of Beneficial Owner
Certain
Other Beneficial Owners
|
Amount
and Nature of
Beneficial
Ownership
|
Percentage
of
Outstanding
Shares
|
|
BlackRock,
Inc.
55
East 52nd Street, New York, NY 10055
|
7,270,865
(16)
|
14.1%
|
T.
Rowe Price Associates, Inc.
100 E. Pratt Street, Baltimore, MD 21202
|
4,556,598
(17)
|
8.8%
|
|
The
Vanguard Group
100 Vanguard Blvd., Malvern, PA 19355
|
3,154,072
(18)
|
6.1%
|
Capital
World Investors
333 South Hope Street, Los Angeles, CA 90071
|
3,031,901
(19)
|
5.8%
|
|
|
(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 30,433 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
11,491 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 6,998 shares that Ms. Bradley has the right
to acquire by exercising options that are exercisable within 60 days after the Record
Date.
|
|
|
(3)
|
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 19,729
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.
|
|
|
(4)
|
Includes
21,867 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 8,138 shares that Ms. Daum has the right to
acquire by exercising options that are exercisable within 60 days after the Record Date.
|
|
|
(5)
|
Includes
4,490 shares held jointly with Mr. Fogal’s wife and 4,688 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 14,882 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 8,138 shares that
Mr. Fogal has the right to acquire by exercising options that are exercisable within
60 days after the Record Date.
|
|
|
(6)
|
Includes
13,960 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.
|
|
|
(7)
|
Includes
224,356 shares held by Sherwood Partners Ltd, of which Mr. Hudson is the general partner.
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 48.0% interest in Sherwood
Partners. Also includes 18,104 shares held jointly with Mr. Hudson’s wife. Also
includes 31,252 shares held in the Company’s Retirement Savings Plan, and 247,713
shares that Mr. Hudson has the right to acquire by exercising options that are exercisable
within 60 days after the Record Date. Also includes 31,282 shares held by Mr. Hudson’s
wife as to which shares Mr. Hudson may be deemed to share both voting and investment
power. Includes 53,106 shares held by The Dennis S. Hudson, Jr. Revocable Trust dated
October 2, 1996 and as amended on October 28, 2010 (the”Trust”), of which
Mr. Hudson serves as Trustee, and may be deemed to have voting and investment power.
Mr. Hudson and certain members of his family are among the beneficiaries of the trust,
of which Mr. Hudson disclaims beneficial ownership, except to the extent of his 25% beneficial
interest in the trust. Also includes 14,256 shares held for Dennis S. Hudson, Jr. in
the Bank’s Directors’ Deferred Compensation Plan, 37,424 shares held in IRA
for Dennis S. Hudson, Jr. Mr. Hudson is executor of Dennis S. Hudson, Jr.’s estate
and disclaims beneficial ownership of such shares, except to the extent of his beneficial
interest in the estate.
|
|
|
(8)
|
Includes
800 shares held jointly with Mr. Lipstein’s wife.
|
|
|
(9)
|
Includes
12,694 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 5,817 shares that Mr. Lurie has the right to acquire
by exercising options that are exercisable within 60 days after the Record Date.
|
|
|
(10)
|
Includes
6,875 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 3,573 shares that Mr. Monserrat has the right
to acquire by exercising options that are exercisable within 60 days after the Record
Date.
|
|
|
(11)
|
Includes
72 shares held jointly with Mr. Rossin’s wife. Also includes 14,256 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.
|
|
|
(12)
|
Includes
67,058 shares that Mr. Cross has the right to acquire by exercising options that are
exercisable within 60 days after the Record Date.
|
|
|
(13)
|
Includes
72,324 shares that Mr. Houdeshell has the right to acquire by exercising options that
are exercisable within 60 days after the Record Date.
|
|
|
(14)
|
Includes
31,101 shares that Ms. Kleffel has the right to acquire by exercising options that are
exercisable within 60 days after the Record Date.
|
|
|
(15)
|
Includes
994 shares held in the Company’s Retirement Savings Plan and 3,689 shares held
in the Company’s Employee Stock Purchase Plan. Also includes 95,282 shares that
Mr. Shaffer has the right to acquire by exercising options that are exercisable within
60 days after the Record Date.
|
|
|
(16)
|
According
to a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) on February 4,
2020 with the SEC with respect to Seacoast common stock beneficially owned as of December
31, 2019, BlackRock, Inc. has sole voting power with respect to 7,152,002 shares of Seacoast
common stock and sole dispositive power with respect to 7,270,865 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 one such person, iShares Core
S&P Small-Cap ETF, is known to have more than 5% of Seacoast common stock.
|
|
|
(17)
|
According
to a Schedule 13G/A filed jointly by T. Rowe Price Associates, Inc., (“Price Associates”)
and T. Rowe Price Funds on February 14, 2020 with the SEC with respect to Seacoast common
stock beneficially owned as of December 31, 2019, Price Associates has sole voting power
with respect to 962,568 shares of Seacoast common stock and sole dispositive power with
respect to 4,556,598 shares of Seacoast common stock. The Schedule 13G/A provides that
Price Associates is an investment advisor and not more than 5% of Seacoast common stock
is owned by any one client subject to the investment advice of Price Association. The
schedule further provides that the shares of common stock listed on the Schedule 13G/A
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.
|
|
|
(18)
|
According
to a Schedule 13G filed by The Vanguard Group on February 12, 2020 with the SEC with respect to Seacoast common stock beneficially
owned as of December 31, 2019, The Vanguard Group has sole voting power with respect to 59,851 shares of Seacoast common stock
and shared aggregate dispositive power with respect to 3,154,072 shares of Seacoast common stock, of which 5,428 shares have shared
dispositive voting power. The Schedule 13G provides that The Vanguard Group is an investment advisor and that the shares of common
stock listed on the Schedule 13G are owned by various subsidiaries of The Vanguard Group, the parent holding company. In addition,
The Vanguard Group reported that no one person is known to have more than 5% of Seacoast common stock.
|
|
|
(19)
|
According
to a Schedule 13G filed by Capital World Investors, a division of Capital Research and Management Company (“CRMC”),
and Capital International Limited, collectively, on February 14, 2020 with the SEC with respect to Seacoast common stock beneficially
owned as of December 31, 2019, Capital World Investors has sole voting power with respect to 3,031,901 shares of Seacoast common
stock and sole dispositive power with respect to 3,031,901 shares of Seacoast common stock. The Schedule 13G provides that Capital
World Investors is an investment advisor and that the shares of common stock listed on the Schedule 13G is owned on behalf of
one client subject to the investment advice of Capital World Investors. In addition, Capital World Investors 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 one such person, SMALLCAP World Fund, Inc., is known to have more than 5% of Seacoast common
stock.
|
Executive
Officers
Executive
officers are appointed annually at the organizational meetings 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
|
Age:
64
Education: MBA,
Florida State University Tenure:
43 years
SELECT
PRIOR EXPERIENCE:
● Chairman
of Seacoast since July 2005 and CEO since 1998
● Chairman
and CEO of the Bank since 1992
● Director
of Seacoast since 1984
● Over
40 years of banking experience with Seacoast
OTHER
AFFILIATIONS/CERTIFICATIONS:
● Chesapeake
Utilities Corporation, member of board, audit and compensation committees
● PENN
Capital Funds, a mutual fund group managed by PENN Capital Management, independent director
● Miami
Branch of Federal Reserve Bank of Atlanta Board from 2005 to 2010
|
|
|
|
|
Charles
M. Shaffer
EVP,
COO and CFO
|
Age:
46 Education:
MBA, University of
Central Florida Tenure:
22 years
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
OTHER
AFFILIATIONS/CERTIFICATIONS:
● CPA
licensed in Florida
● Chartered
Global Management Accountant
● Board
Member, United Way of Martin County
● Board
Member, Florida Bankers Association, BancServ
● Board
Member, Armellini Express Lines
|
|
|
|
|
Juliette
P. Kleffel
EVP, Community
Banking
and Central Florida
Market President
|
Age:
49 Education:
The Stonier Graduate
School of Banking Tenure:
4 years
SELECT
PRIOR EXPERIENCE:
● EVP
and Small Business Banking Sales Leader at Seacoast from October 2014 to 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 and business banking experience in the Orlando market
OTHER
AFFILIATIONS/CERTIFICATIONS:
● Executive
Director for the National Entrepreneur Center
● Director
for the West Orange County Chamber of Commerce
● Vice
President and Executive Board Member for The Gardens of DePugh Nursing Home
● Board
Member and Finance Committee member for the Central Florida YMCA
● Executive
Board Member and Treasurer of the Garden Theatre
● Board
Member of Edgewood Children’s Ranch
● Certified
Lender Business Banker
|
|
|
|
|
David
D. Houdeshell
EVP and Chief
Credit Officer
|
Age:
59 Education:
MBA, The Stonier Graduate
School of Banking Tenure:
10 years
SELECT
PRIOR EXPERIENCE:
● EVP
and Chief Risk Officer of Seacoast and Bank from May 2015 to March 2019
● EVP
and Chief Credit Officer of Seacoast and Bank from June 2010 to May 2015
● 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
● Over
30 years of credit and risk management experience
● Various
credit risk positions with Bank of America and Barnett Bank
OTHER
AFFILIATIONS/CERTIFICATIONS:
● Member
of the Risk Management Association Community Bank Council
● Member
of the DiCOM Software Advisory Board
● Former
member of audit & compliance committee of Martin Health System, Stuart, FL
|
|
|
|
|
Charles
K. Cross, Jr.
EVP
and South Florida
Market President
|
Age:
62 Education:
BSA, University of
Florida Tenure: 8
years
SELECT
PRIOR EXPERIENCE:
● SVP,
Commercial Market Executive for Palm Beach County from March 2012 to July 2013
● Over
40 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
OTHER
AFFILIATIONS/CERTIFICATIONS:
● Former
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
|
EXECUTIVE
COMPENSATION
Compensation
Discussion & Analysis
Executive
Summary
2019
Performance Considerations
Our
strategic plan for 2019 continued to focus on shareholder value creation, and the CGC used average annual earnings per share
(“EPS”) growth and average return on average tangible common equity (“ROATE”) as key indicators that
management is on the right path to produce sustainable long-term value. EPS provides a direct link to value creation at the
shareholder level, and ROATE provides a measure of risk-adjusted returns that illustrates the health of the Company. The CGC
determined the amount of annual and long-term incentives to award to our named executive officers (“NEOs”) for
2019 using a qualitative assessment of management’s performance in 2018, taking into account both growth and return
with consideration to our risk framework. The assessment process included scorecards that identified shared and individual
goals for the year in the areas of operations, technology, innovation, risk, talent, and business transformation, with our
average annual EPS growth and average annual ROATE serving as the primary considerations for long-term incentive awards
granted in 2019. Grants made in 2019 were based on the scorecard assessment of performance in the prior year. The incentive
awards issued based on 2019 qualitative performance considerations will be granted in 2020, and disclosed as part of the 2021
proxy filing.
