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DEF 14A 1 si2021proxystatement.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934


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☐			Preliminary Proxy Statement
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☒			Definitive Proxy Statement
☐			Definitive Additional Materials
☐			Soliciting Material Pursuant to §240.14a-12

Silvergate Capital Corporation

(Name of Registrant as Specified in its Charter)

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4250 Executive Square, Suite 300

La Jolla, California 92037

April 15, 2021

Dear Fellow Stockholder:

On behalf of the Board of Directors and management of Silvergate Capital Corporation (the “Company”), you are cordially invited to attend the Annual Meeting of Stockholders of the Company (“Annual Meeting”). The Annual Meeting will be held online at www.virtualshareholdermeeting.com/SI2021, on Friday, June 11, 2021, at 8:00 A.M., Pacific Time.

The attached Notice of the Annual Meeting (“Notice”) and Proxy Statement describe in greater detail all of the formal business that will be transacted at the Annual Meeting. There will not be a physical meeting at the Company’s headquarters office. You will be able to attend the Annual Meeting online, vote your shares electronically, and submit your questions during the meeting by visiting: www.virtualshareholdermeeting.com/SI2021. Directors and officers of the Company will be available at the Annual Meeting to respond to any questions that you may have regarding the business to be transacted.

The Company’s Board of Directors has determined that each of the proposals that will be presented to the stockholders for their consideration at the Annual Meeting are in the best interests of the Company and its stockholders, and unanimously recommends and urges you to vote “FOR” each director nominee, and “FOR” ratifying the appointment of Crowe LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. If any other business is properly presented at the Annual Meeting, the proxies will be voted in accordance with the recommendations of the Company’s Board of Directors.

We are distributing our proxy materials to stockholders via the Internet under the “Notice and Access” rules of the U.S. Securities and Exchange Commission. We believe this expedites stockholders’ receipt of proxy materials, lowers the Annual Meeting costs and conserves natural resources. As a result, we are mailing to many stockholders a Notice of Internet Availability of Proxy Materials (“Notice of Availability”), rather than a paper copy of the Notice and Proxy Statement and 2020 Annual Report to Stockholders, which includes the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The Notice of Internet Availability contains instructions on how to access the proxy materials online, vote online and obtain, if desired, a paper copy of our proxy materials. The Notice of Internet Availability is not a proxy card and cannot be used to vote your shares. You will not receive paper copies of the proxy materials unless you request the materials by following the instructions on the Notice of Internet Availability or on the website referred to in the Notice.

We encourage you to attend the Annual Meeting online, but if you are unable to attend, it is important that you vote in advance via the Internet, by telephone, or sign, date and return the enclosed proxy card in the enclosed postage-paid envelope. Your cooperation is appreciated since a majority of the Class A common stock must be represented, either in person or by proxy, to constitute a quorum for the transaction of business at the Annual Meeting.

On behalf of the Board of Directors and all of the employees of the Company, we thank you for your continued support.

Sincerely,

Alan J. Lane
President and Chief Executive Officer

Silvergate Capital Corporation

4250 Executive Square, Suite 300

La Jolla, California 92037

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the “Annual Meeting”) of Silvergate Capital Corporation (the “Company”) will be held online at www.virtualshareholdermeetin.com/SI2021, on Friday, June 11, 2021, at 8:00 A.M., Pacific Time, for the following purposes:

1.To elect three Class III directors to serve for a three-year term ending at the 2024 annual meeting of stockholders or until their successor is duly elected and qualified.

2.To ratify the appointment of Crowe LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.

The Board of Directors (the “Board”) is not aware of any other business that will be presented for consideration at the Annual Meeting. If any other matters should be properly presented at the Annual Meeting or any adjournments or postponements of the Annual Meeting for action by stockholders, the persons named in the form of proxy will vote the proxy in accordance with their best judgment on that matter.

The Board recommends that you vote “FOR” each of the director nominees, and “FOR” ratification of the appointment of Crowe LLP as the Company’s independent registered public accounting firm.

Only stockholders of record as of the close of business on April 9, 2021 are entitled to receive notice of, to attend and to vote at the Annual Meeting. If you are a beneficial owner as of that date, you will receive communications from your broker, bank or other nominee about the Annual Meeting and how to direct the vote of your shares, and you are welcome to attend the Annual Meeting online, all as described in more detail in the attached Proxy Statement.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on Friday, June 11, 2021. The Proxy Statement, form of Proxy, and our 2020 Annual Report to Stockholders, which includes the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, are available on the Internet at www.proxyvote.com and on our corporate website at www.silvergate.com under the “Investor Relations” link.

