SVB Financial Group
SILICON VALLEY BANCSHARES (Form: 10-Q, Received: 08/13/1996 00:00:00)

As filed with the Securities and Exchange Commission on August 13, 1996


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM 10-Q

(MARK ONE)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to ________.

Commission File Number: 33-41102

SILICON VALLEY BANCSHARES
(Exact name of registrant as specified in its charter)

         California                                   94-2856336
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
 incorporation or organization)


           3003 Tasman Drive
        Santa Clara, California                          95054-1191
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code: (408) 654-7282

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

At July 31, 1996, 9,217,351 shares of the registrant's common stock (no par value) were outstanding.


This report contains a total of 26 pages.
1

                                 TABLE OF CONTENTS
                                 -----------------

                                                                 PAGE
                                                                 ----
                         PART I - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1.   INTERIM CONSOLIDATED FINANCIAL STATEMENTS


          CONSOLIDATED BALANCE SHEETS                                 3

          CONSOLIDATED INCOME STATEMENTS                              4

          CONSOLIDATED STATEMENTS OF CASH FLOWS                       5

          NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS          6

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                        10

                          PART II - OTHER INFORMATION
                         ----------------------------

ITEM 1.   LEGAL PROCEEDINGS                                          24

ITEM 2.   CHANGES IN SECURITIES                                      24

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                            24

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS        24

ITEM 5.   OTHER INFORMATION                                          25

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                           25

SIGNATURES                                                           26

2

PART I - FINANCIAL INFORMATION

ITEM 1 - INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

                                                            June 30,     December 31,
                                                              1996           1995
(Dollars in thousands)                                    (Unaudited)
- ------------------------------------------------------------------------------------------

Assets:
Cash and due from banks                                    $   90,323      $   85,187
Federal funds sold and securities purchased under
  agreement to resell                                         372,410         257,138
Investment securities, at fair value                          445,263         321,309
Loans, net of unearned income                                 823,651         738,405
Allowance for loan losses                                     (29,000)        (29,700)
                                                           ----------      ----------
  Net loans                                                   794,651         708,705
Premises and equipment                                          4,311           4,697
Other real estate owned                                         3,733           4,955
Accrued interest receivable and other assets                   25,775          25,596
                                                           ----------      ----------
Total assets                                               $1,736,466      $1,407,587
                                                           ==========      ==========
Liabilities and Shareholders' Equity:
Liabilities:
Noninterest-bearing demand deposits                        $  513,263      $  451,318
Money market and NOW deposits                               1,023,604         773,292
Time deposits                                                  71,680          65,450
                                                           ----------      ----------
  Total deposits                                            1,608,547       1,290,060
Other liabilities                                               8,947          12,553
                                                           ----------      ----------
Total liabilities                                           1,617,494       1,302,613
                                                           ----------      ----------
Shareholders' Equity:
Preferred stock, no par value:
  20,000,000 shares authorized;
  none outstanding
Common stock, no par value:
  30,000,000 shares authorized;
  9,211,790 and 8,963,662 shares outstanding at
  June 30, 1996 and December 31, 1995, respectively            64,048          59,357
Retained earnings                                              56,169          45,855
Net unrealized loss on available-for-sale investments            (856)           (198)
Unearned compensation                                            (389)            (40)
                                                           ----------      ----------
Total shareholders' equity                                    118,972         104,974
                                                           ----------      ----------
Total liabilities and shareholders' equity                 $1,736,466      $1,407,587
                                                           ==========      =========

See notes to interim consolidated financial statements.

3

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS

                                                                  For the three months ended      For the six months ended
                                                                  ---------------------------    -------------------------
                                                                     June 30,      June 30,      June 30,      June 30,
                                                                      1996           1995          1996          1995
(Dollars in thousands, except per share amounts)                   (Unaudited)   (Unaudited)    (Unaudited)   (Unaudited)
- --------------------------------------------------------------------------------------------------------------------------

Interest income:
 Loans                                                                 $21,195       $19,999       $42,300       $40,178
 Investment securities                                                   5,137         2,367         9,416         4,721
 Federal funds sold and securities
   purchased under agreement to resell                                   3,687         1,936         6,508         3,411
                                                                       -------       -------      --------      --------
Total interest income                                                   30,019        24,302        58,224        48,310
                                                                       -------       -------      --------      --------
Interest expense:
    Deposits                                                             9,153         5,936        17,085        11,779
                                                                       -------       -------      --------      --------
Total interest expense                                                   9,153         5,936        17,085        11,779
                                                                       -------       -------      --------      --------
Net interest income                                                     20,866        18,366        41,139        36,531
Provision for loan losses                                                2,065         1,406         3,588         2,761
                                                                       -------       -------      --------      --------
Net interest income after provision
 for loan losses                                                        18,801        16,960        37,551        33,770
                                                                       -------       -------      --------      --------
Noninterest income:
 Disposition of client warrants                                          1,971         1,578         2,262         1,803
 Letter of credit and foreign
   exchange income                                                         855           756         1,734         1,461
 Deposit service charges                                                   445           333           841           685
 Investment gains (losses)                                                   -          (348)            1          (770)
 Other                                                                     283           162           549           280
                                                                       -------       -------      --------      --------
Total noninterest income                                                 3,554         2,481         5,387         3,459
                                                                       -------       -------      --------      --------
Noninterest expense:
 Compensation and benefits                                               7,557         6,767        15,345        13,857
 Professional services                                                   1,472         1,626         2,276         2,589
 Equipment                                                                 939           675         1,592         1,205
 Occupancy                                                                 774           715         1,624         1,647
 Client services                                                           173            44           203           257
 FDIC deposit insurance                                                     91           598           172         1,196
 Data processing services                                                   74           223           200           552
 Cost of other real estate owned                                          (124)           20           326            15
 Corporate legal and litigation                                           (221)          239           (67)          392
 Other                                                                   2,225         1,508         4,077         2,773
                                                                       -------       -------      --------      --------
Total noninterest expense                                               12,960        12,415        25,748        24,483
                                                                       -------       -------      --------      --------
Income before income tax expense                                         9,395         7,026        17,190        12,746
Income tax expense                                                       3,758         3,046         6,876         5,485
Net income                                                             $ 5,637       $ 3,980       $10,314       $ 7,261
                                                                       =======       =======       =======       =======
Net income per common and
    common equivalent share                                              $0.58         $0.44         $1.07         $0.81
                                                                       =======       =======       =======       =======

See notes to interim consolidated financial statements.

4

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                            For the six months ended
                                                            ------------------------
                                                             June 30,      June 30,
                                                               1996          1995
(Dollars in thousands)                                      (Unaudited)   (Unaudited)
- ------------------------------------------------------------------------------------

Cash flows from operating activities:
  Net income                                                 $  10,314      $  7,261
  Adjustments to reconcile net income to net cash
   provided by operating activities:
   Provision for loan losses                                     3,588         2,761
   Net (gain) loss on sales of investment securities                (1)          770
   Depreciation and amortization                                   598         1,193
   Net gain on sales of other real estate owned                   (367)         (124)
   Provision for other real estate owned                           551             -
   Increase (decrease) in unearned income                          391          (485)
   (Increase) decrease in accrued interest receivable           (2,440)          956
   Increase in accounts receivable                                 (10)      (10,450)
   Increase (decrease) in accrued liabilities                   (3,686)        1,758
   Other, net                                                     (809)         (470)
                                                             ---------      --------
Net cash provided by operating activities                        8,129         3,170
                                                             ---------      --------
Cash flows from investing activities:
  Proceeds from maturities and paydowns of
    investment securities                                      523,770        24,379
  Proceeds from sales of investment securities                   6,080        29,609
  Purchases of investment securities                          (651,301)      (32,333)
  Net (increase) decrease in loans                             (91,331)       42,622
  Proceeds from recoveries of charged off loans                  1,406         2,113
  Net proceeds from sales of other real estate owned             1,038         2,079
  Purchases of premises and equipment                             (212)       (3,323)
                                                             ---------      --------
Net cash provided by (applied to) investing activities        (210,550)       65,146
                                                             ---------      --------

Cash flows from financing activities:
  Net increase (decrease) in deposits                          318,487        (4,753)
  Proceeds from issuance of common stock,
   net of issuance costs                                         4,342         4,335
                                                             ---------      --------
Net cash provided by (applied to) financing activities         322,829          (418)
                                                             ---------      --------

Net increase in cash and cash equivalents                      120,408        67,898
Cash and cash equivalents at January 1,                        342,325       289,849
                                                             ---------      --------
Cash and cash equivalents at June 30,                        $ 462,733      $357,747
                                                             =========      ========
Supplemental disclosures:
  Interest paid                                              $  17,062      $ 11,816
  Income taxes paid                                          $   6,641      $  5,318
                                                             =========      ========

See notes to interim consolidated financial statements.

5

SILICON VALLEY BANCSHARES AND SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of Silicon Valley Bancshares (the "Company") and its subsidiaries conform with generally accepted accounting principles and prevailing practices within the banking industry. Certain reclassifications have been made to the Company's 1995 consolidated financial statements to conform to the 1996 presentations. Such reclassifications had no effect on the results of operations or shareholders' equity. The following is a summary of the significant accounting and reporting policies used in preparing the interim consolidated financial statements.

Nature of Operations

The Company is a bank holding company whose principal subsidiary is Silicon Valley Bank (the "Bank"), a California-chartered bank with headquarters in Santa Clara, California. The Bank maintains regional banking offices in Northern and Southern California, and additionally has loan offices in Colorado, Maryland, Massachusetts, Oregon, Texas and Washington. The Bank serves emerging and middle-market growth companies in specific targeted niches, and focuses on the technology and life sciences industries, while identifying and capitalizing on opportunities to serve other groups of clients with unique financial needs. Substantially all of the assets, liabilities, and earnings of the Company relate to its investment in the Bank.

Consolidation

The interim consolidated financial statements include the accounts of the Company and those of its wholly owned subsidiaries, the Bank and SVB Leasing Company (inactive). The revenues, expenses, assets and liabilities of the subsidiaries are included in the respective line items in the interim consolidated financial statements after elimination of intercompany accounts and transactions.

Interim Consolidated Financial Statements

In the opinion of Management, the interim consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's consolidated financial position at June 30, 1996, the results of its operations for the three and six month periods ended June 30, 1996 and June 30, 1995, and the results of its cash flows for the six month periods ended June 30, 1996 and June 30, 1995. The December 31, 1995 consolidated financial statements were derived from audited financial statements, and certain information and footnote disclosures normally presented in financial statements prepared in accordance with generally accepted accounting principles have been omitted.

The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's 1995 Annual Report on Form 10-K. The results of operations for the three and six month periods ended June 30, 1996 may not necessarily be indicative of the Company's operating results for the full year.

6

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Financial Statement Presentation

The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make estimates and judgments that affect the reported amounts of assets and liabilities as of the balance sheet date and the results of operations for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to possible change in the near term relate to the determination of the allowance for loan losses and the valuation of other real estate owned (OREO). An estimate of possible changes or range of possible changes cannot be made.

Net Income Per Share Computation

Net income per common and common equivalent share is calculated using weighted average shares outstanding, including the dilutive effect of stock options outstanding during the period. Weighted average shares outstanding were 9,665,820 and 9,607,069 for the three and six month periods ended June 30, 1996 and 9,033,164 and 8,944,291 for the three and six month periods ended June 30, 1995.

Cash and Cash Equivalents

Cash and cash equivalents as reported in the consolidated statements of cash flows includes cash on hand, cash balances due from banks, federal funds sold and securities purchased under agreement to resell.

Federal Funds Sold and Securities Purchased Under Agreement to Resell

Federal funds sold and securities purchased under agreement to resell as reported in the consolidated balance sheets includes interest-bearing deposits in other financial institutions of $410,000 and $138,000 at June 30, 1996 and December 31, 1995, respectively.

Nonaccrual Loans

Loans are placed on nonaccrual status when they become 90 days past due as to principal or interest payments (unless the principal and interest are well secured and in the process of collection), when the Company has determined that the timely collection of principal or interest is doubtful, or when the loans otherwise become impaired under the provisions of Statement of Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan." When a loan is placed on nonaccrual status, the accrued interest is reversed against interest income and the loan is accounted for on the cash or cost recovery method thereafter until qualifying for return to accrual status. Generally, a loan will be returned to accrual status when all delinquent interest and principal becomes current in accordance with the terms of the loan agreement and full collection of the principal appears probable.

7

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Pronouncements

In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 establishes financial accounting and reporting standards for stock-based compensation plans, including employee stock purchase plans, stock options and restricted stock. SFAS No. 123 encourages all entities to adopt a fair value method of accounting for stock- based compensation plans, whereby compensation cost is measured at the grant date based on the fair value of the award and is realized as an expense over the service or vesting period. However, SFAS No. 123 also allows an entity to continue to measure compensation cost for these plans using the intrinsic value method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," which is the method currently being used by the Company. Under the intrinsic value method, compensation cost is the excess, if any, of the quoted market price of the stock at the grant date or other measurement date over the amount which must be paid to acquire the stock.

The Company adopted SFAS No. 123 effective January 1, 1996, but will continue to account for employee and director stock-based compensation plans under the intrinsic value accounting methodology prescribed by APB Opinion No. 25. SFAS No. 123 requires that stock-based compensation to other parties be accounted for under the fair value method. The effect of adoption of this statement on the interim consolidated financial position and results of operations of the Company was not material.

2. LOANS

The detailed composition of loans is presented in the following table:

                              June 30,   December 31,
(Dollars in thousands)          1996         1995
- ---------------------------   --------   ------------

Commercial                    $691,258       $622,488
Real estate term                58,715         56,845
Real estate construction        31,037         17,194
Consumer and other              42,641         41,878
- ---------------------------   --------       --------
Total loans (1)               $823,651       $738,405
===========================   ========       ========

(1) Loans are presented net of unearned income of $4,204 and $3,813 at June 30, 1996 and December 31, 1995, respectively.

3. ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses for the three and six month periods ended June 30, 1996 and 1995 was as follows:

8

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

3. ALLOWANCE FOR LOAN LOSSES (CONTINUED)

                                         Three Months Ended     Six Months Ended
                                             June 30,               June 30,
                                        -------------------    -----------------
(Dollars in thousands)                    1996       1995      1996       1995

Beginning balance                       $30,200     $21,500    $29,700   $20,000
Provision for loan losses                 2,065       1,406      3,588     2,761
Loans charged off                        (4,056)     (1,552)    (5,695)   (2,374)
Recoveries                                  791       1,146      1,407     2,113
                                        -------     -------    -------   -------
Balance at June 30,                     $29,000     $22,500    $29,000   $22,500
                                        =======     =======    =======   =======

The aggregate recorded investment in loans for which impairment has been realized in accordance with SFAS No. 114 totaled $23.5 million at June 30, 1996. Allocations to the allowance for loan losses at June 30, 1996 related to these loans were $7.9 million. Average impaired loans for the second quarter of 1996 were $25.7 million.

4. REGULATORY MATTERS

During 1993, the Company and the Bank consented to a formal supervisory order by the Federal Reserve Bank of San Francisco and the Bank consented to a formal supervisory order by the California State Banking Department. These orders required, among other actions, the following: suspension of cash dividends; restrictions on transactions between the Company and the Bank without prior regulatory approval; development of a capital plan to ensure the Bank maintains adequate capital levels subject to regulatory approval; development of plans to improve the quality of the Bank's loan portfolio through collection or improvement of the credits within specified time frames; changes to the Bank's loan policies which require the Directors' Loan Committee to approve all loans to any one borrower exceeding $3.0 million and requiring the Board of Directors to become more actively involved in loan portfolio management and monitoring activities; review of, and changes in, the Bank's loan policies to implement (i) policies for controlling and monitoring credit concentrations, (ii) underwriting standards for all loan products, and (iii) standards for credit analysis and credit file documentation; development of an independent loan review function and related loan review policies and procedures; development of Board of Directors oversight programs to establish and maintain effective control and supervision of Management and major Bank operations and activities; development of a plan, including a written methodology, to maintain an adequate allowance for loan losses, defined as a minimum of 2.0% of total loans; development of business plans to establish guidelines for growth and ensure maintenance of adequate capital levels; a review and evaluation of existing compensation practices and development of officer compensation policies and procedures by the Boards of Directors of the Company and the Bank; policies requiring that changes in fees paid to directors as well as bonuses paid to executive officers first receive regulatory approval; and development of a detailed internal audit plan for approval by the Board of Directors of the Bank. The California State Banking Department order further required the Bank to maintain a minimum tangible equity-to-assets ratio of 6.5%. The Federal Reserve Bank removed its supervisory order effective March 27, 1996 and the California State Banking Department terminated its supervisory order effective April 9, 1996.

9

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Earnings Summary

The Company reported net income of $5.6 million, or $0.58 per share, for the second quarter of 1996, compared with net income of $4.0 million, or $0.44 per share, for the second quarter of 1995. Net income totaled $10.3 million, or $1.07 per share, for the six months ended June 30, 1996, versus $7.3 million, or $0.81 per share, for the respective 1995 period. The annualized return on average assets (ROA) was 1.5% for both the second quarter of 1996 and 1995. The annualized return on average equity (ROE) for the second quarter of 1996 was 19.6%, an increase from 18.4% in the 1995 second quarter. For the first six months of 1996, ROA was 1.4% and ROE was 18.4% versus 1.4% and 17.4%, respectively, for the comparable prior year period.

The increase in net income during the three and six month periods ended June 30, 1996, as compared with the prior year respective periods, resulted from growth in net interest income and noninterest income, offset by increases in both the provision for loan losses and noninterest expense. The major components of net income as well as changes in these components are summarized in the following table for the three and six month periods ended June 30, 1996 and 1995, and are discussed in more detail below:

                                Three Months Ended   Six Months Ended
                                     June 30,            June 30,
                                ------------------   -----------------
(Dollars in thousands)            1996      1995      1996      1995

Net interest income              $20,866   $18,366   $41,139   $36,531
Provision for loan losses          2,065     1,406     3,588     2,761
Noninterest income                 3,554     2,481     5,387     3,459
Noninterest expense               12,960    12,415    25,748    24,483
                                 -------   -------   -------   -------
Income before income taxes         9,395     7,026    17,190    12,746
Income tax expense                 3,758     3,046     6,876     5,485
                                 -------   -------   -------   -------
Net income                       $ 5,637   $ 3,980   $10,314   $ 7,261
                                 =======   =======   =======   =======

Net Interest Income and Margin

Net interest income represents the difference between interest earned, primarily on loans and investments, and interest paid on funding sources, primarily deposits, and is the principal source of revenue for the Company. Net interest margin is the amount of net interest income, on a fully taxable-equivalent basis, expressed as a percentage of average interest-earning assets. The average yield earned on interest-earning assets is the amount of taxable-equivalent interest income expressed as a percentage of average interest-earning assets. The average rate paid on funding sources expresses interest expense as a percentage of average interest-earning assets.

The following tables set forth average assets, liabilities and shareholders' equity, interest income and interest expense, average yields and rates, and the composition of the Company's net interest margin for the three and six month periods ended June 30, 1996 and 1995, respectively:

10

AVERAGE BALANCES, RATES AND YIELDS

                                                For the three months ended June 30,
- ---------------------------------------------------------------------------------------------------------------
                                              1996                                          1995
                                            (Unaudited)                                (Unaudited)

                                                                        Average                         Average
                                             Average                     Yield/    Average               Yield/
(Dollars in thousands)                       Balance      Interest       Rate      Balance     Interest   Rate
- ---------------------------------------------------------------------------------------------------------------

Interest-earning assets:
 Federal funds sold and
  securities purchased under
  agreement to resell (1)                  $  279,286    $    3,687        5.3%  $  128,331     $ 1,936    6.1%
 Investment securities:
  Taxable                                     362,881         5,036        5.6      151,088       2,250    6.0
  Non-taxable (2)                               6,307           156        9.9        7,131         180   10.1
 Loans:
  Commercial                                  650,070        18,068       11.2      582,635      17,758   12.2
  Real estate construction and term            75,503         2,185       11.6       64,925       1,691   10.4
  Consumer and other                           43,071           942        8.8       16,682         550   13.2
- ----------------------------------------   ----------    ----------    -------     --------     -------   ----
 Total loans                                  768,644        21,195       11.1      664,242      19,999   12.1
- ----------------------------------------   ----------    ----------    -------     --------     -------   ----
Total interest-earning assets               1,417,118        30,074        8.5      950,792      24,365   10.3
- ----------------------------------------   ----------    ----------    -------     --------     -------   ----

Cash and due from banks                       123,819                               114,058
Allowance for loan losses                     (30,773)                              (22,511)
Other real estate owned                         4,009                                 5,862
Other assets                                   27,004                                20,296
- ----------------------------------------   ----------                            ----------
Total assets                               $1,541,177                            $1,068,497
========================================   ==========                            ==========

Funding sources:
Interest-bearing liabilities:
 Money market, NOW and
  savings deposits                         $  897,408         8,489        3.8     $553,494       5,418    3.9
 Time deposits                                 67,932           664        3.9       59,949         518    3.5
- ----------------------------------------   ----------    ----------    -------   ----------     -------   ----
Total interest-bearing liabilities            965,340         9,153        3.8      613,443       5,936    3.9
Portion of noninterest-bearing
 funding sources                              451,778                               337,349
- ----------------------------------------   ----------                            ----------
Total funding sources                       1,417,118         9,153        2.6      950,792       5,936    2.5
- ----------------------------------------   ----------    ----------    -------   ----------     -------   ----

Noninterest-bearing funding sources:
Demand deposits                               449,636                               355,243
Other liabilities                              10,463                                13,220
Portion used to fund interest-earning
 assets                                      (451,778)                             (337,349)
Shareholders' equity                          115,738                                86,591
- ----------------------------------------   ----------                            ----------
Total liabilities and shareholders'
 equity                                    $1,541,177                            $1,068,497
========================================   ==========                            ==========
Net interest income and margin                           $   20,921       5.9%                  $18,429    7.8%
========================================                 ==========    =======                  =======   ====

Memorandum:  Total deposits                $1,414,976                            $  968,686
========================================   ==========                            ==========

(1) Includes average interest-bearing deposits in other financial institutions of $418 and $78 for the three months ended June 30, 1996 and 1995, respectively.

(2) Interest income on non-taxable investments is presented on a fully taxable- equivalent basis. The tax equivalent adjustments were $55 and $63 for the three months ended June 30, 1996 and 1995, respectively.

11

AVERAGE BALANCES, RATES AND YIELDS

                                                              For the six months ended June 30,
                                           --------------------------------------------------------------------------
                                                            1996                                   1995
                                                         (Unaudited)                            (Unaudited)
                                                                       Average                                Average
                                             Average                    Yield/      Average                    Yield/
(Dollars in thousands)                       Balance      Interest       Rate       Balance      Interest       Rate
- ---------------------------------------------------------------------------------------------------------------------

Interest-earning assets:
 Federal funds sold and
  securities purchased under
  agreement to resell (1)                  $  244,294    $    6,508        5.4%   $  116,346       $ 3,411        5.9%
 Investment securities:
  Taxable                                     330,977         9,214        5.6       152,470         4,482        5.9
  Non-taxable (2)                               6,218           311       10.1         7,257           367       10.2
 Loans:
  Commercial                                  628,884        35,998       11.5       598,406        35,716       12.0
  Real estate construction and term            73,820         4,359       11.9        67,628         3,444       10.3
  Consumer and other                           43,097         1,943        9.1        17,433         1,018       11.8
- ----------------------------------------   ----------    ----------       ----    ----------       -------       ----
 Total loans                                  745,801        42,300       11.4       683,467        40,178       11.9
- ----------------------------------------   ----------    ----------       ----    ----------       -------       ----
Total interest-earning assets               1,327,290        58,333        8.8       959,540        48,438       10.2
- ----------------------------------------   ----------    ----------       ----    ----------       -------       ----

Cash and due from banks                       127,408                                117,228
Allowance for loan losses                     (30,399)                               (22,040)
Other real estate owned                         4,464                                  6,190
Other assets                                   27,998                                 19,831
- ----------------------------------------   ----------                             ----------
Total assets                               $1,456,761                             $1,080,749
========================================   ==========                             ==========

Funding sources:
Interest-bearing liabilities:
 Money market, NOW and
  savings deposits                         $  831,365        15,800        3.8    $  567,544        10,693        3.8
 Time deposits                                 66,101         1,285        3.9        64,052         1,086        3.4
- ----------------------------------------   ----------    ----------       ----    ----------       -------       ----
Total interest-bearing liabilities            897,466        17,085        3.8       631,596        11,779        3.8
Portion of noninterest-bearing
 funding sources                              429,824                                327,944
- ----------------------------------------   ----------                             ----------
Total funding sources                       1,327,290        17,085        2.6       959,540        11,779        2.5
- ----------------------------------------   ----------    ----------       ----    ----------       -------       ----

Noninterest-bearing funding sources:
Demand deposits                               435,052                                352,906
Other liabilities                              11,280                                 12,213
Portion used to fund interest-earning
 assets                                      (429,824)                              (327,944)
Shareholders' equity                          112,963                                 84,034
- ----------------------------------------   ----------                             ----------
Total liabilities and shareholders'
 equity                                    $1,456,761                             $1,080,749
========================================   ==========                             ==========

Net interest income and margin                           $   41,248        6.3%                    $36,659        7.7%
========================================                 ==========       ====                     =======       ====

Memorandum:  Total deposits                $1,332,518                             $  984,502
========================================   ==========                             ==========

(1) Includes average interest-bearing deposits in other financial institutions of $310 and $628 for the six months ended June 30, 1996 and 1995, respectively.
(2) Interest income on non-taxable investments is presented on a fully taxable- equivalent basis. The tax equivalent adjustments were $109 and $128 for the six months ended June 30, 1996 and 1995, respectively.

12

Net interest income is affected by changes in the amount and mix of interest- earnings assets and interest-bearing liabilities, referred to as "volume change." Net interest income is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities, referred to as "rate change." The following table sets forth changes in interest income and interest expense for each major category of interest-earning assets and interest-bearing liabilities. Changes which are the combined result of volume and rate changes have been allocated to volume. Changes relating to investment securities are presented on a fully taxable-equivalent basis using the federal statutory rate of 35% in 1996 and 1995.

                                                                            1996 Versus 1995
                                                          -----------------------------------------------------------
                                                             Three Months Ended                 Six Months Ended
                                                                  June 30,                          June 30,
                                                             -------------------                ----------------
                                                              Increase (Decrease)              Increase (Decrease)
                                                               Due to Change in                 Due to Change in
                                                               ----------------                 ----------------
(Dollars in thousands)                                    Volume     Rate     Total    Volume      Rate      Total
- ---------------------------------------------             ------   --------   ------   -------   --------   --------

Interest income:
  Federal funds sold and
    securities purchased under
    agreement to resell                                   $1,993   $  (242)   $1,751   $ 3,409   $  (312)     $3,097
  Investment securities                                    2,967      (205)    2,762     5,013      (337)      4,676
  Loans                                                    2,879    (1,683)    1,196     3,535    (1,413)      2,122
- ---------------------------------------------             ------   -------    ------   -------   -------      ------
Increase (decrease) in interest income                     7,839    (2,130)    5,709    11,957    (2,062)      9,895
- ---------------------------------------------             ------   -------    ------   -------   -------      ------

Interest expense:
  Money market, NOW and
    savings deposits                                       3,253      (182)    3,071     5,014        93       5,107
  Time deposits                                               78        68       146        40       159         199
- ---------------------------------------------             ------   -------    ------   -------   -------      ------
Increase (decrease) in interest expense                    3,331      (114)    3,217     5,054       252       5,306
- ---------------------------------------------             ------   -------    ------   -------   -------      ------
Increase (decrease) in net interest income                $4,508   $(2,016)   $2,492   $ 6,903   $(2,314)     $4,589
=============================================             ======   =======    ======   =======   =======      ======

Net interest income, on a fully taxable-equivalent basis, totaled $20.9 million for the second quarter of 1996, an increase of $2.5 million, or 13.5%, from the $18.4 million total for the second quarter of 1995. The increase in net interest income was the result of a $5.7 million, or 23.4%, increase in interest income, offset by a $3.2 million, or 54.2%, increase in interest expense over the comparable prior year period.

The $5.7 million increase in interest income for the second quarter of 1996, as compared to the second quarter of 1995, was the result of a $7.8 million favorable volume variance offset by a $2.1 million unfavorable rate variance. The favorable volume variance resulted from a $466.3 million, or 49.0%, increase in average interest-earning assets over the comparable prior year period. The increase in average interest-earning assets resulted from growth in the Company's deposits and was comprised of increases in loans, investment securities, and liquid investments in federal funds sold and securities purchased under agreement to resell. The growth in average loans, which were up $104.4 million, or 15.7%, compared to the second quarter of 1995, primarily resulted from an increase in commercial loans and personal lines of credit offered to executives of clients. Average investment securities for the second quarter of 1996 increased $211.0 million, or 133.3%, over the respective prior year period, as a portion of the funds generated from the deposit growth were primarily invested in notes issued by U.S. agencies as well as in commercial paper. Average federal funds sold and securities purchased under agreement to resell were up a combined $151.0 million, or 117.6%, over the comparable 1995 period.

13

Interest income for the second quarter of 1996 decreased $2.1 million from the comparable prior year period due to an unfavorable rate variance. The unfavorable rate variance was the result of a decline in market interest rates during the last half of 1995 and the first quarter of 1996. Lower yields on loans in the 1996 second quarter accounted for $1.7 million of the total unfavorable rate variance, as a substantial portion of the Company's loans are prime-rate based. The remaining $0.4 million portion of the total unfavorable rate variance was attributed to lower yields on federal funds sold and securities purchased under agreement to resell, and investment securities.

The overall decrease in the yield on average interest-earning assets of 180 basis points for the second quarter of 1996, as compared to the second quarter of 1995, was due to a combination of the decline in market interest rates and a shift in the composition of average interest-earning assets towards lower- yielding liquid investments in federal funds sold and securities purchased under agreement to resell, and investment securities. This shift in the composition of average interest-earning assets resulted from the liquidity generated by the aforementioned growth in the Company's deposits, which exceeded the growth in loans.

Total interest expense in the 1996 second quarter increased $3.2 million from the 1995 second quarter. This increase was due to an unfavorable volume variance of $3.3 million slightly offset by a $0.1 million favorable rate variance. The unfavorable volume variance resulted from a $351.9 million, or 57.4%, increase in average interest-bearing liabilities in the second quarter of 1996 as compared with the second quarter of 1995. This increase was concentrated in higher-rate money market deposits, and was attributable to market conditions combined with the successful business development efforts of the Company. Changes in the rates paid on average interest-bearing liabilities had a $0.1 million favorable impact on interest expense in the second quarter of 1996, as the average rate paid on interest-bearing liabilities decreased 10 basis points from the second quarter of 1995. This slight decrease resulted from a reduction in the rates paid on interest-bearing liabilities due to the declining interest rate environment during the last half of 1995 and the first quarter of 1996, offset by a shift in the composition of average interest-bearing liabilities towards the aforementioned higher-rate money market deposits.

Net interest income, on a fully taxable-equivalent basis, totaled $41.2 million for the first six months of 1996, an increase of $4.6 million, or 12.5%, from the $36.7 million total for the first six months of 1995. The increase in net interest income was the result of a $9.9 million, or 20.4%, increase in interest income for the first half of 1996, offset by a $5.3 million, or 45.0%, increase in interest expense over the comparable prior year period.

The $9.9 million increase in interest income for the first half of 1996, as compared to the first half of 1995, was the result of a $12.0 million favorable volume variance offset by a $2.1 million unfavorable rate variance. The favorable volume variance resulted from a $367.8 million, or 38.3%, increase in average interest-earning assets over the comparable prior year period. As with the 1996 second quarter, the increase in average interest-earning assets for the first six months of 1996, compared with the first six months of 1995, was comprised of increases in loans, investment securities, and liquid investments in federal funds sold and securities purchased under agreement to resell, and resulted from growth in the Company's deposits. The unfavorable rate variance was attributable to the decline in market interest rates during the last half of 1995 and the first quarter of 1996.

14

The overall decrease in the yield on average interest-earning assets of 140 basis points for the first six months of 1996, over the comparable period in 1995, was due to a combination of the decline in market interest rates and a shift in the composition of average interest-earning assets towards lower- yielding liquid investments in federal funds sold and securities purchased under agreement to resell, and investment securities. This shift in the composition of average interest-earning assets resulted from the liquidity generated by the aforementioned growth in the Company's deposits, which exceeded the growth in loans.

Total interest expense for the first half of 1996 increased $5.3 million from the first half of 1995. This increase was due to unfavorable volume and rate variances of $5.1 million and $0.3 million, respectively. The unfavorable volume variance resulted from a $265.9 million, or 42.1%, increase in average interest- bearing liabilities for the first six months of 1996 over the comparable prior year period. This increase was concentrated in higher-rate money market deposits, and was attributable to market conditions combined with the successful business development efforts of the Company. Changes in the rates paid on average interest-bearing liabilities had a $0.3 million unfavorable impact on interest expense for the first half of 1996, as compared to the respective 1995 period. This slight increase in interest expense resulted from a shift in the composition of interest-bearing liabilities towards the aforementioned higher- rate money market deposits, and was offset by a reduction in the rates paid on average interest-bearing liabilities due to the declining interest rate environment during the last half of 1995 and the first quarter of 1996.

Provision For Loan Losses

The provision for loan losses is based on Management's evaluation of the adequacy of the existing allowance for loan losses in relation to total loans, and on Management's continuous assessment of the inherent and identified risk dynamics of the loan portfolio resulting from reviews of selected individual loans and loan commitments.

The provision for loan losses totaled $2.1 million for the second quarter of 1996, a $0.7 million, or 46.9%, increase as compared to the $1.4 million provision for the second quarter of 1995. The provision for loan losses increased $0.8 million, or 30.0%, to $3.6 million for the first six months of 1996, versus $2.8 million for the comparable 1995 period. See "Financial Condition - Credit Quality and the Allowance for Loan Losses" for additional related discussion.

Noninterest Income

The following table summarizes the components of noninterest income for the three and six month periods ended June 30, 1996 and 1995:

                                                  Three Months Ended    Six Months Ended
                                                       June 30,             June 30,
                                                  -------------------   -----------------
(Dollars in thousands)                              1996       1995      1996      1995
- --------------------------------------------      --------   -------    -------   ------

Disposition of client warrants                      $1,971    $1,578     $2,262   $1,803
Letter of credit and foreign exchange income           855       756      1,734    1,461
Deposit service charges                                445       333        841      685
Investment gains (losses)                                -      (348)         1     (770)
Other                                                  283       162        549      280
- --------------------------------------------      --------   -------    -------   ------
Total noninterest income                            $3,554    $2,481     $5,387   $3,459
============================================      ========   =======    =======   ======

15

Total noninterest income for the three and six month periods ended June 30, 1996 was $3.6 million and $5.4 million, an increase of $1.1 million and $1.9 million, respectively, from the $2.5 million and $3.5 million totals for the comparable 1995 periods. The increase in noninterest income during 1996 was primarily due to an increase in income from the disposition of client warrants and a decrease in losses incurred through sales of investment securities.

Income from the disposition of client warrants was $2.0 million in the second quarter of 1996 and $2.3 million for the first six months of 1996 versus $1.6 million and $1.8 million for the respective 1995 periods. The Company has historically obtained rights to acquire stock (in the form of warrants) in certain nonpublic clients as part of negotiated credit facilities. The receipt of warrants does not change the loan covenants or other collateral control techniques employed by the Company to mitigate the risk of a loan becoming nonperforming. Interest rates, loan fees and collateral requirements on loans with warrants are similar to lending arrangements where warrants are not obtained. The timing and amount of income from the disposition of client warrants typically depends upon factors beyond the control of the Company, including the general condition of the capital markets, and therefore cannot be predicted with any degree of accuracy and is likely to vary materially from period to period.

Letter of credit fees, foreign exchange fees and other trade finance income increased to $0.9 million during the 1996 second quarter, and $1.7 million for the first six months of 1996, compared to $0.8 million for the 1995 second quarter and $1.5 million for the first six months of 1995. The growth in this category of noninterest income reflects a concerted effort by Management to expand the penetration of trade finance-related services among the Company's client base.

Deposit service charges totaled $0.4 million and $0.8 million for the three and six month periods ended June 30, 1996, respectively, versus $0.3 million and $0.7 million for the comparable 1995 periods. Clients compensate the Company for depository services either through earnings credits computed on their demand deposit balances, or via explicit payments recognized as deposit service charges. The increase during 1996 was primarily related to an increase in the number of clients incurring deposit service charges.

The Company incurred no gains or losses on sales of investment securities in the second quarter of 1996 and realized a nominal gain on sales of investment securities during the first six months of 1996. The Company incurred $0.3 million and $0.8 million in losses through such sales during the 1995 second quarter and the first six months of 1995, respectively. The securities sold during both the first and second quarters of 1995 were primarily mortgage-backed securities. All sales of investment securities were conducted as a normal component of the Company's interest rate risk and liquidity management activities.

Other noninterest income is comprised primarily of service-based fee income, and increased to $0.3 million and $0.5 million for the 1996 second quarter and the first six months of 1996, respectively, from $0.2 million and $0.3 million for the comparable prior year periods. The increase during 1996 was primarily due to increased examination fees on client accounts receivable.

16

Noninterest Expense

Noninterest expense during the second quarter of 1996 totaled $13.0 million, a $0.5 million, or 4.4%, increase from the $12.4 million incurred in the comparable 1995 period. Noninterest expense was $25.7 million for the first six months of 1996, an increase of $1.3 million, or 5.2%, over the $24.5 million total for the comparable 1995 period. Management closely monitors the level of noninterest expense using a variety of financial ratios, including the efficiency ratio. The efficiency ratio is calculated by dividing the amount of noninterest expense, excluding costs associated with other real estate owned, by adjusted revenues, defined as the total of net interest income and noninterest income, excluding income from the disposition of client warrants and gains or losses incurred through sales of investment securities. This ratio reflects the level of operating expense required to generate $1 of operating revenue. The Company's efficiency ratio improved to 58.3% for the 1996 second quarter, down from 63.2% for the second quarter of 1995. The Company's efficiency ratio for the first six months of 1996 was 57.4%, versus 62.8% for the comparable 1995 period. The following table presents the detail of noninterest expense and the incremental contribution of each line item to the Company's efficiency ratio:

                                                Three Months Ended June 30,
                                     ----------------------------------------------
                                              1996                    1995
                                     ----------------------   ---------------------
                                                Percent of              Percent of
                                                 Adjusted                Adjusted
            (Dollars in thousands)    Amount     Revenues     Amount     Revenues
- ----------------------------------   --------   -----------   -------   -----------

Compensation and benefits            $ 7,557          33.7%   $ 6,767         34.5%
Professional services                  1,472           6.6      1,626          8.3
Equipment                                939           4.2        675          3.4
Occupancy                                774           3.4        715          3.6
Client services                          173           0.8         44          0.2
FDIC deposit insurance                    91           0.4        598          3.0
Data processing services                  74           0.3        223          1.1
Corporate legal and litigation          (221)         (1.0)       239          1.2
Other                                  2,225           9.9      1,508          7.7
- ----------------------------------   -------          ----    -------         ----
Total excluding cost of other
  real estate owned                   13,084          58.3%    12,395         63.2%
Cost of other real estate owned         (124)                      20
- ----------------------------------   -------                  -------
Total noninterest expense            $12,960                  $12,415
==================================   =======                  =======

17

                                                Six Months Ended June 30,
                                     ----------------------------------------------
                                              1996                    1995
                                     ----------------------   ---------------------
                                                Percent of              Percent of
                                                 Adjusted                Adjusted
      (Dollars in thousands)          Amount     Revenues     Amount     Revenues
- ----------------------------------   --------   -----------   -------   -----------

Compensation and benefits            $15,345          34.7%   $13,857         35.6%
Professional services                  2,276           5.1      2,589          6.6
Equipment                              1,592           3.6      1,205          3.1
Occupancy                              1,624           3.7      1,647          4.2
Client services                          203           0.5        257          0.7
Data processing services                 200           0.5        552          1.4
FDIC deposit insurance                   172           0.4      1,196          3.1
Corporate legal and litigation           (67)         (0.2)       392          0.1
Other                                  4,077           9.1      2,773          7.1
- ----------------------------------   -------          ----    -------         ----
Total excluding cost of other
  real estate owned                   25,422          57.4%    24,468         62.8%
Cost of other real estate owned          326                       15
- ----------------------------------   -------                  -------
Total noninterest expense            $25,748                  $24,483
==================================   =======                  =======

Compensation and benefits expenses totaled $7.6 million in the second quarter of 1996, a $0.8 million, or 11.7%, increase over the $6.8 million incurred in the second quarter of 1995. For the first six months of 1996, compensation and benefits expenses totaled $15.3 million, an increase of $1.5 million, or 10.7%, over the $13.9 million total for the comparable 1995 period. The increase during 1996 in compensation and benefits expenses was largely the result of an increase in the number of average full-time equivalent (FTE) staff employed by the Company. Average FTE were 355 and 353 for the three and six month periods ended June 30, 1996, compared to 331 and 327 for the respective prior year periods. The increase in FTE was primarily due to the expansion of the Company's lending staff in an effort to develop new markets, as well as in response to the growing client base.

Professional services expenses totaled $1.5 million in the second quarter of 1996, a $0.2 million, or 9.5%, decrease from the $1.6 million incurred in the second quarter of 1995. Professional services expenses decreased $0.3 million, or 12.1%, to a total of $2.3 million for the first six months of 1996 versus $2.6 million for the comparable 1995 period. The decrease during 1996 in professional services expenses primarily relates to the timing of director's fees.

Equipment expenses in the second quarter of 1996 totaled $0.9 million, an increase of $0.3 million, or 39.1%, from the 1995 second quarter total of $0.7 million. Equipment expenses for the first half of 1996 totaled $1.6 million, an increase of $0.4 million, or 32.1%, from the $1.2 million incurred in the comparable prior year period. The increase during 1996 was related to investments in computer equipment as well as other costs associated with the Company's growth in personnel.

Occupancy expenses totaled $0.8 million for the three months ended June 30, 1996, an increase of $0.1 million, or 8.3%, from the $0.7 million incurred in the second quarter of 1995. Total occupancy expenses were $1.6 million for the first six months of both 1996 and 1995. The increase in occupancy expenses for the second quarter of 1996, as compared to the second quarter of 1995, was related to additional rent expense associated with several new loan offices opened during the first half of 1996.

18

Client services expenses include courier expenses and related costs of loan and deposit operations. For the second quarter of 1996, client services expenses totaled $0.2 million, a $0.1 million increase from the $0.1 million incurred in the second quarter of 1995. Total client services expenses were $0.2 million for the first six months of 1996, versus $0.3 million for the comparable prior year period. The variances in these expenses from 1995 to 1996 were largely due to the timing of reimbursements from clients.

FDIC deposit insurance expense totaled $0.1 million in the second quarter of 1996, a $0.5 million, or 84.8%, decrease from the 1995 second quarter expense of $0.6 million. Total FDIC deposit insurance expense for the first half of 1996 amounted to $0.2 million, a $1.0 million, or 85.6%, decrease from the $1.2 million incurred in the first half of 1995. The decrease during 1996 was attributable to reductions in the Bank's assessment rate during both the third quarter of 1995 and the first quarter of 1996 due to the completion of the recapitalization of the Bank Insurance Fund. The Bank's assessment rate was further reduced to the statutory minimum annual assessment of $2,000, effective July 1, 1996.

Data processing services expenses were $0.1 million and $0.2 million for the three and six month periods ended June 30, 1996, respectively, a decrease of $0.1 million, or 66.8%, and $0.4 million, or 63.8%, compared to the $0.2 million and $0.6 million in expenses for the comparable 1995 periods. The decrease during 1996 in data processing services expenses was due to the Company's completion of a conversion to an in-house data processing center during late 1995.

Corporate legal and litigation expenses totaled $(0.2) million for the second quarter of 1996, a $0.5 million decrease from the $0.2 million total for the 1995 second quarter. Total corporate legal and litigation expenses were $(0.1) for the first six months of 1996, versus $0.4 million for the first six months of 1995. The decrease in these expenses during 1996 was primarily the result of the Company realizing a $0.4 million gain in the 1996 second quarter related to the net proceeds received from a legal settlement.

Other noninterest expenses in the second quarter of 1996 totaled $2.2 million, a $0.7 million, or 47.5%, increase from the $1.5 million incurred in the second quarter of 1995. For the first half of 1996, other noninterest expenses increased $1.3 million, or 47.0%, to a total of $4.1 million compared to $2.8 million for the first half of 1995. The increase during 1996 largely resulted from increased advertising costs and business development efforts combined with other miscellaneous expenses related to the Company's growth in personnel.

Net costs associated with other real estate owned (OREO) in the second quarter of 1996 decreased $0.1 million from the comparable prior year period, largely due to a gain realized on the sale of one property. For the first six months of 1996, the net costs associated with OREO increased $0.3 million from the first half of 1995, primarily due to the write-down of one property owned by the Company. The costs associated with OREO include: maintenance expenses; property taxes; marketing costs; net operating expense or income associated with income- producing properties; property write-downs; and gains or losses on the sales of such properties.

Income Taxes

19

The Company's effective tax rate was 40.0% in the 1996 second quarter, compared to 43.4% in the second quarter of the prior year. For the six months ended June 30, 1996, the Company's effective tax rate was 40.0%, versus 43.0% in the comparable 1995 period. The reduction in the Company's 1996 effective tax rate, as compared to 1995, was attributable to adjustments in the Company's estimate of its tax liabilities.

FINANCIAL CONDITION

The Company's total assets were $1.7 billion at June 30, 1996 compared to $1.4 billion at December 31, 1995.

Federal Funds Sold and Securities Purchased Under Agreement to Resell

Federal funds sold and securities purchased under agreement to resell totaled $372.4 million at June 30, 1996, an increase of $115.3 million, or 44.8%, compared to the $257.1 million balance at December 31, 1995. This increase was the result of significant growth in the Company's deposits during the 1996 second quarter.

Investment Securities

Investment securities totaled $445.3 million at June 30, 1996. This represented a $124.0 million, or 38.6%, increase over the December 31, 1995 balance of $321.3 million. The increase in investment securities was related to the Company's liquidity and investment management activities, as a portion of the growth in the Company's deposits during the 1996 second quarter was primarily invested in notes issued by U.S. agencies as well as in commercial paper. These investments were the result of Management's decision to further diversify the Company's short-term investments as well as lengthen the average remaining life of the investment portfolio in an effort to obtain the higher yields available due to the recent steepening of the yield curve.

Loans

Total loans, net of unearned income, at June 30, 1996 were $823.7 million, a $85.2 million, or 11.5%, increase compared to the $738.4 million balance outstanding at December 31, 1995. The increase in loans from the 1995 year-end total was primarily concentrated in the commercial loan portfolio, and can be attributed to the Company's successful business development efforts.

Credit Quality and the Allowance for Loan Losses

Lending money involves an inherent risk of nonpayment. Through the administration of loan policies and monitoring of the portfolio, Management seeks to reduce such risks. The allowance for loan losses is an estimate to provide a financial buffer for losses, both identified and unidentified, in the loan portfolio.

Management regularly reviews and monitors the loan portfolio to determine the risk profile of each credit, and to identify credits whose risk profiles have changed. This review includes, but is not limited to, such factors as payment status, the financial condition of the borrower, borrower compliance with loan covenants, underlying collateral values, potential loan concentrations, and general economic conditions. Potential problem credits are identified and, based upon known information, action plans are developed.

20

The allowance for loan losses was $29.0 million at June 30, 1996, a decrease of $0.7 million, or 2.4%, compared to the $29.7 million balance at December 31, 1995. This decrease was due to net charge-offs of $4.3 million for the first six months of 1996, offset by $3.6 million in additional provisions to the allowance for loan losses. Gross charge-offs for the first six months of 1996 were $5.7 million, and primarily related to two commercial credits.

