<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 22, 2000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 16, 2000
TO THE SHAREHOLDERS OF SEA PINES ASSOCIATES, INC.:
The 2000 Annual Meeting of Shareholders of Sea Pines Associates, Inc.
(the "Company"), will be held at the PLANTATION CLUB IN SEA PINES PLANTATION,
100 Sea Pines Drive, Hilton Head Island, South Carolina, on Thursday, March 16,
2000, at 3:00 p.m., local time, for the following purposes:
1. To elect seven directors; and
2. 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 14,
2000, as the record date for determining the shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof.
A copy of the Company's 1999 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 7000
Hilton Head Island, South Carolina 29938
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 16, 2000
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 THURSDAY, MARCH 16,
2000, AT THE PLANTATION CLUB IN SEA PINES PLANTATION, 100 SEA PINES DRIVE,
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 22, 2000.
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 all of the nominees 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
7000, 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
The Board of Directors has set the close of business on January 14, 2000, 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 575 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. 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
Seven 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 2001 and five
directorships will expire in 2002.
The seven nominees listed below have been nominated by the Nominating Committee
of the Board of Directors. Pursuant to the Company's Articles of Incorporation,
the Board of Directors may, from time to time, by majority vote, increase or
decrease the total number of directors on the Board to any number between nine
and eighteen, inclusive. The number of directors is currently set at fifteen. In
accordance with the Company's Articles of Incorporation, 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.
2
<PAGE> 5
Set forth below is certain biographical information regarding the seven nominees
as of January 14, 2000.
NOMINEES FOR TERMS TO EXPIRE IN 2003
NAME, AGE, AND ADDRESS BIOGRAPHICAL INFORMATION
- ---------------------- ------------------------
Paul B. Barringer, II (69) Mr. Barringer has served as a director since
14 South Calibogue Cay 1997. He has been Chairman and CEO of
Hilton Head Island, SC 29928 Coastal Lumber Company, headquartered in
Weldon, North Carolina, since 1959. 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 (70) Mr. Harberger has served as a director since
22 Oyster Landing Road 1993 and as Chairman of the Company since
Hilton Head Island, SC 29928 1999. He has been President and Owner of
Harberger & Associates, Inc., management
consultants, since 1986. He was previously
an executive of Rohm and Haas Company,
retiring as that firm's Administrative Vice
President in 1986.
Michael E. Lawrence (55) Mr. Lawrence has served as a director since
46 Baynard Park Road 1994 and as Chief Executive Officer of the
Hilton Head Island, SC 29928 Company since 1995. He has served as
President of Sea Pines Company, Inc. since
November 1994 and was its Vice President and
Chief Financial Officer from February 1991
to November 1994 and its Controller from
February 1990 to February 1991. He currently
serves on the Board of Directors of Jameson
Inns, Inc. and the Personnel and
Compensation Committee of such Board, and
the Board of Directors of Atlantic Savings
Bank, a subsidiary of Wachovia Bank, N.A.
Formerly, he was a partner in the Management
Consulting Division of Ernst & Young LLP.
Thomas C. Morton (58) 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.
3
<PAGE> 6
Robert W. Siler, Jr. (71) 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 partner in Elgin Land
Company, II, Ltd.,a Texas investment firm.
NOMINEES FOR TERMS TO EXPIRE IN 2002
John A. Norlander (69) Mr. Norlander has been a Sea Pines Property
72 N. Calibogue Cay Road Owner since his retirement in 1997. A
Hilton Head Island, SC 29928 graduate of the Cornell University Hotel
School, he served as an officer in the Navy
during the Korean War. He spent his entire
business career in the hospitality business.
He was an executive with Hilton Hotels for
20 years working in sales and marketing and
as general manager of two major convention
hotels. He then joined Radisson Hotels as
EVP/COO and was subsequently promoted to
President and CEO of Radisson. Mr.
