SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _____)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required .
[ ] $125 per Exchange Act Rules 0-11 (c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22 (a) (2) of Schedule 14A.
[ ] Fee computed on table below per exchange Act Rules 14a-6 (i) 4 and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously 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
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, May 22, 2003
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Central Coast Bancorp will be held at
301 Main Street, Salinas, California, on Thursday, May 22, 2003 at 5:30 p.m. for
the following purposes:
1. To elect Class II directors.
2. To ratify the appointment of Deloitte & Touche LLP as independent
public accountants for the 2003 fiscal year.
3. To transact such other business as may properly come before the
Meeting.
The names of the Board of Directors' nominees to be Class II 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 March 24, 2003 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 22, 2003
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
on or about April 22, 2003
CENTRAL COAST BANCORP
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This 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
May 22, 2003 at 5:30 p.m. (the "Meeting"). Only shareholders of record on March
24, 2003 (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 9,917,241 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 and 2 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 MANAGEMENT
Security Ownership of Certain Beneficial Owners
As of the Record Date, March 24, 2003, no individual known to the
Corporation owned more than five percent (5%) of the outstanding shares of its
Common Stock except as described below.
=============== ============== ============ ============
Name and Amount and Percentage
Title of Address Nature of Class
Class of Beneficial of Beneficially
Owner Beneficial Owned
Ownership
- --------------- -------------- ------------ ------------
Common Stock, Robert L.
No Par Value Meyer (1) 741,933 7.5%
=============== ============== ============ ============
(1) The address for the person listed is P. O. Box 606, King City,
California, 93930-0606. 713,177 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. 16,667 shares are held by the
Meyer One partnership of which Mr. and Mrs. Meyer's 1977 Trust
owns 52%. 9,835 shares are held by Geneva M. Jones, individual,
as to which Patricia J. Meyer has Power of Attorney for both her
and her estate. 2,254 shares held by Robert L. Meyer's son Craig
E. Meyer.
Security Ownership of Management
The following table sets forth information as of March 24, 2003,
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.
Amount and
Name and Nature of Percent
Address (1) of Beneficial of
Title of Class Beneficial Owner Ownership Class (2)
-------------- ---------------- --------- ---------
Common Stock, No Robert C. 33,744 (3) 0.3%
Par Value Blatter
Common Stock, No C. Edward 388,095 (4) 3.5%
Par Value Boutonnet
Common Stock, No Bradford G. 315,834 (5) 2.9%
Par Value Crandall
Common Stock, No Alfred P. 103,586 (6) 0.9%
Par Value Glover
Common Stock, No Michael T. 174,968 (7) 1.6%
Par Value Lapsys
Common Stock, No Duncan L. 242,139 (8) 2.2%
Par Value McCarter
Common Stock, No John F. 79,020 (9) 0.7%
Par Value McCarthy
Amount and
Name and Nature of Percent
Address (1) of Beneficial of
Title of Class Beneficial Owner Ownership Class (2)
-------------- ---------------- --------- ---------
Common Stock, No Robert M. 193,447 (10) 1.8%
Par Value Mraule,
D.D.S.,M.D.
Common Stock, No Louis A. 90,996 (11) 0.8%
Par Value Souza
Common Stock, No Robert M. 39,113 (12) 0.4%
Par Value Stanberry
Common Stock, No Mose E. 117,969 (13) 1.1%
Par Value Thomas, Jr.
Common Stock, No Nick 165,646 (14) 1.5%
Par Value Ventimiglia
All directors and
executive officers
of the Corporation
as a group (12 persons) 1,944,557(15) 17.7%
( 1) The address for all persons listed is c/o Central Coast Bancorp, 301
Main Street, Salinas,California, 93901.
( 2) Includes shares of Common Stock subject to stock options exercisable
immediately.
( 3) Includes 6,172 shares of Common Stock held jointly with his spouse and
6,050 shares of Common Stock subject to stock options exercisable
immediately.
( 4) Includes 109,544 shares of Common Stock held in a partnership, 5,782
shares as custodian for his grandchildren, 37,439 shares held by Mr.
Boutonnet as trustee of the Charles E. Boutonnet Trust, 43,143 shares
held by Mr. Boutonnet as trustee of Boutonnet Farms, Inc. Profit Sharing
Plan, 87,847 shares held in the Central Coast Bancorp Nonqualified
Deferred Compensation Plan Trust as to which Mr. Boutonnet has shared
investment power and 104,340 shares subject to stock options exercisable
immediately.
( 5) Includes 116,970 shares of Common Stock held jointly with his spouse
as trustees of the Bradford G. Crandall and Lynne O. Crandall Trust,
87,312 shares held in the Central Coast Bancorp Nonqualified Deferred
Compensation Plan Trust as to which Mr. Crandall has shared investment
power and 104,340 shares subject to stock options exercisable
immediately.
( 6) Includes 14,016 shares of Common Stock held jointly with his spouse,
971 shares held by his spouse and 70,024 shares subject to stock options
exercisable immediately.
( 7) Includes 23 shares of Common Stock held jointly with his spouse, and
684 shares held as custodian, 127,949 shares held in the Kathy O. Lapsys
and Michael T. Lapsys Trust and 46,318 shares subject to stock options
exercisable immediately.
