11-K 1 0001.txt ANNUAL REPORT ON FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________ Form 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the fiscal year ended December 31, 1999 or [ ] TRANSACTION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the transaction period from __________ TO ___________. Commission file number 0-25034 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: GREATER BAY BANCORP 401(k) PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: GREATER BAY BANCORP 2860 WEST BAYSHORE ROAD PALO ALTO, CALIFORNIA 94303 INTRODUCTION Greater Bay Bancorp has established the Greater Bay Bancorp 401(k) Plan (the "Plan"). The Plan is a profit sharing plan with a cash or deferred arrangement intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended. The Plan was registered on Registration Statements on Form S-8 filed with the Securities and Exchange Commission on July 8, 1997 (File No. 333-30913) and November 20, 1998 (File No. 333-67677). REQUIRED INFORMATION 1. Financial Statements and Schedules. Report of Independent Accountants Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 Statement of Changes in Net Assets Available for Benefits with Fund Information for the year ended December 31, 1999 Notes to Financial Statements Supplemental Schedules: Item 4i - Schedule of Assets Held for Investment Purposes as of December 31, 1999 Item 4j - Schedule of Reportable Transactions for the year ended December 31, 1999 2. Exhibits. 23.1 Consent of PricewaterhouseCoopers LLP Greater Bay Bancorp 401(k) Plan Financial Statements and Supplemental Schedules December 31, 1999 Report of Independent Accountants To the Trustee of the Greater Bay Bancorp 401(k) Plan In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits with fund information present fairly, in all material respects, the net assets available for benefits of the Greater Bay Bancorp 401(k) Plan (the "Plan") as of December 31, 1999 and 1998, and the changes in net assets available for benefits for the year ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the changes in net assets available for benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/PricewaterhouseCoopers LLP San Francisco, California June 19, 2000 Greater Bay Bancorp 401(k) Plan Statements of Net Assets Available for Benefits As of December 31, 1999 and 1998 --------------------------------------------------------------------------------
1999 1998 Assets Cash $ - $ - Investments, at fair market value: Shares of money market funds: Greater Bay Trust Floating Rate Fund 812,287 518,247 Shares of registered investment companies: Vanguard Total Bond Index Fund 570,834 326,356 Vanguard Institutional Index Fund 2,900,153 1,592,203 T. Rowe Price International Stock Fund 501,141 332,175 Greater Bay Trust Tactical Asset Allocation Program 5,838,227 4,189,080 Greater Bay Bancorp Common Stock 6,046,512 4,153,916 Participant Loans Receivable 415,447 267,890 ----------- ----------- Total investments 17,084,601 11,379,867 ----------- ----------- Receivables Employer contributions 257,843 190,833 Participant contributions 67,617 62,139 Accrued interest and dividends 43,229 29,462 ----------- ----------- Total receivables 368,689 282,434 ----------- ----------- Total assets 17,453,290 11,662,301 ----------- ----------- Liabilities Total liabilities - - ----------- ----------- Net assets available for benefits $17,453,290 $11,662,301 =========== ===========
The accompanying notes are an integral part of these financial statements. 2 Greater Bay Bancorp 401(k) Plan Statement of Changes in Net Assets Available for Benefits with Fund Information For the year ended December 31, 1999 -------------------------------------------------------------------------------
Greater Bay T. Rowe Trust Greater Bay Greater Bay Vanguard Vanguard Price Tactical Asset Bancorp Trust Floating Total Bond Institutional International Allocation Common Rate Fund Index Fund Index Fund Stock Fund Program Stock Additions to net assets attributed to: Investment income: Interest $ 30,092 $ - $ - $ - $ - $ - Dividends - 29,202 46,094 25,643 170,431 56,147 Net appreciation (depreciation) in the fair value of investments - (31,023) 374,955 93,851 338,345 1,352,563 Contributions: Employer 50,443 47,111 206,364 27,188 285,539 277,610 Participant 68,362 102,682 487,614 63,980 569,429 594,082 Rollover 217,075 14,007 202,320 14,877 153,345 106,338 Realized gains (losses) - (858) 15,151 2,641 114,161 (448) --------- --------- ------------ --------- ----------- ----------- Total additions 365,972 161,121 1,332,498 228,180 1,631,250 2,386,292 Deductions from net assets attributed to: Benefit payments and distributions 75,057 7,582 51,663 24,640 187,924 83,270 --------- --------- ------------ --------- ----------- ----------- Total deductions 75,057 7,582 51,663 24,640 187,924 83,270 --------- --------- ------------ --------- ----------- ----------- Transfers in (out) 3,125 90,939 27,115 (34,574) 205,821 (410,426) --------- --------- ------------ --------- ----------- ----------- Net increase 294,040 244,478 1,307,950 168,966 1,649,147 1,892,596 --------- --------- ------------ --------- ----------- ----------- Balance at beginning of year 518,247 326,356 1,592,203 332,175 4,189,080 4,153,916 --------- --------- ------------ --------- ----------- ----------- Balance at end of year $ 812,287 $ 570,834 $ 2,900,153 $ 501,141 $ 5,838,227 $ 6,046,512 ========= ========= ============ ========= =========== =========== Participant Notes Receivable Other, Net Total Additions to net assets attributed to: Investments income: Interest $ 29,557 $ - $ 59,649 Dividends - 13,766 341,283 Net appreciation (depreciation) in the fair value of investments - - 2,128,691 Contributions: Employer - 67,009 961,264 Participant - 5,480 1,891,629 Rollover - - 707,962 Realized gains (losses) - - 130,647 --------- --------- ------------ Total additions 29,557 86,255 6,221,125 Deductions from net assets attributed to: Benefit payments and distributions - - 430,136 --------- --------- ------------ Total deductions - - 430,136 --------- --------- ------------ Transfers in (out) 118,000 - - --------- --------- ------------ Net increase 147,557 86,255 5,790,989 --------- --------- ------------ Balance at beginning of year 267,890 282,434 11,662,301 --------- --------- ------------ Balance at end of year $ 415,447 $ 368,689 $17,453,290 ========= ========= ============
The accompanying notes are an integral part of these financial statements. 3 Greater Bay Bancorp 401(k) Plan Notes to Financial Statements ________________________________________________________________________________ 1. Plan Description On November 27, 1996, Cupertino National Bancorp (Cupertino) merged with Mid-Peninsula Bancorp (Mid-Peninsula). The merged organization was renamed Greater Bay Bancorp (GBB). The Board of Directors of GBB concurrently approved the merger of the Mid-Peninsula 401(k) Plan into the Cupertino 401(k) Plan and renamed the plan as the Greater Bay Bancorp 401(k) Plan (the Plan), effective December 31, 1996. On December 23, 1997, May 8, 1998, May 21, 1999 and October 15, 1999, GBB completed its mergers with Peninsula Bank of Commerce (PBC), Golden Gate Bank (GGB), Bay Area Bank (BAB), and Bay Bank of Commerce (BBC), respectively. The 401(k) plans of PBC, GGB, BAB, and BBC were not merged with the Plan as of December 31, 1999. As such, the accompanying financial statements of the Plan do not include any information as to the PBC, GGB, BAB, and BBC Plans. The PBC plan was frozen upon the date of merger and the GGB, BAB, and BBC Plans were terminated the day before the merger, and the merged employees of PBC, GGB, BAB, and BBC became participants of the plan. The assets of the PBC Plan may be merged with the assets of the Plan once GBB has ensured that all operational and/or form defects of the PBC Plan have been corrected and approved by the Internal Revenue Service (IRS) under one of the IRS Remedial Programs. GGB, BAB, and BBC will distribute benefits to participants of their respective plans upon the receipt of favorable determination letters from the IRS on the qualification of the terminated Plans. At that time, GBB, BAB, and BBC will permit rollovers from their respective plans into the Plan at the participant's election. The following description of the Plan is provided for general information purposes only. Participants of the Plan should refer to the Plan document for a more comprehensive description of the Plan's provisions. General The Plan is a defined contribution plan covering all employees of GBB and its subsidiaries who are 21 years of age or older. As of December 31, 1999, the subsidiaries consisted of Cupertino National Bank, Mid-Peninsula Bank, Peninsula Bank of Commerce, Golden Gate Bank, Bay Area Bank, and Bay Bank of Commerce (collectively, the Subsidiaries). GBB and the Subsidiaries are herein collectively referred to as "the Company." The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). All of the Plan's assets are held by the Greater Bay Trust Company (the Trustee), a division of Cupertino National Bank. Contributions Each year, participants may contribute up to 15% of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. The Company makes a matching contribution to the Plan on behalf of each participant who elects to contribute to the Plan, in an amount equal to 62.5% of the first 8% of the eligible compensation that such a participant elects to contribute to the Plan. Additional Company contributions may be made at the discretion of GBB. The allocation of qualified nonelective contributions is made only to the accounts of non- highly compensated participants. 4 Greater Bay Bancorp 401(k) Plan Notes to Financial Statements ________________________________________________________________________________ Participant accounts Individual accounts are maintained for each Plan participant. Each participant's account is credited with the participant's contribution and allocations of (a) the Company's contribution, (b) Plan earnings, and (c) rollovers. Allocations are based on participant directions. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Vesting Participants are immediately vested in their contributions plus actual earnings thereon. Employees hired prior to December 31, 1996 are 100% vested in all accounts. For employees hired after December 31, 1996, vesting in the Company's matching and discretionary contribution portion of their accounts, plus actual earnings thereon, is based on years of continuous service as follows:
