[ ] Preliminary Proxy Statement | [ ] Confidential for Use of the Commission Only (as permitted by Rule 14a-6(e) (2) | ||||||
[X] Definitive Proxy Statement | |||||||
[ ] Definitive Additional Materials | |||||||
[ ] Soliciting Material Under 240.14a-12 |
CENTRAL COAST BANCORP |
(1) Title of each class of securities to which transaction applies: |
(2) Aggregate number of securities to which transaction applies: |
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) Proposed maximum aggregate value of transaction: |
(5) Total fee paid: |
[ ] | Fee paid previously by written preliminary materials: |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11 (a) (2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) Amount previously paid : |
(2) Form, Schedule or Registration Statement No. : |
(3) Filing Party : |
(4) Date Filed : |
CENTRAL COAST BANCORP |
1. To elect Class III directors. |
2. To approve the 2004 Stock Option Plan. |
3. To ratify the appointment of Deloitte and Touche LLP as independent public accountants for the 2004 fiscal year. |
4. To transact such other business as may properly come before the Meeting. |
The names of the Board of Directors’ nominees to be Class III directors of Central Coast Bancorp are set forth in the accompanying Proxy Statement and incorporated here by reference. Article III, Section 16 of the Bylaws of Central Coast Bancorp provides for the nomination of directors in the following manner: “Nomination for election of members of the Board of Directors may be made by the Board of Directors or by any shareholder of any outstanding class of capital stock of the corporation entitled to vote for the election of directors. Notice of intention to make any nominations shall be made in writing and shall be delivered or mailed to the President of the corporation not less than 21 days nor more than 60 days prior to any meeting of shareholders called for the election of directors; provided however, that if less than 21 days notice of the meeting is given to shareholders, such notice of intention to nominate shall be mailed or delivered to the President of the corporation not later than the close of business on the tenth day following the day on which the notice of meeting was mailed; provided further that if notice of such meeting is sent by third-class mail as permitted by Section 6 of these by-laws, no notice of intention to make nominations shall be required. Such notification shall contain the following information to the extent known to the notifying shareholder: |
(a) the name and address of each proposed nominee; |
(b) the principal occupation of each proposed nominee; |
(c) the number of shares of capital stock of the corporation owned by each proposed nominee; |
(d) the name and residence address of the notifying shareholder; and |
(e) the number of shares of capital stock of the corporation owned by the notifying shareholder. |
Nominations not made in accordance herewith may, in the discretion of the Chairman of the meeting, be disregarded and upon the Chairman’s instructions, the inspectors of election can disregard all votes cast for each such nominee. A copy of this paragraph shall be set forth in a notice to shareholders of any meeting at which Directors are to be elected.” Only shareholders of record at the close of business on April 12, 2004 are entitled to notice of and to vote at this Meeting and at any postponements or adjournments thereof. |
By Order of the Board of Directors | |||
/s/ ROBERT M. STANBERRY | |||
Salinas, California | Robert M. Stanberry, Secretary | ||
April 26, 2004 |
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Mailed to Shareholders CENTRAL COAST BANCORPPROXY STATEMENTINFORMATION CONCERNING THE SOLICITATIONThis Proxy Statement is being furnished to the shareholders of Central Coast Bancorp, a California corporation (the “Corporation”), in connection with the solicitation of proxies by the Board of Directors for use at the Annual Meeting of Shareholders to be held at 301 Main Street, Salinas, California on June 7, 2004 at 5:30 p.m. (the “Meeting”). Only shareholders of record on April 12, 2004 (the “Record Date”) will be entitled to notice of the Meeting and to vote at the Meeting. At the close of business on the Record Date, the Corporation had outstanding and entitled to be voted 10,861,841 shares of its no par value Common Stock (the “Common Stock”). Shareholders are entitled to one vote for each share held as of the Record Date. Any person giving a proxy in the form accompanying this Proxy Statement has the power to revoke that proxy prior to its exercise. The proxy may be revoked prior to the Meeting by delivering to the Secretary of the Corporation either a written instrument revoking the proxy or a duly executed proxy bearing a later date. The proxy may also be revoked by the shareholder by attending and voting at the Meeting. Votes cast by proxy or in person at the Meeting will be counted by the Inspectors of Election for the Meeting. The Inspectors will treat abstentions and “broker non-votes” (shares held by brokers or nominees as to which instructions have not been received from the beneficial owners or persons entitled to vote and the broker or nominee does not have discretionary voting power under applicable rules of the stock exchange or other self-regulatory organization of which the broker or nominee is a member) as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions and “broker non-votes” will not be counted as shares voted for purposes of determining the outcome of any matter as may properly come before the Meeting. Unless otherwise instructed, each valid proxy returned which is not revoked will be voted “FOR” Proposals 1, 2 and 3 as described in this Proxy Statement, and, at the proxyholders’ discretion, on such other matters, if any, which may come before the Meeting (including any proposal to postpone or adjourn the Meeting). The Corporation will bear the entire cost of preparing, assembling, printing and mailing proxy materials furnished by the Board of Directors to shareholders. Copies of proxy materials will be furnished to brokerage houses, fiduciaries and custodians to be forwarded to the beneficial owners of the Common Stock. In addition to the solicitation of proxies by use of the mail, some of the officers, directors and regular employees of the Corporation and its subsidiary, Community Bank of Central California (the “Bank”), may (without additional compensation) solicit proxies by telephone or personal interview, the costs of which will be borne by the Corporation. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSecurity Ownership of Certain Beneficial OwnersAs of the Record Date, April 12, 2004, no individual known to the Corporation owned more than five percent (5%) of the outstanding shares of its Common Stock except as described below. |
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class Beneficially Owned | ||||
---|---|---|---|---|---|---|---|
Common Stock, No Par Value | Robert L. Meyer (1) | 816,197 | 7 | .51% |
(1) | The address for the person listed is P. O. Box 606, King City, California, 93930-0606. 784,494 shares are held by Mr. Meyer and his spouse as trustees of the Robert L. Meyer and Patricia J. Meyer Trust dated July 28, 1977. 18,333 shares are held by the Meyer One partnership of which Mr. and Mrs. Meyer's 1977 Trust owns 52%. 10,818 shares are held by Geneva M. Jones, individual, as to which Patricia J. Meyer has Power of Attorney for both her and her estate. 2,552 shares held by Robert L. Meyer's son Craig E. Meyer. |
Security Ownership of ManagementThe following table sets forth information as of April 12, 2004, concerning the equity ownership of the Corporation’s directors and the executive officers named in the Summary Compensation Table, and directors and executive officers as a group. Unless otherwise indicated in the notes to the table, each director and executive officer listed below possesses sole voting power and sole investment power for the shares of the Corporation’s Common Stock listed below. All of the shares shown in the following table are owned both of record and beneficially except as indicated in the notes to the table. The Corporation has only one class of shares outstanding, Common Stock. |
Title of Class | Name and Address (1) of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class (2) | ||||||
---|---|---|---|---|---|---|---|---|---|
Common Stock, No Par Value | Robert C. Blatter | 37,118 | (3 | ) | 0 | .3% | |||
Common Stock, No Par Value | C. Edward Boutonnet | 453,379 | (4 | ) | 3 | .8% | |||
Common Stock, No Par Value | Donald D. Chapin, Jr. | 1,419 | 0 | .0% | |||||
Common Stock, No Par Value | Bradford G. Crandall | 347,416 | (5 | ) | 2 | .9% | |||
Common Stock, No Par Value | Alfred P. Glover | 113,942 | (6 | ) | 0 | .9% | |||
Common Stock, No Par Value | Michael T. Lapsys | 192,468 | (7 | ) | 1 | .6% | |||
Common Stock, No Par Value | Duncan L. McCarter | 206,142 | (8 | ) | 1 | .7% | |||
Common Stock, No Par Value | John F. McCarthy | 86,921 | (9 | ) | 0 | .7% | |||
Common Stock, No Par Value | Robert M. Mraule, D.D.S.,M.D. | 212,790 | (10 | ) | 1 | .8% | |||
Common Stock, No Par Value | Louis A. Souza | 100,092 | (11 | ) | 0 | .8% | |||
Common Stock, No Par Value | Robert M. Stanberry | 43,024 | (12 | ) | 0 | .4% | |||
Common Stock, No Par Value | Mose E. Thomas, Jr. | 121,267 | (13 | ) | 1 | .0% | |||
Common Stock, No Par Value | Nick Ventimiglia | 182,209 | (14 | ) | 1 | .5% | |||
All directors and executive | |||||||||
officers as a group (13 persons) | 2,098,187 | (15 | ) | 17 | .5% |
(1) | The address for all persons listed is c/o Central Coast Bancorp, 301 S. Main Street, Salinas, California, 93901. |
(2) | Includes shares of Common Stock subject to stock options exercisable immediately. |
(3) | Includes 6,789 shares of Common Stock held jointly with his spouse. |
