WEST COAST BANCORP
4770 Campus Drive, Suite 100
Newport Beach, California 92660-1833
-----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 24, 1994
------------------------------
TO THE SHAREHOLDERS OF WEST COAST BANCORP:
NOTICE IS HEREBY GIVEN that, pursuant to its Bylaws and the call of its
Board of Directors, the Annual Meeting of Shareholders (the "Meeting") of West
Coast Bancorp, a California corporation (the "Company"), will be held on
Tuesday, May 24, 1994, at 9:00 a.m. at the Red Lion Hotel, 3050 Bristol Street,
Costa Mesa, California 92626, for the following purposes all as set forth in the
attached Proxy Statement:
1. ELECTION OF DIRECTORS. To elect seven persons to the Board of
Directors to serve until the 1995 Annual Meeting of Shareholders and
until their successors have been elected and qualified. The following
seven persons are the Board of Directors' nominees:
J. David Cheshier John B. Joseph
I. Jack Cowley, M.D. Lacy G. Marlette, Jr.
L. Wayne Gertmenian, Ph.D. Ronald R. White
Thomas A. Jones, C.P.A.
2. OTHER BUSINESS. To transact such other business as may properly come
before the Meeting and at any and all adjournments thereof.
Only those shareholders of record at the close of business on April 15, 1994
shall be entitled to notice of, and to vote in person or by Proxy at, the
Meeting. As set forth in the enclosed Proxy statement, the Proxy is solicited
by the Board of Directors of the Company. It is expected that this Notice of
Proxy and accompanying Proxy Statement will be mailed to shareholders on or
about April 29, 1994.
By Order of the Board of Directors
Frank E. Smith, Secretary
April 29, 1994
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE. WE URGE YOU TO SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN
WITHDRAW YOUR PROXY AND VOTE IN PERSON. IN ORDER TO FACILITATE THE PROVIDING OF
ADEQUATE ACCOMMODATIONS, PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING.
- --------------------------------------------------------------------------------
WEST COAST BANCORP
4770 Campus Drive, Suite 100
Newport Beach, California 92660-1833
(714) 757-6868
------------------------------
PROXY STATEMENT
------------------------------
ANNUAL MEETING OF SHAREHOLDERS
May 24, 1994
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the Annual Meeting of Shareholders (the "Meeting") by the
Board of Directors of West Coast Bancorp a California Corporation (the
"Company") to be held on Tuesday, May 24, 1994, at 9:00 a.m. at the Red Lion
Hotel, 3050 Bristol Street, Costa Mesa, California 92626 and at any and all
adjournments thereof. J. David Cheshier and Lacy G. Marlette, Jr., the
designated proxy holders, are members of the Company's Board of Directors. It
is expected that this Proxy Statement and the accompanying Notice of Proxy will
be mailed to shareholders on or about April 29, 1994. Only shareholders of
record on April 15, 1994 are entitled to vote in person or by proxy at the
meeting or any adjournment thereof.
MATTERS TO BE CONSIDERED
The matters to be considered and voted upon at the Meeting will be:
1. ELECTION OF DIRECTORS. To elect seven persons to the Board
of Directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected and have
qualified.
2. OTHER BUSINESS. To transact such other business as may
properly come before the Meeting and at any and all
adjournments thereof.
COST OF SOLICITATION OF PROXIES
The Company will bear the costs of this solicitation, including the expense
of preparing, assembling, printing and mailing this Proxy Statement and the
material used in this solicitation of Proxies. It is contemplated that Proxies
will be solicited principally through the mails, but directors, officers and
regular employees of the Company may solicit Proxies personally or by telephone.
Although there is no formal agreement to do so, the Company may reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
out-of-pocket expenses in connection with forwarding these Proxy materials to
their principals. In addition, the Company has retained McCormick & Pryor Ltd.
to assist in the solicitation of Proxies for the fee of $3,500, plus
reimbursement of reasonable out-of-pocket expenses incurred in connection with
the solicitation.
OUTSTANDING SECURITIES, VOTING RIGHTS AND REVOCABILITY OF PROXIES
There were issued and outstanding 9,192,942 shares of the Company's common
stock, no par value per share ("common stock"), on April 15, 1994, which has
been set as the record date for the purpose of determining the shareholders
entitled to notice of, and to vote at, the Meeting.
