UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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SEACOAST BANKING CORPORATION OF FLORIDA
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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Proxy Statement
2021
Proxy Statement
2018
  | 815 Colorado Avenue Stuart, Florida 34994 |
NOTICE OF 20182021 ANNUAL MEETING OF SHAREHOLDERS
Thursday,Wednesday, May 24, 201826, 2021
3:10:00 p.m.a.m. Eastern Time
Seacoast Banking Corporation of Florida (“Seacoast”, or the “Company”) will, intends to hold its 20182021 Annual Meeting of Shareholders (the “Annual Meeting”) at the Hutchinson Shores Resort, 3793 NE Ocean Blvd, Jensen Beach, FL 34957, on Thursday,Wednesday, May 24, 201826, 2021 at 3:10:00 p.m.a.m. Eastern Time. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials have and may continue to issue in light of the ongoing coronavirus (COVID-19) pandemic. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website www.proxyvote.com, and we encourage you to check this website prior to the meeting if you plan to attend.
ITEMS OF BUSINESS
The purpose of the Annual Meeting is to vote on the following proposals:
| 1. | Election of Directors.To re-elect | |
| 2. |
| 3. | Amendment of Employee Stock Purchase Plan. To approve | |
| 4. | ||
| Advisory (Non-binding) Vote to Approve Compensation of Named Executive Officers. To hold |
| 5. | Ratification of Appointment of Independent Auditor. To ratify the appointment of Crowe LLP as independent auditors for Seacoast for the fiscal year ending December 31, 2021 (“Proposal 5”); and | |
| 6. | Other Business. To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
RECORD DATE
You are eligible to vote if you were a shareholder of record on the close of business on March 26, 2018,29, 2021, which is the record date for the Annual Meeting. This Notice of the 20182021 Annual Meeting of Shareholders and the accompanying proxy statement are sent by order of the Company’s Board of Directors.
YOUR VOTE IS IMPORTANT
Please review the voting instructions described in this proxy statement, as well as in the notice you received in the mail or by e-mail. By voting prior to the Annual Meeting, you will help ensure that we have a quorum and that your preferences will be expressed on the matters that are being considered.
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| Dennis S. Hudson, III | |
| April 9, 2021 |
April 6, 2018
Table
SHAREHOLDER LETTER
To our fellow shareholders, customers, partners and friends:
Seacoast delivered record net revenue and strong financial performance in 2020. While 2020 was an incredibly challenging year, it also showcased the benefits of Contentsour balanced growth strategy and the relentless commitment of our dedicated associates. We successfully and carefully adjusted our operations in response to the coronavirus pandemic to protect the health of our associates and customers and were incredibly proud to help our business customers access the federal Paycheck Protection Program. We continue to generate disciplined growth while maintaining our strict underwriting guidelines and delivering continued improvements in operating leverage. Our customers have demonstrated resilience during this extraordinary time, as reflected in our strong credit metrics.
In 2020, the Company produced net revenue of $324.3 million, an increase of 8 percent from 2019, and achieved $77.8 million in net income, down 21 percent from the prior year, primarily the result of recording an elevated provision for anticipated loan losses at the outset of the pandemic and in connection with the adoption of new accounting rules. Adjusted net revenue1 in 2020 was $323.1 million, an increase of 8 percent from 2019, and adjusted net income1 was $89.0 million, down 15 percent from the prior year. We achieved $1.44 in diluted earnings per share, 24 percent lower than 2019, and $1.65 in adjusted earnings per share1, a decrease of 18 percent from 2019 returns. In 2020, we increased tangible book value per share to $16.16 from $14.76, an improvement of 9 percent, which we believe is a key indicator of improved shareholder value despite operating in a pandemic environment.
Other 2020 highlights include:
| �� | Loans totaled $5.7 billion at December 31, 2020, an increase of $500 million, or 10 percent, from December 31, 2019, primarily the result of our participation in the Paycheck Protection Program. Seacoast acquired loans of $147 million through the First Bank of the Palm Beaches acquisition and $303 million through the Freedom Bank acquisition, in addition to record originations of $2.1 billion, reflecting the execution of the Company’s disciplined approach to lending. |
| · | Assets at year end totaled $8.3 billion, up from $7.1 billion at the end of 2019, reflecting the impact of our two acquisitions which continued our expansion across Florida’s most attractive MSAs. |
| · | Total deposits were $6.9 billion as of December 31, 2020, an increase of $1.3 billion, or 24 percent, from the prior year. Interest bearing deposits increased year-over-year by $1.0 billion, or 36 percent, to $3.8 billion. Noninterest bearing demand deposits increased 44 percent to $2.3 billion, while certificates of deposit decreased 30 percent to $831 million. |
| · | Seacoast’s successful combination of organic growth with value-creating acquisitions continued to benefit shareholders and associates in 2020 with the acquisitions of First Bank of Palm Beaches and Freedom Bank. Both acquisitions added experienced bankers while expanding our presence in attractive growth markets, further supporting sustainable, profitable growth. |
| · | For the third consecutive year, Seacoast has been recognized as one of Fortune Magazine’s 100 Fastest-Growing Companies. As the only financial institution headquartered in Florida to earn a spot on the prestigious list, this distinction is a direct reflection of the remarkable job the Seacoast team has done serving customers, implementing technological improvements, and executing our balanced growth strategy. |
| · | Seacoast was also named one of the Best Banks to Work For in 2020 by American Banker. This program identifies, recognizes and honors U.S. banks for outstanding employee satisfaction and engagement. |
As we reflect on the year, we are incredibly proud of what the team accomplished and reminded of the many times our team has risen to the challenges of the day, and our organization has become stronger and more resilient as a result.
While the outlook for the pandemic remains uncertain, our goal remains to continue increasing market share in a disciplined manner by cultivating value-creating relationships, improving digital customer experiences, and driving greater productivity across the franchise by delivering products and services to our markets more efficiently and effectively than our competition.
We appreciate your continued support and loyalty.
Sincerely,
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| Dennis S. Hudson, III | Charles M. Shaffer |
| Executive Chairman | President and Chief Executive Officer |
1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
TABLE OF CONTENTS
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Annual Meeting InformationHow to Cast Your Vote
Date, TimeYou may vote if you were a shareholder of record as of the close of business on March 29, 2021.
 | ONLINE: www.proxyvote.com |  | MAIL: Complete, sign, date and return your proxy | |
 | PHONE: Call the number on your proxy card or voting instruction form. |  | IN PERSON: Vote by ballot in person at the Annual Meeting. |
For telephone and Place: Thursday, May 24, 2018, at 3:00internet voting, you will need the 16-digit control number included in your notice, proxy card or voting instructions that accompanied your proxy materials. For shares held in employee plans, we must receive your voting instructions no later than 11:59 P.M. Eastern Time at the Hutchinson Shores Resort, 3793 NE Ocean Blvd., Jensen Beach, FL 34957. The Annual Meeting shallon May 23, 2021 (the “cut-off date”) to be referred to herein as the “Meeting” or the “Annual Meeting”.counted. Otherwise, you may vote up until 11:59 P.M. Eastern Time on May 25, 2021.
Street Name Holders:If your shares of Seacoast common stock are held in a bank, brokerage or other institutional account (which is commonly referred to as holding shares in “street name”), you are a beneficial owner of these shares, but you are not the record holder. If your shares are held in street name, you are invited to attend the Annual Meeting; however, to vote your shares in person at the meeting, you must request and obtain a power of attorney or other authority from the bank, broker or other nominee who holds your shares and bring it with you to submit with your ballot at the meeting. In addition, you may vote your shares before the meeting by phone or over the Internetinternet by following the instructions set forth below or, if you received a voting instruction form from your brokerage firm, by mail by completing, signing and returning the form you received.received by mail. Your voting instruction form will set forth whether Internetinternet or telephone voting is available to you. Although most brokers and nominees offer telephone and Internet voting, availability and specific processes will depend on their voting arrangements. We encourage you to record your vote through the Internet if such process is available to you.
If you are able to attend the Annual Meeting, you may vote your shares in person, even if you have previously voted by another means by revoking your proxy vote at any time prior to the meeting, pursuant to the procedures specified in “Revocation of Proxies”. If you hold your shares in street name, you must obtain a proxy from the record holder in order to vote in person.
If Seacoast determines that the Annual Meeting will be held by remote-means only due to public safety and health concerns resulting from the ongoing COVID-19 global pandemic, you will be able to vote your shares by any of the means outlined herein other than in-person.
How to View Proxy Materials Online
Important Notice Regarding the Availability of Proxy Materials for the 20182021 Shareholder Meeting
Our 2018 Proxy Statement2021 proxy statement and the2020 Annual Report on Form 10-K for the year ended December 31, 2017 (referred to collectively herein as the “proxy materials”) are available online at:www.proxyvote.com or atwww.SeacoastBanking.com/GenPage.aspx?IID=100425&GKP=393970. http://www.seacoastbanking.com/financials-regulatory-filings/2021-Annual-Meeting-Proxy-Materials.
We have mailed to certain shareholders a notice of internet availability of proxy materials on or about April 6, 2018.9, 2021. This notice contains instructions on how to access and review the proxy materials on the internet. The notice also contains instructions on how to submit your proxy on the internet or by phone, or, if you prefer, to obtain a paper or email copy of the proxy materials.
You may vote common shares that you owned as of the close of business on March 26, 2018, which is the record date for the Meeting.
Your vote is important. Please review the voting instructions described in this proxy statement, as well as in the notice you received in the mail. By voting prior to the Meeting, you will help ensure that we have a quorum and that your preferences will be expressed on the matters that are being considered. If you are able to attend the Meeting, you may vote your shares in person, even if you have previously voted by another means by revoking your proxy vote at any time prior to the meeting, pursuant to the procedures specified in “Revocation of Proxies”.
You may vote by any of the following methods:
BY TELEPHONE:
You can vote by calling the number on your proxy card or voting instruction form, or provided on the website listed on your notice.
BY INTERNET:
You can vote online atwww.proxyvote.com.
BY MAIL:
You also may vote your shares by requesting a paper proxy card and completing, signing and returning it by mail in the envelope provided.
IN PERSON:
You can vote in person at the Annual Meeting. If you hold your shares in street name, you must obtain a proxy from the record holder in order to vote in person.
For telephone and internet voting, you will need the 16-digit control number included in your notice, on your proxy card or in the voting instructions that accompanied your proxy materials.
For shares held in employee plans, we must receive your voting instructions no later than 11:59 p.m. Eastern Time on May 17, 2018 (the “cut-off date”) to be counted. Otherwise, you may vote up until 11:59 P.M. Eastern Time the day before the meeting date.
OurWe believe our balanced growth strategy, which is focused on organic growth and disciplined acquisitions in growing markets, is delivering value for our shareholders.
In this section, we summarize 20172020 performance highlights and other information contained elsewhere in this proxy statement. Please carefully review the information included throughout this proxy statement and as provided in the 20172020 Annual Report on Form 10-K before you vote.
2017 Performance HighlightsIn 2020, the Board worked in collaboration with Mr. Hudson to orchestrate the planning and preparation for the transition to a new CEO in accordance with our carefully developed and methodical succession plan. As of January 1, 2021, Mr. Hudson became Executive Chairman of the Board of Directors and former Chief Operating Officer, Charles M. Shaffer, became President and Chief Executive Officer.
Value Creation for our Shareholders
Seacoast continued to drive positive momentum in performance metrics, leading to sustained outperformance in total shareholder returns.
* Total return combines share price appreciation and dividends paid to show the total return to the shareholder expressed as an annualized percentage.
Execution of our strategy in 2017 produced outstanding results:Valuable Florida Franchise
1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Seacoast operates with a disciplined growth strategy, benefiting from a fortress balance sheet with robust capital generation, a prudent liquidity position and strict credit underwriting in significant growth areas of Florida, the nation’s third-most populous state. Our balanced growth strategy combines organic growth and select strategic M&A along with prudent risk management, leading to strong results.
 | Seacoast has a strong and growing presence in four of Florida’s most attractive MSAs #1 Florida-based bank in Orlando #1 Market share in Port St Lucie MSA #2 Florida-based bank in West Palm Beach/Fort Lauderdale #2 Florida-based community bank in Tampa, and #1 in St. Petersburg Our acquisition strategy has expanded the customer franchise  |
Execution of our balanced growth strategy in 2020 produced outstanding results year over year:
For the year ended December 31, 2020, the Company reported $77.8 million in net income, or $1.44 per share. Net revenue for the same period was $324.3 million, an increase of 8% year-over-year. The Company continued to see positive performance reflected in its ratios, with a return on average tangible assets of 1.08%, return on average tangible shareholders’ equity of 10.1% and an efficiency ratio of 54.8%. On an adjusted basis, the Company reported $89.0 million in adjusted net income1, or $1.65 per share1. Net revenues were $323.1 million, an increase of 8% year-over-year. Adjusted return on tangible assets1 was 1.17%, adjusted return on tangible equity1 was 10.9% and the adjusted efficiency ratio1 was 51.6%. The Company continues to build shareholder value, reflected in our tangible book value of $16.16, an increase of 9% year-over-year and a compounded annual growth rate of 12% since January 2014.2017.
| Tangible Book Value Per Share |
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Our performance and future growth are driven by a differentiated strategy consisting of 6 key themes:
| Adjusted FY |
| Efficiency Ratio1 |
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Our Vision 2020 Innovation Plan Will Drive Shareholder Returns Above an Already Strong Outlook
Vision 2020 Objectives
Executive Compensation Program Highlights
The Compensation and Governance Committee (“CGC”) is committed to aligning our compensation strategies with our evolving business strategy, good governance and effective risk management practices, and our efforts to generate superior long-term returns for our shareholders. To this end, we emphasize pay-for-performance in our executive compensation programs.
Our executive compensation strategy strongly aligns our CEO and other executivesexecutives’ pay with long-term shareholder interests. In 2019, the CGC redesigned the compensation structure to better align compensation decisions relative to a peer group. The same structure was used in 2020. The following table summarizes the primary elements of our executive compensation for 2020:
The following table summarizes the primary elements of our executive compensation program for 2017.2020:
| Pay Element | Purpose | Determination | 2020 Results |
| Base Salary | Recognize performance of job responsibilities and attract and retain individuals with superior talent. | Reflects the CGC’s assessment of the executive’s experience, skills and value to Seacoast. | Our CEO’s base salary |
| Annual Cash Incentive | Recognize achievement of our short- term business strategy objectives and individual executive performance. Incorporates both quantitative and qualitative goals. | Reflects the individual executive’s performance against pre-established individual goals, as well as relative bank performance. In FY2020, these bank goals included performance relative to peer performance in | Individual and Company performance were evaluated in Q1 2021, with corresponding payout determinations approved in March 2021, reflect Company performance in 2020 and subjective adjustments based on the achievement of individual goals. |
| Performance Share Units | The number of PSUs granted is determined by the CGC after consideration of each executive’s performance | PSUs granted in | |
| Restricted Stock | Provide a strong retention element and align executive and shareholder interests. | The amount of |
Please refer to theCompensation Discussion and AnalysisandThe Executive Compensation Tablesin this proxy statement for additional details about our compensation programs.
Summary of Proposals and Board Recommendations
| Item | Proposal | Board Voting Recommendation | Vote Required |
| 1 | FOR ALL | Plurality vote* | |
| 2 | FOR | Affirmative vote of a majority of votes cast | |
| 3 | FOR | Affirmative vote of a majority of votes cast | |
| 4 | |||
| Advisory (Non-binding) Vote to Approve Executive Compensation (Say on Pay) | FOR | Affirmative vote of a majority of votes cast | |
| 5 | Ratification of Appointment of Crowe LLP as Independent Auditor for 2021 | FOR | Affirmative vote of a majority of votes cast |
* More fully described inProposal 1 - Election of Directors, Manner of Voting Proxies
You are being asked to, among other proposals, re-elect fiveelect four Class I directors of Seacoast. All of the nominees are presently directors of Seacoast. Mr. Charles M. Shaffer was appointed as a Director in January 2021 upon his promotion as CEO. All of the nominees also serve as members of the board of directors of Seacoast’s principal banking subsidiary, Seacoast National Bank (the “Bank”). If elected, each director nominee will serve a three year term expiring at the 20212024 Annual Meeting and until their successors have been elected and qualified. Detailed information about each nominee’s background, skills and expertise can be found inProposal I – Election of Directors.
| Name | Age | Director Since | Current Occupation | Independent | No. of Other Public Boards |
| Jacqueline L. Bradley | 60 | 2014 | Management and Financial Services | ✔ | 0 |
| H. Gilbert Culbreth, Jr. | 72 | 2008 | CEO and President of Auto and other sales companies | ✔ | 0 |
| Christopher E. Fogal | 66 | 1997 | Certified Public Accountant and Partner of Firm | ✔ | 0 |
| Timothy S. Huval | 51 | 2016 | CHRO of Humana, Inc. | ✔ | 0 |
| Herbert A. Lurie | 57 | 2016 | Senior Advisor of Guggenheim Securities | 0 |
| Name | Age | Director Since | Current Occupation | Independent | No. of Other Public Boards |
| Jacqueline L. Bradley | 63 | 2014 | Management and Financial Services | ✓ | 1 |
| H. Gilbert Culbreth, Jr. | 75 | 2008 | CEO and President of Auto and other sales companies | ✓ | 0 |
| Christopher E. Fogal | 69 | 1997 | Certified Public Accountant and Partner of Firm | ✓ | 0 |
| Charles M. Shaffer | 47 | January | President and CEO of Company and Bank | 0 | |
| 2021 |
Board and Governance Highlights
Board Committee Membership and 2017 Committee Meetings
| Director Name | Audit | Compensation & Governance | Enterprise Risk Management | Strategy & Innovation | ||||
| Dennis J. Arczynski(1) | ✔ | ✔ | (2) | ✔ | ||||
| Stephen E. Bohner(1) | ✔ | |||||||
| Jacqueline L. Bradley(1) | ✔ | |||||||
| H. Gilbert Culbreth, Jr.(1) | ✔ | (2) | ||||||
| Julie H. Daum(1) | ✔ | |||||||
| Christopher E. Fogal(1) | ✔ | (2) | ||||||
| Maryann Goebel (1) | ✔ | ✔ | ✔ | |||||
| Roger O. Goldman(1) (3) | ||||||||
| Dennis S. Hudson, Jr. | ✔ | |||||||
| Dennis S. Hudson, III(4) | ✔ | |||||||
| Timothy S. Huval(1) | ✔ | ✔ | ||||||
| Herbert A. Lurie | ✔ | |||||||
| Alvaro J. Monserrat(1) | ✔ | ✔ | ||||||
| Thomas E. Rossin(1) | ✔ | ✔ | (2) | |||||
| TOTAL MEETINGS HELD | 8 | 5 | 6 | 9 | ||||
Director Attendance: All directors attended over 75% or more of the meetings of the Board and Board committees on which they served in 2017.
Over the past five years, we have continually recruited new talent to our Board to increase diversity of thought and experience and to better align overall Board capability with our strategic focus. During this time, our Chairman/CEO and our Lead Independent Director have focused considerable attention on Board refreshment and we have added seven new directors with skill sets needed to help navigate the fast-changing environment impacting our business. As a result, our overall Board composition has been significantly altered across a number of important aspects creating a vibrant Board culture and unrelenting focus on creating shareholder value over the long term.
Below is a graphic illustration of the changes in our Board over the past five years:
Currently, our board has the following characteristics:
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Since 2013, we have made the following changes to the Board:
Our Corporate Governance Framework
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CORPORATE GOVERNANCE AT SEACOAST
Our goal is to maintain a corporate governance framework that supports an engaged, independent board with diverse perspectives and judgment that is committed to representing the long-term interests of our shareholders. We believe our directors should possess the highest personal and professional standards for ethics, integrity and values, as well as practical wisdom and mature judgment. Therefore, our Board, with the assistance of management and the CGC, regularly reviews our corporate governance principles and practices.
Corporate Governance Principles and Practices
Important elements of our corporate governance framework are our governance policies, which include:
You may view these and other corporate governance documents at our investor relations website located atwww.SeacoastBanking.com, or request a copy, without charge, upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995.
The Company’s common stock is listed on the Nasdaq Global Select Market (“Nasdaq”). Nasdaq requires that a majority of the Company’s directors be “independent,” as defined by the Nasdaq rules. Generally, a director does not qualify as an independent director if the director (or, in some cases, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations with the Company, its external or internal auditors, or other companies that do business with the Company. The Board of Directors has determined that a majority of the Company’s directors are independent directors under the Nasdaq rules. The Company’s current independent directors are: Dennis J. Arczynski, Stephen E. Bohner, Jacqueline L. Bradley, H. Gilbert Culbreth, Jr., Julie H. Daum, Christopher E. Fogal, Maryann Goebel, Roger O. Goldman, Timothy S. Huval, Alvaro J. Monserrat and Thomas E. Rossin. Our governance principles provide that a substantial majority of our directors will meet the criteria for independence required by Nasdaq. Over 78% of our Board meets our criteria for independence.
Board leadership is provided through: 1) a combined Chairman and CEO role, 2) a clearly defined and substantial lead independent director role, 3) active committees and committee chairs, and 4) talented directors who are committed and independent-minded. At this time, the Board believes this governance structure is appropriate and best serves the interests of our shareholders.
The Board of Directors periodically assesses who should serve as Chairman and as Chief Executive Officer, and whether the offices should be combined or separate, with appropriate consideration of current facts and circumstances.
The Company’s current Chief Executive Officer, Dennis S. Hudson, III, also serves as the Chairman of the Board of Directors. He has held the post of Chief Executive Officer for the past 20 years, Chairman for the past 13 years, President for the 10 years prior to being named Chairman, and has also served as Chief Executive Officer of the Bank for the past 25 years. During this time, Mr. Hudson has led the Company through its growth from a local community bank to the fourth largest Florida bank with $5.8 billion in assets and 51 full-service branches and five commercial banking centers in 15 counties as of year-end 2017. In light of Mr. Hudson’s significant leadership tenure with the organization, his breadth of knowledge of the Company and his relationship with the institutional investor community, as well as the efficiencies, accountability, unified leadership and cohesive corporate culture that this structure provides, the Board of Directors believes it is appropriate that he serve as both Chief Executive Officer and Chairman.
To further strengthen our corporate governance, our independent directors select a lead director from the independent directors if the positions of Chairman and Chief Executive Officer are held by the same person or if the Chairman of the Board is not an independent director. The role of our Lead Independent Director is described in our Corporate Governance Guidelines and in the table at the end of this section.
Our current Lead Independent Director is Mr. Roger Goldman. He has served in this capacity since 2012. Mr. Goldman’s experience includes a number of high profile leadership assignments at or on behalf of shareholders or other constituent groups at organizations significantly larger than Seacoast. The depth and breadth of his experience and his willingness and capacity to dedicate a significant portion of his time on behalf of the Board and our shareholders are key inputs in our transformative efforts.
Mr. Goldman’s affiliation with Seacoast enhances our reputation within the industry, improves the performance and effectiveness of the Board, and enhances our exposure with the investment community. He is uniquely suited to lead the Board during the normal course of business and in its day-to-day interactions with and oversight of management.
In addition to Mr. Goldman’s efforts to ensure an effective and results-oriented Board, he engages on the Board’s behalf with management and employees across the Company. Frequent active, independent, and effective engagement by Mr. Goldman aids our Board of Directors in making informed decisions on our business and risk strategies. He also is well-positioned to assess our executive and managerial talent, succession readiness plans, and leadership development efforts, which are key to our success. Finally, his accessibility and high level of visibility within the Company provides employees with ongoing opportunities to raise issues or concerns free from management’s direct influence. Mr. Goldman provides a wide array of highly valuable services to the Board and our Shareholders.
BOARD LEADERSHIP STRUCTURE - DEFINITION OF ROLES
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Non-Management Executive Sessions
In order to give a significant voice to our non-management directors, our Corporate Governance Guidelines provide for executive sessions of our non-management and independent directors. Our Board believes this is an important governance practice that enables the Board to discuss matters (such as strategy, CEO and management performance, succession planning, and board effectiveness) without management present.
Our non-management directors generally meet in executive session following each regularly scheduled Board meeting. Our independent directors meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Our Lead Independent Director presides at all executive sessions of the independent directors and non-management directors, and sets the agenda for such executive sessions. Any independent director may call an executive session of independent directors at any time. The independent directors met four times in executive session in 2017.
Committee Structure & Other Matters
Oversight is also provided through the extensive work of the Board’s committees – Audit Committee; Compensation and Governance Committee (“CGC”); Enterprise Risk Management Committee (“ERMC”); and Strategy and Innovation (S&I) Committee – in key areas such as financial reporting, internal controls, compliance, corporate governance, succession planning, compensation programs, strategic planning and risk management. The Audit Committee and the CGC consist entirely of independent, non-management directors.
In addition, at the end of each year, the Board and each of its committees review a schedule of agenda topics to be considered in the coming year. Each Board and committee member may raise subjects that are not on the agenda at any meeting and suggest items for inclusion in future agendas.
The Company believes that the foregoing structure, policies, and practices, when combined with the Company’s other governance policies and procedures, provide appropriate opportunities for oversight, discussion, evaluation of decisions and direction from the Board of Directors.
Shareholder Engagement and Board Responsiveness
The Company engages with our shareholders to ensure that the Board and management are aware of and address issues of importance to our investors. We regularly meet with various institutional shareholders and welcome feedback from other shareholders, which is considered by the Board or appropriate Board committee.
The Company’s Corporate Governance Guidelines provide for a process by which shareholders may communicate with the Board, a Board committee or the non-management directors as a group, or other individual directors. Shareholders who wish to communicate with the Board of Directors, a Board committee, the Lead Independent Director, other directors or an individual director may do so by sending written communications addressed to the Board of Directors, a Board committee or such group of directors or individual director, c/o Corporate Secretary, Seacoast Banking Corporation of Florida, 815 Colorado Avenue, P.O. Box, 9012, Stuart, Florida 34995. All communications will be compiled by the Company’s Secretary and submitted to the Board of Directors, a committee of the Board of Directors or the appropriate group of directors or individual director, as appropriate, at the next regular meeting of the Board.
Since 2009 the Company has annually included in its proxy statement a separate advisory vote on the compensation paid to its executives, as disclosed in the Compensation Discussion and Analysis, the compensation tables and related proxy disclosure, commonly known as a “say-on-pay” proposal. Independent surveys have shown that an annual vote is the preferred frequency of most institutional investors. Our Board also endorses an annual vote as we believe it gives shareholders an opportunity to voice their concerns with respect to executive compensation. Shareholder support of our say-on-pay proposal at our 2017 annual meeting increased compared to the prior year. (See “Outcome of our 2017 Say-On-Pay vote” in the table below.) Shareholder support of directors standing for re-election at the 2017 annual meeting also increased compared to the prior year.
Below are highlights of the feedback we have received from shareholders and our Board’s response:
Management Succession Planning and Development
Our Board understands that a strong succession framework reduces Company risk and therefore ensures that appropriate attention is given to identifying and developing talented leaders. Consequently, we have a robust management succession and development plan which is reviewed and updated annually.
The Board maintains oversight responsibility for succession planning with respect to the position of CEO and monitors and advises management regarding succession planning for other executive officers. The Board’s goal is to have a long-term and continuing program for effective senior leadership development and succession. The Board also has short-term contingency plans in place for emergency and unexpected occurrences, such as the sudden departure, death, or disability of our CEO or other executive officers.
The CGC, working with the CEO, annually evaluates succession planning at the senior levels of management and reports the results of such evaluation to the Board, along with recommendations on management development and succession planning. The updated succession plan is reviewed and approved by the Board to ensure that competencies are in alignment with our strategic plan. The annual review of the CEO succession planning includes a review of specific individuals identified as active CEO succession candidates, and each of those individuals is reviewed with respect to progress in his or her current job position and progress toward meeting his or her defined leadership development plan. The Company’s CEO and senior management are similarly responsible for supporting “next generation” leadership development by: identifying core talent, skills and capabilities of future leaders within the Company; assessing the individuals against leadership capabilities; identifying talent and skill gaps and development needs; assisting with internal candidate development; and identifying significant external hiring needs.
1Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
The Board and individual Board members may advise, meet with and assist CEO succession candidates and become familiar with other senior and future leaders within the Company. Directors are encouraged to become sufficiently familiar with the Company’s executive officers to be able to provide perspective on the experience, capabilities and performance of potential CEO candidates. The Board urges senior management, as well as other members of management who have future leadership potential within the Company, to attend and present at Board meetings so that each can be given appropriate exposure to the Board. The Board may contact and meet with any employee of the Company at any time, and are encouraged to make site visits, to meet with management, and to attend Company, industry and other events.
Executive officers are appointed annually at the organizational meeting of the respective Boards of Directors of Seacoast and the Bank, to serve until the next annual meeting and until successors are chosen and qualified.
Dennis S. Hudson, III
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Charles M. Shaffer
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Charles K. Cross, Jr.
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David D. Houdeshell
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Juliette P. Kleffel
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As of the Record Date, based on available information, all directors, director nominees and executive officers of Seacoast as a group (18 persons) beneficially owned approximately 1,424,700 outstanding shares of common stock, constituting 3.0% of the total number of shares of common stock outstanding at that date. In addition, as of the Record Date, various subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting power over 46,512 outstanding shares, or 0.1% of the outstanding shares, of Seacoast common stock, including shares held as trustee or agent of various Seacoast employee benefit and stock purchase plans.
The CGC serves as the nominating committee of the Company. The committee annually reviews and makes recommendations to the full Board of Directors regarding the composition and size of the Board of Directors and its committees, and if determined necessary, recommends potential candidates to the Board for nomination for election to the Board by the Company’s shareholders. The CGC’s goal is to ensure that the Board of Directors consists of a diverse group of members with the properrelevant expertise, skills, personal attributes and professional backgrounds who, individually and collectively, are appropriate to achieve the Company’s strategic vision and business objectives, and best serve the Company’s and shareholders’ long-term interests.
As part of the assessment process, the CGC evaluates whether the addition of a director or directors with particular attributes, experience, or skill sets could enhance the Board’s effectiveness. The CGC identifies director candidates through business, civic and legal contacts, and may consult with other directors and senior officers of the Company. The CGC may also hireutilize a search firm to help it identify, evaluate and conduct due diligence on potential director candidates. Once a candidate has been identified, the CGC confirms that the candidate meets the minimum qualifications for director nominees, and gathers information about the candidate through interviews, questionnaires, background checks, or any other means that the CGC deems to be helpful in the evaluation process. Director candidates are interviewed by the ChairmanChair of the CGC and at least one other member of the committee. Each member of the committee participates in the review and discussion of director candidates. Where appropriate, directors who are not on the CGC are encouraged to meet with and evaluate the suitability of potential candidates. The CGC then evaluates the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board in relation to the Company’s strategic goals, and recommends nominees to the Board. The full Board formally nominates candidates to be included in the slate of directors presented for shareholder vote based upon the recommendations of the CGC following this process.
Given the evolving needs and business strategy of the Company, the CGC believes that the Board of Directors as a whole should have diversity of thought and experience, which may, at any one or more times, include differences with respect to personal, educational or professional experience, gender, ethnicity, national origin, geographic representation, community involvement and age. However, the CGC does not assign specific weights to any particular criteria. Its goal is to identify nominees that, considered as a group, will possess the talents and characteristics necessary for the Board of Directors to fulfill its responsibilities and advance our strategic mission. In addition, each director must have the qualifications set forth in the Company’s Bylaws, as well as the personal characteristics and core competencies described below as our Director Eligibility Guidelines:
| Director Eligibility Guidelines | |||
| Personal Characteristics | Core Competencies | ||
· | the highest ethical character | · | substantial business or professional experience and ability to offer |
| · | a personal and professional reputation consistent with Seacoast’s | meaningful advice and guidance to the Company’s management | |
| values as reflected in its Code of Conduct | based on that experience | ||
| · | the ability to exercise sound business judgment | · | professional achievement through service as a principal executive |
| · | a willingness to listen to differing points of view and work in a mutually respectful manner
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| of a major company, partner in a law or accounting firm, successful entrepreneur, |
The CGC also considers numerous other qualities, skills and characteristics when evaluating director nominees, such as a candidate’s:
| · | understanding of and experience in the financial services industry, as well as accounting, finance, legal, real estate, corporate governance and technology expertise; |
| · | leadership experience with public companies or other major organizations, as well as civic and community relationships; |
| · | availability and commitment to carry out the responsibilities as a director; |
| · | knowledge, experience and skills that enhance the mix of the Board’s core competencies and provide a different perspective; |
| · | the absence of any real or perceived conflict of interest that would impair the director’s ability to act in the best interest of shareholders; and |
| · | qualification as an independent director. |
In addition to nominations by the CGC, any Company shareholder entitled to vote generally on the election of directors may recommend a candidate for nomination as a director by providing advance notice of such proposed nomination to the Corporate Secretary at the Company’s principal offices. The written submission must comply with the applicable provision in the Company’s Articles of Incorporation. To be considered, recommendations with respect to an election of directors to be held at an annual meeting must be received not less than 60 days nor more than 90 days prior to the anniversary of the Company’s last annual meeting of shareholders (or, if the date of the annual meeting is changed by more than 20 days from such anniversary date, within 10 days after the date that the Company mails or otherwise gives notice of the date of the annual meeting to shareholders), and recommendations with respect to an election of directors to be held at a special meeting called for that purpose must be received by the 10th day following the date on which notice of the special meeting was first mailed to shareholders. Recommendations meeting these requirements will be brought to the attention of the Company’s CGC. Candidates for director recommended by shareholders in compliance with these provisions and who satisfy the Director Eligibility Guidelines will be afforded the same consideration as candidates for director identified by Company directors, executive officers or search firms, if any, employed by the Company. In 2017,For our 2021 Shareholder Meeting, no shareholder nominee recommendations were received.
Shareholder Engagement and Board Evaluation ProcessResponsiveness
Periodically,The Company engages with our shareholders to ensure that the Board and eachmanagement are aware of and address issues of importance to our investors. We regularly meet with various institutional shareholders and welcome feedback from other shareholders, which is considered by the Board committee evaluateor appropriate Board committee.
Since 2009, the Company has annually included in its proxy statement a separate advisory vote on the compensation paid to its executives, as disclosed in the Compensation Discussion and Analysis, the compensation tables and related proxy disclosure, commonly known as a “say-on-pay” proposal. Independent surveys have shown that an annual vote is the preferred frequency of most institutional investors. Our shareholders also have expressed a preference for an annual vote. Our Board also endorses an annual vote as we believe it gives shareholders an opportunity to voice their performanceconcerns with respect to executive compensation. Shareholder support of our say-on-pay proposal at our 2020 annual meeting was inline compared to the prior year. (See “Outcome of our 2020 Say-On-Pay vote” in the table below.) Shareholder support of directors standing for election at the 2020 annual meeting was also inline compared to the prior year. Below are highlights of the feedback we have received from shareholders and effectiveness, along with processes and structure, to identify areas for enhancement. The process is described below.our Board’s response:
| Delivered 2020 earnings of $1.44 diluted EPS and | ||
1 Non-GAAP measure; refer to Appendix A - Information Regarding Non-GAAP Financial Measures.
| What We Heard | Our Board’s Response |
Outcome of our 2020 Say- On-Pay vote | At our 2020 annual meeting of shareholders, our say-on-pay proposal received the support of 99.5% of the votes cast. Our CGC considered the vote in relaton to: 1) the alignment of our compensation program with the long-term interests of our shareholders, 2) the evolution of our business strategy with emerging opportunities and in fulfilling customer demand for innovative products and services, and 3) the relationship between risk-taking and the incentive compensation provided to our executives. The CGC will continue to evaluate and refine our executive compensation programs and welcomes input from our shareholders. |
Disclose ESG efforts, including with respect to human capital management | Included information in our 2021 proxy statement about the Company’s ESG initiatives and HCM oversight. |
The Company’s Corporate Governance Guidelines provide for a process by which shareholders may communicate with the Board, a Board committee or the non-management directors as a group, or other individual directors. Shareholders who wish to communicate with the Board of Directors, held four regular meetingsa Board committee, the Lead Independent Director, other directors or an individual director may do so by sending written communications addressed to the Board of Directors, a Board committee or such group of directors or individual director, c/o Corporate Secretary, Seacoast Banking Corporation of Florida, 815 Colorado Avenue, P.O. Box, 9012, Stuart, Florida 34995. All communications will be compiled by the Company’s Secretary and six special meetings during 2017. Eachsubmitted to the Board of the directors attended at least 75% of the total number of meetingsDirectors, a committee of the Board of Directors and committees on which they served.or the group of directors or individual director, as appropriate, at the next regular meeting of the Board.
Six of the 14 then-incumbent Directors attended the Company’s 2017 annual shareholders’ meeting. The Company encourages all of its directors to attend its shareholders’ meetings but understands that situations may arise that prevent such attendance.
The Company’s Board of Directors has four standing permanent committees: the Audit Committee, the Compensation and Governance Committee, the Enterprise Risk Management Committee, and the Strategy and Innovation Committee. These committees serve the same functions for the Company and the Bank. The current composition of each Company committee is set forth in the table underProxy Summary - Board and Governance Highlights.
Each committee has a charter specifying such committee’s responsibilitiesBoard Composition
Over the past years, we have continually recruited new talent to our Board to increase diversity of thought and duties. The Audit Committeeexperience and to better align overall Board capability with our strategic focus. During this time, our Chairman and CEO and CGC charters are reviewed annually. These charters are availablehave focused considerable attention on Board refreshment and, since 2013, we have added seven new directors with skill sets needed to help navigate the Company’s website at www.SeacoastBanking.com or upon written request.fast-changing environment impacting our business. As a result, our overall Board composition has been significantly altered across a number of important aspects creating a vibrant Board culture and focus on creating shareholder value over the long term. Seacoast continues to build a diverse Board with experience aligned with our strategic mission to ensure a balanced mix of directors with a deep knowledge of Seacoast and its markets, as well as new members with fresh perspectives.
Audit CommitteeBOARD REFRESHMENT AND CHARACTERISTICS (NON-EXECUTIVE DIRECTORS)
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* Resignation effective as of January 11, 2021
We have revitalized our Board to align with our balanced growth strategy. Below are the mix of skills and qualification of our Board as of the Annual Meeting date:
| Skills and Qualifications | Dennis J. Arczynski | Jacqueline L. Bradley |
| Julie H. Daum |
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| Thomas | Charles M. | |
 | Accounting experience is important in | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
 | Banking / Investments experience is important to guide product evolution and lead investment initiatives | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
 | Executive Leadership experience is important to monitor strategy and performance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
 | Financial Services experience is important to manage our business model and revenue generating services | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||
 | Governance / Legal experience is important to conduct decision-making and validate implementation | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
 | Data Analytics experience is important for innovation and strengthening profitability and understanding customers | ✔ | ✔ | ✔ | ✔ | |||||||
 | Local Community experience and stature is important in understanding the | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
 | Marketing / Digital experience is | ✔ | ✔ | ✔ | ✔ | |||||||
 | Regulatory / Compliance experience is | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
 | Risk Management experience is important in overseeing the risks throughout the organization | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
 | Technology / Information Security experience is important to assess tools to enhance business operations, customer service and cyber and information security | ✔ | ✔ | ✔ | ✔ | ✔ | ||||||
 | Human Capital Management experience is important to assess compensation practices, diversity mix, talent, training programs and corporate culture within the company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||||
Compensation and
Our Corporate Governance Committee (“CGC”)Framework
Board Independence | • A total of 9 of our 11 directors, or over 80% are considered independent as of the Annual Meeting date. • Our Executive Chairman and | |
Board Refreshment & Diversity | • We seek a board that, considered as a group, will possess a diversity of experience and differences with respect to personal, educational or professional experience, gender, ethnicity, national origin, geographic representation, community involvement and age. • We have a mix of new and longer tenured directors to help ensure fresh perspectives as well as continuity and experience. The average tenure of our non-management directors is 9.9 years. | |
| • We have four standing Board committees—Audit; Compensation and Governance (“CGC”); Enterprise Risk Management (“ERMC”); and Corporate Development (“CD”). • The Audit Committee and CGC consist entirely of independent, non-management directors. • Chairs of the | |
Lead Independent Director | • Our independent directors elect a lead independent director. • Our lead independent director chairs regularly scheduled executive sessions, without management present, at which directors can discuss management performance, succession planning, board informational needs, board effectiveness or any other matter. | |
Board Oversight of Strategy & Risk | • Our Board has ultimate oversight responsibility for strategy and risk management. • Our Board directly advises management on development and execution of the Company’s strategy and provides oversight through regular updates. • The CD Committee helps ensure that the
• Through an integrated enterprise risk management process, key risks, including those related to privacy and cybersecurity are reviewed and evaluated by the |
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Enterprise Risk Management Committee (“ERMC”)
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• The Audit Committee oversees the Company’s financial risk management process. • The CGC oversees risks and | |
Accountability
| • We have a plurality vote standard for the election of directors, with a director resignation policy for uncontested elections. • Each common share is entitled to one vote. • We have a process by which all shareholders may communicate with our Board, a Board committee or non-management directors as a group, or other individual directors. | |
| • A minimum stock holding of three times the annual base retainer is required for each director, to be acquired within four years of joining the Board. | |
| • CEO and management succession planning is one of the Board’s highest priorities. Our Board ensures that appropriate attention is given to identifying and developing talented leaders. In 2020, the Board | |
Board Effectiveness | • The Board meets in a director-only session prior to each regular meeting to discuss the Company’s business condition. After each regular meeting, directors are offered the opportunity to meet in an executive session of non-management directors led by the lead independent director. • The Board and its | |
Open Communication | • Our Board receives regular updates from business leaders regarding their area of • Our directors have access to all management and employees on a confidential basis. • Our Board and its committees are authorized to hire outside consultants at their discretion and at the Company’s expense. | |
Strategy and Innovation (“S&I”) CommitteeCORPORATE GOVERNANCE AT SEACOAST
Our goal is to maintain a corporate governance framework that supports an engaged, independent board with diverse perspectives and judgment that is committed to representing the long-term interests of our shareholders. We believe our directors should possess the highest personal and professional standards for ethics, integrity and values, as well as practical wisdom and mature judgment. Therefore, our Board, with the assistance of management and the CGC, regularly reviews our corporate governance principles and practices.
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The Board’s Role in Strategy and Risk Oversight
The Board of Directors actively reviews our long-term strategy and the plans and programs that management develops to implement our strategy. While the Board meets formally at least once every year to consider overall long-term strategy, it generally reviews various elements of strategy, and our progress towards implementation, at every regular meeting. Under the leadership of Lead Independent Director Goldman, ourOur directors are active in our strategic planning process and exercise robust oversight of and challenges to bothwhile challenging our strategies and our implementation of such strategies.
The Board believes that strategic risk is an exceptionally important risk element among a number of risks that the Company faces and works to ensure that this risk is appropriately managed in the context of the rapidly changing environment in which the Company and its customers operate. The Board does not believe this risk can be delegated and the Board as a whole regularly spends a significant amount of its time engaged with management and in executive session discussing our long-termlong term strategy, the effectiveness of our plans to implement such strategy, and our progress against those plans.
The Board believes that an integral part of managing strategic risk is the appointment of a strong lead director to: i) regularly engage with the CEO on an ongoing basis, ii) interact from time to time with other key members of management and other leaders throughout the Company to examine alignment around our chosen long-term strategy, and iii) ensureensuring that the Board’s views are considered as our strategy evolves. The Board strongly believes that having an active and engaged committee chairs and a lead independent director better ensures that the Board as a whole can serve as a credible challenge to management’s plans and programs and increases transparency into the fast-paced changes management is implementing.
The Board’s committees also work to ensure that we have the right alignment to support our long-term strategic direction including: (i) an active Board recruitment process focused on developing or acquiring the skill, experience and attributes of both individuals and the Board as a whole needed to support our strategy, (ii) ensuring an appropriate link is established between our compensation design and our long-term strategy to encourage and reward the achievement of our long-term goals and protect shareholder value by discouraging excessive risk, and (iii) ensuring that our risk management structure can effectively manage the inherent risks that underlie our strategy.
Other types of risks that the Company faces include:
Our ERMCEnterprise Risk Management Committee (“ERMC”) regularly assesses our overall risk profile and oversees our risk management programs which are implemented by our chief risk officer. Information security is a significant operational risk for financial institutions, and includes the risk of losses resulting from cyber-attacks. Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients, and employees, and information security risk. In light of these risks, the Board also assesses the risks and changes in the cyber environment through presentations and reports provided to our ERMC.
Environmental, Social and Governance (“ESG”)
Our Board recognizes the importance to operate in a responsible and sustainable manner aligned with our mission, vision and values. Our Compensation and Governance Committee (“CGC”) is charged with monitoring ESG efforts, and identifies and discusses ESG issues material to our business and communities where we operate. A key focus of our long-term strategic plan is managing growth through an evolving risk view, in which attention to ESG matters is critical to success. The Board and senior management are committed to continuing to build upon these efforts in the coming years.
We believe that a key element of sustainability is being a great place to work for our employees. In 2020, Seacoast’s subsidiary bank was named one of the “Best Banks to Work For” by American Banker and earned the designation of “2020 Best Place to Work for LGBTQ Equality” by the Human Rights Campaign Foundation in its first year of application.
The health, well-being and safety of our employees, customers and communities are top priority. We began to focus on COVID-19 as a potentially significant issue in March 2020. As we followed developments, our senior management team initiated regular COVID-19 planning sessions to address the critical safety, operational and business risks associated with the pandemic across the organization, including a work-from-home plan. Through these efforts, as well as our continued commitment to monitor, assess and implement guidance and best practices recommended by the Centers for Disease Control and Prevention (CDC), we have been able to maintain the continuity of all services that we provide to our customers, while also managing the spread of the virus and promoting the health, well-being and safety of our employees, customers and communities. We acted quickly at the onset of the pandemic and took multiple measures to promote safety in our offices and protect our team members, including the implementation of:
| · | enhanced hygiene, cleaning and sanitizing protocols; | |
| · | physical distancing and work-from-home protocols; | |
| · | travel restrictions and cancellation of in-person meetings; | |
| · | standard investigation, disinfection and return-to-work protocols; | |
| · | contact tracing and quarantines; | |
| · | frequent communication to team members; and | |
| · | $500 stipend to front line associates. |
Associate Health and Financial Well-Being
Seacoast provides access to a variety of resources to address personal health and financial wellness. Comprehensive Employee Assistance Plan (EAP) resources are accessible to all associates addressing a wide range of topics from substance abuse to child and elder care resources. Associates are encouraged to balance their physical fitness with their work life with a reimbursement for a portion of fitness center memberships. We also offer financial planning resources for help with student debt, retirement planning and one-on-one financial planning sessions to all associates.
We strive to create an atmosphere where associates feel welcome and confident bringing their whole self to work. Inclusion, respect, and fairness live at the core of our company culture, and we believe the diversity of our associate base and of the communities we serve make us stronger. We believe that each associate has a unique perspective that can be valuable to our company, our customers, and our communities. We have been intentional in listening to and discussing the racism experienced firsthand by our associates. In 2020, our CEO held roundtables with black associates to address diversity inclusion, inequality and racial issues. The company also acknowledged the celebration of Juneteenth with an early closure. Additionally, Seacoast pledged a donation of $15,000 toward local chapters of the National Association for the Advancement of Colored People (NAACP) and Big Brothers / Big Sisters across our markets.
As part of the many things we do to support our associates and their families, as well as additional steps we are taking to continue to build on this progress, we have established four Associate Resource Groups (“ARGs”): LGBT+, Military Outreach and Women Mean Business, as well as the recent addition of Black Associates and Allies Network (BAAN) all of which collaborate across regions. The Company places a high value on inclusion, engaging employees in our ARG programs comprised of associates with diverse backgrounds, experiences or characteristics who share a common interest in professional development, improving corporate culture and delivering sustained business results. Each group is sponsored by a senior executive leader. As of December 31, 2020, over 18% of employees across the Company are a member of at least one of our ARGs.
Human Capital Management (“HCM”)
The Board believes that human capital management is an important element of the Company’s continued growth and success, and is essential for our ability to attract, retain and develop talented and skilled associates. Our senior leadership and human resources teams, with oversight by our CGC, are responsible for attracting and retaining top talent by facilitating an environment where employees feel supported and encouraged in their professional and personal development. Additionally, we maintain competitive compensation, comprehensive benefits and appropriate training that provide growth, developmental opportunities and multiple career paths within our company. We also identify potential internal candidates to fill positions by evaluating critical job skill sets, identifying competency gaps and creating developmental plans. We invest in our associates through training and development programs, as well as tuition reimbursement to promote continued professional growth.
To ensure that we are meeting associates’ expectations, we conduct an Employee Engagement Survey each year. The results of the survey and the process of continuous improvement that ensues are discussed with the Board at least annually. In 2020, our engagement score was 84%, with 84% participation by the associate base, and an 8% increase in participation from the prior year.
Corporate Governance Principles and Practices
Important elements of our corporate governance framework are our governance policies, which include:
| · | Corporate Governance Guidelines | |
| · | Code of Conduct (applicable to all directors, officers and employees) | |
| · | Code of Ethics for Financial Professionals (applicable to, among others, our chief executive officer and chief financial officer); and | |
| · | charters for each of our Board committees |
You may view these and other corporate governance documents on the investor relations page on our website located at www.SeacoastBanking.com, or request a copy, without charge, upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995. Information included on our website, other than the proxy statement and form of proxy, is not a part of the proxy soliciting material.
The Company’s common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBCF”. Nasdaq requires that a majority of the Company’s directors be “independent,” as defined by the Nasdaq rules. Generally, a director does not qualify as an independent director if the director (or, in some cases, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations with the Company, its external or internal auditors, or other companies that do business with the Company. The Board of Directors has determined that a majority of the Company’s directors are independent directors under the Nasdaq rules. The Company’s independent directors in 2020 were: Dennis J. Arczynski, Jacqueline L. Bradley, H. Gilbert Culbreth, Jr., Julie H. Daum, Christopher E. Fogal, Maryann Goebel, Robert J. Lipstein, Herbert A. Lurie, Alvaro J. Monserrat and Thomas E. Rossin. Mr. Lurie is a senior advisor of Guggenheim Securities that, from time to time, has provided financial advisory services to Seacoast. The Board considered this relationship when assessing Mr. Lurie’s independence in 2020. For reasons unrelated to this relationship, Mr. Lurie resigned from the Board in January 2021. Our governance principles provide that a substantial majority of our directors will meet the criteria for independence required by Nasdaq. Over 80% of our Board meets our criteria for independence.
Periodically, our Board and each Board committee evaluate their performance and effectiveness, along with processes and structure, to identify areas for enhancement. The process is described below.
| Element | Description |
| Corporate Governance Review and Investor Feedback | The CGC reviews corporate governance principles with consideration given to generally accepted practices and feedback from investors and makes recommendations for Board changes. This committee also oversees the process for annual board evaluations. |
| Annual Board & Committee Self-Evaluations | In 2020, Board and committee evaluations were individually conducted to assess the effectiveness of the Board and committees of the Board. |
| Summary and Review | For the 2020 Board and committee evaluations, responses were compiled and summarized, including comments, which were reviewed by the Chairman and Lead Independent Director, and together presented summary results to the full Board. The committee evaluations were reviewed by the respective committee chairs, who then discussed the results with their respective committees and the full Board. |
| Actions | As a result of the Board evaluation process, the Board gained insight as to committee structure, process improvements to facilitate broader engagement around governance matters and implementation of the CEO succession plan. |
The Company’s former Chief Executive Officer, Dennis S. Hudson, III, also served as the Chairman of the Board of Directors in 2020. As part of the CEO Succession Plan implemented in 2020, Mr. Hudson was appointed Executive Chairman of the Board of Directors and Charles M. Shaffer was appointed as the Company’s President and Chief Executive Officer, effective January 1, 2021. Mr. Hudson has held the post of Chief Executive Officer for the past 23 years, Chairman for the past 16 years, President for the 13 years prior to being named Executive Chairman, and has also served as Chief Executive Officer of the Bank for the past 28 years. During this time, Mr. Hudson has led the Company through its growth from a local community bank to the fourth largest Florida bank with $8.3 billion in assets and 51 full-service branches in 15 counties and a group of commercial banking centers throughout the footprint as of year-end 2020.
The Board leadership framework is provided through: 1) Executive Chairman Hudson’s guidance and deep understanding of the financial services industry, 2) a clearly defined lead independent director role, 3) active committees and committee chairs, and 4) talented directors who are committed and independent-minded. At this time, the Board believes this governance structure is appropriate and best serves the interests of our shareholders.
To further strengthen our corporate governance, our independent directors annually select a Lead Director from the independent directors. Our Board believes that the Lead Director serves an important corporate governance function by providing separate leadership for the non-management and independent directors. In January 2021, the Board re-elected Christopher E. Fogal to serve as Lead Independent Director.
Non-Management Executive Sessions
In order to give a significant voice to our non-management directors, our Corporate Governance Guidelines provide for executive sessions of our non-management and independent directors. Our Board believes this is an important governance practice that enables the Board to discuss matters without management present.
Our non-management directors are given the opportunity to meet in executive session following each regularly scheduled Board meeting. Our independent directors meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Our Lead Independent Director presides at all executive sessions of the independent directors and non-management directors, and sets the agenda for such executive sessions. Any independent director may call an executive session of independent directors at any time. The independent directors met three times in executive session in 2020.
Management Succession Planning and Development
Our Board understands that a strong succession framework reduces Company risk and therefore ensures that appropriate attention is given to identify and develop talented leaders. Consequently, we have a robust management succession and development plan which is reviewed and updated annually. The Board maintains oversight responsibility for succession planning with respect to the position of CEO and monitors and advises management regarding succession planning for other executive officers. The Board’s goal is to have a long-term and continuing program for effective senior leadership development and succession. The Board also has short-term contingency plans in place for emergency and unexpected occurrences, such as the sudden departure, death, or disability of our CEO or other executive officers.
The CGC, working with the CEO, annually evaluates succession planning at the senior levels of management and reports the results of such evaluation to the Board, along with recommendations on management development and succession planning. The updated succession plan is reviewed and approved by the Board to ensure that competencies are in alignment with our strategic plan. The annual review of the CEO succession planning includes a review of specific individuals identified as active CEO succession candidates, and each of those individuals is reviewed with respect to progress in his or her current job position and progress toward meeting his or her defined leadership development plan. The Company’s CEO and senior management are similarly responsible for supporting “next generation” leadership development by: identifying core talent, skills and capabilities of future leaders within the Company; assessing the individuals against leadership capabilities; identifying talent and skill gaps and development needs; assisting with internal candidate development; and identifying significant external hiring needs.
The Board and individual Board members may advise, meet with and assist CEO succession candidates and become familiar with other senior and future leaders within the Company. Directors are encouraged to become sufficiently familiar with the Company’s executive officers to be able to provide perspective on the experience, capabilities and performance of potential CEO candidates. The Board encourages senior management, as well as other members of management who have future leadership potential within the Company, to attend and present at Board meetings so that each can be given appropriate exposure to the Board. The Board may contact and meet with any employee of the Company at any time, and are encouraged to make site visits, to meet with management, and to attend Company, industry and other events.
In 2020, the Board worked in collaboration with Mr. Hudson to orchestrate the planning and preparation for the transition to a new CEO in accordance with our carefully developed and methodical succession plan. As of January 1, 2021, Mr. Hudson became Executive Chairman of the Board of Directors and former Chief Operating Officer, Charles M. Shaffer, became President and Chief Executive Officer.
Committee Structure and Other Matters
Oversight is also provided through the extensive work of the Board’s committees – Audit Committee; Compensation and Governance Committee (“CGC”); Corporate Development Committee (“CDC”); and Enterprise Risk Management Committee (“ERMC”) – in key areas such as financial reporting, internal controls, compliance, corporate governance, succession planning, compensation programs, capital planning and risk management. The Audit Committee and the CGC consist entirely of independent, non-management directors.
