<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
SEA PINES ASSOCIATES, INC.
- --------------------------------------------------------------------------------
(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> 2
FEBRUARY 17, 1998
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 14, 1998
TO THE SHAREHOLDERS OF SEA PINES ASSOCIATES, INC.:
The 1998 Annual Meeting of Shareholders of Sea Pines Associates, Inc.
(the "Company"), will be held in the CRYSTAL BALLROOM, CROWNE PLAZA RESORT IN
SHIPYARD PLANTATION, Hilton Head Island, South Carolina, on Saturday, March 14,
1998, at 3:00 p.m., local time, for the following purposes:
1. To elect five directors to hold office until their successors are
chosen and qualified;
2. To ratify the appointment of Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending October 31,
1998; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on January 12,
1998, as the record date for determining the shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof. The transfer books of
the Company will not be closed.
A copy of the Company's 1997 Annual Report to Shareholders is enclosed.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE VOTE,
DATE, AND SIGN THE ENCLOSED PROXY BALLOT AND RETURN IT IN THE ENCLOSED ENVELOPE.
YOUR VOTE IS IMPORTANT WHETHER YOU OWN A FEW OR MANY SHARES. IF YOU ARE
PRESENT AT THE MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AND VOTE YOUR
SHARES PERSONALLY.
By order of the Board of Directors,
/s/ Angus Cotton
----------------------------
Angus Cotton
Secretary
<PAGE> 3
SEA PINES ASSOCIATES, INC.
P. O. BOX 5965
HILTON HEAD ISLAND, SOUTH CAROLINA 29938
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 14, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies by and on behalf of the Board of Directors of Sea Pines Associates,
Inc. ("the Company") to be voted at the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held at 3:00 P.M. LOCAL TIME, ON SATURDAY,
MARCH 14, 1998, AT THE CRYSTAL BALLROOM, CROWNE PLAZA RESORT IN SHIPYARD
PLANTATION, HILTON HEAD ISLAND, SOUTH CAROLINA, and at any adjournments of such
meeting, for the purposes set forth in the accompanying notice. This Proxy
Statement and the accompanying proxy card are first being mailed to shareholders
on or about February 17, 1998.
USE AND REVOCATION OF PROXIES
When proxies are properly executed and returned, the shares they
represent will be voted at the meeting in accordance with any directions noted
thereon, and if no directions are noted, they will be voted FOR each of the
proposals noted herein. Execution of the accompanying proxy will not affect a
shareholder's right to attend the Annual Meeting and vote in person. A
shareholder may revoke a proxy at any time before it is exercised by written
notification to the Company sent to the attention of the Company's Secretary at
Post Office Box 5965, Hilton Head Island, South Carolina 29938, and received
prior to the Annual Meeting date or by attending the Annual Meeting and
indicating that the proxy is revoked or by appointment of a substitute proxy.
SOLICITATION
The accompanying proxy is solicited by and on behalf of the Board of
Directors. The expense of solicitation, which is not expected to exceed the
normal expense of a proxy solicitation for a meeting of shareholders at which
directors are elected, will be borne by the Company. In addition, the directors,
officers and employees of the Company and its subsidiaries may solicit proxies,
personally or by telephone, but at no additional salary or compensation.
<PAGE> 4
OUTSTANDING VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has set the close of business on January 12,
1998, as the record date for determination of shareholders entitled to notice of
and to vote at the Annual Meeting. As of such date, the total number of
outstanding shares of the Company's voting common stock, no par value (the
"Common Stock"), was 1,842,525 held by approximately 637 shareholders of record.
Each share of Common Stock is entitled to one vote on each matter presented for
a vote at the Annual Meeting. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of the Common Stock is necessary
to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
will be counted for purposes of determining the presence or absence of a quorum.
Abstentions and broker non-votes will have the same effect as a vote to withhold
authority in the election of directors or a negative vote on proposals. Common
Stock is the only class of outstanding voting securities of the Company entitled
to be voted at the Annual Meeting.
ITEM 1
ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting. The Company's
Articles of Incorporation provide for a classified Board of Directors which as
of the date of this Proxy Statement consists of fifteen directorships divided
into three classes of directorships whose terms will expire on the dates of the
Annual Meetings of Shareholders as follows: Five directorships will expire at
this year's Annual Meeting, five directorships will expire in 1999 and five
directorships will expire in 2000.
