<PAGE>
As filed with the Securities and Exchange Commission on September 11, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
Greater Bay Bancorp
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
California 6711 77-0487041
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
GBB Capital IV
(Exact name of Co-Registrant as specified in its trust agreement)
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Delaware 77-6194152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
2860 West Bayshore Road
Palo Alto, California 94303
(650) 813-8200
(Address, including zip code, and telephone number, including area code, of
Registrant's and Co-Registrant's principal executive offices)
Linda M. Iannone
General Counsel
Greater Bay Bancorp
400 Emerson Street, Third Floor
Palo Alto, California 94301
(650) 614-5734
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
Copies to:
William T. Quicksilver, Esq.
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, California 90064
Telephone: (310) 312-4210
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
Proposed Amount of Proposed
Title of Each Class of Maximum Aggregate Maximum
Securities to be Amount to be Offering Price Offering Registration
Registered Registered Per Unit(1) Price(1) Fee
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Exchange Capital
Securities of GBB
Capital IV............ 41,000 $1,000 $41,000,000 $10,824.00
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Exchange Junior
Subordinated Debenture
of Greater Bay
Bancorp(2)............ -- -- -- --
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Greater Bay Bancorp
Exchange Guarantee with
respect to Exchange
Capital
Securities(2)......... -- -- -- --
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Total(3)............... 41,000 $1,000 $41,000,000(4) $10,824.00
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</TABLE>
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(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Exchange Junior
Subordinated Debentures of Greater Bay Bancorp distributed upon any
liquidation of GBB Capital IV, and no separate consideration will be
received for the Greater Bay Bancorp Exchange Guarantee.
(3) This Registration Statement is deemed to cover rights of holders of
Exchange Junior Subordinated Debentures under the Indenture, the rights of
holders of Exchange Capital Securities of GBB Capital IV under an Amended
and Restated Declaration of Trust, the rights of holders of such Exchange
Capital Securities under the Exchange Guarantee and certain backup
undertakings as described in this Registration Statement.
(4) Such amount represents the liquidation amount of the Exchange Capital
Securities to be exchanged hereunder and the principal amount of Exchange
Junior Subordinated Debentures that may be distributed to holders of such
Exchange Capital Securities upon any liquidation of GBB Capital IV.
--------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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<PAGE>
Subject to completion dated , 2000
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We +
+have filed a registration statement with the Securities and Exchange +
+Commission relating to these securities. These securities may not be sold nor +
+may offers to buy be accepted prior to the time the registration statement +
+becomes effective. This prospectus is not an offer to sell securities, and we +
+are not soliciting offers to buy these securities in any state where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
GBB CAPITAL IV
Offer to Exchange its
10.75% Capital Securities, Series B
(liquidation amount $1,000 per capital security)
Which Have Been Registered Under The Securities Act of 1933
For Any and All Of Its Outstanding
10.75% Capital Securities, Series A
(liquidation amount $1,000 per capital security)
Fully and unconditionally guaranteed,
to the extent described in this prospectus, by
[LOGO OF GREATER BAY BANCORP]
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THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., EASTERN TIME ON , 2000, UNLESS EXTENDED.
-----------
GBB Capital IV is offering and selling upon the terms and subject to the
conditions described in this prospectus, as amended and supplemented from time
to time, and in the accompanying letter of transmittal, which together
constitute the exchange offer, to exchange up to and including $41,000,000
aggregate liquidation amount of its 10.75% capital securities, Series B,
referred to as the exchange capital securities, which have been registered
under the Securities Act of 1933, as amended, by a registration statement of
which this prospectus is a part, for a like amount of its outstanding 10.75%
capital securities, Series A, referred to as the original capital securities,
of which $41,000,000 aggregate liquidation amount are issued and outstanding.
This prospectus and the letter of transmittal are first being mailed to all
holders of the 10.75% capital securities, Series A on or about ,
2000.
See "Risk Factors" beginning on page 17 to read about the risks that you
should consider in deciding whether to tender the 10.75% capital securities,
Series A in the exchange offer.
These securities are not deposits or accounts and are not insured by the
Federal Deposit Insurance Corporation or any other government agency.
Neither the Securities and Exchange Commission nor any state securities
commission or regulator has approved or disapproved these securities or
determined that this prospectus is accurate or complete. It is illegal for
anyone to tell you otherwise.
The date of this Prospectus is , 2000.
<PAGE>
SUMMARY
The following information is a summary of the significant terms of the
offering of our exchange capital securities. You should carefully read this
prospectus to understand fully the terms of the exchange capital securities, as
well as the tax and other considerations that are important to you in making a
decision about whether to exchange your original capital securities for the
exchange capital securities. You should pay special attention to the "Risk
Factors" section beginning on page 17 of this prospectus to determine whether
an investment in the exchange capital securities is appropriate for you.
As used in the prospectus, "we" and "us" and "our" refer to Greater Bay
Bancorp and its consolidated subsidiaries, depending on the context.
Greater Bay Bancorp
We are a bank holding company operating Bank of Santa Clara, Bay Area Bank,
Bay Bank of Commerce, Coast Commercial Bank, Cupertino National Bank, Golden
Gate Bank, Mid-Peninsula Bank, Mt. Diablo National Bank and Peninsula Bank of
Commerce. Our banking subsidiaries are collectively referred to in this
offering memorandum as the Banks. We also own GBB Capital I, GBB Capital II,
GBB Capital III and GBB Capital IV, each of which are Delaware statutory
business trusts, which were formed for the exclusive purpose of issuing and
selling capital securities.
We also have the following operating divisions of the Banks: Greater Bay
Bank Contra Costa Region, Greater Bay Bank Fremont Region, Greater Bay Bank
Santa Clara Valley Commercial Banking Group, Greater Bay Bank SBA Lending
Group, Greater Bay Corporate Finance Group, Greater Bay International Banking
Division, Greater Bay Trust Company, Pacific Business Funding and Venture
Banking Group.
We provide a wide range of commercial banking services to small and medium-
sized businesses, real estate developers, property managers, business
executives, professionals and other individuals. We operate throughout Silicon
Valley, San Francisco, the San Francisco Peninsula, the Contra Costa Tri-Valley
Region and the Coastal Region with 33 offices located in Aptos, Blackhawk,
Capitola, Cupertino, Danville, Fremont, Hayward, Lafayette, Milpitas, Millbrae,
Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Leandro, San
Mateo, San Ramon, Santa Clara, Santa Cruz, Scotts Valley, Sunnyvale, Walnut
Creek and Watsonville. At June 30, 2000, we had total assets of $4.1 billion,
total net loans of $2.9 billion and total deposits of $3.5 billion.
GBB Capital IV
GBB Capital IV is a statutory business trust created under Delaware law upon
the filing of a certificate of trust with the Delaware Secretary of State. The
Trust's business and affairs are conducted by the property trustee, the
Delaware trustee and the three individual administrative trustees, who are
officers of Greater Bay Bancorp. The Trust exists for the exclusive purposes
of:
. issuing and selling the original capital securities and the exchange
capital securities, collectively referred to as the capital securities;
. using the proceeds from the sale of the capital securities to acquire
junior subordinated debentures issued by Greater Bay Bancorp; and
. engaging only in those other activities necessary, advisable or
incidental to the above.
Accordingly, the junior subordinated debentures are the sole assets of the
Trust, and payments under the junior subordinated debentures will be the sole
revenues of the Trust.
All of the common securities of the Trust are owned by Greater Bay Bancorp.
3
<PAGE>
The Exchange Offer
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The Exchange Offer............... Up to and including $41,000,000 aggregate
liquidation amount of exchange capital
securities are being offered in exchange
for a like aggregate liquidation amount of
original capital securities. Original
capital securities may be tendered for
exchange in whole or in part in a
liquidation amount of $100,000 (100
original capital securities) or any
integral multiple of $1,000 (one original
capital security) in excess of $100,000.
Under the exchange offer, we will exchange
as soon as practicable after the date of
this prospectus our $41,000,000 aggregate
principal amount of junior subordinated
debentures, Series A, also referred to as
the original junior subordinated
debentures, for a like aggregate principal
amount of our junior subordinated
debentures, Series B, also referred to as
the exchange debentures. We refer to the
original junior subordinated debentures and
the exchange debentures collectively as the
junior subordinated debentures.
We and the Trust are making the exchange
offer in order to satisfy our respective
obligations under the registration rights
agreement relating to the original capital
securities. For a description of the
procedures for tendering original capital
securities, please read "The Exchange
Offer--Procedures for Tendering Original
Capital Securities."
Expiration Date.................. 5:00 p.m., Eastern time, on , 2000
unless the exchange offer is extended by us
and the Trust, in which case the expiration
date will be the latest date and time to
which the exchange offer is extended.
Conditions to the Exchange The exchange offer is subject to certain
Offer........................... conditions, which may be waived by us and
the Trust in our sole discretion. The
exchange offer is not conditioned upon any
minimum liquidation amount of original
capital securities being tendered.
Terms of the Exchange Offer...... We and the Trust reserve the right in our
sole and absolute discretion, subject to
applicable law, at any time and from time
to time, (1) to delay the acceptance of the
original capital securities, (2) to
terminate the exchange offer if certain
specified conditions have not been
satisfied, (3) to extend the expiration
date of the exchange offer and retain all
original capital securities tendered as a
result of the exchange offer, subject,
however, to the right of holders of
original capital securities to withdraw
their tendered original capital securities,
or (4) to waive any condition or otherwise
amend the terms of the exchange offer in
any respect.
Withdrawal Rights................ You may withdraw tenders of original
capital securities at any time on or prior
to the expiration date by delivering a
written notice of withdrawal to the
exchange agent in conformity with certain
procedures as set forth under "The Exchange
Offer--Withdrawal Rights."
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4
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Procedures for Tendering Original
Capital Securities.............. Certain brokers, dealers, commercial banks,
trust companies and other nominees who hold
original capital securities through The
Depository Trust Company, or DTC, must
effect tenders by book-entry transfer
through DTC's Automated Tender Offer
Program, or ATOP. Beneficial owners of
original capital securities registered in
the name of a broker, dealer, commercial
bank, trust company or other nominee are
urged to contact such person promptly if
they wish to tender original capital
securities under the exchange offer.
Tendering holders of original capital
securities that do not use ATOP must
complete and sign a letter of transmittal
in accordance with the instructions
contained in such letter and forward the
same by mail, facsimile transmission or
hand delivery, together with any other
required documents, to the exchange agent,
either with the certificates of the
original capital securities to be tendered
or in compliance with the specified
procedures for guaranteed delivery of
original capital securities. Tendering
holders of original capital securities that
use ATOP will, by so doing, acknowledge
that they are bound by the terms of the
letter of transmittal. Letters of
transmittal and certificates representing
original capital securities should not be
sent to us or the Trust. You should send
such documents only to the exchange agent.
Resales of Exchange Capital
Securities...................... We and the Trust are making the exchange
offer in reliance on the position of the
staff of the Securities and Exchange
Commission, or Commission, as set forth in
certain interpretive letters addressed to
third parties in other transactions.
However, neither we nor the Trust has
sought our own interpretive letter and
there can be no assurance that the staff of
the Commission would make a similar
determination with respect to the exchange
offer as it has in such interpretive
letters to third parties. Based on these
interpretations by the staff of the
Commission, and subject to the two
immediately following sentences, we and the
Trust believe that exchange capital
securities issued under this exchange offer
in exchange for original capital securities
may be offered for resale, resold and
otherwise transferred by a holder of such
exchange capital securities, other than a
holder who is a broker-dealer, without
further compliance with the registration
and prospectus delivery requirements of the
Securities Act of 1933, as amended, or
Securities Act, provided that such exchange
capital securities are acquired in the
ordinary course of such holder's business
and that such holder is not participating,
and has no arrangement or understanding
with any person to participate, in a
distribution, within the meaning of the
Securities Act, of such exchange capital
securities. However, any holder of original
capital securities who is an affiliate of
us or the Trust or who intends to
participate in the exchange offer for the
purpose of distributing the exchange
capital securities, or any broker-dealer
who purchased the original capital
securities from the
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5
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Trust to resell pursuant to Rule 144A or
any other available exemption under the
Securities Act:
. will not be able to rely on the
interpretations of the staff of the
Commission set forth in the above-
mentioned interpretive letters;
. will not be permitted or entitled to
tender such original capital securities
in the exchange offer; and
. must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any
sale or other transfer of such original
capital securities unless such sale is
made in reliance on an exemption from
such requirements.
In addition, as described in this
prospectus, if any broker-dealer holds
original capital securities acquired for
its own account as a result of market-
making or other trading activities and
exchanges such original capital securities
for exchange capital securities, then such
broker-dealer must deliver a prospectus
meeting the requirements of the Securities
Act in connection with any resales of such
exchange capital securities.
Each holder of original capital securities
who wishes to exchange original capital
securities for exchange capital securities
in the exchange offer will be required to
represent that:
. it is not an affiliate of us or the
Trust;
. any exchange capital securities to be
received by it are being acquired in the
ordinary course of its business;
. it has no arrangement or understanding
with any person to participate in a
distribution, within the meaning of the
Securities Act, of such exchange capital
securities; and
. if such holder is not a broker-dealer,
such holder is not engaged in, and does
not intend to engage in, a distribution,
within the meaning of the Securities Act
of such exchange capital securities.
Each broker-dealer that receives exchange
capital securities for its own account in
exchange for original capital securities,
where such original capital securities were
acquired by such broker-dealer as a result
of market-making activities or other
trading activities, must acknowledge that
it will deliver a prospectus meeting the
requirements of the Securities Exchange Act
of 1934, as amended, or Exchange Act, in
connection with any resale of such exchange
capital securities. See "Plan of
Distribution."
The letter of transmittal states that, by
so acknowledging and by delivering a
prospectus, a broker-dealer will not be
deemed to
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6
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admit that it is an underwriter within the
meaning of the Securities Act. Based on the
position taken by the staff of the
Commission in the interpretive letters
referred to above, we and the Trust believe
that participating broker-dealers who
acquired original capital securities for
their own accounts as a result of market-
making activities or other trading
activities may fulfill their prospectus
delivery requirements with respect to the
exchange capital securities received upon
exchange of such original capital
securities, other than original capital
securities that represent an unsold
allotment from the initial sale of the
original capital securities, with a
prospectus meeting the requirements of the
Securities Act, which may be the prospectus
prepared for an exchange offer so long as
it contains a description of the plan of
distribution with respect to the resale of
such exchange capital securities.
Accordingly, this prospectus, as it may be
amended or supplemented from time to time,
may be used by a participating broker-
dealer in connection with resales of
exchange capital securities received in
exchange for original capital securities
where such original capital securities were
acquired by such participating broker-
dealer for its own account as a result of
market-making or other trading activities.
Subject to certain provisions set forth in
the registration rights agreement and to
the limitations described in this
prospectus under "The Exchange Offer--
Resales of Exchange Capital Securities," we
and the Trust have agreed that this
prospectus, as it may be amended or
supplemented from time to time, may be used
by a participating broker-dealer in
connection with resales of such exchange
capital securities for a period ending 90
days after the expiration date, subject to
extension under certain limited
circumstances, or, if earlier, when all
such exchange capital securities have been
disposed of by such participating broker-
dealer. Any participating broker-dealer who
is an affiliate of us or the Trust may not
rely on such interpretive letters and must
comply with the registration and prospectus
delivery requirements of the Securities Act
in connection with any resale transaction.
Exchange Agent................... The exchange agent with respect to the
exchange offer is the property trustee of
the Trust, Wilmington Trust Company. The
address, telephone and facsimile number of
the exchange agent are set forth in "The
Exchange Offer--Exchange Agent" and in the
letter of transmittal.
Use of Proceeds.................. Neither we nor the Trust will receive any
cash proceeds from the issuance of the
exchange capital securities.
Certain Federal Income Tax
Considerations.................. The exchange of original capital securities
for exchange capital securities will not be
a taxable exchange for federal income tax
purposes, and you should not recognize any
taxable gain or loss or any interest income
as a result of such exchange.
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7
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ERISA Considerations............. You should review the information set forth
under "ERISA Considerations" prior to
tendering original capital securities in
the exchange offer.
The Exchange Capital Securities
Securities Offered............... Up to $41,000,000 aggregate liquidation
amount of exchange capital securities,
liquidation amount $1,000 per exchange
capital security, have been registered
under the Securities Act. The exchange
capital securities will be issued as were
the original capital securities under the
Amended and Restated Declaration of Trust
of GBB Capital IV, dated as of May 19,
2000, relating to the trust by and among
us, as Sponsor, Wilmington Trust Company,
as property trustee, Wilmington Trust
Company, as Delaware trustee, and the
administrative trustees, also referred to
as the trust agreement. The exchange
capital securities and any original capital
securities that remain outstanding after
consummation of the exchange offer will
vote together as a single class for
purposes of determining whether holders of
the requisite percentage in outstanding
liquidation amount have taken certain
actions or exercised certain rights under
the trust agreement. The terms of the
exchange capital securities are identical
in all material respects to the terms of
the original capital securities, except
that the exchange capital securities have
been registered under the Securities Act,
will not be subject to certain restrictions
on transfer applicable to the original
capital securities and will not provide for
any increase in the distribution rate.
Distributions ................... You will be entitled to receive cumulative
cash distributions at the annual rate of
10.75% of the liquidation amount of $1,000
per exchange capital security.
Distributions will accumulate from the date
the Trust issued the original capital
securities and will be paid semi-annually
in arrears on June 1st and December 1st of
each year, beginning on December 1, 2000.
The amount of each distribution will
include amounts accumulated up to the date
the distribution is due.
The record dates will be the 15th day of
the month immediately preceding the month
in which the relevant payment occurs. If
the exchange offer is consummated before
the first record date, November 15, 2000,
then each exchange capital security will
pay cumulative distributions from and after
May 19, 2000 and no distributions will be
paid on any original capital security
tendered for an exchange capital security.
However, in the event the exchange offer is
consummated after November 15, 2000,
distributions will be paid on the original
capital securities accumulated from and
after May 19, 2000 through December 1,
2000, and distributions will be paid on the
exchange capital securities from and after
December 1, 2000. The amount of each
distribution with respect to the capital
securities will include
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8
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amounts accrued to, but excluding the date
the distribution is due. Because of the
foregoing procedures regarding
distributions, the amount of the
distributions received by holders whose
original capital securities are accepted
for exchange will not be affected by the
exchange.
Deferral Periods ................ So long as no event of default under the
exchange debentures has occurred and is
continuing, we have the right, at one or
more times, to defer interest payments on
the exchange debentures for up to 10
consecutive semi-annual periods. All
deferrals will end on an interest payment
date and will not extend beyond June 1,
2030, the stated maturity date of the
exchange debentures.
If we defer interest payments on the
exchange debentures, the Trust will also
defer distributions on the exchange capital
securities. During this deferral period,
the exchange debentures will continue to
accrue interest and the exchange capital
securities will continue to accumulate
distributions. During a deferral period,
you will also accumulate additional
distributions at the annual rate of 10.75%
on any accumulated and unpaid
distributions, to the extent permitted by
law. If the Trust defers your
distributions, you will still be required
to accrue interest income and include it in
your gross income for federal income tax
purposes, even if you are a cash basis
taxpayer.
Exchange Guarantee .............. We are offering to exchange our guarantee,
also referred to as the exchange guarantee,
of payments of cash distributions and
payments in liquidation of the Trust or
redemption of the
exchange capital securities for the
existing guarantee, also referred to as the
original guarantee, in respect of the
original capital securities. We refer to
the original guarantee and the exchange
guarantee collectively as the guarantees.
Under the trust agreement creating GBB
Capital IV, our exchange debentures and
related indenture and our exchange
guarantee, we will, on a subordinated
basis, fully, irrevocably and
unconditionally guarantee:
. payment of distributions on the exchange
capital securities;
. payments on liquidation of the Trust;
and
. payments on maturity or earlier
redemption of the exchange capital
securities.
If we do not make a payment on the exchange
debentures, the Trust will not have
sufficient funds to make payments on the
exchange capital securities. Our exchange
guarantee does not assure the payment of
distributions when the Trust does not have
sufficient funds to pay the distributions.
Our obligations under the exchange
guarantee are unsecured and subordinated to
payment of our senior and subordinated debt
and will be effectively subordinated to all
of the existing and future liabilities and
obligations of our subsidiaries, including
the Banks' deposit liabilities. See
"Description of Junior Subordinated
Debentures--Subordination."
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Ranking.......................... The exchange capital securities will rank
on parity, and payments thereon will be
made pro rata, with the original capital
securities and the common securities of the
Trust, except as described under
"Description of Capital Securities--
Subordination of Common Securities." The
exchange junior subordinated debentures
will rank on parity with the original
junior subordinated debentures, our 9.75%
Junior Subordinated Deferrable Interest
Debentures, maturing on March 31, 2027,
referred to as the 1997 Junior Subordinated
Debentures, our Floating Rate Junior
Subordinated Deferrable Interest
Debentures, maturing on September 15, 2028,
referred to as the 1998 Junior Subordinated
Debentures, our 10.875% Junior Subordinated
Deferrable Interest Debentures maturing on
March 8, 2030, referred to as the 2000
Junior Subordinated Debentures and all
other junior subordinated debentures, or
the other debentures, if any, issued by us,
which are issued and sold, if at all, to
other trusts established by us, or the
other trusts, if any, in each case similar
to the Trust, and will constitute our
unsecured obligations and will rank
subordinate and junior in right of payment
to all senior indebtedness, to the extent
and in the manner set forth in the
indenture, dated as of May 19, 2000, as
amended and supplemented from time to time,
between us and Wilmington Trust Company, as
debenture trustee, relating to the exchange
debentures, also referred to as the
indenture, and Indenture. See "Description
of Junior Subordinated Debentures." The
exchange guarantee will rank on parity with
the original guarantee, our guarantee
issued pursuant to the offering of capital
securities of GBB Capital I, our guarantee
issued pursuant to the offering of capital
securities of GBB Capital II, our guarantee
issued pursuant to the offering of capital
securities of GBB Capital III, and all
other guarantees, or the other guarantees,
if any, issued by us with respect to
capital securities, if any, issued by other
trusts, and will constitute our unsecured
obligation and will rank subordinate and
junior in right of payment to all senior
indebtedness, to the extent and in the
manner set forth in the guarantee
agreement. See "Description of Guarantee."
In addition, because Greater Bay Bancorp is
a bank holding company, the junior
subordinated debentures and the guarantee
will be effectively subordinated to all of
the existing and future liabilities and
obligations of our subsidiaries, including
the Banks' deposit liabilities. See
"Description of Junior Subordinated
Debentures-- Subordination."
Distribution of Exchange
Debentures...................... At any time, we will have the right,
subject to receipt of any required
regulatory approval, to liquidate the Trust
and cause the exchange debentures to be
distributed to holders of exchange capital
securities and common securities in
liquidation of the Trust. The exchange
debentures will have identical terms and
conditions as the exchange capital
securities. We will, for instance, have the
same rights, subject to the receipt of any
required regulatory
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approval, to redeem such exchange
debentures as if the exchange debentures
were held by the Trust. In the event of the
involuntary or voluntary liquidation,
dissolution, winding up or termination of
the Trust in which the exchange debentures
are not distributed to you, then you, as
the holders of the exchange capital
securities, will be entitled to receive for
each exchange capital security, after
satisfaction of creditors of the Trust, a
liquidation amount of $1,000 plus
accumulated and unpaid distributions
thereon (including interest thereon) to the
date of payment. The Trust will be able to
make this distribution in cash only if we
redeem the exchange debentures.
Maturity and Redemption.......... The exchange debentures will mature on June
1, 2030, unless redeemed prior to such date
if certain conditions are met. The Trust
will redeem the exchange capital securities
when we pay the exchange debentures at
maturity or upon any earlier redemption of
the exchange debentures.
Our ability to redeem some or all of the
exchange debentures on or after June 1,
2010 is subject to certain conditions. We
may have to obtain regulatory approvals,
including the approval of the Federal
Reserve, before we redeem any exchange
debentures prior to maturity. If we redeem
the exchange debentures, you will receive
the liquidation amount of $1,000 per
exchange capital security plus any accrued
and unpaid distributions to the date of
redemption. In addition, we may redeem the
exchange debentures at our option, in whole
but not in part, at any time prior to June
1, 2010:
. if certain tax events occur;
. if there is a change in the way the
exchange debentures would be treated for
regulatory capital purposes; or
. if there is a change in the Investment
Company Act of 1940 that requires the
Trust to register under that law.
Transfer Restriction............. The exchange capital securities will be
issued, and may be transferred, only in
blocks having a liquidation amount of not
less than $100,000 (100 exchange capital
securities). Any such transfer of exchange
capital securities in a block having a
liquidation amount of less than $100,000
shall be deemed to be void and of no legal
effect whatsoever.
Absence of Market for the
Exchange Capital Securities..... The exchange capital securities will be a
new issue of securities for which there is
no market. Although the initial purchasers
intend to make a market in the exchange
capital securities, in a manner permitted
under applicable securities laws, Sandler
O'Neill & Partners, L.P., and Keefe
Bruyette & Woods, Inc., the initial
purchasers, are not obligated to do so, and
any such market making may be discontinued
at any time without notice. Accordingly,
there can be no assurance as to the
development or liquidity of any
</TABLE>
11
<PAGE>
<TABLE>
<C> <S>
market for the exchange capital securities.
Neither we nor the Trust intend to apply
for listing of the exchange capital
securities on any securities exchange or
for quotation through The Nasdaq Stock
Market.
Ratings.......................... The exchange capital securities have been
rated "BBB-" by Thomson Financial
BankWatch. If another rating agency were to
rate the exchange capital securities, such
rating agency may assign a rating different
from the ratings described above. A
security rating is not a recommendation to
buy, sell or hold securities and may be
subject to revision or withdrawal at any
time by the assigning rating organization.
ERISA Considerations............. For a discussion of certain prohibited
transactions and fiduciary duty issues
pertaining to purchases by or on behalf of
an employee benefit plan, you should see
"ERISA Considerations".
Voting Rights.................... As a holder of the exchange capital
securities, you will have no voting rights,
except in limited circumstances. You should
read "Description of Exchange Capital
Securities--Voting Rights; Amendment of the
Trust Agreement" for more information.
Risk Factors..................... You should read "Risk Factors" for a
discussion of considerations relevant to an
investment in the capital securities or the
exchange of original capital securities for
exchange capital securities.
</TABLE>
12
<PAGE>
SUMMARY SELECTED CONSOLIDATED FINANCIAL INFORMATION
The selected consolidated financial data set forth below for the five years
ended December 31, 1999 have been derived from the supplemental consolidated
financial statements of Greater Bay Bancorp, and should be read in conjunction
with Greater Bay Bancorp's supplemental consolidated financial statements,
including the related notes thereto and discussion thereof, included in Greater
Bay Bancorp's Current Report on Form 8-K filed with the Commission on July 26,
2000. The selected financial data set forth below for the six-month periods
ended June 30, 2000 and 1999 have been derived from the unaudited interim
consolidated financial statements of Greater Bay Bancorp and include all
adjustments, consisting only of normal recurring accruals, which management
considers necessary for a fair presentation of such financial information for
those periods and should be read in conjunction with Greater Bay Bancorp's
interim consolidated financial statements included in Greater Bay Bancorp's
Current Report on Form 8-K filed with the Commission on August 7, 2000. The
results for these six-month periods are not necessarily indicative of the
results which may be expected for any other interim or annual period. The
supplemental consolidated financial statements of Greater Bay Bancorp included
in both Current Reports on Form 8-K have been restated on a historical basis to
reflect the merger with Bank of Santa Clara on July 21, 2000 on a pooling-of-
interests basis. See "Available Information."
