1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-24119
[PORT ST. LUCIE LETTERHEAD]
April 16, 1997
To the Shareholders of
Port St. Lucie National Bank Holding Corp.:
You are cordially invited to attend a Special Meeting of Shareholders (the
"Special Meeting") of Port St. Lucie National Bank Holding Corp. ("PSHC") to be
held at PSHC's St. Lucie West office located at 1100 S.W. St. Lucie West
Boulevard, Port St. Lucie, Florida 34986 on Thursday, May 22, 1997, at 7:00
P.M., local time, notice of which is enclosed.
At the Special Meeting, you will be asked to consider and vote on a
proposal to approve an Agreement and Plan of Merger (the "Merger Agreement") by
and between PSHC and Seacoast Banking Corporation of Florida ("Seacoast")
pursuant to which PSHC will merge (the "Merger") with and into Seacoast. Upon
consummation of the Merger, each share of PSHC common stock issued and
outstanding (except for certain shares held by PSHC or Seacoast and shares held
by PSHC shareholders who perfect their dissenters' rights) and each issued and
outstanding PSHC stock warrant will be exchanged for a number of shares of
Seacoast Class A common stock determined by formulae that are based upon the
market price of Seacoast Class A common stock during a specified pricing period
prior to closing, all as more fully described in the accompanying Joint Proxy
Statement/Prospectus. Assuming that the $27.25 closing price of Seacoast Class A
common stock on April 11, 1997 is the closing price used in the exchange ratio
determination, then each share of PSHC common stock outstanding at the Effective
Time of the Merger will be exchanged for .9996 shares of Seacoast Class A common
stock and each PSHC stock warrant outstanding at the effective time of the
Merger will be exchanged for .6965 shares of Seacoast Class A common stock, with
cash being paid in lieu of issuing fractional shares. In addition, Seacoast will
assume all outstanding options to purchase shares of PSHC common stock. The
consideration to be received by holders of PSHC common stock and PSHC stock
warrants is subject to possible adjustment in certain circumstances relating to
certain categories of PSHC loans as described in the accompanying Joint Proxy
Statement/Prospectus.
The accompanying Joint Proxy Statement/Prospectus includes a description of
the proposed Merger and provides other specific information concerning the
Special Meeting. Also enclosed are the Notice of Meeting, the PSHC Annual Report
on Form 10-KSB for the year ended December 31, 1996, and the Seacoast 1996
Annual Report to Shareholders. Please read these materials carefully and
consider thoughtfully the information set forth in them.
The Merger has been approved unanimously by your Board of Directors which
recommends approval by you. Your Board believes that, among other benefits, the
Merger will result in a locally managed and controlled company with greater
financial strength and increased opportunity and flexibility for profitable
expansion and diversification, as well as expanded services and convenience to
our customers. Consummation of the Merger is subject to various conditions,
including approval of the Merger Agreement and the transactions contemplated
therein by PSHC and Seacoast shareholders, and approval of the Merger by the
applicable regulatory agencies.
Approval of the Merger Agreement will require the affirmative vote of a
majority of the issued and outstanding shares of PSHC common stock. ACCORDINGLY,
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO
COMPLETE, SIGN, AND RETURN PROMPTLY THE ENCLOSED PROXY CARD. IF YOU ATTEND THE
SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU PREVIOUSLY HAVE
RETURNED YOUR PROXY CARD. The proposed Merger with Seacoast is a significant
step for PSHC and your vote on this matter is of great importance.
ON BEHALF OF THE BOARD OF DIRECTORS, I URGE YOU TO VOTE FOR APPROVAL OF THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREIN BY MARKING THE
ENCLOSED PROXY CARD "FOR" ITEM ONE.
We look forward to seeing you at the Special Meeting.
Sincerely,
/s/ J. HAL ROBERTS, JR.
J. Hal Roberts, Jr.
President and Chief Executive Officer
2
[SEACOAST BANKING CORPORATION OF FLORIDA LETTERHEAD]
April 16, 1997
To the Shareholders of
Seacoast Banking Corporation of Florida:
You are cordially invited to attend the Annual Meeting of the Shareholders
(the "Annual Meeting") of Seacoast Banking Corporation of Florida ("Seacoast")
to be held at the Indian River Plantation Beach Resort, Hutchinson Island, 555
N.E. Ocean Boulevard, Stuart, Florida, on Friday, May 30, 1997, at 3:00 P.M.,
local time, notice of which is enclosed.
At the Annual Meeting, you will be asked to consider and vote on proposals
to approve the Agreement and Plan of Merger (the "Merger Agreement") by and
between Seacoast and Port St. Lucie National Bank Holding Corp. ("PSHC") and the
transactions contemplated therein, including the merger (the "Merger") of PSHC
with and into Seacoast and the issuance of shares of Seacoast Class A common
stock to holders of PSHC common stock and PSHC stock warrants. Upon consummation
of the Merger, each share of PSHC common stock issued and outstanding (except
for certain shares held by Seacoast or PSHC and shares held by PSHC shareholders
who perfect their dissenters' rights) and each issued and outstanding PSHC stock
warrant will be exchanged for a number of shares of Seacoast Class A common
stock determined by formulae that are based upon the market price of Seacoast
Class A common stock during a specified pricing period prior to closing, all as
more fully described in the accompanying Joint Proxy Statement/Prospectus.
Assuming that the $27.25 closing price of Seacoast Class A common stock on April
11, 1997 is the closing price used in the exchange ratio determination, then
each share of PSHC common stock outstanding at the effective time of the Merger
will be exchanged for .9996 shares of Seacoast Class A common stock and each
PSHC stock warrant outstanding at the effective time of the Merger will be
exchanged for .6965 shares of Seacoast Class A common stock, with cash being
paid in lieu of issuing fractional shares. In addition, Seacoast will assume all
outstanding options to purchase shares of PSHC common stock. The consideration
to be received by holders of PSHC common stock and PSHC stock warrants is
subject to possible adjustment in certain circumstances relating to certain
categories of PSHC loans as described in the accompanying Joint Proxy
Statement/Prospectus.
In addition, you will be asked at the Annual Meeting to consider and vote
upon (i) the reelection of eight directors to serve until the Annual Meeting of
Shareholders in 1998 and until their successors have been elected and qualified,
(ii) certain amendments to Seacoast's Articles of Incorporation, (iii) the
ratification of the appointment of Arthur Andersen LLP as independent auditors
for Seacoast for the fiscal year ending December 31, 1997 and (iv) such other
business as may properly come before the Annual Meeting.
Enclosed are the Notice of Meeting, Joint Proxy Statement/Prospectus and
Proxy, the Seacoast 1996 Annual Report to Shareholders and the PSHC Annual
Report on Form 10-KSB for the year ended December 31, 1996. The Joint Proxy
Statement/Prospectus includes a description of the proposed Merger, election of
directors and the amendments to the Articles of Incorporation and provides other
specific information concerning the Annual Meeting. Please read these materials
carefully and consider thoughtfully the information set forth in them.
The Merger has been approved unanimously by your Board of Directors, which
recommends its approval by you. Your Board believes that, among other benefits,
the Merger will result in a company with greater financial strength and
increased opportunity and flexibility for profitable expansion and
diversification. Consummation of the Merger is subject to various conditions,
including approval of the Merger Agreement
3
and the transactions contemplated therein by Seacoast and PSHC shareholders, and
approval of the Merger by the applicable regulatory agencies.
The combination with PSHC is a natural extension of Seacoast's banking
operations into the attractive Port St. Lucie market. Like Seacoast, PSHC has
built its franchise on community banking, local relationships, and sound lending
principles. Seacoast's management believes that the addition of PSHC's three
branches to the Seacoast banking system can only enhance Seacoast's strategy and
service in its market area.
Approval of the Merger Agreement and the amendments to the Articles of
Incorporation will require the affirmative vote of (i) the holders of at least
two-thirds of all of the shares of Class A common stock outstanding and entitled
to vote at the Annual Meeting, voting as a separate class, and (ii) the holders
of shares with at least two-thirds of all votes entitled to be cast by all
shares of Seacoast common stock (Class A and Class B) outstanding and entitled
to vote at the Annual Meeting, voting together as a single class. ACCORDINGLY,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
SIGN, AND RETURN PROMPTLY THE ENCLOSED PROXY CARD. If you attend the Annual
Meeting, you may vote in person if you wish, even if you previously have
returned your proxy card. The proposed Merger with PSHC is a significant step
for Seacoast and your vote on this matter is of great importance.
ON BEHALF OF THE BOARD OF DIRECTORS, I URGE YOU TO VOTE FOR APPROVAL OF THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING THE
ISSUANCE OF SHARES OF SEACOAST CLASS A COMMON STOCK, FOR REELECTION OF ALL EIGHT
NOMINEES FOR DIRECTOR NAMED ON THE ENCLOSED FORM OF PROXY, FOR THE AMENDMENTS TO
OUR ARTICLES OF INCORPORATION AND FOR THE RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS OUR INDEPENDENT AUDITORS, BY MARKING THE ENCLOSED FORM OF
PROXY "FOR" EACH OF SUCH PROPOSALS.
We want to thank you for your support this past year. We are proud of our
progress as reflected in the results for 1996, and we encourage you to review
carefully our Annual Report. The acquisition of PSHC is an important transaction
for Seacoast that will help Seacoast continue to be successful in 1997 and
future years. If you have any questions about the Merger or the enclosed
materials please write or call us. We look forward to seeing you at the Annual
Meeting.
Sincerely,
/s/ DENNIS S. HUDSON, III
Dennis S. Hudson, III
Secretary
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PORT ST. LUCIE NATIONAL BANK HOLDING CORP.
1100 S.W. ST. LUCIE WEST BOULEVARD
PORT ST. LUCIE, FLORIDA 34986
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1997
---------------------
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the "Special
Meeting") of Port St. Lucie National Bank Holding Corp. ("PSHC") will be held at
PSHC's St. Lucie West office located at 1100 S.W. St. Lucie West Boulevard, Port
St. Lucie, Florida 34986, on Thursday, May 22, 1997, at 7:00 P.M., local time,
for the following purposes:
1. Merger. To consider and vote upon a proposal to approve an
Agreement and Plan of Merger, dated as of February 19, 1997 (the "Merger
Agreement"), by and between PSHC and Seacoast Banking Corporation of
Florida, a Florida corporation ("Seacoast"), pursuant to which, among other
matters, PSHC will merge (the "Merger") with and into Seacoast. Each share
of PSHC common stock and each PSHC warrant issued and outstanding at the
effective time of the Merger will be converted into the right to receive
shares of Seacoast Class A common stock, subject to possible adjustment in
certain circumstances, all as more fully described in the accompanying
Joint Proxy Statement/Prospectus. A copy of the Merger Agreement is
reproduced as Appendix A to the accompanying Joint Proxy
Statement/Prospectus.
2. Other Business. To transact such other business as may come
properly before the Special Meeting.
Only shareholders of record at the close of business on April 1, 1997, will
be entitled to receive notice of and to vote at the Special Meeting or any
adjournment or postponement thereof. Approval of the Merger Agreement and the
transactions contemplated therein requires the affirmative vote of a majority of
the issued and outstanding shares of PSHC common stock.
THE BOARD OF DIRECTORS OF PSHC UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF THE MERGER AGREEMENT.
By Order of the Board Of
Directors
/s/ J. HAL ROBERTS, JR.
J. Hal Roberts, Jr.
President and Chief Executive Officer
Port St. Lucie, Florida
April 16, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE,
AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE PAID RETURN ENVELOPE IN ORDER TO ENSURE THAT YOUR SHARES WILL BE
REPRESENTED AT THE SPECIAL MEETING.
---------------------
PROXIES ARE SOLICITED BY PSHC'S BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO EXERCISE
---------------------
EACH SHAREHOLDER HAS THE RIGHT TO DISSENT FROM THE MERGER AGREEMENT AND
DEMAND PAYMENT OF THE FAIR VALUE OF HIS SHARES IF THE MERGER IS CONSUMMATED. THE
RIGHT OF ANY SHAREHOLDER TO RECEIVE SUCH PAYMENT IS CONTINGENT UPON STRICT
COMPLIANCE WITH THE REQUIREMENTS OF SECTION 607.1320 OF THE FLORIDA BUSINESS
CORPORATION ACT. THE FULL TEXT OF SECTION 607.1320 AND SECTIONS 607.1301 AND
607.1302 SETTING FORTH THE RIGHT TO DISSENT IS SET FORTH IN APPENDIX D TO THE
JOINT PROXY STATEMENT/PROSPECTUS. A SUMMARY OF THE REQUIREMENTS OF SECTION
607.1320 APPEARS IN "DESCRIPTION OF THE MERGER -- DISSENTERS' RIGHTS" IN THE
ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS, WHICH IS QUALIFIED IN ITS
ENTIRETY BY THE STATUTORY PROVISIONS INCLUDED IN APPENDIX D.
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SEACOAST BANKING CORPORATION OF FLORIDA
815 COLORADO AVENUE
STUART, FLORIDA 34994
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 30, 1997
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Seacoast Banking Corporation of Florida ("Seacoast") will be held
at the Indian River Plantation Beach Resort, Hutchinson Island, 555 N.E. Ocean
Boulevard, Stuart, Florida, on Friday, May 30, 1997, at 3:00 P.M., local time,
for the following purposes:
1. Merger. To consider and vote upon a proposal to approve an
Agreement and Plan of Merger, dated as of February 19, 1997 (the "Merger
Agreement"), by and between Port St. Lucie National Bank Holding Corp.
("PSHC") and Seacoast, pursuant to which, among other matters, PSHC will
merge (the "Merger") with and into Seacoast and Seacoast shall issue up to
900,000 shares of Seacoast Class A common stock. Each share of PSHC common
stock and each PSHC stock warrant issued and outstanding at the effective
time of the Merger will be converted into the right to receive shares of
Seacoast Class A common stock, subject to possible adjustment in certain
circumstances, all as more fully described in the accompanying Joint Proxy
Statement/Prospectus. A copy of the Merger Agreement is reproduced as
Appendix A to the accompanying Joint Proxy Statement/Prospectus.
2. Elect Directors. To consider and vote upon the reelection of eight
directors to serve until the Annual Meeting of Shareholders in 1998 and
until their successors have been elected and qualified.
3. Amendment of Articles of Incorporation. To consider and vote upon
a proposal to approve an amendment to Seacoast's Articles of Incorporation
to clarify the voting requirements in connection with certain business
combinations.
4. Ratify Auditors. To ratify the appointment of Arthur Andersen LLP
as independent auditors for Seacoast for the fiscal year ending December
31, 1997.
5. Other Business. To transact such other business as may come
properly before the Annual Meeting.
Only shareholders of record at the close of business on April 14, 1997,
will be entitled to receive notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof. Approval of the Merger Agreement and the
transactions contemplated therein and the amendment to the Articles of
Incorporation will require the affirmative vote of (i) the holders of at least
two-thirds of all of the shares of Seacoast Class A common stock outstanding and
entitled to vote at the Annual Meeting, voting as a separate class, and (ii) the
holders of shares with at least two-thirds of all votes entitled to be cast by
all shares of Seacoast common stock (both Class A and Class B) outstanding and
entitled to vote at the Annual Meeting, voting together as a single class. The
vote required for the reelection of the eight directors is a plurality of the
votes cast by the shares entitled to vote in the election, provided that a
quorum is present. The proposal to ratify the appointment of Arthur Andersen LLP
as independent auditors will be approved if the votes cast by the holders of the
shares of Seacoast common stock present, or represented, at the Annual Meeting
and entitled to vote on the matter favoring this proposal exceed the votes cast
in opposition to the proposal.
6
THE BOARD OF DIRECTORS OF SEACOAST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING THE ISSUANCE OF SHARES OF SEACOAST CLASS A COMMON STOCK TO
HOLDERS OF PSHC COMMON STOCK AND HOLDERS OF PSHC STOCK WARRANTS, FOR THE
REELECTION OF ALL EIGHT NOMINEES FOR DIRECTOR NAMED ON THE ENCLOSED FORM OF
PROXY, FOR THE APPROVAL OF THE AMENDMENTS TO SEACOAST'S ARTICLES OF
INCORPORATION AND FOR THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT AUDITORS.
By Order of the Board of Directors
DENNIS S. HUDSON, III
Dennis S. Hudson, III
Corporate Secretary
Stuart, Florida
April 16, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE
PAID RETURN ENVELOPE IN ORDER TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED AT
THE ANNUAL MEETING.
PROXIES ARE BEING SOLICITED BY THE SEACOAST BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO EXERCISE.
2
7
PROSPECTUS
SEACOAST BANKING CORPORATION OF FLORIDA
CLASS A COMMON STOCK, $0.10 PAR VALUE
---------------------
JOINT PROXY STATEMENT
SEACOAST BANKING CORPORATION PORT ST. LUCIE NATIONAL BANK
OF FLORIDA HOLDING CORP.
815 COLORADO AVENUE 1100 S.W. ST. LUCIE WEST BOULEVARD
STUART, FLORIDA 34994 PORT ST. LUCIE, FLORIDA 34986
This Prospectus of Seacoast Banking Corporation of Florida, a bank holding
company organized and existing under the laws of the State of Florida
("Seacoast"), relates to up to 900,000 shares of Class A common stock, par value
$0.10 per share ("Seacoast Class A Stock"), including shares subject to assumed
employee stock options, which are issuable to the holders of common stock and
warrants of Port St. Lucie National Bank Holding Corp., a bank holding company
organized and existing under the laws of the State of Florida ("PSHC"), upon
consummation of the proposed merger (the "Merger") of PSHC with and into
Seacoast pursuant to the terms of the Agreement and Plan of Merger, dated as of
February 19, 1997, by and between Seacoast and PSHC (the "Merger Agreement").
At the effective time of the Merger (the "Effective Time"), except as
described herein, each issued and outstanding share of common stock, par value
$.01 per share, of PSHC ("PSHC Common Stock") and each issued and outstanding
warrant to purchase shares of PSHC Common Stock ("PSHC Warrants") will be
converted into and exchanged for that number of shares of Seacoast Class A Stock
determined in accordance with the formulae described herein which are dependent
on the market price of Seacoast Class A Stock during a pricing period prior to
the Effective Time. Holders of PSHC Common Stock who intend to dissent will lose
their dissenters' rights of appraisal if they vote for the Merger.
This Prospectus also serves as a Joint Proxy Statement of PSHC and
Seacoast, and is being furnished to the shareholders of PSHC and Seacoast in
connection with the solicitation of proxies by the Board of Directors of PSHC
for use at its special meeting of shareholders to be held on May 22, 1997
(including any adjournment or postponement thereof, the "PSHC Special Meeting"),
and by the Board of Directors of Seacoast for use at its annual meeting of
shareholders to be held on May 30, 1997 (including any adjournment or
postponement thereof, the "Seacoast Annual Meeting"), to consider and vote upon
the Merger Agreement and the transactions contemplated therein, and in the case
of Seacoast, to consider and vote upon the reelection of eight directors,
certain amendments to Seacoast's Articles of Incorporation and the ratification
of the appointment of Seacoast's independent auditors. This Joint Proxy
Statement/Prospectus ("Joint Proxy Statement") is being mailed to shareholders
of PSHC and Seacoast on or about April 18, 1997.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS, OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Joint Proxy Statement is April 16, 1997.
8
AVAILABLE INFORMATION
Seacoast and PSHC are subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, are required to file reports, proxy statements, and other
information with the Securities and Exchange Commission (the "SEC"). Copies of
such reports, proxy statements, and other information can be obtained, at
prescribed rates, from the SEC by addressing written requests for such copies to
the Public Reference Section at the SEC at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549. In addition, such reports, proxy statements, and
other information can be inspected at the public reference facilities referred
to above and at the regional offices of the SEC at 7 World Trade Center, 13th
Floor, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. The SEC also maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants such as Seacoast and PSHC that file electronically with
the SEC. The address of such Web site is http://www.sec.gov.
This Joint Proxy Statement constitutes part of the Registration Statement
on Form S-4 of Seacoast (including any exhibits and amendments thereto, the
"Registration Statement") filed with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the securities offered hereby.
This Joint Proxy Statement does not include all of the information in the
Registration Statement, certain portions of which have been omitted pursuant to
the rules and regulations of the SEC. For further information about Seacoast and
the securities offered hereby, reference is made to the Registration Statement.
The Registration Statement may be inspected and copied, at prescribed rates, at
the SEC's public reference facilities at the addresses set forth above. In
addition, Seacoast Common Stock is traded on the Nasdaq National Market System.
Reports, proxy statements, and other information concerning Seacoast may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Certain financial and other information relating to Seacoast and PSHC is
contained in the documents indicated below under "DOCUMENTS INCORPORATED BY
REFERENCE."
All information contained in this Joint Proxy Statement or incorporated
herein by reference with respect to Seacoast was supplied by Seacoast, and all
information contained in this Joint Proxy Statement or incorporated herein by
reference with respect to PSHC was supplied by PSHC. Although neither Seacoast
nor PSHC has actual knowledge that would indicate that any statements or
information (including financial statements) relating to the other party
contained or incorporated herein are inaccurate or incomplete, neither Seacoast
nor PSHC warrants the accuracy or completeness of such statements or information
as they relate to the other party.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS JOINT PROXY
STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS JOINT PROXY STATEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE
SECURITIES OFFERED BY THIS JOINT PROXY STATEMENT IN ANY JURISDICTION TO OR FROM
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS JOINT PROXY STATEMENT NOR ANY
DISTRIBUTION OF THE SECURITIES BEING OFFERED PURSUANT TO THIS JOINT PROXY
STATEMENT SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF SEACOAST OR PSHC OR THE INFORMATION SET FORTH
HEREIN SINCE THE DATE OF THIS JOINT PROXY STATEMENT.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the SEC by Seacoast pursuant
to the Exchange Act are hereby incorporated by reference herein:
(a) Seacoast's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) Seacoast's Current Reports on Form 8-K and 8-K/A dated February 19
and February 20, 1997; and
ii
9
(c) The description of Seacoast Class A Common Stock contained in
Seacoast's Registration Statement filed under Section 12 of the Exchange
Act including all amendments or reports filed for the purpose of updating
such description.
The following documents previously filed with the SEC by PSHC pursuant to
the Exchange Act are hereby incorporated by reference herein:
(a) PSHC's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996; and
(b) PSHC's Current Report on Form 8-K dated February 19, 1997.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
Accompanying this Joint Proxy Statement are copies of Seacoast's 1996
Annual Report to Shareholders and PSHC's Annual Report on Form 10-KSB for the
year ended December 31, 1996. The information contained in this Joint Proxy
Statement should be read in conjunction with the foregoing materials.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. SEACOAST DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
WILLIAM R. HAHL, SEACOAST BANKING CORPORATION OF FLORIDA, 815 COLORADO AVENUE,
STUART, FLORIDA 34994 (TELEPHONE (561) 287-4000). PSHC DOCUMENTS ARE AVAILABLE
UPON REQUEST FROM J. HAL ROBERTS, JR., PORT ST. LUCIE NATIONAL BANK HOLDING
CORP., 1100 S.W. ST. LUCIE WEST BOULEVARD, ST. LUCIE, FLORIDA 34986. IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY NO LATER
THAN MAY 15, 1997 IN THE CASE OF PSHC AND MAY 23, 1997 IN THE CASE OF SEACOAST.
iii
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TABLE OF CONTENTS
PAGE
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Summary..................................................... 1
The Parties............................................... 1
Meetings of Shareholders; Record Date; Vote Required...... 1
The Merger................................................ 3
Comparative Per Share Data................................ 9
Other Proposals to be Considered at the Seacoast Annual
Meeting................................................ 10
Selected Financial Data..................................... 11
Selected Condensed Consolidated Pro Forma Financial Data.... 13
Meetings of Shareholders.................................... 14
Dates, Places, Times, and Purposes........................ 14
Record Dates, Voting Rights, Required Votes, and
Revocability of Proxies................................ 14
Description of the Merger................................... 17
General................................................... 17
Effect of the Merger on PSHC Stock Options................ 18
Background of and Reasons for the Merger.................. 19
Opinion of PSHC's Financial Advisor....................... 22
Opinion of Seacoast's Financial Advisor................... 24
Effective Time of the Merger.............................. 26
Distribution of Seacoast Stock Certificates............... 27
Conditions to Consummation of the Merger.................. 28
Regulatory Approvals...................................... 28
Waiver, Amendment, and Termination........................ 29
Dissenters' Rights........................................ 30
Conduct of Business Pending the Merger.................... 31
Management and Operations After the Merger; Interest of
Certain Persons in the Merger.......................... 33
Certain Federal Income Tax Consequences................... 36
Accounting Treatment...................................... 37
Expenses and Fees......................................... 37
Resales of Seacoast Class A Stock......................... 37
Effect of the Merger on Rights of Shareholders.............. 38
Authorized Capital Stock.................................. 38
Amendment of Articles of Incorporation and Bylaws......... 39
Classified Board of Directors and Absence of Cumulative
Voting................................................. 40
Removal of Directors...................................... 40
Indemnification........................................... 41
Special Meetings of Shareholders.......................... 41
Actions by Shareholders Without a Meeting................. 42
Mergers, Consolidations, and Sales of Assets.............. 42
Shareholders' Rights to Examine Books and Records......... 43
Dividends................................................. 43
Comparative Market Prices and Dividends..................... 44
Business of PSHC............................................ 46
General................................................... 46
Business of Seacoast........................................ 46
General................................................... 46
Pro Forma Financial Information............................. 47
Election of Seacoast Directors.............................. 50
General................................................... 50
Information About the Board of Directors and Its
Committees............................................. 54
Executive Officers........................................ 54
Compensation of Executive Officers........................ 54
iv
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PAGE
----
Salary and Benefits Committee Report...................... 55
Grants of Options/SARs in 1996............................ 59
Aggregated Option/SAR Exercises in 1996 and 1996 Year-End
Option/SAR Values...................................... 59
Profit Sharing Plan....................................... 59
Performance Graph......................................... 60
Employment and Severance Agreements....................... 60
Salary and Benefits Committee Interlocks and Insider
Participation............................................. 61
Certain Transactions and Business Relationships............. 61
Principal Shareholders...................................... 62
Amendments to Seacoast's Articles of Incorporation.......... 63
Ratification of the Appointment of Seacoast Independent
Auditors.................................................. 63
Section 16(a) Beneficial Ownership Reporting Compliance..... 63
Shareholder Proposals for 1998 Annual Meeting............... 64
Other Matters............................................... 64
Other Information........................................... 64
Proxy Solicitation Costs.................................. 64
Experts..................................................... 64
Opinions.................................................... 64
Appendices:
Appendix A -- Agreement and Plan of Merger dated as of February 19, 1997
by and between Seacoast Banking Corporation of Florida and
Port St. Lucie National Bank Holding Corp.
Appendix B -- Opinion of Austin Associates, Inc.
Appendix C -- Opinion of The Robinson-Humphrey Company, Inc.
Appendix D -- Sections of the Florida Business Corporation Act Relating to
Dissenters' Appraisal Rights
Appendix E -- Revised Article XI of Seacoast Banking Corporation of
Florida's Articles of Incorporation
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SUMMARY
The following is a summary of certain information contained in this Joint
Proxy Statement and the documents incorporated herein by reference. This summary
is not intended to be a complete description of the matters covered in this
Joint Proxy Statement and is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Joint Proxy
Statement. Shareholders are urged to read carefully the entire Joint Proxy
Statement, including the Appendices. As used in this Joint Proxy Statement, the
terms "Seacoast" and "PSHC" refer to those entities, respectively, and, where
the context requires, to those entities and their respective subsidiaries.
THE PARTIES
PSHC. PSHC is a bank holding company headquartered in Port St. Lucie,
Florida, with three banking offices in St. Lucie County, Florida. As of December
31, 1996, PSHC had total consolidated assets of approximately $130 million,
total consolidated deposits of approximately $119 million, and total
consolidated shareholders' equity of approximately $10 million. Through its
banking subsidiary, Port St. Lucie National Bank ("PSNB"), and its wholly-owned
subsidiary, Spirit Mortgage Corp., PSHC offers a broad range of banking and
banking-related services.
PSHC was organized under the laws of the State of Florida and commenced
operations in 1989 as a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). PSHC's principal executive
office is located at 1100 S.W. St. Lucie West Boulevard, Port St. Lucie, Florida
34986, and its telephone number at such address is (561) 340-2800.
Additional information with respect to PSHC and its subsidiaries is
included in documents incorporated by reference in this Joint Proxy Statement.
See "AVAILABLE INFORMATION," "DOCUMENTS INCORPORATED BY REFERENCE," and
"BUSINESS OF PSHC."
Seacoast. Seacoast is a bank holding company headquartered in Stuart,
Florida, with 19 banking offices in Florida. As of December 31, 1996, Seacoast
had total consolidated assets of approximately $808 million, total consolidated
deposits of approximately $693 million, and total consolidated shareholders'
equity of approximately $67 million. Through its banking subsidiary, First
National Bank and Trust Company of the Treasure Coast ("FNB"), and other
indirect subsidiaries, Seacoast offers a full array of deposit accounts and
retail banking services, engages in consumer and commercial lending and provides
a wide variety of trust and investment brokerage services. Seacoast's primary
service area is the "Treasure Coast", which consists of the counties of Martin,
St. Lucie and Indian River on Florida's southeastern coast. FNB operates banking
offices in the following locations: five in Stuart, two in Palm City, one in
Jensen Beach, two on Hutchinson Island, one in Hobe Sound, two in Vero Beach,
one in Sebastian, four in Port St. Lucie, and one in Ft. Pierce.
Seacoast was organized under the laws of the State of Florida and commenced
operations in 1983 as a registered bank holding company under the BHC Act.
Seacoast's principal executive office is located at 815 Colorado Avenue, Stuart,
Florida 34994, and its telephone number at such address is (561) 287-4000.
Additional information with respect to Seacoast and its subsidiaries is
included in documents incorporated by reference in this Joint Proxy Statement.
See "AVAILABLE INFORMATION," "DOCUMENTS INCORPORATED BY REFERENCE," and
"BUSINESS OF SEACOAST."
MEETINGS OF SHAREHOLDERS; RECORD DATE; VOTE REQUIRED
PSHC. This Joint Proxy Statement is being furnished to the holders of PSHC
Common Stock in connection with the solicitation by the PSHC Board of Directors
of proxies for use at the PSHC Special Meeting at which PSHC shareholders will
be asked to vote to approve the Merger Agreement and the transactions
contemplated therein. The PSHC Special Meeting will be held at PHSC's St. Lucie
West office, 1100 S.W. St. Lucie West Boulevard, St. Lucie, Florida 34986, on
Thursday, May 22, 1997, at 7:00 P.M. local time. See "MEETINGS OF
SHAREHOLDERS -- Dates, Places, Times, and Purposes."
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PSHC's Board of Directors has fixed the close of business on April 1, 1997,
as the record date (the "PSHC Record Date") for determination of the
shareholders entitled to notice of and to vote at the PSHC Special Meeting. Only
holders of record of shares of PSHC Common Stock on the PSHC Record Date will be
entitled to notice of and to vote at the PSHC Special Meeting. Each share of
PSHC Common Stock is entitled to one vote. Shareholders who execute proxies
retain the right to revoke them at any time prior to being voted at the PSHC
Special Meeting. On the PSHC Record Date, there were 744,655 shares of PSHC
Common Stock issued and outstanding held by 867 holders of record. See "MEETINGS
OF SHAREHOLDERS -- Record Dates, Voting Rights, Required Votes, and Revocability
of Proxies."
Approval of the Merger Agreement and the transactions contemplated therein
requires the affirmative vote by holders of a majority (372,328 shares) of the
shares of PSHC Common Stock entitled to vote at the PSHC Special Meeting. As of
the PSHC Record Date, PSHC's directors beneficially owned 184,655 shares, or
24.8%, of the outstanding shares of PSHC Common Stock entitled to vote at the
Special Meeting, and have agreed to vote such shares of PSHC Common Stock in
favor of the Merger. In addition, executive officers of PSHC who are not PSHC
directors beneficially own 7,223 shares, or 1.0%, of PSHC Common Stock and are
expected to vote such shares in favor of the Merger. As of the PSHC Record Date,
Seacoast and its affiliates held no shares of PSHC Common Stock. See "MEETINGS
OF SHAREHOLDERS -- Record Dates, Voting Rights, Required Votes, and Revocability
of Proxies."
PSHC'S SHAREHOLDERS HAVE THE RIGHT TO DISSENT FROM APPROVAL OF THE MERGER
AGREEMENT AND OBTAIN PAYMENT FOR THE FAIR VALUE OF THEIR SHARES OF PSHC COMMON
STOCK BY STRICTLY FOLLOWING THE PROCEDURES DESCRIBED IN SECTION 607.1301, ET
SEQ. OF THE FLORIDA BUSINESS CORPORATION ACT ("FBCA"). SEE "DESCRIPTION OF THE
MERGER -- DISSENTERS' RIGHTS" AND APPENDIX D.
Seacoast. This Joint Proxy Statement is being furnished to the holders of
Seacoast Common Stock (as defined herein) in connection with the solicitation by
the Seacoast Board of Directors of proxies for use at the Seacoast Annual
Meeting at which Seacoast shareholders will be asked to vote on, among other
matters, a proposal to approve the Merger Agreement and the transactions
contemplated therein, including the issuance of Seacoast Class A Stock. The
Seacoast Annual Meeting will be held at the Indian River Plantation Beach
Resort, Hutchinson Island, 555 N.E. Ocean Boulevard, Stuart, Florida, on Friday,
May 30, 1997, at 3:00 P.M., Local Time. See "MEETINGS OF SHAREHOLDERS -- Dates,
Places, Times, and Purposes."
Seacoast's Board of Directors has fixed the close of business on April 14,
1997, as the record date (the "Seacoast Record Date") for determination of the
shareholders entitled to notice of and to vote at the Seacoast Annual Meeting.
Only holders of record of shares of Seacoast Common Stock on the Seacoast Record
Date will be entitled to notice of and to vote at the Seacoast Annual Meeting.
Shareholders who execute proxies retain the right to revoke them at any time
prior to being voted at the Seacoast Annual Meeting. On the Seacoast Record
Date, there were 3,874,531 shares of Seacoast Class A Stock issued and
outstanding, which were held by 572 shareholders of record, and 384,638 shares
of Seacoast $.10 par value Class B Stock ("Class B Stock" and together with the
Seacoast Class A Stock, the "Seacoast Common Stock") issued and outstanding,
which were held by 97 shareholders of record.
Holders of record of Seacoast Class A Stock are entitled to one vote per
share on each matter to be considered and voted upon at the Seacoast Annual
Meeting. Holders of Class B Stock are entitled to 10 votes per share on each
matter to be considered and voted upon at the Seacoast Annual Meeting.
Seacoast's Articles of Incorporation also provide that, except as otherwise
required by law or by the Articles of Incorporation, holders of shares of
Seacoast Class A Stock and Class B Stock vote together as a single class on all
matters. The Seacoast Articles of Incorporation require that the holders of
Seacoast Class A Stock approve the Merger Agreement and the transactions
contemplated therein as a separate class as well as a single class together with
the Class B Stock. As a result of the ten-to-one voting preference accorded by
the Articles of Incorporation to shares of Class B Stock, as of the Seacoast
Record Date there were 7,720,911 votes entitled to be cast by the holders of the
outstanding Seacoast Common Stock, with the holders of the Class B Stock
entitled to cast 3,846,380 votes or 49.8% of such amount on matters on which the
holders of
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Seacoast Class A Stock and Class B Stock vote together as a single class. See
"MEETINGS OF SHAREHOLDERS -- Record Dates, Voting Rights, Required Votes, and
Revocability of Proxies."
Approval of the Merger Agreement and the transactions contemplated therein
and the amendment to the Articles of Incorporation will require the affirmative
vote of (i) the holders of at least two-thirds (2,583,021 votes) of all of the
shares of Seacoast Class A Stock outstanding and entitled to vote at the Annual
Meeting, voting as a separate class, and (ii) the holders of shares with at
least two-thirds (5,147,274 votes) of all votes entitled to be cast by all
shares of Seacoast Class A Stock and Class B Stock outstanding and entitled to
vote at the Annual Meeting, voting together as a single class. The vote required
for the reelection of the eight directors is a plurality of the votes cast by
the shares of Seacoast Common Stock entitled to vote in the election, provided
that a quorum is present. The proposal to ratify Arthur Andersen LLP as
independent auditors will be approved if the votes cast by the holders of the
shares of Seacoast Common Stock present, or represented, at the Annual Meeting
and entitled to vote on the matter favoring this proposal exceed the votes cast
in opposition to the proposal. As of the Seacoast Record Date, all directors and
executive officers of Seacoast as a group (11 persons) beneficially owned
803,059 shares of Seacoast Class A Stock, constituting 20.7% of the total number
of shares of Seacoast Class A Stock outstanding at that date and entitled to
vote at the Seacoast Annual Meeting, and 290,011 shares of Class B Stock,
constituting 75.4% of the total number of shares of Class B Stock outstanding at
that date and entitled to vote at the Seacoast Annual Meeting. Seacoast's
directors and executive officers beneficially owned as of that date, shares of
Seacoast Common Stock having an aggregate of 3,703,169 votes, or 48.0% of the
total votes represented by Seacoast Common Stock outstanding on the Seacoast
Record Date and entitled to vote at the Seacoast Annual Meeting. Seacoast's
directors and executive officers are anticipated to vote their shares of
Seacoast Common Stock in favor of the Merger and the other proposals described
herein. As of the Seacoast Record Date, PSHC held no shares of Seacoast Common
Stock. See "MEETINGS OF SHAREHOLDERS -- Record Dates, Voting Rights, Required
Votes, and Revocability of Proxies."
THE MERGER
General. The Merger Agreement provides for the acquisition of PSHC by
Seacoast pursuant to the merger of PSHC with and into Seacoast. It is
anticipated that immediately subsequent to the consummation of the Merger, PSNB
will be merged with and into FNB. A copy of the Merger Agreement is set forth at
Appendix A to this Joint Proxy Statement.
Consideration and Exchange Ratios. At the Effective Time, each share of
PSHC Common Stock then issued and outstanding (excluding shares held by PSHC,
Seacoast, or their respective subsidiaries, other than shares held in a
fiduciary capacity or in satisfaction of debts previously contracted, and
excluding shares held by PSHC shareholders who perfect their dissenters' rights)
will be converted into and exchanged for a number of shares of Seacoast Class A
Stock determined by a formula that is based upon the market price of Seacoast
Class A Stock during a specified pricing period prior to closing. Specifically,
each share of PSHC Common Stock as described in the preceding sentence will be
exchanged for that number of shares of Seacoast Class A Stock determined by
dividing (A) (i) the sum of (x) the average of the closing prices on the Nasdaq
National Market of Seacoast Class A Stock for the pricing period (the "Pricing
Period") of 20 trading days preceding the fifth trading day preceding the
Closing Date (the "Seacoast Stock Price") multiplied by 900,000 and (y)
$1,242,953, divided by (ii) the number of shares of PSHC Common Stock plus the
number of shares of PSHC Common Stock subject to PSHC stock options and PSHC
Warrants, outstanding at the Effective Time (the "Purchase Price Per Share"), by
(B) the Seacoast Stock Price (the "Stock Exchange Ratio"). In addition, each
outstanding PSHC Warrant at the Effective Time will be exchanged for that number
of shares of Seacoast Class A Stock determined by dividing (A) the difference
between the Purchase Price Per Share and $8.26 by (B) the Seacoast Stock Price
(the "Warrant Exchange Ratio"). Seacoast will also assume the obligations of
PSHC under various stock plans and programs and adopt substitute plans where
appropriate. The consideration to be received by holders of PSHC Common Stock
and PSHC Warrants is subject to possible adjustment in certain circumstances
relating to certain categories of PSHC loans as described herein. See
"DESCRIPTION OF THE MERGER -- Conduct of Business Pending the Merger
(subparagraph (vi))."
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The last sale price per share of Seacoast Class A Stock as reported on the
Nasdaq National Market on April 11, 1997 was $27.25. If the Seacoast Stock Price
(as defined above) were $27.25 at the Effective Time, each share of PSHC Common
Stock would be converted into .9996 shares of Seacoast Class A Stock (the
"Estimated Stock Exchange Ratio") and each PSHC Warrant would be converted into
.6965 shares of Seacoast Class A Stock (the "Estimated Warrant Exchange Ratio").
The exact Stock Exchange Ratio and Warrant Exchange Ratio are each
dependent on the closing prices of Seacoast Class A Stock as reported on Nasdaq
National Market during the Pricing Period. The actual market price of a share of
Seacoast Class A Stock at the Effective Time, or on the date on which
certificates representing such shares are received by former holders of PSHC
Common Stock or PSHC Warrants, may be more or less than the actual Seacoast
Stock Price, the last sale price per share of Seacoast Class A Stock on April
11, 1997 (on which the Estimated Stock Exchange Ratio and the Estimated Warrant
Exchange Ratio were determined) or on the date of the PSHC Special Meeting. PSHC
shareholders are urged to obtain information on the trading value of Seacoast
Class A Stock that is more recent than that provided in this Joint Proxy
Statement. See "COMPARATIVE MARKET PRICES AND DIVIDENDS."
No fractional shares of Seacoast Class A Stock will be issued. Rather, cash
(without interest) will be paid in lieu of any fractional share interest to
which any PSHC shareholder or PSHC Warrant holder would be entitled upon
consummation of the Merger, in an amount equal to such fractional part of a
share of Seacoast Class A Stock multiplied by the Seacoast Stock Price. See
"DESCRIPTION OF THE MERGER -- General."
The Merger Agreement also contemplates that at the Effective Time, each
award, option, or other right to purchase or acquire shares of PSHC Common Stock
pursuant to stock options, stock appreciation rights, or stock awards, excluding
the PSHC Warrants, ("PSHC Stock Options") granted by PSHC under the PSHC Stock
Plans, as that term is defined in the Merger Agreement, which are outstanding at
the Effective Time, whether or not exercisable, will be converted into and
become rights with respect to Seacoast Class A Stock on a basis adjusted to
reflect the Stock Exchange Ratio. As of the PSHC Record Date the only PSHC
Rights outstanding are 50,820 options to purchase PSHC Common Stock.
As of the PSHC Record Date, PSHC had 744,655 shares of PSHC Common Stock
issued and outstanding, 150,478.625 shares of PSHC Common Stock subject to PSHC
Warrants and 50,820 additional shares of PSHC Common Stock subject to PSHC Stock
Options. Seacoast will issue or reserve for issuance an aggregate of 900,000
shares of Seacoast Class A Stock in the Merger. Based on the number of shares of
PSHC Common Stock, PSHC Warrants, and PSHC Stock Options outstanding on the PSHC
Record Date and the Estimated Stock Exchange Ratio of .9996 and the Estimated
Warrant Exchange Ratio of .6965, it is anticipated that upon consummation of the
Merger, Seacoast would issue approximately 744,357 shares of Seacoast Class A
Stock to holders of PSHC Common Stock, 104,808 shares of Seacoast Class A Stock
to holders of PSHC Warrants, and reserve for issuance 50,799 shares of Seacoast
Class A Stock for future issuance to holders of PSHC Stock Options. Accordingly,
Seacoast would then have issued and outstanding approximately 4,723,696 shares
of Seacoast Class A Stock and have 50,799 additional shares of Seacoast Class A
stock reserved for issuance, based on the number of shares of Seacoast Class A
Stock issued and outstanding on the Seacoast Record Date.
Reasons for the Merger, Recommendations of the Boards of Directors of PSHC and
Seacoast.
The PSHC Board believes that the Merger is in the best interests of PSHC
and its shareholders and holders of PSHC Warrants, has unanimously approved the
Merger Agreement and unanimously recommends that PSHC shareholders vote "FOR"
approval of the Merger Agreement and the consummation of the transactions
contemplated therein. In deciding to approve the Merger Agreement and the
consummation of the transactions contemplated therein, the PSHC Board considered
a number of factors, including, among other matters, the financial terms of the
proposed Merger, increased liquidity, a comparison of the terms with comparable
transactions, the opinion of its financial advisors, and alternatives to the
Merger. See "DESCRIPTION OF THE MERGER -- Background of and Reasons for the
Merger."
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The Seacoast Board believes that the Merger is in the best interests of
Seacoast and its shareholders, has unanimously approved the Merger Agreement and
unanimously recommends that Seacoast shareholders vote "FOR" approval of the
Merger Agreement and the consummation of the transactions contemplated therein,
including the issuance of shares of Seacoast Class A Stock to holders of PSHC
Common Stock and PSHC Warrants. In deciding to approve the Merger Agreement and
the consummation of the transactions contemplated therein, the Seacoast Board
considered a number of factors, including the financial condition, results of
operations and future prospects of Seacoast and PSHC, PSHC's fit in Seacoast's
strategic plan for expanding in the St. Lucie market and other areas of the
Treasure Coast, the financial advice of The Robinson-Humphrey Company, Inc., the
likelihood of the Merger being approved by regulatory authorities without undue
conditions or delay, legal advice concerning the proposed Merger, and the
compatibility of the operations of Seacoast and PSHC. The Board of Directors of
Seacoast also recommends that shareholders vote "FOR" the reelection of all
eight nominees for directors named on the enclosed form of proxy, "FOR" the
approval of the amendments to Seacoast's Articles of Incorporation and "FOR" the
ratification of the appointment of Arthur Andersen LLP as independent auditors.
See "DESCRIPTION OF THE MERGER -- Background of and Reasons for the Merger."
The Boards of Directors of PSHC and Seacoast believe that the Merger will
result in a company with expanded opportunities for profitable growth and that
the combined resources and capital of PSHC and Seacoast will provide an enhanced
ability to compete in the changing and competitive financial services industry.
See "DESCRIPTION OF THE MERGER -- Background of and Reasons for the Merger."
Opinions of Financial Advisors.
Austin Associates, Inc. ("Austin Associates") has rendered an opinion to
PSHC that, based on and subject to the procedures, matters, and limitations
described in its opinion and such other matters as it considered relevant, as of
the date of its opinion, the terms of the Merger are fair, from a financial
point of view, to the holders of PSHC Common Stock and PSHC Warrants. The
opinion of Austin Associates is attached as Appendix B to this Joint Proxy
Statement. PSHC shareholders are urged to read the opinion in its entirety for a
description of the procedures followed, matters considered, and limitations on
the reviews undertaken in connection therewith. See "DESCRIPTION OF THE
MERGER -- Opinion of PSHC's Financial Advisor."
The Robinson-Humphrey Company, Inc. ("Robinson-Humphrey") has rendered an
opinion to Seacoast that, based on and subject to the procedures, matters, and
limitations described in its opinion and such other matters as it considered
relevant, as of the date of its opinion, the terms of the Merger are fair, from
a financial point of view, to the shareholders of Seacoast. The opinion of
Robinson-Humphrey is attached as Appendix C to this Joint Proxy Statement.
Seacoast shareholders are urged to read the opinion in its entirety for a
description of the procedures followed, matters considered, and limitations on
the reviews undertaken in connection therewith. See "DESCRIPTION OF THE
MERGER -- Opinion of Seacoast's Financial Advisor."
Effective Time.
Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Time will occur on the date and at the time that the
Florida Articles of Merger become effective with the Florida Secretary of State.
Unless otherwise agreed upon by PSHC and Seacoast, and subject to the conditions
to the obligations of the parties to effect the Merger, the parties will use
their reasonable efforts to cause the Effective Time to occur on the first
business day following the last to occur of (i) the effective date (including
the expiration of any applicable waiting period) of the last consent of any
regulatory authority required for the Merger and (ii) the date on which the
shareholders of PSHC and Seacoast approve the matters relating to the Merger
Agreement required to be approved by such shareholders by applicable law. See
"DESCRIPTION OF THE MERGER -- Effective Time of the Merger," "-- Conditions to
Consummation of the Merger," and "-- Waiver, Amendment, and Termination."
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NO ASSURANCE CAN BE PROVIDED THAT THE NECESSARY SHAREHOLDER AND REGULATORY
APPROVALS CAN BE OBTAINED OR THAT THE OTHER CONDITIONS PRECEDENT TO THE MERGER
CAN OR WILL BE SATISFIED. PSHC AND SEACOAST ANTICIPATE THAT ALL CONDITIONS TO
THE CONSUMMATION OF THE MERGER WILL BE SATISFIED SO THAT THE MERGER CAN BE
CONSUMMATED DURING THE FIRST SIX MONTHS OF 1997. HOWEVER, DELAYS IN THE
CONSUMMATION OF THE MERGER COULD OCCUR.
Exchange of Stock Certificates.
Promptly after the Effective Time, Seacoast will cause FNB, acting in its
capacity as exchange agent for Seacoast (the "Exchange Agent"), to mail to each
holder of record of a certificate or certificates (collectively, the
"Certificates") which, immediately prior to the Effective Time, represented
outstanding shares of PSHC Common Stock, and to each holder of record of PSHC
Warrants, a letter of transmittal and instructions for use in effecting the
surrender and cancellation of the Certificates and PSHC Warrants in exchange for
certificates representing shares of Seacoast Class A Stock. Cash will be paid to
the holders of PSHC Common Stock and PSHC Warrants in lieu of the issuance of
any fractional shares of Seacoast Class A Stock.
In no event will the holder of any surrendered Certificate(s) or PSHC
Warrants be entitled to receive interest on any cash to be issued to such
holder, and in no event will PSHC, Seacoast, or the Exchange Agent be liable to
any holder of PSHC Common Stock or a PSHC Warrant for any Seacoast Class A Stock
or dividends thereon or cash delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat, or similar law.
Regulatory Approvals And Other Conditions.
The Merger is subject to approval by the Board of Governors of the Federal
Reserve System (the "Federal Reserve"). An application was filed with the
Federal Reserve on March 20, 1997 for the requisite approvals under the BHC Act.
Although Seacoast and PSHC know of no reason that such approval will not be
obtained timely, there is no assurance that such regulatory approval will be
obtained, or as to the timing or content of any such approval. See "DESCRIPTION
OF THE MERGER -- Regulatory Approvals."
Consummation of the Merger is subject to various other conditions,
including among others, receipt of the required approvals of PSHC and Seacoast
shareholders, receipt of an opinion of counsel that the Merger will qualify as a
"tax free" reorganization for federal income tax purposes, receipt of a letter
from the independent accountants of Seacoast that the Merger will qualify for
pooling-of-interests accounting treatment, a minimum PSHC shareholders' equity
amount at Closing, and the absence of any regulatory restrictions that would
materially adversely affect the economic or business benefits contemplated by
Seacoast. See "DESCRIPTION OF THE MERGER -- Conditions to Consummation of the
Merger."
Conduct of Business Pending the Merger.
Each party has agreed in the Merger Agreement, among other things, to take
no action that would adversely affect its ability to perform its covenants and
agreements under the Merger Agreement. PSHC has agreed to operate its business
only in the usual, regular and ordinary course, and in a manner designed to
preserve intact its business organization and assets. Seacoast has also agreed
to continue to conduct its business in a manner designed in its reasonable
judgment, to enhance the long-term value of Seacoast Common Stock and Seacoast
business prospects. In addition, PSHC has agreed not to take certain actions
relating to the operation of PSHC pending consummation of the Merger without the
prior written consent of Seacoast, except as otherwise permitted by the Merger
Agreement, including, among other things: (i) becoming responsible for any
obligation for borrowed money in excess of $50,000, except in the ordinary
course of business consistent with past practices; (ii) paying any dividends,
repurchasing, redeeming or otherwise acquiring or exchanging any shares of its
capital stock, or, subject to certain exceptions, issuing any additional shares
of its capital stock or giving any person the right to acquire any such shares,
or issuing any long-term debt; (iii) acquiring control over any other entity;
(iv) subject to certain exceptions, granting any increase in compensation or
benefits, or paying any bonus, to any of its directors, officers or employees;
(v) modifying or adopting any employee benefit plans, including any employment
contract; (vi) modifying,
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amending or terminating any material contract, or (vii) making loans of certain
types and in certain designated geographic areas. See "DESCRIPTION OF THE
MERGER -- Conduct of Business Pending the Merger."
Waiver, Amendment, And Termination.
The Merger Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time by mutual action of PSHC and Seacoast, or by either
PSHC or Seacoast under certain circumstances, including if the Merger is not
consummated by August 31, 1997, unless the failure to consummate by such time is
due to a breach of the Merger Agreement by the party seeking to terminate. PSHC
also has a unilateral right to terminate the Merger Agreement if the Purchase
Price Per Share is less than $24.62. See "DESCRIPTION OF THE MERGER -- Waiver,
Amendment, and Termination."