The five nominees listed below have been nominated by the Nominating
Committee of the Board of Directors to serve three year terms or until their
respective successors shall have been elected and qualified. In accordance with
the Company's Articles of Incorporation, if a quorum is present at the Annual
Meeting, the affirmative vote of a majority of the shares of Common Stock
entitled to vote for the election of directors is required to elect each
director of the Company.
A shareholder executing the enclosed proxy card may vote for any or all
of the nominees or may withhold such shareholder's vote from any or all
nominees. Unless otherwise instructed or unless authority to vote is withheld,
the enclosed proxy will be voted for the election of the nominees listed below.
Although it is not contemplated that any nominees will become unable to serve
prior to the Annual Meeting, the persons named on the enclosed proxy card shall
have authority to vote for the election of other persons in accordance with
their best judgment. Each of the nominees is nominated to serve a full three
year term.
2
<PAGE> 5
Set forth below is certain biographical information regarding the five
nominees as of February 2, 1998.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
NAME, AGE, AND ADDRESS BIOGRAPHICAL INFORMATION
- ---------------------- ------------------------
Angus Cotton (72) Mr. Cotton, founding director, has served as
7 Willet Road a director since 1987. He is currently the
Hilton Head Island, SC 29928 Secretary of the Company. He currently
serves as Chairman of the Commissioners of
the Technical College of the Low Country and
is a co-founder and Treasurer of the
Heritage Classic Foundation. He retired from
Marriott Hotels and Resorts where he had
been an Executive Vice President.
P. R. Easterlin, Jr. (56) Mr. Easterlin has served as a director since
4800 Amelia Island Parkway 1989. He is President of Heritage
Amelia Island, FL 32034 Properties, Inc. and Florida Properties,
Inc. He was one of the founding directors of
Atlantic Savings Bank and served on the
Board of Trustees of Hilton Head Preparatory
School for six years.
James L. Gray (62) Mr. Gray has served as a director since
32 Club Course Drive 1995. He retired in 1994 as Vice Chairman of
Hilton Head Island, SC 29928 Time Warner Cable. He previously served as
President of Warner Cable Communications
from 1986 through 1992. During his twenty
years in cable television, he also served as
a Director of Turner Broadcasting System and
the Cable Satellite Public Affairs Network
(C-Span).
John G. McGarty (60) Mr. McGarty has served as a director since
2 Mockingbird Lane 1992. He was President and Owner of
Hilton Head Island, SC 29928 Charleston Valve and Fitting Company, a
distributor of industrial products, retiring
in 1989 after twenty-seven years. He
formerly served on the Board of Regents of
Georgetown University. He presently serves
on the Community Services Associates, Inc.
Board of Directors.
3
<PAGE> 6
Joseph F. Vercellotti (68) Mr. Vercellotti has served as a director
18 Old Military Road since 1995. He retired in 1987 after a 35
Hilton Head Island, SC 29928 year general management, strategic planning
and marketing career with General Electric
Company, to pursue interests in management
consulting, primarily with high-tech, start
up firms. He presently serves on the
Community Services Associates, Inc. Board of
Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES LISTED ABOVE.
Set forth below is certain biographical information concerning the directors
whose terms extend beyond the Annual Meeting.
DIRECTORS WHOSE TERMS EXPIRE IN 2000
NAME, AGE, AND ADDRESS BIOGRAPHICAL INFORMATION
- ---------------------- ------------------------
Paul B. Barringer, II (67) Mr. Barringer has served as a director since
14 South Calibogue Cay 1997. He is Chairman and CEO of Coastal
Hilton Head Island, SC 29928 Lumber Company, headquartered in Weldon,
North Carolina. He is a member of the Board
of Directors of Southern National
Corporation, the holding company for BB&T
Financial Corporation. He currently serves
on the board of several educational
institutions and is an active board member
of various civic and industry associations.
Norman P. Harberger (68) Mr. Harberger has served as a director since
22 Oyster Landing Road 1993. He is currently the Vice Chairman of
Hilton Head Island, SC 29928 the Company. He is President and owner of
Harberger & Associates, Inc., management
consultants. He was previously an executive
of Rohm and Haas Company, retiring as that
firm's Administrative Vice President in
1986.
Michael E. Lawrence (53) Mr. Lawrence has served as a director since
46 Baynard Park Road 1994. He currently serves as Chief Executive
Hilton Head Island, SC 29928 Officer of the Company. He has served as
President of Sea Pines Company, Inc. since
November 1994, and as its Vice President and
Chief Financial Officer from February 1991
to November 1994 and as its Controller from
February 1990 to February 1991. Formerly, he
was a partner in the Management Consulting
Division of Ernst & Young LLP.
