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NOTICE OF 2013 ANNUAL MEETING

AND PROXY STATEMENT

April 30, 2013

You are cordially invited to attend our 2013 Annual Meeting of Stockholders at 10:00 a.m., Dallas, Texas, local time, on June 12, 2013.  The meeting will be held at The Crescent Club at 200 Crescent Court, 17th Floor, Dallas, Texas 75201.

This booklet includes the formal notice of the meeting and our proxy statement.  The proxy statement tells you about the matters to be addressed, and the procedures for voting, at the meeting.

YOUR VOTE IS VERY IMPORTANT.  Even if you only have a few shares, we want your shares to be represented.  If your shares are held in a brokerage account, your broker no longer has discretion to vote on your behalf with respect to electing directors or certain other non-routine matters. Accordingly, you must provide specific voting instructions to your broker in order to vote.  Please vote promptly in order to ensure that your shares are represented at the meeting.

The Notice of Internet Availability of Proxy Materials or this proxy statement and the accompanying proxy card, Notice of 2013 Annual Meeting of Stockholders and annual report for the year ended December 31, 2012 were first mailed to all stockholders of record on or about April 30, 2013.

We look forward to seeing you at the meeting.

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 12, 2013.

Our proxy statement and our annual report for the fiscal year ended December 31, 2012 are both available at www.proxyvote.com.

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Notice of 2013 Annual Meeting of Stockholders

To Be Held on June 12, 2013

Pursuant to rules promulgated by the Securities and Exchange Commission, we are providing access to our proxy materials, including this proxy statement and our annual report for the year ended December 31, 2012, over the Internet.  As a result, we are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy materials.  The notice contains instructions on how to access those proxy materials over the Internet, as well as instructions on how to request a paper copy of our proxy materials.  All stockholders who are not sent a notice will be sent a paper copy of our proxy materials by mail.  This electronic distribution process reduces the environmental impact and lowers the costs of printing and distributing our proxy materials.

Your vote is very important.  Please read the proxy statement and voting instructions on the enclosed proxy card.  Then, whether or not you plan to attend the annual meeting in person, and no matter how many shares you own, please vote by Internet, telephone or by marking, signing, dating and promptly returning the enclosed proxy card in the enclosed envelope, which requires no additional postage if mailed in the United States.  Please see “General Information - What should I do if I want to attend in person?” for information on how to obtain directions to be able to attend the meeting and vote in person.

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PROXY STATEMENT

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HILLTOP HOLDINGS INC.

200 Crescent Court, Suite 1330

Dallas, Texas 75201

PROXY STATEMENT

2013 Annual Meeting of Stockholders

To be Held on June 12, 2013

GENERAL INFORMATION

The Notice of Internet Availability of Proxy Materials or this Proxy Statement and the accompanying proxy card, Notice of 2013 Annual Meeting of Stockholders and Annual Report on Form 10-K for the year ended December 31, 2012 were first mailed to all stockholders of record on or about April 30, 2013.

Unless otherwise indicated or unless the context otherwise requires, all references in this Proxy Statement to “the Company”, “Hilltop”, “we”, “us”, “our” and similar expressions are references to Hilltop Holdings Inc.  All references to “NLASCO” are references to NLASCO, Inc., our wholly-owned property and casualty insurance holding company.  All references to “PlainsCapital” are references to PlainsCapital Corporation, our wholly owned financial services holding company; references to the “Bank” refer to PlainsCapital Bank (a wholly owned subsidiary of PlainsCapital Corporation); references to “First Southwest” refer to First Southwest Holdings, LLC (a wholly owned subsidiary of the Bank) and its subsidiaries as a whole; and references to “PrimeLending” refer to PrimeLending, a PlainsCapital Company (a wholly owned subsidiary of the Bank) and its subsidiaries as a whole.

Why am I receiving these proxy materials?

The Board of Directors of Hilltop Holdings Inc., or the Board of Directors, has made these materials available to you on the Internet or has delivered printed versions of these materials to you by mail in connection with the Board of Directors’ solicitation of proxies for use at our 2013 Annual Meeting of Stockholders, or the Annual Meeting, which will take place at 10:00 a.m. (Dallas, Texas time) on Wednesday, June 12, 2013, at The Crescent Club, 200 Crescent Court, 17th Floor, Dallas, Texas 75201.  This Proxy Statement describes matters on which you, as a stockholder, are entitled to vote.  This Proxy Statement also gives you information on these matters so that you can make an informed decision.

Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials instead of printed proxy materials?

In accordance with rules promulgated by the Securities and Exchange Commission, or the SEC, instead of mailing a printed copy of our proxy materials to all of our stockholders, we have elected to furnish such materials to selected stockholders by providing access to these documents over the Internet.  Accordingly, on or about April 30, 2013, we sent a Notice of Internet Availability of Proxy Materials, or the Notice, to selected stockholders of record and beneficial owners.  These stockholders have the ability to access the proxy materials on a website referred to in the Notice or to request to receive a printed set of the proxy materials by calling the toll-free number found on the Notice.  We encourage you to take advantage of the availability of the proxy materials on the Internet in order to help reduce the environmental impact of the Annual Meeting.

How can I get electronic access to the proxy materials?

The Notice provides you with instructions regarding how to:

·                  view our proxy materials for the Annual Meeting on the Internet;

·                  vote your shares after you have viewed our proxy materials;

·                  register to attend the meeting in-person;

·                  request a printed copy of the proxy materials; and

·                  instruct us to send our future proxy materials to you electronically by email.

Copies of the proxy materials are available for viewing at www.proxyvote.com.

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You may have received proxy materials by email.  Even if you received a printed copy of our proxy materials, you may choose to receive future proxy materials by email.  Choosing to receive your future proxy materials by email will lower our costs of delivery and will reduce the environmental impact of our annual meetings.  If you choose to receive our future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and link to the proxy voting site.  Your election to receive proxy materials by email will remain in effect until you terminate it or for so long as the email address provided by you is valid.

What am I voting on?

At the Annual Meeting, stockholders will be asked to:

·                  Elect 21 directors to serve on our Board of Directors until the 2014 Annual Meeting of Stockholders and until their successors are duly elected and qualified;

·                  Conduct an advisory vote to approve executive compensation;

·                  Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal quarter ended March 31, 2013; and

·                  Transact any other business that may properly come before the meeting and any adjournments or postponements of the meeting.

What are the Board of Directors’ recommendations?

The Board of Directors recommends that you vote your shares:

·                  FOR each of our director candidates;

·                  FOR, on an advisory basis, the approval of the compensation of our named executive officers; and

·                  FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal quarter ended March 31, 2013.

Who is entitled to vote?

Holders of record of our common stock at the close of business on April 9, 2013, are entitled to vote at the meeting.  Each stockholder is entitled to cast one vote for each share of common stock owned on each matter presented.

How do I vote?

If you are a stockholder of record, there are four ways to vote:

·                  In Person.  You may vote in person at the Annual Meeting.  Bring your printed proxy card if you received one by mail.  Otherwise, we will provide stockholders of record a ballot at the Annual Meeting.  We recommend that you vote by proxy even if you plan to attend the Annual Meeting.  You always can change your vote at the Annual Meeting.

·                  Via the Internet.  You may vote by proxy via the Internet by visiting www.proxyvote.com.  Have your proxy card or Notice in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.

·                  Via Telephone.  If you received or requested printed copies of the proxy materials by mail, you may vote by proxy by calling the toll-free number found on the proxy card.

·                  Via Mail.  If you received or requested printed copies of the proxy materials by mail, you may vote by proxy by marking, signing and dating the proxy card and sending it back in the envelope provided.

If you have shares of our common stock that are held by a broker or other nominee, you may instruct your broker or nominee to vote your shares by following the instructions that the broker or nominee provides you.  New York Stock Exchange rules prohibit your broker from voting for the election of directors and executive compensation on your behalf without specific voting instructions from you.  Many brokers allow stockholders to provide voting instructions by mail, telephone and the Internet.

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How do proxies work?

Our Board of Directors is asking for your proxy.  Giving your proxy to the persons named by us means you authorize them to vote your shares at the Annual Meeting in the manner you direct.  You may vote for all, some or none of our director candidates, and you may vote for or against, or abstain from voting on, executive compensation and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal quarter ended March 31, 2013.

If you are a stockholder of record, and you indicate when voting on the Internet or by telephone that you wish to vote as recommended by our Board of Directors or you sign and return the enclosed proxy card, but do not specify how your shares are to be voted, your shares will be voted FOR the election of all of our director candidates, FOR the approval of our executive compensation and FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal quarter ended March 31, 2013.

If you are a beneficial owner of shares held in street name and you do not provide the organization that holds your shares with specific voting instructions, under the rules promulgated by the New York Stock Exchange, the organization that holds your shares may generally vote on “routine” matters at its discretion, but cannot vote on “non-routine” matters.  If the organization that holds your shares does not receive instructions from you on how to vote your shares on a “non-routine” matter, that organization will inform the inspector of election that it does not have the authority to vote on such matters with respect to your shares, which is generally referred to as a “broker non-vote.”

You may receive more than one proxy or voting card depending on how you hold your shares.  Shares registered in your name are covered by one card.  If you also hold shares through a broker or other nominee, you also may receive material from them asking how you want to vote.  To be sure that all of your shares are voted, we encourage you to respond to each request you receive.

Which matters are considered “routine” or “non-routine”?