Norlander's last position was President/CEO
of Carlson Hospitality Worldwide which
included, in addition to Radisson and
Radisson Seven Seas, the TGI Friday's
restaurant chain and Country Inns by
Carlson, a chain of 100 hotels.
Perry M. Parrott, Jr.(54) Mr. Parrott has been President of University
23 N. Calibogue Cay Road Housing Group, a developer of private,
Hilton Head Island, SC 29928 market rate housing for college students
since 1997. Previously, he was a founder and
Director of Gables Residential Trust, a
publicly traded Real Estate Investment
Trust. Prior to Gables, Mr. Parrott was a
partner and a member of the management board
of Trammell Crow Residential Company, a
large privately owned real estate company.
He is a member of the Urban Land Institute,
the Community Services Associates, Inc.
("CSA") Maintenance Committee and serves on
the Board of Directors of Volunteers in
Medicine.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES LISTED ABOVE.
4
<PAGE> 7
Set forth below is certain biographical information concerning the directors
whose terms extend beyond the Annual Meeting.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
NAME, AGE, AND ADDRESS BIOGRAPHICAL INFORMATION
- ---------------------- ------------------------
Angus Cotton (74) Mr. Cotton, a founding director of the
7 Willet Road Company, has served as a director since
Hilton Head Island, SC 29928 1987. He is currently the 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 in 1989 from
Marriott Hotels and Resorts where he had
been an Executive Vice President.
P. R. Easterlin, Jr. (58) Mr. Easterlin has served as a director since
350 2nd Street North No. 12 1989. He has been President of Florida
St. Petersburg, FL 33701 Properties of Amelia, Inc., a property
management and real estate development
company, since 1983. 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 (64) Mr. Gray has served as a director since
55 N. Calibogue Cay Road 1995. He retired in 1999 as Chairman and CEO
Hilton Head Island, SC 29928 of Primestar Partners, LP, a national
distributor of satellite delivered
television services to residences, a
position he held since 1995. Previously, Mr.
Gray served as Vice Chairman of Time Warner
Cable. During his twenty-year career 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 (62) 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.
Mr. McGarty is a licensed real estate agent
with Sea Pines Real Estate Company, Inc., a
subsidiary of the Company. He formerly
served on the Board of Regents of Georgetown
University. He presently serves on the CSA
Board of Directors.
5
<PAGE> 8
Joseph F. Vercellotti (70) 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 CSA
Board of Directors.
DIRECTORS WHOSE TERMS EXPIRE IN 2002
NAME, AGE AND ADDRESS BIOGRAPHICAL INFORMATION
- --------------------- ------------------------
Ralph L. Dupps, Jr. (54) Mr. Dupps has served as a director since
30 East Beach Lagoon Road 1995. He has been President of Dupps and
Hilton Head Island, SC 29928 Company and a partner in NWI, a real estate
development company since 1981. He is
currently Chairman of the Board of Directors
of Atlantic Savings Bank, a subsidiary of
Wachovia Bank, N.A., a director of Forked
Deer River Corporation, a land holding
company, a member of the Wachovia Bank of
South Carolina Advisory Board, Chairman of
the Hilton Head Preparatory School Board of
Trustees, a member of the Hilton Head Museum
Board of Directors and a CSA Board member.
Mr. Dupps is also Chairman of the Town of
Hilton Head Island Housing Commission.
Charles W. Flynn (73) Mr. Flynn, a founding director of the
13 Pine Island Court Company, served as a director from 1987
Hilton Head Island, SC 29928 through 1990 and was reelected in 1995.
He retired in 1980 from Ford Motor Company
as the Director of Dealer Development. Prior
to his employment with Ford, he was a
special agent for the Federal Bureau of
Investigation.
Arthur P. Sundry (70) 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.
6
<PAGE> 9
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met 9 times during fiscal year 1999. No director 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 Finance and Audit, Nominating, and Personnel and Compensation
Committees, each of which held meetings during fiscal year 1999.
