<PAGE>
As filed with the Securities and Exchange Commission on June 29, 1999
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] 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, 1998 and 1997
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.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 4
WITH FUND INFORMATION, DECEMBER 31, 1998 AND 1997
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 6
WITH FUND INFORMATION, YEAR ENDED DECEMBER 31, 1998
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
with fund information of the Silicon Valley Bank 401(k) and Employee Stock
Ownership Plan (the "Plan") as of December 31, 1998 and 1997, and the related
statement of changes in net assets available for benefits with fund information
for the year ended December 31, 1998. 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, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998 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 with fund information and the statement of
changes in net assets available for benefits with fund information 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 LLP
San Francisco, California
June 22, 1999
3
<PAGE>
SILICON VALLEY BANK 401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits with Fund Information
December 31, 1998 and 1997
<TABLE>
<CAPTION>
December 31, 1998
U.S.
Money AIM AIM Treasury Lifepath Lifepath Lifepath Lifepath
Market Intl. Constellation S&P 500 Allocation 2000 2010 2020 2030
Assets Account Equity Fund Stock Fund Fund Fund Fund Fund Fund
- ------ --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $339,878 $2,156 $3,181,804 $4,377,451 $1,477,427 $211,379 $731,088 $942,032 $641,256
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total investments 339,878 2,156 3,181,804 4,377,451 1,477,427 211,379 731,088 942,032 641,256
-------- ------- ----------- ----------- ----------- --------- --------- --------- --------
Receivables:
Participants'
contributions - - 403 235 276 3 2 1,499 3
Employer's
contributions - - 200 5 221 - - 800 -
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total receivables - - 603 240 497 3 2 2,299 3
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total assets 339,878 2,156 3,182,407 4,377,691 1,477,924 211,382 731,090 944,331 641,259
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Liabilities
Excess contributions
payable (233) - (472) (8,422) (199) - - - (53)
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Net assets available
for benefits $339,645 $2,156 $3,181,935 $4,369,269 $1,477,725 $211,382 $731,090 $944,331 $641,206
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998 U.S. Silicon
Davis Gov't Valley
Lifepath New York Money Bancshares Participant
2040 Venture Market Common Loan 1998
Assets Fund Fund Fund Stock Fund Account Total
- ------ ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $652,563 $21,082 $228,270 $15,309,335 $761,707 $28,877,428
-------- ------- -------- ----------- -------- -----------
Total investments 652,563 21,082 228,270 15,309,335 761,707 28,877,428
-------- ------- -------- ----------- -------- -----------
Receivables:
Participants'
contributions - - 1 256 7 2,685
Employer's
contributions 1 - - 74 - 1,301
-------- ------- -------- ----------- -------- -----------
Total receivables 1 - 1 330 7 3,986
-------- ------- -------- ----------- -------- -----------
Total assets 652,564 21,082 228,271 15,309,665 761,714 28,881,414
-------- ------- -------- ----------- -------- -----------
Liabilities
Excess contributions
payable (24) - - (172) - (9,575)
-------- ------- -------- ----------- -------- -----------
Net assets available
for benefits $652,540 $21,082 $228,271 $15,309,493 $761,714 $28,871,839
-------- ------- -------- ----------- -------- -----------
-------- ------- -------- ----------- -------- -----------
</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, 1998 and 1997
<TABLE>
<CAPTION>
December 31, 1997
U.S.
