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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
NOTICE OF 2000 ANNUAL MEETING AND PROXY STATEMENT
[BAY VIEW CAPITAL LOGO]
March 31, 2000
Dear Stockholder:
On behalf of the Board of Directors and management of Bay View Capital
Corporation, I cordially invite you to attend our 2000 Annual Meeting of
Stockholders. The meeting will be held at 1:00 p.m., local time, on April 27,
2000 at our main offices, located at 1840 Gateway Drive, San Mateo, California
94404.
The purpose of the meeting is to elect three directors and to act upon any
other matters that properly come before the meeting or any adjournments or
postponements of the meeting.
I encourage you to attend the meeting in person. Whether or not you do so,
however, I hope that you will read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the postage
prepaid envelope provided. This will save us 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,
/s/ John R. McKean
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 APRIL 27, 2000
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Bay View Capital Corporation (the "Company") will be held at our
main offices, located at 1840 Gateway Drive, San Mateo, California 94404, on
April 27, 2000, at 1:00 p.m., local time.
A proxy card and a Proxy Statement for the Meeting are enclosed.
The purpose of the Meeting is to elect three directors and to act upon any
other matters that properly come before the Meeting or any adjournments or
postponements of the Meeting. 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 1, 2000
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 our main office 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
/s/ Douglas J. Wallis
DOUGLAS J. WALLIS
SECRETARY
San Mateo, California
March 31, 2000
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
April 27, 2000
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 our main offices, located at 1840
Gateway Drive, San Mateo, California, on April 27, 2000 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 March 31, 2000. Certain of the
information provided herein relates to Bay View Bank, N.A (the "Bank"), our
wholly owned subsidiary.
At the Meeting, stockholders are being asked to elect three directors and
consider and act upon any other matters that properly come before the Meeting
or any adjournments or postponements of the Meeting.
VOTING RIGHTS AND PROXY INFORMATION
All shares of our 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. We do 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 judgement.
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 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-voters") 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 judgement. 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 our Secretary
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 our Secretary 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 Douglas J. Wallis, General
Counsel and Secretary, Bay View Capital Corporation, 1840 Gateway Drive, San
Mateo, California 94404.
1
<PAGE>
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Record holders of common stock as of the close of business on March 1, 2000
will be entitled to one vote for each share then held. As of that date, the
Company had 32,562,942 shares of common stock issued and outstanding.
The following table sets forth, as of January 31, 2000, certain information
as to (i) those persons we knew 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) the shares
of common stock beneficially owned by 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
January 31, 2000
----------------------
Beneficial Owner No. of Shares Percent
---------------- ------------- -------
<S> <C> <C>
Southeastern Asset Management, Inc. ................... 6,660,030(1) 20.50%
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Wayne L. Knyal......................................... 3,237,422(2) 9.94
Edward H. Sondker...................................... 317,823(3) .98
David A. Heaberlin..................................... 225,966(3) .69
Matthew L. Carpenter................................... 38,005(3) .12
Scott H. Ray........................................... 7,000(3) .02
All director nominees, directors continuing in office
and executive officers
as a group (17 persons)............................... 4,375,459(3) 13.44
</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, 1999 on Amendment No. 5 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 889,883 shares, sole dispositive power as
to 1,145,683 shares and shared voting and dispositive powers as to
5,514,347 shares. Longleaf Realty reported sole voting and dispositive
powers as to no shares and shared voting and dispositive powers as to
2,399,647 shares. Longleaf Small-Cap reported sole voting and dispositive
powers as to no shares and shared voting and dispositive powers as to
3,114,700 shares. Mr. Hawkins, the Chairman of the Board and Chief
Executive Officer of Southeastern, may also be deemed to beneficially own
the 6,660,030 shares beneficially owned by Southeastern. Mr. Hawkins
disclaims beneficial ownership of all such shares.
(2) Shares are held by FLRT, Inc. a closely held company, 100% of which is
owned by Mr. Knyal and his immediate family.
