U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
Amendment No. 1 to Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
Commission File Number: 0-10897
WEST COAST BANCORP
(Name of Small Business Issuer in Its Charter)
California 95-3586860
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4770 Campus Drive, Suite 250
Newport Beach, California 92660-1833
(Address of Principal Executive Offices) (Zip Code)
(714) 442-9330
Issuer's Telephone Number, Including Area Code
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act:
Common Stock, No Par Value
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[X]
Total revenues for the most recent fiscal year: $11,415,000.
As of February 28, 1998, the aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $11,529,000 based upon the
last sale price on such date.
Number of shares of Common Stock of the registrant outstanding
as of February 28, 1998:
9,168,942
Transitional Small Business Disclosure Format: YES NO X
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors
The following table sets forth certain information, as of March 31, 1998,
with respect to those individuals who are members of the Board of Directors.
Such persons were elected at the 1997 Annual Shareholder Meeting except for Eric
D. Hovde who was appointed by the Board of Directors.
Year First
Elected or
Appointed as
Name of Director Age Director Position with the Company
- ---------------- --- ------------ -------------------------
John B. Joseph 59 1981 Chairman of the Board,
President and CEO
Ronald R. White 51 1981 Vice Chairman of the Board
and Executive Vice President
J. David Cheshier, C.P.A. 51 1981 Director
L. Wayne Gertmenian, Ph.D. 58 1991 Director
Eric D. Hovde 34 1997 Director
Thomas A. Jones, C.P.A. 59 1990 Director
Lacy G. Marlette, Jr., C.P.A. 51 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 since 1993; Vice
President and a director of Centennial Corporation since 1983; President of
Pacific Western Aggregate Corporation since 1997; President of Pacific Western
Equipment LLC since 1997;Vice Chairman of the Board of Directors of The
Centennial Group, Inc., a Delaware corporation ("CGI"), from 1987 to December
1995; general partner of various limited partnerships engaged in real estate
development and lending activities. Until July 1993, Mr. Joseph held various
positions in CGI and its subsidiaries. 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 and WCV,
Inc.
Ronald R. White is currently Executive Vice President and Vice Chairman of
the Board of Directors of the Company. Mr. White has served as President, of
Glacial Garden, Inc. since 1992, Enticon Enterprises since 1975, and Centennial
Corporation since 1977. Mr. White has served in the following capacities during
the past five years: Chairman of the Board of Directors, President and Chief
Executive Officer of CGI from 1987 to December 1995; general partner of various
limited partnerships engaged in real estate development and lending activities.
Until December 1995, Mr. White held various positions in the subsidiaries of
CGI. 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.
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J. David Cheshier is a certified public accountant and is the Chief
Financial Officer of Travelmax International Inc. From 1995 until 1997 Mr.
Cheshier was employed by Vehicular Technologies Corporation, Results
International, Inc. and The Roxburgh Agency as a Vice President and Chief
Financial Officer. 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.
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.
Eric D. Hovde has served as Executive Vice President of Hovde
Financial, Inc. since 1987. Mr. Hovde also serves as President of Hovde Capital,
Inc. and Hovde Securities, Inc. and is Managing Member of Hovde Acquisition,
LLC.
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.
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.
Executive Officers
For information concerning executive officers of the Company see
"FORM 10-KSB - ITEM 4.A - Executive Officers of the Registrant."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1997, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% shareholders were complied with.
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ITEM 10. 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 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, 1997, 1996 and 1995:
SUMMARY COMPENSATION TABLE
Annual Compensation
----------------------------------------------
All
Name and Salary Bonus Other Other
Principal Position Year ($) ($) ($) ($)(a)
- --------------------------------------------------------------------------------
JOHN B. JOSEPH (b) 1997 93,000 - 9,000 1,200
President and CEO, Company 1996 158,000 - 15,000 -
Officer, Company 1995 157,000 115,000 9,000 -
JAMES G. LeSIEUR, III (c) 1997 140,000 48,000 30,000 5,000
President and CEO, Sunwest Bank 1996 140,000 15,000 29,000 5,000
1995 140,000 - 23,000 5,000
FRANK E. SMITH 1997 125,000 22,000 - 4,000
Senior Vice President, CFO and 1996 125,000 14,000 - 4,000
Secretary, Company and Sunwest
Bank 1995 125,000 - - 4,000
(a) Includes amounts contributed by the Company and its subsidiaries
to the West Coast Bancorp 401(k) Profit Sharing Plan and
allocated to the Named Executive's vested or unvested account
under such plan.