(4) | Includes 120,498 shares of Common Stock held in a partnership, 6,357 shares as custodian for his grandchildren, 41,182 shares held by Mr. Boutonnet as trustee of the Charles E. Boutonnet Trust, 73,938 shares held by Mr. Boutonnet's companies in the Boutonnet Farms, Inc. Profit Sharing Plan and Sea Mist Farms Deferred Compensation Plan, 96,631 shares held in the Central Coast Bancorp Nonqualified Deferred Compensation Plan Trust as to which Mr. Boutonnet has shared investment power and 114,773 shares subject to stock options exercisable immediately. |
(5) | Includes 128,667 shares of Common Stock held jointly with his spouse as trustees of the Bradford G. Crandall and Lynne O. Crandall Trust, 96,043 shares held in the Central Coast Bancorp Nonqualified Deferred Compensation Plan Trust as to which Mr. Crandall has shared investment power and 114,773 shares subject to stock options exercisable immediately. |
(6) | Includes 15,417 shares of Common Stock held jointly with his spouse, 1,068 shares held by his spouse and 77,025 shares subject to stock options exercisable immediately. |
(7) | Includes 24 shares of Common Stock held jointly with his spouse, and 752 shares held as custodian, 140,743 shares held in the Kathy O. Lapsys and Michael T. Lapsys Trust and 50,949 shares subject to stock options exercisable immediately. |
(8) | Includes 3,160 shares of Common Stock held jointly with his spouse as trustees of the Duncan L. McCarter and Leslie P. McCarter Trust, 95,409 shares held in the Central Coast Bancorp Nonqualified Deferred Compensation Plan Trust as to which Mr. McCarter has shared investment power and 107,573 shares subject to stock options exercisable immediately. |
(9) | Includes 36,701 shares of Common Stock held jointly with his spouse as trustees of the John F. McCarthy and Mary Ann McCarthy Trust and 50,220 shares subject to stock options exercisable immediately. |
(10) | Includes 31,890 shares of Common Stock held by Dr. Mraule as trustee of Robert M. Mraule D.D.S., M.D., Inc. Money Purchase Pension Plan, 66,127 shares held in the Central Coast Bancorp Nonqualified Deferred Compensation Plan Trust as to which Mr. Mraule has shared investment power and 106,773 shares subject to stock options exercisable immediately. |
(11) | Includes 14,182 shares of Common Stock held jointly with his spouse, 8,127 shares held in the Louis A. Souza Trust and 35,507 shares subject to stock options exercisable immediately. |
(12) | Includes 5,293 shares of Common Stock held jointly with his spouse as trustees of the Robert and Joen Stanberry Trust and 35,674 shares of Common Stock subject to stock options exercisable immediately. |
(13) | Includes 64,935 shares of Common Stock subject to stock options exercisable immediately. |
(14) | Includes 118,925 shares of Common Stock subject to stock options exercisable immediately. |
(15) | Includes 898,982 shares of Common Stock subject to stock options exercisable immediately and 354,210 shares held by the Central Coast Bancorp Board of Directors Deferred Stock Option Plan Trust. |
C. Edward Boutonnet | Donald D. Chapin, Jr. | Bradford C. Crandall | Robert M. Mraule |
The following persons are the Class I and Class II directors who will continue in office as described above: Class I Directors, Continuing in Office |
Mose E. Thomas | Louis A. Souza | Alfred P. Glover |
Class II Directors, Continuing in Office |
Michael T. Lapsys | Duncan L. McCarter | Nick Ventimiglia |
All proxies will be voted for the election of the four (4) nominees for Class III directors listed above (all of whom are incumbent directors) recommended by the Board of Directors unless authority to vote for the election of any directors is withheld. The nominees receiving the highest number of affirmative votes of the shares entitled to be voted for them shall be elected as Class III directors. If any nominees should unexpectedly decline or be unable to act as a director, their proxies may be voted for a substitute nominee to be designated by the Board of Directors. The Board of Directors has no reason to believe that any nominee will be or become unavailable and has no present intention to nominate persons in addition to or in lieu of those named above. The following table sets forth names and certain information as of April 12, 2004, concerning the persons named for election as Class III directors of the Corporation, as well as for Class I and Class II directors who are not currently subject to election. Each non-employee director named below (excluding Nick Ventimiglia who is an employee director of the Corporation) is “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules. |
Name | Age | Director of Corporation Since | Director of Bank Since (1) | Principal Occupation During Last Five Years | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
C. Edward Boutonnet | 64 | 1994 | 1982 | President, Ocean Mist Farms. Managing Partner, Sea Mist Farms and Boutonnet Farms. | |||||||
Donald D. Chapin, Jr | 51 | 2004 | 2004 | President and Chief Executive Officer, The Don Chapin Co., Inc. | |||||||
Bradford G. Crandall | 69 | 1994 | 1982 | Chairman, E.B. Stone and Son, Inc., wholesale nursery supply firm. | |||||||
Alfred P. Glover | 72 | 1996 | 1988 | Owner, Glover Enterprises, a real estate development firm. | |||||||
Michael T. Lapsys | 55 | 1998 | 1998 | Chairman, Device Dynamics Incorporated, a semiconductor backend services company. | |||||||
Duncan L. McCarter, R.Ph | 57 | 1994 | 1982 | President and Chief Executive Officer, Healthcare Pathway Management, Inc. and AdvantaCare Health Partners LP d.b.a. AdvantaCare Medical and AdvantaCare Infusion. | |||||||
Robert M. Mraule, D.D.S., M.D | 54 | 1994 | 1982 | Physician, Dentist, Oral and Maxillofacial Surgeon. | |||||||
Louis A. Souza | 75 | 1996 | 1988 | Owner, Louis A. Souza Construction, a general contractor, retired. Investor. | |||||||
Mose E. Thomas, Jr | 63 | 1996 | 1989 | General Manager, Chapel of Seaside, Inc., and Mission Mortuary, Inc., funeral chapels. | |||||||
Nick Ventimiglia | 62 | 1994 | 1982 | Director and Chief Executive Officer of the Corporation and of Community Bank of Central California. |
(1) | Represents year of first service as a director of either of the predecessors, Bank of Salinas or Cypress Bank, prior to their merger resulting in Community Bank of Central California. |
None of the directors or nominees for Class III director listed above or executive officers listed in the Summary Compensation Table, were selected pursuant to any arrangement or understanding other than with the directors and executive officers of the Corporation acting within their capacities as such. There are no family relationships between any two or more of the directors, nominees for Class III director or executive officers. No director, nominee for Class III director or executive officer serves as a director of (i) any company which has a class of securities registered under Section 12, or which is subject to the periodic reporting requirements of Section 15(d), of the Securities Exchange Act of 1934, or (ii) any company registered as an investment company under the Investment Company Act of 1940. Committees of the Board of DirectorsThe Audit Committee, chaired by Alfred P. Glover, whose members include Michael T. Lapsys, Duncan L. McCarter, Robert M. Mraule (Vice Chairman) and Mose E. Thomas, Jr., select and oversee the Corporation’s and Bank’s independent public accountants, analyze the results of internal and regulatory examinations and monitor the financial and accounting organization, reporting and controls. Each member of the Audit Committee is “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules. Director Michael T. Lapsys has been designated by the Board of Directors as an “audit committee financial expert” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002. In addition, each other member of the Audit Committee is “financially sophisticated” and “financially literate” as defined under applicable Nasdaq Listing Rules and qualified to review the Corporation’s financial statements. The Audit Committee met twelve (12) times in 2003. See the Audit Committee Report hereafter in this Proxy Statement for additional information regarding the functions of the Audit Committee. As of January, 2004, Michael T. Lapsys became Chairman and Alfred P. Glover became Vice Chairman of the Audit Committee. The Finance Committee, chaired by C. Edward Boutonnet, whose members include Michael T. Lapsys, Duncan L. McCarter, Robert M. Mraule (Vice Chairman) and Mose E. Thomas, Jr., reviews financial statement data and the Corporation's results of operations including income, expenses, loan loss reserves and asset and liability balances. The Finance Committee met twelve (12) times in 2003. The Board of Directors has not established a nominating committee. The full Board of Directors performs the functions of a nominating committee with responsibility for considering appropriate candidates as directors. The Board of Directors believes that the participation of the full Board of Directors in considering candidates is efficient in view of the size of the Board of Directors. Candidates are selected by a majority of directors who are “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules, in accordance with a Nominating Charter adopted by a majority of such independent directors. The Nominating Charter includes a policy for consideration of candidates proposed by shareholders. Any recommendations by shareholders will be evaluated by the Board of Directors in the same manner as any other recommendation and in each case in accordance with the Nominating Charter. Shareholders that desire to recommend candidates for consideration by the Corporation’s Board of Directors should mail or deliver written recommendations to the Corporation addressed as follows: Board of Directors, Central Coast Bancorp, 301 S. Main Street, Salinas, CA 93901. Each recommendation should include biographical information indicating the background and experience of the candidate that qualifies the candidate for consideration as a director for evaluation by the Board of Directors. In addition to minimum standards of independence for non-employee directors and financial literacy, the Board of Directors considers various other criteria including the