<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED] for the fiscal year ended December 31, 1998 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
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
- --------------------------------------------------------------------------------
<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 Registration
Statements on Form S-8 filed with the Securities and Exchange Commission on July
8, 1997 (File No. 333-30913) and November 20, 1998 (File No. 333-67677).
REQUIRED INFORMATION
1. Financial Statements and Schedules.
These statements and schedules are listed below in the Table of Contents.
2. Exhibits.
23.1 Consent of PricewaterhouseCoopers LLP
<PAGE>
Greater Bay Bancorp 401(k) Plan
Reports on Audits of Financial Statements
As of December 31, 1998 and 1997 and
for the year ended December 31, 1998
<PAGE>
Greater Bay Bancorp
401(k) Plan
Table of Contents to Financial Statements and Supplemental Schedules
- --------------------------------------------------------------------------------
Pages
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 1998 and 1997 2
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the year en ded December 31, 1998 3
Notes to Financial Statements 4
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 10
Item 27d - Schedule of Reportable Transactions (Series of Transactions)
for the year ended December 31, 1998 11
<PAGE>
Report of Independent Accountants
June 9, 1999
To the Trustee of the
Greater Bay Bancorp 401(k) Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits with
fund information present fairly, in all material respects, the net assets
available for benefits of the Greater Bay Bancorp 401(k) Plan (the "Plan") as of
December 31, 1998 and 1997 and the changes in net assets available for benefits
for the year ended December 31, 1998 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Plan's management ; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in
the statements of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for benefits of each fund. These
supplemental schedules and fund information are the responsibility of the
Plan's management . The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
1
<PAGE>
Greater Bay Bancorp
401(k) Plan
Statements of Net Assets Available for Benefits
as of December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets 1998 1997
<S> <C> <C>
Cash $ - $ 45,620
----------- -----------
Investments, at fair market value:
Shares of money market funds:
Greater Bay Trust Floating Rate Fund 518,247 347,176
Shares of registered investment companies:
Vanguard Total Bond Index Fund 326,356 69,580
Vanguard Institutional Index Fund 1,592,203 913,274
T. Rowe Price International Stock Fund 332,175 233,681
Greater Bay Trust Tactical Asset Allocation Program 4,189,080 3,038,001
Greater Bay Bancorp Common Stock 4,153,916 2,213,019
Participant notes receivable 267,890 248,103
----------- -----------
Total investments 11,379,867 7,062,834
----------- -----------
Receivables:
Employer's contributions 190,833 88,778
Participants' contributions 62,139 -
Accrued interest and dividends 29,462 13,552
----------- -----------
Total receivables 282,434 102,330
----------- -----------
Total assets $11,662,301 $ 7,210,784
----------- -----------
Liabilities
Accrued liabilities - 391
----------- -----------
Total liabilities - 391
----------- -----------
Net assets available for benefits $11,662,301 $ 7,210,393
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
Greater Bay Bancorp
401(k) Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the year ended December 31, 1998
- ---------------------------------------------------------------------------------------------------------------------------------
Participant Directed
---------------------------------------------------------------------------------------
Greater Bay
Greater T. Rowe Trust Greater
Bay Trust Vanguard Vanguard Price Tactical Bay
Floating Total Bond Institutional International Asset Bancorp
Rate Index Index Stock Allocation Common
Fund Fund Fund Fund Program Stock
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 22,430 $ - $ - $ - $ 12 $ -
Dividends - 7,005 29,708 25,138 81,817 36,965
Net appreciation (depreciation) in
the fair value of investments - 1,199 286,094 30,477 799,973 1,034,611
Contributions:
Employer 25,898 19,570 109,645 23,172 209,145 177,805
Participant 50,932 47,869 253,204 45,709 440,455 418,907
Rollover 96,141 14,663 79,681 3,682 94,413 61,816
Realized gains (losses) - 12 2,517 (249) (24,954) 29,461
-------- -------- ---------- -------- ---------- ----------
Total additions 195,401 90,318 760,849 127,929 1,600,861 1,759,565
-------- -------- ---------- -------- ---------- ----------