In addition, at the end of each year, the Board and each of its committees review a schedule of agenda topics to be considered in the coming year. Each Board and committee member may raise subjects that are not on the agenda at any meeting and suggest items for inclusion in future agendas. The Company believes that the foregoing structure, policies, and practices, when combined with the Company’s other governance policies and procedures, provide appropriate opportunities for oversight, discussion, evaluation of decisions and direction from the Board of Directors.
The Board of Directors held four regular meetings and four special meetings during 2020. Each of the directors attended either in-person or virtually at least 75% of the total number of meetings of the Board of Directors and committees on which they served.
The Company encourages all of its directors to attend its shareholders’ meetings but understands that situations may arise that prevent such attendance. Seven of the 11 then-incumbent Directors attended the Company’s 2020 annual shareholders’ meeting by phone in light of travel restrictions and safety precautions amid COVID-19, and one Director attended in-person.
The Company’s Board of Directors has four standing permanent committees. These committees serve the same functions for the Company and the Bank. The current composition of each Company committee and the number of meetings held in 2020 are set forth in the table:
Board Committee Membership and 2020 Committee Meetings
| Director Name | Audit | Compensation & Governance | Corporate Development | Enterprise Risk Management |
| Dennis J. Arczynski (1) | ✔ | ✔ | ✔(2) | |
| Jacqueline L. Bradley (1) | ✔ | |||
| H. Gilbert Culbreth, Jr. (1) | ✔ | |||
| Julie H. Daum (1) | ✔ | |||
| Christopher E. Fogal (1)(3) | ✔ | |||
| Maryann Goebel (1) | ✔ | ✔ (2) | ✔ | |
| Dennis S. Hudson, III (4) | ✔ | |||
| Robert J. Lipstein (1) | ✔ (2) | ✔ | ||
| Herbert A. Lurie (1)(5) | ✔ | |||
| Alvaro J. Monserrat (1) | ✔ | ✔ | ✔ | |
| Thomas E. Rossin (1) | ✔(2) | ✔ | ||
| TOTAL MEETINGS HELD IN 2020 | 9 | 6 | 7 | 6 |
(1) Independent Director
(2) Committee Chair
(3) Lead Independent Director
(4) Executive Chairman of the Board
(5) Resignation effective as of January 11, 2021
Each committee has a charter specifying such committee’s responsibilities and duties. Each committee charter, including the Audit Committee and Compensation and Governance Committee charters, are reviewed annually. These charters are available on the Company’s website at www.SeacoastBanking.com or upon written request.
AuditKey Committee ReportResponsibilities
| AUDIT COMMITTEE | COMPENSATION AND GOVERNANCE COMMITTEE |
| Key Responsibilities | Key Responsibilities |
• reviews Seacoast’s financial statements and internal accounting controls, and reviews reports of regulatory authorities and controls, and reviews reports of regulatory authorities and determines that all audits and examinations required by law are performed • appoints the independent auditors, reviews their audit plan, and reviews with the independent auditors the results of the audit and management’s response thereto • reviews the procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and changes to the Company’s Code of Conduct, and approves related party transactions • reviews the adequacy of the internal audit budget and personnel, the internal audit plan and schedule, and results of audits performed by the internal audit staff and those outsourced to a third party; oversees the audit function and appraises the effectiveness of internal and external audit efforts | • determines the compensation of the Company’s and the Bank’s key executive officers • recommends director compensation for Board approval • administers the Company’s incentive compensation plans and other employee benefit plans • oversees the preparation of the “Compensation Discussion and Analysis” section of this proxy statement • identifies and recommends to the Board qualified individuals to serve as members of the Boards of Directors of the Company and/ or the Bank • oversees efforts to create a diverse workforce that fosters and supports an inclusive culture • takes a leadership role in shaping corporate governance policies, practices, and guidelines, and oversees the Board’s governance processes • proposes recommendations to the Board of Directors concerning management development and succession planning activities at the senior levels of management |
| Independence / Qualifications | Independence / Qualifications |
• all committee members are independent under Nasdaq and SEC rules and each member is able to read and understand financial statements • at least one committee member is an “audit committee financial expert” as defined by Item 407 of Regulation S K; the Board has determined that Christopher E. Fogal and Robert J. Lipstein are such financial experts • the Audit Committee met two times in private session with our independent auditor, and two times in private session without members of management present, following meetings in 2020 | • all committee members are independent under Nasdaq and SEC rules • no member of the committee is a former or current officer or employee of the company or any of its subsidiaries • no member has any interlocking relationship with the Company requiring disclosure under the rules of the SEC |
| ENTERPRISE RISK MANAGEMENT COMMITTEE | CORPORATE DEVELOPMENT COMMITTEE |
| Key Responsibilities | Key Responsibilities |
• monitors the risk framework to assist the Board in identifying, considering, and overseeing critical issues and opportunities • evaluates strategic opportunities from a risk perspective, highlights key risk considerations embedded in such strategic opportunities, and makes recommendations on courses of action to the Board based on such evaluation • provides oversight of the risk management monitoring and reporting functions to help ensure these functions are independent of business line or risk-taking processes • makes recommendations to the Board regarding the Company’s risk appetite, limits and policies and reviewing the strategic plan to help ensure it aligns with the Board-approved risk appetite • reviews key management, systems, processes and decisions, and assesses the integrity and adequacy of the risk management function to help build risk assessment data into critical business systems • recommends to the Board the capital policy consistent with the Company’s risk appetite and reviews capital adequacy and its allocation to each line of business | • supports, sources and/or challenges M&A activities related to banks and non-bank entities as pertinent to the Company’s stated strategic objectives • oversees business model transformation activities including investments in corporate development • reviews capital allocations and planning to ensure an acceptable return on capital while ensuring timely exits from businesses that do not provide an acceptable return or have limited growth prospects • reviews the Company’s long-term corporate development strategies and monitors progress tracking • makes inquiries of management that appropriate strategic metrics and modeling capabilities are used in order to assess the strength of existing strategies and potential investments, aligned with the Company’s stated strategic objectives • ensures that management is effectively and consistently communicating with shareholders in a manner that is aligned with the Company’s broader strategic vision |
The Audit Committee is currently comprised of four directors,five directors: Dennis J. Arczynski, Christopher E. Fogal, (Chair), DennisMaryann Goebel, Robert J. Arczynski Maryann Goebel,Lipstein (Chair) and Alvaro J. Monserrat.
The purpose of the Audit Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Seacoast Banking Corporation of Florida (the “Company”) in its general oversight of the Company’s accounting, auditing and financial reporting practices. Management is primarily responsible for the Company’s financial statements, systems of internal controls and compliance with applicable legal and regulatory requirements. The Company’s independent registered public accounting firm, Crowe Horwath LLP, for the year ended December 31, 20172020 is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States, as well as expressing an opinion (pursuant to Section 404 of the Sarbanes-Oxley Act of 2002) on the effectiveness of internal control over financial reporting.
The members of the Committee are not professional auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm, nor can the Committee certify that the Company’s registered public accounting firm is “independent” under applicable rules. The Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the basis of the information it receives, discussions with management and the independent registered public accounting firm, and the experience of the Committee’s members in business, financial and accounting matters. To carry out its responsibilities, the Committee held eightnine meetings in 2017.2020.
In the performance of its oversight responsibilities, the Committee has reviewed and discussed with management and Crowe Horwath LLP the audited financial statements of the Company for the year ended December 31, 2017.2020. Management represented to the Committee that all financial statements were prepared in accordance with accounting principles generally accepted in the United States and that these statements fairly present the financial condition and results of operations of the Company at the dates and for the periods described. The Committee has relied upon this representation without any independent verification, except for the work of Crowe Horwath LLP. The Committee also discussed these statements with Crowe Horwath LLP, both with and without management present, and has relied upon their reported opinion on these financial statements. The Committee’s review included discussion with Crowe Horwath LLP of the matters required to be discussed under Public Company Accounting Oversight Board standards.
With respect to the Company’s independent registered public accounting firm, the Committee, among other things, discussed with Crowe Horwath LLP matters relating to its independence and received from Crowe Horwath LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning independence.
On the basis of these reviews and discussions, and subject to the limitations of its role, the Committee recommended that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,2020, for filing with the Securities and Exchange Commission.
The Audit Committee:
Robert J. Lipstein, Chair
Dennis J. Arczynski
Christopher E. Fogal ChairmanDennis J. Arczynski
Maryann Goebel
Alvaro J. Monserrat
February 28, 201826, 2021
The tables below provide information regarding the beneficial ownership of our common stock as of the Record Date by:
As of the Record Date, 46,982,399 shares of common stock were outstanding. Beneficial ownership is determined in accordance with SEC rules and regulations.regulations as of the Record Date by (i) each of the Company’s directors, (ii) each of the executive officers named in the Summary Compensation Table, (iii) all current directors and executive officers as a group, and (iv) each beneficial owner of more than 5%. As of the Record Date, 55,295,596 shares of common stock were outstanding. Unless otherwise indicated, and subject to community property laws where applicable, the Company believes that each of the shareholders named in the tablestable below has sole voting and investment power with respect to the shares indicated as beneficially owned. Some
Director, Executive Officers and Certain Beneficial Stock Ownership
As of the Record Date, based on available information, all directors, director nominees and executive officers of Seacoast as a group (14 persons) beneficially owned approximately 1,198,712 outstanding shares of common stock, constituting 2.2% of the total number of shares of common stock outstanding at that date as set forth in the tables is based on information included in filings made bytable below. In addition, as of the beneficial owners withRecord Date, various subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting power over 219,256 outstanding shares, or 0.1% of the SEC.
Principal Shareholders (5% Owners Exclusiveoutstanding shares, of DirectorsSeacoast common stock, including shares held as trustee or agent of various Seacoast employee benefit and Officers)stock purchase plans.
The following table also sets forth information regarding the number and percentage of shares of common stock held by all persons and entities, or principal shareholders, known by the Company to beneficially own 5% or more of the Company’s outstanding common stock.stock, exclusive of directors and officers. The information regarding beneficial ownership of common stock by the entities identified below are included in reliance on reports filed by the entities with the SEC, except that the ownership percentage is based on the Company’s calculations.
| ||||
|
(1) According to a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) on March 8, 2018 with the SEC with respect to Seacoast common stock beneficially owned as of February 28, 2018, BlackRock, Inc. has sole voting power with respect to 6,073,777 shares of Seacoast common stock and sole dispositive power with respect to 6,156,934 shares of Seacoast common stock. The Schedule 13G/A provides that BlackRock is a parent holding company and that the shares of common stock listed on the Schedule 13G/A are owned by various subsidiaries of BlackRock. In addition, BlackRock reported that various persons have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock, and that no one person is known to have more than 5% of Seacoast common stock.
(2) According to a Schedule 13G filed jointly by T. Rowe Price Associates, Inc., (“Price Associates”) and T. Rowe Price Funds on February 14, 2018 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2017, T. Rowe Price Associates, Inc. has sole voting power with respect to 664,396 shares of Seacoast common stock and sole dispositive power with respect to 4,313,495 shares of Seacoast common stock. The Schedule 13G provides that Price Associates is an Investment Advisor and that the shares of common stock listed on the Schedule 13G are owned by various subsidiaries of Price Associates. In addition, Price Associates reported that in respect to securities owned by any one of the T. Rowe Funds, only the custodian has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock, and that no one person has shared voting and dispositive powers with respect to the following number of shares of Seacoast common stock.
Ownership of Directors and Executive Officers
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage | Amount and Nature of | Percentage of | ||||||
| Directors and Executive Officers | Beneficial Ownership | Outstanding Shares | ||||||||
| Dennis J. Arczynski | 46,332(1) | * | 54,087 (1) | * | ||||||
| Stephen E. Bohner | 55,965(2) | * | ||||||||
| Jacqueline L. Bradley | 18,467(3) | * | 28,800 (2) | * | ||||||
| H. Gilbert Culbreth, Jr. | 71,292(4) | * | 84,214 (3) | * | ||||||
| Julie H. Daum | 48,422(5) | * | 62,568 (4) | * | ||||||
| Christopher E. Fogal | 32,588(6) | * | 46,870 (5) | * | ||||||
| Maryann Goebel | 21,076(7) | * | 28,832 (6) | * | ||||||
| Roger O. Goldman | 250,430(8) | * | ||||||||
| Dennis S. Hudson, Jr. | 325,068(9) | * | ||||||||
| Dennis S. Hudson, III | 479,276(10) | 1.0% | 592,612 (7) | 1.1% | ||||||
| Timothy S. Huval | 2,768(11) | * | ||||||||
| Herbert A. Lurie | 30,226(12) | * | ||||||||
| Robert J. Lipstein | 12,423 (8) | * | ||||||||
| Alvaro J. Monserrat | 6,902(13) | * | 16,759 (9) | * | ||||||
| Thomas E. Rossin | 19,750(14) | * | 17,639 (10) | * | ||||||
| Charles K. Cross, Jr. | 70,015(15) | * | ||||||||
| David D. Houdeshell | 61,419(16) | * | ||||||||
| Charles M. Shaffer | 166,357 (11) | * | ||||||||
| Tracey L. Dexter | 8,409 (12) | * | ||||||||
| Joseph M. Forlenza | 16,209 (13) | * | ||||||||
| Juliette P. Kleffel | 14,179(17) | * | 62,933 (14) | * | ||||||
| Charles M. Shaffer | 60,089(18) | * | ||||||||
| All directors and executive officers as a group (18 persons) | 1,424,700 | 3.0% | ||||||||
| All directors and executive officers as a group (14 persons) | 1,198,712 | 2.2% | ||||||||
| Name of Beneficial Owner | Amount and Nature of | Percentage of | ||||||||
| Certain Other Beneficial Owners | Beneficial Ownership | Outstanding Shares | ||||||||
| BlackRock, Inc. | ||||||||||
| 55 East 52nd Street | 7,914,580 (15) | 14.3% | ||||||||
| New York, NY 10055 | ||||||||||
| T. Rowe Price Associates, Inc. | ||||||||||
| 100 E. Pratt Street | 5,169,288 (16) | 9.3% | ||||||||
| Baltimore, MD 21202 | ||||||||||
| Capital World Investors | ||||||||||
| 333 South Hope Street | 3,781,901 (17) | 6.9% | ||||||||
| Los Angeles, CA 90071 | ||||||||||
| The Vanguard Group | ||||||||||
| 100 Vanguard Boulevard | 3,361,372 (18) | 6.1% | ||||||||
| Malvern, PA 19355 | ||||||||||
* Less than 1%
| (1) | Includes 1,672 shares held in a limited liability company, as to which shares Mr. Arczynski has sole voting and investment power. Also includes 9,110 shares held jointly with his wife, as to which shares Mr. Arczynski may be deemed to share both voting and investment power. Also includes |
| (2) | Includes |
| Includes 10,000 shares held in an IRA, 26,000 shares held in a family limited liability company, and 8,200 shares held in a family sub-S corporation, as to which shares Mr. Culbreth has sole voting and investment power. Also includes 1,000 shares held jointly with Mr. Culbreth’s children and 10,328 shares held jointly with his wife, as to which shares Mr. Culbreth may be deemed to share both voting and investment power. Also includes |
| Includes |
| Includes 4,490 shares held jointly with Mr. Fogal’s wife and |
| Includes |
| Includes |
| power. Includes |
| Includes |
| Includes |
| Includes |
| Includes |
| Includes |
| Includes | ||
| (14) | Includes 35,966 shares that Ms. Kleffel has the right to acquire by exercising options that are exercisable within 60 days after the Record Date. |
| (16) | According to a Schedule 13G/A filed jointly by T. Rowe Price Associates, Inc., (“Price Associates”) and T. Rowe Price Funds on February 16, 2021 with | |
| (17) | According to a Schedule 13G filed by | |
| (18) | According to a Schedule 13G filed by The Vanguard Group on February 8, 2021 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2020, The Vanguard Group has shared sole dispositive power with respect to 3,270,011 shares of Seacoast common stock and 91,361 shares have shared dispositive voting power and 51,690 shares with shared voting power. The Schedule 13G provides that The Vanguard Group is an investment advisor and that the shares of common stock listed on the Schedule 13G are |
EXECUTIVE COMPENSATIONDelinquent Section 16(a) Reports
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. 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 2020, all filing requirements applicable to its directors, executive officers and beneficial owners of more than 10% of its common stock were complied with in a timely manner, except for:
The Form 4 for Dennis S. Hudson, III filed with the SEC on November 20, 2020 which reported the acquisition of 9,356 shares of common stock on November 6, 2020. The Company believes that the Form 4 filed on November 20, 2020 reflects Mr. Hudson’s current holdings.
COMPENSATION DISCUSSION & ANALYSIS
Named Executive SummaryOfficers
Named Executive Officers (“NEOs”) are appointed annually at the organizational meetings of the respective Boards of Directors of Seacoast and the Bank, to serve until the next annual meeting and until successors are chosen and qualified. In 2020, the Board appointed two new NEOs, Tracey L. Dexter and Joseph M. Forlenza. Mr. Hudson served as CEO until December 31, 2020. Mr. Shaffer served as President and COO in 2020 and became CEO on January 1, 2021.
Dennis S. Hudson, III Executive Chairman and former CEO | Age: 65 Education: MBA, Florida State University Tenure: 44 years SELECT PRIOR EXPERIENCE: ● Chairman of Seacoast since July 2005 ● Chairman and of the Bank since 1992 ● CEO of Seacoast from 1998 to 2020 and Bank from 1992 to 2020 ● Director of Seacoast since 1984 ● Over 40 years of banking experience with Seacoast OTHER AFFILIATIONS/CERTIFICATIONS: ● Chesapeake Utilities Corporation, member of board, audit and compensation committees ● PENN Capital Funds, a mutual fund group managed by PENN Capital Management, independent director ● Miami Branch of Federal Reserve Bank of Atlanta Board from 2005 to 2010 |
Charles M. Shaffer President and CEO | Age: 47 Education: MBA, University of Central Florida Tenure: 23 years SELECT PRIOR EXPERIENCE: ● CEO and Director of Seacoast since January 2021 ● President of Seacoast since June 2020 ● Held various executive roles of Seacoast and the Bank including EVP, Community Banking Executive, Chief Financial Officer and Chief Operating Officer and Controller from 2005 to 2020 ● Over 20 years of diverse experience from multiple roles including strategy, corporate finance, traditional sales, and alternative sales platforms OTHER AFFILIATIONS/CERTIFICATIONS: ● CPA licensed in Florida ● Board Member, United Way of Martin County ● Board Member, Florida Bankers Association, BancServ ● Board Member, Armellini Express Lines |
Tracey L. Dexter EVP, Chief Financial Officer | Age: 47 Education: B.S., Florida State University Tenure: 4 years SELECT PRIOR EXPERIENCE: ● SVP and Controller at Seacoast from January 2017 to June 2020 ● Senior Manager, Banking and Capital Markets Practice of PricewaterhouseCoopers ● Held various positions in audit and advisory roles ● Over 20 years of accounting and audit experience OTHER AFFILIATIONS/CERTIFICATIONS: ● CPA licensed in Florida ● Former Series-7 Registered Financial Advisor |
Joseph M. Forlenza EVP and Chief Risk Officer | Age: 59 Education: B.S., Pace University Tenure: 4 years SELECT PRIOR EXPERIENCE: ● EVP and Chief Audit Executive of Seacoast and Bank from January 2017 to April 2019 ● Managing Director and Chief Audit Executive of Treasury and Commercial Lending with GE Capital from 2015 to 2017 ● Served numerous roles, including Chief Audit Executive for broker-dealer and Audit Director covering capital markets, banking and risk management functions for over 15 years at Citigroup ● Various audit and consulting in financial services positions with Coopers & Lybrand ● Over 35 years of financial services, risk management, treasury, valuation, and internal audit experience OTHER AFFILIATIONS/CERTIFICATIONS: ● CPA licensed in New York ● Member of Risk Management Association |
Juliette P. Kleffel EVP, Chief Banking Officer | Age: 50 Education: The Stonier Graduate School of Banking Tenure: 6 years SELECT PRIOR EXPERIENCE: ● EVP and Community Banking Executive and Central Florida Market President at Seacoast to July 2020 ● EVP and Community Banking Executive at Seacoast from 2017 to 2020 ● EVP and Small Business Banking Sales Leader at Seacoast from October 2014 to January 2017 ● Held various positions managing Government Lending/SBA, Treasury Sales, Marketing, as well as Commercial Lending with BankFIRST from November 2000 to October 2014 until the merger into Seacoast ● Over 24 years of retail and business banking experience in the Orlando market OTHER AFFILIATIONS/CERTIFICATIONS: ● Executive Director and Vice President for The Gardens at DePugh Nursing Home ● Board Member and Finance Committee member for the Central Florida YMCA ● Board Member of Edgewood Children’s Ranch ● Lifetime Director for the West Orange County Chamber of Commerce ● Former Executive Director for the National Entrepreneur Center and the Garden Theatre |
2017Compensation Discussion & Analysis
2020 Performance Considerations
Our strategic plan for 2017 focused2020 continued to focus on shareholder value creation, and the CGC once again used adjusted EPS1average annual earnings per share (“EPS”) growth and average return on average tangible common equity (“ROATE”) as an indicatorkey indicators that management is on the right path.path to produce sustainable long-term value. EPS provides a direct link to value creation at the shareholder level, and ROATE provides a measure of risk- adjusted returns that illustrates the health of the Company. The CGC determined the amount of annual and long-term incentives to award to our named executive officers (“NEOs”) for 2017 performance2020 using a qualitative assessment of management’s performance.performance in 2020 and 2019, respectively, taking into account both growth and returns with consideration given to our risk framework. The assessment process included scorecards that identified shared and individual goals for the year with our adjusted EPS1 target of $1.28 serving as the primary consideration. Based on the CGC’s assessment of our adjusted EPS1 performance and in the areas of operations, technology, innovation, risk, talent, and business transformation, with our NEO’s received a rating of “exceeds” expectations. Theaverage annual EPS growth and average annual ROATE serving as the primary considerations for long-term incentive awards issued based on 2017 performance were granted in 2018.2020. Grants made in 20172020 were based on the scorecard assessment of performance in the prior year.
In 2020, our “Say on Pay” proposal received 99.5% support, in line with 99.7% in 2019; indicating plan design and governance are well aligned with our shareholders. While our historical results indicate strong support for Seacoast’s NEO compensation, the CGC continues to review our executive compensation structure to increase its effectiveness and further align with shareholder interests in light of changing industry dynamics.
Our Executive Compensation Design Priorities and Prohibitions
| Design Priorities (what we do) | Design Prohibitions (what we don’t do) |
✔ Ensure that incentives are sensitive to risk considerations.
| ûNo repricing of stock options without shareholder approval. ûNo incentives that encourage improper risk taking. ûNo excise tax gross-ups upon a change in control. ûNo single trigger vesting acceleration on unvested equity in connection with a change-in-control for awards granted since 2014. ûNo hedging, and limited pledging, of our common shares by our directors and executive officers. |
1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
| · | Cumulative base |
| · | In |
| · | In 2020, our NEOs received awards of Performance Share Units (“PSUs”) in quantities that vest based on the level of achievement of goals relating to average annual growth in |
| · | In |
| · | The number of PSUs |
Summary of Compensation Decisions in 20172020
The CGC structures the compensation program for executive management with an emphasis on long-term and short-term performance-based compensation. For planning purposes, the CGC focuses on the sum of annual base salary, short-term incentives and the values it considers and approves for cash bonuses and equity awards, which are granted in the subsequent year based on annual scorecard performance but granted in the subsequent year.performance. We refer to this planning value as Total Direct Compensation or “TDC”. The CGC considered this TDC in its decision process when determining the value of the total incentive award value to approvegranted in 2018 for 2017 performance.
2020. The following chart illustrates the relative emphasis of each pay element in relation to TDC, as disclosed in our 20172020 Summary Compensation Table (“SCT”). Base salary represents the sole component of TDC that is not “at risk” for performance.,
* Excludes Ms. Kleffel, whose 2020 equity awards consisted entirely of RSAs.
In general, the CGC typically structures NEO pay so that at least one-halfclosely aligns the compensation of our executives with the creation of both short-term profitability and long-term value for our shareholders by structuring a substantial portion of TDC is structured as “at risk” incentive pay. The CGC relies on this structure to ensure that both short-term and long-term incentive awards are fully reflective of performance for the year in which cash bonuses are earned and new target award values are determined, and that performance-based equity serves as our primary formthe key element of incentive compensation.
1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
All of our named-executivenamed executive officers receive a base salary that reflects the CGC’s assessment of the NEO’s skills and value to Seacoast. It is the CGC’s philosophy to keep salaries within a competitive market range and increase base salaries in response to increases in the size, scope or complexity of an executive’s job, in connection with a promotion or other forms of recognition that appropriately reflect value considerations, or to maintain the desired level of internal relative value. Mr. Hudson’s base salary remained unchanged for 2020. In 2020, Mr. Shaffer was promoted as President with additional responsibilities incorporated into his duties in addition to those as Chief Operating Officer (“COO”) of the Company. Ms. Kleffel also expanded the scope of her role with added responsibilities with her promotion of Chief Banking Officer (“CBO”)
in 2020. Additionally, Ms. Dexter was promoted to the Company’s Chief Financial Officer (“CFO”) in 2020, and Mr. Forlenza became a NEO with his role as Chief Risk Officer (“CRO”). The 20172020 annualized base salary actions for our named executive officers are summarized in the following table.
20172020 Annualized Base Salary Actions
| Named Executive Officer | 2019 | 2020 | % Change |
| Dennis S. Hudson, III | $600,000 | $600,000 | -- |
| Charles M. Shaffer | $450,000 | $500,000 | 11% |
| Tracey L. Dexter | -- | $330,000 | -- |
| Joseph M. Forlenza | -- | $325,000 | -- |
| Juliette P. Kleffel | $325,000 | $375,000 | 15% |
| Named Executive Officer | 2016 | 2017 | % Change | |||||||||
| Dennis S. Hudson, III | $ | 550,000 | $ | 600,000 | 9 | % | ||||||
| Charles K. Cross, Jr. | $ | 300,000 | $ | 300,000 | 0 | % | ||||||
| David D. Houdeshell | $ | 265,000 | $ | 280,000 | 6 | % | ||||||
| Charles M. Shaffer | $ | 300,000 | $ | 320,000 | 7 | % | ||||||
| Juliette P. Kleffel | — | $ | 280,000 | — | ||||||||
| NEOs as a Group | 6 | % | ||||||||||
Prior to 2019, Seacoast did not award annual cash incentives to its NEOs, rather choosing to grant additional time-vested stock awards in recognition of annual performance. Beginning in 2019, the bank transitioned to awarding cash bonuses, with initial year payout amounts determined at the discretion of the CGC and the CEO.
For 2020 short-term incentives, Seacoast established an objective annual incentive structure that includes both qualitative and quantitative components, reflecting the individual executive’s performance against pre-established individual goals as well as Company performance in 2020 relative to peer performance for pre-provision pre-tax return on assets, ratio of net charge-offs to total loans, and tangible common equity divided by tangible assets. Individual goals covered the implementation of specific qualitative goals related to managing the impact of the pandemic on the Company’s operations. These included implementing government programs such as the Paycheck Protection Program, implementing and executing a Pandemic Business Continuity Plan, sustaining ongoing operations, and implementing and executing appropriate robust credit riskprocesses and controls.
Seacoast’s equity strategy has evolveevolved in order to increase the alignment of equity recipients with shareholder interests, revitalizesupport our retention strategies, and elevate our visibility and appeal as an employer of choice for highly skilled talent. The following tables summarize the evolution and emphasis of our equity strategies since 2013.2018.