In general, Management believes, based on currently known information, that the allowance for loan losses is adequate as of June 30, 1996. However, future changes in circumstances, economic conditions or other factors could cause Management to increase or decrease the allowance for loan losses as deemed necessary.

Nonperforming assets consist of loans that are past due 90 days or more but still accruing interest, loans on nonaccrual status, and OREO. The table below sets forth certain relationships between nonperforming loans, nonperforming assets and the allowance for loan losses:

                                                        June 30,     December 31,
                                                          1996           1995
               (Dollars in thousands)                  (Unaudited)
- ----------------------------------------------------   -----------   ------------

Nonperforming assets:
Loans past due 90 days or more                            $    88         $   906
Nonaccrual loans                                           23,532          27,867
- ----------------------------------------------------      -------         -------
Total nonperforming loans                                  23,620          28,773
OREO                                                        3,733           4,955
- ----------------------------------------------------      -------         -------
Total nonperforming assets                                $27,353         $33,728
====================================================      =======         =======

Nonperforming loans as a percent of total loans               2.9%            3.9%
OREO as a percent of total assets                             0.2%            0.4%
Nonperforming assets as a percent of total assets             1.6%            2.4%

Allowance for loan losses:                                $29,000         $29,700
  As a percent of total loans                                 3.5%            4.0%
  As a percent of nonaccrual loans                          123.2%          106.6%
  As a percent of nonperforming loans                       122.8%          103.2%

Nonperforming loans were $23.6 million, or 2.9% of total loans, at June 30, 1996. This was down from the total of $28.8 million, or 3.9% of total loans, at the prior year-end. Nonperforming loans at June 30, 1996 included two credits totaling $10.5 million, one of which, in excess of $6.0 million, was fully collected in July 1996. Management believes the remaining credit is adequately covered with collateral and specific reserves.

Despite the July 1996 payoff of the one nonperforming loan in excess of $6.0 million, Management cannot give assurances that the level of nonperforming loans at the end of the third quarter of 1996 will be below the level as of June 30, 1996, given the potential for additional nonperforming loans. Management has identified four loans with principal amounts aggregating approximately $8.7 million, including one loan in excess of $7.0 million, that, on the basis of information known by Management as of June 30, 1996, were judged to have a higher than normal risk of becoming nonperforming. The Company is not aware of any other loans at June

21

30, 1996 where known information about possible problems of the borrower casts serious doubts about the ability of the borrower to comply with the loan repayment terms.

OREO totaled $3.7 million at June 30, 1996, a decrease of $1.2 million, or 24.7%, from the $5.0 million balance at December 31, 1995. This decrease primarily resulted from the previously mentioned write-down of one property owned by the Company and sales of two properties during the first six months of 1996.

Deposits

Total deposits were $1.6 billion at June 30, 1996, an increase of $318.5 million, or 24.7%, from the prior year-end total of $1.3 billion. The majority of this increase was in interest-bearing deposits, which increased $256.5 million, or 30.6%, to $1.1 billion at June 30, 1996 from an $838.7 million balance at December 31, 1995. This increase was largely concentrated in higher- rate money market deposits and resulted from market conditions combined with successful business development efforts by the Company. Noninterest-bearing demand deposits were $513.3 million at June 30, 1996, representing a $61.9 million, or 13.7%, increase from the $451.3 million balance at December 31, 1995.

LIQUIDITY

Management regularly reviews general economic and financial conditions, both external and internal, and determines whether the positions taken with respect to liquidity and interest rate sensitivity are appropriate. The objectives of liquidity management are to provide funds, at an acceptable cost, to meet loan demand and depositors' needs, and to service other liabilities as they come due.

The Company assesses the likelihood of projected funding requirements by reviewing historical funding patterns, current and forecasted economic conditions and individual client funding needs. One measure Management uses to assess the Company's liquidity is the level of liquid assets relative to total deposits. Liquid assets include cash and due from banks, federal funds sold, securities purchased under agreement to resell, and investment securities maturing within one year. At June 30, 1996, the Company's liquid assets as a percentage of deposits were 39.1% compared to 41.0% at December 31, 1995. This decrease resulted primarily from the aforementioned lengthening of the average remaining life of the investment securities portfolio during the first half of 1996.

22

CAPITAL RESOURCES

Management seeks to maintain adequate capital to support anticipated asset growth and credit risks, and to ensure that the Company and the Bank are in compliance with all regulatory capital guidelines. The primary source of new capital for the Company has been the retention of earnings. Aside from current earnings, an additional source of new capital for the Company has been proceeds from the issuance of common stock under the Company's employee benefit plans, including the Company's 1983 and 1989 stock option plans, the employee stock ownership plan, and the employee stock purchase plan.

Shareholders' equity was $119.0 million at June 30, 1996, an increase of $14.0 million, or 13.3%, from the $105.0 million balance at December 31, 1995. This increase resulted from net income of $10.3 million and capital generated through the Company's employee benefit plans of $4.3 million in the first six months of 1996, slightly offset by a $0.7 million increase in the net unrealized loss on available-for-sale investments.

The Company and the Bank are subject to capital adequacy guidelines issued by the Federal Reserve Board. Under these guidelines, the minimum total risk-based capital requirement is 10.0% of risk-weighted assets and certain off-balance sheet items for a "well capitalized" depository institution. At least 6.0% of the 10.0% total risk-based capital ratio must consist of Tier 1 capital, defined as tangible common equity, and the remainder may consist of subordinated debt, cumulative preferred stock, and a limited amount of the allowance for loan losses.

The Federal Reserve Board has established minimum capital leverage ratio guidelines for state member banks. The ratio is determined using Tier 1 capital divided by quarterly average total assets. The guidelines require a minimum of 5.0% for a "well capitalized" depository institution.

The Company's risk-based capital ratios were in excess of regulatory guidelines for a "well-capitalized" depository institution as of June 30, 1996 and December 31, 1995. Capital ratios for the Company are set forth below:

                                       June 30,        December 31,
                                         1996              1995
                                       --------        ------------

Total risk-based capital ratio           11.6%           11.9%
Tier 1 risk-based capital ratio          10.3%           10.6%
Tier 1 leverage ratio                     7.8%            8.0%
===============================          =====           =====

The decrease in all of the Company's capital ratios from December 31, 1995 to June 30, 1996 is attributable to the growth in the Company's assets during the first six months of 1996, partially offset by the aforementioned growth in the Company's capital.

23

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

There were no legal proceedings requiring disclosure pursuant to this item pending at June 30, 1996, or at the date of this report.

ITEM 2 - CHANGES IN SECURITIES

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of Shareholders was held on April 18, 1996. Each of the persons named in the Proxy Statement as a nominee for director was elected; an amendment to the Silicon Valley Bancshares 1989 Stock Option Plan was approved; an amendment to the Company's Bylaws to change the authorized range of Directors was approved; and the appointment of KPMG Peat Marwick LLP as the Company's independent auditors was ratified. The following are the voting results on each of these matters:

Election of Directors                        In Favor    Withheld
- ---------------------                        ---------   --------

Gary K. Barr                                 7,421,155     92,238
James F. Burns, Jr.                          7,468,815     44,578
John C. Dean                                 7,450,251     63,142
David M. deWilde                             7,443,186     70,207
Clarence J. Ferrari, Jr., Esq.               7,468,615     44,778
Henry M. Gay                                 7,443,186     70,207
Daniel J. Kelleher                           7,447,104     66,289
James R. Porter                              7,468,793     44,600
Michael Roster, Esq.                         7,468,815     44,578
Ann R. Wells                                 7,418,503     94,890

Other Matters                                In Favor    Opposed   Abstained
- -------------                                ---------   -------   ---------

Amendment to the Silicon Valley
   Bancshares 1989 Stock Option Plan         6,920,422    542,788      50,184

Amendment to the Company's Bylaws
   to change the authorized range of
   Directors                                 7,379,610     92,799      40,985

Ratification of the appointment of KPMG
   Peat Marwick LLP as the Company's
   independent auditors for 1996             7,465,320     92,799      40,985

24

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits:
        ---------
         3.2    Bylaws of the Company, as amended

        10.28   Amendment and Restatement of the Silicon Valley Bancshares 1989
                Stock Option Plan

        10.29   Silicon Valley Bank Money Purchase Pension Plan

        10.30   Amendment and Restatement of the Silicon Valley Bank Money
                Purchase Pension Plan

        10.31   Amendment and Restatement of the Silicon Valley Bank 401(k) and
                Employee Stock Ownership Plan

        27      Financial Data Schedule

(b) Reports on Form 8-K:

No reports on Form 8-K were filed by the Company during the quarter ended June 30, 1996.

25

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SILICON VALLEY BANCSHARES

Date:  August 13, 1996              (s) Christopher T. Lutes
                                    ------------------------
                                    Christopher T. Lutes
                                    Senior Vice President and Controller
                                    (Principal Accounting Officer)

26

EXHIBIT 3.2

BYLAWS
OF
SILICON VALLEY BANCSHARES

Amendment and Restatement Effective as of the Date of
Obtaining Shareholder Approval on April 18, 1996

ARTICLE I

Offices

Section 1.1. Principal Executive Office. The principal executive office of this corporation (the "Corporation") is hereby fixed and located at 3000 Lakeside Drive, Santa Clara, California. The Board of Directors (the "Board") is hereby granted full power and authority to change the principal executive office from one location to another. Any such change shall be noted in the Bylaws by the Secretary, opposite this Section, or this Section may be amended to state the new location.

Section 1.2. Other Offices. Other branch offices or places of business may at any time be established by the Board at any place or places deemed appropriate.

ARTICLE II

Meetings of Shareholders

Section 2.1. Place of Meetings. All annual or other meetings of shareholders shall be held at the principal executive office of the Corporation, or at any other place which may be designated either by the Board or by the written consent of all persons entitled to vote thereat given either before or after the meeting and filed with the Secretary of the Corporation.

Section 2.2. Annual Meetings.

(a) Time. The Annual Meeting of shareholders shall be held each year

on a date and at a time designated by the Board. The date so designated shall be within fifteen months after the last Annual Meeting.

(b) Business to be transacted. At each Annual Meeting, directors shall be elected, reports of the affairs of the Corporation shall be considered and any other business may be transacted which is within the powers of the shareholders.

(c) Notice. Written notice of each Annual Meeting shall be given to each shareholder entitled to vote, either personally or by first class mail or other means of written communication, charges prepaid, addressed to such shareholder at such shareholder's address appearing on the books of the Corporation, or given by the shareholder to the Corporation for the purpose of notice, or if no such address appears or is given, at the place where the principal executive office of the Corporation is located or by publication at least once in a newspaper of general circulation in the county in which

the principal executive office is located. If any notice or report addressed to the shareholder at the address of such shareholder appearing on the books of the Corporation is returned to the Corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice or report to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available for the shareholder upon written demand of the shareholder at the principal executive office of the Corporation for a period of one year from the date of the giving of the notice or report to all other shareholders. If a shareholder gives no address, notice shall be deemed to have been given to the shareholder if sent by mail or other means of written communication addressed to the place where the principal executive office of the Corporation is located, or if published at least once in some newspaper of general circulation in the county in which the principal executive office is located.

All notices shall be given to each shareholder entitled thereto not less than ten (10) days nor more than sixty (60) days before each Annual Meeting. Any such notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. An affidavit of mailing of any such notice in accordance with the foregoing provisions, executed by the Secretary, Assistant Secretary or any transfer agent of the Corporation shall be prima facie evidence of the giving of the notice. Such notices shall specify:

(i) the place, the date and the hour of each meeting;

(ii) those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders;

(iii) if directors are to be elected, the names of nominees intended at the time of the notice to be presented by the Board for election;

(iv) the general nature of a proposal, if any, to take action with respect to approval of: (a) a contract or other transaction with an interested director, (b) amendment of the Articles of Incorporation, (c) a reorganization of the Corporation as defined in Section 181 of the California General Corporation Law, (d) a voluntary dissolution of the Corporation, or (e) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, if any; and

(v) such other matters, if any, as may be required by law.

Section 2.3. Special Meetings. Special meetings of the shareholders, for the purpose of taking any action permitted by the shareholders under the California General Corporation Law and the Articles of Incorporation of the Corporation, may be called at any time by the Chairman of the Board or the President, or by the Board, or by one or more shareholders holding not less than ten percent (10%) of the votes entitled to be cast at the meeting. Upon request in writing that a special meeting of shareholders be called for any purpose, directed to the Chairman of the Board, President, Vice President or Secretary by any person (other than the Board) entitled to call a special meeting of shareholders, the officer forthwith shall cause notice to be given to shareholders entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after receipt of the request. Except in special cases where other express provision is made by statute, notice of special meetings shall be given in the same manner as for annual meetings of

shareholders. In addition to the matters required by items (i), and if applicable, (ii) and (iii) of the preceding Section, notice of any special meeting shall specify the general nature of the business to be transacted, and no other business may be transacted at such meeting.

Section 2.4. Quorum. The presence in person or by proxy of the persons entitled to vote a majority of the voting shares at any meeting shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 2.5. Adjourned Meetings and Notice Thereof. Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum no other business may be transacted at such meeting, except as provided in Section 2.4 above.

When any shareholders' meeting, either annual or special, is adjourned for forty-five (45) days or more, or if after adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting. Except as provided above, it shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement of the time and place thereof at the meeting at which such adjournment is taken.

Section 2.6. Voting. Unless a record date for voting purposes be fixed as provided in Section 5.1 of these Bylaws, then, subject to the provisions of Sections 702 through 704 of the California Corporations Code (relating to voting of shares held by a fiduciary, in the name of a corporation or in joint ownership), only persons in whose names shares entitled to vote stand on the stock records of the Corporation at the close of business on the business day next preceding the day on which notice of the meeting is given or if such notice is waived, at the close of business on the business day next preceding the day on which the meeting of shareholders is held, shall be entitled to vote at such meeting, and such day shall be the record date for such meeting. Such vote may be oral or by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a shareholder at any election and before the voting begins. If a quorum is present, except with respect to election of directors, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the California General Corporation Law or the Articles of Incorporation. Subject to the requirements of the next sentence, every shareholder entitled to vote at any election for directors shall have the right to cumulate such shareholder's votes and give one candidate a number of votes equal to the number of directors to be elected, multiplied by the number of votes to which such shareholder's shares are entitled, or to distribute his or her votes on the same principal among as many candidates as the shareholder shall think fit. No shareholder shall be entitled to cumulate votes unless the name of the candidate or candidates for whom the votes would be cast has been placed in nomination prior to the voting and at least one shareholder has given notice at the meeting, prior to the voting, of the shareholder's intention to cumulate his or

her votes. The candidates receiving the highest number of affirmative votes of shares entitled to be voted for them, up to the number of directors to be elected, shall be elected. Votes against the directors and votes withheld shall have no legal effect.

Section 2.7. Validation of Defectively Called or Noticed Meetings. The transactions of any meeting of shareholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy signs a waiver of notice or a consent to the holding of the meeting, or an approval of the minutes thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in Section 2.2(c)(iv) of these Bylaws, the waiver of notice or consent shall state the general nature of the proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Attendance by a person at a meeting shall also constitute a waiver of notice of that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if that objection is expressly made at the meeting.

Section 2.8. Action Without Meeting.

(a) Election of Directors. Directors may be elected without a meeting by a consent in writing, setting forth the action so taken, signed by all of the persons who would be entitled to vote for the election of directors, provided that, without notice, except as hereinafter set forth, a director may be elected at any time to fill a vacancy (other than one created by removal) not filled by the directors, by the written consent of persons holding a majority of the outstanding shares entitled to vote for the election of directors.

(b) Other Action. Any other action which, under any provision of the California General Corporation Law, may be taken at a meeting of the shareholders, may be taken without a meeting, and without prior notice except as hereinafter set forth, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless the consents of all shareholders entitled to vote have been solicited in writing:

(i) Notice of any proposed shareholder approval of (a) a contract or other transaction with an interested director, (b) indemnification of an agent of the Corporation as authorized by Section 3.17 of these Bylaws,
(c) a reorganization of the Corporation as defined in Section 181 of the California General Corporation Law, or (d) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, if any, without a meeting by less than unanimous written consent, shall be given at least ten (10) days before the consummation of the action authorized by such approval; and


(ii) Prompt notice shall be given at the taking of any other corporate action approved by shareholders without a meeting by less than unanimous written consent, to those shareholders entitled to vote who have not consented in writing. Such notices shall be given as provided in Section 2.2(c) of these Bylaws.

Unless, as provided in Section 5.1 of these Bylaws, the Board has fixed a record date for the determination of shareholders entitled to notice of and to give such written consent, the record date for such determination shall be the day on which the first written consent is given. All such written consents shall be filed with the Secretary of the Corporation.

Any shareholder giving a written consent, or the shareholder's proxyholders, or a transferee of the shares, or a personal representative of the shareholder, or their respective proxyholders, may revoke the consent by a writing received by the Corporation prior to the time that written consents by the number of shares required to authorize the proposed action have been filed with the Secretary of the Corporation, but may not do so thereafter. Such revocation is effective upon its receipt by the Secretary of the Corporation.

Section 2.9. Proxies. Every person entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by a written proxy. A proxy may be in the form of a written authorization signed or an electronic transmission authorized by a shareholder or the shareholder's agent. A proxy may be transmitted by an oral telephonic transmission if it is submitted with information from which it may be determined that the proxy was authorized by the shareholder or the shareholder's agent. Any proxy duly executed is not revoked and continues in full force and effect until (i) an instrument revoking it or a duly executed proxy bearing a later date is filed with the Secretary of the Corporation prior to the vote pursuant thereto, (ii) the person executing the proxy attends the meeting and votes in person, or (iii) written notice of the death or incapacity of the maker of such proxy is received by the Corporation before the vote pursuant thereto is counted; provided, that no such proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless the person executing it specifies therein the length of time for which said proxy is to continue in force.

Section 2.10. Inspectors of Election. In advance of any meeting of shareholders the Board may appoint inspectors of election to act at the meeting and any adjournment thereof. If inspectors of election are not so appointed, or if any persons so appointed fail to appear or refuse to act, the Chairman of any meeting of shareholders may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election (or persons to replace those who so fail or refuse) at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed.

The duties of the inspectors shall be as prescribed in Section 707 of the California General Corporation Law and shall include: (i) determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies; (ii) receiving votes, ballots or consents; (iii) hearing and determining all challenges and questions in any way arising in connection with the right to vote; (iv) counting and tabulating all votes


or consents; (v) determining when the polls shall close; (vi) determining the result; and (vii) such other acts as may be proper to conduct the election or vote with fairness to all shareholders. In the determination of the validity and effect of proxies, the dates contained on the forms of proxy shall presumptively determine the order of execution on the proxies, regardless of postmark dates on the envelopes in which they are mailed.

The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

Section 2.11. Nomination of Directors. Nominations for election of members of the Board may be made by the Board or by any shareholder 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 (other than for persons named in the notice of the meeting at which such nomination is to be made) shall be made in writing and shall be delivered or mailed to the Secretary of the Corporation by the later of: the close of business twenty-one (21) days prior to any meeting of shareholders called for election of directors, or ten
(10) days after the date of mailing notice of the meeting to shareholders. Such notification shall contain the following information to the extent known to the notifying shareholder: (i) the name and address of each proposed nominee; (ii) the principal occupation of each proposed nominee; (iii) the number of shares of capital stock of the Corporation owned by each proposed nominee; (iv) the name and residence address of the notifying shareholder; (v) the number of shares of capital stock of the Corporation owned by the notifying shareholder; and (vi) with the written consent of the proposed nominee, a copy of which shall be furnished with the notification, whether the proposed nominee has ever been convicted of or pleaded nolo contendere to any criminal offense involving dishonesty or breach of trust, filed a petition in bankruptcy or been adjudged bankrupt. The notice shall be signed by the nominating shareholder and by the nominee. Nominations not made in accordance herewith shall be disregarded by the Chairman of the meeting, and upon the Chairman's instructions, the inspectors of election shall disregard all votes cast for each such nominee. The restrictions set forth in this paragraph shall not apply to nomination of a person to replace a proposed nominee who has died or otherwise become incapacitated to serve as a director between the last day for giving notice hereunder and the date of election of directors if the procedure called for in this paragraph was followed with respect to the nomination of the proposed nominee.

A copy of the preceding paragraph shall be set forth in the notice to shareholders of any meeting at which directors are to be elected.

ARTICLE III

Directors

Section 3.1. Powers. Subject to limitation of the Articles of Incorporation and of the California General Corporation Law as to action to be authorized or approved by the shareholders, and subject to the duties of directors as prescribed by the Bylaws, and subject to the rules and regulations as may be promulgated from time to time by applicable regulatory authorities, all corporate powers shall be exercised by or under

the authority of, and the business and affairs of the Corporation shall be controlled by, the Board.

Section 3.2 - Number and Qualification of Directors.

The authorized number of directors of the Corporation shall not be less than eight (8) nor more than fifteen (15) until changed by amendment of the Articles of Incorporation or by a bylaw amending this Section 3.2 duly adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote, provided that a proposal to reduce the authorized minimum number of directors below five cannot be adopted. The exact number of directors shall be fixed from time to time, within the limits specified in this
Section 3.2: (i) by a resolution duly adopted by the Board; (ii) by a Bylaw or amendment thereof duly adopted by the vote of a majority of the outstanding shares entitled to vote; or (iii) by approval of the shareholders (as defined in
Section 153 of the California General Corporation Law). No amendment may change the stated maximum number of authorized directors to a number greater than two times the stated minimum number of directors minus one.

Subject to the foregoing provisions for changing the number of directors, the number of directors of this Corporation has been fixed at ten (10).

Section 3.3. Election and Term of Office. The directors shall be elected at each annual meeting of shareholders, but if any such annual meeting is not held or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders held for that purpose or by written consent in accordance with Section 2.8 of these Bylaws. All directors shall hold office until their respective successors are elected, subject to the California General Corporation Law and the provisions of these Bylaws with respect to vacancies on the Board.

Section 3.4 [Reserved].

Section 3.5. Removal of Directors. The entire Board or any individual director may be removed from office by a vote of shareholders holding a majority of the outstanding shares entitled to vote at an election of directors. A material breach of the Corporation's Code of Ethics or a director's failure to attend at least seventy-five percent (75%) of the Board meetings held during the director's term of office may constitute grounds for removal. However, unless the entire Board is removed, no individual director may be removed when the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of the director's most recent election were then being elected.

Section 3.6. Vacancies. A vacancy in the Board shall be deemed to exist (i) in case of the death, resignation or removal of any director, (ii) if a director has been declared of unsound mind by order of court or convicted of a felony, (iii) if the authorized number of directors be increased, or (iv) if the shareholders fail, at any annual or special meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting.

Vacancies in the Board, except for a vacancy created by the removal of a director, may be filled by a majority of the remaining directors, though less than a quorum or by a sole remaining director, and each director so elected shall hold office until his or her successor is elected at an annual or a special meting of the shareholders. A vacancy in the Board created by the removal of a director may only be filled by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by the written consent of the holders of all of the outstanding shares.

The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors. Any such election by written consent (except to fill a vacancy created by removal) shall require the consent of holders of a majority of the outstanding shares entitled to vote.

Any director may resign effective upon giving written notice to the Chairman of the Board, the President, the Secretary or the Board of the Corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the Board accepts the resignation of a director tendered to take effect at a future time, the Board or the shareholders shall have the power to elect a successor to take office when the resignation is to become effective.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his or her term of office.

Section 3.7. Frequency and Place of Meeting. The Board shall hold a meeting at least once each calendar quarter. Regular meetings of the Board shall be held at any place and time which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation, regular meetings shall be held at the principal executive office of the Corporation. Special meetings of the Board may be held either at a place so designated or at the principal executive office.

Section 3.8. Organizational Meeting. Immediately following each annual meeting of shareholders, the Board shall hold a regular meeting at the place of the annual meeting or at such other place as shall be fixed by the Board, for the purpose of organization, election of officers and the transaction of other business. Call and notice of such meetings are hereby dispensed with.

Section 3.9. Other Regular Meetings. Other regular meetings of the Board shall be held at any place and time which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. Notice of all such regular meetings of the Board is hereby dispensed with.

Section 3.10. Special Meetings. Special meetings of the Board for any purpose or purposes may be called at any time by the Chairman of the Board, the President or by any two directors.

Special meetings shall be held upon four days' notice by mail or other form of written communication, or 24 hours notice received personally, by telephone or by facsimile or comparable means of communication. Written notice of the time and place of special meetings shall be addressed to the director at the director's address as it is


shown upon the records of the Corporation or, if it is not so shown on such records or is not readily ascertainable, at the place at which the meetings of the directors are regularly held.

Any notice shall state the date, place and hour of the meeting and may state the general nature of the business to be transacted and that other business may be transacted at the meeting.

Section 3.11. Action Without Meeting. Any action by the Board may be taken without a meeting if all members of the Board shall individually or collectively consent in writing to the action. The written consent or consents shall be filed with the minutes of the proceedings of the Board and shall have the same force and effect as a unanimous vote of the directors.

Section 3.12. Action at a Meeting, Quorum and Required Vote. Presence of a majority of the authorized number of directors at a meeting of the Board constitutes a quorum for the transaction of business, except as hereinafter provided. Members of the Board may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. (Participation in a meeting as permitted in the preceding sentence constitutes presence in person at the meeting.) Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number, or the same number after disqualifying one or more directors from voting, is required by law, by the Articles of Incorporation or by these Bylaws. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of a director or directors, provided that any action taken is approved by at least a majority of the required quorum for the meeting.

Section 3.13. Validation of Defectively Called or Noticed Meetings. The transactions of any meeting of the Board, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum is present and if, either before or after the meeting, each of the directors not present or who, though present, has prior to the meeting or at its commencement, protested the lack of proper notice: (i) signs a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof; or (ii) waives notice and withdraws his or her objection. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 3.14. Adjournment. A majority of the directors present at any directors' meeting, either regular or special, may adjourn to another time and place.

Section 3.15. Notice of Adjournment. If the meeting is adjourned for more than 24 hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of adjournment. Otherwise notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned.

Section 3.16. Fees and Compensation. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by resolution of the Board.

Section 3.17. Indemnification of Agents of the Corporation; Purchase of Liability Insurance.

(a) For the purposes of this Section: "agent" means any person who is or was a director, officer, employee or other agent of this Corporation, or is or was serving at the request of this Corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise or was a director, officer, employee or agent of a foreign or domestic Corporation which was a predecessor corporation of this Corporation or of another enterprise at the request of such predecessor Corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" includes, without limitation, attorneys' fees and any expenses of establishing a right to indemnification under subdivision (d) or subdivision
(e)(4) of this Section.

(b) This Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding (other than an action by or in the right of this Corporation) by reason of the fact that such person is or was an agent of this Corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if the person acted in good faith and in a manner the person reasonably believed to be in the best interests of this Corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of this Corporation or that the person had reasonable cause to believe that the person's conduct was unlawful.

(c) This Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or in the right of this Corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of this Corporation, against expenses actually and reasonably incurred by the person in connection with the defense or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of this Corporation and its shareholders. No indemnification shall be made under this subdivision (c):

(1) In respect to any claim, issue or matter as to which the person shall have been adjudged to be liable to this Corporation and its shareholders, in the performance of the person's duty to this Corporation, unless and only to the extent that the court in which the proceeding is or was pending shall determine upon application that, in view of all the circumstances of this case, the person is fairly and reasonably entitled to indemnity for the expenses which the court shall determine.

(2) Of amounts paid in settling or otherwise disposing of a pending action, without court approval.

(3) Of expenses incurred in defending a pending action which is settled or otherwise disposed of without court approval.

(d) To the extent that an agent of this Corporation has been successful on the merits in defense of any proceedings referred to in subdivision (b) or (c) or in


defense of any claim, issue or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith.

(e) Except as provided in subdivision (d), any indemnification under this Section shall be made by this Corporation only if authorized in the specific case, upon a determination that indemnification of that agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in subdivision (b) or (c), by any of the following:

(1) A majority vote of a quorum consisting of directors who are not parties to such proceeding.

(2) If such a quorum of directors is not obtainable, by independent legal counsel in a written opinion.

(3) Approval of the shareholders, with the shares owned by the person to be indemnified not being entitled to vote thereon.

(4) The court in which the proceeding is or was pending upon application made by the Corporation or the agent or the attorney or other person rendering services in connection with the defense, whether or not the application by the agent, attorney or other person is opposed by the Corporation.

(f) Expenses incurred in defending any proceeding may be advanced by this Corporation prior to the final disposition of the proceeding upon receipt of a written undertaking by or on behalf of the agent to repay such amount if it shall be determined ultimately that the agent is not entitled to be indemnified as authorized in this Section.

(g) The indemnification provided by this Section shall not be deemed exclusive of any additional rights to indemnification that are authorized in the Articles of Incorporation. Nothing in this Section shall affect any right to indemnification to which persons other than the directors and officers may be entitled by contract or otherwise.

(h) No indemnification or advance shall be made under this Section, except as provided in subdivision (d) or subdivision (e)(4) of this Section, in any circumstance where it appears:

(1) That it would be inconsistent with a provision of the Articles of Incorporation, the Bylaws, a resolution of the shareholders or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification.

(2) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

(i) Upon a determination by the Board, this Corporation may purchase and maintain insurance on behalf of any agent of the Corporation against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such whether or not this Corporation would have the power to indemnify the agent against such liability under the provisions of this Section.


(j) This Section does not apply to any proceeding against any trustee, investment manager or other fiduciary of an employee benefit plan in that person's capacity as such, even though the person may also be an agent, as defined in subdivision (a) of this Section, of the Corporation. The Corporation shall have power to indemnify such a trustee, investment manager or other fiduciary to the extent permitted by subdivision (f) of Section 207 of the California General Corporation Law.

Section 3.18. Committees. The Board may, by resolution or committee charter adopted by a majority of the authorized number of directors, designate one or more committees, each committee consisting of two or more directors, to serve at the pleasure of the Board. These committees may include, without limitation, an Executive Committee, an Audit Committee, a Stock Committee and any such other committees as the Board may deem appropriate. Any such committee, to the extent provided in the resolution of the Board or committee charter, may exercise those powers and responsibilities so designated, except that no committee shall be authorized to take action with respect to:

(i) The approval of any action for which shareholder approval or approval of the outstanding shares is required.

(ii) The filling of vacancies on the Board or in any committee.

(iii) The amendment or repeal of Bylaws or the adoption of new Bylaws.

(iv) The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable.

(v) The appointment of other committees of the Board or the members thereof.

(vi) A distribution, except at a rate, in a periodic amount or within a price range set forth in the Articles of Incorporation or as determined by the Board.

ARTICLE IV

Officers

Section 4.1. Officers. The Officers of the Corporation shall be a Chief Executive Officer, President, Secretary, Chief Financial Officer and, at the discretion of the Board, such other officers as may be deemed necessary ("Officers"). Any two or more Officer positions, except those of the President and Secretary, may be held by the same person. In appropriate circumstances, an Officer of the Corporation may be excluded by resolution of the Board or by a provision of the Bylaws from participation, other than in the capacity of a director if applicable, in major policymaking functions of the Corporation.

Section 4.2. Election. Except as otherwise provided in these Bylaws, the Officers of the Corporation shall be chosen by the Board, and each Officer shall be employed at will, unless employed for a determinate period of time pursuant to a written

employment agreement approved by the Board, and shall have such authority and perform such duties as are provided in the Bylaws or as the Board may, from time to time, determine.

Section 4.3. Subordinate Officers. The Corporation may have such subordinate officers as the business of the Corporation may require ("Subordinate Officers"), including one or more Vice Presidents, a Cashier, one or more Assistant Cashiers, Operations Officers and Managers. Subordinate Officers may be chosen by the Board, the Chief Executive Officer or the President, and such Officers and Subordinate Officers upon whom authority is conferred by the Board, the Chief Executive Officer or the President ("Authorized Officers"). Subordinate Officers shall be employed at will, unless employed for a determinate period of time pursuant to a written employment agreement approved by the Board, and shall have such authority and perform such duties as are provided in the Bylaws or as the Board, Chief Executive Officers, President or Authorized Officers may, from time to time, determine.

Section 4.4. Removal and Resignation. Any Officer may be removed, either with or without cause, by the Board, subject, in each case, to the rights, if any, of an Officer under any contract or employment. Any Subordinate Officer may be removed, with or without cause, by the Board, Chief Executive Officer, President or Authorized Officer, subject to such rights, if any, of a Subordinate Officer under a written employment agreement.

Any Officer or Subordinate Officer may resign at any time by giving written notice to the Board or to the President, or to the Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 4.5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the Bylaws for regular appointments to such office.

Section 4.6. Chairman of the Board; Vice-Chairman. The Executive Committee of the Board shall nominate the Chairman of the Board, subject to approval by the Board. The Chairman of the Board shall also serve as Chairman of the Executive Committee and shall serve in such capacities for a maximum of three consecutive one-year terms. The Chairman shall be an officer of the Board and shall, if present, preside at all meetings of the Board. The Chairman may exercise and perform such other powers and duties as may be from time to time be assigned by the Board or prescribed by the Bylaws. The Chairman shall not, however, be deemed an Officer of the Corporation.

The Executive Committee of the Board shall nominate a Vice-Chairman of the Board, subject to approval by the Board. Any Vice-Chairman so approved may serve a maximum of three consecutive one-year terms. The Vice-Chairman shall have such powers and perform such duties as may be from time to time be assigned by the Board or the Chairman of the Board and shall preside at any meeting of the Board at which the Chairman is absent or otherwise unable to serve. The Vice-Chairman shall not be deemed an Officer of the Corporation.

Section 4.7. Chief Executive Officer. The Chief Executive Officer shall, subject to the control of the Board, have general supervision, direction and control

of the business and officers of the Corporation. The Chief Executive Officer shall exercise and perform such other powers and duties as may be from time to time assigned by the Board or prescribed by the Bylaws.

Section 4.8. President. Subject to such supervisory powers, if any, as may be given by the Board to the Chairman of the Board, the President shall preside at all meetings of the shareholders and at all meetings of the Board when the Chairman of the Board and the Vice-Chairman of the Board are absent or otherwise unable to serve. The President shall have the general powers and duties of management usually vested in the office of the President of a bank and shall have such other powers and duties as may be prescribed by law, the Board or the Bylaws.

Section 4.9. Vice President. In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board or, if not ranked, the Vice President designated by the Board, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board or the Bylaws. No Vice President shall preside over meetings of the shareholders or at meetings of the Board in the absence or disability of the President and Chairman of the Board unless the Vice President so serving is also a Director.

Section 4.10. Secretary. The Secretary shall record or cause to be recorded, and shall keep or cause to be kept, at the principal executive office and such other place or places as the Board may order, a book of minutes of actions taken at all meetings of directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. In the event of any meeting in Executive Session or otherwise if the Secretary is not present, an Acting Secretary shall be designated by the Chairman of the meeting for the purpose of recording the minutes of actions taken at the meeting or Executive Session thereof.

The Secretary shall keep, or cause to be kept, a copy of the Bylaws of the Corporation at the principal executive office or business office in accordance with Section 213 of the California General Corporation Law.

The Secretary shall keep, or cause to be kept, at the principal executive office, or at the office of the Corporation's transfer agent, a share register, or a duplicate share register, showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, or the number and date of cancellation of every certificate surrendered for cancellation.

The Secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the Board required by the Bylaws or by law to be given and shall have such other powers and perform such other duties as may be prescribed by the Board or by the Bylaws.

Section 4.11. Chief Financial Officer. The Chief Financial Officer of the Corporation shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, and shall

send or cause to be sent to the shareholders of the Corporation such financial statements and reports as are required to be sent to them by law or these Bylaws.

The Chief Financial Officer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board. The Chief Financial Officer shall disburse, or cause to be disbursed, the funds of the Corporation as may be ordered by the Board, shall render to the President and directors, whenever they request it, an account of all transactions as Chief Financial Officer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board or the Bylaws.

ARTICLE V

Miscellaneous

Section 5.1. Record Date. The Board may fix a time in the future as a record date for the determination of the shareholders entitled to notice of and to vote at any meetings of shareholders or entitled to give consent to corporate action in writing without a meeting, to receive any report, to receive any dividend or distribution, or any allotment of rights or to exercise rights in respect to any change, conversion or exchange of shares. The record date so fixed shall be not more than sixty (60) days or less than ten (10) days prior to the date of any meeting or other event for the purpose of which it is fixed. When a record date is so fixed, only shareholders of record on that date are entitled to notice of and to vote at any such meeting, to give consent without a meeting, to receive any report, to receive a dividend, distribution or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date.

Section 5.2. Inspection of Corporate Records. Except as restricted or limited by applicable law, including Sections 1600 through 1605 of the California General Corporation Law, the accounting books and records, the record of shareholders and minutes of proceedings of the shareholders and the Board and committees of the Board of this Corporation and any subsidiary of this Corporation shall be open to inspection upon the written demand on the Corporation of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to such holder's interest as shareholder or as the holder of such voting trust certificate. Such inspection by a shareholder or holder of a voting trust certificate may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts.

Section 5.3. Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board.

Section 5.4. Annual and Other Reports. The Board of the Corporation shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal or calendar year. Notwithstanding the foregoing sentence, however,

the requirement for such annual report is dispensed with so long as this Corporation has less than 100 shareholders of record. If required to be sent to shareholders, the annual report shall contain a balance sheet as of the end of such fiscal year and an income statement and statement of changes in financial position for such fiscal year, accompanied by any report thereon of independent accountants or, if there is no such report, the certificate of an authorized officer of the Corporation that such statements were prepared without audit from the books and records of the Corporation.

Section 5.5. Contracts, Etc., How Executed. The Board, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

Section 5.6. Certificate of Shares. Every holder of shares in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the Chairman or Vice Chairman of the Board or the President or a Vice President and by the Chief Financial Officer or an assistant treasurer or the Secretary or any assistant secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.

No new certificate for shares shall be issued in lieu of an old certificate unless the latter is surrendered and cancelled at the same time. The Board may, however, in case any certificate for shares is lost, stolen, mutilated or destroyed, authorize the issuance of a new certificate in lieu thereof, upon such terms and conditions, including reasonable indemnification of the Corporation, as the Board shall determine.

Section 5.7. Inspection of Bylaws. The Corporation shall keep in its principal executive office the original or a copy of the Bylaws as amended or otherwise altered to date, certified by the Secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.

Section 5.8. Construction and Definitions. Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the California General Corporation Law shall govern the construction of these Bylaws. Without limiting the generality of the foregoing, the masculine gender includes the feminine and neuter, the singular, number includes the plural and the plural number includes the singular, and the term "person" includes a Corporation as well as a natural person.

ARTICLE VI

Amendments

Section 6.1. Power of Shareholders. New Bylaws may be adopted or these Bylaws may be amended or repealed by the affirmative vote of a majority of the outstanding shares entitled to vote, or by written assent of shareholders entitled to vote such shares, except as otherwise provided by law or by the Articles of Incorporation.

Section 6.2. Power of Directors. Subject to the right of shareholders as provided in Section 6.1 to adopt, amend or repeal Bylaws, Bylaws may be adopted, amended or repealed by the Board provided, however, that the Board may adopt a bylaw or amendment thereof changing the authorized number of directors only for the purpose of fixing the exact number of directors within

the limits specified in Section 3.2 of these Bylaws.


EXHIBIT 10.28

SILICON VALLEY BANCSHARES
1989 STOCK OPTION PLAN

Amendment and Restatement Effective as of the Date,

of Obtaining Shareholder Approval on April 18, 1996.

1. PURPOSE

The purpose of this Silicon Valley Bancshares Stock Option Plan (the "Plan") is to provide a method whereby those key employees, directors and consultants of Silicon Valley Bancshares (the "Company") and its affiliates, who are primarily responsible for the management and growth of the Company's business and who are presently making and are expected to make substantial contributions to the Company's future management and growth, may be offered incentives in addition to those presently available, and may be stimulated by increased personal involvement in the success of the Company to continue in its service, thereby advancing the interests of the Company and its shareholders.

The word "affiliate," as used in the Plan, means any bank or corporation in any unbroken chain of banks or corporations beginning or ending with the Company, if at the time of the granting of an option, right or stock bonus award, each such bank or corporation other than the last in that chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other banks or corporations in the chain.

2. ADMINISTRATION

(i) Multiple Administrative Bodies. If permitted by Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended ("Rule 16b-3;" the "Exchange Act"), the Plan may be administered by different bodies with respect to directors, officers who are not directors, and employees who are neither directors nor officers.

(ii) Administration With Respect to Directors and Officers Subject to
Section 16(b). Except for the automatic grants to directors provided for in Sections 6 and 9, which shall be automatic and not subject to any discretion, with respect to option, stock purchase right or stock bonus award grants made to employees who are also officers or directors subject to Section 16(b) of the Exchange Act, the Plan shall be administered by (A) the Board, if the Board may administer the Plan in compliance with the rules governing a plan intended to qualify as a discretionary plan under Rule 16b-3, or (B) the Stock Committee of the Board, which committee shall be constituted to comply with the rules governing a plan intended to qualify as a discretionary plan under Rule 16b-3 (the Board or its committee shall be referred to herein as the "Committee"). Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members, remove members (with or without cause) and substitute new members, fill vacancies (however caused), and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the rules governing a plan intended to qualify as a discretionary plan under Rule 16b-3.

(iii) Administration With Respect to Other Persons. With respect to option, stock purchase right or stock bonus award grants made to employees or consultants who are neither directors nor officers of the Company, the Plan shall be administered by (A) the Board or (B) a committee designated by the Board, which committee shall be constituted to satisfy applicable laws (the Board or its committee shall be referred to herein as the "Committee"). Once appointed, such Committee shall serve in its designated capacity until otherwise directed by the Board. The Board may increase the size of the Committee and appoint additional members, remove members (with or without cause) and substitute new members, fill vacancies (however caused), and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by applicable laws.

(iv) The Company shall effect the grant of options, rights and stock bonus awards under the Plan by execution of instruments in writing in a form approved by the Committee. Subject to the express terms and conditions of the Plan, the Committee shall have full power to construe the Plan and the terms of any option, right or stock bonus award granted under the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan or such options, rights or stock bonus awards and to make all other determinations necessary or advisable for the

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Plan's administration, including, without limitation, the power to (i) determine which persons meet the requirements of Section 3 hereof for selection as participants in the Plan; (ii) determine to whom of the eligible persons, if any, options, right or stock bonus award shall be granted under the Plan; (iii) establish the terms and conditions required or permitted to be included in every option, right or stock bonus award agreement or any amendments thereto, including whether options to be granted thereunder shall be "incentive stock options," as defined in Section 422 of the Internal Revenue Code of 1986, as amended (hereinafter the "Code") or nonstatutory stock options not described in
Section 422 of the Code; (iv) specify the number of shares to be covered by each option, right or stock bonus award; (v) determine the fair market value of shares of the Company's common stock used by a participant to exercise options or rights; (vi) grant options or rights in exchange for cancellation of options or rights granted earlier at different exercise prices; (vii) take appropriate action to amend any option, right or stock bonus award hereunder, provided that no such action may be taken without the written consent of the affected participant; and (viii) make all other determinations deemed necessary or advisable for administering the Plan. The Committee's determination on the foregoing matters shall be conclusive.

3. ELIGIBILITY

The persons who shall be eligible to receive options, rights or stock bonus awards under this Plan shall be the key employees and officers of the Company and its affiliates, persons who became employees of the Company or its affiliates within thirty days of the date of grant of an option, right or stock bonus award, directors of the Company or its affiliates, and consultants of the Company or its affiliates.

4. THE SHARES

The shares of stock subject to options, rights or stock bonus awards authorized to be granted under the Plan shall consist of one million six hundred twenty six thousand five hundred thirty two (1,626,532) shares of the Company's no par value Common Stock (hereinafter the "Shares"), or the number and kind of shares of stock or other securities which shall be substituted for such Shares or to which such Shares shall be adjusted as provided in Section 11 hereof. Upon the expiration or termination for any reason of an outstanding option or right under the Plan which has not been exercised in full, all unissued Shares thereunder shall again become available for the grant of options, rights or stock bonus awards under the Plan.

5. LIMITATION ON PLAN AWARDS

The following limitations shall apply to grants of options, stock purchase rights and stock bonus awards to Employees:

(i) No Employee shall be granted, in any fiscal year of the Company, options, stock purchase rights or stock bonus awards to purchase more than two hundred and fifty thousand (250,000) Shares.

(ii) The foregoing limitation shall be adjusted proportionately in connection with any change in the Company's capitalization as described in
Section 11.

(iii) If an option, stock purchase right or stock bonus award is cancelled (other than in connection with a transaction described in Section 11), the cancelled option, stock purchase right or stock bonus award will be counted against the limit set forth in Section 5. For this purpose, if the exercise price of an option or stock purchase right is reduced, the transaction will be treated as a cancellation of the option or stock purchase right and the grant of a new option or stock purchase right.

6. GRANT, TERMS AND CONDITIONS OF OPTIONS

A. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS

Members of the Board of Directors of the Company who are not employees of the Company ("Outside Directors") shall, in January, 1991 on the date of the regularly scheduled meeting of the Board of Directors of the Company and on the January meeting of the Board of Directors in 1992 and 1993, each be granted an option to purchase 2,000 Shares under the Plan; provided, however, that if there are insufficient Shares available under the Plan for each Outside Director to receive an option to purchase 2,000 Shares (as adjusted) in any year, the number of Shares subject to each option shall equal the total number of available Shares remaining under the Plan divided by the number of Outside Directors on such date, as rounded down to avoid fractional Shares. All options granted to Outside Directors shall be subject to the following terms and conditions:

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(i) Nonstatutory Options. All stock options granted to Outside Directors pursuant to the Plan shall be nonstatutory stock options.

(ii) Option Price. The purchase price under each option granted to an Outside Director shall be one hundred percent of the fair market value of the Shares subject thereto on the date the option is granted, as such value is determined by the Committee. The fair market value of such stock shall be determined in accordance with any reasonable valuation method, including the valuation methods described in Treasury Regulation Section 20.2031-2.

(iii) Duration and Vesting of Options. Each option shall be for a three-year term and shall be immediately vested for exercise in full on the date of grant. The termination of the Plan shall not alter the maximum duration, the vesting provisions, or any other term or condition of any option granted prior to the termination of the Plan.

(iv) Termination of Tenure on the Board. Unless the Committee determines otherwise, upon the termination of an optionee's status as a member of the Board, his or her rights to exercise an option then held shall be only as follows:

DEATH OR DISABILITY: If an optionee's tenure on the Board is terminated by death or disability, such optionee or such optionee's qualified representative (in the event of the optionee's mental disability) or the optionee's estate (in the event of optionee's death) shall have the right for a period of twelve months following the date of such death or disability to exercise the option to the extent the optionee was entitled to exercise such option on the date of the optionee's death or disability; provided the actual date of exercise is in no event after the expiration of the term of the option. An optionee's "estate" shall mean the optionee's legal representative or any person who acquires the right to exercise an option by reason of the optionee's death.

OTHER REASONS: If an optionee's tenure on the Board is terminated for any reason other than those mentioned above under "Death or Disability," the optionee may, within three months (or such longer period not exceeding six months as the Board may determine) following such termination, exercise the option to the extent such option was exercisable by the optionee on the date of such termination, provided the date of exercise is in no event after the expiration of the term of the option.

(v) The automatic grants to Outside Directors pursuant to this
Section 5.A shall not be subject to the discretion of any person. The provisions of this Section 5.A shall not be amended more than once every six months, other than to comport with changes in the Code or the rules thereunder. Any amendment to this Section 5.A shall, to the extent required by applicable rules of the Securities and Exchange Commission, be approved by the shareholders of the Company.

