SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
BAY VIEW CAPITAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
NOTICE OF 1999 ANNUAL MEETING AND PROXY STATEMENT
[BAY VIEW CAPITAL LOGO]
April 27, 1999
Dear Stockholder:
On behalf of the Board of Directors and management of Bay View Capital
Corporation, I cordially invite you to attend the Company's 1999 Annual Meeting
of Stockholders. The meeting will be held at 1:00 p.m., local time, on May 27,
1999 at Bay View's main offices, located at 1840 Gateway Drive, San Mateo,
California 94404.
The meeting is for the purpose of the election of two directors of the
Company and such other matters as may properly come before the meeting or any
adjournment or postponement thereof.
I encourage you to attend the meeting in person. Whether or not you do so,
however, I hope that you will read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the postage
prepaid envelope provided. This will save Bay View additional expense in
soliciting proxies and will ensure that your shares are represented. Please note
that you may vote in person at the meeting even if you have previously returned
the proxy card.
Thank you for your attention to this important matter.
Sincerely,
JOHN R. MCKEAN
CHAIRMAN OF THE BOARD
<PAGE>
BAY VIEW CAPITAL CORPORATION
1840 GATEWAY DRIVE
SAN MATEO, CALIFORNIA 94404
(650) 312-7200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 27, 1999
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Bay View Capital Corporation (the "Company") will be held at the
Company's main offices, located at 1840 Gateway Drive, San Mateo, California
94404, on May 27, 1999, at 1:00 p.m., local time.
A proxy card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of the election of two directors of the
Company and such other matters as may properly come before the Meeting or any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting.
Any action may be taken on the foregoing matters at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on March
31, 1999 are the stockholders entitled to vote at the Meeting and any
adjournments or postponements thereof. A list of stockholders entitled to vote
at the Meeting will be available for examination by any stockholder for any
purpose germane to the Meeting at the main office of the Company during the ten
days prior to the Meeting, as well as at the Meeting.
You are requested to complete, sign and date the enclosed proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
postage prepaid envelope provided. The proxy will not be used if you attend and
vote at the Meeting in person.
By Order of the Board of Directors
ROBERT J. FLAX
SECRETARY
San Mateo, California
April 27, 1999
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE- ADDRESSED
ENVELOPE IS PROVIDED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
BAY VIEW CAPITAL CORPORATION
1840 GATEWAY DRIVE
SAN MATEO, CALIFORNIA 94404
(650) 312-7200
ANNUAL MEETING OF STOCKHOLDERS
MAY 27, 1999
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Bay View Capital Corporation
("Bay View" or the "Company") to be used at the Annual Meeting of Stockholders
of the Company (the "Meeting") to be held at Bay View's main offices, located at
1840 Gateway Drive, San Mateo, California, on May 27, 1999 at 1:00 p.m., local
time, and at all adjournments or postponements of the Meeting. The accompanying
Notice of Meeting and form of proxy and this Proxy Statement are first being
mailed to stockholders on or about April 27, 1999. Certain of the information
provided herein relates to Bay View Bank, N.A. (the "Bank"), a wholly owned
subsidiary of the Company.
At the Meeting, stockholders of Bay View are being asked to elect two
directors of the Company and consider and act upon such other matters as may
properly come before the Meeting or any adjournments or postponements thereof.
VOTING RIGHTS AND PROXY INFORMATION
All shares of Bay View common stock represented at the Meeting by properly
executed proxies received prior to or at the Meeting, and not revoked, will be
voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted for the
nominees named in this proxy statement. Bay View does not know of any matters
other than as described in the Notice of Meeting that are to come before the
Meeting. If any other matters are properly presented at the Meeting for action,
the Board of Directors, as proxy for the stockholder, will have the discretion
to vote on such matters as directed by a majority of the Board of Directors in
their best judgment.
Directors will be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. Approval of any other matters that come before the Meeting for action
will require the affirmative vote of the holders of a majority of the stock duly
voted on the matter. In the election of directors, stockholders may either vote
"FOR" all nominees for election or withhold their votes from one or more
nominees for election. Votes that are withheld and shares held by a broker, as
nominee, that are not voted (so-called "broker non-votes") in the election of
directors will not be included in determining the number of votes cast. If any
other matter comes before the Meeting for action, stockholders may vote "FOR,"
"AGAINST" or "ABSTAIN" with respect to such other matter. Proxies marked to
abstain will have the same effect as votes against such other matter, and broker
non-votes will have no effect on such other matter. Unless a proxy is properly
revoked pursuant to the procedures described below, the Board of Directors, as
proxy for the stockholder, will have the discretion to vote on such other matter
on behalf of the stockholder as directed by a majority of the Board of Directors
in their best judgment. A majority of the shares of the Company's common stock,
present in person or represented by proxy, shall constitute a quorum for
purposes of the Meeting. Proxies marked to abstain and broker non-votes are
counted for purposes of determining a quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
Bay View at or before the Meeting a written notice of revocation bearing a later
date than the proxy; (ii) duly executing a subsequent proxy relating to the same
shares and delivering it to the Secretary of Bay View at or before the Meeting;
or (iii) attending the Meeting and voting in person (although attendance at the
Meeting will not in and of itself constitute revocation of a proxy). Any written
notice revoking a proxy should be delivered to Robert J. Flax, Executive Vice
President, General Counsel and Secretary, Bay View Capital Corporation, 1840
Gateway Drive, San Mateo, California 94404.
<PAGE>
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Record holders of common stock as of the close of business on March 31,
1999 will be entitled to one vote for each share then held. As of that date, the
Company had 18,808,637 shares of common stock issued and outstanding.
The following table sets forth, as of March 31, 1999, certain information
as to (i) those persons who were known by management to be beneficial owners of
more than 5% of the Company's outstanding shares of common stock, (ii) the
shares of common stock beneficially owned by the executive officers named below
and (iii) all director nominees, directors continuing in office after the
Meeting and executive officers as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AS OF
MARCH 31, 1999
------------------------------
BENEFICIAL OWNER NO. OF SHARES PERCENT
- ----------------------------------------------------------- ------------------------------
<S> <C> <C>
Southeastern Asset Management, Inc............................... 3,682,100(1) 19.58%
6075 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Edward H. Sondker................................................ 280,185(2) 1.47
David A. Heaberlin............................................... 177,179(2) .93
Michael A. Iachelli.............................................. 17,355(2) .09
Matthew L. Carpenter............................................. 18,001(2) .09
Ronald L. Reed................................................... 7,001(2) .04
All director nominees, directors continuing in office and
executive officers as a group (17 persons)....................... 1,055,548(2) 5.38
</TABLE>
- --------------------
(1) As reported by Southeastern Asset Management, Inc. ("Southeastern"), a
registered investment advisor, Longleaf Partners Realty Fund ("Longleaf
Realty"), Longleaf Partners Small-Cap Fund ("Longleaf Small-Cap") and Mr.
