SILICON VALLEY BANCSHARES, DEF 14A, 1997-03-20

SILICON VALLEY BANCSHARES
DEF 14A, 1997-03-20
STATE COMMERCIAL BANKS

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [_]

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)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] 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:

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(2) Aggregate number of securities to which transaction applies:

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(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):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] 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:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

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LOGO

SILICON VALLEY BANCSHARES

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, APRIL 17, 1997
4:00 P.M.

TO THE SHAREHOLDERS:

I am pleased to invite you to attend the 1997 Annual Meeting of Shareholders of
Silicon Valley Bancshares, which will be held at the Network Meeting Center at
Techmart, Silicon Valley Room, 5201 Great America Parkway, Santa Clara,
California 95054, on Thursday, April 17, 1997, 4:00 p.m., local time. The
purposes of the meeting are to:

1. Elect nine (9) Directors to serve for the ensuing year and until their
successors are elected.
2. Ratify and approve the Silicon Valley Bancshares 1997 Equity Incentive
Plan and options previously granted thereunder.
3. Ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors.
4. 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 20, 1997 will be entitled to vote at
the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

/s/DANIEL J. KELLEHER
- ---------------------
Daniel J. Kelleher
Chairman of the Board

Santa Clara, California
March 17, 1997

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 NINE (9) NOMINEES FOR DIRECTORS, FOR APPROVAL OF
THE SILICON VALLEY BANCSHARES 1997 EQUITY INCENTIVE PLAN, AND FOR
RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
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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................................................... 9
Return to Shareholders Performance Graph.................................. 13
Table 1--Summary Compensation............................................. 14
Table 2--Option Grants in Fiscal Year 1996................................ 15
Table 3--Aggregated Option Exercises in Fiscal Year 1996 and Fiscal Year-
End Option Values........................................................ 16
Termination Arrangements.................................................. 17
Board Committees and Meeting Attendance................................... 20
Director Compensation..................................................... 22
Security Ownership of Principal Shareholders.............................. 23
Section 16(a) Beneficial Ownership Reporting Compliance................... 24
Certain Relationships and Related Transactions............................ 24
Proposal No. 2--Approval of the 1997 Equity Incentive Plan*............... 25
Table 4--1997 Plan Benefits............................................... 27
Proposal No. 3--Ratification of Appointment of Independent Auditors*...... 31
Shareholder Proposals--1998 Annual Meeting................................ 31
1996 Annual Report........................................................ 31
Other Matters............................................................. 31
</TABLE>
- --------
* Denotes Items to be Voted on at the Meeting
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Mailed to shareholders on or about March 20, 1997

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

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 1997 Annual Meeting of
Shareholders of the Company to be held in the Silicon Valley Room at the
Network Meeting Center at Techmart, 5201 Great America Parkway, Santa Clara,
California 95054, on Thursday, April 17, 1997 at 4:00 p.m., local time and at
all postponements or adjournments thereof (the "Meeting"). Only shareholders
of record on February 20, 1997 (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 9,534,825 outstanding shares of
its no par value Common Stock (the "Common Stock") held by 665 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 of 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 by the later of the close
of business twenty-one (21) days prior to any meeting of shareholders called
for the election of directors, or ten (10) days after the date of mailing
notice of the meeting to shareholders. Such notification shall contain the
following information to the extent known to the notifying shareholder: (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

1
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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 the presence or
absence of a quorum for the transaction of business , but should not be
counted as Votes Cast with respect to a proposal, since the shareholder has
expressly declined to vote on such proposal. In the absence of controlling
precedent to the contrary, the Company intends to treat abstentions in this
manner.

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.

Accordingly, abstentions and broker non-votes will not affect the outcome of
the voting on a proposal that requires a majority of the Votes Cast (such as
the approval of the 1997 Equity Incentive Plan). However, with respect to a
proposal that requires a majority of the outstanding shares, an abstention or
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 or to the Company's transfer agent. Such Proxy is also
automatically 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 Company's 1997 Equity Incentive Plan, "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
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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 eight (8) to
fifteen (15) directors and permit the exact number to be fixed by the Board.
Effective as of April 17, 1997, the Board has fixed the exact number of
directors at nine (9).

NOMINEES FOR DIRECTOR

All Proxies will be voted "FOR" the election of the following nine (9)
nominees recommended by the Board of Directors, all of whom are currently
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. All incumbent directors are nominees for re-
election to the Board, except Henry M. Gay. Mr. Gay has resigned from the
Board of Directors, effective as of April 17, 1997. Mr. Gay will continue to
serve as an advisory (non-voting) member of the Board of Directors. 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>
PRINCIPAL OCCUPATION OR
NAME OF DIRECTOR AGE (1) EMPLOYMENT
---------------- --- --- -----------------------
OTHER BUSINESS AFFILIATIONS AND DIRECTOR
NOMINEE (2) PUBLIC COMPANY DIRECTORSHIPS SINCE
------- --- ------------------------------- --------
<C> <C> <C> <S> <C>
Gary K. Barr 52 (1) President and Chief Executive 1982
Officer, Pacific Coast Capital (a
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. 59 (1) Trustee of CBR Liquidating Trust 1994
as of October 1996, and formerly,
Executive Vice President and
Chief Financial Officer, CBR
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 49 (1) President and Chief Executive 1993
Officer of the Company and the
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 56 (1) Founder and Managing Director, 1995
Chartwell Partners International,
Inc. (an executive search firm)
since 1989.
(2) Director, Berkshire Realty
Company, Inc. (a real estate
investment trust), Boston,
Massachusetts since 1993.
Clarence J. Ferrari, Jr., 62 (1) Founder and Principal, Ferrari, 1983
Esq. Olsen, Ottoboni & Bebb
(Attorneys-at-Law), San Jose,
California since 1981.
</TABLE>

3
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VOTE REQUIRED

The nine (9) nominees for director 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.

- --------
(1) Chair of the Company Board and the Bank Board.
(2) Vice-Chair of the Company Board and the Bank Board.

4
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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............................ 41,000(a) 0.43%
James F. Burns, Jr...................... 10,500(a) 0.11%
John C. Dean*........................... 196,878(b),(j) 2.05%
David M. deWilde........................ 11,783(a) 0.12%
Clarence J. Ferrari, Jr., Esq........... 75,310(c) 0.79%
Henry M. Gay............................ 20,451 0.21%
Daniel J. Kelleher...................... 97,881(d) 1.03%
James R. Porter......................... 9,875(a) 0.10%
Michael Roster, Esq..................... 11,000(e) 0.12%
Ann R. Wells............................ 94,430(d) 0.99%
EXECUTIVE OFFICERS**
John C. Dean............................ (See listing above under "Directors")
James F. Forrester...................... 54,525(f),(k) 0.57%
Barbara B. Kamm......................... 22,218(g),(l) 0.23%
Harry W. Kellogg, Jr.................... 52,349(h),(m) 0.55%
Kenneth P. Wilcox....................... 32,591(i),(n) 0.34%
All current directors and executive
officers as a group (20 persons)....... 849,359*** 8.66%
</TABLE>
- --------
Share numbers shown in the table include (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 retirement plans:

<TABLE>
<S> <C> <C> <C>
(1) (2)
(a) 3,000 shares (j) 47,793 shares
(b) 75,000 shares (k) 10,321 shares
(c) 4,817 shares (l) 4,819 shares
(d) 12,193 shares (m) 10,307 shares
(e) 1,500 shares (n) 6,763 shares
(f) 13,525 shares
(g) 13,120 shares
(h) 20,100 shares
(i) 22,060 shares
</TABLE>

* Share ownership shown does not include 8,500 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.
** Ownership shown includes dispositive share equivalents beneficially owned
by executive officers under the Company's employee retirement plans. Actual
voting shares will be slightly less due to cash liquidity in such
retirement plans. The difference between dispositive share equivalents and
actual voting shares is not deemed material.
*** Includes (i) 275,140 shares subject to options where the options are
exercisable within 60 days after the Record Date and (ii) 97,000 shares
held for the benefit of current executive officers under the Company's
employee retirement plans.

5
<PAGE>

INFORMATION ON EXECUTIVE OFFICERS

The positions and ages as of the Record Date of the executive officers of
the Company are as set forth below. There are no family relationships among
directors or executive officers of the Company.

