<PAGE>
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:
X Preliminary Proxy Statement
- ---
Confidential, for Use of the Commission Only (as permitted
- --- by Rule 14a-6(e)(2))
- --- Definitive Proxy Statement
- --- Definitive Additional Materials
- --- Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BAY VIEW CAPITAL CORPORATION
- -------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other
than 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)(4) 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:
_________________
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>
NOTICE OF 1997 ANNUAL MEETING AND PROXY STATEMENT
[BAY VIEW CAPITAL LOGO]
April 18, 1997
Dear Stockholder:
On behalf of the Board of Directors and management of Bay
View, I cordially invite you to attend the Company's 1997 Annual
Meeting of Stockholders. The meeting will be held at 2:00 p.m.,
local time, on May 22, 1997 at Bay View's main offices located at
2121 South El Camino Real, San Mateo, California 94403.
The meeting is for the purpose of (i) the election of two
directors of the Company; (ii) the approval and adoption of an
amendment to the Company's Restated Certificate of Incorporation to
increase the number of authorized shares from 20,000,000 to
60,000,000; (iii) the approval and adoption of an amendment to the
Company's 1995 Stock Option and Incentive Plan to increase the
number of shares reserved thereunder by 500,000; and (iv) such
other matters as may properly come before the meeting.
I encourage you to attend the meeting in person. Whether or
not you do so, however, I hope that you will read the enclosed
Proxy Statement and then complete, sign and date the enclosed proxy
card and return it in the postage prepaid envelope provided. This
will save Bay View additional expense in soliciting proxies and
will ensure that your shares are represented. Please note that you
may vote in person at the meeting even if you have previously
returned the proxy card.
Thank you for your attention to this important matter.
Sincerely,
JOHN R. MCKEAN
Chairman of the Board
<PAGE>
BAY VIEW CAPITAL CORPORATION
2121 SOUTH EL CAMINO REAL
SAN MATEO, CALIFORNIA 94403
(415) 573-7300
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 1997
Notice is hereby given that the Annual Meeting of Stockholders
(the "Meeting") of Bay View Capital Corporation (the "Company")
will be held at the Company's main offices located at 2121 South El
Camino Real, San Mateo, California 94403, on May 22, 1997, at 2:00
p.m., local time.
A proxy card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting upon
I. the election of two directors of the Company;
II. the approval and adoption of an amendment to the
Company's Restated Certificate of Incorporation to increase the
number of authorized shares from 20,000,000 to 60,000,000;
III. the approval and adoption of an amendment to the
Company's 1995 Stock Option and Incentive Plan to increase the
number of shares reserved thereunder by 500,000; and
such other matters as may properly come before the Meeting or any
adjournments or postponements thereof. The Board of Directors is
not aware of any other business to come before the Meeting. Any
action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the
Meeting may be adjourned or postponed. Stockholders of record at
the close of business on March 31, 1997 are the stockholders
entitled to vote at the Meeting and any adjournments or
postponements thereof. A complete list of stockholders entitled to
vote at the Meeting will be available for stockholders at the main
office of the Company during the ten days prior to the Meeting, as
well as at the Meeting.
You are requested to complete, sign and date the enclosed
proxy, which is solicited on behalf of the Board of Directors, and
to mail it promptly in the postage prepaid envelope provided. The
proxy will not be used if you attend and vote at the Meeting in
person.
By Order of the Board of Directors
ROBERT J. FLAX
Secretary
San Mateo, California
April 18, 1997
- -------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE
MEETING. A PRE-ADDRESSED ENVELOPE IS PROVIDED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.
- -------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
BAY VIEW CAPITAL CORPORATION
2121 SOUTH EL CAMINO REAL
SAN MATEO, CALIFORNIA 94403
(415) 573-7300
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Bay
View Capital Corporation ("Bay View" or the "Company") to be used
at the Annual Meeting of Stockholders of the Company (the
"Meeting"), to be held at Bay View's main offices located at 2121
South El Camino Real, San Mateo, California, on May 22, 1997 at
2:00 p.m., local time, and at all adjournments or postponements of
the Meeting. The accompanying Notice of Meeting and form of proxy
and this Proxy Statement are first being mailed to stockholders on
or about April 18, 1997. Certain of the information provided
herein relates to Bay View Bank (the "Bank"), a wholly owned
subsidiary of the Company.
At the Meeting, the stockholders of Bay View are being asked
to: (i) elect two directors of the Company; (ii) approve the
amendment to the Company's Restated Certificate of Incorporation
(the "Certificate") to increase the number of shares of common
stock which the Company is authorized to issue from 20,000,000 to
60,000,000; (iii) approve the amendment to the Company's 1995 Stock
Option and Incentive Plan (the "1995 Stock Option Plan") to
increase the number of shares available for issuance thereunder
from 500,000 to 1,000,000; and (iv) such other matters as may
properly come before the meeting or any adjournments or
postponements thereof.
VOTING RIGHTS AND PROXY INFORMATION
All shares of Bay View common stock represented at the Meeting
by properly executed proxies received prior to or at the Meeting,
and not revoked, will be voted at the Meeting in accordance with
the instructions thereon. If no instructions are indicated,
properly executed proxies will be voted for the nominees set forth
herein and for the proposals to approve the amendment to the
Certificate and the amendment to the 1995 Stock Option Plan. Bay
View does not know of any matters other than as described in the
Notice of Meeting that are to come before the Meeting. If any
other matters are properly presented at the Meeting for action, the
persons named in the enclosed form of proxy and acting thereunder
will have the discretion to vote on such matters in accordance with
their best judgment.
Directors shall be elected by a plurality of the votes present
in person or represented by proxy at the Meeting and voted on the
election of directors. Votes withheld and broker non-votes will
have no effect on the election of directors. Approval of the
amendment to the Certificate requires the affirmative vote of the
holders of a majority of the total votes eligible to be cast at the
Meeting. Proxies marked to abstain and broker non-votes will have
the same effect as votes against the proposal to amend the
Certificate. Approval of the amendment to the 1995 Stock Option
Plan requires the affirmative vote of a majority of the shares
present in person or represented by proxy at the Meeting and
entitled to vote on the matter. Proxies marked to abstain will
have the same effect as votes against the proposal to amend the
1995 Stock Option Plan. Broker non-votes will have no effect on
the proposal. A majority of the shares of the Company's common
stock, present in person or represented by proxy, shall constitute
a quorum for purposes of the Meeting. Proxies marked to abstain
and broker non-votes are counted for purposes of determining a
quorum.
A proxy given pursuant to this solicitation may be revoked at
any time before it is voted. Proxies may be revoked by:
(i) filing with the Secretary of Bay View at or before the Meeting
a written notice of revocation bearing a later date than the proxy;
(ii) duly executing a subsequent proxy relating to the same shares
and delivering it to the Secretary of Bay View at or before the
Meeting; or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself
constitute revocation of a proxy). Any written notice revoking
<PAGE>
a proxy should be delivered to Robert J. Flax, Esq., General
Counsel and Secretary, Bay View Capital Corporation, 2121 South El
Camino Real, San Mateo, California 94403.
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Record holders of common stock as of the close of business on
March 31, 1997 will be entitled to one vote for each share then
held. As of that date, the Company had shares of common
stock issued and outstanding.
The following table sets forth, as of December 31, 1996,
certain information as to (i) those persons who were known by
management to be beneficial owners of more than 5% of the Company's
outstanding shares of common stock, (ii) the shares of common stock
beneficially owned by the executive officers named below and (iii)
all directors and executive officers as a group.
<TABLE>
Shares Percent
Beneficially of
Beneficial Owner Owned Class
- --------------------------- ------------ --------
<S> <C> <C>
Pioneering Management...... 463,200(1) 6.97%
Corporation
60 State Street
Boston, Massachusetts 02114
Southeastern Asset.......... 450,400(2) 6.80
Management, Inc.
6075 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Mellon Bank Corporation..... 388,000(3) 5.84
C/O Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Edward H. Sondker........... 57,000(4) .85
David A. Heaberlin.......... 35,000(4) .52
Robert J. Flax.............. 41,469(4) .61
John N. Buckley............. 15,778(4) .24
Cynthia L. Hart............. 10,501(4) .16
All directors and executive
officers as a group
(16 persons)................ 454,385(4)(5) 6.40
</TABLE>
______________
(1) As reported by Pioneering Management Corporation
("Pioneering"), a registered investment adviser. Pioneering
reported sole voting power as to 463,200 shares, sole dispositive
power as to no shares, shared voting power as to no shares and
shared dispositive power as to 463,200 shares. Virtually all of
the shares are owned by numerous clients of Pioneering, none of
whom is known by Pioneering to own more than 5% of the Company's
outstanding shares of common stock.
(2) As reported by Southeastern Asset Management, Inc.
("Southeastern"), a registered investment adviser. Southeastern
reported sole voting power as to 109,250 shares, sole dispositive
power as to 125,450 shares and shared voting and dispositive power
as to 325,000 shares. O. Mason Hawkins, the Chairman of the Board
and Chief Executive Officer of Southeastern, also may be deemed to
beneficially own the 450,450 shares. Mr. Hawkins disclaims
beneficial ownership of all such shares.
<PAGE>
(3) As reported by Mellon Bank Corporation ("Mellon"), a
parent holding company, Mellon's wholly-owned subsidiary, Boston
Group Holdings, Inc. ("BGH"), and BHG's wholly-owned subsidiary,
the Boston Company, Inc. ("BC"). Mellon reported sole voting power
as to 337,000 shares, shared voting power as to no shares, sole
dispositive power as to 336,000 shares and shared dispositive power
as to 52,000 shares. BGH and BC each reported sole voting power as
to 297,000 shares, shared voting power as to no shares, sole
dispositive power as to 303,000 shares and shared dispositive power
as to 45,000 shares.
(4) Includes shares held directly, held in retirement
accounts, held by certain members of the named individuals'
families, or held by trusts of which the named individuals are
trustees or substantial beneficiaries, with respect to which shares
the named individuals may be deemed to have sole or shared voting
or dispositive power. Includes for Messrs. Sondker, Heaberlin,
Flax and Buckley, Ms. Hart and all directors and executive officers
as a group, respectively, 52,000, 32,000, 40,000, 15,000, 10,000,
and 430,000, shares, which are subject to options exercisable
within 60 days of December 31, 1996, granted under one or more of
the Company's 1995 Stock Option Plan, Amended and Restated 1986
Stock Option and Incentive Plan (the "1986 Stock Option Plan,"
which expired by its terms in September 1996) and 1989 Non-Employee
Director Stock Option Plan (the "1989 Stock Option Plan").
(5) Includes directors and executive officers of the
Company and the Bank.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is composed of nine members.
Approximately one-third of the directors are elected annually.
Directors of the Company are elected to serve for a three-year
period or until their respective successors shall have been elected
and shall qualify.
