[GRAPHIC OMITTED]
Seacoast Banking
Corporation
of Florida
March 17, 1999
TO THE SHAREHOLDERS OF
SEACOAST BANKING CORPORATION OF FLORIDA:
You are cordially invited to attend the Annual Meeting of Shareholders of
Seacoast Banking Corporation of Florida ("Seacoast" or the "Company"), which
will be held at the Ballantrae Golf and Yacht Club, 3325 S.E. Ballantrae
Boulevard, Port St. Lucie, Florida, on Thursday, April 22, 1999, at 3:00 P.M.,
Local Time (the "Meeting").
At the Meeting, you will be asked to consider and vote upon (i) the
reelection of ten directors to serve until the Annual Meeting of Shareholders in
2000 and until their successors have been elected and qualified, and (ii) the
ratification of the appointment of Arthur Andersen LLP as independent auditors
for Seacoast for the fiscal year ending December 31, 1999.
Enclosed are the Notice of Meeting, Proxy Statement, Proxy and 1998 Annual
Report. We hope you can attend the Meeting and vote your shares in person. In
any case, we would appreciate your completing the enclosed Proxy and returning
it to us. This action will ensure that your preferences will be expressed on the
matters that are being considered. If you are able to attend the Meeting, you
may vote your shares in person even if you have previously returned your Proxy.
We want to thank you for your support this past year. We are proud of our
progress as reflected in the results for 1998, and we encourage you to review
carefully our Annual Report.
If you have any questions about the Proxy Statement or our Annual Report,
please call or write us.
Sincerely,
Dennis S. Hudson III
President & Chief Executive
Officer
<PAGE>
SEACOAST BANKING CORPORATION OF FLORIDA
815 Colorado Avenue
Stuart, Florida 34994
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD April 22, 1999
Notice is hereby given that the Annual Meeting of Shareholders of Seacoast
Banking Corporation of Florida ("Seacoast" or the "Company") will be held at the
Ballantrae Golf and Yacht Club, 3325 S.E. Ballantrae Boulevard, Port St. Lucie,
Florida, on Thursday, April 22, 1999, at 3:00 P.M., Local Time (the "Meeting"),
for the following purposes:
1. Elect Directors. To consider and vote upon the reelection of ten
directors to serve until the Annual Meeting of Shareholders in 2000 and
until their successors have been elected and qualified.
2. Ratify Auditors. To ratify the appointment of Arthur Andersen LLP as
independent auditors for Seacoast for the fiscal year ending December
31, 1999.
4. Other Business. To transact such other business as may properly come
before the Meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on February 12, 1999,
are entitled to notice of, and to vote at, the Meeting or any adjournments
thereof. All shareholders, whether or not they expect to attend the Meeting in
person, are requested to complete, date, sign and return the enclosed Proxy in
the accompanying envelope.
By Order of the Board of
Directors
[GRAPHIC OMITTED]
Dennis S. Hudson III
President & Chief Executive
Officer
March 17, 1999
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO
SEACOAST IN THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE
PREVIOUSLY RETURNED YOUR PROXY.
<PAGE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
OF SEACOAST BANKING CORPORATION OF FLORIDA
April 22, 1999
INTRODUCTION
General
This Proxy Statement is being furnished to the shareholders of Seacoast
Banking Corporation of Florida ("Seacoast" or the "Company"), a Florida
corporation registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended (the "BHC Act"), in connection with the solicitation of
proxies by Seacoast's Board of Directors from holders of Seacoast's Class A
common stock ("Class A Common Stock") and its Class B common stock ("Class B
Common Stock") (herein, Class A Common Stock and Class B Common Stock are
collectively referred to as "Common Stock"), for use at the Annual Meeting of
Shareholders of Seacoast to be held on April 22, 1999, and at any adjournments
or postponements thereof (the "Meeting"). Unless otherwise clearly specified,
the terms "Company" and "Seacoast" include the Company's subsidiaries.
The Meeting is being held to consider and vote upon (i) the reelection of
ten directors to serve until the Annual Meeting of Shareholders in 2000 and
until their successors have been elected and qualified; (ii) the ratification of
the appointment of Arthur Andersen LLP as independent auditors for Seacoast for
the fiscal year ending December 31, 1999.
The Board of Directors of Seacoast knows of no other business that will be
presented for consideration at the Meeting other than the matters described in
this Proxy Statement.
The 1998 Annual Report to Shareholders ("Annual Report"), including
financial statements for the fiscal year ended December 31, 1998, accompanies
this Proxy Statement. These materials are first being mailed to the shareholders
of Seacoast on or about March 17, 1999.
The principal executive offices of Seacoast are located at 815 Colorado
Avenue, Stuart, Florida 34994, and its telephone number is (561) 287-4000.
Record Date, Solicitation and Revocability of Proxies
The Board of Directors of Seacoast has fixed the close of business on
February 12, 1999 as the record date ("Record Date") for determining the
Seacoast shareholders entitled to notice of, and to vote at, the Meeting.
Accordingly, only holders of record of shares of Common Stock on the Record Date
will be entitled to notice of, and to vote at, the Meeting. At the close of
business on such date, there were 4,570,786 shares of Class A Common Stock
issued and outstanding, which were held by approximately 1,025 holders of record
and 375,413 shares of Class B Common Stock issued and outstanding, which were
held by approximately 86 holders of record. See "PRINCIPAL SHAREHOLDERS."
Holders of record of Class A Common Stock are entitled to one vote per
share on each matter to be considered and voted upon at the Meeting. Holders of
Class B Common Stock are entitled to ten votes per share on each matter to be
considered and voted upon at the Meeting.
