As filed with the Securities and Exchange Commission on October 14, 1999
Registration No. 333-83199
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
To
FORM S-3
Registration Statement Under the Securities Act of 1933
BAY VIEW CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-3078031
(State or other jurisdiction
of incorporation or organization) (I.R.S. Employer Identification No.)
ROBERT J. FLAX, ESQ.
Executive Vice President
Bay View Capital Corporation
1840 Gateway Drive 1840 Gateway Drive
San Mateo, CA 94404 San Mateo, CA 94404
(650) 312-7200 (650) 312-7200
(Address, including zip code, and (Name, address, including zip code,
telephone number, including area code, and telephone number, area code,
of registrant's principal including area code, of agent
executive offices) for service
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Please send copies of all communications to:
<S> <C> <C> <C>
CHRISTOPHER R. KELLY, P.C. IRWIN L. GUBMAN, ESQ. TODD H. BAKER, ESQ. STANLEY SCHWARTZ, ESQ.
Silver, Freedman & Taff, L.L.P. General Counsel Gibson, Dunn & Crutcher LLP Orloff, Lowenbach,
(A Limited Liability Partnership Imperial Credit Industries, Inc. One Montgomery Street Stifelman & Siegel, P.A.
Including Professional Corporations) 23550 Hawthorne Boulevard Telesis Tower 101 Eisenhower Parkway
1100 New York Avenue, N.W. Building 1, Suite 110 San Francisco, CA 94104-4505 Roseland, NJ 07068
Seventh Floor, East Tower Torrance, CA 90505 (415) 393-8200 (973) 622-6200
Washington, D.C. 20005 (310) 373-1704
(202) 414-6100
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions. If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans, please check
the following box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |_|
If the Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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Calculation of Registration Fee
===============================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to offering price aggregate offering Amount of
securities to be registered be registered per unit price registration fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 5,759,733 shares $14.22(2) $81,903,404 $7,357(2)
value(1)
===============================================================================================================================
<FN>
(1) Includes one attached common stock purchase right per share.
(2) Estimated solely for the purpose of calculating the registration fee. The
registration fee has been computed pursuant to Rule 457(c) based on the
average of the high and low sales prices of the common stock, $.01 par
value, of Bay View Capital Corporation, as reported on the New York Stock
Exchange on October 12, 1999, less the $15,413 filing fee previously paid.
</FN>
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The information in this prospectus is not complete and may be changed. These
securities may not sold until the Securities and Exchange Commission declares
our registration statement effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
PROSPECTUS
5,008,463 SHARES
BAY VIEW
CAPITAL CORPORATION
COMMON STOCK
A stockholder of Bay View Capital Corporation is offering 5,008,463 shares of
common stock. We will not receive any of the proceeds for any of the shares sold
in this offering, unless the underwriters' over-allotment option is exercised.
Our shares are listed on the New York Stock Exchange under the symbol "BVC." The
last reported sale price for a share of our common stock on _____, 1999 was
$_____ .
Investing in the shares involves risk. Risk Factors begin on page 12.
Per Share Total
Public Offering Price.................. $ $
Underwriting Discount.................. $ $
Proceeds to Selling Stockholder........ $ $
The underwriters have a 30-day option to purchase up to 751,270 additional
shares of common stock from us to cover over-allotments, if any.
The shares of common stock offered are not deposits, savings accounts or other
obligations of a bank or savings association and are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency.
Neither the Securities and Exchange Commission, the Office of the Comptroller of
the Currency nor any state securities commission or other regulatory body has
approved of anyone's investment in these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The underwriters expect to deliver the shares on or about , 1999.
- --------------------------------------------------------------------------------
LEHMAN BROTHERS
DAIN RAUSCHER WESSELS
a division of Dain Rauscher Incorporated
PAINEWEBBER INCORPORATED
U.S. BANCORP PIPER JAFFRAY
, 1999
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EXPLANATORY NOTE
This prospectus will not be used by Bay View Capital Corporation or the selling
stockholder until Bay View Capital Corporation's pending acquisition of
Franchise Mortgage Acceptance Company is completed. Therefore, most of the
non-financial information in the prospectus concerning Bay View Capital
Corporation is presented in a manner that assumes the pending acquisition has
already been completed.
TABLE OF CONTENTS
Page
----
Introductory Matters........................................ 2
Summary..................................................... 3
Risk Factors................................................ 12
Forward-Looking Information................................. 19
Use of Proceeds............................................. 20
Market Prices and Dividends................................. 20
Capitalization.............................................. 21
Unaudited Pro Forma Condensed Combined Financial Data....... 22
Management.................................................. 27
Selling Stockholder......................................... 30
Underwriting................................................ 30
Legal Matters............................................... 32
Experts..................................................... 32
Where You Can Find More Information......................... 32
You should rely only on the information incorporated by reference or contained
in this prospectus. We have not, and the underwriters have not, authorized any
other person to provide you with different information. This prospectus is not
an offer to sell, nor is it seeking an offer to buy, these securities in any
state where the offer or sale is not permitted. The information in this
prospectus is complete and accurate only as of the date on the front cover, and
the information may have changed since that date.
INTRODUCTORY MATTERS
Unless we tell you otherwise, all of the information in this prospectus assumes
that the underwriters do not exercise their over-allotment option. References to
"we," "our" and "Bay View" generally refer to Bay View Capital Corporation and
its subsidiaries on a consolidated basis, unless the context otherwise requires.
2
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SUMMARY
THE ITEMS IN THE FOLLOWING SUMMARY ARE DESCRIBED IN MORE DETAIL LATER IN THIS
PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
THIS SUMMARY PROVIDES AN OVERVIEW OF SELECTED INFORMATION AND DOES NOT CONTAIN
ALL OF THE INFORMATION YOU SHOULD CONSIDER. THEREFORE, YOU SHOULD ALSO READ THE
MORE DETAILED INFORMATION SET OUT IN THIS PROSPECTUS, THE FINANCIAL STATEMENTS
AND THE OTHER INFORMATION INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
BUSINESS OF BAY VIEW CAPITAL CORPORATION
Bay View is a diversified financial services holding company. Our primary
subsidiary is Bay View Bank, N.A., a national bank with 57 branches serving the
San Francisco Bay area and one branch in southern California. Bay View Bank
currently has the largest deposit franchise of any bank exclusively serving the
San Francisco Bay area. As of June 30, 1999, we had $5.9 billion of total
assets, $4.5 billion of net loans and leases, $3.3 billion of deposits and
stockholders' equity of $381 million.
For most of its history, Bay View Bank operated as a traditional savings and
loan, specializing in the origination and retention of single-family and
multi-family first mortgage loans, funded by longer-term, relatively high-cost
certificates of deposit. During the latter half of 1995, we began a series of
initiatives designed to enhance the value of our business and recruited a new
management team with significant commercial banking experience. Since that time,
we have been transitioning our business by emphasizing commercial banking
activities. In January 1998, we acquired America First Eureka Holdings, Inc. and
its wholly owned subsidiary, EurekaBank, a savings bank with approximately $2.3
billion in total assets as of December 31, 1997. We then merged EurekaBank with
Bay View Bank, which significantly expanded our banking and depository presence
in the San Francisco Bay area and allowed us to realize operational
efficiencies. On March 1, 1999, Bay View Bank formalized its transformation to a
commercial banking entity by converting from a federal stock savings bank to a
national bank.
As discussed below, on November 1, 1999, we acquired Franchise Mortgage
Acceptance Company, or FMAC, one of the nation's leading small business lenders
specializing in franchise concept loans. Eighty-five percent of the purchase
price was paid in approximately 13.9 million shares of our common stock and the
remaining 15% was paid in approximately $53.3 million in cash, including
payments for acquisition and other closing costs. The transaction was valued at
approximately $ million on the date of closing. For further information about
our acquisition of FMAC, see "-- Recent Developments" below.
MISSION/STRATEGIES
Our mission is to build a diversified financial services company by investing in
niche banking businesses with risk-adjusted returns which enhance our
stockholder value. Our strategies center around our continued transition to
commercial banking activities and the expected expansion of our net interest
margin. In order to realize our goals, our management seeks to:
o replace lower-yielding single-family mortgage loans and
mortgage-backed securities on our balance sheet with consumer and
commercial loans and leases with higher risk-adjusted returns, shorter
maturities and less sensitivity to interest rate changes;
o enhance and expand Bay View Bank's deposit base by emphasizing
lower-cost transaction accounts, including commercial and small
business checking accounts, instead of higher-cost certificates of
deposit combined with selected branch acquisitions;
o redeploy our excess capital in businesses intended to generate assets
with higher risk-adjusted returns than those typically provided by
mortgage loans and mortgage-backed securities; and
o maintain our capital level at or above the "well-capitalized" level as
defined for bank regulatory purposes.
3
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BUSINESS PLATFORMS
At December 31, 1998, we reported on three business platforms: a Banking
Platform, a Consumer Platform and a Commercial Platform. The Banking Platform
included single-family, multi-family and commercial mortgage loans,
mortgage-backed securities and retail and business deposit products and
services. The Consumer Platform included motor vehicle loans and leases and home
equity loans. The Commercial Platform included asset-based lending, factoring
and commercial leasing activities. Effective January 1, 1999, we expanded our
business platforms to four in order to facilitate a more effective presentation
and analysis of our different business activities. Our current platforms are
outlined below.
Our BANKING PLATFORM includes single-family, multi-family and commercial
mortgage loans, mortgage-backed securities, retail and business deposit products
and services and asset-based commercial loan participations. The Banking
Platform also includes loans to small and medium-sized businesses (primarily
franchise operators) purchased from FMAC. We expect to present our franchise
lending activities as a separate business platform in future periods. Through
our Banking Platform, we seek to enhance the value of our retail branch system
through internal growth, new and enhanced products and services, acquisitions
and purchases of deposits. The Banking Platform also seeks to increase
lower-cost transaction accounts, such as checking, savings and money market
accounts, as a source of funding for our overall business. Transaction accounts
represented 53.5% of our total retail deposits as of June 30, 1999, as compared
to 21.3% as of December 31, 1995, an increase which has contributed to our
declining cost of funds. As of June 30, 1999, the Banking Platform had loans
outstanding of $3.1 billion, representing 68.9% of our total gross loan and
lease portfolio, including $487.1 million of franchise loans purchased from
FMAC.
Our HOME EQUITY PLATFORM includes high loan-to-value home equity loans that we
purchase from other lenders and home equity loans and lines of credit originated
by our branch network. Home equity loans are secured by a lien, which is
generally junior in priority to a senior lien on the borrower's home. High
loan-to-value home equity loans that we purchase may have, when added to
existing senior lien balances, a post-funding combined loan-to-value ratio of up
to 125% of the value of the home securing the loan. Home equity loans that we
originate generally have a combined loan-to-value ratio of 80% or less. At June
30, 1999, the combined loan-to-value ratio for our high loan-to-value home
equity loan portfolio was approximately 115%. We seek to minimize the risk of
high loan-to-value home equity loans by focusing on loans to better quality
borrowers. Our underwriting standards for high loan-to-value home equity loans
focus on the borrower's ability to repay, as demonstrated by debt-to-income
ratios at the time of origination, as well as the borrower's willingness to
repay, as measured by Fair, Isaac & Company, Incorporated, or FICO, scores. At
June 30, 1999, our high loan-to-value home equity loan portfolio had an average
borrower debt-to-income ratio of approximately 39% and an average FICO score of
approximately 670. At June 30, 1999, the Home Equity Platform had loans
outstanding of $619.1 million, representing 13.9% of our total gross loan and
lease portfolio, of which $465.5 million, or 10.5% of our total gross loan and
lease portfolio, were high loan-to-value home equity loans.
Our AUTO PLATFORM includes high-quality, fixed-rate motor vehicle loans and
leases purchased and underwritten by Bay View Bank's wholly owned subsidiary,
Bay View Acceptance Corporation. Through our Auto Platform, we seek to identify
product niches which are not the primary focus of traditional competitors in the
auto lending area. For example, we offer motor vehicle loans to borrowers who
desire a higher loan amount and/or a longer term than is typically available
from other sources. In return for this flexibility, we charge borrowers higher
interest rates than those typically offered by traditional sources of motor
vehicle financing. We also pursue geographic and product niches in our
conventional auto loan and auto lease financing businesses. The motor vehicle
loans generated by our Auto Platform during the first six months of 1999 had an
average FICO score of 719 and the operating leased assets generated by our Auto
Platform during the first six months of 1999 had an average FICO score of 734.
At June 30, 1999, the Auto Platform had motor vehicle loans outstanding of
$638.8 million, representing 14.4% of our total gross loan and lease portfolio.
Additionally, the Auto Platform had $338.8 million in operating leased assets at
June 30, 1999.
4
<PAGE>
Our COMMERCIAL PLATFORM includes the asset-based lending, factoring and
commercial leasing activities of Bay View Bank's wholly owned subsidiary, Bay
View Commercial Finance Group. In December 1997, the Commercial Platform was
expanded by the formation of a new asset-based lending group known as Bay View
Financial Corporation. We added personnel with significant industry experience,
relocated our asset-based lending business to southern California, one of the
top asset-based lending markets in the country, and added new and enhanced
products to the asset-based lending segment's product array. As of June 30,
1999, the Commercial Platform had loans and leases outstanding of $124.8
million, representing 2.8% of our total gross loan and lease portfolio. The
Commercial Platform also originates asset-based commercial participation loans
for the Banking Platform. These loans totaled $54.1 million at June 30, 1999.
RECENT DEVELOPMENTS
ACQUISITION OF FMAC. On November 1, 1999, we acquired FMAC, one of the nation's
leading small business lenders specializing in franchise concept loans. We paid
approximately 13.9 million shares of our common stock and $53.3 million in cash
to acquire FMAC, including payments for acquisition and other closing costs. In
addition to these amounts, we remain obligated to pay the former shareholders of
Bankers Mutual, which was acquired by FMAC in April 1998, up to $22.5 million in
cash under the "earn-out" agreement between Bankers Mutual and FMAC if Bankers
Mutual meets certain performance targets. We contributed substantially all of
FMAC's assets and liabilities to new operating subsidiaries of Bay View Bank,
which are operating the FMAC businesses under the "Franchise Mortgage Acceptance
Company" and "Bankers Mutual" names. The acquisition provides us with a new
business platform focused on lending to franchised quick-service restaurants,
such as Burger King, Wendy's, Pizza Hut and KFC, and casual dining restaurants,
such as TGI Friday's, Applebees and Denny's. The acquisition also provides us
with established lending groups focused on branded retail energy businesses,
such as service stations, convenience stores, truck stops, car washes and quick
lube businesses, and funeral home and cemetery owners. In addition, Bankers
Mutual is one of the nation's leading multi-family lenders and we expect to
continue to expand that business.
We believe that the acquisition of FMAC will accelerate the strategic
transformation of our balance sheet by allowing us to:
o replace more of our single-family mortgage and multi-family assets
with franchise loans with higher risk-adjusted yields;
o use our deposit base to reduce FMAC's historical funding costs;
o increase our interest income by reducing FMAC's historical dependency
on securitizations by retaining a portion of their franchise loan
originations; and
o use FMAC's loan originations to diversify our loan products and
geographic concentration.
FMAC originated $2.1 billion in loans during the year ended December 31, 1998,
of which $1.2 billion were franchise loans and $900 million were multi-family
loans. FMAC originated $909 million in loans during the first six months of
1999, of which $573 million were franchise loans and $336 million were
multi-family loans. The average initial borrower loan balance of franchise loans
originated was $3.6 million during 1998 and $4.8 million during the first six
months of 1999. Historically, substantially all of FMAC's loan originations were
securitized or sold. FMAC has historically controlled its loss exposure through
lending to experienced operators, detailed industry knowledge, relationships
with both franchisors and franchisees system-wide, active oversight of its
existing servicing portfolio, strict underwriting criteria and its ability to
attract qualified replacement franchisees/borrowers to assume delinquent loans.
At June 30, 1999, its servicing portfolio totaled $6.0 billion, of which $3.0
billion were commercial franchise loans and $3.0 billion were multi-family
loans. FMAC's business is, however, subject to a number of risks, including
those described on page 17 under the caption "Risks Related to the Acquisition
of FMAC." At June 30, 1999, FMAC had total assets of $683 million and
stockholders' equity of $146 million.
5
<PAGE>
BRANCH PURCHASES. On September 25, 1999, we purchased two branches representing
approximately $117 million in deposits from Luther Burbank Savings and paid a
5.25% deposit premium. These new branches in Mill Valley and Novato, California
increased our market share ranking in Marin County from tenth to sixth.
SUBORDINATED NOTES OFFERING. On August 18, 1999, Bay View Bank issued $50
million of 10% subordinated notes due 2009. The proceeds from the subordinated
notes are being used for general corporate purposes, including, among other
things, the payment of dividends to Bay View to partially fund our acquisition
of FMAC. The subordinated notes qualify as Tier 2 capital for regulatory
purposes.
OFFICE LOCATION
Our principal executive offices are located at 1840 Gateway Drive, San Mateo,
California 94404 and our telephone number is (650) 312-7200.
