CA | 77-0387041 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) |
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Information to be included in the report
The December 2nd 8-K also indicated that the Company may decide to accelerate additional stock options during December 2005, depending on the closing sale price of the Company's stock on any particular day.
On December 27, 2005, the Executive Compensation Subcommittee (the "Subcommittee") of the Company's Board of Directors accelerated the vesting of "out of the money" stock options with an exercise price at or above $26.11 (the closing price of the Company's common stock as quoted on Nasdaq on that day). On December 31, 2005, the Subcommittee accelerated the vesting of "out-of-the money" stock options with an exercise price at or above $25.62 (the closing price of the Company's common stock as quoted on Nasdaq on December 30, 2005), as well as "in-the-money" stock options with an exercise price at or above $25.54, which was $0.08 less than the closing price on December 30, 2005. These two actions result in the following:
* The unrecognized stock- based compensation cost estimated for the purpose of SFAS 123R proforma disclosure and eliminated as a result of the acceleration of the vesting of "out-of-the-money" options is approximately $1.1 million.
* The acceleration of "in-the-money" options results in pre-tax compensation expense of approximately $6,000 for the quarter ended December 31, 2005. This will be reported as part of the Company's compensation expense in the quarter ended December 2005.
* The unrecognized stock-based compensation cost estimated for the purpose of SFAS 123R proforma disclosure and eliminated as a result of the acceleration of the vesting of "in-the-money" options is approximately $3.9 million.
Since December 1, 2005, the total number of accelerated options is 1,573,136, representing approximately 24.7% of the Company's outstanding options, of which 185,700 are held by directors (excluding the Chief Executive Officer) and 136,900 are held by executive officers (including the Chief Executive Officer). &nb sp;The weighted average exercise price of all accelerated options is $28.22. All other terms and conditions of the accelerated options, including the number of shares subject to the options and exercise prices, remain unchanged.
As previously reported, all Company directors and executive officers signed an agreement, as a condition to the accelerated vesting of their stock options, providing that they will not sell any shares acquired upon exercise of accelerated options prior to the date that such options would have vested in accordance with the original vesting schedule of the options. All stock options accelerated during December 2005 are subject to these agreements, which are designed to prevent unintended personal benefits to directors and executive officers and to provide an incentive for continued contribution to the long-term operation of the Company. The form of the agreement was filed as Exhibit 10.1 to the previously filed Current Report on Form 8-K.
GREATER BAY BANCORP | ||||||||
Date: January 12, 2006 | By: | /s/ Linda M. Iannone | ||||||
Linda M. Iannone | ||||||||
Senior Vice President, General Counsel and Secretary | ||||||||