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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Axos Finl (delisted) | NASDAQ:BOFI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 34.39 | 34.06 | 34.83 | 0 | 01:00:00 |
¨
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Preliminary Proxy Statement
|
¨
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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ý
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Definitive Proxy Statement
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¨
|
Definitive Additional Materials
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¨
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Soliciting Material under §240.14a-12
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ý
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No fee required
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
|
¨
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Fee paid previously with preliminary materials.
|
¨
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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Gregory Garrabrants
President and Chief Executive Officer
|
Item 1.
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To elect three Class II directors, each to hold office for a three-year term and until a successor is elected and qualified;
|
Item 2.
|
To approve in a non-binding and advisory vote, the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement;
|
Item 3.
|
To ratify the selection of BDO USA, LLP as the Company’s independent public accounting firm for fiscal year
2019
; and
|
Item 4.
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To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
|
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The Notice of Internet Availability of Proxy Materials, Notice of Meeting,
Proxy Statement and Annual Report will be available free of charge at
www.envisionreports.com/BOFI
as of September 12, 2018
.
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By order of the Board of Directors,
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||
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September 7, 2018
|
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Gregory Garrabrants
|
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President and Chief Executive Officer
|
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Page
|
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STOCKHOLDER PROPOSALS FOR 2019 ANNUAL MEETING
|
|
•
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By Internet at
www.envisionreports.com/BOFI;
|
•
|
By telephone from the U.S.A., U.S. territories and Canada any time on a touch tone telephone call toll free 800-652-8683; or
|
•
|
By mail by completing, signing, dating and returning the enclosed proxy card in the postage paid envelope provided.
|
•
|
Sending a written notice to revoke your proxy to BofI Holding, Inc., 4350 La Jolla Village Drive, Suite 140, San Diego, California 92122, Attention: Corporate Secretary. To be effective, the Company must receive the notice of revocation before the Annual Meeting commences.
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•
|
Transmitting a proxy by mail at a later date than your prior proxy. To be effective, the Company must receive the later dated proxy before the Annual Meeting commences. If you fail to date or to sign that later proxy, however, it will not be treated as a revocation of an earlier dated proxy.
|
•
|
Attending the Annual Meeting and voting in person or by proxy in a manner different than the instructions contained in your earlier proxy.
|
•
|
FOR
the election of the directors nominated by the Board
–
Item 1;
|
•
|
FOR
the approval, in a non-binding and advisory vote, of the compensation of the Company’s Named Executive Officers as disclosed in this proxy statement – Item 2;
|
•
|
FOR
the ratification of the selection of BDO USA, LLP as the Company’s independent public accounting firm for fiscal year
2019
–
Item 3.
|
•
|
The Class II directors are Messrs. Dada, Garrabrants and Grinberg and their terms will expire at the 2018 Annual Meeting of Stockholders; and
|
•
|
The Class III directors are Messrs. Argalas, Court and Ratinoff and their terms will expire at the 2019 Annual Meeting of Stockholders.
|
•
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Director Qualifications,
which addresses a Board candidate’s independence, experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries; his or her understanding of our business and the business environment in which we operate; and the candidate’s ability and willingness to devote adequate time and effort to Board responsibilities, taking into account the candidate’s employment and other board commitments.
|
•
|
Responsibilities of Directors,
including acting in the best interests of all stockholders; maintaining independence; developing and maintaining a sound understanding of our business and the industry in which we operate; preparing for and attending Board and Board committee meetings; and providing active, objective and constructive participation at those meetings.
|
•
|
Director Access to Management and, as necessary and appropriate, Independent Advisors,
including encouraging presentations to the Board from the officers responsible for functional areas of our business.
|
•
|
Regularly Scheduled Executive Sessions of the Board, without Management
. Our governance guidelines also provide for the Audit Committee to meet with the Company’s outside auditors separately from management.
|
•
|
Public Company Experience,
including experience serving on other public company boards, investor relations, familiarity with regulations, etc.
|
•
|
Expertise in Technology,
including backgrounds in information systems, financial systems, IT controls and software integrations.
|
•
|
Financial Acumen,
which addresses a Board candidate’s ability to make independent analytical inquiries about financial matters related to our business and the business environment in which we operate.
|
•
|
Leadership Experience,
including experience as a CEO, CFO COO or other senior level position motivating employees, customers, stockholders, etc.
|
•
|
Legal and Compliance Experience,
including experience with bank regulations, compliance, litigation and contract provisions.
|
•
|
Diversity of Expertise and Experience,
in information technology, finance, accounting, real estate, banking, marketing and other required skill sets depending upon the Company’s strategy.
|
Name and Address of Beneficial Owner
|
|
Shares of Common
Stock Beneficially
Owned
|
|
Percent of
Shares
Outstanding
|
||
BlackRock, Inc.
1
55 East 52nd Street
New York, NY
10055
|
|
7,929,330
|
|
|
12.62
|
%
|
Vanguard
2
100 Vanguard Blvd. Malvern, PA 19355 |
|
6,472,774
|
|
|
10.30
|
%
|
Don R. Hankey
3
c/o Hankey Group
4751 Wilshire Blvd, Suite 110
Los Angeles, CA
90010
|
|
3,607,392
|
|
|
5.74
|
%
|
1
|
|
Based on Schedule 13G/A filed with the SEC on January 19, 2018.
|
2
|
|
Based on Schedule 13G/A filed with the SEC on July 10, 2018.
|
3
|
|
Based on Schedule 13D filed with the SEC on November 14, 2012.
|
|
|
Beneficial Ownership of Common Stock
|
||||
Name
|
|
Number of Shares
1
|
|
Percent of Outstanding Shares
|
||
John Gary Burke
2
|
|
1,817,856
|
|
|
2.89
|
%
|
Gregory Garrabrants
3
|
|
1,295,745
|
|
|
2.06
|
%
|
Andrew J. Micheletti
4
|
|
521,357
|
|
|
*
|
|
Paul J. Grinberg
5
|
|
94,698
|
|
|
*
|
|
Nicholas A. Mosich
6
|
|
88,088
|
|
|
*
|
|
Eshel Bar-Adon
7
|
|
83,865
|
|
|
*
|
|
James S. Argalas
8
|
|
53,394
|
|
|
*
|
|
James J. Court
9
|
|
32,834
|
|
|
*
|
|
Edward J. Ratinoff
10
|
|
33,578
|
|
|
*
|
|
Brian Swanson
11
|
|
23,399
|
|
|
*
|
|
Thomas Constantine
12
|
|
13,191
|
|
|
*
|
|
Uzair Dada
13
|
|
9,424
|
|
|
*
|
|
J. Brandon Black
14
|
|
1,264
|
|
|
*
|
|
|
|
|
|
|
||
All current directors and executive officers as a group (13 persons)
|
|
4,068,693
|
|
|
6.48
|
%
|
*
|
Less than one percent.
|
1
|
All fractional shares have been rounded to the closest whole share.
|
2
|
Mr. Burke is a director. Mr. Burke’s beneficial ownership includes 1,397,453 shares in The Burke Revocable Declaration of Trust Dtd Apr 04 1997 and 71,572 shares in the Burke Revocable Declaration Of Trust Dtd April 1997.
|
3
|
Mr. Garrabrants is the President, Chief Executive Officer and a director. Mr. Garrabrants’ beneficial ownership includes 170,680 shares held in a Trust, for the benefit of his children and 1,045 shares held in his 401(k).
|
4
|
Mr. Micheletti is the Chief Financial Officer. Mr. Micheletti’s beneficial ownership includes 1,237 shares held in his 401(k).
|
5
|
Mr. Grinberg is a director.