( 8) Includes 50,758 shares of Common Stock held jointly with his spouse as
trustees of the Duncan L. McCarter and Leslie P. McCarter Trust, 86,736
shares held in the Central Coast Bancorp Nonqualified Deferred
Compensation Plan Trust as to which Mr. McCarter has shared investment
power and 104,340 shares subject to stock options exercisable
immediately.
( 9) Includes 27,263 shares of Common Stock held jointly with his spouse as
trustees of the John F. McCarthy and Mary Ann McCarthy Trust and 45,655
shares subject to stock options exercisable immediately.
(10) Includes 28,991 shares of Common Stock held by Dr. Mraule
as trustee of Robert M. Mraule D.D.S., M.D., Inc. Money
Purchase Pension Plan, 60,116 shares held in the Central Coast
Bancorp Nonqualified Deferred Compensation Plan Trust as to
which Mr. Mraule has shared investment power and 104,340 shares
subject to stock options exercisable immediately.
(11) Includes 12,893 shares of Common Stock held jointly with his spouse,
7,389 shares held in the Louis A. Souza Trust and 32,280 shares subject
to stock options exercisable immediately.
(12) Includes 4,812 shares of Common Stock held jointly with his spouse as
trustees of the Robert and Joen Stanberry Trust and 32,431 shares of
Common Stock subject to stock options exercisable immediately.
(13) Includes 15,450 shares of Common Stock owned jointly with
his spouse, and 59,033 shares of Common
Stock subject to stock options exercisable immediately.
(14) Includes 108,115 shares of Common Stock subject to stock options
exercisable immediately.
(15) Includes 817,266 shares of Common Stock subject to stock options
exercisable immediately and 322,011 shares held by the Central Coast
Bancorp Board of Directors Deferred Stock Option Plan Trust.
PROPOSAL NO. 1
ELECTION OF CENTRAL COAST BANCORP DIRECTORS
The Corporation's Bylaws provide that the number of directors of the
Corporation shall not be less than seven (7) nor more than thirteen (13) and the
exact number of directors is fixed at nine (9).
The Corporation has three groups of directors, each of whom is elected for
a three-year term. Class II directors are nominated for election this year.
Class III directors were elected to serve until 2004 at the Annual Meeting of
Shareholders on June 11, 2001. Class I directors were elected to serve until
2005 at the Annual Meeting of Shareholders on May 23, 2002.
The following persons are the nominees of the Board of Directors for
election as Class II directors to serve for a three-year term until the 2006
Annual Meeting of Shareholders and until their successors are duly elected and
qualified:
Nominees for Election as Class II Directors
- -------------------------------------------
Michael T. Duncan L. Nick
Lapsys McCarter Ventimiglia
The following persons are the Class III and Class I directors who will
continue in office as described above:
Class III Directors, Continuing in Office
- -----------------------------------------
C. Edward Bradford Robert
Boutonnet C. Crandall M. Mraule
Class I Directors, Continuing in Office
- ---------------------------------------
Mose E. Louis A. Alfred
Thomas Souza P. Glover
All proxies will be voted for the election of the three (3) nominees for
Class II 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 II 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 March
24, 2003, concerning the persons named for election as Class II directors of the
Corporation, as well as for Class III and Class I directors who are not
currently subject to election.
Director
of Director
Corpor- of
ation Bank(1) Principal Occupation
Name Age Since Since During Last Five Years
---- --- ----- ----- ----------------------
C. Edward 63 1994 1982 President, Ocean Mist
Boutonnet Farms. Managing
Partner, Sea Mist Farms
and Boutonnet Farms.
Bradford G. 68 1994 1982 Chairman, E.B. Stone &
Crandall Son, Inc., wholesale
nursery supply firm.
Alfred P. 71 1996 1988 Owner, Glover
Glover Enterprises, a real
estate development firm.
Michael T. 54 1998 1998 Chairman, Device
Lapsys Dynamics Incorporated,
a semiconductor backend
services company.
Duncan L. 56 1994 1982 President and Chief
McCarter, Executive Officer,
R.Ph. Healthcare Pathway
Management, Inc. and
AdvantaCare Health
Partners LP d.b.a.
AdvantaCare Medical and
AdvantaCare Infusion
Robert M. 53 1994 1982 Physician, Dentist,
Mraule, Oral and Maxillofacial
D.D.S., M.D. Surgeon.
Louis A. 74 1996 1988 Owner, Louis A. Souza
Souza Construction, a general
contractor, retired.
Investor.
Mose E. 62 1996 1989 General Manager, Chapel
Thomas, of Seaside, Inc., and
Jr. Mission Mortuary, Inc.,
funeral chapels.
Nick 61 1994 1982 Director and Chief
Ventimiglia 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 II director listed above or
executive officers listed on page 6, 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 II
director or executive officers. No director, nominee for Class II 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 Directors
The Audit Committee, chaired by Alfred P. Glover, and the
Finance Committee, chaired by C. Edward Boutonnet, whose common
members include Michael T. Lapsys, Duncan L. McCarter, Robert M.
