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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
(MARK ONE)
[X]ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-25034
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A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM
THAT OF THE ISSUER NAMED BELOW:
GREATER BAY BANCORP 401(K) PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
GREATER BAY BANCORP
2860 WEST BAYSHORE ROAD
PALO ALTO, CALIFORNIA 94303
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<PAGE>
INTRODUCTION
Greater Bay Bancorp has established the Greater Bay Bancorp 401(k) Plan (the
"Plan"). The Plan is a profit sharing plan with a cash or deferred arrangement
intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue
Code of 1986, as amended. The Plan was registered on a Registration Statement
on Form S-8 (File No. 333-30913), filed with the Securities and Exchange
Commission on July 8, 1997.
REQUIRED INFORMATION
1. Financial Statements and Schedules.
These statements and schedules are listed below in the Table of Contents.
2. Exhibits.
None.
2
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
----------------
REPORT ON AUDITS OF FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1997 AND 1996
AND FOR THE YEAR ENDED DECEMBER 31, 1997
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGES
-----
<S> <C>
Report of Independent Accountants......................................... F-1
Financial Statements:
Statements of Net Assets Available
for Benefits as of December 31, 1997 and 1996.......................... F-2
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 1997................................... F-3
Notes to Financial Statements............................................. F-4
Supplemental Schedules: F-8
Item 27a--Schedule of Assets Held
for Investment Purposes as of December 31, 1997........................ F-9
Item 27d--Schedule of Reportable Transactions
(Series of Transactions) for the year ended December 31, 1997.......... F-10
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator of the
Greater Bay Bancorp 401(k) Plan
We have audited the accompanying statements of net assets available for
benefits of the Greater Bay Bancorp 401(k) Plan (the "Plan") as of December
31, 1997 and 1996, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1997. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 1997 and 1996, and the changes in net assets available for
benefits with fund information for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The Fund
Information in the statement of changes in net assets available for benefits
is presented for purposes of additional analysis rather than to present the
changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
July 13, 1998
F-1
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
------
Cash...................................................... $ 45,620 $ --
---------- ----------
Investments, at fair market value:
Shares of money market funds:
Greater Bay Trust Floating Rate Fund.................. 347,176 219,129
Shares of registered investment companies:
Vanguard Total Bond Index Fund........................ 69,580 49,132
Vanguard Institutional Index Fund..................... 913,274 376,594
T. Rowe Price International Stock Fund................ 233,681 101,110
Greater Bay Trust Tactical Asset Allocation Program..... 3,038,001 948,620
Greater Bay Bancorp common stock........................ 2,213,019 572,938
Participant notes receivable............................ 248,103 158,006
---------- ----------
Total investments................................... 7,062,834 2,425,529
---------- ----------
Receivables:
Employer's contributions................................ 88,778 34,882
Participants' contributions............................. -- 18,338
Other................................................... 13,552 3,465
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Total receivables................................... 102,330 56,685
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Total assets........................................ 7,210,784 2,482,214
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LIABILITIES
-----------
Benefit claims payable.................................... 17,048 736
Other..................................................... 391 --
---------- ----------
Total liabilities................................... 17,439 736
---------- ----------
Net assets available for benefits................... $7,193,345 $2,481,478
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
----------
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------------------------------------------------
GREATER BAY GREATER BAY GREATER BAY
TRUST VANGUARD VANGUARD T. ROWE PRICE TRUST TACTICAL BANCORP PARTICIPANT