The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal quarter ended March 31, 2013, is considered to be a “routine” matter.  A broker or other nominee may generally vote on routine matters and, therefore, no broker non-votes are expected to exist with respect to this matter.   All other matters set forth in this Proxy Statement are matters that we believe will be designated “non-routine” matters.  A broker or other nominee cannot vote without instructions on non-routine matters and, therefore, there will be broker non-votes on all matters other than the ratification of the appointment of PricewaterhouseCoopers LLP.

Can I change my vote or revoke my proxy after I have voted?

You may revoke your proxy and change your vote at any time before the final vote at the Annual Meeting, or earlier deadline specified in the Notice or the proxy card, by voting again via the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted), by signing and returning a new proxy card or vote instruction form with a later date, or by attending the Annual Meeting and voting in person.  Your attendance at the Annual Meeting, however, will not automatically revoke your proxy unless you vote again at the Annual Meeting or specifically request that your prior proxy be revoked by delivering, prior to the Annual Meeting, a written notice of revocation to the corporate Secretary at the address listed under “Questions” on page 54.

Will my shares be voted if I don’t sign a proxy?

If you hold your shares directly in your own name, they will not be voted unless you provide a proxy.  Under certain conditions, shares that you own that are held by a broker or nominee may be voted even if you do not provide voting instructions to the broker or nominee.  Brokerage firms have the authority under applicable rules to vote on certain “routine” matters, including the ratification of the appointment of auditors.

What constitutes a quorum?

In order to carry on the business of the meeting, we must have a quorum.  This means that at least a majority of the outstanding shares eligible to vote must be represented at the meeting, either in person or by proxy.  Shares owned by us are not voted and do not count for this purpose.  Both abstentions and broker non-votes (described below) are counted as present for purposes of determining the presence of a quorum.  On April 9, 2013, we had 83,487,340 shares of common stock outstanding and entitled to vote at the meeting.

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How many votes are needed for approval?

Election of Directors

Election of the director nominees requires the affirmative vote of a plurality of the votes cast on the matter.  The director candidates receiving the highest number of affirmative votes of the shares entitled to be voted will be elected as directors.  For purposes of the election of directors, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote.  Stockholders may not cumulate votes in the election of directors.

Advisory Vote to Approve Executive Compensation

The affirmative vote of a majority of the votes cast on the matter is required to approve, on an advisory basis, executive compensation.  The Compensation Committee of the Board of Directors will review the results of this matter and will take the results into account in making future determinations concerning executive compensation.  For purposes of the advisory vote on executive compensation, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote.

Ratification of Independent Registered Public Accounting Firm

The appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal quarter ended March 31, 2013 will be ratified if this proposal receives the affirmative vote of a majority of the votes cast on the matter.  Brokers have the authority to vote FOR this proposal in the absence of contrary instructions from a beneficial owner.  If this appointment is not ratified by stockholders, the Audit Committee and Board of Directors may reconsider its recommendation and appointment, respectively.  With respect to this proposal, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote.

Who conducts the proxy solicitation?

Our Board of Directors is soliciting the proxies, and we will bear all costs of this solicitation, including the preparation, assembly, printing and mailing of this Proxy Statement.  Copies of proxy materials will be furnished to banks, brokerage houses and other agents and nominees holding shares in their names that are beneficially owned by others so that they may forward the proxy materials to those beneficial owners.  In addition, if asked, we will reimburse these persons for their reasonable expenses in forwarding the proxy materials to the beneficial owners.  We have requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all proxy materials to the beneficial owners of the shares that they hold of record.  Certain of our officers and employees also may solicit proxies on our behalf by mail, email, phone or fax or in person.

What should I do if I want to attend in person?

You will need an admission ticket to attend the Annual Meeting.  Attendance at the Annual Meeting will be limited to stockholders of record at the close of business on April 9, 2013 (or their authorized representatives) having an admission ticket or proof of their share ownership, and guests of the Company. If you plan to attend the meeting, please indicate this when you are voting by telephone or Internet or follow the instructions on your proxy card, and we will promptly mail an admission ticket to you.

If your shares are held in the name of a bank, broker, or other holder of record and you plan to attend the meeting, you can obtain an admission ticket in advance by providing proof of your ownership, such as a bank or brokerage account statement, to the corporate Secretary at the address listed under “Questions” on page 54. If you do not have an admission ticket, you must show proof of your ownership of the Company’s common stock at the registration table at the door.

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PROPOSAL ONE — ELECTION OF DIRECTORS

General

At the recommendation of the Nominating and Corporate Governance Committee, our Board of Directors has nominated the director candidates named below.

Our Board of Directors oversees our management on your behalf.  The Board of Directors reviews our long-term strategic plans and exercises direct decision-making authority on key issues, such as the authorization of dividends, the selection of the Chief Executive Officer, setting the scope of his authority to manage our day-to-day operations and the evaluation of his performance.

Our Board of Directors is not classified; thus, all of our directors are elected annually.  The Nominating and Corporate Governance Committee has recommended, and our Board of Directors has nominated, for re-election all 21 persons currently serving as directors whose terms are expiring at the 2013 Annual Meeting of Stockholders.

If elected, each of the persons nominated as a director will serve until the next annual meeting of stockholders and until their successors are duly elected and qualified.  Personal information on each of our nominees is given below.

In connection with our acquisition of PlainsCapital, we agreed to expand our Board of Directors and appoint nine additional directors from the directors serving on the PlainsCapital board of directors immediately prior to the closing of the acquisition.  As a result, the Nominating and Corporate Governance Committee recommended the appointment of, and the Board of Directors appointed, the following legacy PlainsCapital directors to our Board of Directors effective November 30, 2012: Charlotte Jones Anderson, Tracy A. Bolt, Hill A. Feinberg, James R. Huffines, Lee Lewis, Andrew J. Littlefair, A. Haag Sherman, Robert C. Taylor, Jr. and Alan B. White.

Our Board of Directors has affirmatively determined that 12 of the 21 nominees for election as directors at the Annual Meeting have no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us) and are independent within the meaning of the director independence requirements of the listing standards of the New York Stock Exchange, or NYSE.  The independent directors are Charlotte Jones Anderson, Rhodes Bobbitt, Tracy A. Bolt, W. Joris Brinkerhoff, Charles R. Cummings, J. Markham Green, Jess T. Hay, William T. Hill, Jr., Andrew J. Littlefair, W. Robert Nichols, III, A. Haag Sherman and Robert C. Taylor, Jr.  The determinations regarding the independence of these individuals were based upon information known by the members of the Board of Directors concerning each other and supplied by each of the directors for the purpose of this determination.  In making its annual review on director independence, the Board of Directors considered transactions and relationships between each director and any member of his or her immediate family and the Company. The Board of Directors considered that four directors it determined to be independent—Ms. Anderson and Messrs. Bolt, Littlefair and Taylor—have, or a member of their immediate family or an affiliated company in which they are employed or in which they are a principal equity holder has, received loans from the Bank in the ordinary course of business that our Board of Directors did not view as compensation. In our management’s opinion, these loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the Bank with other unaffiliated persons and do not involve more than normal risk of collectability. In addition, the Board of Directors considered transactions between the Bank and Clean Energy Finance, Inc., a subsidiary of Clean Energy Fuels Corp., a company for which Andrew J. Littlefair serves as a director and president and chief executive officer. Mr. Littlefair also beneficially owned 2.0% of Clean Energy Fuels Corp. at March 18, 2013. In 2012 and late 2011, the Bank purchased, in a series of transactions, an aggregate of approximately $6.1 million in original principal amount of promissory notes issued by unaffiliated third parties from Clean Energy Finance, Inc. Although purchased at premium to the outstanding principal balance on the notes, at the time of purchase, the interest rates on the notes exceeded the market rates charged by the Bank on similar-type loans that it originated. Clean Energy Finance, Inc. performs the servicing on the notes at no cost to the Bank and sold the notes with recourse to Clean Energy Finance, Inc. in the event of default. The aggregate payments of the purchase prices in these transactions constituted less than 2% of the consolidated gross revenues of each of Clean Energy Fuels Corp. and the Company in 2012 and were made in the ordinary course of business in arms-length transactions. Mr. Littlefair did not have a direct financial interest in any of the transactions with Clean Energy Finance, Inc.  Assuming the election of our 21 nominees, all of our directors, other than Messrs. Hill A. Feinberg,

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Gerald Ford, Jeremy Ford, James R. Huffines, Lee Lewis, Clifton Robinson, Kenneth D. Russell, Carl Webb and Alan B. White, also will be “independent” directors, as set forth in our Director Independence Criteria.  The full text of the Director Independence Criteria can be found in the “Corporate Information — Governance Documents” section of our website at www.hilltop-holdings.com.  A copy also may be obtained upon request by writing our corporate Secretary at the address provided on page 54.

Our Board of Directors met six times during 2012.  During 2012, no director attended fewer than 75% of the meetings of the Board of Directors and of the board committees on which he or she served.  Because fewer than ten non-management stockholders usually attend our annual meetings in person, our Board of Directors has not adopted a formal policy with regard to director attendance at the annual meetings of stockholders.  We, however, encourage members of the Board of Directors to attend annual meetings.  Messrs. Jeremy Ford and Robert Nichols attended the 2012 annual meeting of stockholders.

Nominees for Election as Directors

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Vote Necessary to Elect Directors

Election of the director nominees requires the affirmative vote of a plurality of the votes cast on the matter.  The director candidates receiving the highest number of affirmative votes of the shares entitled to be voted will be elected as directors.  For purposes of the election of directors, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote.  Under applicable rules, a broker or other nominee

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does not possess the authority to vote for the director nominees in the absence of instructions from the beneficial owner of the relevant shares.  Stockholders may not cumulate votes in the election of directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES IDENTIFIED ABOVE.

