<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SEACOAST FINANCIAL SERVICES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[Seacoast Financial Services Corporation Letterhead]
April 17, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of Seacoast Financial Services Corporation to be held on
Thursday, May 18, 2000 at 10:00 a.m., local time, at the Hawthorne Country Club,
970 Tucker Road, North Dartmouth, Massachusetts.
At the Annual Meeting, you will be asked to consider and vote upon the
election of a class of five Directors. The Board of Directors has fixed the
close of business on Monday, April 3, 2000 as the record date for determining
stockholders entitled to notice of and to vote at the Annual Meeting.
The officers and directors look forward to greeting you personally at
the Annual Meeting. However, whether or not you plan to attend personally and
regardless of the number of shares you own, it is important that your shares be
represented.
YOU ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
POSTAGE-PAID ENVELOPE PROVIDED FOR YOUR CONVENIENCE.
Sincerely,
/s/ Kevin G. Champagne
KEVIN G. CHAMPAGNE
President and Chief Executive Officer
<PAGE>
SEACOAST FINANCIAL SERVICES CORPORATION
P.O. BOX 2101
NEW BEDFORD, MASSACHUSETTS 02740
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Seacoast Financial Services Corporation, a Massachusetts
bank holding company (the "Company"), will be held at the Hawthorne Country
Club, 970 Tucker Road, North Dartmouth, Massachusetts, on Thursday, May 18,
2000, beginning at 10:00 a.m., local time, for the following purposes:
1. To elect a class of five Directors of the Company; and
2. To transact such further business as may properly come before
the Annual Meeting, or any adjournment or postponement
thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR
DIRECTOR LISTED IN THE ACCOMPANYING PROXY STATEMENT.
The Board of Directors has fixed the close of business on April 3, 2000
as the record date for determining the stockholders of the Company entitled to
notice of and to vote at the Annual Meeting and any adjournments thereof.
Accordingly, only stockholders of record on such date are entitled to notice of
and to vote at the Annual Meeting or any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ J. Louis LeBlanc
J. Louis LeBlanc, Clerk
New Bedford, Massachusetts
April 17, 2000
IMPORTANT
EVEN THOUGH YOU MAY PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING AND DESIRE TO WITHDRAW YOUR PROXY AND VOTE IN
PERSON, YOU MAY DO SO.
<PAGE>
SEACOAST FINANCIAL SERVICES CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, MAY 18, 2000
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Seacoast Financial Services Corporation
(the "Company") for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Hawthorne Country Club, 970 Tucker Road, North
Dartmouth, Massachusetts, on Thursday, May 18, 2000, beginning at 10:00 a.m.,
local time, and at any adjournments thereof.
This Proxy Statement and the accompanying Notice and Proxy are first
being mailed to stockholders of the Company on or about April 17, 2000 in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Directors has fixed the close of business on Monday, April 3, 2000 as the record
date for the Annual Meeting (the "Record Date"). Only stockholders of record as
of the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof. On the Record Date,
there were 25,459,036 shares of the Company's common stock, $.01 par value per
share (the "Common Stock"), issued, outstanding and entitled to vote at the
Annual Meeting and approximately 6,189 holders of record of Common Stock. The
holders of the Common Stock on the Record Date will be entitled to one vote for
each share held of record upon each matter properly submitted to the Annual
Meeting or any adjournments thereof.
The presence, in person or by proxy, of at least a majority in interest
of all Common Stock issued, outstanding and entitled to vote is necessary to
constitute a quorum for transaction of business at the Annual Meeting. The
affirmative vote of the holders of a plurality of the Common Stock present and
voting, in person or by proxy, is required to elect each of the nominees for
Director. Any abstentions or broker nonvotes will count as "present" toward
formation of a quorum for transaction of business at the Annual Meeting.
Assuming the presence of a quorum, abstentions and broker nonvotes will have no
effect on the outcome of the election of Directors. Votes will be tabulated by
the Company's transfer agent, Registrar and Transfer Company.
Stockholders of the Company are requested to complete, date, sign and
promptly return the accompanying form of proxy in the enclosed envelope.
Properly executed proxies received by the Company and not revoked will be voted
at the Annual Meeting in accordance with the instructions contained therein. If
instructions are not given in such proxies, they will be voted FOR the election
of the five nominees for Director listed in this Proxy Statement.
Any properly completed proxy may be revoked at any time before the
commencement of voting on any matter at the Annual Meeting or any adjournment
thereof by giving written notice of revocation to the Clerk of the Company (791
Purchase Street, New Bedford, Massachusetts 02740), or by signing and duly
delivering a proxy bearing a later date, or by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy.
ANNUAL REPORT TO STOCKHOLDERS; OTHER INFORMATION
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1999 accompanies this Proxy Statement, but is not incorporated
herein and is not to be deemed a part hereof.
THE ANNUAL REPORT TO STOCKHOLDERS INCLUDES THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION (EXCLUDING EXHIBITS). ADDITIONAL COPIES OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K (EXCLUDING EXHIBITS) ARE AVAILABLE WITHOUT CHARGE
UPON REQUEST. SUCH REQUESTS SHOULD BE DIRECTED TO SHAREHOLDER RELATIONS,
SEACOAST FINANCIAL SERVICES CORPORATION, P.O. BOX 2101, NEW BEDFORD,
MASSACHUSETTS 02740.
<PAGE>
GENERAL
Seacoast Financial Services Corporation is the holding company for
Compass Bank for Savings (the "Bank").
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors of the Company consists of 14 members and is
divided into three classes. The first and second classes have five members and
the third class has four members. Directors serve for three-year terms with one
class of Directors being elected by the Company's stockholders at each annual
meeting.
Pursuant to the Company's By-laws, the Board of Directors acted as a
nominating committee for selecting nominees for election as Directors. The Board
has nominated David P. Cameron, Howard C. Dyer, Jr., Thornton P. Klaren, Jr.,
Reale J. Lemieux and Joseph H. Silverstein as Directors for a three-year term.
Each of the nominees is currently serving as a Director of the Company.
Unless authority is withheld, proxies in the accompanying form will be
voted FOR the election of the five nominees, to hold office until the 2003
annual meeting of stockholders or special meeting in lieu thereof and until
their respective successors are elected and qualified. If the proxy withholds
authority to vote for one or more nominees for Director, the stockholder's
instructions will be followed.