Each holder of common stock will be entitled to one vote, in person or by
Proxy, for each share of common stock outstanding in his or her name on the
books of the Company as of the record date for the Meeting on any matter
submitted to the vote of the shareholders, except that in connection with the
election of directors, the shares are entitled to be voted cumulatively if a
shareholder present at the Meeting has given notice at the Meeting prior to the
voting of his or her intention to vote his or her shares cumulatively. If any
shareholder has given such notice, all shareholders may cumulate their votes for
candidates in nomination. Cumulative voting entitles a shareholder to give one
nominee as many votes as is equal to the number of directors to be elected,
multiplied by the number of shares owned by such shareholder, or to distribute
his or her votes on the same principle between two or more nominees as he or she
sees fit.
In the election of directors, if a quorum is present, the seven candidates
receiving the highest number of votes are elected; votes withheld and broker
non-votes have no legal effect but will have the practical effect of voting
against the nominee. Discretionary authority to cumulate votes is hereby
solicited by the Board of Directors, and return of an executed Proxy shall be
the grant of such authority.
With respect to any other matter presented at the Meeting, if a quorum is
present, the approval of such matter would require (i) the affirmative vote of a
majority of the shares represented and voting at the Meeting and (ii) the
affirmative vote of at least a majority of the required quorum. Abstentions
from voting and broker non-votes would have no effect on the outcome of the vote
with respect to the first test since they are not deemed to be shares
represented and voting at the Meeting and would have the effect of a vote
against the proposal with respect to the second test since they would not
constitute affirmative votes for such matter.
If you hold your common stock in "street name" and you fail to instruct
your broker or nominee as to how to vote such shares of common stock, your
broker or nominee may, in its discretion, vote your shares "For" the election of
the nominees for directors set forth herein.
A Proxy for use at the Meeting is enclosed. Any shareholder who executes
and delivers such Proxy has the right to revoke it at any time before it is
exercised by filing with the Secretary of the Company an instrument revoking it
or a duly executed Proxy bearing a later date. It may also be revoked by
attendance at the Meeting and election to vote thereat. Subject to such
revocation, all shares represented by a properly executed Proxy received prior
to or at the time of the Meeting will be voted by Proxy Holders in accordance
with the instructions on the Proxy. If no instruction is specified in respect
to a matter to be acted upon, the shares represented by the Proxy will be voted
"For" the election of the nominees for directors set forth herein. It is not
anticipated that any matters will be presented at the Meeting other than as set
forth in the accompanying Notice of Meeting. If, however, any other matters are
properly presented at the Meeting, the Proxy will be voted in accordance with
the best judgment and in the discretion of the Proxy Holders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth, as of April 15, 1994, the common stock ownership
of each director and executive officer of the Company individually, all
directors and executive officers as a group, and each person known by the
Company to be the beneficial owner of more than 5% of the Company's common stock
<TABLE>
<CAPTION>
Shares
Relationship Shares That Total Percent
Name of With Actually May Be Beneficial of
Beneficial Owner Company Owned(a) Acquired(b)Ownership(a)Class(c)
<S> <C> <C> <C> <C> <C>
John B. Joseph(d) Chairman of 899,090 159,931(e) 1,059,021 11.3%
the Board,
President
and CEO
Ronald R. White(d) Vice Chairman 792,189 99,876(e) 892,065 9.6%
of the Board
and Executive
Vice President
J. David Cheshier Director 2,000 30,000(f) 32,000 *
I. Jack Cowley Director - 12,000(f) 12,000 *
L. Wayne Gertmenian Director 6,765 12,000(f) 18,765 *
Thomas A. Jones Director 4,300 15,000(f) 19,300 *
Lacy G. Marlette, Jr. Director 212 30,000(f) 30,212 *
James G. LeSieur, III President, - 19,000(f) 19,000 *
Sunwest Bank
John F. McGrath President, - 24,000(f) 24,000 *
Sacramento First
National Bank
William J. Mylymok Administrative 24,000 94,500(f) 118,500 1.3%
Consultant,
Company
Frank E. Smith CFO, Company 8,100 31,379(e) 39,479 *
and Sunwest
Bank
Directors and Executive 1,736,656 527,686(e) 2,264,342 23.3%
Officers (11 individuals)
<FN>
* Less than 1%
(a) Except as otherwise noted below, each person has sole voting and investment power with respect to the shares listed.
(b) Shares that may be acquired within 60 days of April 15, 1994.
(c) The percentage ownership interest of each individual or group is based upon the total number of shares of the Company's common
stock outstanding plus the shares which the respective individual or group has the right to acquire within 60 days after April
15, 1994 through the exercise of stock options or conversion of 10% convertible subordinated debentures due 1996.
(d) The address of Messrs. Joseph and White is in care of the Company, 4770 Campus Drive, Suite 100, Newport Beach, California
92660-1833.
(e) Shares that may be acquired pursuant to the exercise of stock options or conversion of 10% convertible subordinated debentures.
(f) Shares that may be acquired pursuant to the exercise of stock options.