|
6
|
Mr. Mosich is a director.
|
7
|
Mr. Bar-Adon is a Named Executive Officer. Mr. Bar-Adon’s beneficial ownership includes 1,211 shares held in his 401(k).
|
8
|
Mr. Argalas is a director.
|
9
|
Mr. Court is a director. Mr. Court’s beneficial ownership includes 1,200 shares held by his spouse.
|
10
|
Mr. Ratinoff is a director.
|
11
|
Mr. Swanson is a Named Executive Officer. Mr. Swanson’s beneficial ownership includes 1,022 shares held in his 401(k).
|
12
|
Mr. Constantine is a Named Executive Officer. Mr. Constantine’s beneficial ownership includes 737 shares held in his 401(k).
|
13
|
Mr. Dada is a director.
|
14
|
Mr. Black is a director.
|
•
|
Compensation should consist of a combination of cash and equity awards that are designed to fairly pay the non-employee directors for work required for a company of our size and scope;
|
•
|
Compensation should align the non-employee directors’ interests with the long-term interests of stockholders; and
|
•
|
Compensation should assist with attracting and retaining qualified non-employee directors.
|
Role
|
|
Non-employee director
|
|
Premium
|
|
Total
|
||||||
Chairman
1
|
|
$
|
36,000
|
|
|
$
|
60,000
|
|
|
$
|
96,000
|
|
Vice-chairman
2
|
|
36,000
|
|
|
24,000
|
|
|
60,000
|
|
|||
Chairman of the Audit Committee
3
|
|
36,000
|
|
|
24,000
|
|
|
60,000
|
|
|||
Chairman of the Compensation Committee
4
|
|
36,000
|
|
|
12,000
|
|
|
48,000
|
|
|||
Other non-employee directors
|
|
36,000
|
|
|
—
|
|
|
36,000
|
|
1
|
|
For the Chairman role, a premium is paid as compensation for additional responsibilities. Mr. Grinberg receives this premium.
|
2
|
|
For the Vice-chairman role, a premium is paid as compensation for additional responsibilities. Mr. Mosich receives this premium.
|
3
|
|
For the Chairman of the Audit Committee role, a premium is paid as compensation for additional responsibilities. Mr. Argalas received this premium until he ceased to be the Chairman of the Audit Committee in December 2017. Mr. Grinberg receives this premium since his appointment as Chairman of the Audit Committee.
|
4
|
|
For the Chairman of the Compensation Committee role, a premium is paid as compensation for additional responsibilities. Mr. Grinberg received this premium until he ceased to be the Chairman of the Compensation Committee in December 2017. Mr. Court receives this premium since his appointment as Chairman of the Compensation Committee.
|
|
|
Grants of Restricted Stock Units
|
|||||||
Role
|
|
Non-employee director
|
|
Premium
|
|
Amount
|
|||
Chairman
1
|
|
8,000
|
|
|
14,000
|
|
|
22,000
|
|
Vice-chairman
2
|
|
8,000
|
|
|
2,200
|
|
|
10,200
|
|
Chairman of the Audit Committee
3
|
|
8,000
|
|
|
2,200
|
|
|
10,200
|
|
Chairman of the Compensation Committee
4
|
|
8,000
|
|
|
800
|
|
|
8,800
|
|
Other non-employee directors
|
|
8,000
|
|
|
—
|
|
|
8,000
|
|
1
|
|
For the Chairman role, a premium is paid as compensation for additional responsibilities. Mr. Grinberg receives this premium.
|
2
|
|
For the Vice-chairman role, a premium is paid as compensation for additional responsibilities. Mr. Mosich receives this premium.
|
3
|
|
For the Chairman of the Audit Committee role, a premium is paid as compensation for additional responsibilities. Mr. Argalas received this premium until he ceased to be the Chairman of the Audit Committee in December 2017. Mr. Grinberg receives this premium since his appointment as Chairman of the Audit Committee.
|
4
|
|
For the Chairman of the Compensation Committee role, a premium is paid as compensation for additional responsibilities. Mr. Grinberg received this premium until he ceased to be the Chairman of the Compensation Committee in December 2017. Mr. Court receives this premium since his appointment as Chairman of the Compensation Committee.
|
Name
|
|
Fees
Earned or
Paid in
Cash
1
|
|
Stock
Awards
2
|
|
Option
Awards
|
|
Non-Equity
Incentive
Plan
Compensation
|
|
Changes
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
|
|
Total
|
||||||||||||||
James S. Argalas
3
|
|
$
|
48,000
|
|
|
$
|
273,156
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
321,156
|
|
J. Brandon Black
|
|
24,000
|
|
|
100,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,010
|
|
|||||||
John Gary Burke
|
|
36,000
|
|
|
214,240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,240
|
|
|||||||
James J. Court
4
|
|
42,000
|
|
|
214,240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256,240
|
|
|||||||
Uzair Dada
|
|
36,000
|
|
|
214,240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,240
|
|
|||||||
Paul J. Grinberg
5
|
|
114,000
|
|
|
610,584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
724,584
|
|
|||||||
Nicholas A. Mosich
|
|
60,000
|
|
|
273,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
333,156
|
|
|||||||
Edward J. Ratinoff
|
|
36,000
|
|
|
214,240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,240
|
|
1
|
|
The amounts in this column represent the annual cash fees paid to our non-employee directors for service during fiscal 2018.
|
2
|
|
The stock awards included for each non-employee director above consists of Restricted Stock Units. The value for each of these awards is its grant date fair value calculated by multiplying the number of units subject to the award by the NASDAQ closing price per share on the date such award was granted. The table below shows the award number of units, the grant date, the per-unit fair value, and the total grant date fair value for the stock awards shown.
|
3
|
|
Mr. Argalas ceased to be the Chairman of the Audit Committee in January 2018.
|
4
|
|
Mr. Court was appointed Chairman of the Compensation Committee in January 2018.
|
5
|
|
Mr. Grinberg was appointed Chairman of the Audit Committee in January 2018 and ceased to be the Chairman of the Compensation Committee in January 2018.
|
Name
|
|
Fiscal
Year
|
|
Grant
Date
|
|
Non-equity
Incentive Plan
|
|
Restricted
Stock
Units (“RSUs”)
|
|
Option
Awards:
Number of
Shares
Underlying
Option
|
|
Base
Price of RSUs
(per Unit)
|
|
Grant Date
Fair Value
of RSUs
|
|||||
James S. Argalas
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
10,200
|
|
|
—
|
|
|
26.78
|
|
$
|
273,156
|
|
J. Brandon Black
1
|
|
2018
|
|
10/30/2017
|
|
—
|
|
|
3,794
|
|
|
—
|
|
|
26.36
|
|
100,010
|
|
|
John Gary Burke
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
8,000
|
|
|
—
|
|
|
26.78
|
|
214,240
|
|
|
James J. Court
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
8,000
|
|
|
—
|
|
|
26.78
|
|
214,240
|
|
|
Uzair Dada
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
8,000
|
|
|
—
|
|
|
26.78
|
|
214,240
|
|
|
Paul J. Grinberg
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
22,800
|
|
|
—
|
|
|
26.78
|
|
610,584
|
|
|
Nicholas A. Mosich
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
10,200
|
|
|
—
|
|
|
26.78
|
|
273,156
|
|
|
Edward J. Ratinoff
|
|
2018
|
|
8/17/2017
|
|
—
|
|
|
8,000
|
|
|
—
|
|
|
26.78
|
|
214,240
|
|
1
|
|
Mr. Black was appointed to the Board of Directors in October 2017 and received a one-time initial grant of RSUs.
