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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
| Filed by the Registrant | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
Preliminary Proxy Statement | ||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
Definitive Proxy Statement | ||
o | Definitive Additional Materials | |
o | Soliciting Material under §240.14a-12 | |
LEAF GROUP LTD.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | |||||
No fee required. | |||||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
| (1) | Title of each class of securities to which transaction applies: | ||||
| (2) | Aggregate number of securities to which transaction applies: | ||||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
| (4) | Proposed maximum aggregate value of transaction: | ||||
| (5) | Total fee paid: | ||||
| o | Fee paid previously with preliminary materials. | ||||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
(1) | Amount Previously Paid: | ||||
| (2) | Form, Schedule or Registration Statement No.: | ||||
| (3) | Filing Party: | ||||
| (4) | Date Filed: | ||||
April 28, 2016
Dear Stockholder:
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, MAY 18, 2020
To the Stockholders of Leaf Group Ltd.:
We will hold the 2020 annual meeting of stockholders (the “annual meeting”) of Leaf Group Ltd. (“Leaf Group,” “we,” “us” or “our”) on Monday, May 18, 2020, at 9:00 a.m. Pacific Time. In light of public health concerns regarding COVID-19, the annual meeting will be conducted online only, via live interactive audio webcast. You are invitedwill be able to attend the meeting online and submit questions before and during the meeting by visiting www.virtualshareholdermeeting.com/LEAF2020. Details about how to attend the annual meeting of stockholders of Demand Media, Inc. ("Demand Media," "we," "us" or "our")online and how to be held on Thursday, June 16, 2016, at 2:00 p.m. Pacific Daylight Time, at our corporate headquarters located at 1655 26th Street, Santa Monica, California 90404.
Details regarding admission to the meetingsubmit questions and the business to be conductedcast your votes are described in the Notice of Internet Availability of Proxy Materials you received in the mailprovided under “Information Concerning Voting and in the accompanying proxy statement. We have also made available a copy of our 2015 Annual Report to stockholders with this proxy statement. We encourage you to read our Annual Report. It includes our audited financial statements and provides information about our business.
In addition to the business to be transacted as describedSolicitation” in the proxy materials, management will respond to questions of general interest to stockholders, including questions related to the matters to be voted on at the meeting.statement accompanying this notice.
It is important that your shares be represented and voted whether or not you plan to attend the annual meeting in person. If you do not attend the annual meeting in person, you may vote on the Internet or by telephone, or if you are receiving a paper copy of the proxy statement, by completing and mailing a proxy card. Voting over the Internet, by telephone or by written proxy will ensure your shares are represented at the annual meeting.
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NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON THURSDAY, JUNE 16, 2016
To the Stockholders of Demand Media, Inc.:
We will hold the 2016 annual meeting of stockholders (the "annual meeting") of Demand Media, Inc. ("Demand Media," "we," "us" or "our") at our corporate headquarters located at 1655 26th Street, Santa Monica, California 90404, on Thursday, June 16, 2016, at 2:00 p.m. Pacific Daylight Time. We will consider and act on the following items of business at the annual meeting:
| 1. | Election of each of Charles (Lanny) Baker and Jennifer Schulz as a director to serve for a three-year term expiring at the 2023 annual meeting of stockholders and when such director’s successor is duly elected and qualified, or until such director’s earlier resignation or removal. |
| 2. | Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020. |
| 3. | Non-binding advisory vote to approve executive compensation (“say-on-pay” vote). |
| 4. | Such other business as may properly come before the annual meeting or any adjournment or postponement of the annual meeting. |
The proxy statement accompanying this notice describes each of these items of business in detail. OurThe Board of Directors recommends a vote "FOR"“FOR” each of the threetwo director nominees for director andnamed in this proxy statement, a vote "FOR"“FOR” the ratification of the appointment of PricewaterhouseCoopersDeloitte & Touche LLP as our independent registered public accounting firm.firm, and a vote “FOR” the non-binding advisory say-on-pay vote.
Only stockholders of record at the close of business on April 21, 2016March 31, 2020 are entitled to receive notice of, to attend, and to vote at the annual meeting, including any adjournments or postponements thereof. A list of stockholders eligible to voteOur Proxy Statement and our Annual Report on Form 10-K can also be accessed directly at the annual meeting will be available for inspection atInternet address www.proxyvote.com using the annual meeting and at16-digit control number located on your proxy card or in the executive offices of Demand Media during regular business hours for a period of no less than ten days prior to the annual meeting.instructions accompanying your proxy materials.
Your vote is very important.It is important that your shares be represented and voted whether Whether or not you plan to attend the annual meeting, in person. Ifwe hope that you are viewing the proxy statement on the Internet, youwill vote as soon as possible. You may grantvote your proxy electronically via the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials mailed to you and the instructions on the Internet site. If you are receiving a paper copy of the proxy statement, you may voteshares by completing and mailing the proxy card enclosed with thethis proxy statement, via a toll-free telephone number or youover the Internet. Any stockholder attending the annual meeting may grant your proxy electronically viavote over the Internet or by telephone by followingduring the instructions on themeeting, even if you have already returned a proxy card.
If your shares are held in "street“street name,"” which means your shares are held of record by a broker, bank or other nominee, you should review the notice provided by that entity to determine whether and how you will be able to submit your proxy. Submittingproxy or vote your shares. Please follow the instructions you receive from your account manager to vote your shares. Additionally, submitting a proxy over the Internet, by telephone or by mailing a proxy card will ensure that your shares are represented at the annual meeting.
Any stockholder attending the annual meeting may vote in personelectronically, even if such stockholder has previously voted by another method, and any previous votes that were submitted by the stockholder, whether over the Internet, by Internet, telephone or mail, will be superseded by the vote that such stockholder casts electronically at the annual meeting. Even if you plan to attend the annual meeting virtually, we recommend that you vote your shares on the proxy card in advance to ensure that your shares will be represented.
If you have any questions about the annual meeting or how to vote your shares, please see the section “Information Concerning Voting and Solicitation” in the proxy statement accompanying this notice, review the information on your proxy card or the instructions you receive from your account manager, contact Innisfree M&A Incorporated, our proxy solicitor assisting us in connection with the annual meeting. Stockholders may call toll free at (888) 750-5834. Banks and brokers may call collect at (212) 750-5833.
Thank you for your ongoing support of Demand Media.Leaf Group.
| By Order of the Board of Directors, | ||
| ||
 | ||
Sean Moriarty |
PROXY STATEMENT
PROXY STATEMENT
FOR 20162020 ANNUAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
| Page | ||||
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE | MONDAY, MAY 18, 2020 | 1 | ||
INFORMATION CONCERNING VOTING AND SOLICITATION | 1 | |||
Who Can Vote | 1 | |||
Voting of Shares | 1 | |||
Revocation of Proxy | 2 | |||
| Attending the Online Annual Meeting | 2 | |||
| Submitting Questions for the Annual Meeting
| ||||
| Voting at the Annual Meeting | 2 | |||
| Who Can Attend the Meeting | ||||
Quorum and Votes Required | 3 | |||
Solicitation of Proxies | 4 | |||
| Assistance
| 4 | |||
Forward-Looking Statements | 4 | |||
| A NOTE REGARDING THIS PROXY STATEMENT | 4 | |||
ITEM 1—ELECTION OF DIRECTORS | 5 | |||
Board Structure | 5 | |||
Director Nominees | 5 | |||
Information Regarding the Board of Directors and Director Nominees | 5 | |||
| Board Recommendation | 9 | |||
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ITEM 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | ||||
| General
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Principal Accounting Fees and Services | ||||
| Change of Independent Public Accounting Firm | 11 | |||
| Pre-Approval Policies and Procedures | ||||
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| 11 | |||
Board | Recommendation | 11 | ||
| ITEM 3—NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY” VOTE)
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| 12 | |||
| Summary
| 12 | |||
Board | Recommendation | 13 | ||
| CORPORATE GOVERNANCE | 14 | |||
| Board Leadership Structure | 14 | |||
| Risk Oversight | 14 | |||
| Director Independence | 14 | |||
| Board Meetings | 15 | |||
| Board Committees | 15 | |||
| Compensation Committee Interlocks and Insider Participation | ||||
Communication with the Board | ||||
Code of Business Conduct and Ethics | ||||
DIRECTOR COMPENSATION | ||||
EXECUTIVE OFFICERS | ||||
COMPENSATION DISCUSSION AND ANALYSIS | ||||
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Principal Components of Executive Compensation Program | ||||
Severance and Change in Control Benefits | ||||
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| EXECUTIVE COMPENSATION | 26 | |||
| Summary Compensation Table
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Narrative Disclosure to Summary Compensation Table |
Outstanding Equity Awards at | ||||
| Nonqualified Deferred Compensation | |||
Potential Payments Upon Termination or Change in Control | ||||
EQUITY COMPENSATION PLAN INFORMATION | ||||
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL OWNERS | ||||
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | ||||
Policies and Procedures for Review of Related Party Transactions | ||||
Related Party Transactions | ||||
AUDIT COMMITTEE REPORT | ||||
OTHER MATTERS | ||||
| Limitations on Hedging and Pledging Stock
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| Delinquent Section 16(a) Reports | 37 | |||
| Stockholder Proposals and Nominations | ||||
Householding of Proxy Materials | ||||
Incorporation by Reference | ||||
Availability of Annual Report on Form 10-K | ||||
Other Matters | ||||
ii
LEAF GROUP LTD.
DEMAND MEDIA, INC.
1655 26th Street
Santa Monica, California 90404
PROXY STATEMENT
FOR 20162020 ANNUAL MEETING OF STOCKHOLDERS
Your
This proxy is solicitedstatement and the accompanying proxy card are furnished on behalf of the board of directors (the "Board"“Board”) of Demand Media, Inc.Leaf Group Ltd., a Delaware corporation ("Demand Media," "we," "us," "our"(“Leaf Group,” “we,” “us,” “our” or "the Company"the “Company”), for use at our 20162020 annual meeting of stockholders to be held on Thursday, June 16, 2016,Monday, May 18, 2020, at 2:9:00 p.m.a.m. Pacific Daylight Time, at our corporate headquarters located at 1655 26th Street, Santa Monica, California 90404,online via live interactive audio webcast on the Internet, or at any continuation, postponement or adjournment thereof, for the purposes discussed in this proxy statement and in the accompanying Notice of Annual Meeting of Stockholders and any business properly brought before the annual meeting. Proxies are solicited to give all stockholders of record an opportunity to vote on matters properly presented at the annual meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2016 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, JUNE 16, 2016
This proxy statement our 2015and the accompanying proxy card are expected to be first mailed to stockholders on or about April 20, 2020. Our 2019 Annual Report to stockholders and the Notice of the Annual Meeting are available athttp://ir.demandmedia.com/investor-overview/proxy-and-annual-meeting/default.aspx. You are encouraged to access and review all of the important information contained in the proxy materials before voting.
In accordanceis being mailed together with rules and regulations adopted by the U.S. Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice of Internet Availability") to our stockholders of record on or about May 6, 2016. Brokers, banks and other nominees who hold shares on behalf of beneficial owners will be sending a similar notice to beneficial owners. All stockholders will have the ability to access the proxy materials on the website listed above or to request a printed set of the proxy materials be sent to them by following the instructions in the Notice of Internet Availability. We intend to mail this proxy statement together with a proxy card, to thoseall stockholders entitled to vote at the annual meeting who have properly requested paper copies of such materials within three business days of such request.meeting.
The Notice of Internet Availability will also provide instructions on how you may request that we send electronic or printed copies of future proxy materials to you by electronic mail or mail. Your election to receive proxy materials by electronic mail or printed copies by mail will remain in effect until you terminate it.
INFORMATION CONCERNING VOTING AND SOLICITATION
You are entitled to vote if you were a stockholder of record of our common stock as of the close of business on April 21, 2016.March 31, 2020. You are entitled to one vote for each share of common stock held by you on all matters to be voted upon at the annual meeting. Your shares may be voted at the annual meeting only if you are present in person or represented by a valid proxy.
You may vote by attending the annual meeting virtually and voting in personelectronically during the annual meeting or you may vote by submitting a proxy.prior to the annual meeting over the Internet, telephone or completing and mailing your proxy card. The method of voting by proxy differs (1) depending on whether you are viewing this proxy statement on the Internet or receiving a paper copy, and (2) for shares held as a record holder and shares held in "street“street name."”
Stockholder of Record: If you hold your shares of common stock as a record holder, and you are
viewing this proxy statement on the Internet, you may vote by submitting a proxy over the Internet by following the instructions on the website referred to above and in the Notice of Internet Availability. If you hold your shares of common stock as a record holder and you are reviewing a paper copy of this proxy statement, you may vote your shares by completing, dating and signing the proxy card that was included with thethis proxy statement and promptly returning it in the pre-addressed, postage paid envelope provided to you, or by submitting a proxy over the Internet or by telephone before the annual meeting or over the Internet during the annual meeting by following the instructions on the proxy card. Instructions on how to participate in the annual meeting are also posted online at www.proxyvote.com.
Beneficial Owner: If you hold your shares of common stock in street“street name,” which means your shares are held of record by a broker, bank or other nominee, you will receive a notice from your broker, bank or other nominee that includes instructions on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to vote by telephone. In addition, youYou may request paper copies ofalso vote your shares, before the proxy statement andannual meeting over the Internet or by telephone or over the Internet during the annual meeting, in each case by using your 16-digit control number, which is on your proxy card fromor in the instructions accompanying your proxy materials, if your broker, bank or other nominee makes those instructions available, and by following the instructions provided to you with the proxy materials. Instructions on how to participate in the notice provided by your broker.annual meeting of stockholders are also posted online at www.proxyvote.com.
The Internet and telephone voting facilities will close at 11:59 p.m. (EDT) on June 15, 2016. If you vote through the Internet, you should be aware that you may incur costs to access the Internet, such as usage charges from telephone companies or Internet service providers and that these costs must be borne by you. If you vote by Internet or telephone, then you do not need to return a written proxy card by mail.
YOUR VOTE IS VERY IMPORTANT. You should submitWe recommend that you return your proxy card or cast your vote pursuant to the instructions for Internet or telephone voting set forth on the proxy card or, if your shares are held of record by a broker, bank or other nominee, the materials you receive from your account manager, even if you plan to attend the annual meeting. If you properly give your proxy and submit it to us in time to vote, one of the individuals named as your proxy will vote your shares as you have directed.
All shares entitled to vote and represented by properly submitted proxies (including those submitted electronically, telephonically and in writing) received before the polls are closed at the annual meeting, and not revoked or superseded, will be voted at the annual meeting in accordance with the instructions indicated on those proxies. If no direction is indicated on ayour proxy card, your shares will be voted"FOR"“FOR” the election of each of the threetwo director nominees for director; and"FOR"named in this proxy statement;“FOR” ratification of the appointment of the independent registered public accounting firm.firm; and“FOR”the non-binding advisory say-on-pay vote. The proxy card gives each of Sean Moriarty, Rachel GlaserJantoon Reigersman and Daniel WeinrotAdam Wergeles discretionary authority to vote your shares in accordance with his or her best judgment with respect to any and all additional matters that might come before the annual meeting.
If you are a stockholder of record, you may revoke your proxy at any time before your proxy is voted at the annual meeting by taking any of the following actions:
| · | delivering to our corporate secretary a signed written notice of revocation, bearing a date later than the date of the proxy, stating that the proxy is revoked; |
| · | signing and delivering a new proxy card, relating to the same shares and bearing a later date than the original proxy card; |
| · | submitting another proxy by telephone or over the Internet (your latest telephone or Internet voting instructions will be followed) in accordance with the instructions on the proxy card; or |
| · | attending the annual meeting and voting electronically during the meeting, although attendance at the annual meeting will not, by itself, revoke a proxy. |
Written notices of revocation and other communications with respect to the revocation of Demand Media proxies should be addressed to:
Demand Media, Inc.1655 26th StreetSanta Monica, California 90404Attn: Corporate Secretary
If your shares are held in "street“street name,"” you may change your vote by submitting new voting instructions to your broker, bank or other nominee.nominee or by voting over the Internet or by telephone pursuant to instructions received from your account manager. You mustshould contact your broker, bank or other nominee to find out how to do so. See below
Attending the Online Annual Meeting
In light of public health concerns regarding COVID-19, this year the annual meeting will be conducted online only, via a live interactive audio webcast. To participate in the online meeting, visit www.virtualshareholdermeeting.com/LEAF2020 and enter the 16-digit control number included on your proxy card, or on the instructions that accompanied your proxy materials. You may begin to log into the meeting platform beginning at 8:45 a.m. Pacific Time on May 18, 2020. The meeting will begin promptly at 9:00 a.m. Pacific Time on May 18, 2020. Instructions on how to participate in the annual meeting of stockholders are also posted online at www.proxyvote.com.
We will have technicians ready to assist you with any technical difficulties you may have accessing the online meeting. Technical support will be available starting at 8:30 a.m. Pacific Time, 30 minutes before the meeting start time, on May 18, 2020 and will remain available until the annual meeting has ended. If you encounter any difficulties accessing the interactive audio webcast during the check-in or meeting time, please call the technical support number that will be posted on www.virtualshareholdermeeting.com/LEAF2020.
Submitting Questions for the Annual Meeting
All written questions timely submitted during the meeting and pertinent to meeting matters will be answered, subject to time constraints. However, Leaf Group reserves the right to edit or reject questions it deems profane or otherwise inappropriate. Detailed guidelines for submitting written questions during the meeting are available at www.virtualshareholdermeeting.com/LEAF2020. If you would like to submit a question during the annual meeting, log into www.virtualshareholdermeeting.com/LEAF2020 by using your 16-digit control number, which is on your proxy card or in the instructions accompanying your proxy materials, type your question into the “Ask a Question” field, and click “Submit.” The questions and answers will be available as soon as practicable after the annual meeting at www.virtualshareholdermeeting.com/LEAF2020 and will remain available for one week after posting.
Shareholders of record and beneficial owners will be able to vote their shares electronically during the annual meeting. However, even if you plan to participate in personthe annual meeting online, we recommend that you also vote by proxy, as described above, so that your votes will be counted if you later decide not to participate in the annual meeting. You can vote your shares over the Internet during the annual meeting, by using the 16-digit control number, which is on your proxy card or in the instructions accompanying your proxy materials, if your shares are held in street name.broker, bank, or nominee makes those instructions available, and by following the instructions provided to you with the proxy materials.
Voting in Person
Who Can Attend the Meeting
If you plan to
All stockholders may attend the annual meeting live online at www.virtualshareholdermeeting.com/LEAF2020. To participate in the online meeting, visit www.virtualshareholdermeeting.com/LEAF2020 and wish to vote in person, you will be given a ballot atenter the annual meeting. Please note, however,16-digit control number included on your proxy card, or on the instructions that ifaccompanied your shares are held in "street name," which means your shares are held of record by a broker, bank or other nominee, and you wish to vote at the annual meeting, you must bring to the annual meeting a legal proxy from the record holder of the shares, which is the broker, bank or other nominee, authorizing you to vote at the annual meeting.
Who Can Attend the Meeting
materials.
Only stockholders, their proxy holders and the Company's guests may attend the meeting. You should be prepared to present valid photo identification, such as a driver's license or passport. Additionally, if you hold shares through a broker, bank, trustee or nominee, you should bring proof of beneficial ownership as of April 21, 2016, such as (i) your most recent account statement reflecting your stock ownership prior to April 21, 2016; (ii) a copy of the voting instruction card provided by your banker, bank, trustee or nominee; or (iii) similar evidence of ownership.
At the close of business on April 21, 2016, 20,359,399March 31, 2020, 26,603,565 shares of our common stock were outstanding and entitled to vote. All votes will be tabulated by the inspector of election appointed for the annual meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Broker non-votes are shares held of record by brokers, banks or other nominees but not voted due to the failure of the beneficial owners of those shares to provide voting instructions.
Quorum.A majority of the outstanding shares of common stock, present in personvirtually or represented by proxy, will constitute a quorum at the annual meeting. Shares of common stock held by persons attending the annual meeting virtually but not voting, shares represented by proxies that reflect abstentions as to a particular proposal and broker non-votes will be counted as present for purposes of determining a quorum. If there is no quorum, either the chairperson of the annual meeting or a majority in voting power of the stockholders entitled to vote at the annual meeting, present in personvirtually or represented by proxy, may adjourn the annual meeting to another time or place.
Broker Non-Votes.Brokers, banks or other nominees who hold shares of common stock in "street name"“street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on routine proposals when they have not received instructions from beneficial owners. However, brokers, banks or other nominees are not allowed to exercise their voting discretion with respect to the election of directors or for the approval of matters that the New York Stock Exchange ("NYSE"(“NYSE”) determines to be "non-routine."“non-routine.” If your broker, bank or other nominee holds your common stock in "street“street name,"” your broker, bank or other nominee will only vote your shares on "non-routine"“non-routine” proposals if you provide specific instructions on how to vote by filling out the proxy card voter instruction form sent to you by your
broker.the votes cast. Only Item 2 (ratifying the appointment of our independent registered public accounting firm) iswill be considered a “routine” matter for which your broker does not need your voting instruction in order to be a routine matter.vote your shares. The other Itemsitems are considered "non-routine"“non-routine” matters, and without your instruction, your broker, bank or other nominee cannot vote your shares on Item 1 (election of directors) or Item 3 (say-on-pay vote).
Election of Directors.Our bylaws provide that at all meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast is sufficient to elect a director, which means the nomineetwo nominees receiving the highest number of "for"“for” votes will be elected. Abstentions willShares voting “withheld” have no effect in determining which nominee received a pluralityon the outcome of votes cast because approval of a percentage of shares present or outstanding is not required for this proposal.matter. Brokers, banks and other nominees are not empowered to vote on the election of directors without instruction from the beneficial owner of the shares, and thus there will likely be broker non-votes likely will result.on this proposal. Broker non-votes will have no effect in determining which nominee receives a plurality of the votes cast.
Ratification of Independent Registered Public Accounting Firm.At an annual meeting in which a quorum is present, the affirmative vote of the holders of a majority in voting power of the shares of our common stock whichthat are present in personvirtually or by proxy and entitled to vote thereon is required for the ratification of the appointment of PricewaterhouseCoopersDeloitte & Touche LLP as our independent registered public accounting firm. Brokers generally have discretionary authority to vote on the ratification of our independent registered public accounting firm; thus, broker non-votes are generally not expected to occur with respect to this matter. Broker non-votes that do occur are not considered to be shares present and entitled to vote on this proposal, and thus will have no effect on the outcome of this matter. Abstentions are considered to be shares present and entitled to vote on this proposal, and thus will have the same effect as voting against this proposal.
Advisory Say-on-Pay Vote.At an annual meeting in which a quorum is present, the affirmative vote of the holders of a majority in voting power of the shares of our common stock that are present virtually or by proxy and entitled to vote thereon is required for approval, on a non-binding advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement. This is a non-routine proposal on which a broker, bank or other nominee does not have discretion to vote any uninstructed shares. Broker non-votes are not considered to be shares present and entitled to vote on this proposal, and thus will have no effect on the outcome of this matter. Abstentions are considered to be shares present and entitled to vote on this proposal, and thus will have the same effect as voting against this proposal. The say-on-pay vote is only advisory, and therefore not binding on the Company, the compensation committee or our Board. Although non-binding, the vote will provide information to our compensation committee regarding investor sentiment about our executive compensation philosophy, policies and practices, which the compensation committee will be able to consider when determining executive compensation in the future.
Other Matters. Other than the three items of business described in this proxy statement, we are not aware of any other business to be acted upon at the annual meeting. If you grant a proxy, the persons named as proxy holders, Sean Moriarty, Jantoon Reigersman and Adam Wergeles, or any of them, will have the discretion to vote your shares on any additional matters properly presented for a vote at the annual meeting.
Our Board is soliciting proxies for the annual meeting from our stockholders. We will bear the entire cost of soliciting proxies from our stockholders. In addition to the solicitation of proxies by delivery of the Notice of Internet Availability or proxy statement by mail,Further, we will request thatmay reimburse brokers, banks and other nominees that hold shares of our common stock on behalf of beneficial owners send notices of internet availability, proxies and proxy materials to those beneficial owners and secure those beneficial owners' voting instructions. We will reimburse those record holders for their reasonable expenses. We may use severalout-of-pocket expenses for forwarding proxy and solicitation materials to such beneficial owners of our regularcommon stock.
We have retained Innisfree M&A Incorporated (“Innisfree”) to aid in soliciting proxies and advise on certain matters relating to the annual meeting for a fee estimated not to exceed $25,000 plus reasonable out-of-pocket expenses. Proxies may be solicited on our behalf by telephone or through other means by our directors, officers and other employees who will not be specially compensated, to solicit proxies from our stockholders, either personally or by telephone, Internet, facsimile or special delivery letter.receive no additional compensation therefor.
If you need assistance in voting over the Internet or completing your proxy card or have questions regarding the annual meeting, please contact Investor RelationsInnisfree M&A Incorporated,501 Madison Avenue, 20th Floor, New York, NY 10022. Stockholders may call toll free at (310) 656-6253, email(888) 750-5834. Banks and brokers may call collect at ir@demandmedia.com, or write to Investor Relations, Demand Media, Inc., 1655 26th Street, Santa Monica, California 90404.(212) 750-5833.
This proxy statement contains "forward-looking statements" (as defined in“forward-looking statements” within the Privatemeaning of Section 27A of the Securities Litigation Reform Act of 1995)1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts are forward-looking statements. These statements are based on our current expectations and involveare subject to a number of risks, uncertainties and uncertainties,assumptions, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding actions to be taken by us. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those discussed in the "Risk Factors"“Risk Factors” and "Management's“Management’s Discussion and Analysis of Financial Condition and Results of Operations"Operations” sections of our Annual Report on Form 10-K for the year ended December 31, 2015,2019, as such disclosure may be updated in our quarterly reportsQuarterly Reports on Form 10-Q and our current reportsCurrent Reports on Form 8-K.
A NOTE REGARDING THIS PROXY STATEMENT
The Company has qualified as a “smaller reporting company” within the meaning of the Securities Act and the Exchange Act since 2019. This proxy takes advantage of the scaled disclosure requirements available to smaller reporting companies in certain respects, while providing additional disclosure not required by applicable rules where it was determined to be helpful to investors and not burdensome to the Company.