B. GRANTS TO EMPLOYEES AND CONSULTANTS

Options, at the discretion of the Committee, may be granted at any time prior to the termination of the Plan to persons who are employees or consultants of the Company, including employees who are also directors of the Company. Options granted by the Committee to employees and consultants pursuant to the Plan shall be subject to the following terms and conditions:

(i) Grant of Options. Stock options granted pursuant to the Plan may be either incentive stock options or nonstatutory stock options. If the aggregate fair market value of the Shares which are exercisable for the first time during any one calendar year under all incentive stock options held by an optionee exceeds $100,000 (determined at the time of the grant of the options), such options shall be treated as nonstatutory stock options to the extent of such excess.

(ii) Option Price. The purchase price under each option shall be determined by the Committee; provided, however, that (i) the purchase price of a nonstatutory stock option shall not be less than one hundred percent of the fair market value of the Shares subject thereto on the date the option is granted,
(ii) the purchase price of an incentive stock option granted to an individual who does not own stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company shall not be less than one hundred percent of the fair market value of the Shares subject thereto on the date the option is granted, and (iii) the purchase price of an incentive stock option granted to an individual who owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company shall not be less than one hundred ten percent of the

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fair market value of the Shares subject thereto on the date the option is granted. The fair market value of such stock shall be determined in accordance with any reasonable valuation method, including the valuation methods described in Treasury Regulation Section 20.2031-2.

(iii) Duration of Options. Each option shall be for a term determined by the Committee; provided, however, that the term of any option may not exceed ten years and, provided further, that the term of any option granted to an individual who owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company shall not exceed five years. Each option shall vest in such manner and at such time as the Committee shall determine and the Committee may accelerate the time of exercise of any option, provided, however, that if compliance with the terms of Rule 16b-3, as promulgated under the Securities Exchange Act of 1934, as amended (hereinafter the "Exchange Act") so requires, no option may vest prior to six months after the date of grant. The termination of the Plan shall not alter the maximum duration, the vesting provisions, or any other term or condition of any option granted prior to the termination of the Plan.

(iv) Termination of Employment or Consultant Status. Unless the Committee determines otherwise, upon the termination of an optionee's status as an employee or officer of the Company, his or her rights to exercise an option then held shall be only as follows;

DEATH OR DISABILITY: If an optionee's employment or status as a consultant is terminated by death or disability, such optionee or such optionee's qualified representative (in the event of the optionee's mental disability) or the optionee's estate (in the event of optionee's death) shall have the right for a period of twelve (12) months following the date of such death or disability to exercise the option to the extent the optionee was entitled to exercise such option on the date of the optionee's death or disability; provided the actual date of exercise is in no event after the expiration of the term of the option. An optionee's "estate" shall mean the optionee's legal representative or any person who acquires the right to exercise an option by reason of the optionee's death.

CAUSE: If an optionee's employment or status as a consultant is terminated because such optionee is determined by the Board to have committed an act of embezzlement, fraud, dishonesty, breach of fiduciary duty to the Company, or to have deliberately disregarded the rules of the Company which resulted in loss, damage or injury to the Company, or if an optionee makes any unauthorized disclosure of any of the secrets or confidential information of the Company, induces any client or customer of the Company to break any contract with the Company or induces any principal for whom the Company acts as agent to terminate such agency relations, or engages in any conduct which constitutes unfair competition with the Company, or if an optionee is removed from any office of the Company by any bank regulatory agency, neither the optionee nor the optionee's estate shall be entitled to exercise any option with respect to any Shares whatsoever. In making such determination, the Board shall act fairly and shall give the optionee an opportunity to appear and be heard at a hearing before the full Board and present evidence on the optionee's behalf. For the purpose of this paragraph, termination of employment or consultant status shall be deemed to occur when the Company dispatches notice or advice to the optionee that the optionee's employment or status as a consultant is terminated, and not at the time of optionee's receipt thereof.

OTHER REASONS: If an optionee's employment or status as a consultant is terminated for any reason other than those mentioned above under "Death or Disability" and "Cause," the optionee may, within three months (or within such other period not exceeding six months as may be determined by the Committee) following such termination, exercise the option to the extent such option was exercisable by the optionee on the date of termination of the optionee's employment or status as a consultant; provided the date of exercise is in no event after the expiration of the term of the option and provided further that any option which is exercisable more than three months following termination shall be treated as a nonstatutory option whether or not it was designated as such at the time it was granted.

C. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS

The following terms and conditions shall apply to all options granted pursuant to the Plan:

(i) Exercise of Options. To the extent the right to purchase Shares has vested under an optionee's stock option agreement, options may be exercised from time to time by delivering payment therefor in cash, certified check, official bank check, or the equivalent thereof acceptable to the Company, together with written notice to the Secretary of the Company, identifying the option or part thereof being exercised and specifying the number of Shares for which payment is being tendered. An optionee may also exercise an option by electing to deliver shares of Company Common Stock that have been held by the optionee for at least six months. The Committee may, in its discretion, permit optionees who are employees of the Company to pay the exercise price of options by delivering to

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the Company a full recourse promissory Note. Such an election is subject to approval or disapproval by the Committee, and if the optionee is subject to short-swing profit liability under Section 16 of the Exchange Act, the timing of the election must satisfy the requirements of Rule 16b-3, as promulgated under the Exchange Act. The Company shall deliver to the optionee, which delivery shall be not less than fifteen (15) days and not more than thirty (30) days after the giving of such notice, without transfer or issue tax to the optionee (or other person entitled to exercise the option), at the principal office of the Company, or such other place as shall be mutually acceptable, a certificate or certificates for such Shares dated the date the options were validly exercised; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any requirements of law.

(ii) Use of Proceeds from Stock. Proceeds from the sale of Shares pursuant to the exercise of options granted under the Plan shall constitute general funds of the Company.

(iii) Rights as a Shareholder. The optionee shall have no rights as a shareholder with respect to any Shares until the date of issuance of a stock certificate for such Shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance, except as provided in Section 11 hereof.

(iv) Withholding. The Company shall have the right to condition the issuance of shares upon exercise of a nonstatutory stock option upon payment by the optionee of any income taxes required to be withheld under federal, state or local tax laws or regulations in connection with such exercise.

(v) Limitations on Grants to Directors. No Director of the Company shall be granted options in any one calendar year which would entitle him or her to acquire more than ten percent of the Shares, as adjusted pursuant to Section
11. The aggregate amount of Shares subject to options granted to all Directors of the Company as a group shall not exceed thirty-three percent of the Shares, as adjusted pursuant to Section 11.

(vi) Other Terms and Conditions. Options may also contain such other provisions, which shall not be inconsistent with any of the foregoing terms, as the Committee shall deem appropriate. No option, however, nor anything contained in the plan, shall confer upon any optionee any right to continue in the employ or in the status as a director or consultant of the Company, nor limit in any way the right of the Company to terminate an optionee's employment or status as a consultant at any time.

7. STOCK BONUS AWARDS

Stock bonus awards may be either granted alone or in addition to options and other rights granted under the Plan. Such awards shall be granted for no cash consideration. The Committee shall determine, in its sole discretion, the terms, conditions and restrictions for each stock bonus award, and shall determine any performance or employment related factors to be considered in the granting of stock bonus awards and the extent to which such stock bonus awards have been earned. Stock bonus awards may vary from participant to participant and between groups of participants. Each stock bonus award shall be confirmed by, and be subject to the terms of, a stock bonus award agreement.

8. STOCK PURCHASE RIGHTS

(i) Rights to Purchase. Stock purchase rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Committee determines that it will offer stock purchase rights under the Plan, it shall advise the offeree in writing, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and the time within which the offeree must accept such offer, which shall in no event exceed sixty (60) days from the date upon which the Committee made the determination to grant the stock purchase right. The offer shall be accepted by execution of a restricted stock purchase agreement in the form determined by the Committee.

(ii) Repurchase Option. Unless the Committee determines otherwise, the restricted stock purchase agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser's employment with the Company for any reason (including death or disability). The purchase price for Shares repurchased pursuant to the restricted stock purchase agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Committee.

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(iii) Rule 16b-3. Stock purchase rights granted to individual subject to Section 16 of the Exchange Act, and Shares purchased by such individuals in connection with stock purchase rights, shall be subject to any restrictions applicable thereto in compliance with Rule 16b-3. An Insider may only purchase Shares pursuant to the grant of a stock purchase right, and may only sell Shares purchased pursuant to the grant of a stock purchase right, during such time or times as are permitted by Rule 16b-3.

(iv) Other Provisions. The restricted stock purchase agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee in its sole discretion. In addition, the provisions of restricted stock purchase agreements need not be the same with respect to each purchaser.

(v) Rights as a Shareholder. Once the stock purchase right is exercised, the purchaser shall have the rights equivalent to those of a shareholder, and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock purchase right is exercised, except as provided in Section 11 of the Plan.

9. AUTOMATIC OUTSIDE DIRECTOR STOCK AWARDS

Members of the Board of Directors of the Company who are not also employees of the Company or its affiliates and who have not been employees of the Company or its affiliates for the period commencing three years prior to the date of any grants under this Section 9, shall be automatically awarded 2,500 shares of Company common stock on (i) the day after shareholder approval of the amendment to this Section 9 of the Option Plan (approved by the Board of Directors in October 1994) is obtained (1994 Grant), (ii) the day after shareholder approval of the amendment to this Section 9 of the Option Plan (to be approved by the Board of Directors in April 1995) is obtained (1995 Grant) and (iii) the day after the 1996 Annual Meeting of Shareholders (1996 Grant). Moreover, members of the Board of Directors who are appointed or elected to the Board subsequent to any of the above grant dates shall automatically be awarded a number of shares of Company common stock, on the date of such appointment or election, determined by multiplying 2,500 by a fraction, the numerator of which shall be the number of months until the next May 1 (counting any partial month as a full month) and the denominator of which shall be 12, which number shall be rounded down to the nearest whole integer.

The automatic grants to certain Outside Directors pursuant to this Section 9 shall not be subject to the discretion of any person. The provisions of this
Section 9 shall not be amended more than once every six months, other than to comport with changes in the Code or the rules thereunder. Any amendment to this
Section 9 shall, to the extent required by applicable rules of the Securities and Exchange Commission, be approved by the shareholders of the Company.

10. NON-TRANSFERABILITY

Each option and right shall be transferable only by will or the laws of descent and distribution and shall be exercisable during the participant's lifetime only by the participant, or in the event of disability, the participant's qualified representative. In addition, in order for Shares acquired under incentive stock options to receive the tax treatment afforded such shares, the Shares may not be disposed of within two years from the date of the option grant nor within one year after the date of transfer of such Shares to the optionee.

11. ADJUSTMENT OF, AND CHANGES IN, THE SHARES

In the event the shares of Common Stock of the Company, as presently constituted, shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether by reason of reorganization, merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise), or if the number of Shares of Common Stock of the Company shall be increased through the payment of a stock dividend, there shall be substituted for or added to each Share of Common Stock of the Company theretofore appropriated or thereafter subject or which may become subject to an option, right or stock bonus award under the Plan, the number and kind of shares of stock or other securities into which each outstanding share of Common Stock of the Company shall be so changed, or for which each share shall be exchanged, or to which each such share shall be entitled, as the case may be. In addition, appropriate adjustment shall be made in the number and kind of Shares as to the outstanding options, rights or stock bonus awards or portions thereof, then unexercised, so that any participant's proportionate interest in the Company by reason of his or her rights under unexercised portions of such options, rights or stock bonus awards shall be maintained as before the

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occurrence of such event. Such adjustment in outstanding options or rights shall be made without change in the total price to the unexercised portion of the option or right, and with a corresponding adjustment in the option or right price per share.

In the event of a proposed dissolution or liquidation of the Company, options, rights and shares outstanding under the Plan shall become accelerated so as to become 100% vested immediately prior to the consummation of such proposed action.

In the event of a "change in control" (as defined in the immediately succeeding paragraph), all outstanding options, rights and shares under the Plan, shall become 100% vested. If outstanding options and rights become fully vested in the event of a change in control, the Board shall notify all participants that their outstanding options and rights shall be fully exercisable for a period of 3 months (or such other period of time not exceeding six months as is determined by the Board at the time of grant) from the date of such notice, and any unexercised options or rights shall terminate upon the expiration of such period.

"Change in control" means the occurrence of any of the following events:

(i) Any "person" (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the shareholders of the Company or of the Company's wholly-owned bank subsidiary (the "Bank") in substantially the same proportions as their ownership of stock in the Company or the Bank (as the case may be), becomes after the date hereof the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company or the Bank representing fifty percent (50%) or more of the total voting power represented by the Company's or the Bank's then outstanding securities that vote generally in the election of directors ("Voting Securities");

(ii) Any "person" (as such term is used in Section 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the shareholders of the Company or the Bank in substantially the same proportions as their ownership of stock in the Company or the Bank (as the case may be), becomes after the date hereof the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of twenty-five percent (25%) or more of the Voting Securities of the Company or the Bank, and within a period of twelve (12) months of such acquisition of beneficial ownership, individuals who at the beginning of such period constitute the Board of Directors of the Company or the Bank, or any new director whose election or nomination was approved by a vote of at least two-thirds of the directors of the Company or the Bank (as the case may be), then still in office who were directors at the beginning of such period, or whose election or nomination was previously so approved, cease for any reason to constitute at least sixty percent (60%) of the directors of the Company or the Bank;

(iii) The merger or consolidation of the Company or the Bank with any other corporation, other than a merger or consolidation in which the shareholders of the Company or the Bank (as the case may be) immediately prior thereto continue to own, directly or indirectly, Voting Securities representing at least seventy-five percent (75%) of the total voting power of the entity surviving such merger or consolidation; or

(iv) The complete liquidation of the Company or the Bank or sale or disposition by the Company or the Bank (in one transaction or a series of transactions) of all or substantially all of the Company's or the Bank's assets.

No right to purchase fractional shares shall result from any adjustment in options or rights pursuant to this Section 11. In case of any such adjustment, the shares subject to the option or right shall be rounded down to the nearest whole share. Notice of any adjustment shall be given by the Company to each holder of an option or right which was in fact so adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.

To the extent the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.

Except as expressly provided in this Section 11, a participant shall have no rights by reason of any of the following events: (1) subdivision or consolidation of shares of stock of any class issued by the Company; (2) payment by the Company of any stock dividend; (3) any other increase or decrease in the number of shares of

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stock of any class; (4) any dissolution, liquidation, merger, consolidation, spin-off or acquisition of assets or stock of another corporation by the Company. Any issue by the Company of shares of stock of any class, or securities convertible into shares of any class, shall not affect the number or price of shares of Common Stock subject to the option, right or stock bonus award, and no adjustment by reason thereof shall be made.

The grant of an option, right or stock bonus award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.

12. LISTING OR QUALIFICATION OF SHARES

All options and rights granted under the Plan are subject to the requirement that if at any time the Committee shall determine in its discretion that the listing or qualification of the Shares subject thereto on any securities exchange or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of or in connection with the issuance of the Shares under the option or right, the option or right may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been effected or obtained, free of any condition not acceptable to the Committee.

13. BINDING EFFECT OF CONDITIONS

The conditions and stipulations herein contained, or in any option, right or stock bonus award granted pursuant to the Plan shall be, and constitute, a covenant running with all of the Shares acquired by the participant pursuant to this Plan, directly or indirectly, whether the same have been issued or not, and those Shares owned by the participant shall not be sold, assigned or transferred by any person save and except in accordance with the terms and conditions herein provided. In addition, the participant shall agree to use the participant's best efforts to cause the officers of the Company to refuse to record on the books of the Company any assignment or transfer made or attempted to be made, except as provided in the Plan, and to cause said officers to refuse to cancel old certificates or to issue or deliver new certificates therefor where the purchaser or assignee has acquired certificates or the shares represented thereby, except strictly in accordance with the provisions of the Plan.

14. AMENDMENT AND TERMINATION OF THE PLAN

The Board shall have complete power and authority to terminate or amend the Plan; provided, however, that the Board shall not, without the approval of the shareholders of the Company, amend the Plan in a manner that requires shareholder approval for continued compliance with the terms of Rule 16b-3, as promulgated under the Exchange Act, Section 422 of the Code, any successor rules, or other regulatory authority. Except as provided in Section 11, no termination, modification or amendment of the Plan may, without the consent of any employee or officer to whom such option, right or stock bonus award was previously granted under the Plan, adversely affect the rights of such employee or officer under such option, right or stock bonus award.

The Plan, unless sooner terminated, shall terminate ten years from the date the Plan is adopted by the Board. An option, right or stock bonus award may not be granted under the Plan after the Plan is terminated.

15. EFFECTIVENESS OF THE PLAN

The Plan shall become effective only upon adoption by the Board. The effectiveness of the Plan shall be conditioned upon the approval of the Plan by the shareholders of the Company within twelve (12) months of the adoption of the Plan by the Board. Options, rights or stock bonus awards may be granted from time to time, as the Committee may determine; provided, however, that the exercise of any option or right under the Plan shall be conditioned upon the registration of the Shares with the Securities and Exchange Commission and qualification of the options, rights and underlying Shares under the California securities laws unless in the opinion of counsel to the Company such registration or qualification is not necessary.

16. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE AND NOTICE OF SALE

No participant shall be entitled to the privileges of stock ownership as to any Shares not actually issued and delivered to the participant. No Shares shall be purchased upon the exercise of any option unless and until all of the

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then applicable requirements of any (i) regulatory agencies having jurisdiction and (ii) any exchanges upon which the Common Stock of the Company may be listed shall have been fully complied with. The Company shall diligently endeavor to comply with all applicable securities laws before any options, rights or stock bonus awards are granted under the Plan and before any Shares are issued pursuant to the exercise of such options, rights or stock bonus awards. The participant shall give the Company notice of any sale or other disposition of any such Shares not more than five days after such sale or disposition.

17. INDEMNIFICATION

To the extent permitted by applicable law in effect from time to time, no member of the Board or the Committee shall be liable for any action or omission of any other member of the Board or Committee nor for any act or omission on the member's own part, excepting only the member's own willful misconduct or gross negligence. The Company shall pay expenses incurred by, and satisfy a judgment or fine rendered or levied against, a present or former director or member of the Committee in any action against such person (whether or not the Company is joined as a party defendant) to impose liability or a penalty on such person for an act alleged to have been committed by such person while a director or member of the Committee arising with respect to the Plan or administration thereof or out of membership on the Committee or by the Company, or all or any combination of the preceding; provided the director or Committee member was acting in good faith, within what such director or Committee member reasonably believed to have been within the scope of his or her employment or authority and for a purpose which he or she reasonably believed to he in the best interests of the Company or its shareholders. Payments authorized hereunder include amounts paid and expenses incurred in settling any such action or threatened action. This section does not apply to any action instituted or maintained in the right of the Company by a shareholder or holder of a voting trust certificate representing shares of the Company. The provisions of this section shall apply to the estate, executor, administrator, heirs, legatees or devisees of a director or Committee member, and the term "person" as used in this section shall include the estate, executor, administrator, heirs, legatees or devisees of such person.

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EXHIBIT 10.29
SILICON VALLEY BANK

MONEY PURCHASE PENSION PLAN

ESTABLISHED EFFECTIVE JANUARY 1, 1995

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SILICON VALLEY BANK

MONEY PURCHASE PENSION PLAN

ESTABLISHED EFFECTIVE JANUARY 1, 1995

Silicon Valley Bank hereby establishes the Silicon Valley Bank Money Purchase Pension Plan effective January 1, 1995, for the benefit of eligible employees of the Company and its participating affiliates. The Plan is intended to constitute a qualified money purchase pension plan, as described in Code section 401(a).

The Silicon Valley Bank Money Purchase Pension Plan, as set forth in this document, is hereby established effective as of January 1, 1995.

Date: May 28, 1996 SILICON VALLEY BANK

By:    /s/ Glen Simmons
   ------------------------------------

Title: E.V.P. Human Resources
       ---------------------------------

1. DEFINITIONS

When capitalized, the words and phrases below have the following meanings unless different meanings are clearly required by the context:

1.1 ACCOUNT. The records maintained for purposes of accounting for a Participant's interest in the Plan. "Account" refers to the following account which has been created on behalf of a Participant to hold Contributions under the Plan:

1.2 MONEY PURCHASE PENSION ACCOUNT. An account created to hold Money Purchase Pension Contributions.

1.3 ADMINISTRATOR. The Company, which may delegate all or a portion of the duties of the Administrator under the Plan to a Committee in accordance with
Section 14.6.

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1.4 BENEFICIARY. The person or persons who is to receive benefits after the death of the Participant pursuant to the "Beneficiary Designation" paragraph in Section 11, or as a result of a QDRO.

1.5 BREAK IN SERVICE. The fifth anniversary (or sixth anniversary if absence from employment was due to a Parental Leave) of the date on which a Participant's employment ends.

1.6 CODE. The Internal Revenue Code of 1986, as amended. Reference to any specific Code section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

1.7 COMMITTEE. If applicable, the committee which has been appointed by the Company to administer the Plan in accordance with Section 14.6.

1.8 COMPANY. Silicon Valley Bank or any successor by merger, purchase or otherwise.

1.9 COMPANY STOCK. Shares of common stock of Silicon Valley Bancshares, the parent company of the Company, its predecessor(s), or its successors or assigns, or any corporation with or into which said corporation may be merged, consolidated or reorganized, or to which a majority of its assets may be sold.

1.10 COMPENSATION. The sum of a Participant's Taxable Income and salary reductions, if any, pursuant to Code sections 125, 402(e)(3), 402(h), 403(b), 414(h)(2) or 457 for the Plan Year.

For purposes of determining benefits under this Plan, Compensation is limited to $150,000, (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of the preceding sentence, in the case of an HCE who is a 5% Owner or one of the 10 most highly compensated Employees, (i) such HCE and such HCE's family group (as defined below) shall be treated as a single employee and the Compensation of each family group member shall be aggregated with the Compensation of such HCE, and (ii) the limitation on Compensation shall be allocated among such HCE and his or her family group members in proportion to each individual's Compensation before the application of this sentence. For purposes of this Section, the term "family group" shall mean an Employee's spouse and lineal descendants who have not attained age 19 before the close of the year in question.

1.11 CONTRIBUTION. An amount contributed to the Plan by the Employer and allocated by contribution type to Participants' Accounts, as described in
Section 1.1. Contributions to the Plan consist of:

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1.12 MONEY PURCHASE PENSION CONTRIBUTION. An amount contributed by the Employer on an eligible Participant's behalf and allocated on a pay based formula.

1.13 CONVERSION PERIOD. The period of converting the prior accounting system of any plan and trust which is merged into this Plan subsequent to the Effective Date, to the accounting system described in Section 6.

1.14 DIRECT ROLLOVER. An Eligible Rollover Distribution that is paid directly to an Eligible Retirement Plan for the benefit of a Distributee.

1.15 DISABILITY. A Participant's mental or physical disability resulting in termination of employment as evidenced by presentation of medical evidence satisfactory to the Administrator.

1.16 DISTRIBUTEE. An Employee or former Employee, the surviving spouse of an Employee or former Employee and a spouse or former spouse of an Employee or former Employee determined to be an alternate payee under a QDRO.

1.17 EARLY RETIREMENT DATE. The date of a Participant's 55th birthday and completion of 10 Years of Vesting Service.

1.18 EFFECTIVE DATE. The date upon which the provisions of this document become effective. This date is January 1, 1995, unless stated otherwise.

1.19 ELIGIBLE EMPLOYEE. An Employee of an Employer, except any Employee:

(a) whose compensation and conditions of employment are covered by a collective bargaining agreement to which an Employer is a party unless the agreement calls for the Employee's participation in the Plan;

(b) who is treated as an Employee because he or she is a Leased Employee; or

(c) who is a nonresident alien who (i) either receives no earned income (within the meaning of Code section 911(d)(2)), from sources within the United States under Code section 861(a)(3); or (ii) receives such earned income from such sources within the United States but such income is exempt from United States income tax under an applicable income tax convention.

1.20 ELIGIBLE RETIREMENT PLAN. An individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section 401(a), that accepts a Distributee's Eligible Rollover Distribution, except that with

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regard to an Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity.

1.21 ELIGIBLE ROLLOVER DISTRIBUTION. A distribution of all or any portion of the balance to the credit of a Distributee, excluding a distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of a Distributee or the joint lives (or joint life expectancies) of a Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; a distribution to the extent such distribution is required under Code section
401(a)(9); and the portion of a distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities).

1.22 EMPLOYEE. An individual who is:

(a) directly employed by any Related Company and for whom any income for such employment is subject to withholding of income or social security taxes, or

(b) a Leased Employee.

1.23 EMPLOYER. The Company and any Related Company which adopts this Plan with the approval of the Company.

1.24 ERISA. The Employee Retirement Income Security Act of 1974, as amended. Reference to any specific ERISA section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

1.25 FORFEITURE ACCOUNT. An account holding amounts forfeited by Participants who have terminated employment with all Related Companies, invested in interest bearing deposits of the Trustee, pending disposition as provided in this Plan and as directed by the Administrator.

1.26 HCE OR HIGHLY COMPENSATED EMPLOYEE. With respect to each Employer and its Related Companies, an Employee during the Plan Year or "lookback year" who (in accordance with Code section 414(q)):

(a) was a more than 5% Owner at any time during the "lookback year" or Plan Year;

(b) received Compensation during the "lookback year" (or in the Plan Year if among the 100 Employees with the highest Compensation for such Year) in

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excess of (i) $75,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)), or (ii) $50,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)) in the case of a member of the "top-paid group" (within the meaning of Code section 414(q)(4)) for such Year, provided, however, that if the conditions of Code section 414(q)(12)(B)(ii) are met, the Company may elect for any Plan Year to apply clause (i) by substituting $50,000 for $75,000 and not to apply clause (ii); or

(c) was an officer of a Related Company and received Compensation during the "lookback year" (or in the Plan Year if among the 100 Employees with the highest Compensation for such Year) that is greater than 50% of the dollar limitation in effect under Code section 415(b)(1)(A) and (d) for such Year (or if no officer has Compensation in excess of the threshold, the officer with the highest Compensation), provided that the number of officers shall be limited to 50 Employees (or, if less, the greater of three Employees or 10% of the Employees).

A former Employee shall be treated as an HCE if (1) such former Employee was an HCE when he separated from service, or (2) such former Employee was an HCE in service at any time after attaining age 55.

The determination of who is an HCE, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees and the number of Employees treated as officers shall be made in accordance with Code section 414(q).

Pursuant to Code section 414(q), the Company elects as the "lookback year" the 12 months ending immediately prior to the start of the Plan Year.

1.27 INELIGIBLE. The Plan status of an individual during the period in which he or she is (1) an Employee of a Related Company which is not then an Employer, (2) an Employee, but not an Eligible Employee, or (3) not an Employee.

1.28 INVESTMENT FUND OR FUND. An investment fund as described in Section 15.2.

1.29 LEASED EMPLOYEE. An individual who is deemed to be an employee of any Related Company as provided in Code section 414(n) or (o).

1.30 LEAVE OF ABSENCE. A period during which an individual is deemed to be an Employee, but is absent from active employment, provided that the absence:

(a) was authorized by a Related Company; or

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(b) was due to military service in the United States armed forces and the individual returns to active employment within the period during which he or she retains employment rights under federal law.

1.31 NORMAL RETIREMENT DATE. The date of a Participant's 62nd birthday.

1.32 OWNER. A person with an ownership interest in the capital, profits, outstanding stock or voting power of a Related Company within the meaning of Code section 318 or 416 (which exclude indirect ownership through a qualified plan).

1.33 PARENTAL LEAVE. The period of absence from work by reason of pregnancy, the birth of an Employee's child, the placement of a child with the Employee in connection with the child's adoption, or caring for such child immediately after birth or placement as described in Code section 410(a)(5)(E).

1.34 PARTICIPANT. The Plan status of an Eligible Employee after he or she completes the eligibility requirements as described in Section 2.1. A Participant's participation continues until his or her employment with all Related Companies ends and his or her Account is distributed or forfeited.

1.35 PAY. All cash compensation, excluding incentive pay (annual incentive awards, referral fees and other recognition/achievement awards), paid to an Eligible Employee by an Employer while a Participant during the current period. Pay excludes reimbursements or other expense allowances, cash and non-cash fringe benefits, moving expenses, deferred compensation and welfare benefits.

Pay shall be determined further by including amounts contributed by an Employer pursuant to Code sections 125 and 402(e)(3). Pay is limited to $150,000 (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year.

For purposes of the Contributions described in Section 5.1, the limitations as described in the second paragraph of Section 1.9 shall also apply.

1.36 PERIOD OF EMPLOYMENT. The period beginning on the date an Employee first performs an hour of service and ending on the date his or her employment ends. Employment ends on the date the Employee quits, retires, is discharged, dies or (if earlier) the first anniversary of his or her absence for any other reason. The period of absence starting with the date an Employee's employment temporarily ends and ending on the date he or she is subsequently reemployed is
(1) included in his or her Period of Employment if the period of absence does not exceed one year, and (2) excluded if such period exceeds one year.

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Period of Employment includes the period prior to a Break in Service.

An Employee's service with a predecessor or acquired company shall only be counted in the determination of his or her Period of Employment for eligibility and/or vesting purposes if (1) the Company directs that credit for such service be granted, or (2) a qualified plan of the predecessor or acquired company is subsequently maintained by any Employer or Related Company.

1.37 PLAN. The Silicon Valley Bank Money Purchase Pension Plan set forth in this document, as from time to time amended.

1.38 Plan Year. The annual accounting period of the Plan which ends on each December 31.

1.39 QDRO. A domestic relations order which the Administrator has determined to be a qualified domestic relations order within the meaning of Code section 414(p).

1.40 REDUCTION IN FORCE. An Employer sponsored program developed to reduce force on a permanent basis.

1.41 RELATED COMPANY. With respect to any Employer, that Employer and any corporation, trade or business which is, together with that Employer, a member of the same controlled group of corporations, a trade or business under common control, or an affiliated service group within the meaning of Code sections
414(b), (c), (m) or (o), except that for purposes of Section 12 "within the meaning of Code sections 414(b), (c), (m) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to "within the meaning of Code section 414(b), (c), (m) or (o)."

1.42 SENIOR PARTICIPANT. A Participant who is age 55 or over.

1.43 SETTLEMENT DATE. For each Trade Date, the Trustee's next business day.

1.44 SPOUSAL CONSENT. The written consent given by a spouse to a Participant's election or waiver of a specified form of benefit or Beneficiary designation. The spouse's consent must acknowledge the effect on the spouse of the Participant's election, waiver or designation, and be duly witnessed by a Plan representative or notary public. Spousal Consent shall be valid only with respect to the spouse who signs the Spousal Consent and only for the particular choice made by the Participant which requires Spousal Consent. A Participant may revoke (without Spousal Consent) a prior election, waiver or designation that required Spousal Consent at any time before payments begin. Spousal Consent also

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means a determination by the Administrator that there is no spouse, the spouse cannot be located, or such other circumstances as may be established by applicable law.

1.45 SWEEP ACCOUNT. The subsidiary Account for each Participant through which all transactions are processed, which is invested in interest bearing deposits of the Trustee.

1.46 SWEEP DATE. The cut off date and time for receiving instructions for transactions to be processed on the next Trade Date.

1.47 TAXABLE INCOME. Compensation in the amount reported by the Employer or a Related Company as "Wages, tips, other compensation" on Form W 2, or any successor method of reporting under Code section 6041(d).

1.48 TRADE DATE. Each day the Investment Funds are valued, which is normally every day the assets of such Funds are traded.

1.49 TRUST. The legal entity created by those provisions of the Silicon Valley Bank 401(k) and Employee Stock Ownership Plan and Trust and which relate to the Trustee and any successor Trust that may be created to hold the Plan assets. The Trust is part of the Plan and holds the Plan assets which are comprised of the aggregate of Participants' Accounts, any unallocated funds invested in deposit or money market type assets pending allocation to Participants' Accounts or disbursement to pay Plan fees and expenses and the Forfeiture Account.

1.50 TRUSTEE. Wells Fargo Bank, National Association.

1.51 YEAR OF VESTING SERVICE. A 12 month Period of Employment.

Notwithstanding, Years of Vesting Service shall be calculated as follows if (and only if) it would be of benefit to the Employee:

(a) For service from January 1, 1995, each 12 month Period of Employment;

(b) For service prior to January 1, 1995, a 12 month period ending on the anniversary of the date an individual became an Employee, or as that date may be adjusted as a result of his or her termination of employment with all Related Companies and subsequent rehire as an Employee, in which an Employee is credited with at least 1,000 hours of service, as such term was defined for this purpose under the terms of the Silicon Valley Bancshares Employee Stock Ownership Plan as then in effect prior to the Effective Date.

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Years of Vesting Service shall include service credited prior to January 1, 1995.

2. ELIGIBILITY

2.1 ELIGIBILITY. Each Eligible Employee shall become a Participant on the later of January 1, 1995 or on the first January 1, April 1, July 1 or October 1 after the date he or she attains age 18, and completes one hour of service.

2.2 INELIGIBLE EMPLOYEES. If an Employee completes the above eligibility requirements, but is Ineligible at the time participation would otherwise begin (if he or she were not Ineligible), he or she shall become a Participant on the first subsequent date on which he or she is an Eligible Employee.

2.3 INELIGIBLE OR FORMER PARTICIPANTS. A Participant may not share in Plan Contributions during the period he or she is Ineligible, but he or she shall continue to participate for all other purposes. An Ineligible Participant or former Participant shall automatically become an active Participant on the date he or she again becomes an Eligible Employee.

3. PARTICIPANT CONTRIBUTIONS

Participant Contributions are not permitted under the Plan.

4. TRANSFERS FROM AND TO OTHER QUALIFIED PLANS

4.1 TRANSFERS FROM AND TO OTHER QUALIFIED PLANS. The Administrator may accept assets in cash or in-kind directly from another qualified plan or transfer assets in cash or in-kind directly to another qualified plan; provided that receipt of a transfer shall not be permitted if:

(a) any amounts are not exempted by Code section 401(a)(11)(B) from the annuity requirements of Code section 417 unless the Plan complies with such requirements; or

(b) any amounts include benefits protected by Code section 411(d)(6) which would not be preserved under applicable Plan provisions.

The Administrator may refuse the receipt of any transfer if:

(a) the Administrator finds the in-kind assets unacceptable; or

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(b) instructions for posting amounts to Participants' Accounts are incomplete.

Such amounts shall be posted to the appropriate Accounts of Participants as of the date received.

5. EMPLOYER CONTRIBUTIONS AND FORFEITURE ACCOUNT ALLOCATIONS

5.1 MONEY PURCHASE PENSION CONTRIBUTIONS AND FORFEITURE ACCOUNT ALLOCATIONS.

(a) FREQUENCY AND ELIGIBILITY. For each quarter of the Plan Year, the Employer shall make a Money Purchase Pension Contribution on behalf of each Participant who was an Eligible Employee on the last day of the period. Such Contributions shall also be made on behalf of each Participant who was an Eligible Employee at any time during the period but who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date or by reason of his or her Disability or death.

For each Plan Year, the Employer shall allocate any Forfeiture Account balance remaining as of the end of the Plan Year as Money Purchase Pension Contributions on behalf of each Participant who was an Eligible Employee on the last day of the period. Such an allocation shall also be made on behalf of each Participant who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date or by reason of his or her Disability or death.

5.2 ALLOCATION METHOD. The Money Purchase Pension Contribution for each period, shall be equal to 5% of each eligible Participant's Pay (not including Forfeiture Account amounts allocated as Money Purchase Pension Contributions).

Forfeiture Account amounts allocated as Money Purchase Pension Contributions shall be allocated among eligible Participants in direct proportion to their Pay.

(a) TIMING, MEDIUM AND POSTING. The Employer shall make each period's Money Purchase Pension Contribution in cash and allocate Forfeiture Account amounts as soon as administratively feasible, and for purposes of deducting such Money Purchase Pension Contribution, not later than the Employer's federal tax filing date, including extensions. Such amounts shall be posted to each Participant's Money Purchase Pension Account once the total Contribution received or Forfeiture Account amount to be allocated has been balanced against the specific amount to be credited to each Participant's Money Purchase Pension Account.

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6. ACCOUNTING

6.1 INDIVIDUAL PARTICIPANT ACCOUNTING. The Administrator shall maintain an individual set of Accounts for each Participant in order to reflect transactions both by type of Account and investment medium. Financial transactions shall be accounted for at the individual Account level by posting each transaction to the appropriate Account of each affected Participant. Participant Account values shall be maintained in shares for the Investment Funds and in dollars for the Sweep Account. At any point in time, the Account value shall be determined using the most recent Trade Date values provided by the Trustee.

6.2 SWEEP ACCOUNT IS TRANSACTION ACCOUNT. All transactions related to amounts being contributed to or distributed from the Trust shall be posted to each affected Participant's Sweep Account. Any amount held in the Sweep Account shall be credited with interest up until the date on which it is removed from the Sweep Account.

6.3 TRADE DATE ACCOUNTING AND INVESTMENT CYCLE. Participant Account values shall be determined as of each Trade Date. For any transaction to be processed as of a Trade Date, the Trustee must receive instructions for the transaction by the Sweep Date. Such instructions shall apply to amounts held in the Account on that Sweep Date. Financial transactions of the Investment Funds shall be posted to Participants' Accounts as of the Trade Date, based upon the Trade Date values provided by the Trustee, and settled on the Settlement Date.

6.4 ACCOUNTING FOR INVESTMENT FUNDS. Investments in each Investment Fund shall be maintained in shares. The share value of each Investment Fund shall be based on the fair market value of its underlying assets.

6.5 PAYMENT OF FEES AND EXPENSES. Except to the extent Plan fees and expenses related to Account maintenance, transaction and Investment Fund management and maintenance, as set forth below, are paid by the Employer directly, or indirectly, through the Forfeiture Account as directed by the Administrator, such fees and expenses shall be paid as set forth below. The Employer may pay a lower portion of the fees and expenses allocable to the Accounts of Participants who are no longer Employees or who are not Beneficiaries, unless doing so would result in discrimination.

(a) ACCOUNT MAINTENANCE: Account maintenance fees and expenses, may include but are not limited to, administrative, Trustee, government annual report preparation, audit, legal, nondiscrimination testing and fees for any other special services. Account maintenance fees shall be charged to Participants on a per Participant basis provided that no fee shall reduce a Participant's Account balance below zero.

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(b) TRANSACTION: Transaction fees and expenses, may include but are no limited to, periodic installment payment and Investment Fund election change fees. Transaction fees shall be charged to the Participant's Account involved in the transaction provided that no fee shall reduce a Participant's Account balance below zero.

(c) Investment Fund Management and Maintenance: Management and maintenance fees and expenses related to the Investment Funds shall be charged at the Investment Fund level and reflected in the net gain or loss of each Fund.

As of the Effective Date, a breakdown of which Plan fees and expenses shall generally be borne by the Trust (and charged to individual Participants' Accounts or charged at the Investment Fund level and reflected in the net gain or loss of each Fund) and those that shall be paid by the Employer is set forth in Appendix B and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan or the Trust.

6.6 ERROR CORRECTION. The Administrator may correct any errors or omissions in the administration of the Plan by restoring any Participant's Account balance with the amount that would be credited to the Account had no error or omission been made. Funds necessary for any such restoration shall be provided through payment made by the Employer, unless the Trustee is required to provide such restoration funds pursuant to the Trust, or if the restoration involves an Account holding amounts contributed by an Employer, the Administrator may direct the Trustee to use amounts from the Forfeiture Account.

6.7 PARTICIPANT STATEMENTS. The Administrator shall provide Participants with statements of their Accounts as soon after the end of each quarter of the Plan Year as administratively feasible.

6.8 SPECIAL ACCOUNTING DURING CONVERSION PERIOD. The Administrator may use any reasonable accounting methods in performing its duties during any Conversion Period. This includes, but is not limited to, the method for allocating net investment gains or losses and the extent, if any, to which contributions received by and distributions paid from the Trust during this period share in such allocation.

6.9 ACCOUNTS FOR QDRO BENEFICIARIES. A separate Account shall be established for an alternate payee entitled to any portion of a Participant's Account under a QDRO as of the date and in accordance with the directions specified in the QDRO. In addition, a separate Account may be established during the period of time the Administrator, a court of competent jurisdiction or other appropriate person is determining whether a domestic relations order qualifies as a QDRO. Such a separate Account shall be valued and accounted for in the same manner as any other Account.

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(a) DISTRIBUTIONS PURSUANT TO QDROS. If a QDRO so provides, the portion of a Participant's Account payable to an alternate payee may be distributed, in a form as permissible under Section 11 and Code section 414(p), to the alternate payee at the time specified in the QDRO, regardless of whether the Participant is entitled to a distribution from the Plan at such time.

(b) INVESTMENT DIRECTION. Where a separate Account has been established on behalf of an alternate payee and has not yet been distributed, the alternate payee may direct the investment of such Account in the same manner as if he or she were a Participant.

7. INVESTMENT AUTHORITY AND INVESTMENT FUNDS

7.1 GENERAL INVESTMENT AUTHORITY. The Administrator shall be responsible for directing the investment of all Plan assets, except that a Senior Participant shall be provided the option to direct the investment of his or her Account as described in this Section. Except for Participants' Sweep Accounts, the Plan assets shall be maintained in one or more Investment Funds. The Administrator shall select the Investment Funds and may change the number or composition of the Investment Funds.

7.2 SPECIAL INVESTMENT AUTHORITY PROVISIONS RELATED TO SENIOR PARTICIPANTS. A Senior Participant may direct the investment of the balance in his or her Account in any combination of one or any number of the Investment Funds offered in accordance with the procedures established by the Administrator. Any amount deposited to a Senior Participant's Account shall be invested as directed by the Administrator, until otherwise directed by the Senior Participant. During any Conversion Period, Plan assets may be held in any investment vehicle permitted by the Plan, as directed by the Administrator, irrespective of a Senior Participant's investment elections.

The Administrator shall select the Investment Funds offered to Senior Participants and may change the number or composition of the Investment Funds. A Senior Participant may change his or her investment election at any time in accordance with the procedures established by the Administrator. Investment elections received by the Sweep Date shall be effective on the following Trade Date. A reasonable processing fee may be charged directly to a Senior Participant's Account for Investment Fund election changes in excess of a specified number per year as determined by the Administrator.

A Senior Participant shall be solely responsible for the selection of his or her Investment Fund choices. No fiduciary with respect to the Plan is empowered to advise a Senior Participant as to the manner in which his or her Account is to be invested, and the fact that an Investment Fund is offered shall not be construed to be a recommendation for investment.

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As of the Effective Date, a list of the Investment Funds offered under the Plan to Senior Participants is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan or the Trust.

8. VESTING AND FORFEITURES

8.1 FULL VESTING UPON CERTAIN EVENTS. A Participant's entire Account shall become fully vested once he or she has attained his or her Normal Retirement Date as an Employee or upon his or her terminating employment with all Related Companies due to a Reduction in Force or his or her Disability or death.

8.2 VESTING SCHEDULE. In addition to the vesting provided above, a Participant's Money Purchase Pension Account shall become vested in accordance with the following schedule:

Years of Vesting        Vested
Service                 Percentage

Less than 1             0%
1 but less than 2       20%
2 but less than 3       40%
3 but less than 4       60%
4 but less than 5       80%
5 or more               100%

If this vesting schedule is changed, the vested percentage for each Participant shall not be less than his or her vested percentage determined as of the last day prior to this change, and for any Participant with at least three Years of Vesting Service when the schedule is changed, vesting shall be determined using the more favorable vesting schedule.

8.3 FORFEITURES. A Participant's non-vested Account balance shall be forfeited as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment has terminated with all Related Companies. Forfeitures from all Employer Contribution Accounts shall be transferred to and maintained in a single Forfeiture Account. Forfeiture Account amounts shall be utilized to restore Accounts, to pay Plan fees and expenses at the discretion of the Administrator and in accordance with Section 5 to increase the amount allocated as Money Purchase Pension Contributions as directed by the Administrator.

8.4 REHIRED EMPLOYEES.

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(a) SERVICE. If a former Employee is rehired, all Periods of Employment credited when his or her employment last terminated shall be counted in determining his or her vested interest.

(b) ACCOUNT RESTORATION. If a former Employee is rehired before he or she has a Break in Service, the amount forfeited when his or her employment last terminated shall be restored to his or her Account. The restoration shall include the interest which would have been credited had such forfeiture been invested in the Sweep Account from the date forfeited until the date the restoration amount is restored. The amount shall come from the Forfeiture Account to the extent possible, and any additional amount needed shall be contributed by the Employer. The vested interest in his or her restored Account shall then be equal to:

V% times (AB + D) - D

where:

V% = current vested percentage AB = current account balance D = amount previously distributed

9. PARTICIPANT LOANS

Loans to Participants from the Plan are not permitted.

10. In-Service Withdrawals

In-service withdrawals to a Participant who is an Employee are not permitted other than as required by law pursuant to the terms and conditions as set forth in Section 11.

11. DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW

11.1 BENEFIT INFORMATION, NOTICES AND ELECTION. A Participant, or his or her Beneficiary in the case of his or her death, shall be provided with information regarding all optional times and forms of distribution available, to include the notices prescribed by Code section 402(f) and Code section
411(a)(11). Subject to the other requirements of this Section, a Participant, or his or her Beneficiary in the case of his or her death, may elect, in such manner and with such advance notice as prescribed by the Administrator, to have his or her vested Account balance paid to him or her beginning upon any Settlement

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Date following the Participant's termination of employment with all Related Companies or, if earlier, at the time required by law as set forth in Section 11.7.

If a distribution is one to which Code sections 401(a)(11) and 417 do not apply, such distribution may commence less than 30 days after the aforementioned notices are provided, if:

(a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notices to consider the decision as to whether to elect a distribution and if so to elect a particular form of distribution and to elect or not elect a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution; and

(b) the Participant after receiving such notices, affirmatively elects a distribution and a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof.

11.2 SPOUSAL CONSENT. A Participant is required to obtain Spousal Consent in order to receive a distribution under the Plan, except with regard to a distribution made to a Participant without his or her consent.

11.3 PAYMENT FORM AND MEDIUM. Except to the extent otherwise provided by
Section 11.4, a married Participant's benefit shall be paid in the form of an immediate qualified joint and 50% survivor annuity with the Participant's spouse as the joint annuitant and a single Participant's or surviving spouse Beneficiary's benefit shall be paid in the form of a single life annuity. Notwithstanding, except to the extent otherwise provided by Section 11.4 and subject to the requirements of Section 11.12, he or she may instead elect:

(a) a single lump sum, or

(b) a portion paid in a lump sum, and the remainder paid later, or

(c) periodic installments over a period not to exceed the life expectancy of the Participant and his or her Beneficiary, or

(d) a single life annuity or a joint and 50% or 100% survivor annuity.

Any annuity option permitted shall be provided through the purchase of a non-transferable single premium contract from an insurance company which must conform to

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the terms of the Plan and which shall be distributed to the Participant or Beneficiary in complete satisfaction of the benefit due.

Distributions (other than annuity contracts) shall be made in cash, or if a Participant so elects, payment may be made in the form of whole shares of Company Stock and cash in lieu of fractional shares to the extent invested in the Company Stock Fund. With regard to the portion of a distribution representing an Eligible Rollover Distribution, a Distributee may elect a Direct Rollover for all or a portion of such amount.

11.4 DISTRIBUTION OF SMALL AMOUNTS. If after a Participant's employment with all Related Companies ends, the Participant's vested Account balance is $3,500 or less, and if at the time of any prior in-service withdrawal or distribution the Participant's vested Account balance did not exceed $3,500, the Participant's benefit shall be paid as a single lump sum as soon as administratively feasible in accordance with procedures prescribed by the Administrator.

11.5 SOURCE AND TIMING OF DISTRIBUTION FUNDING. A distribution to a Participant shall be made solely from the assets of his or her own Account and shall be based on the Account values as of the Trade Date the distribution is processed. The available assets shall be determined first by Account type and then within each Account used for funding a distribution, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the distribution is processed.

The distribution shall be funded on the Settlement Date following the Trade Date as of which the distribution is processed. The Administrator shall direct the Trustee to make payment as soon thereafter as administratively feasible.