|
Name
|
|
Restricted Stock Unit Awards
|
|||||||
Number of
Restricted Stock Units That
Have Not
Vested
|
|
Date of Grant
1
|
|
Market Value
of Restricted Stock Units That Have
Not Vested
2
|
|||||
James S. Argalas
|
|
2,667
|
|
|
08/26/2015
|
|
$
|
109,107
|
|
|
|
5,334
|
|
|
09/08/2016
|
|
218,214
|
|
|
|
|
10,200
|
|
|
08/17/2017
|
|
417,282
|
|
|
J. Brandon Black
|
|
3,794
|
|
|
10/30/2017
|
|
155,213
|
|
|
John Gary Burke
|
|
2,667
|
|
|
08/26/2015
|
|
109,107
|
|
|
|
|
5,334
|
|
|
09/08/2016
|
|
218,214
|
|
|
|
|
8,000
|
|
|
08/17/2017
|
|
327,280
|
|
|
James J. Court
|
|
2,667
|
|
|
08/26/2015
|
|
109,107
|
|
|
|
|
5,334
|
|
|
09/08/2016
|
|
218,214
|
|
|
|
|
8,000
|
|
|
08/17/2017
|
|
327,280
|
|
|
Uzair Dada
|
|
2,667
|
|
|
08/26/2015
|
|
109,107
|
|
|
|
|
5,334
|
|
|
09/08/2016
|
|
218,214
|
|
|
|
|
8,000
|
|
|
08/17/2017
|
|
327,280
|
|
|
Paul J. Grinberg
|
|
3,667
|
|
|
08/26/2015
|
|
150,017
|
|
|
|
|
7,334
|
|
|
09/08/2016
|
|
300,034
|
|
|
|
|
22,800
|
|
|
08/17/2017
|
|
932,748
|
|
|
Nicholas A. Mosich
|
|
3,400
|
|
|
08/26/2015
|
|
139,094
|
|
|
|
|
6,800
|
|
|
09/08/2016
|
|
278,188
|
|
|
|
|
10,200
|
|
|
08/17/2017
|
|
417,282
|
|
|
Edward J. Ratinoff
|
|
2,667
|
|
|
08/26/2015
|
|
109,107
|
|
|
|
|
5,334
|
|
|
09/08/2016
|
|
218,214
|
|
|
|
|
8,000
|
|
|
08/17/2017
|
|
327,280
|
|
1
|
|
Grants from 2015 and 2017 vest in one-third increments on each of the first three anniversaries of the date of grant. Grants from 2016 vest in one-third increments on each of the first three anniversaries of the filing of the fiscal 2016 Annual Report on Form 10-K on August 24th.
|
2
|
|
The values contained in this column were calculated by multiplying the number of RSUs by $40.91, which was the closing price of the Company’s common stock reported on the NASDAQ on June 30, 2018.
|
Name
|
|
Age
|
|
Position
|
Gregory Garrabrants
|
|
46
|
|
President and Chief Executive Officer
|
Andrew J. Micheletti
|
|
61
|
|
Executive Vice President, Chief Financial Officer
|
Eshel Bar-Adon
|
|
63
|
|
Executive Vice President, Specialty Finance and Chief Legal Officer
|
Brian Swanson
|
|
38
|
|
Executive Vice President, Chief Lending Officer
|
Thomas Constantine
|
|
56
|
|
Executive Vice President, Chief Credit Officer
|
•
|
Performance Expectations.
We have clear performance expectations of our executive team, and the design of our executive compensation program reflects these expectations. Our Compensation Committee sets forth the performance expectations for our CEO and our CEO sets forth the performance expectations for the rest of our executive team. Each executive officer’s performance is evaluated on a regular basis against pre-defined and documented performance objectives. Each executive officer must demonstrate exceptional personal performance in order to remain part of the executive team. We believe that individuals who underperform should either be removed from the executive team with their compensation adjusted accordingly, or be dismissed from the Company. A substantial portion of each executive’s pay is performance-based compensation that is variable based on the Company or business unit’s annual and long-term operating performance and long-term stockholder returns.
|
•
|
Emphasis on Long-Term Equity Incentives.
Our executive compensation program emphasizes long-term stockholder value creation by compensating executives with restricted stock units (“RSUs”) that are earned based upon performance criteria in a particular year and then vested on a time-based vesting basis over three-years for NEOs other than the CEO and four years for the CEO. The Compensation Committee believes that performance-based requirements for grants of RSUs, which then vest on a time-based vesting schedule are the most effective way to attract and retain a talented executive team and align executives’ interests with those of stockholders. As a result, our executive compensation program is weighted considerably toward long-term equity awards rather than cash compensation and our executives generally hold significant unvested RSUs at any particular time. This practice is intended to create a substantial retention incentive, encourage our executives to focus on the Company’s long-term success, and align executive interests with the long-term interests of our stockholders.
|
•
|
Competitive With Industry Peers.
We believe that total compensation packages for our executive officers should be sufficiently competitive with industry peer companies to enable the Company to attract and retain top executive talent, while also being consistent with the Company’s objective of maintaining a competitive and efficient cost structure while focusing on aligning executive compensation to company performance and delivering stockholder value. Compensation should be commensurate with the role, scope and complexity of each executive’s position relative to other executives and employees. The Company’s compensation programs reflect its position as a leading technology oriented banking
|
Element
|
|
Character
|
|
How Compensation Objectives Are Met
|
Base Salary
|
|
Short Term
|
|
Helps ensure that compensation is commensurate with the role, scope and complexity of each executive’s position relative to other executives and employees.
|
Annual Non-Equity Incentive Plan Compensation (Cash Bonus)
|
|
Short Term
|
|
Varies based on the Company attaining annual performance measures that are aligned with the business strategy and stockholders’ interests.
|
Long-Term Incentive Compensation (Restricted Stock Units)
|
|
Long Term
|
|
Varies based on long-term total stockholder return (“TSR”) and promotes stockholders’ interests.
|
Benefits and Perquisites
|
|
Short Term
|
|
Establishes limited perquisites in line with market practice that include health and welfare insurance coverage and 401(k) plan benefits on the same basis as our general employee population.
|
What We Do
|
|
What We Don’t Do
|
Pay For Performance – A significant percentage of direct compensation is based upon measurable performance goals.
Independent Compensation Consultant – Our Compensation Committee retained an independent compensation consultant, which performs no services for the Company other than providing guidance to the Compensation Committee on the CEO’s compensation.
Risk Management – We prohibit short sales, transactions in derivatives of the Company’s securities, including hedging transactions.
Performance-Based, Long-Term Equity – We emphasize long-term equity awards in our pay mix.
At-Will Employment – We employ our executive officers at will.
Responsible Use of Equity – We manage our equity award program responsibly, legally awarding only approximately 0.38% of weighted average diluted shares in 2018.
|
|
No Tax Gross Ups – We do not offer gross-ups of related excise taxes.
Special Perquisites – We do not provide executive perquisites that are not available to other employees generally.
Re-Pricing or Repurchase of Underwater Equity Awards – Unless our stockholders approve, we do not permit the repricing or repurchase of underwater stock options or stock appreciation rights.
Pension or Other Special Benefits – We do not provide pensions or supplemental executive retirement, health, or insurance benefits.
