<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_} Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GREATER BAY BANCORP
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
GREATER BAY BANCORP
----------------
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
----------------
DATE: TUESDAY, MAY 26, 1998
TIME: 5:30 P.M.
PLACE: STANFORD PARK HOTEL
100 EL CAMINO REAL
MENLO PARK, CALIFORNIA 94025
<PAGE>
[GBB LETTERHEAD]
April , 1998
Dear Shareholder:
It is my pleasure to invite you to Greater Bay Bancorp's 1998 Annual Meeting
of Shareholders.
We will hold the meeting on Tuesday, May 26, 1998, at 5:30 p.m., at the
Stanford Park Hotel, 100 El Camino Real, Menlo Park, California 94025. In
addition to the formal items of business, I will review the major developments
of 1997, answer your questions and discuss Greater Bay's future prospects.
This booklet includes the Notice of Annual Meeting and the Proxy Statement.
The Proxy Statement describes the business that we will conduct at the meeting
and provides information about Greater Bay.
Your vote is important. Whether or not you plan to attend the meeting, please
complete, date, sign and return the enclosed proxy card promptly. If you attend
the meeting and prefer to vote in person, you may do so.
We look forward to seeing you at the meeting.
Sincerely,
/s/ David L. Kalkbrenner
David L. Kalkbrenner
President and Chief Executive Officer
<PAGE>
GREATER BAY BANCORP
----------------
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
----------------
DATE: TUESDAY, MAY 26, 1998
TIME: 5:30 P.M.
PLACE: STANFORD PARK HOTEL
100 EL CAMINO REAL
MENLO PARK, CALIFORNIA 94025
Dear Shareholders:
At our 1998 Annual Meeting, we will ask you to:
. Elect four directors to each serve for a term of three years;
. Approve an amendment to our Bylaws changing the range of the number of
persons who may serve on our Board of Directors;
. Ratify the selection of Coopers & Lybrand L.L.P. as our independent
accountants for 1998; and
. Transact any other business that may properly be presented at the Annual
Meeting.
If you were a shareholder of record at the close of business on March 31,
1998, you may vote at the Annual Meeting.
Article IV, Section 2 of our Bylaws provides for the nomination of directors
in the following manner:
"Nomination for election of directors may be made by the Board of Directors
or by any holder of any outstanding class of capital stock of the corporation
entitled to vote for the election of directors. Notice of intention to make
any nominations shall be made in writing and shall be delivered or mailed to
the President of the corporation not less than twenty-one (21) days nor more
than sixty (60) days prior to any meeting of shareholders called for the
election of directors; provided, however, that if less than twenty-one (21)
days' notice of the meeting is given to shareholders, such notice of intention
to nominate shall be mailed or delivered to the President of the corporation
not later than the close of business on the tenth (10th) day following the day
on which the notice of meeting was mailed; provided further, that if notice of
such meeting is sent by third class mail (if permitted by law), no notice of
intention to make nominations shall be required. Such notification shall
contain the following information to the extent known to the notifying
shareholder:
(a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee;
(c) the number of shares of capital stock of the corporation owned by each
proposed nominee;
(d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the corporation owned by the
notifying shareholder.
Nominations not made in accordance herewith may, in the discretion of the
Chairman of the meeting, be disregarded and upon the Chairman's instructions
the inspectors of election can disregard all votes cast for each such nominee.
A copy of this paragraph shall be set forth in a notice to shareholders of any
meeting at which directors are to be elected."
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE. WE URGE YOU TO SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER
<PAGE>
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING,
YOU MAY THEN WITHDRAW YOUR PROXY AND VOTE IN PERSON. IN ORDER TO FACILITATE
THE PROVIDING OF ADEQUATE ACCOMMODATIONS, PLEASE INDICATE ON THE PROXY WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING.
By Order of the Board of Directors
/s/ Warren R. Thoits
Warren R. Thoits
Corporate Secretary
Palo Alto, California
Dated: April , 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING........................... 1
Why Did You Send Me this Proxy Statement?............................... 1
Who is Entitled to Vote?................................................ 1
What Constitutes a Quorum?.............................................. 1
How Many Votes Do I Have?............................................... 1
How Do I Vote By Proxy?................................................. 1
May I Change My Vote After I Return My Proxy?........................... 2
How Do I Vote in Person?................................................ 2
What Vote is Required to Approve Each Proposal?......................... 2
Proposal 1: Elect Four Directors...................................... 2
Proposal 2: Approve Amendment to Bylaws Changing the Range of the
Number of Directors.................................................. 2
Proposal 3: Ratify Selection of Independent Public Accountants........ 2
The Effect of Broker Non-Votes.......................................... 2
Is Voting Confidential?................................................. 3
What are the Costs of Soliciting these Proxies?......................... 3
How Do I Obtain an Annual Report on Form 10-K?.......................... 3
INFORMATION ABOUT GREATER BAY STOCK OWNERSHIP............................. 4
Does Anyone Own 5% or More of Greater Bay's Common Stock?............... 4
How Much of Greater Bay's Common Stock is Owned by Directors and
Executive Officers?.................................................... 4
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS........................ 6
The Board of Directors.................................................. 6
The Committees of the Board............................................. 6
Compensation Committee Interlocks and Insider Participation............. 6
Section 16(a) Beneficial Ownership Reporting Compliance by Directors and
Executive Officers..................................................... 7
How We Compensate Directors............................................. 7
Certain Relationships and Related Transactions.......................... 7
Executive Officers...................................................... 8
How We Compensate Executive Officers.................................... 9
Employment Contracts, Termination of Employment and Change in Control
Arrangements........................................................... 11
Executive Committee's Report on Executive Compensation.................. 14
The Report.............................................................. 14
Performance Graph....................................................... 17
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD.......................... 18
Proposal 1: Elect Four Directors........................................ 18
Proposal 2: Approve Amendment to our Bylaws Changing the Permitted
Number of Directors.................................................... 20
Proposal 3: Ratify Selection of Independent Public Accountants for 1998. 20
OTHER BUSINESS............................................................ 22
INFORMATION ABOUT SHAREHOLDER PROPOSALS................................... 22
</TABLE>
i
<PAGE>
PROXY STATEMENT FOR GREATER BAY BANCORP
1998 ANNUAL MEETING OF SHAREHOLDERS
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this Proxy Statement and the enclosed proxy card because our
Board of Directors is soliciting your proxy to vote at the 1998 Annual Meeting
of Shareholders. This Proxy Statement summarizes the information you need to
know to cast an informed vote at the Annual Meeting. However, you do not need
to attend the Annual Meeting to vote your shares. Instead, you may simply
complete, sign and return the enclosed proxy card.
Along with this Proxy Statement, we are also sending you the Greater Bay
Bancorp 1997 Annual Report, which includes our financial statements.
WHO IS ENTITLED TO VOTE?
We will begin sending this Proxy Statement, the attached Notice of Annual
Meeting and the enclosed proxy card on April , 1998 to all shareholders
entitled to vote. Shareholders who owned Greater Bay common stock at the close
of business on March 31, 1998 are entitled to vote. On this record date, there
were 4,074,008 shares of Greater Bay common stock outstanding. Greater Bay
common stock is our only class of voting stock. We are also authorized to
issue up to 4,000,000 shares of non-voting preferred stock, but have not yet
chosen to do so.
WHAT CONSTITUTES A QUORUM?
A majority of our shareholders entitled to vote at the meeting must be
present, in person or by proxy, in order to constitute a quorum. We can only
conduct the business of the meeting if a quorum has been established. We will
include proxies marked as abstentions and broker non-votes in determining the
number of shares present at the meeting.
HOW MANY VOTES DO I HAVE?
Each share of Greater Bay common stock that you owned at the close of
business on March 31, 1998 entitles you to one vote. The proxy card indicates
the number of votes that you have.
HOW DO I VOTE BY PROXY?
Whether or not you plan to attend the Annual Meeting, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in
the envelope provided. Returning the proxy card will not affect your right to
attend the Annual Meeting and vote.
If you properly fill in your proxy card and send it to us in time to vote,
your "proxy" (one of the individuals named on your proxy card) will vote your
shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares as recommended by the Board
of Directors as follows:
. "FOR" the election of all four nominees for director (see pages 18-20),
. "FOR" approval of the amendment to our Bylaws (see page 20), and
. "FOR" ratification of the selection of independent accountants for 1998
(see pages 20-21).
If any other matter is presented, your proxy will vote in accordance with
the recommendation of the Board of Directors, or, if no recommendation is
given, in accordance with his best judgment. At the time this Proxy Statement
went to press, we knew of no matters which needed to be acted on at the Annual
Meeting, other than those discussed in this Proxy Statement.
1
<PAGE>
If you hold your shares of Greater Bay common stock in "street name" (that
is, through a broker or other nominee) and you fail to instruct your broker or
nominee as to how to vote such shares of common stock, your broker or nominee
may, in its discretion, vote your shares "FOR" the election of the nominees
for director set forth herein, and "FOR" ratification of the appointment of
Coopers & Lybrand L.L.P. as our independent public accountants for the year
ending December 31, 1998. Your broker is not entitled to vote on the proposal
to amend our Bylaws unless it receives instructions from you.