11.6 DEEMED DISTRIBUTION. For purposes of Section 8.3, if at the time a Participant's employment with all Related Companies has terminated, the Participant's vested Account balance attributable to Accounts subject to vesting as described in Section 8, is zero, his or her vested Account balance shall be deemed distributed as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment with all Related Companies has terminated.

11.7 LATEST COMMENCEMENT PERMITTED. In addition to any other Plan requirements and unless a Participant elects otherwise, his or her benefit payments shall begin not later than 60 days after the end of the Plan Year in which he or she attains his or her Normal Retirement Date or retires, whichever is later. However, if the amount of the payment or the location of the Participant (after a reasonable search) cannot be ascertained by that deadline, payment shall be made no later than 60 days after the earliest

18

date on which such amount or location is ascertained but in no event later than as described below. A Participant's failure to elect in such manner as prescribed by the Administrator to have his or her vested Account balance paid to him or her, shall be deemed an election by the Participant to defer his or her distribution.

Benefit payments shall begin by the April 1 immediately following the end of the calendar year in which the Participant attains age 70 1/2, whether or not he or she is an Employee.

If benefit payments cannot begin at the time required because the location of the Participant cannot be ascertained (after a reasonable search), the Administrator may, at any time thereafter, treat such person's Account as forfeited subject to the provisions of Section 15.5.

11.8 PAYMENT WITHIN LIFE EXPECTANCY. The Participant's payment election must be consistent with the requirement of Code section 401(a)(9) that all payments are to be completed within a period not to exceed the lives or the joint and last survivor life expectancy of the Participant and his or her Beneficiary. The life expectancies of a Participant and his or her Beneficiary, if such Beneficiary is his or her spouse, may be recomputed annually.

11.9 INCIDENTAL BENEFIT RULE. The Participant's payment election must be consistent with the requirement that, if the Participant's spouse is not his or her sole primary Beneficiary, the minimum annual distribution for each calendar year, beginning with the year in which he or she attains age 70 1/2, shall not be less than the quotient obtained by dividing (a) the Participant's vested Account balance as of the last Trade Date of the preceding year by (b) the applicable divisor as determined under the incidental benefit requirements of Code section 401(a)(9).

11.10 PAYMENT TO BENEFICIARY. Payment to a Beneficiary must either: (1) be completed by the end of the calendar year that contains the fifth anniversary of the Participant's death or (2) begin by the end of the calendar year that contains the first anniversary of the Participant's death and be completed within the period of the Beneficiary's life or life expectancy, except that:

(a) If the Participant dies after the April 1 immediately following the end of the calendar year in which he or she attains age 70 1/2, payment to his or her Beneficiary must be made at least as rapidly as provided in the Participant's distribution election;

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(b) If the surviving spouse is the Beneficiary, payments need not begin until the end of the calendar year in which the Participant would have attained age 70 1/2 and must be completed within the spouse's life or life expectancy; and

(c) If the Participant and the surviving spouse who is the Beneficiary die (1) before the April 1 immediately following the end of the calendar year in which the Participant would have attained age 70 1/2 and (2) before payments have begun to the spouse, the spouse shall be treated as the Participant in applying these rules.

11.11 BENEFICIARY DESIGNATION. Each Participant may complete a beneficiary designation form indicating the Beneficiary who is to receive the Participant's remaining Plan interest at the time of his or her death. The designation may be changed at any time. However, a Participant's spouse shall be the sole primary Beneficiary unless the designation includes Spousal Consent for another Beneficiary. If no proper designation is in effect at the time of a Participant's death or if the Beneficiary does not survive the Participant, the Beneficiary shall be, in the order listed, the:

(a) Participant's surviving spouse,

(b) Participant's children, in equal shares, (or if a child does not survive the Participant, and that child leaves issue, the issue shall be entitled to that child's share, by right of representation) or

(c) Participant's estate.

11.12 QJSA and QPSA Information and Elections. The following definitions, information and election rules shall apply to any Participant who is eligible for an annuity form of payment:

(a) Annuity Starting Date. The first day of the first period for which an amount is payable as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Participant to such benefit.

(b) QJSA. A qualified joint and survivor annuity, meaning for a married Participant, a form of benefit payment which is the actuarial equivalent of the Participant's vested Account balance at the Annuity Starting Date, payable to the Participant in monthly payments for life and providing that, if the Participant's spouse survives him or her, monthly payments equal to 50% of the amount payable to the Participant during his or her lifetime shall be paid to the spouse for the remainder of such person's lifetime and for a single Participant, a form of benefit payment which is the actuarial equivalent of the Participant's vested Account balance at the Annuity Starting Date, payable to the Participant in monthly payments for life.

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(c) QPSA. A qualified pre-retirement survivor annuity, meaning that upon the death of a Participant before the Annuity Starting Date, the vested portion of the Participant's Account becomes payable to the surviving spouse as a life annuity, unless Spousal Consent has been given to a different Beneficiary or the surviving spouse chooses a different form of payment.

(d) QJSA INFORMATION TO A PARTICIPANT. No less than 30 and no more than 90 days before the Annuity Starting Date, each Participant shall be given a written explanation of (1) the terms and conditions of the QJSA, (2) the right to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, (3) the right to revoke this election and the effect of this revocation, and (4) the need for Spousal Consent.

(e) QJSA ELECTION. A Participant may elect, and such election shall include Spousal Consent if married, at any time within the 90 day period ending on the Annuity Starting Date, to (1) waive the right to receive the QJSA and elect an optional form of payment, or (2) revoke or change any such election.

(f) QPSA Beneficiary Information to a Participant. Upon becoming a Participant, and with updates as needed to insure such information is accurate and readily available to each Participant who is between the ages of 32 and 35, each married Participant shall be given written information stating that (1) his or her death benefit is payable to his or her surviving spouse, (2) he or she may choose that the benefit be paid to a different Beneficiary, (3) he or she has the right to revoke or change a prior designation and the effects of such revocation or change, and (4) the need for Spousal Consent.

(g) QPSA BENEFICIARY DESIGNATION BY PARTICIPANT. A married Participant may designate, with Spousal Consent, a non-spouse Beneficiary at any time after the Participant has been given the information in the QPSA Beneficiary Information to a Participant paragraph above and upon the earlier of
(1) the date the Participant has terminated employment, or (2) the beginning of the Plan Year in which the Participant attains age 35.

(h) QPSA INFORMATION TO A SURVIVING SPOUSE. Each surviving spouse shall be given a written explanation of (1) the terms and conditions of being paid his or her Account balance in the form of a single life annuity, (2) the right to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, and (3) the right to revoke this election and the effect of this revocation.

(i) QPSA ELECTION BY SURVIVING SPOUSE. A surviving spouse may elect, at any time up to the Annuity Starting Date, to (1) waive the right to receive a single

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life annuity and elect an optional form of payment, or (2) revoke or change any such election.

12. MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS

12.1 ANNUAL ADDITION DEFINED. Annual Addition means the sum of all amounts allocated to the Participant's Account for a Plan Year. Amounts include contributions (except for rollovers or transfers from another qualified plan), forfeitures and, if the Participant is a Key Employee (pursuant to Section 13) for the applicable or any prior Plan Year, medical benefits provided pursuant to Code section 419A(d)(1). For purposes of this Section 12.1, Account also includes a Participant's account in all other defined contribution plans currently or previously maintained by any Related Company. The Plan Year refers to the year to which the allocation pertains, regardless of when it was allocated. The Plan Year shall be the Code section 415 limitation year.

12.2 MAXIMUM ANNUAL ADDITION. The Annual Addition to a Participant's accounts under this Plan and any other defined contribution plan maintained by any Related Company for any Plan Year shall not exceed the lesser of (1) 25% of his or her Taxable Income or (2) $30,000 (as adjusted for the cost of living pursuant to Code section 415(d)).

12.3 CORRECTING AN EXCESS ANNUAL ADDITION. Upon the discovery of an excess Annual Addition to a Participant's Account (resulting from forfeitures, allocations, reasonable error in determining Participant compensation or the amount of elective contributions, or other facts and circumstances acceptable to the Internal Revenue Service) the excess amount (adjusted to reflect investment gains) shall be forfeited by the Participant and used as described in Section 8.3.

12.4 CORRECTING A MULTIPLE PLAN EXCESS. If a Participant, whose Account is credited with an excess Annual Addition, received allocations to more than one defined contribution plan, the excess shall be corrected by reducing the Annual Addition to this Plan only after all possible reductions have been made to the other defined contribution plans.

12.5 DEFINED BENEFIT FRACTION DEFINED. The fraction, for any Plan Year, where the numerator is the "projected annual benefit," as defined below, and the denominator is the greater of 125% of the "protected current accrued benefit," as defined below, or the normal limit which is the lesser of (1) 125% of the maximum dollar limitation provided under Code section 415(b)(1)(A) for the Plan Year or (2) 140% of the amount which may be taken into account under Code section 415(b)(1)(B) for the Plan Year, where a Participant's:

22

(a) projected annual benefit is the annual benefit provided by the Plan determined pursuant to Code section 415(e)(2)(A), and

(b) protected current accrued benefit in a defined-benefit plan in existence (1) on July 1, 1982, shall be the accrued annual benefit provided for under Public Law 97-248, section 235(g)(4), as amended, or (2) on May 6, 1986, shall be the accrued annual benefit provided for under Public Law 99-514, section 1106(i)(3).

12.6 DEFINED CONTRIBUTION FRACTION DEFINED. The fraction where the numerator is the sum of the Participant's Annual Addition for each Plan Year to date and the denominator is the sum of the "annual amounts" for each year in which the Participant has performed service with a Related Company. The "annual amount" for any Plan Year is the lesser of (1) 125% of the Code section 415(c)(1)(A) dollar limitation (determined without regard to subsection (c)(6)) in effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B) amount in effect for the Plan Year, where:

(a) each Annual Addition is determined pursuant to the Code section 415(c) rules in effect for such Plan Year, and

(b) the numerator is adjusted pursuant to Public Law 97-248, section
235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).

12.7 COMBINED PLAN LIMITS AND CORRECTION. If a Participant has also participated in a defined benefit plan maintained by a Related Company, the sum of the Defined Benefit Fraction and the Defined Contribution Fraction for any Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan Year, the Participant's benefit under any defined benefit plan (to the extent it has not been distributed or used to purchase an annuity contract) shall be limited so that the combined fraction does not exceed 1.0 before any defined contribution limits shall be enforced.

13. TOP HEAVY RULES

13.1 TOP HEAVY DEFINITIONS. When capitalized, the following words and phrases have the following meanings when used in this Section:

(a) AGGREGATION GROUP. The Aggregation Group is the group consisting of each qualified plan of an Employer (and its Related Companies) (1) in which a Key Employee is a participant or was a participant during the determination period (regardless of whether such plan has terminated), or (2) which enables another plan in the group to meet the requirements of Code sections 401(a)(4) or
410(b). The Employer may also treat any other qualified plan as part of the group if the group would continue to meet the requirements of Code sections 401(a)(4) and 410(b) with such plan being taken into account.

23

(b) DETERMINATION DATE. The Determination Date is last Trade Date of the preceding Plan Year or, in the case of the Plan's first year, the last Trade Date of the first Plan Year.

(c) KEY EMPLOYEE. A Key Employee is a current or former Employee (or his or her Beneficiary) who at any time during the five year period ending on the Determination Date was:

(i) an officer of a Related Company whose Compensation (i) exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and (ii) places him within the following highest paid group of officers:

Number of Employees               Number of
Not Excluded Under Code           Highest Paid
Section 414(q)(8)                 fficers Included

Less than 30                              3
30 to 500                         10% of the number of
                                  Employees not excluded
                                  under Code section
                                  414(q)(8)
More than 500                      50

(ii) a more than 5% Owner,

(iii) a more than 1% Owner whose Compensation exceeds $150,000, or

(iv) a more than 0.5% Owner who is among the 10 Employees owning the largest interest in a Related Company and whose Compensation exceeds the amount in effect under Code section 415(c)(1)(A).

(d) PLAN BENEFIT. Plan Benefit is the sum as of the Determination Date of (1) an Employee's Account, (2) the present value of his or her other accrued benefits provided by all qualified plans within the Aggregation Group, and (3) the aggregate distributions made within the five year period ending on such date. Plan Benefits shall exclude rollover contributions and plan to plan transfers made after December 31, 1983 which are both employee initiated and from a plan maintained by a non-related employer.

(e) TOP HEAVY. The Plan is Top Heavy if the Plan Benefits of Key Employees account for more than 60% of the Plan Benefits of all Employees who have

24

performed services at any time during the five year period ending on the Determination Date. The Plan Benefits of Employees who were, but are no longer, Key Employees (because they have not been an officer or Owner during the five year period), are excluded in the determination.

13.2 SPECIAL CONTRIBUTIONS.

(a) Minimum Contribution Requirement. For each Plan Year in which the Plan is Top Heavy, the Employer shall not allow any contributions (other than a rollover contribution from a plan maintained by a non-related employer, if otherwise permitted under the Plan) to be made by or on behalf of any Key Employee unless the Employer makes a contribution on behalf of all Participants who were Eligible Employees as of the last day of the Plan Year in an amount equal to at least 3% of each such Participant's Taxable Income. The Administrator shall remove any such contributions (including applicable investment gain or loss) credited to a Key Employee's Account in violation of the foregoing rule and return them to the Employer or Employee to the extent permitted by the Limited Return of Contributions paragraph of Section 15.

(b) Overriding Minimum Benefit. Notwithstanding, contributions shall be permitted on behalf of Key Employees if the Employer also maintains a defined benefit plan which automatically provides a benefit which satisfies the Code section 416(c)(1) minimum benefit requirements, including the adjustment provided in Code section 416(h)(2)(A), if applicable. If this Plan is part of an aggregation group in which a Key Employee is receiving a benefit and no minimum is provided in any other plan, a minimum contribution of at least 3% of Taxable Income shall be provided to the Participants specified in the preceding paragraph. In addition, the Employer may offset a defined benefit minimum by contributions made to this Plan.

13.3 ADJUSTMENT TO COMBINED LIMITS FOR DIFFERENT PLANS. For each Plan Year in which the Plan is Top Heavy, 100% shall be substituted for 125% in determining the Defined Benefit Fraction and the Defined Contribution Fraction.

14. Plan Administration

14.1 PLAN DELINEATES AUTHORITY AND RESPONSIBILITY. Plan fiduciaries include the Company, the Administrator, the Committee and/or the Trustee, as applicable, whose specific duties are delineated in this Plan and in the Trust. In addition, Plan fiduciaries also include any other person to whom fiduciary duties or responsibility is delegated with respect to the Plan. Any person or group may serve in more than one fiduciary capacity with respect to the Plan. To the extent permitted under ERISA section 405, no fiduciary shall be liable for a breach by another fiduciary.

14.2 FIDUCIARY STANDARDS. Each fiduciary shall:

25

(a) discharge his or her duties in accordance with this Plan to the extent they are consistent with ERISA;

(b) use that degree of care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;

(c) act with the exclusive purpose of providing benefits to Participants and their Beneficiaries, and defraying reasonable expenses of administering the Plan;

(d) diversify Plan investments, to the extent such fiduciary is responsible for directing the investment of Plan assets, so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and

(e) treat similarly situated Participants and Beneficiaries in a uniform and nondiscriminatory manner.

14.3 COMPANY IS ERISA PLAN ADMINISTRATOR. The Company is the plan administrator, within the meaning of ERISA section 3(16), which is responsible for compliance with all reporting and disclosure requirements, except those that are explicitly the responsibility of the Trustee under applicable law. The Administrator and/or Committee shall have any necessary authority to carry out such functions through the actions of the Administrator, duly appointed officers of the Company, and/or the Committee.

14.4 ADMINISTRATOR DUTIES. The Administrator shall have the discretionary authority to construe this Plan and to do all things necessary or convenient to effect the intent and purposes thereof, whether or not such powers are specifically set forth in this Plan. Actions taken in good faith by the Administrator shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. In addition to the duties listed elsewhere in this Plan, the Administrator's authority shall include, but not be limited to, the discretionary authority to:

(a) determine who is eligible to participate, the allocation of Contributions and the eligibility for distributions;

(b) provide each Participant with a summary plan description no later than 90 days after he or she has become a Participant (or such other period permitted under ERISA section 104(b)(1)), as well as informing each Participant of any material modification to the Plan in a timely manner;

(c) make a copy of the following documents available to Participants during normal work hours: this Plan, (including subsequent amendments), the Trust, all

26

annual and interim reports of the Trustee related to the entire Plan, the latest annual report and the summary plan description;

(d) determine the fact of a Participant's death and of any Beneficiary's right to receive the deceased Participant's interest based upon such proof and evidence as it deems necessary;

(e) establish and review at least annually a funding policy bearing in mind both the short-run and long-run needs and goals of the Plan and to the extent Participants may direct their own investments, the funding policy shall focus on which Investment Funds are available for Participants to use; and

(f) adjudicate claims pursuant to the claims procedure described in
Section 15.

14.5 ADVISORS MAY BE RETAINED. The Administrator may retain such agents and advisors (including attorneys, accountants, actuaries, consultants, record keepers, investment counsel and administrative assistants) as it considers necessary to assist it in the performance of its duties. The Administrator shall also comply with the bonding requirements of ERISA section 412.

14.6 DELEGATION OF ADMINISTRATOR DUTIES. The Company, as Administrator of the Plan, has appointed a Committee to administer the Plan on its behalf. Any Committee member appointed by the Company shall serve at the pleasure of the Company, but may resign by written notice to the Company. Committee members shall serve without compensation from the Plan for such services. Except to the extent that the Company otherwise provides, any delegation of duties to a Committee shall carry with it the full discretionary authority of the Administrator to complete such duties.

14.7 COMMITTEE OPERATING RULES.

(a) ACTIONS OF MAJORITY. Any act delegated by the Company to the Committee may be done by a majority of its members. The majority may be expressed by a vote at a meeting or in writing without a meeting, and a majority action shall be equivalent to an action of all Committee members.

(b) MEETINGS. The Committee shall hold meetings upon such notice, place and times as it determines necessary to conduct its functions properly.

15. RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION

15.1 PLAN DOES NOT AFFECT EMPLOYMENT RIGHTS. The Plan does not provide any employment rights to any Employee. The Employer expressly reserves the right to

27

discharge an Employee at any time, with or without cause, without regard to the effect such discharge would have upon the Employee's interest in the Plan.

15.2 LIMITED RETURN OF CONTRIBUTIONS. Except as provided in this paragraph, (1) Plan assets shall not revert to the Employer nor be diverted for any purpose other than the exclusive benefit of Participants or their Beneficiaries; and (2) a Participant's vested interest shall not be subject to divestment. As provided in ERISA section 403(c)(2), the actual amount of a Contribution made by the Employer (or the current value of the Contribution if a net loss has occurred) may revert to the Employer if:

(a) such Contribution is made by reason of a mistake of fact;

(b) initial qualification of the Plan under Code section 401(a) is not received and a request for such qualification is made within the time prescribed under Code section 401(b) (the existence of and Contributions under the Plan are hereby conditioned upon such qualification); or

(c) such Contribution is not deductible under Code section 404 (such Contributions are hereby conditioned upon such deductibility) in the taxable year of the Employer for which the Contribution is made.

The reversion to the Employer must be made (if at all) within one year of the mistaken payment of the Contribution, the date of denial of qualification, or the date of disallowance of deduction, as the case may be. A Participant shall have no rights under the Plan with respect to any such reversion.

15.3 ASSIGNMENT AND ALIENATION. As provided by Code section 401(a)(13) and to the extent not otherwise required by law, no benefit provided by the Plan may be anticipated, assigned or alienated, except to create, assign or recognize a right to any benefit with respect to a Participant pursuant to a QDRO.

15.4 FACILITY OF PAYMENT. If a Plan benefit is due to be paid to a minor or if the Administrator reasonably believes that any payee is legally incapable of giving a valid receipt and discharge for any payment due him or her, the Administrator shall have the payment of the benefit, or any part thereof, made to the person (or persons or institution) whom it reasonably believes is caring for or supporting the payee, unless it has received due notice of claim therefor from a duly appointed guardian or conservator of the payee. Any payment shall to the extent thereof, be a complete discharge of any liability under the Plan to the payee.

15.5 REALLOCATION OF LOST PARTICIPANT'S ACCOUNTS. If the Administrator cannot locate a person entitled to payment of a Plan benefit after a reasonable search, the Administrator may at any time thereafter treat such person's Account as forfeited and use

28

such amount as described in Section 8.3. If such person subsequently presents the Administrator with a valid claim for the benefit, such person shall be paid the amount treated as forfeited, plus the interest that would have been earned in the Sweep Account to the date of determination. The Administrator shall pay the amount through an additional amount contributed by the Employer or direct the Trustee to pay the amount from the Forfeiture Account.

15.6 CLAIMS PROCEDURE.

(a) RIGHT TO MAKE CLAIM. An interested party who disagrees with the Administrator's determination of his or her right to Plan benefits must submit a written claim and exhaust this claim procedure before legal recourse of any type is sought. The claim must include the important issues the interested party believes support the claim. The Administrator, pursuant to the authority provided in this Plan, shall either approve or deny the claim.

(b) PROCESS FOR DENYING A CLAIM. The Administrator's partial or complete denial of an initial claim must include an understandable, written response covering (1) the specific reasons why the claim is being denied (with reference to the pertinent Plan provisions) and (2) the steps necessary to perfect the claim and obtain a final review.

(c) APPEAL OF DENIAL AND FINAL REVIEW. The interested party may make a written appeal of the Administrator's initial decision, and the Administrator shall respond in the same manner and form as prescribed for denying a claim initially.

(d) TIME FRAME. The initial claim, its review, appeal and final review shall be made in a timely fashion, subject to the following timetable:

                                            Days to Respond
          Action                            from Last Action

Administrator determines benefit            NA
Interested party files initial request      60 days
Administrator's initial decision            90 days
Interested party requests final review      60 days
Administrator's final decision              60 days

However, the Administrator may take up to twice the maximum response time for its initial and final review if it provides an explanation within the normal period of why an extension is needed and when its decision shall be forthcoming.

29

15.7 CONSTRUCTION. Headings are included for reading convenience. The text shall control if any ambiguity or inconsistency exists between the headings and the text. The singular and plural shall be interchanged wherever appropriate. References to Participant shall include Beneficiary when appropriate and even if not otherwise already expressly stated.

15.8 JURISDICTION AND SEVERABILITY. The Plan shall be construed, regulated and administered under ERISA and other applicable federal laws and, where not otherwise preempted, by the laws of the State of California. If any provision of this Plan shall become invalid or unenforceable, that fact shall not affect the validity or enforceability of any other provision of this Plan. All provisions of this Plan shall be so construed as to render them valid and enforceable in accordance with their intent.

16. AMENDMENT, MERGER, DIVESTITURES AND TERMINATION

16.1 AMENDMENT. The Company reserves the right to amend this Plan at any time, to any extent and in any manner it may deem necessary or appropriate. The Company shall be responsible for adopting any amendments necessary to maintain the qualified status of this Plan under Code sections 401(a) and 501(a). If the Committee is acting as the Administrator in accordance with Section 14.6, it shall have the authority to adopt Plan amendments which have no substantial adverse financial impact upon any Employer or the Plan. All interested parties shall be bound by any amendment, provided that no amendment shall:

(a) become effective unless it has been adopted in accordance with the procedures set forth in Section 16.5;

(b) except to the extent permissible under ERISA and the Code, make it possible for any portion of the Plan assets to revert to an Employer or to be used for, or diverted to, any purpose other than for the exclusive benefit of Participants and Beneficiaries entitled to Plan benefits and to defray reasonable expenses of administering the Plan; nor

(c) decrease the rights of any Employee to benefits accrued (including the elimination of optional forms of benefits) to the date on which the amendment is adopted, or if later, the date upon which the amendment becomes effective, except to the extent permitted under ERISA and the Code.

16.2 MERGER. This Plan may not be merged or consolidated with, nor may its assets or liabilities be transferred to, another plan unless each Participant and Beneficiary would, if the resulting plan were then terminated, receive a benefit just after the merger,

30

consolidation or transfer which is at least equal to the benefit which would be received if either plan had terminated just before such event.

16.3 DIVESTITURES. In the event of a sale by an Employer which is a corporation of: (1) substantially all of the Employer's assets used in a trade or business to an unrelated corporation, or (2) a sale of such Employer's interest in a subsidiary to an unrelated entity or individual, lump sum distributions shall be permitted from the Plan, except as provided below, to Participants with respect to Employees who continue employment with the corporation acquiring such assets or who continue employment with such subsidiary, as applicable.

Notwithstanding, distributions shall not be permitted if the purchaser agrees, in connection with the sale, to be substituted as the Company as the sponsor of the Plan or to accept a transfer of the assets and liabilities representing the Participants' benefits into a plan of the purchaser or a plan to be established by the purchaser.

16.4 PLAN TERMINATION. The Company may, at any time and for any reason, terminate the Plan in accordance with the procedures set forth in Section 16.5, or completely discontinue contributions. Upon either of these events, or in the event of a partial termination of the Plan within the meaning of Code section
411(d)(3), the Accounts of each affected Employee who has not yet incurred a Break in Service shall be fully vested. Lump sum distributions shall be made in accordance with the terms of the Plan as in effect at the time of the Plan's termination or as thereafter amended provided that a post-termination amendment shall not be effective to the extent that it violates Section 16.1 unless it is required in order to maintain the qualified status of the Plan upon its termination. The Employer's authority shall continue beyond the Plan's termination date until all Trust assets have been liquidated and distributed.

16.5 AMENDMENT AND TERMINATION PROCEDURES. The following procedural requirements shall govern the adoption of any amendment or termination (a "Change") of this Plan:

(a) The Company may adopt any Change by action of its board of directors in accordance with its normal procedures.

(b) The Committee, if acting as Administrator in accordance with
Section 14.6, may adopt any amendment within the scope of its authority provided under Section 16.1 and in the manner specified in Section 14.7(a).

(c) Any Change must be (1) set forth in writing, and (2) signed and dated by an authorized officer of the Company or, in the case of an amendment adopted by the Committee, at least one of its members.

31

(d) If the effective date of any Change is not specified in the document setting forth the Change, it shall be effective as of the date it is signed by the last person whose signature is required under clause (2) above, except to the extent that another effective date is necessary to maintain the qualified status of this Plan under Code sections 401(a) and 501(a).

16.6 TERMINATION OF EMPLOYER'S PARTICIPATION. Any Employer may, at any time and for any reason, terminate its Plan participation by action of its board of directors in accordance with its normal procedures. Written notice of such action shall be signed and dated by an authorized officer of the Employer and delivered to the Company. If the effective date of such action is not specified, it shall be effective on, or as soon as reasonably practicable after, the date of delivery. Upon the Employer's request, the Company may instruct the Trustee and Administrator to spin off all affected Accounts and underlying assets into a separate qualified plan under which the Employer shall assume the powers and duties of the Company. Alternatively, the Company may treat the event as a partial termination described above or continue to maintain the Accounts under the Plan.

APPENDIX A

INVESTMENT FUNDS

I. Investment Funds Available to Senior Participants

The Investment Funds offered under the Plan to Senior Participants as of the Effective Date include this set of daily valued funds:

Category           Funds

Income             U.S. Treasury Allocation

Equity             Company Stock
                   S&P 500 Stock
                   Aim Constellation

Combination LifePath

32

APPENDIX B

PAYMENT OF PLAN FEES AND EXPENSES

As of the Effective Date, payment of Plan fees and expenses shall be as follows:

(1) Investment Management Fees: These are paid by Participants in that management fees reduce the investment return reported and credited to Participants, except that the Employer shall pay the fees related to the Company Stock Fund. These are paid by the Employer on a quarterly basis.

Recordkeeping Fees: These are paid by the Employer on a quarterly basis, except that with regard to a Participant who is no longer an Employee or a Beneficiary, these are paid by the Participant and are assessed monthly and billed/collected from Accountsquarterly.

Investment Fund Election Changes: For each Investment Fund election change by Senior Participant, in excess of 4 changes per year, a $10 fee shall be assessed and billed/collected quarterly from the Senior Participant's Account.

Periodic Installment Payment Fees: A $3.00 per check fee shall be assessed and billed/collected quarterly from the Participant's Account.

Additional Fees Paid by Employer: All other Plan related fees and expenses shall be paid by the Employer. To the extent that the Administrator later elects that any such fees shall be borne by Participants, estimates of the fees shall be determined and reconciled, at least annually, and the fees shall be assessed monthly and billed/collected from Accounts quarterly.

33

EXHIBIT 10.30

Silicon Valley Bank
Money Purchase Pension
Plan and Trust Agreement

As Amended and Restated
Effective January 1, 1996


Silicon Valley Bank Money Purchase Pension Plan and Trust

As Amended and Restated Effective January 1, 1996

Silicon Valley Bank previously established the Silicon Valley Bank Money Purchase Pension Plan effective January 1, 1995, for the benefit of eligible employees of the Company and its participating affiliates.The Plan is intended to constitute a qualified money purchase pension plan, as described in Code section 401(a).

The provisions of this Plan and Trust relating to the Trustee constitute the trust agreement which is entered into by and between Silicon Valley Bank and BZW Barclays Global Investors, National Association. The Trust is intended to be tax exempt as described under Code section 501(a).

The Silicon Valley Bank Money Purchase Pension Plan and Trust, as set forth in this document, is hereby amended and restated effective as of January 1, 1996.

Date:  May 28, 1996                  Silicon Valley Bank

                                     By: /s/ Glen G. Simmons
                                        --------------------------------------
                                        Title: Executive V.P. Human Resources/
                                               Administration

The trust agreement set forth in those provisions of this Plan and Trust which relate to the Trustee is hereby executed.

Date: May 30, 1996                   BZW Barclays Global Investors, National
                                     Association

                                     By: /s/ Dolores Upton
                                        --------------------------------------
                                        Title: Principal

Date: May 30, 1996                   BZW Barclays Global Investors, National
                                     Association

                                     By: /s/ Lisa M. Maloney
                                        --------------------------------------
                                        Title: Principal


TABLE OF CONTENTS

 1   DEFINITIONS............................................................   1
     -----------

 2   ELIGIBILITY............................................................   8
     -----------
      2.1   Eligibility.....................................................   8
      2.2   Ineligible Employees............................................   8
      2.3   Ineligible or Former Participants...............................   8

 3   PARTICIPANT CONTRIBUTIONS..............................................   9
     -------------------------

 4   TRANSFERS FROM AND TO OTHER QUALIFIED PLANS............................  10
     -------------------------------------------
      4.1   Transfers From and To Other Qualified Plans.....................  10

 5   EMPLOYER CONTRIBUTIONS.................................................  11
     ----------------------
      5.1   Money Purchase Pension Contributions............................  11

 6   ACCOUNTING.............................................................  12
     ----------
      6.1   Individual Participant Accounting...............................  12
      6.2   Sweep Account is Transaction Account............................  12
      6.3   Trade Date Accounting and Investment Cycle......................  12
      6.4   Accounting for Investment Funds.................................  12
      6.5   Payment of Fees and Expenses....................................  12
      6.6   Error Correction................................................  13
      6.7   Participant Statements..........................................  14
      6.8   Special Accounting During Conversion Period.....................  14
      6.9   Accounts for QDRO Beneficiaries.................................  14

 7   INVESTMENT AUTHORITY AND INVESTMENT FUNDS..............................  15
     -----------------------------------------
      7.1   General Investment Authority....................................  15
      7.2   Special Investment Authority Provisions Related to Senior
            Participants....................................................  15

 8   VESTING & FORFEITURES..................................................  16
     ---------------------
      8.1   Full Vesting Upon Certain Events................................  16
      8.2   Vesting Schedule................................................  16
      8.3   Forfeitures.....................................................  16
      8.4   Rehired Employees...............................................  16

 9   PARTICIPANT LOANS......................................................  18
     -----------------

10   IN-SERVICE WITHDRAWALS.................................................  19
     ----------------------

11   DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW...............  20
     --------------------------------------------------------
     11.1   Benefit Information, Notices and Election.......................  20
     11.2   Spousal Consent.................................................  20

i

     11.3   Payment Form and Medium.........................................  20
     11.4   Distribution of Small Amounts...................................  21
     11.5   Source and Timing of Distribution Funding.......................  21
     11.6   Deemed Distribution.............................................  22
     11.7   Latest Commencement Permitted...................................  22
     11.8   Payment Within Life Expectancy..................................  22
     11.9   Incidental Benefit Rule.........................................  23
     11.10  Payment to Beneficiary..........................................  23
     11.11  Beneficiary Designation.........................................  23
     11.12  QJSA and QPSA Information and Elections.........................  24

12   MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS...........................  26
     --------------------------------------------
     12.1   "Annual Addition" Defined.......................................  26
     12.2   Maximum Annual Addition.........................................  26
     12.3   Correcting an Excess Annual Addition............................  26
     12.4   Correcting a Multiple Plan Excess...............................  26
     12.5   "Defined Benefit Fraction" Defined..............................  26
     12.6   "Defined Contribution Fraction" Defined.........................  27
     12.7   Combined Plan Limits and Correction.............................  27

13   TOP HEAVY RULES........................................................  28
     ---------------
     13.1   Top Heavy Definitions...........................................  28
     13.2   Special Contributions...........................................  29
     13.3   Adjustment to Combined Limits for Different Plans...............  30

14   PLAN ADMINISTRATION....................................................  31
     -------------------
     14.1   Plan Delineates Authority and Responsibility....................  31
     14.2   Fiduciary Standards.............................................  31
     14.3   Company is ERISA Plan Administrator.............................  31
     14.4   Administrator Duties............................................  32
     14.5   Advisors May be Retained........................................  32
     14.6   Delegation of Administrator Duties..............................  33
     14.7   Committee Operating Rules.......................................  33

15   MANAGEMENT OF INVESTMENTS..............................................  34
     -------------------------
     15.1   Trust Agreement.................................................  34
     15.2   Investment Funds................................................  34
     15.3   Authority to Hold Cash..........................................  35
     15.4   Trustee to Act Upon Instructions................................  35
     15.5   Administrator Has Right to Vote Registered Investment Company
            Shares..........................................................  35
     15.6   Custom Fund Investment Management...............................  35
     15.7   Master Custom Fund..............................................  36
     15.8   Authority to Segregate Assets...................................  36
     15.9   Maximum Permitted Investment in Company Stock...................  36
     15.10  Participants Have Right to Vote and Tender Company Stock........  37
     15.11  Registration and Disclosure for Company Stock...................  37

ii

16   TRUST ADMINISTRATION...................................................  38
     --------------------
     16.1   Trustee to Construe Trust.......................................  38
     16.2   Trustee To Act As Owner of Trust Assets.........................  38
     16.3   United States Indicia of Ownership..............................  38
     16.4   Tax Withholding and Payment.....................................  39
     16.5   Trust Accounting................................................  39
     16.6   Valuation of Certain Assets.....................................  39
     16.7   Legal Counsel...................................................  40
     16.8   Fees and Expenses...............................................  40
     16.9   Trustee Duties and Limitations..................................  40

17   RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION......................  41
     -------------------------------------------------
     17.1   Plan Does Not Affect Employment Rights..........................  41
     17.2   Limited Return of Contributions.................................  41
     17.3   Assignment and Alienation.......................................  41
     17.4   Facility of Payment.............................................  41
     17.5   Reallocation of Lost Participant's Accounts.....................  42
     17.6   Claims Procedure................................................  42
     17.7   Construction....................................................  43
     17.8   Jurisdiction and Severability...................................  43
     17.9   Indemnification by Employer.....................................  43

18   AMENDMENT, MERGER, DIVESTITURES AND TERMINATION........................  44
     -----------------------------------------------
     18.1   Amendment.......................................................  44
     18.2   Merger..........................................................  44
     18.3   Divestitures....................................................  44
     18.4   Plan Termination................................................  45
     18.5   Amendment and Termination Procedures............................  45
     18.6   Termination of Employer's Participation.........................  46
     18.7   Replacement of the Trustee......................................  46
     18.8   Final Settlement and Accounting of Trustee......................  46

APPENDIX A - INVESTMENT FUNDS...............................................  47

APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES..............................  48

iii

1 DEFINITIONS

When capitalized, the words and phrases below have the following meanings unless different meanings are clearly required by the context:

1.1 "Account". The records maintained for purposes of accounting for a Participant's interest in the Plan. "Account" refers to the following account which has been created on behalf of a Participant to hold Contributions under the Plan:

(a) "Money Purchase Pension Account". An account created to hold Money Purchase Pension Contributions.

1.2 "Administrator". The Company, which may delegate all or a portion of the duties of the Administrator under the Plan to a Committee in accordance with Section 14.6.

1.3 "Beneficiary". The person or persons who is to receive benefits after the death of the Participant pursuant to the "Beneficiary Designation" paragraph in Section 11, or as a result of a QDRO.

1.4 "Break in Service". The fifth anniversary (or sixth anniversary if absence from employment was due to a Parental Leave) of the date on which a Participant's employment ends.

1.5 "Code". The Internal Revenue Code of 1986, as amended. Reference to any specific Code section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

1.6 "Committee". If applicable, the committee which has been appointed by the Company to administer the Plan in accordance with Section 14.6.

1.7 "Company". Silicon Valley Bank or any successor by merger, purchase or otherwise.

1.8 "Company Stock". Shares of common stock of Silicon Valley Bancshares, the parent company of the Company, its predecessor(s), or its successors or assigns, or any corporation with or into which said corporation may be merged, consolidated or reorganized, or to which a majority of its assets may be sold.

1.9 "Compensation". The sum of a Participant's Taxable Income and salary reductions, if any, pursuant to Code sections 125,
402(e)(3), 402(h), 403(b), 414(h)(2) or 457 for the Plan Year.

For purposes of determining benefits under this Plan, Compensation is limited to $150,000, (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year.

For purposes of the preceding sentence,

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in the case of an HCE who is a 5% Owner or one of the 10 most highly compensated Employees, (i) such HCE and such HCE's family group (as defined below) shall be treated as a single employee and the Compensation of each family group member shall be aggregated with the Compensation of such HCE, and (ii) the limitation on Compensation shall be allocated among such HCE and his or her family group members in proportion to each individual's Compensation before the application of this sentence. For purposes of this Section, the term "family group" shall mean an Employee's spouse and lineal descendants who have not attained age 19 before the close of the year in question.

1.10 "Contribution". An amount contributed to the Plan by the Employer and allocated by contribution type to Participants' Accounts, as described in Section 1.1. Contributions to the Plan consist of:

(a) "Money Purchase Pension Contribution". An amount contributed by the Employer on an eligible Participant's behalf and allocated on a pay based formula.

1.11 "Conversion Period". The period of converting the prior accounting system of any plan and trust which is merged into this Plan and Trust subsequent to the Effective Date, to the accounting system described in Section 6.

1.12 "Direct Rollover". An Eligible Rollover Distribution that is paid directly to an Eligible Retirement Plan for the benefit of a Distributee.

1.13 "Disability". A Participant's mental or physical disability resulting in termination of employment as evidenced by presentation of medical evidence satisfactory to the Administrator.

1.14 "Distributee". An Employee or former Employee, the surviving spouse of an Employee or former Employee and a spouse or former spouse of an Employee or former Employee determined to be an alternate payee under a QDRO.

1.15 "Early Retirement Date". The date of a Participant's 55th birthday and completion of 10 Years of Vesting Service.

1.16 "Effective Date". The date upon which the provisions of this document become effective. This date is January 1, 1996, unless stated otherwise. In general, the provisions of this document only apply to Participants who are Employees on or after the Effective Date. However, investment and distribution provisions apply to all Participants with Account balances to be invested or distributed after the Effective Date.

1.17 "Eligible Employee". An Employee of an Employer, except any Employee:

(a) whose compensation and conditions of employment are covered by a collective bargaining agreement to which an Employer is a party unless the agreement calls for the Employee's participation in the Plan;

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(b) who is treated as an Employee because he or she is a Leased Employee; or

(c) who is a nonresident alien who (i) either receives no earned income (within the meaning of Code section 911(d)(2)), from sources within the United States under Code section 861(a)(3); or (ii) receives such earned income from such sources within the United States but such income is exempt from United States income tax under an applicable income tax convention.

1.18 "Eligible Retirement Plan". An individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section
401(a), that accepts a Distributee's Eligible Rollover Distribution, except that with regard to an Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity.

1.19 "Eligible Rollover Distribution". A distribution of all or any portion of the balance to the credit of a Distributee, excluding a distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of a Distributee or the joint lives (or joint life expectancies) of a Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; a distribution to the extent such distribution is required under Code section 401(a)(9); and the portion of a distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities).

1.20 "Employee". An individual who is:

(a) directly employed by any Related Company and for whom any income for such employment is subject to withholding of income or social security taxes, or

(b) a Leased Employee.

1.21 "Employer". The Company and any Related Company which adopts this Plan with the approval of the Company.

1.22 "ERISA". The Employee Retirement Income Security Act of 1974, as amended. Reference to any specific ERISA section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

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1.23 "Forfeiture Account". An account holding amounts forfeited by Participants who have terminated employment with all Related Companies, invested in interest bearing deposits of the Trustee, pending disposition as provided in this Plan and Trust and as directed by the Administrator.

1.24 "HCE" or "Highly Compensated Employee". With respect to each Employer and its Related Companies, an Employee during the Plan Year or "lookback year" who (in accordance with Code section 414(q)):

(a) was a more than 5% Owner at any time during the "lookback year" or Plan Year;

(b) received Compensation during the "lookback year" (or in the Plan Year if among the 100 Employees with the highest Compensation for such Year) in excess of (i) $75,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and
415(d)), or (ii) $50,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)) in the case of a member of the "top-paid group" (within the meaning of Code section
414(q)(4)) for such Year, provided, however, that if the conditions of Code section 414(q)(12)(B)(ii) are met, the Company may elect for any Plan Year to apply clause (i) by substituting $50,000 for $75,000 and not to apply clause (ii); or

(c) was an officer of a Related Company and received Compensation during the "lookback year" (or in the Plan Year if among the 100 Employees with the highest Compensation for such Year) that is greater than 50% of the dollar limitation in effect under Code section 415(b)(1)(A) and (d) for such Year (or if no officer has Compensation in excess of the threshold, the officer with the highest Compensation), provided that the number of officers shall be limited to 50 Employees (or, if less, the greater of three Employees or 10% of the Employees).

A former Employee shall be treated as an HCE if (1) such former Employee was an HCE when he separated from service, or (2) such former Employee was an HCE in service at any time after attaining age 55.

The determination of who is an HCE, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees and the number of Employees treated as officers shall be made in accordance with Code section 414(q).

Pursuant to Code section 414(q), the Company elects as the "lookback year" the 12 months ending immediately prior to the start of the Plan Year.

1.25 "Ineligible". The Plan status of an individual during the period in which he or she is (1) an Employee of a Related Company which is not then an Employer, (2) an Employee, but not an Eligible Employee, or (3) not an Employee.

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1.26 "Investment Fund" or "Fund". An investment fund as described in
Section 15.2.

1.27 "Leased Employee". An individual who is deemed to be an employee of any Related Company as provided in Code section 414(n) or (o).

1.28 "Leave of Absence". A period during which an individual is deemed to be an Employee, but is absent from active employment, provided that the absence:

(a) was authorized by a Related Company; or

(b) was due to military service in the United States armed forces and the individual returns to active employment within the period during which he or she retains employment rights under federal law.

1.29 "Normal Retirement Date". The date of a Participant's 62nd birthday.

1.30 "Owner". A person with an ownership interest in the capital, profits, outstanding stock or voting power of a Related Company within the meaning of Code section 318 or 416 (which exclude indirect ownership through a qualified plan).

1.31 "Parental Leave". The period of absence from work by reason of pregnancy, the birth of an Employee's child, the placement of a child with the Employee in connection with the child's adoption, or caring for such child immediately after birth or placement as described in Code section 410(a)(5)(E).

1.32 "Participant". The Plan status of an Eligible Employee after he or she completes the eligibility requirements as described in Section
2.1. A Participant's participation continues until his or her employment with all Related Companies ends and his or her Account is distributed or forfeited.

1.33 "Pay". All cash compensation, excluding incentive pay (annual incentive awards, referral fees and other recognition/achievement awards), paid to an Eligible Employee by an Employer while a Participant during the current period. Pay excludes reimbursements or other expense allowances, cash and non-cash fringe benefits, moving expenses, deferred compensation and welfare benefits.

Pay shall be determined further by excluding amounts contributed by an Employer pursuant to Code sections 125 and 402(e)(3). Pay is limited to $150,000 (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year.

For purposes of the Contributions described in Section 5.1, the limitations as described in the second paragraph of Section 1.9 shall also apply.

1.34 "Period of Employment". The period beginning on the date an Employee first performs an hour of service and ending on the date his or her employment ends. Employment ends on the date the Employee quits, retires, is discharged,

5

dies or (if earlier) the first anniversary of his or her absence for any other reason. The period of absence starting with the date an Employee's employment temporarily ends and ending on the date he or she is subsequently reemployed is (1) included in his or her Period of Employment if the period of absence does not exceed one year, and (2) excluded if such period exceeds one year.

Period of Employment includes the period prior to a Break in Service.

An Employee's service with a predecessor or acquired company shall only be counted in the determination of his or her Period of Employment for eligibility and/or vesting purposes if (1) the Company directs that credit for such service be granted, or (2) a qualified plan of the predecessor or acquired company is subsequently maintained by any Employer or Related Company.

1.35 "Plan". The Silicon Valley Bank Money Purchase Pension Plan set forth in this document, as from time to time amended.

1.36 "Plan Year". The annual accounting period of the Plan and Trust which ends on each December 31.

1.37 "QDRO". A domestic relations order which the Administrator has determined to be a qualified domestic relations order within the meaning of Code section 414(p).

1.38 "Reduction in Force". An Employer sponsored program developed to reduce force on a permanent basis.

1.39 "Related Company". With respect to any Employer, that Employer and any corporation, trade or business which is, together with that Employer, a member of the same controlled group of corporations, a trade or business under common control, or an affiliated service group within the meaning of Code sections 414(b), (c), (m) or (o), except that for purposes of Section 12 "within the meaning of Code sections 414(b), (c), (m) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to "within the meaning of Code section 414(b), (c), (m) or (o)".

1.40 "Senior Participant". A Participant who is age 55 or over.

1.41 "Settlement Date". For each Trade Date, the Trustee's next business day.

1.42 "Spousal Consent". The written consent given by a spouse to a Participant's election or waiver of a specified form of benefit or Beneficiary designation. The spouse's consent must acknowledge the effect on the spouse of the Participant's election, waiver or designation, and be duly witnessed by a Plan representative or notary public. Spousal Consent shall be valid only with respect to the spouse who signs the Spousal Consent and only for the particular choice made by the Participant which requires Spousal Consent. A Participant may revoke (without Spousal Consent) a prior election, waiver or

6

designation that required Spousal Consent at any time before payments begin. Spousal Consent also means a determination by the Administrator that there is no spouse, the spouse cannot be located, or such other circumstances as may be established by applicable law.

1.43 "Sweep Account". The subsidiary Account for each Participant through which all transactions are processed, which is invested in interest bearing deposits of the Trustee.

1.44 "Sweep Date". The cut off date and time for receiving instructions for transactions to be processed on the next Trade Date.

1.45 "Taxable Income". Compensation in the amount reported by the Employer or a Related Company as "Wages, tips, other compensation" on Form W-2, or any successor method of reporting under Code section 6041(d).

1.46 "Trade Date". Each day the Investment Funds are valued, which is normally every day the assets of such Funds are traded.

1.47 "Trust". The legal entity created by those provisions of this document which relate to the Trustee. The Trust is part of the Plan and holds the Plan assets which are comprised of the aggregate of Participants' Accounts, any unallocated funds invested in deposit or money market type assets pending allocation to Participants' Accounts or disbursement to pay Plan fees and expenses and the Forfeiture Account.

1.48 "Trustee". BZW Barclays Global Investors, National Association.