Director Compensation

General

Members of our Board of Directors who also are full-time employees do not receive any compensation for their service on the Board of Directors or any committee of the Board of Directors.  All other directors receive the following compensation for their service on the Board of Directors:

·                  $40,000 annual retainer; and

·                  $2,000 fee for participation in each meeting of the Board of Directors at which attendance in person is requested (one-half of that fee is paid for participation in any meeting at which attendance is requested by telephone).

In addition, members of board committees receive the following additional compensation:

·                  Audit Committee—$65,000 annual fee for the chairperson of the committee;

·                  Nominating and Corporate Governance Committee—$10,000 annual fee for the chairperson of the committee;

·                  Compensation Committee—$10,000 annual fee for the chairperson of the committee;

·                  Investment Committee—$25,000 annual fee for the chairperson of the committee;

·                  Merger and Acquisition Committee — $10,000 annual fee for the chairperson of the committee; and

·      $1,000 fee for participation in each meeting of a board committee.

Members of our Board of Directors may elect to receive their aggregate Board of Directors and board committee compensation:

·                  entirely in the form of cash;

·                  entirely in the form of common stock; or

·                  one-half in cash and one-half in common stock.

Cash and shares of common stock are paid and issued, respectively, in arrears on a calendar quarterly basis, with no vesting requirements.  Customarily, these payments and issuances occur by the 15th day of the month following the applicable calendar quarter-end.  The value of the common stock awarded is based upon the average closing price per share of our common stock for the last ten consecutive trading days of the applicable calendar quarter.  In lieu of fractional shares of common stock that would otherwise be issuable to directors, we pay cash to the director based upon the value of those fractional shares at the value the shares are awarded to the director.  If a director does not serve for the entire calendar quarter, that director is compensated based upon the time of service during the applicable calendar quarter.

Each member of our Board of Directors is reimbursed for out-of-pocket expenses associated with his service on, and attendance at, Board of Directors or board committee meetings.  Other than as described above, members of our Board of Directors receive no additional compensation for their service on the Board of Directors or board committees.

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Political Action Committee Matching Program

The NLASCO Political Action Committee, or the PAC, is a separate segregated fund that was formed to make political contributions.  To encourage participation in the PAC by eligible participants, for each contribution made to the PAC by an eligible individual contributor, Hilltop makes a matching contribution to any Section 501(c)(3) organization of the contributor’s choice, dollar for dollar, up to the maximum amount an eligible individual can contribute to the PAC in a given calendar year.  Under this program, no contributor to the PAC receives any financial, tax or other tangible benefit or premium from either Hilltop or the recipient charities.  This program is completely voluntary.

2012 Director Compensation

Director Compensation Table for 2012(a)

(a)         Fees earned for services performed in 2012 include annual retainers, meeting fees and chairperson remuneration.  Aggregate fees paid to non-employee directors for annual retainers and committee chairmanships were paid quarterly in arrears.  Cash was paid in lieu of the issuance of fractional shares.  Service for any partial quarter is calculated and paid on the basis of time served during the applicable calendar quarter.  Non-employee directors are solely responsible for the payment of taxes payable on remuneration paid by the Company.  The value of stock awarded was determined based upon the average closing price per share of our common stock for the last ten consecutive trading days of the calendar quarter during which the stock was earned; however, the amount reported in the table for each stock award was determined in accordance with FASB ASC Topic 718.

(b)         Represents service as a director since November 30, 2012.

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As described above, the 2012 stock awards were issued to each non-employee director who elected to receive all or part of his director compensation in the form of our common stock, generally within 15 days following each applicable calendar quarter-end.  All of our personnel, as well as non-employee directors, are subject to trading restrictions with regard to our common stock, and trading may only occur during a “trading window.”  Provided that any such party does not possess material, non-public information about us, this trading period commences on the second business day after the public release of quarterly or annual financial information and ends one month after the public release of that information.

The following numbers of shares of our common stock were issued to our directors for services performed during 2012:  Carl B. Webb—3,765 shares.

Each of the above directors had outstanding the following aggregate numbers of shares of our common stock awarded for services performed on behalf of us from election or appointment through the end of fiscal 2012:  Rhodes Bobbitt—1,562 shares; W. Joris Brinkerhoff—9,943 shares; Charles R. Cummings—5,379 shares; Gerald J. Ford—2,893 shares;  J. Markham Green—3,872 shares;  and Carl B. Webb—32,172 shares.  For further information about the stockholdings of these directors and our management, see “Stock Ownership—Security Ownership of Management” commencing on page 23 of this Proxy Statement.

Board Committees

General

The Board of Directors appoints committees to assist it in carrying out its duties.  In particular, committees work on key issues in greater detail than would be practical at a meeting of all the members of the Board of Directors.  Each committee reviews the results of its deliberations with the full Board of Directors.

The standing committees of the Board of Directors currently consist of the Audit Committee, the Compensation Committee, the Executive Committee, the Merger and Acquisition Committee, the Nominating and Corporate Governance Committee and the Investment Committee.  Current copies of the charters for the Audit Committee, the Compensation Committee, the Merger and Acquisition Committee, the Nominating and Corporate Governance Committee and the Investment Committee, as well as our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Code of Ethics for Chief Executive and Senior Financial Officers, may be found on our website at www.hilltop-holdings.com, under the heading “Corporate Information —Governance Documents.”  Printed versions also are available to any stockholder who requests them by writing to our corporate Secretary at the address listed under “Questions” on page 54.  A more detailed description of these committees is set forth below.  Our Board of Directors may, from time to time, establish certain other committees to facilitate our management.

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Committee Membership

The following table shows the current membership of, and the 2012 fiscal meeting information for, each of the committees of the Board of Directors.

(a)    The Executive Committee was formed in 2013.

Audit Committee

We have a standing Audit Committee established within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934.  The Audit Committee helps our Board of Directors ensure the integrity of our financial statements, the qualifications and independence of our independent registered public accounting firm and the performance of our internal audit function and independent registered public accounting firm.  In furtherance of those matters, the Audit Committee assists in the establishment and maintenance of our internal audit controls, selects, meets with and assists the independent registered public accounting firm, oversees each annual audit and quarterly review and prepares the report that federal securities laws require be included in our annual proxy statement, which appears on page 51.  Mr. Cummings has been designated as Chairman, and Messrs. Green and Bolt are members, of the Audit Committee.  Until January 9, 2013, Mr. Bobbitt also served as a member of the Audit Committee.  Our Board of Directors has reviewed the education, experience and other qualifications of each member of the Audit Committee.  Based upon that review, our Board of Directors has determined that each of Mr. Cummings and Mr. Bolt qualify as an “audit committee financial expert,” as defined by the rules of the Securities and Exchange Commission, and each member is independent for purposes of audit committee members, as set forth in the New York Stock Exchange’s listing standards.  Currently, none of our Audit Committee members serve on the audit committees of three or more public companies.

Compensation Committee

The Compensation Committee reviews and approves the compensation and benefits of our executive officers, administers our approved annual incentive plan and our 2003 and 2012 equity incentive plans and produces the annual report on executive compensation for inclusion in our annual proxy statement, which appears on page 36.  Each member is independent in accordance with the listing standards of the New York Stock Exchange.

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Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee’s purpose is as follows:

·                  Identify, screen and recommend to our Board of Directors individuals qualified to serve as members, and on committees, of the Board of Directors;

·                  Advise our Board of Directors with respect to the composition, procedures and committees of the Board of Directors;

·                  Advise our Board of Directors with respect to the corporate governance principles applicable to the Company; and

·                  Oversee the evaluation of the Board of Directors and our management.

Each member is independent in accordance with the listing standards of the New York Stock Exchange.

Investment Committee

The Investment Committee is responsible for, among other things, reviewing investment policies, strategies and programs; reviewing the procedures that we utilize in determining that funds are invested in accordance with policies and limits approved by the Investment Committee; and reviewing the quality and performance of our investment portfolios and the alignment of asset duration to liabilities.

Merger and Acquisition Committee

The purpose of the Merger and Acquisition Committee is to review potential mergers, acquisitions or dispositions of material assets or a material portion of any business proposed by management and to report its findings and conclusions to the Board of Directors.  Each member is independent in accordance with the listing standards of the New York Stock Exchange.

Executive Committee

The Executive Committee, with certain exceptions, has the power and authority of the Board of Directors to manage the affairs of the Company between meetings of the Board of Directors.

Corporate Governance

General

We are committed to good corporate governance practices and, as such, we have adopted formal corporate governance guidelines to enhance our effectiveness.  The guidelines govern, among other things, board member qualifications, responsibilities, education, management succession and executive sessions.  A copy of the corporate governance guidelines may be found at our corporate website at www.hilltop-holdings.com under the heading “Corporate Information —Governance Documents.”  A copy also may be obtained upon request from our corporate Secretary at the address listed under “Questions” on page 54.

Board Leadership Structure

Except for a brief period in 2010 where Mr. Gerald J. Ford served as interim Chief Executive Officer, historically, we have separated the offices of Chief Executive Officer and Chairman of the Board as a means of separating management of the Company from our Board of Director’s oversight of management.  Separating these roles also enabled an orderly leadership transition when Mr. Larry Willard retired at the conclusion of 2009.  We believe, at this time, that this structure provides desirable oversight of our management and affairs.  We have in the past appointed, and will continue to appoint, lead independent directors as circumstances require.