4
<PAGE> 7
Thomas C. Morton (56) Mr. Morton has served as a director since
20 Harleston Green 1991. He is a certified public accountant
Hilton Head Island, SC 29928 who has owned and operated tax and
accounting practices in Michigan and South
Carolina since 1974. Prior to that he spent
10 years in the audit and tax departments of
the international accounting firm of
Deloitte & Touche.
Robert W. Siler, Jr. (69) Mr. Siler has served as a director since
414 Baynard Cove Club 1997. He retired in 1993 as Chairman/CEO of
Hilton Head Island, SC 29928 Hammer, Siler, George Associates, an
international economic and development
consulting firm based in Silver Spring,
Maryland. He is a principal in Elgin Land
Company, LLC, a Texas investment firm, and
serves on the Hilton Head Island Planning
Commission.
DIRECTORS WHOSE TERMS EXPIRE IN 1999
NAME, AGE, AND ADDRESS BIOGRAPHICAL INFORMATION
- ---------------------- ------------------------
Thomas G. Daniels (73) Mr. Daniels, founding director, has served
21 Baynard Park Road as a director since 1987. He retired as a
Hilton Head Island, SC 29928 Vice President of Ford Motor Company in
1984. Prior to his retirement, he also
served as a Vice President of Ford of Europe
and as a Director of Ford of Europe, Britain
and Germany.
Ralph L. Dupps, Jr. (52) Mr. Dupps has served as a director since
30 East Beach Lagoon Road 1995. He is President of Dupps and Company
Hilton Head Island, SC 29928 and a partner in NWI, a real estate
development company. He is currently
Chairman of the Board of Directors of
Atlantic Savings Bank, a director of Forked
Deer River Corporation, a land holding
company, a member of the Wachovia Bank of
South Carolina Advisory Board, a member of
the Hilton Head Preparatory School Board of
Trustees and a member of the Hilton Head
Museum Board of Directors. Mr. Dupps is also
Chairman of the Town of Hilton Head Island
Housing Commission.
Charles W. Flynn (71) Mr. Flynn, founding director, served as a
13 Pine Island Court director from 1987 through 1990. He is
Hilton Head Island, SC 29928 currently the Chairman of the Company. He
retired in 1980 from Ford Motor Company as
the Director of Dealer Development. Prior to
his employment with Ford, he was an agent
for the Federal Bureau of Investigation.
5
<PAGE> 8
Arthur P. Sundry (68) Mr. Sundry has served as a director since
35 South Beach Lane 1993. He retired in 1990 as President and
Hilton Head Island, SC 29928 General Manager of the Communications
Sector, Motorola, Inc. During his 34 years
with Motorola, he served in various
management and executive positions.
Frank E. Zimmerman, Jr. (72) Mr. Zimmerman, founding director, has served
31 Audubon Pond Road as a director since 1987. He retired as an
Hilton Head Island, SC 29928 executive of Ford Motor Company in 1977.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met 11 times during fiscal year 1997. Only
Messrs. Barringer and Gray attended fewer than 75 percent of the aggregate of
(a) the total number of meetings of the Board of Directors and (b) the total
number of meetings held by all committees of the Board of Directors on which
such director served.
Pursuant to the by-laws of the Company, the Board of Directors has
established standing Audit, Finance, Nominating, and Personnel and Compensation
Committees, each of which held meetings during fiscal year 1997.
The Audit Committee, composed of Messrs. McGarty and Morton makes
recommendations regarding the certified public accountants serving the Company,
considers the adequacy of internal accounting controls and undertakes other
activities related to the fiscal affairs of the Company. No directors of the
Company who are also executive officers may serve on the Audit Committee. The
Audit Committee met 2 times during fiscal year 1997.
The Finance Committee, composed of Messrs. Flynn, Gray, Lawrence,
Morton, Sundry, and Barringer met 9 times during fiscal year 1997. The Committee
reviews and makes recommendations regarding matters concerning the financial
condition of the Company and provides advice to the Company's management on
financial and accounting matters.
The Nominating Committee, composed of Messrs. Cotton, Daniels, Dupps,
Gray, and Vercellotti designates on behalf of the Board of Directors candidates
for the directors of the class to be elected at the next Annual Meeting of
shareholders. There is no formal procedure for the submission of shareholder
recommendations for nomination. The Nominating Committee met 3 times during
fiscal year 1997.