1.49 "Year of Vesting Service". A 12 month Period of Employment.

Notwithstanding, Years of Vesting Service shall be calculated as follows if (and only if) it would be of benefit to the Employee:

(a) For service from January 1, 1995, each 12 month Period of Employment;

(b) For service prior to January 1, 1995, a 12 month period ending on the anniversary of the date an individual became an Employee, or as that date may be adjusted as a result of his or her termination of employment with all Related Companies and subsequent rehire as an Employee, in which an Employee is credited with at least 1,000 hours of service, as such term was defined for this purpose under the terms of the Silicon Valley Bancshares Employee Stock Ownership Plan as then in effect prior to the Effective Date.

Years of Vesting Service shall include service credited prior to January 1, 1995.

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2 ELIGIBILITY

2.1 Eligibility

All Participants as of January 1, 1996 shall continue their eligibility to participate. Each other Eligible Employee shall become a Participant on the first January 1, April 1, July 1 or October 1 after the date he or she attains age 18, and completes one hour of service.

2.2 Ineligible Employees

If an Employee completes the above eligibility requirements, but is Ineligible at the time participation would otherwise begin (if he or she were not Ineligible), he or she shall become a Participant on the first subsequent date on which he or she is an Eligible Employee.

2.3 Ineligible or Former Participants

A Participant may not share in Plan Contributions during the period he or she is Ineligible, but he or she shall continue to participate for all other purposes. An Ineligible Participant or former Participant shall automatically become an active Participant on the date he or she again becomes an Eligible Employee.

8

3 PARTICIPANT CONTRIBUTIONS

Participant Contributions are not permitted under the Plan.

9

4 TRANSFERS FROM AND TO OTHER QUALIFIED PLANS

4.1 Transfers From and To Other Qualified Plans

The Administrator may instruct the Trustee to receive assets in cash or in-kind directly from another qualified plan or transfer assets in cash or in-kind directly to another qualified plan; provided that receipt of a transfer should not be directed if:

(a) any amounts are not exempted by Code section 401(a)(11)(B) from the annuity requirements of Code section 417 unless the Plan complies with such requirements; or

(b) any amounts include benefits protected by Code section 411(d)(6) which would not be preserved under applicable Plan provisions.

The Trustee may refuse the receipt of any transfer if:

(a) the Trustee finds the in-kind assets unacceptable; or

(b) instructions for posting amounts to Participants' Accounts are incomplete.

Such amounts shall be posted to the appropriate Accounts of Participants as of the date received by the Trustee.

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5 EMPLOYER CONTRIBUTIONS

5.1 Money Purchase Pension Contributions

(a) Frequency and Eligibility. For each quarter of the Plan Year, the Employer shall make a Money Purchase Pension Contribution on behalf of each Participant who was an Eligible Employee on the last day of the period. Such Contributions shall also be made on behalf of each Participant who was an Eligible Employee at any time during the period but who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date or by reason of his or her Disability or death.

(b) Allocation Method. The Money Purchase Pension Contribution for each period, shall be equal to 5% of each eligible Participant's Pay (including Forfeiture Account amounts applied as Money Purchase Pension Contributions).

(c) Timing, Medium and Posting. The Employer shall make each period's Money Purchase Pension Contribution in cash as soon as administratively feasible, and for purposes of deducting such Money Purchase Pension Contribution, not later than the Employer's federal tax filing date, including extensions. The Trustee shall post such amounts to each Participant's Money Purchase Pension Account once the total Contribution received has been balanced against the specific amount to be credited to each Participant's Money Purchase Pension Account.

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6 ACCOUNTING

6.1 Individual Participant Accounting

The Administrator shall maintain an individual set of Accounts for each Participant in order to reflect transactions both by type of Account and investment medium. Financial transactions shall be accounted for at the individual Account level by posting each transaction to the appropriate Account of each affected Participant. Participant Account values shall be maintained in shares for the Investment Funds and in dollars for the Sweep Account. At any point in time, the Account value shall be determined using the most recent Trade Date values provided by the Trustee.

6.2 Sweep Account is Transaction Account

All transactions related to amounts being contributed to or distributed from the Trust shall be posted to each affected Participant's Sweep Account. Any amount held in the Sweep Account shall be credited with interest up until the date on which it is removed from the Sweep Account.

6.3 Trade Date Accounting and Investment Cycle

Participant Account values shall be determined as of each Trade Date. For any transaction to be processed as of a Trade Date, the Trustee must receive instructions for the transaction by the Sweep Date. Such instructions shall apply to amounts held in the Account on that Sweep Date. Financial transactions of the Investment Funds shall be posted to Participants' Accounts as of the Trade Date, based upon the Trade Date values provided by the Trustee, and settled on the Settlement Date.

6.4 Accounting for Investment Funds

Investments in each Investment Fund shall be maintained in shares. The Trustee is responsible for determining the share values of each Investment Fund as of each Trade Date. To the extent an Investment Fund is comprised of collective investment funds of the Trustee, or any other fiduciary to the Plan, the share values shall be determined in accordance with the rules governing such collective investment funds, which are incorporated herein by reference. All other share values shall be determined by the Trustee. The share value of each Investment Fund shall be based on the fair market value of its underlying assets.

6.5 Payment of Fees and Expenses

Except to the extent Plan fees and expenses related to Account maintenance, transaction and Investment Fund management and maintenance, as set forth below, are paid by the Employer directly, or indirectly, through the Forfeiture

12

Account as directed by the Administrator, such fees and expenses shall be paid as set forth below. The Employer may pay a lower portion of the fees and expenses allocable to the Accounts of Participants who are no longer Employees or who are not Beneficiaries, unless doing so would result in discrimination.

(a) Account Maintenance: Account maintenance fees and expenses, may include but are not limited to, administrative, Trustee, government annual report preparation, audit, legal, nondiscrimination testing and fees for any other special services. Account maintenance fees shall be charged to Participants on a per Participant basis provided that no fee shall reduce a Participant's Account balance below zero.

(b) Transaction: Transaction fees and expenses, may include but are not limited to, periodic installment payment and Investment Fund election change fees. Transaction fees shall be charged to the Participant's Account involved in the transaction provided that no fee shall reduce a Participant's Account balance below zero.

(c) Investment Fund Management and Maintenance: Management and maintenance fees and expenses related to the Investment Funds shall be charged at the Investment Fund level and reflected in the net gain or loss of each Fund.

As of the Effective Date, a breakdown of which Plan fees and expenses shall generally be borne by the Trust (and charged to individual Participants' Accounts or charged at the Investment Fund level and reflected in the net gain or loss of each Fund) and those that shall be paid by the Employer is set forth in Appendix B and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

The Trustee shall have the authority to pay any such fees and expenses, which remain unpaid by the Employer for 60 days, from the Trust.

6.6 Error Correction

The Administrator may correct any errors or omissions in the administration of the Plan by restoring any Participant's Account balance with the amount that would be credited to the Account had no error or omission been made. Funds necessary for any such restoration shall be provided through payment made by the Employer, or by the Trustee to the extent the error or omission is attributable to actions or inactions of the Trustee, or if the restoration involves an Account holding amounts contributed by an Employer, the Administrator may direct the Trustee to use amounts from the Forfeiture Account.

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6.7 Participant Statements

The Administrator shall provide Participants with statements of their Accounts as soon after the end of each quarter of the Plan Year as administratively feasible.

6.8 Special Accounting During Conversion Period

The Administrator and Trustee may use any reasonable accounting methods in performing their respective duties during any Conversion Period. This includes, but is not limited to, the method for allocating net investment gains or losses and the extent, if any, to which contributions received by and distributions paid from the Trust during this period share in such allocation.

6.9 Accounts for QDRO Beneficiaries

A separate Account shall be established for an alternate payee entitled to any portion of a Participant's Account under a QDRO as of the date and in accordance with the directions specified in the QDRO. In addition, a separate Account may be established during the period of time the Administrator, a court of competent jurisdiction or other appropriate person is determining whether a domestic relations order qualifies as a QDRO. Such a separate Account shall be valued and accounted for in the same manner as any other Account.

(a) Distributions Pursuant to QDROs. If a QDRO so provides, the portion of a Participant's Account payable to an alternate payee may be distributed, in a form as permissible under
Section 11 and Code section 414(p), to the alternate payee at the time specified in the QDRO, regardless of whether the Participant is entitled to a distribution from the Plan at such time.

(b) Investment Direction. Where a separate Account has been established on behalf of an alternate payee and has not yet been distributed, the alternate payee may direct the investment of such Account in the same manner as if he or she were a Participant.

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7 INVESTMENT AUTHORITY AND INVESTMENT FUNDS

7.1 General Investment Authority

The Administrator shall be responsible for directing the investment of all Trust assets, except that a Senior Participant shall be provided the option to direct the investment of his or her Account as described in this Section. Except for Participants' Sweep Accounts, the Trust shall be maintained in one or more Investment Funds. The Administrator shall select the Investment Funds and may change the number or composition of the Investment Funds, subject to the terms and conditions agreed to with the Trustee.

7.2 Special Investment Authority Provisions Related to Senior Participants

A Senior Participant may direct the investment of the balance in his or her Account in any combination of one or any number of the Investment Funds offered in accordance with the procedures established by the Administrator and Trustee. Any amount deposited to a Senior Participant's Account shall be invested as directed by the Administrator, until otherwise directed by the Senior Participant. During any Conversion Period, Trust assets may be held in any investment vehicle permitted by the Plan, as directed by the Administrator, irrespective of a Senior Participant's investment elections.

The Administrator shall select the Investment Funds offered to Senior Participants and may change the number or composition of the Investment Funds, subject to the terms and conditions agreed to with the Trustee. A Senior Participant may change his or her investment election at any time in accordance with the procedures established by the Administrator and Trustee. Investment elections received by the Trustee by the Sweep Date shall be effective on the following Trade Date. A reasonable processing fee may be charged directly to a Senior Participant's Account for Investment Fund election changes in excess of a specified number per year as determined by the Administrator.

A Senior Participant shall be solely responsible for the selection of his or her Investment Fund choices. No fiduciary with respect to the Plan is empowered to advise a Senior Participant as to the manner in which his or her Account is to be invested, and the fact that an Investment Fund is offered shall not be construed to be a recommendation for investment.

As of the Effective Date, a list of the Investment Funds offered under the Plan to Senior Participants is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, and as agreed to by the Trustee, without the necessity of amending this Plan and Trust.

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8 VESTING & FORFEITURES

8.1 Full Vesting Upon Certain Events

A Participant's entire Account shall become fully vested once he or she has attained his or her Normal Retirement Date as an Employee or upon his or her terminating employment with all Related Companies due to a Reduction in Force or his or her Disability or death.

8.2 Vesting Schedule

In addition to the vesting provided above, a Participant's Money Purchase Pension Account shall become vested in accordance with the following schedule:

YEARS OF VESTING       VESTED
    SERVICE          PERCENTAGE
----------------     -----------
Less than 1                0%
1 but less than 2         20%
2 but less than 3         40%
3 but less than 4         60%
4 but less than 5         80%
5 or more                100%

If this vesting schedule is changed, the vested percentage for each Participant shall not be less than his or her vested percentage determined as of the last day prior to this change, and for any Participant with at least three Years of Vesting Service when the schedule is changed, vesting shall be determined using the more favorable vesting schedule.

8.3 Forfeitures

A Participant's non-vested Account balance shall be forfeited as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment has terminated with all Related Companies. Forfeitures from all Employer Contribution Accounts shall be transferred to and maintained in a single Forfeiture Account, which shall be invested in interest bearing deposits of the Trustee. Forfeiture Account amounts shall be utilized to restore Accounts, to pay Plan fees and expenses at the discretion of the Administrator and to reduce Money Purchase Pension Contributions as directed by the Administrator.

8.4 Rehired Employees

(a) Service. If a former Employee is rehired, all Periods of Employment credited when his or her employment last terminated shall be counted in determining his or her vested interest.

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(b) Account Restoration. If a former Employee is rehired before he or she has a Break in Service, the amount forfeited when his or her employment last terminated shall be restored to his or her Account. The restoration shall include the interest which would have been credited had such forfeiture been invested in the Sweep Account from the date forfeited until the date the restoration amount is restored. The amount shall come from the Forfeiture Account to the extent possible, and any additional amount needed shall be contributed by the Employer. The vested interest in his or her restored Account shall then be equal to:

V% times (AB plus D) minus D

where:

V% = current vested percentage AB = current account balance D = amount previously distributed

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9 PARTICIPANT LOANS

Loans to Participants from the Plan are not permitted.

18

10 IN-SERVICE WITHDRAWALS

In-service withdrawals to a Participant who is an Employee are not permitted other than as required by law pursuant to the terms and conditions as set forth in Section 11.

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11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW

11.1 Benefit Information, Notices and Election

A Participant, or his or her Beneficiary in the case of his or her death, shall be provided with information regarding all optional times and forms of distribution available, to include the notices prescribed by Code section 402(f) and Code section 411(a)(11). Subject to the other requirements of this Section, a Participant, or his or her Beneficiary in the case of his or her death, may elect, in such manner and with such advance notice as prescribed by the Administrator, to have his or her vested Account balance paid to him or her beginning upon any Settlement Date following the Participant's termination of employment with all Related Companies or, if earlier, at the time required by law as set forth in Section 11.7.

A distribution may commence less than 30 days, but more than seven days if such distribution is one to which Code sections 401(a)(11) and 417 apply, after the aforementioned notices are provided, if:

(a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notices to consider the decision as to whether to elect a distribution and if so to elect a particular form of distribution and to elect or not elect a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution;

(b) the Participant after receiving such notices, affirmatively elects a distribution and a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof; and

(c) if such distribution is one to which Code sections 401(a)(11) and 417 apply, the Participant's election includes Spousal Consent.

11.2 Spousal Consent

A Participant is required to obtain Spousal Consent in order to receive a distribution under the Plan, except with regard to a distribution made to a Participant without his or her consent.

11.3 Payment Form and Medium

Except to the extent otherwise provided by Section 11.4, a married Participant's benefit shall be paid in the form of an immediate qualified joint and 50% survivor annuity with the Participant's spouse as the joint annuitant

20

and a single Participant's or surviving spouse Beneficiary's benefit shall be paid in the form of a single life annuity. Notwithstanding, except to the extent otherwise provided by Section 11.4 and subject to the requirements of Section 11.12, he or she may instead elect:

(a) a single lump sum, or

(b) a portion paid in a lump sum, and the remainder paid later, or

(c) periodic installments over a period not to exceed the life expectancy of the Participant and his or her Beneficiary, or

(d) a single life annuity or a joint and 50% or 100% survivor annuity.

Any annuity option permitted shall be provided through the purchase of a non-transferable single premium contract from an insurance company which must conform to the terms of the Plan and which shall be distributed to the Participant or Beneficiary in complete satisfaction of the benefit due.

Distributions (other than annuity contracts) shall be made in cash, or if a Participant so elects, payment may be made in the form of whole shares of Company Stock and cash in lieu of fractional shares to the extent invested in the Company Stock Fund. With regard to the portion of a distribution representing an Eligible Rollover Distribution, a Distributee may elect a Direct Rollover for all or a portion of such amount.

11.4 Distribution of Small Amounts

If after a Participant's employment with all Related Companies ends, the Participant's vested Account balance is $3,500 or less, and if at the time of any prior in-service withdrawal or distribution the Participant's vested Account balance did not exceed $3,500, the Participant's benefit shall be paid as a single lump sum as soon as administratively feasible in accordance with procedures prescribed by the Administrator.

11.5 Source and Timing of Distribution Funding

A distribution to a Participant shall be made solely from the assets of his or her own Account and shall be based on the Account values as of the Trade Date the distribution is processed. The available assets shall be determined first by Account type and then within each Account used for funding a distribution, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the distribution is processed.

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The distribution shall be funded on the Settlement Date following the Trade Date as of which the distribution is processed. The Trustee shall make payment as soon thereafter as administratively feasible.

11.6 Deemed Distribution

For purposes of Section 8.3, if at the time a Participant's employment with all Related Companies has terminated, the Participant's vested Account balance attributable to Accounts subject to vesting as described in Section 8, is zero, his or her vested Account balance shall be deemed distributed as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment with all Related Companies has terminated.

11.7 Latest Commencement Permitted

In addition to any other Plan requirements and unless a Participant elects otherwise, his or her benefit payments shall begin not later than 60 days after the end of the Plan Year in which he or she attains his or her Normal Retirement Date or retires, whichever is later. However, if the amount of the payment or the location of the Participant (after a reasonable search) cannot be ascertained by that deadline, payment shall be made no later than 60 days after the earliest date on which such amount or location is ascertained but in no event later than as described below. A Participant's failure to elect in such manner as prescribed by the Administrator to have his or her vested Account balance paid to him or her, shall be deemed an election by the Participant to defer his or her distribution.

Benefit payments shall begin by the April 1 immediately following the end of the calendar year in which the Participant attains age 70 1/2, whether or not he or she is an Employee.

If benefit payments cannot begin at the time required because the location of the Participant cannot be ascertained (after a reasonable search), the Administrator may, at any time thereafter, treat such person's Account as forfeited subject to the provisions of Section 17.5.

11.8 Payment Within Life Expectancy

The Participant's payment election must be consistent with the requirement of Code section 401(a)(9) that all payments are to be completed within a period not to exceed the lives or the joint and last survivor life expectancy of the Participant and his or her Beneficiary. The life expectancies of a Participant and his or her Beneficiary, if such Beneficiary is his or her spouse, may be recomputed annually.

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11.9 Incidental Benefit Rule

The Participant's payment election must be consistent with the requirement that, if the Participant's spouse is not his or her sole primary Beneficiary, the minimum annual distribution for each calendar year, beginning with the year in which he or she attains age 70 1/2, shall not be less than the quotient obtained by dividing (a) the Participant's vested Account balance as of the last Trade Date of the preceding year by (b) the applicable divisor as determined under the incidental benefit requirements of Code section 401(a)(9).

11.10 Payment to Beneficiary

Payment to a Beneficiary must either: (1) be completed by the end of the calendar year that contains the fifth anniversary of the Participant's death or (2) begin by the end of the calendar year that contains the first anniversary of the Participant's death and be completed within the period of the Beneficiary's life or life expectancy, except that:

(a) If the Participant dies after the April 1 immediately following the end of the calendar year in which he or she attains age 70 1/2, payment to his or her Beneficiary must be made at least as rapidly as provided in the Participant's distribution election;

(b) If the surviving spouse is the Beneficiary, payments need not begin until the end of the calendar year in which the Participant would have attained age 70 1/2 and must be completed within the spouse's life or life expectancy; and

(c) If the Participant and the surviving spouse who is the Beneficiary die (1) before the April 1 immediately following the end of the calendar year in which the Participant would have attained age 70 1/2 and (2) before payments have begun to the spouse, the spouse shall be treated as the Participant in applying these rules.

11.11 Beneficiary Designation

Each Participant may complete a beneficiary designation form indicating the Beneficiary who is to receive the Participant's remaining Plan interest at the time of his or her death. The designation may be changed at any time. However, a Participant's spouse shall be the sole primary Beneficiary unless the designation includes Spousal Consent for another Beneficiary. If no proper designation is in effect at the time of a Participant's death or if the Beneficiary does not survive the Participant, the Beneficiary shall be, in the order listed, the:

(a) Participant's surviving spouse,

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(b) Participant's children, in equal shares, (or if a child does not survive the Participant, and that child leaves issue, the issue shall be entitled to that child's share, by right of representation) or

(c) Participant's estate.

11.12 QJSA and QPSA Information and Elections

The following definitions, information and election rules shall apply to all Participants:

(a) Annuity Starting Date. The first day of the first period for which an amount is payable as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Participant to such benefit. Such date shall be a date no earlier than the expiration of the seven-day period that commences the day after the information described in the QJSA Information to a Participant paragraph below is provided to the Participant.

(b) "QJSA". A qualified joint and survivor annuity, meaning for a married Participant, a form of benefit payment which is the actuarial equivalent of the Participant's vested Account balance at the Annuity Starting Date, payable to the Participant in monthly payments for life and providing that, if the Participant's spouse survives him or her, monthly payments equal to 50% of the amount payable to the Participant during his or her lifetime shall be paid to the spouse for the remainder of such person's lifetime and for a single Participant, a form of benefit payment which is the actuarial equivalent of the Participant's vested Account balance at the Annuity Starting Date, payable to the Participant in monthly payments for life.

(c) "QPSA". A qualified pre-retirement survivor annuity, meaning that upon the death of a Participant before the Annuity Starting Date, the vested portion of the Participant's Account becomes payable to the surviving spouse as a life annuity, unless Spousal Consent has been given to a different Beneficiary or the surviving spouse chooses a different form of payment.

(d) QJSA Information to a Participant. No more than 90 days before the Annuity Starting Date, each Participant who is eligible for an annuity form of payment shall be given a written explanation of (1) the terms and conditions of the QJSA, (2) the right to a period of at least 30 days after receipt of the written explanation to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, (3) the right to revoke this election and the effect of this revocation, and (4) the need for Spousal Consent.

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(e) QJSA Election. A Participant may elect, and such election shall include Spousal Consent if married, at any time within the 90 day period ending on the Annuity Starting Date, to (1) waive the right to receive the QJSA and elect an optional form of payment, or (2) revoke or change any such election.

(f) QPSA Beneficiary Information to a Participant. Upon becoming a Participant, and with updates as needed to insure such information is accurate and readily available to each affected Participant who is between the ages of 32 and 35, each married Participant shall be given written information stating that
(1) his or her death benefit is payable to his or her surviving spouse, (2) he or she may choose that the benefit be paid to a different Beneficiary, (3) he or she has the right to revoke or change a prior designation and the effects of such revocation or change, and (4) the need for Spousal Consent.

(g) QPSA Beneficiary Designation by Participant. A married Participant may designate, with Spousal Consent, a non-spouse Beneficiary at any time after the Participant has been given the information in the QPSA Beneficiary Information to a Participant paragraph above and upon the earlier of (1) the date the Participant is no longer an Employee, or (2) the beginning of the Plan Year in which the Participant attains age 35. A Participant who has been given the information in the QPSA Beneficiary Information to a Participant paragraph above may, prior to the time described in the preceding sentence, make a special qualified election to designate, with Spousal Consent, a non-spouse Beneficiary. Such special qualified designation shall become invalid at the beginning of the Plan Year in which the Participant attains age 35 and a new designation, with Spousal Consent, shall be necessary.

(h) QPSA Information to a Surviving Spouse. Each surviving spouse who is eligible for an annuity form of payment shall be given a written explanation of (1) the terms and conditions of being paid his or her Account balance in the form of a single life annuity, (2) the right to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, and (3) the right to revoke this election and the effect of this revocation.

(i) QPSA Election by Surviving Spouse. A surviving spouse may elect, at any time up to the Annuity Starting Date, to (1) waive the right to receive a single life annuity and elect an optional form of payment, or (2) revoke or change any such election.

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12 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS

12.1 "Annual Addition" Defined

The Annual Addition means the sum of all amounts allocated to the Participant's Account for a Plan Year. Amounts include contributions (except for rollovers or transfers from another qualified plan), forfeitures and, if the Participant is a Key Employee (pursuant to Section 13) for the applicable or any prior Plan Year, medical benefits provided pursuant to Code section 419A(d)(1). For purposes of this Section 12.1, "Account" also includes a Participant's account in all other defined contribution plans currently or previously maintained by any Related Company. The Plan Year refers to the year to which the allocation pertains, regardless of when it was allocated. The Plan Year shall be the Code section 415 limitation year.

12.2 Maximum Annual Addition

The Annual Addition to a Participant's accounts under this Plan and any other defined contribution plan maintained by any Related Company for any Plan Year shall not exceed the lesser of (1) 25% of his or her Taxable Income or (2) $30,000 (as adjusted for the cost of living pursuant to Code section 415(d)).

12.3 Correcting an Excess Annual Addition

Upon the discovery of an excess Annual Addition to a Participant's Account (resulting from forfeitures, allocations, reasonable error in determining Participant compensation or the amount of elective contributions, or other facts and circumstances acceptable to the Internal Revenue Service) the excess amount (adjusted to reflect investment gains) shall be forfeited by the Participant and used as described in Section 8.3.

12.4 Correcting a Multiple Plan Excess

If a Participant, whose Account is credited with an excess Annual Addition, received allocations to more than one defined contribution plan, the excess shall be corrected by reducing the Annual Addition to this Plan only after all possible reductions have been made to the other defined contribution plans.

12.5 "Defined Benefit Fraction" Defined

The fraction, for any Plan Year, where the numerator is the "projected annual benefit", as defined below, and the denominator is the greater of 125% of the "protected current accrued benefit", as defined below, or the normal limit which is the lesser of (1) 125% of the maximum dollar limitation provided under Code section 415(b)(1)(A) for the Plan Year or (2) 140% of the amount which may be taken into account under Code section 415(b)(1)(B) for the Plan Year, where a Participant's:

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(a) "projected annual benefit" is the annual benefit provided by the Plan determined pursuant to Code section 415(e)(2)(A), and

(b) "protected current accrued benefit" in a defined benefit plan in existence (1) on July 1, 1982, shall be the accrued annual benefit provided for under Public Law 97-248, section
235(g)(4), as amended, or (2) on May 6, 1986, shall be the accrued annual benefit provided for under Public Law 99-514, section 1106(i)(3).

12.6 "Defined Contribution Fraction" Defined

The fraction where the numerator is the sum of the Participant's Annual Addition for each Plan Year to date and the denominator is the sum of the "annual amounts" for each year in which the Participant has performed service with a Related Company. The "annual amount" for any Plan Year is the lesser of (1) 125% of the Code section 415(c)(1)(A) dollar limitation (determined without regard to subsection (c)(6)) in effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B) amount in effect for the Plan Year, where:

(a) each Annual Addition is determined pursuant to the Code section 415(c) rules in effect for such Plan Year, and

(b) the numerator is adjusted pursuant to Public Law 97-248, section 235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).

12.7 Combined Plan Limits and Correction

If a Participant has also participated in a defined benefit plan maintained by a Related Company, the sum of the Defined Benefit Fraction and the Defined Contribution Fraction for any Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan Year, the Participant's benefit under any defined benefit plan (to the extent it has not been distributed or used to purchase an annuity contract) shall be limited so that the combined fraction does not exceed 1.0 before any defined contribution limits shall be enforced.

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13 TOP HEAVY RULES

13.1 Top Heavy Definitions

When capitalized, the following words and phrases have the following meanings when used in this Section:

(a) "Aggregation Group". The Aggregation Group is the group consisting of each qualified plan of an Employer (and its Related Companies) (1) in which a Key Employee is a participant or was a participant during the determination period (regardless of whether such plan has terminated), or
(2) which enables another plan in the group to meet the requirements of Code sections 401(a)(4) or 410(b). The Employer may also treat any other qualified plan as part of the group if the group would continue to meet the requirements of Code sections 401(a)(4) and 410(b) with such plan being taken into account.

(b) "Determination Date". The Determination Date is the last Trade Date of the preceding Plan Year or, in the case of the Plan's first year, the last Trade Date of the first Plan Year.

(c) "Key Employee". A Key Employee is a current or former Employee (or his or her Beneficiary) who at any time during the five year period ending on the Determination Date was:

(1) an officer of a Related Company whose Compensation (i) exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and (ii) places him within the following highest paid group of officers:

  NUMBER OF EMPLOYEES                NUMBER OF
NOT EXCLUDED UNDER CODE             HIGHEST PAID
   SECTION 414(Q)(8)             OFFICERS INCLUDED
--------------------------   -------------------------
      Less than 30                       3
       30 to 500                10% of the number of
                               Employees not excluded
                                 under Code section
                                      414(q)(8)
     More than 500                       50

(2) a more than 5% Owner,

(3) a more than 1% Owner whose Compensation exceeds $150,000, or

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(4) a more than 0.5% Owner who is among the 10 Employees owning the largest interest in a Related Company and whose Compensation exceeds the amount in effect under Code section 415(c)(1)(A).

(d) "Plan Benefit". The Plan Benefit is the sum as of the Determination Date of (1) an Employee's Account, (2) the present value of his or her other accrued benefits provided by all qualified plans within the Aggregation Group, and (3) the aggregate distributions made within the five year period ending on such date. Plan Benefits shall exclude rollover contributions and plan to plan transfers made after December 31, 1983 which are both employee initiated and from a plan maintained by a non-related employer.

(e) "Top Heavy". The Plan is Top Heavy if the Plan Benefits of Key Employees account for more than 60% of the Plan Benefits of all Employees who have performed services at any time during the five year period ending on the Determination Date. The Plan Benefits of Employees who were, but are no longer, Key Employees (because they have not been an officer or Owner during the five year period), are excluded in the determination.

13.2 Special Contributions

(a) Minimum Contribution Requirement. For each Plan Year in which the Plan is Top Heavy, the Employer shall not allow any contributions (other than a rollover contribution from a plan maintained by a non-related employer, if otherwise permitted under the Plan) to be made by or on behalf of any Key Employee unless the Employer makes a contribution on behalf of all Participants who were Eligible Employees as of the last day of the Plan Year in an amount equal to at least 3% of each such Participant's Taxable Income. The Administrator shall remove any such contributions (including applicable investment gain or loss) credited to a Key Employee's Account in violation of the foregoing rule and return them to the Employer or Employee to the extent permitted by the Limited Return of Contributions paragraph of Section 17.

(b) Overriding Minimum Benefit. Notwithstanding, contributions shall be permitted on behalf of Key Employees if the Employer also maintains a defined benefit plan which automatically provides a benefit which satisfies the Code section 416(c)(1) minimum benefit requirements, including the adjustment provided in Code section 416(h)(2)(A), if applicable. If this Plan is part of an aggregation group in which a Key Employee is receiving a benefit and no minimum is provided in any other plan, a minimum contribution of at least 3% of Taxable Income shall be provided to the Participants specified in the preceding paragraph. In addition, the Employer may offset a defined benefit minimum by contributions made to this Plan.

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13.3 Adjustment to Combined Limits for Different Plans

For each Plan Year in which the Plan is Top Heavy, 100% shall be substituted for 125% in determining the Defined Benefit Fraction and the Defined Contribution Fraction.

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14 PLAN ADMINISTRATION

14.1 Plan Delineates Authority and Responsibility

Plan fiduciaries include the Company, the Administrator, the Committee and/or the Trustee, as applicable, whose specific duties are delineated in this Plan and Trust. In addition, Plan fiduciaries also include any other person to whom fiduciary duties or responsibility is delegated with respect to the Plan. Any person or group may serve in more than one fiduciary capacity with respect to the Plan. To the extent permitted under ERISA section 405, no fiduciary shall be liable for a breach by another fiduciary.

14.2 Fiduciary Standards

Each fiduciary shall:

(a) discharge his or her duties in accordance with this Plan and Trust to the extent they are consistent with ERISA;

(b) use that degree of care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;

(c) act with the exclusive purpose of providing benefits to Participants and their Beneficiaries, and defraying reasonable expenses of administering the Plan;

(d) diversify Plan investments, to the extent such fiduciary is responsible for directing the investment of Plan assets, so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and

(e) treat similarly situated Participants and Beneficiaries in a uniform and nondiscriminatory manner.

14.3 Company is ERISA Plan Administrator

The Company is the plan administrator, within the meaning of ERISA section 3(16), which is responsible for compliance with all reporting and disclosure requirements, except those that are explicitly the responsibility of the Trustee under applicable law. The Administrator and/or Committee shall have any necessary authority to carry out such functions through the actions of the Administrator, duly appointed officers of the Company, and/or the Committee.

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14.4 Administrator Duties

The Administrator shall have the discretionary authority to construe this Plan and Trust, other than the provisions which relate to the Trustee, and to do all things necessary or convenient to effect the intent and purposes thereof, whether or not such powers are specifically set forth in this Plan and Trust. Actions taken in good faith by the Administrator shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. In addition to the duties listed elsewhere in this Plan and Trust, the Administrator's authority shall include, but not be limited to, the discretionary authority to:

(a) determine who is eligible to participate, the allocation of Contributions and the eligibility for distributions;

(b) provide each Participant with a summary plan description no later than 90 days after he or she has become a Participant (or such other period permitted under ERISA section
104(b)(1)), as well as informing each Participant of any material modification to the Plan in a timely manner;

(c) make a copy of the following documents available to Participants during normal work hours: this Plan and Trust (including subsequent amendments), all annual and interim reports of the Trustee related to the entire Plan, the latest annual report and the summary plan description;

(d) determine the fact of a Participant's death and of any Beneficiary's right to receive the deceased Participant's interest based upon such proof and evidence as it deems necessary;

(e) establish and review at least annually a funding policy bearing in mind both the short-run and long-run needs and goals of the Plan and to the extent Participants may direct their own investments, the funding policy shall focus on which Investment Funds are available for Participants to use; and

(f) adjudicate claims pursuant to the claims procedure described in Section 17.

14.5 Advisors May be Retained

The Administrator may retain such agents and advisors (including attorneys, accountants, actuaries, consultants, record keepers, investment counsel and administrative assistants) as it considers necessary to assist it in the performance of its duties. The Administrator shall also comply with the bonding requirements of ERISA section 412.

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14.6 Delegation of Administrator Duties

The Company, as Administrator of the Plan, has appointed a Committee to administer the Plan on its behalf. The Company shall provide the Trustee with the names and specimen signatures of any persons authorized to serve as Committee members and act as or on its behalf. Any Committee member appointed by the Company shall serve at the pleasure of the Company, but may resign by written notice to the Company. Committee members shall serve without compensation from the Plan for such services. Except to the extent that the Company otherwise provides, any delegation of duties to a Committee shall carry with it the full discretionary authority of the Administrator to complete such duties.

14.7 Committee Operating Rules

(a) Actions of Majority. Any act delegated by the Company to the Committee may be done by a majority of its members. The majority may be expressed by a vote at a meeting or in writing without a meeting, and a majority action shall be equivalent to an action of all Committee members.

(b) Meetings. The Committee shall hold meetings upon such notice, place and times as it determines necessary to conduct its functions properly.

(c) Reliance by Trustee. The Committee may authorize one or more of its members to execute documents on its behalf and may authorize one or more of its members or other individuals who are not members to give written direction to the Trustee in the performance of its duties. The Committee shall provide such authorization in writing to the Trustee with the name and specimen signatures of any person authorized to act on its behalf. The Trustee shall accept such direction and rely upon it until notified in writing that the Committee has revoked the authorization to give such direction. The Trustee shall not be deemed to be on notice of any change in the membership of the Committee, parties authorized to direct the Trustee in the performance of its duties, or the duties delegated to and by the Committee until notified in writing.

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15 MANAGEMENT OF INVESTMENTS

15.1 Trust Agreement

All Plan assets shall be held by the Trustee in trust, in accordance with those provisions of this Plan and Trust which relate to the Trustee, for use in providing Plan benefits and paying Plan fees and expenses not paid directly by the Employer. Plan benefits shall be drawn solely from the Trust and paid by the Trustee as directed by the Administrator. Notwithstanding, the Administrator may appoint, with the approval of the Trustee, another trustee to hold and administer Plan assets which do not meet the requirements of Section 15.2.

15.2 Investment Funds

The Administrator is hereby granted authority to direct the Trustee to invest Trust assets in one or more Investment Funds. The number and composition of Investment Funds may be changed from time to time, without the necessity of amending this Plan and Trust. The Trustee may establish reasonable limits on the number of Investment Funds as well as the acceptable assets for any such Investment Fund. Each of the Investment Funds may be comprised of any of the following:

(a) shares of a registered investment company, whether or not the Trustee or any of its affiliates is an advisor to, or other service provider to, such company;

(b) collective investment funds maintained by the Trustee, or any other fiduciary to the Plan, which are available for investment by trusts which are qualified under Code sections 401(a) and 501(a);

(c) individual equity and fixed income securities which are readily tradeable on the open market;

(d) guaranteed investment contracts issued by a bank or insurance company;

(e) interest bearing deposits of the Trustee; and

(f) Company Stock.

Any Investment Fund assets invested in a collective investment fund, shall be subject to all the provisions of the instruments establishing and governing such fund. These instruments, including any subsequent amendments, are incorporated herein by reference.

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15.3 Authority to Hold Cash

The Trustee shall have the authority to cause the investment manager of each Investment Fund to maintain sufficient deposit or money market type assets in each Investment Fund to handle the Fund's liquidity and disbursement needs. Each Participant's and Beneficiary's Sweep Account, which is used to hold assets pending investment or disbursement, shall consist of interest bearing deposits of the Trustee.

15.4 Trustee to Act Upon Instructions

The Trustee shall carry out instructions to invest assets in the Investment Funds as soon as practicable after such instructions are received from the Administrator, Participants, or Beneficiaries. Such instructions shall remain in effect until changed by the Administrator, Participants or Beneficiaries.

15.5 Administrator Has Right to Vote Registered Investment Company Shares

The Administrator shall be entitled to vote proxies or exercise any shareholder rights relating to shares held on behalf of the Plan in a registered investment company. Notwithstanding, the authority to vote proxies and exercise shareholder rights related to such shares held in a Custom Fund is vested as provided otherwise in Section 15.

15.6 Custom Fund Investment Management

The Administrator may designate, with the consent of the Trustee, an investment manager for any Investment Fund established by the Trustee solely for Participants of this Plan and, subject to
Section 15.7, any other qualified plan of the Company or a Related Company (a "Custom Fund"). The investment manager may be the Administrator, Trustee or an investment manager pursuant to ERISA section 3(38). The Administrator shall advise the Trustee in writing of the appointment of an investment manager and shall cause the investment manager to acknowledge to the Trustee in writing that the investment manager is a fiduciary to the Plan.

A Custom Fund shall be subject to the following:

(a) Guidelines. Written guidelines, acceptable to the Trustee, shall be established for a Custom Fund. If a Custom Fund consists solely of collective investment funds or shares of a registered investment company (and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs), its underlying instruments shall constitute the guidelines.

(b) Authority of Investment Manager. The investment manager of a Custom Fund shall have the authority to vote or execute proxies,

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exercise shareholder rights, manage, acquire, and dispose of Trust assets. Notwithstanding, the authority to vote proxies and exercise shareholder rights related to shares of Company Stock held in a Custom Fund is vested as provided otherwise in
Section 15.

(c) Custody and Trade Settlement. Unless otherwise agreed to by the Trustee, the Trustee shall maintain custody of all Custom Fund assets and be responsible for the settlement of all Custom Fund trades. For purposes of this section, shares of a collective investment fund, shares of a registered investment company and guaranteed investment contracts issued by a bank or insurance company, shall be regarded as the Custom Fund assets instead of the underlying assets of such instruments.

(d) Limited Liability of Co-Fiduciaries. Neither the Administrator nor the Trustee shall be obligated to invest or otherwise manage any Custom Fund assets for which the Trustee or Administrator is not the investment manager nor shall the Administrator or Trustee be liable for acts or omissions with regard to the investment of such assets except to the extent required by ERISA.

15.7 Master Custom Fund

The Trustee may establish, at the direction of the Company, a single Custom Fund (a "Master Custom Fund"), for the benefit of this Plan and any other qualified plan of the Company or a Related Company for which the Trustee acts as trustee pursuant to a plan and trust document that contains a provision substantially identical to this provision. The assets of this Plan, to the extent invested in the Master Custom Fund, shall consist only of that percentage of the assets of the Master Custom Fund represented by the shares held by this Plan.

15.8 Authority to Segregate Assets

The Company may direct the Trustee to split an Investment Fund into two or more funds in the event any assets in the Fund are illiquid or the value is not readily determinable. In the event of such segregation, the Company shall give instructions to the Trustee on what value to use for the split-off assets, and the Trustee shall not be responsible for confirming such value.

15.9 Maximum Permitted Investment in Company Stock

If the Company provides for a Company Stock Fund, the Fund shall be comprised of Company Stock and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs. The Fund may be as large as necessary to comply with the Administrator's and a Senior Participant's investment direction to invest Trust assets in the Company Stock Fund.

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15.10 Participants Have Right to Vote and Tender Company Stock

Each Participant or Beneficiary shall be entitled to instruct the Trustee as to the voting or tendering of any full or partial shares of Company Stock held on his or her behalf in the Company Stock Fund. Prior to such voting or tendering of Company Stock, each Participant or Beneficiary shall receive a copy of the proxy solicitation or other material relating to such vote or tender decision and a form for the Participant or Beneficiary to complete which confidentially instructs the Trustee to vote or tender such shares in the manner indicated by the Participant or Beneficiary. Upon receipt of such instructions, the Trustee shall act with respect to such shares as instructed. The Administrator shall instruct the Trustee with respect to how to vote or tender any shares for which instructions are not received from Participants or Beneficiaries.

15.11 Registration and Disclosure for Company Stock

The Administrator shall be responsible for determining the applicability (and, if applicable, complying with) the requirements of the Securities Act of 1933, as amended, the California Corporate Securities Law of 1968, as amended, and any other applicable blue sky law. The Administrator shall also specify what restrictive legend or transfer restriction, if any, is required to be set forth on the certificates for the securities and the procedure to be followed by the Trustee to effectuate a resale of such securities.

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16 TRUST ADMINISTRATION

16.1 Trustee to Construe Trust

The Trustee shall have the discretionary authority to construe those provisions of this Plan and Trust which relate to the Trustee and to do all things necessary or convenient to the administration of the Trust, whether or not such powers are specifically set forth in this Plan and Trust. Actions taken in good faith by the Trustee shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law.

16.2 Trustee To Act As Owner of Trust Assets

Subject to the specific conditions and limitations set forth in this Plan and Trust, the Trustee shall have all the power, authority, rights and privileges of an absolute owner of the Trust assets and, not in limitation but in amplification of the foregoing, may:

(a) receive, hold, manage, invest and reinvest, sell, tender, exchange, dispose of, encumber, hypothecate, pledge, mortgage, lease, grant options respecting, repair, alter, insure, or distribute any and all property in the Trust;

(b) borrow money, participate in reorganizations, pay calls and assessments, vote or execute proxies, exercise subscription or conversion privileges, exercise options and register any securities in the Trust in the name of the nominee, in federal book entry form or in any other form as shall permit title thereto to pass by delivery;

(c) renew, extend the due date, compromise, arbitrate, adjust, settle, enforce or foreclose, by judicial proceedings or otherwise, or defend against the same, any obligations or claims in favor of or against the Trust; and

(d) lend, through a collective investment fund, any securities held in such collective investment fund to brokers, dealers or other borrowers and to permit such securities to be transferred into the name and custody and be voted by the borrower or others.

16.3 United States Indicia of Ownership

The Trustee shall not maintain the indicia of ownership of any Trust assets outside the jurisdiction of the United States, except as authorized by ERISA section 404(b).

38

16.4 Tax Withholding and Payment

(a) Withholding. The Trustee shall calculate and withhold federal (and, if applicable, state) income taxes with regard to any Eligible Rollover Distribution that is not paid as a Direct Rollover in accordance with the Participant's withholding election or as required by law if no election is made or the election is less than the amount required by law. With regard to any taxable distribution that is not an Eligible Rollover Distribution, the Trustee shall calculate and withhold federal (and, if applicable, state) income taxes in accordance with the Participant's withholding election or as required by law if no election is made.

(b) Taxes Due From Investment Funds. The Trustee shall pay from the Investment Fund any taxes or assessments imposed by any taxing or governmental authority on such Fund or its income, including related interest and penalties.

16.5 Trust Accounting

(a) Annual Report. Within 60 days (or other reasonable period) following the close of the Plan Year, the Trustee shall provide the Administrator with an annual accounting of Trust assets and information to assist the Administrator in meeting ERISA's annual reporting and audit requirements.

(b) Periodic Reports. The Trustee shall maintain records and provide sufficient reporting to allow the Administrator to properly monitor the Trust's assets and activity.

(c) Administrator Approval. Approval of any Trustee accounting shall automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator.

16.6 Valuation of Certain Assets

If the Trustee determines the Trust holds any asset which is not readily tradeable and listed on a national securities exchange registered under the Securities Exchange Act of 1934, as amended, the Trustee may engage a qualified independent appraiser to determine the fair market value of such property, and the appraisal fees shall be paid from the Investment Fund containing the asset.

39

16.7 Legal Counsel

The Trustee may consult with legal counsel of its choice, including counsel for the Employer or counsel of the Trustee, upon any question or matter arising under this Plan and Trust. When relied upon by the Trustee, the opinion of such counsel shall be evidence that the Trustee has acted in good faith.

16.8 Fees and Expenses

The Trustee's fees for its services as Trustee shall be such as may be mutually agreed upon by the Company and the Trustee. Trustee fees and all reasonable expenses of counsel and advisors retained by the Trustee shall be paid in accordance with Section 6.

16.9 Trustee Duties and Limitations

The Trustee's duties, unless otherwise agreed to by the Trustee, shall be confined to construing the terms of the Plan and Trust as they relate to the Trustee, receiving funds on behalf of and making payments from the Trust, safeguarding and valuing Trust assets, investing and reinvesting Trust assets in the Investment Funds as directed by the Administrator, Participants or Beneficiaries and those duties as described in this Section 16.

The Trustee shall have no duty or authority to ascertain whether Contributions are in compliance with the Plan, to enforce collection or to compute or verify the accuracy or adequacy of any amount to be paid to it by the Employer. The Trustee shall not be liable for the proper application of any part of the Trust with respect to any disbursement made at the direction of the Administrator.

40

17 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION

17.1 Plan Does Not Affect Employment Rights

The Plan does not provide any employment rights to any Employee. The Employer expressly reserves the right to discharge an Employee at any time, with or without cause, without regard to the effect such discharge would have upon the Employee's interest in the Plan.

17.2 Limited Return of Contributions

Except as provided in this paragraph, (1) Plan assets shall not revert to the Employer nor be diverted for any purpose other than the exclusive benefit of Participants or their Beneficiaries; and
(2) a Participant's vested interest shall not be subject to divestment. As provided in ERISA section 403(c)(2), the actual amount of a Contribution made by the Employer (or the current value of the Contribution if a net loss has occurred) may revert to the Employer if:

(a) such Contribution is made by reason of a mistake of fact;

(b) initial qualification of the Plan under Code section 401(a) is not received and a request for such qualification is made within the time prescribed under Code section 401(b) (the existence of and Contributions under the Plan are hereby conditioned upon such qualification); or

(c) such Contribution is not deductible under Code section 404 (such Contributions are hereby conditioned upon such deductibility) in the taxable year of the Employer for which the Contribution is made.

The reversion to the Employer must be made (if at all) within one year of the mistaken payment of the Contribution, the date of denial of qualification, or the date of disallowance of deduction, as the case may be. A Participant shall have no rights under the Plan with respect to any such reversion.

17.3 Assignment and Alienation

As provided by Code section 401(a)(13) and to the extent not otherwise required by law, no benefit provided by the Plan may be anticipated, assigned or alienated, except to create, assign or recognize a right to any benefit with respect to a Participant pursuant to a QDRO.

17.4 Facility of Payment

If a Plan benefit is due to be paid to a minor or if the Administrator reasonably believes that any payee is legally incapable of giving a valid receipt and discharge for any payment due him or her, the Administrator shall have the payment of the benefit, or any part thereof, made to the person (or persons or

41

institution) whom it reasonably believes is caring for or supporting the payee, unless it has received due notice of claim therefor from a duly appointed guardian or conservator of the payee. Any payment shall to the extent thereof, be a complete discharge of any liability under the Plan to the payee.

17.5 Reallocation of Lost Participant's Accounts

If the Administrator cannot locate a person entitled to payment of a Plan benefit after a reasonable search, the Administrator may at any time thereafter treat such person's Account as forfeited and use such amount as described in Section 8.3. If such person subsequently presents the Administrator with a valid claim for the benefit, such person shall be paid the amount treated as forfeited, plus the interest that would have been earned in the Sweep Account to the date of determination. The Administrator shall pay the amount through an additional amount contributed by the Employer or direct the Trustee to pay the amount from the Forfeiture Account.

