SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
GREATER BAY BANCORP
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(Name of Registrant as Specified In Its Charter)
NA
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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GREATER BAY BANCORP
_______________________
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
_______________________
DATE: Tuesday, May 15, 2001
TIME: 10:30 a.m.
PLACE: Hotel Sofitel
223 Twin Dolphin Drive
Redwood City, California 94065
April 13, 2001
Dear Shareholder:
It is my pleasure to invite you to Greater Bay Bancorp's 2001 Annual
Meeting of Shareholders.
We will hold the meeting on Tuesday, May 15, 2001, at 10:30 a.m., at the
Hotel Sofitel, 223 Twin Dolphin Drive, Redwood City, California 94065. In
addition to the formal items of business, I will review the major developments
of 2000, answer your questions and discuss our future prospects.
This booklet includes the Notice of Annual Meeting and the Proxy Statement.
The Proxy Statement describes the business that we will conduct at the meeting
and provides information about Greater Bay Bancorp.
Your vote is important. Whether or not you plan to attend the meeting,
please complete, date, sign and return the enclosed proxy card promptly. If you
attend the meeting and prefer to vote in person, you may do so.
We look forward to seeing you at the meeting.
Sincerely,
/s/ David L. Kalkbrenner
David L. Kalkbrenner
President and Chief Executive Officer
GREATER BAY BANCORP
-----------------
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
-----------------
Date: Tuesday, May 15, 2001
Time: 10:30 a.m.
Place: Hotel Sofitel
223 Twin Dolphin Drive
Redwood City, California 94065
Dear Shareholders:
At our 2001 Annual Meeting, we will ask you to:
. Elect five directors to each serve for a term of three years;
. Approve a Bylaws amendment increasing the range of authorized
directors;
. Ratify the selection of PricewaterhouseCoopers L.L.P. as our
independent accountants for 2001; and
. Transact any other business that may properly be presented at the
Annual Meeting.
If you were a shareholder of record at the close of business on March 28,
2001, you may vote at the Annual Meeting.
Article IV, Section 2 of our Bylaws provides for the nomination of
directors in the following manner:
"Nomination for election of directors may be made by the Board of Directors
or by any holder of any outstanding class of capital stock of the corporation
entitled to vote for the election of directors. Notice of intention to make any
nominations shall be made in writing and shall be delivered or mailed to the
President of the corporation not less than twenty-one (21) days nor more than
sixty (60) days prior to any meeting of shareholders called for the election of
directors; provided, however, that if less than twenty-one (21) days' notice of
the meeting is given to shareholders, such notice of intention to nominate shall
be mailed or delivered to the President of the corporation not later than the
close of business on the tenth (10th) day following the day on which the notice
of meeting was mailed; provided further, that if notice of such meeting is sent
by third class mail (if permitted by law), no notice of intention to make
nominations shall be required. Such notification shall contain the following
information to the extent known to the notifying shareholder:
(a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee;
(c) the number of shares of capital stock of the corporation owned by each
proposed nominee;
(d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the corporation owned by the
notifying shareholder.
Nominations not made in accordance herewith may, in the discretion of the
Chairman of the meeting, be disregarded and upon the Chairman's instructions the
inspectors of election can disregard all votes cast for each such nominee. A
copy of this paragraph shall be set forth in a notice to shareholders of any
meeting at which directors are to be elected."
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE. WE URGE YOU TO SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN
WITHDRAW YOUR PROXY AND VOTE IN PERSON. IN ORDER TO FACILITATE THE PROVIDING OF
ADEQUATE ACCOMMODATIONS, PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING.
By Order of the Board of Directors
/s/ Linda M. Iannone
Linda M. Iannone
Corporate Secretary
Palo Alto, California
Dated: April 13, 2001
TABLE OF CONTENTS
Page
----
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING.......................................................... 1
Why Did You Send Me this Proxy Statement?........................................................... 1
Who is Entitled to Vote?............................................................................ 1
What Constitutes a Quorum?.......................................................................... 1
How Many Votes Do I Have?........................................................................... 1
How Do I Vote By Proxy?............................................................................. 1
May I Change My Vote After I Return My Proxy?....................................................... 2
How Do I Vote in Person?............................................................................ 2
What Vote is Required to Approve Each Proposal?..................................................... 2
Proposal 1:......................................................................................... 2
Proposal 2:......................................................................................... 2
Proposal 3:......................................................................................... 2
What are the Costs of Soliciting these Proxies?..................................................... 2
How Do I Obtain an Annual Report on Form 10-K?...................................................... 3
INFORMATION ABOUT GREATER BAY BANCORP STOCK OWNERSHIP.................................................... 3
Does Anyone Own 5% or More of Greater Bay Bancorp's Common Stock?................................... 3
How Much of Greater Bay Bancorp's Common Stock is Owned by Directors and Executive Officers?........ 4
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS....................................................... 6
The Board of Directors.............................................................................. 6
The Committees of the Board......................................................................... 6
Audit Committee Report.............................................................................. 6
Compensation Committee Interlocks and Insider Participation......................................... 7
Section 16(a) Beneficial Ownership Reporting Compliance by Directors and Executive Officers......... 8
How We Compensate Directors......................................................................... 8
Certain Relationships and Related Transactions...................................................... 8
Executive Officers.................................................................................. 9
How We Compensate Executive Officers................................................................ 11
Employment Contracts, Change in Control Arrangements and Termination of Employment.................. 14
Executive Committee's Report on Executive Compensation.............................................. 16
The Report.......................................................................................... 16
Performance Graph................................................................................... 19
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD......................................................... 20
Proposal 1: Elect Five Directors.................................................................... 20
Proposal 2: Approve Amendment to Bylaws............................................................. 22
Proposal 3: Ratify Selection of Independent Public Accountants for 2001............................. 23
OTHER BUSINESS........................................................................................... 23
INFORMATION ABOUT SHAREHOLDER PROPOSALS.................................................................. 23
APPENDIX A CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF GREATER BAY BANCORP............... A-1
i
PROXY STATEMENT FOR GREATER BAY BANCORP
2001 ANNUAL MEETING OF SHAREHOLDERS
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why Did You Send Me this Proxy Statement?
We sent you this Proxy Statement and the enclosed proxy card because
our Board of Directors is soliciting your proxy to vote at the 2001 Annual
Meeting of Shareholders. This Proxy Statement summarizes the information you
need to know to cast an informed vote at the Annual Meeting. However, you do not
need to attend the Annual Meeting to vote your shares. Instead, you may simply
complete, sign and return the enclosed proxy card.
Along with this Proxy Statement, we are also sending you the Greater
Bay Bancorp 2000 Summary Annual Report and Annual Report on Form 10-K for the
year ended December 31, 2000, which includes our financial statements. Greater
Bay Bancorp is also referred to in this Proxy Statement as the "Company."
Who is Entitled to Vote?
We will begin sending this Proxy Statement, the attached Notice of
Annual Meeting and the enclosed proxy card on or about April 4, 2001 to all
shareholders entitled to vote. Shareholders who were the record owners of
Greater Bay Bancorp Common Stock at the close of business on March 28, 2001 are
entitled to vote. On this record date, there were 42,489,854 shares of Greater
Bay Bancorp Common Stock outstanding. Greater Bay Bancorp Common Stock is our
only class of outstanding stock.
What Constitutes a Quorum?
A majority of the outstanding shares of Greater Bay Bancorp Common
Stock entitled to vote at the Annual Meeting must be present, in person or by
proxy, in order to constitute a quorum. We can only conduct the business of the
Annual Meeting if a quorum has been established. We will include proxies marked
as abstentions and broker non-votes in determining the number of shares present
at the Annual Meeting.
How Many Votes Do I Have?
Each share of Greater Bay Bancorp Common Stock that you owned at the
close of business on March 28, 2001 entitles you to one vote. The proxy card
indicates the number of votes that you have.
How Do I Vote By Proxy?
Whether or not you plan to attend the Annual Meeting, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
the Annual Meeting and vote.
If you properly fill in your proxy card and send it to us in time to
vote, your "proxy" (one of the individuals named on your proxy card) will vote
your shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares as recommended by the Board
of Directors as follows:
. "FOR" the election of all five nominees for director
. "FOR" approval of the Bylaws amendment to increase the range
of authorized directors
. "FOR" ratification of the selection of independent accountants
for 2001.
If any other matter is presented, your proxy will vote in accordance
with the recommendation of the Board of Directors, or, if no recommendation is
given, in accordance with his or her best judgment. At the time this Proxy
Statement went to press, we knew of no matters which needed to be acted on at
the Annual Meeting, other than those discussed in this Proxy Statement.
1
If you hold your shares of Greater Bay Bancorp Common Stock in "street
name" (that is, through a broker or other nominee33 as to how to vote such
shares of common stock, your broker or nominee may, in its discretion, vote your
shares "FOR" the election of the nominees for directors set forth herein, "FOR"
the Bylaws amendment to increase the range of authorized directors and "FOR"
ratification of the appointment of pricewaterhouse Coopers L.L.P. as our
independent public accountants for the year ending December 31, 2001.
May I Change My Vote After I Return My Proxy?
Yes. If you fill out and return the enclosed proxy card, you may change
your vote at any time before the vote is conducted at the Annual Meeting. You
may change your vote in any one of three ways:
. You may send to the Company's Corporate Secretary another completed
proxy card with a later date.
. you may notify the Company's Corporate Secretary in writing before
the Annual Meeting that you have revoked your proxy.
. You may attend the Annual Meeting and vote in person.
How Do I Vote in Person?
If you plan to attend the Annual Meeting and vote in person, we will
give you a ballot form when you arrive. However, if your shares are held in the
name of your broker, bank or other nominee, you must bring a power of attorney
from your nominee in order to vote at the Annual Meeting.
What Vote is Required to Approve Each Proposal?