<TABLE>
<CAPTION>
EMPLOYEE
NAME AND POSITION AGE BUSINESS EXPERIENCE SINCE
----------------- --- ------------------- --------
<C> <C> <S> <C>
JOHN C. DEAN 49 Prior to joining the Company and 1993
President, Chief Executive the Bank in May 1993, Mr. Dean
Officer and Director of the served as President and Chief
Company and the Bank Executive Officer of Pacific
First Bank, a $6.5 billion
federal savings 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.
L. BLAKE BALDWIN 45 Mr. Baldwin joined the Bank in 1988
Executive Vice President July 1988 as Vice President of
and Manager of the Bank's the Bank's real estate division.
Special Industries Group Mr. Baldwin was promoted to
Senior Vice President and
Division Manager of the Real
Estate Group in December 1992. In
March 1996, Mr. Baldwin was
appointed Executive Vice
President and Manager of the
Bank's Special Industries Group.
A. JOHN BUSCH 42 Mr. Busch joined the Bank in 1993
Executive Vice President August 1993 as Executive Vice
and Chief Credit Officer of President, General Counsel and
the Bank Chief Credit Officer. Prior to
joining the Bank, Mr. Busch
served as Executive Vice
President and Chief Lending and
Credit Officer at First National
Bank in San Diego, California
from January 1992 until 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 53 Mr. Forrester joined the Bank in 1987
Executive Vice President 1987 as Senior Vice President of
and Manager of the Bank's Operations and Administration. In
Strategic Financial 1990, Mr. Forrester founded the
Services Group Bank's Southern California office
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.
BARBARA B. KAMM 45 Ms. Kamm joined the Bank in 1991
Executive Vice President January 1991 as Vice President
and Chief Administrative and Senior Loan Officer of the
Officer of the Company and Bank's Southern California
the Bank Technology Group. Prior to being
appointed Executive Vice
President and Chief
Administrative Officer in
September 1996, Ms. Kamm served
as Senior Vice President and
Manager of the Bank's Southern
California Group from August 1993
through September 1996 (having
been promoted to Executive Vice
President in November 1995).
</TABLE>

6
<PAGE>

<TABLE>
<CAPTION>
EMPLOYEE
NAME AND POSITION AGE BUSINESS EXPERIENCE SINCE
----------------- --- ------------------- --------
<C> <C> <S> <C>
HARRY W. KELLOGG, JR. 53 Mr. Kellogg joined the Bank in 1986
Executive Vice President October 1986 as Senior Vice
and Manager of the Bank's President of the Bank's
Strategic Marketing Group Technology Division. Mr. Kellogg
served as Executive Vice
President and Chief Marketing
Officer from September 1993 to
April 1994 (when he left the Bank
for ten months, during which
time, he served as Executive Vice
President for the Emerging Growth
Industries Division of Cupertino
National Bank). Mr. Kellogg
returned to the Bank in February
1995 as Executive Vice President
and Chief Marketing Officer.
RITA M. PIRKL 37 Ms. Pirkl joined the Bank in 1994
Executive Vice President September 1994 as Vice President
and Manager of the Bank's and Loan Officer of the Bank's
Southern California Southern California Group. Ms.
Technology Group Pirkl was appointed Executive
Vice President and Manager of the
Bank's Southern California
Technology Group in September
1996. Prior to joining the Bank,
Ms. Pirkl served as Director of
Corporate Operations and Chief
Operating Officer for NHMC
Funding Corp. from 1993 to 1994.
From 1981 to 1993, Ms. Pirkl held
increasingly responsible
positions within the Corporate
Banking Divisions of U.S. Bancorp
and Homefed Bank.
SCOTT H. RAY 32 Mr. Ray joined the Bank in 1994
Executive Vice President September 1994 as Vice President
and Chief Financial Officer and Manager of the Treasury
of the Company and the Bank Division. Mr. Ray was appointed
Executive Vice President and
Chief Financial Officer in
September 1996. Prior to joining
the Bank, Mr. Ray served as a
Senior Manager in the Financial
Advisory Services Group of
Coopers & Lybrand LLP from 1993
to 1994. From 1987 to 1993, Mr.
Ray held increasingly responsible
positions with both Coopers &
Lybrand LLP and Price Waterhouse
LLP.
GLEN G. SIMMONS 55 Mr. Simmons joined the Bank in 1993
Executive Vice President July 1993 as Executive Vice
and Manager of the Bank's President of Human Resources and
Human Resources and Administration. Prior to joining
Administration Group the Bank, Mr. Simmons served as
Senior Vice 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 with First Interstate
Bank of Washington.
MARC J. VERISSIMO 41 Mr. Verissimo joined the Bank in 1993
Executive Vice President May 1993 as Vice President and
and Manager of the Bank's was promoted in October 1993 to
Northern California Senior Vice President and Manager
Technology Group of the Bank's Northern California
Technology Group. In March 1996,
Mr. Verissimo was appointed
Executive Vice President and
Manager of the Bank's Northern
California Technology Group.
Prior to joining the Bank, Mr.
Verissimo served as Regional Vice
President for Comerica Bank from
1991 to 1993.
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
EMPLOYEE
NAME AND POSITION AGE BUSINESS EXPERIENCE SINCE
----------------- --- ------------------- --------
<C> <C> <S> <C>
KENNETH P. WILCOX 48 Mr. Wilcox joined the Bank in 1990
Executive Vice President April 1990, as Regional Vice
and Manager of the Bank's President of the Bank's East
East Coast Technology Group Coast Technology Group. Prior to
becoming Executive Vice President
and Manager of the East Coast
Technology Group in November
1995, Mr. Wilcox held
increasingly responsible
positions with the Bank (having
served as Manager of the East
Coast Technology Group since June
1993).
</TABLE>

8
<PAGE>

REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE OF THE BOARD
ON EXECUTIVE COMPENSATION

The Report of the Personnel and Compensation Committee (the "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 composed
of Ms. Wells, Chair, and Messrs. Barr, deWilde, Roster, and Gay. However, a
separate sub-committee (of the Stock Committee) (the Option Sub-Committee)
makes grants of stock options to executive officers. The current members of
the Option Sub-Committee are Mr. deWilde, Chair, and Messrs. Barr, Roster and
Gay. During 1996, the Board of Directors did not modify or reject in any
material way any action or recommendation by the Committee (or the Option Sub-
Committee).

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 those 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 100th percentile range (subject to the
Company's financial performance being in the top quartile of the
Company's competitive group).

. The Committee strives to reward performance that creates value for
the Company's shareholders.

.TIE INCENTIVE COMPENSATION TO COMPANY FINANCIAL PERFORMANCE

. The Company adopted a new incentive compensation program in 1996.
Under the new program, incentive compensation is based on a
financial measure called Economic Value Added(R), or EVA(R). EVA(R)
is a measure of true economic profit, after recognizing the cost of
capital employed to achieve that profit. Under the EVA(R)-based
incentive plan, sustained, continuous improvement in the Company's
financial performance is rewarded, with annual incentive amounts
being tied to improvement in the Company's performance from the
prior year to the then-current year.

. The EVA(R) plan's objectives are to:

. Focus on creating shareholder value. Tying incentive compensation
to EVA(R) provides a direct link between incentives paid and the
shareholder value created.

. Focus on sustained, continuous improvement in financial
performance. Incremental shareholder value created (or destroyed)
is the key factor in determining incentive amounts. Incremental
shareholder value is calculated by subtracting the expected
change in EVA(R) (as set by the Company in advance, with the
assistance of the Company's outside consultant) from the actual
change in EVA(R).

9
<PAGE>

. Calculation of annual incentive amounts involves adding:

. (1) a "target" incentive amount tied to officer level in the
Company and performance rating (based on attainment of goals set
at the beginning of the year), plus,

. (2) a share of the incremental shareholder value created (with a
reduction in shareholder value resulting in a pre-determined
portion thereof being subtracted from the "target" incentive
amount to derive the final incentive amount).

. The EVA(R) results used to calculate an officer's incentive
compensation depend on the particular division to which the officer
belongs.

. For lending division officers, such as James F. Forrester, Harry
W. Kellogg, Jr. and Kenneth P. Wilcox, 50% of the incentive is
based on the Company's consolidated results and 50% is based on
their respective divisions' results.

. For support division officers, such as Barbara B. Kamm, 50% of
the incentive is based on the Company's consolidated results and
50% is based on the sum of all the line divisions' results.

. A certain portion of incentive payments may be paid into a reserve
(with such reserve amounts being based on a pre-established
formula). This feature of the EVA(R) program results in the
Company's and the Bank's officers being focused on long-term
performance (since payouts from the reserve will depend upon future
Company and individual performance) and provides for payouts in
years in which the Company's financial performance might not
otherwise result in incentive payouts.

1996 MARKET SURVEY

.EXECUTIVE OFFICERS

. A review of the Company's executive compensation was completed by an
independent compensation consultant in October 1996. In reviewing
the 1996 compensation programs (including 1996 base salary and
"target" bonus for 1996 performance), the compensation consultant
reviewed market data (based on surveys published in 1995) for banks
with $800 million to $6 billion in assets. Specific Bank officers
were "matched" as closely as possible with competitive group members
with similar functional responsibilities. The compensation
consultant concluded that the Bank's executive officers' total
compensation ranked between the median and 75th percentile range.

