<PAGE>
As filed with the Securities and Exchange Commission on March 11, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20005
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GREATER BAY BANCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-0387041
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
2860 WEST BAYSHORE ROAD
PALO ALTO, CALIFORNIA 94303
(Address of principal executive offices) (Zip Code)
GREATER BAY BANCORP 1996 STOCK OPTION PLAN
(Full title of the plan)
DAVID L. KALKBRENNER
Chief Executive Officer
Greater Bay Bancorp
2860 West Bayshore Road
Palo Alto, California 94303
(Name and address of agent for service)
(650) 813-8200
(Telephone number, including area code, of agent for service)
WITH A COPY TO:
T. HALE BOGGS
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, California 90064
This registration statement shall hereafter become effective in accordance with
Rule 462 promulgated under the Securities Act of 1933, as amended.
<TABLE>
<CAPTION>
Calculation of Registration Fee
- -----------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount maximum maximum Amount
securities to to be re- offering price aggregate of registra-
be registered gistered/1/ per unit/2/ offering price/2/ tion fee
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996 Stock Option
Plan Common Stock 456,326 $52.69 $24,043,817 $7093
- -----------------------------------------------------------------------------------------
</TABLE>
/1/ In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein and such
indeterminate number of shares as may become available as a result of the
adjustment provisions thereof.
/2/ Estimated pursuant to Rule 457(c) solely for purposes of calculating the
registration fee based upon the average of the high and low prices of the Common
Stock as reported on the National Association of Securities Dealers Automated
Quotations System on March 4, 1998.
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Greater Bay Bancorp, Inc. (the "Registrant") hereby files this
Registration Statement on Form S-8 with the Securities and Exchange Commission
(the "Commission") to register 456,326 shares of the Registrant's Common Stock
for issuance pursuant to the Registrant's 1996 Employee Stock Option Plan (the
"Plan"), and such indeterminate number of shares as may become available under
the Plan as a result of the adjustment provisions thereof.
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The following documents filed by the Registrant with the Commission are
incorporated in this Registration Statement by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
document referred to in (a) above.
(c) The description of the class of securities which is contained in the
Registrant's Registration Statement on Form 8-A, as amended, including any
amendment or report filed for the purpose of updating such information.
All other documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicate that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statement made in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which is also
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The Registrant's Articles of Incorporation provide that the liability of
the directors for monetary damages shall be eliminated to the fullest extent
permissible under California law. Pursuant to California law, the Registrant's
directors shall not be liable for monetary damages for breach of the directors'
fiduciary duty of care to the Registrant and its shareholders. However, this
provision does not eliminate the duty of care, and in appropriate circumstances,
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under California law. In addition, each director will continue
to be subject to liability for (i) acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) acts or omissions
that a director believes to be contrary to the best interests of the Registrant
or its shareholders or that involve the absence of good faith on the part of the
director, (iii) any transaction from which a director derived an improper
personal benefit, (iv) acts or omissions that show a reckless disregard for the
director's duty to the Registrant or its shareholders in circumstances in which
the director was aware, or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the Registrant or
its shareholders, (v) acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
Registrant or its shareholders, (vi) any transaction that constitutes an illegal
distribution or dividend under California law, and (vii) any transaction
involving an unlawful conflict of interest between the director and the
Registrant under California law. The provision also does not affect a
director's responsibilities under any other law, such as the federal securities
laws or state or federal environmental laws.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
See Exhibit Index.
Item 9. Undertakings
------------
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
<PAGE>
represent a fundamental change in the information set forth in the Registration
Statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
Provided, however, that paragraphs 1(a) and 1(b) do not apply if the
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13 or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person the prospectus is sent or given,
the latest Annual Report to security holders that is incorporated by reference
in the prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Exchange Act; and, where
<PAGE>
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing of Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palo Alto, State of California on March 10,
1998.
GREATER BAY BANCORP
By /s/ David L. Kalkbrenner
---------------------------------
David L. Kalkbrenner,
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David L. Kalkbrenner and Steven C. Smith,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorney-in-
fact and agents or any of them, or their or his substitutes, or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities indicated on March 10, 1998.
Signature Title
/s/ David L. Kalkbrenner
- --------------------------- Chief Executive Officer,
David L. Kalkbrenner President and Director
(Principal Executive Officer)
<PAGE>
/s/ Steven C. Smith
- --------------------------- Executive Vice President, Chief
Steven C. Smith Financial Officer and Chief
Operating Officer (Principal
Financial and Accounting
Officer)
/s/ John M. Gatto
- --------------------------- Director
John M. Gatto
/s/ James E. Jackson
- --------------------------- Director
James E. Jackson
/s/ Rex D. Lindsay
- --------------------------- Director
Rex D. Lindsay
/s/ Duncan L. Matteson
- --------------------------- Director
Duncan L. Matteson
/s/ Glen McLaughlin
- --------------------------- Director
Glen McLaughlin
/s/ Dick J. Randall
- --------------------------- Director
Dick J. Randall
/s/ Donald H. Seiler
- --------------------------- Director
Donald H. Seiler
/s/ Warren R. Thoits
- --------------------------- Director
Warren R. Thoits
/s/ Edwin E. Van Bronkhorst
- --------------------------- Director
Edwin E. Van Bronkhorst
<PAGE>
EXHIBIT INDEX
5.1 Opinion of Manatt, Phelps & Phillips, LLP.
23.1 Consent of Manatt, Phelps & Phillips, LLP (included in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand LLP.
25.1 Power of Attorney (included on signature page hereof).
99.1 Greater Bay Bancorp 1996 Stock Option Plan, as amended effective December
23, 1997.