Proposal 1:
Elect Five Directors The five nominees for director who receive the most
votes will be elected. So, if you do not vote for a
particular nominee, or you indicate "WITHHOLD
AUTHORITY" to vote for a particular nominee on your
proxy card, your vote will not count either "for" or
"against" the nominee. Our Articles of Incorporation
do not permit cumulative voting.
Proposal 2:
Approve Bylaws Amendment The affirmative vote of a majority of the
outstanding shares is required to approve the
proposal. So, if you "ABSTAIN" from voting, it has
the effect of a vote against this proposal.
Proposal 3:
Ratify Selection of
Independent Public The affirmative vote of a majority of the votes cast
Accountants at the Annual Meeting on this proposal is required to
ratify the selection of independent public
accountants. So, if you "ABSTAIN" from voting, it has
no effect on the outcome of this proposal.
What are the Costs of Soliciting these Proxies?
We will pay all the costs of soliciting these proxies. In addition to
mailing proxy soliciting material, our directors, officers and employees also
may solicit proxies in person, by telephone or by other electronic means of
communication for which they will receive no compensation. We will ask banks,
brokers and other institutions, nominees and fiduciaries to forward the proxy
materials to their principals and to obtain authority to execute proxies. We
will then reimburse them for their reasonable expenses. We have hired Georgeson
Shareholder Communications Inc. to seek the proxies of custodians, such as
brokers, who hold shares which belong to other people. This service will cost
the Company approximately $4,000.
2
How Do I Obtain an Annual Report on Form 10-K?
A copy of Greater Bay Bancorp's Annual Report on Form 10-K for the year
ended December 31, 2000 is included with this Proxy Statement. The Annual Report
on Form 10-K includes a list of exhibits filed with the SEC, but does not
include the exhibits. If you wish to receive copies of the exhibits, we will
send them to you. Expenses for copying and mailing them to you will be your
responsibility. Please write to:
Greater Bay Bancorp
2860 West Bayshore Road
Palo Alto, California 94303
Attention: Shawn E. Saunders, Senior Vice President,
Finance and Accounting
In addition, the SEC maintains an internet site at http://www.sec.gov
that contains Greater Bay Bancorp's SEC filings.
INFORMATION ABOUT GREATER BAY BANCORP STOCK OWNERSHIP
Does Anyone Own 5% or More of Greater Bay Bancorp's Common Stock?
No. Greater Bay Bancorp is not aware of anyone who beneficially owns 5%
or more of our outstanding Common Stock. The Securities and Exchange Commission
has defined "beneficial ownership" to mean more than ownership in the usual
sense. For example, a person has beneficial ownership of a share not only if he
owns it in the usual sense, but also if he has the power to vote, sell or
otherwise dispose of the share. Beneficial ownership also includes that number
of shares that a person has the right to acquire within 60 days. Two or more
persons might count as beneficial owners of the same share.
3
How Much of Greater Bay Bancorp's Common Stock is Owned by Directors and
Executive Officers?
The following table shows, as of March 28, 2001, beneficial ownership
of Greater Bay Bancorp Common Stock by each of Greater Bay Bancorp's directors,
nominees for director, executive officers, directors and executive officers as a
group and directors of subsidiary banks as a group. Unless otherwise indicated
in the table below, no person shares beneficial ownership of the same Greater
Bay Bancorp Common Stock with anyone else.
Shares Beneficially
Owned(1)
----------------------------
Name of Beneficial Owner Number of Percentage of
Shares Class
---------------------------------------------------------------------- ----------------------------
Susan K. Black (2) ......................................... 72,708 0.17%
John W. Gatto............................................... 61,392 0.14%
David R. Hood(3)............................................ 154,987 0.36%
John J. Hounslow(4)......................................... 233,432 0.55%
James E. Jackson(5)......................................... 116,540 0.27%
Gregg A. Johnson(6)......................................... 25,582 0.06%
David L. Kalkbrenner(7)..................................... 313,326 0.73%
Stanley A. Kangas (8)....................................... 35,558 0.08%
Daniel G. Libarle (9)....................................... 59,828 0.14%
Rex D. Lindsay(10).......................................... 130,036 0.31%
George M. Marcus(11)........................................ 166,320 0.39%
Duncan L. Matteson(12)...................................... 232,218 0.55%
Glen McLaughlin............................................. 45,136 0.11%
Linda R. Meier ............................................. 2,800 0.01%
Rebecca Q. Morgan (13)...................................... 14,800 0.03%
Dick J. Randall(14)......................................... 230,848 0.54%
Donald H. Seiler(15)........................................ 218,588 0.51%
Steven C. Smith(16)......................................... 175,392 0.41%
Warren R. Thoits(17)........................................ 148,590 0.35%
James C. Thompson .......................................... 124,890 0.29%
T. John Whalen (18)......................................... 87,593 0.21%
All directors and executive officers as a group (21 persons)(19) 2,650,565 6.08%
Directors of subsidiary banks as a group (74 persons)(20) .. 4,216,699 9.83%
--------------
(1) Includes shares issuable upon the exercise of stock options exercisable
within 60 days of March 28, 2001. Shares of Greater Bay Common Stock
issuable upon exercise of stock options exercisable within 60 days of
March 28, 2001 are deemed outstanding for computing the percentage of
the person holding such securities but are not deemed outstanding for
computing the percentage of any other person.
(2) Includes 41,668 shares held jointly by Ms. Black and her spouse and
31,040 shares issuable upon the exercise of stock options exercisable
within 60 days of March 28, 2001.
(3) Includes 56,602 shares held in an IRA for Mr. Hood, 22,104 shares held
jointly by Mr. Hood and his spouse, 15,117 shares in a 401(k) plan for
Mr. Hood and 61,164 shares issuable upon the exercise of options
exercisable within 60 days of March 28, 2001.
(4) Includes 3,600 shares issuable upon the exercise of options exercisable
within 60 days of March 28, 2001.
(5) Includes 16,400 shares issuable upon the exercise of options
exercisable within 60 days of March 28, 2001.
4
(6) Includes 24,080 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(7) Includes 70,314 shares held directly by Mr. Kalkbrenner, 29,988 shares
held in an IRA for Mr. Kalkbrenner, 7,870 shares in a 401(k) plan for
Mr. Kalkbrenner and 205,200 shares issuable upon the exercise of stock
options exercisable within 60 days of March 28, 2001.
(8) Includes 18,028 shares held directly, 13,930 shares held in an IRA for
Mr. Kangas and 3,600 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(9) Includes 11,462 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(10) Includes 109,084 shares held by the Rex D. and Leanor L. Lindsay Family
Trust and 20,952 shares issuable upon the exercise of options
exercisable within 60 days of March 28, 2001.
(11) Includes 122,896 shares held directly by Mr. Marcus and 43,424 shares
issuable upon the exercise of stock options exercisable within 60 days
of March 28, 2001.
(12) Includes 110,750 shares held jointly with Mr. Matteson's spouse as
trustees of the Matteson Family Trust, 54,000 shares held by the
Matteson Realty Services, Inc. Defined Benefit Employees' Retirement
Trust and 67,468 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(13) Includes 10,800 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(14) Includes 740 shares held directly by Mr. Randall, 208,108 shares held
by the Dick J. and Carolyn L. Randall Trust and 22,000 shares issuable
upon the exercise of stock options exercisable within 60 days of March
28, 2001.
(15) Includes 191,476 shares held jointly with Mr. Seiler's spouse as
trustees of the Seiler Family Trust and 27,112 shares issuable upon the
exercise of stock options exercisable within 60 days of March 28, 2001.
(16) Includes 170,004 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(17) Includes 57,784 shares held by Mr. Thoits as trustee of the Warren R.
Thoits Trust dated December 30, 1983, 23,344 shares held by Thoits
Brothers, Inc., 28,594 shares for which Mr. Thoits is the record
holding trustee, 16,700 shares held by Mr. Thoits and his spouse as
Trustees of the WRT-VBT 1998 Trust dated September 1, 1988 and 22,168
shares issuable upon the exercise of stock options exercisable within
60 days of March 28, 2001.
(18) Includes 37,181 shares owned directly, 19,306 shares held in a trust
for the benefit of Mr. Whalen's mother, 5,745 shares held in an IRA for
his spouse and 25,360 shares issuable upon the exercise of stock
options exercisable within 60 days of March 28, 2001. Mr. Whalen
disclaims beneficial ownership of the shares held in trust and the
shares held by his spouse.
(19) Includes 761,834 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001.
(20) Includes 430,770 shares issuable upon the exercise of stock options
exercisable within 60 days of March 28, 2001. Does not include shares
owned by subsidiary board members who are named in the above table.
5
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors
The Board of Directors oversees our business and monitors the
performance of management. In accordance with corporate governance principles,
the Board does not involve itself in day-to-day operations. The directors keep
themselves informed through, among other things, discussions with the Chief
Executive Officer, other key executives and our principal outside advisers
(legal counsel, outside auditors, investment bankers and other consultants), by
reading reports and other materials that we send them and by participating in
Board and committee meetings.
Greater Bay Bancorp's Bylaws currently permit the number of Board
members to range from 9 to 17, leaving the Board authority to fix the exact
number of directors within that range. The Board has fixed the exact number of
directors at 17. A proposal is included in this Proxy Statement to amend the
Bylaws to increase the number of authorized directors from a range of 9 to 17 to
a range of 11 to 21.
The Board held 15 meetings during 2000. Each incumbent director
attended at least 75% of the total number of Board meetings plus meetings of
the standing committees on which that particular director served.
The Committees of the Board
The Board may delegate portions of its responsibilities to committees
of its members. These "standing committees" of the Board meet at regular
intervals to attend to their particular areas of responsibility. Our Board has
five standing committees: the Audit Committee, Executive Committee, Loan
Committee, Trust Oversight Committee and Investment/Asset-Liability Management
Committee, referred to as the "Investment/ALCO Committee".