candidate’s experience and expertise, financial resources, ability to devote the time and effort necessary to fulfill the responsibilities of a director and involvement in community activities in the market areas served by the Corporation and the Bank that may enhance the reputation of the Corporation and the Bank. The Corporation and the Bank operate in a highly regulated industry and are subject to the supervision, regulation and periodic examination by state and federal banking regulatory authorities including the Board of Governors of the Federal Reserve System, California Commissioner of Financial Institutions and Federal Deposit Insurance Corporation. Directors of the Corporation and the Bank are subject to certain rules and regulations and potential liabilities not otherwise applicable to directors of non-banking organizations. Consequently, evaluation of candidates by the Corporation’s Board of Directors may include more extensive inquiries into personal background information including confirmation of the accuracy and completeness of background information by (a) requiring candidates to complete questionnaires to elicit information of the type required to be disclosed by the Corporation in reports filed with the Securities and Exchange Commission, Nasdaq, or such state and federal banking regulatory authorities, (b) conducting background investigations by qualified independent organizations experienced in conducting criminal and civil investigatory reviews, and (c) such other personal and financial reviews and analyses as the Board of Directors may deem appropriate in connection with the consideration of candidates. Shareholders who wish to nominate a candidate for election to the Corporation’s Board of Directors, as opposed to recommending a potential nominee for consideration by the Board of Directors, are required to comply with the advance notice and any other requirements of the Corporation’s bylaws, applicable laws and regulations. The Board of Directors may elect to use third parties in the future to identify or evaluate candidates for consideration by the Board of Directors. The Nominating Charter adopted by the Board of Directors is attached to this Proxy Statement as Appendix A. The Premises, Compensation and Performance Committee, chaired by Robert M. Mraule, whose members include C. Edward Boutonnet (Vice Chairman), Duncan L. McCarter, Louis A. Souza and Mose E. Thomas, Jr., oversees physical premises used in daily operations and reviews and establishes employee benefits and the compensation paid to executive officers and other employees. Each member of the Premises, Compensation and Performance Committee is “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules. The Premises, Compensation and Performance Committee met twelve (12) times in 2003. The Investment/CRA/ALCO Committee, chaired by Michael T. Lapsys, whose members include Bradford G. Crandall, Alfred P. Glover, and Louis A. Souza (Vice Chairman), has responsibility for asset/liability management, review of the Corporation’s investment portfolio, maintenance of shareholder relations and community reinvestment. The Investment Committee met eleven (11) times in 2003. As of January 2004, Louis A. Souza became Chairman and Michael T. Lapsys became Vice Chairman of the Investment/CRA/ALCO Committee. The Loan Committee, chaired by Bradford G. Crandall, whose members include C. Edward Boutonnet (Vice Chairman), Alfred P. Glover, Michael T. Lapsys and Louis A. Souza has responsibility for establishing loan policy and approving loans which exceed certain dollar limits. The Loan Committee is convened at the Bank level and met twenty-two (22) times in 2003. The Marketing Committee, chaired by Duncan L. McCarter, whose members include Louis A. Souza and Mose E. Thomas (Vice Chairman), has responsibility for administering the Corporation’s marketing policies and marketing programs. The Marketing Committee is convened at the Bank level and met twelve (12) times in 2003. During 2003, the Corporation’s Board of Directors held twelve (12) regularly scheduled meetings and two “executive sessions” of the Corporation’s Board of Directors which only the non-employee directors attended, each of whom is “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules. All Directors attended at least seventy-five percent (75%) of the aggregate of the total number of meetings of the Board of Directors and the number of meetings of the committees on which they served. During 2003, the Bank’s Board of Directors held twelve (12) regularly scheduled meetings. The aggregate total of all Corporation and Bank board and committee meetings held in 2003 was 152. A majority of the members of the Board of Directors, each of whom is “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules, has established procedures for receipt and delivery of shareholder communications addressed to the Board of Directors. Any such shareholder communications, including communications by employees of the Company solely in their capacity as shareholders, should be mailed or delivered to the Company addressed as follows: Board of Directors, Central Coast Bancorp, 301 S. Main Street, Salinas, CA 93901. The Company encourages members of its Board of Directors to attend the Company’s annual meeting of shareholders each year. All of the directors attended the Company’s annual meeting of shareholders held in 2003. Compensation of DirectorsThe fees paid to directors during 2003 included a base fee of $2,600 per month for attendance at Board meetings of the Corporation and the Bank. In addition to the base fee, the Loan and Audit Committee Chairmen received $200 per month, the Chairmen of the Finance, Investment/CRA/ALCO, Marketing, and the Premises, Compensation and Performance Committees each received $100 per month. The total amount of fees paid to all directors as a group for attendance at Board and committee meetings was $232,200 in 2003. Under the 1994 Stock Option Plan, as amended (the “1994 Plan”), the Board of Directors is authorized to grant nonstatutory stock options to outside directors. Nonstatutory stock options granted to outside directors under the 1994 Plan generally vest at the rate of one-third per year. The footnotes to the Security Ownership of Management table on pages 3 and 4 list vested and exercisable options granted to the outside directors under the 1994 Plan. As of April 12, 2004, there were also 163,500 nonstatutory stock options outstanding previously granted to the outside directors as a group at an exercise price from $15.09 to 17.75 (adjusted for subsequent stock dividends and splits). EXECUTIVE OFFICERSThe following table sets forth names and certain information as of April 12, 2004, concerning the executive officers of the Corporation. |
Name | Age | Corporation Executive Since | Bank Executive Since | Principal Occupation During Last Five Years | |||||
---|---|---|---|---|---|---|---|---|---|
Nick Ventimiglia | 62 | 1994 | 1982 | Chairman and Chief Executive Officer of the Corporation since December 1994. Chief Executive Officer of Community Bank of Central California or its predecessors, since 1982. President of the Corporation and the Bank from 1994 and 1982, respectively, to 2002. Organizer, Director, President and Chief Executive Officer, Bank of Salinas from 1982 to 1994 | |||||
John F. McCarthy | 61 | 1994 | 1988 | President of the Corporation and of Community Bank of Central California since 2002. Executive Vice President, Corporate Secretary and Chief Operating Officer of the Corporation, and of Community Bank of Central California or its predecessors, since 1994 and 1988, respectively. Vice President and Regional Manager, Hibernia Bank, Salinas from 1986 to 1988. Vice President and Regional Manager, Crocker National Bank from 1980 to 1986 | |||||
Robert M. Stanberry | 64 | 1998 | 1998 | Senior Vice President and Chief Financial Officer of the Corporation, and of Community Bank of Central California or its predecessors, since 1998. Secretary of the Corporation, and of Community Bank of Central California or its predecessors, since 2002. Vice President and Chief Financial Officer, TriCo Bancshares from 1993 to 1998. | |||||
Robert C. Blatter | 43 | 1996 | 1996 | Senior Vice President and Loan Administrator of the Corporation, and of Community Bank of Central California or its predecessors, since 1996. Vice President, Commercial Loan Officer of Community Bank of Central California or its predecessors, since 1989. Commercial Banking Officer, Bank of America from 1985 to 1989. |
EXECUTIVE COMPENSATIONSet forth below is the summary compensation paid or accrued during the three years ended December 31, 2003 to Nick Ventimiglia, John F. McCarthy, Robert M. Stanberry and Robert C. Blatter, the only executive officers of the Corporation and/or the Bank. SUMMARY COMPENSATION TABLE |
Long-Term Compensation | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
AnnualCompensation | Awards | Payouts | |||||||||||||||||
(a) Name and Principal Position | (b) Year | (c) Salary ($) 1/ | (d) Bonus ($) 2/ | (e) Other Annual Compen- sation ($) 3/ | (f) Restricted Stock Award(s)($) | (g) Securities Underlying Options/ SARs (#) 4/ | (h) LTIP Payouts ($) | (i) All Other Compen- sation ($) 5/ | |||||||||||
Nick Ventimiglia, | 2003 | $275,267 | $190,075 | -- | -- | -- | -- | $3,000 | |||||||||||
Chairman and | 2002 | $255,000 | $217,706 | -- | -- | -- | -- | $2,750 | |||||||||||
Chief Executive Officer | 2001 | $255,000 | $178,448 | -- | -- | -- | -- | $2,625 | |||||||||||
John F. McCarthy, | 2003 | $181,206 | $123,867 | -- | -- | -- | -- | $3,500 | |||||||||||
President and Chief | 2002 | $175,216 | $141,383 | -- | -- | -- | -- | $3,000 | |||||||||||
Operating Officer | 2001 | $169,500 | $116,261 | -- | -- | -- | -- | $2,625 | |||||||||||
Robert M. Stanberry, | 2003 | $135,602 | $ 69,146 | -- | -- | -- | -- | $3,500 | |||||||||||
Senior Vice President, | 2002 | $131,121 | $ 79,165 | -- | -- | -- | -- | $3,000 | |||||||||||
Chief Financial Officer | 2001 | $126,893 | $64,890 | $43,744 | -- | -- | -- | $2,625 | |||||||||||
