SVB Financial Group
SILICON VALLEY BANCSHARES (Form: 10-Q, Received: 11/14/2000 15:07:08)
As filed with the Securities and Exchange Commission on November 14, 2000

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 September 30, 2000

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)

            Delaware                                     91-1962278
(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) 654-7400

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 October 31, 2000, 48,883,701 shares of the registrant's common stock ($0.001 par value) were outstanding.


This report contains a total of 30 pages.

TABLE OF CONTENTS

                                                                                                               PAGE
                                                                                                               ----
                         PART I - FINANCIAL INFORMATION


ITEM 1.    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

           CONSOLIDATED BALANCE SHEETS                                                                           3

           CONSOLIDATED STATEMENTS OF INCOME                                                                     4

           CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                                       5

           CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                 6

           NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS                                                    7

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                                                                  12

                          PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS                                                                                    29

ITEM 2.    CHANGES IN SECURITIES                                                                                29

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES                                                                      29

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                  29

ITEM 5.    OTHER INFORMATION                                                                                    29

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                                                     29

SIGNATURES                                                                                                      30

2

PART I - FINANCIAL INFORMATION

ITEM 1 - INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

                                                                                  September 30,       December 31,
(Dollars in thousands, except par value)                                              2000                1999
-------------------------------------------------------------------------------------------------------------------
Assets:
Cash and due from banks                                                              $  364,670          $  278,061
Federal funds sold and securities purchased under
    agreement to resell                                                               1,440,567             898,041
Investment securities, at fair value                                                  2,020,914           1,747,408
Loans, net of unearned income                                                         1,596,855           1,623,005
Allowance for loan losses                                                               (73,800)            (71,800)
-------------------------------------------------------------------------------------------------------------------
Net loans                                                                             1,523,055           1,551,205
Premises and equipment                                                                   11,745              10,742
Accrued interest receivable and other assets                                            143,180             110,941
-------------------------------------------------------------------------------------------------------------------
Total assets                                                                         $5,504,131          $4,596,398
===================================================================================================================

Liabilities, Minority Interest and Stockholders' Equity:
Liabilities:
Deposits:
Noninterest-bearing demand                                                           $2,390,865          $1,928,100
NOW                                                                                      25,896              43,643
Money market                                                                          1,686,348           1,845,377
Time                                                                                    696,785             292,285
-------------------------------------------------------------------------------------------------------------------
    Total deposits                                                                    4,799,894           4,109,405
Other liabilities                                                                        76,696              79,606
-------------------------------------------------------------------------------------------------------------------
Total liabilities                                                                     4,876,590           4,189,011
-------------------------------------------------------------------------------------------------------------------

Company obligated mandatorily redeemable trust preferred securities of
    subsidiary trust holding solely junior subordinated debentures
    (trust preferred securities)                                                         38,576              38,537
Minority interest                                                                        17,355                   -

Stockholders' Equity:
Preferred stock,  $0.001 par value, 20,000,000 shares authorized;
    none outstanding
Common stock, $0.001 par value, 60,000,000 shares authorized; 48,862,381 and
    44,800,736 shares outstanding at September 30, 2000
    and December 31, 1999, respectively                                                      49                  45
Additional paid-in capital                                                              273,944             153,440
Retained earnings                                                                       299,359             176,030
Unearned compensation                                                                    (3,068)             (2,327)
Accumulated other comprehensive income:
    Net unrealized gains on available-for-sale investments                                1,326              41,662
-------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                              571,610             368,850
-------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest and stockholders' equity                        $5,504,131          $4,596,398
===================================================================================================================

See notes to interim consolidated financial statements.

3

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

                                                 For the three months ended             For the nine months ended
                                                 --------------------------             -------------------------
                                                September 30,     September 30,      September 30,     September 30,
(Dollars in thousands, except per share amounts)    2000             1999               2000               1999
-------------------------------------------------------------------------------------------------------------------
Interest income:
   Loans                                          $ 47,743         $41,813            $139,125            $118,872
   Investment securities                            30,035          24,158              83,695              65,252
   Federal funds sold and securities
     purchased under agreement to resell            24,930           9,415              59,830              22,340
------------------------------------------------------------------------------------------------------------------
Total interest income                              102,708          75,386             282,650             206,464
Interest expense                                    14,942          20,997              41,486              63,900
------------------------------------------------------------------------------------------------------------------
Net interest income                                 87,766          54,389             241,164             142,564
Provision for loan losses                           22,679          21,563              46,309              40,334
-------------------------------------------------------------------------------------------------------------------
Net interest income after provision
   for loan losses                                  65,087          32,826             194,855             102,230
-------------------------------------------------------------------------------------------------------------------
Noninterest income:
   Disposition of client warrants                   21,189           6,177              77,299               8,687
   Investment gains (losses)                         3,817               -              35,950                (243)
   Client investment fees                            9,324           1,241              23,180               1,719
   Letter of credit and foreign
     exchange income                                 5,239           4,304              13,565              10,448
   Deposit service charges                             900             729               2,482               2,073
   Other                                             2,589             963               6,311               2,441
-------------------------------------------------------------------------------------------------------------------
Total noninterest income                            43,058          13,414             158,787              25,125
-------------------------------------------------------------------------------------------------------------------
Noninterest expense:
   Compensation and benefits                        28,359          17,591              80,102              47,857
   Retention and warrant incentive plans             2,855             559              15,640               1,214
   Professional services                             5,166           2,531              13,889               8,426
   Business development and travel                   2,954           1,500               7,689               4,356
   Furniture and equipment                           2,798           1,368               7,689               4,159
   Net occupancy                                     2,305           1,713               6,351               4,750
   Postage and supplies                                874             618               2,563               1,850
   Trust preferred securities distributions            825             825               2,475               2,475
   Advertising and promotion                         1,152             474               2,455               1,808
   Telephone                                           849             522               2,056               1,361
   Cost of other real estate owned                       -               -                   -                 268
   Other                                             1,887           2,015               5,635               4,526
-------------------------------------------------------------------------------------------------------------------
Total noninterest expense                           50,024          29,716             146,544              83,050
Minority interest                                      209               -                 209                   -
-------------------------------------------------------------------------------------------------------------------
Income before income tax expense                    58,330          16,524             207,307              44,305
Income tax expense                                  23,391           6,015              83,978              17,006
-------------------------------------------------------------------------------------------------------------------
Net income                                        $ 34,939         $10,509            $123,329           $  27,299
===================================================================================================================
Basic earnings per share                          $   0.74         $  0.26            $   2.68           $    0.66
Diluted earnings per share                        $   0.69         $  0.25            $   2.54           $    0.65
===================================================================================================================

See notes to interim consolidated financial statements.

4

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                               For the three months ended             For the nine months ended
                                               --------------------------             -------------------------
                                              September 30,     September 30,      September 30,     September 30,
(Dollars in thousands)                            2000              1999               2000               1999
-------------------------------------------------------------------------------------------------------------------

Net income                                      $ 34,939          $10,509             $123,329             $27,299

Other comprehensive income (loss), net of tax:
   Changes in unrealized gains (losses) on
     available-for-sale investments:
     Unrealized holding gains                     19,346            9,140               27,036               2,279
     Less: Reclassification adjustment for
       gains included in net income              (14,979)          (3,892)             (67,372)             (5,320)
-------------------------------------------------------------------------------------------------------------------
Other comprehensive income (loss)                  4,367            5,248              (40,336)             (3,041)
-------------------------------------------------------------------------------------------------------------------
Comprehensive income                            $ 39,306          $15,757             $ 82,993             $24,258
===================================================================================================================

See notes to interim consolidated financial statements.

5

SILICON VALLEY BANCSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                  For the nine months ended
                                                                                  -------------------------
                                                                            September 30,            September 30,
(Dollars in thousands)                                                           2000                     1999
-------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
     Net income                                                             $    123,329              $     27,299
     Adjustments to reconcile net income to net cash
      provided by operating activities:
       Provision for loan losses                                                  46,309                    40,334
       Minority interest                                                            (209)                        -
       Depreciation and amortization                                               2,797                     2,402
       Net (gain) loss on sales of investment securities                         (35,950)                      243
       Net gains on disposition of client warrants                               (77,299)                   (8,687)
       Decrease (increase) in accrued interest receivable                          1,908                    (8,286)
       Increase in inventory                                                     (12,267)                   (8,918)
       Increase in prepaid expenses                                               (1,179)                     (456)
       Increase (decrease) in unearned income                                        844                    (1,246)
       Decrease in taxes payable                                                  (1,253)                   (3,938)
       Increase in retention, warrant and other
        incentive plan payable                                                    14,835                     4,050
       Other, net                                                                 (8,113)                    5,655
-------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                         53,752                    48,452
-------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
     Proceeds from maturities and paydowns of
        investment securities                                                    742,335                   819,707
     Proceeds from sales of investment securities                                212,499                   540,725
     Purchases of investment securities                                       (1,178,200)               (1,713,900)
     Net increase in loans                                                       (26,522)                  (70,340)
     Proceeds from recoveries of charged off loans                                 7,519                     6,958
     Net proceeds from sales of other real estate owned                                -                       400
     Purchases of premises and equipment                                          (3,800)                   (2,107)
-------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                           (246,169)                 (418,557)
-------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
     Net increase in deposits                                                    690,489                   135,047
     Proceeds from issuance of common stock,
       net of issuance costs                                                     113,499                     1,873
     Capital contributions from minority interest participants                    17,564                         -
-------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                        821,552                   136,920
-------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                             629,135                  (233,185)
Cash and cash equivalents at January 1,                                        1,176,102                   522,203
-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at September 30,                                  $  1,805,237              $    289,018
===================================================================================================================

Supplemental disclosures:
     Interest paid                                                          $     40,630              $     63,956
     Income taxes paid                                                      $     98,392              $     29,310
===================================================================================================================

See notes to interim consolidated financial statements.

6

SILICON VALLEY BANCSHARES AND SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of Silicon Valley Bancshares and its subsidiaries (the "Company") conform with generally accepted accounting principles and prevailing practices within the banking industry. Certain reclassifications have been made to the Company's 1999 consolidated financial statements to conform to the 2000 presentations. Such reclassifications had no effect on the results of operations or stockholders' equity. The following is a summary of the significant accounting and reporting policies used in preparing the interim consolidated financial statements.

NATURE OF OPERATIONS

Silicon Valley Bancshares 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 California, and additionally has loan offices in Arizona, Colorado, Florida, Georgia, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Pennsylvania, Texas, Virginia, and Washington. The Bank serves emerging growth and middle-market companies in targeted niches, focusing on the technology and life sciences industries, while also addressing other specific industries in which it can provide a higher level of service and better manage credit through specialization and focus. 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 Silicon Valley Bancshares and those of its wholly owned subsidiaries, the Bank, SVB Strategic Investors, LLC, SVB Capital I and SVB Leasing Company (inactive). Intercompany accounts and transactions have been eliminated. Minority interest represents the minority participants' share of the equity of SVB Strategic Investors Fund, LP, a subsidiary of SVB Strategic Investors, LLC and Silicon Valley BancVentures, LP, a subsidiary of Silicon Valley Bank.

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 September 30, 2000, the results of its operations and cash flows for the three and nine months ended September 30, 2000, and September 30, 1999. The December 31, 1999 consolidated financial statements were derived from audited financial statements, and certain information and footnote disclosures normally presented in annual 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 notes thereto included in the Company's 1999 Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2000 may not necessarily be indicative of the Company's operating results for the full year.

7

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. A material estimate that is particularly susceptible to possible change in the near term relates to the determination of the allowance for loan losses. An estimate of possible changes or range of possible changes cannot be made.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents as reported in the interim consolidated statements of cash flows includes cash on hand, cash balances due from banks, federal funds sold, and securities purchased under agreement to resell. The cash equivalents are readily convertible to known amounts of cash and present an insignificant risk of changes in value due to maturity dates of 90 days or less.

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 $548,000 and $291,000 at September 30, 2000, and December 31, 1999, 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, based upon currently known information, 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 principal and interest become current in accordance with the terms of the loan agreement and full collection of the principal appears probable.

STOCK-BASED COMPENSATION

The Company accounts for stock-based employee compensation arrangements in accordance with provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and complies with the disclosure provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." Under APB Opinion No. 25, compensation expense is based on the difference, if any, on the date of the grant, between the fair value of the Company's stock and the exercise price. The Company accounts for stock issued to non-employees in accordance with the provisions of SFAS No. 123 and Financial Accounting Standards Board Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation."

8

SEGMENT REPORTING

Management views the Company as one operating segment, therefore, separate reporting of financial segment information under SFAS No. 131 is not considered necessary. Management approaches the Company's principal subsidiary, the Bank, as one business enterprise which operates in a single economic environment, since the products and services, types of customers and regulatory environment all have similar economic characteristics.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued and was effective for all fiscal years beginning after June 15, 1999. SFAS No. 133 was subsequently amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133" and will now be effective for fiscal years beginning after June 15, 2000, with early adoption permitted. SFAS No. 133, as amended, requires the Company to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. It further provides criteria for derivative instruments to be designated as fair value, cash flow and foreign currency hedges and establishes respective accounting standards for reporting changes in the fair value of the derivative instruments. Upon adoption, the Company will be required to adjust hedging instruments to fair value in the balance sheet and recognize the offsetting gains or losses as adjustments to be reported in net income or other comprehensive income, as appropriate. SFAS No. 133, was further amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities", which primarily relates to certain foreign-exchange, consolidation, normal purchases and normal sales derivative issues. The Company does not expect adoption of SFAS No. 133, as amended, to have a material impact on its consolidated financial position or results of operations. The Company will adopt these statements on January 1, 2001.

2. EARNINGS PER SHARE

The Company computes net income per share in accordance with SFAS No. 128, "Earnings per Share." Under the provisions of SFAS No. 128, basic earnings per share (EPS) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if financial instruments or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

9

The following is a reconciliation of basic EPS to diluted EPS for the three and nine months ended September 30, 2000 and 1999.