<PAGE>
The Company's Articles of Incorporation also provide that, except as
otherwise required by law or by the Articles of Incorporation, holders of Class
A Common Stock and Class B Common Stock vote together as a single class on all
matters. As a result of the ten-to-one voting preference accorded by the
Articles of Incorporation to shares of Class B Common Stock, as of the Record
Date there were 8,324,916 votes entitled to be cast by the holders of the
outstanding Common Stock, with the holders of the Class B Common Stock entitled
to cast 3,754,130 votes or 45.10% of the votes entitled to be cast on matters
for which the holders of both classes of Common Stock vote together as a single
class. Thus, the holders of the Class A Common Stock possess a majority of the
votes eligible to be cast. See "PROPOSAL ONE - ELECTION OF DIRECTORS Management
Stock Ownership" and "PRINCIPAL SHAREHOLDERS."
In determining whether a quorum exists at the Meeting for purposes of all
matters to be voted on, all votes "for" or "against," as well as all abstentions
(including votes to withhold authority to vote in certain cases), with respect
to the proposal receiving the most such votes, will be counted. The vote
required for the reelection of the ten directors is a plurality of the votes
cast by the shares entitled to vote in the election, provided a quorum is
present. Consequently, with respect to the proposal for the reelection of
directors, abstentions and broker non-votes will not 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. The proposal to ratify Arthur
Andersen LLP as independent auditors will be approved if the votes cast by the
holders of the shares of Common Stock present, or represented, at the Meeting
and entitled to vote on the matter favoring this proposal exceed the votes cast
in opposition to the proposal. Consequently, with respect to this proposal, as
in the proposal for the election of directors, abstentions and broker non-votes
will not 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.
Shares of Common Stock represented by properly executed Proxies, if such
Proxies are received in time and not revoked, will be voted at the Meeting in
accordance with the instructions indicated in such Proxy. IF NO INSTRUCTIONS ARE
INDICATED, SUCH SHARES OF COMMON STOCK WILL BE VOTED FOR THE REELECTION AS
DIRECTORS OF SEACOAST OF THE TEN NOMINEES NAMED IN THE PROXY AND FOR THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS.
A shareholder who has given a Proxy may revoke it at any time prior to its
exercise at the Meeting by either (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) appearing in person at the Meeting and
voting in person. All written notices of revocation or 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: Dennis S. Hudson III, President & Chief Executive Officer.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Meeting is being held to reelect ten directors of Seacoast to serve a
one-year term of office expiring at the 2000 Annual Meeting of Shareholders and
until their successors have been elected and qualified. All of the nominees are
presently directors of Seacoast. Seven have served as directors of Seacoast
since its inception in 1983. Dennis S. Hudson, III was first elected a director
in 1984, and Christopher E. Fogal and Jeffrey S. Furst were elected to the Board
in 1997 following the acquisition of Port St. Lucie National Bank Holding
Corporation. All of the nominees also serve as directors of Seacoast's banking
subsidiary, First National Bank and Trust Company of the Treasure Coast (the
"Bank"). The members of the Boards of Directors of the Bank and the Company are
the same except for Stephen E. Bohner, T. Michael Crook, Marian B. Monroe and A.
Douglas Gilbert, who are members of the Bank's Board only.
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 ten 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 (ten persons).
The affirmative vote of the holders of shares of Common Stock representing
a plurality of the votes cast at the 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 TEN NOMINEES
LISTED BELOW.
The following table sets forth the name and age of each nominee and each
senior executive officer of the Company 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 the Bank, 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 his age and the number of shares of Class A Common Stock
and Class B Common Stock beneficially owned by him as of February 12, 1999. See
"Information About the Board of Directors and Its Committees."
<PAGE>
Name, Age and Shares of Common Stock
Year Beneficially
First Elected or Owned and Percentage
Appointed a Information About of Common Stock
Director Nominee Outstanding (l)
or Executive
Officer
Class A Class B
Nominees:
Jeffrey C. Bruner Mr. Bruner has been a 7,140 (2) 90 (3)
(48) self-employed real (4) (4)
1983 estate investor in
Stuart, Florida since
1972.
John H. Crane Mr. Crane has been 9,409 (4) --
(69) Vice President of C&W
1983 Fish Company, Inc., a
fish processing plant
located in the Stuart,
Florida area, since
1982. He also served as
President of Krauss &
Crane, Inc, an electrical
contracting firm located
in Stuart, Florida, from
1957 through 1997.
Evans Crary, Jr. Mr. Crary is 4,597 (4) 1,665 (4)
(69) retired, but has (5)
1983 served as a member
of 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.
Christopher E. Mr. Fogal, a 20,328 (4) --
Fogal (47) certified public (6)
1997 accountant, has been
a managing partner of
Fogal, Lynch, Johnson
& Long since 1979.
Jeffrey S. Furst Mr. Furst has been 45,208 (4) --
(54) a real estate (7)
1997 broker since 1973
and is owner of Sun
Realty, Inc. in
Port St. Lucie,
Florida.
Dale M. Hudson Mr. Hudson was 440,804 (9) 154,151 (10)
(64) named Chairman of 9.64% 41.06%
1983(8) Seacoast in June
1998. Prior thereto,
he served as Chief
Executive Officer of
Seacoast from 1992
and as President of
Seacoast from 1990.
He was named Chairman
of the Board of the
Bank in September 1992
after serving as Vice
Chairman and President
of the Bank since 1978.