(3) 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, Carpenter and Ray, and all director nominees, directors
continuing in office and executive officers as a group respectively,
292,000, 181,000, 37,250, 7,000 and 699,150 shares which are subject to
options currently exercisable or which will become exercisable within 60
days of January 31, 2000, 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"), 1998-2000 Performance Stock Plan, and
Amended and Restated 1989 Non-Employee Director Stock Option Plan (the
"1989 Stock Option Plan"). Also includes a total of 37,033 Stock Units
representing deferred director fees credited as of December 31, 1999 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
Three directors will be elected at the Meeting. Approximately one-third of
the directors are elected annually. Directors of the Company generally are
elected to serve for a three-year period or until their respective successors
have been elected and qualified. Mr. Knyal has agreed to stand for election to
serve a two-year term to balance the number of directors whose terms will
expire in 2002.
The table below sets forth certain information regarding each nominee for
election 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. Except as described below with respect to Mr. Knyal, 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
January 31, 2000
Term ----------------------
Director to No. of
Name Age Position(s) Held Since(1) Expire Shares(2)(3) Percent
- ---- --- ----------------------- -------- ------ ------------ -------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Paula R. Collins........ 50 Director 1993 2003 60,398 .19
Thomas M. Foster........ 57 Director 1993 2003 69,897 .21
Wayne L. Knyal.......... 53 Director 1999 2002 3,237,422(4) 9.94
DIRECTORS CONTINUING IN OFFICE
Robert M. Greber........ 62 Director 1996 2001 30,439 .09
Edward H. Sondker....... 52 Director, President and 1995 2001 317,823 .98
Chief Executive Officer
W. Blake Winchell....... 47 Director 1996 2001 34,791 .11
George H. Krauss........ 58 Director 1998 2002 46,611 .15
John R. McKean.......... 69 Chairman of the Board 1984 2002 154,154 .47
</TABLE>
- --------
(1) Includes service as a director of Bay View Bank, N.A., our wholly owned
subsidiary.
(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
Collins, Foster, Greber, Winchell, Krauss and McKean, respectively,
56,000, 62,000, 25,000, 25,000, 12,000, and 73,000 shares which are
subject to stock options currently exercisable or which will become
exercisable within 60 days of January 31, 2000, granted under the 1989
Stock Option Plan. Includes for Director Sondker 292,000 shares which are
subject to stock options currently exercisable or which will become
exercisable within 60 days of January 31, 2000, granted under the 1995
Stock Option Plan.
(3) Of the shares listed for Directors Collins, Foster, Greber, Winchell,
Krauss, and McKean, 4,198, 3,897, 5,439, 5,291, 3,055, and 15,154 consist
of Stock Units representing deferred director fees credited as of December
31, 1999 to the respective Stock Unit Account of each director established
under the Stock in Lieu of Cash Plan.
(4) Shares are held by FLRT, Inc. a closely held company, 100% of which is
owned by Mr. Knyal and his immediate family.
3
<PAGE>
The business experience of each of the above directors for at least the
past five years is as follows:
Ms. Collins is a principal of The WDG Companies, San Francisco, California,
a real estate development firm she founded in 1982, and Chief Executive
Officer of WDG Ventures, Inc., a subsidiary of The WDG Companies.
Mr. Foster is an independent financial consultant with over 20 years of
banking and financial experience. Mr. Foster was the President of Aircraft
Technical Publishers, Brisbane, California, an aircraft maintenance library
services company, from February 1989 until August 1992.
Mr. Knyal became President of Bay View Franchise Mortgage Acceptance
Company ("BVFMAC") upon the merger of Franchise Mortgage Acceptance Company
("FMAC") with the Company on November 1, 1999. Mr. Knyal was President and
Chief Executive Officer of FMAC from the founding of FMAC's predecessor in
1991 until FMAC's merger with the Company. Pursuant to the agreement providing
for the merger of FMAC with the Company, Mr. Knyal was appointed to the Board
of Directors on November 1, 1999 and nominated for re-election at the Meeting.
Mr. Greber served as Chairman of the Board and Chief Executive Officer of
the Pacific Exchange from 1995 until his retirement in 1999. 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 since August 1995. Previously, he was President and Chief Executive
Officer of Independence One Bank of California from October 1990 until June
1995.