Dissenter's Rights.
Each holder of PSHC Common Stock who perfects his rights is entitled to the
rights and remedies of a dissenting shareholder under Sections 607.1301 through
607.1320 of the FBCA, subject to strict compliance with the procedures set forth
therein. Among other things, a dissenting shareholder who has perfected his
dissenter's rights is entitled to receive an amount in cash equal to the "fair
value" of such holder's shares. A copy of Sections 607.1301 through 607.1320 of
the FBCA is set forth in APPENDIX D of this Joint Proxy Statement and a summary
thereof is included under "DESCRIPTION OF THE MERGER -- Dissenters' Rights." TO
PERFECT DISSENTERS' RIGHTS, A SHAREHOLDER MUST COMPLY WITH SECTION 607.1320 OF
THE FBCA WHICH REQUIRES, AMONG OTHER THINGS, THAT THE SHAREHOLDER GIVE PSHC
NOTICE OF SUCH HOLDER'S INTENTION TO DISSENT FROM THE APPROVAL OF THE MERGER
AGREEMENT PRIOR TO THE VOTE OF THE SHAREHOLDERS OF PSHC AT THE PSHC SPECIAL
MEETING AND THAT SUCH SHAREHOLDER NOT VOTE SUCH HOLDER'S SHARES IN FAVOR OF THE
MERGER AGREEMENT. ANY PSHC SHAREHOLDER WHO RETURNS A SIGNED PROXY BUT FAILS TO
PROVIDE INSTRUCTIONS AS TO THE MANNER IN WHICH SUCH HOLDER'S SHARES ARE TO BE
VOTED WILL BE DEEMED TO HAVE VOTED IN FAVOR OF THE MERGER AGREEMENT AND THUS
WILL NOT BE ENTITLED TO ASSERT DISSENTERS' RIGHTS.
Interests of Certain Persons in the Merger.
Certain members of PSHC's management and its Board of Directors have
interests in the Merger in addition to their interests as shareholders of PSHC
generally. These include, among other things, provisions in the Merger Agreement
relating to indemnification of directors and officers, director and officer
liability insurance, and eligibility for certain Seacoast employee benefits. It
is anticipated that promptly after the Effective Time, Jeffrey S. Furst and
Christopher E. Fogal, current directors of PSHC, will become members of
Seacoast's and FNB's Board of Directors. J. Hal Roberts, Jr., the current Chief
Executive Officer of PSHC, also will become an executive officer of Seacoast and
FNB pursuant to an employment agreement Mr. Roberts has entered into with
Seacoast and FNB. The following members of the PSHC Board of Directors will
become members of a newly created FNB Advisory Board of Directors for St. Lucie
County: Charles E. Bigge, Howard L. Bickford, Ellen J. Guterl, Harold H.
Goldman, Raymond L. Isenburg, Joe Marinaro, and George V. Weston. The Merger
Agreement provides that, after the Effective Time, Seacoast will provide
generally to officers and employees of PSHC and its subsidiaries, employee
benefits under employee benefit plans (other than stock options or other plans
involving the potential issuance of Seacoast Common Stock), on terms and
conditions that, when taken as a whole, are substantially similar to those
currently provided by Seacoast and its subsidiaries to their similarly situated
officers and employees. For purposes of participation, vesting and benefit
accrual under such employee benefit plans (other than benefit accrual in the
case of Seacoast's retirement plans), service with PSHC or its subsidiaries
prior to the Effective Time will be treated as service with Seacoast or its
subsidiaries. As of April 14, 1997, the directors and officers of PSHC
beneficially owned no shares of Seacoast Common Stock. See "DESCRIPTION OF THE
MERGER -- Management and Operations After the Merger" and "-- Interests of
Certain Persons in the Merger."
7
19
Certain Federal Income Tax Consequences of the Merger.
Consummation of the Merger is conditioned on the receipt by PSHC and
Seacoast of an opinion of Alston & Bird, counsel to Seacoast, to the effect
that, among other things, the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the exchange by a PSHC shareholder of PSHC Common Stock for shares
of Seacoast Class A Stock in the Merger will not result in gain or loss for
federal income tax purposes to such shareholder, except that gain or loss will
be recognized to the extent of cash received in lieu of a fractional share or as
a result of the exercise of appraisal rights. The tax opinion does not address
the tax consequences of the exchange of PSHC Warrants for Seacoast Class A Stock
in the Merger. Under current law, the tax consequences of the exchange of PSHC
Warrants for Seacoast Class A Stock in the Merger are unclear. Holders of PSHC
Warrants should consult their tax advisors as to the possible tax consequences
of such exchange. For a further discussion of the federal income tax
consequences of the Merger, see "DESCRIPTION OF THE MERGER -- Certain Federal
Income Tax Consequences."
BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER MAY VARY DEPENDING UPON THE
PARTICULAR CIRCUMSTANCES OF EACH SHAREHOLDER AND OTHER CIRCUMSTANCES, AND
BECAUSE BASED ON EXISTING BINDING AUTHORITIES, THE EXCHANGE OF WARRANTS MAY NOT
BE TREATED THE SAME AS THE EXCHANGE OF STOCK BY STOCKHOLDERS, EACH HOLDER OF
PSHC COMMON STOCK AND EACH HOLDER OF PSHC WARRANTS IS URGED TO CONSULT SUCH
HOLDER'S OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH
HOLDER OF THE MERGER (INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND
FOREIGN INCOME AND OTHER TAX LAWS).
Accounting Treatment.
It is intended that the Merger will be accounted for as a
pooling-of-interests for accounting and financial reporting purposes. See
"DESCRIPTION OF THE MERGER -- Accounting Treatment."
Certain Differences in Shareholders' Rights.
At the Effective Time, holders of PSHC Common Stock and Warrants, whose
rights are governed by PSHC's Articles of Incorporation and Bylaws and by the
FBCA, will automatically become Seacoast shareholders, and their rights as
Seacoast shareholders will be determined by Seacoast's Articles of Incorporation
and Bylaws and by the FBCA. The rights of Seacoast shareholders differ from the
rights of PSHC shareholders in certain important respects, including certain
anti-takeover effects. See "EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS."
Comparative Market Prices Of Common Stock; Dividends.
Seacoast Class A Stock is traded in the over-the-counter market and quoted
on the Nasdaq National Market under the symbol "SBCFA". PSHC Common Stock is not
traded in any established market, and infrequently trades in small amounts that
may not reflect its actual or market value. The following table sets forth the
reported closing sale prices per share for Seacoast Class A Stock and the
equivalent per share prices (as explained below) for PSHC Common Stock on
February 18, 1997, the last full business day preceding the public announcement
of the execution of the Merger Agreement, and on April 11, 1997, the latest
practicable date prior to the mailing of this Joint Proxy Statement. Also set
forth below are, to the knowledge of PSHC, the prices of the last trades in PSHC
Common Stock prior to each of the dates indicated. The actual number of shares
of Seacoast Class A Stock to be received for each share of PSHC Common Stock and
each PSHC Warrant will depend on, among other things, the Seacoast Stock Price
(as defined above), which will be determined during the Pricing Period of 20
trading days commencing five days prior to the Effective Time.
8
20
There can be no assurance as to the market price of the Seacoast Class A Stock
upon the Merger's Effective Time. See "-- Comparative Market Prices and
Dividends."
MARKET PRICE PSHC SEACOAST EQUIVALENT PER
PER SHARE AT: COMMON STOCK(1) COMMON STOCK SHARE PRICE(1)(2)
- ------------------------------------------------- --------------- ------------ -----------------
February 18, 1997................................ $23.00 $28.75 $28.74
April 11, 1997................................... 23.00 27.25 27.24
- ---------------
(1) Based on trades known to PSHC management in a limited trading market which
may or may not reflect the actual on market value of the PSHC Common Stock.
(2) The Equivalent Per Share Price is computed by multiplying the price of
Seacoast Class A Stock by the Estimated Stock Exchange Ratio of .9996 of a
share of Seacoast Class A Stock for each share of PSHC Common Stock.
Seacoast has paid cash dividends on its Class A Common Stock continuously
since 1983. PSHC has not paid cash dividends since 1994 on PSHC Common Stock.
COMPARATIVE PER SHARE DATA
The following table sets forth certain comparative per share data relating
to income, cash dividends, and book value on (i) an historical basis for
Seacoast and PSHC; (ii) a pro forma combined basis per share of Seacoast Class A
Stock, giving effect to the Merger; and (iii) an equivalent pro forma basis per
share of PSHC Common Stock, giving effect to the Merger. The PSHC and Seacoast
pro forma combined information and the PSHC pro forma equivalent information
give effect to the Merger on a pooling-of-interests accounting basis and
reflects the assumed Estimated Stock Exchange Ratio of .9996 of a share of
Seacoast Class A Stock for each share of PSHC Common Stock and the assumed
Estimated Warrant Exchange Ratio of .6965 of a share of Seacoast Class A Stock
for each PSHC Warrant. See "DESCRIPTION OF THE MERGER -- Accounting Treatment."
The pro forma data are presented for information purposes only and are not
necessarily indicative of the results of operations or combined financial
position that would have resulted had the Merger been consummated at the dates
or during the periods indicated, nor are they necessarily indicative of future
results of operations or combined financial position.
9
21
The information shown below should be read in conjunction with, and is
qualified in its entirety by, the historical financial statements of Seacoast
and PSHC, including the respective notes thereto, and the pro forma financial
information incorporated by reference or included herein. See "DOCUMENTS
INCORPORATED BY REFERENCE," "-- Selected Financial Data," "-- Summary Pro Forma
Financial Data," and "PRO FORMA FINANCIAL INFORMATION."
YEAR ENDED DECEMBER 31,
-----------------------
1996 1995 1994
----- ----- -----
(UNAUDITED EXCEPT
SEACOAST AND PSHC
HISTORICAL)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE PER COMMON SHARE
Seacoast historical....................................... $1.77 $1.58 $1.44
Seacoast and PSHC pro forma combined(1)................... 1.70 1.49 1.38
PSHC historical........................................... 1.43 1.16 1.28
PSHC equivalent pro forma combined(2)..................... 1.70 1.49 1.38
CASH DIVIDENDS DECLARED PER COMMON SHARE
Seacoast historical....................................... 0.65 0.54 0.49
Seacoast and PSHC pro forma combined(1)(3)................ 0.65 0.54 0.49
PSHC historical........................................... -- -- 0.30
PSHC equivalent pro forma combined(2)..................... 0.65 0.54 0.49
BOOK VALUE PER COMMON SHARE (PERIOD END)
Seacoast historical....................................... 15.68 14.75 12.98
Seacoast and PSHC pro forma combined(1)................... 15.08 14.05 12.27
PSHC historical(4)........................................ 13.77 12.11 10.01
PSHC equivalent pro forma combined(2)..................... 15.07 14.04 12.27
- ---------------
(1) Represents the pro forma combined information of Seacoast and PSHC as if the
Merger was were consummated on January 1, 1996, and was accounted for under
pooling-of-interest method of accounting transaction.
(2) Equivalent pro forma combined amounts per share of PSHC Common Stock
represent the pro forma combined per share amounts multiplied by the
Estimated Stock Exchange Ratio of .9996.
(3) Represents historical cash dividends declared per share by Seacoast as it is
assumed that Seacoast will not change its dividend policy as a result of the
Merger.
(4) Does not include the effects of outstanding warrants and options.
The PSHC pro forma equivalent data presented above will change if the
actual Stock Exchange Ratio and Warrant Exchange Ratio (which will be determined
based on the market price of Seacoast Class A Stock during a 20 trading day
measuring period prior to the Effective Time) are different from the Estimated
Stock Exchange Ratio and the Estimated Warrant Exchange Ratio. This data is
presented for illustration purposes only, and no inference is intended or may be
drawn concerning the actual Seacoast Stock Price which may occur or the
resulting Stock Exchange Ratio or Warrant Exchange Ratio.
OTHER PROPOSALS TO BE CONSIDERED AT THE SEACOAST ANNUAL MEETING
Election of Directors.
At the Seacoast Annual Meeting, Seacoast shareholders will be asked to
consider and vote upon the reelection of eight directors to serve on the
Seacoast Board of Directors until the Annual Meeting of Shareholders in 1998 and
until their successors have been elected and qualified. See "ELECTION OF
SEACOAST DIRECTORS."
Amendment of Articles of Incorporation.
At the Seacoast Annual Meeting, Seacoast shareholders will also be asked to
consider and vote upon a proposal to approve proposed amendments to Seacoast's
Articles of Incorporation to clarify the voting requirements in connection with
certain business combinations. See "AMENDMENTS TO SEACOAST'S ARTICLES OF
INCORPORATION."
10
22
Ratify Auditors.
At the Seacoast Annual Meeting, the Seacoast shareholders will also be
asked to ratify the appointment of Arthur Andersen LLP as independent auditors
for Seacoast for the fiscal year ending December 31, 1997. See "RATIFICATION OF
THE APPOINTMENT OF SEACOAST AUDITORS."
SELECTED FINANCIAL DATA
The following tables present certain selected historical financial
information for Seacoast and PSHC and are derived from the respective
consolidated financial statements of Seacoast and PSHC, including the respective
notes thereto, which are incorporated by reference in this Joint Proxy
Statement. The data should be read in conjunction with the historical financial
statements, including the respective notes thereto, and other financial
information concerning Seacoast and PSHC incorporated by reference or included
herein. See "DOCUMENTS INCORPORATED BY REFERENCE."
SEACOAST
SELECTED HISTORICAL FINANCIAL DATA
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA, RATIOS
AND AVERAGE NUMBER OF SHARES OUTSTANDING)
INCOME STATEMENT DATA:
Net interest income....................................... $ 31,102 $ 27,090 $ 25,200 $ 26,059 $ 27,477
Provision for loan losses................................. 450 250 145 150 1,103
Net interest income after loan loss provision............. 30,652 26,840 25,055 25,909 26,374
Total noninterest income excluding security gains
(losses)................................................ 8,714 7,517 6,475 7,588 7,693
Security gains (losses)................................... 72 480 752 1,204 1,759
Total noninterest expense................................. 27,517 24,246 23,005 24,345 26,655
Income tax expense........................................ 4,312 3,765 3,091 3,488 3,022
Income before cumulative effect of a change in accounting
principle............................................... 7,609 6,826 6,186 6,868 6,149
Provision for income taxes................................ 4,312 3,765 3,091 3,488 3,022
Cumulative effect on prior years of a change in accounting
for income taxes........................................ 0 0 0 264 0
Net income................................................ 7,609 6,826 6,186 7,132 6,149
PER SHARE DATA:
Income before cumulative effect of a change in accounting
principle............................................... $ 1.77 $ 1.58 $ 1.44 $ 1.60 $ 1.45
Cumulative effect on prior years of a change in accounting
for income taxes........................................ 0.00 0.00 0.00 0.06 0.00
Net income................................................ 1.77 1.58 1.44 1.66 1.45
Cash dividends............................................ 0.65 0.5 0.49 0.45 0.41
Book value................................................ 15.68 14.75 12.98 14.13 11.71
OTHER INFORMATION:
Average number of shares outstanding...................... 4,304,962 4,309,590 4,305,592 4,291,949 4,253,680
BALANCE SHEET DATA (PERIOD END):
Total assets.............................................. $ 808,408 $ 771,348 $ 662,711 $ 639,404 $ 613,558
Securities................................................ 208,800 213,638 258,661 283,732 292,935
Net Loans................................................. 467,311 410,898 289,417 255,995 247,754
Total deposits............................................ 692,757 660,967 559,629 533,486 551,368
Shareholders' equity(1)................................... 66,769 62,200 55,584 60,257 49,707
PERFORMANCE RATIOS:
Return on average assets.................................. 1.05% 1.00% 1.02% 1.19% 1.02%
Return on average shareholders' equity.................... 11.48 11.05 10.69 13.47 12.92
Net interest margin(2).................................... 4.63 4.32 4.57 4.80 5.07
Dividend payout........................................... 35.9 33.4 33.5 26.5 27.9
ASSET QUALITY RATIOS:
Net charge-offs to average loans, net of unearned
income.................................................. .05% .03% .15% .24% .33%
Nonperforming assets to net loans and other real estate... .54 1.44 .82 2.74 3.98
Allowance for loan losses to loans outstanding at year
end..................................................... .91 .98 1.15 1.40 1.62
Allowance for loan losses to nonperforming assets......... 168 68 141 150 40
LIQUIDITY AND CAPITAL RATIOS:
Average shareholders' equity to average assets............ 9.14% 9.01% 9.51% 8.81% 7.89%
Average loans to average deposits......................... 67.4 57.4 49.4 46.9 47.6
Tier I capital to risk-weighted assets at year end........ 14.03 13.85 18.72 18.49 17.11
Total capital to risk-weighted assets at year end......... 15.00 14.81 19.79 19.70 18.36
Leverage capital to assets at year end.................... 8.32 7.93 9.42 8.97 8.11
- ---------------
(1) Includes adjustments of $(1,482,000) in 1996, $(705,000) in 1995,
$(4,391,000) in 1994 and $4,667,000 in 1993 related to adoption of Financial
Accounting Standard Board No. 115 "Accounting for Certain Investments in
Debt and Equity Securities."
(2) On a fully taxable equivalent basis.
11
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PSHC
SELECTED HISTORICAL FINANCIAL DATA
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA, RATIOS AND
AVERAGE NUMBER OF SHARES OUTSTANDING)
INCOME STATEMENT DATA:
Total interest income..................................... $ 9,453 $ 8,109 $ 5,720 $ 4,332 $ 3,871
Total interest expense.................................... 4,332 4,164 2,162 1,612 1,570
Net interest income....................................... 5,121 3,945 3,558 2,720 2,301
Provision for loan losses................................. 640 206 163 167 201
Net interest income after loan loss provision............. 4,481 3,739 3,395 2,553 2,100
Total noninterest income excluding security gains
(losses)................................................ 1,617 1,230 744 856 619
Security gains (losses)................................... 4 (59) 12 28 4
Total noninterest expense................................. 4,251 3,520 2,679 2,280 2,087
Income tax expense........................................ 621 443 471 409 218
Net income................................................ 1,230 947 1,001 748 418
PER SHARE DATA:
Net income................................................ $ 1.43 $ 1.16 $ 1.28 $ 0.97 $ 0.55
Cash dividends............................................ -- -- 0.300 0.100 0.075
Book value(1)............................................. 13.77 12.11 10.01 10.04 9.02
OTHER INFORMATION:
Average number of shares outstanding...................... 863,000 814,000 787,000 784,000 775,000
BALANCE SHEET DATA (period end):
Total assets.............................................. $130,093 $114,533 $96,303 $80,572 $58,884
Securities................................................ 14,369 21,157 28,003 31,267 23,956
Net Loans(2).............................................. 99,800 76,595 61,828 38,279 27,659
Total deposits............................................ 118,736 104,233 86,683 71,772 51,387
Shareholders' equity...................................... 10,226 8,995 7,391 7,416 6,619
PERFORMANCE RATIOS:
Return on average assets.................................. 1.00% 0.85% 1.16% 1.10% 0.77%
Return on average shareholders' equity.................... 12.61 11.62 13.58 10.82 6.57
Net interest margin....................................... 4.40 3.79 4.43 4.27 4.53
Dividend payout........................................... -- -- 0.20 0.08 0.12
ASSET QUALITY RATIOS:
Net charge-offs to average loans, net of unearned
income.................................................. 0.10% 0.11% 0.18% 0.12% 0.32%
Nonperforming assets to net loans and other real estate... 0.77 0.53 0.40 0.16 0.00
Allowance for loan losses to loans outstanding at year
end..................................................... 1.35 1.07 1.11 1.59 1.70
Allowance for loan losses to nonperforming assets......... 179.45 204.20 284.15 1,030.00 0.00
LIQUIDITY AND CAPITAL RATIOS:
Average shareholders' equity to average assets............ 7.93% 7.33% 8.53% 10.13% 11.77%
Average loans to average deposits(2)...................... 83.55 70.17 60.33 52.92 49.15
Tier I capital to risk-weighted assets at year end........ 12.08 12.55 15.08 17.00 23.05
Total capital to risk-weighted assets at year end......... 13.33 13.69 16.33 18.25 24.30
Leverage capital to assets at year end.................... 7.98 7.95 8.48 9.07 11.24
- ---------------
(1) Assumes no exercise of outstanding options or warrants to purchase PSHC
Common Stock.
(2) Excludes loans held for sale.
12
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SELECTED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL DATA
The following selected unaudited pro forma financial data give effect to
the Merger as of the dates and for the periods indicated and pursuant to the
accounting basis described below. The selected unaudited pro forma financial
data are presented for informational purposes only and are not necessarily
indicative of the combined financial position or results of operations which
actually would have occurred if the transactions had been consummated at the
date and for the periods indicated or which may be obtained in the future. The
information should be read in conjunction with the unaudited pro forma financial
information appearing elsewhere in this Joint Proxy Statement. See
"-- SUMMARY -- Comparative Per Share Data" and "PRO FORMA FINANCIAL
INFORMATION."
SELECTED PRO FORMA COMBINED DATA FOR SEACOAST AND PSHC
The following unaudited pro forma combined data give effect to the
acquisition of PSHC as of the date or at the beginning of the periods indicated,
assuming such acquisition is treated as a pooling-of-interests transaction.
AS OF DECEMBER 31, 1996
-------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
BALANCE SHEET DATA:
Total assets.............................................. $938,501
Securities................................................ 223,169
Loans, net of unearned income............................. 572,768
Total deposits............................................ 811,493
Other borrowed money...................................... 45,088
Shareholders' equity...................................... 76,995
Shareholders' equity (book value) per common share........ 15.08
YEAR ENDED DECEMBER 31,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA
AND AVERAGE NUMBER OF SHARES OUTSTANDING)
INCOME STATEMENT DATA:
Total interest income................................... $61,275 $56,260 $44,761
Total interest expense.................................. 25,052 25,225 16,003
Net interest income..................................... 36,223 31,035 28,758
Provision for loan losses............................... 1,090 456 308
Net interest income after loan loss provision........... 35,133 30,579 28,450
Total noninterest income................................ 10,407 9,168 7,983
Total noninterest expense............................... 31,768 27,766 25,684
Income tax expense...................................... 4,933 4,208 3,562
Net Income.............................................. 8,839 7,773 7,187
Net Income per share.................................... 1.70 1.49 1.38
Average common shares outstanding....................... 5,204,962 5,209,590 5,205,592
13
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MEETINGS OF SHAREHOLDERS
DATES, PLACES, TIMES, AND PURPOSES
PSHC.
This Joint Proxy Statement is being furnished to the holders of PSHC Common
Stock in connection with the solicitation by the PSHC Board of Directors of
proxies for use at the PSHC Special Meeting at which PSHC shareholders will be
asked to vote to approve the Merger Agreement and the transactions contemplated
therein. The PSHC Special Meeting will be held at PSHC's St. Lucie West Office,
1100 S.W. St. Lucie West Boulevard, Port St. Lucie, Florida, on Thursday, May
22, 1997, at 7:00 P. M. local time. See "DESCRIPTION OF THE MERGER."
Seacoast.
This Joint Proxy Statement is being furnished to the holders of Seacoast
Common Stock in connection with the solicitation by the Seacoast Board of
Directors of proxies for use at the Seacoast Annual Meeting at which Seacoast
shareholders will be asked to vote to approve the Merger Agreement and the
transactions contemplated therein, including the issuance of shares of Seacoast
Class A Stock to PSHC holders of PSHC Common Stock and PSHC Warrants, to reelect
eight directors to the Seacoast Board of Directors, to amend Seacoast's Articles
of Incorporation, and to ratify the appointment of Seacoast's independent
auditors. The Seacoast Annual Meeting will be held at the Indian River
Plantation Beach Resort, Hutchinson Island, 555 N.E. Ocean Boulevard, Stuart,
Florida, on Friday, May 30, 1997, at 3:00 P.M., local time. See "DESCRIPTION OF
THE MERGER."
RECORD DATES, VOTING RIGHTS, REQUIRED VOTES, AND REVOCABILITY OF PROXIES
PSHC.
The close of business on April 1, 1997, has been fixed as the PSHC Record
Date for determining holders of outstanding shares of PSHC Common Stock entitled
to notice of and to vote at the PSHC Special Meeting. Only holders of PSHC
Common Stock of record on the books of PSHC on the PSHC Record Date are entitled
to notice of and to vote at the PSHC Special Meeting. As of the PSHC Record
Date, there were 744,655 shares of PSHC Common Stock issued and outstanding and
held by 867 holders of record.
Holders of PSHC Common Stock are entitled to one vote on each matter
considered and voted upon at the PSHC Special Meeting for each share of PSHC
Common Stock held of record as of the PSHC Record Date. To hold a vote on any
proposal, a quorum must be assembled, which is a majority of the shares of PSHC
Common Stock issued and outstanding and entitled to vote, present in person or
represented by proxy. In determining whether a quorum exists at the PSHC Special
Meeting for purposes of all matters to be voted on, all votes "for" or
"against," as well as all abstentions, with respect to the proposal will be
counted. The vote required for the approval of the Merger Agreement is a
majority of the shares of PSHC Common Stock entitled to be cast at the PSHC
Special Meeting by holders of the issued and outstanding shares of PSHC Common
Stock. Consequently, with respect to the proposal to approve the Merger
Agreement, abstentions and broker non-votes will be counted as part of the base
number of votes to be used in determining if the proposal has received the
requisite number of base votes for approval. Thus, an abstention and a broker
non-vote will have the same effect as a vote "against" such proposal.
Shares of PSHC Common Stock represented by properly executed proxies, if
such proxies are received in time and not revoked, will be voted in accordance
with the instructions indicated on the proxies. IF NO INSTRUCTIONS ARE
INDICATED, SUCH PROXIES WILL BE VOTED FOR APPROVAL OF THE MERGER AGREEMENT AND,
IN THE DISCRETION OF THE PROXY HOLDER, AS TO ANY OTHER MATTER WHICH MAY COME
PROPERLY BEFORE THE PSHC SPECIAL MEETING, AND THE HOLDERS WILL NOT BE ENTITLED
TO ASSERT DISSENTERS' RIGHTS. SEE "DESCRIPTION OF THE MERGER -- DISSENTERS'
RIGHTS." IF NECESSARY, THE PROXY HOLDER MAY VOTE IN FAVOR OF A PROPOSAL TO
ADJOURN THE PSHC SPECIAL MEETING IN ORDER TO PERMIT FURTHER SOLICITATION OF
PROXIES IN THE EVENT THERE ARE INSUFFICIENT VOTES TO APPROVE A PROPOSAL AT THE
TIME OF THE PSHC SPECIAL MEETING.
14
26
A PSHC shareholder who has given a proxy may revoke it at any time prior to
its exercise at the PSHC Special Meeting by (i) giving written notice of
revocation to the Secretary of PSHC, (ii) properly submitting to PSHC a duly
executed proxy bearing a later date, or (iii) attending the PSHC Special Meeting
and voting in person after notifying the Secretary that any previously submitted
proxies are revoked. All written notices of revocation and other communications
with respect to revocation of proxies should be addressed as follows: Port St.
Lucie National Bank Holding Corp., 1100 S.W. St. Lucie West Boulevard, Port St.
Lucie, Florida 34986, Attention: J. Hal Roberts, Jr.
The directors and of PSHC beneficially owned, as of the PSHC Record Date,
184,655 shares, or approximately 24.8% of the issued and outstanding shares, of
PSHC Common Stock. Each member of the Board of Directors of PSHC has agreed to
vote those PSHC shares over which such member has voting authority (other than
in a fiduciary capacity) in favor of the Merger Agreement. In addition,
executive officers of PSHC who are not PSHC directors beneficially own 7,223
shares, or approximately 1.0%, of PSHC Common Stock and are expected to vote
such shares in favor of the Merger. As of the PSHC Record Date, Seacoast and its
affiliates held no shares of PSHC Common Stock. None of Seacoast or any of its
directors and executive officers beneficially owned, as of the PSHC Record Date,
any shares of PSHC Common Stock. See "MEETINGS OF SHAREHOLDERS -- Record Dates,
Voting Rights, Required Votes, and Revocability of Proxies."
Seacoast.
The close of business on April 14, 1997, has been fixed as the Seacoast
Record Date for determining holders of outstanding shares of Seacoast Common
Stock entitled to notice of and to vote at the Seacoast Annual Meeting. Only
holders of Seacoast Common Stock of record on the books of Seacoast on the
Seacoast Record Date are entitled to notice of and to vote at the Seacoast
Annual Meeting. As of the Seacoast Record Date, there were 3,874,531 shares of
Seacoast Class A Stock issued and outstanding, which were held by 572 holders of
record, and 384,638 shares of Seacoast Class B Stock issued and outstanding,
which were held by 97 holders of record.
Holders of record of Seacoast Class A Stock are entitled to one vote per
share on each matter to be considered and voted upon at the Seacoast Annual
Meeting. Holders of Class B Stock are entitled to 10 votes per share on each
matter to be considered and voted upon at the Seacoast Annual Meeting.
Seacoast's Articles of Incorporation provide that, except as otherwise required
by law or by the Articles of Incorporation, holders of shares of Seacoast Class
A Stock and Class B Stock vote together as a single class on all matters.
Approval of the Merger Agreement and the transactions contemplated therein
and the amendments to the Articles of Incorporation will require the affirmative
vote of (i) the holders of at least two-thirds (2,583,021 shares) of all of the
shares of Seacoast Class A Stock outstanding and entitled to vote at the Annual
Meeting, voting as a separate class, and (ii) the holders of shares with at
least two-thirds (5,147,274 shares) of all votes entitled to be cast by all
shares of Seacoast Common Stock outstanding and entitled to vote at the Annual
Meeting, voting together as a single class. The vote required for the reelection
of the eight directors is a plurality of the votes cast by the shares of
Seacoast Common Stock entitled to vote in the election, provided that a quorum
is present. The proposal to ratify the appointment of Arthur Andersen LLP as
independent auditors will be approved if the votes cast by the holders of the
shares of Seacoast Common Stock present, or represented, at the Annual Meeting
and entitled to vote on the matter favoring this proposal exceed the votes cast
in opposition to the proposal.
As a result of the ten-to-one voting preference accorded by the Articles of
Incorporation to shares of Class B Stock, as of the Seacoast Record Date, there
were 7,720,911 votes entitled to be cast by the holders of the outstanding
Seacoast Common Stock when voting together as a single class, with the holders
of the Class B Stock entitled to cast 3,846,380 votes or 49.8% of such amount on
matters on which the holders of Seacoast Class A Stock and Class B Stock vote
together as a single class.
As of the Seacoast Record Date, all directors and executive officers of
Seacoast as a group (11 persons) beneficially owned 803,059 shares of Seacoast
Class A Stock, constituting 20.7% of the total number of shares of Seacoast
Class A Stock outstanding at that date and entitled to vote at the Seacoast
Annual Meeting, and
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290,011 shares of Class B Stock, constituting 75.4% of the total number of
shares of Class B Stock outstanding at that date and entitled to vote at the
Seacoast Annual Meeting. Seacoast's directors and executive officers
beneficially owned as of that date, shares of Seacoast Common Stock having
3,703,169 votes, or 48.0% of the total votes represented by Seacoast Common
Stock outstanding on the Seacoast Record Date and entitled to vote at the
Seacoast Annual Meeting, and are anticipated to vote their shares of Seacoast
Common Stock in favor of the Merger and the other proposals described herein. As
of the Seacoast Record Date, PSHC held no shares of Seacoast Common Stock. In
addition, as of the Seacoast Record Date, various subsidiaries of Seacoast, as
fiduciaries, custodians, and agents, had sole or shared voting power over 89,785
shares, or 2.3%, of the issued and outstanding shares, of Seacoast Class A
Stock, and 300 shares of Class B Stock, under trust agreements and other
instruments and agreements, including shares held as trustee or agent of various
Seacoast employee benefit and stock purchase plans. Neither Seacoast nor its
subsidiaries held any shares of PSHC Common Stock as of the PSHC Record Date.
To hold a vote on any proposal, a quorum must be present, which is a
majority of the votes entitled to be cast by the holders of the outstanding
shares of Seacoast Common Stock. With respect to the proposals to approve the
Merger Agreement and the amendments to the Seacoast Articles of Incorporation, a
majority of the Seacoast Class A Stock must also be present at the Annual
Meeting in person or by proxy to constitute a quorum. In determining whether a
quorum exists at the Seacoast Annual Meeting for purposes of all matters to be
voted on, all votes "for" or "against," as well as all abstentions, will be
counted. Approval of the proposals to amend the Seacoast Articles of
Incorporation and to approve the Merger Agreement and the transactions
contemplated therein, including the issuance of shares of Seacoast Class A
Stock, requires the affirmative vote of (i) the holders of at least two-thirds
of all of the shares of Seacoast Class A Stock outstanding and entitled to vote
at the Annual Meeting, voting as a separate class, and (ii) the holders of
shares of Seacoast Class A Stock and Class B Stock with at least two-thirds of
all votes entitled to be cast by all shares of Seacoast Common Stock outstanding
and entitled to vote at the Annual Meeting, voting together as a single class.
Consequently, with respect to these two proposals, abstentions and broker
non-votes will be counted as part of the base number of votes to be used in
determining if the proposal has received the requisite number of base votes for
approval. Thus, an abstention and a broker non-vote will have the same effect as
a vote "against" such proposals.
Shares of Seacoast Common Stock represented by properly executed proxies,
if such proxies are received in time and not revoked, will be voted in
accordance with the instructions indicated on the proxies. IF NO INSTRUCTIONS
ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR APPROVAL OF THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING THE ISSUANCE OF SHARES OF
SEACOAST CLASS A STOCK TO PSHC SHAREHOLDERS AND HOLDERS OF PSHC WARRANTS, FOR
APPROVAL OF THE REELECTION OF EIGHT DIRECTORS TO THE SEACOAST BOARD OF
DIRECTORS, FOR APPROVAL OF THE AMENDMENTS TO THE SEACOAST ARTICLES OF
INCORPORATION, FOR THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
SEACOAST'S INDEPENDENT AUDITORS AND, IN THE DISCRETION OF THE PROXY HOLDER, AS
TO ANY OTHER MATTER WHICH MAY COME PROPERLY BEFORE THE SEACOAST ANNUAL MEETING.
IF NECESSARY, THE PROXY HOLDER MAY VOTE IN FAVOR OF A PROPOSAL TO ADJOURN THE
SEACOAST ANNUAL MEETING IN ORDER TO PERMIT FURTHER SOLICITATION OF PROXIES IN
THE EVENT THERE ARE NOT SUFFICIENT VOTES TO APPROVE THE FOREGOING PROPOSALS AT
THE TIME OF THE SEACOAST ANNUAL MEETING.
A Seacoast shareholder who has given a proxy may revoke it at any time
prior to its exercise at the Seacoast Annual Meeting by (i) giving written
notice of revocation to the Secretary of Seacoast, (ii) properly submitting to
Seacoast a duly executed proxy bearing a later date, or (iii) attending the
Seacoast Annual Meeting and voting in person after notifying the Secretary that
he has revoked any previously submitted proxies. All written notices of
revocation and other communications with respect to revocation of proxies should
be addressed as follows: Seacoast Banking Corporation of Florida, 815 Colorado
Avenue, Stuart, Florida 34994; Attention: Sharon Mehl. Holders of Seacoast Class
A Stock and Class B Stock have no dissenters rights of appraisal in connection
with the Merger.
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DESCRIPTION OF THE MERGER
The following information describes certain aspects of the Merger. This
description does not purport to be complete and is qualified in its entirety by
reference to the Appendices hereto, including the Merger Agreement, which is
attached as Appendix A to this Joint Proxy Statement and incorporated herein by
reference. All shareholders are urged to read the Appendices in their entirety.
GENERAL
The Merger Agreement provides for the acquisition of PSHC by Seacoast
pursuant to the merger of PSHC with and into Seacoast. At the Effective Time,
each share of PSHC Common Stock then issued and outstanding (excluding shares
held by PSHC, Seacoast, or their respective subsidiaries, in each case other
than shares held in a fiduciary capacity or in satisfaction of debts previously
contracted, and excluding shares held by PSHC shareholders who perfect their
dissenters' rights) will be converted into and exchanged for a number of shares
of Seacoast Class A Stock determined by a formula that is based upon the market
price of Seacoast Class A Stock during the Pricing Period prior to Closing.
Specifically, each share of PSHC Common Stock as described in the preceding
sentence will be exchanged for that number of shares of Seacoast Class A Stock
determined by dividing (A) (i) the sum of (x) the average of the closing prices
on the Nasdaq National Market of Seacoast Class A Stock for the 20 trading days
preceding the fifth trading day preceding the Closing Date (the "Seacoast Stock
Price") multiplied by 900,000 and (y) $1,242,953, divided by (ii) the number of
shares of PSHC Common Stock plus the number of shares of PSHC Common Stock
subject to PSHC stock options and PSHC Warrants, outstanding at the Effective
Time (the "Purchase Price Per Share"), by (B) the Seacoast Stock Price (the
"Stock Exchange Ratio"). Each outstanding PSHC Warrant at the effective time of
the Merger will be exchanged for that number of shares of Seacoast Class A Stock
determined by dividing (A) the difference between the Purchase Price Per Share
and $8.26 by (B) the Seacoast Stock Price (the "Warrant Exchange Ratio").
Seacoast will also assume the obligations of PSHC under various stock plans and
programs and adopt substitute plans where appropriate. The consideration to be
received by holders of PSHC Common Stock and PSHC Warrants is subject to
possible adjustment in certain circumstances relating to certain categories of
PSHC loans. See "DESCRIPTION OF THE MERGER -- Conduct of Business Pending the
Merger (subparagraph (vi))."
The last sale price per share of Seacoast Class A Stock as reported on the
Nasdaq National Market on April 11, 1997 was $27.25. If the Seacoast Stock Price
(as defined above) were $27.25 at the Effective Time, each share of PSHC Common
Stock would be converted into .9996 shares of Seacoast Class A Stock (Estimated
Stock Exchange Ratio) and each PSHC Warrant would be converted into .6965 shares
of Seacoast Class A Stock (Estimated Warrant Exchange Ratio).
The exact Stock Exchange Ratio and Warrant Exchange Ratio are each
dependent on the closing prices of Seacoast Class A Stock as reported on Nasdaq
National Market during the Pricing Period. The actual market price of a share of
Seacoast Class A Stock at the Effective Time, or on the date on which
certificates representing such shares are received by former holders of PSHC
Common Stock or PSHC Warrants, may be more or less than the actual Seacoast
Stock Price or the last sale price per share of Seacoast Class A Stock on April
11, 1997 (on which the Estimated Stock Exchange Ratio and the Estimated Warrant
Exchange Ratio were determined) or the date of the PSHC Special Meeting. PSHC
shareholders are urged to obtain information on the trading value of Seacoast
Class A Stock that is more recent than that provided in this Joint Proxy
Statement. See "COMPARATIVE MARKET PRICES AND DIVIDENDS."
No fractional shares of Seacoast Class A Stock will be issued. Rather, cash
(without interest) will be paid in lieu of any fractional share interest to
which any PSHC shareholder or PSHC Warrant holder would be entitled upon
consummation of the Merger, in an amount equal to such fractional part of a
share of Seacoast Class A Stock multiplied by the Seacoast Stock Price.
The Merger Agreement also contemplates that at the Effective Time, each
PSHC Stock Option to purchase or acquire shares of PSHC Common Stock, excluding
the PSHC Warrants, granted by PSHC under the PSHC Stock Plans (as defined in the
Merger Agreement), which are outstanding at the Effective Time,
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whether or not exercisable, will be converted into and become rights with
respect to Seacoast Class A Stock on a basis adjusted to reflect the Stock
Exchange Ratio.
As of the PSHC Record Date, PSHC had 744,655 shares of PSHC Common Stock
issued and outstanding, 150,478.625 shares of PSHC Common Stock subject to PSHC
Warrants and 50,820 additional shares of PSHC Common Stock subject to PSHC Stock
Options. Seacoast will issue or reserve for issuance an aggregate of 900,000
shares of Seacoast Class A Stock in the Merger. Based on the number of PSHC
shares of Common Stock, PSHC Warrants, and PSHC Stock Options outstanding on the
PSHC Record Date and the Estimated Stock Exchange Ratio of .9996 and the
Estimated Warrant Exchange Ratio of .6965, it is anticipated that upon
consummation of the Merger, Seacoast would issue approximately 744,357 shares of
Seacoast Class A Stock to holders of PSHC Common Stock, 104,808 shares of
Seacoast Class A Stock to holders of PSHC Warrants, and reserve for issuance
50,799 shares of Seacoast Class A Stock for future issuance to holders of PSHC
Stock Options. Accordingly, Seacoast would then have issued and outstanding
approximately 4,723,696 shares of Seacoast Class A Stock and have 50,799
additional shares of Seacoast Class A Stock reserved for issuance, based on the
number of shares of Seacoast Class A Stock issued and outstanding on the
Seacoast Record Date.
EFFECT OF THE MERGER ON PSHC STOCK OPTIONS
The Merger Agreement contemplates that at the Effective Time, each PSHC
Stock Option granted under the PSHC Stock Plans, as that term is defined in the
Merger Agreement, outstanding at the Effective Time, whether or not exercisable,
will be converted into and become options with respect to Seacoast Class A
Stock, and Seacoast will assume each PSHC Stock Option in accordance with the
terms of the PSHC Stock Plan and stock option agreement by which it is
evidenced, except that from and after the Effective Time, (i) Seacoast and its
Compensation Committee will be substituted for PSHC and the Committee of PSHC's
Board of Directors (including, if applicable, the entire Board of Directors of
PSHC) administering such PSHC Stock Plan, (ii) each PSHC Stock Option assumed by
Seacoast may be exercised solely for shares of Seacoast Class A Stock (or cash,
if so provided under the terms of such PSHC Stock Option), (iii) the number of
shares of Seacoast Class A Stock subject to such PSHC Stock Option will be equal
to the number of shares of PSHC Common Stock subject to such PSHC Stock Option
immediately prior to the Effective Time multiplied by the Stock Exchange Ratio,
and (iv) the per share exercise price (or similar threshold price, in the case
of stock awards) under each such PSHC Stock Option will be adjusted by dividing
the per share exercise price under each such PSHC Stock Option by the Stock
Exchange Ratio and rounding up to the nearest cent. Seacoast will not be
obligated to issue any fraction of a share of Seacoast Class A Stock upon
exercise of PSHC Stock Options and any fraction of a share of Seacoast Class A
Stock that otherwise would be subject to a converted PSHC Stock Option will
represent the right to receive a cash payment equal to the product of such
fraction and the difference between the market value of one share of Seacoast
Class A Stock and the per share exercise price of such PSHC Stock Option. The
market value of one share of Seacoast Class A Stock will be the closing price of
such common stock on the Nasdaq National Market (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
Seacoast) on the last trading day preceding the date of exercise. In addition,
notwithstanding any other term in the Merger Agreement, each PSHC Stock Option
which is an "incentive stock option" will be adjusted as required by Section 424
of the Code, and the regulations promulgated thereunder, so as not to constitute
a modification, extension, or renewal of the option, within the meaning of
Section 424(h) of the Code.
Significantly, all restrictions or limitations on transfer with respect to
PSHC Common Stock awarded under the PSHC Stock Plans or any other plan, program,
or arrangement of PSHC or its subsidiaries, to the extent that such restrictions
or limitations will not have already lapsed (whether as a result of the Merger
or otherwise), and except as otherwise expressly provided in such plan, program,
or arrangement, will remain in full force and effect with respect to shares of
Seacoast Class A Stock into which such restricted stock is converted pursuant to
the Merger Agreement.
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BACKGROUND OF AND REASONS FOR THE MERGER
Background of the Merger. Informal conversations between management
officials of PSHC and Seacoast concerning the benefits of combining their
organizations first started in 1995. These conversations were accompanied by
limited exchanges of information, but no further action was taken until the
following year.
In April 1996, Seacoast began preliminary discussions with PSHC regarding a
possible business combination. There seemed to be general agreement during the
discussions that Seacoast's "super community bank" strategy would prove to be
increasingly effective, given the continued consolidation activities among its
larger competitors and the difficulty smaller banks have in providing a full
range of services, including brokerage, trust, and telephone and PC banking and
bill paying. There was also agreement that while PSHC had grown through market
penetration within the City of Port St. Lucie, it would be necessary to expand
outside that city to sustain its growth, and that a combination would enable
both organizations to more efficiently focus resources toward the development of
new market areas. As a result, the Long Range Planning Committee of the PSHC
Board of Directors hired Austin Associates to serve as its financial advisor and
explore merger opportunities.
Following a general understanding between the parties to more carefully
explore the merits of a possible combination, the two organizations executed a
Confidentiality Agreement on May 10, 1996. During May, June and July of 1996,
Seacoast and PSHC exchanged financial and operating information with one
another. On June 19, 1996, Seacoast delivered a tentative term sheet to PSHC
outlining the basic terms of a possible combination.
In June 1996, Austin Associates prepared a report for PSHC dealing with a
number of matters relating to the Board's analysis of the strategic alternatives
available to PSHC including (i) the general status of the financial services
industry, including those entities operating in PSHC's region; (ii) valuation
analyses of PSHC; (iii) historic and current bank institution stock price levels
and terms of recent financial institution mergers; (iv) consolidation trends in
the financial services industry and in Florida specifically; (v) the outlook for
increasing the potential value of PSHC Common Stock and PSHC shareholders' lack
of liquidity; and (vi) prospects for PSHC continuing as an independent entity,
including its prospects of acquiring smaller institutions in the region or
expanding its current business to further increase size and earnings as an
independent entity. In its report, Austin Associates indicated that the initial
preliminary offer from Seacoast was below the range of values it believed
acceptable.
After conferring with the Long Range Planning Committee, the Chairman of
the Board of Directors of PSHC, Jeffrey Furst, instructed Austin Associates in
July 1996 to contact Seacoast on the flexibility of their proposed terms with
the goal of increasing Seacoast's offer to a level acceptable under the Austin
Associates report. On July 3, 1996, PSHC delivered to Seacoast a revised term
sheet which contained the terms of PSHC's counterproposal. Upon Seacoast
declining to consider any material changes to its proposal discussions ceased on
July 16, 1996.
In early November 1996, Chairman Furst received an unsolicited letter from
Seacoast proposing that the full PSHC Board of Directors attend a meeting with
senior management of Seacoast and Seacoast's financial advisor concerning a
possible merger. On November 21, 1996, Seacoast made a presentation to the Board
of PSHC concerning a proposed merger of the two organizations. On November 26,
1996, PSHC's Board received a summary analysis by Austin Associates of the
Seacoast proposal. Austin Associates concluded that if PSHC were for sale, the
new proposal was in a range which would be fair to shareholders of PSHC, from a
financial point of view.
A special meeting of the PSHC Long Range Planning Committee was held on
December 3, 1996 at which the Seacoast proposal was discussed fully. The
Committee discussed PSHC's strategic alternatives and related issues, including
the apparent continuing consolidation of the financial services industry, the
consideration that PSHC might be at a competitive disadvantage as an independent
entity in a more consolidated environment, PSHC's prospects of further
increasing its size and earnings without acquiring other financial institutions
in the region, and the view of Austin Associates that prevailing market
conditions
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for business combinations of financial institutions were favorable. The
discussion focused on the effects that a business combination transaction would
have on PSHC's shareholders, employees, and the communities served by PSHC, on
the timing of a potential transaction. The consensus of the Committee was to
recommend that PSHC's Board of Directors instruct Austin Associates to contact
Seacoast to negotiate, along with Chairman Furst, the final terms of the
Seacoast proposal.
On December 5, 1996, a special meeting of PSHC's Board of Directors was
held. The Board of Directors, based largely on the business prospects of PSHC,
the outlook for appreciation of the value of PSHC Common Stock if PSHC remained
an independent entity and the favorable market conditions for business
combinations of financial institutions, concluded that exploration of a business
combination transaction involving PSHC and Seacoast was currently in the best
interest of PSHC and its shareholders. The Long Range Planning Committee's
recommendation was adopted.
Between November 1996 and February 1997, each of Seacoast and PSHC
conducted due diligence reviews of each other's business and undertook intensive
negotiations as to the price and terms under which a combination might be
effected.
The Board of Directors of PSHC, along with its legal and financial
advisors, met on February 11, 1997, to discuss the focus of the Merger Agreement
and related agreements. After a review of the matters considered by the Board of
Directors and Executive Committee since November 1996 and the opinion of Austin
Associates that the consideration to be received by PSHC's shareholders under
the terms of the Merger Agreement was fair to PSHC's shareholders from a
financial point of view, the Board of Directors unanimously approved the Merger
Agreement and authorized the Chairman and President of PSHC to complete the
negotiations, to execute the Merger Agreement, and to take the appropriate
actions necessary to consummate the Merger as described above.
The Merger Agreement was executed on February 19, 1997.
PSHC's Reasons for the Merger and Recommendation of Directors.
The PSHC Board of Directors, with the assistance of outside financial and
legal advisors, evaluated the financial, legal and market considerations bearing
on the decision to recommend the Merger. The terms of the Merger, including the
purchase price, are a result of arm's-length negotiations between
representatives of PSHC and Seacoast. In reaching its conclusion that the Merger
Agreement is in the best interest of PSHC and its shareholders, the PSHC Board
of Directors carefully considered, without assigning any relative or specific
values, the following material factors:
(i) the financial terms of the proposed Merger, including the
anticipated treatment of the Merger as a tax-free exchange of Seacoast
Class A Stock for PSHC Common Stock for federal income tax purposes;
(ii) the increased liquidity of the Seacoast Class A Stock over the
PSHC Common Stock as a result of its listing on the NASDAQ National Market;
(iii) a comparison of the terms of the proposed Merger with comparable
transactions, both in the Southeast and elsewhere;
(iv) information concerning the business, financial condition, results
of operations and prospects of PSHC and Seacoast;
(v) competitive factors and trends toward consolidation in the banking
industry;
(vi) the review by the PSHC Board with its legal and financial
advisors of the provisions of the Merger Agreement;
(vii) the opinion rendered by Austin Associates to the PSHC Board that
the consideration to be received in the Merger is fair from a financial
point of view to the holders of the PSHC Common Stock;
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(viii) alternatives to the Merger, including proceeding on a
stand-alone basis, in light of the economic conditions and prospects of
Florida banking markets and the competitive environment in the economy
generally and with the banking sector specifically; and
(ix) the value to be received by holders of PSHC Common Stock pursuant
to the Merger in relation to the historical trading prices and book value
of PSHC Common Stock.
While each member of the PSHC Board individually considered the foregoing
and other factors, the PSHC Board did not collectively assign any specific or
relative weights to the factors considered and did not make any determination
with respect to any individual factor. The PSHC Board collectively made its
determination with respect to the Merger based on the unanimous conclusion
reached by its members, in light of the factors that each of them considered
appropriate, that the Merger is in the best interests of the PSHC shareholders.
PSHC'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE MERGER AGREEMENT
AND THE MERGER BE ADOPTED AND APPROVED BY ALL SHAREHOLDERS OF PSHC.
Seacoast's Reasons for the Merger.
In approving the Merger Agreement and the Merger, the Seacoast Board
considered a number of factors concerning the benefits of the Merger. Without
assigning any relative or specific weights to the factors, the Seacoast Board of
Directors considered the following material factors:
(a) the information presented to the directors by the management of
Seacoast concerning the business, operations, earnings, asset quality, and
financial condition of PSHC, including the composition of the earning
assets portfolio of PSHC;
(b) the financial terms of the Merger, including the relationship of
the value of the consideration issuable in the Merger to the market value,
tangible book value, and earnings per share of PSHC Common Stock;
(c) the nonfinancial terms of the Merger, including the anticipated
treatment of the Merger as a tax-free exchange of PSHC Common Stock for
Seacoast Class A Stock for federal income tax purposes;
(d) the likelihood of the Merger being approved by applicable
regulatory authorities without adverse conditions or delay;
(e) the opportunity for reducing the noninterest expense of the
operations of PSHC and the ability of the operations of PSHC after the
Effective Time to contribute to the earnings of Seacoast;
(f) the attractiveness of the PSHC franchise, the market position of
PSHC in each of the markets in which it operates, the compatibility of the
franchise of PSHC with the operations of Seacoast and the ability of PSHC
to contribute to the "super community bank" strategy of Seacoast;
(g) the compatibility of the community bank orientation of the
operations of PSHC to that of Seacoast;
(h) the report of Robinson-Humphrey reviewing a comparison of PSHC to
selected peer banks and of premiums paid in other merger transactions; and
(i) the advice rendered by Robinson-Humphrey as to the fairness, from
a financial point of view, of the Stock Exchange Ratio and the Warrant
Exchange Ratio to the holders of Seacoast Common Stock.