</TABLE> <PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Election of Directors
The Bylaws of the Company provide that the Company shall have not less than
five nor more than nine directors, unless changed by a bylaw amending Section
3.3(b) of Article 3 of the Company's Bylaws, duly adopted by the vote or written
consent of the Company's shareholders. The Bylaws further provide that the
exact number of directors shall be fixed from time to time, within the foregoing
range, by a bylaw or amendment thereof or a resolution duly adopted by the Board
of Directors or by the shareholders. The number of directors is currently fixed
at seven.
The individuals named below, all of whom are present members of the Board
of Directors of the Company, will be nominated for election to serve until the
next Annual Meeting of Shareholders and until their successors have been elected
and qualified. Votes will be cast pursuant to the enclosed Proxy in such a way
as to effect the election of said nominees, or as many thereof as possible,
under applicable voting rules. In the event that any of the nominees should be
unable or unwilling to accept nomination for election as a director, it is
intended that the Proxy Holders will vote for the election of such substitute
nominees, if any, as shall be designated by the Board of Directors. The Board
of Directors has no reason to believe that any nominee will be unable or
unwilling to serve if elected to office.
None of the directors or executive officers were selected pursuant to any
arrangement or understanding, other than with the directors and executive
officers of the Company acting within their capacity as such. There are no
family relationships among directors or executive officers of the Company as of
the date hereof.
The following table sets forth certain information, as of April 15, 1994,
with respect to those individuals who are to be nominated by the Board of
Directors for election as directors.
Year First
Elected or Position
Appointed as with the
Name of Director Age Director Company
John B. Joseph 55 1981 Chairman of the
Board, President
and CEO
Ronald R. White 47 1981 Vice Chairman of
the Board and
Executive
Vice President
I. Jack Cowley, M.D. 62 1991 Director
J. David Cheshier 47 1981 Director
L. Wayne Gertmenian, Ph.D. 54 1991 Director
Thomas A. Jones, C.P.A. 55 1990 Director
Lacy G. Marlette, Jr. 47 1987 Director
John B. Joseph is currently the Chairman of the Board, President and Chief
Executive Officer of the Company. He has been Chairman of the Board of
Directors of the Company since its inception in 1981 and Chief Executive Officer
since April 1991. Mr. Joseph also serves, or has served, in the following
capacities during the past five years: President of the Company from 1987 to
April 1991 and from April 1993; Vice Chairman of the Board of Directors of The
Centennial Group, Inc., a Delaware corporation ("CGI"), since 1987; Senior
Executive Vice President of CGI from July 1987 to July 1993; general partner of
various limited partnerships engaged in real estate development and lending
activities. Mr. Joseph presently holds and has held, over the past five years,
various positions in the subsidiaries of the Company. Mr. Joseph is a director
of the Company's subsidiaries Sunwest Bank, Sacramento First National Bank and
WCV, Inc. (formerly Heritage Thrift & Loan Association). Mr. Joseph presently
holds and has held, over the past five years up until July 1993, various
positions in the subsidiaries of CGI. Mr. Joseph beneficially owns
approximately 13% of the outstanding common stock of CGI.
Ronald R. White is currently Executive Vice President and Vice Chairman of
the Board of Directors of the Company. Mr. White also serves, or has served, in
the following capacities during the past five years: Chairman of the Board of
Directors, President and Chief Executive Officer of CGI since 1987; general
partner of various limited partnerships engaged in real estate development and
lending activities. Mr. White is a director of Sunwest Bank and WCV, Inc. Mr.
White presently holds and has held, over the past five years, various positions
in the subsidiaries of the Company and CGI. Mr. White beneficially owns
approximately 13% of the outstanding common stock of CGI.
J. David Cheshier is a certified public accountant in the employ of L.G.
Marlette, Jr. Accountancy Corporation, Certified Public Accountants. Mr.
Cheshier has served as a director, Senior Vice President and the Chief
Financial Officer of CGI and as an executive officer of all of the subsidiaries
of CGI from 1987. Mr. Cheshier resigned his officer positions at CGI and its
subsidiaries during December 1993 and his director position during March 1994.
I. Jack Cowley, M.D., has served as Chairman of the Board of Directors of
Sacramento First National Bank, a subsidiary of the Company, since 1984. Dr.
Cowley has maintained an ophthalmic practice in Sacramento since 1965. He is on
the clinical teaching staff of the University of California, Davis. Dr. Cowley
has served on the Board of the International Brangus Association since 1980 and
is currently President of the California Beef Improvement Association.
