SVB Financial Group
SVB FINANCIAL GROUP (Form: DEF 14A, Received: 03/09/2012 17:08:39)
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant     x

Filed by a Party other than the Registrant     ¨

Check the appropriate box:

¨   Preliminary Proxy Statement   ¨   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))  
x   Definitive Proxy Statement  
¨   Definitive Additional Materials  
¨   Soliciting Material Pursuant to § 240.14a-12  

SVB FINANCIAL GROUP

(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)(1) and 0-11.
 

1)      Title of each class of securities to which transaction applies:

 

 

2)      Aggregate number of securities to which transaction applies:

 

 

3)      Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

4)      Proposed maximum aggregate value of transaction:

 

 

5)      Total fee paid:

 

¨   Fee paid previously with preliminary materials.
¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 

1)      Amount Previously Paid:

 

 

2)      Form, Schedule or Registration Statement No.:

 

 

3)      Filing Party:

 

 

4)      Date Filed:

 

 


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LOGO

Notice of Annual Meeting of Stockholders

Thursday, April 26, 2012

4:30 P.M.

TO THE STOCKHOLDERS:

I am pleased to invite you to attend the 2012 Annual Meeting of Stockholders of SVB Financial Group, a Delaware corporation (the “Company”), which will be held at the Company’s offices located at 3005 Tasman Drive, Santa Clara, California 95054, on Thursday, April 26, 2012 at 4:30 p.m., local time. The purposes of the meeting are to:

 

  1.

Elect twelve (12) directors to serve for the ensuing year and until their successors are elected.

 

  2.

Approve the Company’s 2006 Equity Incentive Plan, as amended and restated, to reserve an additional 2,100,000 shares of common stock for issuance thereunder.

 

  3.

Ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for its fiscal year ending December 31, 2012.

 

  4.

Hold an advisory (non-binding) vote on the Company’s executive compensation (“Say on Pay”).

 

  5.

Transact such other business as may properly come before the meeting.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. To assure your representation at the meeting, you are encouraged to vote your shares as soon as possible. Voting instructions are included in: (i) for those stockholders receiving printed proxy materials, the enclosed Proxy Card, and (ii) for all other stockholders, the Notice Regarding the Availability of Proxy Materials (as further described in the Proxy Statement). Any stockholder attending the meeting may vote in person even if such stockholder has previously voted.

Only stockholders of record at the close of business on February 28, 2012 may vote at the meeting or any postponement or adjournment thereof.

 

BY ORDER OF THE BOARD OF DIRECTORS,

/s/ Alex W. "Pete" Hart

Alex W. “Pete” Hart
Chairman of the Board

Santa Clara, California

March 7, 2012

 

YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, OR VOTE OVER THE TELEPHONE OR THE INTERNET AS PROMPTLY AS POSSIBLE, IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. IF YOU HAVE RECEIVED PRINTED PROXY MATERIALS, A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR YOUR CONVENIENCE. EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. WE ENCOURAGE YOU TO VOTE: (I) FOR THE ELECTION OF ALL TWELVE (12) NOMINEES FOR DIRECTOR, AND (II) IN FAVOR OF THE ABOVE REMAINING PROPOSALS.


Table of Contents

Proxy Statement—Table of Contents

 

    

 

Page

 

Information Concerning the Proxy Solicitation

     1   

Corporate Governance Principles and Board Matters

     5   

Proposal No. 1 Election of Directors*

     8   

Board Committees and Meeting Attendance

     20   

Proposal No. 2 - Approval of the 2006 Equity Incentive Plan, as Amended and Restated*

     22   

Report of the Audit Committee of the Board

     30   

Proposal No. 3 - Ratification of Appointment of Independent Registered Public Accounting Firm*

     31   

Principal Audit Fees and Services

     31   

Information on Executive Officers

     32   

Security Ownership of Directors and Executive Officers

     36   

Security Ownership of Principal Stockholders

     38   

Section 16(a) Beneficial Ownership Reporting Compliance

     38   

Proposal No. 4 Advisory (Non-Binding) Vote on the Company’s Executive Compensation*

     39   

Compensation Committee Report

     40   

Compensation Discussion and Analysis

     41   

Compensation for Named Executive Officers

     60   

Compensation for Directors

     74   

Certain Relationships and Related Transactions

     77   

Stockholder Proposals and Director Nominations

     80   

Copy of Bylaw Provisions

     81   

2011 Annual Report

     81   

Other Matters

     81   

Appendix A – 2006 Equity Incentive Plan

     A-1   

 

 

*

Indicates matters to be voted on at the Annual Meeting.


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Mailed to Stockholders on or about March 16, 2012

 

 

PROXY STATEMENT

OF

SVB FINANCIAL GROUP

3003 Tasman Drive

Santa Clara, California 95054

 

 

INFORMATION CONCERNING THE PROXY SOLICITATION

General

This Proxy Statement is furnished in connection with the solicitation of proxies by, and on behalf of, the Board of Directors (the “Board”) of SVB Financial Group (the “Company”) for use at the 2012 Annual Meeting of Stockholders of the Company to be held at the Company’s offices located at 3005 Tasman Drive, Santa Clara, California 95054 , on Thursday, April 26, 2012 at 4:30 p.m., local time, and at all postponements or adjournments thereof (the “Meeting”). (For directions to attend the Meeting in person, please contact us at the telephone number below.) Only stockholders of record on February 28, 2012 (the “Record Date”) will be entitled to vote at the Meeting. At the close of business on the Record Date, there were 43,788,864 shares of the Company’s Common Stock, $0.001 par value (the “Common Stock”), outstanding.

The Company is a Delaware corporation and financial holding company for Silicon Valley Bank (the “Bank”) and its affiliates. The Company’s principal executive offices are located at 3003 Tasman Drive, Santa Clara, California 95054, and its telephone number at that location is (408) 654-7400.

Important Notice Regarding the Availability of Proxy Materials for the Meeting

This Proxy Statement and our 2011 Annual Report on Form 10-K are available electronically at www.svb.com/proxy. See also “Delivery of Proxy Materials” below.

Voting

Stockholders of the Company’s Common Stock are entitled to one vote for each share held on all matters covered by this Proxy Statement, except for the election of directors. With respect to the election of directors, each stockholder has the right to invoke cumulative voting, which entitles each stockholder to as many votes as shall equal the number of shares held by such stockholder multiplied by the number of directors to be elected. A stockholder may cast all of his or her votes for a single candidate or distribute such votes among as many of the candidates as he or she chooses (up to a maximum of the number of directors to be elected). However, no stockholder shall be entitled to cumulate votes for a candidate unless such candidate’s name has been properly placed in nomination prior to the voting in accordance with Article Fifth of the Restated Certificate of Incorporation of the Company and the stockholder (or any other stockholder) has given notice at the meeting prior to the voting of the stockholder’s intention to cumulate votes. If any stockholder has given such notice, all stockholders may cumulate their votes for candidates properly placed in nomination. If cumulative voting is properly invoked, the Proxy holders (the individuals named on the Proxy Card) are given discretionary authority under the terms of the Proxy to cumulate votes represented by shares for which they are named Proxy holders as they see fit among the nominees in order to assure the election of as many of such nominees as possible.

Whether you hold shares in your name or through a broker, bank or other nominee, you may vote without attending the meeting. You may vote by granting a Proxy or, for shares held through a broker, bank or other nominee, by submitting voting instructions to that nominee. Instructions for voting by telephone, by using the Internet or by mail are on your Proxy Card or “Notice Regarding the Availability of Proxy Materials,” as applicable. For shares held through a broker, bank or other nominee, follow the voting instructions included

 

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with your materials. If you provide specific voting instructions, your shares will be voted as you have instructed for any item on which you provide instructions and as the Proxy holders may determine within their discretion for any other matters, including any additional matters, which properly come before the meeting.

If you hold shares in your name and you sign and return a Proxy Card without giving specific voting instructions, your shares will be voted as recommended by our Board on all matters set forth in this Proxy Statement and as the Proxy holders may determine in their discretion with respect to any other matters that properly come before the meeting. If you hold your shares through a broker, bank or other nominee and you do not provide instructions on how to vote, your broker or other nominee may have authority to vote your shares on certain matters. See “Quorum; Abstentions; Broker Non-Votes” below.

Quorum; Abstentions; Broker Non-Votes

The required quorum for the transaction of business at the Meeting is a majority of the shares of Common Stock issued and outstanding on the Record Date. Shares voted 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 Meeting (the “Votes Cast”) with respect to such matter.

The Company counts abstentions for purposes of determining both (i) the presence or absence of a quorum for the transaction of business, and (ii) the total number of Votes Cast with respect to a proposal (other than Proposal No. 1 regarding the election of directors). Accordingly, in cases other than the election of directors, abstentions will have the same effect as a vote against the proposal.

Broker non-votes occur on a matter when a broker, bank or other nominee is not permitted to vote on that matter without instructions from the beneficial owner and the beneficial owner does not give instructions. Without such voting instructions, for example, your broker or other nominee cannot vote your shares on “non-routine” matters such as the election of directors, the proposed amendment to the Company’s 2006 Equity Incentive Plan, and the advisory vote on Say on Pay. Your broker or other nominee may, however, have discretion to vote your shares on “routine” matters, such as the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2012 fiscal year. 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 proposals on which brokers, banks or other nominees are prohibited from exercising their discretionary authority.

Voting Required

The vote required for each proposal is as follows:

 

Proposal   Vote Required   Broker Non-
Votes Allowed
 

You

May Vote

Proposal No. 1 - Election of Directors

  Plurality of Votes Cast   No   FOR or WITHHOLD
Proposal No. 2 – Approval of the Company’s 2006 Equity Incentive Plan, as amended and restated   Majority of Votes Cast   No   FOR, AGAINST or ABSTAIN

Proposal No. 3 - Ratification of Auditors

  Majority of Votes Cast   Yes   FOR, AGAINST or ABSTAIN

Proposal No. 4 - Advisory Vote on Say on Pay

  Majority of Votes Cast   No   FOR, AGAINST or ABSTAIN

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 use. 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. A Proxy is also automatically revoked if the stockholder is present at the Meeting and votes in person.

 

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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, mailing and otherwise making available Proxy materials furnished by the Board of Directors to stockholders. 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, as requested. In addition to the solicitation of Proxies by mail, some of the officers, directors and employees of the Company 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:

 

   

“FOR” each of the Company’s nominees to the Board of Directors,

 

   

“FOR” approval of the Company’s 2006 Equity Incentive Plan, as amended and restated, to reserve an additional 2,100,000 shares of common stock for issuance thereunder,

 

   

“FOR” ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012,

 

   

“FOR” approval of an advisory (non-binding) proposal on the Company’s executive compensation (“Say on Pay”), and

 

   

At the Proxy holders’ discretion on such other matters, if any, as may properly come before the Meeting (including any proposal to adjourn the Meeting).

Delivery of Proxy Materials

In accordance with the rules adopted by the Securities and Exchange Commission (the “SEC”), commonly referred to as “Notice and Access,” we have decided to provide access to our Proxy materials over the internet instead of mailing a printed copy of the materials to every stockholder. Stockholders will not receive printed copies of the Proxy materials unless they request them. Instead, a Notice Regarding the Availability of Proxy Materials (the “Notice”) was mailed to stockholders of record (other than stockholders who previously requested electronic or paper delivery of proxy materials) on or about March 16, 2012. The Notice explains the process to access and review the information contained in the Proxy materials and how to vote their proxies over the internet. In addition, the Notice will provide you the option to instruct us to send our future Proxy materials to you electronically by email. All stockholders will have the ability to access the Proxy materials on a website referred to in the Notice or request to receive a printed set of the Proxy materials.

For those stockholders who will receive printed copies of the Proxy materials upon request or otherwise, you may receive more than one set of materials, including multiple copies of this Proxy Statement and multiple Proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one Proxy Card. Please follow the instructions on your Proxy Card(s) and vote accordingly.

How to Obtain a Separate Set of Proxy Materials

Stockholders may request to receive Proxy materials in printed form by mail or electronically by email on an ongoing basis. Stockholders who sign up to receive Proxy materials electronically will receive an email with links to the materials, which may give them faster delivery of the materials and will help save printing and mailing costs and conserve natural resources. If you choose to receive future Proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive Proxy materials by email will remain in effect until you terminate it.

For those stockholders who share an address with another stockholder, you may receive only one set of Proxy materials (including our 2011 Annual Report on Form 10-K, Proxy Statement or Notice Regarding the

 

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Availability of Proxy Materials, as applicable) unless you have provided contrary instructions. If you wish to receive a separate set of Proxy materials now or in the future, you may write or call us to request a separate copy of these materials from:

SVB Financial Group

3003 Tasman Drive

Santa Clara, California 95054

Attention: Lisa Bertolet, Stock Administration

Telephone: (408) 654-7400

Facsimile: (408) 496-2405

Email: lbertolet@svb.com

Similarly, if you share an address with another stockholder and have received multiple copies of our Proxy materials, you may write or call us at the above address and phone number to request delivery of a single copy of these materials.

 

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

We are committed to having sound corporate governance principles. These principles are important to the way in which the Company manages its business and to maintaining the Company’s integrity in the marketplace. Our Corporate Governance Guidelines and the charters of the Audit Committee, Compensation Committee, Directors’ Loan Committee, Finance Committee and Governance Committee of our Board of Directors are available at www.svb.com under “Corporate Governance.” The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.

Board Independence, Leadership and Risk Oversight

The Board has determined that, with the exception of Mr. Greg Becker, our President and Chief Executive Officer, all of our current directors and director nominees, are “independent” within the meaning of the director independence standards set by the Nasdaq Stock Market, Inc. (“Nasdaq”) and the SEC, as currently in effect.

Board Leadership – Separate Chairperson/CEO Roles

The Board has determined that it is in the best interests of the Company to maintain the Board chairperson and chief executive officer positions separately. It believes that having an outside, independent director serve as chairperson is the most appropriate leadership structure for the Board, as it enhances the Board’s independent oversight of management and the Company’s strategic planning, reinforces the Board’s ability to exercise its independent judgment to represent stockholder interests, and strengthens the objectivity and integrity of the Board. Moreover, an independent chairperson can more effectively lead the Board in objectively evaluating the performance of management, including the chief executive officer, and guide it through appropriate Board governance processes.

Mr. Pete Hart, our current Chairman of the Board, is independent within the meaning of the director independence standards described above. Mr. Hart will not be standing for election for the 2012-2013 term. Subject to his election, Mr. Roger Dunbar is expected to serve as the Board’s Chairman for the 2012-2013 term, and is also independent within the meaning of the director independence standards described above.

Risk Oversight

Oversight of risks to the Company is carried out by the Board as a whole and by each of its various committees. The Board receives periodic reports from management on the Company’s risk management, including, on at least an annual basis, an assessment of the Company’s top risks.

The Board has expressly delegated to the Governance Committee the primary oversight responsibility for the Company’s enterprise-wide risk management (“EWRM”) function, which is responsible for managing, on an enterprise-wide basis, the Company’s credit, market/liquidity, operational, legal/regulatory, strategic/reputation and other risks. On at least a quarterly basis, our Chief Strategy and Risk Officer reports to the Governance Committee on the EWRM function, including risk assessment and risk management. Based on management’s reports, the chairman of the Governance Committee reports to the Board any material changes or updates to the Company’s risk profile.

Additionally, each Board committee is engaged in overseeing the Company’s risks in its respective areas of oversight. For example, the Audit Committee regularly oversees our risks relating to our accounting and financial reporting. The Compensation Committee engages in periodic risk assessments to review and evaluate our compensation programs in relation to the Company’s risks. The Finance Committee actively oversees the Company’s capital, liquidity and financial management and the associated risks (whether as an ongoing matter or as it relates specifically to a transaction, such as an equity or debt securities offering). Moreover, the Directors’ Loan Committee routinely oversees the Company’s management of credit risks. Each of the

 

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committees regularly report back to the full Board on its risk oversight activities, and the Board routinely engages in discussions with management about the Company’s risks.

Executive Sessions

The Company’s independent directors meet in regularly scheduled executive sessions at which only independent directors are present. Mr. Becker is generally not present at these executive sessions, but will from time to time meet with the independent directors without other members of management present, at the Board’s discretion.

Committee Independence and Audit Committee Financial Experts

The Board has determined that each of the current members of the Audit Committee, Compensation Committee and Governance Committee are “independent” under Nasdaq director independence standards. 1

In addition, the Board has determined that Mr. Dunbar and Ms. Krishnan meet all of the attributes of an “audit committee financial expert,” as those meanings are defined for purposes of audit committee members by the applicable rules and regulations of the SEC and Nasdaq.

Board Evaluation

The Governance Committee of the Board conducts, in coordination with the full Board, an annual evaluation of the Board’s performance and effectiveness. Each year, the Governance Committee develops and implements a process for such evaluation and review, which may involve outside consultants or advisers and may include a review of how certain attributes affect Board effectiveness, such as Board size, meeting frequency, quality and timing of information provided to the Board, director communication, director education, director skills and qualifications, director independence and Board strategy sessions. The results of the evaluation are discussed with the Board. The Governance Committee also conducts annually a separate evaluation of the performance and effectiveness of each of the Board’s committees. See “Board Committees and Meeting Attendance—Committee Governance” below .

Consideration of Director Nominees

Stockholder Nominees

The Governance Committee will consider Board nominees proposed by stockholders. The Governance Committee has no formal policy with regard to stockholder nominees as it considers all nominees on their merits, as discussed below. Any stockholder nominations proposed for consideration by the Governance Committee should include the nominee’s name and qualifications for Board membership and should be addressed to:

SVB Financial Group

3003 Tasman Drive

Santa Clara, California 95054

Attn: General Counsel and Corporate Secretary

Facsimile: (650) 213-8278

 

1 From July to September 2011, the Company employed the college-aged son of Ms. Krishnan as a summer intern. His total compensation was $6,564. Ms. Krishnan was not involved in the Company’s decision to hire her son and, when she learned about the internship, she took appropriate steps to confirm that his employment did not affect her independence or create a conflict of interest. Due to an internal oversight, the Company failed to identify the internship as an issue that affected Ms. Krishnan’s independence under the audit committee independence rules until early 2012. At that time, the Company notified Ms. Krishnan, who offered to (and did) repay the amount previously received by her son. The Company considers this director to be an independent audit committee member.

 

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In addition, the bylaws of the Company permit stockholders to nominate directors for consideration at an annual stockholder meeting. For a description of the process for nominating directors in accordance with the bylaws, please see “ Stockholder Proposals and Director Nominations ” below.

Board Diversity; Selection and Evaluation of Director Candidates

While the Board has not formally adopted a policy governing board diversity, it recognizes the importance of assembling a body of directors that, taken together, has the experience, qualifications, skills and attributes appropriate for functioning effectively as a board. The Governance Committee, with the participation of the full Board, is primarily responsible for reviewing the composition of the Board and for identifying candidates for membership on the Board, all in light of the Company’s ongoing requirements, its assessment of the Board’s performance and any input received from stockholders or other key constituencies. The Governance Committee makes determinations as to whether to recommend directors for re-election or director candidates’ nomination to the Board based on their skills, character, judgment and business experience, as well as their ability to diversify and add to the Board’s existing strengths. The Governance Committee typically seeks an appropriate mix of individuals with diverse backgrounds and skills complementary to the Company’s business and strategic direction. This assessment typically includes issues of expertise in industries important to the Company (such as technology, life sciences, and premium wine), functional expertise in areas such as banking, global markets, venture capital, private equity, law, accounting, finance and information technology, and an assessment of an individual’s abilities to work constructively with the other Board members and management. The Governance Committee also seeks certain characteristics common to all Board members, such as integrity, strong professional reputation, record of achievement, collegiality and ability and commitment to devote sufficient time and energy to Board service.

The Governance Committee has not formally established any minimum qualifications for director candidates. All nominees to be considered at the Meeting were recommended by the Governance Committee.

Director Qualifications

The Board believes that each of its current directors and its director nominee possesses particular attributes which qualify him or her to serve on the Board. In addition to the attributes specifically identified for each director in his or her respective biography below, the Board believes that all of the directors possess the following attributes enabling the Board to function effectively as a collective body: integrity, collegial spirit, sound business judgment, professionalism, ability to generate public confidence, ability to act independently, and availability and commitment to serve.

Communications with the Board

Individuals who wish to communicate with the Company’s Board may do so by sending an e-mail to the Company’s Board at bod@svb.com . Any communications intended for non-management directors should be sent to the e-mail address above to the attention of the Board Chairman. Board-related communications are reviewed by the Chairman of the Board and shared with the full Board as he determines appropriate.

