Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On January 4, 2021, Seacoast Banking Corporation of Florida (the “Company”) announced the appointment of Charles M. Shaffer as chief executive officer and as a member of the Board of Directors of the Company (the “Board”), effective January 1, 2021. Former chief executive officer Dennis S. Hudson III has become executive chairman of the Board. A copy of the press release announcing these changes is attached hereto as Exhibit 99.1 and incorporated herein by reference. The Company’s leadership transition is the result of the Board’s succession planning efforts, as previously reported on June 15, 2020.
Mr. Shaffer, 47, most recently served as president and chief operating officer of the Company since June 2020. Previously, Mr. Shaffer served as executive vice president and chief financial officer of the Company from January 2018 to May 2019, as executive vice president and community banking executive of the Company from October 2013 to March 2017, and as senior vice president and controller of the Company’s subsidiary, Seacoast National Bank, from December 2005 to September 2013. There are no familial relationships between Mr. Shaffer and any director or executive officer of the Company. Mr. Shaffer has not engaged in any transaction with the Company that would be reportable as a related party transaction under Item 404(a) of Regulation S-K.
As a key driver of the Company’s growth strategy, Mr. Shaffer has been instrumental in influencing the Company’s retail, commercial banking, wealth, digital, and non-branch distribution strategies, as well as designing and working across the organization at all levels to deliver peer-leading earnings performance. Mr. Shaffer holds a bachelor of science degree in finance from Florida State University, a bachelor of arts degree in accounting from Florida Atlantic University, and a master of business administration with a finance specialization from the University of Central Florida, and he is a graduate of the advanced management program at the University of Pennsylvania Wharton School of Business. He is a certified public accountant (CPA) licensed in Florida.
In connection with his appointment as chief executive officer, Mr. Shaffer entered into an employment agreement with the Company, dated December 31, 2020 (the “Employment Agreement”). The Employment Agreement has an initial term of three years and automatically renews for one year thereafter, unless either party gives 60 days’ prior written notice of non-renewal. Under the Employment Agreement, Mr. Shaffer receives a minimum base salary (presently $600,000 per year), as well as a car allowance and any other benefits that are approved by the Board from time to time. Mr. Shaffer also may receive other compensation including equity awards and incentive awards, and he is entitled to participate in all current and future employee benefit plans and arrangements in which senior management may participate.
Under the Employment Agreement, if Mr. Shaffer is terminated for “cause” or resigns without “good reason,” as defined in the Employment Agreement, he will receive payment of his base salary and unused vacation through the date of termination, and any unreimbursed expenses (collectively, the “Accrued Obligations”).
If Mr. Shaffer resigns for good reason or is terminated without cause prior to a “change in control” (as defined in the Employment Agreement), he will receive: 1) the Accrued Obligations; and 2) upon execution of a release of all claims against the Company, severance equal to: a) two times his base salary in effect on the date of separation, paid over a 24-month period; b) two times the average of the annual bonuses he earned over the previous three full fiscal years (the “Cash Bonus”), paid over a 24-month period; and c) a lump sum payment equal to the cost to continue group medical, dental, vision and prescription drug plan benefits for Mr. Shaffer, his spouse and his eligible dependents for two years, in excess of i) the active employee rate for such benefits and ii) the 2% administrative fee (the “Continuing Benefits Payment”). If Mr. Shaffer resigns for good reason or is terminated without cause within twelve months following a change in control, he will receive: 1) the Accrued Obligations; and 2) upon execution of a release of all claims against the Company, lump sum severance of: a) three times his base salary in effect on the date of separation; b) three times the Cash Bonus; and c) a Continuing Benefits Payment relating to three years. If
Mr. Shaffer’s employment is terminated due to death or Disability (as defined in the Employment Agreement), he will receive: 1) the Accrued Obligations; and 2) upon execution of a release of all claims against the Company, severance of two times his base salary in effect on the date of separation.
The Employment Agreement also contains certain non-competition, non-disclosure and non-solicitation covenants, and covenants regarding the non-disclosure of confidential information and trade secrets, cooperation and the return of Company property. In addition, under the agreement, Mr. Shaffer is subject to the Company’s policies applicable to executives generally, including its policies relating to claw-back of compensation.
The foregoing description of the Employment Agreement is only a summary and is qualified in its entirety by reference to the full text of Mr. Shaffer’s Employment Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The Employment Agreement replaces the prior Change in Control Agreement between Mr. Shaffer and the Company, dated September 21, 2016.
The amendment to Mr. Hudson’s employment agreement and changes to his compensation in connection with his appointment as executive chairman of the Board were previously reported on June 15, 2020.