L. Wayne Gertmenian, Ph.D., is an economics professor at Pepperdine
University's Graduate School of Business and serves as its spokesman on business
and management. Dr. Gertmenian served the Nixon and Ford administrations as a
Chief Detente Negotiator in Moscow for the Chairman of the National Security
Council; as an emissary to Tehran for the Secretary of Commerce; and as a
Special Assistant to the Secretary of Housing and Urban Development. His
corporate experience includes five years as the Executive Vice President of one
of the nation's leading food processors. Dr. Gertmenian received his Doctorate
in Economics at the University of Southern California.
Thomas A. Jones, C.P.A., is a professor of accounting and business at DeVry
Institute of Technology. Mr. Jones was the President of R&G Sloane, a
manufacturer of plastic piping products, from 1988 to 1990 when R&G Sloane was
acquired. Mr. Jones served as a Group Executive with ITT Corporation from 1980
to 1988.
Lacy G. Marlette, Jr. is a certified public accountant and President of
L.G. Marlette, Jr., Accountancy Corporation, Certified Public Accountants. Mr.
Marlette has been a certified public accountant since 1972. He has provided
accounting services for Messrs. Joseph and White and their affiliates.
On December 13, 1991, a petition under Chapter 11 of the Federal bankruptcy
laws was filed on behalf of CGI. On March 4, 1994, a reorganization plan was
confirmed, and as a consequence, CGI is no longer operating under the Federal
bankruptcy laws. Messrs. Joseph and White are directors of and principal
shareholders of CGI. Mr. White is an executive officer of CGI.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company presently has four committees, an
Audit Committee, a Human Resources/Compensation Committee, an Asset and
Liability Management Committee and a Compliance Committee. The Company does not
have a standing Nominating Committee.
The Audit Committee, which held five meetings in 1993, is comprised of
Messrs. Cheshier, Cowley, Jones, Marlette and Gertmenian. The purpose of the
Audit Committee, among other things, is to oversee the Company's internal
controls and financial information reporting and to review the results of the
independent audit.
The Human Resources/Compensation Committee, which held six meetings in
1993, is comprised of all of the directors. The purpose of the Human
Resources/Compensation Committee is to coordinate management succession,
incentive compensation and all other employee benefits.
The Asset and Liability Management Committee, which held five meetings in
1993, is comprised of Messrs. Cheshier, Jones and Marlette. The purpose of the
Asset and Liability Management Committee is to oversee the Company's liquidity
and interest rate risk.
The Compliance Committee, which held five meetings in 1993, is comprised of
all of the directors. The purpose of the Compliance Committee is to oversee the
Company's regulatory compliance.
During 1993, the Board of Directors of the Company held fourteen meetings.
Each of the individuals who is a nominee and was a director of the Company
during 1993 attended at least 75% of the aggregate of (1) the total number of
Board meetings held during his term of service and (2) the total number of
meetings held by all committees of the Board on which he served during such
year.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% shareholders are required by
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on the review of the copies of such forms furnished to the
Company, or a written representation that no Form 5 was required, the Company
believes that, during the fiscal year ended December 31, 1993, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% shareholders were complied with.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the four other executive officers of the
Company (determined as of the end of the last fiscal year) (the "Named
Executives") for each of the fiscal years ended December 31, 1993, 1992 and
1991:
SUMMARY COMPENSATION TABLE
Annual Compensation
Long-Term
Compensation/
Securities
Underlying
Name and Salary Bonus Other Options Other
Principal Position Year ($) ($) ($) (#)(a) ($)(b)
- --------------------------------------------------------------------------------
JOHN B. JOSEPH(c) 1993 185,000 - - - 35,000
President and CEO, 1992 189,000 - - 15,000 35,000
Company 1991 131,000 - - 25,000 28,000
Officer, Company
JAMES G. LeSIEUR, III(d) 1993 181,000 - - - 2,000
President and CEO, 1992 183,000 - - - 4,000
Sunwest Bank 1991 172,000 - - 15,000 4,000
JOHN F. MCGRATH(e) 1993 130,000 - 16,000 - 3,000
President and CEO, 1992 120,000 23,000 16,000 - 2,000
Sacramento First 1991 115,000 28,000 16,000 15,000 2,000
National Bank
WILLIAM J. MYLYMOK(f) 1993 322,000 - 25,000 - 16,000
Administrative 1992 375,000 - - - 16,000
Consultant, Company 1991 301,000 - - 35,000 10,000
FRANK E. SMITH(g) 1993 130,000 - 28,000 - 4,000
Senior Vice President, 1992 131,000 - - 15,000 4,000
CFO and Secretary, 1991 113,000 27,000 - 15,000 4,000
Company and Sunwest Bank
(a) Includes options issued by the Company to purchase shares of the Company's
common stock.