Years of Service Percent Vested 1 25% 2 50% 3 75% 4 or more 100%
Forfeitures Participants who terminate employment before they are 100% vested in their Company contributions will forfeit the nonvested portion of the Company contributions allocated to their accounts. Forfeitures, if any, shall be used to reduce the contribution of the employer for the Plan year in which such forfeitures occur. At December 31, 1999 there was $18,453 in forfeitures that have been offset against the Company contribution receivable of $276,296. Investment options Upon enrollment in the Plan, participants may direct their contributions at any time in whole percent increments into any of the following six investment options: . Greater Bay Trust Floating Rate Fund - Funds are invested in a money market type account. The rate paid is equivalent to the six-month U.S. Treasury bill auction rate plus 0.l25%. . Vanguard Total Bond Index Fund - Funds are invested in shares of a registered investment company that invests in a combination of bonds and other "fixed income" securities. . Vanguard Institutional Index Fund - Funds are invested in shares of a registered investment company that invests in stocks included in the Standard & Poor's 500 Index. . T. Rowe Price International Stock Fund - Funds are invested in stocks, warrants, convertibles, and/or debt securities. The Fund typically maintains investments in at least three foreign countries, and may invest in both industrialized and developing countries. 5 Greater Bay Bancorp 401(k) Plan Notes to Financial Statements ________________________________________________________________________________ . Greater Bay Trust Tactical Asset Allocation Program - Funds are invested in equity securities, bonds, and cash. . Greater Bay Bancorp Common Stock - Funds are invested in common stock of the Company. Participants may change their investment options quarterly for new deferrals and may change investment of a present balance daily. Participant notes receivable Plan participants are permitted to borrow against the vested interest in their account up to a maximum of 50% of the vested amount ranging from a minimum of $1,000 and a maximum of $50,000. Loan terms range from one to 30 years. The loans are secured by the balance in the participant's account and bear interest rates that range from 7.75% to 11%. Principal and interest is paid ratably through semi-monthly payroll deductions. Payment of benefits On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account or annual installments over a period not to exceed the participant's life expectancy. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. 2. Summary of Significant Accounting Policies Basis of accounting The records of the Plan are kept and the accompanying financial statements have been prepared on the accrual basis of accounting. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Risks and uncertainties The Plan provides for various investment options in any combination of the above mutual fund and money market investment types, which themselves are invested in various combinations of stock, bond, income, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risk in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits. 6 Greater Bay Bancorp 401(k) Plan Notes to Financial Statements ________________________________________________________________________________ Investment valuation and income recognition The Plan's investments are stated at fair market value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The Company stock is valued at its quoted market price. Participant notes receivables are valued at cost which approximates market. Purchases and sales of securities are reflected on a trade date basis. Transaction gains or losses are determined on the average cost method. Interest income is recognized on the accrual basis. The net appreciation (depreciation) in the fair value of the Plan's investments consists of realized gains or losses and the unrealized appreciation (depreciation) on those investments. Contributions Employee contributions are recorded in the period during which GBB makes payroll deductions from the Plan participants' earnings. Matching GBB contributions are recorded quarterly. Payment of benefits Benefits are recorded when paid. Tax status The Internal Revenue Service (IRS) has determined and informed GBB by a letter dated May 5, 1995, that the Plan, as then designed, is designed in accordance with the applicable sections of the Internal Revenue Code (IRC). 3. Plan Administrator and Expense GBB currently bears the administrative expenses associated with the management of the Plan. As such, no administrative expenses are reflected in the Plan's financial statements. 4. Plan Termination Although it has not expressed any intent to do so, GBB has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested. 5. Subsequent Events On January 31, 2000, GBB completed its merger with Mt. Diablo Bancshares (MDB). MDB terminated its 401(k) plan immediately before the merger with GBB. Once the IRS has issued a favorable determination letter on the qualification of the terminated MDB 401(k) plan, GBB will permit rollovers from the MDB 401(k) plan into the Plan at the participants' discretion. 