<PAGE>
Dennis S. Mr. Hudson served 318,581 (11) 125,753 (12)
Hudson, Jr. (71) as Chairman of the 6.97% 33.50%
1983 (8) Board of Seacoast
from 1990 to June
1998. He served as
Chief Executive
Officer of Seacoast
from 1983 until 1992
and Chairman of the
Bank from 1969 until
1992.
Dennis S. Mr. Hudson was 253,350 (13) 23,502 (14)
Hudson, III (43) named President and 5.54% 6.26%
1984 (8) Chief Executive
Officer of Seacoast
in June 1998 and has
served as Chief
Executive Officer of
the Bank since 1992.
Prior thereto, he
served as Chief
Operating Officer of
Seacoast since 1990
and President of the
Bank since 1992.
John R. Mr. Santarsiero is 5,387 (4) 1,395 (4)
Santarsiero, Jr. a private investor
(54) and former owner of
1983 an automobile
dealership located
in Stuart, Florida.
Thomas H. Mr. Thurlow has 4,725 (4) --
Thurlow, Jr. been an officer and (15)
(62) a director of
1983 (8) Thurlow & Smith, P.
A., a law firm
located in Stuart,
Florida, since 1981
and has practiced
law in Stuart,
Florida since 1961.
<PAGE>
Executive Officers Who Are Not Also
Nominees or Directors:
A. Douglas Mr. Gilbert, Senior 17,319 (4) --
Gilbert (58) Executive Vice (16)
1990 President, was named
Chief Operating Officer
of Seacoast and President
of the Bank in June 1998.
Mr. Gilbert has served
as Chief Credit Officer
of Seacoast since July
1990, also serving as
Chief Banking Officer
from September 1992 to
October 1995. He was named
Chief Operating and Credit
Officer of the Bank in
October 1994. Prior
thereto, he served as
Executive Vice President
and Chief Banking and
Credit Officer of the Bank
from 1992 to 1994, and
Executive Vice President
and Chief Credit Officer
of the Bank from 1990 to
1992.
C. William Mr. Curtis, Senior 9,602 (4) --
Curtis, Jr. Executive Vice (17)
(60) President, has
1995 served as Chief
Banking Officer of
Seacoast and the Bank
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. Mr. Hahl, Executive 20,733 (4) --
Hahl (50) Vice President/ (18)
1990 Finance Group, has
served as the Chief
Financial Officer of
Seacoast and the
Bank since July
1990.
Nominees and 944,911 291,556
executive 20.67% 77.66%
officers as a
group
13 persons)
<PAGE>
(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 the rules of the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act of 1934, as amended
(the "1934 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 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 both 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 both voting and investment power.
(4) Less than 1%.
(5) Includes 1,268 shares held by the trustee for the IRA of Mr. Crary.
(6) All 20,328 shares are held jointly with Mr. Fogal's wife, as to which
shares Mr. Fogal may be deemed to share both voting and investment power.
(7) Includes 6,069 shares held by the trustee for the IRA of Mr. Furst, and
29,385 shares held jointly with Mr. Furst's wife, as to which shares Mr.
Furst may be deemed to share both voting and investment power. Also
includes 6,449 shares held by Mr. Furst's wife, 1,564 shares held by Mr.
Furst's two children, and 1,214 shares held jointly by Mr. Furst's wife and
mother-in-law, as to which shares Mr. Furst may be deemed to share both
voting and investment power and as to which shares Mr. Furst disclaims
beneficial ownership.
(8) 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.
(9) Includes 41,297 shares held jointly with Mr. Hudson's wife, as to which
shares Mr. Hudson may be deemed to share both voting and investment power.
Also includes 26,025 shares held by Mr. Hudson's wife and 75,787 shares
held by Mr. Hudson's three children, as to which shares Mr. Hudson may be
deemed to share both voting and investment power and as to which Mr. Hudson
disclaims beneficial ownership. Mr. Hudson and his wife, subject to
required regulatory approvals, plan to transfer certain of their shares
into Monroe Partners, Ltd., a family partnership (the "Monroe
Partnership"), of which he and his wife will be the general partners.
(10) Includes 20,649 shares held jointly with Mr. Hudson's wife, as to which
shares Mr. Hudson may be deemed to share both voting and investment power.
Also includes 3,960 shares held by 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 both voting and investment power and to which Mr. Hudson disclaims
beneficial ownership.
<PAGE>
(11) Includes 212,272 shares held by Sherwood Partners, Ltd., a family
partnership (the "Sherwood Partnership") of which Mr. Hudson, his wife,
Anne P. Hudson, and his son, Dennis S. Hudson, III, are general partners.
Mr. Hudson may be deemed to share both voting and investment power with
respect to such shares with the other general partners, and as to which Mr.
Hudson disclaims beneficial ownership except to the extent of his
partnership interests. Also includes 47,417 shares held by Mr. Hudson's
wife and 25,050 shares held by Mr. Hudson's three children, as to which
shares Mr. Hudson may be deemed to share both voting and investment power
and as to which Mr. Hudson disclaims beneficial ownership.
(12) Includes 15,000 shares held by the Sherwood Partnership, as to which shares
Mr. Hudson may be deemed to share both voting and investment power with the
other general partners, and as to which Mr. Hudson disclaims beneficial
ownership, except to the extent of his partnership interests. Also 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 both
voting and investment power and as to which Mr. Hudson disclaims beneficial
ownership.
(13) Includes 212,272 shares held by the Sherwood Partnership of which Mr.
Hudson and his mother and father, Anne P. Hudson and Dennis S. Hudson, Jr.,
are general partners. Mr. Hudson may be deemed to share both voting and
investment power with respect to such shares with the other general
partners, and as to which Mr. Hudson disclaims beneficial ownership, except
to the extent of his partnership interests. Also includes 44 shares held by
Mr. Hudson's two sons, as to which shares Mr. Hudson may be deemed to share
both voting and investment power. Also includes 41,000 shares that Mr.