The Company has no reason to believe that any of the nominees will not
be able to serve. In the event that any nominee is unable to serve at the time
of the election, the shares represented by the proxy will be voted for the other
nominees and may be voted for a substitute for that nominee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE
FIVE NOMINEES FOR DIRECTOR LISTED IN THIS PROXY STATEMENT.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table sets forth certain information (as of April 17,
2000) regarding the current Directors and the nominees for Director of the
Company:
<TABLE>
<CAPTION>
DIRECTOR TERM AS DIRECTOR
NAME AGE SINCE* WILL EXPIRE
- ----------------------------------------------------- ----------- ----------------- -----------------------
<S> <C> <C> <C>
Manuel G. Camacho 74 1979 2002
** David P. Cameron 74 1976 2000
Kevin G. Champagne 50 1993 2002
** Howard C. Dyer, Jr. 71 1963 2000
Mary F. Hebditch 68 1998 2002
Glen F. Johnson 75 1972 2001
** Thornton P. Klaren, Jr. 64 1968 2000
J. Louis LeBlanc 60 1982 2001
Frederic D. Legate 58 1998 2001
** Reale J. Lemieux 61 1998 2000
A. William Munro 66 1986 2001
Carl Ribeiro 53 1991 2002
** Joseph H. Silverstein 73 1980 2000
Gerald H. Silvia 65 1990 2002
- -----------------------------------------------------
</TABLE>
* Includes service as a trustee of the Bank prior to its reorganization into
the mutual holding company form of organization (the "Reorganization") and
as a trustee of the Company from the date of Reorganization until the
conversion of the Company from a mutual to a stock holding company. All
Directors of the Company are also Directors of the Bank.
** Nominees for Director.
2
<PAGE>
The principal occupation and business experience during at least the last
five years for each Director and nominee is set forth below.
MANUEL G. CAMACHO is a dentist in private practice in New Bedford,
Massachusetts. He is semi-retired.
DAVID P. CAMERON was President of Morse Cutting Tools in New Bedford,
Massachusetts until his retirement in 1982.
KEVIN G. CHAMPAGNE has served as President and Chief Executive Officer of
the Company since its formation in 1994 and as President and Chief Executive
Officer of the Bank since 1994. Prior to 1994, Mr. Champagne was Executive Vice
President/Retail Banking of the Bank. He joined the Bank's Management Training
Program in 1971.
HOWARD C. DYER, JR. was General Manager, New Bedford Storage Warehouse,
New Bedford, Massachusetts, until his retirement in 1996.
MARY F. HEBDITCH has been a self-employed public accountant and auditor
in Sandwich, Massachusetts since 1983. Ms. Hebditch served as a director of
Sandwich Co-operative Bank and Sandwich Bancorp, Inc.
prior to the Company's acquisition of Sandwich Bancorp, Inc.
GLEN F. JOHNSON was a General Manager, Goodyear Tire and Rubber, New
Bedford, Massachusetts, until his retirement in 1985.
THORNTON P. KLAREN, JR. is retired.
J. LOUIS LEBLANC is an attorney in private practice in New Bedford,
Massachusetts. FREDERIC D. LEGATE has been retired since the Company
acquired Sandwich Bancorp, Inc. in December
1998. Prior to his retirement, he served as President and Chief Executive
Officer of Sandwich Co-operative Bank and of Sandwich Bancorp, Inc., positions
he held since 1981 and 1997, respectively.
REALE J. LEMIEUX has owned and operated Bay Beach, a bed and breakfast
establishment in Sandwich, Massachusetts since 1988. Mr. Lemieux served as a
director of Sandwich Co-operative Bank and Sandwich Bancorp, Inc. prior to the
Company's acquisition of Sandwich Bancorp, Inc.
A. WILLIAM MUNRO is President of Munro Distributing, Inc., Fall River,
Massachusetts.
CARL RIBEIRO is President, Luzo Foodservice Corp., New Bedford,
Massachusetts.
JOSEPH H. SILVERSTEIN was the President of Silverstein's Family Store, a
retail clothing store located in New Bedford, Massachusetts, until his
retirement in 1992.
GERALD H. SILVIA is the owner of Americana Travel, a travel agency
located in Fall River, Massachusetts.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
For the year ended December 31, 1999, the Company's Board of Directors
met 10 times and the Bank's Board of Directors met 12 times. Each incumbent
Director attended at least 75% of all meetings of the Company's and the Bank's
Board and any committees thereof of which he was a member.
The Board of Directors has an Executive Committee, an Audit Committee and
a Compensation Commit tee, but does not have a nominating committee or another
committee performing a similar function.
The Executive Committee, of which Messrs. Champagne, Dyer, Johnson,
LeBlanc, Legate, Munro and Silverstein are current members, is the primary
operating committee of the Board of Directors and is vested with the authority
of the Board in most matters, except those powers which by law may not be
delegated. The members of the Executive Committee of the Company are also
members of the Executive Committee of the Bank. During 1999, the Executive
Committee of the Company met four times and the Executive Committee of the Bank
met 12 times.
The Audit Committee, which is comprised of Messrs. Camacho, Cameron,
Klaren, Ribeiro and Silvia, is responsible for recommending the selection of the
Company's independent public accountants, overseeing the
3
<PAGE>
internal audit function, reviewing the scope of the annual audit of the
Company's consolidated financial statements, reviewing the report of the
independent public accountants, reviewing the independent public accountants'
recommendations to management concerning accounting procedures, internal
controls and tax matters, reviewing, reporting on and compliance with certain
regulatory requirements, aiding the Board in discharging its responsibility in
financial reporting and related matters and reviewing the services and fees of
the independent public accountants. The members of the Audit Committee of the
Company are also members of the Audit Committee of the Bank. During 1999, the
Audit Committee of the Company and of the Bank each met three times.
The Compensation Committee, of which Messrs. Dyer, LeBlanc, Legate,
Ribeiro and Lemieux are current members, reviews and establishes salaries and
other compensation of certain officers and employees of the Company. The members
of the Compensation Committee of the Company are also members of the
Compensation Committee of the Bank. During 1999, the Compensation Committees of
the Company and the Bank jointly met five times.
The Board of Directors of the Company nominates candidates for election
as Directors. In accordance with the Company's By-laws, the Board will consider
nominees recommended by a stockholder of the Company, provided that the
stockholder notifies the Clerk of the Company of the proposed nominee in
writing, setting forth certain required information regarding the nominee. Such
notification must be made in a timely manner, as set forth in the By-laws. To be
timely, such notice must be received by the Company not less than 60 nor more
than 150 days prior to the scheduled date of the annual meeting of stockholders,
or, if less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made, within 10 days of the date notice of the scheduled
annual meeting was mailed or the day on which public disclosure of the date of
the annual meeting was made. The Board, a designated committee thereof, or the
presiding officer may reject any stockholder nomination that is not timely made
or does not otherwise satisfy the requirements of the Company's By-laws in any
material respect.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1999, Directors received $500 for each
Board meeting that they attended. Directors who do not also serve on the
Executive Committee also received an annual retainer of $5,000. Members of the
Executive Committee received an annual retainer of $13,000 and $500 for each
meeting that they attended during the year. Members of the Audit Committee
received $500 for each meeting that they attended during the year (except the
Chairman, who received $600).