The table below sets forth certain information regarding the
members of the Company's Board of Directors, including their terms
of office. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is
withheld as to one or more nominees) will be voted at the Meeting
for the election of the nominees identified below. If any nominee
is unable to serve, the shares represented by all such proxies will
be voted for the election of such substitute as the Board of
Directors may recommend. At this time, the Board of Directors
knows of no reason why any of the nominees might be unable to
serve, if elected. There are no arrangements or understandings
between any director or nominee and any other person pursuant to
which such director or nominee was selected.
<TABLE>
Shares of
Common Stock
Term Beneficially Percent
Director to Owned at of
Name Age Position Since(1) Expire 12/31/96(2)(3) Class
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
--------
Paula R. Collins 47 Director 1993 2000 19,589 .29%
Thomas M. Foster 54 Director 1993 2000 19,661 .29
DIRECTORS CONTINUING IN OFFICE
------------------------------
Richard J. Quinlan 63 Director 1979 1998 30,359 .45
Edward H. Sondker 49 Director, 1995 1998 57,000 .85
President
and Chief
Executive
Officer
Robert L. Witt 57 Director 1988 1998 34,418 .51
W. Blake Winchell 44 Director 1996 1998 10,101 .15
Roger K. Easley 60 Director 1984 1999 31,805 .47
<PAGE>
John R. McKean 66 Chairman 1984 1999 50,026 .75
of the
Board
Angelo J. Siracusa 67 Director 1996 1999 10,432 .15
</TABLE>
___________________
(1) Includes service as a director of the Bank.
(2) Includes shares held directly, held in retirement accounts, held by
certain members of the named individuals' families, or held by trusts of
which the named individual is a trustee or substantial beneficiary , with
respect to which shares the named individuals may be deemed to have sole or
shared voting or dispositive power. Includes for Directors Collins, Foster,
Quinlan, Sondker, Witt, Easley, Siracusa, Winchell, and McKean, respectively,
19,000, 19,000, 24,000, 52,000, 34,000, 24,000, 10,000, 10,000, and 24,000
shares which are subject to options exercisable within 60 days of December
31, 1996, granted under one or more of the Company's 1995 Stock Option Plan,
1986 Stock Option Plan and 1989 Stock Option Plan.
(3) Of the amounts listed for Directors Collins, Foster, Quinlan, Witt,
Winchell, Easley, McKean and Siracusa, 489, 261, 267, 295, 101, 391, 826 and
432 consist of Stock Units representing deferred director fees credited to
the respective Stock Unit Account of each director established under the
Company's and the Bank's Stock in Cash Compensation Plan for Non-Employee
Directors (the "Stock in Lieu of Cash Plan"). The Stock Units credited to a
director's Stock Unit Account will be settled upon the director's termination
of service, for any reason, as a director by delivering to the director the
number of shares of the Company's common stock equal to the number of whole
stock units then credited to the director's Stock Unit Account. Until such
time as the shares are delivered to a director upon termination of service,
such director has none of the rights of shareholders generally, including the
right to vote or dispose of the shares represented by the Stock Units.
The business experience of each of the above directors for at
least the past five years is as follows:
Ms. Collins is a principal of The WDG Companies, San
Francisco, California, a real estate development firm she founded
in 1982, and Chief Executive Officer of WDG Ventures, Inc., a
subsidiary of the WDG Companies.
Mr. Foster is an independent financial consultant with over 20
years of banking and financial experience. Mr. Foster was the
President of Aircraft Technical Publishers, Brisbane, California,
an aircraft maintenance library services company, from February
1989 until August 1992.
Mr. Quinlan is First Vice President of Smith Barney,
Incorporated, Menlo Park, California, which firm has rendered
investment banking services to the Company and the Bank.
Mr. Sondker has served as President and Chief Executive
Officer of the Company and the Bank since August 1995. Prior
thereto he was President and Chief Executive Officer of
Independence One Bank of California from October 1990 until June
1995. Mr. Sondker is a director of Sunstone Hotel Investors, Inc.,
located in San Clemente, California.
Mr. Witt is an independent consultant in the engineered
materials industry. From July 1993 until September 1994, he was
Chairman of the Board and Chief Executive Officer of Continuous
Molding, Inc., a company developing advanced thermoplastic
composite materials, located in Daly City, California. From April
1988 until July 1993, Mr. Witt was Chairman of the Board and Chief
Executive Officer of Hexcel Corp., Dublin, California, a
manufacturer of materials used in the aerospace, space and defense
industries.
Mr. Winchell is Managing Director of Generation Ventures, LLC,
a venture investment group.
Mr. Easley is President of Seven-Up Bottling Company of San
Francisco, California.
Mr. McKean has served as Chairman of the Board of the Company
since January 1994. Mr. McKean is the President of John R. McKean
& Co. (CPAs), San Francisco, California.
Mr. Siracusa recently retired as President of the Bay Area
Council, a non-profit public policy organization, which he headed
for 24 years. Mr. Siracusa serves on the Board of Directors of
Bridge Housing Corporation and on the Board of Trustees of Golden
Gate University.
<PAGE>
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND COMPENSATION
Meetings of the Company's Board of Directors are generally
held monthly. The Board of Directors of the Company held ten
meetings during the fiscal year ended December 31, 1996. No
incumbent director of the Company attended fewer than 75% of the
total number of meetings held by the Company's Board of Directors
and by all committees of the Board of Directors of the Company on
which he or she served during the year.
During the fiscal year ended December 31, 1996, the Board of
Directors of the Bank held ten meetings. No incumbent director of
the Bank attended fewer than 75% of the total number of meetings
held by the Bank's Board of Directors and by all committees of the
Board of Directors of the Bank on which he or she served during the
year.
Directors' fees are paid to non-employee directors of the Bank
and the Company in the amounts of $21,600 per annum, $1,000 per
Board meeting attended and $750 per committee meeting attended
($500 in the case of telephonic meetings attended), plus an
additional fee of $4,000 per annum for the Chairman of the Audit
Committee and $2,400 per annum for each chairman of other Board
committees. Only one fee for attendance at Board meetings of the
Bank and the Company will be paid when the meetings are held on the
same day.
The Chairman of the Board received compensation for 1996 as
follows: a Chairman fee of $60,000 per annum, a retainer of
$21,600, and a fee of $36,000 for attendance at Board and committee
meetings.
Stock in Lieu of Cash Compensation Plan. In 1996, the Company
and the Bank adopted the Stock in Lieu of Cash Compensation Plan
for Non-Employee Directors (the "Stock in Lieu of Cash Plan"). The
Stock in Lieu of Cash Plan provides for the deferral of
compensation earned by non-employee directors of the Bank in the
form of Stock Units ("Stock Units") in a Stock Unit account ("Stock
Unit Account"). At least 20% of director fees must be converted
into Stock Units, and directors may elect to have up to 100% of
their fees converted.
For dividends paid with respect to the Company's common stock,
each non-employee director has credited to his or her Stock Unit
Account an additional number of Stock Units in an amount determined
under the Stock in Lieu of Cash Plan. Each non-employee director's
Stock Unit Account shall be settled by delivering to the non-employee
director (or his beneficiary) the number of shares of
Company common stock equal to the number of whole Stock Units then
credited to the non-employee director's Stock Unit Account, in
either (i) a lump sum or (ii) substantially equal annual
installments over a period not to exceed ten years.
Amended Outside Directors' Retirement Plan. The Bank
maintains a retirement plan for outside directors who retire from
the Bank's Board of Directors with at least three years of service
on the Board at the date of retirement. Pursuant to the Amended
Outside Directors' Retirement Plan, the present value of the vested
accrued benefits as of May 23, 1996 of each then-current outside
director were contributed by the Bank in cash to a grantor trust
administered by a third party trustee. Only Directors Easley,
McKean, Collins, Foster, Quinlan and Witt are eligible participants
in the Amended Outside Directors' Retirement Plan. Upon
termination of a participant's service as a director of the Bank
prior to a change in control of the Company or the Bank, the
participant's benefit in the form of shares of the common stock of
the Company held by the grantor trust will be distributed in ten
installments, with the first installment generally being made
within 30 days after termination of service and each subsequent
installment generally being made annually thereafter. Upon a
change in control of the Company or the Bank, the undistributed
shares in the grantor trust will be converted into cash by the
trustee and invested by the trustee in permitted investments with
installment distributions being made in cash. Following a change
in control of the Company or the Bank and the occurrence of a
Trigger Event (as defined in the grantor trust), a single lump-sum
cash payment will be made to participants in termination of the
grantor trust and the Amended Outside Directors' Retirement Plan.
Benefits paid in 1996 under the plan, to three retired directors of
the Bank, totaled $68,700.
Stock Option Awards. During 1996, immediately exercisable
options to purchase 3,000 shares of the Company's common stock at
an exercise price of $23.9375 per share were granted to each of
Directors Collins, Foster, McKean, Witt, Easley and Quinlan, and
immediately exercisable options to purchase 10,000 shares of the
<PAGE>
Company's common stock at an exercise price of $33.1250 per share
were awarded to each of Directors Winchell and Siracusa.
Information regarding Stock Options granted to Director
Sondker, the President and Chief Executive Officer of the Company,
is contained elsewhere in this Proxy Statement under the caption
"Option Grants in Last Fiscal Year."
Set forth below is information regarding the Audit,
Compensation and Benefits and Nominating Committees of the Company.
The Board of Directors of the Company also has a Stock Option
Committee, the members of which are Directors Collins and Quinlan.
The Audit Committee reviews audit and regulatory reports and
related matters to ensure effective compliance by the Company and
the Bank with regulatory and internal policies and procedures.
Directors Quinlan, Collins, Winchell and Easley are members of this
Committee. The Audit Committee held nine meetings during 1996.
The Compensation and Benefits Committee is responsible for
review and recommendations for approval by the Board of senior
officers' salaries, other compensation and benefit programs and
Board of Directors' and committee fees. The current members of the
Compensation and Benefits Committee are Directors Collins and
Quinlan. The Committee held eight meetings during 1996.
The Nominating Committee of the Company is responsible for
nominating persons to serve on the Board of Directors of the
Company and as Chairman of the Board. Directors McKean, Foster,
Easley and Sondker are members of this Committee. The Committee
held two meetings during 1996. While the Nominating Committee will
consider nominees recommended by stockholders, the Committee has
not actively solicited such nominations. Pursuant to the Company's
Bylaws, nominations by stockholders must be delivered in writing to
the Secretary of the Company at least 60 days before the date of
the annual meeting.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the
compensation for services in all capacities to the Company and the
Bank for the years ended December 31, 1996, 1995 and 1994 of the
Chief Executive Officer of the Company during 1996 and the other
four most highly compensated executive officers of the Company and
the Bank in 1996 (the "named officers").