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
---------------------- ----------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data
Interest income........ $ 159,842 $ 109,405 $ 241,704 $ 192,444 $ 154,991 $ 120,223 $ 104,337
Interest expense....... 60,600 40,469 89,973 71,804 54,062 39,445 33,715
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income.... 99,242 68,936 151,731 120,640 100,929 80,778 70,622
Provision for loan
losses................ 13,746 3,529 13,739 8,059 8,791 4,760 2,771
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses........... 85,496 65,407 137,992 112,581 92,138 76,018 67,851
Other income........... 15,969 10,706 27,276 19,810 17,133 15,997 12,401
Nonrecurring--warrant
income................ 9,349 230 14,508 945 1,162 92 --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total other income..... 25,318 10,936 41,784 20,755 18,295 16,089 12,401
Operating expenses..... 52,641 45,044 94,718 80,560 69,515 63,079 59,462
Other expenses--
nonrecurring.......... -- 323 12,160 1,341 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses.............. 52,641 45,367 106,878 81,901 69,515 63,079 59,462
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income
tax expense and merger
and other related
nonrecurring costs.... 58,173 30,976 72,898 51,435 40,918 29,028 20,790
Income tax expense..... 22,577 11,868 24,444 18,092 14,917 10,529 7,613
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before merger
and other related
nonrecurring costs and
extraordinary items... 35,596 19,108 48,454 33,343 26,001 18,499 13,177
Merger and other
related nonrecurring
costs, net of tax..... (9,133) (2,491) (6,486) (1,674) (2,282) (1,991) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income before
extraordinary items... 26,463 16,617 41,968 31,669 23,719 16,508 13,177
Extraordinary items.... -- (88) (88) -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............. $ 26,463 $ 16,529 $ 41,880 $ 31,669 $ 23,719 $ 16,508 $ 13,177
========== ========== ========== ========== ========== ========== ==========
Per Share Data (1)
Income per share
(before merger,
nonrecurring and
extraordinary items)
Basic.................. $1.54 $1.02 $2.40 $1.86 $1.43 $1.11 $0.91
Diluted................ 1.47 0.97 2.27 1.74 1.34 1.06 0.87
Net income per share
Basic.................. $1.35 $0.91 $2.29 $1.79 $1.38 $0.99 $0.82
Diluted................ 1.30 0.87 2.17 1.67 1.30 0.94 0.79
Book value per common
share................. $13.64 $10.90 $12.53 $10.46 $9.12 $8.15 $7.55
Shares outstanding at
year-end.............. 19,814,173 18,304,513 18,989,511 17,871,980 17,566,409 16,728,765 16,266,106
Average common shares
outstanding........... 19,548,000 18,123,000 18,304,000 17,739,000 17,175,000 16,598,000 16,035,000
Average common and
common equivalent
shares outstanding.... 20,413,000 19,082,000 19,298,000 18,981,000 18,301,000 17,528,000 16,726,000
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
--------------------- -------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ---------- -----------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Performance Ratios
Return on average
assets (before merger,
nonrecurring and
extraordinary items)
(2)................... 1.55% 1.29% 1.40% 1.38% 1.35% 1.29% 1.27%
Return on average
common shareholders'
equity (before merger,
nonrecurring and
extraordinary items)
(2)................... 23.10% 18.77% 21.44% 19.17% 16.35% 14.28% 13.40%
Net interest
margin................ 5.52% 5.21% 5.26% 5.45% 5.92% 6.17% 6.86%
Balance Sheet Data--At
Period End
Assets................. $4,106,259 $3,102,471 $3,542,030 $2,670,686 $2,084,217 $1,662,313 $1,32 4,368
Loans, net............. 2,657,748 1,933,424 2,298,111 1,640,311 1,274,408 1,013,217 772,112
Investment securities.. 951,329 642,866 694,950 599,794 415,584 308,855 314,358
Deposits............... 3,543,814 2,708,875 3,100,697 2,307,582 1,812,058 1,459,764 1,157,549
Subordinated debt...... -- -- -- 3,000 3,000 3,000 3,000
Trust preferred
securities............ 99,500 49,000 49,000 49,000 20,000 -- --
Common shareholders'
equity................ 270,268 199,430 238,002 186,883 160,252 136,346 122,738
Regulatory Capital
Ratios
Leverage Ratio......... 9.18% 7.88% 8.24% 8.18% 8.94% 8.55% 9.42%
Tier 1 Capital......... 10.86% 9.95% 9.70% 10.75% 11.39% 10.98% 12.84%
Total Capital.......... 12.62% 11.60% 11.04% 12.69% 12.77% 12.34% 14.28%
Ratio of Earnings to
Fixed Charges
Excluding interest on
deposits, to net fixed
charges (3)........... 8.91x 6.19x 7.21x 5.61x 7.13x 5.96x 5.10x
Including interest on
deposits, to fixed
charges (4)........... 1.94x 1.75x 1.79x 1.70x 1.74x 1.71x 1.59x
</TABLE>
--------
* Restated on a historical basis to reflect the mergers between Greater Bay
Bancorp and Cupertino National Bancorp, Peninsula Bank of Commerce, Pacific
Rim Bancorporation, Pacific Business Funding Corporation, Bay Area
Bancshares, Bay Commercial Services, Mt. Diablo Bancshares, Coast Bancorp
and Bank of Santa Clara, each of which was accounted for on a pooling-of-
interests basis.
(1) Restated to reflect a 2-for-1 stock split effective as of April 30, 1998.
(2) If the performance ratios included merger, nonrecurring and extraordinary
items (net of tax) of $3.6 million for the six months ended June 30, 2000,
$1.9 million for the six months ended June 30, 1999, $2.0 million in 1999,
$1.4 million in 1998, $788,000 in 1997, $2.0 million in 1996 and $1.3
million in 1995, return on average assets would have been 1.36% for the six
months ended June 30, 2000, 1.16% for the six months ended June 30, 1999,
1.34% for 1999, 1.32% for 1998, 1.30% for 1997, 1.15% for 1996 and 1.16%
for 1995, and return on average common shareholders' equity would have been
20.33% for the six months ended June 30, 2000, 16.84% for the six months
ended June 30, 1999, 20.46% for 1999, 18.39% for 1998, 15.83% for 1997,
12.75% for 1996 and 12.17% for 1995.
(3) For the purpose of computing the ratio of earnings, excluding interest on
deposits, to net fixed charges, earnings represent income before income
before taxes plus net fixed income. Net fixed charges include interest
expense, other than interest on deposits, and that portion of rental
expense, generally one third, deemed representative of the interest factor.
(4) For purposes of computing the ratio of earnings, including interest on
deposits, to fixed charges, earnings represent income before income taxes
plus fixed charges. Fixed charges include interest expense and that portion
of rental expense, generally one third, deemed representative of the
interest factor.
14
<PAGE>
RECENT EVENTS
Proposed Merger with Bank of Petaluma. On March 21, 2000, Greater Bay
Bancorp announced the signing of a definitive merger agreement with Bank of
Petaluma. Upon completion of the merger, Bank of Petaluma will operate as a
wholly owned subsidiary of Greater Bay Bancorp.
In the merger, Greater Bay Bancorp will issue shares of its stock in a tax
free exchange for the shares of stock of Bank of Petaluma for an estimated
value of approximately $41 million, depending on the market price of Greater
Bay Bancorp's stock at the time of the merger closing. The merger, which will
be accounted for as a pooling of interests, is expected to be completed in the
fourth quarter of 2000, subject to the approval of Bank of Petaluma's
shareholders and bank regulatory authorities.
Bank of Petaluma, founded in 1987, is situated in the San Francisco Bay
Area's northern market known as the "Telecom Valley." This area includes start-
up and seasoned companies specializing in the burgeoning telecommunications
industry. Bank of Petaluma maintains four banking offices in Petaluma, Point
Reyes Station and Valley Ford, California and serves the small-to mid-sized
business community and retail banking clients. As of June 30, 2000, Bank of
Petaluma had total assets of $213 million and deposits of $173 million. For the
six months ended June 30, 2000, net income was $1.3 million, an 18% increase
over net income of $1.1 million for the same period in 1998. For the year ended
December 31, 1999, net income was $2.3 million, a 10% increase over net income
of $2.1 million in 1998.
The terms of the agreement provide for the shareholders of Bank of Petaluma
to receive shares of Greater Bay Bancorp stock. Bank of Petaluma currently has
approximately 1.4 million shares of common stock outstanding. If the average
closing price of Greater Bay Bancorp common stock is between $37.91 and $46.34,
each share of Bank of Petaluma stock will be exchanged for 0.685 shares of
Greater Bay Bancorp stock. If the average closing price of Greater Bay Bancorp
common stock is greater than $46.34, the exchange ratio will decrease by
dividing the average closing price into $31.74 plus one-third of the amount by
which the average closing price exceeds $46.34. Under the agreement, average
closing price means the average closing sale price on The Nasdaq Stock Market
of Greater Bay Bancorp common stock for the 20 consecutive trading days ending
at the end of the third trading day immediately before completion of the
merger.
If the average closing price of Greater Bay Bancorp common stock is less
than $37.91, Greater Bay Bancorp may elect to exercise a top up option. In that
case, the exchange ratio will equal the quotient obtained by dividing $25.97 by
the average closing price of Greater Bay Bancorp stock. If Greater Bay Bancorp
does not elect the top up option, Bank of Petaluma may either terminate the
merger agreement or accept an exchange ratio of 0.685.
Closing of Merger with Bank of Santa Clara. On July 21, 2000, Greater Bay
Bancorp completed the merger of Bank of Santa Clara with GBB Merger Corp., as a
result of which Bank of Santa Clara became a wholly owned subsidiary of Greater
Bay Bancorp. Each Bank of Santa Clara shareholder received 0.8499 shares of
Greater Bay Bancorp stock for each share of Bank of Santa Clara stock in a tax-
free exchange. Greater Bay Bancorp has restated its financial statements to
include the Bank of Santa Clara merger which was accounted for using the
pooling-of-interests method of accounting. These restated financial statements
are the audited supplemental consolidated financial statements included as part
of Greater Bay Bancorp's Current Report on Form 8-K filed with the Commission
on July 26, 2000.
Pending Acquisition of The Matsco Companies Inc. On August 8, 2000, Greater
Bay Bancorp announced the signing of a definitive agreement to acquire The
Matsco Companies Inc., or Matsco, a financial services company headquartered in
Emeryville, California which specializes in financial services for the dental
and veterinary markets. Greater Bay Bancorp will pay the Matsco shareholders
$6.5 million in cash and up to an additional $6.0 million in an earn-out
arrangement over a 5-year period. The acquisition is subject to regulatory
approval and is expected to close in the fourth quarter of 2000.
15
<PAGE>
On a pro forma basis as of June 30, 2000, the combined company would have
had total assets of approximately $4.3 billion. Including the pending merger
with Bank of Petaluma, the Company's pro forma assets as of June 30, 2000 would
have been $4.5 billion. On a pro forma basis, Matsco, with assets of
approximately $170 million, will represent approximately 4% of Greater Bay
Bancorp's consolidated total assets.
Matsco offers a complete range of finance products and services to meet the
needs of dentists and veterinarians throughout their professional career. The
Company is endorsed exclusively by the American Dental Association and
California Dental Association. The principal financial products offered by
Matsco include practice start-up financing, practice expansion financing,
practice acquisition financing, working capital and financing for retirement
planning. These products are structured as either equipment leases or loans.
16
<PAGE>
RISK FACTORS
Prospective purchasers of the exchange capital securities should carefully
review the information contained elsewhere or incorporated by reference, in
this prospectus and should particularly consider the following factors, which
do not necessarily appear in the order of importance. Investors should consider
all of these factors to be important. Because holders of the exchange capital
securities may receive exchange debentures in exchange therefor upon
liquidation of the Trust, prospective purchasers of the exchange capital
securities are also making an investment decision with regard to the exchange
debentures and should carefully review all the information regarding the
exchange debentures contained in this prospectus.
Risks Related to Your Investment in the Exchange Capital Securities
Greater Bay Bancorp cannot make payments under the exchange guarantee or the
exchange debentures if Greater Bay Bancorp defaults on its obligations that
are more senior.
Our obligations under the exchange guarantee and the exchange debentures are
unsecured and rank
. junior to all of our other borrowings, except those borrowings that by
their terms are equal or junior;
. junior to all of our subsidiaries' liabilities, including the Banks'
deposit accounts; and
. senior to our common stock and preferred stock.
This means that we cannot pay under the exchange guarantee or the exchange
debentures if we default on payments of any of our other borrowings, unless, by
their terms, those borrowings are equal or junior to the exchange guarantee. In
addition, if the maturity of the exchange debentures is accelerated, we cannot
pay under the exchange guarantee or the exchange debentures until all of our
more senior borrowings are paid in full. Finally, if we liquidate, go bankrupt
or dissolve, we would be able to pay under the exchange guarantee and the
exchange debentures only after we have paid all of our liabilities that are
senior to the exchange guarantee. At June 30, 2000, we had $20 million in
senior indebtedness.
If we default on our obligations to pay principal or interest on the
exchange debentures, the Trust will not have sufficient funds to make
distribution, redemption or liquidation payments on the exchange capital
securities. As a result, you will not be able to rely upon our exchange
guarantee for payment of these amounts. Instead, you may seek legal redress
against us directly to collect payments owed to you or rely on the property
trustee to enforce the rights of the Trust under the exchange debentures
against us.
The exchange capital securities, exchange guarantee, the exchange debentures
and the indenture do not limit our ability to incur additional debt, including
debt that is senior to the exchange debentures in priority of payment.
The ability of the Trust to make payments due on the exchange capital
securities is solely dependent on us making payments on the exchange debentures
as and when required.
For more information on payments under the exchange guarantee and the
exchange debentures, you should refer to "Description of Exchange Guarantee--
Status of the Exchange Guarantee" and "Description of Exchange Debentures--
Subordination."
Banking laws and regulations limit Greater Bay Bancorp's access to funds,
which may prevent Greater Bay Bancorp from making payments under the exchange
debentures and the exchange guarantee.
We are a bank holding company regulated by the Federal Reserve Board, and
almost all our operating assets are owned by our subsidiaries. We rely
primarily on dividends from the Banks to meet our obligations for payment of
principal and interest on our outstanding debt obligations and corporate
expenses. Dividend payments from the Banks are subject to regulatory
limitations, generally based on current and retained
17
<PAGE>
earnings, imposed by the various regulatory agencies with authority over each
of the Banks. Payment of dividends by the Banks is also subject to each of the
Bank's profitability, financial condition and capital expenditures and other
cash flow requirements. Bank regulatory agencies have authority to prohibit the
Banks or Greater Bay Bancorp from engaging in an unsafe or unsound practice in
conducting their business. The payment of dividends, depending upon the
financial condition of the Banks or Greater Bay Bancorp, could be deemed to
constitute an unsafe or unsound practice. The Federal Reserve Board has stated
that, as a matter of prudent banking, a bank or bank holding company should not
maintain its existing rate of cash dividends on common stock unless (1) the
organization's net income available to common shareholders over the past year
has been sufficient to fund fully the dividends; and (2) the prospective rate
of earnings retention appears consistent with the organization's capital needs,
asset quality, and overall financial condition.
Under the prompt corrective action provisions of the Federal Deposit
Insurance Act, the Banks are prohibited from making capital distributions,
including the payment of dividends, if, after making any capital distribution,
the institution would become undercapitalized as defined under the Federal
Deposit Insurance Act. Based on the Banks' current financial condition, we do
not expect that this provision will have any impact on our ability to obtain
dividends from the Banks. Payment of dividends by the Banks also may be
restricted at any time at the discretion of the appropriate regulator if it
deems the payment to constitute unsafe or unsound banking practice. As of June
30, 2000, approximately $92.5 million is available for the payment of dividends
to us without further approval from the bank regulatory authorities.
We cannot assure you that the Banks will be able to pay dividends at past
levels, or at all, in the future. See the section entitled "Supervision and
Regulation" in our Annual Report on Form 10-K for the year ended December 31,
1999, which is incorporated in this prospectus by reference.
In addition to regulatory restrictions on the payment of dividends, the
Banks are subject to certain restrictions imposed by federal law on any
extensions of credit it makes to its affiliates and on investments in stock or
other securities of its affiliates. We are considered an affiliate of the
Banks. These restrictions prevent affiliates of the Banks, including us, from
borrowing from the Banks, unless various types of collateral secure the loans.
Federal law limits the aggregate amount of loans to and investments in any
single affiliate to 10% of each Bank's capital stock and surplus and also
limits the aggregate amount of loans to and investments in all affiliates to
20% of each Bank's capital stock and surplus. As of June 30, 2000,
approximately $27.7 million of credit was available to us under this
limitation.
If we do not receive sufficient cash dividends or borrowings from the Banks,
then it is unlikely that we will have sufficient funds to make payments on the
exchange debentures and the exchange guarantee, thereby leaving insufficient
funds for the Trust to make payments to you on the exchange capital securities.
Also, as a holding company, our right to receive any distribution of assets
of any subsidiary, upon such subsidiary's liquidation or reorganization or
otherwise (and thus your right to benefit indirectly from such distribution),
is subject to the prior claims of creditors of that subsidiary, except to the
extent we are also recognized as a creditor of that subsidiary. For example, if
any Bank is liquidated or reorganized, depositors of such Bank would have the
right to receive distributions from that Bank before us unless we were
considered a creditor of that Bank. At June 30, 2000, the Banks had total
liabilities, including deposits, of $3.4 billion.
Greater Bay Bancorp can defer interest payments on the exchange debentures,
causing your payments under the exchange capital securities to stop, which
will have tax consequences to you and may affect the market price of the
exchange capital securities.
We have the right, at one or more times, unless an event of default exists
under the exchange debentures, to defer interest payments on the exchange
debentures for up to 10 consecutive semi-annual periods, but not beyond June 1,
2030. If we defer interest payments, the Trust will defer paying distributions
to you on your exchange capital securities during the deferral period.
Additionally, during this period, any unpaid distributions on the exchange
capital securities will accumulate additional distributions at the rate of
10.75% per year,
18
<PAGE>
compounded semi-annually, to the extent permitted by law. During this time, we
will be prohibited from declaring or paying cash dividends on our common stock
and preferred stock and making payments on certain of our debt securities. For
more information, please refer to "Description of Exchange Capital Securities--
Distributions."
When any deferral period ends and we pay all interest then accrued and
unpaid on the exchange debentures, we may elect to begin a new deferral period.
There is no limitation on the number of times that we may elect to begin a
deferral period. See "Description of Exchange Capital Securities--
Distributions" and "Description of Exchange Debentures--Option to Extend
Interest Payment Date."
If we exercise our right to defer payments of interest on the exchange
debentures, you will be required to accrue income (as original issue discount)
in respect of the deferred stated interest allocable to your exchange capital
securities for federal income tax purposes, which will be allocated but not
distributed to you. As a result, you will be required to recognize income for
federal income tax purposes before you receive any cash. Furthermore, if you
dispose of your exchange capital securities prior to the record date for the
distribution payment, you will not receive, from the Trust, the cash related to
this interest income.
As a result of our right to defer interest payments, the market price of the
exchange capital securities, which represent preferred beneficial interests in
the Trust, may be more volatile than the market prices of other securities that
are not subject to such deferral options. We do not currently intend to
exercise our right to defer interest payments on the exchange debentures.
However, if we exercise this right in the future, the market price of the
exchange capital securities will probably be affected. The exchange capital
securities may trade at a price that does not fully reflect the value of
accrued but unpaid interest on the exchange debentures. If you sell your
exchange capital securities during a deferral period, you may not receive the
same return on your investment as someone else who continues to hold the
exchange capital securities.
Distribution of exchange debentures upon dissolution of the Trust may have a
possible adverse effect on trading price.
We have the right to dissolve the Trust at any time if such dissolution and
any distribution of the exchange debentures would not result in a taxable event
to the holders of the exchange capital securities. If we dissolve the Trust,
the Trust will be liquidated by distribution of the exchange debentures to
holders of the exchange capital securities and the common securities.
Under current federal income tax laws, a distribution of exchange debentures
to you on the dissolution of the Trust would not be a taxable event to you.
Nevertheless, if the Trust is classified for federal income tax purposes as an
association taxable as a corporation at the time it is dissolved, the
distribution of exchange debentures to you would be a taxable event. In
addition, if there is a change in law, a distribution of exchange debentures to
you on the dissolution of the Trust could also be a taxable event.
Your investment in the exchange capital securities may decrease in value if
the exchange debentures are distributed to you in liquidation of the Trust. We
cannot predict the liquidity of the market or market prices for the exchange
debentures that may be distributed. Accordingly, the exchange debentures that
you receive upon a distribution, or the exchange capital securities you hold
pending such distribution, may trade at a discount to the price that you paid
to purchase the exchange capital securities.
Because you may receive the exchange debentures, you must also make an
investment decision with regard to the exchange debentures. You should
carefully review all of the information regarding the exchange debentures
contained in this prospectus.
You will have limited voting rights.
As a holder of exchange capital securities, you will have limited voting
rights. You can vote only to modify certain terms of the exchange capital
securities or on the removal of the property and Delaware trustees
19
<PAGE>
of the Trust upon a limited number of events. We, along with the property
trustee and the administrative trustees, may amend the trust agreement without
your consent even if these actions adversely affect your interests, to ensure
that the Trust:
. will continue to be classified as a grantor trust for federal income tax
purposes; and
. will not be required to register as an "investment company" under the
Investment Company Act of 1940.
You will not have any voting rights regarding Greater Bay Bancorp or the
administrative trustees or with respect to any matters submitted to a vote of
our common stockholders. See "Description of Exchange Capital Securities--
Voting Rights; Amendment of the Trust Agreement" and "--Removal of Issuer
Trustees" for more information on your limited voting rights.
The limited covenants relating to the exchange capital securities and the
exchange debentures do not protect you.
The covenants in the governing documents relating to the exchange capital
securities and the exchange debentures are limited. As a result, the governing
documents do not protect you in the event of an adverse change in our
financial condition or results of operations. In addition, the governing
documents do not limit our ability, or the ability of our subsidiaries, to
incur additional debt. You should not consider the terms of the governing
documents to be a significant factor in evaluating whether we will be able to
comply with our obligations under the exchange debentures or the guarantee. In
addition, the governing documents do not limit our ability, or the ability of
our subsidiaries, to incur additional debt.
Trading characteristics of the exchange capital securities may create adverse
tax consequences for you.
The exchange capital securities may trade at a price that does not reflect
the value of the accrued but unpaid interest on the underlying exchange
debentures. If you dispose of your exchange capital securities between the
record date for payments on the exchange capital securities, you may have
adverse tax consequences. Under these circumstances, you will be required to
include accrued but unpaid interest on the exchange debentures allocable to
the exchange capital securities through the date of disposition in your
income. If interest on the exchange debentures is included in income under the
original issue discount provisions, you would add this amount to your adjusted
tax basis in your share of the underlying exchange debentures deemed disposed.
If your selling price is less than your adjusted tax basis, which will include
all accrued but unpaid original issue discount interest included in your
income, you could recognize a capital loss which cannot be applied to offset
ordinary income for federal income tax purposes, subject to exceptions. See
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount" and "--Sales or Redemptions of Capital Securities" for more
information on possible adverse tax consequences to you.
Your failure to exchange original capital securities may adversely affect
your ability to sell such securities.
The original capital securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws,
or pursuant to an exemption from the applicable securities laws or in a
transaction not subject to such laws, and in each case in compliance with
certain other conditions and restrictions. Original capital securities which
remain outstanding after consummation of the exchange offer will continue to
bear a legend reflecting such restrictions on transfer. In addition, upon
consummation of the exchange offer, holders of original capital securities
which remain outstanding will not be entitled to any rights to have such
original capital securities registered under the Securities Act or to any
similar rights under the registration rights agreement, subject to certain
limited exceptions. We and the Trust do not intend to register under the
Securities Act any original capital securities
20
<PAGE>
which remain outstanding after consummation of the exchange offer, subject to
such limited exceptions, if applicable. To the extent that original capital
securities are tendered and accepted in the exchange offer, your ability to
sell untendered original capital securities could be adversely affected.
The exchange capital securities and any original capital securities which
remain outstanding after consummation of the exchange offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding liquidation amount thereof have taken certain actions
or exercised certain rights under the trust agreement. See "Description of
Exchange Capital Securities--Voting Rights; Amendment of the Trust Agreement."
Absence of public market; restrictions on resale.
The original capital securities were issued to, and we believe such
securities are currently owned by, less than beneficial owners. We have not
registered the original capital securities under the Securities Act and they
will be subject to restrictions on transferability if they are not exchanged
for the exchange capital securities. Although the exchange capital securities
may be resold or otherwise transferred by the holders, who are not affiliates
of Greater Bay Bancorp or the Trust, without compliance with the registration
requirements under the Securities Act, they will constitute a new issue of
securities with no established trading market and will be transferable only in
blocks having a liquidation amount of not less than $100,000 (100 exchange
capital securities).
The transfer restrictions on all capital securities are described in "Notice
to Investors." There is no existing market for the capital securities and there
can be no assurance as to:
. the liquidity of any markets that may develop for the capital securities
or, if issued, the exchange capital securities;
. the ability of the holders to sell the capital securities or, if issued,
the exchange capital securities; or
. the price, if any, at which holders of the capital securities, or, if
issued, the exchange capital securities, will be able to sell their
capital securities or the exchange capital securities, as the case may
be.
If a public trading market develops, future trading prices of the exchange
capital securities will depend on many factors, including, among others,
prevailing interest rates, our operating results and the market for similar
securities. The initial purchasers have informed the Trust and us that they
intend to make a market in the capital securities. However, the initial
purchasers are not obligated to do so and any such activity may be terminated
at any time without notice to the holders of the capital securities. In
addition, any market making activity will be subject to the limits of the
Securities Act and may be limited during the pendency of the exchange offer.
Accordingly, we cannot assure you that an active public or other market will
develop for the exchange capital securities, or as to the liquidity of or the
trading market for the exchange capital securities. If an active public market
does not develop, the market price and liquidity of the exchange capital
securities may be adversely affected. In addition, neither we nor the Trust
intend to apply for listing of the exchange capital securities on any
securities exchange or for quotation through The Nasdaq Stock Market, Inc. See
"Plan of Distribution."
Notwithstanding the registration of the exchange capital securities in the
exchange offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of us or the Trust may publicly offer for sale or resell the
exchange capital securities only in compliance with the provisions of Rule 144
under the Securities Act.
Each broker-dealer that receives exchange capital securities for its own
account in exchange for original capital securities, where such original
capital securities were acquired by such broker-dealer as a result of market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such exchange capital
securities. See "Plan of Distribution."
21
<PAGE>
We are not obligated to notify you of defects or irregularities in the
exchange offer procedures.
Subject to conditions set forth under "The Exchange Offer--Conditions to the
Exchange Offer," issuance of the exchange capital securities in exchange for
original capital securities under the exchange offer will be made only after a
timely receipt by the Trust of:
. a book-entry confirmation evidencing the tender of such original capital
securities through ATOP; or
. certificates representing such original capital securities, a properly
completed and duly executed letter of transmittal, with any required
signature guarantees, and all other required documents.
Therefore, holders of the original capital securities desiring to tender
such original capital securities should allow sufficient time to ensure timely
delivery. See "The Exchange Offer--Acceptance for Exchange and Issuance of
Exchange Capital Securities" and "--Procedures for Tendering Original Capital
Securities." Neither we nor the Trust is under any duty to give notification of
defects or irregularities with respect to the tenders of original capital
securities for exchange.
Risks Relating to Greater Bay Bancorp and its Subsidiaries
Failure to successfully execute our growth strategy or to integrate recently
acquired subsidiaries could adversely affect our performance.
Our financial performance and profitability will depend on our ability to
execute our corporate growth strategy and manage our recent and possible future
growth. Although management believes that it has substantially integrated the
business and operations of recently acquired subsidiaries, there can be no
assurance that unforeseen issues relating to the assimilation of these
subsidiaries will not adversely affect us. In addition, any future acquisitions
and our continued growth may present operating and other problems that could
have an adverse effect on our business, financial condition and results of
operations. Our financial performance will also depend on our ability to
maintain profitable operations through implementation of our Super Community
Banking Philosophy. Accordingly, there can be no assurance that we will be able
to execute our growth strategy or maintain the level of profitability that we
have recently experienced.
Changes in market interest rates may adversely affect our performance.