99.2 Form of Incentive Stock Option Agreement.
99.3 Form of Non-Qualified Stock Option Agreement.
<PAGE>
Exhibit 5.1
Opinion of Manatt, Phelps & Phillips, LLP
[MANATT, PHELPS & PHILLIPS, LLP LETTERHEAD]
March 11, 1998
Greater Bay Bancorp
2860 West Bayshore Road
Palo Alto, California 94303
RE: GREATER BAY BANCORP REGISTRATION STATEMENT ON FORM S-8 REGISTERING
SHARES ISSUABLE UNDER THE GREATER BAY BANCORP 1996 STOCK OPTION PLAN
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") being filed by Greater Bay Bancorp ("the
Company") with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of up to 456,326
shares of the Common Stock, without par value, of the Company which may be
issued pursuant to the exercise of options granted under the Greater Bay Bancorp
1996 Stock Option Plan (the "Plan").
We have examined all instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 456,326 shares of
Common Stock which may be issued upon exercise of options granted under the Plan
are duly authorized shares of the Company's Common Stock, and, when issued
against payment of the purchase price therefor in accordance with the provisions
of the Plan, will be validly issued, fully paid and non-assessable.
This opinion is issued to you solely for use in connection with the
Registration Statement on Form S-8 and is not to be quoted or otherwise referred
to in any financial statements of the Company or related document, nor is it to
be filed with or furnished to any government agency or other person, without the
prior written consent of this Firm.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 which is being filed on behalf of the Company
in connection with the registration of the aforementioned shares of Common Stock
under the Securities Act of 1933, as amended.
Very truly yours,
/s/ Manatt, Phelps & Phillips, LLP
MANATT, PHELPS & PHILLIPS, LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-8 of our report
dated February 27, 1997 on our audits of the consolidated financial statements
of Greater Bay Bancorp and Subsidiaries as of December 31, 1996 and 1995, and
for the three years in the period ended December 31, 1996, appearing in the
Annual Report on Form 10-K of Greater Bay Bancorp for 1996.
/s/Coopers & Lybrand LLP
San Francisco, California
March 11, 1998
<PAGE>
EXHIBIT 99.1
GREATER BAY BANCORP 1996 STOCK OPTION PLAN,
AS AMENDED EFFECTIVE DECEMBER 23, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
1. PURPOSE............................................................... 2
2. DEFINITIONS........................................................... 2
(a) "Board of Directors"................................................ 2
(b) "Change in Control"................................................. 2
(c) "Code............................................................... 2
(d) "Committee.......................................................... 2
(e) "Company............................................................ 3
(f) "Employee........................................................... 3
(g) "Exchange Act....................................................... 3
(h) "Exercise Price..................................................... 3
(i) "Fair Market Value.................................................. 3
(j) "ISO................................................................ 4
(k) "Nonstatutory Option................................................ 4
(l) "Option............................................................. 4
(m) "Optionee........................................................... 4
(n) "Plan............................................................... 4
(o) "Service............................................................ 4
(p) "Share.............................................................. 4
(q) "Stock.............................................................. 4
(r) "Stock Option Agreement............................................. 4
(s) "Subsidiary......................................................... 4
(t) "Substitute Option.................................................. 4
(u) "Total and Permanent Disability..................................... 4
3. ADMINISTRATION........................................................ 5
(a) Committee Membership................................................ 5
(b) Committee Procedures................................................ 5
4. ELIGIBILITY........................................................... 6
(a) General Rules....................................................... 6
(b) Ten-Percent Stockholders............................................ 6
(c) Attribution Rules................................................... 6
(d) Outstanding Stock................................................... 7
5. STOCK SUBJECT TO PLAN................................................. 7
(a) Basic Limitation.................................................... 7
(b) Additional Shares................................................... 7
i
<PAGE>
PAGE
----
6. TERMS AND CONDITIONS OF OPTIONS....................................... 7
(a) Stock Option Agreement.............................................. 7
(b) Number of Shares.................................................... 7
(c) Exercise Price...................................................... 7
(d) Withholding Taxes................................................... 8
(e) Exercisability...................................................... 8
(f) Term................................................................ 8
(g) Transferability..................................................... 9
(h) No Rights as a Stockholder.......................................... 9
(i) Modification, Extension and Renewal of Options...................... 9
(j) Substitute Options.................................................. 9
7. PAYMENT FOR SHARES.................................................... 10
(a) General Rule........................................................ 10
(b) Surrender of Stock.................................................. 10
(c) Exercise/Sale....................................................... 10
(d) Exercise/Pledge..................................................... 10
8. ADJUSTMENT OF SHARES.................................................. 10
(a) General............................................................. 10
(b) Reorganizations..................................................... 11
(c) Reservation of Rights............................................... 11
9. SECURITIES LAWS....................................................... 11
10. NO RETENTION RIGHTS................................................... 11
11. DURATION AND AMENDMENTS............................................... 12
(a) Term of the Plan.................................................... 12
(b) Right to Amend or Terminate the Plan................................ 12
(c) Effect of Amendment or Termination.................................. 12
ii
<PAGE>
GREATER BAY BANCORP 1996 STOCK OPTION PLAN
------------------------------------------
AS AMENDED EFFECTIVE DECEMBER 23, 1997
1. PURPOSE.
-------
The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, by purchasing Shares of the Company's
Common Stock. The Plan provides both for the grant of Nonstatutory Options as
well as ISOs intended to qualify under Section 422 of the Code.
2. DEFINITIONS.
-----------
(a) "Board of Directors" shall mean the Board of Directors of the Company,
------------------
as constituted from time to time.
(b) "Change in Control" shall mean the occurrence of either of the
-----------------
following events:
(i) A change in the composition of the Board of Directors, as a
result of which fewer than one-half of the incumbent directors
are directors who either:
(A) Had been directors of the Company (including prior service as
a director of either Mid-Peninsula Bancorp or Cupertino National
Bancorp) 24 months prior to such change; or
(B) Were elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least a majority of the
directors who had been directors of the Company at the Effective Time
of the Merger of Mid-Peninsula Bancorp and Cupertino National Bancorp
or 24 months prior to such change (whichever is later) and who were
still in office at the time of the election or nomination; or
(ii) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) by the acquisition or aggregation of
securities is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 50 percent
or more of the combined voting power of the Company's then
outstanding securities. For purposes of this Paragraph (ii), the
term "person" shall not include an employee benefit plan
maintained by the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(d) "Committee" shall mean a committee of the Board of Directors, as
---------
described in Section 3(a), or in the absence of such a committee, the Board of
Directors.