FLOATING TOTAL BOND INSTITUTIONAL INTERNATIONAL ASSET ALLOCATION COMMON NOTES
RATE FUND INDEX FUND INDEX FUND STOCK FUND PROGRAM STOCK RECEIVABLE OTHER
----------- ---------- ------------- ------------- ---------------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net
assets attributed
to:
Investment income:
Interest.......... $ 23,850 -- -- -- $ 98 $ 80 $ 25,561 $ (592)
Dividends......... -- $ 3,749 $ 22,257 $ 3,047 81,853 22,080 -- 10,135
Net appreciation
(depreciation) in
the fair value of
investments...... -- 1,552 152,649 (12,426) 503,097 984,330 --
Contributions:
Employer.......... 13,774 7,227 61,329 17,407 171,514 104,307 -- 53,896
Participant....... 31,972 15,739 153,206 37,636 376,678 220,700 -- (18,338)
Rollover.......... 3,947 698 13,312 9,369 57,500 55,223 --
Mid-Peninsula Bank
401(k) transfer... 154,067 5,097 303,535 95,801 1,106,561 144,106 112,178
Realized gains..... -- 64 14,904 151 8,031 9,401 --
-------- ------- -------- -------- ---------- ---------- -------- --------
Total additions. 227,610 34,126 721,192 150,985 2,305,332 1,540,227 137,739 45,101
-------- ------- -------- -------- ---------- ---------- -------- --------
Deductions from net
assets attributed
to:
Benefit payments
and distributions. 136,037 5,380 85,956 14,719 90,328 96,485 5,228 16,312
-------- ------- -------- -------- ---------- ---------- -------- --------
Total
deductions..... 136,037 5,380 85,956 14,719 90,328 96,485 5,228 16,312
-------- ------- -------- -------- ---------- ---------- -------- --------
Transfers in (out)... 36,474 (8,298) (98,556) (3,695) (125,623) 196,339 (42,414) 45,773
-------- ------- -------- -------- ---------- ---------- -------- --------
Net increase......... 128,047 20,448 536,680 132,571 2,089,381 1,640,081 90,097 74,562
-------- ------- -------- -------- ---------- ---------- -------- --------
Balance at beginning
of year............. 219,129 49,132 376,594 101,110 948,620 572,938 158,006 55,949
-------- ------- -------- -------- ---------- ---------- -------- --------
Balance at end of
year................ $347,176 $69,580 $913,274 $233,681 $3,038,001 $2,213,019 $248,103 $130,511
======== ======= ======== ======== ========== ========== ======== ========
<CAPTION>
TOTAL
----------
<S> <C>
Additions to net
assets attributed
to:
Investment income:
Interest.......... $ 48,997
Dividends......... 143,121
Net appreciation
(depreciation) in
the fair value of
investments...... 1,629,202
Contributions:
Employer.......... 429,454
Participant....... 817,593
Rollover.......... 140,049
Mid-Peninsula Bank
401(k) transfer... 1,921,345
Realized gains..... 32,551
----------
Total additions. 5,162,312
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Deductions from net
assets attributed
to:
Benefit payments
and distributions. 450,445
----------
Total
deductions..... 450,445
----------
Transfers in (out)... --
----------
Net increase......... 4,711,867
----------
Balance at beginning
of year............. 2,481,478
----------
Balance at end of
year................ $7,193,345
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN:
On November 27, 1996, Cupertino National Bancorp ("Cupertino") merged with
Mid-Peninsula Bancorp ("Mid-Peninsula"). The surviving entity, Mid-Peninsula,
was renamed Greater Bay Bancorp ("GBB"). The Board of Directors of GBB
concurrently approved the merger of the Mid-Peninsula 401(k) Plan into the
Cupertino 401(k) Plan and renamed the plan as the Greater Bay Bancorp 401(k)
Plan (the "Plan"), effective December 31, 1996. The following description of
the Plan is provided for general information purposes only. Plan participants
should refer to the Plan document for a more comprehensive description of the
Plan's provisions.
GENERAL:
The Plan is a defined contribution plan covering all employees of GBB and
its subsidiaries, who are 21 years of age or older. As of December 31, 1997
the subsidiaries include Cupertino National Bank, Mid-Peninsula Bank and
Peninsula Bank of Commerce (collectively the "Subsidiaries"). GBB and the
Subsidiaries are herein collectively referred to as the "Company". The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
All of the Plan's assets are held by the Greater Bay Trust Company (the
"Trustee"), a division of Cupertino National Bank.
CONTRIBUTIONS:
Each year, participants may contribute from up to 15 percent of pretax
annual compensation, as defined in the Plan. Participants may also contribute
amounts representing distributions from other qualified defined benefit or
contribution plans. The Company contributes 62.5 percent of the first 8
percent of the eligible compensation that a participant elects to contribute
to the Plan. Additional Company contributions may be made at the discretion of
GBB. The allocation of qualified nonelective contributions is made to the
accounts of only non-highly compensated participants.
