<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Bay Commercial Services
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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 was calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 3, 1997
2:30 o'clock P.M.
Dear Shareholder:
The Annual Meeting of Shareholders of Bay Commercial Services, a
California corporation and bank holding company for Bay Bank of Commerce, will
be held at Strizzi's Restaurant, 1376 East 14th Street, San Leandro, California
on Tuesday, June 3, 1997 at 2:30 p.m.
The Annual Meeting of Shareholders will be held for the following
purposes:
1. To elect Directors;
2. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent public accountants; and
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 Bay
Commercial Services are set forth in the accompanying Proxy Statement and are
incorporated herein by reference.
The Bylaws of Bay Commercial Services provide 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
twenty-one (21) days nor more than sixty (60) days prior to any meeting of
shareholders called for the election of directors; provided however, that if
less than twenty-one (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 the meeting was mailed; provided
further, that if notice of such meeting is sent by third-class mail as permitted
by Section 6 of the Bylaws, 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.
Only shareholders of record at the close of business on April 7, 1997
are entitled to notice of and to vote at this meeting and any adjournments
thereof.
By Order of the Board of Directors,
/s/ Randall D. Greenfield
Randall D. Greenfield, Secretary
San Leandro, California
April 28, 1997
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
THE ENCLOSED POST-PAID ENVELOPE.
<PAGE> 3
Mailed to shareholders
on or about April 28, 1997
PROXY STATEMENT
OF
BAY COMMERCIAL SERVICES
1495 EAST 14TH STREET
SAN LEANDRO, CALIFORNIA 94577
(415) 357-2265
INFORMATION CONCERNING THE SOLICITATION
VOTE BY PROXY
This Proxy Statement is furnished in connection with the solicitation
of the enclosed Proxy by, and on behalf of, the Board of Directors of Bay
Commercial Services, a California corporation and bank holding company (the
"Company") for Bay Bank of Commerce (the "Bank"), for use at the 1997 Annual
Meeting of Shareholders of the Company to be held at Strizzi's Restaurant, 1376
East 14th Street, San Leandro, California at 2:30 o'clock p.m. on Tuesday, June
3, 1997 and at all adjournments thereof (the "Meeting").
Any person giving a Proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to its exercise. It is revocable prior to the
Meeting by an instrument revoking it or by a duly executed Proxy bearing a later
date delivered to the Secretary of the Company. Such Proxy is also revoked if
the shareholder is present at the Meeting and elects to vote in person.
Unless contrary instructions are indicated on the Proxy, all shares
represented by valid Proxies received pursuant to this solicitation (and not
revoked before they are voted) will be voted as follows:
FOR the election of all nominees for director named herein; and
FOR ratification of the selection of Deloitte & Touche LLP as the
Company's independent public accountants.
In the event a shareholder specifies a different choice on the Proxy,
his or her shares will be voted in accordance with the specification so made. In
addition, such shares will, at the Proxy holders' discretion, be voted on such
other matters, if any, which may come before the Meeting (including any proposal
to adjourn the Meeting). Under SEC rules, boxes and a designated blank space are
provided on the proxy card for shareholders to mark if they wish either to
abstain on one or more of the proposals or to withhold authority to vote for one
or more nominees for director.
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1996 accompanies this Proxy Statement. Additional copies of the
Annual Report are available upon request of Randall D. Greenfield, Chief
Financial Officer and Secretary of the Company. THE COMPANY'S ANNUAL REPORT TO
THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-KSB MAY BE OBTAINED BY ANY
SHAREHOLDER OF THE COMPANY, WITHOUT CHARGE, BY WRITING TO RANDALL D. GREENFIELD,
CHIEF FINANCIAL OFFICER, BAY COMMERCIAL SERVICES, 1495 EAST 14TH STREET, SAN
LEANDRO, CALIFORNIA 94577.
<PAGE> 4
COST OF PROXY SOLICITATION
The Company 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 Company and the
Bank may (without additional compensation) solicit Proxies by telephone or
personal interview, the costs of which the Company will bear.