Evolution of Seacoast’s Performance-based Equity Strategies 2013-2017
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| Grant Cycle | Type of Equity | Performance Period / Payout Range / Option Vesting Period | Performance Objective(s) | ||
| · | Adjusted EPS | ||||
| PSUs | · | 3-year Performance Period | · | Adjusted Return on Average Tangible Common Equity | |
| 2018 | · | Payout as a % of Target (0-200%) | · | Tier 1 Capital Compliance | |
| (Apr.) | |||||
| · | 3-year ratable vesting | ||||
| Options | · | Exercise price set at 120% of grant date fair | · | Stock Price Appreciation above 120% of exercise price | |
| market value of the underlying shares | |||||
| · | 75% of 2019 LTI Award performance-based | ||||
| · | 3-year Performance Period (2019-2021), with | · | Relative Average Annual EPS Growth (50%) | ||
| PSUs | additional service required through the end of | · | Relative Average Annual ROATE (50%) | ||
| 2019 | 2022 | · | Tier 1 Capital Compliance | ||
| (Dec.) | · | Payout as a % of Target (0-225%) | |||
| · | 25% of 2019 LTI Award | · | Pay-for-performance as part of LTI in relation to | ||
| RSAs | · | 3-year retable vesting | overall performance in 2018 | ||
| · | 75% of 2020 LTI Award performance-based | ||||
| · | 3-year Performance Period (2020-2022), with | · | Relative Average Annual EPS Growth (50%) | ||
| PSUs | additional service required through the end of 2023 | · | Relative Average Annual ROATE (50%) | ||
| 2020 | · | Tier 1 Capital Compliance | |||
| (Apr.) | · | Payout as a % of Target (0-225%) | |||
| RSAs | · | 25% of 2020 LTI Award | · | Pay-for-performance as part of LTI in relation to | |
| · | 3-year retable vesting | overall performance in 2019 |
20172020 Performance Stock Unit (“PSU”) Awards
20172020 PSUs represent stock-settled incentive awards where payout can vary from 0% to 200%225% of the target number of shares granted. One-halfOne- half of the target number of sharesPSUs will be earned forbased on Seacoast’s three-year (2020-2022) average annual growth in adjusted EPS.EPS (“EPS PSUs”) relative to the Peer Group. The remaining one-half of the target number of sharesPSUs will be earned forbased on Seacoast’s three-year (2020-2022) average adjusted return on average tangible common equity. In each case, the earn-out of the PSUs will be determined by our performance as compared to financial goals that were approved by the CGC at the time of grant. PSUs that will be earned for adjusted EPS require escalating levels of double digit growth, starting at threshold. PSUs that will be earned for adjusted return on tangible common equity require that we exceed our cost of capital. The CGC selected EPS andannual return on average tangible common equity (“ROATE PSUs”) relative to the Peer Group. PSUs for which performance goals are met will vest on December 31, 2023, subject to the grantee’s continued service. The CGC selected EPS and ROATE given their importance in our strategic plan and significant influence on our stock price performance over sustained periods of time. In each case, the number of PSUs actually earned will be determined by our performance as compared to the median Peer Group performance as approved by the CGC at the time of grant, subject to an absolute performance payout cap. PSU payouts will be capped at 100% of the target number of shares granted in the event that certain absolute Company performance hurdles are not met, irrespective of performance relative to the Peer Group. The PSUs also include a risked-basedrisk-based condition (Tier(meet or exceed minimum requirements for Tier 1 Regulatory Capital) that must be met in order for the awards to vest.
2017 Performance Stock Options (“Options”)
Options allow recipients to purchase shares of our common stock in the future at a predetermined price. In order to ensure that shareholders benefit before management realizes any value from their stock option awards, 2017 options were issued with an exercise price set at 120% of the grant date fair market value of the underlying shares. Restrictions on the 2017 options lapse in equal installments on the first, second and third anniversaries of the grant date. The CGC relies on Options to reward management for value creation, which is of paramount importance to our shareholders. The target value of the options represents significantly less potential value than the PSU awards.
Time-Based Restricted Stock UnitsAwards (“RSU”RSA”)
Given our strongOur pay-for-performance orientation, we typically limitstock incentive strategy is balanced with the use of time-based RSUs for our top executives to offers of employment,RSAs to enhance holding power, (retention) of our stock incentive strategy, or in special situations that are evaluated on a case-by-case basis at the discretion of the CGC.retention and recruitment. The CGC granted RSUsRSAs to the NEOs other thanas part of the CEO, in lieu of annual cash bonuses.LTIP. The RSUsRSAs granted in 20172020 were issued in relation to 2016 performance. 2019 performance, and vest ratably over a three-year period.
Other Considerations Involving 2020 Equity Awards
The RSUs relatingcompensation structure is designed to 2017place greater emphasis on performance metrics in order to better align the award structure relative to peers. Based on the long-term incentive plan award structure, no stock options were granted in early 2018.
Other Considerations Involving 2017 Equity Awards
2020. Our NEOs are also subject to stock ownership requirements and holding periods in connection with stock-settled incentive awards. In addition, we introduced a mandatory deferral on PSUs starting with the 2017 grant cycle.
Overview of Executive Compensation
Determining Executive Compensation
Role of the CGC
The CGC is responsible for establishing our compensation philosophy and for overseeing our executive compensation policies and programs generally. As part of this responsibility, the CGC:
| · | regularly interacts with our executives in order to make informed decisions on performance, potential, developmental needs and their value to Seacoast; |
| · | approves our executive compensation programs, including construction of our peer group, issuance of equity awards, and certification of results; |
| · | evaluates the performance of the CEO and determines the CEO’s compensation; |
| · | reviews the performance of other members of executive management and |
| · | assesses our incentive strategies from a risk perspective, ensuring that earnings opportunities strike the right balance between risk and reward and that our executives are not motivated to take excessive risks. |
Role and Independence of the Compensation Consultant
The CGC is comprised solely of independent directors and met six times in 2017.2020. The Committee selected Compensation & Benefit Solutions, LLC, which was acquired byengaged Alvarez and Marsal, on November 1, 2017,LLC (“A&M”) as its independent compensation consultant to advise the CGC in 2017. Starting in March 2017, Compensation & Benefit Solutions, LLC2020. A&M periodically attended CGC meetings, including executive sessions, and provided information and advice independent of management and, at the direction of the CGC Chairperson, assisted management with various activities that support Seacoast’s executive compensation program. The CGC discussed these considerations pursuant to SEC and NASDAQ rules and concluded that the engagement of Compensation & Benefit Solutions, LLC, and subsequently Alvarez and Marsal,A&M, and the services it provided did not raise any conflict of interest.
In addition, in 2020 the CGC engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as special compensation consultants to advise the CGC on matters in connection with the CEO transition, which was effective in January 2021. FW Cook periodically attended CGC meetings and provided information and advice to the CGC with respect to the compensation of Mr. Hudson and Mr. Shaffer and Mr. Shaffer’s employment agreement. The CGC discussed these considerations pursuant to SEC and NASDAQ rules and concluded that the engagement of FW Cook, and the services it provided did not raise any conflict of interest.
Benchmarking and ComparatorPeer Group
The CGC relies on market pay data and related research to inform its decision on the construction and expected outcomes of our director and executive compensation programs. In considering peercomparator group construction, the CGC recognizes that Seacoast competes for executive talent against a wide variety of financial services organizations and companies in other industries that rely on or want to acquire the skill sets that our executives offer. As a result, the CGC relies substantially on information developed from a size-appropriate, high-performing core bank industry compensation peercomparator group in its decision process. It also considers, to a lesser extent, the pay strategies employed by large, most admired or innovative financial services companies, and high-performing customer service and technology companies. In terms of assessing the effect of the CGC’s decisions on how we position pay vis-à-vis market, we rely exclusively on pay and performance data developed using our core bank industry compensation peercomparator group or, as needed, from the McLagan Regional Bank Survey.
The CGC added five banks to the Core Bank Peer Group (“Peer Group”) in 2017. The addition of Flagstar Bancorp, Inc., First Midwest Bancorp, Inc., Trustmark Corporation, Northwest Bancshares, Inc., and S&T Bancorp, Inc. was necessitated by continuing consolidation in the industry, and by our growth that positioned Seacoast above the Peer Group’s median level of assets. The five banks were selected from the JD Powers’ List of Highest Rated Customer Service Banks, which reflected the CGC’s desire to incorporate an important performance dimension that is critical to our efforts to continue to growth the value of Seacoast. Other selection criteria that the CGC considered included type of ownership, focused solely on publicly traded company status, and size considerations, as defined by assets and the market value of equity. Seacoast was positioned at the median of asset size and market value of the 2017 Peer Group. The CGC sees this approach as appropriate given its expectations for performance and growth. Our 2017 Core Bank Peer Group was comprised of:
The CGC does not identify a specific target level or percentile of base salary, incentive cash, or stock-based awards for our NEOs. Instead, pay outcomes, which include the target value of stock awards to be earned for future performance, initially are determined by internal performance and talent considerations. The CGC then compares its initial thinking oncontemplated NEO pay actions against market pay levels. Marketlevels for reasonableness with the market assessments serveserving as key points of reference and validation in the CGC’s process.
In 2020, the CGC evaluated the peer group for determining relative performance (the “Peer Group”). To better align a relevant peer group mix, the Peer Group was selected from comparable publicly-traded banks, primarily southeast companies, with market caps between $1- $3 billion and total assets above $5 billion. This determination reflects the CGC’s desire to incorporate an important relative performance dimension that is critical to our efforts to continue to grow the value of Seacoast. The CGC sees this approach as appropriate given its expectations for performance and growth.
Executive Compensation Framework HighlightsThe CGC reviews the Peer Group annually to ensure continued appropriateness, and makes changes when it believes warranted. In 2020, the CGC removed two banks, South State Corporation and CenterState Bank Corporation, due to acquisition during the year, and added one bank, City Holding Company, to the prior year’s peer group. Our 2020 Peer Group was comprised of:
| FB Financial Corp.(FBK) | ServisFirst Bankshares (SFBS) | ||
| Atlantic Union Bankshares (AUB) | First BanCorp (FBNC) | Simmons First National (SFNC) | |
| BancFirst Corp. (BANF) | First Busey Corp (BUSE) | Tompkins Financial (TMP) | |
| BancorpSouth Bank (BXS) | Heritage Financial (HFWA) | TowneBank (TOWN) | |
| Brookline Bancorp (BRKL) | Pacific Premier Bancorp (PPBI) | Trustmark Corporation (TRMK) | |
| City Holding Co. (CHCO) | Renasant Corp. (RNST) | United Community (UCBI) | |
| Eagle Bancorp (EGBN) | S&T Bancorp, Inc. (STBA) | WesBanco Inc. (WSBC) | |
| Enterprise Financial (EFSC) | Sandy Spring Bancorp (SASR) | ||
Executive Compensation Framework Highlights
| Structure | Reasoning |
COMPENSATION COMPARATOR GROUP: A | Our business model requires us to compete with these groups for executive talent in order to achieve our business objectives related to growth, innovation and profitability. |
• No specific target level or percentile of pay relative to comparable positions
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• Improve pay for performance linkage
• Ensure reasonableness of pay relative to industry peers and market data • Ensure a significant portion of pay is “at-risk”, consistent with philosophy and comparator group practices • To understand potential payments assuming various Company performance outcomes and understand how potential performance extremes are reflected in pay, which is a component of our compensation risk assessment |
EQUITY: • Mix of time-based and performance-based structure with a long-term emphasis weighted more heavily toward PSUs (75%) • Meaningful stock-based award opportunities “right-sized” for company and individual performance considerations and needs • A substantial portion of TDC for our named executive officers delivered as performance-based pay • Annual award cycles • 3-year PSU performance period aligning program design with typical industry practices. A 50% mandatory 12-month deferral requirement on the settlement of any shares earned ensures sensitivity to risk considerations and additional holding power • Risk considerations serve as an additional vesting requirement on PSUs | • PSUs allow for upside in underlying shares, providing direct linkage between potential award payouts and management’s success at driving earnings growth and improving returns without inappropriate risk taking • RSAs provide a key retentive component to our overall compensation package whereby enhancing retention of the management team • Provide more compensation contingent upon achievement of performance goals or our stock’s performance • Aligns more closely with shareholder interests • Continuously recalibrate performance expectations and promote consistent improvement • Enhance long-term performance accountability • Provide executives with an economic incentive to deliver sustainable results within a risk appropriate framework |
PERFORMANCE SCORECARDS: • Performance scorecards serve as the basis for annual cash |
• Establish clear expectations for individual goals as well as link with enterprise-wide growth, return and risk management objectives
• To understand important context that may impact the evaluation of |
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2017 Executive Compensation Actions2020 EXECUTIVE COMPENSATION ACTIONS
Each yearThe CGC and our CEO rely on qualitative assessments of the CEO makes a qualitative assessmentperformance of NEO performanceour NEOs and other members of the senior management team given our accelerated growth, the rapid evolution of business, and the CGC makes a qualitative assessment of CEO performance.changing demands on our executives. The assessment process relies on scorecards that are approved at the start of each year, establishing performance guidelines against which results are compared at the end of the year. Performance ratings are then developed for each NEO, which are used to inform the CGC’s decision regarding pay actions. Despite refinements to various aspects of our executive compensation philosophy and the underlying strategies for 2017, the performance assessment process did not change.
The CGC and our CEO rely on qualitative assessments of the performance of our NEOs and other members of senior management team given our accelerated growth, the rapid evolution of business, and the changing demands on our executives. The CGC believes that qualitative assessments of NEO performance for the purpose of compensation, development and advancement continue to serve the best interests of our shareholders.
Our CEO works closely with the Compensation CommitteeCGC in establishing executive compensation and overall bonus and incentive payments.payments each year. The CEO evaluates the performance of theeach NEO and other senior executives, and, based on these performance evaluations, market compensation surveys, and other data, he will then make qualitative assessments and recommendations to the Compensation Committee and shares with its members the basis for his recommendations.CGC. The CEO also presents incentive compensation payment recommendations for the Committee’s consideration. The CommitteeCGC evaluates and makes a qualitative assessment of the CEO’s performance and determines his compensation without the CEO present.
The culmination of the CGC’s activitiesPerformance-based equity and time-based equity granted in regards2020 were issued based on 2019 performance scorecard evaluations. Equity awards relating to CEO and NEO2020 performance and pay are reflectedscorecard evaluations will be granted in the following tables.2021. Cash incentives were based on 2020 performance scorecard evaluations.
Compensation Paid to Chief Executive Officer in 20172020 Pay Outcomes
Dennis. S. Hudson, III, Chairman
| Dennis S. Hudson, III | Charles M. Shaffer | Tracey L. Dexter | Joseph M. Forlenza | Juliette P. Kleffel | |
| Executive Chairman | President & CEO | EVP & CFO | EVP & CRO | EVP & CBO | |
| & former CEO | |||||
| Base Salary(1) | $600,000 | $500,000 | $330,000 | $325,000 | $375,000 |
| Cash Incentive | $600,000 | $600,000 | $215,000 | $185,000 | $250,000 |
| RSA(2) | $200,000 | $82,500 | $31,250 | $56,250 | $350,000 |
| PSU(2) | $600,000 | $247,500 | $93,750 | $168,750 | – |
| (1) | Includes promotional increases for Mr. Shaffer’s promotion to President and COO and Ms. Dexter’s promotion to EVP and CFO on June 15, 2020. | |
| (2) | Grant date value; each executive officer received PSUs with the exception of Ms. Kleffel who received a stock award comprised entirely of RSAs. |
Key Influences in Compensation Decisions
The components of our executive compensation program demonstrate alignment with long-term shareholder value creation. The CGC considers performance metrics for both the CEO and each NEO, collectively. In 2019, the CGC evaluated performance metrics and made the following LTIP element changes: 1) the use of relative rather than absolute measures for performance metrics, 2) remove “premium” options, and 3) overall LTIP mix to 25% time-based RSAs and 75% performance-based PSUs split evenly between EPS and ROATE. One-half of the Boardperformance-based stock units (the “EPS Growth Units”) shall be eligible to vest based on the Company’s Average Annual EPS Growth for the three-year performance period, relative to the average ratio of the Peer Group, and Chief Executive Officerone-half of the performance-based stock units (the “ROATE Units”) shall be eligible to vest based on the Company’s Average Annual ROATE for the same performance period, relative to the average ratio of the Peer Group. PSUs for which performance goals are met will vest one year from the performance period, subject to the grantee’s continued service. In 2020, the CGC evaluated performance metrics and determined that the same LTIP elements were appropriate.
In 2020, senior executives were assessed on the following performance:
| Component | What it Measures | Why it is Used |
Average Annual EPS Growth | Earnings per share (EPS) is the portion of the Company’s profit allocated to each share of common stock. | A broadly used indicator of profitability, useful for tracking performance over time or in comparison to benchmarks. |
Average Annual ROATE | Net income as a percentage of average shareholders’ equity, excluding intangible assets. Adjustments are made to net income to facilitate analysis of performance trends. | A broadly used indicator of effective utilization of capital, useful for tracking performance over time or in comparison to benchmarks. |
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The CGC also considers roles and responsibilities of the CEO and each NEO and links most of the pay for senior executives to long-term business strategies and key priorities. Considerations for 2020 awards included the following items.
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| • | Maintain strong associate engagement and enterprise-wide alignment with the business strategy | |
| Smooth and successful transition to
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| Charles M. Shaffer, President and Chief Executive Officer |
1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Compensation Paid to Other Named Executive Officers in 2017
Charles M. Shaffer, Executive Vice President, Chief Financial Officer
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1 Non-GAAP measure; refer
Charles K. Cross, Jr., Executive Vice President, Commercial Banking
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1 Non-GAAP measure; refer
David D. Houdeshell,
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1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Juliette P. Kleffel, Executive Vice President, Community Banking
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1 Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.
Other Elements of the 20172020 Compensation Program for Executive Officers
Change in Control Severance Benefits
We provide change in control severance benefits to the named executive officers to encourage them to consider the best interests of shareholders by stabilizing any concerns about their own personal financial well-being in the face of a potential change in control of the Company. These agreements are described under “Employment and Change in Control Agreements”, and detailed information is provided under “2017“2020 Other Potential Post-Employment Payments.”
In the event that our NEOs qualify for change-in-control severance benefits, a portion of the payments they might receive are a function of highest paid bonus or average bonus paid for the three-year period preceding the year in which a change-in-control occurs.
In response to the unintended negative consequence created by granting equity awards in lieu of cash bonuses for 2016 and 2017 performance, the CGC determined that the severance would be calculated using the same bonus cash equivalent values that it relied on in determining the value of RSU awards.
Change-in-control severance benefits attributable to cash bonuses for Mr. Hudson reflect the highest value payment he receives during the three-years prior to a transaction. Change-in-control severance benefits attributable to cash bonuses for our other continuing NEOs reflect the value of average cash bonus they receive during the three-years prior to a transaction. A change-in-control and job loss must occur within a stated period of time before our executives will be eligible to receive change-in-control severance benefits.
Retirement and Employee Welfare Benefits
We sponsor a retirement savings plan for employees of the Company and its affiliates (the “Retirement Savings Plan”) and a nonqualified deferred compensation plan for certain executive officers (the “Executive Deferred Compensation Plan”). We offer these plans, and make contributions to them, to provide employees with tax-advantaged savings vehicles and to encourage them to save money for their retirement. The Executive Deferred Compensation Plan is described under “Executive Compensation–Nonqualified Deferred Compensation.”
In addition to our retirement programs, we provide employees with welfare benefits, including hospitalization, major medical, disability and group life insurance plans and paid vacation. We also maintain a Section 125 cafeteria plan that allows our employees to set aside pre-tax dollars to pay for certain benefits. All of the full-time employees of the Company and the Bank, including the named executive officers, are eligible to participate in the Retirement Savings Plan and our welfare plans, subject to the terms of those plans.
The Bank provides supplemental disability insurance to certain members of executive management, including the named executive officers, in excess of the maximum benefit of $10,000$15,000 per month provided under the group plan for all employees. The supplemental insurance provides a benefit up to 70% of the executive’s monthly pre-disability income based on the executive’s base salary and annual incentive compensation.compensation not to exceed $17,500. Coverage can be converted and maintained by the individual participant after employment ends. The benefit may be reduced by income from other sources, and a partial benefit is paid if a disabled participant is able to work on a part-time basis. In 2017,2020, the Company paid a totalan aggregate of $5,080$4,543 for supplemental disability insurance for the named executive officers.
The retirement and employee welfare benefits paid by the Company for the named executive officers that are required to be disclosed in this proxy statement are included below in the “Summary Compensation Table,” the “Components of All Other Compensation,” and the “Nonqualified Deferred Compensation Table,” and are described in the footnotes thereto.
We do not consider perquisites to be a significant element of our compensation program. However, we believe they are important and effective for attracting and retaining certain executive talent. We do not provide tax reimbursements, or “gross-ups,” on perquisites. For additional details regarding the executive perquisites, see below the “Summary Compensation Table” and the “Components of All Other Compensation.”
Risk Analysis of Incentive Compensation Plans
The CGC reviews the sensitivity of our performance and incentives to risk considerations for our executives throughout the year. It also periodically reviews our cash and equity incentive strategies for other key contributors. In 2017,2020, the CGC with the assistance of our Chief Human Resources Officer completed a review of our incentive strategies for our incentive eligible non-executive employees. The CGC concluded that our incentive compensation programs are designed with the appropriate balance of risk and reward in relation to our overall business strategy, and will not motivate people to take excessive or imprudent risks.risks, and do not create risks that are reasonably likely to have a material adverse effect on the Company.
Risk Analysis of Retail Sales Incentive Plans
During 2016, Seacoast launched a proactive review program of our retail sales incentive plans; this program includes ongoing monitoring for anomalies, review of complaints, and interviews with associates. Independent assessment is completed by the Bank’s Operational Risk Officer and results are reported to the Bank’s Operational Risk & Compliance Committee. Based on data gathered throughout the year, we believe Seacoast is acting in customers’ best interests and that Seacoast’s customer-first culture is sound. Seacoast empowers associates to do the right thing and to deliver our promise to customers to “get you comfortable with the right products and the right team to serve you.” At the same time, quality control and risk management are constant priorities. We have ongoing review processes to promptly identify areas that may be potentially inconsistent with our customer-first posture.
We have adopted a Compensation Recoupment Policy to recover to the extent practicable and appropriate, incentive compensation from any executive officer when:
The policy is available on our website at www.SeacoastBanking.com. The policy anticipates the final rules implementing the clawback provision of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, but will be amended, if necessary, when final regulations are issued by the SEC.
The Company has adopted a hedging and pledging policy. The policy prohibits our employees, including our executive officers and directors, from purchasing any financial instrument or entering into any transaction that is designed to hedge or offset any decrease in the market value of our stock, including, without limitation, exchange funds, prepaid variable forward contracts, equity swaps, puts, calls, collars, forwards or short sales.
In addition, directors and executive officers are required to obtain advance approval of any pledging of Company shares as collateral for loans, including holding Company shares in margin accounts. The policy also limits pledging to reasonable purposes (as defined in the policy) and limits the value of the securities pledged in connection with a loan or other indebtedness to $250,000.
The Board has established stock ownership guidelines for its officers and directors, as described below:
Individual/Group | Stock Ownership Target | Holding Requirement | |
| Before Ownership Target Met | After Ownership Target Met | ||
Chief Executive Officer | 5 times annual base salary | 75% of net shares until target number of shares is met | 50% of net shares held for one year after |
Other Senior Executive Officers | 3 times annual base salary | ||
Non-Employee Directors | 3 times annual retainer | ||
Our executive compensation program is designed to allow a participant to earn targeted ownership over a reasonable period, usually within five years, provided individual and Company targets are achieved and provided the participant fully participates in the program. “Net Shares”For purposes of these guidelines, “net shares” means shares of stock in excess of those sold or withheld to satisfy the minimum tax liability upon vesting or conversion. All of our named executive officers and non-employee directors have met or are on track to meet their stock ownership target.
Code Section 162(m) generally establishes, with certain exceptions, a $1 million deduction limit for all publicly held companies on compensation paid to an executive officer in any year. Prior to enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), this limitation did not generally apply to compensation paid to the chief financial officerChief Financial Officer or to compensation paid based on achievement of pre-established performance goals if certain requirements were met. The exemption from Section 162(m)’s deduction limit for CFO pay and performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to all of our named executive officersNEOs in excess of $1 million in 2018 and future years will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. The CGC reserves the right to pay executives’ compensation that is not deductible under Section 162(m).
Strategies to ensureEnsure that Incentive Compensation is Sensitive to Risk Considerations
Seacoast implemented a number of changes to our incentive strategies starting with the 2015in our equity award cycle.cycle over the last few years. These strategies have been updated in response to shareholder feedback and governance considerations. The CGC and our Chief Risk Officer share the view that our incentive strategies strike the right balance between risk and reward, motivating and retaining our executives in ways that align with shareholder interests but do not motivate inappropriate or excessive risk taking. The evolution of our incentive strategies reflect our commitment to listen to our shareholders and continuously refine our programs to align with our governance and risk management efforts given the growth of Seacoast and changes within the industry and what is deemed as best practice. Specifically:
| H. Gilbert Culbreth, Jr. | Age: | |
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
| · Company since 2008 | · Bank Credit Risk |  | |
| · Bank since 2006 | · Compensation & Governance | ||
Director Since: 2008
Bank Director Since: 2006
Committees:
§Compensation and Governance (Chair)
§Bank’s Directors Credit Risk
Mr. Culbreth has been chief executive officer and owner of Gilbert Chevrolet Company, Inc., a car dealership located in Okeechobee, Florida, for over 40 years. He also owns and manages Gilbert Ford car dealership in Okeechobee, Florida. Mr. Culbreth was previously a member of Big Lake Financial Corporation’s (“Big Lake”) board of directors for 10 years prior to the acquisition of Big Lake by Seacoast in 2006, and has served on the Bank’s board of directors since the acquisition. In addition, Mr. Culbreth is president of several other family businesses, including: Culbreth Realty, Inc. (a real estate brokerage company), Parrott Investments, Inc. (a holding company for two other businesses), Gilbert Cattle Co., LLC (a cattle operation), Grace Marine (a watercraft sales company), Gilbert Aviation Inc. (an aircraft sales and service company), Gilbert Oil Company, LLC and Gilbert Trucking, Inc. Mr. Culbreth is a former director of the Florida Council on Economic Education, the Okeechobee County Board of Realtors, the Okeechobee Economic Council, and the United Way of Okeechobee and is a member of the Masonic Lodge.
Key Qualifications
 | Christopher E. Fogal | Age: 69 | |
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
 | |||
| · Audit | |||
Mr. Fogal is a certified public accountant and a partner with the public accounting firm of Carr, Riggs & Ingram, LLC (“Carr Riggs”), a top 25 firm that is the second largest super-regional in the southeastern U.S. He was previously a principal with the public accounting firm of Proctor, Crook, Crowder & Fogal, P.A. (“Proctor Crook”), a BDO affiliate firm, located in Stuart, Florida, from 2009 to January 31, 2017 when the firm merged with Carr Riggs. Mr. Fogal was the managing partner of Fogal & Associates from 1979 until the firm merged with Proctor Crook in 2009. He also served on the board of directors of Port St. Lucie National Bank until it was acquired by Seacoast in 1996. Currently, Mr. Fogal is treasurer of the St. Lucie County Economic Development Council. He has also served as past chairman of the Treasure Coast Private Industry Council and past president of the St. Lucie County Chamber of Commerce, and is active in a number of professional organizations including the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants.
 | Charles M. Shaffer | Age: 47 | |
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
| · Company since 2021 · Bank since 2021 | · To be determined |  | |
Mr. Shaffer was appointed President and Chief Executive Officer and a member of the Board of Directors of the Company and Bank on January 1, 2021. Mr. Shaffer previously served as Chief Operating Officer since May 2019. He also served as Executive Vice President and Chief Financial Officer from January 2017 to May 2019. Prior to that, he led the Community Banking Group since October 2013 and held other various positions in the Company, including Controller.
Mr. Shaffer is actively involved in the community, serving on the board of directors of Armellini Express Lines, a private logistics company headquartered in Palm City, FL, as well as, BancServ of Florida Bankers Association and United Way of Martin County. Mr. Shaffer is a graduate of the University of Central Florida with a Master’s degree in Business Administration with a specialization in finance, Florida State University with a Bachelor’s degree in Finance, Florida Atlantic University with a Bachelor’s degree in Accounting and is graduate of the Advanced Management Program at the University of Pennsylvania’s Wharton School of Business. He is a Certified Public Accountant licensed in the State of Florida.
