SCHEDULE 14-A

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o		Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

SEACOAST BANKING CORPORATION OF FLORIDA

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

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April 27, 2009

April 30, 2009

TO THE SHAREHOLDERS OF
SEACOAST BANKING CORPORATION OF FLORIDA:

          You are cordially invited to attend the 2009 Annual Meeting of Shareholders of Seacoast Banking Corporation of Florida (“Seacoast” or the “Company”), which will be held at the Port St. Lucie Civic Center, 9221 S.E. Civic Center Place (corner of U.S. Highway 1 and Walton Road), Port St. Lucie, Florida, on Thursday, June 18, 2009, at 3:00 P.M., Local Time (the “Meeting”).

          Enclosed are the Notice of Meeting, Proxy Statement, Proxy and our 2008 Annual Report to Shareholders (the “Annual Report”). At the Meeting, you will be asked to consider and vote upon the proposals outlined in the Notice of Meeting and described in detail in the Proxy Statement. We hope you can attend the Meeting and vote your shares in person. In any case, we would appreciate you completing the enclosed Proxy and returning it to us as soon as possible. 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.

          If you have any questions about the Proxy Statement or our Annual Report, please call or write us.

Sincerely,

Dennis S. Hudson, III
Chairman & Chief Executive Officer

TABLE OF CONTENTS

SEACOAST BANKING CORPORATION OF FLORIDA
815 Colorado Avenue
Stuart, Florida 34994

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.

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
OF SEACOAST BANKING CORPORATION OF FLORIDA
June 18, 2009

INTRODUCTION

General

          This Proxy Statement is being furnished to the shareholders of Seacoast Banking Corporation of Florida, a Florida corporation (“Seacoast” or the “Company”), in connection with the solicitation of proxies by Seacoast’s Board of Directors from holders of Seacoast’s common stock (“Common Stock”) for use at the 2009 Annual Meeting of Shareholders of Seacoast to be held on June 18, 2009, and at any adjournments or postponements thereof (the “Meeting”). Unless otherwise clearly specified, the terms “Company” and “Seacoast” include the Company and its subsidiaries.

          The Meeting is being held to consider and vote upon the proposals summarized below under “Summary of Proposals” and described in greater detail elsewhere herein. Seacoast’s Board of Directors knows of no other business that will be presented for consideration at the Meeting other than the matters described in this Proxy Statement.

          The 2008 Annual Report to Shareholders (“Annual Report”), including financial statements for the fiscal year ended December 31, 2008, accompanies this Proxy Statement. These materials are first being mailed to the shareholders of Seacoast on or about April 30, 2009.

          The principal executive offices of Seacoast are located at 815 Colorado Avenue, Stuart, Florida 34994, and its telephone number is (772) 287-4000.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 18, 2009: The Notice of Annual Meeting, the 2009 Proxy Statement and the Annual Report to Shareholders for the year ended December 31, 2008 are also available at http//www.snl.com/IRWebLinkX/GenPage.aspx?IID=100425&gkp=1073743274.

Summary of Proposals

          The proposals to be considered at the Meeting may be summarized as follows:

Quorum and Voting Requirements

          Holders of record of shares of the Company’s Common Stock as of the Record Date (as defined below) are entitled to one vote per share on each matter to be considered and voted upon at the Meeting. As of the Record Date, there were 19,153,150 shares of Common Stock issued, outstanding and entitled to be voted, which were held by approximately 1,450 holders of record.

          To hold a vote on any proposal, a quorum must be present, which is a majority of the total votes entitled to be cast by the holders of the outstanding shares of Common Stock. 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 and broker non-votes, will be counted. A “broker non-vote” occurs when a nominee does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner.

          Proposal 1 requires approval by a “plurality” of the votes cast at the Meeting. This means that Proposal 1 will be approved if more votes cast at the Meeting are voted in favor of the proposal than are voted against the proposal. Votes withheld are not counted as votes against the proposal. Neither abstentions nor broker non-votes will be counted as votes cast for purposes of determining whether the proposal has received sufficient votes for approval.

          Proposals 2, 5, 6 and 7 require approval by the affirmative vote of a majority of votes cast at the Meeting. Neither abstentions nor broker non-votes will be counted as votes cast for purposes of determining whether the proposal has received sufficient votes for approval.

          Proposal 3 and 4 require approval by the affirmative vote of no less than 66 2/3% of votes of all of the shares of Common Stock in person or by proxy at the Meeting and the affirmative vote of an Independent Majority of Shareholders, which excludes shares of Common Stock that are beneficially owned by “Related Persons” under current Article VII of our Articles of Incorporation. Related Persons are determined by our Board of Directors and may include a person who is the beneficial owner as of the Record Date of 5% or more of the Company voting shares, or any person who is directly or indirectly controlling, controlled by or under common control with, the Company and at any time within five years preceding the Record Date was beneficial owner of 5% or more of the Company’s then outstanding shares of Common Stock, other than persons who owned 5% or more of the Company voting shares prior to March 1, 2003. However, our Board of Directors has made no determination that any shareholder as of the Record Date for the Meeting is a Related Person. Neither abstentions nor broker non-votes will be counted as votes cast for purposes of determining whether the proposal has received sufficient votes for approval.

          Unless otherwise required by the Company’s Articles of Incorporation or Bylaws or the Florida Business Corporation Act, or by applicable law, any other proposal that is properly brought before the Meeting will require approval by the affirmative vote of a majority of all votes cast at the Meeting. With respect to any such proposal, neither abstentions nor broker non-votes will be counted as votes cast for purposes of determining whether the proposal has received sufficient votes for approval.

          Directors and executive officers of the Company beneficially hold approximately 4,321,038.2 shares of Company Common Stock, or 21.58 percent of all the votes entitled to be cast at the Meeting.

Record Date, Solicitation and Revocability of Proxies

          The Board of Directors of Seacoast has fixed the close of business on April 20, 2009 as the record date (“Record Date”) for determining the 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.

          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 Proxies. If a valid Proxy

is returned and no instructions are indicated, such shares of Common Stock will be voted FOR Proposals 1, 2, 3, 4, 5, 6 and 7, and in the discretion of the proxy holder as to any other matter that may come properly before the Meeting.

          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: Sharon Mehl, Secretary.

          The Company has a Dividend Reinvestment and Stock Purchase Plan (the “Reinvestment Plan”) administered by our transfer agent, Continental Stock Transfer and Trust Company (“Continental”). Under the provisions of the Reinvestment Plan, shares of Common Stock are acquired and held in book entry form by Continental for participating shareholders. Shares held in a participant’s plan account will be combined and voted at the Annual Meeting in the same manner in which the participant votes those shares registered in his or her own name either by proxy or in person.

          If you are a participant in the Company’s Employee Stock Purchase Plan and/or the Retirement Savings Plan for Employees of Seacoast National Bank, you are asked to vote the shares held in your account separately. Plan shares not voted by participants will be voted by the plan administrator or trustee in accordance with the terms of each respective plan.

PROPOSAL 1

ELECTION OF DIRECTORS

General

          The Meeting is being held to, among other things, re-elect four Class I directors of Seacoast, each to serve a three year term and until their successors have been elected and qualified. The nominees have been nominated by the Nominating/Governance Committee of the Board of Directors. All of the nominees are presently directors of Seacoast. All of the nominees also serve as members of the Board of Directors of Seacoast’s principal banking subsidiary, Seacoast National Bank (the “Bank”). On December 19, 2008, the Company’s Board of Directors, upon recommendation of the Company’s Nominating and Governance Committee, elected H. Gilbert Culbreth, Jr. to the Board of Directors to fill the vacancy created by the retirement of John R. Santarsiero, Jr. on August 26, 2008. Mr. Culbreth has served on the board of directors for the Bank since April 2006. The members of the Boards of Directors of the Bank and the Company are the same except for Dennis J. Arczynski, Marian B. Monroe and O. Jean Strickland, who are currently directors of the Bank only.

          As provided in the Articles of Incorporation, the Company’s Board of Directors is divided into three classes: Class I directors, who presently are serving a term expiring at the Company’s 2009 Annual Meeting of shareholders; Class II directors, who presently are serving a term expiring at the Company’s 2010 Annual Meeting of shareholders; and Class III directors, who presently are serving a term expiring at the Company’s 2011 Annual Meeting of shareholders. Currently, the Board is classified as follows:

          Upon approval of Proposal 1, the Class I directors will be elected for a three-year term expiring at the Company’s 2012 Annual Meeting of shareholders.