During 1999, Directors received bonuses ranging in amount from $2,310 to
$7,480 (for an aggregate of $53,020) under the Bank's Incentive Compensation
Plan. Effective January 1, 2000, Directors will no longer participate in the
Plan.
Effective January 1, 2000, Board and Committee fees increased as follows.
Directors of the Board receive $700 for each Board meeting that they attend.
Directors who do not also serve on the Executive Committee also receive an
annual retainer of $6,500. Members of the Executive Committee receive an annual
retainer of $15,000 and $700 for each meeting that they attend. Members of the
Audit Committee, the Compensation Committee, the Compliance Committee and the
CRA Committee receive $500 for each meeting that they attend. The Chairman of
each of these committees additionally receives an annual retainer of $2,000.
Unless the Company Board or a committee of the Company meets separately
from the Bank Board or a committee of the Bank, all fees, other than those paid
to members of the Audit Committee, are paid by the Bank. Directors do not
receive additional fees for attendance at Company Board or committee meetings
that are held immediately prior to or after a Bank Board or committee meeting.
The most senior member of the Board of Directors of the Bank receives an annual
retainer of $7,000 ($5,000, effective January 1, 2000) for duties performed in
connection with his appointment as a non-operating Vice President of the
Company. Mr. Champagne does not receive any fees for service on the Board of
Directors of the Company or the Bank or for service on any committees of either
Board. Directors may participate in the Company's directors' deferred
4
<PAGE>
compensation plan pursuant to which directors may defer any compensation or fees
earned from their position as a director of the Company.
In July 1999, the Company granted options at fair market value ($11.375)
to purchase 26,000 shares of Common Stock to Directors Dyer, Johnson, LeBlanc,
Legate, Munro and Silverstein and options to purchase 21,000 shares of Common
Stock to Directors Camacho, Cameron, Hebditch, Klaren, Lemieux, Ribeiro and
Silvia under the Company's 1999 Stock Incentive Plan. In July 1999, the Company
also granted at no cost 11,000 shares of restricted stock to Directors Camacho,
Cameron, Dyer, Johnson, Klaren, LeBlanc, Munro, Ribeiro, Silverstein and Silvia
and 2,500 shares of restricted stock to Directors Hebditch and Lemieux under the
Company's 1999 Stock Incentive Plan. The options and restricted stock vest at
the rate of 20% per year.
MANAGEMENT
EXECUTIVE OFFICERS
The names and ages of all executive officers of the Company and the
Bank and the principal occupation and business experience during at least the
last five years for each are set forth below as of April 17, 2000.
Each of Messrs. Short, Kelleher, Rigby, Taber, Weiler, Camara and Rice
and Ms. Burnham serve as a Vice President of the Company, a position each
(except Messrs. Short, Weiler and Rice) has held since the formation of the
Company in 1994. Messrs. Short, Rice and Weiler have served as Vice President of
the Company since May 1997, October 1998 and July 1999, respectively.
KEVIN G. CHAMPAGNE. See "Information Regarding Nominees and Directors"
above.
ARTHUR W. SHORT served as Treasurer of the Company since its formation
in 1994 until 1997. He currently serves as Executive Vice President of the Bank,
a position he has held since 1993, and as Chief Operating Officer of the Bank, a
position he has held since 1997. Prior to 1997, Mr. Short served as Treasurer
and Chief Financial Officer of the Bank. He joined the Bank in 1981. Mr. Short
is 59 years old.
JOHN D. KELLEHER has served as Executive Vice President of the Bank
since 1993 and has headed the Bank's Lending Division since 1984. Mr. Kelleher
joined the Bank's Management Training Program in 1971. Mr. Kelleher is 54 years
old.
FRANCIS S. MASCIANICA, JR. has served as Senior Vice
President/Treasurer and Chief Financial Officer of the Bank since 1997 and as
Treasurer of the Company since 1997. Mr. Mascianica has held various positions
with the Bank since he joined the Bank in 1981. He is 52 years old.
FRIEND S. WEILER has served as Senior Vice President of the Bank since
1999. Prior to joining the Bank, Mr. Weiler served as Vice President -
Commercial Lending for Fleet Bank of Massachusetts. Mr. Weiler is 54 years old.
CAROLYN A. BURNHAM has served as Senior Vice President and head of the
Retail Banking Division of the Bank since 1994. Ms. Burnham has held various
positions with the Bank since she joined the Bank in 1966. She is 51 years old.
WILLIAM D. RIGBY has served as Senior Vice President since 1994 and
Manager of the Consumer Lending Department of the Bank since 1985, when he
joined the Bank. He is 52 years old.
CARL W. TABER has served as Senior Vice President since 1993 and head
of Mortgage Lending of the Bank since 1984. Mr. Taber joined the Bank's
Management Training Program in 1975. He is 46 years old.
ROBERT J. CAMARA has served as Senior Vice President and Loan Servicing
Manager of the Bank since 1997. He joined the Bank in 1987 as Assistant Vice
President and Auditor and became Vice President and Loan Servicing Manager in
1990. Mr. Camara is 43 years old.
JAMES R. RICE has served as Senior Vice President of Marketing of the
Bank since December 1998. He joined the Bank in 1997 as Vice President of
Marketing. Prior to joining the Bank, Mr. Rice served as a Senior
5
<PAGE>
Marketing Manager for BankBoston from 1995 to 1997 and as Vice President of
Marketing for Medford Savings Bank from 1988 to 1995. Mr. Rice is 38 years old.
All executive officers of the Company and the Bank hold office until
the first meeting of the Board of Directors following the annual meeting of
stockholders or special meeting in lieu thereof and until their successors are
chosen and qualified, unless a shorter term is specified in the vote appointing
them. Officers may generally be removed from office by vote of a majority of the
full Board of Directors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth certain
information regarding compensation paid or accrued by the Company and the Bank
during the fiscal years ended October 31, 1997 and 1998 and December 31, 1999
with respect to the Chief Executive Officer and the Company's and the Bank's
four most highly compensated officers other than the Chief Executive Officer who
served as officers at the end of fiscal 1999 and whose annual compensation
exceeded $100,000 for fiscal 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------
RESTRICTED SECURITIES
FISCAL ANNUAL COMPENSATION STOCK UNDERLYING ALL OTHER(4)
----------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OTHER(2) AWARDS(3) OPTIONS/SARS COMPENSATION
- --------------------------- ---------- ----------- ----------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Kevin G. Champagne. . . . . . . 1999 $311,201 $99,529 $1,365,000 260,000 $77,339
President and Chief 1998 263,849 75,601 -- -- 48,506
Executive Officer of the 1997 225,387 59,801 -- -- 5,794
Company and the Bank
Arthur W. Short. . . . . . . . . . 1999 163,706 41,042 455,000 90,000 15,538
Vice President of the 1998 155,275 34,431 -- -- 7,700
Company; Executive Vice 1997 143,505 34,750 -- -- 6,912
President and Chief
Operating Officer of the Bank
John D. Kelleher. . . . . . . . . . 1999 148,154 36,277 455,000 90,000 13,886
Vice President of the 1998 140,686 31,164 -- -- 6,649
Company; Executive Vice 1997 133,920 31,568 -- -- 6,125
President/Lending of the
Bank
Francis S. Mascianica, Jr. . . . 1999 116,884 25,777 398,125 77,500 11,261
Treasurer of the Company; 1998 102,613 19,643 -- -- 4,830
Senior Vice President/Chief 1997 92,782 19,184 -- -- 3,533
Financial Officer and
Treasurer of the Bank
Carolyn A. Burnham. . . . . . . 1999 115,848 26,807 398,125 77,500 11,165
Vice President of the 1998 109,577 24,276 -- -- 5,593
Company; Senior Vice 1997 102,561 24,651 -- -- 4,588
President/Retail Banking of
the Bank
</TABLE>
- --------------------------------
(1) Bonuses are reported for the year they were earned, even if paid in the
subsequent year.
