<PAGE>
As filed with the Securities and Exchange Commission on June 26, 1998
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
Form 11-K
(Mark One)
[ ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to _____________
Commission file number 33-41102
____________________________
A. Full title of the plan and address of the plan, if different from that of the
issuer named below:
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements
December 31, 1997 and 1996
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
SILICON VALLEY BANCSHARES
3003 TASMAN DRIVE
SANTA CLARA, CALIFORNIA 95054-1191
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
This report contains a total of 15 pages.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 4
WITH FUND INFORMATION, DECEMBER 31, 1997 AND 1996
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 6
WITH FUND INFORMATION, YEAR ENDED DECEMBER 31, 1997
NOTES TO FINANCIAL STATEMENTS 7
SIGNATURES 14
EXHIBITS 15
</TABLE>
2
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
Silicon Valley Bank 401(k) and Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for
benefits of the Silicon Valley Bank 401(k) and Employee Stock Ownership Plan
(the "Plan") as of December 31, 1997 and 1996 and the related statement of
changes in net assets available for benefits for the year ended December 31,
1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as
of December 31, 1997 and 1996 and the changes in net assets available for
benefits for the year ended December 31, 1997 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statements
of net assets available for benefits and the statement of changes in net
assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The fund
information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ KPMG Peat Marwick LLP
---------------------------
San Francisco, California
June 25, 1998
3
<PAGE>
SILICON VALLEY BANK 401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1997 and 1996
<TABLE>
<CAPTION>
December 31, 1997 Money AIM U.S.
Market Constel- S&P 500 Treasury Lifepath Lifepath
ASSETS Account lation Stock Allocation 2000 2010
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $21,856 $2,383,432 $3,147,287 $1,031,007 $163,417 $638,980
------- ---------- ---------- ---------- -------- --------
Total investments 21,856 2,383,432 3,147,287 1,031,007 163,417 638,980
------- ---------- ---------- ---------- -------- --------
Receivables:
Participants' contributions - 10,310 708 2,420 543 1,399
Employer's
contributions - 1,149 244 450 82 121
------- ---------- ---------- ---------- -------- --------
Total receivables - 11,459 952 2,870 625 1,520
------- ---------- ---------- ---------- -------- --------
Total assets 21,856 2,394,891 3,148,239 1,033,877 164,042 640,500
------- ---------- ---------- ---------- -------- --------
LIABILITIES
Excess contributions payable (12) (5,825) (2,807) (25) (5) (246)
------- ---------- ---------- ---------- -------- --------
Net assets available for
benefits $21,844 $2,389,066 $3,145,432 $1,033,852 $164,037 $640,254
------- ---------- ---------- ---------- -------- --------
------- ---------- ---------- ---------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
U.S. Silicon Valley
December 31, 1997 Gov't Bancshares Participant
Lifepath Lifepath Lifepath Money Common Loan 1997
ASSETS 2020 2030 2040 Market Stock Account Total
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $656,094 $426,448 $425,122 $24,674 $25,720,849 $735,528 $35,374,694
-------- ---------- ---------- ---------- ----------- -------- -----------
Total investments 656,094 426,448 425,122 24,674 25,720,849 735,528 35,374,694
-------- ---------- ---------- ---------- ----------- -------- -----------
Receivables:
Participants'
contributions 2,544 1,423 2,381 804 3,825 - 26,357
Employer's
contributions 191 161 530 466 1,465,626 - 1,469,020
-------- ---------- ---------- ---------- ---------- -------- -----------
Total receivables 2,735 1,584 2,911 1,270 1,469,451 - 1,495,377
-------- ---------- ---------- ---------- ---------- -------- -----------
Total assets 658,829 428,032 428,033 25,944 27,190,300 735,528 36,870,071
-------- ---------- ---------- ---------- ---------- -------- -----------
LIABILITIES
Excess contributions
payable (5) (266) (321) (50) (409) - (9,971)
-------- ---------- ---------- ---------- ---------- -------- -----------
Net assets available
for benefits $658,824 $427,766 $427,712 $25,894 $27,189,891 $735,528 $36,860,100
-------- ---------- ---------- ---------- ---------- -------- -----------
-------- ---------- ---------- ---------- ---------- -------- -----------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SILICON VALLEY BANK 401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1997 and 1996 (Continued)
<TABLE>
<CAPTION>
December 31, 1996 Money AIM U.S.