.CHIEF EXECUTIVE OFFICER

. In January 1996, the Company engaged an independent compensation
consultant to review the chief executive officer's compensation
package. In reviewing Mr. Dean's 1996 compensation package, the
compensation consultant reviewed market data (based on surveys
published in 1995) for the Bank's competitive group. The Bank's
competitive group included banks with $800 million to $6 billion in
assets. The compensation consultant concluded that Mr. Dean's 1996
base salary was below the 25th percentile level of base salaries
paid to chief executive officers in the Bank's competitive group.
Further, Mr. Dean's aggregated 1996 base salary and bonus (cash and
stock, and specifically, including Mr. Dean's 1996 bonus tied to
1995 performance) ranked at about the 50th percentile level of
aggregated base salaries and bonuses in the competitive group. The
computation of Mr. Dean's bonus took into account the value of long-
term stock-based incentives granted to Mr. Dean when he joined the
Bank in 1993 (with such valuation having been made using the Black-
Scholes option pricing model, as well as the compensation
consultant's standard model). Following review of this market
analysis in January 1996, the committee (with Board concurrence)
approved a salary increase to $325,004 (from $254,200) for Mr. Dean.

10
<PAGE>

. The October 1996 review of executive compensation completed by
the independent compensation consultant (described above)
reflected that Mr. Dean's base salary of $325,004 was 21% below
the 50th percentile level of base salaries paid to chief
executive officers in the Bank's competitive group. Further, Mr.
Dean's aggregated 1996 base salary and "target" bonus for 1996
performance was 13% below the 50th percentile level of aggregated
base salaries and bonuses in the competitive group.

INCENTIVE COMPENSATION PAID BASED ON 1996 COMPANY PERFORMANCE

.ACTUAL INCENTIVE COMPENSATION PAYMENTS

. Executive Officers. In setting bonuses for executive officers,
the Committee reviewed the Company's consolidated EVA(R) results,
as well as the applicable line division results. Following
determination of the EVA(R) incentive amount (tied to performance
rating and actual EVA(R) results), the Committee allocated
additional discretionary funds, in determining final incentive
amounts. (Such funds were paid out of a discretionary pool pre-
approved by the Board early in 1996 and tied to actual EVA(R)
performance.) The Committee determined discretionary amounts
based on significance of contributions to the Company in 1996
beyond those goals set earlier in the year for the respective
executive officers.

. Chief Executive Officer. Mr. Dean's 1996 incentive compensation
payment (excluding the additional bonus award described below)
depended on the Company's consolidated EVA(R) results. The
Committee assigned Mr. Dean the highest-possible numerical
rating, or a "distinguished performance" rating, for 1996
performance. Applying the EVA(R) formula (based on the Company's
consolidated EVA(R) results) and taking into account Mr. Dean's
performance rating, Mr. Dean would have received a bonus in the
amount of $211,250. However, upon the Committee's recommendation,
the Board approved allocating an additional $163,874 bonus amount
to Mr. Dean, resulting in a final bonus amount of $375,124.
$57,000 of this final amount was funded into the EVA(R) reserve.

In determining Mr. Dean's final bonus amount of $375,124, the
Board considered the market data (described above) for the
Bank's competitive group. This market data reflected that with
the additional bonus award, and further, taking into account the
restricted stock grant made to Mr. Dean earlier in 1996, Mr.
Dean's total compensation package (base salary plus bonus) was
at the 95th percentile level. The Board determined that payment
of compensation to Mr. Dean in 1996 at this percentile level was
consistent with the Committee's key principles in setting
compensation, that is, paying in this percentile range for
outstanding financial performance.

.EMPLOYEE STOCK OWNERSHIP PLAN

. The Company also made payments to employees under its employee
retirement plans, including to executive officers. See discussion
in "Retirement Plans" below regarding payments to executives
under the Company's qualified defined contribution plans.

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 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. The only
executive officer who

11
<PAGE>

received compensation (as defined in section 162(m)) in excess of $1 million
during 1996 was John Dean, largely as a result of the vesting of 50,000 shares
of the Company's Common Stock (granted when Mr. Dean joined the Bank in 1993).
A total of $570,000 of compensation paid to Mr. Dean was not deductible to the
Company for tax purposes in 1996. See discussion in "Dean Employment
Agreement" below for more detail on this stock grant. The Committee does not
expect that any executive officer, including Mr. Dean, will receive
compensation in excess of $1 million during 1997. The Committee adopted
limitations on the number of shares that may be subject to awards granted
under the 1989 Stock Option Plan and the 1997 Equity Incentive Plan during any
one calendar year to an individual so that compensation derived from stock
options granted under such plans would qualify as "performance-based"
compensation within the meaning of Section 162(m) and would therefore be
deductible by the Company (subject to shareholder approval of the plan, in the
case of the 1997 Equity Incentive Plan).

PERSONNEL AND COMPENSATION COMMITTEE

ANN R. WELLS, CHAIR
GARY K. BARR
DAVID M. DEWILDE
HENRY M. GAY (UNTIL APRIL 17, 1997)
MICHAEL ROSTER

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1996, 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.
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 holds the position of Chief Executive Officer of Ann Wells
Personnel Services, Inc., which provided temporary employment and recruiting
services to the Bank in 1996 and is expected to perform such services in 1997.
Also, Daniel J. Kelleher, a director of the Company, holds a forty-nine (49)
percent interest in Ann Wells Personnel Services, Inc. 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.

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. The largest
principal amount outstanding during 1996 on these loans was $266,670, all of
which was repaid prior to fiscal year-end.

12
<PAGE>

RETURN TO SHAREHOLDERS PERFORMANCE GRAPH

The following graph compares, for the period from December 31, 1991 through
December 31, 1996, 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-US index,
and (iii) the cumulative total return of the Nasdaq Banks 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 STOCK MARKET-US
AND NASDAQ BANKS

PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period SILICON VALLEY NASDAQ STOCK NASDAQ
(Fiscal Year Covered) BANCSHARES S&P 500 MARKETS-U.S. BANKS
- ------------------- -------------- ------- ------------ ------
<S> <C> <C> <C> <C>
Measurement Pt-12/31/91 $100.00 $100.00 $100.00 $100.00
FYE 12/31/92 $ 63.16 $107.62 $116.38 $145.55
FYE 12/31/93 $ 77.52 $118.46 $133.59 $165.99
FYE 12/31/94 $103.35 $120.03 $130.59 $165.38
FYE 12/31/95 $183.74 $165.14 $184.67 $246.32
FYE 12/31/96 $246.90 $203.06 $227.16 $325.60
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Silicon Valley Bancshares 100.00 63.16 77.52 103.35 183.74 246.90
S&P 500 100.00 107.62 118.46 120.03 165.14 203.06
Nasdaq Stock Market--US 100.00 116.38 133.59 130.59 184.67 227.16
Nasdaq Banks 100.00 145.55 165.99 165.38 246.32 325.60
</TABLE>

13
<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 four other most highly compensated executive officers of the
Company and of the Bank ("Named Officers") (based on salary plus bonus for
1996):