O. Mason Hawkins, as of December 31, 1998 on Amendment No. 4 to a Schedule
13G filed with the Securities and Exchange Commission (the "SEC").
Longleaf Realty and Longleaf Small-Cap are series of Longleaf Partners
Funds Trust, an open-end management investment company ("Longleaf Trust").
Southeastern serves as investment advisor for Longleaf Trust. Southeastern
reported sole voting power as to 332,200 shares, sole dispositive power as
to 588,000 shares and shared voting and dispositive powers as to 3,094,100
shares. Longleaf Realty reported sole voting and dispositive powers as to
no shares and shared voting and dispositive powers as to 1,088,000 shares.
Longleaf Small-Cap reported sole voting and dispositive powers as to no
shares and shared voting and dispositive powers as to 2,006,100 shares.
Mr. Hawkins, the Chairman of the Board and Chief Executive Officer of
Southeastern, may also be deemed to beneficially own the 3,682,100 shares
beneficially owned by Southeastern. Mr. Hawkins disclaims beneficial
ownership of all such shares.
(2) Includes shares held directly, held in retirement accounts, held by
certain members of the named individuals' families, or held by trusts of
which the named individuals are trustees or substantial beneficiaries,
with respect to which shares the named individuals may be deemed to have
sole or shared voting or dispositive power. Includes for Messrs. Sondker,
Heaberlin, Iachelli, Carpenter and Reed, and all director nominees,
directors continuing in office and executive officers as a group,
respectively, 258,000, 141,000, 15,000, 18,001, 6,001 and 829,002 shares
which are subject to options currently exercisable or which will become
exercisable within 60 days of March 31, 1999, granted under one or more of
the Company's Amended and Restated 1995 Stock Option and Incentive Plan
(the "1995 Stock Option Plan"), Amended and Restated 1986 Stock Option and
Incentive Plan (the "1986 Stock Option Plan") and Amended and Restated
1989 Non-Employee Director Stock Option Plan (the "1989 Stock Option
Plan"). Also includes a total of 21,308 Stock Units representing deferred
director fees credited as of December 31, 1998 to the Stock Unit Accounts
of non-employee directors established under the Company's and the Bank's
Stock In Lieu of Cash Compensation Plan for Non-Employee Directors (the
"Stock in Lieu of Cash Plan"). For additional information regarding the
Stock in Lieu of Cash Plan, see "Board of Directors Meetings, Committees
and Compensation -- Stock in Lieu of Cash Compensation Plan."
2
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
Two directors will be elected at the Meeting. Approximately one-third of
the directors are elected annually. Directors of the Company are elected to
serve for a three-year period or until their respective successors have been
elected and qualified.
The table below sets forth certain information regarding each nominee for
director and each current director whose term of office extends beyond the date
of the Meeting. It is intended that the proxies solicited on behalf of the Board
of Directors (other than proxies in which the vote is withheld as to one or more
nominees) will be voted at the Meeting for the election of the nominees
identified below. If any nominee is unable to serve, the shares represented by
all such proxies will be voted for the election of such substitute as the Board
of Directors may recommend. At this time, the Board of Directors knows of no
reason why any of the nominees might be unable to serve, if elected. There are
no arrangements or understandings between any director or nominee and any other
person pursuant to which such director or nominee was selected.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned as of
Term March 31, 1999
Director to ---------------------------------------
Name Age Position(s) Held Since(1) Expire No. of Shares(2)(3) Percent
- ------------------------------------------------------------------------------------------------------------------------------------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
George H. Krauss 57 Director 1998 2002 39,573 .21%
John R. McKean 68 Chairman of the Board 1984 2002 130,047 .69
DIRECTORS CONTINUING IN OFFICE
Paula R. Collins 49 Director 1993 2000 54,905 .29
Thomas M. Foster 56 Director 1993 2000 61,175 .32
Stephen T. McLin 53 Director 1998 2000 42,566 .23
Robert M. Greber 61 Director 1996 2001 23,316 .12
Edward H. Sondker 51 Director, President and 1995 2001 280,185 1.47
Chief Executive Officer
W. Blake Winchell 46 Director 1996 2001 27,194 .14
</TABLE>
- --------------------------
(1) Includes service as a director of Bay View Bank, N.A., a wholly owned
subsidiary of the Company.
(2) Includes shares held directly, held in retirement accounts, held by certain
members of the named individuals' families, or held by trusts of which the
named individuals are trustees or substantial beneficiaries, with respect
to which shares the named individuals may be deemed to have sole or shared
voting or dispositive power. Includes for Directors Krauss, McKean,
Collins, Foster, McLin, Greber and Winchell, respectively, 7,000, 62,000,
52,000, 58,000, 7,000, 20,000 and 20,000 shares which are subject to stock
options currently exercisable or which will become exercisable within 60
days of March 31, 1999, granted under the 1989 Stock Option Plan. Includes
for Director Sondker 258,000 shares which are subject to stock options
currently exercisable or which will become exercisable within 60 days of
March 31, 1999, granted under the 1995 Stock Option Plan.
(3) Of the shares listed for Directors Krauss, McKean, Collins, Foster, McLin,
Greber and Winchell, 1,017, 8,047, 2,705, 2,375, 1,154, 3,316, and 2,694
consist of Stock Units representing deferred director fees credited as of
December 31, 1998 to the respective Stock Unit Account of each director
established under the Stock in Lieu of Cash Plan.
3
<PAGE>
The business experience of each of the above directors for at least the
past five years is as follows:
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.
Mr. McKean has served as Chairman of the Board of the Company since
January 1994. Mr. McKean is the President of John R. McKean & Co. (CPAs), San
Francisco, California.
Ms. Collins is a principal of The WDG Companies, San Francisco,
California, a real estate development firm she founded in 1982, and Chief
Executive Officer of WDG Ventures, Inc., a subsidiary of The WDG Companies.
Mr. Foster is an independent financial consultant with over 20 years of
banking and financial experience. Mr. Foster was the President of Aircraft
Technical Publishers, Brisbane, California, an aircraft maintenance library
services company, from February 1989 until August 1992.