Audit Committee. The responsibilities of the Audit Committee are
contained in the Audit Committee Report set forth below. During 2000, the Audit
Committee consisted of Messrs. Seiler (Chairman), Hounslow, Libarle, McLaughlin,
Randall and Thoits, each of whom is "independent," as defined by Company policy
and The Nasdaq Stock Market listing standards. The Audit Committee held 7
meetings during 2000.
Audit Committee Report
The following Audit Committee Report does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filings under the Securities Act of 1933 or the Securities Act of
1934, except to the extent we specifically incorporate this Report by reference.
The Audit Committee reports to the Board of Directors and is
responsible for overseeing and monitoring financial accounting and reporting,
the system of internal controls established by management and the audit process
of Greater Bay Bancorp.
The Audit Committee Charter adopted by the Board sets out the
responsibilities, authority and specific duties of the audit committee. A copy
of the Audit Committee Charter is attached to this Proxy Statement as Appendix
--------
A. Pursuant to the charter, the Audit Committee has the following primary
-
responsibilities:
. To monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting and legal compliance
. To monitor the independence and performance of the Company's
independent accountants and internal audit function
. To recommend annually to the Board of Directors the
appointment of the independent accountants
6
. To monitor the preparation of quarterly and annual financial
reports
. To review the general scope of the annual audit and the fees
charged by the independent accountants
. To provide an avenue of communications among the independent
accountants, management and the Board of Directors.
In discharging its oversight responsibility, the Audit Committee has
met and held discussions with management and PricewaterhouseCoopers LLP, the
independent accountants for Greater Bay Bancorp. Management represented to the
Audit Committee that all consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Audit
Committee has reviewed and discussed the consolidated financial statements with
management and the independent accountants. The Audit Committee discussed with
the independent accountants matters required to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit Committees).
The Audit Committee also obtained from the independent accountants a
formal written statement describing all relationships between Greater Bay
Bancorp and the accountants that bear on the accountants independence consistent
with Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committee. The Audit Committee discussed with the independent accountants
any relationships that may impact on the firm's objectivity and independence and
satisfied itself as to the accountants' independence.
Based on these discussions and reviews, the Audit Committee recommended
that the Board of Directors approve the inclusion of the Company's audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 2000, for filing with the SEC.
Respectfully submitted by the members of the Audit Committee:
Dated: April 13, 2001 Donald H. Seiler, Chairman
John J. Hounslow
Daniel G. Libarle
Glen McLaughlin
Dick J. Randall
Warren R. Thoits
Executive Committee. Our Executive Committee also acts as our Executive
Compensation Committee and Nominating Committee. In performing its duties as the
Executive Compensation Committee, the Executive Committee determines the salary
and bonus structure of the Company's executive officers and supervises
compensation for our other officers.
In performing its duties as the Nominating Committee, the Executive
Committee selects management nominees to stand for election as directors. It
also considers nominations made to the Board by shareholders, provided such
nominations comply with the Company's Bylaws. The Executive Committee held 14
meetings during 2000. Mr. Matteson chairs the Executive Committee and Messrs.
Gatto, Kalkbrenner, Lindsay, Randall, Seiler and Thoits also are members.
Compensation Committee Interlocks and Insider Participation
None of the members of the Executive Committee (which also acts as an
Executive Compensation Committee) serves or has served as an officer or employee
of Greater Bay Bancorp or its subsidiaries, except for Mr. Kalkbrenner, who
serves as the President and Chief Executive Officer of Greater Bay Bancorp. In
addition, Messrs. Matteson, Seiler and Mr. Thoits have an interest in a building
leased by Mid-Peninsula Bank, a subsidiary of the Company. See "Certain
Relationships and Related Transactions."
7
Section 16(a) Beneficial Ownership Reporting Compliance by Directors and
Executive Officers
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our directors and executive officers to file reports with the SEC and
The Nasdaq Stock Market on changes in their beneficial ownership of Greater Bay
Bancorp Common Stock, and to provide the Company with copies of the reports.
Based solely on our review of these reports or of certifications to us
that no report was required to be filed, we believe that all of our directors
and executive officers complied with all Section 16(a) filing requirements
applicable to them during the 2000 fiscal year, except as stated in this
paragraph. Mr. McLaughlin, failed to file on a timely basis one report on Form 4
during each of 1996, 1997 and 1998, regarding one gift transaction in each year.
He filed a Form 5 on February 7, 2001 covering these transactions. Duncan L.
Matteson failed to file on a timely basis one report on Form 4 regarding one
gift transaction.
How We Compensate Directors
Greater Bay Bancorp has a policy of compensating directors for their
service on the Board and for their attendance at committee meetings. In 2000,
Duncan Matteson, as Co-Chairman of the Board, received an annual retainer of
$36,000 and John Gatto, as Co-Chairman of the Board, received an annual retainer
of $24,000. Rex Lindsay and Donald Seiler as Vice-Chairmen of the Board, each
received annual retainers of $20,000 in 2000. All other non-officer directors
received annual retainers of $16,000. Mr. Kalkbrenner's compensation is
discussed below in the section entitled "How We Compensate Executive Officers."
The total compensation for the Greater Bay Bancorp Board of Directors in 2000
was $503,667.
In 2000, committee members received annual retainers as follows: (i)
Audit Committee, $4,000; (ii) Executive Committee, $20,000; (iii) Loan
Committee, $10,000; (iv) Trust Oversight Committee, $4,000; and (v)
Investment/ALCO Committee, $4,000. The Chairmen of these committees received an
additional annual retainer of $2,000 in 2000.
The Boards of Directors of Greater Bay Bancorp's subsidiary banks
received total fees in 2000, as follows: Bank of Petaluma, $181,200; Bank of
Santa Clara, $134,800; Bay Area Bank, $12,000; Bay Bank of Commerce, $102,650;
Coast Commercial Bank, $142,583; Cupertino National Bank, $26,000; Golden Gate
Bank, $17,166; Mid-Peninsula Bank, $34,500; Mt. Diablo National Bank, $11,838;
and Peninsula Bank of Commerce, $14,000.
In 2001, each subsidiary bank board member will receive an annual
retainer of $2,000, except that each Bank of Petaluma director will receive an
attendance fee of $600 per meeting through March 2001. Beginning in April 2001,
Bank of Petaluma board members will receive a quarterly retainer of $500.
In addition, directors are eligible to participate in Greater Bay
Bancorp's 1996 Stock Option Plan and the 1997 Elective Deferred Compensation
Plan. During 2000, Mr. Matteson, Mr. Gatto and the other members of the
Executive Committee received options to purchase 15,000, 12,500 and 10,000
shares respectively, of our Common Stock at an exercise price of $37.125 per
share, the fair market value of such stock on the date of grant. In addition,
each other non-officer director of Greater Bay Bancorp and the subsidiary bank
boards received options to purchase 7,000 shares and 500 shares, respectively,
of our Common Stock at an exercise price of $37.125 per share, the fair market
value of such stock on the date of grant. All stock options granted to
non-officer directors vest in equal annual installments over five-year periods
beginning on the date of grant, subject to continued service on the Board of
Directors. Directors are also entitled to the protection of certain
indemnification provisions in Greater Bay Bancorp's Articles of Incorporation
and Bylaws.
Certain Relationships and Related Transactions
Greater Bay Bancorp, through its subsidiaries, has had and expects in
the future to have banking transactions in the ordinary course of business with
our directors and officers or associates of our directors and officers. We may
also have banking transactions with corporations of which our directors or
officers may own a controlling interest, or also serve as directors or officers.
These transactions have taken place and will take place
8
on substantially the same terms, including interest and collateral, as those
prevailing for comparable transactions with others. We believe that these
transactions involving loans did not present more than normal risk of
noncollectibility or present other unfavorable features.
Mid-Peninsula Bank leases its offices at 420 Cowper Street, Palo Alto,
California 94301 from MPB Associates, a tenant-in-common arrangement. Three
directors of Greater Bay Bancorp, Messrs. Matteson, Seiler and Thoits, and four
other directors of Mid-Peninsula Bank, together own an approximately 51%
interest in MPB Associates. The acquisition of Mid-Peninsula Bank's leased
premises by MPB Associates did not result in a change in the terms of the lease.
The lease has been extended through January 2010. Mid-Peninsula Bank
pays an annual rental of $613,000 for the entire leased space, subject to an
annual rent adjustment of 3.5%. Additionally, Mid-Peninsula Bank pays real
property taxes, utilities and building insurance, to the extent they exceed, on
an annual basis, $1.40 per rentable square foot, $1.60 per rentable square foot,
and $0.17 per rentable square foot, respectively. The lease also contains a
provision granting Mid-Peninsula Bank a right of first refusal to purchase the
building during the term of the lease upon the same terms and conditions that
the landlord is willing to accept from a third party.
In January 2000, Greater Bay Bancorp entered into a six month
consulting agreement with John J. Hounslow, a director of Greater Bay Bancorp.
For his services under the agreement, which involved primarily business
development activities and oversight of the merger integration of Mt. Diablo
National Bank, the Company paid Mr. Hounslow a total of $99,000. In connection
with his appointment as a director of Greater Bay Bancorp, he was also granted
an option to purchase 18,000 shares of the Company's Common Stock at an exercise
price of $19.6875 per share, the fair market value of such stock on the date of
grant.
Executive Officers
Set forth below are the names and five-year biographies of Greater Bay
Bancorp's executive officers.
Name and Age Principal Occupation and Business Experience
------------------------- ---------------------------------------------------
David L. Kalkbrenner President, Chief Executive Officer and a director
(61) of Greater Bay Bancorp since 1994. Mr. Kalkbrenner
also serves as a director of Bank of Petaluma, Bay
Bank of Commerce, Coast Commercial Bank, Cupertino
National Bank, Mid-Peninsula Bank and Mt. Diablo
National Bank. He a was founder of Mid-Peninsula
Bank and was appointed President and Chief
Executive Officer when the bank was chartered in
1987, positions he held through March 1998. He was
employed by Crocker National Bank from 1963 to 1986
and held positions as First Vice President,
Regional Manager and Regional Vice President.