7 Greater Bay Bancorp 401(k) Plan Notes to Financial Statements ________________________________________________________________________________ On May 18, 2000, GBB completed its merger with Coast Bancorp the holding company for Coast Commercial Bank (CCB). CCB terminated its 401(k) plan immediately before the merger with GBB. Once the IRS has issued a favorable determination letter on the qualification of the terminated CCB 401(k) plan, GBB will permit rollovers from the CCB 401(k) plan into the Plan at the participants' discretion. On January 26, 2000, GBB signed a definitive agreement to merge with Bank of Santa Clara (BSC). It is expected that BSC will terminate its 401(k) plan immediately before the merger with GBB. Once the IRS has issued a favorable determination letter on the qualification of the terminated BSC 401(k) plan, GBB will permit rollovers from the BSC 401(k) plan into the Plan at the participants' discretion. On March 21, 2000, GBB signed a definitive agreement to merge with Bank of Petaluma (BOP). It is expected that BOP will terminate its 401(k) plan immediately before the merger with GBB. Once the IRS has issued a favorable determination letter on the qualification of the terminated BOP 401(k) plan, GBB will permit rollovers from the BOP 401(k) plan into the Plan at the participants' discretion. 6. Request For Compliance Statement In December of 1999 GBB issued a letter to the IRS constituting a request for a compliance statement under the Voluntary Compliance Resolution (VCR) Program, pursuant to Revenue Procedures 94-62 and 98-22. The request addressed the over and under statement of participant salary deferral elections, the corresponding effect on employer matching contributions, and clerical errors that resulted in misstated employer matching contributions for the 1997 and 1998 plan years. As a result the net understatement of participant deferrals were $18,582 and $18,419 in 1997 and 1998 respectively. In 1997 the net understatement of employer match contributions was $6,592. In 1998 there was a net overstatement in employer match contributions of $4,381. Once the Plan receives notification from the IRS that it has accepted GBB's correction methodology, the Plan will implement the corrections. 7. Related Party Transactions One of the investment options of the Plan (see Note 1) is managed by the Greater Bay Trust Company. The Greater Bay Trust Company is the trustee as defined by the Plan, and, therefore, these transactions qualify as party-in- interest. However, no fees were paid by the Plan to the Trustee for the investment management services. 8. Concentration of Risk A portion of the Plan's assets are invested in common stock of Greater Bay Bancorp. This investment fund represents 35% of the Plan's total assets at December 31, 1999 and 64% of the Plan's net investment appreciation for the year ended December 31, 1999. 8 Greater Bay Bancorp 401(k) Plan Item 4i - Schedule of Assets Held for Investment Purposes As of December 31, 1999
--------------------------------------------------------------------------------------------------------------------------- Identity of Issuer Description of Investments Historical Cost Fair Value *Greater Bay Trust Floating Rate Fund Money Market Fund $ 812,287 $ 812,287 Vanguard Total Bond Index Fund Registered Investment Company 600,175 570,834 *Greater Bay Trust Tactical Asset Allocation Program Asset Allocation Fund 5,006,273 5,838,227 Vanguard Institutional Index Fund Registered Investment Company 2,144,052 2,900,153 T. Rowe Price International Stock Fund Registered Investment Company 388,931 501,141 Greater Bay Bancorp Common Stock Common stock of Company 2,893,579 6,046,512 *Participant notes receivable Loans, secured by balance of vested accounts 7.75% to 11% 415,447 415,447 ----------- ----------- $12,260,744 $17,084,601 =========== ===========
*Represents party-in-interest to the Plan. 9 Greater Bay Bancrop 401(k) Plan Item 4j - Schedule of Reportable Transactions For the Year Ended December 31, 1999 -------------------------------------------------------------------------------
(f) Fair Value (a) (b) (c) (d) (e) of Assets on (g) Identity of Description of Purchase Selling Cost of Transaction Net Gain Party Involved Assets Price Price Assets Date or (Loss) 1) Greater Bay Trust 78 Purchases of fund shares $ 721,651 $ 721,651 $ 721,651 $ - Floating Rate Fund 70 Sales of fund shares $ 427,748 427,748 427,748 - 2) Greater Bay Bancorp 74 Purchases of shares 1,220,436 1,220,436 1,220,436 - Common Stock 62 Sales of shares 633,933 359,522 633,933 274,411 3) Greater Bay Trust 114 Purchases of fund shares 2,736,762 2,736,762 2,736,762 - Tactical Asset 54 Sales of fund shares 788,066 817,953 788,066 (29,887) Allocation Program 4) Vanguard Institutional 210 Purchases of fund shares 2,956,792 2,956,792 2,956,792 - Index Fund 118 Sales of fund shares 2,801,022 2,067,469 2,801,022 733,553
10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. Greater Bay Bancorp 401 (k) Plan -------------------------------- (Name of Plan) Date: June 28, 2000 By: /s/ Cheryl G. Howell -------------------- Cheryl G. Howell Executive Vice President and Senior Trust Officer Greater Bay Trust Company, Trustee for the Plan EXHIBIT INDEX Exhibit No. Exhibit ----------- ------- 23.1 Consent of PricewaterhouseCoopers LLP