Hudson has the right to acquire by exercising options that are exercisable
within 60 days after the Record Date.
(14) Includes 15,000 shares held by the Sherwood Partnership, as to which Mr.
Hudson may be deemed to share both voting and investment power with the
other general partners, and as to which Mr. Hudson disclaims beneficial
ownership, except to the extent of his partnership interests.
(15) 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 both voting and investment power.
(16) Includes 200 shares held in Mr. Gilbert's IRA and 14,000 shares that Mr.
Gilbert has the right to acquire by exercising options that are exercisable
within 60 days after the Record Date.
(17) Includes 3,967 shares held by Mr. Curtis' wife as to which shares Mr.
Curtis may be deemed to share both voting and investment power. Also
includes 1,250 shares of a stock grant which becomes vested within 6 months
after the Record Date and 3,666 shares that Mr. Curtis has the right to
acquire by exercising options that are exercisable within 60 days after the
Record Date.
(18) Includes 16,733 shares that Mr. Hahl has the right to acquire by exercising
options that are exercisable within 60 days after the Record Date.
<PAGE>
Information About the Board of Directors and Its Committees
The Board of Directors of Seacoast held eight meetings during 1998. All of
the directors attended at least 75% of the total number of meetings of the Board
of Directors and attended at least 75% of the meetings of the Board committees
on which they served. 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 the Bank.
In addition, the Bank's Board of Directors has the following standing
committees separate from the Company: 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.
The Company'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 the Company's
and the Bank's executive officers and employees, and administers various of the
Company's benefit and incentive plans. This Committee has the power to interpret
the provisions of the Company's 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"), the Seacoast Banking
Corporation of Florida 1996 Long-Term Incentive Plan (the "1996 Incentive Plan")
and the Non- Employee Directors Stock Compensation Plan (the "Directors Stock
Plan"). Five meetings were held by this Committee in 1998. 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, Fogal, and Santarsiero and it held four meetings in 1998.
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 two meetings in its capacity as the Nominating Committee during 1998.
Board members who are not executive officers of the Company are paid an
annual retainer of $20,000 for their service as directors of the Company and its
subsidiaries. In addition to the annual retainers, outside Board members receive
$600 for each Board meeting attended, $600 for each committee meeting attended
and $700 for each committee meeting chaired.
Non-Employee Director Stock Compensation Plan
During 1998, the Board of Directors reserved 25,000 shares of Seacoast
Class A Common stock for issuance under an approved Non- Employee Director Stock
Compensation Plan ("Director Stock Plan"). Under the Director Stock Plan,
non-employee directors of the company or its subsidiary may elect to receive
shares of stock in lieu of some or all of their retainer fee paid for their
services as a director, and/or cash fees paid for attendance at any meeting of
the Board or its committees.
<PAGE>
Executive Officers
Executive officers are appointed annually at the organizational meeting of
the respective Boards of Directors of Seacoast and the Bank 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 "PROPOSAL ONE -
Election of Directors" lists the nominees for election to the Board of Directors
as well as the Named Executive Officers of Seacoast and the Bank 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 Common Stock beneficially owned by each of them on February
12, 1999.
Management Stock Ownership
As of February 12, 1999, based on available information, all directors and
executive officers of Seacoast as a group (13 persons) beneficially owned
approximately 872,012 shares of Class A Common Stock, constituting 19.1% of the
total number of shares of Class A Common Stock outstanding at that date, and
approximately 291,556 shares of Class B Common Stock, constituting 77.7% of the
total number of shares of Class B Common Stock outstanding at that date.
Seacoast's directors and executive officers beneficially owned, as of that date,
shares of Common Stock having 3,787,572 votes, or 45.5% of the total votes
represented by Common Stock outstanding on the Record Date and entitled to vote
at the Annual Meeting. In addition, as of the Record Date, various subsidiaries
of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting
power over 92,965 shares, or 2.0% of the issued and outstanding shares, of
Seacoast Class A Common Stock, and 300 shares of Class B Common Stock, including
shares held as trustee or agent of various Seacoast employee benefit and stock
purchase plans. See "Record Date, Solicitation and Revocability of Proxies" and
"PRINCIPAL SHAREHOLDERS."
EXECUTIVE COMPENSATION
Under rules established by the SEC, the Company 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 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.
<PAGE>
Salary and Benefits Committee Report
General
During 1998, the Salary and Benefits Committee of the Board of Directors
was composed entirely of five members, four of whom were not officers or
employees of Seacoast or the Bank at any time during the year. 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 the Company'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,
performance-based executive officer compensation includes: base salary,
short-term annual cash 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 to evaluate 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 Company performance.
Short-Term Incentives
Seacoast's Key Manager Incentive Plan seeks 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 the Company's chief executive officer, approves awards to
those officers who have made superior contributions to Company 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 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 $344,700 in 1998, which was distributed among 17 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 the Company'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. During
1998, options on 156,000 shares of Class A Common Stock were awarded to 25 key
employees under the 1996 Incentive Plan, including four of the Named Executive
Officers. A restricted stock award for 4,000 shares of Class A Common Stock was
also granted to one key middle manager of the Bank under the 1996 Incentive Plan
to provide additional incentive for that employee to remain in the service of
the company and to reward outstanding performance.