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards
Name and Shares
Principal Underlying All Other
Position Year Salary Bonus Options (2) Compensation
- -------- ------ ------ ----- ----------- ------------
<S> <C> <C> <C> <C> <C>
Edward H. 1996 $287,502 $143,750 40,000 $48,977(3)
Sondker(1) 1995 114,585 --- 80,000 13,180(3)
President and 1994 --- --- --- ---
Chief Executive
Officer
David A. 1996 $ 205,002 $82,001 40,000 $ 2,719(4)
Heaberlin(1) 1995 33,334 --- 20,000 10,086(4)
Executive Vice 1994 --- --- --- ---
President and
Chief Financial
Officer
Robert J. Flax 1996 $ 158,724 $63,490 3,000 $ 11,622(5)
Executive Vice 1995 157,590 15,570 10,000 15,339(5)
President and 1994 155,160 30,000 --- 14,152(5)
General Counsel
John N. Buckley 1996 $ 140,004 $ 56,002 5,000 $ 5,358(6)
Executive Vice 1995 119,617 19,500 10,000 9,374(6)
President 1994 108,480 29,000 --- 841(6)
Cynthia L. Hart 1996 $ 145,197 $ 56,002 5,000 $ 8,773(7)
(1) Executive 1995 118,928 13,000 10,000 13,025(7)
Vice President 1994 107,928 32,000 --- 6,886(7)
</TABLE>
(1) Mr. Sondker joined the Company on August 1, 1995; Mr.
Heaberlin joined the Company on November 1, 1995; Ms.
Hart resigned from the Company effective March 14, 1997.
(2) In 1996 and 1995, options to purchase 80,000 and 110,000
shares, respectively, were granted pursuant to the 1995
Stock Option Plan and options to purchase 13,000 and no
shares, respectively, were granted pursuant to the 1986
Stock Option Plan.
(3) 1996: matching contribution to Mr. Sondker's account in
the Bank's 401(k) Plan, $4,500; life insurance premium,
$4,033; Executive physical, $880; closing costs related to
the sale and purchase of Mr. Sondker's homes, $17,689;
reimbursement for miscellaneous moving expenses, $21,875.
1995: life insurance premium, $397; moving expenses
pursuant to Mr. Sondker's hiring agreement, $12,783.
(4) 1996: matching contribution to Mr. Heaberlin's account in
the Bank's 401(k) Plan, $1,050; life insurance premium,
$73; Executive physical, $1,596. 1995: moving expenses
pursuant to Mr. Heaberlin's hiring agreement, $10,086.
(5) 1996: matching contribution to Mr. Flax's account in the
Bank's 401(k) Plan, $9,800; life insurance premium, $73;
Executive physical, $1,749. 1995: 401(k) Plan
contribution, $9,000; life insurance premium, $73; ESOP
contribution, $6,266. 1994: 401(k) Plan contribution
$9,000; life insurance premium, $38; ESOP contribution,
$5,114.
(6) 1996: Matching contribution to Mr. Buckley's account in
the Bank's 401(k) Plan, $5,325; life insurance premium,
$32. 1995: 401(k) Plan contribution, $3,588; life
insurance premium, $32; ESOP contribution, $5,754. 1994:
401(k) Plan contribution, $841.
(7) 1996: Matching contribution to Ms. Hart's account in the
Bank's 401(k) Plan, $6,863; life insurance premium, $1,911;
ESOP contribution $0. 1995: 401(k) Plan contribution,
$4,511; life insurance premium, $2,248; ESOP contribution,
$6,266. 1994: 401(k) Plan contribution, $2,711; ESOP
contribution, $4,175.
<PAGE>
The following table sets forth certain information concerning
grants of stock options pursuant to the 1995 Stock Option Plan to
the named officers in 1996. No stock appreciation rights ("SARs")
were granted in 1996.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------
Individual Grants
------------------------------------
% of Potential Realizable
Number Total Value at Assumed
of Options Annual Rates of Stock
Shares Granted Stock Price
Underlying to Per Appreciation for
Options Employees Share Expira- Option Term
Granted(1) in FiscalExercise tion
Year Price Date 5% 10%
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Sondker 40,000 24.39% $31.25 3/01/06 $786,118 $1,992,178
David A. Heaberlin 40,000 24.39 31.25 3/01/06 786,118 1,992,178
Robert J. Flax 3,000 1.83 34.00 6/26/06 64,147 162,561
John N. Buckley 5,000 3.05 34.00 6/26/06 106,912 270,936
Cynthia L. Hart 5,000 3.05 34.00 6/26/06 106,912 270,936
</TABLE>
(1) Of the options granted to Messrs. Sondker and Heaberlin, 12,000
vested on March 1, 1997, 12,000 will vest on March 1, 1998 and 16,000
will vest on March 1, 1999. The options granted to Messrs. Flax and
Buckley and Ms. Hart will vest on June 1, 1997. In the event of a
change in control (as defined in the 1995 Stock Option Plan) of the
Company, all options listed above which have not theretofore vested
will vest in full.
The following table sets forth certain information concerning the number
and value of unexercised stock options at December 31, 1996 held by the named
officers. None of the named officers held any SARs at December 31, 1996 or
exercised any stock options or SARs during 1996.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT
DECEMBER 31, 1996
- ---------------------------------------------------------------------------
Number of Shares Value of Un-
Underlying Un- Exercised In-the-
exercised Options Money Options at
at FY-End FY-End (1)
------------------ -------------------
Shares
Acquired
on Value Exercise- Un-Exer- Exercise- Un-Exer-
Name Exercise Realized able cisable able cisable
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Sondker --- $ --- 40,000 80,000 $700,000 $445,000
David A. Heaberlin --- --- 20,000 40,000 314,980 445,000
Robert J. Flax --- --- 40,000 3,000 921,875 25,125
John N. Buckley --- --- 15,000 5,000 278,750 41,875
Cynthia L. Hart --- --- 10,000 5,000 173,750 41,875
</TABLE>
<PAGE>
(1) The difference between the aggregate option exercise price
and the fair market value of the underlying shares at December 31, 1996.
EMPLOYMENT CONTRACTS
On January 1, 1997 the Company entered into new employment
agreements with each of Messrs. Sondker, Heaberlin, Flax and
Buckley and Ms. Hart. Each agreement provides for an initial term
of one year, with automatic renewal for an additional year on each
December 31 unless the Company or the executive gives prior written
notice that the agreement is not to be renewed. The agreements
provide for the payment of base salary as follows: Mr. Sondker
$300,000 per annum; Mr. Heaberlin $210,000 per annum; Mr. Flax
$160,008 per annum; Mr. Buckley $150,000 per annum; and Ms. Hart
$150,000 per annum. Salaries will be reviewed on each July 1 and
are subject to the discretion of the Board of Directors. The
contracts provide for participation in an equitable manner in
employee benefits applicable to executive personnel.
In the event of termination by the Company without cause,
Messrs. Sondker, Heaberlin and Flax would be entitled to receive a
lump sum severance payment of 18 months salary, and Mr. Buckley and
Ms. Hart would be entitled to severance payments of up to 12 months
salary. Upon a change in control of the Company or Bank followed
within 24 months by the involuntary termination of an executive
(including the executive's relocation or a reduction in benefits or
responsibilities) without cause, the executive would be entitled to
a lump sum severance payment of 200% of annual salary.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee of the Board of
Directors has furnished the following report on executive
compensation:
Compensation Philosophy Regarding Executive Officers
----------------------------------------------------
The Compensation and Benefits Committee (the "Committee") of
the Board of Directors is responsible for supervising and
recommending for full Board approval the compensation and benefits
of the executive officers of the Bank. The Committee has
structured the compensation for executive officers of the Bank
around three components: (1) base salary; (2) annual incentives;
and (3) long-term incentives. The Committee's strategic goal is to
pay executives for performance, by weighing the variable pay
components of compensation more heavily than base salary. Toward
this end, the Committee's goal is to set base salary for the
respective executive position, based upon individual experience and
performance, at levels that are competitive but slightly below
market average salary for the position. At the same time, total
compensation, including annual cash and long-term incentives, is
structured in a manner that allows executives to attain
above-market total pay if the Bank and the individual are achieving
stated goals; if goals are not achieved, total pay would be below
market. In 1996, the committee retained the services of Strategic
Compensation Associates ("SCA"), an independent compensation
consulting firm, to competitively assess the Bank's executive
compensation programs and make appropriate recommendations in
accordance with the Committee's pay-for-performance philosophy.
SCA compiled a composite group of peer institutions and analyzed
peer group compensation data from proxy statements, financial data,
annual reports and published surveys; pay data was appropriately
adjusted to compare with the Bank's size. SCA derived market
consensus levels of total compensation for each executive position
based on experience, responsibilities and scope of duties, and made
recommendations as to appropriate base salary and target annual and
long-term incentive compensation levels. The Committee updated its
executive salary ranges based on SCA's data and recommendations
effective July 1996. Base salary ranges were established in such
a way that the midpoint of each range was approximately 5 to 15%
below market consensus for each position. The Committee generally
sets the base salary of each executive officer at the midpoint of
the recommended salary range. Ranges for target long-term
compensation for each executive position were also established by
the Committee based on SCA's recommendations.
Incentive and bonus programs for executive officers have been
utilized by the Bank since it converted from a mutual to stock
institution in 1986. Annual incentive plans for the executive
officers commenced in fiscal year 1987 under a philosophy that was
geared towards measuring performance based on the creation of
shareholder value
<PAGE>
as reflected in certain financial measurements. Annual incentive
compensation has also been based upon business unit and individual
performance as measured against goals and objectives which were
stated in the Bank's business plan. The Bank's annual incentive
plans for executive officers have required that certain thresholds
of corporate performance and regulatory ratings be met prior to an
executive being entitled to an incentive payment under any of the
three categories of the annual plans: corporate, business unit and
individual performance.
The 1996 Annual Senior Management Incentive Plan (the "1996
Plan") for the executive officers contained corporate, business
unit and individual goals. Certain thresholds of performance were
required to be met by the Bank prior to any officer eligibility for
a bonus in 1996. These thresholds were net income and regulatory
examination results, including satisfactory Community Reinvestment
Act ("CRA") rating. Because these performance thresholds were met
by the Bank, and all business unit and individual performance
measures were achieved, the executive officers were entitled to
payments under the 1996 Plan as follows: Edward Sondker, $143,750;
David Heaberlin, $82,001; Robert Flax, $63,490; John Buckley,
$56,002; and Cynthia Hart, $56,002. The bonus payments to the
named executives for 1996 totaled $401,245.
SCA developed and the Board adopted in 1993 a five year
long-term incentive plan for the executive officers (the "LTIP") based
upon certain performance criteria including shareholder return as
measured by the increase in the value of the Company's common
stock. The Committee and the Board of Directors are satisfied that
the LTIP is properly tied to a direct increase in shareholder value
and provides the executive officers with an incentive to achieve
goals that are expected to directly result in an increase in the
price of the Company's common stock. If the stock price does not
increase, the officers receive no payments under the LTIP. The
awards were based on the executive officer's base salary and a
factory related to the relative value of the executive's
contribution to achieving the goals set forth in the LTIP. No
performance units were granted in 1996 to any of the named
individuals. In June, 1996, the Committee amended certain of the
performance criteria to reflect changes in the strategy and
direction of the Company since 1993. As of December 31, 1996,
three of the stated goals contained in the LTIP were achieved, and
45% of the performance units vested in accordance with the terms of
the Plan.
