SECURITIES AND EXCHANGE COMMISSION
(Rule 14a-101)SCHEDULE 14A INFORMATION
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| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted byRule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to§240.14a-2 |
COMSCORE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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LETTER FROM OUR CHIEF EXECUTIVE OFFICER
AND EXECUTIVE VICE CHAIRMAN
May 29, 2020
Dear Fellow Shareholders,
2019 was a milestone year for Comscore as we celebrated our20th anniversary. From inception, Comscore has ushered in monumental change with our census-based approach to measurement of the digital, TV, and movie industries. We have built our measurement systems to anticipate the continued evolution of entertainment, social interactions, and information sharing in a cross-platform world.
Looking back, it’s hard to overstate how much the media and advertising landscape has changed. We are proud to bea trusted partner in planning, transacting, and evaluating media across platforms. We are the leader in connecting the value of consumer behavior to media consumption, allowing the industry to move beyond age/gender demographics for consumer targeting and segmentation.
Our mission has never been more relevant. We are living in extraordinary times, and consumer behavior continues to change and adapt to each new normal. TheCOVID-19 pandemic brought immediate and deep changes to consumer behavior – some of which may well become permanent. This crisis has unfolded in a pivotal time of innovation and upheaval in the media, marketing, and entertainment industries. Comscore’s contactless andnon-invasive measurement enables effective advertising at unprecedented scale and precision, even during thisCOVID-19 period. The importance of Comscore’s information and analytics is particularly evident during difficult economic times, as buyers and sellers of advertising require ever greater efficiency and effectiveness of their media.
Moreover, as the world must now be more diligent than ever to protect consumer privacy, and industry regulations have become more stringent, I am proud that Comscore has always considered consumer privacy first. Our mission is to design and build services that our partners use to understand the return on their media investments while retaining their customers’ trust.
In this environment, the media ecosystem needs independent third-party measurement more than ever. Our information assets, research heritage, and forward-looking industry leadership confirm that Comscore is built to win.
As we look to the future, we are positioned as the transaction currency in a multi-screen entertainment ecosystem with our differentiated services and superior cross-platform assets. Our unparalleled massive and passive media information datasets measure TV, digital, and movie consumption and behavior nationally and across local U.S. markets, and digital and movie consumption internationally. Look for us to expand our international footprint across TV and digital to complement our global measurement of movies.
Looking Ahead in 2020
As we begin to see the green shoots of an economic recovery, Comscore is building momentum with innovation, partnerships, deals, and renewals.
Local and National TV
2020 commenced with a notable partnership: our landmark agreement with Comcast to integrate their TV homes into our local and national TV footprint. This expanded relationship with Comcast marks a major milestone in our long-term growth plan, as we believe Comcast’s information will vastly enhance our national and local TV and cross-platform ratings services.
Comscore is well-positioned to capitalize on the trends towards addressable advertising and impression-level measurement. We have actively provided these services for years to several existing MVPD partners, and in 2019 we added Xandr’s Addressable Advertising Consortium to that list in another landmark agreement. Our robust third-party measurement in turn allows the agency community to transact business using these advanced capabilities. We’re now aggressively pursuing expansion to empower national cable networks to take advantage of addressable advertising, while maintaining an adjusted national TV measurement. Our partners on both the buy and sell sides are excited about the potential.
Our game-changing partnership with LiveRamp leverages our television and video intelligence to facilitate development of new and innovative privacy-focused services across the advertising landscape. This agreement was designed to help Comscore expand its collaboration with brands using our TV, digital, and addressable services. In conjunction with Comscore’s relationships with the MVPDs, large digital companies, and ACR (Automatic Content Recognition) technologies, the partnership goals are to expand our value proposition versus our competitors’ and bolster our competitive advantage.
Comscore continues to innovate with our linear TV solutions. We’ve recently launched QuickScore™, a new TV ratings report that delivers rapid insights to our local television customers. Local stations are already benefiting from their ability to make speedy promotional and programming decisions and adjust campaignson-the-fly, boosting overall campaign success in a fast-changing viewing environment.
Our TV solutions continue to gain traction in the Local TV marketplace, as demand for Comscore’s multi-sourced, massive and passive measurement continues to grow. Today, nearly one thousand local TV stations in the U. S. subscribe to our TV measurement suite, while hundreds of advertisers or their agencies are using us as currency.
Digital
In our digital suite, we are rolling out weekly reporting from our digital panel in order to highlight ever-changing media consumption trends. Additionally, our integration with Twitch (announced in March 2020) is designed to power our gaming ande-sports measurements across devices. This service will allow game publishers, platforms, sports leagues, and teams to create an advertising ecosystem based on validated and comparable metrics across platforms.
As the world becomes increasingly privacy-focused and third-party cookies are eliminated, we are evolving our census-based network to meet these demands. Utilizing our exclusiveopt-in digital panel, we are measuring media interactions across platforms. The combination of our panel plus census network equals a distinct strategic advantage for Comscore in the new digital paradigm.
Movies
Our core movies business performed well in 2019, maintaining the global standard for worldwide box office measurement and analytics. Today, every major studio and over 75 independent studios use our services, and we measure ticket sales from more than 25,000 theaters and 160,000 screens in over 70 countries. When theCOVID-19 pandemic began, we pivoted quickly to help our studio customers track their releases on theon-demand platforms.
Over the long-term, we remain confident in our movies business and the potential to measure movies and video across all screens. We believe the magic of the movie-going experience will endure.
People often ask us how Comscore wins in the new measurement environment. The answer is thatonly Comscore has the infrastructure and deep data assets needed to capture the precise measurement of today’s fragmented media climate. Our clients choose us – and stay with us – because we can offer what no one else can: thecensus-based, panel-informed intelligence that they need to move their businesses forward.
I thank our investors for your ongoing support, confidence, and trust. Thank you, also, to our growing roster of customers and talented employees for helping to drive our success.
Kindest regards,
Bill Livek
Chief Executive Officer and Executive Vice Chairman
Please refer toAnnex B for a description of the risks and uncertainties related to the forward-looking statements included in this proxy statement.
11950 Democracy Drive,
Suite 600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 21, 2015
To the Stockholders of comScore, Inc.:
9, 2020Notice is hereby given that the 2015 Annual Meeting2020 annual meeting of Stockholdersstockholders (the “2015“2020 Annual Meeting”) of comScore, Inc. (the “Company”“company,” “Comscore,” “we” or “our”) will be held at the Company’s officesCarr Workplaces, located at 11950 Democracy Drive,1818 Library Street, Suite 600,500, Reston, Virginia 20190 on Tuesday, July 21, 2015,9, 2020, at 11:1510:00 a.m. ETEastern Time for the following purposes:
to elect two Class II members of the Board of Directors to serve until the 2018 annual meeting of stockholders;
to ratify the appointment of Ernst & Young LLP as the Company’s | 1) | to elect the two nominees named in this proxy statement as Class I directors to serve for terms expiring at our 2023 annual meeting of stockholders, to hold office until their respective successors have been duly elected and qualified; |
| 2) | to approve, on anon-binding advisory basis, the compensation paid to our named executive officers; |
| 3) | to ratify the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; |
| 4) | to approve an amendment and restatement of our 2018 Equity and Incentive Compensation Plan (the “2018 Plan”) to increase the number of shares of our common stock available for grant by 9,600,000 and to make other changes to the 2018 Plan as described in this proxy statement; and |
| 5) | to transact any other business that is properly brought before the meeting or any adjournment or postponement thereof. |
We intend to hold the 2020 Annual Meeting in person. However, we are actively monitoring the coronavirus(COVID-19) pandemic, and we are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the 2020 Annual Meeting in person, we will announce alternative arrangements for the fiscal year ending December 31, 2015;
to approve on an advisory basis the compensation awarded to our named executive officers in 2014; and
to transact any other business that is properly brought beforemeeting as promptly as practicable, which may include holding the meeting partially or any adjournment or postponement thereof.
The preceding itemssolely by means of businessremote communication. Please monitor our website athttps://ir.comscore.com/news-events/events-presentations for updated information. If you are more fully described inplanning to attend our meeting, please check the proxy statement filed withwebsite 10 days prior to the U.S. Securities and Exchange Commission on or about June 8, 2015. Any action onmeeting date. As always, we encourage you to vote your shares prior to the items of business described above may be considered at the 20152020 Annual Meeting at the time and on the date specified above or at any time and date to which the 2015 Annual Meeting may be properly adjourned or postponed.
Meeting.Stockholders of record at the close of business on June 5, 2015May 20, 2020 are entitled to notice of, and to vote at, the 20152020 Annual Meeting or any adjournment or postponement thereof. The presence, in person or represented by proxy, of shares of the Company’s common stock representing a majority of shares of the Company’scompany’s common stock issued and outstanding on the record date will be required to establish a quorum at the 20152020 Annual Meeting.
We are furnishing our proxy materials to all of our stockholders over the Internet rather than in paper form. We believe that this delivery process reduces our environmental impact and lowers the costs of printing and distributing our proxy materials without affecting our stockholders’ timely access to this important information. Accordingly, stockholders of record at the close of business on June 5, 2015,May 20, 2020 will receive a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) and may vote at the 2015 Annual Meeting and will receive notice of any postponements or adjournments of the meeting. The Notice of Internet Availability is being distributed to stockholders beginning on or about June 11, 2015.
May 29, 2020.Your vote is very important. Whether or not you plan to attend the 20152020 Annual Meeting, we encourage you to read the proxy statement and vote as soon as possible. For specific instructions on how to vote your shares, please refer to the section in the Proxy Statementproxy statement entitled “Questions and Answers About the 2015 2020
Annual Meeting and Procedural Matter”Matters” and the instructions onin the Notice of Internet Availability. If you are a stockholder of record of the Company’scompany’s common stock, you may cast your vote by proxy or in person at the annual meeting.2020 Annual Meeting. If your shares are held in an account atby a brokerage firmbank, broker or bank,other nominee, you should instruct itsuch nominee on how to vote your shares.
Thank you for your continued support of comScore.
Comscore. |
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| Reston, Virginia | | By Order of the Board of Directors, |
Reston, VirginiaMay 29, 2020 | |
June 8, 2015 | /s/ Christiana L. Lin |
| Christiana L. Lin |
| General Counsel
Carol A. DiBattiste Chief Legal and SecretaryCompliance Officer |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on July 9, 2020.
This proxy statement and our Annual Report on Form10-K for the year ended December 31, 2019 are available at:
https://materials.proxyvote.com/20564W
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 21, 2015
TABLE OF CONTENTS
9, 2020Table of Contents
i
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
JULY 21, 2015
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
STOCKHOLDER MEETINGTO BE HELD ON JULY 21, 2015
The proxy statement and annual report to stockholders are available at http://www.astproxyportal.com/ast/25890.
9, 2020In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission or SEC,(“SEC”), we are pleased to provide access to our proxy materials over the Internet to all of our stockholders rather than in paper form. Accordingly, a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) has been mailed to our stockholders beginning on or about June 11, 2015.May 29, 2020. Stockholders will have the ability to access the proxy materials on the website listed above, or to request that a printed set of the proxy materials be sent to them by following the instructions in the Notice of Internet Availability. By furnishing a Notice of Internet Availability and access to our proxy materials by the Internet, we are lowering the costs and reducing the environmental impact of our annual meeting.
The Notice of Internet Availability will also provide instructions on how you may request that we send future proxy materials to you electronically by electronic maile-mail or in printed form by mail. If you chooseelect to receive future proxy materials by electronic mail,e-mail, you will receive an electronic maile-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by electronic maile-mail or printed form by mail will remain in effect until you terminate it. We encourage you to chooseelect to receive future proxy materials by electronic mail,e-mail, which will allow us to provide you with the information you need in a more timely manner, will save us the cost of printing and mailing documents to you, and will conserve natural resources.
This proxy statement and accompanying proxy card and notice are expected to bebeing made available or distributed to stockholders beginning on or about June 11, 2015.May 29, 2020.
QUESTIONS AND ANSWERS ABOUT THE 20152020 ANNUAL MEETING AND
PROCEDURAL MATTERS
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| Q: | Why am I receiving these proxy materials?
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| A: | The Board of Directors (the “Board”) of comScore, Inc. (the “Company,“company,” “comScore,“Comscore,” “we,” “us” or “our”) has made these proxy materials available to you onover the Internet, or is providing printed proxy materials to you, in connection with the Board’s solicitation of proxies for use at comScore’s 2015Comscore’s 2020 Annual Meeting of Stockholders (the “2015“2020 Annual Meeting”) to be held Tuesday,on July 21, 2015,9, 2020, at 11:1510:00 a.m., Eastern Time, and at any adjournment or postponement thereof, for the purpose of considering and acting upon the matters set forth in this proxy statement. These proxy materials are being made available or distributed to you beginning on or about June 11, 2015.May 29, 2020. As a stockholder, you are invited to attend the 20152020 Annual Meeting and are requested to vote on the proposals described in this proxy statement.
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| Q: | Where is the 20152020 Annual Meeting?
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| A: | The 20152020 Annual Meeting will be held at the Company's offices at 11950 Democracy Drive,1818 Library Street, Suite 600,500, Reston, Virginia 20190.
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We intend to hold the 2020 Annual Meeting in person. However, we are actively monitoring theCOVID-19 pandemic, and we are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the 2020 Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting partially or solely by means of remote communication. Please monitor our website athttps://ir.comscore.com/news-events/events-presentations for updated information. If you are planning to attend our meeting, please check the website 10 days prior to the meeting date. As always, we encourage you to vote your shares prior to the 2020 Annual Meeting.
| Q: | Can I attend the 20152020 Annual Meeting?
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| A: | You are invited to attend the 20152020 Annual Meeting if you were a stockholder of record or a beneficial owner as of June 5, 2015May 20, 2020 (the “Record Date”). or if you are a proxy holder for a stockholder of record or beneficial owner as of the Record Date. You should bring photo identification and your Notice of Internet Availability, a statement from your bank, broker or other nominee or other proof of stock ownership as of the Record Date, for entrance to the 20152020 Annual Meeting. The meeting will begin promptly at 11:1510:00 a.m., Eastern Time, and you should leaveallow ample time forcheck-in procedures. We will not be able to accommodate guests who were not stockholders as of the Record Date (or proxy holders for such stockholders) at the 20152020 Annual Meeting.
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| Q: | Who is entitled to vote at the 20152020 Annual Meeting?
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| A: | You may vote your shares of comScoreComscore common stock (“Common Stock”) if our records show that you owned your shares at the close of business on the Record Date. At the close of business on the Record Date, there were 40, 237,52670,865,075 shares of comScore common stockCommon Stock issued and outstanding and entitled to vote at the 20152020 Annual Meeting. You may cast one vote for each share of common stockCommon Stock held by you as of the Record Date on all matterseach matter presented. As of the Record Date, holders of common stock are eligible to cast an aggregate of 40, 237,526 votes at the 2015 Annual Meeting.
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| Q: | What is the difference between holding shares as a stockholder of record orand as a beneficial owner?
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| A: | If your shares are registered directly in your name with comScore’sComscore’s transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the “stockholder of record,” and the Notice of Internet Availability has been sent directly to you by comScore.Comscore. As the stockholder of record, you have the right to grant your voting proxy directly to comScoreComscore or to a third party, or to vote in person at the 20152020 Annual Meeting.
If your shares are held by a brokerage account or by a bank or another nominee, you are considered the “beneficial owner” of shares held in “street name,” and the Notice of Internet Availability has been forwarded to you by your broker, trustee or nominee who is considered, with respect to those shares, the stockholder of record. As a beneficial owner, you have the right to direct your broker, trustee or nominee how to vote your shares. Please refer to the voting instruction card provided by your broker, trustee or nominee. You are also invited to attend the 2015Annual Meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the 2015 Annual Meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the 2015 Annual Meeting.
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If you hold your shares through a bank, broker or another nominee, you are considered the “beneficial owner” of shares held in “street name,” and the Notice of Internet Availability has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, the stockholder of record. As a beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares. Please refer to the voting instruction card provided by your bank, broker or other nominee. You are also invited to attend the 2020 Annual Meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the 2020 Annual Meeting unless you obtain a “legal proxy” from the bank, broker or other nominee that holds your shares, giving you the right to vote the shares at the 2020 Annual Meeting.
| Q: | How can I vote my shares in person at the 20152020 Annual Meeting?
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| A: | Shares held in your name as the stockholder of record may be voted in person at the 20152020 Annual Meeting. Shares held beneficially in street name may be voted in person at the 20152020 Annual Meeting only if you obtain a “legal proxy” from the bank, broker trustee or other nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the 20152020 Annual Meeting, we recommend that you also submit your vote as instructed on the Notice of Internet Availability and below, to ensure that your shares are represented and so that your vote will be counted even if you later decide not to attend the 20152020 Annual Meeting.
If you attend the 2020 Annual Meeting, any votes you cast at the meeting in person will supersede your proxy. |
| Q: | How can I vote my shares without attending the 20152020 Annual Meeting?
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| A: | Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the 20152020 Annual Meeting. If you are a stockholder of record, you may vote by submitting a proxy. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your bank, broker trustee or other nominee. For instructions on how to vote, please refer to the instructions below and those included on the Notice of Internet Availability or, for shares held beneficially in street name, the voting instructions provided to you by your bank, broker trustee or other nominee.
By Internet - Stockholders of record of comScore common stock with Internet access may submit proxies by following the “Internet” instructions on the Notice of Internet Availability until 11:15 am, Eastern Time on July 21, 2015. If you are a beneficial owner of comScore common stock held in street name, please check the voting instructions provided by your broker, trustee or nominee for Internet voting availability.
By mail - Stockholders of record of comScore common stock may request a paper proxy card from comScore by following the procedures outlined in the Notice of Internet Availability. If you elect to vote by mail, please indicate your vote by completing, signing and dating the proxy card where indicated and by returning it in the prepaid envelope that will be included with the proxy card. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted. comScore stockholders who hold shares beneficially in street name may vote by mail by completing, signing and dating the voting instructions provided by their brokers, trustees or nominees and mailing them in the accompanying pre-addressed envelopes.
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By Telephone or Internet – Stockholders of record may vote by telephone or the Internet by following the instructions on the Notice of Internet Availability to access the proxy materials. If you are a beneficial owner of Common Stock held in street name, please check the voting instructions provided by your bank, broker or other nominee for telephone or Internet voting availability.
By Mail – Stockholders of record may request a paper proxy card from Comscore by following the procedures outlined in the Notice of Internet Availability. If you elect to vote by mail, please indicate your vote by completing, signing and dating the proxy card where indicated and by returning it in the prepaid envelope that will be included with the proxy card. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted. Comscore stockholders who hold shares beneficially in street name may vote by mail by completing, signing and dating the voting instructions provided by their bank, broker or other nominee and mailing them in the accompanyingpre-addressed envelopes.
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| Q: | How many shares must be present or represented by proxy to conduct business at the 20152020 Annual Meeting?
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| A: | The presence of the holders of a majority of the shares of Common Stock issued and outstanding and entitled to vote at the 20152020 Annual Meeting is necessary toshall constitute a quorum at the 20152020 Annual Meeting. Such stockholders are counted as present at the meeting if (1) they are present in person at the 20152020 Annual Meeting or (2) they have properly submitted a proxy.
Under the General Corporation Law of the State of Delaware, In addition, cast abstentions and brokernon-votes (which are described below) are counted as present and entitled to vote and are, therefore, included for the purposes of determining whether a quorum is presentpresent. At the close of business on the Record Date, there were 70,865,075 shares of Common Stock issued and outstanding and entitled to vote at the 20152020 Annual Meeting.
A “broker non-vote” occurs whenMeeting; therefore the presence of the holders of at least 35,432,538 shares of Common Stock is required to establish a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner.
quorum. |
| Q: | What proposals will be voted on at the 20152020 Annual Meeting?