(2) Perquisites and other personal benefits paid to each officer included in
the Summary Compensation Table in each instance aggregated less than 10%
of the total annual salary and bonus set forth in the columns entitled
"Salary" and "Bonus" for each officer, and accordingly, are omitted from
the table in accordance with the rules of the SEC.
(3) At December 31, 1999, Messrs. Champagne, Short, Kelleher and Mascianica
and Ms. Burnham each held an aggregate of 120,000, 40,000, 40,000, 35,000
and 35,000 shares of restricted stock with an aggregate value of
6
<PAGE>
$1,222,500, $407,500, $407,500, $356,562 and $356,562, respectively.
Shares of restricted stock vest at the rate of 20% each year over a
five-year period, based on continued employment with the Bank. Dividends
declared by the Company are payable on all outstanding shares of
restricted stock.
(4) For 1999, includes the Bank's matching and automatic contributions under
its 401(k) plan of $6,716, $5,468, $5,244, $4,181 and $4,145 for Messrs.
Champagne, Short, Kelleher and Mascianica and Ms. Burnham, respectively.
Also includes premiums paid by the Bank for excess group term life
insurance of $773, $2,080, $1,243, $1,243 and $1,235 for Messrs.
Champagne, Short, Kelleher and Mascianica and Ms. Burnham, respectively.
Also includes allocation of shares of Common Stock to employees under the
Company's Employee Stock Ownership Plan (the "ESOP"). The dollar value of
the Company's ESOP contributions in 1999 for Messrs. Champagne, Short,
Kelleher and Mascianica and Ms. Burnham was $7,990, $7,990, $7,399,
$5,837 and $5,785. For Mr. Champagne, includes $61,860 contributed to his
account under the Bank's executive deferred compensation plan as a
supplemental retirement benefit.
OPTION GRANTS. The following Table sets forth certain information
regarding stock options granted during the fiscal year ended December 31, 1999
by the Company to the executive officers named in the Summary Compensation
Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
-----------------------------------------------------------
AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM (2)
-----------------
NAME GRANTED FISCAL YEAR ($/SH)(1) DATE 5% 10%
- ---- ------- ----------- --------- ----------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kevin G. Champagne 260,000 27.2% $11.375 7/1/09 $1,860,040 $4,713,540
Arthur W. Short 90,000 9.4% 11.375 7/1/09 643,860 1,631,610
John D. Kelleher 90,000 9.4% 11.375 7/1/09 643,860 1,631,610
Francis S. Mascianica, Jr. 77,500 8.1% 11.375 7/1/09 554,435 1,404,998
Carolyn A. Burnham 77,500 8.1% 11.375 7/1/09 554,435 1,404,998
</TABLE>
- ---------------------
(1) Stock options were granted under the Company's 1999 Stock Incentive Plan,
at an exercise price not less than the fair market value of the Company's
Common Stock on the date of the grant.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation of the
Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimates of future stock
price growth. Actual gains, if any, on stock option exercises and Common
Stock holdings are dependent on the timing of such exercise and sale of
the shares and the future performance of the Company's Common Stock.
There can be no assurances that the rates of appreciation assumed in this
table can be achieved or that the amounts shown will be received by the
individuals.
FISCAL YEAR-END OPTION TABLE. At December 31, 1999, Kevin G. Champagne,
Arthur W. Short, John D. Kelleher, Francis S. Mascianica, Jr. and Carolyn A.
Burnham held 260,000, 90,000, 90,000, 77,500 and 77,500 options, none of which
at fiscal year-end were either (i) exercisable or (ii) in-the-money, based on
the last sales price of Common Stock ($10.188) on December 31, 1999 as reported
by the Nasdaq Stock Market. None of the executive officers named in the Summary
Compensation Table exercised any options during the fiscal year ended December
31, 1999.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee consists of Messrs. Dyer, LeBlanc,
Legate, Lemieux and Ribeiro. The Company's compensation policies are designed to
pay executives an annual salary that is industry competitive and an annual bonus
that is based on the performance of the Company (as compared to its annual
business plan). The Committee reviews both components of compensation to ensure
salaries remain competitive and bonuses reward performance.
Salaries for executive officers are based on the duties and
responsibilities of the position held by the executive compared with executive
officers of other companies in the industry and were reviewed and established in
December 1998 for 1999. In setting 1999 compensation levels, the committee
reviewed executive officer compensation data contained in the Massachusetts
Bankers Association 1998 Banking Compensation Report conducted by W. M. Sheehan
& Company Inc. ("Sheehan Survey"), which contained data from over 150 banks in
the New England area, and the 1998 Northeast Banking Industry Compensation
Survey prepared by William M. Mercer, which included data from over 100 banking
organizations located in nine northeastern states. The Chief Executive Officer
prepared a performance review, including an assessment of prior-year performance
for each executive officer, then communicated this information to the
Compensation Committee. Based on this information and its performance review of
the Chief Executive Officer, which is based on its assessment of the degree to
which the Chief Executive Officer accomplished strategic and financial
achievements, the Compensation Committee made recommendations to the Board of
Directors, which establishes annual executive salaries for the next year.
All employees of the Company participate in the Bank's Incentive
Compensation Plan ("Bonus Plan"). Payments under the Bonus Plan are contingent
on the Bank meeting its strategic and operational objectives for the fiscal
year. Bonuses may be awarded for the achievement of the Bank's financial
performance goals. Bonus awards are determined by a defined formula; factors
considered in this formula include financial performance of the Bank and Bank
performance compared to both a return-on-equity and earnings per share basis.
The 1999 performance goals for the Bank were a return-on-equity target of
approximately 8% to 10% and an earnings per share target of $0.85 to $1.04.
Based on the extent to which the Bank achieves those objectives, participants
may receive from 0% to 40% of base salary depending on their Bonus Plan group.
