| · | 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 |
Non-Employee Director Compensation Structure(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. | Annual Retainer paid to All Non-employee Directors of the Company or the Bank: | | Cash(1) | | $ | 37,500 | | | Stock Award(2) | | $ | 37,500 | | | Annual Committee Chair Retainer for CGC and Bank Committees | | $ | 10,000 | | | Annual Committee Chair Retainer for Audit & ERMC Committees | | $ | 15,000 | | | Annual Committee Chair Retainer for S&I Committee | | $ | 25,000 | |
| (1) | A number of directors have elected to receive all or a portion of their cash retainer in stock or stock options as described below. |
| (2) | Granted under the 2013 Incentive Plan following election or reelection at each annual meeting of shareholders. |
All cash retainers are paid in quarterly installments. To further align directors’ interests with long-term shareholder interests, directors may elect to receive: 1) all or a portion of their annual cash retainer in Company common stock, and 2) up to a maximum of 30% of their annual cash retainer in the form of non-qualified options to purchase shares of Company common stock. Retainers are pro-rated for directors who join or leave the Board or have a change in Board role during a quarterly period. Non-employee directors are also reimbursed for their travel, lodging and related expenses incurred in connection with attending Board, committee and shareholders meetings and other designated Company events. Executive officers who are also directors do not receive any compensation for services provided as a director. There were no changes to director compensation for fiscal year 2017 compared to 2016. However, beginning in 2018, the annual stock award payment will increase by $25,000 and all Annual Committee Chair Retainers will equal $25,000.
Lead Independent Director Compensation & Agreement The Board appointed Roger GoldmanChristopher E. Fogal as Lead Independent Director in November 2012.December 2018. Mr. Goldman’s compensation reflects the additional time commitment for this role compared to other non-employee directors, the enhanced credibility with the investment community his affiliation with Seacoast provides the Company, and the improved performance and effectiveness of the Board under his leadership. His significant role is more fully described under the section entitled “Board Leadership Structure”. On March 1, 2014, the Company entered into a three-year agreement with Lead Independent Director Goldman which automatically renews for successive three-year terms on the first day of each month following the effective date. Under the agreement, Lead Independent Director GoldmanFogal receives an additional annual cash retainer of $275,000$25,000 for his service as Lead Independent Director, paid in a combination of cash, restricted stock and other stock-based awards as mutually agreed by the Company and the Lead Independent Director. Upon signing of the agreement, he also received a stock option to purchase 200,000 shares of Seacoast common stock at an exercise price equal to the fair market value of the stock on the grant date ($10.78). The stock option vested on a pro rata monthly basis beginning on March 1, 2014 and became fully vested and exercisable on February 28, 2017. In addition, under the agreement, Lead Independent Director Goldman receives a $20,000 annual housing allowance, is provided with office space in a Company-owned facility, and is reimbursed for company-related travel expenses, reasonable customer or staff entertainment expenses and extraordinary use of his office staff.
Director Stock Ownership Policy To align the interests of our directors and shareholders, our Board of Directors believes that directors should hold a significant financial stake in Seacoast. Consequently, our Corporate Governance Guidelines require that directors own Seacoast stock equal in value to a minimum of three times their base annual retainer within four years of joining the Board. Each director must retain 75% of their shares until reaching the minimum share ownership requirement, and after the ownership target is met, must retain at least 50% of the shares for one year. All of our directors own more than the minimum stock requirement, except for two of our newest directors who have been on the Board for three years or less, and are on track to be compliant with our policy within the prescribed time frame.
The table below sets forth the total compensation paid to Board members who are not employees of the Company or the Bank for fiscal year 2017.2019. 2017 DIRECTOR COMPENSATION TABLE2019Director Compensation Table
Director | | Fees Earned or Paid in Cash ($)(1) | | Stock Awards ($)(2) | | Option Awards ($)(3) | | All Other
Compensation ($) | | Total ($) | | Fees Earned
or Paid in Cash
($)(1) | Stock Awards
($)(2) | Option Awards
($)(3) | All Other
Compensation
($) | Total
($) | | Dennis J. Arczynski | | | 52,500 | (3)(4) | | | 37,507 | | | | — | | | | — | | | | 90,007 | | 81,250(4) | 62,516 | -- | -- | 143,766 | Stephen E. Bohner | | | 47,500 | (3)(5) | | | 37,507 | | | | — | | | | — | | | | 85,007 | | 15,625(4) | -- | -- | -- | 15,625 | | Jacqueline L. Bradley | | | 47,500 | (3)(6) | | | 37,507 | | | | — | | | | — | | | | 85,007 | | 62,500(3)(4) | 62,516 | -- | -- | 125,016 | | H. Gilbert Culbreth, Jr. | | | 47,500 | (8) | | | 37,507 | | | | — | | | | — | | | | 85,007 | | 37,500(8) | 62,516 | -- | -- | 100,016 | | Julie H. Daum | | | 37,500 | (3)(7) | | | 37,507 | | | | — | | | | — | | | | 75,007 | | 37,500(3)(8) | 62,516 | -- | -- | 100,016 | | Christopher E. Fogal | | | 52,500 | (3)(9) | | | 37,507 | | | | — | | | | — | | | | 90,007 | | 87,500(3)(4)(5) | 62,516 | -- | -- | 150,016 | | Maryann Goebel | | | 37,500 | (3) | | | 37,507 | | | | — | | | | — | | | | 75,007 | | 62,500(4) | 62,516 | -- | -- | 125,016 | | Roger O. Goldman | | | 312,500 | (3)(7)(10) | | | 37,507 | | | | — | | | | 20,000 | (11) | | | 370,007 | | | | Dennis S. Hudson, Jr. | | | 37,500 | | | | 37,507 | | | | — | | | | — | | | | 75,007 | | | | Timothy S. Huval | | | 37,500 | (7) | | | 37,507 | | | | — | | | | — | | | | 75,007 | | | | Herbert Lurie | | | 37,500 | (3)(7) | | | 37,507 | | | | — | | | | — | | | | 75,007 | | | | 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 | (3)(7) | | | 37,507 | | | | — | | | | — | | | | 75,007 | | 37,500 | 62,516 | -- | -- | 100,016 | | Thomas E. Rossin | | | 62,500 | (12) | | | 37,507 | | | | — | | | | — | | | | 100,007 | | 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 20172019 is provided below in the table entitled “Stock Awards Granted to Directors in 2017”2019”. |
| (2) | A breakdown of the stock awards made to each director in 20172019 is provided below in the table entitled “Stock Awards Granted to Directors in 2017”2019”. No stock awards held by directors were outstanding as of December 31, 2017.2019. |
| (3) | Certain directors elected to take a portion of their 20172019 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, 2017,2019, all of the stock option awards described below in the table entitled “Stock Awards Granted to Directors in 2017”2019” were outstanding,outstanding. |
| (4) | Includes $25,000 for each service as wellChair of a Board Committee; Committee Chair rotation is pro-rated accordingly on quarterly basis. |
| (5) | Includes $25,000 for service as 170,000 sharesLead 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 stock option held by Mr. Goldman described under “Lead Independent Director Agreement” above. |
| (4) | Includes $15,000Bank and received board service compensation for his service as Chairsuch for the remainder of the ERMC.2019. Compensation for Messrs. Bohner and Huval was prorated accordingly on a quarterly basis. |
| (5) | Includes $10,000 for his service as Chair of the Bank’s Credit Review Committee. |
| (6) | Includes $10,000 for her service as Chair of the Bank’s Wealth Committee. |
| (7) | Mr. Lipstein was elected to the Board in May 2019. His compensation was prorated accordingly for 2019. |
| (8) | The table below shows the cash amounts that the directors deferred into the Directors’ Deferred Compensation Plan (“DDCP”) described below in 20172019 and the total number of shares held in the DDCP Seacoast Stock Account and Equity Deferral Account for each director as of the Record Date: |
| Director | Cash Deferred into DDCP
Stock Account in 2019
($) | 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 |
| (8) | Includes $10,000 for his service as Chair of the CGC. |
| (9) | Includes $15,000 for his service as Chair of the Audit Committee. |
| (10) | Includes $275,000 for his service as Lead Independent Director. |
| (12) | Includes $25,000 for his service as Chair of the Strategy and Innovation Committee. |
| Director | | Cash Deferred
into DDCP
Stock Account in
2017 ($) | | | Shares held in DDCP
Stock Account as of
Record Date (#) | | | Shares held in
DDCP Equity
Deferral Account (#) | | |
Total Shares
held in DDCP
(#) | | | Dennis J. Arczynski | | | — | | | | 16,178 | | | | 9,811 | | | | 25,989 | | | Stephen E. Bohner | | | — | | | | 11,483 | | | | 9,811 | | | | 21,294 | | | Jacqueline L. Bradley | | | — | | | | — | | | | 7,046 | | | | 7,046 | | | H. Gilbert Culbreth, Jr. | | $ | 26,250 | | | | 2,139 | | | | 9,811 | | | | 11,950 | | | Julie H. Daum | | $ | 26,250 | | | | 5,630 | | | | 9,811 | | | | 15,441 | | | Christopher E. Fogal | | | — | | | | 627 | | | | 9,811 | | | | 10,438 | | | Maryann Goebel | | | — | | | | — | | | | 9,515 | | | | 9,515 | | | Roger O. Goldman | | $ | 26,250 | | | | 32,533 | | | | 9,811 | | | | 42,344 | | | Dennis S. Hudson, Jr. | | | — | | | | — | | | | 9,811 | | | | 9,811 | | | Timothy S. Huval | | | — | | | | — | | | | 2,688 | | | | 2,688 | | | Herbert A. Lurie | | $ | 26,250 | | | | 2,565 | | | | 3,275 | | | | 5,840 | | | Alvaro J. Monserrat | | | — | | | | 247 | | | | 1,513 | | | | 1,760 | | | Thomas E. Rossin | | | — | | | | — | | | | 9,811 | | | | 9,811 | |
stock awardsStockAwards & Options GRANTed to directors in 2017Granted To Directors In 2019
The following table sets forth certain information concerning stock awards and options granted to directors during 2017.2019. As of December 31, 2017,2019, all stock awards granted to directors were fully vested, and all of the option awards listed below were outstanding, as well as 170,000 shares underlying the stock option held by Mr. Goldman described under “Lead Independent Director Agreement” above.outstanding. Name | | Grant Date | | Stock
Awards
(1) (#) | | | Option Awards:
Number of Securities
Underlying Options(2)
(#) | | | Exercise or
Base Price of
Option Awards
($/Sh) | | | Grant Date Fair
Value of Stock
and Option
Awards(3) ($) | | Grant Date | Stock Awards(1)
(#) | Option Awards:
Number of Securities
Underlying Options(2)
(#) | Exercise or Base
Price of Option
Awards
($/Sh) | Grant Date Fair
Value of Stock and
Option Awards(3)
($) | | Dennis J. Arczynski | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Stephen E. Bohner | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | -- | -- | -- | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Jacqueline L. Bradley | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 2/4/2019 | 2,312 -- | -- 1,146 | -- 28.42 | 62,516 11,242 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | H. Gilbert Culbreth, Jr. | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Julie H. Daum | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 2/4/2019 | 2,312 -- | -- 1,146 | -- 28.42 | 62,516 11,242 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Christopher E. Fogal | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 2/4/2019 | 2,312 -- | -- 1,146 | -- 28.42 | 62,516 11,242 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Maryann Goebel | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Roger O. Goldman | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Dennis S. Hudson, Jr. | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | Timothy S. Huval | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | -- | -- | -- | | Robert J. Lipstein | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | Herbert A. Lurie | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Alvaro J. Monserrat | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 7/23/2019 | 2,312 | -- | -- | 62,516 | | | | 2/6/2017 | | | — | | | | 2,142 | | | | 22.65 | | | | 11,246 | | | | Thomas E. Rossin | | 10/24/2017 | | | 1,513 | | | | — | | | | — | | | $ | 37,507 | | 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 $5.25$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, 2017.2019. |
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 Committeecommittee 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 planDDCP 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
Approval of amendment to the
AMENDed and restated Articles of incorporation of
seacoast banking corporation of florida
TO INCREASE the number of AUTHORIZED SHARES of common stock
On March 13, 2018, our Board of Directors adopted, subject to shareholder approval at the Annual Meeting, an amendment to our amended and restated articles of incorporation to increase the number of authorized shares of the Company’s common stock, $0.10 par value per share, from 60 million shares to 120 million shares.