Each member of Seacoast's Board individually considered the foregoing and
other factors, but such Board did not collectively assign any specific or
relative weights to the factors considered and did not make any determination
with respect to any individual factor. Seacoast's Board collectively and
unanimously determined, in light of the factors each member considered
appropriate, that the Merger is in the best interests of Seacoast and its
shareholders.
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SEACOAST'S BOARD OF DIRECTORS RECOMMENDS THAT SEACOAST SHAREHOLDERS VOTE
FOR APPROVAL OF THE MERGER AND THE ISSUANCE OF SHARES OF SEACOAST CLASS A STOCK
PURSUANT TO THE MERGER AGREEMENT.
OPINION OF PSHC'S FINANCIAL ADVISOR
PSHC retained Austin Associates to act as its financial advisor in
connection with the Merger and to render a written opinion to the PSHC Board of
Directors as to the fairness, from a financial point of view, to the holders of
PSHC Common Stock and PSHC Warrants, of the Stock Exchange Ratio and the Warrant
Exchange Ratio. Austin Associates is a recognized investment banking firm
regularly engaged in the valuation of financial institutions and their
securities in connection with mergers and acquisitions and other purposes. PSHC
selected Austin Associates to act as PSHC's financial advisor in connection with
the Merger on the basis of its reputation and qualifications in evaluating
financial institutions.
Austin Associates has rendered a separate written opinion to the Board of
Directors of PSHC to the effect that the terms of the Merger are fair, from a
financial point of view, to the shareholders of PSHC as of the date of the
opinion. Austin Associates based its opinion upon, among other things: (i) the
audited financial statements of PSHC and Seacoast for the period 1991 through
1996; (ii) the reported prices and stock trading activity of PSHC and Seacoast;
(iii) publicly available information regarding the performance of certain other
companies whose business activities were believed to be generally comparable to
those of PSHC and Seacoast; (iv) the financial terms, to the extent publicly
available, of certain comparable bank merger transactions; (v) the strategic
objectives of the Merger and the synergies and other benefits of the Merger for
the combined company as described by senior management of PSHC and Seacoast; and
(vi) such other analysis and information as Austin Associates deemed relevant.
No limitations were imposed on the scope of Austin Associates'
investigation. The terms of the Merger Agreement, including the Merger
considerations, were negotiated by the Boards of Directors of PSHC and Seacoast,
and their representatives, on an arm's-length basis. Austin Associates
participated in the negotiation of the terms of the Merger Agreement and other
related agreements associated with the Merger. A copy of Austin Associates'
fairness opinion is attached as Appendix B to this Joint Proxy Statement and
should be read in its entirety.
In connection with rendering its opinion, Austin Associates performed a
variety of financial analyses, which are summarized below. Austin Associates
believes its analyses must be considered as a whole and that selecting portions
of such analyses and the factors considered therein, without considering all
factors and analyses, could create an incomplete view of the analyses and the
process underlying Austin Associates' opinion. The preparation of a fairness
opinion is a complex process involving subjective judgments and is not
necessarily susceptible to partial analyses or summary description. In its
analyses, Austin Associates made numerous assumptions with respect to industry
performance, business and economic conditions, and other matters, many of which
are beyond PSHC's or Seacoast's control. Any estimates contained in Austin
Associates' analyses are not necessarily indicative of future results or values,
which may be significantly different from the estimates.
Transaction Summary. The Merger Agreement provides for the aggregate
issuance of that number of shares of Seacoast Class A Stock to holders of PSHC
Common Stock, PSHC Warrants and PSHC Stock Options determined in accordance with
the following formula. The exchange ratio to holders of PSHC Common Stock (the
"Stock Exchange Ratio") shall be determined by dividing the Purchase Price Per
Share by the Seacoast Stock Price, both terms being defined in the Merger
Agreement and described herein. PSHC Stock Options will be converted into the
right to purchase Seacoast Class A Stock, adjusted for the Stock Exchange Ratio.
The exchange ratio to holders of PSHC Warrants shall be determined by dividing
(i) the difference between the Purchase Price Per Share and $8.26 (the exercise
price for all warrants) by (ii) the Seacoast Stock Price. PSHC has the right to
terminate the transaction if the Purchase Price Per Share is less than $24.62.
The Stock Exchange Ratio equaled .9996 and the Warrant Exchange Ratio equaled
.6965 based on the $27.25 closing price of Seacoast Class A Stock on April 11,
1997, and accordingly the aggregate value of the transaction was $24.5 million
on such date.
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Seacoast Stock Value. Based on the closing prices of Seacoast Class A
Stock, during the 90 days prior to April 11, Seacoast's Class A Stock value has
ranged between $25.75 and $29.25 per share. Seacoast reported earnings per share
of $.45 in the fourth quarter and $1.77 for all of 1996. The 1996 net income was
negatively impacted by a one-time charge of $.07 per share from the
recapitalization of the Federal Deposit Insurance Corporation's Savings
Association Insurance Fund. Therefore, Seacoast's normalized earnings per share
for 1996 was $1.84. At $27.25 per share, the value of Seacoast Class A Stock
represents 14.8x normalized 1996 earnings per share and 191% of Seacoast's
December 31, 1996 tangible book value per share. Austin Associates compared
Seacoast's Class A Stock trading multiples to 13 Southeast banking organizations
headquartered in Alabama, Florida, Georgia, North Carolina, and South Carolina
with assets ranging from $300 million to $1.9 billion (the "Peer Group"). As of
April 11, 1997, the median price-to-tangible book multiple for the Peer Group
was 209% compared to Seacoast's Class A Stock multiple of 191%. The median
price-to-earnings multiple for the Peer Group was 15.7x compared to Seacoast's
Class A Stock multiple of 14.8x. The median dividend yield for the Peer Group
was 1.98% compared to Seacoast's Class A Stock dividend yield of 2.94%. The
median return on average assets ("ROA") of the Peer Group for 1996 was 0.96%
compared to Seacoast's ROA of 1.05%. The median return on average equity ("ROE")
of the Peer Group for 1996 was 11.8% compared to Seacoast's ROE of 11.5%.
Comparative Transactions. Austin Associates reviewed comparative prices in
sale of control transactions in Florida for banks having assets of up to $500
million. Austin Associates looked specifically at 25 transactions announced
during 1996. The median multiples for these transactions were 203% of tangible
book value and 18.9 times earnings. Austin Associates also screened those
transactions for targets which had realized profitability levels consistent with
PSHC. These targets were considered to be more profitable than the group as a
whole. The median multiples for the resulting 11 transactions were 221% of
tangible book value and 15.3 times earnings. The market value of the
consideration to be received by holders of PSHC Common Stock and PSHC Warrants
in the Merger approximates 240% of PSHC's tangible book value at December 31,
1996, and 19.9 times PSHC's consolidated earnings per share for the 12 months
ended December 31, 1996.
Contribution Analysis. Austin Associates compared the pro forma ownership
interest in Seacoast that holders of PSHC Common Stock and PSHC Warrants would
receive, in the aggregate, to the contribution by PSHC to the total assets,
equity and net income of the combined organization. Based on December 31, 1996
information, holders of PSHC Common Stock and PSHC Warrants would own
approximately 17.5% of Seacoast on a pro forma basis. PSHC's contribution of
total assets equaled 13.9%, the contribution of total equity equaled 13.3%, and
the contribution of 1996 net income equaled 13.9%.
Summary Pro Forma Analysis. Austin Associates also reviewed the pro forma
effect of the Merger to PSHC's and Seacoast's earnings per share and book value
per share. PSHC recorded earnings per share in 1996 of $1.43 and a book value of
$13.77 per share as of December 31, 1996. Giving effect to the Merger through
December 31, 1996, the equivalent PSHC earnings per share would have equaled
$1.70, an increase of 18.9% over actual results. Book value per share would have
increased to $15.07 per share, an increase of 9.4% over actual results. Giving
effect to the Merger, Seacoast's book value per share would be diluted by $.60
or 3.8% and earnings per share would be diluted by $.07 or 3.95%.
Discounted Cash Flow Analysis. Austin Associates performed a discounted
cash flow ("DCF") analysis of the value of PSHC Common Stock and Seacoast Class
A Stock as of December 31, 1996. The discounted cash flow results were based on
projections, discount rates and terminal values considered reasonable by Austin
Associates for the periods ending December 31, 1997 to December 31, 2001. The
DCF value of PSHC was determined to be in the range of $18.2 to $24.7 million.
The value of the Merger at $24.5 million is at the high end of the range of DCF
values of PSHC determined by Austin Associates. The DCF value of Seacoast,
without consideration of the Merger, was determined to be in the range of $23.50
to $30.50 per share.
Dividends. Austin Associates reviewed the cash dividends to be received by
PSHC shareholders as a result of the Merger. Based on an estimated exchange
ratio of .9996 shares of Seacoast Class A Stock for each share of PSHC Common
Stock, equivalent dividends to PSHC shareholders would be $.80. No cash
dividends have been paid to PSHC shareholders since 1994.
The summary set forth above does not purport to be a complete description
of the analyses performed by Austin Associates. Further, Austin Associates did
not conduct a physical inspection of any of the properties or
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assets of PSHC or Seacoast. Austin Associates has assumed and relied upon the
accuracy and completeness of the financial and other information provided to it
or publicly available, has relied upon the representations and warranties of
PSHC and Seacoast made pursuant to the Merger Agreement, and has not
independently attempted to verify any of such information. Austin Associates has
also assumed that the conditions to the Merger as set forth in the Merger
Agreement would be satisfied and that the Merger would be consummated on a
timely basis in the manner contemplated by the Merger Agreement. No limitations
were imposed by PSHC or Seacoast upon Austin Associates on the scope of its
investigation nor were any specific instructions given to Austin Associates in
connection with its fairness opinion.
For Austin Associates' services as financial advisor, PSHC will pay the
firm fees of $35,000, plus a contingent amount equal to .5% of the transaction
value when the Merger is consummated. PSHC estimates that total fees under this
arrangement will be $158,000. In addition, PSHC has agreed to reimburse Austin
Associates for reasonable out-of-pocket expenses and indemnify Austin Associates
against certain liabilities, including liabilities under the securities laws.
Austin Associates has no other material relationship with any of the parties to
the merger or their affiliation.
THE FULL TEXT OF AUSTIN ASSOCIATES' OPINION DATED APRIL 14, 1997, WHICH
SETS FORTH CERTAIN ASSUMPTIONS MADE, MATTERS CONSIDERED, AND LIMITATIONS ON
REVIEW UNDERTAKEN IS ATTACHED AS APPENDIX B TO THIS JOINT PROXY STATEMENT, IS
INCORPORATED HEREIN BY REFERENCE, AND SHOULD BE READ IN ITS ENTIRETY IN
CONNECTION WITH THIS JOINT PROXY STATEMENT. THE SUMMARY OF THE OPINION OF AUSTIN
ASSOCIATES SET FORTH IN THIS JOINT PROXY STATEMENT IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO THE OPINION. AUSTIN ASSOCIATES' OPINION IS DIRECTED ONLY TO THE
FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE STOCK EXCHANGE RATIO TO THE
HOLDERS OF PSHC COMMON STOCK AND OF THE WARRANT EXCHANGE RATIO TO THE HOLDERS OF
PSHC WARRANTS AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF PSHC
COMMON STOCK OR SEACOAST COMMON STOCK AS TO HOW SUCH SHAREHOLDER SHOULD VOTE ON
THE MERGER.
OPINION OF SEACOAST'S FINANCIAL ADVISOR
General.
Seacoast retained Robinson-Humphrey to act as its financial adviser in
connection with the Merger. Robinson-Humphrey has provided various investment
banking services to Seacoast in the past, and is a market maker in Seacoast
Class A Stock. Robinson-Humphrey has rendered an opinion to Seacoast's Board of
Directors that, based on the matters set forth therein, consideration to be paid
pursuant to the Merger is fair, from a financial point of view, to Seacoast's
shareholders. The text of such opinion is set forth in Appendix C to this Joint
Proxy Statement and should be read in its entirety by shareholders of Seacoast.
The aggregate number of shares of Seacoast Class A Stock to be received by
PSHC shareholders and warrant holders in the Merger and the basis for
determining the Stock Exchange Ratio and Warrant Exchange Ratio was determined
by PSHC and Seacoast in arms-length negotiations in which Robinson-Humphrey
participated. No limitations were imposed by the Board of Directors or
management of Seacoast upon Robinson-Humphrey with respect to the investigations
made or the procedures followed by Robinson-Humphrey in rendering its opinion.
In connection with rendering its opinion to Seacoast's Board of Directors,
Robinson-Humphrey performed a variety of financial analysis. However, the
preparation of a fairness opinion involves various determinations as to the most
appropriate and relevant methods of financial analysis and the application of
those methods to the particular circumstances, and, therefore, such an opinion
is not readily susceptible to summary description. Robinson-Humphrey, in
conducting its analysis and in arriving at its opinion, has not conducted a
physical inspection of any of the properties or assets of PSHC, and has not made
or obtained any independent valuation or appraisals of any properties, assets or
liabilities of PSHC. Robinson-Humphrey has assumed and relied upon the accuracy
and completeness of the financial and other information that was provided to it
by Seacoast or that was publicly available. Its opinion is necessarily based on
economic, market and other conditions as in effect on, and the information made
available to it as of, the date of its analysis.
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Valuation Methodologies.
In connection with its opinion on the Merger and the presentation of that
opinion to Seacoast's Board of Directors, Robinson-Humphrey performed two
valuation analyses with respect to PSHC: (i) an analysis of comparable prices
and terms of recent transactions involving banks purchasing other banks; and
(ii) a discounted cash flow analysis. For purposes of the comparable transaction
analysis, Seacoast Class A Stock was valued at $27.25 per share, the closing
price on April 11, 1997. Each of these methodologies is discussed briefly below.
Comparable Transaction Analysis.
Robinson-Humphrey performed the analysis of premiums paid for selected
banks with comparable characteristics to PSHC. Comparable transactions were
considered to be (i) transactions where the seller was a bank with assets less
than $200 million located in Florida since January 1, 1996, (ii) transactions
since January 1, 1996, where the seller was a bank located in the Southeast with
total assets less than $200 million.
Florida Group Comparison.
Based on the first group of the foregoing transactions, financial
institutions purchasing banks in Florida with assets less than $200 million
since January 1, 1996, the analysis yielded a range of transaction values to
book value of 1.01 times to 2.78 times, with a mean of 2.05 times and a median
of 2.06 times. These compare to a transaction value for the Merger of
approximately 1.93 times PSHC's book value as of December 31, 1996.
The analysis yielded a range of transaction values as a multiple of
tangible book value for the comparable transactions ranging from 1.30 times to
2.78 times, with a mean of 2.07 times and a median of 2.06 times. These compare
to a transaction value for the Merger of approximately 1.93 times PSHC's book
value as of December 31, 1996.
The analysis yielded a range of transaction values as a multiple of
trailing twelve month earnings per share. These values ranged from 12.74 times
to 26.69 times, with a mean of 18.05 times and a median of 17.72 times. These
compare to a transaction value to PSHC's last twelve months earnings as of
December 31, 1996 of approximately 16.02 times for the Merger.
The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from 9.51 percent to 27.26 percent, with a mean of
18.08% and a median of 17.79% These compare to a transaction value to PSHC's
December 31, 1996 total assets of 15.52% for the Merger.
Southeastern Group Comparison.
Based on the second group of transactions since January 1, 1996, where the
seller was a bank located in the Southeast with total assets less than $200
million, the analysis yielded a range of transaction values to book value of
0.92 times to 3.07 times, with a mean of 1.91 times and a median of 1.90 times.
These compare to a transaction value for the Merger of approximately 1.93 times
PSHC's book value as of December 31, 1996.
The analysis yielded a range of transaction values as a multiple of
tangible book value for the comparable transactions ranging from 0.99 times to
3.22 times, with a mean of 1.96 times and a median of 1.92 times. These compare
to a transaction value for the Merger of approximately 1.93 times PSHC's book
value as of December 31, 1996.
The analysis yielded a range of transaction values as a multiple of
trailing twelve month earnings per share. These values ranged from 5.43 times to
46.97 times, with a mean of 19.33 times and a median of 18.76 times. These
compare to a transaction value to PSHC's last twelve months earnings as of
December 31, 1996 of approximately 16.02 times for the Merger.
The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from 8.58% to 35.08%, with a mean of 19.07% and a
median of 17.64%. These compare to a transaction value to the December 31, 1996
total assets of 15.52% for the Merger.
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No company or transaction used in the comparable transaction analysis is
identical to PSHC. Accordingly, an analysis of the foregoing necessarily
involves complex considerations and judgments, as well as other factors that
affect the public trading value or the acquisition value of the company to which
it is being compared.
Discounted Cash Flow Analysis.
Using discounted cash flow analysis, Robinson-Humphrey estimated the
present value of the future stream of after-tax cash flows that PSHC could
produce through 2000, under various circumstances, assuming that PSHC performed
in accordance with the earnings/return projections of management at the time
that PSHC entered into acquisition discussions in November 1996.
Robinson-Humphrey estimated the terminal value for PSHC at the end of the period
by applying multiples of earnings ranging from 10.0x to 14.0x and then
discounting the cash flow streams, dividends paid to shareholders and terminal
value using differing discount rates ranging from 10.0 percent to 12.0 percent
chosen to reflect different assumptions regarding the required rates of return
of PSHC and the inherent risk surrounding the underlying projections. This
discounted cash flow analysis indicated a reference range of $21.8 million to
$29.2 million for PSHC.
Compensation of Robinson-Humphrey.
Pursuant to an engagement letter dated as of March 4, 1997 between Seacoast
and Robinson-Humphrey, Seacoast agreed to pay Robinson-Humphrey a fee of $50,000
for preparing and delivering the fairness opinion, and a success fee (to be paid
at the closing of the Merger) equal to approximately 0.55% of the total value of
the consideration paid by Seacoast to holders of PSHC Common Stock and PSHC
Warrants less the fairness opinion fee. Seacoast estimates that total fees under
this arrangement will be approximately $135,000. Seacoast has also agreed to
indemnify and hold harmless Robinson-Humphrey and its officers and employees
against certain liabilities in connection with its services under the engagement
letter, except for liabilities resulting from the negligence of
Robinson-Humphrey.
As part of its investment banking business, Robinson-Humphrey is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes. Seacoast's Board of Directors decided to retain
Robinson-Humphrey based on its experience as a financial advisor in mergers and
acquisitions of financial institutions, particularly transactions in the
Southeastern region of the U.S., and its knowledge of financial institutions and
Seacoast in particular.
EFFECTIVE TIME OF THE MERGER
Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Time will occur on the date and at the time that the
Florida Articles of Merger relating to the Merger is declared effective with the
Florida Secretary of State. Unless otherwise agreed upon by PSHC and Seacoast,
and subject to the conditions to the obligations of the parties to effect the
Merger, the parties will use their reasonable efforts to cause the Effective
Time to occur on the first business day following the last to occur of (i) the
effective date (including the expiration of any applicable waiting period) of
the last consent of any regulatory authority required for the Merger and (ii)
the date on which the shareholders of PSHC and Seacoast approve the matters
relating to the Merger Agreement required to be approved by such shareholders by
applicable law.
No assurance can be provided that the necessary shareholder and regulatory
approvals can be obtained or that other conditions precedent to the Merger can
or will be satisfied. PSHC and Seacoast anticipate that all conditions to
consummation of the Merger will be satisfied so that the Merger can be
consummated during the first six months of 1997. However, delays in the
consummation of the Merger could occur.
The Board of Directors of either PSHC or Seacoast generally may terminate
the Merger Agreement if the Merger is not consummated by August 31, 1997, unless
the failure to consummate by that date is the result of a breach of the Merger
Agreement by the party seeking termination. See "--Conditions to Consummation of
the Merger" and "--Waiver, Amendment, and Termination."
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DISTRIBUTION OF SEACOAST STOCK CERTIFICATES
Promptly after the Effective Time, Seacoast will cause the Exchange Agent,
to mail to each holder of record of a certificate or certificates (collectively,
the "Certificates") which, immediately prior to the Effective Time, represented
outstanding shares of PSHC Common Stock, and to each holder of record of PSHC
Warrants, a letter of transmittal and instructions for use in effecting the
surrender and cancellation of the Certificates and PSHC Warrants in exchange for
certificates representing shares of Seacoast Class A Stock.
HOLDERS OF PSHC COMMON STOCK AND PSHC WARRANTS SHOULD NOT SEND IN THEIR
CERTIFICATES REPRESENTING PSHC COMMON STOCK OR PSHC WARRANTS UNTIL THEY RECEIVE
THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.
Upon surrender to the Exchange Agent of Certificates for PSHC Common Stock
or PSHC Warrants, together with a properly completed letter of transmittal,
there will be issued and mailed to each holder of PSHC Common Stock and PSHC
Warrants (other than shares as to which holders have perfected dissenters'
rights) surrendering such items a certificate or certificates representing the
number of shares of Seacoast Class A Stock to which such holder is entitled, if
any, and a check for the amount to be paid in lieu of any fractional share
(without interest), together with all undelivered dividends or distributions in
respect of such shares (without interest thereon).
After the Effective Time, to the extent permitted by law, holders of PSHC
Common Stock and PSHC Warrants of record as of the Effective Time will be
entitled to vote at any meeting of Seacoast shareholders the number of whole
shares of Seacoast Class A Stock into which their shares of PSHC Common Stock
and PSHC Warrants have been converted, regardless of whether such shareholders
have surrendered their PSHC Common Stock Certificates or PSHC Warrants. Whenever
a dividend or other distribution is declared by Seacoast on Seacoast Class A
Stock, the record date for which is at or after the Effective Time, the
declaration will include dividends or other distributions on all shares issuable
pursuant to the Merger Agreement, but, beginning 30 days after the Effective
Time, no dividend or other distribution payable after the Effective Time with
respect to Seacoast Class A Stock will be paid to the holder of any PSHC Common
Stock Certificate or PSHC Warrant until the holder properly surrenders the
certificates for such instruments in accordance with the Exchange Agent's
instructions. Upon proper surrender of such PSHC Common Stock Certificate or
PSHC Warrant, however, both the Seacoast Class A Stock certificate, together
with all undelivered dividends or other distributions (without interest) and any
undelivered cash payments to be paid in lieu of fractional shares (without
interest), will be delivered and paid with respect to each share of PSHC Common
Stock or PSHC Warrant represented by such certificate. In no event will the
holder of any surrendered Certificate(s) or PSHC Warrants be entitled to receive
interest on any cash to be issued to such holder, and in no event will PSHC,
Seacoast, or the Exchange Agent be liable to any holder of PSHC Common Stock or
PSHC Warrant for any Seacoast Class A Stock or dividends thereon or cash
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat, or similar law.
Upon and after the Effective Time, there will be no transfers of shares of
PSHC Common Stock on PSHC's stock transfer books. If Certificates representing
shares of PSHC Common Stock are presented for transfer after the Effective Time,
they will be canceled and exchanged for the shares of Seacoast Class A Stock and
a check for the amount due in lieu of fractional shares, if any, deliverable in
respect thereof.
Upon and after the Effective Time, holders of PSHC Certificates and PSHC
Warrants will have no rights with respect to the shares of PSHC Common Stock
formerly represented thereby other than the right to surrender such Certificates
and PSHC Warrants and receive in exchange therefor the shares of Seacoast Class
A Stock, if any, to which such holders are entitled, as described above, or the
right to perfect their dissenters' rights.
If any certificate for Seacoast Class A Stock is to be issued in a name
other than that in which the PSHC Certificate or PSHC Warrant surrendered for
exchange is issued, the PSHC Certificate or PSHC Warrant so surrendered shall be
properly endorsed and otherwise in proper form for transfer, and the person
requesting such exchange shall affix any requisite stock transfer tax stamps to
the certificates surrendered, shall provide funds for their purchase, or shall
establish to the exchange agent's satisfaction that such taxes are not payable.
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CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to various conditions, including (i)
receipt of the approval of the Merger Agreement by the shareholders of PSHC as
required by the PSHC Articles of Incorporation and the FBCA, (ii) receipt of the
approval of the Merger Agreement and the transactions contemplated therein,
including the issuance of shares of Seacoast Class A Stock, by the shareholders
of Seacoast as required by Seacoast's Articles of Incorporation, the FBCA and
rules of the National Association of Securities Dealers, Inc. ("NASD"), (iii)
receipt of certain regulatory approvals required for consummation of the Merger,
(iv) receipt of a favorable opinion of Alston & Bird as to the Merger
constituting a reorganization for federal income tax purposes, (v) receipt of
approval of the shares of Seacoast Class A Stock issuable pursuant to the Merger
for listing on the Nasdaq National Market, subject to official notice of
issuance, (vi) the Registration Statement being declared effective and all
necessary SEC and state approvals relating to the issuance or trading of the
shares of Seacoast Class A Stock issuable pursuant to the Merger shall have been
received, (vii) the accuracy, as of the date of the Merger Agreement and as of
the Effective Time, of the representations and warranties of PSHC and Seacoast
as set forth in the Merger Agreement, (viii) the performance of all agreements
and the compliance with all covenants of PSHC and Seacoast as set forth in the
Merger Agreement, (ix) receipt by Seacoast and PSHC of a letter from Arthur
Andersen LLP, dated as of the Effective Time, to the effect the Merger will
qualify for pooling-of-interests accounting treatment; (x) receipt by Seacoast
and PSHC of a letter from KPMG Peat Marwick LLP, dated as of the Effective Time,
to the effect that such firm is not aware of any matters relating to PSHC and
its subsidiaries that would preclude the Merger from qualifying for
pooling-of-interests accounting treatment; (xi) receipt of all consents required
for consummation of the Merger or for the preventing of any default under any
contract or permit which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a material adverse effect; (xi) the absence of
any law or order or any action taken by any court, governmental, or regulatory
authority prohibiting, restricting, or making illegal the consummation of the
transaction; (xii) that the PSHC shareholders' equity as of the closing of the
Merger is not less that PSHC's shareholders' equity as of December 31, 1996,
excluding certain items, and (xiii) satisfaction of certain other conditions,
including the receipt of agreements of affiliates of PSHC relating to claims
against PSHC or Seacoast, non-competition and securities law compliance, and
various certificates from the officers of PSHC and Seacoast. See "--Regulatory
Approvals" and "-- Waiver, Amendment, and Termination."
No assurance can be provided as to when or if all of the conditions
precedent to the Merger can or will be satisfied or waived by the party
permitted to do so. In the event the Merger is not effected on or before August
31, 1997, the Merger Agreement may be terminated and the Merger abandoned by
either PSHC or Seacoast. See "-- Waiver, Amendment, and Termination."
REGULATORY APPROVALS
The Merger may not proceed in the absence of receipt of the requisite
regulatory approvals. ALTHOUGH SEACOAST AND PSHC HAVE NO REASON TO BELIEVE THAT
THE NECESSARY REGULATORY APPROVALS WILL NOT BE OBTAINED, NO ASSURANCE CAN BE
GIVEN THAT SUCH REGULATORY APPROVALS WILL BE OBTAINED OR AS TO THE TIMING OF ANY
SUCH APPROVALS. There also can be no assurance that any such approvals will not
impose conditions or be restricted in a manner (including requirements relating
to the raising of additional capital or the disposition of assets) which in the
reasonable judgment of the Board of Directors of Seacoast would so materially
adversely impact the economic or business benefits of the transactions
contemplated by the Merger Agreement that, had such condition or requirement
been known, Seacoast would not, in its reasonable judgment, have entered into
the Merger Agreement.
PSHC and Seacoast are not aware of any material governmental approvals or
actions that are required for consummation of the Merger, except as described
below. Should any other approval or action be required, it presently is
contemplated that such approval or action would be sought.
The Merger will require the prior approval of the Federal Reserve, pursuant
to Section 3 of the BHC Act. An application was filed with the Federal Reserve
on March 20, 1997. In evaluating the Merger, the Federal Reserve must consider,
among other factors, the financial and managerial resources and future prospects
of
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the institutions and the convenience and needs of the communities to be served.
The relevant statutes prohibit the Federal Reserve from approving the Merger if
(i) it would result in a monopoly or be in furtherance of any combination or
conspiracy to monopolize or attempt to monopolize the business of banking in any
part of the United States or (ii) its effect in any section of the country may
be to substantially lessen competition or to tend to create a monopoly, or if it
would be a restraint of trade in any other manner, unless the Federal Reserve
finds that any anticompetitive effects are outweighed clearly by the public
interest and the probable effect of the transaction in meeting the convenience
and needs of the communities to be served. The Merger may not be consummated
until the 15th day following the date of the Federal Reserve approval, during
which time the United States Department of Justice may challenge the transaction
on antitrust grounds. The commencement of any antitrust action would stay the
effectiveness of the approval of the agencies, unless a court of competent
jurisdiction specifically orders otherwise. The parties have no reason to
believe that the Merger will be questioned as anticompetitive.
The merger of PSNB with and into FNB (the "Bank Merger") is anticipated to
occur immediately subsequent to the Effective Time. The consummation of the Bank
Merger is subject to the receipt of all requisite regulatory approvals,
including the approval of the Office of the Comptroller of the Currency ("OCC").
An Affiliated Bank and Thrift Combination Application was filed with the OCC on
March 26, 1997 to obtain regulatory approval for the Bank Merger. The OCC's
approval is required only with regard to the Bank Merger, and the consummation
of the Merger is not conditioned upon the OCC approval of the Bank Merger.
WAIVER, AMENDMENT, AND TERMINATION
To the extent permitted by applicable law, PSHC and Seacoast may amend the
Merger Agreement by written agreement at any time before or after approval of
the Merger Agreement by the PSHC and Seacoast shareholders; provided, however,
that after the shareholder meetings, no amendment may alter the manner or basis
in which shares of PSHC Common Stock or the PSHC Warrants will be exchanged for
Seacoast Class A Stock without the requisite approval of the holders of the
issued and outstanding shares of PSHC Common Stock, PSHC Warrants and Seacoast
Common Stock entitled to vote thereon. In addition, prior to or at the Effective
Time, either PSHC or Seacoast, or both, acting through their respective Board of
Directors, chief executive officer or other authorized officers may waive any
default in the performance of any term of the Merger Agreement by the other
party, may waive or extend the time for the compliance or fulfillment by the
other party of any and all of its obligations under the Merger Agreement, and
may waive any of the conditions precedent to the obligations of such party under
the Merger Agreement, except any condition that, if not satisfied, would result
in the violation of any applicable law or governmental regulation. No such
waiver will be effective unless written and unless executed by a duly authorized
officer of PSHC or Seacoast, as the case may be.
The Merger Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time (i) by the mutual consent of PSHC and Seacoast; (ii)
by PSHC or Seacoast (a) in the event of any inaccuracy of any representation or
warranty of the other party contained in the Merger Agreement which cannot be or
has not been cured within 30 days after giving written notice to the breaching
party of such inaccuracy and which breach is reasonably likely, in the opinion
of the non-breaching party, to have, individually or in the aggregate, a PSHC or
Seacoast Material Adverse Effect (as defined in the Merger Agreement), as
applicable, on the breaching party, (b) in the event of a material breach by the
other party of any covenant or agreement contained in the Merger Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach, (c) if the Merger is not
consummated by August 31, 1997, provided that the failure to consummate is not
due to the breach by the party electing to terminate, (d) if (1) any approval of
any regulatory authority required for consummation of the Merger and the other
transactions contemplated by the Merger Agreement has been denied by final
nonappealable action, or if any action taken by such authority is not appealed
within the time limit for appeal or (2) the shareholders of PSHC or Seacoast
fail to vote their approval of the matters submitted for the approval by such
shareholders at the shareholder meetings, or (e) if any of the conditions
precedent to the obligations of such party to consummate the Merger have not
been satisfied, fulfilled, or waived by the
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appropriate party by August 31, 1997 (provided that the terminating party is not
then in breach of any representation, warranty, covenant or other agreement
contained in the Merger Agreement); (iii) by Seacoast, in the event that the
PSHC Board of Directors fails to reaffirm its approval of the Merger (to the
exclusion of any other Acquisition Proposal (as defined in the Merger
Agreement)) or if the PSHC Board has resolved not to reaffirm the Merger or has
affirmed, recommended or authorized entering into any other Acquisition Proposal
or other transaction involving a merger, share exchange, consolidation or
transfer of substantially all of the assets of PSHC; or (iv) by PSHC in the
event that the Purchase Price Per Share is less than $24.62.
If the Merger is terminated as described above, the Merger Agreement will
become void and have no effect, except that certain provisions of the Merger
Agreement, including those relating to the obligations to share certain
expenses, maintain the confidentiality of certain information obtained, and
return all documents obtained from the other party under the Merger Agreement,
will survive. In addition, termination of the Merger Agreement will not relieve
any breaching party from liability for any uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination.
DISSENTERS' RIGHTS
If the Merger Agreement and the transactions contemplated thereby are
consummated, any shareholder of PSHC who properly perfects his statutory
dissenter's rights of appraisal may be entitled to receive in cash the fair
value of such shareholder's shares of PSHC Common Stock determined immediately
prior to the Merger, excluding any appreciation or depreciation in anticipation
of the Merger. FAILURE TO STRICTLY COMPLY WITH THE PROCEDURES PRESCRIBED BY
APPLICABLE LAW WILL RESULT IN THE LOSS OF DISSENTERS' RIGHTS.
Any shareholder of PSHC entitled to vote on the Merger Agreement has the
right to receive payment of the fair value of his or her shares of PSHC Common
Stock upon compliance with the applicable provisions of the FBCA. A shareholder
may dissent as to all or less than all of the shares that are registered in his
or her name. Any PSHC shareholder intending to enforce the right to dissent (i)
must not vote in favor of the Merger Agreement, and (ii) must file a written
notice of intent to demand payment for his or her shares (the "Objection
Notice") with PSHC, 1100 S.W. St. Lucie West Boulevard, Port St. Lucie, Florida
34986, telephone (561) 340-2800, Attention: J. Hal Roberts, Jr., before the vote
on the proposal to approve the Merger Agreement and the transactions
contemplated thereby is taken at the meeting. The Objection Notice must state
that the shareholder intends to demand payment for his or her shares of PSHC
Common Stock if the Merger is effected. A VOTE AGAINST APPROVAL OF THE MERGER
AGREEMENT, IN AND OF ITSELF, WILL NOT CONSTITUTE AN OBJECTION NOTICE SATISFYING
THE REQUIREMENTS OF THE FBCA.
If the Merger Agreement is approved by PSHC's shareholders at the PSHC
Special Meeting, each shareholder who has properly filed an Objection Notice and
not voted in favor of the Merger Agreement will be notified by PSHC of such
approval within 10 days of the PSHC Special Meeting. Within 20 days following
receipt of such notice, any shareholder electing to dissent must file a notice
of such election, stating the shareholder's name, address, the number, classes
and series of shares as to which the shareholder dissents, and a demand for
payment of the fair value of such shares ("Election Notice"), and deposit the
certificates representing the PSHC Common Stock with PSHC.
Within the later to occur of 10 days following the expiration of the period
in which shareholders may file their Election Notices and 10 days after the
Merger is consummated (but in no case later than 90 days following the date the
PSHC shareholders approve the Merger Agreement), PSHC must make a written offer
to each shareholder who has properly filed an Election Notice to pay an amount
PSHC estimates to be a fair value for the shareholder's shares. This offer will
be accompanied by certain of PSHC's financial statements. If the Merger is not
consummated within 90 days following the date of approval of the Merger
Agreement, any offer to pay by PSHC to dissenting shareholders shall be
conditional upon consummation of the Merger. Any shareholder who accepts such
offer within 30 days shall receive payment for the dissenting shareholder's
shares within 90 days of such offer to pay or consummation of the Merger,
whichever is later.
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In the event that PSHC fails to make any payment offer within the time
period set forth above or any dissenting shareholder fails to accept such offer
within 30 days, and PSHC receives written demand for payment from any dissenting
shareholder within 60 days following the consummation of the Merger, PSHC must
institute proceedings in state circuit court in St. Lucie County, Florida (the
"Court") requesting that the fair value of such dissenting shareholder's shares
be determined. If PSHC fails to file such action, any dissenting shareholder
will have the right to file an action in such shareholder's own name for
determination as to the fair value of such shareholder's shares. All dissenting
shareholders who have not accepted payment offers by PSHC must be made a party
to such court action. The court may, in its discretion, appoint an appraiser to
receive evidence and recommend a decision on the question of fair value. The
judgment may, in the discretion of the Court, include a fair rate of interest.
Each dissenting shareholder will be entitled to payment, as determined by the
Court, within 10 days following final determination by the court as to the fair
value of such shareholder's stock.
The Court will assess the costs and expenses of such proceeding (including
reasonable compensation for and the expenses of the appraiser, but excluding
fees and expenses of counsel and experts) against PSHC, except that the Court
may assess such costs and expenses as it deems appropriate against any or all of
the dissenting shareholders if it finds that their demand for additional payment
was arbitrary, vexatious or otherwise not in good faith. The Court may award
fees and expenses of counsel and experts in amounts the Court finds equitable
against PSHC if the fair value of the shares, as determined by the Court,
exceeds the amount which PSHC offered to pay or if PSHC failed to make an offer
to pay.
THE FOREGOING SUMMARY OF THE APPLICABLE PROVISIONS OF SECTIONS 607.1301
THROUGH 607.1320 OF THE FBCA IS NOT INTENDED TO BE A COMPLETE STATEMENT OF SUCH
PROVISIONS, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SECTIONS,
WHICH ARE REPRODUCED IN FULL AS APPENDIX D HEREOF. THE PROVISIONS OF THE
STATUTES ARE TECHNICAL IN NATURE AND COMPLEX. IT IS SUGGESTED THAT ANY
SHAREHOLDER WHO DESIRES TO EXERCISE THE RIGHT TO OBJECT TO THE MERGER AGREEMENT
CONSULT HIS COUNSEL. FAILURE TO STRICTLY COMPLY WITH THE PROVISIONS OF THE
STATUTE MAY DEFEAT A SHAREHOLDER'S RIGHT TO DISSENT.
Any dissenting PSHC shareholder who perfects such holder's right to be paid
the value of such holder's shares in cash under the foregoing procedures for
dissent and appraisal will recognize taxable gain or loss for federal income tax
purposes upon receipt of cash for such shares. See "-- Certain Federal Income
Tax Consequences."
CONDUCT OF BUSINESS PENDING THE MERGER
Pursuant to the Merger Agreement, PSHC has agreed that unless the prior
written consent of Seacoast has been obtained, and except as otherwise expressly
contemplated in the Merger Agreement, PSHC will (i) operate its business only in
the usual, regular, and ordinary course and in a manner to preserve intact its
business organization and assets and maintain its rights and franchises, and
(ii) take no action which would (a) adversely affect the ability of any party to
obtain any consents required for the transactions contemplated by the Merger
Agreement without imposition of a condition or restriction of the type referred
to in the Merger Agreement or (b) adversely affect the ability of any party to
perform its covenants and agreements under the Merger Agreement. The Merger
Agreement also provides that except for certain prior commitments made by PSHC
not to exceed $212,000, all loans, leases or extensions of credit secured by
real property originated, purchased or funded in whole or in part by PSHC or its
subsidiaries, where the obligor thereon and the real property related thereto
are not both located in St. Lucie, Martin and/or Indian River Counties, Florida
(collectively, the "Counties") must conform to the Federal National Mortgage
Association ("FNMA") or Federal Home Loan Mortgage Corporation ("FHLMC")
seller/servicer guidelines applicable to such loans and shall be immediately
saleable to FNMA and/or FHLMC. PSHC and each of PSHC's subsidiaries also are
required to terminate and discontinue purchasing, funding or otherwise extending
credit or committing or agreeing to any of the foregoing with respect to any
loans, extensions of credit, leases and/or mortgages or any participations or
other interests therein from any wholesale mortgage business and/or any
affiliate of such wholesale mortgage business, except to meet PSNB's contractual
obligations under the existing commitments, and except to purchase and hold as
temporary investments, up to $2.5 million at any time of fully-approved Federal
Housing Administration and Veterans Administration loans at any time through
April 30, 1997.
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In addition, PSHC has agreed that, prior to the earlier of the Effective
Time or termination of the Merger Agreement, PSHC will not, except with the
prior written consent of the chief executive officer or chief financial officer
of Seacoast or as expressly contemplated or permitted by the Merger Agreement,
agree or commit to do, any of the following: (i) amend the Articles of
Incorporation, Bylaws, or other governing instruments of any PSHC company; (ii)
incur any additional debt obligation or other obligation for borrowed money
(other than indebtedness of a PSHC company to another PSHC company) in excess of
an aggregate of $50,000 (for the PSHC companies on a consolidated basis) except
in the ordinary course of business of the PSHC subsidiaries consistent with past
practices (which shall include, for PSHC subsidiaries that are depository
institutions, the creation of deposit liabilities, purchases of federal funds,
advances from the Federal Home Loan Bank or the Federal Reserve Bank, and entry
into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any asset of any PSHC
company any lien or permit any such lien to exist (other than in connection with
deposits, repurchase agreements, bankers acceptances, "treasury tax and loan"
accounts established in the ordinary course of business, the satisfaction of
legal requirements in the exercise of trust powers, and liens in effect as of
the date of the Merger Agreement that were previously disclosed to Seacoast by
PSHC); (iii) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any PSHC company, or declare or pay any dividend or make any
other distribution in respect of any PSHC capital stock; (iv) except pursuant to
the Merger Agreement, or pursuant to the exercise of stock options outstanding
as of the date of the Merger Agreement and pursuant to the terms thereof in
existence on the date of the Merger Agreement, issue, sell, pledge, encumber,
authorize the issuance of, enter into any contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of PSHC Common Stock, or any other capital
stock of any PSHC company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any security
convertible into any such stock; (v) adjust, split, combine, or reclassify any
capital stock of any PSHC company or issue or authorize the issuance of any
other securities in respect of or in substitution for shares of PSHC Common
Stock or sell, lease, mortgage, or otherwise dispose of or otherwise encumber
any shares of capital stock of any PSHC subsidiary (unless any such shares of
stock are sold or otherwise transferred to another PSHC company) or any assets
having a book value in excess of $50,000 other than in the ordinary course of
business for reasonable and adequate consideration; (vi) (1) except for
purchases of U.S. Treasury securities or U.S. Government agency securities,
which in either case have maturities of one years or less, purchase any
securities or make any material investment, either by purchase of stock or
securities, contributions to capital, asset transfers, or purchase of any
assets, in any person other than a wholly owned PSHC subsidiary, or otherwise
acquire direct or indirect control over any person, other than in connection
with (a) foreclosures in the ordinary course of business, (b) acquisitions of
control by a depository institution subsidiary in its fiduciary capacity, or (c)
the creation of new wholly owned subsidiaries organized to conduct or continue
activities otherwise permitted by the Merger Agreement; (2) make any new loans
or extensions of credit or renew, extend or renegotiate any existing loans or
extensions of credit (a) with respect to properties or businesses outside of the
Counties or to borrowers whose principal residence is outside of the Counties,
(b) that are unsecured in excess of $100,000, or (c) that are secured in excess
of $250,000; (3) purchase or sell (except for sales of single family residential
first mortgage loans in the ordinary course of PSHC's business for fair market
value) any whole loans, leases, mortgages or any loan participations or agented
credits or other interest therein, (4) renew or renegotiate any loans or credits
that are on any watch list and/or are classified or special mentioned or take
any similar actions with respect to collateral held with respect to debts
previously contracted or other real estate owned, except pursuant to safe and
sound banking practices and with prior disclosure to FNB; provided, however,
that PSHC may, without the prior notice to or written consent of FNB, renew or
extend existing credits on substantially similar terms and conditions as present
at the time such credit was made or last extended, renewed or modified, for a
period not to exceed one year and at rates not less than market rates for
comparable credits and transactions and without any release of any collateral
except as any PSHC company is presently obligated under existing written
agreements kept as part of such PSHC company's official records and further,
provided, that if any PSHC company makes, extends, renews, renegotiates,
compromises or settles any loans or extensions of credit or releases any
collateral therefor that are subject to the prior disclosure to FNB hereunder
and FNB has objected thereto, the aggregate consideration to be paid to holders
of PSHC Common Stock and
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PSHC Warrants shall be reduced on a dollar for dollar basis in an amount equal
to all outstanding principal of, all accrued but unpaid interest and other
charges on such loan(s) as of the Closing Date, (vii) grant any increase in
compensation or benefits to the employees or officers of any PSHC company except
in accordance consistent with past practice previously disclosed to Seacoast by
PSHC or as required by law; pay any severance or termination pay or any bonus
other than pursuant to written policies or written contracts in effect on the
date of the Merger Agreement; enter into or amend any severance agreements with
officers of any PSHC company; or grant any material increase in fees or other
increases in compensation or other benefits to directors of any PSHC company
except in accordance with past practice previously disclosed to Seacoast by
PSHC; (viii) voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; (ix) enter into or amend any
employment contract between any PSHC company and any person (unless such
amendment is required by law) that the PSHC company does not have the
unconditional right to terminate without liability (other than liability for
services already rendered), at any time on or after the Effective Time; (x)
adopt any new employee benefit plan of any PSHC company or terminate or withdraw
from, or make any material change in or to any existing employee benefit plans
of any PSHC company other than any such change that is required by law or that,
in the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan; or make any distributions from such employee
benefit plans, except as required by law, the terms of such plans or consistent
with past practice, (xi) make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be necessary
to conform to changes in tax laws or regulatory accounting requirements or
generally accepted accounting principles; (xii) commence any litigation other
than in accordance with past practice or settle any litigation involving any
liability of any PSHC company for material money damages or restrictions upon
the operations of any PSHC company; or (xiii) except in the ordinary course of
business and expressly permitted by the Merger Agreement, enter into, modify,
amend or terminate any material contract (including and loan contract with an
unpaid balance or any contract for payments exceeding $100,000), or waive,
release compromise or assign any material rights or claims.
The Merger Agreement also provides that from the date of the Merger
Agreement until the earlier of the Effective Time or the termination of the
Merger Agreement, Seacoast covenants and agrees that it will (i) continue to
conduct its business and the business of its subsidiaries in a manner designed
in its reasonable judgment, to enhance the long-term value of the Seacoast
capital stock and the business prospects of the Seacoast companies, and to the
extent consistent therewith use all reasonable efforts to preserve intact the
Seacoast core businesses and goodwill with their respective employees and the
communities they serve, and (ii) take no action which would (a) materially
adversely affect the ability of any party to obtain any consents required for
the transactions contemplated by the Merger Agreement without imposition of a
condition or restriction of the type referred to in the Merger Agreement, or (b)
materially adversely affect the ability of any party to perform its covenants
and agreements under the Merger Agreement; provided, that any Seacoast company
may acquire any assets or other businesses or discontinue or dispose of any of
its assets or business if such action is, in the judgment of Seacoast, desirable
in the conduct of the business of Seacoast and its subsidiaries. Seacoast also
has agreed to not amend the Seacoast Articles of Incorporation or Bylaws in a
manner adverse to the holders of PSHC Common Stock as compared to the rights of
holders of Seacoast Common Stock generally as of the date of the Merger
Agreement.
MANAGEMENT AND OPERATIONS AFTER THE MERGER; INTEREST OF CERTAIN PERSONS IN THE
MERGER
Seacoast will be the surviving corporation resulting from the Merger.
Following consummation of the Merger, PSNB will be merged into and with FNB,
leaving FNB as the sole banking subsidiary of Seacoast. The officers of Seacoast
in office immediately prior to the Effective Time shall continue to serve as
officers of Seacoast after the Effective Time. It is anticipated that promptly
after the consummation of the Merger, Jeffrey S. Furst and Christopher E. Fogal,
current directors of PSHC, will become members of the Seacoast and FNB Board of
Directors. J. Hal Roberts, Jr., the current Chief Executive Officer of PSHC,
will become an executive officer of Seacoast and FNB. The following members of
the PSHC Board of Directors will become members of a newly created FNB Advisory
Board of Directors for St. Lucie County: Charles E. Bigge, Howard L. Bickford,
Ellen J. Guterl, Harold H. Goldman, Raymond L. Isenburg, Joe Marinaro, and
George V. Weston. For information concerning the current directors and
management of Seacoast and
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compensation thereof, see "ELECTION OF SEACOAST DIRECTORS." For additional
information regarding the interests of certain persons in the Merger, see
"-- Interest of Certain Persons in the Merger." For a description of the
provisions of the Merger Agreement affecting the operations of PSHC and Seacoast
prior to the Effective Time, see "-- Conduct of Business Pending the Merger."
Indemnification and Advancement of Expenses. The Merger Agreement provides
that Seacoast will indemnify the present and former directors, officers,
employees, and agents of PSHC and its subsidiaries against all liabilities
arising out of actions or omissions arising out of the indemnified party's
service as a director, officer, employee or agents of PSHC, or at PSHC's
request, of another corporation, partnership, joint venture, trust or other
enterprise occurring at or prior to the Effective Time to the full extent
permitted under Florida law and by PSHC's Articles of Incorporation or Bylaws,
as in effect on the date of the Merger Agreement, including provisions relating
to advances of expenses incurred in the defense of any litigation and whether or
not Seacoast is insured against any such matter. In any case in which approval
by Seacoast is required to effectuate any indemnification, at the election of
the indemnified party, the determination of any such approval will be made by
independent counsel mutually agreed upon between Seacoast and the indemnified
party.
Director and Officer Insurance. The Merger Agreement provides that
Seacoast shall, to the extent available, (and PSHC shall cooperate prior to the
Effective Time in these efforts) maintain in effect for a period of two years
after the Effective Time PSHC's existing directors' and officers' liability
insurance policy (provided that Seacoast may substitute therefor (i) policies of
at least the same coverage and amounts containing terms and conditions which are
substantially no less advantageous or (ii) with the consent of PSHC given prior
to the Effective Time, any other policy) with respect to claims arising from
facts or events which occurred prior to the Effective Time and covering persons
who are currently covered by such insurance. Seacoast shall not, however, be
obligated to make aggregate premium payments for such two-year period in respect
of such policy (or coverage replacing such policy) which exceed, for the portion
related to PSHC's directors and officers, 150% of the annual premium payments on
PSHC's current policy in effect as of the date of the Merger Agreement.
Employment Agreement.
Seacoast and FNB have entered into an employment agreement with J. Hal
Roberts, Jr., dated as of February 19, 1997, which will become effective at the
Effective Time (the "Roberts Agreement"). The terms of the Roberts Agreement are
substantially similar to the terms in Seacoast's other employment agreements
with executive officers. The Roberts Agreement has a three-year term and
provides for automatic renewal on an annual basis at the end of that term;
provided, however, that either Roberts, Seacoast or FNB may prevent such
automatic renewal by giving written notice to that effect not less than 90 days
prior to the end of the agreement's then current term.
The Roberts Agreement provides for a base salary of $150,000, a grant of
stock options to purchase 9,000 shares of Seacoast Class A Stock at a per share
exercise price equal to the fair market value of a share of Seacoast Class A
Stock on the date of the grant, hospitalization insurance, long-term disability
and life insurance in accordance with FNB's insurance plans for senior
management, and reasonable club dues. Roberts may also receive other
compensation including bonuses, and will be entitled to participate in all
current and future employee benefit plans and arrangements in which senior
management of FNB may participate.
The Roberts Agreement provides for Mr. Roberts' termination for cause,
including willful and continued failure to perform the assigned duties, breach
of the fiduciary duties of loyalty and care to Seacoast and FNB, crimes
involving fraud, dishonesty or a breach of trust, breach of FNB's Code of
Ethics, commission of willful or negligent acts which cause material harm to
Seacoast or FNB, habitual absenteeism, alcoholism or other form of drug or other
addiction, and also upon Mr. Roberts' death or permanent disability. The Roberts
Agreement contains a change in control provision that would allow Mr. Roberts to
terminate the contract within one year following the date of a "change of
control," as defined in the Roberts Agreement. A "change of control" includes
the acquisition of FNB or Seacoast in a merger, consolidation or similar
transaction, the acquisition of 51% or more of the voting power of any one or
all classes of Seacoast Common Stock, the sale of
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all or substantially all of the assets of Seacoast or FNB, and certain other
changes in share ownership. Termination may also be permitted by Mr. Roberts in
the event of a change in duties and powers, customarily associated with the
office designated in such contract. Upon any such termination by Mr. Roberts
following a change in control or a change in duties and powers which are
customarily associated with such office, or an improper termination by Seacoast
or FNB, Mr. Roberts' base salary, hospitalization and other health and insurance
benefits will continue for two years.