The Committee considers the grant of stock options to
executive officers to be a component of long-term compensation. In
1996, options were granted to the executive officers as follows:
Mr. Sondker, 40,000 shares; Mr. Heaberlin, 40,000 shares; Mr. Flax,
3,000 shares; Ms. Hart, 5,000 shares, and Mr. Buckley, 5,000
shares. The grants were based on the Committee's recognition of
the exceptional performance of the named individuals, their
leadership skills and their ability to affect the results of the
Company, and most importantly, the importance of retaining the
named individuals because of their impact on the future success of
the Company.
CEO Compensation
----------------
Edward H. Sondker commenced employment as the Bank's President
and Chief Executive Officer on August 1, 1995. Mr. Sondker's
initial base salary of $275,000 per annum was set as part of the
negotiation of his entire employment package. His base salary was
adjusted to $300,000 as of July 1, 1996 as a result of the
recommendations made by SCA and in accordance with the Committee's
philosophy of setting base salary at slightly below peer market
average for a comparable position. Mr. Sondker's total
compensation package includes : (1) the aforementioned base salary;
(2) annual incentive target award of 50% of average annual base
salary based upon achievement of agreed-upon 1996 performance
goals; (3) an option to purchase 120,000 shares of Bay View common
stock vesting over four years, and (4) a one year employment
contract. On January 1, 1997, the Company entered into a new
employment agreement with Mr. Sondker described elsewhere in this
Proxy Statement. Mr. Sondker received an annual incentive award in
the amount of $143,750, which represented 50% of his 1996 average
annual base salary, for achieving corporate and individual
performance goals in accordance with the terms of the 1996 Senior
Management Incentive Plan. The Committee is satisfied that Mr.
Sondker's total compensation package is reasonable and will
continue to achieve the aforementioned goals of the Committee
regarding executive compensation.
<PAGE>
Employment Contracts
--------------------
A more detailed description of the employment contracts with
the currently employed named officers is contained elsewhere in
this Proxy Statement.
Deductibility of Executive Compensation
---------------------------------------
Recent amendments to federal tax laws limit the deduction a
publicly-held company is allowed for compensation paid to its chief
executive officer and its four most highly compensated executive
officers. Generally, amounts in excess of $1 million (other than
performance-based compensation) paid in any tax year to a covered
executive cannot be deducted. The Committee will consider ways to
maximize the deductibility of executive compensation, while
retaining the discretion the Committee deems necessary to
compensate executive officers in a manner commensurate with
performance and the competitive environment for executive talent.
The foregoing report is furnished by Messrs. Easley
(Chairman), Quinlan and Witt.
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The line graph below compares the cumulative total stockholder
return on the Company's common stock to the cumulative total return
of the Dow Jones Equity Market Index and Dow Jones Savings and Loan
Index for the period December 31, 1991 through December 31, 1996.
The graph assumes that $100 was invested on December 31, 1991 and
that all dividends were reinvested.
[GRAPH]
Bay View Dow Jones S&L Index
-------- --------- ---------
12/31/91 100 100 100
12/31/92 99 109 104
12/31/93 106 120 108
12/31/94 98 121 94
12/31/95 151 167 156
12/31/96 229 206 195
RETIREMENT PLAN
The Bank terminated its non-qualified defined benefit
supplemental executive retirement plan (the "Retirement Plan") as
of December 31, 1995. The Bank has no continuing liabilities in
connection with the Retirement Plan to any executive officers other
than to Robert J. Flax, who will be entitled at normal retirement
age (65) to an annual benefit, to be paid for 15 years, equal to
50% of his average base salary over the three calendar years
preceding retirement, provided that such average base salary shall
not exceed the amount of his base salary as of December 31, 1995.
The Bank has continuing liabilities, which have been fully accrued,
to former executive officers who retired from or are no longer
employed by the Bank.
<PAGE>
CERTAIN TRANSACTIONS
Prior to the enactment on August 9, 1989 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA"), the Bank, like many savings associations, followed a
policy of granting loans to eligible officers, directors and
employees, generally for the financing of real estate and for
consumer purposes. Under the Bank's policy, which was consistent
with Federal Home Loan Bank Board regulations governing
transactions with the Bank's affiliated persons, real estate loans
were permitted to be made at rates 1.0 percentage point above the
applicable adjustable mortgage loan index, which was generally the
Eleventh District Federal Home Loan Bank cost of funds index, and
consumer loans were permitted to be made at .75 to 1.0 percentage
point below market rates. These loans were made in the ordinary
course of business on substantially the same terms and collateral,
except for interest rates and, in the case of real estate secured
loans, waiver of loan origination fees, as those of comparable
transactions prevailing at the time, and did not involve more than
the normal risk of collectibility or present other unfavorable
features.
FIRREA added a requirement that all loans and extensions of
credit to the executive officers and directors of the Bank and
their related entities be on substantially the same terms,
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons. In connection
therewith, the Bank adopted a policy that directors and officers
at or above the level of Vice President are not eligible for Bank
loans. Loans approved prior to August 9, 1989 were not affected.
In addition, all loans and other transactions between the Company
and its affiliates are subject to approval by a majority of the
directors of the Company, including a majority of its disinterested
directors.
Set forth below is certain information as of December 31, 1996
as to loans made by the Bank to any director or executive officer
of the Company or the Bank whose aggregate indebtedness to the Bank
exceeded $60,000 at any time since December 31, 1995. Except as
otherwise indicated, all of such loans are secured by first liens
on the borrower's principal residence.
<TABLE>
Largest
Aggregate
Amount Loan
Outstanding Balance Interest
Date Since as of Rate as of
Name of Loan 12/31/95 12/31/96 12/31/96
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert J. Flax 08/26/86 $253,794 247,395 5.82%
03/15/88(1) 32,138 28,579 6.82
</TABLE>
____________________
(1) Second mortgage secured by lien on borrower's principal
residence.
As required by the regulations of the Securities and Exchange
Commission, the following information is provided with respect to
certain proceedings: From April 1988 to July 1993, Director Robert
L. Witt was Chief Executive Officer and Chairman of the Board of
Hexcel Corp. ("Hexcel"), Dublin, California. Mr. Witt resigned
from the Board of Directors and all offices at Hexcel in July 1993.
In December 1993, Hexcel filed for reorganization under Chapter 11
of the United States Bankruptcy Code (the "Bankruptcy Code"). In
December 1992, Hexcel and certain of its executive officers,
including Mr. Witt, were named as defendants in a lawsuit alleging,
among other things, violations of the federal securities laws by
the defendants in connection with the satisfaction of Hexcel's
public disclosure obligations.
<PAGE>
Ms. Paula R. Collins became one of the founders of The WDG
Companies ("WDG") in 1982. Ms. Collins and WDG have been involved
in numerous real estate development projects and investments,
virtually all of which have been successful. The two exceptions
are acquisitions of existing buildings in individual transactions
structured as separate limited partnerships. In September 1989, a
limited partnership of which Ms. Collins was a General Partner
transferred its assets to a lender for a deed in lieu of
foreclosure (WDG-I Creekside Oaks, a California limited
partnership). In May 1993, a real estate limited partnership (the
"Limited Partnership") of which Ms. Collins is a partner of a
general partnership, which is a general partnership of the Limited
Partnership, filed a petition under the Bankruptcy Code. The
Limited Partnership has been reorganized under Chapter 11 of the
Bankruptcy Code and the reorganization plan has been confirmed by
the courts.
PROPOSAL II - APPROVAL OF AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has approved and
recommends to the stockholders an amendment to the Certificate
which would increase the number of shares of the Company's common
stock authorized for issuance from 20 million to 60 million shares.
As of March 31, 1996, _______ shares of Company common stock were
issued and outstanding and 275,000, and 500,000 shares were
reserved for issuance under the terms of the 1989 and 1995 Stock
Option Plans, respectively.
The principal purpose for the proposed amendment is to give
the Company greater flexibility in its financial affairs by making
40 million additional shares of common stock available for issuance
by the Company without further action by its stockholders, in such
transactions and at such times as the Board of Directors considers
appropriate, whether in public or private offerings, as stock
splits or dividends or in connection with mergers and acquisitions
or otherwise. The Company has no present plans, understandings or
agreements for the issuance or use of the proposed additional
shares of common stock. Because stockholders do not have
preemptive rights under the Certificate, the interests of existing
stockholders may (depending on the particular circumstances in
which additional capital stock is issued) be diluted by any such
issuance.
The resolutions of the Board of Directors setting forth the
proposed amendment are attached to this Proxy Statement as Exhibit
A.
Adoption of the proposed amendment requires the affirmative
vote of a majority of the total votes eligible to be cast at the
Meeting. As soon as practicable after such affirmative vote has
been taken and certified, the amendment will be filed with the
Secretary of State of Delaware and will thereupon become effective.
The Company currently has no plans for a public offering of its
common stock, but will make application to list the additional
shares at such time and in such manner as may be required by the
Nasdaq National Market.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION
PROPOSAL III - APPROVAL OF AMENDMENT TO THE COMPANY'S
1995 STOCK OPTION AND INCENTIVE PLAN
In 1995, the Board of Directors of the Company adopted the
1995 Stock Option Plan and it was approved by stockholders at the
1995 Annual Meeting of Stockholders. The 1995 Stock Option Plan
provides for the grant of a variety of long-term incentive awards
to officers and employees as a means of enhancing and encouraging
the recruitment and retention of those individuals on whom the
continued success of the Company most depends. In addition, the
1995 Stock Option Plan gives the Company the flexibility to award
stock options in connection with the acquisition of other companies
to the key executives of such companies to more closely align their
interests with the shareholders of the Company.
<PAGE>
As of March 31, 1997, of the 500,000 shares of Company Common
Stock reserved for issuance under the 1995 Stock Option Plan, only
57,250 shares remained. Without approval of the proposed amendment
to reserve additional shares for issuance, Bay View will soon be
unable to award any options under the Plan. Importantly, the
Company's ability to continue to acquire companies, which the Board
of Directors of the Company believes would be in the best interests
of the Company's stockholders, may be severely impaired if the
Company were unable to award stock options under the Plan to the
key executives of such companies. The Board of Directors therefore
recommends that the stockholders approve an amendment to the 1995
Stock Option Plan in order to increase by 500,000 the number of
shares available for issuance under the 1995 Stock Option Plan to
meet anticipated requirements for future grants for both present
employees and employees of companies acquired by Bay View.