The proposed amendment to Seacoast’s amended and restated articles of incorporation is attached to this proxy statement as Appendix B. No other changes to the Company’s articles of incorporation are being proposed, which will remain at 4 million.
Reasons for Amendment
Our Board of Directors is proposing the adoption of an amendment to the Company’s amended and restated articles of incorporation to increase the number of authorized shares of common stock from 60 million to 120 million shares. Of the 60 million shares that are currently authorized to be issued under the Company’s articles of incorporation, as of the Record Date, 46,982,399 shares are issued and outstanding, 112,725 shares are held in treasury, 500,000 shares are reserved for issuance under our dividend reinvestment and stock purchase plan and 584,167 are reserved for issuance under our equity incentive plans. Accordingly, we currently have less than 11,820,709 shares of common stock available for future issuances.
In order to assure flexibility of action in the future and meet our future business needs as they arise, our Board of Directors believes that it is desirable and in the best interests of the Company and its shareholders that there be a substantial number of authorized but unissued shares of common stock. The Board of Directors believes that having the authority to issue additional shares of common stock will avoid the possible delay and significant expense of calling and holding a special meeting of shareholders to increase the authorized shares at a later date and will enhance its ability to respond promptly to business and other opportunities that may arise. The Company strategically plans to grow through mergers and acquisitions. Seacoast successfully consummated three acquisitions in 2017: GulfShore Bancshares, Inc. in April 2017; NorthStar Banking Corporation in October 2017; and Palm Beach Community Bank in November 2017. These mergers involved, and potential future mergers and acquisitions may involve the issuance of shares of Seacoast common stock or securities convertible into shares of common stock.
Additional shares of Seacoast common stock may also be necessary in connection with the declaration of stock dividends or stock splits, future public and private financings, investment opportunities, other distributions, or other corporate purposes, as well as to meet anticipated future obligations under our existing equity incentive plans or any future incentive plans, under which we may grant future equity awards to our employees, officers and directors. We believe that having the ability to grant equity awards is critical to retaining and recruiting a qualified management team.
Other than issuances pursuant to our existing dividend reinvestment and stock purchase plan and our equity incentive plans (each as described above), as of the date of this proxy statement, we have no definitive plans, arrangements or understandings regarding the issuance of additional shares of common stock that would be authorized pursuant to this proposal.
If Proposal 2 is approved, the number of authorized shares of Seacoast common stock will be increased and the Board of Directors will have the right to issue, without further shareholder approval, subject to potential restrictions described below, an additional 60 million shares of common stock. If approved, the amendment will be effective upon the filing of the Articles of Amendment to the Amended and Restated Articles of Incorporation with the Department of State of the State of Florida promptly after the Annual Meeting.
Anti-Takeover Effect
The proposed increase in the authorized number of shares of common stock could, in some situations, have the effect of discouraging unsolicited takeover attempts or inhibiting the removal of incumbent management and may limit the opportunity for shareholders to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal. For example, the issuance of the newly authorized shares of common stock could be used to deter or prevent a change of control through dilution of stock ownership of persons seeking to take control or by rendering a transaction proposed by such persons more costly. However, the Board of Directors is not aware of any third-party attempts to assume control of Seacoast and has not presented this Proposal 2 with the intent that it be utilized as an anti-takeover device or to inhibit the removal of incumbent management.
Terms of our Common Stock
If Proposal 2 is approved, the additional authorized shares of common stock may be issued for such consideration, cash or otherwise, at such terms, times and amounts as the Board of Directors may determine without further shareholder approval, except to the extent that shareholder approval is required by applicable laws, rules or regulations. Because our common stock is traded on the NASDAQ Global Select Market, shareholder approval must be obtained, under applicable NASDAQ rules, prior to the issuance of shares for certain purposes, including the issuance of greater than 20% of Seacoast’s then outstanding shares of common stock or voting power in connection with a private financing or an acquisition or merger.
The authorization of additional shares of common stock will not, by itself, have any effect on the rights of present shareholders. The additional 60 million shares to be authorized would be part of Seacoast’s existing class of common stock and, if and when issued, would have the same rights and privileges as the shares of common stock presently authorized, issued and outstanding. Shareholders do not have preemptive rights with respect to our commons stock and therefore, do not have any preferential rights to subscribe for or purchase additional shares of common stock in order to maintain proportionate ownership of their shares. Accordingly, the issuance of additional shares of common stock for corporate purposes other than a stock split or stock dividend could have a dilutive effect on the ownership and voting rights of shareholders at the time of issuance.
The Board of Directors unanimously recommends a vote "FOR" Proposal 2.
PROPOSAL 3
AMEND THE COMPANY’S 2013 INCENTIVE PLAN
TO INCREASE AUTHORIZED SHARES
We are asking our shareholders to approve an amendment to the Seacoast Banking Corporation of Florida 2013 Incentive Plan (the “2013 Plan”). Our 2013 Plan is the only plan under which equity-based compensation may currently be awarded to our executive officers and employees. As of the Record Date, there were 584,167 shares of our common stock remaining available for the grant of equity awards under the 2013 Plan. In order to enable us to continue to offer meaningful equity-based incentives, as well as cash-based incentives, to our employees, officers, directors and consultants, our board of directors believes that it is both necessary and appropriate to increase the number of shares of our common stock available for these purposes. As a result, on February 13, 2018, the Board of Directors adopted, subject to shareholder approval at the Annual Meeting, an amendment to add 1,250,000 shares to the 2013 Plan. The share increase is the only change to the 2013 Plan, a summary of which is provided below.
If the amendment to the 2013 Plan is approved by our shareholders at the Annual Meeting, it will become effective on the date of the Annual Meeting. If the amendment is not approved by our shareholders, then the 2013 Plan will remain in effect as it presently exists.
Background for the Current Request to Approve an Increase in the Share Reserve under the 2013 Plan
In setting the number of proposed shares issuable under our amended 2013 Plan, our Compensation and Governance Committee and our Board of Directors considered a number of factors, including the following (each of which are discussed further below):
• Key data relating to outstanding equity awards and shares available for grant;
• Significant historical award information; and
• Future share needs.
Key Data Relating to Outstanding Awards
The following table provides information regarding outstanding equity awards and shares available for future awards under the 2013 Plan as of our Record Date (and without giving effect to approval of the amendment to the 2013 Plan under this proposal).
| Total shares underlying outstanding stock options | | | 896,269 | | | Weighted-average exercise price of outstanding stock options | | $ | 17.62 | | | Weighted-average remaining contractual life of outstanding stock options | | | 7.0 years | | | Total shares underlying full value awards outstanding | | | 585,734 | | | Total shares currently available for grant | | | 584,167 | |
Information Regarding our Authorized Shares and Stock Price
Our amended and restated articles of incorporation authorize the issuance of 60 million shares of common stock. As of our Record Date, there were 46,982,399 shares of common stock issued and outstanding and the closing price of a share of our common stock as of that date was $26.72.
Significant Historical Award Information
Common measures of a stock plan’s cost include burn rate, dilution and overhang. The burn rate refers to how fast a company uses the supply of shares authorized for issuance under its stock plan. Dilution measures the degree to which our shareholders’ ownership has been diluted by stock-based compensation awarded under our various equity plans and also includes shares that may be awarded under our various equity plans in the future, which is commonly referred to as overhang.
