<PAGE> 1
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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ]Soliciting Materials Pursuant to Rule 14a-11 (c) or Rule 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 .
[ ] Fee computed on table below per exchange Act Rules 14a-6(i)(1)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 in state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with 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 :
<PAGE> 2
CENTRAL COAST BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MONDAY, MAY 24, 1999
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Central Coast Bancorp will be
held at 301 Main Street, Salinas, California, on Monday, May 24, 1999 at
5:30 p.m. for the following purposes:
1. To elect directors.
2. To approve the appointment of Deloitte & Touche LLP as independent
public accountants for the 1999 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 directors of
Central Coast Bancorp are set forth in the accompanying Proxy Statement
and incorporated herein by reference.
Article III, Section 16 of the Bylaws of Central Coast Bancorp
provides for the nomination of directors in the following manner:
"Nomination for election of members of the Board of Directors may be
made by the Board of Directors or by any shareholder of any outstanding
class of capital stock of the corporation entitled to vote for the
election of directors. Notice of intention to make any nominations shall
be made in writing and shall be delivered or mailed to the President of
the corporation not less than 21 days nor more than 60 days prior to any
meeting of shareholders called for the election of directors; provided
however, that if less than 21 days notice of the meeting is given to
shareholders, such notice of intention to nominate shall be mailed or
delivered to the President of the corporation not later than the close of
business on the tenth day following the day on which the notice of
meeting was mailed; provided further that if notice of such meeting is
sent by third-class mail as permitted by Section 6 of these by-laws, no
notice of intention to make nominations shall be required. Such
notification shall contain the following information to the extent known
to the notifying shareholder:
(a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee;
(c) the number of shares of capital stock of the corporation owned by
each proposed nominee;
(d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the corporation owned by
the notifying shareholder.
Nominations not made in accordance herewith may,in the discretion
of the Chairman of the meeting, be disregarded and upon the Chairman's
instructions, the inspectors of election can disregard all votes cast for
each such nominee. A copy of this paragraph shall be set forth in a
notice to shareholders of any meeting at which Directors are to be
elected."
Only shareholders of record at the close of business on April 22,
1999 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/ JOHN F. MCCARTHY
----------------------------
John F. McCarthy, Secretary
Salinas, California
April 29, 1999
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.
<PAGE> 3
Mailed to Shareholders
on or about April 29, 1999
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 24, 1999 at 5:30 p.m. (the
"Meeting"). Only shareholders of record on April 22, 1999 (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 6,251,336 shares of its no par
value Common Stock (the "Common Stock").
Shareholders are entitled to one vote for each share held, except
that for the election of directors each shareholder has cumulative
voting rights and is entitled to as many votes as shall equal the
number of shares held by such shareholder multiplied by the number of
directors to be elected. Each shareholder may cast all his or her votes
for a single candidate or distribute such votes among any or all of the
candidates as he or she chooses. However, no shareholder shall be
entitled to cumulate votes (in other words, cast for any candidate a
number of votes greater than the number of shares of stock held by such
shareholder) unless such candidate's name has been placed in nomination
prior to the voting and the shareholder has given notice at the Meeting
prior to the voting of the shareholder's intention to cumulate his or
her votes. If any shareholder has given such notice, all shareholders
may cumulate their votes for candidates in nomination. Prior to voting,
an opportunity will be given for shareholders or their proxies at the
Meeting to announce their intention to cumulate their votes. The proxy
holders are given, under the terms of the proxy, discretionary
authority to cumulate votes on shares for which they hold a proxy.
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 in the election of directors "FOR" the
nominees of the Board of Directors and "FOR" proposal No. 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
subsidiaries, Bank of Salinas and Cypress Bank (the "Subsidiaries"),
may (without additional compensation) solicit proxies by telephone or
personal interview, the costs of which will be borne by the Corporation.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
As of the Record Date, April 22, 1999, no individual known to the
Corporation owned more than five percent (5%) of the outstanding shares
of its Common Stock except as described below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------
Name and Amount and Percentage
Address Nature of Class
Title of of Beneficial of Beneficial Beneficially
Class Owner Ownership Owned
- ---------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, Robert L.Meyer(1) 427,125 7.07%
No Par Value
================= ================ ============== ==============
</TABLE>
(1) The address for the person listed is P. O. Box 606, King City,
California, 93930-0606. All 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.
Security Ownership of Management
The following table sets forth information as of April 22, 1999,
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.