No “Single Trigger” Severance Payments or equity vesting on Change In Control - Our employment agreements do not have “single-trigger” cash severance payments resulting solely from the occurrence of a change of control.
|
•
|
say-on-pay vote decisions generally follow stockholder advisory recommendations without significant independent review by the investment arms of our investors, but, despite this, those stockholder advisory recommendations should be carefully reviewed and considered
|
•
|
compensation plans that are grandfathered under Internal Revenue Code Section 162(m) should remain in place given their tax efficiency and not be “materially modified” in order to maximize the tax deductibility of executive compensation for as long a timeframe as possible
|
•
|
stockholders significantly valued the level of insider ownership, particularly that of our Chief Executive Officer, who holds (directly or through family trusts) over sixty times his base salary in shares of the Company’s stock
|
•
|
tying compensation specifically to share price performance versus banking industry performance under the revised agreement was a desirable component of a performance based plan
|
2017 Proxy Advisory Issues
|
|
Compensation Program Change for 2018
|
Base salary increase in FY2018
|
|
- Additional disclosure provided for CEO base salary and below market base salary from 2011-2017 with no salary increase and a fixed $375,000 base salary for six years
- 2011-2017 base salary of $375,000 was the lowest in the Peer Group - 2018 base salary set at eighth percentile of the Peer Group (92% of peers have higher salary) - New Agreement base salary has five-year term with no adjustments during subsequent years of the New Agreement |
Increase in Annual short-term incentive in FY2018 from 75 percent to 150 percent of base salary
|
|
- Short-term incentive target (“STI”) set higher than 75th percentile Company Peer Group performance (75th percentile three-year average return on equity of peer group = 14.3%)
- Total cash compensation set at 56% of peer group - Baseline benchmark required for payout is 15% return on equity (less than 5% of U.S. exchange listed public banks achieved 15% three-year average return on equity) - Negative carry forward modifier increases multi-year downside risk |
Long-term incentive (equity awards) lack goal rigor due to unchanged annual goals
|
|
- Long-term incentive (equity award) goal change annually based upon relative performance of the Company’s share price versus the XABQ Index
- XABQ Index is the most broadly representative stock index of the community bank industry, includes more than 350 banks with a market capitalization exceeding $200 billion - The Company’s share price must equal the performance of the XABQ Index for 100% target payout to occur - If the Company’s Annual Stockholder Return is lower than the XABQ Index, the Chief Executive Officer’s Target Share Award is reduced by this calculation and carried into the subsequent year - The multi-year negative carry-forward feature of the plan presents an additional equity grant hurdle requirement if Company underperforms index in a material way - Annual goals change based upon change in XABQ index performance |
Long-Term Incentive Annual Performance Measurement Period
|
|
- Long-Term Incentive Annual Performance Measurement Period contains multi-year negative carryforward component in the event of Company index underperformance
- In the event that the Company’s Annual Stockholder Return is lower than the XABQ Index, the CEO’s Target Award is reduced by this calculation and any negative values carry forward and reduce any potential equity grants in all future years - Annual performance periods with negative accumulation allows future equity awards to be reduced or eliminated if performance lags |
STI significant discretion applied
|
|
- The New Agreement provides for no discretionary application
- The Individual Factor is the only non-quantitative factor, but is non-discretionary factor based on pre-set specific non-financial management objectives (“MBOs”) in advance of each fiscal year - The Compensation Committee sets MBOs that are significant to the long-term success of the Company - Pre-set MBOs account for 100% of the Individual Factor - The Individual Factor is a small component of Total Compensation which is otherwise highly formulaic |
Lack of Risk Mitigators
|
|
- The CEO holds sixty times his current salary in stock of the Company
- The Individual Factor includes a regulatory and audit performance MBO - The New Agreement provides multi-year targets such that underperformance in any one year carries forward to all future contract years |
Increasing gap between total CEO pay and the median total CEO pay of company peers
|
|
- Base salary – 8th percentile of Peer Group
- Total Cash Compensation (Base Salary + Target Bonus) – 56th percentile of Peer Group - Total Pay at Target – 65% of Peer Group - Goal rigor significantly above peers - Significantly greater downside risk in plan than Peer Group |
FY2018 New Employment Agreement
|
|
Board Rationale
|
No Excise Tax Gross Up
|
|
- No executive of the Company, including the CEO, has a tax gross up in any employment agreement and no excise tax gross up is provided in any Company policy
|
Anti-Pledging / Anti-Hedging Policy
|
|
- The Company has disclosed a robust anti-hedging policy, prohibits short sales, transactions in derivatives of BofI’s securities, and hedging transactions
|
Long-term contractual agreements
|
|
- Long-term contractual agreements preserve tax deductibility under grandfathering tax rules
- CEO’s long-term contractual agreement removes ability to lower rigorous performance targets and preserve multi-year performance metrics - Long-term contractual agreements align stockholders with CEO resulting in CEO focus on long-term value creating strategic goals - Reward based upon long-term share price aligns CEO to long-term value creation |
Restricted Equity Grant
|
|
- 2018 grant Monte Carlo valuation accounts for all equity grants under New Agreement for the next five years
- Five-year grant disclosed this year in Summary Compensation table resulting in large accounting value in year one of contract - Equity award is reduced, and can result in a negative award value that is carried forward to offset potential future years’ awards, if Company’s TRS does not meet or exceed XABQ index each year of New Agreement - Number of shares granted under ASC 710 Monte-Carlo calculation as of July 1, 2017 contract date for five years is 596,259 (average of 119,251 shares annually) - Prior employment agreement historic average totaled 262,400 shares per year |
Goal Rigor
|
|
- All contractual equity awards in new contract are forward looking and depend upon Company’s future TRS to XABQ index
- Formulaic relative TRS measurement period began on July 1, 2017 the date of the New Agreement - STI target set higher than 75th percentile Company Peer Group performance (75th percentile three-year average return on equity of peer group = 14.3%) - Total cash compensation set at 56% of peer group - Baseline benchmark required for payout of STI is 15% return on equity (less than 5% of U.S. exchange listed public bank’s achieved 15% three-year average return on equity) - Negative carry forward modifier increases multiyear downside risk for both equity award and STI |
|
|
Bank of California (BANC)
Bank of Hawaii Corporation (BOH)
Bank of the Ozarks (OZK)
CVB Financial Corp (CVBF)
Eagle Bancorp (EGBN)
FCB Financial Holdings (FCB)
First Financial Bankshares (FFIN)
|
|
Home Bancshares (HOMB)
Opus Bank (OPB)
Trustco Bank Corp / NY (TRST)
United Community Banks (UCBI)
Washington Federal (WAFD)
Western Alliance Bancorporation (WAL)
|
Measurement Period
|
|
BofI
|
|
Russell 2000
®
Index
|
|
S&P 500
®
|
|
NASDAQ Composite
|
|
XABQ
1
|
Since Appointment On 10/23/2007
|
|
2,211%
|
|
101%
|
|
79%
|
|
202%
|
|
84%
|
7/1/2007 - 6/30/2017
|
|
1,210%
|
|
70%
|
|
61%
|
|
163%
|
|
54%
|
7/1/2012 - 6/30/2017
|
|
380%
|
|
77%
|
|
78%
|
|
123%
|
|
130%
|
Fiscal Year 2017
|
|
34%
|
|
23%
|
|
15%
|
|
28%
|
|
37%
|
Fiscal Year 2018
|
|
72%
|
|
16%
|
|
12%
|
|
24%
|
|
11%
|
•
|
BofI’s return on average equity over the prior three and five year periods was the highest of the Peer Group
|
•
|
BofI’s return on average assets over the prior three and five year periods was in the 86th and 73rd percentiles, respectively, of the Peer Group
|
•
|
BofI’s asset growth over the prior three and five year periods was in the 85th percentile of the Peer Group
|
•
|
BofI’s efficiency ratio was in the 9th percentile of the Peer Group (meaning that BofI was more efficient, as measured by the efficiency ratio, than 91% of the Peer Group)
|
•
|
BofI’s prior three year earnings per common share growth was the highest of the Peer Group
|
•
|
After-Tax Net Income was $152,411,000
|
•
|
2018 Fiscal Year Return on Average Equity = 17.05%
|
•
|
Average Common Equity was $892,271,161
|
•
|
Target Net Income = $892,271,161 × 15% = $133,840,674
|
•
|
obtaining exclusivity and executing effectively on H&R Block’s Refund Advance Program;
|
•
|
successfully launching the Bank’s proprietary consumer enrollment and online banking system;
|
•
|
expanding the executive management team;
|
•
|
gaining entry into the Chapter 7 bankruptcy trustee business;
|
•
|
developing a comprehensive rebranding plan and;
|
•
|
refining and executing on the Company’s revised business strategy.