MAY I CHANGE MY VOTE AFTER I RETURN MY PROXY?
Yes. If you fill out and return the enclosed proxy card, you may change your
vote at any time before the vote is conducted at the Annual Meeting. You may
change your vote in any one of three ways:
. You may send to Greater Bay's Corporate Secretary another completed proxy
card with a later date.
. You may notify Greater Bay's Corporate Secretary in writing before the
Annual Meeting that you have revoked your proxy.
. You may attend the Annual Meeting and vote in person.
HOW DO I VOTE IN PERSON?
If you plan to attend the Annual Meeting and vote in person, we will give
you a ballot form when you arrive. However, if your shares are held in the
name of your broker, bank or other nominee, you must bring an account
statement or letter from the nominee indicating that you were the beneficial
owner of the shares on March 31, 1998, the record date for voting.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
PROPOSAL 1: The four nominees for director who receive the most
Elect Four Directors votes will be elected. So, if you do not vote for a
particular nominee, or you indicate "WITHHOLD
AUTHORITY" to vote for a particular nominee on your
proxy card, your vote will not count either "for" or
"against" the nominee. Our Articles of Incorporation
do not permit cumulative voting.
PROPOSAL 2: The affirmative vote of a majority of the votes cast
Approve Amendment to at the Annual Meeting on this proposal is required to
Bylaws Changing the approve the Amendment to our Bylaws. So if you
Range of the Number "ABSTAIN" from voting, it has the same effect as if
of Directors you voted "against" this proposal.
PROPOSAL 3: The affirmative vote of a majority of the votes cast
Ratify Selection of at the Annual Meeting on this proposal is required to
Independent Public Selection of Independent ratify the selection of
Accountants independent public accountants. So, if you "ABSTAIN"
from voting, it has the same effect as if you voted
"against" this proposal.
THE EFFECT OF BROKER NON-VOTES
If your broker holds your shares in its name, the
broker will be entitled to vote your shares on
Proposals 1 and 3 even if it does not receive
instructions from you. Your broker is not entitled to
vote on Proposal 2 unless it receives instructions
from you.
If your broker does not vote your shares on Proposal
1, it will have no effect on the outcome of the
proposal.
If your broker does not vote your shares on Proposal
3, it will have the same effect as a vote "against"
the proposal.
2
<PAGE>
For Proposal 2, a broker non-vote has the same effect
as a vote "against" this proposal.
IS VOTING CONFIDENTIAL?
We keep all the proxies, ballots and voting tabulations private as a matter
of practice. We only let our Inspectors of Election (representatives of U.S.
Stock Transfer Corporation) and certain employees of our independent
tabulating agent (U.S. Stock Transfer Corporation) examine these documents. We
will not disclose your vote to management unless it is necessary to meet legal
requirements. We will, however, forward to management any written comments you
make, on the proxy card or elsewhere.
WHAT ARE THE COSTS OF SOLICITING THESE PROXIES?
We will pay all the costs of soliciting these proxies. In addition to
mailing proxy soliciting material, our directors, officers and employees also
may solicit proxies in person, by telephone or by other electronic means of
communication for which they will receive no compensation. We will ask banks,
brokers and other institutions, nominees and fiduciaries to forward the proxy
materials to their principals and to obtain authority to execute proxies. We
will then reimburse them for their reasonable expenses. We have hired
Shareholder Communications Corporation to seek the proxies of custodians, such
as brokers, who hold shares which belong to other people. This service will
cost Greater Bay approximately $10,000.
HOW DO I OBTAIN AN ANNUAL REPORT ON FORM 10-K?
IF YOU WOULD LIKE A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1997 THAT WE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WE WILL SEND YOU ONE WITHOUT CHARGE. PLEASE WRITE TO:
GREATER BAY BANCORP
2860 WEST BAYSHORE ROAD
PALO ALTO, CALIFORNIA 94303
ATTENTION: SHAWN E. SAUNDERS, CONTROLLER
3
<PAGE>
INFORMATION ABOUT GREATER BAY STOCK OWNERSHIP
DOES ANYONE OWN 5% OR MORE OF GREATER BAY'S COMMON STOCK?
No. As of March 31, 1998, we did not know of any individual or company which
beneficially owned 5% or more of Greater Bay common stock.
HOW MUCH OF GREATER BAY'S COMMON STOCK IS OWNED BY DIRECTORS AND EXECUTIVE
OFFICERS?
The following table shows, as of March 31, 1998, "beneficial ownership" of
Greater Bay common stock by each of Greater Bay's directors, nominees for
director and executive officers, and for directors and executive officers as a
group. The Securities and Exchange Commission has defined "beneficial
ownership" to mean more than ownership in the usual sense. For example, a
person has beneficial ownership of a share not only if they own it in the
usual sense, but also if they have the power to vote, sell or otherwise
dispose of the share. Beneficial ownership also includes that number of shares
which a person has the right to acquire within 60 days.
Two or more persons might count as beneficial owners of the same share.
Unless otherwise indicated in the table below, no director or executive
officer of Greater Bay shares beneficial ownership of the same Greater Bay
common stock with anyone else.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED(2)
------------------
NUMBER PERCENTAGE
OF OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES CLASS(3)
--------------------------------------- ------- ----------
<S> <C> <C>
George R. Corey(4).......................................... 42,249 1.04
John W. Gatto(5)............................................ 23,386 0.57
David R. Hood(6)............................................ 22,787 0.56
James E. Jackson(7)......................................... 49,699 1.22
David L. Kalkbrenner(8)..................................... 49,333 1.21
Rex D. Lindsay(9)........................................... 47,322 1.16
George M. Marcus(10)........................................ 35,452 0.87
Duncan L. Matteson(11)...................................... 47,578 1.17
Glen McLaughlin(12)......................................... 31,703 0.78
Dick J. Randall(13)......................................... 107,594 2.64
Donald H. Seiler(14)........................................ 38,619 0.95
Roger V. Smith(15).......................................... 1,483 0.04
Steven C. Smith(16)......................................... 37,160 0.91
Shawn E. Saunders(17)....................................... 768 0.02
Warren R. Thoits(18)........................................ 32,993 0.81
Edwin E. van Bronkhorst(19)................................. 29,408 0.72
All directors and executive officers as a group (16
persons)(20)............................................... 597,534 14.67
</TABLE>
- --------
1) The address for each of the beneficial owners is care of Greater Bay
Bancorp, 2860 West Bayshore Road, Palo Alto, California 94303.
2) Includes shares issuable upon the exercise of stock options exercisable
within 60 days of March 31, 1998.
3) Shares of Greater Bay common stock issuable upon exercise of stock options
exercisable within 60 days of March 31, 1998 are deemed outstanding for
computing the percentage of the person holding such securities but are not
deemed outstanding for computing the percentage of any other person.
4) Includes 9,655 shares issuable upon the exercise of options exercisable
within 60 days of March 31, 1998.
5) Includes 6,694 shares issuable upon the exercise of options exercisable
within 60 days of March 31, 1998.
6) Includes 5,526 shares held in an IRA for Mr. Hood, 1,595 shares held
jointly by Mr. Hood and his spouse, 683 shares in a 401(k) plan for Mr.
Hood and 14,983 shares issuable upon the exercise of options exercisable
within 60 days of March 31, 1998.
7) Includes 32,229 shares held jointly by James E. Jackson and his spouse,
1,491 shares held in an IRA for the benefit of Mr. Jackson's spouse, 7,063
shares held in an IRA for Mr. Jackson, 1,385 shares held in a 401(k)
4
<PAGE>
plan for Mr. Jackson, and 7,531 shares issuable upon the exercise of
options exercisable within 60 days of March 31, 1998.
8) Includes 9,997 shares held in an IRA for Mr. Kalkbrenner and 19,312 shares
issuable upon the exercise of stock options exercisable within 60 days of
March 31, 1998.
9) Includes 38,072 shares held by the Rex D. and Leanor L. Lindsay Family
Trust and 9,250 shares issuable upon the exercise of options exercisable
within 60 days of March 31, 1998.
10) Includes 4,728 shares issuable upon the exercise of stock options
exercisable within 60 days of March 31, 1998.
11) Includes 35,589 shares held jointly with Mr. Matteson's spouse as trustees
of the Matteson Family Trust, 11,000 shares held by the Matteson Realty
Services, Inc. Defined Benefit Employees' Retirement Trust and 989 shares
issuable upon the exercise of stock options exercisable within 60 days of
March 31, 1998.
12) Includes 16,817 shares issuable upon the exercise of stock options
exercisable within 60 days of March 31, 1998.
13) Includes 104,991 shares held by the Dick J. and Carolyn L. Randall Trust
and 2,418 shares issuable upon the exercise of stock options exercisable
within 60 days of March 31, 1998.