Say
on Pay Results
In
2019, our “Say on Pay” proposal received 99.7% support, an improvement from 97.2% in 2018; indicating plan design
and governance are well aligned with our shareholders. While our historical results indicate strong support for Seacoast’s
NEO compensation, the CGC continues to review our executive compensation structure to increase its effectiveness and further align
with stockholder interests in light of changing industry dynamics.
Our
Executive Compensation Design Priorities and Prohibitions
|
Design
Priorities (what we do)
|
Design
Prohibitions (what we don’t do)
|
|
✔ Manage
our executive compensation programs to have a strong pay-for-performance orientation.
✔ Link
performance-based incentive awards to enterprise-wide and individual performance goals.
✔ Grant
our NEOs equity-based awards based on Company and individual performance.
✔ Emphasize
long-term stock-based awards in our executive compensation and total incentive strategies.
✔ Set
meaningful performance goals that align management with shareholder interests.
✔ Require
Tier 1 Capital compliance thresholds be met in order for any portion of the PSUs to vest.
✔
Ensure that incentives are
sensitive to risk considerations.
✔
Provide minimal executive benefits
and perquisites.
✔ Maintain
executive stock ownership requirements, and require post-settlement holding periods or mandatory deferral of certain
performance-based awards.
✔ Provide
reasonable executive post-employment and change-in-control protections.
✔ Require
“clawback” provisions for certain incentive-based compensation to ensure accountability.
✔ 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.
|
2019
NEO Pay
|
|
●
|
Cumulative
base salaries for our NEOs were unchanged for 2019 other than adjustments made in recognition
of Mr. Shaffer’s promotion to COO (23% salary increase) and Ms. Kleffel’s
expanded role as the Central Florida Market President (8% salary increase).
|
|
|
●
|
In
2019, our NEOs received awards of Performance Share Units (“PSUs”) in quantities
that vest based on the level of achievement of goals relating to average annual growth
in EPS and average annual ROATE over a three-year period relative to the performance
of a selected Peer Group. PSUs for which performance goals are met will vest on December
31, 2022, subject to the grantee’s continued service.
|
|
|
●
|
In
2019, our NEOs received awards of time-based Restricted Stock Awards (“RSAs”)
that vest over a three-year period.
|
|
|
●
|
The
number of PSUs and RSAs granted in 2019 was determined by the CGC based upon the scorecard
assessment of 2018 performance. Awards granted based upon 2019 scorecard performance
will be granted in 2020. The CGC will use the grant date value of the PSUs or RSAs for
purposes of calculating any potential severance benefits that are based upon prior year
bonuses.
|
Summary
of Compensation Decisions in 2019
The
committee structures the compensation program for executive management with an emphasis on long-term performance-based compensation.
For planning purposes, the CGC focuses on the sum of annual base salary and the values it considers and approves for equity awards,
which are granted in the subsequent year based on annual scorecard performance. We refer to this planning value as Total Direct
Compensation or “TDC”. The CGC considered this TDC in its decision process when determining the value of the total
incentive award value granted in 2019. The following chart illustrates the relative emphasis of each pay element in relation to
TDC, as disclosed in our 2019 Summary Compensation Table (“SCT”).
2019
NEO Mix of Total Direct Compensation
In
general, the CGC closely aligns the compensation of our executives with the creation of both short-term profitability and long-term
value for our shareholders by structuring a substantial portion of TDC 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. In
2019, Mr. Shaffer was promoted as Chief Operating Officer (“COO”) with additional responsibilities incorporated into
his duties in addition to those as CFO of the Company. Ms. Kleffel also expanded the scope of her role in the Community Banking
line of business with added responsibilities in 2019. The 2019 annualized base salary actions for our named executive officers
are summarized in the following table. No other changes to base salary were made for the other NEOs.
1
Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
2019
Annualized Base Salary Actions
|
Named
Executive Officer
|
2018
|
2019
|
%
Change
|
|
Dennis
S. Hudson, III
|
$600,000
|
$600,000
|
—
|
|
Charles
M. Shaffer
|
$365,000
|
$450,000
|
23%
|
|
Juliette
P. Kleffel
|
$300,000
|
$325,000
|
8%
|
|
David
D. Houdeshell
|
$300,000
|
$300,000
|
—
|
|
Charles
K. Cross, Jr.
|
$330,000
|
$330,000
|
—
|
Equity
Awards
Seacoast’s
equity strategy has evolved 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 2016.
Evolution
of Seacoast’s Performance-based Equity Strategies
|
Grant Cycle
|
Type
of
Equity
|
Performance
Period / Payout Range /
Option Vesting Period
|
Performance
Objective(s)
|
|
2016
(Feb.)
|
PSUs
|
● 4-year Performance Period with catch-up
● Payout as % of Target (0-175%)
|
●
Cumulative Adjusted Earnings
●
Adjusted 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
●
Adjusted 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
|
|
2018
(Apr.)
|
PSUs
|
● 3-year Performance Period
● Payout as a % of Target (0-200%)
|
●
Adjusted EPS
●
Adjusted 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
|
|
2019
(Dec.)
|
PSUs
|
● 75% of 2019 LTI Award performance-based
● 3-year Performance Period (2019-2021), with additional service required through the end of 2022
● Payout as a % of Target (0-225%)
|
●
Relative Average Annual EPS Growth (50%)
●
Relative Average Annual ROATE (50%)
●
Tier 1 Capital Compliance
●
50% post-vesting holding period requirement
|
2019
Performance Stock Unit (“PSU”) Awards
2019
PSUs represent stock-settled incentive awards where payout can vary from 0% to 225% of the target number of shares granted. One-half of the PSUs will be earned based on Seacoast’s three-year (2019-2021) average annual growth in EPS (“EPS PSUs”)
relative to the Peer Group. The remaining one-half of the PSUs will be earned based on Seacoast’s three-year (2019-2021)
average annual return on average tangible common equity (“ROATE PSUs”) relative to the Peer Group. PSUs for which
performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service. The CGC selected EPS
and ROATE given their importance in our strategic plan and significant influence on our stock price performance over sustained
periods of time. In each case, the number of PSUs actually earned will be determined by our performance as compared to the median
Peer Group performance as approved by the CGC at the time of grant, subject to an absolute performance payout cap. PSU payouts
will be capped at 100% of the target number of shares granted in the event that certain absolute Company performance hurdles are
not met, irrespective of performance relative to the Peer Group. The PSUs also include a risk-based condition (meet or exceed
minimum requirements for Tier 1 Regulatory Capital) that must be met in order for the awards to vest.
Time-Based
Restricted Stock Awards (“RSA”)
Our
pay-for-performance stock incentive strategy is balanced with the use of time-based RSAs to enhance holding power, retention and
recruitment. The CGC granted RSAs to the NEOs as part of the LTIP. The RSAs granted in 2019 were issued in relation to 2018 performance,
and vest ratably over a three-year period.
Other
Considerations Involving 2019 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 feature on PSUs so that settlement of 50% of any shares earned will be delayed an
additional 12 months starting with the 2017 grant cycle.
As
noted above, in 2019, the CGC redesigned the compensation structure to place greater emphasis on performance metrics in order
to better align the award structure relative to peers. Based on the new long-term incentive plan award structure, no stock options
were granted in 2019.
Overview
of 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 eleven times in 2019. The Committee engaged Alvarez and Marsal, LLC (“A&M”)
as its independent compensation consultant to advise the CGC in 2019. A&M periodically attended CGC meetings, including executive
sessions, and provided information and advice independent of management and, at the direction of the 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 A&M, and the services it provided did not raise any
conflict of interest.
Benchmarking
and Peer 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 comparator 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 comparator 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 comparator
group or, as needed, from the McLagan Regional Bank Survey. 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 contemplated NEO pay actions against market pay levels for reasonableness with the market assessments serving as
key points of reference and validation in the CGC’s process.
In 2019, the CGC evaluated
and selected a new peer group for determining relative performance (the “Peer Group”). To better align a relevant
peer group mix, the Peer Group was selected from comparable banks, primarily southeast companies, with market caps between
$1-$3 billion and total assets above $5 billion. Other selection criteria that the CGC considered included type of ownership,
focused solely on publicly traded company status, geography and size considerations, as defined by market cap and assets.
This change reflected the CGC’s desire to incorporate an important relative performance dimension that is critical to
our efforts to continue to grow the value of Seacoast. The CGC sees this approach as appropriate given its expectations for
performance and growth.
The CGC reviews the Peer Group annually
to ensure continued appropriateness, and makes changes when it believes warranted. Our 2019 Peer Group was comprised of:
|
2019 PEER GROUP
|
|
Ameris Bancorp (ABCB)
|
FB Financial Corp.(FBK)
|
ServisFirst Bankshares (SFBS)
|
|
Atlantic Union Bankshares (AUB)
|
First BanCorp (FBNC)
|
Simmons First National (SFNC)
|
|
BancFirst Corp. (BANF)
|
First Busey Corp (BUSE)
|
South State Corp. (SSB)
|
|
BancorpSouth Bank (BXS)
|
Heritage Financial (HFWA)
|
Tompkins Financial (TMP)
|
|
Brookline Bancorp (BRKL)
|
Pacific Premier Bancorp (PPBI)
|
TowneBank (TOWN)
|
|
CenterState Bank Corp. (CSFL)
|
Renasant Corp. (RNST)
|
Trustmark Corporation (TRMK)
|
|
Eagle Bancorp (EGBN)
|
S&T Bancorp, Inc. (STBA)
|
United Community (UCBI)
|
|
Enterprise Financial (EFSC)
|
Sandy Spring Bancorp (SASR)
|
WesBanco Inc. (WSBC)
|
Executive
Compensation Framework Highlights
|
Structure
|
Reasoning
|
|
COMPENSATION COMPARATOR GROUP:
A comparator group of banks of
similar size, business model and financial performance.
|
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.
|
|
COMPENSATION PHILOSOPHY:
•
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 relationship to market pay levels and practices of peer group
• Actual
pay relative to the market data will vary based on performance in terms of the calibration of total incentive awards and amounts
ultimately earned from our LTIP
|
• Improve pay for
performance linkage
• Align pay with overall
value of each individual to Seacoast
• Ensure reasonableness of pay relative to industry peers and market data
• Ensure a significant portion of pay is “at-risk”, consistent with philosophy and comparator group practices
• To understand potential payments assuming various Company performance outcomes and understand how potential performance extremes
are reflected in pay; which is a component of our compensation risk assessment
|
|
EQUITY:
• Mix
of time-based and performance-based structure with a long-term emphasis weighted more heavily toward PSUs (75%)
• Meaningful stock-based award opportunities “right-sized” for company and individual performance considerations
and needs
• A substantial portion 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 50% mandatory 12-month deferral requirement
on the settlement of any shares earned 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
• RSAs
provide a key retentive component to our overall compensation package whereby enhancing retention of the management team
• 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 long-term
performance accountability
• Augment alignment
with shareholder interests
• Provide executives with an economic incentive to deliver sustainable results within a risk appropriate framework
|
|
PERFORMANCE SCORECARDS:
• Performance scorecards
serve as the basis for time-based RSAs; and the target value of PSUs granted in the subsequent year
|
• Establish
clear expectations for individual goals as well as link with enterprise-wide growth, return and risk management objectives
•
To understand important context that may impact the evaluation of each executive such as; experience, skills
and scope of responsibilities, individual performance and succession planning
|
2019
EXECUTIVE COMPENSATION ACTIONS
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 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. 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
CGC in establishing executive compensation and overall bonus and incentive payments each year. The CEO evaluates the performance
of each NEO and other senior executives, and, based on these performance evaluations, market compensation surveys, and other data,
he will then make qualitative assessments and recommendations to the CGC. The CEO also presents incentive compensation payment
recommendations for the Committee’s consideration. The CGC evaluates and makes a qualitative assessment of the CEO’s
performance and determines his compensation without the CEO present.