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| A: | The proposals scheduled to be voted on at the 20152020 Annual Meeting are: |
| | (1) 1)
| The election of the two Class II directors listednominees named in this proxy statement as Class I directors to serve until the 2018for terms expiring at our 2023 annual meeting of stockholders;
(2) stockholders, to hold office until their respective successors have been duly elected and qualified; |
| 2) | The approval, on anon-binding advisory basis, of the compensation paid to our named executive officers (known as “Say on Pay”); |
| 3) | The ratification of the appointment of ErnstDeloitte & YoungTouche LLP as comScore’sthe company’s independent registered public accounting firm for the fiscal year ending December 31, 2015;2020; and
(3) |
| 4) | The approval onof an advisory basisamendment and restatement of our 2018 Equity and Incentive Compensation Plan (the “2018 Plan”) to increase the compensation awardednumber of shares of our Common Stock available for grant by 9,600,000 and to our named executive officersmake other changes to the 2018 Plan as described in 2014.
this proxy statement. |
| Q: | What is the voting requirementvote required to approve each of the proposals? |
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A: Proposal | Proposal | Vote Required | | Broker Discretionary Voting Allowed |
| Proposal One -No. 1 – Election of two Class II directorsDirectors | | Plurality of Votes Castvotes cast by the shares present in person or represented by proxy at the meeting | | No |
| Proposal No. 2 – Say on Pay Advisory Vote | | Affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote | | No |
Proposal Two -No. 3 – Ratification of the appointmentAppointment of independent registered public accounting firmIndependent Registered Public Accounting Firm | Majority | Affirmative vote of the Shares Entitleda majority of shares present in person or represented by proxy and entitled to Vote and Present in Person or Represented by Proxyvote | | Yes |
| Proposal No. 4 – Amendment and Restatement of 2018 Plan | Proposal Three - Approval on an advisory basis | Affirmative vote of 2014 named executive officer compensationa majority of shares present in person or represented by proxy and entitled to vote | Majority of the Shares Entitled to Vote and Present in Person or Represented by Proxy | No |
| A: | You may vote “FOR” or “WITHHOLD” on each of the nominees for election as director (Proposal One)No. 1). The two nominees for director receiving the highest number of affirmative votes with respect to each class will be elected as directors.
directors for their respective term of office. |
You may vote “FOR,” “AGAINST” or “ABSTAIN” on the proposals to approve, bynon-binding advisory vote, executive compensation (Proposal No. 2), to ratify the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm (Proposal No. 3) and to approve an amendment and restatement of the 2018 Plan (Proposal No. 4). An abstention has the same effect as a vote against these proposals.
All shares entitled to vote and represented by properly executed proxies received prior to the 2020 Annual Meeting (and not revoked) will be voted at the 2020 Annual Meeting in accordance with the instructions indicated.
| Q: | How does the company’s director resignation policy work? |
| A: | Our Board has adopted a director resignation policy, which provides that any nominee for director who receives a majority of “withhold” votes in an uncontested election of directors is expected to tender his or her resignation promptly following the certification of the election results. In such event, the Nominating and Governance Committee will promptly consider the tendered resignation and will recommend to the Board whether to accept or reject the resignation. The Board will act on the proposals to ratify the appointment of Ernst & Young LLP as comScore’s independent registered public accounting firm (Proposal Two)Nominating and to approve, by non-binding vote, executive compensation (Proposal Three). Abstentions are deemed to be votes cast and have the same effect as a vote against these proposals.
All shares entitled to vote and represented by properly executed proxies received prior to the 2015 Annual Meeting (and not revoked) will be voted at the 2015 Annual Meeting in accordance with the instructions indicated.
Governance |
| Committee’s recommendation no later than 90 days following the certification of the stockholder vote. The company will promptly disclose the Board’s decision (and, if the Board rejects the resignation, the Board’s reasons for doing so). |
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| Q: | What if I do not specify how my shares are to be voted?
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| A: | You may vote “FOR” or “WITHHOLD” on each of the nominees for election as director (Proposal One). The two nominees for director receiving the highest number of affirmative votes will be elected as directors. Therefore, abstentions will not affect the outcome of the election.
If you are a stockholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted as recommended by the Board of Directors.
If you are a beneficial owner and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under applicable regulations, brokers and other nominees have the discretion to vote on routine matters such as Proposal Two but do not have discretion to vote on Proposal Three. Therefore, if you do not provide voting instructions to your broker or other nominee, your broker or other nominee may only vote your shares on Proposal Two and any other routine matters properly presented for a vote at the 2015 Annual Meeting.
Board. |
If you are a beneficial owner and you do not provide the bank, broker or other nominee that holds your shares with voting instructions, the bank, broker or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under applicable regulations, banks, brokers and other nominees have the discretion to vote on routine matters, such as Proposal No. 3, but do not have discretion to vote onnon-routine matters, such as Proposal No. 1, Proposal No. 2 and Proposal No. 4, which results in a “brokernon-vote.” Therefore, if you do not provide voting instructions to your bank, broker or other nominee, such nominee may only vote your shares on Proposal No. 3 and on any other routine matters properly presented for a vote at the 2020 Annual Meeting.
| Q: | What is the effect of a brokernon-vote?
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| A: | BrokersA brokernon-vote with respect to a proposal occurs when shares are held by a bank, broker or other nominees who hold shares of comScore’s common stocknominee for a beneficial owner haveand the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the 2015 Annual Meeting. A broker non-vote occurs when abank, broker or other nominee does not receive voting instructions from the beneficial owner as to how to vote such shares, and the bank, broker or other nominee does not have the authority to exercise discretion to direct the voting of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the 2015 Annual Meeting, but will not be counted for purposes of determining the number of votes present in person or represented by proxy and entitled to vote with respect to a particular proposal. Thus, a broker non-vote will not impact our ability to obtain a quorum and will not otherwise affect the outcome of the vote on a proposal that requires a plurality of votes cast (Proposal One) or the approval of a majority of the votes present in person or represented by proxy and entitled to vote (Proposal Three).
such proposal. |
Brokernon-votes will be counted for purposes of calculating whether a quorum is present at the 2020 Annual Meeting, but they will not be counted for purposes of determining the number of votes present in person or represented by proxy and entitled to vote with respect to a particular proposal. Thus, brokernon-votes will not negatively impact our ability to obtain a quorum and will not otherwise affect the outcome of the vote on a proposal that requires a plurality of votes cast (Proposal No. 1) or the approval of a majority of the shares present in person or represented by proxy and entitled to vote (Proposal No. 2, Proposal No. 3 and Proposal No. 4).
| Q: | What is the effect of not casting a vote at the 20152020 Annual Meeting?
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| A: | If you are the stockholder of record of your shares and you do not vote by proxy card, via telephone, via the Internet or in person at the 20152020 Annual Meeting, your shares will not be voted at the 20152020 Annual Meeting. If you are a beneficial owner of shares held in street name, it is critical that you provide voting instructions if you want ityour vote to count in the election of directors (Proposal One)No. 1), the Say on Pay advisory vote (Proposal No. 2) or the non-bindingvote to approve an amendment and restatement of the 2018 Plan (Proposal No. 4). As discussed above, banks, brokers and other nominees have the discretion to vote on executive compensation (Proposal Three). In the past, if you held your shares in street name and you didroutine matters, such as Proposal No. 3, but do not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowedhave discretion to vote those shares on your behalf in the election of directorsnon-routine matters, such as they felt appropriate. Under applicable regulations, your bank or broker does not have the ability to vote your uninstructed shares in the election of directors on a discretionary basis or to vote your uninstructed shares in non-binding proposals related to executive compensation.Proposal No. 1, Proposal No. 2 and Proposal No. 4. Thus, if you hold your shares in street name and you do not instruct your bank, broker or brokerother nominee how to vote inon these or othernon-routine matters, no votes will be cast on your behalf. Your bank, broker or brokerother nominee will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of comScore’sComscore’s independent registered public accounting firm (Proposal Two).
and other routine matters. |
| Q: | How does the Board of Directors recommend that I vote?
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| A: | The Board of Directors recommends that you vote your shares: |
| | 1) | “FOR” each of the twocompany’s nominees for election as Class I directors (Proposal One)No. 1);
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| 2) | “FOR” the approval, on anon-binding advisory basis, of the compensation of the named executive officers (Proposal No. 2); |
| 3) | “FOR” the ratification of the appointment of ErnstDeloitte & YoungTouche LLP as comScore’sComscore’s independent registered public accounting firm for the fiscal year ending December 31, 20152020 (Proposal Two)No. 3); and
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| 4) | “FOR” the approval by non-binding vote,of an amendment and restatement of the 2014 compensation2018 Plan to increase the number of shares of our Common Stock available for grant by 9,600,000 and to make other changes to the named executive officers(Proposal Three)2018 Plan as described in this proxy statement (Proposal No. 4).
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| Q: | What happens if additional matters are presented at the 20152020 Annual Meeting?
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| A. | If any other matters are properly presented for consideration at the 20152020 Annual Meeting, including, among other things, consideration of a motion to adjourn the 20152020 Annual Meeting to another time or place (including, without limitation, for the purpose of soliciting additional proxies), the persons named as proxy holders, Magid M. AbrahamGregory Fink and Serge Matta,Ashley Wright (each officers of the company), or eitherany of them, will have discretion to vote on those matters in accordance with their best judgment. comScoreOther than the matters described in this proxy statement, Comscore does not currently anticipate thatknow of any other matters that will be raised at the 20152020 Annual Meeting.
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| A: | Subject to any rules your broker, trustee or nominee may have, you may change your proxy instructions at any time before your proxy is voted at the 2015 Annual Meeting.
If you are the stockholder of record, you may change your vote by (1) by granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the voting methods described above (and until the applicable deadline for each voting method), (2) by providing a written notice of revocation to comScore’sComscore’s Corporate Secretary at comScore, Inc., 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 prior to your shares being voted, or (3) by attending the 20152020 Annual Meeting and voting in person. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request.
If you are a beneficial owner of shares held in street name, you may change your vote by (1) submitting new voting instructions to your broker, trustee or nominee or (2) if you have obtained a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote your shares, by attending the 2015 Annual Meeting and voting in person.
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If you are a beneficial owner of shares held in street name, you may change your vote, subject to any rules your bank, broker or other nominee may have, at any time before your proxy is voted at the 2020 Annual Meeting, (1) by submitting new voting instructions to your bank, broker or other nominee or (2) if you have obtained a legal proxy from the bank, broker or other nominee that holds your shares giving you the right to vote your shares, by attending the 2020 Annual Meeting and voting in person.
| Q: | What happens if I decide to attend the 20152020 Annual Meeting, but I have already voted or submitted a proxy card covering my shares?
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| A: | Subject to any rules your broker, trustee or nominee may have, youYou may attend the 20152020 Annual Meeting and vote in person even if you have already voted or submitted a proxy card. Any previous votes that were submitted by you by proxy will be superseded by the vote you cast in person at the 20152020 Annual Meeting. Please be aware that attendance at the 20152020 Annual Meeting will not, by itself, revoke a proxy.
If a broker, trustee or nominee beneficially holds your shares in street name and you wish to attend the 2015 Annual Meeting and vote in person, you must obtain a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote the shares.
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If a bank, broker or other nominee beneficially holds your shares in street name and you wish to attend the 2020 Annual Meeting and vote in person, you must obtain a legal proxy from the bank, broker or other nominee that holds your shares giving you the right to vote the shares.
| Q: | What should I do if I receive more than one Notice of Internet Availability or set of proxy materials?
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| A: | You may receive more than one Notice of Internet Availability or set of proxy materials, including multiple copies of proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate Notice of Internet Availability or voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one Notice of Internet Availability or proxy card. Please complete, sign, date and return each comScoreComscore proxy card or voting instruction card that you receive to ensure that all your shares are voted.
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| Q: | Who will count the votes?
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| A: | comScore’sThe Board of Directors has designated representatives of Wilson Sonsini Goodrich & Rosati, the Company’s outside counsel,Broadridge Financial Solutions, Inc. to serve as inspector of election.
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| Q: | Where can I find the voting results of the 20152020 Annual Meeting?
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| A: | We intend to announce preliminary voting results at the 20152020 Annual Meeting and will publish final voting results in oura Current Report on Form8-K, which will be filed with the SEC within four (4) business days following the 20152020 Annual Meeting.
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| Q: | Who will bear the cost of soliciting votes for the 20152020 Annual Meeting?
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| A: | comScoreComscore will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. We mayThe company has engaged Innisfree M&A Incorporated (“Innisfree”) to aid in the solicitation of proxies. The company will pay Innisfree a fee of up to $20,000 as compensation for its services and will reimburse brokerage firms, custodians, nominees, fiduciaries and other persons representing beneficial ownersInnisfree for theirits reasonable expenses in forwarding solicitation material to such beneficial owners.out-of-pocket expenses. Our directors, officers and employees may also solicit proxies in person or by other means of communication. Such directors, officers and employees will not be additionally compensated but may be reimbursed for reasonableout-of-pocket expenses in connection with such solicitation. If you choose to access the proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur.
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If you choose to access the proxy materials and/or vote over the Internet, you are responsible for any Internet access charges you may incur.
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| Q: | What is the deadline to propose actions for consideration at next year'syear’s annual meeting of stockholders or to nominate individuals to serve as directors?
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| A: | You may submit proposals, including recommendations of director candidates, for consideration at future stockholder meetings.
comScore’s Comscore’s bylaws provide for advance notice procedures to recommend a person for nomination as a director or to propose business to be considered by stockholders at a meeting. For the 20162021 annual meeting of stockholders, such nominations or proposals, other than those made by or at the direction of the Board, of Directors, must be submitted in writing and received by our Corporate Secretary at our principal executive offices 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 no later than March 13, 2016,February 28, 2021, which is 90 days prior to the anniversary of the expected first mailing date of notice of availability of this proxy statement, and no earlier than January 29, 2021, which is 120 days prior to the anniversary of the expected mailing date of the notice of availability of this proxy statement. If our 20162021 annual meeting of stockholders is moved more than 30 days before or after the anniversary date of our 20152020 Annual Meeting, then the deadline for such nominations or proposals to be received by our Corporate Secretary is the close of business on the tenth day following the day notice of the date of the meeting was mailed or first made public, whichever occurs first. Such proposals also must comply with all the information requirements contained in the bylaws and applicable requirements of the rules and regulations of the SEC. The chairperson of the stockholder meeting may refuse to acknowledge the introduction of youra proposal if it is not made in compliance with the foregoing procedures or the applicable provisions of our bylaws. If a stockholder who has notified comScoreComscore of his or her intention to present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, comScoreComscore need not present the proposal for vote at such meeting.
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| In addition, for a stockholder proposal to be considered for inclusion in our proxy statement for the 2016 annual meeting of stockholders, the proposal must be submitted in writing and received by our Corporate Secretary at our offices at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 no later than February 12, 2016, which is 120 days prior to the anniversary of the expected mailing date of the notice of availability of this proxy statement.
A copy of the full text of the bylaw provisions discussed above may be obtained by writing to comScore’s Corporate Secretary at our principal executive offices at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 or by accessing comScore’s filings on the SEC’s website at www.sec.gov. All notices of proposals by stockholders, whether or not included in comScore’s proxy materials, should be sent to comScore’s Corporate Secretary at our principal executive offices.
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For a stockholder proposal to be considered for inclusion in our proxy statement for the 2021 annual meeting of stockholders, the proposal must comply with all the requirements ofRule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and must be submitted in writing and received by our Corporate Secretary at our principal executive offices at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 no later than January 29, 2020, which is 120 days prior to the anniversary of the expected mailing date of the notice of availability of this proxy statement.
A copy of the full text of the bylaw provisions discussed above may be obtained by writing to Comscore’s Corporate Secretary at our principal executive offices at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 or by accessing Comscore’s filings on the SEC’s website atwww.sec.gov. All notices of proposals by stockholders, whether or not to be considered for inclusion in Comscore’s proxy materials, should be sent to Comscore’s Corporate Secretary at our principal executive offices.
| Q: | How may I obtain a separate copy of the Notice of Internet Availability?
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| A: | If you share an address with another stockholder, each stockholder maymight not receive a separate copy of the Notice of Internet Availability.Availability, a practice known as “householding.” Stockholders may request to receive separate or additional copies of the Notice of Internet Availability by writing to comScore, Inc.,our Corporate Secretary at our principal executive offices at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190, Attention: Investor Relations. Stockholders who share an address and receive multiple copies of the Notice of Internet Availability can also request to receive a single copy by following the instructions above.
20190. |
| Q: | How may I obtain comScore’s 2014Comscore’s 2019 Form10-K and other financial information?
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| A: | Our Annual Report on Form10-K for the year ended December 31, 2019 (the “201910-K”) is available athttps://materials.proxyvote.com/20564W. Stockholders can also access our 2014 Form 201910-K and other financial information on the Investor Relations section of our website atwww.comscore.com through the "Investor Relations" link on the "About Us" webpage or on the Securities and Exchange Commission'sSEC’s website at www.sec.gov.www.sec.gov. Alternatively, current and prospective investors may request a free copy of our 2014 Form 201910-K from: comScore, Inc., by writing to our Corporate Secretary at our principal executive offices at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190, Attention: Investor Relations.20190. We also will furnish any exhibit to the 2014 Form 201910-K if specifically requested upon payment of charges that approximate our cost of reproduction.
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| Q: | Who can help answer my questions?
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| A: | Please contact our legal department by calling703-438-2000 or by writing to comScore, Inc., 11950 Democracy Drive, Suite 600, Reston, Virginia 20190, Attention: Legal Department.
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DIRECTORS, DIRECTOR NOMINEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors, Director Nominees and Executive Officers
The following table sets forth the names and ages of our directors and executive officers and their ages, positions and biographies are set forth below. Also included for our directors is information regarding their service on other public company boards, and their specific experience, qualifications, attributes or skills that led to the conclusion that each director should serve on our Board. This information is as of April 24, 2015:
May 20, 2020. |
| | | | | |
Name | Age | Age | | | Position |
Executive Officers and Executive DirectorsDirector | | | | | | |
William Livek | | |
Serge Matta65 | 40 | President, | Chief Executive Officer, Executive Vice Chairman and Class IIIII Director |
Magid M. Abraham, Ph.D.Carol DiBattiste | 56 | Executive | 68 | | | Chief Legal and Compliance Officer |
Gregory Fink | | | 53 | | | Chief Financial Officer and Treasurer |
Christopher Wilson | | | 53 | | | Chief Commercial Officer |
Non-Executive Directors | | | | | | |
Brent Rosenthal (1)(2)(3) | | | 48 | | | Chairman of the Board of Directors and Class III Director |
Gian M. FulgoniIrwin Gotlieb | 67 | Chairman Emeritus and Class III Director |
Melvin Wesley III | 43 | Chief Financial Officer |
Cameron Meierhoefer | 43 | Chief Operating Officer |
Christiana L. Lin | 45 | Executive Vice President, General Counsel and Chief Privacy Officer |
Michael A. Brown | 45 | Chief Technology Officer |
| | | |
Non-Employee Directors70 | | | Class II Director |
Russell Fradin(1)(2)Jacques Kerrest (3) | 38 | | 73 | | | Class I Director |
William J. Henderson(1)Kathleen Love (1)(2)(3) | | | 67 | Class II Director |
William Katz(1)(2) | 60 | Class I Director |
Ronald J. Korn(3)John Martin (1)(2) | 75 | Class II Director |
Joan M. Lewis(3) | 4952 | | | Class III Director |
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| (1) | Member of Nominating and Governance Committee |
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| (2) | Member of Compensation Committee |
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| (3) | Member of Audit Committee |
Executive Officers and Executive Directors
Serge MattaDirectorWilliam (Bill) Livek has served as a member of our Board of Directors since April 2014, as our Chief Executive Officer since March 2014November 2019 and as our Vice Chairman since January 2016. He was our President since June 2013. Fromfrom January 2016 through May 2012 to June 2013,2018. Mr. MattaLivek previously served as President, Commercial Solutions. From March 2012Vice Chairman and Chief Executive Officer of Rentrak Corporation, a media measurement and consumer targeting company, from June 2009 until our merger with Rentrak in January 2016. Prior to May 2012, he served as President, MobileRentrak, Mr. Livek was founder and Operator SolutionsChief Executive Officer of Symmetrical Capital, an investment and prior to that, from January 2010 to March 2012, Executiveconsulting firm; Senior Vice President, overseeing our worldwide TelecommunicationsStrategic Alliances and Mobile practice. Prior to joining the Company in 2000, Mr. Matta held positions at MicroStrategy within the consulting group. Mr. MattaInternational Expansion, of Experian Information Solutions, Inc., a provider of information, analytical and marketing services; andco-President of Experian’s subsidiary Experian Research Services. He holds a B.S. degree in FinanceCommunications Radio/Television from George Mason University and an M.B.A. from AmericanSouthern Illinois University. Mr. Matta's leadership positionLivek brings substantial industry experience and experience with our company coupled with his management abilities and his extensive knowledge of our industry qualify himaudience measurement expertise to serve as a member of our Board of Directors.
Magid M. Abraham, Ph.D., one of our co-founders,and management team.Carol DiBattiste has served as Executive Chairman of our Board of DirectorsChief Legal Officer since March 1, 2014. Dr. AbrahamDecember 2019 and as our Chief Compliance Officer since April 2017. She previously served as our General Counsel and Chief Privacy and People Officer from January 2017 to December 2019. Prior to joining the company, Ms. DiBattiste held positions at the U.S. Department of Veterans Affairs with the Board of Veterans’ Appeals as Executive in Charge and Vice Chairman from August 2016 to January 2017, and Senior Advisor for Appeals Modernization, Office of the Secretary, from May 2016 to August 2016. Prior to that, Ms. DiBattiste served as Executive Vice President and Chief Legal, Privacy, Security and Administrative Officer of Education Management Corporation, an operator offor-profit post-secondary educational institutions, from March 2013 through March 2016. She also served as Executive Vice President, General Counsel and Chief Administrative Officer of Geeknet, Inc., as Executive Vice President, Privacy, Compliance and Security of Reed Elsevier/LexisNexis, and as General Counsel and Chief Privacy and Compliance Officer of ChoicePoint. Among other distinguished government positions, Ms. DiBattiste served as Deputy Administrator of the U.S. Transportation Security Administration, as Under Secretary of the U.S. Air Force, as Deputy U.S. Attorney (Southern District of Florida), as Director, Executive Office for U.S. Attorneys,
and as Principal Deputy General Counsel, U.S. Department of the Navy. Ms. DiBattiste holds an L.L.M., Law from the Columbia University School of Law, a J.D. from Temple University School of Law, and a B.A., Sociology-Criminal Justice from LaSalle University.