By Order of the Board of Directors,

Dennis S. Frank

Chairman of the Board of Directors

April 15, 2021


TABLE OF CONTENTS

Proxy Statement - General Information			2
Proposal 1 - Election of Directors			7
Executive Offi cers Who Are Not Serv ing a s Directors			11
Corporate Governance			13
Committees of the Board of Directors			15
Beneficial Ownership of Class A Common Stock			20
Compensation of Non-Employee Directors			21
Executive Compensation			22
Certain Relationships and Related Party Transactions			29
Delinquent Section 16(A) Reports			32
Proposal 2 - Ratif y the Appointment of Crowe LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 202 1			33
Report of the Audit Committee			34
Annual Report to Stockholders			34
Stockholder Proposals for the 2022 Annual Meeting			34
Other Business			35
Stockholders Sharing the Same Address			35


Class III Director Nominees:

Paul D. Colucci Age: 47						Mr. Colucci owns and operates a private real estate company focused on the investment, management, and development of real estate opportunities in Southern California. Portfolio asset types include multi-family, office, industrial and single-family housing. He previously worked for Goldman Sachs, Inc. in the real estate investment-banking group in New York City. He also worked for Batchelder and Partners, a boutique investment bank focusing on mergers and acquisitions and corporate finance advisory services. Mr. Colucci earned a Bachelor of Arts degree in Business Administration from the University of San Diego. In nominating Mr. Colucci, the Nominating and Corporate Governance Committee considered as important factors Mr. Colucci's investment banking, financial advisory, and real estate investment experience.
Director Since: 2013
Committees: Audit; Compensation

Thomas C. Dircks Age: 63						Mr. Dircks is a Managing Director of Charterhouse Strategic Partners, a provider of strategically focused investments in growth companies in the United States. Mr. Dircks was previously Managing Partner of Charterhouse Equity Partners and was responsible for managing and overseeing the investment of Charterhouse’s multi billion dollars of North America focused institutional private equity funds. Prior to joining Charterhouse, he was employed by PricewaterhouseCoopers as a certified public accountant. He holds a Bachelor of Science in Accounting and a Masters of Business Administration from Fordham University. In nominating Mr. Dircks, the Nominating and Corporate Governance Committee considered as important factors Mr. Dircks’s public accounting background and 36 years of experience in making and managing substantial private equity investments.
Director Since: 2003
Committees: Audit; Nominating and Corporate Governance (Chair)

Colleen Sullivan Age: 48						Ms. Sullivan is the CEO of CMT Digital, a division of the CMT Group, where she has been a partner since 2013. CMT Digital is focused on digital asset trading, blockchain technology investments, and legal/policy engagement in the digital asset/blockchain technology industry. She also serves on the Advisory Board of the Chamber of Digital Commerce, has practiced law in Illinois since 2001, and was one of the founding members of the female-run law firm, Sullivan Wolf Kailus LLC. Ms. Sullivan holds a Bachelor of Science in Accounting from the University of St. Francis and Juris Doctor from the DePaul University College of Law. In nominating Ms. Sullivan, the Nominating and Corporate Governance Committee considered as important factors Ms. Sullivan's significant expertise in the digital asset/blockchain technology industry.
Director Since: 2020
Committees: Compensation


Continuing Directors:

Class I Directors:

Robert C. Campbell Age: 71						Mr. Campbell is an attorney who has specialized in corporate and commercial law. Through his ownership of Hendron Holding Corporation (the successor company to Charterhouse Canada). Mr. Campbell has engaged in the business of merchant banking and venture capital investing. He was one of the initial investors in Coastal Savings Bank (Houston, Texas), which was the first financial institution purchased under the Southwest Plan in the wake of the savings and loan crisis in the U.S. Subsequently he was one of the investors involved in the 1996 recapitalization of the Company and Silvergate Bank, where he currently serves as Lead Director for each, as well as a member of several board committees. He is also an experienced investor in real estate properties in Canada and the U.S. Mr. Campbell holds a Bachelor of Arts degree from York University as well as a law degree from Osgood Hall Law School and practiced corporate commercial law in Toronto for 10 years until 1986. Mr. Campbell’s qualifications to serve on our Board include his diverse legal, financial, real estate, and investment experience over four decades.
Director Since: 1996
Committees: Audit; Compensation (Chair); Nominating and Corporate Governance