                                         Three Months Ended September 30,       Nine Months Ended September 30,
-------------------------------------------------------------------------------------------------------------------
(Dollars and shares in thousands,           Net                 Per Share           Net                Per Share
except per share amounts)                   Income     Shares     Amount           Income     Shares     Amount
-------------------------------------------------------------------------------------------------------------------
2000:
Basic EPS:
Income available to common
    Stockholders                           $34,939     47,334      $0.74          $123,329     46,061      $2.68
Effect of Dilutive Securities:
Stock options and restricted stock               -      2,952          -                 -      2,563          -
-------------------------------------------------------------------------------------------------------------------

Diluted EPS:
Income available to common
    stockholders plus assumed
    conversions                            $34,939     50,286      $0.69          $123,329     48,624      $2.54
================================================================================================================

1999:
Basic EPS:
Income available to common
    stockholders                           $10,509     41,203      $0.26          $ 27,299     41,069      $0.66
Effect of Dilutive Securities:
Stock options and restricted stock               -      1,251          -                 -        914          -
-------------------------------------------------------------------------------------------------------------------

Diluted EPS:
Income available to common
    stockholders plus assumed
    conversions                            $10,509     42,454      $0.25          $ 27,299     41,983      $0.65
===================================================================================================================

3. LOANS

The detailed composition of loans, net of unearned income of $9.4 million and $8.6 million at September 30, 2000, and December 31, 1999, respectively, is presented in the following table:

                                                                               September 30,         December 31,
(Dollars in thousands)                                                             2000                  1999
-------------------------------------------------------------------------------------------------------------------
Commercial                                                                      $1,402,634              $1,414,728
Real estate construction                                                            61,275                  76,209
Real estate term                                                                    53,441                  67,738
Consumer and other                                                                  79,505                  64,330
-------------------------------------------------------------------------------------------------------------------
Total loans                                                                     $1,596,855              $1,623,005
===================================================================================================================

10

4. ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses for the three and nine months ended September 30, 2000 and 1999 was as follows:

                                      Three Months Ended September 30,          Nine Months Ended September 30,
                                      --------------------------------          -------------------------------
(Dollars in thousands)                  2000                   1999                 2000                 1999
-------------------------------------------------------------------------------------------------------------------
Beginning balance                      $ 73,800               $ 56,300            $ 71,800             $ 46,000
Provision for loan losses                22,679                 21,563              46,309               40,334
Loans charged off                       (24,316)               (10,253)            (51,828)             (22,491)
Recoveries                                1,637                  3,190               7,519                6,957
-------------------------------------------------------------------------------------------------------------------
Balance at September 30,               $ 73,800               $ 70,800            $ 73,800             $ 70,800
===================================================================================================================

The aggregate recorded investment in loans for which impairment has been determined in accordance with SFAS No. 114 totaled $18.5 million and $34.0 million at September 30, 2000, and September 30, 1999, respectively. Allocations of the allowance for loan losses related to impaired loans totaled $8.3 million at September 30, 2000, and $13.3 million at September 30, 1999. Average impaired loans for the third quarters of 2000 and 1999 totaled $29.1 million and $40.9 million, respectively.

5. STOCK SPLIT

In March 2000, the Board of Directors approved a two-for-one stock split, in the form of a stock dividend of the Company's common stock. Holders of the Company's $0.001 par value common stock as of the record date, April 21, 2000 received one additional share of $0.001 par value for every one share of common stock they owned as of the record date. Shares and per share amounts for all periods presented in the accompanying financial statements have been adjusted to give retroactive recognition to a two-for-one stock split distributed on May 15, 2000.

6. COMMON STOCK OFFERING

In August, 2000, the Company issued 2.3 million shares of common stock at $42.19 per share. The Company received proceeds of $91.0 million related to the sale of these securities, net of underwriting commission and other offering expenses.

11

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

RESULTS OF OPERATIONS

Throughout the following management discussion and analysis when we refer to "Silicon Valley Bancshares," or "we" or similar words, we intend to include Silicon Valley Bancshares and its subsidiaries collectively, including Silicon Valley Bank. When we refer to "Silicon," we are referring only to Silicon Valley Bancshares.

You should read the following discussion and analysis of financial condition and results of operations in conjunction with our consolidated financial statements and supplementary data as presented in Item 1 of this report. This discussion and analysis includes "forward-looking statements" as that term is used in the securities laws. All statements regarding our expected financial position, business and strategies are forward-looking statements. In addition, in this discussion and analysis the words "anticipates," "believes," "estimates," "seeks," "expects," "plans," "intends" and similar expressions, as they relate to Silicon Valley Bancshares or our management, are intended to identify forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, and have based these expectations on our beliefs as well as our assumptions, such expectations may prove to be incorrect.

For information with respect to factors that could cause actual results to differ from the expectations stated in the forward-looking statements, see the text under the caption "Risk Factors" included in our Report on Form S-3 filed with the Securities and Exchange Commission on August 1, 2000. We urge investors to consider these factors carefully in evaluating the forward-looking statements contained in this discussion and analysis. All subsequent written or oral forward-looking statements attributable to our company or persons acting on our behalf months are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this filing are made only as of the date of this filing. We do not intend, and undertake no obligation, to update these forward-looking statements.

Certain reclassifications have been made to our prior years results to conform with 2000 presentations. Such reclassifications had no effect on our results of operations or stockholders' equity.

EARNINGS SUMMARY

We reported net income of $34.9 million, or $0.69 per diluted share, for the third quarter of 2000, compared with net income of $10.5 million, or $0.25 per diluted share, for the third quarter of 1999. Net income totaled $123.3 million, or $2.54 per diluted share, for the nine months ended September 30, 2000, versus $27.3 million, or $0.65 per diluted share, for the comparable 1999 period. The annualized return on average assets (ROA) was 2.6% in the third quarter of 2000 versus 1.0% in the third quarter of 1999. The annualized return on average equity (ROE) for the third quarter of 2000 was 27.0%, compared to 18.0% in the 1999 third quarter. For the first nine months of 2000, ROA was 3.2% and ROE was 37.4% versus 0.9% and 16.2%, respectively, for the comparable 1999 period.

The increase in net income during the three and nine month periods ended September 30, 2000, as compared with the prior year respective periods, was attributable to increases in net interest

12

income and noninterest income, partially offset by an increase in both the provision for loan losses and noninterest expense. The major components of net income and changes in these components are summarized in the following table for the three and nine months periods ended September 30, 2000 and 1999, and are discussed in more detail below.

                                         Three months ended september 30,        Nine months ended september 30,
                                         --------------------------------        -------------------------------
(Dollars in thousands)                         2000               1999                 2000              1999
-------------------------------------------------------------------------------------------------------------------
Net interest income                           $87,766            $54,389              $241,164         $142,564
Provision for loan losses                      22,679             21,563                46,309           40,334
Noninterest income                             43,058             13,414               158,787           25,125
Noninterest expense                            50,024             29,716               146,544           83,050
Minority interest                                 209                  -                   209                -
-------------------------------------------------------------------------------------------------------------------
Income before income taxes                     58,330             16,524               207,307           44,305
Income tax expense                             23,391              6,015                83,978           17,006
-------------------------------------------------------------------------------------------------------------------
Net income                                    $34,939            $10,509              $123,329         $ 27,299
===================================================================================================================

NET INTEREST INCOME AND MARGIN

Net interest income is defined as the difference between interest earned, primarily on loans, federal funds sold, securities purchased under agreement to resell and investments, and interest paid on funding sources, primarily deposits. Net interest income is our principal source of revenue. Net interest margin is defined as 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 is defined as interest expense as a percentage of average interest-earning assets.

The following tables set forth average assets, liabilities, minority interest and stockholders' equity, interest income and interest expense, average yields and rates, and the composition of our net interest margin for the three and nine months ended September 30, 2000 and 1999, respectively.

13

-------------------------------------------------------------------------------------------------------------------
                                        AVERAGE BALANCES, RATES AND YIELDS
-------------------------------------------------------------------------------------------------------------------
                                                            For the three months ended september 30,
                                         --------------------------------------------------------------------------
                                                         2000                                  1999
                                         ----------------------------------   -------------------------------------
                                                                  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)            $  1,500,532    $ 24,930       6.6%   $    730,271      $ 9,415       5.1%
   Investment securities:
     Taxable                               1,830,899      28,204       6.1       1,589,229       22,798       5.7
     Non-taxable (2)                         169,207       2,817       6.6         136,994        2,092       6.1
   Loans:
     Commercial                            1,379,895      42,912      12.4       1,373,122       37,193      10.7
     Real estate construction and term       116,694       3,025      10.3         132,975        3,310       9.9
     Consumer and other                       72,509       1,806       9.9          59,531        1,310       8.7
--------------------------------------  -----------------------------------   -------------------------------------
   Total loans                             1,569,098      47,743      12.1       1,565,628       41,813      10.6
--------------------------------------  -----------------------------------   -------------------------------------
Total interest-earning assets              5,069,736     103,694       8.1       4,022,122       76,118       7.5
--------------------------------------  -----------------------------------   -------------------------------------

Cash and due from banks                      258,205                               211,045
Allowance for loan losses                    (75,887)                              (63,725)
Other assets                                 155,065                                71,735
--------------------------------------  ------------                          ------------
Total assets                            $  5,407,119                          $  4,241,177
======================================  ============                          ============

Funding Sources:
Interest-Bearing Liabilities:
   NOW deposits                         $     62,223         185       1.2    $     37,776          193       2.0
   Regular money market deposits             359,571       1,657       1.8         386,360        2,546       2.6
   Bonus money market deposits             1,275,729       6,222       1.9       2,095,554       15,900       3.0
   Time deposits                             664,168       6,878       4.1         229,823        2,358       4.1
--------------------------------------  -----------------------------------   -------------------------------------
Total interest-bearing liabilities         2,361,691      14,942       2.5       2,749,513       20,997       3.0
Portion of noninterest-bearing
   funding sources                         2,708,045                             1,272,609
--------------------------------------  -----------------------------------      ----------------------------------
Total funding sources                      5,069,736      14,942       1.2       4,022,122       20,997       2.1
--------------------------------------  -----------------------------------    ------------------------------------
Noninterest-Bearing Funding Sources:
   Demand deposits                         2,399,315                             1,188,773
   Other liabilities                          87,762                                32,694
   Trust preferred securities (3)             38,565                                38,513
   Minority interest                           5,218                                     -
   Stockholders' equity                      514,568                               231,684
   Portion used to fund
      interest-earning assets             (2,708,045)                           (1,272,609)
--------------------------------------  -------------                         -------------
Total liabilities, minority interest
   and stockholders' equity             $  5,407,119                          $  4,241,177
======================================  ============                          ============
Net interest income and margin                          $ 88,752       7.0%                     $55,121       5.4%
======================================                  ========       ====                     =======       ====
Memorandum: Total deposits              $  4,761,006                          $  3,938,286
======================================  ============                          ============

(1) Includes average interest-bearing deposits in other financial institutions of $547 thousand and $227 thousand for the three months ended September 30, 2000 and 1999, respectively.
(2) Interest income on non-taxable investments is presented on a fully taxable-equivalent basis using the federal statutory rate of 35% in 2000 and 1999. The tax equivalent adjustments were $986 thousand and $732 thousand for the three months ended September 30, 2000 and 1999, respectively.
(3) The 8.25% annual distributions are recorded as a component of noninterest expense.

14

-------------------------------------------------------------------------------------------------------------------
                                         AVERAGE BALANCES, RATES AND YIELDS
-------------------------------------------------------------------------------------------------------------------
                                                            For the nine months ended september 30,
                                        ---------------------------------------------------------------------------
                                                           2000                                 1999
                                        -----------------------------------   -------------------------------------
                                                                   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)            $  1,272,057    $ 59,830       6.3%   $    607,892     $ 22,340       4.9%
     Investment securities:
       Taxable                             1,739,759      78,607       6.0       1,426,444       61,158       5.7
       Non-taxable (2)                       160,193       7,828       6.5         134,827        6,298       6.2
   Loans:
     Commercial                            1,385,003     124,075      12.0       1,382,358      104,738      10.1
     Real estate construction and term       125,781       9,877      10.5         136,276       10,351      10.2
     consumer and other                       71,458       5,173       9.7          58,004        3,783       8.7
--------------------------------------  ----------------------------------    -------------------------------------
   Total loans                             1,582,242     139,125      11.7       1,576,638      118,872      10.1
--------------------------------------  ----------------------------------    -------------------------------------
Total interest-earning assets              4,754,251     285,390       8.0       3,745,801      208,668       7.4
--------------------------------------  ----------------------------------    -------------------------------------

Cash and due from banks                      265,673                               182,238
Allowance for loan losses                    (73,771)                              (54,982)
Other real estate owned                            -                                   242
Other assets                                 156,144                                66,837
--------------------------------------  ------------                          ------------
Total assets                            $  5,102,297                          $  3,940,136
======================================  ============                          ============

Funding Sources:
Interest-Bearing Liabilities:
   NOW deposits                         $     57,710         629       1.5    $     27,396          353       1.7
   Regular money market deposits             389,971       5,349       1.8         357,115        7,124       2.7
   Bonus money market deposits             1,318,685      19,529       2.0       2,041,519       50,564       3.3
   Time deposits                             520,720      15,979       4.1         188,618        5,859       4.2
--------------------------------------  ----------------------------------    -------------------------------------
Total interest-bearing liabilities         2,287,086      41,486       2.4       2,614,648       63,900       3.3
Portion of noninterest-bearing
   funding sources                         2,467,165                             1,131,153
--------------------------------------  ----------------------------------    -------------------------------------
Total funding sources                      4,754,251      41,486       1.2       3,745,801       63,900       2.3
--------------------------------------  ----------------------------------    -------------------------------------


Noninterest-Bearing Funding Sources:
Demand deposits                            2,247,421                             1,034,637
Other liabilities                             87,490                                27,410
Trust preferred securities (3)                38,552                                38,501
Minority interest                              1,752                                     -
Stockholders' equity                         439,996                               224,940
Portion used to fund
   interest-earning assets                (2,467,165)                           (1,131,153)
--------------------------------------  ------------                          ------------
Total liabilities, minority interest
   and stockholders' equity             $  5,102,297                          $  3,940,136
======================================  ============                          ============

Net interest income and margin                          $243,904       6.9%                    $144,768       5.2%
======================================                  ========       ====                    ========       ====

Memorandum: Total deposits              $  4,534,507                          $  3,649,285
======================================  ============                          ============

(1) Includes average interest-bearing deposits in other financial institutions of $485 thousand and $199 thousand for the nine months ended September 30, 2000 and 1999, respectively.
(2) Interest income on non-taxable investments is presented on a fully taxable-equivalent basis using the federal statutory rate of 35% in 2000 and 1999. The tax equivalent adjustments were $2,740 thousand and $2,204 thousand for the nine months ended September 30, 2000 and 1999, respectively.
(3) The 8.25% annual distributions are recorded as a component of noninterest expense.

15

Net interest income is affected by changes in the amount and mix of interest-earning 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. The table also reflects the amount of change attributable to both volume and rate changes for the periods indicated. Because of the numerous simultaneous volume and rate changes during any period, it is not possible to allocate such changes between volume and rate. For this table, changes that are not solely due to either volume or rate are allocated in proportion to the percentage changes in average volume and average rate. Changes relating to investments in non-taxable municipal securities are presented on a fully taxable-equivalent basis using the federal statutory rate of 35% in 2000 and 1999.

                                                                     2000 Compared to 1999
                                             ----------------------------------------------------------------------
                                             Three Months Ended September 30,      Nine Months Ended September 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       $12,149   $ 3,366    $15,515       $ 29,871     $  7,619   $ 37,490
   Investment securities                         4,112     2,019      6,131         15,298        3,681     18,979
   Loans                                            91     5,839      5,930            427       19,826     20,253
-------------------------------------------------------------------------------------------------------------------
Increase in interest income                     16,352    11,224     27,576         45,596       31,126     76,722
-------------------------------------------------------------------------------------------------------------------

Interest Expense:
   NOW deposits                                     92      (100)        (8)           306          (30)       276
   Regular money market deposits                  (167)     (722)      (889)           270       (2,045)    (1,775)
   Bonus money market deposits                  (5,071)   (4,607)    (9,678)       (14,522)     (16,513)   (31,035)
   Time deposits                                 4,491        29      4,520         10,146          (26)    10,120
-------------------------------------------------------------------------------------------------------------------
Decrease in interest expense                      (655)   (5,400)    (6,055)        (3,800)     (18,614)   (22,414)
-------------------------------------------------------------------------------------------------------------------
Increase in net interest income                $17,007   $16,624    $33,631       $ 49,396     $ 49,740   $ 99,136
===================================================================================================================

Net interest income, on a fully taxable-equivalent basis, totaled $88.8 million for the third quarter of 2000, an increase of $33.6 million, or 61.0%, from the $55.1 million total for the third quarter of 1999. The increase in net interest income was the result of a $27.6 million, or 36.2%, increase in interest income, combined with a $6.1 million, or 28.8%, decrease in interest expense over the comparable prior year period.