Gregory Fink has served as our Chief Financial Officer and Treasurer since October 2017 and previously served as our Executive Vice President, Finance since joining the company earlier in October 2017. Prior to joining the company, Mr. Fink was the Senior Vice President, Controller and Chief Accounting Officer at Fannie Mae, a government-sponsored enterprise in the mortgage industry, since 2011, where he led a team of 600 professionals and oversaw a multi-billion-dollar annual expense budget. He has more than 25 years of experience in accounting, financial reporting, business analytics, budgeting, internal controls and talent development. Mr. Fink holds a B.S. in Business Administration with an accounting emphasis from San Diego State University and is a Certified Public Accountant.
Christopher Wilson has served as our Chief Commercial Officer since April 2019. He previously served as our Chief Revenue Officer from 1999June 2017 to March 2014December 2018 and has been a member ofas our Board of Directors since 1999. In 1995, Dr. Abraham founded Paragren Technologies, Inc., which specialized in delivering large scale Customer Relationship Marketing systems for strategic and target marketing, andExecutive Vice President, Commercial from January 2016 to June 2017. Prior to joining the company, Mr. Wilson served as its Chief Executive OfficerPresident, National Television at Rentrak Corporation from 1995 to 1999. Prior to founding Paragren, Dr. Abraham was employed by Information Resources, Inc. from 19852010 until 1995, whereour merger with Rentrak in January 2016. Before Rentrak, he was Senior Vice President, Sales at Scarborough Research Company; President at Experian Research Services; President and Chief Operating OfficerCOO of Simmons Market Research Bureau; and CEO and President of LogicLab, a division of Merkle LLC. Mr. Wilson holds a bachelor’s degree in Broadcast Communications from 1993 to 1994 and later ViceSouthern Illinois University, Carbondale.
Non-Executive Directors
Brent Rosenthal has served as Chairman of the Board of Directors from 1994 until 1995. Dr. Abraham received a Ph.D. in Operations Researchsince April 2018 and an M.B.A. from MIT. He also holds an Engineering degree from the École Polytechnique in France. Dr. Abraham’s strategic and product vision, long history as a co-founderdirector since January 2016. Mr. Rosenthal is the Founder of Mountain Hawk Capital Partners, LLC., an investment fund focused on small and member of our Board of Directors,microcap equities in the technology, media, telecom (TMT) and extensive knowledge of our industry qualify him to serve as a member of our Board of Directors.
Gian M. Fulgoni, one of our co-founders, has served as our Chairman Emeritus since March 2014.food industries. Mr. Fulgoni previously served as Executive Chairman of our Board of Directors from 1999 to March 2014 andRosenthal has been a member of our Board of Directors since 1999. Prior to co-founding comScore, Mr. Fulgoni was employed by Information Resources, Inc., where he served as President from 1981 to 1989, Chief Executive Officer from 1986 to 1998 andtheNon-Executive Chairman of the board of directors from 1991 until 1995. Mr. Fulgoniof RiceBran Technologies, a food company, since July 2016 and has served onas an advisor to the board of directors and executive management of PetMed Express, Inc.FLYHT Aerospace since
2002 and previously served on its board from August 1999 through November 2000. Mr. Fulgoni also served on the board of directors of the Advertising Research Foundation, an industry research organization, from 2008 to 2014. December 2019. He also served on the board of directors of Platinum Technology, Inc.SITO Mobile, Ltd., a mobile location-based media platform, from 1990August 2016 to 1999, U.S. Robotics, Inc.July 2018, and asNon-Executive Chairman of its board of directors from 1991June 2017 to 1994,July 2018. Previously, Mr. Rosenthal was a Partner in affiliates of W.R. Huff Asset Management where he worked from 2002 to 2016. Mr. Rosenthal served as theNon-Executive Chairman of Rentrak Corporation from 2011 to 2016. He was Special Advisor to the board of directors of Park City Group from November 2015 to February 2018. Mr. Rosenthal earned his B.S. from Lehigh University and Yesmail.com, Inc.M.B.A. from 1999the S.C. Johnson Graduate School of Management at Cornell University. He is an inactive Certified Public Accountant. Mr. Rosenthal brings to 2000. Educatedour Board financial expertise and experience in the United Kingdom, Mr. Fulgoni holds an M.A. in Marketing from the University of Lancastermedia and a B.Sc. in Physics from the University of Manchester. Mr. Fulgoni's strategic vision, long history as a co-founder and member of our Board of Directors, extensive knowledge of our business and experience as a director at other technology companies qualify him to serve as a member of our Board of Directors.
Melvin Wesley III has served as our Chief Financial Officer since August 2014. From January 2013 to December 2013, he served as Chief Financial Officer of Mandiant Corporation, a provider of advanced endpoint security products and security incident response management solutions. He stayed on as CFO, Global Services and Cloud Solutions at FireEye after the company acquired Mandiant in December 2013. From December 2004 to January 2013, Mr. Wesley was Senior Vice President and Chief Financial Officer of OPNET Technologies, a publicly traded company that provided application and network performance solutions. He served as Corporate Controller for OPNET from June 2004 to November 2004. Previously, Mr. Wesley served as Corporate Controller for SteelCloud, Inc. and as Assistant Controller for Learning Tree International, Inc., both publicly traded companies in the technology sector. He holds a B.S. in Accounting and an MBA from George Mason University and is licensed as a Certified Public Accountant in Virginia.
Cameron Meierhoefer has served as our Chief Operating Officer since March 2012. Previously, he held various senior positions at comScore. Most recently he served as Executive Vice President of Custom Analytics from January 2009 to March 2012 and as Senior Vice President of Custom Analytics from January 2006 to January 2009. Prior to joining comScore in 2001, he helped build PC Data Online, a division of the market research firm PC Data Inc. Mr. Meierhoefer holds a B.S. from Columbia University and a M.S. from the Georgia Institute of Technology.
Christiana L. Lin has served as our Executive Vice President, General Counsel and Chief Privacy Officer since August 2009. Previously, she served as our General Counsel and Chief Privacy Officer from January 2006 until August 2009, our Corporate Counsel and Chief Privacy Officer from March 2003 until January 2006, and our Deputy General Counsel from February 2001 until March 2003. Prior to comScore, Ms. Lin held positions in a boutique telecommunications law firm and within the government, including the Department of Defense as well as the White House. Ms. Lin holds a J.D. from the Georgetown University Law Center and a B.A. in Political Science from Yale University.
Michael A. Brown has served as our Chief Technology Officer since February 2011. Previously, Mr. Brown served as Chief Scientist from May 2010 until January 2011 and Executive Vice President within the technology team from November 2007 until May 2010. Prior to joining comScore in 1999, Mr. Brown worked as a consultant for several software engineering and development consulting companies. In 1993, he co-founded Pragmatic Image Technologies, a software consulting group. Mr. Brown holds an M.S. in Computer and Information Science from Hood College, and a B.S. in Computer Science from the University of Maryland University College.
Non-Employee Directors
Russell Fradininformation industries.Irwin Gotlieb has served as a director since July 2014. Since November 2010,April 2019. Mr. FradinGotlieb has been a senior advisor to WPP plc, a multinational advertising and public relations company, since April 2018. He was formerly the global Chief Executive Officer and Chairman of GroupM, a global media investment group, from its formation in early 2003 to 2012 and Chairman of GroupM until April 2018. Mr. Gotlieb has served on the board of directors of Invidi, a media solutions company, since October 2007, and on the advisory board of Harland Clarke, a payment solutions company, from January 2014 to December 2018. Mr. Gotlieb brings over 40 years of industry experience to the Board and is the first media agency executive inducted into both the American Advertising Federation Hall of Fame and the Broadcasting & Cable Hall of Fame.
Jacques Kerrest has served as Chairmana director since June 2017. Mr. Kerrest served as Executive Vice President and CFO of Intelsat S.A., a communications satellite services provider, from February 2016 to June 2019. Prior to his appointment at Intelsat, he held executive-level roles at numerous leading technology and communications companies, including ActivIdentity Corporation, Virgin Media Inc., Harte-Hanks Corporation and Chancellor Broadcasting Company. Previously, Mr. Kerrest served on the boardboards of directors of several public companies. Mr. Kerrest received his Master of Science Degree from Faculté des Sciences Économiques in Paris, France, and
an M.B.A. from Institut D’Etudes Politiques De Paris in Paris, France as well as the Thunderbird School of Global Management in Glendale, Arizona. Mr. Kerrest’s deep financial expertise and background enable him to bring valuable perspective to our Board.
Kathleen Love has served as a director since April 2019. Ms. Love is currently the Chief Executive Officer of Motherwell Resources LLC, a company devoted to management consulting and executive coaching, which she founded in 2013. Prior to founding Motherwell, Ms. Love served as the President and Chief Executive Officer of Dynamic Signal,GFK MRI (formerly Mediamark Research), a social media research company, from 2000 to 2013. Prior to joining MRI, Ms. Love held executive positions at The New York Times, EMAP Publishing and The Magazine Publishers of America. She has been an adjunct or guest instructor at Rutgers University, Brooklyn College and Queens College. Ms. Love holds a B.A. degree from Douglass College, Rutgers – The State University, an M.A. from Michigan State University and an M.Phil. from The Graduate Center, C.U.N.Y. She has advanced to candidacy for a Ph.D. in psychology. Ms. Love brings over 30 years of industry experience in media and marketing technology company that he co-founded. From November 2005research, strategic planning and business development to October 2010, heour Board.
John Martinhas served as a director since May 2019. Mr. Martin was the Chairman and CEO of Turner Broadcasting System, Inc., a media and entertainment company, from January 2014 through June 2018. At Turner Broadcasting, Mr. Martin oversaw a portfolio of networks including CNN, TBS, TNT, Cartoon Network, Adult Swim and Turner Sports. Prior to Turner Broadcasting, Mr. Martin was the Chief ExecutiveFinancial and Administrative Officer of Adify,Time Warner, Inc. for six years. Mr. Martin holds an advertising company that he also co-founded, which was sold to Cox Enterprises in 2008. From June 2000 to June 2004, Mr. Fradin was comScore’s Executive Vice President, Corporate Development. Mr. Fradin currently serves on the Board of Directors of TubeMogul, Inc., a public company. He holdsM.B.A. from Columbia University and a B.S. from the Wharton School of Business at the University of Pennsylvania. HavingBusiness. Mr. Martin brings substantial industry experience and financial expertise to our Board.
Involvement in Certain Legal Proceedings
As described above, Mr. Kerrest previously served as founder and Chief Executive Officeran executive officer of several digital advertising, marketing and technology companies, Mr. Fradin bringsIntelsat S.A. from February 2016 to our Board of DirectorsJune 2019. In May 2020, Intelsat filed a familiarity with the digital marketing and advertising industry, as well as an understandingvoluntary petition for relief under Chapter 11 of the strategicU.S. Bankruptcy Code in order to facilitate a financial restructuring.
Board Structure and operational challenges in leading and operating companies in this industry.
William J. Henderson has served as a director since August 2001, and as our lead independent director since October 2014. Mr. Henderson was the 71st Postmaster General of the United States. He served in that position from May 1998 until his retirement in May 2001. Mr. Henderson also served as the Chief Operations Officer of Netflix, Inc. from January 2006 until February 2007. Mr. Henderson currently serves on the board of directors of Acxiom Corporation, a public company, where he has been a director since June 2001. Mr. Henderson holds a B.S. from the University of North Carolina at Chapel Hill and served in the U.S. Army. Mr. Henderson brings to our Board of Directors his management experience as Postmaster General and his service as a director of our company since 2001, which affords him unique perspectives on our growth and evolution.
William Katz has served as a director since June 2008. Since June 2004, Mr. Katz has also served as the chairman of the board of directors of Visible World Inc., a privately-held multimedia marketing services provider. From 1996 to 2004, Mr. Katz served as President and Chief Executive Officer of BBDO New York, the flagship office of BBDO Worldwide, the world’s third largest global agency network. Mr. Katz holds a B.A. in Business and Psychology from American University. Mr. Katz brings to our Board of Directors his management experience in the advertising and marketing industry.
Ronald J. Korn has served as a director since November 2005. Since 1991, he has served as the President of Ronald Korn Consulting, which provides business and marketing services. Mr. Korn served as a director, chairman of the audit committee, and member of the loan committee of Equinox Financial Corporation from 1999 until its acquisition in October 2005. Since 2002, he has served as a director, chairman of the audit committee and a member of the compensation, investment and nominating and governance committees of PetMed Express, Inc., a public company. Since July 2003, he has served as a director, chairman of the audit committee and a member of our compensation committee of Ocwen Financial Corporation, a public company. Mr. Korn was a partner and employee of KPMG, LLP, from 1961 to 1991, where he was the managing partner of KPMG’s Miami office from 1985 until 1991. Mr. Korn holds a B.S. from the Wharton School of Business at the University of Pennsylvania and a J.D. from New York University Law School. Mr. Korn’s experience in financial matters and as a member of the audit committee of other public companies provides our Board of Directors with financial management and accounting experience.
Joan M. Lewis has served as a director since January 2015. Ms. Lewis was Senior Vice President, Consumer and Market Knowledge of The Procter & Gamble Company, a consumer packaged goods company, from 2008 through December 2014. Previously, she held a number of other leadership positions with Procter & Gamble, including Vice President, Global Operations and Director, North America. Ms. Lewis has also previously served on the Singapore Industry Advisory Board for Consumer Insights, the Advertising Research Foundation Board of Directors, and the Business Advisory Council for the Farmer School of Business at Miami University. She holds a B.S. from Miami University. Ms. Lewis' extensive experience as a customer of a wide variety of market research products gives her a deep understanding of the competitive landscape for digital market research companies, which qualifies her to serve as a member of our Board of Directors.
Board Structure
LeadershipOur Board is currently composed of Directors has eight authorized seatssix directors, with one vacancy, and is divided into three classes (Class I, Class II and Class III) with staggered three-year terms. Two Class II directors are to be elected atAt the 20152020 Annual Meeting, our stockholders will elect two Class I directors to serve a three-year termfor terms expiring at the 2018our 2023 annual meeting of stockholders, orto hold office until their respective successors have been duly elected and qualified. The Class I
Our governance framework provides the Board with flexibility to select the appropriate Board leadership structure for the company. In making leadership structure determinations, our Board considers many factors, including the specific needs of the company and Class III directors will continue to serve their respective terms untilwhat is in the respective 2017 and 2016 annual meetingsbest interests of our stockholders.
While the Board Leadership Structure. Our Board of Directors does not currently have a formal policy on whether or not the role of the Chief Executive Officer and Chairman of the Board should be separate, or,since 2016 the Board has elected its Chairman from among the independent directors. Moreover, our Corporate Governance Guidelines provide that if it is to be separate, whether the Chairman should be selected from the non-employee directors or be an employee. Currently, we operate with Mr. Matta serving as a director and our President andpositions of Chief Executive Officer and Dr. Abraham serving as our Executive Chairman. We believe thatChairman are ever combined, or if the separationChairman is not an independent director, the independent members of the Chairman and Chief Executive Officer positions suit the talents, expertise and experience that each of Messrs. Abraham and Matta bring to the Company. Dr. Abraham’s strategic and product vision, long history as a co-founder and member of our Board of Directors, and extensive knowledge of our industry make him well situatedwill select an independent director to serve as our Executive Chairman. Mr. Matta’s long history with the Company and ability to lead and execute strategy and business plans make him well suited to serve as President and Chief Executive Officer.
In October 2014, our Board of Directors created the role of Lead Independent
Director and elected Director.Mr. Henderson to serve in this capacity. The Lead Independent DirectorRosenthal, an independent director, currently serves as the principal liaison between the independent directors and the CEO and Chairman of the Board. The Lead Independent Director communicates withWe believe this structure is appropriate for the CEO and Chairmancompany at this time, based on the current composition of theour Board and raises issues with management on behalf ofteam and recent changes in the outside directors.
business.Standing Committees of the Board of Directors
Our Board of Directors has established an audit committee, a compensation committeestanding Audit Committee, Compensation Committee and a nominatingNominating and governance committee. OurGovernance Committee. The Board of Directors and its committees meet regularly throughout the year and also hold special meetings and act by written consent from time to time as appropriate. The Board has determined that all standing committee
members are independent within the meaning of the requirements of the Sarbanes-Oxley Act of 2002, The Nasdaq Stock Market (“Nasdaq”), and the rules and regulations of the SEC, as applicable. Each standing committee operates under a written charter approved by the Board, each of which is available under “Corporate Governance” on the Investor Relations section of our website atwww.comscore.com. Our Board of Directors has delegated various responsibilities and authority to its committees as generally described below.
Audit Committee. We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The committees regularly report on their
activitiesAudit Committee’s responsibilities include appointing and actions tooverseeing the full Board of Directors. Each committee of our Board of Directors has a written charter approved by our Board of Directors.
Audit Committee. The audit committee of our Board of Directors (our "Audit Committee") recommends the appointmentwork of our independent registered public accountant, reviewsauditors, reviewing the adequacy and effectiveness of our system of internal accounting procedurescontrols, reviewing and discussing with management and the independent auditors the company’s annual audited financial statements and consults withquarterly unaudited financial statements, and reviewsoverseeing the services provided by our independent registered public accountant, includingcompany’s legal and regulatory compliance programs. Among other things, the results and scope of their audit. Our Audit Committee met 12 times (including telephonic meetings) during 2014.
Our Audit Committee is
currently comprisedcharged with setting the overall corporate tone for quality financial reporting, sound business risk practices and ethical behavior.The Board has determined that Jacques Kerrest, Kathleen Love and Brent Rosenthal are “audit committee financial experts” as defined under SEC rules. Designation or identification of Ronald J. Korn (chair), William J. Henderson and Joan Lewis, each of whom is independent withina person as an audit committee financial expert does not impose any duties, obligations or liability that are greater than the meaningduties, obligations or liability imposed on such person as a member of the requirements of the Sarbanes-Oxley Act of 2002 and applicable SEC and NASDAQ rules. Ronald J. Korn is chairman of our Audit Committee as well as our Audit Committee financial expert, as currently defined underand the SEC rules implementingBoard in the Sarbanes-Oxley Actabsence of 2002.such designation or identification. We believe that the composition and functioning of our Audit Committee complies with all applicable requirements of the Sarbanes-Oxley Act of 2002 The NASDAQ Global Market,and Nasdaq and SEC rules and regulations.
Our Audit Committee operates under amet 12 times (including telephonic meetings, but not including actions by written charter adopted by our Boardconsent) during 2019. The Audit Committee is currently composed of Directors, a copy of which is available under the “Investor Relations” section of our website, http://www.comscore.com.
Jacques Kerrest (Chair), Kathleen Love and Brent Rosenthal.Compensation Committee
. The compensation committee of our Board of Directors (our "Compensation Committee") reviewsCompensation Committee’s responsibilities include reviewing and approves and/approving or recommendsrecommending to our Board of Directors the compensation and benefits forof our executive officers administersandnon-employee directors, administering our stockincentive compensation and equity compensation plans, and establishesreviewing and reviews generalmaking recommendations to the Board regarding compensation-related policies relating to compensation and benefits for our employees. Ourprocedures. The Compensation Committee met 11 times (including telephonic meetings) during 2014. Ourmay form and delegate authority to subcommittees when appropriate, including in connection with the allocation of equity awards (subject to conditions and limitations established by the Compensation Committee is currently comprised of William J. Henderson (chair), William Katz and Russell Fradin, each of whom is independent within the meaning of applicable NASDAQ rules.Committee). We believe that the composition and functioning of our Compensation Committee complies with all applicable requirements of the Sarbanes-Oxley Act of 2002 The NASDAQ Global Market,and Nasdaq and SEC rules and regulations. Our Compensation Committee may form and delegate authority to subcommittees when appropriate.
Ourmet 19 times (including telephonic meetings, but not including actions by written consent) during 2019. The Compensation Committee operates under a written charter adopted by our Boardis currently composed of Directors, a current copy of which is available under the “Investor Relations” section of our website, http://www.comscore.com.
Kathleen Love (Chair), John Martin and Brent Rosenthal.Nominating and Governance Committee
.The nominating and governance committee of our Board of Directors (our "Nominating and Governance Committee") is responsible for, among other things, reviewing the appropriate size, function and needs of the board of directors; establishing criteria for evaluating and selecting new members of our Board of Directors, subject to Board of Directors approval thereof; identifying and recommending to our Board of Directors for approval individuals qualified to become members of the Board of Directors; and monitoring and making recommendations to the Board of Directors on matters relating to corporate governance. The Nominating and Governance Committee met 4 times (including telephonic meetings) during 2014. Our NominatingCommittee’s responsibilities include evaluating the composition and Governance Committee currently consistssize of William Katz (chair), William Hendersonour Board, identifying and Russell Fradin.recommending candidates for Board membership, overseeing annual Board and committee evaluations, recommending to the Board a management succession plan, and reviewing and overseeing our corporate governance policies and procedures. We believe that the composition and functioning of our Nominating and Governance Committee complies with all applicable requirements of the Sarbanes-Oxley Act of 2002 The NASDAQ Global Marketand Nasdaq and SEC rules and regulations.