<TABLE>
<CAPTION>
Name and Address(1) Amount and Percent
of Nature of of
Title of Beneficial Beneficial Class
Class Owner Ownership (2)
----------- ---------------- ----------- --------
<S> <C> <C> <C>
Common Stock, No Par Robert C. Blatter 19,692 (3) 0.29%
Value
Common Stock, No Par C. Edward 212,025 (4) 3.08%
Value Boutonnet
Common Stock, No Par Bradford G. 165,894 (5) 2.41%
Value Crandall
Common Stock, No Par Alfred P. Glover 46,404 (6) 0.67%
Value
Common Stock, No Par Michael T. Lapsys 84,268 (7) 1.22%
Value
Common Stock, No Par Duncan L. McCarter 128,971 (8) 1.87%
Value
Common Stock, No Par John F. McCarthy 75,029 (9) 1.09%
Value
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Name and Address(1) Amount And
of Nature Of
Beneficial Beneficial Percent of
Title of Class Owner Ownership Class (2)
- -------------- ------------------ ----------- -----------
<S> <C> <C> <C>
Common Stock, No Par Robert M. 144,991 (10) 2.11%
Value Mraule,
D.D.S.,M.D.
Common Stock, No Par Louis A. Souza 44,582 (11) 0.65%
Value
Common Stock, No Par Robert M. 1,125 0.02%
Value Stanberry
Common Stock, No Par Mose E. Thomas, 50,131 (12) 0.73%
Value Jr.
Common Stock, No Par Nick Ventimiglia 72,461 (13) 1.05%
Value
All directors and executive officers
of the Corporation as a group (12 1,045,574(14) 15.18%
persons)
</TABLE>
( 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 6,719 shares held jointly with his spouse and
12,955 shares of Common Stock subject to stock options
exercisable immediately.
( 4) Includes 65,844 shares of Common Stock owned jointly with
his spouse, 5,767 shares as custodian for his grandchildren,
19,425 shares of Common Stock held by Mr. Boutonnet as trustee of
Charles E. Boutonnet Trust, 25,081 shares held by Mr. Boutonnet
as trustee of Boutonnet Farms, Inc. Profit Sharing Plan, 52,801
shares held in the Central Coast Bancorp Nonqualified Deferred
Compensation Plan Trust as to which Mr. Boutonnet has shared
investment power and 43,107 shares of Common Stock subject to
stock options exercisable immediately.
( 5) Includes 70,307 shares of Common Stock held by Mr. Crandall
and his spouse as trustees of the Bradford G.Crandall and Lynne
O. Crandall Trust, 52,480 shares held in the Central Coast
Bancorp Nonqualified Deferred Compensation Plan Trust as to which
Mr. Crandall has shared investment power and 43,107 shares of
Common Stock subject to stock options exercisable immediately.
( 6) Includes 15,694 shares of Common Stock owned jointly with
his spouse, 1,758 shares held in guardianship, 21,780 shares of
Common Stock subject to stock options and warrants exercisable
immediately.
( 7) Includes 4,414 shares of Common Stock owned by his spouse
and 440 shares held as custodian, 61,230 shares held in the
Michael T. Lapsys Trust and 6,806 shares of Common Stock subject
to stock options exercisable immediately.
(8) Includes 33,563 shares of Common Stock held by Mr. McCarter and
his spouse as trustees of the Duncan L. McCarter and Leslie P.
McCarter Trust, 52,134 shares held in the Central Coast Bancorp
Nonqualified Deferred Compensation Plan Trust as to which Mr.
McCarter has shared investment power and 43,107 shares of Common
Stock subject to stock options exercisable immediately.
(9) Includes 59,130 shares of Common Stock owned jointly with Mr.
McCarthy's spouse as trustees of the John F. McCarthy and Mary
Ann McCarthy Trust and 13,613 shares of Common Stock subject to
stock options exercisable immediately.
(10) Includes 59,501 shares of Common Stock held by Dr. Mraule as
trustee of Robert M. Mraule D.D.S., M.D., Inc. Money Purchase
Pension Plan, 36,134 shares held in the Central Coast Bancorp
Nonqualified Deferred Compensation Plan Trust as to which Mr.
Mraule has shared investment power and 43,107 shares subject to
stock options exercisable immediately.
(11) Includes 12,192 shares of Common Stock owned jointly with
his spouse and 13,530 shares of Common Stock subject to stock
options exercisable immediately.
(12) Includes 16,464 shares of Common Stock owned jointly with
his spouse and 20,419 shares of Common Stock subject to stock
options and warrants exercisable immediately.