Our Amended and Restated Bylaws (“bylaws”) provided for our Board to initially be comprised of nine directors and, thereafter, our bylaws permit our Board to fix the authorized number of directors by resolution of the Board. Our Board currently consists of seventen members, who are divided into three classes with staggered three-year terms, and, effective as of the annual meeting, our Board will consist of eight members, who are divided into three classes with staggered three-year terms. Each director holds office until that director'sdirector’s successor is duly elected and qualified or until his or her earlier death or resignation. At each annual meeting, the term of one class of directors expires. The class of directors with a term expiring at this annual meeting consists of three directors.four directors, two of which have been nominated for re-election.
Our Amended and Restated Bylaws, or bylaws, provided for our Board to initially be comprised of nine directors and, thereafter, our bylaws permit our Board to fix the authorized number of directors by resolution. In February 2015, the Board adopted a resolution to reduce the size of our Board to seven directors. There are currently seven directors authorized, with no vacancies on our Board. Unless the Board determines that vacancies (including vacancies created by increases in the number of directors) shall be filled by the stockholders, and except as otherwise provided by law, vacancies on the Board may be filled only by the affirmative vote of a majority
As all of the remaining directors. A director elected by the Board to fill a vacancy (including a vacancy created by an increase in the number of directors) shall serve for the remainder of the full term of the class of directors in which the vacancy occurred.
Based upon the recommendationmembers of our nominating and corporate governance committee are up for election at the 2020 annual meeting, our Board formed an ad hoc committee consisting of all other independent directors for the purpose of nominating directors for election at the 2020 annual meeting.
Based upon the recommendation of our ad hoc committee, our Board has nominatedFredric W. Harman,Sean MoriartyCharles (Lanny) Baker andJames R. QuandtJennifer Schulz for re-electionelection as directors to the Board. Messrs. Harman, MoriartyMr. Baker, and QuandtMs. Schulz each currently serve on our Board. Biographical information on each of the nominees is furnished below. If elected, each director nominee named in this proxy statement would serve in office until the expiration of hissuch director’s three-year term at the close of our 20192023 annual meeting and until hissuch director’s successor is duly elected and qualified, or until hissuch director’s earlier resignation or removal.
Information Regarding the Board of Directors and Director Nominees
Set forth below is information, as of the record date, regarding each member of our Board, including each director nominee.nominee named in this proxy statement. There are no family relationships among any of our directors or executive officers. See "Corporate Governance"“Corporate Governance” and "Director Compensation"“Director Compensation” below for additional information regarding the Board of Directors.Board.
| Name | Age | Position | Director Since | Term Expires | |||||
| Charles (Lanny) Baker(1) | 53 | Director | 2019 | 2020 | |||||
| John A. Hawkins(2) | 59 | Director | 2006 | 2020 | |||||
| Brian M. Regan(2)(3) | 48 | Director | 2015 | 2020 | |||||
| Jennifer Schulz(2)(4) | 49 | Director | 2016 | 2020 | |||||
| Deborah Benton | 52 | Director | 2019 | 2021 | |||||
| John Pleasants(3) | 54 | Director | 2016 | 2021 | |||||
| Mitchell Stern(3)(4) | 65 | Director | 2016 | 2021 | |||||
| Beverly K. Carmichael(1) | 61 | Director | 2018 | 2022 | |||||
| Sean Moriarty | 49 | Director, Chief Executive Officer | 2014 | 2022 | |||||
| James R. Quandt(1)(4) | 70 | Non-Executive Chairman of the Board | 2008 | 2022 | |||||
Name | Age | Position | Director Since | Term Expires | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fredric W. Harman(1)(2) | 55 | Director | 2006 | 2016 | ||||||||
Sean Moriarty | 45 | Director, Chief Executive Officer | 2014 | 2016 | ||||||||
James R. Quandt(1)(3) | 66 | Non-Executive Chairman of the Board | 2008 | 2016 | ||||||||
John A. Hawkins(2)(3) | 55 | Director | 2006 | 2017 | ||||||||
Brian M. Regan(1)(2) | 44 | Director | 2015 | 2017 | ||||||||
Victor E. Parker | 46 | Director | 2006 | 2018 | ||||||||
Mitchell Stern(3) | 61 | Director | 2016 | 2018 | ||||||||
| (1) | Member of the strategic review committee. |
| (2) | Member of the nominating and corporate governance committee. |
| (3) | Member of the compensation committee. |
| (4) | Member of the audit committee. |
NomineeLeaf Group Nominees for Election at the Annual Meeting to Serve for a Three-Year Term Expiring at the 20192023 Annual Meeting of Stockholders
Fredric W. HarmanCharles (Lanny) Baker has served on our Board since 2006April 2019 and is currently the chairperson of our compensation committeestrategic review committee. Mr. Baker has served as Chief Financial Officer of Eventbrite, a publicly traded online ticketing platform company, since September 2018. From April 2016 to September 2019, Mr. Baker served as Chief Financial Officer of Yelp, Inc., a publicly traded online consumer ratings platform company. Previously, Mr. Baker served as Chief Executive Officer and a memberPresident of ourZipRealty, Inc., an online real estate brokerage and technology company, from September 2010 through March 2016. He also served as Executive Vice President and Chief Financial Officer of ZipRealty from December 2008 to September 2010. ZipRealty was acquired by Realogy Holdings, Inc. in August 2014. From June 2007 to December 2008, Mr. Baker was an independent investor. From March 2005 to June 2007, he served as Senior Vice President and Chief Financial Officer of Monster Worldwide, Inc., which operates the
employment website monster.com. From 1993 to 2005, Mr. Baker held various positions at Salomon Brothers (subsequently Salomon Smith Barney, then Citigroup), including Managing Director in the Equity Research Department. Mr. Baker served on the board and chaired the audit and nominating and corporate governance committee. Mr. Harman joined Oak Investment Partners,committees of XO Group, Inc., a multi-stage venture capital firm,publicly traded life stage consumer Internet and media company, from November 2005 to December 2018, when it was acquired by WeddingWire, Inc. He also served as a General Partner in 1994,director and currently serves as Managing Partner, focusing primarily on Consumer Internet and Internet New Media investments. From 1991chairman of the audit committee of HomeAway, Inc., a publicly traded online vacation rental company, from 2011 to 1994, heDecember 2015, when it was acquired by Expedia, Inc. Mr. Baker holds a General Partner of Morgan Stanley Venture Capital.B.A. from Yale College.
We believe that Mr. Harman currently serves on the board of U.S. Auto Parts Network, Inc., an online provider of aftermarket auto parts, as well as a number of privately held companies, including several media and technology companies. Mr. Harman holds an M.B.A. from the Harvard Business School and a B.S. and M.S. in Electrical Engineering from Stanford University. Mr. Harman was originally nominatedBaker is qualified to serve on our Board pursuant to our Third Amended and Restated Stockholders' Agreement. Mr. Harman's broad industry and financial expertise, including his considerable involvement with venture capital backed companies in the Internet and technology sectors with a focus on new media platforms, makes him a valuable contributor to our Board and its committees. In addition, Mr. Harman's extensive experience serving on the boards of numerous public and private companies strengthens the knowledge base and oversight of our Board.
Sean Moriarty has served as our Chief Executive Officer and as a member of our board because of directors since August 2014. Mr. Moriarty previously served as the Chief Executive Officerhis over 20 years of Saatchi Online, Inc., which operates Saatchi Art, an online art gallery, from August 2013 to August 2014, when Demand Media acquired it. From August 2009 to June 2012, Mr. Moriarty was an Entrepreneurexperience in Residence at Mayfield Fund, a venture capital firm. From January 2007 to March 2009, Mr. Moriarty was Presidentinternet and Chief Executive Officer of Ticketmaster, a live entertainment ticketing and marketing company, and he held positions of increasing responsibility at Ticketmaster from 2000 to 2006, including EVP, Technology and Chief Operating Officer. He begandigital media companies. We believe that his executive experience as EVP, Technology at Citysearch, an executive of companies with significant operations in the online city guide. Mr. Moriarty served on the Ticketmaster board of directors from August 2008 to March 2009 and he currently sits on the board of directors of several private companies, including Eventbrite and TuneIn. Mr. Moriarty is actively involved in non-profit work with CoachArt, and previously served on the board of directors of the Pat Tillman Foundation. Mr. Moriarty received his bachelor's degree from the University of South Carolina and attended graduate school at Boston University and the University of South Carolina. As our Chief Executive Officer, Mr. Moriarty's in-depth knowledge of the Company and its industries, operations and business provides valuable insights to our Board. In addition, we believe that Mr. Moriarty's significant management and industry, experience, as well as his experiencedeep financial expertise gained from serving on the boards of numerous companies,his experience as a public company executive, makes him an importanta valuable contributor and resource to our Board.
James R. QuandtJennifer Schulz has served on our Board since 2008 and is currently the non-executive Chairman of the Board and a member of our audit committee and compensation committee. Mr. Quandt is the co-founder of Thomas James Capital, Inc., a private equity firm that also provides financial advisory services, where he has been a Managing Partner since 2005. Mr. Quandt has over three decades of senior management experience, including serving as President of Standard and Poor's Corporation, a provider of independent credit risk research and benchmarks; Chairman of Bridge Financial Information; and President of Security Pacific Brokerage, Inc. Mr. Quandt currently serves as the Chairman of the Board of The FRS Company and as a member of the board of directors of Rightside Group, Ltd., a domain name services company. He has previously served on the boards of Intermix Media, Inc., an Internet marketing company that owned MySpace, Inc.; The Brain Corporation; Blue Label Interactive, Inc.; and Digital Orchid Incorporated. Mr. Quandt is a former member of the New York Stock Exchange and the Board of Trustees of Saint Mary's College of California. Mr. Quandt participated in the Managerial Policy Institute at the University of Southern California's Marshall School of Business, and he received a B.S. in Business Administration from Saint Mary's College.
Mr. Quandt's mix of executive leadership and financial expertise provides our Board and its audit and compensation committees with valuable insight and guidance. Mr. Quandt brings a seasoned and strategic perspective to our Board, rooted in his role as a board member of various public and private companies in the Internet and technology sectors, as well as his experience as a former member of the New York Stock Exchange.
Directors Continuing in Office until the 2017 Annual Meeting of Stockholders
John A. Hawkins has served on our Board since 2006November 2016 and is currently a member of our audit committee and nominating and corporate governance committee. Mr. HawkinsSince November 2013, Ms. Schulz has served as ManagingGroup President, Vertical Markets for Experian North America, a division of Experian plc, a global information services company, where she is responsible for overseeing the Automotive, Health and Marketing Services businesses in North America. From May 2010 to September 2013, Ms. Schulz was the Senior Vice President of global product strategy, innovations and eCommerce for Visa Inc., a global payments and technology company. From 2008 to 2010, Ms. Schulz worked at Verifi, Inc., a SaaS-based electronic payment solutions company, first serving as Chief Operating Officer and then Chief Executive Officer, and from 2003 to 2008, Ms. Schulz held various operational and leadership positions at Visa. Ms. Schulz received an M.B.A. from the University of Michigan’s Ross School of Business and a B.A. from the University of Wisconsin.
We believe that Ms. Schulz is qualified to serve as a member of our board because of her over 15 years of experience in the e-commerce, digital marketing and payments industries, serving in executive and operational leadership roles over that span. Ms. Schulz’s extensive industry knowledge, business expertise and leadership skills serve as a key resource to our Board.
Directors Continuing in Office until the 2021 Annual Meeting of Stockholders
Deborah Benton has served on our Board since January 2019. In May 2014, Ms. Benton joined Kaktus Capital as an Investment Partner, and co-founderin May 2014, she joined Mitchell Madison Group as a Senior Consultant where she leads the consumer and retail practice. In this role, Ms. Benton assists clients in a wide array of Generation Partners, a private equity firm that provides capital to companies in the businessareas including retail strategy, supply chain management, cost reduction and information services, mediacontrol, organizational design and communications, and healthcare services industries, through growth equity and buyout investments, since 1995.operational scaling. Prior to founding Generation Partners, Mr. Hawkins wasjoining Mitchell Madison Group, Ms. Benton held a General Partnernumber of senior level operating roles at Burr, Egan, Deleage & Co.,Nasty Gal, a venture capital firm that he joined in 1987.women’s fashion retailer, from May 2012 to April 2014, including serving as its President and Chief Operating Officer. Prior to that, she was the Chief Operating Officer of ShoeDazzle from November 2009 to April 2012, an online women’s fashion footwear company. Prior to that, she was the Executive Vice President, Operations and Inside Sales for Teleflora, a provider of consumer and florist products and services. Ms. Benton also serves as a director of TomboyX, a company offering gender-neutral underwear to a diverse customer base, since June 2018; Carbon38, a luxury activewear lifestyle brand, since March 2015; and The Bouqs Company, a cut-to-order, farm-to-table flower retailer, since February 2015. From April 2016 until May 2018, Ms. Benton was a director of Vow To Be Chic, a bridesmaid dress rental company that discontinued operations in May 2018. Ms. Benton received an MBA and an undergraduate degree in Health Sciences from Queen’s University, Canada.
We believe that Ms. Benton is qualified to serve as a member of our board because of her over 15 years of consulting and operational experience with a strong focus on e-commerce and retail businesses.
John Pleasants has served on our Board since November 2016 and is currently a member of our compensation committee. Since August 2016, Mr. HawkinsPleasants has served as the Chief Executive Officer of Brava Home Inc., an Internet of things and domestic home automation technology company. From May 2014 to July 2016, Mr. Pleasants was an investment bankerthe Executive Vice President of Media Solutions for Samsung Electronics Co., Ltd., a multinational consumer electronics company. From August 2010 to December 2013, Mr. Pleasants was Co-President of Disney Interactive Media Group, a company that oversees various websites and interactive media properties owned by The Walt Disney Company, and he was Chief Executive Officer of Playdom, Inc., a social gaming company, from July 2009 to August 2010, when it was acquired by The Walt Disney Company. From 2008 to 2009, Mr. Pleasants was President of Global Publishing and Chief Operating Officer of Electronic Arts Inc., a leading video game publisher, and from 2005 to 2007, Mr. Pleasants was Chief Executive Officer of Revolution Health Group LLC, a consumer driven healthcare startup. From 1999 to 2005, Mr. Pleasants held various executive and operational leadership roles at Alex. Brown & Sons.Ticketmaster, Inc. and its parent company, Interactive Corp., including Chief Executive Officer of Ticketmaster from 2000 to 2005, where he oversaw leading online digital media properties including Match.com, Evite.com, Citysearch.com and ReserveAmerica.com. Mr. HawkinsPleasants currently serves on the board of Captivate Network, a digital media company,directors of Brava Home Inc. and M&M Media, Inc. and he has previously served on the boards of more than 20numerous public and private companies, including Agility Recovery Solutions,Expedia Inc., HotJobs.com, Ltd., iCrossing,Ticketmaster Entertainment, LLC, Saatchi Online, Inc., P-Com,Playdom, Active.com and Peloton
Interactive, Inc., the Platform for Media, Inc., High End Systems, Inc., Zirmed and ShopWiki Corporation, where he also served as Chairman. Mr. Hawkins is also a member of the Angeleno Chapter of the World Presidents' Organization. Mr. Hawkins holdsPleasants received an M.B.A. from Harvard Business School and a B.A. in English from Harvard College. Mr. Hawkins was originally nominated to serve on our Board pursuant to our Third Amended and Restated Stockholders' Agreement. Mr. Hawkins has over 28Yale University. With more than 20 years of investment bankingexperience as a digital media and technology executive and having held executive and operational leadership roles in both public and private equity investing experience, combined with a strong track record investing in technology, media and business services companies. Hecompanies, Mr. Pleasants brings extensive business and strategic expertise,industry knowledge, as well as experiencestrong entrepreneurial and leadership skills, to the Board.
We believe that Mr. Pleasants is qualified to serve as a member of our board because he provides the Board with strong corporate governance skills and a valuable strategic perspective gained from serving on the boards of numerous public and private boards, to our Boardcompanies, primarily in the media and its committees.technology sectors.
Brian M. ReganMitchell Stern has served on our Board since February 20152016 and is currently a memberthe chairperson of our audit committee and the chairpersona member of our compensation committee. Since November 2015, Mr. Regan has served as Managing Director and Chief Financial Officer of Spectrum Equity Investors, a growth equity firm investing in companies operating in the information economy. Prior to joining Spectrum, Mr. Regan served as Senior Vice President and Chief Financial Officer of Shutterfly, Inc., a manufacturer and digital retailer of personalized products and services, from August 2012 to November 2015. Prior to joining Shutterfly, Mr. Regan served as Chief Financial Officer of Wize Commerce/Nextag, a global digital marketing and online commerce company, from July 2010 to August 2012, and as EVP and Chief Financial Officer of Ticketmaster Entertainment, a live entertainment ticketing and artist management company, from June 2008 to July 2010. Mr. Regan has also held finance leadership positions at Expedia, Inc. and LendingTree. Mr. Regan began his career at PricewaterhouseCoopers and he holds a B.S. in Business Administration and Accounting from Bucknell University. Mr. Regan has more than 20 years of finance experience at several Internet-based companies. We believe that his extensive financial and accounting experience with public and private companies, combined with his broad experience with Internet-based companies, makes him a valuable contributor and resource to our Board and its audit and compensation committees.
Directors Continuing in Office until the 2018 Annual Meeting of Stockholders
Victor E. Parker has served on our Board since 2006. Mr. Parker is a Managing Director at Spectrum Equity Investors, which he joined in September 1998. He was previously an associate at Summit Partners, L.P., a private equity firm focusing on the technology, healthcare and life sciences, and growth products and services sectors. Mr. Parker currently serves on the boards of Ancestry.com, Inc., TeachersPayTeachers, Prezi, Inc. and ExamSoft Worldwide, Inc. He has previously served on the boards of SurveyMonkey.com, Inc., NetQuote, Inc. and NetScreen Technologies, Inc.
Mr. Parker holds an M.B.A. from Stanford Graduate School of Business and a B.A. from Dartmouth College. He was originally nominated to serve on our Board pursuant to our Third Amended and Restated Stockholders' Agreement. Mr. Parker's financial expertise, combined with his experience with venture capital backed technology and Internet companies, provides our Board with a valuable perspective for important business, financial and strategic initiatives. Mr. Parker's experience serving on the boards and board committees of various public and private companies brings practical business and financial leadership to our Board and provides him with increased knowledge of effective corporate governance that benefits our Board.
Mitchell Stern has served on our Board since February 2016. Mr. Stern has over 25 years of experience with media companies, serving in both financial and lead operational roles over that span. Mr. Stern served as the Chief Executive Officer of Freedom Communications, Inc., a media company that operated newspapers, web properties and other specialty publications, from July 2010 to July 2012, and as the President and Chief Executive Officer of DIRECTV Holdings LLC, a direct broadcast satellite service provider and broadcaster in the United States, from December 2003 to March 2005. Prior to joining DIRECTV, Mr. Stern was Chairman and Chief Executive Officer of Fox Television Stations, Inc. and Twentieth Television from 1998 to 2003 and President and Chief Operating Officer of the Fox Television Stations from 1993 to 1998. Mr. Stern has previously served on the boards of Triton Media Group, LLC, Freedom Communications, and LIN Television, the audit committees of Freedom Communications and LIN Television and the compensation committee of Triton Media Group. Mr. Stern received an M.B.A. from the University of Chicago and a B.A. from the University of Pennsylvania.
We believe that Mr. Stern is qualified to serve as a member of our board because of his considerable involvement with media companies, combined with his extensive leadership experience and prior service on the boards and audit committees of both public and private companies, all of which makes him a valuable contributor to our Board and its committees and strengthens the oversight of our Board.
Directors Continuing in Office until the 2022 Annual Meeting of Stockholders
Beverly K. Carmichael has served on our Board Recommendation
since July 2018 and is currently a member of our strategic review committee. From December 2017 to April 2019, Ms. Carmichael served as the Executive Vice President and Chief People, Culture, and Resource Officer of Red Robin Gourmet Burgers, Inc. Ms. Carmichael previously served as Senior Vice President and Chief People Officer of Cracker Barrel Old Country Store from January 2014 to December 2017. Prior to that, she was Founder and Chief Executive Officer of Star HR, LLC from April 2010 to April 2014 where she provided customized HR solutions to small businesses and start-up companies. Ms. Carmichael also served as an Adjunct Professor/Advisor at the Michael F. Price College of Business from 2010 through 2013. She served as Executive Vice President, Chief People Officer at Ticketmaster from August 2006 to August 2009. Prior to joining Ticketmaster, she was Vice President of HR – Talent Acquisition, Learning and Organizational Development at Rockwell Collins from 2005 to 2006. Prior to her time with Rockwell Collins, Ms. Carmichael spent 10 years at Southwest Airlines Co. in various roles including Senior Vice President, Labor and Employee Relations; Vice President, People (Human Resources); and Chief Counsel, Labor and Employment. She also spent four years as a litigation and employment law attorney at the law firm of Manatt Phelps & Phillips. Ms. Carmichael earned both a J.D. and a B.B.A. from the University of Oklahoma.
We believe that Ms. Carmichael is qualified to serve as a member of our board because of her over 25 years of experience in human resources and employment law in both operational and legal roles.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE THREE DIRECTOR NOMINEES.Sean Moriarty has served as our Chief Executive Officer and as a member of our Board since August 2014. Mr. Moriarty previously served as the Chief Executive Officer of Saatchi Online, Inc., which operates Saatchi Art, an online art gallery, from August 2013 to August 2014, when Leaf Group acquired it. From August 2009 to June 2012, Mr. Moriarty was an Entrepreneur in Residence at Mayfield Fund, a venture capital firm. From January 2007 to March 2009, Mr. Moriarty was President and Chief Executive Officer of Ticketmaster, a live entertainment ticketing and marketing company, and he held positions of increasing responsibility at Ticketmaster from 2000 to 2006, including EVP, Technology and Chief Operating Officer. He began his executive experience as EVP, Technology at Citysearch, an online city guide. Mr. Moriarty served on the Ticketmaster board of directors from August 2008 to March 2009. He currently sits on the board of directors of Eventbrite, a publicly traded company that has built a powerful, broad technology platform to enable creators to solve challenges associated with creating live events, and several private companies, including TuneIn. Mr. Moriarty is actively involved in non-profit work with CoachArt, and previously served on the board of directors of the Pat Tillman Foundation. Mr. Moriarty received his bachelor’s degree from the University of South Carolina and attended graduate school at Boston University and the University of South Carolina. As our Chief Executive Officer, Mr. Moriarty’s in-depth knowledge of the Company and its industries, operations and business provides valuable insights to our Board.
TableWe believe that Mr. Moriarty is qualified to serve as a member of Contentsour board because of his significant management and industry experience, his experience and knowledge as Chief Executive Officer of our Company, and his experience gained from serving on the boards of numerous companies.
James R. Quandt has served on our Board since 2008 and is currently the non-executive Chairman of the Board and a member of our audit committee and our strategic review committee. Since February 2018, Mr. Quandt has served as the Managing Partner of Quandt California Holdings, Inc., a company that Mr. Quandt formed to develop large, luxury, multi-family developments. Prior to the formation of Quandt California Holdings in February 2018, Mr. Quandt was the co-founder of Thomas James Capital, Inc., a private equity firm. Mr. Quandt has over three decades of senior management experience, including serving as President of Standard and Poor’s Corporation, a provider of independent credit risk research and benchmarks; Chairman of Bridge Financial Information; and President of Security Pacific Brokerage, Inc. Mr. Quandt currently serves as the Chairman of the Board of Nutravail, Inc. and as a member of the board of Partners Bank. He previously served on the board of Rightside Group, Ltd., a then-publicly traded domain name services company, from August 2014 until it was acquired by Donuts Inc. in July 2017. He also previously served on the boards of Intermix Media, Inc., an Internet marketing company that owned MySpace, Inc.; The Brain Corporation; Blue Label Interactive, Inc.; and Digital Orchid Incorporated. Mr. Quandt is a former member of the New York Stock Exchange and the Board of Trustees of Saint Mary’s College of California. Mr. Quandt participated in the Managerial Policy Institute at the University of Southern California’s Marshall School of Business, and he received a B.S. in Business Administration from Saint Mary’s College.
We believe that Mr. Quandt is qualified to serve as a member of our board because his mix of executive leadership and financial expertise provides our Board and its audit and compensation committees with valuable insight and guidance. Mr. Quandt brings a seasoned and strategic perspective to our Board, rooted in his experience as a board member of various public and private companies in the Internet and technology sectors, as well as his experience as a former member of the New York Stock Exchange.
Directors Continuing in Office until the 2020 Annual Meeting of Stockholders
John A. Hawkins has served on our Board since 2006 and is currently a member of our nominating and corporate governance committee. Since 1995, Mr. Hawkins has served as Managing Partner and co-founder of Generation Partners, a private equity firm that provides capital to companies in the business and information services, media and communications, and healthcare services industries through growth equity and buyout investments. Prior to founding Generation Partners, Mr. Hawkins was a General Partner at Burr, Egan, Deleage & Co., a venture capital firm that he joined in 1987. Prior to that, Mr. Hawkins was an investment banker at Alex. Brown & Sons. Mr. Hawkins currently serves on the board of Captivate Network, a digital media company, and he has served on the boards of more than 20 companies, including Agility Recovery Solutions, Inc., HotJobs.com, Ltd., iCrossing, Inc., P-Com, Inc., the Platform for Media, Inc., High End Systems, Inc., Zirmed and ShopWiki Corporation, where he also served as Chairman. Mr. Hawkins is also a member of the Angeleno Chapter of the World Presidents’ Organization. Mr. Hawkins holds an M.B.A. from Harvard Business School and a B.A. in English from Harvard College.
Mr. Hawkins was originally nominated to serve on our Board pursuant to our Third Amended and Restated Stockholders’ Agreement. We believe that Mr. Hawkins is qualified to serve as a member of our board because of his 30 years of investment banking and private equity investing experience, combined with his strong track record investing in technology, media and business services companies. He also brings extensive business and strategic expertise, as well as experience serving on numerous public and private boards, to our Board and its committees.