Mr. Winchell is General Partner of Fremont Ventures, LLC, a venture
investment group since 1998. From 1996 until 1998, he was the Managing
Director of Generation Ventures, LLC, a venture investment group. In 1996, Mr.
Winchell served as Chief Executive Officer of Kleer-Vu Industries and
previously he was a General Partner of the Channel Investment Group.
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.
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND COMPENSATION
MEETINGS. Meetings of the Company's Board of Directors are generally held
quarterly. The Board of Directors of the Company held nine meetings during the
fiscal year ended December 31, 1999. During 1999, no incumbent director of the
Company attended fewer than 75% of the total number of meetings held by the
Company's Board of Directors while he or she was a director and by all
committees of the Board of Directors of the Company on which he or she served
during the period that he or she was a member.
FEES. Prior to April 1, 1999, directors' fees were paid to non-employee
directors, other than the Chairman of the Board, as follows: a retainer of
$1,800 per month; a fee of $1,000 per Board meeting attended, or $500 in the
case of telephonic meetings attended; a fee of $750 per committee meeting
attended, or $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. Directors Collins,
Foster, and McKean also served as directors of the Bank and, except for Mr.
McKean, received the same fees for attending meetings of the Bank's Board.
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.
Mr. McKean, the Chairman of the Board, was paid a director's retainer of
$1,800 per month, plus a Chairman's retainer of $5,000 per month and a fee of
4
<PAGE>
$3,000 per month for all meetings of the Company's Board and of the Bank's
Board that he attended, except when the meetings were held on the same day, in
which case only one fee was paid.
Effective April 1, 1999, the directors' fees for non-employee directors,
other than the Chairman of the Board, were changed as follows: a monthly
retainer of $2,000 if the person is a director of the Company but not the
Bank, 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, or $1,000 in
the case of telephonic meetings attended; and a fee of $1,000 per committee
meeting attended, or $500 in the case of telephonic meetings attended, plus
$400 per 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. Directors
Collins and Foster receive the same new attendance fees for attending meetings
of the Bank's Board of Directors. The Chairman of the Board's fees have
remained the same, except that his director's retainer increased from $1,800
per month to $2,500 per month and he receives $1,500 per Board meeting
attended, or $1,000 in the case of telephonic meetings attended. He also
receives $1,000 per Company or Bank Committee meeting attended, or $500 in the
case of telephonic committee meetings attended. 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 29, 1999, options to purchase 4,000 shares
of the Company's common stock at an exercise price of $18.50 per share were
granted to each of Directors Collins and Foster. Options to purchase 5,000
shares of the Company's common stock at the exercise price of $18.50 were
granted to each of Directors Greber, Winchell, Krauss, and McKean. The options
became exercisable in full on July 29, 1999 and will expire on January 29,
2009.
Information regarding stock options granted to Director Sondker, the
President and Chief Executive Officer of the Company, and to Director Knyal,
the President of BVFMAC, 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 McKean, Collins and Foster are
eligible participants in the Retirement
5
<PAGE>
Plan. Pursuant to the Retirement Plan, the present values 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 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.
COMMITTEES. Set forth below is information regarding the Audit,
Compensation and Benefits and Nominating Committees. There is also 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 nine meetings
during 1999.
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 1999.