Our Nominating and Governance Committee operates under amet six times (including telephonic meetings, but not including actions by written charter adopted by our Boardconsent) during 2019. The Nominating and Governance Committee is currently composed of Directors, a current copy of which is available under the “Investor Relations” section of our website, http://www.comscore.com.
Brent Rosenthal (Chair), Kathleen Love and John Martin.Risk Management
Our Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of our company’s risks. OurThe Board of Directors regularly reviews information regarding our credit, liquidity and operations, as well as the risks associated with each. Our Audit Committee oversees management of financial, regulatory, security and compliance risks, including quarterly reports from our Chief Compliance Officer. Our Compensation Committee is responsible for overseeing management of risks relating to our executive compensation plans and
arrangements. Our Audit Committee oversees management of financial risks. Our Nominating and Governance Committee managesevaluates risks associated with the independence and composition of our Board, of Directorsour governance practices and potential conflicts of interest.management succession. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire Board of Directors is regularly informed about such risks through committee reports, about such risks.
attendance at committee meetings and otherwise.
Board of Directors and Committee Meeting Attendance
Our Board of Directors met 929 times (including telephonic meetings)meetings, but not including actions by written consent) during the year ended December 31, 2014.2019. Each of our incumbentcurrent directors has attended at least eighty-five percent (85%)75% of the aggregate of (i) the total number of meetings held by the Board of Directors (duringduring the period in 20142019 for which he or she was a director)director and (ii) the aggregatetotal number of meetings held by theall committees of the Board of Directors on which such individual served (duringduring the period in 20142019 for which he or she served as a committee member).
Independentmember.The independent andnon-management members of theour Board of Directors regularly meet in executive session without management present.
Annual Meeting Attendance
We encourage, but do not require, our directorsDirectors are expected to attend our annual meeting of stockholders. Threestockholders absent extraordinary circumstances. All of our current directors attended our 20142019 annual meeting of stockholders.
Director Nomination Process and Qualifications
Our Nominating and Governance Committee identifies director nominees by first reviewing the appropriate skills, qualifications and experience required of directors, as well as the composition of the Board as a whole. While the Nominating and Governance Committee has not established specific minimum qualifications for director candidates, the committee’s assessment includes factors such as judgment, integrity, business acumen, leadership, experience with companies of comparable size or industry, the interplay of a candidate’s experience with the experience of other directors (which may include experience with operating management, public company governance, financing, strategy and marketing), the extent to which a candidate would be a desirable addition to the Board and any committees of the Board, a candidate’s commitment to promoting the long-term interests of our stockholders, his or her ability to devote adequate time to Board responsibilities, director independence and other attributes relevant to satisfying SEC and Nasdaq requirements, and any other factors that the Nominating and Governance Committee deems relevant to the needs of the Board.
In December 2019, our Board adopted a policy to promote diversity among the members nominated for election to the Board. The Board believes that a diverse membership with varying perspectives and breadth of experience is an important attribute of a well-functioning Board, and diversity (based on factors commonly associated with diversity such as race, ethnicity, nationality, gender identity and expression, sexual orientation, religion and disability, as well as on broader principles such as diversity of perspective and experience) is one of the elements the Nominating and Governance Committee considers when identifying and evaluating the composition of the Board. Pursuant to the Board diversity policy, when conducting a director candidate search or otherwise identifying potential director candidates to fill one or more vacancies or newly created directorships on the Board, the Nominating and Governance Committee has committed to include among the individuals it identifies as potential candidates at least one diverse candidate. The Nominating and Governance Committee will review the Board diversity policy annually, which will include an assessment of the effectiveness of the policy.
Within the framework described above, the Nominating and Governance Committee evaluates the current members of our Board of Directorswho are willing to continue in service. Current members with skills and experience that are relevantimportant to our business and who are willing to continue in service are considered for nomination. If any member of the Board of Directors does not wish to continue in service, or if the committeeNominating and Governance Committee or Board of Directors decides not to nominate a member forre-election, the committee identifies the desired skills and experience of a new nominee.nominee or, where appropriate, considers whether to reduce the size of the Board. Current members of the Board of Directors and senior management are then polledasked for their recommendations. To date, weWe have notalso engaged third partiesthird-party search firms from time to time to identify orand evaluate potential nominees; however, the committee may do so in the future.nominees.
The Nominating and Governance Committee will also considerconsiders nominees recommended by stockholders, and any such recommendations should be forwarded to our Corporate Secretary in writing at our executive offices as identified in this proxy statement. In accordance with our bylaws, such recommendations should include the following information:
the name, age, business address and residence address of the proposed candidate;
the principal occupation or employment of the proposed candidate;
the class and number of shares of our stock (or other rights with respect to our stock) that the proposed candidate beneficially owns;
a completed questionnaire (in a form provided by our Corporate Secretary upon written request) with respect to the identity, background and qualifications of the proposed candidate;
a description of all arrangements or understandings between the stockholder making the recommendations and each director nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder; and
any other information relating to such director candidate that is required to be disclosed in solicitations of proxies for elections of directors or is otherwise required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such nominee’s written consent to being named in any proxy statement as a nominee and to serve as a director if elected).
While our Nominating and Governance Committee has not established specific minimum qualifications for director candidates, our committee evaluates individual director candidates based upon a number of criteria, including:
a high degree of personal and professional integrity;
commitment to promoting the long term interests of our stockholders;
broad general business experience and acumen, which may include experience in management, finance, marketing and accounting, with particular emphasis on technology companies;
adequate time to devote attention to the affairs of our company;
an ability to bring balance to our Board of Directors in light of our company’s current and anticipated needs and in light of the skills and attributes of the other board members; and
other attributes relevant to satisfying the requirements imposed by the SEC and NASDAQ.
We believe that our Board of Directors represents a desirable mix of backgrounds, skills, and experiences, and they all share the personal attributes of effective directors described above. While they do not have a formal written policy on director diversity, the Nominating and Governance Committee and our Board of Directors also consider diversity when reviewing the overall composition of our Board of Directors, and considering the slate of nominees for annual election to our Board of Directors and the appointment of individual directors to our Board of Directors. Diversity, in this context, includes factors such as experience, specialized expertise, geographic location, cultural background, gender and ethnicity.
Below are some of the specific experiences, qualifications, attributes or skills in addition to the biographical information provided above that led to the conclusion that each person should serve as one of our directors or to be nominated for election to our Board of Directors in light of our business and structure:
Magid M. Abraham, Ph.D., is one of our co-founders, Executive Chairman and a director. Dr. Abraham has over fifteen years of experience with our business in a variety of roles including research and development, sales and marketing and corporate administration, since its inception. In addition, Dr. Abraham brings his experience as a founder and senior executive of previous successful market-research based companies. Dr. Abraham has a deep understanding of all aspects of our business. He also has significant corporate governance experience through service on other company boards and as an executive with other companies, and he has an extensive educational background.
Russell Fradin has had prior experience as an employee of our company and as a founder of other companies. Mr. Fradin’s familiarity with our business and strategy and his experience founding and managing advertising and marketing companies qualify him to serve as a member of our Board of Directors.
Gian M. Fulgoni, is one of our co-founders, Chairman Emeritus and a director. Mr. Fulgoni has over fifteen years of experience with our business in a variety of roles including research and development, sales and marketing and corporate administration, since its inception. In addition, Mr. Fulgoni brings his experience as a founder and senior executive of previous successful market-research based companies. Mr. Fulgoni has a deep understanding of all aspects of our business. He also has significant corporate governance experience through service on other public company boards and as an executive with other companies, and he has an extensive educational background.
William J. Henderson has served as an executive or a member of the board of directors of several large technology, data aggregation and multimedia companies. Mr. Henderson has substantial experience in marketing and the corporate administration of large businesses. He also has significant corporate governance experience through his service on other company boards, and he has an extensive educational background.
William Katz has also served as an executive of or a member of the board of directors of several marketing and advertising companies. Mr. Katz has extensive experience in those industries, as well as with corporate governance through his service on other boards of directors.
Ronald J. Korn has served as an executive or a member of the board of directors of several large public companies. Mr. Korn has substantial experience as a public accountant, and he has sufficient background to qualify as our audit committee financial expert. He also has significant corporate governance experience through his service on other company boards, and he has an extensive educational background.
Joan M. Lewis has served in senior management positions of a top consumer packaged goods company, and one of the world's largest advertisers. Ms. Lewis has also served on a variety of boards of industry groups. Ms. Lewis has substantial experience as a customer of a wide variety of market research products gives her a deep understanding of the competitive landscape for digital market research companies.
Serge Matta is our President and Chief Executive Officer and a director. Having held leadership positions within the product, commercial, and sales teams as well as having served as President of the Company prior to his appointment as Chief Executive Officer, Mr. Matta has deep familiarity in all aspects of our business and broad knowledge of our industry.
Director and Director Nominee Independence
OurThe Board of Directors has determined that each of Messrs. Fradin, Henderson, Katz,Jacques Kerrest, Kathleen Love, John Martin and Korn and Ms. LewisBrent Rosenthal is independent under the rules of the SEC and Nasdaq listing standards. The Board previously determined that each of Joanne Bradford, Michelle McKenna, Robert Norman and Paul Reilly was independent under the rules of the SEC and Nasdaq listing standards during his or her service as a director in 2019, and Dale Fuller was independent under the rules of the NASDAQ Stock Market ; therefore, everySEC and Nasdaq listing standards during his service as a director in 2019 prior to his appointment as Interim Chief Executive Officer. Therefore, each member
of the Audit Committee, Compensation Committee and Nominating and Governance Committee
during 2019 was, and
currentlyeach current member is,
an independent
director in accordance with those
standards.rules and standards during the time that he or she served. In addition, our Board was composed of a majority of independent directors at all times during 2019 and continues to be so composed. In determining the independence of our directors, our Board
of Directors considered all transactions in which we and any director had any interest, including those involving payments made by us to companies in the ordinary course of business where
Messrs. Fradin, Henderson, Katz, and Korn and Ms. Lewisany of our directors or their immediate family members serve on the
board of directors or in management or advisory roles (Fuller, Kerrest, McKenna and Norman), current and prior employment relationships of the directors or their immediate family members (Fuller and Love), and compensation for service in Board
leadership roles (Rosenthal).Compensation Committee Interlocks and Insider Participation
Independent directors Joanne Bradford, Jacques Kerrest, Kathleen Love, John Martin, Michelle McKenna, Robert Norman and Paul Reilly served as members of Directors orthe Compensation Committee at various times during 2019. No person who served as a member of the executive management team of the other company.
Compensation Committee Interlocks and Insider Participation
William J. Henderson, William Katz and Jarl Mohnduring 2019 was an officer or employee of our company during such year or a prior year. Moreover, none of our executive officers served as our Compensation Committee from January 2014 through July 2014, at which time Russell Fradin replaced Mr. Mohn. Mr. Fradin served as our Executive Vice President, Corporate Development from June 2000 to June 2004. Mr. Fulgoni, our Chairman Emeritus, serves as a director of Dynamic Signal, Inc., a social media marketing technology company for which Mr. Fradin serves as chairman ofon the board of directors and chiefor compensation committee of any entity that had one or more of its executive officer.
officers serving on our Board or Compensation Committee during 2019.Code of Business Conduct and Ethics
We haveOur Board has adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees of the company, including our principal executive officer, principal financial officer and principal
accounting officer or controller.controller, and persons performing similar functions. The full text of our Code of Business Conduct and Ethics is posted under “Corporate Governance” on the “Investor Relations”Investor Relations section onof our website at http://www.comscore.com.
www.comscore.com. To the extent permissible under Nasdaq rules, we intend to disclose any amendments to our Code of Business Conduct and Ethics or waivers thereto that apply to our principal executive officer, principal financial officer or principal accounting officer or controller by posting such information on the same website.Reporting andNon-Retaliation Policy
Our Board has adopted a reporting andnon-retaliation policy to encourage employees and others to disclose wrongdoing or suspected wrongdoing that could adversely impact the company, our reputation, or our stockholders, customers, employees or other stakeholders, and to set forth the procedures by which reports should be made, investigated and addressed.
Corporate Governance Guidelines
Our Board of Directors has adopted written Corporate Governance Guidelinescorporate governance guidelines that set forth key principles thatto guide its actions, including:
the Board’s commitment to appropriate diversity among the candidates nominated for election to the Board;
limits on outside boards, including that directors who are executive officers of the rolecompany may serve on the board of directors of no more than two public companies, including our Board, andnon-management directors should not serve on more than four public company boards, including our Board;
a requirement that a substantial majority of the members of our Board must be independent;
a commitment to appointing a Lead Independent Director. Additionally,Director should the Corporate Governance Guidelines requireroles of Chairman and Chief Executive Officer ever be combined; and
a commitment to an annual assessmentreview of the Board's performance including performance of the Board and its individual directors.committees.
Director Resignation Policy
Our Board has adopted a director resignation policy, which provides that any nominee for director who receives a majority of “withhold” votes in an uncontested election of directors is expected to tender his or her resignation promptly following the certification of the election results. In such event, the Nominating and Governance Committee will promptly consider the tendered resignation and will recommend to the Board whether to accept or reject the resignation. The Board will act on the Nominating and Governance Committee’s recommendation no later than 90 days following the certification of the stockholder vote. The company will promptly disclose the Board’s decision (and, if the Board rejects the resignation, the Board’s reasons for doing so).
Stock Ownership Guidelines for Non-Employee Directors
Our Board of Directors has adopted written Stock Ownership Guidelines for Non-Employee Directorsstock ownership guidelines to further align the interests of our non-employee directors and executive officers with those of our stockholders. These guidelines are described under “Executive Compensation - Compensation Discussion and Analysis – Other Compensation Policies” below.
Clawback Policy
Our Board has adopted a clawback policy that provides for recovery of executive compensation in the event of an accounting restatement, fraud or error. This policy is described under “Executive Compensation - Compensation Discussion and Analysis – Other Compensation Policies” below.
Anti-Hedging and Pledging Policy
Our Board has adopted an anti-hedging and pledging policy, which prohibits directors, executive officers, their family members and entities that they control from hedging and pledging Comscore securities. This policy is described under “Executive Compensation - Compensation Discussion and Analysis – Other Compensation Policies” below.
Political Activity Policy
Our Board has adopted a political activity policy that gives the Nominating and Governance Committee oversight over any lobbying and political activities conducted by our company. The policy states that such activities will be conducted for the purpose of promoting the commercial interests of the company as a whole, be in furtherance of the interests of our stockholders. Each non-employee director who joins our Board of Directors is expectedstockholders, and be in compliance with applicable laws, rules and regulations. The policy further provides that employees may not make or commit to hold a number of sharesmake political contributions on behalf of the Company's common stock with a value equal tocompany, and we will not reimburse or at least two timesotherwise compensate an employee for his or her annual stock retainer for service on our Board of Directors, exclusive of retainers for serving as a member or chair of any Board committee, within five years of adoption of this policy.personal political contributions.
DIRECTOR COMPENSATION
Director Compensation Policy
Cash Retainers and Meeting Fees
. During 2014,2019, ournon-employee directors were eligible to receive an annual cash retainer based on their general service on our Board of Directors and additional cash retainers for participation or serving as chair of certain committees of our Board of Directors. Our director compensation was last revised in February 2013 following the Nominating and Governance Committee's request to Compensia to undertake a review of director compensation in comparison to our compensation peer group, and the amount of the retainers was last established by our Board of Directors based on the results of that review. Additionally, in October 2014, following the Nominating and Governance Committee's consultation with outside legal counsel and Compensia, our Board of Directors approved a lead independent director designation and revised our director compensation policy to include a retainer for such designation.
During 2014, our non-employee directorsother than Mr. Gotlieb were eligible to receive an annual cash retainer of $30,000 for generaltheir service on ourthe Board. Our Board of Directors, and the lead independent director was eligible to receiveChairman, Mr. Rosenthal, received an additional cash retainer of $20,000, prorated$120,000 for service during 2014.
Additionalsuch position in 2019.Non-employee directors were also eligible to receive annual cash retainers for
which memberstheir service on Board committees in 2019, as set forth below. Cash retainers were paid quarterly in arrears and were prorated for directors who joined or
left the
chair of certainBoard or relevant committees
during the year. | | | | | | | | |
Committee | | Chair | | | Other Members | |
Audit | | $ | 50,000 | | | $ | 25,000 | |
Compensation | | | 15,000 | | | | 5,000 | |
Nominating and Governance | | | 10,000 | | | | 4,000 | |
Special (1) | | | 25,000 | | | | 20,000 | |
Finance (2) | | | N/A | | | | 20,000 | |
| (1) | The Special Committee was disbanded on April 1, 2019. |
| (2) | Finance Committee members (other than the committee chair) also received $3,000 in meeting fees in 2019, reflecting a fee of $1,000 for each committee meeting held in 2019, excluding (i) meetings held in conjunction with a regularly scheduled Board meeting and (ii) the first committee meeting held outside of a regularly scheduled Board meeting. |
Effective January 1, 2020, the Board temporarily increased the compensation of our Board Chairman in connection with his role as the independent Board representative working with management on our strategic review process. In consideration of Directorsthe significant increase in responsibilities, heightened oversight and extraordinary time commitment required for this role: (i) the annual cash retainer for such position was increased to $360,000, and (ii) our Chairman earned a temporary cash stipend of $180,000 per month for the first quarter of 2020. A portion of the annual retainer ($120,000) is paid quarterly in arrears. The balance of the retainer, as well as the entire monthly stipend, is deferred until the earlier of the Chairman’s separation from service or a change in control of the company. Effective April 1, 2020, the monthly stipend was discontinued.
Equity Compensation
For the 2019-2020 director compensation term, which began on July 1, 2019, ournon-employee directors other than Mr. Gotlieb were eligible in 2014 were as follows:
|
| | | | | | |
| | 2014 |
| Committee | Chairperson | Member |
| Audit | $ | 18,000 |
| $ | 10,000 |
|
| Compensation | 10,000 |
| 5,000 |
|
| Nominating and Governance | 7,500 |
| 3,000 |
|
In the case of new non-employee directors, these fees are prorated based on when the non-employee director joins our Board of Directors during the year. Employee directors are not compensated for Board of Director or committee service in addition to their regular employee compensation.
Equity-Based Compensation. Non-employee directors are also eligible to receive stock awards and option grants under our 2007 Equity Incentive Plan. Our non-employee directors are eligible to receive an annuala number of restricted stock unit award having an approximate valueunits equal to $250,000 divided by the closing market price of $125,000 atour Common Stock on the timedate of grant.
Each annual However, in light of declines in our stock price, our directors elected to reduce their compensation and use the closing market price of our Common Stock on the original date of approval, rather than the date of grant, to determine the number of restricted stock
unit award vestsunits to award. This election resulted in
a 48% reduction in the number of shares otherwise due to each director for the 2019-2020 term. These restricted stock units will vest in full
on the earliest of (i) June 30, 2020, (ii) the date of our 2020 annual meeting of stockholders, or (iii) the date of a change in control of the company, subject to continued service through the applicable vesting date. Vested units will be deferred and delivered in shares of Common Stock upon the earlier of
(i)a director’s separation from service or a change in control of the company.In 2019, Ms. Bradford and Ms. Love also received restricted stock unit awards (prorated based on their service dates) as compensation for their service during the 2018-2019 director term. These restricted stock units vested in full on June 10, 2019 (the date of our 2019 annual meeting of stockholders) and will be delivered in shares of Common Stock upon the earlier of the director’s separation from service or a change in control of the company.
As compensation for his service as chairman of our Finance Committee in 2019, Mr. Martin received a special award of restricted stock units equal to $100,000 divided by the closing market price of our Common Stock on the date of the respective director’s nextgrant. These restricted stock units vested in full on May 23, 2020 (the first anniversary of joining our Board of Directors, (ii) the date of grant) and will be delivered in shares of Common Stock upon the first annual meetingearlier of Mr. Martin’s separation from service or a change in control of the company.
Finally, as an inducement for Mr. Gotlieb to join our Board in 2019, in recognition of his extensive industry experience and expected contributions to the company, and in order to further align his interests with those of our stockholders, followingMr. Gotlieb received a special award of restricted stock units equal to $900,000 divided by the closing market price of our Common Stock on the date of grantgrant. These restricted stock units vested in full on April 1, 2020 (the first anniversary of Mr. Gotlieb’s appointment) and will be delivered in shares of Common Stock upon the earlier of Mr. Gotlieb’s separation from service or (iii) a change ofin control of the Company.
company. Mr. Gotlieb was not eligible for any other compensation for his service on the Board in 2019.Other Compensation
Ms. McKenna resigned from the Board for health reasons on March 7, 2019, at which time her outstanding restricted stock units (awarded for her service during the 2018-2019 director term) were accelerated.