The Personnel and Compensation Committee, composed of Messrs.
Harberger, Cotton, and Vercellotti met 8 times during fiscal year 1997. The
Committee considers and oversees the development of programs to attract and
equitably compensate employees
6
<PAGE> 9
to ensure the economic success of both the employee and the Company, including
its subsidiaries. No officers or employees of the Company or its subsidiaries
served on the Personnel and Compensation Committee or participated in
deliberations of such Committee concerning executive officer compensation.
REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
CONCERNING EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Personnel and Compensation Committee of the Board of Directors
recommends to the full Board all policies under which compensation is paid or
awarded to the Company's executive officers. No Director who is employed by the
Company serves on the Personnel and Compensation Committee, nor is any such
employee Director present when matters concerning executive compensation are
discussed and voted on by the Board of Directors.
COMPENSATION OBJECTIVES AND STRUCTURE
The Company's objective is to provide total compensation opportunity
sufficient to attract and retain highly capable executives and key managers for
the Company and its subsidiaries. Each year the Personnel and Compensation
Committee reviews the Company's executive compensation practices and guidelines,
and recommends any changes needed to achieve this objective.
The Chairman, Vice Chairman, Secretary and Treasurer of the Company are
not salaried employees. These non-employee officers receive only the
compensation applicable to other non-employee directors. The Chief Executive
Officer and other key managers of the Company and its subsidiaries are salaried
employees. Their compensation currently consists of salary and the opportunity
for a bonus. There is no stock option plan at present, nor any other form of
long-term incentive compensation.
EXECUTIVE SALARIES
Salary ranges for executive positions are substantially equivalent to
those found in positions of similar responsibility level and type in related
business sectors. These salary ranges were increased 3.5 percent in January,
1997 to maintain the Company's competitive position. Individual salary increases
were granted where appropriate.
7
<PAGE> 10
MANAGEMENT BONUSES
Fourteen executives and senior managers participated in the Management
Bonus Plan in fiscal year 1997. The plan assures that part of the compensation
opportunity of these executives depends directly on business results. The
Management Bonus Plan is currently structured as follows:
- -- Basic and Adjusted Bonus Standards
A basic bonus standard is established for each position covered by the
Management Bonus Plan. These standards are consistent with typical
competitive bonus levels. These basic standards are reduced, if
necessary, to keep bonus cost within an acceptable range. Specifically,
the sum of the adjusted standards for all bonus participants may not
exceed 10 percent of the Company's budgeted operating income.
[Note: For bonus purposes, operating income is defined as pretax income
before bonuses, excluding any non-operating gains and losses and any
extraordinary income or expense items.]
- -- Factors Determining Actual Bonus Payout
Actual bonus payments vary from the adjusted standards based primarily
on the ratio of actual corporate operating income to budgeted operating
income. Business unit performance and personal contribution also affect
individual awards.
BONUS STANDARDS AND BONUS PAYMENTS - FISCAL YEAR 1997
Basic bonus standards for all participating positions in fiscal year
1997 totalled $255,700. Adjusted standards totalled $241,900, this being 10
percent of budgeted operating income. Operating results exceeded budget,
permitting actual awards of up to $280,500. Actual awards fell short of this
maximum, mainly because one senior position was unfilled, and some participants
were in bonus-eligible positions only part of the year. The Board approved bonus
payments totalling $229,000 to fourteen participants in December 1997.
SPECIFIC COMMENTS ON COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Lawrence's salary was increased to $156,500 in January, 1997. This
figure is somewhat lower than the market average for CEOs in firms of similar
size and type. The shortfall relates to Mr. Lawrence's relatively short tenure
as CEO.
8
<PAGE> 11
In December 1997, Mr. Lawrence was awarded a bonus of $66,000. The bonus was
based on the Company's favorable operating profit performance, and the Board's
assessment of Mr. Lawrence's accomplishments in other key areas of
responsibility.
Norman P. Harberger, Chairman, Personnel and Compensation Committee
Angus Cotton
J. Gordon Osborn
Joseph F. Vercellotti
ITEM 2
RATIFICATION OF INDEPENDENT PUBLIC AUDITORS
The Board of Directors wishes to obtain from the shareholders a
ratification of their action in appointing Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending October 31, 1998. Ernst &
Young LLP was initially engaged as independent auditors of the Company for the
fiscal year ended October 31, 1993.