PARTICIPANT ACCOUNTS:
Individual accounts are maintained for each Plan participant. Each
participant's account is credited with the participant's contribution and
allocations of (a) the Company's contribution, (b) Plan earnings, and (c)
rollovers. Allocations are based on participant directions. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING:
Participants are immediately vested in their contributions plus actual
earnings thereon. Employees hired prior to December 31, 1996 are 100% vested
in all accounts. For employees hired after December 31, 1996, vesting in the
Company's matching and discretionary contribution portion of their accounts
plus actual earnings thereon is based on years of continuous service as
follows:
<TABLE>
<CAPTION>
YEARS OF SERVICE PERCENT VESTED
---------------- --------------
<S> <C>
1.............................................. 25%
2.............................................. 50%
3.............................................. 75%
4 or more....................................... 100%
</TABLE>
F-4
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
FORFEITURES:
Participants who terminate employment before they are 100 percent vested in
their Company contributions will forfeit the nonvested portion of the Company
contributions allocated to their accounts. Forfeitures, if any, shall be used
to reduce the contribution of the employer for the Plan year in which such
forfeitures occur.
INVESTMENT OPTIONS:
Upon enrollment in the Plan, a participant may direct employee contributions
at any time in whole percent increments into any of the following six
investment options:
. GREATER BAY TRUST FLOATING RATE FUND--Funds are invested in a money
market type account. The rate paid is equivalent to the six-month U.S.
Treasury bill auction rate plus 0.25%.
. VANGUARD TOTAL BOND INDEX FUND--Funds are invested in shares of a
registered investment company that invests in a combination of bonds and
other "fixed income" securities.
. VANGUARD INSTITUTIONAL INDEX FUND--Funds are invested in shares of a
registered investment company that invests in stocks included in the
Standards & Poor's 500 Index.
. T. ROWE PRICE INTERNATIONAL STOCK FUND--Funds are invested in preferred
stocks, warrants, convertibles, and/or debt securities. The Fund
typically maintains investments in at least three foreign countries, and
may invest in both industrialized and developing countries.
. GREATER BAY TRUST TACTICAL ASSET ALLOCATION PROGRAM--Funds are invested
in equity securities, bonds, and cash.
. GREATER BAY BANCORP COMMON STOCK--Funds are invested in common stock of
the Company.
Participants may change their investment options quarterly for new deferrals
and may change investment of a present balance daily.
PARTICIPANT NOTES RECEIVABLE:
Plan participants are permitted to borrow against the vested interest in
their account up to a maximum of 50% of the vested amount ranging from a
minimum of $1,000 and a maximum of $50,000. Loan terms range from one to 30
years. The loans are secured by the balance in the participant's account and
bear interest rates that range from 8% to 11%. Principal and interest is paid
ratably through monthly payroll deductions.
PAYMENT OF BENEFITS:
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the value
of the participant's vested interest in his or her account, or annual
installments over a period not to exceed the participant's life expectancy.
For termination of service due to other reasons, a participant may receive the
value of the vested interest in his or her account as a lump-sum distribution.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING:
The records of the Plan are kept and the accompanying financial statements
have been prepared on the accrual basis of accounting.
F-5
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
changes therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
RISKS AND UNCERTAINTIES:
The Plan provides for various investment options in any combination of the
above mutual fund and money market investment types, which themselves are
invested in various combinations of stock, bond, income, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market, and credit. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to changes
in the value of investment securities, it is at least reasonably possible that
changes in risks in the near term would materially affect participants'
account balances and the amounts reported in the statement of net assets
available for benefits and the statement of changes in net assets available
for benefits.
INVESTMENT VALUATION AND INCOME RECOGNITION:
The Plan's investments are stated at market fair value. Shares of registered
investment companies are valued at quoted market prices which represent the
net asset value of shares held by the Plan at year-end. The Company stock is
valued at its quoted market price. Participant notes receivables are valued at
cost which approximates market.
Purchases and sales of securities are reflected on a trade date basis.
Transaction gains or losses are determined on the average cost method.
Interest income is recognized on the accrual basis. The net appreciation
(depreciation) in the fair value of the Plan's investments, consists of
realized gains or losses, and the unrealized appreciation (depreciation) on
those investments.
PAYMENT OF BENEFITS:
Benefits are recorded when paid.
TAX STATUS:
The Internal Revenue Service (IRS) has determined and informed GBB by a
letter dated May 5, 1995, that the Plan, as then designed, is designed in
accordance with the applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter. However,
the Plan administrator and the Plan's tax counsel believe that the Plan, as
amended, is designed and is currently being operated in compliance with the
applicable requirements of the IRC. GBB is in the process of requesting a new
determination letter from the IRS.
3. PLAN ADMINISTRATION AND EXPENSE:
GBB currently bears the administrative expenses associated with the
management of the Plan. As such, no administrative expenses are reflected in
the Plan's financial statements.