PRINCIPAL FEATURES OF THE 1995 STOCK OPTION PLAN
Eligibility and Participation. Employees of the Company or
its affiliates are eligible to participate in the 1995 Stock Option
Plan.
Awards. The 1995 Stock Option Plan provides for the granting
of stock options, SARs, limited stock appreciation rights ("Limited
SARs") and restricted stock awards.
Shares Available; Non Transferability of Options. Pursuant to
the 1995 Stock Option Plan, 500,000 shares of the Company's common
stock are currently reserved for issuance. If the amendment to
increase the number of shares reserved for issuance under the 1995
Stock Option Plan is approved by stockholders, 1,000,000 shares of
the Company's common stock will be reserved for issuance. Shares
may be either authorized but unissued shares or reacquired shares
held by the Company in its treasury. Any shares subject to an
award which expires or is terminated unexercised will again be
available for issuance under the 1995 Stock Option Plan.
Generally, no award or any right or interest therein is assignable
or transferable except under certain limited exceptions set forth
in the Plan.
Administration. The 1995 Stock Option Plan is administered by
the Stock Option Committee of the Board of Directors of the
Company.
Stock Options. The term of stock options will not exceed ten
years from the date of grant. The Committee may grant either
"Incentive Stock Options" as defined under Section 422 of the Code
or stock options not intended to qualify as such "("non-qualified
stock options"). In general, stock options will not be exercisable
after the expiration of their terms. Subject to certain limited
exceptions, the exercise price for the purchase of shares subject
to a stock option at the date of grant may not be less than 100% of
the market value of the shares covered by the option on that date.
The exercise price must be paid in full in cash or with shares of
Company common stock, or a combination of both.
Concurrently with the grant of any stock option (an
"Underlying Option), the Stock Option Committee may, in its
discretion, authorize the grant of "Reload Options." Reload
Options are intended to align officers' and employees' financial
interests with the shareholders' interests by promoting stock
retention. They become effective only when an optionee uses
"mature" shares (i.e., shares held by the optionee for at least 12
months) to exercise an Underlying Option, and permit the optionee
to purchase additional shares in an amount not to exceed the amount
of mature shares used in connection with the exercise of the
Underlying Option. No Reload Option may first become effective
after the optionee has ceased to maintain "continuous service" with
Bay View (as defined in the 1995 Stock Option Plan). Reload
Options may be authorized with respect to options that are
themselves granted as Reload Options. The exercise price of a
Reload Option is the market value per share on the date the Reload
Option becomes effective. Reload Options become fully exercisable
six months from their effective date, and have a term equal to the
remaining term of the Underlying Option.
Stock Appreciation Rights. The Committee may grant SARs at
any time, whether or not the participant then holds stock options,
granting the right to receive the excess of the market value of the
shares represented by the SARs on the date exercised over the
exercise price. SARs generally will be subject to the same terms
and conditions and exercisable to the same extent as stock options,
as described above. Upon the exercise of a SAR, the participant
will receive the amount due in cash or shares, or a combination of
both, as determined by the Stock Option Committee. SARs may be
related to stock options ("tandem SARs"), in which case the
exercise of one will reduce to that extent the number of shares
represented by the other.
<PAGE>
Limited Stock Appreciation Rights. Limited SARs will be
exercisable only for a limited period in the event of a tender or
exchange offer for shares of the Company's Common Stock, other than
by the Company, where 25% or more of the outstanding shares are
acquired in that offer or any other offer which expires within 60
days of that offer. The amount paid on exercise of a Limited SAR
will be the excess of (i) the market value of the shares on the
date of exercise or (ii) the highest price paid pursuant to the
offer, over the exercise price. Payment upon exercise of a Limited
SAR will be in cash. Limited SARs may be granted at the time of,
and must be related to, the grant of a stock option or SAR. The
exercise of one will reduce to that extent the number of shares
represented by the other.
Restricted Stock. The Stock Option Committee may grant
restricted stock, subject to forfeiture if the participant fails to
fulfill the conditions imposed with respect to the restricted
stock. The holder of restricted stock shall have all of the rights
of a stockholder, including the right to receive dividends and the
right to vote the shares. The participant may not, however, sell,
assign, transfer, pledge or otherwise encumber any of the
restricted stock during the restricted period.
Effect of Merger and Other Adjustments. Shares as to which
awards may be granted under the 1995 Stock Option Plan, and shares
then subject to awards, will be adjusted by the Stock Option
Committee in the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or
other change in the corporate structure of the Company.
In the case of any merger, consolidation or combination of the
Company with or into another entity, whereby either the Company is
not the continuing entity or its outstanding shares are converted
into or exchanged for securities, cash or property, or any
combination thereof, any participant to whom a stock option, SAR or
Limited SAR has been granted will have the right upon exercise of
the option, SAR or Limited SAR to an amount equal to the excess of
fair market value on the date of exercise of the consideration
receivable in the merger, consolidation or combination with respect
to the shares covered or represented by the stock option, SAR or
Limited SAR over the exercise price of the option multiplied by the
number of shares with respect to which the option, SAR or Limited
SAR has been exercised. In addition, any stock option holder will
have the right in the case of such merger, consolidation or
combination to purchase upon exercise of the option the amount of
shares of stock of the continuing company as adjusted for the
merger.
Amendment and Termination. The Board of Directors of the
Company may at any time amend, suspend or terminate the 1995 Stock
Option Plan or any portion thereof but may not, without the prior
approval of the stockholders, make any amendment which shall (i)
materially increase the benefits accruing to participants under the
plan; (ii) materially increase the number of securities which may
be issued under the plan; or (iii) materially modify the
requirements as to eligibility for participation in the plan,
provided, however, that no such amendment, suspension or
termination shall impair the rights of any participant, without his
or her consent, in any award theretofore made pursuant to the 1995
Stock Option Plan. Unless previously terminated, the 1995 Stock
Option Plan shall continue in effect for a term of ten years, after
which no further awards may be granted under the 1995 Stock Option
Plan.
FEDERAL INCOME TAX CONSEQUENCES
Under present federal income tax laws, awards under the 1995
Stock Option Plan will have the following consequences:
(1) The grant of an award will neither, by itself, result in
the recognition of taxable income to the participant nor
entitle the Company to a deduction at the time of such
grant.
<PAGE>
(2) In order to qualify as an "Incentive Stock Option," a stock
option awarded under the Stock Option Plan must meet the
conditions contained in Section 422 of the Code, including
the requirement that the shares acquired upon the exercise
of the stock option be held for one year after the date of
exercise and two years after the date of grant of the
option. The exercise of an Incentive Stock Option generally
will not, by itself, result in the recognition of taxable
income to the participant nor entitle the Company to a
deduction at the time of such exercise. However, the
difference between the exercise price and the fair market
value of the option shares on the date of exercise is an
item of tax preference which may, in certain situations,
trigger the alternative minimum tax. The alternative
minimum tax is incurred only when it exceeds the regular
income tax. The alternative minimum tax will be payable at
the rate of 26% on the first $175,000 of "minimum
taxable income" in excess of $33,750 (single person) or
$45,000 (married person filing jointly). This tax applies
at a flat rate of 28% of so much of the taxable excess as
exceeds $175,000. If a taxpayer has alternative minimum
taxable income in excess of $150,000 (married persons filing
jointly) or $112,500 (single person), the $45,000 or $33,750
exemptions are reduced by an amount equal to 35% of the
amount by which the alternative minimum taxable income of
the taxpayer exceeds $150,000 or $112,500, respectively.
Provided the applicable holding periods described above are
satisfied, the participant will recognize long-term capital
gain or loss upon resale of the shares received upon such
exercise.
(3) The exercise of a stock option which is not an Incentive
Stock Option will result in the recognition of ordinary
income by the participant on the date of exercise in an
amount equal to the difference between the exercise price
and the fair market value on the date of exercise of the
shares acquired pursuant to the stock option.
(4) The exercise of a SAR will result in the recognition of
ordinary income by the participant on the date of exercise
in an amount of cash, and/or the fair market value on that
date of the shares, acquired pursuant to the exercise.
(5) Holders of restricted stock will recognize ordinary income
on the date that the shares of restricted stock are no
longer subject to a substantial risk of forfeiture, in an
amount equal to the fair market value of the shares on that
date. In certain circumstances, a holder may elect to
recognize ordinary income and determine such fair market
value on the date of the grant of the restricted stock.
Holders of restricted stock will also recognize ordinary
income equal to their dividend or dividend equivalent
payments when such payments are received.
(6) The Company will be allowed a deduction at the time, and in
the amount of, any ordinary income recognized by the
participant under the various circumstances described above
provided that the Company meets its federal withholding tax
obligations.
<PAGE>
AWARDS UNDER THE 1995 STOCK OPTION PLAN
The following table presents information with respect to the
dollar value and the number of awards outstanding as of December
31, 1996 under the 1995 Stock Option Plan. The exercise price for
all of the outstanding awards is the market value of the Bay View
common stock on the date of grant.
<TABLE>
Value of Number
Participant Options (1) of Options
- -------------------------------------------------------------------
<S> <C> <C>
Edward H. Sondker............ $1,145,000 120,000
David A. Heaberlin........... 759,980 60,000
Robert J. Flax............... 173,750 10,000
John L. Buckley.............. 302,500 15,000
Cynthia L. Hart.............. 215,625 15,000
All current executive
officers as a group.......... 2,860,730 233,500
All current directors
who are not executive
officers, as a group......... N/A 0
All employees, including
all current officers who
are not executive officers,
as a group................... 1,277,020 67,500
</TABLE>
(1) The difference between the aggregate option exercise price
and the fair market value of the underlying shares at December 31,
1996.
Additional awards under the 1995 Stock Option Plan may be
granted to eligible participants in the future at the discretion of
the Stock Option Committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE PROPOSED AMENDMENT TO THE 1995 STOCK
OPTION PLAN
AUDITORS
The Board of Directors of the Company has appointed Deloitte
& Touche LLP, independent accountants, to be the Company's auditors
for the fiscal year ending December 31, 1997. Representatives of
Deloitte & Touche LLP are expected to attend the Meeting to respond
to appropriate questions and to make a statement if they so desire.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting must be
received at the main office of the Company, 2121 South El Camino
Real, San Mateo, California 94403, no later than December 19, 1997.
Any such proposals shall be subject to the requirements of the
proxy rules adopted under the Securities Exchange Act of 1934.