Performance and time-based equity
granted in 2019 were issued in relation to 2018 performance scorecard evaluations. Equity awards relating to 2019 performance scorecard
evaluations will be granted in 2020.
2019
Pay Outcomes
|
|
Dennis
S. Hudson, III
Chairman / CEO
|
Charles
M. Shaffer
EVP / COO / CFO
|
Juliette
P. Kleffel
EVP / Community Banking and Central Florida Market President
|
David
D. Houdeshell
EVP / CCO
|
Charles
K. Cross, Jr.
EVP / South Florida Market President
|
|
Base Salary
|
$600,000
|
$450,000
|
$325,000
|
$300,000
|
$330,000
|
|
RSA*
|
$175,000
|
$100,000
|
$68,750
|
$43,750
|
$62,500
|
|
PSU*
|
$525,000
|
$300,000
|
$206,250
|
$131,250
|
$187,500
|
*Grant
date value
Key
Influences in Compensation Decisions
Performance
Metrics
The components of our
executive compensation program demonstrate alignment with long-term shareholder value creation. The CGC considers performance
metrics for both the CEO and each NEO, collectively. In 2019, the CGC evaluated performance metrics and made the following
LTIP element changes: 1) the use of relative rather than absolute measures for performance metrics, 2) remove
“premium” options, and 3) overall LTIP mix to 25% time-based RSAs and 75% performance-based PSUs split evenly
between EPS and ROATE. One-half of the performance-based stock units (the “EPS Growth Units”) shall be eligible
to vest based on the Company’s Average Annual EPS Growth for the three-year performance period (2019-2021), relative to
the average ratio of the Peer Group, and one-half of the performance-based stock units (the “ROATE Units”) shall
be eligible to vest based on the Company’s Average Annual ROATE for the same performance period, relative to the
average ratio of the Peer Group. PSUs for which performance goals are met will vest on December 31, 2022, subject to the
grantee’s continued service.
In 2019, senior executives were assessed
on the following performance:
|
Component
|
What
it Measures
|
Why
it is Used
|
|
Average Annual EPS Growth
|
Earnings per share (EPS) is the portion of the Company’s profit allocated to each share of common stock.
|
A broadly used indicator of profitability, useful for tracking performance over time or in comparison to benchmarks.
|
|
Average Annual ROATE
|
Net income as a percentage of average shareholders’ equity, excluding intangible assets. Adjustments are made to net income to facilitate analysis of performance trends.
|
A
broadly used indicator of effective utilization of capital, useful for tracking performance over time or in comparison to benchmarks.
|
Individual
Contributions
The
CGC also considers roles and responsibilities of the CEO and each NEO and links most of the pay for senior executives to long-term
business strategies and key priorities. Considerations for 2019 awards included the following items.
|
Dennis S. Hudson, III, Chairman of the Board and Chief Executive Officer
|
|
|
•
|
Strengthening of the executive team and other improvements
in key operating areas
|
|
|
•
|
Strong credit quality and advances in enterprise risk
management framework
|
|
|
•
|
Significant upgrades and oversight of our risk management
capabilities across the Company
|
|
|
•
|
Attainment of growth and strategic initiatives measured by 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
|
|
|
•
|
Maintain strong associate engagement and enterprise-wide
alignment with the business strategy
|
|
Charles M. Shaffer, Executive Vice President, Chief Operating Officer
and Chief Financial Officer
|
|
|
•
|
Ongoing leadership and contributions to our business
transformation and strategy efforts
|
|
|
•
|
Expansion to include oversight of line of business operating
units
|
|
|
•
|
Corporate development including the successful acquisition
and integration of First Green and First Bank of the Palm Beaches
|
|
|
•
|
Continued talent upgrading across the enterprise
|
|
|
•
|
Improvements in external communications and deeper engagement
with Shareholders
|
|
Juliette P. Kleffel, Executive Vice President, Community Banking and
Central Florida Market President
|
|
|
•
|
Contributions to enterprise-wide business transformation
efforts
|
|
|
•
|
Substantial year-over-year productivity gains in organizational
units
|
|
|
•
|
Executive role model and champion of the customer experience
|
|
|
•
|
Expansion of responsibilities across Central Florida
including Customer Service Center
|
|
David D. Houdeshell, Executive Vice President, Chief Credit Officer
|
|
|
•
|
Contributions to enterprise-wide business transformation
efforts
|
|
|
•
|
Effective partnering with other functions in the development
and launch of new products and services
|
|
|
•
|
Continues to maintain credit quality metrics in a rapid
growth environment
|
|
|
•
|
Effective deployment of digital origination platform
for commercial banking
|
|
|
•
|
Successful implementation of Current Expected Credit
Losses (“CECL”) modeling, analysis and processes
|
|
Charles K. Cross, Executive Vice President, South Florida Market President
|
|
|
•
|
Collaboration and leadership across the organization
leading to substantial improvements in end-to-end business unit performance
|
|
|
•
|
Improvements in sales function
|
|
|
•
|
Build-out of emerging markets in South Florida
|
|
|
•
|
Effective deployment of digital origination platform
for commercial banking
|
Other
Elements of the 2019 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 “2019
Other Potential Post-Employment Payments.”
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 $15,000 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 not to exceed $17,500. 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 2019, the Company paid an
aggregate of $5,100 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
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 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 2019, 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 will not motivate people to take excessive or imprudent risks, and do not create risks that are reasonably likely to have
a material adverse effect on the registrant.
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 an accounting 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, without limitation, 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. All of our
named executive officers and non-employee directors have met or are on track to meet their stock ownership target.
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 CFO pay and performance-based compensation has been repealed, effective for taxable years
beginning after December 31, 2017, such that compensation paid to all of our NEOs 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 2016 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.
|
Strategy
|
Compensation Design
|
|
Compensation is tied to equity
and Company performance
|
• Time-based RSAs vesting
period is three years
• Performance period for
PSU awards is three years (2019-2021)
|
|
Seacoast performance at
levels that equal or exceed the industry
|
•
PSU metrics based on three-year compound annualized growth in EPS and average return on tangible common equity, which our shareholders
views as key indicators of our performance
|
|
Governance Considerations
|
• PSU performance period allows for direct and relevant pay and performance comparisons with industry competitors and alternative
investments that share our risk profile
• PSU program include two
types of performance goals; PSU will be earned for average annual growth in EPS, and PSU will be earned for average
annual ROATE
•
PSU payouts are capped in the event that certain absolute Company performance in EPS and ROATE are not met
|
|
Risk Considerations
|
•
PSUs for which performance goals are met will vest on December 31, 2022, subject to the grantee’s continued service. In
addition, we implemented a mandatory deferral feature on new PSU awards so that settlement of 50% of any shares earned 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
• Maintained “clawback”
provisions for certain incentive-based compensation to ensure accountability
|
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 2019 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.
|
|
|
Julie H.
Daum
|
|
|
Maryann
Goebel, Chair
|
|
|
Alvaro J.
Monserrat
|
EXECUTIVE
COMPENSATION TABLES
2019
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
($)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(2)
|
Non-Equity
Incentive Plan
Compensation
($)
|
All
Other
Compensation
($)(3)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
Dennis
S. Hudson, III
|
2019
|
600,000
|
--
|
699,962
|
--
|
--
|
33,370
|
1,333,332
|
|
Chairman
& CEO
|
2018
|
600,000
|
--
|
568,732
|
306,246
|
--
|
33,910
|
1,508,888
|
|
of Seacoast
and Bank
|
2017
|
587,500
|
--
|
532,954
|
359,677
|
--
|
32,685
|
1,512,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
M. Shaffer
|
2019
|
421,667
|
--
|
399,977
|
--
|
--
|
23,085
|
844,729
|
|
EVP, COO
& CFO
|
2018
|
331,250
|
--
|
474,938
|
104,994
|
--
|
22,675
|
933,857
|
|
of Seacoast
and Bank
|
2017
|
315,000
|
--
|
453,955
|
131,588
|
--
|
20,107
|
920,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Juliette
P. Kleffel
|
2019
|
316,667
|
--
|
274,946
|
--
|
--
|
19,708
|
611,321
|
|
EVP, Community
Banking
|
2018
|
285,000
|
--
|
325,954
|
69,998
|
--
|
19,075
|
700,027
|
|
& Central
Florida Market
|
2017
|
259,250
|
--
|
255,335
|
83,340
|
--
|
16,195
|
614,120
|
|
President
of Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
D. Houdeshell
|
2019
|
300,000
|
--
|
174,983
|
--
|
--
|
11,866
|
486,849
|
|
EVP &
Chief Credit Officer
|
2018
|
285,000
|
--
|
297,943
|
69,998
|
--
|
11,760
|
664,701
|
|
of Seacoast
and Bank
|
2017
|
276,250
|
--
|
253,709
|
76,757
|
--
|
11,070
|
617,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
K. Cross, Jr.
|
2019
|
330,000
|
--
|
249,971
|
--
|
--
|
23,307
|
603,278
|
|
EVP, South
Florida
|
2018
|
307,500
|
--
|
378,990
|
90,995
|
--
|
20,960
|
798,445
|
|
Market
President of Bank
|
2017
|
300,000
|
--
|
378,974
|
114,042
|
--
|
22,064
|
815,080
|
|
|
(1)
|
Amount
of salary actually received in any year may differ from the annual base salary amount
due to the timing of changes in base salary, which typically occur in April or following
a mid-year promotion. 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)
|
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, 2019. 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 2019 Compensation Program for Executive
Officers – Equity Awards.” See also “2019 Grants of Plan-Based Awards”.
|
Each
of our executive officers received PSUs. They also each received RSAs. 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
|
Grant
Date Value
Assuming Target
Performance
|
Grant
Date Value
Assuming Maximum
Performance
|
|
Dennis
S. Hudson, III
|
$
524,979
|
$
1,181,203
|
|
Charles
M. Shaffer
|
299,983
|
674,962
|
|
Juliette
P. Kleffel
|
206,225
|
464,006
|
|
David
D. Houdeshell
|
131,237
|
295,283
|
|
Charles
K. Cross, Jr.
|
187,486
|
421,844
|
(3)
Additional information regarding other compensation is provided in “2019 Components of All Other Compensation”.