          All shares represented by valid Proxies, and not revoked before they are exercised, will be voted in the manner specified therein. If a valid Proxy is submitted but no vote is specified, the Proxy will be voted FOR the election of each of the four nominees for election as directors. Although all nominees are expected to serve if elected, if any nominee is unable to serve, then the persons designated as Proxies will vote for the remaining nominees and for such replacements, if any, as may be nominated by Seacoast’s Nominating/Governance Committee. Proxies cannot be voted for a greater number of persons than the number of nominees specified herein (four persons). Cumulative voting is not permitted.

          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 election of the directors listed below.

           The nominees have been nominated by Seacoast’s Nominating/Governance Committee, and the Board of Directors unanimously recommends a vote “ FOR ” the election of all four nominees listed below.

          The tables below set forth the name and age of each nominee for director, as well as each incumbent director who is not a nominee and each 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 or her position and offices with Seacoast or the Bank, a brief description of his or her principal occupation and business experience, and the number of shares of Common Stock beneficially owned by him or her as of April 20, 2009. See “Corporate Governance” for more information on the director nominating process and board committees.

CORPORATE GOVERNANCE

Independent Directors

          The Company’s Common Stock is listed on the Nasdaq Global Select Market. Nasdaq requires that a majority of the Company’s directors be “independent,” as defined by the Nasdaq’s rules. Generally, a director does not qualify as an independent director if the director (or, in some cases, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations with the Company, its external or internal auditors, or other companies that do business with the Company. The Board of Directors has affirmatively determined that a majority of the Company’s directors are independent directors under the Nasdaq rules. The Company’s independent directors are: Stephen E. Bohner, John H. Crane, T. Michael Crook, H. Gilbert Culbreth, Jr., Christopher E. Fogal, Jeffrey S. Furst, Thomas E. Rossin, and Edwin E. Walpole, III.

Independent Director Meetings in Executive Sessions

          The Company’s independent directors have established a policy to meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Thomas E. Rossin serves as the Company’s Lead Independent Director who presides at executive sessions of the independent directors. Any independent director may call an executive session of independent directors at any time. The independent directors met in executive session three times in 2008.

Director Nominating Process

          The Nominating/Governance Committee annually reviews and makes recommendations to the full Board regarding the composition and size of the Board of Directors so that the Board of Directors consists of members with the proper expertise, skills, attributes and personal and professional backgrounds needed by the Company, consistent with applicable Nasdaq and regulatory requirements.

          The Company’s Nominating/Governance Committee identifies potential nominees for directors primarily based upon suggestions from current directors and executives. Director candidates are interviewed by the Chairman of the Nominating/Governance Committee and at least one other member of the Nominating/Governance Committee. The full Board formally nominates candidates for director to be included in the slate of directors presented for shareholder vote based upon the recommendations of the Nominating/Governance Committee following this process.

          Each Director must have the qualifications, if any, set forth in the Company’s Bylaws, as well as the following minimum qualifications:

	•		The highest ethical character, an appropriate personal and professional reputation, and must share the values of the Company as reflected in its Code of Conduct;
	•		The ability to exercise sound business judgment; and
	•		Substantial business or professional experience and be able to offer meaningful advice and guidance to the Company’s management based on that experience.

          The Nominating/Governance Committee also considers numerous other qualities, skills and characteristics when evaluating Director Nominees, such as:

	•		An understanding of and experience in the financial services industry, as well as accounting, finance, legal or real estate expertise;
	•		Leadership experience with public companies or other major organizations, as well as civic and community relationships; and
	•		Qualifications as an Independent Director.

          Any Company shareholder entitled to vote generally in the election of directors may recommend a candidate for nomination as a director. A shareholder may recommend a director nominee by submitting the name and qualifications of the candidate the shareholder wishes to recommend, pursuant to Section 6.03 of the Company’s Articles of Incorporation, to the Company’s Nominating/Governance Committee, c/o Seacoast Banking Corporation of Florida, 815 Colorado Avenue, Stuart, Florida 34994. To be considered, recommendations with respect to an election of directors to be held at an annual meeting must be received not less than 60 days nor more than 90 days prior to the anniversary of the Company’s last annual meeting of shareholders (or, if the date of the annual meeting is changed by more than 20 days from such anniversary date, within 10 days after the date that the Company mails or otherwise gives notice of the date of the annual meeting to shareholders), and recommendations with respect to an election of directors to be held at a special meeting called for that purpose must be received by the 10th day following the date on which notice of the special meeting was first mailed to shareholders. Recommendations meeting these requirements will be brought to the attention of the Company’s Nominating/Governance Committee. Candidates for director recommended by shareholders are afforded the same consideration as candidates for director identified by Company directors, executive officers or search firms, if any, employed by the Company. In 2008, there were no shareholder nominee recommendations received, and no third party search firms were used to identify director candidates.

Shareholder Communications

          The Company’s Corporate Governance Guidelines provide for a process by which shareholders may communicate with the Board, a Board committee or the non-management directors as a group, or other individual directors. Shareholders who wish to communicate with the Board, a Board committee or any other directors or individual director may do so by sending written communications addressed to the Board of Directors of Seacoast Banking Corporation of Florida, a Board committee or such group of directors or individual director, c/o Corporate Secretary, Seacoast Banking Corporation of Florida, 815 Colorado Avenue, Stuart, Florida 34994. All

communications will be compiled by the Company’s Secretary and submitted to the Board of Directors, a committee of the Board of Directors or the appropriate group of directors or individual director, as appropriate, at the next regular meeting of the Board.

Corporate Governance Guidelines

          The Board of Directors has adopted Corporate Governance Guidelines that are available on the Company’s website at www.seacoastbanking.net , or without charge, upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, Stuart, Florida 34994.

Code of Conduct and Ethics

          The Board of Directors has adopted a Code of Conduct applicable to all directors, officers and employees and a Code of Ethics for Financial Professionals applicable to the Company’s chief executive officer and its chief financial officer, both of which are available on the Company’s website at www.seacoastbanking.net , or without charge, upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, Stuart, Florida 34994.

Board Meeting Attendance

          The Board of Directors held 13 meetings during 2008. All of the directors attended at least 75 percent of the total number of meetings of the Board of Directors and committees on which they serve. All of the Company’s incumbent Directors were in attendance at the Company’s 2008 Annual Meeting, except Mr. Bohner. The Company encourages all its directors to attend its annual shareholders’ meetings and all meetings of the Board of Directors and committees on which the directors serve.

Board Committees

          Seacoast’s Board of Directors has three standing permanent committees: the Salary and Benefits Committee, the Audit Committee and the Nominating/Governance Committee. The Salary and Benefits Committee and the Audit Committee serve the same functions for the Company and the Bank. The Bank also has the following standing committees: the Compliance Committee, the Directors Loan Committee, the Executive Committee, the Investment Committee and the Trust Committee.

      Salary and Benefits Committee

          The Company’s Salary and Benefits Committee is currently composed of Messrs. Rossin (Chairman), Bohner, Furst and Walpole, all of whom are independent directors. Mr. Furst was appointed to the Committee in December 2008. This Committee has the authority set forth in its Charter, and approved by the Board of Directors, including determining the compensation of the Company’s and the Bank’s key executive officers. The Committee is also responsible for preparing an annual report on executive compensation which is included herein under “Salary and Benefits Committee Report”. This Committee administers the provisions of the Company’s Profit Sharing Plan, Employee Stock Purchase Plan, the Company’s 1996 Long-Term Incentive Plan (the “1996 Incentive Plan”), the Company’s 2000 Long-Term Incentive Plan (the “2000 Incentive Plan”), the Company’s 2008 Long-Term Incentive Plan (the “2008 Incentive Plan”), the Executive Equity Compensation Program, the Executive Deferred Compensation Plan and the Directors Deferred Compensation Plan.

          The Salary and Benefits Committee has the resources and authority to discharge its responsibilities, including authority to retain and terminate any compensation consulting firms used to assist in carrying out its responsibilities, including sole authority to approve the consultant’s fees and other retention terms, with such fees to be borne by the Company. This Committee may delegate to a subcommittee consisting of two or more members of the Committee such of its duties and responsibilities as it deems appropriate and advisable. This Committee periodically reports its activities to the Board of Directors. The responsibilities and duties of the Salary and Benefits Committee are more fully set out in the Committee’s Charter, available on the Company’s website at www.seacoastbanking.net or upon written request.

