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, 1998
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.)
535 E. First Street
Tustin, California 92780-3312
(Address of Principal Executive Offices) (Zip Code)
(714) 730-4499
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: $13,344,000.
As of February 28, 1999, the aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $8,423,000 based upon the
last sale price on such date.
Number of shares of Common Stock of the registrant outstanding as of
February 28, 1999:
9,258,942
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,
1999, with respect to those individuals who are members of the Board of
Directors. Such persons were elected at the 1998 Annual Shareholder Meeting.
Year First
Elected or
Appointed as
Name of Director Age Director Position with the Company
---------------- --- ------------ -------------------------
Eric D. Hovde 35 1997 Chairman of the Board,
President and CEO
Thomas A. Jones, C.P.A. 60 1990 Director
John B. Joseph 60 1981 Director
James G. LeSieur, III 57 1998 Director
Eric D. Hovde is currently the Chairman of the Board, President and Chief
Executive Officer of the Company. Mr. Hovde also is a director of Sunwest Bank.
Mr. Hovde has served as President of Hovde Financial, Inc. since 1987. Mr. Hovde
also serves as President of Hovde Capital, Inc., Hovde Securities, Inc. and
Hancock Park Acquisitions, L.L.C., and is Managing Member of Hovde Capital,
L.L.C., Hovde Acquisition, L.L.C., Financial Institution Partners, Ltd.,
1824-1826 Jefferson Place, L.L.P., Colonial Jefferson, L.L.C., and Western
Acquisitions, L.L.C.
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 also serves as a director of Sunwest Bank.
John B. Joseph was the Chairman of the Board, President and Chief Executive
Officer of the Company until June 1998. He had served as Chairman of the Board
of Directors of the Company from 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
1993 to June 1998; Vice President and a director of Centennial Corporation since
1983; President of Pacific Western Aggregate Corporation since 1997; President
of Pacific Western Equipment L.L.C. since 1997; Vice Chairman of the Board of
Directors of 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. Mr. Joseph resigned all of his
positions with the Company and its subsidiaries in April 1999.
James G. LeSieur, III serves as President and Chief Executive Officer of
Sunwest Bank. Mr. LeSieur joined Sunwest Bank in 1975 as Vice President and
Cashier, was promoted to Senior Vice President and Controller, and later
promoted to Executive Vice President and Chief Financial Officer. In 1991 Mr.
LeSieur assumed the position of President. Mr. LeSieur is a director of Sunwest
Bank.
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.
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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, 1998, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% shareholders were complied with, except for Mr. Hovde who filed one
late Form 4.
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, 1998, 1997 and 1996:
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------------------------------------
Name and All Other
Principal Position Year Salary($) Bonus($) Other($) ($)(a)
- --------------------------------------------------------------------------------
ERIC D. HOVDE (b) 1998 -- -- 9,000 --
President and CEO, Company 1997 -- -- 5,000 --
1996 -- -- 2,000 --
JOHN B. JOSEPH (c) 1998 25,000 -- 8,000 --
1997 93,000 -- 9,000 1,000
1996 158,000 -- 15,000 --
JAMES G. LeSIEUR, III (d) 1998 170,000 35,000 10,000 5,000
President and CEO, Sunwest Bank 1997 140,000 48,000 31,000 5,000
1996 140,000 15,000 29,000 5,000
FRANK E. SMITH 1998 125,000 26,000 -- 5,000
Senior Vice President, CFO and 1997 125,000 22,000 -- 4,000
Secretary, Company and 1996 125,000 14,000 -- 4,000
Sunwest Bank
(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. Hovde receives no salary for his services as President and CEO
of the Company. Mr. Hovde's other annual compensation includes
director's fees of $2,000 paid by the Company in 1998, and
director's fees of $7,000, $5,000 and $2,000 paid by Sunwest Bank
in 1998, 1997 and 1996, respectively.
(c) Mr. Joseph served as President and CEO of the Company until May
31, 1998. Mr. Joseph's other annual compensation includes
director's fees of $2,000, $3,000 and $9,000 paid by the Company
and director's fees of $6,000, $6,000, and $6,000 paid by Sunwest
Bank in 1998, 1997 and 1996, respectively.
(d) Mr. LeSieur's other annual compensation represents director's fees
of $2,000, $6,000 and $6,000 paid by Sunwest Bank in 1998, 1997
and 1996, respectively; reimbursement of the employee portion of
FICA of $7,000 in 1997 and $6,000 in 1996; and an auto allowance
of $8,000 in 1998, $18,000 in 1997 and $17,000 in 1996.
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STOCK OPTION GRANTS
No stock options were granted to the Named Executives during 1998.