Brian M. Regan has served on our Board since February 2015 and is currently the chairperson of our nominating and corporate governance committee and our compensation committee. Since November 2015, Mr. Regan has served as Managing Director and Chief Financial Officer of Spectrum Equity Management, a growth equity firm investing in companies operating in the information economy. Prior to joining Spectrum, Mr. Regan served as Senior Vice President and Chief Financial Officer of Shutterfly, Inc., a manufacturer and digital retailer of personalized products and services, from August 2012 to November 2015. Prior to joining Shutterfly, Mr. Regan served as Chief Financial Officer of Wize Commerce/Nextag, a global digital marketing and e-commerce company, from July 2010 to August 2012, and as EVP and Chief Financial Officer of Ticketmaster Entertainment, a live entertainment ticketing and artist management company, from June 2008 to July 2010. Mr. Regan has also held finance leadership positions at Expedia, Inc. and LendingTree. Mr. Regan began his career at PricewaterhouseCoopers and he holds a B.S. in Business Administration and Accounting from Bucknell University.
We believe that Mr. Regan is qualified to serve as a member of our board because of his more than 20 years of finance experience at several Internet-based companies. We believe that his extensive financial and accounting experience with public and private companies, combined with his broad experience with Internet-based companies, makes him a valuable contributor and resource to our Board and its committees.
The terms for Mr. Hawkins and Mr. Reagan will expire at our 2020 annual meeting of stockholders.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THETwo ABOVE DIRECTOR NOMINEES.
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our Board has selected PricewaterhouseCoopersDeloitte & Touche LLP ("PricewaterhouseCoopers"(“Deloitte”), as our independent registered public accounting firm for the year ending December 31, 2016,2020, and has further directed that management submit the selection of PricewaterhouseCoopersDeloitte as our independent registered public accounting firm for ratification by the stockholders at the annual meeting. Deloitte has served in this role since 2018. A representative of PricewaterhouseCoopersDeloitte is expected to be present at the annual meeting, will have an opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions.
PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) audited our consolidated financial statements for the fiscal years ended 2008 through 2017 and served as our independent registered public accounting firm until March 2018.
Stockholder ratification of the selection of PricewaterhouseCoopersDeloitte as our independent registered public accounting firm is not required by our bylaws or other applicable legal requirements. However, the Board is submitting the selection of PricewaterhouseCoopersDeloitte to our stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the appointment, the audit committee will reconsider whether or not to retain that firm. Even if the appointment is ratified, the audit committee in its discretion may direct the appointment of a different independent accounting firm at any time during the year if the audit committee determines that such a change would be in our and our stockholders'stockholders’ best interests.
Principal Accounting Fees and Services
for fiscal 2019 and 2018
The following table presents fees billed to us by PricewaterhouseCoopers for audit, audit-related, tax and other services duringrendered to us by Deloittee for the fiscal years ended December 31, 20152019 and 2014:2018:
Type of Fees | Fiscal 2015 | Fiscal 2014 | Fiscal 2019 | Fiscal 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Audit Fees | $ | 1,500,000 | $ | 3,187,000 | Audit Fees | $863,800 | $844,000 | |||||
Audit-Related Fees | — | 650,000 | Audit-Related Fees | $7,510 | — | |||||||
Tax Fees | 156,000 | 299,000 | Tax Fees | — | — | |||||||
All Other Fees | 1,800 | 1,800 | All Other Fees | — | — | |||||||
| | | | | | | | ||||||
Total | $ | 1,657,800 | $ | 4,137,800 | Total | $871,310 | $844,000 | |||||
Prior to the change of our independent registered public accounting firm to Deloitte in March 2018, we were represented by PricewaterhouseCoopers. The following table presents fees for audit, tax and other services rendered to us by PricewaterhouseCoopers for the fiscal years ended December 31, 2019 and 2018:
| Type of Fees | Fiscal 2019 | Fiscal 2018 | |||
| Audit Fees | — | $48,000 | |||
| Audit-Related Fees | $6,700 | — | |||
| Tax Fees | — | — | |||
| All Other Fees | — | — | |||
| Total | $6,700 | $48,000 | |||
Audit Fees
This category includes fees for (i) the integrated audit of our consolidated financial statements and internal control over financial reporting pursuant to the requirements of the Sarbanes-Oxley Act of 2002, (ii) reviews of each of the quarterly consolidated financial information included in our Quarterly Reports on Form 10-Q, and (iii) audit services that are normally provided by Deloitte and PricewaterhouseCoopers, as applicable, in connection with statutory or regulatory filings.
Audit-Related Audit Fees
This category for fiscal year 2018 also includes fees associatedservices rendered in connection with PricewaterhouseCoopers' auditour public offering of equity in February 2018 such as comfort letters and review of carve-out financial statements for Rightside Group, Ltd. ("Rightside") in connectiondocuments filed with the spin-offSEC. The Audit Committee considered whether the provision of our domain namethe foregoing services business in the year ended December 31, 2014.
Tax Feesby Deloitte was compatible with maintaining Deloitte’s independence and determined that they were compatible.
Audit-Related Fees
This category includes fees for tax compliance, tax adviceassurance and tax planning.related services that are reasonably related to the performance of the audit or review of our financial statements and are not included in the fees reported in the table above under “Audit Fees.” The services for the fees disclosed under this category primarily include services rendered in connection with the issuance of a consent related to our registration statements on Form S-8 by Deloitte and PricewaterhouseCoopers, as applicable.
All Other FeesIndependent Public Accounting Firm
This category includes fees associated
As previously reported in our Current Report on Form 8-K, dated March 22, 2018 (the “Current Report”), the audit committee, with the assistance of the Company’s management team, conducted a competitive auditor review in order to select the firm to serve as our accessindependent registered public accounting firm for the fiscal year ending December 31, 2018. The audit committee invited several firms to PricewaterhouseCoopers' online research tool.participate in this review process. As a result of this process, the audit committee made the decision to dismiss PricewaterhouseCoopers as its independent registered public accounting firm on March 22, 2018, and informed PricewaterhouseCoopers that they were dismissed on March 23, 2018.
PricewaterhouseCoopers’ audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2017 and 2016 did not contain any adverse opinions or disclaimers of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. The audit reports of PricewaterhouseCoopers on the effectiveness of internal control over financial reporting as of December 31, 2017 and 2016 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
During the fiscal year ended December 31, 2017 and the subsequent interim period through March 23, 2018, there were (i) no disagreements between the Company and PricewaterhouseCoopers on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers, would have caused PricewaterhouseCoopers to make reference to the subject matter of the disagreement in their reports on the Company’s consolidated financial statements for such year and subsequent interim period, and (ii) no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
We provided PricewaterhouseCoopers with a copy of the disclosures made in the Current Report prior to the time the Current Report was filed with the Securities and Exchange Commission (“SEC”). We requested that PricewaterhouseCoopers furnish a letter addressed to the SEC stating whether or not it agrees with the statements made therein. A copy of PricewaterhouseCoopers’s letter, dated March 28, 2018, was attached as Exhibit 16.1 to the Current Report and confirmed that they agreed with the statements we made in the Current Report.
On March 22, 2018, the audit committee approved the appointment of Deloitte as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2018. During the fiscal years ended December 31, 2018 and 2017, neither the Company nor anyone acting on its behalf has consulted with Deloitte on any of the matters or events set forth in Item 304(a)(2)(i) or 304(a)(2)(ii) of Regulation S-K.
Pre-Approval Policies and Procedures
Our audit committee pre-approves all audit and non-audit services provided by our independent registered public accounting firm. This policy is set forth in our audit committee'scommittee’s charter, which is available athttp://ir.demandmedia.com/ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx.
Our
During fiscal years 2019 and 2018, all services performed by Deloitte for our benefit were pre-approved by the audit committee considered whetherin accordance with its charter and all applicable laws, rules, and regulations.
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THEBOARDUNANIMOUSLYRECOMMENDS AVOTE “FOR” THERATIFICATION OF THEAPPOINTMENT OFDELOITTE &TOUCHELLPASOURINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRMFOR THEFISCALYEARENDINGDECEMBER 31, 2020.
NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION
(“SAY-ON-PAY” VOTE)
As required by the non-auditSEC’s proxy rules, we are asking our stockholders to provide advisory, non-binding approval of the compensation of our named executive officers for fiscal 2019, which is described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this proxy statement. Our executive compensation programs are designed to enable us to attract, motivate and retain executive talent, which is critical to our success. These programs link compensation to the achievement of financial performance, operational and strategic objectives, including executing against our business transformation, together with individual performance objectives, while providing long-term incentive compensation that focuses our executives’ efforts on building stockholder value by aligning their interests with those of our stockholders. Following is a summary of some of the key practices under our executive compensation program. We urge our stockholders to review the “Compensation Discussion and Analysis” section of this proxy statement and the executive-related compensation tables in the “Executive Compensation” section of this proxy statement for additional information.
We balance pay-for-performance with fixed compensation. We tie a significant portion of our named executive officers’ compensation opportunity to the attainment of Company and individual performance goals, thus ensuring that these officers are paid primarily for performance. In addition to equity awards that provide value based on Company performance, we offer discretionary annual cash bonuses to our named executive officers that are determined and paid based on both individual performance and the performance of the Company for the fiscal year to which such discretionary cash bonus relates.
Our compensation programs are strongly aligned with the long-term interests of our stockholders. We place a strong emphasis on the use of equity awards as a key component of our compensation program. While our annual discretionary cash bonuses are important in incentivizing the attainment of near-term goals and objectives and keeping our executives focused on executing against our business transformation, our compensation program places a stronger emphasis on multi-year equity awards in order to focus our executives on long-term, sustained performance for our stockholders. In addition, by linking compensation value to stockholder value, these awards generally require continued service over a multi-year period as a condition to vesting and realizing the full value from such awards.
We have historically used a mix of restricted stock units (“RSUs”) and stock options to balance our equity compensation program between awards that confer full stock ownership value and those that confer value only with future appreciation. After August 2016, we have not granted stock options to our executives due to the volatility in our stock price, driven in part by our small market capitalization and low trading volume. In addition, use of RSUs minimizes dilution given that in order to grant the same fair value in stock options as the Company grants RSUs, the Company would need to grant approximately double the number of stock options. Options and RSUs are subject to vesting and generally linked to service with the Company, which incentivizes our named executive officers to remain employed with us and focus on long-term stockholder value over short term objectives. We believe that grants of equity awards are better aligned with longer-term stockholder returns, while enabling us to keep salaries at a lower, but still competitive level, thereby directly linking the most substantial component of our named executive officers’ compensation to the long-term success of the Company.
We engage in good governance practices regarding our executive compensation program. As part of our commitment to strong corporate governance and best practices, with regard to our executive compensation program, our compensation committee engaged and received advice from an independent, third-party compensation consultant, Semler Brossy Consulting Group (“Semler”) with respect to fiscal years 2019 and 2020. Semler did not provide us services renderedother than those provided directly to, or on behalf of, the compensation committee.
We actively review, monitor and adjust our executive compensation program to ensure that we provide competitive pay opportunities that are market-appropriate. Our compensation committee consistently reviews our executive compensation program to ensure that it provides competitive pay opportunities to help attract and retain the highly qualified and dedicated executive talent that is essential to our rapidly evolving and fast-paced business. In connection with this review, our compensation committee obtained and utilized empirical data (including peer group pay practices) and compensation policy advice from Semler with respect to fiscal years 2019 and 2020 to ensure that our compensation programs are competitive and market-appropriate. Our compensation committee also employs its significant collective experience in administering executive compensation programs for Internet and technology companies.
Our severance and change in control arrangements offer appropriate protections while avoiding potential windfalls. We believe that the severance protections we provide to our executive officers are well within market norms, and that the “double trigger” change in control benefits we provide to our executive officers (other than Mr. Moriarty), which require a qualifying termination of employment in connection with a change in control of the Company as a condition to receipt of any change in control severance
payments or equity vesting acceleration, properly incentivize our executives by PricewaterhouseCoopersproviding appropriate protections against involuntary job loss in the event we are acquired, while avoiding potential “single trigger” windfalls in connection with these types of transactions. With respect to Mr. Moriarty, his employment agreement provides that he is entitled to acceleration of vesting of certain of his equity awards even if he remains employed through a change in control. We believed that this was appropriate in light of the operational challenges faced by the Company at the time Mr. Moriarty was hired and at the time we entered into his amended and restated employment agreement, and we wanted to ensure that Mr. Moriarty was sufficiently compensated in the event a strategic transaction was in the best interest of the Company and its stockholders, as a significant portion of his compensation was in the form of equity awards. Moreover, our executives are not entitled to any excise tax gross-ups on change in control payments. In February 2019, the severance arrangements for Messrs. Reigersman and Pike were compatiblemodified. See “Executive Compensation—Potential Payments Upon Termination or Change in Control.”
Our Board believes that the information provided above and within the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this proxy statement demonstrates that our executive compensation program was designed appropriately and is working to ensure that management’s interests are aligned with maintaining PricewaterhouseCoopers' independenceour stockholders’ interests to support long-term value creation.
The following say-on-pay resolution is submitted for a stockholder vote at the annual meeting:
“RESOLVED, that the stockholders of Leaf Group Ltd. hereby approve, on a non-binding advisory basis, the compensation of Leaf Group Ltd.’s named executive officers as our independent registered public accounting firmdisclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC, which disclosure includes the Compensation Discussion and concluded they were.
Board Recommendation
Analysis, the compensation tables and the related narrative discussion.”
As a non-binding advisory vote, this proposal is not binding on the Company, the Board or the compensation committee. However, the compensation committee and the Board value the opinions expressed by stockholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding named executive officers.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION“FOR” ADOPTION OF THE APPOINTMENTSAY-ON-PAY RESOLUTION APPROVING, ON A NON-BINDING ADVISORY BASIS, THE COMPENSATION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMNAMED EXECUTIVE OFFICERS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.2019.
Our Board has adopted corporate governance guidelines to set forth a framework for its overall governance practices. These guidelines can be found in the corporate governance section of our investor relations website athttp://ir.demandmedia.com/ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx.In addition, these guidelines are available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Demand Media, Inc.Leaf Group Ltd., 1655 26th26th Street, Santa Monica, California 90404.
Our Board does not have a policy on whether the role of the chairman and chief executive officer should be separate and, if it is to be separate, whether the chairman should be selected from the independent directors. Until October 2013, the roles of the chairman and chief executive officer were combined and James R. Quandt, a non-employee independent director, served as theour lead independent director. Following the resignation of our former chairman and chief executive officer in October 2013, our Board designated Mr. Quandt to serve as the non-executive Chairman of the Board. Mr. Quandt has served on our Board since 2008, including serving as the lead independent director from April 2011 to October 2013, and he has gained a deep understanding of our business and industrythe industries in which we operate over that time, in addition to the knowledge and experience he brings from serving on the boards of various public and private companies in the Internet and technology sectors. Our Board believes that the current Board leadership structure is best for our Company and our stockholders at this time, and decided that Mr. Quandt should continue to remainserve as our non-executive Chairman of the Board after Sean Moriarty was hired as our chief executive officer in August 2014. In the future, our Board may decide to combine the roles of chairman and chief executive officer again. If that were to occur, we believe that our corporate governance policies and practices would ensure sufficient oversight of our business and senior management by experienced independent directors and minimize any potential conflicts that could result from combining the positions of chairman and chief executive officer.Board.
Our Board is currently comprised of sixnine independent members and one non-independent member. A number of our Board members have served as directors of other public companies and some have served as members of senior management of other public companies. We have threefour standing Board committees comprised solely of directors who are considered independent under all applicable NYSE listing standards. We believe that the number of independent, experienced directors that make up our Board benefits our Company and our stockholders.
Our Board is primarily responsible for overseeing our risk management processes. Our Board, as a whole, determines the appropriate level of risk for our Company, assesses the specific risks that we face and reviews management'smanagement’s strategies for adequately mitigating and managing the identified risks. Although our Board administers this risk management oversight function, our audit committee, nominating and corporate governance committee and compensation committee support our Board in discharging its oversight duties and address risks inherent in their respective areas. We believe this division of responsibilities is an effective approach for addressing the risks we face and that our Board leadership structure supports this approach. In particular, the audit committee is responsible for considering and discussing our significant accounting and financial risk exposures and the actions management has taken to control and monitor these exposures, and the nominating and corporate governance committee is responsible for considering and discussing our significant corporate governance risk exposures and the actions management has taken to control and monitor these exposures. As needed and when requested, the audit committee and the nominating and corporate governance committee receive reports from management regarding an assessment of such risks. The compensation committee, with input from our management,its independent compensation consultant, assists our Board in reviewing and
assessing whether any of our compensation policies and programs could potentially encourage excessive risk-taking. In considering our employee compensation policies and practices, the compensation committee annually reviews our policies related to payment of salaries and wages, commissions, benefits, bonuses, stock-based compensation and other compensation-related practices and considers the relationship between risk management policies and practices, corporate strategy and compensation. Based on this review, the compensation committee has concluded that our employee compensation policies and practices, including executive compensation, do not encourage risk taking to a degree that is likely to have a materially adverse impact on us or our operations.
While the Board oversees our risk management, companyour management is responsible for day-to-day risk management processes. Our Board expects company management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the audit committee and the Board.
Our Board has determined that the nominees for re-electionelection to the Board at the annual meeting and all continuing directors, except for Mr. Moriarty, are independent under the NYSE listing standards and Demand Media'sLeaf Group’s corporate governance guidelines. The Board also determined that (i) Joshua James, who served as a director and a member of the audit and compensation committees through February 2, 2015, (ii) Gaurav Bhandari, who served as a director through February 20, 2015 and (iii) Peter Guber, who served as a director and member of the nominating and corporate governance committee through August 13, 2015, were each independent under all applicable standards. In making these determinations, the Board considered all relationships between us and each director and each director'sdirector’s family members. With respect toThe Board also considered that Mr. Bhandari, the Board specifically considered his employment asRegan serves in a Managing Directormanagement capacity at Goldman, Sachs & Co., to which the Company had previously paid investment banking fees, commitment fees and interest,Spectrum Equity and concluded that this relationship would not impede the exercise of independent judgment by Mr. Bhandari. The Board also considered the fact that Messrs. Quandt and Harman both serve on the board of directors of The FRS Company and concluded that this relationship would not impede theirhis exercise of independent judgment.
Our
During 2019, our Board held eight19 in-person or telephonic meetings and acted by written consent one time during 2015. During 2015, eachmeetings. Each Board member attended 75% or more of the aggregate meetings of the Board and of the committees on which he or she served whichand that were held during the period of time that he or she served, other than Mr. Guber,except for Ms. Benton, who resigned from his position on the Board in August 2015 when he also resigned from allattended 74% of his other public company board commitments.such meetings. Except in unusual circumstances, Mr. Moriarty and the Chairman of the Board, or histheir respective designee, in consultation with our Chief Executive Officer, determinescollectively determine the order of business and the procedure at each meeting, including the regulation of the manner of voting and the conduct of business. During regularly convened quarterly boardBoard meetings, the Board usually spends a portion of such meetings in executive session without management or other employees present.
We encourage all of our directors and nominees for director to attend our annual meeting of stockholders; however, attendance is not mandatory. Two directors, our non-executive Chairman of the Board and our Chief Executive Officer, attended our annual meeting of stockholders in 2015.2019.
Our Board maintains a standing audit committee, nominating and corporate governance committee, compensation committee and compensationstrategic review committee. Each committee operates under a written charter that satisfies the applicable standards of the SEC and the NYSE. The charter of each of these committees is available on the investor relations page of our website athttp://ir.demandmedia.com/ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx. In addition, the charters for each of our committees are available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Demand Media, Inc.Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404. The membership of all of our standing Board committees as of the record date is as follows:
Director | Audit | Nominating and Governance | Compensation | Strategic Review | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |||||||||||||||
| |||||||||||||||
| |||||||||||||||
Beverly K. Carmichael | M | ||||||||||||||
| John A. Hawkins | M | ||||||||||||||
| John Pleasants | M | ||||||||||||||
| James R. Quandt | M | M | |||||||||||||
| Brian M. Regan | C | ||||||||||||||
Jennifer Schulz | M | M | |||||||||||||
| Mitchell Stern | C | M | |||||||||||||
| “C” | Chairperson |
| “M” | Member |
Audit Committee
We have an audit committee that has responsibility for, among other things, overseeing management'smanagement’s maintenance of the reliability and integrity of our accounting policies and financial reporting and our disclosure practices; overseeing management'smanagement’s establishment and maintenance of processes to assure that an adequate system of internal control is functioning; reviewing our annual and quarterly financial statements; appointing and evaluating our independent registered public accounting firm and considering and approving any non-audit services proposed to be performed by thesuch independent accountants; and discussing with management and our Board our policies with respect to risk assessment and risk management, as well as our significant financial risk exposures and the actions management has taken to limit, monitor or control such exposures, if any.
The audit committee met in person or telephonically eightsix times during 2015.calendar 2019.
The current members of our audit committee are Messrs. Hawkins, Quandt and Stern and Ms. Schulz, with Mr. Stern serving as the committee'scommittee’s chair since February 2016.2016, when he joined the Board. All members of our audit committee meet the requirements for financial literacy, and each of the members meets the requirements for independence, under Rule 10A-3 promulgated under the Exchange Act, and the applicable rules and regulations of the NYSE. Our Board has also determined that Mr.each of Messrs. Stern and Mr. Quandt are eachis an audit committee "financial“financial expert,"” as that term is defined by the applicable rules of the SEC, and has the requisite financial sophistication as defined under the applicable rules and regulations of the NYSE.
Nominating and Corporate Governance Committee
We have a nominating and corporate governance committee that has responsibility for, among other things, recommending persons to be selected by our Board as nominees for election as directors and to fill any vacancies on our Board; considering and
recommending to our Board qualifications for the position of director and policies concerning the term of office of directors and the composition of our Board; and considering and recommending to our Board other actions relating to corporate governance. The nominating and corporate governance committee met in person or telephonically four
times during 2015. The members of our nominating and corporate governance committee are Messrs. Harman, Hawkins and Regan and Ms. Schulz, with Mr. Regan serving as the committee'scommittee’s chair since February 2016. All members of our nominating and corporate governance committee meet the independence requirements of the NYSE. When recommending persons to be selected by the Board as nominees for election as directors, the nominating and corporate governance committee considers such factors as the individual'sindividual’s personal and professional integrity, ethics and values,values; experience in corporate management,management; experience in the Company's industry,Company’s industry; experience as a Board member of anotherother publicly held company,companies; academic expertise in an area of the Company's operationsCompany’s operations; and practical and maturethoughtful business judgment. In addition, the nominating and corporate governance committee considers diversity of relevant experience, expertise and background and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race and national origin, in identifying nominees for directors. When formulating its Board membership recommendations, the nominating and corporate governance committee will also consider any advice and recommendations offered by our Chief Executive Officer or our stockholders. The nominating and corporate governance committee may delegate any or all of its responsibilities to a subcommittee, but only to the extent consistent with the Company'sCompany’s certificate of incorporation, bylaws, corporate governance guidelines, NYSE rules and other applicable law.
The nominating and corporate governance committee will consider director candidates recommended by stockholders. For a stockholder to make any nomination for election to the Board at an annual meeting, the stockholder must provide notice, which notice must be delivered to,met in person or mailed and received at, our principal executive offices not less than 90 days and not more than 120 days prior to the one-year anniversary of the preceding year's annual meeting; provided, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, the stockholder's notice must be delivered, or mailed and received, not earlier than the 120th and not later than the 90th day prior to the date of the annual meeting or, if later, the 10th day following the date on which public disclosure of the date of such annual meeting is made. Further updates and supplements to such notice may be required at the times and in the forms required under our bylaws. As set forth in our bylaws, submissions must include, among other things, the name and address of the proposed nominee; the class or series and number of shares of the Company that are, directly or indirectly, owned of record or beneficially owned by such proposed nominee; information regarding the proposed nominee that is required to be disclosed in a proxy statement or other filings in a contested election pursuant to Section 14(a) under the Exchange Act; a description of all direct and indirect compensation and other material monetary agreementstelephonically one time during the past three years between the nominating person and the proposed nominee; and a completed and signed questionnaire, representation and agreement of the proposed nominee. Our bylaws also specify further requirements as to the form and content of a stockholder's notice. We recommend that any stockholder wishing to make a nomination for director review a copy of our bylaws, as amended and restated to date, which is available, without charge, from our Corporate Secretary, at 1655 26th Street, Santa Monica, California 90404.2019.
The nominating and corporate governance committee did not receive any director recommendations from a stockholder for consideration at the 2016 annual meeting.
Compensation Committee
We have a compensation committee that has responsibility for, among other things, reviewing management and employee compensation policies, plans and programs; monitoring performance and compensation of our executive officers and other key employees; preparing recommendations and periodic reports to our Board concerning these matters; and administering our equity incentive plans.
The compensation committee met in person or telephonically eightfive times during 20152019 and acted by written consent one timetwice during 2015. 2019.
The members of our compensation committee are Messrs. Harman, QuandtPleasants, Regan and Regan,Stern, with Mr. HarmanRegan serving as the committee'scommittee’s chair. Our Board has determined that each of Messrs. Harman, QuandtPleasants, Regan and ReganStern is independent and a non-employee
director under all applicable rules and regulations of the SEC, the NYSE and the Internal Revenue Code. Code of 1986, as amended (the “Code”).
The compensation committee has the ability to delegate certain of its responsibilities to subcommittees in accordance with the Company'sCompany’s certificate of incorporation, bylaws, Section 162(m) of the Internal Revenue Code as applicable, NYSE rules and other applicable law.law, but has not currently authorized any such delegations.
Strategic Review Committee
In April 2019 we formed a strategic review committee that has responsibility for, among other things, leading the comprehensive review of strategic alternatives we publicly announced in April 2019.
The strategic review committee met in person or telephonically 11 times during 2019 and certain other members of the Board also joined some of these meetings. The members of our strategic review committee are Messrs. Baker and Quandt and Ms. Carmichael, with Mr. Baker serving as the committee’s chair.
Compensation Committee Interlocks and Insider Participation
Messrs. Harman, James, QuandtPleasants, Regan and Regan allStern served as members of the Compensation Committeecompensation committee during fiscal 2015. Mr. Regan replaced Mr. James on the Compensation Committee in February 2015.2019. No interlocking relationships exist, or at any time during fiscal 20152019 existed, between any member of our Board of Directors or Compensation Committeecompensation committee and any member of the board of directors or compensation committee of any other company. No member of the Compensation Committeecompensation committee is or has been an officer or an employee of Demand MediaLeaf Group or its subsidiaries.
Interested persons, including stockholders, may communicate with our Board by sending a letter to our Corporate Secretary at our principal executive offices at 1655 26th Street, Santa Monica, California 90404. Our Corporate Secretary will submit all correspondence to the chairmanChairman of the Board or to the lead independent director (if applicable), or to any specific director to whom the correspondence is directed.