The $27.6 million increase in interest income for the third quarter of 2000, as compared to the third quarter of 1999, was the result of a $16.4 million favorable volume variance and a $11.2 million favorable rate variance. The favorable volume variance resulted from a $1.0 billion, or 26.0%, increase in average interest-earning assets over the comparable prior year period. The increase in average interest-earning assets resulted primarily from strong growth in our deposits, which increased $822.7 million, or 20.9%, compared to the third quarter of 1999. The increase in average interest-earning assets was primarily centered in highly liquid federal funds sold, securities purchased under agreement to resell and investment securities, which collectively increased $1.0 billion.

Average investment securities for the third quarter of 2000 increased $273.9 million, or 15.9%, as compared to the 1999 third quarter, resulting in a $4.1 million favorable volume variance. The aforementioned strong growth in average deposits exceeded the growth in average loans over the past year, and generated excess funds that were partially invested in U.S. agency securities,

16

municipal securities and commercial paper. The growth in the investment portfolio reflected our actions to continue to increase as well as further diversify our portfolio of short-term investments.

Average federal funds sold and securities purchased under agreement to resell increased a combined $770.3 million, or 105.5%, in the third quarter of 2000 over the prior year third quarter, resulting in a $12.1 million favorable volume variance. This increase was also a result of the aforementioned strong growth in average deposits during the past year and reflected our actions to continue to further diversify our portfolio of short-term investments.

Favorable rate variances associated with each component of interest-earning assets combined to increase interest income by $11.2 million in the third quarter of 2000, as compared to the respective prior year period. Short-term market interest rates have increased on an overall basis during the first nine months of 2000. As a result, we earned higher yields during the third quarter of 2000 on federal funds sold, securities purchased under agreements to resell and our investment securities, a significant portion of which were short-term in nature, resulting in a $5.4 million favorable rate variance as compared to the prior year. The average yield on loans in third quarter 2000 also increased 150 basis points from the respective prior year third quarter, accounting for the remaining $5.8 million of the total favorable rate variance. This increase was primarily attributable to a 140 basis points increase in our weighted average prime rate in the third quarter of 2000 as compared to the similar prior year period. A significant portion of our loans continues to be prime rate-based as of September 30, 2000.

The yield on average interest-earning assets increased 60 basis points in the third quarter of 2000 from the comparable prior year period. This increase primarily resulted from a rise in the average yield on loans, largely due to an increase in our prime rate, as well as an increase in short-term market rates, which resulted in increased yields on federal funds sold and securities purchased under agreement to resell.

Total interest expense in the 2000 third quarter decreased $6.1 million from the third quarter of 1999. This decrease was due to a favorable volume variance of $0.7 million, combined with favorable rate variance of $5.4 million. The favorable volume variance resulted from a $387.8 million, or 14.1%, decrease in average interest-bearing liabilities in the third quarter of 2000 as compared to the third quarter of 1999. This decrease was largely concentrated in our bonus money market deposit product, which decreased $819.8 million, or 39.1%, partially offset by an increase in our time deposit product, which increased $434.3 million, or 189.0%. The favorable rate variance largely resulted from a reduction in the average rate paid on our bonus money market deposit product, from 3.0% in third quarter 1999 to 1.9% in third quarter 2000. The reduction in average rates paid on interest-bearing liabilities during the third quarter of 2000 as compared to the similar prior year period was primarily attributable to our lowering the average rate paid on our bonus money market deposit product by 110 basis points. We took this action in order to lower total assets and thereby increase our Tier 1 leverage capital ratio. See " Item 2. Capital Resources."

The average cost of funds paid in the third quarter of 2000 was 1.2%, down from the 2.1% paid in the third quarter of 1999. The decrease in the average cost of funds was largely due to a decrease of 110 basis points in the average rate paid on our bonus money market deposit product.

Net interest income, on a fully taxable-equivalent basis, totaled $243.9 million for the first nine months of 2000, an increase of $99.1 million, or 68.5%, from the $144.8 million total for the first nine months of 1999. The increase in net interest income was the result of a $76.7 million, or

17

36.8%, increase in interest income, combined with a $22.4 million, or 35.1%, decrease in interest expense over the comparable prior year period.

The $76.7 million increase in interest income for the first nine months of 2000, as compared to the first nine months of 1999, was the result of a $45.6 million favorable volume variance and a $31.1 million favorable rate variance. The favorable volume variance resulted from a $1.0 billion, or 26.9%, increase in average interest-earning assets over the comparable prior year period. The increase in average interest-earning assets was primarily centered in highly liquid federal funds sold, securities purchased under agreement to resell and investment securities, which collectively increased $1.0 billion.

The yield on average interest-earning assets increased 60 basis points in the first nine months of 2000 from the comparable prior year period. This increase primarily resulted from a rise in the average yield on loans, largely due to an increase in our prime rate, as well as an increase in short-term market rates, which resulted in increased yields on federal funds sold and securities purchased under agreement to resell.

Total interest expense in the 2000 first nine months decreased $22.4 million from the first nine months of 1999. This decrease was due to a favorable volume variance of $3.8 million, combined with a favorable rate variance of $18.6 million. The favorable volume variance resulted from a $327.6 million, or 12.5%, decrease in average interest-bearing liabilities in the first nine months of 2000 as compared to the first nine months of 1999. This decrease was largely concentrated in our bonus money market deposit product, which decreased $722.8 million, or 35.4%, partially offset by an increase in our time deposit product, which increased $332.1 million, or 176.1%. The favorable rate variance largely resulted from a reduction in the average rate paid on our bonus money market deposit product, from 3.3% in the first nine months 1999 to 2.0% in the first nine months 2000. The reduction in average rates paid on interest-bearing liabilities during the first nine months of 2000 as compared to the similar prior year period was primarily attributable to our lowering the average rate paid on our bonus money market deposit product by 130 basis points. We took this action in order to lower total assets and thereby increase our Tier 1 leverage capital ratio. See "Item 2. Capital Resources."

The average cost of funds paid in the first nine months of 2000 was 1.2%, down from the 2.3% paid in the first nine months of 1999. The decrease in the average cost of funds was largely due to a decrease of 130 basis points in the average rate paid on our bonus money market deposit product.

PROVISION FOR LOAN LOSSES

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

Our provision for loan losses totaled $22.7 million for the third quarter of 2000, a $1.1 million, or 5.2%, increase compared to the $21.6 million provision for the third quarter of 1999. The provision for loan losses increased $6.0 million, or 14.8%, to a total of $46.3 million for the first nine months of 2000 versus $40.3 million for the comparable 1999 period. See "Financial Condition - Credit Quality and the Allowance for Loan Losses" for additional related discussion.

18

NONINTEREST INCOME

The following table summarizes the components of noninterest income for the three and nine months ended September 30, 2000 and 1999:

                                                             Three Months Ended              Nine Months Ended
                                                                September 30,                   September 30,
                                                           ---------------------             ------------------
(Dollars in thousands)                                     2000             1999             2000          1999
-------------------------------------------------------------------------------------------------------------------
Disposition of client warrants                           $21,189           $ 6,177        $ 77,299       $ 8,687
Investment gains (losses)                                  3,817                 -          35,950          (243)
Client investment fees                                     9,324             1,241          23,180         1,719
Letter of credit and foreign exchange income               5,239             4,304          13,565        10,448
Deposit service charges                                      900               729           2,482         2,073
Other                                                      2,589               963           6,311         2,441
-------------------------------------------------------------------------------------------------------------------
Total noninterest income                                 $43,058           $13,414        $158,787       $25,125
===================================================================================================================

Noninterest income increased $29.6 million, or 221.0%, to a total of $43.1 million in the third quarter of 2000 versus $13.4 million in the prior year third quarter. This increase was largely due to a $15.0 million increase in income from the disposition of client warrants, combined with a $8.1 million increase in client investment fees and a $3.8 million increase in investment gains from venture capital funds. Noninterest income totaled $158.8 million for the first nine months of 2000, an increase of $133.7 million, or 532.0%, from the $25.1 million in the comparable 1999 period. This increase was largely due to a $68.6 million increase in income from the disposition of client warrants, combined with a $36.2 million increase in investment gains and a $21.5 million increase in client investment fees.

Income from the disposition of client warrants totaled $21.2 million and $77.3 million for the three and nine months ended September 30, 2000, compared to $6.2 million and $8.7 million for the respective 1999 periods. We have historically obtained rights to acquire stock, in the form of warrants, in certain clients, primarily, as part of negotiated credit facilities. The receipt of warrants does not change the loan covenants or other collateral control techniques we employ to mitigate the risk of a loan becoming nonperforming. The 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 our control, including the general condition of the public equity markets as well as the merger and acquisition environment. We therefore cannot predict the timing and amount of income with any degree of accuracy and it is likely to vary materially from period to period. During the first nine months of 2000 and throughout 1999, a portion of the income from the disposition of client warrants was offset by expenses related to our efforts to build an infrastructure sufficient to support present and prospective business activities, and was also offset by increases to the provision for loan losses in those periods.

We realized $3.8 million and $36.0 million in gains on sale of investment securities during the three and nine months ended September 30, 2000, related to venture capital fund and direct equity investments.

Client investment fees totaled $9.3 million and $23.2 million in the three and nine months ended September 30, 2000, compared to $1.2 million and $1.7 million in the similar prior year periods. Prior to June 1999, we only earned client investment fees on off-balance sheet funds that were invested by clients in investment securities such as U.S. Treasuries, U.S. agencies and commercial paper. Beginning in June 1999, we began offering off-balance sheet private label mutual fund

19

products to clients. We earn fees ranging from 35 to 50 basis points on the average balance in these products. At September 30, 2000, $11.4 billion in client funds were invested by clients off-balance sheet, including $8.0 billion in the mutual fund products. The significant growth in the amount of off-balance sheet client funds was explained by high levels of client liquidity attributable to a strong inflow of investment capital into the venture capital community during the past year. Additionally, growth in off-balance sheet client funds was also attributable to the expansion of our client base and increased marketing of off-balance sheet private label mutual fund products.

Letter of credit fees, foreign exchange fees and other trade finance income totaled $5.2 million in the third quarter of 2000, an increase of $0.9 million, or 21.7%, from the $4.3 million earned in the third quarter of 1999. For the first nine months of 2000, letter of credit fees, foreign exchange fees and other trade finance income totaled $13.6 million, an increase of $3.1 million, or 29.8%, compared to the $10.4 million in the first nine months of 1999. The growth reflects a concerted effort by our management to expand the penetration of trade finance-related products and services among our growing client base, a large percentage of which provide products and services in international markets.

Deposit service charges totaled $0.9 million for the three months ended September 30, 2000, an increase of $0.2 million, or 23.5%, from the $0.7 million reported in the third quarter of 1999. For the first nine months of 2000 and 1999 deposit service charges totaled $2.5 million and $2.1 million, respectively. Clients compensate us for depository services either through earnings credits computed on their demand deposit balances, or via explicit payments recognized by us as deposit service charges income.

Other noninterest income largely consists of service-based fee income, and increased $1.6 million, or 168.8%, to $2.6 million in the third quarter of 2000 from $1.0 million in the third quarter of 1999. For the nine months ended September 30, 2000, other noninterest income increased $3.9 million, or 158.5%, to $6.3 million from $2.4 million in the comparable 1999 period. The increase in other noninterest income was primarily due to corporate finance fees of $0.6 million and $1.8 million for the three and nine months ended September 30, 2000 and a higher volume of cash management and loan documentation services related to our growing client base.

NONINTEREST EXPENSE

Noninterest expense in the third quarter of 2000 totaled $50.0 million, a $20.3 million, or 68.3%, increase from the $29.7 million incurred in the comparable 1999 period. Noninterest expense totaled $146.5 million for the first nine months of 2000, an increase of $63.5 million, or 76.5%, over the $83.1 million total for the comparable 1999 period. We closely monitor our 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 retention and warrant incentive plans and 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 related to sales of investment securities. Our efficiency ratio for the 2000 third quarter was 44.6% versus 47.3% for the third quarter of 1999. Our efficiency ratio for the first nine months of 2000 was 45.7%, versus 51.2% for the comparable 1999 period. The following table presents the detail of noninterest expense and the incremental contribution of each line item to our efficiency ratio:

20

                                                                    Three Months Ended September 30,
                                                   ----------------------------------------------------------------
                                                             2000                                1999
                                                   ----------------------------      ------------------------------
                                                                  Percent of                         Percent of
                                                                   Adjusted                           Adjusted
(Dollars in thousands)                              Amount         Revenues            Amount         Revenues
-------------------------------------------------------------------------------------------------------------------
Compensation and benefits                            $28,359         26.8%              $17,591         28.5%
Professional services                                  5,166          4.9                 2,531          4.1
Business development and travel                        2,954          2.8                 1,500          2.4
Furniture and equipment                                2,798          2.6                 1,368          2.2
Net occupancy                                          2,305          2.2                 1,713          2.8
Advertising and promotion                              1,152          1.1                   474          0.8
Postage and supplies                                     874          0.8                   618          1.0
Telephone                                                849          0.8                   522          0.9
Trust preferred securities distributions                 825          0.8                   825          1.3
Other                                                  1,887          1.8                 2,015          3.3
-------------------------------------------------------------------------------------------------------------------
Total, excluding retention and
   warrant incentive plans                            47,169         44.6%               29,157         47.3%
Retention and warrant incentive plans                  2,855                                559
-------------------------------------------------------------------------------------------------------------------
Total noninterest expense                            $50,024                            $29,716
===================================================================================================================

                                                                    Nine Months Ended September 30,
                                                   ----------------------------------------------------------------
                                                             2000                                1999
                                                   ----------------------------      ------------------------------
                                                                  Percent of                         Percent of
                                                                   Adjusted                           Adjusted
(Dollars in thousands)                              Amount         Revenues            Amount         Revenues
-------------------------------------------------------------------------------------------------------------------
Compensation and benefits                           $ 80,102         27.9%              $47,857         30.0%
Professional services                                 13,889          4.8                 8,426          5.3
Business development and travel                        7,689          2.7                 4,356          2.7
Furniture and equipment                                7,689          2.7                 4,159          2.6
Net occupancy                                          6,351          2.2                 4,750          3.0
Postage and supplies                                   2,563          0.9                 1,850          1.2
Trust preferred securities distributions               2,475          0.9                 2,475          1.6
Advertising and promotion                              2,455          0.9                 1,808          1.1
Telephone                                              2,056          0.7                 1,361          0.9
Other                                                  5,635          2.0                 4,526          2.8
-------------------------------------------------------------------------------------------------------------------
Total, excluding retention and
   warrant incentive plans                           130,904         45.7%               81,568         51.2%
Retention and warrant incentive plans                 15,640                              1,214
Cost of other real estate owned                            -                                268
-------------------------------------------------------------------------------------------------------------------
Total noninterest expense                           $146,544                            $83,050
===================================================================================================================

Compensation and benefits expenses totaled $28.4 million in the third quarter of 2000, a $10.8 million, or 61.2%, increase over the $17.6 million incurred in the third quarter of 1999. For the first nine months of 2000, compensation and benefits expenses totaled $80.1 million, an increase of $32.2 million, or 67.4%, compared to $47.9 million for the comparable 1999 period. The increase in compensation and benefits expenses was largely the result of an increase in the number of average full-time equivalent (FTE) personnel we employ, combined with an increase in performance-based compensation associated with our incentive bonuses and employee stock ownership plan. Average FTE were 860 and 790 for the three and nine months ended September

21

30, 2000 versus 641 and 623 for the respective prior year periods. The increase in FTE personnel was primarily due to a combination of our efforts to develop and support new markets through geographic expansion, to develop and expand products, services and niches, and to build an infrastructure sufficient to support present and prospective business activities. Further growth in our FTE personnel is likely to occur during future years as a result of the continued expansion of our business activities.