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------ ------------------------------------------
AWARDS PAYOUTS
---------------------- -------------------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND PRINCIPAL SALARY/(1)/ BONUS SATION/(2)/ AWARDS/(3)/ SARS/(4)/ PAYOUTS SATION/(5)/
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
------------------ ---- ----------- -------- ----------- ----------- ---------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JOHN C. DEAN 1996 $325,004 $375,124/(6)/ $ -- $107,500 -- -- $23,080
President and Chief
Executive 1995 $254,200 $152,321 $ -- $ -- -- -- $23,500
Officer 1994 $250,525 $123,681 $ -- $ -- -- -- $19,998
JAMES F. FORRESTER 1996 $185,000 $150,000/(6)/ $ -- $ -- -- -- $23,080
Executive Vice President
and 1995 $160,000 $ 75,703 $ -- $ -- 21,500 -- $23,500
Manager of the Strategic 1994 $145,675 $ 73,238 $ -- $ -- 15,000 -- $19,998
Financial Services Group
BARBARA B. KAMM 1996 $145,937 $110,000/(6)/ $43,869 $ -- 25,000 -- $21,225
Executive Vice President
and 1995 $127,250 $ 62,787 $ -- $ -- 21,000 -- $20,088
Chief Administrative
Officer 1994 $117,875 $ 44,300 $ -- $ -- 4,000 -- $16,394
HARRY W. KELLOGG,
JR.(/7/) 1996 $163,125 $125,275/(6)/ $ -- $ -- -- -- $23,080
Executive Vice President
and 1995 $126,888 $ 65,211 $ -- $ -- 30,000 -- $20,033
Manager of the Strategic 1994 $ 52,912 $ -- $ -- $ -- -- -- $ 2,803
Marketing Group
KENNETH P. WILCOX 1996 $135,000 $110,000/(6)/ $ -- $ -- -- -- $19,600
Executive Vice President
and 1995 $125,417 $ 53,697 $ -- $ -- 12,000 -- $19,813
Manager of the East
Coast 1994 $120,000 $ 48,300 $ -- $ -- 4,000 -- $16,198
Technology Group
</TABLE>
- --------
/(1)/ Includes amounts deferred at the election of the executive officer.
/(2)/ Amounts in this column represent (a) relocation costs incurred by the
executive officer and reimbursed by the Bank, as well as (b) premiums for
supplemental long-term disability coverage provided 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. Amount reflected for Ms. Kamm includes
relocation costs in the amount of $42,532 and premiums in the amount of
$1,337.
/(3)/ As of December 31, 1996, Mr. Dean held 5,000 restricted shares of the
Company's Common Stock (granted on January 18, 1996), with a market value
of $161,250. Market value is based on the $32.25 per share closing market
price of the Company's Common Stock on the National Association of
Securities Dealers Automated Quotation/National Market on December 31,
1996, the last trading day of 1996. Holders of restricted stock have
rights equivalent to those of other shareholders, including voting rights
and rights to dividends. All of Mr. Dean's shares will vest on January
17, 2000.
/(4)/ The numbers in this column reflect shares of Common Stock underlying
options. No Stock Appreciation Rights ("SARs") were awarded during the
years 1994 through 1996 .
/(5)/ Amounts in this column represent employer contributions to the Bank's
combined 401(k) and Employee Stock Ownership Plan, and Money Purchase
Pension Plan (see discussion under "Retirement Plans").
/(6)/ Under the Bank's EVA(R) Program (see discussion under "Report of the
Personnel & Compensation Committee of the Board on Executive
Compensation"), a portion of the executive officers' 1996 bonuses were
deferred. Amounts deferred for executive officers Dean, Forrester, Kamm,
Kellogg, and Wilcox were $57,000, $40,600, $23,022, $33,205, and $27,133,
respectively. Additionally, deferred 1995 bonus amounts (20% of the
respective executive officers' 1995 bonuses) were paid in February 1997.
These deferred amounts are included in the 1995 bonus amounts.
/(7)/ Mr. Kellogg left the Bank in April 1994, but returned in February 1995.

14
<PAGE>

TABLE 2--OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning the grant of options
to purchase the Company's Common Stock to the Named Officers during 1996:

INDIVIDUAL GRANTS IN 1996 /(1)/

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED
SECURITIES TOTAL OPTIONS ANNUAL RATES OF STOCK
UNDERLYING /SARS EXERCISE PRICE APPRECIATION
OPTIONS/ GRANTED TO OR BASE FOR OPTION TERM/(4)/
SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED (#)/(2)/ FISCAL YEAR /(3)/ ($/SHARE) DATE 5% ($) 10% ($)
- ---- ---------------- ----------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
John C. Dean -- -- -- -- -- --
James F. Forrester -- -- -- -- -- --
Barbara B. Kamm 25,000 58.82% $26.13 09/19/2001 $180,481 $398,816
Harry W. Kellogg, Jr. -- -- -- -- -- --
Kenneth P. Wilcox -- -- -- -- -- --
</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 (or
sub-committee thereof) (to which Committee the Board has delegated
authority to administer the Plan) (the "Administrator"). The Administrator
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)/ Represents grant made in September 1996 in connection with Ms. Kamm's
promotion to Chief Administrative Officer. No other Named Officer received
options in 1996, since in 1995, such Named Officers received both allotted
options for 1995, as well as options that otherwise would have been
granted in 1996. See "Proposal No. 2--Approval of the Silicon Valley
Bancshares 1997 Equity Incentive Plan" for information on option grants
made to the Named Officers in January 1997 under the 1997 Equity Incentive
Plan (subject to approval thereof by the Company's shareholders). These
January 1997 grants constitute both allotted options for 1997, as well as
options that otherwise would be granted in 1998. Accordingly, the Company
does not expect to grant future options to the Named Officers until
January 1999.
/(3)/ Based on options to purchase an aggregate of 42,500 shares of Common Stock
granted to all employees during 1996.
/(4)/ 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.

15
<PAGE>

TABLE 3--AGGREGATED OPTION / SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION / SAR VALUES /(1)/

The following table sets forth information concerning the exercise of
options during 1996 and the options held at 1996 fiscal year-end by Named
Officers:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS SARS IN-THE-MONEY OPTIONS/SARS
ON VALUE AT FISCAL 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 -- -- 75,000 25,000 $1,748,250 $582,750
James F. Forrester 25,682 $370,720 12,678 19,140 $ 247,430 $374,949
Barbara B. Kamm -- -- 4,720 45,280 $ 97,936 $500,014
Harry W. Kellogg, Jr. -- -- 10,200 19,800 $ 184,824 $358,776
Kenneth P. Wilcox 5,303 $ 60,740 16,720 11,280 $ 375,376 $200,764
</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 1996 fiscal
year-end, based on the $32.25 per share closing market price of the
Company's Common Stock on the National Association of Securities Dealers
Automated Quotation/ National Market on December 31, 1996, less the
exercise price.

RETIREMENT PLANS

The Bank has two defined contribution plans: (1) the Silicon Valley Bank
401(k) and Employee Stock Ownership Plan (the "401(k)" and "ESOP") (a
qualified profit sharing plan under the Internal Revenue Code [the "IRC"]) and
(2) the Silicon Valley Bank Money Purchase Pension Plan (the "MPP") (a
qualified money purchase pension plan under the IRC). The Company matches 100%
of employee-deferred salary contributions to the 401(k), up to a maximum
contribution of $1,000 per year per employee. The Company makes contributions
to the ESOP and MPP using a compensation-based formula (subject to certain
limitations on compensation under the IRC). ESOP contributions are
discretionary based on the profitability of the Company, are invested
primarily in the Company's Common Stock and may not exceed 10% of eligible
employees' base compensation. In 1996, the ESOP contribution was 9.72% of
eligible compensation as a result of the Company's nearly attaining its
stretch performance goal. MPP contributions are guaranteed at 5% of eligible
compensation and are invested at the participant's direction. Prior to 1995,
these guaranteed contributions were made to the ESOP and invested primarily in
Company Common Stock; however, in 1996, the MPP was established retroactive to
January 1, 1995 for the guaranteed contributions and, in May 1996, the
investments (under the MPP) formerly in Company Common Stock became
participant-directed. The assets of both retirement plans are held in trust
for the exclusive benefit of the employee-participants.

16
<PAGE>

TERMINATION ARRANGEMENTS

The Bank entered into Termination Agreements ("Termination Agreements") with
Named Officers Dean, Forrester, Kamm, Kellogg, and Wilcox and with other
executive officers in 1996. These Termination Agreements renewed (with some
modifications) other agreements then in effect (which otherwise would have
expired in 1996). The Termination Agreements provide for severance pay and
continuation of certain benefits if the executive's employment is terminated
following a "Change in Control" (defined below). The Termination Agreements
were approved by disinterested members of the Boards of Directors of the
Company and the Bank during 1996.

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 be terminated involuntarily without cause or
constructively terminated within 24 months following the Change in Control.
Also, benefits will be given to executives only following a Change in Control
that involves payments to shareholders in excess of then book value of the
Company.

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 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 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, cease to make up at least 60% of the directors of the Company;

(3) a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation in which the shareholders of the Company
immediately prior thereto continue to own more than 50% 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 15% reduction in the executive's annual compensation (base salary
plus bonus), a material reduction in the executive's responsibilities, 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 24 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 (the "Severance
Benefit") (represented as a multiple of the executive's annual compensation
[base salary plus bonus]) increases. The multiples of annual compensation (for
respective sales percentages received in excess of book value) for the Bank's
Executive Committee members (executive officers Dean, Forrester, Kamm, and
Kellogg) are higher than for non-Executive Committee executives (such as Mr.
Wilcox). Further, the percentage payout of the Severance Benefit is on a
sliding scale tied to termination date. If the termination date is within 12
months following the Change in Control, then 100% of the Severance Benefit
will be paid. However, between 12 months and 24 months following a Change in
Control, a declining percentage will be paid, with 75% of the Severance
Benefit being payable for terminations 15 months following a Change in Control
and 0% being payable for terminations 24 months following a Change in Control.
Finally, upon a Change in Control, all outstanding options (representing
interests in the Company's Common Stock) will become immediately and fully
vested (and may be exercised) and all restrictions upon any restricted Company
stock will lapse immediately and all such shares will become fully vested.

17
<PAGE>

In linking the amount of termination payments within 24 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.