14) Includes 33,491 shares held jointly with Mr. Seiler's spouse as trustees
of the Seiler Family Trust and 5,128 shares issuable upon the exercise of
stock options exercisable within 60 days of March 31, 1998.
15) Includes 500 shares held in an IRA for Mr. Smith.
16) Includes 2,555 shares held in a 401(k) Plan for Mr. Smith, 5,958 shares
held jointly by Mr. Smith and his spouse, 3,766 shares held in an IRA for
Mr. Smith, 370 shares held in an IRA for his spouse and 24,511 shares
issuable upon the exercise of stock options exercisable within 60 days of
March 31, 1998.
17) Includes 500 shares issuable upon the exercise of options exercisable
within 60 days of March 31, 1998.
18) Includes 12,082 shares held by Mr. Thoits as trustee of the Warren R.
Thoits Trust dated December 30, 1983, 5,836 shares held by Thoits
Brothers, Inc., 10,947 shares for which Mr. Thoits is the record holding
trustee and 4,128 shares issuable upon the exercise of stock options
exercisable within 60 days of March 31, 1998.
19) Includes 22,580 shares held jointly with Mr. van Bronkhorst's spouse as
trustees of the E. E. van Bronkhorst Trust dated July 12, 1997 and 6,828
shares issuable upon the exercise of stock options exercisable within 60
days of March 31, 1998.
20) Includes 128,244 shares issuable upon the exercise of stock options
exercisable within 60 days of March 31, 1998.
5
<PAGE>
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
THE BOARD OF DIRECTORS
The Board of Directors oversees our business and monitors the performance of
management. In accordance with corporate governance principles, the Board does
not involve itself in day-to-day operations. The directors keep themselves
informed through, among other things, discussions with the Co-Chairmen, other
key executives and our principal external advisers (legal counsel, outside
auditors, investment bankers and other consultants), by reading reports and
other materials that we send them and by participating in Board and committee
meetings.
Greater Bay's Bylaws currently permit the number of Board members to range
from seven (7) to thirteen (13), leaving the Board authority to fix the exact
number of directors within that range. The Board has recently adopted, subject
to shareholder approval, an amendment of the Bylaws that permits the number of
Board members to range from nine (9) to seventeen (17). The Board has fixed
the exact number of directors at thirteen (13).
The Board met 12 times during 1997. Each incumbent director attended at
least 75% of the total number of Board meetings plus meetings of the standing
committees on which that particular director served.
THE COMMITTEES OF THE BOARD
The Board may delegate portions of its responsibilities to committees of its
members. These "standing committees" of the Board meet at regular intervals to
attend to their particular areas of responsibility. Our Board has five
standing committees: an Audit Committee, an Executive Committee, a Loan
Committee, a Trust Oversight Committee and an Investment/Asset-Liability
Management Committee ("Investment/ALCO Committee").
The Audit Committee directs our external auditors to insure that they
satisfy the legal and technical requirements necessary for the protection of
our shareholders, employees and directors. The Audit Committee annually
recommends a firm of public accountants to serve as external auditors to the
Board. It also makes certain that the external auditors have the independence
necessary to freely examine all of Greater Bay's books and records. The Audit
Committee held four meetings during 1997. Mr. Seiler chairs the Audit
Committee and Messrs. McLaughlin, Randall and Thoits are also members.
Our Executive Committee also acts as our Executive Compensation Committee
and Nominating Committee. In performing its duties as the Executive
Compensation Committee, the Executive Committee determines the salary and
bonus structure of Greater Bay's executive officers. It also supervises
compensation for our other officers, administers our retirement plan, and
determines appropriate awards under the Greater Bay Bancorp 1996 Stock Option
Plan.
In performing its duties as the Nominating Committee, the Executive
Committee selects management nominees to stand for election as directors. It
also considers nominations made to the Board by shareholders, provided such
nominations comply with Greater Bay's Bylaws. The Executive Committee held
four meetings during 1997. Mr. Matteson chairs the Executive Committee and
Messrs. Gatto, Kalkbrenner, Lindsay and van Bronkhorst also are members.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Executive Committee acts as our Executive Compensation Committee. The
members of the Executive Committee are Messrs. Gatto, Matteson, Kalkbrenner,
Lindsay and van Bronkhorst. None of these persons serves or has served as an
officer or employee of Greater Bay or its subsidiaries, except for Mr.
Kalkbrenner, who serves as the Chief Executive Officer and President of
Greater Bay. In addition, Mr. Matteson has an interest in a building leased by
Mid-Peninsula Bank ("MPB"). See "Certain Relationships and Related
Transactions" herein.
6
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE BY DIRECTORS AND
EXECUTIVE OFFICERS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors and executive officers to file reports with the Securities and
Exchange Commission and The Nasdaq Stock Market on changes in their beneficial
ownership of Greater Bay common stock, and to provide Greater Bay with copies
of the reports.
Based on our review of these reports or of certifications to us that no
report was required to be filed, we believe that all of our directors and
executive officers complied with all Section 16(a) filing requirements
applicable to them.
HOW WE COMPENSATE DIRECTORS
Greater Bay has a policy of compensating non-officer directors for their
service on the Board and for their attendance at committee meetings. In 1997,
the Co-Chairmen of the Board of Greater Bay received annual retainers of
$14,000. All other non-officer directors received annual retainers of $9,000.
Loan Committee members received retainers of $6,000, Trust Oversight Committee
members received retainers of $3,000, and Audit and Investment/ALCO Committee
members received retainers of $1,000. Members of the Boards of Directors of
Cupertino National Bank ("CNB") and MPB received retainers of $1,800 each,
while each director of Peninsula Bank of Commerce ("PBC") received $9,600. Mr.
Kalkbrenner's compensation is discussed below in the section entitled "How We
Compensate Executive Officers." The estimated total compensation for the Board
of Directors in 1997 was $144,500.
In addition, directors are eligible to participate in Greater Bay's 1996
Option Plan and the Greater Bay 1997 Elective Deferred Compensation Plan. All
stock options granted to non-officer directors vest in equal annual
installments over five-year periods beginning on the date of grant, subject to
continued service on the Board of Directors. Directors are also entitled to
the protection of certain indemnification provisions in our Articles of
Incorporation and Bylaws.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Greater Bay, through its subsidiaries has had and expects in future to have
banking transactions in the ordinary course of business with our directors and
officers or associates of our directors and officers. We may also have banking
transactions with corporations of which our directors or officers may own a
controlling interest, or also serve as directors or officers. Such
transactions have taken place and will take place on substantially the same
terms, including interest and collateral, as those prevailing for comparable
transactions with others. We believe that such transactions involving loans
did not present more than normal risk of noncollectibility or present other
unfavorable features. The Federal Reserve Act, as amended, limits the loans to
our executive officers by amount and purpose.
MPB leases its offices at 420 Cowper Street, Palo Alto, California 94301
from MPB Associates, a tenant-in-common arrangement. Three directors of
Greater Bay, Messrs. Matteson, Seiler and Thoits, and four other directors of
MPB, together own an approximately 51% interest in MPB Associates. The
acquisition of MPB's leased premises by MPB Associates did not result in a
change in the terms of MPB's lease.
The lease, which originally expired in May 1993, has been extended through
January 2000. MPB pays an annual rental of $560,000 for the entire leased
space. Additionally, MPB pays real property taxes, utilities, and building
insurance, to the extent they exceed, on an annual basis, $1.40 per rentable
square foot, $1.60 per rentable square foot, and $0.17 per rentable square
foot, respectively. MPB received a rent adjustment on June 1, 1997, and will
receive similar adjustments every following 12 months, based on the change in
the immediately preceding year over 1992 in the Consumer Price Index for All
Urban Consumers, San Francisco/Oakland Metropolitan Area, All-Items (1967 =
100) as published by the U.S. Department of Labor, Bureau of Labor Statistics.
The lease also contains a provision granting MPB a right of first refusal to
purchase the building during the term of the lease upon the same terms and
conditions that the landlord is willing to accept from a third party.
7
<PAGE>
EXECUTIVE OFFICERS
Set forth below are the names and biographies of Greater Bay's executive
officers.
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
------------ --------------------------------------------
<C> <S>
David L. Kalkbrenner, (58).. President, Chief Executive Officer and director
of Greater Bay, and director of MPB. He has held
such positions with Greater Bay since 1994 and
with MPB since 1987. In addition, Mr. Kalkbrenner
served as President and Chief Executive Officer
of MPB from 1987 until March 1998. He was
employed by Crocker National Bank from 1963 to
1986. From 1981 to 1986, he served as First Vice
President and Regional Manager of the Mid-
Peninsula region, with administrative offices
located in Palo Alto. He was responsible for the
administration of 14 full-service branches from
San Carlos to Sunnyvale, a business banking
center in Palo Alto and the private banking
office, also located in Palo Alto. From 1977 to
1981, Mr. Kalkbrenner was Vice President and
Manager of the main office of Crocker National
Bank in Palo Alto. He is a member of the board of
directors of the College of Notre Dame and is a
former director of the Palo Alto Chamber of
Commerce and the Community Association for the
Retarded.