Retention and warrant incentive plans expense totaled $2.9 million in the third quarter of 2000, a $2.3 million increase over the $0.6 million incurred in the third quarter of 1999. Retention and warrant incentive plans expense totaled $15.6 million for the first nine months of 2000, a $14.4 million increase over the $1.2 million incurred in the first nine months of 1999. Under the provisions of the retention and warrant incentive plans, employees are compensated with a fixed percentage of gains realized on warrant and certain venture capital fund and direct equity investments. The increase in retention and warrant plans expense was directly related to the increase in warrant, venture capital fund and direct equity investment gains over the comparable 1999 period.

Professional services expenses, which consist of costs associated with corporate legal services, litigation settlements, accounting and auditing services, consulting, and our Board of Directors, totaled $5.2 million and $13.9 million for the three and nine months ended September 30, 2000, an increase of $2.6 million, or 104.1%, and $5.5 million, or 64.8%, compared to $2.5 million and $8.4 million in the comparable 1999 periods. The increase in professional services expenses reflects the extensive efforts undertaken by us to continue to build and support our infrastructure, as well as evaluate and pursue new business opportunities. It also reflects our efforts in outsourcing several corporate functions, such as internal audit, facilities management and credit review, where we believe we can achieve a combination of cost savings and increased quality of service.

Business development and travel expenses totaled $3.0 million and $7.7 million for the three and nine months ended September 30, 2000, an increase of $1.5 million, or 96.9%, and $3.3 million, or 76.5%, compared to $1.5 million and $4.4 million in the comparable 1999 periods. The increase in business development and travel expenses was largely attributable to overall growth in our business, including both an increase in the number of FTE personnel and expansion into new geographic markets.

Occupancy, furniture and equipment expenses totaled $5.1 million for the three months ended September 30, 2000, an increase of $2.0 million, or 65.6%, from the $3.1 million for the three months ended September 30, 1999. Occupancy, furniture and equipment expenses totaled $14.0 million and $8.9 million for the nine months ended September 30, 2000 and 1999. The increase in occupancy, furniture and equipment expenses in 2000, as compared to 1999, was primarily the result of an increase in personnel as well as continued geographic expansion to develop and support new markets.

Trust preferred securities distributions totaled $0.8 million and $2.5 million for the three and nine months ended September 30, 2000 and 1999. These amounts resulted from the issuance of $40.0 million in cumulative trust preferred securities during the second quarter of 1998. The trust preferred securities pay a fixed rate quarterly distribution of 8.25% and have a maximum maturity of 30 years.

22

Other noninterest expense totaled $1.9 million and $5.6 million for the three and nine months ended September 30, 2000, compared to $2.0 million and $4.5 million for the respective 1999 periods. The increase in other noninterest expense for the first nine months ended September 30, 2000, was primarily attributable to an increase in data processing costs related to both the overall growth in the our business and several new business initiatives.

INCOME TAXES

The Company's effective tax rate was 40.1% and 40.5% for the third quarter and first nine months of 2000, compared to 36.4% and 38.4% in the three and nine month comparative prior year periods, respectively. The increase in our effective income tax rate was primarily attributable to the increase in pre-tax income as compared to the relatively constant level of non-taxable income from certain security investments.

FINANCIAL CONDITION

The Company's total assets were $5.5 billion at September 30, 2000, an increase of $907.7 million, or 19.7%, compared to $4.6 billion at December 31, 1999.

FEDERAL FUNDS SOLD AND SECURITIES PURCHASED UNDER AGREEMENT TO RESELL

Federal funds sold and securities purchased under agreement to resell totaled a combined $1.4 billion at September 30, 2000, an increase of $542.5 million, or 60.4%, compared to the $898.0 million outstanding at December 31, 1999. This increase was attributable to our investing excess funds, resulting from continued deposit growth during the first nine months of 2000, in these types of short-term liquid investments.

INVESTMENT SECURITIES

Investment securities totaled $2.0 billion at September 30, 2000, an increase of $273.5 million, or 15.7%, from the December 31, 1999 balance of $1.7 billion. This increase resulted from excess funds that were generated by growth in our deposits outpacing the growth in loans during the first nine months of 2000, and primarily consisted of U.S. agency securities, commercial paper, money market mutual funds, and municipal securities. The overall growth in the investment portfolio reflected our actions to increase, as well as to further diversify our portfolio.

The increase in market interest rates during the first nine months of 2000 resulted in a pre-tax unrealized loss on our available-for-sale fixed income securities investment portfolio of $26.0 million as of September 30, 2000, which was offset by a pre-tax unrealized gain of $28.2 million associated with our warrant securities. Because of the level of liquidity we maintain, we do not anticipate having to sell fixed income investment securities and incurring material losses on sales in future periods for liquidity purposes.

Based on October 31, 2000 market valuations, we had potential pre-tax warrant gains totaling $20.2 million related to 48 companies. We are restricted from exercising many of these warrants until the fourth quarter of 2000 and 2001. As of October 31, 2000, we held 1,251 warrants in 980 companies, and had made investments in 188 venture capital funds and direct equity investments in 53 companies. Many of these companies are non-public. Thus, for those companies for which a readily determinable market value cannot be obtained, we value those equity instruments at cost less any identified impairment. Additionally, we are typically precluded

23

from using any type of derivative instrument to secure the current unrealized gains associated with many of these equity instruments. Hence, the amount of income we realize from these equity instruments in future periods may vary materially from the current unrealized amount due to fluctuations in the market prices of the underlying common stock of these companies. Furthermore, we may reinvest some or all of the income realized from the disposition of these equity instruments in pursuing our business strategies.

LOANS

Total loans, net of unearned income, at September 30, 2000, were $1.6 billion, a slight decrease compared to the balance at December 31, 1999. While we continue to generate new loans in most of our technology and life sciences and special industry niche practices, as well as in specialized lending products, many of our clients, primarily in the technology and life sciences niche, have received significant cash inflows from the capital markets and venture capital community. Consequently, we have experienced higher than normal paydowns and loan payoffs, which has caused total loans to remain relatively unchanged from December 31, 1999 to September 30, 2000.

CREDIT QUALITY AND THE ALLOWANCE FOR LOAN LOSSES

Credit risk is defined as the possibility of sustaining a loss because other parties to the financial instrument fail to perform in accordance with the terms of the contract. While we follow underwriting and credit monitoring procedures which we believe are appropriate in growing and managing the loan portfolio, in the event of nonperformance by these other parties, our potential exposure to credit losses could significantly affect our consolidated financial position and earnings.

Lending money involves an inherent risk of nonpayment. Through the administration of loan policies and monitoring of the loan portfolio, our 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.

We regularly review and monitor 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. We identify potential problem credits and, based upon known information, we develop action plans.

We have established an evaluation process designed to determine the adequacy of the allowance for loan losses. This process attempts to assess the risk of losses inherent in the loan portfolio by segregating the allowance for loan losses into three components: "specific," "loss migration," and "general." The specific component is established by allocating a portion of the allowance for loan losses to individual classified credits on the basis of specific circumstances and assessments. The loss migration component is calculated as a function of the historical loss migration experience of the internal loan credit risk rating categories. The general component, composed of allocated and unallocated portions that supplements the first two components, includes: our management's judgment of the effect of current and forecasted economic conditions on the borrowers' abilities to repay, an evaluation of the allowance for loan losses in relation to the size of the overall loan portfolio, an evaluation of the composition of, and growth trends within, the loan portfolio,

24

consideration of the relationship of the allowance for loan losses to nonperforming loans, net charge-off trends, and other factors. While this evaluation process uses historical and other objective information, the classification of loans and the establishment of the allowance for loan losses, relies, to a great extent, on the judgment and experience of our management.

The allowance for loan losses totaled $73.8 million at September 30, 2000, an increase of $2.0 million, or 2.8%, compared to the $71.8 million balance at December 31, 1999. This increase was due to $46.3 million in additional provisions to the allowance for loan losses, offset by net charge-offs of $44.3 million for the first nine months of 2000.

We incurred $24.3 million and $51.8 million in gross charge-offs during the three and nine months ended September 30, 2000. The gross charge-offs in the first nine months of 2000 included six commercial credits totaling $32.7 million, of which $12.0 million was centered in our healthcare services niche and $20.7 million was related to three entertainment credits that are currently in litigation with credit insurers. Though we charged off these three entertainment credits, we anticipate full recoveries but the timing of the recoveries is currently unknown. Of the total gross charge-offs incurred during the first nine months of 2000, $13.0 million were classified as nonperforming loans at the end of 1999.

We believe our allowance for loan losses is adequate as of September 30, 2000. However, future changes in circumstances, economic conditions or other factors could cause us to increase or decrease the allowance for loan losses as deemed necessary. In addition, various regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. Such agencies may require us to make adjustments to the allowance for loan losses based on their judgment of information available to them at the time of their examination.

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

                                                                               September 30,         December 31,
(Dollars in thousands)                                                             2000                  1999
-------------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Loans past due 90 days or more                                                     $     -               $   911
Nonaccrual loans                                                                    18,495                27,552
-------------------------------------------------------------------------------------------------------------------
Total nonperforming assets                                                         $18,495               $28,463
===================================================================================================================

Nonperforming loans as a percentage of total loans                                     1.2%                  1.7%
Nonperforming assets as a percentage of total assets                                   0.3%                  0.6%

Allowance for loan losses:                                                         $73,800               $71,800
     As a percentage of total loans                                                    4.6%                  4.4%
     As a percentage of nonaccrual loans                                             399.0%                260.6%
     As a percentage of nonperforming loans                                          399.0%                252.3%

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Nonperforming loans totaled $18.5 million, or 1.2% of total loans, at September 30, 2000, a decrease of $10.0 million or 35.0%, from the prior year-end total of $28.5 million, or 1.7% of total loans. Nonperforming loans at September 30, 2000 include one commercial credit totaling $6.9 million. This credit is in our healthcare services niche and has been nonperforming since the 2000 first quarter. Our management believes this credit is adequately secured with collateral and reserves, and that any future charge-offs associated with this loan will not have a material impact on our future net income.

In addition to the loans disclosed in the foregoing analysis, we have identified six loans totaling $14.0 million, that, on the basis of information known to us, were judged to have a higher than normal risk of becoming nonperforming. We are not aware of any other loans 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.

DEPOSITS

Total deposits were $4.8 billion at September 30, 2000, an increase of $690.5 million, or 16.8%, from the prior year-end total of $4.1 billion. A significant portion of the increase in deposits during the first nine months of 2000 was due to increases in both the noninterest-bearing demand and time deposit products, which increased $462.8 million, or 24.0%, and $404.5 million, or 138.4%, respectively. The growth in noninterest-bearing demand deposits was explained by growth in the number of clients served by us during the first nine months of 2000. The increase in time deposits was due to an increase in cash secured letters of credit issued by Silicon Valley Bank on behalf of our clients.

MARKET RISK MANAGEMENT

Interest rate risk is the most significant market risk impacting us. Our monitoring activities related to managing interest rate risk include both interest rate sensitivity "gap" analysis and the use of a simulation model to measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as our market value of portfolio equity (MVPE). See our 1999 Annual Report on Form 10-K for disclosure of the quantitative and qualitative information regarding the interest rate risk inherent in interest rate risk sensitive instruments as of December 31, 1999. There have been no significant changes in the assumptions or results of the MVPE calculation used by us in monitoring interest rate risk as of September 30, 2000. Other types of market risk affecting us in the normal course of our business activities include foreign currency exchange risk and equity price risk. The impact on us, resulting from these other two types of market risks, is deemed immaterial. We do not maintain a portfolio of trading securities and do not intend to engage in such activities in the immediate future.

LIQUIDITY

Another important objective of asset/liability management is to manage liquidity. The objective of liquidity management is to ensure that funds are available in a timely manner to meet loan demand and depositors' needs, and to service other liabilities as they come due, without causing an undue amount of cost or risk, and without causing a disruption to normal operating conditions.

We regularly assess the amount and likelihood of projected funding requirements through a review of factors such as historical deposit volatility and funding patterns, present and forecasted

26

market and economic conditions, individual client funding needs, and existing and planned business activities. Our asset/liability committee (ALCO) provides oversight to the liquidity management process and recommends policy guidelines, subject to board of directors approval, and courses of action to address our actual and projected liquidity needs.

The ability to attract a stable, low-cost base of deposits is our primary source of liquidity. Other sources of liquidity available to us include short-term borrowings, which consist of federal funds purchased, security repurchase agreements and other short-term borrowing arrangements. Our liquidity requirements can also be met through the use of our portfolio of liquid assets. Our definition of liquid assets includes cash and cash equivalents in excess of the minimum levels necessary to carry out normal business operations, federal funds sold, securities purchased under resale agreements, investment securities maturing within six months, investment securities eligible and available for pledging purposes with a maturity in excess of six months, and anticipated near term cash flows from investments.

Our policy guidelines provide that liquid assets as a percentage of total deposits should not fall below 20.0%. At September 30, 2000, the Bank's ratio of liquid assets to total deposits was 66.6%. This ratio is well in excess of our minimum policy guidelines and is higher than the comparable ratio of 55.7% as of December 31, 1999. In addition to monitoring the level of liquid assets relative to total deposits, we also utilize other policy measures in liquidity management activities. As of September 30, 2000, we were in compliance with all of these policy measures.

CAPITAL RESOURCES

Our management seeks to maintain adequate capital to support anticipated asset growth and credit risks, and to ensure that Silicon and Silicon Valley Bank are in compliance with all regulatory capital guidelines. Our primary sources of new capital include the issuance of trust preferred securities and common stock, as well as retained earnings.

In August, 2000, we issued 2.3 million shares of common stock at $42.19 per share. We received proceeds of $91.0 million related to the sale of these securities, net of underwriting commission and other offering expenses.

In December 1999 we issued 2.8 million shares of common stock at $21.00 per share. In January 2000, we issued an additional 0.4 million shares at $21.00 per share in relation to the exercise of an over-allotment option by the underwriters for that offering. Proceeds from the sale of these securities totaled $63.3 million, net of underwriting commissions and other offering expenses. In addition, in 1998 we issued $40.0 million face amount in cumulative trust preferred securities through a newly formed special-purpose trust, SVB Capital I. These securities had an offering price (liquidation amount) of $25 per security and distributions at a fixed rate of 8.25% are paid quarterly. The securities have a maximum maturity of 30 years and qualify as Tier 1 capital under the capital guidelines of the Federal Reserve Board. We received proceeds of $38.5 million related to the sale of these securities, net of underwriting commissions and other offering expenses. The trust preferred securities are presented as a separate line item in the consolidated balance sheets under the caption "Company obligated mandatorily redeemable trust preferred securities of subsidiary trust holding solely junior subordinated debentures."