Deductions from net assets attributed to:
Benefit payments and distributions 12,214 1,046 36,721 3,799 75,918 135,890
-------- -------- ---------- -------- ---------- ----------
Total deductions 12,214 1,046 36,721 3,799 75,918 135,890
-------- -------- ---------- -------- ---------- ----------
Transfers in (out) (12,116) 167,504 (45,199) (25,636) (373,864) 317,222
-------- -------- ---------- -------- ---------- ----------
Net increase 171,071 256,776 678,929 98,494 1,151,079 1,940,897
-------- -------- ---------- -------- ---------- ----------
Balance at beginning of year 347,176 69,580 913,274 233,681 3,038,001 2,213,019
-------- -------- ---------- -------- ---------- ----------
Balance at end of year $518,247 $326,356 $1,592,203 $332,175 $4,189,080 $4,153,916
======== ======== ========== ======== ========== ==========
<CAPTION>
Participant Directed
----------------------------
Participant
Notes
Receivable Other, net Total
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 23,205 $ - $ 45,647
Dividends - 12,690 193,323
Net appreciation (depreciation) in
the fair value of investments - - 2,152,354
Contributions:
Employer - 102,055 667,290
Participant - 62,139 1,319,215
Rollover - - 350,396
Realized gains (losses) - - 6,787
-------- -------- -----------
Total additions 23,205 176,884 4,735,012
-------- -------- -----------
Deductions from net assets attributed to:
Benefit payments and distributions 17,516 - 283,104
-------- -------- -----------
Total deductions 17,516 - 283,104
-------- -------- -----------
Transfers in (out) 14,098 (42,009) -
-------- -------- -----------
Net increase 19,787 134,875 4,451,908
-------- -------- -----------
Balance at beginning of year 248,103 147,559 7,210,393
-------- -------- -----------
Balance at end of year $267,890 $282,434 $11,662,301
======== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
Greater Bay Bancorp
401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Plan Description
On November 27, 1996, Cupertino National Bancorp (Cupertino) merged with
Mid-Peninsula Bancorp (Mid-Peninsula). The 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.
On December 23, 1997 and May 8, 1998, GBB completed its mergers with
Peninsula Bank of Commerce (PBC) and Golden Gate Bank (GGB), respectively.
The 401(k) plans of PBC (PBC Plan) and GGB (GGB Plan) were not merged with
the Plan as of December 31, 1998. As such, the accompanying financial
statements of the Plan do not include any information as to the PBC and GGB
Plans. The PBC Plan was frozen upon the date of merger and the GGB Plan was
terminated the day before the merger, and the merged employees of PBC and
GGB became participants of the Plan.
The assets of the PBC Plan will be merged with the assets of the Plan once
GBB has ensured that all operational and/or form defects of the PBC Plan
have been corrected and approved by the Internal Revenue Service (IRS) under
one of the IRS remedial programs. GGB will distribute benefits to
participants of the GGB Plan upon the receipt of a favorable determination
letter from the IRS on the qualification of the terminated GGB Plan. At that
time, GBB will permit rollovers from the GGB Plan into the Plan at the
participant's election. The following description of the Plan is provided
for general information purposes only. Participants of the Plan should refer
to the Plan document for a more comprehensive description of the Plan's
provisions.
General
The Plan is a defined contribution plan covering all employees of GBB and
its subsidiaries who are 21 years of age or older. As of December 31,
1998, the subsidiaries consisted of Cupertino National Bank, Mid-Peninsula
Bank, Peninsula Bank of Commerce and Golden Gate Bank (collectively, the
Subsidiaries). GBB and the Subsidiaries are herein collectively referred
to as "the Company." The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
All of the Plan's assets are held by the Greater Bay Trust Company (the
Trustee), a division of Cupertino National Bank.
Contributions
Each year, participants may contribute up to 15% of pretax annual
compensation, as defined in the Plan. Participants may also contribute
amounts representing distributions from other qualified defined benefit or
contribution plans. The Company makes a matching contribution to the Plan
on behalf of each participant who elects to contribute to the Plan, in an
amount equal to 62.5% of the first 8% of the eligible compensation that
such a participant elects to contribute to the Plan. Additional Company
contributions may be made at the discretion of GBB. The allocation of
qualified nonelective contributions is made to the accounts of only non-
highly compensated participants.