17.6 Claims Procedure

(a) Right to Make Claim. An interested party who disagrees with the Administrator's determination of his or her right to Plan benefits must submit a written claim and exhaust this claim procedure before legal recourse of any type is sought. The claim must include the important issues the interested party believes support the claim. The Administrator, pursuant to the authority provided in this Plan, shall either approve or deny the claim.

(b) Process for Denying a Claim. The Administrator's partial or complete denial of an initial claim must include an understandable, written response covering (1) the specific reasons why the claim is being denied (with reference to the pertinent Plan provisions) and (2) the steps necessary to perfect the claim and obtain a final review.

(c) Appeal of Denial and Final Review. The interested party may make a written appeal of the Administrator's initial decision, and the Administrator shall respond in the same manner and form as prescribed for denying a claim initially.

(d) Time Frame. The initial claim, its review, appeal and final review shall be made in a timely fashion, subject to the following time table:

                                         Days to Respond
Action                                   From Last Action
------                                   ----------------
Administrator determines benefit                       NA
Interested party files initial request            60 days
Administrator's initial decision                  90 days
Interested party requests final review            60 days
Administrator's final decision                    60 days

42

However, the Administrator may take up to twice the maximum response time for its initial and final review if it provides an explanation within the normal period of why an extension is needed and when its decision shall be forthcoming.

17.7 Construction

Headings are included for reading convenience. The text shall control if any ambiguity or inconsistency exists between the headings and the text. The singular and plural shall be interchanged wherever appropriate. References to Participant shall include Beneficiary when appropriate and even if not otherwise already expressly stated.

17.8 Jurisdiction and Severability

The Plan and Trust shall be construed, regulated and administered under ERISA and other applicable federal laws and, where not otherwise preempted, by the laws of the State of California. If any provision of this Plan and Trust shall become invalid or unenforceable, that fact shall not affect the validity or enforceability of any other provision of this Plan and Trust. All provisions of this Plan and Trust shall be so construed as to render them valid and enforceable in accordance with their intent.

17.9 Indemnification by Employer

The Employers hereby agree to indemnify all Plan fiduciaries against any and all liabilities resulting from any action or inaction, (including a Plan termination in which the Company fails to apply for a favorable determination from the Internal Revenue Service with respect to the qualification of the Plan upon its termination), in relation to the Plan or Trust (1) including (without limitation) expenses reasonably incurred in the defense of any claim relating to the Plan or its assets, and amounts paid in any settlement approved by the Employer relating to the Plan or its assets, but (2) excluding liability resulting from actions or inactions made in bad faith, or resulting from the negligence or willful misconduct of the Trustee. The Company shall have the right, but not the obligation, to conduct the defense of any action to which this Section applies. The Plan fiduciaries are not entitled to indemnity from the Plan assets relating to any such action.

43

18 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION

18.1 Amendment

The Company reserves the right to amend this Plan and Trust at any time, to any extent and in any manner it may deem necessary or appropriate. The Company (and not the Trustee) shall be responsible for adopting any amendments necessary to maintain the qualified status of this Plan and Trust under Code sections 401(a) and 501(a). If the Committee is acting as the Administrator in accordance with Section 14.6, it shall have the authority to adopt Plan and Trust amendments which have no substantial adverse financial impact upon any Employer or the Plan. All interested parties shall be bound by any amendment, provided that no amendment shall:

(a) become effective unless it has been adopted in accordance with the procedures set forth in Section 18.5;

(b) except to the extent permissible under ERISA and the Code, make it possible for any portion of the Trust assets to revert to an Employer or to be used for, or diverted to, any purpose other than for the exclusive benefit of Participants and Beneficiaries entitled to Plan benefits and to defray reasonable expenses of administering the Plan; nor

(c) decrease the rights of any Employee to benefits accrued (including the elimination of optional forms of benefits) to the date on which the amendment is adopted, or if later, the date upon which the amendment becomes effective, except to the extent permitted under ERISA and the Code.

18.2 Merger

This Plan and Trust may not be merged or consolidated with, nor may its assets or liabilities be transferred to, another plan unless each Participant and Beneficiary would, if the resulting plan were then terminated, receive a benefit just after the merger, consolidation or transfer which is at least equal to the benefit which would be received if either plan had terminated just before such event.

18.3 Divestitures

In the event of a sale by an Employer which is a corporation of:
(1) substantially all of the Employer's assets used in a trade or business to an unrelated corporation, or (2) a sale of such Employer's interest in a subsidiary to an unrelated entity or individual, lump sum distributions shall be permitted from the Plan, except as provided below, to Participants with respect to Employees who continue employment with the corporation acquiring such assets or who continue employment with such subsidiary, as applicable.

44

Notwithstanding, distributions shall not be permitted if the purchaser agrees, in connection with the sale, to be substituted as the Company as the sponsor of the Plan or to accept a transfer of the assets and liabilities representing the Participants' benefits into a plan of the purchaser or a plan to be established by the purchaser.

18.4 Plan Termination

The Company may, at any time and for any reason, terminate the Plan in accordance with the procedures set forth in Section 18.5, or completely discontinue contributions. Upon either of these events, or in the event of a partial termination of the Plan within the meaning of Code section 411(d)(3), the Accounts of each affected Employee who has not yet incurred a Break in Service shall be fully vested. Lump sum distributions shall be made in accordance with the terms of the Plan as in effect at the time of the Plan's termination or as thereafter amended provided that a post- termination amendment shall not be effective to the extent that it violates Section 18.1 unless it is required in order to maintain the qualified status of the Plan upon its termination. The Trustee's and Employer's authority shall continue beyond the Plan's termination date until all Trust assets have been liquidated and distributed.

18.5 Amendment and Termination Procedures

The following procedural requirements shall govern the adoption of any amendment or termination (a "Change") of this Plan and Trust:

(a) The Company may adopt any Change by action of its board of directors in accordance with its normal procedures.

(b) The Committee, if acting as Administrator in accordance with
Section 14.6, may adopt any amendment within the scope of its authority provided under Section 18.1 and in the manner specified in Section 14.7(a).

(c) Any Change must be (1) set forth in writing, and (2) signed and dated by an authorized officer of the Company or, in the case of an amendment adopted by the Committee, at least one of its members.

(d) If the effective date of any Change is not specified in the document setting forth the Change, it shall be effective as of the date it is signed by the last person whose signature is required under clause (2) above, except to the extent that another effective date is necessary to maintain the qualified status of this Plan and Trust under Code sections 401(a) and 501(a).

(e) No Change affecting the Trustee in its capacity as Trustee or in any other capacity shall become effective until it is accepted and signed by the Trustee (which acceptance shall not unreasonably be withheld).

45

18.6 Termination of Employer's Participation

Any Employer may, at any time and for any reason, terminate its Plan participation by action of its board of directors in accordance with its normal procedures. Written notice of such action shall be signed and dated by an authorized officer of the Employer and delivered to the Company. If the effective date of such action is not specified, it shall be effective on, or as soon as reasonably practicable after, the date of delivery. Upon the Employer's request, the Company may instruct the Trustee and Administrator to spin off all affected Accounts and underlying assets into a separate qualified plan under which the Employer shall assume the powers and duties of the Company. Alternatively, the Company may treat the event as a partial termination described above or continue to maintain the Accounts under the Plan.

18.7 Replacement of the Trustee

The Trustee may resign as Trustee under this Plan and Trust or may be removed by the Company at any time upon at least 90 days written notice (or less if agreed to by both parties). In such event, the Company shall appoint a successor trustee by the end of the notice period. The successor trustee shall then succeed to all the powers and duties of the Trustee under this Plan and Trust. If no successor trustee has been named by the end of the notice period, the Company's chief executive officer shall become the trustee, or if he or she declines, the Trustee may petition the court for the appointment of a successor trustee.

18.8 Final Settlement and Accounting of Trustee

(a) Final Settlement. As soon as administratively feasible after its resignation or removal as Trustee, the Trustee shall transfer to the successor trustee all property currently held by the Trust. However, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its accounts and expenses in connection with the settlement of its accounts or other fees or expenses payable by the Trust. Any balance remaining after payment of such fees and expenses shall be paid to the successor trustee.

(b) Final Accounting. The Trustee shall provide a final accounting to the Administrator within 90 days of the date Trust assets are transferred to the successor trustee.

(c) Administrator Approval. Approval of the final accounting shall automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator.

46

APPENDIX A - INVESTMENT FUNDS

I. Investment Funds Available to Senior Participants

The Investment Funds offered under the Plan to Senior Participants as of the Effective Date include this set of daily valued funds:

CATEGORY                 FUNDS
--------                 -----

INCOME              U.S. Treasury Allocation
------

EQUITY              Company Stock
------
                    S&P 500 Stock
                    Aim Constellation

COMBINATION         LifePath
-----------

47

APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES

As of the Effective Date, payment of Plan fees and expenses shall be as follows:

1) Investment Management Fees: These are paid by Participants in that management fees reduce the investment return reported and credited to Participants, except that the Employer shall pay the fees related to the Company Stock Fund. These are paid by the Employer on a quarterly basis.

2) Recordkeeping Fees: These are paid by the Employer on a quarterly basis, except that with regard to a Participant who is no longer an Employee or a Beneficiary, these are paid by the Participant and are assessed monthly and billed/collected from Accounts quarterly.

3) Investment Fund Election Changes: For each Investment Fund election change by a Senior Participant, in excess of 4 changes per year, a $10 fee shall be assessed and billed/collected quarterly from the Senior Participant's Account.

4) Periodic Installment Payment Fees: A $3.00 per check fee shall be assessed and billed/collected quarterly from the Participant's Account.

5) Additional Fees Paid by Employer: All other Plan related fees and expenses shall be paid by the Employer. To the extent that the Administrator later elects that any such fees shall be borne by Participants, estimates of the fees shall be determined and reconciled, at least annually, and the fees shall be assessed monthly and billed/collected from Accounts quarterly.

48

AMENDMENT NO. 1
TO THE
SILICON VALLEY BANK
MONEY PURCHASE PENSION PLAN AND TRUST

WHEREAS, Silicon Valley Bank (the "Company"), approved and adopted the Silicon Valley Bank Money Purchase Pension Plan (the "Plan") and Trust Agreement (the "Trust") which were originally effective January 1, 1995 and most recently restated effective January 1, 1996;

WHEREAS, Section 18.1 of the Plan and Trust provides that the Company reserves the right to amend the Plan and Trust;

NOW THEREFORE RESOLVED, that Sections 1, 7 and 15 and Appendices A and B are amended effective May 28, 1996 as follows:

1. Section 1 is amended to hereby delete Subsection 1.40 and to redesignate each existing Subsection.

2. Section 7 is amended to restate the Heading thereof, to restate Subsections 7.1 and 7.2 each in its entirety including the Titles thereof and to add new Subsections 7.3, 7.4, 7.5 and 7.6 as follows:

7 INVESTMENT FUNDS AND ELECTIONS

7.1 Investment Funds

Except for Participants' Sweep Accounts, the Trust shall be maintained in various Investment Funds. The Administrator shall select the Investment Funds offered to Participants and may change the number or composition of the Investment Funds, subject to the terms and conditions agreed to with the Trustee. A list of the Investment Funds offered under the Plan is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, and as agreed to by the Trustee, without the necessity of amending this Plan and Trust. If the Company provides for a Company Stock Fund, the Administrator has the discretion to deny or restrict the availability of the Company Stock Fund to certain Participants in accordance with procedures prescribed by the Administrator to the extent such denial or restriction does not violate Code section 401(a).

7.2 Investment Fund Elections

Each Participant shall direct the investment of his or her Account. A Participant shall make his or her investment election in any combination of one or any number of the Investment Funds offered in accordance with the procedures established by the Administrator and Trustee. However, during any Conversion Period, Trust assets may be held in any investment vehicle permitted by the Plan, as directed by the Administrator, irrespective of Participant investment elections.

1

SILICON VALLEY BANK AMENDMENT NO. 1
MONEY PURCHASE PENSION PLAN AND TRUST

The Administrator may set a maximum percentage of the total election that a Participant may direct into any specific Investment Fund, which maximum, if any, is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

7.3 Responsibility for Investment Choice

Each Participant shall be solely responsible for the selection of his or her Investment Fund choices. No fiduciary with respect to the Plan is empowered to advise a Participant as to the manner in which his or her Accounts are to be invested, and the fact that an Investment Fund is offered shall not be construed to be a recommendation for investment.

7.4 Default if No Election

The Administrator shall specify an Investment Fund for the investment of that portion of a Participant's Account which is not yet held in an Investment Fund and for which no valid investment election is on file. The Investment Fund specified is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

7.5 Timing

A Participant shall make his or her initial investment election upon becoming a Participant and may change his or her investment election at any time in accordance with the procedures established by the Administrator and Trustee. Investment elections received by the Trustee by the Sweep Date shall be effective on the following Trade Date.

7.6 Investment Fund Election Change Fees

A reasonable processing fee may be charged directly to a Participant's Account for Investment Fund election changes in excess of a specified number per year as determined by the Administrator.

3. Section 15 is amended to restate Subsection 15.9 in its entirety as follows:

15.9 Maximum Permitted Investment in Company Stock

If the Company provides for a Company Stock Fund, the Fund shall be comprised of Company Stock and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs. The Fund may be as large as necessary to comply with Participants' and Beneficiaries' investment elections.

2

SILICON VALLEY BANK                                             AMENDMENT NO. 1
MONEY PURCHASE PENSION PLAN TRUST

   4.   Appendix A is amended to restate in its entirety in the form attached
        hereto.

5. Appendix B is amended to restate item 3) in its entirety as follows:

3) Investment Fund Election Changes: For each Investment Fund election change by a Participant, in excess of 4 changes per year, a $10 fee shall be assessed and billed/collected quarterly from the Participant's Account.

Date: May 28, 1996                  SILICON VALLEY BANK


                                    By:    /s/ Glen G. Simmons
                                       --------------------------------------
                                       Title: Executive V.P. Human Resources/
                                              Administration

The provisions of the above amendment which relate to the Trustee are hereby approved and executed.

 Date: May 30,1996                   BZW BARCLAYS GLOBAL INVESTORS, NATIONAL
                                     ASSOCIATION

                                     By:  /s/ Dolores Upton
                                        --------------------------------------
                                        Title: Principal


 Date: May 30, 1996                  BZW BARCLAYS GLOBAL INVESTORS, NATIONAL
                                     ASSOCIATION

                                     By: /s/ Lisa M. Maloney
                                        --------------------------------------
                                        Title: Principal

                                     3

SILICON VALLEY BANK                                            AMENDMENT NO. 1
MONEY PURCHASE PENSION PLAN AND TRUST

APPENDIX A - INVESTMENT FUNDS

I. Investment Funds Available

The Investment Funds offered under the Plan include this set of daily valued funds:

CATEGORY                                FUNDS
--------                                -----

INCOME              U.S. Treasury Allocation
------

EQUITY              Company Stock
------              S&P 500 Stock
                    Aim Constellation

COMBINATION         LifePath
-----------

II. Default Investment Fund

The default Investment Fund is the U.S. Treasury Allocation Fund.

III. Maximum Percentage Restrictions Applicable to Certain Investment Funds

A Participant or Beneficiary may not elect to invest more than the following percentages in these Investment Funds:

Company Stock Fund 25%

47 05/01/96


EXHIBIT 10.31

SILICON VALLEY BANK

401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN

PLAN AND TRUST AGREEMENT

AS AMENDED AND RESTATED
EFFECTIVE MARCH 1, 1995


Silicon Valley Bank 401(k) and Employee Stock Ownership Plan and Trust

As Amended and Restated Effective March 1, 1995

Silicon Valley Bank previously established the Silicon Valley Bancshares Employee Stock Ownership Plan, intended to constitute a qualified stock bonus plan, as described in Code section 401(a), and the Silicon Valley Bank 401(k) Plan, intended to constitute a qualified profit sharing plan as described in Code section 401(a), including a qualified cash or deferred arrangement, as described in Code section 401(k), effective January 1, 1989 and January 1, 1985, respectively. Each plan together with its related trust was established for the benefit of eligible employees of the Company and its participating affiliates.

Effective March 1, 1995, the Silicon Valley Bancshares Employee Stock Ownership Plan was merged into the Silicon Valley Bank 401(k) Plan and the merged plan was restated and renamed the Silicon Valley Bank 401(k) and Employee Stock Ownership Plan. The Plan is intended to constitute a qualified profit sharing plan, as described in Code section 401(a), which includes a qualified cash or deferred arrangement, as described in Code section 401(k).

The provisions of this Plan and Trust relating to the Trustee constitute the trust agreement which is entered into by and between Silicon Valley Bank and Wells Fargo Bank, National Association. The Trust is intended to be tax exempt as described under Code section 501(a).

Date: October 11, 1995                Silicon Valley Bank


                                      By:  /s/ Glen G. Simmons
                                         --------------------------------------
                                         Title: Executive Vice President -
                                                Human Resources

The trust agreement set forth in those provisions of this Plan and Trust which relate to the Trustee is hereby executed.

Date: November 10, 1995               Wells Fargo Bank, National Association


                                      By: /s/ Lisa M. Maloney
                                         --------------------------------------
                                         Title: Vice President

Date: November 10, 1995               Wells Fargo Bank, National Association


                                      By:  /s/ Gwyn E. Slack
                                         --------------------------------------
                                         Title: Vice President


TABLE OF CONTENTS

1   DEFINITIONS..........................................................    1
    -----------

2   ELIGIBILITY..........................................................    9
    -----------
      2.1   Eligibility..................................................    9
      2.2   Ineligible Employees.........................................    9
      2.3   Ineligible or Former Participants............................    9

3   PARTICIPANT CONTRIBUTIONS............................................   10
    -------------------------
      3.1   Employee Contribution Election...............................   10
      3.2   Changing a Contribution Election.............................   10
      3.3   Revoking and Resuming a Contribution Election................   10
      3.4   Contribution Percentage Limits...............................   10
      3.5   Refunds When Contribution Dollar Limit Exceeded..............   11
      3.6   Timing, Posting and Tax Considerations.......................   11

4   ROLLOVERS AND TRANSFERS FROM OTHER QUALIFIED PLANS...................   12
    --------------------------------------------------
      4.1   Rollovers....................................................   12
      4.2   Transfers From Other Qualified Plans.........................   12

5   EMPLOYER CONTRIBUTIONS AND FORFEITURE ACCOUNT ALLOCATIONS............   13
    ---------------------------------------------------------
      5.1   Company Match Contributions and
            Company Match Forfeiture Account Allocations.................   13
      5.2   ESOP Contributions and ESOP Forfeiture Account Allocations...   14

6   ACCOUNTING...........................................................   16
    ----------
      6.1   Individual Participant Accounting............................   16
      6.2   Sweep Account is Transaction Account.........................   16
      6.3   Trade Date Accounting and Investment Cycle...................   16
      6.4   Accounting for Investment Funds..............................   16
      6.5   Payment of Fees and Expenses.................................   16
      6.6   Accounting for Participant Loans.............................   17
      6.7   Error Correction.............................................   17
      6.8   Participant Statements.......................................   18
      6.9   Special Accounting During Conversion Period..................   18
      6.10  Accounts for QDRO Beneficiaries..............................   18

7   INVESTMENT FUNDS AND ELECTIONS.......................................   19
    ------------------------------
      7.1   Investment Funds.............................................   19
      7.2   Investment Fund Elections....................................   19
      7.3   Responsibility for Investment Choice.........................   20
      7.4   Default if No Election.......................................   20
      7.5   Timing.......................................................   20
      7.6   Investment Fund Election Change Fees.........................   20

i

 8   VESTING & FORFEITURES................................................   21
     ---------------------
       8.1   Fully Vested Contribution Accounts...........................   21
       8.2   Full Vesting upon Certain Events.............................   21
       8.3   Vesting Schedule.............................................   21
       8.4   Forfeitures..................................................   21
       8.5   Rehired Employees............................................   22

 9   PARTICIPANT LOANS....................................................   23
     -----------------
       9.1   Participant Loans Permitted..................................   23
       9.2   Loan Application, Note and Security..........................   23
       9.3   Spousal Consent..............................................   23
       9.4   Loan Approval................................................   23
       9.5   Loan Funding Limits, Account Sources and Funding Order.......   23
       9.6   Maximum Number of Loans......................................   24
       9.7   Source and Timing of Loan Funding............................   24
       9.8   Interest Rate................................................   24
       9.9   Loan Payment.................................................   24
       9.10  Loan Payment Hierarchy.......................................   25
       9.11  Repayment Suspension.........................................   25
       9.12  Loan Default.................................................   25
       9.13  Call Feature.................................................   25

10   IN-SERVICE WITHDRAWALS...............................................   26
     ----------------------
      10.1   In-Service Withdrawals Permitted.............................   26
      10.2   In-Service Withdrawal Application and Notice.................   26
      10.3   Spousal Consent..............................................   26
      10.4   In-Service Withdrawal Approval...............................   26
      10.5   Minimum Amount, Payment Form and Medium......................   26
      10.6   Source and Timing of In-Service Withdrawal Funding...........   27
      10.7   Hardship Withdrawals.........................................   27
      10.8   Over Age 59 1/2 Withdrawals..................................   29

11   DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW.............   30
     --------------------------------------------------------
      11.1   Benefit Information, Notices and Election....................   30
      11.2   Spousal Consent..............................................   30
      11.3   Payment Form and Medium......................................   30
      11.4   Distribution of Small Amounts................................   31
      11.5   Source and Timing of Distribution Funding....................   31
      11.6   Deemed Distribution..........................................   31
      11.7   Latest Commencement Permitted................................   32
      11.8   Payment Within Life Expectancy...............................   32
      11.9   Incidental Benefit Rule......................................   32
      11.10  Payment to Beneficiary.......................................   33
      11.11  Beneficiary Designation......................................   33
      11.12  QJSA and QPSA Annuity Information and Elections..............   33

ii

12   ADP AND ACP TESTS....................................................   36
     -----------------
      12.1   Contribution Limitation Definitions..........................   36
      12.2   ADP and ACP Tests............................................   38
      12.3   Correction of ADP and ACP Tests..............................   39
      12.4   Multiple Use Test............................................   40
      12.5   Correction of Multiple Use Test..............................   40
      12.6   Adjustment for Investment Gain or Loss.......................   41
      12.7   Testing Responsibilities and Required Records................   41
      12.8   Separate Testing.............................................   41

13   MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS.........................   42
     --------------------------------------------
      13.1   "Annual Addition" Defined....................................   42
      13.2   Maximum Annual Addition......................................   42
      13.3   Avoiding an Excess Annual Addition...........................   42
      13.4   Correcting an Excess Annual Addition.........................   42
      13.5   Correcting a Multiple Plan Excess............................   43
      13.6   "Defined Benefit Fraction" Defined...........................   43
      13.7   "Defined Contribution Fraction" Defined......................   43
      13.8   Combined Plan Limits and Correction..........................   43

14   TOP HEAVY RULES......................................................   44
     ---------------
      14.1   Top Heavy Definitions........................................   44
      14.2   Special Contributions........................................   45
      14.3   Adjustment to Combined Limits for Different Plans............   46

15   PLAN ADMINISTRATION..................................................   47
     -------------------
      15.1   Plan Delineates Authority and Responsibility.................   47
      15.2   Fiduciary Standards..........................................   47
      15.3   Company is ERISA Plan Administrator..........................   47
      15.4   Administrator Duties.........................................   48
      15.5   Advisors May be Retained.....................................   48
      15.6   Delegation of Administrator Duties...........................   49
      15.7   Committee Operating Rules....................................   49

16   MANAGEMENT OF INVESTMENTS............................................   50
     -------------------------
      16.1   Trust Agreement..............................................   50
      16.2   Investment Funds.............................................   50
      16.3   Authority to Hold Cash.......................................   51
      16.4   Trustee to Act Upon Instructions.............................   51
      16.5   Administrator Has Right to
              Vote Registered Investment Company Shares...................   51
      16.6   Custom Fund Investment Management............................   51
      16.7   Authority to Segregate Assets................................   52
      16.8   Maximum Permitted Investment in Company Stock................   52
      16.9   Participants Have Right to Vote and Tender Company Stock.....   52
      16.10  Registration and Disclosure for Company Stock................   53

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17   TRUST ADMINISTRATION.................................................   54
     --------------------
      17.1   Trustee to Construe Trust....................................   54
      17.2   Trustee To Act As Owner of Trust Assets......................   54
      17.3   United States Indicia of Ownership...........................   54
      17.4   Tax Withholding and Payment..................................   55
      17.5   Trust Accounting.............................................   55
      17.6   Valuation of Certain Assets..................................   55
      17.7   Legal Counsel................................................   56
      17.8   Fees and Expenses............................................   56
      17.9   Trustee Duties and Limitations...............................   56

18   RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION....................   57
     -------------------------------------------------
      18.1   Plan Does Not Affect Employment Rights.......................   57
      18.2   Limited Return of Contributions..............................   57
      18.3   Assignment and Alienation....................................   57
      18.4   Facility of Payment..........................................   58
      18.5   Reallocation of Lost Participant's Accounts..................   58
      18.6   Claims Procedure.............................................   58
      18.7   Construction.................................................   59
      18.8   Jurisdiction and Severability................................   59
      18.9   Indemnification by Employer..................................   59

19   AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
     -----------------------------------------------

      19.1   Amendment....................................................   60
      19.2   Merger.......................................................   60
      19.3   Divestitures.................................................   60
      19.4   Plan Termination.............................................   61
      19.5   Amendment and Termination Procedures.........................   61
      19.6   Termination of Employer's Participation......................   62
      19.7   Replacement of the Trustee...................................   62
      19.8   Final Settlement and Accounting of Trustee...................   62

APPENDIX A - INVESTMENT FUNDS.............................................   64

APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES............................   65

APPENDIX C - LOAN INTEREST RATE...........................................   66

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1 DEFINITIONS

When capitalized, the words and phrases below have the following meanings unless different meanings are clearly required by the context:

1.1 "Account". The records maintained for purposes of accounting for a Participant's interest in the Plan. "Account" may refer to one or all of the following accounts which have been created on behalf of a Participant to hold specific types of Contributions under the Plan or predecessor plans as merged herein as of the Effective Date:

(a) "Employee Account". An account created to hold Employee Contributions.

(b) "Rollover Account". An account created to hold Rollover Contributions.

(c) "Prior ESOP Rollover Account". An account created to hold amounts representing Rollover Contributions contributed to the Silicon Valley Bancshares Employee Stock Ownership Plan.

(d) "Company Match Account". An account created to hold Company Match Contributions for periods commencing on or after March 1, 1995.

(e) "Prior Match Account" An account created to hold Company Match Contributions for periods commencing prior to March 1, 1995.

(f) "ESOP Account". An account created to hold ESOP Contributions.

1.2 "ACP" or "Average Contribution Percentage". The percentage calculated in accordance with Section 12.1.

1.3 "Administrator". The Company, which may delegate all or a portion of the duties of the Administrator under the Plan to a Committee in accordance with Section 15.6.

1.4 "ADP" or "Average Deferral Percentage". The percentage calculated in accordance with Section 12.1.

1.5 "Beneficiary". The person or persons who is to receive benefits after the death of the Participant pursuant to the "Beneficiary Designation" paragraph in Section 11, or as a result of a QDRO.

1.6 "Break in Service". The fifth anniversary (or sixth anniversary if absence from employment was due to a Parental Leave) of the date on which a Participant's employment ends.

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1.7 "Code". The Internal Revenue Code of 1986, as amended. Reference to any specific Code section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

1.8 "Committee". If applicable, the committee which has been appointed by the Company to administer the Plan in accordance with Section 15.6.

1.9 "Company". Silicon Valley Bank or any successor by merger, purchase or otherwise.

1.10 "Company Stock". Shares of common stock of Silicon Valley Bancshares, the parent company of the Company, its predecessor(s), or its successors or assigns, or any corporation with or into which said corporation may be merged, consolidated or reorganized, or to which a majority of its assets may be sold.

1.11 "Compensation". The sum of a Participant's Taxable Income and salary reductions, if any, pursuant to Code sections 125, 402(e)(3),
402(h), 403(b), 414(h)(2) or 457.

For purposes of determining benefits under this Plan, Compensation is limited to $150,000, (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year. For purposes of the preceding sentence, in the case of an HCE who is a 5% Owner or one of the 10 most highly compensated Employees, (i) such HCE and such HCE's family group (as defined below) shall be treated as a single employee and the Compensation of each family group member shall be aggregated with the Compensation of such HCE, and (ii) the limitation on Compensation shall be allocated among such HCE and his or her family group members in proportion to each individual's Compensation before the application of this sentence. For purposes of this Section, the term "family group" shall mean an Employee's spouse and lineal descendants who have not attained age 19 before the close of the year in question.

For purposes of determining HCEs and key employees, Compensation for the entire Plan Year shall be used. For purposes of determining ADP and ACP, Compensation shall be limited to amounts paid to an Eligible Employee while a Participant.

1.12 "Contribution". An amount contributed to the Plan by the Employer or an Eligible Employee, and allocated by contribution type to Participants' Accounts, as described in Section 1.1. Specific types of contribution include:

(a) "Employee Contribution". An amount contributed by an eligible Participant in conjunction with his or her Code section 401(k) salary deferral election which shall be treated as made by the Employer on an eligible Participant's behalf.

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(b) "Rollover Contribution". An amount contributed by an Eligible Employee which originated from another employer's or an Employer's qualified plan.

(c) "Company Match Contribution". An amount contributed by the Employer on an eligible Participant's behalf based upon the amount contributed by the eligible Participant.

(d) "ESOP Contribution". An amount contributed by the Employer on an eligible Participant's behalf and allocated on a pay based formula.

1.13 "Contribution Dollar Limit". The annual limit placed on each Participant's Employee Contributions, which shall be $7,000 per calendar year (as adjusted for the cost of living pursuant to Code sections 402(g)(5) and 415(d)). For purposes of this Section, a Participant's Employee Contributions shall include (i) any employer contribution made under any qualified cash or deferred arrangement as defined in Code section 401(k) to the extent not includible in gross income for the taxable year under Code section 402(e)(3) or
402(h)(1)(B) (determined without regard to Code section 402(g)), and
(ii) any employer contribution to purchase an annuity contract under Code section 403(b) under a salary reduction agreement (within the meaning of Code section 3121(a)(5)(D)).

1.14 "Conversion Period". The period of converting the prior accounting system of the Plan and Trust, if such Plan and Trust were in existence prior to the Effective Date, or the prior accounting system of any plan and trust which is merged into this Plan and Trust subsequent to the Effective Date, to the accounting system described in Section 6.

1.15 "Direct Rollover". An Eligible Rollover Distribution that is paid directly to an Eligible Retirement Plan for the benefit of a Distributee.

1.16 "Disability". A Participant's mental or physical disability resulting in termination of employment as evidenced by presentation of medical evidence satisfactory to the Administrator.

1.17 "Distributee". An Employee or former Employee, the surviving spouse of an Employee or former Employee and a spouse or former spouse of an Employee or former Employee determined to be an alternate payee under a QDRO.

1.18 "Early Retirement Date". The date of a Participant's 55th birthday and completion of 10 Years of Vesting Service.

1.19 "Effective Date". The date upon which the provisions of this document become effective. This date is March 1, 1995, unless stated otherwise. In general, the provisions of this document only apply to Participants who are Employees on or after the Effective Date. However, investment and distribution provisions apply to all Participants with Account balances to be invested or distributed after the Effective Date.

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1.20 "Eligible Employee". An Employee of an Employer, except any Employee:

(a) whose compensation and conditions of employment are covered by a collective bargaining agreement to which an Employer is a party unless the agreement calls for the Employee's participation in the Plan;

(b) who is treated as an Employee because he or she is a Leased Employee; or

(c) who is a nonresident alien who (i) either receives no earned income (within the meaning of Code section 911(d)(2)), from sources within the United States under Code section 861(a)(3); or (ii) receives such earned income from such sources within the United States but such income is exempt from United States income tax under an applicable income tax convention.

1.21 "Eligible Retirement Plan". An individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section
401(a), that accepts a Distributee's Eligible Rollover Distribution, except that with regard to an Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity.

1.22 "Eligible Rollover Distribution". A distribution of all or any portion of the balance to the credit of a Distributee, excluding a distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of a Distributee or the joint lives (or joint life expectancies) of a Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; a distribution to the extent such distribution is required under Code section 401(a)(9); and the portion of a distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities).

1.23 "Employee". An individual who is:

(a) directly employed by any Related Company and for whom any income for such employment is subject to withholding of income or social security taxes, or

(b) a Leased Employee.

1.24 "Employer". The Company and any Related Company which adopts this Plan with the approval of the Company.

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1.25 "ERISA". The Employee Retirement Income Security Act of 1974, as amended. Reference to any specific section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.

1.26 "Forfeiture Account". An account holding amounts forfeited by Participants who have left the Employer, invested in interest bearing deposits of the Trustee, pending disposition as provided in this Plan and Trust and as directed by the Administrator.

1.27 "HCE" or "Highly Compensated Employee". An Employee described as a Highly Compensated Employee in Section 12.

1.28 "Ineligible". The Plan status of an individual during the period in which he or she is (1) an Employee of a Related Company which is not then an Employer, (2) an Employee, but not an Eligible Employee, or
(3) not an Employee.

1.29 "Investment Fund" or "Fund". An investment fund as described in
Section 16.2. The Investment Funds authorized by the Administrator to be offered under the Plan as of the Effective Date are set forth in Appendix A.

1.30 "Leased Employee". An individual who is deemed to be an employee of any Related Company as provided in Code section 414(n) or (o).

1.31 "Leave of Absence". A period during which an individual is deemed to be an Employee, but is absent from active employment, provided that the absence:

(a) was authorized by a Related Company; or

(b) was due to military service in the United States armed forces and the individual returns to active employment within the period during which he or she retains employment rights under federal law.

1.32 "Loan Account". The record maintained for purposes of accounting for a Participant's loan and payments of principal and interest thereon.

1.33 "NHCE" or "Non-Highly Compensated Employee". An Employee described as a Non-Highly Compensated Employee in Section 12.

1.34 "Normal Retirement Date". The date of a Participant's 62nd birthday.

1.35 "Owner". A person with an ownership interest in the capital, profits, outstanding stock or voting power of a Related Company within the meaning of Code section 318 or 416 (which exclude indirect ownership through a qualified plan).

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1.36 "Parental Leave". The period of absence from work by reason of pregnancy, the birth of an Employee's child, the placement of a child with the Employee in connection with the child's adoption, or caring for such child immediately after birth or placement as described in Code section 410(a)(5)(E).

1.37 "Participant". An Eligible Employee who begins to participate in the Plan after completing the eligibility requirements as described in
Section 2.1 or such eligibility requirements as were in effect prior to the Effective Date under this Plan or predecessor plans as merged herein as of the Effective Date. An Eligible Employee who makes a Rollover Contribution prior to completing the eligibility requirements as described in Section 2.1 shall also be considered a Participant, except that he or she shall not be considered a Participant for purposes of provisions related to Contributions, other than a Rollover Contribution, until he or she completes the eligibility requirements as described in Section 2.1. A Participant's participation continues until his or her employment with all Related Companies ends and his or her Account is distributed or forfeited.

1.38 "Pay". All cash compensation paid to an Eligible Employee by an Employer while a Participant during the current period, except that for purposes of ESOP Contributions, "All cash compensation, excluding incentive pay (annual incentive awards, referral fees and other recognition/achievement awards)" shall be substituted for the preceding reference to "All cash compensation". Pay excludes reimbursements or other expense allowances, cash and non-cash fringe benefits, moving expenses, deferred compensation and welfare benefits.

Pay is neither increased by any salary credit or decreased by any salary reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited to $150,000 (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year.

For purposes of the Contributions described in Section 5.2, the limitations as described in the second paragraph of Section 1.11 shall also apply.

1.39 "Period of Employment". The period beginning on the date an Employee first performs an hour of service and ending on the date his or her employment ends. Employment ends on the date the Employee quits, retires, is discharged, dies or (if earlier) the first anniversary of his or her absence for any other reason. The period of absence starting with the date an Employee's employment temporarily ends and ending on the date he or she is subsequently reemployed is (1) included in his or her Period of Employment if the period of absence does not exceed one year, and (2) excluded if such period exceeds one year.

Period of Employment includes the period prior to a Break in Service.

An Employee's service with a predecessor or acquired company shall only be counted in the determination of his or her Period of Employment for eligibility

6

and/or vesting purposes if (1) the Company directs that credit for such service be granted, or (2) a qualified plan of the predecessor or acquired company is subsequently maintained by any Employer or Related Company.

1.40 "Plan". The Silicon Valley Bank 401(k) and Employee Stock Ownership Plan set forth in this document, as from time to time amended.

1.41 "Plan Year". The annual accounting period of the Plan and Trust which ends on each December 31.

1.42 "QDRO". A domestic relations order which the Administrator has determined to be a qualified domestic relations order within the meaning of Code section 414(p).

1.43 "Reduction in Force". An Employer sponsored program developed to reduce force on a permanent basis.

1.44 "Related Company". With respect to any Employer, that Employer and any corporation, trade or business which is, together with that Employer, a member of the same controlled group of corporations, a trade or business under common control, or an affiliated service group within the meaning of Code sections 414(b), (c), (m) or (o) and except that for purposes of Section 13 "within the meaning of Code sections 414(b), (c), (m) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to "within the meaning of Code section 414(b), (c), (m) or (o)".

1.45 "Settlement Date". For each Trade Date, the Trustee's next business day.

1.46 "Spousal Consent". The written consent given by a spouse to a Participant's election or waiver of a specified form of benefit or Beneficiary designation. The spouse's consent must acknowledge the effect on the spouse of the Participant's election, waiver or designation, and be duly witnessed by a Plan representative or notary public. Spousal Consent shall be valid only with respect to the spouse who signs the Spousal Consent and only for the particular choice made by the Participant which requires Spousal Consent. A Participant may revoke (without Spousal Consent) a prior election, waiver or designation that required Spousal Consent at any time before payments begin. Spousal Consent also means a determination by the Administrator that there is no spouse, the spouse cannot be located, or such other circumstances as may be established by applicable law.

1.47 "Sweep Account". The subsidiary Account for each Participant through which all transactions are processed, which is invested in interest bearing deposits of the Trustee.

1.48 "Sweep Date". The cut off date and time for receiving instructions for transactions to be processed on the next Trade Date.

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1.49 "Taxable Income". Compensation in the amount reported by the Employer or a Related Company as "Wages, tips, other compensation" on Form W-2, or any successor method of reporting under Code section 6041(d).

1.50 "Trade Date". Each day the Investment Funds are valued, which is normally every day the assets of such Funds are traded.

1.51 "Trust". The legal entity created by those provisions of this document which relate to the Trustee. The Trust is part of the Plan and holds the Plan assets which are comprised of the aggregate of Participants' Accounts, any unallocated funds invested in deposit or money market type assets pending allocation to Participants' Accounts or disbursement to pay Plan fees and expenses and the Forfeiture Account.

1.52 "Trustee". Wells Fargo Bank, National Association.

1.53 "Year of Vesting Service". A 12 month Period of Employment.

Notwithstanding, Years of Vesting Service shall be calculated as follows if (and only if) it would be of benefit to the Employee:

(a) For service from January 1, 1995, each 12 month Period of Employment;

(b) For the period before January 1, 1995, a 12 consecutive month period ending on the anniversary of the date an individual became an Employee, or as that date may be adjusted as a result of his or her termination of employment with all related Companies and subsequent rehire as an Employee, in which an Employee is credited with at least 1,000 hours of service, as such term was defined for this purpose prior to January 1, 1995.

Years of Vesting Service shall include service credited prior to January 1, 1985.

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2 ELIGIBILITY

2.1 Eligibility

All Participants as of March 1, 1995 shall continue their eligibility to participate. Each other Eligible Employee shall become a Participant on March 1, 1995 or thereafter, on the first January 1, April 1, July 1 or October 1 after the date he or she attains age 18, and completes one hour of service.

2.2 Ineligible Employees

If an Employee completes the above eligibility requirements, but is Ineligible at the time participation would otherwise begin (if he or she were not Ineligible), he or she shall become a Participant on the first subsequent date on which he or she is an Eligible Employee.

2.3 Ineligible or Former Participants

A Participant may not make or share in Plan Contributions, nor generally be eligible for a new Plan loan, during the period he or she is Ineligible, but he or she shall continue to participate for all other purposes. An Ineligible Participant or former Participant shall automatically become an active Participant on the date he or she again becomes an Eligible Employee.

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3 PARTICIPANT CONTRIBUTIONS

3.1 Employee Contribution Election

Upon becoming a Participant, an Eligible Employee may elect to reduce his or her Pay by an amount which does not exceed the Contribution Dollar Limit, within the limits described in the Contribution Percentage Limits paragraph of this Section 3, and have such amount contributed to the Plan by the Employer as a Employee Contribution. The election shall be made as a whole percentage of Pay or a fixed dollar amount of Pay in such manner and with such advance notice as prescribed by the Administrator. A Participant who makes a fixed dollar amount of Pay election shall do so with full knowledge that such election shall not apply to any portion of his or her Pay attributable to incentive pay (annual incentive awards, referral fees and other recognition/achievement awards). In no event shall an Employee's Employee Contributions under the Plan and comparable contributions to all other plans, contracts or arrangements of all Related Companies exceed the Contribution Dollar Limit for the Employee's taxable year beginning in the Plan Year.

3.2 Changing a Contribution Election

A Participant who is an Eligible Employee may change his or her Employee Contribution election as of any January 1, April 1, July 1 or October 1 in such manner and with such advance notice as prescribed by the Administrator, and such election shall be effective with the first payroll paid after such date.
Participants' Contribution election percentages shall automatically apply to Pay increases or decreases.

3.3 Revoking and Resuming a Contribution Election

A Participant may revoke his or her Contribution election at any time in such manner and with such advance notice as prescribed by the Administrator, and such revocation shall be effective with the first payroll paid after such date.

A Participant who is an Eligible Employee may resume Contributions by making a new Contribution election at the same time in which a Participant may change his or her election in such manner and with such advance notice as prescribed by the Administrator, and such election shall be effective with the first payroll paid after such date.

3.4 Contribution Percentage Limits

The Administrator may establish and change from time to time, in writing, without the necessity of amending this Plan and Trust, the minimum, if applicable, and maximum Employee Contribution percentages, prospectively or retrospectively (for the current Plan Year), for all Participants. In addition, the Administrator may establish any lower percentage limits for Highly

10

Compensated Employees as it deems necessary to satisfy the tests described in Section 12. As of the Effective Date, the Employee Contribution maximum percentage is 15%.

Irrespective of the limits that may be established by the Administrator in accordance with this paragraph, in no event shall the contributions made by or on behalf of a Participant for a Plan Year exceed the maximum allowable under Code section 415.

3.5 Refunds When Contribution Dollar Limit Exceeded

A Participant who makes Employee Contributions for a calendar year to this Plan and comparable contributions to any other qualified defined contribution plan in excess of the Contribution Dollar Limit may notify the Administrator in writing by the following March 1 (or as late as April 14 if allowed by the Administrator) that an excess has occurred. In this event, the amount of the excess specified by the Participant, adjusted for investment gain or loss, shall be refunded to him or her by April 15 and shall not be included as an Annual Addition under Code section 415 for the year contributed. Refunds shall not include investment gain or loss for the period between the end of the applicable Plan Year and the date of distribution. Excess amounts shall first be taken from unmatched Employee Contributions and then from matched Employee Contributions. Any Company Match Contributions attributable to refunded excess Employee Contributions as described in this Section shall be forfeited and used as described in Section 8.4.

3.6 Timing, Posting and Tax Considerations

Participants' Contributions, other than Rollover Contributions, may only be made through payroll deduction. Such amounts shall be paid to the Trustee in cash and posted to each Participant's Account(s) as soon as such amounts can reasonably be separated from the Employer's general assets and balanced against the specific amount made on behalf of each Participant. In no event, however, shall such amounts be paid to the Trustee more than 90 days after the date amounts are deducted from a Participant's Pay. Employee Contributions shall be treated as Contributions made by an Employer in determining tax deductions under Code section 404(a).

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4 ROLLOVERS AND TRANSFERS FROM OTHER QUALIFIED PLANS

4.1 Rollovers

The Administrator may authorize the Trustee to accept a rollover contribution, within the meaning of Code section 402(c) or
408(d)(3)(A)(ii), in cash, directly from an Eligible Employee or as a Direct Rollover from another qualified plan on behalf of the Eligible Employee, even if he or she is not yet a Participant. The Employee shall be responsible for furnishing satisfactory evidence, in such manner as prescribed by the Administrator, that the amount is eligible for rollover treatment. A rollover contribution received directly from an Eligible Employee must be paid to the Trustee in cash within 60 days after the date received by the Eligible Employee from a qualified plan or conduit individual retirement account. Contributions described in this paragraph shall be posted to the applicable Employee's Rollover Account as of the date received by the Trustee.

If it is later determined that an amount contributed pursuant to the above paragraph did not in fact qualify as a rollover contribution under Code section 402(c) or 408(d)(3)(A)(ii), the balance credited to the Employee's Rollover Account shall immediately be (1) segregated from all other Plan assets, (2) treated as a nonqualified trust established by and for the benefit of the Employee, and (3) distributed to the Employee. Any such nonqualifying rollover shall be deemed never to have been a part of the Plan.

4.2 Transfers From Other Qualified Plans

The Administrator may instruct the Trustee to receive assets in cash or in kind directly from another qualified plan; provided that a transfer should not be directed if:

(a) any amounts are not exempted by Code section 401(a)(11)(B) from the annuity requirements of Code section 417 unless the Plan complies with such requirements; or

(b) any amounts include benefits protected by Code section 411(d)(6) which would not be preserved under applicable Plan provisions.

The Trustee may refuse the receipt of any transfer if:

(a) the Trustee finds the in-kind assets unacceptable; or

(b) instructions for posting amounts to Participants' Accounts are incomplete.

Such amounts shall be posted to the appropriate Accounts of Participants as of the date received by the Trustee.

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5 EMPLOYER CONTRIBUTIONS AND FORFEITURE ACCOUNT ALLOCATIONS

5.1 Company Match Contributions and Company Match Forfeiture Account Allocations

(a) Frequency and Eligibility. For each period for which Participants' Contributions are made, the Employer shall make Company Match Contributions, as described in the following Allocation Method paragraph, on behalf of each Participant who contributed during the period.

Effective January 1, 1995, for each Plan Year, the Employer shall allocate any Forfeiture Account balance remaining as of the end of the Plan Year attributable to forfeited Company Match Account amounts and earnings thereon, as Company Match Contributions on behalf of each Participant who contributed during the period and therefore received an allocation of Company Match Contributions and who was an Eligible Employee on the last day of the period. Such an allocation shall also be made on behalf of each Participant who contributed during the period but who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date, or by reason of his or her Disability or death.

(b) Allocation Method. The Company Match Contributions for each period shall total 100% of each eligible Participant's Employee Contributions for the period. Notwithstanding, the maximum dollar match (not including Forfeiture Account amounts allocated as Company Match Contributions) shall not exceed $1,000 for the Plan Year. The Employer may change the 100% matching rate to any other percentage, including 0%,or the maximum dollar match, generally by notifying eligible Participants in sufficient time to adjust their Contribution elections prior to the start of the period for which the new percentage or amount apply.

Forfeiture Account amounts to be allocated as Company Match Contributions shall be allocated among eligible Participants in direct proportion to each eligible Participant's Employee Contributions for the Plan Year to the total Employee Contributions for the Plan Year for all such eligible Participants.

(c) Timing, Medium and Posting. The Employer shall make each period's Company Match Contribution in cash and allocate Forfeiture Account amounts as soon as administratively feasible, and for purposes of deducting such Company Match Contribution, not later than the Employer's federal tax filing date, including extensions. The Trustee shall post such amounts to each Participant's Company Match Account

13

once the total Contribution received or Forfeiture Account amount to be allocated has been balanced against the specific amount to be credited to each Participant's Company Match Account.