The Finance and Audit Committee, composed of Messrs. Barringer, Flynn, Gray,
Morton, and Sundry, met 8 times during fiscal year 1999. The Committee reviews
and makes recommendations regarding matters concerning the financial condition
of the Company, provides advice to the Company's management on financial and
accounting matters, makes recommendations regarding the independent auditors for
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 salaried employees may serve on the
Finance and Audit Committee.
The Nominating Committee, composed of Messrs. Cotton, Daniels, Dupps, Gray, and
Vercellotti, designates on behalf of the Board of Directors, candidates for the
directors to be elected at the Annual Meeting of shareholders. The Nominating
Committee met 4 times during fiscal year 1999. The Nominating Committee will
consider nominating a director candidate recommended by a shareholder if the
shareholder submits the recommendation to the Nominating Committee.
(Note concerning shareholder nominations: Shareholders may
also nominate candidates for election to the Board by
complying with the nomination requirements of the Company's
By-Laws. The Company's By-Laws provide that a shareholder must
give the Company written notice in order to propose business
or make a nomination for director at a shareholder meeting.
Excerpts from the By-Laws containing these requirements are
attached in Appendix A. The deadline for shareholder
nominations for director and shareholder proposals for the
2001 Annual Meeting will be January 15, 2001. Shareholders
wishing to submit a nomination or proposal should review the
By-Law requirements on nominations and proposals by
shareholders and should communicate with the Secretary, Sea
Pines Associates, Inc., 32 Greenwood Drive, Post Office Box
7000, Hilton Head Island, South Carolina 29938 for further
information.)
The Personnel and Compensation Committee, composed of Messrs. Cotton, Flynn,
Harberger and Vercellotti, met 8 times during fiscal year 1999. The Committee
considers and oversees the development of programs to attract and equitably
compensate employees to promote 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.
7
<PAGE> 10
CERTAIN TRANSACTIONS
Mr. Dupps' wife has provided certain interior design services and has purchased
furnishings for the Company. Total payments to Mrs. Dupps for such services and
furniture purchases during fiscal year 1999 were $127,116, of which $58,076 was
paid for services and $69,040 was paid as reimbursements for furniture
purchases.
Mr. Lawrence's wife is a licensed real estate agent with Sea Pines Real Estate
Company, Inc., a subsidiary of the Company. Total commissions paid to Mrs.
Lawrence during fiscal year 1999 were $64,532.
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 1999 to
maintain the Company's competitive position. Individual salary increases were
granted where appropriate, based on competitive salary levels and individual
performance.
8
<PAGE> 11
MANAGEMENT BONUSES
Fourteen executives and senior managers participated in the Management Bonus
Plan in fiscal year 1999. 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
At the beginning of each fiscal year, an initial bonus standard ("target
bonus") is established for each position covered by the Management Bonus
Plan. These standards are consistent with typical competitive bonus
levels, except that they may not total more than 10 percent of the
"operating income" called for in the Company's initial budget for the
fiscal year.
- - 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. For bonus purposes, "operating income" is defined as
pre-tax income before bonuses, excluding any non-operating gains and
losses and any extraordinary income or expense items.
The present bonus arrangement has applied for the past six years. During
this period, two years resulted in no bonus pay-out (1993 and 1995), two
produced bonuses lower than target levels (1994 and 1996). Only in the
past two years (1997 and 1998) have operating results earned premium
pay-outs.
BONUS STANDARDS AND BONUS PAYMENTS - FISCAL YEAR 1999
Basic bonus standards for all bonus-eligible positions in fiscal year 1999
totalled $290,000. This figure is roughly $30,000 lower than it would have been
if all eligible positions had been filled for the entire year. Fiscal year 1999
pre-tax income for bonus purposes fell short of budget by 3.3%, which resulted
in a downward adjustment of 6.6% in bonus standards. The sum of these adjusted
standards for the fourteen eligible executives was $270,700. Actual awards
approved by the Board totalled $275,700, exceeding the adjusted standards by
$5,000. This 2% excess was based on considerations of individual accomplishment.