We closely monitor our share usage and believe we have been judicious in our use of shares previously authorized by our shareholders under the 2013 Plan. The following table and related footnotes show our key equity metrics over the last three years.
| Key Metrics (At Target) | | 2015 | | | 2016 | | | 2017 | | | Burn Rate(1) | | | 0.94 | % | | | 1.48 | % | | | 1.35 | % | | Overhang(2) | | | 6.60 | % | | | 7.03 | % | | | 5.02 | % | | Dilution(3) | | | 3.83 | % | | | 3.99 | % | | | 3.74 | % |
| (1) | Adjusted burn rate is calculated under Institutional Stockholder Services, or ISS, methodology by dividing the number of shares subject to equity awards granted during the applicable fiscal period, adjusted to address the dilutive effect of stock-based awards other than stock options and SARs, by the total weighted-average number of shares outstanding during the applicable fiscal period. The adjustment is based on the volatility of a company’s stock price, and in 2017, our applicable adjustment factor was25.4. |
| (2) | Overhang is calculated by dividing (a) the sum of (x) the number of shares subject to equity awards outstanding at the end of the year and (y) the number of shares available for future grants, by (b) the number of shares outstanding at the end of the year. |
| (3) | Dilution is calculated by dividing the number of shares subject to equity awards outstanding at the end of the fiscal year by the number of shares outstanding at the end of the fiscal year. |
Number of Shares Requested
Several factors were evaluated in determining to request an increase of 1,250,000 shares for the 2013 Plan:
| · | The original 2013 Plan included authorization for 1,300,000 shares (after adjusting for our reverse stock split on December 13, 2013), and in 2015 the shareholders approved an amendment to the 2013 Plan to increase the share authorization by 1,700,000 additional shares. The additional 1,250,000 shares requested under this proposal, together with the remaining shares under the 2013 Plan, represent the shares the Company anticipates needing for the next three (3) years under normal circumstances. |
| · | Although we must manage our share reserve under the possibility that awards will be earned at the maximum level, this will only occur if we achieve the maximum performance under each metric in each award, which is not expected to be the case. Our actual share usage will also vary from our estimate based upon changes in market grant values, changes in the number of recipients, changes in our stock price, changes in the structure of our long-term incentive program, changes in our dividend rate and forfeitures of outstanding awards. We believe that the proposed share reserve reflects an appropriate balance between our desire to allow maximum flexibility in a competitive labor market and shareholder interests of limiting dilution. |
| · | As of the Record Date, the plan share reserve represented less than 0.1% of our common shares outstanding. |
| · | As of the Record Date, the total overhang resulting from the share request, including our outstanding awards under the 2013 Plan represents approximately 3.90% of our fully-diluted common shares outstanding. |
Aside from the increase in shares available under the 2013 Plan, the current proposal does not amend or change any provisions of the 2013 Plan, which were approved by shareholders at the 2013 annual meeting and the 2015 annual meeting. However, to enable you to evaluate the proposed share increase, the following is a description of the material terms of the 2013 Plan.
Summary of the 2013 Plan
Important Provisions
The 2013 Plan contains a number of provisions that we believe are consistent with the interests of shareholders and sound corporate governance practices, including:
| · | No liberal share counting. The plan prohibits the reuse of shares withheld or delivered to satisfy the exercise price of an option or SAR or to satisfy tax withholding requirements. | | | |
| · | No repricing of stock options or SARs. The plan prohibits the repricing of stock options or SARs without shareholder approval. |
| · | No discounted stock options or SARs. All stock options and SARs must have an exercise price or base price equal to or greater than the fair market value of the underlying common stock on the date of grant. |
| · | No dividends on unearned awards. The plan prohibits the current payment of dividends or dividend equivalent rights on unearned awards. |
| · | Compensation recoupment policy. Awards under the plan will be subject to any compensation recoupment policy that the Company may adopt from time to time. |
| · | Limit on awards to non-employee directors. The plan imposes a maximum number of shares (1,000,000) that may be granted to any one non-employee director in any 12-month period. |
Purpose
The purpose of the 2013 Plan is to promote the success, and enhance the value of the Company success by linking the personal interests of its employees, officers, and directors to those of the Company’s shareholders, and by providing participants with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of employees, officers, directors, consultants and advisors upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.
Permissible Awards
The 2013 Plan authorizes the grant of awards in any of the following forms:
| · | Options to purchase shares of common stock, which may be nonstatutory stock options or incentive stock options under the U.S. Internal Revenue Code (the “Code”). The exercise price of an option granted under the 2013 Plan may not be less than the fair market value of the Company’s common stock on the date of grant. Stock options granted under the 2013 Plan have a maximum term of ten years. |
| · | Stock appreciation rights, or SARs, which give the holder the right to receive the excess, if any, of the fair market value of one share of common stock on the date of exercise, over the base price of the stock appreciation right. The base price of a SAR may not be less than the fair market value of the Company’s common stock on the date of grant. SARs granted under the 2013 Plan have a maximum term of ten years. |
| · | Restricted stock, which is subject to restrictions on transferability and subject to forfeiture on terms set by the Committee. |
| · | Restricted stock units, which represent the right to receive shares of common stock (or an equivalent value in cash or other property) in the future, based upon the attainment of stated vesting or performance goals set by the Committee. |
| · | Deferred stock units, which represent the right to receive shares of common stock (or an equivalent value in cash or other property) in the future, generally without any vesting or performance restrictions. |
| · | Performance awards, including qualified performance-based awards under Code section 162(m). |
| · | Other stock-based awards in the discretion of the Committee, including unrestricted stock grants. |
All awards will be evidenced by a written award certificate between the Company and the participant, which will include such provisions as may be specified by the Committee. Dividend equivalent rights, which entitle the participant to payments in cash or property calculated by reference to the amount of dividends paid on the shares of stock underlying an award, may be granted with respect to awards other than options or SARs.
Awards to Non-Employee Directors
Awards granted under the 2013 Plan to the Company’s non-employee directors will be made only in accordance with the terms, conditions and parameters of a plan, program or policy for the compensation of non-employee directors as in effect from time to time. The Committee may not make discretionary grants under the 2013 Plan to non-employee directors. The maximum aggregate number of shares underlying any award granted under the 2013 Plan in any 12-month period to any one non-employee director is 1,000,000 shares.
Shares Available for Awards
In 2013, shareholders approved an aggregate of 1,300,000 shares under the 2013 Plan, and in 2015, shareholders approved an additional 1,700,000 shares under the 2013 Plan. The current proposal will add 1,250,000 shares, for a total of 4,250,000 shares available under the 2013 Plan. This amount is reduced by the number of shares that have already been granted under the 2013 Plan, as discussed above. No further awards are being granted under any prior plans, and any prior plans sponsored by the Company shall remain in effect only so long as awards granted thereunder shall remain outstanding.
Share Counting
Shares subject to awards that terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason, and shares underlying awards that are ultimately settled in cash, will become available for future grants of awards under the 2013 Plan. Similarly, to the extent that the full number of shares subject to a performance award is not issued by reason of failure to achieve maximum performance goals, the unearned shares originally subject to the award will be added back to the 2013 Plan share reserve and again be available for issuance pursuant to awards granted under the 2013 Plan. However, the following shares may not again be made available for issuance as awards under the 2013 Plan: (i) shares not issued or delivered as a result of the net settlement of an outstanding option or SAR, (ii) shares used to pay the exercise price or withholding taxes related to an outstanding option or SAR, or (iii) shares repurchased on the open market with the proceeds of the exercise price of an option.
Limitations on Awards
The maximum aggregate number of shares subject to stock-based awards that may be granted under the 2013 Plan in any 12-month period to any one participant is as follows:
Type of Award | | Number of Shares | | Options | | | 1,000,000 | | SARs | | | 1,000,000 | | Restricted Stock or Restricted Stock Units | | | 1,000,000 | | Other Stock-Based Awards | | | 1,000,000 | | Awards to Non-Employee Directors | | | 1,000,000 | |
The maximum aggregate dollar amount that may be paid with respect to cash-based awards under the 2013 Plan to any one participant in any fiscal year of the Company is $1,000,000.
Administration
The 2013 Plan will be administered by the Compensation and Governance Committee, or such other committee as may be determined by the Board (the “Committee”). The Committee will have the authority to grant awards; designate participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may deem advisable to administer the 2013 Plan; prescribe forms of award certificates, and make any rules, interpretations, and any and all other decisions and determinations that may be required under the 2013 Plan. The Board may at any time administer the 2013 Plan. If it does so, it will have all the powers of the Committee under the 2013 Plan.
In addition, the Board or the Committee may expressly delegate to a special committee some or all of the Committee’s authority, within specified parameters, to grant awards to eligible participants who, at the time of grant, are not executive officers.
Deductibility under Section 162(m)
Section 162(m) of the Internal Revenue Code generally provides that a corporation may not deduct compensation amounts in excess of $1,000,000 paid to any of its named executive officers in any year. Prior to the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), this limitation did not apply to options, SARs or awards that were conditioned on the achievement of performance goals if certain requirements were met. The 2013 Plan was designed to allow the Committee to grant awards that were intended to qualify as performance-based compensation under Section 162(m), although the Committee reserved the discretion to grant or approve awards or compensation that were not exempt from the deduction limits.
The Tax Act repealed the performance-based compensation exemption under Section 162(m), effective for tax years beginning after December 31, 2017. Other than certain outstanding awards that meet the “grandfather” requirements under the Tax Act, awards granted under the 2013 Plan will be subject to the deduction limit under Section 162(m).
Performance Goals
As noted above, prior to the Tax Act, the Committee could designate awards under the 2013 Plan as qualified performance-based awards for purposes of Section 162(m). If an award was so designated, the Committee established objectively determinable performance goals for the award. Performance goals for such awards were based on one or more criteria provided in the 2013 Plan, which performance goals could be expressed in terms of Company-wide objectives or in terms of objectives that relate to the performance of an affiliate or a division, region, department or function within the Company or an affiliate. Certain outstanding awards that meet the “grandfather” requirements under the Tax Act remain subject to these requirements under the 2013 Plan. In addition, while the performance-based compensation exemption is no longer available for new awards, the Committee may continue to grant awards with performance-based vesting requirements under the 2013 Plan.
Performance goals with respect to the business criteria listed in the 2013 plan may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index, that the Committee deems appropriate. Any member of a comparator group or an index that ceases to exist during a measurement period shall be disregarded for the entire measurement period. Performance goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion).