The engagement of Ernst & Young LLP for audit services has been
approved by both the Audit Committee of the Board of Directors and by the full
Board of Directors.
In the event the appointment of Ernst & Young LLP as independent
auditors for fiscal year 1998 is not ratified by the affirmative vote of the
holders of a majority of the shares of Common Stock entitled to vote, the
adverse vote will be considered as a direction to the Board of Directors to
select other independent auditors.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, with the opportunity to make a statement if they desire to do
so. Such representatives are also expected to be available to respond to
appropriate questions.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote is required to ratify the appointment of
independent auditors.
9
<PAGE> 12
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR ITEM 2.
EXECUTIVE OFFICERS
The following table lists the executive officers of the Company as of
the date hereof and the capacities in which they serve. Officers of the Company
serve at the discretion of the Board of Directors.
NAME OF INDIVIDUAL CAPACITY AGE YEARS OF SERVICE
- ------------------ -------- --- ----------------
Charles W. Flynn Chairman 71 2
Norman P. Harberger Vice Chairman 68 2
Michael E. Lawrence Chief Executive Officer 53 2
Angus Cotton Secretary 72 3
Thomas C. Morton Treasurer 56 6
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock and the Company's Series A Cumulative
Preferred Stock, $7.60 liquidation preference (the "Preferred Stock"), as of
January 12, 1998 by (i) each shareholder known by the Company to be the
beneficial owner of more than five percent of the outstanding Common Stock, (ii)
each of the Company's directors, director nominees, and executive officers
identified in the Summary Compensation Table below, individually, and (iii) all
current directors and executive officers as a group. Except as otherwise
indicated, the Company believes that each of the beneficial owners of the shares
listed below, based on information furnished by such owner, (a) holds less than
one percent of the outstanding Common Stock and less than one percent of the
outstanding Preferred Stock, and (b) has sole investment and voting power with
respect to such shares. Preferred Stock is non-voting unless the Company has
failed to pay dividends on the Preferred Stock in an amount equal to four years'
dividends.
10
<PAGE> 13
SHARES BENEFICIALLY OWNED (1)
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL COMMON PERCENT PREFERRED PERCENT
STOCK OF CLASS STOCK OF CLASS
======================================================================================
<S> <C> <C> <C> <C>
Angus Cotton (7) 3,750 * 2,500 *
- --------------------------------------------------------------------------------------
Thomas G. Daniels (1) 5,250 * 3,500 *
- --------------------------------------------------------------------------------------
Ralph L. Dupps, Jr. (2) 9,000 * 6,000 *
- --------------------------------------------------------------------------------------
P. R. Easterlin, Jr. (1) 2,250 * 1,500 *
- --------------------------------------------------------------------------------------
Charles W. Flynn 6,000 * 4,000 *
- --------------------------------------------------------------------------------------
James L. Gray (1) 750 * 500 *
- --------------------------------------------------------------------------------------
Norman P. Harberger 3,000 * 2,000 *
- --------------------------------------------------------------------------------------
Michael E. Lawrence (1) 3,000 * 2,000 *
- --------------------------------------------------------------------------------------
John G. McGarty (1) 9,750 * 6,500 *
- --------------------------------------------------------------------------------------
Thomas C. Morton (3) 6,000 * 4,000 *
- --------------------------------------------------------------------------------------
Robert W. Siler, Jr. 3,000 * 2,000 *
- --------------------------------------------------------------------------------------
Arthur P. Sundry (4) 3,000 * 2,000 *
- --------------------------------------------------------------------------------------
Joseph F. Vercellotti (1) 2,250 * 1,500 *
- --------------------------------------------------------------------------------------
Frank E. Zimmerman, Jr. (1) 9,750 * 6,500 *
- --------------------------------------------------------------------------------------
Paul B. Barringer, II (5) 118,500 6.43% 79,000 6.43%
14 South Calibogue Cay
Hilton Head Island, SC 29928
- --------------------------------------------------------------------------------------
L.F. Loree, III and 212,250 11.52% 141,500 11.52%
Norwood H. Davis, Jr. as Co-
Trustees (6)
901 East Cary Street
Suite 1400
Richmond, Virginia 23219
- --------------------------------------------------------------------------------------
All current directors and 185,250 10.05% 123,500 10.05%
executive officers as a group
(15 Persons)
======================================================================================
</TABLE>
* Represents less than one percent of the class
11
<PAGE> 14
(1) Shares of Common Stock and Preferred Stock reflected in the table as
owned by Messrs. Daniels, Easterlin, Gray, Lawrence, McGarty,
Vercellotti, and Zimmerman are owned by each of them directly. Unless
otherwise indicated, shares reflected in the table as owned by each of
the other shareholders are owned jointly with such shareholder's
spouse.