The severance program approved by the Boards of the Company and the Bank
includes non-executive Bank officers as well. 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
financial and other companies. Also, the Company engaged a third-party
compensation consultant to review the Company's proposed program, in light of
the typical practices of other banks and non-banking corporations. It was the
compensation consultant's view (as presented to the Boards) that the proposed
program is 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. Specifically, the compensation firm noted specific areas where
shareholders' interests were better-served (as compared with other severance
programs reviewed by the firm), including in regard to: 1) the definition of
"Change in Control" (which is more difficult to trigger), 2) the definition of
"constructive termination" (which is narrower than typically defined); and 3)
the reduction in benefits for involuntary or constructive termination during
such period 12-24 months following a Change in Control.

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 280(g) and/or Section 4999 of the
Internal Revenue Code, the payments will be reduced to the largest amount that
the employee determines would result in maximizing the employee's net proceeds
(after taking into account the payment of any applicable taxes, including
excise taxes).

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 vested. 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 above-described
terms in Mr. Dean's employment agreement, most key provisions of Mr. Dean's
employment agreement have been superseded.

18
<PAGE>

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 entered into a consulting agreement, effective April 1, 1995,
pursuant to which Mr. Woodward continued to serve as a consultant to the Bank
until October 1996. Under the consulting agreement, the Bank paid 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 continued 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 each of January 5, 1996 and January 5, 1997 (on
account of Mr. Woodward's non-competition with the Bank through and including
such respective dates), and which will vest as to the final 1/3 of such number
of shares on January 5, 1998, contingent upon Mr. Woodward's continued non-
competition with the Bank through and including such final 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, 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 entered
into a Consulting Agreement, pursuant to which Mr. Uyemura was 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 was paid $6,667 per month.

- --------
/(1)/ As reported in the Company's 1995 and 1996 Proxy Statements, 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.

19
<PAGE>

BOARD COMMITTEES AND MEETING ATTENDANCE

The Company and the Bank have Audit, Loan, Executive, Finance, Personnel and
Compensation/Stock Committees of their respective Boards of Directors. Members
as of the Record Date were as follows:

AUDIT LOAN EXECUTIVE
Clarence J. Ferrari, Gary K. Barr, Chair Daniel J. Kelleher,
Jr., Chair John C. Dean (alternate Chair
James F. Burns, Jr. member) James F. Burns, Jr.
Henry M. Gay David M. deWilde John C. Dean
James R. Porter Daniel J. Kelleher Michael Roster

Ann R. Wells
FINANCE

James F. Burns, Jr., PERSONNEL AND
Chair COMPENSATION/STOCK
John C. Dean Ann R. Wells, Chair
Clarence J. Ferrari, Jr. Gary K. Barr
James R. Porter David M. deWilde
Henry M. Gay
Michael Roster

AUDIT COMMITTEE (JOINT COMPANY/BANK COMMITTEE) 11 meetings in fiscal year
1996

. 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 and the Bank's
internal audit relationship; and

. Oversees management's efforts in ensuring that the Company is complying
with accounting standards and with federal and state banking laws.

LOAN COMMITTEE (BANK COMMITTEE) 64 meetings in fiscal year
1996

. 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;

. Has lending authority and establishes lending authority levels for Bank
committees and respective officer levels in the Bank;

. Reviews the Bank's community delineations to ensure that they meet the
purposes of the Community Reinvestment Act; and

. Works with management in monitoring the loan portfolio, including reviewing
proposed corrective action plans when pre-determined portfolio credit
quality levels are reached.

20
<PAGE>

EXECUTIVE COMMITTEE (SEPARATE COMPANY/BANK 5 meetings (Company
COMMITTEES) Executive Committee) in
fiscal year 1996
5 meetings (Bank Executive
Committee) in fiscal year
1996
. 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

. 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
1996
. Oversees the Bank's investment and funds management policies, which include
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 (BANK 10 meetings in fiscal year
COMMITTEE) 1996

. 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) (INCLUDING 8 meetings in fiscal year
OPTION SUB-COMMITTEE) 1996

. 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 1996 (ended December 31, 1996), the Company Board of
Directors met 8 times: 7 regular meetings and 1 special meeting. During fiscal
year 1996 (ended December 31, 1996), the Bank Board of Directors met 12 times:
12 regular meetings and no special meetings. All Company directors attended at
least 75% of the aggregate of all Company Board meetings and meetings held by
Committees of the Company's Board of which they were members.

21
<PAGE>

DIRECTOR COMPENSATION

Each outside director may select one of two alternative compensation
programs offered for 1997-1998 service, as well as 1998-1999 service, on the
Board. The first program provides for a grant to the outside director of
options to purchase 6,000 shares of Common Stock (made on January 7, 1997),
with the first 3,000 shares subject to the option vesting on the date
immediately following the Company's 1997 Annual Meeting (subject to the
director's re-election to the Board) (the "First Vesting Date") and the
remaining 3,000 shares subject to the option vesting on the date immediately
following the Company's 1998 Annual Meeting (subject to the director's re-
election to the Board) (the "Second Vesting Date"). The second program
provides for a grant of an option to purchase 3,000 shares of Common Stock
(made on January 7, 1997), and payment of $30,000 in cash, with the first
1,500 shares subject to the option vesting (and the first $15,000 becoming
payable) on the First Vesting Date and the final 1,500 shares subject to the
option vesting (and the balance of $15,000 becoming payable) on the Second
Vesting Date. Outside directors Barr, Burns, deWilde, Ferrari, Kelleher,
Porter, and Wells, have selected the first program (consisting of options
only). Mr. Roster has selected the second program (consisting of a combination
of options and cash).

Each outside director received an award of 2,500 shares of Common Stock on
April 19,1996 in recognition of 1996-1997 service on the Board.

Mr. Gay, who is not standing for re-election to the Board, will remain an
advisory director to the Board. In recognition of this advisory role, the
Company will pay Mr. Gay $15,000 for his advisory services during the 1997-
1998 term.

Additionally, outside directors are reimbursed for travel expenses. Also,
the Chair of the Board (who also serves as the Chair of the Executive
Committee) receives an annual fee of $15,000. The Vice-Chair of the Board, as
well as the Option Sub-committee Chair, each receive an annual fee of $2,500.
The Chairs of the respective Board committees each receive an annual fee of
$7,500. Finally, outside directors on the Loan Committee (including the Chair
of this Committee) receive $250 for every Committee meeting attended after the
first one in any calendar month.

22
<PAGE>

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS

Information concerning each person known by the Company to own 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>
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED
------------------------ ---------------------------------
NUMBER PERCENT
OF SHARES OF TOTAL
-------------- ------------
<S> <C> <C>
Entitles affiliated with Brinson 695,015/(1)/ 7.3%
Partners, Inc.
209 South La Salle
Chicago, Illinois 60604
Entities affiliated with Dresdner 547,400/(2)/ 5.7%
Bank AG
Jurgen-Ponto-Platz 1
60301 Frankfurt, Germany
Entities affiliated with GeoCapital 556,245/(3)/ 5.8%
Corporation
767 Fifth Avenue
New York, New York 10153
H.A. Schupf & Co., Inc. 605,990/(4)/ 6.4%
101 East 52nd Street
New York, New York 10022
T. Rowe Price Associates, Inc. 586,000/(5)/ 6.1%
100 E. Pratt Street
Baltimore, Maryland 21202
</TABLE>
- --------
/(1)/ The number of shares in this table, together with information in this
footnote, have been derived from the Schedule 13G dated as of February 12,
1997 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 203,315 shares and BPI has shared voting
and dispositive power with respect to all 695,015 shares.

/(2)/ The number of shares in this table, together with information in this
footnote, have been derived from (a) the Schedule 13G dated as of February
7, 1997, filed by RCM Capital Management, L.L.C. ("RCM"), on behalf of
Dresdner Bank AG ("Dresdner"), an international banking organization
headquartered in Frankfurt, Germany, and (b) the Schedule 13G dated as of
February 3, 1997, filed by RCM, RCM Limited L.P. and RCM General
Corporation (collectively, the "RCM Group"), as filed with the SEC. RCM, a
wholly-owned subsidiary of Dresdner, is an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940. Dresdner may be
deemed to beneficially own 547,400 shares only to the extent that Dresdner
may be deemed to have beneficial ownership of securities deemed to be
beneficially owned by RCM, but has sole dispositive and voting power with
respect to 0 shares. The RCM Group beneficially owns such 547,400 shares
and has sole voting power with respect to 453,400 shares, sole dispositive
power with respect to 513,400 shares and shared dispositive power with
respect to 34,000 shares.

/(3)/ 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,
1997 by GeoCapital Corporation ("GCC"), as filed with the SEC. GCC is
deemed to be the beneficial owner of 461,045 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 48,350 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 461,045 shares that GCC is deemed to own
beneficially.