2
<PAGE>
(e) "Company" shall mean Greater Bay Bancorp, a California corporation,
-------
formerly known as Mid-Peninsula Bancorp, a California corporation.
(f) "Employee" shall mean:
--------
(i) Any individual who is a common-law employee of the Company or of
a Subsidiary;
(ii) A member of the Board of Directors; and
(iii) An independent contractor who performs services for the Company
or a Subsidiary and who is not a member of the Board of Directors.
Service as an independent contractor or member of the Board of Directors shall
be considered employment for all purposes of the Plan, except as provided in
Section 4(a).
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
(h) "Exercise Price" shall mean the amount for which one Share may be
--------------
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.
(i) "Fair Market Value" shall mean the market price of Stock, determined
-----------------
by the Committee as follows:
(i) If Stock was traded over-the-counter on the date in question but
was not traded on the Nasdaq system or the Nasdaq National Market System,
then the Fair Market Value shall be equal to the mean between the last
reported representative bid and asked prices quoted for such date by the
principal automated inter-dealer quotation system on which Stock is quoted
or, if Stock is not quoted on any such system, by the "Pink Sheets"
published by the National Quotation Bureau, Inc.;
(ii) If Stock was traded over-the-counter on the date in question and
was traded on the Nasdaq system or the Nasdaq National Market System, then
the Fair Market Value shall be equal to the last-transaction price quoted
for such date by the Nasdaq system or the Nasdaq National Market System;
(iii) If Stock was traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported by
the applicable composite transactions report for such date; and
(iv) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
3
<PAGE>
In all cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.
(j) "ISO" shall mean an employee incentive stock option described in
---
Section 422(b) of the Code.
(k) "Nonstatutory Option" shall mean a stock option not described in
-------------------
Sections 422(b) or 423(b) of the Code.
(l) "Option" shall mean an ISO or Nonstatutory Option granted under the
------
Plan and entitling the holder to purchase Shares.
(m) "Optionee" shall mean an individual who holds an Option.
--------
(n) "Plan" shall mean this Greater Bay Bancorp 1996 Stock Option Plan, as
----
it may be amended from time to time.
(o) "Service" shall mean service as an Employee.
-------
(p) "Share" shall mean one share of Stock, as adjusted in accordance with
-----
Section 8 (if applicable).
(q) "Stock" shall mean the Common Stock of the Company.
-----
(r) "Stock Option Agreement" shall mean the agreement between the Company
----------------------
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.
(s) "Subsidiary" shall mean any corporation, if the Company and/or one or
----------
more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.
(t) "Substitute Option" shall mean an option described in Section 6(j).
-----------------
(u) "Total and Permanent Disability" shall mean that the Optionee is
------------------------------
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.
4
<PAGE>
3. ADMINISTRATION.
--------------
(a) Committee Membership. The Board of Directors shall have the authority
--------------------
to administer the Plan but may delegate its administrative powers under the
Plan, in whole or in part, to one or more committees of the Board of Directors.
With respect to the participation of Employees who are subject to Section 16 of
the Exchange Act, the Plan may be administered by a committee composed solely of
two or more members of the Board of Directors who qualify as "nonemployee
directors" as defined in Securities and Exchange Commission Rule 16b-3 under the
Exchange Act. With respect to the participation of Employees who may be
considered "covered employees" under Section 162(m) of the Code, the Plan may be
administered by a committee composed solely of two or more members of the Board
of Directors who qualify as "outside directors" as defined by the Internal
Revenue Service for plans intended to qualify for an exemption under Section
162(m)(4)(C) of the Code. If the committee members meet both such
qualifications, then one committee may administer the Plan both with respect to
Employees who are subject to Section 16 of the Exchange Act or who are
considered to be "covered employees" under Section 162(m) of the Code.
The Board of Directors may appoint a separate committee, consisting of one
or more members of the Board of Directors who do not meet such qualifications.
Such committee may administer the Plan with respect to Employees who are not
officers of the Company or members of the Board of Directors, may grant Options
under the Plan to such Employees and may determine the timing, number of Shares
and other terms of such grants.
(b) Committee Procedures. The Board of Directors shall designate one of
--------------------
the members of any Committee appointed under paragraph (a) as chairman. Any
such Committee may hold meetings at such times and places as it shall determine.
The acts of a majority of the Committee members present at meetings at which a
quorum exists, or acts reduced to or approved in writing by all Committee
members, shall be valid acts of the Committee.
(c) Committee Responsibilities. Subject to the provisions of the Plan,
--------------------------
any such Committee shall have full authority and discretion to take the
following actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating
to the Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Options are to be granted under the Plan;
(v) To select the Optionees;
(vi) To determine the number of Shares to be made subject to each
Option;
5
<PAGE>
(vii) To prescribe the terms and conditions of each Option, including
(without limitation) the Exercise Price, to determine whether such Option
is to be classified as an ISO or as a Nonstatutory Option, and to specify
the provisions of the Stock Option Agreement relating to such Option;
(vii) To amend any outstanding Stock Option Agreement, subject to
applicable legal restrictions and to the consent of the Optionee who
entered into such agreement;
(ix) To prescribe the consideration for the grant of each Option
under the Plan and to determine the sufficiency of such consideration; and
(x) To take any other actions deemed necessary or advisable for the
administration of the Plan.
All decisions, interpretations and other actions of the Committee shall be final
and binding on all Optionees, and all persons deriving their rights from an
Optionee. No member of the Committee shall be liable for any action that he or
she has taken or has failed to take in good faith with respect to the Plan or
any Option.
4. ELIGIBILITY.
-----------
(a) General Rules. Only Employees shall be eligible for designation as
-------------
Optionees by the Committee. In addition, only Employees who are common-law
employees of the Company or a Subsidiary shall be eligible for the grant of
ISOs.
(b) Ten-Percent Stockholders. An Employee who owns more than 10 percent
------------------------
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless:
(i) The Exercise Price is at least 110 percent of the Fair Market
Value of a Share on the date of grant; and
(ii) Such ISO by its terms is not exercisable after the expiration of
five years from the date of grant.