4
<PAGE>
Greater Bay Bancorp
401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
Participant accounts
Individual accounts are maintained for each Plan participant. Each
participant's account is credited with the participant's contribution and
allocations of (a) the Company's contribution, (b) Plan earnings, and (c)
rollovers. Allocations are based on participant directions. The benefit
to which a participant is entitled is the benefit that can be provided from
the participant's vested account.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Employees hired prior to December 31, 1996 are 100%
vested in all accounts. For employees hired after December 31, 1996,
vesting in the Company's matching and discretionary contribution portion of
their accounts, plus actual earnings thereon, is based on years of
continuous service as follows:
<TABLE>
<CAPTION>
Percent
Years of Service Vested
<S> <C>
1 25%
2 50%
3 75%
4 or more 100%
</TABLE>
Forfeitures
Participants who terminate employment before they are 100% vested in their
Company contributions will forfeit the nonvested portion of the Company
contributions allocated to their accounts. Forfeitures, if any, shall be
used to reduce the contribution of the employer for the Plan year in which
such forfeitures occur.
Investment options
Upon enrollment in the Plan, participants may direct their contributions at
any time in whole percent increments into any of the following six
investment options:
. Greater Bay Trust Floating Rate Fund - Funds are invested in a money
market type account. The rate paid is equivalent to the six-month
U.S. Treasury bill auction rate plus 0.25%.
. 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
Standard & 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
5
<PAGE>
Greater Bay Bancorp
401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 7.75% to 11%. Principal
and interest is paid ratably through semi-monthly payroll deductions.
Payment of benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his or her account or annual
installments over a period not to exceed the participant's life expectancy.
For termination of service due to other reasons, a participant may receive
the value of the vested interest in his or her account as a lump-sum
distribution.
2. Summary of Significant Accounting Policies
Basis of accounting
The records of the Plan are kept and the accompanying financial statements
have been prepared on the accrual basis of accounting.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
Risks and uncertainties
The Plan provides for various investment options in any combination of the
above mutual fund and money market investment types, which themselves are
invested in various combinations of stock, bond, income, and other
investment securities. Investment securities are exposed to various risks,
such as interest rate, market, and credit. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the
6
<PAGE>
Greater Bay Bancorp
401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
near term would materially affect participants' account balances and the
amounts reported in the statements of net assets available for benefits and
the statement of changes in net assets available for benefits.
Investment valuation and income recognition
The Plan's investments are stated at fair market value. Shares of
registered investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-end. The
Company stock is valued at its quoted market price. Participant notes
receivables are valued at cost which approximates market.
Purchases and sales of securities are reflected on a trade date basis.
Transaction gains or losses are determined on the average cost method.
Interest income is recognized on the accrual basis. The net appreciation
(depreciation) in the fair value of the Plan's investments consists of
realized gains or losses and the unrealized appreciation (depreciation) on
those investments.
Contributions
Employee contributions are recorded in the period during which GBB makes
payroll deductions from the Plan participants' earnings. Matching GBB
contributions are recorded quarterly.
Payment of benefits
Benefits are recorded when paid.
Tax status
The Internal Revenue Service (IRS) has determined and informed GBB by a
letter dated May 5, 1995, that the Plan, as then designed, is designed in
accordance with the applicable sections of the Internal Revenue Code (IRC).
3. Plan 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.
4. Plan Termination
Although it has not expressed any intent to do so, GBB has the right under
the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested.
7
<PAGE>
Greater Bay Bancorp
401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1998 1997
<S> <C> <C>
Net assets available for benefits per the financial statements $ 11,662,301 $ 7,210,393
Amounts allocated to withdrawing participants - (17,048)
------------ -----------
Net assets available for benefits per the Form 5500 $ 11,662,301 $ 7,193,345)
------------ -----------
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
December 31,
1998
<S> <C>
Benefits paid to participants per the financial statements $ 283,104
Add: Amounts allocated to withdrawing participants at
December 31, 1998 -
Less: Amounts allocated to withdrawing participants at
December 31, 1997 (17,048)
---------
Benefits paid to participants per the Form 5500 $ 266,056
---------
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefits claims that have been processed and approved for payment prior
to December 31 but not yet paid as of that date.