Mraule (Vice Chairman) and Mose E. Thomas, Jr., 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 and reporting. The Audit
Committee met twelve (12) times and the Finance Committee met twelve
(12) times in 2002. See the Audit Committee Report on page 12 for
additional information regarding the functions of the Audit
Committee.
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 for election as directors.
The Premises, Compensation and Performance Committee, whose
members include C. Edward Boutonnet (Vice Chairman), Duncan L.
McCarter, Robert M. Mraule (Chairman), 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. The Premises,
Compensation and Performance Committee met twelve (12) times in 2002.
The Investment/CRA/ALCO Committee, whose members include
Bradford G. Crandall, Alfred P. Glover, Michael T. Lapsys (Chairman)
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
2002.
The Loan Committee, whose members include C. Edward Boutonnet
(Vice Chairman), Bradford G. Crandall (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 2002.
The Marketing Committee, whose members include Duncan L. McCarter
(Chairman), 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 eleven (11) times in 2002.
During 2002, the Corporation's Board of Directors held twelve (12)
meetings. 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 2002, the Bank's Board of Directors held twelve (12) meetings. The
aggregate total of all Corporation and Bank board and committee meetings held in
2002 was 151.
Compensation of Directors
The fees paid to directors during 2002 included a base fee of $2,050 per
month for attendance at Board meetings of the Corporation and the Bank. In
addition to the base fee, the Loan Committee Chairman received $200 per month,
the Chairmen of the Audit, 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 $205,000 in 2002.
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 2 and 3 list vested and
exercisable options granted to the outside directors under the 1994 Plan. As of
the Record Date, there were also 40,333 nonstatutory stock options outstanding
previously granted to the outside directors as a group at an exercise price of
$10.58 (adjusted for subsequent stock dividends and splits), which were not yet
exercisable.
EXECUTIVE OFFICERS
The following table sets forth names and certain information as of March
24, 2003, concerning the executive officers of the Corporation.
Corp-
orate Bank
Execu- Execu-
tive tive Principal Occupation
Name Age Since Since During Last Five Years
---- --- ----- ----- ----------------------
Nick 61 1994 1982 Chairman and Chief
Ventimiglia 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. 60 1994 1988 President of the
McCarthy 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. 63 1998 1998 Senior Vice President and
Stanberry 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. 42 1996 1996 Senior Vice President and
Blatter 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 COMPENSATION
Set forth below is the summary compensation paid or accrued during the
three years ended December 31, 2002 to Nick Ventimiglia, John 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
----------------------
Annual Compensation Awards Payouts
-------------------------------------- ----------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Name and Year Salary Bonus Other Restricted Securities LTIP All Other
Principal Position ($) 1/ ($) 2/ Annual Stock Underlying Payouts Compen-
Compensation Award(s) Options/ ($) sation
($) 3/ ($) SARs ($) 5/
(#) 4/
- ---------------------------------------------------------------------------------------------------------------------------------
Nick Ventimiglia, Chairman 2002 $ 255,000 $ 217,706 - - - - $2,750
and Chief Executive Officer, 2001 $ 255,000 $ 178,448 - - - - $2,625
Central Coast Bancorp 2000 $ 255,000 $ 173,250 - - 11,000 - $2,625
and Community Bank
- ---------------------------------------------------------------------------------------------------------------------------------
John F. McCarthy, 2002 $ 175,216 $ 141,383 - - - - $3,000
President and Chief 2001 $ 169,500 $ 116,261 - - - - $2,625
Operating Officer 2000 $ 165,500 $ 112,875 - - 8,250 - $2,625
- ---------------------------------------------------------------------------------------------------------------------------------
Robert M. Stanberry, Senior 2002 $ 131,121 $ 79,165 - - - - $3,000
Vice President, Chief 2001 $ 126,893 $ 64,890 - - - - $2,625
Financial Officer and Corporate 2000 $ 124,000 $ 63,000 - - 4,400 - $2,453
Secretary
- ---------------------------------------------------------------------------------------------------------------------------------
Robert C. Blatter, Senior 2002 $ 111,030 $ 79,165 - - - - $1,879
Vice President and Loan 2001 $ 107,450 $ 64,890 - - - - $2,625
Administrator 2000 $ 105,000 $ 63,000 - - 4,400 - $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 2002,
2001 and 2000.
3/ 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 2002, 2001 and 2000.
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 "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 Plan were either incentive options or non-statutory
options. Options granted under the 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. During 2002, there were no options granted to executive
officers Nick Ventimiglia, John F. McCarthy, Robert M. Stanberry and Robert
C. Blatter.
5/ Amounts shown for each named executive officer are 401(k) matching
contributions for the year indicated.
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 2002, 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, 2002 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, as amended.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
- ------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
at Fiscal Year-End at Fiscal Year-
Shares Value (#) End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable 1/
- ------------------------------------------------------------------------------------------------------------------
Nick Ventimiglia - - 103,124 / 4,991 $ 1,287,631 / $ 36,859
- ------------------------------------------------------------------------------------------------------------------
John F. McCarthy - - 41,912 / 3,743 $ 470,015 / $ 27,642
- ------------------------------------------------------------------------------------------------------------------
Robert M. Stanberry 4,812 $ 21,210 30,435 / 1,997 $ 259,650 / $ 14,743
- ------------------------------------------------------------------------------------------------------------------
Robert C. Blatter 21,187 $140,627 4,054 / 1,997 $ 29,934 / $ 14,743
- ------------------------------------------------------------------------------------------------------------------
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 Arrangements
The 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.