Code of Business Conduct and Ethics
Our Board has adopted a code of business conduct and ethics that applies to all of our employees, executive officers and directors. Our code of business conduct and ethics can be found in the corporate governance section on the investor relations page of our website athttp://ir.demandmedia.com/ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx. In addition, our code of business conduct and ethics is available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Demand Media, Inc.Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404.
The following table sets forth information concerning the compensation earned by or paid to each of our non-employee directors during the year ended December 31, 2015. Sean Moriarty is a named executive officer and all of his compensation is presented below in the Summary Compensation Table and related explanatory information and tables under "Executive Compensation." Mr. Moriarty is not entitled to additional compensation for serving as a director while he is employed by the Company. Directors affiliated with Spectrum Equity Investors, Oak Investment Partners, Generation Partners and, in the past, Goldman Sachs do not, or did not, receive any compensation for their services as directors. Mitchell Stern joined our Board of Directors in February 2016 and therefore is not included in the below table.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Options Awards ($)(1) | Total($) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gaurav Bhandari(2) | — | — | — | — | |||||||||
Peter Guber(3) | 23,539 | 37,499 | 37,654 | 98,692 | |||||||||
Fredric W. Harman | — | — | — | — | |||||||||
John A. Hawkins | — | — | — | — | |||||||||
Joshua G. James(4) | 3,583 | — | — | 3,583 | |||||||||
Victor E. Parker | — | — | — | — | |||||||||
James R. Quandt(5) | 133,583 | 37,499 | 37,654 | 208,736 | |||||||||
Brian M. Regan(6) | 38,611 | 75,001 | 74,594 | 188,206 | |||||||||
Narrative Disclosure to Director Compensation Table
Outside Directors Compensation Program
The Company has a compensation program (the "outside director compensation program"“Outside Director Compensation Program”) for non-employee directors who are not affiliated with Spectrum Equity Investors, Oak Investment Partners, Generation Partners or, prior to and during fiscal 2015, Goldman Sachs, or any of their affiliated entities (the "outside directors"“Outside Directors”). The outside director compensation program was established in 2010 and has been subsequently amended in 2012, May 2015 and February 2016. The outside director compensation programOutside Director Compensation Program is intended to fairly compensate each outside directorOutside Director with cash and equity compensation for the time and effort necessary to serve as a member of our Board, and to better align the interests of our Board members with the interest of our stockholders. Since the establishment of the Outside Director Compensation Program in 2010, non-employee directors who were affiliated with Oak Investment Partners, Spectrum Equity Management or Generation Partners, or any of their respective affiliated entities, were not compensated under the Outside Director Compensation Program. Beginning in the fourth quarter of 2018, Messrs. Hawkins and Regan, our current directors who are affiliated with Generation Partners and Spectrum Equity Management, respectively, have been compensated under such program.
Cash compensation. Under the outside director compensation program,Outside Director Compensation Program, each outside directorOutside Director is currently entitled to receive an annual cash retainer of $50,000 for serving on the Board, payable in quarterly installments in arrears in conjunction with quarterly meetings of our Board. In addition, each outside directorOutside Director that serves as the chair of the audit committee, compensation committee, or nominating and corporate governance committee or strategic review committee is entitled to receive an additional annual cash retainer of $25,000, $15,000, and $10,000 or $25,000, respectively. Outside directorsDirectors that serve as non-chair members of the audit committee, compensation committee, or nominating and corporate governance committee or strategic review committee are entitled to receive additional annual cash retainers of $12,500, $7,500, or $5,000, respectively. Prior to the February 2016 amendment of the outside director compensation program, and for all of fiscal 2015, each outside director was entitled to receive an annual cash retainer of $30,000 for serving on the Board; each outside director that served as the chair of the audit committee, compensation committee or nominating and corporate governance committee was entitled to receive an additional annual cash retainer of $15,000, $10,000 and $8,000, respectively; and each outside director that served as a non-chair member of the audit committee, compensation committee or nominating and corporate governance committee was entitled to receive an additional annual cash retainer of $8,000, $5,000 or $4,000,$12,500, respectively. In addition to cash compensation received for serving as an outside director,Outside Director, the non-executive Chairman of the Board is currently entitled to receive an annual cash retainer of $100,000. Prior to February 2016, the non-executive Chairman of the Board was entitled to receive an annual cash retainer of $90,000 as compensation for serving as the non-executive Chairman of the Board.
Equity compensation. Pursuant to the Board's outside director compensation program,Board’s Outside Director Compensation Program, each outside directorOutside Director is entitled to receive an initial one-time equity grant with an aggregate grant date fair value of approximately $150,000 upon the outside director'sOutside Director’s initial election to the Board (the "Initial Grant"“Initial Grant”). The Initial Grant shall consistconsists of (i) a restricted stock unitan RSU award with a grant date fair value of approximately $75,000; and (ii) a non-qualified stock option award with a grant date fair value of approximately $75,000 and ana per share exercise price equal to the closing price of a share of our common stock on the grant date, each of which vests in substantially equal annual installments over three years, subject to continued Board service through theeach applicable vesting date. In addition to the Initial Grants,Grant, on the date of each annual stockholder meeting, any outside directorOutside Director who will continue in service following such meeting (excluding any outside directorOutside Director that already received an Initial Grant in the same calendar year)year prior to the date of the annual stockholder meeting) is entitled to receive an annual equity award granted as of the close of business on the date of such annual stockholder meeting (the "Annual Grant"“Annual Grant”) with an aggregate grant date fair value of approximately $75,000. The Annual Grant shall consistconsists of (i) a restricted stock unitan RSU award with a grant date fair value of approximately $37,500; and (ii) a non-qualified stock option award with a grant date fair value of approximately $37,500 and ana per share exercise price equal to the closing price of a share of our common stock on the grant date; each of which vests in substantially equal annual installments over three years, subject to continued Board service through theeach applicable vesting date. Additionally, as of February 2016, if the Board has a non-executive chairman,Chairman, the non-executive chairmanChairman is entitled to an additional annual restricted stock unitRSU award with a grant date fair value of approximately $50,000, which vests in substantially equal annual installments over two years, (the "Non-Executive Chairman Grant"). For purposes of fiscal 2016, the Non-Executive Chairman Grant wassubject to continued Board service through each applicable vesting date, and is automatically granted to our non-executive Chairman of the Board as of the approval dateclose of business on the revised outside director compensation program in February 2016.first business day of such calendar year.
All
The vesting of all equity grants to outside directorsOutside Directors automatically accelerate and vest in full if an outside directorOutside Director ceases to be an outside directorOutside Director due to his death or disability, or if an outside directorOutside Director stands for re-electionelection but is not re-electedelected to the Board, or upon a change“change of controlcontrol” (as such term is defined in our Amended and Restated 2010 Incentive Award Plan)Plan (the “2010 Plan”)).
Rightside Spin-Off
In August 2014, we completedThe following table sets forth information concerning the separation of Rightside, our domain name services business (the "Rightside Spin-Off"). Immediately following the Rightside Spin-Off, we effected a 1-for-5 reverse stock split of all outstanding sharescompensation earned by or paid to each of our common stock, including shares heldnon-employee directors during the year ended December 31, 2019. Mr. Moriarty is a named executive officer and all of his compensation is presented below in treasury (the "Reverse Stock Split"). In connection with the Rightside Spin-Off, certain outstanding equity awards heldSummary Compensation Table and related explanatory information and tables under “Executive Compensation.” Mr. Moriarty is not entitled to additional compensation for serving as a director while he is employed by our directors were split into two awards—a Demand Media award and a Rightside award. All equity awards and share numbers in this section reflect adjustments made in connection with the Rightside Spin-Off and Reverse Stock Split.Company.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Total($) | ||||||
| Charles (Lanny) Baker(2) | 47,594 | 75,003 | 74,934 | 197,531 | ||||||
| Deborah A. Benton(3) | 46,237 | 75,002 | 74,988 | 196,228 | ||||||
| Beverly K. Carmichael(4) | 55,880 | 37,500 | 37,476 | 130,857 | ||||||
| John A. Hawkins(5) | 55,000 | 37,500 | 37,476 | 129,976 | ||||||
| John Pleasants(6) | 57,500 | 37,500 | 37,476 | 132,476 | ||||||
| James R. Quandt(7) | 168,380 | 87,499 | 37,476 | 293,355 | ||||||
| Brian M. Regan(8) | 75,000 | 37,476 | 37,476 | 149,952 | ||||||
| Jennifer Schulz(9) | 67,500 | 37,500 | 37,476 | 142,476 | ||||||
| Mitchell Stern(10) | 82,500 | 37,500 | 37,476 | 157,476 | ||||||
| (1) | Amounts reflect the aggregate grant date fair value of RSUs or stock options, as applicable, granted during fiscal 2019, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the director. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. Information regarding the assumptions used to calculate the value of all such awards made to directors is provided in Note 13 to our audited consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 16, 2020. There can be no assurance that awards will vest (and if the awards do not vest, no value will be realized by the director), or that the value upon vesting, settlement or exercise, as applicable, will approximate the aggregate grant date fair value determined under ASC Topic 718. |
| (2) | Cash fees earned by Mr. Baker in 2019 consist of: (a) $35,833 for serving as an Outside Director on the Board from April 13, 2019 through December 31, 2019 and (b) $11,761 for serving as chair of the strategic review committee from July 12, 2019 through December 31, 2019. As of December 31, 2019, Mr. Baker held (i) 8,562 RSUs and (ii) 19,419 stock options. |
| (3) | Cash fees earned by Ms. Benton in 2019 consist of $46,237 for serving as an Outside Director on the Board from January 29, 2019 through December 31, 2019. As of December 31, 2019, Ms. Benton held (i) 9,987 RSUs and (ii) 22,228 stock options. |
| (4) | Cash fees earned by Ms. Carmichael in 2019 consist of: (a) $50,000 for serving as an Outside Director on the Board and (b) $5,880 for serving as a non-chair member of the strategic review committee from July 12, 2019 through December 31, 2019. As of December 31, 2019, Ms. Carmichael held (i) 7,891 RSUs and (ii) 25,606 stock options. |
| (5) | Cash fees earned by Mr. Hawkins in 2019 consist of: (a) $50,000 for serving as an Outside Director on the Board and (b) $5,000 for serving as a non-chair member of the nominating and corporate governance committee. As of December 31, 2019, Mr. Hawkins held (i) 4,085 RSUs and (ii) 11,138 stock options. |
| (6) | Cash fees earned by Mr. Pleasants in 2019 consist of: (a) $50,000 for serving as an Outside Director on the Board and (b) $7,500 for serving as a non-chair member of the compensation committee. As of December 31, 2019, Mr. Pleasants held (i) 6,743 RSUs and (ii) 56,243 stock options. |
| (7) | Cash fees earned by Mr. Quandt in 2019 consist of: (a) $100,000 for serving as the non-executive Chairman of the Board; (b) $50,000 for serving as an Outside Director on the Board; (c) $12,500 for serving as a non-chair member of the audit committee; and (d) $5,880 for serving as a non-chair member of the strategic review committee from July 12, 2019 through December 31, 2019. As non-executive Chairman of the Board, Mr. Quandt also received an annual RSU award with a grant date fair value of approximately $50,000. As of December 31, 2019, Mr. Quandt held (i) 13,537 RSUs and (ii) 55,211 stock options. |
| (8) | Cash fees earned by Mr. Regan in 2019 consist of: (a) $50,000 for serving as an Outside Director on the Board; (b) $15,000 for serving as the chair of the compensation committee; and (c) $10,000 for serving as the chair of the nominating and corporate governance committee. As of December 31, 2019, Mr. Regan held (i) 4,085 RSUs and (ii) 39,595 stock options. |
| (9) | Cash fees earned by Ms. Schulz in 2019 consist of: (a) $50,000 for serving as an Outside Director on the Board; (b) $5,000 for serving as a non-chair member of the nominating and corporate governance committee; and (c) $12,500 for serving as a non-chair member of the audit committee. As of December 31, 2019, Ms. Schulz held (i) 6,743 RSUs and (ii) 14,384 stock options. |
| (10) | Cash fees earned by Mr. Stern in 2019 consist of: (a) $50,000 for serving as an Outside Director on the Board; (b) $25,000 for serving as the chair of the audit committee; and (c) $7,500 for serving as a non-chair member of the compensation committee. As of December 31, 2019, Mr. Stern held (i) 6,743 RSUs and (ii) 14,384 stock options. |
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Set forth below is information regarding each of our executive officers as of April 21, 2016.March 31, 2020.
Name | ||||||
|---|---|---|---|---|---|---|
| Position | |||||
| Sean Moriarty | 49 | Chief Executive Officer and Director | ||||
| Chief Financial Officer | |||||
Brian Pike | Chief Operating Officer and Chief Technology Officer | |||||
| Executive Vice President, | |||||
Biographical information for Mr. Moriarty is set forth above under "“Item 1. Election of Directors—Information Regarding the Board of Directors and Director Nominees."”
Rachel GlaserJantoon Reigersman joined Demand MediaLeaf Group in April 2015 and servesDecember 2017 as our Chief Financial Officer. From January 2012 to March 2015, Ms. GlaserMr. Reigersman served as Chief Financial Officer of Move,Ogin Inc. (operator(formerly known as Flo Design Wind Turbine Corp.) from January 2014 until the successful sale of Realtor.com®), an online network of websites for real estate searchits principal technology and home enthusiasts, and Ms. Glaser helped leadintellectual property assets to Vestas Wind Systems in March 2017. Following the sale and Mr. Reigersman’s resignation from Ogin, Ogin filed a Petition for Assignment for the Benefit of Move, Inc. to News Corporation, a diversified mediaCreditors in the Court of Chancery for the State of Delaware, which petition was granted and information services company,entered in November 2014.April 2017. From April 2008 to November 2011, Ms. GlaserSeptember 2010 through December 2013, Mr. Reigersman served as Chief Operating and Financial Officer of MyLife.com, a subscription-based people search business, and from May 2005 to April 2008, sheOgin’s Vice President. From 2007 through 2009, Mr. Reigersman was the Senior Vice President of Finance at Yahoo! Inc., a global internet services provider. Between 1986 and 2005, Ms. Glaser held finance and operations positions of increasing responsibilityan Associate at The Walt Disney Company, a media and entertainment company, and was Vice President of Operations and Business Planning for the Consumer Products group at the time of her departure. From August 2010 to July 2014, Ms. Glaser served on the board of directors of Sport Chalet,Goldman Sachs Group, Inc., a full service specialty retailer, and as a member of its Audit Committeethe European Special Situations Group, a multi strategy on-balance sheet investment group. From 2005 through 2007, Mr. Reigersman was an Analyst at Morgan Stanley Investment Banking, Mergers and Corporate Governance and Nominating Committee. Ms. GlaserAcquisitions. Mr. Reigersman received a bachelor'sB.S. and Master of Science degree at Erasmus University, Rotterdam School of Management and a Master in PsychologyInternational Management from HEC Paris/RSM – CEMS (Community of European Management Schools). In addition, Mr. Reigersman completed the University of California at Berkeley and an M.B.A.General Management Program (GMP15) from the University of Southern California.Harvard Business School.
Brian Pike joined Demand MediaLeaf Group in October 2014 as Chief Technology Officer. In May 2015, Mr. Pike was appointed to also serve as our Chief Operating Officer. From April 2012 to October 2014, Mr. Pike was Chief Technology Officer at The Rubicon Project, Inc., a technology company that automates the buying and selling of digital advertising, where he led the engineering organization through rapid growth and the company'scompany’s initial public offering. Prior to joining Rubicon, Mr. Pike served as Chief Technology Officer at Ticketmaster, a live entertainment ticketing and marketing company, from 2003 to 2010. Mr. Pike received a B.S. in Engineering from Stanford University and an M.B.A. from the Anderson School of Management at UCLA.
Daniel WeinrotAdam Wergeles joined Demand MediaLeaf Group in 2010 and has servedApril 2018 as our Executive Vice President, General Counsel. Prior to joining Leaf Group, Mr. Wergeles served as Executive Vice President, Business and Legal Affairs, and General Counsel since October 2014. In his current role,for Serviz, Inc., a technology company that connects consumers with home service professionals. From December 2007 to March 2015, Mr. Weinrot oversees and manages our legal, risk management and compliance matters. Prior to his current role, Mr. WeinrotWergeles served variously as our Senior Vice President,the Chief Legal from February 2014 to October 2014; Vice President and AssistantOfficer, General Counsel from May 2012 to February 2014; and Vice President, Business & Legal Affairs from June 2010 to May 2012. Prior to joining Demand Media,Secretary at ReachLocal, Inc. Mr. Weinrot held various legal positions at Las Vegas Sands Corp., a global developer of integrated resorts, from 2006 to 2010, including Vice President and Deputy General Counsel from September 2009 to June 2010, and he practiced corporate law at Latham & Watkins LLP, a leading global law firm, from 2000 to 2006. Mr. Weinrot receivedWergeles holds a J.D. from UCLAthe University of Southern California Law School of Law and a B.A. from the University of California at Berkeley.Hamilton College.
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COMPENSATION DISCUSSION AND ANALYSIS
The following compensation discussion and analysis provides an overview of the philosophy, objectives and components of our executive compensation program. In addition, we explain how and why the compensation committee of our Board arrived at specific compensation policies and decisions involving our named executive officers during 2015.
2015 Leadership Changes
Fiscal 2015 continued to be a year of transition for us. In February 2015, we completed the sale of our Pluck social media service offering located in Austin, Texas, and we disposed of several non-core web properties within our Demand Vertical Network media offering through the balance of 2015 in pursuit of our efforts to have greater focus and resources dedicated to our core Media and Marketplaces offerings. During fiscal 2015, several additional leadership changes occurred as we continued to execute on our previously disclosed business transformation:
Our "named executive officers" for 2015 were Mr. Moriarty, Chief Executive Officer; Ms. Glaser, Chief Financial Officer; Mr. Kim, former interim Chief Accounting Officer and former principal financial officer; Mr. Pike, Chief Operating Officer and Chief Technology Officer; Ms. Campistron, former Executive Vice President, Media; and Mr. Weinrot, Executive Vice President, Legal and General Counsel.
Most of the compensation decisions made during 2015 were made in connection with our ongoing business transformation and in light of the need to recruit and retain key members of the executive management team to execute against the transformation.
2015 Compensation Overview
The following table sets forth the key elements of our named executive officers' compensation, along with the primary objective associated with each element of compensation. Our compensation elements are designed to be flexible and complementary, and to collectively serve the overall principles and objectives of our executive compensation program. Our compensation committee generally determines the overall compensation of our named executive officers and its allocation among the
various elements by considering the objectives described below, their collective experience serving as board members and executive management of public and private companies with a focus on compensation matters, the analyses and advice provided by its independent compensation consultant and input from our chief executive officer (other than with respect to himself) and our head of people operations.
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Each of the key components of our executive compensation program, as well as our compensation decisions for our named executive officers in 2015, are discussed in more detail below. The following discussion and analysis of our named executive officers' compensation arrangements should be read together with the compensation tables and related disclosures that follow this section.
Rightside Spin-Off and Reverse Stock Split; Treatment of Equity Awards
In August 2014, we completed the separation of Rightside, our domain name services business, and subsequently effected the 1-for-5 Reverse Stock Split. In connection with the Rightside Spin-Off, certain outstanding equity awards held by certain of our named executive officers were split into two awards—a Demand Media award and a Rightside award. All equity awards and share numbers in this section reflect adjustments made in connection with the Rightside Spin-Off and Reverse Stock Split.
Executive Compensation Philosophy and Objectives
We operate in highly competitive and rapidly evolving industries relating to digital content and media and online marketplaces. Our industries are characterized by rapid technological change, various business models and frequent disruption of incumbents by innovative entrants. To succeed in this environment, we must continuously develop and refine new and existing products and services, devise new business models and demonstrate an ability to quickly identify and capitalize on new or complementary business opportunities, whether through internal development or through corporate development efforts. To achieve these objectives, we need a highly talented and seasoned team of technical, sales, marketing, operations, financial and other business professionals, led by experienced and skilled executives. We recognize that our ability to attract and retain these professionals, including our executive officers, largely depends on how we compensate and reward our employees generally. We strive to create an environment that is responsive to the needs of our employees, including our executive officers, encourages teamwork, rewards commitment as well as individual and team performance, and is open to employee communication and continual performance feedback.
For our executive officers, we have embraced a compensation philosophy of offering competitive compensation and benefits packages focused on long-term value creation that reward our executive officers for achieving certain financial, operational and strategic objectives, while executing on our ongoing business transformation. The principles and objectives of our compensation and benefits program for our executive officers, including our named executive officers, are to:
The current compensation levels of our executive officers, including our named executive officers, primarily reflect the varying roles and responsibilities of each individual, while also factoring in the length of time each executive officer has been employed by the Company. The focus of our current compensation arrangements with our executive officers has generally been to recruit and retain skilled individuals to help us meet our product development, strategic, corporate development, customer acquisition and growth objectives, while continuing to achieve our financial and operational goals in the context of executing on our business transformation.
Roles of Our Compensation Committee and Chief Executive Officer in Compensation Decisions
The compensation committee of our Board is responsible for overseeing our executive compensation program, and part of that is responsibility for determining and approving the ongoing compensation arrangements for our Chief Executive Officer, Chief Financial Officer, and other executive officers, including our named executive officers. The initial compensation arrangements with our executive officers, including our named executive officers, historically have been determined in arm's-length negotiations with each individual executive after considering the role, responsibilities and experience of such executive, together with relevant peer group compensation data provided by the compensation committee's independent compensation consultant from time to time. Our Chief Executive Officer typically has been responsible for negotiating these arrangements for our executive
officers (except with respect to his own compensation) with the oversight and final approval of our compensation committee. The compensation arrangements have been influenced by a variety of factors including the individual's experience and expertise; our financial condition and available resources; our need to fill a particular position; an evaluation of the competitive market for different executive functional roles by third party experts, including the compensation committee's independent compensation consultant; the collective experience of the members of the compensation committee with other similarly situated companies; and the compensation levels of our other executive officers.
In order to determine the compensation for Mr. Moriarty, our Chief Executive Officer, when he was hired in August 2014, the compensation committee considered Mr. Moriarty's prior executive experience, his compensation arrangement at his prior company, Saatchi Art (which we acquired in August 2014), the challenges facing the Company and the responsibilities Mr. Moriarty would be undertaking to address such challenges, including initiating and executing against our business transformation, relevant peer group analysis provided by the compensation committee's independent compensation consultant and input from the executive search firm that we had engaged to find a new Chief Executive Officer following the resignation of our previous Chief Executive Officer in October 2013. Based on these considerations and the direct arm's-length negotiations that the compensation committee had with Mr. Moriarty, the compensation committee set his total compensation, including each individual component of his total compensation.
In determining compensation levels for 2015 with respect to our other named executive officers, the compensation committee reviewed the experience of these named executive officers and their past performance, if they were being promoted from within the organization, and considered relevant peer group compensation data previously provided by the compensation committee's independent compensation consultant. In addition, the compensation committee considered the recommendation of the executive recruiting firm with respect to the initial compensation established for Ms. Glaser when she joined as our Chief Financial Officer in April 2015. The compensation committee also consulted with and considered non-binding recommendations from Mr. Moriarty and the head of our people operations team with respect to the total compensation (including the individual components thereof) paid to our named executive officers, and then set the total compensation, including each individual component of compensation, for these executive officers.
Role of Compensation Consultant
The compensation committee is authorized to retain the services of one or more executive compensation advisors, in its discretion, to assist with the establishment and review of our executive compensation programs and related policies. Since 2010, the compensation committee has engaged Compensia, Inc., a national compensation consulting firm ("Compensia"), to provide executive compensation advisory services in order to help evaluate our compensation philosophy and objectives, to identify and gather information with respect to a defined peer group and to provide guidance in administering our compensation program.
In 2012, Compensia identified a peer group of comparable companies in the internet and technology sectors and prepared a competitive market analysis of our executive compensation program, in order to better understand the competitiveness of the compensation we offer to our executive officers and assist our compensation committee with determining appropriate levels of compensation to be provided to our executive officers. The market data included proxy information for companies in the peer group (where available) as well as data from a proprietary executive compensation survey that covered high-technology companies with annual revenues between $200 million and $500 million. The peer group consisted of the following companies: Ancestry.com, comScore, Constant Contact, DealerTrack Holdings, Dice Holdings, Digital River, Blucora (formerly InfoSpace), j2 Global, Kenexa, NIC, OpenTable, Shutterfly, The Active Network, ValueClick, Web.com Group and WebMD Health.
In December 2013, in connection with our search for a new Chief Executive Officer following the resignation of our founding Chief Executive Officer, Compensia provided a chief executive officer compensation analysis utilizing the same peer group that it utilized for the 2012 competitive market analysis, as well as data from other similarly situated technology companies that recently hired new chief executive officers. For purposes of determining the compensation for our new Chief Executive Officer, the Compensia report was used as a reference point by the compensation committee and considered together with the other factors, including the collective experience of the members of the compensation committee in establishing the compensation for other Internet companies for which they advise, invest in or serve on the board of directors.
In early 2015, Compensia prepared an updated equity utilization analysis for the compensation committee to consider when determining how many shares should be covered by equity awards to be granted to the Company's employees, including its executive officers, throughout fiscal 2015. In late 2015, Compensia prepared an updated analysis of the total compensation of our executive officers and senior management in light of the continued decline in our market capitalization while we continue to execute on our ongoing business transformation. As part of this analysis, Compensia updated the peer group for which to compare our executive compensation in light of (i) the Rightside Spin-Off in August 2014, (ii) the associated decline in annual run rate revenue resulting from the Rightside Spin-Off and the financial impact of operational decisions made in connection with initiating and executing on our business transformation and (iii) the significant decline in our market capitalization over the past four years. The updated peer group consisted of the following companies: Angie's List, DHI Group, RetailMeNot, Etsy, United Online, Rightside Group, Everyday Health, YuMe, Limelight Networks, Marchex, XO Group, Care.com, Real Networks, Carbonite, MaxPoint Interactive, Brightcove, TechTarget, Channel Advisor and Support.com.
The purpose of this analysis was to provide our compensation committee and our Chief Executive Officer with more current information in light of the operating and financial challenges facing the business during our ongoing business transformation process, and the desire to ensure that our total compensation arrangements were aligned with the need to attract and retain key executive and senior management talent in the current operating environment.
