<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SILICON VALLEY BANCSHARES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
REGISTRANT
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[INSERT LOGO HERE]
SILICON VALLEY BANCSHARES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 18, 1996
4:00 P.M.
TO THE SHAREHOLDERS:
I am pleased to invite you to attend the 1996 Annual Meeting of Shareholders
of Silicon Valley Bancshares, which will be held at the Renaissance Meeting
Center at Techmart, Silicon Valley Room, 5201 Great America Parkway, Santa
Clara, California 95054, on Thursday, April 18, 1996, 4:00 p.m., local time. The
purposes of the meeting are to:
1. Elect Directors to serve for the ensuing year and until their successors
are elected.
2. Approve an amendment to the Silicon Valley Bancshares 1989 Stock Option
Plan.
3. Approve an amendment to the Company's Bylaws to change the authorized
range of Directors.
4. Ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors.
5. Transact such other business as may properly come before the meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. TO ASSURE YOUR REPRESENTATION AT THE
MEETING, YOU ARE ENCOURAGED TO MARK YOUR VOTES, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Any shareholder attending the meeting may vote in person even if such
shareholder has previously returned a proxy card.
Only shareholders of record on February 19, 1996 will be entitled to vote at
the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Daniel J. Kelleher
CHAIRMAN OF THE BOARD
Santa Clara, California
March 1, 1996
ALTHOUGH YOU MAY PRESENTLY PLAN TO ATTEND THE MEETING, PLEASE INDICATE ON THE
ENCLOSED PROXY CARD YOUR VOTE ON THE MATTERS PRESENTED AND SIGN, DATE AND RETURN
THE PROXY CARD. IF YOU DO ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOU MAY
WITHDRAW YOUR PROXY AT THAT TIME. WE ENCOURAGE YOU TO VOTE FOR THE ELECTION OF
ALL TEN (10) NOMINEES FOR DIRECTORS, FOR APPROVAL OF THE AMENDMENT TO THE
SILICON VALLEY BANCSHARES 1989 STOCK OPTION PLAN, FOR APPROVAL OF THE AMENDMENT
TO THE COMPANY'S BYLAWS, AND FOR RATIFICATION OF THE SELECTION OF KPMG PEAT
MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
<PAGE>
PROXY STATEMENT -- TABLE OF CONTENTS
<TABLE>
<CAPTION>
MATTER PAGE
- ----------------------------------------------------------------------------------------------------------- -----
<S> <C>
Information Concerning the Proxy Solicitation.............................................................. 1
Proposal No. 1 -- Election of Directors*................................................................... 3
Security Ownership of Directors and Executive Officers..................................................... 5
Information on Executive Officers.......................................................................... 6
Report of the Personnel and Compensation Committee of the Board on Executive Compensation.................. 7
Return to Shareholders Performance Graph................................................................... 11
Table 1 -- Summary Compensation............................................................................ 12
Table 2 -- Option Grants in Fiscal Year 1995............................................................... 13
Table 3 -- Aggregated Option Exercises in Fiscal Year 1995 and Fiscal Year-End Option Values............... 14
Termination Arrangements................................................................................... 14
Board Committees and Meeting Attendance.................................................................... 18
Director Compensation...................................................................................... 19
Security Ownership of Certain Beneficial Holders........................................................... 20
Compliance with Section 16(a) of the Exchange Act.......................................................... 21
Certain Relationships and Related Transactions............................................................. 21
Proposal No. 2 -- Approval of Amendment to the 1989 Stock Option Plan*..................................... 21
Table 4 -- Amended Plan Benefits Table..................................................................... 22
Proposal No. 3 -- Approval of Amendment to Bylaws*......................................................... 28
Proposal No. 4 -- Ratification of Appointment of Independent Auditors*..................................... 29
Shareholder Proposals -- 1997 Annual Meeting............................................................... 29
1995 Annual Report......................................................................................... 29
Other Matters.............................................................................................. 30
</TABLE>
- ------------------------
*Denotes Items to be Voted on at the Meeting
i
<PAGE>
Mailed to shareholders on or about March 11, 1996
------------------------
PROXY STATEMENT
OF
SILICON VALLEY BANCSHARES
3003 TASMAN DRIVE
SANTA CLARA, CALIFORNIA 95054
------------------------
INFORMATION CONCERNING THE PROXY SOLICITATION
GENERAL
This Proxy Statement is furnished in connection with the solicitation of the
enclosed Proxy by, and on behalf of, the Board of Directors of Silicon Valley
Bancshares, a California corporation and bank holding company (the "Company")
for Silicon Valley Bank (the "Bank"), for use at the 1996 Annual Meeting of
Shareholders of the Company to be held in the Silicon Valley Room at the
Renaissance Meeting Center at Techmart, 5201 Great America Parkway, Santa Clara,
California 95054, ON THURSDAY, APRIL 18, 1996 AT 4:00 P.M., local time and at
all postponements or adjournments thereof (the "Meeting"). Only shareholders of
record on February 19, 1996 (the "Record Date") will be entitled to vote at the
Meeting and any postponements or adjournments thereof. At the close of business
on the Record Date, the Company had 9,136,767 outstanding shares of its no par
value Common Stock (the "Common Stock") held by 687 shareholders of record.
The Company's principal executive offices are located at 3003 Tasman Drive,
Santa Clara, CA 95054 and its telephone number at that location is (408)
654-7400.
VOTING
Shareholders of the Company's Common Stock are entitled to one vote for each
share held, except that for the election of directors, each shareholder has
cumulative voting rights entitling the shareholder to as many votes as shall
equal the number of shares held by such shareholder multiplied by the number of
directors to be elected. A shareholder may cast all his or her votes for a
single candidate or distribute such votes among as many of the candidates he or
she chooses (up to a maximum of the number of directors to be elected). However,
no shareholder shall be entitled to cumulate votes (in other words, cast for any
candidate a number of votes greater than the number of shares of stock held by
such shareholder) for a candidate unless such candidate's or candidates' names
have been placed in nomination prior to the voting in accordance with Section
2.11 of the Bylaws of the Company and the shareholder (or any other shareholder)
has given notice at the meeting prior to the voting of the shareholder's
intention to cumulate votes. If any shareholder has given such notice, all
shareholders may cumulate their votes for candidates properly placed in
nomination. The Proxy Holders are given discretionary authority under the terms
of the Proxy to cumulate votes represented by shares for which they are named
Proxy Holders.
Section 2.11 of the Bylaws of the Company governs nominations for election
of members of the Board of Directors, as follows: nominations for election of
members of the Company's Board of Directors may be made by the Board of
Directors or by any shareholder of any outstanding class of capital stock of the
Company entitled to vote for the election of directors. Notice of intention to
make any nominations shall be made in writing and shall be delivered or mailed
to the Secretary of the Company not less than twenty-one (21) days nor more than
sixty (60) days prior to any meeting of shareholders called for the election of
directors; provided, however, that if less than twenty-one (21) days notice of
the meeting is given to shareholders, such notice of intention to nominate shall
be mailed or delivered to the Secretary of the Company not later than the close
of business on the tenth day following the day on which the notice of the
meeting was mailed; provided further, that if notice of
1
<PAGE>
such meeting is sent by third-class mail as permitted by the Bylaws, no notice
of intention to make nominations shall be required. Such notification shall
contain the following information to the extent known to the notifying
shareholder: (a) the name and address of each proposed nominee; (b) the
principal occupation of each proposed nominee; (c) the number of shares of
Common Stock of the Company owned by each proposed nominee; (d) the name and
residence address of the notifying shareholder; and (e) the number of shares of
Common Stock of the Company owned by the notifying shareholder. Nominations not
made in accordance herewith may, at the discretion of the Chairman of the
meeting, be disregarded and upon the Chairman's instructions, the Inspector of
Election can disregard all votes cast for each such nominee.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR", "AGAINST" or "WITHHELD FROM" a matter are
treated as being present at the meeting for purposes of establishing a quorum
and are also treated as shares "represented and voting" at the Annual Meeting
(the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in this matter. Accordingly, abstentions will have the same effect
as a vote against the proposal.
Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but will not be counted for
purposes of determining the number of Votes Cast with respect to the proposal on
which the broker has expressly not voted. Thus, a broker non-vote will not
affect the outcome of the voting on a proposal that requires a majority of the
Votes Cast (such as the amendment of the 1989 Stock Option Plan). However, with
respect to a proposal that requires a majority of the outstanding shares (such
as the amendment to the Bylaws), a broker non-vote has the same effect as a vote
against the proposal.
REVOCABILITY OF PROXIES
Any person giving a Proxy in the form accompanying this Proxy Statement has
the power to revoke the Proxy at any time prior to its exercise. A Proxy is
revocable prior to the Meeting by delivering either a written instrument
revoking it or a duly executed Proxy bearing a later date to the Secretary of
the Company. Such Proxy is also revoked if the shareholder is present at the
Meeting and votes in person.
SOLICITATION
This solicitation of proxies is made by, and on behalf of, the Board of
Directors of the Company. The Company will bear the entire cost of preparing,
assembling, printing and mailing Proxy materials furnished by the Board of
Directors to shareholders. Copies of Proxy materials will be furnished to
brokerage houses, fiduciaries and custodians to be forwarded to the beneficial
owners of the Company's Common Stock. In addition to the solicitation of Proxies
by use of the mail, some of the officers, directors and regular employees of the
Company and the Bank may (without additional compensation) solicit Proxies by
telephone or personal interview, the costs of which the Company will bear.
Unless otherwise instructed, each valid returned Proxy that is not revoked
will be voted in the election of directors "FOR" the nominees to the Board of
Directors, "FOR" the proposed amendment to the Company's 1989 Stock Option Plan,
"FOR" approval of the amendment to the Company's Bylaws, "FOR" ratification of
the appointment of KPMG Peat Marwick LLP as the Company's independent auditors,
and at the Proxy Holders' discretion on such other matters, if any, as may
properly come before the Meeting or any postponement or adjournment thereof
(including any proposal to adjourn the Meeting).
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
The Company's Bylaws currently provide for a range of from ten (10) to
nineteen (19) directors and permit the exact number to be fixed by the Board.
Effective as of April 18, 1996, the Board has fixed the exact number of
directors at ten (10).
NOMINEES FOR DIRECTOR
All Proxies will be voted "FOR" the election of the following ten (10)
nominees recommended by the Board of Directors, all of whom are incumbent
directors, unless authority to vote for the election of directors is withheld.
All of the nominees have served as directors of the Company since the last
Annual Meeting of Shareholders, except David M. deWilde. Mr. deWilde recently
was appointed to the Board of Directors by the Board to fill a vacancy. All
incumbent directors are nominees for re-election to the Board. If any of the
nominees should unexpectedly decline or be unable to act as a director, the
Proxies may be voted for a substitute nominee designated by the Board of
Directors. The Board of Directors has no reason to believe that any nominee will
become unavailable and has no present intention to nominate persons in addition
to or in lieu of those listed below. Directors of the Company serve until the
next annual meeting of shareholders or until their successors are elected and
qualified.
The names and certain information about each of the Company's nominees for
director as of the Record Date are set forth below.
<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR
NAME OF DIRECTOR AGE (2) OTHER BUSINESS AFFILIATIONS AND PUBLIC COMPANY DIRECTORSHIPS SINCE
- --------------------------- --- ---------------------------------------------------------------------------- -----------
<S> <C> <C> <C> <C>
Gary K. Barr 51 (1) President and Chief Executive Officer, Pacific Coast Capital (a 1982
real estate investment and management company), Carbondale,
Colorado since August 1992.