Steven C. Smith, (46)....... Executive Vice President, Chief Operating Officer
and Chief Financial Officer of Greater Bay since
November 1996, and Executive Vice President and
Chief Operating Officer of CNB since 1995. Mr.
Smith is a certified public accountant who joined
Cupertino National Bancorp and CNB in December
1993 as Senior Vice President and Chief Financial
Officer, and in 1995 was named Executive Vice
President and Chief Operating Officer of
Cupertino National Bancorp and CNB. From July
1993 to December 1993, Mr. Smith served as
Executive Vice President and Chief Financial
Officer of Commercial Pacific Bank. From 1992 to
July 1993, Mr. Smith served as Executive Vice
President and Chief Financial Officer of First
Charter Bank. From 1984 to 1991, Mr. Smith served
as Senior Vice President of Finance and Treasurer
of Fidelity Federal Bank, a federal savings bank.
David R. Hood, (53)......... Executive Vice President and Chief Lending
Officer of Greater Bay since November 1996. Since
April 1995 he has served as Executive Vice
President and Chief Lending Officer of CNB. From
April 1985 to March 1995, he held the positions
of Vice President, Senior Vice President, and
Senior Loan Officer, Executive Vice President and
Senior Loan Officer, and President of University
Bank & Trust. From 1967 to 1985 Mr. Hood held
various positions, the most recent of which was
Vice President and Manager of the San Mateo
Business Loan Center for Wells Fargo, N.A.
Shawn E. Saunders, (38)..... Senior Vice President and Controller of Greater
Bay, and Chief Financial Officer of CNB and MPB
since March 1997 and PBC since March 1998. Mr.
Saunders is a certified public accountant. From
August 1995 to February 1997 he served as Vice
President and Chief Financial Officer of the
Orange County Business Council Credit Union. From
February 1993 to July 1995 Mr. Saunders served as
Vice President and Controller of All Pacific
Mortgage Company. From 1985 to 1993 Mr. Saunders
held various positions with Coopers & Lybrand
L.L.P., most recently as an Audit Manager.
</TABLE>
8
<PAGE>
HOW WE COMPENSATE EXECUTIVE OFFICERS
The following table summarizes information about compensation paid to or
earned by our Chief Executive Officer, David Kalkbrenner. It also summarizes
the compensation paid to or earned by our three other most highly compensated
officers, who are the only executive officers of Greater Bay who perform
policy-making functions and who earned salary and bonus compensation in excess
of $100,000 during 1997. In all cases, the officers concerned earned all the
compensation shown for their services, in all their capacities, to Greater
Bay, its predecessors, or its subsidiaries during the years 1997, 1996 and
1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- -------------------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
POSITION YEAR (1)($) (2)($) (3)($) (4) (#) (5)($)
------------------ ---- ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David L. Kalkbrenner.... 1997 261,028 225,000 8,400 15,000 88,300
President and CEO of
Greater Bay 1996 182,083 124,000 8,400 20,000 71,054
and MPB 1995 150,000 97,000 8,400 15,000 45,033
Steven C. Smith......... 1997 164,386 130,268 6,000 11,250 37,830
Executive Vice
President, COO and 1996 139,020 70,860 6,000 9,131 28,501
CFO of Greater Bay, EVP
and COO 1995 127,250 48,000 6,000 8,968 7,033
of CNB
David R. Hood........... 1997 150,823 110,000 6,000 7,500 43,968
Executive Vice
President and Chief 1996 124,120 62,490 6,000 7,131 31,354
Lending Officer of
Greater Bay and 1995 85,462 48,000 4,250 13,453 2,153
CNB
Shawn E. Saunders (6)... 1997 84,323 60,000 4,500 7,500 4,210
Senior Vice President
and Controller 1996 -- -- -- -- --
of Greater Bay and
Chief Financial 1995 -- -- -- -- --
Officer of CNB, MPB and
PBC
</TABLE>
- --------
(1) Annual salary includes cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers under Greater Bay's 401(k) Plan.
(2) Amounts indicated as bonus payments were earned for performance during
1997, 1996, and 1995 but paid in the first quarters of 1998, 1997, and
1996, respectively. Also included in amounts indicated as bonus payments
are any amounts deferred at the election of those officers under Greater
Bay's Deferred Compensation Plan.
(3) No executive officer received perquisites or other personal benefits in
excess of the lesser of $50,000 or 10% of each such officer's total annual
salary and bonus during 1997, 1996, or 1995. Amounts shown are for
automobile allowances.
(4) Under the Greater Bay Bancorp 1996 Option Plan (the "1996 Option Plan"),
options may be granted to directors and key, full-time salaried officers
and employees of Greater Bay or its subsidiaries. Options granted under
the 1996 Option Plan are either incentive options or non-statutory
options. Options granted under the 1996 Option Plan become exercisable in
accordance with a vesting schedule established at the time of grant.
Vesting may not extend beyond ten years from the date of grant. Options
granted under the 1996 Option Plan are adjusted to protect against
dilution in the event of certain changes in Greater Bay's capitalization,
including stock splits and stock dividends. All options granted to
executive officers were incentive stock options and have an exercise price
equal to the fair market value of Greater Bay's common stock on the date
of grant. For David L. Kalkbrenner, the amounts shown have been adjusted
to give effect
9
<PAGE>
to a five percent stock dividend in December 1993, and the conversion ratio
pertaining to the merger transaction whereby WestCal National Bank merged
with and into MPB and MPB became a wholly owned subsidiary of Greater Bay,
which transaction was consummated on October 7, 1994. For Steven C. Smith
and David R. Hood, the amounts shown give effect to the conversion ratio
pertaining to the merger between Greater Bay and Cupertino National Bancorp
which became effective on November 27, 1996.
(5) Amounts shown for David L. Kalkbrenner include $2,400 in directors' fees,
$3,903 in term life insurance premiums, $31,800 accrued under his
Executive Salary Continuation Agreement and $6,930 in 401(k) plan matching
contributions in 1995; $2,400 in directors' fees, $11,000 in term life
insurance premiums, $50,529 accrued under his Executive Salary
Continuation Agreement and $7,125 in 401(k) plan matching contributions in
1996; $82,237 accrued under Greater Bay's Supplemental Executive
Retirement Plan and $6,063 in 401(k) plan matching contributions in 1997.
Amounts shown for Steven C. Smith include $4,500 in 401(k) plan matching
contributions and $2,513 to fund retirement benefits in 1995; $4,750 in
401(k) plan matching contributions and $23,751 to fund retirement benefits
in 1996; $31,775 accrued under Greater Bay's Supplemental Executive
Retirement Plan and $6,063 in 401(k) plan matching contributions in 1997.
Amounts shown for David R. Hood, who joined Greater Bay in April 1995,
include $2,153 in payments to fund his retirement benefits in 1995; $4,750
in 401(k) plan matching contributions and $26,604 to fund his retirement
benefits in 1996; $37,905 accrued under Greater Bay's Supplemental Executive
Retirement Plan and $6,063 in 401(k) plan matching contributions in 1997.
Amount shown for Shawn E. Saunders, who joined Greater Bay in March 1997,
includes $4,210 in 401(k) plan matching contributions in 1997.
(6) Amounts shown for Shawn E. Saunders, who joined Greater Bay in March 1997,
are amounts earned for the period March 26, 1997 through December 31,
1997.
The following table sets forth information concerning stock options granted
during the year ended December 31, 1997 to the persons named in the Summary
Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN FISCAL 1997
---------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES % OF TOTAL PRICE APPLICATION FOR
UNDERLYING OPTIONS EXERCISE OPTION TERM(1)
OPTIONS GRANTED TO PRICE(3) EXPIRATION ---------------------
NAME GRANTED(2) EMPLOYEES ($/SH) DATE @5%($) @10% ($)
---- ---------- ---------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
David L. Kalkbrenner.... 15,000 9.62% 49.00 12/16/07 462,238 1,171,401
Steven C. Smith......... 11,250 7.21% 49.00 12/16/07 346,678 878,551
David R. Hood........... 7,500 4.81% 49.00 12/16/07 231,119 585,700
Shawn E. Saunders....... 5,000 3.21% 49.00 12/16/07 154,079 390,467
2,500 1.60% 27.50 03/26/07 43,237 109,570
</TABLE>
- --------
(1) Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only, based on Securities and Exchange Commission rules.
Actual gains, if any, on stock option exercises are dependent on the
future performance of the common stock, overall market conditions and the
option holders' continued employment through the vesting period. The
amounts reflected in this table may not necessarily be achieved. One share
of stock purchased in 1997 at $49.00 would yield profits of $30.82 per
share at 5% appreciation over ten years, or $78.09 per share at 10%
appreciation over the same period. One share of stock purchased in 1997 at
$27.50 would yield profits of $17.29 per share at 5% appreciation over ten
years, or $43.83 per share at 10% appreciation over the same period.