THE OFFERING
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Common stock offered by the selling stockholder.......5,008,463 shares
Common stock outstanding after the offering...........32,553,000 shares(1)
Offering price........................................ per share
Use of proceeds.......................................We will not receive any of the proceeds from the sale of the
shares being offered by the selling stockholder. In the
event that the underwriters exercise their option to
purchase additional shares of common stock from us, we will
use any net proceeds from that sale for our general
corporate purposes. We may also use the proceeds for
acquisitions of complementary businesses.
New York Stock Exchange symbol........................BVC
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<FN>
(1) Excludes _________ shares of common stock which may be issued under stock
options outstanding at _______, 1999 with a weighted average exercise price
of $_____ per share.
</FN>
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6
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SUMMARY CONSOLIDATED FINANCIAL DATA OF BAY VIEW
The following financial information is derived in part from our audited
financial statements for 1994 through 1998. The information at or for the
six-month periods ended June 30, 1999 and 1998 is unaudited and was derived from
our unaudited consolidated quarterly financial statements. However, in the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation at such dates and for such
periods have been made. The results of operations for the six-month period ended
June 30, 1999 are not necessarily indicative of results that may be expected for
the full fiscal year. All information is presented in accordance with generally
accepted accounting principles, or GAAP. The per common share data has been
restated to reflect the issuance of stock dividends. The information is only a
summary and you should read it in conjunction with our historical financial
statements and related notes contained in the annual reports and other
information that we have filed with the SEC. This historical financial
information has also been incorporated into this prospectus by reference. We
have listed the documents that we incorporate by reference under the heading
"Where You Can Find More Information."
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At or For the Six
Months Ended
June 30, At or For the Year Ended December 31,
-----------------------------------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
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Statement of Financial (Dollars In Thousands, Except Per Share Amounts)
Condition Data(1):
Total assets.................... $5,903,328 $5,720,109 $5,596,232 $3,246,476 $3,300,262 $3,004,496 $3,166,529
Mortgage-backed
securities.................. 614,145 770,977 635,389 470,261 577,613 731,378 921,680
Loans and leases, net........... 4,473,587 4,387,974 4,191,269 2,373,113 2,474,717 2,062,268 2,054,563
Deposits........................ 3,346,875 3,313,765 3,269,637 1,677,135 1,763,967 1,819,840 1,707,376
Borrowings...................... 2,055,264 1,986,356 1,833,116 1,355,976 1,245,537 941,465 1,219,958
Capital securities.............. 90,000 -- 90,000 -- -- -- --
Stockholders' equity............ 381,054 393,902 377,811 173,627 200,062 207,977 217,315
Operating Data(1)(2):
Interest income................. 202,737 199,413 406,363 242,244 241,755 216,463 197,326
Interest expense................ (119,208) (124,135) (251,762) (154,908) (160,773) (160,547) (130,401)
----------- ------------ ---------- ---------- ----------- ---------- -----------
Net interest income............. 83,529 75,278 154,601 87,336 80,982 55,916 66,925
Provision for losses on
loans and leases............ (12,111) (2,360) (9,114) (1,952) (1,898) (4,284) (2,367)
Gain (loss) on sale of
loans and securities........ -- 419 1,060 925 (1,453) (2,510) (1,081)
Leasing income.................. 22,752 1,052 11,341 -- -- -- --
Other noninterest income........ 11,330 8,860 18,671 11,830 10,017 8,652 8,619
General and administrative
expenses.................... (52,035) (56,972) (113,567) (71,913) (58,955) (57,016) (47,287)
Dividend expense on Capital
securities.................. (4,469) -- (244) -- -- -- --
Leasing expense................. (15,619) (708) (7,682) -- -- -- --
SAIF recapitalization
assessment.................. -- -- -- -- (11,750) -- --
Income from real estate
owned, net...................... 40 78 181 543 4,806 1,081 95
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<CAPTION>
At or For the Six
Months Ended
June 30, At or For the Year Ended December 31,
-----------------------------------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
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Operating Data(1)(2):
Recovery of (provision
for) losses on real
estate...................... $ (17) $ 108 $ 59 $ 585 $ 103 $ (749) $ (145)
Amortization of
intangible assets........... (5,787) (5,611) (11,372) (4,088) (2,606) (3,944) (2,418)
-------- -------- -------- -------- --------- ------- --------
Income (loss) before income
tax expense/benefit......... 27,613 20,144 43,934 23,266 19,246 (2,854) 22,341
Income tax (expense)
benefit..................... (12,944) (9,850) (21,215) (9,245) (8,277) 708 (7,828)
Extraordinary items, net
of tax...................... -- -- -- -- -- (2,544) --
-------- -------- -------- -------- --------- ------- -------
Net income (loss)............... $ 14,669 $ 10,294 $ 22,719 $ 14,021 $ 10,969 $(4,690) $ 14,513
======== ======== ======== ======== ========= ======= ========
Earnings (loss) per diluted share:
Income (loss) before
extraordinary items...... $0.77 $0.50 $1.12 $1.06 $0.79 $(0.15) $1.01
Net income (loss).......... 0.77 0.50 1.12 1.06 0.79 (0.32) 1.01
Other Data(1)(2):
Net interest margin(3).......... 3.22% 2.98% 3.03% 2.86% 2.57% 1.86% 2.34%
Efficiency ratio(4)............. 52.34 67.37 63.88 71.85 64.79 88.30 62.60
Return on average assets(5)..... 0.52 0.38 0.41 0.45 0.34 (0.15) 0.49
Return on average equity(5)..... 7.73 5.29 5.87 7.32 5.39 (2.11) 6.79
Ratio of total equity to 6.45 6.89 6.75 5.35 6.06 6.92 6.86
total assets(6).............
Book value per share(7)......... $20.40 $19.43 $19.77 $14.38 $14.98 $14.65 $15.16
Dividend payout ratio(8)........ 26.21% 39.51% 35.57% 30.53% 38.61% (93.75)% 29.70%
Nonperforming assets(9)......... $ 15,069 $ 20,805 $ 18,020 $ 15,766 $ 24,310 $38,811 $50,577
Ratio to total assets...... 0.26% 0.36% 0.32% 0.49% 0.74% 1.29% 1.60%
Troubled debt
restructurings(10).......... $ 769 $ 805 $ 777 $ 731 $ 509 $15,641 $13,948
Ratio to total assets...... 0.01% 0.01% 0.01% 0.02% 0.02% 0.52% 0.44%
- ---------------------
<FN>
(1) Includes the acquisitions of Bay View Credit, effective June 1, 1996; Bay
View Commercial Finance Group, effective April 1, 1997; Ultra Funding,
effective October 1, 1997; and America First Eureka Holdings, Inc.,
effective January 2, 1998.
(2) You should also review our non-GAAP performance measures contained in our
historical financial information, which is incorporated into this
prospectus by reference, for further discussion of net income (loss), net
interest margin, return on average assets, and return on average equity.
(3) Defined as net interest income divided by average interest-earning assets.
(4) Calculated by dividing general and administrative expenses by operating
revenues, defined as net interest income, loan fees and charges, the excess
of leasing-related rental income over leasing-related depreciation expense,
and other noninterest income, excluding securities gains and losses.
(5) Calculated by dividing net income (loss) by average assets and average
equity, respectively. In calculating these ratios, net income for the six
months ended June 30, 1999 and June 30, 1998 has been annualized.
(6) Calculated by dividing total equity by total assets.
(7) Calculated by dividing total equity by total common shares outstanding.
(8) Calculated by dividing dividends declared by net income (loss).
(9) Defined as nonaccrual loans, real estate owned through foreclosure and
other repossessed assets. Nonaccrual loans are defined as loans 90 days or
more delinquent as to principal and interest payments (unless both are well
secured and in the process of collection) and loans less than 90 days
delinquent designated as nonperforming when we determine that the full
collection of principal and/or interest is doubtful.
(10) Defined as loans that have been modified (due to borrower financial
difficulties) to allow a stated interest rate and/or a monthly payment
lower than those prevailing in the market.
</FN>
</TABLE>
8
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Summary Consolidated Financial Data of FMAC
The following financial information is derived in part from FMAC's audited
financial statements for 1994 through 1998. The information at or for the
six-month periods ended June 30, 1999 and 1998 is unaudited and was derived from
FMAC's unaudited consolidated quarterly financial statements. However, in the
opinion of FMAC's management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation at such dates and for
such periods have been made. The results of operations for the six-month period
ended June 30, 1999 are not necessarily indicative of results that may be
expected for the full fiscal year. All information is presented in accordance
with GAAP. The information is only a summary and you should read it in
conjunction with FMAC's historical financial statements and related notes
contained in the annual reports and other information that FMAC has filed with
the SEC. This historical financial information has also been incorporated into
this prospectus by reference. We have listed the documents that we incorporate
by reference under the heading "Where You Can Find More Information."
<TABLE>
<CAPTION>
At June 30, At December 31, Predecessor
---------------------------------------------------------------------------------
1999 1998 1998 1997(1) 1996(1) 1995(1) 1994(1)
---------------------------------------------------------------------------------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Financial Condition
Data(2):
Cash and cash equivalents........... $ 21,496 $ 6,093 $ 33,425 $ 7,335 $ -- $ -- $ 102
Securities available for sale....... 14,388 2,255 16,818 22,870 39,349 -- 9,541
Loans and leases held for sale...... 352,496 591,254 325,727 343,200 98,915 181,254 --
Loans and leases held for 138,776 -- 162,928 -- -- -- --
investment.......................
Retained interest in loan
securitizations................... 28,938 22,668 29,952 21,652 6,908 -- --
Servicing rights.................... 34,132 24,682 29,905 2,213 -- -- --
Goodwill............................ 48,735 38,758 37,353 4,315 4,332 4,226 --
Accrued interest receivable......... 1,942 9,530 2,587 2,758 560 1,108 138
Other assets........................ 42,311 21,863 37,619 17,889 10,112 2,460 467
---------- -------- --------- -------- -------- -------- ---------
Total assets........................ 683,214 717,103 676,314 422,232 160,176 189,048 10,248
Overdraft .......................... -- -- -- -- 171 445 --
Payable to Imperial Credit
Industries, Inc................... -- -- -- -- 17,728 -- --
Borrowings.......................... 496,035 505,769 483,763 256,220 125,240 181,632 13,548
Deferred income taxes............... 16,402 26,714 18,045 14,160 -- -- --
Other liabilities................... 26,027 29,035 27,801 13,430 2,580 3,198 1,543
---------- -------- --------- -------- -------- -------- ---------
Total liabilities................... 538,464 561,518 529,609 283,810 145,719 185,275 15,091
Minority interest in subsidiary..... (897) 110 (8) -- -- -- --
Members' equity (deficit)........... -- -- -- -- $ 14,457 $ 3,773 $ (4,843)
Total stockholders' equity.......... $145,647 $155,475 $146,713 $138,422 -- -- --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Predecessor
Six -----------------------
Months Six Year
Ended Months Ended
Six Months Ended Year Ended December Ended December
June 30, December 31, 31, June 30, 31,
--------------------------------------------------------------------------------------------
1999 1998 1998(4) 1997(1) 1996(1) 1995(1) 1995(1) 1994(1)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Data(2):
Revenues:
Gain on sale of loans and leases(3)... $18,368 $39,238 $ 40,146 $52,117 $18,671 $ -- $ -- $4,052
Net interest income................... 6,787 8,079 17,119 5,156 1,641 239 154 37
Loan servicing income................. 11,798 5,868 18,507 3,314 1,191 349 326 306
Trading income(3)..................... 3,463 -- -- -- -- -- -- --
Insurance services income............. 1,320 -- -- -- -- -- -- --
Loss on transfer of loans to held
for investment.................... -- -- (8,845) -- -- -- -- --
Other income (loss)................... (1,520) 579 650 (111) 63 -- -- 68
-------- ------- -------- -------- ------- ------- --------- ---------
Total revenues........................ 40,216 53,764 67,577 60,476 21,566 588 480 4,463
-------- ------- -------- ------- ------- ------- --------- -------
Expenses:
Personnel............................. 16,797 13,181 26,306 13,636 8,270 356 931 1,723
General and administrative............ 24,501 11,071 27,460 11,119 3,972 891 1,460 3,468
-------- ------- -------- ------- ------- ------- -------- -------
Total expenses........................ 41,298 24,252 53,766 24,755 12,242 1,247 2,391 5,191
-------- ------- -------- ------- ------- ------- -------- -------
Income (loss) before income taxes
and minority interest in
subsidiary........................ (1,082) 29,512 13,811 35,721 9,324 (659) (1,911) (728)
Minority interest in subsidiary....... (889) 110 (8) -- -- -- -- --
Income tax expense (benefit).......... (77) 12,349 5,528 15,001 -- -- -- --
-------- ------- -------- ------- ------- ------- --------- -------
Net income (loss)..................... (116) $17,053 $ 8,291 $20,720 $ 9,324 $ (659) $(1,911) $ (728)
======== ======= ======== ======= ======= ======= ======= =======
Basic income per share................ $ 0.00 $ 0.59 $ 0.29 $ 0.91
======== ======= ======== =======
Diluted income per share.............. $ 0.00 $ 0.59 $ 0.29 $ 0.91
======== ======= ======== =======
Weighted-average basic shares
outstanding....................... 28,757 28,716 28,716 22,670
======== ======= ======== =======
Weighted-average diluted shares
outstanding....................... 28,757 28,762 28,976 22,670
======== ======= ======== =======
- ---------------
<FN>
(1) From July 1, 1995 through November 18, 1997, FMAC qualified to be treated
as a limited liability company, which is similar to a partnership, for
federal and state income tax purposes. As a result of terminating FMAC's
limited liability company status upon completion of its initial public
offering, FMAC was required to record a one-time non-cash charge of $11.0
million against historical earnings for deferred income taxes. This charge
occurred in the quarter ended December 31, 1997 and the year ended December
31, 1997. The selected balance sheet information at December 31, 1994 and
the selected results of operations for the year ended December 31, 1994 and
for the six months ended March 31, 1995 represent FMAC's predecessor
entity.
(2) Includes the acquisition of Bankers Mutual effective April 1, 1998.
(3) Gain on sale for the years ended December 31, 1998, 1997 and 1996 includes
$35.3 million, $56.2 million and $11.5 million of cash gains before hedge
gains (losses) of ($34.0) million, ($5.1) million and $0.4 million, of
which $13.4 million, $6.6 million and $7.8 million, respectively,
represented loan fees. The gain on sale of loans for the December 1995
securitization was not recognized until the first quarter of 1996. Gain on
sale for the six months ended June 30, 1999 and 1998 includes $18.4 million
and $38.2 million of cash gains before hedge losses of $2.9 million for the
six months ended June 30, 1998, of which $3.6 million and $6.7 million,
respectively, represented loan fees. Prior to December 31, 1998, FMAC
deferred its hedge gains and losses and recorded them as an addition or
reduction to the gain on sale. Effective January 1, 1999, trading income is
recorded directly through operations as FMAC's financial instruments used
to hedge its loans and leases are classified as trading.
(4) Includes $34.0 million in hedge losses incurred primarily during the third
and fourth quarters of 1998.
</FN>
</TABLE>
10
<PAGE>
Summary Unaudited Pro Forma Condensed Combined Financial Data
(In Thousands, Except Per Share Data)
The following summary unaudited pro forma condensed combined financial data has
been prepared to illustrate the effect on our historical financial condition and
results of operations of the acquisition of FMAC, which was accounted for under
the purchase method of accounting, and the issuance of $50 million in
subordinated notes by Bay View Bank in August 1999. See "-- Recent
Developments." The pro forma operating data for the year ended December 31, 1998
and for the six months ended June 30, 1999 assume that both the merger and the
issuance of the subordinated notes occurred as of January 1, 1998. The pro forma
financial condition data is as of June 30, 1999.
We incurred underwriting and other costs in connection with Bay View Bank's
issuance of the subordinated notes which were capitalized, and post-combination
integration costs as a result of the merger with FMAC which were expensed and
which are not reflected in the pro forma information. The pro forma information,
while helpful in illustrating the financial characteristics of the combined
company under one set of assumptions, is not necessarily indicative of the
results of operations which would have occurred had Bay View and FMAC
constituted a single entity since January 1, 1998, and does not attempt to
predict or suggest future results.
The information in the following table is based on the historical financial
information that is presented in our prior filings with the SEC. We have
incorporated this material into this document by reference. See "Unaudited Pro
Forma Condensed Combined Financial Data" and "Where You Can Find More
Information."