(c) Attribution Rules. For purposes of Subsection (b) above, in
-----------------
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for such Employee's brothers, sisters, spouse,
ancestors and lineal descendants. Stock owned, directly or indirectly, by or
for a corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.
6
<PAGE>
(d) Outstanding Stock. For purposes of Subsection (b) above, "outstanding
-----------------
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding stock" shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.
5. STOCK SUBJECT TO PLAN.
---------------------
(a) Basic Limitation. Shares reserved for issuance pursuant to the
----------------
exercise of Options granted under the Plan shall be authorized but unissued
Shares. The aggregate number of Shares which may be issued pursuant to the
exercise of Options granted under the Plan shall be 1,207,890, all of which may
be issued pursuant to the exercise of ISOs or Nonstatutory Options granted under
the Plan. The number of Shares which are subject to Options outstanding at any
time under the Plan shall not exceed the number of Shares which then remain
available for issuance under the Plan. The Company, during the term of the
Plan, shall at all times reserve and keep available sufficient Shares to satisfy
the requirements of the Plan.
(b) Additional Shares. In the event that any outstanding option granted
-----------------
under this Plan, including Substitute Options, or the Prior Plan, for any reason
expires or is cancelled or otherwise terminated, the Shares allocable to the
unexercised portion of such option shall become available for the purposes of
this Plan.
6. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
(a) Stock Option Agreement. Each grant of an Option under the Plan shall
----------------------
be evidenced by a Stock Option Agreement executed by the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the
----------------
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 8. Options granted to any
Optionee in a single calendar year shall in no event cover more than 30,000
------
Shares, subject to adjustment in accordance with Section 8. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.
(c) Exercise Price. Each Stock Option Agreement shall specify the
--------------
Exercise Price. The Exercise Price of an Option shall not be less than 100
percent of the Fair Market Value of a Share on the date of grant, except as
otherwise provided in Section 4(b) with respect to ISO's and Section 6(i) with
respect to Substitute Options. The Exercise Price shall be payable in a form
described in Section 7.
7
<PAGE>
(d) Withholding Taxes. As a condition to the exercise of an Option, the
-----------------
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with the disposition of Shares acquired by exercising an Option. The Committee
may permit the Optionee to satisfy all or part of his or her tax obligations
related to the Option by having the Company withhold a portion of any Shares
that otherwise would be issued to him or her or by surrendering any Shares that
previously were acquired by him or her. Such Shares shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.
The payment of taxes by assigning Shares to the Company, if permitted by the
Committee, shall be subject to such restrictions as the Committee may impose.
(e) Exercisability. Each Stock Option Agreement shall specify the date
--------------
when all or any installment of the Option is to become exercisable. The vesting
of any Option shall be determined by the Committee at its sole discretion;
provided however, that:
(i) Each Stock Option Agreement shall provide for immediate
exercisability of the entire Option in the event of a Change in Control.
(ii) In the In the event that an Optionee's Service terminates, the
Option shall be exercisable only to the extent the Option was vested as of
the date of such termination, unless otherwise specified in the Optionee's
Stock Option Agreement.
(f) Term. Each Stock Option Agreement shall specify the term of the
----
Option. The term of an ISO shall not exceed 10 years from the date of grant,
except as otherwise provided in Section 4(b). Subject to the preceding
sentence, the Committee at its sole discretion shall determine when an Option is
to expire. In the event that the Optionee's Service terminates:
(i) As a result of such Optionee's death or Total and Permanent
Disability, the term of the Option shall expire twelve months (or such
other period specified in the Optionee's Stock Option Agreement) after such
death or Total and Permanent Disability but not later than the original
expiration date specified in the Stock Option Agreement.
(ii) As a result of termination by the Company for cause, the term of
the Option shall expire thirty days after the Company's notice or advice of
such termination is dispatched to Employee, but not later than the original
expiration date specified in the Stock Option Agreement. For purposes of
this Paragraph (ii), "cause" shall mean an act of embezzlement, disclosure
of any of the secrets or confidential information of the Company, the
inducement of any client or customer of the Company to break any contract
with the Company, or the inducement of any principal for whom the Company
acts as agent to terminate such agency relationship, the engagement of any
conduct which constitutes unfair competition with the Company, the removal
of Optionee from office by any court or bank regulatory agency, or
8
<PAGE>
such other similar acts which the Committee in its discretion determine to
constitute good cause for termination of Optionee's Service. As used in
this Paragraph (ii), Company includes Subsidiaries of the Company.
(iii) As a result of termination for any reason other than Total and
Permanent Disability, death or cause, the term of the Option shall expire
three months (or such other period specified in the Optionee's Stock Option
Agreement) after such termination, but not later than the original
expiration date specified in the Stock Option Agreement.
(g) Transferability. During an Optionee's lifetime, such Optionee's
---------------
ISO(s) shall be exercisable only by him or her and shall not be transferable.
An Optionee's Nonstatutory Options shall also not be transferable during the
Optionee's lifetime, except to the extent otherwise permitted in the Optionee's
Stock Option Agreement. Subject to prior permitted transfers, in the event of
an Optionee's death, such Optionee's Option(s) shall not be transferable other
than by will, by written beneficiary designation or by the laws of descent and
distribution.
(h) No Rights as a Stockholder. An Optionee, or a transferee of an
--------------------------
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustments shall be made, except as provided
in Section 8.
(i) Modification, Extension and Renewal of Options. Within the
----------------------------------------------
limitations of the Plan, the Committee may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not
previously exercised) in return for the grant of new Options at the same or a
different price. The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, impair such Optionee's rights or
increase his or her obligations under such Option.