and Corporate Secretary | |||||||||||||||||||
Robert C. Blatter, | 2003 | $114,825 | $ 69,146 | -- | -- | -- | -- | $2,061 | |||||||||||
Senior Vice President | 2002 | $111,030 | $ 79,165 | -- | -- | - | -- | $1,879 | |||||||||||
and Loan Administrator | 2001 | $107,450 | $ 64,890 | -- | -- | -- | -- | $2,625 | |||||||||||
1/ | Amounts shown include cash and non-cash compensation earned and received by executive officers as well as amounts earned but deferred at the election of those officers under the Corporation’s 401(k) Plan and Deferred Compensation Plan. |
2/ | Amounts indicated as bonus payments were earned for performance during 2003, 2002 and 2001. |
3/ | Other than Robert M. Stanberry in 2001, no executive officer received perquisites or other personal benefits in excess of the lesser of $50,000 or 10% of each such officer’s total annual salary and bonus during 2003, 2002 and 2001. The amount shown for Mr. Stanberry in 2001 primarily represents the value of a club membership transferred from the Company to Mr. Stanberry, which membership was used for business and personal purposes, and automobile expenses for business and personal use. |
4/ | Amounts shown represent the number of shares granted, adjusted for all stock dividends and stock splits. Under the Corporation’s 1994 Stock Option Plan, as amended, (the “1994 Plan”) options could be granted to directors and key, full-time salaried, officers and employees of the Corporation and the Bank. Options granted under the 1994 Plan were either incentive options or non-statutory options. Options granted under the 1994 Plan became exercisable in accordance with a vesting schedule established at the time of grant. Vesting could not extend beyond ten years from the date of grant. Upon a change in control, options do not become fully vested and exercisable, but may be assumed or equivalent options may be substituted by a successor corporation. All options granted to the named executive officers are incentive stock options and have an exercise price equal to the fair market value of the Corporation’s Common Stock on the date of grant. |
5/ | Amounts shown for each named executive officer are 401(k) matching contributions for the year indicated. |
The following table sets forth information concerning options granted during 2003 to the executive officers named in the Summary Compensation Table. |
Individual Grants | Potential Realizable Value at Assumed Annual Rates of Stock Price Appreiation forOption Term | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(a) | (b) Number of Securities Underlying Options/SARs Granted (#) | (c) Percentage of Total Options/ SARs Granted to Employees in Fiscal Year | (d) Exercise or Base Price ($/Sh) | (e) Expiration Date | (f) 5% ($) | (g) 10% ($) | |||||||||
Nick Ventimiglia | 16,500 | 23 | % | $ 15.09 | 7/16/2013 | $156,585 | $396,818 | ||||||||
John F. McCarthy | 11,000 | 16 | % | $ 15.09 | 7/16/2013 | $104,390 | $264,545 | ||||||||
Robert M. Stanberry | 2,750 | 4 | % | $ 15.09 | 7/16/2013 | $ 26,098 | $ 66,136 | ||||||||
Robert C. Blatter | 2,750 | 4 | % | $ 15.09 | 7/16/2013 | $ 26,098 | $ 66,136 | ||||||||
The following table sets forth the number of shares of Common Stock acquired by each of the named executive officers upon the exercise of stock options during fiscal year 2003, the net value realized upon exercise, the number of shares of Common Stock represented by outstanding stock options held by each of the named executive officers as of December 31, 2003 and the value of such options based on the closing price of the Corporation’s Common Stock and certain information concerning unexercised options under the 1994 Stock Option Plan. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES |
(a) Name | (b) Shares Acquired on Exercise (#) | (c) Value Realized ($) | (d) Number of Securities Underlying Unexercised Options/SARs at Fiscal Year-End (#) Exercisable/ Unexercisable | (e) Value of Unxercised In-The-Money Options/SARs at Fiscal Year- End ($) Excercisable/ Unexercisable 1/ | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nick Ventimiglia | -- | -- | 118,925 | / | 16,500 | $1,331,627 | / | $ 21,449 | |||||||||||||
John F. McCarthy | -- | -- | 50,220 | / | 11,000 | $ 500,669 | / | $ 14,299 | |||||||||||||
Robert M. Stanberry | -- | -- | 35,674 | / | 2,750 | $ 276,533 | / | $ 3,575 | |||||||||||||
Robert C. Blatter | -- | -- | 6,655 | / | 2,750 | $ 45,080 | / | $ 3,575 | |||||||||||||
1/ The aggregate value has been determined based upon the closing price for the Corporation’s Common Stock at year-end, minus the exercise price. Employment Contracts and Termination of Employment and Change in Control ArrangementsThe Corporation has entered into employment agreements with Messrs. Ventimiglia, Chairman and Chief Executive Officer; McCarthy, President and Chief Operating Officer; Stanberry, Senior Vice President and Chief Financial Officer; and Blatter, Senior Vice President and Loan Administrator. The agreements provide for an original term of three years with automatic one-year extensions until the agreements are terminated as described below. The agreements provide for a base salary, which is disclosed in the Summary Compensation Table. The base salaries under each agreement are reviewed annually and are subject to adjustment at the discretion of the Board of Directors. Additionally, the agreements provide for, among other things: (a) a discretionary annual bonus based upon the Corporation’s achievement of certain profitability, growth and asset quality standards as established by the Board of Directors; (b) payment of base salary, reduced by the amounts received from state disability insurance or workers’ compensation or other similar insurance benefits through policies provided by the Bank; (c) stock option grants under the Corporation’s stock option plan, at the sole discretion of the Board of Directors; (d) four weeks annual vacation leave; (e) use of an automobile; and (f) reimbursement for ordinary and necessary expenses incurred in connection with employment. The agreements may be terminated with or without cause, but if the agreements are terminated without cause due to the occurrence of circumstances that make it impossible or impractical for the Employer to conduct or continue its business, the loss by the Employer of its legal capacity to contract or the Employer’s breach of the terms of the agreement, the employee is entitled to receive severance compensation equal to six months of the existing base salary (twelve months in the case of Mr. Ventimiglia). The agreements further provide that in the event of a “change in control” as defined therein and within a period of one and a half years (two years in the case of Mr. Ventimiglia) following consummation of such change in control: (a) the employee’s employment is terminated; or (b) any adverse change occurs in the nature and scope of the employee’s position, responsibilities, duties, salary, benefits or location of employment; or (c) any event occurs which reasonably constitutes a demotion, significant diminution or constructive termination of employment, then the employee will be entitled to receive severance compensation in an amount equal to a multiple of the employee’s average annual compensation for the five years immediately preceding the change in control as follows: (a) two times for Mr. Ventimiglia; (b) one and one-half times for Messrs. McCarthy and Stanberry; and (c) one times for Mr. Blatter. Recognizing the importance of building and retaining a competent management team, additional agreements were entered into to provide post-retirement benefits to Messrs. Ventimiglia, McCarthy and Blatter. The terms of the agreements include the amounts each employee will receive upon the occurrence of certain specified events, including formal retirement on or after a specified age. The agreements generally provide for annual retirement benefit payments of Ninety Thousand Dollars ($90,000) to Mr. Ventimiglia, Seventy Thousand Dollars ($70,000) to Mr. McCarthy and Forty-Five Thousand Dollars ($45,000) to Mr. Blatter. The annual retirement benefit amount is payable in equal monthly installments over a fifteen (15) year period. In the event of an employee’s death, all remaining amounts due are anticipated to be paid to the employee’s designated beneficiary over the remaining payout period. Other events which may alter when payment of the annual retirement benefit is to begin, or the amount which is to be paid, include: (a) disability prior to retirement in which case the employee shall be entitled to a lesser benefit payment amount based upon the length of employment; and (b) either termination of employment without cause or constructive termination following a “change of control,” in which case the employee is entitled to receive the full annual benefit payment in equal monthly installments for fifteen (15) years beginning in the month following the termination or “change of control.” Generally, in those situations where the employee is terminated for cause, or where the employee voluntarily terminates his employment prior to retirement or other event triggering a right to payments under the agreement, the employee is not entitled to the payment of any benefits. Changes in ControlThe Corporation knows of no arrangements, including any pledge by any person of securities of the Corporation, the operation of which may, at a subsequent date, result in a change of control of the Corporation. EQUITY COMPENSATION PLAN INFORMATIONThe chart below lists equity compensation plan information including Common Stock issuable upon the exercise of stock ptions, warrants and rights at year-end 2003. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||
---|---|---|---|---|---|---|---|
Equity compensation plans approved by security holders | 1,359,761 | $ 7.87 | 1,911,993 | ||||
Equity compensation plans not approved by security holders | -- | -- | -- | ||||
Total | 1,359,761 | $ 7.87 | 1,911,993 | ||||