5.2 ESOP Contributions and ESOP Forfeiture Account Allocations

(a) Frequency and Eligibility. Subject to determination made by the Employer's board of directors, or duly authorized committee appointed by the Employer's board of directors, for each quarter of the Plan Year, the Employer shall make ESOP Contributions on behalf of each Participant who was an Eligible Employee on the last day of the quarter and for each Plan Year the Employer may make additional ESOP Contributions on behalf of each Participant who was an Eligible Employee on the last day of the Plan Year. If such Contributions are made, such Contributions shall also be made on behalf of each Participant who was an Eligible Employee at any time during the applicable period (quarter or Plan Year) but who ceased being an Employee during the applicable period (quarter or Plan Year) after having attained his or her Early Retirement Date, Normal Retirement Date, or by reason of his or her Disability or death.

Notwithstanding, the Employer reserves the right to suspend quarterly ESOP Contributions which were otherwise authorized by the Employer's board of directors, or duly authorized committee appointed by the Employer's board of directors, in the event of adverse business conditions incurred subsequent to the authorization of such quarterly ESOP Contributions or other good cause.

For each Plan Year, the Employer shall allocate any Forfeiture Account balance remaining as of the end of the Plan Year attributable to forfeited ESOP Account amounts and earnings thereon, as ESOP Contributions on behalf of each Participant who was an Eligible Employee on the last day of the period. Such an allocation shall also be made on behalf of each Participant who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date, or by reason of his or her Disability or death.

(b) Allocation Method. The ESOP Contributions for each quarter, shall be equal to a specified percentage, including 0% and up to 5%, of each eligible Participant's Pay. As of the Effective Date, the specified percentage is 5%. The ESOP Contributions for each Plan Year, shall be equal to a specified percentage, including 0% and up to 10%, of each eligible Participant's Pay. Together, the quarterly and annual ESOP Contribution (not including Forfeiture Account amounts allocated as ESOP Contributions), shall not exceed 15% of each eligible Participant's Pay.

Forfeiture Account amounts to be allocated as ESOP Contributions shall be allocated among eligible Participants in direct proportion to their Pay.

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(c) Timing, Medium and Posting. The Employer shall make each period's ESOP Contribution in cash and allocate Forfeiture Account amounts as soon as administratively feasible, and for purposes of deducting such ESOP Contribution, not later than the Employer's federal tax filing date, including extensions. The Trustee shall post such amount to each Participant's ESOP Account once the total Contribution received or Forfeiture Account amount to be allocated has been balanced against the specific amount to be credited to each Participant's ESOP Account.

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6 ACCOUNTING

6.1 Individual Participant Accounting

The Administrator shall maintain an individual set of Accounts for each Participant in order to reflect transactions both by type of Contribution and investment medium. Financial transactions shall be accounted for at the individual Account level by posting each transaction to the appropriate Account of each affected Participant. Participant Account values shall be maintained in shares for the Investment Funds and in dollars for the Sweep and Loan Accounts. At any point in time, the Account value shall be determined using the most recent Trade Date values provided by the Trustee.

6.2 Sweep Account is Transaction Account

All transactions related to amounts being contributed to or distributed from the Trust shall be posted to each affected Participant's Sweep Account. Any amount held in the Sweep Account shall be credited with interest up until the date on which it is removed from the Sweep Account.

6.3 Trade Date Accounting and Investment Cycle

Participant Account values shall be determined as of each Trade Date. For any transaction to be processed as of a Trade Date, the Trustee must receive instructions for the transaction by the Sweep Date. Such instructions shall apply to amounts held in the Account on that Sweep Date. Financial transactions of the Investment Funds shall be posted to Participants' Accounts as of the Trade Date, based upon the Trade Date values provided by the Trustee, and settled on the Settlement Date.

6.4 Accounting for Investment Funds

Investments in each Investment Fund shall be maintained in shares. The Trustee is responsible for determining the share values of each Investment Fund as of each Trade Date. To the extent an Investment Fund is comprised of collective investment funds of the Trustee, or any other fiduciary to the Plan, the share values shall be determined in accordance with the rules governing such collective investment funds, which are incorporated herein by reference. All other share values shall be determined by the Trustee. The share value of each Investment Fund shall be based on the fair market value of its underlying assets.

6.5 Payment of Fees and Expenses

Except to the extent Plan fees and expenses related to Account maintenance, transaction and Investment Fund management and maintenance, as set forth below, are paid by the Employer directly, or indirectly, through the Forfeiture

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Account as directed by the Administrator, such fees and expenses shall be paid as set forth below. The Employer may pay a lower portion of the fees and expenses allocable to the Accounts of Participants who are no longer Employees or who are not Beneficiaries, unless doing so would result in discrimination.

(a) Account Maintenance: Account maintenance fees and expenses, may include but are not limited to, administrative, Trustee, government annual report preparation, audit, legal, nondiscrimination testing and fees for any other special services. Account maintenance fees shall be charged to Participants on a per Participant basis provided that no fee shall reduce a Participant's Account balance below zero.

(b) Transaction: Transaction fees and expenses, may include but are not limited to, periodic installment payment, Investment Fund election change and loan fees. Transaction fees shall be charged to the Participant's Account involved in the transaction provided that no fee shall reduce a Participant's Account balance below zero.

(c) Investment Fund Management and Maintenance: Management and maintenance fees and expenses related to the Investment Funds shall be charged at the Investment Fund level and reflected in the net gain or loss of each Fund.

As of the Effective Date, a breakdown of which Plan fees and expenses shall generally be borne by the Trust (and charged to individual Participants' Accounts or charged at the Investment Fund level and reflected in the net gain or loss of each Fund) and those that shall be paid by the Employer is set forth in Appendix B and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

The Trustee shall have the authority to pay any such fees and expenses, which remain unpaid by the Employer for 60 days, from the Trust.

6.6 Accounting for Participant Loans

Participant loans shall be held in a separate Loan Account of the Participant and accounted for in dollars as an earmarked asset of the borrowing Participant's Account.

6.7 Error Correction

The Administrator may correct any errors or omissions in the administration of the Plan by restoring any Participant's Account balance with the amount that would be credited to the Account had no error or omission been made. Funds necessary for any such restoration shall be provided through payment made by the Employer, or by the Trustee to the extent the error or omission is

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attributable to actions or inactions of the Trustee, or if the restoration involves an Account holding amounts contributed by an Employer, the Administrator may direct the Trustee to use amounts from the Forfeiture Account.

6.8 Participant Statements

The Administrator shall provide Participants with statements of their Accounts as soon after the end of each quarter of the Plan Year as administratively feasible.

6.9 Special Accounting During Conversion Period

The Administrator and Trustee may use any reasonable accounting methods in performing their respective duties during any Conversion Period. This includes, but is not limited to, the method for allocating net investment gains or losses and the extent, if any, to which contributions received by and distributions paid from the Trust during this period share in such allocation.

6.10 Accounts for QDRO Beneficiaries

A separate Account shall be established for an alternate payee entitled to any portion of a Participant's Account under a QDRO as of the date and in accordance with the directions specified in the QDRO. In addition, a separate Account may be established during the period of time the Administrator, a court of competent jurisdiction or other appropriate person is determining whether a domestic relations order qualifies as a QDRO. Such a separate Account shall be valued and accounted for in the same manner as any other Account.

(a) Distributions Pursuant to QDROs. If a QDRO so provides, the portion of a Participant's Account payable to an alternate payee may be distributed, in a form as permissible under
Section 11 and Code section 414(p), to the alternate payee at the time specified in the QDRO, regardless of whether the Participant is entitled to a distribution from the Plan at such time.

(b) Participant Loans. Except to the extent required by law, an alternate payee, on whose behalf a separate Account has been established, shall not be entitled to borrow from such Account. If a QDRO specifies that the alternate payee is entitled to any portion of the Account of a Participant who has an outstanding loan balance, all outstanding loans shall generally continue to be held in the Participant's Account and shall not be divided between the Participant's and alternate payee's Accounts.

(c) Investment Direction. Where a separate Account has been established on behalf of an alternate payee and has not yet been distributed, the alternate payee may direct the investment of such Account in the same manner as if he or she were a Participant.

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7 INVESTMENT FUNDS AND ELECTIONS

7.1 Investment Funds

Except for Participants' Sweep and Loan Accounts, the Trust shall be maintained in various Investment Funds. The Administrator shall select the Investment Funds offered to Participants and may change the number or composition of the Investment Funds, subject to the terms and conditions agreed to with the Trustee. As of the Effective Date, a list of the Investment Funds offered under the Plan is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, and as agreed to by the Trustee, without the necessity of amending this Plan and Trust. If the Company provides for a Company Stock Fund, the Administrator has the discretion to deny or restrict the availability of the Company Stock Fund to certain Participants in accordance with procedures prescribed by the Administrator to the extent such denial or restriction does not violate Code section 401(a).

7.2 Investment Fund Elections

Each Participant shall direct the investment of all of his or her Contribution Accounts except for these Accounts:

Prior ESOP Rollover Account ESOP Account

which shall be entirely invested in the Investment Fund specified by the Administrator, which Investment Fund as of the Effective Date is set forth in Appendix A. However, a Participant who has attained age 55 may direct the investment of the balance in his or her Prior ESOP Rollover Account and ESOP Account. Future amounts allocated to his or her Prior ESOP Rollover Account and ESOP Account shall continue to be entirely invested in the Investment Fund specified by the Administrator, until otherwise directed by the Participant.

A Participant shall make his or her investment election in any combination of one or any number of the Investment Funds offered in accordance with the procedures established by the Administrator and Trustee. However, during any Conversion Period, Trust assets may be held in any investment vehicle permitted by the Plan, as directed by the Administrator, irrespective of Participant investment elections.

The Administrator may set a maximum percentage of the total election that a Participant may direct into any specific Investment Fund, which maximum, if any, as of the Effective Date, is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

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7.3 Responsibility for Investment Choice

Each Participant shall be solely responsible for the selection of his or her Investment Fund choices. No fiduciary with respect to the Plan is empowered to advise a Participant as to the manner in which his or her Accounts are to be invested, and the fact that an Investment Fund is offered shall not be construed to be a recommendation for investment.

7.4 Default if No Election

The Administrator shall specify an Investment Fund for the investment of that portion of a Participant's Account which is not yet held in an Investment Fund and for which no valid investment election is on file. The Investment Fund specified as of the Effective Date is set forth in Appendix A, and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

7.5 Timing

A Participant shall make his or her initial investment election upon becoming a Participant and may change his or her investment election at any time in accordance with the procedures established by the Administrator and Trustee. Investment elections received by the Trustee by the Sweep Date shall be effective on the following Trade Date.

7.6 Investment Fund Election Change Fees

A reasonable processing fee may be charged directly to a Participant's Account for Investment Fund election changes in excess of a specified number per year as determined by the Administrator.

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8 VESTING & FORFEITURES

8.1 Fully Vested Contribution Accounts

A Participant shall be fully vested in these Accounts at all times:

Employee Account
Rollover Account
Prior ESOP Rollover Account Prior Match Account

Notwithstanding, prior to the Effective Date a Participant's Prior Match Account became vested in accordance with a vesting schedule then in effect.

8.2 Full Vesting upon Certain Events

A Participant's entire Account shall become fully vested once he or she has attained his or her Normal Retirement Date as an Employee or upon his or her terminating employment with all Related Companies due to a Reduction in Force or his or her Disability or death.

8.3 Vesting Schedule

In addition to the vesting provided above, a Participant's Company Match and ESOP Accounts shall become vested in accordance with the following schedule:

YEARS OF VESTING       VESTED
    SERVICE          PERCENTAGE
----------------     ----------
    Less than 1            0%
 1 but less than 2        20%
 2 but less than 3        40%
 3 but less than 4        60%
 4 but less than 5        80%
     5 or more           100%

If this vesting schedule is changed, the vested percentage for each Participant shall not be less than his or her vested percentage determined as of the last day prior to this change, and for any Participant with at least three Years of Vesting Service when the schedule is changed, vesting shall be determined using the more favorable vesting schedule.

8.4 Forfeitures

A Participant's non-vested Account balance shall be forfeited as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment has terminated with

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all Related Companies. Forfeitures from all Employer Contribution Accounts shall be transferred to and maintained in a single Forfeiture Account, which shall be invested in interest bearing deposits of the Trustee. Forfeiture Account amounts shall be utilized to restore Accounts, to pay Plan fees and expenses at the discretion of the Administrator and in accordance with Section 5 to increase the amount allocated as Company Match Contributions and ESOP Contributions as directed by the Administrator.

8.5 Rehired Employees

(a) Service. If a former Employee is rehired, all Periods of Employment credited when his or her employment last terminated shall be counted in determining his or her vested interest.

(b) Account Restoration. If a former Employee is rehired before he or she has a Break in Service, the amount forfeited when his or her employment last terminated shall be restored to his or her Account. The restoration shall include the interest which would have been credited had such forfeiture been invested in the Sweep Account from the date forfeited until the date the restoration amount is restored. The amount shall come from the Forfeiture Account to the extent possible, and any additional amount needed shall be contributed by the Employer. The vested interest in his or her restored Account shall then be equal to:

V% times (AB plus D) minus D

where:

V% = current vested percentage AB = current account balance D = amount previously distributed

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9 PARTICIPANT LOANS

9.1 Participant Loans Permitted

Loans to Participants are permitted pursuant to the terms and conditions set forth in this Section.

9.2 Loan Application, Note and Security

A Participant shall apply for any loan in such manner and with such advance notice as prescribed by the Administrator. All loans shall be evidenced by a promissory note, secured only by the portion of the Participant's Account from which the loan is made, and the Plan shall have a lien on this portion of his or her Account.

9.3 Spousal Consent

A Participant is not required to obtain Spousal Consent in order to take out a loan under the Plan.

9.4 Loan Approval

The Administrator, or the Trustee, if otherwise authorized by the Administrator and agreed to by the Trustee, is responsible for determining that a loan request conforms to the requirements described in this Section and granting such request.

9.5 Loan Funding Limits, Account Sources and Funding Order

The loan amount must meet all of the following limits as determined as of the Sweep Date the loan is processed and shall be funded from the Participant's Accounts as follows:

(a) Plan Minimum Limit. The minimum amount for any loan is $1,000.

(b) Plan Maximum Limit, Account Sources and Funding Order. Subject to the legal limit described in (c) below, the maximum a Participant may borrow, including the outstanding balance of existing Plan loans, is 100% of the following of the Participant's Accounts which are fully vested in the priority order as follows:

Employee Account
Rollover Account

(c) Legal Maximum Limit. The maximum a Participant may borrow, including the outstanding balance of existing Plan loans, is 50% of his or her vested Account balance, not to exceed $50,000. However, the

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$50,000 maximum is reduced by the Participant's highest outstanding loan balance during the 12 month period ending on the day before the Sweep Date as of which the loan is made. For purposes of this paragraph, the qualified plans of all Related Companies shall be treated as though they are part of this Plan to the extent it would decrease the maximum loan amount.

9.6 Maximum Number of Loans

A Participant may have a maximum of two loans outstanding at any given time.

9.7 Source and Timing of Loan Funding

A loan to a Participant shall be made solely from the assets of his or her own Account. The available assets shall be determined first by Account type and then within each Account used for funding a loan, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the loan is processed.

The loan shall be funded on the Settlement Date following the Trade Date as of which the loan is processed. The Trustee shall make payment to the Participant as soon thereafter as administratively feasible.

9.8 Interest Rate

The interest rate charged on Participant loans shall be a fixed reasonable rate of interest, determined from time to time by the Administrator, which provides the Plan with a return commensurate with the prevailing interest rate charged by persons in the business of lending money for loans which would be made under similar circumstances. As of the Effective Date, the interest rate is determined as set forth in Appendix C, and may be changed from time to time by the Administrator, in writing, without the necessity of amending this Plan and Trust.

9.9 Loan Payment

Substantially level amortization shall be required of each loan with payments made at least monthly, generally through payroll deduction. Loans may be prepaid in full or in part at any time. The Participant may choose the loan repayment period, not to exceed 5 years, except that the repayment period may be for any period not to exceed 10 years if the purpose of the loan is to acquire the Participant's principal residence.

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9.10 Loan Payment Hierarchy

Loan principal payments shall be credited to the Participant's Accounts in the inverse of the order used to fund the loan. Loan interest shall be credited to the Participant's Accounts in direct proportion to the principal payment. Loan payments are credited to the Investment Funds based upon the Participant's current investment election for new Contributions.

9.11 Repayment Suspension

The Administrator may agree to a suspension of loan payments for up to four months for a Participant who is on a Leave of Absence without pay. During the suspension period interest shall continue to accrue on the outstanding loan balance. At the expiration of the suspension period all outstanding loan payments and accrued interest thereon shall be due unless otherwise agreed upon by the Administrator.

9.12 Loan Default

A loan is treated as a default if scheduled loan payments are more than 90 days late. A Participant shall then have 30 days from the time he or she receives written notice of the default and a demand for past due amounts to cure the default before it becomes final.

In the event of default, the Administrator may direct the Trustee to report the outstanding principal balance of the loan and accrued interest thereon as a taxable distribution. As soon as a Plan withdrawal or distribution to such Participant would otherwise be permitted, the Administrator may instruct the Trustee to execute upon its security interest in the Participant's Account by distributing the note to the Participant.

9.13 Call Feature

The Administrator shall have the right to call any Participant loan once a Participant's employment with all Related Companies has terminated or if the Plan is terminated.

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10 IN-SERVICE WITHDRAWALS

10.1 In-Service Withdrawals Permitted

In-service withdrawals to a Participant who is an Employee are permitted pursuant to the terms and conditions set forth in this
Section and as required by law as set forth in Section 11.

10.2 In-Service Withdrawal Application and Notice

A Participant shall apply for any in-service withdrawal in such manner and with such advance notice as prescribed by the Administrator. The Participant shall be provided the notice prescribed by Code section 402(f).

If an in-service withdrawal is one to which Code sections 401(a)(11) and 417 do not apply, such in-service withdrawal may commence less than 30 days after the aforementioned notice is provided, if:

(a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notice to consider his or her option to elect or not elect a Direct Rollover for all or a portion, if any, of his or her in- service withdrawal which shall constitute an Eligible Rollover Distribution; and

(b) the Participant after receiving such notice, affirmatively elects a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which shall constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof.

10.3 Spousal Consent

A Participant is not required to obtain Spousal Consent in order to make an in-service withdrawal under the Plan.

10.4 In-Service Withdrawal Approval

The Administrator, or the Trustee, if otherwise authorized by the Administrator and agreed to by the Trustee, is responsible for determining that an in-service withdrawal request conforms to the requirements described in this Section and granting such request.

10.5 Minimum Amount, Payment Form and Medium

The minimum amount for any type of withdrawal is $1,000.

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With regard to the portion of a withdrawal representing an Eligible Rollover Distribution, a Participant may elect a Direct Rollover for all or a portion of such amount. The form of payment for an in- service withdrawal shall be a single lump sum and payment shall be made in cash, except that regard to an Over Age 59 1/2 Withdrawal, a Participant may elect to have the portion of his or her Over Age 59 1/2 Withdrawal attributable to amounts invested in the Company Stock Fund be made in the form of whole shares of Company Stock and cash in lieu of fractional shares.

10.6 Source and Timing of In-Service Withdrawal Funding

An in-service withdrawal to a Participant shall be made solely from the assets of his or her own Account and shall be based on the Account values as of the Trade Date the in-service withdrawal is processed. The available assets shall be determined first by Account type and then within each Account used for funding an in- service withdrawal, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes his or her Loan Account balance) as of the Trade Date on which the in-service withdrawal is processed.

The in-service withdrawal shall be funded on the Settlement Date following the Trade Date as of which the in-service withdrawal is processed. The Trustee shall make payment as soon thereafter as administratively feasible.

10.7 Hardship Withdrawals

(a) Requirements. A Participant who is an Employee may request the withdrawal of up to the amount necessary to satisfy a financial need including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal. Only requests for withdrawals (1) on account of a Participant's "Deemed Financial Need", and (2) which are "Deemed Necessary" to satisfy the financial need shall be approved.

(b) "Deemed Financial Need". An immediate and heavy financial need relating to:

(1) the payment of unreimbursable medical expenses described under Code section 213(d) incurred (or to be incurred) by the Employee, his or her spouse or dependents;

(2) the purchase (excluding mortgage payments) of the Employee's principal residence;

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(3) the payment of unreimbursable tuition, related educational fees and room and board for up to the next 12 months of post-secondary education for the Employee, his or her spouse or dependents;

(4) the payment of amounts necessary for the Employee to prevent losing his or her principal residence through eviction or foreclosure on the mortgage; or

(5) any other circumstance specifically permitted under Code section 401(k)(2)(B)(i)(IV).

(c) "Deemed Necessary". A withdrawal is "deemed necessary" to satisfy the financial need only if the withdrawal amount does not exceed the financial need and all of these conditions are met:

(1) the Employee has obtained all possible withdrawals (other than hardship withdrawals) and nontaxable loans available from this Plan and all other plans maintained by Related Companies;

(2) the Administrator shall suspend the Employee from making any contributions to this Plan and all other qualified and nonqualified plans of deferred compensation and all stock option or stock purchase plans maintained by Related Companies for 12 months from the date the withdrawal payment is made; and

(3) the Administrator shall reduce the Contribution Dollar Limit for the Employee with regard to this Plan and all other plans maintained by Related Companies, for the calendar year next following the calendar year of the withdrawal by the amount of the Employee's Employee Contributions for the calendar year of the withdrawal.

(d) Account Sources and Funding Order. The withdrawal amount shall come from the following of the Participant's fully vested Accounts, in the priority order as follows:

Rollover Account
Employee Account

The amount that may be withdrawn from a Participant's Employee Account shall not include any earnings credited to his or her Employee Account after the start of the first Plan Year beginning after December 31, 1988.

(e) Suspension from Further Contributions. Upon making a Hardship withdrawal, a Participant may not make additional Employee

28

Contributions (or additional contributions to all other qualified and nonqualified plans of deferred compensation and all stock option or stock purchase plans maintained by Related Companies) for a period of 12 months from the date the withdrawal payment is made.

(f) Permitted Frequency. There is no restriction on the number of Hardship withdrawals permitted to a Participant.

10.8 Over Age 59 1/2 Withdrawals

(a) Requirements. A Participant who is an Employee and over age 59 1/2 may withdraw from the Accounts listed in paragraph (b) below.

(b) Account Sources and Funding Order. The withdrawal amount shall come from the following of the Participant's fully vested Accounts, in the priority order as follows:

Rollover Account
Employee Account
Prior ESOP Rollover Account ESOP Account

(c) Permitted Frequency. The maximum number of Over Age 59 1/2 withdrawals permitted to a Participant in any 12-month period is one.

(d) Suspension from Further Contributions. An Over Age 59 1/2 withdrawal shall not affect a Participant's ability to make or be eligible to receive further Contributions.

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11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW

11.1 Benefit Information, Notices and Election

A Participant, or his or her Beneficiary in the case of his or her death, shall be provided with information regarding all optional times and forms of distribution available, to include the notices prescribed by Code section 402(f) and Code section 411(a)(11). Subject to the other requirements of this Section, a Participant, or his or her Beneficiary in the case of his or her death, may elect, in such manner and with such advance notice as prescribed by the Administrator, to have his or her vested Account balance paid to him or her beginning upon any Settlement Date following the Participant's termination of employment with all Related Companies or, if earlier, at the time required by law as set forth in Section 11.7.

If a distribution is one to which Code sections 401(a)(11) and 417 do not apply, such distribution may commence less than 30 days after the aforementioned notices are provided, if:

(a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notices to consider the decision as to whether to elect a distribution and if so to elect a particular form of distribution and to elect or not elect a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution; and

(b) the Participant after receiving such notices, affirmatively elects a distribution and a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof.

11.2 Spousal Consent

A Participant is not required to obtain Spousal Consent in order to receive a distribution under the Plan, except for a Participant who is eligible for an annuity form of payment as described in Section 11.3 and who elects an annuity form of payment.

11.3 Payment Form and Medium

Except to the extent otherwise provided by Section 11.4, a Participant may elect to be paid in any of these forms:

(a) a single lump sum, or

(b) a portion paid in a lump sum, and the remainder paid later, or

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(c) periodic installments over a period not to exceed the life expectancy of the Participant and his or her Beneficiary, or

(d) a single life annuity or a joint and 50%or 100% survivor annuity.

Any annuity option permitted shall be provided through the purchase of a non-transferable single premium contract from an insurance company which must conform to the terms of the Plan and which shall be distributed to the Participant or Beneficiary in complete satisfaction of the benefit due.

Except to the extent a distribution consists of a loan call as described in Section 9, distributions (other than annuity contracts) shall be made in cash, or if a Participant so elects, in the form of whole shares of Company Stock and cash in lieu of fractional shares to the extent invested in the Company Stock Fund. With regard to the portion of a distribution representing an Eligible Rollover Distribution, a Distributee may elect a Direct Rollover for all or a portion of such amount.

11.4 Distribution of Small Amounts

If, after a Participant's employment with all Related Companies ends, the Participant's vested Account balance is $3,500 or less, and if at the time of any prior withdrawal or distribution the Participant's vested Account balance did not exceed $3,500, the Participant's benefit shall be paid as a single lump sum as soon as administratively feasible in accordance with procedures prescribed by the Administrator.

11.5 Source and Timing of Distribution Funding

A distribution to a Participant shall be made solely from the assets of his or her own Accounts and shall be based on the Account values as of the Trade Date the distribution is processed. The available assets shall be determined first by Account type and then within each Account used for funding a distribution, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the distribution is processed.

The distribution shall be funded on the Settlement Date following the Trade Date as of which the distribution is processed. The Trustee shall make payment as soon thereafter as administratively feasible.

11.6 Deemed Distribution

For purposes of Section 8.4, if at the time a Participant's employment with all Related Companies has terminated, the Participant's vested Account balance attributable to Accounts subject to vesting as described in Section 8, is zero,

31

his or her vested Account balance shall be deemed distributed as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment with all Related Companies has terminated.

11.7 Latest Commencement Permitted

In addition to any other Plan requirements and unless a Participant elects otherwise, his or her benefit payments shall begin not later than 60 days after the end of the Plan Year in which he or she attains his or her Normal Retirement Date or retires, whichever is later. However, if the amount of the payment or the location of the Participant (after a reasonable search) cannot be ascertained by that deadline, payment shall be made no later than 60 days after the earliest date on which such amount or location is ascertained but in no event later than as described below. A Participant's failure to elect in such manner as prescribed by the Administrator to have his or her vested Account balance paid to him or her, shall be deemed an election by the Participant to defer his or her distribution.

Benefit payments shall begin by the April 1 immediately following the end of the calendar year in which the Participant attains age 70 1/2, whether or not he or she is an Employee.

If benefit payments cannot begin at the time required because the location of the Participant cannot be ascertained (after a reasonable search), the Administrator may, at any time thereafter, treat such person's Account as forfeited subject to the provisions of Section 18.5.

11.8 Payment Within Life Expectancy

The Participant's payment election must be consistent with the requirement of Code section 401(a)(9) that all payments are to be completed within a period not to exceed the lives or the joint and last survivor life expectancy of the Participant and his or her Beneficiary. The life expectancies of a Participant and his or her Beneficiary, if such Beneficiary is his or her spouse, may be recomputed annually.

11.9 Incidental Benefit Rule

The Participant's payment election must be consistent with the requirement that, if the Participant's spouse is not his or her sole primary Beneficiary, the minimum annual distribution for each calendar year, beginning with the year in which he or she attains age 70 1/2, shall not be less than the quotient obtained by dividing
(a) the Participant's vested Account balance as of the last Trade Date of the preceding year by (b) the applicable divisor as determined under the incidental benefit requirements of Code section 401(a)(9).

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11.10 Payment to Beneficiary

Payment to a Beneficiary must either: (1) be completed by the end of the calendar year that contains the fifth anniversary of the Participant's death or (2) begin by the end of the calendar year that contains the first anniversary of the Participant's death and be completed within the period of the Beneficiary's life or life expectancy, except that:

(a) If the Participant dies after the April 1 immediately following the end of the calendar year in which he or she attains age 70 1/2, payment to his or her Beneficiary must be made at least as rapidly as provided in the Participant's distribution election;

(b) If the surviving spouse is the Beneficiary, payments need not begin until the end of the calendar year in which the Participant would have attained age 70 1/2 and must be completed within the spouse's life or life expectancy; and

(c) If the Participant and the surviving spouse who is the Beneficiary die (1) before the April 1 immediately following the end of the calendar year in which the Participant would have attained age 70 1/2 and (2) before payments have begun to the spouse, the spouse shall be treated as the Participant in applying these rules.

11.11 Beneficiary Designation

Each Participant may complete a beneficiary designation form indicating the Beneficiary who is to receive the Participant's remaining Plan interest at the time of his or her death. The designation may be changed at any time. However, a Participant's spouse shall be the sole primary Beneficiary unless the designation includes Spousal Consent for another Beneficiary. If no proper designation is in effect at the time of a Participant's death or if the Beneficiary does not survive the Participant, the Beneficiary shall be, in the order listed, the:

(a) Participant's surviving spouse,

(b) Participant's children, in equal shares, (or if a child does not survive the Participant, and that child leaves issue, the issue shall be entitled to that child's share, by right of representation) or

(c) Participant's estate.

11.12 QJSA and QPSA Annuity Information and Elections

The following definitions, information and election rules shall apply to any Participant who is eligible for an annuity form of payment and who elects an annuity form of payment:

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(a) Annuity Starting Date. The first day of the first period for which an amount is payable as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Participant to such benefit.

(b) "QJSA". A qualified joint and survivor annuity, meaning for a married Participant, a form of benefit payment which is the actuarial equivalent of the Participant's vested Account balance at the Annuity Starting Date, payable to the Participant in monthly payments for life and providing that, if the Participant's spouse survives him or her, monthly payments equal to 50% of the amount payable to the Participant during his or her lifetime shall be paid to the spouse for the remainder of such person's lifetime and for a single Participant, a form of benefit payment which is the actuarial equivalent of the Participant's vested Account balance at the Annuity Starting Date, payable to the Participant in monthly payments for life.

(c) "QPSA". A qualified pre-retirement survivor annuity, meaning that upon the death of a Participant before the Annuity Starting Date, the vested portion of the Participant's Account becomes payable to the surviving spouse as a life annuity, except to the extent of any Loan Account balance, unless Spousal Consent has been given to a different Beneficiary or the surviving spouse chooses a different form of payment.

(d) QJSA Information to a Participant. No less than 30 and no more than 90 days before the Annuity Starting Date, each Participant shall be given a written explanation of (1) the terms and conditions of the QJSA, (2) the right to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, (3) the right to revoke this election and the effect of this revocation, and (4) the need for Spousal Consent.

(e) QJSA Election. A Participant may elect, and such election shall include Spousal Consent if married, at any time within the 90 day period ending on the Annuity Starting Date, to (1) waive the right to receive the QJSA and elect an optional form of payment, or (2) revoke or change any such election.

(f) QPSA Beneficiary Information to Participant. Upon becoming a Participant, and with updates as needed to insure such information is accurate and readily available to each Participant who is between the ages of 32 and 35, each married Participant shall be given written information stating that (1) his or her death benefit is payable to his or her surviving spouse, (2) he or she may choose that the benefit be paid to a different Beneficiary, (3) he or she has the right to revoke or change a prior designation and the effects of such revocation or change, and (4) the need for Spousal Consent.

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(g) QPSA Beneficiary Designation by Participant. A married Participant may designate, with Spousal Consent, a non-spouse Beneficiary at any time after the Participant has been given the information in the QPSA Beneficiary Information to Participant paragraph above and upon the earlier of (1) the date the Participant has terminated employment, or (2) the beginning of the Plan Year in which the Participant attains age 35.

(h) QPSA Information to a Surviving Spouse. Each surviving spouse shall be given a written explanation of (1) the terms and conditions of being paid his or her Account balance in the form of a single life annuity, (2) the right to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, and (3) the right to revoke this election and the effect of this revocation.

(i) QPSA Election by Surviving Spouse. A surviving spouse may elect, at any time up to the Annuity Starting Date, to (1) waive the right to receive a single life annuity and elect an optional form of payment, or (2) revoke or change any such election.

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12 ADP AND ACP TESTS

12.1 Contribution Limitation Definitions

The following definitions are applicable to this Section 12 (where a definition is contained in both Sections 1 and 12, for purposes of
Section 12 the Section 12 definition shall be controlling):

(a) "ACP" or "Average Contribution Percentage". The Average Percentage calculated using Contributions allocated to Participants as of a date within the Plan Year.

(b) "ACP Test". The determination of whether the ACP is in compliance with the Basic or Alternative Limitation for a Plan Year (as defined in Section 12.2).

(c) "ADP" or "Average Deferral Percentage". The Average Percentage calculated using Deferrals allocated to Participants as of a date within the Plan Year.

(d) "ADP Test". The determination of whether the ADP is in compliance with the Basic or Alternative Limitation for a Plan Year (as defined in Section 12.2).

(e) "Average Percentage". The average of the calculated percentages for Participants within the specified group. The calculated percentage refers to either the "Deferrals" or "Contributions" (as defined in this Section) made on each Participant's behalf for the Plan Year, divided by his or her Compensation for the portion of the Plan Year in which he or she was an Eligible Employee while a Participant. (Employee Contributions to this Plan or comparable contributions to plans of Related Companies which shall be refunded solely because they exceed the Contribution Dollar Limit are included in the percentage for the HCE Group but not for the NHCE Group.)

(f) "Contributions" shall include Company Match Contributions. In addition, Contributions may include Employee Contributions, but only to the extent that (1) the Employer elects to use them,
(2) they are not used or counted in the ADP Test and (3) they otherwise satisfy the requirements as prescribed under Code section 401(m) permitting treatment as Contributions for purposes of the ACP Test.

(g) "Deferrals" shall include Employee Contributions.

(h) "Family Member". An Employee who is, at any time during the Plan Year or Lookback Year, a spouse, lineal ascendant or descendant, or spouse of a lineal ascendant or descendant of
(1) an active or former

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Employee who at any time during the Plan Year or Lookback Year is a more than 5% Owner (within the meaning of Code section
414(q)(3)), or (2) an HCE who is among the 10 Employees with the highest Compensation for such Year.

(i) "HCE" or "Highly Compensated Employee". With respect to each Employer and its Related Companies, an Employee during the Plan Year or Lookback Year who (in accordance with Code section 414(q)):

(1) Was a more than 5% Owner at any time during the Lookback Year or Plan Year;

(2) Received Compensation during the Lookback Year (or in the Plan Year if among the 100 Employees with the highest Compensation for such Year) in excess of (i) $75,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)), or (ii) $50,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)) in the case of a member of the "top-paid group" (within the meaning of Code section 414(q)(4)) for such Year), provided, however, that if the conditions of Code section 414(q)(12)(B)(ii) are met, the Company may elect for any Plan Year to apply clause (i) by substituting $50,000 for $75,000 and not to apply clause (ii);

(3) Was an officer of a Related Company and received Compensation during the Lookback Year (or in the Plan Year if among the 100 Employees with the highest Compensation for such Year) that is greater than 50% of the dollar limitation in effect under Code section 415(b)(1)(A) and
(d) for such Year (or if no officer has Compensation in excess of the threshold, the officer with the highest Compensation), provided that the number of officers shall be limited to 50 Employees (or, if less, the greater of three Employees or 10% of the Employees); or

(4) Was a Family Member at any time during the Lookback Year or Plan Year, in which case the Contributions and Compensation of the HCE and his or her Family Members shall be aggregated and they shall be treated as a single HCE.

A former Employee shall be treated as an HCE if (1) such former Employee was an HCE when he separated from service, or (2) such former Employee was an HCE in service at any time after attaining age 55.

The determination of who is an HCE, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees and the number of Employees treated as officers shall be made in accordance with Code section 414(q).

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(j) "HCE Group" and "NHCE Group". With respect to each Employer and its Related Companies, the respective group of HCEs and NHCEs who are eligible to have amounts contributed on their behalf for the Plan Year, including Employees who would be eligible but for their election not to participate or to contribute, or because their Pay is greater than zero but does not exceed a stated minimum.

(1) If the Related Companies maintain two or more plans which are subject to the ADP or ACP Test and are considered as one plan for purposes of Code sections 401(a)(4) or
410(b), all such plans shall be aggregated and treated as one plan for purposes of meeting the ADP and ACP Tests, provided that the plans may only be aggregated if they have the same Plan Year.

(2) If an HCE, who is one of the top 10 paid Employees or a more than 5% Owner, has any Family Members, the Deferrals, Contributions and Compensation of such HCE and his or her Family Members shall be combined and treated as a single HCE. Such amounts for all other Family Members shall be removed from the NHCE Group percentage calculation and be combined with the HCE's.

(3) If an HCE is covered by more than one cash or deferred arrangement, or more than one arrangement permitting employee and matching contributions, maintained by the Related Companies, all such plans shall be aggregated and treated as one plan for purposes of calculating the separate percentage for the HCE which is used in the determination of the Average Percentage.

(k) "Lookback Year". Pursuant to Code section 414(q), the Company elects as the Lookback Year the 12 months ending immediately prior to the start of the Plan Year.

(l) "Multiple Use Test". The test described in Section 12.4 which a Plan must meet where the Alternative Limitation (described in
Section 12.2(b)) is used to meet both the ADP and ACP Tests.

(m) "NHCE" or "Non-Highly Compensated Employee". An Employee who is not an HCE.

12.2 ADP and ACP Tests

For each Plan Year, the ADP and ACP for the HCE Group must meet either the Basic or Alternative Limitation when compared to the respective ADP and ACP for the NHCE Group, defined as follows:

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(a) Basic Limitation. The HCE Group Average Percentage may not exceed 1.25 times the NHCE Group Average Percentage.

(b) Alternative Limitation. The HCE Group Average Percentage is limited by reference to the NHCE Group Average Percentage as follows:

  IF THE NHCE GROUP           THEN THE MAXIMUM HCE
AVERAGE PERCENTAGE IS:      GROUP AVERAGE PERCENTAGE IS:
----------------------     -----------------------------
     Less than 2%          2 times NHCE Group Average %
       2% to 8%            NHCE Group Average % plus 2%
     More than 8%          NA - Basic Limitation applies

12.3 Correction of ADP and ACP Tests

If the ADP or ACP Tests are not met, the Administrator shall determine, no later than the end of the next Plan Year, a maximum percentage to be used in place of the calculated percentage for all HCEs that would reduce the ADP and/or ACP for the HCE group by a sufficient amount to meet the ADP and ACP Tests. ADP and/or ACP corrections shall be made in accordance with the leveling method as described below.

(a) ADP Correction. The HCE with the highest Deferral percentage shall have his or her Deferral percentage reduced to the lesser of the extent required to meet the ADP Test or to cause his or her Deferral percentage to equal that of the HCE with the next highest Deferral percentage. The process shall be repeated until the ADP Test is met.

To the extent an HCE's Deferrals were determined to be reduced as described in the paragraph above, Employee Contributions shall, by the end of the next Plan Year, be refunded to the HCE in an amount equal to the actual Deferrals minus the product of the maximum percentage and the HCE's Compensation, except that such amount to be refunded shall be reduced by Employee Contributions previously refunded because they exceeded the Contribution Dollar Limit. Excess amounts shall first be taken from unmatched Employee Contributions and then from matched Employee Contributions. Any Company Match Contributions attributable to refunded excess Employee Contributions as described in this Section shall be forfeited and used as described in Section 8.4.

(b) ACP Correction. The HCE with the highest Contribution percentage shall have his or her Contribution percentage reduced to the lesser of the extent required to meet the ACP Test or to cause his or her Contribution percentage to equal that of the HCE with the next highest Contribution percentage. The process shall be repeated until the ACP Test is met.

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To the extent an HCE's Contributions were determined to be reduced as described in the paragraph above, Company Match Contributions shall, by the end of the next Plan Year, be refunded to the HCE to the extent vested, and forfeited to the extent such amounts were not vested, as of the end of the Plan Year being tested, in an amount equal to the actual Contributions minus the product of the maximum percentage and the HCE's Compensation.

(c) Investment Fund Sources. Once the amount of excess Deferrals and/or Contributions is determined amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes his or her Loan Account balance) as of the Trade Date on which the correction is processed.

(d) Family Member Correction. To the extent any reduction is necessary with respect to an HCE and his or her Family Members that have been combined and treated for testing purposes as a single Employee, the excess Deferrals and Contributions from the ADP and/or ACP Test shall be prorated among each such Participant in direct proportion to his or her Deferrals or Contributions included in each Test.

12.4 Multiple Use Test

If the Alternative Limitation (defined in Section 12.2) is used to meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group must also comply with the requirements of Code section 401(m)(9). Such Code section requires that the sum of the ADP and ACP for the HCE Group (as determined after any corrections needed to meet the ADP and ACP Tests have been made) not exceed the sum (which produces the most favorable result) of:

(a) the Basic Limitation (defined in Section 12.2) applied to either the ADP or ACP for the NHCE Group, and

(b) the Alternative Limitation applied to the other NHCE Group percentage.

12.5 Correction of Multiple Use Test

If the multiple use limit is exceeded, the Administrator shall determine a maximum percentage to be used in place of the calculated percentage for all HCEs that would reduce either or both the ADP or ACP for the HCE Group by a sufficient amount to meet the multiple use limit. Any excess shall be handled in the same manner that the distribution of excess Deferrals or Contributions are handled.

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12.6 Adjustment for Investment Gain or Loss

Any excess Deferrals or Contributions to be refunded to a Participant or forfeited in accordance with Section 12.3 or 12.5 shall be adjusted for investment gain or loss. Refunds or forfeitures shall not include investment gain or loss for the period between the end of the applicable Plan Year and the date of distribution.

12.7 Testing Responsibilities and Required Records

The Administrator shall be responsible for ensuring that the Plan meets the ADP Test, the ACP Test and the Multiple Use Test, and that the Contribution Dollar Limit is not exceeded. In carrying out its responsibilities, the Administrator shall have sole discretion to limit or reduce Deferrals or Contributions at any time. The Administrator shall maintain records which are sufficient to demonstrate that the ADP Test, the ACP Test and the Multiple Use Test, have been met for each Plan Year for at least as long as the Employer's corresponding tax year is open to audit.

12.8 Separate Testing

(a) Multiple Employers: The determination of HCEs, NHCEs, and the performance of the ADP Test, the ACP Test and Multiple Use Test, and any corrective action resulting therefrom, shall be made separately with regard to the Employees of each Employer (and its Related Companies) that is not a Related Company with the other Employer(s).

(b) Collective Bargaining Units: The performance of the ADP Test, and if applicable, the ACP Test and Multiple Use Test, and any corrective action resulting therefrom, shall be applied separately to Employees who are eligible to participate in the Plan as a result of a collective bargaining agreement.

In addition, separate testing may be applied, at the discretion of the Administrator and to the extent permitted under Treasury regulations, to any group of Employees for whom separate testing is permissible.

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13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS

13.1 "Annual Addition" Defined

The sum of all amounts allocated to the Participant's Account for a Plan Year. Amounts include contributions (except for rollovers or transfers from another qualified plan), forfeitures and, if the Participant is a Key Employee (pursuant to Section 14) for the applicable or any prior Plan Year, medical benefits provided pursuant to Code section 419A(d)(1). For purposes of this Section 13.1, "Account" also includes a Participant's account in all other defined contribution plans currently or previously maintained by any Related Company. The Plan Year refers to the year to which the allocation pertains, regardless of when it was allocated. The Plan Year shall be the Code section 415 limitation year.

13.2 Maximum Annual Addition

The Annual Addition to a Participant's accounts under this Plan and any other defined contribution plan maintained by any Related Company for any Plan Year shall not exceed the lesser of (1) 25% of his or her Taxable Income or (2) $30,000 (as adjusted for the cost of living pursuant to Code section 415(d)).

13.3 Avoiding an Excess Annual Addition

If, at any time during a Plan Year, the allocation of any additional Contributions would produce an excess Annual Addition for such year, Contributions to be made for the remainder of the Plan Year shall be limited to the amount needed for each affected Participant to receive the maximum Annual Addition.

13.4 Correcting an Excess Annual Addition

Upon the discovery of an excess Annual Addition to a Participant's Account (resulting from forfeitures, allocations, reasonable error in determining Participant compensation or the amount of elective contributions, or other facts and circumstances acceptable to the Internal Revenue Service) the excess amount (adjusted to reflect investment gains) shall first be returned to the Participant to the extent of his or her Employee Contributions (however to the extent Employee Contributions were matched, the applicable Company Match Contributions shall be forfeited in proportion to the returned matched Employee Contributions) and the remaining excess, if any, shall be forfeited by the Participant first from Company Match Contributions and then from ESOP Contributions and together with forfeited Company Match Contributions attributable to returned Employee Contributions used as described in Section 8.4.

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13.5 Correcting a Multiple Plan Excess

If a Participant, whose Account is credited with an excess Annual Addition, received allocations to more than one defined contribution plan, the excess shall be corrected by reducing the Annual Addition to this Plan only after all possible reductions have been made to the other defined contribution plans.

13.6 "Defined Benefit Fraction" Defined

The fraction, for any Plan Year, where the numerator is the "projected annual benefit" and the denominator is the greater of 125% of the "protected current accrued benefit" or the normal limit which is the lesser of (1) 125% of the maximum dollar limitation provided under Code section 415(b)(1)(A) for the Plan Year or (2) 140% of the amount which may be taken into account under Code section 415(b)(1)(B) for the Plan Year, where a Participant's:

(a) "projected annual benefit" is the annual benefit provided by the Plan determined pursuant to Code section 415(e)(2)(A), and

(b) "protected current accrued benefit" in a defined benefit plan in existence (1) on July 1, 1982, shall be the accrued annual benefit provided for under Public Law 97-248, section
235(g)(4), as amended, or (2) on May 6, 1986, shall be the accrued annual benefit provided for under Public Law 99-514, section 1106(i)(3).

13.7 "Defined Contribution Fraction" Defined

The fraction where the numerator is the sum of the Participant's Annual Addition for each Plan Year to date and the denominator is the sum of the "annual amounts" for each year in which the Participant has performed service with a Related Company. The "annual amount" for any Plan Year is the lesser of (1) 125% of the Code section 415(c)(1)(A) dollar limitation (determined without regard to subsection (c)(6)) in effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B) amount in effect for the Plan Year, where:

(a) each Annual Addition is determined pursuant to the Code section 415(c) rules in effect for such Plan Year, and

(b) the numerator is adjusted pursuant to Public Law 97-248, section 235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).

13.8 Combined Plan Limits and Correction

If a Participant has also participated in a defined benefit plan maintained by a Related Company, the sum of the Defined Benefit Fraction and the Defined Contribution Fraction for any Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan Year, the Participant's benefit under any defined benefit plan (to the extent it has not been distributed or used to purchase an annuity contract) shall be limited so that the combined fraction does not exceed 1.0 before any defined contribution limits shall be enforced.

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14 TOP HEAVY RULES

14.1 Top Heavy Definitions

When capitalized, the following words and phrases have the following meanings when used in this Section:

(a) "Aggregation Group". The group consisting of each qualified plan of an Employer (and its Related Companies) (1) in which a Key Employee is a participant or was a participant during the determination period (regardless of whether such plan has terminated), or (2) which enables another plan in the group to meet the requirements of Code sections 401(a)(4) or 410(b). The Employer may also treat any other qualified plan as part of the group if the group would continue to meet the requirements of Code sections 401(a)(4) and 410(b) with such plan being taken into account.

(b) "Determination Date". The last Trade Date of the preceding Plan Year or, in the case of the Plan's first year, the last Trade Date of the first Plan Year.