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 did not meet during 1999. 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 indicated of the Chief
Executive Officer of the Company and the four other most highly compensated
executive officers of the Company during fiscal 1999 (the "named officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------- ------------------------------
Awards Payouts
--------------------- --------
Annual Compensation Restricted Shares LTIP
---------------------- Stock Underlying Payouts All Other
Name and Principal Position Year Salary Bonus Award(s) Options(1) ($) Compensation
- --------------------------- ---- -------- -------- ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Edward H. Sondker.......... 1999 $412,500 $255,000 -- 40,000 -- $11,938(2)
President and Chief 1998 375,000 100,000 -- 50,000 -- 20,045(2)
Executive Officer 1997 300,000 150,000 -- 30,000 $702,881 18,339(2)
David A. Heaberlin......... 1999 $315,000 $165,000 -- 30,000 -- $12,315(3)
Executive Vice President 1998 287,500 75,000 -- 30,000 -- 16,108(3)
and President, Bay View Bank 1997 230,833 117,500 -- 30,000 $372,862 13,277(3)
Matthew L. Carpenter(4).... 1999 $177,083 $116,781 -- 5,000 -- $18,949(5)
President and Chief 1998 153,750 82,688 -- 7,500 -- 25,115(5)
Executive Officer, Bay View 1997 118,750 30,000 -- 30,000 -- 10,532(5)
Commercial Finance Group
Scott H. Ray(6)............ 1999 $185,000 $ 76,000 -- 10,000 -- $59,549(7)
Exececutice Vice President 1998 142,500 36,000 -- 30,000 -- 27,861(7)
and Chief Financial Officer
Wayne L. Knyal............. 1999 $ 66,667 $682,000(8) -- 75,000 -- $ 5,200(9)
President, Bay View
Franchise Mortgage
Acceptance Company
</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) 1999: matching contribution to Mr. Sondker's account in the Bank's
401(k)Plan, $7,200; life insurance premium, $2,592; split dollar life
insurance premium, $2,145; cancellation of 30,000 options in November,
1999 in exchange for $1. The value of the allocation to Mr. Sondker's
Employee Stock Ownership Plan("ESOP") account for 1999 is not yet
available.
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; allocation to Mr.
Sondker's account in the Company's ESOP, $9,858.
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 ESOP,
$5,839.
(3) 1999: matching contribution to Mr. Heaberlin's account in the Bank's
401(k) Plan, $7,200; life insurance premium, $2,592; split dollar life
insurance premium, $1,491; executive physical, $1,032. The value of the
allocation to Mr. Heaberlin's ESOP account for 1999 is not yet available.
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; allocation to Mr. Heaberlin's account in the ESOP, $9,858.
7
<PAGE>
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.
(4) 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).
(5) 1999: matching contribution to Mr. Carpenter's account in the Bank's
401(k) Plan, $9,600; life insurance premium, $1,814; automobile allowance,
$6,000; executive physical $1,535. The value of the allocation to Mr.
Carpenter's ESOP account for 1999 is not yet available.
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;
allocation to Mr. Carpenter's account in the ESOP, $9,858.
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.
(6) Mr. Ray joined the Company on March 16, 1998.
(7) 1999: matching contribution to Mr. Ray's account in the Bank's 401(k)
Plan, $2,875; life insurance premium, $2,074; cancellation of 20,000
options in exchange for $54,600.
1998: Sign-on bonus, $27,634; life insurance premium $227.
(8) Mr. Knyal joined the Company on November 1, 1999. Pursuant to his
employment contract, he was paid a $682,000 bonus for 1999.
(9) 1999: car allowance, $2,000; matching contribution to Mr. Knyal's 401K
account $3,200.
The following table sets forth certain information concerning grants of
stock options pursuant to the 1995 Stock Option Plan to the named officers in
1999. No stock appreciation rights ("SARs") were granted in 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------
Potential Realizable
% of Total Value At Assumed
Number of Options Annual Rates of Stock
Shares Granted to Per Price Appreciation
Underlying Employees Share for Option Term
Options in Fiscal Exercise Expiration ---------------------
Granted Year Price Date 5% 10%
---------- ---------- -------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Sondker....... 40,000(1) 3.30% $18.8125 6/29/09 $ 473,243 $ 1,199,292
28,000(2) 1.50 19.5313 6/30/04 151,092 333,877
David A. Heaberlin...... 30,000(1) 2.47 18.8125 6/29/09 354,932 899,469
20,000(2) 1.50 19.5313 6/30/04 107,923 238,481
Matthew L. Carpenter.... 3,500(3) 0.29 18.8125 6/29/09 41,409 104,938
1,500(4) 0.12 18.8125 6/29/09 17,747 44,973
5,000(2) 0.41 19.5313 6/30/04 26,981 59,620
Scott H. Ray............ 10,000(1) 0.82 18.8125 6/29/09 118,311 299,823
4,000(2) 0.33 19.5313 6/30/04 21,585 47,696
Wayne L. Knyal.......... 75,000(5) 5.98 13.8750 11/1/09 654,443 1,658,488
</TABLE>
- --------
(1) The vesting schedule of the option is as follows: 30% on June 29, 2000,
30% on June 29, 2001 and 40% on June 29, 2002.