(2) President and Chief Executive Officer, Landsing Pacific Fund (a
California real estate investment and management company) from
1984 to August 1992. Interim Acting Chief Executive Officer of
the Company and the Bank from January 1993 to May 1993.
James F. Burns, Jr. 58 (1) Executive Vice President and Chief Financial Officer, CBR 1994
Information Group (a credit and mortgage reporting company),
Houston, Texas since September 1988.
(2) Executive Vice President and Chief Financial Officer,
Integratec, Inc. (a company providing credit origination,
servicing, and collection services and the parent company of CBR
Information Group prior to spin-off of CBR in 1993) from 1988 to
1993.
John C. Dean 48 (1) President and Chief Executive Officer of the Company and the 1993
Bank since May 1993. Also, see "Information on Executive
Officers" below.
(2) Advisory Member of Board of Directors, American Central Gas
Companies, Inc., Tulsa, Oklahoma since August 1994.
David M. deWilde 55 (1) Founder and Managing Director, Chartwell Partners International, 1995
Inc. (an executive search firm) since 1989.
(2) Director, Berkshire Realty Company, Inc., Boston, Massachusetts
since 1993.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR
NAME OF DIRECTOR AGE (2) OTHER BUSINESS AFFILIATIONS AND PUBLIC COMPANY DIRECTORSHIPS SINCE
- --------------------------- --- ---------------------------------------------------------------------------- -----------
<S> <C> <C> <C> <C>
Clarence J. Ferrari, Jr., 61 (1) Founder and Principal, Ferrari, Alvarez, Olsen and Ottoboni 1983
Esq. (Attorneys-at-Law), San Jose, California since 1981.
Henry M. Gay 71 (1) Retired. 1982
(2) Founder and Director, Triad Systems Corporation (a computer
software company), Livermore, California since 1971.
Daniel J. Kelleher 1 53 (1) Private Investor, Los Altos Hills, California. 1986
James R. Porter 60 (1) President, Chief Executive Officer, and Director, Triad Systems 1994
Corporation (a computer software company), Livermore, California
since September 1985.
(2) Member of Board of Directors, Brock Control Systems (a sales
automation company), Atlanta, Georgia since April 1993.
Michael Roster, Esq. 2 50 (1) General Counsel, Stanford University, Stanford, California since 1994
August 1993.
(2) From 1987 to 1993, partner in the national law firm of Morrison
& Foerster.
Ann R. Wells 52 (1) Chief Executive Officer, Ann Wells Personnel Services, Inc. (a 1986
personnel agency), Sunnyvale, California since January 1980.
</TABLE>
- ------------------------------
1 Chair of the Company Board and the Bank Board.
2 Vice-Chair of the Company Board and the Bank Board.
VOTE REQUIRED
The ten (10) nominees for directors receiving the highest number of
affirmative votes of the shares entitled to be voted for them shall be elected
as directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum, but have no other legal effect
under California law.
4
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding beneficial ownership as
of the Record Date of the Company's Common Stock by each of the Company's
directors, by each of the executive officers named in the Summary Compensation
Table and by all current directors and executive officers as a group. Unless
otherwise noted, the respective nominees have sole voting and investment power
with respect to the shares shown in the table as beneficially owned.
<TABLE>
<CAPTION>
AGGREGATE NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED OUTSTANDING SHARES
- ------------------------------------------------------------------ --------------------------- ---------------------
<S> <C> <C>
DIRECTORS
Gary K. Barr...................................................... 53,725 .59%
James F. Burns, Jr................................................ 5,000 .06%
John C. Dean *.................................................... 175,850(a),(j) 1.93%
David M. deWilde.................................................. 2,283 .03%
Clarence J. Ferrari, Jr., Esq..................................... 75,712(b) .83%
Henry M. Gay...................................................... 21,051 .23%
Daniel J. Kelleher................................................ 90,381(c) .99%
James R. Porter................................................... 4,375 .05%
Michael Roster, Esq............................................... 7,000 .08%
Ann R. Wells...................................................... 88,930(d) .98%
EXECUTIVE OFFICERS
Glen Blackmon..................................................... 36,932(e),(k) .40%
A. John Busch..................................................... 31,681(f),(l) .35%
John C. Dean...................................................... (See listing above under "Directors")
James F. Forrester................................................ 56,044(g),(m) .62%
Richard H. Harding................................................ 33,069(h),(n) .36%
Glen G. Simmons................................................... 26,924(i),(o) .30%
All current directors and executive officers as a group (15
persons)......................................................... 708,957** 7.77%
</TABLE>
- ------------------------------
Includes (1) the following number of shares subject to options where the options
are exercisable within 60 days after the Record Date and (2) the following
number of shares under the Company's Employee Stock Ownership Plan:
<TABLE>
<S> <C> <C>
(1) (1) (Continued) (2)
(a) 50,000 shares (f) 26,405 shares (j) 48,159 shares
(b) 6,893 shares (g) 33,410 shares (k) 2,598 shares
(c) 9,193 shares (h) 26,405 shares (l) 2,978 shares
(d) 9,193 shares (i) 24,060 shares (m)10,387 shares
(e) 24,060 shares (n) 2,804 shares
(o) 2,597 shares
</TABLE>
* Share ownership shown does not include 10,000 shares in the aggregate held
in two trusts for which Mr. Dean's brother serves as trustee for the benefit
of Mr. Dean's two daughters, as to which shares Mr. Dean disclaims
beneficial ownership.
** Includes 209,619 shares subject to options where the options are exercisable
within 60 days after the Record Date.
5
<PAGE>
INFORMATION ON EXECUTIVE OFFICERS
The positions and ages as of the Record Date of the executive officers of
the Company and the Bank are as set forth below. There are no family
relationships among directors or executive officers of the Company and the Bank.
<TABLE>
<CAPTION>
EMPLOYEE
NAME AND POSITION AGE BUSINESS EXPERIENCE SINCE
- ------------------------------------ --- ---------------------------------------------------------- -----------
<S> <C> <C> <C>
JOHN C. DEAN 48 Prior to joining the Company and the Bank in May 1993, Mr. 1993
President, Chief Executive Officer Dean served as President and Chief Executive Officer of
and Director of the Company and Pacific First Bank, a $6.5 billion federal savings bank
the Bank headquartered in Seattle, Washington from December 1991
until April 1993. From 1990 to 1991, Mr. Dean served as
Chairman and Chief Executive Officer of First Interstate
Bank of Washington and from 1986 to 1990, Chairman and
Chief Executive Officer of First Interstate Bank of
Oklahoma.
GLEN BLACKMON 40 Mr. Blackmon joined the Bank in August 1993 as Executive 1993
Executive Vice President, Chief Vice President and Chief Information Officer. He assumed
Financial Officer and Chief the role of Chief Financial Officer of the Company and the
Information Officer of the Company Bank in September 1995. Prior to joining the Bank, Mr.
and the Bank Blackmon served as President and Chief Information Officer
of Boatmen's Information Systems of Iowa, formerly known
as First Interstate Information Systems of Iowa, Inc.,
from March 1990 to April 1993.
A. JOHN BUSCH 41 Mr. Busch served as Executive Vice President and Chief 1993
Executive Vice President, Chief Lending and Credit Officer at First National Bank in San
Credit Officer and General Counsel Diego, California from January 1992 until joining the Bank
of the Company and the Bank in August 1993. From 1982 until January 1992, Mr. Busch
held increasingly responsible positions with Union Bank in
Los Angeles, California in the merchant banking and legal
departments.
JAMES F. FORRESTER 52 Mr. Forrester joined the Bank in 1987 as Senior Vice 1987
Executive Vice President and President of Operations and Administration. In 1990, Mr.
Manager of the Bank's Strategic Forrester founded the Bank's Southern California office
Financial Services Group and managed that office until August 1993. Prior to
becoming manager of the Bank's Strategic Financial
Services Group in January 1996, Mr. Forrester managed the
Bank's Special Industries Group and Northern California
Technology Group from August 1993 to December 1995.
RICHARD H. HARDING 51 Since joining the Bank in April 1993, Mr. Harding has held 1993
Executive Vice President of the various positions in the Bank, including Manager of the
Bank Bank's Strategic Financial Services Group from April 1993
to December 1995. In January 1996, Mr. Harding assumed the
position of Executive Vice President of Special Projects.
Prior to joining the Bank, Mr. Harding served as a Partner
in the Private and Business Banking Division of Pacific
First Bank (a federal savings bank) from January 1992
until April 1993. From August 1973 until January 1992, Mr.
Harding held increasingly responsible positions in First
Interstate Bank of Washington's Corporate Banking
Division.
GLEN G. SIMMONS 54 Mr. Simmons joined the Bank in July 1993 as Executive Vice 1993
Executive Vice President of Human President of Human Resources and Administration. Prior to
Resources and Administration of joining the Bank, Mr. Simmons served as Senior Vice
the Bank President and Director of Human Resources for First
Interstate Bank of Washington from November 1991 to June
1993. From February 1985 to November 1991, Mr. Simmons
held increasingly responsible positions in the Human
Resources Division of First Interstate Bank of Washington.
</TABLE>
6
<PAGE>
REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE OF
THE BOARD ON EXECUTIVE COMPENSATION
THE REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE SHALL NOT BE DEEMED
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER
THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"), EXCEPT TO THE EXTENT
THAT THE COMPANY SPECIFICALLY INCORPORATES THE INFORMATION CONTAINED IN THE
REPORT BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
Decisions regarding compensation of the Company's executive officers,
including those related to stock and stock options, are considered by the full
Board of Directors, based upon the recommendations and analysis performed by the
Personnel and Compensation Committee (the "Committee"), currently comprised of
Ms. Wells, Chair, and Messrs. Barr, deWilde, Gay, and Roster. However, the Stock
Committee makes grants of stock options to executive officers.
KEY PRINCIPLES
The Committee has adopted the following principles to use for guidance in
setting compensation:
- PAY COMPETITIVELY
-The Committee maintains a philosophy that executive compensation levels
should be competitive with that provided to others in other financial
institutions of comparable size. In that way, the Company can attract
and retain highly-qualified executives critical to the Company's
long-term success.
-Consistent with this philosophy, the Committee regularly obtains
information regarding executive salary levels in the financial
institutions industry through various sources, including compensation
surveys conducted by banking industry associations and independent
compensation consultants.
-The Committee attempts to set (a) base compensation at the midpoint of
the range and (b) total compensation (including incentive compensation)
in the 75th to 90th percentile range (subject to the Company's financial
performance in the top quartile of the Company's competitive group).
- TIE INCENTIVE COMPENSATION TO COMPANY FINANCIAL PERFORMANCE
-The Company's incentive compensation program is generally based on
measured financial performance of the Company and of the division
managed by the executive officer, if applicable. Incentive payouts
primarily depend on results, not efforts. Payouts are calculated as
percentages of base salaries, with threshold, target, and stretch payout
percentages being set at the beginning of each calendar year. Actual
payouts, i.e. whether threshold, target, or stretch amounts, depend on
achievement of specifically-defined goals, including corporate,
division, and individual goals.
-In 1995, incentive compensation goals for executive officers were tied
to the Company's profitability, and if applicable, the financial results
of the division managed by the executive officer.