(j) Substitute Options. If the Company at any time should succeed to the
------------------
business of another corporation through merger or consolidation, or through the
acquisition of stock or assets of such corporation, Options may be granted under
the Plan in substitution of options previously granted by such corporation to
purchase shares of its stock which options are outstanding at the date of the
succession ("Surrendered Options"). It is specifically intended that this
section of the Plan shall authorize the granting and issuance of Substitute
Options pursuant to the terms of the Amended and Restated Agreement and Plan of
Reorganization by and between Mid-Peninsula Bancorp and Cupertino National
Bancorp dated June 26, 1996. The Committee shall have discretion to determine
the extent to which such Substitute Options shall be granted, the persons to
receive such Substitute Options, the number of Shares to be subject to such
Substitute Options, and the terms and conditions of such Substitute Options
which shall, to the extent permissible within the terms and conditions of the
Plan, be equivalent to the terms and conditions of the Surrendered Options. The
Exercise Price may be determined without regard to Section 6(c); provided
however, that the Exercise Price of each Substitute Option shall be an amount
such that, in the sole and absolute judgment of the Committee (and if the
Substitute Options are to be ISO's, in compliance with Section 424(a) of the
Code), the
9
<PAGE>
economic benefit provided by such Substitute Option is not greater than the
economic benefit represented by the Surrendered Option as of the date of the
succession.
7. PAYMENT FOR SHARES.
------------------
(a) General Rule. The entire Exercise Price of Shares issued under the
------------
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as follows:
(i) ISOs. In the case of an ISO granted under the Plan, payment
----
shall be made only pursuant to the express provisions of the applicable
Stock Option Agreement. However, the Committee (at its sole discretion) may
specify in the Stock Option Agreement that payment may be made pursuant to
Subsections (b), (c) or (d) below.
(ii) Nonstatutory Options. In the case of a Nonstatutory Option
--------------------
granted under the Plan, the Committee (at its sole discretion) may accept
payment pursuant to Subsections (b), (c), or (d) below.
(b) Surrender of Stock. To the extent that this Subsection (b) is
------------------
applicable, payment may be made all or in part with Shares which have already
been owned by the Optionee or his or her representative for more than 6 months
and which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.
(c) Exercise/Sale. To the extent that this Subsection (c) is applicable,
-------------
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
(d) Exercise/Pledge. To the extent that this Subsection (d) is
---------------
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.
8. ADJUSTMENT OF SHARES.
--------------------
(a) General. In the event of a subdivision of the outstanding Stock, a
-------
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spinoff or a similar occurrence, the Committee shall make
appropriate adjustments in one or more of:
10
<PAGE>
(i) The number of Shares available under Section 5 for future
grants;
(ii) The limit set forth in Section 6(b);
(iii) The number of Shares covered by each outstanding Option; or
(iv) The Exercise Price under each outstanding Option.
(b) Reorganizations. In the event that the Company is a party to a merger
---------------
or other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Subject to the provisions of Section 6(e)(i), such
agreement may provide, without limitation, for the assumption of outstanding
Options by the surviving corporation or its parent, for their continuation by
the Company (if the Company is a surviving corporation), for payment of a cash
settlement equal to the difference between the amount to be paid for one Share
under such agreement and the Exercise Price, or for the acceleration of their
exercisability followed by the cancellation of Options not exercised, in all
cases without the Optionees' consent. Any cancellation shall not occur until
after such acceleration is effective and Optionees have been notified of such
acceleration and have had reasonable opportunity to exercise their Options.
(c) Reservation of Rights. Except as provided in this Section 8, an
---------------------
Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class.
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
9. SECURITIES LAWS.
---------------
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.
10. NO RETENTION RIGHTS.
-------------------
Neither the Plan nor any Option shall be deemed to give any individual a
right to remain an employee or consultant of the Company or a Subsidiary. The
Company and its Subsidiaries reserve the right to terminate the service of any
employee or consultant at any time, with or without cause, subject to applicable
laws and a written employment agreement (if any).
11
<PAGE>
11. DURATION AND AMENDMENTS.
-----------------------
(a) Term of the Plan. The Plan, as set forth herein, shall become
----------------
effective as of the Effective Date, provided that the Plan has been approved by
the shareholders of the Company in the manner required by applicable law or
regulation. The Plan, if not extended, shall terminate automatically ten years
after the Effective Date, except that any ISO's granted under the Plan must be
granted by September 18, 2006, ten years after the Plan was adopted by the Board
of Directors. It may be terminated on any earlier date pursuant to Subsection
(b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may
------------------------------------
amend, suspend or terminate the Plan at any time and for any reason. An
amendment of the Plan shall be subject to the approval of the Company's
shareholders only to the extent required by applicable laws or regulations.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold
----------------------------------
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.
12
<PAGE>
EXHIBIT 99.2
GREATER BAY BANCORP
INCENTIVE STOCK OPTION AGREEMENT
1. GRANT. Greater Bay Bancorp, a California corporation (the "Company"),
hereby grants to "Title" (the "Optionee"), on ______________, an option (the
"Option") to purchase a total of "shares" shares of common stock of the Company,
at the price of ____________, which in all respects are subject to the terms,
definitions and provisions of the Greater Bay Bancorp 1996 Stock Option Plan
(the "Plan"). The capitalized terms defined in the Plan shall have the same
defined meanings herein.
2. NATURE OF THE OPTION. This Option is intended to qualify as an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). However, the Company does not represent or
warrant that this Option qualifies as an incentive stock option. Optionee
acknowledges that Optionee is responsible to consult with Optionee's own tax
advisor regarding the tax effects of the Option and the requirements necessary
to obtain income tax treatment under Section 422 of the Code, including, but not
limited to, holding period requirements.
Optionee further understands that, if Optionee disposes of any Shares
received under this Option within two (2) years after the Grant Date of the
Option specified below or within one (1) year after such Shares are transferred
to him, Optionee will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount generally
measured by the difference between the Exercise Price and the lower of the Fair
Market Value of the Shares at the date of the exercise or the Fair Market Value
of the Shares at the date of disposition. Optionee understands that, if
Optionee disposes of such Shares at any time after the expiration of such two-
year and one-year holding periods, any gain on such sale will be taxed as long-
term capital gain. OPTIONEE AGREES TO NOTIFY THE COMPANY IN WRITING WITHIN 5
DAYS AFTER THE DATE OF ANY SUCH DISPOSITION.