Risk Oversight

Our Board of Directors oversees an enterprise-wide approach to risk management, intended to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value.  Our Board of Directors is actively involved in establishing and

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refining our business strategy, including assessing management’s appetite for risk and determining the appropriate level of overall risk for the Company.  We may conduct assessments in the future as circumstances warrant.

While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board of Directors also have responsibility for risk management.  In particular, the Audit Committee focuses on financial risk, including internal controls, and, from time to time, discusses and evaluates matters of risk, risk assessment and risk management with our management team.  The Compensation Committee is responsible for overseeing the management of risk associated with our compensation policies and arrangements.  The Nominating and Corporate Governance Committee ensures that the internal rule processes by which we are governed are consistent with prevailing best governance practices and applicable laws and regulations.  Finally, the Investment Committee ensures that our funds are invested in accordance with policies and limits approved by it.  Our Senior Officer Code of Ethics, Code of Business Conduct and Ethics, Committee Charters and other governance documents are reviewed by the appropriate committees annually to confirm continued compliance, ensure that the totality of our risk management processes and procedures is appropriately comprehensive and effective and that those processes and procedures reflect established best practices.

Board Performance

Our Board of Directors conducts an annual survey of its members regarding its performance and reviews the results of the survey with a view to improving efficacy and effectiveness of the Board of Directors.  In addition, the full Board of Directors reviews annually the qualifications and effectiveness of the Audit Committee and its members.

Director Qualifications for Service

As described below, the Nominating and Corporate Governance Committee considers a variety of factors when a candidate is being considered to fill a vacancy on the Board of Directors or when nomination of an incumbent director for re-election is under consideration. The Nominating and Corporate Governance Committee and the Board of Directors strive to balance a diverse mix of experience, perspective, skill and background with the practical requirement that the Board of Directors will operate collegially, with the common purpose of overseeing our business on behalf of our stockholders. All of our directors possess relevant experience, and each of them approaches the business of the Board of Directors and their responsibilities with great seriousness of purpose. The following describes, with respect to each director, his or her particular experience, qualifications, attributes and skills that qualify him to serve as a director:

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Executive Board Sessions

The current practice of our Board of Directors is to hold an executive session of its non-management directors at least once per quarter.  The individual who serves as the chair at these executive sessions rotates each year among the chairs (if such chair is not a member of management) of the committees of the Board of Directors.  Executive sessions of the independent directors of the Board of Directors also are held at least once per fiscal year.

Communications with Directors

Our Board of Directors has established a process to receive communications from stockholders and other interested parties.  Stockholders and other interested parties may contact any member or all members of the Board of Directors by mail.  To communicate with our Board of Directors, any individual director or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual director or group or committee of directors by either name or title.  The correspondence should be sent to Hilltop Holdings Inc., c/o Secretary, 200 Crescent Court, Suite 1330, Dallas, Texas 75201.

All communications received as set forth in the preceding paragraph will be opened by the office of our General Counsel for the sole purpose of determining whether the contents represent a message to our directors.  Any contents that are not in the nature of advertising, promotions of a product or service or patently offensive material will be forwarded promptly to the addressee(s).  In the case of communications to the Board of Directors or any group or committee of directors, the General Counsel’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to whom the communication is addressed.  If the amount of correspondence received through the foregoing process becomes excessive, our Board of Directors may consider approving a process for review, organization and screening of the correspondence by the corporate Secretary or other appropriate person.

Code of Business Conduct and Ethics

We have adopted a Senior Officer Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer.  We also have adopted a Code of Business Conduct and Ethics applicable to all officers, directors and employees.  Both codes are available on our website at www.hilltop-holdings.com under the heading “Corporate Information—Governance Documents.” Copies also may be obtained upon request by writing our Corporate Secretary at the address listed under “Questions” on page 54.  Amendments to, and waivers from, our Senior Officer Code of Ethics and our Code of Business Conduct and Ethics will be disclosed at the same website address provided above and in such filings as may be required pursuant to applicable law or listing standards.

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Director Nomination Procedures

The Nominating and Corporate Governance Committee believes that, at a minimum, candidates for membership on the Board of Directors should have a demonstrated ability to make a meaningful contribution to the Board of Directors’ oversight of our business and affairs and have a record and reputation for honest and ethical conduct.  The Nominating and Corporate Governance Committee recommends director nominees to the Board of Directors based on, among other things, its evaluation of a candidate’s experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries, understanding of our business environment and a willingness to devote adequate time and effort to board responsibilities.  In making its recommendations to the Board of Directors, the Nominating and Corporate Governance Committee also seeks to have the Board of Directors nominate candidates who have diverse backgrounds and areas of expertise so that each member can offer a unique and valuable perspective.

The Nominating and Corporate Governance Committee expects, in the future, to identify potential nominees by asking current directors and executive officers to notify the committee if they become aware of persons who meet the criteria described above.  The Nominating and Corporate Governance Committee also, from time to time, may engage firms, at our expense, that specialize in identifying director candidates.  As described below, the Nominating and Corporate Governance Committee also will consider candidates recommended by stockholders.

Once a person has been identified by the Nominating and Corporate Governance Committee as a potential candidate, the committee expects to collect and review publicly available information regarding the person to assess whether the person should be considered further.  If the Nominating and Corporate Governance Committee determines that the candidate warrants further consideration, and if the person expresses a willingness to be considered and to serve on the Board of Directors, the Nominating and Corporate Governance Committee expects to request information from the candidate, review the person’s accomplishments and qualifications, including in light of any other candidates that the committee might be considering, and conduct one or more interviews with the candidate.  In certain instances, members of the Nominating and Corporate Governance Committee may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have greater first-hand knowledge of the candidate’s accomplishments.

In addition to formally nominating individuals for election as directors in accordance with our Second Amended and Restated Bylaws, as summarized below on page 53 under “Stockholder Proposals for 2014,” stockholders may send written recommendations of potential director candidates to the Nominating and Corporate Governance Committee for its consideration.  Such recommendations should be submitted to the Nominating and Corporate Governance Committee “c/o Secretary” at Hilltop Holdings Inc., 200 Crescent Court, Suite 1330, Dallas, Texas 75201.  Director recommendations submitted by stockholders should include the following information regarding the stockholder making the recommendation and the individual(s) recommended for nomination:

·                  name, age, business address and residence address;

·                  the class, series and number of any shares of Hilltop stock or other securities of Hilltop or any affiliate of Hilltop owned, beneficially or of record (including the name of the nominee holder if beneficially owned);

·                  the date(s) that shares of Hilltop stock or other securities of Hilltop or any affiliate of Hilltop were acquired and the investment intent of such acquisition;

·                  any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any securities of Hilltop or any affiliate of Hilltop;

·                  whether and the extent to which such person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the prior six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (a) manage risk or benefit of changes in the price of Hilltop securities or any security of any entity listed in the peer group in the stock performance graph included in the materials distributed with this Proxy Statement or (b) increase or decrease the voting power of such person in Hilltop disproportionately to such person’s economic interest in Hilltop securities (or, as

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applicable, any security of any entity listed in the peer group in the stock performance graph included in the materials distributed with this Proxy Statement);

·                  any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with us), by security holdings or otherwise of such person in us or in any of our affiliates, other than an interest arising from the ownership of securities where such person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

·                  the investment strategy or objective, if any, of the stockholder making the recommendation and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors, or potential investors, in such stockholder (if not an individual);

·                  to the extent known by the stockholder making the recommendation, the name and address of any other stockholder supporting the nominee for election or reelection as a director;

·                  a certificate executed by the proposed nominee that certifies that the proposed nominee is not, and will not, become a party to, any agreement, arrangement or understanding with any person or entity other than us in connection with service or action as a director that has not been disclosed to us and that the proposed nominee consents to being named in a proxy statement and will serve as a director if elected;

·                  completed proposed nominee questionnaire (which will be provided upon request by writing or telephoning our Corporate Secretary at the address or phone number listed under “Questions” on page 54); and

·                  all other information that would be required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 and the rules promulgated thereunder.

The stockholder recommendation and information described above must be delivered to the Corporate Secretary not earlier than the 120th day and not later than 5:00 p.m., Dallas, Texas time, on the 90th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than thirty days prior to, or delayed by more than thirty days after, the first anniversary of the date of the preceding year’s annual meeting, the stockholder recommendation and information must be delivered not earlier than the 120th day prior to the date of such annual meeting and not later than 5:00 p.m., Dallas, Texas time, on the later of the 90th day prior to the date of such annual meeting of stockholders and the 10th day following the date on which public announcement of the date of such annual meeting is first made.  In the event, however, the number of directors to be elected to the Board of Directors is increased and there is no public announcement of such action at least 100 days prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting, a stockholder recommendation also will be considered timely, but only with respect to nominees for any new positions created by the increase, if it is delivered to the Corporate Secretary not later than 5:00 p.m., Dallas, Texas time, on the tenth day following the day on which the public announcement is first made.

The Nominating and Corporate Governance Committee expects to use a similar process to evaluate candidates to the Board of Directors recommended by stockholders as the one it uses to evaluate candidates otherwise identified by the committee.

Pursuant to an action of the Board of Directors at a meeting held March 8, 2012, the mandatory retirement age for directors was waived with regard to the service of Messrs. Cummings, Hay and Robinson.

No fee was paid to any third party or parties to identify or evaluate, or assist in identifying or evaluating, potential nominees.

The Nominating and Corporate Governance Committee did not receive the name of any recommended director nominee from a stockholder.