(c) "Key Employee". A current or former Employee (or his or her Beneficiary) who at any time during the five year period ending on the Determination Date was:

(1) an officer of a Related Company whose Compensation (i) exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and (ii) places him within the following highest paid group of officers:

  NUMBER OF EMPLOYEES                NUMBER OF
NOT EXCLUDED UNDER CODE             HIGHEST PAID
   SECTION 414(Q)(8)             OFFICERS INCLUDED
-----------------------          -----------------
      Less than 30                       3
       30 to 500                10% of the number of
                               Employees not excluded
                                 under Code section
                                      414(q)(8)
      More than 500                      50

(2) a more than 5% Owner,

(3) a more than 1% Owner whose Compensation exceeds $150,000, or

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(4) a more than 0.5% Owner who is among the 10 Employees owning the largest interest in a Related Company and whose Compensation exceeds the amount in effect under Code section 415(c)(1)(A).

(d) "Plan Benefit". The sum as of the Determination Date of (1) an Employee's Account, (2) the present value of his or her other accrued benefits provided by all qualified plans within the Aggregation Group, and (3) the aggregate distributions made within the five year period ending on such date. Plan Benefits shall exclude rollover contributions and plan to plan transfers made after December 31, 1983 which are both employee initiated and from a plan maintained by a non-related employer.

(e) "Top Heavy". The Plan's status when the Plan Benefits of Key Employees account for more than 60% of the Plan Benefits of all Employees who have performed services at any time during the five year period ending on the Determination Date. The Plan Benefits of Employees who were, but are no longer, Key Employees (because they have not been an officer or Owner during the five year period), are excluded in the determination.

14.2 Special Contributions

(a) Minimum Contribution Requirement. For each Plan Year in which the Plan is Top Heavy, the Employer shall not allow any contributions (other than a Rollover Contribution) to be made by or on behalf of any Key Employee unless the Employer makes a contribution (other than contributions made by an Employer in accordance with a Participant's salary deferral election or contributions made by an Employer based upon the amount contributed by a Participant) on behalf of all Participants who were Eligible Employees as of the last day of the Plan Year in an amount equal to at least 3% of each such Participant's Taxable Income. The Administrator shall remove any such contributions (including applicable investment gain or loss) credited to a Key Employee's Account in violation of the foregoing rule and return them to the Employer or Employee to the extent permitted by the Limited Return of Contributions paragraph of Section 18.

(b) Overriding Minimum Benefit. Notwithstanding, contributions shall be permitted on behalf of Key Employees if the Employer also maintains a defined benefit plan which automatically provides a benefit which satisfies the Code section 416(c)(1) minimum benefit requirements, including the adjustment provided in Code section 416(h)(2)(A), if applicable. If this Plan is part of an aggregation group in which a Key Employee is receiving a benefit and no minimum is provided in any other plan, a minimum contribution of at least 3% of Taxable Income

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shall be provided to the Participants specified in the preceding paragraph. In addition, the Employer may offset a defined benefit minimum by contributions (other than contributions made by an Employer in accordance with a Participant's salary deferral election or contributions made by an Employer based upon the amount contributed by a Participant) made to this Plan.

14.3 Adjustment to Combined Limits for Different Plans

For each Plan Year in which the Plan is Top Heavy, 100% shall be substituted for 125% in determining the Defined Benefit Fraction and the Defined Contribution Fraction.

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15 PLAN ADMINISTRATION

15.1 Plan Delineates Authority and Responsibility

Plan fiduciaries include the Company, the Administrator, the Committee and/or the Trustee, as applicable, whose specific duties are delineated in this Plan and Trust. In addition, Plan fiduciaries also include any other person to whom fiduciary duties or responsibility is delegated with respect to the Plan. Any person or group may serve in more than one fiduciary capacity with respect to the Plan. To the extent permitted under ERISA section 405, no fiduciary shall be liable for a breach by another fiduciary.

15.2 Fiduciary Standards

Each fiduciary shall:

(a) discharge his or her duties in accordance with this Plan and Trust to the extent they are consistent with ERISA;

(b) use that degree of care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;

(c) act with the exclusive purpose of providing benefits to Participants and their Beneficiaries, and defraying reasonable expenses of administering the Plan;

(d) diversify Plan investments, to the extent such fiduciary is responsible for directing the investment of Plan assets, so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and

(e) treat similarly situated Participants and Beneficiaries in a uniform and nondiscriminatory manner.

15.3 Company is ERISA Plan Administrator

The Company is the plan administrator, within the meaning of ERISA section 3(16), which is responsible for compliance with all reporting and disclosure requirements, except those that are explicitly the responsibility of the Trustee under applicable law. The Administrator and/or Committee shall have any necessary authority to carry out such functions through the actions of the Administrator, duly appointed officers of the Company, and/or the Committee.

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15.4 Administrator Duties

The Administrator shall have the discretionary authority to construe this Plan and Trust, other than the provisions which relate to the Trustee, and to do all things necessary or convenient to effect the intent and purposes thereof, whether or not such powers are specifically set forth in this Plan and Trust. Actions taken in good faith by the Administrator shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. In addition to the duties listed elsewhere in this Plan and Trust, the Administrator's authority shall include, but not be limited to, the discretionary authority to:

(a) determine who is eligible to participate, if a contribution qualifies as a rollover contribution, the allocation of Contributions, and the eligibility for loans, withdrawals and distributions;

(b) provide each Participant with a summary plan description no later than 90 days after he or she has become a Participant (or such other period permitted under ERISA section 104(b)(1)), as well as informing each Participant of any material modification to the Plan in a timely manner;

(c) make a copy of the following documents available to Participants during normal work hours: this Plan and Trust (including subsequent amendments), all annual and interim reports of the Trustee related to the entire Plan, the latest annual report and the summary plan description;

(d) determine the fact of a Participant's death and of any Beneficiary's right to receive the deceased Participant's interest based upon such proof and evidence as it deems necessary;

(e) establish and review at least annually a funding policy bearing in mind both the short-run and long-run needs and goals of the Plan. To the extent Participants may direct their own investments, the funding policy shall focus on which Investment Funds are available for Participants to use; and

(f) adjudicate claims pursuant to the claims procedure described in
Section 18.

15.5 Advisors May be Retained

The Administrator may retain such agents and advisors (including attorneys, accountants, actuaries, consultants, record keepers, investment counsel and administrative assistants) as it considers necessary to assist it in the performance of its duties. The Administrator shall also comply with the bonding requirements of ERISA section 412.

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15.6 Delegation of Administrator Duties

The Company, as Administrator of the Plan, has appointed a Committee to administer the Plan on its behalf. The Company shall provide the Trustee with the names and specimen signatures of any persons authorized to serve as Committee members and act as or on its behalf. Any Committee member appointed by the Company shall serve at the pleasure of the Company, but may resign by written notice to the Company. Committee members shall serve without compensation from the Plan for such services. Except to the extent that the Company otherwise provides, any delegation of duties to a Committee shall carry with it the full discretionary authority of the Administrator to complete such duties.

15.7 Committee Operating Rules

(a) Actions of Majority. Any act delegated by the Company to the Committee may be done by a majority of its members. The majority may be expressed by a vote at a meeting or in writing without a meeting, and a majority action shall be equivalent to an action of all Committee members.

(b) Meetings. The Committee shall hold meetings upon such notice, place and times as it determines necessary to conduct its functions properly.

(c) Reliance by Trustee. The Committee may authorize one or more of its members to execute documents on its behalf and may authorize one or more of its members or other individuals who are not members to give written direction to the Trustee in the performance of its duties. The Committee shall provide such authorization in writing to the Trustee with the name and specimen signatures of any person authorized to act on its behalf. The Trustee shall accept such direction and rely upon it until notified in writing that the Committee has revoked the authorization to give such direction. The Trustee shall not be deemed to be on notice of any change in the membership of the Committee, parties authorized to direct the Trustee in the performance of its duties, or the duties delegated to and by the Committee until notified in writing.

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16 MANAGEMENT OF INVESTMENTS

16.1 Trust Agreement

All Plan assets shall be held by the Trustee in trust, in accordance with those provisions of this Plan and Trust which relate to the Trustee, for use in providing Plan benefits and paying Plan fees and expenses not paid directly by the Employer. Plan benefits shall be drawn solely from the Trust and paid by the Trustee as directed by the Administrator. Notwithstanding, the Administrator may appoint, with the approval of the Trustee, another trustee to hold and administer Plan assets which do not meet the requirements of Section 16.2.

16.2 Investment Funds

The Administrator is hereby granted authority to direct the Trustee to invest Trust assets in one or more Investment Funds. The number and composition of Investment Funds may be changed from time to time, without the necessity of amending this Plan and Trust. The Trustee may establish reasonable limits on the number of Investment Funds as well as the acceptable assets for any such Investment Fund. Each of the Investment Funds may be comprised of any of the following:

(a) shares of a registered investment company, whether or not the Trustee or any of its affiliates is an advisor to, or other service provider to, such company;

(b) collective investment funds maintained by the Trustee, or any other fiduciary to the Plan, which are available for investment by trusts which are qualified under Code sections 401(a) and 501(a);

(c) individual equity and fixed income securities which are readily tradeable on the open market;

(d) guaranteed investment contracts issued by a bank or insurance company;

(e) interest bearing deposits of the Trustee; and

(f) Company Stock.

Any Investment Fund assets invested in a collective investment fund, shall be subject to all the provisions of the instruments establishing and governing such fund. These instruments, including any subsequent amendments, are incorporated herein by reference.

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16.3 Authority to Hold Cash

The Trustee shall have the authority to cause the investment manager of each Investment Fund to maintain sufficient deposit or money market type assets in each Investment Fund to handle the Fund's liquidity and disbursement needs. Each Participant's and Beneficiary's Sweep Account, which is used to hold assets pending investment or disbursement, shall consist of interest bearing deposits of the Trustee.

16.4 Trustee to Act Upon Instructions

The Trustee shall carry out instructions to invest assets in the Investment Funds as soon as practicable after such instructions are received from the Administrator, Participants, or Beneficiaries. Such instructions shall remain in effect until changed by the Administrator, Participants or Beneficiaries.

16.5 Administrator Has Right to Vote Registered Investment Company Shares

The Administrator shall be entitled to vote proxies or exercise any shareholder rights relating to shares held on behalf of the Plan in a registered investment company. Notwithstanding, the authority to vote proxies and exercise shareholder rights related to such shares held in a Custom Fund is vested as provided otherwise in Section 16.

16.6 Custom Fund Investment Management

The Administrator may designate, with the consent of the Trustee, an investment manager for any Investment Fund established by the Trustee solely for Participants of this Plan (a "Custom Fund"). The investment manager may be the Administrator, Trustee or an investment manager pursuant to ERISA section 3(38). The Administrator shall advise the Trustee in writing of the appointment of an investment manager and shall cause the investment manager to acknowledge to the Trustee in writing that the investment manager is a fiduciary to the Plan.

A Custom Fund shall be subject to the following:

(a) Guidelines. Written guidelines, acceptable to the Trustee, shall be established for a Custom Fund. If a Custom Fund consists solely of collective investment funds or shares of a registered investment company (and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs), its underlying instruments shall constitute the guidelines.

(b) Authority of Investment Manager. The investment manager of a Custom Fund shall have the authority to vote or execute proxies, exercise shareholder rights, manage, acquire, and dispose of Trust

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assets. Notwithstanding, the authority to vote proxies and exercise shareholder rights related to shares of Company Stock held in a Custom Fund is vested as provided otherwise in
Section 16.

(c) Custody and Trade Settlement. Unless otherwise agreed to by the Trustee, the Trustee shall maintain custody of all Custom Fund assets and be responsible for the settlement of all Custom Fund trades. For purposes of this section, shares of a collective investment fund, shares of a registered investment company and guaranteed investment contracts issued by a bank or insurance company, shall be regarded as the Custom Fund assets instead of the underlying assets of such instruments.

(d) Limited Liability of Co-Fiduciaries. Neither the Administrator nor the Trustee shall be obligated to invest or otherwise manage any Custom Fund assets for which the Trustee or Administrator is not the investment manager nor shall the Administrator or Trustee be liable for acts or omissions with regard to the investment of such assets except to the extent required by ERISA.

16.7 Authority to Segregate Assets

The Company may direct the Trustee to split an Investment Fund into two or more funds in the event any assets in the Fund are illiquid or the value is not readily determinable. In the event of such segregation, the Company shall give instructions to the Trustee on what value to use for the split-off assets, and the Trustee shall not be responsible for confirming such value.

16.8 Maximum Permitted Investment in Company Stock

If the Company provides for a Company Stock Fund the Fund shall be comprised of Company Stock and sufficient deposit or money market type assets to handle the Fund's liquidity and disbursement needs. The Fund may be as large as necessary to comply with Participants' and Beneficiaries' investment elections as well the total investment of Participants' and Beneficiaries' ESOP Accounts.

16.9 Participants Have Right to Vote and Tender Company Stock

Each Participant or Beneficiary shall be entitled to instruct the Trustee as to the voting or tendering of any full or partial shares of Company Stock held on his or her behalf in the Company Stock Fund. Prior to such voting or tendering of Company Stock, each Participant or Beneficiary shall receive a copy of the proxy solicitation or other material relating to such vote or tender decision and a form for the Participant or Beneficiary to complete which confidentially instructs the Trustee to vote or tender such shares in the manner indicated by the Participant or Beneficiary. Upon receipt of such instructions, the Trustee

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shall act with respect to such shares as instructed. The Administrator shall instruct the Trustee with respect to how to vote or tender any shares for which instructions are not received from Participants or Beneficiaries.

16.10 Registration and Disclosure for Company Stock

The Administrator shall be responsible for determining the applicability (and, if applicable, complying with) the requirements of the Securities Act of 1933, as amended, the California Corporate Securities Law of 1968, as amended, and any other applicable blue sky law. The Administrator shall also specify what restrictive legend or transfer restriction, if any, is required to be set forth on the certificates for the securities and the procedure to be followed by the Trustee to effectuate a resale of such securities.

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17 TRUST ADMINISTRATION

17.1 Trustee to Construe Trust

The Trustee shall have the discretionary authority to construe those provisions of this Plan and Trust which relate to the Trustee and to do all things necessary or convenient to the administration of the Trust, whether or not such powers are specifically set forth in this Plan and Trust. Actions taken in good faith by the Trustee shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law.

17.2 Trustee To Act As Owner of Trust Assets

Subject to the specific conditions and limitations set forth in this Plan and Trust, the Trustee shall have all the power, authority, rights and privileges of an absolute owner of the Trust assets and, not in limitation but in amplification of the foregoing, may:

(a) receive, hold, manage, invest and reinvest, sell, tender, exchange, dispose of, encumber, hypothecate, pledge, mortgage, lease, grant options respecting, repair, alter, insure, or distribute any and all property in the Trust;

(b) borrow money, participate in reorganizations, pay calls and assessments, vote or execute proxies, exercise subscription or conversion privileges, exercise options and register any securities in the Trust in the name of the nominee, in federal book entry form or in any other form as shall permit title thereto to pass by delivery;

(c) renew, extend the due date, compromise, arbitrate, adjust, settle, enforce or foreclose, by judicial proceedings or otherwise, or defend against the same, any obligations or claims in favor of or against the Trust; and

(d) lend, through a collective investment fund, any securities held in such collective investment fund to brokers, dealers or other borrowers and to permit such securities to be transferred into the name and custody and be voted by the borrower or others.

17.3 United States Indicia of Ownership

The Trustee shall not maintain the indicia of ownership of any Trust assets outside the jurisdiction of the United States, except as authorized by ERISA section 404(b).

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17.4 Tax Withholding and Payment

(a) Withholding. The Trustee shall calculate and withhold federal (and, if applicable, state) income taxes with regard to any Eligible Rollover Distribution that is not paid as a Direct Rollover in accordance with the Participant's withholding election or as required by law if no election is made or the election is less than the amount required by law. With regard to any taxable distribution that is not an Eligible Rollover Distribution, the Trustee shall calculate and withhold federal (and, if applicable, state) income taxes in accordance with the Participant's withholding election or as required by law if no election is made.

(b) Taxes Due From Investment Funds. The Trustee shall pay from the Investment Fund any taxes or assessments imposed by any taxing or governmental authority on such Fund or its income, including related interest and penalties.

17.5 Trust Accounting

(a) Annual Report. Within 60 days (or other reasonable period) following the close of the Plan Year, the Trustee shall provide the Administrator with an annual accounting of Trust assets and information to assist the Administrator in meeting ERISA's annual reporting and audit requirements.

(b) Periodic Reports. The Trustee shall maintain records and provide sufficient reporting to allow the Administrator to properly monitor the Trust's assets and activity.

(c) Administrator Approval. Approval of any Trustee accounting shall automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator.

17.6 Valuation of Certain Assets

If the Trustee determines the Trust holds any asset which is not readily tradeable and listed on a national securities exchange registered under the Securities Exchange Act of 1934, as amended, the Trustee may engage a qualified independent appraiser to determine the fair market value of such property, and the appraisal fees shall be paid from the Investment Fund containing the asset.

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17.7 Legal Counsel

The Trustee may consult with legal counsel of its choice, including counsel for the Employer or counsel of the Trustee, upon any question or matter arising under this Plan and Trust. When relied upon by the Trustee, the opinion of such counsel shall be evidence that the Trustee has acted in good faith.

17.8 Fees and Expenses

The Trustee's fees for its services as Trustee shall be such as may be mutually agreed upon by the Company and the Trustee. Trustee fees and all reasonable expenses of counsel and advisors retained by the Trustee shall be paid in accordance with Section 6.

17.9 Trustee Duties and Limitations

The Trustee's duties, unless otherwise agreed to by the Trustee, shall be confined to construing the terms of the Plan and Trust as they relate to the Trustee, receiving funds on behalf of and making payments from the Trust, safeguarding and valuing Trust assets, investing and reinvesting Trust assets in the Investment Funds as directed by the Administrator, Participants or Beneficiaries and those duties as described in this Section 17.

The Trustee shall have no duty or authority to ascertain whether Contributions are in compliance with the Plan, to enforce collection or to compute or verify the accuracy or adequacy of any amount to be paid to it by the Employer. The Trustee shall not be liable for the proper application of any part of the Trust with respect to any disbursement made at the direction of the Administrator.

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18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION

18.1 Plan Does Not Affect Employment Rights

The Plan does not provide any employment rights to any Employee. The Employer expressly reserves the right to discharge an Employee at any time, with or without cause, without regard to the effect such discharge would have upon the Employee's interest in the Plan.

18.2 Limited Return of Contributions

Except as provided in this paragraph, (1) Plan assets shall not revert to the Employer nor be diverted for any purpose other than the exclusive benefit of Participants or their Beneficiaries; and
(2) a Participant's vested interest shall not be subject to divestment. As provided in ERISA section 403(c)(2), the actual amount of a Contribution made by the Employer (or the current value of the Contribution if a net loss has occurred) may revert to the Employer if:

(a) such Contribution is made by reason of a mistake of fact;

(b) initial qualification of the Plan under Code section 401(a) is not received and a request for such qualification is made within the time prescribed under Code section 401(b) (the existence of and Contributions under the Plan are hereby conditioned upon such qualification); or

(c) such Contribution is not deductible under Code section 404 (such Contributions are hereby conditioned upon such deductibility) in the taxable year of the Employer for which the Contribution is made.

The reversion to the Employer must be made (if at all) within one year of the mistaken payment of the Contribution, the date of denial of qualification, or the date of disallowance of deduction, as the case may be. A Participant shall have no rights under the Plan with respect to any such reversion.

18.3 Assignment and Alienation

As provided by Code section 401(a)(13) and to the extent not otherwise required by law, no benefit provided by the Plan may be anticipated, assigned or alienated, except:

(a) to create, assign or recognize a right to any benefit with respect to a Participant pursuant to a QDRO, or

(b) to use a Participant's vested Account balance as security for a loan from the Plan which is permitted pursuant to Code section 4975.

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18.4 Facility of Payment

If a Plan benefit is due to be paid to a minor or if the Administrator reasonably believes that any payee is legally incapable of giving a valid receipt and discharge for any payment due him or her, the Administrator shall have the payment of the benefit, or any part thereof, made to the person (or persons or institution) whom it reasonably believes is caring for or supporting the payee, unless it has received due notice of claim therefor from a duly appointed guardian or conservator of the payee. Any payment shall to the extent thereof, be a complete discharge of any liability under the Plan to the payee.

18.5 Reallocation of Lost Participant's Accounts

If the Administrator cannot locate a person entitled to payment of a Plan benefit after a reasonable search, the Administrator may at any time thereafter treat such person's Account as forfeited and use such amount as described in Section 8.4. If such person subsequently presents the Administrator with a valid claim for the benefit, such person shall be paid the amount treated as forfeited, plus the interest that would have been earned in the Sweep Account to the date of determination. The Administrator shall pay the amount through an additional amount contributed by the Employer or direct the Trustee to pay the amount from the Forfeiture Account.

18.6 Claims Procedure

(a) Right to Make Claim. An interested party who disagrees with the Administrator's determination of his or her right to Plan benefits must submit a written claim and exhaust this claim procedure before legal recourse of any type is sought. The claim must include the important issues the interested party believes support the claim. The Administrator, pursuant to the authority provided in this Plan, shall either approve or deny the claim.

(b) Process for Denying a Claim. The Administrator's partial or complete denial of an initial claim must include an understandable, written response covering (1) the specific reasons why the claim is being denied (with reference to the pertinent Plan provisions) and (2) the steps necessary to perfect the claim and obtain a final review.

(c) Appeal of Denial and Final Review. The interested party may make a written appeal of the Administrator's initial decision, and the Administrator shall respond in the same manner and form as prescribed for denying a claim initially.

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(d) Time Frame. The initial claim, its review, appeal and final review shall be made in a timely fashion, subject to the following time table:

                                           Days to Respond
Action                                    From Last Action
------                                    ----------------
Administrator determines benefit                NA
Interested party files initial request        60 days
Administrator's initial decision              90 days
Interested party requests final review        60 days
Administrator's final decision                60 days

However, the Administrator may take up to twice the maximum response time for its initial and final review if it provides an explanation within the normal period of why an extension is needed and when its decision shall be forthcoming.

18.7 Construction

Headings are included for reading convenience. The text shall control if any ambiguity or inconsistency exists between the headings and the text. The singular and plural shall be interchanged wherever appropriate. References to Participant shall include Beneficiary when appropriate and even if not otherwise already expressly stated.

18.8 Jurisdiction and Severability

The Plan and Trust shall be construed, regulated and administered under ERISA and other applicable federal laws and, where not otherwise preempted, by the laws of the State of California. If any provision of this Plan and Trust shall become invalid or unenforceable, that fact shall not affect the validity or enforceability of any other provision of this Plan and Trust. All provisions of this Plan and Trust shall be so construed as to render them valid and enforceable in accordance with their intent.

18.9 Indemnification by Employer

The Employers hereby agree to indemnify all Plan fiduciaries against any and all liabilities resulting from any action or inaction, (including a Plan termination in which the Company fails to apply for a favorable determination from the Internal Revenue Service with respect to the qualification of the Plan upon its termination), in relation to the Plan or Trust (1) including (without limitation) expenses reasonably incurred in the defense of any claim relating to the Plan or its assets, and amounts paid in any settlement approved by the Company relating to the Plan or its assets, but (2) excluding liability resulting from actions or inactions made in bad faith, or resulting from the negligence or willful misconduct of the Trustee. The Company shall have the right, but not the obligation, to conduct the defense of any action to which this Section applies. The Plan fiduciaries are not entitled to indemnity from the Plan assets relating to any such action.

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19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION

19.1 Amendment

The Company reserves the right to amend this Plan and Trust at any time, to any extent and in any manner it may deem necessary or appropriate. The Company (and not the Trustee) shall be responsible for adopting any amendments necessary to maintain the qualified status of this Plan and Trust under Code sections 401(a) and 501(a). If the Committee is acting as the Administrator in accordance with
Section 15.6, it shall have the authority to adopt Plan and Trust amendments which have no substantial adverse financial impact upon any Employer or the Plan. All interested parties shall be bound by any amendment, provided that no amendment shall:

(a) become effective unless it has been adopted in accordance with the procedures set forth in Section 19.5;

(b) except to the extent permissible under ERISA and the Code, make it possible for any portion of the Trust assets to revert to an Employer or to be used for, or diverted to, any purpose other than for the exclusive benefit of Participants and Beneficiaries entitled to Plan benefits and to defray reasonable expenses of administering the Plan;

(c) decrease the rights of any Employee to benefits accrued (including the elimination of optional forms of benefits) to the date on which the amendment is adopted, or if later, the date upon which the amendment becomes effective, except to the extent permitted under ERISA and the Code; nor

(d) permit an Employee to be paid the balance of his or her Employee Account unless the payment would otherwise be permitted under Code section 401(k).

19.2 Merger

This Plan and Trust may not be merged or consolidated with, nor may its assets or liabilities be transferred to, another plan unless each Participant and Beneficiary would, if the resulting plan were then terminated, receive a benefit just after the merger, consolidation or transfer which is at least equal to the benefit which would be received if either plan had terminated just before such event.

19.3 Divestitures

In the event of a sale by an Employer which is a corporation of: (1) substantially all of the Employer's assets used in a trade or business to an unrelated corporation, or (2) a sale of such Employer's interest in a subsidiary

60

to an unrelated entity or individual, lump sum distributions shall be permitted from the Plan, except as provided below, to Participants with respect to Employees who continue employment with the corporation acquiring such assets or who continue employment with such subsidiary, as applicable.

Notwithstanding, distributions shall not be permitted if the purchaser agrees, in connection with the sale, to be substituted as the Company as the sponsor of the Plan or to accept a transfer of the assets and liabilities representing the Participants' benefits into a plan of the purchaser or a plan to be established by the purchaser.

19.4 Plan Termination

The Company may, at any time and for any reason, terminate the Plan in accordance with the procedures set forth in Section 19.5, or completely discontinue contributions. Upon either of these events, or in the event of a partial termination of the Plan within the meaning of Code section 411(d)(3), the Accounts of each affected Employee who has not yet incurred a Break in Service shall be fully vested. If no successor plan is established or maintained, lump sum distributions shall be made in accordance with the terms of the Plan as in effect at the time of the Plan's termination or as thereafter amended provided that a post-termination amendment shall not be effective to the extent that it violates Section 19.1 unless it is required in order to maintain the qualified status of the Plan upon its termination. The Trustee's and Employer's authority shall continue beyond the Plan's termination date until all Trust assets have been liquidated and distributed.

19.5 Amendment and Termination Procedures

The following procedural requirements shall govern the adoption of any amendment or termination (a "Change") of this Plan and Trust:

(a) The Company may adopt any Change by action of its board of directors in accordance with its normal procedures.

(b) The Committee, if acting as Administrator in accordance with
Section 15.6, may adopt any amendment within the scope of its authority provided under Section 19.1 and in the manner specified in Section 15.7(a).

(c) Any Change must be (1) set forth in writing, and (2) signed and dated by an authorized officer of the Company or, in the case of an amendment adopted by the Committee, at least one of its members.

(d) If the effective date of any Change is not specified in the document setting forth the Change, it shall be effective as of the date it is signed by the last person whose signature is required under clause (2) above,

61

except to the extent that another effective date is necessary to maintain the qualified status of this Plan and Trust under Code sections 401(a) and 501(a).

(e) No Change affecting the Trustee in its capacity as Trustee or in any other capacity shall become effective until it is accepted and signed by the Trustee (which acceptance shall not unreasonably be withheld).

19.6 Termination of Employer's Participation

Any Employer may, at any time and for any reason, terminate its Plan participation by action of its board of directors in accordance with its normal procedures. Written notice of such action shall be signed and dated by an authorized officer of the Employer and delivered to the Company. If the effective date of such action is not specified, it shall be effective on, or as soon as reasonably practicable, after the date of delivery. Upon the Employer's request, the Company may instruct the Trustee and Administrator to spin off all affected Accounts and underlying assets into a separate qualified plan under which the Employer shall assume the powers and duties of the Company. Alternatively, the Company may treat the event as a partial termination described above or continue to maintain the Accounts under the Plan.

19.7 Replacement of the Trustee

The Trustee may resign as Trustee under this Plan and Trust or may be removed by the Company at any time upon at least 90 days written notice (or less if agreed to by both parties). In such event, the Company shall appoint a successor trustee by the end of the notice period. The successor trustee shall then succeed to all the powers and duties of the Trustee under this Plan and Trust. If no successor trustee has been named by the end of the notice period, the Company's chief executive officer shall become the trustee, or if he or she declines, the Trustee may petition the court for the appointment of a successor trustee.

19.8 Final Settlement and Accounting of Trustee

(a) Final Settlement. As soon as administratively feasible after its resignation or removal as Trustee, the Trustee shall transfer to the successor trustee all property currently held by the Trust. However, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its accounts and expenses in connection with the settlement of its accounts or other fees or expenses payable by the Trust. Any balance remaining after payment of such fees and expenses shall be paid to the successor trustee.

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(b) Final Accounting. The Trustee shall provide a final accounting to the Administrator within 90 days of the date Trust assets are transferred to the successor trustee.

(c) Administrator Approval. Approval of the final accounting shall automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator.

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APPENDIX A - INVESTMENT FUNDS

I. Investment Funds Available

The Investment Funds offered under the Plan as of the Effective Date include this set of daily valued funds, except that the Company Stock Fund shall be offered under the Plan at such later date as determined by the Administrator:

CATEGORY                 FUNDS
--------                 -----
INCOME              U.S. Treasury Allocation
------

EQUITY              Company Stock
------              S&P 500 Stock
                    Aim Constellation

COMBINATION         LifePath
-----------

II. Default Investment Fund

The default Investment Fund as of the Effective Date is the U.S. Treasury Allocation Fund.

III. Contribution Accounts For Which Investment is Restricted

A Participant or Beneficiary may direct the investment of his or her entire Account except for the following Contribution Accounts, and except as otherwise provided in Section 7, which shall be invested as of the Effective Date as follows:

Prior ESOP Rollover Account Company Stock Fund ESOP Account Company Stock Fund

IV. Maximum Percentage Restrictions Applicable to Certain Investment Funds

With regard to those Accounts for which a Participant or Beneficiary may direct investment, at such time as the Company Stock Fund is offered under the Plan, a Participant or Beneficiary may not elect to invest more than the following percentages in these Investment Funds:

Company Stock Fund 25%

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APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES

As of the Effective Date, payment of Plan fees and expenses shall be as follows:

1) Investment Management Fees: These are paid by Participants in that management fees reduce the investment return reported and credited to Participants, except that the Employer shall pay the fees related to the Company Stock Fund. These are paid by the Employer on a quarterly basis.

2) Recordkeeping Fees: These are paid by the Employer on a quarterly basis, except that with regard to a Participant who is no longer an Employee or a Beneficiary, these are paid by the Participant and are assessed monthly and billed/collected from Accounts quarterly.

3) Loan Fees: A $3.50 per month fee is assessed and billed/collected quarterly from the Account of each Participant who has an outstanding loan balance.

4) Investment Fund Election Changes: For each Investment Fund election change by a Participant, in excess of 4 changes per year, a $10 fee shall be assessed and billed/collected quarterly from the Participant's Account.

5) Periodic Installment Payment Fees: A $3.00 per check fee shall be assessed and billed/collected quarterly from the Participant's Account.

6) Additional Fees Paid by Employer: All other Plan related fees and expenses shall be paid by the Employer. To the extent that the Administrator later elects that any such fees shall be borne by Participants, estimates of the fees shall be determined and reconciled, at least annually, and the fees shall be assessed monthly and billed/collected from Accounts quarterly.

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APPENDIX C - LOAN INTEREST RATE

As of the Effective Date, the interest rate charged on Participant loans shall be equal to the Trustee's prime rate, plus 1%.

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AMENDMENT NO. 1
TO THE
SILICON VALLEY BANK

401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

WHEREAS, Silicon Valley Bank (the "Company"), approved and adopted the Silicon Valley Bancshares Employee Stock Ownership Plan, intended to constitute a qualified stock bonus plan, as described in Code section 401(a), and the Silicon Valley Bank 401(k) Plan, intended to constitute a qualified profit sharing plan, as described in Code section 401(a), including a cash or deferred arrangement, as described in Code section 401(k), which were originally effective January 1, 1989 and January 1, 1985, respectively;

WHEREAS, effective March 1, 1995, the Silicon Valley Bancshares Employee Stock Ownership Plan was merged into the Silicon Valley Bank 401(k) Plan and the merged plan was restated and renamed the Silicon Valley Bank 401(k) and Employee Stock Ownership Plan (the "Plan") and Trust Agreement (the "Trust"), then intended to constitute a qualified profit sharing plan, as described in Code section 401(a), which includes a qualified cash or deferred arrangement, as described in Code section 401(k);

WHEREAS, Section 19.1 of the Plan and Trust provides that the Company reserves the right to amend the Plan and Trust;

NOW THEREFORE RESOLVED, that Sections 5, 9, 13 and 16 are amended effective January 1, 1995, Sections 1, 3, 5, 8, 10 and 11 are amended effective January 1, 1996 and Section 10 is amended effective May 1, 1996 as follows:

Effective January 1, 1995:

1. Section 5 is amended to restate (a) and (b) of Subsection 5.2 each in its entirety as follows:

5.2 ESOP Contributions and ESOP Forfeiture Account Allocations

(a) Frequency and Eligibility. Subject to determination made by the Employer's board of directors, or duly authorized committee appointed by the Employer's board of directors, for each Plan Year, the Employer may make an ESOP Contribution on behalf of each Participant who was an Eligible Employee on the last day of the period. If such Contributions are made, such Contributions shall also be made on behalf of each Participant who was an Eligible Employee at any time during the period but who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date or by reason of his or her Disability or death.

For each Plan Year, the Employer shall allocate any Forfeiture Account balance remaining as of the end of the Plan Year attributable to forfeited ESOP Account amounts and earnings thereon, as ESOP Contributions on behalf of each Participant who was an Eligible Employee on the last day of the period. Such an allocation shall also be made on behalf of each

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Silicon Valley Bank Amendment No. 1 401(k) and Employee Stock Ownership Plan and Trust

Participant who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date or by reason of his or her Disability or death.

(b) Allocation Method. The ESOP Contribution for each period, shall be equal to a specified percentage, including 0% and up to 10%, of each eligible Participant's Pay (not including Forfeiture Account amounts allocated as ESOP Contributions).

Forfeiture Account amounts to be allocated as ESOP Contributions shall be allocated among eligible Participants in direct proportion to their Pay.

2. Section 9 is amended to restate (c) of Subsection 9.5 in its entirety as follows:

9.5 Loan Funding Limits, Account Sources and Funding Order

(c) Legal Maximum Limit. The maximum a Participant may borrow, including the outstanding balance of existing Plan loans, is 50% of his or her combined vested balance in this Plan and the Silicon Valley Bank Money Purchase Pension Plan, not to exceed $50,000. However, the $50,000 maximum is reduced by the Participant's highest outstanding loan balance during the 12 month period ending on the day before the Sweep Date as of which the loan is made. For purposes of this paragraph and except as otherwise stated for purposes of determining a Participant's vested balance, the qualified plans of all Related Companies shall be treated as though they are part of this Plan to the extent it would decrease the maximum loan amount.

3. Section 13 is amended to hereby delete Subsection 13.3, to redesignate each subsequent Subsection and to restate Subsection 13.5 in its entirety as follows:

13.5 Correcting a Multiple Plan Excess

If a Participant, whose Account is credited with an excess Annual Addition, received allocations to more than one defined contribution plan, the excess shall be corrected by first reducing the Annual Addition to this Plan before any reductions are made to the other defined contribution plans.

4. Section 16 is amended to restate the first paragraph of Subsection 16.6, to add a new Subsection 16.7 and to redesignate each existing subsection as follows:

16.6 Custom Fund Investment Management

The Administrator may designate, with the consent of the Trustee, an investment manager for any Investment Fund established by the Trustee solely

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Silicon Valley Bank Amendment No. 1 401(k) and Employee Stock Ownership Plan and Trust

for Participants of this Plan and, subject to Section 16.7, any other qualified plan of the Company or a Related Company (a "Custom Fund"). The investment manager may be the Administrator, Trustee or an investment manager pursuant to ERISA section 3(38). The Administrator shall advise the Trustee in writing of the appointment of an investment manager and shall cause the investment manager to acknowledge to the Trustee in writing that the investment manager is a fiduciary to the Plan.

16.7 Master Custom Fund

The Trustee may establish, at the direction of the Company, a single Custom Fund (a "Master Custom Fund"), for the benefit of this Plan and any other qualified plan of the Company or a Related Company for which the Trustee acts as trustee pursuant to a plan and trust document that contains a provision substantially identical to this provision. The assets of this Plan, to the extent invested in the Master Custom Fund, shall consist only of that percentage of the assets of the Master Custom Fund represented by the shares held by this Plan.

Effective January 1, 1996:

1. Section 1 is amended to restate Subsections 1.38 and 1.52 each in its entirety as follows:

1.38 "Pay". All cash compensation paid to an Eligible Employee by an Employer while a Participant during the current period, except that for purposes of ESOP Contributions, "All cash compensation, excluding incentive pay (annual incentive awards, referral fees and other recognition/achievement awards)" shall be substituted for the preceding reference to "All cash compensation". Pay excludes reimbursements or other expense allowances, cash and non-cash fringe benefits, moving expenses, deferred compensation and welfare benefits.

Pay shall be determined further by including amounts contributed by an Employer pursuant to Code sections 125 and 402(e)(3), except that for purposes of ESOP Contributions, "excluding amounts" shall be substituted for the preceding reference to "including amounts". Pay is limited to $150,000 (as adjusted for the cost of living pursuant to Code sections 401(a)(17) and 415(d)) per Plan Year.

For purposes of the Contributions described in Section 5.2, the limitations as described in the second paragraph of Section 1.11 shall also apply.

1.52 "Trustee". BZW Barclays Global Investors, National Association.

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Silicon Valley Bank Amendment No. 1 401(k) and Employee Stock Ownership Plan and Trust

2. Section 3 is amended to restate Subsection 3.4 in its entirety as follows:

3.4 Contribution Percentage Limits

The Administrator may establish and change from time to time, in writing, without the necessity of amending this Plan and Trust, the minimum, if applicable, and maximum Employee Contribution percentages, prospectively or retrospectively (for the current Plan Year), for all Participants. In addition, the Administrator may establish any lower percentage limits for Highly Compensated Employees as it deems necessary to satisfy the tests described in
Section 12. The Employee Contribution maximum percentage is 5%.

Irrespective of the limits that may be established by the Administrator in accordance with this paragraph, in no event shall the contributions made by or on behalf of a Participant for a Plan Year exceed the maximum allowable under Code section 415.

3. Section 5 is amended to restate the Heading thereof and Subsections 5.1 and 5.2 each in its entirety including the Titles thereof as follows:

5 EMPLOYER CONTRIBUTIONS

5.1 Company Match Contributions

(a) Frequency and Eligibility. For each period for which Participants' Contributions are made, the Employer shall make Company Match Contributions, as described in the following Allocation Method paragraph, on behalf of each Participant who contributed during the period.

(b) Allocation Method. The Company Match Contributions for each period shall total 100% of each eligible Participant's Employee Contributions for the period. Notwithstanding, the maximum dollar match (including Forfeiture Account amounts applied as Company Match Contributions in accordance with Section 8.4) shall not exceed $1,000 for the Plan Year. The Employer may change the 100% matching rate to any other percentage, including 0%, or the maximum dollar match, generally by notifying eligible Participants in sufficient time to adjust their Contribution elections prior to the start of the period for which the new percentage or amount apply.

(c) Timing, Medium and Posting. The Employer shall make each period's Company Match Contribution in cash as soon as administratively feasible, and for purposes of deducting such

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Silicon Valley Bank Amendment No. 1 401(k) and Employee Stock Ownership Plan and Trust

Company Match Contribution, not later than the Employer's federal tax filing date, including extensions. The Trustee shall post such amount to each Participant's Company Match Account once the total Contribution received has been balanced against the specific amount to be credited to each Participant's Company Match Account.

5.2 ESOP Contributions

(a) Frequency and Eligibility. Subject to determination made by the Employer's board of directors, or duly authorized committee appointed by the Employer's board of directors, for each Plan Year, the Employer may make an ESOP Contribution on behalf of each Participant who was an Eligible Employee on the last day of the period. If such Contributions are made, such Contributions shall also be made on behalf of each Participant who was an Eligible Employee at any time during the period but who ceased being an Employee during the period after having attained his or her Early Retirement Date, Normal Retirement Date or by reason of his or her Disability or death.

(b) Allocation Method. The ESOP Contribution for each period, shall be equal to a specified percentage, including 0% and up to 10%, of each eligible Participant's Pay (including Forfeiture Account amounts applied as ESOP Contributions in accordance with Section 8.4).

(c) Timing, Medium and Posting. The Employer shall make each period's ESOP Contribution in cash as soon as administratively feasible, and for purposes of deducting such ESOP Contribution, not later than the Employer's federal tax filing date, including extensions. The Trustee shall post such amount to each Participant's ESOP Account once the total Contribution received has been balanced against the specific amount to be credited to each Participant's ESOP Account.

4. Section 8 is amended to restate Subsection 8.4 in its entirety as follows:

8.4 Forfeitures

A Participant's non-vested Account balance shall be forfeited as of the Settlement Date following the Sweep Date on which the Administrator has reported to the Trustee that the Participant's employment has terminated with all Related Companies. Forfeitures from all Employer Contribution Accounts shall be transferred to and maintained in a single Forfeiture Account, which shall

5

Silicon Valley Bank Amendment No. 1 401(k) and Employee Stock Ownership Plan and Trust

be invested in interest bearing deposits of the Trustee. Forfeiture Account amounts shall be utilized to restore Accounts, to pay Plan fees and expenses at the discretion of the Administrator and to reduce Company Match Contributions and ESOP Contributions as directed by the Administrator.

5. Section 10 is amended to restate Subsections 10.1 and 10.2 each in its entirety as follows:

10.1 In-Service Withdrawals Permitted

In-service withdrawals to a Participant who is an Employee are permitted pursuant to the terms and conditions as set forth in this
Section and as required by law pursuant to the terms and conditions as set forth in Section 11.

10.2 In-Service Withdrawal Application and Notice

A Participant shall apply for any in-service withdrawal in such manner and with such advance notice as prescribed by the Administrator. The Participant shall be provided the notice prescribed by Code section 402(f).

Code sections 401(a)(11) and 417 do not apply to in-service withdrawals under the Plan as described in this Section. An in- service withdrawal may therefore commence less than 30 days after the aforementioned notice is provided, if:

(a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notice to consider his or her option to elect or not elect a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which shall constitute an Eligible Rollover Distribution; and

(b) the Participant after receiving such notice, affirmatively elects a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which shall constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof.

6. Section 11 is amended to restate Subsection 11.1 and the Title of Subsection 11.12 and (a) and (d) thereof each its entirety as follows:

11.1 Benefit Information, Notices and Election

A Participant, or his or her Beneficiary in the case of his or her death, shall be provided with information regarding all optional times and forms of distribution available, to include the notices prescribed by Code section 402(f) and Code section 411(a)(11). Subject to the other requirements of this Section, a

6

Silicon Valley Bank Amendment No. 1 401(k) and Employee Stock Ownership Plan and Trust

Participant, or his or her Beneficiary in the case of his or her death, may elect, in such manner and with such advance notice as prescribed by the Administrator, to have his or her vested Account balance paid to him or her beginning upon any Settlement Date following the Participant's termination of employment with all Related Companies or, if earlier, at the time required by law as set forth in Section 11.7.

A distribution may commence less than 30 days, but more than seven days if such distribution is one to which Code sections 401(a)(11) and 417 apply, after the aforementioned notices are provided, if:

(a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notices to consider the decision as to whether to elect a distribution and if so to elect a particular form of distribution and to elect or not elect a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution; and

(b) the Participant after receiving such notices, affirmatively elects a distribution and a Direct Rollover for all or a portion, if any, of his or her distribution which shall constitute an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof; and

(c) if such distribution is one to which Code sections 401(a)(11) and 417 apply, the Participant's election includes Spousal Consent.

11.12 QJSA and QPSA Information and Elections

(a) Annuity Starting Date. The first day of the first period for which an amount is payable as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Participant to such benefit. Such date shall be a date no earlier than the expiration of the seven-day period that commences the day after the information described in the QJSA Information to a Participant paragraph below is provided to the Participant.

(d) QJSA Information to a Participant. No more than 90 days before the Annuity Starting Date, each Participant shall be given a written explanation of (1) the terms and conditions of the QJSA, (2) the right to a period of at least 30 days after receipt of the written explanation to make an election to waive this form of payment and choose an optional form of payment and the effect of this election, (3) the right to revoke this election and the effect of this revocation, and
(4) the need for Spousal Consent.

7

Silicon Valley Bank                                              Amendment No. 1
401(k) and Employee Stock Ownership Plan and Trust


  Effective May 1, 1996:
  ---------------------

  1.   Section 10 is amended to restate (b) of Subsection 10.8 in its entirety
       as follows:

10.8 Over Age 59 1/2 Withdrawals

(b) Account Sources and Funding Order. The withdrawal amount shall come from the following of the Participant's fully vested Accounts, in the priority order as follows:

Rollover Account
Employee Account
Prior ESOP Rollover Account Company Match Account ESOP Account
Prior Match Account

Date:  May 28, 1996                  SILICON VALLEY BANK


                                     By: /s/ Glen G. Simmons
                                        --------------------------------------
                                        Title: Executive V.P. Human Resources/
                                               Administration

The provisions of the above amendment which relate to the Trustee are hereby approved and executed.

Date:  May 30, 1996                  BZW BARCLAYS GLOBAL INVESTORS, NATIONAL
                                     ASSOCIATION


                                     By: /s/ Gwyn E. Slack
                                        --------------------------------------
                                        Title: Principal


Date:  May 30, 1996                  BZW BARCLAYS GLOBAL INVESTORS, NATIONAL
                                     ASSOCIATION


                                     By: /s/ Lisa M. Maloney
                                        --------------------------------------
                                        Title: Principal

8

ARTICLE 9
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS, RELATED NOTES, AND MANAGEMENT'S DISCUSSION AND ANALYSIS CONTAINED IN THE REPORT ON FORM 10-Q FILED BY SILICON VALLEY BANCSHARES FOR THE QUARTER JUNE 30, 1996.
MULTIPLIER: 1,000


PERIOD TYPE 6 MOS
FISCAL YEAR END DEC 31 1996
PERIOD START JAN 01 1996
PERIOD END JUN 30 1996
CASH 90,323
INT BEARING DEPOSITS 410
FED FUNDS SOLD 372,000
TRADING ASSETS 0
INVESTMENTS HELD FOR SALE 445,263
INVESTMENTS CARRYING 0
INVESTMENTS MARKET 0
LOANS 823,651
ALLOWANCE 29,000
TOTAL ASSETS 1,736,466
DEPOSITS 1,608,547
SHORT TERM 0
LIABILITIES OTHER 8,947
LONG TERM 0
PREFERRED MANDATORY 0
PREFERRED 0
COMMON 63,659
OTHER SE 55,313
TOTAL LIABILITIES AND EQUITY 1,736,466
INTEREST LOAN 42,300
INTEREST INVEST 9,416
INTEREST OTHER 6,508
INTEREST TOTAL 58,224
INTEREST DEPOSIT 17,085
INTEREST EXPENSE 17,085
INTEREST INCOME NET 41,139
LOAN LOSSES 3,588
SECURITIES GAINS 1
EXPENSE OTHER 4,077
INCOME PRETAX 17,190
INCOME PRE EXTRAORDINARY 17,190
EXTRAORDINARY 0
CHANGES 0
NET INCOME 10,314
EPS PRIMARY $1.07
EPS DILUTED $1.07
YIELD ACTUAL 8.8
LOANS NON 23,532
LOANS PAST 88
LOANS TROUBLED 0
LOANS PROBLEM 8,670
ALLOWANCE OPEN 29,700
CHARGE OFFS 5,695
RECOVERIES 1,407
ALLOWANCE CLOSE 29,000
ALLOWANCE DOMESTIC 18,807
ALLOWANCE FOREIGN 0
ALLOWANCE UNALLOCATED 10,193