Money AIM AIM Treasury Lifepath Lifepath Lifepath
Market Intl. Constellation S&P 500 Allocation 2000 2010 2020
Assets Account Equity Fund Stock Fund Fund Fund Fund Fund
- ------ ----------------------------------------------------------------------------------
<S> <C> <C> <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 $656,094
-------- ------ ---------- ---------- ---------- -------- -------- --------
Total investments 21,856 - 2,383,432 3,147,287 1,031,007 163,417 638,980 656,094
-------- ------ ---------- ---------- ---------- -------- -------- --------
Receivables:
Participants'
contributions - - 10,310 708 2,420 543 1,399 2,544
Employer's
contributions - - 1,149 244 450 82 121 191
-------- ------ ---------- ---------- ---------- -------- -------- --------
Total receivables - - 11,459 952 2,870 625 1,520 2,735
-------- ------ ---------- ---------- ---------- -------- -------- --------
Total assets 21,856 - 2,394,891 3,148,239 1,033,877 164,042 640,500 658,829
-------- ------ ---------- ---------- ---------- -------- -------- --------
Liabilities
Excess contributions
payable (12) - (5,825) (2,807) (25) (5) (246) (5)
-------- ------ ---------- ---------- ---------- -------- -------- --------
Net assets available
for benefits $21,844 $ - $2,389,066 $3,145,432 $1,033,852 $164,037 $640,254 $658,824
-------- ------ ---------- ---------- ---------- -------- -------- --------
-------- ------ ---------- ---------- ---------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997 U.S. Silicon
Davis Gov't Valley
Lifepath Lifepath New York Money Bancshares Participant
2030 2040 Venture Market Common Loan 1997
Assets Fund Fund Fund Fund Stock Fund Account Total
- ------ --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Plan interest in Silicon
Valley Bank Retirement
Plans Master Trust $426,448 $425,122 $ - $24,674 $25,720,849 $735,528 $35,374,694
-------- -------- ------- -------- ----------- -------- -----------
Total investments 426,448 425,122 - 24,674 25,720,849 735,528 35,374,694
-------- -------- ------- -------- ----------- -------- -----------
Receivables:
Participants'
contributions 1,423 2,381 - 804 3,825 - 26,357
Employer's
contributions 161 530 - 466 1,465,626 - 1,469,020
-------- -------- ------- -------- ----------- -------- -----------
Total receivables 1,584 2,911 - 1,270 1,469,451 - 1,495,377
-------- -------- ------- -------- ----------- -------- -----------
Total assets 428,032 428,033 - 25,944 27,190,300 735,528 36,870,071
-------- -------- ------- -------- ----------- -------- -----------
Liabilities
Excess contributions
payable (266) (321) - (50) (409) - (9,971)
-------- -------- ------- -------- ----------- -------- -----------
Net assets available
for benefits $427,766 $427,712 $ - $25,894 $27,189,891 $735,528 $36,860,100
-------- -------- ------- -------- ----------- -------- -----------
-------- -------- ------- -------- ----------- -------- -----------
</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, 1998
<TABLE>
<CAPTION>
U.S.
Money AIM AIM Treasury Lifepath Lifepath Lifepath Lifepath
Market Intl. Constellation S&P 500 Allocation 2000 2010 2020 2030
Account Equity Fund Stock Fund Fund Fund Fund Fund Fund
--------------------------------------------------------------------------------------------
<S> <C> <C> <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 $ 12,443 $ 103 $ 492,695 $ 915,945 $ 64,977 $ 15,097 $ 79,538 $133,412 $104,315
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total investment
income/(loss) 12,443 103 492,695 915,945 64,977 15,097 79,538 133,412 104,315
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Contributions:
Employer - 353 105,573 141,797 28,759 6,387 13,009 21,901 17,532
Participants - 607 455,342 616,618 106,745 21,450 52,969 106,862 70,224
Rollovers - - 80,698 113,341 13,407 23,072 14,966 22,953 11,772
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total contributions - 960 641,613 871,756 148,911 50,909 80,944 151,716 99,528
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total additions 12,443 1,063 1,134,308 1,787,701 213,888 66,006 160,482 285,128 203,843
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Deductions from net assets
attributed to:
Benefits paid to
participants 463 - 162,414 423,730 111,202 1,847 850 48,906 11,864
Loan fees and other 7 - 1,457 1,732 792 82 177 296 246
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Total deductions 470 - 163,871 425,462 111,994 1,929 1,027 49,202 12,110
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Net increase (decrease)
prior to interfund transfers 11,973 1,063 970,437 1,362,239 101,894 64,077 159,455 235,926 191,733
Interfund transfers 305,828 1,093 (177,568) (138,402) 341,979 (16,732) (68,619) 49,581 21,707
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
Net increase (decrease) 317,801 2,156 792,869 1,223,837 443,873 47,345 90,836 285,507 213,440
Net assets available
for benefits:
Beginning of year 21,844 - 2,389,066 3,145,432 1,033,852 164,037 640,254 658,824 427,766
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
End of year $339,645 $2,156 $3,181,935 $4,369,269 $1,477,725 $211,382 $731,090 $944,331 $641,206
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
-------- ------ ---------- ---------- ---------- -------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
Davis Gov't Valley
Lifepath New York Money Bancshares Participant
2040 Venture Market Common Loan 1998
Fund Fund Fund Stock Fund Account Total
------------------------------------------------------------------
<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 $124,634 $ 3,636 $ 6,643 $(9,456,534) $ 71,062 $(7,432,034)
-------- ------- -------- ----------- -------- -----------
Total investment
income/(loss) 124,634 3,636 6,643 (9,456,534) 71,062 (7,432,034)
-------- ------- -------- ----------- -------- -----------
Contributions:
Employer 29,062 159 24,838 50,370 - 439,740
Participants 113,359 1,312 62,230 186,757 7 1,794,482