(2) Generally, options granted under the 1996 Option Plan vest at the rate of
20% of the options granted for each full year of the optionee's continuous
employment with Greater Bay and are exercisable to the extent vested. See
also "Employment Contracts, Termination of Employment and Change in
Control Arrangements" herein.
10
<PAGE>
(3) All options listed were granted at the estimated fair market value on the
date of grant.
The following table sets forth the specified information concerning
exercises of options to purchase Greater Bay common stock in the fiscal year
ended December 31, 1997, and unexercised options held as of December 31, 1997,
by the persons named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON OPTIONS AT 12/31/97 (#) 12/31/97 ($)(1)
EXERCISE VALUE ------------------------- -------------------------
NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David L. Kalkbrenner.... 4,682 66,390 17,254 38,267 586,493 717,983
Steven C. Smith......... -- -- 24,511 17,250 899,140 157,513
David R. Hood........... 1,200 18,888 14,983 11,900 549,721 115,500
Shawn E. Saunders....... -- -- -- 7,500 -- 51,250
</TABLE>
- --------
(1) Based on the closing price of Greater Bay common stock on December 31,
1997, the last trading day in 1997, which was $48.00.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Employment Contracts
Effective March 3, 1992, MPB entered into a two-year employment agreement
with its President and Chief Executive Officer, David L. Kalkbrenner, which
provides for automatic one-year extensions, until the agreement is terminated
as described below. The agreement, as amended, provides for, among other
things (a) a base salary of $135,000 per year, which the Board may adjust at
its discretion; (b) a discretionary annual bonus based upon Greater Bay's pre-
tax net profits; (c) in the event that Mr. Kalkbrenner becomes disabled so
that he cannot perform his duties, payment to him of his base salary for six
months, reduced by any amounts received by him from state disability
insurance, worker's compensation, or similar insurance provided by Greater
Bay; (d) four weeks annual vacation; (e) a $500,000 life insurance policy; (f)
an automobile allowance; and (g) reimbursement for ordinary and necessary
expenses incurred by Mr. Kalkbrenner in connection with his employment.
Mr. Kalkbrenner's employment may be terminated under the agreement with or
without cause. Upon Mr. Kalkbrenner's involuntary termination of employment
for any reason or upon his termination of employment on account of a change in
control, Mr. Kalkbrenner will be entitled to receive severance benefits under
the Greater Bay Bancorp Termination and Layoff Pay Plan II or the Greater Bay
Bancorp Change in Control Pay Plan II, as applicable, as described below.
Greater Bay and CNB have also entered into Employment, Severance and
Retirement Benefits Agreements with Steven C. Smith, effective as of September
1, 1994, and David R. Hood, effective as of April 14, 1994. The term of each
agreement commences on the effective date of the agreement and continues until
the termination, retirement, resignation or death of the officer. In addition,
each agreement, as amended, sets the officer's beginning annual salary,
subject to annual cost of living adjustments, with the initial salary payable
to Mr. Smith being set at $135,000 and the initial salary payable to Mr. Hood
being set at $120,000. Each agreement also provides that the officer's
employment may be terminated with or without cause. Upon such officer's
involuntary termination of employment for any reason or upon his termination
of employment on account of a change in control, such officer will be entitled
to receive severance benefits under the Greater Bay Bancorp Termination and
Layoff Pay Plan II or the Greater Bay Bancorp Change in Control Pay Plan II,
as applicable, as described below.
Change in Control Plans
Effective January 1, 1998, our Board of Directors adopted the Greater Bay
Bancorp Change in Control Pay Plan I (the "Change in Control Plan I") and the
Greater Bay Bancorp Change in Control Pay Plan II (the "Change in Control Plan
II") (collectively, the "Plans") to provide eligible employees of Greater Bay
and its
11
<PAGE>
subsidiaries and certain executives of Greater Bay, respectively, with
severance benefits upon their termination of employment on account of a change
in control. The Plans provide that a change in control occurs when Greater
Bay, a subsidiary, branch, division or other entity employing an eligible
employee or covered executive is sold or otherwise transferred in ownership to
new ownership.
The Plans generally provide each participant with a base benefit based on
the participant's pay, full years of service with Greater Bay or its
subsidiary, and his or her title or position at Greater Bay or the subsidiary
as of the date he or she terminates employment, and an added benefit based on
the participant's pay and his or her full years of service as of the date of
his or her termination of employment. "Pay" for purposes of the Plans means
the total annual compensation paid to an employee, including base wages and
average bonuses paid to the employee for the three most recent years.
Under the Change in Control Plan I, in the event of his termination of
employment within two years of a change in control, Shawn E. Saunders, as a
member of Greater Bay's Executive Management Committee, a committee of Greater
Bay's senior officers who handle operational and management issues, will be
entitled to receive a base benefit equal to 12 months of pay and an added
benefit of 2 weeks of pay for each full year of service, up to a maximum
severance benefit of 18 months of pay.
Under the Change in Control Plan II, the Chief Executive Officer ("CEO"),
Chief Operating Officer ("COO"), Chief Financial Officer ("CFO") and Chief
Lending Officer ("CLO") of Greater Bay are the only employees who are
currently eligible to participate. In the event of his termination of
employment within three years of a change in control, David L. Kalkbrenner, in
his capacity as CEO, will be entitled to receive a base benefit equal to 25
months of pay and an added benefit of two weeks of pay for each full year of
service, for a maximum severance benefit of up to three years of pay; Steven
C. Smith, in his capacity as COO and CFO, will be entitled to receive a base
benefit equal to 20 months of pay and an added benefit of 2 weeks of pay for
each full year of service, for a maximum severance of up to two and one half
years of pay, and David R. Hood, in his capacity as CLO, will be entitled to
receive a base benefit equal to 18 months of pay and an added benefit of two
weeks of pay for each full year of service, for a maximum severance benefit of
up to two years of pay.
Termination and Layoff Plans
Our Board has also adopted the Greater Bay Bancorp Termination and Layoff
Pay Plan I (the "Termination Plan I") and the Greater Bay Bancorp Termination
and Layoff Pay Plan II (the "Termination Plan II") (collectively, the
"Plans"), effective January 1, 1998, to provide severance benefits to eligible
employees of Greater Bay or its subsidiaries and certain executives of Greater
Bay, respectively, upon the termination of their employment for reasons
provided in the Plans.
The severence benefits provided under the Plans are based on a participant's
pay and his or her title or position at Greater Bay or the subsidiary as of
the date of his or her involuntary termination of employment or layoff. "Pay"
for purposes of the Plans means the total annual compensation paid to an
employee, including base wages and average bonuses paid to the employee for
the three most recent years.
Under the Termination Plan I, upon his involuntary termination of employment
or layoff, Shawn E. Saunders, as a member of Greater Bay's Executive
Management Committee, will be entitled to receive a severance benefit equal to
12 months of pay.
Under the Termination Plan II, the CEO, COO, CFO and CLO of Greater Bay are
the only employees who are currently eligible to participate. Upon his
involuntary termination of employment or layoff, David L. Kalkbrenner, in his
capacity as CEO, will be entitled to receive a severance benefit equal to 25
months of pay; Steven C. Smith, in his capacity as COO and CFO, will be
entitled to receive a severance benefit equal to 20 months of pay, and David
R. Hood, in his capacity as CLO, will be entitled to receive a severance
benefit equal to 18 months of pay.
12
<PAGE>
Greater Bay's Stock Option Plan
In 1996, our Board of Directors adopted the Greater Bay Bancorp 1996 Stock
Option Plan ("1996 Option Plan"). The 1996 Option Plan allows Greater Bay to
offer selected employees, directors and consultants an opportunity to purchase
Greater Bay common stock. Through this plan, the Board hopes to motivate such
individuals by giving them an ownership interest in Greater Bay's success. The
1996 Option Plan provides for the grant of two types of options. The exercise
of one of these types of options results in the imposition of income tax.
Options granted under the 1996 Option Plan contain a provision which takes
effect upon a "change in control" at Greater Bay. The 1996 Option Plan
provides that a change in control has occurred if: (a) the Board has had a
change in composition, as a result of which fewer than half of the then
serving directors had served as directors of Greater Bay for two or more years
(including prior service to either Cupertino National Bancorp or Mid-Peninsula
Bancorp) before this change; (b) the Board has had a change in composition so
that fewer than half of the directors then serving had received the
affirmative vote of a majority of those directors who had served in office at
either the time of the merger of Cupertino National Bancorp and Mid-Peninsula
Bancorp or two years prior to the change in composition in question, whichever
happened later, and who continued to serve at the time of the new director's
election; or (c) any "person" (as defined by Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) became the direct or beneficial
owner of securities of Greater Bay representing 50% or more of the combined
voting power of our then outstanding securities. Prior to the happening of any
such change in control, all options granted under the 1996 Option Plan will
become immediately exercisable.