          Salary and Benefits Committee meetings are held as often as necessary to allow the Committee to perform its duties and responsibilities. Although many compensation decisions are made in the first quarter of the year, the decision-making process is continuous and neither ends nor begins with any one meeting. This committee held five meetings in 2008.

          On October 3, 2008, the Emergency Economic Stabilization Act (the “EESA”) became law. Under the Troubled Asset Relief Program (“TARP”) authorized by the EESA, the U.S. Department of the Treasury (the “Treasury”) established a capital purchase program (the “CPP”) providing for the purchase of senior preferred shares of qualifying U.S. controlled banks, savings associations and certain bank and savings and loan holding companies. On December 19, 2008, pursuant to a purchase agreement (the “Purchase Agreement”), the Company sold 2,000 shares of Series A Preferred Stock (the “Series A Preferred Stock”) and warrants (the “Warrant”) to acquire 1,179,245 shares of Common Stock to the Treasury pursuant to the CPP for aggregate consideration of $50 million.

          Pursuant to the terms of the Purchase Agreement, the Company adopted the Treasury’s standards for executive compensation and corporate governance for the period during which the Treasury holds the equity issued pursuant to the Purchase Agreement, including Series A Preferred Stock and the Common Stock which may be issued pursuant to exercise of the Warrant (the “TARP Assistance Period”). These standards required that the Company’s Salary and Benefits Committee conduct a risk review within 90 days of the Treasury’s purchase of the Series A Preferred Stock. This risk review required the Salary and Benefits Committee to review all Senior Executive Officers’ bonus and incentive compensation arrangements to ensure that such compensation does not encourage the Senior Executive Officers to take unnecessary and excessive risks that threaten the value of the Company. “Senior Executive Officers” is defined to mean the Company’s chief executive officer, chief financial officer and the three next most highly compensated senior executive officers. The Senior Executive Officers include our Named Executive Officers (as defined below).

          In addition, during the TARP Assistance Period, the EESA requires that the Salary and Benefits Committee conduct a risk review at least annually. Following each review, the Salary and Benefits Committee will certify in the Company’s Compensation, Discussion and Analysis section of the Company’s proxy statement, including in this proxy statement, that it has completed this annual review and state that it has made reasonable efforts to ensure that such compensation does not encourage the Senior Executive Officers to take unnecessary and excessive risks that threaten the value of Company.

          On February 17, 2009, The American Recovery and Reinvestment Act of 2009 (“ARRA”) was enacted as part of the economic stimulus or economic recovery package. ARRA amended the EESA and requires the Salary and Benefits Committee to meet at least semi-annually to discuss and evaluate employee compensation plans in light of an assessment of any risk posed to the Company from such plans during the TARP Assistance Period.

          As a result of the Company’s participation in the CPP, the Salary and Benefits Committee’s charter was amended in 2009 to require that the Committee meet, at least semi-annually, with senior risk officers of the Company to (i) discuss and review the relationship between the Company’s risk management policies and practices and the incentive compensation arrangements of the Company’s senior executive officers, and to identify and take reasonable efforts to limit any features in such compensation arrangements that could lead the senior executive officers to take unnecessary or excessive risks that could threaten the value of the Company, and (ii) provide a certification with respect to this review. The revised Salary and Benefits Committee charter is available on the Company’s website at www.seacoastbanking.net .

      Audit Committee

          The Audit Committee is currently composed of Messrs. Fogal (Chairman), Crane, Crook and Furst, all of whom the Board of Directors has determined are independent directors under Nasdaq and SEC rules. The Board of Directors has also determined that Christopher E. Fogal is an “audit committee financial expert” as defined by the SEC. The Audit Committee has the responsibilities set forth in the Audit Committee Charter, as adopted by the full Board of Directors, available on the Company’s website at www.seacoastbanking.net or upon written request, including reviewing Seacoast and its subsidiaries’ financial statements and internal accounting controls, and reviewing reports of regulatory authorities and determining that all audits and examinations required by law are

performed. It appoints the independent auditors, reviews their audit plan, and reviews with the independent auditors the results of the audit and management’s response thereto. The Audit Committee also reviews the adequacy of the internal audit budget and personnel, the internal audit plan and schedule, and results of audits performed by the internal audit staff. The Audit Committee is responsible for overseeing the audit function and appraising the effectiveness of internal and external audit efforts. The Audit Committee also reviews the procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, as well as related party transactions and changes to the Company’s Code of Conduct. The Audit Committee periodically reports its findings to the Board of Directors. This Committee held five meetings in 2008. During two of the meetings, the Audit Committee met in private session with our independent auditor; during one of the meetings, the Audit Committee met in private session with the Internal Audit and Compliance Manager and alone in executive session without members of management present; and during several of the meetings, the Audit Committee met in private session with individual members of management.

      Nominating/Governance Committee

          The Nominating/Governance Committee is currently composed of Messrs. Furst (Chairman), Bohner and Rossin, all of whom are independent directors. The purpose of this Committee is to identify individuals qualified to become members of the Board of Directors of the Company and/or the Bank, and recommend to the Board of Directors of the Company and the Bank the director nominees for the next annual meeting of shareholders. The Committee also takes a leadership role in shaping corporate governance policies and practices, including recommending to the Board of Directors the corporate governance guidelines applicable to the Company and monitoring Company compliance with these policies and guidelines for the purpose of nominating persons to serve on the Board. The responsibilities and duties of the Nominating/Governance Committee are more fully set out in the Committee’s charter, available on the Company’s website at www.seacoastbanking.net or upon written request. This Committee held one meeting in 2008.

          In addition to the standing committees of the Seacoast’s Board of Directors, the Bank’s board of directors has the following standing committees: Executive Committee, Investment Committee, Trust Committee and the Directors Loan Committee. These Committees perform those duties customarily performed by similar committees at other financial institutions. In December 2008, the Bank’s board of directors also formed a Compliance Committee responsible for monitoring and coordinating the Bank’s adherence to the provisions of the formal agreement with the Office of the Comptroller of the Currency (“OCC”) entered into on December 16, 2008 (the “Formal Agreement”). The Formal Agreement provides for the development and implementation of written programs to reduce the Bank’s credit risks, monitor and reduce the level of criticized assets, and manage commercial real estate loan concentrations in light of current adverse market conditions.

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 meeting of Company shareholders, to serve until the next annual meeting and until successors are chosen and qualified.

Management Stock Ownership

          As of April 20, 2009, based on available information, all directors and executive officers of Seacoast as a group (17 persons) beneficially owned approximately 4,321,038.2 outstanding shares of Common Stock, constituting 21.25 percent of the total number of shares of Common Stock outstanding at that date. In addition, as of the Record Date, various subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting power over 73,989 outstanding shares, or 0.36 percent of the outstanding shares, of Seacoast Common Stock, including shares held as trustee or agent of various Seacoast employee benefit and stock purchase plans. See “Quorum and Voting Requirements”, “Record Date, Solicitation and Revocability of Proxies” and “Principal Shareholders”.

COMPENSATION DISCUSSION & ANALYSIS

          Under SEC rules, the Company is required to provide certain data and information in regard to the compensation and benefits provided to its chief executive officer, chief financial officer and other executive officers, including the three other most highly compensated executive officers based on total compensation (collectively, the “Named Executive Officers”). The disclosure requirements for the Named Executive Officers include the use of tables and a discussion and analysis explaining the rationale and considerations that led to fundamental executive compensation decisions affecting these individuals.

          The SEC rules regarding disclosure of executive compensation were greatly altered by the SEC in 2006 for our proxy statements commencing with the 2007 proxy statement. In addition to new and different tables, greater emphasis is placed on providing discussion and analysis of our compensation practices. Accordingly, the information in this proxy statement is not directly comparable to the information contained in our proxy statements prior to 2007.

          The following discussion reflects Seacoast’s compensation philosophy as endorsed by our Board of Directors and its Salary and Benefits Committee and the resulting actions taken by Seacoast for the reporting periods shown in the various compensation tables. The Salary and Benefits Committee either approves or recommends to the Board of Directors the payment amounts and award levels for executive officers of Seacoast and its subsidiaries.

      General

          The Salary and Benefits Committee of the Board of Directors is composed of four members, all of whom are “independent directors”, as defined by Nasdaq rules. The Board of Directors designates the members and Chairman of such committee.