Mr. McLin has been President and Chief Executive Officer of America First
Financial Corporation, San Francisco, California ("America First"), 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.
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.
Mr. Sondker has served as President and Chief Executive Officer of the
Company and the Bank since August 1995. Prior thereto he was President and Chief
Executive Officer of Independence One Bank of California from October 1990 until
June 1995. Mr. Sondker is a director of Sunstone Hotel Investors, Inc., San
Clemente, California.
Mr. Winchell is Managing Director of Generation 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.
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND COMPENSATION
MEETINGS. Meetings of the Company's Board of Directors are generally held
monthly. The Board of Directors of the Company held 11 meetings during the
fiscal year ended December 31, 1998. No incumbent director of the Company
attended fewer than 75% of the total number of meetings held by the Company's
Board of Directors and by all committees of the Board of Directors of the
Company on which he or she served during the year.
FEES. Prior to April 1, 1999, directors' fees were paid to non-employee
directors, including the Chairman of the Board, as follows: a retainer of $1,800
per month; a fee of $1,000 per Board meeting attended ($500 in the case of
telephonic meetings attended); a fee of $750 per committee meeting attended
($500 in the case of telephonic meetings attended); and an additional fee of
$333 per month for the Chairman of the Audit Committee and $200 per month for
the Chairman of each other committee. In 1998, the Chairman of the Board was
also paid a Chairman's retainer of $5,000 per month. Only one fee for attendance
at Board meetings of the Bank and the Company was paid when meetings of the Bank
and Company Boards were held on the same day.
Effective April 1, 1999, the directors' fees for non-employee directors,
including the Chairman of the Board, were changed as follows: a monthly retainer
of $2,000 if the person is a director of either the Company or the Bank, but not
both, and a monthly retainer of $2,500 if the person is a director of both the
Company and the Bank; a fee of $1,500 per Board meeting attended ($1,000 in the
case of telephonic meetings attended); and a fee of $1,000 per committee meeting
attended ($500 in the case of telephonic meetings attended), plus $400 per
4
<PAGE>
committee meeting for the Chairman of the Audit Committee and $250 per committee
meeting for the Chairman of each other committee. No fee is paid for attendance
at any committee meeting held on the same day as a Board meeting, except that
committee Chairman fees are paid regardless of whether the committee meeting is
held on the same day as a Board meeting. The Chairman of the Board will continue
to be paid a Chairman's retainer of $5,000 per month. As was the case prior to
April 1, 1999, only one fee for attendance at Board meetings of the Bank and the
Company is paid when meetings of the Bank and Company Boards are held on the
same day.
STOCK OPTION AWARDS. On January 30, 1998, options to purchase 10,000
shares of the Company's common stock at an exercise price of $29.91 per share
were granted to each of Directors Collins, Foster, McKean and Roger K. Easley.
(Mr. Easley will not continue as a director of the Company following the
Meeting, but will continue to serve as a director of the Bank.) The options
became exercisable in full on July 30, 1998 and will expire on January 30, 2008.
On February 26, 1998, options to purchase 7,000 shares of common stock at
an exercise price of $32.56 per share were granted to each of Directors Krauss
and McLin. The options became exercisable in full on August 26, 1998 and will
expire on February 26, 2008.
Information regarding stock options granted to Director Sondker, the
President and Chief Executive Officer of the Company, is contained elsewhere in
this Proxy Statement in the table captioned "Option Grants in Last Fiscal Year."
STOCK IN LIEU OF CASH COMPENSATION PLAN. In 1996, the Company and the Bank
adopted the Stock in Lieu of Cash Compensation Plan for Non-Employee Directors
(the "Stock in Lieu of Cash Plan"). The Stock in Lieu of Cash Plan provides for
the deferral of director fees earned by non-employee directors of the Bank in
the form of Stock Units ("Stock Units"), which are credited to accounts
maintained for the non-employee directors ("Stock Unit Accounts"). At least 20%
of the fees paid to non-employee directors must be converted into Stock Units,
and non-employee directors may elect to have up to 100% of their fees converted.
The number of Stock Units per fee deferral is determined by dividing the amount
of fees deferred by the fair market value per share of the Company common stock
on the deferral date.
Each non-employee director has credited to his or her Stock Unit Account
an additional number of Stock Units to reflect cash dividends paid with respect
to Company common stock. The number of Stock Units is determined by multiplying
the amount of the dividend per share by the number of Stock Units held in the
non-employee director's Stock Unit Account on the dividend record date. Each
Stock Unit Account will be settled as soon as practicable following the
non-employee director's termination of service as a director, for any reason, by
delivering to the non-employee director (or his beneficiary) the number of
shares of Company common stock equal to the number of whole Stock Units then
credited to the non-employee director's Stock Unit Account. The non-employee
director may elect to have such shares delivered in substantially equal annual
installments over a period not to exceed ten years; in the absence of such an
election, all of such shares will be delivered on the settlement date.
AMENDED OUTSIDE DIRECTORS' RETIREMENT PLAN. The Bank maintains the Amended
Outside Directors' Retirement Plan (the "Retirement Plan") for non-employee
directors who retire from the Bank's Board of Directors with at least three
years of service on the Board and who were elected to the Bank's Board of
Directors prior to 1996. Only Directors Easley, McKean, Collins and Foster and
former directors Richard J. Quinlan and Robert L. Witt are eligible participants
in the Retirement Plan. Pursuant to the Retirement Plan, the present value of
the vested accrued benefits as of May 23, 1996 of each participant were
contributed by the Bank in cash to a grantor trust administered by a third-party
trustee. The cash was then invested by the trustee in shares of Company common
stock purchased on the open market, which have been allocated to accounts
maintained by the trustee for the Retirement Plan participants.
The Retirement Plan provides that, in general, upon the termination of a
participant's service as a director of the Bank (and the Company, if the
participant also serves as a director of the Company) prior to a change in
control of the Company or the Bank, the shares of Company common stock allocated
to the participant's account will be distributed in ten installments, with the
first installment being made within 30 days after termination of service and
each subsequent installment being made annually thereafter (the "normal form of
payment"). A participant may elect, within 15 days after termination of service,
to instead have the shares of stock allocated to his account sold by the trustee
5
<PAGE>
and receive the proceeds in cash, paid in ten installments, with the first
installment being paid within 30 days after termination of service and each
subsequent installment being paid annually thereafter (the "cash installment
form of payment"). The cash proceeds not immediately distributed would be
invested in permissible investments with the participant entitled to any
earnings on such investments up to a specified amount. If a participant's
service is terminated in connection with or after a change in control, the
participant will automatically receive the cash installment form of payment,
unless the Board of Directors of the Bank determines prior to the change in
control to require the trustee to make a single, lump-sum cash payment of the
value of each participant's account balance immediately after such a termination
of service. A participant whose service terminates before a change in control
and who begins receiving the normal form of payment will, in the event of a
change of control, thereafter receive the cash installment form of payment for
the remaining value of his or her account.