(2) The option was granted on June 30, 1999 pursuant to the Company's 1998-
2000 Performance Stock Plan (the "Performance Stock Plan") based upon
Company performance and vested December 31, 1999 in accordance with the
terms of the plan.
8
<PAGE>
(3) The vesting schedule of the option is as follows: 1,500 on June 29, 2001,
and 2,000 on June 29, 2002
(4) The option will fully vest on June 29, 2000.
(5) The vesting schedule of the option is as follows: 30% on November 1,
2000, 30% on November 1, 2001 and 40% on November 1, 2002.
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, 1999 held by the named officers. None of the
named officers held any SARs at December 31, 1999 or exercised any SARs during
1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at FY-End FY-End ($)(1)
Acquired Value ------------------------- -------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward H.
Sondker........ -- -- 292,000 66,000 $ 0 $ 0
David A.
Heaberlin...... -- -- 181,000 49,000 0 0
Matthew L.
Carpenter...... -- -- 37,250 10,250 0 0
Scott H. Ray.... -- -- 7,000 17,000 0 0
Wayne L. Knyal.. -- -- 0 75,000 -- 0
</TABLE>
- --------
(1) All option exercise prices exceeded the fair market value of $14.1875 of
the underlying shares at December 31, 1999.
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 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 REMAINING
<TABLE>
<CAPTION>
Performance or Other
Number of Shares, Period Until
Name Units or Other Rights Maturation or Payout
---- --------------------- --------------------
<S> <C> <C>
Edward H. Sondker................. 56,000(1) 1998-2000
56,000(2) 1998-2000
David A. Heaberlin................ 40,000(3) 1998-2000
40,000(4) 1998-2000
Matthew L. Carpenter.............. 10,000(5) 1998-2000
10,000(6) 1998-2000
Scott H. Ray...................... 8,000(7) 1998-2000
8,000(8) 1998-2000
</TABLE>
- --------
(1) Represents up to 56,000 phantom stock units and stock options to purchase
up to 56,000 shares of Company common stock which will be awarded to Mr.
Sondker under the Performance Stock Plan if the Company meets certain
performance criteria.
(2) Represents up to 56,000 phantom stock units which will be awarded to Mr.
Sondker under the Supplemental Plan if the Company meets certain
performance criteria.
9
<PAGE>
(3) Represents up to 40,000 phantom stock units and stock options to purchase
up to 40,000 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 40,000 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 10,000 phantom stock units and stock options to purchase
up to 10,000 shares of Company common stock which will be awarded to Mr.
Carpenter under the Performance Stock Plan if the Company meets certain
performance criteria.
(6) Represents up to 10,000 phantom stock units which will be awarded to Mr.
Carpenter under the Supplemental Plan if the Company meets certain
performance criteria.
(7) Represents up to 8,000 phantom stock units and stock options to purchase
up to 8,000 shares of Company common stock which will be awarded to Mr.
Ray under the Performance Stock Plan if the Company meets certain
performance criteria.
(8) Represents up to 8,000 phantom stock units which will be awarded to Mr.
Ray under the Supplemental Plan if the Company meets certain performance
criteria.
EMPLOYMENT CONTRACTS
The Company has employment agreements with each of Messrs. Sondker,
Heaberlin, Carpenter and Ray. 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 $ 425,000 per annum; Mr. Heaberlin $ 330,000 per
annum; Mr. Carpenter $ 185,000 per annum; and Mr. Ray $ 190,000 per annum. The
agreements provide for base salary review on July 1 of each year. The Company
also has an employment agreement with Mr. Knyal with an initial term expiring
December 31, 2002, which provides for payment of a base salary of $400,000 per
annum and a minimum annual bonus of $82,000 per year for 1999, 2000, and 2001
to be credited to the payment of Mr. Knyal's promissory note owed to the
Company (outstanding balance $242,000 at December 31, 1999. See "Certain
Transactions". The agreement also provides for a guaranteed additional bonus
of $600,000 for 1999, and a target bonus of $600,000 for subsequent years
during the term of the agreement. All of the contracts provide that salary
increases are not guaranteed or automatic. The contracts also provide for
participation in an equitable manner in employee benefits applicable to
executive personnel.