We anticipate that the compensation committee will regularly conduct a review of our executive officers' compensation and consider adjustments in executive compensation levels, based in part on reports from Compensia or another compensation consultant, as such reports may be updated from time to time.
The compensation committee has considered the independence of Compensia, consistent with the requirements of NYSE, and has determined that Compensia is independent. Further, pursuant to SEC rules, the compensation committee conducted a conflicts of interest assessment and determined that there is no conflict of interest resulting from retaining Compensia. Compensia was retained by, and serves at the discretion of, the compensation committee, and provided no services to the Company in 2015 other than the services described in this section.
Role of Stockholder Say-On-Pay Votes
We provide our stockholders with the opportunity to cast a triennial advisory vote on the compensation of our named executive officers (a "say-on-pay" vote), which reflects the preference expressed by our stockholders at our 2011 annual meeting of stockholders with respect to the frequency of say-on-pay votes. At our 2014 annual meeting of stockholders, our stockholders cast an advisory vote on the compensation of our named executive officers and a substantial majority (89.7%) of the votes cast at that meeting voted in favor of the say-on-pay proposal and approved, on an advisory basis, the compensation of our named executive officers that was set forth in the related proxy statement. In evaluating our executive compensation program, the compensation committee has considered the
results of this say-on-pay vote as well as other factors discussed in this section. While each of these factors informed the compensation committee's decisions regarding the compensation of our named executive officers, in light of the high level of stockholder support received in 2014, the compensation committee has not implemented significant changes to our executive compensation program over the last year. Stockholders will next have an opportunity to cast an advisory say-on-pay vote in connection with our 2017 annual meeting of stockholders. The compensation committee will continue to consider the outcome of say-on-pay votes when making future compensation decisions for our executive officers.
Principal Components of Executive Compensation Program
We designed the principal components of our executive compensation program to fulfill one or more of the objectives described above. Compensation of our named executive officers during 20152019 consisted of the following key elements:
| · | base salary; |
| · | discretionary cash compensation (bonuses); |
| · | long-term equity incentive compensation; |
| · | certain severance and change in control benefits; |
| · | a retirement savings plan (401(k) plan with a Company matching benefit); and |
| · | health and welfare benefits. |
We view each component of our executive compensation program as related but distinct and, historically, not all components have been provided to all executive officers. At times, certain executive officers have also received cash compensation in the form of commissions, but none of our named executive officers for 2015 received commissions as a component of their compensation.
We regularly reassess the total compensation of our executive officers to ensure that our overall compensation objectives are being met. In determining the appropriate amount for each compensation component, the compensation committee considers its understanding of the competitive market based on the collective experience of its members and the marketmost recent peer group compensation data and analysis provided by its independent compensation consultant; the Company'sCompany’s recruiting and retention goals; the Company'sCompany’s and compensation committee’s preference for internal equality and consistency among similarly situated executives; the length of service of the executive officers; the Company'sCompany’s overall performance, including our progress in executing on our ongoing business transformationtransformation; and other considerations the compensation committee considers relevant. Except as described below, we have not adopted any formal or informal policy or guidelines for allocating compensation among currently-paidfixed and variable compensation, short-term and long-term compensation, cash and non-cash compensation, or different forms of non-cash compensation. Furthermore, we do not engage in any formal benchmarking of compensation.compensation for our executive officers. However, the compensation committee historically has attempted to target aggregatetotal direct compensation, as well as each material element of compensation, for the Company'sCompany’s executive officers in a range between the 50th and 75th percentiles for each applicable executive officer position forof the defined peer group previously identified by its independent compensation consultant.group.
We offer cash compensation in the form of base salaries and bonuses, including incentive and discretionary cash bonuses, under our Company-wide annual bonus program, which we believe appropriately rewards our executive officers for their individual contributions to our business and responsibility for their functional area. area or business unit, as applicable. Discretionary cash bonuses, which are targeted at a percentage of each executive officer’s base salary and funded under our Company-wide annual bonus program, are used to motivate our executive officers to achieve short-term financial, operational and strategic objectives linked to our longer-term growth and other goals, including finalizing our business transformation, and to recognize an individual’s contribution toward the achievement of such objectives. Cash compensation could also be affected by significant events that affect our Company as a whole and the economy in general. For instance, in April 2020, we implemented Company-wide salary cuts in response to the effects on our Company due to the COVID-19 coronavirus pandemic. These salary cuts proportionally affected our executive officers, including our named executive officers.
Another key component of our executive compensation program is equity awards covering shares of our common stock. We emphasize the use of equity awards with time-based vesting in order to incentivize our executive officers to focus on the long-term growth of our overall enterprise value and, correspondingly, the creation of value for our stockholders over time. AlthoughHistorically, we previously granted
equity awards primarily in the form of restricted stock units, in fiscal 2014 our compensation committee started to grant a combination of both stock options and restrictedRSUs. Due to the limited trading volume and volatility of our stock, unitsafter August 2016, we granted only RSUs to our employees, including our executive officers based on the recommendation of our Chief Executive Officer. Our Chief Executive Officer and compensation committee believe thatemployees. Unlike stock options, which tend to be granted at higher ratios than restricted stock units, align the interest of our executive officers with that of our stockholders because they are able to grant the executive officers a higher number of stock options than restricted stock units, providing more value to the executives if the stock price appreciates. Our Chief Executive Officer and compensation committee also believe that restricted stock units, whichRSUs continue to have underlying value throughoutthrough periods of significant stock price volatility should be a significant componentand continue to incentivize our employees and executive officers to grow our business. In addition, use of our executive officer's total compensation. Through this compensation practice, which includes a mix of bothRSUs minimizes dilution given that in order to grant the same fair value in stock options and restrictedas the Company grants in RSUs, the Company would need to grant approximately double the number of stock units, we have tied a greater percentage of each executive officer's total compensation to stock price performance, and therefore aligned with stockholder interests, while keeping total cash compensation at comparatively modest levels relative to our peer group.options. This compensation practice allows us to preserve capital while providing our executive officers the opportunity to be well-rewardedrewarded through the value of appreciated equity awards if we are able to execute againstsuccessful in executing our business transformation plangrowth initiatives and correspondingly perform well over time. We offer relatively competitive base salaries and discretionary cash bonuses but believe, based on the collective experience of the members of our compensation committee members, that stock-basedlong-term equity incentive compensation is a more significant motivator in attracting and retaining skilled executive officers and employees forin the competitive landscape of internet-related companies.companies in which we operate.
The following describes the primary components of our executive compensation program for each of our named executive officers during 2015,2019, the rationale for that component, and how compensation amounts were determined. While we have identified
particular compensation objectives that each element of executive compensation serves, our compensation programs are designed to be flexible and complementary and to collectively serve all of the executive compensation objectives described above. Accordingly, whether or not specifically mentioned below, we believe that, as a part of our overall executive compensation policy, each individual element serves each of our compensation objectives to some extent.
Base Salary
Generally, the initial base salaries of our named executive officers were established through arm's-lengtharm’s length negotiation at the time the individual was hired, or promoted, taking into account his or hercertain other factors, including the executive officer’s qualifications, experience and prior salary level, andlevel. Increases to base salaries have been correspondingly increased based on relevant peer group compensation data and as they have assumed increased levels of responsibility within our organization.organization over time. These factors are considered collectively and not individually weighted in order to ensure that there is a consistent approach to the compensation of similarly situated executive officers. Our compensation committee, periodicallyat least annually, reviews the base salaries of our executive officers, including the named executive officers, particularly following the end of a fiscal year or at the time of a promotion or other significant change in responsibilities as well as in reaction to significant events, and any adjustments have been made based on factors such as the scope of an executive officer'sofficer’s responsibilities, individual contribution, prior experience, sustained performance and competitive market analysis of the previously defined peer group recommended by the compensation committee'scommittee’s independent compensation consultant. Decisions regarding base salary adjustments may also take into account the executive officer'sofficer’s current base salary, equity ownership and the amounts paid to the executive'sexecutive’s peers or predecessors inside the Company.
Mr. Moriarty, our Chief Executive Officer, was appointed in August 2014 following our acquisition of Saatchi Art, and his employment agreement entered into at that time established an initial annual base salary of $400,000 per year. Mr. Moriarty did not have any increase in his base salary during fiscal 2015.
Ms. Glaser joined the Company as Chief Financial Officer in April 2015. In connection with her hiring, Ms. Glaser entered into an employment agreement with the Company that set her initial annual base salary at $350,000, which was established through an arm's length negotiation between Ms. Glaser
| Named Executive Officer | FY 2018 Annual Base Salary | FY 2019 Annual Base Salary | ||
| Sean Moriarty | $400,000 | $400,000 | ||
| Jantoon Reigersman | $350,000 | $350,000 | ||
| Brian Pike | $350,000 | $350,000 |
and Mr. Moriarty in consultation with our compensation committee and with input from the executive search firm assisting the Company's board of directors in the search for a new chief financial officer.
Mr. Pike joined the Company in November 2014 as its Chief Technology Officer, and his initial annual base salary was set at $300,000, which was established through an arm's length negotiation between Mr. Pike and Mr. Moriarty in consultation with our compensation committee. In May 2015, following the announced resignations of Ms. Campistron and Mr. Boecker, Mr. Pike was also named the Company's Chief Operating Officer and the compensation committee approved an increase in his annual base salary to $350,000.
In late 2014 and in connection with Ms. Campistron's promotion to Executive Vice President, Media and Mr. Weinrot's promotion to Executive Vice President, Legal and General Counsel, the compensation committee approved base salary increases of approximately 9% and 12% for Ms. Campistron and Mr. Weinrot, respectively, to $325,000 and $285,000. As a result of these salary increases implemented in late 2014, neither Ms. Campistron nor Mr. Weinrot had further base salary increases during fiscal 2015. Ms. Campistron resigned from her position in May 2015 to pursue new opportunities. Following Ms. Campistron's resignation, she provided consulting services to us for three months at a monthly rate of $20,000 per month through August 2015.
In March 2015, in connection with his appointment as interim Chief Accounting Officer, the compensation committee approved an increase in Mr. Kim's annual base salary from $255,000 to $275,000, representing an increase of approximately 8%. Mr. Kim left the Company in September 2015.
The amount of base salary actually paid to each named executive officer during 20152019 is set forth in the "Summary“Summary Compensation Table"Table” below, and reflects base salaries that our compensation committee have determined to be appropriate for such named executive officers, based on their consideration of a variety of factors, as discussed above. The compensation committee also determined such base salaries to be within the market standard for cash compensation paid to similarly-situated executives at other peer companies based on their general knowledge of the competitive market and the most recent market analyses provided by Compensia.Semler.
Incentive and Discretionary Cash Compensation
We also use cash incentive awards and discretionary bonuses to motivate our executive officers to achieve short-term financial, operational and strategic objectives linked to our longer-term growth and other goals and to recognize an individual's contribution toward the achievement of such objectives.
Each named executive officer is party to an employment agreement that provides for an annual discretionary target bonus, however the determination of whether and how much of an annual cash bonus is paid is made atwith a target based on such executive officer’s then effective annual base salary, which targets were established through an arm’s length negotiation with such executive officer. The compensation committee retains the discretion ofto modify the targets. For 2019, no changes were recommended or made with respect to the bonus targets for the named executive officers. Accordingly, the bonus targets for 2019 for the named executive officers were as follows:
| Named Executive Officer | 2018 Bonus Target (% of Annual Base Salary) | 2019 Bonus Target (% of Annual Base Salary) | 2019 Bonus Target | |||
| Sean Moriarty | 100% | 100% | $400,000 | |||
| Jantoon Reigersman | 50% | 50% | $175,000 | |||
| Brian Pike | 50% | 50% | $175,000 |
The compensation committee basedhas maintained the authority to provide for annual discretionary cash bonuses, as opposed to objectively determined formula-based cash bonuses, in part onorder to maintain flexibility in compensating our bonus-eligible employees, including our named executive officers, in the Company's performance against our annualCompany’s current operating forecast and non-financial operating objectives, which are established at the outset of each fiscal year after discussion with the Company's senior management team, and the progress that the Company has made against its ongoing business transformation.environment. The compensation committee also has the authority to award additionalother discretionary bonuses to employees, including our named executive officers, in addition to the annual discretionary annual incentive awardcash bonus opportunities available to them under their respective employment agreements,agreement, based on factors that itthe compensation committee deems appropriate, including the individual'sindividual’s contributions to the Company'sCompany’s performance and strategic direction. The payment of annual discretionary cash bonuses is subject to each employee’s continued employment through the date of payment of any such bonus.
In March 2015 and in connection with reviewing and approving our fiscal 2015 annual operating plan,
Due to current economic conditions, the compensation committee authorizedhas not yet determined the accrual of a fixed Company-wide discretionary bonus pool (the "Discretionary Bonus Pool") targeted at $3,000,000 (exclusiveamount of the Company's payroll and withholding tax burden) for the Company's employees, including its executive officers, to participate. The Discretionary Bonus Pool was intended to incentivize the Company's employees to focus on investments and decisions that the compensation committee believed could lead to the Company's long-term success, notwithstanding their impact on short-term financial and operating results. In the third quarter of 2015, following the disposition of our Pluck social media business in February 2015 and
certain targeted reductions-in-force that took place during the second and third quarters of 2015, the compensation committee, in consultation with executive management, authorized a reduction in the accrual of the Discretionary Bonus Pool to $2,700,000 (exclusive of the Company's payroll and withholding tax burden). Principally, the Board and the compensation committee were focused on the Company's execution against its ongoing business transformation as it transitions into a diversified internet media and marketplaces company following the completion of the Rightside Spin-Off.
The Discretionary Bonus Pool was used to fund and pay2019 annual cash bonuses, for all bonus-eligible employees of the Company for fiscal 2015, includingif any, to be paid to the named executive officers taking into accountand executive team. When economic conditions have improved, the attainment of individual performance goals and accomplishments, as well as the individual's overall contributionchief executive officer will make recommendations to the Company's operating performance and long-term strategic direction. Following the completion of fiscal 2015 and in connection with the Company's annual performance review process, the compensation committee maintainedof the Discretionary Bonus Pool at its revised target accrual amount of $2,700,000, andamounts that should be paid all discretionary annual cash bonuses to the Company's bonus-eligible employees, including the named executive officers, fromother than the accrued Discretionary Bonus Pool.
chief executive officer. The compensation committee uponwill consider such recommendations and make a determination of the recommendationamount of our Chief Executive Officer, determined that our senior management, including our named executive officers, should each receive discretionary cashthe bonus, awards in respect of their serviceif any, payable to the Company in fiscal 2015, and in the case of Ms. Glaser such discretionary bonus was pro-rated for the portion of fiscal 2015 for which she was employed with the Company. The following table sets forth the target bonus and actual cash bonus awarded by the compensation committee for each named executive officer awarded a discretionary cash bonus for fiscal 2015. Mr. Kim left the Company in 2015 and received a pro-rated portion of his 2015 bonus as part of his severance payment pursuant to his employment agreement and separation and release agreement, as described in further detail below. Ms. Campistron left the Company in 2015 and did not receive a bonus with respect to fiscal 2015.
Named Executive Officer | 2015 Target Bonus | 2015 Actual Bonus Awarded | |||||
|---|---|---|---|---|---|---|---|
Sean Moriarty | $ | 320,000 | $ | 225,000 | |||
Rachel Glaser | $ | 151,315 | $ | 105,000 | |||
Brian Pike | $ | 142,398 | $ | 110,000 | |||
Daniel Weinrot | $ | 114,000 | $ | 80,000 | |||
In determining the discretionary annual bonus payouts for each of the named executive officers, including the compensation committee considered factors including, butchief executive officer. Such bonuses, if any, will be paid by December 31, 2020. If they have not limited to,been paid by December 31, 2020, the Chief Executive Officer's2019 annual performance review of the other named executive officers which evaluates, among other things, the respective executive's initiative, teamwork and management and communications skills. The compensation committee also considered the significant individual and collective efforts of our named executive officers andcash bonuses will be forfeited in their contributions towards the Company's progress in executing against its ongoing business transformation, as well as the overall operating and financial performance in the face of a continued challenging operating environment following the completion of the Rightside Spin-Off and the divestiture of certain non-core media businesses.entirety.
Long-Term Equity Incentives
The goals of our long-term equity incentive awards are to incentivize and reward our executive officers, including our named executive officers for long-term corporate performance based on the underlying value of our common stock and, thereby, to align the interests of our executive officers with those of our stockholders. We currently maintain the Amended and Restated 2006 Equity Incentive Plan, or the 2006 Plan, and the Amended and Restated 2010 Incentive Award Plan, or the 2010 Plan, pursuant to which we have granted and, with respect to the 2010 Plan, expect to continue to grant, various equity awards. As of the adoption of the 2010 Plan, no further grants have been or will be made under the 2006 Plan.
To reward our executive officers in a manner that best aligns their interests with the interests of our stockholders, we used stock options and restricted stock unitsRSUs as key equity incentive vehicles in 2015.fiscal 2019. We believe these awards provide meaningful incentives to our executive officers to achievemake decisions that result in increases in the value of our stock over time, and are an effective tool for meeting our compensation goal of increasingrewarding actions that increase long-term stockholder value by tying the value of these incentive awards to our future performance. Restricted stock units also provide retention through market volatility because they continue to have value in a fluctuating market, while stock options closely link the interests of executive officers with those of stockholders, as they provide value only if our stock price increases. We also believe that our long-term equity compensation encouragesRSU awards encourage the retention of our named executive officers because the vesting of equitysuch awards is generally based on continued employment.service with the Company over an extended period of time (generally three to four years), and these awards begin to have a compounding effect over time as additional equity awards are granted in subsequent years as part of the Company’s annual review process that generally takes place in February of the applicable year. Additionally, RSUs also encourage retention during periods of market volatility because, unlike stock options, they continue to have value in a fluctuating market. At the same time, RSUs also help achieve the compensation committee’s objective of minimizing dilution. Based on a Black-Scholes valuation done by the Company in January 2019, the Company would need to grant approximately 2.2 options for each RSU to offer the same fair value of the equity awards.
All of our U.S. employees, including our named executive officers, receive initial equity awards at the time they are hired. In addition, employees receive additional merit-based equity awards, including in connection with a promotion including promotions that resultresults in an employee becoming an executive officer. The size and form of the equity awards granted to our named executive officers when they were hired and/or promoted were established through arm's-length negotiation at the time the individual was hired or promoted.hired. In making these equity awards, weour compensation committee considered among other factors,the following factors: (i) the prospective role and increasing responsibility of the individual at the time of grant, (ii) competitive factors (including comparative peer group data and analysis provided by Compensia)its independent compensation consultant with respect to the equity compensation component to be included in total target direct compensation for an executive officer), (iii) the amount of vested and unvested equity-based compensation held by the executive officer at his or her former employer or at the Company, as applicable, (iv) the compensation committee'scommittee’s collective experience with compensation paid in respect of similar roles and in companies in similar stages of growth and industries as us at such time, (v) the cash compensation to be paid to the executive officer, including the annual discretionary target bonus opportunity, and(vi) the need to create a meaningful opportunity forto reward predicatedour named executive officers through their impact on the creation of long-term stockholder value.value, and (vii) the need to manage dilution. These factors used in such consideration are intended to appropriately balance our named executive officers’ fixed compensation against variable compensation while linking a significant portion of total compensation to pay for performance compensation that rewards an increase in shareholder value over a sustained period of time.
We also generally make annual "refresher" meritmerit-based equity grants to our employees, including our named executive officers, as part of our annual performance review process. The number of shares of common stock and type of equity awards subject to "refresher"these grants varies from individual to individual, but generally depends on length of service; individual performance history; job scope, function, and title; the value and size of that employee'semployee’s outstanding vested and unvested equity awards; and comparable awards granted to other individuals at similar levels.levels, all of which are considered in the aggregate and not as a single reference point. The total size of the award pool made available for "refresher"these annual grants and subsequently granted to our employees, including our named executive officers, is determined by the compensation committee, taking into consideration the non-binding recommendation of our senior management team, the experience of its members to assess the competitiveness of the marketlocal employment markets in which we compete for qualified and skilled employees in the industries in which we operate and certain gross and net utilization analyses of our equity awards relative to our peer group prepared by Compensia.the independent compensation consultant. Historically, the compensation committee has considered and approved these "refresher"annual grants in the first quarter of each fiscal year with respect to the prior year'syear’s performance as part of our annual employee performance review process. "Refresher"Merit-based awards in the form of restricted stock units and/or stock optionsRSUs were granted to employees, including certainour named executive officer as described below,officers, in February 2015.2019. The February 2019 annual merit-based awards granted to our named executive officers are described below.
20152019 Equity Awards
Ms. Glaser was appointed as
In February and March 2019, in connection with the Company’s annual employee performance review process, our Chief Financial Officer effective April 2015. Pursuant tonamed executive officers were given the terms of her employment agreement, Ms. Glaser was granted a stock option covering 200,000 shares with a per share exercise price of $6.50 (equal to the closing price per share on the grant date). The stock option vested with respect to 33% of the shares subject to the stock option on April 13, 2016 (the one year anniversary of Ms. Glaser's commencement of employment) and will continue to vest with respect to an additional 1/36th of the shares subject to the stock option on each monthly anniversary of April 13, 2016 thereafter, subject to Ms. Glaser's continued employment through the applicable vesting date. Pursuant to the terms of her employment agreement, Ms. Glaser was also granted 75,000 restricted stock units ("RSUs"), which vest over three years with 33%following grants:
| Named Executive Officer | FY 2018 Annual RSU Grant | FY 2019 Annual RSU Grant | FY 2019 PSU Grant | |||||||||
| Sean Moriarty | 200,000 | 200,000 | 30,000 | |||||||||
| Jantoon Reigersman | — | 90,000 | — | |||||||||
| Brian Pike | 65,000 | 84,000 | — | |||||||||
Each of the RSU award vesting on
May 15, 2016 and an additional 1/12th of the RSU award vesting on August 15, 2016 and on each three-month anniversary thereafter, subjectawards is scheduled to Ms. Glaser's continued employment through the applicable vesting date. Although Ms. Glaser's employment agreement originally contemplated that such stock option and RSU awards were to vest over four years, the compensation committee determined to grant Ms. Glaser's equity awards with a three year vesting schedule at the time of their grant in May 2015 following the commencement of Ms. Glaser's employment with the Company. Ms. Glaser's RSU and stock option grants were structured in a manner designed to induce her to join the Company as its Chief Financial Officer, and the amount of each grant was determined based on an arm's-length negotiation between Ms. Glaser and our compensation committee, after factoring in the recommendation of our Chief Executive Officer.
In connection with his promotion to Chief Operating Officer in May 2015 following the resignation of Ms. Campistron and Mr. Boecker, Mr. Pike, who was already our Chief Technology Officer, was granted an additional 25,000 RSUs and a stock option covering 75,000 shares. In deciding to approve these awards, the compensation committee considered his increased responsibility in overseeing the Company's media businesses in addition to his current responsibility overseeing the Company's information technology and business intelligence functions and the recommendation of our Chief Executive Officer. The stock option has a per share exercise price of $5.29 (equal to the closing price per share on the grant date) and vests over four years with one-quarter (1/4) of the shares subject to the stock option vesting on May 21, 2016 and an additional 1/48th of the shares subject to the stock option vesting on each monthly anniversary of May 21, 2016 thereafter, subject to Mr. Pike's continued employment through the applicable vesting date. The RSU award vests in four equal annual installments commencing on May 15, 2016 and on each annual anniversary thereafter, subject to Mr. Pike's continued employment through the applicable vesting date.
In connection with his appointment as interim Chief Accounting Officer in March 2015, Mr. Kim was granted 10,000 RSUs and a stock option covering 25,000 shares. In deciding to approve these awards, the compensation committee considered his increased responsibility, including primary responsibility for the financial statements and the audit report for fiscal 2014 to be included the Company's annual report on Form 10-K, and the recommendation of our Chief Executive Officer. The stock option has a per share exercise price of $5.10 (equal to the closing price per share on the grant date) and was scheduled to over three years, with one-third (1/3) of the shares subject to the stock option scheduled to vestaward having vested on March 1, 20162020 and an additional 1/36th of the shares subject to the stock option scheduled to vestremaining two-thirds (2/3) vesting in twenty-four (24) substantially equal installments on each monthly anniversary of March 1, 2016 thereafter, subject to Mr. Kim'sthe applicable named executive officer’s continued employmentservice with the Company through theeach applicable vesting date. The RSUperformance stock unit (PSU) award granted to Mr. Moriarty was scheduledsubject to a performance-based vesting condition and a time-based vesting condition, both of which would have to be satisfied before the RSUs subject to the award would be deemed vested and settled in shares. The performance-based vesting condition was based on a combination of the Company’s revenue growth and Adjusted EBITDA in fiscal year 2019. No RSUs subject to the PSU award would be earned unless the Company attained revenue growth equal to at least 15% during the performance period. If the Company attained at least 15% revenue growth during such period, 75% of the 30,000 target RSUs subject to the award would be deemed to satisfy the performance condition. If the Company attained 20% revenue growth during the performance period, 100% of the target RSUs would be deemed to satisfy the performance condition, and 150% of the target RSUs would be deemed to satisfy the performance condition if the Company attained 25% revenue growth during the performance period, provided that adjusted EBITDA is positive as of the last date of the performance period. To the extent revenue growth was between 15% and 20% or between 20% and 25%, interpolation would be used to determine the percentage of target RSUs that would be deemed to satisfy the performance condition. The percentage of target RSUs that would be deemed to satisfy the performance condition could only exceed 100% if adjusted EBITDA was positive as of the last date of the performance period. One-third (1/3) of the target RSUs that the compensation committee determined to have satisfied the performance condition would vest on the date of such determination by the compensation committee and the remaining two-thirds would vest in three substantiallytwo equal installments over three years commencing on March 1, 2016December 31, 2020 and each annual anniversary thereafter,December 31, 2021, subject to Mr. Kim'sMoriarty’s continued employment through the applicable vesting date. In connection with his separation of service with the Company in September 2015, 25% of the shares subject to this option and 25% of these RSUs vested on the date of termination pursuant to the terms of his employment agreement.