Susan K. Black Executive Vice President of Greater Bay Bancorp
(52) since November 1998 and Regional President, San
Francisco/Peninsula Region since March 2000. She
has also served as President and Chief Executive
Officer of Mid-Peninsula Bank since April 1998. Ms.
Black also serves as a director of Mid-Peninsula
Bank, Bay Area Bank, Golden Gate Bank and Peninsula
Bank of Commerce. Ms. Black joined Mid-Peninsula
Bank in October 1987 as Vice President and Director
of Marketing. In 1993, she became Senior Vice
President and in 1996 Executive Vice President of
Mid-Peninsula Bank. Ms. Black was one of the
organizers of Lenders for Community Development and
served two terms as Chairman of the Board. She
currently serves as a director of that
organization. Ms. Black also serves on the Boards
of Directors of Bay Area Council and Silicon Valley
Manufacturing Group.
9
Name and Age Principal Occupation and Business Experience
------------------------- ------------------------------------------------
David R. Hood Executive Vice President and Chief Lending Officer
(56) of Greater Bay Bancorp since November 1996 and
Regional President, South Bay Region since March
2000. He has also served as President and a
director of Cupertino National Bank since November
1998 and as its Chief Executive Officer since
January 2000. From April 1995 until November 1998,
he served as Executive Vice President and Chief
Lending Officer of Cupertino National Bank. From
April 1985 to March 1995, he held the positions of
Executive Vice President, Senior Loan Officer, and
President of University Bank & Trust.
Gregg A. Johnson Executive Vice President, Business and Technology
(51) Services of Greater Bay Bancorp since April 1998.
From April 1997 to December 1997, Mr. Johnson was
Vice President of Development and Customer Service
at Computer Sciences Corporation. From April 1996
to April 1997, Mr. Johnson was Vice President of
Information Systems at First Plus Financial. Before
joining First Plus, Mr. Johnson was employed as
Senior Vice President and Chief Information Officer
at San Francisco Federal Bank, a federal savings
bank, from February 1995 to February 1996. Mr.
Johnson also served as Senior Vice President and
Chief Information Officer at Fidelity Federal Bank
from December 1990 to February 1995.
Steven C. Smith Executive Vice President, Chief Administrative
(49) Officer and Chief Financial Officer of Greater Bay
Bancorp since November 1996. Mr. Smith is a
certified public accountant who joined Cupertino
National Bank in December 1993 as Senior Vice
President and Chief Financial Officer, and in 1995
was named Executive Vice President and Chief
Operating Officer.
10
How We Compensate Executive Officers
Summary Compensation. The following table summarizes information about
compensation paid to or earned by our Chief Executive Officer, David L.
Kalkbrenner. It also summarizes the compensation paid to or earned by our four
other most highly compensated executive officers who earned salary and bonus
compensation in excess of $100,000 during 2000. In all cases, the officers
concerned earned all the compensation shown for their services, in all their
capacities, to Greater Bay Bancorp or its subsidiaries during the years 2000,
1999 and 1998.
Summary Compensation Table
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Other
Annual Restricted Securities
Compen- Stock Underlying All Other
Salary Bonus sation Awards Options Compensation
Name and Principal Position Year (1) ($) (2)($) (3)($) (4)($) (4)(#) (5)($)
----------------------------------------- -------- ----------- --------- ------- ------------- -------------- ----------------
David L. Kalkbrenner..................... 2000 $ 369,864 $ 450,000 $12,000 $ 124,875 35,000 $ 446,253
President and CEO 1999 353,870 300,000 12,000 --- 30,000 312,187
1998 298,164 275,000 8,400 --- 31,500 9,623
Susan K. Black........................... 2000 $ 210,276 $ 250,000 $10,775 --- 18,000 $ 147,715
Executive Vice President 1999 189,931 150,000 7,800 --- 16,000 100,042
1998 156,598 110,000 6,000 --- 15,800 7,915
David R. Hood............................ 2000 $ 223,032 $ 220,000 $ 7,750 --- 18,000 $ 128,572
Executive Vice President and Chief 1999 204,943 150,000 6,000 --- 16,000 150,239
Lending Officer 1998 177,017 125,000 6,000 --- 15,800 8,392
Gregg A. Johnson (6)..................... 2000 $ 195,276 $ 230,000 $ 6,000 --- 18,000 $ 182,820
Executive Vice President, Business and 1999 160,259 122,000 6,000 --- 16,000 108,889
Technology Services 1998 102,935 62,800 4,500 --- 17,100 2,339
Steven C. Smith.......................... 2000 $ 263,476 $ 300,000 $ 6,000 --- 23,000 $ 310,514
Executive Vice President, CAO and CFO 1999 231,036 180,000 6,000 --- 20,000 180,120
1998 201,069 50,000 6,000 --- 23,700 8,171
_______________
(1) Annual salary includes cash compensation earned and received by
executive officers as well as amounts earned but deferred at the
election of those officers under Greater Bay Bancorp's 401(k) Plan.
(2) Amounts indicated as bonus payments were earned for performance during
2000, 1999 and 1998 but paid in the first quarters of 2001, 2000 and
1999, respectively. Also included in amounts indicated as bonus
payments are any amounts deferred at the election of those officers
under Greater Bay Bancorp's Deferred Compensation Plan.
(3) No executive officer received perquisites or other personal benefits in
excess of the lesser of $50,000 or 10% of each such officer's total
annual salary and bonus during 2000, 1999 and 1998. Amounts shown are
for automobile allowances.
(4) Under the Greater Bay Bancorp 1996 Stock Option Plan, as amended,
options and restricted stock may be granted to directors and key,
full-time salaried officers and employees of Greater Bay Bancorp or its
subsidiaries. Effective January 2, 2000, the Board of Directors granted
Mr. Kalkbrenner 6,000 shares of restricted stock. The restrictions
lapse 20% annually over a five year period and dividends are paid on
these shares. As of December 31, 2000, these shares had a value of
$246,000. Options granted under the 1996 Stock Option Plan are either
incentive options or non-statutory options. Options granted under the
1996 Stock Option Plan become exercisable in accordance with a vesting
schedule established at the time of grant. Vesting may not extend
beyond
11
ten years from the date of grant. Options and restricted stock granted
under the 1996 Stock Option Plan are adjusted to protect against
dilution in the event of certain changes in Greater Bay Bancorp's
capitalization, including stock splits and stock dividends. All options
granted to executive officers have an exercise price equal to the fair
market value of Greater Bay Bancorp's Common Stock on the date of
grant.
(5) Amounts shown for Mr. Kalkbrenner include (a) for 2000, $6,250 in
401(k) plan matching contributions, $2,578 in long term disability
insurance premiums and $3,564 in group term life insurance premiums;
(b) for 1999, $6,250 in 401(k) plan matching contributions, $2,340 in
long term disability insurance premiums and $1,597 in group term life
insurance premiums; and (c) for 1998, $6,185 in 401(k) plan matching
contributions, $2,088 in long term disability insurance premiums and
$1,294 in group term life insurance premiums.
Amounts shown for Ms. Black include (a) for 2000, $6,250 in 401(k) plan
matching contributions, $1,489 in long term disability insurance
premiums and $1,242 in group term life insurance premiums; (b) for
1999, $6,250 in 401(k) plan matching contributions, $1,170 in long term
disability insurance premiums and $622 in group term life insurance
premiums; and (c) for 1998, $6,250 in 401(k) plan matching
contributions, $1,143 in long term disability insurance premiums and
$522 in group term life insurance premiums.
Amounts shown for Mr. Hood include (a) for 2000, $6,250 in 401(k) plan
matching contributions and $2,322 in group term life insurance
premiums; (b) for 1999, $6,250 in 401(k) plan matching contributions,
$1,350 in long term disability insurance premiums and $639 in group
term life insurance premiums; and (c) for 1998, $6,250 in 401(k) plan
matching contributions, $1,278 in long term disability insurance
premiums and $864 in group term life insurance premiums.
Amounts shown for Mr. Johnson include, (a) for 2000, $6,250 in 401(k)
plan matching contributions, $328 in long term disability insurance
premiums and $1,242 in group term life insurance premiums; (b) for
1999, $6,250 in 401(k) plan matching contributions and $639 in group
term life insurance premiums; and (c) for 1998, $1,969 in 401(k) plan
matching contributions and $370 in group term life insurance premiums.
Amounts shown for Mr. Smith include (a) for 2000, $6,250 in 401(k) plan
matching contributions, $1,112 in long term disability insurance
premiums and $810 in group term life insurance premiums; (b) for 1999,
$6,250 in 401(k) plan matching contributions, $1,485 in long term
disability insurance premiums and $385 in group term life insurance
premiums; and (c) for 1998, $6,250 in 401(k) plan matching
contributions, $1,399 in long term disability insurance premiums and
$522 in group term life insurance premiums.
Includes special awards in 2000 for significant contributions to merger
transactions. The named executive officers received the following cash
amounts: Mr. Kalkbrenner, $175,000; Ms. Black, $60,000; Mr. Hood,
$70,000; Mr. Johnson, $125,000; and Mr. Smith, $150,000. See "Executive
Committee's Report on Executive Compensation."
Includes amounts paid in 2000 for accrued and unused vacation, as
follows: Mr. Kalkbrenner, $108,861; and Mr. Smith, $77,342.
Includes special awards in 2000 and 1999 based on the value of warrants
exercised by Greater Bay Bancorp. The persons named in the Summary
Compensation Table received 2.0 % of the total warrant exercise value
of approximately $18.5 million at December 31, 2000 and 3.6% of the
total warrant exercise value of approximately $22 million at December
31, 1999. Under this program, the named executive officers received the
following cash amounts: Mr. Kalkbrenner, $150,000 in 2000 and $302,000
in 1999; Ms. Black, $50,000 in 2000 and $102,000 in 1999; Mr. Hood,
$50,000 in 2000 and $142,000 in 1999; Mr. Johnson, $50,000 in 2000 and
$102,000 in 1999; and Mr. Smith, $75,000 in 2000 and $172,000 in 1999
12
(6) Mr. Johnson joined Greater Bay Bancorp in April 1998. Amounts shown for
1998 were earned during the period April 6, 1998 through December 31,
1998.