Each qualified performance-based award (other than a market-priced option or SAR) will be earned, vested and payable, as applicable, upon the achievement of performance goals established by the Committee based upon one or more of the above-listed qualified business criteria, together with the satisfaction of any other conditions, such as continued employment, as the Committee may determine to be appropriate. However, the Committee may provide, either in connection with the grant of an award or by amendment, that achievement of such performance goals will be waived, in whole or in part, upon the death or disability of the grantee or the occurrence of a change in control of the Company. Performance periods established by the Committee for any such qualified performance-based award may be as short as three months and may be any longer period.
The Committee may provide in any qualified performance-based award that any evaluation of performance will exclude or otherwise objectively adjust for any of the following events that occurs during a performance period: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in the then-current accounting principles; (f) extraordinary nonrecurring items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (g) acquisitions or divestitures; and (h) foreign exchange gains and losses.
Any payment of a qualified performance-based award will be conditioned on the written certification of the Committee in each case that the performance goals and any other material conditions were satisfied. Except as specifically provided above, no qualified performance-based award that is exempt under Section 162(m) may be amended, nor may the Committee exercise any discretionary authority it may otherwise have under the 2013 Plan, in any manner to waive the achievement of the applicable performance goal based on qualified business criteria or to increase the amount payable pursuant to the performance goal or the value of the award, or otherwise in a manner that would cause the award to cease to qualify for the Section 162(m) exemption. However, the Committee has the right, in connection with the grant of a qualified performance-based award, to exercise negative discretion to determine that the portion of such award actually earned, vested and/or payable (as applicable) shall be less than the portion that would be earned, vested and/or payable based solely upon application of the applicable performance goals.
Limitations on Transfer; Beneficiaries
No award will be assignable or transferable by a participant other than by will or the laws of descent and distribution; provided, however, that the Committee may permit other transfers (other than transfers for value) where the Committee concludes that such transferability does not result in accelerated taxation, does not cause any option intended to be an incentive stock option to fail to qualify as such, and is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities laws or regulations applicable to transferable awards. A participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the participant and to receive any distribution with respect to any award upon the participant’s death.
Acceleration upon Certain Events
Treatment of Awards upon a Participant’s Death or Disability
Unless otherwise provided in an award certificate or any special plan document governing an award, upon the termination of a participant’s service due to death or disability:
| · | all of that participant’s outstanding options and SARs will become fully vested and remain exercisable for a period of one year or until the earlier expiration of the original term of the option or SAR; |
| · | all time-based vesting restrictions on that participant’s outstanding awards will lapse as of the date of termination; and |
| · | the payout opportunities attainable under all of that participant’s outstanding performance-based awards will vest as follows: |
| o | if the date of termination occurs during the first half of the applicable performance period, all relevant performance goals will be deemed to have been achieved at the “target” level. |
| o | if the date of termination occurs during the second half of the applicable performance period, the awards will be deemed to have been achieved at the greater of the “target” level or the level of achievement as measured at the end of the quarter immediately preceding the date of termination. |
Treatment of Awards upon a Participant’s Retirement
The 2013 Plan does not provide special treatment for a participant’s retirement. Any such treatment may be addressed in an individual award certificate, or left to the Committee’s discretion.
Treatment of Awards upon a Change in Control
Unless otherwise provided in an award certificate or any special plan document governing an award:
| (A) | upon the occurrence of a change in control of the Company in which awards are not assumed by the surviving entity or otherwise equitably converted or substituted in connection with the change in control in a manner approved by the Committee or the Board: |
| · | all outstanding options and SARs will become fully vested and exercisable; |
| · | all time-based vesting restrictions on outstanding awards will lapse as of the date of the change in control; and |
| · | the payout opportunities attainable under all outstanding performance-based awards will vest based on target (if the change in control occurs during the first half of the performance period) or actual performance measured (if greater) as of the end of the calendar quarter immediately preceding the change in control (if the change in control occurs during the second half of the performance period), and |
| (B) | with respect to awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with a change in control, if within two years after the effective date of the change in control, a participant’s employment is terminated without Cause or the participant resigns for Good Reason (as such terms are defined), then: |
| · | all of that participant’s outstanding options and SARs will become fully vested and exercisable; |
| · | all time-based vesting restrictions on that participant’s outstanding awards will lapse as of the date of termination; and |
| · | the payout opportunities attainable under all outstanding performance-based awards will vest based on target (if the change in control occurs during the first half of the performance period) or actual performance measured as of the end of the calendar quarter immediately preceding the change in control (if the change in control occurs during the second half of the performance period). In both cases, the awards will payout on a pro rata basis, based on the time elapsed prior to the change in control. |
Acceleration for Other Reasons
The Committee may, in its sole discretion determine that, upon a Participant’s termination of service or a change in control, all or a portion of such participant’s awards shall become fully or partially exercisable, that some or all restrictions shall lapse, and that any performance criteria shall be deemed fully or partially satisfied. The Committee may discriminate among participants and among awards in exercising this discretion.
Adjustments
In the event of a nonreciprocal transaction between the Company and its shareholders that causes the per share value of the common stock to change (including, without limitation, any stock dividend, stock split, reverse stock split, spin-off, rights offering, or large nonrecurring cash dividend), the share authorization limits under the 2013 Plan will be adjusted proportionately, and the Committee must make such adjustments to the 2013 Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.
Termination and Amendment
If the increase in shares is approved by shareholders at the Annual Meeting, the 2013 Plan will terminate on the tenth anniversary of the date of the Annual Meeting. Otherwise, the 2013 Plan will terminate on the tenth anniversary of the date of the 2015 Annual Meeting. In either case, the 2013 Plan may be terminated earlier by the Board or the Committee. The Board or the Committee may, at any time and from time to time, terminate or amend the 2013 Plan, but if an amendment to the 2013 Plan would constitute a material amendment requiring shareholder approval under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to shareholder approval. No termination or amendment of the 2013 Plan may adversely affect any award previously granted under the 2013 Plan without the written consent of the participant. Without the prior approval of the Company’s shareholders, the 2013 Plan may not be amended to directly or indirectly reprice, replace or repurchase “underwater” options or SARs.
The Committee may amend or terminate outstanding awards. However, such amendments may require the consent of the participant and, unless approved by the shareholders or otherwise permitted by the anti-dilution provisions of the 2013 Plan, (i) the exercise price or base price of an option or SAR may not be reduced, directly or indirectly, (ii) an option or SAR may not be cancelled in exchange for cash, other awards, or options or SARS with an exercise price or base price that is less than the exercise price or base price of the original option or SAR, or otherwise, (iii) the Company may not repurchase an option or SAR for value (in cash or otherwise) from a participant if the current fair market value of the shares of common stock underlying the option or SAR is lower than the exercise price or base price per share of the option or SAR, and (iv) the original term of an option or SAR may not be extended.
Prohibition on Repricing
As indicated above under “Termination and Amendment,” outstanding stock options and SARs cannot be repriced, directly or indirectly, without the prior consent of the Company’s shareholders. The exchange of an “underwater” option or stock appreciation right (i.e., an option or stock appreciation right having an exercise price or base price in excess of the current market value of the underlying stock) for cash or for another award would be considered an indirect repricing and would, therefore, require the prior consent of the Company’s shareholders.
Certain Federal Tax Effects
The following discussion is limited to a summary of the U.S. federal income tax provisions relating to the grant, exercise and vesting of awards under the 2013 Plan and the subsequent sale of common stock acquired under the 2013 Plan. The tax consequences of awards may vary depending upon the particular circumstances, and it should be noted that the income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local, and foreign tax laws.
Nonstatutory Stock Options
There will be no federal income tax consequences to the optionee or to the Company upon the grant of a nonstatutory stock option under the 2013 Plan. When the optionee exercises a nonstatutory option, however, he or she will recognize ordinary income in an amount equal to the excess of the fair market value of the common stock received upon exercise of the option at the time of exercise over the exercise price, and the Company will be allowed a corresponding deduction. Any gain that the optionee realizes when he or she later sells or disposes of the option shares will be short-term or long-term capital gain, depending on how long the shares were held.
Incentive Stock Options
There typically will be no federal income tax consequences to the optionee or to the Company upon the grant or exercise of an incentive stock option. If the optionee holds the option shares for the required holding period of at least two years after the date the option was granted or one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will be long-term capital gain or loss, and the Company will not be entitled to a federal income tax deduction. If the optionee disposes of the option shares in a sale, exchange, or other disqualifying disposition before the required holding period ends, he or she will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time of exercise (or, if less, the amount realized on the disposition of the shares) over the exercise price, and the Company will be allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the option shares at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.
Stock Appreciation Rights
A participant receiving a stock appreciation right will not recognize income, and the Company will not be allowed a tax deduction, at the time the award is granted. When the participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of common stock received will be ordinary income to the participant and the Company will be allowed a corresponding federal income tax deduction at that time.
Restricted Stock
Unless a participant makes an election to accelerate recognition of income to the date of grant as described below, the participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less any amount he or she paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). If the participant files an election under Code Section 83(b) within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.
Stock Units
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Upon receipt of shares of common stock (or the equivalent value in cash) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the common stock or other property as of that date, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).
Cash-Based Awards
A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a cash-based award is granted (for example, when the performance goals are established). Upon receipt of cash in settlement of the award, a participant will recognize ordinary income equal to the cash received, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).
Benefits to Named Executive Officers and Others
Awards under the 2013 Plan are granted at the discretion of the Compensation Committee. Accordingly, future awards under the 2013 Plan are not determinable.
As of the Record Date, 2,415,833 shares of our common stock have been issued under the 2013 Plan (or remain subject to outstanding awards under the 2013 Plan) since its inception in 2013. The table below shows the number of shares issued, or subject to outstanding awards, under the Plan to the named executive officers and the other individuals and groups indicated.