Our earnings are impacted by changing interest rates. Changes in interest
rates impact the demand for new loans, the credit profile of existing loans,
the rates received on loans and securities and rates paid on deposits and
borrowings. The relationship between the rates received on loans and securities
and the rates paid on deposits and borrowings is known as interest rate spread.
Given our current volume and mix of interest-bearing liabilities and interest-
earning assets, our interest rate spread could be expected to increase during
times of rising interest rates and, conversely, to decline during times of
falling interest rates. Although we believe our current level of interest rate
sensitivity is reasonable, significant fluctuations in interest rates may have
an adverse effect on our business, financial condition and results of
operations.
Our Bay Area business focus and economic conditions in the Bay Area could
adversely affect our operations.
Our operations are located in Northern California and concentrated primarily
in Alameda, Contra Costa, San Francisco, San Mateo, Santa Clara and Santa Cruz
Counties, which includes the area known as the "Silicon Valley." As a result of
this geographic concentration, our results depend largely upon economic
conditions in these areas. A deterioration in economic conditions in our market
areas, particularly in the technology and real estate industries on which these
areas depend, could have a material adverse impact on the quality of our loan
portfolio, the demand for our products and services, which in turn may have a
material adverse effect on our results of operations.
22
<PAGE>
We are subject to government regulation that could limit or restrict our
activities, which in turn could adversely impact our operations.
The financial services industry is regulated extensively. Federal and state
regulation is designed primarily to protect the deposit insurance funds and
consumers, and not to benefit our shareholders. These regulations can sometimes
impose significant limitations on our operations. In addition, these
regulations are constantly evolving and may change significantly over time.
Significant new laws or changes in existing laws or repeal of existing laws may
cause our results to differ materially. Further, federal monetary policy,
particularly as implemented through the Federal Reserve System, significantly
affects credit conditions for us.
Competition may adversely affect our performance.
The financial services business in our market areas is highly competitive.
It is becoming increasingly competitive due to changes in regulation,
technological advances, and the accelerating pace of consolidation among
financial services providers. We face competition both in attracting deposits
and in making loans. We compete for loans principally through the interest
rates and loan fees we charge and the efficiency and quality of services we
provide. Increasing levels of competition in the banking and financial services
businesses may reduce our market share or cause the prices we charge for our
services to fall. Our results may differ in future periods depending upon the
nature or level of competition.
If a significant number of borrowers, guarantors and related parties fail to
perform as required by the terms of their loans, we will sustain losses.
A significant source of risk arises from the possibility that losses will be
sustained if a significant number of our borrowers, guarantors and related
parties fail to perform in accordance with the terms of their loans. We have
adopted underwriting and credit monitoring procedures and credit policies,
including the establishment and review of the allowance for credit losses, that
management believes are appropriate to minimize this risk by assessing the
likelihood of nonperformance, tracking loan performance and diversifying our
credit portfolio. These policies and procedures, however, may not prevent
unexpected losses that could materially adversely affect our results of
operations.
23
<PAGE>
USE OF PROCEEDS
Neither we nor the Trust will receive any cash proceeds from the issuance of
the exchange capital securities and the exchange guarantee. In consideration
for issuing the exchange capital securities in exchange for original capital
securities as described in this prospectus, the Trust will receive original
capital securities in like liquidation amount. The original capital securities
surrendered in exchange for the exchange capital securities will be retired and
canceled.
All of the proceeds from the sale by the Trust of its original capital
securities and common securities were invested by the Trust in the original
junior subordinated debentures. We received approximately $40 million in net
proceeds from the sale of the original junior subordinated debentures. We used
approximately $12.5 million of the net proceeds from the sale of the original
junior subordinated debentures to invest in the Banks to increase their capital
levels and for general corporate purposes, including, without limitation,
funding additional investments in, or extension of credit to, the Banks and
possible future acquisitions. Initially, we invested the net proceeds in short-
term investment grade financial securities.
REGULATORY CAPITAL RATIOS
The following table sets forth our consolidated capital ratios at June 30,
2000
. on an actual basis, and
. on a pro forma basis to give effect to the consummation of the merger
with Bank of Petaluma as if it had occurred on June 30, 2000.
<TABLE>
<CAPTION>
June 30, 2000
---------------
Pro
Actual Forma
------- ------
<S> <C> <C>
Tier 1 risk-based capital................................. 10.86% 10.87%
Total risk-based capital.................................. 12.62% 12.61%
Leverage.................................................. 9.18% 9.16%
</TABLE>
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as our subsidiary,
and, accordingly, the accounts of the Trust are included in our consolidated
financial statements. The capital securities are presented as a separate line
item in our consolidated balance sheet and appropriate disclosures about the
capital securities, the guarantees and the junior subordinated debentures are
included in the notes to consolidated financial statements. For financial
reporting purposes, we will record distributions payable on the capital
securities as non-interest expense in the consolidated statements of
operations.
Future reports we file under the Exchange Act will include a footnote to the
consolidated financial statements stating that:
. the Trust is wholly-owned;
. the sole assets of the Trust are the junior subordinated debentures
(specifying the principal amount, interest rate and maturity date of
such junior subordinated debentures); and
. our obligations under the trust agreement, the junior subordinated
debentures and related indenture and the guarantee in the aggregate,
constitute a full and unconditional guarantee by us of the obligations
of the Trust under the capital securities.
We expect that the Trust will not be required to provide separate reports
under the Exchange Act.
24
<PAGE>
CAPITALIZATION
The following table sets forth our consolidated capitalization at June 30,
2000
. on an actual basis, and
. on a pro forma basis to give effect to the consummation of the merger
with Bank of Petaluma as if it had occurred on June 30, 2000.
Consummation of the exchange offer will have no effect on such
capitalization.
You should read this table in conjunction with our supplemental consolidated
financial statements and related notes contained in our Current Reports on Form
8-K filed with the Commission on July 26, 2000 and August 7, 2000, incorporated
herein by reference.
<TABLE>
<CAPTION>
June 30, 2000
----------------
Pro
Actual Forma
------- -------
(In thousands)
<S> <C> <C>
Long-term debt............................................ $12,000 $12,000
Company obligated mandatorily redeemable trust preferred
securities of subsidiary trusts holding solely junior
subordinated debentures(1)............................... 99,500 99,500
Preferred stock, no par value: 4,000,000 shares
authorized, none issued.................................. -- --
Common stock, no par value: 40,000,000 shares authorized,
19,814,173 outstanding................................... 153,704 162,826
Accumulated other comprehensive income.................... (14,722) (15,777)
Retained earnings......................................... 131,286 139,578
------- -------
Total shareholders' equity.............................. 270,268 286,627
------- -------
Total capitalization.................................... 381,768 398,127
======= =======
</TABLE>
--------
(1) The subsidiary trusts are: (i) GBB Capital I, which issued trust preferred
securities on March 31, 1997 and holds $20.0 million in 9.75% Junior
Subordinated Deferrable Interest Debentures issued by Greater Bay Bancorp;
(ii) GBB Capital II, which issued trust preferred securities on August 12,
1998 and holds $30.0 million in Floating Rate Junior Subordinated
Deferrable Interest Debentures issued by Greater Bay Bancorp; (iii) GBB
Capital III, which issued trust preferred securities on March 23, 2000 and
holds $9.5 million in 10.875% Junior Subordinated Deferrable Interest
Debentures issued by Greater Bay Bancorp; and (iv) GBB Capital IV, which
holds the junior subordinated debentures as its sole asset. The capital
securities are issued by the Trust.
25
<PAGE>
GREATER BAY BANCORP
We are a bank holding company operating Bank of Santa Clara, Bay Area Bank,
Bay Bank of Commerce, Coast Commercial Bank, Cupertino National Bank, Golden
Gate Bank, Mid-Peninsula Bank, Mt. Diablo National Bank and Peninsula Bank of
Commerce.
We provide a wide range of commercial banking services to small and medium-
sized businesses, real estate developers, property managers, business
executives, professionals and other individuals. We operate throughout Silicon
Valley, San Francisco, the San Francisco Peninsula, the Contra Costa Tri-Valley
Region and the Coastal Region with 33 offices located in Aptos, Blackhawk,
Capitola, Cupertino, Danville, Fremont, Hayward, Lafayette, Milpitas, Millbrae,
Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Leandro, San
Mateo, San Ramon, Santa Clara, Santa Cruz, Scotts Valley, Sunnyvale, Walnut
Creek and Watsonville. At June 30, 2000, we had total assets of $4.1 billion,
total net loans of $2.7 billion and total deposits of $3.5 billion.
History
Greater Bay Bancorp became a multi-bank holding company as the result of the
merger in November 1996 of Cupertino National Bancorp and Mid-Peninsula
Bancorp. Following the merger, we operated two banks:
. Cupertino National Bank, which commenced operations in May 1985; and
. Mid-Peninsula Bank, which commenced operations in October 1987.
We have continued to expand our presence within our market areas by
affiliating with other quality banking organizations, and select niche
financial services companies. In addition, we have successfully operated key
regional bank locations to respond to market and client demands and key new
businesses that expand our product offerings.
The following provides a chronological list of the acquisitions that we have
completed since 1996:
<TABLE>
<CAPTION>
Year
Former Bank Holding Commenced
Date of Merger Entity Company Operations
---------------- -------------------------------------- -------------------------- ----------
<S> <C> <C> <C>
December 23,1997 Peninsula Bank of Commerce None 1981
May 8, 1998 Golden Gate Bank Pacific Rim Bancorporation 1976
August 31, 1998 Pacific Business Funding Corporation(1) None 1995
May 21, 1999 Bay Area Bank Bay Area Bancshares 1979
October 15, 1999 Bay Bank of Commerce Bay Commercial Services 1981
January 31, 2000 Mt. Diablo National Bank Mt. Diablo Bancshares 1993
May 18, 2000 Coast Commercial Bank Coast Bancorp 1982
July 21, 2000 Bank of Santa Clara None 1973
</TABLE>
--------
(1) Pacific Business Funding Corporation was an asset-based lending and
factoring company which now operates and conducts business as a division
of Cupertino National Bank under the name Pacific Business Funding.
These mergers were all accounted for under the pooling-of-interests method
of accounting. All of our financial information for the periods prior to the
mergers has been restated as if the mergers had occurred at the beginning of
the earliest reporting period presented.
We organized GBB Capital I in March 1997, GBB Capital II in May 1998, GBB
Capital III in March 2000 and GBB Capital IV in April 2000, each for the
purpose of issuing and selling capital securities and using the proceeds to
acquire junior subordinated debentures from us.
26
<PAGE>
Company Goals
We strive to achieve the following seven primary goals:
. Developing a greater banking presence throughout the San Francisco Bay
Area and other selected markets primarily in Northern California by
increasing the number of banking offices and banking services available
to our clients;
. Reaching a critical mass in our market areas to meet the competitive
challenges of the banking and financial services industries;
. Maximizing our utilization of capital by increasing the float and
marketability of our common stock and, by virtue of our larger size,
obtaining access to lower cost capital;
. Realizing operating efficiencies through the acquisition of banking and
financial services companies under a holding company umbrella;
. Generating increased loan and fee income as a result of the higher
lending limits available to the combined entity;
. Leveraging our marketing expense to improve the return on the combined
entity's marketing investment; and
. Enabling banking and financial services subsidiaries to bundle and
cross-sell our services.
Super Community Banking Philosophy
In order to meet the demands of the increasingly competitive banking and
financial services industries, we have adopted a business philosophy referred
to as the "Super Community Banking Philosophy." Our Super Community Banking
Philosophy is based on our belief that banking clients value doing business
with locally managed institutions that can provide a full service commercial
banking relationship through an understanding of the clients' financial needs
with the flexibility to deliver customized solutions through our menu of
products and services. We also believe that banks who affiliate with us and
implement our Super Community Banking Philosophy are better able to build
successful client relationships as the holding company provides cost effective
administrative support services while promoting bank autonomy and flexibility
in serving client needs.
To implement our philosophy, we retain the independent names and separate
Board of Directors of each of the Banks. The Banks have established strong
reputations and client followings in their market areas through attention to
client service and an understanding of client needs.
In an effort to capitalize on the identities and reputations of the Banks,
we currently intend to continue to market our services under each bank's name,
primarily through the Banks' relationship managers. The primary focus for the
Banks' relationship managers is to cultivate and nurture their client
relationships. Relationship managers are assigned to each borrowing client to
provide continuity in the banking relationship. This emphasis on personalized
relationships requires that all of our relationship managers maintain close
ties to the communities in which they serve, so they are able to capitalize on
their efforts through expanded business opportunities for the Banks.
While client service decisions and day-to-day operations are maintained at
the Banks, we offer the advantages of affiliation with a multi-bank holding
company. We provide the Banks expanded client support services, such as
increased client lending capacity, business cash management and international
trade finance services. In addition, we provide centralized administrative
functions, including support in credit policy formulation and review,
investment management, data processing, accounting, loan servicing and other
specialized support functions. All of these centralized services are designed
to enhance the ability of the relationship managers to expand their client
relationship bases.
27
<PAGE>
Corporate Growth Strategy
Our primary goal is to become the preeminent independent financial services
company in Northern California. Our primary business strategy is to focus on
increasing market share within the communities we serve through continued
internal growth. We also pursue opportunities in contiguous and infill market
areas to expand our market share through select acquisitions that we believe
complement our businesses. Consistent with our operating philosophy and growth
strategy, we regularly evaluate opportunities to acquire banks and other
financial services companies that complement our existing business, expand our
market coverage and share and enhance our client product offerings.
28
<PAGE>
GBB CAPITAL IV
The Trust is a statutory business trust created under Delaware law upon the
filing of a certificate of trust with the Delaware Secretary of State. The
Trust exists for the exclusive purposes of:
. issuing and selling the capital securities and the common securities;
. using the proceeds from the sale of the capital securities and the
common securities to acquire the junior subordinated debentures issued
by us; and
. engaging in only those other activities necessary, advisable or
incidental thereto, including the exchange offer.
The junior subordinated debentures are the sole assets of the Trust, and,
accordingly, payments under the junior subordinated debentures will be the sole
revenues of the Trust. We own all of the common securities of the Trust, which
have an aggregate liquidation amount equal to at least 3% of the total capital
of the Trust. The common securities rank pari passu, and payments will be made
thereon pro rata, with the capital securities, except that upon the occurrence
and continuance of an event of default under the trust agreement resulting from
an event of default under the junior subordinated debentures, our rights as
holder of the common securities to payments in respect of distributions and
payments upon liquidation, redemption or otherwise will be subordinated to the
rights of the holders of the capital securities. See "Description of Capital
Securities--Subordination of Common Securities."
The Trust has a term of approximately 35 years, but may dissolve earlier as
provided in its Amended and Restated Declaration of Trust, referred to in this
prospectus as the trust agreement. The Trust's business and affairs are
conducted by the issuer trustees. The trustees for the Trust are Wilmington
Trust Company, as the property trustee and as the Delaware trustee, and three
administrative trustees who are our officers. Wilmington Trust Company will
also act as guarantee trustee under the exchange guarantee and as debenture
trustee under the indenture. See "Description of Exchange Guarantee" and
"Description of Exchange Debentures." The holder of the common securities of
the Trust or, if an event of default under the trust agreement has occurred and
is continuing, the holders of a majority in liquidation amount of the capital
securities will be entitled to appoint, remove or replace the property trustee
and/or the Delaware trustee. In no event will the holders of the exchange
capital securities have the right to vote to appoint, remove or replace the
administrative trustees; such voting rights will be vested exclusively in the
holder of the common securities.
The trust agreement governs the duties and obligations of each issuer
trustee. As issuer of the exchange debentures, we will pay all fees, expenses,
debts and obligations, other than the payment of principal of, and interest on,
the capital securities, related to the Trust and the offering of the exchange
capital securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Trust. The principal executive office of the
Trust is c/o Greater Bay Bancorp, 2860 West Bayshore Road, Palo Alto,
California 94303 and its telephone number is (650) 813-8200.
29
<PAGE>
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the original capital securities, we and the
Trust entered into the registration rights agreement with the initial
purchasers, under which we and the Trust agreed to file and to use our best
efforts to cause to become effective with the Commission a registration
statement with respect to the exchange of the original capital securities for
exchange capital securities with terms identical in all material respects to
the terms of the original capital securities. We filed a copy of the
registration rights agreement has been filed as an exhibit to the registration
statement of which this prospectus is a part.
We and the Trust are making the exchange offer to satisfy contractual
obligations under the registration rights agreement. The form and terms of the
exchange capital securities are the same as the form and terms of the original
capital securities except that the exchange capital securities have been
registered under the Securities Act and will not provide for any increase in
the distribution rate and certain restrictions on transfer applicable to the
original capital securities. In that regard, the original capital securities
provide, among other things, that, if the Trust has not exchanged the exchange
capital securities for all original capital securities validly tendered on or
prior to the 45th day after the registration statement is declared effective,
the distribution rate borne by the original capital securities will increase by
25 basis points per annum until the exchange offer is consummated. Upon
consummation of the exchange offer, holders of original capital securities will
not be entitled to any increase in the distribution rate on the original
capital securities or any further registration rights under the registration
rights agreement, except under limited circumstances. See "Risk Factors."
The exchange offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of original capital securities in any jurisdiction
in which the exchange offer or its acceptance would not be in compliance with
the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
exchange offer means any person in whose name the original capital securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
original capital securities are held of record by DTC who desires to deliver
such original capital securities by book-entry transfer at DTC.
Under the exchange offer, we will exchange as soon as practicable after the
date of this prospectus the original guarantee for the exchange guarantee and
the original junior subordinated debentures, in an amount corresponding to the
original capital securities accepted for exchange, for a like aggregate
principal amount of the exchange debentures. The exchange guarantee and
exchange debentures have been registered under the Securities Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this prospectus and in the accompanying letter of transmittal, to
exchange up to $41,000,000 aggregate liquidation amount of exchange capital
securities for a like aggregate liquidation amount of original capital
securities properly tendered on or prior to the expiration date and not
properly withdrawn in accordance with the procedures described below. The Trust
will issue, promptly after the expiration date, an aggregate liquidation amount
of up to $41,000,000 of exchange capital securities in exchange for a like
principal amount of outstanding original capital securities tendered and
accepted in connection with the exchange offer. Holders may tender their
original capital securities in whole or in part in a liquidation amount of not
less than $100,000, which equals 100 original capital securities, or any
integral multiple of $1,000 liquidation amount, which equals 10 original
capital securities, in excess of $100,000.
30
<PAGE>
The exchange offer is not conditioned upon any minimum liquidation amount of
original capital securities being tendered. As of the date of this prospectus,
$41,000,000 aggregate liquidation amount of the original capital securities is
outstanding.
You do not have any appraisal or dissenters' rights in connection with the
exchange offer. Original capital securities which are not tendered for or are
tendered but not accepted in connection with the exchange offer will remain
outstanding and be entitled to the benefits of the trust agreement, but will
not be entitled to any further registration rights under the registration
rights agreement, except under limited circumstances. See "Risk Factors" and
"Description of Original Securities."
If we do not accept any tendered original capital securities for exchange
because of an invalid tender, the occurrence of certain other events set forth
in this prospectus or otherwise, certificates for any such unaccepted original
capital securities will be returned, without expense, to the tendering holder
promptly after the expiration date.
Holders who tender original capital securities in connection with the
exchange offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the letter of transmittal, transfer taxes with
respect to the exchange of original capital securities in connection with the
exchange offer. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. See
"--Fees and Expenses."
Neither we, our Board of Directors nor any administrative trustee of the
Trust makes any recommendation to you as to whether to tender or refrain from
tendering all or any portion of your original capital securities pursuant to
the exchange offer. In addition, no one has been authorized to make any such
recommendation. You must make your own decisions whether to tender pursuant to
the exchange offer and, if so, the aggregate amount of original capital
securities to tender based your own financial positions and requirements.
Expiration Date; Extensions; Amendments
The term "expiration date" means 5:00 p.m., Eastern time, on ,
2000, unless we or the Trust extends the exchange offer, in which case the term
"expiration date" shall mean the latest date and time to which the exchange
offer is extended.
We and the Trust expressly reserve the right in our sole and absolute
discretion, subject to applicable law, at any time and from time to time:
. to delay the acceptance of the original capital securities for exchange;
. to terminate the exchange offer, whether or not any original capital
securities have theretofore been accepted for exchange, if the Trust
determines, in its sole and absolute discretion, that any of the events
or conditions referred to under "--Conditions to the Exchange Offer"
have occurred or exist or have not been satisfied;
. to extend the expiration date of the exchange offer and retain all
original capital securities tendered under the exchange offer, subject,
however, to the right of holders of original capital securities to
withdraw their tendered original capital securities as described under
"--Withdrawal Rights;" and
. to waive any condition or otherwise amend the terms of the exchange
offer in any respect.
If we amend the exchange offer in a manner we and the Trust determine to
constitute a material change, or if we and the Trust waive a material condition
of the exchange offer, we and the Trust will promptly disclose such amendment
by means of a prospectus supplement that will be distributed to the holders of
the original capital securities, and we and the Trust will extend the exchange
offer to the extent required by Rule 14e-1 under the Exchange Act.
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Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice to the exchange agent and by making
a public announcement, and such announcement in the case of an extension will
be made no later than 9:00 a.m., Eastern time, on the next business day after
the previously scheduled expiration date. Without limiting the manner in which
we and the Trust may choose to make any public announcement and subject to
applicable law, we and the Trust shall have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
release to an appropriate news agency.
Acceptance for Exchange and Issuance of Exchange Capital Securities
Upon the terms and subject to the conditions of the exchange offer, the
Trust will exchange, and will issue to the exchange agent, exchange capital
securities for original capital securities validly tendered and not withdrawn
promptly after the expiration date.
In all cases, delivery of exchange capital securities in exchange for
original capital securities tendered and accepted for exchange under the
exchange offer will be made only after timely receipt by the exchange agent of
(1) the book-entry confirmation described below under "--Procedures for
Tendering Original Capital Securities Book-Entry Transfer" or (2) certificates
representing such original capital securities, the letter of transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by the letter of
transmittal.
Subject to the terms and conditions of the exchange offer, the Trust will be
deemed to have accepted for exchange, and thereby exchanged, original capital
securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the exchange agent of the Trust's acceptance of such
original capital securities for exchange under the exchange offer. The exchange
agent will act as agent for the Trust for the purpose of receiving tenders of
book-entry confirmations or certificates representing original capital
securities, letters of transmittal and related documents, and as agent for
tendering holders for the purpose of receiving book-entry confirmations or
certificates representing original capital securities, letters of transmittal
and related documents and transmitting exchange capital securities to validly
tendering holders. Such exchange will be made promptly after the expiration
date. If for any reason whatsoever, acceptance for exchange or the exchange of
any original capital securities tendered pursuant to the exchange offer is
delayed, whether before or after the Trust's acceptance for exchange of
original capital securities, or the Trust extends the exchange offer or is
unable to accept for exchange or exchange original capital securities tendered
under the exchange offer, then, without prejudice to the Trust's rights set
forth in this prospectus, the exchange agent may, nevertheless, on behalf of
the Trust and subject to Rule 14e-1 (c) under the Exchange Act, retain tendered
original capital securities and such original capital securities may not be
withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "--Withdrawal Rights."
In accordance with the letter of transmittal, a holder of original capital
securities will warrant and agree that it has full power and authority to
tender, exchange, sell, assign and transfer the original capital securities,
that the Trust will acquire good, marketable and unencumbered title to the
tendered original capital securities, free and clear of all liens,
restrictions, charges and encumbrances, and the original capital securities
tendered for exchange are not subject to any adverse claims or proxies. Such
holder also will warrant and agree that it will, upon request, execute and
deliver any additional documents the Trust or the exchange agent deems
necessary or desirable to complete the exchange, sale, assignment, and transfer
of the original capital securities tendered under the exchange offer. Tendering
holders of original capital securities that use ATOP will, by so doing,
acknowledge that they are bound by the terms of the letter of transmittal.
Procedures for Tendering Original Capital Securities
Valid Tender. Except as set forth in this prospectus, in order for original
capital securities to be validly tendered under the exchange offer, a properly
completed and duly executed letter of transmittal (or facsimile
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thereof), with any required signature guarantees and any other required
documents, must be received by the exchange agent at its address set forth
under "--Exchange Agent," and, in addition, one of the following:
. tendered original capital securities must be received by the exchange
agent;
. such original capital securities must be tendered pursuant to the
procedures for book-entry transfer set forth in this prospectus and a
book-entry confirmation must be received by the exchange agent, in each
case on or prior to the expiration date; or
. the guaranteed delivery procedures set forth in this prospectus must be
complied with.
If less than all of the original capital securities are tendered, a
tendering holder should fill in the amount of original capital securities being
tendered in the appropriate box on the letter of transmittal or so indicate in
an agent's message in lieu of the letter of transmittal. The entire amount of
original capital securities delivered to the exchange agent will be deemed to
have been tendered unless otherwise indicated.
The method of delivery of the book-entry confirmations or certificates, the
letter of transmittal and all other required documents is at the option and
sole risk of the tendering holder, and delivery will be deemed made only when
actually received by the exchange agent. If delivery is by mail, we recommend
using registered mail, return receipt requested, properly insured, or an
overnight delivery service. In all cases, sufficient time should be allowed to
ensure timely delivery.
Book-Entry Transfer. For purposes of the exchange offer, the exchange agent
will establish an account with respect to the original capital securities at
DTC as soon as practicable. Any tendering financial institution that is a
participant in DTC's book-entry transfer facility system must make a book-entry
delivery of the original capital securities by causing DTC to transfer such
original capital securities into the exchange agent's account at DTC in
accordance with DTC's ATOP procedures for transfers. Such holder of original
capital securities using ATOP should transmit its acceptance to DTC on or prior
to the expiration date, or comply with the guaranteed delivery procedures set
forth below. DTC will verify such acceptance, execute a book-entry transfer of
the tendered original capital securities into the exchange agent's account at
DTC and then send to the exchange agent confirmation of such book-entry
transfer, including an agent's message confirming that DTC has received an
express acknowledgment from such holder that such holder has received and
agrees to be bound by the letter of transmittal and that we and the Trust may
enforce the letter of transmittal against such holder. We refer to this
procedure as a book-entry confirmation.
If you are a beneficial owner of original capital securities that are held
by or registered in the name of a broker, dealer, commercial bank, trust
company or other nominee or custodian, we urge you to contact such entity
promptly if you wish to participate in the exchange offer.
Certificates. If the tender is not made through ATOP, certificates
representing original capital securities, as well as the letter of transmittal,
or facsimile thereof, properly completed and duly executed, with any required
signature guarantees, and any other required documents required by the letter
of transmittal, must be received by the exchange agent at its address set forth
under "--Exchange Agent" on or prior to the expiration date in order for such
tender to be effective, or the guaranteed delivery procedure set forth herein
must be complied with.
If less than all of the original capital securities are tendered, a
tendering holder should fill in the amount of original capital securities being
tendered in the appropriate box on the letter of transmittal. The entire amount
of original capital securities delivered to the exchange agent will be deemed
to have been tendered unless otherwise indicated.
Signature Guarantees. Certificates for the original capital securities need
not be endorsed and signature guarantees on the letter of transmittal are
unnecessary unless:
. a certificate for the original capital securities is registered in a
name other than that of the person surrendering the certificate; or
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. the holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the letter of transmittal.
In the case of the above conditions, such certificates for original capital
securities must be duly endorsed or accompanied by a properly executed bond
power, with the endorsement or signature on the bond power and on the letter of
transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as an "eligible guarantor institution," including (as
such terms are defined therein): (1) a bank; (2) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (3) a
credit union; (4) a national securities exchange, registered securities
association or clearing agency; or (5) a savings association that is a
participant in a Securities Transfer Association, which institutions are
referred to in this prospectus as an eligible institution, unless surrendered
on behalf of such eligible institution. See Instruction 1 to the letter of
transmittal.
Delivery. Notwithstanding any other provision hereof, the delivery of
exchange capital securities in exchange for original capital securities
tendered and accepted for exchange pursuant to the exchange offer will in all
cases be made only after timely receipt by the exchange agent of:
. a book-entry confirmation with respect to such original capital
securities; or
. certificates representing original capital securities and a properly
completed and duly executed letter of transmittal, or facsimile thereof,
together with any required signature guarantees and any other documents
required by the letter of transmittal.