2019
Components Of All Other Compensation
|
Name
|
Company
Paid
Contributions
to Retirement
Savings Plan
|
Company
Paid
Contributions
to EDCP
|
Company
Paid
Contributions
to Supplemental
LTD Insurance
|
Car
Allowance
|
Other
Perquisites
|
Total
|
|
Dennis
S. Hudson, III
|
$10,950
|
$12,800
|
$1,020
|
$9,000
|
--
|
$33,770
|
|
Charles
M. Shaffer
|
$9,665
|
$3,400
|
$1,020
|
$9,000
|
--
|
$23,085
|
|
Juliette
P. Kleffel
|
$9,688
|
--
|
$1,020
|
$9,000
|
--
|
$19,708
|
|
David
D. Houdeshell
|
$10,846
|
--
|
$1,020
|
--
|
--
|
$11,866
|
|
Charles
K. Cross, Jr.
|
$11,121
|
--
|
$1,020
|
$9,000
|
$2,166
(1)
|
$23,307
|
(1)
Includes $2,166 for personal use of club membership.
2019
Grants Of Plan-Based Awards
The
following table sets forth certain information concerning plan-based awards granted during 2019 to the named executive officers.
|
Name
|
Grant
Date
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
All
Other Stock
Awards: Number
of Shares of
Stock or Units
(#)
|
All
Other Option
Awards: Number
of Securities
Underlying Options
(#)
|
Exercise
or
Base Price
of Option
Awards
($/Sh)
|
Grant
Date Fair
Value of Stock
and Option
Awards (1)
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
Dennis
S.
Hudson, III
|
12/30/2019
|
4,293
|
17,173
|
38,649
|
17,173
|
|
|
524,979
|
|
|
12/30/2019
|
|
|
|
5,724
|
|
|
174,983
|
Charles
M.
Shaffer
|
12/30/2019
|
2,453
|
9,813
|
22,080
|
9,813
|
|
|
299,983
|
|
|
12/30/2019
|
|
|
|
3,271
|
|
|
99,994
|
Juliette
P.
Kleffel
|
12/30/2019
|
1,687
|
6,746
|
15,178
|
6,746
|
|
|
206,225
|
|
|
12/30/2019
|
|
|
|
2,248
|
|
|
68,721
|
David
D.
Houdeshell
|
12/30/2019
|
1,073
|
4,293
|
9,660
|
4,293
|
|
|
131,237
|
|
|
12/30/2019
|
|
|
|
1,431
|
|
|
43,746
|
Charles
K.
Cross, Jr.
|
12/30/2019
|
1,533
|
6,133
|
13,800
|
6,133
|
|
|
187,486
|
|
|
12/30/2019
|
|
|
|
2,044
|
|
|
62,485
|
|
|
(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, 2019.
|
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 extended Mr. Hudson’s employment under the agreement terms for a term of three years. Under the agreement,
Mr. Hudson receives a base salary, 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.
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 the sum of his base salary in effect on the date of separation, and the highest bonus earned by Mr. Hudson for
the previous three full fiscal years (“Cash Bonus”) payable over 24 months, and b) 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 the sum of his base salary in effect on the date of separation, and the Cash Bonus payable
in a lump sum, and b) Continuing Benefits for 36 months. In response to the unintended negative consequence created by granting
equity awards in lieu of cash bonuses for 2017 and 2018 performance, the CGC determined that the Cash Bonus portion of Mr. Hudson’s
severance for such years would be calculated using the same bonus cash equivalent value that is relied on in determining the value
of such equity awards.
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 “2019 Other Potential Post-Employment Payments.”
Change
in Control Agreements with Other Named Executive Officers
The
Company entered into change in control employment agreements with Messrs. Cross, Houdeshell and Shaffer (each referred to here
as the “Executive” or by name) on September 21, 2016. The Company also entered into a change in control employment
agreement with Ms. Kleffel on April 6, 2017.
Each
agreement has an initial term of one year and provides for automatic one-year extensions unless expressly not renewed. A change
in control, as defined in the agreement, must occur during the term in order to trigger the agreement. The agreement provides
that, once a change in control has occurred, the Company agrees to continue the employment of the Executive subject to the contract
for a one-year period, in a comparable position as the Executive held in the 120-day period prior to the change in control, and
with the same annual base pay and target bonus opportunity. If the Executive is terminated “without cause” or resigns
for “good reason,” as defined in the agreement, during the one-year period following a change in control, the Executive
will receive:
|
|
•
|
cash
severance equal to a multiple (two times, for Messrs. Cross and Shaffer, and one times for Mr. Houdeshell and Ms. Kleffel) of
the sum of (i) Executive’s Annual Base Salary at the rate in effect on the date of termination, and (ii) the Executive’s
average annual performance bonus for the last three full fiscal years prior to the date of termination (“Executive’s
Average Annual Performance Bonus”);
|
|
|
•
|
a
prorated final year bonus, based on the Executive’s Average Annual Performance Bonus; and
|
|
|
•
|
health
and other welfare benefits, as defined in the agreement, for a period of time following termination (18 months for Messrs. Cross
and Shaffer, and 12 months for Mr. Houdeshell and Ms. Kleffel).
|
In
response to the unintended negative consequence created by granting equity awards in lieu of cash bonuses for 2017 and 2018 performance,
the CGC determined that the Cash Bonus portion of each Named Executive Officer’s severance for such years would be calculated
using the same bonus cash equivalent values that is relied on in determining the value of such equity awards. The Executive is
required to execute a release of claims as a condition to receipt of severance under the Change in Control 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 2019
The
following table sets forth certain information concerning outstanding equity awards as of December 31, 2019 granted to the named
executive officers.
|
|
Option
Awards
|
Stock
Awards
|
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#) Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#) 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)
($)
|
Equity
incentive plan
awards: number of
unearned shares,
units or other rights
that have not vested
(#)
|
Equity
incentive plan awards:
market or payout value of
unearned shares, units or
other rights that have not
vested (2)
($)
|
|
|
19,400(3)
|
--
|
11.00
|
06/28/2023
|
|
|
|
|
|
|
50,000(3)
|
--
|
10.54
|
04/29/2024
|
|
|
|
|
|
|
17,975(4)
|
--
|
12.63
|
01/29/2023
|
|
|
|
|
|
|
40,054
|
11,902(4)
|
14.82
|
02/28/2024
|
|
|
|
|
|
|
52,014
|
26,007(5)
|
28.69
|
04/01/2027
|
|
|
|
|
|
|
18,427
|
36,852(6)
|
31.15
|
04/01/2028
|
|
|
|
|
|
D.
Hudson, III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,122(11)
|
737,410
|
|
|
|
|
|
|
|
|
11,145(14)
|
340,703
|
|
|
|
|
|
|
|
|
11,145(14)
|
340,703
|
|
|
|
|
|
|
|
|
10,954(15)
|
334,864
|
|
|
|
|
|
|
|
|
10,954(15)
|
334,864
|
|
|
|
|
|
|
5,724(10)
|
174,983
|
17,173(16)
|
524,979
|
|
|
2,400(3)
|
--
|
11.00
|
06/28/2023
|
|
|
|
|
|
|
25,000(3)
|
--
|
10.54
|
04/29/2024
|
|
|
|
|
|
|
8,100(3)
|
--
|
12.63
|
01/29/2023
|
|
|
|
|
|
|
16,393
|
4,862(4)
|
14.82
|
02/28/2024
|
|
|
|
|
|
|
19,030
|
9,514(5)
|
28.69
|
04/01/2027
|
|
|
|
|
|
|
6,318
|
12,634(6)
|
31.15
|
04/01/2028
|
|
|
|
|
|
C.
Shaffer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,868(11)
|
301,665
|
|
|
|
|
|
|
3,610(8)
|
110,358
|
4,077(14)
|
124,634
|
|
|
|
|
|
|
|
|
4,077(14)
|
124,634
|
|
|
|
|
|
|
7,226(9)
|
220,899
|
3,755(15)
|
114,790
|
|
|
|
|
|
|
|
|
3,755(15)
|
114,790
|
|
|
|
|
|
|
3,271(10)
|
99,994
|
9,813(16)
|
299,983
|
|
|
4,054
|
1,199(4)
|
15.99
|
03/31/2024
|
|
|
|
|
|
|
12,052
|
6,026(5)
|
28.69
|
04/01/2027
|
|
|
|
|
|
|
4,213
|
8,422(6)
|
31.15
|
04/01/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
2,439(12)
|
74,560
|
|
|
|
|
|
|
339(7)
|
10,363
|
2,038(13)
|
62,302
|
|
J.
Kleffel
|
|
|
|
|
827(8)
|
25,281
|
2,582(14)
|
78,932
|
|
|
|
|
|
|
|
|
2,582(14)
|
78,932
|
|
|
|
|
|
|
5,059(9)
|
154,654
|
2,503(15)
|
76,517
|
|
|
|
|
|
|
|
|
2,503(15)
|
76,517
|
|
|
|
|
|
|
2,248(10)
|
68,721
|
6,746(16)
|
206,225
|
|
|
4,200(3)
|
--
|
11.00
|
06/28/2023
|
|
|
|
|
|
|
25,000(3)
|
--
|
10.54
|
04/29/2024
|
|
|
|
|
|
|
6,475(3)
|
--
|
12.63
|
01/29/2023
|
|
|
|
|
|
|
10,200
|
3,025(4)
|
14.82
|
02/28/2024
|
|
|
|
|
|
|
11,100
|
5,550(5)
|
28.69
|
04/01/2027
|
|
|
|
|
|
|
4,213
|
8,422(6)
|
31.15
|
04/01/2028
|
|
|
|
|
|
D.
Houdeshell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,140(11)
|
187,700
|
|
|
|
|
|
|
1,951(8)
|
59,642
|
2,378(14)
|
72,695
|
|
|
|
|
|
|
|
|
2,378(14)
|
72,695
|
|
|
|
|
|
|
4,336(9)
|
132,552
|
2,503(15)
|
76,517
|
|
|
|
|
|
|
|
|
2,503(15)
|
76,517
|
|
|
|
|
|
|
1,431(10)
|
43,746
|
4,293(16)
|
131,237
|
|
|
2,400(3)
|
--
|
11.00
|
06/28/2023
|
|
|
|
|
|
|
25,000(3)
|
--
|
10.54
|
04/29/2024
|
|
|
|
|
|
|
9,875(3)
|
--
|
12.63
|
01/29/2023
|
|
|
|
|
|
|
18,940
|
5,621(4)
|
14.82
|
02/28/2024
|
|
|
|
|
|
|
16,492
|
8,246(5)
|
28.69
|
04/01/2027
|
|
|
|
|
|
|
5,475
|
10,950(6)
|
31.15
|
04/01/2028
|
|
|
|
|
|
C.