Name | | Aggregate Number of Shares
Subject to Options Granted
under the Plan Since Plan Inception | | | Aggregate Number of
Shares Subject to
Restricted Stock or
Stock Units Granted
under the Plan Since
Plan Inception | | | Dennis S. Hudson, III | | | 217,352 | | | | 192,169 | | | Charles M. Shaffer | | | 85,299 | | | | 88,365 | | | Charles K. Cross, Jr. | | | 86,574 | | | | 93,995 | | | David D. Houdeshell | | | 65,550 | | | | 66,987 | | | Juliette P. Kleffel | | | 23,331 | | | | 30,025 | | | All Current Executive Officers as a Group | | | 478,106 | | | | 471,541 | | | All Non-Employee Directors as a Group | | | 235,508 | | | | 131,963 | | All Employees as a Group
(Excluding Executive Officers)
| | | 341,603 | | | | 757,112 | |
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information about our common stock that may be issued under all of our existing compensation plans as of December 31, 2017.
Equity Compensation Plan Information
| | | | | | | | | Number of securities | | | | | | | | | | | remaining available | | | | | (a) | | | | | | for future issuance | | | | | Number of securities | | | Weighted average | | �� | under equity | | | | | to be issued upon | | | exercise price of | | | compensation plans | | | | | exercise of outstanding | | | outstanding | | | (excluding securities | | | | | options, warrants | | | options, warrants | | | represented | | | Plan Category | | and rights | | | and rights | | | in column (a)) | | | Equity compensation plans approved by shareholders: | | | | | | | | | | | | | | 2000 Plan (1) | | | 0 | | | $ | 0.00 | | | | 0 | | | 2008 Plan (2) | | | 0 | | | | 0.00 | | | | 0 | | | 2013 Plan (3) | | | 951,349 | | | | 17.29 | | | | 598,913 | | | Employee Stock Purchase Plan (4) | | | 0 | | | | 0.00 | | | | 84,659 | | | TOTAL | | | 951,349 | | | $ | 17.29 | | | | 683,572 | |
| (1) | Seacoast Banking Corporation of Florida 2000 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, as well as vesting of performance award shares, and awards of restricted stock or stock-based awards, previously issued. |
| (2) | Seacoast Banking Corporation of Florida 2008 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, as well as vesting of performance award shares, and awards of restricted stock or stock-based awards, previously issued. |
| (3) | Seacoast Banking Corporation of Florida 2013 Long-Term Incentive Plan. Shares reserved under this plan are available for issuance pursuant to the exercise of stock options and stock appreciation rights granted under the plan, and may be granted as awards of restricted stock, performance shares, or other stock-based awards, prospectively. |
| (4) | Seacoast Banking Corporation of Florida Employee Stock Purchase Plan, as amended. |
The Board of Directors unanimously recommends a vote “FOR” Proposal 3.
PROPOSAL 4
2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR The Audit Committee, acting pursuant to authority delegated to it by the Board of Directors, appointed Crowe Horwath LLP, an independent registered certified public accounting firm and the Company’s independent auditor for the fiscal year ending December 31, 2017,2019, to serve as the Company’s independent auditor for the fiscal year ending December 31, 2018.2020. Although it is not required to do so, the Board of Directors is submitting the Audit Committee’s appointment of Crowe Horwath LLP for ratification by the Company’s shareholders in order to ascertain the views of the shareholders regarding such appointment and as a matter of good corporate practice. If the shareholders should not ratify the appointment of Crowe Horwath LLP, the Audit Committee will reconsider the appointment. Representatives of Crowe Horwath LLP will be present at the Annual Meeting and will be given the opportunity to make a statement on behalf of the firm, if they so desire, and will also be available to respond to appropriate questions from shareholders. All shares represented by valid proxies received pursuant to this solicitation and not revoked before they are exercised will be voted in the manner specified therein. If no specification is made, the proxies will be voted for the ratification of the appointment of Crowe Horwath LLP for the fiscal year ending December 31, 2018.2020. 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"“FOR” Proposal 4.2. Relationship with Independent Registered Public Accounting Firm Crowe Horwath LLP’s report on Seacoast’s consolidated financial statements for the fiscal year ended December 31, 20172019 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles. Crowe Horwath LLP’s report on Seacoast’s internal control over financial reporting expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.2019. Crowe Horwath LLP has advised Seacoast that neither the firm nor any of its partners has any direct or material interest in Seacoast and its subsidiaries except as auditors and independent certified public accountants of Seacoast and its subsidiaries. Independent Registered Public Accounting Firm’s Fees The following table shows the fees paid or accrued by the Company for the audit and other services for the fiscal years ended December 31, 20172019 and 2016,2018, including expenses: | | | 2017 | | 2016 | | 2019 | 2018 | | Audit Fees(1) | | $ | 732,907 | | | $ | 548,591 | | $879,000 | $739,643 | | Audit-Related Fees(2) | | $ | 184,500 | | | $ | 53,500 | | $33,100 | $71,250 | | Tax Fees(3) | | $ | 59,200 | | | $ | 12,000 | | $40,000 | $41,500 | | All Other Fees(4) | | $ | 43,465 | | | $ | 10,087 | | $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 20172018 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.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 PROPOSAL 5
ADVISORY (NON-BINDING) VOTE ON COMPENSATION
OF NAMED EXECUTIVE OFFICERS In accordance with the Exchange Act, we are required to include in this Proxy Statementproxy 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 Statementproxy statement pursuant to the compensation rules of the SEC. This Proposal,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.proxy statement. The Proposalproposal 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 20182020 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 20192021 annual meeting of shareholders. This Proposal 53 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”“FOR” Proposal 5.3.
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 fourfive directors, Dennis J. Arczynski, Christopher E. Fogal, (Chair), Dennis J. Arczynski, 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. Each such dealingDirector H. Gilbert Culbreth, Jr. is described below: | · | Director Timothy S. Huval is employed as Chief Human Resources Officer of Humana, Inc., a leading health and well-being company that provides group vision insurance to Seacoast. In 2017, Seacoast paid Humana approximately $73,802 in premiums. We believe Mr. Huval has no material direct or indirect interest in such arrangement. |
| · | Director Herbert A. Lurie is a senior advisor of Guggenheim Securities that provides financial advisory services to Seacoast. In his capacity as senior advisor to the firm, Mr. Lurie may receive customary fees that are based in part on fees paid to Guggenheim Securities, depending on Mr. Lurie’s role in originating and executing the matter. In 2017, Seacoast paid Guggenheim Securities $125,000 for advisory services, and $3.3 million in underwriting fees related to the Company’s capital raise in February 2017. |
the owner of Gilbert Chevrolet and Gilbert Ford automobile dealerships. In 2019, Seacoast paid Gilbert dealerships $64,875 for vehicle purchases. The Audit Committee has approved each of these transactions.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, 2017,2019, was approximately $1,149,107,$661,292, which represented approximately 0.17%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. Certain Family Relationships
Certain members of the Company’s Board of Directors and management are related. Director Dennis S. Hudson, Jr.’s brother, Dale M. Hudson, serves on the Bank’s board of directors. Dennis S. Hudson, III, the Company’s Chairman and Chief Executive Officer, is the son of Dennis S. Hudson, Jr. and the nephew of Dale M. Hudson. As an executive officer, Dennis S. Hudson, III’s compensation is approved by the CGC, which is comprised solely of independent directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of the Company’s common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Directors, executive officers and persons beneficially owning more than 10% of the Company’s common stock are required to furnish the Company with copies of all Section 16(a) reports they file. Based on the Company’s review of such reports and written representations from the reporting persons, the Company believes that, during and with respect to fiscal year 2017, all filing requirements applicable to its directors, executive officers and beneficial owners of more than 10% of its common stock were complied with in a timely manner, except for:
| · | The Form 4 for H. Gilbert Culbreth, Jr. filed with the SEC on February 1, 2017 which reported the acquisition of 414 shares of common stock on January 25, 2017. The Company believes that the Form 4 filed on February 1, 2017 reflects Mr. Culbreth’s current holdings. The Form 4 for H. Gilbert Culbreth, Jr. filed with the SEC on August 2, 2017 which reported the acquisition of 380 shares of common stock on July 14, 2017. |
| · | The Form 4 for Julie H. Daum filed with the SEC on February 1, 2017 which reported the purchase of 300 shares of common stock on January 25, 2017. The Company believes that the Form 4 filed on February 1, 2017 reflects Ms. Daum’s current holdings. The Form 4 for Julie H. Daum filed with the SEC on August 2, 2017 which reported the purchase of 275 shares of common stock on July 14, 2017. |
| · | The Form 4 for Roger O. Goldman filed with the SEC on February 6, 2017 which reported the acquisition of 300 shares of common stock on January 25, 2017. The Company believes that the Form 4 filed on February 6, 2017 reflects Mr. Goldman’s current holdings. The Form 4 for Roger O. Goldman filed with the SEC on August 2, 2017 which reported the acquisition of 275 shares of common stock on July 14, 2017. The Form 5 for Roger O. Goldman filed with the SEC on February 14, 2018 which reported the disposition of 5,500 shares of common stock on November 17, 2017. |
| · | The Form 4 for Herbert A. Lurie filed with the SEC on February 1, 2017 which reported the acquisition of 300 shares of common stock on January 25, 2017. The Company believes that the Form 4 filed on February 1, 2017 reflects Mr. Lurie’s current holdings. The Form 4 for Herbert A. Lurie filed with the SEC on August 2, 2017 which reported the acquisition of 275 shares of common stock on July 14, 2017. |
| · | The Form 3 for Juliette P. Kleffel filed with the SEC on December 29, 2017 which reported Ms. Kleffel’s initial statement of beneficial ownership on December 12, 2017. |
Other Matters Principal Offices The principal executive offices of Seacoast are located at 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995, and its telephone number is (772) 287-4000. Availability of Form 10-K Upon the written request of any person whose proxy is solicited by this Proxy Statement,proxy statement, Seacoast will furnish to such person without charge (other than for exhibits) a copy of Seacoast’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2019, 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 20192021 Shareholder Proposals for Inclusion in 20192021 Proxy Statement To be considered for inclusion in the Company’s proxy statement and proxy card for the 20192021 Annual Meeting of Shareholders, a shareholder proposal must be received at the Company’s principal executive offices no later than December 7, 2018,2020, which is 120 calendar days before the one-year anniversary of the date on which the Company first mailed this Proxy Statement.proxy statement. Shareholder Proposals for Presentation at 20192021 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 20192021 Annual Meeting of Shareholders, you must give timely written notice of the proposal to the Company’s Secretary pursuant to the Company’s advance notice provisions. To be timely, the notice (including a notice recommending a director candidate) must be delivered to the Company’s principal executive offices no fewer than 60 nor more than 90 days before the one-year anniversary of the date of the Annual Meeting. To be timely, the written notice (including a notice recommending a director candidate) must be received no earlier than February 25, 201926, 2021 and no later than March 25, 2019.28, 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 | Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock | FOR | 3 | Amend the Company’s 2013 Incentive Plan | FOR | 4 | Ratification of Auditor | FOR | 53 | Advisory Vote on Executive Compensation | FOR |
If any other matters are properly presented at the Annual Meeting for action, the persons named and acting as proxy will have the discretion to vote for you on these matters in accordance with their best judgment. We do not currently expect that any other matters will be properly presented for action at the Annual Meeting. Each share of common stock is entitled to one vote on each matter properly brought before the meeting. Record Date You may vote all common shares that you owned as of the close of business on March 26, 2018,30, 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.trustee. Shares held in your plan account will be combined and voted at the Annual Meeting in the same manner in which you voted those shares registered in your own name either by proxy or in person. If you are a participant in Seacoast’s Retirement Savings Plan or Employee Stock Purchase Plan, your voting instructions must be received by May 17, 201820, 2020 (the “cut-off date”) to allow sufficient time for the trustees to vote. WhenIf 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.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 shares “street name”), then you received the notice of the Annual Meeting or proxy materials from the record holder. You have the right to direct your broker or nominee how to vote your shares, and such broker or other nominee is required to vote the shares in accordance with your instructions. Your broker or nominee should have given you instructions on how to vote your shares. It will then be the record holder’s responsibility to vote your shares in the manner you direct. Generally, brokers and other record holders may vote on discretionary or routine matters, but cannot vote on non-routine or non-discretionary matters unless they have received voting instructions from street namethe 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. Effect of Not Casting Your Vote
Under the rules of various securities exchanges, brokers and other record holders may generally vote on discretionary or routine matters, but cannot vote on non-routine or non-discretionary matters, such as the election of directors, unless they have received voting instructions from the person for whom they are holding shares. Proposals 1, 2, 3 and 5 are considered non-routine matters, and cannot be voted on by your broker without your instructions. We therefore encourage you to provide directions to your broker as to how you want your shares voted on all matters to be voted on at the meeting.