During fiscal 1998, former directors Quinlan and Witt (each of whom ceased
to be a director of the Company and the Bank in January 1998) were paid their
first installments under the Retirement Plan (under the normal form of payment)
of 1,405 and 800 shares of Company common stock, respectively.
COMMITTEES. Set forth below is information regarding the Audit,
Compensation and Benefits and Nominating Committees of the Company. The Board of
Directors of the Company also has a Stock Option Committee, the members of which
are Directors Collins, Greber and McKean.
The Audit Committee reviews audit and regulatory reports and related
matters to ensure effective compliance by the Company and the Bank with
regulatory and internal policies and procedures. Directors McKean, Collins, and
Winchell are members of this Committee. The Audit Committee held ten meetings
during 1998.
The Compensation and Benefits Committee is responsible for review and
recommendations for approval by the Board of senior officers' salaries, other
compensation and benefit programs and Board of Directors and committee fees. The
current members of the Compensation and Benefits Committee are Directors
Collins, Greber and McKean. The Committee held five meetings during 1998.
The Nominating Committee of the Company is responsible for nominating
persons to serve on the Board of Directors of the Company and as Chairman of the
Board. Directors Foster, McKean and Sondker are members of this Committee. The
Committee held one meeting during 1998. While the Nominating Committee will
consider nominees recommended by stockholders, the Committee has not actively
solicited such nominations. Pursuant to the Company's Bylaws, nominations by
stockholders must be delivered in writing to the Secretary of the Company not
less than 60 nor more than 90 days before the date of the annual meeting, except
that if less than 70 days' notice or prior disclosure of the date of the meeting
is given or made to stockholders, nominations must be delivered no later than
the close of business on the tenth day following the earlier of the day on which
notice of the date of the meeting is mailed or public disclosure of the date of
the meeting is made.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to the Company for the years ended December 31, 1998,
1997 and 1996 of the Chief Executive Officer of the Company and the four other
most highly compensated executive officers of the Company during fiscal 1998
(the "named officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------------------------
Awards Payouts
------------------------- ------------
Name and Annual Compensation Restricted Shares LTIP All Other
Principal ----------------------------------- Stock Underlying Payouts Compensation
Position Year Salary Bonus Award(s) Options (1) ($)
- --------------------------------- ---- -------- -------- ---------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Edward H. Sondker 1998 $375,000 $100,000 --- 50,000 --- $10,187(2)
President and Chief Executive 1997 300,000 150,000 --- 30,000 $702,881 18,339(2)
Officer 1996 287,502 143,750 --- 80,000 --- 48,977(2)
- --------------------------------------------------------------------------------------------------------------------------------
David A. Heaberlin 1998 $287,500 $75,000 --- 30,000 --- $6,250(3)
Executive Vice President and 1997 230,833 117,500 --- 30,000 $372,862 13,277(3)
Chief Financial Officer 1996 205,002 82,001 --- 80,000 --- 2,719(3)
- --------------------------------------------------------------------------------------------------------------------------------
Michael A. Iachelli(4) 1998 $196,000 $118,125 -- 5,000 --- $10,045(5)
President, Bay View Credit 1997 208,922 48,000 --- 10,000 --- 7,704(5)
1996 99,396 147,883 --- 40,000 --- 8,761(5)
- --------------------------------------------------------------------------------------------------------------------------------
Matthew L. Carpenter(6) 1998 $153,750 $82,688 --- 7,500 --- $15,257(7)
President and Chief Executive 1997 118,750 30,000 --- 30,000 --- 10,532(7)
Officer, Bay View Commercial 1996 --- --- --- --- --- ---
Finance Group
- --------------------------------------------------------------------------------------------------------------------------------
Ronald L. Reed(8) 1998 $190,000 $38,000 --- 12,500 --- $ 2,027(9)
Executive Vice President, 1997 36,782 25,000 --- 20,000 --- ---
Director of MIS and 1996 --- --- --- --- --- ---
Loan Servicing
================================================================================================================================
</TABLE>
(1) Options granted prior to June 2, 1997 have been adjusted for the
two-for-one stock split in the form of a 100% stock dividend paid on such
date.
(2) 1998: matching contribution to Mr. Sondker's account in the Bank's 401(k)
Plan, $5,550; life insurance premium, $120; split dollar life insurance
premium, $1,941; executive physical, $2,576; 1997: matching contribution
to Mr. Sondker's account in the Bank's 401(k) Plan, $4,800; life insurance
premium, $4,260; split dollar life insurance premium, $3,440; allocation
to Mr. Sondker's account in the Company's Employee Stock Ownership Plan
("ESOP"), $5,839; 1996: matching contribution to Mr. Sondker's account in
the Bank's 401(k) Plan, $4,500; life insurance premium, $4,033; executive
physical, $880; closing costs related to the sale and purchase of Mr.
Sondker's homes, $17,689; reimbursement for miscellaneous moving expenses,
$21,875. The value of the allocation to Mr. Sondker's ESOP account for
1998 is not yet available.
(3) 1998: matching contribution to Mr. Heaberlin's account in the Bank's
401(k) Plan, $4,800; life insurance premium, $73; split dollar life
insurance premium, $1,377; 1997: matching contribution to Mr. Heaberlin's
account in the Bank's 401(k) Plan, $4,800; life insurance premium, $73;
split dollar life insurance premium, $2,565; allocation to Mr. Heaberlin's
account in the ESOP, $5,839; 1996: matching contribution to Mr.
Heaberlin's account in the Bank's 401(k) Plan, $1,050; life insurance
premium, $73; executive physical, $1,596. The value of the allocation to
Mr. Heaberlin's ESOP account for 1998 is not yet available.
(4) Mr. Iachelli joined the Company on June 14, 1996 in connection with the
Company's acquisition of Bay View Credit (formerly known as California
Thrift and Loan). Mr. Iachelli resigned from the Company effective April
7, 1999.