SPECIFIC COMMENTS ON COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Lawrence's salary was increased to $172,000 in January 1999, based on the
Board's assessments of his performance and of competitive salary levels. Surveys
indicate that this figure is somewhat lower than the market average for CEOs in
firms of similar size and type.
9
<PAGE> 12
In December 1999, Mr. Lawrence was awarded a bonus of $75,700 under the terms of
the previously described Management Bonus Plan. The bonus was based on the
Company's operating profit performance during the fiscal year 1999, and the
Board's favorable assessment of Mr. Lawrence's accomplishments in other key
areas of responsibility.
Joseph F. Vercellotti, Chairman, Personnel and Compensation Committee
Angus Cotton
Charles W. Flynn
Norman P. Harberger
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.
Years as Executive
Name of Individual Capacity Age Officer
- ------------------ -------- --- ------------------
Norman P. Harberger Chairman 70 4
James L. Gray Vice Chairman 64 1
Michael E. Lawrence Chief Executive Officer 55 4
Angus Cotton Secretary 74 5
Thomas C. Morton Treasurer 58 8
OWNERSHIP OF VOTING SECURITIES IN EXCESS OF FIVE PERCENT
BY BENEFICIAL OWNERS
The following table sets forth information as to the beneficial ownership
of the Company's Common Stock by each person or group known by the Company to
own beneficially more than five percent of the Company's outstanding Common
Stock as of February 16, 2000.
Name and Address of
Beneficial Owner Number of Shares Percent of Class
- ------------------- ---------------- ----------------
L.F. Loree, III and Norwood H.
Davis, Jr. as Co-Trustees
901 East Cary St., Suite 1500
Richmond, VA 23219 952,000 (1) 26.81%
Paul B. Barringer, II
14 South Calibogue Cay
Hilton Head Island, SC 29928 316,000 (2) 8.90%
10
<PAGE> 13
(1) Based on information supplied to the Company on behalf of Messrs. Loree
and Davis, 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").
(2) Based on information supplied to the Company by Mr. Barringer, all of the
shares are owned by a limited partnership, the general partner of which
is a limited liability company controlled by Mr. Barringer and his wife.
Mr. Barringer is a director of the Company.
STOCK OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following table sets forth information concerning the beneficial
ownership of the Company's Common Stock as of February 16, 2000 for (a) each of
the Company's directors, director nominees and executive officers and (b) all
directors and executive officers of the Company as a group.
NAME OF OWNER NUMBER OF SHARES (1) PERCENT OF CLASS
------------- -------------------- ----------------
Paul B. Barringer, II (2) 316,000 8.90%
Angus Cotton (3) 14,000 *
Thomas G. Daniels 14,000 *
Ralph L. Dupps, Jr. (4) 62,000 1.75%
P.R. Easterlin, Jr. 6,000 *
Charles W. Flynn 24,000 *
James L. Gray 10,000 *
Norman P. Harberger (5) 26,000 *
Michael E. Lawrence (6) 14,000 *
John G. McGarty 26,000 *
Thomas C. Morton (7) 24,000 *
John A. Norlander 2,000 *
Perry M. Parrott, Jr. 8,000 *
Robert W. Siler, Jr. 14,000 *
Arthur P. Sundry (8) 12,000 *
Joseph F. Vercellotti 6,000 *
Frank F. Zimmerman, Jr. 26,000 *
All current directors and
executive officers as a group
(15 persons) 594,000 16.73%
*Represents less than one percent of the class
(1) Shares of Common Stock reflected in the table as owned by Messrs.
Daniels, Easterlin, Gray, McGarty 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.
11
<PAGE> 14
(2) Based on information supplied to the Company by Mr. Barringer, all of the
shares are owned by a limited partnership, the general partner of which
is a limited liability company controlled by Mr. Barringer and his wife.
(3) Shares are held for the benefit of the Angus Cotton Trust.
(4) Includes 4,000 shares held directly by Mr. Dupps and 58,000 shares held
jointly with his spouse.