Cross, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,403(11)
|
348,590
|
|
|
|
|
|
|
2,927(8)
|
89,478
|
3,534(14)
|
108,034
|
|
|
|
|
|
|
|
|
3,534(14)
|
108,034
|
|
|
|
|
|
|
5,420(9)
|
165,689
|
3,255(15)
|
99,505
|
|
|
|
|
|
|
|
|
3,255(15)
|
99,505
|
|
|
|
|
|
|
2,044(10)
|
62,485
|
6,133(16)
|
187,486
|
|
|
(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, 2019 ($30.57).
|
|
|
(3)
|
Represents
option to purchase fully vested common stock, as long as named executive officer remains
employed by the Company.
|
|
|
(4)
|
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.
|
|
|
(5)
|
Represents
option to purchase common stock, of which the remaining unexercisable shares will vest
on April 3, 2020.
|
|
|
(6)
|
Represents
option to purchase common stock, of which one-third of the unexercisable shares covered
by this award vested on April 2, 2019, one-third will vest on April 2, 2020 and the remaining
unexercisable shares will, as long as named executive officer remains employed by the
Company, vest one-third on April 2, 2021.
|
|
|
(7)
|
Represents
time-vested restricted stock units granted on April 1, 2017, of which the remaining shares
will vest on April 1, 2020.
|
|
|
(8)
|
Represents
time-vested restricted stock units granted on April 3, 2017, of which the remaining shares
will vest on April 3, 2020.
|
|
|
(9)
|
Represents
time-vested restricted stock units granted on April 2, 2018, of which one-third of the
shares vested on April 2, 2019, one-third of the shares will vest on April 2, 2020 and
the remaining shares will, as long as names executive officer remains employed by the
Company, vest one-third on April 2, 2021.
|
|
|
(10)
|
Represents
time-vested restricted stock units granted on December 30, 2019, of which one-third of
the shares will vest, as long as names executive officer remains employed by the Company,
each one-third on December 30, 2020, December 30, 2021 and December 30, 2022.
|
|
|
(11)
|
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.
These units vested on February 27, 2020.
|
|
|
(12)
|
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. These
units vested on February 27, 2020.
|
|
|
(13)
|
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, 2019. These
units vested on February 27, 2020.
|
|
|
(14)
|
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. These
units vested on one-half on February 27, 2020 and will vest one-half on December 31,
2020.
|
|
|
(15)
|
Represents
performance-vesting restricted stock units granted on April 2, 2018, 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.
|
|
|
(16)
|
Represents
performance-vesting restricted stock units granted on December 30, 2019, 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,
2021 and additional service through December 21, 2022. The awards are more fully described under “Equity Awards–2019
Performance Share Unit (“PSU”) Awards”.
|
2019
Option Exercises and Stock Vested
The
following table reports the exercise of stock options, and the vesting of stock awards or similar instruments during 2019, for
the named executive officers and the value of the gains realized on vesting. No stock options were exercised in 2019.
|
Name
|
Number
of Shares
Acquired on Vesting
|
Value
Realized on
Vesting
|
|
Dennis
S. Hudson, III
|
45,958
|
$1,353,004
|
|
Charles
M. Shaffer
|
27,879
|
$802,906
|
|
Juliette
P. Kleffel
|
4,281
|
$114,009
|
|
David
D. Houdeshell
|
20,641
|
$597,501
|
|
Charles
K. Cross, Jr.
|
30,844
|
$894,108
|
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.
2019
Nonqualified Deferred Compensation
The
following table discloses, for each of the named executive officers, contributions, earnings and balances during 2019 under the
Executive Deferred Compensation Plan, described above.
|
Name
|
Executive
Contributions in
Last Fiscal Year
($)
|
Registrant
Contributions in
Last Fiscal Year
($)(1)
|
Aggregate
Earnings
/ Losses in Last
fiscal Year
($)(2)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last Fiscal
Year End
($)
|
|
Dennis
S. Hudson, III
|
16,443
|
12,800
|
298,999
|
--
|
1,305,759(3)
|
|
Charles
M. Shaffer
|
30,147
|
3,400
|
15,332
|
--
|
84,832(4)
|
|
Juliette
P. Kleffel
|
--
|
--
|
--
|
--
|
--
|
|
David
D. Houdeshell
|
--
|
--
|
--
|
--
|
--
|
|
Charles
K. Cross, Jr.
|
--
|
--
|
--
|
--
|
--
|
|
|
(1)
|
Total
amount included in the All Other Compensation column of the Summary Compensation Table.
|
|
|
(2)
|
None
of the earnings or dividends paid under the Executive Deferred Compensation Plan are
above-market or preferential.
|
|
|
(3)
|
Includes
$290,981 contributed by the Company, as well as executive contributions, which were included in the Summary Compensation Table
for previous years.
|
|
|
(4)
|
Includes
$10,750 contributed by the Company, as well as executive contributions, which were included in the Summary Compensation Table
for previous years.
|
2019
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, 2019. The closing market price of the Company’s common stock on that date was $30.57 per share.
None of the named executive officers would be eligible for any of these payments if they were terminated for cause.
|
Name
|
Term
(in years) (#)
|
Cash
Severance ($)
|
Value
of Other Annual Benefits ($)
|
Total
Value of Outstanding Stock Awards that Immediately Vest
($)
|
In-the-Money
Value of Outstanding Stock Option Awards that Immediately Vest
($)
|
Total
Value of
Benefit
($)
|
|
Dennis
S. Hudson, III
|
|
|
|
|
|
|
|
Upon
Termination without Cause or with Resignation for Good Reason(1)
|
2(2)
|
1,403,333
|
3,840
|
--
|
--
|
1,407,173
|
|
Upon
Death or Disability (1)
|
2(2)
|
1,200,000
|
3,840
|
2,788,504(3)
|
236,350(3)
|
4,228,694
|
|
Upon
Termination Following a Change-in-Control (1)
|
3
|
2,105,000
|
5,760
|
2,788,504(3)
|
236,350(3)
|
5,135,614
|
|
Upon
Change-in-Control where Award is not assumed by surviving entity
|
--
|
--
|
--
|
2,788,504(3)
|
236,350(3)
|
3,024,854
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
--
|
--
|
--
|
--(3)
|
--(3)
|
--
|
|
Charles
M. Shaffer
|
|
|
|
|
|
|
|
Upon
Death or Disability
|
--
|
--
|
--
|
1,511,748(3)
|
94,463(3)
|
1,606,211
|
|
Upon
Termination Following a Change-in-Control (4)
|
2
|
1,285,000
|
3,180
|
1,511,748
|
94,463
|
2,894,391
|
|
Upon
Change-in-Control where Award is not assumed by surviving entity
|
--
|
--
|
--
|
1,511,748(3)
|
94,463(3)
|
1,606,211
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
--
|
--
|
--
|
--(3)
|
--(3)
|
--
|
|
Juliette
P. Kleffel
|
|
|
|
|
|
|
|
Upon
Death or Disability
|
--
|
--
|
--
|
706,778(3)
|
28,810(3)
|
735,588
|
|
Upon
Termination Following a Change-in-Control (4)
|
1
|
475,000
|
2,120
|
706,778
|
28,810
|
1,212,708
|
|
Upon
Change-in-Control where Award is not assumed by surviving entity
|
--
|
--
|
--
|
706,778(3)
|
28,810(3)
|
735,588
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
--
|
--
|
--
|
--(3)
|
--(3)
|
--
|
|
David
D. Houdeshell
|
|
|
|
|
|
|
|
Upon
Death or Disability
|
--
|
--
|
--
|
722,981(3)
|
58,078(3)
|
781,059
|
|
Upon
Termination Following a Change-in-Control(4)
|
1
|
446,667
|
2,120
|
722,981
|
58,078
|
1,229,846
|
|
Upon
Change-in-Control where Award is not assumed by surviving entity
|
--
|
--
|
--
|
722,981(3)
|
58,078(3)
|
781,059
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
--
|
--
|
--
|
--(3)
|
--(3)
|
--
|
|
Charles
K. Cross, Jr.
|
|
|
|
|
|
|
|
Upon
Death or Disability
|
--
|
--
|
--
|
1,081,322(3)
|
104,033(3)
|
1,185,355
|
|
Upon
Termination Following a Change-in-Control(4)
|
2
|
960,000
|
3,180
|
1,081,322
|
104,033
|
2,148,535
|
|
Upon
Change-in-Control where Award is not assumed by surviving entity
|
--
|
--
|
--
|
1,081,322(3)
|
104,033(3)
|
1,185,355
|
|
Upon
Change-in-Control where Award assumed by surviving entity
|
--
|
--
|
--
|
--(3)
|
--(3)
|
--
|
|
|
(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
We
are providing the following information to comply with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, and Item 402(u) of Regulation S-K. For 2019, our last completed fiscal quarter, the median annual total compensation of our
employees (other than Mr. Hudson, our CEO) was $69,884 and the annual total compensation for Mr. Hudson, as reported in the Summary
Compensation Table was $1,333,332. Based on this information, for 2019, the ratio of compensation for our Chief Executive Office
to the median employee was 19:1. This ratio is specific to our Company and may not be comparable to any ratio disclosed by another
company.
Seacoast
identified the median associate in 2017; however, due to the termination of the former median associate, an alternate associate
was identified as the median employee in 2019, as allowed by the SEC. Using our HRIS we were able to determine any compensation
earned by associates including regular pay, incentive, bonus, business continuity, and any other prerequisites. No assumptions,
adjustments, or estimates, including any cost of living adjustments were made in identifying the median employee. Next we calculated
the median employee’s annual total compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation
S-K for the Summary Compensation Table, consistent with the calculations we provide for all of our Named Executive Officers.
PROPOSAL
1
ELECTION OF DIRECTORS
General
Our
non-employee directors are 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 should
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 eleven members divided into three classes,
serving staggered three year terms as provided in our Articles of Incorporation. At this time, Seacoast’s Compensation and
Governance Committee and Board of Directors believe that eleven directors is adequate to provide a diversity of background, experience
and expertise, and that there are sufficient independent directors to staff the independent committees of the Board and provide
independent oversight.
The
Annual Meeting is being held to, among other things, elect three Class III directors of Seacoast, each of whom has been nominated
by the CGC of the Board of Directors. Each of the nominees is presently a director of Seacoast. All of the nominees will 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 III director nominee will serve a three year term expiring at the 2023 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 2021
Annual Meeting
|
Jacqueline
L. Bradley
H.
Gilbert Culbreth, Jr.
Christopher E. Fogal
Herbert
A. Lurie
|
|
Class
II
|
Term
Expires at the 2022
Annual Meeting
|
Dennis
J. Arczynski
Maryann Goebel
Robert J. Lipstein
Thomas E. Rossin
|
|
Class
III
|
Term
Expires at the 2020
Annual Meeting
|
Julie
H. Daum
Dennis S. Hudson, III
Alvaro J. Monserrat
|
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 three 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 (three 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 votes “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
three 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 three nominees listed below.
Nominees
for Re-election at the Annual Meeting
|
|
|
|
|
|
Julie H. Daum
|
Age: 65
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2013
• Bank
since 2013
|
• Bank
Credit Risk
• Compensation & Governance
|
|
Ms.