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30, 1999 December 31, 1998(1)
---------------------- --------------------------
<S> <C> <C>
Pro Forma Operating Data:
Interest income................................... $209,730 $437,277
Interest expense.................................. 126,268 279,267
-------- --------
Net interest income............................... 83,462 158,010
Provision for losses on loans and leases.......... 22,320 11,758
-------- --------
Net interest income after provision for losses.... 61,142 146,252
Noninterest income................................ 67,511 81,530
Noninterest expense............................... 113,247 193,342
-------- --------
Income before income tax expense and minority
interest in subsidiary.......................... 15,406 34,440
Minority interest in subsidiary................... (889) (8)
Income tax expense................................ 10,033 21,074
-------- --------
Net income..................................... $ 6,262 $ 13,374
======== ========
Basic earnings per share.......................... $0.19 $0.39
===== =====
Diluted earnings per share........................ $0.19 $0.39
===== =====
Weighted-average basic shares outstanding......... 32,822 33,904
======== ========
Weighted-average diluted shares outstanding....... 32,972 34,204
======== ========
- ---------------
<FN>
(1) FMAC's historical results for the year ended December 31, 1998 included
$34.0 million in hedge losses incurred primarily during the third and
fourth quarters of 1998.
</FN>
</TABLE>
11
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors before you decide to
buy our common stock. You should also consider the other information in this
prospectus, as well as the other documents incorporated by reference.
Risks Related to Bay View's Current Business Activities
As we continue to transition our business to commercial banking activities, a
gradual increase in our consolidated credit risk is likely to occur, which means
that there is a greater risk that borrowers will be unable to repay their loans
from us or make all required lease payments to us. Borrower defaults resulting
in losses in excess of our allowance for loan and lease losses could have a
material adverse effect on our business, profitability and financial condition.
Our business strategy centers around our continued transition to commercial
banking activities and the anticipated increase of our net interest margin. In
order to realize this objective, one of our main strategies is to replace
lower-yielding single-family mortgage loans and mortgage-backed securities with
consumer and commercial loans and leases with higher risk-adjusted returns,
shorter maturities and less sensitivity to interest rate fluctuations. These
assets are funded with our low cost deposit base. As this process takes place, a
gradual increase in our consolidated credit risk is likely to occur, which means
that there is a greater risk that borrowers will be unable to repay their loans
from us or make all required lease payments to us. Borrower defaults resulting
in losses in excess of our allowance for loan and lease losses could have a
material adverse effect on our business, profitability and financial condition.
Single-Family Mortgage Loans. Single-family mortgage loans still comprise the
largest component of our loan and lease portfolio and are secured primarily by
properties located in northern California. Our concentration of these loans
results in lower yields and lower profitability for us. These loans are
generally made on the basis of the borrower's ability to make repayments from
his or her employment and the value of the property securing the loan. Despite
our decision to discontinue the origination of single-family mortgage loans in
1996, our exposure to these lower-yielding, and relatively low risk assets, has
actually increased to approximately $1.2 billion, or 26.6% of our total gross
loan and lease portfolio, at June 30, 1999 from $551 million, or 22.9%, at
December 31, 1997, primarily due to the acquisition of EurekaBank.
Multi-Family Mortgage and Commercial Real Estate Loans. Multi-family mortgage
and commercial real estate loans are generally considered to be riskier than
single-family mortgage loans because multi-family mortgage and commercial real
estate loans typically have larger balances to a single borrower or group of
related borrowers. In addition, the borrower's ability to repay multi-family
mortgage and commercial real estate loans typically depends upon the successful
operation of the property or business conducted on the property securing the
loan as opposed to a desire by the borrower to continue to occupy the residence
on the property securing the loan. These loans may therefore be more adversely
affected by conditions in the real estate markets or in the economy generally.
For example, if the cash flow from the project is reduced due to leases not
being obtained or renewed, the borrower's ability to repay the loan may be
impaired. Multi-family mortgage and commercial real estate loans totaled $1.3
billion, or 29.6% of our total gross loan and lease portfolio, at June 30, 1999,
including $450 million in multi-family loans which were subsequently sold in
July 1999. These loans represent our second largest loan concentration and are
also primarily secured by properties located in northern California.
Motor Vehicle Loans and Leases. Because our primary focus for motor vehicle
loans and leases is on the credit quality of the customer rather than the value
of the collateral, the collectibility of a motor vehicle loan or lease is more
likely than a single-family first mortgage loan to be affected by adverse
personal circumstances. We rely on the borrower's continuing financial
stability, rather than on the value of the vehicle, for the repayment of a motor
vehicle loan and for payment of all required amounts under a motor vehicle
lease. Because motor vehicles usually rapidly depreciate in value, it is
unlikely that a repossessed vehicle will cover repayment of the outstanding loan
balance or unpaid amounts under the terms of the lease.
In one particular niche that we operate, the typical motor vehicle loan customer
desires a longer term and/or higher relative loan amount than is offered by many
automobile financing sources. We have therefore been able to charge interest
rates of 200 to 300 basis points over the rates typically offered by traditional
sources of motor vehicle
12
<PAGE>
financing such as banks and captive finance companies. The higher interest rate
and longer maturity of the loans increases the risk that the borrower will be
unable to repay the loan.
We retain a residual interest in our motor vehicle-related operating leased
assets. The estimated fair market value of the motor vehicle at the end of the
contract term of the lease, if any, is reflected as an asset on our balance
sheet over the contract term of the lease. At June 30, 1999, the residual values
related to our motor vehicle-related operating leases totaled $206.8 million.
Our profitability depends, to some degree, upon our ability to realize these
residual values. Realization of residual values depends on many factors, several
of which are outside our control, including general market conditions at the
time of expiration of the lease, whether there has been unusual wear and tear
on, or use of, the motor vehicle and the cost of a comparable new motor vehicle.
If, upon the expiration of a lease, we sell or refinance the underlying motor
vehicle and the amount realized is less than the recorded value of the residual
interest in the motor vehicle, we will recognize a loss reflecting the
difference. If we fail to realize our aggregate recorded residual values, our
financial condition and profitability could be adversely affected.
At June 30, 1999, motor vehicle loans totaled $638.8 million, which was
approximately 14.4% of our total gross loan and lease portfolio. Additionally,
operating leased assets totaled $338.8 million at June 30, 1999.
Home Equity Loans. High loan-to-value home equity loans are subject to increased
risk of delinquency and default as compared to single-family first mortgage
loans. High loan-to-value home equity loans, which totaled $465.5 million as of
June 30, 1999, are secured by a lien, generally junior in priority to a senior
lien on the borrower's home. High loan-to-value home equity loans may have, when
added to existing senior lien balances, a post-funding combined loan-to-value
ratio of up to 125% of the value of the home securing the loan. If a borrower
defaults on a high loan-to-value home equity loan, our security interest will be
subordinate to all senior lien balances. It is therefore likely that in the case
of default, the collateral for the loan will not be sufficient to cover the
principal amount of the loan. In addition, the market value of the properties
securing these loans may decline, especially in an economic slowdown or
recession. We do not intend to increase our exposure to high loan-to-value home
equity loans.
Our home equity loans, including high loan-to-value home equity loans, totaled
approximately $619.1 million, or 13.9% of our total gross loan and lease
portfolio, as of June 30, 1999. At June 30, 1999, the average loan-to-value
ratio of our high loan-to-value home equity loan portfolio was 115%. Because of
this loan-to-value ratio, we rely principally on the creditworthiness of the
borrower for repayment of our high loan-to-value home equity loans and receive
interest on these loans at a rate which is higher than the interest rate we
receive on single-family first mortgage loans.
Commercial Loans and Leases. Our commercial loans and leases, which are
comprised primarily of asset-based loans, factoring and equipment leases, entail
higher risk and are typically made on the value of the collateral provided by
the borrower to secure the loan or lease. Most often, this collateral is
accounts receivable, although at times we also rely upon collateral such as
inventory or machinery. There is little additional credit support provided by
the borrower for most of these loans and leases and the probability of repayment
is based almost solely on the liquidation of the pledged collateral. As a
result, in the case of loans and leases secured by accounts receivable, the
availability of funds for the repayment of such loans and leases may be
substantially dependent on the ability of the borrower to collect amounts due
from its customers. The collateral securing other loans and leases may
depreciate over time, may be difficult to appraise and may fluctuate in value
based on the success of the business. In addition, these loans and leases carry
much higher rates of interest than those charged by traditional small business
lenders, such as commercial banks, to compensate for the greater risk that our
borrowers will be unable to repay their loans or leases. The higher interest
rates charged on these loans and leases increase the risk that the borrower will
be unable to repay the loan or lease. Commercial loans and leases were $178.9
million, including $54.1 million in asset-based commercial participation loans,
or 4.0% of our total gross loan and lease portfolio, as of June 30, 1999.
Franchise Loans to Small and Medium-Sized Businesses. Loans to small and
medium-sized businesses are generally riskier than single-family mortgage loans.
Typically, the success of a small or medium-sized business depends on the
management talents and efforts of one or two persons or a small group of
persons, and the death, disability or resignation of one or more of these
persons could have a material adverse impact on the business. In addition, small
and medium-sized businesses frequently have smaller market shares than their
competition, may be more vulnerable to economic downturns, often need
substantial additional capital to expand or compete and may
13
<PAGE>
experience substantial variations in operating results, any of which may impair
a borrower's ability to repay a loan or make payments on a lease. We purchased
from FMAC approximately $514.7 million of loans to small and medium-sized
businesses, primarily franchise operations, during the first six months of 1999.
Franchise loans were $487.1 million, or 10.9% of our total gross loan and lease
portfolio, at June 30, 1999. We anticipate that ultimately franchise loans and
leases may comprise up to 30% of our total consolidated assets.
Unfavorable or worsened economic conditions or natural disasters in northern
California could significantly increase the number of borrowers unable to timely
repay their loans, and could result in a decline in the value of the properties
securing our loans, which could have a material adverse effect on us.
Our current loan portfolio is concentrated in certain geographic regions,
particularly northern California. The number of borrowers unable to repay their
loans may be affected by changes in local economic and business conditions.
Unfavorable or worsened economic conditions in northern California could
significantly increase the number of borrowers unable to timely repay their
loans, and could result in a decline in the value of the properties securing
those loans, which could have a material adverse effect on us. In addition, the
northern California area has been, and may in the future be, subject to
earthquakes and we usually do not require our borrowers to maintain earthquake
insurance on properties securing mortgage loans. Accordingly, earthquake damage
to properties securing mortgage loans or to properties we own could have a
material adverse effect on us.
Changes in interest rates could have a material adverse effect on our
profitability.
Our ability to make a profit, like that of most financial institutions,
substantially depends upon our net interest income, which is the difference
between the interest income we earn on our interest-earning assets, such as
loans, and the interest expense we pay on our interest-bearing liabilities, such
as deposits. Certain assets and liabilities, however, may react in different
degrees to changes in market interest rates. Further, interest rates on some
types of assets and liabilities may fluctuate prior to changes in broader market
interest rates, while rates on other types may lag behind. Additionally, some of
our assets, such as adjustable rate mortgages, have features, including payment
and rate caps, which restrict changes in their interest rates. As a result, our
net interest margin would be adversely impacted by a rise in interest rates
where actual rates on adjustable rate loans do not rise as rapidly as the cost
of our funds.
Factors such as inflation, recession, unemployment, money supply, international
disorders, instability in domestic and foreign financial markets, and other
factors beyond our control may affect interest rates. Changes in market interest
rates will also affect the level of voluntary prepayments on our loans and
payments on our mortgage-backed securities resulting in the receipt of proceeds
that may be reinvested at a lower rate than the loan or mortgage-backed security
being prepaid. Although we pursue an asset-liability management strategy
designed to control our risk from changes in market interest rates, changes in
interest rates could still have a material adverse effect on our profitability.
The competition we face could adversely affect our profitability.
We face competition both in originating loans and leases and in attracting
deposits. The competition we face could adversely affect our profitability.
Competition in originating multi-family and commercial real estate mortgage
loans comes primarily from savings institutions, commercial banks, mortgage
bankers and insurance companies. We compete for these mortgage loans based on
interest rates, types of products, loan fees charged and the quality of customer
service that we provide to our borrowers. Competition in attracting deposits
comes primarily from savings institutions, commercial banks, brokerage firms,
mutual funds, credit unions and various types of investment companies. We also
experience competition for our motor vehicle loan and leasing programs,
primarily from large well-capitalized lending institutions and finance
companies, as well as from financing provided directly by automobile
manufacturers. Competition for factoring clients comes primarily from small
local factors or factors specializing in a specific industry segment, such as
trucking or personnel agencies. Competition for asset-based loans comes
primarily from small, locally-based commercial finance companies, large national
commercial finance companies and commercial banks. Competition for franchise
loans comes primarily from commercial banks, thrift institutions, diversified
finance companies, asset-based lenders, speciality franchise finance companies
and real estate investment trusts, among others. Due to their size, some of our
competitors may achieve economies of scale and, as a result, offer a broader
range of products and services and lower pricing than we currently offer.
14
<PAGE>
Changes in the regulatory structure or the statutes or regulations applicable to
us could have a material impact on our operations.
We and our subsidiaries are subject to extensive regulation, supervision and
examination by the Federal Reserve Board and the Office of the Comptroller of
the Currency and by the Federal Deposit Insurance Corporation, which insures our
deposits up to applicable limits. Regulatory authorities have extensive
discretion in carrying out their supervisory and enforcement responsibilities,
and regulations have been implemented which have increased capital requirements,
increased insurance premiums and resulted in increased administrative,
professional and compensation expenses.
Any change in the regulatory structure or the applicable statutes or regulations
could have a material impact on our operations. Additional legislation and
regulations may be enacted or adopted in the future which could significantly
affect our powers, authority and operations, and our competitors which in turn
could have a material adverse effect on our operations.
Any computer problems due to the Year 2000 issue could adversely affect our
business.
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. As a result, any of our
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000 which, in turn, could result in
system failures or miscalculations causing disruptions in our operations and the
operations of our suppliers and customers. Any computer problems due to the Year
2000 issue could adversely affect our business.
The potential impact of the Year 2000 issue on the financial services industry
could be material, as virtually every aspect of the industry and processing of
transactions will be affected. Due to the size of the task facing the financial
services industry and the interdependent nature of its transactions, we may be
adversely affected by this problem, depending on whether we and the entities
with which we do business address the issue successfully. The impact of the Year
2000 issue on us will depend not only on corrective actions that we take, but
also on the way in which the Year 2000 issue is addressed by governmental
agencies, businesses and other third parties that provide services or data to
us, or receive services or data from us, or whose financial condition or
operational capability is important to us.
We rely upon third-party software vendors and data processing service providers
for the majority of our electronic data processing and do not operate any
proprietary programs which are critical to our operations. Thus, our focus is to
monitor the progress of our primary software and data processing service
providers toward resolving the Year 2000 issue.
Failure to correct a material Year 2000 problem could result in an interruption
in, or a failure of, certain normal business activities or operations. Such
failures could materially and adversely affect our results of operations,
liquidity and financial condition. Due to the general uncertainty of the Year
2000 readiness of third-party suppliers and customers, we are unable to
determine at this time whether the consequences of Year 2000 failures will have
a material impact on our results of operations, liquidity and financial
condition. Our Year 2000 compliance program will reduce levels of uncertainty
about the Year 2000 issue including questions as to the compliance and readiness
of our material third-party providers. We believe that, with the implementation
of new and/or upgraded business systems and completion of the Year 2000
compliance program, the possibility of significant interruptions of normal
operations has been significantly reduced. For additional information regarding
our Year 2000 compliance program, see "Where You Can Find More Information."
15
<PAGE>
Risks Related to the Acquisition of FMAC
We may experience greater than expected difficulties in operating FMAC's
businesses.
Our recent acquisition of FMAC involves the combination of two companies that
have previously operated independently. We expect to realize increased revenues,
together with other financial and operating benefits from the merger, but there
can be no assurances as to when, or the extent to which, we will be able to
realize these benefits. We may experience greater than expected difficulties in
operating FMAC's businesses, which could have an adverse effect on our ability
to realize the expected benefits of the acquisition.
There are many things that could go wrong and adversely affect our business and
profitability after the acquisition. We cannot predict the full range of
post-acquisition problems that may occur. Some possible difficulties include:
o diversion of management's attention;
o the failure to retain key personnel of FMAC;
o the failure to satisfactorily assimilate the business culture of FMAC;
o increased competition in FMAC's businesses, including competition from
competitors with more financial resources than we have; and
o risks associated with unanticipated events or liabilities.
We may not be permitted to own some assets or operate some businesses owned by
FMAC for regulatory reasons. We may have to sell the assets or businesses on
unfavorable terms or modify business operations in a way that will make them
less profitable.
In connection with its approval of the FMAC acquisition, the Federal Reserve
Board has required us, within the two years following the FMAC acquisition, to
divest or conform to regulatory requirements FMAC's businesses and activities
that are impermissible for us to engage in for regulatory purposes. The affected
FMAC assets include equity interests in restaurant franchises. We cannot be sure
that we will be able to sell these assets on favorable terms. In addition, in
order to continue to engage in the insurance agency business we are required to
modify FMAC's insurance agency operations, and these modifications could make
those operations less profitable to us.