<PAGE>
OTHER MATTERS
The cost of solicitation of proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of common stock. In addition to solicitation by mail,
directors and officers of the Company and regular employees of the
Bank may solicit proxies personally or by telegraph or telephone,
without additional compensation. The Company has retained
Kissel-Blake, Inc. to assist in the solicitation of proxies, for a fee
estimated to be approximately $6,000 plus reasonable out-of-pocket
expenses.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT J. FLAX
Secretary
San Mateo, California
April 18, 1997
<PAGE>
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO SECTION 4 OF RESTATED CERTIFICATE OF
INCORPORATION OF BAY VIEW CAPITAL CORPORATION
Resolutions of the Board of Directors adopted on March 27, 1997
setting forth the proposed amendment with respect to the increase
in authorized shares of common stock:
RESOLVED, that the first sentence of Section 4 of the Restated
Certificate of Incorporation of the Company be amended as follows:
Section 4. Capital Stock. The total number of shares of capital
-------------
stock which the Corporation has authority to issue is 67,000,000,
of which 60,000,000 shall be common stock, par value $.01 per
share, and of which 7,000,000 shall be serial preferred stock, par
value $.01 per share, with rights and preferences to be determined
by the Board of Directors upon issuance.
<PAGE>
<PAGE>
BAY VIEW CAPITAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - May 22, 1997
The undersigned hereby appoints the Board of Directors of Bay
View Capital Corporation (the "Company"), with full powers of
substitution, to act as attorneys and proxies for the undersigned
to vote all shares of capital stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting") to be held at Bay View's main offices
located at 2121 South El Camino Real, San Mateo, California, on May
22, 1997 at 2:00 p.m., local time, and at any and all adjournments
and postponements thereof.
I. The election as directors of all nominees listed below
(except as marked to the contrary)
___ FOR ___ VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee,
strike a line in that nominee's name below.
PAULA R. COLLINS THOMAS M. FOSTER
II. The approval and adoption of an amendment to the Company's
Restated Certificate of Incorporation to increase the number of
shares of common stock which the Company is authorized to issue
from 20,000,000 to 60,000,000
___ FOR ___ AGAINST ___ ABSTAIN
III. The approval and adoption of an amendment to the Company's
1995 Stock Option and Incentive Plan to increase the number of
shares available for issuance thereunder from 500,000 to 1,000,000
___ FOR ___ AGAINST ___ ABSTAIN
In their discretion, the proxies are authorized to vote on
any other business that may properly come before the Meeting or any
adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES
LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING,
THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST
JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
The Board of Directors recommends a vote "FOR" the election of
the nominees listed above.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy may be revoked at any time before it is voted by:
(i) filing with the Secretary of the Company at or before the
Meeting a written notice of revocation bearing a later date than
the proxy; (ii) duly executing a subsequent proxy relating to the
same shares and delivering it to the Secretary of the Company at or
before the Meeting; or (iii) attending the Meeting and voting in
person (although attendance at the Meeting will not in and of
itself constitute revocation of a proxy). If this proxy is
properly revoked as described above, then the power of such
attorneys or proxies shall be deemed terminated and of no further
force and effect.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
<PAGE>
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy
Statement and an Annual Report to Stockholders.
Dated: ________________________, 1997
____________________________________
Signature of Stockholder
____________________________________
Signature of Stockholder
Please sign exactly as your name(s)
appear(s) to the left. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title. If shares are held
jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
<PAGE>
<PAGE>
APPENDIX B
BAY VIEW CAPITAL CORPORATION
Amended and Restated 1995 Stock Option and Incentive Plan
1. Plan Purpose. The purpose of the Plan is to promote
the long-term interests of the Corporation and its stockholders by
providing a means for attracting and retaining officers and
employees of the Corporation and its Affiliates. The Plan is
intended to be an incentive stock option plan within the meaning of
Section 422 of the Code but not all Options granted hereunder are
required to be Incentive Stock Options.
2. Definitions. The following definitions are applicable
to the Plan:
"Affiliate" -- means any "parent corporation" or
"subsidiary corporation" of the Corporation as such terms are
defined in Section 425(e) and (f), respectively, of the Code.
"Award" -- means the grant by the Committee of an
Incentive Stock Option, a Non-Qualified Stock Option, a Stock
Appreciation Right, a Limited Stock Appreciation Right, or of
Restricted Stock, or any combination thereof, as provided in the
Plan.
"Code" -- means the Internal Revenue Code of 1986, as
amended.
"Committee" -- means the Committee referred to in Section
3 hereof.
"Continuous Service" -- shall mean the absence of any
interruption or termination of service as an officer or employee of
the Corporation or an Affiliate, except that when used with respect
to persons granted an Incentive Stock Option means the absence of
any interruption or termination of service as an employee of the
Corporation or an Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Corporation or in the case of
transfers between payroll locations of the Corporation or between
the Corporation, its parent, its subsidiaries or its successor.
"Corporation" -- means Bay View Capital Corporation, a
Delaware Corporation and any successor thereto.
"Early Retirement" -- means retirement from employment
with the Corporation prior to the Participant either (i) having
reached the age of 55 or (ii) having maintained Continuous Service
for at least three years.
"Employee" -- means any person, including an officer, who
is employed by the Corporation or any Affiliate.
"ERISA" -- means the Employee Retirement Income Security
Act of 1974, as amended.
"Exercise Price" -- means (i) in the case of an Option,
the price per Share at which the Shares subject to such Option may
be purchased upon exercise of such Option and (ii) in the case of
a Right, the price per Share (other than the Market Value per Share
on the date of exercise and the Offer Price per Share as defined in
Section 10 hereof) which, upon grant, the Committee determines
shall be utilized in calculating the aggregate value which a
Participant shall be entitled to receive pursuant to Sections 9, 10
or 13 hereof upon exercise of such Right.
"Incentive Stock Option" -- means an option to purchase
Shares granted by the Committee pursuant to Section 6 hereof which
is subject to the limitations and restrictions of Section 8 hereof
and is intended to qualify under Section 422 of the Code.
"Limited Stock Appreciation Right" -- means a stock
appreciation right with respect to Shares granted by the Committee
pursuant to Sections 6 and 10 hereof.
<PAGE>
"Market Value" -- means the average of the high and low
quoted sales price on the date in question (or, if there is no
reported sale on such date, on the last preceding date on which any
reported sale occurred) of a Share on the Composite Tape for the
New York Stock Exchange-Listed Stocks, or, if on such date the
Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or if the Shares are not listed or admitted to trading on
such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which the
Shares are listed or admitted to trading, or, if the Shares are not
listed or admitted to trading on any such exchange, the mean
between the closing high bid and low asked quotations with respect
to a Share on such date on the Nasdaq Stock Market, or any similar
system then in use, or, if no such quotations are available, the
fair market value on such date of a Share as the Committee shall
determine.
"Non-Employee Director" - means a director who (i) is not
currently an Employee; (ii) does not receive compensation from the
Corporation or any Affiliate in any capacity other than as a
director (except for an amount that does not exceed the dollar
amount for which disclosure would be required pursuant to Item
404(a) of Regulation S-K); and (iii) does not possess an interest
in any other transactions and is not engaged in a business
relationship for which disclosure would be required pursuant to
Item 404(a) or (b) of Regulation S-K.
"Non-Qualified Stock Option" -- means an option to
purchase Shares granted by the Committee pursuant to Section 6
hereof, which option is not intended to qualify under Section
422(b) of the Code.
"Normal Retirement" -- means retirement from employment
with the Corporation after the Participant has (i) reached the age
of 55 and (ii) maintained Continuous Service for at least three
years.
"Option" -- means an Incentive Stock Option or a Non-Qualified
Stock Option.
"Participant" -- means any officer or employee of the
Corporation or any Affiliate who is selected by the Committee to
receive an Award.
"Plan" -- means the 1995 Stock Option and Incentive Plan
of the Corporation.
"Related" -- means (i) in the case of a Right, a Right
which is granted in connection with, and to the extent exercisable,
in whole or in part, in lieu of, an Option or another Right and
(ii) in the case of an Option, an Option with respect to which and
to the extent a Right is exercisable, in whole or in part, in lieu
thereof has been granted.
"Reload Option" -- means an Option to purchase Shares
that is granted pursuant to Section 6 hereof and is subject to the
limitations and restrictions of Section 7(g) hereof.
"Restricted Period" -- means the period of time selected
by the Committee for the purpose of determining when restrictions
are in effect under Section 11 hereof with respect to Restricted
Stock awarded under the Plan.
"Restricted Stock" -- means Shares which have been
contingently awarded to a Participant by the Committee subject to
the restrictions referred to in Section 11 hereof, so long as such
restrictions are in effect.
"Right" -- means a Limited Stock Appreciation Right or a
Stock Appreciation Right.
"Shares" -- means the shares of common stock of the
Corporation.
"Stock Appreciation Right" -- means a stock appreciation
right with respect to Shares granted by the Committee pursuant to
Sections 6 and 9 hereof.
"Ten Percent Beneficial Owner" -- means the beneficial
owner of more than ten percent of any class of the Corporation's
equity securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
<PAGE>
3. Administration. The Plan shall be administered by a
Committee consisting of two or more members, each of whom shall be
a Non-Employee Director. The members of the Committee shall be
appointed by the Board of Directors of the Corporation. Except as
limited by the express provisions of the Plan, the Committee shall
have sole and complete authority and discretion to (i) select
Participants and grant Awards; (ii) determine the number of Shares
to be subject to types of Awards generally, as well as to
individual Awards granted under the Plan; (iii) determine the terms
and conditions upon which Awards shall be granted under the Plan;
(iv) prescribe the form and terms of instruments evidencing such
grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all
determinations deemed necessary or advisable for the administration
of the Plan.
A majority of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which
a quorum is present, or acts approved in writing by a majority of
the Committee without a meeting, shall be acts of the Committee.
4. Participation. The Committee may select from time to
time Participants in the Plan from those officers and employees of
the Corporation or its Affiliates who, in the opinion of the
Committee, have the capacity for contributing to the successful
performance of the Corporation or its Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the
operation of Section 12 hereof, the maximum number of shares with
respect to which Awards may be made under the Plan is 500,000
shares. The Shares with respect to which Awards may be made under
the Plan may be either authorized and unissued shares or issued
shares heretofore or hereafter reacquired and held as treasury
shares. Shares which are subject to Related Rights and Related
Options shall be counted only once in determining whether the
maximum number of Shares with respect to which Awards may be
granted under the Plan has been exceeded. An Award shall not be
considered to have been made under the Plan with respect to any
Option or Right which terminates or with respect to Restricted
Stock which is forfeited, and new Awards may be granted under the
Plan with respect to the number of Shares as to which such
termination or forfeiture has occurred.
6. General Terms and Conditions of Options and Rights.
The Committee shall have full and complete authority and
discretion, except as expressly limited by the Plan, to grant
Options and/or Rights and to provide the terms and conditions
(which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and
conditions: (i) the Exercise Price of any Option or Right, which
shall not be less than the Market Value per Share at the date of
grant of such Option or Right, (ii) the number of Shares subject
to, and the expiration date of, any Option or Right, which
expiration date shall not exceed ten years from the date of grant,
(iii) the manner, time and rate (cumulative or otherwise) of
exercise of such Option or Right, and (iv) the restrictions, if
any, to be placed upon such Option or Right or upon Shares which
may be issued upon exercise of such Option or Right. The Committee
may, as a condition of granting any Option or Right, require that
a Participant agree not to thereafter exercise one or more Options
or Rights previously granted to such Participant. Notwithstanding
the foregoing, no individual shall be granted awards in any
calendar year with respect to more than 25% of the total shares
subject to the Plan.