Daum has been a senior director of Spencer Stuart, a privately-held global executive search firm since 1993. As head of the North
American Board Practice at Spencer Stuart, she has helped place over 1,000 directors on corporate boards working with companies
from the Fortune 10 to pre-IPO. 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 governance issues, board refreshment, and succession planning. Each year, Ms. Daum develops
the Spencer Stuart Board Index, a publication detailing trends at national boardrooms. She is a graduate of the Wharton Business
School.
|
|
|
|
|
|
Dennis S. Hudson, III
|
Age: 64
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 1984
• Bank
since 1984
|
• Bank
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 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 Martin Health System, as well as Chairman of the Board of the Economic Council of Martin County. Mr. Hudson is a graduate
of Florida State University with a Bachelor’s degree in Finance, and a Master’s degree in Business Administration.
|
|
|
|
|
|
Alvaro J. Monserrat
|
Age: 51
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2017
• Bank
since 2017
|
• Audit
• Compensation & Governance
• Strategy & Innovation
|
|
Mr.
Monserrat is an independent advisor on business strategy and execution for CEOs of technology start-up companies. From January
2018 to February 2019, Mr. Monserrat was the Executive Vice President and General Manager at Nuance Imaging, a subsidiary of Nuance
Communications, Inc. (ticker: NUAN), a multinational computer software technology corporation. 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.
Director
Terms Extended Beyond the Annual Meeting
|
|
|
|
|
|
Dennis J. Arczynski
|
Age: 68
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2013
• Bank
since 2007
|
• Audit
• Risk
Management (Chair)
• Strategy & Innovation
• Bank
Credit Risk (Chair)
|
|
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 the University of Maryland in Finance and his Master’s degree from the Johns Hopkins University.
|
|
|
|
|
|
Jacqueline L. Bradley
|
Age: 62
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2015
• Bank
since 2014
|
• 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. Ms. Bradley currently chairs Seacoast Bank’s
Trust and Wealth Management Committee. Ms. Bradley serves on 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 Orange County Tourist Development Council, 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.
|
|
|
|
|
|
H. Gilbert Culbreth, Jr.
|
Age: 74
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2008
• Bank
since 2006
|
• Bank
Credit Risk
• Compensation & Governance
|
|
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.
|
|
|
|
|
|
Christopher E. Fogal
|
Age: 68
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 1997
• Bank
since 1997
|
• Bank
Trust
• Audit
|
|
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.
|
|
|
|
|
|
Maryann Goebel
|
Age: 69
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2014
• Bank
since 2014
|
• Audit
• Compensation & Governance (Chair)
• Risk
Management
|
|
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.
In
2019, Ms. Goebel was elected to serve as an Independent Director of Repay Holdings Corporation (ticker: RPAY), a leading provider
of vertically-integrated payment solutions headquartered in Atlanta, Georgia (formerly Repay Holdings, LLC, a subsidiary of Hawk
Parent Holdings, LLC, and acquired by Thunder Bridge, together forming the combined public company Repay Holdings Corporation
in July 2019), where she serves as the Chair of the Technology Committee and member of the Audit Committee.
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.
|
|
|
|
|
|
Robert J. Lipstein
|
Age: 64
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2019
• Bank
since 2019
|
• Audit
(Chair)
• Risk
Management
|
|
Mr.
Lipstein is a certified public accountant and has over 40 years of diversified experience in various business roles,
including leadership in audit, corporate governance, information technology, and enterprise risk management. Mr. Lipstein is
an Independent Director of Ocwen Financial Corporation (ticker: OCN), a provider of residential and commercial mortgage loan
servicing headquartered in Mount Laurel, New Jersey, where he has served as a member of the Audit Committee since March 2017,
and previously served as a member of the Compensation Committee. In 2020, Mr. Lipstein was appointed to the Board of Advisors
of Cloud Pricing Services, a company which offers visibility into IT infrastructure costs and utilization to enable
optimization of bare metal costs. In 2019, Mr. Lipstein was elected to the Board of Trustees of Einstein Healthcare Network
and serves as the chair of the Audit Committee and is a member of the Finance and IT Committees. In January 2017, he became a
Director at CrossCountry Consulting, a privately-held consulting firm that focuses on corporate advisory services. Mr.
Lipstein is a former senior partner and national SOX leader of KPMG LLP and served as the Global IT Partner in Charge of
Business Services and as an Advisory Business Unit Partner in Charge for its Mid-Atlantic Region.
|
|
|
|
|
|
Herbert A. Lurie
|
Age: 59
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2016
• Bank
since 2016
|
• Bank
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.
|
|
|
|
|
|
Thomas E. Rossin
|
Age: 86
|
|
|
|
|
|
|
TENURE:
|
BOARD COMMITTEES:
|
QUALIFICATIONS & EXPERIENCE:
|
|
• Company
since 2003
• Bank
since 2003
|
• 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.
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:
|
|
Cash (1)
|
$37,500
|
|
Stock Award (2)
|
$62,500
|
|
Annual Committee Chair Retainer for all Committees
|
$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 re-election 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.
Lead Independent Director
Compensation
The Board appointed Christopher E. Fogal as Lead
Independent Director in December 2018. Mr. Fogal receives an additional annual cash retainer of $25,000 for his service as Lead
Independent Director.
Director Stock Ownership
Policy
To align the interests of our directors and shareholders,
our Board of Directors believes that directors should hold a significant financial stake in Seacoast. Consequently, our Corporate
Governance Guidelines require that directors own Seacoast stock equal in value to a minimum of three times their base annual retainer
within four years of joining the Board. Each director must retain 75% of their shares until reaching the minimum share ownership
requirement, and after the ownership target is met, must retain at least 50% of the shares for one year. All of our directors own
more than the minimum stock requirement, except for two of our newest directors who have been on the Board for three years or less,
and are on track to be compliant with our policy within the prescribed time frame.
The table below sets forth the total compensation
paid to Board members who are not employees of the Company or the Bank for fiscal year 2019.
2019 Director
Compensation Table
|
Director
|
Fees
Earned
or Paid in Cash
($)(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(3)
|
All Other
Compensation
($)
|
Total
($)
|
|
Dennis J. Arczynski
|
81,250(4)
|
62,516
|
--
|
--
|
143,766
|
|
Stephen E. Bohner (6)
|
15,625(4)
|
--
|
--
|
--
|
15,625
|
|
Jacqueline L. Bradley
|
62,500(3)(4)
|
62,516
|
--
|
--
|
125,016
|
|
H. Gilbert Culbreth, Jr.
|
37,500(8)
|
62,516
|
--
|
--
|
100,016
|
|
Julie H. Daum
|
37,500(3)(8)
|
62,516
|
--
|
--
|
100,016
|
|
Christopher E. Fogal
|
87,500(3)(4)(5)
|
62,516
|
--
|
--
|
150,016
|
|
Maryann Goebel
|
62,500(4)
|
62,516
|
--
|
--
|
125,016
|
|
Dennis S. Hudson, Jr. (6)
|
37,500
|
62,516
|
--
|
--
|
100,016
|
|
Timothy S. Huval (6)
|
9,375
|
--
|
--
|
--
|
9,375
|
|
Robert J. Lipstein (7)
|
23,438
|
62,516
|
|
|
85,954
|
|
Herbert A. Lurie
|
37,500(8)
|
62,516
|
--
|
--
|
100,016
|
|
Alvaro J. Monserrat
|
37,500
|
62,516
|
--
|
--
|
100,016
|
|
Thomas E. Rossin
|
62,500(4)
|
62,516
|
--
|
--
|
125,016
|
|
|
(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 2019 is provided below in the table entitled “Stock Awards
Granted to Directors in 2019”.
|
|
|
(2)
|
A
breakdown of the stock awards made to each director in 2019 is provided below in the
table entitled “Stock Awards Granted to Directors in 2019”. No stock awards
held by directors were outstanding as of December 31, 2019.
|
|
|
(3)
|
Certain
directors elected to take a portion of their 2019 cash compensation in the form of stock
option awards. The grant date value of these awards is included in the “Fees Earned
or Paid in Cash” column. As of December 31, 2019, all of the stock option awards
described below in the table entitled “Stock Awards Granted to Directors in 2019”
were outstanding.
|
|
|
(4)
|
Includes $25,000 for each
service as Chair of a Board Committee; Committee Chair rotation is pro-rated accordingly
on quarterly basis.
|
|
|
(5)
|
Includes $25,000 for service
as Lead Independent Director
|
|
|
(6)
|
Seacoast
Board service ended for former directors in 2019: Mr. Bohner in January 2019, Mr. Huval
in April 2019 and Mr. Hudson, Jr. in May 2019. Mr. Hudson, Jr. continued to serve as
a director of the Bank and received board service compensation for his service as such
for the remainder of 2019. Compensation for Messrs. Bohner and Huval was prorated accordingly
on a quarterly basis.
|
|
|
(7)
|
Mr. Lipstein was elected
to the Board in May 2019. His compensation was prorated accordingly for 2019.
|
|
|
(8)
|
The
table below shows the cash amounts that the directors deferred into the Directors’
Deferred Compensation Plan (“DDCP”) described below in 2019 and the total
number of shares held in the DDCP Seacoast Stock Account and Equity Deferral Account
for each director as of the Record Date:
|
|
Director
|
Cash Deferred into DDCP
Stock Account in 2019
($)
|
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
|
14,256
|
30,433
|
|
Stephen E. Bohner
|
--
|
--
|
--
|
--
|
|
Jacqueline L. Bradley
|
--
|
--
|
11,491
|
11,491
|
|
H. Gilbert Culbreth, Jr.
|
37,500
|
5,473
|
14,256
|
19,729
|
|
Julie H. Daum
|
26,250
|
7,611
|
14,256
|
21,867
|
|
Christopher E. Fogal
|
--
|
627
|
14,256
|
14,883
|
|
Maryann Goebel
|
--
|
--
|
13,960
|
13,960
|
|
Dennis S. Hudson, Jr.
|
--
|
--
|
14,256
|
14,256
|
|
Timothy S. Huval
|
--
|
--
|
--
|
--
|
|
Robert J. Lipstein
|
--
|
--
|
--
|
--
|
|
Herbert A. Lurie
|
37,500
|
4,974
|
7,720
|
12,694
|
|
Alvaro J. Monserrat
|
--
|
917
|
5,958
|
6,875
|
|
Thomas E. Rossin
|
--
|
--
|
14,256
|
14,256
|
Stock Awards
& Options Granted To Directors In 2019
The following table sets forth certain information
concerning stock awards and options granted to directors during 2019. As of December 31, 2019, all stock awards granted to directors
were fully vested, and all of the option awards listed below were outstanding.
|
Name
|
Grant Date
|
Stock Awards(1)
(#)
|
Option Awards:
Number of Securities
Underlying Options(2)
(#)
|
Exercise or Base
Price of Option
Awards
($/Sh)
|
Grant Date Fair
Value of Stock and
Option Awards(3)
($)
|
|
Dennis J. Arczynski
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Stephen E. Bohner
|
--
|
--
|
--
|
--
|
--
|
|
Jacqueline L. Bradley
|
7/23/2019
2/4/2019
|
2,312
--
|
--
1,146
|
--
28.42
|
62,516
11,242
|
|
H. Gilbert Culbreth, Jr.
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Julie H. Daum
|
7/23/2019
2/4/2019
|
2,312
--
|
--
1,146
|
--
28.42
|
62,516
11,242
|
|
Christopher E. Fogal
|
7/23/2019
2/4/2019
|
2,312
--
|
--
1,146
|
--
28.42
|
62,516
11,242
|
|
Maryann Goebel
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Dennis S. Hudson, Jr.