EQUITY COMPENSATION PLAN INFORMATION
The chart below lists information regarding common stock issuable upon the
exercise of stock options, the weighted average exercise price of those options
and the number of shares available for issuance under the Corporation's 1994
Stock Option Plan. The Corporation has no other equity compensation plan and
there are no warrants or other rights outstanding that would result in the
issuance of shares of the Corporation's common stock.
- ---------------------------------------------------------
Plan Category Number of Weighted-average Number of
securities exercise securities
to be issued price of remaining
upon outstanding available
exercise of options, for future
outstanding warrants and issuance
options, rights under equity
warrants and compensation
rights plans
(excluding
securities
reflected in
column (a))
(a) (b) (c)
- ---------------------------------------------------------
Equity
compensation 1,063,004 $6.72 1,922,075
plans
approved by
security
holders
- ---------------------------------------------------------
Equity
compensation -0- -0- -0-
plans not
approved by
security
holders
- ---------------------------------------------------------
Total 1,063,004 $6.72 1,922,075
- ---------------------------------------------------------
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The 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
2002, Messrs. Boutonnet, McCarter, Mraule, Souza and Thomas were members of the
Committee. Messrs. Ventimiglia, McCarthy, Stanberry and Blatter, served as
executive officers of the Corporation and/or the Bank during 2002.
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 2002, 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 2002). 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
- ------------------------- -----------------------
Louis A. Souza Mose E. Thomas, Jr.
AUDIT COMMITTEE REPORT
NOTWITHSTANDING 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, Duncan L. McCarter, Robert M. Mraule, and Mose E. Thomas,
Jr. Each of the members of the Committee is independent as defined
under the National Association of Securities Dealers' listing
standards. The Committee operates under a written charter adopted
by the Board of Directors.
The Committee's responsibilities include providing advice with respect to
the Corporation's financial matters and assisting the Board of Directors in
discharging its responsibilities regarding accounting, tax and legal compliance.
The Committee's primary responsibilities are to: (1) serve as an independent and
objective party to monitor the Corporation's financial reporting process and
internal control system; (2) review and evaluate the audit efforts of the
Corporation's independent accountants and internal auditors (BancAudit
Associates LLC); (3) evaluate the Corporation's quarterly financial performance
as well as its compliance with laws and regulations; (4) oversee management's
establishment and enforcement of financial policies and business practices; and
(5) facilitate communication among the independent accountants, financial and
senior management, the internal auditors and the Board of Directors.
The Committee has reviewed and discussed the audited financial statements
of the Corporation for the fiscal year ended December 31, 2002 with the
Corporation's management. The Committee has discussed with Deloitte & Touche
LLP, the Corporation's independent public accountants, the matters required to
be discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees). The Committee has also received the written disclosures and the
letter from Deloitte & Touche LLP required by Independence Standards Board
Standard No. 1 (Independence Discussion with Audit Committees) and the Committee
has discussed with Deloitte & Touche LLP their independence relative to the
Corporation.
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, 2002 for filing with the Securities and Exchange
Commission.
Sumitted by:
/s/ ALFRED P. GLOVER /s/ ROBERT M. MRAULE /s/ MICHAEL T. LAPSYS
- -------------------- ------------------------- ---------------------
Alfred P. Glover Robert M. Mraule, DDS, MD Michael T. Lapsys
/s/ DUNCAN L. MCCARTER /s/ MOSE E. THOMAS
- ---------------------- -------------------------
Duncan L. McCarter Mose E. Thomas, Jr.
COMPARISON OF CENTRAL COAST BANCORP SHAREHOLDER RETURN
Set 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, 1997 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 ommitted ]
Index 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
----------------------------------------------------------------------------------------------------
Central Coast Bancorp 100.00 107.26 109.98 131.05 161.29 181.05
S&P 500 100.00 129.03 156.28 142.38 125.58 97.72
Nasdaq Bank Stocks 100.00 99.36 95.51 108.95 117.97 120.61
Changes in Control
The 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.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, executive officers and ten percent or more shareholders
of the Corporation's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes of ownership of
the Corporation's equity securities. Officers, directors and ten percent or more
shareholders are required by SEC regulation to furnish the Corporation with
copies of all Section 16(a) forms they file. To the Corporation's knowledge,
based solely on review of the copies of such reports furnished to the
Corporation and written representations that no other reports were required,
during the fiscal year ended December 31, 2002, all Section 16(a) filing
requirements applicable to its executive officers, directors and beneficial
owners of ten percent or more of the Corporation's equity securities appear to
have been met.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
There have been no transactions, or series of similar transactions, during
2002, or any currently proposed transaction, or series of similar transactions,
to which the Corporation or the Bank was or is to be a party, in which the
amount involved exceeded or will exceed $60,000 and in which any director of the
Corporation or the Bank, executive officer of the Corporation or the Bank, any
shareholder owning of record or beneficially 5% or more of the Corporation's
Common Stock, or any member of the immediate family of any of the foregoing
persons, had, or will have, a direct or indirect material interest.