Optionee further understands that: (a) if Optionee is unable to continue
employment with the Company as a result of a Total and Permanent Disability (as
defined in Section 22(e)(3) of the Code), and if the other requirements for
incentive stock option treatment contained in Section 422 of the Code are
satisfied, Optionee will be entitled to exercise the Option within twelve (12)
months of such termination without defeating incentive stock option treatment;
but (b) if Optionee is unable to continue employment with the Company as a
result of disability which is not Total and Permanent (as defined in Section
22(e)(3) of the Code), the Option will not qualify as an incentive stock option
unless it is exercised within three (3) months of the date of termination (I.E.,
while the Option may be exercised for a period of twelve (12) months after such
termination, the exercise more than three (3) months following termination will
result in the Option being taxed as a non-qualified stock option).
Optionee acknowledges, and the Company affirms, that the methodology by
which the Fair Market Value of the Shares has been determined by the Company
represents a good faith attempt,
<PAGE>
as defined in the Code and the regulations thereunder, at reaching an accurate
appraisal of the Fair Market Value of the Shares; and the Company shall not be
responsible for any additional tax liability incurred by Optionee in the event
that the Internal Revenue Service were to determine that the Option does not
qualify as an incentive stock option for any reason.
3. EXERCISE PRICE. The Exercise Price is ___________ for each share of
Common Stock, which price is not less than the Fair Market Value per share of
the common stock of the Company on the Grant Date.
4. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the provisions of Section 6 of the Plan as follows:
(a) RIGHT TO EXERCISE. This Option shall vest cumulatively from the
date of grant of the Option, exercisable during a period of FIVE YEARS after the
Grant Date as follows: 20% of the Shares subject to the Option shall be vested
on the first anniversary of the Grant Date, and an additional 20% of the Shares
subject to the Option shall vest on each anniversary of the Grant Date
thereafter.
(b) MINIMUM EXERCISE. This Option may not be exercised for less than
10 Shares nor for a fraction of a Share.
(c) METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise the Option and specify the
number of Shares in respect of which the Option is being exercised. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company accompanied by payment of
the Exercise Price specified in Section 2 above.
No Shares will be issued pursuant to the exercise of the Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange or inter-dealer quotation system upon
which the shares of the Company's common stock may then be listed or quoted.
Assuming such compliance, the Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
Shares. An Optionee shall have no rights as a shareholder of the Company with
respect to any Shares until the issuance of a stock certificate to the Optionee
for such Shares.
(d) METHOD OF PAYMENT. The entire Exercise Price of Shares issued
under this Option shall be payable in cash or by certified check, official bank
check, or the equivalent thereof acceptable to the Company at the time when such
Shares are purchased. Such payment also shall include the amount of any
withholding tax obligation which may arise in connection with the exercise, as
determined by the Company. In addition, payment may be made in any of the
following forms as indicated by an "x" in the preceding parenthesis:
(X) SURRENDER OF STOCK. Payment of all or part of the Exercise
Price and any withholding taxes may be made all or in part with Shares which
have already been owned by the Optionee or Optionee's representative for more
than 6 months and which are surrendered to the
<PAGE>
Company in good form for transfer. Such Shares shall be valued at their Fair
Market Value on the date when the new Shares are purchased pursuant to exercise
of the Option.
(X) EXERCISE/SALE. Payment may be made by the delivery (on a
form prescribed by the Company) of an irrevocable direction to a securities
broker approved by the Company to sell Shares and to deliver all or part of the
sales proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
(X) EXERCISE/PLEDGE. Payment may be made by the delivery (on a
form prescribed by the Company) of an irrevocable direction to pledge Shares to
a securities broker or lender approved by the Company, as security for a loan,
and to deliver all or part of the loan proceeds to the Company in payment of all
or part of the Exercise Price and any withholding taxes.
(e) TERMINATION OF SERVICE. In the event that the Optionee's Service
terminates:
(i) As a result of such Optionee's death or Total and Permanent
Disability, the term of the Option shall expire twelve months after such death
or Total and Permanent Disability but not later than the expiration date
specified in Section 5 below.
(ii) As a result of termination by the Company for cause, the term of
the Option shall expire thirty days after the Company's notice or advice of such
termination is dispatched to Optionee, but not later than the expiration date
specified in Section 5 below. For purposes of this paragraph (ii), "cause"
shall mean an act of embezzlement, fraud, dishonesty, breach of fiduciary duty
to the Company, or the deliberate disregard of rules of the Company which
results in loss, damage or injury to the Company, the unauthorized disclosure of
any of the secrets or confidential information of the Company, the inducement of
any client or customer of the Company to break any contract with the Company, or
the inducement of any principal for whom the Company acts as agent to terminate
such agency relationship, the engagement in any conduct which constitutes unfair
competition with the Company, the removal of Optionee from office by any court
or bank regulatory agency, or such other similar acts which the Committee in its
discretion determines to constitute good cause for termination of Optionee's
Service. As used in this paragraph (ii), Company includes Subsidiaries of the
Company.
(iii) As a result of termination for any reason other than Total and
Permanent Disability, death or cause, the term of the Option shall expire three
months after such termination, but not later than the original expiration date
specified in Section 5 below.
Neither the Plan nor this Option shall be deemed to give Optionee a right to
remain an employee or consultant of the Company or a Subsidiary. The Company
and its Subsidiaries reserve the right to terminate the service of any employee
or consultant at any time, with or without cause, subject to applicable laws and
the terms of any written employment agreement.
5. TERM OF OPTION. Subject to earlier termination as provided in the Plan,
this Option shall terminate TEN (10) YEARS from the Grant Date of this Option,
and may be exercised during
<PAGE>
such term only in accordance with the Plan and the terms of this Option.
6. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will, by written beneficiary designation or by the
laws of descent and distribution, and may be exercised during the lifetime of
Optionee only by Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.
7. ADJUSTMENT OF SHARES. In the event of a subdivision of the outstanding
shares of common stock of the Company, a declaration of a dividend payable in
Shares, a declaration of a dividend payable in a form other than Shares in an
amount that has a material effect on the value of Shares, a combination or
consolidation of the outstanding shares of common stock (by reclassification or
otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a
similar occurrence, the Company shall make appropriate adjustments in the number
of Shares covered by the Option and in the Exercise Price of the Option.