In March 2015,through each of Ms. Campistron and Mr. Weinrot was granted an annual "refresher" award of 10,000 RSUs in connection with the Company's annual employee performance review process. Each of these RSU awards was scheduled to vest in three substantially equal annual installments commencing on March 1, 2016, subject to the named executive officer's continued employment through the applicable vesting date. These "refresher" awardsFollowing the end of the performance period, however, the compensation committee determined that the performance-based vesting conditions were in addition to the stock options covering 30,000 shares that Ms. Campistronnot achieved, and Mr. Weinrot each were granted in December 2014 that were intended to cover atherefore no portion of the annual review "refresher" awards that otherwise were grantedPSU award will vest, and the award was forfeited in 2015.its entirety.
In March 2015, Ms. Campistron, Mr. Weinrot and Mr. Kim also were granted 2,976 RSUs, 2,976 RSUs and 1,786 RSUs, respectively, which RSUs represented approximately 50% of each named executive officer's annual bonus for fiscal 2014. These RSUs were granted in connection with the
Company's annual performance review process for fiscal 2014 due to the fact that the compensation committee elected to pay approximately 50% of the Company-wide bonuses payable in respect of fiscal 2014 in restricted stock unit awards with a one-year cliff vest on February 1, 2015. These RSUs were scheduled to vest in full in February 2016, subject to the named executive officer's continued employment through the applicable vesting date. In connection with his separation of service from the Company, in September 2015, all of these RSUs held by Mr. Kim vested on the date of termination.
Ms. Campistron voluntarily resigned in May 2015 and, as a result, all of her then unvested options and RSUs were forfeited upon her resignation.
Pursuant to the terms of the named executive officers'officers’ employment agreements with the Company, these awards are subject to accelerated vesting under certain circumstances, as described below under "Executive“Executive Compensation—Potential Payments Upon Termination or Change in Control."”
Retirement Savings and Other Benefits
We maintain a 401(k) retirement savings plan for our employees based in the U.S., including the named executive officers, who satisfy certain eligibility requirements. Under the 401(k) plan, eligible employees may elect to contribute pre-tax amounts and/or post-tax amounts, up to a statutorily prescribed limit, to the 401(k) plan. The Company matchesWe match 50% of contributions made by all participants (including our named executive officers) in the 401(k) plan, up to a contribution level of 6% of the respective participant'sparticipant’s annual gross salary for the then-current calendar year (the "Company“Company 401(k) Match"Match”). The Company 401(k) Match vests in full following the completion of the participant'sparticipant’s first year of employment, and each matching contribution under the Company 401(k) Match following the first year of employment is fully vested at the time of contribution. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. These benefits are provided to our named executive officers on the same general terms as they are provided to all of our full-time U.S. employees.Effective May 2020, we suspended our 401(k) match in response to the effects on our Company due to the COVID-19 coronavirus pandemic. The suspension of our 401(k) match applied to all of our full-time U.S. employees, including our named executive officers.
Employee Benefits and Perquisites
Additional benefits received by our employees, including the named executive officers, consist of medical, dental, and vision benefits, medical and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance, and basic life insurance coverage.coverage, supplemental group accident insurance and a gym subsidy. These benefits are provided to our named executive officers on the same general terms as they are provided to all of our full-time U.S. employees. Prior to fiscal 2015, participating executives, including our named executive officers, were eligible for certain supplemental medical, vision and dental coverage not generally available to all full-time U.S. employees under our executive medical reimbursement program (the "EMRP"), which reimbursed eligible executive employees for all out-of-pocket medical related expenses incurred, including co-pays, office visits and other procedures, not covered by the Company's primary medical, dental and vision benefits. In connection with the termination of the Company's supplemental EMRP program at the beginning of fiscal 2015 following the implementation of the Affordable Care Act, named executive officers who were executive officers at the beginning of fiscal 2015 (Messrs. Moriarty, Pike, Weinrot and Kim and Ms. Campistron) received a one-time reimbursement stipend of $10,000 ($5,000 for Mr. Kim) in fiscal 2015 to replace the benefits previously provided to named executive officers under such supplemental EMRP program.
We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices in the competitive market.
From time to time, our executive officers receive other limited perquisites in connection with their employment. Mr. Weinrot received $28,500 in fiscal 2015 in connection with the cash-out of his accrued paid-time-off balance after he became eligible for an unlimited vacation benefit following his promotion in October 2014. Mr. Kim received $5,264 as a COBRA subsidy in connection with his separation of service from the Company in September 2015, in addition to severance payments he received that are described below. Following her resignation, Ms. Campistron received payments totaling $60,000 for providing consulting services for three months, and payments totaling $15,000 in exchange for her execution and non-revocation of two general release of claims against the Company.
We do not believe that perquisites or other personal benefits are a material component of our executive compensation program. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive officer in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment, motivation and/or retention purposes. Future practices with respect to perquisites or other personal benefits for our named executive officers will be approved and subject to periodic review by the compensation committee.
Severance and Change in Control Benefits
As more fully described below under "Executive“Executive Compensation—Narrative Disclosure to Summary Compensation TableTable” and Grants of Plan-Based Awards Table" and "Executive“Executive Compensation—Potential Payments Upon Termination or Change in Control,"” each named executive officer'sofficer’s employment agreement provides for certain payments and/or benefits upon a qualifying termination of service and/or in connection with a change in control. We believe that severance and change in control protections are important components of our named executive officers'officers’ compensation packages because these protections provide security and stability that help enable our executive officers to focus on their duties and responsibilities to the Company and to act with the best interests of the Company and its stockholders in mind at all times, even under circumstances where the interests of the Company and its stockholders may ultimately be adverse to the officer'ssuch officer’s job security. We further believe that the risks to job security associated with executive officer roles are heightened for public company officers due to market factors, takeover potential and other typical pressures on publicly traded companies.companies, including meeting or exceeding analyst and investor expectations. Accordingly, the compensation committee has determined that severance and change in control protections are appropriate in the public company context underfor our named executive officers' agreements with the Company.officers. In determining the amounts of, and triggers applicable to, the various benefits and protections described below, the compensation committee considered input provided by Compensiaits compensation consultant as to the appropriate levels and triggers, but based its ultimate determinations as to appropriate terms and conditions on the collective experience of its members.
As described in greater detail below under "Executive Compensation—Potential Payments Upon Termination or Change in Control," severance triggers provided in our named executive officers' agreements with the Company as of December 31, 2015 included: (i) termination "without cause"; (ii) termination due to death or disability (except for Mr. Moriarty); (iii) for Mr. Moriarty, termination for "good reason" (in all contexts); and (iv) for Ms. Glaser, Mr. Pike and Mr. Weinrot, termination for "good reason" in the context of a change in control. Mr. Moriarty's amended and restated employment agreement entered into in January 2016 includes a severance trigger for termination due to death or disability. We believe that terminations "without cause" or due to death or disability constitute the types of non-culpable and unanticipated events which, absent suitable protections, often give rise to anxiety and distraction and are therefore appropriate severance triggers. In addition, we believe that our chief executive officer is particularly susceptible to the types of demotion and other constructive terminations against which "good reason" severance triggers are generally intended to protect and, accordingly, we believe that "good reason" severance triggers are appropriate for Mr. Moriarty. We also believe that, following a change in control, all officers are subject to a heightened risk of demotion
25
or other constructive termination and, therefore, we included "good reason" severance triggers for Ms. Glaser and Messrs. Pike and Weinrot in the change in control context. In addition to his severance triggers, Mr. Moriarty's employment agreement provides for the acceleration of certain outstanding equity awards if he remains employed by the Company through the consummation of a change in control, as defined in his employment agreement.EXECUTIVE COMPENSATION
Ms. Campistron resigned as our Executive Vice President, Media, effective as of June 5, 2015. Under her employment agreement, Ms. Campistron was not entitled to any severance or termination payments as a result of her voluntary resignation, although she received certain payments pursuant to other arrangements with the Company as described below under "Executive Compensation—Narrative Disclosure to
Summary Compensation Table and Grants of Plan-Based Awards Table." Mr. Kim incurred a separation of service from the Company on September 25, 2015, and was entitled to certain severance payments, as described below under "Executive Compensation—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table" and "Executive Compensation—Potential Payments Upon Termination or Change in Control." The compensation committee had determined that Mr. Kim should receive additional protections when he was appointed as interim Chief Accounting Officer shortly before Ms. Glaser joined the Company as Chief Financial Officer because additional management changes often occur after a leadership change and the compensation committee wanted to ensure that Mr. Kim felt adequately protected against any such potential changes.
Tax and Accounting Considerations
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code, or Section 162(m), disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1.0 million in any taxable year for the group of individuals generally comprised of its named executive officers, other than its Chief Financial Officer, unless compensation is performance-based. Where reasonably practicable and to the extent that the Section 162(m) deduction disallowance becomes applicable to our Company, our compensation committee may seek to qualify the variable compensation paid to our named executive officers for an exemption from the deductibility limitations. As such, in approving the amount and form of compensation for our named executive officers in the future, our compensation committee will consider all elements of the cost to our Company of providing such compensation, including the potential impact of Section 162(m). However, our compensation committee may, in its judgment, authorize compensation payments that do not comply with the exemptions in Section 162(m) when it believes that such payments are appropriate to attract and retain executive talent.
Section 280G of the Internal Revenue Code
Section 280G of the Internal Revenue Code disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change in control. In addition, Section 4999 of the Internal Revenue Code imposes a 20% excise tax on the individual with respect to the excess parachute payment. Parachute payments are compensation linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting of stock options and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G of the Internal Revenue Code based on the executive's prior compensation. In approving the compensation arrangements for our named executive officers in the future, the compensation committee will consider all elements of the cost to the Company of providing such compensation, including the potential impact of Section 280G of the Internal Revenue Code. However, the compensation committee may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility under Section 280G of the Internal Revenue Code and the imposition
of excise taxes under Section 4999 of the Internal Revenue Code when it believes that such arrangements are appropriate to attract and retain executive talent.
Section 409A of the Internal Revenue Code
Section 409A of the Internal Revenue Code requires that "nonqualified deferred compensation" be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities, penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A of the Internal Revenue Code.
Accounting for Stock-Based Compensation
We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, for our stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date "fair value" of their stock-based awards using a variety of approved assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of stock options, restricted stock, restricted stock units and other equity-based awards under our equity incentive award plans will be accounted for under ASC Topic 718. The compensation committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
The following report of the Compensation Committee shall not be deemed to be "soliciting material" or to otherwise be considered "filed" with the SEC, and such information shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act except to the extent that the Company specifically incorporates it by reference into such filing.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee of the BoardFredric W. Harman—ChairpersonJames R. QuandtBrian M. Regan
The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 2015, 20142019 and 2013. None of our current named executive officers were named executive officers of the Company for fiscal 2013.2018.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sean Moriarty, | 2015 | 400,000 | 225,000 | — | — | 20,527 | 645,527 | |||||||||||||||
Chief Executive Officer | 2014 | 156,848 | — | 247,453 | 6,068,808 | 18,086 | 6,491,195 | |||||||||||||||
Rachel Glaser, | 2015 | 251,955 | 105,000 | 487,500 | 655,800 | 7,090 | 1,507,345 | |||||||||||||||
Chief Financial Officer(4) | ||||||||||||||||||||||
Peter Kim, | 2015 | 199,701 | — | 60,109 | 64,435 | 252,063 | 576,308 | |||||||||||||||
former interim Chief | ||||||||||||||||||||||
Accounting Officer(5) | ||||||||||||||||||||||
Brian Pike, | 2015 | 330,673 | 110,000 | 132,250 | 206,670 | 21,185 | 800,778 | |||||||||||||||
Chief Operating Officer and | ||||||||||||||||||||||
Chief Technology Officer(6) | ||||||||||||||||||||||
Daniel Weinrot, | 2015 | 285,000 | 80,000 | 66,178 | — | 47,115 | 478,293 | |||||||||||||||
Executive Vice President, | 2014 | 256,250 | 37,500 | 245,476 | 325,800 | 12,408 | 877,434 | |||||||||||||||
Legal and General Counsel(7) | ||||||||||||||||||||||
Julie Campistron, | 2015 | 141,666 | — | 66,178 | — | 90,438 | 298,282 | |||||||||||||||
former Executive Vice President, | 2014 | 297,604 | 12,500 | 496,139 | 621,618 | 11,003 | 1,438,864 | |||||||||||||||
Media(8) | ||||||||||||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||
| Sean Moriarty | 2019 | 400,000 | — | 1,880,600 | — | 8,636 | 2,289,236 | ||||||||
| Chief Executive Officer | 2018 | 400,000 | 260,000 | 1,600,000 | — | 8,486 | 2,268,486 | ||||||||
| Jantoon Reigersman | 2019 | 350,000 | — | 738,000 | — | 8,400 | 1,096,400 | ||||||||
| Chief Financial Officer | 2018 | 350,000 | 165,000 | 1,338,750 | — | 8,250 | 1,862,000 | ||||||||
| Brian Pike | 2019 | 350,000 | — | 688,800 | — | 8,636 | 1,047,436 | ||||||||
| Chief Operating Officer and Chief Technology Officer | 2018 | 350,000 | 145,000 | 520,000 | — | 8,486 | 1,023,486 |
| (1) | For 2018, amounts reflect the discretionary annual cash bonuses paid to each named executive officer with respect to the fiscal year 2018 performance. For 2019, bonus amounts, if any, have not yet been determined. For more information regarding 2019 bonuses, see above under “Compensation Discussion and Analysis—Principal Components of Executive Compensation Program— Discretionary Cash Compensation.” |
| (2) | Amounts reflect the aggregate grant-date fair value of RSUs, stock options or PSUs, as applicable, granted in each applicable fiscal year computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named executive officer. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. Information regarding the assumptions used to calculate the value of all such awards made to the named executive officers is provided in Note 13 to our audited consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 16, 2020. There can be no assurance that awards will vest (and if awards do not vest, no value will be realized by the named executive officer), or that the value upon vesting, settlement or exercise, as applicable, will approximate the aggregate grant date fair value determined under ASC Topic 718. In the case of PSUs, the aggregate grant-date fair value is reported for the probable outcome, which for this purpose is estimated as 100% target achievement. The aggregate grant-date fair value of the PSUs granted to Mr. Moriarty at the maximum level of achievement for fiscal year 2019 is $360,900. |
| (3) | Details regarding the amounts included in “All Other Compensation” for fiscal 2019 are set forth in the following table. |
Name | Year | Insurance Premiums ($) | 401(k) Plan Matching ($) | EMRP Replacement Stipend ($) | Accrued PTO Payout ($) | Separation Payments ($) | Consulting Payments ($) | COBRA Subsidy ($) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mr. Moriarty | 2015 | 1,027 | 9,500 | 10,000 | — | — | — | — | |||||||||||||||||
Ms. Glaser | 2015 | 527 | 6,563 | — | — | — | — | — | |||||||||||||||||
Mr. Kim | 2015 | 770 | 6,978 | 5,000 | — | 234,051 | — | 5,264 | |||||||||||||||||
Mr. Pike | 2015 | 1,027 | 10,158 | 10,000 | — | — | — | — | |||||||||||||||||
Mr. Weinrot | 2015 | 1,027 | 7,588 | 10,000 | 28,500 | — | — | — | |||||||||||||||||
Ms. Campistron | 2015 | 513 | 4,925 | 10,000 | — | 15,000 | 60,000 | — | |||||||||||||||||
| Name | Life/ Disability Insurance Premiums ($) | 401(k) Plan Matching ($) | |||
| Sean Moriarty | 236 | 8,400 | |||
| Jantoon Reigersman | — | 8,400 | |||
| Brian Pike | 236 | 8,400 |
Grants of Plan-Based Awards in 2015
The following table sets forth information regarding grants of plan-based awards made to our named executive officers during the year ended December 31, 2015. No grants of plan-based awards were made to Mr. Moriarty in fiscal 2015.
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards: Number of Securities Underlying Options (#)(2) | Exercise or Base Price of Option Awards: ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Rachel Glaser | May 4, 2015 | 75,000 | — | — | 487,500 | ||||||||||
| May 4, 2015 | — | 200,000 | 6.50 | 655,800 | |||||||||||
Peter Kim | March 4, 2015 | 11,786 | — | — | 60,109 | ||||||||||
| March 4, 2015 | — | 25,000 | 5.10 | 64,435 | |||||||||||
Brian Pike | May 21, 2015 | 25,000 | — | — | 132,250 | ||||||||||
| May 21, 2015 | — | 75,000 | 5.29 | 206,670 | |||||||||||
Daniel Weinrot | March 4, 2015 | 12,976 | — | — | 66,178 | ||||||||||
Julie Campistron | March 4, 2015 | 12,976 | — | — | 66,178 | ||||||||||
Annual Report on Form 10-K filed with the SEC on March 1, 2016. There can be no assurance that awards will vest (and if awards do not vest, no value will be realized by the individual), or that the value upon vesting will approximate the aggregate grant date fair value determined under ASC Topic 718.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Below are summaries of the key terms of the employment agreements applicable to our named executive officers (referred to herein as the "employment agreements"“employment agreements”). The employment agreements also provideAdditional details regarding the base salaries, discretionary cash bonuses and other benefits provided to our named executive officers for certain severancefiscal 2019 are set forth above under “Compensation Discussion and change-in-control paymentsAnalysis—Principal Components of Executive Compensation Program—Base Salary”, “Compensation Discussion and benefits, as described belowAnalysis—Principal Components of Executive Compensation Program—Discretionary Cash Compensation”, “Compensation Discussion and Analysis—Principal Components of Executive Compensation Program—Retirement Savings and Other Benefits” and “Compensation Discussion and Analysis—Principal Components of Executive Compensation Program—Employee Benefits and Perquisites.” Additional details regarding the material terms of the equity awards granted to our named executive officers in fiscal 2019 are set forth above under "Potential Payments Upon Termination or Change in Control."“Compensation Discussion and Analysis—Principal Components of Executive Compensation Program—Long-Term Equity Incentives.”
Sean Moriarty. On August 8, 2014, we entered into an employment agreement with Sean Moriarty (the "2014 Moriarty Agreement"), which was effective as of August 12, 2014 and was originally scheduled to expire on August 12, 2017. On January 5, 2016, we entered into an Amended and Restated Employment Agreement with Mr. Moriarty (the "2016 Moriarty Agreement" and, together with the 2014 Moriarty Agreement, the "Moriarty Employment Agreements"“Moriarty Agreement”) that became effective as of January 5, 2016 and expires on January 5, 2019,with a three-year term, unless earlier terminated. The term of the 2016 Moriarty Agreement is subject to automatic one-year renewal terms unless either the Companywe or Mr. Moriarty givesgive written notice of termination at least 90 days prior to the end of the applicable term.
Pursuant to the terms of both
The Moriarty Employment Agreements,Agreement sets forth Mr. Moriarty receives anMoriarty’s fiscal 2016 annual base salary of $400,000, subject to increase at$400,000. Mr. Moriarty’s annual base salary has since remained the discretion ofsame as the compensation committee.annual base salary set forth under the Moriarty Agreement. The Moriarty Employment AgreementsAgreement also provideprovides Mr. Moriarty with the opportunity to earn an annual discretionary cash performance bonus targeted at 80% of his base salary in effect for any calendar year, based on the achievement of individual and Company-based performance criteria established by the Company's board of directorsCompany’s Board or compensation committee, after consultation with Mr. Moriarty. For fiscal 2017, Mr. Moriarty’s bonus target was increased to 100% of his annual base salary, and such bonus target remained the same for fiscal 2018 and 2019. Under the Moriarty Employment Agreements,Agreement, Mr. Moriarty is also eligible to earn an additional discretionary cash bonus if the performance metric(s) applicable to his annual bonus opportunity is or are attained at the "target"“target” level and the full target bonus becomes payable to him. Mr. Moriarty is also entitled to participate in customary health, welfare and fringe benefit plans.
In connection with entering into the 2014 The Moriarty Agreement Mr. Moriarty was granted stock options covering (i) 694,863 shares with a $9.77 per share exercise price (equal to the closing price per share on the grant date), (ii) 184,130 shares with a $14.66 per share exercise price (equal to 150% of the closing price per share on the grant date) and (iii) 184,130 shares with a $19.54 per share exercise price (equal to 200% of the closing price per share on the grant date). Each stock option granted to Mr. Moriarty in connection with entering into the 2014 Moriarty Agreement vested with respect to 25% of the shares subject to the stock option on August 12, 2015, and an additional 1/48th of the shares subject to the stock option vest on each monthly anniversary of August 12, 2015, subject to Mr. Moriarty's continued employment through the applicable vesting date.provides for various equity grants.
In connection with entering into the 2016 Moriarty Agreement, Mr. Moriarty was granted restricted stock units covering 500,000 shares of common stock (the "2016 RSU Award"), which will vest (i) with respect to 30% of the shares (or 150,000 shares) on January 5, 2017, (ii) with respect to 40% of the shares (or 200,000 shares) monthly in twelve substantially equal installments commencing on February 5, 2017 through January 5, 2018 and (iii) with respect to 30% of the shares (or 150,000 shares) monthly in twelve substantially equal installments commencing on February 5, 2018 through January 5, 2019, subject to Mr. Moriarty's continued employment through the applicable vesting date. In addition, during the employment period set forth in the 2016 Moriarty Agreement and at the Company's discretion, Mr. Moriarty will be eligible to receive periodic equity-based incentive awards from the Company. Mr. Moriarty was also entitled to reimbursement of up to $7,500 in legal fees and
expenses incurred in connection with the negotiation of the 2016 Moriarty Agreement, which he received in 2016.
Rachel Glaser.Jantoon Reigersman. On March 4, 2015, In November 2017, we entered into an Employment Agreementemployment agreement with Rachel GlaserMr. Reigersman (the "Glaser Agreement"“Reigersman Agreement”). The Glaser Agreement became in connection with his appointment as Chief Financial Officer, which was effective as of April 13, 2015December 11, 2017 and expires on April 13, 2019,has a term of four years from the effective date, unless earlier terminated. The GlaserReigersman Agreement provides for an annual base salary of $350,000, subject to increase at the discretion of the compensation committee. Mr. Reigersman’s fiscal 2018 annual base salary remained the same as the annual base salary set forth under the Reigersman Agreement. The GlaserReigersman Agreement also provides Ms. GlaserMr. Reigersman with the opportunity to earn an annual discretionary cash performance bonus targeted at 60%50% of herhis annual base salary, in effect for any calendar year, based on: (i) for fiscal 2015, the achievement of individual performance objectives, as determined by the Company's board of directors or compensation committee, and (ii) for all other fiscal years during her employment period,on the attainment of individual and/or Company-based operating and financial metricsperformance criteria established by the Company'sCompany’s board of directors or compensation committee. Ms. GlaserMr. Reigersman is also entitled to participate in customary health, welfare and fringe benefit plans. The Reigersman Agreement provides for various equity grants.
In connection with the commencement of her employment, Ms. Glaser was granted (i) a stock option covering 200,000 shares of common stock with a per share exercise price equal to $6.50, and (ii) 75,000 restricted stock units. On April 13, 2016, approximately one-third (1/3) of the shares subject to the stock option vested and an additional 1/36th of the shares subject to the stock option vest on each monthly anniversary of April 13, 2016 thereafter, subject to Ms. Glaser's continued employment through the applicable vesting date. The restricted stock units vest over three years with one-third (1/3) of the RSUs vesting on May 15, 2016 and an additional one-twelfth (1/12) of the RSUs vesting on each quarterly anniversary of May 15, 2016 thereafter, subject to Ms. Glaser's continued employment through the applicable vesting date. In addition, duringFebruary 2019, we amended the employment period set forthagreement with Mr. Reigersman to enhance the benefits Mr. Reigersman would be entitled to in the Glaser Agreement and atevent he is terminated by the Company's discretion, Ms. Glaser will be eligible to receive periodic equity-based incentive awards from the Company. Although Ms. Glaser's employment agreement originally provided that the stock option and restricted stock units were to vest over four years, the compensation committee determined to grant these awards with a three year vesting schedule at the time of grantCompany without “cause” or by Mr. Reigersman for “good reason.” For more information see “—Potential Payments Upon Termination or Change in May 2015 following the commencement of Ms. Glaser's employment in April 2015.Control” below.
Peter Kim.Brian Pike. On March 4,May 21, 2015, we entered into an amendedAmended and restated employment agreementRestated Employment Agreement with Peter KimMr. Pike (the "Kim Agreement"“Pike Agreement”). The Kim Agreement that became effective as of March 5, 2015 and was scheduled to expire on March 5, 2018. Mr. Kim's employment with the Company terminated effective as of the close of business on September 25,May 21, 2015. The KimPike Agreement providedprovides for an annual base salary of $275,000 and provided$350,000. Mr. KimPike’s annual base salary has remained the same as the annual base salary set forth under the Pike Agreement. The Pike Agreement also provides Mr. Pike with an opportunity to earn an annual discretionary cash performance bonus targeted at 30%50% of his annual base salary in effectactually paid for anysuch calendar year, based on the attainment of Company performance metrics applicable to senior employees and/or individual performance objectives, in each case as established and approved by the Company's board of directorsCompany’s Board or the compensation committee. Mr. Kim was alsoPike is entitled to participate in customary health, welfare and fringe benefit plans.
In connection with entering into the Kim Agreement, Mr. Kim was granted a stock option covering 25,000 shares of our common stock with a per share exercise price equal to $5.10. The stock option was scheduled to vest over three years with one-third (1/3) of the shares subject to the stock option scheduled to vest on March 1, 2016 and an additional 1/36th of the shares subject to the stock option scheduled to vest on each monthly anniversary of March 1, 2016 thereafter, subject to Mr. Kim's continued employment through the applicable vesting date. Mr. Kim was also granted 10,000 restricted stock units in connection with entering into the Kim Agreement, which were scheduled to vest in three substantially equal annual installments commencing on March 1, 2016, subject to Mr. Kim's continued employment through the applicable vesting date.
Pursuant to the terms of his separation and release agreement, Mr. Kim received the following benefits in connection with his separation of service from the Company in September 2015: (i) nine
months' of his base salary in effect on the termination date, which was equal to $206,250; (ii) a pro-rated amount of his target bonus for fiscal 2015 (pro-rated from March 5, 2015 to September 25, 2015) paid out at approximately 60% of target, which was equal to $27,801 and (iii) acceleration of the following equity awards that remained unvested as of September 25, 2015: (a) 4,667 restricted stock units; (b) 6,250 stock options with a per share exercise price of $5.10; and (c) 8,333 stock options with a per share exercise price of $5.95.