(5) Includes 18,000 shares held by Mr. Harberger directly and 8,000 shares
held jointly with his spouse.
(6) Includes 12,000 shares held by Mr. Lawrence directly and 2,000 shares
directly held by his spouse.
(7) Includes 8,000 shares held by Mr. Morton directly, 8,000 shares held
jointly with his spouse and 8,000 shares directly held by his spouse.
(8) Includes 2,000 shares held by Mr. Sundry directly and 10,000 shares
held for the benefit of Arthur P. Sundry 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, 1999 were
complied with; however, the Company does not believe that the Trusts or Trustees
described in footnote (2) of the table under "Ownership of Voting Securities in
Excess of Five Percent by Beneficial Owners" above have filed a Form 5 for the
fiscal year ended October 31, 1999.
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 subsidiaries. The following
table summarizes the compensation earned by Michael E. Lawrence for services
performed during fiscal years 1999, 1998 and 1997. Mr. Lawrence is the only
executive officer of the Company whose compensation exceeded $100,000 during any
of the fiscal years indicated.
12
<PAGE> 15
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
NAME AND PRINCIPAL ------------------------ ALL OTHER
POSITION YEAR SALARY (1) BONUS (2) COMPENSATION (3)
- ------------------ ---- ----------- ---------- ----------------
Michael E. Lawrence 1999 $172,000 $ 75,700 $ 5,757
President, Sea Pines 1998 $165,332 $ 86,000 $ 2,456
Company, Inc. and 1997 $154,056 $ 66,000 $ 4,741
Sea Pines Real Estate
Company, Inc.
(1) Salary includes amounts deferred at the election of the named officer
pursuant to the Company's 401(k) plan.
(2) Bonus includes amounts earned by the named officer in the year
indicated, but paid in the following fiscal year.
(3) All other compensation consists of amounts contributed by the Company
to the 401(k) plan account of the named officer.
The remuneration described in the previous table 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 1999, 1998 and 1997 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. The employee contribution is limited to 6% of
gross earnings of each employee.
COMPENSATION OF DIRECTORS
All directors of the Company, who are not also salaried 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 salaried employees of the Company or its subsidiaries are paid $50 for
each meeting attended, with maximum payment of $600 per year. Additionally, all
directors of the Company receive discounts at various facilities owned by the
Company for golf fees, restaurant purchases and retail purchases and are
provided complimentary tickets to events sponsored by the Company.
13
<PAGE> 16
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 to the Company's knowledge has been effected exclusively
through transactions in units consisting of both Common Stock 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 dividends on its Common Stock since the
Company's incorporation, the Company believes that presentation of the
referenced comparisons would not be meaningful.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal to be included in the
Proxy Statement for the 2001 Annual Meeting of Shareholders must submit such
proposal to the Company on or before October 25, 2000.
Pursuant to the Company's By-Laws, proposals and director nominations
which shareholders intend to present at the 2001 Annual Meeting of Shareholders
must be received no earlier than December 16, 2000 and no later than January 15,
2001 to be presented at the meeting. This requirement is separate from and in
addition to the requirements that a shareholder must meet to have a proposal or
nomination included in the Proxy Statement.
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, 1999. 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 7000, HILTON HEAD ISLAND, SOUTH CAROLINA 29938.
INDEPENDENT AUDITORS
Representatives of Ernst & Young LLP, which audited the financial
statements of the Company for the most recently completed fiscal year and which
has been selected to audit such statements for the current year, 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.
14
<PAGE> 17
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 22, 2000
15
<PAGE> 18
APPENDIX A
EXCERPTS FROM THE BY-LAWS OF SEA PINES ASSOCIATES, INC.
Nominations of persons for election to the Board of Directors and the proposal
of business to be considered by the shareholders may be made at an annual
meeting of shareholders (a) by or at the direction of the Board of Directors or
(b) by any shareholder of the Corporation who was a shareholder of record at the
time of giving of notice by such shareholder provided for in this By-Law, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth below in this By-Law.