Code of Ethics

The Company has a Code of Ethics that applies to our principal executive officer and our senior financial officers, including our principal financial officer and principal accounting officer. A copy of this Code of Ethics is available on the Company’s website at www.svb.com under “Corporate Governance,” or can be obtained without charge by any person requesting it. To request a copy of our Code of Ethics, please contact: Lisa Bertolet, Stock Administration, SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054, at telephone (408) 654-7400.

The Company intends to disclose any waivers from or changes in its Code of Ethics by posting such information on our website. No waivers or substantive changes were made during fiscal year 2011.

 

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Proposal No. 1

ELECTION OF DIRECTORS

The Board of Directors Recommends a Vote “For” All Nominees

Pursuant to the Company’s bylaws, the Board of Directors shall consist of at least eight (8), but no more than thirteen (13) members, with the exact number to be fixed by the Board of Directors. As of the Record Date, the Board has fixed the number of authorized directors at thirteen (13), and as of the date of the Meeting, the number will be fixed at twelve (12).

Additionally, under the Company’s bylaws, the Board of Directors shall not have more than two directors who do not meet the definition of an “Outside Director.” An “Outside Director” is any director who meets the independence and experience requirements of the SEC and Nasdaq and who, in the opinion of the Board, has the ability to exercise independent judgment in carrying out the responsibilities of a director of the Company. Pursuant to the Board’s director term limit policy, Outside Directors may not serve more than nine (9) consecutive one-year terms (excluding any partial time served); provided, however, that if in any one year, more than two (2) Outside Directors would be required to end their service on the Board of Directors because of the application of the term limit, the Board of Directors may at its discretion extend the term of one or more such directors for successive one year terms so as to avoid requiring more than three Outside Directors to end their service in any one year. Any Outside Director who has served the maximum term or resigned prior to serving the maximum term may be eligible to stand for election for another maximum term after a one-year waiting period, during which the director may serve as an advisory director. This term limit policy does not apply to the position of the Chairman of the Board.

Nominees for Director

All Proxies will be voted “FOR” the election of the following twelve (12) nominees recommended by the Board of Directors for a term of one year, unless authority to vote for the election of directors (or for any particular nominee) is withheld. With the exception of Messrs. Staglin and Maggioncalda, all of the nominees have served as directors of the Company since the last annual meeting of stockholders in April 2011. Mr. Staglin served as an advisory director of the Board in a non-voting capacity from February 2011 until his election to the Board in August 2011. Mr. Maggioncalda has been serving as an advisory director of the Board since October 2011.

All incumbent directors, except Messrs. Hart and Hardymon, are nominees for re-election to the Board. Messrs. Hart and Hardymon have fulfilled their director terms and will not be standing for re-election.

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. As of the date of this Proxy Statement, 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 stockholders and until their successors are elected and qualified, or until their earlier death, resignation or removal.

 

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The following information outlines the name and age of each nominee for director (as of the Record Date), his or her current principal occupation, followed by the biographical information for each such nominee:

 

Name

  

Age

  

Year First
Elected by
Stockholders

  

Principal Occupation    

Greg W. Becker

   44    2011   

President and Chief Executive Officer, SVB Financial Group and Silicon Valley Bank

Eric A. Benhamou

   56    2005   

Chairman and Chief Executive Officer, Benhamou Global Ventures, LLC

David M. Clapper

   60    2005   

Chief Executive Officer, Minerva Surgical, Inc.

Roger F. Dunbar

   66    2005   

Chairman-Elect, SVB Financial Group (2012-2013 term) Retired, Former Global Vice Chairman, Ernst & Young, LLP

Joel P. Friedman

   64    2005   

Retired, Former President, Business Process Outsourcing, Accenture

C. Richard Kramlich

   76    2005   

Chairman, Co-Founder and General Partner, New Enterprise Associates

Lata Krishnan

   51    2008   

Chief Financial Officer, Shah Capital Partners

Jeffrey N. Maggioncalda*

   43    ---   

President and Chief Executive Officer, Financial Engines

Kate D. Mitchell

   53    2010   

Co-Founder and Managing Director, Scale Venture Partners

John F. Robinson

   65    2011   

Former Deputy Comptroller of the Currency and former Executive Vice President, Washington Mutual Bank

Garen K. Staglin

   67    ---   

Proprietor, Staglin Family Vineyards

Kyung H. Yoon

   56    2007   

Chief Executive Officer, Talent Age Associates LLC

 

*Currently

an advisory director

 

 

Director Biographies

 

Greg W. Becker    Board Committees:    Independent:
  

N/A

  

No

Mr. Becker was appointed the President and Chief Executive Officer of the Company and the Bank in April 2011. He first joined the Company in 1993 as part of the Northern California Technology Division, and since then, has served in a number of executive and senior management positions with the Company, including Chief Banking Officer (2002-2003), Chief Operating Officer (2003-2008) and President of Silicon Valley Bank (since 2008).

 

Private

Directorships:

  

• Silicon Valley Leadership Group, a non-profit organization with an emphasis on issues of importance to employers, employees and residents of Silicon Valley (since 2011)

 

• Bay Area Council, a public policy advocacy organization (since 2011) (as director and executive committee member)

Other Prior

Experience:

  

• President, Board of Trustees, Silicon Valley and Monterey Bay Area Chapter of the Leukemia & Lymphoma Society (2004 – 2011)

Mr. Becker holds a bachelor’s degree in Finance from Indiana University.

The Board believes that Mr. Becker possesses specific attributes which qualify him to serve on the Board, including his experience as an executive officer of the Company and his extensive experience with the Company and within the banking industry working with public and private technology, life science and venture capital clients.

 

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Eric A. Benhamou    Board Committees:   Independent:
  

•    Governance,  Chair

 

Yes

  

•    Finance

 

Mr. Benhamou is Chairman and CEO of Benhamou Global Ventures, LLC, which he founded in 2003. Benhamou Global Ventures, LLC invests and plays an active role in innovative high tech firms throughout the world. He also sits on various public and private technology company boards, and serves a variety of educational and philanthropic organizations.

 

Public

Directorships:

  

• Chairman, Cypress Semiconductor, a semiconductor company (since 1993)

 

• RealNetworks, Inc., creator of digital media services and software (since 2003)

Private

Directorships:

  

• SwiftTest, Inc., a commercial IP network testing tool developer (since 2010)

 

• Purewave, Inc., a developer of outdoor compact base stations for the 4G marketplace (since 2010)

 

• ConteXtream, a carrier equipment vendor for intellectual property based media services (since 2007)

 

• Finjan Corporation, a global provider of proactive web security solutions (since 2006)

Other

Experience:

  

• Executive committee member, Stanford University School of Engineering

 

• Executive committee member, Ben Gurion University of Negev

 

• Visiting professor, INSEAD Business School

 

• Chairman of the Israel Venture Network, a venture philanthropy organization for a stronger Israeli society

Prior

Directorships:

  

• Chairman, 3Com Corporation, a public networking solutions provider (1990-2010)

 

• Voltaire Ltd., a public grid computing network solutions company (2007 – 2011)

 

• Dasient, a security company that provides malware detection and prevention solutions (2010-2011)

 

• Chairman of the Board of Directors of Palm, Inc., a public mobile products provider (1999-2007)

 

• Other private directorships: Atrica, Go Networks, WisdomArk (various dates from 2000-2008)

Other Prior

Experience:

  

• Interim Chief Executive Officer of Palm, Inc. (2001-2003)

 

• Chief Executive Officer, 3Com Corporation (1990- 2000), and other various senior management positions

 

• Executive committee member, Computer Science and Telecommunications Board (CSTB) (2003-2008)

 

• Co-founder and Vice President of Engineering, Bridge Communications (1981-1987)

 

• Member, US-Israel Science and Technology Commission (2003)

 

• Executive committee member, TechNet

Mr. Benhamou holds an engineering degree from l’École Nationale Supérieure d’Arts et Métiers in Paris, France, a master’s degree in Science from the School of Engineering at Stanford University and several honorary doctorates.

The Board believes that Mr. Benhamou possesses specific attributes which qualify him to serve on the Board, including his experience with both public and private technology companies (as part of management and/or as a director and investor), as well as his experience in the global markets, particularly in Israel and Europe.

 

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David M. Clapper    Board Committees:    Independent:
  

•    Audit

   Yes
  

•    Directors’ Loan

  

Mr. Clapper has been the Chief Executive Officer of Minerva Surgical since May 2011. He has had an extensive career in the healthcare and medical device industries, including serving as the President and Chief Executive Officer (2005-2008) of SurgRx, Inc., a privately held medical device manufacturer, until its acquisition by Ethicon Endo-Surgery in 2008, as well as a variety of public and private company directorships.

 

Private

Directorships:

  

• Neomend, a designer of surgical sealants and adhesion prevention products (since 2010)

 

• Arqos Surgical, Inc., a technology holding company (since 2011)

 

• IOGYN, Inc., a medical device company, (since 2011)

 

• CORRX, Inc., a medical device company, (since 2011)

 

• Corinth Medical, a medical device company, (since 2011)

 

• RELIGN Corporation, a medical device company, (since 2011)

 

• MOSIAX, Inc., a medical device company, (since 2011)

Prior

Directorships:

  

• Baxano, a private medical device manufacturer (2009-2011)

 

• Dfine, Inc., a private electrosurgical system developer (2007-2011)

 

• Sierra Surgical Technologies, a private surgical device company (2007-2011)

 

• Pulmonx, a private medical device company (2003-2006)

 

• Conor Medsystems, a public developer of drug delivery technology (2004-2007)

 

• St. Francis Medical Technology, a private medical device manufacturer (2006)

 

• Novacept, a private medical device company (1999-2004)

 

• Focal, Inc., a public company developer of surgical sealants (1994 to 1999)

Other Prior

Experience:

  

• President and Chief Executive Officer, Novacept (1999-2004)

 

• President and Chief Executive Officer, Focal, Inc. (1994 to 1999)

 

• Various management positions at Johnson & Johnson, a public company provider of professional consumer health care products and services (1977-1993)

Mr. Clapper holds a bachelor’s degree in Marketing from Bowling Green State University.

The Board believes that Mr. Clapper possesses specific attributes which qualify him to serve on the Board, including his experience with both public and private life science companies (as part of management and/or as a director).

 

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Roger F. Dunbar    Board Committees:    Independent:
  

•    Audit, Chair

   Yes
  

•    Finance

  
  

•    Governance

  

Mr. Dunbar is our current Chairman-Elect of the Company’s Board of Directors. Subject to his election, he is expected to serve as our Board Chairman during the 2012-2013 director term. Mr. Dunbar retired from Ernst and Young in 2004, where he served in a variety of positions since 1974, including key leadership positions.

 

Private

Directorships:

  

• Desert Mountain Property, Inc.

 

• Desert Mountain Club, Inc.

Prior

Experience

with Ernst &

Young:

  

• Global Vice Chairman, Strategic Growth Markets and Venture Capital (2000-2004)

 

• Member, Global Practice Council (2000-2004)

 

• Member, Global Management Committee (2000-2004)

 

• Member of US Area Managing Partners Leadership Group (1998-2000)

 

• Client Service Partner and other key positions, including Partner-in-Charge and Area Managing Partner, Silicon Valley and the Pacific Northwest Area (1974-2000)

Prior

Directorships:

  

• Advisory Board Member, SVB Financial Group and Silicon Valley Bank (2001-2004)

Other Prior

Experience:

  

• Teacher, Santa Clara University’s Graduate School of Business

 

• Teacher, Ernst & Young’s National Education Program

 

• Advisory Boards, Santa Clara University and Cal Poly San Luis Obispo

 

• Joint Venture Silicon Valley’s 21 st Century Education Board

 

• U.S. Naval Officer (1967-1980)

Mr. Dunbar holds a bachelor’s degree in Business from San Francisco State University and holds a master’s degree in Business Administration from Santa Clara University.

The Board believes that Mr. Dunbar possesses specific attributes which qualify him to serve on the Board, including his management experience with a nationally-recognized independent auditing firm, his prior accounting and audit experience with both public and private companies, his prior experience working with venture capital firms, and his strategic and operational experience in global markets, particularly in the United Kingdom and Israel.

 

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Joel P. Friedman    Board Committees:    Independent:
  

•    Finance, Chair

   Yes
  

•    Governance

  

Mr. Friedman retired from Accenture, a public company global management consulting firm in 2005, where he held the position of President of the Business Process Outsourcing (“BPO”) organization. Over the course of his 34-year career with Accenture, Mr. Friedman held a variety of senior leadership roles.

 

Public

Directorships:

  

• NeuStar, a provider of essential clearinghouse services to the communications industry (since 2006)

Private

Directorships:

  

• Advisory Director, FTV Capital (formerly Financial Technology Ventures), (since 2005)

 

• Community Gatepath, a non-profit organization dedicated to enabling persons with disabilities to live as fully integrated members of the community (since 1991)

Prior

Experience

with

Accenture:

  

• President of the Business Process Outsourcing (“BPO”) organization

 

• Managing Partner, Banking and Capital Markets

 

• Managing General Partner, Accenture Technology Ventures

 

• Founder, Accenture strategy consulting practice

Prior

Directorships:

  

• EXL Service (Advisory Director), a provider of offshore business process outsourcing solutions (2008-2011)

 

• Endeca Technologies, Inc., a provider of enterprise search solutions (2006-2011) (acquired by Oracle)

 

• Junior Achievement of Northern California, a non-profit organization that assists young people understand the economics of life (2004-2010)

  

• Accenture, a global management consulting firm (2001-2005)

 

• Seisint, Inc.

 

• Calico Commerce, Inc.

 

• Rivio Inc.

 

• TheBrain Technologies

Other Prior

Experience:

  

• Dean’s Advisory Council for Stanford Graduate School of Business (1998-2004)

Mr. Friedman holds a bachelor’s degree in Economics from Yale University and a master’s degree in Business Administration from Stanford University.

The Board believes that Mr. Friedman possesses specific attributes which qualify him to serve on the Board, including his management experience with a nationally-recognized global consulting firm that involved work with venture capital funds, the banking industry and capital markets.

 

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C. Richard Kramlich    Board Committees:    Independent:
  

•    Compensation

   Yes
  

•    Finance

  

Mr. Kramlich is Chairman, Co-Founder and General Partner of New Enterprise Associates (“NEA”), a venture capital firm founded in 1978. Prior to founding NEA, Mr. Kramlich held a variety of senior management positions with financial services firms.

 

Public

Directorships:

  

• Zhone Technologies, provider of broadband access equipment (since 1999) Sierra Monitor Corporation, provider of hazardous gas detection systems (since 1984)

Private

Directorships:

  

• Tabula, a semiconductor company (since 2005)

 

• Visual Edge Technologies, an imaging solutions company (since 2002)

 

• Xoom, a money transfer company (since 2004)

 

• TriAlpha Energy, a nuclear fusion research company (since 2006)

 

• Movius, a messaging, collaboration and mobile media solutions company (since 2007)

Prior

Directorships:

  

• Financial Engines, an investment advisory firm (1997-2011)

 

• Silicon Graphics

 

• 3Com Corporation (acquired by Hewlett-Packard)

 

• Healtheon/WebMD

 

• Immunex (acquired by Amgen)

 

• Juniper Networks

 

• Macromedia (acquired by Adobe)

 

• Semiconductor Manufacturing International

 

• Celetronix (acquired by Jabil)

 

• Decru (acquired by NetApp)

 

• Chalone Wine Group (acquired by Diageo)

 

• Ascend Communications (acquired by Lucent Technologies)

 

• Dallas Semiconductor (acquired by Maxim Integrated Products)

 

• Foveon (acquired by Sigma Corporation)

 

• InfoGear (acquired by Cisco Systems)

 

• NetSolve (acquired by Cisco Systems)

 

• NEXT HOP (acquired by U4EA Technologies)

  

• MaxiScale Technology

 

• Fabric7 Systems

 

• Informative (acquired by Satmetrix, Inc.)

 

• Kor Technology, an aerospace defense technology company (acquired by Mercury Computer) (2006-2011)

 

• Force10 Networks (acquired by Dell Inc.) (2000-2011)

Other Prior

Experience:

  

• General Partner, Arthur Rock & Associates (1969-1977)

 

• Executive Vice President, Gardner & Preston Moss (1964-1969)

 

• Chairman and President, National Venture Capital Association

Mr. Kramlich holds a bachelor of science degree in History from Northwestern University and a master’s degree in Business Administration from Harvard University.

The Board believes that Mr. Kramlich possesses specific attributes which qualify him to serve on the Board, including his extensive experience as a co-founder and partner of a prominent venture capital firm and his experience investing and serving as a director on a variety of public and private companies, as well as his experience in global markets, particularly in China.

 

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Lata Krishnan    Board Committees:    Independent:
     •    Audit    Yes
     •    Directors’ Loan     

Ms. Krishnan is the Chief Financial Officer of Shah Capital Partners (“Shah Capital”), a leading mid-market technology private equity fund that she joined upon its inception in 2003. Prior to joining Shah Capital, Ms. Krishnan held various corporate accounting and finance positions with leading financial firms.

 

Private Directorships:   

• Chair, American India Foundation, an organization dedicated to accelerating social and economic development in India (since 2001)

 

• The Commonwealth Club, a public affairs forum (since 2004)

 

• Enlighted, Inc., an information technology consulting firm (since 2010)

Other Experience:   

• Fellow, American Leadership Forum (since 1998)

Prior Directorships:   

• TiE, a non-profit global network of entrepreneurs and professionals

 

• Global Heritage Fund, an international heritage conservancy (2009-2011)

 

• CEO Women, an organization to create economic opportunities for low-income immigrant and refugee women (2009-2011)

 

• America’s Foundation for Chess, a foundation committed to children’s education (2003-2011)

 

• Global Philanthropy Forum, a council on world affairs (2006-2011)

 

• Narika, a shelter for abused women in the Asian community (1998-2011)

Other Prior Experience:   

• Co-Founder and Chief Financial Officer, SMART Modular Technologies, Inc., a manufacturer of computer memory modules (1989-1999)

 

• Various corporate accounting and finance positions with Montgomery Services

 

• Various corporate accounting and finance positions with Arthur Andersen & Company LLP

 

• Various corporate accounting and finance positions with Hill Vellacott & Company in London

Ms. Krishnan holds a bachelor of science degree with honors from the London School of Economics and is a member of the Institute of Chartered Accountants in England and Wales.

The Board believes that Ms. Krishnan possesses specific attributes which qualify her to serve on the Board, including her financial background and experience with a leading technology private equity fund, as well as her experience in global markets, particularly in India.

 

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Jeffrey N. Maggioncalda    Board Committees:    Independent:
  

•    Directors’ Loan, Advisory Member

   Yes

Mr. Maggioncalda is the President and Chief Executive Officer of Financial Engines, an independent investment advisory firm. Mr. Maggioncalda has served in this role since Financial Engines’ inception in 1996.

 

Prior Directorships:   

• Affinity Circles, a social networking developer

Other Prior Experience:   

• Associate, Cornerstone Research, an economic and financial consulting firm (1991-1994)

Mr. Maggioncalda holds a bachelor’s degree in Economics and English from Stanford University and a master’s degree in Business Administration from Stanford University.

The Board believes that Mr. Maggioncalda possesses specific attributes which qualify him to serve on the Board, including his financial services experience, as well as his experience managing a newly-public company.

 

 

 

Kate D. Mitchell    Board Committees:    Independent:
  

•    Compensation,  Chair

   Yes
  

•    Audit

  

Ms. Mitchell is Managing Partner and Co-Founder of Scale Venture Partners (“Scale”), a venture capital firm where she leads investments in software and business services and is instrumental in building the firm’s team and strategic direction. Prior to founding Scale in 1996, Ms. Mitchell held a variety of senior management positions with Bank of America.

 

Private Directorships:   

• Jaspersoft, Inc., a manufacturer of business intelligence software (since 2009)

 

• mBlox, Inc., a mobile transaction network provider (since 2010)

Other Experience:   

• Silicon Valley Bank Venture Capital Advisory Board (since 2008)

Prior Directorships:   

• Acusphere, Inc., public pharmaceutical company (1999-2005)

 

• Songbird Medical (1998-2005)

 

• Tonic Software, Inc. (2000-2005)

 

• Wayport, Inc. (2000-2008)

 

• Pavilion Technologies, Inc. (2004-2007)

 

• Friends of the San Francisco Public Library (2007-2010)

 

• Chairman, National Venture Capital Association (2010-2011)

 

• Member of National Venture Capital Association Executive Committee (2007-2011)

Other Prior Experience:   

• Various senior management positions (including Senior Vice President), Bank of America

Ms. Mitchell holds a bachelor’s degree in Political Science from Stanford University and a master’s degree in Business Administration from Golden Gate University.