The Roberts Agreement provides that upon Mr. Roberts' death, FNB will
continue to pay Mr. Roberts' base salary and provide hospitalization insurance
and other such health insurance benefits that would have been provided to Mr.
Roberts' wife and eligible dependents at the date of his death for a period of
two years. In the event that Mr. Roberts becomes permanently disabled and is
terminated, Mr. Roberts' base salary, hospitalization and other health and
insurance benefits will continue for a period of two years and will be offset by
amounts payable under FNB's long-term disability plan. After such two-year
period Mr. Roberts will receive only such amounts, if any, as are payable under
FNB's long-term disability plan or any other employee benefit or welfare plan in
which Mr. Roberts participated and is entitled to benefits.
The non-competition clause in the Roberts Agreement provides that, during
the term of the Roberts Agreement and for a period of two years after the
termination of Mr. Roberts' employment, Mr. Roberts is prohibited from engaging
in the business of banking, fiduciary services, securities brokerage, investment
management or services, or lending or deposit taking within Martin, Indian
River, or St. Lucie Counties, Florida or any other county Seacoast conducts
business on the date Mr. Roberts' employment is terminated. Mr. Roberts is also
prohibited from beneficially owning 5% or more of the outstanding capital stock
of any such business other than Seacoast or FNB, and from serving as an officer,
director, trustee or agent of an entity conducting any such business within
Martin, Indian River, or St. Lucie Counties, Florida or any other county
Seacoast conducts business on the date Mr. Roberts' employment is terminated.
The Roberts Agreement contains a non-solicitation clause prohibiting Mr. Roberts
from soliciting an employee to leave his or her employment with Seacoast or FNB
for a period of two years after Mr. Roberts' termination of employment. Pursuant
to the non-disclosure clause, Mr. Roberts may not disclose confidential
information and trade secrets of Seacoast, FNB, or their subsidiaries and
affiliates, or utilize such information in any manner, including without
limitation to solicit any customer of Seacoast, FNB or their affiliates, other
than Mr. Roberts' family members, for a period of two years after the term of
the Roberts Agreement.
Officer Stock Options. PSHC has granted stock options to certain of its
officers under the PSHC Stock Option Plan (the "PSHC Option Plan") with respect
to an aggregate of 50,820 shares of PSHC Common Stock. Options granted include
incentive stock options and non-qualified stock options which vest immediately
upon grant or in not more than ten years from the date of grant unless
accelerated in accordance with the PSHC Option Plan or individual option
agreement, including upon a change in control (as defined in the PSHC Option
Plan). Such stock options will be assumed by Seacoast in the Merger.
Other Matters Relating to PSHC Employee Benefit Plans. The Merger
Agreement also provides that, after the Effective Time, Seacoast will provide
generally to officers and employees of PSHC and its subsidiaries employee
benefits under employee benefit and welfare plans (other than stock option or
other plans involving the potential issuance of Seacoast Common Stock), on terms
and conditions which when taken as a whole are substantially similar to those
currently provided by Seacoast to its similarly situated officers and employees.
Seacoast has also agreed that for a period of 12 months after the Effective
Time, Seacoast will provide generally to officers and employees of PSHC and its
subsidiaries severance benefits in accordance with the policies of either (i)
PSHC as previously disclosed to Seacoast or (ii) Seacoast, whichever of (i) or
(ii) will provide the greater benefit to the officer or employee. Seacoast has
also agreed to waive any pre-existing condition exclusion under any employee
health plan for which any employees and/or officers and dependents covered by
PSHC plans as of the Effective Time shall become eligible by virtue of the
preceding sentence, to the extent (i) such pre-existing condition was covered
under the corresponding plan maintained by PSHC or its subsidiaries and (ii) the
individual affected by the pre-existing condition was covered by PSHC's
corresponding plan on the date which immediately precedes the Effective Time,
provided that PSHC has previously disclosed to Seacoast and confirms at the
Effective Time that none of PSHC's employees, officers or other participants or
their respective dependents, to the best of PSHC's and PSNB's knowledge and
belief, have any long-term disabilities or conditions, which in the reasonable
judgment of
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Seacoast would materially adversely affect the claims experience and/or costs of
any employee benefit plan or insurance maintained by or through Seacoast or its
subsidiaries.
For purposes of participation, vesting and (except in the case of Seacoast
retirement plans) benefit accrual under Seacoast's employee benefit plans, the
service of the employees of the PSHC and its subsidiaries prior to the Effective
Time shall be treated as service with Seacoast. The Merger Agreement further
provides that Seacoast will honor, in accordance with their terms, all
employment, severance, consulting, and other compensation contracts disclosed to
Seacoast between PSHC or its subsidiaries and any current or former director,
officer, or employee thereof, and all provisions for vested benefits or other
vested amounts earned or accrued through the Effective Time under the PSHC
benefit plans.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain anticipated federal income tax
consequences of the Merger. This summary is based on the federal income tax laws
as now in effect and as currently interpreted. This summary does not take into
account possible changes in such laws or interpretations, including amendments
to applicable statutes or regulations or changes in judicial or administrative
rulings, some of which may have retroactive effect. This summary does not
purport to address all aspects of the possible federal income tax consequences
of the Merger and is not intended as tax advice to any person. In particular,
and without limiting the foregoing, this summary does not address the federal
income tax consequences of the Merger to shareholders in light of their
particular circumstances or status (for example, as foreign persons, tax-exempt
entities, dealers in securities, insurance companies, and corporations, among
others). Nor does this summary address any consequences of the Merger under any
state, local, estate, or foreign tax laws. Shareholders, therefore, are urged to
consult their own tax advisors as to the specific tax consequences to them of
the Merger, including tax return reporting requirements, the application and
effect of federal, foreign, state, local, and other tax laws, and the
implications of any proposed changes in the tax laws.
A federal income tax ruling with respect to this transaction was not
requested from the Internal Revenue Service ("IRS"). Instead, Alston & Bird LLP,
special tax counsel to Seacoast, has rendered an opinion to PSHC and Seacoast
concerning certain federal income tax consequences of the proposed Merger under
federal income tax law. It is such firm's opinion that, based upon the
assumption that the Merger is consummated in accordance with the FBCA and in
conformity with the representations made by the management of PSHC and Seacoast,
the transaction will have the following federal income tax consequences:
(a) The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code.
(b) No gain or loss will be recognized by Seacoast or PSHC as a result
of the Merger.
(c) No gain or loss will be recognized to the PSHC shareholders upon
the receipt of Seacoast Class A Stock solely in exchange for their shares
of PSHC Common Stock.
(d) The basis of the Seacoast Class A Stock to be received by PSHC
shareholders will be the same as the basis of the PSHC Common Stock
surrendered in the exchange, less any basis attributable to fractional
shares of Seacoast Class A Stock settled by cash payment.
(e) The holding period of the Seacoast Class A Stock to be received by
PSHC shareholders will include the holding period of the PSHC Common Stock
surrendered in exchange therefor, provided that the PSHC Common Stock was
held as a capital asset on the date of the exchange.
(f) The payment of cash to a PSHC shareholder in lieu of issuing a
fractional share interest in Seacoast will be treated for federal income
tax purposes as if the fractional share was distributed as part of the
exchange and then was redeemed by Seacoast. This cash payment will be
treated as having been received as a distribution in full payment in
exchange for the stock redeemed as provided in Section 302(a) of the Code.
Generally, any gain or loss recognized upon such exchange will be capital
gain or loss, provided the fractional share would constitute a capital
asset in the hands of the exchanging shareholder.
(g) The payment of cash in respect of shares of PSHC Common Stock as
to which appraisal rights are perfected will be treated as distributions in
full payment in exchange for such shares of PSHC Common Stock. Generally,
any gain or loss recognized upon such exchange will be capital gain or
loss, provided the shares of PSHC Common Stock constitute a capital asset
in the hands of the exchanging shareholder.
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The tax opinion does not address the tax consequences of the exchange in
the Merger of PSHC Warrants for Seacoast Class A Stock. Under current law, the
tax consequences of such exchange are unclear. Existing Treasury regulations
state that warrants are not stock or securities for purposes of the
reorganization provisions of the Code. Although recently proposed regulations
would treat a warrant issued by a party to a reorganization as a security that
could be exchanged for stock in another party to the reorganization without the
recognition of gain or loss, those regulations are not proposed to be effective
until 60 days after the proposed regulations are adopted as final regulations.
Proposed regulations are not binding on the IRS, and may not be relied upon by a
taxpayer. Holders of PSHC Warrants should consult their own tax advisors with
respect to the possible tax consequences of the exchange of PSHC Warrants for
Seacoast Class A Stock in the Merger.
BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER MAY VARY DEPENDING UPON THE
PARTICULAR CIRCUMSTANCES OF EACH SHAREHOLDER AND OTHER CIRCUMSTANCES, AND
BECAUSE BASED ON EXISTING BINDING AUTHORITIES, THE EXCHANGE OF WARRANTS MAY NOT
BE TREATED THE SAME AS THE EXCHANGE OF STOCK BY STOCKHOLDERS, EACH HOLDER OF
PSHC COMMON STOCK OR PSHC WARRANTS IS URGED TO CONSULT SUCH HOLDER'S OWN TAX
ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE
MERGER (INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME
AND OTHER TAX LAWS).
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a
pooling-of-interests. Under the pooling-of-interests method of accounting, the
recorded amounts of the assets and liabilities of PSHC will be carried forward
at their previously recorded amounts.
In order for the Merger to qualify for pooling-of-interests accounting
treatment, substantially all (90% or more) of the outstanding PSHC Common Stock
must be exchanged for Seacoast Class A Stock with substantially similar terms.
There are certain other criteria that must be satisfied in order for the Merger
to qualify as a pooling-of-interests, some of which criteria cannot be satisfied
until after the Effective Time.
For information concerning certain conditions to be imposed on the exchange
of PSHC Common Stock for Seacoast Class A Stock in the Merger by affiliates of
PSHC and certain restrictions to be imposed on the transferability of the
Seacoast Class A Stock received by those affiliates in the Merger in order,
among other things, to ensure the availability of pooling-of-interests
accounting treatment, see "-- Resales of Seacoast Class A Stock."
EXPENSES AND FEES
The Merger Agreement provides, in general, that each of the parties will
bear and pay its own expenses in connection with the transactions contemplated
by the Merger Agreement, including fees and expenses of its own financial or
other consultants, investment bankers, accountants, and counsel, except that
each of Seacoast and PSHC will bear and pay one-half of the printing costs in
connection with the Registration Statement and this Joint Proxy Statement.
RESALES OF SEACOAST CLASS A STOCK
Seacoast Class A Stock to be issued to shareholders of PSHC and holders of
PSHC Warrants in connection with the Merger will be registered under the
Securities Act. All shares of Seacoast Class A Stock received by holders of PSHC
Common Stock and PSHC Warrants, and generally all shares of Seacoast Class A
Stock issued and outstanding immediately prior to the Effective Time, upon
consummation of the Merger will be freely transferable by those shareholders of
PSHC and Seacoast not deemed to be "Affiliates" of PSHC or Seacoast.
"Affiliates" generally are defined as persons or entities who control, are
controlled by, or are under common control with PSHC or Seacoast at the time of
the Meetings (generally, executive officers and directors).
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Rules 144 and 145 promulgated under the Securities Act restrict the sale of
Seacoast Class A Stock received in the Merger by Affiliates and certain of their
family members and related interests. Generally speaking, during the one-year
period following the Effective Time, Affiliates of PSHC or Seacoast may resell
publicly the Seacoast Class A Stock received by them in the Merger within
certain limitations as to the amount of Seacoast Class A Stock sold in any
three-month period and as to the manner of sale. After this one-year period,
such Affiliates of PSHC who are not Affiliates of Seacoast may resell their
shares without restriction. This Joint Proxy Statement does not cover any
resales of Seacoast Class A Stock received by persons who may be deemed to be
Affiliates of PSHC or Seacoast.
PSHC has agreed to use its reasonable efforts to cause each person who may
be deemed to be an Affiliate of PSHC to execute and deliver to Seacoast prior to
the Effective Time, an agreement (each, an "Affiliate Agreement") providing that
such Affiliate will not sell, pledge, transfer, or otherwise dispose of any
Seacoast Class A Stock obtained as a result of the Merger (i) except in
compliance with the Securities Act and the rules and regulations of the SEC
thereunder and (ii) in any case, until after results covering 30 days of post-
Merger operations of Seacoast have been published. The receipt of these
Affiliate Agreements by Seacoast is also a condition to Seacoast's obligation to
consummate the Merger. Certificates representing shares of PSHC Common Stock
surrendered for exchange by any person who is an Affiliate of PSHC for purposes
of Rule 145(c) under the Securities Act shall not be exchanged for certificates
representing shares of Seacoast Class A Stock until Seacoast has received such a
written agreement from such person. Prior to publication of such results,
Seacoast will not transfer on its books any shares of Seacoast Class A Stock
received by an Affiliate pursuant to the Merger. The stock certificates
representing Seacoast Class A Stock issued to Affiliates in the Merger may bear
a legend summarizing the foregoing restrictions. See "-- Conditions to
Consummation of the Merger."
EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS
As a result of the Merger, holders of PSHC Common Stock will be exchanging
their shares of a Florida corporation governed by the FBCA and PSHC's Articles
of Incorporation (the "PSHC Articles") and Bylaws, for shares of Class A Stock
of Seacoast, a Florida corporation governed by the FBCA and Seacoast's Articles
of Incorporation (the "Seacoast Articles") and Bylaws. Certain significant
differences exist between the rights of PSHC shareholders and those of Seacoast
shareholders. The differences deemed material by PSHC and Seacoast are
summarized below. The following discussion is necessarily general; it is not
intended to be a complete statement of all differences affecting the rights of
shareholders, and their respective entities, and it is qualified in its entirety
by reference to the FBCA as well as to Seacoast's Articles and Bylaws and PSHC's
Articles and Bylaws.
AUTHORIZED CAPITAL STOCK
Seacoast. The Seacoast Articles authorize the issuance of two classes of
common stock, Class A Stock and Class B Stock. Seacoast is authorized to issue
an aggregate of 10,000,000 shares of Class A Stock, $.10 par value, of which
3,874,531 shares were issued and outstanding as of the Seacoast Record Date, and
810,000 shares of Class B Stock, $.10 par value, of which 384,638 shares were
issued and outstanding as of the Seacoast Record Date. The Seacoast Articles
also authorize the issuance, in one or more series, of not more than 1,000,000
shares of preferred stock, $1.00 par value ("Seacoast Preferred Stock") with
rights, preferences, liquidation value, dividend rate, conversions rights and
other terms to be designated in one or more distinctive series by the Seacoast
Board of Directors at the time of such issuance.
Unless otherwise required by law or the Seacoast Articles, Seacoast Class A
Stock and Class B Stock vote together as a single class on all matters presented
to Seacoast shareholders. Each share of Seacoast Class A Stock is entitled to
one vote for all purposes. Each share of Class B Stock is entitled to 10 votes
for all purposes. No cash dividend may be declared or paid on shares of Class B
Stock unless, simultaneously therewith or prior thereto, there is or has been
declared or paid (as the case may be) a cash dividend on the shares of Seacoast
Class A Stock of at least 110% of the cash dividend on the shares of Class B
Stock. A
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dividend payable in shares of Seacoast Class A Stock shall also be paid to
holders of Class B Stock at the same time and on the same basis that such
dividend is payable to the holders of Seacoast Class A Stock.
In any liquidation or dissolution of Seacoast, the holders of the Seacoast
Class A Stock shall be entitled to receive, out of the assets available for
distribution to holders of Seacoast Common Stock, an amount equal to $2.50 per
share before any amount shall be paid to holders of the Class B Stock. After
such preference amount has been paid to the holders of the Seacoast Class A
Stock, the holders of Class B Stock shall then be entitled to next receive, out
of the assets available for distribution to the holders of Seacoast Class A
Stock, a like amount per share. Thereafter, holders of Seacoast Class A Stock
and Class B Stock shall be entitled to participate, pro rata in accordance with
the number of shares owned by them, in the distribution of Seacoast's remaining
assets.
Each share of Class B Stock shall have an unlimited right of conversion to
one share of Seacoast Class A Stock; provided, however, that such right of
conversion shall not be available to Class B Stock subsequent to the approval of
a liquidation or dissolution of Seacoast by Seacoast shareholders.
Seacoast's Board of Directors may authorize the issuance of authorized but
unissued shares of Seacoast Class A Stock and Class B Stock without further
action by Seacoast's shareholders, unless such action is required in a
particular case by applicable laws or regulations or by any stock exchange upon
which Seacoast's capital stock may be listed. Seacoast's shareholders do not
have the preemptive right to purchase or subscribe to any unissued authorized
shares of Seacoast Class A Stock, Class B Stock or Seacoast Preferred Stock or
any option or warrant for the purchase thereof.
The authority to issue additional shares of Seacoast Common Stock provides
Seacoast with the flexibility necessary to meet its future needs without the
delay resulting from seeking shareholder approval. The authorized but unissued
shares of Seacoast Common Stock will be issuable from time to time for any
corporate purpose, including, without limitation, stock splits, stock dividends,
employee benefit and compensation plans, acquisitions, and public or private
sales for cash as a means of raising capital. Such shares could be used to
dilute the stock ownership of persons seeking to obtain control of Seacoast. In
addition, the sale of a substantial number of shares of Seacoast Common Stock,
particularly Class B Stock, to persons who have an understanding with Seacoast
concerning the voting of such shares, or the distribution or declaration of a
dividend of shares of Seacoast Common Stock (or the right to receive Seacoast
Common Stock) to Seacoast shareholders, may have the effect of discouraging or
increasing the cost of unsolicited attempts to acquire control of Seacoast.
PSHC. PSHC's authorized capital stock consists of 10,000,000 shares of
PSHC Common Stock, $.01 par value, of which 744,655 shares were issued as of the
PSHC Record Date. PSHC's shareholders do not have the preemptive right to
purchase or subscribe to any unissued authorized shares of PSHC Common Stock or
any option or warrant for the purchase thereof. In addition, shares of PSHC
Common Stock can be issued by authorization of the Board of Directors of PSHC
without the approval of the shareholders, except in certain instances prescribed
by the FBCA.
The Board of Directors of PSHC may, from time to time, declare and pay
dividends, but only to the extent that such dividends are declared and paid from
PSHC's unreserved and unrestricted earned surplus. The amount per share paid as
a dividend out of capital surplus shall be disclosed to the shareholders.
Dividends may be paid on any authorized but unissued shares of PSHC stock,
provided that certain adjustments provided in the PSHC Bylaws are made with
regard to PSHC's stated capital at the time of issuance of such shares.
AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS
Seacoast. The Seacoast Articles provide that the Seacoast Articles may be
amended as provided by law. The FBCA generally provides that, unless a
corporation's articles of incorporation specify a greater voting requirement,
the corporation's articles of incorporation may not be amended unless (i) the
Board of Directors recommends the amendment to the shareholders (unless the
Board elects to make no recommendation and communicates the basis for its
election to the shareholders) and (ii) the amendment is adopted by a majority
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of the votes entitled to be cast on the amendment by each voting group entitled
to vote thereon. The Seacoast Articles also provide that the provisions
regarding the approval required for certain business combinations may only be
changed by the affirmative vote of (i) the holders of at least two-thirds of all
of the shares of Seacoast Class A Stock outstanding and entitled to vote, voting
as a separate class, and (ii) the holders of shares with at least two-thirds of
all votes entitled to be cast by all shares of Seacoast Common Stock (Class A
Stock and Class B Stock) outstanding, voting together as a single class.
Amendments to these provisions are being proposed at the Seacoast Annual
Meeting. See "AMENDMENTS TO SEACOAST'S ARTICLES OF INCORPORATION."
The Seacoast Articles also provides that the Bylaws may be made, altered or
rescinded by a two-thirds majority vote of the Seacoast Directors. Neither the
Seacoast Articles or Bylaws expressly permit the Seacoast shareholders to make,
alter or rescind any Bylaws.
PSHC. Amendments to the PSHC Articles may also be made in accordance with
the FBCA, as described above, except that a special vote is required to amend
the provisions regarding the approval of certain business combinations, the
removal of directors, and any amendments made to the amendment provision itself.
In such cases, the affirmative vote of the holders of at least seventy-five
percent (75%) of the PSHC shares of capital stock outstanding and entitled to
vote is required for approval.
The effect of PSHC's more stringent voting requirement for the amendment of
those PSHC Articles relating to business consolidations and the removal of
directors is that PSHC shareholders possess a greater ability to prevent the
amendment of such provisions than do the shareholders of Seacoast. Conversely,
Seacoast shareholders are afforded more latitude in amending the provisions in
the Seacoast Articles relating to business consolidations and the removal of
directors than are the shareholders of PSHC with regard to the PSHC Articles.
In general, PSHC's Bylaws may be amended by its shareholders or by a
majority of the full Board of Directors at a regular Board meeting.
CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
Seacoast. Seacoast's Bylaws generally provide that the number of directors
constituting the Seacoast Board shall be not less than five nor more than 14, as
fixed from time to time by resolution of Seacoast's Board of Directors.
Currently the number of directors is fixed at 10. Unlike the PSHC Board, the
Seacoast Board is not classified. Seacoast shareholders do not have cumulative
voting rights with respect to the election of directors. All elections for
directors are decided by a plurality vote.
PSHC. The PSHC Articles provide that PSHC's Board of Directors is divided
into three classes, with each class to be as nearly equal in number as possible.
The number of directors is determined by the Board of Directors from time to
time, but in no event shall the Board have less than five directors nor more
than 11 directors. The directors in each class serve three-year terms of office.
The effect of PSHC having a classified Board of Directors is that only
approximately one-third of the members of the Board are elected each year, which
effectively requires two annual meetings for PSHC's shareholders to change a
majority of the members of the Board. The PSHC Bylaws provide that in the event
of a vacancy on the PSHC Board of Directors, including any vacancy created by
reason of an increase in the number of directors, may be filled by the
affirmative vote of a majority of the remaining directors through less than a
quorum of the PSHC Board of Directors. In general, the election of directors by
PSHC shareholders is in accordance with the FBCA, which provides that the
elections for directors are determined by a plurality vote.
REMOVAL OF DIRECTORS
Seacoast. Under the Seacoast Bylaws, any director or the entire Board of
Directors may be removed for cause by the vote of the shareholders or by action
of the Board of Directors. Seacoast directors may be removed without cause only
by the vote of the shareholders.
PSHC. The PSHC Bylaws provide that directors of PSHC may be removed by the
shareholders at any time for cause, in accordance with the FBCA. The removal of
PSHC directors without cause requires the
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affirmative vote of at least seventy-five percent (75%) of the outstanding
shares of capital stock of PSHC entitled to vote in the election of directors.
The PSHC shareholders face a more restrictive voting requirement to remove
PSHC directors than Seacoast shareholders do with respect to Seacoast directors.
The effect of this difference in voting requirements is that the directors of
PSHC are afforded greater protection against their removal by the vote of the
PSHC shareholders than are the directors of Seacoast.
INDEMNIFICATION
Seacoast. The Seacoast Bylaws generally provide that a director is
indemnified against liability and other expenses incurred in a proceeding by
reason of the fact he is a director, in accordance with Section 607.0850 of the
FBCA. Directors are indemnified against all expenses arising from the proceeding
except in cases where the director's actions were material to the cause of
action and constituted a violation of criminal law, a transaction from which the
director derived an improper gain, a willful misconduct or conscious disregard
for the best interests of Seacoast, or certain enumerated violations contained
in Section 607.0834 of the FBCA. Seacoast's Bylaws provide for the advancement
of expenses to its directors at the outset of a proceeding, the purchase of
insurance by Seacoast against any liability of the director, and the survival of
such indemnification to the director's heirs. The indemnification provisions are
non-exclusive, and shall not impair any other rights to which those seeking
indemnification or advancement of expenses may be entitled.
PSHC. The provisions in the PSHC Bylaws relating to indemnification are
substantially the same as those found in the Seacoast Bylaws. The PSHC Bylaws
provide that PSHC shall indemnify its directors to the fullest extent permitted
by law, and, in the event that any portion of such provisions are deemed
invalid, directors will nonetheless be indemnified to the fullest extent of the
remaining provisions and any applicable provision of Florida law.
The PSHC Bylaws contain an express provision that entitles directors to
partial indemnification against liability and other expenses in the case that
such director is not entitled to full indemnification. In the case that a
director is denied indemnification for failure to satisfy the conditions of the
PSHC Bylaws, such director may apply for indemnification or other expenses to a
court. The PSHC Bylaws direct the court in its determination to award
indemnification only if the court finds that (i) the director is entitled to
indemnification under the provisions of the PSHC Bylaws, or (ii) the director is
fairly and reasonably entitled to indemnification or expenses in view of all
reasonable circumstances, regardless of whether such director met the applicable
standards of conduct set forth in the PSHC Bylaws. The PSHC Bylaws also contain
a provision that explicitly reduces the amount of indemnification to be extended
to a director by any amounts such person may collect under any policy of
insurance purchased on his behalf by PSHC or from any other entity for whom the
director has served at the request of PSHC.
In both the Bylaws of Seacoast and the Bylaws of PSHC, shareholders are
entitled to notification of any indemnification paid to the directors.
The FBCA provides exculpation from certain liabilities for monetary damages
for directors, which provisions are applicable to both Seacoast and PSHC.
SPECIAL MEETINGS OF SHAREHOLDERS
Seacoast. Seacoast's Bylaws provide that such meetings may be called at
any time by either the President or a majority of the Board of Directors of
Seacoast. In addition, the President of Seacoast is required to call a special
meeting at the request of the holders of not less than ten percent of all votes
entitled to be cast by all shares of Seacoast Common Stock outstanding, voting
together as a single class.
PSHC. The PSHC Bylaws provide that special meetings may be called at any
time, but only by the President or the Board of Directors of PSHC. The President
or the Board of Directors is required to call a special meeting when requested
in writing by the holders of not less than ten percent of all the shares
entitled to vote at the meeting.
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ACTIONS BY SHAREHOLDERS WITHOUT A MEETING
Seacoast. The Seacoast Articles and Bylaws are silent on whether action
required or permitted to be taken by Seacoast shareholders must be effected at a
duly called meeting of shareholders or whether such action may be effected by
any written consent by the shareholders. Section 607.0704 of the FBCA provides
that, unless otherwise provided in the articles of incorporation, action
required or permitted by the FBCA to be taken at an annual or special meeting
may be taken without a meeting, without prior notice, and without a vote if the
action is taken by the holders of the minimum number of votes with respect to
each voting group that would be necessary to authorize such action at a meeting.
The action must be evidenced by the written consent of such shareholders. Within
ten days after obtaining such authorization by written consent, notice must be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action.
The provisions of the FBCA do not affect the special voting requirements
contained in the Seacoast Bylaws for the approval of a business combination or
the amendment of such provision. The approval of a business combination or of an
amendment to the provision which sets forth the voting requirements of such
combinations requires the affirmative vote of the holders of two-thirds of all
shares of Seacoast Class A Stock outstanding and entitled to vote, voting as a
separate class, and the affirmative vote of the holders of shares with
two-thirds of all the votes entitled to be cast by all shares of Seacoast Common
Stock outstanding, voting together as a single class.
PSHC. The PSHC Articles and Bylaws are similarly silent as to the means by
which shareholders may, by written consent, effectuate actions required or
permitted to be taken at a meeting. Accordingly, PSHC shareholders may act
without a meeting by satisfying the requirements of Section 607.0704 of the FBCA
in the same manner as Seacoast shareholders. The special voting provisions
contained in the PSHC Articles and Bylaws, requiring the affirmative vote of the
holders of at least seventy-five percent of the outstanding shares of PSHC
capital stock for the approval of business combinations, the removal of
directors, and the amendment of the provisions relating to such actions, are
unaffected by the FBCA. Actions undertaken by written consent of the
shareholders of PSHC under Section 607.0704 of the FBCA must satisfy the voting
requirements of the PSHC Articles and Bylaws.
MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS
Seacoast. The Seacoast Articles require the affirmative vote of the
holders of at least two-thirds of all the shares of Seacoast Class A Stock
outstanding and entitled to vote, voting as a separate class, and the
affirmative vote of the holders of shares with two-thirds of all the votes
entitled to be cast by all shares of Seacoast Common Stock outstanding, voting
together as a single class, to approve (i) a business combination, (ii) any
share exchange in which a person or entity acquires Seacoast stock pursuant to a
vote of shareholders, (iii) any sale, lease, or other disposition of all or
substantially all of Seacoast's assets, or (iv) any other transaction that has
an effect similar to the foregoing transactions.
The provisions of the Seacoast Articles governing the approval of business
combinations, share exchanges, or dispositions of assets are different in their
nature and effect from the corresponding provisions contained in the PSHC
Articles (as described below). The Seacoast Articles focus solely on the nature
of the transaction and require that a more stringent voting provision be applied
to those transactions set forth in the Articles. Conversely, the PSHC Articles
focus on both the nature of the transaction and the identity of the person or
entity involved in the transaction. Specifically, the PSHC Articles are silent
as to business combinations, and sales, leases, or other dispositions of assets
other than in the regular course of business, that are consummated with persons
or entities whose beneficial ownership of PSHC capital stock represents less
than five percent of the outstanding capital stock of PSHC. For such
transactions, the provisions governing the approval of the shareholders and the
Board of Directors are found in the FBCA. However, if the other person or entity
involved with PSHC in such transactions beneficially owns five percent or more
of the outstanding capital stock of PSHC, the provisions of the PSHC Articles
are triggered, requiring that the approval of such transactions by PSHC
shareholders be subject to special voting provisions.
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PSHC. In the event that PSHC undertakes (i) any business combination, (ii)
any sale, lease, or other disposition of all or substantially all of its assets,
(iii) any issuance or transfer of PSHC securities in exchange for assets or
securities with an aggregate fair market value of five percent or more of the
total assets of PSHC, or (iv) any issuance or transfer by PSHC of any of its
securities for cash, and such transactions involve another person or entity
beneficially owning five percent or more of the outstanding shares of PSHC's
capital stock entitled to vote in the election of directors ("5% Owner"), then
the PSHC Articles provide that the affirmative vote of the holders of at least
seventy-five percent (75%) of the outstanding shares of the capital stock of
PSHC entitled to vote in the election of directors is required to authorize such
transactions. A person or entity is deemed to beneficially own shares of stock
(i) which it has the right to acquire pursuant to warrants, options, or
otherwise, (ii) which are beneficially owned by its Associate or Affiliate, as
those terms are defined in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, or (iii) which are beneficially owned by a third party with
which it has an agreement to hold or acquire PSHC capital stock.
This provision of the PSHC Articles does not apply to such transactions if
the PSHC Board of Directors has approved a memorandum of understanding with
respect to the transaction prior to the time that such other person or entity
becomes a 5% Owner, or such transactions if at any time prior to its
consummation the transaction has been approved by a resolution adopted by a
majority of directors unaffiliated with the 5% Owner. The Board of Directors of
PSHC has the power and duty to determine whether (i) a person or entity is a 5%
Owner, (ii) a sale or lease of assets constitutes substantially all of PSHC's
assets, and (iii) the memorandum of understanding is consistent with the
transaction to which it relates.
Except as provided above, any other business combination requires that
PSHC's Board of Directors must recommend the transaction to the shareholders and
that the combination must be approved by a majority vote.
SHAREHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
Seacoast. The Seacoast Articles and Bylaws are silent with respect to the
shareholders' rights to examine books and records. In the absence of such a
provision, the FBCA provides that a shareholder may inspect books and records
upon written demand at least five days before the date on which he wishes to
inspect such records. Such inspection may occur during regular business hours at
Seacoast's principal office. Seacoast may deny any demand for inspection if the
demand was made for an improper purpose, which means a purpose not reasonably
related to such person's interest as a shareholder.
PSHC. The PSHC Bylaws provide that shareholders may inspect at any
reasonable time for any proper purpose the records and books of PSHC if such
shareholder (i) has been a holder of record of shares or voting trust
certificates totaling one-quarter of one percent of the outstanding shares of
PSHC capital stock for a period of at least six months prior to his demand, or
(ii) is the holder of at least five percent of the outstanding shares of PSHC
capital stock at the time of his demand.
DIVIDENDS
Seacoast. The Seacoast Articles provide that no cash dividend may be
declared or paid on shares of Seacoast Class B Stock unless, simultaneously
therewith or prior thereto, there is or has been declared or paid a cash
dividend on the shares of Seacoast Class A Stock of at least 110% of the cash
dividend on the shares of Class B Stock. A dividend payable in shares of
Seacoast Class A Stock shall also be paid to holders of Class B Stock at the
same time and on the same basis that such dividend is payable to the holders of
Seacoast Class A Stock.
Because Seacoast Class A Stock is entitled to a dividend preference, the
rights of shareholders of PSHC will not be compromised with respect to the
Seacoast shareholders of Class B Stock as a result of the Merger.
PSHC. The Board of Directors of PSHC may, from time to time, declare and
pay dividends, but only to the extent that such dividends are declared and paid
from PSHC's unreserved and unrestricted earned surplus. The amount per share
paid as a dividend out of capital surplus shall be disclosed to the
shareholders. Dividends may be paid on any authorized but unissued shares of
PSHC stock, provided that certain adjustments provided in the PSHC Bylaws are
made with regard to PSHC's stated capital at the time of issuance of such
shares.
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COMPARATIVE MARKET PRICES AND DIVIDENDS
Seacoast
Seacoast Class A Stock is traded in the over-the-counter market and is
quoted on the Nasdaq National Market under the symbol "SBCFA". The following
table sets forth the high and low sale prices per share of Seacoast Class A
Stock on the Nasdaq National Market and the dividends paid per share of Seacoast
Class A Stock for the indicated periods.
SALE PRICE PER
SHARE OF
SEACOAST CLASS A
STOCK ANNUAL DIVIDENDS DECLARED
---------------- PER SHARE OF
HIGH LOW SEACOAST CLASS A STOCK
------ ------- -------------------------
1995
First Quarter............................................ 19.25 16.25 $0.13
Second Quarter........................................... 19.50 17.75 0.13
Third Quarter............................................ 22.50 18.00 0.13
Fourth Quarter........................................... 25.25 21.625 0.15
1996
First Quarter............................................ 22.75 20.25 0.15
Second Quarter........................................... 22.75 21.00 0.15
Third Quarter............................................ 24.00 21.75 0.15
Fourth Quarter........................................... 26.50 23.25 0.20
1997
First Quarter............................................ 29.25 25.625 0.20
Second Quarter (through April 11, 1997).................. 27.75 26.75 --
On February 18, 1997, the last day prior to public announcement that
Seacoast and PSHC had executed the Merger Agreement, the last reported sale
price per share of Seacoast Class A Stock on the Nasdaq National Market was
$28.75, and the resulting equivalent pro forma price per share of PSHC Common
Stock was $28.74. On April 11, 1997, the last reported sale price per share of
Seacoast Class A Stock on the Nasdaq National Market was $27.25, and the
resulting equivalent pro forma price per share of PSHC Common Stock was $27.24.
The equivalent per share price of a share of PSHC Common Stock at each specified
date represents the closing sale price of a share of Seacoast Class A Stock on
such date multiplied by the Estimated Stock Exchange Ratio.
44
56
There is no established public trading market for the PSHC Common Stock,
and no reliable information is available as to trades of such shares or the
prices at which such shares have traded. Based upon the limited information
available to it, PSHC believes that the following table sets forth the high and
low prices paid for PSHC Common Stock for during past two years. PSHC has not
declared or paid a cash dividend on PSHC Common Stock since March 1, 1994. The
price ranges have been adjusted to reflect a 10% stock dividend paid on PSHC
Common Stock paid by PSHC on February 16, 1995 and February 16, 1996.
SALE PRICE
PER SHARE OF
PSHC COMMON STOCK
-----------------
HIGH LOW
------ ------
1995
- ------------------------------------------------------------
First Quarter............................................... $14.00 $14.00
Second Quarter.............................................. 15.00 14.25
Third Quarter............................................... 16.00 16.00
Fourth Quarter.............................................. 17.00 16.00
1996
- ------------------------------------------------------------
First Quarter............................................... $21.00 $17.00
Second Quarter.............................................. 22.00 21.00
Third Quarter............................................... 22.00 22.00
Fourth Quarter.............................................. 23.00 22.00
1997
- ------------------------------------------------------------
First Quarter............................................... $23.00 $23.00
Second Quarter (through April 11)........................... 23.00 23.00
To PSHC's knowledge, the most recent trade of PSHC Common Stock prior to
February 18, 1997, the last day prior to public announcement that Seacoast and
PSHC had executed the Merger Agreement, was 302 shares at $23.00 per share. To
the knowledge of PSHC, there have been no trades since the announcement of the
Merger.
The foregoing information regarding PSHC Common Stock is provided for
informational purposes only and, due to the absence of an active market for
PSHC's shares, should not be viewed as indicative of the actual or market value
of PSHC Common Stock.
The holders of Seacoast Common Stock are entitled to receive dividends when
and if declared by the Board of Directors out of funds legally available
therefor. Seacoast has paid regular quarterly cash dividends on its Class A
Stock and its Class B Stock since 1983. Although Seacoast currently intends to
continue to pay quarterly cash dividends on the Seacoast Class A Stock, the
declaration and payment of dividends in the future will depend upon business
conditions, operating results, capital and reserve requirements, and the Board
of Directors' consideration of other relevant factors. PSHC has agreed,
consistent with its recent practices, not to declare or pay any dividends during
the pendency of the Merger. See "DESCRIPTION OF THE MERGER -- Conduct of the
Business Pending the Merger."
Seacoast and PSHC are each legal entities separate and distinct from their
respective subsidiaries and their revenues depend in significant part on the
payment of dividends from their respective subsidiary depository institutions.
National banks, such as FNB and PSNB are subject to certain legal restrictions
on the amount of dividends they are permitted to pay.
45
57
BUSINESS OF PSHC
GENERAL
PSHC is a bank holding company headquartered in Port St. Lucie, Florida.
PSNB, PSHC's wholly-owned subsidiary, operates three banking offices of in
Florida. As of December 31, 1996, PSHC had total consolidated assets of
approximately $130 million, total consolidated deposits of approximately $119
million, and total consolidated shareholders' equity of approximately $10
million. Through its banking subsidiary, PSNB, and its wholly-owned subsidiary,
Spirit Mortgage Corp., PSHC offers a broad range of banking and banking-related
services.
PSHC was organized under the laws of the State of Florida and commenced
operations in 1989 with the acquisition of PSNB. Additional information with
respect to PSHC and its subsidiaries is included in documents incorporated by
reference in this Joint Proxy Statement. PSHC's principal executive offices are
located at 1100 S.W. St. Lucie West Boulevard, Port St. Lucie, Florida 34986,
and its telephone number at such address is (561) 340-2242. See "AVAILABLE
INFORMATION" and "DOCUMENTS INCORPORATED BY REFERENCE."
BUSINESS OF SEACOAST
GENERAL
Seacoast is a bank holding company headquartered in Stuart, Florida with 19
banking offices in Florida. As of December 31, 1996, Seacoast had total
consolidated assets of approximately $808 million, total consolidated deposits
of approximately $693 million, and total consolidated shareholders' equity of
approximately $67 million. Through its direct and indirect subsidiaries,
Seacoast offers a broad range of banking and banking-related services, including
securities brokerage.
Seacoast was organized under the laws of the State of Florida and commenced
operations in 1983. Seacoast's principal executive offices are located at 815
Colorado Avenue, Stuart, Florida 34994, and its telephone number at such address
is (561) 287-4000.
Seacoast continually evaluates business combination opportunities and
frequently conducts due diligence activities in connection with possible
business combinations. As a result, business combination discussions and, in
some cases, negotiations frequently take place, and future business combinations
involving cash, debt, or equity securities can be expected. Any future business
combination or series of business combinations that Seacoast might undertake may
be material, in terms of assets acquired or liabilities assumed, to Seacoast's
financial condition. Recent business combinations in the banking industry have
typically involved the payment of a premium over book and market values. This
practice could result in dilution of book value and net income per share for the
acquirer.
Additional information about Seacoast and its subsidiaries is included in
documents incorporated by reference in this Joint Proxy Statement. See
"AVAILABLE INFORMATION" and "DOCUMENTS INCORPORATED BY REFERENCE."
46
58
PRO FORMA FINANCIAL INFORMATION
PRO FORMA COMBINED BALANCE SHEET FOR SEACOAST AND PSHC
DECEMBER 31, 1996
(UNAUDITED)
The following unaudited pro forma combined balance sheet presents (i) the
historical unaudited consolidated balance sheets of Seacoast and PSHC at
December 31, 1996, and (ii) the pro forma combined balance sheet of Seacoast at
December 31, 1996, giving effect to the Merger, assuming such acquisition is
accounted for as a pooling-of-interests. This pro forma balance sheet includes
pro forma adjustments related to the issuance of 900,000 shares of Seacoast
Class A Stock. The unaudited pro forma combined balance sheet should be read in
conjunction with the historical consolidated financial statements of Seacoast
and PSHC, including the respective notes thereto, which are incorporated by
reference in this Joint Proxy Statement, and the unaudited pro forma financial
information, including the notes thereto, appearing elsewhere in this Joint
Proxy Statement. See "DOCUMENTS INCORPORATED BY REFERENCE,"
"SUMMARY -- Comparative Per Share Data," and "-- Summary Pro Forma Financial
Data." The pro forma combined balance sheet is not necessarily indicative of the
combined financial position that actually would have occurred if the Merger had
been consummated at the date indicated or which may be obtained in the future.
DECEMBER 31, 1996 ADJUSTMENTS
------------------- -------------------- PRO FORMA
SEACOAST PSHC DEBIT CREDIT COMBINED
-------- -------- -------- -------- ---------
(DOLLARS IN THOUSANDS)
ASSETS
Cash & Due from Banks............................. $ 24,340 $ 5,018 $ 29,358
Federal Funds Sold................................ 76,250 4,400 80,650
Securities:
At Market....................................... 159,133 10,757 169,890
At Amortized Cost............................... 49,667 3,612 53,279
-------- -------- --------
Total Securities......................... 208,800 14,369 223,169
Loans, Net of Unearned Income..................... 471,597 101,171 572,768
Less Allowance for Loan Losses.................. 4,286 1,371 5,657
-------- -------- --------
Net Loans................................ 467,311 99,800 567,111
Bank Premises and Equipment....................... 16,110 1,103 17,213
Other Real Estate Owned........................... 1,011 53 1,064
Goodwill.......................................... 3,882 0 3,882
Core Deposit Intangibles.......................... 1,975 0 1,975
Other Assets(1)................................... 8,729 5,350 14,079
-------- -------- -------- -------- --------
Total Assets............................. $808,408 $130,093 -- -- $938,501
======== ======== ======== ======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Demand Deposits................................... $118,441 $ 19,582 $138,023
Savings Deposits (including NOW, Savings & Money
Market Accounts)................................ 277,184 44,043 321,227
Other Time Deposits............................... 250,239 45,861 296,100
Time Certificates of $100,000 or More............. 46,893 9,250 56,143
-------- -------- --------
Total Deposits........................... 692,757 118,736 811,493
Federal Funds Purchased and Securities Sold Under
Agreement to Repurchase......................... 45,088 0 45,088
Other Liabilities................................. 3,794 1,131 4,925
-------- -------- --------
Total Liabilities........................ 741,639 119,867 861,506
Preferred Stock................................... 0 0 0
Common Stock...................................... 429 7 7(3) 90(2) 519
Additional Paid-In Capital........................ 18,612 8,401 90(2) 7(3) 26,930
Retained Earnings................................. 50,121 1,970 52,091
Treasury Stock.................................... (911) (911)
-------- -------- -------- -------- --------
68,251 10,378 97 97 78,629
Securities Valuation Equity (Allowance)........... (1,482) (152) (1,634)
-------- -------- -------- -------- --------
Total Shareholders' Equity............... 66,769 10,226 76,995
-------- -------- -------- -------- --------
Total Liabilities and Shareholders'
Equity................................. $808,408 $130,093 -- -- $938,501
======== ======== ======== ======== ========
- ---------------
(1) Includes loans held for sale.
(2) Represents an entry to record the par value of the shares of Seacoast Class
A Stock to be issued to be the stockholders and warrant holders of PSHC
which will be accounted for under the pooling-of-interest method of
accounting.
(3) Represents an entry to reclassify the historical common stock balances of
PSHC to additional paid in capital.
47
59
PRO FORMA COMBINED STATEMENTS OF INCOME FOR
SEACOAST AND PSHC
(UNAUDITED)
The following unaudited pro forma combined statements of income have been
prepared for each of the three years in the period ended December 31, 1996, and
give effect to the Merger, assuming such acquisition is accounted for as a
pooling-of-interests. The following pro forma combined statements of income
present the pro forma results of continuing operations of Seacoast as if the
acquisition of PSHC had been consummated at the beginning of the period
presented. The unaudited pro forma combined statements of income should be read
in conjunction with the historical consolidated financial statements of Seacoast
and PSHC, including the respective notes thereto, which are incorporated by
reference in this Joint Proxy Statement, and the unaudited consolidated
historical and the unaudited pro forma financial information, including the
notes thereto, appearing elsewhere in this Joint Proxy Statement. See "DOCUMENTS
INCORPORATED BY REFERENCE," "SUMMARY -- Comparative Per Share Data," and
"-- Selected Condensed Consolidated Pro Forma Financial Data."
The unaudited pro forma income from continuing operations per common and
common equivalent share is based on the combined weighted average number of
common shares and common share equivalents outstanding which include, where
appropriate, the assumed exercise or conversion of warrants and options. In
computing the unaudited pro forma income from continuing operations per common
share and common equivalent share, Seacoast utilizes the Treasury Stock method.
The pro forma combined statements of income are not necessarily indicative
of the results that actually would have occurred if the Merger been consummated
at the dates indicated or which may be obtained in the future.
DECEMBER 31, 1996 ADJUSTMENTS
------------------- ------------------ PRO FORMA
SEACOAST PSHC DEBIT CREDIT COMBINED
--------- ------ ------- ------- ---------
Interest on Investments................ $ 12,875 $1,018 $ 13,893
Interest and Fees on Loans............. 37,655 8,245 45,900
Interest on Federal Funds Sold......... 1,292 190 1,482
--------- ------ ---------
Total Interest Income........ 51,822 9,453 61,275
Interest on Deposits................... 19,976 4,318 24,294
Interest on Borrowed Funds............. 744 14 758
--------- ------ ---------
Total Interest Expense....... 20,720 4,332 25,052
Net Interest Income.................. 31,102 5,121 36,223
Provision for Loan Losses.............. 450 640 1,090
--------- ------ ---------
Net Interest Income After Provision
for Loan Losses................... 30,652 4,481 35,133
Noninterest Income..................... 8,714 1,053 9,767
Securities Gains(1).................... 72 568 640
--------- ------ ---------
Total Noninterest Income..... 8,786 1,621 10,407
Noninterest Expenses................... 27,517 4,251 31,768
Income Before Income Taxes............. 11,921 1,851 13,772
Provision for Income Taxes............. 4,312 621 4,933
--------- ------ ------- ------- ---------
Net Income............................. $ 7,609 $1,230 -- -- $ 8,839
========= ====== ======= ======= =========
Per Share Common Stock Net Income...... $ 1.77 $ 1.70
Average Shares Outstanding............. 4,304,962 900,000(2) 5,204,962
48
60
DECEMBER 31, 1995 ADJUSTMENTS
------------------- ------------------ PRO FORMA
SEACOAST PSHC DEBIT CREDIT COMBINED
--------- ------ ------- ------- ---------
Interest on Investments................ $ 15,117 $1,752 $ 16,869
Interest and Fees on Loans............. 30,707 6,188 36,895
Interest on Federal Funds Sold......... 2,327 169 2,496
--------- ------ ---------
Total Interest Income........ 48,151 8,109 56,260
Interest on Deposits................... 20,702 4,114 24,816
Interest on Borrowed Funds............. 359 50 409
--------- ------ ---------
Total Interest Expense....... 21,061 4,164 25,225
Net Interest Income.................. 27,090 3,945 31,035
Provision for Loan Losses.............. 250 206 456
--------- ------ ---------
Net Interest Income After Provision
for Loan Losses................... 26,840 $3,739 30,579
Noninterest Income..................... 7,517 907 8,424
Securities Gains(1).................... 480 264 744
--------- ------ ---------
Total Noninterest Income..... 7,997 1,171 9,168
Noninterest Expenses................... 24,246 3,520 27,766
--------- ------ ---------
Income Before Income Taxes ............ 10,591 1,390 11,981
Provision for Income Taxes ............ 3,765 443 4,208
--------- ------ ------- ------- ---------
Net Income............................. $ 6,826 $ 947 -- -- $ 7,773
========= ====== ======= ======= =========
Per Share Common Stock Net Income...... $ 1.58 $ 1.49
Average Shares Outstanding............. 4,309,590 900,000(2) 5,209,590
DECEMBER 31, 1994 ADJUSTMENTS
------------------- ------------------ PRO FORMA
SEACOAST PSHC DEBIT CREDIT COMBINED
--------- ------ ------- ------- ---------
Interest on Investments................ $ 16,630 $1,815 $ 18,445
Interest and Fees on Loans............. 21,782 3,868 25,650
Interest on Federal Funds Sold......... 629 37 666
--------- ------ ---------
Total Interest Income........ 39,041 5,720 44,761
Interest on Deposits................... 13,572 2,049 15,621
Interest on Borrowed Funds............. 269 113 382
--------- ------ ---------
Total Interest Expense....... 13,841 2,162 16,003
Net Interest Income.................. 25,200 3,558 28,758
Provision for Loan Losses.............. 145 163 308
--------- ------ ---------
Net Interest Income After Provision
for Loan Losses................... 25,055 3,395 28,450
Noninterest Income..................... 6,475 695 7,170
Securities Gains(1).................... 752 61 813
--------- ------ ---------
Total Noninterest Income..... 7,227 756 7,983
Noninterest Expenses................... 23,005 2,679 25,684
--------- ------ ---------
Income Before Income Taxes............. 9,277 1,472 10,749
Provision for Income Taxes............. 3,091 471 3,562
--------- ------ ------- ------- ---------
Net Income............................. $ 6,186 $1,001 -- -- $ 7,187
========= ====== ======= ======= =========
Per Share Common Stock Net Income...... $ 1.44 $ 1.38
Average Shares Outstanding............. 4,305,592 900,000(2) 5,205,592
- ---------------
Notes to Unaudited Condensed Consolidated Pro Forma Financial Statements
(1) Includes gains on loans held for sale.
(2) Includes the weighted average effect of shares and common share equivalents
to be issued in the transaction.
49
61
ELECTION OF SEACOAST DIRECTORS
GENERAL
The Seacoast Annual Meeting is also being held to reelect eight directors
of Seacoast to serve a one-year term of office expiring at the 1998 Annual
Meeting of Shareholders and until their successors have been elected and
qualified. All of the nominees are presently directors of Seacoast and have
served as directors of Seacoast since its inception in 1983, except Dennis S.
Hudson, III, who was first elected a director in 1984. All of the nominees also
serve as directors of Seacoast's banking subsidiary, FNB. The members of the
Boards of Directors of FNB and Seacoast are the same except for Stephen E.
Bohner, Marian B. Monroe and A. Douglas Gilbert, who are members of FNB's Board
only. The Seacoast Board of Directors has been fixed at 10 persons. In addition
to the eight directors to be elected at the Annual Meeting, the remaining two
vacancies are expected to be filled by Messrs. Furst and Fogal following the
Merger's Effective Time. See "DESCRIPTION OF THE MERGER -- Management and
Operations after the Merger" and "-- Interest of Certain Persons in the Merger"
and "EFFECT OF THE MERGER ON RIGHTS OF SHAREHOLDERS -- Classified Board of
Directors and Absence of Cumulative Voting."