(b) Mr. Joseph's other annual compensation includes director's fees
of $3,000, $9,000 and $9,000 paid by the Company and director's
fees of $6,000, $6,000, and $0 paid by Sunwest Bank in 1997,
1996 and 1995, respectively. During 1995 the Company accrued
bonuses for Mr. Joseph of $70,000 from the sale of Sacramento
First National Bank and $45,000 from Sunwest Bank achieving a
6.5% leverage ratio. Accrued but unpaid salaries totaled
$514,000 at December 31, 1997.
(c) Mr. LeSieur's other annual compensation represents director's
fees of $6,000 and $6,000 paid by Sunwest Bank in 1997 and 1996,
respectively; reimbursement of the employee portion of FICA of
$7,000 in 1997 and $6,000 in 1996 and 1995; and an auto
allowance of $18,000 in 1997 and $17,000 in 1996 and 1995.
STOCK OPTION GRANTS
No stock options were granted to the Named Executives during 1997.
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AGGREGATED OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the Named
Executives concerning the exercise of options during the fiscal year ended
December 31, 1997 and unexercised options held by the Named Executives as of
December 31, 1997:
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND FY-END OPTION VALUES (a)
Shares Acquired Number of Unexercised Value of Unexercised
on Value Options at In-the-Money Options
Exercise Realized 12/31/97 (#) at 12/31/97 ($)(b)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------
John B. Joseph - - 65,000 - 5,000 N/A
James G. LeSieur - - 25,000 - 2,000 N/A
Frank E. Smith - - 45,000 - 4,000 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 average reported sales price of the common stock on December 31, 1997 of
$1.235 per share and the exercise price of the option, multiplied by the number
of shares subject to the option.
COMPENSATION OF DIRECTORS
During 1997, each non-employee and employee director received $250 for
each meeting of the Board of Directors attended. Effective January 1, 1998,
directors are paid a retainer of $6,000 per year. The retainer is paid monthly
on a pro rata basis. The payment is reduced by $250 for each scheduled meeting
not attended. 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 1997.
EMPLOYMENT CONTRACTS
Mr. LeSieur entered into a one year employment agreement in effect
until January 31, 1999 with Sunwest Bank. The agreement may be renewed annually
each year for a one year term. Compensation under the agreement includes: a base
salary of $170,000, participation in the Sunwest Bank employee incentive program
and a special bonus. The special bonus is contingent on a Sunwest Bank merger,
or 80% or more of its shares being sold, or substantially all of its assets
being sold or transferred. The special bonus is based on a percentage payout of
the difference between the purchase price and $9.5 million plus any additional
capital contributions into Sunwest Bank. The percentage payout ranges from 2% to
5% and increases as the purchase price increases. The maximum special bonus
payable is $300,000. The agreement provides for a severance payment of twelve
months salary in the event that Mr. LeSieur is terminated without cause.
Mr. Smith entered into a one year employment agreement in effect until
January 31, 1999 with Sunwest Bank. His agreement is similar to that of Mr.
LeSieur's except the base salary is $125,000, the special bonus percentage
payout ranges from 1% to 2.5% and the maximum special bonus payable is $150,000.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth, as of March 31, 1998, 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.
Shares Percent
That Total of
May Be Beneficial Class
Name of Beneficial Owner Address Acquired(a) Ownership(b) (c)
- --------------------------------------------------------------------------------
DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
J. David Cheshier 4770 Campus Drive, Suite 250 45,000 47,000 *
Newport Beach, CA 92660
L. Wayne Gertmenian Same as above 30,000 36,765 *
Eric D. Hovde 1826 Jefferson Place, N - 773,500(d) 8.4%
Washington, DC 20036
Thomas A. Jones 4770 Campus Drive, Suite 250 30,000 44,300 *
Newport Beach, CA 92660
John B. Joseph Same as above 65,000 958,690 10.4%
Lacy G. Marlette, Jr. Same as above 45,000 45,212 *
James G. LeSieur, III Same as above 25,000 69,000 *
Frank E. Smith Same as above 45,000 89,600 *
Ronald R. White Same as above 65,000 65,000 *
All Directors and Executive Officers
(9 individuals) 350,000 2,128,467 22.4%
OTHER GREATER THAN 5% SHAREHOLDERS
- ----------------------------------
Gerauld L. Hopkins 6900 Main Street, Suite 153 - 575,000 6.3%
Downers Grove, IL 60516
Western Acquisition 1629 Colonial Parkway - 735,000 8.0%
Partners, L.P. Inverness, IL 60067
Western Acquisitions, Same as above - 735,000(e) 8.0%
L.L.C.
* Less than 1%
(a) Shares that may be acquired within 60 days of March 31, 1998
pursuant to the exercise of stock options.
