• The SQL syntax is checked for any errors.
• The best plan is selected to execute the SQL (choice to use clustered index, non-clustered etc.).
• Finally the SQL is executed.
As in one of the article Mr. Shivprasad koirala says that Stored Procedures Do Not increase performance. Performance of inline parameterized SQL is the same as that of Stored Procedures. They had also proved why Stored procedure to be used.