Stockholders' equity totaled $571.6 million at September 30, 2000, an increase of $202.8 million, or 55.0%, from the $368.9 million balance at December 31, 1999. This increase was primarily due to net income of $123.3 million for the nine months ended September 30, 2000 and net

27

proceeds from the issuance of common stock of $113.5 million, partially offset by a decrease in the after-tax net unrealized gains on available-for-sale securities of $40.3 million. We have not paid a cash dividend on our common stock since 1992, and we do not have any material commitments for capital expenditures as of September 30, 2000.

Both Silicon and Silicon Valley Bank are subject to capital adequacy guidelines issued by the Federal Reserve Board. Under these capital guidelines, the minimum total risk-based capital ratio and Tier 1 risk-based capital ratio requirements are 10.0% and 6.0%, respectively, of risk-weighted assets and certain off-balance sheet items for a well capitalized depository institution.

The Federal Reserve Board has also 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.

Both Silicon's and Silicon Valley Bank's capital ratios were in excess of regulatory guidelines for a well capitalized depository institution as of September 30, 2000, and December 31, 1999. Capital ratios for Silicon and Silicon Valley Bank are set forth below:

                                                                                September 30,       December 31,
                                                                                    2000                1999
----------------------------------------------------------------------------------------------------------------
Silicon Valley Bancshares:
Total risk-based capital ratio..................................................    20.4%               15.5%
Tier 1 risk-based capital ratio.................................................    19.1%               14.3%
Tier 1 leverage ratio...........................................................    11.6%                8.8%

Silicon Valley Bank:
Total risk-based capital ratio..................................................    15.2%               14.0%
Tier 1 risk-based capital ratio.................................................    14.0%               12.7%
Tier 1 leverage ratio...........................................................     8.4%                7.9%

The increase in the total risk-based capital ratio, the Tier 1 risk-based capital ratio and the Tier 1 leverage ratio from December 31, 1999 to September 30, 2000 was primarily attributable to an increase in Tier 1 capital. This increase was due to both the issuance of common stock, which generated net proceeds of $113.5 million, and internally generated capital, primarily net income of $123.3 million.

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PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

There were no legal proceedings requiring disclosure pursuant to this item pending at September 30, 2000, 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

None

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS:

10.45   Silicon Valley Bancshares 1997 Equity Incentive Plan, amended
        as of July 20, 2000.

10.46   Change in Control Severance Benefits Policy, effective
        August 18, 2000.

27.1    Financial Data Schedule

(b) The Company filed the following reports on Form 8-K during the third quarter of 2000:

1. A report on Form 8-K was filed on July 24, 2000, whereby the Company announced financial results for the three and six months ended June 30, 2000.

2. On July 25, 2000, the Company filed a report on Form 8-K to announce its investment in the Nippon Credit Bank and partnering of the Company with the Softbank in connection with the investment in the Nippon Credit Bank. Also, the Company announced that SVB Strategic Investors Fund, L.P., completed its first close of $64.5 million on June 21, 2000.

29

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:  November 14, 2000                    /s/ Donal D. Delaney
                                            -----------------------------------
                                            Donal D. Delaney
                                            Controller
                                            (Principal Accounting Officer)

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Exhibit 10.45

SILICON VALLEY BANCSHARES

1997 EQUITY INCENTIVE PLAN

ADOPTED DECEMBER 19, 1996
APPROVED BY SHAREHOLDERS APRIL 17, 1997
AMENDED AS OF SEPTEMBER 8, 1997
AMENDED AS OF JULY 20, 2000

1. PURPOSES.

(a) The purpose of the Plan is to provide a means by which selected Employees and Directors of and Consultants to the Company, and its Affiliates, may be given an opportunity to benefit from increases in value of the stock of the Company through the granting of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses, (iv) rights to purchase restricted stock, and (v) stock appreciation rights, all as defined below.

(b) The Company, by means of the Plan, seeks to retain the services of persons who are now Employees or Directors of or Consultants to the Company or its Affiliates, to secure and retain the services of new Employees, Directors and Consultants, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

(c) The Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board or any Committee to which responsibility for administration of the Plan has been delegated pursuant to subsection 3(c), be either (i) Options granted pursuant to Section 6 hereof, including Incentive Stock Options and Nonstatutory Stock Options, (ii) stock bonuses or rights to purchase restricted stock granted pursuant to Section 7 hereof, or (iii) stock appreciation rights granted pursuant to Section 8 hereof. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and in such form as issued pursuant to Section 6, and a separate certificate or certificates will be issued for shares purchased on exercise of each type of Option.

2. DEFINITIONS.

(a) "AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code.

(b) "BOARD" means the Board of Directors of the Company.

(c) "CODE" means the Internal Revenue Code of 1986, as amended.

(d) "COMMITTEE" means a Committee appointed by the Board in accordance with subsection 3(c) of the Plan.

(e) "COMPANY" means Silicon Valley Bancshares, a California corporation.

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(f) "CONCURRENT STOCK APPRECIATION RIGHT" or "CONCURRENT RIGHT" means a right granted pursuant to subsection 8(b)(2) of the Plan.

(g) "CONSULTANT" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only a director's fee by the Company or who are not compensated by the Company for their services as Directors.

(h) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means that the service of an individual to the Company, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Board or the chief executive officer of the Company may determine, in that party's sole discretion, whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any leave of absence approved by the Board or the chief executive officer of the Company, including sick leave, military leave, or any other personal leave; or (ii) transfers between the Company, Affiliates or their successors.

(i) "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total compensation is required to be reported to shareholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

(j) "DIRECTOR" means a member of the Board.

(k) "EMPLOYEE" means any person, including Officers and Directors, employed by the Company or any Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company.

(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(m) "FAIR MARKET VALUE" means, as of any date, the value of the common stock of the Company determined as follows:

(1) If the common stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of common stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Company's common stock) on the day of determination, as reported in THE WALL STREET JOURNAL or such other source as the Board deems reliable.

(2) In the absence of such markets for the common stock, the Fair Market Value shall be determined in good faith by the Board.

(n) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(o) "INDEPENDENT STOCK APPRECIATION RIGHT" or "INDEPENDENT RIGHT" means a right granted pursuant to subsection 8(b)(3) of the Plan.

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(p) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a current Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act ("Regulation S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3.

(q) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as an Incentive Stock Option.

(r) "OFFICER" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(s) "OPTION" means a stock option granted pursuant to the Plan.

(t) "OPTION AGREEMENT" means a written agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.

(u) "OPTIONEE" means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(v) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current employee of the Company or an "affiliated corporation" (within the meaning of the Treasury regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time, and is not currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director, or (ii) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code.

(w) "PLAN" means this 1997 Equity Incentive Plan.

(x) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect with respect to the Company at the time discretion is being exercised regarding the Plan.

(y) "SECURITIES ACT" means the Securities Act of 1933, as amended.

(z) "STOCK APPRECIATION RIGHT" means any of the various types of rights which may be granted under Section 8 of the Plan.

(aa) "STOCK AWARD" means any right granted under the Plan, including any Option, any stock bonus, any right to purchase restricted stock, and any Stock Appreciation Right.

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(bb) "STOCK AWARD AGREEMENT" means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.

(cc) "TANDEM STOCK APPRECIATION RIGHT" or "TANDEM RIGHT" means a right granted pursuant to subsection 8(b)(1) of the Plan.

3. ADMINISTRATION.

(a) The Plan shall be administered by the Board unless and until the Board delegates administration to a Committee, as provided in subsection 3(c).

(b) The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

(1) To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; whether a Stock Award will be an Incentive Stock Option, a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock, a Stock Appreciation Right, or a combination of the foregoing; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock pursuant to a Stock Award; whether a person shall be permitted to receive stock upon exercise of an Independent Stock Appreciation Right; and the number of shares with respect to which a Stock Award shall be granted to each such person.

(2) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(3) To amend the Plan or a Stock Award as provided in Section 14.

(4) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan.

(c) The Board may delegate administration of the Plan to a committee or committees of the Board composed of one (1) or more members (the "Committee"). In the discretion of the Board, the Committee may be composed of two (2) or more Non-Employee Directors and/or Outside Directors. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, (and references in this Plan to the Board shall thereafter be to the Committee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.

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4. SHARES SUBJECT TO THE PLAN.

(a) Subject to the provisions of Section 13 relating to adjustments upon changes in stock, the stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate nine hundred thousand (900,000) shares of the Company's common stock. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. Shares subject to Stock Appreciation Rights exercised in accordance with Section 8 of the Plan shall not be available for subsequent issuance under the Plan.

(b) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

5. ELIGIBILITY.

(a) Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees. Stock Awards other than Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees, Directors or Consultants.

(b) No person shall be eligible for the grant of an Incentive Stock Option if, at the time of grant, such person owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of such stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

(c) Subject to the provisions of Section 13 relating to adjustments upon changes in stock, no person shall be eligible to be granted Options and Stock Appreciation Rights covering more than two hundred fifty thousand (250,000) shares of the Company's common stock in any calendar year.

6. OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

(b) PRICE. The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted; the exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than that set forth in the

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preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

(c) CONSIDERATION. The purchase price of stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised, or (ii) at the discretion of the Board or the Committee, at the time of the grant of the Option, (A) by delivery to the Company of other common stock of the Company, (B) according to a deferred payment or other arrangement (which may include, without limiting the generality of the foregoing, the use of other common stock of the Company) with the person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (C) in any other form of legal consideration acceptable to the Board. In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement.

(d) TRANSFERABILITY. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the Incentive Stock Option is granted only by such person. A Nonstatutory Stock Option shall only be transferable by the Optionee upon such terms and conditions as are set forth in the Option Agreement for such Nonstatutory Stock Option, as the Board or the Committee shall determine in its sole discretion. The person to whom the Option is granted may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option.

(e) VESTING. The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal). The Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable ("vest") with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was not fully exercised. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised.

(f) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event an Optionee's Continuous Status as an Employee, Director or Consultant terminates (other than upon the Optionee's death or disability or for Cause), the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionee's Continuous Status as an Employee, Director or Consultant (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionee is not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan.

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In the event an Optionee's Continuous Status as an Employee, Director or Consultant terminates for Cause, then the Option shall immediately terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. "Cause" shall be defined as an act of embezzlement, fraud, dishonesty, or breach of fiduciary duty to the Company, a deliberate disregard of the rules of the Company which results in loss, damage or injury to the Company, any unauthorized disclosure of any of the secrets or confidential information of the Company, inducing any client or customer of the Company to break any contract with the Company or inducing any principal for whom the Company acts as agent to terminate such agency relations, or engaging in any conduct which constitutes unfair competition with the Company, or any act which results in Optionee being removed from any office of the Company by any bank regulatory agency.

An Optionee's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee's Continuous Status as an Employee, Director, or Consultant (other than upon the Optionee's death or disability) would result in liability under Section 16(b) of the Exchange Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in the Option Agreement, or (ii) the tenth (10th) day after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee's Continuous Status as an Employee, Director or Consultant (other than upon the Optionee's death or disability) would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option, or (ii) the expiration of a period of three (3) months after the termination of the Optionee's Continuous Status as an Employee, Director or Consultant during which the exercise of the Option would not be in violation of such registration requirements.

(g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status as an Employee, Director or Consultant terminates as a result of the Optionee's disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionee is not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan.

(h) DEATH OF OPTIONEE. In the event an Optionee's Continuous Status as an Employee, Director or Consultant terminates as a result of Optionee's death, the Option may be exercised (to the extent the Optionee was entitled to exercise the Option as of the date of death) by the Optionee's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionee's death pursuant to subsection 6(d), but only within the period ending on the earlier of (i) the date twelve (12) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the

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Option shall revert to and again become available for issuance under the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan.

(i) EARLY EXERCISE. The Option may, but need not, include a provision whereby the Optionee may elect at any time while an Employee, Director or Consultant to exercise the Option as to any part or all of the shares subject to the Option prior to the full vesting of the Option. Any unvested shares so purchased may be subject to a repurchase right in favor of the Company or to any other restriction the Board determines to be appropriate.

7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.

Each stock bonus or restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate. The terms and conditions of stock bonus or restricted stock purchase agreements may change from time to time, and the terms and conditions of separate agreements need not be identical, but each stock bonus or restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions as appropriate:

(a) PURCHASE PRICE. The purchase price under each restricted stock purchase agreement shall be such amount as the Board or Committee shall determine and designate in such Stock Award Agreement, but in no event shall the purchase price be less than eighty-five percent (85%) of the stock's Fair Market Value on the date such award is made. Notwithstanding the foregoing, the Board or the Committee may determine that eligible participants in the Plan may be awarded stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its benefit.

(b) TRANSFERABILITY. Rights under a stock bonus or restricted stock purchase agreement shall be transferable by the grantee only upon such terms and conditions as are set forth in the applicable Stock Award Agreement, as the Board or the Committee shall determine in its discretion, so long as stock awarded under such Stock Award Agreement remains subject to the terms of the agreement.

(c) CONSIDERATION. The purchase price of stock acquired pursuant to a stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the discretion of the Board or the Committee, according to a deferred payment or other arrangement with the person to whom the stock is sold; or (iii) in any other form of legal consideration that may be acceptable to the Board or the Committee in its discretion. Notwithstanding the foregoing, the Board or the Committee to which administration of the Plan has been delegated may award stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its benefit.

(d) VESTING. Shares of stock sold or awarded under the Plan may, but need not, be subject to a repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board or the Committee.

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(e) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event a Participant's Continuous Status as an Employee, Director or Consultant terminates, the Company may repurchase or otherwise reacquire any or all of the shares of stock held by that person which have not vested as of the date of termination under the terms of the stock bonus or restricted stock purchase agreement between the Company and such person.

8. STOCK APPRECIATION RIGHTS.

(a) The Board or Committee shall have full power and authority, exercisable in its sole discretion, to grant Stock Appreciation Rights under the Plan to Employees or Directors of or Consultants to, the Company or its Affiliates. To exercise any outstanding Stock Appreciation Right, the holder must provide written notice of exercise to the Company in compliance with the provisions of the Stock Award Agreement evidencing such right. Except as provided in subsection 5(c), no limitation shall exist on the aggregate amount of cash payments the Company may make under the Plan in connection with the exercise of a Stock Appreciation Right.

(b) Three types of Stock Appreciation Rights shall be authorized for issuance under the Plan:

(1) TANDEM STOCK APPRECIATION RIGHTS. Tandem Stock Appreciation Rights will be granted appurtenant to an Option, and shall, except as specifically set forth in this Section 8, be subject to the same terms and conditions applicable to the particular Option grant to which it pertains. Tandem Stock Appreciation Rights will require the holder to elect between the exercise of the underlying Option for shares of stock and the surrender, in whole or in part, of such Option for an appreciation distribution. The appreciation distribution payable on the exercised Tandem Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the Option surrender) in an amount up to the excess of (A) the Fair Market Value (on the date of the Option surrender) of the number of shares of stock covered by that portion of the surrendered Option in which the Optionee is vested over (B) the aggregate exercise price payable for such vested shares.

(2) CONCURRENT STOCK APPRECIATION RIGHTS. Concurrent Rights will be granted appurtenant to an Option and may apply to all or any portion of the shares of stock subject to the underlying Option and shall, except as specifically set forth in this Section 8, be subject to the same terms and conditions applicable to the particular Option grant to which it pertains. A Concurrent Right shall be exercised automatically at the same time the underlying Option is exercised with respect to the particular shares of stock to which the Concurrent Right pertains. The appreciation distribution payable on an exercised Concurrent Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the exercise of the Concurrent Right) in an amount equal to such portion as shall be determined by the Board or the Committee at the time of the grant of the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Concurrent Right) of the vested shares of stock purchased under the underlying Option which have Concurrent Rights appurtenant to them over (B) the aggregate exercise price paid for such shares.