(b) Includes directors' fees and amounts contributed by the Company and its
subsidiaries to the West Coast Bancorp 401(k) Profit Sharing Plan and
allocated to the Named Executives vested or unvested account under such
plan ("401(k) matching contributions").
(c) Mr. Joseph's salary was paid by the Company. Other compensation includes
director's fees of $16,000, $17,000 and $16,000 paid by the Company,
director's fees of $11,000, $9,000 and $4,000 paid by Sunwest Bank, $4,000,
$3,000 and $2,000 paid by Sacramento First National Bank, director's fees
of $0, $3,000 and $3,000 paid by WCV, Inc. and 401(k) matching
contributions of $4,000, $4,000 and $4,000 paid by the Company in 1993,
1992 and 1991, respectively.
(d) Mr. LeSieur's salary and 401(k) matching contributions were paid by Sunwest
Bank.
(e) Mr. McGrath's salary, bonus, other annual compensation and 401(k) matching
contributions were made by Sacramento First National Bank. Other annual
compensation represents perquisites provided by Sacramento First National
Bank which include the use of a company automobile valued at approximately
$10,000 for each year presented.
(f) Mr. Mylymok's salary was paid by the Company and, for 1993, includes
$150,000 due to Mr. Mylymok after April 1, 1995 pursuant to his modified
employment agreement and $24,000 representing 24,000 shares of the
Company's common stock granted to Mr. Mylymok pursuant to his modified
employment agreement. Other annual compensation in 1993 includes $25,000
of salary deferred at the option of Mr. Mylymok. Other compensation
includes director's fees of $11,000, $9,000 and $3,000 paid by Sunwest
Bank and director's fees of $2,000, $3,000 and $3,000 paid by WCV, Inc. and
401(k) matching contributions of $4,000, $4,000 and $4,000 in 1993, 1992
and 1991, respectively.
(g) Mr. Smith's 1993 salary included $21,000 paid by the Company and $109,000
paid by Sunwest Bank. Mr. Smith's 1992 and 1991 salary and 1991 bonus was
paid by the Company. During 1993, Mr. Smith assumed the responsibility of
Chief Financial Officer of Sunwest Bank, and Sunwest Bank began paying his
salary. In conjunction with this change, the Company paid Mr. Smith
$28,000 in accrued vacation and holiday benefits, included in other annual
compensation. Other compensation includes the 401(k) matching contribution
of $4,000 in 1993 paid by Sunwest Bank and $4,000 in 1992 and $4,000 in
1991 paid by the Company.
EMPLOYMENT AND TERMINATION OF EMPLOYMENT AGREEMENTS
Although Mr. Joseph does not have a formal employment agreement, his annual
base salary was reduced to $73,000 effective March 1, 1994. He may receive
bonuses of $70,000 upon the completion of a rights offering or the sale of
Sacramento First National Bank and $45,000 at such time that Sunwest Bank
achieves a leverage ratio of 6.5%.
Mr. McGrath has an employment agreement with Sacramento First National
Bank, which expires December 31, 1995, pursuant to which Mr. McGrath receives a
base salary of $135,000 during 1994 and $140,000 during 1995 and a discretionary
bonus up to 15% of Sacramento First National Bank's annual net profits if the
bank achieves net profits of at least 50% of its planned net profits for the
year. Mr. McGrath is also entitled to severance pay equal to his base annual
salary plus a pro rata bonus and 12 months of medical and life insurance
benefits in the event of termination without cause. Additionally, the agreement
provides for four weeks of vacation during each calendar year, use of an
automobile, life and medical insurance benefits and certain club memberships.
Although Mr. Mylymok has an employment agreement pursuant to which he
served as President and Chief Operating Officer of the Company during 1992, this
agreement was modified effective April 1, 1993. Pursuant to the modified
agreement, Mr. Mylymok resigned from his position as President and Chief
Operating Officer of the Company and continues to serve as an employee of the
Company in the capacity of Administrative Consultant through March 31, 1995.
During the two-year term of this modified agreement, Mr. Mylymok will receive an
annual salary of $150,000, which salary shall be subject to reduction for any
amount earned during the term of the modified agreement from employment with an
unaffiliated company. Mr. Mylymok will also be entitled to receive additional
compensation equal to 50% of the recoveries made during the term of the modified
agreement on charged-off loans originated by the Company or certain of its
subsidiaries up to a maximum of $150,000 due after April 1, 1995. Pursuant to
the revised agreement, Mr. Mylymok received 24,000 shares of the Company's stock
during 1993. The revised agreement provides for the use of a Company's leased
automobile until January 31, 1995, at which time the ownership of this vehicle
will be transferred to Mr. Mylymok.
STOCK OPTIONS
No stock options were granted to the Named Executives during 1993.