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 election of the eight nominees listed below. In the event that any
nominee is unable to serve (which is not anticipated), the persons designated as
Proxies will cast votes for the remaining nominees and for such replacements, if
any, as may be nominated by Seacoast's Board of Directors acting as the
Nominating Committee. Proxies cannot be voted for a greater number of persons
than the number of nominees specified herein (eight persons).
The affirmative vote of the holders of shares of Seacoast Common Stock
representing a plurality of the votes cast at the Annual Meeting at which a
quorum is present, is required for the reelection of the directors listed below.
THE NOMINEES HAVE BEEN NOMINATED BY SEACOAST'S BOARD OF DIRECTORS AND THE
BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE REELECTION OF ALL EIGHT NOMINEES
LISTED BELOW.
The following table sets forth the name and age of each nominee and each
senior executive officer of Seacoast who is not a director or nominee, the year
in which he was first elected a director or executive officer, as the case may
be, a description of his position and offices with Seacoast or FNB, if any, a
brief description of his principal occupation and business experience during at
least the last five years, directorships presently held by him in companies
other than Seacoast with registered securities, and certain other information
including the number of shares of Seacoast Class A Stock and Class B Stock
beneficially owned by him on April 14, 1997. In addition, if the acquisition of
PSHC described herein is consummated then it is anticipated that Jeffrey S.
Furst and Christopher E. Fogal, current directors of PSHC, will be added to the
Board of Directors of Seacoast and FNB and that J. Hal Roberts will become an
executive officer of Seacoast and FNB. See "DESCRIPTION OF THE
MERGER -- Management and Operations after the Merger" and "-- Information About
the Board of Directors and Its Committees."
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AND
NAME, AGE AND YEAR PERCENTAGE OF COMMON
FIRST ELECTED OR STOCK OUTSTANDING(1)
APPOINTED A DIRECTOR ----------------------
OR EXECUTIVE OFFICER INFORMATION ABOUT NOMINEE CLASS A CLASS B
- -------------------- ------------------------- ------- -------
NOMINEES:
Jeffrey C. Bruner (46)........ Mr. Bruner has been a self-employed real 7,140(2)(4) 90(3)(4)
1983 estate investor in Stuart, Florida
since 1972.
50
62
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AND
NAME, AGE AND YEAR PERCENTAGE OF COMMON
FIRST ELECTED OR STOCK OUTSTANDING(1)
APPOINTED A DIRECTOR ----------------------
OR EXECUTIVE OFFICER INFORMATION ABOUT NOMINEE CLASS A CLASS B
- -------------------- ------------------------- ------- -------
John H. Crane (67)............ Mr. Crane has been President of Krauss & 12,870(4)(5) --
1983 Crane, Inc., an electrical contracting
firm located in Stuart, Florida, since
1957, and Vice President of C&W Fish
Company, Inc., a fish processing plant
located in the Stuart, Florida area,
since 1982.
Evans Crary, Jr. (67)......... Mr. Crary has served as a member of 4,597(4)(6) 1,665(4)
1983 Crary, Buchanan, Bowdish, Bovie, Lord,
Roby & Evans, Chartered, a law firm
located in Stuart, Florida, since
1993, and prior thereto he served as
President and a shareholder of the law
firm since 1974. Mr. Crary has
practiced law in Stuart, Florida since
1952.
Dale M. Hudson (62)........... Mr. Hudson was named Chief Executive 440,804(8) 154,151(9)
1983(7) Officer of Seacoast in 1992 and has 11.16% 40.08%
served as President of Seacoast since
1990. He was named Chairman of the
Board of FNB in September 1992 after
serving as Vice Chairman and President
of FNB since 1978.
Dennis S. Hudson, Jr. (69).... Mr. Hudson was named Chairman of the 310,039(10) 125,753(11)
1983(7) Board of Seacoast in 1990. He served 7.85% 32.69%
as Chief Executive Officer of Seacoast
from 1983 until 1992 and Chairman of
FNB from 1969 until 1992.
Dennis S. Hudson, III (41).... Mr. Hudson has served as Executive Vice 35,800(4)(12) 8,052
1984(7) President and Chief Operating Officer 2.09%
of Seacoast since 1990 and President
and Chief Executive Officer of FNB
since 1992. Prior thereto, he served
as Executive Vice President and Chief
Operating Officer of FNB from 1990 to
1992, and Senior Vice President of FNB
from 1983 to 1990.
John R. Santarsiero, Jr. (52). Mr. Santarsiero is a private investor 3,198(4) 300(4)
1983 and former owner of an automobile
dealership located in Stuart, Florida.
Thomas H. Thurlow, Jr. (60)... Mr. Thurlow has been an officer and a 4,725(4)(13) --
1983(7) director of Thurlow & Smith, P. A., a
law firm located in Stuart, Florida,
since 1981 and has practiced law in
Stuart, Florida since 1961.
51
63
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AND
NAME, AGE AND YEAR PERCENTAGE OF COMMON
FIRST ELECTED OR STOCK OUTSTANDING(1)
APPOINTED A DIRECTOR ----------------------
OR EXECUTIVE OFFICER INFORMATION ABOUT NOMINEE CLASS A CLASS B
- -------------------- ------------------------- ------- -------
EXECUTIVE OFFICERS WHO ARE NOT ALSO NOMINEES OR DIRECTORS:
A. Douglas Gilbert (56)....... Mr. Gilbert has served as Executive Vice 24,886(4)(14) --
1990 President and Chief Credit Officer of
Seacoast since July 1990, and also has
served as Chief Banking Officer from
September 1992 to October 1995. Mr.
Gilbert was named Executive Vice
President and Chief Operating and
Credit Officer of FNB in October 1994.
Prior thereto, he served as Executive
Vice President and Chief Banking and
Credit Officer of FNB from 1992 to
1994, and Executive Vice President and
Chief Credit Officer of FNB from 1990
to 1992.
C. William Curtis, Jr. (58)... Mr. Curtis has served as Executive Vice 2,500(4) --
1995 President and Chief Banking Officer of
Seacoast and FNB since October 1995.
Prior thereto, Mr. Curtis was Area
President of First Union Bank in
Sarasota and Manatee Counties, a $970
million banking unit with 21 offices.
He served as Senior Marketing Officer
for Florida National Banks of Florida,
Inc. for 10 years prior to coming to
the Treasure Coast as President of
Florida National Bank in Indian River
County from 1985 to 1989.
William R. Hahl (48).......... Mr. Hahl has been Senior Vice 19,000(4)(15) --
1990 President/Finance Group and Chief
Financial Officer of Seacoast and FNB
since July 1990.
Nominees and executive
officers as a group (11
persons)(16)................ 865,559 290,011
21.9% 75.40%
- ---------------
(1) Information relating to beneficial ownership of Common Stock by directors
is based upon information furnished by each person using "beneficial
ownership" concepts set forth in rules of the SEC under the Exchange Act.
Under such rules, a person is deemed to be a "beneficial owner" of a
security if that person has or shares "voting power," which includes the
power to vote or direct the voting of such security, or "investment power,"
which includes the power to dispose of or to direct the disposition of such
security. The person is also deemed to be a beneficial owner of any
security of which that person has a right to acquire beneficial ownership
within 60 days. Under such rules, more than one person may be deemed to be
a beneficial owner of the same securities, and a person may be deemed to be
a beneficial owner of securities as to which he or she may disclaim any
beneficial ownership. Accordingly, nominees are named as beneficial owners
of shares as to which they may disclaim any beneficial interest. Except as
indicated in other notes to this table describing special relationships
with other persons and
52
64
specifying shared voting or investment power, directors possess sole voting
and investment power with respect to all shares of Common Stock set forth
opposite their names.
(2) Includes 180 shares held jointly with Mr. Bruner's wife, 2,150 shares held
by Mr. Bruner as custodian for his son, and 4,000 shares held by Mr. Bruner
as custodian for his two nephews as to which shares Mr. Bruner may be
deemed to share voting and investment power.
(3) Includes 90 shares held jointly with Mr. Bruner's wife as to which shares
Mr. Bruner may be deemed to share voting and investment power.
(4) Less than 1%.
(5) Includes 3,510 shares held by Mr. Crane's wife, as to which shares Mr.
Crane may be deemed to share voting and investment power.
(6) Includes 1,268 shares held by the trustee for the IRA of Mr. Crary.
(7) Dennis S. Hudson, Jr. and Dale M. Hudson are brothers. Dale M. Hudson is
married to the sister of Thomas H. Thurlow, Jr. Dennis S. Hudson, III is
the son of Dennis S. Hudson, Jr. and the nephew of Dale M. Hudson.
(8) Includes 24,025 shares held by Mr. Hudson's wife, 41,297 shares held
jointly with Mr. Hudson's wife, and 72,387 shares held by Mr. Hudson's
three children, as to which shares Mr. Hudson may be deemed to share voting
and investment power.
(9) Includes 3,960 shares held by Mr. Hudson's wife, 20,649 shares held jointly
with Mr. Hudson's wife, and 9,543 shares held by Mr. Hudson's three
children, as to which shares Mr. Hudson may be deemed to share voting and
investment power.
(10) Includes 47,417 shares held by Mr. Hudson's wife, 18,780 shares held by Mr.
Hudson's three children, as to which shares Mr. Hudson may be deemed to
share voting and investment power and as to which Mr. Hudson disclaims
beneficial ownership.
(11) Includes 23,709 shares held by Mr. Hudson's wife, 6,270 shares held by Mr.
Hudson's three children, as to which shares Mr. Hudson may be deemed to
share voting and investment power and as to which Mr. Hudson disclaims
beneficial ownership.
(12) Includes 44 shares held by Mr. Hudson's two sons, as to which shares Mr.
Hudson may be deemed to share voting and investment power, and 33,000
shares that Mr. Hudson has the right to acquire by exercising options that
are exercisable within 60 days after the Seacoast Record Date.
(13) Includes 1,575 shares owned by Mr. Thurlow's wife and 1,575 shares held by
Mr. Thurlow's three children, as to which shares Mr. Thurlow may be deemed
to share voting and investment power.
(14) Includes 200 shares held in Mr. Gilbert's IRA and 23,000 shares that Mr.
Gilbert has the right to acquire by exercising options that are exercisable
within 60 days after the Seacoast Record Date.
(15) Includes 19,000 shares that Mr. Hahl has the right to acquire by exercising
options that are exercisable within 60 days after the Seacoast Record Date.
(16) The percentage of Seacoast Class A Stock that will be owned by Seacoast
directors and executive officers at the Effective Time does not include
shares of Seacoast Class A Stock that Messrs. Jeffrey S. Furst, Christopher
E. Fogal and J. Hal Roberts, Jr. will receive in the Merger. Messrs. Furst
and Fogal are expected to be elected to the Seacoast and FNB Boards of
Directors following the Effective Time and Mr. Roberts will become an
executive officer of Seacoast following the Effective Time. Mr. Furst
presently beneficially owns 29,100 shares of PSHC Common Stock and 21,175
PSHC Warrants. Mr. Fogal presently beneficially owns 12,100 shares of PSHC
Common Stock and 12,100 PSHC Warrants. Mr. Roberts presently beneficially
owns 20,896 shares of PSHC Common Stock, 11,495 PSHC Warrants and 24,200
vested PSHC Stock Options. Based on the Estimated Stock Exchange Ratio of
.9996 and the Estimated Warrant Exchange Ratio of .6965, Mr. Furst will
have the opportunity to convert the PSHC Common Stock and PSHC Warrants
which he beneficially owns into an aggregate of approximately 43,836 shares
of Seacoast Class A Stock (representing approximately 0.93% of the shares
of Seacoast Class A stock expected to be outstanding after the Merger) at
the Effective Time. Similarly, Mr. Fogal will have the opportunity to
convert the PSHC Common Stock and PSHC Warrants which he beneficially owns
into an aggregate of approximately 20,522 shares of Seacoast Class A Stock
(representing approximately 0.4% of the shares of Seacoast Class A Stock
expected to be outstanding after the Merger). Mr. Roberts will have the
opportunity to convert the PSHC Common Stock, PSHC Warrants, and PSHC Stock
Options which he beneficially owns into an aggregate amount
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of approximately 53,083 shares of Seacoast Class A Stock (representing
approximately 1.0% of the shares of Seacoast Class A Stock expected to be
outstanding after the Merger).
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of Seacoast held eight meetings during 1996. All of
the directors attended at least 75% of the total number of meetings of the Board
of Directors and meetings of the Board committees on which they served for
Seacoast and FNB. Seacoast's Board of Directors has two standing committees: the
Salary and Benefits Committee and the Audit Committee, both of which serve the
same functions for FNB.
In addition, FNB's Board of Directors has the following standing committees
separate from Seacoast: Executive Committee, Investment Committee, Trust
Committee and the Directors Loan Committee. Such committees perform those duties
customarily performed by similar committees at other financial institutions.
Seacoast's Salary and Benefits Committee is comprised of Messrs. Crary
(Chairman), Bruner, Dennis S. Hudson, Jr. and Santarsiero and Ms. Marian Monroe.
This Committee has the authority to determine the compensation of Seacoast's
executive officers and employees, and administers various of Seacoast's benefit
and incentive plans. This Committee has the power to interpret the provisions of
Seacoast's Pension Plan, Profit Sharing Plan, Employee Stock Purchase Plan, the
Seacoast Banking Corporation of Florida 1991 Stock Option and Stock Appreciation
Right Plan (the "1991 Incentive Plan") and the Seacoast Banking Corporation of
Florida 1996 Long-Term Incentive Plan (the "1996 Incentive Plan"). Two meetings
were held by this Committee in 1996. See "-- Salary and Benefits Committee
Report."
The Audit Committee recommends on an annual basis to the Board of Directors
a public accounting firm to be engaged as independent auditors for Seacoast for
the next fiscal year, reviews the plan for the audit engagement, and reviews
financial statements, the internal audit plans and reports financial reporting
procedures and reports of regulatory authorities. This Committee periodically
reports to the Board of Directors. This Committee is comprised of Messrs. Bruner
(Chairman), Crane and Santarsiero and it held five meetings in 1996.
The entire Board of Directors serves as the Nominating Committee for the
purpose of nominating persons to serve on the Board of Directors. While nominees
recommended by shareholders may be considered, this Committee has not actively
solicited recommendations nor established any procedures for this purpose. The
Board held one meeting in its capacity as the Nominating Committee during 1996.
Board members who are not executive officers of Seacoast are paid an annual
retainer of $15,000 for their service as directors of Seacoast and its
subsidiaries. In addition to the annual retainers, outside Board members receive
$500 for each Board meeting attended, $500 for each committee meeting attended
and $600 for each committee meeting chaired.
EXECUTIVE OFFICERS
Executive officers are appointed annually at the organizational meeting of
the respective Boards of Directors of Seacoast and FNB following the annual
meetings of shareholders, to serve until the next annual meeting and until
successors are chosen and qualified. The table set forth under "ELECTION OF
DIRECTORS -- General" lists the nominees for election to the Board of Directors
as well as the named executive officers of Seacoast and FNB who are not nominees
to or members of the Board of Directors, their ages and respective offices held
by them, the period each such position has been held, a brief account of their
business experience for at least the past five years, and the number of shares
of Seacoast Common Stock beneficially owned by each of them on April 14, 1997.
COMPENSATION OF EXECUTIVE OFFICERS
Under rules established by the SEC, Seacoast is required to provide certain
data and information in regard to the compensation and benefits provided to its
chief executive officer and other executive officers, including the four other
highly compensated executive officers (collectively, these officers are referred
to as the "named executive officers"). The disclosure requirements for the named
executive officers include the use
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of tables and a report explaining the rationale and considerations that led to
fundamental executive compensation decisions affecting these individuals.
The following report reflects Seacoast's compensation philosophy as
endorsed by the Board of Directors and the Salary and Benefits Committee and
resulting actions taken by Seacoast for the reporting periods shown in the
various compensation tables supporting the report. The Salary and Benefits
Committee either approves or recommends to the Board of Directors payment
amounts and award levels for executive officers of Seacoast and its
subsidiaries.
SALARY AND BENEFITS COMMITTEE REPORT
General.
During 1996, the Salary and Benefits Committee of the Board of Directors
was composed of five members, four of whom are not officers or employees of
Seacoast or FNB. The Board of Directors designates the members and Chairman of
such Committee.
Compensation Policy.
The policies that govern the Salary and Benefits Committee's executive
compensation decisions are designed to align changes in total compensation with
changes in the value created for Seacoast's shareholders. The Salary and
Benefits Committee believes that compensation of executive officers and others
should be directly linked to Seacoast's operating performance and that
achievement of performance objectives over time is the primary determinant of
share price.
The underlying objectives of the Salary and Benefits Committee's
compensation strategy are to establish incentives for certain executives and
others to achieve and maintain short-term and long-term operating performance
goals for Seacoast, to link executive and shareholder interests through
equity-based plans, and to provide a compensation package that recognizes
individual contributions as well as overall business results. At Seacoast, pay
for performance relating to executive officer compensation comprises three
areas: base salary, cash based short-term annual incentives, and long-term stock
and cash incentives.
Base Salary and Increases.
In establishing executive officer salaries and increases, the Committee
considers individual annual performance and the relationship of total
compensation to the defined salary market. The decision to increase base pay is
recommended by the Chief Executive Officer and approved by the Salary and
Benefits Committee using performance results documented and measured annually
through a formal management-by-objectives ("MBO") program. Information regarding
salaries paid in the market is obtained through formal salary surveys and other
means and is used in the decision process to ensure competitiveness with
Seacoast's peers and competitors. Seacoast's general philosophy is to provide
base pay competitive with the market, and to reward individual performance while
positioning salaries consistent with Seacoast's performance.
Short-Term Incentives.
Seacoast's Key Manager Incentive Plan is a primary strategy to align
short-term cash compensation with individual performance and performance for the
shareholders. Funding for this annual incentive plan is dependent on Seacoast
first attaining defined performance thresholds for return on assets and earnings
per share. Once this threshold is attained, the Salary and Benefits Committee,
using recommendations from FNB's Chief Executive Officer, approves awards to
those officers who have made superior contributions to Seacoast's profitability
as measured and reported through individual performance goals established at the
beginning of the year. As specified in the plan, the payout schedule is designed
to pay a smaller number of officers the highest level of funded cash incentives
to ensure that a meaningful reward is provided to the organization's top
performers. This philosophy better controls overall compensation expenses by
reducing the need for significant annual base salary increases as a reward for
past performance, and places more emphasis on annual profitability and the
potential rewards associated with future performance. Salary market
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information is used to establish competitive rewards that are adequate in size
to motivate strong individual performance during the year. The Key Manager
Incentive Plan paid an aggregate of $512,810 in 1996, which was distributed
among 18 persons.
Long-Term Incentives.
Long-term incentive awards have been made under the 1991 Incentive Plan and
the 1996 Incentive Plan. Stock options granted under the plan are designed to
motivate sustained high levels of individual performance and align the interests
of key employees with those of Seacoast's shareholders by rewarding capital
appreciation and earnings growth. Upon the recommendation of the Chief Executive
Officer, and subject to approval by the Salary and Benefits Committee, stock
options are awarded annually to those key officers whose performance during the
year has made a significant contribution to Seacoast's long-term growth. In
addition, during 1996, restricted stock awards totaling 5,000 shares of Seacoast
Class A Stock were granted outside of the 1991 Incentive Plan and 1996 Incentive
Plan to retain executive officers of FNB.
Deduction Limit.
At this time, because of its compensation levels, Seacoast does not appear
to be at risk of losing deductions under Section 162(m) of the Code, which
generally establishes, with certain exceptions, a $1 million deduction limit on
executive compensation for all publicly held companies. As a result, Seacoast
has not established a formal policy regarding such limit, but will evaluate the
necessity for developing such a policy in the future.
Chief Executive Pay.
The Salary and Benefits Committee formally reviews the compensation paid to
the Chief Executive Officers of Seacoast and FNB during the first quarter of
each year. Final approval of chief executive compensation is made by the Board
of Directors. Changes in base salary and the awarding of cash and stock
incentives are based on overall financial performance and profitability related
to objectives stated in Seacoast's strategic performance plan and the
initiatives taken to direct Seacoast. In addition, utilizing published surveys,
databases, and proxy data, including, for example, public information compiled
from the SNL Executive Compensation Report (the "Survey Data"), the Salary and
Benefits Committee surveyed the total compensation of chief executive officers
of comparable-sized financial institutions located in comparable markets from
across the nation, as well as of locally-based banks and thrifts. While there is
likely to be a substantial overlap between the financial institutions included
in the Survey Data and the banks and thrifts represented in the Nasdaq Bank
Index line on the shareholder return performance graph, below, the groups are
not exactly the same. The Compensation and Benefits Committee believes that the
most direct competitors for executive talent are not necessarily the same as the
companies that would be included in the published industry index established for
comparing shareholder returns.
After reviewing survey data, the salary for Mr. Dennis S. Hudson, III,
Chief Executive Officer of FNB, was increased by $20,000 to $255,000 annually,
the annual salary for Mr. Dale M. Hudson, Chief Executive Officer for Seacoast,
was increased by $7,750 to $162,750, and the salary for Dennis S. Hudson, Jr.,
Chairman of the Board of Seacoast was not increased, which maintained their
respective total compensation at the median of the comparative groups. Based on
specific accomplishments and the overall financial performance of Seacoast
including the achievement of above targeted performance goals in 1996, Mr.
Hudson, III was awarded a cash incentive award of $94,500 under the Key Manager
Incentive Plan.
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Summary.
In summary, the Salary and Benefits Committee believes that Seacoast's
compensation program is reasonable and competitive with compensation paid by
other financial institutions of similar size. The program is designed to reward
managers for strong personal, company and share value performance. The Salary
and Benefits Committee monitors the various guidelines that make up the program
and reserves the right to adjust them as necessary to continue to meet the
objectives of Seacoast and its shareholders.
Evans Crary, Jr., Chairman
Jeffrey C. Bruner
Dennis S. Hudson, Jr.
Marian B. Monroe
John R. Santarsiero, Jr.
The table below sets forth certain elements of compensation for the named
executive officers of Seacoast or FNB for the periods indicated.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------------
SECURITIES ALL
RESTRICTED UNDERLYING OTHER
YEAR SALARY BONUS STOCK AWARDS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION(A) (B) ($)(C) ($)(1)(D) ($)(F) (#)(G) ($)(I)
- ------------------------------ ---- -------- --------- ------------ ------------ ------------
Dennis S. Hudson, Jr.......... 1996 $144,885 -- -- -- $14,936(2)
Chairman of the Board of 1995 145,698 -- -- -- 14,996
Seacoast 1994 144,130 -- -- -- 13,841
Dale M. Hudson................ 1996 $161,027 -- -- -- $16,932(3)
President & Chief 1995 144,676 -- -- -- 15,495
Executive Officer of 1994 141,859 -- -- -- 16,549
Seacoast, Chairman of FNB
Dennis S. Hudson, III......... 1996 $236,388 $94,500 -- 6,000 $27,546(4)
Executive Vice President 1995 223,760 73,000 -- 6,000 20,187
& Chief Operating Officer 1994 189,120 35,000 -- -- 17,692
of Seacoast, President &
Chief Executive Officer of
FNB
A. Douglas Gilbert............ 1996 $215,839 $94,500 -- 6,000 $22,247(6)
Executive Vice President 1995 202,038 70,000 $183,100(5) 6,000 20,412
& Chief Banking & 1994 178,409 35,000(5) -- -- 18,359
Credit Officer of Seacoast,
Executive Vice President &
Chief Operating & Credit
Officer of FNB
C. William Curtis, Jr......... 1996 $169,756 $64,000 $111,250(8) 11,000 $11,572(10)
Executive Vice President 1995 57,624 90,000(7) 108,750(9) -- 206
& Chief Banking Officer 1994 -- -- -- -- --
of FNB
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LONG-TERM COMPENSATION
-----------------------------
SECURITIES ALL
RESTRICTED UNDERLYING OTHER
YEAR SALARY BONUS STOCK AWARDS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION(A) (B) ($)(C) ($)(1)(D) ($)(F) (#)(G) ($)(I)
- ------------------------------ ---- -------- --------- ------------ ------------ ------------
William R. Hahl............... 1996 $149,131 $30,000 -- 4,000 $16,400(11)
Senior Vice President 1995 142,492 30,000 -- 5,000 15,792
& Chief Financial Officer 1994 134,124 15,000 -- -- 16,399
of Seacoast and FNB
- ---------------
(1) Incentive cash compensation paid for results achieved during the applicable
fiscal year in accordance with the Key Manager Incentive Plan as well as
certain other bonuses related to performance or deemed necessary to attract
new management. See "-- Salary and Benefits Committee Report."
(2) This includes $2,406 in insurance premiums paid by Seacoast on group term
life insurance benefits in excess of $50,000 ("excess life insurance
benefits"), $7,323 in employer matching contributions to the Profit Sharing
Plan, $2,017 in profit sharing, $2,690 in employer discretionary retirement
contributions, and $500 paid by the employer into the Code Section 125
Cafeteria Plan (the "Cafeteria Plan").
(3) This includes $2,406 in excess life insurance benefits, $8,601 in employer
matching contributions to the Profit Sharing Plan, $2,325 in profit
sharing, $3,100 in employer discretionary retirement contributions, and
$500 paid by the employer into the Cafeteria Plan.
(4) This includes $2,406 in excess life insurance benefits, $13,860 in employer
matching contributions to the Profit Sharing Plan, $4,620 in profit
sharing, $6,160 in employer discretionary retirement contributions, and
$500 paid by the employer into the Cafeteria Plan.
(5) This amount represents a restricted stock award of 10,000 shares of
Seacoast's Class A Stock, which was awarded to Mr. Gilbert on March 31,
1995, based on the closing sale price of Seacoast's Class A Stock on the
Nasdaq National Market on March 31, 1995. One quarter of the shares covered
by this award became vested on January 31, 1996, and another 2,500 shares
vested on January 1, 1997. The remaining shares will, as long as Mr.
Gilbert remains employed by Seacoast, vest in increments of 2,500 shares on
January 1, 1998 and 1999.
(6) This includes $2,406 in excess life insurance benefits, $11,991 in employer
matching contributions to the Profit Sharing Plan, $3,150 in profit
sharing, $4,200 in employer discretionary retirement contributions, and
$500 paid by the employer into the Cafeteria Plan.
(7) This amount includes a $45,000 cash bonus plus $45,000 in cash paid under
the Key Manager Incentive Plan.
(8) This amount represents a restricted stock award of 5,000 shares of
Seacoast's Class A Stock which was awarded to Mr. Curtis on March 29, 1996,
based on the closing sale price of Seacoast's Class A Stock on the Nasdaq
National Market on March 29, 1996. One quarter of the shares covered by
this award will vest on March 29, 1997, and the remaining shares will, as
long as Mr. Curtis remains employed by Seacoast, vest in increments of
1,250 shares on March 29, 1998, 1999 and 2000.
(9) This amount represents a restricted stock award of 5,000 shares of
Seacoast's Class A Stock which was awarded to Mr. Curtis on October 2,
1995, based on the closing sale price of Seacoast's Class A Stock on the
Nasdaq National Market on October 2, 1995. One quarter of the shares
covered by this award vested on December 31, 1996, and the remaining shares
will, as long as Mr. Curtis remains employed by Seacoast, vest in
increments of 1,250 shares on December 31, 1997, 1998 and 1999.
(10) This includes $2,406 in excess life insurance benefits, $7,266 in employer
matching contributions to the Profit Sharing Plan, $600 in profit sharing,
$800 in employer discretionary retirement contributions, and $500 paid by
the employer into the Cafeteria Plan.
(11) This includes $2,406 in excess life insurance benefits, $8,279 in employer
matching contributions to the Profit Sharing Plan, $2,235 in profit
sharing, $2,980 in employer discretionary retirement contributions, and
$500 paid by the employer into the Cafeteria Plan.
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GRANTS OF OPTIONS/SARS IN 1996
The following table sets forth certain information concerning options
granted during 1996 to the named executive officers. No stock appreciation
rights ("SARs") were granted in 1996.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
---------------------------------------------------------- ---------------------
(A) (B) (C) (D) (E) (F) (G)
- --- ------------ ------------ ------------ ------------- --------- ---------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- ------------ ------------ ------------ ------------- --------- ---------
Dennis S. Hudson, Jr.... -- -- -- N/A N/A N/A
Dale M. Hudson.......... -- -- -- N/A N/A N/A
Dennis S. Hudson, III... 6,000 12.77% $21.75 June 18, 2006 $ 82,080 $207,960
A. Douglas Gilbert...... 6,000 12.77 21.75 June 18, 2006 82,080 207,960
C. William Curtis,
Jr.................... 11,000 23.40 21.75 June 18, 2006 150,480 381,260
William R. Hahl......... 4,000 8.51 21.75 June 18, 2006 54,720 138,640
AGGREGATED OPTION/SAR EXERCISES IN 1996
AND 1996 YEAR-END OPTION/SAR VALUES
The following table shows stock options exercised by the named executive
officers during 1996, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable options as of December 31, 1996. Also reported
are the values for "in-the-money" options, which represent the positive spread
between the exercise price of any such existing options and the year-end price
of Seacoast's Class A Stock. No SARs were outstanding in 1996.
(A) (B) (C) (D) (E)
- --- ----------- -------- ---------------- ----------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END(#) FY-END($)
SHARES ---------------- ----------------
ACQUIRED VALUE EXERCISABLE(E)/ EXERCISABLE(E)/
NAME ON EXERCISE REALIZED UNEXERCISABLE(U) UNEXERCISABLE(U)
---- ----------- -------- ---------------- ----------------
Dennis S. Hudson, Jr....................... -- -- --(E) --(E)
--(U) --(U)
Dale M. Hudson............................. -- -- --(E) --(E)
--(U) --(U)
Dennis S. Hudson, III...................... -- -- 33,000(E) $355,250(E)
12,000(U) 76,000(U)
A. Douglas Gilbert......................... 10,000 $100,000 23,000(E) 205,250(E)
12,000(U) 76,000(U)
C. William Curtis, Jr...................... -- -- --(E) --(E)
11,000(U) 46,750(U)
William R. Hahl............................ 8,000 82,325 19,000(E) 168,667(E)
9,000(U) 59,083(U)
PROFIT SHARING PLAN
Seacoast's Retirement Savings Plan for Employees of the First National Bank
& Trust Company of the Treasure Coast was amended and restated effective January
1, 1993, in connection with the freeze of the Pension Plan. Herein, such amended
and restated plan is referred to as the "Profit Sharing Plan." The Profit
Sharing Plan has various features, including an employer matching contribution
for salary deferrals of up to 4% of the employee's compensation for each
calendar quarter. A retirement contribution is made on an annual
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discretionary basis by Seacoast of 2% of "retirement eligible compensation," as
defined in the Profit Sharing Plan. At the end of each plan year, Seacoast's
Board of Directors decides whether to make a profit sharing contribution for the
plan year and each participant receives a contribution based upon "eligible
compensation," as defined in the Profit Sharing Plan. At least 50% of this
contribution (the "non-elective profit sharing contribution") must be kept in an
investment fund, and the balance may be deferred and left in the Profit Sharing
Plan and directed into available investment funds or taken in cash by the
employee. Seacoast contributes on a dollar-for-dollar matching basis, on the
elective profit sharing contribution that is left in the Profit Sharing Plan. In
addition, the Profit Sharing Plan has a Code Section 401(k) feature that allows
employees to make "salary savings contributions" ranging from 1% to 18% of
compensation (as defined by the Plan), subject to federal income tax
limitations. After-tax contributions may also be made by employees with
"voluntary contributions" of up to 10% of compensation (as defined in the Profit
Sharing Plan for each plan year), subject to certain statutory limitations.
PERFORMANCE GRAPH
The following line-graph compares the cumulative, total return on
Seacoast's Class A Stock from December 31, 1991 to December 31, 1996, with that
of the Nasdaq Composite Index (an average of all stocks traded on the Nasdaq
Stock Market) and the Nasdaq Bank Stock index (an average of all bank and thrift
institutions whose stock is traded on the Nasdaq Stock Market). Cumulative,
total return represents the change in stock price and the amount of dividends
received over the indicated period, assuming the reinvestment of dividends.
Measurement Period NASDAQ Stock NASDAQ Bank
(Fiscal Year Covered) Seacoast Index Stocks
1991 100 100 100
1992 147.90 115.45 152.02
1993 174.98 132.49 196.67
1994 177.45 128.25 198.84
1995 236.14 179.44 287.95
1996 290.33 220.18 363.26
EMPLOYMENT AND SEVERANCE AGREEMENTS
FNB entered into an executive employment agreement with A. Douglas Gilbert
on March 22, 1991. A similar agreement was entered into with Dennis S. Hudson,
III on January 18, 1994 and with C. William Curtis, Jr. on July 31, 1995. Each
such agreement has a three-year term and provides for automatic renewal on an
annual basis at the end of that term; provided, however, that either the
employee or FNB may prevent
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such automatic renewal by giving written notice to that effect not less than 90
days prior to the end of the agreement's then current term. Each such agreement
contains certain non-competition, non-disclosure and non-solicitation covenants.
These employment agreements also provide for a base salary,
hospitalization, insurance, long-term disability and life insurance in
accordance with FNB's insurance plans for senior management, and reasonable club
dues. Each executive subject to these contracts may also receive other
compensation including bonuses, and the executives will be entitled to
participate in all current and future employee benefit plans and arrangements in
which senior management of FNB may participate. The agreements provide for
termination of the employee for cause, including willful and continued failure
to perform the assigned duties, crimes, breach of FNB's Code of Ethics, and also
upon death or permanent disability of the executive. Each agreement contains a
Change in Control provision which provides that in the event of a "change in
control," including the acquisition of FNB or Seacoast in a merger,
consolidation or similar transaction, the acquisition of 51% or more of the
voting power of any one or all classes of Seacoast Common Stock, the sale of all
or substantially all of the assets, and certain other changes in share
ownership, the executive may terminate the contract within one year following
the date of such change in control. Termination may also be permitted by the
executive in the event of a change in duties and powers, customarily associated
with the office designated in such contract. Upon any such termination following
a change in control or a change in duties and powers, customarily associated
with the office designated in the contract, the executive's base salary,
hospitalization and other health benefits will continue for two years.
SALARY AND BENEFITS COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Crary (Chairman), Bruner, Dennis S. Hudson, Jr. and Santarsiero and
Ms. Monroe are the members of the Salary and Benefits Committee. None of Messrs.
Crary, Bruner or Santarsiero nor Ms. Monroe is an officer or employee of
Seacoast or its subsidiaries. Mr. Hudson has served as Chairman of the Board of
Seacoast since 1990; he served as Chief Executive Officer of Seacoast from 1983
until 1992 and President of Seacoast from 1983 until 1990. See "ELECTION OF
DIRECTORS".
James H. Bruner, a Seacoast Director Emeritus and the father of Jeffrey C.
Bruner, a director of Seacoast and FNB, is a controlling shareholder of Mayfair
Investments, which leases to FNB 20,000 square feet of space adjacent to the
First National Center in Stuart, Florida pursuant to a lease which expires in
May 1997. At the end of the lease term, FNB has the option to extend the lease
for a five year period. FNB paid rent of $205,631 on this property in 1996.
Seacoast believes the terms of this lease are commercially reasonable and
comparable to rental terms for similar property in Stuart.
Evans Crary, Jr., a director of Seacoast and FNB and Chairman of FNB's
Executive Committee and Seacoast's Salary and Benefits Committee, is a
semi-retired member of Crary, Buchanan, Bowdish, Bovie, Lord, Roby & Evans,
Chartered ("Crary, Buchanan"), a law firm in Stuart, Florida. Crary, Buchanan,
general counsel to FNB, performed various legal services for Seacoast and FNB
during the fiscal year ended December 31, 1996.
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
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
management, 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
collectibility or present other unfavorable features. Seacoast and its
subsidiaries expect to have such transactions on similar terms with its
directors, executive officers, and their affiliates in the future. The aggregate
amount of loans outstanding by FNB to directors, executive officers, and related
parties of
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Seacoast or FNB as of December 31, 1996, was approximately $2,510,670, which
represented approximately 3.76% of the consolidated shareholders' equity on that
date.
For information concerning specific transactions and business relationships
between Seacoast or FNB and certain of its directors or executive officers, see
"SALARY AND BENEFITS COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION."
PRINCIPAL SHAREHOLDERS
As of April 14, 1997, the only shareholders known to Seacoast to be the
beneficial owners, as defined by Securities and Exchange Commission rules, of
more than 5% of the outstanding shares of Seacoast Class A Stock or Class B
Stock, were the following, for whom beneficial ownership information is set
forth in the following table.
NUMBER AND NUMBER AND
PERCENT OF PERCENT OF
CLASS A STOCK CLASS B STOCK
BENEFICIALLY BENEFICIALLY
OWNED OWNED
--------------- ---------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER % NUMBER %
- ------------------------------------ ------- ----- ------- -----
Dale M. Hudson(1)........................................... 440,804 11.16 154,151 40.08
192 S.E. Harbor Point Drive
Stuart, FL 34996
Dennis S. Hudson, Jr.(1).................................... 310,039 7.85 125,753 32.69
157 S. River Road
Stuart, FL 34996
First Union Corporation(2).................................. 222,750 5.92 -- --
One First Union Center
Charlotte, North Carolina 28288
- ---------------
(1) Dennis S. Hudson, Jr. and Dale M. Hudson are brothers.
(2) First Union Corporation ("First Union") is the parent holding company of
Lieber & Company ("Lieber"), Evergreen Asset Management Group ("Evergreen"),
First Union National Bank, First Union National Bank of Florida and First
Union National Bank of Connecticut. Lieber and Evergreen are corporations
which are investment advisors for mutual funds and other clients; the
securities reported by these subsidiaries are beneficially owned by such
mutual funds or other clients. The other First Union entities listed above
hold the securities reported in a fiduciary capacity for their respective
customers. Of the shares beneficially owned, First Union reports it has sole
voting power as to 161,650 shares and sole dispositive power as to 222,550
shares. The information regarding First Union, including the number and
percent of Seacoast Class A Stock beneficially owned, is based solely upon a
Schedule 13G dated February 3, 1997 and filed by First Union with respect to
Seacoast Class A Stock beneficially owned as of December 31, 1996.
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AMENDMENTS TO SEACOAST'S ARTICLES OF INCORPORATION
Seacoast's Articles of Incorporation currently provide for supermajority
two-third votes of (i) the holders of Class A Stock voting as a separate class,
and (ii) holders of Class A Stock and Class B Stock voting as a single class in
connection with business combinations, including possible acquisitions by
Seacoast. Seacoast shareholders are required by the NASD to vote upon the
Merger, even if the Articles of Incorporation did not require a shareholder
vote. To clarify these provisions in the Articles and to permit Seacoast to
acquire other institutions without a vote of its shareholders under the
Articles, the Board is proposing amendments to Article XI of Seacoast's Articles
of Incorporation. These amendments continue to require the same supermajority
votes of Seacoast shareholders with respect to business combinations, subject to
newly added exceptions permitting Seacoast to acquire other persons or entities
without a supermajority vote of its shareholders. These proposed changes are
intended to facilitate and give certainty to Seacoast's acquisition process and
to avoid the expense of shareholder meetings not required by the FBCA or the
NASD. These amendments clarify Article XI, but revised Article XI does not
expand any existing restrictions on business combinations. Article XI, as
amended, may continue to discourage persons from attempting to acquire Seacoast.
A copy of the proposed Article XI, as revised, is reproduced as Appendix E
hereto, and incorporated herein by reference.
For a discussion of the vote required to approve this proposal and a
discussion of related matters, see "MEETINGS OF SHAREHOLDERS -- Record Dates,
Voting Rights, Required Votes, and Revocability of Proxies."
SEACOAST'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS
PROPOSAL TO AMEND ARTICLE XI OF SEACOAST'S ARTICLES OF INCORPORATION.
RATIFICATION OF THE APPOINTMENT OF SEACOAST INDEPENDENT AUDITORS
The Seacoast Board of Directors, upon the recommendation of the Audit
Committee, has appointed Arthur Andersen LLP, independent certified public
accountants, as independent auditors for Seacoast and its subsidiaries for the
current fiscal year ending December 31, 1997, subject to ratification by the
Seacoast shareholders. Arthur Andersen LLP has served as independent auditors
for Seacoast and its subsidiaries since August 20, 1991. Arthur Andersen 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.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting and will be given the opportunity to make a statement on behalf of the
firm if he so desires. A representative of Arthur Andersen LLP is also expected
to respond to appropriate questions from shareholders.
For a discussion of the vote required to approve this proposal and a
discussion of related matters, see "MEETINGS OF SHAREHOLDERS -- Record Dates,
Voting Rights, Required Votes, and Revocability of Proxies."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Seacoast is required to identify each director or officer who failed to
file timely with the Securities and Exchange Commission a required report
relating to ownership and changes in ownership of Seacoast's securities. Mr.
William R. Hahl, an executive officer of FNB, failed to report on a timely basis
his sale of
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3,100 shares of Seacoast Class A Stock at the then market price of $21.75 per
share on July 19, 1996. This transaction has subsequently been reported on a
Form 5 filed on February 26, 1997. Based on material provided to Seacoast,
Seacoast believes that all other such filing requirements with respect to
Seacoast's fiscal year ended December 31, 1996 were complied with.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of shareholders of Seacoast intended to be presented at the 1998
Annual Meeting of Shareholders must be received by Seacoast at its principal
executive offices on or before December 15, 1997, in order to be included in
Seacoast's Proxy Statement and Proxy relating to the 1998 Annual Meeting of
Shareholders. Only proper proposals which are timely received will be included
in the Proxy Statement and Proxy.
OTHER MATTERS
Management of Seacoast does not know of any matters to be brought before
the Seacoast Annual Meeting other than those described above. If any other
matters properly come before the Seacoast Annual Meeting, the persons designated
as Proxies will vote on such matters in accordance with their best judgment.
Management of PSHC does not know of any matters to be brought before the PSHC
Special Meeting other than those described above. If any other matters properly
come before the PSHC Special Meeting, the persons designated as Proxies will
vote on such matters in accordance with their best judgment.
OTHER INFORMATION
PROXY SOLICITATION COSTS
Each of Seacoast and PSHC will pay one-half of the costs of preparing this
Joint Proxy Statement. The costs of mailing these proxy materials and soliciting
Proxies for the Seacoast Annual Meeting and the PSHC Special Meeting will be
paid by Seacoast and PSHC, respectively. In addition to the solicitation of
shareholders of record by mail, telephone, facsimile or personal contact,
Seacoast and PSHC will be contacting brokers, dealers, banks, or voting trustees
or their nominees who can be identified as record holders of Seacoast Common
Stock or PSHC Common Stock, respectively; such holders, after inquiry by
Seacoast or PSHC, as applicable, will provide information concerning quantities
of proxy materials and Seacoast 1996 Annual Reports and PSHC Annual Reports on
Form 10-KSB needed to supply such information to beneficial owners, and Seacoast
or PSHC, as applicable will reimburse them for the reasonable expense of mailing
proxy materials and other materials to such persons.
EXPERTS
The consolidated financial statements of Seacoast, incorporated by
reference in this Registration Statement, have been audited by Arthur Andersen
LLP, independent certified public accountants, as indicated in their reports
with respect thereto, and are included herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
The financial statements of PSHC as of December 31, 1996 and 1995, and for
each of the years in the three-year period ended December 31, 1996, have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
refers to a change, in 1995, in the accounting for mortgage servicing rights to
conform with Statement of Financial Accounting Standards No. 122.
OPINIONS
The legality of the shares of Seacoast Class A Stock to be issued in the
Merger and certain tax consequences of the Merger will be passed upon by Alston
& Bird LLP, Atlanta, Georgia. As to matters of Florida law, Alston & Bird LLP,
has relied on the opinion of Crary, Buchanan, Bowdish, Bovie, Lord, Roby &
Evans, Chartered, Stuart, Florida.
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SEACOAST BANKING CORPORATION OF FLORIDA
AND
PORT ST. LUCIE NATIONAL BANK HOLDING CORP.
DATED AS OF FEBRUARY 19, 1997
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TABLE OF CONTENTS
PAGE
----
Parties.................................................................. A-6
Preamble................................................................. A-6
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER............................ A-6
1.1 Merger...................................................... A-6
1.2 Time and Place of Closing................................... A-6
1.3 Effective Time.............................................. A-6
1.4 Bank Merger................................................. A-7
ARTICLE 2 -- TERMS OF MERGER............................................. A-7
2.1 Charter..................................................... A-7
2.2 Bylaws...................................................... A-7
2.3 Directors and Officers...................................... A-7
ARTICLE 3 -- MANNER OF CONVERTING SHARES................................. A-7
3.1 Conversion of Shares........................................ A-7
3.2 Anti-Dilution Provisions.................................... A-7
3.3 Shares Held by PSHC or Seacoast............................. A-8
3.4 Dissenting Shareholders..................................... A-8
3.5 Fractional Shares........................................... A-8
3.6 Conversion of Stock Options; Restricted Stock............... A-8
ARTICLE 4 -- EXCHANGE OF SHARES.......................................... A-9
4.1 Exchange Procedures......................................... A-9
4.2 Rights of Former PSHC Shareholders.......................... A-10
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF PSHC...................... A-11
5.1 Organization, Standing, and Power........................... A-11
5.2 Authority of PSHC; No Breach By Agreement................... A-11
5.3 Capital Stock............................................... A-12
5.4 PSHC Subsidiaries........................................... A-12
5.5 SEC Filings; Financial Statements........................... A-13
5.6 Absence of Undisclosed Liabilities.......................... A-13
5.7 Absence of Certain Changes or Events........................ A-13
5.8 Tax Matters................................................. A-13
5.9 Allowance for Possible Loan Losses.......................... A-14
5.10 Assets...................................................... A-14
5.11 Intellectual Property....................................... A-15
5.12 Environmental Matters....................................... A-15
5.13 Compliance with Laws........................................ A-16
5.14 Labor Relations............................................. A-16
5.15 Employee Benefit Plans...................................... A-16
5.16 Material Contracts.......................................... A-18
5.17 Legal Proceedings........................................... A-19
5.18 Reports..................................................... A-19
5.19 Statements True and Correct................................. A-19
5.20 Accounting, Tax and Regulatory Matters...................... A-20
5.21 State Takeover Laws......................................... A-20
5.22 Charter Provisions.......................................... A-20
5.23 Opinion of Financial Advisor................................ A-20
5.24 Board Recommendation........................................ A-20
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PAGE
----
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF Seacoast.................. A-20
6.1 Organization, Standing, and Power........................... A-20
6.2 Authority; No Breach By Agreement........................... A-20
6.3 Capital Stock............................................... A-21
6.4 Seacoast Subsidiaries....................................... A-22
6.5 SEC Filings; Financial Statements........................... A-22
6.6 Absence of Undisclosed Liabilities.......................... A-23
6.7 Absence of Certain Changes or Events........................ A-23
6.8 Certain Environmental and Employee Benefit Matters.......... A-23
6.9 Allowance for Possible Loan Losses.......................... A-23
6.10 Assets...................................................... A-23
6.11 Intellectual Property....................................... A-24
6.12 [Reserved].................................................. A-24
6.13 Compliance With Laws........................................ A-24
6.14 Legal Proceedings........................................... A-25
6.15 Reports..................................................... A-25
6.16 Statements True and Correct................................. A-25
6.17 Accounting, Tax and Regulatory Matters...................... A-26
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION.................... A-26
7.1 Affirmative Covenants of PSHC............................... A-26
7.2 Negative Covenants of PSHC.................................. A-27
7.3 Covenants of Seacoast....................................... A-28
7.4 Adverse Changes in Condition................................ A-29
7.5 Reports..................................................... A-29
ARTICLE 8 -- ADDITIONAL AGREEMENTS....................................... A-29
Registration Statement; Proxy Statement; Shareholder
8.1 Approval.................................................... A-29
8.2 Nasdaq Listing.............................................. A-30
8.3 Applications................................................ A-30
8.4 Filings with State Offices.................................. A-30
8.5 Agreement as to Efforts to Consummate....................... A-30
8.6 Investigation and Confidentiality........................... A-30
8.7 Press Releases.............................................. A-31
8.8 Certain Actions............................................. A-31
8.9 Accounting and Tax Treatment................................ A-31
8.10 State Takeover Laws......................................... A-31
8.11 Charter Provisions.......................................... A-31
8.12 PSHC Meetings............................................... A-31
8.13 Agreements of Affiliates.................................... A-32
8.14 Employee Benefits and Contracts............................. A-32
8.15 Indemnification............................................. A-33
8.16 Certain Policies of PSHC.................................... A-33
8.17 Nomination and Election of Directors........................ A-34
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE........... A-34
9.1 Conditions to Obligations of Each Party..................... A-34
9.2 Conditions to Obligations of Seacoast....................... A-35
9.3 Conditions to Obligations of PSHC........................... A-36
ARTICLE 10 -- TERMINATION................................................ A-37
10.1 Termination................................................. A-37
10.2 Effect of Termination....................................... A-38
10.3 Non-Survival of Representations and Covenants............... A-38
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PAGE
----
ARTICLE 11 -- MISCELLANEOUS.............................................. A-38
11.1 Definitions................................................. A-38
11.2 Expenses.................................................... A-44
11.3 Brokers and Finders......................................... A-45
11.4 Entire Agreement............................................ A-45
11.5 Amendments.................................................. A-45
11.6 Waivers..................................................... A-45
11.7 Assignment.................................................. A-45
11.8 Notices..................................................... A-46
11.9 Governing Law............................................... A-46
11.10 Counterparts................................................ A-46
11.11 Captions; Articles and Sections............................. A-46
11.12 Interpretations............................................. A-46
11.13 Enforcement of Agreement.................................... A-46
11.14 Severability................................................ A-47
Signatures
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EXHIBITS TO MERGER AGREEMENT
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1. -- Bank Plan of Merger. (sec. 1.4).
2. -- Form of agreement of affiliates of PSHC. (sec.sec. 8.13,
9.2(g)).
3. -- Matters as to which Gunster, Yoakley, Valdes-Fauli &
Stewart, P.A. will opine. (sec. 9.2(d)).
4. -- Form of Director's Agreement. (sec. 9.2(h)).
5. -- Claims Letter. (sec. 9.2(i)).
6. -- Matters as to which Alston & Bird will opine. (sec. 9.3(d)).
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of February 19, 1997, by and between SEACOAST BANKING CORPORATION OF
FLORIDA ("Seacoast"), a Florida corporation, and PORT ST. LUCIE NATIONAL BANK
HOLDING CORP. ("PSHC"), a Florida corporation.
PREAMBLE
The respective Boards of Directors of PSHC and Seacoast are of the opinion
that the transactions described herein are in the best interests of the parties
to this Agreement and their respective shareholders. This Agreement provides for
the acquisition of PSHC by Seacoast pursuant to the merger of PSHC with and into
Seacoast. At the effective time of such merger, the outstanding shares of the
capital stock of PSHC shall be converted into the right to receive shares of the
common stock of Seacoast (except as provided herein). As a result, shareholders
of PSHC shall become shareholders of Seacoast and Seacoast shall continue to
conduct the business and operations of PSHC. The transactions described in this
Agreement are subject to the approvals of the shareholders of PSHC, the
shareholders of Seacoast, the Board of Governors of the Federal Reserve System,
and the Office of the Comptroller of the Currency, and the satisfaction of
certain other conditions described in this Agreement. It is the intention of the
parties to this Agreement that the Merger for federal income tax purposes shall
qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code, and for accounting purposes shall qualify for treatment
as a pooling of interests.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties,
intending to be legally bound, agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, PSHC shall be merged with and into Seacoast in accordance with
the provisions of, and with the effect provided in Sections 607.1101, 607.1103,
607.1105, 607.1106 and 607.1107 of the FBCA (the "Merger"). Seacoast shall be
the Surviving Corporation resulting from the Merger and shall continue to be
governed by the Laws of the State of Florida. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective Boards of Directors of PSHC and Seacoast.
1.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time the Articles of
Merger reflecting the Merger shall become effective with the Secretary of State
of the State of Florida (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in writing by the
authorized officers of each Party, the Parties shall use their reasonable
efforts to cause the Effective Time to occur on the first business day following
the last to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the date on which the shareholders of PSHC and Seacoast approve this Agreement
to the extent such approval is required by applicable Law; or such later date
within 30 days thereof as may be mutually agreed upon by Seacoast and PSHC.