Supplemental Executive Retirement Plan
In December 1997, our Board of Directors approved the implementation of the
Greater Bay Bancorp Supplemental Executive Retirement Plan ("SERP"), which
provides supplemental retirement benefits to a select group of management or
highly compensated employees of Greater Bay and its subsidiaries who have
titles of senior vice president or above. Certain senior officers of Greater
Bay, including our Chief Executive Officer, David L. Kalkbrenner, who had
previously entered into Executive Salary Contribution Ageements with MPB, will
now receive their retirement benefits under the SERP rather than pursuant to
such agreements. Greater Bay's Board of Directors designates those employees
who are eligible to participate in the SERP.
The SERP provides benefits equal to a targeted percentage of estimated final
compensation. Estimated final compensation is the estimated compensation,
excluding bonus, at the time of a participant's normal retirement age. The
percentage of estimated final compensation is determined by reference to a
participant's title at Greater Bay or its subsidiary at the time of his or her
termination of employment or retirement. In no case will the targeted
percentage exceed 65% of estimated final compensation as of the date of the
participant's normal retirement or termination of employment.
A participant who terminates employment on his or her normal retirement date
will receive 100% of his or her targeted percentage of estimated final
compensation as a benefit under the SERP. Whether a participant will receive
100% of his or her benefit under the SERP if he or she terminates employment
before normal retirement will be determined on the basis of his or her years
of service at the time of termination of employment. A participant who
terminates employment before his or her normal retirement age may receive a
reduced benefit, based on his or her vested interest in the benefits as of the
date of termination of employment. The CEO, COO, CFO and CLO (collectively,
the "Key Executives") will vest 20% after five years of service and 20% for
each year thereafter, with 100% vesting after ten or more years of service;
members of the Executive Management Committee who are participants in the SERP
will vest 10% after five years of service, 10% for each year thereafter, with
100% vesting after 15 or more years of service, and participants who are
senior vice presidents will vest 10% from year six to year ten, and 5% from
year 11 through 20, with 100% vesting after 20 years of service. Participants
who are Key Executives and participants who are members of the Executive
Management Committee will become 100% vested in their benefits upon a change
in control, regardless of their years of service.
13
<PAGE>
Finally, the SERP provides that the normal retirement age for participants
who are Key Executives is 62, and the normal retirement for all other
participants is 65, and that distributions under the SERP will be made in the
form of a 15-year certain life annuity.
David L. Kalkbrenner, in his capacity as CEO, will be entitled to receive a
benefit under the SERP equal to 65% of his estimated final base compensation
at his normal retirement age of 62; Steven C. Smith, in his capacity as COO
and CFO, and David R. Hood, in his capacity as CLO, will be entitled to
receive a benefit under the SERP equal to 60% of their estimated final
compensation at normal retirement age of 62, and Shawn E. Saunders, as a
member of the Executive Management Committee, will be entitled to receive a
benefit equal to 55% of his estimated final compensation at his normal
retirement age of 65.
As of December 31, 1997, Mr. Kalkbrenner was credited with ten years of
service under the SERP; Mr. Smith was credited with eight years of service
under the SERP; Mr. Hood was credited with eight and one half years of service
under the SERP, and Mr. Saunders was credited with one year of service under
the SERP.
EXECUTIVE COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
Set forth below is a report of our Executive Committee addressing the
compensation policies for 1997 applicable to our executive officers.
The Report of the Executive Committee of the Board of Directors shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the extent that
Greater Bay specifically incorporates the information contained in the report
by reference, and shall not otherwise be deemed filed under such acts.
THE REPORT
The Executive Committee of the Board of Directors acts as our Executive
Compensation Committee. The Executive Committee establishes our overall
compensation and employee benefits and approves specific compensation levels
for executive officers. It is a goal of the Executive Committee to implement
executive officer compensation programs that further our business objectives
and that attract, retain and motivate the best qualified executive officers.
Currently, the members of the Executive Committee are John M. Gatto, Duncan L.
Matteson, David L. Kalkbrenner, Rex D. Lindsay and Edwin E. van Bronkhorst.
Each member of the Executive Committee is a non-employee director, except for
Mr. Kalkbrenner.
Greater Bay's executive compensation policies and specific executive
compensation programs are adopted and administered in accordance with the
principal goal of maximizing return on shareholders' equity. The Executive
Committee believes that this performance goal, and the long-term interests of
our shareholders generally, are best achieved by attracting and retaining
management of high quality, and that such management will require commensurate
compensation. The Executive Committee believes that our executive officer
compensation policies are consistent with this policy.
In addition, the Executive Committee believes that while our compensation
programs should reflect the philosophy that executive compensation levels be
linked to Greater Bay's performance, such compensation programs should also be
competitive and consistent with those provided to others holding positions of
similar responsibility in the banking and financial services industry. Our
compensation plans are designed to assist Greater Bay in attracting and
retaining qualified employees critical to Greater Bay's long-term success,
while enhancing employees' incentives to perform to their fullest abilities to
increase profitability and maximize shareholder value.
Certain of our executive officers, including the Chief Executive Officer,
have written employment agreements which were entered into prior to the merger
of Cupertino National Bancorp and Mid-Peninsula
14
<PAGE>
Bancorp, Greater Bay's predecessor companies (see "INFORMATION ABOUT DIRECTORS
AND EXECUTIVE OFFICERS--Employment Contracts, Termination of Employment and
Change in Control Arrangements"). The base salaries and bonuses paid to these
executive officers for 1997 were originally established and approved by the
respective compensation committees of Mid-Peninsula Bancorp and Cupertino
National Bancorp. The Executive Committee, on which two former members of each
of the Mid-Peninsula Bancorp and Cupertino National Bancorp compensation
committees serve, subsequently approved and ratified the determinations by the
Mid-Peninsula Bancorp and Cupertino National Bancorp compensation committees
regarding 1997 compensation under the employment agreements. In addition, the
level of compensation granted to other executive officers from time to time,
is determined by the Executive Committee based on factors that the Executive
Committee deems appropriate.
Annual compensation levels for executive officers and compensation levels to
be implemented from time to time in written employment agreements with
executive officers are determined by the Executive Committee based primarily
on its review and analysis of the following factors: (i) the responsibilities
of the position, (ii) the performance of the individual and his or her general
experience and qualifications, (iii) the overall financial performance
(including return on equity, levels of general and administrative expense and
budget variances) of Greater Bay for the previous year and the contributions
to such performance measures by the individual or his or her department, (iv)
the officer's total compensation during the previous year, (v) compensation
levels paid by comparable companies in similar industries, (vi) the officer's
length of service with Greater Bay, and (vii) the officer's effectiveness in
dealing with external and internal audiences. The Executive Committee believes
that the base compensation of the executive officers is competitive with
companies of similar size and with comparable operating results in similar
industries.
The base salary of our Chief Executive Officer was determined primarily on
the terms of his employment agreement effective as of March 3, 1992. The
agreement set Mr. Kalkbrenner's base salary at $135,000 for the calendar year
ended December 31, 1992, and provides for annual adjustments by the Board of
Directors and for a discretionary annual bonus based upon the pre-tax net
profits of Greater Bay. In addition, the Chief Executive Officer's
compensation for 1997 was based in part on his progress in achieving certain
additional criteria. These criteria included integration of CNB and MPB under
Greater Bay's multi-bank holding company structure, completing the acquisition
of Greater Bay's newest subsidiary, PBC, results in meeting Greater Bay's
strategic business plan, and 1997 financial performance. Based on the
foregoing, in 1997 Mr. Kalkbrenner received a base salary of $260,000 and a
bonus of $225,000.
While the Executive Committee establishes salary and bonus levels based on
the above described criteria, the Executive Committee also believes that
encouraging equity ownership by executive officers further aligns the
interests of the officers with the performance objectives of our shareholders
and enhances our ability to attract and retain highly qualified personnel on a
basis competitive with industry practices. Stock options granted by Greater
Bay pursuant to the 1996 Option Plan help achieve this objective, and provide
additional compensation to the officers to the extent that the price of the
common stock increases over fair market value on the date of grant. Stock
options have been granted to each of the executive officers and to other
officers or key employees of Greater Bay. Through the 1996 Option Plan, there
will be an additional direct relationship between Greater Bay's performance
and benefits to plan participants.
In addition, through Greater Bay's Employee Stock Purchase Plan ("ESPP"),
eligible employees of Greater Bay and its subsidiaries who are scheduled to
work at least 20 hours a week may acquire an interest in our growth and
productivity. Under the ESPP, participants may purchase shares of Greater Bay
common stock through payroll deductions. The purchase price per share
generally equals 85% of the lesser of the fair market value of a share on the
first or last day of the offering period. Offering periods are for three
months, commencing the first day of each calendar quarter.