Mr. Norman resigned from the Board on May 22, 2019, at which time he transitioned to a strategic consultant to the Board and the company. Mr. Norman’s outstanding restricted stock units (awarded for his service during the 2018-2019 director term) were modified to allow for continued vesting during his consulting term. Mr. Norman also received aExpensesone-time award of 34,852 restricted stock units as compensation for his service as a consultant, which restricted stock units vested in full on May 22, 2020.
2019 Compensation
The following table sets forth summary information concerning compensation for the. non-employee members of our Board in 2019. Mr. Fuller’s compensation for his service as anon-employee director prior to and following his term as our Interim Chief Executive Officer is included under “Executive Compensation - Compensation Tables – 2019 Summary Compensation Table.” Mr. Livek and Mr. Wiener did not receive any compensation for their service as directors in 2019. We reimbursereimbursed all of our non-employee directors for all reasonableout-of-pocket expenses incurred in the performance of their duties as directors. Such expense reimbursements are not included as a component of compensation disclosed in the 2014 Director Compensation table.
2014 Director Compensation
The following table sets forth certain information concerning cash and non-cash compensation earned by our non-employee directors in 2014. None of the non-employee directors received option awards or other compensation in 2014.
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| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) |
| Russell Fradin | 15,833 | 125,018 | 140,851 |
Jeffrey Ganek(4) | 40,000 | 125,018 | 165,018 |
| William J. Henderson | 55,000 | 125,018 | 180,018 |
| William Katz | 42,500 | 125,018 | 167,518 |
| Ronald J. Korn | 48,000 | 125,018 | 173,018 |
Jarl Mohn(5) | 22,084 | - | 22,084 |
below. | | | | | | | | | | | | | | | | | | |
Name | | Fees Earned or
Paid in Cash
($) | | | Stock Awards
($) (1) | | | | | All Other
Compensation
($) | | | Total
($) | |
Joanne Bradford (2) | | | 48,179 | | | | 192,458 | | | (3) | | | — | | | | 240,637 | |
Irwin Gotlieb (4) | | | — | | | | 899,995 | | | (5) | | | — | | | | 899,995 | |
Jacques Kerrest | | | 93,088 | | | | 129,954 | | | (6) | | | — | | | | 223,042 | |
Kathleen Love (7) | | | 36,750 | | | | 192,458 | | | (8) | | | — | | | | 229,208 | |
John Martin (9) | | | 19,886 | | | | 229,956 | | | (10) | | | — | | | | 249,842 | |
Michelle McKenna (11) | | | 11,733 | | | | 263,679 | | | (12) | | | — | | | | 275,412 | |
Robert Norman (13) | | | 15,321 | | | | 305,391 | | | (14) | | | — | | | | 320,712 | |
Paul Reilly (15) | | | 48,682 | | | | 129,954 | | | (16) | | | — | | | | 178,636 | |
Brent Rosenthal | | | 201,256 | | | | 129,954 | | | (17) | | | — | | | | 331,210 | |
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| (1) | Effective October 2014, our Board of Directors amended our director compensation policy to include an annual cash retainer payable to the lead independent director. The amounts reportedAmounts reflected in this table reflect that amendment |
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(2) | Representscolumn represent the aggregate grant date fair value of $37.23 per sharestock awards computed in accordance with FASB ASC Topic 718 of the stock awards granted to the non-employees in 2014. The assumptions718. Assumptions used in the calculation of these award amounts are includeddescribed in Note 115 to the consolidated financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2014. Each non-employee director elected at2019. The amounts reported in this column for Ms. McKenna and Mr. Norman also include incremental fair value related to modifications of restricted stock unit awards in 2019, as discussed above. |
| (2) | Ms. Bradford joined the 2014 annual meeting of stockholders received a retainer consisting ofBoard on April 1, 2019 and left the Board on April 30, 2020. |
| (3) | Amount reflects (a) a restricted stock unit award valuedgrant for the 2018-2019 term (prorated at approximately $125,018, equal to 3,358 sharesgrant based on service inception date) with a grant date fair value of $62,504, awarded May 22, 2019, and (b) a restricted stock unit grant for the Company's common stock valued at $37.23 per share in accordance2019-2020 term with FASB ASC Topic 718. |
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(3) | Ata grant date fair value of $129,954, awarded July 1, 2019. As of December 31, 2014, the aggregate number of shares of the Company's common stock subject to stock options exercisable and outstanding for our non-employee directors was 4,000, and the aggregate number of shares of the Company's common stock covered by2019, Ms. Bradford held unvested restricted stock units was 16,790.with respect to 24,155 shares of our Common Stock. |
(4) Mr. Ganek resigned from our Board of Directors effective January 15, 2015.
(5) Mr. Mohn did not stand for reelection to our Board of Directors at the end of his term in July 2014.
The number of shares of our common stock and the grant date fair value of each stock award reported in the “Stock Awards” column above are as follows:
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| Name | Award Type | Grant Date | Number of Shares | Grant Date Fair Value ($) |
| Russell Fradin | Restricted Stock Units | July 22, 2014 | 3,358 | 125,018 |
Jeffrey Ganek(1) | Restricted Stock Units | July 22, 2014 | 3,358 | 125,018 |
| William J. Henderson | Restricted Stock Units | July 22, 2014 | 3,358 | 125,018 |
| William Katz | Restricted Stock Units | July 22, 2014 | 3,358 | 125,018 |
| Ronald J. Korn | Restricted Stock Units | July 22, 2014 | 3,358 | 125,018 |
Jarl Mohn(2) | Restricted Stock Units | July 22, 2014 | 3,358 | 125,018 |
| (4) | |
(1) | Mr. Ganek resigned from ourGotlieb joined the Board of Directors effective January 15, 2015.on April 1, 2019. |
| (5) | Amount reflects a special restricted stock unit grant with a grant date fair value of $899,995, awarded May 22, 2019. As of December 31, 2019, Mr. Gotlieb held unvested restricted stock units with respect to 86,956 shares of our Common Stock. |
(2)(6) | Amount reflects a restricted stock unit grant for the 2019-2020 term with a grant date fair value of $129,954, awarded July 1, 2019. As of December 31, 2019, Mr. MohnKerrest held unvested restricted stock units with respect to 24,155 shares of our Common Stock. |
| (7) | Ms. Love joined the Board on April 1, 2019. |
| (8) | Amount reflects (a) a restricted stock unit grant for the 2018-2019 term (prorated at grant based on service inception date) with a grant date fair value of $62,504, awarded May 22, 2019, and (b) a restricted stock unit grant for the 2019-2020 term with a grant date fair value of $129,954, awarded July 1, 2019. As of December 31, 2019, Ms. Love held unvested restricted stock units with respect to 24,155 shares of our Common Stock. |
| (9) | Mr. Martin joined the Board on May 22, 2019. |
| (10) | Amount reflects (a) a special restricted stock unit grant for service as Finance Committee chairman with a grant date fair value of $100,002, awarded May 23, 2019, and (b) a restricted stock unit grant for the 2019-2020 term with a grant date fair value of $129,954, awarded July 1, 2019. As of December 31, 2019, Mr. Martin held unvested restricted stock units with respect to 33,817 shares of our Common Stock. |
| (11) | Ms. McKenna left the Board on March 7, 2019. |
| (12) | Amount reflects the incremental fair value related to an acceleration of Ms. McKenna’s outstanding restricted stock units on March 7, 2019. As of December 31, 2019, Ms. McKenna did not stand for reelectionhold any outstanding awards with respect to our Board of Directors at the end of his term in July 2014.Common Stock. |
| (13) | Mr. Norman left the Board and transitioned to the role of a strategic consultant on May 22, 2019. |
| (14) | Amount reflects (a) incremental fair value of $117,887 related to a modification of Mr. Norman’s outstanding restricted stock units on May 22, 2019, and (b) a restricted stock unit grant for Mr. Norman’s service as a consultant with a grant date fair value of $187,504, awarded July 1, 2019. As of December 31, 2019, Mr. Norman held unvested restricted stock units with respect to 34,852 shares of our Common Stock. |
| (15) | Mr. Reilly left the Board on August 12, 2019. |
| (16) | Amount reflects a restricted stock unit grant for the 2019-2020 term with a grant date fair value of $129,954, awarded July 1, 2019. This award was forfeited when Mr. Reilly left the Board. As of December 31, 2019, Mr. Reilly did not hold any outstanding awards with respect to our Common Stock. |
| (17) | Amount reflects a restricted stock unit grant for the 2019-2020 term with a grant date fair value of $129,954, awarded July 1, 2019. As of December 31, 2019, Mr. Rosenthal held unvested restricted stock units with respect to 24,155 shares of our Common Stock and exercisable options with respect to 86,974 shares of our Common Stock. |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following discussionCompensation Discussion and analysisAnalysis (“CD&A”) provides information regarding our executive compensation philosophy, the elements of our executive compensation arrangements withprogram, and the factors that were considered in the compensation actions and decisions for our named executive officers during 2019. Although this CD&A focuses on our executive compensation program during the last fiscal year, it also describes compensation actions taken before or after 2019 to the extent such discussion enhances an understanding of our executive compensation disclosure. This CD&A should be read together with the compensation tables and related disclosures set forth elsewhere in this proxy statement. filing.
Named Executive Officers
Our named executive officers for the year ended December 31, 20142019 were:
Serge Matta, President andWilliam Livek, our Chief Executive Officer (our “Chiefand Executive Officer”)Vice Chairman (effective November 4, 2019);
Magid Abraham,Dale Fuller, our former Interim Chief Executive Officer (effective March 31, 2019 until November 4, 2019);
Bryan Wiener, our former Chief Executive Officer (until March 31, 2019);
Gregory Fink, our Chief Financial Officer;
Carol DiBattiste, our Chief Legal and Compliance Officer;
Christopher Wilson, our Chief Commercial Officer (effective April 17, 2019);
Sarah Hofstetter, our former President (until March 31, 2019); and
Kathryn Bachmann, our former Chief Operating Officer (effective April 17, 2019 until May 29, 2019).
Overview
In 2019, our Compensation Committee was guided by certain core compensation principles, including aligning executive officers’ interests with those of our stockholders, promoting achievement of strategic objectives, and maintaining a strong corporate culture. At the same time, our 2019 compensation decisions were significantly impacted by changes in our executive team and operations, as described below. Our decisions were also impacted by declines in our stock price, which diminished the effectiveness of our equity awards as a means to recruit and retain key personnel. These factors led to a more individualized, situational approach to executive compensation in 2019, with decisions driven more by specific hiring and retention needs than by a programmatic review of compensation for the year. Since the appointment of our new Chief Executive Officer in late 2019, our Compensation Committee has taken steps to return to a more normalized compensation cadence for the company.
Senior Executive Changes in 2019
On March 31, 2019, Bryan Wiener resigned as our Chief Executive Officer and Sarah Hofstetter resigned as our President, effective immediately. On the same date, Dale Fuller (then a member of our Board of Directors) was appointed as our Interim Chief Executive Officer.
On April 12, 2019, Christopher Wilson (formerly our Chief Revenue Officer and a consultant to the company) was appointed as our Chief Commercial Officer, and Kathryn Bachmann was appointed as our Chief Operating Officer, effective April 17, 2019. Ms. Bachmann resigned as our Chief Operating Officer on May 29, 2019.
On November 4, 2019, William Livek (then a special advisor and Vice Chairman of our Board of Directors (our “Executive Chairman") and former Chief Executive Officer;
Gian M. Fulgoni, Chairman Emeritus and Director;
Melvin Wesley III, Chief Financial Officer (our "CFO");
Cameron Meierhoefer, Chief Operating Officer;
Christiana Lin, Executive Vice President, General Counsel and Chief Privacy Officer; and
Kenneth J. Tarpey, former Chief Financial Officer (retired August 28, 2014).
Overview
Key 2014 Business Highlights
In 2014, we exceeded the target levels established for the key financial measures by which our stockholders evaluate our progress - revenue and adjusted EBITDA, with our actual achievement at 165% and over 200%, respectively, of the guidance for the year provided to our stockholders. In addition, for the year:
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▪ | Our market capitalization grew by 60% in spite of a 2% decrease in our shares outstanding; and |
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▪ | Our share price increased by 62% from $28.61per share at December 31, 2013 to $46.43 per share at December 31, 2014.
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Additionally, among our accomplishments for 2014, we:
Significantly expanded our global footprint for our flagship suite of audience measurement products, Media Metrix (or MMX). MMX Multi-Platform, which measures desktop computers, smartphones and tablets, is now available in 10 markets and MMX Mobile is offered in 21 countries across the globe;
Launched vCE 2.0, an updated version of our flagship advertising service which provides data that is faster, more granular, and which incorporates multiple data inputs to achieve significantly higher accuracy,Directors) was made available in the United States, United Kingdom, Italy, and Canada; and
Acquired mDot Labs, integrating the employees as well as their unique fraud-fighting technology into our Company and our product line.
Strategic partnerships have been a key to our success and innovation. During 2014, we entered into several strategic agreements that provide us with access to significantly more robust sources of data, and platforms on which to provide our data products. Specifically:
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▪ | In early 2014, we entered into strategic agreements with Google and Yahoo to integrate our real-time advertising offering into their advertising management platforms, which is critical to; and |
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▪ | In late 2014, we entered into significant partnerships with Pandora to ingest demographic information about mobile consumers to improve our products and with Datalogix to incorporate their consumer segmentation data into our advertising product suite. |
Key 2014 Compensation Actions
Chief Executive Officer Transition. As announced on February 11, 2014, Dr, Abraham transitioned from serviceappointed as our Chief Executive Officer to assume a newand Executive Vice Chairman, effective immediately. Upon Mr. Livek’s appointment, Mr. Fuller resumed his role as Executive Chairmananon-employee director.Compensation Committee Composition
During 2019, the following members of our Board of Directors effectiveserved on the Compensation Committee:
Michelle McKenna (until March 7, 2019);
Robert Norman (until May 22, 2019);
Paul Reilly (until August 12, 2019);
Jacques Kerrest (from March 9, 2019 to March 31, 2019);
Joanne Bradford (from April 1, 2014. Mr. Matta, our President, was appointed2019 to the position of PresidentApril 30, 2020);
Kathleen Love (from April 1, 2019 to present); and Chief Executive Officer. In connection with this transition, our Compensation Committee, in consultation with Compensia, approved the following compensation actions:
Mr. Matta:
Increased his annual base salary from $415,000John Martin (from September 6, 2019 to $475,000;present).
Increased his annual incentive target opportunity to $700,000;
Increased his target performance-based long-term incentive opportunity to $700,000;
Increased his annual time-based long-term incentive opportunity to $700,000; and
Granted him a one-time "promotion" equity award in the form of a restricted stock unit award for 44,459 shares of our common stock as follows:
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◦ | One-half of the award, or 22,230 shares, would be earned based on our actual achievement as compared against company-level performance objectives established for 2014, and |
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◦ | One-half of the award, or 22,229 shares, to vest in three equal annual installments in February 2015, 2016, and 2017, all subject to his continued service on each respective vesting date. |
Dr. Abraham:
At his request, reduced his annual base salary from $500,000 to $250,000, to be paid in the form of restricted shares of our common stock in lieu of cash;
Agreed that the restricted stock unit award for 96,666 shares of our common stock originally granted to him in 2012, while he was serving as Chief Executive Officer, and which was to be subject to the achievement of company-level performance objectives established in 2014, would remain in force, with the performance objectives realigned to focus on Dr. Abraham's responsibilities in connection with the Chief Executive Officer transition, and as Executive Chairman;
Agreed that the restricted stock unit award for 96,666 shares of our common stock originally granted to him in 2012, while he was serving as Chief Executive Officer, and which was to reward the overachievement of the 2014 performance objectives, would be reduced by 50% to a restricted stock unit award for 48,333 shares of our common stock, with the performance objectives realigned to focus on Dr. Abraham's responsibilities in connection with the Chief Executive Officer transition, and as Executive Chairman; and
Agreed that the restricted stock award for 70,000 shares of our common stock, originally granted to him in 2012, while he was serving as Chief Executive Officer, for retention purposes would be allowed to continue vesting in accordance with its original terms, subject to Dr. Abraham's continued service through March 2015.
Chief Financial Officer Transition. On August 4, 2014, we announced the appointment of Mr. Wesley as our Chief Financial Officer. This appointment followed Mr. Tarpey's May 8, 2014 announcement that he intended to retire from the Company. In connection with this transition, our Compensation Committee, in consultation with Compensia, approved an employment offer letter with Mr. Wesley providing for the following:
A base salary of $320,000;
A target annual incentive opportunity of $240,000, based on achievement of 2014 performance objectives;
A target performance-based long-term incentive opportunity of $450,000, based on achievement of 2014 performance objectives, but with any shares earned subject to a three-year time-based vesting requirement; and
Eligibility for a time-based long-term incentive in the amount of $300,000 subject to a three-year vesting requirement.
In addition, our Compensation Committee also granted Mr. Wesley a one-time "new-hire" equity award in the form of a restricted stock unit award for 10,000 shares of our common stock, to vest in three equal annual installments in August 2015, 2016 and 2017.
Special Market-Based Equity Awards for Executive Officers. On November 7, 2014, our Compensation Committee granted a special market-based performance equity award to our Chief Executive Officer as well as our other named executive officers. These awards, as further discussed below, were comprised of a mix of stock options as well as restricted stock units. The number of shares of our common stock subject to the restricted stock units and options granted was calculated based on a percentage of the aggregate market capitalization increase that our Compensation Committee sought to achieve through the awards. The awards were designed to motivate our Chief Executive Officer and management to drive sustained enterprise value toward a significantly higher market capitalization through 2017.
To achieve this objective, both the restricted stock units and the option awards were to vest (in the case of the options, to become exercisable) only upon the achievement of pre-established stock-price targets ranging from $48.00 to $60.00 per share. Based on a careful analysis of our Company's historic stock price performance, our Compensation Committee believed that to attain these stock-price targets to be challenging and attainable only by performance far in excess of our previous annual sales levels. Instead, our Compensation Committee believed that, to achieve these stock-price targets, it would be necessary for us to continue to expand our business relationships with existing and new strategic customers and to enter into strategic alliances with one or more third parties. For example, the lowest stock-price target of $48.00 per share represented a 25% increase in the market value of our common stock as measured by the 30-day average trading price of our common stock asAs of the date of this filing, the award bearing in mind that the trading priceCompensation Committee is composed of our common stock already had increased 161% over the preceding 12 months. This market-based program would require a minimum market capitalization growth of $322 million (or 25% growth) to achieve the initial stock-price target,Kathleen Love (Chair), John Martin and additional targets of up to a maximum market capitalization growth of $721 million (or approximately 50% growth), assuming basic shares outstanding remained constant.
Chief Executive Officer Compensation
In 2014, our newly-appointed Chief Executive Officer's compensation was primarily performance-focused. Approximately 54% of Mr. Matta’s target total direct compensation (excluding his promotion and market-based awards) was variable in nature and "at risk." In addition, the performance-based components of his total direct compensation opportunity provided for an above-target payment in the event of strong overachievement.
2014 Stockholder Advisory Vote onBrent Rosenthal.Our Executive Compensation
We conducted a stockholder advisory (non-binding) vote on the compensation of our named executive officers (a so-called “say-on-pay” vote) for the year ended December 31, 2013 at our 2014 Annual Meeting of Stockholders pursuant to rules promulgated under Section 14A of the Securities Exchange Act of 1934. Our stockholders expressed support for the compensation of our named executive officers for the year ended December 31, 2013, with more than 90% of the votes cast for approval of their compensation.
Our Compensation Committee carefully evaluated the results of this advisory vote and the feedback we received from several of our major stockholders in connection with its general evaluation of our executive compensation programs. Taking into account the results of the say-on-pay vote, along with other factors such as our corporate business objectives and our Compensation Committee’s review of competitive market data (as discussed in more detail below), PhilosophyHistorically, our Compensation Committee did not make changes to our executive compensation program and policies as a result of the 2014 “say-on-pay” vote.
Executive Compensation Policies and Practices
We endeavor to maintain sound executive compensation policies and practices, including compensation-related corporate governance standards, consistent with our executive compensation philosophy. During 2014, the following executive compensation policies and practices were in place, including both policies and practices we have implemented to drive performance and policies and practices that either prohibit or minimize behaviors that we do not believe serve our stockholders’ long-term interests:
What We Do
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▪ | Compensation Committee Independence - Our Board of Directors maintains a compensation committee comprised solely of independent directors who have established effective means for communicating with our stockholders regarding their executive compensation ideas and concerns.
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▪ | Compensation Committee Advisor Independence - Our Compensation Committee engages and retains its own advisors. During 2014, the Compensation Committee engaged Compensia, Inc. to assist with its responsibilities. Compensia performs no consulting or other services for the Company.
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▪ | Annual Compensation Review - Our Compensation Committee conducts an annual review of our executive compensation philosophy and strategy, including a review of the compensation peer group used for comparative purposes.