7. Exercise of Options or Rights.
(a) An Option or Right granted under the Plan shall
be exercisable during the lifetime of the Participant to whom such
Option or Right was granted only by such Participant, and except as
provided in paragraphs (c), (d), (e) and (f) of this Section 7, no
such Option or Right may be exercised unless at the time such
Participant exercises such Option or Right, such Participant has
maintained Continuous Service since the date of grant of such
Option or Right.
(b) To exercise an Option or Right under the Plan,
the Participant to whom such Option or Right was granted shall give
written notice to the Corporation in form satisfactory to the
Committee (and, if partial exercises have been permitted by the
Committee, by specifying the number of Shares with respect to which
such Participant elects to exercise such Option or Right) together
with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such
notice is received by the Corporation. Payment, if any is
required, shall be made either (i) in cash (including check, bank
draft or money order) or (ii) by
<PAGE>
delivering (A) Shares already owned by the Participant and having
a fair market value equal to the applicable exercise price, such
fair market value to be determined in such appropriate manner as
may be provided by the Committee or as may be required in order to
comply with or to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(c) If a Participant to whom an Option or Right was
granted shall cease to maintain Continuous Service for any reason
(including total and partial disability and Early Retirement, but
excluding Normal Retirement, death and termination of employment by
the Corporation or any Affiliate for cause), such Participant may,
but only within the period of three months immediately succeeding
such cessation of Continuous Service and in no event after the
expiration date of such Option or Right, exercise such Option or
Right to the extent that such Participant was entitled to exercise
such Option or Right at the date of such cessation, provided,
however, that such right of exercise after cessation of Continuous
Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument
or instruments evidencing the grant of such Option or Right. If
the Continuous Service of a Participant to whom an Option or Right
was granted by the Corporation is terminated for cause, all rights
under any Option or Right of such Participant shall expire
immediately upon the giving to the Participant of notice of such
termination.
(d) If a Participant to whom an Option or Right was
granted shall cease to maintain Continuous Service due to Normal
Retirement, such Participant may, but only within the period of two
years immediately succeeding such cessation of Continuous Service
and in no event after the expiration date of such Option or Right,
exercise such Option or Right to the extent that such Participant
was entitled to exercise such Option or Right at the date of such
cessation, provided, however, that such right of exercise after
cessation of Continuous Service shall not be available to a
Participant if the Committee otherwise determines and so provides
in the applicable instrument or instruments evidencing the grant of
such Option or Right.
(e) In the event of the death of a Participant while
in the Continuous Service of the Corporation or an Affiliate or
within the three month or two year periods referred to in
paragraphs (c) and (d), respectively, of this Section 7, the person
to whom any Option or Right held by the Participant at the time of
his death is transferred by will or the laws of descent and
distribution or in the case of an Award other than an Incentive
Stock Option, pursuant to a qualified domestic relations order, as
defined in the Code or Title I of ERISA or the rules thereunder
may, but only to the extent such Participant was entitled to
exercise such Option or Right immediately prior to his death,
exercise such Option or Right at any time within a period of two
years succeeding the date of death of such Participant, but in no
event later than ten years from the date of grant of such Option or
Right. Following the death of any Participant to whom an Option
was granted under the Plan, irrespective of whether any Related
Right shall have theretofore been granted to the Participant or
whether the person entitled to exercise such Related Right desires
to do so, the Committee may, as an alternative means of settlement
of such Option, elect to pay to the person to whom such Option is
transferred by will or by the laws of descent and distribution or
in the case of an Option other than an Incentive Stock Option,
pursuant to a qualified domestic relations order, as defined in the
Code or Title I of ERISA or the rules thereunder, the amount by
which the Market Value per Share on the date of exercise of such
Option shall exceed the Exercise Price of such Option, multiplied
by the number of shares with respect to which such Option is
properly exercised. Any such settlement of an Option shall be
considered an exercise of such Option for all purposes of the Plan.
(f) Notwithstanding the provisions of subparagraphs (c)
through (e) above, the Committee may, in its sole discretion,
establish different terms and conditions pertaining to the effect
of termination to the extent permitted by applicable federal and
state law.
(g) Concurrently with the grant of any Option (an
"Underlying Option"), the Committee may authorize Reload Options
permitting the grantee of the Underlying Option to purchase for
cash, Shares or a combination thereof an aggregate number of Shares
not greater than the sum of (i) the number of Mature Shares (as
defined hereinbelow) used in exercises of the Underlying Option and
(ii) to the extent authorized by the Committee, the number of
Mature Shares used to satisfy any tax withholding requirement
incident to exercises of the Underlying Option. The grant of each
Reload Option so authorized by the Committee shall become effective
upon the exercise(a "Stock Exercise") of all or part of the
Underlying Option through the use of Shares held by the optionee
<PAGE>
for at least 12 months prior to such exercise ("Mature Shares"),
provided, however, that no Reload Option shall first become
effective after the optionee has ceased to maintain Continuous
Service. Reload Options may be authorized with respect to Options
that are themselves granted as Reload Options. Upon each Stock
Exercise of an Underlying Option, the Exercise Price of the
resulting Reload Option, the number of Shares covered thereby, and,
in the discretion of the Committee and subject to the limitations
and restrictions of Section 8 hereof, the determination that the
Reload Option is intended to qualify as an Incentive Stock Option,
shall be evidenced through an amendment to the agreement or other
instrument evidencing the Underlying Option. The Exercise Price of
a Reload Option shall be the Market Value per Share on the date the
grant of the Reload Option becomes effective. Each Reload Option
shall become fully exercisable upon its effective date. The term
of each Reload Option shall be equal to the remaining term of the
Underlying Option.
8. Incentive Stock Options. Any provision of the Plan to
the contrary notwithstanding, (i) no Incentive Stock Option shall
be granted more than ten years from the date the Plan is adopted by
the Board of Directors of the Corporation and no Incentive Stock
Option shall be exercisable more than ten years from the date such
Incentive Stock Option is granted, (ii) the Exercise Price of any
Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any
Incentive Stock Option shall not be transferable by the Participant
to whom such Incentive Stock Option is granted other than by will
or the laws of descent and distribution and shall be exercisable
during such Participant's lifetime only by such Participant,
(iv) no Incentive Stock Option shall be granted to any individual
who, at the time such Incentive Stock Option is granted, owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or any Affiliate unless the
Exercise Price of such Incentive Stock Option is at least 110% of
the Market Value per Share at the date of grant and such Incentive
Stock Option is not exercisable after the expiration of five years
from the date such Incentive Stock Option is granted, and (v) the
aggregate Market Value (determined as of the time any Incentive
Stock Option is granted) of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by a
Participant in any calendar year shall not exceed $100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right
shall, upon its exercise, entitle the Participant to whom such
Stock Appreciation Right was granted to receive a number of Shares
or cash or combination thereof, as the Committee in its discretion
shall determine, the aggregate value of which (i.e., the sum of the
amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as possible, it being understood
that the Corporation shall not issue any fractional shares) the
amount by which the Market Value per Share on the date of such
exercise shall exceed the Exercise Price of such Stock Appreciation
Right, multiplied by the number of Shares with respect of which
such Stock Appreciation Right shall have been exercised. A Stock
Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to
time in each case determine. At the time of grant of an Option the
Committee shall determine whether and to what extent a Related
Stock Appreciation Right shall be granted with respect thereto;
provided, however, and notwithstanding any other provision of the
Plan, that if the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the restrictions
and limitations of Section 8 hereof as if such Related Stock
Appreciation Right were an Incentive Stock Option and as if other
rights which are Related to Incentive Stock Options were Incentive
Stock Options. In the case of a Related Option, such Related
Option shall cease to be exercisable to the extent of the Shares
with respect to which the Related Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option,
any Related Stock Appreciation Right shall terminate to the extent
of the Shares with respect to which the Related Option was
exercised or terminated.
10. Limited Stock Appreciation Rights. At the time of
grant of an Option or Stock Appreciation Right to any Participant,
the Committee shall have full and complete authority and discretion
to also grant to such Participant a Limited Stock Appreciation
Right which is related to such Option or Stock Appreciation Right;
provided, however and notwithstanding any other provision of the
Plan, that if the Related Option is an Incentive Stock Option, the
Related Limited Stock Appreciation Right shall satisfy all the
restrictions and limitations of Section 8 hereof as if such Related
Limited Stock Appreciation Right were an Incentive Stock Option and
as if all other Rights which are Related to Incentive Stock Options
were Incentive Stock Options. Notwithstanding any other provision
of the Plan, a Limited Stock Appreciation Right shall be
exercisable only during the period beginning on the first day
following the date of expiration of any "offer" (as such term is
hereinafter defined) and ending on the forty-fifth day following
such date.
<PAGE>
A Limited Stock Appreciation Right shall, upon its exercise,
entitle the Participant to whom such Limited Stock Appreciation
Right was granted to receive an amount of cash equal to the amount
by which the "Offer Price per Share" (as such term is hereinafter
defined) or the Market Value on the date of such exercise, as shall
have been provided by the Committee in its discretion at the time
of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect
to which such Limited Stock Appreciation Right shall have been
exercised. Upon the exercise of a Limited Stock Appreciation
Right, any Related Option and/or Related Stock Appreciation Right
shall cease to be exercisable to the extent of the Shares with
respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option or
Related Stock Appreciation Right, any Related Limited Stock
Appreciation Right shall terminate to the extent of the Shares with
respect to which such Related Option or Related Stock Appreciation
Right was exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall
mean any tender offer or exchange offer for Shares other than one
made by the Corporation, provided that the corporation, person or
other entity making the offer acquires pursuant to such offer
either (i) 25% of the Shares outstanding immediately prior to the
commencement of such offer or (ii) a number of shares which,
together with all other shares acquired in any tender offer or
exchange offer (other than one made by the Corporation) which
expired within sixty days of the expiration date of the offer in
question, equals 25% of the Shares outstanding immediately prior to
the commencement of the offer in question. The term "Offer Price
per Share" as used in this Section 10 shall mean the highest price
per Share paid in any Offer which Offer is in effect any time
during the period beginning on the sixtieth day prior to the date
on which a Limited Stock Appreciation Right is exercised and ending
on the date on which such Limited Stock Appreciation Right is
exercised. Any securities or property which are part or all of the
consideration paid for Shares in the Offer shall be valued in
determining the Offer Price per Share at the higher of (i) the
valuation placed on such securities or property by the corporation,
person or other entity making such Offer or (ii) the valuation
placed on such securities or property by the Committee.