AGGREGATED OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the Named
Executives concerning the exercise of options during the fiscal year ended
December 31, 1998 and unexercised options held by the Named Executives as of
December 31, 1998:
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998
AND FY-END OPTION VALUES (a)
Shares Acquired Number of Unexercised Value of Unexercised
on Value Options at In-the-Money Options
Exercise Realized 12/31/98 (#) at 12/31/98 ($)(b)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------
Eric D. Hovde - - - - - N/A
John B. Joseph - - 65,000 - 5,900 N/A
James G. LeSieur - - 25,000 - 1,900 N/A
Frank E. Smith - - 45,000 - 4,700 N/A
(a) The Company has no plans pursuant to which stock appreciation rights
may be granted. The current plan expired in September 1998.
(b) Value of unexercised "in-the-money" options is the difference between
the ending reported sales price of the common stock on December 31,
1998 of $1.25 per share and the exercise price of the option,
multiplied by the number of shares subject to the option.
COMPENSATION OF DIRECTORS
From January 1, 1998 through May 1998, directors were paid a retainer
of $6,000 per year. The retainer was paid monthly on a pro rata basis. The
payment was reduced by $250 for each scheduled meeting not attended. Effective
May 1998, directors receive no retainer and receive a fee of $50 for each
meeting attended. Employee and non-employee directors were eligible to
participate in the Company's 1988 Stock Option Plan subject to certain specific
limitations. No stock options were granted in 1998.
EMPLOYMENT CONTRACTS
Mr. LeSieur entered into a one year employment agreement in effect
until February 1, 2000 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
February 1, 2000 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, 1999, 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 That Total
May Be Beneficial Percent of
Name of Beneficial Owner Address Acquired(a) Ownership(b) Class(c)
DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
Eric D. Hovde 1826 Jefferson Place, NW - 796,000(d) 8.6%
Washington, DC 20036
Thomas A. Jones 535 East First Street 30,000 44,300 *
Tustin, CA 92780
John B. Joseph Same as above 65,000 958,690 10.3%
James G. LeSieur, III Same as above 25,000 82,000 *
Frank E. Smith Same as above 45,000 89,000 *
All Directors and Executive Officers
(5 individuals) 165,000 1,969,990 20.9%
OTHER GREATER THAN 5% SHAREHOLDERS
- --------------------------------
Gerauld L. Hopkins 6900 Main Street, Suite 153 - 575,000 6.2%
Downers Grove, IL 60516
Western Acquisition 1110 Lake Cook Road - 735,500 7.9%
Partners, L.P. Suite 165
Buffalo Grove, IL 60089
Western Acquisitions, Same as above - 735,500(e) 7.9%
L.L.C.
* Less than 1%
(a) Shares that may be acquired within 60 days of March 31, 1999
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, 1999
through the exercise of stock options.
(d) Includes 735,500 shares owned by Western Acquisition Partners, L.P.
for which Mr. Hovde disclaims beneficial ownership. See "Potential
Changes in Control" below for other shares that may be acquired.
(e) Includes 735,500 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 was to 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 893,090 shares of the
Company's common stock beneficially owned by the Sellers. The loans became due
on December 31, 1998. The sale has not yet occurred due to a pending approval
from the Federal Reserve Bank of San Francisco. Mr. Hovde is the beneficial
owner of 60,500 shares of the Company's common stock; an affiliate of Mr. Hovde,
Western Acquisition Partners, L.P. ("Western"), is the beneficial owner of
735,500 shares of the Company's common stock as to which Mr. Hovde disclaims
beneficial ownership. Mr. Hovde and Western beneficially own 0.6% and 7.9%,
respectively, or 8.6% in the aggregate.
ITEM 12. 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 subsidiary Sunwest Bank, in the
ordinary course of Sunwest Bank's business during 1998 and may have banking
transactions with such persons in the future. 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.
At December 31, 1998, loans to directors totaled $85,000. During the
year ended December 31, 1998, new loans totaling $81,000 were granted to
directors and repayments totaled $30,000. 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.
In January 1998, the Company executed a note and security agreement
with a corporation owned by its former President and Chairman, John B. Joseph.
The note was 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. Principal payments of $100,000 were made during 1998 and currently the
note has a balance of $414,000. The note is secured by five shares of Sunwest
Bank stock. The note was acquired by an unrelated third party in April 1999.
In 1998 Eric D. Hovde acquired a note payable by the Company to a
nonaffiliated party. The terms of the note remained unchanged with an interest
rate of prime plus 2% and a maturity date of June 30, 1999.
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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 29 day of
April, 1999.
WEST COAST BANCORP
(Registrant)
By
/s/ Eric D. Hovde
Eric D. Hovde
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/ Eric D. Hovde Chairman of the Board, April 29, 1999
- ----------------- President and
Eric D. Hovde Chief Executive Officer
(Principal Executive Officer)
/s/ Frank E. Smith Chief Financial Officer April 29, 1999
- ----------------- (Principal Financial
Frank E. Smith and Accounting Officer)
/s/ Thomas A. Jones Director April 29, 1999
- -------------------
Thomas A. Jones
/s/ James G. LeSieur, III Director April 29, 1999
- -------------------------
James G. LeSieur, III
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