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1.4 Bank Merger. After consummation of the Merger, PSN Bank shall (at
Seacoast's discretion) be merged with and into First National (the "Bank
Merger") in accordance with the provisions of and with the effect provided in 12
U.S.C. 215a on terms and subject to the provisions of the Bank Plan of Merger
("Bank Plan"), attached hereto as Exhibit 1. The Bank Plan shall be executed and
the transactions contemplated therein shall be consummated at such time as
Seacoast directs. PSHC shall vote all shares of capital stock of PSN Bank in
favor of the Bank Plan and the Bank Merger provided therein.
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Articles of Incorporation of Seacoast in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation until duly amended or repealed.
2.2 Bylaws. The Bylaws of Seacoast in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 Directors and Officers. The directors of Seacoast in office
immediately prior to the Effective Time, together with two such additional
persons from PSHC's Board of Directors as may thereafter be elected, shall serve
as the directors of the Surviving Corporation from and after the Effective Time
in accordance with the Bylaws of the Surviving Corporation. The officers of
Seacoast in office immediately prior to the Effective Time, together with such
additional persons as may thereafter be elected, shall serve as the officers of
the Surviving Corporation from and after the Effective Time in accordance with
the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of Seacoast, PSHC, or the shareholders of either of the foregoing, the shares of
the constituent corporations shall be converted as follows:
(a) Each share of capital stock of Seacoast issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of PSHC Common Stock, excluding shares held by any PSHC
Entity or any Seacoast Entity, in each case other than in a fiduciary
capacity or as a result of debts previously contracted, and excluding
shares held by shareholders who perfect their statutory dissenters' rights
as provided in Section 3.4 issued and outstanding immediately prior to the
Effective Time shall cease to be outstanding and shall be converted into
and exchanged for the right to receive shares of Seacoast Common Stock in
an amount equal to the Purchase Price Per Share divided by the Seacoast
Stock Price (the "Exchange Ratio"); provided, that, in the event that the
Purchase Price Per Share shall be less than $24.62 (the "Lower Threshold
Price") then PSHC shall have the right to terminate the Agreement.
(c) Each issued and outstanding PSHC Warrant shall be converted into
and exchanged for shares of Seacoast Common Stock based upon the exchange
ratio (the "Warrant Exchange Ratio") obtained by dividing (i) the
difference between the Purchase Price Per Share and $8.26 by (ii) the
Seacoast Stock Price.
3.2 Anti-Dilution Provisions. In the event Seacoast changes the number of
shares of Seacoast Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend, or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio and the Warrant Exchange Ratio shall be
proportionately adjusted. In the event Seacoast changes the number of shares of
Seacoast Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, or similar
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83
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be after the Exchange Ratio and the Warrant Exchange Ratio have been
determined in accordance with Sections 3.1(b) and (c) and prior to the Effective
Time, the Exchange Ratio and Warrant Exchange Ratio shall be proportionately
adjusted. In the event Seacoast changes the number of shares of Seacoast Common
Stock issued and outstanding prior to the Effective Time as a result of a stock
split, stock dividend, or similar recapitalization with respect to such stock
and the record date therefor (in the case of a stock dividend) or the effective
date thereof (in the case of a stock split or similar recapitalization for which
a record date is not established) shall be prior to date on which the Exchange
Ratio and the Warrant Exchange Ratio is determined in accordance with Sections
3.1(b) and (c), (i) the Threshold Prices shall be adjusted appropriately, and
(ii) if necessary, the anticipated Effective Time shall be postponed for an
appropriate period of time agreed upon by the parties in order for the Seacoast
Stock Price to reflect the market effect of such stock split, stock dividend, or
similar recapitalization.
3.3 Shares Held by PSHC or Seacoast. Each of the shares of PSHC Common
Stock held by any PSHC Entity or by any Seacoast Entity, in each case other than
in a fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time and no consideration shall be issued
in exchange therefor.
3.4 Dissenting Shareholders. Any holder of shares of PSHC Common Stock who
perfects his dissenters' rights in accordance with and as contemplated by
Section 607.1301 et seq. of the FBCA shall be entitled to receive the value of
such shares in cash as determined pursuant to such provision of Law; provided,
that no such payment shall be made to any dissenting shareholder unless and
until such dissenting shareholder has complied with the applicable provisions of
the FBCA and surrendered to PSHC the certificate or certificates representing
the shares for which payment is being made. In the event that after the
Effective Time a dissenting shareholder of PSHC fails to perfect, or effectively
withdraws or loses, his right to appraisal and of payment for his shares subject
to Seacoast's consent in its sole discretion, Seacoast shall issue and deliver
the consideration to which such holder of shares of PSHC Common Stock is
entitled under this Article 3 (without interest) upon surrender by such holder
of the certificate or certificates representing shares of PSHC Common Stock held
by him.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of PSHC Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Seacoast Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Seacoast Common Stock
multiplied by the Seacoast Stock Price. No such holder will be entitled to
dividends, voting rights, or any other rights as a shareholder in respect of any
fractional shares.
3.6 Conversion of Stock Options; Restricted Stock. (a) At the Effective
Time, each option or other Equity Right (excluding PSHC Warrants) to purchase
shares of PSHC Common Stock pursuant to stock options or stock appreciation
rights ("PSHC Options") granted by PSHC under the PSHC Stock Plan[s], which are
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to Seacoast Common Stock, and
Seacoast shall assume each PSHC Option, in accordance with the terms of the PSHC
Stock Plan and stock option agreement by which it is evidenced, except that from
and after the Effective Time, (i) Seacoast and its Compensation Committee shall
be substituted for PSHC and the Committee of PSHC's Board of Directors
(including, if applicable, the entire Board of Directors of PSHC) administering
such PSHC Stock Plan, (ii) each PSHC Option assumed by Seacoast may be exercised
solely for shares of Seacoast Common Stock (or cash, if so provided under the
terms of such PSHC Option), (iii) the number of shares of Seacoast Common Stock
subject to such PSHC Option shall be equal to the number of shares of PSHC
Common Stock subject to such PSHC Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, and (iv) the per share exercise price under
each such PSHC Option shall be adjusted by dividing the per share exercise price
under each such PSHC Option by the Exchange Ratio and rounding up to the nearest
cent. Notwithstanding the provisions of clause (iii) of the preceding sentence,
Seacoast shall not be obligated to issue any fraction of a share of Seacoast
Common Stock upon exercise of PSHC Options and any fraction of a share of
Seacoast Common Stock that otherwise would
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be subject to a converted PSHC Option shall represent the right to receive a
cash payment upon exercise of such converted PSHC Option equal to the product of
such fraction and the difference between the market value of one share of
Seacoast Common Stock at the time of exercise of such Option and the per share
exercise price of such Option. The market value of one share of Seacoast Common
Stock at the time of exercise of an Option shall be the last sale price of such
common stock on the Nasdaq National Market (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
Seacoast) on the last trading day preceding the date of exercise. In addition,
notwithstanding the provisions of clauses (iii) and (iv) of the first sentence
of this Section 3.6(a), each PSHC Option which is an "incentive stock option"
shall be adjusted as required by Section 424 of the Internal Revenue Code, and
the regulations promulgated thereunder, so as not to constitute a modification,
extension or renewal of the option, within the meaning of Section 424(h) of the
Internal Revenue Code. Each of PSHC and Seacoast agrees to take all necessary
steps to effectuate the foregoing provisions of this Section 3.6, including
using its reasonable efforts to obtain from each holder of a PSHC Option any
Consent or Contract that may be deemed necessary or advisable in order to effect
the transactions contemplated by this Section 3.6. Anything in this Agreement to
the contrary notwithstanding, Seacoast shall have the right, in its sole
discretion, not to deliver the consideration provided in this Section 3.6 to a
former holder of a PSHC Option who has not delivered such Consent or Contract.
(b) As soon as practicable after the Effective Time, Seacoast shall deliver
to the participants in each PSHC Stock Plan an appropriate notice setting forth
such participant's rights pursuant thereto and the grants subject to such PSHC
Stock Plan shall continue in effect on the same terms and conditions (subject to
the adjustments required by Section 3.6(a) after giving effect to the Merger),
and Seacoast shall comply with the terms of each PSHC Stock Plan to ensure, to
the extent required by, and subject to the provisions of, such PSHC Stock Plan,
that PSHC Options which qualified as incentive stock options prior to the
Effective Time continue to qualify as incentive stock options after the
Effective Time. At or prior to the Effective Time, Seacoast shall take all
corporate action necessary to reserve for issuance sufficient shares of Seacoast
Common Stock for delivery upon exercise of PSHC Options assumed by it in
accordance with this Section 3.6. As soon as practicable after the Effective
Time, Seacoast shall file a registration statement on Form S-3 or Form S-8, as
the case may be (or any successor or other appropriate forms), with respect to
the shares of Seacoast Common Stock subject to such options and shall use its
reasonable efforts to maintain the effectiveness of such registration statements
(and maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, Seacoast
shall administer the PSHC Stock Plan assumed pursuant to this Section 3.6 in a
manner that complies with Rule 16b-3 promulgated under the Exchange Act to the
extent the PSHC Stock Plan complied with such rule prior to the Effective Time.
(c) All contractual restrictions or limitations on transfer with respect to
PSHC Common Stock awarded under the PSHC Stock Plans or any other plan, program,
Contract or arrangement of any PSHC Entity, to the extent that such restrictions
or limitations shall not have already lapsed (whether as a result of the Merger
or otherwise), and except as otherwise expressly provided in such plan, program,
Contract or arrangement, shall remain in full force and effect with respect to
shares of Seacoast Common Stock into which such restricted stock is converted
pursuant to Section 3.1.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, Seacoast and
PSHC shall cause the exchange agent selected by Seacoast (the "Exchange Agent")
to mail to each holder of record of a certificate or certificates which
represented shares of PSHC Common Stock immediately prior to the Effective Time
(the "Certificates") appropriate transmittal materials and instructions (which
shall specify that delivery shall be effected, and risk of loss and title to
such Certificates shall pass, only upon proper delivery of such Certificates to
the Exchange Agent). The Certificate or Certificates of PSHC Common Stock so
delivered
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shall be duly endorsed as the Exchange Agent may require. In the event of a
transfer of ownership of shares of PSHC Common Stock represented by Certificates
that are not registered in the transfer records of PSHC, the consideration
provided in Section 3.1 may be issued to a transferee if the Certificates
representing such shares are delivered to the Exchange Agent, accompanied by all
documents required to evidence such transfer and by evidence satisfactory to the
Exchange Agent that any applicable stock transfer taxes have been paid. If any
Certificate shall have been lost, stolen, mislaid or destroyed, upon receipt of
(i) an affidavit of that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (ii) such bond, security or indemnity as
Seacoast and the Exchange Agent may reasonably require and (iii) any other
documents necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder the consideration into which the
shares represented by such lost, stolen, mislaid or destroyed Certificate shall
have been converted. The Exchange Agent may establish such other reasonable and
customary rules and procedures in connection with its duties as it may deem
appropriate. After the Effective Time, each holder of shares of PSHC Common
Stock (other than shares to be canceled pursuant to Section 3.3 or as to which
statutory dissenters' rights have been perfected as provided in Section 3.4)
issued and outstanding at the Effective Time shall surrender the Certificate or
Certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1, together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to Section 4.2. To
the extent required by Section 3.5, each holder of shares of PSHC Common Stock
issued and outstanding at the Effective Time also shall receive, upon surrender
of the Certificate or Certificates, cash in lieu of any fractional share of
Seacoast Common Stock to which such holder may be otherwise entitled (without
interest). Seacoast shall not be obligated to deliver the consideration to which
any former holder of PSHC Common Stock is entitled as a result of the Merger
until such holder surrenders such holder's Certificate or Certificates for
exchange as provided in this Section 4.1. Any other provision of this Agreement
notwithstanding, neither Seacoast nor the Exchange Agent shall be liable to a
holder of PSHC Common Stock for any amounts paid or property delivered in good
faith to a public official pursuant to any applicable abandoned property,
escheat or similar Law. Adoption of this Agreement by the shareholders of PSHC
shall constitute ratification of the appointment of the Exchange Agent.
4.2 Rights of Former PSHC Shareholders. At the Effective Time, the stock
transfer books of PSHC shall be closed as to holders of PSHC Common Stock
immediately prior to the Effective Time and no transfer of PSHC Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1, each Certificate
theretofore representing shares of PSHC Common Stock (other than shares to be
canceled pursuant to Sections 3.3 and 3.4) shall from and after the Effective
Time represent for all purposes only the right to receive the consideration
provided in Sections 3.1 and 3.5 in exchange therefor, subject, however, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which have been
declared or made by PSHC in respect of such shares of PSHC Common Stock in
accordance with the terms of this Agreement and which remain unpaid at the
Effective Time. Whenever a dividend or other distribution is declared by
Seacoast on the Seacoast Common Stock, the record date for which is at or after
the Effective Time, the declaration shall include dividends or other
distributions on all shares of Seacoast Common Stock issuable pursuant to this
Agreement, but beginning 45 days after the Effective Time, no dividend or other
distribution payable to the holders of record of Seacoast Common Stock as of any
time subsequent to the Effective Time shall be delivered to the holder of any
Certificate until such holder surrenders such Certificate for exchange as
provided in Section 4.1. However, upon surrender of such Certificate, both the
Seacoast Common Stock certificate (together with all such undelivered dividends
or other distributions, without interest) and any undelivered dividends and cash
payments payable hereunder (without interest) shall be delivered and paid with
respect to each share represented by such Certificate.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PSHC
PSHC hereby represents and warrants to Seacoast as follows:
5.1 Organization, Standing, and Power. PSHC is a corporation duly
organized, validly existing, and in good standing under the Laws of the
State of Florida, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its Assets. PSHC is
duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions
in which the failure to be so qualified or licensed is not reasonably
likely to have, individually or in the aggregate, a PSHC Material Adverse
Effect. The minute books and other organizational documents and corporate
records for PSHC have been made available to Seacoast for its review and,
except as disclosed in Section 5.1 of the PSHC Disclosure Memorandum, are
true and complete in all material respects as in effect as of the date of
this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the Board of Directors and
shareholders thereof.
5.2 Authority of PSHC; No Breach By Agreement. (a) PSHC has the
corporate power and authority necessary to execute, deliver, and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of PSHC, subject
to the approval of this Agreement by the holders of a majority of the
outstanding shares of PSHC Common Stock, which is the only shareholder vote
required for approval of this Agreement and consummation of the Merger by
PSHC. Subject to such requisite shareholder approval, this Agreement
represents a legal, valid, and binding obligation of PSHC, enforceable
against PSHC in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by PSHC, nor
the consummation by PSHC of the transactions contemplated hereby, nor
compliance by PSHC with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of PSHC's Articles of
Incorporation or Bylaws or the certificate or articles of incorporation or
bylaws of any PSHC Subsidiary or any resolution adopted by the board of
directors or the shareholders of any PSHC Entity, or (ii) except as
disclosed in Section 5.2 of the PSHC Disclosure Memorandum, constitute or
result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any PSHC Entity under, any
Contract or Permit of any PSHC Entity, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have, individually
or in the aggregate, a PSHC Material Adverse Effect or where such event
would cause a breach hereof or a Default hereunder, or, (iii) subject to
receipt of the requisite Consents referred to in Section 9.1(b), constitute
or result in a Default under, or require any Consent pursuant to, any Law
or Order applicable to any PSHC Entity or any of their respective material
Assets (including any Seacoast Entity or any PSHC Entity becoming subject
to or liable for the payment of any Tax or any of the Assets owned by any
Seacoast Entity or any PSHC Entity being reassessed or revalued by any
Taxing authority).
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a PSHC Material Adverse Effect, no
notice to, filing with, or
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Consent of, any public body or authority is necessary for the consummation
by PSHC of the Merger and the other transactions contemplated in this
Agreement.
5.3 Capital Stock. (a) The authorized capital stock of PSHC consists
of (i) 10,000,000 shares of PSHC Common Stock, of which 744,655 shares are
issued and outstanding as of the date of this Agreement and assuming the
issue and exercise of all issued and outstanding warrants and options to
purchase 201,298.625 shares of PSHC Common Stock, not more than 945,954
shares will be issued and outstanding at the Effective Time, and (ii) no
shares of preferred stock are authorized, issued or outstanding. All of the
issued and outstanding shares of capital stock of PSHC are duly and validly
issued and outstanding and are fully paid and nonassessable under the FBCA.
None of the outstanding shares of capital stock of PSHC has been issued in
violation of any preemptive rights of the current or past shareholders of
PSHC.
(b) Except as set forth in Section 5.3(a), or as disclosed in Section
5.3(b) of the PSHC Disclosure Memorandum, there are no shares of capital
stock or other equity securities of PSHC outstanding and no outstanding
Equity Rights relating to the capital stock of PSHC.
5.4 PSHC Subsidiaries. PSHC has disclosed in Section 5.4 of the PSHC
Disclosure Memorandum all of the PSHC Subsidiaries that are corporations
(identifying its jurisdiction of incorporation, each jurisdiction in which
it is qualified and/or licensed to transact business, and the number of
shares owned and percentage ownership interest represented by such share
ownership) and all of the PSHC Subsidiaries that are general or limited
partnerships, limited liability companies, trusts or other non-corporate
entities (identifying the Law under which such entity is organized, each
jurisdiction in which it is qualified and/or licensed to transact business,
the type of entity the type of entity and the amount and nature of the
ownership interest therein). Except as disclosed in Section 5.4 of the PSHC
Disclosure Memorandum, PSHC or one of its wholly-owned Subsidiaries owns
all of the issued and outstanding shares of capital stock (or other equity
interests) of each PSHC Subsidiary. No capital stock (or other equity
interest) of any PSHC Subsidiary is or may become required to be issued
(other than to another PSHC Entity) by reason of any Equity Rights, and
there are no Contracts by which any PSHC Subsidiary is bound to issue
(other than to another PSHC Entity) additional shares of its capital stock
(or other equity interests) or Equity Rights or by which any PSHC Entity is
or may be bound to transfer any shares of the capital stock (or other
equity interests) of any PSHC Subsidiary (other than to another PSHC
Entity). There are no Contracts relating to the rights of any PSHC Entity
to vote or to dispose of any shares of the capital stock (or other equity
interests) of any PSHC Subsidiary. All of the shares of capital stock (or
other equity interests) of each PSHC Subsidiary held by a PSHC Entity are
fully paid and (except pursuant to 12 USC Section 55 in the case of
national banks and comparable, applicable state Law, if any, in the case of
state depository institutions) nonassessable under the applicable
corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the PSHC Entity free and clear
of any Lien. Except as disclosed in Section 5.4 of the PSHC Disclosure
Memorandum, each PSHC Subsidiary is either a bank, a savings association,
or a corporation, and each such Subsidiary is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate
its Assets and to carry on its business as now conducted. Each PSHC
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a PSHC
Material Adverse Effect. Each PSHC Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund. The minute books, and other
organizational and corporate documents for each PSHC Subsidiary have been
made available to Seacoast for its review, and, except as disclosed in
Section 5.4 of the PSHC Disclosure Memorandum, are true and complete in all
material respects as in effect as of the date of this
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Agreement and accurately reflect in all material respects all amendments
thereto and all proceedings of the Board of Directors, all committees of
the Board of Directors and shareholders thereof.
5.5 SEC Filings; Financial Statements. (a) PSHC has timely filed and
made available to Seacoast, all SEC Documents required to be filed by PSHC
since December 31, 1992 (the "PSHC SEC Reports"). The PSHC SEC Reports (i)
at the time filed, complied in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii) did
not, at the time they were filed (or, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated in such PSHC SEC Reports or necessary in order
to make the statements in such PSHC SEC Reports, in light of the
circumstances under which they were made, not misleading. No PSHC
Subsidiary is required to file any SEC Documents.
(b) Each of the PSHC Financial Statements (including, in each case,
any related notes) contained in the PSHC SEC Reports, including any PSHC
SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited interim statements, as
permitted by Form 10-Q of the SEC), and fairly presented in all material
respects the consolidated financial position of PSHC and its Subsidiaries
as at the respective dates and the consolidated results of operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount or
effect.
5.6 Absence of Undisclosed Liabilities. No PSHC Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a PSHC Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of PSHC as
of December 31, 1995 and September 30, 1996, included in the PSHC Financial
Statements delivered prior to the date of this Agreement or reflected in
the notes thereto. Except as set forth in Section 5.6 of the PSHC
Disclosure Memorandum, no PSHC Entity has incurred or paid any Liability
since September 30, 1996, except for such Liabilities incurred or paid (i)
in the ordinary course of business consistent with past business practice
and which are not reasonably likely to have, individually or in the
aggregate, a PSHC Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement.
5.7 Absence of Certain Changes or Events. Since December 31,1995,
except as disclosed in the PSHC Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 5.7 of the PSHC
Disclosure Memorandum, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually
or in the aggregate, a PSHC Material Adverse Effect, and (ii) the PSHC
Entities have not taken any action, or failed to take any action, prior to
the date of this Agreement, which action or failure, if taken after the
date of this Agreement, would represent or result in a material breach or
violation of any of the covenants and agreements of PSHC provided in
Article 7.
5.8 Tax Matters. (a) All Tax Returns required to be filed by or on
behalf of any of the PSHC Entities have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for
periods ended on or before December 31, 1995, and on or before the date of
the most recent fiscal year end immediately preceding the Effective Time,
except to the extent that all such failures to file, taken together, are
not reasonably likely to have a PSHC Material Adverse Effect, and all Tax
Returns filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. As of the date of this
Agreement, there is no audit examination, deficiency, or refund Litigation
with respect to any Taxes, except as reserved against in the PSHC Financial
Statements delivered prior to the date of this Agreement or as disclosed in
Section 5.8 of the PSHC Disclosure Memorandum. PSHC's federal income Tax
Returns have not been audited by the IRS. All Taxes and other Liabilities
due with respect to completed and settled examinations or concluded
Litigation have been paid. There are no Liens with respect to Taxes upon
any of the Assets of the PSHC Entities, except for any such Liens which are
not reasonably likely to have a PSHC Material Adverse Effect.
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(b) None of the PSHC Entities has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities)
that is currently in effect.
(c) The provision for any Taxes due or to become due for any of the
PSHC Entities for the period or periods through and including the date of
the respective PSHC Financial Statements that has been made and is
reflected on such PSHC Financial Statements is sufficient to cover all such
Taxes.
(d) Deferred Taxes of the PSHC Entities have been provided for in
accordance with GAAP.
(e) Except as disclosed in Section 5.8(e) of the PSHC Disclosure
Memorandum, none of the PSHC Entities is a party to any Tax allocation or
Tax sharing agreement and none of the PSHC Entities has been a member of an
affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was PSHC) has any Liability for
Taxes of any Person (other than PSHC and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign Law) as a transferee or successor or by Contract or otherwise.
(f) Except as disclosed in Section 5.8(f) of the PSHC Disclosure
Memorandum, each of the PSHC Entities is in compliance with, and its
records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local
Tax Laws, and such records identify with specificity all accounts subject
to backup withholding under Section 3406 of the Internal Revenue Code,
except for such instances of noncompliance and such omissions as are not
reasonably likely to have, individually or in the aggregate, a PSHC
Material Adverse Effect.
(g) Except as disclosed in Section 5.8 of the PSHC Disclosure
Memorandum, none of the PSHC Entities has made any payments, is obligated
to make any payments, or is a party to any Contract that could obligate it
to make any payments that would be disallowed as a deduction under Section
280G or 162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as defined in Internal
Revenue Code Section 382(g), of the PSHC Entities that occurred during or
after any Taxable Period in which the PSHC Entities incurred a net
operating loss that carries over to any Taxable Period ending after
December 31,1995.
(i) No PSHC Entity has or has had in any foreign country a permanent
establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
5.9 Allowance for Possible Loan Losses. In the opinion of management
of PSHC, the allowances for possible loan, credit or securities losses
(collectively, the "Allowance") shown on the consolidated balance sheets of
PSHC included in the most recent PSHC Financial Statements dated prior to
the date of this Agreement was, and the Allowance shown on the consolidated
balance sheets of PSHC included in the PSHC Financial Statements as of
dates subsequent to the execution of this Agreement will be, as of the
dates thereof, adequate (within the meaning of GAAP and applicable
regulatory requirements or guidelines) to provide for all known or
reasonably anticipated losses relating to or inherent in the loan, lease
and securities portfolios (including accrued interest receivables) of the
PSHC Entities and other extensions of credit (including letters of credit
and commitments to make loans or extend credit) by the PSHC Entities as of
the dates thereof.
5.10 Assets. (a) Except as disclosed in Section 5.10 of the PSHC
Disclosure Memorandum or as disclosed or reserved against in the PSHC
Financial Statements delivered prior to the date of this Agreement, the
PSHC Entities have good and marketable title, free and clear of all Liens,
to all of their respective Assets, except for any such Liens or other
defects of title which are not reasonably likely to have a PSHC Material
Adverse Effect. Except as set forth in Section 5.10 of the PSHC Disclosure
Memorandum, all tangible properties used in the businesses of the PSHC
Entities are in good condition, reasonable wear and tear excepted, and are
usable in the ordinary course of business consistent with PSHC's past
practices.
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(b) All Assets which are material to PSHC's business on a consolidated
basis, held under leases or subleases by any of the PSHC Entities, are held
under valid Contracts enforceable as to the PSHC Entity and to the
Knowledge of PSHC as to the counter-party to such Contracts in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other
Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceedings may be brought), and each such Contract is in full force
and effect.
(c) The PSHC Entities currently maintain insurance similar in amounts,
scope, and coverage to that maintained by other peer banking organizations.
None of the PSHC Entities has received notice from any insurance carrier
that (i) any policy of insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased.
There are presently no claims for amounts exceeding in any individual case
$5,000, or in the aggregate $100,000, pending under such policies of
insurance and no notices of claims in excess of such amounts have been
given by any PSHC Entity under such policies.
(d) The Assets of the PSHC Entities include all Assets required to
operate the business of the PSHC Entities as presently conducted.
5.11 Intellectual Property. Except as disclosed in Section 5.11 of
the PSHC Disclosure Memorandum, each PSHC Entity owns or has a license to
use all of the Intellectual Property used by such PSHC Entity in the course
of its business. Each PSHC Entity is the owner of or has a license to any
Intellectual Property sold or licensed to a third party by such PSHC Entity
in connection with such PSHC Entity's business operations, and such PSHC
Entity has the right to convey by sale or license any Intellectual Property
so conveyed. No PSHC Entity is in Default under any of its Intellectual
Property licenses. No proceedings have been instituted, or are pending or
to the Knowledge of PSHC threatened, which challenge the rights of any PSHC
Entity with respect to Intellectual Property used, sold or licensed by such
PSHC Entity in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. The conduct of the
business of the PSHC Entities does not infringe any Intellectual Property
of any other person. Except as disclosed in Section 5.11 of the PSHC
Disclosure Memorandum, no PSHC Entity is obligated to pay any recurring
royalties to any Person with respect to any such Intellectual Property.
Except as disclosed in Section 5.11 of the PSHC Disclosure Memorandum,
every officer, director, or employee of any PSHC Entity is a party to a
Contract which requires such officer, director or employee to assign any
interest in any Intellectual Property to a PSHC Entity and to keep
confidential any trade secrets, proprietary data, customer information, or
other business information of a PSHC Entity, and no such officer, director
or employee is party to any Contract with any Person other than a PSHC
Entity which requires such officer, director or employee to assign any
interest in any Intellectual Property to any Person other than a PSHC
Entity or to keep confidential any trade secrets, proprietary data,
customer information, or other business information of any Person other
than a PSHC Entity. Except as disclosed in Section 5.11 of the PSHC
Disclosure Memorandum, no officer, director or to the Knowledge of PSHC any
employee of any PSHC Entity is party to any Contract which restricts or
prohibits such officer, director or employee from engaging in activities
competitive with any Person, including any PSHC Entity.
5.12 Environmental Matters. (a) To the Knowledge of PSHC, each PSHC
Entity, its Participation Facilities, and its Operating Properties are, and
have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate,
a PSHC Material Adverse Effect.
(b) There is no Litigation pending or, to the Knowledge of PSHC,
threatened before any court, governmental agency, or authority or other
forum in which any PSHC Entity or any of its Operating Properties or
Participation Facilities (or PSHC in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation,
may be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the
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release, discharge, spillage, or disposal into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by
any PSHC Entity or any of its Operating Properties or Participation
Facilities, nor is there any reasonable basis for any Litigation of a type
described in this sentence.
(c) During the period of (i) any PSHC Entity's ownership or operation
of any of their respective current properties, (ii) any PSHC Entity's
participation in the management of any Participation Facility, or (iii) any
PSHC Entity's holding of a security interest in a Operating Property, there
have been no releases, discharges, spillages, or disposals of Hazardous
Material in, on, under, adjacent to, or affecting (or potentially
affecting) such properties; provided that with respect to the period set
forth in (iii) above, this representation shall be made to the Knowledge of
PSHC. Prior to the period of (i) any PSHC Entity's ownership or operation
of any of their respective current properties, (ii) any PSHC Entity's
participation in the management of any Participation Facility, or (iii) any
PSHC Entity's holding of a security interest in a Operating Property, to
the Knowledge of PSHC, there were no releases, discharges, spillages, or
disposals of Hazardous Material in, on, under, or affecting any such
property, Participation Facility or Operating Property.
5.13 Compliance with Laws. PSHC is duly registered as a bank holding
company under the BHC Act. Each PSHC Entity has in effect all Permits
necessary for it to own, lease, or operate its material Assets and to carry
on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate,
a PSHC Material Adverse Effect, and there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a PSHC Material Adverse Effect. Except as
disclosed in Section 5.13 of the PSHC Disclosure Memorandum, none of the
PSHC Entities:
(a) is in Default under any of the provisions of its Articles of
Incorporation or Bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits applicable to
its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the
aggregate, a PSHC Material Adverse Effect; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any PSHC Entity is not in compliance with any of the Laws
or Orders which such governmental authority or Regulatory Authority
enforces, (ii) threatening to revoke any Permits, or (iii) requiring any
PSHC Entity to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
Seacoast.
5.14 Labor Relations. No PSHC Entity is the subject of any Litigation
asserting that it or any other PSHC Entity has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other PSHC Entity to
bargain with any labor organization as to wages or conditions of
employment, nor is any PSHC Entity party to any collective bargaining
agreement, nor is there any strike or other labor dispute involving any
PSHC Entity, pending or to the Knowledge of PSHC is (i) any such strike or
dispute threatened or (ii) there any activity involving any PSHC Entity's
employees seeking to certify a collective bargaining unit or engaging in
any other organization activity.
5.15 Employee Benefit Plans. (a) PSHC has disclosed in Section 5.15
of the PSHC Disclosure Memorandum, and has delivered or made available to
Seacoast prior to the execution of this Agreement
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copies in each case of, all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other incentive plan, all other written employee
programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans"
as that term is defined in Section 3(3) of ERISA, currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by any
PSHC Entity or ERISA Affiliate thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "PSHC Benefit Plans"). Any of the PSHC
Benefit Plans which is an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as a "PSHC ERISA
Plan." Each PSHC ERISA Plan which is also a "defined benefit plan" (as
defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as a "PSHC Pension Plan." No PSHC Pension Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All PSHC Benefit Plans are in compliance with the applicable terms
of ERISA, the Internal Revenue Code, and any other applicable Laws the
breach or violation of which are reasonably likely to have, individually or
in the aggregate, a PSHC Material Adverse Effect. Each PSHC ERISA Plan
which is intended to be qualified under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and PSHC is not aware of any circumstances likely
to result in revocation of any such favorable determination letter. No PSHC
Entity has engaged in a transaction with respect to any PSHC Benefit Plan
that, assuming the taxable period of such transaction expired as of the
date hereof, would subject any PSHC Entity to a Tax imposed by either
Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) No PSHC Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value
of the assets of any such plan exceeds the plan's "benefit liabilities," as
that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance
with all applicable legal requirements. Since the date of the most recent
actuarial valuation, there has been (i) no material change in the financial
position of any PSHC Pension Plan, (ii) no change in the actuarial
assumptions with respect to any PSHC Pension Plan, and (iii) no increase in
benefits under any PSHC Pension Plan as a result of plan amendments or
changes in applicable Law which is reasonably likely to have, individually
or in the aggregate, a PSHC Material Adverse Effect or materially adversely
affect the funding status of any such plan. Neither any PSHC Pension Plan
nor any "single-employer plan," within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any PSHC Entity, or the
single-employer plan of any entity which is considered one employer with
PSHC under Section 4001 of ERISA or Section 414 of the Internal Revenue
Code or Section 302 of ERISA (whether or not waived) (an "ERISA Affiliate")
has an "accumulated funding deficiency" within the meaning of Section 412
of the Internal Revenue Code or Section 302 of ERISA. No PSHC Entity has
provided, or is required to provide, security to a PSHC Pension Plan or to
any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any PSHC Entity with respect to any ongoing,
frozen, or terminated single-employer plan or the single-employer plan of
any ERISA Affiliate. No PSHC Entity has incurred any withdrawal Liability
with respect to a multiemployer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate. No
notice of a "reportable event," within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has been
required to be filed for any PSHC Pension Plan or by any ERISA Affiliate
within the 12-month period ending on the date hereof.
(e) Except as disclosed in Section 5.15 of the PSHC Disclosure
Memorandum, no PSHC Entity has any Liability for retiree health and life
benefits under any of the PSHC Benefit Plans and there are no
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restrictions on the rights of such PSHC Entity to amend or terminate any
such retiree health or benefit Plan without incurring any Liability
thereunder.
(f) Except as disclosed in Section 5.15 of the PSHC Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
or otherwise) becoming due to any director or any employee of any PSHC
Entity from any PSHC Entity under any PSHC Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any PSHC Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any
such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any PSHC Entity and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the PSHC Financial Statements to the
extent required by and in accordance with GAAP.
(h) PSHC (including its subsidiaries and successors) may satisfy its
current and future liabilities under the Port St. Lucie National Bank
Deferred Compensation Plan (the "Deferred Plan") by making, as soon as
administratively feasible after the date on which it terminates the
Deferred Plan, single lump sum payments (which in the aggregate are equal
to or less than the fair market value of the life insurance policy or
policies purchased to fund the benefits under the Deferred Plan) to each
participant or his beneficiary, which payments are equal to each such
participant's respective accrued benefit under the Deferred Plan as of the
date on which the Deferred Plan is terminated. In the case of a life
insurance policy held in the trust, "fair market value" shall mean the net
cash surrender value of the policy, after deducting any cancellation,
liquidation or surrender charges or fees. There are no restrictions on
PSHC's (including its subsidiaries and successors) ability to obtain such
cash surrender value as of or immediately following the Closing Date (other
than applicable surrender charges). Neither Seacoast nor any PSHC Entity
shall be obligated to contribute cash or other property to fund such
benefits under the Deferred Plan. There are no restrictions on the PSHC's
(including its subsidiaries and successors) right to terminate the Deferred
Plan as to benefits which have not accrued as of the Closing Date.
5.16 Material Contracts. Except as disclosed in Section 5.16 of the
PSHC Disclosure Memorandum or otherwise reflected in the PSHC Financial
Statements, none of the PSHC Entities, nor any of their respective Assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $50,000, (ii) any Contract
relating to the borrowing of money by any PSHC Entity or the guarantee by
any PSHC Entity of any such obligation (other than Contracts evidencing
deposit liabilities, purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances of depository institution
Subsidiaries, trade payables and Contracts relating to borrowings or
guarantees made in the ordinary course of business), (iii) any Contract
which prohibits or restricts any PSHC Entity from engaging in any business
activities in any geographic area, line of business or otherwise in
competition with any other Person, (iv) any Contract between or among PSHC
Entities, (v) any Contract involving Intellectual Property (other than
Contracts entered into in the ordinary course with customers and commercial
"shrink-wrap" software licenses), (vi) any Contract relating to the
provision of data processing, network communication, or other technical
services to or by any PSHC Entity, (vii) any Contract relating to the
purchase or sale of any goods or services (other than Contracts entered
into in the ordinary course of business and involving payments under any
individual Contract not in excess of $100,000), (viii) any exchange-traded
or over-the-counter swap, forward, future, option, cap, floor, or collar
financial Contract, or any other interest rate or foreign currency
protection Contract not included on its balance sheet which is a financial
derivative Contract, and (ix) any other Contract or amendment thereto that
would be required to be filed as an exhibit to a Form 10-K filed by PSHC
with the SEC as of the date of this Agreement (together with all Contracts
referred to in Sections 5.10 and 5.15(a), the "PSHC Contracts"). With
respect to each PSHC Contract and except as disclosed in Section 5.16 of
the PSHC Disclosure Memoran-
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dum: (i) the Contract is in full force and effect; (ii) no PSHC Entity is
in Default thereunder or would be in Default thereunder as a result of this
Agreement or the transaction contemplated herein; (iii) no PSHC Entity has
repudiated or waived any material provision of any such Contract; and (iv)
no other party to any such Contract is, to the Knowledge of PSHC, in
Default in any respect or has repudiated or waived any material provision
thereunder. All of the indebtedness of any PSHC Entity for money borrowed
is prepayable at any time by such PSHC Entity without penalty or premium.
None of PSHC nor any of the PSHC Entities has any obligation or liability
to any wholesale mortgage business ("Wholesale Mortgage Business") or to
any Affiliate of such Persons to purchase, fund or extend credit with
respect to any loans, extensions of credit, mortgages, or any participation
or other interest therein originated, brokered or referred by or through
such Persons, and the only outstanding balances under any such arrangements
whereby PSNB is obligated to provide funding aggregate not more than
$212,000, all of which will be repaid in full by not later than April 30,
1997. Except as described in Section 5.16 of the PSHC Disclosure
Memorandum, all Contracts to which PSHC and/or its Subsidiaries are parties
may be terminated by such PSHC Entity and its successors and assigns
without penalty, charge, liability or further obligation.
5.17 Legal Proceedings. There is no Litigation instituted or pending,
or, to the Knowledge of PSHC, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any PSHC Entity
or any employee benefit plan of any PSHC Entity, or against any director or
employee of any PSHC Entity, in their capacity as such, or against any
Asset, interest, or right of any of them, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any PSHC Entity. Section 5.17 of the PSHC Disclosure
Memorandum contains a summary of all Litigation as of the date of this
Agreement to which any PSHC Entity is a party and which names a PSHC Entity
as a defendant or cross-defendant or for which any PSHC Entity has any
potential Liability.
5.18 Reports. Except as set forth in Section 5.18 of the PSHC
Disclosure Memorandum, since January 1, 1993, or the date of organization
if later, each PSHC Entity has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that
it was required to file with Regulatory Authorities (except, in the case of
state securities authorities, failures to file which are not reasonably
likely to have, individually or in the aggregate, a PSHC Material Adverse
Effect). As of their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its
respective date, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
5.19 Statements True and Correct. No statement, certificate,
instrument, or other writing furnished or to be furnished by any PSHC
Entity or any Affiliate thereof to Seacoast pursuant to this Agreement or
any other document, agreement, or instrument referred to herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any PSHC Entity or any Affiliate
thereof for inclusion in the Registration Statement to be filed by Seacoast
with the SEC will, when the Registration Statement becomes effective, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein not misleading. None
of the information supplied or to be supplied by any PSHC Entity or any
Affiliate thereof for inclusion in the Joint Proxy Statement to be mailed
to each Party's shareholders in connection with the Shareholders' Meetings,
and any other documents to be filed by a PSHC Entity or any Affiliate
thereof with the SEC or any other Regulatory Authority in connection with
the transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Joint Proxy Statement, when
first mailed to the shareholders of PSHC and Seacoast, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case
of the Joint Proxy Statement or any amendment thereof or
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supplement thereto, at the time of the Shareholders' Meetings, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Shareholders' Meetings.
All documents that any PSHC Entity or any Affiliate thereof is responsible
for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
5.20 Accounting, Tax and Regulatory Matters. No PSHC Entity or any
Affiliate thereof has taken or agreed to take any action or has any
Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the Merger from qualifying for pooling-of-interests accounting
treatment or as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, or (ii) materially impede or delay receipt of
any Consents of Regulatory Authorities referred to in Section 9.1(b) or
result in the imposition of a condition or restriction of the type referred
to in the last sentence of such Section.
5.21 State Takeover Laws. Each PSHC Entity has taken all necessary
action to exempt the transactions contemplated by this Agreement from, or
if necessary to challenge the validity or applicability of, any applicable
"moratorium," "fair price," "business combination," "control share," or
other anti-takeover Laws (collectively, "Takeover Laws").
5.22 Charter Provisions. Each PSHC Entity has taken all action so
that the entering into of this Agreement and the consummation of the Merger
and the other transactions contemplated by this Agreement do not and will
not result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of any PSHC Entity or
restrict or impair the ability of Seacoast or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of any PSHC Entity that may be directly or indirectly acquired or
controlled by them. This Agreement and the transactions contemplated herein
will not trigger any supermajority voting provisions under the Articles of
Incorporation, Bylaws, or other governing instruments of any PSHC Entity.
5.23 Opinion of Financial Advisor. PSHC has received the opinion of
Austin Associates, Inc., dated the date of this Agreement, to the effect
that the consideration to be received in the Merger by the holders of PSHC
Common Stock is fair, from a financial point of view, to such holders, a
signed copy of which has been delivered to Seacoast.
5.24 Board Recommendation. The Board of Directors of PSHC, at a
meeting duly called and held, has by unanimous vote of the directors
present (who constituted all of the directors then in office) (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger, taken together, are fair to and in the best interests
of the shareholders and (ii) resolved to recommend that the holders of the
shares of PSHC Common Stock approve this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SEACOAST
Seacoast hereby represents and warrants to PSHC as follows:
6.1 Organization, Standing, and Power. Seacoast is a corporation duly
organized, validly existing, and in good standing under the Laws of the
State of Florida, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material
Assets. Seacoast is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed
is not reasonably likely to have, individually or in the aggregate, a
Seacoast Material Adverse Effect.
6.2 Authority of Seacoast; No Breach By Agreement. (a) Seacoast has
the corporate power and authority necessary to execute, deliver and perform
its obligations under this Agreement and to
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consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of Seacoast, subject to the approval of the issuance of the shares of
Seacoast Common Stock pursuant to the Merger by sixty-six and two-thirds
percent (66 2/3%) of all and each class of the votes cast at the Seacoast
Shareholders' Meeting (assuming for such purpose that the votes cast in
respect of such proposal represent sixty-six and two-thirds percent
(66 2/3%) of all and each class of the outstanding Seacoast Common Stock
eligible to vote at the Seacoast Shareholders' Meeting), which is the only
shareholder vote required for approval of this Agreement and consummation
of the merger by Seacoast. Subject to such requisite shareholder approval,
this Agreement represents a legal, valid, and binding obligation of
Seacoast, enforceable against Seacoast in accordance with its terms (except
in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion of
the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by Seacoast,
nor the consummation by Seacoast of the transactions contemplated hereby,
nor compliance by Seacoast with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Seacoast's Articles
of Incorporation or Bylaws, or (ii) constitute or result in a Default
under, or require any Consent pursuant to, or result in the creation of any
Lien on any Asset of any Seacoast Entity under, any Contract or Permit of
any Seacoast Entity, where such Default or Lien, or any failure to obtain
such Consent, is reasonably likely to have, individually or in the
aggregate, a Seacoast Material Adverse Effect, or, (iii) subject to receipt
of the requisite Consents referred to in Section 9.1(b), constitute or
result in a Default under, or require any Consent pursuant to, any Law or
Order applicable to any Seacoast Entity or any of their respective material
Assets (including any Seacoast Entity or any PSHC Entity becoming subject
to or liable for the payment of any Tax or any of the Assets owned by any
Seacoast Entity or any PSHC Entity being reassessed or revalued by any
Taxing authority).
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Seacoast Material Adverse Effect,
no notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Seacoast of the Merger and the other
transactions contemplated in this Agreement.
6.3 Capital Stock. (a) The authorized capital stock of Seacoast
consists of (i) 10,000,000 shares of Seacoast Class A Common Stock, of
which 3,903,392 shares are issued and 3,872,500 outstanding as of the date
of this Agreement, (ii) 810,000 shares of $.10 par value Class B Common
Stock, of which 384,638 shares are issued and outstanding as of the date of
this Agreement, and (iii) 1,000,000 shares of Seacoast Preferred Stock,
none of which are issued and outstanding. All of the issued and outstanding
shares of Seacoast Capital Stock are, and all of the shares of Seacoast
Common Stock to be issued in exchange for shares of PSHC Common Stock upon
consummation of the Merger, when issued in accordance with the terms of
this Agreement, will be, duly and validly issued and outstanding and fully
paid and nonassessable. None of the outstanding shares of Seacoast Capital
Stock has been, and none of the shares of Seacoast Common Stock to be
issued in exchange for shares of PSHC Common Stock upon consummation of the
Merger will be, issued in violation of any preemptive rights of the current
or past shareholders of Seacoast.
(b) Except as set forth in Section 6.3(a), or as disclosed in Section
6.3 of the Seacoast Disclosure Memorandum, there are no shares of capital
stock or other equity securities of Seacoast outstanding and no outstanding
Equity Rights relating to the capital stock of Seacoast.
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6.4 Seacoast Subsidiaries. Seacoast has disclosed in Section 6.4 of
the Seacoast Disclosure Memorandum all of the Seacoast Subsidiaries as of
the date of this Agreement that are corporations (identifying its
jurisdiction of incorporation, each jurisdiction in which the character of
its Assets or the nature or conduct of its business requires it to be
qualified and/or licensed to transact business, and the number of shares
owned and percentage ownership interest represented by such share
ownership) and all of the Seacoast Subsidiaries that are general or limited
partnerships or other non-corporate entities (identifying the Law under
which such entity is organized, each jurisdiction in which the character of
its Assets or the nature or conduct of its business requires it to be
qualified and/or licensed to transact business, and the amount and nature
of the ownership interest therein). Except as disclosed in Section 6.4 of
the Seacoast Disclosure Memorandum, Seacoast or one of its wholly-owned
Subsidiaries owns all of the issued and outstanding shares of capital stock
(or other equity interests) of each Seacoast Subsidiary. No capital stock
(or other equity interest) of any Seacoast Subsidiary are or may become
required to be issued (other than to another Seacoast Entity) by reason of
any Equity Rights, and there are no Contracts by which any Seacoast
Subsidiary is bound to issue (other than to another Seacoast Entity)
additional shares of its capital stock (or other equity interests) or
Equity Rights or by which any Seacoast Entity is or may be bound to
transfer any shares of the capital stock (or other equity interests) of any
Seacoast Subsidiary (other than to another Seacoast Entity). There are no
Contracts relating to the rights of any Seacoast Entity to vote or to
dispose of any shares of the capital stock (or other equity interests) of
any Seacoast Subsidiary. All of the shares of capital stock (or other
equity interests) of each Seacoast Subsidiary held by a Seacoast Entity are
fully paid and (except pursuant to 12 USC Section 55 in the case of
national banks and comparable, applicable state Law, if any, in the case of
state depository institutions) nonassessable and are owned by the Seacoast
Entity free and clear of any Lien. Each Seacoast Subsidiary is either a
bank, a savings association, or a corporation, and is duly organized,
validly existing, and (as to corporations) in good standing under the Laws
of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease and operate
its Assets and to carry on its business as now conducted. Each Seacoast
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Seacoast
Material Adverse Effect. Each Seacoast Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or the Savings Association
Insurance Fund.
6.5 SEC Filings; Financial Statements. (a) Seacoast has timely filed
and made available to PSHC all SEC Documents required to be filed by
Seacoast since December 31, 1992 (the "Seacoast SEC Reports"). The Seacoast
SEC Reports (i) at the time filed, complied in all material respects with
the applicable requirements of the Securities Laws and other applicable
Laws and (ii) did not, at the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the
date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in such Seacoast SEC
Reports or necessary in order to make the statements in such Seacoast SEC
Reports, in light of the circumstances under which they were made, not
misleading. Except for Seacoast Subsidiaries that are registered as a
broker, dealer, or investment advisor, no Seacoast Subsidiary is required
to file any SEC Documents.
(b) Each of the Seacoast Financial Statements (including, in each
case, any related notes) contained in the Seacoast SEC Reports, including
any Seacoast SEC Reports filed after the date of this Agreement until the
Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto,
was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to
such financial statements or, in the case of unaudited interim statements,
as permitted by Form 10-Q of the SEC), and fairly presented in all material
respects the consolidated financial position of Seacoast and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal
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and recurring year-end adjustments which were not or are not expected to be
material in amount or effect.
6.6 Absence of Undisclosed Liabilities. No Seacoast Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Seacoast Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Seacoast
as of December 31, 1995 and September 30, 1996, included in the Seacoast
Financial Statements delivered prior to the date of this Agreement or
reflected in the notes thereto. No Seacoast Entity has incurred or paid any
Liability since September 30, 1996, except for such Liabilities incurred or
paid (i) in the ordinary course of business consistent with past business
practice and which are not reasonably likely to have, individually or in
the aggregate, a Seacoast Material Adverse Effect or (ii) in connection
with the transactions contemplated by this Agreement.
6.7 Absence of Certain Changes or Events. Since December 31, 1995,
except as disclosed in the Seacoast Financial Statements delivered prior to
the date of this Agreement or as disclosed in Section 6.7 of the Seacoast
Disclosure Memorandum, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually
or in the aggregate, a Seacoast Material Adverse Effect, and (ii) the
Seacoast Entities have not taken any action, or failed to take any action,
prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material
breach or violation of any of the covenants and agreements of Seacoast
provided in Article 7.
6.8 Certain Environmental and Employee Benefit Matters. (a) To the
Knowledge of Seacoast, each Seacoast Entity, its Participation Facilities
and its Operating Properties, are, and have been, in compliance with all
environmental law, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Seacoast Material Adverse Effect.
(b) Seacoast has delivered or made available to PSHC prior to the
execution hereof, copies or summary plan descriptions of all pension,
retirement, profit/life insurance, deferred compensation, common stock
option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs, arrangements or
agreements, all medical, vision, dental and other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" as that term is defined in
Section 3(3) of ERISA, currently adopted and maintained by, sponsored in
whole or in part by, or contributed to by any Seacoast Entity or ERISA
Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors or other beneficiaries and
under which such employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to participate
(collectively, the "Seacoast Benefit Plans"). All Seacoast Benefit Plans
are in compliance with the applicable terms of ERISA, the Internal Revenue
Code or any other applicable Laws, except for such breaches or violations
the which are not reasonably likely to have individually or in the
aggregate, a Seacoast Material Adverse Effect.
6.9 Allowance for Possible Loan Losses. In the opinion of management
of Seacoast, the Allowance shown on the consolidated balance sheets of
Seacoast included in the most recent Seacoast Financial Statements dated
prior to the date of this Agreement was, and the Allowance shown on the
consolidated balance sheets of Seacoast included in the Seacoast Financial
Statements as of dates subsequent to the execution of this Agreement will
be, as of the dates thereof, adequate (within the meaning of GAAP and
applicable regulatory requirements or guidelines) to provide for all known
or reasonably anticipated losses relating to or inherent in the loan, lease
and securities portfolios (including accrued interest receivables) of the
Seacoast Entities and other extensions of credit (including letters of
credit and commitments to make loans or extend credit) by the Seacoast
Entities as of the dates thereof.
6.10 Assets. (a) Except as disclosed in Section 6.10 of the Seacoast
Disclosure Memorandum or as disclosed or reserved against in the Seacoast
Financial Statements delivered prior to the date of this Agreement, the
Seacoast Entities have good and marketable title, free and clear of all
Liens, to all of their respective Assets, except for any such Liens or
other defects of title which are not reasonably likely
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to have a Seacoast Material Adverse Effect. All tangible properties used in
the businesses of the Seacoast Entities are in good condition, reasonable
wear and tear excepted, and are usable in the ordinary course of business
consistent with Seacoast's past practices.
(b) All Assets which are material to Seacoast's business on a
consolidated basis, held under leases or subleases by any of the Seacoast
Entities, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other
Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceedings may be brought), and each such Contract is in full force
and effect.
(c) The Seacoast Entities currently maintain insurance similar in
amounts, scope and coverage to that maintained by other peer banking
organizations. None of the Seacoast Entities has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased.
There are presently no claims for amounts exceeding in any individual cases
$5,000 or in the aggregate $100,000 pending under such policies of
insurance and no notices have been given by any Seacoast Entity under such
policies.
(d) The Assets of the Seacoast Entities include all assets required to
operate the business of the Seacoast Entities as presently conducted.