|
Beginning Market Capitalization
|
|
Target Equity Award
|
<$2.0 Billion Market Cap
|
|
$2,500,000
|
$2.0 Billion - $2.5 Billion Market Cap
|
|
$3,000,000
|
$2.5 Billion - $3.5 Billion Market Cap
|
|
$3,500,000
|
$3.5 Billion or More Market Cap
|
|
$4,000,000
|
Year
|
|
Award Value
|
|
RSUs
|
|||
2018
|
|
$
|
4,944,258
|
|
|
157,793
|
|
2019
|
|
4,267,953
|
|
|
125,562
|
|
|
2020
|
|
3,922,239
|
|
|
110,252
|
|
|
2021
|
|
3,737,838
|
|
|
102,874
|
|
|
2022
|
|
3,628,236
|
|
|
99,778
|
|
|
Total
|
|
$
|
20,500,524
|
|
|
596,259
|
|
FY 2018
|
|
FY 2019
|
|
FY 2020
|
|
FY 2021
|
|
FY 2022
|
|
FY 2023
|
|
FY 2024
|
|
FY 2025
|
|
FY 2026
|
||||||||||||||||||
$
|
4,432,540
|
|
|
$
|
4,432,540
|
|
|
$
|
3,815,508
|
|
|
$
|
3,046,823
|
|
|
$
|
2,225,920
|
|
|
$
|
1,382,306
|
|
|
$
|
734,128
|
|
|
$
|
330,974
|
|
|
$
|
100,784
|
|
Measurement Period
|
|
BofI
|
|
Russell 2000
®
Index
|
|
S&P 500
®
|
|
NASDAQ Composite
|
|
XABQ
|
|||||
Fiscal Year 2018
|
|
72
|
%
|
|
16
|
%
|
|
12
|
%
|
|
24
|
%
|
|
11
|
%
|
•
|
evaluate employee performance against specified business objectives;
|
•
|
review business performance targets and objectives; and
|
•
|
sets base salary levels, and amounts and targets for incentive cash bonus plan.
|
Name
|
|
Year
1
|
|
Salary
2
|
|
Non-Equity Incentive Plan Compensation
3
|
|
Bonus
4
|
|
Stock
Awards
5
|
|
All Other
Compensation
6
|
|
Total
|
||||||||||||
Gregory Garrabrants
|
|
2018
|
|
$
|
700,000
|
|
|
$
|
1,421,407
|
|
|
$
|
—
|
|
|
$
|
24,740,524
|
|
|
$
|
113,993
|
|
|
$
|
26,975,924
|
|
|
|
2017
|
|
375,000
|
|
|
253,125
|
|
|
—
|
|
|
6,024,960
|
|
|
9,000
|
|
|
6,662,085
|
|
||||||
|
|
2016
|
|
375,000
|
|
|
365,625
|
|
|
—
|
|
|
8,468,640
|
|
|
9,250
|
|
|
9,218,515
|
|
||||||
Andrew J. Micheletti
|
|
2018
|
|
245,000
|
|
|
300,000
|
|
|
—
|
|
|
1,192,500
|
|
|
10,800
|
|
|
1,748,300
|
|
||||||
|
|
2017
|
|
235,000
|
|
|
250,000
|
|
|
—
|
|
|
940,400
|
|
|
10,600
|
|
|
1,436,000
|
|
||||||
|
|
2016
|
|
231,000
|
|
|
200,000
|
|
|
—
|
|
|
1,338,863
|
|
|
10,600
|
|
|
1,780,463
|
|
||||||
Eshel Bar-Adon
|
|
2018
|
|
275,000
|
|
|
—
|
|
|
310,000
|
|
|
355,040
|
|
|
11,050
|
|
|
951,090
|
|
||||||
|
|
2017
|
|
265,000
|
|
|
—
|
|
|
290,000
|
|
|
335,035
|
|
|
10,850
|
|
|
900,885
|
|
||||||
|
|
2016
|
|
250,000
|
|
|
—
|
|
|
255,000
|
|
|
140,018
|
|
|
10,800
|
|
|
655,818
|
|
||||||
Brian Swanson
|
|
2018
|
|
255,000
|
|
|
—
|
|
|
315,000
|
|
|
420,019
|
|
|
9,000
|
|
|
999,019
|
|
||||||
|
|
2017
|
|
240,000
|
|
|
—
|
|
|
300,000
|
|
|
390,012
|
|
|
9,000
|
|
|
939,012
|
|
||||||
|
|
2016
|
|
235,000
|
|
|
—
|
|
|
275,000
|
|
|
185,063
|
|
|
9,000
|
|
|
704,063
|
|
||||||
Thomas Constantine
|
|
2018
|
|
250,000
|
|
|
—
|
|
|
250,000
|
|
|
285,011
|
|
|
10,850
|
|
|
795,861
|
|
||||||
|
|
2017
|
|
245,000
|
|
|
—
|
|
|
230,000
|
|
|
260,033
|
|
|
5,800
|
|
|
740,833
|
|
||||||
|
|
2016
|
|
235,000
|
|
|
—
|
|
|
190,000
|
|
|
115,054
|
|
|
4,050
|
|
|
544,104
|
|
1
|
|
Fiscal year in which salary and non-equity incentives and bonuses were earned. For stock awards, the fiscal year of the accounting grant date. For Mr. Garrabrants, two awards were made in fiscal 2018, one under his prior contract and one five-year award under his New Agreement as discussed above.
|
2
|
|
Salary earned during the fiscal year.
|
3
|
|
Payments for Non-Equity Incentive Plans were earned in accordance with the employment contracts of the CEO and CFO.
|
4
|
|
Bonus earned during the fiscal years listed.
|
5
|
|
Aggregate value of restricted stock awards based upon the performance year and calculated in accordance with ASC 710 and 718. The actual value at the end of the vesting period may be significantly higher or lower than the value presented depending upon the market value of the common stock at that time and, in the case of the CEO, the number of restricted stock shares will be higher or lower than the grant date estimated future value, based upon the TSR actually measured in future fiscal years.
|
|
On September 5, 2018 the Board of Directors of the Company, based upon the actual measurement of TSR of the Company for fiscal 2018 under the New Agreement, made an award of 480,000 restricted stock units to Mr. Garrabrants which vests in one-fourth increments on each of the first four fiscal year-ends following the date of grant. The value of the stock award for fiscal 2018 included in the table above, $24.7 million, includes two awards, $4.2 million related to Mr. Garrabrants’ prior contract and $20.5 million for the new contract based upon the estimated issuance of RSUs over the five year period as of July 1, 2017 resulting in expense allocation across all service and vesting years in accordance with ASC 718 and is not based upon the 480,000 RSU award. The total of the compensation expense of $20.5 million will be recognized in the income statement over fiscal years 2018 through 2026 (as discussed previously). Subsequent to fiscal 2018, on September 5, 2018 the Compensation Committee of the Board of Directors of the Company, based upon the actual measurement of TSR of the Company for fiscal 2018 under the New Agreement and the 2014 Stock Plan, made an award of 14,852,022 Performance Units (“PU”) to Mr. Garrabrants which vests over five years up to $3.0 million per year. The value of the PU award for fiscal 2018 is not included in the table above as it was granted in fiscal 2019, totals $14.9 million and will be expensed equally over the five year vesting period.