Accordingly, the delivery of exchange capital securities might not be made
to all tendering holders at the same time, and will depend upon when book-entry
confirmations with respect to original capital securities or certificates
representing original capital securities and other required documents are
received by the exchange agent.
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the exchange agent.
Guaranteed Delivery. If a holder desires to tender original capital
securities under the exchange offer and the certificates for such original
capital securities are not immediately available or time will not permit all
required documents to reach the exchange agent on or prior to the expiration
date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such original capital securities may nevertheless be tendered, provided
that all of the following guaranteed delivery procedures are complied with:
. such tenders are made by or through an eligible institution;
. properly completed and duly executed notice to the exchange agent
guaranteeing delivery to the exchange agent of either certificates
representing original capital securities or a book-entry confirmation in
compliance with the requirements set forth in this prospectus, the
notice of guaranteed delivery, substantially in the form accompanying
the letter of transmittal, is received by the exchange agent, as
provided herein, on or prior to expiration date; and
. a book-entry confirmation or the certificates representing all tendered
original capital securities, in proper form for transfer, together with
a properly completed and duly executed letter of transmittal, or
facsimile thereof, with any required signature guarantees and any other
documents required by the letter of transmittal, are, in any case,
received by the exchange agent within three Nasdaq National Market
trading days after the date of execution of such notice of guaranteed
delivery.
The notice of guaranteed delivery may be delivered by hand, or transmitted
by facsimile or mail to the exchange agent and must include a guarantee by an
eligible institution in the form set forth in such notice.
The Trust's acceptance for exchange of original capital securities tendered
in compliance with any of the procedures described above will constitute a
binding agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the exchange offer.
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Determination of Validity. We and the Trust will determine all questions as
to the form of documents, validity, eligibility, including time of receipt, and
acceptance for exchange of any tendered original capital securities, in our
sole discretion, and the determination shall be final and binding on all
parties. We and the Trust reserve the absolute right, in our sole and absolute
discretion, to reject any and all tenders determined by us not to be in proper
form or the acceptance of which, or exchange for, may, in the opinion of
counsel to us and the Trust, be unlawful. We and the Trust also reserve the
absolute right, subject to applicable law, to waive any of the conditions of
the exchange offer as set forth under "--Conditions to the Exchange Offer" or
any condition or irregularity in any tender of original capital securities of
any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The Trust's and our interpretation of the terms and conditions of the
exchange offer, including the letter of transmittal and the instructions
thereto, will be final and binding. No tender of original capital securities
will be deemed to have been validly made until all irregularities with respect
to such tender have been cured or waived. Neither us, the Trust, any affiliates
or assigns of us or the Trust, the exchange agent or any other person shall be
under any duty to give any notification of any irregularities in tenders or
incur any liability for failure to give any such notification.
If any letter of transmittal, endorsement, bond power, power of attorney, or
any other document required by the letter of transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by us and the
Trust, proper evidence satisfactory to us and the Trust, in our sole
discretion, of such person's authority to so act must be submitted.
Resales of Exchange Capital Securities
The Trust is making the exchange offer for the exchange capital securities
in reliance on the position of the staff of the Commission as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither we nor the Trust sought our own interpretive letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the exchange offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Commission, and subject to the two immediately following sentences, we and the
Trust believe that exchange capital securities issued under this exchange offer
in exchange for original capital securities may be offered for resale, resold
and otherwise transferred by a holder, other than a holder who is a broker-
dealer, without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such exchange
capital securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution, within the
meaning of the Securities Act, of such exchange capital securities. However,
any holder of original capital securities who is an affiliate of us or the
Trust or who intends to participate in the exchange offer for the purpose of
distributing exchange capital securities, or any broker-dealer who purchased
original capital securities from the Trust to resell pursuant to Rule 144A or
any other available exemption under the Securities Act:
. will not be able to rely on the interpretations of the staff of the
Division of Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters;
. will not be permitted or entitled to tender such original capital
securities in the exchange offer; and
. must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or other transfer of
such original capital securities or, if distributed, junior subordinated
debentures, unless such sale is made in reliance on an exemption from
such requirements.
In addition, as described below, if any broker-dealer holds original capital
securities acquired for its own account as a result of market-making or other
trading activities and exchanges such original capital securities for exchange
capital securities, then such broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of such
exchange capital securities.
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Each holder of original capital securities who wishes to exchange original
capital securities for exchange capital securities in the exchange offer will
be required to represent that:
. it is not an affiliate of us or the Trust;
. any exchange capital securities to be received by it are being acquired
in the ordinary course of its business;
. it has no arrangement or understanding with any person to participate in
a distribution, within the meaning of the Securities Act, of such
exchange capital securities; and
. if such holder is not a broker-dealer, such holder is not engaged in,
and does not intend to engage in, a distribution, within the meaning of
the Securities Act, of such exchange capital securities.
We and the Trust may require such holder, as a condition to such holder's
eligibility to participate in the exchange offer, to furnish to us and the
Trust (or an agent thereof) in writing information as to the number of
"beneficial owners," within the meaning of Rule 13d-3 under the Exchange Act,
on behalf of whom such holder holds the capital securities to be exchanged in
the exchange offer. Each broker-dealer that receives exchange capital
securities for its own account as a result of the exchange offer must
acknowledge that it acquired the original capital securities for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such exchange capital
securities. The letter of transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an underwriter within the meaning of the Securities Act. Based on the position
taken by the staff of the Commission in the interpretive letters referred to
above, we and the Trust believe that participating broker-dealers who acquired
original capital securities for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the exchange capital securities received upon
exchange of such original capital securities, other than original capital
securities which represent an unsold allotment from the initial sale of the
original capital securities, with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such exchange capital securities. Accordingly, this prospectus,
as it may be amended or supplemented from time to time, may be used by a
participating broker-dealer during the period referred to below in connection
with resales of exchange capital securities received in exchange for original
capital securities where such original capital securities were acquired by such
participating broker-dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
registration rights agreement, we and the Trust have agreed that this
prospectus, as it may be amended or supplemented from time to time, may be used
by a participating broker-dealer in connection with resales of such exchange
capital securities for a period ending 90 days after the expiration date,
subject to extension under certain limited circumstances described below, or,
if earlier, when all such exchange capital securities have been disposed of by
such participating broker-dealer. See "Plan of Distribution." However, a
participating broker-dealer who intends to use this prospectus in connection
with the resale of exchange capital securities received in exchange for
original capital securities pursuant to the exchange offer must notify us or
the Trust, or cause us or the Trust to be notified, on or prior to the
expiration date, that it is a participating broker-dealer. Such notice may be
given in the space provided for that purpose in the letter of transmittal or
may be delivered to the exchange agent at the address set forth herein under
"--Exchange Agent." Any participating broker-dealer who is an affiliate of us
or the Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each participating broker-dealer who surrenders original capital securities
under the exchange offer will be deemed to have agreed, by execution of the
letter of transmittal, that upon receipt of notice from us or the Trust of the
occurrence of any event or the discovery of:
. any fact which makes any statement contained or incorporated by
reference in this prospectus untrue in any material respect;
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. any fact which causes this prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by
reference herein, in light of the circumstances under which they were
made, not misleading; or
. the occurrence of certain other events specified in the registration
rights agreement,
such participating broker-dealer will suspend the sale of exchange capital
securities, or the exchange guarantee or the exchange debentures, as
applicable, pursuant to this prospectus until we or the Trust has amended or
supplemented this prospectus to correct such misstatement or omission and has
furnished copies of the amended and supplemented prospectus to such
participating broker-dealer, or we or the Trust has given notice that the sale
of the exchange capital securities, or the exchange guarantee or the exchange
debentures, as applicable, may be resumed, as the case may be.
If we or the Trust gives such notice to suspend the sale of the exchange
capital securities, or the exchange guarantee or the exchange debentures, as
applicable, the 90-day period referred to above shall be extended during which
participating broker-dealers are entitled to use this prospectus in connection
with the resale of exchange capital securities by the number of days during the
period from and including the date of the giving of such notice to and
including the date when participating broker-dealers shall have received copies
of the amended or supplemented prospectus necessary to permit resales of the
exchange capital securities or to and including the date on which we or the
Trust has given notice that the sale of exchange capital securities, or the
exchange guarantee or the exchange debentures, as applicable, may be resumed,
as the case may be.
Withdrawal Rights
Except as otherwise provided in this prospectus, tenders of original capital
securities may be withdrawn at any time on or prior to the expiration date.
In order for a withdrawal to be effective, a written or facsimile
transmission of such notice of withdrawal must be timely received by the
exchange agent at the address set forth under "--Exchange Agent" on or prior to
the expiration date. Any such notice of withdrawal must specify the name of the
person who tendered the original capital securities to be withdrawn, the
aggregate principal amount of original capital securities to be withdrawn, and,
if certificates for such original capital securities have been tendered, the
name of the registered holder of the original capital securities as set forth
on such certificates if different from that of the person who tendered such
original capital securities. If certificates representing original capital
securities have been delivered or otherwise identified to the exchange agent,
then prior to the physical release of such certificates, the tendering holder
must submit the serial numbers shown on the particular certificates to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by
an eligible institution, except in the case of original capital securities
tendered for the account of an eligible institution. If original capital
securities have been tendered in accordance with the procedures for book-entry
transfer set forth in "--Procedures for Tendering Original Capital Securities--
Book-Entry Transfer," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of original capital
securities. Withdrawals of tenders of original capital securities may not be
rescinded. Original capital securities properly withdrawn will not be deemed
validly tendered for purposes of the exchange offer, but may be retendered at
any subsequent time on or prior to the expiration date by following any of the
procedures described above under "--Procedures for Tendering Original Capital
Securities."
All questions as to the validity, form and eligibility, including time of
receipt, of such withdrawal notices will be determined by us and the Trust, in
our sole discretion, whose determination shall be final and binding on all
parties. Neither we, the Trust, any affiliates or assigns of us or the Trust,
the exchange agent nor any other person shall be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any original capital
securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
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Distributions on Exchange Capital Securities
Holders of exchange capital securities whose original capital securities are
accepted for exchange will be entitled to receive cumulative cash distributions
arising from the payment of interest on the exchange debentures at the annual
rate of 10.75% of the liquidation amount of $1,000 per exchange capital
security, accumulating from May 19, 2000, and will be payable semi-annually in
arrears on June 1st and December 1st of each year, beginning on December 1,
2000. The record dates will be the 15th day of the month immediately preceding
the month in which the relevant payment occurs. In the event the exchange offer
is consummated prior to the first record date, November 15, 2000, each exchange
capital security will pay cumulative distributions from and after May 19, 2000
and no distributions will be paid on any original capital security tendered for
an exchange capital security. However, in the event the exchange offer is
consummated after November 15, 2000, distributions will be paid on the original
capital securities accumulated from and after May 19, 2000 through December 1,
2000, and distributions will be paid on the exchange capital securities from
and after December 1, 2000. The amount of each distribution with respect to the
capital securities will include amounts accrued to, but excluding the date the
distribution is due. Because of the foregoing procedures regarding
distributions, the amount of the distributions received by holders whose
original capital securities are accepted for exchange will not be affected by
the exchange.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, or any extension
of the exchange offer, we and the Trust will not be required to accept for
exchange, or to exchange, any original capital securities for any exchange
capital securities, and, as described below, may terminate the exchange offer
(whether or not any original capital securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the exchange offer, if
any of the following conditions have occurred or exists or have not been
satisfied:
. there shall occur a change in the current interpretation by the staff of
the Commission which permits the exchange capital securities issued
pursuant to the exchange offer in exchange for original capital
securities to be offered for resale, resold and otherwise transferred by
holders, other than broker-dealers and any such holder which is an
affiliate of us or the Trust within the meaning of Rule 405 under the
Securities Act, without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such exchange
capital securities are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any
person to participate in the distribution of such exchange capital
securities;
. any law, statute, rule or regulation shall have been adopted or enacted
which, in the judgment of us or the Trust, would reasonably be expected
to impair its ability to proceed with the exchange offer;
. the Commission or any state securities authority shall have issued a
stop order suspending the effectiveness of the registration statement,
or proceedings shall have been initiated or, to the knowledge of us or
the Trust, threatened for that purpose, or any governmental approval has
not been obtained, which approval we or the Trust shall, in our sole
discretion, deem necessary for the consummation of the exchange offer as
contemplated hereby; or
. we determine in good faith that there is a reasonable likelihood that,
or a material uncertainty exists as to whether, consummation of the
exchange offer would result in an adverse tax consequence to the Trust
or us.
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Exchange Agent
Wilmington Trust Company, as property trustee of the Trust, has been
appointed as exchange agent for the exchange offer. Delivery of the letters of
transmittal and any other required documents, questions, requests for
assistance, and requests for additional copies of this prospectus or of the
letter of transmittal should be directed to the exchange agent as follows:
By Hand, Overnight Delivery, Registered or Certified Mail:
Wilmington Trust Company, as Exchange Agent
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration--
GBB Capital IV Exchange Offer
Confirm by Telephone: (302) 651-1000
Facsimile Transmission: (302) 651-8882
(Eligible Institutions Only)
Delivery to another address other than the above address or facsimile number
will not constitute a valid delivery.
Fees and Expenses
We have agreed to pay the exchange agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection with the exchange offering. We will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket
expenses incurred by them in forwarding copies of this prospectus and related
documents to the beneficial owners of original capital securities, and in
handling or tendering for their customers.
Holders who tender their original capital securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
exchange capital securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the original capital
securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of original capital securities in connection with the exchange
offer, then the amount of any such transfer taxes, whether imposed on the
registered holder or any other persons, will be payable by the tendering
holder. Neither we nor the Trust will make any payment to brokers, dealers or
other nominees soliciting acceptances of the exchange offer.
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DESCRIPTION OF EXCHANGE CAPITAL SECURITIES
Under the terms of the trust agreement, the trustees on behalf of the trust
will issue the exchange capital securities. The exchange capital securities
will represent beneficial interests in the trust and their holders will be
entitled to a preference over the common securities in certain circumstances
with respect to distributions and amounts payable on redemption of the trust
securities or liquidation of the Trust. See "--Subordination of Common
Securities." The trust agreement will be qualified under the Trust Indenture
Act of 1939, as amended, referred to as the Trust Indenture Act. This summary
describes the material provisions of the exchange capital securities. It is not
complete and is subject to, and qualified by, the trust agreement, including
the definitions used in the trust agreement, and the Trust Indenture Act. We
have incorporated the definitions used in the trust agreement in this
prospectus. You can receive a complete copy of the form of trust agreement by
requesting a copy from Greater Bay Bancorp.
General
The exchange capital securities will represent beneficial interests in the
Trust. As a holder of exchange capital securities, you will be entitled to a
preference over the common securities in certain circumstances with respect to
distributions and amounts payable on redemption of the exchange capital
securities or liquidation of the Trust, as described under "--Subordination of
Common Securities." The exchange capital securities have been rated "BBB-" by
Thomson Financial BankWatch. See "Rating."
The exchange capital securities will be limited to $41 million aggregate
liquidation amount at any one time outstanding. The exchange capital securities
will rank equal to, and payments will be made on a pro rata basis with, the
common securities, except as described under "Subordination of Common
Securities." The property trustee will have legal title to the exchange
debentures and will hold them in trust for the benefit of you and the other
holders of the exchange capital securities. Our exchange guarantee for the
benefit of the holders of the exchange capital securities will be a guarantee
on a subordinated basis with respect to the exchange capital securities, but
will not guarantee payment of distributions or amounts payable on redemption of
the exchange capital securities or liquidation of the Trust when the Trust does
not have funds legally available for such payments. You should read
"Description of Exchange Guarantee" for more information about our guarantee.
Distributions
Distributions on the exchange capital securities will be cumulative, and
will accumulate from the date that the original capital securities were first
issued. Distributions will be payable at the annual rate of 10.75% of the
liquidation amount, payable semi-annually in arrears on the distribution dates,
which are June 1st and December 1st of each year, commencing December 1, 2000,
to the holders of the exchange capital securities on the relevant record dates.
The record dates will be the 15th day of the month immediately preceding the
month in which the relevant distribution date occurs. In the event the exchange
offer is consummated prior to the first record date, November 15, 2000, each
exchange capital security will pay cumulative distributions from and after May
19, 2000 and no distributions will be paid on any original capital security
tendered to an exchange capital security. However, if the exchange offer is
consummated after November 15, 2000, distributions will be paid on the original
capital securities accumulated from and after May 19, 2000 through December 1,
2000 and distributions will be paid on the exchange capital securities from and
after December 1, 2000. The amount of distributions to be paid on each
distribution with respect to the capital securities will include amounts
accrued to, but excluding the date the distribution is due. Because of the
foregoing procedures regarding distributions, the amount of the distributions
received by holders whose original capital securities are accepted for exchange
will not be affected by the exchange. The amount of distributions payable for
any distribution period will be based on a 360-day year of twelve 30-day
months.
If any distribution date would otherwise fall on a day that is not a
business day, the required payment will be made on the next business day
without any additional payments for the delay. A business day means any
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day other than a Saturday or a Sunday, or a day on which banking institutions
in New York, New York, San Francisco, California or Wilmington, Delaware are
authorized or required by law or executive order to remain closed.
The Trust's revenue available for distribution to holders of the exchange
capital securities will be limited to our payments to the Trust under our
exchange debentures. For more information, please refer to "Description of
Exchange Debentures--General." If we do not make interest payments on the
exchange debentures, the property trustee will not have funds available to pay
distributions on the exchange capital securities. Our guarantee only covers the
payment of distributions if and to the extent that the Trust has funds legally
available to pay the distributions. You should read "--Description of Exchange
Guarantee" for more information about the extent of our exchange guarantee.
Option to Defer Interest Payments
As long as no event of default under the exchange debentures exists, we have
the right under the indenture to elect to defer the payment of interest on the
exchange debentures, at any time or from time to time, for no more than 10
consecutive semi-annual periods, provided that no deferral period will end on a
date other than an interest payment date, or extend beyond June 1, 2030, the
stated maturity date of the exchange debentures. If we defer payments, the
Trust will defer semi-annual distributions on the exchange capital securities
during the deferral period. During any deferral period, distributions will
continue to accumulate on the exchange capital securities and on any
accumulated and unpaid distributions, compounded semi-annually from the
relevant distribution date at the applicable distribution rate, which will be
equal to the applicable interest rate on the exchange debentures. The term
distributions includes any accumulated additional distributions.
Before the end of any deferral period, we may extend the deferral period, as
long as the extension does not cause the deferral period to exceed 10
consecutive semi-annual periods or to end on a date other than an interest
payment date or extend beyond June 1, 2030. At the end of any deferral period
and upon the payment of all amounts then due on any interest payment date, we
may elect to begin a new deferral period, subject to the above requirements. No
interest shall be due and payable during a deferral period until the deferral
period ends. We must give the property trustee, the administrative trustees and
the debenture trustee notice of our election to defer interest payments or to
extend a deferral period at least five business days before the earlier of:
. the date the distributions on the exchange capital securities would have
been payable, except for the election to begin a deferral period; and
. the date the property trustee is required to give notice to any
securities exchange or automated quotation system or to holders of the
exchange capital securities of the record date or the date such
distributions are payable, but in any event at least five business days
before such record date.
There is no limitation on the number of times that we may elect to begin a
deferral period. Please refer to "Description of Exchange Debentures--Option to
Extend Interest Payment Date" and "Certain Federal Income Tax Consequences--
Interest Income and Original Issue Discount."
During any deferral period, we may not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of our
capital stock;
. make any payment of principal of, or interest or premium, if any, on, or
repay, repurchase or redeem any debt securities (including any other
debentures) that rank equal or junior to the exchange debentures; or
. make any guarantee payments with respect to any guarantee of the debt
securities of any of our subsidiaries (including other guarantees) if
such guarantee ranks equal or junior to the exchange debentures.
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Notwithstanding the foregoing, during a deferral period the following is
permitted:
. a payment of dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, our common
stock;
. a declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto;
. a payment under the guarantee;
. a reclassification of our capital stock or the exchange or conversion of
one class or series of our capital stock for another class or series of
our capital stock;
. the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged; and
. the purchase of common stock related to the issuance of common stock or
rights under any of our benefit plans for our directors, officers or
employees or any of our dividend reinvestment plans.
We do not currently intend to exercise our right to defer payments of
interest on the exchange debentures. Our obligations under the exchange
guarantee to make payment of distributions is limited to the extent that the
Trust has funds legally available to pay distributions. You should read
"Description of Exchange Guarantee" for more information about the extent of
our exchange guarantee.
Redemption
Upon repayment at maturity on June 1, 2030 or prepayment, in whole or in
part prior to June 1, 2030, of the exchange debentures (other than following
the distribution of the exchange debentures to you as a holder of the exchange
capital securities and us, as the holder of the common securities), the
property trustee will apply the proceeds from the repayment or prepayment of
the exchange debentures (as long as the property trustee has received written
notice no later than 45 days before the repayment) to redeem at the applicable
redemption price exchange capital securities and common securities having an
aggregate liquidation amount equal to the principal amount of the exchange
debentures paid to the Trust. The Trust will give notice of any redemption of
exchange capital securities between 30 to 60 days prior to the redemption date.
If we prepay less than all of the exchange debentures on the stated maturity
date or a redemption date, then the property trustee will allocate the proceeds
of the prepayment on a pro rata basis among the exchange capital securities and
the common securities. If a court of competent jurisdiction enters an order to
dissolve the Trust, the exchange debentures will be subject to optional
prepayment in whole, but not in part, on or after June 1, 2010.
We will have the right to prepay the exchange debentures:
. in whole or in part, on or after June 1, 2010; and
. in whole but not in part, prior to June 1, 2010, if there are changes in
the bank regulatory, investment company or tax laws that would adversely
affect the status of the Trust, the exchange capital securities or the
exchange debentures.
We may have to obtain regulatory approval, including the approval of the
Federal Reserve Board, before we redeem any exchange debentures. Please refer
to "Description of Exchange Debentures--Optional Prepayment" and "--Special
Event Prepayment" for information on prepayment of the exchange debentures.
The redemption prices applicable to the exchange capital securities will
correspond to the maturity and prepayment prices applicable to the exchange
debentures.
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Liquidation of the Trust and Distribution of Exchange Debentures
We will have the right at any time to dissolve the Trust and, after
satisfying the liabilities owed to the Trust's creditors, as required by
applicable law, we will have the right to distribute the exchange debentures to
the holders of the exchange capital securities and to us as holder of the
common securities. Our right to dissolve the Trust is subject to our receiving:
. an opinion of counsel to the effect that if we distribute the exchange
debentures, the holders of the exchange capital securities will not
experience a taxable event; and
. all required regulatory approvals.
The Trust will automatically dissolve if:
. certain bankruptcy events occur, or we dissolve or liquidate;
. we distribute exchange debentures having a principal amount equal to the
liquidation amount of the exchange capital securities and the common
securities to holders of such securities and we, as sponsor, have given
written directions to the property trustee to dissolve the Trust (which
direction is at our option and, except as described above, wholly within
our discretion, as sponsor);
. the Trust redeems all of the exchange capital securities and common
securities in accordance with their terms;
. the exchange debentures are redeemed or repaid or there are no exchange
debentures outstanding;
. the Trust's term expires; or
. a court of competent jurisdiction enters an order for the dissolution of
the Trust.
If the Trust is dissolved for any of the above reasons, except for a
redemption of all exchange capital securities and the common securities, the
administrative trustees will liquidate the Trust as quickly as they determine
to be possible by distributing to holders of the exchange capital securities
and the common securities, after satisfying the liabilities owed to the Trust's
creditors, as provided by applicable law, exchange debentures having a
principal amount equal to the liquidation amount of the exchange capital
securities and the common securities, unless the property trustee determines
that this distribution is not practicable. If the property trustee determines
that this distribution is not practicable, the holders of the exchange capital
securities will be entitled to receive an amount equal to the aggregate of the
liquidation amount, plus accumulated and unpaid distributions on the exchange
capital securities to the date of payment (such amount being the "liquidation
distribution") out of the assets of the Trust legally available for
distribution to holders, after satisfying the liabilities owed to the Trust's
creditors as provided by applicable law. If the liquidation distribution can be
paid only in part because the Trust has insufficient assets legally available
to pay the full amount of the liquidation distribution, then the amounts
payable shall be paid pro rata on the capital securities and the common
securities, except that if an event of default under the exchange debentures
exists, the capital securities will have a priority over the common securities.
For more information, please refer to "--Subordination of Common Securities."
After the liquidation date is fixed for any distribution of exchange
debentures to holders of the exchange capital securities:
. the exchange capital securities will no longer be deemed to be
outstanding;
. DTC or its nominee will receive in respect of each registered global
certificate representing exchange capital securities a registered global
certificate representing the exchange debentures to be delivered upon
this distribution; and
. any certificates representing exchange capital securities not held by
DTC or its nominee will be deemed to represent exchange debentures
having a principal amount equal to the liquidation amount
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of those exchange capital securities, and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid distributions
on those exchange capital securities until such certificates are
presented to the administrative trustees or their agent for
cancellation, in which case we will issue to those holders, and the
debenture trustee will authenticate, a certificate representing the
exchange debentures.
We cannot assure you of the market prices for the exchange capital
securities or the exchange debentures that may be distributed to you in
exchange for the exchange capital securities if a dissolution and liquidation
of the Trust were to occur. Accordingly, the exchange capital securities that
you purchase, or the exchange debentures that you may receive upon a
dissolution and liquidation of the Trust, may trade at a discount to the price
that you paid to purchase the exchange capital securities.
If we elect not to prepay the exchange debentures prior to maturity and
either elect not to or we are unable to liquidate the Trust and distribute the
exchange debentures to holders of the exchange capital securities, the
exchange capital securities will remain outstanding until the repayment of the
exchange debentures on June 1, 2030.
Redemption Procedures
If we pay the exchange debentures at maturity or earlier prepayment, the
Trust will redeem exchange capital securities at the applicable redemption
price with the proceeds that it receives from our payment or prepayment of the
exchange debentures. Any redemption of exchange capital securities will be
made and the applicable redemption price will be payable on the redemption
date only to the extent that the Trust has funds legally available to pay the
applicable redemption price. For more information, you should refer to "--
Subordination of Common Securities."
If the Trust gives a notice of redemption for the exchange capital
securities, then, by 12:00 noon, New York City time, on the redemption date,
to the extent funds legally are available, with respect to:
. the exchange capital securities held by DTC or its nominees, the
property trustee will deposit, or cause the paying agent to deposit,
irrevocably with DTC funds sufficient to pay the applicable redemption
price. For more information, you should refer to "--Form, Denomination,
Book-Entry Procedures and Transfer;" and
. the exchange capital securities held in certificated form, the property
trustee will irrevocably deposit with the paying agent funds sufficient
to pay the applicable redemption price and will give the paying agent
irrevocable instructions and authority to pay the applicable redemption
price to the holders upon surrender of their certificates evidencing the
exchange capital securities. For more information, you should refer to
"--Payment and Paying Agency."
The paying agent will initially be the property trustee and any co-
paying agent chosen by the property trustee and acceptable to the
administrative trustees and us.
Notwithstanding the foregoing, distributions payable on or before the
redemption date will be payable to the holders of the exchange capital
securities on the relevant record dates for the related distribution dates. If
the Trust gives a notice of redemption and funds are deposited as required,
then upon the date of the deposit, all rights of the holders of the exchange
capital securities called for redemption will cease, except the right of the
holders of the exchange capital securities to receive the applicable
redemption price, without interest, and the exchange capital securities called
to be redeemed will cease to be outstanding.
If any redemption date for the exchange capital securities is not a
business day, then the applicable redemption price, without interest or any
other payment in respect of the delay, will be paid on the next business day,
except that, if the next business day falls in the next calendar year, the
payment shall be made on the last business day of the current calendar year.
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If payment of the applicable redemption price is improperly withheld or
refused and not paid either by the Trust or by us pursuant to the guarantee:
. distributions on the exchange capital securities will continue to
accumulate from the redemption date originally established by the Trust
to the date such applicable redemption price is actually paid; and
. the actual payment date will be the redemption date for purposes of
calculating the applicable redemption price.