23
<PAGE>

/(4)/ The number of shares in this table, together with information in this
footnote, have been derived from Amendment Number 4 to Schedule 13G dated
as of February 4, 1997 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 55,200 shares and sole dispositive power with respect to
all 605,990 shares. Its clients are the actual owners of 550,790 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.

/(5)/ The number of shares in this table, together with information in this
footnote, have been derived from the Schedule 13G dated as of February 14,
1997 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
29,000 shares and sole dispositive power with respect to 586,000 shares.
TRP Fund has sole voting power with respect to 545,000 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.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company believes that, during fiscal year 1996, 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. The Company is not aware of any
10% shareholders.

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 "Compensation Committee Interlocks and Insider Participation".

24
<PAGE>

PROPOSAL NO. 2
APPROVAL OF
THE SILICON VALLEY BANCSHARES
1997 EQUITY INCENTIVE PLAN

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE 1997 EQUITY INCENTIVE PLAN

On December 19, 1996, the Company adopted the 1997 Equity Incentive Plan. A
total of 900,000 shares has been reserved for issuance under the plan, subject
to shareholder approval. At the Meeting, the shareholders are being asked to
ratify and approve the 1997 Equity Incentive Plan and the options that have
been granted thereunder. The essential features of the Plan are outlined
below.

GENERAL

The 1997 Equity Incentive Plan (the "Incentive Plan") provides for the grant
of incentive stock options to employees and nonstatutory stock options, stock
appreciation rights, restricted stock purchase awards and stock bonuses to
employees, directors and consultants. Incentive stock options granted under
the Incentive Plan are intended to qualify as "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). Nonstatutory stock options granted under the Incentive Plan are
not intended to qualify as incentive stock options under the Code. See
"Federal Income Tax Information" for a discussion of the tax treatment of the
various awards included in the Incentive Plan.

PURPOSE

The Incentive Plan provides a means by which selected employees and
directors of, and consultants to, the Company, and its affiliates, may be
given an opportunity to purchase Common Stock of the Company or receive cash
based on stock appreciation. The Company, by means of the Incentive Plan,
seeks to retain the services of persons who are now employees and directors
of, or consultants to, the Company or its affiliates, to secure and retain the
services of new employees, directors and consultants, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its affiliates.

PREVIOUSLY GRANTED OPTIONS

As of the Record Date, options to purchase 364,500 shares were outstanding
(with all of such grants having been made in January-February of 1997, subject
to shareholders' approval of the Incentive Plan). Accordingly, assuming the
shareholders approve the Incentive Plan, there will be 535,500 shares
remaining available for future grant.

The option grants made in January-February of 1997 constitute the optionees'
1997 allotted grants, as well as what the respective optionees otherwise would
have been granted in January 1998. Accordingly, the Company does not currently
expect to grant future options to such optionees until January 1999. However,
the Incentive Plan does not prohibit the grants of options or other stock
awards under the plan to such optionees prior to 1999.

TYPES OF AWARDS

The Incentive Plan provides for incentive stock options, nonstatutory stock
options, restricted stock purchase awards, stock bonuses and stock
appreciation rights (collectively "Stock Awards"). Stock appreciation rights
authorized for issuance under the Incentive Plan may be tandem stock
appreciation rights, concurrent stock appreciation rights or independent stock
appreciation rights. Tandem and concurrent stock appreciation rights are
generally subject to the same terms and conditions of the particular option
grant to which they pertain. Independent stock appreciation rights are granted
independently of any option and are generally subject to the same terms and
conditions applicable to nonstatutory stock options.

25
<PAGE>

ADMINISTRATION

The Incentive Plan is administered by the Board unless and until the Board
delegates administration to a committee composed of not fewer than two Board
members. All of the members of any such committee must be non-employee
directors (unless the Board expressly declares that such requirement shall not
apply) and may also be, in the discretion of the Board, outside directors. If
administration is delegated to a committee, such committee will have, in
connection with the administration of the Incentive Plan, the powers possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Incentive Plan, as may be adopted from time to time by the
Board.

The Board may abolish such committee at any time and revest in the Board the
administration of the Incentive Plan. The Board has delegated the
administration of the Incentive Plan to the Stock Committee (the
"Administrator").

The Administrator has the power to determine from time to time which of the
persons eligible under the Incentive Plan shall be granted awards, the type of
awards to be granted, when and how each award shall be granted, to construe
and interpret the Incentive Plan and awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Administrator may correct any defect in the Incentive Plan or in any award
agreement to make the Incentive Plan fully effective.

SHARES SUBJECT TO THE PLAN

The Common Stock that may be sold pursuant to awards under the Incentive
Plan shall not exceed in the aggregate 900,000 shares of the Company's Common
Stock. If any award expires or terminates, in whole or in part, without having
been exercised in full, or if any unvested award is forfeited, the stock not
purchased under such award will revert to and again become available for
issuance under the Incentive Plan. The Common Stock subject to the Incentive
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

ELIGIBILITY

Incentive stock options and stock appreciation rights appurtenant thereto
may be granted only to employees. Nonstatutory stock options, restricted stock
purchase awards, stock appreciation rights, and stock bonuses may be granted
to employees, directors or consultants. As of the record date, the Company had
400 employees, nine (9) non-employee directors and two (2) consultants
eligible for awards under the plan.

No person is eligible for the grant of an incentive stock option if, at the
time of grant, such person owns stock constituting more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company
unless the exercise price of such option is at least one hundred ten percent
(110%) of the fair market value of such Common Stock subject to the option at
the date of grant and the option is not exercisable after the expiration of
five (5) years from the date of grant, or in the case of a restricted stock
purchase award, the purchase price is at least one hundred percent (100%) of
the fair market value of Common Stock subject to the award at date of grant.
In addition, no person shall be eligible to be granted options and stock
appreciation rights covering more than two hundred fifty thousand (250,000)
shares of the Company's Common Stock in any calendar year.

PARTICIPATION IN INCENTIVE PLAN

As of the date of this proxy statement, the only type of awards that have
been granted under the Incentive Plan are options. There has been no
determination made by the Administrator with respect to future discretionary
awards to employees or consultants under the Incentive Plan. Accordingly,
future awards to employees and consultants are not determinable. Non-employee
directors also are eligible to participate in the Incentive Plan. See
"Director Compensation" above for a discussion of grants made to directors to
date (subject to the shareholders' approval of the Incentive Plan).

26
<PAGE>

No Stock Awards under the Incentive Plan were granted during the last fiscal
year. (Further, no Stock Awards under the 1989 Stock Option Plan were granted
to the executive officers named in the Summary Compensation Table during the
last fiscal year, with the exception of (1) 5,000 shares of restricted stock
granted to Mr. Dean [see "Table 1-Summary Compensation Table" for more
information] and (2) 25,000 options granted to Ms. Kamm [see "Table 2-
Option/SAR Grants in Last Fiscal Year" for more information.])

TABLE 4--1997 PLAN BENEFITS TABLE
STOCK OPTION PLAN

The following table sets forth information with respect to the grant of
options/stock bonuses under the 1997 Equity Incentive Plan since inception of
the Plan (with all of such grants having been made in January-February 1997):

<TABLE>
<CAPTION>
NUMBER OF
SHARES
SUBJECT
DOLLAR VALUE TO
OF OPTIONS
NAME OR IDENTITY OF GROUP POSITION OPTIONS/(1)/ GRANTED
----------------------------------------- ------------------------ ------------ ---------
<C> <S> <C> <C>
President and Chief
John C. Dean Executive Officer $ 825,000 25,000
James F. Forrester Executive Vice President $ 495,000 15,000
Barbara B. Kamm Executive Vice President
and Chief
Administrative Officer $ 247,500 7,500
Harry W. Kellogg, Jr. Executive Vice President $ 495,000 15,000
Kenneth P. Wilcox Executive Vice President $ 660,000 20,000
All Current Executive Officers as a Group $6,352,500 192,500
All Other Employees as a Group $4,262,500 127,000
All Outside Directors as a Group $1,485,000 45,000
</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
on the date grants were approved by the Board of Directors of the Company,
as quoted in the National Association of Securities Dealers Automated
Quotation/National Market. The weighted average exercise price of the
options (all of which were granted in January-February 1997) was $33.19.

TERM AND TERMINATION

No option is exercisable after the expiration of ten (10) years from the
date it was granted.

In the event an optionee's continuous status as an employee, director or
consultant is terminated, the optionee may exercise his or her option (to the
extent that the optionee was entitled to exercise it at the time of
termination) but only within the earlier of (i) the date three (3) months
after the termination of the optionee's continuous status as an employee,
director or consultant, or (ii) the expiration of the term of the option as
set forth in the option agreement.