(13)Includes 37,888 shares of Common Stock subject to stock options
exercisable immediately.
(14)Includes 299,416 shares of Common Stock subject to stock options
and warrants exercisable immediately and 319,096 shares held by
the Central Coast Bancorp Board of Directors Deferred Stock
Option Plan Trust.
3
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS OF THE CORPORATION
The number of directors authorized for election at this meeting
is nine (9). Management has nominated the nine (9) incumbent directors
to serve as the Corporation's directors. Each director will hold
office until the next Annual Meeting of Shareholders and until his
successor is elected and qualified.
All proxies will be voted for the election of the nine (9)
nominees listed below (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 directors. Abstentions and votes cast against nominees have
no effect on the election of directors. If any of the 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 become unavailable and has no present intention to
nominate persons in addition to or in lieu of those named below.
The following table sets forth certain information as of the
Record Date, April 22, 1999, with respect to those persons nominated by
the Board of Directors for election as directors, as well as all
executive officers. 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 in
control of the Corporation. There are no arrangements or understandings
by which any of the executive officers or directors of either the
Corporation or the Subsidiaries were selected. There is no family
relationship between any of the directors or executive officers.
<TABLE>
<CAPTION>
Name Age Position
---- --- ---------
<S> <C> <C>
Robert C. Blatter 38 Senior Vice President and Loan
Administrator of the Corporation since 1996
and the Loan Administrator of Bank of
Salinas since 1994.
C. Edward Boutonnet 59 Director of the Corporation and of
Bank of Salinas since 1994 and 1982,
respectively. Director of Cypress Bank
since 1996.
Bradford G. Crandall 64 Director of the Corporation and of
Bank of Salinas since 1994 and 1982,resecti-
vely. Director of Cypress Bank since 1996
Alfred P. Glover 67 Director of the Corporation and of
Bank of Salinas since 1996. Director of
Cypress Bank since 1988.
Michael T. Lapsys 50 Director of the Corporation, Bank of Salinas
and Cypress Bank since 1998.
Duncan L. McCarter,R.Ph. 52 Director of the Corporation and of Bank of
Salinas since 1994 and 1982, respectively
Director of Cypress Bank since 1996.
John F. McCarthy 56 Executive Vice President and Chief Operating
Officer, of Bank of Salinas, Cypress Bank and
the Corporation since 1988, 1997 and 1994,
respectively. Secretary of the Corporation,
Bank of Salinas and Cypress Bank since 1997.
President of Cypress Bank since 1998.
Robert M. Mraule, 49 Director of the Corporation and of
D.D.S.,M.D. Bank of Salinas since 1994 and 1982, respect-
ively. Director of Cypress Bank since 1996.
Louis A. Souza 70 Director of the Corporation and Bank of
Salinas since 1996. Director of Cypress Bank
since 1988.
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Name Age Position
----- --- ---------
<S> <C> <C>
Robert M. Stanberry 59 Senior Vice President and Chief Financial Officer of
the Corporation, Bank of Salinas and Cypress
Bank since 1998.
Mose E. Thomas, Jr. 58 Director of the Corporation and Bank of
Salinas since 1996. Director of Cypress Bank
since 1989.
Nick Ventimiglia 57 Chairman, President and Chief Executive
Officer of the Corporation since December 1994.
President and Chief Executive Officer
of Bank of Salinas since 1982. Chairman and
Chief Executive Officer of Cypress Bank since
1996.
</TABLE>
The following is a brief account of the business experience for a
minimum of five years of each director and executive officer listed
above in addition to positions indicated.
<TABLE>
<CAPTION>
<S> <C>
Robert C. Blatter Commercial Banking Officer, Bank of America
from 1986 to 1989.
C. Edward Boutonnet Organizer,Bank of Salinas; Partner and General
Manager, Sea Mist Farms, Ocean Mist Farms and
Boutonnet Farms, Inc.
Bradford G. Crandall President, E.B. Stone & Son, Inc., wholesale
nursery supply firm.
Alfred P. Glover Organizer of Cypress Bank; Owner, Glover
Enterprises, a real estate development firm.
Michael T. Lapsys Chairman, Device Dynamics Incorporated, a
semiconductor marking company.
Duncan L. McCarter, R.Ph. President and Chief Executive
Officer, Care Pharmacies, Inc.; President and
Chief Executive Officer, Healthcare Pathway
Management, Inc., Central Coast I.V. Services,
LLC and Care Home Medical Services, LLC
John F. McCarthy 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. Mraule,D.D.S.,M.D. Physician, Dentist, Oral Maxillofacial Surgeon.