Notice of any redemption will be mailed between 30 and 60 days before the
redemption date to each holder of exchange capital securities at its registered
address. Unless we default in payment of the applicable redemption price on, or
in the repayment of, the exchange debentures, on and after the redemption date,
distributions will cease to accrue on the exchange capital securities called
for redemption.
Subject to applicable law, including, without limitation, federal securities
laws, we or our subsidiaries may at any time, and from time to time, purchase
outstanding exchange capital securities in the open market or by private
agreement.
Subordination of Common Securities
Payment of distributions on, the redemption price of, and the liquidation
distribution for, the exchange capital securities and the common securities, as
applicable, will generally be made on a pro rata basis. However, if an event of
default under the exchange debentures exists on any distribution, redemption or
liquidation date, no payment of any distribution on, or applicable redemption
price of, or liquidation distribution for, any of the common securities, and no
other payment on account of the redemption, liquidation or other acquisition of
the common securities, will be made unless payment in full in cash of all
accumulated and unpaid distributions on all of the outstanding exchange capital
securities for all distribution periods terminating on or before the
distribution, redemption or liquidation date, or payment of the applicable
redemption price or liquidation distribution is made in full. All funds
available to the property trustee will first be applied to the payment in full
in cash of all distributions on, or redemption price of, or liquidation
distribution for, the exchange capital securities then due and payable.
In the case of any event of default under the trust agreement, we, as holder
of all of the common securities, will be deemed to have waived any right to act
with respect to the event of default until the effect of the event of default
has been cured or waived. Until any event of default has been cured or waived,
the property trustee will act solely on behalf of the holders of the exchange
capital securities and not on our behalf, and only the holders of the exchange
capital securities will have the right to direct the property trustee to act on
their behalf.
Events of Default; Notice
An event of default under the exchange debentures constitutes an event of
default under the trust agreement. See "Description of Exchange Debentures--
Events of Default Under the Exchange Debentures."
The trust agreement provides that within ten (10) business days after the
property trustee has actual knowledge that any event of default has occurred,
the property trustee will give notice of the event of default to the holders of
the exchange capital securities, the administrative trustees and, to us, as
sponsor, unless the event of default has been cured or waived. We, as sponsor,
and the administrative trustees are required to file annually with the property
trustee a certificate as to whether we and the administrative trustees have
complied with the applicable conditions and covenants of the trust agreement.
If an event of default under the exchange debentures exists, the exchange
capital securities will have a preference over the common securities as
described under "--Liquidation of the Trust and Distribution of Exchange
Debentures" and "--Subordination of Common Securities." An event of default
does not entitle the holders of exchange capital securities to require the
redemption of the exchange capital securities.
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Removal of Trustees
Unless an event of default under the exchange debentures exists, we may
remove the property trustee and the Delaware trustee at any time. If an event
of default under the exchange debentures exists, the property trustee and the
Delaware trustee may be removed only by the holders of a majority in
liquidation amount of the outstanding exchange capital securities. In no event
will the holders of the exchange capital securities have the right to vote to
appoint, remove or replace the administrative trustees, because these voting
rights are vested exclusively in us as the holder of all of the common
securities. No resignation or removal of the property trustee or the Delaware
trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the trust
agreement.
Merger or Consolidation of Trustees
If the property trustee, the Delaware trustee or any administrative trustee
that is not a natural person is merged, converted or consolidated into another
entity, or the property trustee or the Delaware trustee is a party to a merger,
conversion or consolidation which results in a new entity, or an entity
succeeds to all or substantially all of the corporate trust business of the
property trustee or the Delaware trustee, the new entity shall be the successor
of the respective trustee under the trust agreement, provided that the entity
is otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease all or substantially all of its properties and
assets to any corporation or other entity, except as described below or as
otherwise described under "--Liquidation of the Trust and Distribution of
Exchange Debentures." The Trust may, at our request, as sponsor, and with the
consent of the administrative trustees but without the consent of the holders
of the exchange capital securities, merge with or into, consolidate, amalgamate
or be replaced by or convey, transfer or lease all or substantially all of its
properties and assets to a trust organized as such under the laws of any state;
provided, that:
. the successor either:
. expressly assumes all of the obligations of the Trust with respect
to the exchange capital securities; or
. substitutes securities for the exchange capital securities that have
substantially the same terms as the exchange capital securities so
long as the substitute securities rank equal to the exchange capital
securities in priority with respect to distributions and payments
upon liquidation, redemption and otherwise;
. we appoint a trustee of the successor possessing the same powers and
duties as the property trustee with respect to the exchange debentures;
. the substitute securities are listed, or any substitute securities will
be listed upon notification of issuance, on any national securities
exchange or other organization on which the exchange capital securities
are then listed or quoted, if any;
. if the exchange capital securities, substitute securities or exchange
debentures are rated by any nationally recognized statistical rating
organization prior to such transaction, the transaction does not cause
any of those securities to be downgraded by any such organization;
. the transaction does not adversely affect the rights, preferences and
privileges of the holders of the exchange capital securities (including
any successor securities) in any material respect;
. the successor has a purpose substantially identical to that of the
Trust; and
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. prior to the transaction, we received an opinion from independent
counsel to the Trust experienced in such matters to the effect that:
. the transaction does not adversely affect the rights, preferences
and privileges of the holders of the exchange capital securities
(including any successor securities) in any material respect (other
than any dilution of such holders' interests in the new entity);
. following the transaction, neither the Trust nor the successor will
be required to register as an investment company under the
Investment Company Act;
. the Trust continues to be, and any successor will be, classified as
a grantor trust for federal income tax purposes; and
. we, or any permitted successor or assignee, own all of the common
securities of the successor and guarantee the obligations of the
successor under the substitute securities at least to the extent
provided by our guarantee and the common securities guarantee.
Notwithstanding the foregoing, the Trust may not, except with the consent of
holders of 100% in liquidation amount of the exchange capital securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease all or substantially all of its properties and assets to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if the transaction would cause the Trust or the
successor not to be classified as a grantor trust for federal income tax
purposes.
Voting Rights; Amendment of the Trust Agreement
Except as provided under "--Mergers, Consolidations, Amalgamations or
Replacements of the Trust" and "Description of Exchange Guarantee--Amendments
and Assignment" and as otherwise required by law and the trust agreement, the
holders of the exchange capital securities will have no voting rights.
We, together with the property trustee and the administrative trustees, may
amend the trust agreement from time to time, without the consent of the holders
of the exchange capital securities, to:
. cure any ambiguity, correct or supplement any provisions in the trust
agreement that may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
the trust agreement, which are not inconsistent with the other
provisions of the trust agreement;
. modify, eliminate or add to any provisions of the trust agreement as is
necessary to ensure that at all times that any exchange capital
securities are outstanding, the Trust will be classified as a grantor
trust for federal income tax purposes, or to ensure that the Trust will
not be required to register as an investment company under the
Investment Company Act; or
. modify, eliminate or add any provisions of the trust agreement as is
necessary to enable us or the Trust to conduct an exchange offer in the
manner contemplated by the registration rights agreement;
provided, however, that the amendment would not adversely affect in any
material respect the interests of the holders of the exchange capital
securities. Any amendments of the trust agreement pursuant to the foregoing
shall become effective when notice of the amendment is given to the holders of
the exchange capital securities.
We, together with the trustees, may amend the trust agreement:
. with the consent of holders of a majority in liquidation amount of the
outstanding exchange capital securities; and
. upon receipt by the trustees of an opinion of counsel experienced in
such matters to the effect that the amendment or the exercise of any
power granted to the trustees in accordance with the amendment will not
affect the Trust's status as being a grantor trust for federal income
tax purposes or the Trust's exemption from status as an investment
company under the Investment Company Act.
provided, that, without the consent of each holder of exchange capital
securities and common securities, no amendment may change the amount or timing
of any distribution on the exchange capital securities and
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common securities or otherwise adversely affect the amount of any distribution
required to be made in respect of the exchange capital securities and common
securities as of a specified date, change any of the prepayment provisions, or
restrict the right of a holder of exchange capital securities and common
securities to sue for the enforcement of any payment on or after the specified
date.
So long as the property trustee holds any exchange debentures, the trustees
may not:
. direct the time, method and place of conducting any proceeding for any
remedy available to the debenture trustee, or execute any trust or power
conferred on the debenture trustee with respect to the exchange
debentures;
. waive certain past defaults under the indenture;
. exercise any right to rescind or annul a declaration accelerating the
maturity of the principal of the exchange debentures; or
. consent to any amendment, modification or termination of the indenture
or the exchange debentures, where such consent shall be required,
without, in each case, obtaining the prior consent of the holders of a majority
in liquidation amount of all outstanding capital securities; provided, however,
that where a consent under the indenture would require the consent of each
holder of exchange debentures affected by the amendment, modification or
termination, the property trustee will not give its consent without the prior
approval of each holder of the exchange capital securities.
The trustees shall not revoke any action previously authorized or approved
by a vote of the holders of the exchange capital securities, except by
subsequent vote of such holders. The property trustee shall notify each holder
of exchange capital securities of any notice of default with respect to the
exchange debentures. In addition to obtaining the approvals of the holders of
the exchange capital securities, prior to taking any of the foregoing actions,
the trustees shall obtain an opinion of counsel experienced in such matters to
the effect that the Trust will continue to be classified as a grantor trust for
federal income tax purposes after taking the action into account.
Any required approval of holders of exchange capital securities may be given
at a meeting of the holders convened for the purpose of approving the matter or
pursuant to written consent. The property trustee will cause a notice to be
given of any meeting at which holders of exchange capital securities are
entitled to vote or of any matter upon which action by written consent of such
holders is to be taken, to be given to each holder of exchange capital
securities in accordance with the trust agreement.
No vote or consent of the holders of exchange capital securities will be
required for the Trust to redeem and cancel the exchange capital securities in
accordance with the trust agreement.
Notwithstanding that holders of the exchange capital securities are entitled
to vote or consent under any of the circumstances described above, any of the
exchange capital securities that are owned by us, the Trust, the trustees or
any affiliates thereof shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
Form, Denomination, Book-Entry Procedures and Transfer
The exchange capital securities initially will be represented by one or more
exchange capital securities in registered, global form (collectively, the
global capital securities). The global capital securities will be deposited
upon issuance with the property trustee as custodian for DTC, in Wilmington,
Delaware, and registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant in DTC as described in
this prospectus.
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In the event that exchange capital securities are issued in certificated
form, the exchange capital securities will be in blocks having a liquidation
amount of not less than $100,000 (100 exchange capital securities) and may be
transferred or exchanged only in such blocks in the manner described in this
prospectus.
Except as set forth in this prospectus, the global exchange capital
securities may be transferred, in whole and not in part, only to another
nominee of DTC or to a successor of DTC or its nominee and only in amounts that
would not cause a holder to own less than 100 exchange capital securities.
Beneficial interests in the global exchange capital securities may not be
exchanged for exchange capital securities in certificated form, except in the
limited circumstances described in this prospectus. See "--Exchange of Book-
Entry Capital Securities for Certificated Capital Securities."
Depositary Procedures
DTC has advised the Trust and us that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was created to hold securities for its
participating organizations (collectively, "participants") and to facilitate
the clearance and settlement of transactions in those securities between
participants through electronic book-entry changes in accounts of its
participants, to eliminate the need for physical movement of certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Indirect access to DTC's
system is also available to banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly (collectively, indirect participants). Persons who are
not participants may beneficially own securities held by or on behalf of DTC
only through participants or indirect participants. The ownership interest and
transfer of ownership interest of each actual purchaser of each security held
by or on behalf of DTC are recorded on the records of participants and indirect
participants.
DTC also has advised the Trust and us that, pursuant to procedures
established by it, (1) upon deposit of the global capital securities, DTC will
credit the accounts of participants designated by the initial purchasers with
the designated liquidation amount of the global capital securities and (2)
ownership of beneficial interests in the global capital securities will be
shown on, and the transfer of ownership of the global capital securities, will
be effected only through, records maintained by DTC (with respect to
participants) or by participants and indirect participants (with respect to
other owners of beneficial interests in the global capital securities).
You may hold your interests in the global capital security directly through
DTC if you are a participant, or indirectly through organizations that are
participants. All interests in a global capital security will be subject to the
procedures and requirements of DTC. The laws of some states require that
certain persons take physical delivery in certificated form of securities that
they own. Consequently, the ability to transfer beneficial interests in a
global capital security to those persons will be limited to that extent.
Because DTC can act only on behalf of participants, which in turn act on behalf
of indirect participants and certain banks, the ability of a person having
beneficial interests in a global capital security to pledge its interests to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of its interests, may be affected by the lack of a
physical certificate evidencing its interests. For certain other restrictions
on the transferability of the exchange capital securities, see "--Exchange of
Book-Entry Capital Securities for Certificated Capital Securities."
Except as described below, owners of beneficial interests in the global
capital securities will not have exchange capital securities registered in
their name, will not receive physical delivery of exchange capital securities
in certificated form and will not be considered the registered owners or
holders thereof under the trust agreement for any purpose.
Payments on the global capital security registered in the name of DTC, or
its nominee, will be payable by the property trustee to DTC in its capacity as
the holder under the trust agreement. Under the terms of the trust
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agreement, the property trustee will treat the persons in whose names the
exchange capital securities, including the global capital securities, are
registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Neither the property trustee
nor any agent thereof has or will have any responsibility or liability for:
. any aspect of DTC's records or any participant's or indirect
participant's records relating to, or payments made on account of,
beneficial ownership interests in the global capital securities, or for
maintaining, supervising or reviewing any of DTC's records or any
participant's or indirect participant's records relating to the
beneficial ownership interests in the global capital securities; or
. any other matter relating to the actions and practices of DTC or any of
its participants or indirect participants.
DTC has advised the Trust and us that its current practice, upon receipt of
any payment on the exchange capital securities, is to credit the accounts of
the relevant participants with the payment on the payment date, in amounts
proportionate to their respective holdings in liquidation amount of the
exchange capital securities as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on the payment date. Payments by
participants and indirect participants to the beneficial owners of exchange
capital securities will be governed by standing instructions and customary
practices and will be the responsibility of participants or indirect
participants and will not be the responsibility of DTC, the property trustee,
the Trust or us. None of us, the Trust or the property trustee will be liable
for any delay by DTC or any of its participants or indirect participants in
identifying the beneficial owners of the exchange capital securities, and we,
the Trust and the property trustee may conclusively rely on, and will be
protected in relying on, instructions from DTC or its nominee for all
purposes.
Any secondary market trading activity in interests in the global capital
securities will settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its participants. Transfers between
participants in DTC will be effected in accordance with DTC's procedures, and
will settle in same-day funds.
DTC has advised the Trust and us that it will take any action permitted to
be taken by a holder of exchange capital securities (including, without
limitation, presenting the exchange capital securities for exchange as
described below) only at the direction of one or more participants who have an
interest in DTC's global capital securities in respect of the portion of the
liquidation amount of the exchange capital securities as to which the
participant or participants has or have given direction. However, if an event
of default exists under the trust agreement, DTC reserves the right to
exchange the global capital securities for legended exchange capital
securities in certificated form and to distribute the certificated exchange
capital securities to its participants.
We believe that the information in this section concerning DTC and its
book-entry system has been obtained from reliable sources, but we do not take
responsibility for the accuracy of this information.
Although DTC has agreed to the procedures described in this section to
facilitate transfers of interests in the global capital securities among
participants in DTC, DTC is not obligated to perform or to continue to perform
these procedures, and these procedures may be discontinued at any time. None
of us, the Trust, or the property trustee will have any responsibility or
liability for any aspect of the performance by DTC or its participants or
indirect participants of any of their respective obligations under the rules
and procedures governing their operations or for maintaining, supervising or
reviewing any records relating to the global capital securities that are
maintained by DTC or any of its participants or indirect participants.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A global capital security is exchangeable for exchange capital securities
in registered certificated form if:
. DTC notifies the Trust that it is unwilling or unable to continue as
depository for the global capital security and the Trust fails to
appoint a successor depositary within 90 days of receipt of DTC's
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notice, or DTC has ceased to be a clearing agency registered under the
Exchange Act and the Trust fails to appoint a successor depositary
within 90 days of becoming aware of this condition;
. the Trust, in its sole discretion, elects to cause the exchange capital
securities to be issued in certificated form; or
. an event of default, or any event which after notice or lapse of time or
both would be an event of default, exists under the trust agreement.
In addition, beneficial interests in a global capital security will be
exchanged by or on behalf of DTC for certificated exchange capital securities
upon request by DTC, but only upon at least 20 days' prior written notice
given to the property trustee in accordance with DTC's customary procedures.
In all cases, certificated exchange capital securities delivered in exchange
for any global capital security will be registered in the names, and issued in
any approved denominations, requested by or on behalf of DTC (in accordance
with its customary procedures).
Payment and Paying Agency
The Trust will make payments on any global capital security to DTC, which
will credit the relevant accounts at DTC on the applicable distribution dates.
The Trust will make payments on the exchange capital securities that are not
held by DTC by mailing a check to the address of the holder entitled to the
payment as the holder's address appears on the register. The paying agent will
initially be the property trustee and any co-paying agent chosen by the
property trustee and acceptable to the administrative trustees and us. The
paying agent will be permitted to resign as paying agent upon 30 days' notice
to the property trustee, the administrative trustees and us. In the event that
the property trustee is no longer the paying agent, the administrative
trustees will appoint a successor (which must be a bank or trust company
acceptable to the administrative trustees and us) to act as paying agent.
Restrictions on Transfer
The exchange capital securities will be issued, and may be transferred,
only in blocks having a liquidation amount of not less than $100,000 (100
exchange capital securities) and multiples of $1,000 in excess thereof. Any
attempted sale, transfer or other disposition of exchange capital securities
in a block having a liquidation amount of less than $100,000 will be deemed to
be void and of no legal effect whatsoever. Any such purported transferee will
be deemed not to be the holder of such exchange capital securities for any
purpose, including but not limited to the receipt of distributions on such
exchange capital securities, and such purported transferee will be deemed to
have no interest whatsoever in such exchange capital securities.
Registrar and Transfer Agent
The property trustee will act as registrar and transfer agent for the
exchange capital securities.
The Trust will register transfers of the exchange capital securities
without charge, except for any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The Trust will not be
required to have the transfer of the exchange capital securities registered
after they have been called for redemption.
Miscellaneous
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the Trust so that:
. the Trust will not be deemed to be an investment company required to be
registered under the Investment Company Act;
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. the Trust will be classified as a grantor trust for federal income tax
purposes; and
. the exchange debentures will be treated as our indebtedness for federal
income tax purposes.
We, together with the administrative trustees, are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of the
Trust or the trust agreement, that we and the administrative trustees determine
in our discretion is necessary or desirable, as long as it does not materially
adversely affect the interests of the holders of the exchange capital
securities.
The trust agreement provides that holders of the exchange capital securities
have no preemptive or similar rights to subscribe for any additional exchange
capital securities and the issuance of exchange capital securities is not
subject to preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
Governing Law
The trust agreement and exchange capital securities will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to conflict of law principles.
Information Concerning the Property Trustee
Except if an event of default exists under the trust agreement, the property
trustee will undertake to perform only the duties specifically set forth in the
trust agreement. While such an event of default exists, the property trustee
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the property trustee is not obligated to exercise any of the powers
vested in it by the trust agreement at the request of any holder of trust
securities, unless it is offered reasonable indemnity against the costs,
expenses and liabilities that it might incur. If no event of default exists and
the property trustee is required to decide between alternative causes of action
or to construe ambiguous provisions in the trust agreement or is unsure of the
application of any provision of the trust agreement, and the matter is not one
on which holders of the exchange capital securities or the common securities
are entitled under the trust agreement to vote, then the property trustee shall
take such action as directed by us and, if not directed, shall take such action
as it deems advisable and in the best interests of the holders of the capital
securities and will have no liability, except for its own bad faith, negligence
or willful misconduct.
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DESCRIPTION OF EXCHANGE DEBENTURES
This summary describes the material provisions of the exchange debentures.
It is not complete and is subject to, and qualified in its entirety by, the
indenture. However, by its terms, the indenture will incorporate by reference
certain provisions of the Trust Indenture Act and, upon consummation of the
exchange offer or effectiveness of the shelf registration statement, the
indenture will be governed by and subject to the Trust Indenture Act. We have
incorporated the definitions used in the indenture in this prospectus. You can
obtain a copy of the indenture by requesting it from Greater Bay Bancorp.
Wilmington Trust Company will act as debenture trustee under the indenture.
General
The Trust invested the proceeds from the sale of the capital securities and
the common securities in the original junior subordinated debentures issued by
Greater Bay Bancorp. The original junior subordinated debentures bear interest
at the annual rate of 10.75% of the principal amount of the original junior
subordinated debentures, payable semi-annually in arrears on interest payment
dates of June 1st and December 1st of each year to the person in whose name
each original junior subordinated debenture is registered at the close of
business on the relevant record date. The exchange debentures will have terms
identical in all material respects to the original junior subordinated
debentures, except that the exchange debentures will not contain terms with
respect to transfer restrictions under the Securities Act and will not provide
for liquidated damages. The first interest payment date for the exchange
debentures will be December 1, 2000. The period beginning on and including the
date the exchange debentures are first issued and ending on but excluding
December 1, 2000 and each period beginning on and including an interest payment
date and ending on but excluding the next interest payment date is an interest
period.
We anticipate that, until the liquidation, if any, of the Trust, each
exchange debenture will be held by the property trustee in trust for the
benefit of the holders of the exchange capital securities. The amount of
interest payable for any interest period will be computed on the basis of a
360-day year of twelve 30-day months. In the event that any interest payment
date would otherwise fall on a day that is not a business day, the required
payment will be made on the next business day (without any interest or other
payment due to the delay).
Accrued interest that is not paid on the applicable interest payment date
will bear additional interest (to the extent permitted by law) at the rate of
10.75% per year, compounded semi-annually, from the last interest payment date
for which interest was paid. The term "interest" as used in this prospectus
includes semi-annual interest payments and interest on semi-annual interest
payments not paid on the applicable interest payment date.
Notwithstanding anything to the contrary above, if the stated maturity date
or date of earlier redemption falls on a day that is not a business day, the
payment of principal, premium, if any, and interest will be paid on the next
business day, with the same force and effect as if made on such date, and no
interest on such payments will accrue from and after such date.
The exchange debentures will be issued as a series of junior subordinated
deferrable interest debentures under the indenture.
The exchange debentures will mature on June 1, 2030, unless redeemed prior
thereto in accordance with the terms discussed below.
The exchange debentures will rank equal to all of our other junior
subordinated debentures (including any other debentures) which have been or may
be issued to other trusts established by us, in each case similar to the Trust,
and will be unsecured and rank subordinate and junior to all of our senior
indebtedness to the extent and in the manner set forth in the indenture. See
"--Subordination."
We are a bank holding company regulated by the Federal Reserve Board and our
subsidiaries own almost all of our operating assets. We are a legal entity
separate and distinct from our subsidiaries. Holders of
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exchange debentures should look only to Greater Bay Bancorp for payments on the
exchange debentures. Our principal sources of income are dividends, interest
and fees from the Banks. We rely primarily on dividends from the Banks to meet
our obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. Dividend payments from the Banks are
subject to regulatory limitations, generally based on current and retained
earnings, imposed by the various regulatory agencies with authority over the
respective Banks. Under the Federal Deposit Insurance Act, insured depositary
institutions such as the Banks are prohibited from making capital
distributions, including the payment of dividends, if, after making such
distribution, the institution would become "undercapitalized" (as such term is
used in the statute). Based on each of the Bank's current financial condition,
we do not expect that this provision will have any impact on our ability to
obtain dividends from the Banks. During the first six months of 2000, the Banks
paid $3.9 million in dividends to us, which reflected 5.3% of the total amount
of dividends the Banks were permitted to pay as of December 31, 1999 under
existing supervisory practices. Payment of dividends by the Banks is also
subject to the respective Bank's profitability, financial condition and capital
expenditures and other cash flow requirements. The Federal Reserve Board has
stated that, as a matter of prudent banking, a bank or bank holding company
should not maintain its existing rate of cash dividends on common stock unless:
(1) the organization's net income available to common shareholders over the
past year has been sufficient to fund fully the dividends; and (2) the
prospective rate of earnings retention appears consistent with the
organization's capital needs, asset quality, and overall financial condition.
No assurance can be given that the Banks will be able to pay dividends at past
levels, or at all, in the future.
In addition to restrictions on the payment of dividends, the Banks are
subject to certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, us and certain other
affiliates, and on investments in stock or other securities thereof. Such
restrictions prevent us and such other affiliates from borrowing from the Banks
unless the loans are secured by various types of collateral. Furthermore, such
secured loans, other transactions and investments by the Banks are generally
limited in amount as to us and as to each of such other affiliates to 10% of
each Bank's capital and surplus and as to us and all of such other affiliates
to an aggregate of 20% of each Bank's capital and surplus. As of June 30, 2000,
approximately $27.7 million of credit was available to us under this
limitation.
Because we are a holding company, our right to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the capital
securities to benefit indirectly from such distribution), is subject to the
prior claims of creditors of that subsidiary (including depositors, in the case
of the Banks), except to the extent that we may be recognized as a creditor of
that subsidiary. At June 30, 2000, our subsidiaries had total liabilities,
including deposits, of $3.4 billion. Accordingly, the junior subordinated
debentures will be effectively subordinated to all existing and future
liabilities of our subsidiaries (including the Banks' deposit liabilities) and
all liabilities of any of our future subsidiaries. At June 30, 2000, we had $20
million in senior indebtedness. The indenture does not limit us or any of our
subsidiaries from incurring or issuing other secured or unsecured debt,
including senior indebtedness. See "--Subordination."
Form, Registration and Transfer
If the exchange debentures are distributed to the holders of the exchange
capital securities, the exchange debentures may be represented by one or more
global certificates registered in the name of Cede & Co., as the nominee of
DTC. The depositary arrangements for such exchange debentures are expected to
be substantially similar to those in effect for the exchange capital
securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, you should read "Description of Exchange
Capital Securities--Form, Denomination, Book-Entry Procedures and Transfer."
Payment and Paying Agents
Payment of principal of (and premium, if any) and interest on the exchange
debentures will be made at the office of the debenture trustee in Wilmington,
Delaware or at the office of such paying agent or paying agents
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as we may designate from time to time, except that, at our option, payment of
any interest may be made, except in the case of exchange debentures in global
form:
. by check mailed to the address of the person or entity entitled to the
interest payment as such address shall appear in the register for the
exchange debentures; or
. by transfer to an account maintained by the person or entity entitled to
the interest payment as specified in the register, provided that proper
transfer instructions have been received by the relevant record date.
Payment of any interest on any exchange debenture will be made to the person
or entity in whose name the exchange debenture is registered at the close of
business on the record date for the interest payment date, except in the case
of defaulted interest.
We may at any time designate additional paying agents or rescind the
designation of any paying agent; however we will always be required to maintain
a paying agent in each place of payment for the exchange debentures.
Any moneys deposited with the debenture trustee or any paying agent, or then
held by us, in trust for the payment of the principal of (or premium, if any)
or interest on any exchange debenture and remaining unclaimed for two years
after such principal (or premium, if any) or interest has become due and
payable shall, at our request, be repaid to us and the holder of the exchange
debenture shall thereafter look, as a general unsecured creditor, only to us
for payment.
Option to Extend Interest Payment Date
So long as no event of default under the exchange debentures exists, we will
have the right under the indenture to defer the payment of interest on the
exchange debentures, at any time and from time to time, for no more than 10
consecutive semi-annual periods, provided that no deferral period shall end on
a date other than an interest payment date or extend beyond June 1, 2030. At
the end of a deferral period, we must pay all interest then accrued and unpaid
(together with interest thereon at the rate of 10.75% per year, compounded
semi-annually from the last interest payment date to which interest was paid,
to the extent permitted by applicable law). During a deferral period, interest
will continue to accrue, and holders of the exchange capital securities or, if
the exchange debentures have been distributed to holders of the exchange
capital securities, holders of exchange debentures, will be required to include
that deferred interest in gross income for federal income tax purposes on an
accrual method of accounting prescribed by the Code and Treasury regulation
provisions on original issue discount prior to the receipt of cash attributable
to that income. See "Certain Federal Income Tax Consequences--Interest Income
and Original Issue Discount."