      Business Model and Competitive Environment

          The Company operates in highly competitive employment markets which, along with the concentration of wealth in its markets on the southeast coast of Florida, makes the area one of the most attractive regions in Florida for banks to operate. Subsequently, Seacoast competes for talent with large national and regional bank franchises who seek local executive and production personnel, and with small local bank franchises who seek executive level talent. Additionally, several super-community banks operate within the market, or have plans to enter and capture market share, creating further competition to the Company for qualified employees.

          In order to operate in this highly competitive market, the Company has implemented a complex business model that requires bankers who can leverage the best strategies of both the large and small banking institutions. Specifically, the Company’s size allows it to compete for larger commercial relationships, supported by a complete product offering which includes trust, investment services, private banking and specialty financing, in addition to more common consumer and business banking services. However, to compete with smaller community banks in its markets, the Company also maintains a relationship banking focus on both consumer and commercial business customer needs. We believe this dual strategy requires an organizational culture driven by the value systems of its employees—where disciplines such as taking high levels of personal responsibility, creating effective relationships and providing superior customer service, ultimately drive profitability.

      Compensation Policy

          The policies that govern the Salary and Benefits Committee’s executive compensation decisions are designed to:

	•		attract and retain highly competent leaders and employees at all levels in the organization, and
	•		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 certain executive officers and others should be directly linked to Seacoast’s operating performance and that the achievement of performance objectives over time is the primary determinant of share price.

          The objectives of the Salary and Benefits Committee’s compensation strategy are to establish incentives for its executives and other key employees to achieve and maintain short-term and long-term operating performance goals for Seacoast, to link certain 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:

	•		annual cash compensation (base salary and short-term annual cash incentives); and
	•		equity compensation (restricted stock, stock options and stock-settled stock appreciation rights).

Retirement benefits and other compensation include:

	•		profit sharing;
	•		employer matching contributions on deferred compensation; and
	•		supplemental disability insurance.

Each of these elements of compensation is described in further detail below.

          The Salary and Benefits Committee reviews executive officer compensation at least annually to ensure it is consistent with our compensation philosophies, company and personal performance, changes in market practices and changes in individual responsibilities. The Committee also conducts an annual review of performance for the most recently completed fiscal year. A discussion of the Company’s strategic goals for 2008 and 2009 is contained in the “Management’s Discussion and Analysis” section of the Company’s Annual Report.

          The executive compensation policies established by the Committee have been developed over the past three years based in part on the following:

          During 2005, the Committee retained Clark Consulting, an independent consulting firm, to review the Company’s executive compensation program and to comment on its design, competitiveness, and effectiveness. The firm was paid a total of $120,533 in 2005 and 2006 for such services. The firm evaluated the Company’s business model and compared a number of Seacoast’s executive positions, including that of the Chief Executive Officer, President and Chief Operating Officer, to 20 other publicly held regional banks and bank holding companies in the southeastern United States that were identified by Clark Consulting as being comparable in size and performance. The average asset size of the peer group was $2.52 billion, based on data from the most recent fiscal year-end available at the time of the study. The consultant’s report indicated that Seacoast’s return on average assets and net interest margin were close to the peer group median. Seacoast’s return on average equity and earnings per share growth were closer to the 75 ^th and 80 ^th percentile, respectively. Therefore, based on the 2005 review of performance and Seacoast’s operating strategy and model, the compensation for Seacoast’s executive officers and other key employees has been targeted to the 75 ^th percentile.

          As a result of the review, in 2006 the Salary and Benefits Committee implemented additional measures to assist in the long-term retention of key executives and to better align compensation programs with corporate performance, including the adoption of a more clearly defined executive equity compensation program, as described in detail under “Long-Term Incentives” below.

          During 2008, the Committee retained Grant Thornton, a nationally known independent consulting firm, to review the Company’s executive equity compensation program for its competitiveness and effectiveness, and make recommendations. The firm was paid a total of $12,762 in 2008 for such services. The firm compared a number of Seacoast’s executive positions, including that of the Chief Executive Officer, Chief Financial Officer, and the Bank’s President and Chief Operating Officer, to 23 other publicly held regional banks and bank holding companies in the southeastern United States that were identified by Grant Thornton as being comparable in size and performance. The average asset size of the peer group was $2.31 billion, based on data from the most recent fiscal quarter-end available at the time of this study. Grant Thornton recommended equity awards be made to the Company’s senior executive officers. The Committee decided not to act on Grant Thornton’s recommendations at this time in light of the Company’s financial performance and recent changes in financial market conditions.

          In summary, Seacoast’s compensation program is designed to:

	•		be competitive with compensation paid by other financial institutions of comparable size and performance in the southeastern United States,
	•		reward managers for strong personal and Company performance, and
	•		enable the Company to attract and retain key talent in its highly competitive markets.

          The Salary and Benefits Committee monitors the various guidelines that make up the program and adjusts them as necessary to continue to meet Company and shareholder objectives.

      Effect of the Participation in the Capital Purchase Program

          Institutions that participate in the CPP and their senior executive officers must agree to comply with the standards for executive compensation and corporate governance set forth in Section 111 of the EESA for the period during which the Treasury holds equity or debt securities issued under the program. Initially, those standards apply to our Senior Executive Officers, which presently includes our Named Executive Officers. Specifically, the Company:

	•		must ensure that incentive compensation for Senior Executive Officers does not encourage unnecessary and excessive risks that threaten the value of the financial institution;
	•		must require clawback of any bonus or incentive compensation paid to a Senior Executive Officer based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate;
	•		is prohibited from making golden parachute payments to Senior Executive Officers; and
	•		agrees not to deduct for tax purposes executive compensation in excess of $500,000 for each Senior Executive Officer.

          Each of the Company’s Named Executive Officers signed a consent agreement to reduce his/her compensation and other benefits to the extent necessary to comply with the EESA requirements and a waiver to voluntarily waive any claim against the Treasury or the Company for any changes to such Named Executive Officer’s compensation or benefits that are required to comply with the regulations. The consent agreement and the waiver are attached as Exhibits 10.2 and 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 23, 2008.

          On February 4, 2009, the Treasury announced executive compensation guidelines which impose additional restrictions on executive compensation for institutions participating in the CPP. Among other things, the Treasury guidelines require the Salary and Benefits Committee to meet at least annually with senior risk officers to discuss and review the relationship between the Company’s risk management policies and practices and the Senior Executive Officer incentive compensation arrangements. The guidelines also contemplate an absolute limit of $500,000 on annual compensation for senior executive officers under certain circumstances. The Treasury guidelines indicate that new rulemaking will be necessary by the Treasury before they become effective, but that such a limit would not apply to CPP participants, unless they further participated in additional government assistance programs.

          On February 17, 2009, ARRA was enacted, which requires the Treasury to implement restrictions on executive compensation on financial institutions during the TARP Assistance Period. Under ARRA, the compensation standards are required to include the following:

	•		Prohibition on severance . ARRA standards will prohibit severance payments to any Senior Executive Officer or any of the next five most highly-compensated employees, other than payments for services performed or benefits accrued.
	•		Prohibition on bonuses, retention awards, and other incentive compensation. ARRA standards will prevent us from paying or accruing any bonus, retention award or incentive compensation to our Senior Executive Officers or at least the next five most highly compensated employees, or such higher number as the Treasury may determine is in the public interest, subject to certain exemptions during the TARP Assistance Period. The exceptions are limited, although we will be permitted to award long-term restricted stock that has a value not exceeding one-third of the employee’s total annual compensation, so long as such restricted stock does not fully vest during the TARP Assistance Period.

	•		S tricter clawback. ARRA standards will extend this recovery requirement to the next 20 most highly compensated employees in addition to our Senior Executive Officers.
	•		Prohibition on compensation plans that “encourage” earnings manipulation . ARRA prohibits participating companies from implementing any compensation plan that would encourage manipulation of the reported earnings of the Company in order to enhance the compensation of any of its employees.

          The prohibition on bonuses, retention awards and other incentive compensation may expand to other employees based on increases in the aggregate value of financial assistance that we receive in the future. For example, if we receive at least $250 million but less than $500 million in TARP financial assistance, the Senior Executive Officers and at least the next 10 most highly compensated employees will be prohibited from receiving or accruing certain bonus and awards.