VOTE REQUIRED
The six (6) nominees receiving the greatest number of votes cast by the
holders of the Company's Common Stock entitled to vote at the Meeting will be
elected directors of the Company.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented and voting at the Meeting is necessary for
the ratification of the selection of auditors.
METHOD OF COUNTING VOTES
Shareholders of the Company's Common Stock 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 and such shareholder may cast all his or her votes for a single
candidate or distribute such votes among any or all of the candidates 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 or candidates'
names have 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 votes. If any shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination. An
opportunity will be given at the Meeting prior to the voting for any shareholder
who desires to do so to announce his or her intention to cumulate his or her
votes. The proxy holders are given discretionary authority, under the terms of
the Proxy, to cumulate votes represented by shares for which they are named in
the Proxy.
An automated system administered by the Inspectors of Election, who are
employees of Chase Mellon Shareholders Services, the Company's independent
Transfer Agent and Registrar, will tabulate votes cast at the Meeting.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for the purpose of determining whether a
quorum is present, and each is tabulated separately. In determining whether a
proposal has been approved, abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders and broker non-votes are not counted
as votes for or against a proposal or as votes present and voting on the
proposal.
SHAREHOLDERS ENTITLED TO VOTE
Only shareholders of record on April 7, 1997 (the "Record Date") will
be entitled to notice of and to vote at the Meeting. At the close of business on
that date, the Company had outstanding 1,076,720 shares of its no par value
Common Stock (the "Common Stock").
-2-
<PAGE> 5
PRINCIPAL SHAREHOLDERS
As of the Record Date no person or group known to the Company owned
beneficially more than five percent (5%) of the outstanding shares of its Common
Stock except as described below:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP SHARES BENEFICIALLY OWNED
- ------------------------------------ -------------------- -------------------------
<S> <C> <C>
Joshua Fong, O.D. 64,164(1) 5.87%(1)
1652 Daily Court
San Leandro, CA 94577
Patrick Hopper 82,000(2) 7.62%
350 East Desert Inn Road
Las Vegas, NV 89109
Richard M. Kahler 154,749(3) 13.21%(3)
1495 East 14th Street
San Leandro, CA 94577
William E. Peluso 93,844(4) 8.60%(4)
30 Marina
San Leandro, CA 94574
Bay Commercial Services 145,616(5) 13.52%(5)
Employee Stock Ownership Plan
</TABLE>
- ---------------
(1) Includes 4,455 shares in Dr. Fong's KEOGH account and 16,000 shares
subject to exercisable options under the Bay Commercial Services 1994
Stock Option Plan (the "1994 Stock Option Plan").
(2) Based on information available to the Company and not independently
confirmed by the shareholder.
(3) Includes 2,292 shares held in Individual Retirement Accounts belonging to
Mr. Kahler, 1,079 shares held in an Individual Retirement Account
belonging to Mr. Kahler's wife, 24,432 shares allocated as of December 31,
1996 to Mr. Kahler's account pursuant to the Bay Commercial Services
Employee Stock Ownership Plan (the "ESOP") and 94,500 shares subject to
options which are presently exercisable under the Bay Commercial Services
1982 Amended and Restated Stock Option Plan (the "1982 Stock Option
Plan"). Also includes 631 unallocated shares held by the ESOP as to which
Mr. Kahler disclaims beneficial ownership. Mr. Kahler is a member of the
Bank's ESOP Administrative Committee (see note (5) below).
(4) Includes 42,997 shares held in an Individual Retirement Account belonging
to Mr. Peluso's wife and 14,800 shares subject to options which are
presently exercisable under the 1994 Stock Option Plan.
(5) Shares allocated to a participant's account in the ESOP may be voted by
the participant. The ESOP Administrative Committee is authorized pursuant
to the ESOP to vote any unallocated shares of Company Common Stock held by
the ESOP. The ESOP Administrative Committee is composed of Mr. Kahler,
President and Chief Executive Officer of the Bank, Dimitri V. Koroslev,
Chairman of the Board of the Bank, and a non-officer employee of the Bank.
As of December 31, 1996, there were 631 unallocated shares of Company
Common Stock held by the ESOP.