Robert M. Stanberry Vice President and Chief Financial Officer,
TriCo Bancshares from 1993 to 1998.
Louis A. Souza Organizer of Cypress Bank; Owner, Louis A.
Souza Construction, a general contractor,
semi-retired.
Mose E. Thomas, Jr. Organizer of Cypress Bank; Owner and General
Manager, Chapel of Seaside, Inc., and Mission
Mortuary, Inc., funeral chapels.
Nick Ventimiglia Organizer, Director, President and Chief Executive
Officer, Bank of Salinas from 1982 to 1994.
</TABLE>
None of the Directors of the Corporation or the Subsidiaries is a
director of any other company with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, or subject to the requirements of Section 15(d) of such Act or
any company registered as an investment company under the Investment
Company Act of 1940, whose common stock is registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended.
6
<PAGE> 8
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
Duncan L. McCarter, Robert M. Mraule (Vice Chairman) and Mose E.
Thomas, Jr., oversee the Corporation's and Subsidiaries' 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 1998.
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 1998.
The Investment/CRA/ALCO/Shareholder Relations 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 and maintenance of shareholder
relations. The Investment/Shareholder Relations Committee met seven
(7) times in 1998.
The Loan Committee, whose members include C. Edward Boutonnet
(Vice Chairman), Bradford G. Crandall (Chairman), Alfred P. Glover,
Michael Lapsys and Louis A. Souza has responsibility for establishing
loan policy and approving loans which exceed certain dollar limits.
The Loan Committee met twenty four (24) times in 1998.
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 met eleven (11) times
in 1998.
During 1998, 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.
Compensation of Directors
The fees paid to directors during 1998 included a base fee of
$2,050 per month for attendance at Board meetings of the Corporation
and the Subsidiaries. In addition to the base fee, the Loan Committee
Chairman received $200 per month, the Chairmen of the Audit,
ALCO/Compliance/Shareholder Relations, 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 $233,000 in 1998.
<PAGE> 9
EXECUTIVE COMPENSATION
Set forth below is the summary compensation paid or accrued
during the three years ended December 31, 1998 to Nick Ventimiglia,
John McCarthy, Robert M. Stanberry and Robert C. Blatter, the only
executive officers of the Corporation and/or the Subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LONG - TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSTION AWARDS PAYOUTS
-------------------------------- --------------------------- --------
(F) (G) (I)
(E) RESTRICTED SECURITIES (H) ALL OTHER
(A) (C) (D) OTHER ANNUAL STOCK UNDERLYING LTIP COMPEN-
Name and (B) SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARs PAYOUTS SATION
Principal Position YEAR ($) 1/ ($) 2/ ($)3/ ($) (#)4/ ($) ($)5/
- -------------------------------- ---- -------- ------- ------------ ---------- -------------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nick Ventimiglia, Chief 1998 $240,000 $154,030 -- -- -- -- $2,000
Executive Officer; President, 1997 200,000 154,030 -- -- -- -- 1,900
Central Coast Bancorp 1996 200,000 146,000 -- -- 30,938 -- 1,900
and Bank of Salinas
- -------------------------------
John F. McCarthy, Executive 1998 150,000 100,119 -- -- -- -- 2,000
Vice President, Chief Operating 1997 130,000 100,119 -- -- -- -- 1,900
Officer and Corporate Secretary; 1996 124,142 94,900 -- -- 20,625 -- 1,722
President, Cypress Bank
- --------------------------------
Robert M. Stanberry, Senior 1998 14,626 -- -- -- 18,750 -- --
Vice President and Chief 1997 -- -- -- -- -- -- --
Financial Officer 1996 -- -- -- -- -- -- --
- --------------------------------
Robert C. Blatter, Senior Vice 1998 85,000 60,000 -- -- -- -- 1,981
President and Loan 1997 76,000 58,531 -- -- -- -- 1,840
Administrator 1996 75,000 55,480 -- -- 10,313 -- 1,819
- --------------------------------
</TABLE>
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 401(k) Plan.
The salary paid to Mr. Stanberry in 1998 was the amount earned in
the period from the date of initial employment, November 16, 1998.
2/ Amounts indicated as bonus payments were earned for performance
during 1998, 1997 and 1996.
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 1998, 1997 and 1996.