The Bankers Mutual division of FMAC participates in the Fannie Mae delegated
underwriting and servicing program. Because of Bankers Mutual's current loss
sharing arrangement with Fannie Mae, under federal banking regulations we will
be required to hold capital against all loans sold under the program as if we
owned 100% of these loans. We cannot be sure that we will successfully limit our
potential liability under the Fannie Mae program or otherwise limit the
additional capital requirements to which we would be subject. If we determine,
for regulatory purposes or otherwise, that it is in our best interests to sell
the Fannie Mae servicing portfolio, we cannot be sure that we will be able to do
so on favorable terms.
FMAC is dependent on securitizations. Any impairment of FMAC's ability to
complete securitizations could have a material adverse effect on our business.
FMAC has historically pooled and sold through securitization substantially all
of the franchise loans which it originates, as well as many other loans. Upon
consummation of the acquisition of FMAC, we retained a portion of FMAC's
commercial franchise loans for our portfolio, and we intend to sell or
securitize the remainder. Under FMAC's securitization structure, FMAC sells a
pool of loans on a non-recourse basis to a single purpose trust, which then
issues to investors securities collateralized by the loans. While FMAC's
dependency on securitizations has been reduced now that FMAC is operating as one
of our subsidiaries, any impairment in FMAC's ability to complete
securitizations could have a material adverse effect on our business. Factors
affecting FMAC's ability to complete securitizations of its loans include:
o conditions in the securities markets generally;
16
<PAGE>
o conditions in the asset-backed securities markets specifically;
o the performance of the securities issued in connection with FMAC's
securitizations;
o the credit quality of FMAC's loans;
o compliance of FMAC's loans with the eligibility requirements for a
particular securitization;
o FMAC's ability to adequately service its loans; and
o any material negative rating agency action pertaining to certificates
issued in FMAC's securitizations.
The "gain on sale" from the sale of loans in securitizations has historically
been the largest component of FMAC's revenues, and retained interests in loan
securitizations are typically established as balance sheet assets in connection
with securitizations, based in part upon estimates of future credit losses. FMAC
has also retained subordinated securities issued in connection with its
securitization program. We are currently attempting to sell these securities. If
actual credit losses on securitized loans exceed the estimates made at the time
of the securitizations, we could be required to record an expense to reduce the
carrying value of the retained interests and securities classified as
available-for-sale, if any, on our balance sheet. Any expense of this type could
be material to our earnings if the credit performance of securitized loans
deteriorates significantly. At June 30, 1999, the retained interests in loan
securitizations held by FMAC totaled $28.9 million and securities classified as
available-for-sale totaled $14.4 million.
In addition, the securitization market for FMAC's loans and leases is relatively
undeveloped and may be more susceptible to market fluctuations or other adverse
changes than more developed capital markets. To the extent FMAC makes loans and
leases in new industry sectors or to different types of entities in existing
industry sectors, there is a risk that these loans and leases will not be
securitizable or will be securitizable only on terms unfavorable to FMAC.
We are currently considering a late 1999 or early 2000 whole loan sale or
securitization of approximately $400-500 million in franchise and branded retail
loans.
FMAC advances funds in connection with its securitization activities. If FMAC is
unable to recover a significant amount of these advances, it could have a
material adverse effect on our business, profitability and growth prospects.
In connection with its securitization activity, FMAC serviced approximately $3.0
billion in commercial franchise loans as of June 30, 1999. As the servicer, FMAC
periodically advances funds, and is sometimes required to advance funds in
accordance with its servicing agreements, to the trustees of the securitizations
or directly to other parties, including the underlying franchisees/borrowers.
The advances may be the result of cash flow shortfalls attributable to
delinquent loan payments or the result of other factors. While FMAC is entitled
in accordance with its servicing agreements to recover some of these advances
prior to distributing payments to security holders, to the extent FMAC does not
recover its advances, there could be a material adverse effect on our business,
profitability and growth prospects. Under some circumstances, these advances are
also recovered under work-out arrangements which may include loan modifications,
sale of the underlying franchise, concessions from the franchisor, or
restructuring of the securitization. In most instances, the work-out
arrangements are developed with the cooperation of the franchisor. At June 30,
1999, FMAC had outstanding advances of approximately $13.1 million related to
its securitizations.
FMAC recently completed a loan restructuring in connection with $5 million in
funds it had previously advanced, as of June 30, 1999, on behalf of an operator
that owns 130 Pizza Hut restaurants which secure loans included in a
securitization pool. These loans were not originated by FMAC and the current
operator was recruited by FMAC to replace the original borrower. The loan
restructuring was necessary to enable the operator to continue to service these
loans. The loan restructuring resulted in the loan originator and holders of
securities from this securitization pool which were formerly affiliated with
Imperial Credit Industries, Inc., the parent of selling stockholder FMAX
Holdings, LLC, incurring losses as a result of a $13.0 million reduction in the
operator's loan balance. FMAC's
17
<PAGE>
equity interest in the securitization had previously been written off and no
additional write offs were necessary. As part of the loan restructuring, FMAC
pledged an additional $4.0 million to the trust holding this loan in support of
the ratings on the other securities issued from this securitization pool. We
cannot assure you that FMAC will not incur any additional losses in connection
with this loan. Before completion of the loan restructuring, a rating agency,
Fitch IBCA, placed all classes of notes issued under the securitization that
includes these loans on Rating Alert Negative. Fitch noted that its action was
prompted by the negative performance of the loans that were not originated by
FMAC, does not impact any other securitizations of FMAC and was in no way
associated with FMAC in its function as servicer and/or special servicer under
the securitization. Following the restructuring, Fitch downgraded the class D
notes under the securitization from "B" to "CCC," and the class E notes from
"CCC" to "CC."
Risks Related to an Investment in the Common Stock
The price of our common stock may decrease rapidly and prevent stockholders from
selling their stock at a profit.
The market price of our common stock could decrease in price rapidly at any time
and prevent stockholders from selling their shares at a profit. The market price
of our common stock has fluctuated in recent years. Since January 1, 1998, the
market price has ranged from a low of $12.50 per share to a high of $38.00 per
share. Fluctuations may occur, among other reasons, in response to:
o operating results;
o announcements by competitors;
o regulatory changes;
o economic changes;
o general market conditions; and
o legislative changes.
The trading price of our common stock could continue to be subject to wide
fluctuations in response to the factors set forth above and other factors, many
of which are beyond our control. The stock market in recent years has
experienced extreme price and trading volume fluctuations that often have been
unrelated or disproportionate to the operating performance of individual
companies. You should consider the likelihood of these market fluctuations
before investing in our stock.
The sale of a substantial amount of our common stock after the FMAC merger could
adversely affect the market price of our common stock.
Of the 13.9 million shares of our common stock that FMAC stockholders received
in the merger, most may be sold immediately and without restriction. The sale of
a substantial amount of our common stock after the merger could adversely affect
the market price of our stock. It could also impair our ability to raise money
through the sale of more stock or other forms of capital. In addition, the sale
of authorized but unissued shares of our common stock after the merger could
adversely affect its market price. There will be approximately 32.6 million
shares of our common stock outstanding after the merger, excluding shares
issuable upon the exercise of outstanding options. Our certificate of
incorporation authorizes the issuance of up to 60 million shares of our common
stock.
18
<PAGE>
FORWARD-LOOKING INFORMATION
This prospectus and some of the documents incorporated by reference into this
prospectus contain forward-looking statements which describe our future plans,
strategies and expectations. All forward-looking statements are based on
assumptions and involve risks and uncertainties, many of which are beyond our
control and which may cause our actual results, performance or achievements to
differ materially from the results, performance or achievements that we
anticipate. Factors that might affect forward-looking statements include, among
other things:
o the demand for our products;
o actions taken by our competitors;
o tax rate changes, new tax laws and revised tax law interpretations;
o adverse changes occurring in the securities markets;
o inflation and changes in prevailing interest rates that reduce our
margins or the fair value of the financial instruments we hold;
o economic or business conditions, either nationally or in our market
areas, that are worse than we expect;
o legislative or regulatory changes that adversely affect our business;
o our inability to identify suitable future acquisition candidates;
o the timing, impact and other uncertainties of future acquisitions and
our success or failure in the integration of the operations of
acquired companies;
o the ability to enter into new geographic and product markets
successfully and capitalize on available growth opportunities;
o technological changes, including the year 2000 issue, that are more
difficult or expensive than we expect;
o increases in delinquencies and defaults by our borrowers;
o increases in our provision for losses on loans and leases;
o increased costs or other difficulties relating to our acquisition of
FMAC;
o inability to sustain or improve the performance of our subsidiaries;
o inability to achieve the financial goals in our strategic plans,
including any financial goals related to both contemplated and
consummated acquisitions;
o the outcome of lawsuits or regulatory disputes;
o credit and other risks of lending, leasing and investment activities;
and
o inability to use the net operating loss carryforwards.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares being
offered by the selling stockholder. We estimate that the net proceeds to be
received by us in the event the underwriters' over-allotment option is exercised
in full will be $ million. We intend to use any such net proceeds for general
corporate purposes. We may also use the net proceeds to acquire complementary
businesses.
19
<PAGE>
MARKET PRICES AND DIVIDENDS
Our common stock is traded on the New York Stock Exchange under the symbol
"BVC." Prior to April 1, 1999, our common stock traded on the Nasdaq National
Market under the symbol "BVCC." The following table sets forth, for the periods
indicated, the high and low sale prices of our common stock.
Price Range
--------------------------
High Low
1997
First Quarter.................................... $28.63 $20.63
Second Quarter................................... 26.75 22.63
Third Quarter.................................... 28.13 24.88
Fourth Quarter................................... 36.25 27.69
1998
First Quarter.................................... 37.25 29.38
Second Quarter................................... 38.00 29.50
Third Quarter.................................... 31.75 17.00
Fourth Quarter................................... 21.69 12.50
1999
First Quarter.................................... 21.06 17.44
Second Quarter................................... 20.50 16.25
Third Quarter.................................... 20.56 12.50
Fourth Quarter (through ____________, 1999)...... _____ ____
On ____________, 1999, the last reported sale price per share of our common
stock on the New York Stock Exchange was $_____. As of _________, 1999, there
were _____ holders of record of our common stock.
We expect to declare regularly scheduled dividends consistent with our recent
historical practices. The declaration of any dividends and the amount of any
dividends, however, will depend on a number of factors, including our financial
condition, regulatory capital requirements, funds from operations, future
business prospects and such other factors as our board of directors may deem
relevant. We are a holding company and our ability to pay cash dividends is
dependent on our ability to receive cash dividends, advances and other payments
from our subsidiaries.
The indenture relating to our outstanding subordinated notes places limits on
our ability to make "restricted payments," such as payment of cash dividends,
repurchases of common stock or the redemption of other securities for cash. The
indenture originally did not permit us to make restricted payments unless, among
other things, we were "well-capitalized" for bank holding company regulatory
purposes and unless the Bank was "well-capitalized" under federal banking laws
and regulations. On October 30, 1998, we entered into a first supplemental
indenture with the trustee under the indenture, revising the "well-capitalized"
standard to "adequately-capitalized" for the holding company only. We entered
into the first supplemental indenture with the trustee after receipt and review
by the trustee's counsel of the opinion of Silver, Freedman & Taff, L.L.P. that
the amendment of the restricted payments covenant was permitted without
subordinated noteholder consent because it was not adverse in any material
respect to the interests of the subordinated noteholders. Silver Freedman also
opined that no continuing default as a result of our having repurchased stock
during October 1998 existed under the indenture, as amended.
If the subordinated noteholders were to challenge successfully our actions and
the actions of the trustee in revising our capital standard for restricted
payments, common stock dividends or other restricted payments made at a time
when we were not well-capitalized would be a breach of the indenture. In any
such circumstance, we could seek the necessary permission from the subordinated
noteholders to resume payment of common stock dividends. If the permission of
the subordinated noteholders was not obtained, a court could enjoin the payment
of dividends on the common stock.
20
<PAGE>
CAPITALIZATION
The following table sets forth our consolidated capitalization and our
regulatory capital ratios as of June 30, 1999:
o without adjustment;
o as adjusted to give effect to Bay View Bank's sale of the subordinated
notes and the distribution of the net proceeds from Bay View Bank to us
in the form of a permanent reduction in capital; and
o as also adjusted for the acquisition of FMAC on a pro forma basis as if
the acquisition had occurred as of June 30, 1999.
This information should be read in conjunction with the historical financial
statements and related notes of Bay View and FMAC incorporated into this
prospectus by reference. We have assumed that the underwriters' over-allotment
option is not exercised.
At June 30, 1999
------------------------
As Adjusted
for
the Notes
Offering
and the
Without Acquisition
Adjustment of FMAC
----------- -------------
(In Thousands)
Deposits............................................ $3,346,875 $3,346,875
========== ==========
Borrowings:
Advances from FHLB of San Francisco................ 1,900,400 1,585,400
Securities sold under agreements to repurchase..... 51,205 51,205
Subordinated notes................................. 99,469 149,469
Other borrowings................................... 4,190 500,225
----------- ----------
Total borrowings................................ $2,055,264 $2,286,299
========== ==========
Guaranteed Preferred Beneficial Interests in
Bay View's Junior Subordinated Debentures......... $ 90,000 $ 90,000
=========== ==========
Stockholders' Equity:
Common stock ($.01 par value)...................... 204 343
Additional paid-in capital......................... 251,321 484,990
Retained earnings (substantially restricted)....... 166,539 166,539
Treasury stock, at cost............................ (33,538) (33,538)
Unrealized loss on securities available-for-sale,
net of tax....................................... (213) (213)
Debt of Employee Stock Ownership Plan.............. (3,259) (3,259)
----------- ----------
Total stockholders' equity......................... $ 381,054 $ 614,862
=========== ==========
Our Regulatory Capital Ratios:
Tier 1 Leverage.................................... 5.76% 6.47%
Tier 1 risk-based.................................. 7.37 7.20
Total risk-based(1)................................ 10.82 11.04
- -----------------------
(1) The subordinated notes are structured to qualify as Tier 2 capital, which
is included in the calculation of total risk-based capital ratio.
21
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined financial data is based on
the historical financial statements of Bay View and FMAC and has been prepared
to illustrate the effect of the merger with FMAC and the August 1999 issuance of
$50 million in subordinated notes by Bay View Bank.
The unaudited pro forma condensed combined statement of financial condition is
as of June 30, 1999. The unaudited pro forma condensed combined statements of
income for the year ended December 31, 1998 and for the six-month period ended
June 30, 1999 assume that both the merger and the issuance of the subordinated
notes occurred as of January 1, 1998.
The unaudited pro forma condensed combined financial data should be read in
conjunction with the historical financial statements and accompanying
disclosures contained in our second quarter 1999 Form 10-Q and 1998 Form 10-K/A
and FMAC's second quarter 1999 Form 10-Q and 1998 Form 10-K/A, which are
incorporated into this prospectus by reference.
The merger was accounted for under the purchase method of accounting. Under the
purchase method of accounting, assets acquired and liabilities assumed are
recorded at their estimated fair values. Goodwill is generated to the extent
that the merger consideration, including certain acquisition and closing costs,
exceeds the fair value of net assets acquired. Based on the information
currently available, the merger initially generated approximately $177 million
in goodwill, excluding the $22.5 million remaining potential obligation under
the "earn-out" agreement entered into between FMAC and Bankers Mutual in
connection with FMAC's 1998 acquisition of Bankers Mutual. We estimate that this
goodwill will be amortized on a straight-line basis over 15 years.
The actual goodwill arising from the merger was based on the merger
consideration, including certain acquisition and closing costs, and fair values
of assets and liabilities on the date the merger was consummated. No assurance
can be given that the final goodwill amount arising from the merger or the
goodwill amortization period will not be more or less than the amount or period
currently contemplated in the unaudited pro forma condensed combined financial
data.
We incurred underwriting and other costs in connection with issuing the
subordinated notes which were capitalized, and post-combination integration
expenses as a result of combining with FMAC which were expensed and which were
not reflected in the unaudited pro forma condensed combined financial data.
The unaudited pro forma condensed combined financial data is based on a number
of assumptions, estimates and uncertainties including, but not limited to,
estimates of the fair values of assets acquired and liabilities assumed, the
number of FMAC common shares outstanding immediately prior to the merger
consummation and estimated acquisition and closing costs. The unaudited pro
forma condensed combined financial data assumes the issuance of approximately
13.9 million of our common shares to effect the merger.
As a result of these assumptions, estimates and uncertainties, the accompanying
unaudited pro forma condensed combined financial data does not purport to
describe the actual financial condition or results of operations that would have
been achieved had the merger and the issuance of subordinated notes in fact
occurred on the dates indicated, nor does it purport to predict our future
financial condition or results of operations.