-3-
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS OF THE COMPANY
The Bylaws of the Company provide a procedure for nomination for election
of members of the Board of Directors, which procedure is printed in full in the
Notice of Annual Meeting of Shareholders accompanying this Proxy Statement.
Nominations not made in accordance therewith may be disregarded by the Chairman
of the Meeting and, upon his or her instruction, the inspectors of election may
disregard all votes cast for such nominee(s).
The authorized number of directors to be elected at the Meeting is six
(6). 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 following six (6)
nominees, all of whom are incumbent directors, recommended by the Board of
Directors, unless authority to vote for the election of directors is withheld:
JOSHUA FONG, O.D., WILLIAM R. HENSON, RICHARD M. KAHLER, DIMITRI V. KOROSLEV,
WILLIAM E. PELUSO and OSWALD "OZZIE" A. RUGAARD. If any of the nominees should
unexpectedly decline or be unable to act as a director, the 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 become unavailable
and has no present intention to nominate persons in addition to or in lieu of
those named above.
The following table sets forth certain information with respect to the
directors of the Company, as well as all directors and officers of the Company
as a group. All of the shares shown in the following table are owned both of
record and beneficially and the person named possesses sole voting power, except
as otherwise indicated in the notes to the table.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF THE RECORD DATE
---------------------------
POSITIONS AND OFFICES DIRECTOR
DIRECTORS AND NOMINEES AGE HELD WITH THE COMPANY SINCE AMOUNT PERCENT OF CLASS
- ---------------------- --- --------------------- ----- ------ ----------------
<S> <C> <C> <C> <C> <C>
Joshua Fong, O.D. 73 Chairman of the Board 1983 64,164(1) 5.87%
and Director
William R. Henson 72 Director 1983 16,000(2) 1.46%
Richard M. Kahler 61 President, Chief 1983 154,749(3) 13.21%
Executive Officer and
Director
Dimitri V. Koroslev 51 Director 1985 35,354(4) 3.24%
William E. Peluso 83 Director 1986 93,844(5) 8.60%
Oswald (Ozzie) A. Rugaard 66 Director 1987 18,607(6) 1.71%
All directors and officers of
the Company as a group (8
in number) 438,240(7) 34.19%
</TABLE>
- -------------------
(Notes appear on next page.)
-4-
<PAGE> 7
(1) See note (1) to "Principal Shareholders."
(2) Includes 15,765 shares subject to exercisable options under the 1994 Stock
Option Plan.
(3) See note (3) to "Principal Shareholders."
(4) Includes 12,806 shares held in an Individual Retirement Account belonging
to Mr. Koroslev, 3,235 shares held in an Individual Retirement Account
belonging to Denise N. Koroslev, 223 shares held by Denise Koroslev, 80
shares held by Dimitri V. and Denise N. Koroslev as custodians for Heather
J. and Vasily D. Koroslev and 15,200 shares subject to exercisable options
under the 1994 Stock Option Plan. Also includes 631 unallocated shares
held by the ESOP as to which Mr. Koroslev disclaims beneficial ownership.
Mr. Koroslev is a member of the Bank's ESOP Administrative Committee (see
note (5) to "Principal Shareholders").
(5) See note (4) to "Principal Shareholders."
(6) Includes 14,400 shares subject to exercisable options under the 1994 Stock
Option Plan.
(7) Includes 205,135 shares subject to exercisable options under the 1994
Stock Option Plan and the 1982 Stock Option Plan. Also includes 42,665
shares allocated and 631 shares unallocated as of December 31, 1996
pursuant to the ESOP.
The following table sets forth certain information with respect to the
executive officers(1) of the Company:
<TABLE>
<CAPTION>
Positions Held With Officer of the
Name Age the Company and the Bank Company Since
- ---- --- ------------------------ -------------
<S> <C> <C> <C>
Richard M. Kahler 61 President and Chief Executive Officer 1983
of the Company and the Bank
Randall D. Greenfield 48 Vice President, Chief Financial 1983
Officer and Secretary of the Company;
Senior Vice President, Chief Administrative
Officer and Secretary of the Bank
Robert A. Perantoni 63 Senior Vice President and Senior 1993
Loan Officer of the Bank
</TABLE>
- ------------------------
(1) As used throughout this Proxy Statement, the term "executive officer"
means the president, any vice president in charge of a principal business
unit or function, any other officer or person who performs a policy making
function for the Company, and any executive officer of the Company's
subsidiaries who performs policy making functions for the Company.