In the event of termination by the Company without cause, other than within
24 months after a change in control of the Company, Messers. Sondker,
Heaberlin, Carpenter, and Ray would be entitled to receive a lump sum
severance payment of 18 months' salary, and Mr. Knyal would be entitled to
receive a severance payment of 18 months' salary plus his target bonus of
$600,000. 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 plus target bonus.
10
<PAGE>
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 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 at the market median. 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 1999, 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 1999, such that base salaries were generally set at market
consensus levels 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 (3) 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 1999 Annual Senior Management Incentive Plan (the "1999 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 becoming eligible 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 1999 Plan resulted in a maximum
payment of 100% of target bonus award levels to Company officers. Production
subsidiary units, such as Bay View Commercial Finance Group, were required to
meet performance targets based on production levels, asset quality and expense
control, and such goals were met. Consequently, the named officers were
entitled to payments under the 1999 Plan as follows: Edward Sondker, $255,000;
David Heaberlin, $165,000; Matthew Carpenter, $116,781; and Scott Ray,
$76,000. The bonus payments to the named officers under the 1999 Plan totaled
$612,781. Mr. Knyal was entitled to a bonus of $682,000 for 1999 under the
terms of his employment agreement.
11
<PAGE>
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 stockholders' 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 stockholders while
providing the participants with the opportunity to earn rewards commensurate
with performance and the creation of stockholder 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) 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, the "base
price") 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 who participate in the Performance Stock Plan upon achievement of all
criteria in each tranche are 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; Scott Ray, 4,000 PSUs and 4,000 options
per tranche from the Performance Stock Plan and 4,000 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. On June 30, 1999, the performance criteria of the first
tranche were achieved, resulting in the grant of stock options to the
following named officers in accordance with the terms of the Plan: Mr. Sondker
28,000; Mr. Heaberlin 20,000; Mr. Ray 4,000; Mr. Carpenter 5,000. The options
vested on December 30, 1999. There was no cash payment resulting from the
PSU's because the stock price at June 30, 1999 was below the $21.00 base
price.
The Committee considers the grant of stock options to executive officers to
be an important component of long-term compensation. In 1999, options were
granted to the named executive officers other than pursuant to the Performance
Stock Plan as follows: Mr. Sondker, 40,000 shares; Mr. Heaberlin, 30,000
shares; Mr. Ray, 10,000 shares; and Mr. Carpenter, 5,000 shares. The grants
were based on the Committee's recognition of the exceptional performance of
the named individuals, their leadership skills and their ability to affect the
results of the Company, and most importantly, the importance of retaining the
named individuals because of their impact on the future success of the
Company.
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.
12
<PAGE>
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
$425,000 effective July 1, 1999, as a result of recommendations made by SCA
and in accordance with the Committee's philosophy of setting base salary at
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 60% of annual base salary based upon achievement of
agreed-upon 1999 performance goals; (3) long-term compensation consisting of
options to purchase 358,000 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, 2000, 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
$255,000, which represented 60% of his base salary as of December 31, 1999,
for achieving corporate and individual performance goals in accordance with
the terms of the 1999 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.
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, Dow Jones Savings and Loan Index*, and Dow Jones Bank Index
for the period December 31, 1994 through December 31, 1999. The graph assumes
that $100 was invested on December 31, 1994 and that all dividends were
reinvested.