1995 MARKET SURVEY
- EXECUTIVE OFFICERS
-A review of the Company's executive compensation was completed by an
independent compensation consultant in April 1995. In reviewing the 1995
executive compensation programs, the compensation consultant reviewed
market data (based on surveys published in 1994) for the Bank's
competitive group. The market data was updated to February 1995,
assuming a 4% annualized increase. The Bank's competitive group included
banks with
7
<PAGE>
$800 million to $6 billion in assets, with specific Bank officers having
been "matched" as closely as possible with competitive group members
with similar functional responsibilities. The compensation consultant
concluded that the Bank's base salaries were within the competitive
range but ranked between the 25th and 50th percentile levels. Further,
the total compensation paid to the executive officers (including base
salary and bonus) ranked in the 50th percentile. In that a key principle
of the Committee is total compensation should be in the 75th to 90th
percentile range, the Committee will continue to review executive
compensation programs to ensure the Bank moves in the direction of this
range. The Committee believes this is critical to retaining
highly-qualified executives.
- CHIEF EXECUTIVE OFFICER
-The April 1995 review completed by the independent compensation
consultant (described immediately above) reflected that John Dean's 1995
base salary was below the 25th percentile level of base salaries paid to
chief executive officers in the Bank's competitive group. Further, John
Dean's aggregated 1995 base salary and bonus (based on Mr. Dean's 1995
bonus tied to 1994 performance) ranked below the 50th percentile level
of aggregated base salaries and bonuses in the competitive group.
-In January 1996, the Committee approved a grant of 5,000 shares of
restricted stock to Mr. Dean, with none of such shares vesting until
January 2000 (at which time 100% of the shares will vest). In approving
the stock grant to Mr. Dean, the Committee noted that the grant was
being made in recognition of Mr. Dean's success in 1995 (and prior
years) in increasing Company shareholder value. The stock grant is
subject to approval by the Federal Reserve Bank of San Francisco.
INCENTIVE COMPENSATION PAID BASED ON 1995 COMPANY PERFORMANCE
- ACTUAL INCENTIVE COMPENSATION PAYMENTS.
-CHIEF EXECUTIVE OFFICER. 100% of John Dean's 1995 incentive compensation
payment depended on total Company profitability. Under the 1995
Incentive Compensation Program, the threshold, target, and stretch
payout amounts (represented as percentages of base salary) for John Dean
were 10%, 30%, and 65%, respectively. The Company's 1995 net income
reached the stretch goal. Accordingly, John Dean's incentive
compensation payment of $152,321 represented approximately 60% of his
base salary on December 31, 1995 ($254,200). A portion of Mr. Dean's
bonus ($30,464) was deferred.
-OTHER EXECUTIVE OFFICERS. In addition to the Company's profitability,
the Personnel and Compensation Committee set other goals for the other
executive officers' threshold, target, and stretch payment goals, namely
division and individual performances. For those executive officers in
profit-generating units, including James Forrester and Richard Harding,
division goals (and actual payments) were tied to financial performance
of the respective division, increase in the division's deposits, and
client calls made by the division. For those executive officers in
support divisions, including Glen Blackmon, John Busch and Glen Simmons,
1995 incentive compensation goals (and actual payments) were tied to
management of credit and operational risk, client service, and special
projects (including projects involving conversion of the Company's core
system and involving relocation to the Company's new headquarters).
- EMPLOYEE STOCK OWNERSHIP PLAN
-Also, see discussion in "Employee Stock Ownership Plan" below regarding
payments to executives under the Company's qualified defined
contribution plan.
TAX CONSEQUENCES
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Committee considers the anticipated
tax treatment to the Company and to the executives
8
<PAGE>
of various payments and benefits. The Committee will consider various
alternatives to preserving the deductibility of compensation payments (in
particular, pursuant to Section 162(m) of the Internal Revenue Code) to the
extent reasonably practicable and to the extent consistent with its other
compensation objectives. No executive officer received cash compensation in
excess of $1 million during 1995, and the Committee does not expect that any
executive officer will receive cash compensation in excess of $1 million during
1996. The Committee adopted limitations on the number of shares that may be
subject to awards granted under the 1989 Stock Option Plan during any one
calendar year to an individual so that compensation derived from stock options
granted under such plan would qualify as "performance-based" compensation within
the meaning of Section 162(m) and would therefore be deductible by the Company.
PERSONNEL AND COMPENSATION COMMITTEE
ANN R. WELLS, CHAIR
GARY K. BARR
DAVID M. DEWILDE (SINCE AUGUST 1995)
HENRY M. GAY
DANIEL J. KELLEHER (UNTIL JANUARY 1995)
MICHAEL ROSTER
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the Personnel and Compensation Committee performed all
compensation functions of the Board of Directors. With regard to stock-based
compensation (including under the Company's employee benefit plans), the
Personnel and Compensation Committee worked with the Stock Committee, which has
primary responsibility for reviewing and approving the Company's stock-based
compensation plans. (See discussion below under "Board Committees and Meeting
Attendance" for additional information on the Personnel and Compensation
Committee and the Stock Committee). The Personnel and Compensation Committee and
the Stock Committee are currently chaired by Ms. Ann Wells, with Messrs. Barr,
deWilde, Gay and Roster serving as members. Mr. Kelleher served on the Personnel
and Compensation Committee until January 1995. With the exception of Mr. Barr,
who served as Interim Acting Chief Executive Officer of the Bank during the
period January 1993 through May 1993, none of the aforementioned persons has
ever been an officer or employee of the Company or the Bank.
Ann R. Wells, Chief Executive Officer of Ann Wells Personnel Services, Inc.,
provided temporary employment and recruiting services to the Bank in 1995 and is
expected to perform such services in 1996. The fees paid to Ann Wells Personnel
Services by the Bank did not exceed five (5) percent of that firm's gross
revenues for its last full fiscal year and are comparable to those charged by
unrelated parties for similar services.
Freedom Travel (of which Daniel J. Kelleher was a principal owner until
March 1995) provided travel agency services to the Bank in 1995. The fees paid
to Freedom Travel by the Bank did not exceed five (5) percent of that agency's
gross revenues for its last full fiscal year and are comparable to those charged
by unrelated parties for similar services.
As a state-chartered bank that is a member of the Federal Reserve System,
the Bank is subject to regular examinations by the California State Banking
Department ("Department") and the Federal Reserve Bank of San Francisco. In a
concurrent Department/Federal Reserve Bank of San Francisco examination
concluded in the fourth quarter of 1993, the regulators identified two loans to
Mr. Barr, a director, totaling $529,000 at December 31, 1993, which, in the
regulators' opinion, involved more than a normal risk of default. Only one of
the loans was outstanding as of December 31, 1995 (with such loan having been
upgraded in the prior year to reflect no more than a normal risk of default). As
of December 31, 1995, the outstanding balance on this loan was $266,670.
10
<PAGE>
RETURN TO SHAREHOLDERS PERFORMANCE GRAPH
The following graph compares, for the period from December 31, 1990 through
December 31, 1995, the cumulative total shareholder return on the Common Stock
of the Company with (i) the cumulative total return of the S&P 500 market index,
(ii) the cumulative total return of the NASDAQ stock market index, (iii) the
cumulative total return of the NASDAQ Banks Index and (iv) Montgomery
Securities' WESTERN BANK MONITOR California Independent Bank Proxy market index.
The graph assumes an initial investment of $100 and reinvestment of dividends.
The graph is not necessarily indicative of future stock price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN AMONG SILICON VALLEY BANCSHARES, S&P 500, NASDAQ,
NASDAQ BANKS AND THE CALIFORNIA INDEPENDENT BANK PROXY MARKET ISSUES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SILICON VALLEY
BANCSHARES S&P 500 NASDAQ STOCK MARKET -US NASDAQ BANKS CALIFORNIA INDEPENDENT BANK PROXY
<S> <C> <C> <C> <C> <C>
1990 100 100 100 100 100
1991 136.54 130.47 160.56 164.09 102.21
1992 86.24 140.41 186.87 238.85 102.73
1993 105.84 154.56 214.51 272.39 126.54
1994 141.12 156.6 209.69 271.41 134.24
1995 250.88 215.46 296.3 404.35 185.47
</TABLE>
[CHART]
11
<PAGE>
TABLE 1 -- SUMMARY COMPENSATION TABLE
The following table sets forth certain information for each of the last
three (3) fiscal years concerning the compensation of the Chief Executive
Officer and the five other most highly compensated executive officers of the
Company and of the Bank ("Named Officers") (based on salary plus bonus for
1995):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------------- ------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING PAYOUTS
COMPEN- STOCK OPTIONS/ -------------
SALARY (1) BONUS SATION (2) AWARDS (3) SARS (4) LTIP PAYOUTS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
- -------------------------------------- --------- ---------- -------------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
JOHN C. DEAN (6) 1995 $ 254,200 $ 152,321(7) -- -- -- --
President and Chief 1994 $ 250,525 $ 123,681(8) -- -- -- --
Executive Officer 1993 $ 175,346 $ 75,000 $ 87,741 $ 475,000 100,000 --
GLEN BLACKMON (9) 1995 $ 135,000 $ 82,781(7) -- -- 21,500 --
Executive Vice President, 1994 $ 124,692 $ 62,915 -- -- 5,000 --
Chief Financial Officer 1993 $ 50,000 $ 25,000 $ 15,064 -- 20,000 --
and Chief Information
Officer
A. JOHN BUSCH (10) 1995 $ 160,000 $ 60,704(7) -- -- 21,500 --
Executive Vice President, 1994 $ 155,525 $ 77,523(8) -- -- 3,500 --
Chief Credit Officer and 1993 $ 59,104 $ 25,000 $ 91,620 -- 25,000 --
General Counsel
JAMES F. FORRESTER 1995 $ 160,000 $ 75,703(7) -- -- 21,500 --
Executive Vice President 1994 $ 145,675 $ 73,238 -- -- 15,000 --
1993 $ 142,083 $ 60,000 $ 118,125 -- 15,000 --
RICHARD H. HARDING (11) 1995 $ 145,000 $ 73,450(12) -- -- 21,500 --
Executive Vice President 1994 $ 135,525 $ 67,784 -- -- 3,500 --
1993 $ 92,596 $ 30,000 $ 35,283 -- 25,000 --
GLEN G. SIMMONS (13) 1995 $ 135,000 $ 82,781(12) -- -- 21,500 --
Executive Vice President of 1994 $ 128,367 $ 62,915 $ 45,327 -- 5,000 --
Human Resources and 1993 $ 56,846 $ 25,000 $ 39,518 -- 20,000 --
Administration
<CAPTION>
ALL OTHER
COMPEN-
SATION (5)
NAME AND PRINCIPAL POSITION ($)
- -------------------------------------- -----------
<S> <C>
JOHN C. DEAN (6) $ 23,500
President and Chief $ 19,998
Executive Officer $ 1,000
GLEN BLACKMON (9) $ 21,250
Executive Vice President, $ 17,272
Chief Financial Officer $ 1,000
and Chief Information
Officer
A. JOHN BUSCH (10) $ 23,500
Executive Vice President, $ 19,998
Chief Credit Officer and --
General Counsel
JAMES F. FORRESTER $ 23,500
Executive Vice President $ 19,998
$ 18,369
RICHARD H. HARDING (11) $ 22,750
Executive Vice President $ 18,630
$ 1,000
GLEN G. SIMMONS (13) $ 21,250
Executive Vice President of $ 17,258
Human Resources and $ 1,000
Administration
</TABLE>
- ------------------------------
(1) Includes amounts deferred at the election of the executive officer.