          To comply with the standards as described above, the Salary and Benefits Committee has reviewed the incentive compensation arrangements to Senior Executive Officers to ensure they do not encourage unnecessary and excessive risk taking, and its conclusions are included in the Committee’s report at the end of this section. The Company has also complied with the other provisions of the EESA, including limiting the tax deductibility of a portion of the compensation earned by the Senior Executive Officers.

          ARRA also requires that during the TARP Assistance Period, the Salary and Benefit Committee should review, with the Company’s senior risk officers, the Senior Executive Officers’ incentive compensation arrangements to ensure that the incentive compensation arrangements do not encourage them to take unnecessary and excessive risks. No money received by the Company in connection with its participation in the TARP CPP was used to pay bonuses or other compensation to its Named Executive Officers or in determining whether its Named Executive Officers achieved such goals.

          As noted, the ARRA directs the Treasury to issue regulations implementing the foregoing. There are numerous questions regarding the scope of the limitations and the requirements of ARRA. None of the regulations mandated by the law had been issued by the Treasury as of March 31, 2009. Pending the issuance of regulations, the Board, the Salary and Benefits Committee and management are reviewing the requirements of ARRA, its impact on current and future compensation, and the effect of the law’s requirements on the Company’s competitive position. Actions required by consideration of ARRA, competitive factors and our overall compensation philosophy and objectives may include changes to the form and amount of compensation paid to our executive officers, including increases to base salaries, the reduction or elimination of bonus compensation, issuance of long-term restricted stock awards and modifications to existing employment and change in control agreements.

          At this time, the compensation standards under ARRA have not yet been developed. However, we expect that these standards may require substantial alterations to our compensation program. The impact of ARRA on the retention of our existing, and recruitment of future, senior officers cannot be assessed at this time, but is expected to negatively impact both recruitment and retention of experienced qualified executives.

      Base Salary

          In establishing executive officer salaries, the Salary and Benefits Committee considers individual annual performance and contribution to the Company’s overall profitability, as well as the relationship of total compensation to similar positions in other banks identified as comparable by Clark Consulting. Changes in base salary to the Named Executive Officers are recommended by the chief executive officer based on performance results documented and measured annually, and the Salary and Benefits Committee reviews and approves such recommendations. The chief executive officer has authority to make base salary decisions for all other officers. A change in the base salary paid to the chief executive officer is recommended by the chief executive officer and considered and approved by the Salary and Benefits Committee, after meeting in executive session, generally on an annual basis. Information regarding salaries paid in the market is obtained annually through publicly available salary surveys and proxy statement data, and is used to evaluate Seacoast’s competitiveness in the employment market with its peers and competitors. Consultants selected by the Salary and Benefits Committee may also be used periodically to assess the competitiveness of the Company’s salaries. 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. Given our highly competitive employment market in South Florida and Seacoast’s business strategy, the base salary level for key executives is targeted at the 75 ^th percentile of comparable positions for above average performers.

      Short-Term Annual Cash Incentives

Key Manager Incentive Plan

          In accordance with our pre-ARRA philosophy of emphasizing variable and performance-based compensation, we provide our executives with the opportunity to earn performance-based annual cash incentives that we generally intend, subject to any applicable legal limitation under the EESA, ARRA, and Treasury or bank regulatory rules, to be as or more significant than base salary in determining the total compensation received by our top executives, assuming the performance of these executives is at expected levels of achievement.

          Seacoast’s Key Manager Incentive Plan seeks to align short-term cash compensation with individual performance and value created for the shareholders. Each year in January at the recommendation of the chief executive officer, the Salary and Benefits Committee approves three or four high-priority nonfinancial goals that relate to the strategic plan and an earnings per share (“EPS”) target based on the annual budget approved by the full Board. The growth rate in budgeted EPS over the prior year is used as a guide in determining the funding level for this annual incentive. Funding is dependent on Seacoast attaining the defined threshold performance for earnings per share shown below and achieving the predetermined nonfinancial goals for the year. Funding in excess of threshold is based solely on the achievement of EPS growth of 5% or higher over prior year. Earnings growth of 12% or higher over prior year is required for the highest level of funding to be considered. If annual performance goals are not reached or are exceeded, the plan funding is adjusted, as shown below. The Salary and Benefits Committee approves the funding pool based on the following guidance:

          Using recommendations made by the Company’s chief executive officer, awards are made by the Salary and Benefits Committee 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. The individual payouts to the Named Executive Officers are approved by the Salary and Benefits Committee. As specified in the plan, the payout schedule is designed to pay a smaller number of key officers the highest level of funded cash incentives to ensure that a meaningful reward is provided to our 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, Company and personal objectives, 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.

          Participants in the Key Manager Incentive Plan are classified into three tiers, representing a group of officers whose positions and responsibilities are similar. Four of the Named Executive Officers are participants under Tier 1 of the Key Manager Incentive Plan: Dennis S. Hudson, III, William R. Hahl, O. Jean Strickland, and H. Russell Holland, III. Mr. Gilbert’s participation in the plan ended with the execution of the Executive Transition Agreement described under “Employment and Change in Control Agreements”. The performance of Tier 1

participants is weighted 50 percent on corporate performance and 50 percent on the achievement of individual goals. Tier 2 participants (11 persons) are line of business and support executive officers who do not receive annual incentive compensation under other Company performance based plans. Tier 3 participants (5 persons) are other key managers who do not receive annual incentive compensation under other Company performance based plans. Performance for Tier 2 and 3 participants is weighted 25 percent on corporate performance and 75 percent on the achievement of individual goals.

          Once the threshold has been met, incentive pools are then established for each tier group based on the percentage of the annual salaries for eligible participants. For Tier 1 participants, if awards are made, the pool is calculated at 30 percent of base salary for threshold performance, 60 percent for target performance and 90 percent for target plus performance. For Tier 2 participants, the pool is calculated at 15 percent of base salary for threshold performance, 30 percent for target performance and 37.5 percent for target plus performance. For Tier 3 participants, the pool is calculated at 10 percent of base salary for threshold performance, 20 percent for target performance and 25 percent for target plus performance. At the discretion of the Salary and Benefits Committee, if the performance results fall between the target and target plus annual performance goals, plan funding may be interpolated between target and target plus performance. Unless individual performance is unsatisfactory, the minimum payout when threshold performance is attained is 10 percent of base salary for Tier 1 participants, and five percent of base salary for Tier 2 and Tier 3 participants, in each case to ensure a meaningful reward for performance.

          Due to lower than threshold performance by the Company for the year, no awards were made under the Key Manager Incentive Plan in 2008.

Effect of ARRA

          ARRA directs the Treasury to adopt compensation standards that include a prohibition on bonuses and incentives, other than certain restricted stock awards. As a result, once established, these new compensation standards may preclude or reduce any cash payment of annual incentive compensation and other short-term incentives to our senior executive officers, at least, and any of the next five most highly-compensated employees (or such greater number as the Treasury may specify) until the Company no longer participates in TARP. Accordingly, our 2009 Key Manager Incentive Plan, if any, will likely be substantially different from the 2008 program.

      Long-Term Incentives

          The Salary and Benefits Committee believes that equity awards are important to achieving the objective of the compensation strategy to motivate and reward sustained high levels of performance and align the interests of key employees with those of the Company’s shareholders by rewarding capital appreciation and earnings growth.

          In 2006, based on its review of the recommendations of Clark Consulting, the Salary and Benefits Committee approved the adoption of an executive equity compensation program (the “Executive Equity Compensation Program”). The Executive Equity Compensation Program was implemented to provide greater structure around the granting of equity awards pursuant to the Company’s existing Long-Term Incentive Plans to key employees to motivate and more effectively compensate for extended levels of strong Company performance by setting achievement and reward levels in advance.

          In 2008, the Company’s shareholders approved the Company’s 2008 Incentive Plan, pursuant to which the Company may grant stock-based awards and any other right or interest relating to Common Stock or cash to key employees. Subject to adjustments, the aggregate number of shares of Common Stock reserved and available for awards or which may be used to provide a basis of measurement for or to determine the value of an award, such as with a stock-settled stock appreciation rights (“SSARs”) or performance share award, is 1,500,000 shares.

          As a result of their review in 2008, Grant Thornton recommended that the Company grant equity awards to the named executive officers in the form of stock-settled SSAR. Although the Committee considers equity awards a valuable tool to provide proper motivation and incentive, promote retention, and align the interests of management with those of the Company’s shareholders, the Committee declined to make any equity awards to the Named Executive Officers in 2008. The decision was made based on the Company’s financial performance in 2007 and 2008 and given recent changes in financial market conditions and the unknown duration of the current economic

cycle. The Executive Equity Compensation Plan remains in effect and may be used in the future to make appropriate awards.