22
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF FINANCIAL CONDITION
JUNE 30, 1999
(In Thousands)
Pro Forma Adjustments Pro Forma
Bay View FMAC Debit Credit Total Bay View
---------------------------------------------------------------------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents....................... 89,392 $ 21,496 $ 50,000 $ 53,260 $ (3,260) (1) $ 107,628
Securities available-for-sale:
Investment securities......................... 4,828 14,388 135,000 135,000 (2) 154,216
Mortgage-backed securities.................... 11,766 -- -- 11,766
Securities held-to-maturity:
Investment securities......................... -- -- -- --
Mortgage-backed securities.................... 602,379 -- -- 602,379
Loans and leases held-for-sale.................. 514,394 352,496 450,000 (450,000) (2) 416,890
Loans and leases held-for-investment, net of
allowance for losses.......................... 3,959,193 138,776 4,097,969
Investment in operating leased assets, net...... 338,845 -- -- 338,845
Investment in stock of the FHLB of San
Francisco..................................... 95,770 -- -- 95,770
Investment in stock of the Federal Reserve
Bank.......................................... 13,110 -- -- 13,110
Real estate owned, net.......................... 1,548 -- -- 1,548
Premises and equipment, net..................... 22,906 6,632 -- 29,538
Intangible assets............................... 128,572 48,735 177,253 48,735 128,518 (3) 305,825
Other assets.................................... 120,625 100,691 22,000 22,000 (4) 243,316
---------- --------- --------- -----------
Total assets.................................... $5,903,328 $683,214 $(167,742) $6,418,800
========== ======== ========= ==========
Liabilities and Stockholders' Equity:
Liabilities
Deposits...................................... 3,346,875 -- -- 3,346,875
Advances from the FHLB of San
Francisco................................... 1,900,400 -- 315,000 (315,000) (2) 1,585,400
Securities sold under agreements to
repurchase.................................. 51,205 -- 51,205
Subordinated notes, net....................... 99,469 -- 50,000 50,000 (5) 149,469
Senior debentures............................. -- -- -- --
Other borrowings.............................. 4,190 496,035 -- 500,225
Other liabilities............................. 30,135 42,429 9,097 9,097 (6) 81,661
---------- --------- --------- -----------
Total liabilities............................... 5,432,274 538,464 (255,903) 5,714,835
Capital securities.............................. 90,000 -- -- 90,000
Minority interest in subsidiary................. -- (897) -- (897)
Stockholders' equity............................ 381,054 145,647 145,647 233,808 88,161 (7) 614,862
---------- --------- --------- -----------
Total liabilities and stockholders' equity...... $5,903,328 $683,214 $(167,742) $6,418,800
========== ======== ========= ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial data.
23
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1998
(In Thousands, Except Per Share Amounts)
Pro Forma Adjustments
---------------------------------- Pro Forma
Bay View FMAC Debit Credit Total Bay View
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income..................................... $406,363 $55,439 $31,950 $7,425 $(24,525) (8) $437,277
Interest expense.................................... 251,762 38,320 5,250 16,065 (10,815) (9) 279,267
--------- -------- -------- ---------
Net interest income................................. 154,601 17,119 (13,710) 158,010
Provision for losses on loans and leases............ 9,114 2,644 --- 11,758
--------- -------- -------- ---------
Net interest income after provision for losses...... 145,487 14,475 (13,710) 146,252
Noninterest income.................................. 31,072 50,458 --- 81,530
Noninterest expense:
General and administrative expenses............... 113,567 48,900 --- 162,467
Other noninterest expense......................... 7,686 --- --- 7,686
Amortization of intangible assets................. 11,372 2,222 11,817 2,222 9,595 (10) 23,189
--------- -------- -------- ----------
Total noninterest expense........................... 132,625 51,122 9,595 193,342
--------- -------- -------- ---------
Income before income tax expense and minority
interest in subsidiary.............................. 43,934 13,811 (23,305) 34,440
Minority interest in subsidiary..................... --- (8) --- (8)
Income tax expense.................................. 21,215 5,528 5,669 (5,669) (11) 21,074
--------- -------- -------- ----------
Net income.......................................... $ 22,719 $ 8,291 $(17,636) (12) $ 13,374
========= ======== ======== =========
Basic earnings per share ........................... $1.13 $0.29 (12) $0.39
===== ===== =====
Diluted earnings per share.......................... $1.12 $0.29 (12) $0.39
===== ===== =====
Weighted-average basic shares outstanding........... 20,035 28,716 33,904
========= ======== ==========
Weighted-average diluted shares outstanding......... 20,335 28,976 34,204
========= ======== ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial data.
24
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1999
(In Thousands, Except Per Share Amounts)
Pro Forma Adjustments
------------------------------ Pro Forma
Bay View FMAC Debit Credit Total Bay View
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income..................................... $202,737 $19,255 $15,975 $3,713 $(12,262) (8) $209,730
Interest expense.................................... 119,208 12,468 2,625 8,033 (5,408) (9) 126,268
--------- -------- --------- ---------
Net interest income................................. 83,529 6,787 (6,854) 83,462
Provision for losses on loans and leases............ 12,111 10,209 -- 22,320
--------- -------- --------- ---------
Net interest income after provision for losses...... 71,418 (3,422) (6,854) 61,142
Noninterest income.................................. 34,082 33,429 -- 67,511
Noninterest expense:
General and administrative expenses............... 52,035 29,452 -- 81,487
Other noninterest expense......................... 20,065 -- -- 20,065
Amortization of intangible assets................. 5,787 1,637 5,908 1,637 4,271 (10) 11,695
--------- -------- --------- ---------
Total noninterest expense....................... 77,887 31,089 4,271 113,247
--------- -------- --------- ---------
Income before income tax expense and
minority interest in subsidiary................... 27,613 (1,082) (11,125) 15,406
Minority interest in subsidiary..................... -- (889) -- (889)
Income tax expense (benefit)........................ 12,944 (77) 2,834 (2,834) (11) 10,033
--------- -------- --------- ---------
Net income (loss)................................... $ 14,669 $ (116) $ (8,291) (12) $ 6,262
========= ======== ========= =========
Basic earnings per share ........................... $ 0.77 $ 0.00 (12) $ 0.19
========= ======== =========
Diluted earnings per share.......................... $ 0.77 $ 0.00 (12) $ 0.19
========= ======== =========
Weighted-average basic shares outstanding........... 18,953 28,757 32,822
========= ======== =========
Weighted-average diluted shares outstanding......... 19,103 28,757 32,972
========= ======== =========
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial data.
25
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL DATA
1. Pro forma adjustments reflect the $50 million in cash proceeds generated
from the issuance of subordinated notes by Bay View Bank and the cash
portion of the merger consideration of approximately $53 million. The $53
million adjustment also includes payments for certain acquisition and other
closing costs.
2. Pro forma adjustment reflects the July 1999 sale of a portion of Bay View
Bank's loan portfolio in connection with the restructuring of Bay View
Bank's balance sheet in contemplation of the FMAC acquisition. This sale
reduced the level of risk-weighted assets and generated additional excess
regulatory capital at Bay View Bank that was upstreamed to Bay View (See
also Note 5). A portion of the $450 million in proceeds was used to pay
down Federal Home Loan Bank advances and the remainder was invested in
short-term investments.
3. Pro forma adjustment reflects the excess of the merger consideration,
including certain acquisition and closing costs, over the estimated fair
value of net assets acquired (i.e., goodwill), which was initially
estimated at approximately $177 million, excluding the $22.5 million
remaining potential obligation under the "earn-out" agreement entered into
between FMAC and Bankers Mutual in connection with FMAC's 1998 acquisition
of Bankers Mutual, net of FMAC's pre-acquisition goodwill eliminated as of
June 30, 1999.
4. Pro forma adjustment reflects the $22 million estimated fair value of
non-mortgage servicing assets relating to FMAC's $2.2 billion franchise
loan servicing portfolio, excluding FMAC loans purchased by Bay View Bank.
5. Pro forma adjustments reflect the issuance of $50 million in subordinated
notes by Bay View Bank. The proceeds from the subordinated notes issuance,
along with currently available excess capital at Bay View Bank, were
upstreamed to us in the form of a permanent reduction in capital to fund
both a portion of the FMAC acquisition price and for general corporate
purposes. After the acquisition, we contributed substantially all of the
assets and liabilities of FMAC to subsidiaries of Bay View Bank.
6. Pro forma adjustment reflects the deferred taxes relating to the purchase
accounting adjustments.
7. Pro forma adjustment reflects the issuance of our common stock to the
stockholders of FMAC, net of FMAC's pre-acquisition stockholders' equity
eliminated as of June 30, 1999.
8. Pro forma adjustment reflects the reduction in interest income from the
sale of a portion of Bay View Bank's loan portfolio, partially offset by
the interest income generated from the reinvestment of a portion of the
proceeds in short-term investments.
9. Pro forma adjustment reflects the reduction in interest expense from the
pay down of Federal Home Loan Bank advances partially offset by the
interest and other costs associated with the issuance of $50 million in
subordinated notes by Bay View Bank (all-in cost of approximately 10.5%).
10. Pro forma adjustment reflects the amortization associated with the $177
million in goodwill estimated to be generated from the merger, excluding
the $22.5 million remaining potential obligation under the "earn-out"
agreement entered into between FMAC and Bankers Mutual in connection with
FMAC's 1998 acquisition of Bankers Mutual, net of the amortization
associated with FMAC's pre-acquisition goodwill written off as of June 30,
1999. The goodwill is assumed to be amortized on a straight-line basis over
15 years.
11. Pro forma adjustment reflects the income tax benefit associated with the
pro forma adjustments.
12. The pro forma net income and earnings per share amounts reflected herein do
not purport to be indicative of the actual results that would have been
achieved had the merger and the issuance of subordinated notes in fact
occurred on the dates indicated, nor do they purport to be indicative of
future results of operations. We incurred post-combination integration
costs as a result of the merger with FMAC which were not reflected in the
pro forma information. FMAC's historical results for the year ended
December 31, 1998 included $34.0 million in hedge losses incurred primarily
during the third and fourth quarters of 1998.
26
<PAGE>
MANAGEMENT
The following table sets forth information regarding our directors and principal
executive officers. Approximately one-third of our directors are elected
annually. Directors are elected to serve for a three-year period or until their
respective successors have been elected and qualified. All executive officers
serve at the discretion of the board of directors. Except where noted, positions
listed are those held with Bay View Capital Corporation.
<TABLE>
<CAPTION>
Director
or
Officer
Name Age(1) Positions Held With Bay View Since(2)
- --------------------------------------------- --------------------------------------------- -------------
<S> <C> <C> <C>
John R. McKean 69 Chairman of the Board 1984
Paula R. Collins 49 Director 1993
Thomas M. Foster 57 Director 1993
Robert M. Greber 61 Director 1996
Wayne L. Knyal 52 Director 1999
George H. Krauss 57 Director 1998
Stephen T. McLin 52 Director 1998
Edward H. Sondker 51 Director, President and Chief Executive 1995
Officer
W. Blake Winchell 46 Director 1996
Richard E. Arnold 58 Executive Vice President and Director 1997
of Sales and Banking Administration
James A. Badame, Jr. 56 President, Bay View Acceptance 1998
Corporation
John N. Buckley 41 Executive Vice President and 1994
Chief Credit Administrator
Kevin T. Burke 41 Treasurer 1999
Matthew L. Carpenter 39 President and Chief Executive Officer, 1997
Bay View Commercial Finance Group
Robert J. Flax 50 Executive Vice President, General 1985
Counsel and Secretary
David A. Heaberlin 49 Executive Vice President and Chief 1995
Financial Officer
Scott H. Ray 34 Senior Vice President and Controller 1998
Ronald L. Reed 52 Executive Vice President, Director of 1997
MIS and Loan Servicing
Douglas J. Wallis 48 Executive Vice President, General 1999
Counsel and Secretary, Bay View Bank
Carolyn Williams-Goldman 37 Executive Vice President and 1996
Director of Administration
- --------------------------
<FN>
(1) As of June 30, 1999.
(2) Includes service with Bay View Bank.
</FN>
</TABLE>
27
<PAGE>
The business experience of each of the directors and executive officers is as
follows:
John R. McKean. Mr. McKean has served as Chairman of the Board of Bay View
Capital Corporation and Bay View Bank since January 1994. Mr. McKean is the
President of John R. McKean & Co. (CPAs), San Francisco, California.
Paula R. Collins. Ms. Collins is Chief Executive Officer 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.
Thomas M. Foster. 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.
Robert M. Greber. Mr. Greber is Chairman of the Board and Chief Executive
Officer of the Pacific Exchange. Mr. Greber is also a director of Sonic
Solutions, Inc., Novato, California.
Wayne L. Knyal. Mr. Knyal is President and Chief Executive Officer of Bay View
Franchise Mortgage Acceptance Company, which became a subsidiary of Bay View
Bank following our acquisition of FMAC. Mr. Knyal was President, Chief Executive
Officer, a director and founder of FMAC. Prior to founding FMAC's predecessor in
1991, Mr. Knyal founded and owned CBI Insurance Services, Inc. and concurrently
served as President of CBI Mortgage Company, a residential mortgage banker. From
1968 to 1980, Mr. Knyal was an Executive Vice President of Krupp/Taylor
Advertising and served clients in the fast food industry. Mr. Knyal is a
Director of New Riders, Inc., a restaurant company.
George H. Krauss. Mr. Krauss is an attorney and serves as of counsel to Kutak
Rock, a national law firm headquartered in Omaha, Nebraska. Mr. Krauss has
practiced law with Kutak Rock since 1972 and served as managing partner of the
firm from 1983 to 1993. In 1996, Mr. Krauss became an independent business
consultant to America First Companies. Mr. Krauss also serves as a director of
Gateway 2000, Inc., a computer manufacturing firm, and of America First Mortgage
Investments, Inc.
Stephen T. McLin. Mr. McLin has been President and Chief Executive Officer of
America First Financial Corporation, San Francisco, California, since 1987.
America First offers merger and acquisition advice to the financial services
industry. Prior to joining America First, Mr. McLin was Executive Vice President
of BankAmerica Corporation and Bank of America NT&SA. Mr. McLin also serves as a
director of Charles Schwab & Co., Inc.
Edward H. Sondker. Mr. Sondker has served as President and Chief Executive
Officer of Bay View Capital Corporation and Chief Executive Officer of Bay View
Bank since August 1995. Mr. Sondker became Chairman of the Board of Bay View
Bank in July 1999. Prior to becoming Chairman, Mr. Sondker also served as
President of Bay View Bank since August 1995. Prior to joining Bay View, 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., San Clemente, California.
W. Blake Winchell. Mr. Winchell is Managing Director of Fremont Ventures, LLC, a
venture investment group. In 1996, Mr. Winchell served as Chief Executive
Officer of Kleer-Vu Industries and prior thereto he was a General Partner of the
Channel Investment Group.
Richard E. Arnold. Mr. Arnold, Executive Vice President, has served as Director
of Sales and Banking Administration since 1997. Prior to joining Bay View, he
served as an Executive Vice President of First Interstate Bank and was
responsible for all branch banking activities in northern California. Prior to
joining First Interstate Bank in 1990, he held executive and management
positions at Security Pacific Bank in a career that spanned over 30 years.
28
<PAGE>
James A. Badame, Jr. Mr. Badame has served as President of Bay View Acceptance
Corporation since 1998. Prior to joining Bay View Acceptance Corporation, he
served as Director of Operations for Triad Financial Corporation. He has over 25
years of experience in the indirect automobile financing business during which
time he has held management and executive positions with Bank of America and
Marine Midland Banks. Mr. Badame has also held sales, business and general
management positions in the retail automobile industry.
John N. Buckley. Mr. Buckley, Executive Vice President, has served as Chief
Credit Administrator since 1995 and Manager of Credit Administration and Asset
Management since 1994. He joined us in September 1993. Previously, he served at
Bank of America in various capacities from 1985 to 1993. His last position was
Vice President and Regional Credit Administrator for the Real Estate Industries
Division at Bank of America.
Kevin T. Burke. Mr. Burke became our Treasurer following our acquisition of
FMAC. Mr. Burke served as Executive Vice President, Capital Markets, of FMAC
from March 1997 until our acquisition of FMAC. Mr. Burke served as a consultant
for Koll Real Estate from November 1996 to February 1997. Mr. Burke was a
Managing Director at McNeil Capital from July 1996 to November 1996 and the
Director of Treasury Operations at ICN Pharmaceuticals, Inc. from July 1995 to
June 1996. From September 1994 to June 1995, Mr. Burke was a Vice President at
Merrill Lynch. From August 1993 to September 1994, Mr. Burke was a Senior Vice
President at O'Connor & Company, an investment banking firm.
Matthew L. Carpenter. Mr. Carpenter has served as President and Chief Executive
Officer of Bay View Commercial Finance Group since January 1999. Prior to
becoming President and Chief Executive Officer, Mr. Carpenter served as Chief
Operating Officer of Bay View Commercial Finance Group from the time of its
acquisition by Bay View on March 17, 1997. Prior to the acquisition, Mr.
Carpenter served as Chief Financial Officer of Concord Growth Corporation, the
predecessor of Bay View Commercial Finance Group, from 1991 until March 17,
1997, and as President of EXXE Data Corporation, the holding company of Concord
Growth Corporation, from 1993 until March 17, 1997.