The Board believes that Ms. Mitchell possesses specific attributes which qualify her to serve on the Board, including her extensive experience as a co-founder and partner of a prominent venture capital firm, her experience investing and serving as a director on a variety of public and private companies, and her prior banking experience.

 

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John F. Robinson    Board Committees:    Independent:
  

•    Audit

   Yes
  

•    Compensation

  
  

•    Directors’ Loan

  

Mr. Robinson is a former Executive Vice President of Washington Mutual Bank, a financial lending institution. Prior to his position with Washington Mutual, Mr. Robinson served with the Office of the Comptroller of the Currency as a Deputy Comptroller.

 

Private

Directorships:

  

• Federal Home Loan Bank of San Francisco (since 2011)

 

• Operation HOPE, a non-profit organization focusing on economic improvements for poverty-stricken people in America (since 2004)

Other

Experience:

  

• National Outdoor Leadership School Advisory Committee (since 2007)

Prior

Directorships:

  

• Federal Home Loan Bank of San Francisco (2004-2005 and 2007-2008)

• Long Beach Mortgage Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006)

 

• Long Beach Securities Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006)

Other Prior

Experience:

  

• Executive Vice President, Washington Mutual Bank, a financial lending institution (2002-2008)

 

• Deputy Comptroller, Office of the Comptroller of the Currency (1997-2002)

Mr. Robinson holds a bachelor’s degree in Business Administration from Washington University in St. Louis and a master’s degree in Business Administration from Harvard University. He is also a Chartered Financial Analyst (CFA).

The Board believes that Mr. Robinson possesses specific attributes which qualify him to serve on the Board, including his extensive prior banking, regulatory and risk management experience.

 

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Garen K. Staglin    Board Committees:    Independent:
  

•    Directors’ Loan

  

Yes

  

•    Governance

  

Mr. Staglin is the founder and proprietor of Staglin Family Vineyard, founded in 1985 in the Rutherford region of Napa Valley. Over the past 40 years, Mr. Staglin has also held a variety of positions in the financial and insurance services industry.

 

Public

Directorships:

  

• EXL Services, a provider of outsourcing services to global companies (since 2005)

 

• Bottomline Technologies, a provider of payment and invoice automation software and services (since 2007)

Private

Directorships:

  

• Specialized Bicycle, a manufacturer of cycling equipment (since 1995)

 

• Chairman, Free Run Technologies, an internet and technology services company (since 2003)

  

• Senior Advisor and Advisory Director, FTV Capital (formerly Financial Technology Ventures), (since 2004)

 

• Vice Chairman, Profit Velocity Solutions, a manufacturing analytics firm (since 2007)

 

• Nvoice Payments, an electronic payment service provider (since 2010)

Other

Experience:

  

• Founder and President, International Mental Health Research Organization, devoted to raising awareness and funding research to find a cure for major mental illnesses

 

• Founder and President, Bring Change 2 Mind, an organization devoted to removing the stigma associated with mental illness

 

• Founder and Co-Chairman, One Mind 4 Research, a non-profit organization devoted to accelerating cures and treatments for all brain disorders

Prior

Directorships:

  

• Solera Holdings, Inc., an automotive insurance software service provider (2005-2011)

Mr. Staglin holds a bachelor’s degree in Engineering-Electrical and Nuclear from the University of California, Los Angeles and a master’s degree in Business Administration, Finance and Systems Analysis from Stanford University Graduate School of Business.

The Board believes that Mr. Staglin possesses specific attributes which qualify him to serve on the Board, including his experience servicing a variety of public and private company boards and his in-depth experience within the wine industry.

 

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Kyung H. Yoon    Board Committees:    Independent:
  

•    Compensation

  

Yes

  

•    Directors’ Loan

  

Ms. Yoon is currently the Chief Executive Officer of Talent Age Associates LLC, a global talent management firm focused on board, executive recruitment, leadership development, training, coaching and interim financial services, serving venture and private equity backed companies and multinational corporations. She has held this position since December 2008.

 

Private

Directorships:

  

• Asia America MultiTechnology Association (“AAMA”), a business network promoting technology enterprises (since 2003)

 

• Asia Society of Northern California (since 2007)

Other

Experience:

  

• Stanford University’s SPRIE Greater China Networks Project Advisory Board (since 2004)

Prior

Directorships:

  

• Harvard University’s John F. Kennedy School of Government Women’s Leadership Board

 

• Board of Trustees, San Jose Museum of Art

 

• Advisory Board, Affinity Circles

 

Other Prior

Experience:

  

• Vice Chairman and other various leadership roles, Heidrick & Struggles, an executive search and leadership consulting firm (from 1994 to 2008)

 

• President, Benten Investments, Inc.

 

• President, Pacific Union Asset Management

 

• Vice President, Dillingham Development Company

 

• Vice President, Banque Nationale de Paris

Ms. Yoon holds a bachelor’s degree in Economics and French Literature from Goucher College in Baltimore, Maryland and a master’s degree in Business Administration in Finance and Marketing from the University of Chicago.

The Board believes that Ms. Yoon possesses specific attributes which qualify her to serve on the Board, including her management experience with a global management firm, as well as her experience in global markets, particularly in Asia.

 

 

Vote Required

The twelve (12) 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.

 

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BOARD COMMITTEES AND MEETING ATTENDANCE

As of the date of this Proxy Statement, the Company’s Board has the following committees, each of which meets on a regular basis: (1) Audit Committee, (2) Compensation Committee, (3) Directors’ Loan Committee, (4) Finance Committee and (5) Governance Committee.

During fiscal year 2011, the Board held eight (8) meetings. Each director attended or participated telephonically in 75% or more of the total number of meetings of the Board, and of the committees on which he or she served, which were held during the period for which he or she was a director or committee member. It is the Board’s policy that each director employs his or her best efforts to attend each of the Company’s annual stockholder meetings. All Board members with the exception of Mr. Hardymon and Ms. Krishnan attended the Annual Meeting of Stockholders in 2011.

Committee Members and Meetings

The following table provides membership and meeting information for each of the Board’s committees as of the date of this Proxy Statement:

 

Name  

Audit
Committee

   

Compensation
Committee

   

Directors’ Loan
  Committee  

   

Finance
Committee

   

Governance
Committee

 

Eric A. Benhamou

        ü          ü C   

David M. Clapper

  ü          ü         

Roger F. Dunbar

    ü C          ü        ü     

Joel P. Friedman

          ü C      ü     

G. Felda Hardymon (1)

        ü        ü     

Alex “Pete” Hart (1)

    ü          ü C       

C. Richard Kramlich

    ü          ü       

Lata Krishnan

  ü          ü         

Jeffrey N. Maggioncalda

        ü *       

Kate D. Mitchell

  ü          ü C         

John F. Robinson

  ü        ü        ü         

Garen K. Staglin

      ü          ü     

Kyung H. Yoon

    ü        ü         

 

Number of meetings held during 2011

    12        11        4        8        4   

 

  C

Committee chair

  *

Advisory Committee Member

  (1)

Messrs. Hardymon and Hart will serve on the Board of Directors and the above indicated Board Committees until the completion of their director terms on April 26, 2012.

Committee Governance

The Governance Committee, in coordination with the Board, implements and develops a process to conduct an annual assessment of committee performance and effectiveness, which includes a self-assessment by each committee and a performance review of each committee by non-committee members. The review includes an evaluation of various areas that may include committee sizes, committee composition, committee performance, committee coordination with one another and committee involvement of the full Board. The results of the committee performance assessment are reviewed by each committee, as well as by the Governance Committee, and discussed with the full Board.

Each committee’s charter addresses its purpose and responsibilities and contains other provisions relating to, among other matters, the committee’s organization and meeting requirements. Pursuant to the committee

 

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charters, all committees may, in their discretion, form and delegate all or a portion of their authority to subcommittees. Each committee’s charter requires the committee to annually review and assess its charter’s content and sufficiency, with final approval of any proposed changes required by the full Board. Stockholders and other interested persons may view a copy of each committee’s charter on our website, www.svb.com under “Corporate Governance”.

Committee Responsibilities

The oversight responsibilities of the Board’s committees are as follows:

Audit Committee

 

   

The Company’s corporate accounting and financial reporting processes and the quality and integrity of the Company’s financial statements and reports.

 

   

The selection, engagement and termination of the Company’s independent auditors.

 

   

The qualification, independence and performance of the Company’s independent auditors.

 

   

The Company’s internal auditing function and other risk management functions, including the Company’s security program.

Compensation Committee

 

   

The overall compensation strategies, plans, policies and programs of the Company.

 

   

The approval of director and executive compensation.

 

   

The assessment of compensation-related risks.

Directors’ Loan Committee

 

   

The credit and lending strategies, objectives and risks of the Company and the Bank.

 

   

The credit management and lending practices of the Company and the Bank, including reviewing internal credit policies and establishing portfolio limits.

 

   

The quality and performance of the credit portfolio of the Company and the Bank.

Finance Committee

 

   

The financial strategies and objectives of the Company and the Bank.

 

   

The financial risk management of the Company and the Bank.

 

   

The capital and liquidity management of the Company and the Bank.

 

   

The review of the Company and Bank’s financial performance and compliance with applicable financial regulatory requirements.

 

   

The review of certain corporate development matters, such as proposed mergers and acquisitions.

Governance Committee

 

   

The Company’s general corporate governance practices, including review of the Company’s Corporate Governance Guidelines.

 

   

The annual performance review of the Company’s Board and its committees.

 

   

The identification and nomination of director candidates.

 

   

The Company’s risk control functions, including regulatory compliance and enterprise-wide risk management.

 

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Proposal No. 2

APPROVAL OF THE 2006 EQUITY INCENTIVE PLAN, AS AMENDED AND RESTATED

The Board of Directors Recommends a Vote “For” Approval of

the Amended and Restated 2006 Equity Incentive Plan

 

 
EXECUTIVE SUMMARY OF PROPOSAL AND SELECTED PLAN AND FINANCIAL INFORMATION
   

Summary of Proposal:

  

We are proposing to increase the share reserve of our 2006 Equity Incentive Plan by 2,100,000 shares of Common Stock.

   
Number of Shares Available for Grant:   

1,386,360 *

Number of Shares Subject to Outstanding Options and Unvested RSUs:   

2,938,479* (of which 2,439,360* shares are subject to outstanding options and 499,119* are subject to unvested restricted stock units)

   
Number of Total Shares of Common Stock Outstanding:   

43,507,932*

   

Burn Rate Limit:

  

We have committed to limit our burn rate such that the total number of shares subject to outstanding equity awards granted under the Incentive Plan during a fiscal year may not exceed two and one-half percent (2.5%) of the total number of shares of common stock outstanding as of the beginning of such fiscal year. For these purposes, Full Value Awards count as two (2) shares for every one (1) share subject to an award.

 

In 2011, we granted equity awards covering a total of 1,036,539 shares under the Incentive Plan (with Full Value Awards counted as two (2) shares for every one (1) share). Based on the total number of shares of common stock outstanding of 42,268,201 shares as of the beginning of 2011 (or as of December 31, 2010), our burn rate for 2011 was 2.45%.

   

Certain Incentive Plan

Highlights:

  

¡      No evergreen provision

¡      Minimum 100% fair market value exercise price for options and stock appreciation rights

¡      No repricing or other option exchange without stockholder approval

¡      Each share subject to a Full Value Award counts against our share reserve as two (2) shares

¡      Minimum 3 year time-based vesting for Full Value Awards

¡      Minimum 1 year performance period for Full Value Awards that vest upon achievement of performance objectives

¡      Annual grants of Full Value Awards to a member of the Board of Directors vest no earlier than the last day of the director’s last day of the applicable annual term to which the award relates

¡      Maximum seven (7) year term for options and stock appreciation rights

   

Date of Plan Expiration:

  

February 21, 2016

 

* As of December 31, 2011 (as disclosed under Note 4 (Share-Based Compensation) in the “Notes to the Consolidated Financial Statements” under Part II, Item 8 in our 2011 Annual Report on Form 10-K)

 

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We are asking our stockholders to approve the amendment and restatement of our 2006 Equity Incentive Plan (the “ Incentive Plan ”) so that we can continue to use it to achieve our goals and also continue to receive a federal income tax deduction for certain compensation paid under the plan. Our Board of Directors has approved the amended and restated Incentive Plan, subject to approval from our stockholders at the Annual Meeting. Approval of the amended Incentive Plan requires the affirmative vote of a majority of the Votes Cast. Our named executive officers and directors have an interest in this proposal.

We are proposing to amend the Incentive Plan to increase the number of shares of our common stock (“ shares ”) that may be issued under the plan by 2,100,000. We are additionally requesting approval of the Incentive Plan so that awards granted under it can continue to qualify as “performance based compensation” under Section 162(m) of the Internal Revenue Code (discussed in greater detail below).

We believe strongly that the increase in shares issuable under the amended Incentive Plan is essential to our continued success and therefore is in the best interests of the Company and our stockholders. Our employees are our most valuable assets. The Board believes that grants of stock options and other equity awards available under the Incentive Plan help create long-term equity participation in the Company and thereby assist us in attracting, retaining, motivating and rewarding employees, directors, and consultants.

Additionally, approval of the Incentive Plan will allow us to continue to deduct in full for federal income tax purposes the compensation recognized by our executive officers in connection with certain awards granted under the plan. Section 162(m) generally denies a corporate tax deduction for annual compensation exceeding $1 million paid to the chief executive officer and other “covered employees” as determined under Section 162(m) and applicable guidance. However, certain types of compensation, including performance-based compensation, are generally excluded from this deductibility limit. To enable compensation in connection with stock options, stock appreciation rights and certain restricted stock grants, restricted stock units, performance shares and performance units awarded under the Incentive Plan to continue to qualify as “performance-based” within the meaning of Section 162(m), we are asking our stockholders to approve the Incentive Plan.

The amended Incentive Plan does not differ from the current version of the Incentive Plan in any other material respect.

Summary of the Amended and Restated 2006 Equity Incentive Plan

The following is a summary of the principal features of the Incentive Plan, as amended, and its operation. The summary is qualified in its entirety by reference to the Incentive Plan itself set forth in Appendix A.

The Incentive Plan provides for the grant of the following types of incentive awards: (i) stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance shares and performance units, and (vi) other cash or stock awards. Each of these is referred to individually as an “Award.” Those who will be eligible for Awards under the Incentive Plan include employees, directors and consultants who provide services to the Company and its affiliates. As of December 31, 2011, approximately 355 employees and directors were eligible to participate in the Incentive Plan. During 2011, 337 current employees and directors received equity grants. No consultants participated in the Incentive Plan in 2011.

Number of Shares of Common Stock Available Under the Amended Incentive Plan.   Subject to receipt of stockholders’ approval, the Board has approved 2,100,000 shares of the Company’s common stock for issuance under the Incentive Plan. A total of 3,000,000 shares of our common stock were initially authorized and reserved for issuance under the Incentive Plan plus (i) any shares that have been reserved but not issued under the Company’s 1997 Equity Incentive Plan as of the date of stockholder approval of the Incentive Plan and (ii) any shares subject to stock options or similar award granted under the Company’s 1997 Equity Incentive Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the Company’s 1997 Equity Incentive Plan that are forfeited or repurchased by the Company. In 2011, stockholders approved an increase of 425,000 shares to the Incentive Plan.

If this proposal is approved by our stockholders, a total of 3,486,360 shares will be available for issuance on the date of such approval (assuming for these purposes that after December 31, 2011, no additional grants of Awards are made and no shares are returned to the plan from terminating or expiring awards). Pursuant to

 

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the commitment letters we entered into with certain stockholders in 2006, we are subject to an annual equity burn rate limit. The total number of shares of our common stock subject to Awards granted under the Incentive Plan during a fiscal year may not exceed two and one-half percent (2.5%) of the total number of shares of common stock outstanding as of the beginning of such fiscal year. We may, in the future, amend these commitments to increase the burn rate limit.

Shares subject to Awards granted with an exercise price less than the fair market value on the date of grant, which would include Awards of restricted stock, restricted stock units, performance shares and performance units (“ Full Value Awards ”), count against the share reserve as two (2) shares for every one (1) share subject to such an Award. To the extent that a share that was subject to a Full Value Award that counted as two (2) shares against the Incentive Plan reserve pursuant to the preceding sentence is returned to the Incentive Plan, the Incentive Plan reserve will be credited with two (2) shares that will thereafter be available for issuance under the Incentive Plan.

If the Company declares a stock dividend or engages in a reorganization or other change in its capital structure, including a merger, the Administrator (as defined below) will have the discretion to adjust the number of shares (i) available for issuance under the Incentive Plan, (ii) subject to outstanding Awards, and (iii) specified as per-person limits on Awards, as appropriate to reflect the change.

Administration of the Amended Incentive Plan.   The Board, or a committee of directors or of other individuals satisfying applicable laws and appointed by the Board, administers the Incentive Plan. To make grants to certain of the Company’s officers and key employees, the members of the committee must qualify as “non-employee directors” under Rule 16b-3 of the Securities Exchange Act of 1934, and as “outside directors” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”) (so that the Company can receive a federal tax deduction for certain compensation paid under the Incentive Plan). Subject to the terms of the Incentive Plan, the Board or its committee has the sole discretion to select the employees, consultants, and directors who will receive Awards, determine the terms and conditions of Awards, and interpret the provisions of the Incentive Plan and outstanding Awards. Notwithstanding the foregoing, the Board or committee may not modify or amend an option or stock appreciation right to reduce the exercise price of that Award after it has been granted (except for certain adjustments made pursuant to the Incentive Plan), cancel any outstanding option or stock appreciation right and replace it with a new option or stock appreciation right with a lower exercise price, or accelerate certain vesting provisions contained in the Incentive Plan other than upon or in connection with a change of control of the Company or upon or in connection with a participant’s termination of service due to death, disability or retirement. The Board or other committee administering the Incentive Plan is referred to below as the “ Administrator .” The Board has delegated its authority to the Compensation Committee to administer the Incentive Plan.

Options.   The Administrator is able to grant nonstatutory stock options and incentive stock options under the Incentive Plan. The Administrator determines the number of shares subject to each option, although the Incentive Plan provides that a participant may not receive options for more than 250,000 shares in any fiscal year, except in connection with his or her initial service with the Company, in which case he or she may be granted an option to purchase up to an additional 500,000 shares.

The Administrator determines the exercise price of options granted under the Incentive Plan, provided the exercise price must be at least equal to the fair market value of the Company’s common stock on the date of grant. In addition, the exercise price of an incentive stock option granted to any participant who owns more than 10% of the total voting power of all classes of the Company’s outstanding stock must be at least 110% of the fair market value of the common stock on the grant date.

The term of an option may not exceed seven (7) years, except that, with respect to any participant who owns 10% of the voting power of all classes of the Company’s outstanding capital stock, the term of an incentive stock option may not exceed five (5) years.

After a termination of service with the Company, a participant will be able to exercise the vested portion of his or her option for the period of time stated in the Award agreement. If no such period of time is stated in the participant’s Award agreement, the participant will generally be able to exercise his or her option for

 

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(i) three (3) months following his or her termination for reasons other than death or disability, and (ii) twelve (12) months following his or her termination due to death or disability. If a participant is terminated for cause, the option will immediately terminate. In no event may an option be exercised later than the expiration of its term.

Stock Appreciation Rights.   The Administrator is able to grant stock appreciation rights, which are the rights to receive the appreciation in fair market value of common stock between the exercise date and the date of grant. The Company can pay the appreciation in cash, shares of common stock or a combination thereof. Stock appreciation rights will become exercisable at the times and on the terms established by the Administrator, subject to the terms of the Incentive Plan. The Administrator, subject to the terms of the Incentive Plan, will have complete discretion to determine the terms and conditions of stock appreciation rights granted under the Incentive Plan, provided, however, that the exercise price may not be less than 100% of the fair market value of a share on the date of grant. No participant will be granted stock appreciation rights covering more than 250,000 shares during any fiscal year, except that a participant may be granted stock appreciation rights covering up to an additional 500,000 shares in connection with his or her initial service as an employee with the Company.