Rollovers 19,248 - 32,347 38,755 - 370,559
-------- ------- -------- ----------- -------- -----------
Total contributions 161,669 1,471 119,415 275,882 7 2,604,781
-------- ------- -------- ----------- -------- -----------
Total additions 286,303 5,107 126,058 (9,180,652) 71,069 (4,827,253)
-------- ------- -------- ----------- -------- -----------
Deductions from net assets
attributed to:
Benefits paid to
participant 62,444 - 15,353 2,253,912 61,271 3,154,256
Loan fees and other 321 - 91 1,551 - 6,752
-------- ------- -------- ----------- -------- -----------
Total deductions 62,765 - 15,444 2,255,463 61,271 3,161,008
-------- ------- -------- ----------- -------- -----------
Net increase (decrease)
prior to interfund transfers 223,538 5,107 110,614 (11,436,115) 9,798 (7,988,261)
Interfund transfers 1,290 15,975 91,763 (444,283) 16,388 -
-------- ------- -------- ----------- -------- -----------
Net increase (decrease) 224,828 21,082 202,377 (11,880,398) 26,186 (7,988,261)
Net assets available
for benefits:
Beginning of year 427,712 - 25,894 27,189,891 735,528 36,860,100
-------- ------- -------- ----------- -------- -----------
End of year $652,540 $21,082 $228,271 $15,309,493 $761,714 $28,871,839
-------- ------- -------- ----------- -------- -----------
-------- ------- -------- ----------- -------- -----------
</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. Assets of
the Plan are 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 assets of the Master
Trust are held by Merrill Lynch Trust Company ("Merrill Lynch").
(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 Merrill Lynch
to act as the trustee, custodian and recordkeeper of the Plan.
(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.
(d) CONTRIBUTIONS
Participants are allowed to contribute up to 7% of their pre-tax
compensation as defined in the Plan, up to the maximum amount allowable
under federal income tax regulations ($10,000 for 1998). 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.
7
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
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 1998 and 1997,
discretionary ESOP contributions of 0% and 10%, 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> <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.
(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
$445,115 and $337,942 for the years ended December 31, 1998 and 1997,
respectively. During 1998 and 1997, Company contributions to the Plan
were reduced by $77,625 and $538,912, respectively, due to forfeitures
from nonvested accounts. The remaining forfeiture balance at December
31, 1998 of $339,645, which is included in the money market account,
will be used to restore previously forfeited amounts or to reduce
future Company contributions to the Plan.
8
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(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 provide
varying degrees of risk and return. The fund options at December 31,
1998 and 1997 were:
1. U.S. Treasury Allocation Fund - Funds are invested in U.S.
Treasury bonds and notes, money market securities and U.S.
Treasury bills. The fund is managed by Barclays Global
Investors.
2. AIM International Equity Fund - Funds are invested in a
diversified portfolio of international equity securities. The
fund became available to participants on October 1, 1998 and
is managed by AIM Equity Funds, Inc.
3. AIM Constellation Fund - Funds are invested primarily in the
stocks of small and medium-size companies. The fund is managed
by AIM Equity Funds, Inc.
4. 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. The fund is managed by Barclays Global
Investors.
5. 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. The
funds are managed by Barclays Global Investors.
6. Davis New York Venture Fund - Funds are invested primarily in
securities targeted for growth of capital. The fund became
available to participants on October 1, 1998 and is managed by
Davis New York Venture Fund, Inc.
7. 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.
The fund is managed by Barclays Global Investors.
8. Silicon Valley Bancshares Common Stock Fund - Funds are
invested primarily in common stock of Silicon Valley
Bancshares. The fund is managed by Merrill Lynch.
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. Effective May 1,
1998, participants may change their investment elections under the Plan
and the MPP Plan at any time.
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. When a participant reaches age 55, they may direct
the investment of the balance in their ESOP account.
As of December 31, 1998 and 1997, the Plan owned 898,919 and 966,750
equivalent shares of Silicon Valley Bancshares common stock with a cost
basis of $9,799,129 and $9,946,542 and a fair market value of
$15,309,493 and $27,189,891, respectively.
The following table provides information on participant-directed and
non-participant-directed activity in 1998 for the Silicon Valley
Bancshares Common Stock Fund:
<TABLE>
<CAPTION>
Participant Non-Participant
Directed Directed Total
-------- -------- -----
<S> <C> <C> <C>
Balance at January 1, 1998 $1,091,466 $26,098,425 $27,189,891
Net depreciation in
fair value of investments (442,981) (9,013,553) (9,456,534)
Employer contributions 50,370 - 50,370
Participant contributions 186,757 - 186,757
Rollovers 38,755 - 38,755
Benefits paid to participants (83,521) (2,170,391) (2,253,912)
Loan fees and other expenses (663) (888) (1,551)
Interfund transfers (646,827) 202,544 (444,283)
---------- ----------- -----------
Balance at December 31, 1998 $ 193,356 $15,116,137 $15,309,493
---------- ----------- -----------
---------- ----------- -----------
</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, 1998 and
1997 range from 8.75% to 10% and from 9.25% to 10%, for each year
respectively. 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 $5,000 or less, distribution payment is a single
lump sum upon termination.