An optionee's option agreement may also provide that if the exercise of the
option following the termination of the optionee's continuous status as an
employee, director or consultant would result in liability under Section 16(b)
of the Securities Exchange Act of 1934 (the "Exchange Act"), then the option
shall terminate on the earlier of (i) the expiration of the term of the
option, or (ii) the expiration of a period three (3) months after the
termination of the optionee's continuous status as an employee, director or
consultant during which the exercise of the option would not be in violation
of such registration requirements.

In the event an optionee's continuous status as an employee, director or
consultant terminates as a result of the optionee's death or disability, the
optionee (or such optionee's estate, heirs or beneficiaries) may exercise his

27
<PAGE>

or her option, but only within the period ending on the earlier of (i) twelve
(12) months following such termination (or such longer or shorter period as
specified in the option agreement) or (ii) the expiration of the term of the
option as set forth in the option agreement.

In the event a stock bonus or restricted stock recipient's continuous status
as an employee, director or consultant terminates, the Company may repurchase
or otherwise reacquire any or all of the shares of stock held by that person
that have not vested as of the date of termination under the terms of the
stock bonus or restricted stock purchase agreement between the Company and
such person.

EXERCISE PRICE

The exercise price of each incentive stock option will not be less than one
hundred percent (100%) of the fair market value of the Company's Common Stock
on the date of grant. The exercise price of each nonstatutory stock option
will not be less than eight-five percent (85%) of the fair market value on the
date of grant. The purchase price of restricted stock will not be less than
eighty-five percent (85%) of the fair market value of the Company's Common
Stock on the date such award is made. Stock bonuses may be awarded in
consideration for past services rendered to the Company or for its benefit.
The closing price for the Company's Common Stock on the record date was
$37.375 per share, as reported by National Association of Securities Dealers
Automated Quotation/National Market.

CONSIDERATION

The purchase price of stock acquired pursuant to a Stock Award is paid
either in cash at the time of exercise or purchase, or (if determined by the
Administrator at the time of grant for an option) by deferred payment or other
arrangement or in any other form of legal consideration that may be acceptable
to the Administrator. Additionally, in the case of an option and in the
discretion of the Administrator at the time of the grant of an option,
consideration may be paid by delivery to the Company of other Common Stock of
the Company. In the case of any deferred payment arrangement, interest will be
payable at least annually and will be charged at the minimum rate of interest
necessary to avoid the treatment as interest of amounts that are not stated to
be interest.

TRANSFERABILITY

An incentive stock option shall not be transferable except by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime
of the person to whom the incentive stock option is granted only by such
person. A nonstatutory stock option, stock bonus, or restricted stock award
shall only be transferable upon such terms and conditions as the Administrator
shall determine in its sole discretion at the time of grant. An optionee may
designate a beneficiary who may exercise his or her option after death.

VESTING

The total number of shares of stock subject to an option may, but need not,
be allotted in periodic installments. The option agreement may provide that
from time to time during each of such installment periods, the option may
become exercisable ("vest") with respect to some or all of the shares allotted
to that period. The option agreement may also provide that an optionee may
exercise an option prior to full vesting, provided that the Company has a
repurchase right with respect to any unvested shares.

Restricted stock purchase awards and stock bonuses granted under the
Incentive Plan may be granted subject to a repurchase option in favor of the
Company in accordance with a vesting schedule determined by the Administrator.

ADJUSTMENTS UPON CHANGE IN STOCK

If any change is made in the Common Stock, without receipt of consideration
by the Company (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash,

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stock split, liquidation dividend, combination of shares, exchange of shares,
change in corporate structure, or otherwise), the class(es) and maximum number
of shares subject to the Incentive Plan, the maximum annual award applicable
under the Incentive Plan and the class(es) and number of shares and price per
share of stock subject to outstanding Stock Awards will be appropriately
adjusted.

In the event of a "Change in Control" (defined below), holders of
outstanding Stock Awards shall have the right to exercise, and shall be vested
as to, all outstanding Stock Awards, including shares as to which the Stock
Award would not otherwise be exercisable or vested. If outstanding Stock
Awards become fully vested in the event of a Change in Control, the
Administrator shall notify all participants that their outstanding Stock
Awards shall be fully exercisable for a period of three (3) months (or such
other period of time not exceeding six (6) months as is determined by the
Administrator at the time of the grant) from the date of such notice, and any
unexercised options shall terminate upon the expiration of such period.

For purposes of the Incentive Plan, "Change in Control" means:

(1) the acquisition of 50% or more of the outstanding voting stock of the
Company 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 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 or at least two-thirds of the directors of the
Company, cease to make up at least 60% of the directors of the Company;

(3) a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation in which the shareholders of the
Company immediately prior thereto continue to own more than 50% of the
outstanding voting stock of the Company; or

(4) the complete liquidation of the Company, or disposition of all or
substantially all of the Company's assets.

AMENDMENT OF THE INCENTIVE PLAN

The Administrator at any time, and from time to time, may amend the
Incentive Plan. However, no amendment shall be effective unless approved by
the stockholders of the Company if shareholder approval is required in order
for the Incentive Plan to satisfy the requirements of Section 422 of the Code,
or to comply with the requirements of Rule 16b-3 or the Nasdaq National Market
listing requirements. The Administrator may in its sole discretion submit any
other amendment to the Incentive Plan for stockholder approval.

TERMINATION OR SUSPENSION OF THE INCENTIVE PLAN

The Administrator may suspend or terminate the Incentive Plan at any time.
Unless sooner terminated, the Incentive Plan shall terminate on December 18,
2006. No Stock Awards may be granted under the Incentive Plan while the
Incentive Plan is suspended or after it is terminated.

FEDERAL INCOME TAX INFORMATION

Incentive Stock Options. Incentive stock options under the Incentive Plan
are intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.

There generally are no federal income tax consequences to the optionee of
the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.

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If an optionee holds stock acquired through exercise of an incentive stock
option for at least two years from the date on which the option is granted and
at least one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of
such stock will be long-term capital gain or loss. Generally, if the optionee
disposes of the stock before the expiration of either of these holding periods
(a "disqualifying disposition"), at the time of disposition, the optionee will
realize taxable ordinary income equal to the lesser of (a) the excess of the
stock's fair market value on the date of exercise over the exercise price, or
(b) the optionee's actual gain, if any, on the purchase and sale. The
optionee's additional gain, or any loss, upon the disqualifying disposition
will be a capital gain or loss, which will be long-term or short-term
depending on whether the stock was held for more than one year. Capital gains
currently are generally subject to lower tax rates than ordinary income. The
maximum long-term capital gains rate for federal income tax purposes is
currently 28% while the maximum ordinary income rate is effectively 39.6% at
the present time. Slightly different rules may apply to optionees who acquire
stock subject to certain repurchase options.

To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness and the satisfaction of a tax reporting
obligation) to a corresponding business expense deduction in the tax year in
which the disqualifying disposition occurs.

Nonstatutory Stock Options. Nonstatutory stock options granted under the
Incentive Plan generally have the following federal income tax consequences:

There are no tax consequences to the optionee or the Company by reason of
the grant of a nonstatutory stock option. Upon exercise of a nonstatutory
stock option, the optionee normally will recognize taxable ordinary income
equal to the excess of the stock's fair market value on the date of exercise
over the option exercise price. Generally, with respect to employees, the
Company is required to withhold taxes from regular wages or supplemental wage
payments an amount based on the ordinary income recognized. Subject to the
requirement of reasonableness and the satisfaction of a reporting obligation,
the Company will generally be entitled to a business expense deduction equal
to the taxable ordinary income realized by the optionee. Upon disposition of
the stock, the optionee will recognize a capital gain or loss equal to the
difference between the selling price and the purchase price (to the extent not
recognized as taxable income as described above) which will be deemed long or
short-term depending on whether the stock was held for more than one year.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.

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.

Potential Limitation on Company Deductions. As part of the Omnimbus Budget
Reconciliation Act of 1993, the U.S. Congress amended the Code to add Section
162(m), which denies a deduction to any publicly held corporation for
compensation paid to certain employees in a taxable year to the extent that
compensation exceeds $1 million for a covered employee. If the shareholders
approved the Incentive Plan, options granted thereunder with exercise prices
at fair market value (or higher) are intended to be exempt from the $1 million
limit as "performance-based" compensation. However, compensation attributable
to other types of stock awards granted in the future under the Incentive Plan,
when combined with all other types of includible compensation received by a
covered employee from the Company, may cause this limitation to be exceeded in
any particular year.

VOTE REQUIRED

Ratification and approval of adoption of the 1997 Equity Incentive Plan
requires the affirmative vote of a majority of the Votes Cast (which
affirmative votes must constitute at least a majority of the required quorum).