(3) INDEPENDENT STOCK APPRECIATION RIGHTS. Independent Rights will be granted independently of any Option and shall, except as specifically set forth in this Section 8, be subject to the same terms and conditions applicable to Nonstatutory Stock Options as set forth in

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Section 6. They shall be denominated in share equivalents. The appreciation distribution payable on the exercised Independent Right shall be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Independent Right) of a number of shares of Company stock equal to the number of share equivalents in which the holder is vested under such Independent Right, and with respect to which the holder is exercising the Independent Right on such date, over (B) the aggregate Fair Market Value (on the date of the grant of the Independent Right) of such number of shares of Company stock. The appreciation distribution payable on the exercised Independent Right shall be in cash or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the exercise of the Independent Right.

9. CANCELLATION AND RE-GRANT OF OPTIONS.

(a) The Board or the Committee shall have the authority to effect, at any time and from time to time, (i) the repricing of any outstanding Options and/or any Stock Appreciation Rights under the Plan and/or (ii) with the consent of the affected holders of Options and/or Stock Appreciation Rights, the cancellation of any outstanding Options and/or any Stock Appreciation Rights under the Plan and the grant in substitution therefor of new Options and/or Stock Appreciation Rights under the Plan covering the same or different numbers of shares of stock, but having an exercise price per share not less than eighty-five percent (85%) of the Fair Market Value (one hundred percent (100%) of the Fair Market Value in the case of an Incentive Stock Option) or, in the case of a 10% shareholder (as described in subsection 5(b)) receiving a new grant of an Incentive Stock Option, not less than one hundred ten percent (110%) of the Fair Market Value) per share of stock on the new grant date. Notwithstanding the foregoing, the Board or the Committee may grant an Option and/or Stock Appreciation Right with an exercise price lower than that set forth above if such Option and/or Stock Appreciation Right is granted as part of a transaction to which section 424(a) of the Code applies.

(b) Shares subject to an Option or Stock Appreciation Right canceled under this Section 9 shall continue to be counted against the maximum award of Options and Stock Appreciation Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The repricing of an Option and/or Stock Appreciation Right under this Section 9, resulting in a reduction of the exercise price, shall be deemed to be a cancellation of the original Option and/or Stock Appreciation Right and the grant of a substitute Option and/or Stock Appreciation Right; in the event of such repricing, both the original and the substituted Options and Stock Appreciation Rights shall be counted against the maximum awards of Options and Stock Appreciation Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The provisions of this subsection 9(b) shall be applicable only to the extent required by Section 162(m) of the Code.

10. COVENANTS OF THE COMPANY.

(a) During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of stock required to satisfy such Stock Awards.

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(b) The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the Stock Award; provided, however, that this undertaking shall not require the Company to register under the Securities Act either the Plan, any Stock Award or any stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such Stock Awards unless and until such authority is obtained.

11. USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of stock pursuant to Stock Awards shall constitute general funds of the Company.

12. MISCELLANEOUS.

(a) The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest pursuant to subsection 6(e), 7(d) or 8(b), notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.

(b) Neither an Employee, Director or Consultant nor any person to whom a Stock Award is transferred under subsection 6(d), 7(b), or 8(b) shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Stock Award unless and until such person has satisfied all requirements for exercise of the Stock Award pursuant to its terms.

(c) Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Employee, Director, Consultant or other holder of Stock Awards any right to continue in the employ of the Company or any Affiliate (or to continue acting as a Director or Consultant) or shall affect the right of the Company or any Affiliate to terminate the employment of any Employee with or without cause the right of the Company's Board of Directors and/or the Company's shareholders to remove any Director as provided in the Company's Bylaws and the provisions of the California Corporations Code, or the right to terminate the relationship of any Consultant subject to the terms of such Consultant's agreement with the Company or Affiliate.

(d) To the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year under all plans of the Company and its Affiliates exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

(e) The Company may require any person to whom a Stock Award is granted, or any person to whom a Stock Award is transferred pursuant to subsection 6(d), 7(b) or 8(b), as a condition of exercising or acquiring stock under any Stock Award, (1) to give written assurances satisfactory to the Company as to such person's knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and

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experienced in financial and business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (2) to give written assurances satisfactory to the Company stating that such person is acquiring the stock subject to the Stock Award for such person's own account and not with any present intention of selling or otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i) the issuance of the shares upon the exercise or acquisition of stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock.

(f) To the extent provided by the terms of a Stock Award Agreement, the person to whom a Stock Award is granted may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under a Stock Award by any of the following means or by a combination of such means: (1) tendering a cash payment; (2) authorizing the Company to withhold shares from the shares of the common stock otherwise issuable to the participant as a result of the exercise or acquisition of stock under the Stock Award; or (3) delivering to the Company owned and unencumbered shares of the common stock of the Company.

13. ADJUSTMENTS UPON CHANGES IN STOCK.

(a) If any change is made in the stock subject to the Plan, or subject to any Stock Award (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the type(s) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person during any calendar year pursuant to subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the type(s) and number of securities and price per share of stock subject to such outstanding Stock Awards. Such adjustments shall be made by the Board or the Committee, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company.)"

(b) In the event of "Change in Control," unless otherwise determined by the Board or Committee at the time of grant, all outstanding Stock Awards shall immediately become one hundred percent (100%) vested, and the Board shall notify all participants that their outstanding Stock Awards shall be fully exercisable for a period of three (3) months (or such other period of time not exceeding six (6) months as is determined by the Board at the time of grant) from the date of such notice, and any unexercised Stock Awards shall terminate upon the expiration of such period.

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

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(1) a merger or consolidation of the Company or Bancshares with any other corporation, other than a merger or consolidation which would result in beneficial owners of the total voting power in the election of directors represented by the voting securities ("Voting Securities") of the Company or Bancshares (as the case may be) outstanding immediately prior thereto continuing to beneficially own securities representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total Voting Securities of the Company or Bancshares, or of such surviving entity, outstanding immediately after such merger or consolidation;

(2) the filing of a plan of liquidation or dissolution of the Company or the closing of the sale, lease, exchange or other transfer or disposition by the Company or Bancshares of all or substantially all of the Company's assets;

(3) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Bancshares, (B) a corporation owned directly or indirectly by the shareholders of Bancshares in substantially the same proportions as their beneficial ownership of stock in Bancshares, or (C) Bancshares (with respect to Bancshares' ownership of the stock of the Company), is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company or Bancshares representing 50% or more of the Voting Securities; or

(4) any person (as such term is used in Sections 13(d) or 14(d) of the Exchange Act), other than (a) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Bancshares, (b) a corporation owned directly or indirectly by the shareholders of Bancshares in substantially the same proportions as their ownership of stock in Bancshares, or
(c) Bancshares (with respect to Bancshares' ownership of the stock of the Company) is or becomes the beneficial owner (within the meaning or Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company or Bancshares representing 25% or more of the Voting Securities of such corporation, and within twelve (12) months of the occurrence of such event, a change in the composition of the Board of Directors of Bancshares occurs as a result of which sixty percent (60%) or fewer of the directors are Incumbent Directors.

"Incumbent Directors" shall mean directors who either

(A) are directors of the Company as of the date hereof;

(B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the directors of the Company who are Incumbent Directors described in (A) above at the time of such election or nomination; or

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(C) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the directors of the Company who are Incumbent Directors described in (A) or (B) above at the time of such election or nomination.

Notwithstanding the foregoing, "Incumbent Directors" shall not include an individual whose election or nomination to the Board occurs in order to provide representation for a person or group of related persons who have initiated or encouraged an actual or threatened proxy contest relating to the election of directors of the Company.

14. AMENDMENT OF THE PLAN AND STOCK AWARDS.

(a) The Board at any time, and from time to time, may amend the Plan and/or some or all outstanding Stock Awards granted under the Plan. However, except as provided in paragraph 13 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary for the Plan to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

(b) The Board may in its sole discretion submit any other amendment to the Plan for shareholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations promulgated thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

(c) It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.

(d) Rights and obligations under any Stock Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the Stock Award was granted and (ii) such person consents in writing.

(e) The Board at any time, and from time to time, may amend the terms of any one or more Stock Award; provided, however, that the rights and obligations under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom the Stock Award was granted and (ii) such person consents in writing.

15. TERMINATION OR SUSPENSION OF THE PLAN.

(a) The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on December 18, 2006 which shall be within ten (10) years from the date the Plan is adopted by the Board or approved by the shareholders of the Company, whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

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(b) Rights and obligations under any Stock Award granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except with the written consent of the person to whom the Stock Award was granted.

16. EFFECTIVE DATE OF PLAN.

The Plan shall become effective as determined by the Board, but no Stock Awards granted under the Plan shall be exercised unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board, and, if required, an appropriate permit has been issued by the Commissioner of Corporations of the State of California.

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Exhibit 10.46

CHANGE IN CONTROL
SEVERANCE BENEFITS POLICY

THIS CHANGE IN CONTROL SEVERANCE BENEFITS POLICY (the "POLICY") is adopted this 18th day of August, 2000 by SILICON VALLEY BANK, a California corporation (the "COMPANY"), a wholly owned subsidiary of Silicon Valley Bancshares, a California corporation ("BANCSHARES"). This Policy is intended to provide Eligible Employees with the compensation and benefits described herein upon the occurrence of specific events.

Certain capitalized terms used in this Policy are defined in Article VI.

ARTICLE I

ELIGIBLE EMPLOYEES

1.1 Eligible Employees are all employees of the Company. Notwithstanding the foregoing, the employees of any other wholly owned subsidiary of Bancshares or subsidiary of the Company also shall be Eligible Employees under this Policy if such subsidiary is so designated by the Company and agrees in writing to be bound by the terms and conditions of this Policy.

1.2 The rights and obligations of the Eligible Employees and the Company contained in Articles II through VI shall survive any termination of an Eligible Employee for twenty-four (24) months following a Change in Control (as hereinafter defined), or such later period as may be required so that all benefits to which the Eligible Employee is entitled under this Policy are paid or otherwise provided to the Eligible Employee.

1.3 The Company intends to set forth the compensation and benefits which an Eligible Employee shall be entitled to receive in the event that there is a Change in Control or the Eligible Employee's employment with the Company terminates following a Change in Control under the circumstances described in Article II of this Policy.

1.4 As a condition of receiving benefits under this Policy, an Eligible Employee shall be required to execute a general waiver and release in the form provided by the Company and as further described in Section 3.2.

1.5 This Policy shall supersede any other policies or agreements relating to any compensation, benefits, severance or other amounts to be paid to an Eligible Employee in the event of the Eligible Employee's termination of employment following the occurrence of a Change in Control, but shall NOT supersede any agreement between the Eligible Employee and the Company or any personnel policies of the Company relating to other aspects of the Eligible Employee's

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employment relationship with the Company, including but not limited to the Company's personnel policies addressing severance payments to the Eligible Employee in the event of a termination of the Eligible Employee's employment which is not proximately related to the occurrence of a Change in Control.

ARTICLE II

SEVERANCE BENEFITS

2.1 ENTITLEMENT TO SEVERANCE BENEFITS. If an Eligible Employee's employment terminates due to an Involuntary Termination or a Constructive Termination within twenty-four (24) months following a Change in Control, the termination of employment will be a Covered Termination and the Company shall pay the Eligible Employee the compensation and benefits described in this Article II. If the Eligible Employee's employment terminates, but not due to an Involuntary Termination or a Constructive Termination within twenty-four (24) months following a Change in Control, or for any reason prior to a Change in Control or after twenty-four (24) months or more following a Change in Control, then the termination of employment will NOT be a Covered Termination and Eligible Employee will NOT be entitled to receive any payments or benefits under this Article II.

Payment of any benefits described in this Article II shall be subject to the restrictions and limitations set forth in Article III.

2.2 LUMP SUM SEVERANCE PAYMENT AND BENEFITS. An Eligible Employee entitled to benefits under this Policy shall receive the lump sum severance payment and other benefits described in Exhibit A of this Policy.

2.3 TAX-QUALIFIED RETIREMENT PLANS. Upon the occurrence of a Covered Termination, the Eligible Employee's benefits accrued under any pension, profit sharing, or stock bonus plan intended to satisfy the requirements of Section 401(a) of the Internal Revenue Code, specifically including, but not limited to, the Silicon Valley Bank 401(k) and Employee Stock Ownership Plan and the Silicon Valley Bank Money Purchase Pension Plan, shall become fully vested.

2.4 WELFARE BENEFITS. Following a Covered Termination, an Eligible Employee and his or her covered dependents will be eligible to continue their Welfare Benefit coverage under any Welfare Benefit plan or program maintained by the Company only to the extent provided under the terms and conditions of such Welfare Benefit plan or program. Except for the foregoing, no continuation of Welfare Benefits shall be provided under this Policy except to the extent continuation of health insurance coverage is required under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").

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This Section 2.4 is not intended to affect, nor does it affect, the rights of an Eligible Employee, or an Eligible Employee's covered dependents, under any applicable law with respect to health insurance continuation coverage.

2.5 OUTPLACEMENT SERVICES. The Company shall provide an Eligible Employee with outplacement services under the terms and conditions of the Company's personnel policies in effect immediately prior to the occurrence of a Change in Control.

2.6 MITIGATION. Except as otherwise specifically provided herein, an Eligible Employee shall not be required to mitigate damages or the amount of any payment provided under this Policy by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Policy be reduced by any compensation earned by an Eligible Employee as a result of employment by another employer or by retirement benefits received after the date of the Covered Termination, or otherwise.

ARTICLE III

LIMITATIONS AND CONDITIONS ON BENEFITS

3.1 WITHHOLDING OF TAXES. The Company shall withhold appropriate federal, state or local income and employment taxes from any payments hereunder.

3.2 EMPLOYEE AGREEMENT AND RELEASE PRIOR TO RECEIPT OF BENEFITS. Upon the occurrence of a Covered Termination, and prior to the receipt of any benefits under this Policy on account of the occurrence of a Covered Termination, Eligible Employee shall, as of the date of a Covered Termination, execute an employee agreement and release in the form provided by the Company. In the event an Eligible Employee does not execute such employee agreement and release within the time period specified in such employee agreement and release or if the Eligible Employee revokes such employee agreement and release within the revocation period provided in such employee agreement and release no benefits shall be payable under this Policy to such Eligible Employee. The Company reserves the right to include in the employment agreement and release a representation regarding non-publication of the terms of this Policy.

3.3 LIMITS IMPOSED BY APPLICABLE BANKING LAW. Notwithstanding any other provision to the contrary, the Company shall not be obligated under this Policy to pay any benefit to the extent that such payment would violate any prohibition or limitation on termination payments under any applicable federal or state statute, rule or regulation promulgated, or effective order issued, by any federal or state regulatory agency having jurisdiction over the Company or Bancshares. Without limiting the foregoing, the Company and Eligible Employee acknowledge and agree that the Federal Deposit Insurance Corporation (the "FDIC") has issued a regulation that prohibits payment of the benefit under certain circumstances, unless such payments were approved by the FDIC, the Federal Reserve Bank of San Francisco (the "FRB") and the California State Banking Department (the "SBD").