The Corporation’s only equity compensation plan at year-end 2003 was the 1994 Stock Option Plan (“1994 Plan”). The 1994 Plan terminated on March 21, 2004. At the time of termination of the 1994 Plan, 1,374,761 shares of common stock (adjusted for stock dividends and splits) were reserved for issuance upon exercise of options outstanding under the 1994 Plan and the balance of 1,896,993 shares available for stock option grants was cancelled. The Corporation has no other equity compensation plan that would result in the issuance of shares of the Corporation’s Common Stock upon the exercise of stock options, warrants or rights. See Proposal No. 2 hereafter in this Proxy Statement regarding the 2004 Stock Option Plan. BOARD COMPENSATION COMMITTEE REPORTThe compensation of the executive officers of the Corporation and the Bank is reviewed and approved annually by the Board of Directors on recommendation by the Premises, Compensation and Performance Committee (the “Committee”). During 2003, Messrs. Boutonnet, McCarter, Mraule, Souza and Thomas were members of the Committee. Each such member of the Committee is “independent” as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules. Mr. Ventimiglia was not present during Committee voting or deliberations regarding his compensation as required by applicable Nasdaq Listing Rules. Messrs. Ventimiglia, McCarthy, Stanberry and Blatter, served as executive officers of the Corporation and/or the Bank during 2003 in the capacities reflected in the Summary Compensation Table. The Committee’s philosophy is that compensation should be designed to reflect the value created for shareholders while supporting the Corporation’s strategic goals. The Committee reviews annually the compensation of the executive officers to insure that the Corporation’s compensation programs are related to financial performance and consistent generally with employers of comparable size in the industry. Annual compensation for the Corporation’s executive officers includes the following components: 1) Base salary is related to the individual officer’s level of responsibility and comparison with comparable employers in the industry. 2) Annual cash bonuses are based on individual and Corporation performance. Factors evaluated include the achievement of certain profitability, growth and asset quality standards as established by the Board of Directors. The bonus compensation is funded from the Corporation’s pre-tax income. While many of the factors considered in determining whether to award a bonus are objective, the Committee recommendation may also include certain subjective factors as part of the bonus analysis. During 2003, bonuses were recommended by the Committee and approved by the Board of Directors for the named executive officers as reflected in the Summary Compensation Table. 3) Stock option grants are intended to increase the executive officers’ interest in the Corporation’s long-term success and to link the interests of the executive officers with those of the shareholders as measured by the Corporation’s share price. Stock options are granted at the prevailing market value of the Corporation’s Common Stock and will only have value if the Corporation’s stock price increases. See the Summary Compensation Table and Option/SAR Exercise Table, and notes thereto for a further description of stock options. 4) The Corporation matches salary deferred by employees participating in its 401(k) Plan at a rate determined annually by the Board of Directors (25% of salary deferred for 2003). Executive officers are eligible to participate in the 401(k) plan. See the Summary Compensation Table for further 401(k) plan information. |
Submitted by: | |||||
/s/ ROBERT M. MRAULE | /s/ C. EDWARD BOUTONNET | /s/ DUNCAN L. MCCARTER | |||
Robert M. Mraule, DDS, MD | C. Edward Boutonnet | Duncan L. McCarter | |||
/s/ LOUIS A. SOUZA | /s/ MOSE E. THOMAS, JR. | ||||
Louis A. Souza | Mose E. Thomas, Jr. |
AUDIT COMMITTEE REPORTNOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE CORPORATION’S PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE THIS PROXY STATEMENT OR FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, IN WHOLE OR IN PART, THE FOLLOWING REPORT SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY SUCH FILING. The Audit Committee consists of the following members of the Corporation's Board of Directors: Alfred P. Glover, Michael T. Lapsys (Chairman), Duncan L. McCarter, Robert M. Mraule, and Mose E. Thomas, Jr. Each such member of the Committee is "independent" as defined under applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules. The Committee operates under a written charter adopted by the Board of Directors which, among other matters, delineates the responsibilities of the Committee. The Committee’s responsibilities include responsibility for the appointment, compensation, retention and oversight of the work of the Corporation’s independent public accountants engaged (including resolution of disagreements between management and the independent public accountants regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation. The Corporation’s independent public accountants report directly to the Committee. The Audit Committee Charter is attached to this Proxy Statement as Appendix B. The Committee has reviewed and discussed the audited financial statements of the Corporation for the fiscal year ended December 31, 2003 with management and Deloitte & Touche LLP, the Corporation’s independent public accountants. The Committee has also discussed with Deloitte & Touche LLP, the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards) as may be modified or supplemented. The Committee has also received the letter from Deloitte & Touche LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) as may be modified or supplemented, and the Committee has discussed the independence of Deloitte & Touche LLP with that firm. Based on the Committee’s review and discussions noted above, the Committee recommended to the Board of Directors that the Corporation’s audited financial statements be included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 for filing with the Securities and Exchange Commission. |
Submitted by: | |||||
/s/ ALFRED P. GLOVER | /s/ ROBERT M. MRAULE | /s/ MICHAEL T. LAPSYS | |||
Alfred P. Glover | Robert M. Mraule | Michael T. Lapsys | |||
/s/ DUNCAN L. MCCARTER | /s/ MOSE E. THOMAS, JR. | ||||
Duncan L. McCarter | Mose E. Thomas, Jr. |
COMPARISON OF CENTRAL COAST BANCORP SHAREHOLDER RETURNSet forth below is a line graph comparing the annual percentage change in the cumulative total return on the Corporation’s Common Stock with the cumulative total return of the S&P 500 and the Nasdaq Bank Index as of the end of each of the Corporation’s last five fiscal years. The following table assumes that $100.00 was invested on December 31, 1998 in Central Coast Bancorp Common Stock and each index, and that all dividends were reinvested. Returns have been adjusted for stock dividends and stock splits declared by Central Coast Bancorp. Shareholder returns over the indicated period should not be considered indicative of future shareholder returns. [GRAPHIC OMITTED] |
Index | 12/31/98 | 12/31/99 | 12/31/00 | 12/31/01 | 12/31/02 | 12/31/03 | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Central Coast Bancorp | 100 | .00 | 128 | .07 | 152 | .61 | 206 | .61 | 231 | .97 | 232 | .83 | |
S and P 500 | 100 | .00 | 121 | .11 | 110 | .34 | 97 | .32 | 75 | .75 | 97 | .51 | |
Nasdaq Bank Stocks | 100 | .00 | 96 | .15 | 109 | .84 | 118 | .92 | 121 | .74 | 156 | .62 |
Category of Services | Fiscal Year 2003 | Fiscal Year 2002 | |||
---|---|---|---|---|---|
Audit Fees (1) | $267,000 | $247,000 | |||
Audit-Related Fees (2) | 7,000 | -- | |||
Tax Fees (3) | 20,000 | 21,000 | |||
All Other Fees (4) | -- | -- | |||
Total Accounting Fees | $294,000 | $268,000 | |||
(1) | Fees for audit services for 2003 and 2002 consisted of the audit of the Corporation’s annual financial statements, review of financial statements included in the Corporation’s Quarterly Reports on Form 10-Q, and consents and other services related to Securities and Exchange Commission matters. |
(2) | Fees for audit-related services for 2003 consisted of miscellaneous financial accounting and reporting consultations. No services in this category were rendered during 2002. |
(3) | Fees for tax services for 2003 and 2002 consisted of tax compliance services. Tax compliance services are rendered based upon facts already in existence or transactions that have already occurred to document, compute, and obtain government approval for amounts to be included in tax filings and Federal and state income tax return assistance. |
(4) | No services in this category were rendered during 2003 or 2002. |