Each executive officer serves on an annual basis and must be selected by
the Board of Directors annually pursuant to the Bylaws of the Company or the
Bank.
The following information with respect to the principal occupation and
employment of each director and executive officer, the principal business of the
corporation or other organization in which such occupation and employment is
carried on, and in regard to other affiliations and business experience during
the past five (5) years, has been furnished to the Company by the respective
directors and executive officers. Except for the Bank, none of the corporations
or organizations discussed below is an affiliate of the Company.
JOSHUA FONG, O.D. is the Chairman of the Board of Directors of the Company
and is and has been a practicing optometrist since 1952. Dr. Fong is the
President of the Personnel Relations Board of the City of San Leandro. Dr. Fong
has been a partner in the Castro Valley Optometry Group since 1989 and has been
a consultant to the San Leandro Optometry Group since 1993. Dr. Fong has been a
Director of the San Leandro Chamber of
-5-
<PAGE> 8
Commerce, a trustee of Humana Hospital of San Leandro and of the Oakland Chinese
Presbyterian Church, the President of the San Leandro Breakfast Club, Kiwanis
Club of East Oakland and the Wa-Sung Service Club. He is a member of the
Alameda-Contra Costa Counties Optometric Society, the California Optometric
Society and the American Optometric Society.
RANDALL D. GREENFIELD is Vice President, Chief Financial Officer and
Secretary of the Company and Senior Vice President, Chief Administrative Officer
and Secretary of the Bank. Prior to joining the Bank in 1981, he served as
Cashier-Treasurer of Centennial Bank in Hayward, California after joining that
Bank as Controller in 1977. Mr. Greenfield worked with the First State Bank of
Northern California in San Leandro in 1974 and 1975 in Bank Operations and as
the Assistant Auditor. Mr. Greenfield is a graduate of the University of
Washington in Seattle. He is a past Director and Treasurer of the San Leandro
Boys and Girls Club and past President of the Golden Gate Chapter of the Bank
Administration Institute.
WILLIAM R. HENSON is and has been since 1963 the President of Superior
Home Loans, a California loan brokerage firm, and of Superior Financial
Services, a personal property brokerage firm. Mr. Henson is a former Director
and past President of the Southern Alameda County Board of Realtors, a past
Director of the California Association of Realtors and a past President of the
California Independent Mortgage Brokers Association.
RICHARD M. KAHLER is the President and Chief Executive Officer of the
Company and the Bank. Previously, Mr. Kahler served as President and Chief
Executive Officer of Centennial Bank from 1976 to 1979, when he left to organize
Bay Bank of Commerce. Prior to 1976, Mr. Kahler was a Regional Vice President of
Camino California Bank in San Francisco, and a Vice President in Lloyds
Bank-Commercial Division, in charge of Southern Alameda County. He is a member
of the San Leandro Chamber of Commerce and has served as President of the Pinole
Chamber and as a Director of the Hayward and Castro Valley Chambers. He has also
been a Vice President of the Fruitvale and Pinole Lions Clubs.
DIMITRI V. KOROSLEV is Chairman of the Board of Directors of the Bank. He
has engaged in asset based lending since 1971. Mr. Koroslev is President and
director of Bay Business Credit, an asset based lender in Walnut Creek. From
1982 until 1988 Mr. Koroslev served as Senior Vice President/Manager of
Commonwealth Financial Corporation, an asset based lender in Walnut Creek,
California. From 1980 to 1982, he was Vice President/Manager of Foothill Capital
Corp., an asset based lender. He is a Founding Director of the Northern
California Commercial Finance Conference, a trade association.
WILLIAM E. PELUSO is an East Bay restaurant consultant who has owned
numerous establishments since 1946. In 1965 he developed the Blue Dolphin
restaurant at the San Leandro Marina, as part of the San Leandro Shoreline
redevelopment project. The Blue Dolphin and the San Leandro Marina have been a
focal point of community activity since that time. Mr. Peluso is past President
of the Shoreline Business Association (1965-73) and the Southern Alameda County
Restaurant Association (1975-83). He is a Director of the San Leandro Boys Club
and has served as a Director of the San Leandro Chamber of Commerce. Mr. Peluso
currently serves on the Oakland Coliseum Task Force. He is a member of the Elks
and the Native Sons of California.
