Exhibit 10.14
SVB FINANCIAL
GROUP
CHANGE IN CONTROL SEVERANCE PLAN
AND
SUMMARY PLAN
DESCRIPTION
1. Introduction. The purpose
of this Plan is to provide assurances of specified severance
benefits to eligible key employees of the Company whose employment
is subject to being involuntarily terminated (other than for Cause,
death or permanent disability) or they resign from such employment
for Good Reason following a Change in Control. The Company
recognizes that the potential of a Change in Control can be a
distraction to key employees and can cause such key employees to
consider alternative employment opportunities. The Plan is intended
to (i) assure that the Company will have continued dedication
and objectivity of its key employees, notwithstanding the
possibility, threat or occurrence of a Change in Control and
(ii) provide the Company’s key employees with an
incentive to continue their employment and to motivate its key
employees to maximize the value of the Company upon a Change in
Control for the benefit of its stockholders. This Plan is an
“employee welfare benefit plan,” as defined in
Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended. This Plan is governed by ERISA and, to the extent
applicable, the laws of the State of California. This document
constitutes both the written instrument under which the Plan is
maintained and the required summary plan description for the
Plan.
2. Important Terms. To help
you understand how this Plan works, it is important to know the
following terms:
(a)
“Administrator” means the Company, acting
through the Compensation Committee of the Board or any person to
whom the Administrator has delegated any authority or
responsibility pursuant to Section 7, but only to the extent
of such delegation.
(b) “Base Salary”
means the base salary rate in effect for the subject Covered
Employee at the time of termination, or, if greater, as in effect
immediately prior to a Change in Control, exclusive of any bonus or
other incentive cash compensation, income from any stock options or
other equity awards, supplemental deferred compensation
contributions made by the Company, pension or profit sharing
contributions or distributions (except as provided below),
insurance payments or proceeds, fringe benefits, or other form of
additional compensation, but specifically including any amounts
withheld from base salary to provide benefits pursuant to section
125, 401(k), or 402(g) of the Internal Revenue Code or pursuant to
any other plan or program of deferred compensation.
(c) “Board” means
the Board of Directors of the Company.
(d) “Cause” means
a Covered Employee’s dismissal or discharge by the Company
(or, if applicable, by the successor entity or one of their
respective affiliates) for one of the following reasons:
(a) the commission by the Covered Employee of an act of
deliberately criminal or fraudulent misconduct in the line of duty
to the Company or one of its affiliates, including, but not limited
to, the willful violation of any material law, rule, regulation, or
cease and desist order applicable to the Covered Employee or the
Company (or one of its affiliates), a deliberate act that
constitutes a conflict of interest with the Company or the
Company’s stockholders, or a deliberate breach of a fiduciary
duty owed by the Covered Employee to the Company (or one of its
affiliates) or the Company’s stockholders; (b) the
Covered Employee’s
habitual absence from work,
intentional failure to perform stated duties, gross negligence, or
gross incompetence in the performance of stated duties;
(c) the Covered Employee’s chronic alcohol or drug abuse
that results in a material impairment of the Covered
Employee’s ability to perform his or her duties as an
employee of the Company (or one of its affiliates) after reasonable
accommodation; (d) the rendering of a verdict of guilty
against the Covered Employee for any felony (other than a law
relating to a traffic violation or similar offense), whether or not
in the line of duty; or (e) the Covered Employee’s
removal from his or her office with the Company or (one of its
affiliates) pursuant to an effective order under Section 8(e)
of the Federal Deposit Insurance Act 12 U.S.C.
Section 1818(e).
The termination of a Covered
Employee’s employment will be deemed to be for
“Cause” if such termination occurs as a result of the
death or permanent disability of the Covered Employee.
(e) “Change in
Control” means (i) A merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in beneficial owners of the total
voting power in the election of directors represented by the voting
securities (“ Voting Securities ”) of the
Company (as the case may be) outstanding immediately prior thereto
continuing to beneficially own securities representing (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least fifty percent (50%) of the
total Voting Securities of the Company, or of such surviving
entity, outstanding immediately after such merger or consolidation;
(ii) the filing of a plan of liquidation or dissolution of the
Company or the closing of the sale, lease, exchange or other
transfer or disposition by the Company of all or substantially all
of the Company’s assets; (iii) any person (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “ Exchange Act ”)) ,
other than (A) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or (B) a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their beneficial
ownership of stock in the Company, is or becomes the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of the securities of the Company
representing fifty percent (50%) or more of the Voting
Securities; or (iv) any person (as such term is used in
Sections 13(d) or 14(d) of the Exchange Act), other than (A) a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or (B) a corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock in
the Company, is or becomes the beneficial owner (within the meaning
or Rule 13d-3 under the Exchange Act), directly or indirectly, of
the securities of the Company representing twenty-five percent
(25%) or more of the Voting Securities of such corporation,
and within twelve (12) months of the occurrence of such event,
a change in the composition of the Board occurs as a result of
which sixty percent (60%) or fewer of the Directors are
Incumbent Directors.
(f) “Company”
means SVB Financial Group, a Delaware corporation, and any
successor by merger, acquisition, consolidation or otherwise that
assumes the obligations of the Company under the Plan.
(g) “Covered
Employee” means an employee of the Company who has been
designated by the Administrator to participate in the Plan. Each
such designated employee will be a Tier 1, Tier 2 or Tier 3 Covered
Employee as defined below.
(h) “Determination
Period” means the time period beginning on the date of
the Change in Control and ending twenty-four (24) months
following the Change in Control.
(i) “Effective
Date” means March 13, 2006.
(j) “ERISA” means
the Employee Retirement Income Security Act of 1974, as
amended.