(2) Amounts in this column represent relocation costs incurred by the employee
and reimbursed by the Bank. Amounts for the years shown are not reflected
if the total value of perquisites paid to the executive officer during a
fiscal year did not exceed, in the aggregate, the lesser of $50,000 or 10%
of the individual's salary plus bonus in the subject year.
(3) As of December 31, 1995, Mr. Dean held 50,000 restricted shares of the
Company's Common Stock, with a market value of $1,200,000. Market values
were based on the $24.00 closing market price of the Company's Common Stock
on the National Association of Securities Dealers Automated
Quotation/National Market System on December 29, 1995, the last trading day
of 1995. Holders of restricted stock have rights equivalent to those of
other shareholders, including voting rights and rights to dividends. Since
the date of grant, Mr. Dean's restricted stock grant was amended to change
the vesting, which originally provided for a three-year vesting period
beginning in 1994, to provide for 100% cliff-vesting in 1996 (with vesting
contingent upon continued employment). Accordingly, all of Mr. Dean's
shares will vest on March 31, 1996.
(4) The numbers in this column reflect shares of common stock underlying
options. No Stock Appreciation Rights ("SARs") were awarded during the
years 1993 through 1995.
(5) Amounts in this column represent employer contributions to the Company's
combined 401(k) and Employee Stock Ownership Plan.
12
<PAGE>
(6) Mr. Dean joined the Company and the Bank in May 1993.
(7) Bonus grant is subject to approval by the Federal Reserve Bank of San
Francisco. Also, 20% of the executive's bonus was deferred.
(8) These bonuses were payable in stock, with the number of shares tied to the
closing market price of the Company's stock ($13.625) on the date of Board
approval of the bonuses (January 24, 1995). With regard to such stock
grants, the Board offered the executive officers their choice of the
following: (1) 100% of the bonus amount would be paid in stock, with the
officer being responsible to pay out-of-pocket the taxes related to such
stock grant or (2) the bonus amount would be paid in part stock and part
cash, with the cash portion of such bonus amount being equal to the amount
of taxes payable on the total bonus amount. (Such cash portion was withheld
by the Company to pay the taxes, and accordingly, no cash was payable to the
executive). Mr. Dean selected the former alternative, and Mr. Busch selected
the latter alternative.
(9) Mr. Blackmon joined the Company and the Bank in August 1993.
(10) Mr. Busch joined the Company and the Bank in August 1993.
(11) Mr. Harding joined the Bank in April 1993.
(12) 20% of the executive's bonus was deferred.
(13) Mr. Simmons joined the Bank in July 1993.
STOCK OPTIONS
The following table sets forth information concerning the grant of options
to purchase the Company's Common Stock to the Named Officers during 1995:
TABLE 2 -- OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS IN 1995 (1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS/ PRICE APPRECIATION
UNDERLYING SARS GRANTED TO EXERCISE OR FOR OPTION TERM (3)
OPTIONS/ SARS EMPLOYEES IN BASE PRICE EXPIRATION --------------------
NAME GRANTED (#) FISCAL YEAR (2) ($/SHARE) DATE 5% ($) 10% ($)
- -------------------------------------------- ------------- ----------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
John C. Dean................................ -- -- -- -- -- --
Glen Blackmon............................... 21,500 5.84% $ 13.63 01/24/2000 $ 80,963 $ 178,907
A. John Busch............................... 21,500 5.84% $ 13.63 01/24/2000 $ 80,963 $ 178,907
James F. Forrester.......................... 21,500 5.84% $ 13.63 01/24/2000 $ 80,963 $ 178,907
Richard H. Harding.......................... 21,500 5.84% $ 13.63 01/24/2000 $ 80,963 $ 178,907
Glen G. Simmons............................. 21,500 5.84% $ 13.63 01/24/2000 $ 80,963 $ 178,907
</TABLE>
- ------------------------------
(1) Consists entirely of options granted pursuant to the Company's 1989 Stock
Option Plan (the "Plan"). The Plan provides for administration of the Plan
by the Board of Directors of the Company, or by the Stock Committee (to
which Committee the Board has delegated authority to administer the Plan)
(the "Administrator"). As Administrator, the Stock Committee designates the
persons to be granted options, the type of option, the number of underlying
shares, the exercise price, the date of grant and the date options are
exercisable. The Administrator also has broad discretion to amend
outstanding options or to effect repricings. These options were granted at
100% of the fair market value of the Company's Common Stock on the date of
grant. The option grants vest ratably over three years and expire five
years from the date of grant. Upon a "Change in Control" of the Company or
the Bank, the options will become fully exercisable.
(2) Based on options to purchase an aggregate of 368,250 shares of Common Stock
granted to all employees during 1995.
(3) Represents the potential net realizable dollar value of the option grants,
i.e., the market price of the underlying shares (adjusted for the assumed
annual stock appreciation rates of 5% and 10%, respectively, with the
assumed rates compounded annually over the five-year term of the options),
minus the aggregate exercise price of the options. The stock price
appreciation rates are mandated by SEC rules and do not represent the
Company's estimate of future stock prices.
13
<PAGE>
The following table sets forth information concerning the exercise of
options during 1995 and the options held at 1995 fiscal year-end by Named
Officers.
TABLE 3 -- AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/ SARS
ACQUIRED ON VALUE YEAR-END AT FISCAL YEAR-END (3)
EXERCISE REALIZED (2) ---------------------------- --------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- ----------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Dean............................ -- -- 50,000 50,000 $ 753,000 $ 753,000
Glen Blackmon........................... -- -- 15,100 31,400 $ 198,204 $ 355,351
A. John Busch........................... -- -- 17,940 32,060 $ 244,938 $ 367,937
James F. Forrester...................... 15,819 $ 159,445 21,150 36,350 $ 274,469 $ 427,737
Richard H. Harding...................... -- -- 17,940 32,060 $ 278,438 $ 384,437
Glen G. Simmons......................... -- -- 15,100 31,400 $ 226,612 $ 369,343
</TABLE>
- ------------------------------
(1) Consists entirely of stock options. No stock appreciation rights ("SARs")
have been awarded to date.
(2) Represents the market price of the underlying securities on the date of the
option exercise, minus the exercise price.
(3) Represents the market value of the underlying securities at 1995 fiscal
year-end, based on the $24.00 closing market price of the Company's Common
Stock on the National Association of Securities Dealers Automated
Quotation/National Market System on December 29, 1995, less the exercise
price.
EMPLOYEE STOCK OWNERSHIP PLAN
The Company makes annual contributions to the now combined 401(k) and
Employee Stock Ownership Plan. (In 1995, the Company Employee Stock Ownership
Plan [a qualified stock bonus plan under the Internal Revenue Code] merged into
the Bank 401(k) Plan [a qualified profit sharing plan under the Internal Revenue
Code].) Hereinafter, "ESOP" shall refer to the portion of the combined plan that
includes amounts contributed by the Company on a compensation-based formula. The
assets of the ESOP (primarily Company stock) are held in trust for the exclusive
benefit of the employee-participants. Annual contribution amounts to the ESOP
are tied to the Company's profitability. Under the 1995 program, the guaranteed
contribution was 5% of each employee's eligible base compensation, with,
however, an additional potential 10% (of eligible base compensation) to be paid,
depending on attaining Company profitability goals (subject to certain
limitations on contributions under the Internal Revenue Code and other
limitations, including vesting provisions, under the ESOP). The Company's
profitability in 1995 (reaching stretch goals) resulted in contributions to each
employee of 15% of annual eligible base compensation.
TERMINATION ARRANGEMENTS
The Bank has entered into Termination Agreements ("Termination Agreements")
with Messrs. Dean, Blackmon, Busch, Forrester, Harding, Simmons and other
executive officers. The Termination Agreements provide for severance pay and
continuation of certain benefits if (1) the executive's employment is terminated
following a "Change in Control" (defined below) or (2) the executive is
terminated without cause, other than in connection with a Change in Control. The
Termination Agreements were approved by disinterested members of the Boards of
Directors of the Company and the Bank during 1994.
TERMINATION FOLLOWING A CHANGE IN CONTROL. In order for an executive to
receive benefits under the Termination Agreements following a Change in Control,
the executive must (i) be terminated involuntarily without cause or
constructively terminated within 12 months following the Change in Control or
(ii) voluntarily terminate his employment within 180 days following a Change in
Control (in which case he retains the right to limited severance benefits,
including one-half of the termination payments otherwise provided for following
a Change in Control).
14
<PAGE>
Under the Termination Agreements, a "Change in Control" will be deemed to
have occurred in any of the following circumstances:
(1) the acquisition of 50% or more of the outstanding voting stock of
the Company or the Bank by any person or entity, with certain exceptions for
employee benefit plans of the Company or the Bank;
(2) the acquisition of 25% or more of the outstanding voting stock of
the Company or the Bank by any person or entity and a change in the
composition of the Board during the following 12 months such that those
persons serving as directors immediately prior to the share acquisition, and
those new directors elected by a vote of at least two-thirds of the
directors of the Company or the Bank, cease to make up at least 60% of the
directors of the Company or the Bank;
(3) a merger or consolidation of the Company or the Bank with any other
corporation, other than a merger or consolidation in which the shareholders
of the Company or the Bank immediately prior thereto continue to own at
least 75% of the outstanding voting stock of the surviving entity; or
(4) the complete liquidation of the Company or the Bank, or disposition
of all or substantially all of the Company's or the Bank's assets.
A constructive termination is deemed to have occurred if the executive
resigns in writing following a reduction in the executive's then annual base
salary, a material reduction in the executive's responsibilities, incentive
compensation or benefits, or a relocation by more than 50 miles of the principal
place at which the executive works.
Under the Termination Agreements, the amount of severance benefits payable
to an executive whose employment is terminated during the 12 months following a
Change in Control is dependent upon the "transaction price multiple" of the then
book value of the Company or the Bank. As the transaction price multiple of book
value increases above 1.0, the severance benefit (represented as a multiple of
the executive's base salary) increases. For the percentage of consideration
received in excess of book value, the executive is entitled to receive twice
that percentage multiplied by his then annual base salary. Also, the executive
is entitled to a pro rata portion of earned bonus compensation. Finally, upon
such a termination, all outstanding options (representing interests in the
Company's Common Stock) will become immediately and fully vested (and may be
exercised within three months following termination) and all restrictions upon
any restricted Company stock will lapse immediately and all such shares will
become fully vested.
In linking the amount of termination payments within 12 months following a
Change in Control to the transaction price multiple of book value, the Boards of
Directors of the Company and the Bank underscored their view that management
should be rewarded correspondingly for increased shareholder value. Therefore,
the amount of severance payments to executives under the Termination Agreements
increases in direct proportion to increases in value realized through a Change
in Control of the Company or the Bank. Conversely, sale of the Company or the
Bank for less than book value, would result in no cash payout to executives
under the Termination Agreements, although they would still be entitled to
acceleration of vesting and continuation of benefits.
The severance program approved by the Boards of the Company and the Bank
includes non-executive Bank officers above a specified grade level in the Bank.
The amount of severance benefits payable to officers below the executive level
is likewise dependent upon the "transaction price multiple" described above.
Under the program for non-executive officers, as the grade level of the officer
in the Bank increases, the multiple of the officer's base salary used in
determining the severance benefit increases.