6.11 Intellectual Property. Each Seacoast Entity owns or has a
license to use all of the Intellectual Property used by such Seacoast
Entity in the course of its business. Each Seacoast Entity is the owner of
or has a license to any Intellectual Property sold or licensed to a third
party by such Seacoast Entity in connection with such Seacoast Entity's
business operations, and such Seacoast Entity has the right to convey by
sale or license any Intellectual Property so conveyed. No Seacoast Entity
is in Default under any of its Intellectual Property licenses. No
proceedings have been instituted, or are pending or to the Knowledge of
Seacoast threatened, which challenge the rights of any Seacoast Entity with
respect to Intellectual Property used, sold or licensed by such Seacoast
Entity in the course of its business, nor has any person claimed or alleged
any rights to such Intellectual Property. The conduct of the business of
the Seacoast Entities does not infringe any Intellectual Property of any
other person. Except as disclosed in Section 6.11 of the Seacoast
Disclosure Memorandum, no Seacoast Entity is obligated to pay any recurring
royalties to any Person with respect to any such Intellectual Property.
Except as disclosed in Section 6.11 of the Seacoast Disclosure Memorandum,
every officer, director, or employee of any Seacoast Entity is a party to a
Contract which requires such officer, director or employee to assign any
interest in any Intellectual Property to a Seacoast Entity and to keep
confidential any trade secrets, proprietary data, customer information, or
other business information of a Seacoast Entity, and no such officer,
director or employee is party to any Contract with any Person other than a
Seacoast Entity which requires such officer, director or employee to assign
any interest in any Intellectual Property to any Person other than a
Seacoast Entity or to keep confidential any trade secrets, proprietary
data, customer information, or other business information of any Person
other than a Seacoast Entity. Except as disclosed in Section 6.11 of the
Seacoast Disclosure Memorandum, no officer, director or employee of any
Seacoast Entity is party to any Contract which restricts or prohibits such
officer, director or employee from engaging in activities competitive with
any Person, including any Seacoast Entity.
6.12 [Reserved].
6.13 Compliance with Laws. Seacoast is duly registered as a bank
holding company under the BHC Act. Each Seacoast Entity has in effect all
Permits necessary for it to own, lease or operate its material Assets and
to carry on its business as now conducted, except for those Permits the
absence of which are not reasonably likely to have, individually or in the
aggregate, a Seacoast Material Adverse Effect, and there has occurred no
Default under any such Permit, other than Defaults which are not
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reasonably likely to have, individually or in the aggregate, a Seacoast
Material Adverse Effect. Except as disclosed in Section 6.13 of the
Seacoast Disclosure Memorandum, none of the Seacoast Entities:
(a) is in Default under its Articles of Incorporation or Bylaws (or
other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable to
its business or employees conducting its business, except for Defaults
which are not reasonably likely to have, individually or in the
aggregate, a Seacoast Material Adverse Effect; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any Seacoast Entity is not in compliance with any of the
Laws or Orders which such governmental authority or Regulatory Authority
enforces, (ii) threatening to revoke any Permits or (iii) requiring any
Seacoast Entity to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
6.14 Legal Proceedings. There is no Litigation instituted or pending,
or, to the Knowledge of Seacoast, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any Seacoast
Entity or employee benefit plan of any Seacoast Entity, or against any
director or employee of any Seacoast Entity, in their capacity as such, or
against any Asset, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a Seacoast Material
Adverse Effect, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any
Seacoast Entity.
6.15 Reports. Since January 1, 1993, or the date of organization if
later, each Seacoast Entity has filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with Regulatory Authorities (except, in the case of state
securities authorities, failures to file which are not reasonably likely to
have, individually or in the aggregate, a Seacoast Material Adverse
Effect). As of their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its
respective date, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
6.16 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by any Seacoast
Entity or any Affiliate thereof to PSHC pursuant to this Agreement or any
other document, agreement or instrument referred to herein contains or will
contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any Seacoast Entity or any
Affiliate thereof for inclusion in the Registration Statement to be filed
by Seacoast with the SEC, will, when the Registration Statement becomes
effective, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein
not misleading. None of the information supplied or to be supplied by any
Seacoast Entity or any Affiliate thereof for inclusion in the Joint Proxy
Statement to be mailed to each Party's shareholders in connection with the
Shareholders' Meetings, and any other documents to be filed by any Seacoast
Entity or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at
the respective time such documents are filed, and with respect to the Joint
Proxy Statement, when first mailed to the shareholders of PSHC and
Seacoast, be false or misleading with respect to any material fact, or omit
to state any material fact necessary to make the statements therein, in
light of the circumstances under
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which they were made, not misleading, or, in the case of the Joint Proxy
Statement or any amendment thereof or supplement thereto, at the time of
the Shareholders' Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
any proxy for the Shareholders' Meetings. All documents that any Seacoast
Entity or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions
of applicable Law.
6.17 Accounting, Tax and Regulatory Matters. No Seacoast Entity or
any Affiliate thereof has taken or agreed to take any action or has any
Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the Merger from qualifying for pooling-of-interests accounting
treatment or as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, or (ii) materially impede or delay receipt of
any Consents of Regulatory Authorities referred to in Section 9.1(b) or
result in the imposition of a condition or restriction of the type referred
to in the last sentence of such Section. All Tax Returns required to be
filed by or on behalf of any of the Seacoast Entities have been timely
filed or requests for extensions have been timely filed, granted and have
not expired for periods on or before December 31, 1995 and on or before the
day of the most recent fiscal year end immediately preceding the Effective
Time, except to the extent that all such failures to file, taken together,
are not reasonably likely to have a Seacoast Material Adverse Effect and
all such Tax Returns filed are complete and accurate in all material
respects. All Taxes shown on Tax Returns have been paid. As of the date of
this Agreement, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, except as reserved against any
Seacoast Financial Statements delivered prior to the date of this Agreement
or as disclosed in Section 6.17 of the Seacoast Disclosure Memorandum. The
provision for Taxes due or to become due for any of the Seacoast Entities
for the period or periods through and including the day of the respective
Seacoast Financial Statements has been made and is reflected on such
Seacoast Financial Statements is sufficient to cover all such Taxes.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of PSHC. Except as disclosed in Section 7.1 of
the PSHC Disclosure Memorandum with respect to PSNB's proposed Ft. Pierce branch
office, the date of this Agreement until the earlier of the Effective Time or
the termination of this Agreement, unless the prior written consent of Seacoast
shall have been obtained, and except as otherwise expressly contemplated herein,
PSHC shall and shall cause each of its Subsidiaries to operate its business only
in the usual, regular, and ordinary course, and in a manner designed to preserve
intact its business organization and Assets and maintain its rights and
franchises, and shall take no action which would (i) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentences of Section 9.1(b) or 9.1(c), or (ii) adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement. Furthermore, except for the up to $212,000 of credit, heretofore
committed by PSNB and described in the fourth sentence of Section 5.16 hereof,
any loans, leases or extensions of credit secured by real property originated,
purchased or funded in whole or in part by any PSHC Entity, where the obligor
thereon and the real property related thereto are not both located in St. Lucie,
Martin and/or Indian River Counties, Florida (collectively, the "Counties")
shall conform to the FNMA or FHLMC seller/servicer guidelines applicable to such
Loans and shall be immediately saleable to FNMA and/or FHLMC. PSHC and each PSHC
Entity shall immediately terminate and discontinue purchasing, funding or
otherwise extending credit or committing or agreeing to any of the foregoing
with respect to any loans, extensions of credit, leases and/or mortgages or any
participations or other interests therein from any Wholesale Mortgage Business
and/or any Affiliate of such Wholesale Mortgage Business, except to meet PSNB's
contractual obligations under the existing commitments described in the fourth
sentence of Section 5.16 hereof, and except to purchase and hold as temporary
investments, up to $2.5 million at any time of fully-approved FHA and VA Loans
at any time through April 30, 1997.
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7.2 Negative Covenants of PSHC. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of Seacoast shall have been obtained, and except as
otherwise expressly contemplated herein, PSHC covenants and agrees that it will
not do or agree or commit to do, or permit any of its Subsidiaries to do or
agree or commit to do, any of the following:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of any PSHC Entity or, except as expressly contemplated by this
Agreement, or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a PSHC Entity to another PSHC
Entity) in excess of an aggregate of $50,000 (for the PSHC Entities on a
consolidated basis) except in the ordinary course of the business of PSHC
Subsidiaries consistent with past practices (which shall include, for PSHC
Subsidiaries that are depository institutions, creation of deposit
liabilities, purchases of federal funds, advances from the Federal Reserve
Bank or Federal Home Loan Bank, and entry into repurchase agreements fully
secured by U.S. government or agency securities), or impose, or suffer the
imposition, on any Asset of any PSHC Entity of any Lien or permit any such
Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts
established in the ordinary course of business, the satisfaction of legal
requirements in the exercise of trust powers, and Liens in effect as of the
date hereof that are disclosed in the PSHC Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any PSHC Entity, or declare or pay any dividend or
make any other distribution in respect of PSHC's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of stock
options or warrants or warrants outstanding as of the date hereof and
pursuant to the terms thereof in existence on the date hereof, or as
disclosed in Section 7.2(d) of the PSHC Disclosure Memorandum, issue, sell,
pledge, encumber, authorize the issuance of, enter into any Contract to
issue, sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of PSHC Common Stock or
any other capital stock of any PSHC Entity, or any stock appreciation
rights, or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of any PSHC
Entity or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of PSHC Common Stock, or sell,
lease, mortgage or otherwise dispose of or otherwise encumber (x) any
shares of capital stock of any PSHC Subsidiary (unless any such shares of
stock are sold or otherwise transferred to another PSHC Entity) or (y) any
Asset having a book value in excess of $50,000 other than in the ordinary
course of business for reasonable and adequate consideration; or
(f) (1) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of one
year or less, purchase any securities or make any material investment,
either by purchase of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a wholly
owned PSHC Subsidiary, or otherwise acquire direct or indirect control over
any Person, other than in connection with (i) foreclosures in the ordinary
course of business, (ii) acquisitions of control by a depository
institution subsidiary solely in its fiduciary capacity, or (iii) the
creation of new wholly owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; (2) make any new loans or
extensions of credit or renew, extend or renegotiate any existing loans or
extensions of credit (i) with respect to properties or businesses outside
of the Counties or to borrowers whose principal residence is outside of the
Counties, (ii) that are unsecured in excess of $100,000, or (iii) that are
secured in excess of $250,000; (3) purchase or sell (except for sales of
single family residential first mortgage loans in the ordinary course of
PSHC's business for fair market value) any whole loans, leases, mortgages
or any loan participations or agented credits or other interest therein,
(4) renew or renegotiate any loans or credits that are on any watch list
and/or are classified or special mentioned or take any similar actions with
respect to collateral held with
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respect to debts previously contracted or other real estate owned, except
pursuant to safe and sound banking practices and with prior disclosure to
First National; provided, however, that PSHC may, without the prior notice
to or written consent of First National, renew or extend existing credits
on substantially similar terms and conditions as present at the time such
credit was made or last extended, renewed or modified, for a period not to
exceed one year and at rates not less than market rates for comparable
credits and transactions and without any release of any collateral except
as any PSHC Entity is presently obligated under existing written agreements
kept as part of such PSHC Entity's official records. If any PSHC Entity
makes, extends, renews, renegotiates, compromises or settles any loans or
extensions of credit or releases any collateral therefore that are subject
to the prior disclosure to First National hereunder and First National has
objected thereto the Purchase Price shall be reduced on a dollar for dollar
basis in an amount equal to all outstanding principal of, all accrued but
unpaid interest and other charges on such loan(s) as of the Closing Date;
or
(g) grant any increase in compensation or benefits to the employees or
officers of any PSHC Entity, except in accordance with past practice
disclosed in Section 7.2(g) of the PSHC Disclosure Memorandum or as
required by Law; pay any severance or termination pay or any bonus other
than pursuant to written policies or written Contracts in effect on the
date of this Agreement and disclosed in Section 7.2(g) of the PSHC
Disclosure Memorandum; and enter into or amend any severance agreements
with officers of any PSHC Entity; grant any material increase in fees or
other increases in compensation or other benefits to directors of any PSHC
Entity except in accordance with past practice disclosed in Section 7.2(g)
of the PSHC Disclosure Memorandum; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee benefits or
other Equity Rights; or
(h) enter into or amend any employment Contract between any PSHC
Entity and any Person (unless such amendment is required by Law) that the
PSHC Entity does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered), at any time
on or after the Effective Time; or
(i) adopt any new employee benefit plan of any PSHC Entity or
terminate or withdraw from, or make any material change in or to, any
existing employee benefit plans of any PSHC Entity other than any such
change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan, or make any distributions from such employee benefit plans, except as
required by Law, the terms of such plans or consistent with past practice;
or
(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any PSHC Entity
for material money damages or restrictions upon the operations of any PSHC
Entity; or
(l) except in the ordinary course of business and as expressly
permitted in Section 7.2(f), enter into, modify, amend or terminate any
material Contract (including any loan Contract with an unpaid balance or
any Contract calling for payments exceeding $100,000) or waive, release,
compromise or assign any material rights or claims.
7.3 Covenants of Seacoast. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of PSHC shall have been obtained, and except as otherwise
expressly contemplated herein, Seacoast covenants and agrees that it shall (a)
continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment, to enhance the long-term value of
the Seacoast Capital Stock and the business prospects of the Seacoast Entities
and to the extent consistent therewith use all reasonable efforts to preserve
intact the Seacoast Entities' core businesses and goodwill with their respective
employees and the communities they serve, and (b) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in
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the last sentences of Section 9.1(b) or 9.1(c), or (ii) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement; provided, that the foregoing shall not prevent any Seacoast
Entity from acquiring any Assets or other businesses or from discontinuing or
disposing of any of its Assets or business if such action is, in the judgment of
Seacoast, desirable in the conduct of the business of Seacoast and its
Subsidiaries. Seacoast further covenants and agrees that it will not, without
the prior written consent of PSHC, which consent shall not be unreasonably
withheld, amend the Articles of Incorporation or Bylaws of Seacoast, in each
case, in any manner adverse to the holders of PSHC Common Stock as compared to
rights of holders of Seacoast Common Stock generally as of the date of this
Agreement.
7.4 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a PSHC Material Adverse Effect or a Seacoast Material Adverse Effect,
as applicable, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present in all material respects the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material). As of their respective dates, such reports filed with the SEC will
comply in all material respects with the Securities Laws and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder Approval. As soon
as reasonably practicable after execution of this Agreement, at a date
determined by Seacoast in its sole discretion, Seacoast shall prepare and file
the Registration Statement with the SEC, and shall use its reasonable efforts to
cause the Registration Statement to become effective under the 1933 Act and take
any action required to be taken under the applicable state Blue Sky or
securities Laws in connection with the issuance of the shares of Seacoast Common
Stock upon consummation of the Merger. PSHC shall cooperate in the preparation
and filing of the Registration Statement and shall furnish all information
concerning it and the holders of its capital stock as Seacoast may reasonably
request in connection with such action. PSHC shall call a Shareholders' Meeting,
to be held as soon as reasonably practicable after the Registration Statement is
declared effective by the SEC, for the purpose of voting upon approval of this
Agreement and such other related matters as it deems appropriate. Seacoast shall
call a Shareholders' Meeting, to be held as soon as reasonably practicable after
the Registration Statement is declared effective by the SEC, for the purpose of
voting upon the issuance of shares of Seacoast Common Stock pursuant to the
Merger and such other related matters as it deems appropriate. In connection
with the Shareholders' Meetings, (i) PSHC and Seacoast shall prepare and file
with the SEC a Joint Proxy Statement and mail such Joint Proxy Statement to
their respective shareholders, (ii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in connection with
such Joint Proxy Statement, (iii) the Board of Directors of PSHC and Seacoast
shall recommend to their respective shareholders the approval of the matters
submitted for approval, and (iv) the Board of Directors and officers of PSHC and
Seacoast shall use their reasonable efforts to obtain such shareholders'
approval. Seacoast and PSHC shall make all necessary filings with respect to the
Merger under the Securities Laws.
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8.2 Nasdaq Listing. Seacoast shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Seacoast Common Stock to be issued to the holders of PSHC Common Stock pursuant
to the Merger, and Seacoast shall give all notices and make all filings with the
NASD required in connection with the transactions contemplated herein.
8.3 Applications. Seacoast shall promptly prepare and file, and PSHC shall
cooperate in the preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement. The Parties shall
deliver to each other copies of all filings, correspondence and orders to and
from all Regulatory Authorities in connection with the transactions contemplated
hereby.
8.4 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, Seacoast shall execute and file the Articles of
Merger with the Secretary of State of the State of Florida in connection with
the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.6 Investigation and Confidentiality. (a) Prior to the Effective Time,
each Party shall keep the other Party advised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Party.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreement, which are hereby reaffirmed and adopted, and
incorporated by reference herein each Party shall, and shall cause its advisers
and agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. In the event that a Party is required by
applicable law or valid court process to disclose any such confidential
information then such Party shall provide the other Party with prompt written
notice of any such requirement so that the other Party may seek a protective
order or other appropriate remedy and/or waive compliance with this Section 8.6.
If in the absence of a protective order or other remedy or the receipt of a
waiver by the other Party, a Party is nonetheless, in the written opinion of
counsel, legally compelled to disclose any such confidential information to any
tribunal or else stand liable for contempt or suffer other censure or penalty, a
Party may, without liability hereunder, disclose to such tribunal only that
portion of the confidential information which such counsel advises such Party is
legally required to be disclosed, provided that such disclosing Party use its
best efforts to preserve the confidentiality of such confidential information,
including without limitation, by cooperating with the other Party to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded such confidential information by such tribunal. If
this Agreement is terminated prior to the Effective Time, each Party shall
promptly return or certify the destruction of all documents and copies thereof,
and all work papers containing confidential information received from the other
Party.
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(c) PSHC shall use its reasonable efforts to exercise its rights under
confidentiality agreements entered into with Persons, if any, which were
considering an Acquisition Proposal with respect to PSHC to preserve the
confidentiality of the information relating to the PSHC Entities provided to
such Persons and their Affiliates and Representatives.
(d) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant or agreement of the other Party or which
has had or is reasonably likely to have a PSHC Material Adverse Effect or a
Seacoast Material Adverse Effect, as applicable.
8.7 Press Releases. Prior to the Effective Time, PSHC and Seacoast shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no PSHC Entity nor any Affiliate thereof nor
any Representatives thereof retained by any PSHC Entity shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
the Board of Directors of PSHC, after having consulted with and considered the
advice of outside counsel, reasonably determines in good faith that the failure
to take such actions would constitute a breach of fiduciary duties of the
members of such Board of Directors to PSHC's shareholder under applicable law,
no PSHC Entity or any Affiliate or Representative thereof shall furnish any
non-public information that it is not legally obligated to furnish, negotiate
with respect to, or enter into any Contract with respect to, any Acquisition
Proposal, but PSHC may communicate information about such an Acquisition
Proposal to its shareholders if and to the extent that it is required to do so
in order to comply with its legal obligations. PSHC shall promptly advise
Seacoast following the receipt of any Acquisition Proposal and the details
thereof, and advise Seacoast of any developments with respect to such
Acquisition Proposal promptly upon the occurrence thereof. PSHC shall (i)
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) direct and use its reasonable efforts to cause
all of its Affiliates and Representatives not to engage in any of the foregoing.
8.9 Accounting and Tax Treatment. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to use its
reasonable efforts to take no action which would cause the Merger not, to
qualify for treatment as a pooling of interests for accounting purposes or as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code for federal income tax purposes.
8.10 State Takeover Laws. Each PSHC Entity and each PSHC shareholder shall
take the necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable Takeover Law, including the FBCA.
8.11 Charter Provisions. Except as required by applicable Law or as
otherwise provided in this Agreement, each PSHC Entity shall take all necessary
action to ensure that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of any PSHC Entity or
restrict or impair the ability of Seacoast or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a shareholder with respect to, shares of
any PSHC Entity that may be directly or indirectly acquired or controlled by
them.
8.12 PSHC Meetings. Each PSHC Entity shall give prior notice of each
meeting or proposed action by any of their respective Boards of Directors and/or
committees, including a description of any matters to be discussed and/or acted
upon, and shall permit a representative of Seacoast to attend each such meeting,
except during discussions relating to the transactions contemplated herein that
present conflict of interest and/or confidentiality issues.
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8.13 Agreement of Affiliates. PSHC has disclosed in Section 8.13 of the
PSHC Disclosure Memorandum all Persons whom it reasonably believes is an
"affiliate" of PSHC for purposes of Rule 145 under the 1933 Act. PSHC shall use
its reasonable efforts to cause each such Person to deliver to Seacoast upon the
execution of this Agreement a written agreement, substantially in the form of
Exhibit 2, providing that such Person will not sell, pledge, transfer, or
otherwise dispose of the shares of PSHC Common Stock held by such Person except
as contemplated by such agreement or by this Agreement and will not sell,
pledge, transfer, or otherwise dispose of the shares of Seacoast Common Stock to
be received by such Person upon consummation of the Merger except in compliance
with applicable provisions of the 1933 Act and the rules and regulations
thereunder and, until such time as financial results covering at least 30 days
of combined operations of Seacoast and PSHC have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies. Shares of Seacoast Common Stock issued to such affiliates of PSHC in
exchange for shares of PSHC Common Stock shall not be transferable until such
time as financial results covering at least 30 days of combined operations of
Seacoast and PSHC have been published within the meaning of Section 201.01 of
the SEC's Codification of Financial Reporting Policies, regardless of whether
each such affiliate has provided the written agreement referred to in this
Section 8.13 (and Seacoast shall be entitled to place restrictive legends upon
certificates for shares of Seacoast Common Stock issued to affiliates of PSHC
pursuant to this Agreement to enforce the provisions of this Section 8.13;
provided that Seacoast removes such legends at the appropriate time). Seacoast
shall not be required to maintain the effectiveness of the Registration
Statement under the 1933 Act for the purposes of resale of Seacoast Common Stock
by such affiliates.
8.14 Employee Benefits and Contracts. (a) Following the Effective Time,
Seacoast shall provide generally to officers and employees of the PSHC Entities
employee benefits under employee benefit and welfare plans (other than stock
option or other plans involving the potential issuance of Seacoast Common
Stock), on terms and conditions which when taken as a whole are substantially
similar to those currently provided by the Seacoast Entities to their similarly
situated officers and employees; provided, that, for a period of 12 months after
the Effective Time, Seacoast shall provide generally to officers and employees
of PSHC Entities severance benefits in accordance with the policies of either
(i) PSHC as disclosed in Section 8.14 of the PSHC Disclosure Memorandum, or (ii)
Seacoast, whichever of (i) or (ii) will provide the greater benefit to the
officer or employee. Seacoast shall waive any pre-existing condition exclusion
under any employee health plan for which any employees and/or officers and
dependents covered by PSHC plans as of Closing of the PSHC Entities shall become
eligible by virtue of the preceding sentence, to the extent (i) such pre-
existing condition was covered under the corresponding plan maintained by the
PSHC Entity and (ii) the individual affected by the pre-existing condition was
covered by the PSHC Entity's corresponding plan on the date which immediately
precedes the Effective Time, provided that PSHC has disclosed in Section 8.14 of
the PSHC Disclosure Memorandum and at Closing that none of its employees,
officers or other participants or their respective dependents, to the best of
PSHC and PSNB's knowledge and belief, have any long-term disabilities or
conditions, which in the reasonable judgment of Seacoast would materially
adversely affect the claims experience and/or costs of any employee benefit plan
or insurance maintained by or through any Seacoast Entity. For purposes of
participation, vesting and (except in the case of Seacoast retirement plans)
benefit accrual under Seacoast's employee benefit plans, the service of the
employees of the PSHC Entities prior to the Effective Time shall be treated as
service with a Seacoast Entity participating in such employee benefit plans.
Seacoast also shall cause the Surviving Corporation and its Subsidiaries to
honor in accordance with their terms all employment, severance, consulting and
other compensation Contracts disclosed in Section 8.14 of the PSHC Disclosure
Memorandum to Seacoast between any PSHC Entity and any current or former
director, officer, or employee thereof, and all provisions for vested benefits
or other vested amounts earned or accrued through the Effective Time under the
PSHC Benefit Plans.
(b) Upon the execution hereof, a mutually acceptable employment agreement
between J. Hal Roberts, Jr. and Seacoast or First National shall be executed and
delivered, and which shall become effective at the Effective Time.
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(c) Subject to compliance with applicable Laws and the absence of any
Material Adverse Effects upon Seacoast or any PSHC Benefit Plans and/or Seacoast
Benefit Plans, Seacoast intends to merge the PSHC 401(k) Plan with the Seacoast
401(k) Plan.
(d) Effective upon the Effective Time, PSHC and, as applicable, its
Subsidiaries shall terminate, their Employee Non-Qualified Stock Investment Plan
and Trust of Port St. Lucie National Bank and the Deferred Compensation Plan
offered to Directors. Such termination and the effects thereof shall be in
accordance with Section 5.15(h) hereof
8.15 Indemnification. (a) With respect to all claims brought during the
period of four years after the Effective Time, Seacoast shall indemnify, defend
and hold harmless the present and former directors, officers, employees and
agents of the PSHC Entities (each, an "Indemnified Party") against all
Liabilities arising out of actions or omissions arising out of the Indemnified
Party's service or services as directors, officers, employees or agents of PSHC
or, at PSHC's request, of another corporation, partnership, joint venture, trust
or other enterprise occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement) to the fullest extent permitted
under Florida Law and by PSHC's Articles of Incorporation and Bylaws as in
effect on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any Litigation and whether or not any Seacoast Entity
is insured against any such matter. Without limiting the foregoing, in any case
in which approval by the Surviving Corporation is required to effectuate any
indemnification, the Surviving Corporation shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Seacoast and the Indemnified
Party.
(b) Seacoast shall, to the extent available, (and PSHC shall cooperate
prior to the Effective Time in these efforts) maintain in effect for a period of
two years after the Effective Time PSHC's existing directors' and officers'
liability insurance policy (provided that Seacoast may substitute therefor (i)
policies of at least the same coverage and amounts containing terms and
conditions which are substantially no less advantageous or (ii) with the consent
of PSHC given prior to the Effective Time, any other policy) with respect to
claims arising from facts or events which occurred prior to the Effective Time
and covering persons who are currently covered by such insurance; provided, that
Seacoast shall not be obligated to make aggregate premium payments for such
two-year period in respect of such policy (or coverage replacing such policy)
which exceed, for the portion related to PSHC's directors and officers, 150% of
the annual premium payments on PSHC's current policy in effect as of the date of
this Agreement (the "Maximum Amount").
(c) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 8.15, upon learning of any such Liability or Litigation,
shall promptly notify Seacoast thereof. In the event of any such Litigation
(whether arising before or after the Effective Time), (i) the Surviving
Corporation shall have the right to assume the defense thereof and the Surviving
Corporation shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if the
Surviving Corporation elects not to assume such defense or counsel for the
Indemnified Parties advises that there are substantive issues which raise
conflicts of interest between the Surviving Corporation and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
the Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, that the Surviving Corporation shall be obligated pursuant
to this paragraph (c) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction, (ii) the Indemnified Parties will cooperate in the
defense of any such Litigation, and (iii) the Surviving Corporation shall not be
liable for any settlement effected without its prior written consent; and
provided further that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
8.16 Certain Policies of PSHC. Seacoast and PSHC shall consult with
respect to their respective loan, litigation and real estate valuation policies
and practices (including loan classifications and levels of reserves) and PSHC
shall make such modification or changes to its policies and practices, if any,
prior to the Effective
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Time as may be mutually agreed upon. Seacoast and PSHC also shall consult with
respect to the character, amount and timing of restructuring and Merger-related
expense charges to be taken by each of the Parties in connection with the
transactions contemplated by this Agreement and shall take such charges in
accordance with GAAP, prior to the Effective Time, as may be mutually agreed
upon by the Parties. Neither Party's representations, warranties, covenants or
agreements contained in this Agreement shall be deemed to be inaccurate or
breached in any respect as a consequence of any modifications or charges
undertaken solely on account of this Section 8.16.
8.17 Nomination and Election of Directors. Seacoast shall as soon as
practicable following the Effective Time nominate and use its best efforts to
cause to be elected to the Seacoast and First National Board of Directors two
candidates from the current PSHC Board of Directors. In addition, Seacoast shall
cause First National to amend its Bylaws as soon as practicable following the
Effective Time to provide for one or more First National Advisory Boards,
including an First National Advisory Board for Port St. Lucie County. Seacoast
shall cause each of the current directors of PSHC (other than such PSHC and/or
PSNB directors who are elected as directors of Seacoast and/or First National)
to be nominated and elected to the First National Advisory Board for St. Lucie
County as soon as practicable after such Advisory Board is constituted according
to the preceding sentence.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations of
each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6:
(a) Shareholder Approval. The shareholders of PSHC shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by
Law, by the provisions of any governing instruments, or by the rules of the
NASD. The shareholders of Seacoast shall have approved the issuance of
shares of Seacoast Common Stock pursuant to the Merger, as and to the
extent required by Law, by the provisions of any governing instruments, or
by the rules of the NASD.
(b) Regulatory Approvals. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (including requirements relating to
the raising of additional capital or the disposition of Assets) which in
the reasonable judgment of the Board of Directors of Seacoast would so
materially adversely affect the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment,
have entered into this Agreement.
(c) Consents and Approvals. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b)) or for the preventing of any Default under
any Contract or Permit of such Party which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a PSHC
Material Adverse Effect or a Seacoast Material Adverse Effect, as
applicable. No Consent so obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a
manner which in the reasonable judgment of the Board of Directors of
Seacoast would so materially adversely affect the economic or business
benefits of the transactions contemplated by this Agreement that, had such
condition or requirement been known, such Party would not, in its
reasonable judgment, have entered into this Agreement.
(d) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
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preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the transactions contemplated by
this Agreement.
(e) Registration Statement. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been initiated and be continuing, and all necessary approvals
under state securities Laws or the 1933 Act or 1934 Act relating to the
issuance or trading of the shares of Seacoast Common Stock issuable
pursuant to the Merger shall have been received.
(f) Share Listing. The shares of Seacoast Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
National Market.
(g) Pooling Letters. Each of the Parties shall have received letters,
dated as of the date of filing of the Registration Statement with the SEC
and as of the Effective Time, addressed to Seacoast, in form and substance
reasonably acceptable to Seacoast, from Arthur Andersen LLP to the effect
that the Merger will qualify for pooling-of-interests accounting treatment.
Each of the Parties also shall have received letters, dated as of the date
of filing of the Registration Statement with the SEC and as of the
Effective Time, addressed to Seacoast, in form and substance reasonably
acceptable to Seacoast, from KPMG Peat Marwick to the effect that such firm
is not aware of any matters relating to PSHC and its Subsidiaries which
would preclude the Merger from qualifying for pooling-of-interests
accounting treatment.
(h) Tax Matters. Each Party shall have received a written opinion of
counsel from Alston & Bird, in form reasonably satisfactory to such Parties
(the "Tax Opinion"), to the effect that (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, (ii) the exchange in the Merger of PSHC Common Stock for Seacoast
Common Stock will not give rise to gain or loss to the shareholders of PSHC
with respect to such exchange (except to the extent of any cash received),
and (iii) none of PSHC or Seacoast will recognize gain or loss as a
consequence of the Merger (except for amounts resulting from any required
change in accounting methods and any income and deferred gain recognized
pursuant to Treasury regulations issued under Section 1502 of the Internal
Revenue Code). In rendering such Tax Opinion, such counsel shall be
entitled to rely upon representations of officers of PSHC and Seacoast
reasonably satisfactory in form and substance to such counsel.
9.2 Conditions to Obligations of Seacoast. The obligations of Seacoast to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Seacoast pursuant to Section 11.6(a):
(a) Representations and Warranties. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of PSHC set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties set forth in Section 5.3, 5.20, 5.21, and 5.22 shall be true and
correct (except for inaccuracies which are de minimus in amount). There
shall not exist inaccuracies in the representations and warranties of PSHC
set forth in this Agreement (including the representations and warranties
set forth in Sections 5.3, 5.20, 5.21, and 5.22) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a PSHC
Material Adverse Effect; provided that, for purposes of this sentence only,
those representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" or to the "Knowledge" of any Person
shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of PSHC to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with.
(c) Certificates. PSHC shall have delivered to Seacoast (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that
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the conditions set forth in Section 9.1 as relates to PSHC and in Section
9.2(a) and 9.2(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by PSHC's Board of Directors and shareholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, all in such reasonable detail as
Seacoast and its counsel shall request.
(d) Opinion of Counsel. Seacoast shall have received an opinion of
Gunster, Yoakley, Valdes-Fauli & Stewart, P.A, counsel to PSHC, dated as of
the Closing, in form reasonably satisfactory to Seacoast, as to the matters
set forth in Exhibit 3.
(e) Accountant's Letters. Seacoast shall have received from KPMG Peat
Marwick letters dated not more than five days prior to (i) the date of the
Joint Proxy Statement and (ii) the Effective Time, with respect to certain
financial information regarding PSHC, in form and substance reasonably
satisfactory to Seacoast, which letters shall be based upon customary
specified procedures undertaken by such firm in accordance with Statement
of Auditing Standard Nos. 71, 72 and 75.
(f) Affiliates' Agreements. Seacoast shall have received from each
affiliate of PSHC the affiliates letter referred to in Section 8.13, to the
extent necessary to assure in the reasonable judgment of Seacoast that the
transactions contemplated hereby will qualify for pooling-of-interests
accounting treatment.
(g) Shareholders' Equity. PSHC's shareholders' equity as of the
Closing shall not be less than PSHC's shareholders' equity as of December
31, 1996, excluding for purposes of the calculation of such shareholders'
equity the effects of (i) all costs, fees and charges, including fees and
charges of PSHC's accountants, counsel and financial advisors, whether or
not accrued or paid, that are related to the transactions contemplated by
this Agreement not to exceed $200,000 in the aggregate, (ii) all net
charges resulting from the application of FASB Statement No. 115 with
respect to unrealized securities gains and losses, and (iii) any reductions
in PSHC's shareholders' equity resulting from any actions or changes in
policies of PSHC taken at the request of Seacoast, including those
described in Section 8.16 and (iv) the effect on or after the Effective
Time, as Seacoast may determine, of the PSHC and/or PSNB data processing
agreements as shown in Section 9.2(g) of the PSHC Disclosure Memorandum.
(h) Director's Agreements. Seacoast shall have received from each
director of PSHC the Director's Agreement set forth hereto at Exhibit 4.
(i) Claims Letter. Seacoast shall have received from each director
and officer of PSHC the Claims Letter set forth hereto at Exhibit 5.
9.3 Conditions to Obligations of PSHC. The obligations of PSHC to perform
this Agreement and consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by PSHC pursuant to Section 11.6(b):
(a) Representations and Warranties. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of Seacoast set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). There shall not exist
inaccuracies in the representations and warranties of Seacoast set forth in
this Agreement such that the aggregate effect of such inaccuracies has, or
is reasonably likely to have, a Seacoast Material Adverse Effect; provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material" or "Material
Adverse Effect" or to the "Knowledge" of any Person shall be deemed not to
include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of Seacoast to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
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(c) Certificates. Seacoast shall have delivered to PSHC (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Seacoast and in
Section 9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by Seacoast's Board of Directors and shareholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, all in such reasonable detail as
PSHC and its counsel shall request.
(d) Opinion of Counsel. PSHC shall have received an opinion of Alston
& Bird, counsel to Seacoast, dated as of the Effective Time, in form
reasonably acceptable to PSHC, as to the matters set forth in Exhibit 6.
(e) Fairness Opinion. PSHC shall have received from Austin
Associates, Inc. a letter, dated not more than five business days prior to
the date of the Proxy Statement, to the effect that, in the opinion of such
firm, the consideration to be received by PSHC shareholders in connection
with the Merger is fair, from a financial point of view, to such
shareholders.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the shareholders of PSHC
and Seacoast or both, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of Seacoast and PSHC; or
(b) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a breach by the
other Party of any representation or warranty contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach and which breach is
reasonably likely, in the opinion of the non-breaching Party, to have,
individually or in the aggregate, a PSHC Material Adverse Effect or a
Seacoast Material Adverse Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by
the other Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event (i) any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
shareholders of PSHC or Seacoast fail to vote their approval of the matters
relating to this Agreement and the transactions contemplated hereby at the
Shareholders' Meetings where such matters were presented to such
shareholders for approval and voted upon; or
(e) By either Party in the event that the Merger shall not have been
consummated by August 31, 1997, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by
any breach of this Agreement by the Party electing to terminate pursuant to
this Section 10.1(e); or
(f) By either Party (provided that the terminating Party is not then
in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event that
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any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e); or
(g) By Seacoast, in the event that the Board of Directors of PSHC
shall have failed to reaffirm its approval of the Merger and the
transactions contemplated by this Agreement (to the exclusion of any other
Acquisition Proposal), or shall have resolved not to reaffirm the Merger,
or shall have affirmed, recommended or authorized entering into any other
Acquisition Proposal or other transaction involving a merger, share
exchange, consolidation or transfer of substantially all of the Assets of
PSHC.
(h) By PSHC in the event that the Purchase Price Per Share shall be less
than $24.62.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Sections 8.6(b) and 8.7 shall survive any such
termination and abandonment, and (ii) a termination pursuant to Sections
10.1(b), 10.1(c) or 10.1(f) shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation, warranty, covenant, or
agreement giving rise to such termination.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.7, 8.13, 8.14, 8.15 and 8.17.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. (a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Acquisition Proposal" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving the
acquisition of such Party or any of its Subsidiaries or the acquisition of
a substantial equity interest in, or a substantial portion of the assets
of, such Party or any of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"Agreement" shall mean this Agreement and Plan of Merger, including
the Exhibits delivered pursuant hereto and incorporated herein by
reference.
"Articles of Merger" shall mean the Articles of Merger to be executed
by Seacoast and filed with the Secretary of State of the State of Florida
relating to the Merger as contemplated by Section 1.1.
"Assets" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"Closing Date" shall mean the date on which the Closing occurs.
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"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement, dated May 10, 1996, between PSHC and Seacoast.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets or business.
"Default" shall mean (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit,
(ii) any occurrence of any event that with the passage of time or the
giving of notice or both would constitute a breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right of any
Person to exercise any remedy or obtain any relief under, terminate or
revoke, suspend, cancel, or modify or change the current terms of, or
renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or
Permit.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"Equity Rights" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for, shares of
the capital stock of a Person or by which a Person is or may be bound to
issue additional shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exhibits" 1 through 6, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation
"FNMA" shall mean the Federal National Mortgage Association.
"FBCA" shall mean the Florida Business Corporation Act.
"First National" shall mean First National Bank & Trust Company of the
Treasure Coast, a national banking association and a Seacoast Subsidiary.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and
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specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.
"HSR Act" shall mean Section 7A of the Clayton Act, as added by Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
"Intellectual Property" shall mean copyrights, patents, trademarks,
service marks, service names, trade names, applications therefor,
technology rights and licenses, computer software (including any source or
object codes therefor or documentation relating thereto), trade secrets,
franchises, know-how, inventions, and other intellectual property rights.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"Joint Proxy Statement" shall mean the proxy statement used by PSHC
and Seacoast to solicit the approval of their respective shareholders of
the transactions contemplated by this Agreement, which shall include the
prospectus of Seacoast relating to the issuance of the Seacoast Common
Stock to holders of PSHC Common Stock.
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts that
are known or should reasonably have been known after due inquiry by the
chairman, president, chief financial officer, chief accounting officer,
chief operating officer, chief credit officer, general counsel, any
assistant or deputy general counsel, or any senior, executive or other vice
president of such Person and the knowledge of any such persons obtained or
which would have been obtained from a reasonable investigation.
"Law" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including
costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, (ii) for depository institution Subsidiaries
of a Party, pledges to secure deposits and other Liens incurred in the
ordinary course of the banking business, (iii) Liens which do not
materially impair the use of or title to the Assets subject to such Lien,
and which are disclosed in Section 11.1 of the PSHC Disclosure Memorandum
or Seacoast Disclosure Memorandum, as applicable.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental or other examination
or investigation, hearing, administrative or other proceeding relating to
or affecting a Party, its business, its Assets (including Contracts related
to it), or the transactions contemplated by this Agreement, but shall not
include regular, periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"Material" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.
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"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq National Market" shall mean the National Market System of the
National Association of Securities Dealers Automated Quotations System.
"Operating Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in which
such Party or Subsidiary holds a security interest or other interest
(including an interest in a fiduciary capacity), and, where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such
facility or property.
"Party" shall mean either PSHC or Seacoast, and "Parties" shall mean
both PSHC and Seacoast.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets, or business.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"PSHC Common Stock" shall mean the $0.01 par value common stock of
PSHC.
"PSHC Disclosure Memorandum" shall mean the written information
entitled "Port St. Lucie National Bank Holding Corp. Disclosure Memorandum"
delivered prior to the date of this Agreement to Seacoast describing in
reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information disclosed
with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect
thereto.
"PSHC Entities" shall mean, collectively, PSHC and all PSHC
Subsidiaries.
"PSHC Financial Statements" shall mean (i) the consolidated statements
of condition (including related notes and schedules, if any) of PSHC as of
September 30, 1996, and as of December 31,1995 and 1994, and the related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the nine months ended
September 30, 1996, and for each of the three fiscal years ended December
31,1995, 1994 and 1993, as filed by PSHC in SEC Documents, and (ii) the
consolidated statements of condition of PSHC (including related notes and
schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to September 30, 1996.
"PSHC Material Adverse Effect" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of PSHC and its Subsidiaries, taken as a
whole, or (ii) the ability of PSHC to perform its obligations under this
Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by courts
or governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting principles generally applicable to
banks and their holding companies, (c) actions and omissions of PSHC (or
any of its Subsidiaries) taken with the prior informed
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written Consent of Seacoast in contemplation of the transactions
contemplated hereby, and (d) the direct effects of compliance with this
Agreement on the operating performance of PSHC, including expenses incurred
by PSHC in consummating the transactions contemplated by this Agreement.
"PSHC Stock Plans" shall mean the existing stock option, stock
purchase and other stock-based plans of PSHC.
"PSHC Subsidiaries" shall mean the Subsidiaries of PSHC, which shall
include the PSHC Subsidiaries described in Section 5.4 and any corporation,
bank, savings association, or other organization acquired as a Subsidiary
of PSHC in the future and held as a Subsidiary by PSHC at the Effective
Time.
"PSN Bank" shall mean Port St. Lucie National Bank, a national banking
association and a PSHC Subsidiary.
"Purchase Price Per Share" shall mean (i) the sum of (x) the average
of the closing prices on the Nasdaq National Market as reported by The Wall
Street Journal of Seacoast Common Stock for the 20 trading days preceding
the fifth trading day preceding the Closing Date (the "Seacoast Stock
Price") multiplied by 900,000 and (y) 1,242,953 (ii) divided by the number
of shares of PSHC Common Stock plus the number of shares of PSHC Common
Stock subject to PSHC Options, including PSHC Warrants, outstanding at the
Effective Time.
"Registration Statement" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Seacoast under the 1933 Act with respect to the shares of Seacoast Common
Stock to be issued to the shareholders of PSHC in connection with the
transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the SEC, the NASD,
the Federal Trade Commission, the United States Department of Justice, the
Board of the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, and
all other federal, state, county, local or other governmental or regulatory
agencies, authorities (including self-regulatory authorities),
instrumentalities, commissions, boards or bodies having jurisdiction over
the Parties and their respective Subsidiaries.
"Representative" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative engaged by a
Person.
"Seacoast Capital Stock" shall mean, collectively, the Seacoast Common
Stock, the Seacoast Preferred Stock and any other class or series of
capital stock of Seacoast.
"Seacoast Common Stock" shall mean the $0.10 par value Class A common
stock of Seacoast.
"Seacoast Disclosure Memorandum" shall mean the written information
entitled "Seacoast Banking Corporation of Florida Disclosure Memorandum"
delivered prior to the date of this Agreement to PSHC describing in
reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information disclosed
with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect
thereto.
"Seacoast Entities" shall mean, collectively, Seacoast and all
Seacoast Subsidiaries.
"Seacoast Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Seacoast as of September 30, 1996, and as of December 31, 1995 and 1994,
and the related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for the nine
months ended September 30, 1996, and for each of the three fiscal years
ended December 31, 1995, 1994 and 1993, as filed by Seacoast in SEC
Documents, and (ii) the consolidated statements of condition and balance
sheets of Seacoast (including related notes and schedules, if any) and
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to September 30,
1996.
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"Seacoast Material Adverse Effect" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of Seacoast and its Subsidiaries, taken
as a whole, or (ii) the ability of Seacoast to perform its obligations
under this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by courts
or governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting principles generally applicable to
banks and their holding companies, (c) actions and omissions of Seacoast
(or any of its Subsidiaries) taken with the prior informed written Consent
of PSHC in contemplation of the transactions contemplated hereby, and (d)
the direct effects of compliance with this Agreement on the operating
performance of Seacoast, including expenses incurred by Seacoast in
consummating the transactions contemplated by this Agreement.
"Seacoast Preferred Stock" shall mean the $1.00 par value preferred
stock of Seacoast.
"Seacoast Stock Plans" shall mean the existing stock option and other
stock-based compensation plans of Seacoast designated as follows: (i)
Seacoast Banking Corporation of Florida 1991 Stock Option and Stock
Appreciation Rights Plan and (ii) Seacoast Banking Corporation of Florida
1996 Long-term Incentive Plan.
"Seacoast Stock Price" shall mean the average of the closing prices on
the Nasdaq National Market as reported by The Wall Street Journal of
Seacoast Common Stock for the 20 trading days preceding the fifth trading
day preceding the Closing Date.
"Seacoast Subsidiaries" shall mean the Subsidiaries of Seacoast, which
shall include the Seacoast Subsidiaries described in Section 6.4 and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of Seacoast in the future and held as a Subsidiary by Seacoast
at the Effective Time.
"SEC Documents" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"Shareholders' Meetings" shall mean the respective meetings of the
shareholders of PSHC and Seacoast to be held pursuant to Section 8.1,
including any adjournment or adjournments thereof.
"Significant Subsidiary" shall mean any present or future consolidated
Subsidiary of the Party in question, the assets of which constitute ten
percent (10%) or more of the consolidated assets of such Party as reflected
on such Party's consolidated statement of condition prepared in accordance
with GAAP.
"Subsidiaries" shall mean all those corporations, associations, or
other business entities of which the entity in question either (i) owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more of
the outstanding equity securities is owned directly or indirectly by its
parent (provided, there shall not be included any such entity the equity
securities of which are owned or controlled in a fiduciary capacity), (ii)
in the case of partnerships, serves as a general partner, (iii) in the case
of a limited liability company, serves as a managing member, or (iv)
otherwise has the ability to elect a majority of the directors, trustees or
managing members thereof.
"Surviving Corporation" shall mean Seacoast as the surviving corporation
resulting from the Merger.
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"Tax Return" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
"Tax" or "Taxes" shall mean any federal, state, county, local, or
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment, sales,
use, transfer, license, payroll, franchise, severance, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent,
customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real
property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or governmental fee
of any kind whatsoever, imposes or required to be withheld by the United
States or any state, county, local or foreign government or subdivision or
agency thereof, including any interest, penalties, and additions imposed
thereon or with respect thereto.
(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:
Allowance................................................... Section 5.9
Bank Merger................................................. Section 1.4
Bank Plan................................................... Section 1.4
Closing..................................................... Section 1.2
Counties.................................................... Section 7.1.
Effective Time.............................................. Section 1.3
ERISA Affiliate............................................. Section 5.15(b)
Exchange Agent.............................................. Section 4.1
Exchange Ratio.............................................. Section 3.1(b)
Lower Threshold Price....................................... Section 3.1(b)
Maximum Amount.............................................. Section 8.15
Merger...................................................... Section 1.1
PSHC Benefit Plans.......................................... Section 5.15
PSHC Contracts.............................................. Section 5.16
PSHC ERISA Plan............................................. Section 5.15
PSHC Options................................................ Section 3.6
PSHC Pension Plan........................................... Section 5.15
PSHC SEC Reports............................................ Section 5.5(a)
Seacoast Benefit Plans...................................... Section 6.15
Seacoast Contracts.......................................... Section 6.16
Seacoast ERISA Plan......................................... Section 6.15
Seacoast Pension Plan....................................... Section 6.15
Seacoast SEC Reports........................................ Section 6.5(a)
Takeover Laws............................................... Section 5.21
Tax Opinion................................................. Section 9.1(h)
Wholesale Mortgage Business................................. Section 5.16
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 Expenses. Except as otherwise provided in this Section 11.2, each of
the Parties shall bear and pay all direct costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of the Parties shall bear and pay
one-half of the filing fees payable in connection with the Registration
Statement and the Joint Proxy Statement and printing costs incurred in
connection with the printing of the Registration Statement and the Joint Proxy
Statement.
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11.3 Brokers and Finders. Except for Austin Associates, Inc. as to PSHC
and except for The Robinson-Humphrey Company as to Seacoast, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by PSHC or by Seacoast, each of PSHC and
Seacoast, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
8.6(b), for the Confidentiality Agreement). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the Parties or
their respective successors, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, other than as provided in Sections 8.14
and 8.15.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of each of the Parties, whether before or after shareholder approval of this
Agreement has been obtained; provided, that after any such approval by the
holders of PSHC Common Stock, there shall be made no amendment that reduces or
modifies in any material respect the consideration to be received by holders of
PSHC Common Stock; and further provided, that after any such approval by the
holders of Seacoast Common Stock, the provisions of this Agreement relating to
the manner or basis in which shares of PSHC Common Stock will be exchanged for
shares of Seacoast Common Stock shall not be amended after the Shareholders'
Meetings in a manner adverse to the holders of Seacoast Common Stock without any
requisite approval of the holders of the issued and outstanding shares of
Seacoast Common Stock entitled to vote thereon.
11.6 Waivers. (a) Prior to or at the Effective Time, Seacoast, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by PSHC, to waive or extend the time for the compliance
or fulfillment by PSHC of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
Seacoast under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of Seacoast.
(b) Prior to or at the Effective Time, PSHC, acting through its Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
Seacoast, to waive or extend the time for the compliance or fulfillment by
Seacoast of any and all of its obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of PSHC under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of PSHC.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
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11.8 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
PSHC: Port St. Lucie National Bank Holding Corp.
1100 S.W. St. Lucie West Boulevard
Port St. Lucie, Florida 34986
Telecopy Number: (561) 878-5431
Attention: J. Hal Roberts, Jr.
Copy to Counsel: Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.
777 South Flagler Drive
Suite 500 East
West Palm Beach, Florida 33401-6194
Telecopy Number: (561) 655-5677
Attention: Michael V. Mitrione, Esq.
Seacoast: Seacoast Banking Corporation of Florida
815 Colorado Avenue
P.O. Box 9012
Stuart, Florida 34995-9012
Telecopy Number: (561) 288-6012
Attention: Mr. Dennis S. Hudson, III
Copy to Counsel: Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30327
Telecopy Number: (404) 881-7777
Attention: Ralph F. MacDonald, III, Esq.
11.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Florida, without regard to any
applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions; Articles and Sections. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
11.12 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
11.13 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
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11.14 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
SEACOAST BANKING CORPORATION OF
FLORIDA
By: /s/ DENNIS S. HUDSON, III
------------------------------------
Dennis S. Hudson, III
Executive Vice President
PORT ST. LUCIE NATIONAL BANK HOLDING
CORP.
By: /s/ J. HAL ROBERTS, JR.
------------------------------------
J. Hal Roberts, Jr.
President
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EXHIBIT 1 TO AGREEMENT
AND PLAN OF MERGER
PLAN OF MERGER
OF
PORT ST. LUCIE NATIONAL BANK
WITH AND INTO
FIRST NATIONAL BANK & TRUST COMPANY OF THE TREASURE COAST
This Plan of Merger ("Plan of Merger") is made and entered into as of
February 19, 1997, by and between PORT ST. LUCIE NATIONAL BANK, a national
banking association organized and existing under the laws of the United States
with its main office located in Port St. Lucie, Florida ("PSNB"), and FIRST
NATIONAL BANK & TRUST COMPANY OF THE TREASURE COAST, a national banking
association organized and existing under the laws of the United States with its
main office located in Stuart, Florida ("FNB").