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the Named
Executives concerning the exercise of options during the fiscal year ended
December 31, 1993 and unexercised options held by the Named Executives as of
December 31, 1993:
AGGREGATED OPTION(A) EXERCISES IN FISCAL YEAR 1993
AND FY-END OPTION VALUES
Value of
Shares Number of Unexercised In-
Acquired Unexercised Options the-Money Options
on Value at 12/31/93 (#) 12/31/93 ($)(b)
Exercise Realized Exer- Unexer- Exer- Unexer-
Name (#) ($) cisable cisable cisable cisable
- -------------------------------------------------------------------------------
John B. Joseph - - 33,000 32,000 N/A N/A
James G. LeSieur - - 14,000 11,000 N/A N/A
John F. McGrath - - 18,000 12,000 N/A N/A
William J. Mylymok - - 81,350 30,650 N/A N/A
Frank E. Smith - - 21,000 24,000 N/A N/A
(a) The Company has no plans pursuant to which stock appreciation rights may be
granted.
(b) Value of unexercised "in-the-money" options is the difference between the
market price of the common stock on December 31, 1993 and the exercise
price of the option, multiplied by the number of shares subject to the
option. Since the stock price at December 31, 1993 ($.50 per share) was
less than the exercise prices, the unexercised options have no
"in-the-money" value.
REPORT OF THE HUMAN RESOURCES/COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS TO SHAREHOLDERS
The Report of the Human Resources/Compensation Committee of the Board of
Directors shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates the information contained
in the report by reference, and shall not otherwise be deemed filed under such
acts.
Decisions related to compensation of the Company's executives, including
the Named Executives, during 1993 were ultimately made by the Board of Directors
of the Company or for Messrs. LeSieur, McGrath and Smith, who serve as
executives of the Company's banking subsidiaries, the Board of Directors of such
subsidiaries. The entire Board of Directors of the Company serves on the Human
Resources/Compensation Committee. Set forth below is a report of the Board of
Directors addressing the Company's compensation policies for 1993 applicable to
the Company's executives, including the Named Executives.
The Company's general philosophy with respect to compensating its executive
officers is to provide a compensation package that consists of three principal
components: base salary, bonus or performance compensation and long-term
incentive compensation.
Base salaries paid to the Company's executive officers during 1993 were
generally established by determining a level of compensation that would be both
competitive with the base salaries paid to executives of other companies in the
banking industry and reflect each individuals' experience and past and potential
contribution to the Company. The financial performance and condition of the
Company are also considered in determining base salaries.
Bonus compensation is discretionary and intended to reward high levels of
performance that enhance the operating results of the Company or its
subsidiaries. Performance factors considered in determining bonus compensation
include the Company's and/or its subsidiaries' earnings, its return on equity,
return on assets, credit quality and financial performance in comparison to
plan. No bonuses were paid to the Company's executive officers during 1993
because of the operating losses that were sustained by the Company and its
subsidiaries.
The Company maintains compensation plans that are intended to provide long-
term incentives for its executive officers. They include Stock Option Plans and
a 401(k) Profit Sharing Plan.
The Stock Option Plans are designed to align the interests of key
employees, including the Named Executives, with those of shareholders. They are
intended to provide these employees with an incentive to achieve higher levels
of performance by granting them long-term options to purchase Company common
stock at a fixed exercise price that equals the fair market value of the
underlying stock on the date of the grant. No stock options were granted during
1993 because of the operating losses that were sustained by the Company and the
decline in the stock price. The Human Resources/Compensation Committee does not
consider existing stock option holdings of the executives when deciding to grant
stock options.
The purpose of the 401(k) Profit Sharing Plan (the "401(k) Plan") is to
encourage participants, including the Named Executives, to adopt a regular
savings program to defer a part of their before-tax compensation to provide
security for their retirement. Subject to certain limitations, the Company
matches amounts deferred by eligible employees and may make an additional
discretionary profit sharing contribution. The Company made a matching
contribution for all eligible employees in 1993. In light of the operating
losses, no profit sharing contribution was made in 1993.
Mr. Joseph, the President and Chief Executive Officer of the Company,
received a base annual salary of $188,000 for 1993. Mr. Joseph's annual salary
was reduced to $158,000 beginning in December 1993. This salary was set at a
level that the Board of Directors believed was lower than that paid to chief
executives in other comparable financial institutions and reflects the Board's
decision to place a greater emphasis on discretionary bonus compensation as
source of compensation for its chief executive. Mr. Joseph's salary was reduced
in 1993 as a result of the financial difficulties of the Company. Because of
the losses incurred by the Company during the year, no bonus was paid to Mr.