(k) “Good Reason”
means the occurrence of any of the following events without the
Covered Employee’s express written consent: (i) the
material, involuntary reduction in the Covered Employee’s
responsibilities, authorities or functions as an employee of the
Company and/or affiliate thereof as in effect immediately prior to
a Change in Control, except in connection with the termination of
the Covered Employee’s employment for death, disability,
retirement, fraud, misappropriation, embezzlement or any listed
exclusion from the definition of Cause; (ii) a material
reduction in the Covered Employee’s Base Salary; (iii) a
reduction in the Covered Employee’s Total Compensation to
less than 85% of the amount provided to the Covered Employee for
the last full calendar year immediately preceding the occurrence of
a Change in Control; or (iv) a relocation of the Covered
Employee to a location more than fifty (50) miles from the
location at which the Covered Employee performed the Covered
Employee’s duties prior to a Change in Control, except for
required travel by the Covered Employee on the Company’s
business to an extent substantially consistent with the Covered
Employee’s business travel obligations at the time of a
Change in Control.
(l) “ Incumbent
Directors ” means members of the Board who either
(A) are members of the Board as of the date hereof,
(B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the members of the
Board who are Incumbent Directors described in (A) above at
the time of such election or nomination, or (C) are elected,
or nominated for election, to the Board with the affirmative votes
of at least a majority of the members of the Board who are
Incumbent Directors described in (A) or (B) above at the
time of such election or nomination. Notwithstanding the foregoing,
“ Incumbent Directors ” will not include an
individual whose election or nomination to the Board occurs in
order to provide representation for a person or group of related
persons who have initiated or encouraged an actual or threatened
proxy contest relating to the election of members of the
Board.
(m) “Involuntary
Termination” means a termination of employment of a
Covered Employee under the circumstances described in
Section 4(a).
(n) “Plan” means
this SVB Financial Group Change in Control Severance Plan, as set
forth in this document, and as hereafter amended from time to
time.
(o) “Severance
Benefit” means the compensation and other benefits the
Covered Employee will be provided pursuant to
Section 4.
(p) “Tier 1 Covered
Employee” means the Company’s Chief Executive
Officer.
(q) “Tier 2 Covered
Employee” means the Company’s Chief Financial
Officer; Chief Strategy Officer; and President, Silicon Valley
Bank.
(r) “Tier 3 Covered
Employee” means all individuals designated as executive
officers by the Company not already included as a Tier 1 or Tier 2
Covered Employee.
(s) “Total
Compensation” means the amount of compensation paid by
the Company to a Covered Employee with respect to the calendar year
immediately preceding the occurrence of a Change in Control. Such
amount will include the following amounts paid with respect to such
calendar year: the Covered Employee’s Base Salary, any annual
target incentive compensation, and any amounts withheld from the
Covered Employee’s base salary or bonus to provide benefits
pursuant to section 125, 401(k), or 402(g) of the Internal Revenue
Code or pursuant to any other plan or program of deferred
compensation. Such amount will exclude any bonus declared or paid
from the warrant incentive plan of the Company, overtime pay, any
income from any stock options or other equity awards, supplemental
deferred compensation contributions made by the Company, pension or
profit sharing contributions or distributions (except included
above), insurance payments or proceeds, fringe benefits, amounts
payable under the Company’s Retention Program Plan) and other
forms of additional compensation. Notwithstanding the foregoing,
any annual incentive compensation declared for the calendar year
immediately the occurrence of a Change in Control will relate to
the Covered Employee’s performance in the preceding calendar
year.
3. Eligibility for Severance
Benefit. An individual is eligible for the Severance Benefit
under the Plan, in the amount set forth in Section 4,
only if he or she is a Covered Employee on the date
he or she experiences an Involuntary Termination and executes, and
does not revoke, a release in favor of the Company as required by
Section 4(c).
4. Severance Benefits
.
(a) Triggering Event. A
Covered Employee will receive the benefits described in
Section 4(b) if at any time within the Determination Period
the Company (or any parent or subsidiary of the Company) terminates
such Covered Employee’s employment without Cause,
or
(i) at any time within the
Determination Period the Covered Employee terminates employment
with the Company (or any parent or subsidiary of the Company)
following the occurrence of a Good Reason event, provided that such
termination shall not be considered to have occurred for Good
Reason unless the Covered Employee provides written notice to the
Company within 90 days after the occurrence of the Good Reason
event and the Company fails to cure the issues that Executive
believes constitute Good Reason within 30 days after receipt of
such notice, and
the Covered Employee complies with
the other requirements of this Section.
(ii) Benefits. Severance
Benefit .
(1) Tier 1 Covered Employee .
Each Tier 1 Covered Employee will be entitled to receive a lump sum
cash payment equal to 300% of his or her Base Salary and target
incentive bonus for the year during which such termination
occurs.
(2) Tier 2 Covered Employee .
Each Tier 2 Covered Employee will be entitled to receive a lump sum
cash payment equal to 200% of his or her Base Salary and target
incentive bonus for the year during which such termination
occurs.
(3) Tier 3 Covered Employee .
Each Tier 3 Covered Employee will be entitled to receive a lump sum
cash payment equal to 100% of his or her Base Salary and target
incentive bonus for the year during which such termination
occurs.
(iii) Such payment will be made
within 60 days after the release required by Section 4(c)
becomes effective. Continued Medical Benefits . If the
Covered Employee, and any spouse and/or dependents of the Covered
Employee (“ Family Members ”) has medical and
dental coverage on the date of Covered Employee’s termination
of employment under a group health plan sponsored by the Company,
the Company will pay or reimburse Covered Employee for the total
applicable premium cost for medical, dental and vision coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1986,
as amended, and all applicable regulations (referred to
collectively as “ COBRA ”) for Covered Employee
and his or her Family Members for a