The Compensation Committee reviews both individual performance and Bank goals
annually, however, the Board of Directors has final authority with respect to
all bonus awards.
EQUITY-BASED COMPENSATION. The Compensation Committee believes that
stock ownership by Directors and management and stock-based compensation
arrangements are beneficial in aligning the Board's and management's interests
with the interests of stockholders. Directors and executive officers are
eligible to receive stock awards and options under the Company's 1999 Stock
Incentive Plan.
In determining initial awards under the Company's Stock Incentive Plan,
the Committee reviewed reports provided by a Company consultant, which outlined
allocations to directors and executive officers of more than twelve recently
converted financial institutions. The Committee also reviewed summary proxy
material from a select peer group of Northeast financial institutions with
assets between $600 million and $2 billion.
In July 1999, the Committee granted to Mr. Champagne stock options
totaling 260,000 shares of Common Stock with an exercise price of $11.375, the
closing price of the Common Stock the day immediately preceding the grant. These
options vest at the rate of 20% per year. Additionally, the Committee granted to
Mr. Champagne at no cost a restricted stock award of 120,000 shares of Common
Stock which also vest at the rate of 20% per year.
Executive officers other than Mr. Champagne and Directors also received
stock options and restricted stock awards in July 1999 (with the exception of
Messrs. Weiler and Legate, who only received stock options), which vest at the
rate of 20% per year over a five-year period.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Champagne's salary and bonus
are determined by the Compensation Committee substantially in accordance with
the policies described above relating to all executives of the Company. In
particular, the Compensation Committee considered, among other things, the
following performance criteria in determining Mr. Champagne's 1999 base salary:
(1) return-on-assets and return-on- equity of the Company; (2) selection and
management of staff; (3) development of regional business relationships; (4)
effective management of budgets and asset growth; and (5) development of new
opportunities for business
8
<PAGE>
expansion. The grant of a cash bonus to Mr. Champagne for fiscal 1999 reflects
the Company's achievement of certain performance objectives as specified in the
Bonus Plan.
In December 1998, the Compensation Committee increased Mr. Champagne's
salary for fiscal 1999. This salary increase reflected a review of both the
Sheehan Survey and the Mercer Survey for chief executive officer salaries in the
peer group, the continuing improvement in the performance of the Company and
recognition of Mr. Champagne's achievement of certain strategic goals including
building an experienced management team, improving asset quality and developing
a strategic plan for the Company. The Committee established Mr. Champagne's
salary at a level that is comparable to that of other chief executive officers
of similarly situated banks.
COMPENSATION COMMITTEE
Howard C. Dyer, Jr., Chairman
J. Louis LeBlanc
Frederic D. Legate
Reale J. Lemieux
Carl Ribeiro
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Dyer, LeBlanc, Legate, Lemieux and Ribeiro served as members of
the Compensation Committee during fiscal 1999. No person serving on the
Compensation Committee or on the Board of Directors of the Company is an
executive officer of another entity for which an executive officer of the
Company or the Bank serves on the Board of Directors or on that entity's
Compensation Committee.
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the performance of the Common Stock of the
Company (assuming reinvestment of dividends) with the total return for the S&P
500 Index and the SNL Securities $1 billion to $5 billion Thrift Index. The
calculation of total cumulative return assumes a $100 investment was made at
market close on November 20, 1998, the date of the Company's initial public
offering.
<TABLE>
<CAPTION>
PERIOD ENDING
-----------------------------------------------------------------------------
INDEX 11/20/98 12/31/98 03/31/99 06/30/99 09/30/99 12/31/99
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Seacost Financial Services Corp. 100.00 99.39 95.75 110.30 97.38 99.65
S&P 500 100.00 105.78 111.05 118.88 111.45 128.04
SNL $1B-$5B Thrift Index 100.00 100.62 95.13 103.12 93.80 90.10
</TABLE>
There can be no assurance that stock performance will continue into the
future with the same or similar trends to those depicted in the graph above.
Data for the chart was provided to the Company by SNL Securities and is believed
to be reliable, but neither the accuracy nor the completeness of the information
is guaranteed by the Company.
10
<PAGE>
401(k) PLAN
The Bank maintains a Savings Banks Employees Retirement Association
401(k) Plan, which is a qualified, tax-exempt plan. All employees who have
attained age 21 and have completed one year of employment during which they
worked at least 1,000 hours are eligible to participate.
Under the 401(k) Plan, participants are permitted to make salary
reduction contributions up to the lesser of 15% of compensation or $10,000 (as
indexed annually). All employee contributions and earnings thereon are fully and
immediately vested. The 401(k) Plan permits employees to direct the investment
of their own accounts into various investment options. The Bank matches 50% of
the first 6% of compensation that a participant contributes to the 401(k) Plan.
The Plan was amended in November 1999 to include a 3% automatic contribution by
the Bank for all eligible participants, based on participants' W-2 compensation.
Effective April 1, 2000, the automatic contribution is based on participants'
base salary.
Plan benefits will be paid to each participant in the form of a life
annuity (or joint and survivor annuity if married) upon retirement or death
unless an alternate form of distribution (lump sum or equal payments over a
fixed period) is selected. If a participant terminates employment prior to
retirement, his vested benefit will be held by the 401(k) Plan until the
participant elects to receive his benefit from the Plan. If a participant (and
the participant's spouse, if married) elects to receive benefits after
termination of employment prior to normal or early retirement age, benefits will
be paid in a lump sum. Normal retirement age under the plan is age 65. Early
retirement age is age 59 1/2.
EMPLOYEE STOCK OWNERSHIP PLAN
The Bank has established an Employee Stock Ownership Plan (the "ESOP"),
effective as of January 1, 1998. Employees with at least one year of employment
with the Bank and who have attained age 21 are eligible to participate. The ESOP
has borrowed funds from the Company to purchase 1,120,000 shares of the
Company's stock, which shares serve as collateral for the loan. The loan is
repaid principally from the Bank's contributions to the ESOP, over a period of
20 years. Shares purchased by the ESOP are held in a suspense account for
allocation among participants as the loan is repaid. Effective December 31,
1998, the Sandwich Cooperative Bank ESOP was merged with the Bank's ESOP,
following the merger of Sandwich Co-operative Bank into the Bank on December 4,
1998. An aggregate of 62,719 shares were allocated to ESOP participants during
1999.
Contributions to the ESOP and shares released from the suspense account
in an amount proportional to the repayment of the ESOP loan are allocated among
ESOP participants on the basis of compensation in the year of allocation.