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PROPOSAL NO. 3
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 the independent auditor of the
Company for the 1997 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. The
shareholders are being asked to ratify the selection of KPMG Peat Marwick LLP.
If the shareholders do not ratify such selection by the affirmative vote of a
majority of the Votes Cast, the Board will reconsider its selection.

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.

SHAREHOLDER PROPOSALS--1998 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 1998 Annual Meeting of
Shareholders of the Company must be received at the Company's principal
executive office on or before November 20, 1997 in order to be considered for
possible inclusion in the Company's Proxy Statement and form of proxy relating
to such annual meeting.

1996 ANNUAL REPORT

Enclosed is a copy of the Company's 1996 Annual Report to Shareholders,
including financial statements for the year ended December 31, 1996. Also
enclosed is a copy of the Company's Annual Report on Form 10-K (without
exhibits) for the year ended December 31, 1996 as filed with the Securities
and Exchange Commission. Shareholders who wish to obtain additional copies of
the Annual Report to Shareholders or the Annual Report on Form 10-K should
address a written request to Shareholder Relations, Silicon Valley Bancshares,
3003 Tasman Drive, Santa Clara, California 95054.

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

/s/A. Catherine Ngo
--------------------
Santa Clara, California A. Catherine Ngo
March 17, 1997 Corporate Secretary

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APPENDIX INDEX
ATTACHED TO SILICON VALLEY BANCSHARES
PROXY STATEMENT

APPENDIX A Proposed Silicon Valley Bancshares 1997 Equity Incentive Plan

THE FOREGOING APPENDIX IS BEING SUBMITTED TO THE COMMISSION FOR REVIEW PURPOSES
- -------------------------------------------------------------------------------
ONLY AND WILL NOT BE INCLUDED IN THE PROXY SOLICITATION MATERIALS DISTRIBUTED TO
- --------------------------------------------------------------------------------
THE SHAREHOLDERS.
- ----------------

<PAGE>

APPENDIX A

SILICON VALLEY BANCSHARES

1997 EQUITY INCENTIVE PLAN

ADOPTED DECEMBER 19, 1996
APPROVED BY SHAREHOLDERS ____________, 1997

1. PURPOSES.

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

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

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

2. DEFINITIONS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. ADMINISTRATION.

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

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

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

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

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

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

(c) The Board may delegate administration of the Plan to a committee or
committees of the Board composed of one (1) or more members (the "Committee").
In the discretion of the Board, the Committee may be composed of two (2) or more
Non-Employee Directors and/or

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Outside Directors. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, (and references in this Plan to the Board
shall thereafter be to the Committee), subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest in
the Board the administration of the Plan.

4. SHARES SUBJECT TO THE PLAN.

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

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

5. ELIGIBILITY.

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

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

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

6. OPTION PROVISIONS.

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

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

(b) PRICE. The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted; the exercise price of
each Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
the Fair Market Value of the stock subject to the Option on the date the Option
is granted. Notwithstanding the foregoing, an Option (whether an Incentive Stock
Option or a Nonstatutory Stock Option) may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

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

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

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

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appropriate. The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.

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

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

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

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<PAGE>

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

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

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

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

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

(a) PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such Stock Award Agreement, but in no event shall the
purchase price be less than eighty-five percent

8
<PAGE>

(85%) of the stock's Fair Market Value on the date such award is made.
Notwithstanding the foregoing, the Board or the Committee may determine that
eligible participants in the Plan may be awarded stock pursuant to a stock bonus
agreement in consideration for past services actually rendered to the Company or
for its benefit.

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

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

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

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

8. STOCK APPRECIATION RIGHTS.

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

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

(1) TANDEM STOCK APPRECIATION RIGHTS. Tandem Stock Appreciation
Rights will be granted appurtenant to an Option, and shall, except as
specifically set forth in this Section

9
<PAGE>

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

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

(3) INDEPENDENT STOCK APPRECIATION RIGHTS. Independent Rights will be
granted independently of any Option and shall, except as specifically set forth
in this Section 8, be subject to the same terms and conditions applicable to
Nonstatutory Stock Options as set forth in Section 6. They shall be denominated
in share equivalents. The appreciation distribution payable on the exercised
Independent Right shall be not greater than an amount equal to the excess of (A)
the aggregate Fair Market Value (on the date of the exercise of the Independent
Right) of a number of shares of Company stock equal to the number of share
equivalents in which the holder is vested under such Independent Right, and with
respect to which the holder is exercising the Independent Right on such date,
over (B) the aggregate Fair Market Value (on the date of the grant of the
Independent Right) of such number of shares of Company stock. The appreciation
distribution payable on the exercised Independent Right shall be in cash or, if
so provided, in an equivalent number of shares of stock based on Fair Market
Value on the date of the exercise of the Independent Right.

9. CANCELLATION AND RE-GRANT OF OPTIONS.

(a) The Board or the Committee shall have the authority to effect, at any
time and from time to time, (i) the repricing of any outstanding Options and/or
any Stock Appreciation Rights under the Plan and/or (ii) with the consent of the
affected holders of Options and/or Stock Appreciation Rights, the cancellation
of any outstanding Options and/or any Stock Appreciation Rights under the Plan
and the grant in substitution therefor of new Options and/or Stock Appreciation
Rights under the Plan covering the same or different numbers of shares of stock,

10
<PAGE>

but having an exercise price per share not less than eighty-five percent (85%)
of the Fair Market Value (one hundred percent (100%) of the Fair Market Value in
the case of an Incentive Stock Option) or, in the case of a 10% shareholder (as
described in subsection 5(b)) receiving a new grant of an Incentive Stock
Option, not less than one hundred ten percent (110%) of the Fair Market Value)
per share of stock on the new grant date. Notwithstanding the foregoing, the
Board or the Committee may grant an Option and/or Stock Appreciation Right with
an exercise price lower than that set forth above if such Option and/or Stock
Appreciation Right is granted as part of a transaction to which section 424(a)
of the Code applies.

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

10. COVENANTS OF THE COMPANY.

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

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

11. USE OF PROCEEDS FROM STOCK.

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

11
<PAGE>

12. MISCELLANEOUS.

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

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

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

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

(e) The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred pursuant to subsection 6(d),
7(b) or 8(b), as a condition of exercising or acquiring stock under any Stock
Award, (1) to give written assurances satisfactory to the Company as to such
person's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently effective registration statement under the Securities Act, or
(ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the

12
<PAGE>

then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

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

13. ADJUSTMENTS UPON CHANGES IN STOCK.

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

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

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

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

13
<PAGE>

Voting Securities of the Company, or of such surviving entity, outstanding
immediately after such merger or consolidation;

(2) the shareholders of the Company approve a plan of liquidation or
dissolution of the Company or approve an agreement for the sale, lease, exchange
or other transfer or disposition by the Company of all or substantially all of
the Company's assets;

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

(4) (A) (1) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in beneficial owners of Voting Securities of
the Company outstanding immediately prior thereto continuing to beneficially own
securities representing (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than twenty-five percent
(25%) of the total Voting Securities of the Company, or of such surviving
entity, outstanding immediately after such merger or consolidation, or (2) any
person (as such term is used in Sections 13(d) or 14(d) of the Exchange Act),
other than (a) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or (b) a corporation owned directly or indirectly by
the shareholders of Company in substantially the same proportions as their
ownership of stock in the Company, is or becomes the beneficial owner (within
the meaning or Rule 13d-3 under the Exchange Act), directly or indirectly, of
the securities of the Company representing twenty-five percent (25%) or more of
the Voting Securities of such corporation, and

(B) within twelve (12) months of the occurrence of such event, a
change in the composition of the Company's Board occurs as a result of which
sixty percent (60%) or fewer of the directors are Incumbent Directors.

"Incumbent Directors" shall mean directors who either

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

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

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

14
<PAGE>

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

14. AMENDMENT OF THE PLAN AND STOCK AWARDS.

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

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

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

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

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

15. TERMINATION OR SUSPENSION OF THE PLAN.

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

15
<PAGE>

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

16. EFFECTIVE DATE OF PLAN.

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

16
<PAGE>

SILICON VALLEY BANCSHARES
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS

THURSDAY, APRIL 17, 1997

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 17,
1997, at 4:00 p.m. at the Network 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., Daniel J. Kelleher, James R. Porter, Michael
Roster, and Ann R. Wells

2. To ratify and approve the Silicon Valley Bancshares 1997 Equity
Incentive Plan, the reservation of 900,000 shares for issuance
thereunder and the options already granted under the plan.

[_]FOR [_]AGAINST [_]ABSTAIN

3. To ratify the appointment of KPMG Peat Marwick LLP, as the Company's
independent auditors.

[_]FOR [_]AGAINST [_]ABSTAIN

4. 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 the other side)

1
<PAGE>

(Continued from other side)

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 , 1997
----------------------
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