(2) Includes 1,500 shares of Common Stock and 1,000 shares of Preferred
Stock held directly by Mr. Dupps and 7,500 shares of Common Stock and
5,000 shares of Preferred Stock owned jointly with his spouse.
(3) Includes 1,500 shares of Common Stock and 1,000 shares of Preferred
Stock held by Mr. Morton directly, 3,000 shares of Common Stock and
2,000 shares of Preferred Stock owned jointly with his spouse and 1,500
shares of Common Stock and 1,000 shares of Preferred Stock directly
held by his spouse.
(4) Includes 750 shares of Common Stock and 500 shares of Preferred Stock
held by Mr. Sundry directly and 2,250 shares of Common Stock and 1,500
shares of Preferred Stock held for the benefit of Arthur P. Sundry
Trust.
(5) Based on information supplied to the Company by Mr. Barringer.
(6) Based on information dated January 4, 1996 and filed with the
Securities and Exchange Commission ("SEC"), all of the shares are held
pursuant to an Irrevocable Trust Agreement dated November 12, 1986 by
William H. Goodwin, Jr., creating five separate trusts for the benefit
of William Hunter Goodwin, III, Molly Shepherd Goodwin, Mathew Tolley
Goodwin, Sarah Camp Goodwin and Peter Overton Goodwin (the "Trusts").
According to such information, each Trust owns 56.6 of the 283 Units
shown (each Unit consists of 750 shares of Common Stock and 500 shares
of Preferred Stock).
(7) Shares of Common Stock and Preferred Stock are held for the benefit of
the Angus Cotton Trust.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
directors, officers and certain shareholders of the Company file reports of
holdings and transactions in the Company's Common Stock and Preferred Stock with
the SEC. Based solely on the Company's review of such reports furnished to the
Company and written representations from certain reporting persons, the Company
believes that all SEC filing requirements applicable to its directors and
officers with respect to the Company's fiscal year ended October 31, 1997 were
complied with. The Company does not believe that the Trusts or Trustees
described in footnote (6) of the table under "Principal Shareholders" above have
filed such reports for the fiscal year ended October 31, 1997.
12
<PAGE> 15
EXECUTIVE COMPENSATION
None of the officers of the Company receives any cash or non-cash
compensation for services rendered in such capacity. The Company's operations
are conducted exclusively through its wholly-owned subsidiary, Sea Pines
Company, Inc. The following table summarizes the compensation earned by Michael
E. Lawrence, the President of Sea Pines Company, Inc. for services performed
during fiscal years 1997, 1996 and 1995. Mr. Lawrence is the only executive
officer of the Company whose compensation exceeded $100,000 during any of the
fiscal years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND PRINCIPAL ------------------------- ALL OTHER
POSITION YEAR SALARY (1) BONUS (2) COMPENSATION
- ------------------ ---- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Michael E. Lawrence 1997 $158,797 $66,000 $0
President, Sea Pines 1996 $145,756 $43,600 $0
Company, Inc. and 1995 $123,554 0 $0
Sea Pines Real
Estate Company,
Inc.
</TABLE>
(1) Salary includes amounts deferred at the election of the named officer
pursuant to the Company's 401(k) plan and also includes amounts
contributed by the Company to the account of the named officer in such
plans.
(2) Bonus includes amounts earned by the named officer in the year
indicated, but paid in the following fiscal year.
The remuneration described in the table above does not include the cost to Sea
Pines Company, Inc. of certain employee benefits furnished to Mr. Lawrence in
connection with the conduct of the business of Sea Pines Company, Inc. The
amount of such employee benefits accrued for Mr. Lawrence in each of fiscal
years 1997, 1996 and 1995 did not exceed 10% of the total of his respective
annual salary and bonus reported above.
COMPENSATION PURSUANT TO PLANS
The Company and its subsidiaries have adopted a retirement plan
pursuant to Section 401(k) of the Internal Revenue Code of 1986. This plan
requires the Company and its subsidiaries to contribute $.50 for every $1
contributed by the respective company's employees, limited to 5% of gross
earnings of each employee.