Executive Equity Compensation Program

          The Equity Compensation Program provides a framework for annual grants of restricted stock and stock-settled stock appreciation rights under the Company’s 2000 Incentive Plan and 2008 Incentive Plan, and promotes the corporate objective of increasing executive stock ownership.

          Participants in the Equity Compensation Program are classified into five tiers, with each tier representing a group of officers whose positions and responsibilities are similar. Four of the Named Executive Officers are participants under Tier 1 of the Equity Compensation Program: Dennis S. Hudson, III, William R. Hahl, O. Jean Strickland and H. Russell Holland, III. Mr. Gilbert’s participation in the plan ended with the execution of the Executive Transition Agreement described under “Employment and Change in Control Agreements”. Tiers 2 through 5 are comprised of regional presidents, line of business and support executive officers, senior managers and division heads, and other key contributors, respectively.

          The Equity Compensation Program provides for the grant of equity awards to certain participants depending on the financial performance of the Company. The Salary and Benefits Committee establishes financial performance goals, upon which the size of the equity award, if any, will be determined. Awards in excess of the target performance goals can also be given for superior annual performance. The target and maximum amounts of the equity awards that each participant may receive is based upon a percentage of his or her base compensation. The target and maximum awards for Tier 1 participants are 40% and 80%, respectively, of base compensation.

          Under the Equity Compensation Program, annual awards are made to participants. By executing an election form each year, participants may opt to receive one of the following: (1) 100 percent restricted stock, (2) 100 percent stock appreciation rights, or (3) 50 percent restricted stock and 50 percent SSARs. The exercise price of the SSAR is based on the closing sale price of Company Common Stock on the Nasdaq Global Select Market on the effective date of grant. The Committee has established a policy under which grants will be effective on the first business day of the calendar quarter following the grant date. This timing was chosen to prevent even an appearance that either management or the recipient could manipulate the pricing date, and also to reduce the administrative and accounting burden for Seacoast personnel that would be created by multiple grant dates. Awards granted under the Equity Compensation Program vest in four equal annual installments beginning on the second anniversary of the date of grant, subject to the continued employment of the recipient. In order to attract and retain executives in a market where acquisitions are common, vesting of these awards accelerates in full in the event of the participant’s death or disability, or upon the occurrence of a change of control of the Company. All SSARs are settled in shares of Company Common Stock. The participant has full voting and dividend rights with respect to the restricted stock during the vesting period.

          No equity awards were made to the Named Executive Officers in 2008 under the Equity Compensation Program.

          The Equity Compensation Program also provides for a bonus stock matching program under which participants may elect to use a percentage of their annual cash bonus, if any, to purchase shares of Company Common Stock. This matching program is intended to facilitate the stock ownership guidelines described below, which will align shareholder and management interests. If the participant makes such an election, the Company matches a percentage of the shares purchased with the participant’s cash bonus by granting the participant an award of restricted stock under the 2000 Incentive Plan. All tiers of participants are eligible for participation in the bonus stock matching program. The percentage of shares matched by the Company varies from 50% to 100% depending on the participant’s tier group. Under the bonus stock matching program, the Tier 1 group may use up to 50 percent of their annual cash bonus to purchase Common Stock, and the Company will match 50 percent of that amount in restricted stock.

          The Company Common Stock purchased under the bonus stock matching program by Section 16 insiders, which includes the Named Executive Officers, is issued as restricted stock subject to a one-year holding period.

          No awards were made in 2008 to the Named Executive Officers under the bonus stock matching program.

          As part of the Equity Compensation Program, the Board also established stock ownership guidelines for its officers and directors, as described below:

		Stock Ownership
Tier 1		3 times annual salary
Tier 2		2 times annual salary
Tier 3		2 times annual salary
Tier 4		1 times annual salary
Board Members		5 times annual retainer

          The Equity Compensation Program generally allows a participant to earn targeted ownership over a reasonable period, usually within five to seven years, provided individual and Company targets are achieved and provided the participant fully participates in the program.

2008 Incentive Plan

          The 2008 Incentive Plan authorizes the granting of awards to officers and key employees of the Company or its subsidiaries in the following forms: (i) options to purchase shares of Common Stock, which may be incentive stock options or nonqualified stock options; (ii) SSARs; (iii) performance shares; (iv) restricted stock; (v) dividend equivalents; (vi) other stock-based awards; or (vii) any other right or interest relating to Common Stock or cash. The maximum number of shares of Common Stock with respect to one or more options and/or SSARs that may be granted during any one calendar year under the 2008 Incentive Plan to any one participant is 500,000. The maximum fair market value of any awards (other than options and SSARs) that may be received by a participant (less any consideration paid by the participant for such award) during any one calendar year under the 2008 Plan is $2,000,000.

          There were no equity awards granted to the Named Executive Officers in 2008 under the 2008 Incentive Plan.

Effect of ARRA

          During the TARP Assistance Period, TARP recipients are prohibited from paying or accruing any bonus, retention award, or incentive compensation (the “Bonus/Incentive Prohibition”). This Bonus/Incentive Prohibition does not apply to the payment or accrual of long-term restricted stock that:

	•		does not fully vest during the TARP Assistance Period;
	•		has a value not greater than one-third of the total amount of annual compensation of the employee receiving the stock; and
	•		is subject to such other terms and conditions as the Treasury may determine are in the public interest.

          Therefore, our future long-term compensation programs, including the Executive Equity Compensation Program will likely be substantially different from the current program as described above. The maximum amount of awards for participants will likely be reduced and awards are likely to consist of long-term restricted stock that will vest based on the expected duration of the TARP Assistance Period of the Company.

      Other Benefits

          The Named Executive Officers participate in the benefit programs that generally are available to all full-time employees of the Company and the Bank. These benefits include hospitalization, major medical, disability and group life insurance plans, paid vacation, and Company contributions to the Profit Sharing Plan (described below). In addition, the Named Executive Officers may also participate in the Executive Deferred Compensation Plan and receive supplemental disability insurance (both described below).

          The Named Executive Officers may also be compensated with certain perquisites and other benefits provided by or paid for by the Company, as necessary to facilitate their roles as representatives of the Company. These may include, for example, the use and maintenance of company owned automobiles, a car allowance and country club dues. See the “Summary Compensation Table” and “Components of All Other Compensation Table”.

Profit Sharing Plan

          Seacoast sponsors a Retirement Savings Plan for Employees of Seacoast National Bank and its affiliates, which is a tax-qualified, defined contribution plan (the “Profit Sharing Plan”). All employees who satisfy service eligibility requirements may participate in the plan. The Profit Sharing Plan has various features, including:

	•		an employer matching contribution for salary deferrals,
	•		an annual retirement contribution, and
	•		a profit sharing contribution.

          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 the Board of Directors 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 percent 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. The Company matches 100 percent of any Elective Profit Sharing Contribution that is deferred into the Profit Sharing Plan.

          In addition, the Profit Sharing Plan has a feature under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) that allows employees to make voluntary “salary savings contributions” ranging from 1 percent to 75 percent 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” (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 two percent of “retirement eligible compensation”, as defined in the Profit Sharing Plan.

          Salary Savings Contributions, rollover contributions, Elective Profit Sharing Contributions, and other voluntary contributions made by the participant, as well as any investment earnings on these contributions, are immediately vested. The Company contributions to the Profit Sharing Plan vest at the rate of 25 percent for each year the participant has worked at least 1,000 hours, with full vesting after four years of service. A participant becomes 100 percent vested in the event of death, disability or retirement on or after age 55.

          Each participant directs how his account in the Profit Sharing Plan is invested among the available investment vehicle options, which include a Company stock fund. The plan’s investment options are reviewed and selected annually by a committee appointed by the Board of Directors of the Company to administer the plan. The Board of Directors has appointed Marshall & Ilsley Trust Company N.A. (“M&I”), as trustee of the plan. The participants have full voting and dividend rights with respect to their respective shares of Company stock held in the Profit Sharing Plan.

          The Company’s Board of Directors decided not to make a profit sharing contribution for the year of 2008. See the “Summary Compensation Table” and “Components of All Other Compensation Table”.