Eligible employees are also able to participate in Greater Bay's 401(k)
Plan. The 401(k) Plan permits participants to make 401(k) contributions on a
pretax basis. All employees of Greater Bay and its subsidiaries who are at
least age 21 are eligible to participate in the 401(k) Plan on the first day
of the month following their
15
<PAGE>
date of hire. Participants can contribute up to 15% of their pretax
compensation to the 401(k) Plan annually, subject to certain legal
limitations. The 401(k) Plan also provides that Greater Bay and its
subsidiaries will make a matching contribution on behalf of each eligible
participant equal to 62.5% of the 401(k) contributions made by such
participants, up to 8% of their individual compensation.
Finally, our Board of Directors adopted the Greater Bay Bancorp 1997
Elective Deferred Compensation Plan at its December 1997 meeting (the
"Deferred Compensation Plan"). The Deferred Compensation Plan is an unfunded
Plan that provides deferred compensation benefits to directors and a select
group of management and highly compensated employees who contribute materially
to the continued growth, development and future business success of Greater
Bay and its subsidiaries.
Through these various compensation programs, the Executive Committee
believes that Greater Bay furthers its objectives of attracting, retaining and
motivating the best qualified executive officers and employees, and ultimately
will serve to increase Greater Bay's profitability and maximize shareholder
value.
Dated: April , 1998 EXECUTIVE COMMITTEE
Duncan L. Matteson, Chairman
John M. Gatto
David L. Kalkbrenner
Rex D. Lindsay
Edwin E. van Bronkhorst
16
<PAGE>
PERFORMANCE GRAPH
The following graph compares, for the period December 31, 1992 through
December 31, 1997, the yearly percentage change in Greater Bay's cumulative
total return on its common stock with the cumulative total return of (i) the
NASDAQ--Total US (formerly called the "NASDAQ Total Return Index"), an index
consisting of Nasdaq-listed U.S.-based companies; (ii) the (Greater than)$1
Billion Independent Bank Proxy, an index comprised of independent banks and
bank holding companies with less than $1 billion in assets; and (iii) the SNL
$1B-$5B Bank Index, an index composed of a survey of banks and bank holding
companies having between $1 billion and $5 billion in total assets. We have
added the SNL $1B-$5B Bank Index to the Performance Graph this year because,
during 1997, Greater Bay's assets grew to more than $1 billion. The graph
assumes an initial investment of $100 and reinvestment of dividends. The graph
is not necessarily indicative of future stock performance.
The graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933 or under the Securities Exchange Act of 1934,
except to the extent that Greater Bay specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
acts.
GREATER BAY BANCORP
TOTAL RETURN PERFORMANCE
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
PERIOD ENDING
-----------------------------------------------------
INDEX 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- ----- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Greater Bay Bancorp 100.00 103.25 193.81 263.17 391.25 783.73
NASDAQ - Total US 100.00 114.80 112.21 158.70 195.19 239.53
(Greater Tham)$1B
Independent Bank
Proxy 100.00 128.54 121.70 168.48 248.78 442.97
SNL $1B-$5B Bank Index 100.00 120.19 126.54 170.16 220.59 367.88
</TABLE>
- --------
Source: SNL Securities L.C.
17
<PAGE>
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
PROPOSAL 1: ELECT FOUR DIRECTORS
The Board has nominated four persons for election as Class I Directors at
the Annual Meeting. If you elect them, they will hold office until the
election of their successors at the Annual Meeting in 2001, or until they
resign.
We know of no reason why any nominee may be unable to serve as a director.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the Board. If for any reason these nominees prove unable or
unwilling to stand for election, the Board will nominate alternates. The Board
has no reason to believe that its nominees would prove unable to serve if
elected.
The following table sets forth the names and biographies of the four persons
nominated by the Board to serve as Class I Directors. The table also sets
forth the names and biographies of our Class II and Class III Directors.
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
------------ --------------------------------------------
CLASS I NOMINEES
<C> <S>
George M. Marcus (56).... Director of Greater Bay since March, 1998. He served
as a director of MPB from 1987 until March 1998. Mr.
Marcus is the founder of The Marcus & Milichap
Company, the nation's fourth largest commercial real
estate brokerage firm, and currently serves as a
director of such firm. He also serves as director of
Essex Property Trust, a real estate investment trust
company. Mr. Marcus is an advisor to the University
of California, Berkeley Center for Real Estate and
Urban Economics, and serves on the board of trustees
of the Fine Arts Museums of San Francisco. Mr.
Marcus is a former founding director of Plaza Bank
of Commerce in San Jose.
Duncan L. Matteson (63).. Co-Chairman of the Board of Directors of Greater Bay
since November 1996. He served as Chairman of the
Board of Greater Bay (formerly Mid-Peninsula
Bancorp) from 1994 until November 1996 and has
served as Chairman of the Board of MPB since 1987.
Mr. Matteson also serves as President of the
Matteson Companies, a diversified group of real
estate investment and property management
corporations located in Menlo Park. He has actively
involved himself in the real estate investment and
securities industries in the Palo Alto/Menlo Park
Area since 1959. Mr. Matteson is a member of the
Executive Committee of the Stanford Heart Council,
and serves as a trustee of the Palo Alto Medical
Foundation. As an appointee of the Governor, Mr.
Matteson is Vice President of the board of directors
of the Cow Palace. He is the Immediate Past-Chairman
of the National Multi-Housing Council, a group of
the leading apartment owners and managers throughout
the United States.
James E. Jackson (63).... Director of Greater Bay since November 1996. He
served as a director of Cupertino National Bancorp
from 1984 until November 1996 and was Chairman from
1984 until 1990. Mr. Jackson has been an attorney in
Cupertino since 1963. He serves on the Board of
Directors of the Foundation for Joint Venture
Silicon Valley and Foothill-De Anza Colleges
Foundation. He is also a former mayor of Cupertino,
California.
Roger V. Smith (56)...... Director of Greater Bay since March 1998, Roger V.
Smith is President of Greater Bay's Venture Banking
Group. Mr. Smith was a principal founder of Silicon
Valley Bank in 1983, and served as its President and
Chief Executive Officer until 1993. He continued as
director of Silicon Valley Bancshares until 1995.
Mr. Smith has played a role as an early pioneer in
technology banking, both at Silicon Valley Bank and
as a leader of Wells Fargo Bank's Special Industries
Group in Palo Alto from 1973 to 1977. Mr. Smith
serves on the Board of Directors of Community
Foundation Silicon Valley, and also as a member of
the "Band of Angels," a group of Silicon Valley
private investors for emerging growth companies.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
------------ --------------------------------------------
CLASS II DIRECTORS
<C> <S>
George R. Corey (64)....... Director of Greater Bay since December 1997, Mr.
Corey served as Chairman of the PBC Board from
September 1981 until December 1997. Mr. Corey is
an attorney and partner with the law firm of
Corey, Luznich, Manos & Pliska of Millbrae,
California. Mr. Corey is also a former mayor of
San Bruno, California.
John M. Gatto (60)......... Co-Chairman of Greater Bay since November 1996. He
was a director of Cupertino National Bancorp from
1984 until November 1996 and has served as a
director of CNB since 1984. Mr. Gatto has been the
sole proprietor of Maria Enterprises, a
development consultant company, since December
1993. From 1984 to 1993, Mr. Gatto was an
architect for Cypress Properties, a real estate
development company.
Dick J. Randall (66)....... Director of Greater Bay since November 1996. He
served as a director of Cupertino National Bancorp
from 1984 to the date of its merger with Mid-
Peninsula Bancorp, and has served as a director of
CNB since 1984. Mr. Randall has been a private
investor and rancher since 1993. From 1962 until
his retirement in 1993, Mr. Randall served as the
president of The William Lyon Co., a real estate
development and construction company. Mr. Randall
was one of the founding directors of the New
Children's Shelter in San Jose, California.
Donald H. Seiler (69)...... Director of Greater Bay since 1994 and of MPB
since 1987. He is the founder and managing partner
of Seiler & Company, Certified Public Accountants,
in Redwood City and San Francisco. He has been a
certified public accountant in San Francisco and
the Peninsula area since 1952. He is presently a
director of Ross Stores, Inc. and is a past-
president of the Jewish Community Federation of
San Francisco, the Peninsula and Marin and Sonoma
Counties. He is on the board of directors of the
Peninsula Community Foundation.
CLASS III DIRECTORS
Rex D. Lindsay (72)........ Vice-Chairman of the Board of Directors of Greater
Bay since November 1996. He served as a director
of Cupertino National Bancorp from 1984 until
November 1996 and has served as a director of CNB
since 1984. For approximately the past six years,
Mr. Lindsay has been a rancher and a private
investor.
David L. Kalkbrenner (58).. President, Chief Executive Officer and director of
Greater Bay, and director of MPB. He has held such
positions with Greater Bay since 1994 and with MPB
since 1987. In addition, Mr. Kalkbrenner served as
President and Chief Executive Officer of MPB from
1987 until March 1998. He was employed by Crocker
National Bank from 1963 to 1986. From 1981 to
1986, he served as First Vice President and
Regional Manager of the Mid-Peninsula region, with
administrative offices located in Palo Alto. He
was responsible for the administration of 14 full-
service branches from San Carlos to Sunnyvale, a
business banking center in Palo Alto and the
private banking office, also located in Palo Alto.