In reviewing the proposed Termination Agreements, the Boards of the Company
and the Bank researched Change in Control protections afforded to employees in
other banking institutions of similar size. Based on this review, it is the
Board's view that the program approved by the Boards is
15
<PAGE>
less generous to employees than programs typically afforded to other
institutions' employees, particularly, in light of the required premium benefits
to shareholders as a condition to any cash severance payments being made.
TERMINATION WITHOUT CAUSE. Under the Termination Agreements, executives are
entitled to different severance benefits if they are terminated without cause
either prior to a Change in Control or more than 12 months after a Change in
Control. The severance benefit is equal to 50% of the executive's then annual
base salary, plus a pro rata portion of earned bonus compensation. The payment
may be made in a lump sum or, at the executive's election, in equal monthly
installments for a period not to exceed six months from the date of termination.
During the period, the executive is entitled to receive reasonable outplacement
services and continuation of insurance and other health related benefits
provided by the Bank. Also, all outstanding options (representing interests in
the Company's Common Stock) on the date of termination will become immediately
and fully vested (and may be exercised within three months following
termination) and all restrictions upon any restricted Company stock will lapse
immediately and all such shares will become fully vested.
LIMITATION ON SEVERANCE PAYMENTS. To the extent that the severance payments
otherwise called for by the Termination Agreements would trigger "golden
parachute" tax treatment pursuant to Section 280G and/or Section 4999 of the
Internal Revenue Code, the payments will be reduced so that such adverse tax
consequences to the Company are not triggered.
DEAN EMPLOYMENT AGREEMENT
Mr. Dean entered into an employment agreement with the Company and the Bank,
effective April 12, 1993. The agreement provided for a one-year term of
employment, renewable annually thereafter by mutual agreement. Pursuant to his
employment agreement, Mr. Dean received a grant of 50,000 shares of restricted
stock in 1993, of which 25% were originally scheduled to vest on each of March
31, 1993, 1994, 1995 and 1996. Such shares were originally subject to a
restriction on resale for two years following vesting. This stock grant was
amended in the last quarter of 1993 to provide that no shares would vest until
March 31, 1996, at which time 100% of the shares would vest. The agreement was
further amended in 1995 to delete the two-year resale restriction. (The resale
restriction was deleted to provide Mr. Dean with sufficient liquidity to pay the
income taxes on the 50,000 shares vesting in 1996.) Additionally, under Mr.
Dean's employment agreement, the Company granted Mr. Dean options to purchase
50,000 shares of the Company's Common Stock pursuant to the Company's 1989 Stock
Option Plan (with the agreement providing for options to purchase an additional
50,000 shares under the terms of the agreement). The options vest as to 25% each
year, beginning in 1994. With the adoption of the above-described Termination
Agreements and with the exception of the above-described terms in Mr. Dean's
employment agreement, most key provisions of Mr. Dean's employment agreement
have been superseded.
SMITH EMPLOYMENT AGREEMENT
Roger V. Smith resigned as a member of the Company Board, effective October
24, 1995.
Pursuant to an Employment Agreement, Mr. Smith will remain employed by the Bank
through October 31, 1997. Thereafter, Mr. Smith's employment term may be renewed
for three successive one-year periods (commencing on November 1, 1997, November
1, 1998, and November 1, 1999, respectively) under certain conditions and
circumstances. During the employment term, Mr. Smith shall receive a monthly
salary of $8,333. Also, during the employment term, all options held by Mr.
Smith will continue to be outstanding and vest in accordance with their
respective terms.
WOODWARD CONSULTING AGREEMENT
Allyn C. Woodward resigned as Senior Executive Vice President and Chief
Operating Officer of the Bank, effective April 1, 1995. The Bank and Mr.
Woodward have entered into a consulting agreement, effective April 1, 1995,
pursuant to which Mr. Woodward will continue to serve as a consultant to the
Bank until October 1996. Under the consulting agreement, the Bank will pay Mr.
Woodward $214,200 over the 19-month period from April 1995 to October 1996, for
Mr. Woodward's services as a consultant. Until October 1996, all stock options
held by Mr. Woodward
16
<PAGE>
will continue to be outstanding and vest in accordance with their respective
terms. Additionally, the Company and the Bank granted Mr. Woodward 25,000 shares
of the Company's Common Stock, which vested as to 1/3 of such number of shares
on January 5, 1996 (on account of Mr. Woodward's non-competition with the Bank
through and including such date), and which will vest as to 1/3 of such number
of shares on each of January 5, 1997 and 1998, contingent upon Mr. Woodward's
continued non-competition with the Bank through and including the respective
vesting dates.(1)
UYEMURA AGREEMENTS
The Company and the Bank entered into an agreement with Dennis G. Uyemura
pursuant to which Mr. Uyemura resigned as Chief Financial Officer of the Company
and the Bank, effective September 15, 1995. In accordance with the "termination
without cause" provisions of the Termination Agreement previously entered into
between the Bank and Mr. Uyemura, as described above, Mr. Uyemura received a
severance benefit equal to 50% of his then annual base salary on the date of
termination, plus a pro rata portion of earned bonus compensation. Also, Mr.
Uyemura's outstanding options on September 15, 1995 became immediately and fully
vested. Additionally, the Company, the Bank, and Mr. Uyemura have entered into a
Consulting Agreement, pursuant to which Mr. Uyemura has been engaged as a
consultant to work on the Company's transition to a new financial management
system. During the consulting term (September 15, 1995 through March 15, 1996),
Mr. Uyemura will be paid $6,667 per month.
- ------------------------
(1) As reported in the Company's 1995 Proxy Statement, Mr. Woodward's 25,000
restricted shares of the Company's Common Stock held at December 31, 1994
were forfeited to the Company. The grant described in this paragraph
constituted a new grant to Mr. Woodward.
17
<PAGE>
BOARD COMMITTEES AND MEETING ATTENDANCE
The Company and the Bank have Audit, Directors' Loan, Executive, Finance,
Personnel and Compensation/Stock Committees of their respective Boards of
Directors. Members as of the Record Date were as follows:
<TABLE>
<CAPTION>
AUDIT DIRECTORS' LOAN EXECUTIVE
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Clarence J. Ferrari, Jr., Chair Gary K. Barr, Chair Daniel J. Kelleher, Chair
James F. Burns, Jr. John C. Dean James F. Burns, Jr.
Henry M. Gay David M. deWilde John C. Dean
James R. Porter Daniel J. Kelleher Michael Roster
Ann R. Wells
<CAPTION>
PERSONNEL AND
FINANCE COMPENSATION/STOCK
- ------------------------------------ ------------------------------------
<S> <C> <C>
James F. Burns, Jr., Chair Ann R. Wells, Chair
John C. Dean Gary K. Barr
Clarence J. Ferrari, Jr. David M. deWilde
James R. Porter Henry M. Gay
Michael Roster
</TABLE>
AUDIT COMMITTEE (JOINT COMPANY/BANK COMMITTEE) 13 meetings in fiscal year 1995
- Approves the selection and termination of the Company's independent
auditors;
- Reviews the scope and results of the audit plans of the independent
auditors;
- Reviews the adequacy of the Company's internal accounting controls;
- Reviews with management, and with the independent auditors, reports filed
with banking regulatory agencies and the Securities and Exchange
Commission;
- Evaluates the activities and utilization of the Company's internal
auditing personnel; and
- Oversees management's efforts in ensuring that the Company is complying
with accounting standards and with federal and state banking laws.
DIRECTORS' LOAN COMMITTEE (BANK COMMITTEE) 62 meetings in fiscal year 1995
- Works with management in seeking to ensure that the Bank maintains and
enforces the Bank's credit policy and credit procedures;
- Works with management in ensuring compliance with lending limit
restrictions and with established portfolio constraints and limitations;
- Works with management in ensuring problem credits are identified on a
timely basis;
- Establishes lending authority levels for Bank committees and respective
officer levels in the Bank; and
- Reviews the Bank's community delineation's to ensure that they meet the
purposes of the Community Reinvestment Act.
EXECUTIVE COMMITTEE (SEPARATE COMPANY/BANK COMMITTEES) 8 meetings (Company
Executive
Committee) in fiscal year
1995
5 meetings (Bank Executive
Committee) in fiscal year
1995
- Works with management in developing long-term strategic plans;
- Has the authority of the Board between Board meetings, except as otherwise
provided by California law; and
18
<PAGE>
- Serves as the nominating committee for directors as well as Board and
Board committee chairs. (The Executive Committee will consider nominees
for director who are recommended by shareholders. Shareholders that wish
to submit names of prospective director-nominees for consideration by the
Executive Committee should do so in writing to the Secretary of Silicon
Valley Bancshares, 3003 Tasman Drive, Santa Clara, CA 95054.)
FINANCE COMMITTEE (BANK COMMITTEE) 11 meetings in fiscal year 1995
- Oversees the Bank's investment and funds management policies, which are
comprised of the following four policies: investment policy, liquidity
management policy, asset/liability management policy, and capital
management policy; and
- Reviews and approves the Company's and the Bank's insurance policies.
PERSONNEL AND COMPENSATION COMMITTEE 9 meetings in fiscal year 1995
(BANK COMMITTEE)
- Works with management in ensuring that the Bank's long-term and short-term
compensation programs are competitive and effective in attracting,
retaining, and motivating highly-skilled personnel;
- Reviews and approves the Chief Executive Officer's (and the Bank's
Managing Committee members') compensation;
- Ensures that an appropriate mix of long-term and short-term compensation
programs are in place to provide performance-oriented incentives to the
Bank's employees; and
- Reviews and approves compensation and employee benefit plans. (With regard
to stock-based plans, the Personnel and Compensation Committee coordinates
its efforts with those of the Company's Stock Committee.)
STOCK COMMITTEE (COMPANY COMMITTEE) 4 meetings in fiscal year 1995
- Reviews and approves all stock-based compensation plans, including
employee stock option plans and employee stock ownership plans;
- Makes option grants to executive officers; and
- Works with the Bank's Personnel and Compensation Committee in ensuring
that stock-based compensation plans for the Company and the Bank are
effective in incentivizing employees to excel in performance.
Actions taken by the above-described Board Committees are reported to the
Company or Bank Board, as appropriate, following the Committee meetings.
During fiscal year 1995 (ended December 31, 1995), the Company Board of
Directors met 10 times: 4 regular meetings and 6 special meetings. During fiscal
year 1995 (ended December 31, 1995), the Bank Board of Directors met 12 times:
12 regular meetings and zero special meetings. All directors attended at least
75% of the aggregate of all Board meetings and meetings held by Committees of
which they were members.
DIRECTOR COMPENSATION
Outside directors receive an annual automatic stock grant of 2,500 shares of
the Company's Common Stock, together with reimbursement for travel expenses. The
annual grants of 2,500 shares are issued under the Company's 1989 Stock Option
Plan. Subject to re-election to the Board, each director will be granted an
award of 2,500 shares on April 19, 1996 in recognition of 1996-1997 service
19
<PAGE>
on the Board. During 1995, Directors Barr, Burns, Ferrari, Gay, Kelleher,
Porter, Roster and Wells each received a 2,500-share grant and Director deWilde
received a 2,083-share grant upon joining the Board in July 1995.
The Chair of the Board receives an additional annual fee of $5,000. The
Chairs of the respective Board Committees, as well as the Vice-Chair of the
Board, each receive an annual fee of $1,500. Finally, outside directors on the
Directors' Loan Committee (including the Chair of this Committee) receive $150
for every Committee meeting attended after the first two in any calendar month.
The Committee has five scheduled meetings each calendar month.