Executive Deferred Compensation Plan

          The Bank offers the Executive Deferred Compensation Plan (“Deferred Compensation Plan”) designed to permit a select group of management and highly compensated employees, including the Named Executive Officers except Mr. Holland, to elect to defer a portion of their compensation until their separation from service with the Company, and to receive matching and other Company contributions which they are restricted from receiving because of legal limitations under the Company’s Profit Sharing Plan.

          The Deferred Compensation Plan was amended and restated in 2007 to reflect changes arising from requirements under Section 409A of the Code and the underlying final regulations. As a result, each participant account is separated, for accounting purposes, into sub-accounts to reflect:

	•		contributions and investment gains or losses that were earned and vested on or before December 31, 2004 and any subsequent investment gains or losses thereon (the “Grandfathered Benefits”); and
	•		contributions and earnings that were earned and vested after December 31, 2004 (the “Non-Grandfathered Benefits”).

          Compensation deferred by the participant to the Deferred Compensation Plan is immediately vested. The Company contributions to the Deferred Compensation Plan vest at the rate of 25 percent for each year of service the participant has accrued under the Profit Sharing Plan, with full vesting after four years of service. If a participant would become immediately vested in his Company contributions under the Profit Sharing Plan for any reason (such as death, disability, or retirement on or after age 55), then he would also become immediately vested in his account balance held in the Deferred Compensation Plan.

          Each participant directs how his account in the Deferred Compensation Plan is invested among the available investment vehicle options. The plan’s investment options are reviewed and selected annually by a committee appointed by the Board of Directors of the Company to administer the plan. While the plan committee is responsible for administration of the plan, it may appoint other persons or entities to perform any of its fiduciary or other functions. No earnings or dividends paid under the Deferred Compensation Plan are above-market or preferential.

          The assets of the Deferred Compensation Plan are held, invested and administered from a “Rabbi trust” established by the Company as a funding vehicle for the plan, and all amounts paid under the plan are paid in cash from the general assets of the Company. Nothing contained in the plan creates a trust or fiduciary relationship of any kind between the Company and a participant, beneficiary or other person having a claim to payments under the plan. A participant or beneficiary does not have an interest greater than that of an unsecured creditor.

          The plan’s Rabbi trust is administered pursuant to a trust agreement between the Company and M&I, as the trustee of the trust. The Company has agreed to indemnify and to hold M&I harmless from and against all claims, expenses (including reasonable attorney fees), liabilities, damages, actions or other charges incurred by or assessed against M&I as a direct or indirect result of M&I’s reliance upon the directions, acts or omissions of the plan administrator, the Company, any investment advisor, or any participant of the plan or as a direct or indirect result of any act or omission of any other person charged under any agreement affecting the assets of the trust with investment responsibility with respect to such assets.

          Upon a participant’s separation from service with the Company, the participant will receive the balance of his account in cash in one of the following three forms specified by the participant at the time of initial deferral election, or subsequent amendment:

	•		a lump sum;
	•		monthly installments over a period not to exceed five years; or
	•		a combination of an initial lump sum of a specified dollar amount and the remainder in monthly installments over a period not to exceed five (5) years.

          Upon death of the participant prior to the distribution of his account, the balance in the account shall be paid in a lump sum to the beneficiary or to the estate of the participant if no beneficiary is designated. In general, a participant may not change his initial election regarding the form of distribution of Non-Grandfathered Benefits.

However, participants had the opportunity prior to December 31, 2007 to make a one-time election to change their distribution election with respect to Non-Grandfathered Benefits.

          Earned contributions, earnings and balances in the individual accounts of the Named Executive Officers in 2008 are disclosed in the “Nonqualified Deferred Compensation” table.

Supplemental Disability Insurance

          The Bank provides supplemental disability insurance to certain members of executive management, including the Named Executive Officers, in excess of the maximum benefit of $10,000 per month provided under the group plan for all employees. The supplemental insurance provides a benefit up to 70 percent of the executive’s monthly pre-disability income based on the executive’s base salary and annual incentive compensation. Coverage can be converted and maintained by the individual participant after employment ends. The benefit may be reduced by income from other sources, and a partial benefit is paid if a disabled participant is able to work on a part-time basis. In 2008, the Company paid a total of $33,438 for supplemental disability insurance for 24 of its executive officers, including $10,785 for the Named Executive Officers.

          The value of the supplemental disability insurance paid by the Company for the Named Executive Officers is included in the “Summary Compensation Table” under “Components of All Other Compensation Table” and disclosed in the footnote thereto.

Employment and Change in Control Agreements

          The Bank entered into an executive employment agreement with A. Douglas Gilbert on March 24, 1991. This agreement was subsequently amended on June 22, 2007 with the execution of an Executive Transition Agreement between the Company and Mr. Gilbert which provided for Mr. Gilbert’s anticipated retirement from full-time work (the “Transition Agreement”) and terminated with his retirement on January 31, 2009. The Bank executed similar executive employment agreements with Dennis S. Hudson, III on January 18, 1994, and with H. Russell Holland, III on January 2, 2007.

          All of these employment agreements contain certain non-competition, non-disclosure and non-solicitation covenants. Each such agreement also provides for 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 Conduct, 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 percent 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 after a change in control, and 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.

          The Company entered into change in control employment agreements with Dennis S. Hudson, III and A. Douglas Gilbert on December 24, 2003. The change in control agreement with Mr. Gilbert was subsequently amended by the Transition Agreement on June 22, 2007, and terminated with Mr. Gilbert’s retirement on January 31, 2009. Each change in control agreement has a three-year term and provides for automatic one-year extensions unless expressly not renewed. A change in control must occur during this period (the “Change in Control Period”) to trigger the agreement. These agreements supersede the change-in-control provisions in the executive’s employment agreements with the Bank. The Company executed a similar change in control employment agreement with William R. Hahl on December 24, 2003, having a two-year Change in Control Period.

          Each of the change in control employment agreements provides that, once a change in control has occurred, the executive subject to the contract (the “Subject Executive”) and the Company agree to continue, for the Change in Control Period, the Subject Executive’s employment in the same position as held in the 120 days period prior to the change in control. If the Subject Executive is terminated for “cause” or resigns “without good reason”, as defined in the agreement, the Subject Executive will receive payment of the Subject Executive’s base salary and unused vacation through the date of termination and any previously accrued and deferred compensation (the “Accrued Obligations”). If the Subject Executive resigns for “good reason” or is terminated “without cause”, or resigns for any reason during a 30-day period specified in the contract, the Subject Executive will receive the Accrued Obligations and a bonus equal to the highest bonus earned by the Subject Executive for the previous three full fiscal years (“Highest Bonus”) multiplied by a fraction (the numerator of which is the number of days between January 1 and the Subject Executive’s date of termination and the denominator of which is 365), as well as an amount equal to what the Subject Executive’s annual base salary plus Highest Bonus would have been over the Change in Control Period. All unvested stock options to acquire stock of the Company and all awards of restricted stock of the Company held by Subject Executive as of the date of termination shall be immediately and fully vested as of the date of termination and, in the case of stock options, shall be fully exercisable as of the date of termination. The Company will also provide health and other welfare benefits to the Subject Executive for the duration of the Change in Control Period.

          The Company and the Bank entered into an executive employment agreement with O. Jean Strickland on March 26, 2008. The agreement supersedes previous employment and change in control agreements between Ms. Strickland and the Company dated December 24, 2003 and January 7, 2004, respectively. The new employment agreement generally consolidates the prior agreements with similar terms, benefits and restrictions as the agreements discussed above. The agreement also extends the benefits available to Ms. Strickland upon a change in control of Seacoast from a period of two years (as previously provided) to three years, a period of benefit which is consistent with her current position.

          The Transition Agreement with Mr. Gilbert defined the compensation arrangements, including salary, bonus and other benefits, between Mr. Gilbert and the Company during the transition period between the effective date of the Transition Agreement and his retirement date (the “Transition Period”) on January 31, 2009 (the “Retirement Date”). Under the Transition Agreement, Mr. Gilbert received a base salary increase of 6% effective June 1, 2007, which was maintained through his Retirement Date. Also under the Transition Agreement, the Company agreed to pay Mr. Gilbert, as long as he was employed by the Bank:

	•		on each of January 31, 2008 and January 31, 2009, an annual cash bonus of $376,000, which equals his highest bonus earned over the past 3 years under the Key Manager Incentive Plan;
	•		on each of January 31, 2008 and January 31, 2009, a payment of $150,000 in lieu of any of equity awards for which he would otherwise be eligible to receive during the Transition Period under the Company’s Executive Equity Compensation Program; and
	•		on the Retirement Date, the cash value of any unvested outstanding restricted stock awards (including performance vested shares that have met certain adjusted performance targets).