Revocation of Proxies If your shares of common stock are registered directly in your name, you may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this by: | ·● | timely submitting another proxy via the telephone or internet; |
| ·● | delivering to Seacoast a written notice bearing a date later than the date of the proxy card, stating that you revoke the proxy, with such written notice to be sent to: 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995, Attention: Corporate Secretary; |
| ·● | signing and delivering to Seacoast a proxy card relating to the same shares and bearing a later date; or |
| ·● | attending the meeting and voting in person by written ballot, although attendance at the meeting will not, by itself, revoke a proxy. |
Also, please note that if you have voted through your broker, bank or other nominee and you wish to change your vote, you must follow the instructions received from such entity to change your vote. Quorum and Required Vote To hold a vote on any proposal, a quorum must be present in person or by proxy at the Annual Meeting. A quorum is a majority of the total votes entitled to be cast by the holders of the outstanding shares of common stock as of the close of business on the record date.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 46,982,39952,706,857 shares of common stock issued, outstanding and entitled to be voted, which were held by approximately 2,2332,292 holders of record. Therefore, at least 23,491,20026,353,429 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 20182020 Annual Meeting, the following votes are required: | Proposal | Vote Required | Do abstentions and
broker non-votes count
count as votes cast? | Is broker discretionary
voting allowed? | | 1 | Election of Directors | Plurality vote(1) | No | No | | 2 | Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock | Affirmative vote of a majority of votes cast | No | No | 3 | Amend the Company’s 2013 Incentive Plan | Affirmative vote of a majority of votes cast | No | No | 4 | Ratification of Auditor | Affirmative vote of a majority of votes cast | No | Yes | 53 | Advisory (Non-binding) Vote on Executive Compensation | Affirmative vote of a majority of votes cast | No | No |
| (1) | Under our Bylaws, all elections of directors are decided by plurality vote. However, notwithstanding the plurality standard, in an uncontested election for directors, which is the case for the election under Proposal 1, our Corporate Governance Guidelines provide that if any director nominee receives a greater number of votes “withheld” from his or her election than votes “for” such election, then the director will promptly tender his or her resignation to the Board following certification of the shareholder vote, with such resignation to be effective upon acceptance by the Board of Directors. The CGC would then review and make a recommendation to the Board of Directors as to whether the Board should accept the resignation, and the Board would ultimately decide whether to accept or reject the resignation. The Company will disclose its decision-making process regarding the resignation in a Form 8-K furnished to the SEC. In contested elections, the required vote would be a plurality of votes cast and the resignation policy would not apply. Full details of this policy are set forth in our Corporate Governance Guidelines, available on our website at www.SeacoastBanking.com. |
Cumulative voting is not permitted. Abstentions and broker non-votes, if any, will not be counted for purposes of determining whether any of the proposals have received sufficient votes for approval, but will count for purposes of determining whether or not a quorum is present. So long as a quorum is present, abstentions and broker non-votes will have no effect on any of the matters presented for a vote at the Annual Meeting. Multiple Shareholders Sharing the Same Address The SEC permits delivery of one copy of the proxy materials to shareholders who have the same address and last name under a procedure referred to as “householding”. We do not utilize householding for our shareholders of record. However, if you hold your shares through a broker, bank or other nominee, you may receive only one copy of the notice and, as applicable, any additional proxy materials that are delivered. If you receive a single set of proxy materials as a result of householding, and you would like to have separate copies of proxy materials mailed to you in the future, please contact your broker, bank or other nominee. However, if you want to receive a paper proxy or notice or other proxy materials for purposes of this year’s Annual Meeting, follow the instructions included in the notice that was sent to you. * * * * You can find the directions to our Annual Meeting on the inside back coverfollowing 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. | |   | | | Dennis S. Hudson, III | | | Chairman & Chief Executive Officer |
April 6, 201810, 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 letterproxy 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 | | | | | Fourth | | | Third | | | Second | | | First | | | Fourth | | | (Dollars in thousands except per share data) | | 2017 | | | 2017 | | | 2017 | | | 2017 | | | 2016 | | | | | | | | | | | | | | | | | | | | Net income | | $ | 13,047 | | | $ | 14,216 | | | $ | 7,676 | | | $ | 7,926 | | | $ | 10,771 | | | | | | | | | | | | | | | | | | | | | | | | | BOLI income (benefits upon death) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | Gain on Sale of Visa Class B Shares | | | (15,153 | ) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | Security (gains) / losses | | | (112 | ) | | | 47 | | | | (21 | ) | | | 0 | | | | (7 | ) | | Total Adjustments to Revenue | | | (15,265 | ) | | | 47 | | | | (21 | ) | | | 0 | | | | (7 | ) | | | | | | | | | | | | | | | | | | | | | | | | Merger related charges | | | 6,817 | | | | 491 | | | | 5,081 | | | | 533 | | | | 561 | | | Amortization of intangibles | | | 963 | | | | 839 | | | | 839 | | | | 719 | | | | 719 | | | Business continuity expenses - Hurricane Irma | | | 0 | | | | 352 | | | | 0 | | | | 0 | | | | 0 | | | Branch reductions and other expense initiatives | | | 0 | | | | (127 | ) | | | 1,876 | | | | 2,572 | | | | 163 | | | Early redemption cost for FHLB advances | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | Total Adjustments to Noninterest Expense | | | 7,780 | | | | 1,555 | | | | 7,796 | | | | 3,824 | | | | 1,443 | | | | | | | | | | | | | | | | | | | | | | | | | Effective tax rate on adjustments | | | 3,147 | | | | (673 | ) | | | (2,786 | ) | | | (1,480 | ) | | | (404 | ) | | Effect of change in corporate tax rate | | | 8,552 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | Adjusted Net Income | | $ | 17,261 | | | $ | 15,145 | | | $ | 12,665 | | | $ | 10,270 | | | $ | 11,803 | | | Earnings per diluted share, as reported | | | 0.28 | | | | 0.32 | | | | 0.18 | | | | 0.20 | | | | 0.28 | | | Adjusted Earnings per Diluted Share | | | 0.37 | | | | 0.35 | | | | 0.29 | | | | 0.26 | | | | 0.31 | | | Average shares outstanding (000) | | | 46,673 | | | | 43,792 | | | | 43,556 | | | | 39,499 | | | | 38,252 | | | | | | | | | | | | | | | | | | | | | | | | | Revenue | | $ | 74,868 | | | $ | 57,183 | | | $ | 54,644 | | | $ | 48,070 | | | $ | 47,354 | | | Total Adjustments to Revenue | | | (15,265 | ) | | | 47 | | | | (21 | ) | | | 0 | | | | (7 | ) | | Adjusted Revenue | | | 59,603 | | | | 57,230 | | | | 54,623 | | | | 48,070 | | | | 47,347 | | | | | | | | | | | | | | | | | | | | | | | | | Noninterest Expense | | | 39,184 | | | | 34,361 | | | | 41,625 | | | | 34,746 | | | | 30,297 | | | Total Adjustments to Noninterest Expense | | | 7,780 | | | | 1,555 | | | | 7,796 | | | | 3,824 | | | | 1,443 | | | Adjusted Noninterest Expense | | | 31,404 | | | | 32,806 | | | | 33,829 | | | | 30,922 | | | | 28,854 | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted Noninterest Expense | | | 31,404 | | | | 32,806 | | | | 33,829 | | | | 30,922 | | | | 28,854 | | | Foreclosed property expense and net (gain)/loss on sale | | | (7 | ) | | | (298 | ) | | | 297 | | | | (293 | ) | | | (78 | ) | | Net Adjusted Noninterest Expense | | | 31,411 | | | | 33,104 | | | | 33,532 | | | | 31,215 | | | | 28,932 | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted Revenue | | | 59,603 | | | | 57,230 | | | | 54,623 | | | | 48,070 | | | | 47,347 | | | Impact of FTE adjustment | | | 174 | | | | 154 | | | | 164 | | | | 211 | | | | 204 | | | Adjusted Revenue on a fully taxable equivalent basis | | | 59,777 | | | | 57,384 | | | | 54,787 | | | | 48,281 | | | | 47,551 | | | Adjusted Efficiency Ratio | | | 52.6 | % | | | 57.7 | % | | | 61.2 | % | | | 64.7 | % | | | 60.8 | % | | | | | | | | | | | | | | | | | | | | | | | | Average Assets | | $ | 5,716,230 | | | $ | 5,316,119 | | | $ | 5,082,002 | | | $ | 4,699,745 | | | $ | 4,572,188 | | | Less average goodwill