Pre-Approval PolicyThe Audit Committee approved each professional service rendered by Deloitte & Touche LLP during the 2003 and 2002 fiscal years and considered whether the provision of such services is compatible with Deloitte & Touche LLP maintaining its independence. The approval of such professional services included pre-approval of all audit and permissible non-audit services provided by Deloitte & Touche LLP. These services included audit, tax and other services described above. The Audit Committee Charter attached as Appendix B includes a policy of pre-approval of all services provided by the Corporation’s independent public accountants. The Audit Committee approved in advance one hundred percent (100%) of all such professional services provided by Deloitte & Touche LLP during the 2003 and 2002 fiscal years. It is anticipated that one or more representatives of Deloitte & Touche LLP will be present at the Meeting and will be able to make a statement if they so desire and answer appropriate questions. The Audit Committee has selected Deloitte & Touche LLP to serve as the Corporation’s independent public accountants for the year 2004 and recommends that shareholders vote “FOR” the ratification of the appointment of Deloitte & Touche LLP. ANNUAL REPORTThe Annual Report of the Corporation containing audited financial statements for the fiscal year ended December 31, 2003 is included in this mailing to shareholders. FORM 10-KA COPY OF THE CORPORATION’S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IS INCLUDED AS PART OF THE CORPORATION’S ANNUAL REPORT TO SHAREHOLDERS AND WAS MAILED WITH AND ACCOMPANIES THIS PROXY STATEMENT. WEBSITEInformation regarding the Corporation and its subsidiary Bank may be obtained from the Corporation’s website at www.community-bnk.com. Copies of the Corporation’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and Section 16 reports by Corporation insiders, including exhibits and amendments thereto, are available free of charge on the Corporation’s website as soon as they are published by the Securities and Exchange Commission through a link to the Edgar reporting system maintained by the Securities and Exchange Commission. To access Corporation filings, select the “Central Coast Bancorp” menu item on the Corporation website, then select “Corporate Profile,” followed by selecting either “Central Coast Bancorp SEC Filings” to view or download copies of reports including Form 10-K, 10-Q or 8-K, or “Central Coast Bancorp SEC Section 16 Reports” to view or download reports on Forms 3, 4 or 5 of insider transactions in Corporation securities. SHAREHOLDERS’ PROPOSALSNext year’s Annual Meeting of Shareholders will be held on May 19, 2005. The deadline for shareholders to submit proposals for inclusion in the Proxy Statement and form of Proxy for the 2005 Annual Meeting of Shareholders is December 22, 2004. Management of the Corporation will have discretionary authority to vote proxies obtained by it in connection with any shareholder proposal not submitted on or before the December 22, 2004 deadline. All proposals should be submitted by Certified Mail — Return Receipt Requested, to Robert M. Stanberry, Secretary, Central Coast Bancorp, 301 Main Street, Salinas, California, 93901. OTHER MATTERSThe Board of Directors knows of no other matters which will be brought before the Meeting, but if such matters are properly presented to the Meeting, proxies solicited hereby will be voted in accordance with the judgment of the persons holding such proxies. All shares represented by duly executed proxies will be voted at the Meeting in accordance with the terms of such proxies. |
CENTRAL COAST BANCORP | |||
/s/ ROBERT M. STANBERRY | |||
Salinas, California | Robert M. Stanberry, Secretary | ||
April 26, 2004 |
1. | Candidates shall be evaluated based on the criteria established by the Board of Directors which may include (a) satisfactory results of any background investigation, (b) experience and expertise, (c) financial resources, (d) time availability, (e) community involvement, and (f) such other criteria as the Board of Directors may determine to be relevant. Candidates evaluated for consideration as nominees must meet with the Board of Directors. |
2. | Any candidate nominated for election to the Board of Directors must receive a majority of votes in favor of nomination from independent members of the Board of Directors. Directors who are not independent shall not vote, but may be present during the voting. |
3. | Each candidate shall be required to complete one or more questionnaires and provide such additional information as the Board of Directors shall deem necessary or appropriate. Such information shall include a personal financial statement and a background investigation using an outside firm which shall, among other matters, include (a) verification of the accuracy of information provided by the candidate, and (b) a review of criminal history records. |
4. | Each existing member of the Board of Directors whose term is ending must be evaluated for nomination to be re-elected. This review will include review of attendance, participation, continuing education, investment in shares, business development and community involvement. In lieu of the information required to be provided by new candidates for election to the Board of Directors described above in paragraph 3, the Board of Directors may rely upon the information contained in the most recent annual Directors and Officers Questionnaire completed by the existing member of the Board of Directors, subject to such updated information as the Board of Directors may deem appropriate. Such existing members of the Board of Directors must receive a majority of votes in favor of nomination from the other independent directors. |
APPENDIX BCENTRAL COAST BANCORPAUDIT COMMITTEE CHARTERPURPOSEThe Audit Committee (“Committee”) is appointed by the Board of Directors to assist the Board of Directors, among other matters, in monitoring the following: |
1. | The integrity of the Corporation's financial statements, financial reporting processes and internal controls regarding finance, accounting, regulatory and legal compliance; |
2. | The independence, qualifications and performance of the Corporation's independent public accountants; |
3. | The performance of the Corporation's internal auditors; |
4. | Communications among the independent public accountants, management, internal auditors, and the Board of Directors; and |
5. | Procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential, anonymous submission by the Corporation’s employees of concerns regarding questionable accounting or auditing matters. |
COMMITTEE MEMBERSHIPThe Committee shall be comprised of at least three directors. Each member of the Committee shall have the following attributes, subject to permissible exceptions: |
1. | Independence, as defined in applicable rules promulgated by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq Listing Rules, including that a member shall not have participated in the preparation of the financial statements of the Corporation or any current subsidiary of the Corporation at any time during the past three years; and |
2. | The ability to read and understand fundamental financial statements, including the Corporation’s balance sheet, income statement, and cash flow statement. |
At least one member of the Committee shall be an “Audit Committee Financial Expert” as defined in the rules promulgated by the Securities and Exchange Commission, or in the event that no member of the Committee qualifies as an Audit Committee Financial Expert, at least one member of the Committee shall be “financially sophisticated” as defined in applicable Nasdaq Listing Rules. The members of the Committee shall be appointed by the Board of Directors and serve at the pleasure of the Board of Directors. MEETINGSThe Committee shall meet as often as it determines necessary, but not less frequently than quarterly each fiscal year. The Committee shall meet periodically with the Corporation’s management, independent public accountants, internal auditor, and compliance officer. The Committee may request any officer or employee of the Corporation, or the Corporation’s counsel, or independent public accountants, or internal auditors, or compliance officer, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. COMMITTEE AUTHORITY AND RESPONSIBILITIESThe Committee, in its capacity as a committee of the Board of Directors, shall be directly responsible for the appointment of the independent public accountants (subject, if applicable, to shareholder ratification) and for the retention, compensation and oversight of the work of the independent public accountants (including resolution of disagreements between management and the independent public accountants regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation. The independent public accountant shall report directly to the Committee. The Committee shall pre-approve all audit services and permissible non-audit services to be performed for the Corporation by the independent public accountants, subject to any permitted exceptions for pre-approval of non-audit services pursuant to rules and regulations of the Securities and Exchange Commission and/or Nasdaq. The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Corporation shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the independent public accountants for the purpose of preparing or issuing an audit report or performing other audit, review or attest services and to any other advisors employed by the Committee. The Committee shall establish procedures for the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential, anonymous submission by the Corporation’s employees of concerns regarding questionable accounting or auditing matters. The Committee shall make regular reports to the Board of Directors. The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board of Directors for approval. The Committee, to the extent required by applicable rules or regulations of the Securities and Exchange Commission and/or Nasdaq, or as the Committee deems necessary or appropriate, shall perform the following: |
1. | Financial Statement and Disclosure Matters |
(a) | Review with management and the independent public accountants the annual audited financial statements, including disclosures made in the Corporation’s Annual Report on Form 10-K. |
(b) | Review with management, the independent public accountants, the internal auditors and Corporation counsel any certification provided by management related to the Corporation’s financial statements. Review with management, the independent public accountants, and the internal auditors management’s assertion regarding the design effectiveness and operation efficiency of the Corporation’s internal control over financial reporting and compliance with the applicable laws and regulations. |
(c) | Review with management and the independent public accountants significant financial reporting issues and judgments made in connection with the preparation of the Corporation’s financial statements, including any significant changes in the Corporation’s selection or application of accounting principles, any material issues as to the adequacy of the Corporation’s internal controls and any actions taken or adopted in light of material control deficiencies. |