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.
(a) BASIS OF FINANCIAL STATEMENT PRESENTATION
The financial statements of the Plan are prepared using the accrual
method of accounting.
(b) 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,
liabilities, and changes therein, and disclosure of contingent assets
and liabilities at the date of the financial statements. Actual results
could differ from those estimates.
(c) 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.
(d) INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. The Plan's interest in
the Master Trust is valued at quoted market prices of the underlying
mutual funds, shares of collective investment funds and money market
funds, which represent the net asset value of shares held in the funds
at year end. The Silicon Valley Bancshares Common Stock Fund is valued
based on 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.
(e) 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 Merrill Lynch. At December 31, 1998 and 1997, the
Plan's interest in the assets of the Master Trust constituted
approximately 86% and 92%, respectively, 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
11
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
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.
The Master Trust had the following investments at December 31, 1998 and
1997:
<TABLE>
<CAPTION>
Investments, at fair value: 12/31/98 12/31/97
------------- -------------
<S> <C> <C>
Money Market Account $ 339,977 $ 29,346
AIM International Equity Fund 3,537 -
AIM Constellation Fund 4,402,528 3,281,838
S&P 500 Stock Fund 5,936,526 4,173,110
U.S. Treasury Allocation Fund 1,926,715 1,331,840
Lifepath 2000 Fund 272,782 205,139
Lifepath 2010 Fund 877,902 753,488
Lifepath 2020 Fund 1,250,094 867,698
Lifepath 2030 Fund 866,415 560,975
Lifepath 2040 Fund 916,177 582,274
Davis New York Venture Fund 47,623 -
U.S. Government Money Market Fund 374,915 50,138
Silicon Valley Bancshares Common Stock Fund 15,599,414 26,056,102
Participant Loan Account 761,707 735,528
------------- -------------
Total Assets $ 33,576,312 $ 38,627,476
------------- -------------
------------- -------------
</TABLE>
Investment income for the Master Trust for the year ended December 31,
1998 is as follows:
<TABLE>
<CAPTION>
Net appreciation/
(depreciation)
in fair value of Interest and
investments dividends
------------------ ------------
<S> <C> <C>
Money Market Account $ - $ 13,924
AIM International Equity Fund 96 42
AIM Constellation Fund 552,497 106,288
S&P 500 Stock Fund 1,224,963 -
U.S. Treasury Allocation Fund 86,612 -
Lifepath 2000 Fund 20,226 -
Lifepath 2010 Fund 105,909 -
Lifepath 2020 Fund 177,900 -
Lifepath 2030 Fund 138,883 -
Lifepath 2040 Fund 167,339 -
Davis New York Venture Fund 3,836 1,021
U.S. Government Money Market Fund - 10,507
Silicon Valley Bancshares Common Stock Fund (9,600,695) -
Participant Loan Account - 71,062
----------- --------
Total Investment Income (Loss) $(7,122,434) $202,844
----------- --------
----------- --------
</TABLE>
12
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(4) 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.
Investments are managed by Merrill Lynch. Merrill Lynch is the current
Plan trustee and custodian, as defined in the Plan, and therefore,
these transactions also qualify as exempt party-in-interest
transactions.
(5) STOCK SPLIT
On May 1, 1998 the Company's Board of Directors declared a two-for-one
stock split. The stock split has been reflected retroactively in the
Plan's financial statements. References as to December 31, 1997 common
shares in Note 1 reflect the stock split retroactively.
(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.
13
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
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 29, 1999 /s/ Christopher T. Lutes
--------------------------------------
Christopher T. Lutes
Executive Vice President and
Chief Financial Officer
14
<PAGE>
SILICON VALLEY BANK 401(k) AND
EMPLOYEE STOCK OWNERSHIP PLAN
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 22, 1999 related to the statements of net assets available for benefits
with fund information of the Silicon Valley Bank 401(k) and Employee Stock
Ownership Plan as of December 31, 1998 and 1997, and the related statement of
changes in net assets available for benefits with fund information for the
year ended December 31, 1998, which report appears in the December 31, 1998
annual report on Form 11-K of Silicon Valley Bank 401(k) and Employee Stock
Ownership Plan.
/s/ KPMG LLP
------------
San Francisco, California
June 22, 1999