and intangible assets | | | (149,432 | ) | | | (118,364 | ) | | | (114,563 | ) | | | (78,878 | ) | | | (79,620 | ) | | Average Tangible Assets | | | 5,566,798 | | | | 5,197,755 | | | | 4,967,439 | | | | 4,620,867 | | | | 4,492,568 | | | | | | | | | | | | | | | | | | | | | | | | | Return on Average Assets (ROA) | | | 0.91 | % | | | 1.06 | % | | | 0.61 | % | | | 0.68 | % | | | 0.94 | % | | Impact of removing average intangible assets and related amortization | | | 0.06 | | | | 0.06 | | | | 0.05 | | | | 0.06 | | | | 0.06 | | | Return on Tangible Average Assets (ROTA) | | | 0.97 | | | | 1.12 | | | | 0.66 | | | | 0.74 | | | | 1.00 | | | Impact of other adjustments for Adjusted Net Income | | | 0.26 | | | | 0.04 | | | | 0.36 | | | | 0.16 | | | | 0.05 | | | Adjusted Return on Average Tangible Assets | | | 1.23 | | | | 1.16 | | | | 1.02 | | | | 0.90 | | | | 1.05 | | | | | | | | | | | | | | | | | | | | | | | | | Average Shareholders' Equity | | $ | 657,100 | | | $ | 587,919 | | | $ | 567,448 | | | $ | 466,847 | | | $ | 437,077 | | | Less average goodwill and intangible assets | | | (149,432 | ) | | | (118,364 | ) | | | (114,563 | ) | | | (78,878 | ) | | | (79,620 | ) | | Average Tangible Equity | | | 507,668 | | | | 469,555 | | | | 452,885 | | | | 387,969 | | | | 357,457 | | | | | | | | | | | | | | | | | | | | | | | | | Return on Average Shareholders' Equity | | | 7.9 | % | | | 9.6 | % | | | 5.4 | % | | | 6.9 | % | | | 9.8 | % | | Impact of removing average intangible assets and related amortization | | | 2.8 | | | | 2.9 | | | | 1.9 | | | | 1.9 | | | | 2.7 | | | Return on Average Tangible Common Equity (ROTCE) | | | 10.7 | | | | 12.5 | | | | 7.3 | | | | 8.8 | | | | 12.5 | | | Impact of other adjustments for Adjusted Net Income | | | 2.8 | | | | 0.3 | | | | 3.9 | | | | 1.9 | | | | 0.6 | | Adjusted Return on Average Tangible Common Equity | | | 13.5 | | | | 12.8 | | | | 11.2 | | | | 10.7 | | | | 13.1 | |
| | | YTD | | | | | December 31, | | | December 31, | | | (Dollars in thousands except per share data) | | 2017 | | | 2016 | | | | | | | | | | | | | | | | | | | Net income | | $ | 42,865 | | | $ | 29,202 | | | | | | | | | | | | | BOLI income (benefits upon death) | | | 0 | | | | (464 | ) | | Gain on Sale of Visa Class B Shares | | | (15,153 | ) | | | 0 | | | Security (gains) / losses | | | (86 | ) | | | (368 | ) | | Total Adjustments to Revenue | | | (15,239 | ) | | | (832 | ) | | | | | | | | | | | | Merger related charges | | | 12,922 | | | | 9,028 | | | Amortization of intangibles | | | 3,360 | | | | 2,486 | | | Business continuity expenses - Hurricane Irma | | | 352 | | | | 0 | | | Branch reductions and other expense initiatives | | | 4,321 | | | | 3,357 | | | Early redemption cost for FHLB advances | | | 0 | | | | 1,777 | | | Total Adjustments to Noninterest Expense | | | 20,955 | | | | 16,648 | | | | | | | | | | | | | Effective tax rate on adjustments | | | (1,792 | ) | | | (5,949 | ) | | Effect of change in corporate tax rate | | | 8,552 | | | | 0 | | | Adjusted Net Income | | $ | 55,341 | | | $ | 39,069 | | | Earnings per diluted share, as reported | | | 0.99 | | | | 0.78 | | | Adjusted Earnings per Diluted Share | | | 1.28 | | | | 1.04 | | | Average shares outstanding (000) | | | 43,350 | | | | 37,508 | | | | | | | | | | | | | Revenue | | $ | 234,765 | | | $ | 177,383 | | | Total Adjustments to Revenue | | | (15,239 | ) | | | (832 | ) | | Adjusted Revenue | | | 219,526 | | | | 176,551 | | | | | | | | | | | | | Noninterest Expense | | | 149,916 | | | | 130,881 | | | Total Adjustments to Noninterest Expense | | | 20,955 | | | | 16,648 | | | Adjusted Noninterest Expense | | | 128,961 | | | | 114,233 | | | | | | | | | | | | | Adjusted Noninterest Expense | | | 128,961 | | | | 114,233 | | | Foreclosed property expense and net (gain)/loss on sale | | | (301 | ) | | | 43 | | | Net Adjusted Noninterest Expense | | | 129,262 | | | | 114,190 | | | | | | | | | | | | | Adjusted Revenue | | | 219,526 | | | | 176,551 | | | Impact of FTE adjustment | | | 703 | | | | 204 | | | Adjusted Revenue on a fully taxable equivalent basis | | | 220,229 | | | | 176,755 | | | Adjusted Efficiency Ratio | | | 58.7 | % | | | 64.6 | % | | | | | | | | | | | | Average Assets | | $ | 5,206,617 | | | $ | 4,201,819 | | | Less average goodwill and intangible assets | | | (115,511 | ) | | | (66,608 | ) | | Average Tangible Assets | | | 5,091,106 | | | | 4,135,211 | | | | | | | | | | | | | Return on Average Assets (ROA) | | | 0.82 | % | | | 0.69 | % | | Impact of removing average intangible assets and related amortization | | | 0.06 | | | | 0.05 | | | Return on Tangible Average Assets (ROTA) | | | 0.88 | | | | 0.74 | | | Impact of other adjustments for Adjusted Net Income | | | 0.21 | | | | 0.20 | | | Adjusted Return on Average Tangible Assets | | | 1.09 | | | | 0.94 | | | | | | | | | | | | | Average Shareholders' Equity | | $ | 570,399 | | | $ | 406,084 | | | Less average goodwill and intangible assets | | | (115,511 | ) | | | (66,608 | ) | | Average Tangible Equity | | | 454,888 | | | | 339,476 | | | | | | | | | | | | | Return on Average Shareholders' Equity | | | 7.5 | % | | | 7.2 | % | | Impact of removing average intangible assets and related amortization | | | 2.4 | | | | 1.9 | | | Return on Average Tangible Common Equity (ROTCE) | | | 9.9 | | | | 9.1 | | | Impact of other adjustments for Adjusted Net Income | | | 2.3 | | | | 2.4 | | | Adjusted Return on Average Tangible Common Equity | | | 12.2 | | | | 11.5 | |
APPENDIX B
ARTICLES OF AMENDMENT
TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
Seacoast Banking Corporation of Florida
Seacoast Banking Corporation of Florida, a corporation organized and existing under the laws of the State of Florida (the “Corporation”), in accordance with the provisions of Section 607.1006 of the Florida Business Corporation Act (the “FBCA”), hereby certifies as follows:
I.
The name of the Corporation is Seacoast Banking Corporation of Florida.
II.
After the filing and effectiveness pursuant to the FBCA of these Articles of Amendment to the Amended and Restated Articles of Incorporation of the Corporation, at [●] on [●], 2018 (the “Effective Time”), the authorized number of shares of common stock of the Corporation is increased to 120,000,000 shares. Section 4.01 of the Corporation’s Amended and Restated Articles of Incorporation is hereby amended to read in its entirety as follows:
4.01 General. The total number of shares of all classes of capital stock (“Shares”) which the Corporation shall have the authority to issue is 124,000,000 consisting of the following classes:
(1) 120,000,000 Shares of common stock, $0.10 par value per share (“Common Stock”); and
(2) 4,000,000 Shares of preferred stock, $0.10 par value per share (“Preferred Stock”).”
III.
The only voting group entitled to vote on the amendments contained in these Articles of Amendment was the holders of shares of the Corporation’s Common Stock. These Articles of Amendment were duly adopted by such shareholders on May 24, 2018, at the Corporation’s annual meeting of shareholders. The number of votes cast for the amendment above by the shareholders was sufficient for their approval.
IN WITNESS WHEREOF, Seacoast Banking Corporation of Florida has caused these Articles of Amendment to be signed by Dennis S. Hudson, III, its Chairman and Chief Executive Officer, this ___ day of ________, 2018.
| | Seacoast Banking Corporation of Florida | | | | By: | | | | Name: Dennis S. Hudson, III | | | Title: Chairman and Chief Executive Officer |
LOCATION OF THE 2018 ANNUAL MEETING OF SHAREHOLDERS
Our 2018 Annual Meeting will be held at the Hutchinson Shores Resort:
3793 NE Ocean Blvd, Jensen Beach, FL 34957
Directions Taking Florida’s Turnpike
| · | Exit 142 at Port St. Lucie | | | |
| · | Turn right onto Port St. Lucie Boulevard from the exit ramp. | | | |
| · | Turn right at US Highway 1 | | | |
| · | Turn left onto Jensen Beach Boulevard | | | |
| · | Turn left at NE Indian River Drive | | | |
| · | Merge onto Causeway Boulevard from the first exit at the rotary | | | |
| · | Merge right on Highway A1A / NE Ocean Boulevard | | | |
| · | Hutchinson Shores Resort will be on the left hand side | | | |
| · | Visitor’s parking is on the left side of the property |
Directions Taking Interstate 95
| · | Exit I-95 at SR 76 Kanner Hwy. (Exit 101) | | | |
| · | If traveling northbound on I-95 turn right onto Kanner Hwy from the exit ramp. | | | |
| · | If traveling southbound on I-95 turn left onto Kanner Hwy from the exit ramp. | | | |
| · | Merge right onto NE Ocean Boulevard / Highway A1A from the first exit at the rotary. | | | |
| · | Hutchinson Shores Resort will be on the right hand side | | | |
| · | Visitor’s parking is on the left side of the property |
Arriving by Car Service or Taxi:
| | | | 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 |
If arriving by a car service, please direct drop off at the front entrance lobby.