The term of a stock appreciation right may not exceed seven (7) years. After termination of service with the Company, a participant will be able to exercise the vested portion of his or her stock appreciation right for the period of time stated in the Award agreement. If no such period of time is stated in a participant’s Award agreement, a participant generally will be able to exercise his or her stock appreciation right for (i) three (3) months following his or her termination for reasons other than cause, death, or disability, and (ii) twelve (12) months following his or her termination due to death or disability. If a participant is terminated for cause, the stock appreciation right will immediately terminate. In no event will a stock appreciation right be exercised later than the expiration of its term.

Restricted Stock.   Awards of restricted stock are rights to acquire or purchase shares of Company common stock, which vest in accordance with the terms and conditions established by the Administrator, subject to the terms and conditions of the Incentive Plan. For example, the Administrator may set restrictions based on the achievement of specific performance goals. The restrictions will lapse at a rate determined by the Administrator; provided, however, that with respect to restricted stock granted to employees and consultants, and except in the event of a change in control, Awards of restricted stock will not vest more rapidly than 1/3 of the shares of restricted stock subject to the Award each year from the date of grant (or the date of the participant’s employment or service, as applicable), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. However, the Administrator may provide at the time of or following the grant of the Award for accelerated vesting for an Award of restricted stock upon or in connection with a change in control or upon or in connection with a participant’s termination of service due to death, disability, or retirement. The Award agreement will generally grant the Company a right to repurchase or reacquire the shares upon the termination of the participant’s service with the Company for any reason (including death or disability). The Administrator will determine the number of shares granted pursuant to an Award of restricted stock, but no participant will be granted a right to purchase or acquire more than 125,000 shares of restricted stock during any fiscal year, except that a participant may be granted up to an additional 250,000 shares of restricted stock in connection with his or her initial employment with the Company.

Restricted Stock Units.   Awards of restricted stock units result in a payment to a participant only if the vesting criteria the Administrator establishes, subject to the terms and conditions of the Incentive Plan, is satisfied. For example, the Administrator may set restrictions based on the achievement of specific performance goals. The restricted stock units will vest at a rate determined by the Administrator; provided, however, that except in the event of a change in control, Awards of restricted stock units to employees or consultants will not vest more rapidly than 1/3 of the restricted stock units subject to the Award each year from the date of grant (or the date of the participant’s employment or service, as applicable), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing,

 

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the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of restricted stock units upon or in connection with a change in control or upon or in connection with a participant’s termination of service due to death, disability, or retirement. Upon satisfying the applicable vesting criteria, the participant will be entitled to the payout specified in the Award agreement. The Administrator, in its sole discretion, may pay earned restricted stock units in cash, shares, or a combination thereof. Restricted stock units that are fully paid in cash will not reduce the number of shares available for grant under the Incentive Plan. On the date set forth in the Award agreement, all unearned restricted stock units will be forfeited to the Company. The Administrator determines the number of restricted stock units granted to any participant, but during any fiscal year of the Company, no participant may be granted more than 125,000 restricted stock units during any fiscal year, except that the participant may be granted up to an additional 250,000 restricted stock units in connection with his or her initial employment with the Company.

Performance Units and Performance Shares.   The Administrator will be able to grant performance units and performance shares, which are Awards that will result in a payment to a participant only if the performance goals or other vesting criteria the Administrator may establish in accordance with the terms and conditions of the Incentive Plan are achieved or the Awards otherwise vest. The Administrator will establish performance or other vesting criteria in its discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants. The performance units and performance shares will vest at a rate determined by the Administrator; provided, however, that except in the event of a change in control, performance units and performance shares to employees or consultants will not vest more rapidly than 1/3 of the performance units and performance shares subject to the Award each year from the date of grant (or the date of the participant’s employment or service, as applicable), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of performance units or performance shares upon or in connection with a change in control or upon or in connection with a participant’s termination of service due to death, disability, or retirement. During any fiscal year, no participant will receive more than 125,000 performance shares and no participant will receive performance units having an initial value greater than $1,000,000, except that a participant may be granted performance shares covering up to an additional 250,000 shares in connection with his or her initial employment with the Company. Performance units will have an initial dollar value established by the Administrator on or before the date of grant. Performance shares will have an initial value equal to the fair market value of a share of the Company’s common stock on the grant date.

Limitation on Vesting of Full Value Awards.   Up to 5% of the maximum aggregate number of shares authorized for issuance under the Incentive Plan may be granted without respect to any minimum vesting provisions under the Plan.

Performance Goals.   Awards of restricted stock, restricted stock units, performance shares, performance units and other incentives under the Incentive Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code and may provide for a targeted level or levels of achievement including: assets; bond rating; cash flow; cash position; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; economic profit; economic value added; equity or stockholder’s equity; earnings; revenue; market share; net income; net profit; net sales; noninterest income as percent of total income; operating earnings; operating income; profit before tax; ratio of debt to debt plus equity; ratio of operating earnings to capital spending; return on equity; results of regulatory reviews and examinations; return on assets; return on sales; revenues; sales; or total return to stockholders. With respect to the Company as a whole or a business unit of the Company, any performance goals may be: (i) used to measure specific performance levels or growth over certain performance periods, and (ii) may be measured relative to a peer group or index.

 

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Transferability of Awards.   Awards granted under the Incentive Plan are generally not transferable, and all rights with respect to an Award granted to a participant generally will be available during a participant’s lifetime only to the participant.

Change of Control.   In the event of a change of control of the Company, each outstanding Award will be assumed or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation, or the parent or subsidiary of the successor corporation, refuses to assume or substitute for the Award, the participant will fully vest in and have the right to exercise all of his or her outstanding options or stock appreciation rights, including shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on restricted stock will lapse, and, with respect to restricted stock units, performance shares and performance units, all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an option or stock appreciation right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a change of control, the Administrator will notify the participant in writing or electronically that the option or stock appreciation right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the option or stock appreciation right will terminate upon the expiration of such period.

Amendment and Termination of the Incentive Plan.   The Administrator will have the authority to amend, alter, suspend or terminate the Incentive Plan, except that stockholder approval will be required for any amendment to the Incentive Plan to the extent required by any applicable laws. No amendment, alteration, suspension or termination of the Incentive Plan will impair the rights of any participant, unless mutually agreed otherwise between the participant and the Administrator and which agreement must be in writing and signed by the participant and the Company. The Incentive Plan will terminate on February 21, 2016, unless the Board terminates it earlier.

Number of Awards Granted to Employees, Consultants, and Directors

The number of Awards that an employee or consultant may receive, or that an outside director may receive, under the Incentive Plan is in the discretion of the Administrator and therefore cannot be determined in advance. The following table sets forth (a) the aggregate number of shares of common stock subject to options or other awards (if any) granted under the Incentive Plan during the last fiscal year, (b) the average per share exercise price of such options (or other awards (if any), and (c) the dollar value of such shares based on $47.69 per share, the fair market value as of December 31, 2011:

 

Name of Individual or Group

  Number
of Shares
  Granted  
     Average Per
Share
 Exercise Price 
     Dollar Value of
  Shares Granted  
 

All executive officers, as a group:

       

Options

    98,795            $     60.17           $ 4,711,534     

Restricted Stock Units

    97,500             N/A         4,649,775     

All directors who are not executive officers, as a group:

       

Options

    -            $ -           $ -       

Restricted Stock Units

    22,164             N/A           1,057,001     

All employees who are not executive officers, as a group:

       

Options

    286,850            $ 58.83           $ 13,679,877     

Restricted Stock Units

    205,783             N/A           9,813,791     

Federal Tax Aspects

The following paragraphs are a summary of the general federal income tax consequences to U.S. taxpayers and use of Awards granted under the Incentive Plan. Tax consequences for any particular individual may be different.

 

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Nonstatutory Stock Options .  No taxable income is reportable when a nonstatutory stock option with an exercise price at least equal to the fair market value of the underlying stock on the date of grant is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the excess of the fair market value (on the exercise date) of the shares purchased over the exercise price of the option. Any taxable income recognized in connection with an option exercise by an employee of the Company is subject to tax withholding by us. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

Incentive Stock Options .  No taxable income is reportable when an incentive stock option is granted or exercised (except for purposes of the alternative minimum tax, in which case taxation is the same as for nonstatutory stock options). If the participant exercises the option and then later sells or otherwise disposes of the shares more than two (2) years after the grant date and more than one (1) year after the exercise date, the difference between the sale price and the exercise price will be taxed as capital gain or loss. If the participant exercises the option and then later sells or otherwise disposes of the shares before the end of the two (2)- or one (1)-year holding periods described above, he or she generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date (or the sale price, if less) minus the exercise price of the option.

Stock Appreciation Rights .  No taxable income is reportable when a stock appreciation right with an exercise price equal to the fair market value of the underlying stock on the date of grant is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received and the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

Restricted Stock, Restricted Stock Units, Performance Units and Performance Shares .  A participant generally will not have taxable income at the time an Award of restricted stock, restricted stock units, performance shares or performance units, are granted. Instead, he or she will recognize ordinary income in the first taxable year in which his or her interest in the shares underlying the Award becomes either (i) freely transferable, or (ii) no longer subject to substantial risk of forfeiture. However, the recipient of a restricted stock Award may elect to recognize income at the time he or she receives the Award in an amount equal to the fair market value of the shares underlying the Award (less any cash paid for the shares) on the date the Award is granted.

Tax Effect for Us .  We generally will be entitled to a tax deduction in connection with an Award under the Incentive Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory stock option). Special rules limit the deductibility of compensation paid to our Chief Executive Officer and to “covered employees” within the meaning of Section 162(m). Under Section 162(m), the annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000. However, we can preserve the deductibility of certain compensation in excess of $1,000,000 if the conditions of Section 162(m) are met. These conditions include stockholder approval of the Incentive Plan, setting limits on the number of Awards that any individual may receive and for Awards other than certain stock options, establishing performance criteria that must be met before the Award actually will vest or be paid. The Incentive Plan has been designed to permit the Administrator to grant Awards that qualify as performance-based for purposes of satisfying the conditions of Section 162(m), thereby permitting us to continue to receive a federal income tax deduction in connection with such Awards.

Section 409A .  Section 409A of the Internal Revenue Code, or Section 409A, which was added by the American Jobs Creation Act of 2004, provides certain requirements on non-qualified deferred compensation arrangements. These include requirements with respect to an individual’s election to defer compensation and the individual’s selection of the timing and form of distribution of the deferred compensation. Section 409A also generally provides that distributions must be made on or following the occurrence of certain events (e.g., the individual’s separation from service, a predetermined date, or the individual’s death). Section 409A imposes restrictions on an individual’s ability to change his or her distribution timing or form after the compensation has

 

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been deferred. For certain individuals who are officers, subject to certain exceptions, Section 409A requires that such individual’s distribution commence no earlier than six (6) months after such officer’s separation from service.

Awards granted under the Incentive Plan with a deferral feature will be subject to the requirements of Section 409A. If an Award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that Award may recognize ordinary income on the amounts deferred under the Award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an Award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as possible interest charges and penalties. In addition, certain states such as California have adopted similar provisions. It is the Company’s intention to structure all Awards to comply with, or be exempt from, Section 409A.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECTS OF FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY WITH RESPECT TO AWARDS UNDER THE AMENDED INCENTIVE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

Our Board of Directors recommends that stockholders vote “FOR” the approval of the 2006 Equity Incentive Plan, as amended and restated, to increase the number of shares reserved for issuance thereunder.

 

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REPORT OF THE AUDIT COMMITTEE OF THE BOARD

The Report of the Audit Committee of the Board 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, as amended (the “Act”), or under the Securities Exchange Act of 1934, as amended (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.

The Company’s Audit Committee (the “Audit Committee”) has prepared the following report for inclusion in this Proxy Statement. The Audit Committee is governed by a Board-adopted charter, a copy of which is available on the Company’s website at www.svb.com . The charter specifies, among other things, the scope of the committee’s responsibilities and how those responsibilities are performed. The Audit Committee members are “independent” as defined by Nasdaq, the listing standard applicable to the Company.

The primary responsibility of the Audit Committee is to act on behalf of the Board in fulfilling the Board’s responsibility with respect to overseeing the Company’s accounting and reporting practices and the quality and integrity of the Company’s financial statements and reports, and the Company’s internal control over financial reporting. The committee also reviews the qualifications, independence, and performance of the registered public accounting firm engaged as the Company’s independent auditors. Management has the primary responsibility for the financial statements and the reporting process, as well as for the Company’s internal controls. The Company’s independent registered public accounting firm, KPMG LLP, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles, as well as an opinion on the effectiveness of the Company’s internal control over financial reporting. In addition, the Audit Committee oversees the Company’s internal audit function, which is responsible for reviewing and evaluating the effectiveness of the Company’s internal controls.

The Audit Committee has reviewed and discussed with management its assessment and report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, which it made using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework.” The committee also has reviewed and discussed with KPMG LLP its review and report on the Company’s internal control over financial reporting.

Moreover, the Audit Committee has reviewed and discussed with management and the independent auditors the audited financial statements. The Audit Committee discussed with the independent auditors the matters required to be discussed by the Statement on Auditing Standards No. 61, Communication with Audit Committee s. In addition, the Audit Committee received from the independent auditors the written disclosures and letter required by Public Company Accounting Oversight Board Rule 3526, Communication with Audit Committees Concerning Independence, and discussed with the independent auditors the auditors’ independence from the Company and its management.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, for filing with the SEC.

This report is included herein at the direction of the members of the Audit Committee.

AUDIT COMMITTEE

Roger Dunbar (Chair)

David Clapper

Lata Krishnan

Kate Mitchell

John Robinson

 

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Proposal No. 3

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors Recommends a Vote “For” the Ratification of the Appointment

of KPMG LLP as the Company’s Independent Registered Public Accounting Firm

The Audit Committee has appointed the firm of KPMG LLP to be the independent registered public accounting firm of the Company for the 2012 fiscal year. KPMG LLP has audited the Company’s financial statements since November 1994. While neither the Company’s bylaws nor other governing documents require stockholder ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm, the Board is, based on the recommendation of the Audit Committee, submitting the appointment of KPMG LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders do not ratify such selection by the affirmative vote of the holders of a majority of the Votes Cast, the Audit Committee may reconsider its selection.

Representatives from the firm of KPMG LLP will be present at the Meeting and afforded the opportunity to make a statement if they desire to do so. They will also be available to respond to stockholders’ questions.

PRINCIPAL AUDIT FEES AND SERVICES

The following table sets forth fees for services billed by or expected to be billed by KPMG LLP for the fiscal years 2011 and 2010, all of which were approved by the Audit Committee in conformity with its pre-approval process:

 

     2011      2010  

Audit fees

   $ 4,146,398       $ 4,048,650   

Audit-related fees (1)

     198,391         203,685   

Tax fees (2)

     569,274         497,665   

All other fees (3)

     273,581         638,151   
  

 

 

    

 

 

 

Total

   $ 5,187,644       $ 5,388,151   
  

 

 

    

 

 

 

 

(1)

Consists principally of fees billed or expected to be billed related to reviews of internal controls for selected information systems and business units (SSAE 16 audits), and services related to proposed accounting standards.

 

(2)

Represents fees for services provided in connection with the Company’s tax compliance, tax advice and tax planning.

 

(3)

Represents fees for advisory services relating to the Company’s global banking initiatives, analysis of certain accounting standards and processes, and analysis of outsourcing initiatives.

In accordance with its charter, the Audit Committee must explicitly approve the engagement of the independent auditor for all audit and permissible non-audit related services, as required by law. The charter also provides that, to the extent permitted by applicable law, the Audit Committee may adopt pre-approval policies and procedures, as well as delegate authority to grant approvals to one or more members of the Audit Committee. During the fiscal years 2011 and 2010, all such services provided by KPMG LLP were approved or pre-approved by the Audit Committee. Additionally, all non-audit related services provided by KPMG LLP were reviewed with the Audit Committee, which concluded that the provision of such services did not compromise KPMG LLP’s independence in the conduct of its auditing function. KPMG LLP also confirmed their independence to the Audit Committee.

 

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INFORMATION ON EXECUTIVE OFFICERS

Our executive officers perform policy-making functions for the Company within the meaning of applicable SEC rules. Such officers may also serve as officers of the Bank and/or the Company’s other subsidiaries. There are no family relationships among directors or executive officers of the Company.

The following information outlines the name and age of each of the executive officers of the Company (as of the Record Date) and his or her principal occupation with the Company, followed by biographical information of each such executive officer:

 

Name

   Age     

Principal Occupation

Greg W. Becker

     44      

President and Chief Executive Officer, SVB Financial Group and Silicon Valley Bank

John D. China

     46      

Head of Relationship Management

Brian K. Dennehy

     46      

Chief Marketing Officer

Mary J. Dent

     49      

General Counsel

Michael R. Descheneaux

     43      

Chief Financial Officer

Christopher D. Edmonds-Waters

     48      

Head of Human Resources

David A. Jones

     53      

Chief Credit Officer

Harry W. Kellogg, Jr.

     67      

Vice Chairman, Silicon Valley Bank, and Head of Strategic Alliances and Relationships

Joan S. Parsons

     53      

Head of U.S. Banking

Marc J. Verissimo

     55      

Chief Strategy and Risk Officer

Bruce E. Wallace

     47      

Chief Operating Officer

 

 

Executive Biographies

Mr. Greg W. Becker’s biography can be found under “ Proposal No. 1—Election of Directors—Nominees for Directors ” above.

 

 

Mr. John D. China joined the Company in 1996 as a Senior Relationship Manager and has held a variety of positions with the Company, including Head of Venture Capital Group and Head of Private Equity Group. Mr. China was appointed the Head of Relationship Management in 2010.

 

Other

Experience:

 

• Director, California Israel Chamber of Commerce (“CICC”), a not-for-profit organization dedicated to strengthening business and trade relations between California and Israel (since 2011)

 

• Advisory Board Member, DEMO, an organization dedicated to emerging technology development (since 2010)

 

• Director, Astia.org, a not-for-profit organization dedicated to the success of women-led, high-growth ventures (since 2009)

Other Prior

Experience:

 

• Director, Executive Council of New York City, a global community of senior executives (2001-2003)

Mr. China earned a bachelor’s degree in Industrial Engineering from Stanford University.

 

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Mr. Brian K. Dennehy joined the Company in 2011 as Chief Marketing Officer.

 

Other Prior

Experience:

 

• Vice President of Advanced Analytics, Business Intelligence, and Data Optimization, Intuit (2010-2011)

 

• Vice President of Small Business Marketing, Intuit (2005-2010)

 

• Vice President of Marketing, TurboTax (2003-2005)

 

• Consultant, Bain & Company, (1999-2001)

 

• Various management positions, Coca-Cola Enterprises (1990-1992)

Prior

Directorships:

 

• TurboTax (2001-2003)

Mr. Dennehy earned a bachelor’s degree in History and English from the University of Washington, a master’s degree in Diplomatic History from Georgetown University, and a doctorate degree in International Relations from the University of Southern California.

 

 

Ms. Mary J. Dent has served as General Counsel since joining the Company in 2006. Ms. Dent also assumed the additional role of Chief Operating Officer, SVB Global from 2007-2008.

 

Other

Experience:

 

• Director and Treasurer, Joint Venture: Silicon Valley Network (since 2008)

 

• Advisory Board of Stanford Institute for Research in the Social Sciences (IRiSS) (since 2010)

Other Prior

Experience:

 

• Director, Silicon Valley Campaign for Legal Services (2006-2012)

 

• General Counsel and Special Counsel, New Skies Satellites, a global satellite communications service provider based in the Netherlands (2000-2006)

 

• Attorney, Goldberg, Godles, Wiener & Wright, specializing in legal and policy matters for technology companies (1992-2000)

Ms. Dent holds a bachelor’s degree in Economics from the University of California at Los Angeles and a juris doctor degree from Stanford Law School.

 

 

Mr. Michael R. Descheneaux joined the Company in 2006 as the Managing Director of Accounting and Financial Reporting, and was later appointed as Chief Financial Officer in 2007.

 

Other Prior

Experience:

 

• Managing Director, Navigant Consulting, a business consulting firm (2004-2006)

 

• Independent consultant (2002-2004)

 

• Various leadership positions with Arthur Andersen for the Central and Eastern Europe Region (1995-2002)

 

¡          Lead Partner of financial services practice

 

¡          Lead audit partner of telecommunications/high-tech practice

 

¡           Technical expert on U.S. GAAP and generally accepted auditing standards matters

Mr. Descheneaux is a certified public accountant, as well as a member of the Texas State Board of Public Accountancy and the American Institute of Certified Public Accountants, and an associate member of the Association of Certified Fraud Examiners.

Mr. Descheneaux holds a bachelor’s degree in Business Administration from Texas A&M University.