Certain Business Relationships
There were no business relationships during 2002 of the type requiring
disclosure under Item 404(b) of Regulation S-K.
Indebtedness of Management
The Corporation, through the Bank, has had, and expects in the future to
have banking transactions in the ordinary course of its business with many of
the Corporation's directors and officers and their associates, including
transactions with corporations of which such persons are directors, officers or
controlling shareholders, on substantially the same terms (including interest
rates and collateral) as those prevailing for comparable transactions with
others. Management believes that in 2002 such transactions comprising loans did
not involve more than the normal risk of collectibility or present other
unfavorable features. Loans to executive officers of the Corporation and the
Bank are subject to limitations as to amount and purposes prescribed in part by
the Federal Reserve Act, as amended, and the regulations of the Federal Deposit
Insurance Corporation.
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Deloitte & Touche LLP, certified public accountants,
served the Corporation as its independent public accountants and auditors for
the 2002 fiscal year at the direction of the Board of Directors of the
Corporation. Deloitte & Touche LLP has no interests, financial or otherwise, in
the Corporation. The services rendered by Deloitte & Touche LLP during the 2002
fiscal year were audit services, consultation in connection with various
accounting matters, and preparation of the Corporation's income tax returns. The
fees paid to Deloitte & Touche LLP for professional services during the 2002
fiscal year were as follows:
Audit Fees
The Corporation paid Deloitte & Touche LLP $247,000 during the 2002 fiscal
year for the audit of the Corporation's annual financial statements for the most
recent fiscal year and for reviews of the Corporation's financial statements
included in the Corporation's Form 10-Q filings for the 2002 fiscal year.
Financial Information Systems Design and Implementation Fees
No services were provided and no payments made for financial information
system design and implementation.
All Other Fees
The Corporation paid Deloitte & Touche LLP $21,000 during the 2002 fiscal
year for all other services rendered by Deloitte & Touche LLP to the
Corporation.
The Board of Directors of the Corporation approved each professional
service rendered by Deloitte & Touche LLP during the 2002 fiscal year and
considered whether the provision of such services is compatible with Deloitte &
Touche LLP maintaining its independence. It is anticipated that one of the
representatives of that firm will be present at the Meeting and will be able to
make a statement if they so desire and answer appropriate questions.
The Board of Directors has selected Deloitte & Touche LLP to serve as the
Corporation's independent public accountants for the year 2003 and recommends
that shareholders vote "FOR" the ratification of the appointment of Deloitte &
Touche LLP.
ANNUAL REPORT
The Annual Report of the Corporation containing audited financial
statements for the fiscal year ended December 31, 2002 is included in this
mailing to shareholders.
FORM 10-K
A 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 AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO
ROBERT M. STANBERRY, SECRETARY, CENTRAL COAST BANCORP, 301 MAIN STREET, SALINAS,
CALIFORNIA, 93901.
SHAREHOLDERS' PROPOSALS
Next year's Annual Meeting of Shareholders will be held on May 20, 2004.
The deadline for shareholders to submit proposals for inclusion in the Proxy
Statement and form of Proxy for the 2004 Annual Meeting of Shareholders is
December 24, 2003. 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 24, 2003 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 MATTERS
The 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 22, 2003
APPENDIX A
Audit Charter
ARTICLE 1
PURPOSE
The Audit Committee shall oversee the integrity of the financial reporting
process and internal controls of the Company/Bank (the Terms Company and Bank
refer to each entity jointly). The Audit Committee is responsible for the
selection, evaluation and replacement of independent and internal auditors. The
Committee shall confirm and assure the independence of the independent auditor
and the objectivity of the internal auditor. The Audit Committee shall monitor
the control environment of the Company/Bank and shall review the adequacy of
internal control systems, including internal audit activities, to ensure the
accuracy of financial reporting. The Audit Committee, working with management,
shall help ensure that the involvement of the Company's/Bank's internal auditor
in the audit of the Company's/Bank's entire financial reporting process is
appropriate and properly coordinated with the independent Auditor. Finally, the
Audit Committee shall foster a strong ethical climate within the Company/Bank
and maintain open channels of communication.
The Audit Committee shall report regularly to the Board of Directors of the
Company/Bank ("Board"). The Board and management shall ensure that the Audit
Committee has adequate resources and authority to discharge its responsibilities
and to act as informed, vigilant and effective overseers of the Company's/Bank's
financial reporting process and internal controls.
ARTICLE 2
DEFINITIONS
2.1 Affiliate: An "Affiliate" of the Company/Bank or of any other entity,
hereinafter acquired, shall mean an entity that directly or indirectly
controls, or is controlled by, or is under common control with, the
Company/Bank or the other entity, as the case maybe.
2.2 Audit Services: "Audit Services" is any work required to be
performed by an Independent Auditor or Internal Auditor.
2.3 Call Report: A "Call Report" for any period is the
consolidated Report of Condition and Income for the
Company/Bank.