In the event that the Company is a party to a merger or other
reorganization, the Option shall be subject to the agreement of merger or
reorganization. Subject to Section 6(e)(i) of the Plan which provides that the
entire option shall be immediately exercisable in the event of a change of
control, such agreement may provide, without limitation, for the assumption of
all outstanding options by the surviving corporation or its parent, for their
continuation by the Company (if the Company is a surviving corporation), for
payment of a per-Share cash settlement equal to the difference between the
amount to be paid for one Share under such agreement and the Exercise Price, or
for the acceleration of the exercisability followed by the cancellation of any
option not exercised, in all cases without the optionees' consent. Any
cancellation shall not occur until after such acceleration is effective and
optionees have been notified of such acceleration and have had reasonable
opportunity to exercise their options.
Except as provided in this Section, Optionee shall have no rights by reason
of any subdivision or consolidation of shares of stock of any class, the payment
of any dividend or any other increase or decrease in the number of shares of
stock of any class. Any issue by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to the Option. The grant of this Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
GREATER BAY BANCORP
By:
-------------------------
Steven C. Smith
Executive Vice President
Chief Operating Officer
<PAGE>
Optionee represents that Optionee is familiar with the terms and provisions
of this Option and hereby accepts the same subject to all the terms and
provisions hereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board of Directors or its duly
appointed Committee upon any questions arising under the Plan.
Dated:
----------------------
---------------------------------
Optionee
<PAGE>
EXHIBIT 99.3
GREATER BAY BANCORP
NONSTATUTORY STOCK OPTION AGREEMENT
1. GRANT. Greater Bay Bancorp, a California corporation (the "Company"),
hereby grants to ___________ (the "Optionee"), an option (the "Option") to
purchase a total of __________ shares of common stock of the Company, at the
price determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Greater Bay Bancorp 1996 Stock Option Plan
(the "Plan"). The capitalized terms defined in the Plan shall have the same
defined meanings herein.
2. NATURE OF THE OPTION. This Option is intended by the Company and the
Optionee to be a nonstatutory stock option and does not qualify for any special
tax benefits to the Optionee. This option is NOT an Incentive Stock Option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.
3. EXERCISE PRICE. The Exercise Price is $__________ for each share of common
stock, which price is not less than the Fair Market Value per share of the
common stock of the Company on the Grant Date.
4. TERM OF OPTION. Subject to earlier termination as provided in the Plan,
this Option shall terminate on __________, and may be exercised during such term
only in accordance with the Plan and the terms of this Option.
5. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the provision of Section 6 of the Plan as follows:
a) RIGHT TO EXERCISE. This Option shall vest cumulatively from the date
of grant of the Option, exercisable during a period of ______ months after the
Grant Date as follows: ______%, additional ______% of the Shares subject to the
Option shall vest on each anniversary of the Grant Date thereafter.
b) MINIMUM EXERCISE. This Option may not be exercised for less than 10
Shares nor for a fraction of a Share.
c) METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise the Option and specify the
number of whole Shares in respect of which the Option is being exercised. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail, to the Secretary of the Company accompanied by payment of
the Exercise Price as specified below.
No Shares will be issued pursuant to the exercise of the Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange or inter-dealer quotation system upon
which the shares of the Company's common stock may then be listed or quoted.
Assuming such compliance, the Shares shall be considered transferred to the
<PAGE>
Optionee on the date on which the Option is exercised with respect to such
Shares. An Optionee shall have no rights as a shareholder of the Company with
respect to any Shares until the issuance of a stock certificate to the Optionee
for such Shares.
a) METHOD OF PAYMENT. The entire Exercise Price of Shares issued under
this Option shall be payable in cash or by certified check, official bank check,
or the equivalent thereof acceptable to the Company at the time when such Shares
are purchased. Such payment also shall include the amount of any withholding
tax obligation which may arise in connection with the exercise, as determined by
the Company. In addition, payment may be made in any of the following forms as
indicated by an "X" in the preceding parenthesis:
(X) SURRENDER OF STOCK. Payment of all or part of the Exercise Price and
any withholding taxes may be made all or in part with Shares which have already
been owned by the Optionee or Optionee's representative for more than months
and which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased pursuant to exercise of the Option.
(X) EXERCISE/SALE. Payment may be made by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the all or part of the Exercise Price and any withholding taxes.
(X) EXERCISE/PLEDGE. Payment may be made by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan, and
to delivery all or part of the loan proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.
a) TERMINATION OF SERVICE. In the event that the Optionee's Service as
an Employee terminates:
i) As a result of such Optionee's death or Total and Permanent
Disability, the term of the Option shall expire twelve months after such death
or Total and Permanent Disability but not later than the expiration date
specified in Section 4 above.
ii) As a result of termination by the Company for cause, the term of
the Option shall expire thirty days after the Company's notice or advice of such
termination is dispatched to Optionee, but not later than the expiration date
specified in Section 4 above. For purposes of this paragraph (ii), "cause"
shall mean an act of embezzlement, fraud, dishonesty, breach of fiduciary duty
to the Company, or the deliberate disregard of rules of the Company which
results in loss, damage or injury to the Company, the unauthorized disclosure of
any of the secrets or confidential information of the Company, the inducement of
any client or customer of the Company to beak any contract with the Company, or
the inducement of any principal for whom the Company acts as agent to terminate
such agency relationship, the engagement in any conduct which constitutes unfair
competition with the Company, the removal of Optionee from office by any court
or bank regulatory agency, or such other similar acts which the Committee in its
discretion determines to constitute good cause for termination of Optionee's
Service. As used in this paragraph (ii), Company includes
<PAGE>
Subsidiaries of the Company.
iii) As a result of termination for any reason other than Total and
Permanent Disability, death or cause, the term of the Option shall expire three
months after such termination, but not later than the original expiration date
specified in Section 5 above.
Neither the Plan nor this Option shall be deemed to give Optionee a right
to remain an Employee or consultant of the Company or Subsidiary. The company
and its Subsidiaries reserve the right to terminate the service of any Employee
or consultant at any time, with or without cause, subject to applicable laws and
the terms of any written employment agreement.
1. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will, by written beneficiary designation or by the laws
of descent and distribution, and may be exercised during the lifetime of
Optionee only by Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigned of the Optionee.