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Timothy S. Huval
|
--
|
--
|
--
|
--
|
--
|
|
Robert J. Lipstein
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Herbert A. Lurie
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Alvaro J. Monserrat
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
Thomas E. Rossin
|
7/23/2019
|
2,312
|
--
|
--
|
62,516
|
|
|
(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 $9.81 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, 2019.
|
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 or her director
compensation, both cash and equity, until his or her 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 or her 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
DDCP 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 or her 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 or her 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 or her account shall be paid in a lump sum to his or her designated beneficiary
or to his or her estate.
PROPOSAL
2
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITOR
The Audit Committee, acting pursuant to authority
delegated to it by the Board of Directors, appointed Crowe LLP, an independent registered certified public accounting firm and
the Company’s independent auditor for the fiscal year ending December 31, 2019, to serve as the Company’s independent
auditor for the fiscal year ending December 31, 2020. Although it is not required to do so, the Board of Directors is submitting
the Audit Committee’s appointment of Crowe 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 LLP, the Audit Committee will reconsider the appointment.
Representatives of Crowe 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 LLP for the fiscal year ending December 31,
2020. Ratification of this proposal requires approval by the affirmative vote of a majority of votes cast at the Annual Meeting.
The Board
of Directors unanimously recommends a vote “FOR” Proposal 2.
Relationship with Independent
Registered Public Accounting Firm
Crowe LLP’s report on Seacoast’s
consolidated financial statements for the fiscal year ended December 31, 2019 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 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, 2019. Crowe 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, 2019 and 2018, including
expenses:
|
|
2019
|
2018
|
|
Audit Fees(1)
|
$879,000
|
$739,643
|
|
Audit-Related Fees(2)
|
$33,100
|
$71,250
|
|
Tax Fees(3)
|
$40,000
|
$41,500
|
|
All Other Fees(4)
|
$88,920
|
$43,655
|
|
|
(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 2018
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 and for consulting services in connection with the formation of a subsidiary of Seacoast National Bank.
|
Pre-Approval Policy
Under the Audit Committee’s Charter, the
Audit Committee is required to approve in advance the terms of all audit services provided to the Company as well as all permissible
audit-related and non-audit services to be provided by the independent auditors. All services set forth above under the captions
“Audit Fees”, “Audit-Related Fees”, “Tax Fees”, and “All Other Fees” were approved
by the Company’s Audit Committee pursuant to SEC Regulation S-X Rule 2-.01(c)(7)(i).
PROPOSAL
3
ADVISORY
(NON-BINDING) VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
In
accordance with the Exchange Act, we are required to include in this proxy statement and present at the Annual Meeting a non-binding
shareholder vote to approve the compensation of our named executive officers, as disclosed in this proxy statement pursuant to
the compensation rules of the SEC. This proposal, commonly known as a “say-on-pay” proposal, gives shareholders the
opportunity to endorse or not endorse the compensation of the Company’s named executive officers as disclosed in this proxy
statement. The proposal will be presented at the Annual Meeting in the form of the following resolution:
RESOLVED,
that the holders of common stock of the Company approve the compensation of the Company’s named executive officers as disclosed
in the Compensation Discussion and Analysis, the compensation tables and related material in the Company’s Proxy Statement
for the 2020 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 2021 annual meeting
of shareholders.
This
Proposal 3 requires approval by the affirmative vote of a majority of votes cast at the Annual Meeting.
The
Board of Directors unanimously recommends a vote “FOR” Proposal 3.
OTHER
INFORMATION
Certain
Transactions and Business Relationships
Related
Party Transactions
The
Board of Directors recognizes that related party transactions present a heightened risk of conflicts of interest and/or improper
valuation (or the perception thereof) and therefore has adopted a Related Party Transaction Policy to guide the Company in connection
with all related party transactions. The policy is available on the Company’s website at www.SeacoastBanking.com. The Company
defines a related party as:
|
|
●
|
any
employee, officer, director or director nominee of the Company and/or its subsidiaries;
|
|
|
●
|
a
shareholder (or group of affiliated shareholders) beneficially owning in excess of 5%
of the Company (or its controlled affiliates);
|
|
|
●
|
a
shareholder (or group of affiliated shareholders) with the right to designate a director
or board observer to the Board of Directors of the Company and/or any of its subsidiaries;
|
|
|
●
|
an
immediate family member of any of the foregoing; and
|
|
|
●
|
an
entity which is owned or controlled by someone listed above, or an entity in which someone
listed above has a substantial ownership interest or control of such entity.
|
The
policy requires the Audit Committee or a majority of disinterested members of the Board to approve or ratify a transaction between
the Company and any related party (including any transactions requiring disclosure under Item 404 of Regulation S-K under the
Securities Exchange Act of 1934), other than:
|
|
●
|
transactions
available on similar terms to all employees or customers generally;
|
|
|
●
|
transactions
involving less than $25,000 when aggregated with all similar transactions; and
|
|
|
●
|
loans
made by the Bank in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as, and following credit underwriting procedures
that are not less stringent than, those prevailing at the time for comparable loans with
parties not related to the lender, and not involving more than the normal risk of repayment
or presenting other unfavorable features, and in compliance with applicable law, including
the Sarbanes Oxley Act of 2002 and Regulation O of the Board of Governors of the Federal
Reserve System.
|
The
Audit Committee is currently comprised of five directors, Dennis J. Arczynski, Christopher E. Fogal, Maryann Goebel, Robert J.
Lipstein (Chair) and Alvaro J. 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. Director H. Gilbert Culbreth, Jr.
is the owner of Gilbert Chevrolet and Gilbert Ford automobile dealerships. In 2019, Seacoast paid Gilbert dealerships $64,875
for vehicle purchases. The Audit Committee approved this arrangement.
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, 2019, was approximately $661,292, which represented approximately 0.07% of Seacoast’s consolidated shareholders’
equity on that date. Additionally, the Bank had $1.0 million in unfunded commitments to lend to directors and named executive
officers at December 31, 2019. 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.
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,
2019, 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 2021
Shareholder
Proposals for Inclusion in 2021 Proxy Statement
To
be considered for inclusion in the Company’s proxy statement and proxy card for the 2021 Annual Meeting of Shareholders,
a shareholder proposal must be received at the Company’s principal executive offices no later than December 7, 2020, 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 2021 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 2021 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 26, 2021 and no later than March 28, 2021. 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
|
Ratification
of Auditor
|
FOR
|
|
3
|
Advisory
Vote on Executive Compensation
|
FOR
|
If
any other matters are properly presented at the Annual Meeting for action, the persons named and acting as proxy will have the
discretion to vote for you on these matters in accordance with their best judgment. We do not currently expect that any other
matters will be properly presented for action at the Annual Meeting. Each share of common stock is entitled to one vote on each
matter properly brought before the meeting.
Record
Date
You
may vote all common shares that you owned as of the close of business on March 30, 2020, 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”; or
|
|
|
●
|
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 20, 2020 (the “cut-off date”) to allow sufficient time for the trustees to vote. If 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 by the cut-off date. 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
shares in “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 the beneficial 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.
Under
the rules of various securities exchanges, brokers and other record holders may generally vote on discretionary or routine matters,
but cannot vote on non-routine or non-discretionary matters, such as the election of directors, unless they have received voting
instructions from the person for whom they are holding shares. Proposals 1 and 3 are considered non-routine matters, and cannot
be voted on by your broker without your instructions. We therefore encourage you to provide directions to your broker as to how
you want your shares voted on all matters to be voted on at the meeting.
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.
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 52,706,857 shares of common stock issued, outstanding and entitled to be voted, which were held
by approximately 2,292 holders of record. Therefore, at least 26,353,429 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 2020 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
|
Ratification
of Auditor
|
Affirmative
vote of a majority of votes cast
|
No
|
Yes
|
|
3
|
Advisory
(Non-binding) Vote on Executive Compensation
|
Affirmative
vote of a majority of votes cast
|
No
|
No
|
|
|
(1)
|
Under
our Bylaws, all elections of directors are decided by plurality vote. However, notwithstanding
the plurality standard, in an uncontested election for directors, which is the case for
the election under Proposal 1, our Corporate Governance Guidelines provide that if any
director nominee receives a greater number of votes “withheld” from his or
her election than votes “for” such election, then the director will promptly
tender his or her resignation to the Board following certification of the shareholder
vote, with such resignation to be effective upon acceptance by the Board of Directors.
The CGC would then review and make a recommendation to the Board of Directors as to whether
the Board should accept the resignation, and the Board would ultimately decide whether
to accept 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 following page 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.
|
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|
|
|
Dennis S. Hudson, III
|
|
|
Chairman & Chief Executive Officer
|
April
10, 2020
LOCATION
OF THE 2020 ANNUAL MEETING OF SHAREHOLDERS
Our 2020 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.
Important Note Regarding
Virtual Annual Meeting
We intend to hold our annual
meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations
that public health officials have and may continue to issue in light of the evolving coronavirus (COVID-19) pandemic. As a result,
we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location
or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website
www. proxyvote.com, and we encourage you to check this website prior to the meeting if you plan to attend.