During any deferral period, we may not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of our
capital stock;
. make any payment of principal of, or interest or premium, if any, on, or
repay, repurchase or redeem any of our debt securities (including any
other debentures) that rank equal to or junior to the exchange
debentures; or
. make any guarantee payments with respect to any guarantee by us of the
debt securities of any of our subsidiaries (including our exchange
guarantee of the exchange capital securities of the Trust and any other
guarantees) if such guarantee ranks equal or junior to the exchange
debentures;
Notwithstanding the foregoing, during a deferral period the following is
permitted:
. dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, our capital stock;
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. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any rights pursuant
thereto;
. payments under the exchange guarantee;
. a reclassification of our capital stock or the exchange or conversion of
one class or series of our capital stock for another class or series of
our capital stock;
. the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged; and
. purchases of our common stock related to the issuance of common stock or
rights under any of our benefit plans for our directors, officers or
employees or any of our dividend reinvestment plans.
Before the end of any deferral period, we may extend the deferral period,
as long as no event of default exists and the extension does not cause the
deferral period to exceed 10 consecutive semi-annual periods, to end on a date
other than an interest payment date or to extend beyond June 1, 2030. At the
end of any deferral period and upon the payment of all then accrued and unpaid
interest (together with interest thereon at the rate of 10.75% per year,
compounded semi-annually, to the extent permitted by applicable law), we may
elect to begin a new deferral period, subject to the requirements set forth in
this prospectus. No interest will be due and payable during a deferral period
until the deferral period ends.
We must give the property trustee, the administrative trustees and the
debenture trustee notice of our election at least five business days before
the earlier of:
. the date the distributions on the exchange capital securities would have
been payable, except for the election to begin or extend such deferral
period;
. the date the property trustee is required to give notice to any
securities exchange or automated quotation system on which the exchange
capital securities are listed or quoted or to holders of exchange
capital securities of the record date for such distributions; or
. the date such distributions are payable, but in any event not less than
five business days prior to such record date.
The debenture trustee will notify holders of the exchange capital
securities of our election to begin or extend a new deferral period.
There is no limit on the number of times that we may elect to begin a
deferral period.
We do not currently intend to exercise our right to defer payments of
interest on the exchange debentures.
Optional Prepayment
The exchange debentures will be prepayable, in whole or in part, at our
option on or after June 1, 2010, subject to our receipt of any required
regulatory approval, at an optional prepayment price equal to $1,000 per
exchange capital security, plus, in each case, accrued and unpaid interest on
the exchange debentures, if any, to the date of prepayment.
Special Event Prepayment
If there are changes in the bank regulatory, investment company or tax laws
that adversely affect the status of the Trust, the exchange capital securities
or the exchange debentures, we may, at our option and at any time, subject to
our receipt of any required regulatory approval, prepay the exchange
debentures, in whole but not in part, at any time within 90 days of the change
in the law, at the special event prepayment price. The special event
prepayment price will be an amount equal to 100% of the principal amount of
the exchange debentures plus accrued and unpaid interest and liquidated
damages, if any, to the date of prepayment.
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A change in the bank regulatory law means our receipt of an opinion of
independent bank regulatory counsel experienced in such matters to the effect
that, as a result of:
. any amendment to, or change (including any announced prospective change)
in, any laws or regulations of the United States or any rules,
guidelines or policies of an applicable regulatory agency or authority;
or
. any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations,
which amendment or change is effective or which pronouncement or decision is
announced on or after the date the exchange capital securities are first
issued, the exchange capital securities do not constitute, or within 90 days of
the opinion will not constitute, Tier 1 capital (or its then equivalent if we
were subject to such capital requirement).
A change in the investment company law means the receipt by us and the Trust
of an opinion of independent securities counsel experienced in such matters to
the effect that, as a result of:
. any amendment to, or change (including any announced prospective change)
in, any laws or regulations of the United States or any rules,
guidelines or policies of any applicable regulatory agency or authority;
or
. any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations,
which amendment or change is effective or which pronouncement or decision is
announced on or after the date the exchange capital securities are first
issued, the Trust is, or within 90 days of the date of the opinion will be,
considered an investment company that is required to be registered under the
Investment Company Act.
A change in tax law means the receipt by us and the Trust of an opinion of
independent tax counsel experienced in such matters to the effect that, as a
result of:
. any amendment to, or change (including any announced prospective change)
in, any laws or regulations of the United States or any political
subdivision or taxing authority thereof or therein; or
. any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations,
which amendment or change is effective or which pronouncement or decision is
announced on or after the date the exchange capital securities are first
issued, there is more than an insubstantial risk that:
. the Trust is, or will be within 90 days of the date of such opinion,
subject to federal income tax with respect to any income received or
accrued on the exchange debentures;
. interest payable by us on the exchange debentures is not, or within 90
days of the date of such opinion will not be, deductible by us, in whole
or in part, for federal income tax purposes; or
. the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
We will mail any notice of prepayment between 30 and 60 days before the
prepayment date to each holder of exchange debentures to be prepaid at its
registered address. Unless we default in payment of the prepayment price, on
the prepayment date interest shall cease to accrue on the exchange debentures
called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a change in the tax law, we will pay as
additional amounts on the exchange debentures any amounts as may be necessary
in order that the amount of distributions then due and payable by the Trust on
the outstanding exchange capital securities shall not be reduced as a result of
any additional sums, including taxes, duties or other governmental charges to
which the Trust has become subject as a result of a change in the tax law.
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Certain Covenants of Greater Bay Bancorp
We covenant that we will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our
capital stock; or
. make any payment of principal of, or interest or premium, if any, on, or
repay, repurchase or redeem any of our debt securities (including any
other debentures) that rank equal or junior to the exchange debentures;
or
. make any guarantee payments with respect to any of our guarantees of the
debt securities of any of our subsidiaries (including any other
guarantees) if such guarantee ranks equal or junior to the exchange
debentures,
if at such time:
. we have actual knowledge that there is any event that is, or with the
giving of notice or the lapse of time, or both, would be, an exchange
debenture event of default and that we have not taken reasonable steps
to cure;
. we are in default with respect to our payment obligations under the
exchange guarantee; or
. we have given notice of our election to exercise our right to defer
interest payments on the exchange debentures as provided in the
indenture and the deferral period, or any extension of the deferral
period, is continuing.
Notwithstanding the foregoing, the following is permitted:
. dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, our common stock;
. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto;
. payments under the exchange guarantee;
. a reclassification of our capital stock or the exchange or conversion of
one class or series of our capital stock for another class or series of
our capital stock;
. the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged; and
. purchases of our common stock related to the issuance of common stock or
rights under any of our benefit plans for our directors, officers or
employees or any of our dividend reinvestment plans.
So long as the capital securities remain outstanding, we also will covenant:
. to directly or indirectly maintain 100% direct or indirect ownership of
the common securities; provided, however, that any of our permitted
successors under the indenture may succeed to our ownership of the
common securities;
. to use commercially reasonable efforts to cause the Trust to remain a
business trust, except in connection with the distribution of exchange
debentures to the holders of capital securities and common securities in
liquidation of the Trust, the redemption of all of the capital
securities and common securities, or certain mergers, consolidations or
amalgamations, each as permitted by the trust agreement;
. to use commercially reasonable efforts to cause the Trust to otherwise
continue to be classified as a grantor trust for federal income tax
purposes;
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. to use commercially reasonable efforts to cause each holder of capital
securities to be treated as owning an undivided beneficial interest in
the junior subordinated debentures; and
. to not cause, as sponsor of the Trust, or permit, as holder of the
common securities, the dissolution, winding-up or liquidation of the
Trust, except as provided in the trust agreement.
Modification of Indenture
From time to time, we, together with the debenture trustee, may, without the
consent of the holders of exchange debentures, amend the indenture for
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies or enabling us and the Trust to conduct an exchange offer as
contemplated by the registration rights agreement, provided that any amendment
to the indenture does not materially adversely affect the interest of the
holders of exchange debentures. We, together with the debenture trustee, may
amend the indenture, regardless of the effect on the interest of the holders of
the exchange debentures, for specific purposes including, among other things,
to qualify, and qualifying, or maintaining the qualification of, the indenture
under the Trust Indenture Act.
The indenture permits us and the debenture trustee, with the consent of the
holders of a majority in aggregate principal amount of exchange debentures, to
modify the indenture in a manner affecting the rights of the holders of the
exchange debentures; provided that no modification may, without the consent of
the holders of each outstanding subordinated debenture affected:
. change the stated maturity date, or reduce the principal amount, of the
exchange debentures;
. reduce the amount payable on prepayment or reduce the rate or extend the
time of payment of interest except pursuant to our right under the
indenture to defer the payment of interest, see "--Option to Extend
Interest Payment Date";
. change any of the prepayment provisions;
. make the principal of, (or premium, if any) or interest on, the exchange
debentures payable in any coin or currency other than that provided in
the exchange debentures;
. impair or affect the right of any holder of exchange debentures to
institute suit for the payment thereof; or
. reduce the percentage of the principal amount of the exchange
debentures, the holders of which are required to consent to any such
modification.
Events of Default Under the Exchange Debentures
An event of default under the exchange debenture means:
. our failure for 30 days to pay any interest, including compounded
interest and additional sums, if any, or liquidated damages, if any, on
the exchange debentures or any other debentures when due (subject to the
deferral of any interest due date in the case of a deferral period with
respect to the exchange debentures or other debentures, as the case may
be);
. our failure to pay any principal or premium, if any, on the exchange
debentures or any other debentures when due, whether at maturity, upon
prepayment, by accelerating the maturity or otherwise;
. our failure to observe or perform any other covenant contained in the
indenture for 90 days after written notice to us from the debenture
trustee or to us and the debenture trustee from the holders of at least
25% in aggregate outstanding principal amount of exchange debentures; or
. certain events related to our bankruptcy, insolvency or reorganization.
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The holders of a majority in aggregate outstanding principal amount of the
exchange debentures have, subject to certain exceptions, the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the debenture trustee. The debenture trustee or the holders of not
less than 25% in aggregate outstanding principal amount of the exchange
debentures may declare the principal due and payable immediately upon an event
of default under the exchange debentures. The holders of a majority in
aggregate outstanding principal amount of the exchange debentures may annul
this declaration and waive the default if the default (other than the non-
payment of the principal of the exchange debentures which has become due solely
by such acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the debenture trustee.
Prior to any declaration accelerating the maturity of the exchange
debentures the holders of a majority in aggregate outstanding principal amount
of the exchange debentures affected may, on behalf of the holders of all the
exchange debentures, waive any past default, except a default in the payment of
principal (or premium, if any) or interest (including compounded interest and
additional sums, if any) or liquidated damages, if any (unless such default has
been cured and a sum sufficient to pay all matured installments of interest and
principal (and premium, if any) due otherwise than by acceleration has been
deposited with the debenture trustee) or a default in respect of a covenant or
provision which under the indenture cannot be modified or amended without the
consent of the holder of each outstanding exchange debenture.
The indenture requires that we file with the debenture trustee a certificate
annually as to the absence of defaults specified under the indenture.
The indenture provides that the debenture trustee may withhold notice of a
debenture event of default from the holders of the exchange debentures if the
debenture trustee considers it in the interest of the holders to do so.
Enforcement of Certain Rights by Holders of Exchange Capital Securities
If an event of default under the exchange debentures exists that is
attributable to our failure to pay the principal of (or premium, if any) or
interest (including compounded interest and additional sums, if any) or
liquidated damages, if any, on the exchange debentures on the due date, a
holder of exchange capital securities may institute a direct action against us.
We may not amend the indenture to remove this right to bring a direct action
without the prior written consent of the holders of all of the exchange capital
securities. Notwithstanding any payments that we make to a holder of exchange
capital securities in connection with a direct action, we shall remain
obligated to pay the principal of (and premium, if any) and interest on the
exchange debentures, and we shall be subrogated to the rights of the holder of
the capital securities with respect to payments on the exchange capital
securities to the extent that we make any payments to a holder in any direct
action.
The holders of the exchange capital securities will not be able to exercise
directly any remedies, other than those described in the above paragraph,
available to the holders of the exchange debentures, unless an event of default
exists under the trust agreement. See "Description of Exchange Capital
Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The indenture provides that we will not consolidate with or merge into any
other person or convey, transfer or lease all or substantially all of our
properties to any person, and no person shall consolidate with or merge into us
or convey, transfer or lease all or substantially all of its properties to us,
unless:
. in case we consolidate with or merge into another person or convey or
transfer all or substantially all of our properties to any person, the
successor is organized under the laws of the United States or any state
or the District of Columbia, and the successor expressly assumes our
obligations under the indenture with respect to the exchange debentures;
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. immediately after giving effect to the transaction, no event of default
under the exchange debentures, and no event which, after notice or lapse
of time or both, would become an event of default under the exchange
debentures, exists; and
. certain other conditions as prescribed in the indenture are met.
The general provisions of the indenture do not afford holders of the
exchange debentures protection in the event of a highly leveraged or other
transaction that we may become involved in that may adversely affect holders of
the exchange debentures.
Satisfaction and Discharge
The indenture provides that when, among other things,
. all exchange debentures not previously delivered to the debenture
trustee for cancellation have become due and payable or will become due
and payable at maturity or called for prepayment within one year; and
. we deposit or cause to be deposited with the debenture trustee funds, in
trust, for the purpose and in an amount sufficient to pay and discharge
the entire indebtedness on the exchange debentures not previously
delivered to the debenture trustee for cancellation, for the principal
(and premium, if any) and interest (including compounded interest and
additional sums, if any) to the date of the deposit or to June 1, 2030,
as the case may be,
then the indenture will cease to be of further effect (except as to our
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel), and we will be deemed to
have satisfied and discharged the indenture.
Subordination
We have promised that any of our exchange debentures issued under the
indenture will rank junior to all of our senior indebtedness to the extent
provided in the indenture. Upon any payment or distribution of our assets to
creditors upon our liquidation, dissolution, winding up, reorganization,
assignment for the benefit of our creditors, marshaling of our assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding involving us, the allocable
amounts in respect of the senior indebtedness must be paid in full before the
holders of the exchange debentures will be entitled to receive or retain any
payment in respect thereof.
If the maturity of exchange debentures is accelerated, the holders of all
senior indebtedness outstanding at such time will first be entitled to receive
payment in full of the allocable amounts in respect of such senior indebtedness
before the holders of exchange debentures will be entitled to receive or retain
any payment in respect of the principal of (or premium, if any) or interest, if
any, on the exchange debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the exchange debentures may be made if there is a default in
any payment with respect to senior indebtedness, or an event of default exists
with respect to any senior indebtedness that accelerates the maturity of the
senior indebtedness, or if any judicial proceeding shall be pending with
respect to the default.
Allocable amounts, when used with respect to any senior indebtedness, means
all amounts due or to become due on such senior indebtedness less, if
applicable, any amount which would have been paid to, and retained by, the
holders of such senior indebtedness (whether as a result of the receipt of
payments by the holders of such senior indebtedness from us or any other
obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such senior
indebtedness pursuant to any provision of such indebtedness for the payment
over of amounts received on account of such indebtedness to the holders of such
senior indebtedness or otherwise) but for the fact that such senior
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indebtedness is subordinate or junior in right of payment to (or subject to a
requirement that amounts received on such senior indebtedness be paid over to
obligees on) trade accounts payable or accrued liabilities arising in the
ordinary course of business.
Indebtedness for money borrowed means any of our obligations, or any
obligation guaranteed by us, to repay borrowed money, whether or not evidenced
by bonds, debentures, notes or other written instruments, except that
indebtedness for money borrowed does not include trade accounts payable or
accrued liabilities arising in the ordinary course of business.
Indebtedness ranking on a parity with the exchange debentures means:
. indebtedness for money borrowed, whether outstanding on the date the
indenture is executed or created, assumed or incurred after the date
that the indenture is executed, to the extent the indebtedness for money
borrowed by its terms ranks equal to and not prior or senior to the
exchange debentures in the right of payment upon the happening of our
dissolution, winding-up, liquidation or reorganization including without
limitation the 1997 Junior Subordinated Debentures, the 1998 Junior
Subordinated Debentures and the 2000 Junior Subordinated Debentures;
. all other debt securities, and guarantees in respect of those debt
securities, issued to any trust other than the Trust, or a trustee of
such trust, partnership or other entity affiliated with us, that is our
financing vehicle (a "financing entity"), in connection with the
issuance by the financing entity of equity securities or other
securities guaranteed by us pursuant to an instrument that ranks equal
with or junior to the exchange guarantee including without limitation
the guarantee issued in respect of the capital securities of GBB Capital
I, the guarantee issued in respect of GBB Capital II and the guarantee
issued in respect of the capital securities of GBB Capital III; and
. the securing of any indebtedness otherwise constituting indebtedness
ranking on a parity with the exchange debentures shall not be deemed to
prevent such indebtedness from constituting indebtedness ranking on a
parity with the exchange debentures.
Indebtedness ranking junior to the exchange debentures means any
indebtedness for money borrowed, whether outstanding on the date the indenture
is executed or created, assumed or incurred after the date the indenture is
executed, to the extent the indebtedness for money borrowed by its terms ranks
junior to and not equal with or prior to the exchange debentures (and any other
indebtedness ranking on a parity with the exchange debentures) in right of
payment upon the happening of our dissolution or winding-up or liquidation or
reorganization. The securing of any indebtedness otherwise constituting
indebtedness ranking junior to the exchange debentures shall not be deemed to
prevent such indebtedness for money borrowed from constituting indebtedness
ranking junior to the exchange debentures.
Senior indebtedness means all indebtedness for money borrowed, whether
outstanding on the date the indenture is executed or created, assumed or
incurred after the date the indenture is executed, except indebtedness ranking
on a parity with the exchange debentures or indebtedness ranking junior to the
exchange debentures, and any deferrals, renewals or extensions of the senior
indebtedness.
We are a bank holding company and our subsidiaries own almost all of our
operating assets. We rely primarily on dividends from the Banks to meet our
obligations for payment of principal and interest on our outstanding debt
obligations and corporate expenses. We are a legal entity separate and distinct
from our subsidiaries. Holders of exchange debentures should look only to
Greater Bay Bancorp for payments on the exchange debentures. There are
regulatory limitations on the payment of dividends directly or indirectly to us
from the Banks. See "--General." In addition, the Banks are subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with us and certain other affiliates, and on investments in
stock or other securities thereof. Such restrictions prevent us and such other
affiliates from borrowing from the Banks unless the loans are secured by
various types of collateral. Further, such secured loans, other transactions
and investments by the Banks are generally limited in amount as to us and as to
each
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of such other affiliates to 10% of each Bank's capital and surplus and as to us
and all of such other affiliates to an aggregate of 20% of each Bank's capital
and surplus. Accordingly, the exchange debentures will be effectively
subordinated to all existing and future liabilities of our subsidiaries.
Because we are a bank holding company, our right to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the capital
securities to benefit indirectly from such distribution), is subject to the
prior claims of creditors of that subsidiary (including depositors, in the case
of the Banks), except to the extent we may be recognized as a creditor of that
subsidiary. At June 30, 2000, our subsidiaries had total liabilities, including
deposits, of $3.4 billion and senior indebtedness of $20 million. Accordingly,
the exchange debentures will be effectively subordinated to all existing and
future liabilities of our subsidiaries (including the Banks' deposit
liabilities) and all liabilities of any of our future subsidiaries. The
indenture does not limit us or our subsidiaries from incurring or issuing other
secured or unsecured debt, including senior indebtedness.
Restrictions on Transfer
The exchange debentures will be issued and may be transferred only in blocks
having an aggregate principal amount of not less than $100,000 and multiples of
$1,000 in excess thereof. Any attempted transfer of exchange debentures in a
block having an aggregate principal amount of less than $100,000 will be deemed
to be void and of no legal effect whatsoever. Any such purported transferee
shall be deemed not to be the holder of such exchange debentures for any
purpose, including but not limited to the receipt of payments on such exchange
debentures, and such purported transferee shall be deemed to have no interest
whatsoever in such exchange debentures.
Governing Law
The indenture and the exchange debentures will be governed by and construed
in accordance with the laws of the State of New York, without regard to
conflict of law principles.
Information Concerning the Debenture Trustee
Following the exchange offer and the qualification of the indenture under
the Trust Indenture Act, the debenture trustee will have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the debenture
trustee is not obligated to exercise any of the powers vested in it by the
indenture at the request of any holder of exchange debentures, unless offered
reasonable indemnity by the holder against the costs, expenses and liabilities
which might be incurred thereby. The debenture trustee is not required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties under the indenture.
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DESCRIPTION OF EXCHANGE GUARANTEE
We will execute and deliver the exchange guarantee at the same time the
exchange capital securities are issued. The terms of the exchange guarantee are
identical in all material respects to the terms of the original guarantee. This
summary of the material provisions of the exchange guarantee is not complete
and is subject to, and qualified in its entirety by, the exchange guarantee and
the Trust Indenture Act. The guarantee trustee will hold the exchange guarantee
for the benefit of the holders of the exchange capital securities. You can
obtain a copy of the exchange guarantee by requesting it from Greater Bay
Bancorp. Wilmington Trust Company will act as guarantee trustee under the
exchange guarantee.
General
We will irrevocably agree to pay in full on a subordinated basis, to the
extent set forth in this prospectus, the following payments with respect to the
exchange capital securities to the extent not paid by the Trust:
. any accumulated and unpaid distributions required to be paid on the
exchange capital securities, to the extent that the Trust has funds
legally available at that time;
. the applicable redemption price with respect to the exchange capital
securities called for redemption, to the extent that the Trust has funds
legally available at that time; and
. upon a voluntary or involuntary dissolution, winding-up or liquidation
of the Trust (other than in connection with the distribution of the
exchange debentures to holders of the exchange capital securities or the
redemption of all exchange capital securities), the lesser of (a) the
liquidation distribution, to the extent the Trust has funds legally
available at that time, and (b) the amount of assets of the Trust
remaining available for distribution to holders of capital securities
after satisfying the liabilities owed to the Trust's creditors as
required by applicable law.
The exchange guarantee will rank subordinate and junior to all senior
indebtedness to the extent provided in the exchange guarantee. See "--Status of
the Exchange Guarantee." Our obligation to make a guarantee payment may be
satisfied by our direct payment of the required amounts to the holders of the
exchange capital securities or by causing the Trust to pay these amounts to the
holders of the exchange capital securities.
The exchange guarantee will be an irrevocable guarantee on a subordinated
basis of the Trust's obligations under the exchange capital securities, but
will apply only to the extent that the Trust has funds sufficient to make these
payments. If we do not make payments on the exchange debentures held by the
Trust, then it will not be able to make the related payments to you on the
exchange capital securities and will not have funds legally available. Please
refer to the "Relationship Among the Exchange Capital Securities, the Exchange
Debentures and the Exchange Guarantee" section of this prospectus.
The exchange guarantee does not limit us from incurring or issuing other
secured or unsecured debt, including senior indebtedness, whether under the
indenture, any other indenture that we may enter into in the future or
otherwise. The holders of at least a majority in aggregate liquidation amount
of the exchange capital securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
guarantee trustee in respect of our guarantee or to direct the exercise of any
trust power conferred upon the guarantee trustee under our guarantee. If the
guarantee trustee fails to enforce the exchange guarantee, any holder of the
exchange capital securities may institute a legal proceeding directly against
us to enforce their rights under the exchange guarantee without first
instituting a legal proceeding against the Trust, the guarantee trustee or any
other person or entity.
If we default on our obligation to pay amounts payable under the exchange
debentures, the Trust will lack funds for the payment of distributions or
amounts payable on redemption of the exchange capital securities or otherwise,
and the holders of the exchange capital securities will not be able to rely
upon the exchange guarantee for payment of such amounts. Instead, if an event
of default under the exchange debentures exists
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that is attributable to our failure to pay principal of (or premium, if any) or
interest on the exchange debentures on a payment date, then any holder of
exchange capital securities may institute a direct action against us pursuant
to the terms of the indenture for enforcement of payment to that holder of the
principal of (or premium, if any) or interest on such exchange debentures
having a principal amount equal to the aggregate liquidation amount of the
exchange capital securities of that holder. In connection with a direct action,
we will have a right of set-off under the indenture to the extent that we made
any payment to the holder of exchange capital securities in the direct action.
Except as described in this prospectus, holders of exchange capital securities
will not be able to exercise directly any other remedy available to the holders
of the exchange debentures or assert directly any other rights in respect of
the exchange debentures. The trust agreement provides that each holder of
exchange capital securities by accepting the exchange capital securities agrees
to the provisions of the exchange guarantee and the indenture.
We will, through our guarantee, the trust agreement, the exchange debentures
and the indenture, taken together, fully, irrevocably and unconditionally
guarantee all of the Trust's obligations under the exchange capital securities.
No single document standing alone, or operating in conjunction with fewer than
all of the other documents, constitutes that guarantee. Only the combined
operation of these documents provides a full, irrevocable and unconditional
guarantee of the Trust's obligations under the capital securities. You should
refer to "Relationship Among the Exchange Capital Securities, the Exchange
Debentures and the Exchange Guarantee" for more information about our
guarantee.
Status of the Exchange Guarantee
Our exchange guarantee will constitute an unsecured obligation and will rank
subordinate and junior to all senior indebtedness in the same manner as the
exchange debentures. See "Description of Exchange Debentures--Subordination."
In addition, because we are a holding company, our right to participate in any
distribution of the assets of our subsidiaries, upon their liquidation or
reorganization or otherwise is subject to the prior claims of their creditors
(including its depositors), except to the extent we may be recognized as their
creditor. Accordingly, our obligations under the exchange guarantee effectively
will be subordinated to all existing and future liabilities of our present and
future subsidiaries (including depositors of the Banks). As a result, claimants
should look only to our assets for payments under the exchange guarantee. See
"Description of Exchange Debentures--General."
Our exchange guarantee will rank equal to all of our other guarantees with
respect to preferred beneficial interests issued by other trusts. Our guarantee
of the Trust's exchange capital securities does not limit the amount of secured
or unsecured debt, including senior indebtedness, that we or any of our
subsidiaries may incur. We expect from time to time that we will incur
additional indebtedness and that our subsidiaries will also incur additional
liabilities.
Our guarantee will constitute a guarantee of payment only to the extent that
the Trust has funds legally available and not of collection, enabling the
guaranteed party to institute a legal proceeding directly against us to enforce
their rights under the exchange guarantee without first instituting a legal
proceeding against any other person or entity. Our guarantee will not be
discharged, except by payment of the exchange guarantee payments in full to the
extent that the Trust has not paid, or upon distribution of the exchange
debentures to, the holders of the exchange capital securities.
Events of Default
There will be an event of default under the exchange guarantee if we fail to
perform any of our payment or other obligations under the exchange guarantee;
except that with respect to a default in payment of any guarantee payment, we
shall have received notice of default and shall not have cured the default
within 60 days after receipt of the notice. We, as guarantor, will be required
to file annually with the guarantee trustee a certificate regarding our
compliance with the applicable conditions and covenants under our guarantee.
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Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the exchange capital securities (in which case no
approval will be required), the exchange guarantee may not be amended without
the prior approval of the holders of a majority of the liquidation amount of
such outstanding capital securities. You should read "Description of Exchange
Capital Securities--Voting Rights; Amendment of the Trust Agreement" for more
information about the manner of obtaining the holders' approval. All guarantees
and agreements contained in the exchange guarantee agreement shall bind our
successors, assigns, receivers, trustees and representatives and shall inure to
the benefit of the holders of the exchange capital securities then outstanding.
Termination of the Exchange Guarantee
Our guarantee will terminate and be of no further force and effect upon:
. full payment of the applicable redemption price of all outstanding
exchange capital securities;
. full payment of the liquidation amount payable upon liquidation of the
Trust; or
. distribution of exchange debentures to the holders of the exchange
capital securities.