ROBERT A. PERANTONI is the Senior Vice President and Senior Lending
Officer of the Bank. Previously, Mr. Perantoni was a Vice President at Sanwa
Bank, from 1963 to 1993.
OSWALD (OZZIE) A. RUGAARD is an independent sales consultant since 1995
and serves in such capacity for Bay Airgas. He also serves on the Welding
Advisory Board of Chabot College, Las Positas College, and Hayward Area Eden
ROP. He was a Sales Manager for Middleton Bay Airgas in 1994 and was the
President and Sales Manager of Middleton Welder's Supply Company in San Leandro
from 1948 to 1993. He was President of the San Leandro Chamber of Commerce in
1984, President of San Leandro Manufacturer's Association in 1970 and 1976, past
Director of San Leandro Rotary Club, a trustee of Humana Hospital of San Leandro
and past President of the Independent Welder's Association.
-6-
<PAGE> 9
No director or executive officer of the Company has any family
relationship with any other director or executive officer of the Company.
No director of the Company is a director of any other company with a class
of securities registered pursuant to section 12 or subject to the requirements
of section 15(d) of the Securities Exchange Act of 1934, as amended, or of any
company registered as an investment company under the Investment Company Act of
1940, as amended.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has established a standing Audit
Committee, with Dimitri V. Koroslev as Chairman, Joshua Fong, Oswald Rugaard,
William R. Henson and William E. Peluso as members.
The Audit Committee met once during 1996. The functions of the Audit
Committee are: (1) to recommend the appointment of and to oversee a firm of
independent certified public accountants whose duty is to audit the books and
records of the Company and the Bank for the fiscal year for which they are
appointed; (2) to monitor and recommend accounting policies to the Boards of
Directors; (3) to monitor and analyze the results of internal and regulatory
examinations; (4) to monitor the Company's and the Bank's financial and
accounting procedures and financial reporting; and (5) to assure compliance with
applicable legal and regulatory requirements with respect to audit committee
functions, internal controls, management and auditor reporting.
The Company does not have a nominating or compensation committee. The
Board of Directors of the Company performs the functions of these committees.
The Board of Directors of the Company met thirteen (13) times during 1996.
All directors of the Company attended at least 75% of the meetings of the Board
of Directors and the meetings of committees on which each director served.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent 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.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. To the best knowledge of the Company, there are no greater than
ten-percent holders of the Company's Common Stock other than Richard M. Kahler,
President and Chief Executive Officer of the Company and the Company's Employee
Stock Ownership Plan.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, for fiscal year 1996, the
officers and directors of the Company complied with all applicable filing
requirements, except that director Dimitri Koroslev failed to file on a timely
basis a Report of Changes in Beneficial Ownership on Form 4 to report one
transaction in securities, which was subsequently reported during 1996.
-7-
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table sets forth a summary of the compensation paid during
the Company's past three fiscal years for services rendered in all capacities to
Richard M. Kahler, President and Chief Executive Officer of the Company, Randall
D. Greenfield, Vice President and Chief Financial Officer of the Company and
Robert A. Perantoni, Senior Vice President and Senior Lending Officer of the
Bank, the only executive officers of the Company whose annual base compensation
and bonus exceeded $100,000 during the Company's 1996 fiscal year.