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▪ | Compensation-Related Risk Assessment - As part of the annual review of our executive compensation philosophy and strategy, we also evaluate our compensation programs, policies, and practices to ensure that they reflect an appropriate level of risk-taking but do not encourage our employees to take excessive or unnecessary risks that could have a material adverse impact on the Company.
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▪ | Emphasize Performance-based Incentive Compensation - Our Compensation Committee designs our executive compensation program to use performance-based short-term and long-term incentive compensation awards to align of the long-term interests of our executive officers with the interests of our stockholders.
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▪ | Emphasize Long-Term Equity Compensation - Our Compensation Committee uses equity awards to deliver long-term incentive compensation opportunities to our executive officers, including our named executive officers. These equity awards vest or may be earned over multi-year periods, which better serves our long-term value creation goals and retention objectives.
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▪ | Limited Executive Perquisites - We provide only modest amounts of perquisites or other personal benefits to our named executive officers which serve a sound business purpose. In addition, our named executive officers participate in our health and welfare benefit programs on the same basis as all of our employees.
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▪ | “Double-Trigger” Change in Control Arrangements - The post-employment compensation arrangements for certain of our named executive officers, including our Chief Executive Officer, our Chief Financial Officer, our Chief Operating Officer and General Counsel, are based on a “double-trigger” arrangement that provides for the receipt of payments and benefits only in the event of (i) a change in control of the Company and (ii) a qualifying termination of employment
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▪ | Reasonable Change-in-Control Arrangements - The post-employment compensation arrangements for certain of our executive officers, including our named executive officers, provide for amounts and multiples that are within reasonable market norms.
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▪ | Prohibition on Hedging and Pledging - Our executive officers, including our named executive officers, and the members of our Board of Directors are prohibited from engaging in hedging transactions with respect to our equity securities. Our executive officers, including our named executive officers, are also prohibited from pledging shares of our common stock.
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▪ | Succession Planning - Our Board of Directors reviews the risks associated with our key executive positions with our Chief Executive Officer on a periodic basis so that we identify and prepare for an adequate succession strategy and plans are in place for our most critical positions.
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What We Do Not Do
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▪ | Retirement Programs - Other than our Section 401(k) plan generally available to all employees, we do not offer defined benefit or contribution retirement plans or arrangements or nonqualified deferred compensation plans or arrangements for our executive officers, including our named executive officers.
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▪ | No Tax “Gross-Ups” or Payments - We do not provide any “gross-ups” or tax payments in connection with any compensation element or any excise tax “gross-up” or tax reimbursement in connection with any change in control payments or benefits.
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▪ | No Dividends - We do not pay dividends or dividend equivalents on unvested or unearned restricted stock units and performance-based restricted stock unit awards.
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▪ | No Stock Option Repricing - We do not reprice options to purchase shares of our common stock without stockholder approval.
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Our Philosophy
The objective of our compensation programs for our employees, including our executive officers, is to attract and retain top talent. Our compensation plans are designed to motivate and reward employees for achievement of positive business results and also to promote and enforce accountability.
In determining the compensation arrangements of our named executive officers, we arehas been guided by the following key principles:
goals and principles in establishing compensation arrangements for our executive officers:Align Stockholder Interests and Promote Achievement of Strategic Objectives.
Not only should our compensation arrangements be tied to our financial performance, strong performance-based equity awards for high growth in the value of our common stock serve to. To further align our executive officers’ interests with those of our stockholders, the Compensation Committee believes that compensation arrangements should be tied to long-term value creation for our stockholders. Promote Achievement of Financial Goals.
Company Objectives. The Compensation Committee believes that executive compensation should be dependent onpromote the achievement of our financial, goalsstrategic and increasing the value of our common stock. We seek to establish financial targets that are aligned with the financial targets that we provide to our investors and stockholders in the beginning of the year.operational goals.Reward Superior Performance.
We believePerformance. The Compensation Committee believes that while total compensation for an executive officers should be both competitive and tied to achievement of financial goals and strategic objectives, performance that exceeds targetspre-established objectives. Performance exceeding target levels should be appropriately awarded. rewarded, just as performance below target should result in lower compensation.Attract and Retain Top Talent.
OurTalent. The Compensation Committee believes that compensation arrangements should be sufficient to allow us to attract, retain and motivate executive officers with the necessary skills and talent needed to successfully manage our business taking into consideration a number of factors such as market analyses, experience, alternative market opportunities, and consistency withsuccessfully.Prioritize Tone at the compensation paid to other professionals within our organization.
Application of our Philosophy
We believeTop. Ensuring that our executive
officers prioritize and maintain a strong, ethical corporate culture and appropriate tone at the top is an additional principle that guides our Compensation Committee’s actions and decisions.Finally, our compensation program appropriately balances short-termprograms are intended to be consistent with corporate governance best practices. This is demonstrated by our:
stock ownership guidelines for directors and long-term elements, cashexecutive officers;
compensation recovery (clawback) policy and equity elements,provisions;
anti-hedging and fixedpledging policy;
insider trading policy and contingent payments. We applypreclearance requirements;
consideration of market data, input from stockholders and critiques from stockholder advisory firms;
independent Compensation Committee oversight;
engagement of an outside compensation consultant;
no automatic increases in executive salaries or lock-step changes in compensation based on peer group levels or metrics;
no repricing or buyout of underwater stock options without stockholder approval.
Compensation-Setting Process
Guided by our compensation philosophy, using both quantitative and qualitative performance measures to motivate our named executive officers and reward them for achieving the following goals:
develop a culture that embodies a passion for our business and a drive to achieve and exceed established goals and objectives;
provide leadership to the organization in such a way as to maximize the results of our business operations;
lead us by demonstrating forward thinking in the operation, development and expansion of our business; and
effectively manage organizational resources to derive the greatest value possible from each dollar invested.
Our executive compensation program aims not only to compensate top talent at levels that we believe are generally at or near the median of the competitive market (as reflected by our compensation peer group), but also to be proportionate relative to compensation paid to other professionals within our organization, and to be appropriately linked to our short-term and long-term performance results and to the value we deliver to our stockholders. In some instances, we may adjust our compensation levels in the event that the Compensation Committee of our Board of Directors believes suchgenerally seeks to provide total compensation would be in our best interest to attract or retain a specific executive officer. Wepackages that are fair, reasonable and consistent with competitive practice. Overall, we seek to maintain a performance-oriented culture with a compensation approachopportunities that rewardsreward our named executive officers when we achieve
and or exceed our goals,
and objectives, while putting
at risk a significant portion of their
target compensation
againstat risk in the
possibilityevent of underperformance.In 2019, our compensation-setting process was also influenced by the extraordinary circumstances we faced. In addition to the leadership transitions described above, we implemented significant operational changes during 2019, including multiple workforce reductions, lease and contract terminations, and other cost-reduction initiatives. Due to these changes, we did notpre-establish targets for the financial measures historically used in our incentive compensation programs. We also experienced declines in our stock price, which reduced the value of outstanding equity awards held by our executive officers, increased the number of shares required to deliver the same compensation value, and thus limited our ability to grant new awards that would serve as meaningful incentives. These challenges led our goals and objectives may not be achieved. Our Compensation Committee considers bothto suspend our long-term incentive compensation program in 2019, with no new equity awards granted to our continuing executive officers during the year. The Compensation Committee also awarded annual bonuses based on a qualitative assessment of strategic accomplishments, including the initiatives described above, rather than financial targets. At the same time, the Compensation Committee sought to maintain alignment between the interests of our executive officers and quantitative factors as measuresour stockholders, including by linking a substantial portion of individualtarget compensation for our new executive officers (including our new Chief Executive Officer) to performance, and weights these factorsincluding sustained improvement in assessing a particular individual’s performance.
our stock price.Role of Our Compensation Committee
OurThe members of our Compensation Committee isare appointed by our Board of Directors and consiststo oversee our executive compensation program. At all times during 2019, the Compensation Committee was composed entirely of directors who are “outsidewere“non-employee directors” for purposes of Section 162(m) of the Internal Revenue Code, “non-employee directors” for purposes ofSecurities Exchange ActRule 16b-3 and “independent directors” under theNasdaq listing standards ofstandards.
Pursuant to its charter, the NASDAQ Stock Market. Our Compensation Committee is comprised of Messrs. Henderson, Katz and Fradin, and is chaired by Mr. Henderson.
Our Compensation Committee approves, oversees and interprets our executive compensation program and related policies and practices, including our 1999 Stock Plan, our 2007 Equity Incentive Planequity incentive program and other compensation incentives and benefits programs. OurThe Compensation Committee is also responsible for establishing the compensation packages of our executive officers and ensuring that our executive compensation program is consistent with our compensation philosophy and corporate governance guidelines.
Ourpolicies.Generally, the Compensation Committee takes the following steps to ensure that our executive compensation program is consistent with both our compensation philosophyactions in the discharge of its responsibilities:
reviews the corporate goals and our corporate governance guidelines:
regularly reviews theobjectives of, and performance of and the total compensation earned by or awarded to, our Chief Executive Officer, and Executive Chairman independent of input from them;our Chief Executive Officer;
examines on an annual basis the performance of our other named executive officers with assistance from our Chief Executive Officer and Executive Chairman and approves total compensation packages for them that it believes to be appropriate and consistent with those generally found in the marketplace for executives in comparable positions;
regularly holds executive sessions without management present; and
engages a compensation consultant to review our executive compensation policies and practices, and provide analysis of the competitive market, for our executive officers in connection with each componentand make recommendations regarding the elements of our executive officer compensation packages.
As part of its decision-making process, ourthe Compensation Committee periodically evaluates comparative compensation data which includes base salary, short-term cash incentives, long-term incentive compensation (including equity awards) and other compensation components from similarly situated companies. OurHistorically, the Compensation Committee determines
has determined the target total direct compensation opportunities for each namedexecutive officers after considering the following factors, among others:the scope and nature of the executive officer’s responsibilities;
how much the executive officer based onmight otherwise command in the following key factors:employment marketplace;
| |
(i) | how much we would be willing to pay to retain that named executive officer; |
| |
(ii) | how much we would expect to pay in the marketplace to replace that named executive officer; |
| |
(iii) | how much that named executive officer could otherwise command in the employment marketplace; |
| |
(iv) | past performance as well as the strategic value of the executive officer's future contributions; and |
Further, ourhow much we would be willing to pay to retain the executive officer;
how much we would expect to pay in the marketplace to replace the executive officer;
past performance, as well as the strategic value of the executive officer’s future contributions; and
internal parity within the executive team.
The Compensation Committee also considers the recommendations of our Chief Executive Officer, who annuallyperiodically reviews competitive market data, individualthe performance, and changes in roles orand responsibilities of our other executive officers and proposes adjustments to the executive officer'stheir compensation based on this review. The Chief Executive Officer does not participate in Compensation Committee discussions or make recommendations with respect to his own compensation. By evaluating the comparative compensation data in light of the foregoing factors, we believe ourthe Compensation Committee is better ableseeks to tailor its compensation determinations withdecisions to the specific needs and responsibilities of the particular position, and the unique qualifications of the individual named executive officer.
Role of Compensation Consultant
OurThe Compensation Committee is authorized to retain the services of one or more executive compensation advisors from time to time, as it determines in its discretion, in connection with the discharge of its responsibilities. During 2014, ourThe Compensation Committee retained the services of Compensia, Inc.Meridian Capital Partners, LLC (“Meridian”), a national compensation consulting firm, as its compensation consultant. Compensiafor this purpose during 2019. Meridian serves at the discretion of our Compensation Committee. Compensia was engaged to provide advice and information relating to executive officer and director compensation. In 2014, Compensia assisted our Compensation Committee in (i) reviewing our compensation peer group, (ii) analyzing the compensation of our executive officers, (iii) reviewing and analyzing market data related to our executive officers’ base salaries, short-term cash incentives, and long-term incentive compensation levels, and (iv) evaluating equity plan design and structures.
Compensia reports directly to
ourthe Compensation
Committee andCommittee. Meridian did not provide any services to us or our management in
20142019 other than those provided to
ourthe Compensation Committee as described
above. Ourbelow.In 2019, Meridian assisted the Compensation Committee hasby providing the following services:
reviewing our compensation peer group;
evaluating equity plan modeling, value delivery and share usage;
analyzing compensation arrangements for new executive officers and departing executive officers;
assisting with the valuation of market-based equity awards;
reviewing our change in control and severance agreements with executive officers; and
analyzing market data and other considerations related to compensation of our independent chairman.
The Compensation Committee considered all relevant factors relating to the independence of Compensia in light of the NASDAQ Marketplace RulesMeridian, including but not limited to applicable SEC rules and Nasdaq listing standards on Compensation Committee advisorcompensation consultant independence, and the rules of the Securities and Exchange Commission and has concluded that the work performed by CompensiaMeridian did not raise any conflict of interest.
Review of Compensation Policies for 2014
interest in 2019.Competitive Market Data
In the fourth quarter of 2013, as part of our ongoing commitmentorder to link currentattract and retain strong management talent, we believe we must provide a total compensation levelspackage that is competitive relative to our compensation philosophy and business strategy,peers. For this purpose, we consider the practices of specific companies that we have identified as our peers. These companies are selected periodically by our Compensation Committee requested that Compensia review our direct compensation levels, including base salary, total cash compensationon the basis of industry, similar business models and total direct compensation. Alsocomparable financials (including revenue and market capitalization). The peer companies used in 2014, our2019 were as follows, reflecting a shift from software companies to advertising and media companies. At the time the Compensation Committee requested that Compensia review our compensationselected this peer group in July 2019, our revenue approximated the median and recommend any appropriate updates.
Compensia recommended an update toour market capitalization approximated the compensation peer group based on management input as to companies with whom we may compete for executive talent. All20th percentile of the companies included in the compensation peer group are providers of digital marketing intelligence or related analytical products and services, marketing services and solutions or survey services. Upon consultation with our Compensation Committee and management, as well as upon conducting independent research, Compensia recommended and our Compensation Committee used the following peer group throughout 2014:
group. |
| | |
Constant ContactCostar8x8, Inc. | | InnerWorkings |
Cardlytics | | LogMeIn |
Cloudera | | MDC Partners |
ExlService Holdings | | MicroStrategy |
Fluent | | Resources Connection |
Forrester Research | | SVMK Inc. |
Huron Consulting Group Dealertrack Technologies
Dice Holdings
Liquidity
| | TechTarget |
Information Services
Group | LivePerson
LogMeIn
MicroStrategy
OpenTable
QuinStreet
| Responsys
Synchronoss Technologies
Vocus
Web.com Group
WebMD Health
Varonis Systems |
CompensiaUsing data collected from these companies, Meridian provided a report toanalyses of our severance andchange-in-control arrangements for executive officers against the competitive market. Our Compensation Committee also used data from these companies in January 2014 with observationsits evaluation of our director compensation program. For additional context in its review of our severance and analyses regardingchange-in-control arrangements, Meridian also considered survey data from the directbroader market.
Stockholder Advisory Vote on Executive Compensation
We conducted anon-binding stockholder advisory vote on the compensation levels of our named executive officers. The 2014 study referenced both publishedofficers (known as asay-on-pay vote) for the year ended December 31, 2018 at the last annual meeting of stockholders that we held, which was in June 2019. Our stockholders expressed strong support for the 2018 compensation survey data of comparably-sized companies targeting a range of companies with revenues from half to twice our revenues and the compensation peer group. In February 2014, Compensia further reviewed the proposed compensation levels to reflect the Chief Executive Officer transition announced in February 2014. In March 2014, Compensia assisted our Compensation Committee in reviewing proposed adjustments to compensation for ournamed executive officers, to reflectwith more than 99% of the scopevotes cast for approval of responsibilities they would hold after Chief Executive Officer transition.
the proposal. Our Compensation Committee considered the 50th percentileresults of the competitive market when making its decisions with respect to individual compensation components as it believed that such positioning would be at a competitive level forsay-on-pay vote and other feedback from our named executive officersstockholders, as well as consistent with industry practicescritiques from stockholder advisory firms, in the technology sector. In makingdesigning our compensation programs for 2019, particularly for new executive officers. Based on this determination, ourinput, the Compensation Committee considered such factors as our stage of development, the size and characteristics of our Company, based on both headcount and operations and balance sheet characteristics, the expected future characteristics of our business relativedid not implement significant changes to our executive compensation peer groupprogram design for 2019, other than the individual’s seniority, position and functional role, level of responsibility, accomplishments against personal and group objectives, and the compensation analysis prepared by Compensia. In addition, our Compensation Committee considered the market for corresponding positions within comparable geographic areas and industries as well as the state of our business and our cash flows.
situational decisions described elsewhere in this CD&A.Executive Compensation Program Elements
Our executive compensation program consistshas historically consisted of three primary elements: base salary, performance-basedannual incentive opportunities and a long-term time-based compensation opportunities. Aside from base salary, the other compensation elements are distributed in the form of equity awards, which we use to further align our executive officer's interests with stockholder interests.
Our Compensation Committee evaluates executive compensation and strives to apply the mix of these elements inlong-term incentive compensation. We also offer health and welfare benefits and certain separation-related benefits. Although we do not have a manner consistent with our compensation philosophy while meeting our objectives to attract and retain top talent using compensation that is consistent with or more attractive than other opportunities while also adjusting for individual relative performance and responsibilities as well as our business goals. Our Compensation Committee has no formal policy for allocating executive compensation among the primary compensation componentselements, our Compensation Committee seeks to provide compensation opportunities that are consistent with our philosophy described above.
Base Salary
BaseTo this end, base salary isdecisions in 2019 were guided primarily by our objective of attracting and retaining top executive talent. As in prior years, we used base salary to recognize the experience, skills, knowledge and responsibilities required of each namedour executive officer, as well asofficers.
As described above, we temporarily replaced our formulaic annual incentive compensation program for executive officers in 2019 with awards based on achievement of strategic objectives. This change was intended to reflect competitive market practice. Asreward performance while recognizing the efforts of our executive team to maintain normal business operations during a period of great change for the company. For 2020, our Compensation Committee initially considered our named executive officers’has returned to a more traditional annual incentive compensation for 2014, base salary determinations were guided primarily by our objective to provide compensation at levels to attract and retain top talent. Also, in early 2014,structure.
Finally, as described above, our Compensation Committee evaluated the base salaries ofsuspended our namedlong-term incentive program for continuing executive officers in light2019. For our new executive officers, the Compensation Committee designed equity award opportunities to be aligned with value creation for our stockholders.
Executive Compensation Actions and Decisions for 2019
Our Compensation Committee did not undertake its regular annual review of our executive compensation program and each executive officer’s compensation during 2019. Instead, compensation decisions were made on acase-by-case basis, taking into account the situation that confronted the company at the time that we needed to appoint a new executive officer, address the circumstances relating to a departing executive officer, or respond to the incentive and retention challenges that were presented for continuing executive officers. These decisions are described below.
Chief Executive Officer transition announcedTransition (March 2019)
On March 31, 2019, Mr. Wiener resigned as our Chief Executive Officer. In connection with his resignation, the company and madeMr. Wiener entered into a Separation Agreement pursuant to which he received:
cash severance equal to the sum of one year of base salary adjustmentsand one year of target annual incentive opportunity, half of which was paid in installments in 2019 and the other half of which was paid in a lump sum in March 2020, subject to certain mitigation and forfeiture provisions;
a target bonus for 2019 of $65,000, subject to achievement of applicable performance goals and representing a portion of his annual incentive opportunity for service through March 31, 2019 (see “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation Actions and Decisions for 2019 – Annual Bonuses” below for payment information);
reimbursement of the cost of continuation healthcare coverage for up to 18 months;
reimbursement of certain legal expenses;
accelerated vesting of 61,335 outstanding restricted stock units, representing hissign-on award and a portion of his 2018 long-term incentive award; and
satisfaction of the service requirement with respect to 36,347 outstanding performance-based restricted stock units, which will remain eligible to be earned subject to achievement of the applicable performance goals.
Under his Separation Agreement, Mr. Wiener agreed to a comprehensive release of claims and reaffirmed his commitment to be bound by restrictive covenants regarding confidential information,non-disparagement,non-competition andnon-solicitation. Additional information regarding amounts paid to Mr. Wiener under his Separation Agreement is set forth under “Executive Compensation – Payments Upon Termination or Change in Control” below.
Upon Mr. Wiener’s resignation, our Board of Directors appointed Mr. Fuller as Interim Chief Executive Officer. The company and Mr. Fuller entered into a letter agreement to memorialize the terms of his interim service, pursuant to which he received:
base salary of $25,000 per week;
a monthly stipend of $2,000 for temporary living expenses; and
aone-time grant at the end of his interim term of a number of deferred shares equal to (a) $25,000 per week of service, divided by (b) the volume-weighted average price for the 10 consecutive trading days immediately preceding the date of grant (see “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation Actions and Decisions for 2019 – Chief Executive Officer Transition (November 2019)” for additional information about this grant).
During his term as Interim Chief Executive Officer, Mr. Fuller did not receive any additional compensation for his service as a member of our Board of Directors; however, the outstanding restricted stock units granted to him as anon-employee director in July 2018 continued to vest.