13
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COMPENSATION OF DIRECTORS
All directors of the Company, who are not also employees of the Company
or its subsidiaries, are paid $100 for each Board of Directors meeting attended
and $300 per quarter for serving as a director. Directors who are members of any
of the standing committees of the Board of Directors and who are not also
employees of the Company or its subsidiaries are paid $50 for each meeting
attended, with maximum payment of $600 per year.
SHAREHOLDER RETURN
Item 402 under Regulation S-K promulgated by the Securities and
Exchange Commission calls for disclosure of a five year graph comparison of the
Company's cumulative total shareholder returns on its Common Stock with both the
cumulative total return on selected published market indices and the cumulative
total return on selected industry or line-of-business indices over the same
period.
The known trading in the outstanding securities of the Company remains
very limited and has been effected exclusively through transactions in units
consisting of both Common and Preferred Stock. Consequently, the Company does
not have a reliable indicator of Common Stock share value. Because information
required for the calculation of the referenced comparisons is not available to
the Company, and based on the fact that the Company has not paid any dividend on
its Common Stock since the Company's incorporation, the Company believes that
presentation of the referenced comparisons would not be meaningful.
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<PAGE> 17
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal to be included in the
Proxy Statement for the 1999 Annual Meeting of Shareholders should submit such
proposal to the Company on or before November 1, 1998.
AVAILABILITY OF FORM 10-K REPORT
The Company has filed with the Securities and Exchange Commission its
Annual Report on Form 10-K for the fiscal year ended October 31, 1997. A copy of
the Form 10- K will be provided without charge to each shareholder to whom this
Proxy Statement is delivered upon the receipt by the Company of the written
request of such shareholder. The exhibits to the Form 10-K will also be provided
upon request and payment of copying charges. Requests for the Form 10-K should
be directed to the Office of the Secretary, Sea Pines Associates, Inc., Post
Office Box 5965, Hilton Head Island, South Carolina 29938.
OTHER MATTERS
Management of the Company knows of no other matters to be brought
before the Annual Meeting. If, however, any other matter properly comes before
the Annual Meeting for a vote of the shareholders, it is the intention of the
persons named on the enclosed proxy ballot to vote the proxy in accordance with
their discretion and judgment in such matters.
By Order of the Board of Directors,
/s/ Angus Cotton
------------------------------
Angus Cotton
Secretary
Hilton Head Island,
South Carolina
February 17, 1998
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APPENDIX A
SEA PINES ASSOCIATES, INC.
P.O. Box 5965
Hilton Head Island, South Carolina 29936
PROXY BALLOT FOR
ANNUAL MEETING OF SHAREHOLDERS
MARCH 14, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Angus Cotton and Thomas C. Morton as Proxies, each with full
power to appoint his substitute, and hereby authorizes them to represent and to
vote, as designated below, all the shares of voting common stock, no par value,
of Sea Pines Associates, Inc., held of record by the undersigned on January 12,
1998, at the Annual Meeting of Shareholders, to be held on March 14, 1998.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
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PLEASE SIGN, DATE AND RETURN THIS PROXY BALLOT IN THE
ENCLOSED POSTAGE PAID ENVELOPE AS SOON AS POSSIBLE.
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- --------------------------------------------------------------------------------
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. When signing in a representative capacity, please
provide full title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
SEA PINES ASSOCIATES, INC.
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1. Election of Directors.
For All With- For All
Nominees hold Except
Angus Cotton John G. McGarty
P.R. Easterlin, Jr. Joseph F. Vercellotti [ ] [ ] [ ]
James L. Gray
NOTE: If you do not wish your shares voted "For" a particular nominee,
mark the "For All Except" box and strike a line through the name(s) of
the nominee(s). Your shares will be voted for the remaining nominee(s).
For Against Abstain
2. Ratification of the appointment of [ ] [ ] [ ]
Ernst & Young LLP as independent
auditors of Sea Pines Associates,
Inc. for the fiscal year ending
October 31, 1998.
3. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting or at any
adjournment(s) thereof.
Mark box at right if you plan to attend the Annual Meeting. [ ]
Mark box at right if an address change or comment has been
noted on the reverse side of this card. [ ]
Please be sure to sign and date this Proxy. Date
-------------------------
- ------------------------------------ --------------------------------
Shareholder sign here Co-owner sign here