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STOCK OWNERSHIP

Principal Stockholders

The following table sets forth information regarding our common stock beneficially owned on April 9, 2013 by any person or “group,” as that term is used in Section 13(d)(3) of Securities Exchange Act of 1934, known to us to beneficially own more than five percent of the outstanding shares of our common stock.

(a)         Based on 83,487,340 shares of common stock outstanding on April 9, 2013.  Shares issuable under instruments to purchase our common stock that are exercisable within 60 days of April 9, 2013 are treated as if outstanding for computing the percentage ownership of the person holding these instruments, but are not treated as outstanding for purposes of computing the percentage ownership of any other person.

(b)         The shares of common stock beneficially owned by Mr. Ford include 15,044,616 shares owned by Diamond A Financial, LP.  Mr. Ford is the sole general partner of Diamond A Financial, LP.  Mr. Ford has sole voting and dispositive power of these shares.

(c)          Based upon Schedule 13G/A (Amendment No. 1) filed on February 11, 2013. Burgundy Asset Management Ltd. has sole voting and dispositive power of these shares.  Clients for whom Burgundy Asset Management Ltd. acts as investment adviser may withdraw dividends or proceeds from the sale securities from the accounts managed by Burgundy Asset Management Ltd.  No one client of Burgundy Asset Management Ltd. has an interest in the common stock of Hilltop in excess of five percent of the total outstanding shares.

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Security Ownership of Management

The following table sets forth information regarding the number of shares of our common stock beneficially owned on April 9, 2013, by:

·                  each of our directors;

·                  each of our named executive officers; and

·                  all of our directors and executive officers presently serving, as a group.

Except as otherwise set forth below, the address of each of the persons listed below is c/o Hilltop Holdings Inc., 200 Crescent Court, Suite 1330, Dallas, Texas 75201.  Except as otherwise indicated in the footnotes to this table, the persons named in the table have specified that they have sole voting and investment power with respect to all shares of stock shown as beneficially owned by them, subject to any applicable community property law.

*      Represents less than 1% of the outstanding shares of such class.

(a)         Based on 83,487,340 shares of common stock outstanding on April 9, 2013.  Shares issuable under instruments to purchase our common stock that are exercisable within 60 days of April 9, 2013, are treated as if outstanding for computing the percentage ownership of the person holding these instruments, but are not treated as outstanding for purposes of computing the percentage ownership of any other person.

(b)         Includes 62,100 shares of common stock held in an IRA account for the benefit of Mr. Bobbitt.

(c)          Includes 25,776 shares of common stock held directly by Mr. Feinberg’s wife.  Also includes 776 shares of common stock held by the Max McDermott Trust for the benefit of Mr. Feinberg’s stepson.  Mr. Feinberg’s wife is the trustee of the trust.

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(d)         The shares of common stock beneficially owned by Mr. Ford include 15,044,616 shares owned by Diamond A Financial, LP.  Mr. Ford is the sole general partner of Diamond A Financial, LP.  Mr. Ford has sole voting and dispositive power of these shares.

(e)          Jeremy Ford is a beneficiary of a trust that owns a 49% limited partnership interest in Diamond A Financial, LP (see footnote (d)).  Includes 200,000 shares of common stock acquirable pursuant to the exercise of a stock option.  Excludes 300,000 shares of common stock acquirable pursuant to the exercise of a stock option that will not vest within 60 days of April 9, 2013.

(f)           Includes 10,000 shares of common stock held in a SEP IRA account for the benefit of Mr. Hill and 15,750 shares of common stock held by the William T. Hill P.C. retirement account for the benefit of Mr. Hill.

(g)          Includes 7,078 shares of common stock allocated to an account pursuant to the Plains Capital Corporation Employee Stock Ownership Plan (the “ESOP”) for the benefit of Mr. Huffines.  Each ESOP participant has the right to direct the ESOP trustees how to vote the shares allocated to his account and may therefore be deemed to beneficially own such shares.  Also includes 47,000 shares of common stock held by the James Huffines 1994 Trust for the benefit of Mr. Huffines.

(h)         Includes 603,417 shares of common stock held by Lee Lewis Construction.  Mr. Lewis is the sole owner of Lee Lewis Construction and may be deemed to have voting and/or investment power with respect to the shares owned by Lee Lewis Construction.

(i)             Includes 11,000 shares of common stock held in an IRA account for the benefit of Mr. Nichols.

(j)            Includes 1,699 shares of common stock allocated to an account pursuant to the ESOP for the benefit of Mr. Salmans.  Each ESOP participant has the right to direct the ESOP trustees how to vote the shares allocated to his account and may therefore be deemed to beneficially own such shares.

(k)         Includes 9,787 shares of common stock held directly by Mr. White’s wife; 23,806 shares of common stock held by Double E Investments (“Double E”); 12,883 shares of common stock held by EAW White Family Partnership, Ltd. (“EAW”); 8,045 shares of common stock held by Maedgen, White and Maedgen (“MW&M”); 1,853,958 shares of common stock held by Maedgen & White, Ltd.; and 36,300 shares of common stock allocated to an account pursuant to the ESOP for the benefit of Mr. White. Each ESOP participant has the right to direct the ESOP trustees how to vote the shares allocated to his account and may therefore be deemed to beneficially own such shares.  As the manager of Double E, the managing partner of MW&M and the sole member of the general partner of EAW, Mr. White has exclusive authority to vote and/or dispose of the securities held by Double E, MW&M and EAW, respectively, and may, therefore, be deemed to have sole voting and dispositive power over the shares of common stock held by Double E, MW&M and EAW.  Mr. White is the sole general partner of Maedgen & White, Ltd. and may be deemed to beneficially own the shares held by Maedgen & White, Ltd. As the sole general partner of Maedgen & White, Ltd., Mr. White has the power to vote the shares held by Maedgen & White, Ltd. The Agreement of Limited Partnership of Maedgen & White, Ltd. requires the approval of 80% of the limited partnership interests in Maedgen & White, Ltd. before its general partner may dispose of the shares held by Maedgen & White, Ltd. Mr. White, directly and indirectly, controls approximately 77% of the limited partnership interests of Maedgen & White, Ltd. and therefore may be deemed to share dispositive power over the shares held by Maedgen & White, Ltd.

(l)             Represents 26 persons and includes 240,000 shares of common stock acquirable pursuant to the exercise of stock options.  Excludes 360,000 shares of common stock acquirable by our executive officers pursuant to the exercise of stock options that will not vest within 60 days of April 9, 2013.

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MANAGEMENT

Executive Officers

General

We have identified the following officers as “executive officers,” consistent with the definition of that term as used by the SEC:

Business Experience of Executive Officers

Information concerning the business experience of Messrs. Hill A. Feinberg, Jeremy B. Ford, James R. Huffines and Mr. Alan B. White is set forth above under “Proposal One — Election of Directors — Nominees for Election as Directors” on page 6.

John A. Martin.  Mr. Martin has served as the Executive Vice President and Chief Financial Officer of PlainsCapital since November 2010 and has continued in that position since our acquisition of PlainsCapital in November 2012. Mr. Martin also serves on the board of directors of the Bank, PrimeLending, First Southwest and various other subsidiaries of PlainsCapital. Prior to joining PlainsCapital, Mr. Martin most recently served as executive vice president and chief financial officer of Family Bancorp, Inc. and its subsidiary, San Antonio National Bank, from April 2010 until October 2010. Before joining Family Bancorp, from 2009 to 2010, Mr. Martin served as a consultant to community banks, providing strategic planning services. Beginning in 2005, Mr. Martin served as chief financial officer of Texas Regional Bancshares, Inc. and later served as director of financial planning and analysis for BBVA Compass after its acquisition of Texas Regional Bancshares in 2006.

Darren Parmenter.  Mr. Parmenter has served as Senior Vice President of Finance of Hilltop since June 2007.  In March 2012, Mr. Parmenter also was appointed Chief Operating Officer of NLASCO, Inc.  From January 2000 to June 2007, Mr. Parmenter was with Hilltop’s predecessor, Affordable Residential Communities Inc., and served as the Controller of Operations from April 2002 to June 2007.  Prior to 2000, Mr. Parmenter was employed by Albertsons Inc., as an Assistant Controller.

Corey G. Prestidge.  Mr. Prestidge has served as General Counsel and Secretary of Hilltop since January 2008.  From November 2005 to January 2008, Mr. Prestidge was the Assistant General Counsel of Mark Cuban Companies.  Prior to that, Mr. Prestidge was an associate in the corporate and securities practice group at Jenkens & Gilchrist, a Professional Corporation, which is a former national law firm. Mr. Prestidge is the son-in-law of our Chairman of the Board, Gerald J. Ford, and the brother-in-law of our President and Chief Executive Officer, Jeremy B. Ford.

Todd L. Salmans.  Mr. Salmans has served as President and Chief Executive Officer of PrimeLending since January 2011 and has continued in that position since our acquisition of PlainsCapital in November 2012. As President and Chief Executive Officer, Mr. Salmans is responsible for the strategic direction and day-to-day management of PrimeLending, including financial performance, compliance, business development, board and strategic partner communications and team development. He also serves as a member of PrimeLending’s Board of

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Directors. Mr. Salmans joined PrimeLending in 2006 as Executive Vice President and Chief Operating Officer, with responsibility over daily operations, loan processing and sales. He was promoted to President in April 2007. Mr. Salmans has over 30 year of experience in the mortgage banking industry. Prior to joining PrimeLending, he served as regional executive vice president of CTX/Centex, regional senior vice president of Chase Manhattan/Chase Home Mortgage Corp., and regional senior vice president of First Union National Bank/First Union Mortgage Corp. Mr. Salmans is currently a board member of the Texas Mortgage Bankers Association.