Joseph for his services in 1993. In addition, the Company made a $4,000
matching contribution to Mr. Joseph's account under the 401(k) Plan.
Mr. Mylymok served as President and Chief Operating Officer of the Company
until April 1993. Under his original employment agreement dated January 1,
1991, he was entitled to a base salary of $375,000 in 1991, $450,000 in 1992 and
$525,000 in 1993. Mr. Mylymok's employment agreement was amended in 1992 so
that his 1992 salary would remain at $375,000 as a result of the economic
recession, increasing costs and restrictions of government regulation and the
problems at Sunwest. Mr. Mylymok's employment agreement was amended again in
1993. Under the 1993 amendment, Mr. Mylymok resigned as President and Chief
Operating Officer and acted instead as Administrative Consultant. Mr. Mylymok's
salary was reduced to $150,000 per year beginning April 1, 1993 as a result of
his lesser responsibilities and the continuing financial difficulties of the
Company. Mr. Mylymok is also entitled to 50% of certain loss recoveries of the
Company and certain of its subsidiaries, up to $150,000. Although this
compensation was earned in 1993, it is not payable until 1995 under his modified
employment agreement. Mr. Mylymok began deferring his base salary in November
1993 as a result of the financial condition of the Company.
The Company does not have a policy on qualifying executive compensation for
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended.
Dated: April 29, 1994 HUMAN RESOURCES/COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS
J. DAVID CHESHIER JOHN B. JOSEPH
I. JACK COWLEY, M.D. LACY G. MARLETTE, JR.
L. WAYNE GERTMENIAN, Ph.D. RONALD R. WHITE
THOMAS A. JONES, C.P.A. <PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
With the exception of Messrs. Joseph and White, no person who was an
executive officer of the Company during 1993 served as a director of the
Company. Messrs. Joseph, White and Cheshier participated in compensation
decisions as members of the Human Resources/Compensation Committee. During
1993, Mr. Joseph served as the President and Chief Executive Officer, and Mr.
White served as the Executive Vice President, of the Company. Messrs. Joseph,
White and Cheshier also served as directors and executive officers of CGI during
1993. Messrs. White and Cheshier participated in compensation decisions at CGI.
Mr. Cheshier resigned as an officer of CGI during December 1993 and as a
director of CGI during March 1994. Mr. Joseph resigned as an executive officer
of CGI in July 1993. CGI and the Company engaged in certain transactions during
1993. The Company had payables to CGI of $35,000 at December 31, 1993. The
Company had notes payable and accrued interest to CGI and Centennial Capital,
Inc., a wholly owned subsidiary of CGI, totalling $406,000 at December 31, 1993,
which are due in one principal payment of $76,000 due June 30, 1994 and two
remaining annual principal installments of $113,000 due June 30, 1995 and 1996
with interest due at maturity on June 30, 1996. The notes bear interest at the
prime rate plus 2%.
Some of the directors and officers of the Company and its subsidiaries and
the entities with which they are associated are customers of, and have had
banking transactions with, the Company's banking subsidiaries, Sunwest Bank and
Sacramento First National Bank, in the ordinary course of the banks' businesses
during 1993, and the banks expect to have banking transactions with such persons
in the future. All loans and commitments to lend included in such transactions
were made in compliance with applicable laws and on substantially the same
terms, including interest rates, collateral and repayment terms, as those
prevailing for comparable transactions with other persons of similar
creditworthiness, and in the opinion of the respective Boards of Directors of
the banks, did not involve more than a normal risk of collectibility, or present
any other unfavorable features.
Mr. John Miles and Mr. Robert Eadington were directors and served on the
Human Resources/Compensation Committee during 1993. Messrs. Miles and Eadington
have since resigned as directors.
COMPENSATION OF DIRECTORS
During 1993, each director received an annual retainer of $7,000, prorated
for the actual number of months served, and each non-employee and employee
director received $1,000 and $750, respectively, for each regular meeting of the
Board of Directors attended. Each Audit Committee member received $500 for each
regular meeting of the Audit Committee attended. The aggregate amount of
directors' fees paid in 1993 was $189,000. Employee and non-employee directors
are eligible to participate in the Company's 1988 Stock Option Plan subject to
certain specific limitations. No stock options were granted in 1993.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the directors and officers of the Company and its subsidiaries and
the entities with which they are associated are customers of, and have had
banking transactions with, the Company's banking subsidiaries, Sunwest Bank and
Sacramento First National Bank, in the ordinary course of the banks' businesses
during 1993, and the banks expect to have banking transactions with such persons
in the future. For a discussion of the terms of such transactions, see
"Executive Compensation - Compensation Committee Interlocks and Insider
Participation."