 
SeacoastBank.com | 800 706 9991 
*** Exercise YourRight to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Shareholder
2020 Annual Meeting of Shareholders to Be Held on May 24, 2018. 815 COLORADO AVENUE P.O. BOX 9012 STUART, FL 34995-9012 ATTN: KATHY HSU Meeting Information Meeting Type: Annual Meeting of Shareholders Record Date: March 26, 2018 Meeting Date: May 24, 2018 Time: 3:00 PM EDT Location: Hutchinson Shores Resort 3793 NE Ocean Blvd. Jensen Beach, Florida 34957 You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. See the reverse side of this notice to obtain proxy materials and voting instructions. E42083-P0518427, 2020. | | | | | | | Meeting Information | | | Meeting Type: Annual Meeting of Shareholders Record Date: March 30, 2020 | | | | Meeting Date: May 27, 2020 Time: 10:00 AM EDT | | | Location: | Hutchinson Shores Resort
3793 NE Ocean Blvd.
Jensen Beach, Florida 34957
| | | |
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 atwww.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 
Before You Vote How to Access the Proxy Materials Proxy Materials Available to VIEW or RECEIVE: 1. Notice & Proxy Statement 2. 2017 Annual Report on Form 10-K 3. Chairman's Letter How to View Online: Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) and visit: www.proxyvote.com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET: www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*: sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before May 10, 2018 to facilitate timely delivery. How To Vote
| | | | | | | | | | Proxy Materials Available to VIEW or RECEIVE: | | | | | | | | 1. Notice & Proxy Statement 2. 2019 Annual Report on Form 10-K | | | | | | | | 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. | | | | | | How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: | | | | 1) | BY INTERNET: | www.proxyvote.com | | | | 2) | BY TELEPHONE: | 1-800-579-1639 | | | | 3) | BY E-MAIL*: | sendmaterial@proxyvote.com | | | | | | * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow(located on the following page) in the subject line. | | | | | | Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before May 13, 2020 to facilitate timely delivery. | |
Please Choose One of the Following Voting Methods Vote In Person: Please check the proxy materials for any special requirements for voting in person at the meeting. We recommend you vote in advance even if you plan to attend the meeting. You can vote in person at the meeting even if you previously voted and such in-person vote will replace your prior vote. Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. E42084-P05184 | | | | 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. | | | | | | Vote By Internet: To vote now by Internet, go towww.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. | | | | | | Vote By Mail: You can vote by mail by requesting a paper copy of the proxy materials, which will include a proxy card. | | | | |
D04389-P36716 | | | | | The Board of Directors recommends a voteFOR ALL
director nominees andFOR Proposals 2 and 3. | | | | | | 1. | ELECT DIRECTORS | | | | |
| 01) | Julie H. Daum | | | | 02) | Dennis S. Hudson, III | | | | 03) | Alvaro J. Monserrat | | |
| | | | 2. | Ratification of Appointment of Crowe LLP as Independent Auditor for 2020 | | | | | 3. | Advisory (Non-binding) Vote on Compensation of Named Executive Officers | | | | In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. | | | | |
D04390-P36716 D04391-P36716
815 COLORADO AVENUE
P.O. BOX 9012
STUART, FL 34995-9012
ATTN: KATHY HSU
| VOTE BY INTERNET -www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by Seacoast in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | | | | | | | | | | | | | | | | | | |
| | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | | | D04343-P36716 | KEEP THIS PORTION FOR YOUR RECORDS | | DETACH AND RETURN THIS PORTION ONLY | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
| | | | | | | | | | | | | | | | | | | | SEACOAST BANKING CORPORATION OF FLORIDA | | | For | Withhold | For All | | 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. | | | | | | | | | The Board of Directors recommends a voteFOR ALLdirector nominees andFOR Proposals 2 and 3. | All | All | Except | | | | | | | | | | | | | | | | ☐ | ☐ | ☐ | | | | | | | | | | | 1. | Elect Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 01) | Julie H. Daum | | | | | | | | | | | | | | | 02) | Dennis S. Hudson, III | | | | | | | | | | | | | | | 03) | Alvaro J. Monserrat | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For | Against | Abstain | | | | | | | | | | | | | | | | | | | | | | | 2. | Ratification of Appointment of Crowe LLP as Independent Auditor for 2020 | | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | 3. | Advisory (Non-binding) Vote on Compensation of Named Executive Officers | | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee, custodian or guardian, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | | | Signature (Joint Owners) | Date | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Voting Items The Board of Directors recommends a vote FOR ALL director nominees and FOR Proposals 2, 3, 4 and 5. 1. Elect Directors 01) Jacqueline L. Bradley 02) H. Gilbert Culbreth, Jr. 03) Christopher E. Fogal 04) Timothy S. Huval 05) Herbert A. Lurie 2. Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock 3. Amend the 2013 Incentive Plan to Increase Authorized Shares 4. Ratification of Appointment of Independent Auditor 5. Advisory (Non-binding) Vote on Executive Compensation In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. E42085-P05184
E42086-P05184
815 COLORADO AVENUE P.O. BOX 9012 STUART, FL 34995-9012 ATTN: KATHY HSU VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Seacoast in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E42075-P05184 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY SEACOAST BANKING CORPORATION OF FLORIDA For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark "For All Except" and write the The Board of Directors recommends a vote FOR number(s) of the nominee(s) on the line below. ALL director nominees and FOR Proposals 2, 3, 4 and 5. 1. Elect Directors 01) Jacqueline L. Bradley 02) H. Gilbert Culbreth, Jr 03) Christopher E. Fogal 04) Timothy S. Huval For Against Abstain 05) Herbert A. Lurie 2. Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock 3. Amend the 2013 Incentive Plan to Increase Authorized Shares 4. Ratification of Appointment of Independent Auditor 5. Advisory (Non-binding) Vote on Executive Compensation In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. Please sign exactly as your name(s) appear(s) hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee, custodian or guardian, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice & Proxy Statement and our 20172019 Annual Report on Form 10-K and the Chairman's Letter are
available at www.proxyvote.com. E42076-P05184 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEACOAST BANKING CORPORATION OF FLORIDA FOR THE 2018 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD THURSDAY, MAY 24, 2018 at 3:00 P.M. FOR REGISTERED SHAREHOLDERS: The undersigned shareholder(s) hereby appoint(s) Tracey Dexter and John R. Turgeon, or either of them, each with full power of substitution, as Proxies, and hereby authorize(s) them to represent and to vote all shares of the Common Stock of Seacoast Banking Corporation of Florida (“Seacoast”) that the undersigned may be entitled to vote at the Annual Meeting of Shareholders to be held at Hutchinson Shores Resort, 3793 NE Ocean Blvd., Jensen Beach, Florida, on Thursday, May 24, 2018, at 3:00 P.M., local time, and at any adjournments or postponements thereof (the “Annual Meeting”), as designated on the reverse side of this ballot, upon the proposals described in the Proxy Statement and the Notice of Annual Meeting of Shareholders, both dated April 6, 2018. FOR PARTICIPANTS IN SEACOAST’S EMPLOYEE BENEFIT PLANS: This form provides voting instructions to the trustees for the shares of the Common Stock of Seacoast Banking Corporation of Florida (“Seacoast”) held in Seacoast’s Employee Stock Purchase Plan and Retirement Savings Plan (collectively and individually, the “Employee Plans”). Please complete this form, sign your name exactly as it appears on the reverse side and return it in the enclosed envelope. To allow sufficient time for the trustees to tabulate and vote the plan shares, we must receive your voting instructions no later than 11:59 p.m. on May 18, 2018 (the “cut-off date”) to be counted. As a participant in one or both of the Employee Plans, the undersigned authorizes One America as Trustee of the Retirement Savings Plan for Employees of Seacoast National Bank and/or authorizes Seacoast National Bank as Trustee of Seacoast’s Employee Stock Purchase Plan to vote all shares of the Common Stock in Seacoast allocated to the undersigned’s account under such plan(s) at Seacoast’s Annual Meeting of Shareholders to be held at Hutchinson Shores Resort, 3793 NE Ocean Blvd., Jensen Beach, Florida, on Thursday, May 24, 2018, at 3:00 P.M., local time, and at any adjournments or postponements thereof (the “Annual Meeting”), as directed below, upon the proposals described in the Proxy Statement and the Notice of Annual Meeting of Shareholders, both dated April 6, 2018. When this form is properly executed and received by the cut-off date, the shares in the Employee Plans will be voted as directed by you. Shares held in the Employee Stock Purchase Plan will not be voted if you do not give voting instructions on such shares. If you do not give voting instructions for the shares allocated to your account in the Retirement Savings Plan, the Trustee may vote or not vote, in its sole discretion, the shares of stock equivalents in your account. When this proxy is properly executed, all shares will be voted in the manner directed herein. If no direction is specified, this proxy will be voted in accordance with the recommendations of the Board of Directors. (Continued, and to be marked, dated and signed, on the other side) | | | |  | 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. | | | 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. | | | When this proxy is properly executed, all shares will be voted in the manner directed herein. If no direction is specified, this proxy will be voted in accordance with the recommendations of the Board of Directors. | | | (Continued, and to be marked, dated and signed, on the other side) | |
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