(5) 1998: matching contribution to Mr. Iachelli's account in the Bank's 401(k)
Plan, $9,325; life insurance premium, $720; 1997: matching contribution to
Mr. Iachelli's account in the Bank's 401(k) Plan, $4,956; life insurance
premium, $240; allocation to Mr. Iachelli's account in Bay View Credit's
Employee Stock Ownership Plan ("BVC ESOP"), $2,508; 1996: matching
contribution to Mr. Iachelli's account in the Bank's 401(k) Plan, $4,750;
life insurance premium, $720; BVC ESOP, $3,291. The value of the
allocation to Mr. Iachelli's account in the BVC ESOP for 1998 is not yet
available.
(6) Mr. Carpenter joined the Company on March 17, 1997 in connection with the
Company's acquisition of Bay View Commercial Finance Group (formerly known
as Concord Growth Corporation).
7
<PAGE>
(7) 1998: matching contribution to Mr. Carpenter's account in the Bank's
401(k) Plan, $9,225; life insurance premium, $32; automobile allowance,
$6,000; 1997: matching contribution to Mr. Carpenter's account in the
Bank's 401(k) Plan, $4,500; life insurance premium, $32; automobile
allowance, $6,000.
(8) Mr. Reed joined the Company on October 23, 1997.
(9) 1998: matching contribution to Mr. Reed's account in the Bank's 401(k)
Plan, $763; executive physical, $1,264.
The following table sets forth certain information concerning grants of
stock options pursuant to the 1995 Stock Option Plan to the named officers in
1998. No stock appreciation rights ("SARs") were granted in 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
--------------------------------------------------------- Potential Realizable
Number of % of Total Value At Assumed
Shares Options Annual Rates of Stock
Underlying Granted to Per Share Price Appreciation for
Options Employees in Exercise Expiration Option Term
Granted in Fiscal Year Price Date -----------------------
5% 10%
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Sondker 30,000(1) 5.22% $31.6875 1/22/08 $597,843 $1,515,051
20,000(2) 3.48 27.6875 7/30/08 348,250 882,535
- -----------------------------------------------------------------------------------------------------------------
David A. Heaberlin 20,000(1) 3.48 31.6875 1/22/08 398,562 1,010,034
10,000(3) 1.74 31.5625 6/25/08 198,495 503,025
- -----------------------------------------------------------------------------------------------------------------
Michael A. Iachelli 5,000(3) 0.87 31.5625 6/25/08 99,247 251,512
- -----------------------------------------------------------------------------------------------------------------
Matthew L. Carpenter 7,500(3) 1.30 31.5625 6/25/08 148,871 377,269
- -----------------------------------------------------------------------------------------------------------------
Ronald L. Reed 7,500(3) 1.30 31.5625 6/25/08 148,871 377,269
5,000(4) 0.87 17.9375 10/22/08 56,404 142,939
=================================================================================================================
</TABLE>
(1) The vesting schedule of the option is as follows: 30% on January 22, 1999,
30% on January 22, 2000 and 40% on January 22, 2001.
(2) The vesting schedule of the option is as follows: 30% on July 30, 1999,
30% on July 30, 2000 and 40% on July 30, 2001.
(3) The vesting schedule of the option is as follows: 30% on June 25, 1999,
30% on June 25, 2000 and 40% on June 25, 2001. As a result of his
resignation effective April 7, 1999, Mr. Iachelli's option was forfeited
to the Company.
(4) The vesting schedule of the option is as follows: 30% on October 22, 1999,
30% on October 22, 2000 and 40% on October 22, 2001.
8
<PAGE>
The following table sets forth certain information concerning option
exercises during the last fiscal year and the number and value of unexercised
stock options at December 31, 1998 held by the named officers. None of the named
officers held any SARs at December 31, 1998 or exercised any SARs during 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT
DECEMBER 31, 1998
Number of Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End FY-End ($) (1)
---------------------------- ------------------------------
Shares
Acquired Value
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---------------------- ----------- --------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Sondker --- --- 217,000 103,000 $ 1,771,000 $ 194,000
David A. Heaberlin --- --- 97,000 83,000 626,000 194,000
Michael A. Iachelli 12,000 $228,000 15,000 28,000 56,250 75,000
Matthew L. Carpenter --- --- 18,001 19,499 --- ---
Ronald L. Reed --- --- 6,001 26,499 --- 18,750
</TABLE>
(1) The difference between the aggregate option exercise price and the fair
market value of the underlying shares at December 31, 1998.
The following table sets forth information concerning phantom stock units
and stock options which will be awarded under the Company's 1998-2000
Performance Stock Plan (the "Performance Stock Plan") and Supplemental Phantom
Stock Unit Plan (the "Supplemental Plan") if certain performance criteria are
met by the Company. For additional information regarding these potential awards,
see the footnotes below and "Compensation Committee Report on Executive
Compensation."
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
Performance or Other
Number of Shares, Period Until
Name Units or Other Rights Maturation or Payout
- --------------------------------------------------------------------------------
Edward H. Sondker 84,000(1) 1998 - 2000
84,000(2) 1998 - 2000
David A. Heaberlin 60,000(3) 1998 - 2000
60,000(4) 1998 - 2000
Michael A. Iachelli 15,000(5) 1998 - 2000
15,000(6) 1998 - 2000
Matthew L. Carpenter 15,000(7) 1998 - 2000
15,000(8) 1998 - 2000
Ronald L. Reed 15,000(9) 1998 - 2000
15,000(10) 1998 - 2000
================================================================================
(1) Represents up to 84,000 phantom stock units and stock options to purchase
up to 84,000 shares of Company common stock which will be awarded to Mr.
Sondker under the Performance Stock Plan if the Company meets certain
performance criteria.
9
<PAGE>
(2) Represents up to 84,000 phantom stock units which will be awarded to Mr.
Sondker under the Supplemental Plan if the Company meets certain
performance criteria.
(3) Represents up to 60,000 phantom stock units and stock options to purchase
up to 60,000 shares of Company common stock which will be awarded to Mr.
Heaberlin under the Performance Stock Plan if the Company meets certain
performance criteria.
(4) Represents up to 60,000 phantom stock units which will be awarded to Mr.
Heaberlin under the Supplemental Plan if the Company meets certain
performance criteria.
(5) Represents up to 15,000 phantom stock units and stock options to purchase
up to 15,000 shares of Company common stock which Mr. Iachelli was
eligible to receive under the Performance Stock Plan prior to his
resignation if the Company met certain performance criteria.