<PAGE>
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 the Company and the Bank 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 the Company's strategic performance plan and the
initiatives taken to direct the Company. In addition, utilizing published
surveys, databases, and proxy statement data, including, for example, public
information compiled from the SNL Executive Compensation Report (collectively,
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 nationally, 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 Salary
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 the Survey Data, the salary for Mr. Dennis S. Hudson, III
was increased by $13,700 to $306,600 annually effective January 1, 1999. This
increase followed a $20,000 adjustment following his appointment as President
and Chief Executive Officer of Seacoast in June 1998. The annual salary for Mr.
A. Douglas Gilbert was increased by $14,300 to $300,300 effective January 1,
1999. This increase followed a $40,000 adjustment upon his appointment as
President of the Bank in June 1998. The annual salary for Mr. Dale M. Hudson,
Chairman of the Board of Seacoast, was increased by $25,900 to $200,000. These
adjustments maintained their respective total compensation at the median of the
comparative groups. Seacoast's earnings growth in 1998 continued to be limited
by the geographic expansion initiatives begun during 1997. Accordingly, Mr.
Hudson, III's cash incentive award under the Key Manager Incentive Plan was
reduced from $94,000 in 1996 and $40,000 in 1997 to $38,400 in 1998, and Mr.
Gilbert's cash incentive award was reduced from $94,000 in 1996 and $63,000 in
1997 to $60,500 in 1998.
Summary
In summary, the Salary and Benefits Committee believes that Seacoast's
compensation program is reasonable and competitive with compensation paid by
other financial institutions of similar size. The program is designed to reward
managers for strong personal, Company and share value performance. The Salary
and Benefits Committee monitors the various guidelines that make up the program
and reserves the right to adjust them as necessary to continue to meet Company
and shareholder objectives.
Evans Crary, Jr., Chairman Marian B. Monroe
Jeffrey C. Bruner John R. Santarsiero, Jr.
Dennis S. Hudson, Jr.
<PAGE>
The table below sets forth certain elements of compensation for the Named
Executive Officers of Seacoast or the Bank for the periods indicated.
Summary Compensation Table
Annual Compensation
-----------------------------
Year Salary Bonus
Name and Principal (b) ($)(c) ($)(1)(d)
Position(a)
Dennis S. Hudson, III 1998 $294,903 $38,400
President & Chief 1997 253,967 40,000
Executive Officer of 1996 236,388 94,500
Seacoast, Chairman and
Chief Executive
Officer of the Bank
Dale M. Hudson 1998 $196,062 --
Chairman of Seacoast 1997 167,659 --
1996 161,027 --
A. Douglas Gilbert 1998 $284,927 $60,500
Senior Executive Vice 1997 233,735 63,000
President & Chief 1996 215,839 94,500
Operating & Credit
Officer of Seacoast,
President & Chief
Operating & Credit
Officer of the Bank
C. William Curtis, Jr. 1998 $199,015 $48,000
Senior Executive Vice 1997 171,184 50,000
President & Chief 1996 169,756 64,000
Banking Officer of
Seacoast and the Bank
William R. Hahl 1998 $180,568 $15,000
Executive Vice 1997 160,455 10,000
President & Chief 1996 149,131 30,000
Financial Officer of
Seacoast and the Bank
<PAGE>
Long-Term Compensation
---------------------------
Securities
Under-
Restricted lying All
Stock Options/ Other
Name and Principal Year Awards SARs Compensation
Position(a) (b) ($)(f) (#)(g ($)(i)
Dennis S. Hudson, III 1998 -- -- 22,000 $21,415 (2)
President & Chief 1997 -- 6,000 $20,144
Executive Officer of 1996 -- -- 6,000 27,546
Seacoast, Chairman
and Chief Executive --
Officer of the Bank
Dale M. Hudson 1998 -- -- -- $17,077 (3)
Chairman of Seacoast 1997 -- -- -- 16,223
1996 -- -- -- 16,932
A. Douglas Gilbert 1998 -- -- 22,000 $20,734 (4)
Senior Executive Vice 1997 -- -- 6,000 19,086
President & Chief 1996 -- -- 6,000 22,247
Operating & Credit
Officer of Seacoast,
President & Chief
Operating & Credit
Officer of the Bank
C. William Curtis, 1998 -- 22,000 $17,084 (5)
Jr. 1997 -- 6,000 19,109
Senior Executive Vice 1996 111,250 (6) 11,000 11,572
President & Chief
Banking Officer of
Seacoast and the Bank
William R. Hahl 1998 -- 7,000 $16,539 (7)
Executive Vice 1997 -- 4,000 16,149
President & Chief 1996 -- 4,000 16,400
Financial Officer of
Seacoast and the Bank
(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 excess life insurance benefits, $8,528 in employer
matching contributions to the Profit Sharing Plan, $4,256 in profit
sharing, $5,675 in employer discretionary retirement contributions, and
$550 paid by the employer into the Cafeteria Plan.
<PAGE>
(3) This includes $2,406 in excess life insurance benefits, $7,763 in employer
matching contributions to the Profit Sharing Plan, $2,725 in profit
sharing, $3,633 in employer discretionary retirement contributions, and
$550 paid by the employer into the Cafeteria Plan.
(4) This includes $2,406 in excess life insurance benefits, $8,408 in employer
matching contributions to the Profit Sharing Plan, $4,016 in profit
sharing, $5,354 in employer discretionary retirement contributions, and
$550 paid by the employer into the Cafeteria Plan.
(5) This includes $2,406 in excess life insurance benefits, $7,764 in employer
matching contributions to the Profit Sharing Plan, $2,728 in profit
sharing, $3,637 in employer discretionary retirement contributions, and
$550 paid by the employer into the Cafeteria Plan.