The compensation program for outside directors currently is under review by
the Personnel and Compensation Committee and is subject to change.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS
PRINCIPAL SHAREHOLDERS
Information concerning the owners of more than 5% of the outstanding Common
Stock of the Company (as of the Record Date) follows. The Company knows of no
persons other than those entities described below who beneficially own more than
5% of the outstanding Common Stock of the Company.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
-----------------------
NUMBER OF PERCENT OF
NAME OF BENEFICIAL OWNER SHARES TOTAL
- ---------------------------- --------- ------------
<S> <C> <C>
Entities affiliated with 704,015(1) 7.7%
Brinson Partners, Inc.
209 South La Salle
Chicago, Illinois 60604
Entities affiliated with 615,945(2) 6.7%
GeoCapital Corporation
767 Fifth Avenue
New York, New York 10153
H.A. Schupf & Co., Inc. 597,990(3) 6.6%
101 East 52nd Street
New York, New York 10022
T. Rowe Price Associates, 519,000(4) 5.7%
Inc.
T. Rowe Price Small
Cap Value Fund, Inc.
100 E. Pratt Street
Baltimore, Maryland 21202
</TABLE>
- ------------------------------
(1) The number of shares, together with information in this footnote, have been
derived from Amendment No. 2 to Schedule 13G dated as of February 9, 1996 by
Brinson Partners, Inc. ("BPI"), an investment adviser, as filed with the
Securities and Exchange Commission ("SEC"). BPI is a wholly owned subsidiary
of Brinson Holdings, Inc. ("BHI"), a parent holding company; and Brinson
Trust Company ("BTC"), a bank, is a wholly-owned subsidiary of BPI. BHI is a
wholly-owned subsidiary of SBC Holding (USA), Inc. ("SBCUSA"). SBCUSA is a
wholly-owned subsidiary of Swiss Bank Corporation ("SBC"). SBC, SBCUSA, BHI
and BPI may be deemed to beneficially own and have the power to dispose and
vote or direct the disposition of voting of the Common Stock held by BTC and
BPI. BTC has shared voting and dispositive power with respect to 188,215
shares and BPI has shared voting and dispositive power with respect to
704,015 shares.
(2) The number of shares in this table, together with information in this
footnote, have been derived from the Schedule 13G dated as of February 15,
1996 by GeoCapital Corporation ("GCC"), as filed with the SEC. GCC is deemed
to be the beneficial owner of 517,745 shares since it has the sole power to
dispose or to direct the disposition of such shares; however, GCC does not
have any voting power with respect to such shares. Irwin Lieber and Barry K.
Fingerhut, principal stockholders of GCC, own directly 42,650 and 51,350
shares, respectively. Jeanne E. Flaherty, an employee of GCC, owns 500
shares; Seth Lieber, an employee of GCC, owns 1,500 shares; Jonathan Lieber,
an employee of GCC, owns 2,000 shares; and Wilma Engel, an individual, owns
200 shares. In addition, by reason of their ownership interests in GCC,
Messrs. Lieber and Fingerhut may also be deemed to be indirect beneficial
owners of the 517,745 shares that GCC is deemed to own beneficially.
20
<PAGE>
(3) The number of shares in this table, together with information in this
footnote, have been derived from Amendment No. 3 to Schedule 13G dated as of
January 26, 1996 by H. A. Schupf & Co., Inc., an investment adviser, as
filed with the SEC. H. A. Schupf & Co., Inc., has sole voting power with
respect to 50,000 shares and sole dispositive power with respect to all
597,990 shares. Its clients are the actual owners of 547,990 of the shares
and have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, such securities. No
individual client has an interest that relates to more than five (5) percent
of the class.
(4) The number of shares, together with information in this footnote, have been
derived from the Schedule 13G dated as of February 14, 1996 by T. Rowe Price
Associates, Inc. ("TRP Associates"), an investment adviser and T. Rowe Price
Small Cap Value Fund, Inc. ("TRP Fund"), as filed with the SEC. TRP
Associates has sole voting power with respect to 35,000 shares and sole
dispositive power with respect to 519,000 shares. TRP Fund has sole voting
power with respect to 480,500 shares (which number of shares is included in
the number of shares reported by TRP Associates) and sole dispositive power
as to no shares. The ultimate power to receive dividends and the power to
direct the receipt of dividends are vested in the individual and
institutional clients to which TRP Associates serves as investment adviser.
No client has an interest that relates to more than five (5) percent of the
class. With respect to securities owned by the TRP Fund, only State Street
Bank and Trust Company, as custodian for the TRP Fund, has the right to
receive dividends paid with respect to, and proceeds from the sale of, such
securities. The shareholders of the TRP Fund participate proportionately in
any dividends and distributions so paid.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company believes that during fiscal year 1995, with the exception of the
following items, its officers (as defined in the rules under Section 16 of the
Exchange Act) and directors have complied with all Section 16(a) filing
requirements, except that (i) James Forrester and Harry Kellogg each made one
late filing with regard to one sale in 1995 and (ii) Catherine Ngo made one late
filing with regard to one purchase in 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors of the Company and Bank and the entities with which they
are affiliated are customers of the Bank and have had banking transactions with
the Bank in the ordinary course of business. The Board of Directors of the Bank
adopted a policy during 1992 to prohibit new loans or the renewal of existing
loans to insiders after December 31, 1993. Term loans existing at December 31,
1992 were permitted to remain outstanding until scheduled maturity. The Company
believes that all extensions of credit included in such transactions were made
in compliance with applicable laws and on substantially the same terms,
including interest rates, collateral and repayment terms, as those prevailing at
the time for comparable transactions with other persons of similar
creditworthiness and, in the opinion of the Board of Directors of the Bank, did
not involve more than a normal risk of collectibility or default or present any
other unfavorable features.
See, however, "Compensation Committee Interlocks and Insider Participation."
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS TO
THE SILICON VALLEY BANCSHARES 1989 STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE OPTION PLAN
PROPOSED AMENDMENT
The 1989 Silicon Valley Bancshares Stock Option Plan (the "Option Plan") was
amended by the Board of Directors in February 1996, subject to approval by the
Company's shareholders, to reserve an additional 150,000 shares for issuance
thereunder, bringing the total number of shares under the Option Plan to
1,626,532 shares. A principal reason for the proposed increase in number of
shares under the Option Plan is to provide for the grant of options to purchase
100,000 shares to a consulting firm that has been assisting the Company in
development and implementation of a new financial management system. The new
financial management system is intended to assist in maximizing shareholder
value through enhanced employee performance, by more closely aligning employee
interests with that of the Company's shareholders. The option grant to the
consulting firm will be made on
21
<PAGE>
the date of the Annual Meeting of Shareholders (April 18, 1996) at an exercise
price equal to the greater of (a) $20.00 per share or (b) the closing market
price of the underlying Common Stock on April 18, 1996, subject to shareholder
approval of the increase in number of shares under the Option Plan. If such
proposed increase in the number of shares is not approved, the subject
consulting contract provides for a cash payment in lieu of the option grant.
PARTICIPATION IN THE OPTION PLAN
The grant of options, stock purchase rights and stock bonuses under the
Option Plan to employees, including the executive officers named in the Summary
Compensation Table (the "Named Officers"), is subject to the discretion of the
Company's Board of Directors or of the Stock Committee (to which Committee the
Board has delegated authority to administer the Option Plan) (the
"Administrator"). As of the date of this proxy statement, the only awards that
have been granted under the Option Plan are options and stock bonuses. There has
been no determination made by the Administrator with respect to future
discretionary awards to employees or consultants under the Option Plan.
Accordingly, future awards to employees are not determinable. Non-employee
directors are only eligible to participate in the automatic grant program under
the Option Plan. The automatic grant of shares to non-employee directors under
the plan is non-discretionary but is subject to the continued service as a
director on the automatic grant date. Accordingly, future awards to non-employee
directors are not determinable. The following table sets forth information with
respect to the grant of options/stock bonuses during the last fiscal year:
TABLE 4 -- AMENDED PLAN BENEFITS TABLE
1989 STOCK OPTION PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE NUMBER OF SHARES
OF SUBJECT TO
OPTIONS/STOCK OPTIONS/STOCK
NAME OR IDENTITY OF GROUP POSITION BONUSES (1) BONUSES GRANTED
- --------------------------------------- --------------------------------------- -------------- -----------------
<S> <C> <C> <C>
John C. Dean President and Chief Executive Officer $ 217,872 9,078(2)
Glen Blackmon Executive Vice President, Chief $ 516,000 21,500(3)
Financial Officer and Chief Information
Officer
A. John Busch Executive Vice President, Chief Credit $ 571,968 23,832(4)
Officer and General Counsel
James F. Forrester Executive Vice President $ 516,000 21,500(3)
Richard H. Harding Executive Vice President $ 516,000 21,500(3)
Glen G. Simmons Executive Vice President $ 516,000 21,500(3)
All Current Executive Officers as a $ 2,853,840 118,910(5)
Group
All Other Employees as a Group $ 6,475,920 269,830(6)
All Outside Directors as a Group $ 1,114,992 46,458(2)
</TABLE>
- ------------------------------
(1) In the case of options, dollar value does not represent potential
realizable value to the optionee, but was computed by multiplying the number
of shares by the closing market price of the Company's Common Stock of
$24.00 on December 29, 1995 as quoted in the National Association of
Securities Dealers Automated Quotation/National Market System. In the case
of stock bonuses, dollar value was computed by multiplying the number of
shares by the closing market price of the Company's Common Stock of $24.00
on December 29, 1995 as quoted in the National Association of Securities
Dealers Automated Quotation/National Market System.
(2) Includes shares under stock bonuses only.
(3) Includes shares subject to options only.
(4) Includes 21,500 shares subject to options and 2,332 shares under stock
bonuses.
(5) Includes 107,500 shares subject to options and 11,410 shares under stock
bonuses.
(6) Includes 260,750 shares subject to options and 9,080 shares under stock
bonuses.
22
<PAGE>
The essential features of the Option Plan are outlined below.
GENERAL
The Board of Directors believes that the ability to grant equity-based
awards is an important factor in attracting and retaining skilled employees,
directors and consultants. The Board believes that such equity-based awards help
to align the interests of employees, directors and consultants with the
interests of the Company and shareholders of the Company.
ESSENTIAL FEATURES
The Option Plan provides for the grant of stock options, stock bonuses and
stock purchase rights to eligible participants. As of December 31, 1995, options
to purchase 451,632 shares had been exercised, options to purchase 951,959
shares were outstanding and 72,941 shares were available for future grant. If
the shareholders approve the proposed amendment, there will be 222,941 shares
available for future grant (of which options to purchase 100,000 shares will be
granted to the consulting firm described above.)
PURPOSE
The purposes of the Option Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to employees, directors and consultants of the Company and to promote
the success of the Company's business.
ADMINISTRATION
With respect to discretionary grants of options, stock bonus awards or stock
purchase rights to employees who are also officers or directors of the Company
subject to Section 16(b) of the Exchange Act, the Option Plan will be
administered in such a manner as to satisfy the disinterested administration
requirements of Rule 16b-3 promulgated under the Exchange Act or any successor
rule thereto ("Rule 16b-3"). The Option Plan is currently being administered by
the Stock Committee, in conjunction with the Personnel and Compensation
Committee (collectively, the "Committee"). With respect to the annual automatic
stock awards to members of the Board of Directors, as described below, such
grants shall be automatic and not subject to the discretion of any person.