3

ARTICLE IV

OTHER RIGHTS AND BENEFITS

4.1 NONEXCLUSIVITY. Nothing in the Policy shall prevent or limit an Eligible Employee's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company and for which the Eligible Employee may otherwise qualify, nor, except as specifically provided herein, shall anything herein limit or otherwise affect such rights as the Eligible Employee may have under any stock option or other agreements with the Company. Except as otherwise expressly provided herein, amounts which are vested benefits or which the Eligible Employee is otherwise entitled to receive under any plan, policy, practice or program of the Company at or subsequent to the date of a Covered Termination shall be payable in accordance with such plan, policy, practice or program.

4.2 PARACHUTE PAYMENTS.

(a) In the event that any payment received or to be received by an Eligible Employee pursuant to this Policy ("Payment") would (i) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code (the "Code") and (ii) but for this subsection (a), be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then, subject to the provisions of subsection (c) hereof, such Payment shall be reduced, if at all, to the largest amount which the Eligible Employee, in his or her discretion, determines would result in maximizing the Eligible Employee's net proceeds with respect to such Payments (after taking into account the payment of any appropriate federal, state or local income and employment taxes and the payment of any Excise Tax imposed on such Payment). The determination by the Eligible Employee of any required reduction pursuant to this subsection (a) shall be conclusive and binding upon the Company. The Company shall reduce a Payment in accordance with this subsection (a) (the "Reduction Amount") only upon written notice by the Eligible Employee indicating the Reduction Amount, if any. If the Internal Revenue Service (the "IRS") determines that a Payment is subject to the Excise Tax, then subsection (c) hereof shall apply, and the enforcement of subsection (c) shall be the exclusive remedy to the Company for a failure by the Eligible Employee to reduce the Payment so that no portion thereof is subject to the Excise Tax.

(b) In the event a Payment is reduced in accordance with subsection
(a) hereof, the Eligible Employee may elect to have the Company remit the Reduction Amount to a 501(c)(C) non-profit charitable organization, within ten
(10) days after a Payment is made to the Eligible Employee. The Eligible Employee may designate any eligible 501(c)(3) non-profit charitable organization as the recipient of the Reduction Amount by written submission to the Company, provided that such designation is received within six (6) months prior to the date in which Eligible Employee first becomes entitled to a Payment pursuant to this Policy. Notwithstanding anything

4

to the foregoing, in no event may the Eligible Employee designate a Charitable Recipient in which the Eligible Employee has a direct or indirect beneficial ownership interest.

(c) If, notwithstanding any reduction described in subsection (a) hereof (or in the absence of any such reduction), the IRS determines that the Eligible Employee is liable for the Excise Tax as a result of the receipt of one or more Payments, then the Eligible Employee shall be obligated to pay back to the Company, within 30 days after final IRS determination, an amount of such Payments equal to the "Repayment Amount." The Repayment Amount with respect to such Payments shall be the smallest such amount, if any, as shall be required to be paid to the Company so that the Eligible Employee's net proceeds with respect to such Payments (after taking into account the payment of the Excise Tax imposed on such Payments) shall be maximized. Notwithstanding the foregoing, the Repayment Amount with respect to such Payments shall be zero if a Repayment Amount of more than zero would not eliminate the Excise Tax imposed on such Payments. If the Excise Tax is not eliminated pursuant to this subsection (b), the Eligible Employee shall pay the Excise Tax.

ARTICLE V

NON-ALIENATION OF BENEFITS

No benefit hereunder shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to so subject a benefit hereunder shall be void.

ARTICLE VI

DEFINITIONS

For purposes of the Policy, the following terms shall have the meanings set forth below:

6.1 "BASE SALARY" means the base salary rate in effect for the subject Eligible Employee at the time of a Covered Termination, exclusive of any bonus or other incentive cash compensation, income from any stock options or other stock awards, supplemental deferred compensation contributions made by the Company, pension or profit sharing contributions or distributions (except as provided below), insurance payments or proceeds, fringe benefits, or other form of additional compensation, but specifically including any amounts withheld from base salary to provide benefits pursuant to section 125, 401(k), or 402(g) of the Internal Revenue Code or pursuant to any other plan or program of deferred compensation.

6.2 "CHANGE IN CONTROL" means the consummation of any of the following transactions:

(a) a merger or consolidation of the Company or Bancshares with any other corporation, other than a merger or consolidation which would result in beneficial owners of the

5

total voting power in the election of directors represented by the voting securities ("Voting Securities") of the Company or Bancshares (as the case may be) outstanding immediately prior thereto continuing to beneficially own securities representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total Voting Securities of the Company or Bancshares, or of such surviving entity, outstanding immediately after such merger or consolidation;

(b) the filing of a plan of liquidation or dissolution of the Company or the closing of the sale, lease, exchange or other transfer or disposition by the Company or Bancshares of all or substantially all of the Company's assets;

(c) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Bancshares, (B) a corporation owned directly or indirectly by the shareholders of Bancshares in substantially the same proportions as their beneficial ownership of stock in Bancshares, or (C) Bancshares (with respect to Bancshares' ownership of the stock of the Company), is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company or Bancshares representing 50% or more of the Voting Securities; or

(d) any person (as such term is used in Sections 13(d) or 14(d) of the Exchange Act), other than (a) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Bancshares, (b) a corporation owned directly or indirectly by the shareholders of Bancshares in substantially the same proportions as their ownership of stock in Bancshares, or
(c) Bancshares (with respect to Bancshares' ownership of the stock of the Company) is or becomes the beneficial owner (within the meaning or Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Company or Bancshares representing 25% or more of the Voting Securities of such corporation, and within twelve (12) months of the occurrence of such event, a change in the composition of the Board of Directors of Bancshares occurs as a result of which sixty percent (60%) or fewer of the directors are Incumbent Directors.

"INCUMBENT DIRECTORS" shall mean directors who either:

(A) are directors of Bancshares as of the date hereof;

(B) are elected, or nominated for election, to the Board of Directors of Bancshares with the affirmative votes of at least a majority of the directors of Bancshares who are Incumbent Directors described in (A) above at the time of such election or nomination; or

(C) are elected, or nominated for election, to the Board of Directors of Bancshares with the affirmative votes of at least a majority of the directors of Bancshares who are Incumbent Directors described in (A) or (B) above at the time of such election or nomination.

6

Notwithstanding the foregoing, "Incumbent Directors" shall not include an individual whose election or nomination to the Board of Directors of Bancshares occurs in order to provide representation for a person or group of related persons who have initiated or encouraged an actual or threatened proxy contest relating to the election of directors of Bancshares.

6.3 "COMPANY" means Silicon Valley Bank, a California corporation, and any successor thereto.

6.4 "CONSTRUCTIVE TERMINATION" means that an Eligible Employee voluntarily terminates his or her employment after any of the following are undertaken without the Eligible Employee's express written consent:

(a) the material, involuntary reduction in the Eligible Employee's responsibilities, authorities or functions as an employee of the Company and/or affiliate thereof as in effect immediately prior to a Change in Control, except in connection with the termination of the Eligible Employee's employment for death, disability, retirement, fraud, misappropriation, embezzlement or any listed exclusion from the definition of Involuntary Termination;

(b) a reduction in the Eligible Employee's Base Salary;

(c) a reduction in the Eligible Employee's Total Compensation to less than 85% of the amount provided to the Eligible Employee for the last full calendar year immediately preceding the occurrence of a Change in Control; or

(d) a relocation of the Eligible Employee to a location more than fifty (50) miles from the location at which the Eligible Employee performed the Eligible Employee's duties prior to a Change in Control, except for required travel by the Eligible Employee on the Company's business to an extent substantially consistent with the Eligible Employee's business travel obligations at the time of a Change in Control.

6.5 "COVERED TERMINATION" means an Involuntary Termination or a Constructive Termination within twenty-four (24) months following a Change in Control. No other event shall be a Covered Termination for purposes of this Policy.

6.6 "ELIGIBLE EMPLOYEE" means each employee of the Company (or affiliate thereof) who meets the requirements of Section 1.1.

6.7 "INVOLUNTARY TERMINATION" means an Eligible Employee's dismissal or discharge by the Company (or, if applicable, by the successor entity) for reasons other than for one of the following reasons:

7

(a) the commission by the Eligible Employee of an act of deliberately criminal or fraudulent misconduct in the line of duty to the Company or Bancshares (including, but not limited to, the willful violation of any material law, rule, regulation, or cease and desist order applicable to the Eligible Employee, the Company or Bancshares), a deliberate act that constitutes a conflict of interest with the Company, Bancshares, or Bancshares' shareholders, or a deliberate breach of a fiduciary duty owed by the Eligible Employee to the Company, Bancshares, or Bancshares' shareholders;

(b) the Eligible Employee's habitual absence from work, intentional failure to perform stated duties, gross negligence, or gross incompetence in the performance of stated duties;

(c) the Eligible Employee's chronic alcohol or drug abuse that results in a material impairment of the Eligible Employee's ability to perform his or her duties as an employee of the Company after reasonable accommodation;

(d) the rendering of a verdict of guilty against the Eligible Employee for any criminal offense (other than a law relating to a traffic violation or similar offense), whether or not in the line of duty; or

(e) the Eligible Employee's removal from his or her office with the Company or Bancshares pursuant to an effective order under Section 8(e) of the Federal Deposit Insurance Act 12 U.S.C. Section 1818(e).

The termination of an Eligible Employee's employment will not be deemed to be an "Involuntary Termination" if such termination occurs as a result of the death or disability of the Eligible Employee.

6.8 "POLICY" means this Change in Control Severance Benefits Policy.

6.9 "TOTAL COMPENSATION" means the amount of compensation paid by the Company to an Eligible Employee with respect to the calendar year immediately preceding the occurrence of a Change in Control. Such amount shall include the following amounts paid with respect to such calendar year: the Eligible Employee's Base Salary, any annual incentive compensation (excluding any "VC Participant Amount" under, and as defined in, the Company's Retention Programs), and any amounts withheld from the Eligible Employee's base salary or bonus to provide benefits pursuant to section 125, 401(k), or 402(g) of the Internal Revenue Code or pursuant to any other plan or program of deferred compensation. Such amount shall exclude any bonus declared or paid from the warrant incentive plan of the Company, overtime pay, any income from any stock options or other stock awards, supplemental deferred compensation contributions made by the Company, pension or profit sharing contributions or distributions (except included above), insurance payments or proceeds, fringe benefits, and other forms of additional compensation. Notwithstanding the foregoing, any annual incentive compensation declared for the calendar year immediately preceding

8

the occurrence of a Change in Control shall relate to the Eligible Employee's performance in the preceding calendar year.

6.10 "WELFARE BENEFITS" means benefits providing for coverage or payment in the event of an Eligible Employee's death, disability, illness or injury that were provided to the Eligible Employee immediately before a Change in Control, whether taxable or non-taxable and whether funded through insurance or otherwise.

ARTICLE VII

GENERAL PROVISIONS

7.1 EMPLOYMENT STATUS. This Policy does not constitute a contract of employment or impose on an Eligible Employee any obligation to remain as an employee, or impose on the Company any obligation (i) to retain an Eligible Employee as an employee, (ii) to change the status of an Eligible Employee as an at-will employee, or (iii) to change the Company's policies regarding termination of employment.

7.2 NOTICES. Any notices provided hereunder must be in writing and such notices or any other written communication shall be deemed effective upon the earlier of personal delivery (including personal delivery by telex or facsimile) or the third day after mailing by first class mail, to the Company at its primary office location and to the Eligible Employee at his or her address as listed in the Company's payroll records. Any payments made by the Company to an Eligible Employee under the terms of this Policy shall be delivered to the Eligible Employee either in person or at his or her address as listed in the Company's payroll records.

7.3 SEVERABILITY. Whenever possible, each provision of this Policy will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Policy is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Policy will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

7.4 WAIVER. If either the Company or an Eligible Employee should waive any breach of any provisions of this Policy, such party shall not thereby be deemed to have waived any preceding or succeeding beach of the same or any other provision of this Policy.

7.5 COMPLETE AGREEMENT. This Policy, including Exhibits A and B and any other written agreements specifically referred to in this Policy, constitutes the entire agreement between an Eligible Employee and the Company, and it is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter. No promise or representation other than those expressly contained herein shall alter the terms of this Policy.

9

7.6 BASIS OF PAYMENTS. All benefits under the Policy shall be paid by the Company. The Policy shall be unfunded, and benefits hereunder shall be paid only from the general assets of the Company.

7.7 AMENDMENT OR TERMINATION OF POLICY. This Policy may be changed or terminated only by the Company. A change or termination of this Policy must be signed by an executive officer of the Company after such change or termination has been approved by an authorized committee of the Company's Board of Directors. NOTWITHSTANDING THE FOREGOING, no amendment or termination shall affect the right to any unpaid benefit of any Eligible Employee whose employment with the Company terminated prior to the amendment or termination of the Policy; and FURTHER PROVIDED, that for the period of twenty-four (24) months following a Change in Control, the Policy shall not be amended and no Eligible Employee shall be reclassified in any manner that would adversely affect the interests of the Eligible Employee without the written consent of the Eligible Employee so affected.

7.8 HEADINGS. The headings of the Articles and Sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

7.9 SUCCESSORS AND ASSIGNS. This Policy is intended to bind and inure to the benefit of and be enforceable by an Eligible Employee and the Company, and their respective successors, assigns, heirs, executors and administrators, except that an Eligible Employee may not assign any of his or her duties hereunder and he may not assign any of his or her rights hereunder without the written consent of the Company, which consent shall not be withheld unreasonably.

8.0 ARBITRATION. Any and all disputes or controversies, arising from or regarding the interpretation, performance, enforcement or termination of this Policy shall be resolved by final and binding arbitration under the procedures set forth in the Arbitration Procedure attached hereto as Exhibit B and the then existing Judicial Arbitration and Mediation Services, Inc. ("JAMS") Rules of Practice and Procedure or the rules of practice and procedure of any successor entity to JAMS (except insofar as they are inconsistent with the procedures set forth in the enclosed Arbitration Procedure). Nothing in this section is intended to prevent either the Company or an Eligible Employee from obtaining either injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration or in lieu of arbitration or from utilizing any judicial court system to seek enforcement of an arbitration award.

8.1 ATTORNEY FEES. In the event of any arbitration or any other action or proceeding relating to the interpretation, performance, enforcement or termination of this Policy, the prevailing party shall be entitled to an award requiring payment by the other party of such prevailing party's reasonable fees and costs, including reasonable attorneys' fees incurred as a result of such action or proceeding.

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8.2 TRANSFER OF SERVICES TO AFFILIATE. This Policy shall not prohibit the Company from transferring an Eligible Employee's services to an affiliate of the Company, provided that the rights and obligations of the parties hereto shall not terminate in the event of such transfer, and provided further that the new entity for which the Eligible Employee is performing services also shall be bound hereby without the need for further written agreement and without release of the Company.

8.3 NO VIOLATION OF GOVERNING BANKING LAW. Nothing in this Policy is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law, rule, regulation or order. The Company's inability, pursuant to court or regulatory order, to perform its obligations under this Policy or the modification of this Policy by the FRB, the SBD or other bank regulatory agency through administrative action shall not constitute a breach of this Policy. Except to the extent provided in Section 3.3, the provisions of this Policy shall be severable. If this Policy or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless perform its obligations hereunder to the full extent permitted by any applicable portion of this Policy that shall not have been invalidated, and the balance of this Policy not so invalidated shall be enforceable in accordance with its terms.

8.4 CONSTRUCTION OF POLICY. In the event of a conflict between the text of the Policy and any Summary Plan Description, summary, description or other information regarding the Policy, the text of the Policy shall control. This Policy is intended to governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA") and, to the extent not preempted by ERISA, the laws of the State of California.