Upon his resignation, Mr. Iachelli ceased to be eligible for these awards.
(6) Represents up to 15,000 phantom stock units which Mr. Iachelli was
eligible to receive under the Supplemental Plan prior to his resignation
if the Company met certain performance criteria. Upon his resignation, Mr.
Iachelli ceased to be eligible for these awards.
(7) Represents up to 15,000 phantom stock units and stock options to purchase
up to 15,000 shares of Company common stock which will be awarded to Mr.
Carpenter under the Performance Stock Plan if the Company meets certain
performance criteria.
(8) Represents up to 15,000 phantom stock units which will be awarded to Mr.
Carpenter under the Supplemental Plan if the Company meets certain
performance criteria.
(9) Represents up to 15,000 phantom stock units and stock options to purchase
up to 15,000 shares of Company common stock which will be awarded to Mr.
Reed under the Performance Stock Plan if the Company meets certain
performance criteria.
(10) Represents up to 15,000 phantom stock units which will be awarded to Mr.
Reed under the Supplemental Plan if the Company meets certain performance
criteria.
EMPLOYMENT CONTRACTS
The Company has employment agreements with each of Messrs. Sondker,
Heaberlin, Iachelli, Carpenter and Reed. Each agreement provides for an initial
term of one year with automatic renewal for an additional year on each December
31 unless the Company or the executive gives prior written notice that the
agreement is not to be renewed. The agreements provide for the payment of base
salary as follows: Mr. Sondker $350,000 per annum; Mr. Heaberlin $275,000 per
annum; Mr. Iachelli $192,000 per annum; Mr. Carpenter $150,000 per annum; and
Mr. Reed $190,000 per annum. The agreements provide for base salary review on
July 1 of each year and further provide that salary increases are not guaranteed
or automatic. The contracts provide for participation in an equitable manner in
employee benefits applicable to executive personnel.
In the event of termination by the Company without cause, Messers.
Sondker, Heaberlin and Reed would be entitled to receive a lump sum severance
payment of 18 months' salary, and Messrs. Iachelli and Carpenter would be
entitled to receive a severance payment of 12 months' salary. Upon a change in
control of the Company followed within 24 months by the involuntary termination
of an executive (including the executive's relocation or a reduction in benefits
or responsibilities) without cause, the executive would be entitled to a lump
sum severance payment of 200% of annual salary. As noted elsewhere in this Proxy
Statement, Mr. Iachelli voluntarily terminated his employment effective April 7,
1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee of the Board of Directors has
furnished the following report on executive compensation:
COMPENSATION PHILOSOPHY REGARDING EXECUTIVE OFFICERS
The Compensation and Benefits Committee (the "Committee") of the Board of
Directors is responsible for supervising and approving the compensation and
benefits of the executive officers of the Company. The Committee seeks to ensure
that the compensation of senior executives is consistent with the overall
performance goals of the Company. In executing its responsibilities, the
Committee considers the three components of compensation for
10
<PAGE>
executive officers: (1) base salary; (2) annual incentives; and (3) long-term
incentives. The underlying goal of corporate compensation is to tie the
executive's compensation to performance of the Company as a whole, and to
achievement of individual objectives. This goal is implemented by weighing the
two variable compensation components, namely, annual and long term incentives,
more heavily than base salary. Compensation levels for base salary are intended
to be competitive but slightly below the market average. Executives can attain
total compensation at above market levels by accomplishing their individual
goals at the same time that the Company has achieved stated corporate goals.
In 1998, the Committee retained the services of Strategic Compensation
Associates ("SCA"), an independent compensation consulting firm, to
competitively assess the Company's executive compensation programs and make
appropriate recommendations in accordance with the Committee's
pay-for-performance philosophy. SCA compiled a composite group of peer
institutions and analyzed peer group compensation data from proxy statements,
financial data, annual reports and published surveys; pay data was appropriately
adjusted to compare with the Company's size. SCA derived market consensus levels
of total compensation for each executive position of the Company based on
experience, responsibilities and scope of duties, and made recommendations as to
appropriate base salary and target annual and long-term incentive compensation
levels. Based on SCA's recommendations, the Committee made certain changes to
existing salary levels for executive officers of the Company in July 1998, such
that base salaries were generally set at levels approximately 5 to 15% below
market consensus for each position. The Chairman of the Board of each of the
respective subsidiaries made determinations for salary levels for executive
officers of those subsidiaries, also based on peer data comparison provided by
SCA. Ranges for target long-term compensation for each executive position were
also established by the Committee based on SCA's recommendations.
Incentive and bonus programs for executive officers have been utilized by
the Company for many years. Annual incentive plans for the executive officers
measure performance based upon (1) the creation of shareholder value as
reflected in certain financial measurements, (2) business unit performance; and
(2) individual performance, as measured against goals and objectives in the
Company's business plan. The annual incentive plans for executive officers have
required that certain thresholds of corporate performance and regulatory ratings
be met prior to an executive being entitled to an incentive payment.
The 1998 Annual Senior Management Incentive Plan (the "1998 Plan") for the
executive officers of the Company and the Bank contained certain corporate goals
which were required to be met prior to any officer eligibility for a bonus.
These thresholds were net income of the Company and, for officers of the Bank
only, regulatory examination results, including a satisfactory Community
Reinvestment Act ("CRA") rating. The Company's net income threshold calculated
in accordance with terms of the 1998 Plan resulted in a maximum payment of 50%
of target bonus award levels to Company officers. Production subsidiary units,
Bay View Credit and Bay View Commercial Finance Group, were required to meet
performance targets based on production levels, asset quality and expense
control, and such goals were exceeded. Consequently, the named officers were
entitled to payments under the 1998 Plan as follows: Edward Sondker, $100,000;
David Heaberlin, $75,000; Ronald Reed, $38,000; Michael Iachelli, $118,125; and
Matthew Carpenter, $82,688. The bonus payments to the named officers for 1998
totaled $413,813.