ELIGIBILITY
The Option Plan provides that discretionary awards may be granted to
employees, directors and consultants of the Company or any parent or
majority-owned subsidiary. Incentive stock options may be granted only to
employees. Except with respect to annual automatic stock bonus awards to members
of the Board of Directors, the Board or the Committee selects the recipients and
determines the number of shares to be subject to each award. In making such
determination, the duties and responsibilities of the recipient, the value of
his or her services, his or her present and potential contribution to the
success of the Company, the anticipated number of years of future service and
other relevant factors are taken into account. As of December 31, 1995, there
are approximately 348 employees, nine directors and one consultant eligible to
participate in the Option Plan.
AUTOMATIC STOCK AWARDS TO DIRECTORS
The Option Plan, as amended, provides that members of the Board of
Directors, who are not also employees of the Company (or affiliates thereof) and
who have not been employees of the Company (or affiliates thereof) for the
period commencing three years prior to the date of any grants under this
paragraph ("Outside Directors"), shall be automatically awarded 2,500 shares of
the Company's Common Stock on the day after the Annual Meeting. Pursuant to this
provision, Directors Barr, Burns, deWilde, Ferrari, Gay, Kelleher, Porter,
Roster and Wells will receive 2,500 shares if they are re-elected to the Board
at the Annual Meeting. Moreover, Outside Directors who are appointed or elected
to the Board subsequent to the grant date shall automatically be awarded a
number of shares of the Company's Common Stock, on the date of such appointment
or election, determined by multiplying 2,500 by a fraction, the numerator of
which shall be the number of months until the next May 1 (counting any partial
month as a full month) and the denominator of which shall be 12, which number
shall be rounded down to the nearest whole integer.
23
<PAGE>
Director stock awards granted under the Option Plan, as amended, are not
subject to vesting or contractual transfer restrictions.
LIMITATIONS ON AWARDS
The Option Plan limits the discretion allowed to the Committee in granting
awards. The limitation provides that no employee may be granted in any one
fiscal year awards to receive more than 250,000 shares of Common Stock of the
Company. This limitation is intended to preserve the Company's ability to deduct
for federal income tax purposes the compensation expense relating to awards
granted to certain executive officers under the Option Plan. Without this
provision in the Option Plan, Section 162(m) of the Code might limit the
Company's ability to deduct such compensation expense.
TERMS OF OPTIONS
The terms of options granted under the Option Plan are determined by the
Board or the Committee. Each option granted under the Option Plan is evidenced
by a written stock option agreement between the Company and the optionee and is
subject to the following additional terms and conditions:
(a) EXERCISE OF THE OPTION. Under forms of Option Agreements used with
the Option Plan, options typically vest as to one-quarter to one-third of
the shares after the first year of grant and at the rate of one-quarter to
one-third of the shares per year thereafter, as determined by the Board of
Directors or the Committee, although different vesting schedules may be
used. An option granted under the Option Plan is exercised by giving written
notice of exercise to the Company, specifying the number of full shares of
Common Stock to be purchased and tendering payment of the purchase price to
the Company. Payment for shares issued upon exercise of an option may
consist of cash, check, promissory note, other shares of the Company's
Common Stock that have been held by the optionee for at least six months,
cashless exercise or any combination of such methods of payment, or such
other consideration and method of payment as is permitted under applicable
laws.
(b) EXERCISE PRICE. The per share exercise price of options granted
under the Option Plan is determined by the Board or the Committee and, in
the case of incentive stock options, may not be less than 100% of the fair
market value on the date of grant. However, in the case of options granted
to an optionee who owns more than 10% of the voting power or value of all
classes of stock of the Company, the per share exercise price must not be
less than 110% of the fair market value on the date of grant. The closing
price of the Company's Common Stock on the National Association of
Securities Dealers Automated Quotation/National Market System on December
29, 1995, was $24.00 per share.
(c) TERMINATION OF STATUS AS AN EMPLOYEE, CONSULTANT OR DIRECTOR. If
the optionee's employment or consulting relationship with the Company or
status as a Director is terminated for any reason (other than death or
disability), options are exercisable for three months (or such other period
of time not exceeding six months as is determined by the Board or the
Committee) after such termination as to all or part of the shares as to
which the optionee was entitled to exercise at the date of such termination.
(d) DEATH OR DISABILITY OF OPTIONEE. Options are exercisable for no
more than 12 months (or such shorter time as is determined by the Board, or
the Committee, with such determination in the case of an incentive stock
option being made at the time of grant of the option) following termination
because of a permanent and total disability or within 12 months by the
employee's estate after his or her death.
(e) TERM AND TERMINATION OF OPTIONS. Options granted under the Option
Plan shall be for a term not to exceed 10 years, as determined by the Board
or the Committee on the date of grant. No option may be exercised by any
person after the expiration of its term. In the case of an option granted to
an optionee who, immediately before the grant of such option, owns more than
10% of the voting power of all classes of stock of the Company, the term of
the option may not be more than five years.
24
<PAGE>
(f) OTHER PROVISIONS. The option agreement may contain such other
terms, provisions and conditions not inconsistent with the Option Plan as
may be determined by the Board or the Committee.
TERMS OF STOCK PURCHASE RIGHTS
The Option Plan permits the Company to grant stock purchase rights to
purchase Common Stock of the Company ("Stock Purchase Rights") either alone, in
addition to, or in tandem with other awards under the Option Plan and/or cash
awards made outside the Option Plan. Upon the granting of a Stock Purchase
Right, the offeree shall be advised in writing of the terms, conditions and
restrictions related to the offer, including the number of shares of Common
Stock that the offeree shall be entitled to purchase, the price to be paid and
the time within which the offeree must accept such offer (which shall in no
event exceed 60 days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right). The offer shall be accepted by
execution of a restricted stock purchase agreement between the Company and the
offeree.
Unless the Administrator determines otherwise, the restricted stock purchase
agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary termination of the purchaser's employment or consulting
relationship with the Company for any reason (including death or permanent and
total disability). The purchase price for shares repurchased pursuant to the
restricted stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
TERMS OF STOCK BONUS AWARDS
The Option Plan also permits the granting of stock bonuses ("Stock Bonus
Awards"). Such awards shall be based on such performance or employment-related
factors as the Administrator, in its discretion, shall determine. Stock Bonus
Awards may vary from participant to participant and group to group. Such awards
shall be granted for no cash consideration.
Stock Bonus Awards will be payable in Common Stock of the Company and may be
subject to forfeiture provisions (i.e., may be in the form of restricted stock
with vesting provisions).
NONTRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS
An option or Stock Purchase Right is not transferable by the recipient,
other than by will or the laws of descent and distribution, and is exercisable
during the recipient's lifetime only by the recipient. In the event of the
recipient's death, options or Stock Purchase Rights may be exercised by a person
who acquires the right to exercise the option or right by bequest or
inheritance.
CHANGES IN CAPITALIZATION
In the event a change, such as a stock split or stock dividend payable in
Common Stock, is made in the Company's capitalization that results in an
exchange of Common Stock for a greater or lesser number of shares without
receipt of consideration by the Company, appropriate adjustment shall be made in
the price and number of shares subject to outstanding awards. Appropriate
adjustment will
also be made in the number of shares of Common Stock that have been authorized
for issuance under the Option Plan but as to which no awards have yet been
granted or that have been returned to the Option Plan upon cancellation of an
award. Such adjustments shall be made by the Board of Directors, whose
determination shall be final, binding and conclusive, subject to any required
action by the shareholders of the Company.
In the event of a "Change in Control" (defined below) recipients of
outstanding options and rights shall have the right to exercise, and shall be
vested as to, all outstanding options and rights as to all of the stock covered
thereby, including shares as to which the option or right would not otherwise be
exercisable or vested. If outstanding options and rights become fully vested in
the event of a Change in Control, the Board shall notify all participants that
their outstanding options and rights shall be fully
25
<PAGE>
exercisable for a period of three months (or such other period of time not
exceeding six months as is determined by the Board or Committee at the time of
grant) from the date of such notice, and any unexercised options or rights shall
terminate upon the expiration of such period.
"Change in Control" means:
(1) the acquisition of 50% or more of the outstanding voting stock of
the Company or the Bank by any person or entity, with certain exceptions for
employee benefit plans of the Company or the Bank;
(2) the acquisition of 25% or more of the outstanding voting stock of
the Company or the Bank by any person or entity and a change in the
composition of the Board during the following 12 months such that those
persons serving as directors immediately prior to the share acquisition, and
those new directors elected by a vote of at least two-thirds of the
directors of the Company or the Bank, cease to make up at least 60% of the
directors of the Company or the Bank;
(3) a merger or consolidation of the Company or the Bank with any other
corporation, other than a merger or consolidation in which the shareholders
of the Company or the Bank immediately prior thereto continue to own at
least 75% of the outstanding voting stock of the Company or the Bank; or
(4) the complete liquidation of the Company or the Bank, or disposition
of all or substantially all of the Company's or the Bank's assets.
AMENDMENT AND TERMINATION OF THE PLAN
The Board may amend or terminate the Option Plan from time to time in such
respects as the Board may deem advisable; provided that, to the extent necessary
to comply with Rule 16b-3 promulgated under Section 16 of the Exchange Act or
with Section 422 of the Internal Revenue Code (the "Code") (or any other
successor or applicable law or regulation), the Company shall obtain shareholder
approval of any Option Plan amendment in such a manner and to such a degree as
is required by the applicable law, rule or regulation. Any amendment or
termination of the Option Plan shall not affect awards already granted and such
awards shall remain in full force and effect as if the Option Plan had not
adversely been amended or terminated, unless mutually agreed otherwise between
the recipient and the Company, which agreement must be in writing and signed by
the recipient and the Company.
In any event, the Option Plan shall terminate in 1999. Any awards
outstanding under the Option Plan at the time of its termination shall remain
outstanding until they expire by their terms.
TAX INFORMATION
STOCK OPTIONS. Options granted under the Option Plan may be either
"incentive stock options," as defined in Section 422 of the Code, or
nonstatutory options.
INCENTIVE STOCK OPTIONS. An optionee who is granted an incentive stock
option will not recognize taxable income either at the time the option is
granted or upon its exercise, although the exercise may subject the optionee to
the alternative minimum tax. Upon the sale or exchange of the shares more than
two years after grant of the option and one year after exercising the option,
any gain or loss will be treated as long-term capital gain or loss. If these
holding periods are not satisfied, the optionee will recognize ordinary income
at the time of sale or exchange equal to the difference between the exercise
price and the lower of (i) the fair market value of the shares at the date of
the option exercise or (ii) the sale price of the shares. A different rule for
measuring ordinary income upon such a premature disposition may apply if the
optionee is also an officer, director, or 10% shareholder of the Company. The
Company will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income will be characterized as long-term or short-term capital gain or loss,
depending on the holding period.
26
<PAGE>
NONSTATUTORY STOCK OPTIONS. All other options that do not qualify as
incentive stock options are referred to as nonstatutory options. An optionee
will not recognize any taxable income at the time he or she is granted a
nonstatutory option. However, upon its exercise, the optionee will recognize
taxable income generally measured as the excess of the then fair market value of
the shares purchased over the purchase price. Any taxable income recognized in
connection with an option exercise by an optionee who is also an employee of the
Company will be subject to tax withholding by the Company. Upon resale of such
shares by the optionee, any difference between the sales price and the
optionee's purchase price, to the extent not recognized as taxable income as
described above, will be treated as long-term or short-term capital gain or
loss, depending on the holding period. The Company will be entitled to a tax
deduction in the same amount as the ordinary income recognized by the Optionee
with respect to shares acquired upon exercise of a nonstatutory option.