Robert J. Flax. Mr. Flax, Executive Vice President, has served us in various
capacities since joining us in 1980, including as Bay View Bank's General
Counsel from 1985 to 1999 and as General Counsel and Corporate Secretary of Bay
View Capital Corporation since its formation in 1989. Before joining us, he was
a trial attorney in private practice in San Francisco from 1976 to 1980.
David A. Heaberlin. Mr. Heaberlin, Executive Vice President, has served as Chief
Financial Officer of Bay View Capital Corporation since 1995 and as Chief
Operating Officer of Bay View Bank since 1997. Mr. Heaberlin became President of
Bay View Bank in July 1999. Prior to joining Bay View, he served as Senior Vice
President and Chief Financial Officer for First California/Mortgage Service
America. During 1993 and 1994, he was Executive Vice President and Treasurer of
ITT Residential Capital Corporation. Prior to his service with ITT, he was a
financial executive for various entities including Bowery Bank, Exchange
National Bank of Chicago, Financial Corporation of Santa Barbara, and Numerica
Financial. He has over 20 years experience in commercial banking, savings banks
and the financial services industry. Mr. Heaberlin is a Certified Public
Accountant.
Scott H. Ray. Mr. Ray, Senior Vice President, has served as Controller of Bay
View Capital Corporation and as Chief Financial Officer of Bay View Bank since
1998. Previously, he served as Executive Vice President and Chief Financial
Officer for Silicon Valley Bancshares. Mr. Ray is a Certified Public Accountant
and has 14 years of professional experience in both public accounting and
private industry, including 12 years affiliated with the financial services
industry.
Ronald L. Reed. Mr. Reed, Executive Vice President, has served as Director of
Management Information Systems and Loan Servicing of Bay View Capital
Corporation and Bay View Bank since 1997. Previously, he served as Chief
Information Officer for Weyerhaeuser and WMC Mortgage Corporation. He has over
30 years of corporate management, information technology and servicing
experience, including senior management positions with Technology Management
Corporation, American Savings Bank and Home Savings of America/HF Ahmanson.
Douglas J. Wallis. Mr. Wallis, Executive Vice President, joined us in 1999 as
General Counsel and Corporate Secretary of Bay View Bank. Previously, he served
as a director of Hawthorne Financial Corporation. From 1985
29
<PAGE>
through 1997, Mr. Wallis held various executive positions at California Federal
Bank, FSB, his last position being Executive Vice President, General Counsel and
Corporate Secretary. He is a member of the State Bars of California and
Missouri.
Carolyn Williams-Goldman. Ms. Williams-Goldman, Executive Vice President, has
served as Director of Administration of Bay View Capital Corporation and Bay
View Bank since 1998 and Director of Human Resources of Bay View Capital
Corporation and Bay View Bank since 1995. She joined us as Associate Counsel in
1994. Previously, she served as Vice President and Counsel at First Nationwide
Bank in San Francisco. Prior to her service with First Nationwide Bank, she was
an Associate in the Business Law and Banking Practice Groups of Winthrop,
Stimson, Putnam & Roberts. She is a member of the State Bars of California and
New York.
SELLING STOCKHOLDER
The table below sets forth certain information about the selling stockholder,
FMAX Holdings, LLC, and its beneficial ownership of shares of our common stock.
Except as specified below, neither the selling stockholder nor any of its
affiliates hold any positions or offices, or had any other material
relationships with us, or any of our predecessors or affiliates, during the past
three years.
Shares
Beneficially Owned Shares
Prior to the Beneficially
Offering Owned
----------------------- Shares to be After the
Number Percentage Sold the Offering
---------- ------------ ------------- ---------------
FMAX Holdings, LLC 5,008,463 15.26% 5,008,463 None
23350 Hawthorne Boulevard
Building 1, Suite 240
Torrance, California 90505
All of the shares that may be sold by the selling stockholder pursuant to this
offering were issued by us in connection with our acquisition of FMAC. FMAX
Holdings is a subsidiary of Imperial Credit Industries, Inc.
The shares are being registered by us pursuant to an election and registration
agreement with the selling stockholder. Under the terms of that agreement, we
have agreed to pay the fees and expenses incurred in connection with the
registration, except that we will not pay any underwriting discount and fees and
disbursements of third parties incurred directly by the selling stockholder
attributable to the sale of its shares.
30
<PAGE>
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement dated
the date of this prospectus, which is filed as an exhibit to the registration
statement relating to this prospectus, the underwriters of the offering named
below have severally agreed to purchase, and the selling stockholder has agreed
to sell to the underwriters, the number of shares of common stock set forth
opposite the name of each underwriter.
Underwriters Number of Shares of
Common Stock
Lehman Brothers Inc........................................
Dain Rauscher Wessels, a division of
Dain Rauscher Incorporated................................
PaineWebber Incorporated...................................
U.S. Bancorp Piper Jaffray Inc.............................
Total...................................................... 5,008,463
31
<PAGE>
The underwriting agreement provides that the obligations of the several
underwriters to purchase shares of common stock depend on the satisfaction of
the conditions contained in the underwriting agreement, and that if any of the
shares of common stock are purchased by the underwriters under the underwriting
agreement, then all of the shares of common stock which the underwriters have
agreed to purchase pursuant to the underwriting agreement must be purchased. The
conditions contained in the underwriting agreement include the requirement that
the representations and warranties made by us and the selling stockholder to the
underwriters are true, that there is no material change in the financial markets
and that we and the selling stockholder deliver to the underwriters customary
closing documents.
The underwriters have advised us that they propose to offer the shares of common
stock directly to the public at the public offering price set forth on the cover
page of this prospectus, and to dealers, who may include the underwriters, at
such public offering price less a selling concession not in excess of $0. per
share. The underwriters may allow, and the dealers may reallow, a concession not
in excess of $0. per share to brokers and dealers. After the offering, the
underwriters may change the offering price and other selling terms.
We have granted to the underwriters an option to purchase up to an aggregate of
751,270 additional shares of common stock, exercisable solely to cover
over-allotments, if any, at the public offering price less the underwriting
discounts and commissions shown on the cover page of this prospectus. The
underwriters may exercise this option at any time until 30 days after the date
of the underwriting agreement. If this option is exercised, each underwriter
will be committed, so long as the conditions of the underwriting agreement are
satisfied, to purchase a number of additional shares of common stock
proportionate to the underwriter's initial commitment as indicated in the
preceding table, and we will be obligated, under the over-allotment option, to
sell the shares of common stock to the underwriters.
No Exercise Full Exercise
Per Share........................... $ $
Total............................... $ $
The selling stockholder will pay all underwriting discounts and commissions if
the underwriters' option is not exercised. We will pay all underwriting
discounts and commissions related to any shares of common stock purchased under
the underwriters' option.
We estimate that our share of the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $________. We
estimate that the selling stockholder's share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $_________.
We and our directors, executive officers, and certain stockholders, holding an
aggregate of ____ million shares of common stock have agreed not to offer to
sell, sell or otherwise dispose of, directly or indirectly, any shares of common
stock during the 90-day period following the date of the prospectus without the
prior written consent of Lehman Brothers, except that we may issue, and grant
options to purchase, shares of common stock under our option plans.
32
<PAGE>
The common stock is listed on the New York Stock Exchange under the symbol
"BVC."
We and the selling stockholder have agreed to indemnify the underwriters against
liabilities related to the offering, including liabilities under the Securities
Act and liabilities arising from breaches of the representations and warranties
contained in the underwriting agreement, and to contribute to payments that the
underwriters may be required to make for these liabilities.
Until the distribution of the common stock is completed, rules of the SEC may
limit the ability of the underwriters and certain selling group members to bid
for and purchase shares of common stock. As an exception to these rules, the
underwriters are permitted to engage in transactions that stabilize the price of
common stock. These transactions may consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the common stock.
The underwriters may create a short position in the common stock in connection
with the offering, which means that they may sell more shares than are set forth
on the cover page of this prospectus. If the underwriters create a short
position, they may reduce that short position by purchasing common stock in the
open market. The underwriters also may elect to reduce any short position by
exercising all or part of the over-allotment option.
The underwriters also may impose a penalty bid on underwriters and selling group
members. This means that if the underwriters purchase shares of common stock in
the open market to reduce the underwriters' short position or to stabilize the
price of the common stock, they may reclaim the amount of the selling concession
from the underwriters and selling group members who sold those shares as part of
the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of those purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
an offering.
Neither we, the selling stockholder nor any of the underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the common stock. In
addition, neither we, the selling stockholder nor any of the underwriters makes
any representation that the underwriters will engage in such transactions or
that such transactions, once commenced, will not be discontinued without notice.
Any offers in Canada will be made only pursuant to an exemption from the
requirements to file a prospectus in the relevant province of Canada in which a
sale is made.
Purchasers of the shares of common stock offered in this prospectus may be
required to pay stamp taxes and other charges under the laws and practices of
the country of purchase, in addition to the offering price listed on the cover
of this prospectus.
Certain of the underwriters and their affiliates have from time to time
provided, may currently be providing and may in the future provide, investment
banking, financial advisory and other services to us for which such underwriters
receive customary fees and commissions.
LEGAL MATTERS
Certain legal matters, including the legality of the shares of common stock
being offered hereby, will be passed upon for Bay View by Silver, Freedman &
Taff, L.L.P., Washington, D.C. Certain legal matters related to this offering
will be passed upon for the underwriters by Gibson, Dunn & Crutcher LLP, San
Francisco, California.
EXPERTS
The consolidated financial statements of Bay View as of December 31, 1998, and
for the year then ended, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
33
<PAGE>
The consolidated financial statements of Bay View as of December 31, 1997, and
for the years ended December 31, 1997 and 1996, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report dated January 26,
1998, which is incorporated by reference herein, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The consolidated financial statements of FMAC as of December 31, 1998 and 1997,
and for each of the years in the three-year period ended December 31, 1998, have
been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file, and before its acquisition by us FMAC filed, annual, quarterly and
special reports, proxy statements and other information with the SEC. The SEC
filings are available to the public over the Internet at the SEC's web site at
http//www.sec.gov. You may also read and copy any document filed with the SEC at
its public reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549; 7 World Trade Center, Suite 1300, New York, New York 10048; and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You
can also obtain copies of the documents at prescribed rates by writing to the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference facilities.
We "incorporate by reference" into this prospectus the information we file and
FMAC filed with the SEC, which means that we can disclose important information
to you by referring you to those documents. The information incorporated by
reference is an important part of this prospectus and information that we file
subsequently with the SEC will automatically update this prospectus. We
incorporate by reference the documents listed below and any filings we make with
the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
of 1934 after initial filing of the registration statement that contains this
prospectus and prior to the time that we sell all the securities offered by this
prospectus.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 to register the shares of common stock discussed in this
document. As permitted by the rules and regulations of the SEC, this prospectus
does not contain all the information set forth in the registration statement and
the exhibits thereto. Such additional information may be inspected and copied as
set forth above.
All of the documents filed with the SEC by Bay View (File No. 001-14879) and
FMAC (File No. 000-23283) pursuant to the Securities Exchange Act of 1934 since
the end of its fiscal year ended December 31, 1998 through the termination of
this offering are incorporated by reference in this document. These documents
include the following:
o Bay View's Annual Report on Form 10-K for the year ended December 31,
1998, as amended on Form 10-K/A filed with the SEC on July 13, 1999.
o Bay View's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999, as amended on Form 10-Q/A filed with the SEC on July 13,
1999.
o Bay View's Quarterly Report on Form 10-Q for the quarter ended June
30, 1999.
o Bay View's Current Reports on Form 8-K filed March 12, March 19, 1999,
July 22, 1999 and August 27, 1999.
o FMAC's Annual Report on Form 10-K for the year ended December 31,
1998, as amended on Form 10-K/A filed with the SEC on April 22, 1999.
o FMAC's Quarterly Report on Form 10-Q for the quarter ended March 31,
1999.
o FMAC's Quarterly Report on Form 10-Q for the quarter ended June 30,
1999.
34
<PAGE>
o FMAC's Current Reports on Form 8-K filed March 12, 1999 and August 27,
1999.
This document also incorporates by reference the description of our common stock
and the associated rights under our stockholder protection rights agreement set
forth under "Description of Capital Stock-Common Stock," "Section 203 of the
Delaware Law" and "Certain Provisions of the Amended and Restated Certificate of
Incorporation and Bylaws" contained in our prospectus dated October 19, 1998,
filed pursuant to Rule 424(b) of the Securities Act together with a prospectus
supplement on December 16, 1998, and incorporated in our registration statement
on Form 8-A dated March 3, 1999.
You may request a copy of these filings (other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing)
at no cost, by writing to or telephoning us at the following address:
Bay View Capital Corporation
1840 Gateway Drive
San Mateo, California 94404
Attention: Robert J. Flax
(650) 312-7200
35
<PAGE>
5,008,463 Shares
[GRAPHIC OMITTED]
Common Stock
PROSPECTUS
_______, 1999
LEHMAN BROTHERS
DAIN RAUSCHER WESSELS
a division of Dain Rauscher Incorporated
PAINEWEBBER INCORPORATED
U.S. BANCORP PIPER JAFFRAY
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses in connection with
the sale and distribution of the securities being registered hereby, other than
underwriting discounts and commissions. All amounts are estimates except the SEC
registration fee.
Amount to be Paid
--------------------
SEC Registration fee........................................... $ 22,770
Blue sky fees and expenses..................................... 5,000
Printing expenses.............................................. 100,000
Postage and distribution....................................... 50,000
Legal fees and expenses........................................ 195,000
Accounting fees and expenses................................... 95,000
Transfer agent and registrar fees.............................. 5,500
Miscellaneous.................................................. 50,000
---------
TOTAL................................................. $523,270
========
Bay View will bear all of the foregoing fees and expenses.
Item 15. Indemnification of Directors and Officers
Section 9 of Bay View's Restated Certificate of Incorporation provides for
indemnification of any director or officer of Bay View against any and all
expense, liability and loss (including attorneys' fees, judgments, fines and
amounts paid in settlement) reasonably incurred or suffered by him or her in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, to the fullest extent
authorized by Delaware law, subject to certain limitations set forth in the
Restated Certificate of Incorporation. Section 9 also authorizes Bay View to
purchase insurance on behalf of directors and officers against liabilities
incurred in their capacities as such.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation's board of directors to grant indemnity under certain
circumstances to directors and officers, when made, or threatened to be made,
parties to certain proceedings by reason of such status with the corporation,
against judgments, fines, settlements and expenses, including attorneys' fees.
In addition, under certain circumstances such persons may be indemnified against
expenses actually and reasonably incurred in defense of a proceeding by or on
behalf of the corporation. Similarly, the corporation, under certain
circumstances, is authorized to indemnify directors and officers of other
corporations or enterprises who are serving as such at the request of the
corporation, when such persons are made, or threatened to be made, parties to
certain proceedings by reason of such status, against judgments, fines,
settlements and expenses, including attorneys' fees; and under certain
circumstances, such persons may be indemnified against expenses actually and
reasonably incurred in connection with the defense or settlement of a proceeding
by or in the name of such other corporation or enterprise.
Indemnification is permitted where such person acted in good faith, and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his or her conduct
was unlawful.
Unless ordered by a court, indemnification may be made only following a
determination that such indemnification is permissible because the person being
<PAGE>
indemnified has met the requisite standard of conduct. Such determination may be
made (i) by the corporation's board of directors by a majority vote of directors
not at the time parties to such proceeding, even if less than a quorum; or (ii)
by a committee of such directors designated by majority vote of such directors,
even if less than a quorum; or (iii) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion; or (iv)
by the stockholders.
Section 145 also permits expenses incurred by directors and officers in
defending a proceeding to be paid by the corporation in advance of the final
disposition of such proceedings upon the receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that he
or she is not entitled to be indemnified by the corporation against such
expenses.
Under a directors' and officers' liability insurance policy, directors and
officers of Bay View are insured against certain liabilities, including certain
liabilities under the Securities Act of 1933.
Item 16. Exhibits
The exhibits listed on the accompanying Index to Exhibits are filed as part
of this Registration Statement.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that the undertakings
set forth in paragraph (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby understands that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 (and where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
<PAGE>
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Mateo, State of California, on October 14, 1999.
BAY VIEW CAPITAL CORPORATION
By:* /s/ Edward H. Sondker
---------------------------------------
Edward H. Sondker
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
* /s/ Edward H. Sondker Date: October 14, 1999
- -------------------------------------------- -------------------
Edward H. Sondker
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: October 14, 1999
* David A. Heaberlin
David A. Heaberlin
Executive Vice President and Chief Financial
Officer
(Principal Financial Officer)
* /s/ Scott H. Ray Date: October 14, 1999
- -------------------------------------------- -------------------
Scott H. Ray
Senior Vice President and Controller
(Principal Accounting Officer)
Date:
John R. McKean, Director
Date:
Stephen T. McLin, Director
* /s/ W. Blake Winchell Date: October 14, 1999
- -------------------------------------------- -------------------
W. Blake Winchell, Director
<PAGE>
* /s/ Robert M. Greber Date: October 14, 1999
- -------------------------------------------- -------------------
Robert M. Greber, Director
* /s/ Paula R. Collins Date: October 14, 1999
- -------------------------------------------- -------------------
Paula R. Collins, Director
Date:
Thomas M. Foster, Director
* /s/ George H. Krauss Date: October 14, 1999
- -------------------------------------------- -------------------
George H. Krauss, Director
By * /s/ Robert J. Flax
Robert J. Flax
Attorney-in-fact
Robert J. Flax, by signing his name hereto, does sign this document on behalf of
the persons noted above, pursuant to a power of attorney duly executed by such
persons and previously filed.