2.4 Financial Reporting: The "Financial Reporting" of the Company/Bank is the
recording, processing, summarizing and presenting of financial data in
annual Financial Statements, interim Financial Statements and regulatory
reports.
2.5 Financial Statements: The "Financial Statements" of the Company/Bank are
the statements and accompanying footnotes that are intended to show the
financial position of the Company/Bank at a point in time, and the results
of operations and the cash flows of the Company/Bank, over a period of
time.
2.6 Governmental Entity: A "Governmental Entity" shall mean (1) any national
government, or political subdivision thereof or local jurisdiction therein;
or (2) any board, commission, department, division, organ, instrumentality,
court or agency of any entity described in (1) above, however constituted.
2.7 Independent Auditor: An "Independent Auditor" is any individual, including
an auditor, who performs or participates in providing Audit Services and
any accounting firm, including a corporation, proprietorship, partnership
or other business comprised of Independent Auditors providing Audit
Services.
2.8 Independent Director: An "Independent Director" of the Company/Bank is a
director of the Company/Bank who (1) is not and has not been an officer or
employee of the Company/Bank or any of its Affiliates within the preceding
3 years, (2) the Board has determined is independent of management of the
Company/Bank after considering whether (a) the director serves or has
served as a consultant, advisor, promoter, underwriter, legal counsel, or
trustee to the Company/Bank or any of its Affiliates; (b) the director is a
relative of an officer or other employee of the Company/Bank or any of its
Affiliates currently or in the past three years; (c) the director has
received compensation in excess of $60,000, except for board services,
retirement benefits or non-discretionary compensation; (d) a company
affiliated with the director has received or has made payments to/from the
Company/Bank in excess of 5% of gross revenues or $200k, whichever is more
in the past 3 years, and (e) the director is employed as executive of
another entity where any executive of the Company/Bank serves on that
entity's compensation committee.
ARTICLE 3
ORGANIZATION
3.1 Membership: The Audit Committee shall consist of not less than three (3)
independent directors who must be able to read and understand financial
statements. In addition, at least one member must have financial
sophistication. The Audit Committee may have one non-independent director
on the committee with Board approval and proxy disclosure if the board,
under exceptional and limited circumstances, determines that membership on
the committee by the individual is required by the best interests of the
corporation and its shareholders; however, a current employee, officer or
immediate family member is not permitted for any reason.
3.2 Appointment and Term: The Board of Directors shall appoint the members of
the Audit Committee at its annual meeting for a term of one year.
3.3 Chairperson: The Chairperson of the Audit Committee shall be appointed by
the Board of Directors of the Company/Bank from among the members of the
Audit Committee. The Chairperson of the Audit Committee shall preside at
all meetings of the Audit Committee and shall perform such other duties as
may be assigned by the Board of Directors from time to time.
3.4 Removal: Except as provided in this paragraph, a member of the Audit
Committee may be removed from the Audit Committee upon the vote of a
majority of the Board. Any member of the Audit Committee, effective as of
the date such member ceases to be a member of the Board, shall also cease
to be a member of the Audit Committee. The Board shall remove from the
Audit Committee:
(a) Any member who the Board determines has breached such member's
obligations under the Company's/Bank's Code of Ethics and
Statement of Responsibilities;
(b) Any member who fails to attend a minimum of seventy-five percent
(75%) of all general and special meetings of the Audit Committee,
such determination to be made on an annual basis at the
Organizational meetings of the Company/Bank;
(c) Any member who has been convicted of a felony or who has
engaged in any dishonest or fraudulent activity, as
determined by a Court of competent jurisdiction;
(d) Any member who has grossly abused such member's authority as an
Audit Committee member and/or Board member of the Company/Bank, as
determined by the Board; or
(e) Any member who has been declared of unsound mind.
3.5 Resignation: Any member of the Audit Committee may resign effective upon
giving written notice to the Chairperson of the Board of Directors unless
the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a later time, a successor
may be appointed to fill the vacancy on the Audit Committee when the
resignation becomes effective.
3.6 Vacancies: All vacancies on the Audit Committee, however created, may be
filled by a majority vote of the Board of Directors, and each member of the
Audit Committee so appointed shall hold office until the expiration of the
term for which appointed and until a successor is appointed and qualified.
3.7 Regular Meetings: Regular meetings of the Audit Committee shall be held at
least quarterly during each fiscal year of the Company/Bank at such time
and place as the Audit Committee by resolution shall determine. The Audit
Committee shall meet prior to the commencement of the annual audit by the
Company's/Bank's Independent Auditor to review the scope and approach of
the annual audit and at the conclusion thereof review such audit, including
any comments or recommendations of the independent auditors. The Audit
Committee may provide for other regular meetings of the Audit Committee by
resolution. Regular meetings of the Audit Committee may be held without
notice.
3.8 Special Meetings: Special meetings of the Audit Committee may be called at
any time by the Chairperson of the Audit Committee, any two members
thereof, the Chairperson of the Board of Directors or a majority of the
Board of Directors. Special meetings may be held upon four (4) days' notice
by mail or twenty-four (24) hours' notice delivered personally or by
telephone, facsimile or telegraph.