F-6
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. PLAN TERMINATION:
Although it has not expressed any intent to do so, GBB has the right under
the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested.
5. SUBSEQUENT EVENTS:
On December 23, 1997, GBB completed its merger with Peninsula Bank of
Commerce (PBC). GBB is planning to merge PBC's 401(k) plan into the Plan upon
the resolution of certain administrative issues. As such, even though the
merger between GBB and PBC occurred in 1997, the accompanying financial
statements of the Plan do not include any information related to employees of
PBC.
On May 8, 1998, GBB completed its merger with Golden Gate Bank (GGB). GGB
terminated its 401(k) plan immediately before the merger of GGB with GBB. Once
the IRS has issued a favorable determination letter on the qualification of
the terminated GGB 401(k) plan, GBB will permit rollovers from the GGB 401(k)
plan into the Plan at the participants' discretion.
6. RELATED PARTY TRANSACTIONS:
One of the investment options of the Plan (see Note 1) is managed by the
Greater Bay Trust Company. The Greater Bay Trust Company is the trustee as
defined by the Plan and, therefore, these transactions qualify as party-in-
interest. However, no fees were paid by the Plan to the Trustee for the
investment management services.
7. CONCENTRATION OF CREDIT RISK:
A portion of the Plan's assets are invested in common stock of Greater Bay
Bancorp. This investment fund represents 31% of the Plan's total assets at
December 31, 1997 and 15% of the Plan's net investment appreciation for the
year ended December 31, 1997.
F-7
<PAGE>
SUPPLEMENTAL SCHEDULES
F-8
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
HISTORICAL
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST FAIR VALUE
------------------ ------------------------- ---------- ----------
<S> <C> <C> <C>
Greater Bay Trust Floating
Rate Fund................. Money Market Fund $ 347,176 $ 347,176
Vanguard Total Bond Index
Fund...................... Registered investment company 68,914 69,580
Greater Bay Trust Tactical
Asset Allocation Program.. Allocation Program 2,544,754 3,038,001
Vanguard Institutional
Index Fund................ Registered investment company 737,345 913,274
T. Rowe Price International
Stock Fund................ Registered investment company 238,812 233,681
Greater Bay Bancorp Common
Stock..................... Common stock of Company 1,055,763 2,213,019
Participant Notes Loans, secured by balance of
Receivable................ vested account balance 248,103 248,103
---------- ----------
$5,240,867 $7,062,834
========== ==========
</TABLE>
F-9
<PAGE>
GREATER BAY BANCORP
401(K) PLAN
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS (SERIES OF TRANSACTIONS)
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F) (G)
FAIR VALUE
OF ASSETS
ON NET GAIN
IDENTITY OF PARTY PURCHASE SELLING COST OF TRANSACTION OR
INVOLVED DESCRIPTION OF ASSETS PRICE PRICE ASSETS DATE (LOSS)
----------------- ----------------------- ---------- ---------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
1) Greater Bay Trust
Tactical Asset
Allocation Program..... Purchase of fund shares $ 397,586
Sale of fund shares $ 408,555 $ 408,555 $ 408,555 --
2) Greater Bay Trust
Floating Rate Fund..... Purchase of fund shares $2,228,423
Sale of fund shares $2,101,333 $2,101,333 $2,101,333 --
3) Greater Bay Bancorp
Common Stock........... Purchase of fund shares $ 772,620
Sale of fund shares $ 43,902 $ 26,911 $ 43,902 $ 16,911
4) T. Rowe Price
International Stock
Fund................... Purchase of fund shares $ 180,002
Sale of fund shares $ 35,126 $ 33,541 $ 35,126 $ 1,585
5) Vanguard Total Bond
Index Fund............. Purchase of fund shares $ 455,221
Sale of fund shares $ 549,795 $ 532,172 $ 549,795 $ 17,623
6) Vanguard
Institutional Index
Fund................... Purchase of fund shares $2,897,246
Sale of fund shares $ 844,434 $ 730,555 $ 844,434 $113,879
</TABLE>
F-10
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administered the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Greater Bay Bancorp 401(k) Plan
(Name of Plan)
/s/ Debbie Reed
Date: July 14, 1998 By __________________________________
Debbie Reed,
Vice President and Senior Trust
Officer
Greater Bay Trust Company,
Trustee for Plan
II-1