|
|
6
|
|
This column represents the amount of all compensation paid to the Named Executive Officers that is not reported in any other column of the table. For fiscal 2018 the amount for Mr. Garrabrants represents legal fees paid on his behalf. All other amounts are 401(k) matching contributions.
|
Name
|
|
Grant Date
|
|
Estimated Possible Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
1
|
|
Closing Price of Stock on Date of Grant
2
|
|
Grant Date
Fair Value of
Stock and Option Awards
|
||||||||||||||||||||||
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|||||||||||||||||||||||
Gregory Garrabrants
|
|
08/24/17
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160,000
|
|
|
$
|
26.5000
|
|
|
$
|
4,240,000
|
|
|
|
07/01/17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
596,259
|
|
|
34.3819
|
|
|
20,500,517
|
|
|||||
Andrew J. Micheletti
|
|
08/24/17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,000
|
|
|
26.5000
|
|
|
1,192,500
|
|
|||||
Eshel Bar-Adon
|
|
07/12/17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,357
|
|
|
23.7900
|
|
|
175,023
|
|
|||||
|
|
01/30/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,268
|
|
|
28.7200
|
|
|
180,017
|
|
|||||||||||
Brian Swanson
|
|
07/12/17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,828
|
|
|
23.7900
|
|
|
210,018
|
|
|||||
|
|
01/30/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,312
|
|
|
28.7200
|
|
|
210,001
|
|
|||||||||||
Thomas Constantine
|
|
07/12/17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,885
|
|
|
23.7900
|
|
|
140,004
|
|
|||||
|
|
01/30/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,049
|
|
|
28.7200
|
|
|
145,007
|
|
1
|
|
Restricted stock units for Mr. Garrabrants vest in one-fourth increments on each of the first four fiscal year-ends following the date of grant, for all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant.
|
2
|
|
The July 1, 2017 award to Mr. Garrabrants consists of five years of estimated RSU awards totaling 596,259 RSUs at an average price of $34.38 determined through Monte Carlo simulation in accordance with ASC 718. The grant-date estimate of RSUs to be issued and their estimated total fair value of $20.5 million (shown above) is the sum of the estimated for each fiscal 2018 through 2022. For fiscal 2018, the actual calculated award was limited to 480,000 RSUs, however the fair value for compensation expense purposes under ASC 718 reflects the original estimate for fiscal 2018 made at the grant date. In the event the calculated Annual Restricted Stock Unit Award value exceeds an award of 480,000 shares, the excess value vests and is expensed over four years or more, up to $3.0 million each year, paid in cash at the end of each year, upon the completion of continued service as Performance Units (“PU”) issued under the Company’s 2014 Stock Incentive Plan. The excess value to be granted as a PU in fiscal 2019 is $14.9 million vesting and expensed over five years.
|
|
|
Restricted Stock Unit Awards
|
|||||||
Name
|
|
Number of
Restricted Stock
Units That
Have Not
Vested
|
|
Date of Grant
1
|
|
Market Value
of Restricted Stock Units
That Have
Not Vested
2
|
|||
Gregory Garrabrants
|
|
72,000
|
|
|
08/28/15
|
|
$
|
2,945,520
|
|
|
|
144,000
|
|
|
08/26/16
|
|
5,891,040
|
|
|
|
|
120,000
|
|
|
08/24/17
|
|
4,909,200
|
|
|
|
|
157,793
|
|
|
07/01/17
|
|
6,455,312
|
|
|
Andrew J. Micheletti
|
|
15,000
|
|
|
08/28/15
|
|
613,650
|
|
|
|
|
30,000
|
|
|
08/26/16
|
|
1,227,300
|
|
|
|
|
45,000
|
|
|
08/24/17
|
|
1,840,950
|
|
|
Eshel Bar-Adon
|
|
2,334
|
|
|
10/30/15
|
|
95,484
|
|
|
|
|
6,184
|
|
|
08/10/16
|
|
252,987
|
|
|
|
|
4,181
|
|
|
01/17/17
|
|
171,045
|
|
|
|
|
7,357
|
|
|
07/12/17
|
|
300,975
|
|
|
|
|
6,268
|
|
|
01/30/18
|
|
256,424
|
|
|
Brian Swanson
|
|
3,084
|
|
|
10/30/15
|
|
126,166
|
|
|
|
|
7,344
|
|
|
08/10/16
|
|
300,443
|
|
|
|
|
4,778
|
|
|
01/17/17
|
|
195,468
|
|
|
|
|
8,828
|
|
|
07/12/17
|
|
361,153
|
|
|
|
|
7,312
|
|
|
01/30/18
|
|
299,134
|
|
|
Thomas Constantine
|
|
1,918
|
|
|
10/30/15
|
|
78,465
|
|
|
|
|
4,638
|
|
|
08/10/16
|
|
189,741
|
|
|
|
|
3,345
|
|
|
01/17/17
|
|
136,844
|
|
|
|
|
5,885
|
|
|
07/12/17
|
|
240,755
|
|
|
|
|
5,049
|
|
|
01/30/18
|
|
206,555
|
|
1
|
|
Restricted stock units for Mr. Garrabrants vest in one-fourth increments on each of the first four fiscal year-ends following the date of grant, for all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant.
|
2
|
|
The values contained in this column were calculated by multiplying the number of shares by $40.91, which was the closing price of the Company’s common stock reported on the NASDAQ on June 30, 2018. Share amounts have been presented to reflect the four-for-one forward split of the Company’s common stock effected in the form of a stock dividend that was distributed on November 17, 2015. For Mr. Garrabrants’ restricted stock unit grants the actual number of restricted stock units may be higher or lower than the grant date estimated future value, based upon the TSR actually measured in future fiscal years and the value at the end of the vesting period may be significantly higher or lower than the value presented depending upon the market value of the common stock at that time.
|
|
|
Restricted Stock Unit Awards
|
|||||
Name
|
|
Number of Shares
Acquired on Vesting
|
|
Value Realized on
Vesting
|
|||
Gregory Garrabrants
1
|
|
256,000
|
|
|
$
|
10,472,960
|
|
Andrew J. Micheletti
2
|
|
45,000
|
|
|
1,189,500
|
|
|
Brian Swanson
3
|
|
17,057
|
|
|
506,509
|
|
|
Thomas Constantine
4
|
|
10,213
|
|
|
304,261
|
|
|
Eshel Bar-Adon
5
|
|
11,390
|
|
|
338,092
|
|
1
|
|
Mr. Garrabrants chose to net settle his shares upon vesting, selling back to the Company 134,784 shares of the 256,000 vested shares to cover his income tax withholding.
|
2
|
|
Mr. Micheletti chose to net settle his shares upon vesting, selling back to the Company 24,846 shares of the 45,000 vested shares to cover his income tax withholding.
|
3
|
|
Mr. Swanson chose to net settle his shares upon vesting, selling back to the Company 6,555 shares of the 17,057 vested shares to cover his income tax withholding.
|
4
|
|
Mr. Constantine chose to net settle his shares upon vesting, selling back to the Company 2,795 shares of the 7,445 vested shares to cover his income tax withholding.