 

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Mr. Christopher D. Edmonds-Waters joined the Company in 2003 as Director of Organization Effectiveness, and was later appointed as Head of Human Resources in 2007.

 

Other Prior

Experience:

 

• Various senior-level positions at Charles Schwab & Co. (1996-2003), launching the company’s online training system

 

• Various leadership roles with Macy’s California, managing corporate training programs

Mr. Edmonds-Waters holds a bachelor’s degree in Intercultural Communications from Arizona State University and a master’s degree in Human Resources and Organization Development from the University of San Francisco.

 

 

Mr. David A. Jones joined the Company in 1997 as the Chief Credit Officer.

 

Other Prior

Experience:

 

• Various positions with First Interstate Bank of Oregon (acquired by Wells Fargo Bank in 1996)

 

• Various positions with First National Bank of Oklahoma City (acquired by First Interstate)

Mr. Jones earned a bachelor’s degree in Finance from Oklahoma State University and a master’s degree in Business Administration from Oklahoma City University.

 

 

Mr. Harry W. Kellogg, Jr. joined the Company in 1986 and has served in a variety of senior leadership positions throughout the Company, including Chief Marketing Officer, President SVB Capital and President, Private Client Services. Mr. Kellogg was appointed Head of Strategic Alliances and Relationships in 2010 and has also been the Vice Chairman of the Board of the Bank since 1999.

 

Private

Directorships:

 

• California/Israel Chamber of Commerce, not-for-profit organization dedicated to strengthening business and trade relations between California and Israel (since 2002)

 

• Ravix Corporation, consulting firm to outsource service groups for early-stage and middle market companies (since 2003)

 

• Grameen America, non-profit microfinance organization (since 2009)

 

• Stanford Institute for Economic Policy Research, a nonpartisan economic policy research organization (since 2004)

 

• Tuck Center for Private Equity and Entrepreneurship (since 2004)

 

• Pacific Community Ventures, providing resources and capital to businesses that have the potential to bring significant economic gains to low-income communities (since 2005)

 

• Emeritus board member, Technology Museum of Innovation

Other

Experience:

 

• TechNet, a bipartisan, political network of CEOs promoting growth of technology and the innovation economy (since 1999)

Prior

Directorships:

 

• Nollenberger Capital Partners (2005-2011)

 

• Heller Ehrman (2005-2008)

 

• Joint Venture: Silicon Valley Network (2004-2008)

 

• Financial Executives International (2003-2008)

 

• Asia America MultiTechnology Association (2005-2008)

 

• Menlo College (2003-2009)

 

• World Economic Forum (2004-2008)

 

• Stanford Project on Regions of Innovation and Entrepreneurship (2004-2008)

Other Prior

Experience:

 

• Executive Vice President, Emerging Growth Industries Division, Cupertino Bank (1994-1995)

Mr. Kellogg attended Menlo College and earned a bachelor’s degree in Management and Industrial Relations from San Jose State University.

 

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Ms. Joan S. Parsons joined the Company in 1994 and has served in a variety of leadership positions throughout the Company, including Eastern Division Manager and Chief Banking Officer. Ms. Parsons was appointed Head of U.S. Banking in 2008.

 

Private

Directorships:

 

• Director, Leukemia & Lymphoma Society (since 2011)

 

• Director, Planstrong Investment Management (since 2005)

Other Prior

Experience:

 

• Vice President of Corporate Banking, Fleet Bank of Massachusetts (1992-1994)

 

• Vice President , Barclays Bank PLC (1984-1992)

 

• Vice President, Mellon Bank (1981-1983)

Ms. Parsons earned a bachelor’s degree in Economics and Art History from Wheaton College.

 

 

Mr. Marc J. Verissimo joined the Company in 1993 and has served in a variety of leadership positions throughout the Company, including Manager of our Corporate Finance Group and our Risk Management Group. Mr. Verissimo was named Chief Strategy Officer in 2002, and is currently the Chief Strategy and Risk Officer.

 

Private

Directorships:

 

• Entrepreneurs Foundation, a non-profit organization dedicated to strengthening the ties between entrepreneurial companies in the Bay Area and the communities in which they operate and their employees reside (since 2005)

Prior

Directorships:

 

• High Street Partners, Inc., a cross-border finance and administrative services firm (2009-2010)

Mr. Verissimo holds a bachelor’s degree in Agricultural Economics from the University of California, Davis, and a master’s degree in Business Administration from Harvard University.

 

 

Mr. Bruce E. Wallace joined the Company in 2008 as the Head of Global Services and was later appointed Chief Operations Officer in 2011.

 

Other Prior

Experience:

 

• Senior Vice President and Manager of Treasury Management Operations, Wells Fargo & Company (2005-2008)

 

• Various senior management positions in banking operations, Wells Fargo & Company (1987-2005)

Mr. Wallace earned a bachelor’s degree in Accounting from California State University, Sacramento.

 

 

 

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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: (i) each of the Company’s directors and director nominees, (ii) each of the executive officers named in the “Summary Compensation Table” below, and (iii) all directors, director nominees and executive officers as a group. Unless otherwise noted and subject to applicable community property laws, the respective nominees have sole voting and investment power with respect to the shares shown in the table as beneficially owned.

 

         Shares Beneficially Owned    

Name of Beneficial Owner*

   Number of
Shares
   Percent of
Class Owned

Eric A. Benhamou (1)

       18,005          * %

David M. Clapper (2)

       10,005          * %

Roger F. Dunbar (3)

       6,705          * %

Joel P. Friedman (4)

       15,005          * %

G. Felda Hardymon (5)

       106,300          * %

Alex W. “Pete” Hart (6)

       25,184          * %

C. Richard Kramlich (7)

       14,005          * %

Lata Krishnan (8)

       8,092          * %

Jeffrey N. Maggioncalda

       -          * %

Kate D. Mitchell

       2,280          * %

John F. Robinson (9)

       3,985          * %

Garen K. Staglin (10)

       3,705          * %

Kyung H. Yoon (11)

       2,005          * %

Greg W. Becker (12)

       103,455          * %

Michael R. Descheneaux (13)

       36,215          * %

David A. Jones (14)

       120,570          * %

Joan S. Parsons (15)

       90,084          * %

Mary J. Dent (16)

       37,874          * %

Ken P. Wilcox (17)

       145,509          * %

All directors, director nominees and executive officers as a group (25 persons) (18)

       886,614          2.01 %

 

 

*

Represents beneficial ownership of less than 1%.

 

(1)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(2)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(3)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(4)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(5)

Includes 4,107 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(6)

Includes 3,409 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(7)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

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(8)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(9)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(10)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(11)

Includes 1,705 shares which may be acquired pursuant to the release of restricted stock units within 60 days of the Record Date.

 

(12)

Includes 1,250 shares which may be acquired pursuant to the release of restricted stock units and 65,717 shares which may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.

 

(13)

Includes 750 shares which may be acquired pursuant to the release of restricted stock units and 31,267 shares which may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.

 

(14)

Includes 500 shares which may be acquired pursuant to the release of restricted stock units and 16,523 shares which may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.

 

(15)

Includes 937 shares which may be acquired pursuant to the release of restricted stock units and 35,234 shares which may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.

 

(16)

Includes 500 shares which may be acquired pursuant to the release of restricted stock units and 28,149 shares which may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.

 

(17)

Includes 129,008 shares which may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.

 

(18)

Includes 432,967 shares which may be acquired pursuant to the exercise of stock options or the release of restricted stock units within 60 days of the Record Date.

 

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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of the Company’s Common Stock as of December 31, 2011 by those known by the Company to own more than 5% of the outstanding Common Stock of the Company, and is based upon Schedules 13D and 13G filed with the SEC. Applicable percentages are based on 43,507,932 shares outstanding as of December 31, 2011. The Company knows of no persons other than those entities described below which beneficially own more than 5% of the outstanding Common Stock of the Company. Unless otherwise noted, the respective nominees have sole voting and investment power with respect to the shares shown in the table as beneficially owned.

 

     Shares Beneficially Owned

Name and Address of Beneficial Owner

     Number of  
Shares
   Percent of
  Class Owned  

BlackRock, Inc. (1)

       3,777,826          8.68 %

40 East 52 nd Street

New York, NY 10022

         

T. Rowe Price Associates, Inc. (2)

       2,740,725          6.30 %

100 E. Pratt Street

Baltimore, MD 21202

         

State Street Corporation (3)

       2,266,463          5.21 %

One Lincoln Street

Boston, MA 02111

         

 

 

(1)

Information is based on figures set forth in a Schedule 13G/A filed by BlackRock, Inc. on February 10, 2012. According to such 13G/A, of the total shares reported, BlackRock, Inc., an investment adviser, has sole voting power with respect to 3,777,826 shares and sole dispositive power with respect to 3,777,826 shares.

 

(2)

Information is based on figures set forth in a Schedule 13G filed by T. Rowe Price Associates, Inc. (“Price Associates”) on February 10, 2012. According to such 13G, Price Associates, an investment adviser, has sole voting power with respect to 742,864 shares and sole dispositive power with respect to 2,740,725 shares.

 

(3)

Information is based on figures set forth in a Schedule 13G filed by State Street Corporation (“State Street”) on February 9, 2012. According to such 13G, State Street, a financial institution and investment adviser, has shared voting power with respect to 2,266,463 shares and shared dispositive power with respect to 2,266,463 shares.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company believes, based on a review of Forms 3, 4 and 5 and amendments thereto filed with the SEC and other information known to the Company, that during fiscal year 2011 its directors, officers (as defined in the rules under Section 16 of the Exchange Act), and any greater than 10% stockholders have complied with all Section 16(a) filing requirements in a timely manner, except for one late report relating to his annual director equity grant in May 2011 for Mr. Hardymon due to a technical issue relating to his SEC filing codes.

 

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Proposal No. 4

ADVISORY (NON-BINDING) VOTE ON THE COMPANY’S EXECUTIVE COMPENSATION

The Board of Directors Recommends a Vote “FOR” the Approval of the Compensation of our Named Executive Officers, as Disclosed in this Proxy Statement

In 2011, pursuant to the recommendation of our Board of Directors, our stockholders approved the frequency of our advisory vote to approve our executive compensation (otherwise known as “Say on Pay”) to be on an annual basis. Accordingly, we are submitting this Say on Pay vote to provide our stockholders with the opportunity to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers (“NEOs”) as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement, including the compensation tables and narrative discussion. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement.

We ask our stockholders to indicate their support for our executive compensation program for our NEOs and vote “FOR” the following resolution at the Meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”

Because your vote is advisory, it will not be binding upon the Board or the Compensation Committee and may not be construed as overruling any decision by the Board or the Compensation Committee. However, the Board and Compensation Committee may, in each of their sole discretion, take into account the outcome of the vote when considering future executive compensation arrangements.

Stockholders are encouraged to carefully review the “Compensation Discussion and Analysis” and “Compensation for Named Executive Officers” sections of this Proxy Statement for a detailed discussion of the Company’s executive compensation program for our NEOs.

 

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COMPENSATION COMMITTEE REPORT

This Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Act or 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.

The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis with management. Based on this review and these discussions, the Compensation Committee recommended to the Board of Directors of the Company that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ending December 31, 2011 and this Proxy Statement.

This report is included herein at the direction of the members of the Compensation Committee.

COMPENSATION COMMITTEE

Kate Mitchell (Chair)

Alex “Pete” Hart

C. Richard Kramlich

John Robinson

Kyung Yoon

 

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“ CD&A ”) discusses our 2011 executive compensation program, primarily as it relates to our five “named executive officers” that are currently serving as executive officers (each, an “ NEO ”): (i)  Greg Becker , President and Chief Executive Officer, (ii)  Michael Descheneaux , Chief Financial Officer, (iii)  David Jones , Chief Credit Officer, (iv)  Joan Parsons , Head of US Banking, and (v)  Mary Dent , General Counsel. We also discuss our 2011 compensation for Ken Wilcox . Mr. Wilcox served as Chief Executive Officer until April 2011. He is currently leading our effort to expand the Bank’s Asia strategy, including the formation of a joint venture bank in China and serving as Chairman of Silicon Valley Bank.

 

LOGO

 

 

2 In 2011, the Committee shifted the emphasis on long term compensation from cash to equity. As such, no new long-term cash incentive awards were granted in 2011; however, we made 2011 payouts for awards granted in 2010 under our Long-Term Cash Incentive Plan for the 2010-2012 performance period. The plan was adopted in 2010 primarily to help manage our equity burn rate. The Committee intends to terminate this plan upon completion of the 2010-2012 period.

 

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2011 Executive Compensation Highlights

Specific highlights of our 2011 executive compensation program include:

 

  ü  

2011 Executive Compensation Summary.     Our executive compensation consists of various key short-term/long-term and fixed/variable components of compensation, with varying earnings opportunities. Below is a summary of the outcomes of each component for 2011:

 

 

Compensation

Component

  Type of pay   Earnings Opportunity*   Performance Measures
Used to Determine
Compensation
  2011 Outcomes
Base Salary   Fixed Cash   Fixed   ---   Fixed
Annual Cash
Incentives
  Variable Cash   Dependent on
performance; executive pool subject to
maximum funding of 200% of aggregate target
  Return on average equity
(“ ROE ”); and company
/individual performance
  200% of executive pool funded
Stock Options   Fixed Equity Award
(value subject to
stock price)
  Dependent on stock
price appreciation
  ---   Fixed equity award** (value subject to stock price)
Performance-Based Restricted Stock
Units (“ PRSUs ”)
  Variable Equity  

0% to 150%

of target

  Relative total stockholder return (“ TSR ”)   50% of target earned**
Restricted Stock
Units (“ RSUs ”)
  Fixed Equity Award   Dependent on stock
price
  ---   Fixed equity award**
Long-Term Cash
Incentives***
  Variable Cash  

75% to 125%

of target

  Book value (“ BV ”) (50%) & TSR (50%)  

100% of target

(cumulative 2010-2011)

 

* Payouts are generally paid within the ranges noted; however, the Committee retains discretion to pay above or below the ranges based on individual performance.

** Subject to time-based vesting

*** Based on awards granted in 2010 for the 2010-2012 performance period under the Long-Term Cash Incentive Plan. There were no new awards granted in 2011 under this plan.

 

  ü  

Continued emphasis in the design of our compensation structure on performance-based target pay.

 

  ¡    

CEO: 61% performance-based pay, 39% non-performance-based pay

 

  ¡    

Other NEOs (on average): 56% performance-based pay, 44% non-performance-based pay

 

  ü  

Shifted long-term compensation emphasis from cash to equity.

 

  ¡    

We replaced long-term cash incentives with long-term equity incentives to align the interests of our NEOs and our stockholders.

 

 

  ¡    

We expanded the mix of equity awards to our NEOs by adding restricted stock units (20%), and continued to include stock options (46%) and performance-based restricted stock units (34%).

 

 

  ü  

Maintained NEO base salaries at 2010 levels, except for a promotional increase for Mr. Becker as CEO.

 

 

  ü  

Designed compensation packages for our new and former CEOs that are aligned with our business objectives and performance.

 

 

  ¡    

New CEO. As a result of our multi-year succession planning efforts, we promoted our incumbent President Greg Becker as our CEO in April 2011.

 

 

  ¡    

Transition of former CEO to new global role. Mr. Wilcox served as CEO until April 2011. At that time, he transitioned into a new key role to expand our Asia strategy (including establishing our joint venture bank in China), which included his international assignment (and temporary relocation) to China.

 

 

  ü  

Strong stockholder support of 2011 Say on Pay vote. We received 95% of the votes cast in approval of our 2010 executive compensation program (as described in our 2011 proxy statement).

 

 

 

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Table of Contents

Additional Executive Compensation Program Features

Our executive compensation program is also based on the following prudent compensation governance principles:

 

  ü  

No pensions or SERPs. We do not provide any pension, excess retirement, or supplemental executive retirement (“ SERP ”) plans to any executive, other than participation in our 401(k) plan.

 

 

  ü  

No executive benefit programs. We do not have any programs that offer benefits exclusively to our executives. Our executives receive the same retirement, health, welfare and other benefits that are generally available to all our U.S. employees, and may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Program.

 

 

  ü  

No executive perquisite program. We do not have any executive perquisite programs. From time to time, we may provide benefits that may be considered perquisites, on a limited or exception basis, which we disclose as required by applicable rules. In 2011, we provided certain benefits to Mr. Wilcox, primarily relating to his international assignment and temporary relocation to Asia. (See “ 2011 Compensation for Ken Wilcox ” below.)

 

 

  ü  

Our incentives are subject to certain performance minimums and maximum limits on incentive awards. 3 We establish minimum thresholds for certain incentives where awards/payouts may not be earned or made unless actual performance meets or exceeds thresholds, such as our PRSUs and our long-term cash incentives. We also establish maximum limits, such as our PRSU awards, long-term cash incentives, and funding for our annual cash incentives funding and broad-based profit sharing plan.

 

 

  ü  

Our executives’ equity awards are made under our equity plan that have the following features:

 

¡        No evergreen provision

 

¡        Minimum 100% fair market value exercise price for options

 

¡         No repricing without stockholder approval

 

¡         Annual burn rate maximum of 2.5% (under commitment letter with certain stockholders)

 

¡        Each full value award share counted as two shares

  

¡        Minimum 3 year time-based vesting for full value awards

 

¡         Minimum 1 year vesting for performance-based full value awards (although NEO performance-based equity awards are subject to performance conditions and time-based vesting)

 

¡        Maximum seven-year term for options

(For more information about our 2006 Equity Incentive Plan, please see “Proposal No. 2” on page 22.)

 

  ü  

Equity ownership guidelines.   To align economic interests with stockholders, our executive officers are subject to equity ownership guidelines, which are monitored on a regular basis. As of December 31, 2011, all NEOs satisfied their respective ownership requirements.

 

 

  ü  

No employment agreements.   We do not have any employment agreements with any of our executive officers. We entered into an at-will employment letter agreement with Mr. Wilcox to memorialize his compensation and temporary relocation arrangement.

 

 

  ü  

Competitive benchmarking.   In making compensation decisions, we consider compensation data from our benchmarking reference peer group and routinely review the composition of the companies within the peer group. Our current peer group is comprised of 21 financial institutions.

 

 

  ü  

Compensation risk management.   We conduct annual compensation risk assessments so that our compensation-related risks are not reasonably likely to have a material adverse effect on the Company.

 

*  *  *  *  *

 

43

 

3 Subject to the Committee’s sole discretion.

 


Table of Contents

Executive Compensation Philosophy

We have retained a consistent overarching compensation philosophy that we believe appropriately reflects our business objectives, the diverse nature of our lines of business, the relative complexity this business diversity represents in an organization of our size, appropriate risk management practices, emerging trends in executive compensation (particularly for financial institutions), stockholder interests and market practices.

The key principles of our executive compensation philosophy are to:

 

   

Align compensation with business objectives and stockholder interests. Our executive compensation plans are designed to:

 

  ¡    

Tie pay to Company and individual performance by setting appropriate performance metrics.

 

  ¡    

Provide for executive equity ownership to align economic interests with stockholders.

 

  ¡    

Take into account the dynamics of the market and business environment within which the Company and management operate.

 

   

Establish an appropriate mix of performance-based pay and non-performance based pay, with an emphasis on performance-based pay.

 

   

Establish an appropriate mix of long-term performance incentive compensation and short-term (annual) incentive compensation, with an emphasis on long-term.

 

   

Base incentive compensation on Company and individual performance without encouraging undue risk-taking.

 

   

Pay competitively, relying primarily on external market peer group standards while also considering internal parity and the importance of creating a cohesive, well-aligned management team.

In addition, our executive compensation program is grounded in appropriate governance oversight, processes and risk controls (including annual risk assessment reviews), and is designed to comply with all applicable laws and regulations.

Compensation Governance

Our executive compensation program is subject to the oversight of the Committee pursuant to its authority as outlined in its charter, including the design and administration of executive compensation plans and the approval of executive compensation. In carrying out its oversight responsibilities, the Committee routinely reports to and consults with the Board on compensation matters. In addition, the Committee retains an independent compensation consultant, and where appropriate, discusses compensation–related matters with our Chief Executive Officer.

Role of Compensation Committee

The Committee is responsible for overseeing the compensation program and strategies of the Company and approving director and executive compensation and equity awards. The Committee is composed of directors who are “independent” under applicable Nasdaq rules. Committee members hold meetings on a regular basis (11 meetings in 2011), and routinely meet in executive session without management present. The Committee reports regularly to the Board on the actions it has taken, and makes recommendations for any compensation-related matters that require Board approval. During 2011, the Board did not reject or modify in any material way any action of or recommendation by the Committee.