Option Grants in 2000. The following table sets forth information
concerning stock options granted during the year ended December 31, 2000 to the
persons named in the Summary Compensation Table.
Option Grants in Last Fiscal Year
Individual Grants in Fiscal 2000
--------------------------------------------------------------------------
Number of Potential Realizable Value
Securities % of Total at Assumed Annual Rates of
Underlying Options/SARs Exercise Stock Price Appreciation
Options/SARs Granted to Price(3) Expiration for Option Term(1)
------------------
Name Granted(2) Employees ($/sh) Date @5%($) @10%($)
------------------------------- ---------------- -------------- ----------- ------------ ------------------------------
David L. Kalkbrenner........... 35,000 2.70% $37.125 12/19/10 $817,170 $2,070,869
Susan K. Black................. 18,000 1.39 37.125 12/19/10 420,259 1,065,018
David R. Hood.................. 18,000 1.39 37.125 12/19/10 420,259 1,065,018
Gregg A. Johnson............... 18,000 1.39 37.125 12/19/10 420,259 1,065,018
Steven C. Smith................ 23,000 1.78 37.125 12/19/10 536,997 1,360,857
_______________
(1) Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only, based on SEC rules. Actual gains, if any, on stock
option exercises are dependent on the future performance of Greater Bay
Bancorp Common Stock, overall market conditions and the option holders'
continued employment through the vesting period. The amounts reflected
in this table may not necessarily be achieved. One share of stock
purchased in 2000 at $37.125 would yield profits of $23.35 per share at
5% appreciation over ten years, or $59.17 per share at 10% appreciation
over the same period.
(2) Generally, options granted under the 1996 Stock Option Plan vest at the
rate of 20% of the options granted for each full year of the optionee's
continuous employment with Greater Bay Bancorp or its subsidiaries and
are exercisable to the extent vested. See also "Employment Contracts,
Change in Control Arrangements and Termination of Employment."
(3) All options listed were granted at the fair market value of our Common
Stock on the date of grant.
Aggregated Option Exercises and Option Values. The following table sets
forth the specified information concerning exercises of options to purchase
Greater Bay Bancorp Common Stock in the fiscal year ended December 31, 2000 and
unexercised options held as of December 31, 2000 by the persons named in the
Summary Compensation Table.
Aggregated Option Exercises in Fiscal Year 2000 and Fiscal Year-End Option Values
Number of Securities Value of Unexercised In-the-
Shares Underlying Unexercised Money Options at 12/31/00
Acquired on Value Options at 12/31/00 (#) ($)(1)
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
-------------------------------------------------------------------------------------------------------------------
David L. Kalkbrenner.... - 0 - - 0 - 205,200 152,800 $6,786,350 $3,070,775
Susan K. Black.......... 12,000 $298,500 40,640 72,960 1,132,120 1,401,680
David R. Hood........... - 0 - - 0 - 83,372 78,960 2,686,946 1,587,805
Gregg A. Johnson........ - 0 - - 0 - 20,080 64,120 487,440 1,148,910
Steven C. Smith......... - 0 - - 0 - 170,004 107,440 5,792,591 2,205,670
________________
(1) Based on the closing price of Greater Bay Bancorp Common Stock on
December 29, 2000, the last trading day in 2000, which was $41.00.
13
Employment Contracts, Change in Control Arrangements and Termination of
Employment
Employment Contracts. Effective January 1, 1999, Greater Bay Bancorp
entered into a five-year employment agreement with its President and Chief
Executive Officer, David L. Kalkbrenner. The agreement provides for, among other
things (a) a base salary of $360,000 per year, which the Board may adjust
annually at its discretion; (b) a discretionary annual bonus based upon the
Company's pre-tax net profits; (c) in the event that Mr. Kalkbrenner becomes
disabled so that he cannot perform his duties, payment to him of his base salary
for one year, reduced by any amounts received by him from state disability
insurance, worker's compensation or similar insurance; (d) five weeks annual
vacation; (e) a $500,000 life insurance policy; (f) an automobile allowance; (g)
supplemental retirement benefits (see "Supplemental Executive Retirement Plan"
below); and (h) reimbursement for ordinary and necessary expenses incurred by
Mr. Kalkbrenner in connection with his employment. On December 11, 2000, Greater
Bay Bancorp and Mr. Kalkbrenner amended the agreement to provide that he may
participate in the Company's group health and medical plans upon his retirement
or termination upon a change in control. Greater Bay Bancorp may terminate the
agreement with or without cause.
Upon Mr. Kalkbrenner's involuntary termination of employment for any
reason, Mr. Kalkbrenner will be entitled to receive severance benefits equal to
36 months of salary at the rate in effect immediately preceding the termination
and the amount of any bonus due him. In the event of a termination of his
employment following a change in control of Greater Bay Bancorp, Mr. Kalkbrenner
will be entitled to receive severance pay equal to 2.99 times his average annual
compensation for the five years immediately preceding the change in control. If
any portions of this amount constitute "excess parachute payments" under the
Internal Revenue Code of 1986, Greater Bay Bancorp will increase the amount
payable to Mr. Kalkbrenner to account for any excise tax that may be imposed on
him.
The benefits provided to Mr. Kalkbrenner under the agreement supersede
any benefits to which he may otherwise be entitled under Greater Bay Bancorp's
Termination and Layoff Pay Plan for Key Executives and Change in Control Pay
Plan for Key Executives (as described below) to the extent they exceed the
benefits otherwise payable under these plans.
Change in Control Plans. Effective January 1, 1998, the Greater Bay
Bancorp Board of Directors adopted the Greater Bay Bancorp Change in Control Pay
Plan and the Greater Bay Bancorp Change in Control Pay Plan for Key Executives,
referred to as the "Change in Control Plans", to provide eligible employees and
key executives with severance benefits upon their termination of employment on
account of a change in control. The Change in Control Plans provide that a
change in control occurs when Greater Bay Bancorp is sold or otherwise
transferred in ownership to new ownership.
The Change in Control Plans generally provide each participant with a
base benefit based on the participant's pay, full years of service with Greater
Bay Bancorp or a subsidiary, and his or her title or position at Greater Bay
Bancorp or the subsidiary as of the date he or she terminates employment, and an
added benefit based on the participant's pay and his or her full years of
service as of the date of his termination of employment. "Pay" for purposes of
the Change in Control Plans means the total annual compensation paid to an
employee, including base wages and average bonus paid to the employee in the
three most recent years.
Under the Change in Control Plan for Key Executives, Mr. Kalkbrenner
would be entitled to receive a base benefit equal to 25 months of pay and an
added benefit of 2 weeks of pay for each full year of service for a maximum
severance of up to 3 years of pay; Mr. Smith would be entitled to receive a base
benefit equal to 20 months of pay and an added benefit of 2 weeks of pay for
each full year of service, for a maximum severance of up to 2 1/2 years of pay;
and Mr. Hood, Ms. Black and Mr. Johnson would each be entitled to receive a base
benefit equal to 18 months of pay and an added benefit of 2 weeks of pay for
each full year of service, for a maximum severance benefit of up to 2 years of
pay.
Termination and Layoff Plans. The Greater Bay Bancorp Board has also
adopted the Greater Bay Bancorp Termination and Layoff Pay Plan and the Greater
Bay Bancorp Termination and Layoff Pay Plan for Key Executives, referred to as
the "Termination Plans", effective January 1, 1998. These plans provide
14
severance benefits to eligible employees and key executives upon the termination
of their employment because of circumstances which the Termination Plans define.
The Termination Plans also provide each participant with a severance
benefit based on the participant's pay, full years of service with Greater Bay
Bancorp or a subsidiary, and his or her title or position in Greater Bay Bancorp
or the subsidiary as of the date of his or her involuntary termination of
employment or layoff. "Pay" for purposes of the Termination Plans means the
total annual compensation paid to an employee, including base wages and average
bonus paid to the employee in the three most recent years.
Under the Termination and Layoff Plan for Key Executives, Mr.
Kalkbrenner would be entitled to receive a severance benefit equal to 25 months
of pay; Mr. Smith would be entitled to receive a severance benefit equal to 20
months of pay; and Mr. Hood, Ms. Black and Mr. Johnson would each be entitled to
receive a severance benefit equal to 18 months of pay.
Greater Bay Bancorp's Stock Option Plan. The Greater Bay Bancorp Board
of Directors adopted the Greater Bay Bancorp 1996 Stock Option Plan in 1996, as
amended, referred to as the "Option Plan". The Option Plan allows Greater Bay
Bancorp to offer selected employees, directors and consultants an opportunity to
purchase Greater Bay Bancorp Common Stock or to receive grants of restricted
stock. Through this plan, the Board hopes to motivate such individuals by giving
them an ownership interest in Greater Bay Bancorp's success.
Options and restricted stock granted under the Option Plan contain a
provision that takes effect upon a "change in control" of Greater Bay Bancorp.
Prior to the happening of any such change in control, all options granted under
the Option Plan will become immediately exercisable and all restrictions on
restricted stock will immediately lapse.
Supplemental Executive Retirement Plan. In December 1997, the Greater
Bay Bancorp Board of Directors approved the implementation of the Greater Bay
Bancorp Supplemental Executive Retirement Plan, referred to as the SERP, which
provides supplemental retirement benefits to a select group of management or
highly compensated employees of Greater Bay Bancorp and its subsidiaries who
have titles of senior vice president or above. Greater Bay Bancorp's management
designates those employees who are eligible to participate in the SERP.
Benefits under the SERP include income generally payable commencing
upon a designated retirement date for the life of the participant and a death
benefit for the participant's designated beneficiaries. The retirement benefits
are derived from accruals to a benefit account during the participant's
employment. The benefit account accruals are determined annually. A portion of
the accrual is based upon annual earnings (or loss) and certain investment
opportunity costs related to life insurance contracts owned by Greater Bay
Bancorp. The remainder of the accrual expense is based on an actuarial
measurement of the value of post-retirement benefits earned during the current
year.