[GRAPHIC: LINE GRAPH PLOTTED AS FOLLOWS:]
CUMULATIVE TOTAL RETURN
BAY VIEW CAPITAL CORPORATION, DOW JONES GLOBAL-U.S. INDEX, DOW JONES
SAVINGS AND LOAN INDEX AND DOW JONES BANKS U.S. (ALL) INDEX
<TABLE>
<CAPTION>
12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Bay View 100 153.94 233.16 405.26 245.72 164.42
Global-U.S. Index 100 137.67 169.39 226.91 291.91 351.37
S&L Index 100 166.01 207.28 360.78 340.53 254.56
Dow Jones Banks U.S. (All) Index 100 160.45 226.60 337.32 365.16 321.46
</TABLE>
- -------
* 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
We do not make loans to directors and executive officers. At December 31,
1999, there was a promissory note with an outstanding principal balance of
$242,000 owed by Mr. Knyal to the Company. The original principal balance of
the loan was $410,000 and the balance as of the date of this proxy is
approximately $160,000. The loan will be fully repaid in 2002 pursuant to the
terms of Mr. Knyal's employment agreement, described above. The loan was made
to facilitate an FMAC corporate restructuring in 1995. The interest rate on
the loan was established at the time it was made at a market rate.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our directors and executive officers, and persons
who own more than 10% of a registered class of our 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 us
with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representations that no other reports were
required, during the fiscal year ended December 31, 1999, all Section 16(a)
filing requirements applicable to our officers, directors and greater than 10%
beneficial owners were met.
AUDITORS
On April 29, 1998, we decided to replace Deloitte & Touche LLP as our
independent auditors. The decision to replace Deloitte & Touche LLP was
approved by the Audit Committee of the Board of Directors. The audit reports
of Deloitte & Touche LLP on our 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, we engaged KPMG LLP as our independent auditors for the
fiscal year ended December 31, 1998. The decision to engage KPMG LLP was
approved by the Audit Committee of the Board of Directors. The Board of
Directors appointed KPMG LLP to be our auditors for the fiscal year ending
December 31, 1999 and has continued their engagement for the fiscal year
ending December 31, 2000. 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 our proxy materials for next year's
Annual Meeting of Stockholders, any stockholder proposal to take action at that
meeting must be received at our main office, 1840 Gateway Drive, San Mateo,
California 94404, no later than November 27, 2000. 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 our
proxy materials), our Certificate of Incorporation and Bylaws and Delaware law.
Under the proxy rules, in the event we receive notice of a stockholder proposal
to take action at the next annual meeting that is not submitted for inclusion
in the our proxy materials, or is submitted for inclusion but is properly
excluded from our proxy materials, the persons named in the form of proxy sent
by us to our 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 our administrative office by the Deadline (as defined below).
Our Bylaws provide that if notice of a stockholder proposal to take action at
the next annual meeting is not received at our main office by the Deadline,
such proposal will not be recognized as a matter proper for submission to our
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. We have 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
/s/ Douglas J. Wallis
Douglas J. Wallis
Secretary
San Mateo, California
March 31, 2000
16
<PAGE>
BAY VIEW CAPITAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
April 27, 2000
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 April 27, 2000 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)
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Please mark
[X] your votes
as this
The Board of Directors recommends a vote "FOR" the election of the
nominees listed below.
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<S> <C> <C>
The election as directors of all three nominees VOTE FOR ALL In its discretion, the Board of Directors,
listed below (except as marked to the contrary) FOR WITHHELD EXCEPT as proxy for the undersigned, is authorized
[_] [_] [_] to vote on any other business that may
INSTRUCTION: To vote for all nominees, mark the box properly come before the Meeting or any
"FOR" with an "X." To withhold your vote for all adjournment or postponement thereof.
nominees, mark the box "VOTE WITHHELD" with an "X."
To withhold your vote for one or more nominees but The undersigned acknowledges receipt from
not all nominees, mark the box "FOR ALL EXCEPT" with the Company, prior to the execution of this
an "X" and strike a line through the name(s) of the proxy, of notice of the Meeting, a Proxy
nominee(s) below for whom you wish to withhold your Statement and an Annual Re-port to
vote. Stockholders.
PAULA R. COLLINS, THOMAS M. FOSTER Dated: ______________________________ , 2000
WAYNE L. KNYAL
Signature of Stockholder ___________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR ALL OF THE NOMINEES LISTED ABOVE. IF ANY OTHER Signature of Stockholder ___________________
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, Please sign exactly as your name(s)
THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE appear(s) to the left. When signing as
MEETING. attorney, executor, administrator, trustee
or guardian, please give your full title.
If shares are held jointly, each holder
should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
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