Dennis S. Frank Age: 65						Mr. Frank has been Chairman of the Board of both the Bank and the Company since November 1996 and served as Chief Executive Officer of the Company from November 1996 until December 2017. He also served as Chief Executive Officer of the Bank from November 1996 until July 2007. Mr. Frank is also President of PDL Management LLC, Houston, Texas, a private investment company. From 1988 to 1993, Mr. Frank was a Managing Director and major shareholder of Coastal Banc SSB, Houston, Texas, and he served as director of Coastal Banc from 1988 until its sale to Hibernia Bancorp in May of 2004. From 1980 through 1987, Mr. Frank was a Vice President of Goldman, Sachs & Co. in New York. He has a Master of Business Administration and a Bachelor of Science degree in Business from New York University. Mr. Frank’s qualifications to serve on our Board include extensive financial services industry experience and his roles as an executive manager and director of banking companies since 1988, including over 20 years as Chairman and Chief Executive Officer of the Company and the Bank.
Director since: 1996
Committees: None

Alan J. Lane Age: 58						Mr. Lane has been with the Company since December 2008. He is Director and Chief Executive Officer of the Bank and is Director, Chief Executive Officer and President of the Company. Mr. Lane has 40 years of corporate and financial institution leadership experience. He formerly held the positions of Director, President and Chief Operating Officer of Southwest Community Bancorp; Vice-Chairman and Chief Executive Officer of Financial Data Solutions, Inc.; and Director and Chief Executive Officer of Business Bancorp. In addition to his financial institution experience, Mr. Lane has served as President/CEO or Chief Financial Officer of both manufacturing and retail companies. Mr. Lane serves on the Board of Directors of Natural Alternatives International, Inc. He earned his Bachelor of Arts in Economics from San Diego State University. Mr. Lane’s qualifications to serve on our Board include his broad background in the banking industry since the 1980s and executive management experience with multiple banking institutions and other companies over this period.
Director Since: 2008
Committees: None


Class II Directors:

Karen F. Brassfield Age: 73						Ms. Brassfield joined the Bank in March 2009 as Senior Vice President and Chief Financial Officer and served as Executive Vice President and Chief Banking Officer from September 2011 to December 2013. She previously was Chief Administrative Officer for San Diego National Bank. Prior to San Diego National Bank, Ms. Brassfield was Chief Financial Officer for Fallbrook National Bank, Temecula, California, and Chief Administrative Officer for First National Bank, San Diego. Ms. Brassfield received a Bachelor of Arts in Economics from Lawrence University, Appleton, Wisconsin. She is a graduate of LEAD San Diego. Ms. Brassfield's qualifications to serve on our Board include her extensive experience in the Southern California banking industry over several decades in administrative, financial, and senior management roles with several institutions.
Director Since: 2013
Committees: Audit (Chair)

Michael T. Lempres Age: 61						Mr. Lempres brings deep experience in both digital assets and traditional financial services. He serves as an advisor and director on numerous digital asset and financial technology projects and companies. He served as executive in residence at venture capital firm Andreessen Horowitz and worked as chief legal and risk officer of Coinbase, Inc., the nation’s leading digital currency exchange, general counsel of BitNet, Inc., an early digital currency company, and the senior attorney at Silicon Valley Bank. Earlier in his career he served as general counsel to the Pacific Exchange, a national securities exchange. In the public sector, Mr. Lempres has been appointed by three presidential administrations; he served as a White House Fellow and held several positions in the U.S. Department of Justice, including deputy associate attorney general. Mr. Lempres holds an A.B. degree from Dartmouth College and a law degree from Boalt Hall School of Law, University of California, Berkeley. Mr. Lempres's qualifications to serve on our Board include his extensive legal experience, including his service as chief legal and risk officer with one of the nation's largest digital currency exchanges, his role as the senior attorney at a major California bank with a special technology focus, and his continuing activities and roles in venture capital and with other digital currency companies.
Director Since: 2019
Committees: Nominating and Corporate Governance