Participants in the ESOP receive credit for years of service prior to the
effective date of the ESOP. Benefits generally vest at the rate of 20% per year
beginning in the second year of service until a participant is 100% vested after
six years or upon normal retirement (as such term is defined in the ESOP),
disability or death of the participant or a change in control (as such term is
defined in the ESOP). A participant who terminates employment for reasons other
than death, retirement or disability prior to seven years of credited service
forfeits the nonvested portion of his benefits under the ESOP. Benefits are
payable in the form of the Company's common stock and cash upon death,
retirement, early retirement, disability or separation from service. Benefits
payable under the ESOP will depend on a number of factors, including the Bank's
contributions to the ESOP and the market value of the Company's common stock.
The Bank is required to record compensation expense in an amount equal to the
fair market value of the shares released from the suspense account.
The Bank has established a committee of three officers of the Bank to
administer the ESOP, and has appointed its President and Chief Executive Officer
to serve as trustee of the ESOP. The ESOP committee may instruct the trustee
regarding investment of funds contributed to the ESOP. The ESOP trustee, subject
to his fiduciary duty, must vote all allocated shares held in the ESOP in
accordance with the instructions of participating employees. Under the ESOP,
nondirected shares and shares held in the suspense account will be voted in a
manner calculated to most accurately reflect the instructions it has received
from participants regarding the allocated stock so long as such vote is in
accordance with the provisions of ERISA.
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
The Company and the Bank have entered into certain employment
agreements (each such agreement, an "Employment Agreement" and, such agreements
collectively, the "Employment Agreements") and certain change
11
<PAGE>
in control agreements (the "Change in Control Agreements") with Messrs.
Champagne, Short, Kelleher and Mascianica and Ms. Burnham (collectively, the
"Officers"). The Employment Agreements provide that the Officers will receive
certain benefits and a base salary set forth in each Agreement, subject to
increases in accordance with the usual practices of the Company and the Bank
with respect to review of compensation of their senior executives. The current
base salary of each of Messrs. Champagne, Short, Kelleher and Mascianica and Ms.
Burnham is $331,762, $171,007, $151,156, $128,883 and $121,848, respectively.
Mr. Champagne's Employment Agreement has a three-year term and the
Employment Agreements of the other Officers have two-year terms. The terms all
commenced on November 20, 1998, and each term extends by one day for each day
that an Officer remains employed by the Bank or (in the case of Mr. Champagne)
by the Bank or the Company until either of the officer or the Bank or (in the
case of Mr. Champagne) the Bank or the Company give a notice of non-renewal.
Under each of the Employment Agreements, the Company (in the case of Mr.
Champagne) and the Bank (in the case of the other Officers) may terminate an
Officer's employment at any time for "cause," as such term is defined in such
agreements, without incurring any continuing obligations to the Officer. If the
Company or the Bank terminates an Officer's employment for any reason other than
for cause or if the Officer terminates the Officer's employment for "good
reason," as such term is defined in the Employment Agreements, the Company and
the Bank will become obligated to provide the Officer: (i) an amount equal to
the sum of (a) the Officer's base salary or other compensation earned through
the date of termination, (b) the Officer's pro rata share of the Officer's
highest annual bonus paid during the three fiscal years preceding such
termination and (c) all accrued vacation and deferred compensation; (ii) a lump
sum severance benefit equal to three times (in the case of Mr. Champagne) or two
times (in the case of the other Officers) the sum of (a) the Officer's annual
base salary and (b) the highest annual bonus paid to the Officer in the three
fiscal years preceding the termination; (iii) disability and medical benefits
specified in the Officer's Employment Agreement for the duration of what
otherwise would have been the remaining term of the Employment Agreement (which,
as a result of the daily extension of the term of the Agreements, will always be
three years for Mr. Champagne and two years for the other Officer); and (iv) a
pension adjustment as specified in the Employment Agreement. The Employment
Agreements also provide certain retirement, death and disability benefits. Mr.
Champagne's Employment Agreement includes a provision reimbursing him, on an
after-tax basis, for any "golden parachute" excise taxes.
The Change in Control Agreements provide that an Officer may receive
certain benefits if the Officer's employment is terminated within three years of
a "Change in Control" (as such term is defined in the Change in Control
Agreements) of either the Company or the Bank. An Officer would receive such
termination benefits if the Company or the Bank terminated the Officer's
employment for any reason other than death or "cause," as such term is defined
in the Employment Agreements, or if the Officer terminated his or her employment
following: (i) a significant change in the nature or scope of the Officer's
responsibilities, authorities, powers, functions or duties; (ii) a determination
by the Officer that, as a result of a Change in Control, the Officer is unable
to exercise the responsibilities, authorities, powers, functions or duties
exercised by the Officer immediately prior to such Change in Control; (iii) a
reduction in the Officer's annual base salary; (iv) a significant relocation of
the offices of the Company or the Bank; (v) a failure of either the Company or
the Bank to pay any portion of compensation due to the Officer; (vi) the
termination of or a material reduction in the Officer's benefits; or (vii) a
failure of the Company or the Bank to obtain a satisfactory agreement from any
successor to assume and agree to perform the Officer's Change in Control
Agreement. The benefits in the case of both Mr. Champagne and the other Officers
are: (i) a lump sum severance payment equal to three times the "base amount," as
such term is defined in Section 280G(b)(3) of the Code, applicable to the
Officer minus $1.00 and (ii) for a period of three years, the Officer's
disability and medical benefits existing on the date of the termination.
Alternatively, an Officer could elect to receive such termination benefits as
the Officer would be entitled to under the Officer's Employment Agreement, but
may not receive payments under both agreements. The Company has also entered
into Change in Control Agreements with four other officers that are
substantially similar to the foregoing, except that the benefit is equal to two
(rather than three) times the "base amount" and is payable only if employment
terminates within one year after the Change in Control.
Cash and benefits paid to each Officer under the Change in Control
Agreements together with payments under other benefit plans following a change
in control of the Company or the Bank may constitute an "excess parachute"
payment under Section 280G of the Code, resulting in the imposition of a 20%
excise tax on the recipient and the denial of the deduction for such excess
amounts to the Company or the Bank. The Change in
12
<PAGE>
Control Agreements place limitations on the salary and benefits the Officers can
receive so that such payments do not exceed the Section 280G limits. However,
such limitations would not apply if an Officer elects to receive payments under
his or her Employment Agreement instead of his or her Change in Control
Agreement.
PENSION PLAN
In September 1999, the Board of Directors of the Bank voted to
terminate the Bank's Savings Banks Employees Retirement Association Pension
Plan, a qualified, tax-exempt defined benefit plan, effective on or about
December 31, 1999. In connection with the termination of the Plan, the Bank's
Board of Directors also voted to cease the accrual of pension benefits,
effective October 31, 1999. Final Plan termination is subject to approval by the
Internal Revenue Service.
As a result of the termination of the Plan, eligible employees will be
offered a single sum settlement equal to the value of their benefits under the
Plan. In addition, a portion of the surplus of the Plan will be used to enhance
benefits of eligible employees. If these eligible employees do not roll over
these benefits into other pension vehicles, they will be subject to significant
tax penalties. The following are estimated settlements and enhancements for the
executive officers of the Bank.