          Mr. Gilbert’s existing Employment Agreement, as amended, and Change in Control Agreement, terminated with his retirement on January 31, 2009. Under the agreements as originally contemplated, Mr. Gilbert would remain on the Board of Directors and would receive non-employee director compensation for such service. He would also provide continued services as a consultant to the Company under a Consulting and Restrictive Covenants Agreement which became effective upon Mr. Gilbert’s retirement, subject to certain changes as described in more detail under “Certain Transactions and Business Relationships”.

          On December 31, 2008, the Company and the Bank entered into agreements with Mr. Hudson, Mr. Hahl, Mr. Gilbert, Ms. Strickland and Mr. Holland to modify certain existing employment and change-in-control agreements to comply with Section 409A of the Internal Revenue Code and the final regulations issued thereunder. The form of the amendment is attached as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 5, 2009.

          As a result of and following the Bank entering into the Formal Agreement with the OCC at the end of 2008, the Bank and the Company are restricted generally from making any payment (or agreeing to make any payment) in the nature of compensation by the Bank or the Company for the benefit of any current or former director, officer or

employee pursuant to an obligation that is contingent on, or by its terms is payable on or after, the termination of such person’s primary employment or affiliation with the Bank or the Company. The restrictions under the Formal are subject to various exceptions and qualifications, and the foregoing is only a summary and is not complete.

          As described above, as long as the Company has obligations under the CPP, Seacoast must agree to comply with the applicable standards for executive compensation and corporate governance set forth in the EESA and, to the extent applicable, ARRA, including a prohibition on payments to a Senior Executive Officer or any of the next five most highly-compensated employees upon termination of employment (other than payments for services performed or benefits accrued) during the TARP Assistance Period. Each of the Company’s Named Executive Officers signed a consent agreement to comply with the standards under the EESA.

          As a result, the Company’s ability to make certain post-employment payments is restricted and may be further restricted, as described above under “Effect of the Participation in the Capital Purchase Program.” The potential post-employment payments to the Named Executive Officers under the employment, change in control and transition agreements are estimated in the “Other Potential Post-Employment Payments” table which follows this discussion without consideration given to the effect of the limitations under the TARP CPP. Seacoast will assess the impact of this provision on our change-in-control agreements once ARRA compensation standards are established. Other legislation regarding executive compensation has been proposed and the Treasury is considering additional rulemaking, but the outcome and effect of the activities cannot be predicted.

      Deduction Limit

          Section 162(m) of the Internal Revenue Code generally establishes, with certain exceptions, a $1 million deduction limit for all publicly held companies on compensation paid to an executive officer in any year.

          The deductibility of executive compensation paid by the Company is limited under the provisions of the CPP, the EESA and ARRA described above. As part of its participation in the CPP, the Company agreed to be subject to amendments to Section 162(m) which limit the deductibility of all compensation, including performance based compensation, to $500,000 per executive with respect to any taxable year during which the Treasury retains its CPP investment in the Company. The application of the $500,000 limitation is allowed on a pro rata basis with respect to calendar years during which the Treasury held its investment for less than the full year, as was the case in 2008 when the investment was held by the Treasury for less than one month. When our Board of Directors approved participation in the TARP Program, it was aware of, considered and agreed to, the potential increased after-tax cost of our executive compensation program that would arise because of the $500,000 deduction limitation under the CPP, although the ARRA restrictions had not been proposed at that time.

          The Salary and Benefits Committee gives strong consideration to the deductibility of compensation in making its compensation decisions for executive officers, balancing the goal of maintaining a compensation program which will enable the Company to attract and retain qualified executives with the goal of creating long-term shareholder value. The Committee has reserved the right to pay executives compensation that is not deductible under Section 162(m).

      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 the chief executive officer’s 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 to information periodically obtained from independent consulting firms, the Salary and Benefits Committee reviews the total compensation of chief executive officers of publicly held regional banks and bank holding companies of comparable size and performance in the southeastern United States.

          In January 2008, the Salary and Benefits Committee reviewed salary survey information compiled from the SNL Executive Compensation Review (“SNL Review”) and the Wyatt Financial Institution Benchmark Compensation Survey (“Wyatt Survey”) (collectively, the “Survey Data”) of institutions of comparable size and performance in the southeastern United States. The information used from the SNL Review was as of December 2006, the most current information available at the time, and included:

	•		a comparison of base, incentive and total compensation paid by regional banks and bank holding companies in the southeastern United States with an asset size between $1.6 billion and $15.7 billion and included Capital City Bank, Bank Atlantic Bancorp, Bank United Financial Group, First Bankcorp, First Charter Corp, First Citizens Bancshares, United Community Banks, Security Bank Corp, GB&T Bancshares, Ameris Bancorp, Fidelity Southern Corporation, Pinnacle Financial Partners, First Financial Holdings, SCBT Financial Corp, South Financial Group, Alabama National Bancorp, Superior Bancorp, Bank of the Ozarks, and Simmons First National;
	•		an average of base salary paid by all financial institutions in the southeastern United States with an asset size of $1 billion to $5 billion; and
	•		an average of base salary paid by financial institutions with an asset size of $1 billion to $5 billion and a similar return on equity to Seacoast.

The data used from the Wyatt Survey was an average of base salary compensation paid by national banks with assets of $2 billion to $9 billion, banks in the southeastern United States, and banks in the lower southeastern United States.

           Base Salary: Effective January 1, 2008, which is the usual annual date for executive salary adjustments, the Committee decided to maintain the salary for Mr. Dennis S. Hudson, III for 2008 unchanged at $531,450. No further adjustment has been made to Mr. Hudson’s salary for 2009.

           Annual Cash Incentive: Based on Company earnings performance below the threshold level for 2007 and 2008, Mr. Hudson III did not receive a cash incentive award for 2007 or 2008, compared to an award of $125,000 in 2006 and $376,000 in 2005 under the Key Manager Incentive Plan.

           Long-Term Incentive: No long-term incentive compensation was paid to Mr. Hudson in 2008.

EXECUTIVE COMPENSATION

          The table below sets forth the elements that comprise total compensation for the Named Executive Officers of Seacoast or the Bank for the periods indicated. No payments or awards were made for 2008 to the Named Executive Officers under the Key Manager Incentive Plan, the Equity Compensation Program or the 2008 Incentive Plan discussed above. Stock and option award expense reported in the Summary Compensation table for 2008 is related to awards granted in prior years.

2008 GRANTS OF PLAN-BASED AWARDS

          There were no plan-based awards granted during 2008 to the Named Executive Officers.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2008

          The following table sets forth certain information concerning outstanding equity awards as of December 31, 2008 granted to the Named Executive Officers. This table includes the number of shares of Common Stock covered by both exercisable options, non-exercisable options or stock appreciation rights (“SARs”), and unexercised unearned options or SARs awarded under an equity incentive plan as of December 31, 2008. Also reported are the number of shares of Common Stock, and their market value, that have not vested, as well as unearned shares or rights awarded under an equity incentive plan, and their market value, that have not vested as of December 31, 2008. All exercised and vested shares are shares of Common Stock, and all options and SARs relate to Common Stock. There are no options or SARs involving Preferred Stock.

2008 OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS

     The following table quantifies, for each of the Named Executive Officers, the potential post-employment payments under the provisions and agreements described above in the narrative discussion, assuming that the triggering event occurred on December 31, 2008 and the price of the Company’s securities is the closing market price of $6.60 per share on December 31, 2008.

     In accordance with the prohibitions under TARP as in effect at December 31, 2008, golden parachute payments to our Senior Executive Officers are limited. The Senior Executive Officers agreed to this reduction under agreements entered into with the Company in December 2008. The amounts shown in the following table reflect the maximum amount that could be payable without consideration given to the effect of the prohibitions on the payment of golden parachute payments under the CPP as in effect on December 31, 2008. Seacoast will assess the impact of the limitations under the TARP CPP on our change-in-control agreements once ARRA compensation standards are established. All payments below upon termination of employment, including change in control payments, may be limited in the future by EESA, ARRA, Treasury regulations and the effects of the formal agreement between the Bank and the OCC, as then in effect.