From 1977 to 1981, he was Vice President and
Manager of the main office of Crocker National
Bank in Palo Alto. He is a member of the board of
directors of the College of Notre Dame and is a
former director of the Palo Alto Chamber of
Commerce and the Community Association for the
Retarded.
Glen McLaughlin (63)....... Director of Greater Bay since November 1996. He
served as a director of Cupertino National Bancorp
from 1984 until November 1996 and has served as a
director of CNB since 1984. Mr. McLaughlin has
also served as the Chairman of Venture Leasing
Associates, an equipment leasing company, since
December 1986.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
------------ --------------------------------------------
<C> <S>
Warren R. Thoits (75)..... Director of Greater Bay since 1994 and of MPB since
1987. He is a partner with the Palo Alto law firm
of Thoits, Love, Hershberger & McLean. He is a
native of Palo Alto and a graduate of Stanford
University and its School of Law. Mr. Thoits has
been very active in community and charitable
organizations, having served as President of the
Palo Alto Chamber of Commerce, the Palo Alto Rotary
Club and as Chairman of the Palo Alto Area Chapter
of the American Red Cross. He was formerly a member
of the board of directors of Northern California
Savings and Loan Association (now Great Western
Bank).
</TABLE>
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF ALL FOUR CLASS I
NOMINEES FOR DIRECTOR.
PROPOSAL 2: APPROVE AMENDMENT TO OUR BYLAWS CHANGING THE PERMITTED NUMBER OF
DIRECTORS
Subject to shareholder approval, the Board has adopted an amendment to
Greater Bay's Bylaws changing the range of the authorized number of persons
serving on the Board, from a range of seven (7) to thirteen (13), to a range
of nine (9) to seventeen (17). The Bylaws will continue to permit the Board to
fix the exact number of directors within that range.
Changing the range of directors as proposed would provide the Board with the
flexibility to add to the Board qualified persons whose service on the Board
would benefit Greater Bay without having to call a special meeting of
shareholders or wait until the next scheduled annual meeting to amend the
Bylaws.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE AMENDMENT TO
SECTION 1 OF ARTICLE IV OF OUR BYLAWS.
PROPOSAL 3: RATIFY SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS FOR 1998
The Board of Directors has appointed Coopers & Lybrand L.L.P. ("Coopers &
Lybrand") as our independent public accountants for the year ending December
31, 1998, and shareholders are being asked to ratify the appointment. The
appointment was recommended by the Audit Committee. Coopers & Lybrand, our
accountants for the year ended December 31, 1997, performed audit services for
1997 which included the examination of the consolidated financial statements
and services related to filings with the Securities and Exchange Commission.
All professional services rendered by Coopers & Lybrand during 1997 were
furnished at customary rates and terms. Representatives of Coopers & Lybrand
will be present at the Annual Meeting and will be available to respond to
appropriate questions from shareholders.
Prior to the November 1996 merger between Greater Bay (formerly Mid-
Peninsula Bancorp) and Cupertino National Bancorp ("Cupertino"), Cupertino's
independent accountants were Coopers & Lybrand and Mid-Peninsula Bancorp's
independent accountants were KPMG Peat Marwick, LLP ("Peat Marwick"). On
consummation of the merger, Mid-Peninsula Bancorp changed its name to Greater
Bay Bancorp and on December 17, 1996, Greater Bay Bancorp changed its
independent accountants by terminating its engagement of Peat Marwick and
selecting Coopers & Lybrand as its independent accountants to audit its
financial statements for the year ended December 31, 1996. The decision to
terminate the engagement of Peat Marwick and select Coopers & Lybrand was
unanimously recommended by the Audit Committee and approved by the Board of
Directors. During the two most recent fiscal years and any subsequent interim
period preceding the aforesaid change, there were no disagreements between
Greater Bay and Peat Marwick on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which
if not resolved to the satisfaction of Peat Marwick would have caused them to
make reference to the subject matter of the disagreement in their report.
20
<PAGE>
Peat Marwick's report on the financial statements for 1994 and 1995
contained no adverse opinion or disclaimer of opinion nor was it qualified or
modified as to uncertainty, audit scope, or accounting principles, except
their report dated January 22, 1996, relating to the consolidated balance
sheets of Mid-Peninsula Bancorp and subsidiary as of December 31, 1995 and
1994, and the related consolidated statements of operations, changes in
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995, referenced other auditors. On October 7, 1994,
Mid-Peninsula Bancorp acquired San Mateo County Bancorp on a pooling-of-
interests basis. Peat Marwick did not audit the consolidated financial
statements of San Mateo County Bancorp as of and for the year ended December
31, 1993. These statements, which were included in the 1993 restated
consolidated financial statements, were audited by other auditors, whose
report contained an explanatory paragraph regarding the adoption Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes," and SFAS No. 115, "Accounting for Certain Investments, Debt and Equity
Securities." Peat Marwick's report, insofar as it relates to the amounts
included for San Mateo County Bancorp, is based solely on the report of other
auditors.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE SELECTION OF
COOPERS & LYBRAND L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR 1998.
21
<PAGE>
OTHER BUSINESS
We know of no other business which will be presented for consideration at
the Annual Meeting other than as stated in the Notice of Meeting. If, however,
other matters are properly brought before the meeting, it is the intention of
the persons named as proxies in the enclosed proxy card to vote the shares
represented thereby in accordance with their best judgment and in their
discretion, and authority to do so is included in the proxy.
INFORMATION ABOUT SHAREHOLDER PROPOSALS
Under certain circumstances, shareholders are entitled to present proposals
at shareholder meetings. If you wish to submit a proposal to be included in
our 1999 proxy statement, we must receive it, in a form which complies with
the applicable securities laws, on or before December , 1998. Please address
your proposals to: Greater Bay Bancorp, 2860 West Bayshore Road, Palo Alto,
California 94303, Attention: Corporate Secretary.
By order of the Board of Directors,
/s/ Warren R. Thoits
Warren R. Thoits,
Corporate Secretary
April , 1998
22
<PAGE>
GREATER BAY BANCORP
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 26, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David L. Kalkbrenner, Steven C. Smith and
Warren R. Thoits, and each of them, the attorneys, agents and proxies of the
undersigned, with full powers of substitution to each, to attend and act as
proxy or proxies of the undersigned at the Annual Meeting of Shareholders of
GREATER BAY BANCORP to be held at the Stanford Park Hotel, 100 El Camino Real,
Menlo Park, California 94025, on May 26, 1998, at 5:30 p.m., and at any and all
adjournments thereof, and to vote as specified herein the number of shares
which the undersigned, if personally present, would be entitled to vote.
1.ELECTION OF DIRECTORS.
[_] FOR all nominees listed below (except as indicated to the contrary
below).
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
Director nominees: George M. Marcus, James E. Jackson, Duncan L.
Matteson and Roger V. Smith
INSTRUCTION: TO WITHHOLD AUTHORITY to vote for any individual nominee,
write that nominee's name in the space below.
---------------------------------------------------------------------------
2. APPROVAL OF AMENDMENT to Section 1 of Article IV of Greater Bay's Bylaws.
[_] FOR [_] AGAINST [_] ABSTAIN
3. RATIFICATION OF APPOINTMENT OF COOPERS & LYBRAND L.L.P. as independent
public accountants of Greater Bay for the year ending December 31, 1998.
[_] FOR [_] AGAINST [_] ABSTAIN
4. OTHER BUSINESS. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting and at
any and all adjournments thereof. The Board of Directors at present knows
of no other business to be presented by or on behalf of Greater Bay or
the Board of Directors at the meeting.
PLEASE SIGN AND DATE ON REVERSE SIDE
<PAGE>
PLEASE SIGN AND DATE BELOW
The undersigned hereby ratifies and confirms all that the attorneys and
proxies, or any of them, or their substitutes, shall lawfully do or cause to be
done by virtue hereof, and hereby revokes any and all proxies heretofore given
by the undersigned to vote at the meeting. The undersigned acknowledges receipt
of the Notice of Annual Meeting and the Proxy Statement accompanying such
notice.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS, "FOR" APPROVAL OF AMENDMENT TO THE BYLAWS,
AND "FOR" RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. THE
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
MADE, IT WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD
OF DIRECTORS, "FOR" APPROVAL OF AMENDMENT TO THE BYLAWS, AND "FOR" RATIFICATION
OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P.
Dated:______________, 1998
Signed: __________________
Signed: __________________
Please date this proxy
card and sign above ex-
actly as your name ap-
pears on this card. Joint
owners should each sign
personally. Corporate
proxies should be signed
by an authorized officer.
Executors, administra-
tors, trustees, etc.,
should give their full
titles.
I (WE) WILL ___ WILL NOT ___ ATTEND THE MEETING IN PERSON.