Market Constel- S&P 500 Treasury Lifepath Lifepath
ASSETS Account lation Stock Allocation 2000 2010
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $213,021 $2,119,269 $1,973,618 $860,510 $122,457 $291,504
Total investments 213,021 2,119,269 1,973,618 860,510 122,457 291,504
-------- ----------- ---------- ---------- -------- --------
Receivables:
Participants' contributions - 48 337 - - -
Employer's contributions - 444 853 212 10 2
-------- ----------- ---------- ---------- -------- --------
Total receivables - 492 1,190 212 10 2
-------- ----------- ---------- ---------- -------- --------
Total assets 213,021 2,119,761 1,974,808 860,722 122,467 291,506
-------- ----------- ---------- ---------- -------- --------
LIABILITIES
Excess contributions payable - (3,454) (447) (79) - (140)
-------- ----------- ---------- ---------- -------- --------
Net assets available for
benefits $213,021 $2,116,307 $1,974,361 $860,643 $122,467 $291,366
-------- ----------- ---------- ---------- -------- --------
-------- ----------- ---------- ---------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
U.S. Silicon Valley
December 31, 1996 Gov't Bancshares Participant
Lifepath Lifepath Lifepath Money Common Loan 1996
ASSETS 2020 2030 2040 Market Stock Account Total
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $452,761 $276,492 $317,728 $29,299 $14,514,422 $445,942 $21,617,023
Total investments 452,761 276,492 317,728 29,299 14,514,422 445,942 21,617,023
-------- ---------- ---------- ---------- ------------ --------- ------------
Receivables:
Participants' contributions - - - - - - 385
Employer's contributions 29 36 69 - 1,630,871 - 1,632,526
-------- ---------- ---------- ---------- ----------- --------- ------------
Total receivables 29 36 69 - 1,630,871 - 1,632,911
-------- ---------- ---------- ---------- ----------- --------- ------------
Total assets 452,790 276,528 317,797 29,299 16,145,293 445,942 23,249,934
-------- ---------- ---------- ---------- ----------- --------- ------------
LIABILITIES
Excess contributions payable - (44) - (182) - - (4,346)
-------- ---------- ---------- ---------- ----------- --------- ------------
Net assets available for
benefits $452,790 $276,484 $317,797 $29,117 $16,145,293 $445,942 $23,245,588
-------- ---------- ---------- ---------- ----------- --------- ------------
-------- ---------- ---------- ---------- ----------- --------- ------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
SILICON VALLEY BANK 401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year Ended December 31, 1997
<TABLE>
<CAPTION>
Money AIM U.S.
Market Constel- S&P 500 Treasury Lifepath Lifepath
Account lation Stock Allocation 2000 2010
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $ 16,180 $ 301,049 $ 703,291 $ 74,832 $ 12,552 $ 48,764
--------- ----------- ----------- ------------ -------- ---------
Total investment income 16,180 301,049 703,291 74,832 12,552 48,764
--------- ----------- ----------- ------------ -------- ---------
Contributions:
Employer - 108,112 106,264 32,509 5,523 13,657
Participants - 320,514 307,207 76,002 13,781 37,927
Rollovers - 97,250 139,893 76,140 2,503 16,331
--------- ----------- ----------- ------------ -------- ---------
Total contributions - 525,876 553,364 184,651 21,807 67,915
--------- ----------- ----------- ------------ -------- ---------
Other additions:
Class action lawsuit
settlement (Note 4) 14,568 - - - - -
--------- ----------- ----------- ------------ -------- ---------
Total additions 30,748 826,925 1,256,655 259,483 34,359 116,679
--------- ----------- ----------- ------------ -------- ---------
Deductions from net assets
attributed to:
Benefits paid to participants 4,268 118,833 77,304 90,532 1,106 14,706
Loan fees and other 10 1,197 1,187 856 64 133
--------- ----------- ----------- ------------ -------- ---------
Total deductions 4,278 120,030 78,491 91,388 1,170 14,839
--------- ----------- ----------- ------------ -------- ---------
Net increase (decrease) prior to
interfund transfers 26,470 706,895 1,178,164 168,095 33,189 101,840
Interfund transfers (217,647) (434,136) (7,093) 5,114 8,381 247,048
--------- ----------- ----------- ------------ -------- ---------
Net increase (decrease) (191,177) 272,759 1,171,071 173,209 41,570 348,888
Net assets available for benefits:
Beginning of year 213,021 2,116,307 1,974,361 860,643 122,467 291,366