Role of Compensation Committee Consultant

The Committee has retained Pay Governance LLC, an independent outside compensation consultant, to provide guidance on all compensation matters under its oversight responsibilities. The Committee in its sole discretion selects the consultant, determines the scope of the consultant’s responsibilities, and determines the consultant’s compensation.

 

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The services provided to the Committee by its outside compensation consultant in 2011 include: support in the Committee’s effort to periodically review and update, as appropriate, the Company’s compensation philosophy and strategies; advice on executive and director compensation levels and practices, including review and recommendations on CEO compensation; advice on the Company’s peer group; guidance on the design of our compensation plans; assistance with the Committee’s periodic review of potential risks associated with the Company’s compensation programs; analysis of Company equity utilization; and periodic reports to the Committee on market and industry compensation trends and regulatory developments. The Committee did not engage Pay Governance for any additional services outside of executive compensation consulting during 2011.

Role of Chief Executive Officer

From time to time, our CEO will attend portions of the Committee’s meetings to discuss the Company’s performance and compensation-related matters. The CEO does not attend executive sessions. While he does not participate in any deliberations relating to his own compensation, he reviews on at least an annual basis the performance of each of the other NEOs and other executive officers. Based on these performance reviews and the Company’s overall performance, our CEO makes recommendations to the Committee on any changes to base salaries, incentive compensation awards and equity awards. The Committee considers the recommendations submitted by our CEO, as well as data and analyses provided by management, but retains full discretion to set all executive compensation.

Our CEO and management may from time to time retain an outside compensation consultant to provide management with guidance on our compensation program and management’s recommendations to the Committee. Management’s consultant does not provide any services to the Committee or any non-compensated-related services to the Company.

Executive Compensation Competitive Benchmarking

In making compensation decisions, the Committee considers competitive compensation data from the Company’s benchmarking reference peer group and periodically reviews the composition of companies within that peer group. In determining the composition of the peer group, the Company considers various factors and characteristics including market capitalization, asset size, assets under management, number of employees, business model and complexity of the platform, and performance on financial and market-based measures.

During 2011, the Committee, along with management and the outside consultants of the Committee and management, reviewed the peer group used in 2010 and considered whether to add any other financial institution peer companies. Ultimately, they determined that the companies named in the existing peer group continued to be appropriate and relevant and no changes were required. Accordingly, the 2011 peer group continued to consist of the following 21 companies (the “ Peer Group ”):*

 

Associated Banc-Corp

  

East West Bancorp, Inc.

   TCF Financial Corporation

Bank of Hawaii Corp

   First Citizens Bancshares, Inc.    UMB Financial Corporation

BOK Financial Corp

   FirstMerit Corporation    Umpqua Holdings Corporation

CapitalSource Inc.

   Investors Bancorp, Inc.    Valley National Bancorp

City National Corporation

   MB Financial, Inc.    Webster Financial Corporation

Commerce Bancshares, Inc.

   Prosperity Bancshares, Inc.   

Cullen/Frost Bankers, Inc.

   Raymond James Financial, Inc.   

CVB Financial Corp.

   Signature Bank   

 

* Whitney Holding Corporation has been deleted from the list which was acquired in June 2011.

While the Committee did not change the composition of the Peer Group, it did consider a broader group of financial institutions for comparative purposes, including the Company’s key competitors and other companies with whom the Company competes for executive talent.

 

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In addition, the Committee referred to this Peer Group for corporate performance benchmarking. In particular, we measure our total stockholder return performance, relative to this Peer Group, for our 2011 PRSU awards and our Long-Term Cash Incentive Plan awards for the 2010-2012 performance period. See “Equity Incentives” and “Long-Term Cash Incentives” below.

2011 Executive Compensation

The highlights of our 2011 executive compensation are as follows:

 

   

We continued to design total target compensation packages for our NEOs that emphasize long-term pay and performance-based pay, to drive performance and executive retention. The 2011 target total pay mix for our CEO and, on average, for the other NEOs was as follows:

 

2011 Target Total Executive Compensation Mix

Balanced Long-Term/Short-Term Pay Mix That Emphasizes Performance

 

 

LOGO

 

   

LOGO

 

Long-Term Compensation:

 

Short-Term Compensation:

   

Performance-Based:

 

Non-Performance Based:

• Performance-based RSUs

 

• Base salary

   

• Annual cash incentives

 

• Base salary

• Stock options

 

• Annual cash incentives

   

• Performance-based RSUs

 

• RSUs

• RSUs

     

• Stock options

 

 

* Does not include Mr. Becker’s one-time special equity grant in connection with his promotion as CEO.

 

   

We shifted our long-term compensation emphasis from cash to equity for our NEOs (excluding Mr. Wilcox). In 2010, to help manage our equity burn rate, we adopted our Long-Term Cash Incentive Plan (“ Cash LTIP ”), which rewards our NEOs in cash for performance over multi-year periods. In 2010, we made awards subject to performance over the three year period between 2010-2012 (the “ 2010-2012 Performance Period ”). In 2011, we decided to place more emphasis on our long-term compensation with equity instead of cash. We believe equity incentives align better with stockholder interests and our business focus on long-term growth. As such, we did not make any additional awards under the Cash LTIP in 2011, and instead focused long-term incentives on equity-based awards. In doing so, we also expanded the mix of equity awards to our NEOs by adding restricted stock units, and continued to include stock options and performance-based restricted stock units.

2011 Compensation for Greg Becker

Mr. Becker became the Company’s CEO in April 2011. The Board and Mr. Becker’s predecessor, Ken Wilcox, engaged in a multi-year succession planning effort, which culminated in Greg Becker’s promotion to CEO in April 2011.

Mr. Becker joined the Company in 1993. He has served in a variety of leadership roles over his 19 year career with the Company. Most recently, Mr. Becker served as President of Silicon Valley Bank and SVB Financial Group. Prior to that role, he served as Chief Operating Officer and Chief Banking Officer, where he was

 

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responsible for leading the commercial bank’s sales and operational efforts in the 26 U.S. offices and international subsidiaries in the U.K., Israel, India and China. Mr. Becker has also served as the division manager for the Company’s Venture Capital Group; as a Managing Director for several of the Company’s venture capital funds; and in other banking and funds roles.

In his inaugural year as CEO, Mr. Becker’s goals focused on three core areas: financial performance, long term strategy, and leadership (including client satisfaction, employee engagement, and effective compliance/regulatory results).

In accordance with its general approach to compensation, the Committee determined Mr. Becker’s total pay and each of the components based on a review of peer compensation, as well as his level of experience and expertise. Mr. Becker received a total pay package which included the following specific promotion-related compensation: a 14% increase in base salary, a new annual cash incentives target of 70% of base salary, and a one-time special promotion equity grant (subject to cliff vesting after four years). See “Elements of Compensation” below.

2011 Compensation for Ken Wilcox

Mr. Wilcox served as the Company’s CEO for a ten-year period, until April 2011. The Company’s performance during the first half of 2011 and throughout the remainder of the year reflected Mr. Wilcox’s leadership, business planning and effective succession planning.

When Mr. Wilcox decided to step down from the role of CEO, the Company’s Board asked him to continue to work for the Company and lead the Bank’s Asia strategy. One of the Company’s most important and most complex growth initiatives is its international expansion. In particular, we view the expansion of the SVB platform into Asia as our most significant long term strategic initiative, in terms of both its potential to drive growth as well as its complexity. Mr. Wilcox agreed to temporarily relocate to China and to be personally responsible for expanding the broad Asia strategy and specifically lead the Company’s planned joint venture bank in China. This effort will draw upon the experience and skills we believe Mr. Wilcox uniquely holds, including the relationship building and communication skills, which will enable him to establish and maintain strong working relationships with our joint venture partner, Shanghai Pudong Development Bank, and with regulatory authorities in China and the United States. In addition, we believe that having an individual of Mr. Wilcox’s caliber leading the Company’s efforts in Asia will enhance Mr. Becker’s overall effectiveness, by allowing him to devote more of his time to the remainder of the Company’s business.

In addition to his responsibilities in Asia, Mr. Wilcox’s role included Chairman of the Board of Directors of Silicon Valley Bank and member of the Board of Governors of the Federal Reserve Bank in San Francisco.

Given the importance of Mr. Wilcox’s responsibilities and his agreement to relocate to China, we decided to maintain Mr. Wilcox’s total target compensation at 2010 levels (excluding costs related to his temporary assignment to China). We shifted his long term variable pay from equity to cash, in order to provide a more effective incentive delivery approach for Mr. Wilcox and to preserve appropriate levels of equity for management and employees while maintaining an acceptable level of overall dilution. We also set an internal guideline of $4.0 million as the maximum amount of annual compensation for Mr. Wilcox, including base salary, annual cash incentives, and long-term cash incentives (excluding Cash LTIP payouts and costs related to his temporary assignment to China) (the “ Maximum Guideline ”).

 

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We entered into a letter agreement with Mr. Wilcox containing the terms of his international assignment and temporary relocation arrangement in China. Under its terms, the agreement has an expected assignment termination date of December 31, 2012 (but is subject to extension or earlier termination). Moreover, under this agreement, Mr. Wilcox received for 2011 an estimated total of $782,386 in benefits relating to his international assignment and temporary relocation to China, which included: (i) one-time relocation payments of $19,526, (ii) local housing benefits and living expenses of $106,217, (iii) transportation and home travel benefits of $54,097, and (iv) total estimated taxes to be paid by the Company under a tax equalization arrangement of approximately $602,546 (“Tax Amount”). Our tax equalization arrangement with Mr. Wilcox is intended to offset any additional taxes he is expected to incur as a result of his international assignment due to China’s higher income tax rates. He continues to be obligated to pay taxes on all of his income to the same extent as he would in the United States. The estimated portion of the Tax Amount is currently calculated based on certain assumptions that we believe are, to some extent, conservative. The actual amount to be paid may differ from our current estimate. We believe these costs relating to his temporary assignment, including the Tax Amount, are appropriate, given Mr. Wilcox’s role and the importance of his physical presence in China to lead our efforts to expand our Asian presence and to establish our Chinese joint venture bank.

 

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Elements of Compensation

The 2011 key highlights of each major element of our total executive compensation program are summarized below. Statements regarding the NEOs also apply to Mr. Wilcox, unless otherwise noted.

 

      Compensation
Component
        Purpose         2011 Key Highlights

 

 

 

 

 

 

 

 

LOGO

 

Base Salary

   

Provides ongoing fixed cash pay

   

• No changes to any NEO annual base salary in 2011 (other than a promotional increase for Greg Becker as CEO).

 

  Annual Cash
Incentives
     

Provides short-term (annual) performance-based cash incentive compensation opportunity

     

• No changes to any NEO incentive target payouts in 2011 (other than for Mr. Becker, in connection with his promotion).

 

• Annual cash incentives were subject to the Company’s return on average equity (ROE) performance, as well as overall Company and individual performance. We exceeded our ROE target under our 2011 annual plan, and our overall program for NEOs was funded at 200% of target. For 2011, based on individual performance, each NEO received between 194% to 258% of target payout.

 

• Annual cash incentive funding accruals are monitored by the Committee on a quarterly basis, and adjusted for non-recurring or other extraordinary items, to the extent determined by the Committee.

 

(See “Annual Cash Incentives” below.)

 

         

 

 

 

 

 

LOGO

 

Stock Options

   

Provides incentives for long-term creation of stockholder value over a four-year period, which is tied to the performance of our Common Stock. Stock option awards represent 46% of the NEOs’ total long-term equity award for 2011.

     

For the NEOs

 

• Shifted emphasis of long-term incentives from cash to equity to align executives with stockholder interests.

 

• Replaced 2011 long-term cash incentives (see below) with long-term equity incentives.

 

• Expanded mix of equity awards to include RSUs, and continued to include stock options and PRSUs.

 

• 2011 PRSUs were subject to relative TSR performance conditions. Based on the Company’s 2011 TSR ranking amongst the Peer Group, the Committee deemed 50% of the PRSUs earned, which then are subject to further time-based vesting through December 20, 2013.

 

For Mr. Wilcox

 

• Shifted long-term incentives from equity to cash.

 

• No equity awards in 2011.

 

(See “Equity Incentives” below.)

 

  Performance-
Based
Restricted Stock
Units (“PRSUs”)
     

Provides incentives to motivate and retain executives and to reward the achievement of specific financial goals. Target PRSUs represent 34% of the NEOs’ total long-term equity award for 2011.

     
  Restricted
Stock Units
(“RSUs”)
     

Provides incentives for retention and long-term creation of stockholder value over a four-year period. RSU awards represent 20% of the NEOs’ total long-term equity award for 2011.

 

     

 

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      Compensation
Component
        Purpose         2011 Key Highlights      
         

 

 

 

 

 

 

 

 

 

 

LOGO

 

Long-Term Cash
Incentives

     

Provides long-term performance based cash incentive compensation opportunity

     

Long-Term Cash Incentives From Prior Year Awards

 

In 2010, we granted Cash LTIP Awards for a three-year (2010-2012) performance period. The awards were performance-based, based upon book value growth and relative TSR performance. For 2011, the Company exceeded the book value growth target and met the TSR performance target. As a result, the NEOs and Mr. Wilcox earned 100% of their target payment for 2011 for the 2010-2012 performance period.

 

The Committee intends to terminate the Cash LTIP after the 2010-2012 performance period.

 

Long-Term Cash Incentives for 2011

 

For the NEOs

 

• In 2011, we did not make any new long-term cash incentive awards (including any new Cash LTIP Awards).

 

For Mr. Wilcox

 

• During 2011, Mr. Wilcox was eligible to earn a long-term performance based cash incentive award (“LTI Award”) of up to $2.3 million, based on certain performance conditions relating to the Company’s relative TSR performance and global expansion.

 

• In 2011, we did not make any other new Cash LTIP Awards to Mr. Wilcox.

 

(See “Long-Term Cash Incentives” below.)

 

   

 

LOGO

 

Health/Welfare
and Retirement
Programs;
Perquisites

     

As further discussed below, executives receive health, welfare and retirement benefits that are generally available to employees. (See also “Other Post-Employment Benefits” below.)

 

We do not have any executive perquisite programs. From time to time, we may provide benefits that may be considered perquisites, on a limited or exception basis, which we disclose as required by applicable rules. In 2011, we provided certain benefits to Mr. Wilcox, primarily relating to his international assignment and temporary relocation to Asia.

 

   

Base Salary

We provide base salaries in order to provide each NEO with a reasonable level of fixed short-term compensation. Base salary levels for our NEOs are typically reviewed at least annually by the Committee and adjusted as appropriate. When determining any NEO base salary increases, the Committee considers an individual NEO’s total compensation package, his or her performance, Company performance, applicable laws and regulations, and other relevant factors, including for example the scope of the NEO’s responsibilities relative to peers and retention concerns, if any. The Committee also takes into consideration changes in the competitive market base salaries among our Peer Group for the position in question.

 

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The Committee did not make any changes to the annual base salaries of our NEOs, except for Mr. Becker, who received a promotional increase effective as of April 21, 2011, the date he assumed the position of Chief Executive Officer:

 

NEO/Other Executive

           Amount of Increase                    2011 Annual Base Salary      

Greg Becker

   $  100,000      $    800,000           
   (Promotion-related)   

Michael Descheneaux

   —        485,000           

David Jones

   —        400,000           

Joan Parsons

   —        385,000           

Mary Dent

   —        360,000           

Ken Wilcox

   —        1,000,000           

Annual Cash Incentives

Our NEOs and Mr. Wilcox participate in the Company’s Incentive Compensation Plan for executives (“ ICP ”), an annual cash incentive plan that rewards performance against individual and company objectives.

NEO Target Awards

For each participant, the Committee establishes a target incentive, stated as a percentage of the individual’s annual base salary:

 

NEO/Other Executive

           Target ICP        

Greg Becker

   70%

Michael Descheneaux

   40  

David Jones

   40  

Joan Parsons

   45  

Mary Dent

   50  

Ken Wilcox

   70  

The Committee did not change the target ICP for Mr. Wilcox or any of the NEOs, other than Mr. Becker. In connection with Mr. Becker’s promotion to CEO, the Committee increased his target ICP from 40% to 70%.

ICP Funding

The Committee establishes one or more metrics that it will use to measure company performance for ICP funding purposes. Similar to prior years, for 2011, the Committee established ROE relative to the Board-approved annual budget as the ICP performance metric. The Committee continues to believe that ROE is an appropriate indicator of financial performance that is directly related to the creation of stockholder value.

 

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At the beginning of the year, the Committee determines the extent to which the Company will fund the incentive pool. The graph below illustrates the relationship in 2011 between (i) achieved ROE as a percentage of the annual plan, and (ii) the percentage of the target incentive pool accrued for the NEOs. There is a maximum funding amount of 200% of target payment for achievement of 125% or over of our budgeted ROE under our annual plan.

 

LOGO

The Committee retains discretion to fund up to 50% of the target ICP pool for performance below the 90% threshold, if and when it believes that making partial ICP payments are in the Company’s interests. The Committee decides in its sole discretion over whether and to what extent it will fund or spend the provisional pool and in no way does this pool represent a form of guaranteed incentive payments. The Committee did not approve any provisional funding pool for 2011 because of the Company’s above-target ROE performance.

In addition, the Committee retains discretion to determine the extent to which the Company met its ICP performance target, including discretion to consider adjustments for certain out of the ordinary items, such as non-recurring accounting items. In the second quarter of 2011, per management’s recommendation, the Committee excluded certain non-recurring investment gains.

2011 NEO ICP Awards

At the close of the year, the Committee determines actual incentive awards for the NEOs based upon the individual’s target incentive level, the Company’s performance, and the individual NEO’s performance. ICP awards for NEOs may be at, above, or below the target incentive and are made at the sole discretion of the Committee.

In determining each NEO’s performance, the Committee considered a variety of factors that it believed to be relevant, including each NEO’s contributions to (i) the Company’s business and financial results, (ii) the Company’s successful execution of its 2011 corporate initiatives, and (iii) broader leadership within the organization. For Mr. Becker, the Committee considered the performance assessment conducted by the Board. For the other NEOs, the Committee considered the performance assessments conducted by Mr. Becker. In addition to these management assessments, the Committee considered its direct observations and assessments of each NEO’s performance.

 

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The Committee determined that the NEOs had earned the following incentive awards for 2011:  ( All items denoted with an asterisk (*) indicate Company record amounts for the year .)

 

NEO/Other
Executive
  Amount of
Award
    Other Primary Factors Considered in Determining Individual Awards
Greg Becker   $ 1,120,000     

• 2011 profitability

 

¡          Earnings per share of $3.94*, up 76% from 2010

 

¡           Annual consolidated net income of $171.9 million*, up 81% from 2010

 

¡          Return on average equity of 11.87%*, up from 54% from 2010

 

• Total asset growth (average total assets of $18.7 billion*, up 26% from 2010)

 

• Continued strength of our capital and liquidity position

 

• Loan portfolio growth (average loan (net of unearned income) balances of $5.8 billion*, up 31% from 2010)

 

• Rigorous credit underwriting (net recoveries of $1.2 million in 2011, with recoveries exceeding charge-offs) and loan portfolio management

 

• Favorable regulatory examination results

 

• Growth in market share

 

• Positive client satisfaction survey results

 

• Progress on specific identified long-term growth initiatives

 

• Development of long-term strategic plan

 

• Being named by a nationally-recognized financial publication as a top 10 bank in the U.S.