|
5
|
|
Mr. Bar-Adon chose to net settle his shares upon vesting, selling back to the Company 3,964 shares of the 11,390 vested shares to cover his income tax withholding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
Termination After
Change-in-Control
5, 6
|
|||||||||||||
|
|
A
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|||||||||||
Type of Benefit
1
|
|
Death
|
|
Disability
|
|
Termination
before a Change-
in-Control
by Company
without
Cause
|
|
Upon a
Change-in-
Control
5
|
|
Termination by
Company for Any
Reason or by
Executive with
Good Reason
|
|
Termination by
Executive
without Good
Reason
|
|||||||||||
Cash Severance
2
|
|
$
|
1,421,407
|
|
|
1,421,407
|
|
|
$
|
2,853,053
|
|
|
$
|
—
|
|
|
$
|
3,538,033
|
|
|
$
|
—
|
|
Restricted Stock Unit Vesting
3
|
|
26,915,638
|
|
|
26,519,638
|
|
|
26,519,638
|
|
|
26,519,638
|
|
|
—
|
|
|
—
|
|
|||||
280G Tax Gross Up
4
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total Value Upon Event
|
|
$
|
28,337,045
|
|
|
27,941,045
|
|
|
$
|
29,372,691
|
|
|
$
|
26,519,638
|
|
|
$
|
3,538,033
|
|
|
$
|
—
|
|
Total Value Upon CIC and Termination Events in Column D (
Column C+D
)
|
|
|
|
|
|
|
|
|
|
$
|
30,057,671
|
|
|
|
|||||||||
Total Value Upon CIC and Termination Event in Column E (
Column C+E
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
26,519,638
|
|
1
|
|
This change in control table is based on Mr. Garrabrants Second Amended and Restated Employment Agreement dated June 30, 2017.
|
2
|
|
Mr. Garrabrants’ employment agreement provides for a lump sum cash payment in the amount of two times his annual salary plus one times his target bonus, in the event the Company terminates his employment, without cause, prior to a change-in-control; or three times his annual salary plus three times his target bonus if within one year following a change-in-control, our successor terminates his employment for any reason or by Mr. Garrabrants for good reason. He is also entitled his annual cash incentive award. Column D includes an additional amount equal to three times the amount of the annual target cash incentive award.
|
3
|
|
The value of restricted stock unit vesting was calculated by multiplying the number of unvested shares by the stock price at grant under the previous employment contract, consisting of 72,000 by $29.41, 144,000 by $20.92, 120,000 by $26.50, plus under the New Agreement for the RSUs the remaining allocated expense for fiscal 2018 of $3.4 million and the value of the PUs of $14.9 million.
|
4
|
|
Mr. Garrabrants’ employment agreement provides that if any Company payments made upon termination after a change-in-control of the Company constitutes a “parachute payment” under Section 280G of the Internal Revenue Code, the Company would not make a gross-up payment to Mr. Garrabrants. The Company is required to adjust the parachute payment downward, if such a decrease will increase the net after-tax payment to Mr. Garrabrants. No such adjustment downward has been made in the numbers above.
|
5
|
|
These columns assume the vesting of all unvested stock options and restricted stock units accelerated on the consummation of the change-in-control as provided in the Company’s Plans and there was no assumption or substitution of unvested stock options and restricted stock by the acquirer.
|
6
|
|
For a change-in-control and subsequent termination of Mr. Garrabrants’ employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination.
|
|
|
|
|
|
|
|
|
Termination After
Change-in-Control
3, 4
|
||||||||||||
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
||||||||||
Type of Benefit
|
|
Death or
Disability
|
|
Termination
before a Change-
in-Control
by Company
without
Cause
|
|
Upon a
Change-in-
Control
3
|
|
Termination by
Company for Any
Reason or by
Executive with
Good Reason
|
|
Termination by
Executive
without Good
Reason
|
||||||||||
Cash Severance
1
|
|
$
|
808,500
|
|
|
$
|
318,500
|
|
|
$
|
—
|
|
|
$
|
318,500
|
|
|
$
|
—
|
|
Restricted Stock Unit Vesting
2
|
|
2,635,707
|
|
|
2,635,707
|
|
|
2,635,707
|
|
|
—
|
|
|
—
|
|
|||||
Total Value Upon Event
|
|
$
|
3,444,207
|
|
|
$
|
2,954,207
|
|
|
$
|
2,635,707
|
|
|
$
|
318,500
|
|
|
$
|
—
|
|
Total Value Upon CIC and Termination Events in Column D (
Column C+D
)
|
|
|
|
|
|
|
|
$
|
2,954,207
|
|
|
|
||||||||
Total Value Upon CIC and Termination Event in Column E (
Column C+E
)
|
|
|
|
|
|
|
|
|
|
$
|
2,635,707
|
|
1
|
|
Mr. Micheletti’s employment agreement provides for a lump sum cash payment in the amount of three times his annual salary, in the event of death and one times his annual salary if the Company terminates his employment. He is also entitled to a prorated annual cash incentive award.
|
2
|
|
The value of restricted stock unit vesting was calculated by multiplying the number of unvested shares of 15,000 by $29.75, less $376,593 already expensed, unvested shares of 30,000 by $20.92, less $266,515 already expensed, unvested shares of 45,000 by $26.50, less $337,603 already expensed and unvested shares of 45,000 by $40.91, the Company’s stock price at June 30, 2018.
|
3
|
|
These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquiring company does not assume such awards.
|
4
|
|
For a change-in-control and subsequent termination of Mr. Micheletti’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination.
|
|
|
|
|
|
|
|
|
Termination After
Change-in-Control
3, 4
|
||||||||||||
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
||||||||||
Type of Benefit
|
|
Death or
Disability
|
|
Termination
before a Change-
in-Control
by Company
without
Cause
|
|
Upon a
Change-in-
Control
3
|
|
Termination by
Company for Any
Reason or by
Executive with
Good Reason
|
|
Termination by
Executive
without Good
Reason
|
||||||||||
Cash Severance
1
|
|
$
|
—
|
|
|
$
|
275,000
|
|
|
$
|
—
|
|
|
$
|
275,000
|
|
|
$
|
—
|
|
Restricted Stock Unit Vesting
2
|
|
435,993
|
|
|
435,993
|
|
|
435,993
|
|
|
—
|
|
|
—
|
|
|||||
Total Value Upon Event
|
|
$
|
435,993
|
|
|
$
|
710,993
|
|
|
$
|
435,993
|
|
|
$
|
275,000
|
|
|
$
|
—
|
|
Total Value Upon CIC and Termination Events in Column D (
Column C+D
)
|
|
|
|
|
|
|
|
$
|
710,993
|
|
|
|
||||||||
Total Value Upon CIC and Termination Event in Column E (
Column C+E
)
|
|
|
|
|
|
|
|
|
|
$
|
435,993
|
|
1
|
|
Mr. Bar-Adon’s employment agreement provides for a lump sum cash payment in the amount of one times his annual salary if the Company terminates his employment, without cause, prior to or after a change-in-control, by our successor after a change-in-control.
|
2
|
|
The value of restricted stock unit vesting was calculated by multiplying the number of unvested shares of 2,334 by $20.00, less $31,081 already expensed, unvested shares of 6,184 by $17.25, less $47,364 already expensed, unvested shares of 4,181 by $27.91, less $26,209 already expensed, unvested shares of 7,357 by $23.79, less $56,415 already expensed, and unvested shares of 6,268 by $28.72, less $28,048 already expensed.
|
3
|
|
These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquirer does not assume such awards.
|
4
|
|
For a change-in-control and subsequent termination of Mr. Bar-Adon’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination.