In negotiating Mr. Fuller’s compensation terms, our Compensation Committee considered the temporary nature of his assignment and the fact that he would not be eligible for annual or long-term incentive compensation opportunities as Interim Chief Executive Officer. The Compensation Committee also considered the need to align Mr. Fuller’s interests with the long-term interests of our stockholders, resulting in the decision to deliver a substantial portion of his total direct compensation in deferred stock.
President Resignation
On March 31, 2019, Ms. Hofstetter resigned as our President. In connection with her resignation, the company and Ms. Hofstetter entered into a Separation Agreement pursuant to which she received:
cash severance equal to one year of base salary, which was paid in installments over 12 months, subject to certain mitigation and forfeiture provisions;
a target bonus for 2019 of $42,000, subject to achievement of applicable performance goals and representing a portion of her annual incentive opportunity for service through March 31, 2019 (see “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation Actions and Decisions for 2019 – Annual Bonuses” below for payment information);
reimbursement of the cost of continuation healthcare coverage for up to 12 months;
reimbursement of certain legal expenses;
an additional cash payment representing the remainder of hersign-on bonus from 2018;
accelerated vesting of 18,417 outstanding restricted stock units, representing a portion of hersign-on award; and
satisfaction of the service requirement with respect to 8,524 outstanding performance-based restricted stock units, which will remain eligible to be earned subject to achievement of the applicable performance goals.
Under her Separation Agreement, Ms. Hofstetter agreed to a comprehensive release of claims and reaffirmed her commitment to be bound by restrictive covenants regarding confidential information,non-disparagement,non-competition andnon-solicitation. Additional information regarding amounts paid to Ms. Hofstetter under her Separation Agreement is set forth under “Executive Compensation – Payments Upon Termination or Change in Control” below.
Chief Commercial Officer Appointment
Effective April 17, 2019, Mr. Wilson was appointed as our Chief Commercial Officer. Mr. Wilson was rehired as an executive officer following a term as a consultant to the company, during which he received consulting fees of $10,546. Prior to his consulting term, Mr. Wilson served as our Chief Revenue Officer until December 31, 2018.
In connection with his departure as Chief Revenue Officer, Mr. Wilson received cash severance installments totaling $88,636 and reimbursement of continuation healthcare premiums of $9,146 in 2019, which severance installments and continuation coverage ended upon his reemployment. Mr. Wilson’s outstanding equity awards continued to vest during his consulting term and reemployment.
Mr. Wilson’s appointment as Chief Commercial Officer included the following initial compensation terms:
an annualized base salary of $375,000;
eligibility to participate in our annual incentive compensation program, with a target award of $450,000 for 2019;
continued vesting of a retention bonus awarded in 2018;
aone-time grant of 41,254 restricted stock units, intended to make Mr. Wilson whole for compensation opportunities lost in 2018, when he did not participate in our long-term incentive compensation program;
aone-time grant of options to purchase 150,000 shares of our Common Stock, vesting over four years;
aone-time grant of 225,000 performance-based restricted stock units, vesting through May 22, 2029 subject to the achievement of specified stock-price hurdles (ranging from $21.00 to $60.00, equivalent to roughly 200% to 580% of our stock price on the date of grant), which hurdles must be maintained for at least 65 consecutive trading days during the applicable vesting period;
reimbursement of up to $38,700 in legal expenses; and
a Change of Control and Severance Agreement with the company, the material terms and conditions of which are described under “Executive Compensation – Payments Upon Termination or Change in Control” below.
In evaluating compensation terms for Mr. Wilson, our Compensation Committee considered the importance of linking a substantial portion of Mr. Wilson’s target direct compensation to performance. The Compensation Committee also considered analyses prepared by, and discussions with, its compensation consultant. Finally, as noted above, the Compensation Committee considered compensation opportunities lost by Mr. Wilson in connection with his earlier separation as Chief Revenue Officer.
Chief Operating Officer Term
Effective April 17, 2019, Ms. Bachmann was appointed as our Chief Operating Officer. Ms. Bachmann previously served as anon-executive employee of the company, and she received aone-time grant of 6,779 restricted stock units in February 2019 in connection with hernon-executive role. Ms. Bachmann’s compensation terms, including her base salary of $350,000 and annual incentive compensation target of 50% of base salary, did not change in connection with her appointment as Chief Operating Officer.
On May 29, 2019, Ms. Bachmann resigned as our Chief Operating Officer. In connection with her resignation, the company and Ms. Bachmann entered into a Separation Agreement pursuant to which she received cash severance equal to four months of base salary, which was paid in a lump sum in 2019, and reimbursement of the cost of continuation healthcare coverage for up to six months. Under her Separation Agreement, Ms. Bachmann agreed to a comprehensive release of claims and reaffirmed her commitment to be bound by restrictive covenants regarding confidential information,non-competition andnon-solicitation. Additional information regarding amounts paid to Ms. Bachmann in connection with her Separation Agreement is set forth under “Executive Compensation – Payments Upon Termination or Change in Control” below.
Chief Financial Officer Special Bonus
On May 6, 2019, our Compensation Committee approved a special retention bonus for Mr. Fink. Under the bonus, Mr. Fink was eligible to receive $500,000 in cash, contingent on his continued employment through December 15, 2019 and payable on the later of March 1, 2020 or the date we filed our Annual Report on Form10-K for 2019. Mr. Fink was paid the special bonus in March 2020.
Chief Executive Officer Transition (November 2019)
On November 4, 2019, our Board of Directors appointed Mr. Livek as our Chief Executive Officer and Executive Vice Chairman. Mr. Livek previously served as our Vice Chairman since January 2016 and was our President from January 2016 through May 2018, and he served as a special advisor to the company from May 2018 until his appointment as Chief Executive Officer in November 2019. In his role as special advisor, Mr. Livek received an annualized base salary of $443,700 and continued to vest in his outstanding equity awards.
In connection with his appointment as Chief Executive Officer, we and Mr. Livek entered into a letter agreement that included the following compensation terms:
an annualized base salary of $650,000;
eligibility to participate in our annual incentive compensation program, with a target award equal to 100% of base salary;
eligibility to participate in our long-term incentive compensation program;
aone-time grant of 175,000 restricted stock units, vesting ratably over three years;
aone-time grant of options to purchase 300,000 shares, vesting ratably over three years;
aone-time grant of 425,000 performance-based restricted stock units, vesting quarterly through November 4, 2029 subject to the achievement of specified stock-price hurdles (ranging from $5.00 to $10.00, equivalent to roughly 210% to 420% of our stock price on the date of grant), which hurdles must be maintained for at least 65 consecutive trading days during the applicable vesting period; and
payment of $200,000 in legal expenses.
Additionally, Mr. Livek is eligible to receive aone-time bonus of at least $1,000,000 (either individually or as part of a larger pool for executive officers or employees) upon the successful completion of a refinance of all or substantially all of our outstanding senior secured convertible notes, generally subject to Mr. Livek’s continued employment through such refinance. Upon the consummation of a qualifying change in control, as defined in the letter agreement, Mr. Livek will receive aone-time bonus of $1,000,000, plus an additionalone-time bonus based on specified percentages (ranging from 0.30% to 0.32%) of the changed roles,gross transaction proceeds resulting from such change in control so long as the change in control results in gross transaction proceeds of at least $500 million. Each bonus payable upon the consummation of a change in control is generally subject to Mr. Livek’s continued employment through the change in control. Finally, Mr. Livek will continue to be eligible to receive the benefits set forth in his Change of Control and Severance Agreement with the company, as described under “Executive Compensation – Payments Upon Termination or Change in Control” below.
In evaluating compensation terms for Mr. Livek, our Compensation Committee considered his 40 years of experience in media and consumer measurement, as well as the expected transition-related responsibilities that continuedstrategic value of his past and future contributions to the company. The Compensation Committee also considered input from its compensation consultant, particularly with Dr. Abrahamrespect to Mr. Livek’s equity awards and special bonus opportunities. Finally, the Compensation Committee sought to align Mr. Fulgoni.
The base salaries of eachLivek’s interests with those of our executive officers are reviewed on an annual basisstockholders, including by linking a substantial portion of his target direct compensation to sustained improvement in our stock price, and if determined appropriate, adjustments are made following each fiscal year based, withinanother portion to the contextsuccessful completion of a refinance or qualifying change in control with transaction proceeds significantly exceeding our overall annual merit increase structure, and at other timescurrent market capitalization.
In connection with Mr. Livek’s appointment, Mr. Fuller resigned as appropriate, in each case to reflect performance-based factors, marketplace conditions and the overall performance of our business, and based on the recommendation of ourInterim Chief Executive Officer.
The following table sets forthOfficer on November 4, 2019. On the annualized base salaries for 2013 and 2014 for each named executive officer:
|
| | | | | | | | |
| Name | 2013 | 2014 | Percentage Change |
|
| Serge Matta | $ | 415,000 |
| $ | 475,000 |
| 14.5 | % |
| Magid M. Abraham, Ph.D. | 500,000 |
| 250,000(1) |
| (50.0 | )% |
| Gian M. Fulgoni | 375,000 |
| 375,000(1) |
| 0.0 | % |
Kenneth J. Tarpey (retired August 28, 2014) | 367,500 |
| 367,500 |
| 0.0 | % |
| Cameron Meierhoefer | 321,000 |
| 353,000 |
| 10.0 | % |
| Christiana Lin | 302,500 |
| 333,000 |
| 10.0 | % |
| |
(1) | For the period from January 1, 2014 through December 31, 2014, in lieu of receiving a cash salary, each of Dr. Abraham and Mr. Fulgoni received an award of shares of our common stock with a value equal to the amount of salary foregone by each, less amounts paid to them in cash during 2014 to cover health benefits, based on the closing price of our common stock as reported on the NASDAQ Global Market at the close of trading on March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014. The number of shares of our common stock delivered to each named executive officer was reduced by the number of shares necessary to satisfy applicable tax withholding requirements. |
Incentive Compensation
Both our annual and long-term incentive compensation arrangements are equity-based. By using equity to compensate our named executive officers for successfully completing the objectives in our annual operating plan and sharing in the long-term results of their efforts, we believe that we are closely aligning their interests with the interests of our stockholders. Our the components of our 2014 Executive Compensation Bonus Policy is further described below:
Annual Incentive Compensation. We provide annual incentive compensation to our named executive officers payable entirely in shares of our common stock. Pursuant to these award opportunities, our named executive officers may earn shares of our common stock based on our corporate and their individual performance. Our named executive officers must remain employed through the date thatsame day, our Compensation Committee makes its determinationsawarded 354,546 deferred stock units to Mr. Fuller as to the prior year’s performance to earn these shares. The target, weighting, performance objectives, and results are described belowcompensation for the named executive officers (other than Dr. Abraham). Given thehis service as Interim Chief Executive Officer, transition requirements, Dr. Abraham's annual incentive compensation was separately addressed by our Compensation Committee and is described in the section below titled, "Annual Incentive Compensation for Dr. Abraham".
Target Annual Incentive Award Opportunities. At the beginning of 2014, our Compensation Committee established target annual incentive award opportunities for each of our then-named executive officers. The amount of each named executive officer’s target annual incentive award opportunity was determined by our Compensation Committee after consideration ofaccordance with the compensation analysis prepared by Compensia, the previously-announcedarrangement described under “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation Actions and Decisions for 2019 – Chief Executive Officer transition, the recommendations of our Chief Executive Officer (except with respect to his own target annual incentive award opportunity), and the other factors describedTransition (March 2019)” above. The target annual incentive award opportunitiesdeferred stock units will be delivered to Mr. Fuller in shares upon the earlier of our named executive officers were as follows:
|
| | | | | | |
| Name | Target Annual Incentive Award Opportunity ($) |
| Maximum Annual Incentive Award Opportunity ($) |
|
| Serge Matta | $ | 700,000 |
| $ | 1,400,000 |
|
| Gian M. Fulgoni | 375,000 |
| 750,000 |
|
Kenneth J. Tarpey (retired August 28, 2014) | 275,625 |
| 551,250 |
|
| Cameron Meierhoefer | 264,750 |
| 529,500 |
|
| Christiana Lin | 249,750 |
| 499,500 |
|
The amount of each of these annual incentive award opportunities was determined by our Compensation Committee based on a weighted mix of quantitative and qualitative performance factors. Each named executive officer was eligible to receive an award with a value from zero to 200% of his or her target annual incentive award opportunity contingent on our actual performance for the year.
Mr. Wesley’s target annual incentive award opportunity was established by our Compensation Committee at $240,000 (with a maximum annual incentive award opportunity of $480,000) when he joined us as our Chief Financial Officerchange in August 2014.
Weighting of Target Annual Incentive Award Opportunities. The target annual incentive award opportunity for our Chief Executive Officer was weighted entirely on corporate performance objectives, with the target annual incentive award opportunities of our other named executive officers were weighted as follows:
|
| | | |
| Name | Corporate Performance Objective - Revenue | Corporate Performance Objective - Adjusted EBITDA | Individual Performance Objectives |
| Serge Matta | 50% | 50% | N/A |
| Gian M. Fulgoni | 80% | N/A | 20% |
Kenneth J. Tarpey (retired August 28, 2014) | 80% | N/A | 20% |
| Cameron Meierhoefer | 50% | N/A | 50% |
| Christiana Lin | N/A | N/A | 100% |
Corporate Performance Objectives. At the beginningcontrol of the year, our Compensation Committee selected revenue and adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) as the corporate performance measures for the 2014 annual incentive awards. Our Compensation Committee believed these performance measures were appropriate for our business because theycompany or six months following his separation from service.Finally, we entered into a consulting agreement with Mr. Fuller on November 8, 2019, pursuant to which he provided a balance between generating revenue, managing our expenses, and growing our business, which it believes most directly influence long-term stockholder value. For purposes of the annual incentive awards, Adjusted EBITDA was defined to mean earnings before income taxes, amortization of intangible assets, stock-based compensation, costs related to acquisitions, restructuring and other infrequently occurring items, depreciation, interest and other expense.
The threshold, target, and maximum performance levels for these measures were as follows:
|
| | | |
Performance Measure | Threshold Performance | Target Performance | Maximum Performance |
Revenue | $311 million | $322 million | $334 million |
Adjusted EBITDA | $57.5 million | $63.0 million | $70.5 million |
Our Compensation Committee established the performance levels for each of these measures at amounts that it believed to be challenging, but attainable,transition services through the successful execution of our annual operating plan. In addition, each of these performance levels was assigned a payment amount commensurate with the reward that our Compensation Committee,December 31, 2019 in its judgment, believed was reasonable and appropriate for those results. Our Compensation Committee determined that no payment would be made with respect to a performance measure if our actual achievement was less than the threshold level established for that measure. In addition, for actual achievement between the threshold and target, and target and maximum, performance levels, payments were to be calculated for each measure on a linear basis starting from 50% achievement at the threshold.
Individual Performance Objectives. In addition to the corporate performance objectives, the annual incentive awards were also based on each named executive officer’s achievement against his or her individual performance objectives. Individual performance objectives for each named executive officer were established at the beginning of the year in discussions with our Chief Executive Officer. These objectives could be quantitative or qualitative goals, depending on the organizational prioritiesreturn for a given year, and typically focused on key departmental or operational objectives or functions. Mostfee of these objectives were intended to provide a set of common goals that facilitated collaborative management and engagement, although our named executive officers could also be assigned individual goals. $50,000.Chief Commercial Officer Award Modification
In all cases, the individual performance objectives were intended to be challenging, but attainable, and designed to produce annual incentive awards that reflected meaningful performance requirements.
The individual performance objectives for our named executive officers (other than Mr. Matta and Dr. Abraham) were as follows:
| |
▪ | Mr. Fulgoni: assist with the Executive Chairman transition, continue investor relations work, reinforce our message among investors and analysts, and serve as a thought leader in support of our brand-building activities. |
| |
▪ | Mr. Tarpey: improve financial infrastructure and systems, improve management of international entity structure, improve operational efficiencies in the finance and accounting teams; expand sell side analyst coverage of our Company's performance |
| |
▪ | Mr. Wesley: learn comScore organization, products, and processes, review opportunities for improvement in finance organization and drive plans for implementing such improvements, providing strategic and practical oversight over comScore financial activities including structure, compliance, planning, forecasting and expense management, and, establishing leadership tone within the finance organization. |
| |
▪ | Mr. Meierhoefer: re-align our product and operational organizations to improve the effectiveness of these teams, develop and deploy critical technical data collection solutions, and attain critical new product capabilities, and integrate strategic data inputs into our flagship advertising analytics products, as well as launch our international mobile products and continue the development of cross platform solutions. |
| |
▪ | Ms. Lin: successful closure of strategic commercial and corporate deals, successful wind down of significant |
litigation matters, implement process, system, and operational improvements within the legal and human resources teams, and develop and maintain a strategic approach to managing our intellectual property portfolio and privacy-related efforts, and provide strategic advice and counsel to our executive officers as well as our Board of Directors.
2014 Performance Results and Award Decisions. In February2015, our Compensation Committee determined that our actual achievement, and corresponding payment levels, with respect to the corporate performance objectives for 2014 were as follows:
|
| | | |
Performance Measure | Target Performance Level | Actual Performance Level | Performance as a Percentage of Target |
Revenue | $322 million | $329.2 million | 165 % |
Adjusted EBITDA | $63.0 million | $71.37 million | 200 % |
In addition, following his review of the performance of each named executive officer whose target annual incentive award opportunity was based, either in whole or in part, on individual performance objectives, our Chief Executive Officer submitted his recommendation to our Compensation Committee as to the appropriate level of achievement with respect to those objectives. Upon review of these recommendations,December 2019, our Compensation Committee determined that the individual performance objectives of each named executive officer had been attained at the following percentage levels:
|
| |
Name | Individual Performance Objectives Attainment Level |
Serge Matta | N/A |
Gian M. Fulgoni | 100% |
Melvin Wesley | 91% |
Cameron Meierhoefer | 92% |
Christiana Lin | 98% |
(1) Mr. Tarpey’s individual performance objective was not considered because he retired from the Company during 2014.
In February 2015, based on its review of our overall performance in 2014 against the corporate performance objectives and, to the extent applicable, the achievement of individual performance objectives, our Compensation Committee determined that our named executive officers had earned their annual incentive awards at the percentage levels reflected in the following table, which were payable in the form of shares of our common stock as follows:
|
| | | | | | | | | | |
Name (1) | Target Annual Incentive Award Opportunity ($) |
| Actual Annual Incentive Award ($) |
| Actual Annual Incentive Award (number of shares) (2) |
| Actual Annual Incentive Achieved Against Target (%) |
|
| Serge Matta | $ | 700,000 |
| $ | 1,287,775 |
| 29,629 |
| 184 | % |
| Gian M. Fulgoni | 375,000 |
| 571,093 |
| 13,232 |
| 152 | % |
| Melvin Wesley III | 240,000 |
| 383,128 |
| 8,877 |
| 160 | % |
| Cameron Meierhoefer | 265,000 |
| 340,951 |
| 7,900 |
| 127 | % |
| Christiana Lin | 249,500 |
| 249,750 |
| 5,787 |
| 100 | % |
| |
(1) | Mr. Tarpey did not receive an annual incentive award because he retired from the Company during 2014. |
| |
(2) | The number of shares of our common stock received was determined based on the closing price of our common stock reported on the NASDAQ Global Select Market on February 11, 2015, which was$43.16per share.
|
Annual Incentive Compensation for Dr. Abraham. The annual incentive award opportunity of Dr. Abraham is based on the restricted stock unit (“RSU”) awards that were originally granted to him in 2012, while he was serving as Chief Executive Officer. These RSU awards provided him with the opportunity to earn up to 96,666 shares of our common stock for the achievement and an additional 96,666 shares of our common stock for the overachievement of one or more corporate performance objectives established by our Compensation Committee at the beginning of 2014. As described at the beginning of this Compensation Discussion and Analysis, in connection with his assumption of his new role as Executive Chairman of our Board of Directors these awards were modified my our Compensation Committee to provide
Dr. Abraham with the opportunity to earn up to 96,666 shares of our common stock for the achievement and an additional 48,333 shares of our common stock for the overachievement of one or more performance objectives focused on his changed responsibilities and his continued involvement in shaping our product development and strategy activities for the year.
At the beginning of 2014, our Compensation Committee established individual performance objectives for Dr. Abraham, which were weighted as 50% of his target annual incentive award opportunity. These performance objectives involved certain activities related to assisting with the Chief Executive Officer transition and the development and improvement of strategic product initiatives with a focus on cross-platform products. To reinforce its intention that he continue to operate as a vital member of our management team, the remainder of his target annual incentive award opportunity was equally divided between the two corporate performance objectives - revenue and adjusted EBITDA - that were used in connection with the target annual incentive award opportunities of our other named executive officers.
In February 2015, following its determination of our actual achievement with respect to the corporate performance objectives for 2014 and an assessment of Dr. Abraham’s performance against his individual performance objectives (which were determined to have been met in full), our Compensation Committee awarded him 116,648 shares of our common stock.
