UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 7, 2005
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Bay National Corporation
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(Exact Name of Registrant as Specified in its Charter)
Maryland 333-87781 52-2176710
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(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
2328 West Joppa Road
Lutherville, Maryland 21093
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(Address of Principal Executive Offices)(Zip Code)
Registrant's Telephone Number, Including Area Code: 410/494-2580
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N/A
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENTS
On March 7, 2005, pursuant to a lease amendment with its landlord,
Joppa Green II Limited Partnership, LLLP (the "Landlord"), Bay National
Corporation agreed, beginning September 1, 2005, to lease 2,355 additional
square feet of space on the first floor of the building which houses Bay
National Corporation's and Bay National Bank's Baltimore operations. The
building (the "Building") is located at 2328 West Joppa Road, Lutherville,
Maryland 21093. Bay National Corporation intends to use this additional space
for the Baltimore residential mortgage operation of its banking subsidiary Bay
National Bank.
Pursuant to the March 7, 2005 lease amendment, Bay National Corporation
also agreed, beginning September 1, 2005 to February 28, 2006, to pay monthly
rent of $28,257.96 (based on an annual rent of $339,095.52) for all of the
leased space in the Building. For each lease year thereafter, including any
lease years during any renewal term, the yearly rent will increase by three
percent. The rent includes Bay National Corporation's share of taxes and
building operating costs.
On March 1, 2005, pursuant to a lease amendment with the Landlord dated
January 3, 2005, Bay National Corporation began leasing 1,429 square feet of
additional space in the basement of the Building for the Baltimore residential
mortgage operation of Bay National Bank. Bay National Bank intends to move the
mortgage operation employees from the basement to the additional first floor
space in September 2005. Once the mortgage operation moves, Bay National
Corporation and Bay National Bank will likely use the basement space for
administrative purposes. Pursuant to the January 3, 2005 lease amendment, Bay
National Corporation also agreed, beginning with the March 2005 to February 2006
lease year, to pay rent of $269,119.12 per year or $22,433.26 per month for all
of the leased space in the Building. For each lease year thereafter, including
any lease years during any renewal term, the yearly base rent will increase by
three percent. The rent includes Bay National Corporation's share of taxes and
building operating costs. This rental amount will increase in September 2005 as
described above.
Bay National Corporation and the Landlord are parties to two leases for
space in the Building, both dated July 16, 1999. One lease initially was for
space on the first floor of the building and the other was for space on the
third floor of the building. The January 3, 2005 lease amendment, as well as
previous lease amendments dated February 12, 2004 and October 5, 2004, as
further described below, effectively combine both leases. As of March 1, 2005,
Bay National Corporation is leasing a total of 9,347 square feet in the Building
and as of September 1, 2005, Bay National Corporation will lease a total of
11,702 square feet in the Building. The first floor space is used for Bay
National Bank's Baltimore branch office. The third floor space is used for Bay
National Corporation and Bay National Bank's administrative offices.
Pursuant to the February 12, 2004 lease amendment, Bay National
Corporation agreed, effective as of March 1, 2004, to lease an additional 840
square feet of space on the third floor of the Building. This was in addition to
the then existing 5,130 square feet that Bay National Corporation leases on the
third floor.
Pursuant to the October 5, 2004 lease amendment, Bay National
Corporation agreed, effective November 1, 2004, to leases an additional 765
square feet of space on the first floor and 236 square feet of space on the
third floor, to extend the lease term under its leases to February 28, 2010 and
to increase the aggregate rent owed under the leases. Bay National Corporation
was also provided the right to renew the leases for one additional five year
term. As part of this amendment, the aggregate rent due under the leases
increased to $19,425 monthly, for November 2004 through February 2005, and
$20,032.54 monthly (based on annual rent of $240,390.48) for the lease year
commencing March 2005 to February 2006. For each lease year thereafter,
including any lease years during any renewal term, the yearly base rent was
scheduled to increase by three percent. As indicated above, the aggregate rent
under the leases was further increased as part of the January 3, 2005, and March
7, 2005 lease amendments.
The Landlord, Joppa Green II Limited Partnership, LLLP, is beneficially
owned by the MacKenzie Companies. Gary T. Gill, who has been a director of Bay
National Corporation and Bay National Bank since January 2003, is the president
and chief executive officer of the MacKenzie Companies.
Copies of the February 12, 2004, October 5, 2004, January 3, 2005, and
March 7, 2005 lease amendments are attached hereto and incorporated by reference
herein as Exhibits 10.1, 10.2, 10.3 and 10.4 to this Form 8-K.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
10.1 Amendment to Lease Agreement dated February 12, 2004
10.2 Amendment to Lease Agreement dated October 5, 2004
10.3 Amendment to Lease Agreement dated January 3, 2005
10.4 Amendment to Lease Agreement dated March 7, 2005
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BAY NATIONAL CORPORATION
Date: March 10, 2005 By: /s/ Hugh W. Mohler
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Hugh W. Mohler, President
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EXHIBIT INDEX
10.1 Amendment to Lease Agreement dated February 12, 2004
10.2 Amendment to Lease Agreement dated October 5, 2004
10.3 Amendment to Lease Agreement dated January 3, 2005
10.4 Amendment to Lease Agreement dated March 7, 2005