Our guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of the exchange capital securities must
restore payment of any sums paid under the capital securities or the exchange
guarantee.
Governing Law
The exchange guarantee will be governed by and construed in accordance with
the laws of the State of New York, without regard to conflict of law
principles.
Information Concerning the Guarantee Trustee
The guarantee trustee, except if we default under the exchange guarantee,
will undertake to perform only such duties as are specifically set forth in the
exchange guarantee and, in case a default with respect to the exchange
guarantee has occurred, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the guarantee trustee will not be obligated to
exercise any of the powers vested in it by the exchange guarantee at the
request of any holder of the exchange capital securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that it might
incur.
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DESCRIPTION OF ORIGINAL SECURITIES
We refer to the original capital securities, the original guarantee and the
original junior subordinated debentures collectively as the original securities
and refer to the exchange capital securities, the exchange guarantee and the
exchange debentures collectively as the exchange securities.
The terms of the original securities are identical in all materials respects
to the exchange securities, except that:
. original securities have not been registered under the Securities Act,
are subject to certain restrictions on transfer and are entitled to
certain rights under the applicable registration rights agreement, which
rights will terminate upon consummation of the exchange offer, except
under limited circumstances;
. the exchange capital securities will not provide for any increase in the
distribution rate; and
. the exchange debentures will not provide for any liquidated damages.
The original securities provide that, if the Trust has not exchanged
exchange capital securities for all original capital securities validly
tendered by the 45th day after the date on which the registration statement is
declared effective, the distribution rate borne by the original capital
securities will increase by 25 basis points per annum for the period from the
occurrence of such event until such time as the exchange offer has been
consummated. The exchange securities are not, and upon consummation of the
exchange offer, the original securities will not be, entitled to any such
additional interest or distributions. Accordingly, holders of original capital
securities should review the information set forth under "Risk Factors--Your
failure to exchange original capital securities may adversely affect your
ability to sell such securities" and "Description of Exchange Capital
Securities."
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RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES, THE
EXCHANGE DEBENTURES AND THE EXCHANGE GUARANTEE
Full and Unconditional Guarantee
We will irrevocably guarantee payments of distributions and other amounts
due on the exchange capital securities to the extent the Trust has funds
legally available to pay such amounts as and to the extent set forth under
"Description of Guarantee." Taken together, our obligations under the exchange
debentures, the indenture, the trust agreement and the exchange guarantee will
provide a full, irrevocable and unconditional guarantee of the Trust's payments
of distributions and other amounts due on the exchange capital securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes this guarantee. Only the combined operation
of these documents effectively provides a full, irrevocable and unconditional
guarantee of the Trust's obligations under the exchange capital securities.
If and to the extent that we do not make the required payments on the
exchange debentures, the Trust will not have sufficient funds to make its
related payments, including distributions on the exchange capital securities.
Our guarantee will not cover any payments when the Trust does not have
sufficient funds legally available to make those payments. Your remedy, as a
holder of exchange capital securities, is to institute a direct action against
us. Our obligations under the exchange guarantee will be subordinate and junior
to all senior indebtedness.
Sufficiency of Payments
As long as we pay the interest and other payments when due on the exchange
debentures, the Trust will have sufficient funds to cover distributions and
other payments due on the exchange capital securities, primarily because:
. the aggregate principal amount or prepayment price of the exchange
debentures will equal the aggregate liquidation amount or redemption
price, as applicable, of the capital securities;
. the interest rate and interest payment dates and other payment dates on
the exchange debentures will match the distribution rate and
distribution dates and other payment dates for the capital securities;
. as sponsor, we will pay for all and any costs, expenses and liabilities
of the Trust, except for the Trust's obligations to holders of capital
securities; and
. the trust agreement also provides that the Trust is not authorized to
engage in any activity that is not consistent with its limited purposes.
Enforcement Rights of Holders of Exchange Capital Securities
You, as holder of exchange capital securities, may institute a legal
proceeding directly against us to enforce your rights under our guarantee
without first instituting a legal proceeding against the guarantee trustee, the
Trust or any other person or entity.
A default or event of default under any senior indebtedness would not
constitute a default or event of default under the trust agreement. However, if
there are payment defaults under, or accelerations of, senior indebtedness, the
subordination provisions of the indenture provide that we cannot make payments
in respect of the exchange debentures until we have paid the senior
indebtedness in full or we have cured any payment default or a payment default
has been waived. Our failure to make required payments on exchange debentures
would constitute an event of default under the trust agreement.
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Limited Purpose of the Trust
The exchange capital securities will represent beneficial interests in the
Trust, and the Trust exists for the sole purpose of issuing and selling the
capital securities and the common securities, using the proceeds from the sale
of the capital securities and the common securities to acquire the original
junior subordinated debentures, exchanging the original capital securities and
original junior subordinated debentures in the exchange offer and engaging in
only those other activities necessary, advisable or incidental thereto. A
principal difference between the rights of a holder of an exchange capital
security and a holder of an exchange debenture is that a holder of an exchange
debenture will be entitled to receive from us the principal of (and premium, if
any) and interest on exchange debentures held, while a holder of exchange
capital securities is entitled to receive distributions from the Trust (or, in
certain circumstances, from us under our guarantee) if and to the extent the
Trust has funds legally available to pay the distributions.
Rights Upon Dissolution
Unless the exchange debentures are distributed to holders of the exchange
capital securities, if the Trust is voluntarily or involuntarily dissolved,
wound-up or liquidated, after satisfying the liabilities owed to the Trust's
creditors as required by applicable law, the holders of the exchange capital
securities will be entitled to receive, out of assets held by the Trust, the
liquidation distribution in cash. See "Description of Exchange Capital
Securities--Liquidation of the Trust and Distribution of Exchange Debentures."
If we are voluntarily or involuntarily liquidated or bankrupted, the
property trustee, as holder of the exchange debentures, would be one of our
subordinated creditors, subordinated in right of payment to all senior
indebtedness, but entitled to receive payment in full of principal (and
premium, if any) and interest, before any of our stockholders receive payments
or distributions. Since we will be the guarantor under the exchange guarantee
and will agree to pay all costs, expenses and liabilities of the Trust (other
than the Trust's obligations to the holders of its exchange capital
securities), the positions of a holder of exchange capital securities and a
holder of exchange debentures relative to other creditors and to our
stockholders in the event of our liquidation or bankruptcy are expected to be
substantially the same.
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MATERIAL FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Manatt, Phelps & Phillips, LLP, special federal income tax
counsel to us and the Trust, the following describes the material federal
income tax consequences of the purchase, ownership and disposition of an
exchange capital security.
This summary addresses only the tax consequences to a person that acquires
an exchange capital security on its original issuance at its original price and
that holds the exchange security as a capital asset. This summary does not
address all tax consequences that may be applicable to a beneficial owner of an
exchange capital security and does not address the tax consequences to holders
subject to special tax regimes (like banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors or persons that will hold an
exchange capital security as a position in a "straddle," as part of a
"synthetic security" or "hedge" or as part of a "conversion transaction" or
other integrated investment). This summary does not include any description of
any alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may apply to an exchange capital
security. This discussion is addressed to a U.S. Holder, which is defined as a
beneficial owner of an exchange capital security that, for federal income tax
purposes, is (or is treated as):
. a citizen or individual resident of the United States;
. a corporation or partnership (or entity treated for federal income tax
purposes as a corporation or partnership) created or organized in or
under the laws of the United States or any state (including the District
of Columbia) or other political subdivision thereof;
. an estate the income of which is includible in gross income for federal
income tax purposes without regard to its source; or
. a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the ability to control all substantial decisions of the
trust.
This summary does not address the special consequences to a non U.S. Holder
who acquires an exchange capital security. For purposes of this discussion, a
"Non U.S. Holder" generally is any corporation, individual, partnership, estate
or trust that is not a U.S. Holder for federal income tax purposes.
This summary does not address the tax consequences to any stockholder,
partner or beneficiary of a holder of an exchange capital security. This
summary is based on the Code, Treasury regulations thereunder and the
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis. An opinion of
Manatt, Phelps & Phillips, LLP is not binding on the IRS or the courts. No
rulings have been or are expected to be sought from the IRS with respect to any
of the matters described in this prospectus. We can give no assurance that the
opinions expressed will not be challenged by the IRS or, if challenged, that
the challenge will not be successful.
Prospective investors are advised to consult with their own tax advisors
with respect to the tax consequences to them of the purchase, ownership and
disposition of the exchange capital securities, including the tax consequences
under state, local, foreign, and other tax laws and possible effects of changes
in such tax laws.
Classification of the Exchange Debentures
We intend to take the position that the exchange debentures will be
classified for federal income tax purposes as our indebtedness. Manatt, Phelps
& Phillip, LLP, has rendered its opinion that the exchange debentures will be
treated as debt of Greater Bay Bancorp for federal income tax purposes. We,
together with
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the Trust and the holders of the exchange capital securities (by acceptance of
a beneficial interest in an exchange capital security) will agree to treat the
exchange debentures as our indebtedness for all federal income tax purposes. We
cannot be sure that this position will not be challenged by the IRS or, if
challenged, that the challenge will not be successful. The remainder of this
discussion assumes that the exchange debentures will be classified as our
indebtedness for federal income tax purposes.
Classification of the Trust
In connection with the issuance of the original capital securities, Manatt,
Phelps & Phillips, LLP rendered its opinion that, under then current law and
assuming full compliance with the terms of the trust agreement and the
indenture (and certain other documents), and based on certain facts and
assumptions contained in that opinion, the Trust is not classified for federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation. Manatt, Phelps & Phillips, LLP, has confirmed this opinion.
Accordingly, for federal income tax purposes, the Trust is not subject to
federal income tax, and each holder of an exchange capital security will be
required to include in its gross income any interest (or accrued original issue
discount), with respect to its allocable share of the exchange debentures.
Interest Income and Original Issue Discount
Under the indenture, we have the right to defer the payment of interest on
the exchange debentures at any time or from time to time for one or more
deferral periods not exceeding 10 consecutive semi-annual periods each,
provided that no deferral period shall end on a date other than an interest
payment date or extend beyond June 1, 2030. By reason of that right, the
Treasury Regulations will subject the exchange debentures to the rules in the
Code and Treasury Regulations on debt instruments issued with original issue
discount, unless the indenture or exchange debentures contain terms or
conditions that make the likelihood of exercise of the deferral option remote.
Under the Treasury Regulations, a "remote" contingency that stated interest
will not be timely paid will be ignored in determining whether a debt
instrument is issued with original issue discount. Although the answer is not
clear, we believe that the likelihood that we would exercise our option to
defer payments of interest is remote since exercising that option would, among
other things, prevent us from declaring dividends on any class of our equity
securities. Accordingly, the exchange debentures should not be considered to be
issued with original issue discount and, accordingly, stated interest on the
exchange debentures generally will be taxable to a holder as ordinary income at
the time it is paid or accrued in accordance with such holder's method of
accounting.
Under the Treasury Regulations, if we were to exercise our option to defer
payments of interest, the exchange debentures would at that time be treated as
issued with original issue discount, and all stated interest on the exchange
debentures would thereafter be treated as original issue discount as long as
the exchange debentures remain outstanding. If this occurred, all of a holder's
interest income with respect to the exchange debentures would thereafter be
accounted for on an economic accrual basis regardless of such holder's method
of tax accounting, and actual distributions of stated interest would not be
reported as taxable income. Consequently, a holder of an exchange capital
security would be required to include in gross income original issue discount
even though we would not make actual cash payments during a deferral period.
The amount of such includible original issue discount could be significant.
Also, under the Treasury Regulations, if the option to defer the payment of
interest were determined not to be remote, the exchange debentures would be
treated as having been originally issued with original issue discount. In such
event, a holder would be required to include in gross income an amount of
original issue discount each taxable year that approximates the amount of
interest that accrues on the exchange debentures at the stated interest rate,
regardless of such holder's method of tax accounting, and actual cash payments
of interest on the exchange debenture would not be separately includible in
gross income. It is possible that the IRS could take a position contrary to the
interpretation described in this prospectus.
Because income on the exchange capital securities will constitute interest
or original issue discount, corporate holders of the capital securities will
not be entitled to a dividends-received deduction with respect to any income
recognized with respect to the exchange capital securities.
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Receipt of Junior Subordinated Debenture or Cash upon Liquidation of the Trust
We will have the right at any time to liquidate the Trust and cause the
exchange debentures to be distributed to the holders of the trust securities.
Under current law, the liquidation of the Trust and the distribution of the
exchange debentures to trust security holders, for federal income tax purposes,
would be treated as a nontaxable event to each holder, and the aggregate tax
basis in the exchange debentures received by such holder would be equal to the
holder's aggregate tax basis in its exchange capital securities surrendered. A
holder's holding period in the exchange debentures received in liquidation of
the Trust would be the same as the holding period that the holder had in the
exchange capital securities surrendered.
The exchange debentures may be prepaid in cash, and the proceeds of that
prepayment would be distributed to holders in redemption of their exchange
capital securities. Under current law, that redemption would constitute, for
federal income tax purposes, a taxable disposition of the redeemed exchange
capital securities, the tax consequences of which are described below under "--
Sales or Redemptions of Exchange Capital Securities."
Sales or Redemptions of Exchange Capital Securities
On a sale or redemption of an exchange capital security for cash, a holder
will recognize gain or loss equal to the difference between its adjusted tax
basis in the exchange capital security and the amount realized on the sale or
redemption of that exchange capital security. If the rules regarding original
issue discount do not apply, a holder's adjusted basis in an exchange capital
security generally will be its initial purchase price, and if the holder uses
an accrual method of accounting, the holder's basis will be increased by any
accrued but unpaid interest. If the rules regarding original issue discount
apply, a holder's adjusted basis in an exchange capital security generally will
be its initial purchase price increased by any original issue discount
previously included in the holder's gross income to the date of disposition and
decreased by any payments received with respect to original issue discount on
the exchange capital security. Gain or loss recognized on a sale or redemption
of an exchange capital security will be capital gain or loss. Capital gain
recognized by an individual in respect of an exchange capital security held for
more than one year as of the date of sale or redemption is subject to a maximum
federal income tax rate of 20 percent.
The exchange capital securities may trade at a price that discounts any
accrued but unpaid interest on the exchange debentures. Therefore, the amount
realized by a holder who disposes of an exchange capital security between
distribution payment dates and whose adjusted basis in the exchange capital
security has been increased by the amount of any accrued but unpaid original
issue discount (or interest) may be less than the holder's adjusted basis in
the exchange capital security. A holder's basis in an exchange capital security
could be increased either under the rules regarding original issue discount or,
if those rules do not apply, in the case of a holder that uses an accrual
method of accounting, under the accrual accounting rules (as discussed above).
In that case, the holder will recognize a capital loss. Subject to a limited
exception in the case of individual taxpayers, capital losses cannot be applied
to offset ordinary income for federal income tax purposes.
Exchange of Exchange Capital Securities
The exchange of the original capital securities for exchange capital
securities pursuant to the exchange offer should not be treated as an exchange
for federal income tax purposes and, therefore, should not be a taxable event
to holders for federal income tax purposes, because the exchange capital
securities should not be considered to differ materially in kind or extent from
the original capital securities and because the exchange will occur by
operation of the terms of the capital securities. If the exchange were treated
as an exchange for federal income tax purposes, such exchange should constitute
a recapitalization for federal income tax purposes. Accordingly, the exchange
capital securities should have the same issue price as the original capital
securities, and a holder should have the same adjusted tax basis and holding
period in the exchange original capital securities as the holder had in the
capital securities immediately before the exchange.
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Backup Withholding Tax and Information Reporting
The amount of interest, including original issue discount, accrued on
exchange capital securities held of record by U.S. persons (other than
corporations and other exempt holders) will be reported to the IRS. "Backup"
withholding at a rate of 31% will apply to payments of interest to non-exempt
U.S. persons unless the holder furnishes its taxpayer identification number in
the manner prescribed in applicable Treasury Regulations, certifies that the
number is correct, certifies as to no loss of exemption from backup withholding
and meets certain other conditions.
Payment of the proceeds from the disposition of exchange capital securities
to or through the United States office of a broker is subject to information
reporting and backup withholding unless the holder or beneficial owner
establishes an exemption from information reporting and backup withholding.
Any amount withheld from a holder under the backup withholding rules will be
allowed as a refund or credit against such holder's federal income tax
liability, provided the required information is furnished to the IRS.
It is anticipated that income on exchange capital securities will be
reported to holders on Form 1099 (or any successor form) and mailed to holders
of capital securities by January 31 following each calendar year.
The federal income tax discussion set forth above is included for general
information only and may not be applicable depending upon a holder's particular
situation. You should consult your tax adviser with respect to the tax
consequences to you of the purchase, ownership and disposition of an exchange
capital security, including the tax consequences under state, local, foreign
and other tax laws and the possible effects of changes in federal or other tax
laws.
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ERISA CONSIDERATIONS
General
In evaluating the exchange of capital securities, a fiduciary of a qualified
profit-sharing, pension or stock bonus plan, including a plan for self-employed
individuals and their employees or any other employee benefit plan subject to
the ERISA, a collective investment fund or separate account in which such plans
invest and any other investor using assets that are treated as assets of an
employee benefit plan subject to ERISA (each, a "Plan" and collectively,
"Plans") should consider:
. whether the ownership of capital securities is in accordance with the
documents and instruments governing such Plan;
. whether the ownership of capital securities is solely in the interest of
Plan participants and beneficiaries and otherwise consistent with the
fiduciary's responsibilities and in compliance with the requirements of
Part 4 of Title I of ERISA, including, in particular, the
diversification, prudence and liquidity requirements of Section 404 of
ERISA and the prohibited transaction provisions of Section 406 of ERISA
and Section 4975 of the Code;
. whether the assets of the Trust are treated as assets of the Plan; and
. the need to value the assets of the Plan annually.
In addition, the fiduciary of an individual retirement arrangement under 408
of the Code (an "IRA") considering the purchase of capital securities should
consider whether the ownership of the capital securities would result in a non-
exempt prohibited transaction under Section 4975 of the Code.
Governmental plans and certain church plans (each as defined under ERISA)
are not subject to the prohibited transaction rules. Such plans may, however,
be subject to federal, state or local laws or regulations which may affect
their investment in the capital securities. Any fiduciary of such a
governmental or church plan considering an investment in the capital securities
should determine the need for, and the availability, if necessary, of any
exemptive relief under such laws or regulations.
The fiduciary investment considerations summarized below provide a general
discussion that does not include all of the fiduciary investment considerations
relevant to Plans and, where indicated, IRAs. This summary is based on the
current provisions of ERISA and the Code and regulations and rulings
thereunder, and may be changed (perhaps adversely and with retroactive effect)
by future legislative, administrative or judicial action.
Plans and IRAs that are prospective purchasers of capital securities should
consult with and rely upon their own advisors in evaluating these matters in
light of their own particular circumstances.
Plan Asset Regulation
Under Department of Labor regulations governing what constitutes the assets
of a Plan or IRA ("plan assets") for purposes of ERISA and the related
prohibited transaction provisions of the Code (the "Plan Asset Regulation," 29
C.F.R. Sec. 2510.3-101), when a Plan or IRA acquires an "equity interest" in
another entity, and such interest does not represent a "publicly-offered
security" nor a security issued by an investment company registered under the
1940 Act, the Plan's assets include both the equity interest and an undivided
interest in each of the underlying assets of the entity, unless it is
established either that the entity is an operating company or that equity
participation in the entity by "benefit plan investors," as defined in the Plan
Asset Regulation, is not "significant." For purposes of the Plan Asset
Regulation, the Trust will be neither an investment company nor an operating
company.
For purposes of the Plan Asset Regulation, the exchange capital securities
are likely to be considered "equity interests" that are not "publicly-offered
securities." The Plan Asset Regulation provides that a beneficial interest in a
trust is an equity interest. The exchange debentures are debt and, therefore,
are not
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equity interests, but their ownership through the Trust is such that the
exchange capital securities are equity interests in the Trust. The Plan Asset
Regulation provides that an equity interest is a "publicly-offered security" if
it is publicly registered, freely transferable and part of a class of
securities that is widely held. Although the exchange capital securities will
be publicly registered, they are not likely to be considered freely
transferable or widely held. The exchange capital securities may be transferred
only in amounts that are not less than $100,000. This exceeds the $10,000
minimum investment limitation on transferability permitted under the Plan Asset
Regulation. The exchange capital securities are not expected to be held by the
100 or more investors necessary to make them widely held for purposes of the
Plan Asset Regulation.
Therefore, if exchange capital securities are held by a Plan or IRA, the
assets of the Trust will be considered plan assets of the Plan or IRA, unless
investment in the Trust by benefit plan investors is not significant. Under the
Plan Asset Regulation, equity participation by benefit plan investors will not
be considered "significant" on any date only if immediately after the most
recent acquisition of the exchange capital securities, the aggregate interest
in the exchange capital securities held by benefit plan investors will be less
than 25% of the aggregate outstanding principal amount of the exchange capital
securities. Although it is possible that the equity participation by benefit
plan investors on any date will not be "significant" for purposes of the Plan
Asset Regulation, such a result cannot be assured.
Consequently, if Plans, IRAs or investors using assets of Plans acquire the
exchange capital securities, the Trust's assets could be deemed to be "plan
assets" of such Plans and/or IRAs for purposes of the fiduciary responsibility
provisions of ERISA and the prohibited transactions rules of ERISA and the
Code. Under ERISA and the Code, any person who exercises any authority or
control respecting the management or disposition of the assets of a Plan or IRA
is considered to be a fiduciary of such Plan or IRA. The property trustee of
the Trust could therefore be considered a fiduciary of the Plans and IRAs that
invest in the exchange capital securities and be subject to the general
fiduciary requirements of ERISA in exercising its authority with respect to the
management of the assets of the Trust. However, the property trustee will have
only limited discretionary authority with respect to the Trust assets and the
remaining functions and responsibilities performed by the property trustee will
be for the most part custodial and ministerial in nature.
Prohibited Transactions
The Trust, Greater Bay Bancorp (the obligor with respect to the junior
subordinated debentures held by the Trust) and their affiliates or the property
trustee may be a party in interest or a disqualified person with respect to a
Plan or IRA investing in the exchange capital securities. Therefore, such
investment by a Plan or IRA may give rise to a prohibited transaction.
Consequently, before investing in the exchange capital securities, any person
who is, or who is acquiring such securities for, or on behalf of, a Plan or IRA
should determine that either a statutory or an administrative exemption from
the prohibited transaction rules discussed below or otherwise available is
applicable to such investment in the capital securities, or that such
investment in, or acquisition of, such securities will not result in a non-
exempt prohibited transaction.
The statutory or administrative exemptions from the prohibited transaction
rules under ERISA and the Code which may be available to a Plan or IRA, which
is investing in the exchange capital securities include the following
(collectively referred to as the "ERISA Investor Exemptions"):
. Prohibited Transaction Class Exemption ("PTCE") 90-1, regarding
investments by insurance company pooled separate accounts;
. PTCE 91-38, regarding investments by bank collective investment funds;
. PTCE 84-14, regarding transactions effected by independent qualified
professional asset managers;
. PTCE 96-23, regarding transactions effected by in-house asset managers;
and
. PTCE 95-60, regarding investments by insurance company general accounts.
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No person who is, or who in acquiring exchange capital securities is using
the assets of, a Plan or IRA may acquire exchange capital securities unless one
of the ERISA Investor Exemptions or another applicable exemption is available
to the Plan or IRA, or such acquisition or holding of the exchange capital
securities will not result in a non-exempt Prohibited Transaction. The
acquisition of the exchange capital securities by any person who is, or who in
acquiring such exchange capital securities is using the assets of, a Plan or
IRA shall be deemed to constitute a representation by such person to the
trustee of the Trust, Greater Bay Bancorp and the initial purchasers either
that:
. it is not a Plan, IRA, trustee or other person acting on behalf of a
Plan or IRA or other person or entity using the assets of any Plan or
IRA to finance such purchase; or
. such acquisition will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code for which there is no
applicable statutory or administrative exemption.
In the case of exchange capital securities delivered in certificated form,
the purchaser will be required to make such representation, in writing, to the
trustee of the Trust, Greater Bay Bancorp and the initial purchasers.
The discussion of ERISA in this prospectus is general in nature and is not
intended to be all inclusive. Any fiduciary of a plan, IRA, governmental plan
or church plan considering an investment in the exchange capital securities
should consult with its legal advisors regarding the consequences of such
investment and consider whether the Plan or IRA can make the representations
noted above.
Further, the sale of investments to Plans and IRAs is in no respect a
representation by the Trust, Greater Bay Bancorp, the property trustee, the
initial purchasers or any other person associated with the sale of the exchange
capital securities that such securities meet all relevant legal requirements
with respect to investments by Plans and IRAs generally or any particular Plan,
or that such securities are otherwise appropriate for Plans and IRAs generally
or any particular Plan.
Any purchaser proposing to acquire exchange capital securities with assets
of any Plan or IRA should consult with its counsel.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange capital securities for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange capital securities.
This prospectus, as it may be amended or supplemented from time to time, may
be used by a broker-dealer in connection with resales of exchange capital
securities received in exchange for original capital securities where such
original capital securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Trust and us have
agreed that, starting on the expiration date and ending on the close of
business on the 90th day following the expiration date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, for a period of 90 days after
the expiration date, all dealers effecting transactions in the exchange
securities may be required to deliver a prospectus.
The Trust and us will not receive any proceeds from any sale of exchange
capital securities by broker-dealers. Exchange capital securities received by
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions, in the over-the-counter market,
in negotiated transactions, through the writing of options on the exchange
capital securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker- dealer and/or the
purchasers of any such exchange capital securities. Any broker-dealer that
resells exchange capital securities that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange capital securities may be
deemed to be an underwriter within the meaning of the Securities Act and any
profit of any such resale of exchange capital securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an underwriter within the meaning
of the Securities Act.
For a period of 90 days after the expiration date, the Trust and us will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. The Trust and us have agreed to pay all expenses
incident to the exchange offer, including the expenses of one counsel for the
holders of the capital securities, other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the exchange capital
securities, including any broker-dealers, against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the exchange capital securities, the exchange guarantee and
the exchange debentures will be passed upon for us by Linda M. Iannone, Esq.,
our General Counsel. Certain matters of Delaware law relating to the validity
of the exchange capital securities will be passed upon on behalf of us and the
Trust by Richards, Layton & Finger, P.A., special Delaware counsel to the Trust
and us. Certain matters, relating to the United States federal income tax
considerations will be passed upon for us by Manatt, Phelps & Phillips, LLP,
special tax counsel to us.
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RATINGS
The exchange capital securities have been rated "BBB-" by Thomson Financial
BankWatch. The rating Thomson Financial assigned to the exchange capital
securities addresses the likelihood of your receipt of all payments to which
such exchange capital securities are entitled. The rating process addresses the
structural and legal aspects associated with the exchange capital securities.
In the event that the rating initially assigned to the exchange capital
securities is subsequently lowered for any reason, no person or entity is
obligated to provide any additional credit support or credit enhancement with
respect to the exchange capital securities.
If another rating agency were to rate the exchange capital securities, such
rating agency may assign a rating different from the rating described above.
Each security rating should be evaluated independently of any other security
rating. A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the
assigning rating organization.
EXPERTS
The supplemental consolidated balance sheets as of December 31, 1999 and
1998 of Greater Bay Bancorp and the supplemental consolidated statements of
operations, comprehensive income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1999, included in Greater
Bay Bancorp's Current Report on Form 8-K filed with the Commission on July 26,
2000, incorporated by reference in this prospectus, have been incorporated in
this prospectus in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
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AVAILABLE INFORMATION
Greater Bay Bancorp is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, referred to as the Exchange Act,
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
DC 20549 and at the Commission's regional offices at 7 World Trade Center, 13th
Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center,
500 West Madison Street, Chicago, Illinois 60661. You may also obtain copies of
such material by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, DC 20549 at prescribed rates. If available,
you may also access such information through the Commission's electronic data
gathering, analysis and retrieval system, commonly referred to as EDGAR, via
electronic means, including the Commission's home page on the Internet
(http://www.sec.gov). The common stock of Greater Bay Bancorp is traded on the
Nasdaq National Market under the symbol "GBBK." You may inspect the reports,
proxy statements and other information concerning us at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington DC 20006.