With respect to the persons named in the Summary Compensation Table,
retirement benefits are also provided from contributions to secular trusts that
were established in 1999. Greater Bay Bancorp's annual contributions to the
secular trusts are determined by calculating the amount that must be invested
each year during the employee's working life, in order to provide retirement
income equal to 50% of the after-tax total projected retirement benefits.
Greater Bay Bancorp reviews the level of the contributions periodically to
assure the trusts are adequately funded to provide the guaranteed benefits.
Greater Bay Bancorp has purchased life insurance policies on the participants in
order to finance the cost of these benefits.
SERP benefits for the persons named in the Summary Compensation Table
vest at a rate of approximately 20% after 5 years of service and 20% each year
thereafter. Vesting accelerates to 100% upon a change in control of Greater Bay
Bancorp to the extent any portion of such benefits remains unvested at such
time. Upon a termination of employment for "cause", the participant forfeits all
benefits. The participant is entitled to all vested benefits in the case of a
termination without "cause"; however, if a
15
participant voluntarily resigns prior to becoming 100% vested, his or her
benefits are reduced by amounts ranging from a total forfeiture to approximately
40% of benefits.
As of December 31, 2000, Mr. Kalkbrenner was credited with 13 years of
services under the SERP; Ms. Black was credited with 10 years of service under
the SERP; Mr. Hood was credited with 10 years of service under the SERP; Mr.
Johnson was credited with 3 year of service under the SERP; and Mr. Smith was
credited with 11 years of service under the SERP.
At retirement age of 65, Mr. Kalkbrenner will be entitled to receive a
projected benefit under the SERP that is equal to 29% of his 2000 total
compensation. At retirement age of 62, Ms. Black will be entitled to receive a
projected benefit of 38% of her 2000 total compensation; Mr. Hood will be
entitled to receive a projected benefit of 44% of his 2000 total compensation;
Mr. Johnson will be entitled to receive a projected benefit of 36% of his 2000
total compensation; and Mr. Smith will be entitled to receive a projected
benefit of 42% of his 2000 total compensation.
Executive Committee's Report on Executive Compensation
Set forth below is a report of our Executive Committee addressing the
compensation policies for 2000 applicable to our executive officers.
The Report of the Executive Committee of the Board of Directors shall
not be deemed incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the extent that
Greater Bay Bancorp specifically incorporates the information contained in the
report by reference, and shall not otherwise be deemed filed under such acts.
The Report
The Executive Committee of the Board of Directors acts as our Executive
Compensation Committee. The Executive Committee establishes our overall
compensation and employee benefits and approves specific compensation levels for
executive officers. It is a goal of the Executive Committee to implement
executive officer compensation programs that further our business objectives and
that attract, retain and motivate the best qualified executive officers.
Currently, the members of the Executive Committee are John M. Gatto, Duncan L.
Matteson, David L. Kalkbrenner, Rex D. Lindsay, Dick J. Randall, Donald H.
Seiler and Warren Thoits. Each member of the Executive Committee is a non-
employee director, except for Mr. Kalkbrenner.
Compensation Policies. Greater Bay Bancorp's executive compensation
policies and specific executive compensation programs are adopted and
administered in accordance with the principal goal of maximizing return on
shareholders' equity. The Executive Committee believes that this performance
goal, and the long-term interests of our shareholders generally, are best
achieved by attracting and retaining management of high quality, and that such
management will require commensurate compensation. The Executive Committee
believes that our executive officer compensation policies are consistent with
this policy.
In addition, the Executive Committee believes that while our
compensation programs should reflect the philosophy that executive compensation
levels be linked to the Company's performance, such compensation programs should
also be competitive and consistent with those provided to others holding
positions of similar responsibility in the banking and financial services
industry. Our compensation plans are designed to assist the Company in
attracting and retaining qualified employees critical to our long-term success,
while enhancing employees' incentives to perform to their fullest abilities to
increase profitability and maximize shareholder value.
To assist the Executive Committee in its compensation decisions for
2000, the Executive Committee engaged an independent compensation consultant to
provide advice on the appropriate levels of compensation for the executive
officers. The consultant reviewed our compensation structure and programs in
comparison with those of the Company's peer group and made recommendations to
the Executive Committee based on the consultant's expertise in executive
compensation. The goal of the consultant's review was to ensure that the
16
executive officers are competitively compensated for their service and
contribution and that the Company's compensation program provides adequate
incentives for the retention of these key officers.
In setting annual compensation levels for executive officers, the
Executive Committee considered the recommendations of the compensation
consultant and also reviewed and analyzed the following factors:
. the responsibilities of the position,
. the performance of the individual and his or her general experience
and qualifications,
. the overall financial performance (including return on equity,
return on assets and achievement of the profit plan) of Greater Bay
Bancorp for the previous year and the contributions to such
performance measures by the individual or his or her department,
. the officers' total compensation during the previous year,
. compensation levels paid by comparable companies in similar
industries,
. the officer's length of service with Greater Bay Bancorp, and
. the officer's effectiveness in dealing with external and internal
parties.
The Executive Committee believes that the base compensation of the
executive officers is competitive with companies of similar size and with
comparable operating results in similar industries.
In 2000, the Company awarded special compensation to all employees,
including the executive officers, as the result of income earned on the exercise
of warrants granted by Greater Bay Bancorp's borrowers and in recognition of our
employees' extraordinary efforts in completing five mergers during the year as
well as our outstanding financial results for 2000. The Executive Committee
recommended these awards to reward our valued employees and as additional
incentive to retain them.
Long Term Compensation Programs. While the Executive Committee
establishes salary and bonus levels based on the above described criteria, the
Executive Committee also believes that encouraging equity ownership by executive
officers further aligns the interests of the officers with the performance
objectives of our shareholders and enhances our ability to attract and retain
highly qualified personnel on a basis competitive with industry practices. Stock
options granted by the Company pursuant to the 1996 Stock Option Plan help
achieve this objective, and provide additional compensation to the officers to
the extent that the price of the Common Stock increases over fair market value
on the date of grant. Stock options have been granted to each of the executive
officers and to other officers or key employees. Through the 1996 Stock Option
Plan, there will be an additional direct relationship between the Company's
performance and benefits to plan participants.
In addition, through Greater Bay Bancorp's Employee Stock Purchase
Plan, eligible employees who are scheduled to work at least 20 hours a week may
acquire an interest in our growth and productivity. Under this plan,
participants may purchase shares of Greater Bay Bancorp Common Stock through
payroll deductions. The purchase price per share generally equals 85% of the
lesser of the fair market value of a share on the first or last day of the
offering period. Offering periods are for three months, commencing the first day
of each calendar quarter.
Certain key employees participate in the Company's Supplemental
Executive Retirement Plan. This plan provides supplemental retirement benefits
to a select group of management or highly compensated employees who have titles
of senior vice president or higher. Upon vesting, participants in the plan
receive lifetime retirement income benefits and death benefits.
Eligible employees are also able to participate in Greater Bay
Bancorp's 401(k) Plan. The 401(k) Plan permits participants to make 401(k)
contributions on a pretax basis. All employees who are at least 18 years of age
are eligible to participate in the 401(k) Plan. Participants can contribute up
to 15% of their pretax
17
compensation to the 401(k) Plan annually, subject to certain legal limitations.
The 401(k) Plan also provides that the Company will make a matching contribution
on behalf of each eligible participant equal to 62.5% of the 401(k)
contributions made by such participants, up to 8% of their individual
compensation.
Finally, our Board of Directors adopted the Greater Bay Bancorp 1997
Elective Deferred Compensation Plan at its December 1997 meeting. The Deferred
Compensation Plan is an unfunded Plan that provides deferred compensation
benefits to a select group of management and highly compensated employees who
contribute materially to the continued growth, development and future business
success of the Company.
Through these various compensation programs, the Executive Committee
believes that Greater Bay Bancorp furthers its objectives of attracting,
retaining and motivating the best qualified executive officers and employees,
and ultimately will serve to increase our profitability and maximize shareholder
value.
Compensation of Chief Executive Officer. The base salary of our Chief
Executive Officer was determined primarily by the terms of his employment
agreement dated January 1, 1999 (see "Employment Contracts, Change in Control
Arrangements and Termination of Employment"). The agreement provides for a base
salary, subject to annual adjustments by the Board of Directors, and for a
discretionary annual bonus based upon the pre-tax net profits of the Company. In
addition, the Chief Executive Officer's compensation for 2000 was based on his
progress in achieving the Company's strategic objectives and certain additional
criteria, including the completion of five merger and acquisition transactions,
total return to shareholders and leadership abilities. The Executive Committee
also considered the recommendations of the compensation consultant which
included a review of compensation paid to chief executive officers in the
Company's peer group (institutions with assets of $1-5 billion). Mr. Kalkbrenner
did not participate in the Executive Committee's deliberations concerning his
compensation.
Respectfully submitted by the members of the Executive Committee:
Dated: April 13, 2001 Duncan L. Matteson, Chairman
John M. Gatto
David L. Kalkbrenner
Rex D. Lindsay
Dick J. Randall
Donald H. Seiler
Warren R. Thoits
18
Performance Graph
The following graph compares, for the period December 31, 1995 through
December 31, 2000, the yearly percentage change in Greater Bay Bancorp's
cumulative total return on its Common Stock with the cumulative total return of
(i) the NASDAQ - Total US (formerly called the "NASDAQ Total Return Index"), an
index consisting of Nasdaq-listed U.S.-based companies; (ii) the SNL $1B-$5B
Bank Asset-Size Index, an index composed of a survey of banks and bank holding
companies having between $1 billion and $5 billion in total assets; and (iii)
the SNL $5-$10B Bank Asset-Size Index composed of a survey of banks and bank
holding companies having between $5 billion and $10 billion in total assets.
The graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such acts.
Greater Bay Bancorp
-----------------
Total Return Performance
[PERFORMANCE GRAPH APPEARS HERE]
Period Ending
------------------------------------------------------------------------------------------------------
Index 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
-------------------------------------------------------------------------------------------------------------------------------
Greater Bay Bancorp 100.00 148.67 297.79 423.92 546.27 1,058.12
NASDAQ - Total US* 100.00 123.04 150.69 212.51 394.92 237.62
SNL $1B-$5B Bank Index 100.00 129.63 216.19 215.69 198.23 224.95
SNL $5B-$10B Bank Index 100.00 133.95 219.71 212.55 194.79 233.80
*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago, 2001.
Used with permission. All rights reserved. crsp.com
SNL Securities LC (804) 977-1600
(C) 2001
19
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
Proposal 1: Elect Five Directors
The Board has nominated five persons for election as Class I Directors at
the Annual Meeting. If you elect them, they will hold office until the election
of their successors at the Annual Meeting in 2004, or until they resign.
We know of no reason why any nominee may be unable to serve as a director.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the Board. If for any reason these nominees prove unable or
unwilling to stand for election, the Board will nominate alternates. The Board
has no reason to believe that its nominees would prove unable to serve if
elected.
The following table sets forth the names and five-year biographies of the
five persons nominated by the Board to serve as Class I Directors. The table
also sets forth the names and five-year biographies of our Class II Directors
whose terms expire in 2002 and Class III Directors whose terms expire in 2003.
Name and Age Principal Occupation and Business Experience
--------------------------------------------------------------------------------
Class I Nominees
----------------
James E. Jackson Director of Greater Bay Bancorp since November 1996. He
(66) has also served as a director of Cupertino National
Bank since 1984. Mr. Jackson has been an attorney-at-
law with the law firm of Jackson & Abdalah, a
Professional Corporation, since 1963.
Stanley A. Kangas Director of Greater Bay Bancorp since May 1999. He has
(63) also served as a director of Bay Area Bank since 1996.
Mr. Kangas retired in 1997 as Chairman of the Board of
Brian Kangas Foulk, a 150 employee civil engineering
firm with several offices in the San Francisco Bay
Area. He was President and Chief Executive Officer of
that firm from 1975 to 1995. He currently serves as a
civil engineering consultant specializing in
engineering litigation. Mr. Kangas also serves on the
Boards of Directors of the Redwood City Library
Foundation, the San Carlos Youth Center Foundation and
the Boys and Girls Club of the Peninsula.
George M. Marcus Director of Greater Bay Bancorp since 1998. He has also
(59) served as a director of Mid-Peninsula Bank since 1987.
Mr. Marcus is the founder of The Marcus & Millichap
Company, the nation's fourth largest commercial real
estate brokerage firm, and currently serves as a
director of such firm. He also serves as director of
Essex Property Trust, a real estate investment trust
company. Mr. Marcus is an advisor to the University of
California, Berkeley Center for Real Estate and Urban
Economics, and serves on the Board of Trustees of the
Fine Arts Museums of San Francisco.
Duncan L. Matteson Chairman of the Board of Directors of Greater Bay
(66) Bancorp since December 2000. He served as Co-Chairman
from November 1996 until December 2000. He has also
served as Chairman of the Board of Mid-Peninsula Bank
since 1987 and as a director of Golden Gate Bank since
May 1998. Mr. Matteson serves as President of the
Matteson Companies, a diversified group of real estate
investment and property management corporations located
in Redwood City. He has actively involved himself in
the real estate investment and securities industries in
the Palo Alto/Menlo Park Area since 1959. Mr. Matteson
is a member of the Executive Committee of the Stanford
Heart Council, and serves as a trustee of the Palo Alto
Medical Foundation. As an appointee of the Governor,
Mr. Matteson is Vice President of the Board of
Directors of the Cow Palace.
20
Name and Age Principal Occupation and Business Experience
--------------------------------------------------------------------------------
Rebecca Q. Morgan Director of Greater Bay Bancorp since July 1998. In
(62) December 1998, Ms. Morgan retired as President and
Chief Executive Officer of Joint Venture: Silicon
Valley Network, a non-profit organization devoted to
regional economic and community issues. Ms. Morgan
served in that position since September 1993. Ms.
Morgan also serves as a director of PG&E Corporation.
Class II Continuing
-------------------
Directors
---------
John M. Gatto Vice Chairman of Greater Bay Bancorp since December
(62) 2000. He served as Co-Chairman of Greater Bay Bancorp
from November 1996 to December 2000. He has also served
as a director of Cupertino National Bank since 1984,
Mid-Peninsula Bank since 1996, Peninsula Bank of
Commerce since December 2000 and Bank of Santa Clara
since July 2000. Mr. Gatto has been the sole proprietor
of Maria Enterprises, a real estate development
consulting company, since December 1993. From 1984 to
1993, Mr. Gatto was an architect for Cypress
Properties, a real estate development company.
John J. Hounslow Director of Greater Bay Bancorp since February 2000.
(70) Mr. Hounslow has also served as Chairman of Mt. Diablo
National Bank since 1992. From July 1998 to January
2000, Mr. Hounslow served as Chairman and Chief
Executive Officer of Mt. Diablo Bancshares. He is also
Chairman, President and Chief Executive Officer of J.L.
Hall and Co., a cable and wire assembly company serving
the telecommunications industry, and a director of
Delicato Vineyards.
Daniel C. Libarle Director of Greater Bay Bancorp since October 2000. He
(59) has also served as Chairman of Bank of Petaluma since
1987. Mr. Libarle has been the President of Lace House
Linen Inc. since 1963.
Dick J. Randall Director of Greater Bay Bancorp since November 1996. He
(69) has also served as a director of Cupertino National
Bank since 1984. Mr. Randall has been a private
investor and rancher since 1993. From 1962 until his
retirement in 1993, Mr. Randall served as president of
The William Lyon Co., a real estate development and
construction company. Mr. Randall was one of the
founding directors of the New Children's Shelter in San
Jose, California.
Donald H. Seiler Director of Greater Bay Bancorp since 1994. He served
(72) as Vice Chairman of Greater Bay Bancorp from August
1999 to December 2000. He also served as a director of
Mid-Peninsula Bank from 1987 to 1998. He is the founder
and managing partner of Seiler & Company, LLP,
Certified Public Accountants, in Redwood City and San
Francisco. He has been a certified public accountant in
San Francisco and the Peninsula area since 1952. He is
presently a director of Ross Stores, Inc. and the
Peninsula Community Foundation and serves on the audit
committee of Stanford Health Services.
James C. Thompson Director of Greater Bay Bancorp since May 2000. He has
(61) also served as Chairman of Coast Commercial Bank since
1982. Mr. Thompson has been a partner with the Santa
Cruz law firm of Comstock, Thompson, Kovitz & Brenner
since 1989.
T. John Whalen Director of Greater Bay Bancorp since July 2000. He has
(64) also served as Chairman of Bank of Santa Clara since
1973. Mr. Whalen has been a Professor of Economics at
Santa Clara University since 1962.
21
Name and Age Principal Occupation and Business Experience
--------------------------------------------------------------------------------
Class III Continuing
--------------------
Directors
---------
David L. Kalkbrenner President, Chief Executive Officer and a director of
(61) Greater Bay Bancorp since 1994. Mr. Kalkbrenner also
serves as a director of Bay Bank of Commerce, Bank of
Petaluma, Coast Commercial Bank, Cupertino National
Bank, Mt. Diablo National Bank and Mid-Peninsula Bank.
He was a founder of Mid-Peninsula Bank and was
appointed President and Chief Executive Officer when
the bank was chartered in 1987, positions he held
through March 1998. He was employed by Crocker National
Bank from 1963 to 1986 and held positions as First Vice
President, Regional Manager and Regional Vice
President.
Rex D. Lindsay Director of Greater Bay Bancorp since November 1996. He
(75) served as Vice Chairman from November 1996 to December
2000. He has also served as a director of Cupertino
National Bank since 1984. For approximately the past
seven years, Mr. Lindsay has been a rancher and a
private investor.
Glen McLaughlin Director of Greater Bay Bancorp since November 1996. He
(66) has also served as a director of Cupertino National
Bank since 1984. Mr. McLaughlin has also served as the
President and Chief Executive Officer of Venture
Leasing Associates, an equipment leasing company, since
December 1986.
Linda R. Meier Director of Greater Bay Bancorp since February 2001.
(60) She also serves on the Board of Directors of California
Water Service Company. Ms. Meier devotes a substantial
amount of time to many charitable and civic
organizations, including directorships or trusteeships
with Peninsula Community Foundation, California Academy
of Science, Stanford University Athletic Board and Haas
Center for Public Service. She also serves as the Vice
Chair of the Campaign for Undergraduate Education and
Chair of its National Outreach Program.
Warren R. Thoits Director of Greater Bay Bancorp since 1994. He has also
(78) served as a director of Mid-Peninsula Bank since 1987.
He is a partner with the Palo Alto law firm of Thoits,
Love, Hershberger & McLean. He is a native of Palo Alto
and a graduate of Stanford University and its School of
Law. Mr. Thoits has been very active in community and
charitable organizations, having served as President of
the Palo Alto Chamber of Commerce, the Palo Alto Rotary
Club and as Chairman of the Palo Alto Area Chapter of
the American Red Cross.
The Board recommends that you vote "FOR" the election of all five Class I
Nominees for director.
Proposal 2: Approve Amendment to Bylaws
The Board of Directors has adopted, subject to shareholder approval, an
amendment to Section 1(a) of Article IVof the Company's Bylaws to increase the
range of authorized directors from 9 to 17, to a range of 11 to 21. The full
text of this proposed amendment to the Bylaws is set forth below:
Section 1. Number of Directors. (a) The authorized number of directors
-------------------
shall be no less than eleven (11) nor more than twenty-one (21). The exact
number of directors shall be fixed and may be changed from time to time by
a resolution adopted by the Board of Directors.