(6) This amount represents a restricted stock award of 5,000 shares of the
Company's Class A Common Stock which was awarded to Mr. Curtis on March 29,
1996, based on the closing sale price of the Company's Class A Common Stock
on the Nasdaq Stock Market on March 29, 1996. One quarter of the shares
covered by this award vested on March 29, 1997 and one quarter of the
shares vested on March 29, 1998. The remaining shares will, as long as Mr.
Curtis remains employed by the Company, vest in increments of 1,250 shares
on March 29, 1999 and 2000. Mr. Curtis has full voting and dividend rights
with respect to the restricted stock during the vesting period.
(7) This includes $2,406 in excess life insurance benefits, $7,668 in employer
matching contributions to the Profit Sharing Plan, $2,535 in profit
sharing, $3,380 in employer discretionary retirement contributions, and
$550 paid by the employer into the Cafeteria Plan.
<PAGE>
Grants of Options/SARs in 1998
The following table sets forth certain information concerning options
granted during 1998 to the Named Executive Officers. No stock appreciation
rights ("SARs") were granted in 1998.
Individual Grants
----------------------------------------------
Percent
Number of of Total
Securities Options/
Under- SARs Exercise
lying Granted or Base
Options/ to Price
SARs Employees ($/Share Expiration
Granted in Fiscal ) Date
Name (#) Year
Dennis S. 22,000 14.10% $29.00 June 30,
Hudson, III 2008
Dale M. Hudson -- -- -- N/A
A. Douglas 22,000 14.10% $29.00 June 30,
Gilbert 2008
C. William 22,000 14.10% $29.00 June 30,
Curtis, Jr. 2008
William R. Hahl 7,000 4.49% $29.00 June 30,
2008
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term
Name 5%($) 10%($)
Dennis S. Hudson, III $401,280 $1,016,840
Dale M. Hudson N/A N/A
A. Douglas Gilbert $401,280 $1,016,840
C. William Curtis, Jr. $401,280 $1,016,840
William R. Hahl $127,680 $323,540
<PAGE>
Aggregated Option/SAR Exercises in 1998
and 1998 Year-End Option/SAR Values
The following table shows stock options exercised by the Named Executive
Officers during 1998, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable options as of December 31, 1998. Also reported
are the values for "in-the-money" options, which represent the positive spread
between the exercise price of any such existing options and the year-end price
of the Company's Class A Common Stock. No SARs were outstanding in 1998.
Value of
Number of Unexercised
Unexercised In-the-
Options/SARs Money
at FY-End Options/
Shares Value (#) SARs at FY-
Acquired Realized Exercisable End($)
on (E)/ Exercisable
Exercise Unexercis- (E)/
Name able (U) Unexercis-
able (U)
Dennis S. -- -- 39,000 (E) $489,875(E)
Hudson, III 34,000 (U) $65,500(U)
Dale M. Hudson -- -- -- (E) --(E)
-- (U) --(U)
A. Douglas 6,000 $96,212 12,000 (E) $120,500(E)
Gilbert 34,000 (U) $65,500(U)
C. William -- -- 3,666 (E) $24,287(E)
Curtis, Jr. 35,334 (U) $65,838(U)
William R. 4,000 $64,500 15,066 (E) $148,828(E)
Hahl 15,334 (U) $47,293(U)
<PAGE>
Report on Repricing of Options / SARs
In June 1998, options to purchase a total of 156,000 shares of Class A
Common Stock were granted to 25 key employees under the 1996 Incentive Plan,
including four of the Named Executive Officers. On November 10, 1998, the Salary
and Benefits Committee of the Board of Directors approved a reduction in the
exercise price of these stock options from $38.00 per share to $29.00 per share,
the fair market value of the Company's Class A Common Stock on that date. The
repricing was approved by the Salary and Benefits Committee to restore the value
of the stock options which, as a result of a significant decline in the
securities markets, especially financial institutions, and the price of the
Class A Common Stock, had ceased to provide an incentive for valued employees,
officers, and directors to remain in the service of the Company and the Bank.
The affected options were amended to reduce the exercise prices to the fair
market value of the underlying stock on the date of the repricing. All other
terms of the options remained the same.
As set forth in the 1996 Incentive Plan, stock options are intended to
provide incentives to the Company's officers and employees. The Salary and
Benefits Committee believes that such equity incentives are a significant factor
in the Company's ability to attract, retain and motivate key employees who are
critical to the Company's long-term success. The Salary and Benefits Committee
believed that, at their original exercise prices, the disparity between the
exercise price of these options and recent market prices for the Company's Class
A Common Stock did not provide meaningful incentives to the employees holding
these options. The Committee also believes that the decline in the values of
financial institution stocks generally, and the Company's stock, following
market disruptions in the Summer and Fall of 1998, are unrelated to the
Company's or its key employees' performance, and that maintaining such exercise
prices was inappropriate. The Salary and Benefits Committee approved the
repricing of these options as a means of ensuring that optionees will continue
to have meaningful equity incentives to work toward the success of the Company.
Submitted by the members of the Salary and Benefits Committee:
Evans Crary, Jr., Chairman Marian B. Monroe
Jeffrey C. Bruner John R. Santarsiero, Jr.
Dennis S. Hudson, Jr.