--------- ----------- ----------- ------------ -------- ---------
End of year $ 21,844 $2,389,066 $3,145,432 $1,033,852 $164,037 $640,254
--------- ----------- ----------- ------------ -------- ---------
--------- ----------- ----------- ------------ -------- ---------
</TABLE>
<TABLE>
<CAPTION>
U.S. Silicon Valley
Gov't Bancshares Participant
Lifepath Lifepath Lifepath Money Common Loan 1997
2020 2030 2040 Market Stock Account Total
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $ 90,639 $ 64,866 $ 81,891 $ 2,401 $11,156,209 $ 53,556 $12,606,230
-------- -------- --------- ---------- ----------- --------- -----------
Total investment income 90,639 64,866 81,891 2,401 11,156,209 53,556 12,606,230
-------- -------- --------- ---------- ----------- --------- -----------
Contributions:
Employer 21,383 14,359 21,013 11,771 1,499,987 - 1,834,578
Participants 70,118 43,264 58,390 22,883 83,574 - 1,033,660
Rollovers 17,180 38,344 18,576 2,375 58,952 - 467,544
-------- -------- --------- ---------- ----------- --------- -----------
Total contributions 108,681 95,967 97,979 37,029 1,642,513 - 3,335,782
-------- -------- --------- ---------- ----------- --------- -----------
Other additions:
Class action lawsuit
settlement (Note 4) - - - - 113,340 - 127,908
-------- -------- --------- ---------- ----------- --------- -----------
Total additions 199,320 160,833 179,870 39,430 12,912,062 53,556 16,069,920
-------- -------- --------- ---------- ----------- --------- -----------
Deductions from net assets
attributed to:
Benefits paid to participants 21,908 4,801 53,772 1,014,051 1,003,802 43,722 2,448,805
Loan fees and other 258 189 313 11 2,385 - 6,603
-------- -------- --------- ---------- ----------- --------- -----------
Total deductions 22,166 4,990 54,085 1,014,062 1,006,187 43,722 2,455,408
-------- -------- --------- ---------- ----------- --------- -----------
Net increase (decrease) prior to
interfund transfers 177,154 155,843 125,785 (974,632) 11,905,875 9,834 13,614,512
Interfund transfers 28,880 (4,561) (15,870) 971,409 (861,277) 279,752 -
-------- -------- --------- ---------- ----------- --------- -----------
Net increase (decrease) 206,034 151,282 109,915 (3,223) 11,044,598 289,586 13,614,512
Net assets available for benefits:
Beginning of year 452,790 276,484 317,797 29,117 16,145,293 445,942 23,245,588
-------- -------- --------- ---------- ----------- --------- -----------
End of year $658,824 $427,766 $427,712 $ 25,894 $27,189,891 $735,528 $36,860,100
-------- -------- --------- ---------- ----------- --------- -----------
-------- -------- --------- ---------- ----------- --------- -----------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(1) DESCRIPTION OF PLAN
The following description of the Silicon Valley Bank 401(k) and Employee
Stock Ownership Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
(a) GENERAL
The Plan is a defined contribution plan established by Silicon Valley
Bank (the "Company") on January 1, 1985. Effective March 1, 1995, the
Silicon Valley Bancshares Employee Stock Ownership Plan was merged with
the Silicon Valley Bank 401(k) Plan. The merged Plan was restated and
renamed the Silicon Valley Bank 401(k) and Employee Stock Ownership
Plan. The Plan is intended to constitute a qualified profit sharing
plan, as described in Section 401(a) of the Internal Revenue Code
("IRC"), which includes a qualified cash or deferred arrangement as
described in Section 401(k) of the IRC, and which also includes an
employee stock ownership plan as described in Section 4975 (e) (7) of
the IRC. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended. Effective
January 1, 1996, all of the assets in the Plan were included in the
Silicon Valley Bank Retirement Plans Master Trust (the "Master Trust")
with the assets of the Silicon Valley Bank Money Purchase Pension Plan
(the "MPP"). The Master Trust is held by Barclays Global Investors,
N.A. ("BGI").
(b) ADMINISTRATION OF PLAN
The Company is the sponsor and administrator of the Plan. Management and
administration of the Plan is the responsibility of a committee appointed
by the Company. The Company has contracted with BGI to act as the trustee
and custodian of the Plan. Effective August 29, 1997, Merrill Lynch
acquired BGI's MasterWorks Division. As a result of the acquisition, the
agreements between the Company and BGI relating to the Plan were
transferred to Merrill Lynch effective January 1, 1998.