<TABLE>
<CAPTION>
Executive Basic Value Enhancement Total
- --------- ----------- ----------- -----
<S> <C> <C> <C>
Kevin G. Champagne $242,641 $148,698 $391,339
Arthur W. Short $459,659 $271,512 $731,171
John D. Kelleher $337,884 $194,998 $532,882
Francis S. Mascianica, Jr. $159,142 $ 59,538 $218,680
Carolyn A. Burnham $219,352 $120,030 $339,382
</TABLE>
EXECUTIVE SALARY CONTINUATION AGREEMENTS.
The Bank has entered into a salary continuation agreement with four of
its executive officers: Messrs. Champagne, Short, Kelleher and Mascianica. The
agreements provide each officer with a supplemental retirement benefit in an
amount equal to 25% of the average of the three highest years of compensation
(including salary and bonuses) paid to the officer in the ten years of
employment immediately preceding the officer's retirement. The benefit is
payable monthly, for a period of 15 years, commencing on the first day of the
month next following the officer's retirement. A reduced benefit is payable if
the officer retires prior to the age of 65, but after age 55. If the officer
dies while employed by the Bank, a monthly benefit will be paid to the officer's
beneficiary for a period of 15 years in an amount equal to 25% of the officer's
salary on the date of his death. If the officer's employment with the Bank is
terminated prior to the age of 55 other than for cause, the officer is entitled
to a benefit equal to 5% of the benefit he would have received upon retirement
at age 65, multiplied by the number of years of service between the age of 35
and termination of employment. The agreements provide that the Bank may not
merge or consolidate into another corporation or sell substantially all of its
assets to another corporation unless such corporation agrees to assume and
discharge the obligations of the Bank under the agreements. The agreements are
funded by life insurance policies, of which the Bank is the owner and
beneficiary, held in a "rabbi" trust.
The Bank has agreed to calculate each year the additional amount that
would need to be accrued in order to result in the executive receiving 70% of
the average of the three highest years of compensation paid to the officer in
the ten years of employment immediately preceding the officer's retirement from
a combination of the Bank's defined benefit plan, executive salary continuation
agreement, the Bank's contribution to the executive's 401(k) plan, the ESOP,
social security and any supplemental funding. This amount, if any, is added to
the executive's account under the Bank's deferred compensation plan.
EXECUTIVE DEFERRED COMPENSATION PLAN.
The Bank has a deferred compensation plan for the benefit of certain of
its senior management employees, as designated from time to time by the
President of the Bank. At the current time, 21 employees are eligible to
participate in the plan. Participants may defer 1% to 15% of their base salary
and 1% to 100% of any bonus to which they are entitled. Deferred amounts are
credited to each participant's account and are held in a "rabbi" trust. The
deferred compensation plan permits employees to direct the investment of their
own accounts into various
13
<PAGE>
investment options. Distributions to a participant are made upon the earliest of
the participant's retirement, death or other termination of employment, in the
form requested by the participant in his or her salary reduction deferral
election. The plan permits, at the Committee's discretion, withdrawals in the
event of a financial hardship caused by an unforeseeable emergency.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of April 3, 2000
regarding each Director of the Company, each executive officer named in the
Summary Compensation Table, all Directors and executive officers of the Company
as a group and each person known by the Company to own beneficially more than 5%
of the Company's common stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP(1) CLASS (2)
- ------------------------------------------------------ ---------------------------------------- -------------------
<S> <C> <C>
Berger LLC 2,101,500(3) 8.25
210 University Blvd.
Suite 900
Denver, Colorado 80206
Westport Asset Management, Inc. 1,622,425(4) 6.37
Westport Advisers LLC
253 Riverside Avenue
Westport, Connecticut 06880
Perkins, Wolf, McDonnell & Company 1,590,000(5) 6.25
53 W. Jackson Blvd., Suite 722
Chicago, Illinois 60604
Carolyn A. Burnham 41,567(6) *
Manuel G. Camacho 21,000(7) *
David P. Cameron 16,000 *
Kevin G. Champagne 145,874(8) *
Howard C. Dyer, Jr. 16,500 *
Mary F. Hebditch 34,860(9) *
Glen F. Johnson 26,000 *
John D. Kelleher 55,726(10) *
Thornton P. Klaren, Jr. 17,740(11) *
J. Louis LeBlanc 23,900(12) *
Frederic D. Legate 380,927(13) 1.50
Reale J. Lemieux 25,731(14) *
Francis S. Mascianica, Jr. 42,724(15) *
A. William Munro 146,000(16) *
Carl Ribeiro 41,000(17) *
Arthur W. Short 45,512(18) *
Joseph H. Silverstein 21,000 *
Gerald H. Silvia 22,500(19) *
Directors and executive officers as a group 1,212,413 4.76
(23 persons)
</TABLE>
- ----------------------------------------------------------
* Less than 1%
(1) Except as otherwise noted, all persons have sole voting and investment
power over their shares.
14
<PAGE>
(2) Calculated based on outstanding shares of Common Stock on April 3, 2000
of 25,459,036.
(3) The Company has been advised by Berger LLC that it has shared voting
and dispositive power with respect to the shares shown in the table.
Ownership is as of April 10, 2000. Berger LLC serves as investment
advisor to the Berger Funds.
(4) The Company has received a copy of a report on Schedule 13G dated
February 16, 2000, which states that the Reporting Person has sole
voting and dispositive power with respect to 239,425 shares of Common
Stock, shared voting power with respect to 1,134,000 shares of Common
Stock and shared dispositive power with respect to 1,383,000 shares of
Common Stock. The report states that the shares are held of record by
clients of Westport Asset Management, Inc., which acts as an investment
adviser. Westport Asset Management, Inc. owns 50% of Westport Advisers
LLC.
(5) The Company has received a copy of a report on Schedule 13G dated
February 9, 2000, which states that the Reporting Person has shared
voting and dispositive power with respect to 1,590,000 shares of Common
Stock.
(6) Includes 6,000 shares held by 401(k) plan and 567 shares held by the
ESOP as to which Ms. Burnham has the power to direct voting.
(7) Includes 5,000 shares owned by spouse.
(8) Includes 2,700 shares owned by spouse, 8,977 shares held by executive
deferred compensation plan, 7,463 shares held by 401(k) plan and 50
shares held as custodian for daughter, 784 shares held by the ESOP as
to which Mr. Champagne has the power to direct voting.
(9) Includes 4,469 shares held in IRA.
(10) Includes 500 shares held as custodian for son, 930 shares held in
spouse's IRA and 726 shares held by the ESOP as to which Mr. Kelleher
has the power to direct voting.
(11) Includes 3,800 shares owned by spouse and 240 shares owned by daughter.