For nominations or other business to be properly brought before an annual
meeting by a shareholder pursuant to clause (b) of the foregoing paragraph of
this By-Law, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice shall be
delivered to and received by the Secretary at the principal office of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the first anniversary of the preceding year's annual meeting; provided,
however, that if the date of the annual meeting is advanced by more than thirty
(30) days or delayed by more than sixty (60) days from such anniversary date,
notice by the shareholder to be timely must be so delivered not earlier than the
90th day prior to such annual meeting and not later than the close of business
on the later of the 60th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such meeting is
first made. Such shareholder's notice shall set forth (a) as to each person whom
the shareholder proposes to nominate for election or reelection as a director
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (including such person's written consent to
being named in the proxy statement as a nominee and to serving as a director if
elected) and a description of all arrangements and understandings between the
nominating shareholder and the nominee or any other person (naming such person)
relating to the nomination; (b) as to any other business that the shareholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the proposal is
made; (c) as to the shareholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made (i) the name and address
of such shareholder, as they appear on the Corporation's books, and of such
beneficial owner and (ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such shareholder and such
beneficial owner.
Notwithstanding anything in the second sentence of the preceding paragraph to
the contrary, if the number of directors to be elected to the Board of Directors
is increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of Directors made by the
Corporation at least seventy (70) days prior to the first anniversary of the
preceding year's annual meeting, a shareholder's notice required by this By-Law
shall also be considered timely, but only
16
<PAGE> 19
with respect to nominees for any new positions created by such increase, if it
shall be delivered to and received by the Secretary at the principal office of
the Corporation not later than the close of business on the 10th day following
the day on which a public announcement is made by the Corporation.
Only such persons who are nominated in accordance with the procedures set forth
in these By-Laws shall be eligible to serve as directors and only such business
shall be conducted at an annual meeting of shareholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
By-Law. The chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made in accordance with the procedures set forth in this ByLaw and, if any
proposed nomination or business is not in compliance with this By-Law, to
declare that such defective proposal shall be disregarded.
For the purposes of this By-Law, "public announcement" shall mean disclosure in
a press release reported by the Dow Jones News Service, Associated Press or
comparable national news service, or in a document mailed to all shareholders or
record or in a document publicly filed by the Corporation with the Securities
and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange
Act.
Notwithstanding the foregoing provisions of this By-Law, a shareholder shall
also comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth in this By-Law.
Nothing in this By-Law shall be deemed to affect any rights (i) of shareholders
to request inclusion of proposals in the Corporation's proxy statement pursuant
to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of
preferred stock to elect directors under specified circumstances.
<PAGE> 20
APPENDIX B
SEA PINES ASSOCIATES, INC.
P.O. Box 7000
Hilton Head South Carolina 29936
PROXY BALLOT FOR
ANNUAL MEETING OF SHAREHOLDERS
MARCH 16, 2000
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 each 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 14,
2000, at the Annual Meeting of Shareholders, to be held on March 16, 2000.
This proxy will be voted in the manner directed by the undersigned. If no
direction is made, this proxy will be voted FOR all nominees.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- ---------------------------------------
- ------------------------------- ---------------------------------------
- ------------------------------- ---------------------------------------
<PAGE> 21
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
SEA PINES ASSOCIATES, INC.
- --------------------------------------------------------------------------------
1. Election of Directors.
For All With- For All
Nominees hold Except
(01) Paul B. Barringer, II
(02) Norman P. Harberger [ ] [ ] [ ]
(03) Michael E. Lawrence
(04) Thomas C. Morton
(05) John A. Norlander
(06) Perry M. Parrott, Jr.
(07) Robert W. Siler, Jr.
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).
3. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting
and 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. [ ]
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
-------------------------
- ------------------------------------ --------------------------------
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
SEA PINES ASSOCIATES, INC.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your stock.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders,
March 16, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Sea Pines Associates, Inc.