Brian Pike. On October 14, 2014, in connection with his appointment to serve as our Chief Technology Officer, we entered into an employment agreement with Brian Pike (the "Pike Agreement"). The Pike Agreement provided for an annual base salary of $300,000. On May 21, 2015, in connection with his appointment to serve as our Chief Operating Officer in addition to our Chief Technology Officer, we entered into an Amended and Restated Employment Agreement with Mr. Pike (the "Amended Pike Agreement"). The Amended Pike Agreement became effective as of May 21, 2015 and expires on May 21, 2019, unless earlier terminated. The Amended Pike Agreement provides for an annual base salary of $350,000. The Amended Pike Agreement also provides Mr. Pike with an opportunity to earn an annual discretionary cash performance bonus targeted at 50% of his base salary actually paid for any calendar year, based on the attainment of Company performance metrics applicable to senior employees and/or individual performance objectives, in each case as established and approved by the Company's board of directors or the compensation committee. Mr. Pike is also entitled to participate in customary health, welfare and fringe benefit plans.various equity grants.
In connection with entering intoFebruary 2019, we amended the Amended Pike Agreement, Mr. Pike was granted (i) a stock option covering 75,000 shares of our common stock with a per share exercise price equal to $5.29, and (ii) 25,000 restricted stock units. The stock option will vest over four years with one-quarter (1/4) of the shares subject to the stock option vesting on May 21, 2016 and an additional 1/48th of the shares subject to the stock option vesting on each monthly anniversary of May 21, 2016 thereafter, subject to Mr. Pike's continued employment through the applicable vesting date. The restricted stock units will vest over four years in four equal annual installments commencing on May 15, 2016, subject to Mr. Pike's continued employment through the applicable vesting date. During the employment period set forth in the Amended Pike Agreement, Mr. Pike is eligible to receive periodic equity-based incentive awards from the Company.
Daniel Weinrot. In connection with his promotion to Executive Vice President, Legal and General Counsel, Mr. Weinrot entered into a second amended and restated employment agreement dated December 1, 2014, which was effective as of October 16, 2014 and has a term of four years from the effective date (the "Weinrot Agreement"). Pursuant to the Weinrot Agreement, Mr. Weinrot is entitled to receive an annual base salary of $285,000, which is subject to increase at the discretion of the compensation committee. In addition, Mr. Weinrot is eligible to receive an annual discretionary cash performance bonus targeted at 40% of his base salary paid for such calendar year based on the achievement of individual and/or Company-based performance criteria established by the Company's board of directors or compensation committee. In connection with entering into the Weinrot Agreement, Mr. Weinrot was granted a stock option covering 60,000 shares of our common stock and a restricted stock unit award covering 10,000 shares of our common stock. These equity awards vest as follows: (i) the shares subject to the restricted stock unit award vest in 16 substantially equal quarterly installments beginning on February 15, 2015, and (ii) the shares subject to the stock option vest and become exercisable in 48 substantially equal monthly installments beginning on November 29, 2014, in each case subject to Mr. Weinrot's continued employment with the Company. Mr. Weinrot is also eligible to participate in customary health, welfare and fringe benefit plans. In addition, during the employment period set forth in the Weinrot Agreement, Mr. Weinrot is eligible to receive periodic equity-based incentive awards from the Company.
Julie Campistron. Ms. Campistron entered into a second amended and restated employment agreement with us, which was effective from April 1, 2013 and was scheduledMr. Pike to expire on April 1, 2016. In connection with Ms. Campistron's promotion to Executive Vice President, Media, her employment agreement was amended effective as of October 1, 2014 (the second amended and restated employment agreement, as amended,enhance the "Campistron Agreement"). Pursuant to the Campistron Agreement, Ms. Campistron wasbenefits Mr. Pike would be entitled to receive an annual base salary of $325,000, which was subject to increase atin the discretion of the compensation committee. In addition, Ms. Campistron was eligible to receive an annual discretionary cash performance bonus targeted at 50% of her base salary paid for such calendar year based on the achievement of individual and/or Company-based performance criteria establishedevent he is terminated by the Company's board of directorsCompany without “cause” or compensation committee. In connection with entering into the Campistron Agreement, Ms. Campistron was granted a stock option covering 100,000 shares of our common stock and a restricted stock unit award covering 40,000 shares of our common stock. These equity awards were scheduled to vest as follows: (i) the shares subject to the restricted stock unit award were scheduled to vestby Mr. Pike for “good reason.” For more information see “—Potential Payments Upon Termination or Change in 16 substantially equal quarterly installments beginning on February 15, 2015, and (ii) the shares subject to the stock option were scheduled to vest and become exercisable in 48 substantially equal monthly installments beginning on October 26, 2014, in each case subject to Ms. Campistron's continued employment with the Company. Ms. Campistron was also eligible to participate in customary health, welfare and fringe benefit plans.Control” below.
Ms. Campistron resigned from her position as Executive Vice President, Media, effective as of the close of business on June 5, 2015. In connection with her resignation, Ms. Campistron entered into a Consulting Agreement with the Company dated as of May 21, 2015, for a term commencing on June 6, 2015 and ending on August 31, 2015, pursuant to which Ms. Campistron received a monthly consulting fee of $20,000 in exchange for her consulting services. In addition, Ms. Campistron received payments totaling $15,000 in exchange for her execution and non-revocation of two general release of claims against the Company.
Outstanding Equity Awards at 20152019 Fiscal Year-End
Demand Media
The following table summarizes, for each named executive officer, the number of shares of Demand Mediaour common stock underlying outstanding equity incentive plan awards as of December 31, 2015. Share and per share amounts for equity awards made to Mr. Weinrot prior to the Rightside Spin-Off have been adjusted to reflect the Rightside Spin-Off and Reverse Stock Split, as applicable.2019. Unless otherwise indicated in the footnotes, the equity incentive plan awards were granted under the 2010 Plan. As of December 31, 2015, neither Ms. Campistron nor Mr. Kim held
| Option Awards | Stock Awards | ||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number Of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number Of Shares Or Units Of Stock That Have Not Vested | Market Value Of Shares Or Units Of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(1) | ||||||||
| Sean Moriarty | March 29,2019(2) | — | — | — | — | — | — | 30,000 | 120,000 | ||||||||
| February 24, 2019(3) | — | — | — | — | 200,000 | 800,000 | — | — | |||||||||
| March 2, 2018(4) | — | — | — | — | 83,338 | 333,352 | — | — | |||||||||
| February 21, 2017(5) | — | — | — | — | 16,668 | 66,672 | — | — | |||||||||
| August 8, 2014(6) | 694,863 | — | 9.77 | August 8, 2024 | — | — | — | — | |||||||||
| August 8, 2014(6) | 184,130 | — | 14.66 | August 8, 2024 | — | — | — | — | |||||||||
| August 8, 2014(6) | 184,130 | — | 19.54 | August 8, 2024 | — | — | — | — | |||||||||
| Jantoon Reigersman | February 24, 2019(3) | — | — | — | — | 90,000 | 360,000 | — | — | ||||||||
| February 13, 2018(7) | — | — | — | — | 87,500 | 350,000 | — | — | |||||||||
| Brian Pike | February 24, 2019(3) | — | — | — | — | 84,000 | 336,000 | — | — | ||||||||
| March 2, 2018(4) | — | — | — | — | 27,085 | 108,340 | — | — | |||||||||
| February 21, 2017(5) | — | — | — | — | 5,417 | 21,668 | — | — | |||||||||
| May 21, 2015(5) | 75,000 | — | 5.29 | May 21, 2025 | — | — | — | — | |||||||||
| December 18, 2014(5) | 30,000 | — | 5.95 | December 18, 2024 | — | — | — | — | |||||||||
| December 18, 2014((5) | 100,000 | — | 5.95 | December 18, 2024 | — | — | — | — | |||||||||
| (1) | The market value of RSUs that have not vested is calculated based on the closing trading price of a share of our common stock as reported on the NYSE on December 31, 2019 ($4.00), the last trading day of fiscal 2019. |
| (2) | The RSUs subject to this award were subject to a performance condition based on a combination of the Company’s revenue growth during fiscal year 2019 and adjusted EBITDA as of December 31, 2019, as described in more detail above under “Compensation Discussion and Analysis, Principal Components of Executive Compensation Program, Long Term Incentives.” One-third (1/3) of the RSUs that the compensation committee deemed to have satisfied the performance condition would have vested on the date of such determination by the compensation committee and the remaining two-thirds (2/3) of the RSUs deemed to have satisfied the performance condition would have vested in two (2) substantially equal installments on December 31, 2020 and December 31, 2021, subject to accelerated vesting under certain circumstances as described below under “—Potential Payments Upon Termination or Change in Control.” Following the end of the fiscal year 2019 performance period, the compensation committee determined that the performance-based vesting conditions were not achieved and, therefore, no portion of this award vested and the award was forfeited in its entirety. |
| (3) | Approximately one-third (1/3) of the RSUs subject to this award vested on February 24, 2020 and the remaining two-thirds (2/3) of the RSUs subject to this award vest in twenty-four (24) substantially equal installments on each monthly anniversary thereafter, subject to continued service with the Company through each applicable vesting date and accelerated vesting under certain circumstances as described below under “—Potential Payments Upon Termination or Change in Control.” |
| (4) | Approximately one-third (1/3) of the RSUs subject to this award vested on March 1, 2019 and the remaining two-thirds (2/3) of the RSUs subject to this award vest in twenty-four (24) substantially equal installments on each monthly anniversary thereafter, subject to continued service with the Company through each applicable vesting date and accelerated vesting under certain circumstances as described below under “—Potential Payments Upon Termination or Change in Control.” |
| (5) | Approximately one-third (1/3) of the RSUs subject to this award vested on March 1, 2018 and the remaining two-thirds (2/3) of the RSUs subject to this award vest in twenty-four (24) substantially equal installments on each monthly anniversary thereafter, subject to continued service with the Company through each applicable vesting date and accelerated vesting under certain circumstances as described below under “—Potential Payments Upon Termination or Change in Control.” |
| (6) | This stock option is fully vested. |
| (7) | Twenty-five percent (25%) of the RSUs subject to this award vested on December 15, 2018 and the remaining RSUs subject to this award vest in thirty-six (36) substantially equal installments on each monthly anniversary thereafter subject to continued service with the Company through each applicable vesting date and accelerated vesting under certain circumstances as described below under “—Potential Payments Upon Termination or Change in Control.” |
Pension Benefits and Nonqualified Deferred Compensation
We do not offer any outstanding Demand Media equity awards.
| | | Option Awards | Stock Awards | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number Of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number Of Shares Or Units Of Stock That Have Not Vested | Market Value Of Shares Or Units Of Stock That Have Not Vested ($)(1) | |||||||||||||
Sean Moriarty | August 8, 2014(2) | 231,620 | 463,243 | 9.77 | August 8, 2024 | — | — | |||||||||||||
| August 8, 2014(2) | 61,376 | 122,754 | 14.66 | August 8, 2024 | — | — | ||||||||||||||
| August 8, 2014(2) | 61,376 | 122,754 | 19.54 | August 8, 2024 | — | — | ||||||||||||||
Rachel Glaser | May 4, 2015(3) | — | 200,000 | 6.50 | May 4, 2025 | — | — | |||||||||||||
| May 4, 2015(4) | — | — | — | — | 75,000 | 412,500 | ||||||||||||||
Brian Pike | May 21, 2015(5) | — | 75,000 | 5.29 | May 21, 2025 | — | — | |||||||||||||
| May 21, 2015(6) | — | — | — | — | 25,000 | 137,500 | ||||||||||||||
| December 18, 2014(7) | 9,999 | 20,001 | 5.95 | December 18, 2024 | — | — | ||||||||||||||
| December 18, 2014(8) | 27,083 | 72,917 | 5.95 | December 18, 2024 | — | — | ||||||||||||||
| December 18, 2014(9) | ��� | — | — | — | 37,500 | 206,250 | ||||||||||||||
Daniel Weinrot | March 4, 2015(10) | — | — | — | — | 10,000 | 55,000 | |||||||||||||
| March 4, 2015(11) | — | — | — | — | 2,976 | 16,368 | ||||||||||||||
| December 18, 2014(7) | 9,999 | 20,001 | 5.95 | December 18, 2024 | — | — | ||||||||||||||
| October 29, 2014(12) | — | — | — | — | 7,500 | 41,250 | ||||||||||||||
| October 29, 2014(13) | 17,499 | 42,501 | 6.88 | October 29, 2024 | — | — | ||||||||||||||
| February 5, 2014(14) | — | — | — | — | 2,013 | 11,072 | ||||||||||||||
| April 5, 2013(15) | — | — | — | — | 934 | 5,137 | ||||||||||||||
| October 30, 2012(16) | — | — | — | — | 1,068 | 5,874 | ||||||||||||||
| July 15, 2010(17) | 5,829 | — | 13.00 | July 15, 2020 | — | — | ||||||||||||||
December 18, 2015 thereafter, subject to continued employment with us through the applicable vesting dates and accelerated vesting under certain circumstances as described below under "—Potential Payments Upon Termination or Change in Control."
Rightside Groupemployees.
In connection with the Rightside Spin-Off, certain outstanding equity awards were adjusted into two equity awards—a Demand Media award and a Rightside award. The following table summarizes the number of shares of Rightside common stock underlying such outstanding Rightside awards for Mr. Weinrot as of December 31, 2015. The vesting schedule for each Rightside award listed in the below table is the same as the corresponding Demand Media award in the above table (and is based on continued service with Demand Media). Messrs. Moriarty and Pike and Ms. Glaser are not included in the below table because they joined the Company after the Rightside Spin-Off. All of Ms. Campistron's and Mr. Kim's unvested Rightside restricted stock units were forfeited when their respective employment with Demand Media terminated and all of their unexercised Rightside stock options have expired.
| | | Option Awards | Stock Awards | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number Of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number Of Shares Or Units Of Stock That Have Not Vested | Market Value Of Shares Or Units Of Stock That Have Not Vested ($)(1) | |||||||||||||
Daniel Weinrot | February 5, 2014 | — | — | — | — | 2,013 | 16,708 | |||||||||||||
| April 5, 2013 | — | — | — | — | 934 | 7,752 | ||||||||||||||
| October 30, 2012 | — | — | — | — | 1,068 | 8,864 | ||||||||||||||
| July 15, 2010 | 5,831 | — | 19.07 | July 15, 2020 | — | — | ||||||||||||||
2015 Option Exercises and Stock Vested
The following table provides information regarding the vesting of Demand Media and Rightside restricted stock unit awards and the exercise of Demand Media and Rightside stock options for each named executive officer during the year ended December 31, 2015. Ms. Glaser did not have any Demand Media or Rightside stock awards vest, nor did she exercise any Demand Media or Rightside stock options, during the year ended December 31, 2015.
| | | Option Awards | Stock Awards | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Company | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||||||||||
Sean Moriarty | Demand Media | — | — | 26,694 | 129,199 | ||||||||||
Peter Kim | Demand Media | 6,250 | 4,375 | 7,681 | 35,608 | ||||||||||
| Rightside | — | — | 572 | 4,505 | |||||||||||
Brian Pike | Demand Media | — | — | 12,500 | 54,375 | ||||||||||
Daniel Weinrot | Demand Media | — | — | 9,999 | 49,246 | ||||||||||
| Rightside | — | — | 3,813 | 30,088 | |||||||||||
Julie Campistron | Demand Media | — | — | 10,103 | 52,527 | ||||||||||
| Rightside | — | — | 1,737 | 14,448 | |||||||||||
Potential Payments Upon Termination or Change in Control
The following summarizes the payments and benefits that our named executive officers would be entitled to receive upon certain qualifying terminations of employment and/or a change in control or, in the case of Mr. Kim, the amounts he actually received upon his qualifying termination in September 2015. Ms. Campistron resigned in June 2015 and she did not receive any payments as a result of her resignation, although she did receive $15,000 in connection with executing two general release of claims against the Company, as described above under "—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table."
control. As discussed above under "Compensation“Compensation Discussion and Analysis,"” we believe that severance and change in control protections are important components of our named executive officers'officers’ compensation packages because these protections provide security and stability that help enable our named executive officers to focus on their duties and responsibilities to the Company and to act with the best interests of the Company and its stockholders in mind at all times, even under circumstances where the interests of the Company and its stockholders may be adverse to the executive'sexecutive’s job security.
Sean Moriarty
Termination of Employment
Pursuant to the 2016 Moriarty Agreement, if Mr. Moriarty'sMoriarty’s employment is terminated by the Company without "cause"“cause”, by Mr. Moriarty for "good reason"“good reason” or as a result of Mr. Moriarty'sMoriarty’s death or "disability"“disability” (each, as defined in the 2016 Moriarty Agreement), then, in addition to payments of accrued compensation and benefits through the date of termination, Mr. Moriarty would be entitled to receive the following benefits:
| · | continuation payments totaling two times Mr. Moriarty’s annual base salary then in effect, payable over the two-year period following the termination of employment (or, in connection with a change in control, as a lump-sum payment); |
| · | a lump-sum payment in an amount equal to any earned but unpaid bonus for the fiscal year that ends on or before the date of termination, payable on the date on which annual bonuses are paid to the Company’s senior executives generally for such year; |
| · | a lump-sum payment in an amount equal to a pro-rata portion of Mr. Moriarty’s annual bonus with respect to the fiscal year in which the date of termination occurs (calculated based on the |
| · | Company-paid healthcare continuation coverage for Mr. Moriarty and his dependents for up to eighteen months after the termination date; and |
| · | (i) upon a qualifying termination outside the change in control context, accelerated vesting of each then unvested equity award held by Mr. Moriarty on the termination date with respect to the number of shares underlying each such equity award that would have vested over the one-year period immediately following the termination date had such qualifying termination not occurred, provided that if Mr. Moriarty had been terminated within one year of the effective date of the Moriarty Agreement, he would have been entitled to accelerated vesting with respect to 50% of the total number of restricted stock units granted to Mr. Moriarty in January 2016 (the “2016 RSU Award”) on the termination date; or (ii) upon a qualifying termination in connection with a change in control, full accelerated vesting of each then-outstanding and unvested equity award held by Mr. Moriarty on the later of the termination date and the date of such change in control. |
Pursuant to the year in whichterms of the termination occurs (or, ifPSU award granted to Mr. Moriarty elects to forego a bonus in a given calendar year, a pro-rata portion of the annual bonus amount the Company's compensation committee determined he was eligible to receive in the prior calendar year);
however, the compensation committee determined that the performance-based vesting conditions were not achieved and, therefore, no portion of the PSU award vested and the date of such changeaward was forfeited in control.
Prior to entering into the 2016 Moriarty Agreement in January 2016, Mr. Moriarty was not entitled to receive the severance payments, benefits or equity accelerations described above if his employment had been terminated as a result of his death or "disability".its entirety.
Mr. Moriarty'sMoriarty’s right to receive the severance payments, benefits and equity accelerations described above is subject to his delivery and non-revocation of an effective general release of claims in favor of the Company. In addition, to the extent that any payment or benefit to be received by Mr. Moriarty would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits will be subject to a "best“best pay cap"cap” reduction if such reduction would result in a greater net after-tax benefit to Mr. Moriarty than receiving the full amount of such payments.
Change in Control
If Mr. Moriarty remains employed by the Company through the consummation of a change in control (as defined in his employment agreement)the Moriarty Agreement), (i) each then-unvested stock option granted to Mr. Moriarty in August 2014 in connection with Mr. Moriarty entering into the 2014 Moriarty Agreement (collectively, the "2014“2014 Moriarty Stock Options"Options”) will vest and become exercisable immediately prior to the change ofin control with respect to 50% of the total number of shares
underlying such 2014 Moriarty Stock OptionOptions (or such lesser number of shares subject to such 2014 Moriarty Stock OptionOptions that remains unvested immediately prior to such change ofin control); and (ii) any unvested portion of the 2016 RSU Award will vest in full immediately prior to the change in control.
Subject to the terms of control. Ifthe PSU Award, in the event of a change of control had occurred on December 31, 2015, Mr. Moriarty would not have received any payments with respectprior to the unvested 2014 Moriarty Stock Options because allcompensation committee’s determination of such optionsthe number of restricted stock units subject to the PSU Award that satisfied the performance condition of the award, 100% of the target restricted stock units subject to the award would have be deemed to have satisfied the performance condition but would have remained subject to the time-based vesting condition of the PSU Award. Following the end of the fiscal year 2019 performance period, however, the compensation committee determined that the performance-based vesting conditions were not achieved and, therefore, no portion of the PSU award vested on an accelerated basis have an exercise price that is higher than our closing stock price on December 31, 2015.
Rachel Glaserand the award was forfeited in its entirety.
If Ms. Glaser's
Jantoon Reigersman and Brian Pike
On February 14, 2019, the compensation committee approved changes to the employment agreements of Messrs. Reigersman and Pike such that in the event any of the executive’s employment is terminated by the Company without "cause," or by Ms. Glaser for "good reason"reason of a qualifying termination, in each case other than in connection with a "change“change in control," or as a result of Ms. Glaser's death or "disability" (each, as defined in the Glaser Agreement), then, in addition to accrued compensation and benefits through the date of termination, Ms. Glaser would be entitled to receive the following benefits:
Ms. Glaser's right to receive the severance payments, benefits and equity accelerations described above is subject to her delivery and non-revocation of an effective general release of claims in favor of the Company. In addition, to the extent that any payment or benefit to be received by Ms. Glaser would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits will be subject to a "best pay cap" reduction if such reduction would result in a greater net after-tax benefit to Ms. Glaser than receiving the full amount of such payments.
Brian Pike; Daniel Weinrot
If Mr. Pike's or Mr. Weinrot's employment is terminated by the Company without "cause," by the executive for "good reason" in connection with a "change in control," or as a result of the executive's death or "disability"control” (each, as defined in the applicable employment agreement), then, in addition to payments of accrued compensation and benefits through the date of termination, theeach executive wouldwill be entitled to receiveto:
| · | a lump-sum payment in an amount equal to 12 months of his then-current annual base salary; |
| · | a lump-sum payment in an amount equal to any earned but unpaid bonus for the fiscal year that ends on or before the date of termination, payable on the date on which annual bonuses are generally paid for such year; |
| · | accelerated vesting of each then unvested outstanding equity award held by the executive on his termination date with respect to the number of shares underlying each such equity award that would have vested over the 12-month period immediately following the termination date had such qualifying termination not occurred; and |
| · | Company-paid healthcare continuation coverage for such executive and his dependents for up to 12 months after the termination date. |
In the following:
| · | a lump-sum payment equal to the amount of the annual bonus paid to the executive during the prior fiscal year pro-rated based upon the length of his employment during the year of termination; and |
| · | full accelerated vesting of all of the executive’s then unvested outstanding equity awards held by the executive on his termination date. |
The executive'sexecutive’s right to receive the severance payments, benefits and equity accelerations described above is subject to the executive'sexecutive’s delivery and non-revocation of an effective general release of claims in favor of the Company. In addition, to the extent that any payment or benefit to be received by the executive would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits will be subject to a "best“best pay cap"cap” reduction if such reduction would result in a greater net after-tax benefit to the executive than receiving the full amount of such payments.
Peter Kim
Pursuant to the Kim Agreement, because Mr. Kim's employment was terminated within six months of the commencement of Ms. Glaser's employment as our permanent Chief Financial Officer, in addition to payments of accrued compensation and benefits through the date of termination, Mr. Kim was entitled to receive the following payments and benefits upon his separation of service from the Company:
Mr. Kim's right to receive the severance payments, benefits and equity accelerations described above was subject to his delivery and non-revocation of an effective general release of claims in favor of the Company.
Summary of Potential Payments
The following table summarizes the payments that would have been made to our named executive officers upon certain qualifying terminations of employment or service, as the case may be, including in connection with a change in control, assuming that each named executive officer's termination of employment, as the case may be, with the Company occurred on December 31, 2015 and, where relevant, that a change in control of the Company occurred on December 31, 2015. Amounts shown in the table below do not include (i) accrued but unpaid salary through the date of termination, or (ii) other benefits earned or accrued by the named executive officer during his employment that are available to all salaried employees.