(c) ELIGIBILITY
All eligible employees become Plan participants on the first day of the
calendar quarter after the date the participant attains age 18 and
completes one hour of service as an employee of the Company.
(continued)
7
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(d) CONTRIBUTIONS
Participants were allowed to contribute up to 5% of their pre-tax
compensation in 1997 and 1996, as defined in the Plan, up to the maximum
amount allowable under federal income tax regulations ($9,500 for both 1997
and 1996). Upon approval by the Plan administrator, participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans.
The Company may, at its discretion, make matching 401(k) contributions as
defined in the Plan. The Company may match up to 100% of each
participant's contributions up to a maximum of $1,000 per year.
Discretionary ESOP contributions made by the Company to the Plan are
allocated among the Plan participants based upon each eligible
participant's cash compensation excluding incentive pay and excluding IRC
Section 401(k) and Section 125 deferrals (collectively "Pay").
Discretionary ESOP contributions, which are based on Company performance,
may range between 0% and 10% of Pay. In 1997 and 1996, discretionary ESOP
contributions of 10% and 9.72%, respectively, were made for all
participants employed by the Company on the last day of each year.
(e) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions and allocations of (a) the Company's contributions and (b)
Plan earnings. Allocations are based on participant earnings or account
balances, as defined in the Plan. Certain fees may be charged to
participant accounts, as defined in the Plan. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account balance.
(f) VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's 401(k) matching and
discretionary ESOP contributions is based on years of service, as defined
in the Plan, in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Vested
Service Percentage
------- ----------
<S> <C>
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
</TABLE>
In addition, a participant's account becomes fully vested upon attaining
normal retirement age while employed by the Company, upon termination by
the Company due to a reduction in force, upon death or disability, or upon
a covered termination, as defined in the Plan.
(continued)
8
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(g) FORFEITED ACCOUNTS
Forfeited balances of terminated participants' nonvested accounts are used
first to restore previously forfeited amounts of rehired participants'
accounts and are then used to reduce future Company contributions to the
Plan. Forfeited nonvested accounts totaled $337,942 and $213,021 for the
years ended December 31, 1997 and 1996, respectively. During 1997 and 1996,
Company contributions to the Plan were reduced by $538,912 and $41,098,
respectively, due to forfeitures from nonvested accounts. The remaining
forfeiture balance at December 31, 1997 of $21,844 will be used to reduce
future Company contributions to the Plan.
(h) INVESTMENT OPTIONS
Participants may direct the investment of their Plan assets in any of the
Plan's investment options, except for the ESOP. ESOP contributions are
directed by the Plan administrator. Investment options, with the exception
of the AIM Constellation Fund, are managed by BGI, and provide varying
degrees of risk and return. The AIM Constellation Fund is managed by AIM
Equity Funds, Inc. The fund options at December 31, 1997 and 1996 were:
a. U.S. Treasury Allocation Fund - Funds are invested in U.S. Treasury
bonds and notes, money market securities and U.S. Treasury bills.
b. AIM Constellation Fund - Funds are invested primarily in the stocks
of small and medium-size companies.
c. S&P 500 Stock Fund - Funds are invested in the stocks of a broad
array of established U.S. companies, seeking to approximate, as
closely as practicable, the capitalization-weighted total rate of
return of the Standard & Poors 500 Index.
d. LifePath Series Funds (5) - Each LifePath fund contains a target
year, referring to the year when investors plan to either retire or
begin to withdraw portions of their investment. Each fund accepts
higher risk early on, and adjusts its asset mix to lower-risk
investments over time as the target year approaches. The funds
invest in domestic and international stocks, bonds and money market
securities.
e. U.S. Government Money Market Fund - Funds are invested primarily in
short-term U.S. Treasury and U.S. government agency securities with
maturities of less than three months.
f. Silicon Valley Bancshares Common Stock Fund - Funds are invested
primarily in common stock of the Company.
Participants may elect to invest in any of the funds in increments of 1%
of their total contribution amounts, except that contributions allocated
to the Silicon Valley Bancshares Common Stock Fund are limited to 25% of
the amount available for each participant to direct. A participant's
investment options and percentage increments for the Plan are the same as
the participant's investment options and percentage increments as directed
by that participant under the MPP Plan. Earnings or losses on these
investments are applied to participants' accounts as of the end of each
day. Participants may change their investment elections under the Plan
and the MPP Plan at any time.
(continued)
9
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
All ESOP contributions are invested in the Silicon Valley Bancshares
Common Stock Fund.