Scott A. Reed Age: 50						Mr. Reed is partner, director and co-founder of BankCap Partners. Mr. Reed was recently CEO of LF Capital Acquisition Corp., a publicly-traded special purpose acquisition corporation. Mr. Reed’s previous positions include derivatives trader with Swiss Bank Corporation, a consultant with Bain & Company, an investment banker in the Bear Stearns Financial Institutions Group, and Senior Vice President, Director of Corporate Strategy and Planning for Carreker Corporation. In addition to serving on the board of the Company, he also serves as a director of Vista Bankshares, Inc., a Dallas, Texas, based commercial bank and InBankshares Corp., a Raton, New Mexico, based commercial bank. He also serves as a director of Landsea Home (LSEA), a publicly traded homebuilder based in Newport Beach, California. Additionally, Mr. Reed serves as a director of Uncommon Giving, a private Scottsdale, Arizona based technology company. Mr. Reed is a graduate of the University of Virginia with a Bachelor of Science in Commerce and a Bachelor of Arts in History. He received his Masters of Business Administration from the Amos Tuck School of Business at Dartmouth College, where he was an Edward Tuck Scholar. Mr. Reed's qualifications to serve on our Board include his service as a director of banking institutions and other companies, his broad overall financial services industry experience, including as an investment banker and consultant, and his role as a co-founder and director of a firm having made a series of substantial and successful equity investments in commercial banking companies.
Director Since: 2015
Committees: Compensation; Nominating and Corporate Governance


Name	Fees Earned or Paid in Cash		Stock Awards(1)		Total
Dennis S. Frank	$	142,000	$	29,997	$	171,997
Robert C. Campbell	250,000		29,997		279,997
Karen F. Brassfield	58,000		29,997		87,997
Paul D. Colucci	68,000		29,997		97,997
Thomas C. Dircks	63,000		29,997		92,997
Michael T. Lempres	40,000		29,997		69,997
Scott A. Reed	40,000		29,997		69,997
Colleen Sullivan	18,478		26,323		44,801


Name and Principal Position	Fiscal Year	Salary		Bonus		Stock Awards(1)		Option Awards(1)		Non-Equity Incentive Plan Compensation		All Other Compensation(2)		Total
Alan J. Lane	2020	$	492,003	$	411,435	$	—	$	—	$	—	$	48,824	$	952,262
Chief Executive Officer and President of the Company and Chief Executive Officer of the Bank	2019	450,008		311,687		178,486		177,127		—		50,812		1,168,120


Kathleen M. Fraher	2020	345,010		166,898		—		—		—		30,482		542,390
Chief Operating Officer of the Company and the Bank
Benjamin C. Reynolds	2020	275,195		116,726		—		—		202,487		29,642		624,050
Chief Strategy Officer of the Company and the Bank	2019	128,750		—		37,490		37,208		869,525		19,112		1,092,085


		401(k)		Health &
Name	Year	Match		Welfare		Other		Total
Alan J. Lane	2020	$	7,125	$	34,956	$	6,743	$	48,824
	2019	6,250		33,597		10,965		50,812


Kathleen M. Fraher	2020	7,125		22,722		635		30,482
Benjamin C. Reynolds	2020	6,879		20,928		1,835		29,642
	2019	1,931		17,181		—		19,112


		Option Awards					Stock Awards
Name	Grant Date	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options Unexercisable		Option Exercise Price		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested		Market Value of Shares or Units of Stock That Have Not Vested(1)
Alan J. Lane	1/27/2012	172,363	—		$	4.20	1/27/2022
	11/19/2019	8,157	24,471	(2)	16.09		11/19/2029
	11/19/2019							8,319	(2)	$	618,185
Kathleen M. Fraher	6/22/2018	—	8,750	(3)	12.00		6/22/2028
	11/19/2019	—	10,616	(2)	16.09		11/19/2029
	11/19/2019							3,609	(2)	268,185
Benjamin C. Reynolds	6/22/2018	7,500	2,500	(3)	12.00		6/22/2028
	11/19/2019	1,714	5,140	(2)	16.09		11/19/2029
	11/19/2019							1,747	(2)	129,820


Crowe LLP	2020		2019
Audit Fees	$	374,500	$	377,450
Audit-Related Fees	7,000		6,750
Tax Fees	101,653		92,912
All Other Fees	200,000		165,000
Total	$	683,153	$	642,112



			By:			Karen F. Brassfield, Chair Robert C. Campbell, Paul D. Colucci, Thomas C. Dircks

SEC Form DEF 14A filed by Silvergate Capital Corporation