No separate financial statements of the Trust have been included in this
prospectus and no separate financial statements will be prepared in the future.
We do not consider that such financial statements would be material to holders
of the exchange capital securities offered by this prospectus because: (i) the
Trust is a newly-formed special purpose entity, (ii) has no operating history
or independent operations and (iii) is not engaged in and does not propose to
engage in any activity other than holding as trust assets our junior
subordinated debentures, issuing the capital and common securities,
collectively referred to as the trust securities, and engaging in incidental
activities. We do not expect that the Trust will file reports, proxy statements
and other information under the Exchange Act with the Commission.
This prospectus constitutes a part of a registration statement on Form S-4
filed by us and the Trust with the Commission under the Securities Act. This
prospectus does not contain all the information set forth in the registration
statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission, and reference is made to the registration
statement and to the exhibits relating to such registration statement for
further information with respect to Greater Bay Bancorp and the exchange
securities. Any statements contained in this prospectus concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
registration statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents that we have filed with the Commission are
incorporated into this prospectus by reference:
. Greater Bay Bancorp's Annual Report on Form 10-K for the year ended
December 31, 1999 (except for Part II, Items 6, 7, 7A and 8);
. Greater Bay Bancorp's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2000 and June 30, 2000 (except for Part I, Items 1, 2
and 3);
. Greater Bay Bancorp's Current Reports on Form 8-K filed on February 1,
2000; February 3, 2000; February 4, 2000; March 22, 2000; March 24,
2000; March 31, 2000; April 6, 2000; April 20, 2000; May 18, 2000; May
18, 2000; July 13, 2000; July 24, 2000; July 26, 2000 and August 7,
2000.
All documents subsequently filed by Greater Bay Bancorp pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
and prior to the termination of the offering of the exchange capital securities
offered by this prospectus shall be deemed to be incorporated by reference into
this prospectus and to be a part of this prospectus from the date of filing of
such document. Any statement contained in this prospectus or in a document
incorporated or deemed to be incorporated by reference in this prospectus shall
be deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
You may obtain a copy of our filings with the Commission at no cost, by
writing or telephoning us at the following address:
Greater Bay Bancorp
Attention: Finance Department
2860 West Bayshore Road
Palo Alto, California 94303
(650) 812-8200
When we refer to this prospectus, we mean not only this prospectus but also
any documents which are incorporated or deemed to be incorporated in this
prospectus by reference. You should rely only on the information incorporated
by reference or provided in this prospectus or any supplement. We have not
authorized anyone else to provide you with additional or different information.
This prospectus is used to offer and sell the exchange capital securities
referred to in this prospectus, and only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of the date of this prospectus.
80
<PAGE>
A WARNING ABOUT FORWARD-LOOKING INFORMATION
Some of the information presented or incorporated by reference into this
prospectus contains "forward-looking" statements, and may be identified by the
use of such words as "believe," "expect," "anticipate," "should," "planned,"
"estimated" and "potential." Examples of forward-looking statements include,
but are not limited to, estimates with respect to our financial condition,
results of operations and business that are subject to various factors which
could cause actual results to differ materially from these estimates. These
factors include, but are not limited to:
. expected cost savings from the recently consummated and pending mergers
may not be fully realized or realized within the expected time frame;
. revenues following the recently consummated and pending mergers may be
lower than expected, or deposit attrition, operating costs or customer
loss and business disruption following the mergers may be greater than
expected;
. competitive pressures among depository and other financial institutions
may increase significantly;
. costs or difficulties related to the integration of the businesses of
Greater Bay Bancorp and entities it has acquired or proposes to acquire
may be greater than expected;
. changes in the interest rate environment may reduce margins;
. general economic or business conditions, either nationally or in
California, may be less favorable than expected, resulting in, among
other things, a deterioration in credit quality or a reduced demand for
credit;
. legislative or regulatory changes, including changes in accounting
standards, may adversely affect the businesses in which we are engaged;
. changes may occur in the securities markets; and
. certain of our competitors have greater financial resources to develop
products that may enable such competitors to compete more successfully
than us.
Our actual results could vary materially from the future results covered in
our forward-looking statements. The statements in the "Risk Factors" section of
this prospectus are cautionary statements identifying important factors,
including certain risks and uncertainties, that could cause our results to vary
materially from the future results covered in such forward-looking statements.
Other factors, such as the general state of the United States economy, could
also cause actual results to vary materially from the future results covered in
such forward-looking statements. We disclaim any obligation to announce
publicly future events or developments that affect the forward-looking
statements in this prospectus.
81
<PAGE>
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You should rely only on the information contained in this prospectus or to
which we have referred you. We have not authorized anyone to provide you with
any additional or different information. This prospectus does not constitute
an offer to sell, or the solicitation of an offer to buy, any of the
securities offered hereby to any person in any jurisdiction in which such
offer or solicitation would be unlawful. The affairs of Greater Bay Bancorp or
the Trust may change after the date of this prospectus. Delivery of this
prospectus and the sales of securities made hereunder does not mean otherwise.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 3
Summary Selected Consolidated Financial Information...................... 13
Recent Events............................................................ 15
Risk Factors............................................................. 17
Use of Proceeds.......................................................... 24
Regulatory Capital Ratios................................................ 24
Accounting Treatment..................................................... 24
Capitalization........................................................... 25
Greater Bay Bancorp...................................................... 26
GBB Capital IV........................................................... 29
The Exchange Offer....................................................... 30
Description of Exchange Capital Securities............................... 40
Description of Exchange Debentures....................................... 53
Description of Exchange Guarantee........................................ 64
Description of Original Securities....................................... 67
Relationship among the Exchange Capital Securities, the Exchange
Debentures and the Exchange Guarantee................................... 68
Material Federal Income Tax Consequences................................. 70
Erisa Considerations..................................................... 74
Plan of Distribution..................................................... 77
Legal Matters............................................................ 77
Ratings.................................................................. 78
Experts.................................................................. 78
Available Information.................................................... 79
Incorporation of Certain Documents by Reference.......................... 80
A Warning About Forward-Looking Information.............................. 81
</TABLE>
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$41,000,000
GBB Capital IV
Offer to Exchange its
10.75% Capital Securities, Series B
(liquidation amount $1,000
per exchange capital security)
which have been registered under the
Securities Act of 1933
for any and all
of its outstanding
10.75% Capital Securities, Series A
(liquidation amount $1,000
per original capital security)
Fully and unconditionally
guaranteed, as described in
this prospectus, by
[LOGO OF GREATER BAY BANCORP]
----------------
PROSPECTUS
----------------
, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Article Five of Greater Bay's articles of incorporation provides that
Greater Bay shall eliminate the liability of its directors for monetary damages
to the fullest extent permissible under California law. Article Five also
provides for the indemnification of agents (as defined in Section 317 of the
California General Corporation Law) of Greater Bay. If agents of Greater Bay
breach a duty to Greater Bay and its shareholders, then Article Five authorizes
Greater Bay, to the extent permissible under California Law, to indemnify such
agents in excess of the indemnification expressly permitted by such Section
317.
Section 317 sets forth the provisions pertaining to the indemnification of
corporate "agents." For purposes of this law, an agent is any person who is or
was a director, officer, employee or other agent of a corporation, or is or was
serving at the request of Greater Bay in such capacity with respect to any
other corporation, partnership, joint venture, trust or other enterprise.
Section 317 mandates Greater Bay's indemnification of agents where the agent's
defense is successful on the merits. In other cases, Section 317 allows Greater
Bay to indemnify agents for expenses (including amounts paid to defend, settle
or otherwise dispose of a threatened or pending action) if the indemnification
is authorized by (1) a majority vote of a quorum of Greater Bay's Board of
Directors consisting of directors who are not party to the proceedings;
(2)approval of the shareholders, with the shares owned by the person to be
indemnified not being entitled to vote thereon; or (3) the court in which the
proceeding is or was pending upon application by certain designated parties.
Under certain circumstances, Greater Bay can indemnify an agent even when the
agent is found liable. Section 317 also allows Greater Bay to advance expenses
to its agents for certain actions upon receiving an undertaking by the agent
that he or she will reimburse Greater Bay if the agent is found liable. Greater
Bay has entered into indemnification agreements with its directors and certain
of its officers substantially to the foregoing effect. Greater Bay also
maintains directors and officers liability insurance.
To the extent that indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Greater Bay, pursuant to the foregoing provisions or otherwise, Greater Bay
understands that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. If a claim for indemnification against such liabilities (other
than the payment by Greater Bay of expenses incurred or paid by a director,
officer or controlling person of Greater Bay in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Greater
Bay will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against a public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
Item 21. Exhibits and Financial Statement Schedules.
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) List of Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.1 Amended and Restated Declaration of Trust of GBB Capital IV dated as
of May 19, 2000(1)
4.2 Form of Common Securities Certificate of GBB Capital IV (filed as
Exhibit A-2 to Exhibit 4.1 herein)
4.3 Form of Exchange Capital Security Certificate for GBB Capital IV
(filed as Exhibit A-1 to Exhibit 4.1 herein)
4.4 Indenture, dated as of May 19, 2000, between Greater Bay Bancorp and
Wilmington Trust Company, as trustee(1)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.5 Form of Certificate of Exchange Junior Subordinated Debenture (filed
as Exhibit A to Exhibit 4.4 herein)
4.6 Common Securities Guarantee Agreement, dated as of May 19, 2000,
between Greater Bay Bancorp and Wilmington Trust Company, as
trustee(1)
4.7 Series A Capital Securities Guarantee Agreement, dated as of May 19,
2000, between Greater Bay Bancorp and Wilmington Trust Company, as
trustee(1)
4.8 Form of Series B Capital Securities Guarantee Agreement between
Greater Bay Bancorp and Wilmington Trust Company, as trustee
4.9 Liquidated Damages Agreement, dated as of May 16, 2000, by and among
GBB Capital IV, Greater Bay Bancorp and Sandler O'Neill and Partners,
L.P.(1)
4.10 Registration Rights Agreement, dated as of May 16, 2000, by and among
GBB Capital IV, Greater Bay Bancorp and Sandler O'Neill and Partners,
L.P.(1)
4.11 Securities Purchase Agreement, dated as of March 22, 2000, by and
between Greater Bay Bancorp and the investors identified therein(2)
4.12 Registration Rights Agreement dated as of March 23, 2000, by and
between Greater Bay Bancorp and the investors identified therein(2)
4.13 Amended and Restated Declaration of Trust of GBB Capital III, dated as
of March 23, 2000(2)
4.14 Indenture, dated as of March 23, 2000, between Greater Bay Bancorp and
The Bank of New York, as trustee(2)
4.15 Guarantee Agreement, dated as of March 23, 2000, by and between
Greater Bay Bancorp and The Bank of New York, as trustee(2)
4.16 Rights Agreement(5)
4.17 Junior Subordinated Indenture dated as of March 31, 1997 between
Greater Bay Bancorp and Wilmington Trust Company, as Trustee(6)
4.18 Officers' Certificate and Company Order, dated March 31, 1997(6)
4.19 Certificate of Trust of GBB Capital I(7)
4.20 Trust Agreement of GBB Capital I dated as of February 28, 1997(7)
4.21 Amended and Restated Trust Agreement of GBB Capital I, among Greater
Bay Bancorp, Wilmington Trust Company and the Administrative Trustees
named therein dated as of March 31, 1997(6)
4.22 Successor Administrative Trustee and First Amendment to Amended and
Restated Trust Agreement(4)
4.23 Trust Preferred Certificate of GBB Capital I(6)
4.24 Common Securities Certificate of GBB Capital I(6)
4.25 Guarantee Agreement between Greater Bay Bancorp and Wilmington Trust
Company, dated as of March 31, 1997(6)
4.26 Agreement as to Expenses and Liabilities, dated as of March 31,
1997(6)
4.27 Form of Subordinated Debentures(8)
4.28 Supplemental Debenture Agreement of Cupertino National Bancorp dated
as of November 22, 1996(7)
4.29 Supplemental Debenture Agreement dated November 27, 1996 between
Cupertino National Bancorp and Mid-Peninsula Bancorp(7)
4.30 Supplemental Debenture Agreement, dated as of March 27, 1997(6)
4.31 Indenture between Greater Bay Bancorp and Wilmington Trust Company, as
Debenture Trustee, dated as of August 12, 1998(9)
4.32 Form of Exchange Junior Subordinated Debentures (filed as Exhibit A to
Exhibit 4.31 hereto)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.33 Certificate of Trust of GBB Capital II, dated as of May 18, 1998(9)
4.34 Amended and Restated Trust Agreement of GBB Capital II, among Greater
Bay Bancorp, Wilmington Trust Company and the Administrative Trustees
named therein dated as of August 12, 1998(9)
4.35 Form of Exchange Capital Security Certificate (filed as Exhibit A-1 to
Exhibit 4.31 hereto)
4.36 Common Securities Guarantee Agreement of Greater Bay Bancorp, dated as
of August 12, 1998(9)
4.37 Series B Capital Securities Guarantee Agreement of Greater Bay Bancorp
and Wilmington Trust Company dated as of November 27, 1998(4)
4.38 Liquidated Damages Agreement among Greater Bay Bancorp, GBB Capital
II, and Sandler O'Neill and Partners, L.P., dated as of August 7,
1998(9)
4.39 Registration Rights Agreement between Greater Bay Bancorp and The Leo
K.W. Lum PRB Revocable Trust dated May 8, 1998(10)
4.40 Securities Purchase Agreement, dated as of December 21, 1999, between
Greater Bay Bancorp and the investors identified therein(11)
4.41 Registration Rights Agreement, dated as of December 22, 1999, between
Greater Bay Bancorp and the investors identified therein(11)
5.1 Opinion of Linda M. Iannone, General Counsel of Greater Bay Bancorp,
as to the validity of the securities registered hereunder (including
her consent)
5.2 Opinion of Richards, Layton & Finger P.A. as to the validity of the
Exchange Capital Securities (including the consent of that firm)
8.1 Opinion of Manatt, Phelps & Phillips, LLP as to certain federal income
tax matters (including the consent of that firm)
12.1 Computation of ratio of earnings to combined fixed charges (excluding
interest on deposits)
23.1 Consent of Linda M. Iannone (included as part of Exhibit 5.1)
23.2 Consent of Richards, Layton & Finger, P.A. (included as part of
Exhibit 5.2)
23.3 Consent of Manatt, Phelps & Phillips, LLP (included as part of Exhibit
8.1)
23.4 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included in the signature page of this registration
statement)
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee for the Exchange Capital Securities of GBB Capital IV
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee for the Exchange Junior Subordinated Debentures of Greater
Bay Bancorp (Exhibits A-D filed as Exhibits A-D of Exhibit 25.1
hereto)
25.3 Form T-1 Statement of Eligibility of Wilmington Trust Company to act
as trustee for the Greater Bay Bancorp Exchange Guarantee with respect
to Exchange Capital Securities (Exhibits A-D filed as Exhibits A-D of
Exhibit 25.1 hereto)
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement of GBB Capital IV and Wilmington
Trust Company
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.5 Form of Client Letter
</TABLE>
--------
1. Incorporated by reference from Greater Bay Bancorp's Quarterly Report on
Form 10-Q filed with the SEC on August 1, 2000.
2. Incorporated by reference from Greater Bay Bancorp's Quarterly Report on
Form 10-Q filed with the SEC on May 12, 2000.
II-3
<PAGE>
3. Incorporated by reference from Greater Bay Bancorp's Current Report on
Form 8-K filed with the SEC on December 16, 1999.
4. Incorporated by reference from Greater Bay Bancorp's Annual Report on Form
10-K filed with the SEC on February 17, 1999.
5. Incorporated by reference from Greater Bay Bancorp's Form 8-A12G filed
with the SEC on November 25, 1998.
6. Incorporated by reference from Greater Bay Bancorp's Current Report on
Form 8-K dated June 5, 1997.
7. Incorporated by reference from Greater Bay Bancorp's Registration
Statement on Form S-1 (File No. 333- 22783) filed with the SEC on March 5,
1997.
8. Incorporated herein by reference from Exhibit 1 of Cupertino National
Bancorp's Form 8-K (FileNo. 0-18015) filed with the SEC on October 25,
1995
9. Incorporated by reference from Greater Bay Bancorp's Current Report on
Form 8-K filed with the SEC on August 28, 1998.
10. Incorporated by reference from Greater Bay Bancorp's Current Report on
Form 8-K filed with the SEC on May 20, 1998.
11. Incorporated by reference from Greater Bay Bancorp's Current Report on
Form 8-K filed with the SEC on December 28, 1999.
Item 22. Undertakings.
Each undersigned registrant hereby undertakes:
(A) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(B) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(C) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, each of the
registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrants have duly caused this Registration Statement on Form S-4 to be
signed on their behalf by the undersigned, thereunto duly authorized, in the
City of Palo Alto, California on September 11, 2000.
<TABLE>
<S> <C>
Greater Bay Bancorp
/s/ David L. Kalkbrenner
By: _______________________________________
David L. Kalkbrenner
President and Chief Executive Offier
GBB Capital IV
/s/ Steven C. Smith
By: _______________________________________
Steven C. Smith
Administrative Trustee
/s/ Shawn E. Saunders
By: _______________________________________
Shawn E. Saunders
Administrative Trustee
/s/ Mark T. Eschen
By: _______________________________________
Mark T. Eschen
Administrative Trustee
</TABLE>
II-5
<PAGE>
POWER OF ATTORNEY
We, the undersigned directors and officers of Greater Bay Bancorp, do hereby
severally constitute and appoint David L. Kalkbrenner and Steven C. Smith our
true and lawful attorneys-in-fact and agents, each acting alone with full
powers of substitution and resubstitution, to do any and all things and acts in
our names in the capacities indicated below and to execute any all instruments
for us and in our names in the capacities indicated below which said person may
deem necessary or advisable to enable Greater Bay Bancorp to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the offering
contemplated by this Registration Statement on Form S-4, including
specifically, but not limited to, power and authority to sign for us or any of
us in our names in the capacities indicated below and any and all amendments,
including post-effective amendments to this Registration Statement and any Rule
462(b) registration statement or amendments thereto; and we hereby ratify and
confirm all that said person shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ David L. Kalkbrenner President and Chief September 11,
___________________________________________ Executive Officer 2000
David L. Kalkbrenner (Principal Executive
Officer)
/s/ Steven C. Smith Executive Vice President, September 11,
___________________________________________ Chief Administrative 2000
Steven C. Smith Officer and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
/s/ George R. Corey Director September 11,
___________________________________________ 2000
George R. Corey
/s/ John M. Gatto Director September 11,
___________________________________________ 2000
John M. Gatto
/s/ John J. Houslow Director September 11,
___________________________________________ 2000
John J. Houslow
/s/ James E. Jackson Director September 11,
___________________________________________ 2000
James E. Jackson
/s/ Stanley A. Kangas Director September 11,
___________________________________________ 2000
Stanley A. Kangas
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Rex D. Lindsay Director September 11,
___________________________________________ 2000
Rex D. Lindsay
/s/ George M. Marcus Director September 11,
___________________________________________ 2000
George M. Marcus
/s/ Duncan L. Matteson Director September 11,
___________________________________________ 2000
Duncan L. Matteson
/s/ Rebecca Q. Morgan Director September 11,
___________________________________________ 2000
Rebecca Q. Morgan
/s/ Glen McLaughlin Director September 11,
___________________________________________ 2000
Glen McLaughlin
/s/ Dick J. Randall Director September 11,
___________________________________________ 2000
Dick J. Randall
Director
___________________________________________
Donald H. Seiler
/s/ Warren R. Thoits Director September 11,
___________________________________________ 2000
Warren R. Thoits
/s/ James C. Thompson Director September 11,
___________________________________________ 2000
James C. Thompson
/s/ Thaddeus J. Whalen, Jr. Director September 11,
___________________________________________ 2000
Thaddeus J. Whalen
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
4.1 Amended and Restated Declaration of Trust of GBB Capital IV dated
as of May 19, 2000(1)
4.2 Form of Common Securities Certificate of GBB Capital IV (filed as
Exhibit A-2 to Exhibit 4.1 herein)
4.3 Form of Exchange Capital Security Certificate for GBB Capital IV
(filed as Exhibit A-1 to Exhibit 4.1 herein)
4.4 Indenture, dated as of May 19, 2000, between Greater Bay Bancorp
and Wilmington Trust Company, as trustee(1)
4.5 Form of Certificate of Exchange Junior Subordinated Debenture
(filed as Exhibit A to Exhibit 4.4 herein)
4.6 Common Securities Guarantee Agreement, dated as of May 19, 2000,
between Greater Bay Bancorp and Wilmington Trust Company, as
trustee(1)
4.7 Series A Capital Securities Guarantee Agreement, dated as of May
19, 2000, between Greater Bay Bancorp and Wilmington Trust
Company, as trustee(1)
4.8 Form of Series B Capital Securities Guarantee Agreement between
Greater Bay Bancorp and Wilmington Trust Company, as trustee
4.9 Liquidated Damages Agreement, dated as of May 16, 2000, by and
among GBB Capital IV, Greater Bay Bancorp and Sandler O'Neill and
Partners, L.P.(1)
4.10 Registration Rights Agreement, dated as of May 16, 2000, by and
among GBB Capital IV, Greater Bay Bancorp and Sandler O'Neill and
Partners, L.P.(1)
4.11 Securities Purchase Agreement, dated as of March 22, 2000, by and
between Greater Bay Bancorp and the investors identified
therein(2)
4.12 Registration Rights Agreement dated as of March 23, 2000, by and
between Greater Bay Bancorp and the investors identified
therein(2)
4.13 Amended and Restated Declaration of Trust of GBB Capital III,
dated as of March 23, 2000(2)
4.14 Indenture, dated as of March 23, 2000, between Greater Bay Bancorp
and The Bank of New York, as trustee(2)
4.15 Guarantee Agreement, dated as of March 23, 2000, by and between
Greater Bay Bancorp and The Bank of New York, as trustee(2)
4.16 Rights Agreement(5)
4.17 Junior Subordinated Indenture dated as of March 31, 1997 between
Greater Bay Bancorp and Wilmington Trust Company, as Trustee(6)
4.18 Officers' Certificate and Company Order, dated March 31, 1997(6)
4.19 Certificate of Trust of GBB Capital I(7)
4.20 Trust Agreement of GBB Capital I dated as of February 28, 1997(7)
4.21 Amended and Restated Trust Agreement of GBB Capital I, among
Greater Bay Bancorp, Wilmington Trust Company and the
Administrative Trustees named therein dated as of March 31,
1997(6)
4.22 Successor Administrative Trustee and First Amendment to Amended
and Restated Trust Agreement(4)
4.23 Trust Preferred Certificate of GBB Capital I(6)
4.24 Common Securities Certificate of GBB Capital I(6)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
4.25 Guarantee Agreement between Greater Bay Bancorp and Wilmington
Trust Company, dated as of March 31, 1997(6)
4.26 Agreement as to Expenses and Liabilities, dated as of March 31,
1997(6)
4.27 Form of Subordinated Debentures(8)
4.28 Supplemental Debenture Agreement of Cupertino National Bancorp
dated as of November 22, 1996(7)
4.29 Supplemental Debenture Agreement dated November 27, 1996 between
Cupertino National Bancorp and Mid-Peninsula Bancorp(7)
4.30 Supplemental Debenture Agreement, dated as of March 27, 1997(6)
4.31 Indenture between Greater Bay Bancorp and Wilmington Trust
Company, as Debenture Trustee, dated as of August 12, 1998(9)
4.32 Form of Exchange Junior Subordinated Debentures (filed as Exhibit
A to Exhibit 4.31 hereto)
4.33 Certificate of Trust of GBB Capital II, dated as of May 18,
1998(9)
4.34 Amended and Restated Trust Agreement of GBB Capital II, among
Greater Bay Bancorp, Wilmington Trust Company and the
Administrative Trustees named therein dated as of
August 12, 1998(9)
4.35 Form of Exchange Capital Security Certificate (filed as Exhibit A-
1 to Exhibit 4.31 hereto)
4.36 Common Securities Guarantee Agreement of Greater Bay Bancorp,
dated as of August 12, 1998(9)
4.37 Series B Capital Securities Guarantee Agreement of Greater Bay
Bancorp and Wilmington Trust Company dated as of November 27,
1998(4)
4.38 Liquidated Damages Agreement among Greater Bay Bancorp, GBB
Capital II, and Sandler O'Neill and Partners, L.P., dated as of
August 7, 1998(9)
4.39 Registration Rights Agreement between Greater Bay Bancorp and The
Leo K.W. Lum PRB Revocable Trust dated May 8, 1998(10)
4.40 Securities Purchase Agreement, dated as of December 21, 1999,
between Greater Bay Bancorp and the investors identified
therein(11)
4.41 Registration Rights Agreement, dated as of December 22, 1999,
between Greater Bay Bancorp and the investors identified
therein(11)
5.1 Opinion of Linda M. Iannone, General Counsel of Greater Bay
Bancorp, as to the validity of the securities registered hereunder
(including her consent)
5.2 Opinion of Richards, Layton & Finger P.A. as to the validity of
the Exchange Capital Securities (including the consent of that
firm)
8.1 Opinion of Manatt, Phelps & Phillips, LLP as to certain federal
income tax matters (including the consent of that firm)
12.1 Computation of ratio of earnings to combined fixed charges
(excluding interest on deposits)
23.1 Consent of Linda M. Iannone (included as part of Exhibit 5.1)
23.2 Consent of Richards, Layton & Finger, P.A. (included as part of
Exhibit 5.2)
23.3 Consent of Manatt, Phelps & Phillips, LLP (included as part of
Exhibit 8.1)
23.4 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included in the signature page of this
registration statement)
25.1 Form T-1 Statement of Eligibility of Wilmington Trust Company to
act as trustee for the Exchange Capital Securities of GBB Capital
IV
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to
act as trustee for the Exchange Junior Subordinated Debentures of
Greater Bay Bancorp (Exhibits A-D filed as Exhibits A-D of Exhibit
25.1 hereto)
25.3 Form T-1 Statement of Eligibility of Wilmington Trust Company to
act as trustee for the Greater Bay Bancorp Exchange Guarantee with
respect to Exchange Capital Securities (Exhibits A-D filed as
Exhibits A-D of Exhibit 25.1 hereto)
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement of GBB Capital IV and Wilmington
Trust Company
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.5 Form of Client Letter
</TABLE>
--------
1. Incorporated by reference from Greater Bay Bancorp's Quarterly Report on
Form 10-Q filed with the SEC on August 1, 2000.
2. Incorporated by reference from Greater Bay Bancorp's Quarterly Report on
Form 10-Q filed with the SEC on May 12, 2000.
3. Incorporated by reference from Greater Bay Bancorp's Current Report on Form
8-K filed with the SEC on December 16, 1999.
4. Incorporated by reference from Greater Bay Bancorp's Annual Report on Form
10-K filed with the SEC on February 17, 1999.
5. Incorporated by reference from Greater Bay Bancorp's Form 8-A12G filed with
the SEC on November 25, 1998.
6. Incorporated by reference from Greater Bay Bancorp's Current Report on Form
8-K dated June 5, 1997.
7. Incorporated by reference from Greater Bay Bancorp's Registration Statement
on Form S-1 (File No. 333-22783) filed with the SEC on March 5, 1997.
8. Incorporated herein by reference from Exhibit 1 of Cupertino National
Bancorp's Form 8-K (File No. 0-18015) filed with the SEC on October 25,
1995
9. Incorporated by reference from Greater Bay Bancorp's Current Report on Form
8-K filed with the SEC on August 28, 1998.
10. Incorporated by reference from Greater Bay Bancorp's Current Report on
Form 8-K filed with the SEC on May 20, 1998.
11. Incorporated by reference from Greater Bay Bancorp's Current Report on Form
8-K filed with the SEC on December 28, 1999.