STOCK PURCHASE RIGHTS. Stock Purchase Rights will generally be taxed in the
same manner as nonstatutory options. However, restricted stock is usually
purchased upon exercise of a Stock Purchase Right. At the time of purchase,
restricted stock is subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code. As a result, the purchaser will not recognize
ordinary income at the time of purchase. Instead, the purchaser will recognize
ordinary income on the dates when the stock ceases to be subject to substantial
risk of forfeiture. The stock will generally cease to be subject to a
substantial risk of forfeiture when it is no longer subject to the Company's
right to repurchase the stock upon the purchaser's termination of employment
with the Company (i.e., as it "vests"). At such times, the purchaser will
recognize the ordinary income measured as the difference between the purchase
price and the fair market value of the stock on the date the stock is no longer
subject to a substantial risk of forfeiture. However, a purchaser may accelerate
to the date of purchase his or her recognition of ordinary income, if any, and
the beginning of any capital gain holding period by timely filing an election
pursuant to Section 83(b) of the Code. In such event, the ordinary income
recognized, if any, would be equal to the difference between the purchase price
and the fair market value of the stock on the date of purchase, and the capital
gain holding period would commence on the purchase date. The ordinary income
recognized by a purchaser who is an employee will be treated as wages and will
be subject to tax withholding by the Company out of the current compensation of
the purchaser. If such current compensation is insufficient to pay the
withholding tax, the purchaser will be required to make direct payment to the
Company for the tax liability. Generally, the Company will be entitled to a tax
deduction in the amount and at the time the purchaser recognizes ordinary
income.
Different rules may apply in the case of purchasers who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
STOCK BONUS AWARDS. A recipient who receives restricted stock pursuant to a
Stock Bonus Award will recognize ordinary income equal to the fair market value
of the stock at the time or times the restrictions lapse (unless a Code Section
83(b) election is timely filed at the time of grant). Different rules may apply
if the recipient is subject to Section 16(b) of the Exchange Act. Generally, the
Company will be entitled to a tax deduction in the amount and at the time the
recipient recognizes ordinary income.
The foregoing is only a summary of the effect of federal income taxation
upon the grantee and the Company with respect to the grant and exercise of
options, and with respect to the grant of Stock Purchase Rights and Stock Bonus
Awards, under the Option Plan. It does not purport to be complete, and does not
discuss the tax consequences of the optionee's death or the income tax laws of
any municipality, state or foreign country in which an optionee may reside.
VOTE REQUIRED
Approval of the amendments to the 1989 Stock Option Plan requires the
affirmative vote of a majority of the Votes Cast.
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PROPOSAL NO. 3
APPROVAL OF AN AMENDMENT TO THE COMPANY'S BYLAWS
TO PROVIDE FOR A BOARD OF DIRECTORS
CONSISTING OF EIGHT TO FIFTEEN DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE BYLAWS
PROPOSED AMENDMENT
Section 3.2 of the Bylaws of the company currently provides that the number
of members of the Board of Directors of the Company shall not be less than 10
nor more than 19. Effective January 1996, the Board of Directors, subject to
shareholder approval, authorized an amendment to the Bylaws to provide that the
number of directors of the Company shall be not less than eight nor more than 15
directors, with the exact number of directors initially set at 10. The exact
number of directors may be changed within such authorized range by a further
amendment to Section 3.2 adopted by either the Board of Directors (acting
without further shareholder approval) or by the shareholders. Accordingly, it is
proposed that Section 3.2 of the Bylaws be amended to read in its entirety
substantially as follows:
"Section 3.2 -- Number and Qualification of Directors.
The authorized number of directors of the Corporation shall not be
less than eight (8) nor more than fifteen (15) until changed by amendment
of the Articles of Incorporation or by a bylaw amending this Section 3.2
duly adopted by the vote or written consent of holders of a majority of
the outstanding shares entitled to vote, provided that a proposal to
reduce the authorized minimum number of directors below five cannot be
adopted. The exact number of directors shall be fixed from time to time,
within the limits specified in this Section 3.2: (i) by a resolution duly
adopted by the Board; (ii) by a Bylaw or amendment thereof duly adopted
by the vote of a majority of the outstanding shares entitled to vote; or
(iii) by approval of the shareholders (as defined in Section 153 of the
California General Corporation Law). No amendment may change the stated
maximum number of authorized directors to a number greater than two times
the stated minimum number of directors minus one.
Subject to the foregoing provisions for changing the number of
directors, the number of directors of this Corporation has been fixed at
ten (10)."
The Board determined to amend the Bylaws as set forth above in order that
the authorized range of directors for the Company matches the authorized range
for the Bank (which range has been from eight to 15 since the original Bylaws of
the Bank were adopted in 1983). The proposed change in the authorized range of
directors provides the Board of Directors of the Company the flexibility to
decrease the authorized number of directors to eight or nine, without
shareholder approval, in the event the Board of Directors deems it advisable
that the Board of Directors be comprised of less than 10 members in the future.
The Board of Directors is not permitted to decrease the number of authorized
directors if such decrease would have the effect of removing a director from
office prior to the expiration of his or her term.
VOTE REQUIRED
Approval of the proposed amendment to the Bylaws requires the affirmative
vote of the holders of a majority of the Company's Common Stock issued and
outstanding and entitled to vote. Accordingly, abstentions and broker non-votes
will have the same effect as a vote against the Bylaw amendment. In the event
the shareholders do not approve the amendment to the Bylaws, the authorized
range of directors shall remain at not less than 10 nor more than 19 members.
28
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PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP has been approved by the Audit Committee
and the Board of Directors of the Company to be its independent auditors for the
1996 fiscal year. KPMG Peat Marwick LLP has audited the Company's financial
statements since November 1994. KPMG Peat Marwick LLP has no interest, financial
or otherwise, in the Company or the Bank.
Representatives from the firm of KPMG Peat Marwick LLP will be present at
the Annual Meeting of Shareholders and afforded the opportunity to make a
statement if they desire to do so, and will be available to respond to
shareholders' questions.
The Company's financial statements for fiscal year 1993 were audited by
Deloitte & Touche LLP. On November 1, 1994, the Audit Committee of the Board of
Directors of the Company (i) dismissed the firm of Deloitte & Touche LLP as
independent auditors for the Company and its subsidiaries and (ii) retained the
firm of KPMG Peat Marwick LLP as independent auditors for the Company and its
subsidiaries for the fiscal year ending December 31, 1994. None of the reports
by Deloitte & Touche LLP on the financial statements of the Company for the
years in the two-year period ended December 31, 1993, and the subsequent interim
period, contain any adverse opinions or disclaimers of opinion nor are they
qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of the Company's financial statements for each of
the years in the two-year period ended December 31, 1993, and in the subsequent
interim period, there were no disagreements with Deloitte & Touche LLP on any
matters of accounting principles or practices, financial statement disclosure or
auditing scope and procedures, which, if not resolved to the satisfaction of
Deloitte & Touche LLP, would have caused Deloitte & Touche LLP to make reference
to the matter in their reports. At the Company's request, Deloitte & Touche LLP
provided a letter addressed to the Securities and Exchange Commission stating
that it agreed with the above statements.
SHAREHOLDER PROPOSALS -- 1997 ANNUAL MEETING
Shareholders are entitled to present proposals for action at a forthcoming
Annual Meeting of Shareholders if they comply with the requirements of
California corporate law, the proxy rules and the Company's Bylaws. Any
shareholder proposal intended to be presented at the 1997 Annual Meeting of
Shareholders of the Company must be received at the Company's Santa Clara office
on or before November 11, 1996 in order to be considered for possible inclusion
in the Company's Proxy Statement and form of proxy relating to such annual
meeting.
1995 ANNUAL REPORT
Enclosed is a copy of the Company's 1995 Annual Report to Shareholders,
including financial statements for the year ended December 31, 1995.
Shareholders who wish to obtain, without charge, a copy of the Company's Annual
Report on Form 10-K (without exhibits) for the year ended December 31, 1995 as
filed with the Securities and Exchange Commission should address a written
request to Shareholder Relations, Silicon Valley Bancshares, 3003 Tasman Drive,
Santa Clara, California 95054.
29
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters that
Management intends to present or has reason to believe others will present at
the Annual Meeting. If other matters properly come before the Annual Meeting,
those who act as Proxy Holders will vote in accordance with their best judgment.
THE BOARD OF DIRECTORS
A. Catherine Ngo
CORPORATE SECRETARY
Santa Clara, California
March 1, 1996
30
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SILICON VALLEY BANCSHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 18, 1996
The undersigned appoints JOHN C. DEAN and A. CATHERINE NGO, or either of
them, with full power of substitution for himself or herself, as the Proxy
Holder of the undersigned to vote and otherwise represent all of the shares
registered in the name of the undersigned at the Annual Meeting of Shareholders
of Silicon Valley Bancshares to be held on Thursday, April 18, 1996, at 4:00
p.m. at the RENAISSANCE MEETING CENTER AT TECHMART, SILICON VALLEY ROOM, 5201
GREAT AMERICA PARKWAY, SANTA CLARA, CALIFORNIA 95054 and any postponements or
adjournments thereof, with the same effect as if the undersigned were present
and voting such shares, on the following matters and in the following manner.
1. To elect directors to serve for the ensuing year and until their successors
are elected.
/ / FOR all nominees listed below, with the discretionary authority to cumulate
votes, except votes withheld
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME APPEARING IN THE LIST BELOW:
Gary K. Barr, James F. Burns, Jr., John C. Dean, David M. deWilde, Clarence J.
Ferrari, Jr., Henry M. Gay, Daniel J. Kelleher, James R. Porter, Michael Roster,
and Ann R. Wells
2. To ratify and approve an amendment to the
Silicon Valley Bancshares 1989 Stock Option Plan increasing the number of shares
reserved for issuance thereunder by 150,000 shares.
/ / FOR / / AGAINST / / ABSTAIN
3. To ratify and approve an amendment to Silicon Valley Bancshares' Bylaws
changing the permitted range of the number of directors to a range of eight to
15.
/ / FOR / / AGAINST / / ABSTAIN
4. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors.
/ / FOR / / AGAINST / / ABSTAIN
5. To vote or otherwise represent the shares on any other business that may
properly come before the meeting and any postponements or adjournments thereof,
according to the Proxy Holder's decision and in their discretion.
(CONTINUED ON OTHER SIDE)
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF NO SPECIFICATIONS ARE MADE, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE NOMINEES AND PROPOSALS, AND WITH
RESPECT TO SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING AND ANY
POSTPONEMENTS OR ADJOURNMENTS THEREOF, AS THE SAID PROXY HOLDERS DEEM ADVISABLE.
__________________________________
(Shareholder Signature)
__________________________________
(Name typed or printed)
Date signed______________________________________________________________, 199
I plan to attend the meeting.
/ / YES / / NO
Sign exactly as your name(s) appear(s) on your stock certificate. A corporation
is requested to sign its name by its President or other duly authorized officer,
with the office held designated. Executors, administrators, trustees, etc., are
requested to so indicate when signing. If stock is registered in two names,
both should sign.
SHAREHOLDERS SHOULD MARK, SIGN AND DATE THIS PROXY PROMPTLY AND RETURN IT IN THE
ENCLOSED ENVELOPE.