Name | Benefit | Termination without Cause ($) | Termination for Good Reason ($) | Termination due to death or Disability ($)(1) | Qualifying Termination in Connection with a Change in Control ($) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sean Moriarty | Severance(2) | 1,056,370 | 1,056,370 | — | 1,056,370 | ||||||||||
| Value of Accelerated Restricted Stock Units(3) | — | — | — | — | |||||||||||
| Value of Accelerated Stock Options(4) | — | — | — | — | |||||||||||
| Value of Continued Health Care Coverage Premiums(5) | 34,504 | 34,504 | — | 34,504 | |||||||||||
| Total | 1,090,874 | 1,090,874 | — | 1,090,874 | |||||||||||
Rachel Glaser | Severance(6) | 605,740 | — | 605,740 | 605,740 | ||||||||||
| Value of Accelerated Restricted Stock Units(3) | — | — | — | 412,500 | |||||||||||
| Value of Accelerated Stock Options(4) | — | — | — | — | |||||||||||
| Value of Continued Health Care Coverage Premiums(5) | 23,002 | — | 23,002 | 23,002 | |||||||||||
| Total | 628,742 | — | 628,742 | 1,041,242 | |||||||||||
Brian Pike | Severance(7) | 285,000 | — | 285,000 | 285,000 | ||||||||||
| Value of Accelerated Restricted Stock Units(3) | — | — | — | 343,750 | |||||||||||
| Value of Accelerated Stock Options(4) | — | — | — | 15,750 | |||||||||||
| Value of Continued Health Care Coverage Premiums(5) | 11,352 | — | 11,352 | 11,352 | |||||||||||
| Total | 296,352 | — | 296,352 | 655,852 | |||||||||||
Daniel Weinrot | Severance(7) | 222,500 | — | 222,500 | 222,500 | ||||||||||
| Value of Accelerated Restricted Stock Units(8) | — | — | — | 168,025 | |||||||||||
| Value of Accelerated Stock Options(4) | — | — | — | — | |||||||||||
| Value of Continued Health Care Coverage Premiums(5) | 11,501 | — | 11,501 | 11,501 | |||||||||||
| Total | 234,001 | — | 234,001 | 402,026 | |||||||||||
Peter Kim | Severance(9) | 234,051 | — | — | 222,500 | ||||||||||
| Value of Accelerated Restricted Stock Units(10) | 19,648 | — | — | — | |||||||||||
| Value of Accelerated Stock Options(11) | — | — | — | — | |||||||||||
| Value of Continued Health Care Coverage Premiums(5) | 5,264 | — | — | — | |||||||||||
| Total | 258,963 | — | — | — | |||||||||||
vested on an accelerated basis all have an exercise price that is higher than our closing stock price on December 31, 2015. Additionally, none of the Rightside stock options held by Mr. Weinrot as of December 31, 2015 had an exercise price lower than the closing price of Rightside's common stock on the Nasdaq on December 31, 2015. As such, none of the Rightside stock options held by Mr. Weinrot are included in the above table.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 20152019 regarding compensation plans under which our equity securities are authorized for issuance:
| Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($/share)(1) | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (#) | ||||
| Equity compensation plans approved by stockholders(2) | 4,847,657(3) | $9.88 | 3,827,547(4) | ||||
| Equity compensation plans not approved by stockholders | — | — | — | ||||
| Total | 4,847,657 | $9.88 | 3,827,547 |
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($/share)(1) | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (#) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by stockholders(2) | 4,175,979 | $ | 8.10 | 5,132,068 | (3) | |||||
Equity compensation plans not approved by stockholders | — | — | — | |||||||
| | | | | | | | | | | |
Total | 4,175,979 | $ | 8.10 | 5,132,068 | ||||||
| (1) | The weighted average exercise price is calculated based solely on outstanding stock options. It does not take into account the shares issuable upon vesting of outstanding RSUs, which have no exercise price. There are no warrants or other rights outstanding. |
| (2) | Consists of the 2006 Plan, the 2010 Plan, and the Leaf Group Ltd. 2010 Employee Stock Purchase Plan (the “ESPP”). We are no longer permitted to grant awards under the 2006 Plan. |
| (3) | Under the ESPP, eligible employees are permitted to purchase shares of our common stock at a discount on certain dates through payroll deductions within a pre-determined offering period. Accordingly, the number of shares of common stock to be issued upon exercise of outstanding rights under the ESPP as of December 31, 2019 is not determinable and is therefore not included. |
| (4) | Includes (i) 2,273,462 shares available for issuance under the 2010 Plan and (ii) 1,554,085 shares reserved for issuance under the ESPP. The aggregate number of securities available for issuance under awards granted pursuant to the 2010 Plan as of December 31, 2019 is equal to the sum of (i) 3,827,547 shares;plus (ii) any shares of our common stock subject to awards under the 2010 Plan that are forfeited, expire or settled for cash;plus (iii) any shares of our common stock subject to awards under the 2006 Plan that terminate, expire or lapse for any reason after December 31, 2019;plus (iv) an annual increase in shares on the first day of each calendar year through 2020. The annual increase will be equal to the lesser of (A) 1,200,000 shares, (B) 5% of our common stock outstanding on the last day of the prior calendar year or (C) such smaller number of shares as may be determined by the Board or the compensation committee of the Board. Shares available for issuance under the 2010 Plan can be granted pursuant to stock options, restricted stock, RSU and other incentive awards selected by the plan administrator. As of December 31, 2019, 6,275 shares were subject to purchase based upon the payroll deductions to that date under the ESPP for the current purchase period, which runs until May 15, 2019. |
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of April 21, 2016March 31, 2020 for:
| · | each person, or group of affiliated persons, who we know beneficially owns more than 5% of our outstanding shares of common stock; |
| · | each of our directors; |
| · | each of our named executive officers; and |
| · | all of our current directors and executive officers as a group. |
Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.
Applicable percentage ownership is based on 20,359,39926,603,565 shares of common stock outstanding at April 21, 2016.March 31, 2020. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed to be outstanding all shares of common stock subject to options and/or restricted stock unitsRSUs held by that person or entity that are currently exercisable or exercisable within 60 days of April 21, 2016.March 31, 2020. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Demand Media, Inc.Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404.
| Name of Beneficial Owner | Shares of Common Stock Owned | Rights to Acquire Common Stock(1) | Total Shares of Common Stock Beneficially Owned | Percentage of Outstanding Common Stock | ||||
| 5% Stockholders | ||||||||
| Entities affiliated with Oak Investment Partners(2) | 4,178,412 | — | 4,178,412 | 15.7% | ||||
| Entities affiliated with Spectrum Equity(3) | 2,770,540 | — | 2,770,540 | 10.4% | ||||
| Entities affiliated with Park West Asset Management(4) | 2,556,187 | 2,556,187 | 9.6% | |||||
| Entities affiliated with Osmium Partners(5) | 1,841,775 | — | 1,841,775 | 6.9% | ||||
| Directors and Named Executive Officers | ||||||||
| Sean Moriarty(6) | 335,059 | 1,085,345 | 1,420,404 | 5.1% | ||||
| Jantoon Reigersman(7) | 81,866 | 12,292 | 94,158 | * | ||||
| Brian Pike(8) | 173,770 | 213,277 | 387,047 | 1.4% | ||||
| Charles (Lanny) Baker(9) | - | 9,864 | 9,864 | * | ||||
| Deborah Benton(10) | 3,328 | 10,710 | 14,038 | * | ||||
| Beverly K. Carmichael(11) | 4,485 | 13,505 | 17,990 | * | ||||
| John A. Hawkins(12) | 801,224 | 4,121 | 805,345 | 3.0% | ||||
| John Pleasants(13) | 21,513 | 46,652 | 68,165 | * | ||||
| James R. Quandt(14) | 93,961 | 47,505 | 141,466 | * | ||||
| Brian M. Regan(15) | 8,450 | 32,578 | 41,028 | * | ||||
| Jennifer Schulz(16) | 26,513 | 46,652 | 73,165 | * | ||||
| Mitchell Stern(17) | 24,456 | 52,653 | 77,109 | * | ||||
| All current executive officers and directors (including nominees) as a group (13 persons) | 1,617,430 | 1,582,654 | 3,200,084 | 11.4% |
| * | Represents beneficial ownership of less than 1%. |
Name of Beneficial Owner | Shares of Common Stock Owned | Rights to Acquire Common Stock(1) | Total Shares Beneficially Owned | Percentage of Outstanding Common Stock | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5% Stockholders | |||||||||||||
Entities affiliated with Oak Investment Partners(2) | 4,487,062 | — | 4,487,062 | 22.0 | % | ||||||||
Entities affiliated with Spectrum Equity(3) | 2,770,540 | — | 2,770,540 | 13.6 | % | ||||||||
Entities affiliated with Osmium Partners(4) | 1,660,006 | — | 1,660,006 | 8.2 | % | ||||||||
Entities affiliated with Armistice Capital(5) | 1,156,000 | — | 1,156,000 | 5.7 | % | ||||||||
Entities affiliated with Dimensional Fund Advisors LP(6) | 1,056,420 | — | 1,056,420 | 5.2 | % | ||||||||
Directors and Executive Officers | |||||||||||||
Sean Moriarty(7) | 93,694 | 487,259 | 580,953 | 2.9 | % | ||||||||
Rachel Glaser(8) | — | 102,776 | 102,776 | * | |||||||||
Peter Kim | — | — | — | — | |||||||||
Brian Pike(9) | 14,256 | 82,708 | 96,964 | * | |||||||||
Daniel Weinrot(10) | 14,224 | 45,966 | 60,190 | * | |||||||||
Julie Campistron(11) | 4,936 | — | 4,936 | * | |||||||||
Fredric W. Harman(12) | 4,487,062 | — | 4,487,062 | 22.0 | % | ||||||||
John A. Hawkins(13) | 799,999 | — | 799,999 | 3.9 | % | ||||||||
Victor E. Parker(14) | 2,770,540 | — | 2,770,540 | 13.6 | % | ||||||||
James R. Quandt(15) | 34,754 | 14,411 | 49,165 | * | |||||||||
Brian M. Regan(16) | 4,817 | 13,851 | 18,668 | * | |||||||||
Mitchell Stern | — | — | — | — | |||||||||
All current executive officers and directors (including nominees) as a group (10 persons) | 8,219,346 | 746,971 | 8,966,317 | 44.0 | % | ||||||||
| (1) | Represents shares which the person or group has a right to acquire within sixty (60) days of March 31, 2020, upon the exercise of options or the vesting of RSUs. Does not include RSUs that vest more than sixty (60) days after March 31, 2020. |
| (2) | Based upon a Schedule 13G/A filed with the SEC on January 23, 2020 by Oak Investment Partners XI, Limited Partnership (“Oak XI”), Oak Associates XI, LLC, Oak Investment Partners XII, Limited Partnership (“Oak XII”), Oak Associates XII, LLC and Oak Management Corporation (“Oak Management”) and a Form 4 filed with the SEC on March 17, 2020 by Oak XI and Oak XII. Includes (i) 2,948,287 shares held by Oak XI and (ii) 1,230,125 shares held by Oak XII. Oak XI has |
| sole voting and dispositive power over the shares it holds, and Oak XII has sole voting and dispositive power over the shares it holds. Oak Associates XI, LLC is the general partner of Oak XI and may be deemed to share voting and dispositive power over the shares held by Oak XI. Oak Associates XII, LLC is the general partner of Oak XII and may be deemed to share voting and dispositive power over the shares held by Oak XII. Oak Management is the manager of Oak XI and Oak XII and may be deemed to share voting and dispositive power over the shares held by Oak XI and Oak XII. Bandel L. Carano, Edward F. Glassmeyer, Fredric W. Harman and Ann H. Lamont are the managing members of Oak Associates XI, LLC, and, as such, may be deemed to possess shared beneficial ownership of the shares held by the Oak XI. Bandel L. Carano, Edward F. Glassmeyer, Fredric W. Harman, Ann H. Lamont, and Grace A. Ames are the managing members of Oak Associates XII, LLC and, as such, may be deemed to possess shared beneficial ownership of the shares held by Oak XII. The address of each of the entities listed is c/o Oak Management Corporation, 901 Main Avenue, Suite 600, Norwalk, CT 06851. |
| (3) | Based upon a Schedule 13G/A filed with the SEC on January 21, 2015 by Spectrum Equity Investors V, L.P. (“SEI V”), Spectrum Equity Associates V, L.P. (“SEA V”), SEA V Management, LLC (“SEA V Management”) and Spectrum V Investment Managers’ Fund, L.P. (“IMF V” and together with SEI V, SEA V and SEA V Management, the “Spectrum Funds”). Includes (i) 2,756,688 shares held by SEI V and (ii) 13,852 shares held by IMF V. SEA V is the sole general partner of SEI V. SEA V Management is the sole general partner of SEA V and the sole general partner of IMF V. By virtue of their relationship as affiliated entities, whose controlling entities have overlapping individual controlling persons, each of the Spectrum Funds may be deemed to share the power to direct the disposition and vote of the 2,770,540 aggregate shares held by the Spectrum Funds. Each of the Spectrum Funds and each of the managing directors of SEA V Management disclaim any beneficial ownership of the shares held by the Spectrum Funds, except for any shares held of record and except to the extent of any individual pecuniary interest therein. The principal business address of each of the Spectrum Funds is Spectrum Equity Management, 140 New Montgomery, 20th Floor, San Francisco, CA 94105. |
| (4) | Based upon a Schedule 13G/A filed with the SEC on February 14, 2020 by Park West Asset Management LLC (“PWAM”), Park West Investors Master Fund, Limited (“PWIMF”) and Peter Park. Includes 2,320,469 shares held by PWIMF. PWAM is the investment manager to PWIMF and Park West Partners International, Limited, a Cayman Islands exempted company (collectively, the “PW Funds”). Mr. Park is the sole member and manager of PWAM. |
| (5) | Based upon a Schedule 13G/A filed with the SEC on February 14, 2020 by John H. Lewis, Osmium Partners, LLC (“Osmium Partners”), Osmium Capital, LP (the “Fund”), Osmium Capital II, LP (“Fund II”), Osmium Spartan, LP (“Fund III”) and Osmium Diamond, LP (“Fund IV” and collectively with the Fund, Fund II and Fund III, the “Osmium Funds”). Includes (i) 758,992 shares held by the Fund, (ii) 327,715 shares held by Fund II, (iii) 286,404 shares held by Fund III and (iv) 468,664 shares held by Fund IV. Mr. Lewis and Osmium Partners may be deemed to share voting and dispositive power with the Osmium Funds with respect to the shares held by each Osmium Fund. Mr. Lewis, Osmium Partners and each Osmium Fund disclaim beneficial ownership with respect to any shares other than the shares each Osmium Fund owns directly. The principal business address of Mr. Lewis, Osmium Partners and each of the Osmium Funds is 300 Drakes Landing Road, Suite 172, Greenbrae, CA 94904. |
| (6) | Shares of common stock owned consist of 335,059 shares held directly by Mr. Moriarty. The rights to acquire common stock includes 1,063,123 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 22,222 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (7) | Shares of common stock owned consist of 81,866 shares held directly by Mr. Reigersman. The rights to acquire common stock includes 12,292 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (8) | Shares of common stock owned consist of 173,770 shares held directly by Mr. Pike. The rights to acquire common stock includes 205,000 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 8,277 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (9) | The rights to acquire common stock includes 7,011 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 2,853 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (10) | Shares of common stock owned consist of 3,328 shares held directly by Ms. Benton. The rights to acquire common stock includes 9,878 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 832 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (11) | Shares of common stock owned consist of 4,485 shares held directly by Ms. Carmichael. The rights to acquire common stock includes 12,553 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 952 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (12) | Shares of common stock consist of (i) 793,190 shares held by Generation Capital Partners II LP (“GCP”), (ii) 6,809 shares held by Generation Members’ Fund II LP (“GMF,” and together with GCP, the “Generation Funds”), and (iii) 1,225 shares |
| held directly by Mr. Hawkins. Mr. Hawkins is Managing Partner and co-founder of Generation Partners and has shared power to vote and dispose of the shares held by the Generation Funds. These shares may be deemed to be beneficially owned by Mr. Hawkins and the Generation Funds. Mr. Hawkins disclaims beneficial ownership of these shares except to the extent of any pecuniary interest therein. The address for Mr. Hawkins is One Maritime Plaza, Suite 1555, San Francisco, CA 94111 and the address for the Generation Funds is One Greenwich Office Park, Greenwich, CT 06831. The rights to acquire common stock are held directly by Mr. Hawkins and include 3,712 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 409 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (13) | Shares of common stock owned consist of 21,513 held directly by Mr. Pleasants. The rights acquire common stock includes 45,847 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020 and 805 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
20 Genesis Close, P.O. Box 314, Grand Cayman KY1-1104, Cayman Islands, c/o dms Corporate Services Ltd.
| (14) | Shares of common stock owned consist of 93,961 shares held directly by Mr. Quandt. The rights to acquire common stock includes 46,700 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020, and 805 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (15) | Shares of common stock owned consist of 8,450 shares held directly by Mr. Regan. The rights to acquire common stock includes 32,169 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020, and 409 shares subject to RSUs that will vest within 60 days of March 31, 2020. Although Mr. Regan is currently Managing Director and Chief Financial Officer of Spectrum Equity Management, he is not affiliated with any of the Spectrum Funds and does not have any beneficial interest (direct or indirect) in any of the shares held by the Spectrum Funds. |
| (16) | Shares of common stock owned consist of 21,513 held directly by Ms. Schulz as a result of the vesting of previously granted RSUs, plus an additional 5,000 shares held by Ms. Schulz which were acquired via open market purchases prior to Ms. Schulz joining the Board. The rights acquire common stock includes 45,847 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020, and 805 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
| (17) | Shares of common stock owned consist of 24,456 shares held directly by Mr. Stern. The rights to acquire common stock include 51,848 shares subject to stock options that are exercisable or will become exercisable within 60 days of March 31, 2020, and 805 shares subject to RSUs that will vest within 60 days of March 31, 2020. |
Mr. Hawkins disclaims beneficial ownership of these shares except to the extent of any pecuniary interest therein. The address for Mr. Hawkins is One Maritime Plaza, Suite 1555, San Francisco, CA 94111 and the address for the Generation Funds is One Greenwich Office Park, Greenwich, CT 06831.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Review of Related Party Transactions
Our Board has adopted a written related party transaction policy to set forth the policies and procedures for the review and approval or ratification of transactions between the Company and its directors, director nominees, executive officers, beneficial holders of more than 5% of our common stock and their respective immediate family members. This policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, the amount involved exceeds $100,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness or employment by us of a related person. While the policy covers any related party transaction in which the amount involved exceeds $100,000, only related party transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years are required to be disclosed in applicable filings as required by the Securities Act, Exchange Act and related rules. Our Board has set the lower $100,000 threshold for approval of related party transactions because we believe it is important and appropriate for our audit committee to review transactions or potential transactions in which the amount involved exceeds $100,000, as opposed to $120,000.$100,000.
Pursuant to our related party transaction policy, our audit committee will (i) review the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm's-lengtharm’s-length dealings with an unrelated third party and the extent of the related party'sparty’s interest in the transaction, and (ii) take into account the conflicts of interest and corporate opportunity provisions of our code of business conduct and ethics. Management will present to our audit committee each proposed related party transaction, including all relevant facts and circumstances relating thereto, and will update the audit committee as to any material changes to any related party transaction. Related party transactions may only be consummated if our audit committee has approved or ratified the transaction in accordance with the guidelines set forth in the policy. Certain types of transactions have been pre-approved by our audit committee under the policy. These pre-approved transactions include: (i) certain compensation arrangements; (ii) transactions in the ordinary course of business where the related party'sparty’s interest arises only from (a) his or her position as a director of another entity that is party to the transaction, (b) an equity interest of less than 5% in another entity that is party to the transaction, or (c) a limited partnership interest of less than 5%, subject to certain limitations; and (iii) transactions in the ordinary course of business where the interest of the related party arises solely from the ownership of a class of equity securities in our Company that provides all holders of such class of equity securities with the same benefit on a pro rata basis. No director may participate in the approval of a related party transaction for which he or she is a related party.
Described below are related party transactions to which we were a party during our last fiscal year, or to which we will be a party, in which the amounts involved exceeded or will exceed $120,000.the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years.
Stockholders' Agreement. We are party to a stockholders' agreement which provides that holders of our common stock that was issued upon conversion of our convertible preferred stock have the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing. The stockholders' agreement also contains restrictions on the issuance or transfer of shares, including certain corporate governance provisions. The original stockholders' agreement contained agreements among the parties with respect to the election of our directors and some of our current directors were originally nominated and elected pursuant to the
terms of the stockholders' agreement. The provisions of the stockholders' agreement relating to the nomination and election of directors terminated upon completion of our initial public offering.
Indemnification Agreements. We have entered into an indemnification agreement with each of our directors and executive officers. The indemnification agreements and our amended and restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law.
The following report of the Audit Committeeaudit committee shall not be deemed to be "soliciting material"“soliciting material” or to otherwise be considered "filed"“filed” with the SEC, and such information shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the Company specifically incorporates such information by reference in such filing.
The primary purpose of the audit committee is to oversee our financial reporting processes on behalf of our Board. The audit committee'scommittee’s functions are more fully described in its charter, which is available on our website athttp://ir.demandmedia.com/ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx. Management has the primary responsibility for our financial statements and reporting processes, including our systems of internal controls. In fulfilling its oversight responsibilities, the audit committee reviewed and discussed with management Demand Media'sLeaf Group’s audited financial statements as of and for the year ended December 31, 2015.2019.
The audit committee has discussed with PricewaterhouseCoopersDeloitte & Touche LLP, our independent registered public accounting firm for the year ended December 31, 2019, the matters required to be discussed by Statement on Auditing Standards ("SAS") No. 61, as amended (AICPA,Professional Standards, Vol. 1. AU section 380), as adopted bythe applicable requirements of the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”) in Rule 3200T.and the SEC. In addition, the audit committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopersDeloitte & Touche LLP required by the applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP'sDeloitte & Touche LLP’s communications with the audit committee concerning independence and has discussed with PricewaterhouseCoopersDeloitte & Touche LLP its independence from us. Finally, the audit committee discussed with PricewaterhouseCoopersDeloitte & Touche LLP, with and without management present, the scope and results of PricewaterhouseCoopers LLP'sDeloitte & Touche LLP’s audit of such financial statements.
Based on these reviews and discussions, the audit committee recommended to the Board that such audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20152019 for filing with the SEC.
Audit Committee of the Board
Mitchell Stern—ChairpersonJohn A. Hawkins
Jennifer Schulz
James R. Quandt
Limitations on Hedging and Pledging Stock
Our Insider Trading Compliance Program, which applies to all of our directors and employees, including our executive officers, prohibits aggressive or speculative stock trading techniques, including the purchase or sale of put or call options related to our common stock, which is listed on the NYSE. Furthermore, our Insider Trading Compliance Program only permits the pledge of shares to act as collateral for a margin loan when an executive officer, director or employee is not subject to a designated blackout period, thereby limiting the ability of officers, directors and employees to have margin loans secured by our common stock.
Delinquent Section 16(a) Beneficial Ownership Reporting Compliance
Reports
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of our Company. Specific due dates have been established by the SEC, and we are required to disclose in this proxy statement any failure to file required ownership reports by these dates.
Based solely on a review of copies of such forms that we received from such persons with respect to their transactions in fiscal 2015,2019, and the written representations received from certain reporting persons that no other reports were required, other than as disclosed below, we believe that all directors, executive officers and persons who own more than 10% of our common stock have complied with the Section 16(a) reporting requirements.requirements, with the following exception: Brian Gephart inadvertently failed to file on a timely basis a Form 4 with respect to the grant to him of 30,000 RSUs on July 24, 2019.
Stockholder Proposals and Nominations
Proposals Pursuant to Rule 14a-8. Pursuant to Rule 14a-8 under the Exchange Act, stockholders may present proper proposals for inclusion in the proxy statement and for consideration at our next annual meeting of stockholders. To be eligible for inclusion in the 20172021 proxy statement, your proposal must be received by us no later than January 1, 2017,December 21, 2020, and must otherwise comply with Rule 14a-8. While our Board will consider stockholder proposals, we reserve the right to omit from the proxy statement stockholder proposals that we are not required to include under the Exchange Act, including Rule 14a-8.
Proposals and Nominations Pursuant to Our Bylaws. Under our bylaws, in order to nominate a director or bring any other business before the stockholders at the 20172021 annual stockholder meeting, without such nomination or business being included in our proxy statement, you must notify us in writing and such notice must be received by us no earlier than February 16, 2017January 18, 2021 and no later than March 18, 2017;February 17, 2021; provided that if the date of the annual meeting is earlier than May 17, 2017April 18, 2021 or later than August 15, 2017,July 17, 2021, you must give notice not earlier than the 120th120th day prior to the annual meeting and not later than the 90th90th day prior to the annual meeting date or, if later, the 10th10th day following the day on which public disclosure of the annual meeting date is first made (such notice within such time periods, "Timely Notice"“Timely Notice”). In addition, with respect to nominations for directors, if the number of directors to be elected at the 20172021 annual meeting is increased after March 18, 2017,February 17, 2021, and there is no public announcement by us naming all of the nominees for director by March 8, 2017,February 7, 2021, notice will also be considered timely, but only with respect to nominees for the additional directorships, if it is delivered to us by the close of business on the 10th day following the day on which we first make such public announcement.
The nominating and corporate governance committee of the Board will consider suggestions from stockholders for potential director nominees to be presented at the 20172021 annual meeting. The person recommending the nominee must be a stockholder entitled to vote at the 20172021 annual meeting, and the recommendation must be made pursuant to Timely Notice. The nominating and corporate governance committee will consider nominees suggested by stockholders on the same terms as nominees selected by the nominating and corporate governance committee. For proposals not made in accordance with Rule 14a-8, you must comply with specific procedures set forth in our bylaws and the nomination or proposal must contain the specific information required by our bylaws. You may write to our Corporate Secretary at our principal executive offices, 1655 26th Street, Santa Monica, California 90404, to deliver the notices discussed above and to request a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates pursuant to the bylaws.above.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as "householding,"“householding,” potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of banks and brokers with account holders who are our stockholders willmay be householding our proxy materials. AIf a bank or broker engages in householding of our proxy materials, a single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your bank or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, please notify your bank or broker, direct your written request to Investor Relations, Demand Media, Inc.Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404, or contact Investor Relations by telephone at (310) 656-6253.656-6346.
Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act or the Exchange Act, which might incorporate future filings made by us under those statutes, the sections of this proxy statement titled "Audit“Audit Committee Report" and "Compensation Committee Report"Report” will not be incorporated by reference into any of those prior filings, nor will such reportsreport be incorporated by reference into any future filings made by us under those statutes. In addition, information on our website, other than our proxy statement, notice and form of proxy, is not part of the proxy soliciting materials and is not incorporated herein by reference.
Availability of Annual Report on Form 10-K
Copies of ourAnnual Report on Form 10-K for the year ended December 31, 20152019 as filed with the SEC (exclusive of exhibits and documents incorporated by reference) may be obtained for free by directing written requests to our Corporate Secretary, Demand Media, Inc.Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404. Copies of exhibits and basic documents filed with the Annual Report on Form 10-K or referenced therein will be furnished to stockholders upon written request and payment of a nominal fee in connection with the furnishing of such documents. You may also obtain the Annual Report on Form 10-K over the Internet at the SEC'sSEC’s website,http://www.sec.gov, or on the investor relations page of our website,http://ir.demandmedia.com/investor-overview/proxy-and-annual-meeting/default.aspx.
The Board knows of no other matters that will be presented for consideration at the annual meeting. If any other matters are properly brought before the annual meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment, and the proxy includes discretionary authority to do so.
| BY ORDER OF THE BOARD OF DIRECTORS | ||
Santa Monica, California | ||
| April |
| VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of
the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
| D07887-P38348 KEEP THIS PORTION FOR YOUR RECORDS | |
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. LEAF GROUP LTD. The Board of Directors recommends you vote FOR each of the following | ||||||||||||||||||
nominees: For Withhold For All AllAllExcept To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. ! ! ! 1. | Election of Directors |
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Nominees: 01) Charles (Lanny) Baker 02) Jennifer Schulz The Board of Directors recommends you vote FOR |
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box and write them on the back where indicated. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice & Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D07888-P38348 LEAF GROUP LTD. Annual Meeting of Stockholders
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AM (Pacific Time) This proxy is solicited by the Board of Directors The undersigned hereby appoints Sean Moriarty, |
THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED |
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side Address Changes/Comments: |