3.9 Voting: A majority of the Audit Committee members shall constitute a quorum
for the transaction of business. Every action consented to by a majority of
the Audit Committee members present at a meeting (at which a quorum is
present) shall be regarded as an act of the Audit Committee.
3.10 Minutes: The Audit Committee shall maintain minutes and other relevant
records of its meetings and activities. Such minutes shall be made
available for review by the Board of Directors, and by bank regulatory
agencies.
3.11 Telephone Conference Meetings: Members of the Audit Committee may
participate in a meeting through the use of conference telephone or similar
communication equipment, so long as all members participating in such
meetings can hear one another. Participation in a meeting pursuant to this
Section will be recorded in the minutes and will constitute presence in
person at such meeting.
3.12 Access to Counsel: The Audit Committee may retain its own outside counsel,
to be paid at the expense of the Company/Bank, at its discretion and
without the prior permission or approval of the Board of Directors or the
management of the Company/Bank.
3.13 Authority to meet with Auditors: The Audit Committee shall have the
authority without obtaining the permission of the Board of Directors of the
Company/Bank to meet at any time with the Company's/Bank's Independent
Auditor or any of the Company's/Bank's internal audit personnel without
including any of the other members or representatives of the management of
the Company/Bank in such meeting.
3.14 Internal Auditor:
(a) Audit Committee Appointment of an Internal Auditor. The Audit Committee
shall appoint the Company's/Bank's Internal Auditor, who shall serve at
the pleasure of the Audit Committee, and who shall report on all
matters directly to the Chairperson of the Audit Committee. The Audit
Committee shall be responsible for overseeing and maintaining the
independence of the Internal Auditor. The Company's/Bank's Internal
Auditor shall meet with the Audit Committee on a regular basis, attend
meetings of the Audit Committee and report regularly on the activities
of the Company's/Bank's internal auditing personnel. The internal
auditor shall be accountable to the Audit Committee and the Board of
Directors.
(b) Internal Auditor Relationship with Company/Bank Management. The
Internal Auditor shall be available to the Chief Executive Officer and
other officers of the Company/Bank for opinions and advice concerning
the Company's/Bank's internal controls. In particular, the Internal
Auditor shall advise the Chief Executive Officer and other officers of
the Company/Bank as to whether the Company's/Bank's accounting systems,
internal controls, and policies and procedures are adequate, efficient,
effective, and followed by Company/Bank personnel. The Internal
Auditor's performance under this paragraph with respect to the
Company's/Bank's management periodically shall be reviewed by the Chief
Executive Officer and shall be part of the Internal Auditor's annual
performance review.
3.15 Amendments:
(a) General. This charter of the Audit Committee may be amended only by a
resolution adopted by a majority of the Outside Directors (whether or
not constituting a quorum of the entire Board of Directors).
(b) Compliance with Rules issued by Regulatory Agencies. It is the intent
of the Board of Directors that this Audit Committee Charter complies
with applicable legal rules, including rules and guidelines of the
Federal Deposit Insurance Corporation, the Federal Reserve Board, the
Securities and Exchange Commission and the NASDAQ Stock Exchange. It is
also the intent of the Board of Directors to amend this Charter, from
time to time, to comply with changes in applicable law including
changes in the final rules and guidelines of the organizations listed
above.
ARTICLE 4
DUTIES AND RESPONSIBILITIES
4.1 Duties and Responsibilities: The duties and responsibilities
of the Audit Committee shall include the following:
a) Review of Reports. The Audit Committee shall review with management and
the Independent Auditor, quarterly interim financial information. The
Committee shall review and discuss the audited annual financial
statements with management and the independent auditors and recommend
to the board of directors inclusion of such statements in the annual
report on Form10-K. The Audit Committee shall inquire as to the
independent auditors qualitative judgments about the appropriateness,
not just the acceptability of the accounting principles and the clarity
of the financial disclosure practices used or proposed to be adopted by
the Company/Bank.
b) Approval Selection and Termination of Independent Auditor. The Audit
Committee shall approve the selection and termination of the
Company's/Bank's Independent Auditor. The Audit Committee shall arrange
for pre-filing independent accountant's review of quarterly interim
financial statements and for an audit of the annual financial
statements. Prior to the commencement of any proposed audit of the
Company's/Bank's financial records or Financial Reporting by the
Independent Auditor, the Audit Committee shall review and approve the
scope and approach of the proposed audit. The Audit Committee shall
confirm and assure the independence of the independent auditor.
c) Review of Adjustments, Suggestions, and Disagreements. The Audit
Committee shall review all significant adjustments to the
Company's/Bank's Financial Statements suggested by the Company's/Bank's
Independent Auditor and address all significant disagreements between
the Independent Auditor and the management of the Company/Bank. The
management of the Company/Bank shall advise the Audit Committee of any
significant accounting issue on which it seeks to obtain an opinion
from any auditor other than the Company's/Bank's Independent Auditor or
by any Governmental Entity for improvements to the Company's/Bank's
internal financial controls or Financial Reporting practices and
procedures.
