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Books are stored in the folder /User/<Username>/Documents/My Books/Reader. You could do a search for EPUB files to double-check you don't have them anywhere else on your hard-drive.
I don't know where annotations are stored since I stopped using the Sony Reader software for this purpose. I use the Evernote feature now on the reader. Annotations are stored in an SQLite database, books.db, on your Reader. I hypothesize that they might be stored similarly for the desktop software in the db file in your Mac Library folder. However, I wouldn't mess around with it without having experience or help in this area.
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