 

• Employee morale and engagement

Michael Descheneaux    $ 500,000     

• Strong execution of our overall financial management, including capital and liquidity

 

• Effective management of our fixed-income investment portfolio (average available-for-sale securities of $9.4 billion, up 75% from 2010)

 

• Completion of the repurchase of $312.6 million of our senior and subordinated notes

 

• Effective management of relations with investors, credit ratings agencies and other key constituents

 

• Significant contribution towards long-term strategic planning

 

• Significant support towards global expansion efforts

David Jones   $ 400,000     

• Strong credit quality (net recoveries of $1.2 million in 2011, with recoveries exceeding charge-offs)

 

• Maintenance of our already rigorous credit underwriting and loan portfolio management

 

• Reduction in impaired loan balances

 

• Favorable regulatory examination results relating to credit

 

• Significant contribution towards long-term strategic planning

 

• Significant support towards global expansion efforts

 

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NEO/Other
Executive
    Amount of  
Award
    Other Primary Factors Considered in Determining Individual Awards
Joan Parsons   $ 400,000     

• Loan portfolio growth (average loan (net of unearned income) balances of $5.8 billion*, up 31% from 2010)

 

• Strong credit quality (net recoveries of $1.2 million in 2011, with recoveries exceeding charge-offs)

 

• Strong deposit growth (average deposit balances of $15.6 billion*, up 29% from 2010)

 

• Effective cross–selling

 

• Growth in market share

 

• Continued focus on improving client experience

 

• Significant contribution towards long-term strategic planning

 

• Significant support towards global expansion efforts

Mary Dent   $ 350,000     

• Effective advocacy on legislation, including the Volcker Rule

 

• Favorable regulatory examination results

 

• Strengthening of research and development function

 

• Significant contribution towards long-term strategic planning

 

• Significant support towards global expansion efforts

 

• Being named by a leading legal publication as one of the top 25 leading general counsels in California

Ken Wilcox   $ 1,400,000     

• Significant contributions toward SVB’s long-term success, including Mr. Wilcox’s role in strategic planning, succession planning, and executive development

 

• 2011 profitability

 

• Effective succession to Mr. Becker

 

• Significant progress preparing for the China joint venture and establishing our Asia strategy, including:

 

¡          Finalized agreements and an operating plan for the joint venture with the Company’s joint venture partner, Shanghai Pudong Development Bank

 

¡          Received provisional license from the Chinese government (the first such license granted to a U.S. commercial bank)

 

¡          Developed an operating plan for the Company’s non-JV China and Asia businesses

 

¡          Effectively developed Asia team

 

¡          Expanded the number and quality of SVB’s relationships in Asia

 

• Effective U.S. regulatory relations

Equity Incentives

Each NEO is eligible to receive equity awards, including stock options, restricted stock units and restricted stock awards under our 2006 Equity Incentive Plan. The Company believes that equity-based awards, particularly in combination with the Company’s equity ownership guidelines as discussed below, tie each of the NEOs’ compensation to the Company’s long-term financial performance and align the interests of the NEOs and our stockholders. For the reasons discussed above, the Company did not grant equity incentives to Mr. Wilcox in 2011, and does not expect to grant equity incentives to Mr. Wilcox in 2012.

The Committee typically makes equity awards to each NEO at the time the individual is hired or promoted, and annually thereafter. The size of the awards reflects the overall number of shares available to the

 

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Company under its equity incentive plan, the Committee’s determination of an appropriate annual equity burn rate (the percentage of total shares outstanding that the Company has issued during the year in the form of equity compensation), the NEO’s role and performance, and the market compensation data for the NEO’s external peers.

In 2011, in an effort to tie more executive compensation to the future performance of the Company’s common stock, the Committee discontinued new awards under the Cash LTIP, and increased long-term equity compensation. The Committee determined a target long-term equity award total value for each NEO and, effective as of April 27, 2011, awarded each NEO the following mix of performance-based (80%) and non-performance-based (20%) equity awards, as further discussed below:

 

NEO Equity Awards Granted in 2011
NEO/Other Executive   Number of Shares of the Common Stock Subject to:
 

Non-Performance-Based

 

Equity Awards (20%)

  Performance-Based Equity Awards (80%)
 

Restricted Stock Units

 

(20%)

 

Stock Options

(46%)

   

Performance-Based Restricted

 

Stock Units (34%)

(Target)

Greg Becker

  5,000     24,000      9,000

Michael Descheneaux

  3,000     16,000      6,000

David Jones

  2,000     10,000      4,000

Joan Parsons

  2,000     7,000      3,000

Mary Dent

  2,000     9,000      3,000

Ken Wilcox

  ---       ---        ---  

 

   

The stock options and restricted stock units (RSUs) are subject to annual vesting over a four-year period. The stock options have a maximum term of seven years. The Committee did not establish performance-based criteria, as the value of these stock options, and any increase in the value of the RSUs, are inherently tied to the future performance of the Company’s common stock.

 

   

The performance-based restricted stock units (PRSUs) are subject to performance-based vesting over a one-year period and if earned, time-based vesting until December 20, 2013. The Committee determines at its discretion the performance conditions upon which the awards are earned, which for 2011, was the Company’s TSR performance, as measured against its Peer Group:

 

         

Relative TSR

Performance
(Against Peer
Group)

 

 

Bottom Quartile  

(0-25% of 2011 Peer  
Group Performance)  

 

 

Second Quartile  

(26-50% of 2011 Peer  
Group Performance)  

 

 

Third Quartile  

(51-75% of 2011 Peer  
Group Performance)  

 

 

Top Quartile  

 

(>75% of 2011 Peer  

 

Group Performance)  

 

Extent of PRSUs Earned

  0% of Target   50% of Target   100% of Target   150% of Target
(Maximum)

After the end of the year, the Committee determined whether (and to what extent) the NEOs had earned the PRSUs, based on the Company’s performance against the TSR. As calculated for purposes of the PRSUs, the Company’s 2011 TSR 4 ranked within the second quartile, or between 26% and 50% of TSR performance for the Peer Group. Accordingly, the Committee determined that the NEOs had earned 50% of their respective target PRSUs. The earned PRSUs are subject to further time-based vesting and will vest on December 20, 2013, subject to each respective NEO’s continued employment or other service to the Company.

In addition, in connection with his promotion as CEO, Mr. Becker received a one-time promotion award of 19,000 restricted stock units, all of which is subject to cliff vesting on April 27, 2015, the fourth anniversary of the effective date of grant, subject to continued employment through such date.

 

4 Based on the differential between the average daily closing stock prices over the last two months of each of years 2010 and 2011.

 

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Long-Term Cash Incentives

The Committee did not make any new long-term cash incentive awards to any NEO in 2011. During 2011, Mr. Wilcox was eligible to earn an LTI Award of up to $2.3 million. 50% of the award was subject to the Company’s TSR performance, as measured against its Peer Group (determined in the same manner as the NEOs’ PRSUs, as described above), and 50% was based on performance conditions specifically relating to the Company’s global expansion, including progress made on our Chinese joint venture bank. Based on the Company’s relative TSR performance and the significant progress made in preparation of our Chinese joint venture bank, and after the application of the Maximum Guideline, the Committee awarded Mr. Wilcox a total payment of $1.6 million for 2011, payable in three annual installments.

During 2010, the Company had implemented the Cash Long Term Incentive Plan (“Cash LTIP”) to increase the proportion of long-term performance-based pay in our NEOs’ total target compensation packages and to manage the Company’s equity burn rate. In 2011, the Committee increased the NEOs’ long-term equity incentives (as discussed above under “ Equity Incentives ”), and discontinued making new awards under the Cash LTIP. The only awards made under the Cash LTIP plan were in 2010, which cover the 2010-2012 performance period.

Cash LTIP awards are deemed earned at the Committee’s sole discretion and are not guaranteed. The Committee determined 2011 payouts for the 2010 awards based on the Company’s book value growth and relative total shareholder return performance during the 2010-2012 performance period, as follows:

 

       
Target Award Payment:   75% of Target Award
(Threshold  Payment)
  100% of Target Award
(Target Payment)
  125% of Target
Award (Maximum
Payment)

Book Value Growth*

(50% of Target)

  90% of Annual Book Value
Growth Target
  100% of Annual Book Value
Growth Target
  110% of Annual Book
Value Growth Target

Company TSR, as measured against range
of Peer Group TSR

(50% of Target)

  Lower 35% of Peer Group
TSR
  Middle 30% of Peer Group
TSR
  Upper 35% of Peer
Group TSR

 

  *

The calculation of the actual award is intended to be calculated on a linear basis based on the achievement against established book value goals, subject to the Committee’s discretion to adjust the award.

While the Committee intends to primarily consider the above performance goals to determine 2012 payouts under the 2010 awards, the Committee may approve actual awards based on other factors it deems appropriate and adjust the award at its complete discretion.

For 2011, the Committee approved the following Cash LTIP payments for the NEOs and Mr. Wilcox. The Committee considered, among other things: (i) the Company’s achievement of over 110% of its book value target for 2010 and 2011; (ii) the Company’s TSR 5 for 2010 - 2011, which ranked within the middle 30% of the Peer Group; and (iii) overall Company performance. The Committee approved payments of 100% of target for 2011 to each NEO (after adjusting for amounts previously paid for 2010 in order to reflect the cumulative performance of the 2010-2011 period):

 

Participant

  Target Award
for 2010-2012 Three-Year
         Performance Period        
    One-Year
Award for Fiscal Year 2011
    (30% of total  target award)    
 

Greg Becker

  $ 212,600      $ 63,780   

Michael Descheneaux

    107,800        32,340   

David Jones

    150,000        45,000   

Joan Parsons

    181,500        54,450   

Mary Dent

    60,000        18,000   

Ken Wilcox

    900,000        270,000   

 

5 Based on the differential between the average daily closing stock prices over the last two months of each of years 2009 and 2011.

 

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After the 2010-2012 performance period is completed, it is the Committee’s intention to terminate the Cash LTIP.

Executive Benefits

Deferred Compensation

We do not provide NEOs with any Company-funded deferred compensation benefits. However, in order to help them achieve their retirement objectives, we offer each NEO the opportunity to tax-defer a portion of their income, beyond what is allowed to be deferred in the Company’s qualified retirement plan. Specifically, under our Deferred Compensation Plan (“ DCP ”), each individual may defer 5% to 25% of their base pay and 5% to 100% of eligible incentive payments during each plan year. The DCP is an unfunded plan, and participating executives bear the risk of forfeiture in the event that we cannot fund DCP liabilities. We do not match executive deferrals to the DCP, nor do we make any other contributions to the DCP. See “ Compensation for Named Executive Officers—Non-Qualified Deferred Compensation” below.

We establish and maintain a bookkeeping account for each participant which reflects compensation deferrals made by the executive along with any associated earnings, expenses, gains and losses. The amount in a participant’s account is adjusted for hypothetical investment earnings or losses in an amount equivalent to the gains or losses reported by the investment options selected by the participant from among the investment options designated for this purpose by the Company. A participant may, in accordance with rules and procedures we establish, change the investments to be used for the purpose of calculating future hypothetical investment adjustments to the participant’s account. The account of each participant is adjusted each business day to reflect: (a) the hypothetical investment earnings and/or losses described above; (b) participant deferrals; and (c) distributions or withdrawals from the account. Distributions or withdrawals from the DCP shall be made in full accordance with the requirements of Internal Revenue Code Section 409A.

No NEOs participated in the DCP in 2011. Among the NEOs, only Mr. Becker holds a balance due to deferrals made under the plan in 2008.

Employee Retirement Benefits

Our NEOs are eligible to participate in our SVB Financial Group 401(k) and Employee Stock Ownership Plan, our qualified retirement plan that is generally available to all of the Company’s employees. Other than our 401(k) plan, SVB Financial Group does not provide any pension, excess retirement, or SERPs to our NEOs.

Under our 401(k) plan, our U.S. employees, including our NEOs, may make voluntary pre-tax deferrals up to the maximum provided for by IRS regulations. The Company provides dollar-for-dollar matching contributions up to a maximum of 5% of cash compensation or the Internal Revenue Section 401(a) compensation limit, whichever is less. Company 401(k) matching contributions vest immediately upon deposit into the individual’s 401(k) account.

The plan also includes an Employee Stock Ownership Plan (“ ESOP ”). We make discretionary annual contributions for U.S. employees ranging from 0% to 10% of eligible compensation. The Committee determines the amount of the ESOP contribution annually. ESOP contributions may be in the form of cash, the Company’s common stock, or a combination of both. Contributions are determined based on the Company’s performance and are not adjusted to reflect individual performance.

For 2011, the Committee established performance criteria based on the Company’s ROE, similar to the ICP, to fund the ESOP contribution, and established a 5% (of eligible compensation) funding level based on target ROE performance. During 2011, the Committee decided to cap contributions at a maximum of 5%, even if the Company’s ROE achievement exceeded target performance. As a result, despite the Company’s above-target achievement of ROE for 2011, the Committee approved a contribution of 5% of eligible compensation in cash (50%) and the Company’s common stock (50%).

 

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All U.S. regular employees as of December 31, 2011 are eligible to receive an ESOP contribution regardless of whether or not they make deferrals in the 401(k) component of the plan. ESOP contributions vest annually during the first five years of employee service; thereafter, all contributions are fully vested when made.

Health and Welfare Benefits; Paid Time-Off

Our U.S. employees, including our NEOs, are eligible to participate in our standard health and welfare benefits program, which provides insured medical, dental, life, accident, and disability coverage to all of our eligible U.S.-based employees. We do not provide executives with any health and welfare benefits that are not generally available to other Company employees. In addition, we offer our executives paid vacation days, sick days and other paid time-off benefits on the same basis as our employees.

Mr. Wilcox is eligible to participate in our standard U.S. health and welfare benefits program. His work and holiday schedule is the work and holiday schedule for our representative office in Shanghai, China.

Executive Termination Benefits

See “Compensation for Named Executive Officers—Other Post-Employment Payments” below.

Perquisites

We do not have any executive perquisite programs. From time to time, we may provide benefits that may be considered perquisites on a limited or exception basis, which we disclose as required by applicable rules. In 2011, we provided certain benefits to Mr. Wilcox, primarily relating to his international assignment and temporary relocation to Asia. See footnote 36 of the “Summary Compensation Table” below .

Stock Option and Other Equity Grant Practices

Grant Practices for Executive Officers

The Committee approves all equity grants that are made to any executive officer of the Company. Typically, the Committee approves annual equity compensation grants to executives during the first or second quarters of the year, and grants are made effective during an open trading window pursuant to our Insider Trading Policy. The exercise price for stock option grants is equal to the closing market price on the grant’s effective date and grants typically have an annual vesting period of four years, subject to continued employment or service. All 2011 grants to our NEOs were made in accordance with this practice.

For newly-hired executive officers, the Committee typically approves an equity grant amount prior to the executive’s start of employment, and the effective grant date is typically set during an open trading window. This approach ensures that the exercise price of stock options reflects a fair market price, since the exercise price for stock option grants is equal to the closing market price on the grant’s effective date.

Grant Practices for Other Employees

The Board has delegated authority to the Equity Awards Committee to make equity grants to non-executive employees under our 2006 Equity Incentive Plan. The Equity Awards Committee is a committee of two, comprised of our Chief Executive Officer and the Chair of our Board. The Equity Awards Committee may not make equity grants to executives or any non-executive employee that reports directly to the Chief Executive Officer.

The Equity Awards Committee may make grants only within established individual employee and aggregate share limits and in accordance with established requirements regarding the term, vesting period, exercise price and other terms and conditions for the grant. In addition, all grants of stock options, stock appreciation rights, and restricted stock units made by the Equity Awards Committee must be made (or become effective) on the first Monday of each month or, where the first Monday is a Company-observed U.S. holiday,

 

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on the first Tuesday of such month. The Equity Awards Committee must approve all grants in writing on or before the date of grant, subject to the respective employee remaining an employee as of the date of grant. Finally, management updates the Committee regarding all grants made by the Equity Awards Committee on a regular basis. Any grant that does not meet the requirements established for the Equity Awards Committee must be made by the Board, the Committee or other authorized committee.

Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) limits our deductibility of compensation paid to our CEO and each of the next three most highly compensated executive officers (excluding the Chief Financial Officer) in excess of $1,000,000, but excludes “performance-based compensation” from this limit. Stock options and restricted stock units vesting solely upon achievement of performance goals awarded under our 2006 Equity Incentive Plan qualify for this tax deductibility. However, in order to maintain flexibility and promote simplicity in the Committee’s administration of and oversight over executive compensation arrangements, other compensation arrangements, such as performance-based restricted stock units that vest based on the Committee’s discretion, restricted stock units that vest based solely on continued service, and payments under ICP and Cash LTIP, are designed to allow the Committee to balance tax deductibility with other business priorities that affect stockholder value.

Equity Ownership Guidelines for Executive Officers

The Company maintains stock ownership guidelines for the Company’s executive officers, including the NEOs. These stock ownership guidelines reflect the Board’s belief in the importance of aligning the economic interests of stockholders and management. The guidelines are as follows:

 

    Executive Position       Minimum Requirement (number of shares owned)  
  After One Year in
Office
    After Three Years in
Office
    After Five Years in
Office
 

Chief Executive Officer

    12,500        30,000        50,000
President, Chief Financial Officer
and Chief Risk & Strategy Officer
    3,000        8,000        12,000   

All Other Executive Officers

    2,500        6,500        9,500   

 

  * Based on the closing price of the Company’s common stock as of the Record Date of $60.65, this requirement represents a multiple of 3.8 times Mr. Becker’s annual base salary.

The Committee reviews executive equity holdings on a quarterly basis. In evaluating whether executives are meeting the ownership guidelines, the Committee considers the following as shares owned: (1) shares privately held, (2) shares owned through investment in the Company’s stock fund in the SVB Financial Group 401(k) and Employee Stock Ownership Plan, and (3) earned but unvested awards of restricted stock and restricted stock units. The Committee does not count vested or unvested stock options towards the ownership guidelines. Exceptions to meeting the guidelines due to personal financial or other reasons are reviewed by the Governance Committee.

As of December 31, 2011, all of our NEOs were in compliance with the applicable ownership guidelines.

 

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COMPENSATION FOR NAMED EXECUTIVE OFFICERS

Summary Compensation Table

The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2009, 2010 and 2011.

 

Name and Principal

Position

   Year      Salary
    ($) (1)    
    Bonus
    ($) (2)     
    Stock
Awards
($) (3)
    Stock
Option
Awards

     ($) (3)    
    Non-Equity
Incentive Plan

 Compen-
sation
($) 
    Changes in
Pension
Value and
Nonqualified
Deferred
Plan

 Compen-
sation
($)  (4) 
    All Other
Compen-

sation
    ($)    
    Total
         ($)        
 

Greg Becker,

    2009          $ 499,154          $ 170,000          $ 140,592          $ 237,867          $                      -        $ 27,914           $ 54,996   (5)      $ 1,130,523     

President and Chief

Executive Officer

    2010          705,412          479,725   (6)      376,568          324,181          -        16,906           26,338   (7)      1,929,130     
    2011          781,696   (8)      1,183,780   (9)      1,992,210   (10)      618,929          -        (7,300 )        24,500   (11)      4,593,815     

Michael Descheneaux,

    2009          408,548          170,000          115,536          193,764          -        -           59,921   (12)      947,769     

Chief Financial Officer

    2010          485,019          340,425   (13)      288,719          248,542          -        -           26,338   (14)      1,389,043     
    2011          488,749          532,340   (15)      543,330          412,619          -        -           24,500   (16)      2,001,538     

David Jones,

    2009          302,319          200,000          97,440          111,869          -        -           36,719   (17)      748,347     

Chief Credit Officer

    2010          386,425          291,250   (18)      200,824          172,903          -        -           26,338   (19)      1,077,740     
    2011          404,631          445,000   (20)      362,220          257,887          -        -           24,500   (21)      1,494,238     

Joan Parsons,

    2009          287,762          150,000          99,700          96,941          -        -           57,497   (22)      691,900     

Head of U.S. Banking

    2010          316,262          293,163   (23)      132,183          108,831          -        -           26,338   (24)      876,777     
    2011          380,640          454,450   (25)      301,850          180,521          -        -           24,500   (26)      1,341,961     

Mary Dent,

    2009          280,011          100,000          75,168          121,657          -        -           78,152   (27)      654,988     

General Counsel

    2010          346,680          257,500   (28)      163,181          140,475          -        -           26,338   (29)      934,174     
    2011          360,014          368,000   (30)      301,850          232,098          -        -           24,500   (31)      1,286,462     

Ken Wilcox,

    2009          790,223          300,000          253,344          426,570          -        -           95,946   (32)      1,866,083     

Chairman, Silicon

Valley Bank

    2010          1,034,654          1,387,500   (33)      903,800          432,248          -        -           26,338   (34)      3,784,540     
    2011          1,053,885          3,270,000   (35)      -          -          -        -           816,642   (36)      5,140,527     

 

(1)

Includes charitable donations of vacation time.

 

(2)

We have reflected values for the Company’s ICP and Cash LTIP incentive programs under the “Bonus” column because these programs provide for the Committee’s discretion to make final determinations on individual incentive payments. We therefore have reported these payments as part of a discretionary incentive plan under “Bonus” (as opposed to “Non-Equity Incentive Plan Compensation”). See “Elements of Compensation – Annual Cash Incentives” and “- Long-Term Cash Incentives” under “Compensation Discussion and Analysis” above.