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Director Terms Extended Beyond the Annual Meeting
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 | Dennis J. Arczynski | Age:
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| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
| · Company since 2013
| · Bank Credit Risk (Chair) · Risk Management (Chair)
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Mr. Arczynski has been a risk management, corporate governance, regulatory affairs and banking consultant since 2007. He previously served for 33 years in various managerial and examiner positions in the U.S. Office of the Comptroller of the Currency’s (the “OCC”) headquarters in Washington, D.C. and in several other OCC districts until 2007. As a National Bank Examiner with the OCC, Mr. Arczynski was responsible for the supervision and examination of the largest and most complex mid-size banks, community banks and trust companies; provided guidance to banks in all facets of commercial banking and fiduciary operations including international activities; performed risk assessment and conducted BSA/AML reviews and examinations of internationally active banks; and developed formal enforcement actions and corrective action plans for struggling and deficient institutions. Mr. Arczynski’s other positions of responsibility with the OCC were Assistant Director for Trust Operations, Special Assistant to the Senior Deputy Comptroller (FFIEC Liaison), Associate Director for Financial Management (Financial Systems and Review) and Field Office Manager (Miami Field Office). His duties included the formation of national policies and programs, development of OCC supervisory initiatives, establishment of interagency relations, drafting regulations and writing OCC examiner handbooks. Mr. Arczynski received his Bachelor’s degree from the University of Maryland in Finance and his Master’s degree from the Johns Hopkins University.
Key Qualifications
 | Maryann Goebel | Age: 70 | |
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
| · Compensation & Governance (Chair) · Risk Management |  | |
Ms. Goebel has been an independent IT management consultant since 2012. She was executive vice president and chief information officer of Fiserv, Inc. (NASDAQ: FISV) from 2009 to 2012. In this role, she was responsible for all internal Fiserv IT systems (infrastructure and applications), as well as IT infrastructure, operations, engineering and middleware services. In her 40+ year career, Ms. Goebel has shaped the strategic direction of information technology for major corporations around the world, serving in the critical role of chief information officer for: DHL Express from 2006 to 2009; General Motors North America from 2003 to 2006; Frito-Lay from 2001 to 2002; General Motors Europe from 1999 to 2001; General Motors Truck Group from 1997 to 1999; and Bell Atlantic NYNEX Mobile (now Verizon Mobile) from 1995 to 1997. She has also held senior IT leadership positions at Texas Instruments, Inc., Aérospatiale Helicopter Corporation, and the Southland Corporation, among others.
Ms. Goebel serves as an Independent Director of Repay Holdings Corporation (ticker: RPAY), a leading provider of vertically-integrated payment solutions headquartered in Atlanta, Georgia (formerly Repay Holdings, LLC, a subsidiary of Hawk Parent Holdings, LLC, and acquired by Thunder Bridge, together forming the combined public company Repay Holdings Corporation in July 2019), where she serves as the Chair of the Technology Committee and member of the Audit Committee.
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Dennis S. Hudson, III | |||
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & | |
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| · Bank Credit Risk · Corporate Development |  |
Mr. Hudson was named Chairman of Seacoast in July 2005, and Executive Chairman in January 2021. Mr. Hudson served as Chief Executive Officer of the Company from June 1998 to January 2021. Mr. Hudson also served as Chairman and Chief Executive Officer of the Bank from 1992 to January 2021. He was President of Seacoast from June 1998 to July 2005, after serving in various positions with the Company and the Bank since 1978.
Mr. Hudson also serves on the board of directors, the audit committee and the compensation committee of Chesapeake Utilities Corporation (ticker: CPK), a public gas and electric utilities company headquartered in Dover, Delaware. In November 2015, Mr. Hudson was appointed as an independent director to PENN Capital Funds, a mutual fund group managed by PENN Capital Management. Mr. Hudson also serves on the Board of Seacoast from June 1998 to July 2005, after serving in various positions with the Company and the Bank since 1978.
Mr. Hudson also serves on the board of directors, the audit committee and the compensation committee of Chesapeake Utilities Corporation (ticker: CPK), a public gas and electric utilities company headquartered in Dover, Delaware. In November 2015, Mr. Hudson was appointed as an independent director to PENN Capital Funds, a mutual fund group managed by PENN Capital Management. Mr. Hudson also serves on the board of Martin Health System and the Community Foundation for Palm Beach and Martin counties. From 2005 through 2010, he also served as a member of the board of directors of the Miami Branch of the Federal Reserve Bank of Atlanta.
Mr. Hudson is actively involved in the community, having served on the boards of the Martin County YMCA Foundation, Council on Aging, The Pine School, the Job Training Center, American Heart Association, Martin County United Way, the Historical Society of Martin County and as chairman of the board of directors of the Miami Branch of the Federal Reserve Bank of Atlanta.
Mr. Hudson is actively involved in the community, having served on the boards of the Martin County YMCA Foundation, Council on Aging, The Pine School, the Job Training Center, American Heart Association, Martin County United Way, the Historical Society of Martin County, and Martin Health System, as well as Chairman of the Board of the Economic Council of Martin County. He has been recognized for his achievements with several awards including the Florida Senate Medallion of Excellence Award presented by Florida Senator Ken Pruitt in 2001. Mr. Hudson is a graduate of Florida State University with a Bachelor’s degree in Finance, and a Master’s degree in Business Administration.
Key Qualifications
 | Robert J. Lipstein | Age: 65 | |
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
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Mr. Lipstein is a certified public accountant and has over 40 years of diversified experience in various business roles, including leadership in audit, corporate governance, information technology, and enterprise risk management. Mr. Lipstein currently chairs Seacoast’s Audit Committee and is a member of the Enterprise Risk Management Committee. He is also a retired KPMG senior partner where he held numerous leadership roles including, Global Partner in Charge of Sarbanes Oxley Services, Global Partner in Charge of IT Business Services, Partner in Charge of KPMG’s financial service practice and partner in charge of KPMG’s advisory practice for the Mid-Atlantic region.
Mr. Lipstein has multiple public company and private company board experiences. He currently serves as a board member of CrossCountry Consulting, a privately-held consulting firm that focuses on corporate advisory services and Cloud Pricing Services, a start-up venture providing visibility into IT Infrastructure costs and utilization to enable optimization of bare metal and cloud based servers. In addition, he is board member of Einstein Healthcare Network, an academic medical center offering full service medical, surgical, and rehabilitation services where he serves as the chair of the Audit Committee and is a member of the Finance and IT Committees. Mr. Lipstein previously served as an independent board member of Ocwen Financial (ticker: OCN), a provider of residential and commercial mortgage loan servicing headquartered in Mount Laurel, New Jersey, where he was as a member of the Audit Committee and Compensation Committee from 2017 to 2020.
He is a graduate of the University of Pennsylvania Director Institute, an Emeritus member of the Weinberg Center for Corporate Governance and he earned a Bachelor’s degree in Accounting from the University of Delaware. |
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 | Alvaro J. Monserrat | Age:
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| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
| · Company since 2017
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· Corporate Development |
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Mr. Monserrat is an independent board member and advisor to CEOs of technology start-up companies. Mr. Monserrat’s career spans more than 25 years in large enterprises and entrepreneurial ventures within enterprise software, mobility, cloud, networking and business strategy. His areas of expertise include go-to-market, product and human capital strategy. Most recently, Mr. Monserrat was the Chief Revenue Officer of ACI Worldwide, Inc. (ticker: ACIW), a global software company that provides mission-critical real-time payment solutions to corporations. Prior to ACI, Mr. Monserrat served as the Executive Vice President and General Manager at Nuance Imaging, a subsidiary of Nuance Communications, Inc. (ticker: NUAN), a leading provider of voice and language solutions for business and consumers from January 2018 to February 2019. Mr. Monserrat joined Nuance after serving as Chief Executive Officer at RES Software, a leading digital workspace technology company from 2015 until the company was acquired by Invanti in 2017. He also served as Citrix Systems’ Senior Vice President of Worldwide Sales & Service from 2008 to 2015. At Citrix, Monserrat was part of the executive leadership team that grew the company from hundreds of millions to more than $3B in revenue by 2014, and was instrumental in crafting the strategy that helped Citrix grow from a single-product company, to a multi-product industry leader. Prior to joining Citrix, Mr. Monserrat served as Senior Director at Innovex Group (acquired by Citrix), and received numerous awards including Microsoft’s Best E-Commerce Solution and Best Small Business Solution Awards.
Mr. Monserrat serves as Chairman of the Board at itopia, served as Director at RES Software from 2015 to 2017 and as Director at Auxis LLC from 2016 to 2017. He also served on the board of advisors for Virsto and Whiptail from 2010 to 2013, on the national partner board for the Leukemia and Lymphoma Society from 2008 to 2009, and on the board of the Children’s Harbor Society. Mr. Monserrat holds a Master’s degree of business administration from the University of Texas at Austin and a Bachelor’s degree in computer science from the University of Miami.
Key Qualifications
 | Thomas E. Rossin | Age: 87 | |
| TENURE: | BOARD COMMITTEES: | QUALIFICATIONS & EXPERIENCE: | |
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Mr. Rossin is a retired attorney in West Palm Beach, Florida, previously serving as management chairman with the firm of St. John, Rossin & Burr, PLLC from 1993 to 2016. He served as a Florida State Senator from 1994 to 2002, the last two years as minority leader, and was a candidate for Florida Lt. Governor in 2002. Mr. Rossin founded Flagler National Bank in 1974, serving as president, chief executive officer and director and growing it to the largest independent bank in Palm Beach County with over $1 billion in assets. Forming The Flagler Bank Corporation, the holding company for Flagler National Bank, in 1983 and serving as president, chief executive officer and director, he took it public in 1984 and facilitated the acquisition of three financial institutions, until both Flagler National Bank and the holding company were sold in 1993 to SunTrust Bank. Prior thereto, Mr. Rossin was vice chairman and director of First Bancshares of Florida, Inc. after consolidating four banks under one charter, including First National Bank in Riviera Beach at which he served as president and chief executive officer. He has served as past president of the Community Bankers Association of Florida and Palm Beach County Bankers Association, and is currently a member of the Florida Bar Association. In March 2014, Mr. Rossin received the Exemplary Elected Official Award from the Forum Club of the Palm Beaches.
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DIRECTOR COMPENSATIONDirector Compensation
Decisions regarding our non-employee director compensation program are approved by our full board of directors based on recommendations from the CGC. In making its recommendations, the CGC considers the director compensation practices of peer companies and whether such recommendations align with the interests of our shareholders with respect to total compensation and each element thereof.thereof based on a peer group study conducted by the Company’s compensation consultant. Our compensation program for non-employee directors is designed to:
| · | appropriately compensate directors for the work required at a company of Seacoast’s size, growth, and dynamic and evolving business model; |
| · | align directors’ interests with the long-term interests of Seacoast’s shareholders; and |
| · | make meaningful adjustments every few years, rather than small annual adjustments. |
Non-Employee Director Compensation Structure
| Annual Retainer paid to All Non-employee Directors of the Company or the Bank: | ||||
| Cash(1) | $ | 37,500 | ||
| Stock Award(2) | $ | 37,500 | ||
| Annual Committee Chair Retainer for CGC and Bank Committees | $ | 10,000 | ||
| Annual Committee Chair Retainer for Audit & ERMC Committees | $ | 15,000 | ||
| Annual Committee Chair Retainer for S&I Committee | $ | 25,000 | ||
| Annual Retainer paid to all Non-employee Directors of the Company: | |
| Cash (1) | |
| Stock Award (2) | |
| Annual Committee Chair Retainer for all | $25,000 |
(1) A number of directors have elected to receive all or a portion of their cash retainer in stock or stock options as described below.
(2) Granted under the 2013 Incentive Plan following election or re-election at each annual meeting of shareholders.
All cash retainers are paid in quarterly installments. To further align directors’ interests with long-term shareholder interests, directors may elect to receive: 1) all or a portion of their annual cash retainer in Company common stock, and 2) up to a maximum of 30% of their annual cash retainer in the form of non-qualified options to purchase shares of Company common stock. Retainers are pro-rated for directors who join or leave the Board or have a change in Board role during a quarterly period.
Non-employee directors are also reimbursed for their travel, lodging and related expenses incurred in connection with attending Board, committee and shareholders meetings and other designated Company events. Executive officers who are also directors do not receive any compensation for services provided as a director.
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. In 2020, Mr. Goldman’s compensation reflects the additional time commitment for this role compared to other non-employee directors, the enhanced credibility with the investment community his affiliation with Seacoast provides the Company, and the improved performance and effectiveness of the Board under his leadership. His significant role is more fully described under the section entitled “Board Leadership Structure”.
On March 1, 2014, the Company entered into a three-year agreement with Lead Independent Director Goldman which automatically renews for successive three-year terms on the first day of each month following the effective date. Under the agreement, Lead Independent Director Goldman receivesFogal received 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 $20,000 annual housing allowance, is provided with office space in a Company-owned facility, and is reimbursed for company-related travel expenses, reasonable customer or staff entertainment expenses and extraordinary use of his office staff.
Director Stock Ownership Policy
To align the interests of our directors and shareholders, our Board of Directors believes that directors should hold a significant financial stake in Seacoast. Consequently, our Corporate Governance Guidelines require that directors own Seacoast stock equal in value to a minimum of three times their base annual retainer within four years of joining the Board. Each director must retain 75% of their shares until reaching the minimum share ownership requirement, and after the ownership target is met, must retain at least 50% of the shares for one year. All of our directors own more than the minimum stock requirement, except for two of our newest directors who have been on the Board for three years or less, and are on track to be compliant with our policy within the prescribed time frame.
The table below sets forth the total compensation paid to Board members who are not employees of the Company or the Bank for fiscal year 2017.2020.
2017 DIRECTOR COMPENSATION TABLE2020 Director Compensation Table
| Fees Earned | All Other | ||||||||||||||||||||||||
| or Paid in Cash | Stock Awards | Option Awards | Compensation | Total | |||||||||||||||||||||
Director | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other ($) | Total ($) | ($)(1) | ($)(2) | ($)(3) | ($) | ||||||||||||||||
| Dennis J. Arczynski | 52,500 | (3)(4) | 37,507 | — | — | 90,007 | 87,500(4) | 62,512 | -- | 150,012 | |||||||||||||||
| Stephen E. Bohner | 47,500 | (3)(5) | 37,507 | — | — | 85,007 | |||||||||||||||||||
| Jacqueline L. Bradley | 47,500 | (3)(6) | 37,507 | — | — | 85,007 | 62,500(4) | 62,512 | -- | 125,012 | |||||||||||||||
| H. Gilbert Culbreth, Jr. | 47,500 | (8) | 37,507 | — | — | 85,007 | 37,500(7) | 62,512 | -- | 100,012 | |||||||||||||||
| Julie H. Daum | 37,500 | (3)(7) | 37,507 | — | — | 75,007 | 37,500(7) | 62,512 | -- | 100,012 | |||||||||||||||
| Christopher E. Fogal | 52,500 | (3)(9) | 37,507 | — | — | 90,007 | 62,500(5) | 62,512 | -- | 125,012 | |||||||||||||||
| Maryann Goebel | 37,500 | (3) | 37,507 | — | — | 75,007 | 62,500(4) | 62,512 | -- | 125,012 | |||||||||||||||
| 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 | |||||||||||||||||||
| Robert J. Lipstein | 62,500(4) | 62,512 | 125,012 | ||||||||||||||||||||||
| Herbert A. Lurie (6) | 37,500(6)(7) | 62,512 | -- | 100,012 | |||||||||||||||||||||
| Alvaro J. Monserrat | 37,500 | (3)(7) | 37,507 | — | — | 75,007 | 37,500 | 62,512 | -- | 100,012 | |||||||||||||||
| Thomas E. Rossin | 62,500 | (12) | 37,507 | — | — | 100,007 | 62,500(4) | 62,512 | -- | 125,012 | |||||||||||||||
| (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 |
| (2) | A breakdown of the stock awards made to each director in |
| (3) |
| (4) | Includes |
| (5) | Includes |
| (6) |
| (7) | The table below shows the cash amounts that the directors deferred into the Directors’ Deferred Compensation Plan (“DDCP”) described below in |
| Shares held in DDCP | ||||||||||||||||||||
| Cash Deferred into DDCP | Stock Account as of | Shares held in DDCP | ||||||||||||||||||
| Stock Account in 2020 | Record Date | Equity Deferral Account | Total Shares held in DDCP | |||||||||||||||||
| Director | Cash Deferred into DDCP Stock Account in 2017 ($) | Shares held in DDCP Stock Account as of Record Date (#) | Shares held in DDCP Equity Deferral Account (#) | Total Shares (#) | ($) | (#) | ||||||||||||||
| Dennis J. Arczynski | — | 16,178 | 9,811 | 25,989 | -- | 16,177 | 17,567 | 33,744 | ||||||||||||
| Stephen E. Bohner | — | 11,483 | 9,811 | 21,294 | ||||||||||||||||
| Jacqueline L. Bradley | — | — | 7,046 | 7,046 | -- | 14,802 | ||||||||||||||
| H. Gilbert Culbreth, Jr. | $ | 26,250 | 2,139 | 9,811 | 11,950 | 37,500 | 7,305 | 17,567 | 24,872 | |||||||||||
| Julie H. Daum | $ | 26,250 | 5,630 | 9,811 | 15,441 | 37,500 | 9,444 | 17,567 | 27,011 | |||||||||||
| Christopher E. Fogal | — | 627 | 9,811 | 10,438 | -- | 626 | 17,567 | 18,193 | ||||||||||||
| Maryann Goebel | — | — | 9,515 | 9,515 | -- | 17,271 | ||||||||||||||
| 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 | ||||||||||||||||
| Robert J. Lipstein | -- | |||||||||||||||||||
| Herbert A. Lurie | $ | 26,250 | 2,565 | 3,275 | 5,840 | 37,500 | -- | |||||||||||||
| Alvaro J. Monserrat | — | 247 | 1,513 | 1,760 | -- | 917 | 9,269 | 10,186 | ||||||||||||
| Thomas E. Rossin | — | — | 9,811 | 9,811 | -- | 17,567 | ||||||||||||||
stock awardsStock Awards & Options GRANTed to directors in 2017Granted To Directors In 2020
The following table sets forth certain information concerning stock awards and options granted to directors during 2017.2020. As of December 31, 2017,2020, 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.fully vested.
| Option Awards: | Exercise or Base | Grant Date Fair | |||||||||||||||||||||
| Number of Securities | Price of Option | Value of Stock and | |||||||||||||||||||||
| Stock Awards(1) | Underlying Options | Awards | Option Awards(2) | ||||||||||||||||||||
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 | (#) | ($/Sh) | ($) | ||||||||||||||
| Dennis J. Arczynski | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 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 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| H. Gilbert Culbreth, Jr. | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Julie H. Daum | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Christopher E. Fogal | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Maryann Goebel | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Roger O. Goldman | 10/24/2017 | 1,513 | — | — | $ | 37,507 | |||||||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Dennis S. Hudson, Jr. | 10/24/2017 | 1,513 | — | — | $ | 37,507 | |||||||||||||||||
| Timothy S. Huval | 10/24/2017 | 1,513 | — | — | $ | 37,507 | |||||||||||||||||
| Robert J. Lipstein | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||||||||
| Herbert A. Lurie | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Alvaro J. Monserrat | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| 2/6/2017 | — | 2,142 | 22.65 | 11,246 | |||||||||||||||||||
| Thomas E. Rossin | 10/24/2017 | 1,513 | — | — | $ | 37,507 | 7/31/2020 | 3,311 | -- | 62,512 | |||||||||||||
| (1) | All of the shares were deferred into the Company’s Directors’ Deferred Compensation Plan described |
| (2) |
| Represents the aggregate grant date fair value as of the respective grant date for each award, calculated in accordance with FASB ASC Topic 718. The assumptions made in valuing stock awards reported in this column are discussed in Note |
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 or her 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.
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
APPROVAL AND ADOPTION OF SEACOAST’S 2021 INCENTIVE PLAN
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.
AMEND THE COMPANY’S 2013 INCENTIVE PLAN
TO INCREASE AUTHORIZED SHARES
We are asking our shareholders to approve an amendment toand adopt the Seacoast Banking Corporation of Florida 2021 Incentive Plan (the “2021 Plan”). The Company currently maintains the 2013 Incentive Plan (the “2013 Plan”). Our 2013 Plan is, which provides for the only plan under which equity-based compensation may currently be awardedgrant of awards or options to our executive officerspurchase shares of the Company’s common stock to key employees, directors, consultants and employees.advisors of the Company and its subsidiaries. As of the Record Date,record date, there were 584,167591,108 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, consultants and consultants,advisors, 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,March 30, 2021, the Board of Directors adopted, subject to shareholder approval at the Annual Meeting, an amendment to add 1,250,000 shares toSeacoast’s 2021 Plan. If shareholders approve the 2013 Plan. The share increase is the only change to2021 Plan, no further awards shall be granted under the 2013 Plan a summary of which is provided below.and the 2013 Plan shall remain in effect only so long as awards granted thereunder shall remain outstanding.
If the amendment toadoption of the 20132021 Plan is approved by our shareholders at the Annual Meeting, it will become effective on the date of the Annual Meeting. If the amendment2021 Plan is not approved by our shareholders, then the 2013 Plan will remain in effect as it presently exists. The Company has reserved 2,250,000 shares of the authorized but unissued shares of common stock for issuance upon the grant or exercise of awards pursuant to the 2021 Plan.
BackgroundSummary of the 2021 Plan
A summary of the 2021 Plan is set forth below. The summary is qualified in its entirety by reference to the full text of the 2021 Plan, which is included as Appendix B to this Proxy Statement.
The 2021 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 exercise price of a stock option or SAR may not be reduced, directly or indirectly, without the prior approval of shareholders, including the exchange for cash or another award or by a cash repurchase of “underwater” awards. |
| · | 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. |
| · | No Single-Trigger Change of Control Vesting. If awards granted under the 2021 Plan are assumed by the successor entity in connection with a change of control of the Company, such awards will not automatically vest and pay out upon the change of control. |
The purpose of the 2021 Plan is to promote the success, and enhance the value of the Company’s success by linking the personal interests of its employees, officers, directors, consultants and advisors 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 Current RequestCompany in its ability to Approvemotivate, 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. As of the record date, approximately 983 employees (including officers), 11 directors (including Bank directors), 0 consultants and 0 advisors would be eligible to receive awards under the 2021 Plan.
The 2021 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. | |
| · | Other stock-based awards in the discretion of the Committee, including unrestricted stock grants. | |
| · | Cash-based awards. |
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 Increaseaward, may be granted with respect to awards other than options or SARs.
Awards to Non-Employee Directors
The maximum aggregate number of shares subject to awards that may be granted under the 2021 Plan to any non-employee director in any calendar year is limited to a number that, combined with any cash meeting fees or cash retainers, does not exceed $750,000 in total value, including in the Share Reservecase of a non-employee Chairman of the Board or Lead Director.
Subject to proportionate adjustment in the event of stock splits and similar events, the aggregate number of shares of common stock that may be issued under the 2021 Plan is 2,250,000 shares, plus a number of additional shares (not to exceed 661,128) underlying awards outstanding as of the effective date of the 2021 Plan under the 2013 Plan that thereafter terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason. The maximum number of shares that may be issued upon exercise of incentive stock options granted under the 2021 Plan is 2,250,00.
In settingShares 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 again be available for future grants of awards under the 2021 Plan. To the extent that the full number of proposed shares issuable under our amended 2013 Plan, our Compensationsubject to a full-value award is not issued for any reason, including by reason of failure to achieve maximum performance goals, the unissued shares originally subject to the award will be added back to the plan share reserve. Shares delivered by the participant or withheld from an award to satisfy tax withholding requirements, and Governance Committee and our Boardshares delivered or withheld to pay the exercise price of Directors considered aan option, will not replenish the plan share reserve. For SARs settled in shares, the full number of factors, includingshares underlying the following (eachaward (rather than any lesser number based on the net number of which are discussed further below):
• Key data relatingshares actually delivered upon exercise) will count against the plan share reserve. The Committee may grant awards under the 2021 Plan in substitution for awards held by employees of another entity who become employees of the Company as a result of a business combination, and such substitute awards will not count against the plan share reserve. Shares repurchased by the Company on the open market with the proceeds of an option exercise shall not be added to outstanding equity awards and shares available for grant;
• Significant historical award information; and
• Futurethe Plan share needs.reserve.
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).Date.
| 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 |
| Total shares underlying outstanding stock options | 808,841 |
| Weighted-average exercise price of outstanding stock options | $22.78 |
| Weighted-average remaining contractual life of outstanding stock options | 5.0 years |
| Total shares underlying full value awards outstanding | 661,128 |
| Total shares currently available for grant | 592,232 |
Information Regarding our Authorized Shares and Stock Price
Our amended and restated articles of incorporation authorize the issuance of 60120 million shares of common stock. As of our Record Date, there were 46,982,39955,295,596 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.$35.70.
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 2013current 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 | % | ||||||
| Key Metrics (At Target) | 2018 | 2019 | 2020 |
| Burn Rate (1) | 1.30% | 0.45% | 1.26% |
| Overhang (2) | 6.02% | 5.26% | 4.50% |
| Dilution (3) | 3.59% | 3.21% | 3.53% |
| (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 |
| (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. |
Several factors were evaluated in determining to request an increase of 1,250,0002,250,000 shares for the 20132021 Plan:
| · |
| · | 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 current 2013 Plan represents approximately |
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 ProvisionsAdministration
The 2013 Plan contains a number of provisions that we believe are consistent with the interests of shareholders and sound corporate governance practices, including:
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:
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:
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 20132021 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 20132021 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 20132021 Plan. The Board may at any time administer the 20132021 Plan. If it does so, it will have all the powers of the Committee under the 20132021 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’sparticipant’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:
| · |
| · |
| · | the payout opportunities attainable under |
| 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 20132021 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 |
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 discriminateprovide for different treatment among participants and among awards in exercising this discretion.
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 20132021 Plan will be adjusted proportionately, and the Committee must make such adjustments to the 20132021 Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.
If the increase in shares2021 Plan 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,Meeting, or, if the 2013shareholders approve an amendment to the 2021 Plan will terminate onthat increases the number of shares subject to the 2021 Plan, the tenth anniversary of the date of the 2015 Annual Meeting. In either case, the 2013 Plan may besuch approval, unless earlier 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 20132021 Plan, but if an amendment to the 20132021 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 20132021 Plan may adversely affect any award previously granted under the 20132021 Plan without the written consent of the participant. Without the prior approval of the Company’sCompany’s shareholders, the 20132021 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 20132021 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,options, SARs, or 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,
and (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.SAR.
As indicated above under “Termination and Amendment,”Without the prior consent of the Company’s shareholders, outstanding stock options and SARs cannot be repriced, directly or indirectly, nor may stock options or SARs be cancelled in exchanged for stock options or SARs with an exercise or base price that is less than the exercise price or base price of the original stock options or SARs. In addition, the Company may not, without the prior consentapproval of the Company’s shareholders. The exchange of an “underwater” option or stock appreciation right (i.e.,shareholders, repurchase an option or stock appreciation right havingfor value from a participant, or cancel an exercise priceoption or base pricestock appreciation right in excess ofexchange for other awards, if the current market value of the underlying stock) for cash or for another award would be considered an indirect repricing and would, therefore, requirestock is lower than the prior consentexercise price per share of the Company’s shareholders.option or stock appreciation right.
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 20132021 Plan and the subsequent sale of common stock acquired under the 20132021 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 20132021 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, 2,415,833no shares of our common stock have been issued under the 20132021 Plan. Awards under the 2021 Plan (or remain subject to outstandingare granted at the discretion of the Compensation and Governance Committee. Accordingly, future 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 the2021 Plan to the named executive officers and the other individuals and groups indicated.
Name | Aggregate Number of Shares 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 Plansare not determinable.
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 | ||||||||
The Board of Directors unanimously recommends a vote “FOR”“FOR” Proposal 3.2.
AMENDMENT OF APPOINTMENT OF INDEPENDENT AUDITOREMPLOYEE STOCK PURCHASE PLAN TO INCREASE
THE SHARES RESERVED FOR ISSUANCE UNDER THE PLAN
The Audit Committee, acting pursuantCompany currently maintains the Seacoast Banking Corporation of Florida Employee Stock Purchase Plan (“Purchase Plan”) which offers employees of the Company and its subsidiaries a convenient way to authority delegatedpurchase shares of Seacoast stock at a discount or with a contribution from the Company and provides an incentive for continued employment. The Purchase Plan is an important part of the Company’s total incentive program and its effort to itattract and retain qualified employees. The Purchase Plan also encourages Company stock ownership by a broad base of employees. As of record date, there were 31,095 shares of common stock remaining available for purchase under the Purchase Plan.