<PAGE>
Ten-Year Option/SAR Repricings
Market
Number of Price of
Securities Stock at
Underlying Time of
Options/SARs Repricing
Repriced or or
Name Date Amended (#) Amendment
($)
Dennis S. Hudson, III 11/10/98 22,000 $29.00
President & Chief
Executive Officer
A. Douglas Gilbert 11/10/98 22,000 $29.00
Senior Executive
Vice President &
Chief Operating &
Credit Officer
C. William Curtis, Jr. 11/10/98 22,000 $29.00
Senior Executive
Vice President &
Chief Banking
Officer
William R. Hahl 11/10/98 7,000 $29.00
Executive Vice
President & Chief
Financial Officer
Exercise Length of
Price at Original
Time of Option Term
Repricing New Remaining
or Exercise at Date of
Amendment Price Repricing or
Name ($) ($) Amendment
Dennis S. Hudson, III $38.00 $29.00 9.5 years
President & Chief
Executive Officer
A. Douglas Gilbert $38.00 $29.00 9.5 years
Senior Executive Vice
President & Chief
Operating & Credit
Officer
C. William Curtis, Jr. $38.00 $29.00 9.5 years
Senior Executive Vice
President & Chief
Banking Officer
William R. Hahl $38.00 $29.00 9.5 years
Executive Vice
President & Chief
Financial Officer
<PAGE>
Profit Sharing Plan
Seacoast sponsors an Amended and Restated Retirement Savings Plan for
Employees of the First National Bank & Trust Company of the Treasure Coast (the
"Profit Sharing Plan"). The Profit Sharing Plan has various features, including
employer matching contribution for salary deferrals of up to 4% of the
employee's compensation for each calendar quarter. The Company matches 100% of
any Elective Profit Sharing Contribution that is deferred into the Profit
Sharing Plan. In addition, the Profit Sharing Plan has a Code Section 401(k)
feature that allows employees to make voluntary "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.
A retirement contribution is made on an annual discretionary basis by the
Company of up to 2% of "retirement eligible compensation," as defined in the
Profit Sharing Plan. At the end of each plan year, the Company's Board of
Directors decides whether to make a profit sharing contribution for the plan
year. If it decides to make such a contribution, the contribution is allocated
among eligible employees based on each employee's "eligible compensation" as
defined in the Profit Sharing Plan. At least 50% of this contribution (the
"Non-Elective Profit Sharing Contribution") is contributed to the employee's
Profit Sharing account. The balance (the "Elective Profit Sharing Contribution")
may be deferred into the Profit Sharing Plan or taken in cash by the employee,
at the employee's election.
Performance Graph
The following line-graph compares the cumulative, total return on Seacoast's
Class A Common Stock from December 31, 1993 to December 31, 1998, 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.
1993 1994 1995 1996 1997 1998
Seacoast 100 101.41 134.95 165.36 250.07 190.15
Nasdaq Stock Market 100 96.80 135.44 166.19 202.15 282.26
Nasdaq Bank Stocks 100 101.11 146.42 184.71 302.17 266.60
<PAGE>
Employment and Severance Agreements
The Bank entered into an executive employment agreement with A. Douglas
Gilbert on March 22, 1991. Similar agreements were 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
neither the employee nor the Bank gives written notice electing not to renew
such agreement 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 the Bank'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 the Bank 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 the Bank'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 certain events,
including the acquisition of the Bank or the Company in a merger, consolidation
or similar transaction, the acquisition of 51% or more of the voting power of
any one or all classes of Common Stock, the sale of all or substantially all of
the assets, and certain other changes in share ownership, will constitute a
"change in control" which would allow the executive to 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, the executive's base salary,
hospitalization and other health benefits will continue for two years.
<PAGE>
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. Mr. Hudson was
the only member of the Salary and Benefits Committee that was also an officer or
employee of Seacoast or its subsidiaries during 1998. Mr. Hudson served as
Chairman of the Board of Seacoast from 1990 until June 1998; he served as Chief
Executive Officer of Seacoast from 1983 until 1992 and President of Seacoast
from 1983 until 1990. See "PROPOSAL ONE - Election of Directors".
James H. Bruner, a Seacoast Director Emeritus and the father of Jeffrey C.
Bruner, a director of Seacoast and the Bank, is a controlling shareholder of
Mayfair Investments. Jeffrey C. Bruner is a minority shareholder in the same
company, which leases to the Bank 20,000 square feet of space adjacent to the
First National Center in Stuart, Florida pursuant to two lease agreements which
expire in May 2000 and May 2002. At the end of the lease terms, the Bank has
options to extend the leases for periods of three and five years, respectively.
The Bank paid rent of $226,839 on this property in 1998. Seacoast believes the
terms of these leases are commercially reasonable and comparable to rental terms
for similar property in Stuart.
Evans Crary, Jr., a director of Seacoast and the Bank, and Chairman of the
Bank's Executive Committee and the Company's Salary and Benefits Committee, is a
retired member of Crary, Buchanan, Bowdish, Bovie, Lord & Roby, Chartered
("Crary, Buchanan"), a law firm in Stuart, Florida. Crary, Buchanan performed
various legal services for Seacoast and the Bank during the fiscal year ended
December 31, 1998.
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 the Bank to directors, executive officers, and
related parties of Seacoast or the Bank as of December 31, 1998, was
approximately $5,921,859, which represented approximately 7.55% of Seacoast's
consolidated shareholders' equity on that date.
For information concerning specific transactions and business relationships
between Seacoast or the Bank and certain of its directors or executive officers,
see "Salary and Benefits Committee Interlocks and Insider Participation."