d) Oversight of Internal Accounting Controls. The Audit Committee shall
review the adequacy of the Company's/Bank's systems and procedures of
internal accounting controls over Financial Reporting. The Audit
Committee shall review the handling by the Company's/Bank's management
of any material inadequacies or reportable conditions identified by the
Company's/Bank's internal auditing personnel or Independent Auditor in
the systems and procedures of internal accounting records.
e) Evaluation of Internal Audit Function. The Audit Committee shall from
time to time, and at least quarterly, evaluate the activities,
organizational structure, qualifications, utilization and effectiveness
of the Company's/Bank's internal auditing personnel. The Audit
Committee shall review with management and the Internal Auditor their
assessments of the adequacy of internal controls, including identified
material weakness in internal controls. The Audit Committee shall
review with management and with the Internal Auditor measures for
detection and prevention of management override or compromise of the
internal control system. Finally, the Audit Committee shall work with
management and the Internal Auditor to assure comprehensive coverage of
the Company's/Bank's operations by audits.
f) Oversight of Internal Credit Review Process. The Audit Committee shall
review the adequacy of the Company's/Bank's internal credit review
process. The Audit Committee may at its discretion obtain assistance in
conducting such review from one or more outside consultants selected by
the Audit Committee whose fees, if any, shall be paid by the
Company/Bank with, however, the prior permission of the Board.
g) Duties Provided for Under Applicable Law. The Audit Committee
shall have all such other duties and responsibilities
specifically provided for as audit committee
responsibilities under applicable law.
h) Compliance with Banking Regulations and Accounting Standards. The Audit
Committee shall ensure the Company's/Bank's compliance with all
applicable banking regulations and accounting rules, as such
regulations and rules relate to any of the duties and responsibilities.
i) Annual Reporting to Shareholders. The Audit committee shall
report annually in the proxy statement the following:
o the Audit committee's review and discussion of the financial
statements with management;
o the Audit committee's discussion with the independent auditors
of the written independence disclosures required by
Independence Standards Board Statement No. 1; and
o the audit Committee's recommendation to the Board of Directors
that the audited financial statements be included in the Company's
annual report on Form 10K.
4.2 Access to Corporate Resources: The Audit Committee shall at all times have
access to resources of the Company/Bank, including personnel and electronic
computing or data processing support (subject to the constraints of the
annual operating budget approved by the Board), which the Audit Committee
may deem necessary to enable the Audit Committee to perform its duties and
responsibilities as set forth in this Article 4.
CENTRAL COAST BANCORP
Solicited by the Board of Directors
for the Annual Meeting of Shareholders
on May 22, 2003
THIS PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
The undersigned holder of common stock acknowledges receipt of a copy of the
notice of annual meeting of shareholders of Central Coast Bancorp and the
accompanying proxy statement dated April 22, 2003, and revoking any proxy
heretofore given, hereby constitutes and appoints C. Edward Boutonnet and
Nick Ventimiglia, and each of them, with full power of substitution, as
attorneys and proxies to appear and vote all of the shares of common stock of
Central Coast Bancorp, a California corporation, outstanding in the name of
the undersigned which the undersigned could vote if personally present and
acting at the Annual Meeting of Shareholders of Central Coast Bancorp, to be
held at 301 Main Street, Salinas, California, on Thursday, May 22, 2003, at
5:30 p.m. or at any postponements or adjournments thereof, upon the following
items as set forth in the notice of meeting and proxy statement and to vote
according to their discretion on all matters which may be properly presented
for action at the meeting or any postponements or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2 SET
FORTH ON THE REVERSE SIDE. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS
DIRECTED, IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" PROPOSALS 1
AND 2 SET FORTH ON REVERSE SIDE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
ANNUAL MEETING OF SHAREHOLDERS OF
CENTRAL COAST BANCORP
MAY 22, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach and mail in the envelope provided.
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THE BOARD OF DIRECTOS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS
SHOWN HERE [X]
1. To elect as Class II directors of Central Coast Bancorp, FOR AGAINST ABSTAIN
management's nominees set forth below to serve for a 2. To ratify the appointment of Deloitte & [ ] [ ] [ ]
three year term until the 2006 annual meeting of Touche LLP as independent public
shareholders and until their successors are duly accountants for the 2003 fiscal year.
elected and qualified.
Nominees
[ ] FOR ALL DIRECTORS [ ] Michael T. Lapsys The proxyholders will vote according to their discretion on all other
[ ] Duncan L. McCarter matters which may properly be presented for action at the Meeting.
[ ] WITHHOLD AUTHORITY [ ] Nick Ventimiglia
FOR ALL NOMINEES 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" PROPOSAL NO. 2. 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
BOARD OF DIRECTORS AND "FOR" PROPOSAL NO. 2.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING,
INSTRUCTION: To withhold authority to vote for any PLEASE DATE, SIGN AND RETURN THIS PROXY AS PROMPTLY
individual nominee, mark "FOR ALL EXCEPT" and fill AS POSSIBLE IN THE ENCLOSED POSTAGE PAID ENVELOPE.
in the circle next to each nominee you wish to
withhold, as show here:[X]
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:
------------------------ ----------- ------------------------ ----------
Note: This proxy must be signed exactly as the name appears hereon. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.