(b) Except as otherwise noted below, each person has sole voting and
investment power with respect to the shares listed.
(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 March 31,
1998 through the exercise of stock options.
(d) Includes 735,000 shares owned by Western Acquisition Partners,
L.P. for which Mr. Hovde disclaims beneficial ownership.
(e) Includes 735,000 shares owned by Western Acquisition Partners,
L.P. Western Acquisitions, L.L.C. serves as the general partner
of Western Acquisition Partners, L.P.
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Potential Changes in Control
Pursuant to a commitment letter entered into as of July 30, 1997, by
and between John B. Joseph, in his individual capacity and on behalf of certain
entities under his control (the "Sellers"), and Eric D. Hovde, as amended, Eric
D. Hovde has agreed to purchase 893,090 shares of the Company's common stock
beneficially owned by the Sellers as well as any after-acquired shares. Subject
to the provisions of the commitment letter, which provisions include the receipt
of any required regulatory approvals, the purchase will occur on a business day
not later than December 31, 1998. Mr. Hovde has loaned approximately $678,000 to
the Sellers. The loans are secured by 893,000 shares of the Company's common
stock beneficially owned by the Sellers. The loans are due on December 31, 1998.
Mr. Hovde is the beneficial owner of 38,500 shares of the Company's common
stock; an affiliate of Mr. Hovde, Western Acquisition Partners, L.P.
("Western"), is the beneficial owner of 735,000 shares of the Company's common
stock as to which Mr. Hovde disclaims beneficial ownership. Mr. Hovde and
Western beneficially own 0.4% and 8.0%, respectively, or 8.4% in the aggregate.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At December 31, 1997, loans to directors totaled $34,000. During the
year ended December 31, 1997, new loans totaling $36,000 were granted to
directors and repayments totaled $2,000. No loans to directors were granted or
outstanding in 1996. These loans were made in the ordinary course of business.
The loans were granted on substantially the same terms, including interest rates
and collateral on loans, as those prevailing at the same time for comparable
transactions for others.
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 subsidiary Sunwest Bank, in the
ordinary course of Sunwest Bank's business during 1997 and may have banking
transactions with such persons in the future. In January 1998, the Company
executed a note and security agreement with a corporation owned by its President
and Chairman, John B. Joseph. The note is in the amount of $514,000 representing
unpaid fees for services. The note bears interest at 9%, payable monthly, with
principal due January 29, 2001. The note is secured by five shares of Sunwest
Bank stock. All fees incurred and banking transactions were made in compliance
with applicable laws and on substantially the same terms, including interest
rates, as those prevailing for comparable transactions with other persons and,
in the opinion of the Boards of Directors of the Company and Sunwest Bank, did
not present any other unfavorable features.
On February 29, 1996, the Company and Sunwest Bank entered into an
agreement with Western Acquisition Partners, L.P. and its general partner,
Western Acquisitions, L.L.C. (collectively "Western"), affiliates of Hovde
Financial, Inc., for the Company to sell 35 outstanding shares of Sunwest Bank
common stock owned by the Company for $2,520,000 and for Sunwest Bank to issue
and sell 15 new shares of common stock for $1,051,000. On September 13, 1996 the
sale closed. As a result of these transactions the Company and Western own
approximately 56.5% and 43.5% of Sunwest Bank, respectively. The Company
received an additional $493,000 from Western in February 1997 representing
additional proceeds from a purchase price adjustment based on Sunwest Bank's
financial performance in 1996.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 28 day of
April, 1998.
WEST COAST BANCORP
(Registrant)
By
/s/ John B. Joseph
---------------------------
John B. Joseph
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
/s/ John B. Joseph Chairman of the Board, April 28, 1998
- ----------------------------- President and
John B. Joseph Chief Executive Officer
(Principal Executive Officer)
/s/ Ronald R. White Executive Vice President April 28, 1998
- ----------------------------- and Director
Ronald R. White
/s/ Frank E. Smith Chief Financial Officer April 28, 1998
- ----------------------------- (Principal Financial
Frank E. Smith and Accounting Officer)
/s/ J. David Cheshier Director April 28, 1998
- -----------------------------
J. David Cheshier
/s/ Dr. L. Wayne Gertmenian Director April 28, 1998
- -----------------------------
Dr. L. Wayne Gertmenian
/s/ Eric D. Hovde Director April 28, 1998
- -----------------------------
Eric D. Hovde
/s/ Thomas A. Jones Director April 28, 1998
- -----------------------------
Thomas A. Jones
/s/ Lacy G. Marlette, Jr. Director April 28, 1998
- -----------------------------
Lacy G. Marlette, Jr.
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