APPENDIX
A
INFORMATION
REGARDING NON-GAAP FINANCIAL MEASURES
This proxy statement
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
|
|
|
YEAR-ENDED
|
|
(Dollars
in thousands, except per share data)
|
4Q'19
|
3Q'19
|
2Q'19
|
1Q'19
|
4Q'18
|
2019
|
2018
|
|
Net Income
|
$27,176
|
$25,605
|
$23,253
|
$22,705
|
$15,962
|
$98,739
|
$67,275
|
|
Total noninterest income
|
16,376
|
13,943
|
13,577
|
12,836
|
12,714
|
56,732
|
50,022
|
|
Securities (gains)/losses, net
|
(2,539)
|
847
|
466
|
9
|
425
|
(1,217)
|
623
|
|
BOLI benefits on death (included in other income)
|
–
|
(956)
|
–
|
–
|
(280)
|
(956)
|
(280)
|
|
Total Adjustments to Noninterest Income
|
(2,539)
|
(109)
|
466
|
9
|
145
|
(2,173)
|
343
|
|
Total Adjusted Noninterest Income
|
13,837
|
13,834
|
14,043
|
12,845
|
12,859
|
54,559
|
50,365
|
|
Total noninterest expense
|
38,057
|
38,583
|
41,000
|
43,099
|
49,464
|
160,739
|
162,273
|
|
Merger related charges
|
(634)
|
–
|
–
|
(335)
|
(8,034)
|
(969)
|
(9,681)
|
|
Amortization of intangibles
|
(1,456)
|
(1,456)
|
(1,456)
|
(1,458)
|
(1,303)
|
(5,826)
|
(4,300)
|
|
Business continuity expenses - hurricane events
|
–
|
(95)
|
–
|
–
|
–
|
(95)
|
–
|
|
Branch reductions and other expense initiatives
|
–
|
(121)
|
(1,517)
|
(208)
|
(587)
|
(1,846)
|
(587)
|
|
Total Adjustments to Noninterest Expense
|
(2,090)
|
(1,672)
|
(2,973)
|
(2,001)
|
(9,924)
|
(8,736)
|
(14,568)
|
|
Total Adjusted Noninterest Expense
|
35,967
|
36,911
|
38,027
|
41,098
|
39,540
|
152,003
|
147,705
|
|
Income Taxes
|
8,103
|
8,452
|
6,909
|
6,409
|
4,930
|
29,873
|
20,259
|
|
Tax effect of adjustments
|
(110)
|
572
|
874
|
510
|
2,623
|
1,846
|
3,834
|
|
Taxes and tax penalties on acquisition-related BOLI redemption
|
–
|
–
|
–
|
–
|
(485)
|
–
|
(485)
|
|
Effect of change in corporate tax rate on deferred tax assets
|
–
|
(1,135)
|
–
|
–
|
–
|
(1,135)
|
(248)
|
|
Total Adjustments to Income Taxes
|
(110)
|
(563)
|
874
|
510
|
2,138
|
711
|
3,101
|
|
Adjusted Income Taxes
|
7,993
|
7,889
|
7,783
|
6,919
|
7,068
|
30,584
|
23,360
|
|
Adjusted Net Income
|
$26,837
|
$27,731
|
$25,818
|
$24,205
|
$23,893
|
$104,591
|
$79,085
|
|
Earnings per diluted share, as reported
|
$0.52
|
$0.49
|
$0.45
|
$0.44
|
$0.31
|
$1.90
|
$1.38
|
|
Adjusted Earnings per Diluted Share
|
0.52
|
0.53
|
0.50
|
0.47
|
0.47
|
2.01
|
1.62
|
|
Average diluted shares outstanding
|
52,081
|
51,935
|
51,952
|
52,039
|
51,237
|
52,029
|
48,748
|
|
Adjusted Noninterest Expense
|
$35,967
|
$36,911
|
$38,027
|
$41,098
|
$39,540
|
$152,003
|
$147,705
|
|
Foreclosed property expense and net gain/(loss) on sale
|
(3)
|
(262)
|
174
|
40
|
–
|
(51)
|
(460)
|
|
Net Adjusted Noninterest Expense
|
$35,964
|
$36,649
|
$38,201
|
$41,138
|
$39,540
|
$151,952
|
$147,245
|
|
Revenue
|
$78,136
|
$74,891
|
$73,713
|
$73,610
|
$72,698
|
$300,350
|
$261,537
|
|
Total Adjustments to Revenue
|
(2,539)
|
(109)
|
466
|
9
|
145
|
(2,173)
|
343
|
|
Impact of FTE adjustment
|
87
|
79
|
83
|
87
|
116
|
336
|
441
|
|
Adjusted Revenue on a fully taxable equivalent basis
|
$75,684
|
$74,861
|
$74,262
|
$73,706
|
$72,959
|
$298,513
|
$262,321
|
|
Adjusted Efficiency Ratio
|
47.52%
|
48.96%
|
51.44%
|
55.81%
|
54.19%
|
50.90%
|
56.13%
|
|
Average Assets
|
$6,996,214
|
$6,820,576
|
$6,734,994
|
$6,770,978 $6,589,870
|
$6,831,280
|
$6,057,335
|
|
Less average goodwill and intangible assets
|
(226,060)
|
(227,389)
|
(228,706)
|
(230,066)
|
(213,713)
|
(228,042)
|
(178,287)
|
|
Average Tangible Assets
|
$6,770,154
|
$6,593,187
|
$6,506,288
|
$6,540,912
|
$6,376,157
|
$6,603,238
|
$5,879,048
|
|
Return on Average Assets (ROA)
|
1.54%
|
1.49%
|
1.38%
|
1.36%
|
0.96%
|
1.45%
|
1.11%
|
|
Impact of removing average intangible assets and related amortization
|
0.12
|
0.12
|
0.12
|
0.12
|
0.09
|
0.11
|
0.09
|
|
Return on Average Tangible Assets (ROTA)
|
1.66
|
1.61
|
1.50
|
1.48
|
1.05
|
1.56
|
1.20
|
|
Impact of other adjustments for Adjusted Net Income
|
(0.09)
|
0.06
|
0.09
|
0.02
|
0.44
|
0.02
|
0.15
|
|
Adjusted Return on Average Tangible Assets
|
1.57
|
1.67
|
1.59
|
1.50
|
1.49
|
1.58
|
1.35
|
|
Average Shareholders' Equity
|
$976,200
|
$946,670
|
$911,479
|
$879,564
|
$827,759
|
$928,793
|
$740,571
|
|
Less average goodwill and intangible assets
|
(226,060)
|
(227,389)
|
(228,706)
|
(230,066)
|
(213,713)
|
(228,042)
|
(178,287)
|
|
Average Tangible Equity
|
$750,140
|
$719,281
|
$682,773
|
$649,498
|
$614,046
|
$700,751
|
$562,284
|
|
Return on Average Shareholders' Equity
|
11.04%
|
10.73%
|
10.23%
|
10.47%
|
7.65%
|
10.63%
|
9.08%
|
|
Impact of removing average intangible assets and related amortization
|
3.91
|
4.00
|
4.07
|
4.39
|
3.29
|
4.09
|
3.46
|
|
Return on Average Tangible Common Equity (ROTCE)
|
14.95
|
14.73
|
14.30
|
14.86
|
10.94
|
14.72
|
12.54
|
|
Impact of other adjustments for Adjusted Net Income
|
(0.76)
|
0.57
|
0.87
|
0.25
|
4.50
|
0.21
|
1.52
|
|
Adjusted Return on Average Tangible Common Equity
|
14.19
|
15.30
|
15.17
|
15.11
|
15.44
|
14.93
|
14.06
|
SeacoastBank.com
| 800 706 9991
***
Exercise Your Right to Vote ***
Important
Notice Regarding the Availability of Proxy Materials for the
2020 Annual Meeting of Shareholders to Be Held on May 27, 2020.
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Meeting
Information
|
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|
Meeting
Type: Annual Meeting of Shareholders
Record
Date: March 30, 2020
|
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Meeting
Date: May 27, 2020 Time: 10:00 AM EDT
|
|
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|
Location:
|
Hutchinson
Shores Resort
3793 NE Ocean Blvd.
Jensen Beach, Florida 34957
|
|
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|
|
815 COLORADO AVENUE
P.O. BOX 9012
STUART, FL 34995-9012
ATTN: KATHY HSU
|
|
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.
|
D04388-P36716
How
to Access the Proxy Materials
|
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Proxy
Materials Available to VIEW or RECEIVE:
|
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|
1. Notice & Proxy Statement 2. 2019 Annual Report on Form 10-K
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How
to View Online:
Have
the information that is printed in the box marked by the arrow
(located on the following page) and visit: www.proxyvote.com.
|
|
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|
|
|
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
|
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|
|
2)
|
BY
TELEPHONE:
|
1-800-579-1639
|
|
|
|
|
3)
|
BY
E-MAIL*:
|
sendmaterial@proxyvote.com
|
|
|
|
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*
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
(located on the following page) in the subject line.
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|
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|
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 13, 2020 to facilitate timely delivery.
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|
Please
Choose One of the Following Voting Methods
|
|
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|
Vote In Person: Please
check the proxy materials for any special requirements for voting in person at the meeting.We
recommend that 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.
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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
(located
on the following page) available and follow the instructions.
|
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Vote
By Mail: You can vote by mail by requesting a paper copy
of the proxy materials, which will include a proxy card.
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D04389-P36716
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The
Board of Directors recommends a vote FOR ALL
director nominees and FOR Proposals 2 and
3.
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1.
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ELECT DIRECTORS
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01)
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Julie H. Daum
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02)
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Dennis S. Hudson, III
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03)
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Alvaro J. Monserrat
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2.
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Ratification of Appointment of Crowe LLP as Independent Auditor for 2020
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3.
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Advisory (Non-binding) Vote on Compensation of Named Executive Officers
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In their discretion, the Proxies are
authorized to vote upon such other matters as may properly come before the Annual Meeting.
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D04390-P36716
D04391-P36716
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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.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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D04343-P36716
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KEEP THIS
PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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SEACOAST BANKING CORPORATION OF
FLORIDA
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For
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Withhold
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For
All
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To
withhold authority to vote for any individual nominee(s), mark “For All Except” and write the
number(s) of the nominee(s) on the line below.
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The Board of Directors recommends a vote FOR ALL
director nominees and FOR Proposals 2 and 3.
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All
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All
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Except
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☐
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☐
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☐
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1.
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Elect Directors
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01)
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Julie H. Daum
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02)
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Dennis S. Hudson, III
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03)
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Alvaro J. Monserrat
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For
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Against
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Abstain
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2.
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Ratification of Appointment of Crowe
LLP as Independent Auditor for 2020
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☐
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☐
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☐
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3.
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Advisory (Non-binding) Vote on Compensation
of Named Executive Officers
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☐
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☐
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☐
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In
their discretion, the Proxies are authorized to vote upon such other matters as may properly
come before the Annual Meeting.
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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.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice & Proxy Statement and our 2019 Annual
Report on Form 10-K are
available at www.proxyvote.com.
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THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
SEACOAST BANKING CORPORATION OF FLORIDA
FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
WEDNESDAY, MAY 27, 2020 at 10:00 A.M.
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FOR
REGISTERED SHAREHOLDERS: The undersigned shareholder(s) hereby appoint(s) Tracey
Dexter, as Proxy, and hereby authorize(s) her to represent and to vote all shares of
common stock of Seacoast Banking Corporation of Florida (“Seacoast”) that
the undersigned may be entitled to vote at the 2020 Annual Meeting of Shareholders to
be held at Hutchinson Shores Resort, 3793 NE Ocean Blvd., Jensen Beach, Florida, or by
means of remote communication (a virtual-only Annual Meeting) on Wednesday, May 27, 2020,
at 10:00 A.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 10, 2020.
FOR
PARTICIPANTS IN SEACOAST’S EMPLOYEE BENEFIT PLANS: This form provides voting
instructions to the trustees for the shares of Seacoast common stock 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 20, 2020 (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 Seacoast common stock allocated to
the undersigned’s account under such plan(s) at 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 10, 2020. 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, your shares of Seacoast common stock.
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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.
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(Continued, and to be marked, dated and signed, on the other side)
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