The Purchase Plan was originally adopted by the Board of Directors appointed Crowe Horwath LLP, an independent registered certified public accounting firmin October 1988 and the Company’s independent auditor for the fiscal year ending December 31, 2017, to serve as the Company’s independent auditor for the fiscal year ending December 31, 2018. Although it is not required to do so, the Board of Directors is submitting the Audit Committee’s appointment of Crowe Horwath LLP for ratificationapproved by the Company’s shareholders in orderApril 1989. In January 1990, July 2004, June 2009, and May 2013, the Company amended the Purchase Plan to ascertainclarify and amend certain terms or to add additional shares to 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.Purchase Plan.
RepresentativesOn March 30, 2021, the Board of Crowe Horwath LLP will be presentDirectors adopted a resolution to further amend, subject to approval by the shareholders at the Annual Meeting, Section 2 of the Purchase Plan to increase the number of shares of common stock that are authorized and reserved for issuance under the Purchase Plan from 300,000 shares to 800,000 shares (subject to adjustment under the anti-dilution provision). By increasing the number of shares authorized and reserved for issuance under the Purchase Plan, the Company will be givenable to continue to provide this benefit to new and existing employees.
A summary of the opportunityPurchase Plan is set forth below. The summary is qualified in its entirety by reference to the full text of the proposed amended and restated Purchase Plan, for which shareholder approval is sought under this Proposal, which is filed as Appendix C attached to this proxy statement.
The Purchase Plan is currently administered by the CGC of the Company’s Board of Directors. This committee, acting as Plan Administrator, has full authority to interpret the Purchase Plan, to prescribe, amend and rescind rules and regulations relating to this Purchase Plan, and to make a statement on behalfall other determinations necessary or advisable in administering this Purchase Plan. All expenses incurred in the purchase of shares of common stock from the Company or in the open market under the Purchase Plan shall be paid by the Company.
Securities Subject to the Purchase Plan
Including the 500,000 share increase for which shareholder approval is sought under this Proposal 3, 800,000 shares of common stock will be reserved for issuance over the term of the firm, if they so desire,Purchase Plan. The number of shares reserved under the Purchase Plan will be adjusted proportionally to avoid any dilution in the event of any stock dividend or stock split with respect to the shares of common stock, or reclassification or similar change in the common stock. Shares of common stock subject to this Purchase Plan may, at the election of the Company, be acquired by the Company or its agent through purchases in the open market, from the Company’s treasury or through original issuances of authorized shares for such purpose.
Eligibility and will alsoParticipation
Currently, all employees of the Company, or of any existing or future subsidiaries of the Company designated by the Plan Administrator are eligible to participate in the Purchase Plan (“Eligible Employees”). The following individuals are not considered Eligible Employees: (i) any director, honorary director or advisory director of the Company or any subsidiary of the Company who is not an employee of the Company; (ii) a worker employed by an organization which hires its own employees and assigns them to the Company to support or supplement the Company’s work; (iii) an employee who, immediately after the participation, would own directly or indirectly shares of the capital stock of the Company representing 5% or more of the total combined voting power or value of all classes of shares of capital stock of the Company or any parent or subsidiary corporation of the Company; or (iv) an employee who has, during the calendar year, purchased stock under the Purchase Plan and under any other employee stock purchase plan of the Company or any parent or subsidiary corporation of the Company with an aggregate Fair Market Value (as defined below) equal to or exceeding $25,000.
As of record date, 647,601 shares of common stock had been issued under the Purchase Plan, and 31,095 shares would be available for future issuance, excluding the 500,000 share increase under this Proposal 3. As of record date, the Company estimates that approximately 983 employees, (including officers), were eligible to respondparticipate in the Purchase Plan.
Each Eligible Employee may elect to appropriate questionsparticipate in the Purchase Plan effective as of the first day of any month following the Eligible Employee’s last date of hire by the Company (the “Enrollment Date”) by delivering to the Company’s payroll department no later than 15 days prior to the Enrollment Date a signed enrollment form authorizing salary deductions for purchases under the Purchase Plan. The salary deduction may be specified as a dollar amount or a percentage of the employee’s regular salary, but may not exceed 5% of his or her regular salary. In no event may a participant purchase more than 10,000 shares under the Purchase Plan in a single month. A participant may at any time withdraw from shareholders. All shares representedthe Purchase Plan and cease to be a participant in the Purchase Plan by valid proxies received pursuantdelivering written notice within 15 days of the effective date of the withdrawal to this solicitation and not revoked before they are exercisedthe Company’s payroll department. A participant may increase or decrease the amount of the employee’s payroll deduction by filing a new enrollment form with the Company’s payroll department.
The common stock purchased under the Purchase Plan will be votedpurchased on an Investment Date, which is defined as the last business day of each month. With respect to treasury shares or shares of the Company’s common stock originally issued by the Company to the Purchase Plan, the purchase price of such shares will be 95% of the Fair Market Value, which is defined as the closing sale price per share of the Company’s common stock as reported on Nasdaq, or any exchange on which the common stock is then listed, on the Investment Date or the next preceding trading day if the common stock is not traded on the purchase date. If shares are to be purchased in the manner specified therein. If no specification is made,open market, the proxiespurchase price under the Purchase Plan will be votedthe actual purchase price of the shares on the open market, but the Company will make contributions to such employee’s contribution account on the Investment Date equal to 5.263% of the amounts contributed by the employee so that the effective purchase price is 95% of the trading price. Notwithstanding the foregoing, in no event may the purchase price be less than the par value of the common stock, which is $0.10. As of record date, the Fair Market Value of the Company’s common stock on Nasdaq was $35.70 per share.
Each employee participating in the Plan will be a beneficial owner of shares purchased by him or her in the Purchase Plan. Any cash dividends paid by the Company with respect to the whole shares of common stock in the employee’s plan stock account will be held by the Company without interest and shall be reinvested automatically in additional whole shares of common stock on the next Investment Date and such additional shares will be added to the same stock account. Each participant will have the right twice a year to (a) obtain a certificate for the ratificationnumber of shares of the appointmentCompany’s common stock credited to a participating employee’s stock account, or (b) direct that any whole shares of Crowe Horwath LLPthe Company’s common stock be sold and that the proceeds, less expenses of sales be remitted to such employee. The participants will receive any and all information that is disseminated to the Company’s other shareholders, including a proxy to vote any shares in the stock account. However, the employees may only vote such shares by proxy. No right or interest of any participating employee under the Purchase Plan may be assigned or transferred, except by will or according to the laws of descent and distribution and no rights under the Purchase Plan may be exercised by any person other than the participating employee during the lifetime of such employee.
Certain Federal Income Tax Effects
The following discussion is limited to a summary of the U.S. federal income tax provisions relating to participation in the Purchase Plan. The tax consequences 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.
The Purchase Plan is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. Under such an arrangement, no taxable income will be recognized by a participant, and no deductions will be allowable to the Company, upon either the grant or the exercise of the purchase rights. Taxable income will not be recognized until either there is a sale or other disposition of the shares acquired under the Purchase Plan or in the event the participant should die while still owning the purchased shares.
If a participant sells or otherwise disposes of the purchased shares within two (2) years after his or her entry date into the purchase period in which such shares were acquired or within one (1) year after the actual purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the amount by which the Fair Market Value of the shares on the purchase date exceeded the purchase price paid for those shares, and the Company will be entitled to an income tax deduction, for the fiscaltaxable year ending December 31, 2018. Ratificationin which such disposition occurs, equal in amount to such excess. The participant also will recognize a capital gain to the extent the amount realized upon the sale of this proposal requiresthe shares exceeds the sum of the aggregate purchase price for those shares and the ordinary income recognized in connection with their acquisition.
If a participant sells or disposes of the purchased shares more than two (2) years after his or her entry date into the purchase period in which the shares were acquired and more than one (1) year after the actual purchase date of those shares, the participant will recognize ordinary income in the year of sale or disposition equal to the lower of (i) the amount by which the Fair Market Value of the shares on the sale or disposition date exceeded the purchase price paid for those shares or (ii) five percent (5%) of the Fair Market Value of the shares on the participant’s entry date into that purchase period. Any additional gain upon the disposition will be taxed as a long-term capital gain. The Company will not be entitled to an income tax deduction with respect to such disposition.
If a participant still owns the purchased shares at the time of death, his or her estate will recognize ordinary income in the year death equal to the lower of (i) the amount by which the Fair Market Value of the shares on the sale or disposition exceeds the purchase price paid for those shares or (ii) five percent (5%) of the Fair Market Value of the shares on the participant’s entry date into the purchase period in which those shares were acquired.
The Purchase Plan will terminate on the Investment Date when the participating employees become entitled to purchase a number of shares of common stock greater than the number of reserved shares remaining available for purchase. The Board of Directors may also at any time alter, suspend or discontinue the Purchase Plan. However, the Board of Directors may not, without shareholder approval, (i) increase the number of shares issuable under the Purchase Plan, (ii) alter the purchase price formula so as to reduce the purchase price or (iii) modify the requirements for eligibility to participate in the Purchase Plan.
Benefits to Named Executive Officers and Others
The benefits to be received by the affirmative voteCompany’s executive officers and employees as a result of a majoritythe proposed amendment and restatement of votes cast at the Annual Meeting.Purchase Plan are not determinable, since the amounts of future purchases by participants are based on elective participant contributions. No purchase rights have been granted, and no shares of common stock have been issued, with respect to the 500,000 share increase for which shareholder approval is sought under this Proposal.
The Board of Directors unanimously recommends a vote "FOR"“FOR” Proposal 4.3.
Relationship with Independent Registered Public Accounting Firm
Crowe Horwath LLP’s report on Seacoast’s consolidated financial statements for the fiscal year ended December 31, 2017 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles. Crowe Horwath LLP’s report on Seacoast’s internal control over financial reporting expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017. Crowe Horwath LLP has advised Seacoast that neither the firm nor any of its partners has any direct or material interest in Seacoast and its subsidiaries except as auditors and independent certified public accountants of Seacoast and its subsidiaries.
Independent Registered Public Accounting Firm’s Fees
The following table shows the fees paid or accrued by the Company for the audit and other services for the fiscal years ended December 31, 2017 and 2016, including expenses:
| 2017 | 2016 | |||||||
| Audit Fees(1) | $ | 732,907 | $ | 548,591 | ||||
| Audit-Related Fees(2) | $ | 184,500 | $ | 53,500 | ||||
| Tax Fees(3) | $ | 59,200 | $ | 12,000 | ||||
| All Other Fees(4) | $ | 43,465 | $ | 10,087 | ||||
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).
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 20182021 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 20192022 annual meeting of shareholders.
This Proposal 54 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 5.4.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
The Audit Committee, acting pursuant to authority delegated to it by the Board of Directors, appointed Crowe LLP, an independent registered certified public accounting firm and the Company’s independent auditor for the fiscal year ending December 31, 2020, to serve as the Company’s independent auditor for the fiscal year ending December 31, 2021. Although it is not required to do so, the Board of Directors is submitting the Audit Committee’s appointment of Crowe LLP for ratification by the Company’s shareholders in order to ascertain the views of the shareholders regarding such appointment and as a matter of good corporate practice. If the shareholders should not ratify the appointment of Crowe LLP, the Audit Committee will reconsider the appointment.
Representatives of Crowe LLP will be present at the Annual Meeting and will be given the opportunity to make a statement on behalf of the firm, if they so desire, and will also be available to respond to appropriate questions from shareholders. All shares represented by valid proxies received pursuant to this solicitation and not revoked before they are exercised will be voted in the manner specified therein. If no specification is made, the proxies will be voted for the ratification of the appointment of Crowe LLP for the fiscal year ending December 31, 2021. Ratification of this proposal requires approval by the affirmative vote of a majority of votes cast at the Annual Meeting.
The Board of Directors unanimously recommends a vote “FOR” Proposal 5.
Relationship with Independent Registered Public Accounting Firm
Crowe LLP’s report on Seacoast’s consolidated financial statements for the fiscal year ended December 31, 2020 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles. Crowe LLP’s report on Seacoast’s internal control over financial reporting expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. Crowe LLP has advised Seacoast that neither the firm nor any of its partners has any direct or material interest in Seacoast and its subsidiaries except as auditors and independent certified public accountants of Seacoast and its subsidiaries.
Independent Registered Public Accounting Firm’s Fees
The following table shows the fees paid or accrued by the Company for the audit and other services for the fiscal years ended December 31, 2020 and 2019, including expenses:
| 2020 | 2019 | |
| Audit Fees (1) | $904,900 | $879,000 |
| Audit-Related Fees (2) | $85,900 | $33,100 |
| Tax Fees (3) | $43,000 | $40,000 |
| All Other Fees(4) | $24,000 | $88,920 |
| (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, including fees associated with the Company’s adoption of ASC 326, Financial Instruments - Credit Losses. |
| (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 aggregate fees billed in 2020 for professional services performed in connection with the Company’s filing of certain registration statements and related issuance of consents. |
| (3) | Includes tax preparation and compliance activities for the Company and related tax compliance. |
| (4) | Includes the aggregate fees for professional services and expenses rendered in connection with the audit of the Company’s retirement savings plan and for consulting services in connection with the formation of a subsidiary of Seacoast National Bank. |
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).
Certain Transactions and Business Relationships
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:
the owner of Gilbert Chevrolet and Gilbert Ford automobile dealerships. In 2020, Seacoast paid Gilbert dealerships $36,000 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, 2017,2020, was approximately $1,149,107,$1,095,258, which represented approximately 0.17%0.09% of Seacoast’s consolidated shareholders’ equity on that date. Additionally, the Bank had $1.0 million in unfunded commitments to lend directors and named executive officers at December 31, 2020. 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 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 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.
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, 2017,2020, 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 20192022
Shareholder Proposals for Inclusion in 20192022 Proxy Statement
To be considered for inclusion in the Company’s proxy statement and proxy card for the 20192022 Annual Meeting of Shareholders, a shareholder proposal must be received at the Company’s principal executive offices no later than December 7, 2018,10, 2021, 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 20192022 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 20192022 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, 20192022 and no later than March 25, 2019.27, 2022. 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.
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 | FOR | |
| 3 | FOR | |
| 4 | FOR | |
| 5 | 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.
You may vote all common shares that you owned as of the close of business on March 26, 2018,29, 2021, which is the record date for the meeting.
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, 201823, 2021 (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.
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, 2, 3 and 4 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.
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.
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 46,982,39955,295,596 shares of common stock issued, outstanding and entitled to be voted, which were held by approximately 2,2332,165 holders of record. Therefore, at least 23,491,20027,647,799 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 20182021 Annual Meeting, the following votes are required:
| Proposal | Vote Required | Do abstentions and | Is broker discretionary voting allowed? | ||
| 1 | Election of Directors | Plurality vote(1) | No | No | |
| 2 | Affirmative vote of a majority of votes cast | No | No | ||
| 3 | Affirmative vote of a majority of votes cast | No | No | ||
| 4 | |||||
| Advisory (Non-binding) Vote on Executive Compensation | Affirmative vote of a majority of votes cast | No | No | ||
| 5 | Ratification of Auditor | Affirmative vote of a majority of votes cast | No | Yes | |
| (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 | |
April 6, 20189, 2021
LOCATION OF THE 2021 ANNUAL MEETING OF SHAREHOLDERS
Our 2021 Annual Meeting will be held at the Hutchinson Shores Resort:
3793 NE Ocean Blvd, Jensen Beach, FL 34957
Directions Taking Florida’s Turnpike
Directions Taking Interstate 95
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 ongoing 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.
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.
A - 1
| 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 | |||||||||||||||
| YEAR-ENDED | |||||
| (Dollars in thousands, except per share data) | 2020 | 2019 | 2018 | 2017 | 2016 |
| Net Income | $77,764 | $98,739 | $67,275 | $42,865 | $29,202 |
| Total noninterest income | 61,570 | 56,732 | 50,022 | 58,469 | 37,795 |
| Gain on sale of VISA stock | – | – | – | 15,153 | – |
| Securities (gains) losses, net | (1,235) | (1,217) | 623 | 86 | (368) |
| BOLI benefits on death (included in other income) | – | (956) | (280) | – | (464) |
| Total Adjustments to Noninterest Income | (1,235) | (2,173) | 343 | (15,239) | (832) |
| Total Adjusted Noninterest Income | 60,335 | 54,559 | 50,365 | 43,230 | 36,963 |
| Total noninterest expense | 185,552 | 160,739 | 162,273 | 149,916 | 130,881 |
| Merger related charges | (9,074) | (969) | (9,681) | (12,922) | (9,028) |
| Amortization of intangibles | (5,857) | (5,826) | (4,300) | (3,360) | (2,486) |
| Business continuity expenses | (307) | (95) | – | (352) | – |
| Branch reductions and other expense initiatives | (818) | (1,846) | (587) | (4,321) | (3,357) |
| Early redemption cost for FHLB advances | – | – | – | – | (1,777) |
| Total Adjustments to Noninterest Expense | (16,056) | (8,736) | (14,568) | (20,955) | (16,648) |
| Total Adjusted Noninterest Expense | 169,496 | 152,003 | 147,705 | 128,961 | 114,233 |
| Income Taxes | 22,818 | 29,873 | 20,259 | 36,336 | 14,889 |
| Tax effect of adjustments | 3,635 | 1,846 | 3,834 | 1,792 | 5,949 |
| Taxes and tax penalties on acquisition-related BOLI redemption | – | – | (485) | – | – |
| Effect of change in corporate tax rate on deferred tax assets | – | (1,135) | (248) | (8,552) | – |
| Total Adjustments to Income Taxes | 3,635 | 711 | 3,101 | 6,760 | 5,949 |
| Adjusted Income Taxes | 26,453 | 30,584 | 23,360 | 43,096 | 20,838 |
| Adjusted Net Income | $88,950 | $104,591 | $79,085 | $55,341 | $39,069 |
| Earnings per diluted share, as reported | $1.44 | $1.90 | $1.38 | $0.99 | $0.78 |
| Adjusted Earnings per Diluted Share | 1.65 | 2.01 | 1.62 | 1.28 | 1.04 |
| Average diluted shares outstanding | 53,930 | 52,029 | 48,748 | 43,350 | 37,508 |
| Adjusted Noninterest Expense | $169,496 | $152,003 | $147,705 | $128,961 | $114,233 |
| Provision for credit losses on unfunded commitments | (185) | – | – | – | – |
| Foreclosed property expense and net (loss)/gain on sale | (2,263) | (51) | (460) | 302 | (44) |
| Net Adjusted Noninterest Expense | $167,048 | $151,952 | $147,245 | $129,263 | $114,189 |
| Revenue | $324,313 | $300,350 | $261,537 | $234,765 | $177,383 |
| Total Adjustments to Revenue | (1,235) | (2,173) | 343 | (15,239) | (832) |
| Impact of FTE adjustment | 460 | 335 | 441 | 706 | 926 |
| Adjusted Revenue on a fully taxable equivalent basis | $323,538 | $298,512 | $262,321 | $220,232 | $177,477 |
| Adjusted Efficiency Ratio | 52% | 51% | 56% | 59% | 65% |
| Average Assets | $7,860,000 | $6,831,280 | $6,057,335 | $5,206,617 | $4,201,822 |
| Less average goodwill and intangible assets | (231,267) | (228,042) | (178,287) | (115,511) | (66,611) |
| Average Tangible Assets | $7,628,733 | $6,603,238 | $5,879,048 | $5,091,106 | $4,135,211 |
| Return on Average Assets (ROA) | 0.99% | 1.45% | 1.11% | 0.82% | 0.69% |
| Impact of removing average intangible assets and related amortization | 0.09% | 0.11% | 0.09% | 0.06% | 0.02% |
| Return on Average Tangible Assets (ROTA) | 1.08% | 1.56% | 1.20% | 0.88% | 0.71% |
| Impact of other adjustments for Adjusted Net Income | 0.09% | 0.02% | 0.15% | 0.21% | 0.23% |
| Adjusted Return on Average Tangible Assets | 1.17% | 1.58% | 1.35% | 1.09% | 0.94% |
| Average Shareholders’ Equity | $1,045,219 | $928,793 | $740,571 | $570,399 | $413,874 |
| Less average goodwill and intangible assets | (231,267) | (228,042) | (178,287) | (115,511) | (66,611) |
| Average Tangible Equity | $813,952 | $700,751 | $562,284 | $454,888 | $347,263 |
| Return on Average Shareholders’ Equity | 7.4% | 10.6% | 9.1% | 7.5% | 7.1% |
| Impact of removing average intangible assets and related amortization | 2.7% | 4.1% | 3.5% | 1.9% | 1.3% |
| Return on Average Tangible Common Equity (ROTCE) | 10.1% | 14.7% | 12.5% | 9.4% | 8.4% |
| Impact of other adjustments for Adjusted Net Income | 0.8% | 0.2% | 1.5% | 2.8% | 2.9% |
| Adjusted Return on Average Tangible Common Equity | 10.9% | 14.9% | 14.1% | 12.2% | 11.3% |
A - 2
| 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 | ||||||
SEACOAST BANKING CORPORATION OF FLORIDA 2021 INCENTIVE PLAN
ARTICLES OF AMENDMENT
TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PURPOSE
1.1. GENERAL. The purpose of the Seacoast Banking Corporation of Florida
2021 Incentive Plan (the “Plan”) is to promote the success, and enhance the value, of Seacoast Banking Corporation of Florida (the “Company”), by linking the personal interests of employees, officers, directors, consultants and advisors of the Company or any Affiliate (as defined below) to those of Company shareholders and by providing such persons 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. Accordingly, the Plan permits the grant of incentive awards from time to time to selected employees, officers, directors, consultants and advisors of the Company and its Affiliates.
DEFINITIONS
2.1. DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:
(a) “Affiliate” means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more intermediaries controls, is controlled by or is under common control with, the Company, as determined by the Committee.
(b) “Award” means an award of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance Awards, Other Stock-Based Awards, or any other right or interest relating to Stock or cash, granted to a Participant under the Plan.
(c) “Award Certificate” means a written document, in such form as the Committee prescribes from time to time, setting forth the terms and conditions of an Award. Award Certificates may be in the form of individual award agreements or certificates or a program document describing the terms and provisions of an Award or series of Awards under the Plan. The Committee may provide for the use of electronic, internet or other non-paper Award Certificates, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.
(d) “Beneficial Owner” shall have the meaning given such term in Rule 13d-3 of the General Rules and Regulations under the 1934 Act.
(e) “Board” means the Board of Directors of the Company.
(f) “Cause” as a reason for a Participant’s termination of Continuous Service shall have the meaning assigned such term in the employment, consulting, severance or similar agreement, if any, between such Participant and the Company or an Affiliate; provided, however, that if there is no such employment, consulting, severance or similar agreement in which such term is defined, and unless otherwise defined in the applicable Award Certificate, “Cause” shall mean any of the following acts by the Participant, as determined by the Committee: gross neglect of duty, prolonged absence from duty without the consent of the Company, material breach by the Participant of any published Company code of conduct or code of ethics; or willful misconduct, misfeasance or malfeasance of duty which is reasonably determined to be detrimental to the Company. With respect to a Participant’s termination of directorship, “Cause” means an act or failure to act that constitutes cause for removal of a director under applicable Florida law. The determination of the Committee as to the existence of “Cause” shall be conclusive on the Participant and the Company.
(g) “Change in Control” means and includes the occurrence of any one of the following events:
(i) during any consecutive 12-month period, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(ii) any Person becomes a Beneficial Owner, directly or indirectly, of either (A) 35% or more of the then-outstanding shares of common stock of the Company (“Company Common Stock”) or (B) securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of directors (the “Company Voting Securities”); provided, however, that for purposes of this subsection (ii), the following acquisitions of Company Common Stock or Company Voting Securities shall not constitute a Change in Control: (w) an acquisition directly from the Company, (x) an acquisition by the Company or a Subsidiary, (y) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or
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(iii) the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially all of the Company’s assets (a “Sale”) or the acquisition of assets or stock of another corporation or other entity (an “Acquisition”), unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Common Stock and outstanding Company Voting Securities immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly, more than 35% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Reorganization, Sale or Acquisition (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding Company Common Stock and the outstanding Company Voting Securities, as the case may be, and (B) no person (other than (x) the Company or any Subsidiary, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 35% or more of the total common stock or 35% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or
(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
(i) “Committee” means the committee of the Board described in Article 4.
(j) “Company” means Seacoast Banking Corporation of Florida, a Florida corporation, or any successor corporation.
(k) “Continuous Service” means the absence of any interruption or termination of service as an employee, officer, director, consultant or advisor of the Company or any Affiliate, as applicable; provided, however, that for purposes of an Incentive Stock Option “Continuous Service” means the absence of any interruption or termination of service as an employee of the Company or any Parent or Subsidiary, as applicable, pursuant to applicable tax regulations. Continuous Service shall not be considered interrupted in the following cases: (i) a Participant transfers employment between the Company and an Affiliate or between Affiliates, or (ii) in the discretion of the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale or disposition of the Participant’s employer from the Company or any Affiliate, or (iii) a Participant transfers from being an employee of the Company or an Affiliate to being a director of the Company or of an Affiliate, or vice versa, or (iv) subject to the prior approval of the Committee, a Participant transfers from being an employee of the Company or an Affiliate to being a consultant to the Company or of an Affiliate, or vice versa, or (v) any leave of absence authorized in writing by the Company prior to its commencement; provided, however, that for purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such leave any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Whether military, government or other service or other leave of absence shall constitute a termination of Continuous Service shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive; provided, however, that for purposes of any Award that is subject to Code Section 409A, the determination of a leave of absence must comply with the requirements of a “bona fide leave of absence” as provided in Treas. Reg. Section 1.409A-1(h).
(l) “Deferred Stock Unit” means a right granted to a Participant under Article 9 to receive Shares (or the equivalent value in cash or other property if the Committee so provides) at a future time as determined by the Committee, or as determined by the Participant within guidelines established by the Committee in the case of voluntary deferral elections.
(m) “Disability” of a Participant means that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. If the determination of Disability relates to an Incentive Stock Option, Disability means Permanent and Total Disability as defined in Section 22(e)(3) of the Code. In the event of a dispute, the determination of whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.
(n) “Dividend Equivalent” means a right granted with respect to an Award pursuant to Article 11.
(o) “Effective Date” has the meaning assigned such term in Section 3.1.
(p) “Eligible Participant” means an employee (including a leased employee), officer, director, consultant or advisor of the Company or any Affiliate.
(q) “Exchange” means any national securities exchange on which the Stock may from time to time be listed or traded.
(r) “Fair Market Value,” on any date, means (i) if the Stock is listed on an Exchange, the closing sales price on the principal such Exchange on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on an Exchange, the mean between the bid and offered prices as quoted by the applicable interdealer quotation system for such date, provided that if the Stock is not quoted on an interdealer quotation system or it is determined that the fair market value is not properly reflected by such quotations, Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable and in compliance with Code Section 409A.
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(s) “Full-Value Award” means an Award other than in the form of an Option or SAR, and which is settled by the issuance of Stock (or at the discretion of the Committee, settled in cash valued by reference to Stock value).
(t) “Good Reason” (or a similar term denoting constructive termination) has the meaning, if any, assigned such term in the employment, consulting, severance or similar agreement, if any, between a Participant and the Company or an Affiliate; provided, however, that if there is no such employment, consulting, severance or similar agreement in which such term is defined, “Good Reason” shall have the meaning, if any, given such term in the applicable Award Certificate. If not defined in either such document, the term “Good Reason” as used herein shall not apply to a particular Award.
(u) “Grant Date” of an Award means the first date on which all necessary corporate action has been taken to approve the grant of the Award as provided in the Plan, or such later date as is determined and specified as part of that authorization process. Notice of the grant shall be a provided to the grantee within a reasonable time after the Grant Date.
(v) “Incentive Stock Option” means an Option that is intended to be an incentive stock option and meets the requirements of Section 422 of the Code or any successor provision thereto.