FNB is a wholly-owned subsidiary of Seacoast Banking Corporation of
Florida, a corporation organized and existing under the laws of the State of
Florida, with its principal office located in Stuart, Florida ("Seacoast"). PSNB
is a wholly-owned subsidiary of Port St. Lucie National Bank Holding
Corporation, a corporation organized and existing under the laws of the State of
Florida, with its principal office in Port St. Lucie, Florida ("PSHC"). Prior to
the execution and delivery of this Plan of Merger, Seacoast and PSHC have
entered into a Agreement and Plan of Merger (the "Parent Agreement") pursuant to
which PSHC would merge with and into Seacoast. The Parent Agreement also
contemplates that PSNB will be merged with and into FNB. The Boards of Directors
of PSNB and FNB are of the opinion that the bests interests of their respective
banks would be served if PSNB is merged with and into FNB on the terms and
conditions provided in this Plan of Merger.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, PSNB and FNB hereby make, adopt and approve this Plan of Merger in order
to set forth the terms and conditions for the merger of PSNB into FNB.
ARTICLE ONE
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:
1.1 "PSNB Common Stock" shall mean the $5.00 par value common stock of
PSNB.
1.2 "Bank Merger" shall refer to the merger of PSNB with and into FNB
as provided in Section 2.1 of this Plan of Merger.
1.3 "FNB Common Stock" shall mean the $10.00 par value common stock of
FNB.
1.4 "Certificate of Merger" shall mean the Certificate of Merger to be
issued by the Office of the Comptroller of the Currency of the United
States approving the Bank Merger.
1.5 "Effective Time" shall mean the date and time on which the Bank
Merger becomes effective as specified in the Certificate of Merger.
ARTICLE TWO
TERMS OF BANK MERGER
2.1 Merger. Subject to the terms and conditions set forth in this Plan of
Merger, at the Effective Time, PSNB shall be merged with and into FNB under the
Charter and Articles of Association of FNB pursuant to
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the provisions of and with the effect provided in Title 12, United States Code,
Section 215a. FNB shall be the surviving bank and the receiving association
resulting from the Bank Merger and shall continue to conduct its business under
the name "FIRST NATIONAL BANK & TRUST COMPANY OF THE TREASURE COAST." The Bank
Merger shall be consummated pursuant to the terms of this Plan of Merger, which
has been approved and adopted by the respective Boards of Directors and
shareholders of FNB and PSNB.
2.2 Method of Converting Shares. All of the shares of FNB Common Stock
issued and outstanding at the Effective Time shall remain issued and outstanding
after the Effective Time and shall be unaffected by the Bank Merger. At the
Effective Time, the certificates representing all of the issued and outstanding
shares of PSNB Common Stock shall be surrendered to FNB for cancellation and no
consideration shall be issued in exchange therefor.
ARTICLE THREE
EFFECT OF BANK MERGER
3.1 Business of FNB. The business of FNB from and after the Effective Time
shall continue to be that of a national banking association. The business shall
be conducted from its main office located in Stuart, Florida and at its legally
established branches, which shall also include the main office and all branches,
whether in operation or approved but unopened, of PSNB at the Effective Time.
3.2 Assumption of Rights. At the Effective Time, the separate existence
and corporate organization of PSNB shall be merged into and continued in FNB, as
the surviving bank and receiving association of the Bank Merger. All rights,
franchises and interests of PSNB and FNB in and to every type of property (real,
personal and mixed), and all choses in action of PSNB and FNB shall be
transferred to and vested in FNB as the surviving bank and receiving association
by virtue of the Bank Merger without any deed or other transfer. FNB, upon
consummation of the Bank Merger and without any order or other action on the
part of any court or otherwise, shall hold and enjoy all rights of property,
franchises and interests, including appointments, designations and nominations,
and all other rights and interests as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver and
committee of estates of lunatics, and in every other fiduciary capacity, in the
same manner and to the same extent as such rights, franchises, and interests
were held or enjoyed by either of PSNB or by FNB at the Effective Time, subject
to the conditions imposed by Title 12, United States Code, Section 215a.
3.3 Assumption of Liabilities. All liabilities and obligations of both of
PSNB and of FNB of every kind and description shall be assumed by FNB as the
surviving bank and receiving association by virtue of the Bank Merger, and FNB
shall be bound thereby in the same manner and to the same extent that either of
PSNB or FNB was so bound at the Effective Time.
3.4 Articles of Association. At the Effective Time, following consummation
of the Bank Merger, the Articles of Association of FNB shall be in the form set
forth in Annex A to this Plan of Merger, as modified only by such amendments as
may be adopted by the sole shareholder of FNB prior to the Effective Time. The
Bylaws of FNB shall be in the form set forth in Annex B to this Plan of Merger,
as modified only by such amendments as may be adopted by the sole shareholder of
FNB prior to the Effective Time.
3.5 Officers, Employees and Directors. The officers and employees of FNB
immediately following the Effective Time shall include, among others, the
officers and employees of FNB and PSNB immediately prior to the Effective Time.
The Board of Directors of FNB immediately following the Effective Time shall
consist of the persons named in Annex C to this Plan of Merger, including two
persons from FNB's Board of Directors, each of whom shall serve until his
respective successor is elected and qualified or until a new Board of Directors
is elected as provided in the Articles of Association or Bylaws of FNB or as
provided by law. All directors of PSNB as of the Closing who do not become
directors of FNB shall serve as members of FNB's St. Lucie Advisory Board, and
shall have such rights and powers as are set out in FNB's Bylaws, as amended
form time to time, and shall receive fees for their service on such advisory
board consistent with the fees paid by FNB to members of its other advisory
boards.
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3.6 Capital Stock of FNB. The capital stock of FNB upon completion of the
Bank Merger shall be approximately $14.5 million, consisting of 2,000,000
authorized shares and 1,450,000 issued and outstanding shares of common stock of
a par value of $10 per share. In addition, FNB shall have a surplus of
approximately $18 million and undivided profits, including capital reserves, of
approximately $38 million adjusted, however, for earnings and expenses between
December 31, 1996 and the Effective Time.
ARTICLE FOUR
EFFECTIVENESS
4.1 Conditions Precedent. Consummation of the Bank Merger is conditioned
upon (i) the Closing of the transactions contemplated by the Parent Agreement
and (ii) receipt of all approvals, consents, waivers, and other clearances of
all federal and state regulatory authorities having jurisdiction over the
transactions contemplated by this Plan of Merger.
4.2 Termination. This Plan of Merger may be terminated at any time prior
to the Effective Time by the parties hereto after termination of the Parent
Agreement in accordance with the provisions of Section 10.1 thereof.
4.3 Effectiveness. Subject to the satisfaction of all requirements of
applicable laws and regulations and the terms and conditions set forth herein,
the Bank Merger contemplated by this Plan of Merger shall be and become
effective at the time and on the date specified in the Certificate of Merger.
ARTICLE FIVE
REPRESENTATIONS
5.1 Organization, Standing, and Power. PSNB is a bank duly organized and
validly existing under the Laws of the State of Florida, and has the power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets.
5.2 Authority; No Breach By Agreement. (a) PSNB has the corporate power
and authority necessary to execute, deliver, and perform its obligations under
this Bank Plan of Merger and to consummate the transactions contemplated hereby.
The execution, delivery, and performance of this Bank Plan of Merger and the
consummation of the transactions contemplated herein have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
PSNB. Subject to such requisite shareholder approval, this Agreement represents
a legal, valid, and binding obligation of PSNB, enforceable against PSNB in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable, insolvency, reorganization, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
(b) Neither the execution and delivery of this Bank Plan of Merger by PSNB,
nor the consummation by PSNB of the transactions contemplated hereby, nor
compliance by PSNB with any of the provisions hereof, will except as
specifically disclosed in the PSHC Disclosure Memorandum delivered pursuant to
the Parent Agreement (i) conflict with or result in a breach of any provision of
PSNB's Articles of Incorporation or Bylaws, (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any PSHC Company under, any Contract or Permit of any
PSHC Company, or (iii) subject to receipt of the requisite approvals referred to
in Section 4.1 of this Bank Plan of Merger, violate any Law or Order applicable
to any PSHC Company or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and other than
Consents required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, or under, and other than
Consents, filings, or notifications which, if not
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obtained or made, are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on PSNB, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
PSNB of the Merger and the other transactions contemplated in this Bank Plan of
Merger.
5.3 Capital Stock. (a) The authorized capital stock of PSNB consists of
5,000,000 shares of PSNB Common Stock, of which 5,000,000 shares are issued and
outstanding as of the date of this Bank Plan of Merger and not more than
5,000,000 shares will be issued and outstanding at the Effective Time. All of
the issued and outstanding shares of capital stock of PSHC are duly and validly
issued and outstanding and are fully paid and nonassessable. None of the
outstanding shares of capital stock of PSNB has been issued in violation of any
preemptive rights of the current or past shareholders of PSNB.
(b) Except as set forth in Section 5.3(a) hereof, there are no shares of
capital stock or other equity securities of PSNB outstanding and no outstanding
Rights relating to the capital stock of PSNB.
ARTICLE SIX
MISCELLANEOUS
6.1 Amendment. To the extent permitted by law, this Plan of Merger may be
amended by a subsequent written instrument upon the approval of the Boards of
Directors of each of the parties hereto and upon execution of such instrument by
the duly authorized officers of each and by a majority of the Boards of
Directors of PSNB and FNB; provided that no amendment to this Plan of Merger
shall modify the requirements of regulatory approval as set forth in Section 4.1
hereof.
6.2 Governing Law. This Plan of Merger shall be governed by and construed
in accordance with the laws of the State of Florida, except to the extent that
the federal laws of the United States of America apply to consummation of the
Bank Merger.
6.3 Headings. The headings in this Plan of Merger are for convenience only
and shall not affect the construction or interpretation of this Plan of Merger.
6.4 Counterparts. This Plan of Merger may be executed in two or more
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, PSNB and FNB has caused this Plan of Merger to be
executed on its behalf by its officers thereunto duly authorized and by a
majority of its Board of Directors, all as of the day and year first above
written.
ATTEST: FIRST NATIONAL BANK & TRUST COMPANY OF THE TREASURE
COAST
By: /s/ Sharon Mehl By: /s/ Dennis S. Hudson, III
- ----------------------------------------------------- -----------------------------------------------------
Title: Corporate Secretary Title: President & Chief
Executive Officer
[BANK SEAL]
ATTEST: PORT ST. LUCIE NATIONAL BANK
By: /s/ Randall A. Ezell By: /s/ J. Hal Roberts, Jr.
- ----------------------------------------------------- -----------------------------------------------------
Title: EVP Title: Chief Executive Officer
[BANK SEAL]
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EXHIBIT 2 TO AGREEMENT
AND PLAN OF MERGER
FORM OF AFFILIATE AGREEMENT
Seacoast Banking Corporation of Florida
P. O. Box 9012
Stuart, Florida 34995-9012
Attention: Dennis S. Hudson, III
Executive Vice President
Gentlemen:
The undersigned is a shareholder of Port St. Lucie National Bank Holding
Corp. ("PSHC"), a corporation organized and existing under the laws of the State
of Florida, and will become a shareholder of Seacoast Banking Corporation of
Florida ("Seacoast"), a corporation organized and existing under the laws of the
State of Florida, pursuant to the transactions described in the Agreement and
Plan of Merger, dated as of February 19, 1997 (the "Agreement"), by and between
Seacoast and PSHC. Under the terms of the Agreement, PSHC will be merged into
and with Seacoast (the "Merger"), and the shares of the $0.01 par value common
stock of PSHC ("PSHC Common Stock") will be converted into and exchanged for
shares of the $0.10 par value Class A common stock of Seacoast ("Seacoast Common
Stock"). This Affiliate Agreement represents an agreement between the
undersigned and Seacoast regarding certain rights and obligations of the
undersigned in connection with the shares of Seacoast to be received by the
undersigned as a result of the Merger.
In consideration of the Merger and the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the undersigned and Seacoast hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as
to PSHC he is an "affiliate" under Rule 145(c) as defined in Rule 405 of
the Rules and Regulations of the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended ("1933 Act"), and the
undersigned anticipates that he will be such an "affiliate" at the time of
the Merger.
2. Initial Restriction on Disposition. The undersigned agrees that he
will not sell, transfer, or otherwise dispose of his interests in, or
reduce his risk relative to, any of the shares of Seacoast Common Stock
into which his shares of PSHC Common Stock are converted upon consummation
of the Merger until such time that the requirements of SEC Accounting
Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met. The
undersigned understands that ASR 130 and 135 relate to publication of
financial results of post-Merger combined operations of Seacoast and PSHC.
Seacoast agrees that it will publish such results within 45 days after the
end of the first fiscal quarter of Seacoast containing the required period
of post-Merger combined operations and that it will notify the undersigned
promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned
represents, warrants and agrees that:
(a) The Seacoast Common Stock received by the undersigned as a
result of the Merger will be taken for his own account and not for
others, directly or indirectly, in whole or in part.
(b) Seacoast has informed the undersigned that any distribution by
the undersigned of Seacoast Common Stock has not been registered under
the 1933 Act and that shares of Seacoast Common Stock received pursuant
to the Merger can only be sold by the undersigned (1) following
registration under the 1933 Act, or (2) in conformity with the volume
and other requirements of Rule 145(d) promulgated by the SEC as the same
now exist or may hereafter be amended, or (3) to
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the extent some other exemption from registration under the 1933 Act
might be available. The undersigned understands that Seacoast is under
no obligation to file a registration statement with the SEC covering the
disposition of the undersigned's shares of Seacoast Common Stock or to
take any other action necessary to make compliance with an exemption
from such registration available.
(c) The undersigned will, and will cause each of the other parties
whose shares are deemed to be beneficially owned by the undersigned
pursuant to Section 8 hereof to, have all shares of PSHC Common Stock
beneficially owned by the undersigned registered in the name of the
undersigned or in the name of any bank, broker-dealer, or clearinghouse
or nominee of any such bank, broker-dealer or clearinghouse, subject in
all cases to the restrictions contained herein and not for the purposes
of, or in any manner otherwise, changing the beneficial ownership of
such shares, reducing the undersigned's risk of ownership of such
shares, or avoiding the purposes of this Agreement. The undersigned
shall promptly notify any such bank, broker-dealer, clearinghouse or
nominee of the restrictions imposed hereby by providing such persons a
copy of this Agreement.
(d) During the 30 days immediately preceding the Effective Time of
the Merger, the undersigned has not sold, transferred, or otherwise
disposed of his interests in, or reduced his risk relative to, any of
the shares of PSHC Common Stock beneficially owned by the undersigned as
of the record date for determination of shareholders entitled to vote at
the Shareholders' Meeting of PSHC held to approve the Merger.
(e) The undersigned is aware that Seacoast intends to treat the
Merger as a tax-free reorganization under Section 368 of the Internal
Revenue Code ("Code") for federal income tax purposes. The undersigned
agrees to treat the transaction in the same manner as Seacoast for
federal income tax purposes. The undersigned acknowledges that Section
1.368-1(b) of the Income Tax Regulations requires "continuity of
interest" in order for the Merger to be treated as tax-free under
Section 368 of the Code. This requirement is satisfied if, taking into
account those PSHC shareholders who receive cash in exchange for their
stock, who receive cash in lieu of fractional shares, or who dissent
from the Merger, there is no plan or intention on the part of the PSHC
shareholders to sell or otherwise dispose of the Seacoast Common Stock
to be received in the Merger that will reduce such shareholders'
ownership to a number of shares having, in the aggregate, a value at the
time of the merger of less than 50% of the total fair market value of
the PSHC Common Stock outstanding immediately prior to the Merger. The
undersigned has no prearrangement, plan or intention to sell or
otherwise dispose of an amount of his Seacoast Common Stock to be
received in the Merger which would cause the foregoing requirement not
to be satisfied.
4. Restrictions on Transfer. The undersigned understands and agrees that
stop transfer instructions with respect to the shares of Seacoast Common Stock
received by the undersigned pursuant to the Merger will be given to Seacoast's
Transfer Agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO A
BUSINESS COMBINATION WHICH IS ACCOUNTED FOR AS A "POOLING OF INTERESTS" AND
MAY NOT BE SOLD, NOR MAY THE OWNER THEREOF REDUCE HIS RISKS RELATIVE
THERETO IN ANY WAY, UNTIL SUCH TIME AS SEACOAST BANKING CORPORATION OF
FLORIDA ("SEACOAST") HAS PUBLISHED THE FINANCIAL RESULTS COVERING AT LEAST
30 DAYS OF COMBINED OPERATIONS AFTER THE EFFECTIVE DATE OF THE MERGER
THROUGH WHICH THE BUSINESS COMBINATION WAS EFFECTED. IN ADDITION, THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT OR UNLESS (1) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (2) IN
ACCORDANCE WITH (I) RULE 145(D) (IN THE CASE OF SHARES ISSUED TO AN
INDIVIDUAL WHO IS NOT AN AFFILIATE OF SEACOAST) OR (II) RULE 144 (IN THE
CASE OF SHARES ISSUED TO AN INDIVIDUAL WHO IS AN AFFILIATE OF SEACOAST) OF
THE RULES AND REGULATIONS OF SUCH ACT, OR (3) IN ACCORDANCE
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WITH A LEGAL OPINION SATISFACTORY TO COUNSEL FOR SEACOAST THAT SUCH SALE OR
TRANSFER IS OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT."
Such legend will also be placed on any certificate representing Seacoast
securities issued subsequent to the original issuance of the Seacoast Common
Stock pursuant to the Merger as a result of any transfer of such shares or any
stock dividend, stock split, or other recapitalization as long as the Seacoast
Common Stock issued to the undersigned pursuant to the Merger has not been
transferred in such manner to justify the removal of the legend therefrom. Upon
the request of the undersigned, Seacoast shall cause the certificates
representing the shares of Seacoast Common Stock issued to the undersigned in
connection with the Merger to be reissued free of any legend relating to
restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable
after the requirements of ASR 130 and 135 have been met. In addition, if the
provisions of Rules 144 and 145 are amended to eliminate restrictions applicable
to the Seacoast Common Stock received by the undersigned pursuant to the Merger,
or at the expiration of the restrictive period set forth in Rule 145(d),
Seacoast, upon the request of the undersigned, will cause the certificates
representing the shares of Seacoast Common Stock issued to the undersigned in
connection with the Merger to be reissued free of any legend relating to the
restrictions set forth in Rules 144 and 145(d) upon receipt by Seacoast of an
opinion of its counsel to the effect that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and effects upon his ability to sell, transfer, or otherwise
dispose of the shares of Seacoast Common Stock received by the undersigned, to
the extent he believes necessary, with his counsel or counsel for PSHC.
6. Filing of Reports by Seacoast. Seacoast agrees, for a period of three
years after the effective date of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of Seacoast Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of Seacoast Common Stock received by him in
connection with the Merger at any time during the restrictive period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for Seacoast Common Stock together with such additional
information as the transfer agent may reasonably request. If Seacoast's counsel
concludes that such proposed sale or transfer complies with the requirements of
Rule 145(d), Seacoast shall cause such counsel to provide such opinions as may
be necessary to Seacoast's Transfer Agent so that the undersigned may complete
the proposed sale or transfer.
8. Acknowledgments and Further Agreements. The undersigned recognizes and
agrees that the foregoing provisions also apply to all shares of the capital
stock of PSHC and Seacoast that are deemed to be beneficially owned by the
undersigned pursuant to applicable federal securities laws, which the
undersigned agrees may include, without limitation, shares owned or held in the
name of (i) the undersigned's spouse, (ii) any relative of the undersigned or of
the undersigned's spouse who has the same home as the undersigned, (iii) any
trust or estate in which the undersigned, the undersigned's spouse, and any such
relative collectively own at least a 10% beneficial interest or of which any of
the foregoing serves as trustee, executor, or in any similar capacity, and (iv)
any corporation or other organization in which the undersigned, the
undersigned's spouse and any such relative collectively own at least 10% of any
class of equity securities or of the equity interest. The undersigned further
recognizes that, in the event that the undersigned is a director or officer of
Seacoast or becomes a director or officer of Seacoast upon consummation of the
Merger, among other things, any sale of Seacoast Common Stock by the undersigned
within a period of less than six months following the effective time of the
Merger may subject the undersigned to liability pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
between Seacoast and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such
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other address as shall be furnished in writing by the parties. This Affiliate
Agreement shall be governed by the laws of the State of Florida.
This Affiliate Agreement is executed as of the 19th day of February, 1997.
Very truly yours,
--------------------------------------
Signature
--------------------------------------
Print Name
--------------------------------------
--------------------------------------
--------------------------------------
Address
[add below the signatures of all registered owners of shares deemed
beneficially owned by the affiliate]
--------------------------------------
Name:
--------------------------------------
Name:
--------------------------------------
Name:
AGREED TO AND ACCEPTED as of
February , 1997
SEACOAST BANKING CORPORATION OF
FLORIDA
By:
------------------------------------
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EXHIBIT 4 TO AGREEMENT
AND PLAN OF MERGER
FORM OF DIRECTOR'S AGREEMENT
THIS DIRECTOR'S AGREEMENT ("Agreement") is made and entered into as of the
19th day of February, 1997, by and between the undersigned, , a
resident of , Florida, and Seacoast Banking Corporation of Florida, a
corporation organized and existing under the laws of the State of Florida
("Seacoast").
On even date herewith, Seacoast and Port St. Lucie National Bank Holding
Corp., a corporation organized and existing under the laws of the State of
Florida ("PSHC"), have entered into an Agreement and Plan of Merger (the "Merger
Agreement"). The Merger Agreement generally provides for the merger of PSHC with
and into Seacoast ("Merger"), and the conversion of the issued and outstanding
shares of the $0.01 par value common stock of PSHC ("PSHC Common Stock") into
shares of the $0.10 par value Class A common stock of Seacoast. The transactions
contemplated by the Merger Agreement are subject to the affirmative vote of the
shareholders of PSHC, the receipt of certain regulatory approvals and the
satisfaction of other conditions.
The undersigned is a member of the Board of Directors of PSHC and is the
owner of shares of PSHC Common Stock and has rights by option, warrants
and otherwise to acquire additional shares of PSHC Common Stock
("Shares"). To induce Seacoast to enter into the Merger Agreement, the
undersigned is entering into this Agreement with Seacoast to set forth certain
terms and conditions governing the actions to be taken by the undersigned with
respect to the Shares until consummation of the Merger.
NOW, THEREFORE, in consideration of the transactions contemplated by the
Merger Agreement and the mutual promises and covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties, intending to be legally bound, agree as follows:
1. Without the prior written consent of Seacoast, the undersigned
shall not transfer, sell, assign, convey or encumber any of the Shares
during the term of this Agreement, except to Seacoast pursuant to the terms
of the Merger Agreement. Without limiting the generality of the foregoing,
the undersigned shall not grant to any party any option or right to
purchase the Shares or any interest therein. Further, except with respect
to the Merger, the undersigned shall not approve or ratify any agreement or
contract pursuant to which the Shares would be transferred to any other
party as a result of a consolidation, merger, reorganization or
acquisition.
2. The undersigned intends to, and will, vote all of the Shares
beneficially owned by him (and with respect to which he has voting power)
in favor of the Merger. The undersigned will also recommend that the
shareholders of PSHC approve the Merger when the same is presented to the
shareholders for consideration in properly prepared proxy materials,
subject only to the undersigned's legal obligations (if any) as a director
of PSHC, and will use his or her best efforts to effect consummation of the
Merger and the other transactions contemplated by the Merger Agreement.
Further, the undersigned intends to, and will, surrender the certificate or
certificates representing his or her Shares which are beneficially owned by
him (and with respect to which he has sole dispositive power) to Seacoast
upon consummation of the Merger as described in the Merger Agreement.
3. The undersigned covenants and agrees with Seacoast that for a
period of two years after the effective time of the Merger, the undersigned
shall not, without the prior written consent of Seacoast, directly or
indirectly serve as a consultant to, serve as a management official of, or
be or become a major shareholder of any Depository Institution having an
office in Indian River, St. Lucie and/or Martin Counties, Florida. It is
expressly understood that the covenants contained in this paragraph 3 do
not apply to (i) "management official" positions which the undersigned
holds with financial institutions other than PSHC as of the date of this
Agreement, (ii) securities holdings which cause the undersigned to be
deemed a major shareholder of a Depository Institution other than PSHC as
of the date of this Agreement, or (iii) advisory relationships with a
Depository Institution which the undersigned has as of
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the date of this Agreement or may have after the date hereof solely in the
capacity as legal counsel. For the purposes of the covenants contained in
this paragraph 3, the following terms shall have the following respective
meanings:
(a) The term "management official" shall refer to service of any
type which gives the undersigned the authority to participate, directly
or indirectly, in policy-making functions. This includes, but is not
limited to, service as an organizer, officer, director, or advisory
director of a Depository Institution. It is expressly understood and
agreed that the undersigned may be deemed a management official of the
Depository Institution whether or not he holds any official, elected, or
appointed position with such Depository Institution.
(b) The term "Depository Institution" shall refer to any person
which engages in the business of making loans and taking deposits or
which owns or controls, or is under common control with, a company which
engages in such business.
(c) The term "major shareholder" shall refer to the beneficial
ownership of 2% or more of any class of voting securities of such
company or the ownership of 2% of the total equity interest in such
company, however denominated.
4. The undersigned waives and releases any claims and/or rights he may
have in or under the PSHC directors deferred compensation plan (the
"Deferred Plan"), except for the delivery to the undersigned of any cash
surrender value of any insurance policies held with respect to the
undersigned's accrued benefits under the Deferred Plan, net of any
cancellation, liquidation or surrender charges or fees.
5. The undersigned acknowledges and agrees that Seacoast could not be
made whole by monetary damages in the event of any default by the
undersigned of the terms and conditions set forth in this Agreement. It is
accordingly agreed and understood that Seacoast in addition to any other
remedy which it may have at law or in equity, shall be entitled to an
injunction, injunctions or a restraining order or orders to prevent
breaches of this Agreement and specifically to enforce the terms and
provisions hereof in any action instituted in any court of the United
States or in any state having appropriate jurisdiction.
6. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
7. Except with respect to the covenants contained in paragraph 3,
which shall be governed by the terms set forth therein and shall be
effective only upon consummation of the Merger, the covenants and
obligations set forth in this Agreement shall expire and be of no further
force and effect when the Merger Agreement has been terminated.
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IN WITNESS WHEREOF, this Agreement has been duly executed under seal and
delivered by the undersigned as of the day and year first above written.
WITNESS
- ----------------------------------------------------- --------------------------------------------(SEAL)
Name:
---------------------------------------------
(Please print or type)
ATTEST: SEACOAST BANKING CORPORATION OF FLORIDA
By: By:
- ----------------------------------------------------- -------------------------------------------------
Secretary Executive President
[CORPORATE SEAL]
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EXHIBIT 5 TO AGREEMENT
AND PLAN OF MERGER
FORM OF CLAIMS LETTER
February 19, 1997
Seacoast Banking Corporation of Florida
P.O. Box 9012
Stuart, Florida 34995-9012
Attention: Dennis S. Hudson, III
Executive Vice President
Gentlemen:
This letter is delivered pursuant to Section 9.2(i) of the Agreement and
Plan of Merger ("Merger Agreement") dated as of February 19, 1997 by and
Seacoast Banking Corporation of Florida ("Seacoast") and Port St. Lucie National
Bank Holding Corp. ("PSHC")
Concerning claims which the undersigned may have against PSHC, Seacoast or
any of their respective Subsidiaries in my capacity as an officer, director,
employee, partner, Controlling Person or Affiliate of PSHC or its Subsidiaries,
and in consideration of the premises, and the mutual covenants contained herein
and in the Merger Agreement and the mutual benefits to be derived hereunder and
thereunder, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the undersigned, intending to be legally
bound, I hereby affirm and agree to the following in each and every such
capacity of the undersigned:
1. Claims. The undersigned does not have, and is not aware of, any
claims it might have against Seacoast, PSHC or any of their respective
Subsidiaries, except for (i) compensation for services rendered that have
accrued but not yet been paid in the ordinary course of business consistent
with past practice, (ii) contract rights, under loan commitments and
agreements between the undersigned and PSHC or its subsidiaries,
specifically limited to possible future advances in accordance with the
terms of such commitments or agreements, (iii) certificates of deposits,
(iv) payment obligations under the PSHC Directors Deferred Compensation
Plan, (if any) consistent with any subject to the terms and conditions of
the Merger Agreement and the undersigned's Director's Agreement with
Seacoast (if applicable), and (v) obligations of any PSHC Entity under any
lease agreement between Harold H. Goldman and PSHC or its subsidiaries
consistent with Section 4 of the Director's Agreement entered into by the
undersigned.
2. Releases. The undersigned hereby releases and forever discharges
Seacoast, PSHC, and their respective directors, officers, employees,
agents, attorneys, representatives, Subsidiaries, partners, affiliates,
controlling persons and insurers, and its successors and assigns, and each
of them (hereinafter, individually and collectively, the "Releasees") of
and from any and all liabilities, claims, demands, debts, accounts,
covenants, agreements, obligations, costs, expenses, actions or causes of
action of every nature, character or description, now accrued or which may
hereafter accrue, without limitation and whether or not in law, equity or
otherwise, based in whole or in part on any facts, conduct, activities,
transactions, events or occurrences known or unknown, matured or unmatured,
contingent or otherwise, which have or allegedly have existed, occurred,
happened, arisen or transpired from the beginning of time to the date of
the closing of the transactions contemplated by the Merger Agreement,
except for (i) compensation for services rendered that have accrued but not
yet been paid in the ordinary course of business consistent with past
practice or (ii) contract rights, under loan commitments and agreements
between the undersigned and PSHC or its subsidiaries (collectively, the
"Claims"). The undersigned represents, warrants and covenants that no Claim
released herein has been assigned, expressly, impliedly, by operation of
law or otherwise, and that all Claims released hereby are owned solely by
the undersigned, which has the sole authority to release them.
3. Indemnity. The undersigned shall indemnify and hold harmless, to
the fullest extent permitted by law, the Releasees from and against any and
all Claims which are released hereby and all claims,
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damages, losses, liabilities, actions and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, arising from, out
of, or in connection with the performance or nonperformance of any
obligation of the undersigned hereunder, or any action or proceeding in
respect thereof.
4. Forbearance. The undersigned shall forever refrain and forebear
from commencing, instituting or prosecuting any lawsuit, action, claim or
proceeding before or in any court, regulatory, governmental, arbitral or
other authority to collect or enforce any Claims which are released and
discharged hereby.
5. Miscellaneous. (a) This Release shall be governed and construed in
accordance with the laws of the State of Florida (other than the choice of
law provisions thereof).
(b) This Release contains the entire agreement between the parties
with respect to the Claims released hereby, and such Release supersedes all
prior agreements, arrangement or understandings (written or otherwise) with
respect to such Claims and no representation or warranty, oral or written,
express or implied, has been made by or relied upon by any party hereto,
except as expressly contained herein, in the Merger Agreement.
(c) This Release shall be binding upon and inure to the benefit of the
undersigned and the Releasees and their respective successors and assigns.
(d) This Release may not be modified, amended or rescinded except by
the written agreement of the undersigned and the Releasees, it being the
express understanding of the undersigned and the Releasees that no term
hereof may be waived by the action, inaction or course of delaying by or
between the undersigned or the Releasees, except in strict accordance with
this paragraph, and further that the waiver of any breach of this Release
shall not constitute or be construed as the waiver of any other breach of
the terms hereof.
(e) The undersigned represents, warrants and covenants that it is
fully aware of its rights to discuss any and all aspects of this matter
with any attorney chosen by it, and that it has carefully read and fully
understands all the provisions of this Release, and that it is voluntarily
entering into this Release.
(f) This Release is effective when signed by the undersigned and
delivered to Seacoast and acknowledged by Seacoast, and its operation to
extinguish all of the Claims released hereby is not dependent on or
affected by the performance or non-performance of any future act by the
undersigned or the Releasees.
Unless otherwise defined herein, all capitalized terms shall have the same
meanings as provided in the Merger Agreement.
Sincerely,
--------------------------------------
Signature of Officer, Director, or
Controlling Person
On behalf of Seacoast, the undersigned thereunto duly authorized,
acknowledges receipt of this letter as of , 1997.
Seacoast Banking Corporation of
Florida
By:
------------------------------------
Name:
Title:
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APPENDIX B
[AUSTIN ASSOCIATES, INC. LETTERHEAD]
FAIRNESS OPINION
April 14, 1997
Board of Directors
Port St. Lucie National Bank Holding Corp.
1100 S.W. St. Lucie W. Blvd.
Port St. Lucie, FL 34996
Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view, to Port St. Lucie National Bank Holding Corp. ("PSHC") and its
shareholders of terms of the Agreement and Plan of Merger dated February 19,
1997 ("Agreement") by and between Seacoast Banking Corporation of Florida
("Seacoast") and PSHC. The Agreement provides for the merger of PSHC with and
into Seacoast (the "Merger").
The terms of the Agreement provide for the aggregate issuance of 900,000
shares of Seacoast Class A Common Stock to PSHC common shareholders, option
holders and warrant holders (collectively referred to as "shareholders"). The
exchange ratio to PSHC common shareholders (the "Stock Exchange Ratio") shall be
determined by dividing the Purchase Price Per Share by the Seacoast Stock Price,
both terms being defined in the Agreement. PSHC options will be convened into
the right to purchase Seacoast Common Stock, adjusted for the Stock Exchange
Ratio. The exchange ratio to warrant holders (the "Warrant Exchange Ratio")
shall be determined by dividing (i) the difference between the Purchase Price
Per Share and $8.26 (the exercise price for all warrants) by (ii) the Seacoast
Stock Price. PSHC has the right to terminate the transactions the Purchase Price
Per Share is less than $24.62.
In carrying out our engagement, we have reviewed and analyzed material
bearing upon the financial and operating condition of PSHC and Seacoast
including but not limited to the following: (i) the audited financial statements
of PSHC and Seacoast for the period 1991 through 1996; (ii) the internal
financial statements of PSHC and Seacoast for the three month period ending
March 31, 1997; (iii) the reported prices and stock trading activity of PSHC and
Seacoast; (iv) publicly available information regarding the performance of
certain other companies whose business activities were, believed to be generally
comparable to those of PSHC and Seacoast; (v) the financial terms, to the extent
publicly available, of certain comparable bank merger transactions; (vi) the
strategic objectives of the Merger and the synergies and other benefits of the
Merger for the combined company as described by senior management of PSHC and
Seacoast; and (vii) such other analysis and information as we deemed relevant.
In our review and analysis, we relied upon and assumed the accuracy and
completeness of the financial and other information provided to us or publicly
available, and have not attempted to verify the same. We have made no
independent verification as to the assets or properties of PSHC or Seacoast, and
have instead relied upon representations and information of PSHC and Seacoast,
in the aggregate. In rendering our opinion, we have assumed that the transaction
will be a tax-free reorganization with no material adverse tax consequences to
PSHC or Seacoast, or to PSHC shareholders. We have assumed in the course of
obtaining the necessary regulatory approvals for the transaction, no condition
will be imposed that will have a material adverse effect on the contemplated
benefits of the transaction to PSHC and its shareholders.
Austin Associates participated in discussions and negotiations with
representatives of PSHC and Seacoast and their financial and legal advisors. For
our services, including the rendering of this opinion, PSHC will pay us a fee
and indemnify us against certain liabilities, including liabilities under the
securities laws.
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AUSTIN ASSOCIATES, INC.
We consent to the use of this opinion in the Joint Proxy
Statement/Prospectus which is a part of Seacoast's Registration Statement on
Form S-4.
Based upon our analysis and subject to the qualifications described herein,
we believe that, as of the date of this letter, the terms of the Merger are
fair, from a financial point of view, to PSHC and its shareholders.
Austin Associates, Inc.
By: /s/ RICHARD F. MARONEY, JR.
-------------------------------
Richard F. Maroney, Jr.
Executive Vice President and
Principal
April 14, 1997
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APPENDIX C
THE ROBINSON-HUMPHREY COMPANY, INC.
CORPORATE FINANCE INVESTMENT BANKERS
DEPARTMENT SINCE 1894
April 14, 1997
Board of Directors
Seacoast Banking Corp. of Florida
P.O. Box 9012
Stuart, Florida 34995
Gentlemen:
In connection with the proposed acquisition of Port St. Lucie National Bank
Holding Corp. ("PSL") by Seacoast Banking Corp. of Florida ("SBCFA") (the
"Merger"), you have asked us to render an opinion as to whether the financial
terms of the Merger, as provided in the Agreement and Plan of Merger dated as of
February 19, 1997 among such parties (the "Merger Agreement"), are fair, from a
financial point of view, to the stockholders of SBCFA. Under the terms of the
Merger, holders of all outstanding shares and options of PSL stock will be
exchanged for consideration equal to 900,000 SBCFA Common Stock shares less any
proceeds received from the outstanding PSL options and warrants.
Our firm, as part of its investment banking business, is frequently
involved in the valuation of securities as related to public underwritings,
private placements, mergers, acquisitions, recapitalizations and other purposes.
In connection with our study for rendering this opinion, we have reviewed
the Merger Agreement, PSL's financial results for fiscal years 1994 through 1996
and certain documents and information we deem relevant to our analysis.
We have also studied published financial data concerning certain other
publicly traded banks which we deem comparable to PSL as well as certain
financial data relating to acquisitions of other banks that we deem relevant or
comparable. In addition, we have reviewed other published information, performed
certain financial analyses and considered other factors and information which we
deem relevant.
In rendering this opinion, we have relied upon the accuracy of the Merger
Agreement, the financial information listed above, and other information
furnished to us by SBCFA and PSL. We have not separately verified this
information nor have we made an independent evaluation of any of the assets or
liabilities of SBCFA or PSL.
Based upon the foregoing and upon current market and economic conditions,
we are of the opinion that, from a financial point of view, the consideration as
provided in the Agreement and Plan of Merger is fair to the stockholders of
SBCFA.
Very truly yours,
THE ROBINSON-HUMPHREY COMPANY, INC.
ATLANTA FINANCIAL CENTER
3333 PEACHTREE ROAD, NE - ATLANTA, GEORGIA 30326
(404) 266-6000
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APPENDIX D
EXCERPT FROM THE FLORIDA BUSINESS CORPORATION ACT
RELATING TO RIGHTS OF DISSENTING SHAREHOLDERS
607.1301 Dissenter's Rights; Definitions. The following definitions apply
to ss. 607.1302 and 607.132:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the
value of the shares as of the close of business on the day prior to the
shareholders' authorization date, excluding any appreciation or
depreciation in anticipation of the corporate action unless exclusion would
be inequitable.
(3) "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date on
which the corporation received written consents without a meeting from the
requisite number of shareholders in order to authorize the action, or, in
the case of a merger pursuant to s. 607.1104, the day prior to the date on
which a copy of the plan of merger was mailed to each shareholder of record
of the subsidiary corporation.
607.1302 Right of Shareholders to Dissent. (1) Any shareholder has the
right to dissent from, and obtain payment of the fair value of his shares in the
event of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party:
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its
parent under s. 607.1104, and the shareholders would have been entitled
to vote on action taken, except for the applicability of s. 607.1104;
(b) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation, other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange pursuant to s. 607. 1202, including a sale in dissolution but not
including a sale pursuant to court order or a sale for cash pursuant to a
plan by which all or substantially all of the net proceeds of the sale will
be distributed to the shareholders within 1 year after the date of sale;
(c) As provided in s. 607.0902(11), the approval of a control-share
acquisition;
(d) Consummation of a plan of share exchange to which the corporation
is a party as the corporation the shares of which will be acquired, if the
shareholder is entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the shareholder
is entitled to vote on the amendment and if such amendment would adversely
affect such shareholder by:
1. Altering or abolishing any preemptive rights attached to any of
his shares;
2. Altering or abolishing the voting rights pertaining to any of
his shares, except as such rights may be affected by the voting rights
of new shares then being authorized of any existing or new class or
series of shares;
3. Effecting an exchange, cancellation, or reclassification of any
of his shares, when such exchange, cancellation, or reclassification
would alter or abolish his voting rights or alter his percentage of
equity in the corporation, or effecting a reduction or cancellation of
accrued dividends or other arrearages in respect to such shares;
4. Reducing the stated redemption price of any of his redeemable
shares, altering or abolishing any provision relating to any sinking
fund for the redemption or purchase of any of his shares, or making any
of his shares subject to redemption when they are not otherwise
redeemable;
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5. Making noncumulative, in whole or in part, dividends of any of
his preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of his preferred
shares; or
7. Reducing any stated preferential amount payable on any of his
preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of
incorporation provide that a voting or nonvoting shareholder is entitled to
dissent and obtain payment for his shares;
(2) A shareholder dissenting from any amendment specified in paragraph
(1)(e) has the right to dissent only as to those of his shares which are
adversely affected by the amendment.
(3) A shareholder may dissent as to less than all the shares registered in
his name. In that event, his rights shall be determined as if the shares as to
which he has dissented and his other shares were registered in the names of
different shareholders;
(4) Unless the articles of incorporation otherwise provide, this section
does not apply with respect to a plan of merger or share exchange or a proposed
sale or exchange of property, to the holders of shares of any class or series
which, on the record date fixed to determine the shareholders entitled to vote
at the meeting of shareholders at which such action is to be acted upon or to
consent to any such action without a meeting, were either registered on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., or held of record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for his shares
under this section may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
607.1320 Procedure for Exercise of Dissenters' Rights. (1)(a) If a
proposed corporate action creating dissenters' rights under s. 607.1320 is
submitted to a vote at a shareholders' meeting, the meeting notice shall state
that shareholders are or may be entitled to assert dissenters' rights and be
accompanied by a copy of ss. 607.1301, 607.1302, and 607.1320. A shareholder who
wishes to assert dissenters' rights shall:
1. Deliver to the corporation before the vote is taken written notice
of his intent to demand payment for his shares if the proposed action is
effectuated, and
2. Not vote his shares in favor of the proposed action. A proxy or
vote against the proposed action does not constitute such a notice of
intent to demand payment.
(b) If proposed corporate action creating dissenters' rights under s.
607.1302 is effectuated by written consent without a meeting, the corporation
shall deliver a copy of ss. 607.1301, 607.1302, and 607.1320 to each shareholder
simultaneously with any request for his written consent or, if such a request is
not made, within 10 days after the date the corporation received written
consents without a meeting from the requisite number of shareholders necessary
to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or consent or
adoption of the plan of merger, as the case may be, to each shareholder who
filed a notice of intent to demand payment for his shares pursuant to paragraph
(1)(a) or, in the case of action authorized by written consent, to each
shareholder, excepting any who voted for, or consented in writing to, the
proposed action.
(3) Within 20 days after the giving of notice to him, any shareholder who
elects to dissent shall file with the corporation a notice of such election,
stating his name and address, the number, classes, and series of shares as to
which he dissents, and a demand for payment of the fair value of his shares. Any
shareholder failing to file such election to dissent within the period set forth
shall be bound by the terms of the proposed corporate action. Any shareholder
filing an election to dissent shall deposit his certificates for certificated
shares with the corporation simultaneously with the filing of the election to
dissent. The corporation may
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restrict the transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
shares. After such offer, no such notice of election may be withdrawn unless the
corporation consents thereto. However, the right of such shareholder to be paid
the fair value of his shares shall cease, and he shall be reinstated to have all
his rights as a shareholder as of the filing of his notice of election,
including any intervening preemptive rights and the right to payment of any
intervening dividend or other distribution or, if any such rights have expired
or any such dividend or distribution other than in cash has been completed, in
lieu thereof, at the election of the corporation, the fair value thereof in cash
as determined by the board as of the time of such expiration or completion, but
without prejudice otherwise to any corporate proceedings that may have been
taken in the interim, if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a
court has been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such shareholder
is not entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which shareholders
may file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
this section to pay an amount the corporation estimates to be the fair value for
such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:
(a) A balance sheet of the corporation, the shares of which the
dissenting shareholder holds, as of the latest available date and not more
than 12 months prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12-month
period ended on the date of such balance sheet or, if the corporation was
not in existence throughout such 12-month period, for the portion thereof
during which it was in existence.
(6) If within 30 days after the making of such offer any shareholder
accepts the same, payment for his shares shall be made within 90 days after the
making of such offer or the consummation of the proposed action, whichever is
later. Upon payment of the agreed value, the dissenting shareholder shall cease
to have any interest in such shares.
(7) If the corporation falls to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent
jurisdiction in the county in this state where the registered office of the
corporation is located requesting that the fair value of such shares be
determined. The court shall also determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination, is
entitled to receive payment for his shares. If the corporation fails to
institute the proceeding as herein provided, any dissenting shareholder may do
so in the name of the corporation. All dissenting shareholders (whether or not
residents of this state), other than shareholders who have agreed with the
corporation as to the value of their shares, shall be made parties to the
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proceeding as an action against their shares. The corporation shall serve a copy
of the initial pleading in such proceeding upon each dissenting shareholder who
is a resident of this state in the manner provided by law for the service of a
summons and complaint and upon each nonresident dissenting shareholder either by
registered or certified mail and publication or in such other manner as is
permitted by law. The jurisdiction of the court is plenary and exclusive. All
shareholders who are proper parties to the proceeding are entitled to judgment
against the corporation for the amount of the fair value of their shares. The
court may, if it so elects, appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair value. The appraisers
shall have such power and authority as is specified in the order of their
appointment or an amendment thereof. The corporation shall pay each dissenting
shareholder the amount found to be due him within 10 days after final
determination of the proceedings. Upon payment of the judgment, the dissenting
shareholder shall cease to have any interest in such shares.
(8) The judgment may, at the discretion of the court, include a fair rate
of interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by
the court and shall be assessed against the corporation, but all or any part of
such costs and expenses may be apportioned and assessed as the court deems
equitable against any or all of the dissenting shareholders who are parties to
the proceeding, to whom the corporation has made an offer to pay for the shares,
if the court finds that the action of such shareholders in failing to accept
such offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for, and experts employed by,
any party. If the fair value of the shares, as determined, materially exceeds
the amount which the corporation offered to pay therefor or if no offer was
made, the court in its discretion may award to any shareholder who is a party to
the proceeding such sum as the court determines to be reasonable compensation to
any attorney or expert employed by the shareholder in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the agreed
value thereof or pursuant to payment of the judgment entered therefor, as
provided in this section, may be held and disposed of by such corporation as
authorized but unissued shares of the corporation, except that, in the case of a
merger, they may be held and disposed of as the plan of merger otherwise
provides. The shares of the surviving corporation into which the shares of such
dissenting shareholders would have been converted had they assented to the
merger shall have the status of authorized but unissued shares of the surviving
corporation.
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APPENDIX E
PROPOSAL 3 -- AMENDMENT OF SEACOAST'S ARTICLES OF INCORPORATION
The existing Article XI is proposed to be amended to read in its entirety
as follows:
"ARTICLE XI
MERGER, CONSOLIDATION OR BUSINESS COMBINATION
The affirmative vote of the holders of two-thirds (66 2/3%) of all the
shares of Class A Common Stock outstanding and entitled to vote, voting as a
separate class, and the affirmative vote of the holders of shares with
two-thirds (66 2/3%) of all the votes entitled to be cast by all shares of
Common Stock of all classes outstanding, voting together as a single class,
shall be required to approve any of the following:
(a) any merger or consolidation of this corporation with or into any
other corporation;
(b) any share exchange in which a corporation, person, or entity
acquires the issued or outstanding shares of stock of this corporation
pursuant to a vote of stockholders;
(c) any sale, lease, exchange or other transfer of all, or
substantially all, of the assets of this corporation or any significant
subsidiary of this corporation to any other corporation, person or entity;
(d) any transaction similar to, or having a similar affect on, any of
the foregoing transactions.
Such affirmative votes shall apply and be required whether or not a vote of
the stockholders otherwise would be required by law or the rules of any
securities exchange or market (collectively, an "SRO") on which this corporation
has shares of its capital stock listed or traded and notwithstanding that a
lesser vote of stockholders might otherwise be required by law or SRO; provided,
however no such affirmative votes shall be required where this corporation is
issuing shares of its capital stock or paying cash or other consideration to
acquire, directly or indirectly, another corporation, person or entity."
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144
APPENDIX F
CLASS A COMMON STOCK
FORM OF PROXY
SEACOAST BANKING CORPORATION OF FLORIDA
ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints William R. Hahl and Bonny
L. Turner, or either of them, as proxies, each with full power of substitution,
to vote the number of shares of Class A common stock of Seacoast Banking
Corporation of Florida, a Florida corporation ("Seacoast") which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Seacoast Shareholders to be held at the Indian River Plantation Beach Resort,
Hutchinson Island, 555 N.E. Ocean Boulevard, Stuart, Florida, on May 30, 1997,
at 3:00 P.M., local time, and at any adjournment or postponement thereof (the
"Annual Meeting") upon the proposals described in the Proxy Statement/Prospectus
and the Notice of Annual Meeting of Shareholders, both dated April 16, 1997, the
receipt of which is acknowledged in the manner specified below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3 AND 4 BELOW.
1. Merger. To approve, ratify, confirm and adopt the Agreement and Plan of
Merger, dated as of February 19, 1997 (the "Merger Agreement"), by and between
Seacoast and Port St. Lucie National Bank Holding Corp., a Florida corporation
("PSHC"), pursuant to which PSHC will merge with and into Seacoast and Seacoast
shall issue up to 900,000 shares of Seacoast Class A common stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Election Of Directors [ ] FOR all nominees for director listed
below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed)
Jeffrey C. Bruner Dennis S. Hudson, Jr.
John H. Crane Dennis S. Hudson, III
Evans Crary, Jr. John R. Santarsiero, Jr.
Dale M. Hudson Thomas H. Thurlow, Jr.
To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided.
---------------------------------------------------
3. Amendments to the Articles of Incorporation. To approve a proposed
amendment to Article XI of Seacoast's Articles of Incorporation to clarify the
voting requirements in connection with certain business combinations.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Ratification of Appointment of Auditors. Proposal to ratify the
appointment of Arthur Andersen LLP as independent auditors for Seacoast for the
fiscal year ending December 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournments thereof.
145
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEACOAST BANKING
CORPORATION OF FLORIDA, AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
SIGNATURE(S) DATE
- ------------------------------------ -------------------------------
Please sign this proxy exactly as your name appears hereon. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
146
APPENDIX G
CLASS B COMMON STOCK
FORM OF PROXY
SEACOAST BANKING CORPORATION OF FLORIDA
ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints A. Douglas Gilbert and John
Turgeon, or either of them, as proxies, each with full power of substitution, to
vote the number of shares of Class B common stock of Seacoast Banking
Corporation of Florida, a Florida corporation ("Seacoast") which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Seacoast Shareholders to be held at the Indian River Plantation Beach Resort,
Hutchinson Island, 555 N.E. Ocean Boulevard, Stuart, Florida, on May 30, 1997,
at 3:00 P.M., local time, and at any adjournment or postponement thereof (the
"Annual Meeting") upon the proposals described in the Proxy Statement/Prospectus
and the Notice of Annual Meeting of Shareholders, both dated April 16, 1997, the
receipt of which is acknowledged in the manner specified below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3 AND 4 BELOW.
1. Merger. To approve, ratify, confirm and adopt the Agreement and Plan of
Merger, dated as of February 19, 1997 (the "Merger Agreement"), by and between
Seacoast and Port St. Lucie National Bank Holding Corp., a Florida corporation
("PSHC"), pursuant to which PSHC will merge with and into Seacoast and Seacoast
shall issue up to 900,000 shares of Seacoast Class A common stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Election Of Directors [ ] FOR all nominees for director listed
below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed)
Jeffrey C. Bruner Dennis S. Hudson, Jr.
John H. Crane Dennis S. Hudson, III
Evans Crary, Jr. John R. Santarsiero, Jr.
Dale M. Hudson Thomas H. Thurlow, Jr.
To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided.
---------------------------------------------------
3. Amendments to the Articles of Incorporation. To approve a proposed
amendment to Article XI of Seacoast's Articles of Incorporation to clarify the
voting requirements in connection with certain business combinations.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Ratification of Appointment of Auditors. Proposal to ratify the
appointment of Arthur Andersen LLP as independent auditors for Seacoast for the
fiscal year ending December 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting or any adjournments thereof.
147
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEACOAST BANKING
CORPORATION OF FLORIDA, AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
SIGNATURE(S) DATE
- ------------------------------------ ----------------------------------
Please sign this proxy exactly as your name appears hereon. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.