As of December 31, 1997 and 1996, the Plan owned 483,375 and 500,629
equivalent shares of Silicon Valley Bancshares common stock with a cost
basis of $9,946,542 and $9,029,674 and a fair market value of $27,189,891
and $16,145,293, respectively.
The following table provides information on participant-directed and
non-participant-directed activity in 1997 for the Silicon Valley
Bancshares Common Stock Fund:
<TABLE>
<CAPTION>
Participant- Non-Participant-
Directed Directed Total
-------- -------- -----
<S> <C> <C> <C>
Balance at January 1, 1997 $516,533 $15,628,760 $16,145,293
Net appreciation in
fair value of investments 359,237 10,796,972 11,156,209
Employer contributions 35,204 1,464,783 1,499,987
Participant contributions 83,574 - 83,574
Rollovers 58,952 - 58,952
Class action lawsuit settlement - 113,340 113,340
Benefits paid to participants (39,916) (963,886) (1,003,802)
Loan fees and other (603) (1,782) (2,385)
Interfund transfers 78,485 (939,762) (861,277)
---------- ----------- -----------
Balance at December 31, 1997 $1,091,466 $26,098,425 $27,189,891
---------- ----------- -----------
---------- ----------- -----------
</TABLE>
(i) PARTICIPANT LOANS
Participants may borrow from the total of their Plan contributions,
including their rollover contributions, plus earnings thereon, an amount
equal to a minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50% of the participant's total vested account balance. Loan
transactions are treated as a transfer to (from) the investment funds from
(to) the Participant Loan Account Fund. Loan terms may be up to five years
for personal loans or up to 10 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's
account and bear interest at the trustee's prime rate, plus 1%. Interest
rates for loans outstanding at December 31, 1997 and 1996 range from 9.25%
to 10% for each year. Principal and interest are paid ratably through
semi-monthly payroll deductions.
(j) PAYMENT OF BENEFITS
On termination of employment by the Company or termination of service due
to death, disability, retirement, a reduction in force by the Company, or
a covered termination as defined in the Plan, a participant may elect to
receive a lump sum amount equal to the value of the participant's vested
interest in their account, distributions in annual installments or in the
form of an annuity, or may leave their assets in the Plan until the
participant elects a form of distribution. If the account balance is
$3,500 or less, distribution payment options are limited to a single lump
sum upon termination.
(continued)
10
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(2) SUMMARY OF ACCOUNTING POLICIES
The accounting and reporting policies of the Plan conform with generally
accepted accounting principles.
BASIS OF FINANCIAL STATEMENT PRESENTATION
The financial statements of the Plan are prepared using the accrual
method of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
ADMINISTRATIVE EXPENSES
Plan administrative expenses may be paid by the Company and any such
expenses not paid by the Company shall be paid by the Plan.
Substantially all of the Plan's expenses were paid by the Company.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Mutual funds, shares of
collective investment funds and money market funds are valued at quoted
market prices which represent the net asset value of shares held in the
funds at year end. The Silicon Valley Bancshares Common Stock Fund is
valued at its quoted market price. Participant loans are valued at cost,
which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
PAYMENTS OF BENEFITS
Benefits are recorded when paid.
(3) INTEREST IN MASTER TRUST
The Plan's investments are included in the Master Trust, which was
established for the investment of the assets of both the Plan and the
MPP Plan. Each of the above-mentioned plans has an interest in certain
investment portfolios within the Master Trust. The assets of the Master
Trust are held by BGI. At December 31, 1997 and 1996, the Plan's
interest in the assets of the Master Trust constituted approximately 92%
of the total assets. Each plan's assets, earnings (including realized
and unrealized gains and losses on investments), and disbursements are
allocated to the funds based on each individual plan's total for the
above-allocated categories (e.g., total assets, total earnings and total
disbursements) as a percentage of the Master Trust's total for the
above-allocated categories. This allocation excludes transactions
related to the ESOP and participant loan transactions, which are
separately accounted for under the Plan, and contributions to each plan,
which are identifiable by fund.