In January 1998, the Committee approved a new long-term incentive plan
(the "Performance Stock Plan") designed by SCA to complement the Company's
existing stock option program through which awards are contingent on the
achievement of specific performance measures as set forth in the Performance
Stock Plan. The Performance Stock Plan was submitted to and approved by the
Company's shareholders at the May 1998 annual shareholders' meeting. In December
1998, the Committee approved a Supplemental Phantom Stock Unit Plan (the
"Supplemental Plan"), which was ratified by the Board in January 1999 (the
Performance Stock Plan and the Supplemental Plan are referred to collectively as
the "Long-term Incentive Plan"). The Committee believes that the Long-term
Incentive Plan's design will focus participants on performance measures that
will lead to the creation of value for the Company's shareholders while
providing the participants with the opportunity to earn rewards commensurate
with performance and the creation of shareholder value. Under the terms of the
Long-term Incentive Plan, awards are not earned unless and until certain
corporate performance measurements have been achieved. The Plan is divided into
three award tranches, with each tranche requiring the simultaneous achievement
of a minimum level of performance of net interest margin, tangible core return
on equity and transaction account mix. Upon achievement of all criteria for each
tranche, participants earn (1) phantom stock units ("PSUs") from the Performance
Stock Plan which are immediately converted to cash based on the stock price
appreciation from $36.25 (the market value of the common stock on January 1,
1998)
11
<PAGE>
to the market price on the last day of the quarter in which the award is earned,
(2) stock options with a grant price equal to the market value of the common
stock on the last day of the quarter with a 6 month vesting and 5 year term, and
(3) PSUs from the Supplemental Plan which are immediately converted to cash
based on the stock price appreciation from $21.00 (the market price of the
common stock on December 7, 1998) to the market price on the last day of the
quarter in which the award is earned but not to exceed $36.25. The award grants
to each of the named officers upon achievement of all criteria in each tranche
is as follows: Edward Sondker, 28,000 PSUs and 28,000 options per tranche from
the Performance Stock Plan and 28,000 PSUs per tranche from the Supplemental
Plan; David Heaberlin, 20,000 PSUs and 20,000 options per tranche from the
Performance Stock Plan and 20,000 PSUs per tranche from the Supplemental Plan;
Ronald Reed, 5,000 PSUs and 5,000 options per tranche from the Performance Stock
Plan and 5,000 PSUs per tranche from the Supplemental Plan; Michael Iachelli,
5,000 PSUs and 5,000 options per tranche from the Performance Stock Plan and
5,000 PSUs per tranche from the Supplemental Plan; and Matthew Carpenter, 5,000
PSUs and 5,000 options per tranche from the Performance Stock Plan and 5,000
PSUs per tranche from the Supplemental Plan.
The Committee considers the grant of stock options to executive officers
to be an important component of long-term compensation. In 1998 options were
granted to the named executive officers as follows: Mr. Sondker, 50,000 shares;
Mr. Heaberlin, 30,000 shares; Mr. Reed, 12,500 shares; Mr. Iachelli, 5,000
shares; and Mr. Carpenter, 7,500 shares. The grants were based on the
Committee's recognition of the exceptional performance of the named individuals,
their leadership skills and their ability to affect the results of the Company,
and most importantly, the importance of retaining the named individuals because
of their impact on the future success of the Company.
During 1997, the Company established split-dollar life insurance policies
for Messrs. Sondker and Heaberlin. The policies were funded by the tax-free
conversion of the cash surrender value of existing policies that no longer
served a valid purpose. The new policies are owned by the executives but provide
for an assignment back to the Company of the amount contributed by the Company.
The assignment would be terminated upon a change in control of the Company.
CEO COMPENSATION
Edward H. Sondker commenced employment as the Company's President and
Chief Executive Officer on August 1, 1995. Mr. Sondker's base salary was set at
$350,000 effective January 1, 1998, and increased to $400,000 effective July 1,
1998, as a result of recommendations made by SCA and in accordance with the
Committee's philosophy of setting base salary at slightly below peer market
average for a comparable position. Mr. Sondker's total compensation package
includes: (1) the aforementioned base salary; (2) annual incentive target award
of 50% of annual base salary based upon achievement of agreed-upon 1998
performance goals; (3) long-term compensation consisting of an option to
purchase 320,000 shares of Bay View common stock (representing cumulative grants
since his date of hire) vesting over three years; (4) PSUs and options, if
earned, under the Long-term Incentive Plan (5) the split-dollar life insurance
policy described above; and (6) a one year employment contract. On January 1,
1999, Mr. Sondker's employment agreement (described elsewhere in this Proxy
Statement) was renewed for an additional one year term. Mr. Sondker received an
annual incentive award in the amount of $100,000, which represented 25% of his
base salary as of December 31, 1998, for achieving corporate and individual
performance goals in accordance with the terms of the 1998 Plan. The Committee
is satisfied that Mr. Sondker's total compensation package is reasonable and
will continue to achieve the aforementioned goals of the Committee regarding
executive compensation.
EMPLOYMENT CONTRACTS
A more detailed description of the employment contracts with the named
officers is contained elsewhere in this Proxy Statement.
12
<PAGE>
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Federal tax laws limit the deduction a publicly-held company is allowed
for compensation paid to its chief executive officer and its four most highly
compensated executive officers. Generally, amounts in excess of $1 million
(other than performance-based compensation) paid in any tax year to a covered
executive cannot be deducted. The Committee will consider ways to maximize the
deductibility of executive compensation, while retaining the discretion the
Committee deems necessary to compensate executive officers in a manner
commensurate with performance and the competitive environment for executive
talent.
The foregoing report is furnished by Ms. Collins (Chairperson) and Messrs.
McKean and Greber.
13
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The line graph below compares the cumulative total stockholder return on
the Company's common stock to the cumulative total return of the Dow Jones
Global-U.S. Index and Dow Jones Savings and Loan Index* for the period December
31, 1993 through December 31, 1998. The graph assumes that $100 was invested on
December 31, 1993 and that all dividends were reinvested.
CUMULATIVE TOTAL RETURN
BAY VIEW CAPITAL CORPORATION, DOW JONES GLOBAL-U.S.
INDEX AND DOW JONES SAVINGS AND LOAN INDEX
[GRAPHIC: LINE GRAPH PLOTTED AS FOLLOWS:
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- --------------------------------------------------------------------------------
Bay View 100.00 92.38 142.16 215.31 374.26 226.92
Global-U.S. Index 100.00 100.73 138.69 170.63 228.57 294.05
S&L Index 100.00 86.98 144.39 180.30 313.81 296.19
- ----------
* The Company became a bank holding company and ceased to be a savings and loan
holding company upon the Bank's conversion from a federal savings bank to a
national bank on March 1, 1999.
14
<PAGE>
CERTAIN TRANSACTIONS
Set forth below is certain information as of December 31, 1998 as to loans
made by the Bank to any director or executive officer of the Company or the Bank
whose aggregate indebtedness to the Bank exceeded $60,000 at any time since
January 1, 1998.