4/ Amounts shown represent the number of shares granted. The
Corporation had a 1982 Stock Option Plan (the "1982 Plan") pursuant
to which options could be granted to directors and key, full-time
salaried, officers and employees of the Corporation and the
Subsidiaries. The 1982 Plan expired by its terms in 1993. Options
granted under the 1982 Plan were either incentive options or
non-statutory options. Options granted under the 1982 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 of the Corporation, all
outstanding options under the 1982 Plan will become fully vested and
exercisable. Options granted under the 1982 Plan were adjusted to
protect against dilution in the event of certain changes in the
Corporation's capitalization, including stock splits and stock
dividends. The Corporation's 1994 Stock Option Plan, as amended,
(the "1994 Plan") is substantially similar to the 1982 Plan
regarding provisions related to option grants, vesting and
dilution. 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. There were 18,750 options granted
to Mr. Stanberry during 1998.
5/ Amounts shown for each named executive officer are 401(k) matching
contributions for the year indicated.
<PAGE> 10
The following table sets forth certain information concerning the
granting of options under the 1994 Plan during the year ended December
31, 1998.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------
Individual Grants
- -------------------------------------------------------------------------------
Number of Percentage of
Securities Total
Underlying Options/SARs
Option/SARs Granted to Exercise of
Granted Employees in Base Price Expiration
(#)1/ Fiscal Year ($/Sh)2/ Date
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert M. Stanberry 18,750 100% $ 16.30 1/19/08
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
1/ Options granted under the 1984 Plan were either incentive options
or non-statutory options. Options granted under the 1982 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 of the Corporation, all outstanding
options under the 1984 Plan will become fully vested and exercisable.
Options granted under the 1984 Plan were adjusted to protect against
dilution in the event of certain changes in the Corporation's
capitalization, including stock splits and stock dividends. 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.
2/ The exercise price was determined based upon the closing price of
the Corporation's Common Stock on the grant date.
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 1998, 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, 1998 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 1982 and 1994 Stock Option
Plans.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Shares Options/SARs Options/SARs
Acquired Value at Fiscal Year-End at Fiscal Year-End ($)
on Realized (#) Exercisable/
Name Exercise ($) Exercisable/Unexercisable Unexercisable
(a) (#)(b) (c) (d) (e) 1/
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nick Ventimiglia - - 35,393/20,501 277,031/165,246
- ------------------------------------------------------------------------------------------------
John McCarthy 5,045 84,151 69,948/7,013 861,840/42,052
- -------------------------------------------------------------------------------------------------
Robert M.Stanberry - - - /18,750 - /13,125
- -------------------------------------------------------------------------------------------------
Robert C.Blatter - - 17,568/8,118 165,234/56,878
- --------------------------------------------------------------------------------------------------
</TABLE>
1/ The aggregate value has been determined based upon the closing price
for the Corporation's Common Stock at exercise or year-end, minus
the exercise price.
<PAGE> 12
Employment Contracts and Termination of Employment and Change in
Control Arrangements
The Corporation has entered into employment agreements with
Messrs. Ventimiglia, President and Chief Executive Officer; McCarthy,
Executive Vice 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 for 1998 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 the above named employees. 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.
<PAGE> 13
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The compensation of the executive officers of the Corporation and
the Subsidiaries is reviewed and approved annually by the Board of
Directors on recommendation by the Premises, Compensation and
Performance Committee (the "Committee"). During 1998, 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 Subsidiaries
during 1998.
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 1998, bonuses were recommended by the
Committee for the named executive officers as represented 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 Summary Compensation Table, Option Grant Table and
Option/SAR Exercise Table, and notes thereto for 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 (20% of salary deferred for 1998). Executive
officers are eligible to participate in the 401(k) plan. See Summary
Compensation Table.
<PAGE> 14
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 SNL Securities Index of
National Peer Banks (asset size of $250 million-$500 million), the S&P
500 and the Nasdaq Bank Index as of the end of each of the
Corporation's last five fiscal years. The Nasdaq Bank Index has been
added to the graph in order to better represent the Company's stock
performance against its peers in conjunction with the Company becoming
listed on the Nasdaq Stock Market as of February, 1998 (comparison to
the SNL Securities Index will be eliminated in 2000).
The following table assumes that $100.00 was invested on December 31,
1993 in Central Coast Bancorp Common Stock and each index, and that all
dividends were reinvested. Returns have been adjusted for stock
dividends and stock splits declared by Central Coast Bancorp.