(continued)
11
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
The Master Trust had the following investments at December 31, 1997 and
1996:
<TABLE>
<CAPTION>
Investments, at fair value: 12/31/97 12/31/96
-------- --------
<S> <C> <C>
Money Market Account $ 29,346 $ 258,145
AIM Constellation Fund 3,281,838 2,713,531
S&P 500 Stock Fund 4,173,110 2,527,383
U.S. Treasury Allocation Fund 1,331,840 1,101,955
Lifepath 2000 Fund 205,139 156,817
Lifepath 2010 Fund 753,488 373,295
Lifepath 2020 Fund 867,698 579,798
Lifepath 2030 Fund 560,975 354,071
Lifepath 2040 Fund 582,274 406,877
U.S. Government Money Market Fund 50,138 37,520
Silicon Valley Bancshares Common Stock Fund 26,056,102 14,649,885
Participant Loan Account 735,528 445,942
----------- -----------
Total Assets $38,627,476 $23,605,219
----------- -----------
----------- -----------
Investment income for the Master Trust for the year ended December 31, 1997
is as follows:
Net appreciation
in fair value Interest and
of investments dividends
-------------- ---------
Money Market Account $ - $ 22,658
AIM Constellation Fund 148,026 230,364
S&P 500 Stock Fund 923,701 -
U.S. Treasury Allocation Fund 84,975 -
Lifepath 2000 Fund 16,802 -
Lifepath 2010 Fund 64,944 -
Lifepath 2020 Fund 118,632 -
Lifepath 2030 Fund 86,243 -
Lifepath 2040 Fund 105,676 -
U.S. Government Money Market Fund - 3,414
Silicon Valley Bancshares Common Stock Fund 11,269,091 -
Participant Loan Account - 53,556
-------------- ---------
Total Investment Income $12,818,090 $309,992
-------------- ---------
-------------- ---------
</TABLE>
(4) CLASS ACTION LAWSUIT PROCEEDS
The Plan received proceeds totaling $127,908 related to a claim filed on
behalf of ESOP participants pursuant to a class action lawsuit filed
against and settled by Silicon Valley Bancshares. The proceeds were
allocated to participants in the ESOP from January 9, 1991 through October
12, 1992, which was the class period.
(continued)
12
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(5) RELATED PARTY TRANSACTIONS
The Company is the Plan administrator, as defined in the Plan, and
therefore, all Silicon Valley Bancshares common stock transactions
involving The Plan qualify as exempt party-in-interest transactions.
Certain Plan investments are shares of investment funds managed by BGI.
BGI is the current Plan trustee and custodian, as defined in the Plan, and
therefore, these transactions also qualify as exempt party-in-interest
transactions.
(6) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan or discontinue contributions, in accordance
with the plan document and under the provisions of ERISA, at any time and
for any reason. In the event of Plan termination, participants will become
fully vested in their Company 401(k) match and ESOP accounts.
(7) TAX STATUS
The Internal Revenue Service has determined and informed the company, by a
letter dated March 5, 1997, that the Plan, as amended, and related trust
are designed in accordance with applicable sections of the IRC. The Plan
has been further amended since receiving the determination letter to allow
for a participant's account to become fully vested upon a covered
termination, as defined in the Plan. The Plan administrator, based upon
the advice of legal counsel, believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC. Accordingly, no provision for income taxes is reflected in the
accompanying financial statements. Certain participants' contributions in
1997 and 1996 exceeded the annual addition limits imposed by the IRC.
These excess contributions have been returned to the participants as
taxable wages in 1998 and 1997.
(8) SUBSEQUENT EVENTS
Effective January 1, 1998, the Plan was amended to increase the maximum
pre-tax contribution from 5% to 7%. In addition, the required lump sum
distribution amount was increased from $3,500 to $5,000. Also, effective
January 1, 1998, Merrill Lynch became the Plan trustee. BGI remains a
trustee of the Plan's collective investment trusts: Lifepath Funds, S&P
500 Stock Fund, U.S. Government Money Market Fund and U.S. Treasury
Allocation Fund.
13
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
SILICON VALLEY BANCSHARES
Date: June 26, 1998 /s/ Jeannine Boettcher
-------------------------
Jeannine Boettcher
Vice President and
Plan Administrator
14
<PAGE>
EXHIBITS
23.1 Consent of Independent Auditors
The Administrative Committee
Silicon Valley Bank 401(k) and Employee Stock Ownership Plan:
We consent to the incorporation by reference in the registration statement
No. 33-60467 on Form S-8 of Silicon Valley Bancshares of our report dated
June 25, 1998 related to the statements of net assets available for benefits
of the Silicon Valley Bank 401(k) and Employee Stock Ownership Plan as of
December 31, 1997 and 1996, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1997, which
report appears in the December 31, 1997 annual report on Form 11-K of Silicon
Valley Bank 401(k) and Employee Stock Ownership Plan.
/s/ KPMG Peat Marwick LLP
San Francisco, California
June 25, 1998
15