6. Subsequent Events
On May 21, 1999, GBB completed its merger with Bay Area Bancshares (BAB).
BAB terminated its 401(k) plan immediately before the merger with GBB. Once
the IRS has issued a favorable determination letter on the qualification of
the terminated BAB 401(k) plan, GBB will permit rollovers from the BAB
401(k) plan into the Plan at the participants' discretion.
8
<PAGE>
Greater Bay Bancorp
401(k) Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. Related Party Transactions
One of the investment options of the Plan (see Note 1) is managed by the
Greater Bay Trust Company. The Greater Bay Trust Company is the trustee as
defined by the Plan, and, therefore, these transactions qualify as party-in-
interest. However, no fees were paid by the Plan to the Trustee for the
investment management services.
8. Concentration of Risk
A portion of the Plan's assets are invested in common stock of Greater Bay
Bancorp. This investment fund represents 36% of the Plan's total assets at
December 31, 1998 and 48% of the Plan's net investment appreciation for the
year ended December 31, 1998.
9
<PAGE>
Supplemental Schedules
<PAGE>
<TABLE>
<CAPTION>
Greater Bay Bancorp
401(k) Plan
Item 27a-Schedule of Assets Held for Investment Purposes
As of December 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Historical
Identity of Issuer Description of Investments Cost Fair Value
<S> <C> <C> <C>
*Greater Bay Trust Floating Rate Fund Money Market Fund $ 518,247 $ 518,247
Vanguard Total Bond Index Fund Registered Investment Company 324,565 326,356
*Greater Bay Trust Tactical Asset Allocation Program Allocation Program 3,166,836 4,189,080
Vanguard Institutional Index Fund Registered Investment Company 1,165,337 1,592,203
T. Rowe Price International Stock Fund Registered Investment Company 309,089 332,175
Greater Bay Bancorp Common Stock Common stock of Company 2,056,817 4,153,916
*Participant notes receivable Loans, secured by balance of vested
7.75% to 11% 267,890 267,890
------------- ------------
$7,808,781 $ 11,379,867
------------- ------------
</TABLE>
*Represents party-in-interest to the Plan.
10
<PAGE>
Greater Bay Bancorp
401(k) Plan
Itme 27d - Schedule of Reportable Transactions (Series of Transactions)
For the year ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Fair Value
of Assets on
Identity of Purchase Selling Cost of Transaction Net Gain
Party Involved Description of Assets Price Price Assets Date or (Loss)
<S> <C> <C> <C> <C> <C> <C>
1) Greater Bay Trust Floating 69 Purchase of fund shares $ 167,062 $ 167,062 $ 167,062 -
Rate Fund 49 sales of fund shares $ 338,270 $ 338,270 $ 338,270 -
2) Greater Bay Bancorp 72 purchases of fund shares $1,094,734 $1,094,734 $1,094,734 -
Common Stock 18 sales of fund shares $ 83,714 $ 39,856 $ 83,714 $ 43,858
3) Greater Bay Trust Tactical 61 purchases $ 928,016 $ 928,016 $ 928,016 -
Asset Allocation Program 40 sales $ 552,864 $ 448,847 $ 552,864 $104,017
4) Vanguard Institutional 67 purchases of fund share $ 549,998 $ 549,998 $ 549,998 -
Index Fund 33 sales of fund shares $ 159,519 $ 122,006 $ 159,519 $ 37,513
</TABLE>
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
Greater Bay Bancorp 401 (k) Plan
--------------------------------
(Name of Plan)
Date: June 29, 1999 By: /s/ Hall Palmer
---------------
Hall Palmer
Executive Vice President
and Senior Trust Officer
Greater Bay Trust Company,
Trustee for the Plan
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
23.1 Consent of PricewaterhouseCoopers LLP
<PAGE>
Exhibit 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-30913 and 333-67677) of Greater Bay Bancorp
of our report dated June 9, 1999 relating to the financial statements of the
Greater Bay Bancorp 401(k) Plan, which appears in the Annual Report on Form
11-K. We also consent to the incorporation by reference of our report dated
February 9, 1999 relating to the financial statement schedules, which appears
in the Greater Bay Bancorp Annual Report on Form 10-K.
/s/ PricewaterhouseCoopers LLP