|
|
|
|
|
|
|
|
|
Termination After
Change-in-Control
3, 4
|
||||||||||||
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
||||||||||
Type of Benefit
|
|
Death or
Disability
|
|
Termination
before a Change-
in-Control
by Company
without
Cause
|
|
Upon a
Change-in-
Control
3
|
|
Termination by
Company for Any
Reason or by
Executive with
Good Reason
|
|
Termination by
Executive
without Good
Reason
|
||||||||||
Cash Severance
1
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
510,000
|
|
|
$
|
—
|
|
Restricted Stock Unit Vesting
2
|
|
514,081
|
|
|
—
|
|
|
514,081
|
|
|
—
|
|
|
—
|
|
|||||
Total Value Upon Event
|
|
$
|
514,081
|
|
|
$
|
—
|
|
|
$
|
514,081
|
|
|
$
|
510,000
|
|
|
$
|
—
|
|
Total Value Upon CIC and Termination Events in Column D (
Column C+D
)
|
|
|
|
|
|
|
|
$
|
1,024,081
|
|
|
|
||||||||
Total Value Upon CIC and Termination Event in Column E (
Column C+E
)
|
|
|
|
|
|
|
|
|
|
$
|
514,081
|
|
1
|
|
Mr. Swanson’s employment agreement provides for a lump sum cash payment in the amount of two times his annual salary if the Company terminates his employment, without cause, after a change-in-control, by our successor after a change-in-control.
|
2
|
|
The value of restricted stock unit vesting was calculated by multiplying the number of unvested shares of 3,084 by $20.00, less $41,069 already expensed, unvested shares of 7,344 by $17.25, less $56,227 already expensed, unvested shares of 4,778 by $27.91, less $29,959 already expensed, unvested shares of 8,828 by $23.79, less $67,689 already expensed, and unvested shares of 7,312 by $28.72, less $32,720 already expensed.
|
3
|
|
These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquirer does not assume such awards.
|
4
|
|
For a change-in-control and subsequent termination of Mr. Swanson’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination.
|
|
|
|
|
|
|
|
|
Termination After
Change-in-Control
3, 4
|
||||||||||||
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
||||||||||
Type of Benefit
|
|
Death or
Disability
|
|
Termination
before a Change-
in-Control
by Company
without
Cause
|
|
Upon a
Change-in-
Control
3
|
|
Termination by
Company for Any
Reason or by
Executive with
Good Reason
|
|
Termination by
Executive
without Good
Reason
|
||||||||||
Cash Severance
1
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
Restricted Stock Unit Vesting
2
|
|
347,008
|
|
|
347,008
|
|
|
347,008
|
|
|
—
|
|
|
—
|
|
|||||
Total Value Upon Event
|
|
$
|
347,008
|
|
|
$
|
597,008
|
|
|
$
|
347,008
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
Total Value Upon CIC and Termination Events in Column D (
Column C+D
)
|
|
|
|
|
|
|
|
$
|
597,008
|
|
|
|
||||||||
Total Value Upon CIC and Termination Event in Column E (
Column C+E
)
|
|
|
|
|
|
|
|
|
|
$
|
347,008
|
|
1
|
|
Mr. Constantine’s employment agreement provides for a lump sum cash payment in the amount of one times his annual salary if the Company terminates his employment, without cause, prior to or after a change-in-control, by our successor after a change-in-control.
|
2
|
|
The value of restricted stock unit vesting was calculated by multiplying the number of unvested shares of 1,918 by $20.00, less $25,542 already expensed, unvested shares of 4,638 by $17.25, less $35,509 already expensed, unvested shares of 3,345 by $27.91, less $20,968 already expensed, unvested shares of 5,885 by $23.79, less $45,118 already expensed, and unvested shares of 5,049 by $28.72, less $22,597 already expensed.
|
3
|
|
These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquirer does not assume such awards.
|
4
|
|
For a change-in-control and subsequent termination of Mr. Constantine’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination.
|
|
Respectfully submitted,
|
The Compensation Committee of the Board of Directors
|
James J. Court, Chairman
|
John Gary Burke
|
Paul J. Grinberg
|
|
|
At the Fiscal Years Ended June 30,
|
||||||||||||||||||
(Dollars in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Total stockholders’ equity
|
|
$
|
960,513
|
|
|
$
|
834,247
|
|
|
$
|
683,590
|
|
|
$
|
533,526
|
|
|
$
|
370,778
|
|
Less: preferred stock
|
|
5,063
|
|
|
5,063
|
|
|
5,063
|
|
|
5,063
|
|
|
5,063
|
|
|||||
Common stockholders’ equity
|
|
955,450
|
|
|
829,184
|
|
|
678,527
|
|
|
528,463
|
|
|
365,715
|
|
|||||
Less: mortgage servicing rights, carried at fair value
|
|
10,752
|
|
|
7,200
|
|
|
3,943
|
|
|
2,098
|
|
|
562
|
|
|||||
Less: goodwill and other intangible assets
|
|
67,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Tangible book value (Non-GAAP)
|
|
$
|
876,910
|
|
|
$
|
821,984
|
|
|
$
|
674,584
|
|
|
$
|
526,365
|
|
|
$
|
365,153
|
|
Common shares outstanding at end of period
|
|
62,688,064
|
|
|
63,536,244
|
|
|
63,219,392
|
|
|
62,075,004
|
|
|
57,807,600
|
|
|||||
Tangible book value per common share (Non-GAAP)
|
|
$
|
13.99
|
|
|
$
|
12.94
|
|
|
$
|
10.67
|
|
|
$
|
8.48
|
|
|
$
|
6.32
|
|
|
Jun-13
|
Jun-14
|
Jun-15
|
Jun-16
|
Jun-17
|
Jun-18
|
||||||||||||
BofI
|
$
|
100.00
|
|
$
|
160.30
|
|
$
|
230.63
|
|
$
|
154.54
|
|
$
|
206.98
|
|
$
|
356.98
|
|
NASDAQ
|
100.00
|
|
131.17
|
|
150.10
|
|
147.58
|
|
189.34
|
|
234.02
|
|
||||||
XABQ
|
100.00
|
|
121.18
|
|
136.90
|
|
135.95
|
|
186.46
|
|
207.00
|
|
|
|
Fees Charged
|
|
Fees Charged
|
||||
Nature of Services
|
|
2018
|
|
2017
|
||||
Audit fees
1
|
|
$
|
497,800
|
|
|
$
|
481,362
|
|
Audit-related fees
2
|
|
—
|
|
|
—
|
|
||
Tax fees
3
|
|
—
|
|
|
—
|
|
||
|
|
$
|
497,800
|
|
|
$
|
481,362
|
|
1
|
|
Audit Fees
consist of fees billed and unbilled and expenses for professional services rendered for the audit of the Company’s consolidated annual financial statements, review of interim consolidated financial statements included in quarterly reports and services closely related to the audit and that in many cases could only be performed by the independent registered public accounting firm.
|
2
|
|
Audit-Related Fees
consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”
|
3
|
|
Tax Fees
consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning.
|
|
Respectfully submitted,
|
The Audit Committee of the Board of Directors
|
Paul J. Grinberg, Chairman
|
James S. Argalas
|
Nicholas A. Mosich
|
|
By Order of the Board of Directors,
|
|
|
Gregory Garrabrants
|
President and Chief Executive Officer
|
|
September 7, 2018
|
|
||
|
|
|
From the South
|
|
From the North
|
Take I-805 North
Exit Miramar Road/La Jolla Village Dr.
Go West onto La Jolla Village Dr.
Turn Right onto Genesee Ave.
Turn Right onto Executive Square
Follow driveway up and veer left, into the Visitor Parking structure
.
|
|
Take I-805 South
Exit Miramar Road/La Jolla Village Dr.
Go West onto La Jolla Village Dr.
Turn Right onto Genesee Ave.
Turn Right onto Executive Square
Follow driveway up and veer left, into the Visitor Parking structure.
|
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