Shareholder returns over the indicated period should not be considered
indicative of future shareholder returns.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Index
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Central Coast Bancorp 100.00 121.02 160.43 233.99 344.82 363.53
S&P 500 100.00 101.32 139.39 171.26 228.42 293.69
SNL $250M-$500M Banks 100.00 107.89 145.61 189.07 327.00 292.84
Nasdaq Bank Stocks 100.00 99.64 148.38 195.91 328.02 324.90
</TABLE>
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, 1998, except for
Messrs. Mraule, McCarthy and Ventimiglia, who each filed one report on
Form 5 to report a transaction not reported timely on a Form 4, 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.
<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others
There have been no transactions, or series of similar
transactions, during 1998, or any currently proposed transaction, or
series of similar transactions, to which the Corporation or the
Subsidiaries 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 Subsidiaries, executive officer of the Corporation
or the Subsidiaries, 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 1998 of the type
requiring disclosure under Item 404(b) of Regulation S-K.
Indebtedness of Management
The Corporation, through the Subsidiaries, 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 1998 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 Subsidiaries 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.
<PAGE> 16
PROPOSAL NO. 2
RATIFICATION AND APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP served the Corporation and the
Subsidiaries as independent public accountants for the 1998 fiscal
year. Deloitte & Touche LLP has no interest, financial or otherwise,
in the Corporation or the Subsidiaries. The services rendered by
Deloitte & Touche LLP during the 1998 fiscal year were audit services,
consultation in connection with various accounting matters and
preparation of corporation income tax returns. The Boards of Directors
of the Corporation and the Subsidiaries approved each professional
service rendered by Deloitte & Touche LLP during the 1998 fiscal year,
and the possible effect of each such service on the independence of
that firm was considered by the Boards of Directors before such service
was rendered.
Representatives of Deloitte & Touche LLP are expected to be
present at the Meeting and will have an opportunity to make a statement
if they so desire and to answer appropriate questions.
The Board of Directors of the Corporation has selected Deloitte &
Touche LLP to serve as the independent public accountants for the 1998
fiscal year and recommend that the shareholders vote FOR approval to
ratify the selection of Deloitte & Touche LLP as the Corporation's
independent public accountants for the 1998 fiscal year.
<PAGE> 17
ANNUAL REPORT
The Annual Report of the Corporation containing audited financial
statements for the fiscal year ended December 31, 1998 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 JOHN F. McCARTHY, SECRETARY, CENTRAL COAST
BANCORP, 301 MAIN STREET, SALINAS, CALIFORNIA, 93901.
SHAREHOLDERS' PROPOSALS
Next year's Annual Meeting of Shareholders will be held on May
25, 2000. The deadline for shareholders to submit proposals for
inclusion in the Proxy Statement and form of Proxy for the 1999 Annual
Meeting of Shareholders is December 30, 1999. 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 30, 1999 deadline. All proposals should be
submitted by Certified Mail - Return Receipt Requested, to John F.
McCarthy, 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
Salinas, California
April 29, 1999 By: /S/ JOHN F. MCCARTHY
-------------------------
John F. McCarthy,
Secretary
<PAGE> 18
CENTRAL COAST BANCORP
Proxy for the Annual Meeting of Shareholders To Be Held May 24, 1999
This Proxy Is Solicited on Behalf of the Board of Directors
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 29, 1999, 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, standing 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 Monday, May 24, 1999, 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 other matters which may be
properly presented for action at the Meeting or any postponements or
adjournments thereof. The above-named proxy holders are hereby granted
discretionary authority to cumulate votes represented by the shares
covered by this Proxy in the election of directors.
UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED "FOR" THE FOLLOWING
ITEMS:
1.To elect as directors the nominees set forth below:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees
listed below.
INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's name in the
list below:
C.Edward Boutonnet Michael T. Lapsys Louis M. Souza
Bradford G. Crandall Duncan L. McCarter Mose E.Thomas,Jr.
Alfred P. Glover Robert M. Mraule,
Nick Ventimiglia D.D.S.,M.D.
2. To approve the appointment of Deloitte & Touche LLP as
independent public accountants for the 1999 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The proxies will vote according to their discretion on all other
matters which may be properly presented for action at the meeting.
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS AND
MAY BE REVOKED PRIOR TO ITS EXERCISE. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE ELECTION 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, PLEASE
SIGN AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
I/We do [ ] or do not [ ]
expect to attend this Meeting.
Shareholder Signature___________________________ Dated:__________________,1999
Please date and sign exactly as your name(s) appear(s). When signing as
attorney, executor, administrator, trustee, or guardian, please give
full title. If more than one trustee, all should sign. All joint owners
should sign.