Messrs. Joseph and White are directors and principal shareholders of CGI,
and Mr. White is an executive officer of CGI. For a discussion of the nature of
the relationship between the Company and CGI see "Executive Compensation -
Compensation Committee Interlocks and Insider Participation."
INDEPENDENT AUDITORS
The Board of Directors has not yet selected independent auditors for the
fiscal year ending 1994 as the Board customarily does not select its independent
auditors until later in the year. Prior to making its selection, the Board of
Directors may solicit bids from several independent public accounting firms,
including KPMG Peat Marwick, the Company's independent auditors for the year
ended 1993. Representatives of KPMG Peat Marwick will be present at the
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions from shareholders.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances shareholders are entitled to present proposals
at shareholder meetings. Any such proposal to be included in the Proxy
Statement for the Company's 1994 Annual Meeting of Shareholders must be
submitted by a shareholder prior to December 30, 1994 in a form that complies
with applicable regulations.
ANNUAL REPORT
The Company's annual report for the year ended December 31, 1993
accompanies this Proxy Statement. The annual report contains consolidated
financial statements of the Company and its subsidiaries and the report thereon
of KPMG Peat Marwick, independent auditors.
UPON WRITTEN REQUEST OF ANY PERSON ENTITLED TO VOTE AT THE MEETING,
ADDRESSED TO FRANK E. SMITH, SECRETARY, WEST COAST BANCORP, 4770 CAMPUS DRIVE,
SUITE 100, NEWPORT BEACH, CALIFORNIA 92660-1833, THE COMPANY WILL PROVIDE
WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR FISCAL 1993,
INCLUDING THE FINANCIAL STATEMENTS, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934.
OTHER BUSINESS
The Board of Directors knows of no other business which will be presented
for consideration at the Meeting other than that stated in the Notice of
Meeting. If, however, other matters are properly brought before the Meeting, it
is the intention of the individuals named in the accompanying form of Proxy to
vote the shares represented thereby in accordance with their best judgment and
in their discretion, and authority to do so is included in the Proxy.
WEST COAST BANCORP
By: JOHN B. JOSEPH
John B. Joseph, Chairman of the Board and
Chief Executive Officer
DATED: April 29, 1994
(FRONT OF PROXY CARD)
REVOCABLE PROXY REVOCABLE PROXY
WEST COAST BANCORP - PROXY CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) hereby nominate(s), constitute(s) and
appoint(s) J. David Cheshier and Lacy G. Marlette, Jr., and each of them, the
attorneys, agents and proxies of the undersigned, with full powers of
substitution to each, to attend and act as proxy or proxies of the undersigned
at the Annual Meeting of Shareholders (the "Meeting") of WEST COAST BANCORP (the
"Company") to be held at the Red Lion Hotel, 3050 Bristol Street, Costa Mesa, CA
92626, on Tuesday, May 24, 1994, at 9:00 a.m., or any and all adjournments
thereof, and to vote as specified herein the number of shares which the
undersigned, if personally present, would be entitled to vote.
1. ELECTION OF DIRECTORS.
FOR all nominees listed below (except as indicated to the contrary below).
Discretionary authority to cumulate votes is granted.
WITHHOLD AUTHORITY to vote for all nominees listed below.
Board of Director's Nominees: J. David Cheshier, I. Jack Cowley, L. Wayne
Gertmenian
Thomas A. Jones, John B. Joseph, Lacy G. Marlette, Jr., and Ronald R. White.
INSTRUCTION: TO WITHHOLD AUTHORITY to vote for any individual nominee, write
that nominee's name in the space below.
2. OTHER BUSINESS. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the Meeting and at any
and all adjournments thereof. The Board of Directors at present knows of
no other business to be presented by or on behalf of the Company or the
Board of Directors at the Meeting.
PLEASE SIGN AND DATE ON THE REVERSE SIDE <PAGE>
(BACK OF PROXY CARD)
PLEASE SIGN AND DATE BELOW
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSAL 1.
The undersigned hereby ratifies and confirms all that said attorneys and
proxies, or any of them, or their substitutes, shall lawfully do or cause to be
done by virtue hereof and hereby revokes any and all proxies heretofore given by
the undersigned to vote at said Meeting. The undersigned acknowledges receipt
of the notice of said Annual Meeting and the Proxy Statement accompanying said
notice.
Dated: , 1994
Signed:
Signed:
Please date this Proxy and sign as your name(s) appear(s) on this card. Joint
owners should each sign personally. Corporate proxies should be signed by an
authorized officer. Executors, administrators, trustees, etc., should give
their full titles.
I (WE) WILL NOT ATTEND THE MEETING IN PERSON. <PAGE>