11. Terms and Conditions of Restricted Stock. The
Committee shall have full and complete authority, subject to the
limitations of the Plan, to grant awards of Restricted Stock and,
in addition to the terms and conditions contained in paragraphs (a)
through (f) of this Section 11, to provide such other terms and
conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Committee
shall determine and provide in the agreement referred to in
paragraph (d) of this Section 11.
(a) At the time of an award of Restricted Stock, the
Committee shall establish for each Participant a Restricted Period
during which or at the expiration of which, as the Committee shall
determine and provide in the agreement referred to in paragraph (d)
of this Section 11, the shares awarded as Restricted Stock shall
vest, and subject to any such other terms and conditions as the
Committee shall provide shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted
Period. Except for such restrictions, and subject to paragraphs
(c), (d) and (e) of this Section 11 and Section 12 hereof, the
Participant as owner of such shares shall have all the rights of a
stockholder including but not limited to the right to receive all
dividends paid on such shares and the right to vote such shares.
The Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall
lapse with respect to any shares of Restricted Stock prior to the
expiration of the Restricted Period with respect thereto, or to
remove any or all of such restrictions, whenever it may determine
that such action is appropriate by reason of changes in applicable
tax or other laws or other changes in circumstances occurring after
the commencement of such Restricted Period.
(b) Except as provided in Section 14 hereof, if a
Participant ceases to maintain Continuous Service for any reason
(other than death, total or partial disability or Normal or Early
Retirement) unless the Committee shall otherwise determine and
provide in the agreement referred to in paragraph (d) of this
Section 11, all shares of Restricted Stock theretofore awarded to
such Participant and which at the time of such termination of
Continuous Service are subject to the restrictions imposed by
paragraph (a) of this Section 11 shall upon such termination of
Continuous Service be forfeited and returned to the Corporation.
Unless the Committee shall have provided in the agreement referred
to in paragraph (d) of this Section 11 for a ratable lapse of
restrictions with respect to an award of shares of Restricted Stock
during the Restricted Period, if a Participant ceases to maintain
Continuous Service by reason of death, total or partial disability
or Normal or Early Retirement, such portion of
<PAGE>
such shares of Restricted Stock awarded to such Participant which
at the time of such termination of Continuous Service are subject
to the restrictions imposed by paragraph (a) of this Section 11 as
shall be equal to the portion of the Restricted Period with respect
to such shares which shall have elapsed at the time of such
termination of Continuous Service shall be free of restrictions and
shall not be forfeited.
(c) Each certificate in respect of shares of
Restricted Stock awarded under the Plan shall be registered in the
name of the Participant and deposited by the Participant, together
with a stock power endorsed in blank, with the Corporation and
shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and conditions
(including forfeiture) contained in the 1995 Stock Option and
Incentive Plan of Bay View Capital Corporation and an Agreement
entered into between the registered owner and Bay View Capital
Corporation. Copies of such Plan and Agreement are on file in the
offices of the Secretary of Bay View Capital Corporation, 2121
South El Camino Real, San Mateo, California 94403."
(d) At the time of an award of shares of Restricted
Stock, the Participant shall enter into an Agreement with the
Corporation in a form specified by the Committee, agreeing to the
terms and conditions of the award and such other matters as the
Committee shall in its sole discretion determine.
(e) At the time of an award of shares of Restricted
Stock, the Committee may, in its discretion, determine that the
payment to the Participant of dividends declared or paid on such
shares, or a specified portion thereof, by the Corporation shall be
deferred until the earlier to occur of (i) the lapsing of the
restrictions imposed under paragraph (a) of this Section 11 or
(ii) the forfeiture of such shares under paragraph (b) of this
Section 11, and shall be held by the Corporation for the account of
the Participant until such time. In the event of such deferral,
there shall be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning of
the year at a rate per annum as the Committee, in its discretion,
may determine. Payment of deferred dividends, together with
interest accrued thereon as aforesaid, shall be made upon the
earlier to occur of the events specified in (i) and (ii) of the
immediately preceding sentence.
(f) At the expiration of the restrictions imposed by
paragraph (a) of this Section 11, the Corporation shall redeliver
to the Participant (or where the relevant provision of paragraph
(b) of this Section 11 applies in the case of a deceased
Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to
paragraph (c) of this Section 11 and the Shares represented by such
certificate(s) shall be free of the restrictions referred to in
paragraph (a) of this Section 11.
12. Adjustments Upon Changes in Capitalization. In the
event of any change in the outstanding Shares subsequent to the
effective date of the Plan by reason of any reorganization,
recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum
aggregate number and class of shares as to which Awards may be
granted under the Plan and the number and class of shares with
respect to which Awards theretofore have been granted under the
Plan and shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other
securities received, as a result of any of the foregoing, by a
Participant with respect to Restricted Stock shall be subject to
the same restrictions and the certificate(s) or other instruments
representing or evidencing such shares or securities shall be
legended and deposited with the Corporation in the manner provided
in Section 11 hereof.
13. Effect of Merger on Options or Rights. In the case of
any merger, consolidation or combination of the Corporation (other
than a merger, consolidation or combination in which the
Corporation is the continuing corporation and which does not result
in the outstanding Shares being converted into or exchanged for
different securities, cash or other property, or any combination
thereof), any Participant to whom an Option or Right has been
granted shall have, in addition to the rights of exercise pursuant
to Section 7 hereof, the right (subject to the provisions of the
Plan and any limitation applicable to such Option or Right),
thereafter and during the term of each such Option or Right, to
receive upon exercise of any such Option or Right an amount equal
to the excess of the fair market value on the date of such exercise
of the securities, cash or other property, or combination thereof,
<PAGE>
receivable upon such merger, consolidation or combination in
respect of a Share over the Exercise Price of such Right or Option,
multiplied by the number of Shares with respect to which such
Option or Right shall have been exercised. Such amount may be
payable fully in cash, fully in one or more of the kind or kinds of
property payable in such merger, consolidation or combination, or
partly in cash and partly in one or more of such kind or kinds of
property, all in the discretion of the Committee.
14. Effect of Change in Control. Each of the events
specified in the following clauses (i) through (iii) of this
Section 14 shall be deemed a "change of control": (i) any third
person, including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, shall become the beneficial owner
of shares of the Corporation with respect to which 25% or more of
the total number of votes for the election of the Board of
Directors of the Corporation may be cast, (ii) as a result of, or
in connection with, any cash tender offer, merger or other business
combination, sale of assets or contested election, or combination
of the foregoing, the persons who were directors of the Corporation
shall cease to constitute a majority of the Board of Directors of
the Corporation, or (iii) the stockholders of the Corporation shall
approve an agreement providing either for a transaction in which
the Corporation will cease to be an independent publicly-owned
corporation or for a sale or other disposition of all or
substantially all the assets of the Corporation. Upon a change in
control, unless the Committee shall have otherwise provided in the
agreement referred to in paragraph (d) of Section 11 hereof, any
Restricted Period with respect to Restricted Stock theretofore
awarded to such Participant shall lapse upon such termination and
all Shares awarded as Restricted Stock shall become fully vested in
the Participant to whom such Shares were awarded. If a tender
offer or exchange offer for Shares (other than such an offer by the
Corporation) is commenced, or if the event specified in clause
(iii) above shall occur, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option or
Stock Appreciation Right, all Options and Stock Appreciation Rights
theretofore granted and not fully exercisable shall become
exercisable in full upon the happening of such event; provided,
however, that no Option or Stock Appreciation Right which has
previously been exercised or otherwise terminated shall become
exercisable.
15. Assignments and Transfers. No Award nor any right or
interest of a Participant under the Plan in any instrument
evidencing any Award under the Plan may be assigned, encumbered or
transferred except, in the event of the death of a Participant, by
will or the laws of descent and distribution, or in the case of
Awards other than Incentive Stock Options pursuant to a qualified
domestic relations order, as defined in the Code or Title I of
ERISA or the rules thereunder.
16. Employee Rights Under the Plan. No officer or
employee shall have a right to be selected as a Participant nor,
having been so selected, to be selected again as a Participant and
no officer, employee or other person shall have any claim or right
to be granted an Award under the Plan or under any other incentive
or similar plan of the Corporation or any Affiliate. Neither the
Plan nor any action taken thereunder shall be construed as giving
any employee any right to be retained in the employ of the
Corporation or any Affiliate.
17. Delivery and Registration of Stock. The Corporation's
obligation to deliver Shares with respect to an Award shall, if the
Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Participant to
whom such Shares are to be delivered, in such form as the Committee
shall determine to be necessary or advisable to comply with the
provision of the Securities Act of 1933 or any other federal, state
or local securities legislation. It may be provided that any
representation requirement shall become inoperative upon a
registration of the Shares or other action eliminating the
necessity of such representation under such Securities Act or other
securities legislation. The Corporation shall not be required to
deliver any Shares under the Plan prior to (i) the admission of
such shares to listing on any stock exchange on which Shares may
then be listed, and (ii) the completion of such registration or
other qualification of such Shares under any state or federal law,
rule or regulation, as the committee shall determine to be
necessary or advisable.
18. Withholding Tax. Upon the termination of the
Restricted Period with respect to any shares of Restricted Stock
(or at any such earlier time, if any, that an election is made by
the Participant under Section 83(b) of the Code, or any successor
provision thereto, to include the value of such shares in taxable
income), the Corporation shall have the right to require the
Participant or other person receiving such shares to pay the
Corporation the amount of any taxes which the Corporation is
required to withhold with respect to such shares, or, in lieu
thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required
<PAGE>
to be withheld. The Corporation shall have the right to deduct
from all dividends paid with respect to shares of Restricted Stock
the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments.
The Corporation shall have the right to deduct from all
amounts paid in cash with respect to the exercise of a Right under
the Plan any taxes required by law to be withheld with respect to
such cash payments. Where a Participant or other person is
entitled to receive Shares pursuant to the exercise of an Option or
Right pursuant to the Plan, the Corporation shall have the right to
require the Participant or such other person to pay the Corporation
the amount of any taxes which the Corporation is required to
withhold with respect to such Shares, or, in lieu thereof, to
retain, or sell without notice, a number of such shares sufficient
to cover the amount required to be withheld.
19. Amendment or Termination. The Board of Directors of
the Corporation may amend, suspend or terminate the Plan or any
portion thereof at any time, but (except as provided in Section 12
hereof) no amendment shall be made without approval of the
stockholders of the Corporation which shall (i) materially increase
the benefits accruing to participants under the Plan; (ii)
materially increase the number of securities which may be issued
under the Plan; or (iii) materially modify the requirements as to
eligibility for participation in the Plan, provided, however, that
no such amendment, suspension or termination shall impair the
rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
20. Effective Date and Term of Plan. The Plan shall
become effective upon its adoption by the Board of Directors of the
Corporation, subject to the approval of the Plan by the
shareholders of the Corporation. It shall continue in effect for
a term of ten years unless sooner terminated under Section 19
hereof.