(d) | Review a report by the independent public accountants concerning (i) all critical accounting policies and practices to be used; (ii) alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent public accountants; and (iii) any other material written communications between the independent public accountants and the Corporation’s management. |
(e) | Review with management and the independent public accountants the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Corporation’s financial statements. |
(f) | Review with management the Corporation’s major financial risk exposures and the actions management has taken to monitor and control such exposures, including the Corporation’s risk assessment and risk management policies. |
(g) | Review with the independent public accountants (i) the matters required to be discussed by the Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards), as modified or supplemented; (ii) the letter from the independent public accountants required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as modified or supplemented, and the independence of the independent public accountants related thereto; and (iii) matters relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management. |
(h) | Review disclosures made to the Committee by the Corporation’s Chief Executive Officer and Chief Financial Officer during their certification about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Corporation’s internal controls. |
2. | Independent Public Accountant Oversight |
(a) | Review the length of time the lead and concurring partner of the independent public accountants team has been engaged to audit the Corporation. |
(b) | On an annual basis, the Committee shall review and discuss with the independent public accountants (i) all relationships they have with the Corporation that could impair the independent public accountant’s independence, (ii) the independent public accountant’s internal quality control procedures, and (iii) any material issues raised by the most recent internal quality control review or peer review of the independent public accountant’s firm or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent public accountant’s firm, and the steps taken to deal with those issues. |
(c) | Ensure the rotation of the lead audit partner of the independent public accountants having primary responsibility for the Corporation’s audit and the audit partner responsible for reviewing the audit to the extent required by applicable law or regulation. |
(d) | Prohibit, to the extent required by applicable law or regulation, the hiring of any employee of the independent public accountants who was engaged on the Corporation’s account and who would be employed by the Corporation in a financial reporting oversight role. |
(e) | Meet with the independent public accountants prior to the Corporation's audit to discuss the planning and staffing of the audit. |
3. | Internal Audit Oversight |
(a) | Approve the appointment and replacement of the independent firm of internal auditors; including the independence and authority of the auditors’ reporting obligations. |
(b) | Review significant reports to management prepared by the auditors and management's responses. |
(c) | Review with the auditors and management the auditors’ responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit. |
(d) | Review the audit scope and audit staffing plan and discuss the completeness of coverage and effective use of audit resources with both the auditors and the independent public accountants. |
(e) | Review with the auditors a progress report on the internal audit plan and any significant changes with explanations for any changes from the original plan. |
(f) | Receive confirmation from both the auditors and the independent public accountants that no limitations have been placed on the scope or nature of their audit process or procedures. |
4. | Compliance and Internal Control Oversight |
(a) | Review reports and disclosures of insider and affiliated party transactions. |
(b) | Review with management and the independent public accountants any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Corporation’s internal controls, financial statements or accounting policies. |
(c) | Review legal matters that may have a material impact on the financial statements or the Corporation’s compliance policies with the Corporation’s counsel. |
(d) | Review the adequacy and effectiveness of the Corporation’s internal controls and security matters with management, the auditors and the independent public accountants. |
APPENDIX CCENTRAL COAST BANCORP 2004 STOCK OPTION PLAN1. PURPOSE.The purpose of this Central Coast Bancorp 2004 Stock Option Plan (the “2004 Plan”) is to provide a method whereby those key employees, officers and directors of Central Coast Bancorp and its affiliates (collectively referred to as the “Company”), who are primarily responsible for the management and growth of the Company’s business and who are presently making and are expected to make substantial contributions to the Company’s future management and growth, may be offered incentives in addition to those presently available, and may be stimulated by increased personal involvement in the fortunes and success of the Company to continue in its service, thereby advancing the interests of the Company and its shareholders. The word “affiliate,” as used in the 2004 Plan, means any bank or corporation in any unbroken chain of banks or corporations beginning or ending with the Company, if at the time of the granting of an option, each such bank or corporation other than the last in that chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other banks or corporations in the chain. 2. ADMINISTRATION.The following provisions shall govern the administration of the 2004 Plan: (a) The 2004 Plan shall be administered by the Board of Directors (the “Board”) or a committee (“Committee”) of the Board duly appointed by the Board and consisting of such number of directors who are “non-employee directors” within the meaning of Rule 16b-3 as promulgated by the Securities and Exchange Commission (“SEC”) under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as such rule may be amended from time to time and as interpreted by the SEC (“Rule 16b-3”), and as may be required to comply with Rule 16b-3. The Board of Directors may from time to time remove members from or add members to the Committee. Vacancies on the Committee, however caused, shall be filled by the Board of Directors. The Board of Directors may designate a Chairman and Vice-Chairman of the Committee from among the members of the Committee. (b) Acts of the Board or Committee (i) at a meeting, held at a time and place and in accordance with rules adopted by the Board or Committee, at which a quorum of the Board or Committee is present and acting, or (ii) reduced to and approved in writing by all members of the Board or Committee, shall be the valid acts of the Board or Committee. (c) The grant of options under the 2004 Plan shall be affected by execution of instruments in writing in a form approved by the Board or Committee. Subject to the express terms and conditions of the 2004 Plan, the Board or Committee shall have full power to construe the 2004 Plan and the terms of any option granted under the 2004 Plan, to prescribe, amend and rescind rules and regulations relating to the 2004 Plan or such options and to make all other determinations necessary or advisable for the 2004 Plan’s administration, including, without limitation, the power to (i) determine which persons meet the requirements of Section 3 hereof for selection as participants in the 2004 Plan; (ii) determine to whom of the eligible persons, if any, options shall be granted under the 2004 Plan; (iii) establish the terms and conditions required or permitted to be included in every option agreement or any amendments thereto, including whether options to be granted shall be “incentive stock options,” as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “IRC”) or nonstatutory stock options not described in Section 422; (iv) specify the number of shares to be covered by each option; (v) determine the fair market value of shares of the Company’s common stock for any purpose under the 2004 Plan; (vi) grant options in exchange for cancellation of options granted earlier under the 2004 Plan at different exercise prices; (vii) take appropriate action to amend any option under the 2004 Plan, provided that no such action may be taken without the written consent of the affected optionee; and (viii) make all other determinations deemed necessary or advisable for administering the 2004 Plan. The Board’s or Committee’s determination on the foregoing matters shall be conclusive. 3. ELIGIBILITY.The persons who shall be eligible to receive the grant of options under this 2004 Plan shall be those key employees, officers, directors of the Company (including officers who may also be directors of the Company) and persons who became employees of the Company within thirty days of the date of grant of an option. 