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed in connection with the Registration
Statement of Bay View Capital Corporation (the "Company") on Form S-3, pursuant
to the requirements of Item 601 of Regulation S-K:
Exhibit
Number Description
------ ------------
1 Form of Underwriting Agreement*
4.1 Restated Certificate of Incorporation of the Company, together with
Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to the Company's Registration Statement on
Form S-3 filed on June 20, 1997 (No. 333-29757))
4.2 By-Laws of the Company
4.3 Stockholder Protection Rights Agreement (the "Rights Agreement") dated
as of July 31, 1990 between the Company and ChaseMellon Shareholder
Services, L.L.C., as successor rights agent (incorporated by reference
to the Company's Registration Statement on Form 8 filed on March 9,
1993 (Amendment No. 2 to the Company's Registration Statement on Form
8-A filed on August 6, 1990 (File No. 0-17901)))
4.4 First Amendment to the Rights Agreement dated February 26, 1993
(incorporated by reference to the Company's Registration Statement on
Form 8 filed on March 9, 1993 (Amendment No. 2 to the Company's
Registration Statement on Form 8-A filed on August 6, 1990 (File No.
0-17901)))
4.5 Second Amendment to the Rights Agreement dated October 10, 1997
(incorporated by reference to the Company's Registration Statement on
Form 8-A12G/A filed on October 15, 1997 (Amendment No. 3 to the
Company's Registration Statement on Form 8-A filed on August 6, 1990
(File No. 0-17901)))
4.6 Third Amendment to the Rights Agreement (incorporated by reference to
the Company's Registration Statement on Form 8-A12G/A filed on
September 29, 1998 (Amendment No. 4 to the Company's Registration
Statement on Form 8-A filed on August 6, 1990 (File No. 0-17901)))
4.7 Form of Rights Certificate and Election to Exercise pursuant to Rights
Agreement (incorporated by reference to the Company's Registration
Statement on Form 8 filed on March 9, 1993 (Amendment No. 2 to the
Company's Registration Statement on Form 8-A filed on August 6, 1990
(File No. 0-17901)))
4.8 Specimen form of common stock certificate of the Company
5 Opinion of Silver, Freedman & Taff, L.L.P.
23.1 Consent of KPMG LLP with respect to the Company
23.2 Consent of KPMG LLP with respect to Franchise Mortgage Acceptance
Company
23.3 Consent of Deloitte & Touche LLP
23.4 Consent of Silver, Freedman & Taff, L.L.P. (included in Exhibit 5)
24 Power of attorney (included on signature page)**
- ------------------
* To be filed by amendment.
** Previously filed
EXHIBIT 4.2
June, 1999
BYLAWS
OF
BAY VIEW CAPITAL CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office.
The registered office of the Corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices.
The Corporation may also have offices at such other places both within and
without the State of Delaware as the board of directors may from time to time
determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings.
Meetings of the stockholders for the election of directors or for any other
purpose shall be held at such time and place, either within or without the State
of Delaware, as shall be designated from time to time by the board of directors
and stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual Meetings.
The annual meetings of stockholders shall be held on such date and at such
time as shall be designated from time to time by the board of directors and
stated in the notice of the meeting, at which meetings the stockholders shall
elect by a plurality vote a board of directors and transact such other business
as may properly be brought before the meeting. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
fifty days before the date of the meeting. The notice shall also set forth the
purpose or purposes for which the meeting is called.
Section 3. Special Meetings.
Unless otherwise prescribed by law or by the Certificate of Incorporation,
special meetings of stockholders, for any purpose or purposes, may be called by
either the chairman of the board or the president and shall be called by either
individual at the written request of a majority of the directors then in office.
Such request shall state the purpose or purposes of the proposed meeting.
Written notice of a special meeting stating the place, date and hour of the
meeting and the purpose or purposes for which the meeting is called shall be
given not less than ten nor more than fifty days before the date of the meeting
to each stockholder entitled to vote at such meeting.
<PAGE>
Section 4. Quorum.
Except as otherwise provided by law or by the Certificate of Incorporation,
the holders of a majority of the capital stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business. If, however, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder entitled to vote at the meeting.
Section 5. Voting.
Except as otherwise required by law, the Certificate of Incorporation or
these bylaws, any question brought before any meeting of stockholders shall be
decided by the vote of the holders of a majority of the stock duly voted on the
question. Each stockholder represented at a meeting of stockholders shall be
entitled to cast one vote for each share of the capital stock entitled to vote
thereat held by such stockholder. Such votes may be cast in person or by proxy.
The board of directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his discretion, may require that any
votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote.
The officer of the Corporation who has charge of the stock ledger of the
Corporation shall prepare and make, at least twenty days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
twenty days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder of the
Corporation who is present.
Section 7. Stock Ledger.
The stock ledger of the Corporation shall be the only evidence as to who
are the stockholders entitled to examine the stock ledger, the list required by
Section 6 of this Article II or the books of the Corporation or to vote in
person or by proxy at any meeting of stockholders.
Section 8. Proxies.
At all meetings of stockholders, a stockholder may vote by proxy executed
in writing (or as otherwise permitted under applicable law) by the stockholder
or his duly authorized attorney-in-fact. Proxies solicited on behalf of the
management shall be voted as directed by the stockholder or, in the absence of
such direction, as determined by a majority of the board of directors. No proxy
shall be valid after eleven months from the date of its execution except for a
proxy coupled with an interest.
Section 9. Voting of Shares in the Name of Two or More Persons.
When ownership stands in the name of two or more persons, in the absence of
written direction to the Corporation to the contrary, at any meeting of the
stockholders of the Corporation any one or more of such stockholders may cast,
in person or by proxy, all votes to which such ownership is entitled. In the
event an attempt is made to cast conflicting votes, in person or by proxy, by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such stock and present in person or by proxy at such meeting, but
no votes shall be cast for such stock if a majority cannot agree.
<PAGE>
Section 10. Voting of Shares by Certain Holders.
Shares standing in the name of another corporation may be voted by any
officer, agent or proxy as the bylaws of such corporation may prescribe, or in
the absence of such provision, as the board of directors of such corporation may
determine. Shares held by an administrator, executor, guardian or conservator
may be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name. Shares
standing in the name of a receiver may be voted by such receiver, and shares
held by or under the control of a receiver may be voted by such receiver without
the transfer into his name if authority so to do is contained in an appropriate
order of the court or other public authority by which such receiver was
appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Corporation, nor
shares held by another corporation, if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
Corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
Section 11. Inspectors of Election.
In advance of any meeting of stockholders, the board of directors shall
appoint one or more persons as inspectors of election, to act in accordance with
applicable law at such meeting or any adjournment thereof.
Section 12. Conduct of Meetings.
Annual and special meetings shall be conducted in accordance with the most
current edition of Robert's Rules of Order unless otherwise prescribed by law or
these bylaws. However, the presiding officer may conduct such meetings in a
manner other than as set forth in the most current edition of Robert's Rules of
Order whenever, in general or in a particular matter or matters, and in his or
her sole discretion, the interests of the Corporation would be served thereby.
The board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
Section 13. New Business.
At any annual meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting (i) pursuant to the
Corporation's notice of the meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any stockholder of the Corporation who is a stockholder of
record at the time of the giving of the notice provided for in this Section 13,
who shall be entitled to vote with respect thereto at such meeting and who
complies with the notice procedures set forth in this Section 13.
For business to be properly brought before an annual meeting by a
stockholder pursuant to clause (iii) of the preceding sentence of this Section
13, the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered or mailed to and received at the principal executive offices of the
Corporation not less than 60 nor more than 90 days prior to the date of the
annual meeting; provided, however, that in the event that less than 70 days
notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the tenth day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. A stockholder's notice to the Secretary shall set forth as to each
matter such stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the Corporation's books, of the stockholder
proposing such business, and the name and address of the beneficial owner, if
any, on whose behalf the proposal is made, (iii) the class and number of shares
of the Corporation's capital stock that are owned beneficially and of record, in
each case both as of the date of such notice to the Secretary and as of the
record date for the meeting (if such record date shall have been made publicly
available and such notice is given after such record date), by the stockholder
<PAGE>
proposing such business and by the beneficial owner, if any, on whose behalf the
proposal is made, and (iv) any direct or indirect material interest of the
stockholder proposing such business and of the beneficial owner, if any, on
whose behalf the proposal is made (and of any "affiliate", as such term is used
in Regulation 14A under the Securities Exchange Act of 1934, as amended, of the
stockholder proposing such business and of the beneficial owner, if any, on
whose behalf the proposal is made) in such business.
Notwithstanding anything in these bylaws to the contrary, no business shall
be brought before or conducted at an annual meeting except in accordance with
the provisions of this Section 13. The officer of the Corporation or other
person presiding over the annual meeting shall, if the facts so warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 13 and, if
he or she should so determine, he or she shall so declare to the meeting and any
such business so determined to be not properly brought before the meeting shall
not be conducted. Notwithstanding any of the provisions of this Section 13, a
stockholder shall also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, with
respect to the matters set forth in this Section 13.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors.
The number of directors shall be eight. Directors need not be residents of
the State of Delaware. Each director shall at all times be the beneficial owner
of not less than 100 shares of capital stock of the Corporation. The directors,
other than the first board of directors, shall be elected at annual meetings of
the stockholders. Changes in the number of directors, within the limits, if any,
specified in the Certificate of Incorporation, may be accomplished through
amendment of these bylaws.
Section 2. Vacancies.
The board of directors shall divide the directors into three classes and,
when the number of directors is changed, shall determine the class or classes to
which the increased or decreased number of directors shall be apportioned;
provided, that each class shall be equal or nearly equal in size as possible;
provided, further, that no decreases in the number of directors shall affect the
term of any director then in office, except the initial directors. The term of
office of directors elected at the initial annual meeting of stockholders shall
be as follows: the term of office of directors of the first class shall expire
at the first annual meeting of stockholders after their election; the term of
office of directors of the second class shall expire at the second annual
meeting of stockholders after their election; and the term of office of
directors of the third class shall expire at the third annual meeting of
stockholders after their election; and, as to directors of each class, when
their respective successors are elected and qualified. At each annual meeting of
stockholders subsequent to the initial annual meeting of stockholders, directors
elected to succeed those whose terms are expiring shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders and when
their respective successors are elected and qualified.
Vacancies in the board of directors, however caused, shall be filled by a
majority vote of the directors then in office, whether or not a quorum, and any
director so chosen shall hold office for a term expiring at the annual meeting
of stockholders at which the term of the class to which he has been chosen
expires and when his successor is elected and qualified.
Section 3. Duties and Powers.
The business of the Corporation shall be managed by or under the direction
of the board of directors, which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these bylaws directed or required to be
exercised or done by the stockholders. The board of directors shall annually
elect a chairman of the board and a president from among its members and shall
designate, when present, either the chairman of the board or the president to
preside at its meetings.
<PAGE>
Section 4. Meetings.
The board of directors of the Corporation may hold meetings, both regular
and special, either within or without the State of Delaware. The annual regular
meeting of the board of directors shall be held without notice, other than this
bylaw provision, immediately after, and at the same place as, the annual meeting
of stockholders. Additional regular meetings of the board of directors may be
held without notice at such time and at such place as may from time to time be
determined by the board of directors. Special meetings of the board of directors
may be called by the chairman, the president or one-third of the directors then
in office. Notice thereof stating the place, date and hour of the meeting shall
be given to each director either by mail not less than forty-eight hours before
the date of the meeting, or by telephone or telegram on twenty-four hours'
notice.
Section 5. Quorum.
Except as may be otherwise specifically provided by law, the Certificate of
Incorporation or these bylaws, at all meetings of the board of directors, a
majority of the directors then in office shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the board of
directors. If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 6. Actions of the Board.
Unless otherwise provided by the Certificate of Incorporation or these
bylaws, any action required or permitted to be taken at any meeting of the board
of directors or of any committee thereof may be taken without a meeting, if all
the members of the board of directors or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board of directors or committee.
Section 7. Meetings by Means of Conference Telephone.
Unless otherwise provided by the Certificate of Incorporation or these
bylaws, members of the board of directors of the Corporation, or any committee
designated by the board of directors, may participate in a meeting of the board
of directors or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 7 shall constitute presence in person at such meeting.
Section 8. Compensation.
The directors may be paid their reasonable expenses, if any, of attendance
at each meeting of the board of directors and may be paid a reasonable fixed sum
for actual attendance at each meeting of the board of directors. Directors, as
such, may receive a stated salary for their services. No such payment shall
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 9. Interested Directors.
No contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the board of
directors or committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if (i) the
material facts as to his or their relationship or interest and as to the
contract or transaction are disclosed or are known to the board of directors or
the committee, and the board of directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors may be less
than a quorum; or (ii) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (iii) the
<PAGE>
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the board of directors, a committee thereof
or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of directors or
of a committee which authorizes the contract or transaction.
Section 10. Corporate Books.
The directors may keep the books of the Corporation, except such as are
required by law to be kept within the state, outside of the State of Delaware at
such place or places as they may from time to time determine.
Section 11. Presumption of Assent.
A director of the Corporation who is present at a meeting of the board of
directors at which action on any Corporation matter is taken shall be presumed
to have assented to the action taken unless his dissent or abstention shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the secretary of the Corporation within five days after the date he receives
a copy of the minutes of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
Section 12. Resignation.
Any director may resign at any time by sending a written notice of such
resignation to the home office of the Corporation addressed to the chairman of
the board or the president. Unless otherwise specified therein such resignation
shall take effect upon receipt thereof by the chairman of the board or the
president. More than three consecutive absences from regular meetings of the
board of directors, unless excused by resolution of the board, shall
automatically constitute a resignation, effective when such resignation is
accepted by the board of directors.
Section 13. Nominations.
Only persons who are nominated in accordance with the procedures set forth
in these bylaws shall be eligible for election as directors. Nominations of
persons for election to the Board of Directors of the Corporation may be made at
a meeting of stockholders at which directors are to be elected only (i) by or at
the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Section 13, who is entitled to vote for the election of
directors at the meeting and who complies with the notice procedures set forth
in this Section 13.
Such nominations, other than those made by or at the direction of the Board
of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice shall be
delivered or mailed to and received at the principal executive offices of the
Corporation not less than 60 nor more than 90 days prior to the date of the
meeting; provided, however, that in the event that less than 70 days notice or
prior disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. Such
stockholder's notice shall set forth (i) as to each person whom such stockholder
proposes to nominate for election or re-election as a director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected and a description of all
arrangements or understandings between such stockholder and each such nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by such stockholder); (ii) as
to the stockholder giving the notice, the name and address, as they appear on
the Corporation's books, of such stockholder and the class and number of shares
of the Corporation's capital stock that are owned beneficially and the class and
number of shares of the Corporation's capital stock that are owned of record by
such stockholder, in each case both as of the date of such notice to the
Secretary and as of the record date for the meeting (if such record date shall
have been made publicly available and such notice is given after such record
date); and (iii) as to the beneficial owner, if any, on whose behalf the
<PAGE>
nomination is made, the name and address, as they appear on the Corporation's
books, of such person and the class and number of shares of the Corporation's
capital stock that are owned beneficially and the class and number of shares of
the Corporation's capital stock that are owned of record by such person, in each
case both as of the date of such notice to the Secretary and as of the record
date for the meeting (if such record date shall have been made publicly
available and such notice is given after such record date). At the request of
the Board of Directors, any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee.
Notwithstanding anything in these bylaws to the contrary, no person shall
be eligible for election, or to serve, as a director of the Corporation unless
nominated in accordance with the provisions of this Section 13. The officer of
the Corporation or other person presiding at the meeting shall, if the facts so
warrant, determine that a nomination was not made in accordance with such
provisions and, if he or she should so determine, he or she shall so declare to
the meeting and the defective nomination shall be disregarded. Notwithstanding
any of the provisions of this Section 13, a stockholder shall also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the matters set forth
in this Section 13.
Section 14. Age Limitations.
No person 72 years of age shall be eligible for election, re-election,
appointment, or re-appointment to the board of directors of the Corporation. No
director shall serve as such beyond the annual meeting of the Corporation
immediately following the director becoming 72 years of age. This age limitation
does not apply to an advisory director.
ARTICLE IV
EXECUTIVE AND OTHER COMMITTEES
Section 1. Appointment.
The board of directors, by resolution adopted by a majority of the full
board, may designate the chief executive officer and two or more of the other
directors to constitute an executive committee. The designation of any committee
pursuant to this Article IV and the delegation of authority thereto shall not
operate to relieve the board of directors, or any director, of any
responsibility imposed by law or regulation.