IN WITNESS WHEREOF, to record the adoption of this Policy as set forth herein, effective as of the day and year written above, Silicon Valley Bank has caused its duly authorized officer to execute the same this ______ day of ___________, 2000.

SILICON VALLEY BANK,
a California corporation

By:___________________________________

Name:_________________________________

Title:________________________________

Exhibit A: CIC Benefit Table
Exhibit B: Arbitration Procedure

11

EXHIBIT A

SCHEDULE OF BENEFITS
ELIGIBLE EMPLOYEES AT GRADE LEVELS 14 AND ABOVE

LUMP SUM SEVERANCE PAYMENT. Within thirty (30) days following a Covered Termination, or such longer period as is administratively reasonable following the close of the maximum period provided by law for consideration and revocation of the employee agreement and release described in Section 3.2, the Eligible Employee shall receive a lump sum payment determined by the Eligible Employee's Base Salary multiplied by the appropriate factor applied from the table attached as Exhibit A (which factor shall be based upon (1) the Eligible Employee's level within the Company and (2) the relationship between the Selling Price of the Company or Bancshares (as the case may be) at the time of the transaction (or series of related transactions) causing the occurrence of a Change in Control and the Book Value of the Company or Bancshares (as the case may be) at that time). This lump sum payment shall be called the Eligible Employee's "CIC Benefit."

If the Eligible Employee's Covered Termination occurs on or before the expiration of twelve (12) months from the occurrence of a Change in Control, the Eligible Employee shall be entitled to receive 100% of his or her CIC Benefit. If the Eligible Employee's Covered Termination occurs after the expiration of twelve (12) months from the occurrence of a Change in Control, the Eligible Employee shall be entitled to receive a CIC Benefit based upon the following table:

NUMBER OF MONTHS
FOLLOWING CHANGE IN CONTROL            PERCENTAGE OF CIC BENEFIT
           15                                    75%
           18                                    50%
           21                                    25%
           24                                     0%

In the event that an Eligible Employee's Covered Termination occurs on a date between two of these quarterly benchmarks, then the percentage of the CIC Benefit to which Eligible Employee shall be entitled shall be equal to the sum of two percentages (rounded to the nearest whole percentage): (1) the Percentage of CIC Benefit for the quarterly benchmark next following the occurrence of the Covered Termination, and (2) twenty five percent (25%) multiplied by a fraction, the numerator of which is the number of days after the date of Covered Termination and on or before the date on which the subsequent quarterly benchmark falls, and the denominator of which is ninety one (91). For example, if the date on which a Change of Control occurs is September 1, 1998 and the Eligible Employee incurs a Covered Termination on November 15, 1999, then the Percentage of CIC Benefit to which Eligible Employee is entitled

1.


shall be 79% (75% + (16/91 X 25%)) or (75% + 4.4%) or 79.4%, as rounded to the nearest whole percentage. Eligible Employee's CIC Benefit may be further reduced as a result of the limits on payment of aggregate CIC Benefits described in Exhibit A to this Agreement.

STOCK OPTIONS AND STOCK. All stock options held by the Eligible with respect to Bancshares stock that are unvested at the time of a Change in Control shall become fully vested and exercisable upon a Change in Control (regardless of whether a Covered Termination occurs). All Bancshares stock held by the Eligible Employee that is unvested at the time of a Change in Control may become fully vested upon a Change in Control, subject to the terms of the agreements providing for the grant of such Bancshares stock. The Company shall take all actions necessary to amend all stock option agreements evidencing outstanding stock options granted to an Eligible Employee to provide for full vesting of stock options upon a Change in Control or to otherwise conform such stock agreements, as necessary, to the terms of this Policy.

*** For purposes of the attached table, the following definitions shall apply:

II "Book Value" shall mean the amount of the stockholders' equity, as determined in accordance with generally accepted accounting principles, as of the date immediately preceding a Change in Control, excluding the Company's allowance for loan losses.

III "Selling Price" shall mean the valuation of the Company or Bancshares (as the case may be) as determined by the Company or Bancshares, respectively, in good faith at the time of the occurrence of the transaction (or series of related transactions) as a result of which a Change in Control occurs.

Furthermore, notwithstanding any provision in this Exhibit A and any personnel policy of the Company to the contrary, the cumulative CIC Benefit paid to all employees of the Company shall not exceed 5.8% of the difference between the Selling Price and the Book Value assuming one-third (1/3rd) of the Company's employees at the time of a Change in Control incur a Covered Termination, shall not exceed 11.7% of the difference between the Selling Price and the Book Value assuming two-thirds (2/3rds) of the Company's employees at the time of a Change in Control incur a Covered Termination, and in no event shall exceed 17.5% of the difference between the Selling Price and the Book Value. For purposes of the potential reduction in CIC Benefits provided for in this paragraph, the determination shall be made at the time of the Change in Control and the determination of whether the cumulative CIC Benefit to be paid exceeds the relevant limits specified herein also shall be determined at the time of the Change in Control. If, at the time of the Change in Control, it is determined that the limits specified in this paragraph are exceeded, then the potential CIC Benefits of all employees of the Company incurring a Covered Termination shall be proportionately decreased such that the resulting potential aggregate payouts will not exceed the relevant limit.

2.


CIC BENEFIT TABLE

MULTIPLE OF BASE SALARY

----------------------- ----------- --------------------- ------------------ ---------- ------------------
       MULTIPLE OF                       EXECUTIVE            MANAGING                         ALL
       BOOK VALUE          OTC           COMMITTEE            COMMITTEE         MRT          OTHERS*
----------------------- ----------- --------------------- ------------------ ---------- ------------------
          1               0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.1              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.2              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.3              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.4              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.5              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.6              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.7              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.8              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         1.9              0.000            0.000                0.000          0.000          0.150
----------------------- ----------- --------------------- ------------------ ---------- ------------------
          2               1.300            1.000                0.800          0.400          0.170
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.1              1.400            1.100                0.900          0.500          0.180
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.2              1.500            1.200                1.000          0.500          0.200
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.3              1.600            1.300                1.100          0.500          0.220
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.4              1.700            1.400                1.200          0.600          0.230
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.5              1.800            1.500                1.250          0.600          0.250
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.6              1.900            1.600                1.300          0.700          0.270
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.7              2.000            1.700                1.400          0.700          0.280
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.8              2.100            1.800                1.500          0.700          0.300
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         2.9              2.200            1.900                1.600          0.800          0.320
----------------------- ----------- --------------------- ------------------ ---------- ------------------
          3               2.300            2.000                1.700          0.800          0.330
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.1              2.400            2.100                1.800          0.900          0.350
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.2              2.600            2.200                1.850          0.900          0.370
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.3              2.700            2.300                1.900          1.000          0.380
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.4              2.800            2.400                2.000          1.000          0.400
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.5              2.900            2.500                2.100          1.000          0.420
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.6              3.000            2.600                2.150          1.100          0.430
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.7              3.100            2.700                2.200          1.100          0.450
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.8              3.200            2.800                2.300          1.200          0.470
----------------------- ----------- --------------------- ------------------ ---------- ------------------
         3.9              3.400            2.900                2.400          1.200          0.480
----------------------- ----------- --------------------- ------------------ ---------- ------------------
          4               3.500            3.000                2.500          1.250          0.500
----------------------- ----------- --------------------- ------------------ ---------- ------------------

----------------------- ----------- --------------------- ------------------ ---------- ------------------

----------------------- ----------- --------------------- ------------------ ---------- ------------------

----------------------- ----------- --------------------- ------------------ ---------- ------------------

----------------------- ----------- --------------------- ------------------ ---------- ------------------

----------------------- ----------- --------------------- ------------------ ---------- ------------------

*--COVERING ALL OTHER EMPLOYEES AT GRADE 14 AND ABOVE (SEE THE SEPARATE CIC PLAN FOR EMPLOYEES AT GRADES 11-13)


EXHIBIT A

SCHEDULE OF BENEFITS
ELIGIBLE EMPLOYEES AT GRADE LEVELS 13 AND BELOW

Subject to the limitations specified below, within sixty (30) days following a Covered Termination, or such longer period as is administratively reasonable following the close of the maximum period provided by law for consideration and revocation of the employee agreement and release described in
Section 3.2, an Eligible Employee classified at Grade Levels 13 and below as of the date of the Covered Termination shall receive a lump sum payment in an amount equal to one week of Base Salary for each full year of service with the Company, but not to exceed a maximum of fifteen (15) weeks of Base Salary. This lump sum payment shall be called the Eligible Employee's CIC Benefit. NOTWITHSTANDING THE FOREGOING, Eligible Employees will receive a minimum of four
(4) weeks of Base Salary as the Eligible Employee's CIC Benefit.

For purposes of determining CIC Benefits for an Eligible Employee classified at Grade Levels 13 and below, such Eligible Employee's Base Salary shall be divided by 52 in order to determine the amount of one week of Base Salary.

However, notwithstanding any provision in this Exhibit A and any personnel policy of the Company to the contrary, the cumulative CIC Benefit paid to all employees of the Company shall not exceed 5.8% of the difference between the Selling Price and the Book Value assuming one-third (1/3rd) of the Company's employees at the time of a Change in Control incur a Covered Termination, shall not exceed 11.7% of the difference between the Selling Price and the Book Value assuming two-thirds (2/3rds) of the Company's employees at the time of a Change in Control incur a Covered Termination, and in no event shall exceed 17.5% of the difference between the Selling Price and the Book Value. For purposes of the potential reduction in CIC Benefits provided for in this paragraph, the determination shall be made at the time of the Change in Control and the determination of whether the cumulative CIC Benefit to be paid exceeds the relevant limits specified herein also shall be determined at the time of the Change in Control. If, at the time of the Change in Control, it is determined that the limits specified in this paragraph are exceeded, then the potential CIC Benefits of all employees of the Company incurring a Covered Termination shall be proportionately decreased such that the resulting potential aggregate payouts will not exceed the relevant limit.

*** For purposes of this Exhibit A, the following definitions shall apply:

IV "Book Value" shall mean the amount of the stockholders' equity, as determined in accordance with generally accepted accounting principles, as of the date immediately preceding a Change in Control, excluding the Company's allowance for loan losses.

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V "Selling Price" shall mean the valuation of the Company or Bancshares (as the case may be) as determined by the Company or Bancshares, respectively, in good faith at the time of the occurrence of the transaction (or series of related transactions) as a result of which a Change in Control occurs.

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EXHIBIT B

ARBITRATION PROCEDURE

VI The parties agree that any dispute that arises in connection with the payment of benefits under this Policy or the termination of this Policy shall be resolved by binding arbitration in the manner described below.

VII A party intending to seek resolution of any dispute under the Policy by arbitration shall provide a written demand for arbitration to the other party, which demand shall contain a brief statement of the issues to be resolved.

VIII The arbitration shall be conducted in Santa Clara County, California, by a mutually acceptable retired judge from the panel of Judicial Arbitration and Mediation Services, Inc. or any entity performing the same type of services that succeeds to its business ("JAMS"). At the request of either party, arbitration proceedings will be conducted in the utmost secrecy and, in such case, all documents, testimony and records shall be received, heard and maintained by the arbitrator in secrecy under seal, available for inspection only by the parties to the arbitration, their respective attorneys, and their respective expert consultants or witnesses who shall agree, in advance and in writing, to receive all such information confidentially and to maintain such information in secrecy, and make no use of such information except for the purposes of the arbitration, unless compelled by legal process.

IX The arbitrator is required to disclose any circumstances that might preclude the arbitrator from rendering an objective and impartial determination. In the event the parties cannot mutually agree upon the selection of a JAMS arbitrator, the President of JAMS shall designate the arbitrator.

X The party demanding arbitration shall promptly request that JAMS conduct a scheduling conference within fifteen (15) days of the date of that party's written demand for arbitration or on the first available date thereafter on the arbitrator's calendar. The arbitration hearing shall be held within thirty (30) days after the scheduling conference or on the first available date thereafter on the arbitrator's calendar. Nothing in this paragraph shall prevent a party from at any time seeking temporary equitable relief, from JAMS or any court of competent jurisdiction, to prevent irreparable harm pending the resolution of the arbitration.

XI Discovery shall be conducted as follows: (a) prior to the arbitration any party may make a written demand for lists of the witnesses to be called and the documents to be introduced at the hearing; (b) the lists must be served within fifteen days of the date of receipt of the demand, or one day prior to the arbitration, whichever is earlier; and (c) each party may take no more than two depositions (pursuant to the procedures set forth in the California Code of Civil Procedure) with a

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maximum of five hours of examination time per deposition, and no other form of pre-arbitration discovery shall be permitted.

XII It is the intent of the parties that the Federal Arbitration Act ("FAA") shall apply to the enforcement of this provision unless it is held inapplicable by a court with jurisdiction over the dispute, in which event the California Arbitration Act ("CAA") shall apply.

XIII The arbitrator shall apply California law, including the California Evidence Code, and shall be able to decree any and all relief of an equitable nature, including but not limited to such relief as a temporary restraining order, a preliminary injunction, a permanent injunction, or replevin of Company property. The arbitrator shall also be able to award actual, general or consequential damages, but shall not award any other form of damage (e.g., punitive damages).

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ARTICLE 9
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS, RELATED NOTES AND MANAGEMENT DISCUSSION AND ANALYSIS CONTAINED IN THE REPORT ON FORM 10-Q FILED BY SILICON VALLEY BANCSHARES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
MULTIPLIER: 1,000


PERIOD TYPE 9 MOS
FISCAL YEAR END DEC 31 2000
PERIOD START JAN 01 2000
PERIOD END SEP 30 2000
CASH 364,670
INT BEARING DEPOSITS 548
FED FUNDS SOLD 1,440,019
TRADING ASSETS 0
INVESTMENTS HELD FOR SALE 2,020,914
INVESTMENTS CARRYING 0
INVESTMENTS MARKET 0
LOANS 1,596,855
ALLOWANCE 73,800
TOTAL ASSETS 5,504,131
DEPOSITS 4,799,894
SHORT TERM 0
LIABILITIES OTHER 76,696
LONG TERM 0
PREFERRED MANDATORY 0
PREFERRED 0
COMMON 49
OTHER SE 571,561
TOTAL LIABILITIES AND EQUITY 5,504,131
INTEREST LOAN 139,125
INTEREST INVEST 83,695
INTEREST OTHER 59,830
INTEREST TOTAL 282,650
INTEREST DEPOSIT 41,486
INTEREST EXPENSE 41,486
INTEREST INCOME NET 241,164
LOAN LOSSES 46,309
SECURITIES GAINS 35,950
EXPENSE OTHER 146,335
INCOME PRETAX 207,307
INCOME PRE EXTRAORDINARY 123,329
EXTRAORDINARY 0
CHANGES 0
NET INCOME 123,329
EPS BASIC 2.68 1
EPS DILUTED 2.54 2
YIELD ACTUAL 6.91
LOANS NON 18,495
LOANS PAST 0
LOANS TROUBLED 0
LOANS PROBLEM 0
ALLOWANCE OPEN 71,800
CHARGE OFFS 51,828
RECOVERIES 7,519
ALLOWANCE CLOSE 73,800
ALLOWANCE DOMESTIC 51,333
ALLOWANCE FOREIGN 0
ALLOWANCE UNALLOCATED 22,467
1 REPRESENTS BASIC EARNINGS PER SHARE
2 REPRESENTS DILUTED EARNINGS PER SHARE