Summary Compensation Table
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Annual compensation
---------------------------------------
Long term
compensation
Other annual Awards/Securities All other
Name and principal compensation Underlying compensation
position Year Salary ($) Bonus ($) ($)(1) Options (#) ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RICHARD M. KAHLER,
President and C.E.O 1996 $152,295 $63,915 $ 1,141 0 $40,915(2)
- -----------------------------------------------------------------------------------------------------------------
1995 $152,295 $55,596 $ 784 0 $47,625
---------------------------------------------------------------------------------
1994 $139,603 $32,709 $ 807 0 $ 8,447
- -----------------------------------------------------------------------------------------------------------------
RANDALL D. GREENFIELD,
Vice President and
C.F.O 1996 $ 95,430 $31,958 $ 6,600 0 $17,425(3)
- -----------------------------------------------------------------------------------------------------------------
1995 $ 93,843 $27,798 $ 6,600 1,325 $21,865
---------------------------------------------------------------------------------
1994 $ 85,910 $16,355 $ 6,600 0 $ 7,663
- -----------------------------------------------------------------------------------------------------------------
ROBERT A. PERANTONI,
Senior Vice President
and Senior Lending
Officer 1996 $ 99,250 $31,958 $ 5,480 0 $ 8,178(4)
- -----------------------------------------------------------------------------------------------------------------
1995 $ 97,000 $27,798 $ 4,141 0 $13,175
---------------------------------------------------------------------------------
1994 $ 89,000 $16,355 $ 4,173 15,000 $ 4,176
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consisting of the dollar value of the use of a Company automobile or paid
auto allowance.
(2) Includes (for 1996) the cash value of shares allocated to Mr. Kahler's
account in the ESOP ($14,470), $4,750 contributed by the Company to Mr.
Kahler's account in the Company's 401(k) Plan, $19,500 in directors' fees
paid by the Bank and the Company and $2,195 in term life insurance
payments made by the Company on behalf of Mr. Kahler.
(3) Includes (for 1996) the cash value of shares allocated to Mr. Greenfield's
account in the ESOP ($8,970), $3,081 contributed by the Company to Mr.
Greenfield's account in the Company's 401(k) and $174 in life insurance
premium payments made by the Company on behalf of Mr. Greenfield.
(4) Includes (for 1996) the cash value of shares allocated to Mr. Perantoni's
account in the ESOP ($4,300), $3,176 contributed by the Company to Mr.
Perantoni's account in the Company's 401(k) Plan and $702 in life
insurance premium payments made by the Company on behalf of Mr. Perantoni.
-8-
<PAGE> 11
OPTION GRANTS AND EXERCISES
STOCK OPTION GRANTS
The Company has established the 1994 Stock Option Plan, which was approved
by the Company's shareholders at the 1994 Annual Meeting of Shareholders. No
grants of options were made to the executive officers or the employees of the
Company and the Bank during fiscal year 1996.
STOCK OPTION EXERCISES
No stock options outstanding under the 1982 Stock Option Plan or the 1994
Stock Option Plan were exercised by any executive officer of the Company during
the Company's 1996 fiscal year.
The following table shows the value at December 31, 1996 of unexercised
options held by the named executive officers of the Company under the 1982 Stock
Option Plan and the 1994 Stock Option Plan:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
- ----------------------------------------------------------------------------------------------------------
Number of
securities
underlying Value of
unexercised options unexercised in-the-
at fiscal year-end money options at
(#) fiscal year-end ($)
Shares
acquired on Value Realized exercisable/ exercisable/
Name exercise (#) ($) unexercisable unexercisable(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard M. Kahler -0- -0- 94,500/0 $437,063/$0
- ----------------------------------------------------------------------------------------------------------
Randall D. Greenfield -0- -0- 19,205/795 $89,419/$4,571
- ----------------------------------------------------------------------------------------------------------
Robert A. Perantoni -0- -0- 10,000/5,000 $57,500/$28,750
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on a bid price per share at December 31, 1996 of $10.00.
DIRECTOR COMPENSATION
During 1996, the Company paid directors' fees at the rate of $100 for each
regular meeting of the Board of Directors. During 1996, the Bank paid directors'
fees at the rate of $400 for each regular meeting of the Board of Directors,
$300 for each meeting of the Loan Committee and $50 for each meeting of other
committees of the Bank's Board of Directors. Accordingly, aggregate directors'
fees in the amount of $7,800 and $120,800 were paid by the Company and the Bank,
respectively, during 1996.
Effective April 1, 1997, directors of the Bank will be paid an annual
retainer of $20,000, while directors of the Company will be paid an annual
retainer of $1,200 for service as a director. Dr. Fong also will receive a
community liaison fee of $275 per month.