Increasing the maximum range of directors as proposed would provide the
Board with the flexibility to add to the Board qualified persons whose service
on the Board would benefit the Company without having
22
to call a special meeting of shareholders or wait until the next scheduled
annual meeting to amend the Bylaws. In accordance with California law, which
provide that the maximum number of directors may not exceed the minimum by more
than two times the minimum minus one, we are also proposing to increase the
minimum from 9 to 11.
The Board of Directors recommends that you vote "FOR" approval of this amendment
to the Bylaws.
Proposal 3: Ratify Selection of Independent Public Accountants for 2001
The Board of Directors has appointed PricewaterhouseCoopers LLP as our
independent public accountants for the year ending December 31, 2001, and
shareholders are being asked to ratify the appointment. The appointment was
recommended by the Audit Committee. PricewaterhouseCoopers LLP, our accountants
for the year ended December 31, 2000, performed audit services for 2000 which
included the examination of the consolidated financial statements and services
related to filings with the SEC. All professional services rendered by
PricewaterhouseCoopers LLP during 2000 were furnished at customary rates and
terms. Representatives of PricewaterhouseCoopers LLP will be present at the
Annual Meeting and will be available to respond to appropriate questions from
shareholders.
The following table sets forth the aggregate fees the Company incurred for
audit and non-audit services provided by PricewaterhouseCoopers LLP, who acted
as independent accountants for the year ended December 31, 2000. In determining
the independence of PricewaterhouseCoopers LLP, the Audit Committee considered
whether the provision of non-audit services is compatible with maintaining that
independence.
December 31, 2000
-----------------
Audit fees............................................................. $ 565,542
-----------
Financial information systems design
and implementation fees................................................ - 0 -
Other fees:
Tax services......................................................... 230,500
Due diligence and SEC matters for mergers & acquisitions............. 397,467
Internal audit....................................................... 375,450
SEC matters related to issuance of equity & trust
preferred securities................................................. 129,200
Miscellaneous........................................................ 104,042
-----------
1,236,659
-----------
Total $ 1,802,201
===========
The Board recommends that you vote "FOR" ratification of the selection of
PricewaterhouseCoopers LLP as Independent Public Accountants for 2001.
OTHER BUSINESS
We know of no other business which will be presented for consideration at
the Annual Meeting other than as stated in the Notice of Annual Meeting. If,
however, other matters are properly brought before the meeting, it is the
intention of the persons named as proxies in the enclosed proxy card to vote the
shares represented thereby in accordance with their best judgment and in their
discretion, and authority to do so is included in the proxy.
INFORMATION ABOUT SHAREHOLDER PROPOSALS
Under certain circumstances, shareholders are entitled to present proposals
at shareholder meetings. If you wish to submit a proposal to be included in our
2002 proxy statement, we must receive it, in a form which complies with the
applicable securities laws, on or before December 14, 2001. Please address your
proposals to: Greater Bay Bancorp, 400 Emerson Street, Palo Alto, California
94301, Attention: Corporate Secretary.
23
In addition, in the event a shareholder proposal is not submitted to us
prior to February 27, 2002, the proxy to be solicited by the Board of Directors
for the 2002 Annual Meeting of Shareholders will confer authority on the holders
of the proxy to vote the shares in accordance with their best judgment and
discretion if the proposal is presented at the 2002 Annual Meeting of
Shareholders without any discussion of the proposal in the proxy statement for
such meeting.
By Order of the Board of Directors,
/s/ Linda M. Iannone
Linda M. Iannone
Corporate Secretary
April 13, 2001
24
Appendix A
----------
Charter of the Audit Committee of the Board of Directors
of Greater Bay Bancorp
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
. Monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.
. Monitor the independence and performance of the Company's
independent auditors and internal audit function.
. Provide an avenue of communications among the independent
auditors, management and the Board of Directors.
The Audit Committee and the Board of Directors have the ultimate
authority and responsibility to select evaluate, and where appropriate, replace
the independent auditors. The Audit Committee has the authority to conduct any
investigation appropriate to fulfilling its responsibilities, and it has direct
access to the independent auditors as well as anyone in the organization. The
Audit Committee has the ability to retain, at the Company's expense, special
legal, accounting, or other consultants or experts it deems necessary in the
performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of The Nasdaq Stock
Market. The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent non-executive
directors, free from any relationship that would interfere with the exercise of
his or her independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee shall
have accounting or related financial management expertise.
Audit Committee members shall be appointed by the Board. If an audit
Committee Chair is not designated or present, the members of the Committee may
designate a Chair by majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. A quorum of the Committee will be declared
when a majority of the appointed members of the Committee are in attendance. The
Audit Committee Chair shall prepare and/or approve an agenda in advance of each
meeting. The Committee should meet privately in executive session at least
annually with management, the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups believe should be
discussed. In addition, the Committee, or its Chair, should communicate with
management and the independent auditors' quarterly to review the Company's
financial statements and significant findings based upon the auditors limited
review procedures.
III. Audit Committee Responsibilities and Duties
The Audit Committee will have the following responsibilities and duties:
A-1
Review Procedures
-----------------
1. Review and reassess the adequacy of this Charter at least annually. Submit
the charter to the Board of Directors for approval and have the document
published at least every three years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements prior to filing or
distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting principles,
practices, and judgments.
3. In consultation with management and the independent auditors, consider the
integrity of the Company's financial reporting processes and controls.
Discuss significant financial risk exposures and the steps management has
taken to monitor, control, and report such exposures. Review significant
findings prepared by the independent auditors together with management's
responses.
4. Review with financial management and the independent auditors the Company's
quarterly financial results prior to the release of earnings and/or the
Company's quarterly financial statements prior to filing or distribution.
Discuss any significant changes to the Company's accounting principles and
any items required to be communicated by the independent auditors in
accordance with the American Institute of Certified Public Accountants
(AICPA) Statement on Auditing Standards (SAS) 61 (see item 9). The Chair of
the Committee may represent the entire Audit Committee for purposes of this
review.
Independent Auditors
--------------------
5. The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors as representatives of the shareholders. The
Audit Committee shall review the independence and performance of the
auditors and annually recommend to the Board of Directors the appointment
of the independent auditors or approve any discharge of auditors when
circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, review and discuss with the independent auditors all
significant relationships they have with the Company that could impair the
auditors' independence. The Committee shall ensure that the independent
auditors deliver to the Committee a formal written statement delineating
all relationships between the auditors and the Company.
8. Review the independent auditors audit plan - discuss scope, staffing,
locations, reliance upon management, and internal audit and general audit
approach.
9. Prior to releasing the year-end earnings, discuss the results of the audit
with the independent auditors. The independent auditors will review matters
required to be communicated to audit committees in accordance with AICPA
SAS 61.
10. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
Internal Audit and Legal Compliance
-----------------------------------
11. Review the budget, plan, changes in plan, activities, organizational
structure, and qualifications of the internal audit function, as needed.
12. Review the appointment, performance, and replacement of the internal audit
outsource provider or senior internal audit service executive if
applicable.
A-2
13. Review significant reports prepared by the internal auditors together with
management's response and follow-up to these reports.
14. On at least an annual basis, review with the Company's counsel, any legal
matters that could have a significant impact on the organization's
financial statements, the Company's compliance with applicable laws and
regulations, and inquiries received from regulators or governmental
agencies.
Other Audit Committee Responsibilities
--------------------------------------
15. Review and evaluate risk management policies in light of business strategy,
capital strength, and overall risk tolerance.
16. Annually prepare a report to shareholders as required by the SEC. The
report should be included in the Company's annual proxy statement.
17. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
18. Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems necessary
or appropriate.
A-3
[LOGO OF GREATER BAY BANCORP]
[MAP] Annual Meeting of Shareholders
Tuesday, May 15, 2001
10:30 a.m.
Hotel Sofitel
223 Twin Dolphin Drive
Redwood City, California
(650) 598-9000
[LOGO OF GREATER BAY BANCORP]
2860 West Bayshore Road
Palo Alto, California 94303 PROXY
--------------------------------------------------------------------------------
This proxy is solicited by the Board of Directors for use at the Annual Meeting
on May 15, 2001.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify on this proxy.
If no choice is specified, the proxy will be voted "FOR" Items 1, 2 and 3.
By signing the proxy, you revoke all prior proxies and appoint David L.
Kalkbrenner, Steven C. Smith, and Linda M. Iannone, and each of them, with full
power of substitution, to vote your shares on the matters shown on the reverse
side and any other matters which may come before the Annual Meeting and all
adjournments. The Board of Directors at present knows of no other business to be
presented by or on behalf of Greater Bay Bancorp or the Board of Directors at
the meeting.
See reverse for voting instructions
--------------------------------Please detach here------------------------------
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3
1. Election of directors: 01 James E. Jackson 02 Stanley A. Kangas [_] Vote FOR [_] Vote WITHHELD
03 George M. Marcus 04 Duncan L. Matteson all nominees from all nominees
05 Rebecca Q. Morgan
(Instructions: To withhold authority to vote for any indicated nominee, [____________________________________________________]
write the number(s) of the nominee(s) in the box provided to the right.)
2. Approval of Bylaws amendment increasing the range of authorized [_] For [_] Against [_] Abstain
directors.
3. Ratification of appointment of PricewaterhouseCoopers LLP [_] For [_] Against [_] Abstain
as independent public accountants for the year ending December
31, 2001.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
---
Address Change? Mark Box and indicate changes below: [_] Date___________________________________
[______________________________________________________________]
[______________________________________________]
[______________________________________________]
[______________________________________________________________] Please sign exactly as your name(s) appear on proxy. If
held in joint tenancy, all persons must sign. Trustees,
administrators, etc., should include title and
authority. Corporations should provide full name of
corporation and title of authorized officer signing
the proxy.
[_] I Plan to Attend the Meeting