2. ADJUSTMENT OF SHARES. In the event of a subdivision of the outstanding
shares of common stock of the Company, a declaration of a dividend payable in
Shares, a declaration of a dividend payable in a form other than Shares in an
amount that has a material effect on the value of Shares, a combination or
consolidation of the outstanding shares of common stock (by reclassification or
otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a
similar occurrence, the Company shall make appropriate adjustments in the number
of Shares covered by the Option and in the Exercise Price of the Option.
In the event that the Company is a party to a merger or other
reorganization, the Option shall be subject to the agreement of merger or
reorganization. Subject to the provisions of Section 6(e)(i) of the Plan, such
agreement may provide, without limitation, for the assumption of all outstanding
options by the surviving corporation or its parent, for their continuation by
the Company (if the Company is a surviving corporation), for payment of a per-
Share cash settlement equal to the difference between the amount to be paid for
one Share under such agreement and the Exercise Price, or for the acceleration
of the exercisability followed by the cancellation of any option not exercised,
in all cases without the optionee's consent. Any cancellation shall not occur
until after such acceleration is effective and optionees have been notified of
such acceleration and have had reasonable opportunity to exercise their options.
Except as provided in this Section, Optionee shall have no rights by reason
of any subdivision or consolidation of shares of stock of any class, the payment
or any dividend or any other increase or decrease in the number of share of
stock of any class. Any issue by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect,
an no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to the Option. The grant of this Option
pursuant to the Plan shall not affect any way the right or power of the Company
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
<PAGE>
1. TAXATION UPON EXERCISE OF OPTION. Optionee understands that upon exercise
of this Option, he will generally recognize income for tax purposes in an amount
equal to the excess of the then Fair Market Value of the Shares over the
exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
the Company may require the Optionee to make a cash payment to cover such
liability as a condition of exercise of this Option. The Optionee may elect to
pay such tax by (i) requesting the Company to withhold a sufficient number of
shares from the shares otherwise due upon exercise or (ii) by delivering a
sufficient number of shares of the Company's common stock which have been
previously held by the Optionee for such a period of time as the Committee may
require. The aggregate value of the shares withhold or delivered, as determined
by the Committee must be sufficient to satisfy all such applicable taxes, except
as otherwise permitted by the Committee. If the Optionee is subject to Section
16 of the Securities Exchange Act of 1934, as amended, the Optionee's election
must be made in compliance with rules and procedures established by the
Committee.
Grant Date:
---------------
GREATER BAY BANCORP
By:
---------------------------
Steven C. Smith
Executive Vice President
Chief Operating Officer
and Chief Financial Officer
Optionee represents that Optionee is familiar with the terms and provisions
of this Option and hereby accepts the same subject to all the terms and
provisions hereof. Optionee hereby agrees to accept as binding, conclusive and
final all decision, or interpretations of the Board of Directors or its duly
appointed Committee upon any questions arising under the Plan.
Dated:
----------------------
-----------------------------
Optionee
<PAGE>
ADDENDUM
TO
NONSTATUTORY STOCK OPTION AGREEMENT
This Addendum to Nonstatutory Stock Option Agreement ("addendum") is hereby
entered into between Greater Bay Bancorp, a California corporation (the
"Company"), and ______________ ("Optionee") pursuant to the following recitals:
WHEREAS, the Company and the Optionee entered into a Nonstatutory Stock
Option Agreement dated as of _____________ (the "Agreement");
WHEREAS, the Agreement is a standard form nonqualified stock option
agreement utilized by the Company (the "Option");
WHEREAS, Section 6 of the Agreement restricts transferability of the Option
by the Optionee; and
WHEREAS, the Company and the Optionee wish to amend Section 6 of the
Agreement to increase transferability of the Option.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises of the parties, and other good and valuable consideration (the receipt
and sufficiency of which is hereby acknowledged), the Company and the Optionee
hereby agree as follows:
i) Section 6. of the Agreement is hereby amended to provide as follows;
6. Non-Transferability of Option
(a) Except as provided below, this Option may not be transferred in
any manner other than by will, by written beneficiary designation or by the laws
of descent and distribution, and may be exercised during the lifetime of
Optionee only by Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.
(b) Optionee may transfer this Option in whole or in part to the
following persons (and only the following persons): (i) Optionee's spouse,
former spouse, children (including adopted children), step children,
grandchildren, parents, grandparents, brothers, sisters, aunts, uncles, nieces,
nephews, first cousins, mother-in-law, father-in-law, brothers-in-law, or
sisters-in-law ("Family Members"), or such other persons as may be approved in
writing by the Committee in its sole and absolute discretion ("Approved
Transferees"), or (ii) a trust or trusts for the exclusive benefit of any such
Family Members or Approved Transferees.
(c) In order to effectuate a transfer pursuant to 9b) above, the
transfer must be in writing in an instrument submitted to the Company within ten
(10) business days after its execution. The Company may grant or withhold its
consent to the transfer or the terms of the transfer in its sole and absolute
discretion. In the event the Company does not notify Optionee in writing of its
disapproval of the transfer or its terms within ten (10) business days of
receipt by the Company of a copy of the written transfer instrument from the
Optionee, the transfer shall be deemed approved.
(d) Transfers of this Option under (b) above may not be a transfer for
<PAGE>
consideration (for example, sales or exchanges of the Option are not permitted).
(e) Family Members and Approved Transferees may not retransfer this
Option in whole or in part other than by will or by the laws of descent and
distribution, and a transferred Option may be exercised during the lifetime of
the transferee only by such transferee.
(f) Following any transfer hereunder, the Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
the transfer. The term "Optionee" shall be deemed to refer to the transferee.
The events of termination of employment of Section 5(e) shall continue to be
applied with respect to the original Optionee rather than the transferee,
following which the Option shall be exercisable by the transferee only to the
extent and for the periods specified in Section 5(e).
2. Except as provided in Section 1 above, the original terms of the
Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of
the date set forth below.
Dated: OPTIONEE
-----------------------------
GREATER BAY BANCORP
a California Corporation
By:
-----------------------------
Compensation Committee Member