(w) “Independent Directors” means those members of the Board who qualify at any given time as (a) an “independent” director under the applicable rules of each Exchange on which the Shares are listed, and (b) a “non-employee” director under Rule 16b-3 of the 1934 Act.
(x) “Non-Employee Director” means a director of the Company who is not a common law employee of the Company or an Affiliate.
(y) “Nonstatutory Stock Option” means an Option that is not an Incentive Stock Option.
(z) “Option” means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.
(aa) “Other Stock-Based Award” means a right, granted to a Participant under Article 12, that relates to or is valued by reference to Stock or other Awards relating to Stock.
(bb) “Parent” means a corporation, limited liability company, partnership or other entity which owns or beneficially owns a majority of the outstanding voting stock or voting power of the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e) of the Code.
(cc) “Participant” means an Eligible Participant who has been granted an Award under the Plan; provided that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated pursuant to Section 13.4 or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant under applicable state law and court supervision.
(dd) “Performance Award” means any award granted under the Plan pursuant to Article 10.
(ee) “Person” means any individual, entity or group, within the meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934 Act.
(ff) “Plan” means the Seacoast Banking Corporation of Florida 2013 Incentive Plan, as amended from time to time.
(gg) “Prior Plan” means the Seacoast Banking Corporation of Florida 2013 Long-Term Incentive Plan, as Amended.
(hh) “Restricted Stock” means Stock granted to a Participant under Article 9 that is subject to certain restrictions and to risk of forfeiture.
(ii) “Restricted Stock Unit” means the right granted to a Participant under Article 9 to receive shares of Stock (or the equivalent value in cash or other property if the Committee so provides) in the future, which right is subject to certain restrictions and to risk of forfeiture.
(jj) “Shares” means shares of the Company’s Stock. If there has been an adjustment or substitution with respect to the Shares (whether or not pursuant to Article 14), the term “Shares” shall also include any shares of stock or other securities that are substituted for Shares or into which Shares are adjusted.
(kk) “Stock” means the $0.10 par value common stock of the Company and such other securities of the Company as may be substituted for Stock pursuant to Article 14.
(ll) “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Article 8 to receive a payment equal to the difference between the Fair Market Value of a Share as of the date of exercise of the SAR over the base price of the SAR, all as determined pursuant to Article 8.
(mm) “Subsidiary” means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Subsidiary shall have the meaning set forth in Section 424(f) of the Code.
(nn) “1933 Act” means the Securities Act of 1933, as amended from time to time.
(oo) “1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.
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EFFECTIVE TERM OF PLAN
3.1. EFFECTIVE DATE. The Plan will become effective on the date that it is adopted by the Company’s shareholders (the “Effective Date”).
3.2. TERM OF PLAN. Unless earlier terminated as provided herein, the Plan shall continue in effect until the tenth anniversary of the Effective Date or, if the shareholders approve an amendment to the Plan that increases the number of Shares subject to the Plan, the tenth anniversary of the date of such approval. The termination of the Plan on such date shall not affect the validity of any Award outstanding on the date of termination, which shall continue to be governed by the applicable terms and conditions of the Plan.
ADMINISTRATION
4.1. COMMITTEE. The Plan shall be administered by a Committee appointed by the Board (which Committee shall consist of at least two directors) or, at the discretion of the Board from time to time, the Plan may be administered by the Board. It is intended that at least two of the directors appointed to serve on the Committee shall be Independent Directors and that any such members of the Committee who do not so qualify shall abstain from participating in any decision to make or administer Awards that are made to Eligible Participants who at the time of consideration for such Award are persons subject to the short-swing profit rules of Section 16 of the 1934 Act. However, the mere fact that a Committee member shall fail to qualify as an Independent Director or shall fail to abstain from such action shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. Unless and until changed by the Board, the Compensation and Governance Committee of the Board is designated as the Committee to administer the Plan. The Board may reserve to itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers and protections of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. To the extent any action of the Board under the Plan conflicts with actions taken by the Committee, the actions of the Board shall control.
4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the Plan, as the Committee may deem appropriate. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it deems necessary to carry out the intent of the Plan. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s or an Affiliate’s independent certified public accountants, Company counsel or any executive compensation consultant or other professional retained by the Company or the Committee to assist in the administration of the Plan. No member of the Committee will be liable for any good faith determination, act or omission in connection with the Plan or any Award.
4.3. AUTHORITY OF COMMITTEE. Except as provided in Section 4.1 and 4.5 hereof, the Committee has the exclusive power, authority and discretion to:
(a) Grant Awards;
(b) Designate Participants;
(c) Determine the type or types of Awards to be granted to each Participant;
(d) Determine the number of Awards to be granted and the number of Shares or dollar amount to which an Award will relate;
(e) Determine the terms and conditions of any Award granted under the Plan;
(f) Prescribe the form of each Award Certificate, which need not be identical for each Participant;
(g) Decide all other matters that must be determined in connection with an Award;
(h) Establish, adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer the Plan;
(i) Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable to administer the Plan;
(j) Amend the Plan or any Award Certificate as provided herein; and
(k) Adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of the United States or any non-U.S. jurisdictions in which the Company or any Affiliate may operate, in order to assure the viability of the benefits of Awards granted to participants located in the United States or such other jurisdictions and to further the objectives of the Plan.
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4.4. DELEGATION. The Committee may delegate to one or more of its members or to one or more officers of the Company or an Affiliate or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. In addition, the Board or the Committee may, by resolution, expressly delegate to a special committee, consisting of one or more directors who may but need not be officers of the Company, the authority, within specified parameters as to the number and terms of Awards, to (i) designate officers and/or employees of the Company or any of its Affiliates to be recipients of Awards under the Plan, and (ii) to determine the number of such Awards to be received by any such Participants; provided, however, that such delegation of duties and responsibilities to an officer of the Company may not be made with respect to the grant of Awards to eligible participants who are subject to Section 16(a) of the 1934 Act at the Grant Date. The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report regularly to the Board and the Committee regarding the delegated duties and responsibilities and any Awards so granted.
4.5. INDEMNIFICATION. Each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority was delegated in accordance with this Article 4 shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of his or her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s charter or bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
SHARES SUBJECT TO THE PLAN
5.1. NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2 and Section 14.1, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be 2,250,000, plus a number of Shares (not to exceed 661,128) underlying awards outstanding as of the Effective Date under the Prior Plan that thereafter terminate or expire unexercised or are cancelled, forfeited or lapse for any reason. The maximum number of Shares that may be issued upon exercise of Incentive Stock Options granted under the Plan shall be 2,250,000. From and after the Effective Date, no further awards shall be granted under the Prior Plan and the Prior Plan shall remain in effect only so long as awards granted thereunder shall remain outstanding.
5.2. SHARE COUNTING. Shares covered by an Award shall be subtracted from the Plan share reserve as of the Grant Date, but shall be added back to the Plan share reserve in accordance with this Section 5.2.
(a) To the extent that all or a portion of an Award is canceled, terminates, expires, is forfeited or lapses for any reason, including by reason of failure to meet time-based and/or performance-based vesting requirements, any unissued or forfeited Shares originally subject to the Award will be added back to the Plan share reserve and again be available for issuance pursuant to Awards granted under the Plan.
(b) Shares subject to Awards settled in cash will be added back to the Plan share reserve and again be available for issuance pursuant to Awards granted under the Plan.
(c) The full number of Shares subject to an Option shall count against the number of Shares remaining available for issuance pursuant to Awards made under the Plan, even if the exercise price of an Option is satisfied through net-settlement or by delivering Shares to the Company (by either actual delivery or attestation).
(d) The full number of Shares subject to a SAR that is settled in Shares shall count against the number of Shares remaining available for issuance pursuant to Awards made under the Plan (rather than the net number of Shares actually delivered upon exercise).
(e) Shares withheld from an Award to satisfy tax withholding requirements shall count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan, and Shares delivered by a participant to satisfy tax withholding requirements shall not be added to the Plan share reserve.
(f) Shares repurchased by the Company on the open market with the proceeds of an Option exercise shall not be added to the Plan share reserve.
(g) Substitute Awards granted pursuant to Section 13.10 of the Plan shall not count against the Shares otherwise available for issuance under the Plan under Section 5.1.
(h) Subject to applicable Exchange requirements, shares available under a shareholder-approved plan of a company acquired by the Company (as appropriately adjusted to Shares to reflect the transaction) may be issued under the Plan pursuant to Awards granted to individuals who were not employees of the Company or its Affiliates immediately before such transaction and will not count against the maximum share limitation specified in Section 5.1.
5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.
5.4. LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Article 14), with respect to any one calendar year, the aggregate compensation that may be granted to any non-employee director, including all meeting fees, cash retainers and retainers granted in the form of Awards, shall not exceed $750,000, including in the case of a non-employee Chairman of the Board or Lead Director. For purposes of such limit, the value of Awards will be determined based on the aggregate Grant Date fair value of all awards issued to the director in such year (computed in accordance with applicable financial accounting rules).
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ELIGIBILITY
6.1. GENERAL. Awards may be granted only to Eligible Participants. Incentive Stock Options may be granted only to Eligible Participants who are employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code. Eligible Participants who are service providers to an Affiliate may be granted Options or SARs under this Plan only if the Affiliate qualifies as an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii)(E) of the final regulations under Code Section 409A.
STOCK OPTIONS
7.1. GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per Share under an Option shall be determined by the Committee, provided that the exercise price for any Option (other than an Option issued as a substitute Award pursuant to Section 13.10) shall not be less than the Fair Market Value as of the Grant Date.
(b) PROHIBITION ON REPRICING. Except as otherwise provided in Article 14, without the prior approval of shareholders of the Company: (i) the exercise price of an Option may not be reduced, directly or indirectly, (ii) an Option may not be cancelled or surrendered in exchange for Options, SARs or other Awards with an exercise or base price that is less than the exercise price of the original Option, (iii) an Option may not be cancelled or surrendered in exchange for other Awards if the current Fair Market Value of the Shares underlying the Option is lower than the exercise price per share of the Option, and (iv) an Option may not be cancelled or surrendered for value (in cash or otherwise) from a Participant if the current Fair Market Value of the Shares underlying the Option is lower than the exercise price per share of the Option.
(c) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, including a provision that an Option that is otherwise exercisable and has an exercise price that is less than the Fair Market Value of the Stock on the last day of its term will be automatically exercised on such final date of the term by means of a “net exercise,” thus entitling the optionee to Shares equal to the intrinsic value of the Option on such exercise date, less the number of Shares required for tax withholding. The Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised or vested.
(d) PAYMENT. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, and the methods by which Shares shall be delivered or deemed to be delivered to Participants. As determined by the Committee at or after the Grant Date, payment of the exercise price of an Option may be made in, in whole or in part, in the form of (i) cash or cash equivalents, (ii) delivery (by either actual delivery or attestation) of previously-acquired Shares based on the Fair Market Value of the Shares on the date the Option is exercised, (iii) withholding of Shares from the Option based on the Fair Market Value of the Shares on the date the Option is exercised, (iv) broker-assisted market sales, or (iv) any other “cashless exercise” arrangement.
(e) EXERCISE TERM. Except for Nonstatutory Options granted to Participants outside the United States, no Option granted under the Plan shall be exercisable for more than ten years from the Grant Date.
(f) NO DEFERRAL FEATURE. No Option shall provide for any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the Option.
(g) NO DIVIDEND EQUIVALENTS. No Option shall provide for Dividend Equivalents.
7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options granted under the Plan must comply with the requirements of Section 422 of the Code. Without limiting the foregoing, any Incentive Stock Option granted to a Participant who at the Grant Date owns more than 10% of the voting power of all classes of shares of the Company must have an exercise price per Share of not less than 110% of the Fair Market Value per Share on the Grant Date and an Option term of not more than five years. If all of the requirements of Section 422 of the Code (including the above) are not met, the Option shall automatically become a Nonstatutory Stock Option.
STOCK APPRECIATION RIGHTS
8.1. GRANT OF STOCK APPRECIATION RIGHTS. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms and conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a SAR, the Participant has the right to receive, for each Share with respect to which the SAR is being exercised, the excess, if any, of:
(1) The Fair Market Value of one Share on the date of exercise; over
(2) The base price of the SAR as determined by the Committee and set forth in the Award Certificate, which (other than for a SAR issued as a substitute Award pursuant to section 13.10) shall not be less than the Fair Market Value of one Share on the Grant Date.
(b) PROHIBITION ON REPRICING. Except as otherwise provided in Article 14, without the prior approval of shareholders of the Company: (i) the base price of a SAR may not be reduced, directly or indirectly, (ii) a SAR may not be cancelled or
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surrendered in exchange for Options, SARs or other Awards with an exercise or base price that is less than the base price of the original SAR, (iii) a SAR may not be cancelled or surrendered in exchange for other Awards if the current Fair Market Value of the Shares underlying the SAR is lower than the base price per share of the SAR, and (iv) a SAR may not be cancelled or surrendered for value (in cash or otherwise) from a Participant if the current Fair Market Value of the Shares underlying the SAR is lower than the base price per share of the SAR.
(c) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which a SAR may be exercised in whole or in part, including a provision that a SAR that is otherwise exercisable and has a base price that is less than the Fair Market Value of the Stock on the last day of its term will be automatically exercised on such final date of the term, thus entitling the holder to cash or Shares equal to the intrinsic value of the SAR on such exercise date, less the cash or number of Shares required for tax withholding. Except for SARs granted to Participants outside the United States, no SAR shall be exercisable for more than ten years from the Grant Date.
(d) NO DEFERRAL FEATURE. No SAR shall provide for any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the SAR.
(e) NO DIVIDEND EQUIVALENTS. No SAR shall provide for Dividend Equivalents.
RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS
9.1. GRANT OF RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS. The Committee is authorized to make Awards of Restricted Stock, Restricted Stock Units or Deferred Stock Units to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee. An Award of Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be evidenced by an Award Certificate setting forth the terms, conditions, and restrictions applicable to the Award.
9.2. ISSUANCE AND RESTRICTIONS. Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, for example, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. Except as otherwise provided in an Award Certificate or any special Plan document governing an Award, a Participant shall have none of the rights of a shareholder with respect to Restricted Stock Units or Deferred Stock Units until such time as Shares of Stock are paid in settlement of such Awards.
9.3 DIVIDENDS ON RESTRICTED STOCK. In the case of Restricted Stock, the Committee may provide that ordinary cash dividends declared on the Shares before they are vested (i) will be forfeited, (ii) will be deemed to have been reinvested in additional Shares or otherwise reinvested (subject to Share availability under Section 5.1 hereof) and subject to the same vesting provisions as provided for the host Award, or (iii) will be credited by the Company to an account for the Participant and accumulated without interest until the date on which the host Award becomes vested, and any dividends accrued with respect to forfeited Restricted Stock will be reconveyed to the Company without further consideration or any act or action by the Participant. In no event shall dividends be paid or distributed until the vesting restrictions of the underlying Award lapse.
9.4. FORFEITURE. Subject to the terms of the Award Certificate and except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of Continuous Service during the applicable restriction period or upon failure to satisfy a performance goal during the applicable restriction period, Restricted Stock or Restricted Stock Units that are at that time subject to restrictions shall be forfeited.
9.5. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to the Participant at the Grant Date either by book-entry registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or one or more of its employees) designated by the Committee, a stock certificate or certificates registered in the name of the Participant. If physical certificates representing shares of Restricted Stock are registered in the name of the Participant, such certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.
PERFORMANCE AWARDS
10.1. GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant any Award under this Plan, including cash-based Awards, with performance-based vesting criteria, on such terms and conditions as may be selected by the Committee. Any such Awards with performance-based vesting criteria are referred to herein as Performance Awards. The Committee shall have the complete discretion to determine the number of Performance Awards granted to each Participant, subject to Section 5.4, and to designate the provisions of such Performance Awards as provided in Section 4.3. Any Dividend Equivalents granted with respect to a Performance Award shall be subject to Section 11.1.
10.2. PERFORMANCE GOALS. The Committee may establish performance goals for Performance Awards which may be based on any criteria selected by the Committee. Such performance goals may be described in terms of Company-wide objectives or in terms of objectives that relate to the performance of the Participant, an Affiliate or a division, region, department or function within the Company or an Affiliate. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or an Affiliate conducts its business, or other events or circumstances render performance goals to be unsuitable, the Committee may modify such performance goals in whole or in part, as the Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different business unit or function during a performance period, the Committee may determine that the performance goals or performance period are no longer appropriate and may (i) adjust, change or eliminate the performance goals or the applicable performance period as it deems appropriate to make such goals and period comparable to the initial goals and period, or (ii) make a cash payment to the participant in an amount determined by the Committee.
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DIVIDEND EQUIVALENTS
11.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend Equivalents with respect to Full-Value Awards granted hereunder, subject to such terms and conditions as may be selected by the Committee. Dividend Equivalents shall entitle the Participant to receive payments equal to ordinary cash dividends with respect to all or a portion of the number of Shares subject to a Full-Value Award, as determined by the Committee. The Committee may provide that Dividend Equivalents (i) will be deemed to have been reinvested in additional Shares or otherwise reinvested (subject to Share availability under Section 5.1 hereof) and subject to the same vesting provisions as provided for the host Award, or (ii) be credited by the Company to an account for the Participant and accumulated without interest until the date on which the host Award becomes vested, and, in either case, any Dividend Equivalents accrued with respect to forfeited Awards will be reconveyed to the Company without further consideration or any act or action by the Participant. In no event shall dividends be paid or distributed until the vesting restrictions of the underlying Award lapse.
STOCK OR OTHER STOCK-BASED AWARDS
12.1. GRANT OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation Shares awarded purely as a “bonus” and not subject to any restrictions or conditions, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, and Awards valued by reference to book value per Share (or net asset value per Share) or the value of securities of or the performance of specified Parents or Subsidiaries. The Committee shall determine the terms and conditions of such Awards. Any Dividend Equivalents granted with respect to an Award under this Section 12.1 shall be subject to Section 11.1.
PROVISIONS APPLICABLE TO AWARDS
13.1. AWARD CERTIFICATES. Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee.
13.2. FORM OF PAYMENT FOR AWARDS. At the discretion of the Committee, payment of Awards may be made in cash, Stock, a combination of cash and Stock, or any other form of property as the Committee shall determine. In addition, payment of Awards may include such terms, conditions, restrictions and/or limitations, if any, as the Committee deems appropriate, including, in the case of Awards paid in the form of Stock, restrictions on transfer and forfeiture provisions. Further, payment of Awards may be made in the form of a lump sum, or in installments, as determined by the Committee.
13.3. LIMITS ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted Award shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution; provided, however, that the Committee may (but need not) permit other transfers (other than transfers for value) where the Committee concludes that such transferability (i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, state or federal tax or securities laws applicable to transferable Awards.
13.4. BENEFICIARIES. Notwithstanding Section 13.3, 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. A beneficiary, legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Award Certificate applicable to the Participant, except to the extent the Plan and Award Certificate otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, any payment due to the Participant shall be made to the Participant’s estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant, in the manner provided by the Company, at any time provided the change or revocation is filed with the Company.
13.5. STOCK TRADING RESTRICTIONS. All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of any Exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the Stock.
13.6 ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided in the Award Certificate or any special Plan document governing an Award, upon the termination of a person’s Continuous Service by reason of death or Disability:
(i) each that Participant’s outstanding Options and SARs, or the portions of such outstanding Options and SARs, as applicable, that are solely subject to time-based vesting requirements shall become vested and fully exercisable as of the date of termination, and shall thereafter remain exercisable for a period of one (1) year or until the earlier expiration of the original term of the Option or SAR;
(ii) each of that Participant’s other outstanding Awards, or the portions of such other outstanding Awards, as applicable, that are solely subject to time-based vesting restrictions shall become vested, and such restrictions shall lapse as of the date of termination; and
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(iii) the payout opportunities attainable under each of that Participant’s outstanding Options, SARs and other Awards, or the portions of such outstanding Options, SARs and other Awards, as applicable, that are solely subject to performance-vesting requirements or restrictions shall be deemed to have been earned as of the date of termination as follows:
(A) 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, and
(B) if the date of termination occurs during the second half of the applicable performance period, then all relevant performance goals will be deemed to have been achieved at the “target” level or, if greater, the actual level of achievement of all relevant performance goals against target will be measured as of the end of the calendar quarter immediately preceding the date of termination.
To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.
13.7. EFFECT OF A CHANGE IN CONTROL. The provisions of this Section 13.7 shall apply in the case of a Change in Control, unless otherwise provided in the Award Certificate or any special Plan document or separate agreement with a Participant governing an Award.
(a) Awards Assumed or Substituted by Surviving Entity. 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, then (i) all of that Participant’s outstanding Options, SARs and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting restrictions on his or her outstanding Awards shall lapse, and (iii) the payout level under all of that Participant’s performance-based Awards that were outstanding immediately prior to effective time of the Change in Control shall be determined and deemed to have been earned as of the date of termination based upon (A) an assumed achievement of all relevant performance goals at the “target” level if the date of termination occurs during the first half of the applicable performance period, or (B) the actual level of achievement of all relevant performance goals against target (measured as of the end of the calendar quarter immediately preceding the date of termination), if the date of termination occurs during the second half of the applicable performance period, and, in either such case, there shall be a pro rata payout to such Participant within sixty (60) days following the date of termination of employment (unless a later date is required by Section 16.3 hereof), based upon the length of time within the performance period that has elapsed prior to the date of termination of employment. With regard to each Award, a Participant shall not be considered to have resigned for Good Reason unless either (i) the Award Certificate includes such provision or (ii) the Participant is party to an employment, severance or similar agreement with the Company or an Affiliate that includes provisions in which the Participant is permitted to resign for Good Reason. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.
(b) Awards not Assumed or Substituted by Surviving Entity. Upon the occurrence of a Change in Control, and except with respect to any Awards 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: (i) outstanding Options, SARs, and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under outstanding performance-based Awards shall be deemed to have been fully earned as of the effective date of the Change in Control based upon (A) an assumed achievement of all relevant performance goals at the “target” level if the Change in Control occurs during the first half of the applicable performance period, or (B) the greater of the “target” level or the actual level of achievement of all relevant performance goals against target measured as of the date of the Change in Control, if the Change in Control occurs during the second half of the applicable performance period. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.
13.8. ACCELERATION FOR OTHER REASONS. Regardless of whether an event has occurred as described in Section 13.6 or 13.7 above, the Committee may in its sole discretion at any time determine that, upon the termination of service of a Participant, or the occurrence of a Change in Control, all or a portion of such Participant’s Options, SARs and other Awards in the nature of rights that may be exercised shall become fully or partially vested and exercisable, that all or a part of the restrictions on all or a portion of the Participant’s outstanding Awards shall lapse, and/or that any performance-based criteria with respect to any Awards held by that Participant shall be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole discretion, declare. The Committee may provide for different treatment among Participants and among Awards granted to a Participant in exercising its discretion pursuant to this Section 13.8.
13.9. FORFEITURE EVENTS. Awards under the Plan shall be subject to any compensation recoupment policy that the Company may adopt from time to time that is applicable by its terms to the Participant. In addition, the Committee may specify in an Award Certificate that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, (i) termination of employment for cause, (ii) violation of material Company or Affiliate policies, (iii) breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, (iv) other conduct by the Participant that is detrimental to the business or reputation of the Company or any Affiliate, or (v) a later determination that the vesting of, or amount realized from, a Performance Award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not the Participant caused or contributed to such material inaccuracy. Nothing contained herein or in any Award Certificate prohibits the Participant from: (1) reporting possible violations of federal law or regulations, including any possible securities laws violations, to any governmental agency or entity; (2) making any other disclosures that are protected under the whistleblower provisions of federal law or regulations; or (3) otherwise fully participating in any federal whistleblower programs, including but not limited to any such programs managed by the U.S. Securities and Exchange.
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13.10. SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in substitution for stock and stock-based awards held by employees of another entity who become employees of the Company or an Affiliate as a result of a merger or consolidation of the former employing entity with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the former employing corporation. The Committee may direct that the substitute awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.
CHANGES IN CAPITAL STRUCTURE
14.1. MANDATORY ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its shareholders that causes the per-share value of the Stock to change (including, without limitation, any stock dividend, stock split, reverse stock split, spin-off, rights offering, or large nonrecurring cash dividend), the authorization limits under Section 5.1 and Section 5.4 shall be adjusted proportionately, and the Committee shall make such adjustments to the Plan and Awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. Action by the Committee may include: (i) adjustment of the number and kind of shares that may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments that the Committee determines to be equitable. Notwithstanding the foregoing, the Committee shall not make any adjustments to outstanding Options or SARs that would constitute a modification or substitution of the stock right under Treas. Reg. Section 1.409A-1(b) (5)(v) that would be treated as the grant of a new stock right or change in the form of payment for purposes of Code Section 409A. Without limiting the foregoing, in the event of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination or consolidation of the outstanding Stock into a lesser number of Shares, the authorization limits under Section 5.1 and Section 5.4 shall automatically be adjusted proportionately, and the Shares then subject to each Award shall automatically, without the necessity for any additional action by the Committee, be adjusted proportionately without any change in the aggregate purchase price therefor.
14.2 DISCRETIONARY ADJUSTMENTS. Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including, without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or any transaction described in Section 14.1), the Committee may, in its sole discretion, provide (i) that Awards will be settled in cash rather than Stock, (ii) that Awards will become immediately vested and non-forfeitable and exercisable (in whole or in part) and will expire after a designated period of time to the extent not then exercised, (iii) that Awards will be assumed by another party to a transaction or otherwise be equitably converted or substituted in connection with such transaction, (iv) that outstanding Awards may be settled by payment in cash or cash equivalents equal to the excess of the fair market value of the underlying Stock, as of a specified date associated with the transaction (or the per-shares transaction price), over the exercise or base price of the Award, (v) that performance targets and performance periods for Performance Awards will be modified, or (vi) any combination of the foregoing. The Committee’s determination need not be uniform and may be different for different Participants whether or not such Participants are similarly situated.
14.3 GENERAL. Any discretionary adjustments made pursuant to this Article 14 shall be subject to the provisions of Section 15.2. To the extent that any adjustments made pursuant to this Article 14 cause Incentive Stock Options to cease to qualify as Incentive Stock Options, such Options shall be deemed to be Nonstatutory Stock Options.
AMENDMENT, MODIFICATION AND TERMINATION
15.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without shareholder approval; provided, however, that if an amendment to the Plan would, in the reasonable opinion of the Board or the Committee, either (i) materially increase the number of Shares available under the Plan (other than pursuant to Article 14), (ii) expand the types of awards under the Plan, (iii) materially expand the class of participants eligible to participate in the Plan, (iv) materially extend the term of the Plan, or (v) otherwise constitute a material change requiring shareholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of an Exchange, then such amendment shall be subject to shareholder approval; and provided, further, that the Board or Committee may condition any other amendment or modification on the approval of shareholders of the Company for any reason, including by reason of such approval being necessary or deemed advisable (i) to comply with the listing or other requirements of an Exchange, or (ii) to satisfy any other tax, securities or other applicable laws, policies or regulations. Except as otherwise provided in Section 14.1, without the prior approval of the shareholders of the Company, the Plan may not be amended to permit: (i) the exercise price or base price of an Option or SAR to be reduced, directly or indirectly, (ii) an Option or SAR to be cancelled in exchange for cash, other Awards, or Options or SARs with an exercise or base price that is less than the exercise price or base price of the original Option or SAR, or otherwise, or (iii) the Company to repurchase an Option or SAR for value (in cash or otherwise) from a Participant if the current Fair Market Value of the Shares underlying the Option or SAR is lower than the exercise price or base price per share of the Option or SAR.
15.2. AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Award without approval of the Participant; provided, however:
(a) Subject to the terms of the applicable Award Certificate, such amendment, modification or termination shall not, without the Participant’s consent, reduce or diminish the value of such Award;
(b) Except as otherwise provided in Article 14, without the prior approval of the shareholders of the Company: (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 Options, SARs or other Awards with an exercise or base price that is less than the exercise price or base price of the original Option or SAR, or otherwise, and (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 underlying the Option or SAR is lower than the exercise price or base price per share of the Option or SAR; and
(c) No termination, amendment, or modification of the Plan shall adversely affect any Award previously granted under the Plan, without the written consent of the Participant affected thereby.