<TABLE>
<CAPTION>
Largest Interest Rate
Aggregate Immediately
Amount Prior to
Outstanding Loan Balance Repayment of
Name Date of Loan Since 01/01/98 as of 12/31/98 Loan Balance
- ----------------------------------- ------------ -------------- -------------- -------------
<S> <C> <C> <C> <C>
Robert J. Flax..................... 08/26/86 $240,534 $0 5.86%
Executive Vice President, 03/15/88 24,704 0 6.68
General Counsel and Secretary
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file with the SEC reports of ownership and reports of changes in
ownership of common stock and other equity securities of the Company. Officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1998, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than 10% beneficial owners were met, except for the
inadvertent late reporting on Form 5 by Directors Krauss and McLin of a stock
option grant to each of them.
AUDITORS
On April 29, 1998, the Company decided to replace Deloitte & Touche LLP as
its independent auditors. The decision to replace Deloitte & Touche LLP was
approved by the Audit Committee of the Company's Board of Directors. The audit
reports of Deloitte & Touche LLP on the Company's consolidated financial
statements as of and for the years ended December 31, 1997 and 1996 did not
contain an adverse opinion or a disclaimer of opinion, nor were they qualified
or modified as to uncertainty, audit scope or accounting principles. In
connection with the audits for the fiscal years ended December 31, 1997 and 1996
and through April 29, 1998, there were no disagreements with Deloitte & Touche
LLP on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements, if not
resolved to their satisfaction, would have caused them to make reference to the
subject matter of the disagreements in connection with their opinion.
On May 12, 1998, the Company engaged KPMG LLP as its independent auditors
for the fiscal year ended December 31, 1998. The decision to engage KPMG LLP was
approved by the Audit Committee of the Company's Board of Directors. The Board
of Directors has appointed KPMG LLP to be the Company's auditors for the fiscal
year ending December 31, 1999. Representatives of KPMG LLP are expected to
attend the Meeting to respond to appropriate questions and make a statement if
they so desire.
15
<PAGE>
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the main office of the Company, 1840
Gateway Drive, San Mateo, California 94404, no later than December 29, 1999. Any
such proposals will be subject to the requirements of the proxy rules adopted
under the Exchange Act and, as with any stockholder proposal (regardless of
whether included in the Company's proxy materials), the Company's Certificate of
Incorporation and Bylaws and Delaware law. Under the proxy rules, in the event
the Company receives notice of a stockholder proposal to take action at the next
annual meeting that is not submitted for inclusion in the Company's proxy
materials, or is submitted for inclusion but is properly excluded from such
proxy materials, the persons named in the form of proxy sent by the Company to
its stockholders intend to exercise their discretion to vote on such proposal in
accordance with their best judgment if notice of the proposal is not received at
the administrative office of the Company by the Deadline (as defined below). The
Company's Bylaws provide that if notice of a stockholder proposal to take action
at the next annual meeting is not received at the main office of the Company by
the Deadline, such proposal will not be recognized as a matter proper for
submission to the Company's stockholders and will not be eligible for
presentation at the meeting. The "Deadline" means the date that is not less than
60 nor more than 90 days prior to the date of the next annual meeting; however,
in the event that less than 70 days notice or prior public disclosure (such as
the filing of a Current Report on Form 8-K with the SEC) of the date of the next
annual meeting is given or made to stockholders, the "Deadline" means the close
of business on the tenth day following the earlier of the day on which notice of
the meeting was first mailed or public announcement of the date of the meeting
was first made.
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of common stock. In addition to solicitation by mail,
directors and officers of the Company and regular employees of the Company and
its subsidiaries may solicit proxies personally or by telegraph or telephone,
without additional compensation. The Company has retained ChaseMellon
Shareholder Services, L.L.C. to assist in the solicitation of proxies, for a fee
estimated to be approximately $5,000 plus reasonable out-of-pocket expenses.
BY ORDER OF THE BOARD OF DIRECTORS
Robert J. Flax
Secretary
San Mateo, California
April 27, 1999
16
<PAGE>
BAY VIEW CAPITAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - MAY 27, 1999
The undersigned hereby appoints the Board of Directors of Bay View
Capital Corporation (the "Company"), with full powers of substitution, to act as
attorney and proxy for the undersigned to vote all shares of capital stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting") to be held at Bay View's main offices located at
1840 Gateway Drive, San Mateo, California, on May 27, 1999 at 1:00 p.m., local
time, and at any and all adjournments and postponements thereof, as indicated on
the reverse side.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy may be revoked at any time before it is voted by: (i) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than this proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Company at or before the Meeting; or (iii) attending the Meeting and
voting in person (although attendance at the Meeting will not in and of itself
constitute revocation of this proxy). If this proxy is properly revoked as
described above, then the power of the Board of Directors to act as attorney or
proxy for the undersigned shall be deemed terminated and of no further force and
effect.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES LISTED BELOW.
The election as directors of both nominees listed below (except as
marked to the contrary)
/_/ FOR /_/ VOTE WITHHELD /_/ FOR ALL EXCEPT
INSTRUCTION: TO VOTE FOR BOTH NOMINEES, MARK THE BOX "FOR" WITH AN "X." TO
WITHHOLD YOUR VOTE FOR BOTH NOMINEES, MARK THE BOX "VOTE WITHHELD" WITH AN "X."
TO WITHHOLD YOUR VOTE FOR ONE NOMINEE BUT NOT BOTH NOMINEES, MARK THE BOX "FOR
ALL EXCEPT" WITH AN "X" AND STRIKE A LINE THROUGH THE NAME OF THE NOMINEE BELOW
FOR WHOM YOU WISH TO WITHHOLD YOUR VOTE.
GEORGE H. KRAUSS JOHN R. McKEAN
In its discretion, the Board of Directors, as proxy for the
undersigned, is authorized to vote on any other business that may properly come
before the Meeting or any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR BOTH OF THE NOMINEES LISTED ABOVE. IF
ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED AS
DIRECTED BY A MAJORITY OF THE BOARD OF DIRECTORS IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED
AT THE MEETING.
The undersigned acknowledges receipt from the Company, prior to the execution of
this proxy, of notice of the Meeting, a Proxy Statement and an Annual Report to
Stockholders.
Dated: , 1999
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Signature of Stockholder
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Signature of Stockholder
Please sign exactly as your name(s) appear(s) to
the left. When signing as attorney, executor,
administrator, trustee or guardian, please give
your full title. If shares are held jointly, each
holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