Jerry L. Schaffner.  Mr. Schaffner has served as the President and Chief Executive Officer of the Bank since November 2010 and has continued in that position since our acquisition of PlainsCapital in November 2012. He currently serves as a director of the Bank, PrimeLending, First Southwest and various other subsidiaries, and previously served as a director of PlainsCapital from 1993 until March 2009. Mr. Schaffner has over 25 years of banking experience and joined PlainsCapital in 1988 as part of its original management group. He received his Bachelor of Business Administration in finance from Texas Tech University. Mr. Schaffner is a licensed Texas real estate broker.

Terms of Office and Relationships

Our executive officers are elected annually or, as necessary, to fill vacancies or newly created offices by our Board of Directors.  Each executive officer holds office until his successor is duly elected or qualifies or, if earlier, until his retirement, death, resignation or removal.  Any officer or agent elected or appointed by our Board of Directors may be removed by our Board of Directors whenever, in its judgment, our best interests will be served, but any removal will be without prejudice to the contractual rights, if any, of the person so removed.

Except as disclosed elsewhere in this Proxy Statement, there are no familial relationships among any of our current directors or executive officers.  Except as described under “Proposal One — Election of Directors — Nominees for Election as Directors” commencing on page 6, none of our director nominees hold directorships in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or pursuant to Section 15(d) of the Securities Exchange Act of 1934 or any company registered as an investment company under the Investment Company Act of 1940.

Except as set forth in this Proxy Statement, there are no arrangements or understandings between any nominee for election as a director or officer and any other person pursuant to which that director was nominated or that officer was selected.

Compensation Discussion and Analysis

Introduction and Executive Summary

For 2012 and prior years, the compensation program at Hilltop consisted of base salary and a discretionary cash bonus awarded by the Compensation Committee following the review of the achievements and audited financial statements for that fiscal year.  Executive officers also were granted long-term incentive compensation in the form of stock options from time to time by the Compensation Committee.  NLASCO, Inc., Hilltop’s insurance holding company subsidiary, however, utilized pre-determined performance criteria for compensation in addition to base salary.

On May 9, 2012, Hilltop announced the entry into a definitive agreement to acquire PlainsCapital Corporation.  That acquisition was consummated on November 30, 2012, and the primary lines of business of Hilltop going forward will be materially different.  As described in our proxy statements in previous years, the Compensation Committee envisioned adopting a more comprehensive compensation program upon a substantial acquisition.  The Compensation Committee, accordingly, has determined to implement a compensation program for fiscal 2013 that is consistent with a corporation with material operations and furthers our pay-for-performance philosophy.

Given the significant changes in the compensation program going forward, in the paragraphs that follow, in addition to discussing the compensation of our named executive officers during 2012, we will discuss the overall objectives of our compensation program for fiscal 2013 and how it is designed to reward participants over the life of the program. We also will address each element of compensation and explain the reasons for the compensation decisions we have made regarding the following individuals, whom we refer to as our “named executive officers”:

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·                  Jeremy B. Ford — President and Chief Executive Officer and a director;

·                  Darren Parmenter — Senior Vice President of Finance (principal financial officer);

·                  Alan B. White — Chief Executive Officer of PlainsCapital Corporation and Vice-Chairman of the Board of Directors;

·                  Todd Salmans — President and Chief Executive Officer of PrimeLending; and

·                  Hill A. Feinberg — Chief Executive Officer of First Southwest and a director.

Following this discussion, we provide specific information about compensation earned or awarded to our named executive officers for 2012.

We made the following key compensation decisions with respect to our named executive officers, which build upon our compensation governance framework and our overall pay-for-performance philosophy:

·                  Base Salary. In March 2013, the Compensation Committee determined to increase the salaries of Mr. Ford by 20% and Mr. Parmenter by 3% in light of their increased responsibilities following the acquisition of PlainsCapital. The Compensation Committee determined to keep the base salaries of our other named executive officers consistent with the salaries they received from PlainsCapital before the acquisition.

·                  Adoption of the Hilltop Holdings Inc. 2012 Equity Incentive Plan. The Board of Directors adopted, and the stockholders approved, the Hilltop Holdings Inc. 2012 Equity Incentive Plan, or the 2012 Equity Incentive Plan. We believe the 2012 Equity Incentive Plan will help focus directors, officers and other employees and consultants on business performance that creates stockholder value, encourage innovative approaches to our business, encourage ownership of our common stock by directors, officers and other employees and consultants and continue to attract and retain employees in a competitive labor market, which is essential to our long-term growth and success.

·                  Long-Term Incentive Compensation.  The Compensation Committee has under consideration the grant of long-term incentive awards under the 2012 Equity Incentive Plan in the form of restricted stock to named executive officers and other key employees.  These awards will be designed to align the interests of our named executive officers and key employees with those of our stockholders.

·                  Adoption of the Hilltop Holdings Inc. 2012 Annual Incentive Plan. The Board of Directors adopted, and the stockholders approved, the Hilltop Holdings Inc. 2012 Annual Incentive Plan, or the Annual Incentive Plan.  The purposes of the Annual Incentive Plan are to reward executives whose performance during the fiscal year enabled us to achieve favorable business results and to assist us in attracting and retaining executives. The Annual Incentive Plan is designed to allow the Compensation Committee to grant awards that focus the executive’s efforts on the achievement of specific goals in support of the Company’s business strategy.

·                  Bonus Opportunity. Following a performance review of Messrs. Ford and Parmenter, including their leadership through the completion of the acquisition of PlainsCapital, the Compensation Committee awarded them discretionary cash bonuses in the amounts of $300,000 and $100,000, respectively. The Compensation Committee also awarded bonuses to our named executive officers that are employed by PlainsCapital and its subsidiaries based upon PlainsCapital, PlainsCapital Bank and PrimeLending producing their highest recorded earnings in any given year and exceeding their budgets in 2012.  In March 2013, the Compensation Committee set target bonus opportunities for each of our named executive officers under the Annual Incentive Plan, which are designed to motivate and reward performance.

·                  Engagement of a Compensation Consultant. In January 2013, the Compensation Committee engaged an independent compensation consultant that does not provide any services to management and that has no prior relationship with management prior to the engagement.

·                  Incentive Award Claw-back Program. The Compensation Committee implemented a claw-back program in April 2013 for any annual incentive awards for improper risk and significant compliance issues.

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The following discussion summarizes in more detail our executive compensation program, objectives and philosophy, the processes and sources of input that are considered in determining compensation for our named executive officers and an analysis of the compensation earned by our named executive officers in 2012.

Philosophy and Objectives of Our Executive Compensation Program for 2013

Our compensation program for 2013 includes the following components: base salary, annual and long-term incentive awards that are linked to performance and the creation of stockholder value and perquisites.  The named executive officers who are employed by PlainsCapital or its subsidiaries currently have certain contractual post-termination benefits; however, other than Mr. White, those benefits will expire two years from November 30, 2012.  The 2013 program also includes a claw-back from any annual cash incentive award for improper risk and significant compliance issues.  In structuring our compensation programs for 2013, the Compensation Committee selected the particular components and the weight given to those components, based upon our strategic objectives.  We believe that it is critical to structure the compensation program in such a manner to retain those with the talent, skill and experience necessary for us to realize our strategic objectives.

With this in mind, the following principles help guide our decisions regarding compensation of our named executive officers:

·                  Compensation opportunities should be competitive with market practices.  In order to attract and retain executives with the experience and skills necessary to lead our company and motivate them to deliver strong performance to our stockholders, we are committed to providing total annual compensation opportunities that are competitive.

·                  A significant portion of compensation should be performance-based.  Our executive compensation program emphasizes pay for performance.  This means that compensation based on corporate performance, as assessed under the criteria established pursuant to the Annual Incentive Plan, has the possibility to represent a significant portion of the named executive officer’s total compensation. An additional component, which has the ability to reduce annual incentive compensation, is based upon improper risk taking and non-compliance with applicable laws and regulations.

·                  Management’s interests should be aligned with those of our stockholders.  Our long-term incentive compensation is being delivered in the form of restricted stock, the value of which is ultimately dependent upon the performance of our stock price.  Although we have no mandatory requirement of stock ownership by our employees, including our named executive officers, stock ownership is encouraged.

·                  Compensation should be perceived as fair and equitable.  We strive to create a compensation program that will be perceived as fair and equitable, both internally and externally.

How We Determine and Assess Executive Compensation Generally

PlainsCapital Acquisition

We completed the acquisition of PlainsCapital on November 30, 2012, and the compensation of our named executive officers who were employed by PlainsCapital is therefore largely based upon the compensation they were paid by PlainsCapital prior to the acquisition.  Three of our named executive officers, Messrs. White, Salmans and Feinberg, were employed by PlainsCapital prior to the acquisition and each had an employment agreement with PlainsCapital.  Although we entered into a retention agreement with Mr. White, which replaced his employment agreement, and amendments to the employment agreements with Messrs. Salmans and Feinberg, which, among other things, removed the guaranteed minimum bonus for Mr. Feinberg, each of these persons is entitled to the same base salary as he was paid prior to the acquisition.  Mr. White’s retention agreement further entitles him to a guaranteed minimum bonus. Mr. White’s retention agreement has an initial term expiring on November 30, 2015 and renews automatically for an additional year on each anniversary beginning with the second anniversary of acquisition, and each of Messrs. Salmans’ and Feinberg’s employment agreements expires on November 30, 2014 and does not automatically renew.