4. THE SHARES.The shares of stock subject to options authorized to be granted under the 2004 Plan shall consist of one million eight hundred fifty thousandshares (1,850,000) of the Company’s no par value common stock which are acquired by exercise of such options (the “Shares”), or the number and kind of shares of stock or other securities which shall be substituted for such Shares or to which such Shares shall be adjusted as provided in Section 7 hereof. Upon the expiration or termination for any reason of an outstanding option under the 2004 Plan which has not been exercised in full, all unissued Shares thereunder shall again become available for the grant of options under the 2004 Plan. Shares of the Company’s common stock which are (i) delivered by an optionee in payment of the exercise price of an option pursuant to Section 6(a), or (ii) delivered by an optionee, or withheld by the Company from the shares otherwise due upon exercise of a nonstatutory stock option, in satisfaction of applicable withholding taxes as permitted by Section 6(c), shall again become available for the grant of options under the 2004 Plan only to those eligible participants who are not subject to Section 16 of the Exchange Act. 5. OPTION GRANTS.Options, in the discretion of the Board or Committee, may be granted at any time prior to the termination of the 2004 Plan to persons included among the eligible classes of persons specified in Section 3. Options granted by the Board or Committee shall be subject to the following terms and conditions: (a) Grant of Options.Options granted to employees pursuant to the 2004 Plan may be either incentive stock options or nonstatutory stock options. If the aggregate fair market value of the shares issuable upon exercise of incentive stock options which are exercisable for the first time during any one calendar year under all incentive stock options held by an optionee exceeds $100,000 (determined at the time of the grant of the options), such options shall be treated as nonstatutory stock options to the extent of such excess. Options granted to directors who are “non-employee directors” within the meaning of Rule 16b-3 as promulgated by the SEC under Section 16(b) of the Exchange Act, as such rule may be amended from time to time and as interpreted by the SEC shall be nonstatutory stock options. (b) Option Price.The purchase price under each option shall not be less than one hundred percent of the fair market value of the Shares subject thereto on the date the option is granted; provided, however, that the purchase price of an option granted to an individual who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company shall not be less than one hundred ten percent (110%) of the fair market value of the Shares subject thereto on the date the option is granted. For any purposes under this 2004 Plan, “fair market value per share” shall mean, where there is a public market for the Company’s common stock, the mean of the bid and asked prices (or the closing price if listed on a stock exchange or the Nasdaq National Market) of the Company’s common stock for the date of grant, as reported in the Wall Street Journal (or, if not so reported, as otherwise reported by the Nasdaq Stock Market or the National Quotation Bureau). If such information is not available for the date of grant, then such information for the last preceding date for which such information is available shall be considered as the fair market value. (c) Duration of Options.Each option shall be for a term determined by the Board or Committee; provided, however, that the term of any option may not exceed ten (10) years and, provided further, that the term of any incentive stock option granted to an individual who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company shall not exceed five (5) years. Each option shall vest in such manner and at such time as the Board or Committee shall determine and the Board or Committee may accelerate the time of exercise of any option; provided, however, that no option shall vest for exercise at a rate of less than twenty percent (20%) per year during the five (5) year period following the date of grant of an option. (d) Termination of Director or Employment Status.Upon the termination of an optionee’s status as an employee or member of the Board, the optionee’s rights to exercise an option then held shall be only as follows: |
DEATH OR DISABILITY: If an optionee’s employment or service on the Board is terminated by death or disability, such optionee or such optionee’s qualified representative (in the event of the optionee’s mental disability) or the optionee’s estate (in the event of optionee’s death) shall have the right for a period of twelve (12) months (or such longer period as the Board or Committee may determine at the date of grant or during the term of the option) following the date of such death or disability to exercise the option to the extent the optionee was entitled to exercise such option on the date of the optionee’s death or disability; provided the actual date of exercise is in no event after the expiration of the term of the option. To the extent the option is not exercised within such period the option will terminate. An optionee’s “estate” shall mean the optionee’s legal representative or any person who acquires the right to exercise an option by reason of the optionee’s death. |
CAUSE: If by determination of the Board or Committee, an optionee’s employment is terminated (1) because such optionee has committed an act of embezzlement, fraud, dishonesty, breach of fiduciary duty to the Company, or deliberately disregarded the rules of the Company which resulted in loss, damage or injury to the Company, or (2) because the optionee has made any unauthorized disclosure of any of the secrets or confidential information of the Company, induced any client or customer of the Company to break any contract with the Company or induced any principal for whom the Company acts as agent to terminate such agency relations, or engaged in any conduct which constitutes unfair competition with the Company, or (3) if an optionee (including an optionee who is a director) is removed from any office of the Company or from the Company’s Board by any bank regulatory agency, the optionee shall have the right for a period of thirty (30) days to exercise the option to the extent the option was exercisable on the date of termination; provided that the date of exercise is in no event after the expiration of the term of the option. To the extent the option is not exercised within such period the option will terminate. In making any determination pursuant to this paragraph, the Board or Committee shall act fairly and shall give the optionee whose employment status has been terminated an opportunity to appear and be heard at a hearing before the full Board or Committee and present evidence on the optionee’s behalf. For the purpose of this paragraph, termination of employment status shall be deemed to occur when the Company dispatches notice or advice to the optionee that the optionee’s employment status is terminated (or in the event of removal in the case of a director), and not at the time of optionee’s receipt thereof. |
OTHER REASONS: If an optionee’s employment or service on the Board is terminated for any reason other than those mentioned above under “Death or Disability” and “Cause,” the optionee may, within three (3) months (or such longer period as the Board or Committee may determine at the date of grant or during the term of the option) following such termination, exercise the option to the extent such option was exercisable on the date of termination of the optionee’s employment or director status; provided the date of exercise is in no event after the expiration of the term of the option and provided further that any option which is exercised more than three (3) months following termination shall be treated as a nonstatutory option whether or not it was designated as such at the time it was granted. To the extent the option is not exercised within such period the option will terminate. |
CENTRAL COAST BANCORP | |||||
Dated:_________________________ | By:________________________ | ||||
________________________ | |||||
[TYPE OR PRINT NAME/TITLE] |
The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors or the Committee upon any questions arising under the 2004 Plan. |
OPTIONEE | |||||
Dated:_________________________ | _________________________ | ||||
________________________ | |||||
[TYPE OR PRINT NAME/TITLE] |
CENTRAL COAST BANCORP | |||||
Dated:_________________________ | By:________________________ | ||||
________________________ | |||||
[TYPE OR PRINT NAME/TITLE] |
The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors or the Committee upon any questions arising under the 2004 Plan. |
OPTIONEE | |||||
Dated:_________________________ | _________________________ | ||||
________________________ | |||||
[TYPE OR PRINT NAME/TITLE] |
CENTRAL COAST BANCORP |
FOR AGAINST ABSTAIN | |||||
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1. To elect as Class III directors of Central Coast Bancorp, management's nominees | 2. To approve the 2004 Stock Option Plan | [ ] | [ ] | [ ] | |
set forth below to serve for a three year term until the 2007 annual meeting of | |||||
shareholders and until their successors are duly elected and qualified. | 3. To ratify the appointment of Deloitte | [ ] | [ ] | [ ] | |
and Touche LLP as independent public | |||||
accountants for the 2004 fiscal year. |
Nominees | |||||
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[ ] FOR ALL DIRECTORS | [ ] C. Edward Boutonnet | The proxyholders will vote according to their discretion on all other | |||
[ ] Donald D. Chapin, Jr | matters which may properly be presented for action at the meeting. | ||||
[ ] WITHHOLD AUTHORITY | [ ] Bradford C. Crandall | ||||
FOR ALL NOMINEE | [ ] Robert M. Mraule | THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF | |||
DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE. THE | |||||
[ ] FOR ALL EXCEPT | BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION | ||||
(See instructions below) | OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND | ||||
"FOR" PROPOSALS NO. 2 AND NO. 3. THE PROXY WHEN PROPERLY EXECUTED |
WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL | |||||||
BE VOTED "FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE | |||||||
INSTRUCTION: To withhold authority to vote for any individual | BOARD OF DIRECTORS AND "FOR" PROPOSALS NO. 2 AND NO. 3. | ||||||
nominee, mark "FOR ALL EXCEPT" and fill in the circle next to | |||||||
each nominee you wish to withhold, as show here:[X] | |||||||
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, | |||||||
PLEASE DATE, SIGN AND RETURN THIS PROXY AS PROMPTLY | |||||||
AS POSSIBLE IN THE ENCLOSED POSTAGE PAID ENVELOPE | |||||||
To change the address on your account, please check the box at right and | |||||||
indicate your new address in the address space above. Please note that [ ] | Please check here if you plan to attend the meeting. [ ] | ||||||
changes to the registered name(s) on the account may not be submitted via | |||||||
this method |
Signature of Shareholder Date: Signature of Shareholder Date: |