<PAGE>
PRINCIPAL SHAREHOLDERS
As of February 12, 1999, 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 Class A Common Stock or Class B Common
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 Common Class B Common
Stock Stock
Beneficially Beneficially
Owned Owned
-------------------------------------
Name and Address of
Beneficial Owner Number % Number %
Dale M. Hudson (1) (2) 440,804 9.64 154,151 41.06
192 S.E. Harbor Point
Drive
Stuart, FL 34996
Dennis S. Hudson, Jr. 318,581 6.97 125,753 33.50
(1) (3)
157 S. River Road
Stuart, FL 34996
Dennis S. Hudson, III 253,350 5.54 23,502 6.26
(1) (3)
2341 NW Bay Colony
Court
Stuart, FL 34994
Anne P. Hudson, (1) (3) 318,581 6.97 125,753 33.50
157 S. River Road (4) (5)
Stuart, FL 34996
First Union Corporation 284,824 6.24 -- --
(6)
One First Union Center
Charlotte, North
Carolina 28288
(1) Dennis S. Hudson, Jr. and Dale M. Hudson are brothers. Anne P. Hudson is
the wife of Dennis S. Hudson, Jr. Dennis S. Hudson, III is the son of
Dennis S. Hudson, Jr. and the nephew of Dale M. Hudson. See the table under
"Proposal One - Election of Directors" for further information on their
beneficial ownership.
(2) Dale M. Hudson, and his wife, Mary T. Hudson, subject to notice to and
approval by the appropriate regulatory authorities, plan to transfer
certain of their shares of Company Class A and Class B Common Stock to the
Monroe Partnership, of which they will be the general partners. See
"Proposal One - Election of Directors" for further information regarding
their beneficial ownership.
<PAGE>
(3) Dennis S. Hudson, Jr. and his wife, Anne P. Hudson, together with their
son, Dennis S. Hudson, III, are the general partners of the Sherwood
Partnership, their family partnership, which as of February 12, 1999 owned
212,272 share of Company Class A Common Stock and 15, 000 shares of Company
Class B Common Stock. Mr. and Mrs. Dennis Hudson, Jr., subject to notice to
and approval by the appropriate regulatory authorities, plan to transfer
certain of their remaining shares of Company Class A and Class B Common
Stock to the Sherwood Partnership. Each of Dennis S. Hudson, Jr., Anne P.
Hudson and Dennis S. Hudson, III, as general partners, may be deemed to
share voting and investment power with the other general partners and each
of them disclaims beneficial ownership with respect to such shares except
to the extent of their respective partnership interests. See the table
under "Proposal One - Election of Directors" for further information
regarding their beneficial ownership.
(4) Includes 33,842 shares held by Mrs. Hudson's husband and 25,050 shares held
by Mrs. Hudson's three children, as to which shares Mrs. Hudson may be
deemed to share both voting and investment power and as to which Mrs.
Hudson disclaims beneficial ownership.
(5) Includes 80,774 shares held by Mrs. Hudson's husband, 6,270 shares held by
Mrs. Hudson's three children, as to which shares Mrs. Hudson may be deemed
to share both voting and investment power and as to which Mrs. Hudson
disclaims beneficial ownership.
(6) First Union Corporation ("First Union") is the parent holding company of
Lieber & Company ("Lieber"), Evergreen Asset Management Corporation
("Evergreen") and First Union National Bank, Charlotte, NC. 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 entity listed above holds the securities reported in a fiduciary
capacity for its customers. Of the shares beneficially owned, First Union
reports it has sole voting power as to 219,624 shares and sole dispositive
power as to 212,800 shares. The information regarding First Union,
including the number and percent of Class A Common Stock beneficially
owned, is based solely upon a Schedule 13G dated February 11, 1999 and
filed by First Union with respect to Class A Common Stock beneficially
owned as of December 31, 1998.
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The 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, 1999, subject to ratification by the 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 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.
All shares represented by valid Proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made, the Proxies will be voted
for the ratification of the appointment of Arthur Andersen LLP for the fiscal
year ending December 31, 1999.
The affirmative vote of the holders of shares of Common Stock representing
a majority of the votes represented at the Meeting, at which a quorum is
present, is required to ratify the appointment of Arthur Andersen LLP as
independent auditors.
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, 1999.
SECTION 16(a) REPORTING
The Company 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 the Company's securities.
Based on material provided to the Company, the Company believes that all such
filing requirements with respect to the Company's fiscal year ended December 31,
1998 were complied with.
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SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of shareholders of Seacoast intended to be presented at the 2000
Annual Meeting of Shareholders must be received by Seacoast at its principal
executive offices on or before November 19, 1999, in order to be included in
Seacoast's Proxy Statement and Proxy relating to the 2000 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 Meeting other than those described above. If any other matters properly come
before the Meeting, the persons designated as Proxies will vote on such matters
in accordance with their best judgment.
OTHER INFORMATION
Proxy Solicitation Costs
The cost of soliciting Proxies for the Meeting will be paid by Seacoast. In
addition to the solicitation of shareholders of record by mail, telephone,
facsimile or personal contact, Seacoast will be contacting brokers, dealers,
banks, or voting trustees or their nominees who can be identified as record
holders of Common Stock; such holders, after inquiry by Seacoast, will provide
information concerning quantities of proxy materials and 1998 Annual Reports
needed to supply such information to beneficial owners, and Seacoast will
reimburse them for the reasonable expense of mailing proxy materials and 1998
Annual Reports to such persons.
Annual Report on Form 10-K
Upon the written request of any person whose Proxy is solicited by this
Proxy Statement, Seacoast will furnish to such person without charge (other than
for exhibits) a copy of Seacoast's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998, including financial statements and schedules
thereto, as filed with the Securities and Exchange Commission. Requests may be
made to Seacoast Banking Corporation of Florida, P.O. Box 9012, Stuart, Florida
34995, Attention: Dennis S. Hudson III, President & Chief Executive Officer.
By Order of the Board of
Directors,
DENNIS S. HUDSON III
President & Chief Executive
Officer
March 17, 1999
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