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Role of the Compensation Committee

The Compensation Committee of our Board of Directors is responsible for reviewing and approving all aspects of the compensation programs for our named executive officers and making all decisions regarding specific compensation to be paid or awarded to them.  The Compensation Committee is responsible for, among its other duties, the following:

·                  Review and approval of corporate incentive goals and objectives relevant to compensation;

·                  Evaluation of individual performance results in light of these goals and objectives;

·                  Evaluation of the competitiveness of the total compensation package; and

·                  Approval of any changes to the total compensation package, including, but not limited to, base salary, annual and long-term incentive award opportunities and payouts and retention programs.

The Compensation Committee is responsible for determining all aspects of compensation of the Chief Executive Officers of Hilltop and PlainsCapital, as well as assessing their individual performance.

In setting the compensation of our named executive officers, the Compensation Committee, in its discretion, considers (i) the transferability of managerial skills, (ii) the relevance of each named executive officer’s experience to other potential employees, and (iii) the readiness of the named executive officer to assume a different or more significant role, either within our organization or with another organization.  When making pay-related decisions, the Compensation Committee also has considered our specific circumstances and the associated difficulties with attraction, retention and motivation of talent and the importance of compensation in supporting achievement of our strategic objectives.

Information about the Compensation Committee and its composition, responsibilities and operations can be found under “Board Committees” beginning on page 14 of this Proxy Statement and in the “Corporate Information-Committee Charting” section of our website.

Role of the Chief Executive Officers in Compensation Decisions

The Chief Executive Officers of Hilltop and PlainsCapital recommend to the Compensation Committee any compensation changes affecting the other named executive officers.  Within the framework of the compensation programs approved by the Compensation Committee and based on management’s review of market competitive positions, each year the Chief Executive Officers will recommend the level of base salary increase, if any, review and recommend the specific individual performance objectives, and whether the officer has achieved performance objectives, in the annual incentive program and recommend the long-term incentive grant value, if any, for the other named executive officers.  Their recommendations will be based upon their assessment of the individual officer’s performance, performance of the officer’s respective business or function and employee retention considerations.  The Compensation Committee reviews and considers the Chief Executive Officers’ recommendations when determining any compensation changes affecting our officers or executives.  Each Chief Executive Officer does not play any role with respect to any matter impacting his own compensation.

Role of Stockholder Say-on-Pay Votes

The Company provides its stockholders with the opportunity to cast an annual advisory vote on executive compensation.  At the Company’s annual meeting of stockholders held in June 2012, 94% of the votes cast (excluding abstentions and broker non-votes) on the say-on-pay proposal at that meeting were voted in favor of the proposal.  The Compensation Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation, and did not change its approach in 2012.  The compensation program for fiscal 2013 is included this Compensation, Discussion & Analysis in order to assist stockholders in evaluating the material changes to the program going forward.  Accordingly, the Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.  A vote on the frequency of advisory votes on executive compensation will be submitted to stockholders at the 2014 annual meeting of stockholders.

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Role of Compensation Consultant

Pursuant to its charter, the Compensation Committee is authorized to retain and terminate any consultant, as well as to approve the consultant’s fees and other terms of the engagement. The Compensation Committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other advisors. In January 2013, the Compensation Committee engaged Pearl Meyer & Partners, or Pearl Meyer, as its compensation consultant. The Compensation Committee has not engaged any other advisors and did not engage a compensation consultant for any of the previous five years.

Pearl Meyer provides research, data analyses, survey information and design expertise in developing compensation programs for executives and incentive programs for eligible employees. In addition, Pearl Meyer keeps the Compensation Committee apprised of regulatory developments and market trends related to executive compensation practices. Pearl Meyer does not determine or recommend the exact amount or form of executive compensation for any of the named executive officers. A representative of Pearl Meyer generally attends meetings of the Compensation Committee, is available to participate in executive sessions and communicates directly with the Compensation Committee.

Prior to the retention of a compensation consultant or any other external advisor, and from time to time as the Compensation Committee deems appropriate, the Compensation Committee assesses the independence of such advisor from management, taking into consideration all factors relevant to such advisor’s independence, including the factors specified in the NYSE listing standards.

Pursuant to the Compensation Committee’s charter, if the Compensation Committee chooses to use a compensation consultant, the consultant must be independent. The Compensation Committee assessed Pearl Meyer’s independence, taking into account the following factors:

·                  compliance with the NYSE listing standards;

·                  the policies and procedures the consultant has in place to prevent conflicts of interest;

·                  any business or personal relationships between the consultant and the members of the Compensation Committee;

·                  any ownership of Company stock by the individuals at Pearl Meyer performing consulting services for the Compensation Committee; and

·                  any business or personal relationship of Pearl Meyer with an executive officer of the Company.

Pearl Meyer has provided the Compensation Committee with appropriate assurances and confirmation of its independent status pursuant to the charter and other factors. The Compensation Committee believes that Pearl Meyer has been independent throughout its service for the Committee and there is no conflict of interest between Pearl Meyer and the Compensation Committee.

Other Factors

The Compensation Committee makes executive compensation decisions following a review and discussion of both the financial and operational performance of our businesses and the annual performance reviews of the named executive officers and other members of the management team.

Elements of our Executive Compensation Program

Overall, our executive compensation program is designed to be consistent with the objectives and principles set forth above.  The basic elements of our executive compensation program are summarized below, followed by a more detailed discussion of those programs.

Our compensation policies and programs are considered by the Compensation Committee in a total rewards framework, considering both “pay”—base salary, annual incentive compensation and long-term incentive compensation; and “benefits”—benefits, perquisites and executive benefits and other compensation.  Our executive compensation program consists primarily of the following components:

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Base Salary

We provide base salaries for each named executive officer, commensurate with the services each provides to us, because we believe a portion of total direct compensation should be provided in a form that is fixed and liquid.  In determining the salary of Messrs. Ford and Parmenter, the Compensation Committee evaluated the salaries of other named executive officers of the Company and the level of responsibility assumed, among other items.  As a result of that analysis, the Compensation Committee determined to increase the annual salaries of Messrs. Ford and Parmenter in March 2013.  With respect to the other named executive officers of the Company for 2013, the Compensation Committee determined to maintain the current salary at the level they received as employees of PlainsCapital prior to the acquisition.  The following are the base salaries for the named executive officers in 2012 and 2013:

(a)         Mr. White’s salary is the base salary set forth in his retention agreement, which became effective upon the closing of the acquisition of PlainsCapital.

(b)         Messrs. Salmans’ and Feinberg’s salaries are the same as those in effect prior to the acquisition of PlainsCapital.

Annual Incentive Awards

Our named executive officers and other employees are eligible to receive annual cash incentive awards based upon our financial performance and other factors, including individual performance.  The Compensation Committee believes that this element of compensation is important to focus management efforts on, and provide rewards for, annual financial and strategic results that are aligned with creating value for our stockholders.  During 2012, we had a management incentive plan in effect for employees of NLASCO.  Annual cash incentive awards also are subject to claw back for improper risk management and non-compliance with applicable laws and regulations.  This component of the compensation program is pre-determined at the outset of the year and based upon measurable criteria.

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The Compensation Committee, in its sole discretion, determines the amount of each participant’s award based on attainment of the applicable performance goals and assessments of individual performance. For 2013, the applicable performance goals are among the following:

·                  Consolidated financial results for Hilltop for named executive officers employed directly by Hilltop Holdings Inc.;

·                  Consolidated financial results of PlainsCapital, after removing purchase accounting adjustments, for employees of PlainsCapital and its subsidiaries;

·                  Financial results of lines of business for business heads after removing any purchase accounting adjustments; and/or

·                  Pre-determined individual objectives.

An amount of up to 15% of any available annual cash incentive award remains subject to the discretion of the Compensation Committee.  Additionally, as previously mentioned, a claw back of 15% of any available annual cash incentive award will occur in the event that any improper risk management or non-compliance with applicable laws or regulations is identified.

The elements of the annual cash incentive award do not become available until net income equals 60% of the budgeted earnings for 2013 for the entity at which that named executive officer is employed.  In order to be eligible to receive the target cash annual incentive award, actual earnings must meet budgeted amounts.  Further, in the event actual earnings exceed budgeted amounts, up to 150% of the target amount of the annual incentive award becomes available.  Between the threshold and target amounts, a range of the potential annual cash incentive award is available; however, such amount becomes larger the closer actual earnings are to the budgeted earnings.  Proportionate increases in the available annual cash incentive award are made to the extent actual earnings exceed budgeted earnings, up to a maximum of 150% of the target annual cash incentive award.  We have chosen not to disclose the specific budgeted amount targets for 2013 because we believe such disclosure would result in serious competitive harm and would be detrimental to our operating performance. Our 2013 goals are intended to be realistic and reasonable but challenging in order to drive performance. The Compensation Committee and management believe that by using these metrics we are encouraging profitable top line growth and cash generation for stockholders. For 2013, the Compensation Committee set annual cash incentive compensation targets are at 333% of base salary for Mr. Feinberg and 120% of base salary for Mr. Salmans. The Compensation Committee has not yet set the annual cash incentive compensation targets for Messrs. Ford or Parmenter.  See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Annual Incentive Plan” for more information on possible future payments to the named executive officers.

Long-Term Incentive Awards

As described above, we believe that a portion of each named executive officer’s compensation should be tied to the performance of our company’s stock price, aligning the officer’s interest with that of our stockholders.  In this regard, our long-term incentive compensation is delivered in the form of restricted stock, the value of which is ultimately dependent upon the performance of our stock price.  Further discussion of the 2012 Equity Incentive Plan pursuant to which such shares of restricted stock are awarded is found after the “Grants of Plan-Based Awards” section below.