-9-
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no material transactions since January 1, 1996, nor are
there any currently proposed transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeds
$60,000 and in which any director, executive officer, five-percent shareholder
or any member of the immediate family of any of the foregoing persons had, or
will have, a direct or indirect material interest.
INDEBTEDNESS OF MANAGEMENT
Some of the directors and executive officers of the Company and members of
their immediate families and the companies with which they have been associated
have been customers of, and have had banking transactions with, the Bank in the
ordinary course of the Bank's business since January 1, 1996, and the Bank
expects to have such banking transactions in the future. All loans and
commitments to lend included in such transactions were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and, in the opinion of the
Bank, did not involve more than the normal risk of collectability or present
other unfavorable features.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP, which served the Company and the Bank
as independent public accountants for 1996, has been selected by the Audit
Committee of the Board of Directors of the Company to be its independent public
accountants for 1997. All Proxies will be voted "FOR" ratification of such
selection unless authority to vote for the ratification of such selection is
withheld or an abstention is noted. If the nominee should unexpectedly for any
reason decline or be unable to act as independent public accountants, the
Proxies will be voted for a substitute nominee to be designated by the Audit
Committee.
Representatives from the accounting firm of Deloitte & Touche LLP will be
present at the Meeting, will be afforded the opportunity to make a statement if
they desire to do so, and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Next year's Annual Meeting of Shareholders will be held on or about May
26, 1998. The deadline for shareholders to submit proposals to be considered for
inclusion in the Company's Proxy Statement and Form of Proxy for the 1998 Annual
Meeting of Shareholders is December 29, 1997, unless such meeting date is
changed by more than 30 calendar days in which case such proposals must be
received by a reasonable time prior to the mailing of the Proxy Statement.
OTHER PROPOSED ACTION
The Board of Directors is not aware of any other business which will come
before the Meeting, but if any such matters are properly presented, Proxies
solicited hereby will be voted in accordance with the best judgment of the
persons holding the Proxies. All shares represented by duly executed Proxies
will be voted at the Meeting.
BAY COMMERCIAL SERVICES
San Leandro, California
April 28, 1997
-10-
<PAGE> 13
BAY COMMERCIAL SERVICES
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 3, 1997
THIS PROXY IS SOLICITED BY AND 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 Bay Commercial Services, and
the accompanying Proxy Statement dated April 28, 1997 and revoking any Proxy
heretofore given, hereby constitutes and appoints Richard M. Kahler, Joshua
Fong, O.D., and Dimitri Koroslev, 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 Bay Commercial Services, a California corporation and bank
holding company of Bay Bank of Commerce, standing in the name of the
undersigned which the undersigned could vote if personally present and acting
at the Annual Meeting of Shareholders of Bay Commercial Services, to be held at
Strizzi's Restaurant, 1376 East 14th Street, San Leandro, California on
Tuesday, June 3, 1997 at 2:30 p.m. or at any 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 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.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE> 14
Please mark
your votes as
indicated in
this example. /X/
1. To elect as Directors the nominees set forth below.
FOR WITHHOLD
all nominees listed below AUTHORITY
(except as marked to the to vote for all
contrary below). 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:
JOSHUA FONG, O.D., WILLIAM R. HENSON, RICHARD M. KAHLER, DIMITRI V. KOROSLEV,
WILLIAM E. PELUSO, OSWALD "OZZIE" A. RUGAARD.
2. To approve the proposal to ratify the appointment of Deloitte & Touche LLP
as independent public accountants for the Company's 1997 fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxy holders are authorized to vote upon such
other business as may properly come before the meeting.
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 POST-PAID ENVELOPE.
I/We do ___ or do not ___ expect to attend
this meeting.
THIS PROXY IS SOLICITED BY, AND ON BEHALF OF,
THE BOARD OF DIRECTORS AND MAY BE REVOKED BY
THE SHAREHOLDER PRIOR TO ITS EXERCISE.
SHAREHOLDERS(S)___________________________________________DATE____________, 1997
Please date and sign exactly as your name(s) appears. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as such.
If more than one trustee, all should sign. All joint owners should sign.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
-FOLD AND DETACH HERE-