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15.3. COMPLIANCE AMENDMENTS. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, the Board may amend the Plan or an Award Certificate, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or Award Certificate to any present or future law relating to plans of this or similar nature (including, but not limited to, Section 409A of the Code), and to the administrative regulations and rulings promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section 15.3 to any Award granted under the Plan without further consideration or action.
GENERAL PROVISIONS
16.1. RIGHTS OF PARTICIPANTS.
(a) No Participant or any Eligible Participant shall have any claim to be granted any Award under the Plan. Neither the Company, its Affiliates nor the Committee is obligated to treat Participants or Eligible Participants uniformly, and determinations made under the Plan may be made by the Committee selectively among Eligible Participants who receive, or are eligible to receive, Awards (whether or not such Eligible Participants are similarly situated).
(b) Nothing in the Plan, any Award Certificate or any other document or statement made with respect to the Plan, shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s employment or status as an officer, or any Participant’s service as a director, at any time, nor confer upon any Participant any right to continue as an employee, officer, or director of the Company or any Affiliate, whether for the duration of a Participant’s Award or otherwise.
(c) Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or any Affiliate and, accordingly, subject to Article 15, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company or any of its Affiliates.
(d) No Award gives a Participant any of the rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.
16.2. WITHHOLDING. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company or such Affiliate, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the Plan. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and the Company or such Affiliate will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. Unless otherwise determined by the Committee at the time the Award is granted or thereafter, any such withholding requirement may be satisfied, in whole or in part, by withholding from the Award Shares having a Fair Market Value on the date of withholding equal to the amount required to be withheld in accordance with applicable tax requirements, all in accordance with such procedures as the Committee approves (which procedures may permit withholding up to the maximum individual statutory rate in the applicable jurisdiction as may be permitted under then-current accounting principles to qualify for equity classification). All such elections shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
16.3. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.
(a) General. It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award Certificates shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers (other than in his or her capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.
(b) Definitional Restrictions. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installment) of such Non-Exempt Deferred Compensation would be effected, under the Plan or any Award Certificate by reason of the occurrence of a Change in Control, or the Participant’s Disability or separation from service, such Non-Exempt Deferred Compensation will not be payable or distributable to the Participant, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability or separation from service meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Award upon a Change in Control, Disability or separation from service, however defined. If this provision prevents the payment or distribution of any amount or benefit, or the application of a different form of payment of any amount or benefit, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c) Allocation among Possible Exemptions. If any one or more Awards granted under the Plan to a Participant could qualify for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through the Committee or the Head of Human Resources) shall determine which Awards or portions thereof will be subject to such exemptions.
(d) Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Plan or any Award Certificate by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined
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below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):
(i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Participant’s separation from service (or, if the Participant dies during such period, within 30 days after the Participant’s death) (in either case, the “Required Delay Period”); and
(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder; provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Plan.
(e) Installment Payments. If, pursuant to an Award, a Participant is entitled to a series of installment payments, such Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not to a single payment. For purposes of the preceding sentence, the term “series of installment payments” has the meaning provided in Treas. Reg. Section 1.409A-2(b)(2)(iii) (or any successor thereto).
(f) Timing of Release of Claims. Whenever an Award conditions a payment or benefit on the Participant’s execution and non-revocation of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the date of termination of the Participant’s employment; failing which such payment or benefit shall be forfeited. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (d) above, (i) if such 60-day period begins and ends in a single calendar year, the Company may make or commence payment at any time during such period at its discretion, and (ii) if such 60-day period begins in one calendar year and ends in the next calendar year, the payment shall be made or commence during the second such calendar year (or any later date specified for such payment under the applicable Award), even if such signing and non-revocation of the release occur during the first such calendar year included within such 60-day period. In other words, a Participant is not permitted to influence the calendar year of payment based on the timing of signing the release.
(g) Permitted Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Participants of deferred amounts, provided that such distribution(s) meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
16.4. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Certificate shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. In its sole discretion, the Committee may authorize the creation of grantor trusts or other arrangements to meet the obligations created under the Plan to deliver Shares or payments in lieu of Shares or with respect to Awards. This Plan is not intended to be subject to ERISA.
16.5. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate unless provided otherwise in such other plan. Nothing contained in the Plan will prevent the Company from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.
16.6. EXPENSES. The expenses of administering the Plan shall be borne by the Company and its Affiliates.
16.7. TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
16.8. GENDER AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
16.9. FRACTIONAL SHARES. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.
16.10. GOVERNMENT AND OTHER REGULATIONS.
(a) Notwithstanding any other provision of the Plan, no Participant who acquires Shares pursuant to the Plan may, during any period of time that such Participant is an affiliate of the Company (within the meaning of the rules and regulations of the Securities and Exchange Commission under the 1933 Act), sell such Shares, unless such offer and sale is made (i) pursuant to an effective registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant to an appropriate exemption from the registration requirement of the 1933 Act, such as that set forth in Rule 144 promulgated under the 1933 Act.
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(b) Notwithstanding any other provision of the Plan, if at any time the Committee shall determine that the registration, listing or qualification of the Shares covered by an Award upon any Exchange or under any foreign, federal, state or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such Award or the purchase or receipt of Shares thereunder, no Shares may be purchased, delivered or received pursuant to such Award unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Committee. Any Participant receiving or purchasing Shares pursuant to an Award shall make such representations and agreements and furnish such information as the Committee may request to assure compliance with the foregoing or any other applicable legal requirements. The Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to the Committee’s determination that all related requirements have been fulfilled. The Company shall in no event be obligated to register any securities pursuant to the 1933 Act or applicable state or foreign law or to take any other action in order to cause the issuance and delivery of such certificates to comply with any such law, regulation or requirement.
16.11. GOVERNING LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed in accordance with and governed by the laws of the State of Florida.
16.12. SEVERABILITY. In the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability will not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions will be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein.
16.13. NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. The Plan shall not restrict the authority of the Company, for proper corporate purposes, to draft or assume awards, other than under the Plan, to or with respect to any person. If the Committee so directs, the Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms of an Award granted to such Participant and specified by the Committee pursuant to the provisions of the Plan.
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AMENDED EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE AND EFFECT
The purpose of the Seacoast Banking Corporation of Florida Employee Stock Purchase Plan (the “Plan”) is to encourage and enable employees of Seacoast Banking Corporation of Florida (the “Company”) and any designated subsidiaries of the Company to acquire proprietary interests in the Company through ownership of the Company’s $.10 par value Class A common stock (the “Common Stock”). The Company believes that employees who participate in this Plan will have a closer identification with the Company and greater motivation to work for the Company’s success by virtue of their ability as shareholders to participate in the Company’s growth and earnings. It is the intention of the Company that the Plan qualify as an “employee stock purchase plan” under Section 423 (“Section 423”) of the Internal Revenue Code of 1986 (the “Code”), as now in effect or hereafter amended, and this Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of such Section 423.
2. SHARES RESERVED FOR THE PLAN
There shall be made available for purchase by employees under this Plan an aggregate of 800,000 shares of the Common Stock, subject to adjustment as provided in Section 10 of this Plan. Shares of Common Stock subject to this Plan may, at the election of the Company, be acquired by the Company or its agent through purchases in the open market, from the Company’s treasury or through original issuances of authorized shares for such purpose.
3. ADMINISTRATION OF THE PLAN
This Plan shall be administered, at the expense of the Company, by the Compensation and Governance Committee of the Board of Directors of the Company, which shall be designated the “Committee” for purposes of this Plan. The Committee may request advice or assistance or employ such other persons as may be necessary for the proper administration of this Plan. Subject to the express provisions of this Plan, the Committee shall have the authority to interpret this Plan, to prescribe, amend and rescind rules and regulations relating to this Plan, and to make all other determinations necessary or advisable in administering this Plan. All of such determinations shall be final and binding upon all persons unless otherwise determined by the Board of Directors of the Company.
4. ELIGIBILITY
(a) All employees of the Company, or of any existing or future subsidiaries of the Company designated by the Committee on or after the effective date of this Plan, shall be eligible to participate in the Plan (‘Eligible Employees’). The following individuals shall not be considered Eligible Employees: (i) any director, honorary director or advisory director of the Company or any subsidiary of the Company who is not an employee of the Company; and (ii) a worker employed by an organization which hires its own employees and assigns them to the Company to support or supplement the Company’s work force in situations such as employee absences, temporary skill shortages, seasonal workload conditions, and special assignments and projects.
(b) An employee of the Company who would otherwise be an Eligible Employee under paragraph 4(a) above shall not be eligible to participate in the Plan so long as and to the extent that such employee:
(i) on the first day of any month, would own directly or indirectly (using the attribution rules of Code Section 424(d)) shares of the capital stock of the Company possessing five percent (5%) or more of the total combined voting power or value of all classes of shares of the Company or any parent or subsidiary corporation organizedof the Company; or
(ii) has, during the calendar year, purchased stock under the Plan and existing under any other employee stock purchase plan then maintained by the Company or any parent or subsidiary corporation of the Company having an aggregate Fair Market Value (as defined in Section 6 below) equal to or exceeding $25,000.
5. PARTICIPATION AND WITHDRAWAL
(a) Each Eligible Employee may elect to participate in this Plan effective as the first day of any month following the Eligible Employee’s last date of hire by the Company (the “Enrollment Date”) by delivering to the Company’s Payroll Department no later than 15 days prior to the Enrollment
Date a signed Enrollment Form authorizing:
(i) a specified dollar deduction (not to be less than $10.00 or to exceed 5%) from the Eligible Employee’s regular salary (excluding overtime, bonuses, commissions, salary deferrals under a 401(k) plan, and other special compensation); or
(ii) a specified percentage deduction (not to be less than 1% or more than 5%) from the Eligible Employee’s regular salary (excluding overtime, bonuses, commissions, salary deferrals under a 401(k) plan, and other special compensation) paid by the Company to the Eligible Employee.
Notwithstanding the foregoing, in no event may an Eligible Employee subscribe for and purchase under the Plan more than 10,000 shares of Common Stock for a single month, subject to adjustment as provided in Section 10 of this Plan. Eligible Employees who elect to participate in this Plan are hereinafter referred to as “Participating Employees.”
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(b) [Reserved]
(c) A Participating Employee may at any time withdraw from the Plan and cease to be a Participating Employee in the Plan by delivering written notice within 15 days of the effective date of the withdrawal to the Company’s Payroll Department. An Employee who has ceased to be a Participating Employee may not again become a Participating Employee until he delivers an Enrollment Form to the Company’s payroll office no later than 15 days prior to the next Enrollment Date. A Participating Employee may increase or decrease the amount of the Employee’s payroll deduction by filing a new Enrollment Form with the Company’s Payroll Department at least 15 days prior to the next Enrollment Date which shall become effective on the first payroll date beginning after receipt of the Enrollment Form by the Company’s Payroll Department. An increase or decrease in the Employee’s payroll deduction may not be made more than once during any calendar month.
6. PURCHASE PRICE
The purchase price (“Purchase Price”) for each whole and fractional share of Common Stock purchased under this Plan, including shares purchased by dividend reinvestment, shall be:
(a) with respect to treasury shares or shares of Common Stock originally issued by the Company to the Plan, in an amount equal to ninety-five percent (95%) of the Fair Market Value of such whole shares on the Investment Date, or, if the Common Stock is not traded on such day, on the next preceding day on which the Common Stock was traded, with “Fair Market Value” defined for purposes of this paragraph (a) as the closing sale price per share of the Common Stock as reported on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) National Market System or any exchange on which the Common Stock is then listed; and
(b) with respect to shares of Common Stock to be acquired in the open market on an Investment Date, or, if the Common Stock is not traded on such day, on the next succeeding day on which the Common Stock is traded, equal to the Fair Market Value of such whole shares on such day, with Fair Market Value defined for purposes of this paragraph (b) as the actual per share purchase price of such shares on the NASDAQ National Market System or other exchange on which the Common Stock is then listed.
Notwithstanding the foregoing, in no event may the Purchase Price be less than the par value of the Common Stock.
7. METHOD OF PURCHASE AND STOCK ACCOUNTS
(a) The last business day of each month shall be an “Investment Date” under this Plan. Each Participating Employee having eligible funds in the Participating Employee’s Contribution Account on an Investment Date shall be deemed, without any further action, to have exercised the right to purchase the number of whole shares of Common Stock which the funds in the Participating Employee’s Contribution Account could purchase at the Purchase Price on such Investment Date. Fractional shares shall not be purchased under the Plan. If such shares are to be purchased from the Company’s treasury or through issuances of newly issued stock, the Plan will purchase on the Investment Date the number of whole shares of Common Stock which could be purchased by the funds contained in such Participating Employee’s Contribution Account at a per share Purchase Price as defined in paragraph 6(a) above. If the shares are to be purchased in the open market, the Plan will contribute to the Contribution Account maintained for each Participating Employee on each Investment Date with respect to which shares of Common Stock will be purchased in the open market, a cash amount equal to the product of .05263 multiplied by the amount contained in the Contribution Account, and will purchase on the Investment Date (or, if the Common Stock is not traded on the Investment Date, on the next succeeding day on which the Common Stock is traded) the number of whole shares of Common Stock which could be purchased by the funds contained in such Participating Employee’s Contribution Account at a per share Purchase Price as defined in paragraph 6(b) above. All whole shares purchased (rounded to the nearest ten thousandth) shall be maintained by the Company in separate Stock Accounts for each Participating Employee.
(b) Any and all cash dividends paid with respect to the whole shares of Common Stock held in a Participating Employee’s Stock Account shall be held by the Company without interest and shall be automatically reinvested on the next Investment Date in shares of Common Stock as provided under paragraph (a) above. The whole shares of Common Stock so purchased shall be added to the shares held for each Participating Employee in the Participating Employee’s Stock Account.
(c) As soon as practicable after each Investment Date, each Participating Employee shall receive a statement confirming the purchase of shares of Common Stock for the Participating Employee’s Stock Account and indicating the date of purchase, the number of shares purchased, the Purchase Price for such shares and the cumulative total number of shares credited to the Participating Employee’s Stock Account after such purchase.
(d) All expenses incurred in the purchase of shares of Common Stock from the Company or in the open market under this Plan shall be paid by the Company.
8. RIGHTS AS SHAREHOLDER
(a) Each Participating Employee shall have the right twice per calendar year to obtain a certificate for the number of whole shares of Common Stock credited to such Participating Employee’s Stock Account, in which event such Participating Employee’s Stock Account shall be reduced by such number of whole shares.
(b) Each Participating Employee shall have the right twice per calendar year to direct that any whole shares of Common Stock credited to such Participating Employee’s Stock Account be sold and that the proceeds, less expenses of sale, be remitted to such Participating Employee, in which event such Participating Employee’s Stock Account shall be reduced by such number of whole shares.
(c) As a beneficial owner of shares of Common Stock, each Participating Employee shall receive any and all information that is disseminated to the Company’s other shareholders. Each Participating Employee will also receive a proxy to vote any shares of Common Stock credited to such Participating Employee’s Stock Account. Shares of Common Stock credited to the Stock Account of a Participating Employee will not be voted if such Participating Employee does not give voting instructions as to such shares by proxy.
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9. RIGHTS NOT TRANSFERABLE
No right or interest of any Participating Employee under this Plan may be assigned or transferred by such Participating Employee except by will or according to the laws of descent and distribution, and no rights under this Plan may be exercised by any person other than the Participating Employee during the lifetime of the Participating Employee. An attempt by a Participating Employee to transfer his or her rights under the Plan shall be deemed a request to withdraw from the Plan under paragraph 5(c) hereof.
10. ADJUSTMENT IN CASE OF CHANGES AFFECTING THE COMMON STOCK, MERGER OR LIQUIDATION
In the event of any stock dividend or stock split with respect to the shares of Common Stock, or reclassification or similar change in the Common Stock, the number of shares of Common Stock to be made available by the Company for purchase under this Plan shall be adjusted proportionately, and such other adjustments shall be made as may be deemed necessary or equitable by the Board of Directors of the Company to prevent the diminution of the rights of Participating Employees under this Plan.
Subject to any required action by the shareholders of the Company, if the Company is the surviving or resulting corporation in any merger or consolidation, this Plan shall apply to the securities to which a holder of Common Stock subject to the Plan would have been entitled to purchase pursuant to the terms of the merger or consolidation. Upon the dissolution or liquidation of the Company or a merger or consolidation in which the Company is not the surviving or resulting corporation, the Committee may (i) terminate the Plan, issue certificates for shares to Participating Employees pursuant to the procedures described in Section 11 below and pay to Participating Employees amounts credited to their respective Contribution Accounts, (ii) continue the Plan with such securities subject to the Plan as a holder of the Common Stock subject to the Plan would have been entitled to receive pursuant to the terms of the dissolution, liquidation, merger or consolidation, or (iii) some combination of (i) and (ii).
11. RETIREMENT, TERMINATION, DEATH OR WITHDRAWAL
Upon the death, retirement or other termination of employment of a Participating Employee, or the withdrawal of a Participating Employee as provided by paragraph 5(c) of this Plan, the former Participating Employee, or a deceased Employee’s executor, administrator, or other personal representative shall receive delivery of the amount of such Participating Employee’s Contribution Account and a certificate representing the number of whole shares of Common Stock then credited to such Participating Employee’s Stock Account. Any fractional share of Common Stock then credited to such Participating Employee’s Stock Account shall be sold and the proceeds of such sale shall be remitted, less selling expenses, to such Participating Employee or a deceased Employee’s executor, administrator, or other personal representative.
12. AMENDMENT OF PLAN
The Board of Directors of the Company shall have the power at any time and from time to time to amend this Plan in whole or in part, except that no amendment may be made which:
(a) increases the number of shares of Common Stock subject to the Plan (other than pursuant to Section 10 of this Plan);
(b) reduces the Purchase Price; or
(c) permits persons, other than Eligible Employees, to participate in the Plan except with approval of such amendment by the shareholders of the Company.
13. TERMINATION OF PLAN
This Plan and all rights of Eligible and Participating Employees hereunder shall terminate:
(a) on the Investment Date on which the Participating Employees become entitled to purchase a number of shares of Common Stock greater than the number of reserved shares remaining available for purchase;
(b) at any time in the discretion of the Board of Directors of the Company; or
(c) in the event that the Plan is not approved by the shareholders of the Company within 12 months of the adoption hereof by the Company’s Board of Directors.
In the event of the termination of this Plan under subparagraph (a) above, the reserved shares of Common Stock remaining as of the termination date shall be issued to the Participating Employees on a pro rata basis according to the respective amounts then credited to their Contribution Accounts.
14. EFFECTIVE DATE OF PLAN
This Plan became effective on January 1, 1989, or as soon thereafter as a Registration Statement under the Securities Act of 1933, as amended, covering the shares of Common Stock to be made available for purchase under this Plan has become effective.
15. GOVERNMENT AND OTHER REGULATIONS
This Plan, the grant and exercise of the rights to purchase shares of Common Stock hereunder, and the Company’s obligation to issue or acquire and deliver shares upon the exercise of rights to purchase shares, shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or government agency as may, in the opinion of counsel for the Company, be required.
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16. INTERIM PROVISIONS
Notwithstanding any other provision of this Plan, this Section 16 shall be effective until the Plan has been approved or disapproved by the shareholders of the Company at the next meeting of shareholders after the adoption hereof at which approval of the Plan is considered. An officer and director of the Company who has filed or is required to file a Form 3 Initial Statement of Beneficial Ownership of Securities with respect to the Common Stock under Section 16(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), shall be permitted to participate in the Plan, but shall not be entitled to receive a distribution of any shares of Common Stock purchased under the Plan until such time as the Plan has been approved by the shareholders of the Company as contemplated by Rule 16b-3 promulgated under the Exchange Act. In the event that the Plan is not approved by the Company’s shareholders as contemplated by such Rule 16b-3, shares of Common Stock held for an officer or director will be forfeited and the officer or director shall be paid, on the date it is determined that shareholder approval as contemplated by Rule 16b-3 will not be obtained, the lesser of: (i) the aggregate amount previously contributed to the officer’s or director’s Contribution Account, without interest, and (ii) the Fair Market Value of any shares of Common Stock held for the officer or director and any amounts contained in the Contribution Account of the officer or director.
17. MISCELLANEOUS
(a) Tax Withholding. The Committee may make appropriate provisions for withholding of federal, state and local income taxes, and any other taxes, from a Participating Employee’s compensation to the extent the Committee deems such withholding to be legally required.
(b) Governing Law. The Plan shall be governed by and construed in accordance with the laws of the State of Florida (the “Corporation”), in accordance withexcept to the provisions of Section 607.1006extent such laws are preempted by the laws of the Florida Business Corporation Act (the “FBCA”), hereby certifies as follows:United States.
I.
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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.
SeacoastBank.com | 800 706 9991
815 COLORADO AVENUE | VOTE BY INTERNET - www.proxyvote.com VOTE BY PHONE - 1-800-690-6903 VOTE BY MAIL ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS |
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| D47408-P52923 | KEEP THIS PORTION FOR YOUR RECORDS | |
| DETACH AND RETURN THIS PORTION ONLY | ||
| 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 vote FOR ALL director nominees and FOR Proposals 2, 3, 4 and 5. | All | All | Except | |||||||||||||||
| ☐ | ☐ | ☐ | ||||||||||||||||
| 1. | Elect Directors | |||||||||||||||||
01) | Jacqueline L. Bradley | |||||||||||||||||
| 02) | H. Gilbert Culbreth, Jr. | |||||||||||||||||
| 03) | Christopher E. Fogal | |||||||||||||||||
| 04) | Charles M. Shaffer | |||||||||||||||||
| For | Against | Abstain | ||||||||||||||||
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
| 2. | Approval and Adoption of the Company's 2021 Incentive Plan | ☐ | ☐ | ☐ | ||||||||||||||
| ☐ | ☐ | ☐ | ||||||||||||||||
| ☐ | ☐ | ☐ | ||||||||||||||||
| ☐ | ☐ | ☐ | ||||||||||||||||
In their discretion, the | ||||||||||||||||||
Directions Taking Interstate 95
| 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 | |||||||||||||||
Arriving by Car Service or Taxi:
If arriving by a car service, please direct drop off at the front entrance lobby.
*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 24, 2018. 815 COLORADO AVENUE P.O. BOX 9012 STUART, FL 34995-9012 ATTN: KATHY HSU Meeting Information Meeting Type: Annual Meeting of Shareholders Record Date: March 26, 2018 Meeting Date: May 24, 2018 Time: 3:00 PM EDT Location: Hutchinson Shores Resort 3793 NE Ocean Blvd. Jensen Beach, Florida 34957 You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. See the reverse side of this notice to obtain proxy materials and voting instructions. E42083-P05184
Before You Vote How to Access the Proxy Materials Proxy Materials Available to VIEW or RECEIVE: 1. Notice & Proxy Statement 2. 2017 Annual Report on Form 10-K 3. Chairman's Letter How to View Online: Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) and visit: www.proxyvote.com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET: www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*: sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before May 10, 2018 to facilitate timely delivery. How To Vote Please Choose One of the Following Voting Methods Vote In Person: Please check the proxy materials for any special requirements for voting in person at the meeting. We recommend you vote in advance even if you plan to attend the meeting. You can vote in person at the meeting even if you previously voted and such in-person vote will replace your prior vote. Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. E42084-P05184
Voting Items The Board of Directors recommends a vote FOR ALL director nominees and FOR Proposals 2, 3, 4 and 5. 1. Elect Directors 01) Jacqueline L. Bradley 02) H. Gilbert Culbreth, Jr. 03) Christopher E. Fogal 04) Timothy S. Huval 05) Herbert A. Lurie 2. Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock 3. Amend the 2013 Incentive Plan to Increase Authorized Shares 4. Ratification of Appointment of Independent Auditor 5. Advisory (Non-binding) Vote on Executive Compensation In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. E42085-P05184
E42086-P05184
815 COLORADO AVENUE P.O. BOX 9012 STUART, FL 34995-9012 ATTN: KATHY HSU VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date (for shares held in the Employee Plans) or the day before the meeting date (for all other shares). Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Seacoast in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E42075-P05184 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY SEACOAST BANKING CORPORATION OF FLORIDA For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark "For All Except" and write the The Board of Directors recommends a vote FOR number(s) of the nominee(s) on the line below. ALL director nominees and FOR Proposals 2, 3, 4 and 5. 1. Elect Directors 01) Jacqueline L. Bradley 02) H. Gilbert Culbreth, Jr 03) Christopher E. Fogal 04) Timothy S. Huval For Against Abstain 05) Herbert A. Lurie 2. Amendment to the Company’s Amended and Restated Articles of Incorporation to Increase Authorized Common Stock 3. Amend the 2013 Incentive Plan to Increase Authorized Shares 4. Ratification of Appointment of Independent Auditor 5. Advisory (Non-binding) Vote on Executive Compensation In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. Please sign exactly as your name(s) appear(s) hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee, custodian or guardian, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting:
The Notice & Proxy Statement and our 20172020 Annual Report on Form 10-K and the Chairman's Letter are
available at www.proxyvote.com. E42076-P05184
| D47409-P52923 |
| THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEACOAST BANKING CORPORATION OF FLORIDA FOR THE 2021 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON WEDNESDAY, MAY 26, 2021 at 10:00 A.M. |
FOR REGISTERED SHAREHOLDERS: The undersigned shareholder(s) hereby appoint(s) Tracey L. 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 2021 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 26, 2021, 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 9, 2021. 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 23, 2021 (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 9, 2021. 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) |
P.O. BOX 9012 STUART, FL 34995-9012
| Your Vote Counts! SEACOAST BANKING CORPORATION OF FLORIDA 2021 Annual Meeting Vote by May 25, 2021 11:59 PM ET. For shares held in | ||
D47411-P52923 | |||
You invested in 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) themit’s time to represent andvote!
You have the right to vote all shares of the Common Stock of Seacoast Banking Corporation of Florida (“Seacoast”) that the undersigned may be entitled to voteon proposals being presented at the Annual MeetingMeeting. This is an important notice regarding the availability of Shareholdersproxy material for the shareholder meeting 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 on26, 2021.
Get informed before you vote
View the reverse side of this ballot, upon the proposals described in theNotice & Proxy Statement and the Notice ofour 2020 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 sharesReport on Form 10-K online OR you can receive a free paper or email copy of the Common Stockmaterial(s) by requesting prior to May 12, 2021. If you would like to request a copy 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 completematerial(s) for this form, signand/or future shareholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your name exactly as it appears on the reverse side and return itcontrol number (indicated below) in the enclosed envelope. To allow sufficient timesubject line. Unless requested, you will not otherwise receive a paper or email copy.
 | For complete information and to vote, visit www.ProxyVote.com | |||
| Control # |  | |||
Smartphone users Point your camera here and
|  | Vote in Person at the Meeting* May 26, 2021 10:00 AM EDT |
| Hutchinson Shores Resort 3793 NE Ocean Blvd. Jensen Beach, Florida 34957 | ||
*Please check the meeting materials for any special requirements for meeting attendance. At the trusteesmeeting, you will need 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. Asrequest 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 Planballot 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 suchthese 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)
Vote at www.ProxyVote.com
THIS IS NOT A VOTABLE BALLOT
This is an overview of the proposals being presented at the
upcoming shareholder meeting. Please follow the instructions on
the reverse side to vote these important matters.
| Board | |||
| Voting Items | Recommends | ||
| 1. | Election of Directors | ||
| 01) Jacqueline L. Bradley | |||
| 02) H. Gilbert Culbreth, Jr. |  | For | |
| 03) Christopher E. Fogal | |||
| 04) Charles M. Shaffer | |||
| 2. | Approval and Adoption of the Company’s 2021 Incentive Plan | | For |
| 3. | Amendment of Employee Stock Purchase Plan | | For |
| 4. | Advisory (Non-binding) Vote on Compensation of Named Executive Officers | | For |
| 5. | Ratification of Appointment of Crowe LLP as Independent Auditor for 2021 | | For |
| In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting. | |||
| Prefer to receive an email instead? While voting on www.ProxyVote.com, be sure to click “Sign up for E-delivery”. |