Although Mr. Ford has an award outstanding under the Hilltop Holdings Inc. 2003 Equity Incentive Plan, or the 2003 Equity Incentive Plan, with the adoption of the 2012 Equity Incentive Plan, all equity-based awards made to eligible employees, including the named executive officers, have since been made pursuant to the 2012 Equity Incentive Plan.  All equity-based awards made to the named executive officers are made by the Compensation Committee and not pursuant to delegated authority.

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Perquisites and Other Benefits

We provide a limited number of perquisites and other benefits to our named executive officers at Hilltop.  The only perquisite currently offered to the named executive officers employed directly by Hilltop is $150 per month to be applied to a gym membership to promote wellness.  With respect to named executive officers employed by PlainsCapital and its subsidiaries, those entities provide them with a monthly car allowance and reimbursement for country club membership dues.  In addition, Mr. White is provided access to company aircraft and bank-owned life insurance.  Otherwise, generally, our named executive officers receive only medical benefits, life insurance and long-term disability coverage, as well as supplemental contributions to the Company’s 401(k) program, on the same terms and conditions as available to all employees of that entity.

Severance and Other Post-Termination Compensation

Other than change in control provisions in our 2012 Equity Incentive Plan, we do not currently maintain any severance or change in control programs for named executive officers employed directly by Hilltop.  We, however, have historically paid severance, the amount of which is generally determined both by length of tenure and level of compensation, when termination occurs other than for cause and pursuant to which certain benefits may be provided to the named executive officers.  Absent the negotiation of specific agreements with the named executive officers, severance benefits would be provided on the same basis as provided to other employees of the Company.

In connection with acquisition of PlainsCapital, we entered into a retention agreement with Mr. White. Pursuant to that agreement, he is entitled to following:

(1)                                 $6,430,890, including interest thereon from November 30, 2012, in full satisfaction of Mr. White’s rights under Section 6 (Termination Upon Change in Control) of his previous employment agreement with PlainsCapital, dated January 1, 2009, payable in a cash lump-sum upon any termination of his employment;

(2)                                 upon termination of his employment by us other than for cause or death or disability, or after non-renewal, cash severance of (i) the sum of Mr. White’s annual base salary and the average of the annual bonus amounts paid to him for the three most recently completed fiscal years ending immediately prior to the date of termination, multiplied by (ii) the greater of (A) two, and (B) the number of full and partial years from the date of termination through the end of the applicable employment period under the retention agreement. Such severance is payable over the “severance period,” which is the greater of two years from the date of termination and the number of full and partial years from the date of termination through the end of the applicable employment period under the retention agreement.

The foregoing cash amounts in subparagraph (1) represent “modified single trigger” benefits, payable assuming the termination of employment for any reason, and the foregoing cash amounts in subparagraph (2) represent “double trigger” benefits, payable assuming a qualifying termination of employment. With respect to the amounts described in subparagraph (1) that are paid in full satisfaction of Section 6 of Mr. White’s previous employment agreement with PlainsCapital, such amounts are payable upon any termination of employment at any time, subject to any delay required by Section 409A of the Internal Revenue Code and the execution of a release of claims. The cash severance amounts described in subparagraph (2) are payable upon a termination of employment other than for cause, death or disability or a termination due to non-renewal by Hilltop, subject to any delay required by Section 409A of the Internal Revenue Code and the execution of a release of claims.

Pursuant to the employment agreements of Messrs. Salmans and Feinberg with PlainsCapital, each executive is entitled to cash severance based on three times the sum of (i) annual base salary, and (ii) the higher of the bonus paid for the most recently completed calendar year and the average bonus paid with respect to the three most recently completed calendar years ending immediately prior to the date of termination. The foregoing cash amounts represent “double trigger” benefits, which are payable upon a termination of the applicable executive’s employment by us without cause or by the executive for good reason during the six (6) months prior to, or the twenty-four (24) months following, the effective time of the acquisition of PlainsCapital, which constituted a change in control, subject to the execution of a release of claims.

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Further discussion of the employment agreements with Messrs. White, Salmans and Feinberg and payments made pursuant thereto may be found under the headings “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table” and “Potential Payments Upon Termination or Change-in-Control” below.

The 2012 Equity Incentive Plan, pursuant to which we anticipate granting awards to the named executive officers, contains specific termination and change in control provisions.  We determined to include a change in control provision in the plan to be competitive with what we believe to be the standards for the treatment of equity upon a change in control for similar companies and so that employees who remain after a change in control would be treated the same with regard to equity as the general stockholders who could sell or otherwise transfer their equity upon a change in control.  Under the terms of the plan, if a change in control (as defined below in the discussion of the plan) were to occur, all awards then outstanding would become vested and/or exercisable and any applicable performance goals with respect thereto would be deemed to be fully achieved.  Further discussion of the change in control payments made pursuant to the 2012 Equity Incentive Plan may be found in the “Potential Payments Upon Termination or Change-in-Control” section below.

The Annual Incentive Plan, pursuant to which annual incentive bonuses are awarded, does not contain specific change in control provisions.  Accordingly, the Compensation Committee, in its discretion, may determine what constitutes a change in control and what effects such an event may have any awards made pursuant to such plan.

2012 Hilltop Performance

Significant achievements in 2012 include the following, which are discussed in more detail in our Annual Report on Form 10-K for the year ended December 31, 2012:

·                  Total assets grew to $7.3 billion at December 31, 2012, compared to $0.9 billion at December 31, 2011;

·                  Total stockholders’ equity increased 75% in 2012 to $1.1 billion at December 31, 2012;

·                  Closing stock price increased from $7.96 on May 8, 2012, the day prior to the announcement to acquire PlainsCapital, to $13.54 at December 31, 2012;

·                  Hilltop was well capitalized at December 31, 2012, with a Tier 1 Leverage Ratio(a) of 13.08% and Total Capital Ratio of 17.81%; and

·                  Hilltop maintains over $200 million of freely usable cash.

2012 Bonus Awards

The Compensation Committee conducted a performance review of each named executive officer employed directly by Hilltop.  During 2012, the named executive officers of Hilltop completed the acquisition of PlainsCapital.  In addition to those activities, the Compensation Committee also evaluated the contributions by the named executive officers of Hilltop to other areas of the Company.  Based upon those evaluations, together with operations of the Company, it determined the discretionary bonuses for 2012 as follows for Hilltop named executive officers.

The Compensation Committee also conducted a performance review of each named executive officer employed by PlainsCapital and its subsidiaries.  The financial results of PlainsCapital, PlainsCapital Bank and PrimeLending

(a) Based on the end of period Tier 1 capital divided by total average assets for the month of December 2012 excluding goodwill and intangible assets.

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produced their highest recorded earnings in any given year and well exceeded budget.  In addition to those activities, the Compensation Committee also evaluated the contributions by the named executive officers to other areas.  Based upon those evaluations, together with financial results of PlainsCapital and its subsidiaries, it approved bonuses in the following amounts to the named executive officers employed by PlainsCapital and its subsidiaries:

(a)         Determined pursuant to Mr. White’s retention agreement for the achievement of earnings threshold.

Risk Considerations in Our Compensation Program

We do not believe that our compensation policies and practices for 2012 give rise to risks that are reasonably likely to have a material adverse effect on our Company.  In reaching this conclusion for 2012, we considered the following factors:

·                  Base salary is fixed and the only compensation components that are variable are the annual bonuses and restricted stock awards to named executive officers, which, other than the annual bonus with respect to Mr. White, were awarded in the complete discretion of the Compensation Committee.  Mr. White’s annual bonus was based upon attainment of a pre-determined level of earnings.

·                  Annual bonuses were determined or approved following the completion, or substantial completion, of the audit of the Company’s financial statements by the Company’s independent registered public accounting firm.  Thus, the Compensation Committee had ample knowledge of the financial condition and results of the Company, as well as reports of other committees of the Board of Directors, upon which to base any decisions.

·                  Because the annual bonus to named executive officers of Hilltop is purely discretionary and not linked to any performance criteria, the employee has no basis on which to take risks to meet certain pre-determined performance criteria.

·                  The Annual Incentive Plan awards are subject to claw-back for improper risk and significant compliance issues.

Trading Controls and Hedging, Short Sale and Pledging Policies

Executive officers, including the named executive officers, are required to receive the permission of the General Counsel prior to entering into any transactions in our securities, including gifts, grants and those involving derivatives. Generally, trading is permitted only during announced trading periods.  Employees who are subject to trading restrictions, including the named executive officers, may enter into a trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934. These trading plans may be entered into only during an open trading period and must be approved by the General Counsel. We require trading plans to include a waiting period and the trading plans may not be amended during their term. The named executive officer bears full responsibility if he or she violates our policy by permitting shares to be bought or sold without pre-approval or when trading is restricted.

Executive officers are prohibited from entering into hedging and short sale transactions and are subject to restrictions on pledging our securities.

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Compensation Committee Report

The Compensation Committee of the Board of Directors of Hilltop Holdings Inc. has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement.  Based on its review, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement.

The foregoing report has been submitted by the following members of the Compensation Committee:

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Executive Compensation

The following tables set forth information concerning the compensation earned for services performed during 2012, 2011 and 2010 by the named executive officers, who were either serving in such capacities on December 31, 2012, or during 2012, or are reportable pursuant to applicable SEC regulations.

Summary Compensation Table

Fiscal Years 2012, 2011 and 2010