Section 2. Authority.
The executive committee, when the board of directors is not in session,
shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it, except to the extent, if any, that such powers and authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the power or authority of the board
of directors with reference to amending the Certificate of Incorporation;
adopting an agreement of merger or consolidation; recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets; recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution; amending the
bylaws of the Corporation; or approving a transaction in which any member of the
executive committee, directly or indirectly, has any material beneficial
interest; and unless the resolution or bylaws expressly so provide, the
executive committee shall not have the power or authority to declare a dividend
or to authorize the issuance of stock.
Section 3. Tenure.
Subject to the provisions of Section 8 of this Article IV, each member of
the executive committee shall hold office until the next annual regular meeting
of the board of directors following his designation and until his successor is
designated as a member of the executive committee.
<PAGE>
Section 4. Meetings.
Regular meetings of the executive committee may be held without notice at
such times and places as the executive committee may fix from time to time by
resolution. Special meetings of the executive committee may be called by any
member thereof upon not less than one day's notice stating the place, date and
hour of the meeting, which notice may be written or oral. Any members of the
executive committee may waive notice of any meeting and no notice of any meeting
need be given to any member thereof who attends in person. The notice of a
meeting of the executive committee need not state the business proposed to be
transacted at the meeting.
Section 5. Quorum.
A majority of the members of the executive committee shall constitute a
quorum for the transaction of business at any meeting thereof, and action of the
executive committee must be authorized by the affirmative vote of a majority of
the members present at a meeting at which a quorum is present.
Section 6. Action Without a Meeting.
Any action required or permitted to be taken by the executive committee at
a meeting may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the members of the executive
committee.
Section 7. Vacancies.
Any vacancy in the executive committee may be filled by a resolution
adopted by a majority of the full board of directors.
Section 8. Resignations and Removal.
Any member of the executive committee may be removed at any time with or
without cause by resolution adopted by a majority of the full board of
directors. Any members of the executive committee may resign from the executive
committee at any time by giving written notice to the president or secretary of
the Corporation. Unless otherwise specified therein, such resignation shall take
effect upon receipt. The acceptance of such resignation shall not be necessary
to make it effective.
Section 9. Procedure.
The executive committee shall elect a presiding officer from its members
and may fix its own rules of procedure which shall not be inconsistent with
these bylaws. It shall keep regular minutes of its proceedings and report the
same to the board of directors for its information at the meeting thereof held
next after the proceedings shall have been taken.
Section 10. Other Committees.
The board of directors may by resolution establish an audit committee, a
loan committee or other committees composed of directors as they may determine
to be necessary or appropriate for the conduct of the business of the
Corporation and may prescribe the duties, constitution and procedures thereof.
ARTICLE V
OFFICERS
Section 1. General.
The officers of the Corporation shall be chosen by the board of directors
and shall be a president, a secretary and a treasurer. The chairman of the board
may also be designated as an officer. The board of directors may designate one
or more vice presidents, assistant secretaries, assistant treasurers and other
officers. The offices of secretary and treasurer may be held by the same person
and a vice president may also be either the secretary or the treasurer. The
officers of the Corporation need not be either stockholders or directors of the
Corporation.
<PAGE>
Section 2. Election.
The board of directors at its first meeting held after the annual meeting
of stockholders shall elect annually the officers of the Corporation who shall
exercise such powers and perform such duties as shall be set forth in these
bylaws and as determined from time to time by the board of directors; and all
officers of the Corporation shall hold office until their successors are chosen
and qualified, or until their earlier resignation or removal. Any officer
elected by the board of directors may be removed at any time by the affirmative
vote of a majority of the board of directors. Any vacancy occurring in any
office of the Corporation shall be filled by the board of directors. The
salaries of all officers of the Corporation shall be fixed by the board of
directors.
Section 3. Removal.
Any officer may be removed by the board of directors whenever in its
judgment the best interests of the Corporation will be served thereby, but such
removal, other than for cause, shall be without prejudice to the contract
rights, if any, of the person so removed.
Section 4. Voting Securities Owned by the Corporation.
Powers of attorney, proxies, waivers of notice of meeting, consents and
other instruments relating to securities owned by the Corporation may be
executed in the name of and on behalf of the Corporation by the president or any
vice president, and any such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem advisable to vote
in person or by proxy at any meeting of security holders of any corporation
which the Corporation may own securities and at any such meeting shall possess
and may exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have exercised
and possessed if present. The board of directors may, by resolution, from time
to time confer like powers upon any other person or persons.
Section 5. President.
The president shall be a director of the Corporation. The president or the
chairman of the board, as designated by the board of directors, shall be the
chief executive officer. The president shall, subject to the control of the
board of directors, have general supervision of the business of the Corporation
and shall see that all orders and resolutions of the board of directors are
carried into effect. He shall execute all bonds, mortgages, contracts and other
instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these bylaws, the board of directors or
the president. If so designated by the board of directors, the president shall
preside at the annual meetings and special meetings of the stockholders. The
president shall also perform such other duties and may exercise such other
powers as from time to time assigned to him by these bylaws or by the board of
directors.
Section 6. Vice President.
At the request of the president or in his absence or in the event of his
inability or refusal to act, the vice president or the vice presidents if there
is more than one (in the order designated by the board of directors) shall
perform the duties of the president, and when so acting, shall have all the
powers and be subject to all the restrictions upon the president. Each vice
president shall perform such other duties and have such other powers as the
board of directors from time to time may prescribe. The board of directors may
designate one or more vice presidents as executive vice president or senior vice
president. If there be no vice president, the board of directors shall designate
the officer of the Corporation who, in the absence of the president or in the
event of the inability or refusal of the president to act, shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president.
Section 7. Secretary.
The secretary shall attend all meetings of the board of directors and all
meetings of stockholders and record all the proceedings thereat in a book or
books to be kept for that purpose; the secretary shall also perform like duties
for the standing committees when required. The secretary shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of the
board of directors, and shall perform such other duties as may be prescribed by
the board of directors or president, under whose supervision he shall be. If the
secretary shall be unable or shall refuse to cause to be given notice of all
<PAGE>
meetings of the stockholders and special meetings of the board of directors, and
if there be no assistant secretary, then either the board of directors or the
president may choose another officer to cause such notice to be given. The
secretary shall have custody of the seal of the Corporation and the secretary or
any assistant secretary, if there is one, shall have authority to affix the same
to any instrument requiring it and when so affixed, it may be attested by the
signature of the secretary or by the signature of any such assistant secretary.
The board of directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature. The
secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 8. Treasurer.
The treasurer shall have the custody of the corporate funds and securities
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the board of directors. The treasurer shall disburse the
funds of the Corporation as may be ordered by the board of directors, taking
proper vouchers for such disbursements, and shall render to the president and
the board of directors, at its regular meetings, or when the board of directors
so requires, an account of all his transactions as treasurer and of the
financial condition of the Corporation. If required by the board of directors,
the treasurer shall give the Corporation a bond in such sum and with such surety
or sureties as shall be satisfactory to the board of directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
Section 9. Assistant Secretaries.
Except as may be otherwise provided in these bylaws, assistant secretaries,
if there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the board of directors, the president, any vice
president, if there is one, or the secretary, and in the absence of the
secretary or in the event of his disability or refusal to act, shall perform the
duties of the secretary, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the secretary.
Section 10. Assistant Treasurers.
Assistant treasurers, if there be any, shall perform such duties and have
such powers as from time to time may be assigned to them by the board of
directors, the president, any vice president, if there is one, or the treasurer,
and in the absence of the treasurer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the treasurer. If required
by the board of directors, an assistant treasurer shall give the Corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the board of directors for the faithful performance of the duties of his office
and for the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
Section 11. Other Officers.
Such other officers as the board of directors may choose shall perform such
duties and have such powers as from time to time may be assigned to them by the
board of directors. The board of directors may delegate to any other officer of
the Corporation the power to choose such other officers and to prescribe their
respective duties and powers.
<PAGE>
ARTICLE VI
STOCK
Section 1. Form of Certificates.
Every holder of stock in the Corporation shall be entitled to have a
certificate signed, in the name of the Corporation (i) by the chairman of the
board of directors, the president or a vice president, and (ii) by the treasurer
or an assistant treasurer, or the secretary or an assistant secretary of the
Corporation, certifying the number of shares owned by him in the Corporation.
Section 2. Signatures.
Where a certificate is countersigned by (i) a transfer agent other than the
Corporation or its employee, or (ii) a registrar other than the Corporation or
its employee, any other signature on the certificate may be a facsimile. In case
any officer whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer before such certificate is issued it may be
issued by the Corporation with the same effect as if he were such officer at the
date of issue.
Section 3. Lost Certificates.
The board of directors may direct a new certificate to be issued in place
of any certificate theretofore issued by the Corporation alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to advertise the same in such manner as the board of directors
shall require and/or to give the Corporation a bond in such sum as it may direct
as indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfers.
Stock of the Corporation shall be transferable in the manner prescribed by
law and in these bylaws. Transfers of stock shall be made on the books of the
Corporation only by the person named in the certificate or by his attorney
lawfully constituted in writing and upon the surrender of the certificate
therefor, which shall be cancelled before a new certificate shall be issued.
Section 5. Record Date.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty days nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
Section 6. Beneficial Owners.
The Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends, and
to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
<PAGE>
ARTICLE VII
NOTICES
Section 1. Notices.
Whenever written notice is required by law, the Certificate of
Incorporation or these bylaws, to be given to any director, member of a
committee or stockholder, such notice may be given by mail, addressed to such
director, member of a committee or stockholder, at his address as it appears on
the records of the Corporation, with postage thereon prepaid, and such notice
shall be deemed to be given at the time when the same shall be deposited in the
United States mail. Written notice may also be given personally or by telegram,
telex or cable.
Section 2. Waivers of Notice.
Whenever any notice is required by law, the Certificate of Incorporation or
these bylaws, to be given to any director, member of a committee or stockholder,
a waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends.
Dividends upon the capital stock of the Corporation, subject to the
provisions of the Certificate of Incorporation if any, may be declared by the
board of directors at any regular or special meeting, and may be paid in cash,
in property, or in shares of the capital stock.
Section 2. Disbursements.
All checks or demands for money and notes of the Corporation shall be
signed by such officer or officers or such other person or persons as the board
of directors may from time to time designate.
Section 3. Fiscal Year.
The fiscal year of the Corporation shall be fixed by resolution of the
board of directors.
Section 4. Corporate Seal.
The corporate seal shall have been inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE IX
AMENDMENTS
Section 1. Amendment of Bylaws.
These bylaws may be altered, amended or repealed, in whole or in part, or
new bylaws may be adopted by the stockholders or by the board of directors,
provided, however, that notice of such alteration, amendment, repeal or adoption
of new bylaws be contained in the notice of such meeting of stockholders or
board of directors as the case may be. All such amendments must be approved by
either the majority vote of the entire board of directors or by a majority vote
of the votes cast by stockholders of the Corporation at any legal meeting.
Section 2. Entire Board of Directors.
As used in this Article IX and in these bylaws generally, the term "entire
board of directors" means the total number of directors which the Corporation
would have if there were no vacancies.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
<S> <C> <C>
THIS CERTIFICATE IS [LOGO] SEE REVERSE FOR CERTAIN
TRANSFERABLE IN NEW YORK, BAY VIEW DEFINITIONS
NY OR RIDGEFIELD PARK, NJ CAPITAL CORPORATION CUSIP 07262L 10 1
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF
Bay View Capital Corporation (the
"Corporation"), a Delaware corporation. The
shares represented by this certificate are
transferable only on the stock transfer books
of the Corporation by the holder of record
hereof, or by his duly authorized attorney or
legal representative, upon surrender of this
certificate properly endorsed. This
certificate is not valid until countersigned
and registered by the Corporation's transfer
agent and registrar.
In Witness Whereof, the Corporation has caused this
certificate to be executed by the facsimile signatures of
its duly authorized officers and has caused a facsimile of
its corporate seal to be hereunto affixed.
DATED:
COUNTERSIGNED AND REGISTERED
/s/ Edward H. Sondker CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
PRESIDENT AND TRANSFER AGENT AND
CHIEF EXECUTIVE OFFICER REGISTRAR
/s/ Robert J. Flax BY
CORPORATE SECRETARY AUTHORIZED SIGNATURE
</TABLE>
<PAGE>
BAY VIEW CAPITAL CORPORATION
The shares represented by this certificate are issued subject to all the
provisions of the certificate of incorporation and bylaws of Bay View Capital
Corporation (the "Corporation") as from time to time amended (copies of which
are on file at the principal executive offices of the Corporation).
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of July 26, 1990 (as
such may be amended from time to time, the "Rights Amendment"), between Bay View
Capital Corporation (the "Company") and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
the Company. Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may be exchanged for shares of Common Stock or
other securities or assets of the Company, may expire, may become void (if they
are "Beneficially Owned" by an "Acquiring Person" or an Affiliate or Associate
thereof, as such terms are defined in the Rights Agreement, or by any transferee
of the foregoing) or may be evidenced by separate certificates and may no longer
be evidenced by this certificate. The Company will mail or arrange for the
mailing of a copy of the Rights Agreement to the holder of this certificate
without charge within five days after the receipt of a written request thereof.
The Corporation will furnish to any stockholder upon request and without
charge a full statement of the powers, designations, preferences and relative
participating, optional or other special rights of each authorized class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights, to the extent that the same have been fixed, and
of the authority of the board of directors to designate the same with respect to
other series. Such request may be made to the Corporation or to its transfer
agent and registrar.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT Custodian
TEN ENT - as tenants by the entireties ------------------ --------------
JT TEN - as joints tenants with right of (Cust) (Minor)
survivorship and not as tenants Under Uniform Gifts to Minors
in common Act
--------------------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For Value Received, hereby sell, assign and transfer unto
-----------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------
= =
--------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------
of the Common Stock represented by the within certificate, and do hereby
irrevocably constitute and appoint
Attorney
- ------------------------------------------------------------------------
to transfer the said shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated:
-----------------
-------------------------------------------------
NOTICE:THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THIS
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By -------------------------------------------------------------- THE
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.
EXHIBIT 5
[Letterhead of Silver, Freedman & Taff, L.L.P.]
October 14, 1999
Board of Directors
Bay View Capital Corporation
1840 Gateway Drive
San Mateo, California 94404
Members of the Board:
We have acted as counsel to Bay View Capital Corporation (the
"Corporation") in connection with the preparation and filing with the Securities
and Exchange Commission of a registration statement on Form S-3 under the
Securities Act of 1933, as amended (the "Registration Statement"), relating to
the registration of 5,759,733 shares of the Corporation's common stock to be
offered by the Corporation and the selling stockholder described in the
Registration Statement (the "Shares"). In this connection, we have reviewed the
Corporation's Certificate of Incorporation, its Bylaws and certain resolutions
of its Board of Directors and committees thereof.
Based upon the foregoing, it is our opinion that the Shares will be,
when and if issued, validly issued, fully paid and nonassessable shares of
common stock of the Corporation.
We hereby consent to the inclusion of our opinion as Exhibit 5 to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/S/ SILVER, FREEDMAN & TAFF, L.L.P.
SILVER, FREEDMAN & TAFF, L.L.P.
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
Bay View Capital Corporation:
We consent to the incorporation by reference in the Registration Statement (No.
333-83199) on Amendment No. 1 to Form S-3 of our report dated January 19, 1999,
except as to footnote 24, which is as of March 11, 1999, relating to the
consolidated statement of financial condition of Bay View Capital Corporation as
of December 31, 1998, and the related consolidated statements of income and
comprehensive income, stockholders' equity and cash flows for the year then
ended, which report appears in the December 31, 1998 annual report on Form
10-K/A incorporated by reference herein and to the reference to our Firm under
the caption "Experts" in the Registration Statement.
/s/ KPMG LLP
KPMG LLP
San Francisco, California
October 11, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Franchise Mortgage Acceptance Company:
We consent to the incorporation by reference in the registration statement on
Amendment No. 1 to Form S-3 of Bay View Capital Corporation of our report dated
January 19, 1999, except as to notes 22, 23, and 20 to the consolidated
financial statements, which are as of February 16, 1999, March 10, 1999 and
March 29, 1999, respectively, with respect to the consolidated balance sheets of
Franchise Mortgage Acceptance Company as of December 31, 1998 and 1997, and the
related consolidated statements of income, changes in stockholders' or members'
equity and cash flows for each of the years in the three-year period ended
December 31, 1998, which report appears in the December 31, 1998 annual report
on Form 10-K of Franchise Mortgage Acceptance Company, and to the reference to
our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
------------------
KPMG LLP
Los Angeles, California
October 8, 1999
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement of Bay View Capital Corporation on Form S-3 of our report
dated January 26, 1998 appearing in the Annual Report on Form 10-K/A of Bay View
Capital Corporation for the year ended December 31, 1998 and to the reference to
us under the heading "Experts" in the Prospectus, which is a part of this
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
October 11, 1999