(12) Includes 7,400 shares held by IRA, 3,000 shares held by spouse and
1,000 shares held in spouse's IRA.
(13) Includes 31,925 shares owned by spouse, 14,641 shares held in IRA and
4,578 shares held in spouse's IRA.
(14) Includes 3,270 held by IRA, 3,095 held in spouse's IRA and 5,500 held
by spouse.
(15) Includes 3,652 shares held by 401(k) plan, 3,500 shares jointly held
with family members and 572 shares held by the ESOP as to which Mr.
Mascianica has the power to direct voting.
(16) Includes 50,000 shares held by company of which Mr. Munro is the
principal owner and 75,000 shares held jointly with his spouse in an
IRA.
(17) Includes 6,000 shares held by spouse and 5,000 shares held by company
of which Mr. Ribeiro is the principal owner.
(18) Includes 1,083 shares held by 401(k) plan, 3,645 shares held by
executive deferred compensation plan and 784 shares held by the ESOP as
to which Mr. Short has the power to direct voting.
(19) Includes 6,200 shares held by spouse.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
During 1999, the Company was subject to Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which requires the
Company's officers and Directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, Directors and greater-than-10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of Forms 3, 4 and 5 furnished
to the Company during and with respect to 1999, or written representations that
no Forms 5 were required, the Company believes that all Section 16(a) filing
requirements applicable to the Company's and the Bank's officers, Directors and
greater-than-10% beneficial owners were complied with during 1999.
15
<PAGE>
CERTAIN TRANSACTIONS WITH MANAGEMENT
Some of the Directors and executive officers, as well as members of
their immediate families and companies, organizations, trusts and other entities
with which they are associated are, or during 1999 were, customers of the Bank
in the ordinary course of business or had loans outstanding from the Bank during
1999, including loans of $60,000 or more. It is anticipated that such persons
and their associates will continue to be customers of and indebted to the Bank
in the future. All such loans were made in the ordinary course of business, did
not involve more than the normal risk of collectibility or present other
unfavorable features and were made on substantially the same terms, including
interest rates and collateral, as prevailed at the time for comparable
transactions with other persons. The Bank does not make loans to executive
officers of the Bank.
INFORMATION CONCERNING AUDITORS
The Board of Directors has selected Arthur Andersen LLP to perform an
audit of the Company's consolidated financial statements for the current fiscal
year. That firm also served as the auditors for the Company during the past
fiscal year. A representative of Arthur Andersen LLP is expected to be present
at the Annual Meeting, will have the opportunity to make a statement if he or
she desires to do so and will be available to respond to appropriate questions.
SOLICITATION
Brokers, banks and other nominees will be reimbursed for out-of-pocket
expenses and other reasonable clerical expenses incurred in obtaining
instructions from beneficial owners of Common Stock. In addition to the
solicitation by mail, solicitations of proxies may be made personally or by
telephone by Directors, officers and certain employees of the Company.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR 2001 ANNUAL MEETING
In order to be included in proxy materials for the 2001 annual meeting
of stockholders or special meeting in lieu thereof, qualifying stockholder
proposals must be delivered to the Company at its principal executive offices on
or after December 17, 2000. Any such proposal should be mailed to: Clerk,
Seacoast Financial Services Corporation, P.O. Box 2101, New Bedford,
Massachusetts 02740. If the date of the next annual meeting is subsequently
changed by more than 30 calendar days from the date of this year's Annual
Meeting, the Company will, in a timely manner, inform its stockholders of such
change and the date by which proposals of stockholders must be received.
In addition, Section 3 of Article II of the Company's By-laws requires
that a stockholder who wishes to propose an item of business for consideration
at the annual meeting must provide notice of such item of business to the
Company at its principal executive offices not less than 60 days nor more than
150 days before the date for such meeting. For next year's scheduled annual
meeting, the deadline for submission of notice is March 17, 2001. Section 3 of
Article III of the By-laws imposes the same deadline on the nomination by a
stockholder of a candidate for election to the Board of Directors. Any proposal
or nomination submitted after March 17, 2001 will be untimely. The By-laws
contain a number of other substantive and procedural requirements which should
be reviewed by any interested stockholder. A copy of the Company's By-laws will
be provided to any stockholder of the Company at no cost upon written request to
the Clerk of the Company.
At the 2001 annual meeting of stockholders or special meeting in lieu
thereof, the persons named as proxies in the Company's proxy for the meeting may
vote the proxy in their discretion on any proposal received by the Company after
March 2, 2001.
MISCELLANEOUS
The Board was not aware, a reasonable time before mailing this Proxy
Statement to stockholders, of any business that may properly be presented at the
Annual Meeting, other than the matters specifically listed in the Notice of
Annual Meeting of Stockholders. However, if any further business is properly
presented, the persons present will have discretionary authority to vote the
shares they own or represent by proxy in accordance with applicable rules.
16
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REVOCABLE PROXY
Seacoast Financial Services Corporation
PLEASE MARK VOTES
AS IN THIS EXAMPLE
this proxy is solicited on behalf of the board of directors
Annual Meeting of Stockholders
May 18, 2000
The undersigned hereby appoints Kevin G. Champagne and Arthur W. Short and each
or either of them, as proxies, with full power of substitution to each and to
each substitute appointed pursuant to such power, of the undersigned to vote all
shares of stock of Seacoast Financial Services Corporation (the "Company") which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders
(the "Annual Meeting") of the Company to be held on Thursday, May 18, 2000, and
at any and all adjournments thereof, with all powers the undersigned would
possess if personally present. The proxies are authorized to vote as indicated
hereon upon the matters set forth herein and in their discretion upon all other
matters which may properly come before said Meeting. The undersigned hereby
acknowledges receipt of a copy of the accompanying Notice and Proxy Statement
for the Annual Meeting of Stockholders and hereby revokes any proxy or proxies,
if any, heretofore given by him to others for said Meeting.
Please be sure to sign and date
this Proxy in the box below.
Date
Stockholder sign above
Co-holder (if any) sign above
With- For All
For hold Except
1. Election of Directors:
David P. Cameron, Howard C. Dyer, Jr., Thornton P. Klaren, Jr., Reale J. Lemieux
and Joseph H. Silverstein
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below. If this
proxy is properly executed and returned, the shares represented hereby will be
voted. If a choice is specified above by the stockholder with respect to any
matter to be acted upon, the shares will be voted upon that matter in accordance
with the specification so made. In the absence of any specification, the shares
represented by this proxy will be voted for proposal1.
Please sign exactly as your name appears on this card. Joint owners should sign.
When signing as attorney, administrator, trustee, guardian or custodian for a
minor, please give full title as such. If a corporation, please sign full
corporate name and indicate the signer's office. If a partner, sign in
partnership name.
Detach above card, sign, date and mail in postage paid envelope provided.
Seacoast Financial Services Corporation
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