 

(3)

Values indicated for restricted stock unit and stock option awards reflect the fair market value of grants made during the fiscal year. Values for performance-based restricted stock unit awards reflect the probable outcome, reported as the target amounts as of the date of grant. Actual outcomes determined by the Committee were as follows: (i) for 2009, 50% of the target amounts were earned; (ii) for 2010, 100% of the target amounts were earned; and (iii) for 2011, 50% of the target amounts were earned. See Elements of Compensation – Equity Incentives under “Compensation Discussion and Analysis” above.

 

(4)

We do not provide NEOs with any Company-funded deferred compensation benefits but do offer each NEO the opportunity to tax-defer a portion of their income. The amount in a participant’s account is adjusted for hypothetical investment earnings or losses in an amount equivalent to the gains or losses reported by the investment options selected by the participant. The amounts below reflect increases or decreases in the value of an NEO’s deferred compensation account based on such hypothetical earnings or losses. Among the NEOs, only Mr. Becker participates in the DCP. See “ Executive Benefits - Deferred Compensation under “Compensation Discussion and Analysis” above.

 

(5)

Other compensation for Mr. Becker in 2009 is comprised of: (a) payment of $42,662 under the Retention Program (“RP”); (b) interest paid of $84 due to delayed payment of 2008 RP; and (c) 401(k) Savings Plan matching contribution of $12,250.

 

(6)

Bonus compensation for Mr. Becker in 2010 is comprised of: (a) Cash LTIP payment of $79,725; and (b) ICP payment of $400,000.

 

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(7)

Other compensation for Mr. Becker in 2010 is comprised of: (a) ESOP contribution of $14,088; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(8)

Salary compensation for Mr. Becker in 2011 includes his promotional salary increase.

 

(9)

Bonus compensation for Mr. Becker in 2011 is comprised of: (a) Cash LTIP payment of $63,780; and (b) ICP payment of $1,120,000.

 

(10)

Stock compensation for Mr. Becker in 2011 includes his one-time promotional grant of 19,000 restricted stock units (subject to four-year cliff vesting).

 

(11)

Other compensation for Mr. Becker in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(12)

Other compensation for Mr. Descheneaux in 2009 is comprised of: (a) RP payment of $19,018; (b) interest paid of $206 due to delayed payment of 2008 RP and ICP incentive program; (c) 401(k) Savings Plan matching contribution of $12,250; and (d) $28,447 in company-paid travel and housing.

 

(13)

Bonus compensation for Mr. Descheneaux in 2010 is comprised of: (a) Cash LTIP payment of $40,425; and (b) ICP payment of $300,000.

 

(14)

Other compensation for Mr. Descheneaux in 2010 is comprised of: (a) ESOP contribution of $14,088; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(15)

Bonus compensation for Mr. Descheneaux in 2011 is comprised of: (a) Cash LTIP payment of $32,340; and (b) ICP payment of $500,000.

 

(16)

Other compensation for Mr. Descheneaux in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(17)

Other compensation for Mr. Jones in 2009 is comprised of: (a) RP payment of $24,469; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(18)

Bonus compensation for Mr. Jones in 2010 is comprised of: (a) Cash LTIP payment of $56,250; and (b) ICP payment of $235,000.

 

(19)

Other compensation for Mr. Jones in 2010 is comprised of: (a) ESOP contribution of $14,088; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(20)

Bonus compensation for Mr. Jones in 2011 is comprised of: (a) Cash LTIP payment of $45,000; and (b) ICP payment of $400,000.

 

(21)

Other compensation for Mr. Jones in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(22)

Other compensation for Ms. Parsons in 2009 is comprised of: (a) RP payment of $17,895; (b) 401(k) Savings Plan matching contribution of $12,250; and (c) relocation benefits of $27,352.

 

(23)

Bonus compensation for Ms. Parsons in 2010 is comprised of: (a) Cash LTIP payment of $68,063; and (b) ICP payment of $225,100.

 

(24)

Other compensation for Ms. Parsons in 2010 is comprised of: (a) ESOP contribution of $14,088; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(25)

Bonus compensation for Ms. Parsons in 2011 is comprised of: (a) Cash LTIP payment of $54,450; and (b) ICP payment of $400,000.

 

(26)

Other compensation for Ms. Parsons in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(27)

Other compensation for Ms. Dent in 2009 is comprised of: (a) special spot incentive of $25,000; (b) RP payment of $40,902; and (c) 401(k) Savings Plan matching contribution of $12,250.

 

(28)

Bonus compensation for Ms. Dent in 2010 is comprised of: (a) Cash LTIP payment of $22,500; and (b) ICP payment of $235,000.

 

(29)

Other compensation for Ms. Dent in 2010 is comprised of: (a) ESOP contribution of $14,088; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(30)

Bonus compensation for Ms. Dent in 2011 is comprised of: (a) Cash LTIP payment of $18,000; and (b) ICP payment of $350,000.

 

(31)

Other compensation for Ms. Dent in 2011 is comprised of: (a) ESOP contribution of $12,250; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

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(32)

Other compensation for Mr. Wilcox in 2009 is comprised of: (a) RP payment of $83,564; (b) interest paid of $132 due to delayed payment of 2008 RP; and (c) 401(k) Savings Plan matching contribution of $12,250.

 

(33)

Bonus compensation for Mr. Wilcox in 2010 is comprised of: (a) Cash LTIP payment of $337,500; and (b) ICP payment of $1,050,000.

 

(34)

Other compensation for Mr. Wilcox in 2010 is comprised of: (a) ESOP contribution of $14,088; and (b) 401(k) Savings Plan matching contribution of $12,250.

 

(35)

Bonus compensation for Mr. Wilcox in 2011 is comprised of: (a) Cash LTIP payment of $270,000; (b) ICP payment of $1,400,000; and (c) long-term cash incentive award of $1,600,000, which is payable in three annual installments (for 2011, he received a payment of $533,333).

 

(36)

Other compensation for Mr. Wilcox in 2011 includes: (a) ESOP contribution of $12,250 (b) 401(k) Savings Plan matching contribution of $12,250; and (c) in connection with his international assignment and temporary relocation to China: (i) relocation benefits of $19,526, (ii) housing benefit and living expenses of $106,217, (iii) transportation and home travel benefits of $54,097, and (iv) total estimated taxes to be paid by the Company under a tax equalization arrangement of approximately $602,546. In addition, other compensation includes $9,756 representing the costs of: (i) an event to celebrate Mr. Wilcox’s transition from the CEO role, as well as a gift from the Company of a personal driving excursion, and (ii) certain Company-sponsored events held throughout 2011 which were attended by Mr. Wilcox’s spouse.

Grants of Plan-Based Awards

The following table sets forth all plan-based awards, including both equity awards and non-equity incentive awards under plans, made to our NEOs during the year ended December 31, 2011.

 

Name

 

 

Grant Date

   

Compensation
Committee

Approval Date

   

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards

 

Estimated Future Payouts

Under Equity Incentive Plan

Awards (1)

 

All Other
Stock
Awards;
Number of
Shares of

Stock or

Units (2)

    All Other
Option
Awards;
Number of
Securities
Underlying
Options
    Exercise
or Base
Price of
Option
Awards (3)
   

Grant Date

Fair Value of
Stock and
Option Awards
(4)

 
     

 

Threshold
($)

  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)
       

Greg Becker

    April 27, 2011        April 20, 2011                                19,000              $ -      $ 1,147,030   

Greg Becker

    April 27, 2011        April 20, 2011                    5,000            301,850   

Greg Becker

    April 27, 2011        April 20, 2011                    4,500            271,665   

Greg Becker

    April 27, 2011        April 20, 2011                      24,000        60.37        618,929   

Michael Descheneaux

    April 27, 2011        April 20, 2011                    3,000            181,110   

Michael Descheneaux

    April 27, 2011        April 20, 2011                    3,000            181,110   

Michael Descheneaux

    April 27, 2011        April 20, 2011                      16,000        60.37        412,619   

David Jones

    April 27, 2011        April 20, 2011                    2,000            120,740   

David Jones

    April 27, 2011        April 20, 2011                    2,000            120,740   

David Jones

    April 27, 2011        April 20, 2011                      10,000        60.37        257,887   

Joan Parsons

    April 27, 2011        April 20, 2011                    2,000            120,740   

Joan Parsons

    April 27, 2011        April 20, 2011                    1,500            90,555   

Joan Parsons

    April 27, 2011        April 20, 2011                      7,000        60.37        180,521   

Mary Dent

    April 27, 2011        April 20, 2011                    2,000            120,740   

Mary Dent

    April 27, 2011        April 20, 2011                    1,500            90,555   

Mary Dent

    April 27, 2011        April 20, 2011                      9,000        60.37        232,098   

Ken Wilcox

    n/a                         

 

(1)

For the performance-based restricted stock unit grants to the NEOs made in 2011, the performance achievement was determined as of December 31, 2011 based upon the performance criteria presented under “Compensation Discussion and Analysis—Equity Incentives” above. Since the achievement under this performance-based restricted stock grant was determined as of December 31, 2011, there are no estimated future payouts to be disclosed in the table above. See “Compensation Discussion and Analysis—Equity Incentives” above.

 

(2)

The stock awards reported above reflect performance-based restricted stock unit awards granted to each NEO. The Committee determined in January 2012 that 50% of the target for these awards had been earned for 2011. The target payout of the awards to Mr. Becker, Mr. Descheneaux, Mr. Jones, Ms. Parsons and Ms. Dent were 9,000, 6,000, 4,000, 3,000 and 3,000 shares, respectively. The achievement resulted in a 50% payout of target, which is subject to further time-based vesting until December 20, 2013. Mr. Wilcox did not receive any equity awards in 2011.

 

(3)

Only the exercise price of the stock option awards is reported in the table above.

 

(4)

The fair values reported above are also reported in the “Summary Compensation Table” under the “Stock Awards” and “Stock Option Awards” columns. With respect to the restricted stock unit awards, the fair value of the awards is calculated based upon the per share price of $60.37, the fair market value on the date of grant.

 

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Table of Contents

Option Exercises and Stock Vested

The following table sets forth the number of securities underlying equity awards that vested (in the case of restricted shares) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2011, and the value realized upon such vesting or exercise.

 

    OPTION AWARDS     STOCK AWARDS  

Name

  Number of
Shares Acquired
on Exercise
    Value Realized
on Exercise
    Number of
Shares
Acquired on
Vesting
    Value Realized
on Vesting
 

Greg Becker

    54,161        $ 1,450,906        2,525      $ 123,321     

Michael Descheneaux

    12,100        198,622        2,075        101,343     

David Jones

    62,000        1,729,822        3,155        157,640     

Joan Parsons

    16,054        624,036        2,962        156,632     

Mary Dent

    12,523        115,853        1,600        79,052     

Ken Wilcox

    78,247        2,211,787        4,550        222,222     

Outstanding Equity Awards at Fiscal Year End

The following tables set forth all outstanding equity awards to the NEOs as of December 31, 2011. The exercise price for each of the stock option grants reported below is equal to the closing market price on the grant date. The vesting schedule for each outstanding equity award is provided in the footnotes to the tables below. Outstanding stock awards are valued based upon the closing market price of the Company’s stock as of December 31, 2011, which was $47.69 per share.

 

    OPTION AWARDS   STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options

 (# Exercisable) 
    Number of
Securities
Underlying
Unexercised
Options

 (# Unexercisable) 
    Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price

 (per  option) 
    Option
Expriation Date
  Number of
Shares or
Units of
Stock

That Have
Not
Vested
    Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
    Equity
Incentive
Plan Awards;
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
    Equity
Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
 

Greg Becker

    8,339        -              -        $ 24.03      January 17, 2012        
    7,500        -              -        31.29      April 17, 2012        
    12,500        -              -        19.24      November 5, 2012        
    15,000        -              -        46.31      April 26, 2012        
    10,000        -              -        50.38      May 2, 2013        
    12,050        -              -        52.72      May 22, 2014        
    12,338        4,112  (1)        -        48.76      April 29, 2015        
    8,226        8,224  (2)        -        27.84      May 12, 2016        
    4,262        12,783  (3)        -        45.19      July 27, 2017        
    -        24,000  (4)        -        60.37      April 27, 2018        
              8,333  (5)      $ 397,401        -        -   
              4,500  (6)        214,605        -        -   
              5,000  (7)        238,450        -        -   
              19,000  (8)        906,110        -        -   

 

(1)

4,112 options will vest on April 29, 2012.

 

(2)

4,112 options will vest on November 20, 2012; and 4,112 options will vest on November 20, 2013.

 

(3)

4,261 options will vest on July 27, 2012; 4,261 options will vest on July 27, 2013; and 4,261 options will vest on July 27, 2014.

 

(4)

6,000 options will vest on April 27, 2012; 6,000 options will vest on April 27, 2013; 6,000 options will vest on April 27, 2014; and 6,000 options will vest on April 27, 2015.

 

(5)

8,333 restricted stock units will vest on December 31, 2012.

 

(6)

4,500 restricted stock units will vest on December 20, 2013.

 

(7)

1,250 restricted stock units will vest on April 27, 2012; 1,250 restricted stock units will vest on April 27, 2013; 1,250 restricted stock units will vest on April 27, 2014; and 1,250 restricted stock units will vest on April 27, 2015.

 

(8)

19,000 restricted stock units will vest on April 27, 2015.

 

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Table of Contents
      OPTION AWARDS   STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
  (# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expriation Date
  Number of
Shares or
Units of
Stock
That Have
Not
Vested
    Market
Value of
Shares or
Units of

Stock That
Have Not
Vested
    Equity
Incentive
Plan Awards;
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
    Equity
Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
 

Michael Descheneaux

    2,400        -              -        $ 46.42      November 9, 2013        
    9,350        -              -        52.72      May 22, 2014        
    7,550        3,350  (1)        -        48.76      April 29, 2015        
    4,700        6,700  (2)        -        27.84      May 12, 2016        
    3,267        9,801  (3)        -        45.19      July 27, 2017        
    -        16,000  (4)        -        60.37      April 27, 2018        
              6,389  (5)      $ 304,691        -        -   
              3,000  (6)        143,070        -        -   
              3,000  (7)        143,070        -        -   

 

(1)

3,350 options will vest on April 29, 2012.

 

(2)

3,350 options will vest on November 20, 2012; and 3,350 options will vest on November 20, 2013.

 

(3)

3,267 options will vest on July 27, 2012; 3,267 options will vest on July 27, 2013; and 3,267 options will vest on July 27, 2014.

 

(4)

4,000 options will vest on April 27, 2012; 4,000 options will vest on April 27, 2013; 4,000 options will vest on April 27, 2014; and 4,000 options will vest on April 27, 2015.

 

(5)

6,389 restricted stock units will vest on December 31, 2012.

 

(6)

3,000 restricted stock units will vest on December 20, 2013.

 

(7)

750 restricted stock units will vest on April 27, 2012; 750 restricted stock units will vest on April 27, 2013; 750 restricted stock units will vest on April 27, 2014; and 750 restricted stock units will vest on April 27, 2015.

 

    OPTION AWARDS   STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price

 (per  option) 
    Option
Expriation Date
  Number of
Shares or
Units of
Stock
That Have
Not

Vested
    Market
Value of
Shares or

Units of
Stock That
Have Not
Vested
    Equity
Incentive
Plan Awards;
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
    Equity
Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
 

David Jones

    3,500        -              -        $ 53.29      April 4, 2013        
    3,250        -              -        48.15      April 2, 2014        
    3,000        1,000  (1)        -        48.76      April 29, 2015        
    2,000        4,000  (2)        -        27.84      May 12, 2016        
    2,273        6,818  (3)        -        45.19      July 27, 2017        
    -        10,000  (4)        -        60.37      April 27, 2018        
              4,444  (5)      $   211,934        -        -   
              2,000  (6)        95,380        -        -   
              437  (7)        20,841        -        -   
              2,000  (8)        95,380        -        -   

 

(1)

1,000 options will vest on April 29, 2012.

 

(2)

2,000 options will vest on May 12, 2012; and 2,000 options will vest on May 12, 2013.

 

(3)

2,273 options will vest on July 27, 2012; 2,273 options will vest on July 27, 2013; and 2,272 options will vest on July 27, 2014.

 

(4)

2,500 options will vest on April 27, 2012; 2,500 options will vest on April 27, 2013; 2,500 options will vest on April 27, 2014; and 2,500 options will vest on April 27, 2015.

 

(5)

4,444 restricted stock units will vest on December 31, 2012.

 

(6)

2,000 restricted stock units will vest on December 20, 2013.

 

(7)

437 restricted stock units will vest on April 29, 2012.

 

(8)

500 restricted stock units will vest on April 27, 2012; 500 restricted stock units will vest on April 27, 2013; 500 restricted stock units will vest on April 27, 2014; and 500 restricted stock units will vest on April 27, 2015.

 

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Table of Contents
    OPTION AWARDS   STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price

 (per  option) 
    Option
Expriation Date
  Number of
Shares or

Units of
Stock
That Have
Not
Vested
    Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
    Equity
Incentive
Plan Awards;
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
    Equity
Incentive
Plan Awards;
Market or
Payout Value
of Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
 

Joan Parsons

    5,000        -               -        $ 31.29        April 17, 2012        
    10,000        -               -        22.50        September 4, 2012        
    3,500        -               -        43.49        April 1, 2012        
    3,000        -               -        53.29        April 4, 2013        
    2,750        -               -        48.15        April 2, 2014        
    2,063        687  (1)        -        48.76        April 29, 2015        
    1,250        1,250  (2)        -        23.16        January 27, 2016        
    1,750        1,750  (3)        -        19.48        April 28, 2016        
    1,250        1,250  (4)        -        42.45        October 27, 2016        
    1,250        3,750  (5)        -        49.18        April 30, 2017        
    171        511  (6)        -        43.53        October 26, 2017        
    -        7,000  (7)        -        60.37        April 27, 2018        
              1,500    (8)      $ 71,535        -        -   
              312    (9)        14,879        -        -   
              500  (10)        23,845        -        -   
              874  (11)        41,681        -        -   
              500  (12)        23,845        -        -   
              1,500  (13)        71,535        -        -   
              582  (14)        27,756        -        -   
              2,000  (15)        95,380        -        -   

 

(1)

687 options will vest on April 29, 2012.

 

(2)

625 options vested on January 27, 2012; and 625 options will vest on January 27, 2013.

 

(3)

875 options will vest on April 28, 2012; and 875 options will vest on April 28, 2013.

 

(4)

625 options will vest on October 27, 2012; and 625 options will vest on October 27, 2013.

 

(5)

1,250 options will vest on April 30, 2012; 1,250 options will vest on April 30, 2013; and 1,250 options will vest on April 30, 2014.

 

(6)

171 options will vest on October 26, 2012; 170 options will vest on October 26, 2013; and 170 options will vest on October 26, 2014.

 

(7)

1,750 options will best on April 27, 2012; 1,750 options will vest on April 27, 2013; 1,750 options will vest on April 27, 2014; and 1,750 options will vest on April 27, 2015.

 

(8)

1,500 restricted stock units will vest on December 20, 2013.

 

(9)

312 restricted stock units will vest on April 29, 2012.

 

(10)

250 restricted stock units vested on January 27, 2012; and 250 restricted stock units will vest on January 27, 2013.

 

(11)

437 restricted stock units will vest on April 28, 2012; and 437 restricted stock units will vest on April 28, 2013.

 

(12)

250 restricted stock units will vest on October 27, 2012; and 250 restricted stock units will vest on October 27, 2013.

 

(13)

500 restricted stock units will vest on April 30, 2012; 500 restricted stock units will vest on April 30, 2013; and 500 restricted stock units will vest on April 30, 2014.

 

(14)

194 restricted stock units will vest on October 26, 2012; 194 restricted stock units will vest on October 26, 2013; and 194 restricted stock units will vest on October 26, 2014.

 

(15)

500 restricted stock units will vest on April 27, 2012; 500 restricted stock units will vest on April 27, 2013; 500 restricted stock units will vest on April 27, 2014; and 500 restricted stock units will vest on April 27, 2015.

 

65


Table of Contents
    OPTION AWARDS   STOCK AWARDS  

Name

  Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    Number of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
    Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options
    Option
Exercise
Price
(per option)
    Option
Expriation Date
  Number of
Shares or
Units of
Stock

That Have
Not
Vested
    Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
    Equity
Incentive

Plan Awards;
Number of
Unearned
Shares,

Units or
Other Rights
That Have
Not Vested
    Equity
Incentive

Plan Awards;
Market or
Payout Value
of Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
 

Mary Dent

    11,752        -              -        $ 48.49      June 2, 2013        
    1,425        -              -        52.72      May 22, 2014        
    6,525        2,175  (1)        -        48.76      April 29, 2015