Long-Term Incentive Compensation. We provide our named executive officers with an annual long-term incentive compensation opportunity also payable entirely in shares of our common stock. As discussed below, these awards are earned, if at all, based entirely on our corporate performance. For 2014, the target long-term incentive awards granted to our named executive officers (other than Dr. Abraham) were as follows:
|
| | | | | | |
| Name and Principal Position | Target Annual Incentive Award Opportunity ($) |
| Maximum Annual Incentive Award Opportunity ($) |
|
| Serge Matta | $ | 700,000 |
| $ | 1,400,000 |
|
| Gian M. Fulgoni | 275,000 |
| 500,000 |
|
Kenneth J. Tarpey (retired August 28, 2014) | 150,000 |
| 300,000 |
|
| Cameron Meierhoefer | 450,000 |
| 900,000 |
|
| Christiana Lin | 450,000 |
| 900,000 |
|
Mr. Wesley’s target long-term incentive award opportunity was established by our Compensation Committee at $450,000 (with a maximum annual incentive award opportunity of $900,000) when he joined us as our Chief Financial Officer in August 2014.
Any shares of our common stock earned pursuant to these awards immediately vested as to one-third of such earned shares upon the date of determination by our Compensation Committee in 2015 as to our actual performance results, and the remaining two-thirds of such earned shares vest in two equal installments on the first and second anniversaries of the date of determination by our Compensation Committee, subject to continued employment through each of the vesting dates.
Corporate Performance Measures and Relative Weightings. At the beginning of the year, our Compensation Committee selected revenue and Adjusted EBITDA as the corporate performance measures for the 2014 long-term incentive awards. Our Compensation Committee believed these performance measures were appropriate for our business because they provided a balance between generating revenue, managing our expenses, and growing our business, which it believes most directly influence long-term stockholder value. The threshold, target, and maximum performance levels for these measures were as follows:
|
| | | |
Performance Measure | Threshold Performance | Target Performance | Maximum Performance |
Revenue | $311 million | $322 million | $334 million |
Adjusted EBITDA | $57.5 million | $63.0 million | $70.5 million |
Our Compensation Committee established the performance levels for each of these measures at amounts that it believed to be challenging, but attainable, through the successful execution of our annual operating plan. In addition, each of these performance levels was assigned a payment amount commensurate with the reward that our Compensation Committee, in its judgment, believed was reasonable and appropriate for those results. Our Compensation Committee determined that no payment would be made with respect to a performance measure if our actual achievement was less than the threshold level established for that measure. In addition, for actual achievement between the threshold and target, and target and maximum, performance levels, payments were to be calculated for each measure on a linear basis starting from 50% achievement at the threshold.
The performance measures were weighted to apply to the long-term incentive award of each named executive officer as follows:
|
| | |
| Name | Corporate Performance Objective - Revenue | Corporate Performance Objective - Adjusted EBITDA |
| Serge Matta | 50% | 50% |
| Gian M. Fulgoni | N/A | 100% |
Kenneth J. Tarpey (retired August 28, 2014) | N/A | 100% |
| Cameron Meierhoefer | N/A | 100% |
| Christiana Lin | N/A | 100% |
Performance Results and Award Decisions. In February2015, our Compensation Committee determined that our actual achievement, and corresponding payment levels, with respect to the corporate performance objectives for 2014 were as follows:
|
| | | |
Performance Measure | Target Performance Level | Actual Performance Level | Performance as a Percentage of Target |
Revenue | $322 million | $329.2 million | 165 % |
Adjusted EBITDA | $63.0 million | $71.37 million | 200 % |
At that time, based on its review of our overall performance in 2014 against the corporate performance objectives, our Compensation Committee determined that our named executive officers had earned their long-term incentive awards at a percentage level and which were payable in the form of shares of our common stock as follows:
|
| | | | | | | | | | |
Name (1) | Target Annual Incentive Award Opportunity ($) |
| Actual Annual Incentive Award ($) |
| Actual Annual Incentive Award (number of shares) (2) |
| Actual Annual Incentive Achieved Against Target (%) |
|
| Serge Matta | $ | 700,000 |
| $ | 1,287,775 |
| 29,629 |
| 184 | % |
| Gian M. Fulgoni | 275,000 |
| 500,000 |
| 11,585 |
| 200 | % |
| Melvin Wesley III | 450,000 |
| 900,000 |
| 20,853 |
| 200 | % |
| Cameron Meierhoefer | 450,000 |
| 900,000 |
| 20,853 |
| 200 | % |
| Christiana Lin | 450,000 |
| 900,000 |
| 20,853 |
| 200 | % |
| |
(1) | Mr. Tarpey did not receive an annual incentive award because he retired from the Company during 2014. |
| |
(2) | The number of shares of our common stock received was determined based on the closing price of our common stock reported on the NASDAQ Global Select Market on February 11,2015, which was$43.16per share.
|
Additional Time-Based Long-Term Incentive Compensation Award. In February 2014, following consultation with Compensia, and a review of competitive market data, our Compensation Committee determined that, to support our retention objectives, it was appropriate to introduce a time-based equity award to our long-term incentive compensation program. The purpose of this award was to ensure that each of our named executive officers has a minimum amount of time-based equity representing between 80% to 100% of his or her annual base salary to be earned over a multi-year period (initially 3 years) subject to continued employment with us. The initial time-based equity award approved for our named executive officers were based on a specific dollar amount and ultimately paid in shares of our common stock as follows:
|
| | |
Name (1) | Long-Term Time-Based Equity Award ($) | Long-Term Time-Based Award (number of shares) (2) |
| Serge Matta | $700,000 | 16,219 |
| Gian M. Fulgoni | N/A | N/A |
Melvin Wesley III(3) | 300,000 | 6,951 |
| Cameron Meierhoefer | 300,000 | 6,951 |
| Christiana Lin | 300,000 | 6,951 |
| |
(1) | Mr. Tarpey did not receive an additional time-based long-term incentive award because he retired from the Company during 2014. |
| |
(2) | The number of shares of our common stock received was determined based on the closing price of our common stock reported on the NASDAQ Global Select Market on February 11,2015, which was$43.16per share. These awards immediately vested as to one-third of such shares upon the date of determination by our Compensation Committee in 2015, and the remaining two-thirds of such shares vest in two equal installments on the firsts and second anniversaries of the date of determination by our Compensation Committee, subject to continued employment through each of the vesting dates.
|
| |
(3) | Mr. Wesley's time-based long-term incentive award was approved by our Compensation Committee when he joined us as our Chief Financial Officer in August, 2014. |
“New Hire” Equity Award for Mr. Wesley. Typically, upon joining us, a new named executive officer will be granted an initial equity award, the value of which will be determined primarily based on competitive conditions applicable to the individual’s specific position as well as the individual’s qualifications in light of these competitive conditions. In addition, in making this award our Compensation Committee will consider the number of shares of our common stock subject to the outstanding equity awards held by our other executive officers in comparable positions. In August 2014, our Compensation Committee granted Mr. Wesley an equity award in the form of a restricted stock unit (“RSU”) award for 10,000 shares of our common stock, to vest in equal annual installment over three years, subject to his continued employment through each of the vesting dates.
Promotion Equity Awards for Mr. Matta. Periodically, our Compensation Committee grants equity awards to our named executive officers in recognition of a promotion and/or an increase in his or her role or responsibilities. In connection with Mr. Matta's promotion to our Chief Executive Officer in February 2014, our Compensation Committee granted him an equity award in the form of an RSU award for 44,459 shares of our common stock, with 50% of the award, or 22,230 shares, to be earned based on the achievement of corporate performance objectives established for 2014, and the remaining 50%, or 22,229 shares, to vest in equal annual installments in February 2015, 2016, and 2017, all subject to his continued employment through each of the vesting dates.
With respect to the performance-based portion of this RSU award, our Compensation Committee selected annual revenue and Adjusted EBITDA as the corporate performance measures, with the related target level for each measure established in an amount equal to the target levels established for his annual incentive award.
Retention Equity Awards for Mr. Meierhoefer and Ms. Lin. In February 2014, Mr. Matta recommended, and our Compensation Committee approved, additional equity awards in the form of an RSU award for 7,500 shares of our common stock to each of Mr. Meierhoefer and Ms. Lin, to recognize the efforts that would be required by these named executive officers to assist Mr. Matta in achieving the 2014 corporate performance objectives set for him. Similar to the promotional equity award granted to Mr. Matta, 50%Wilson in May 2019 no longer provided an appropriate level of this award was performance-based, and 50% ofincentive or retention value, as the stock-price hurdles set forth in the award was time-based, with vestingas performance conditions exceeded our then-current stock price by up to occur over three years, all subject to his or her continued employment through each of the vesting dates.
Special Market-Based Equity Awards1,280%. On November 7, 2014, our Compensation Committee granted a special market-based equity award toAfter considering input from its outside compensation consultant and our Chief Executive Officer, and certainthe Compensation Committee modified Mr. Wilson’s award on December 16, 2019, reducing the range of stock-price hurdles from$21.00-$60.00 to$8.00-$15.00. The revised hurdles, which must be maintained for at least 65 consecutive trading days during the applicable vesting period, equated to roughly 170% to 320% of our other named executive officers. These awards were comprisedstock price on the date of a mix of options to purchase shares of our common stock as well as RSU awards that may be settled for shares of our common stock.modification. The number of shares of our common stock subject to these awards was calculated to represent a specific percentage of the aggregate market capitalization increase thatrevised hurdles have not yet been achieved.Annual Bonuses
In February 2020, our Compensation Committee sought to achieve through the awards. These specialapproved cash bonus awards were designed to provide an additional incentive for ourcertain named executive officers as set forth below:
| | | | | | | | | | | | |
Name | | Target Award | | | Actual Award | | | Actual Award
vs. Target | |
William Livek | | $ | 478,084 | | | $ | 358,563 | | | | 75% | |
Bryan Wiener | | | 65,000 | | | | 48,750 | | | | 75% | |
Gregory Fink | | | 292,500 | | | | 219,375 | | | | 75% | |
Carol DiBattiste | | | 308,000 | | | | 231,000 | | | | 75% | |
Christopher Wilson | | | 450,000 | | | | 337,500 | | | | 75% | |
Sarah Hofstetter | | | 42,000 | | | | 31,500 | | | | 75% | |
These bonuses, which replaced annual incentive compensation opportunities for 2019, were intended to drive sustained enterprise value toward a significantly higher market capitalization through 2017.
To achieve the desired growth, both the stock options and RSU awards provide that they would become exercisable (in the case of the options) and vest (in the case of the RSU awards) only upon thereward our continuing executive officers for their achievement of pre-established stock-price target levels ranging from $48.00 per share to $60.00 per share. The sharesstrategic objectives, including strong cost management, achievement of our common stock subject to these market-based equity awards will be earned in the following proportionspositive adjusted EBITDA1, focus on corporate culture and tone at the following stock-price targets:
|
| | | |
| | Stock-Price Target (per share) (1) | Percentage of Shares Subject to Stock Option That Will Become Exercisable | Percentage of Shares Subject to RSU Award That Will Vest |
| |
| | $48.00 | 66 % | 48 % |
| | $50.00 | 10 % | 10 % |
| | $55.00 | 14 % | 22 % |
| | $60.00 | 10 % | 20 % |
| |
(1) | Each stock-price target will be deemed satisfied when the closing market price of our common stock as reported by the NASDAQ Global Market exceeds the average of the target stock pricefor a consecutive 30-day period prior to November 17, 2017
|
The per share stock-price targetstop, remediation of internal control weaknesses identified in prior years, and enhancement of corporate compliance, security and privacy programs during a time of transition for the company. For Mr. Wiener and Ms. Hofstetter, bonuses were determined by our Compensation Committee using its desired future market capitalization levelspaid at the same level as compared to our “baseline” market capitalization as calculated ascontinuing employees (75% of November 7, 2014. Our baseline market capitalization was calculated usingtarget), with the number of basic shares outstanding multiplied by the 30-day average trading price for our common stock. Our Compensation Committee allocated the vesting percentages for eachtarget award between the various stock-price targets based on its judgment as to the level of effort that would be required to increase the market price of our common stock to the next target level.
Based onreflecting a careful analysis of our Company's historic stock price performance, our Compensation Committee set these stock-price targets to be challenging and attainable only by performance far in excess of our previous annual sales levels. Instead, our Compensation Committee believed that, to achieve these stock-price targets, it would be necessary for us to continue to expand our business relationships with existing and new strategic customers and to enter into strategic alliances with one or more third parties. For example, the lowest stock-price target of $48.00 per share represented a 25% increase in the market value of our common stock as measured by the 30-day average trading price of our common stock as ofproration through the date of the award bearingtermination, in mind that the trading price of our common stock already had increased 161% over the preceding 12 months.
Each stock option was grantedaccordance with
an exercise price of $42.92 per share and each RSUtheir separation agreements. Mr. Livek’s award was
granted with a fair value of $42.92 per share, the closing price of our common stock as reported by the NASDAQ Global Market on November 7, 2014.prorated for his base salary adjustment in 2019.| 1 | We define adjusted EBITDA as net income (loss) plus or minus interest, taxes, depreciation, amortization of intangible assets and finance leases, stock-based compensation expense, charges for matters relating to the prior-year Audit Committee investigation (such as litigation and investigation-related costs, costs associated with tax projects, audits, consulting and other professional fees), other legal proceedings specified in our senior secured convertible notes, settlement of certain litigation, restructuring expense, transaction costs related to the issuance of equity securities,non-cash impairment charges, andnon-cash changes in the fair value of financing derivatives, warrants liability and investments in equity securities. |
OurOther Compensation Committee established the size of our Chief Executive Officer’s special award at a level that would approximate 2% of the market capitalization increase that would be realized by our stockholders at each pre-established stock-price target. In addition, our Compensation Committee established a pool of shares of our common stock for allocation among our other named executive officers in its discretion, based on the recommendations of our Chief Executive Officer. The following table identifies each named executive officer who received a market-based equity award, as well as the number of shares of our common stock subject to the stock options and RSU awards granted to implement these awards:
|
| | |
| Name | Stock Option (number of shares) | Restricted Stock Unit Award (number of shares) |
| Serge Matta | 984,727 | 141,678 |
| Melvin Wesley III | 218,828 | 31,484 |
| Cameron Meierhoefer | 218,828 | 31,484 |
| Christiana Lin | 218,828 | 31,484 |
ElementsBenefits and Perquisites
. We provide the following welfarehealth and healthwelfare benefits to our named executive officers on the same basis as the benefits are provided to all our other U.S. employees:
healthmedical and dental insurance;
short-andshort-term and long-term disability;disability insurance; and
a Section 401(k) plan.plan with a company matching feature.
TheseWe believe these benefits are consistent with those offered by other companies, and specificallyincluding those with those companies with whichwhom we compete for executive talent.
In general, we do not provide significant perquisites or other personal benefits to our executive officers, and thereforwe do not view perquisites and other personal benefits as a significant componentmaterial element of our executive compensation program. Our Compensation Committee has the authority to approve perquisites,We occasionally provide benefits, however, primarily for retention purposes orpurposes; to accommodate specific, and usually temporary, circumstances of executives who do not reside near their work locations.
locations; or to primarily serve a business purpose that may result in ancillary personal benefit to the executive. Moreover, as described above, we have provided for reimbursement of attorneys’ fees in certain cases, including in connection with the negotiation of employment or separation terms.Change of Control and Severance Agreements
Our namedcontinuing executive officers are parties to various agreements that provide for certain payments and benefits to them in the event of a termination of their employment including in connection withor a change in control of our Company.
the company. We believe
that post-employment compensationthese arrangements are
usefulvaluable retention tools that are particularly necessary in an industry, such as ours, where there is frequent market consolidation. We recognize that it is possible that we may be subject to a change in control, and that this possibility could result in a sudden departure or distraction of our key executive officers to the detriment of our business. We believe that these
arrangements help to
encourage and maintain the continued focus and dedication of our
named executive officers to their assigned duties to maximize stockholder value,
withoutnotwithstanding the
distraction that could result from the uncertaintypossibility or occurrence of a
potentialchange in control of the company. We also believe that these arrangements are necessary to attract and retain critical members of management. These arrangements do not contain any tax reimbursement or
actualtax “gross up” provisions for our executive officers.The material terms and conditions of our executive change of control transaction. We also believe these arrangementsand severance agreements are competitive with arrangements offereddiscussed under “Executive Compensation – Payments Upon Termination or Change in Control” below.
Other Compensation Policies
Stock Ownership Guidelines
In 2018, our Compensation Committee recommended, and our Board of Directors adopted, stock ownership guidelines to senior executives at companies with whom we compete for executive talent and are necessary tofurther align the achievementlong-term interests of our business objectivedirectors and executive officers with those of management retention.
In 2015, in connectionour stockholders. Under the guidelines, each director is expected to own shares of Common Stock with a value equal to at least five times the director’s annual cash retainer for service on the Board. For executive officers, the Chief Executive Officer is expected to own shares of Common Stock with a value equal to at least five times his or her annual base salary, and the Chief Financial Officer, transition, the Company entered intoChief Operating Officer and other named executives are expected to own shares of Common Stock with a Transition Agreement with Kenneth Tarpey. Under the termsvalue equal to at least three times their respective annual base salaries. Equity holdings that qualify toward satisfaction of the Transition Agreement, in additionguidelines include shares underlying vested stock
options (less the value of the aggregate exercise price), restricted stock and restricted stock units, and deferred stock units. Awards subject to performance conditions are not counted until such awards are earned. A director or executive officer has five years from the date of becoming subject to the benefits set forthguidelines to achieve compliance and must hold 100% of the net shares acquired upon vesting or exercise of any equity award until he or she has satisfied the guidelines.
Clawback Policy
Our clawback policy provides that (i) if an accounting restatement occurs, the Board will seek to recover (a) any excess incentive-based compensation from an executive officer determined to have committed misconduct resulting in the Changerestatement and (b) any compensation recoverable from the Chief Executive Officer or Chief Financial Officer under Section 304 of Control and Severance Agreement between Executive and Company dated July 20, 2010, Mr. Tarpey received a one-time distributionthe Sarbanes-Oxley Act of shares2002; (ii) the Board will seek to recover any incentive-based compensation or other compensation from an executive officer if the compensation was determined to be based on financial results or operating metrics that were satisfied as a pro-ratedresult of such executive officer’s knowing or intentional fraudulent or illegal conduct; and (iii) the Board will seek to recover from an executive officer any incentive-based compensation it determines was awarded due to an error in the calculation of his 2014 short-term incentivesuch compensation.
Anti-Hedging and the immediately vested performance-based portion of his 2014 long-term incentive pursuant to the Company’s 2014 executive incentive plan. The incentive achievement amounts will be determined based on the Company’s firstPledging Policy
We maintain a robust anti-hedging and second quarter revenue and Adjusted EBITDA results relative to the targets, with the assumption that Mr. Tarpey achieved 100% of any management based objectives for those periods.
Other Compensation Policies
Hedging Transactions. Whilepledging policy, which prohibits our directors, executive officers, had not previously engaged intheir family members and any entities they control from hedging transactions involving Company securities, we have adopted a formal policy that prohibits hedging or similar transactions to ensure that the members of our leadership team (including our named executive officers) and the non-employee members of our Board of Directors bear the full risks of ownership of our common stock.
Pledging Our Securities. While our executive officers had not previously engaged in the pledging of our common stock, we have adopted a formal policy that prohibits the pledging of ourComscore equity securities as collateral for loans to ensure that a foreclosure onloan or purchasing such securities wouldon margin. More specifically, our policy prohibits covered persons from engaging in any type of hedging transaction with respect to Comscore equity securities, including but not trigger inadvertentlimited to short sales, options (other than options pursuant to our incentive compensation plans), puts, calls, collars and other derivative securities, monetization transactions, prepaid variable forward contracts, equity swaps and exchange funds.Insider Trading Policy and Preclearance Requirements
Our insider trading violations.
policy, which covers all directors, officers and employees of the company, prohibits the unauthorized disclosure of any nonpublic information acquired in the course of service with the company and the misuse of material nonpublic information in securities trading. The policy applies to all transactions involving Comscore securities or the securities of other companies as to which material nonpublic information is obtained in the course of service with Comscore. Moreover, the policy covers any arrangements that affect economic exposure to changes in the prices of these securities, including transactions in derivative securities (such as put or call options), hedging transactions and short sales. The policy also prohibits trading or tipping based on material nonpublic information. We maintain quarterly trading blackout periods for all directors, officers and employees, and we require our directors, officers and employees with access to sensitive information to obtain preclearance for any transaction in Comscore securities, even during open trading windows.Compensation Risk Assessment
Our Compensation Committee and management have considered whether our current compensation programs for employees create incentives for excessive or unreasonable risks that could have a material adverse effect on us. Ourthe company. This has included consideration of the Audit Committee investigation findings and the internal control weaknesses identified by management in prior years, as well as our decision to specify maximum payouts for incentive compensation, use multiple performance metrics and measurement periods, require Compensation Committee believesreview and validation of results and payouts, grant stock options to executive officers only during open trading windows (following the public release of quarterly earnings information), implement stock ownership guidelines, and maintain a clawback policy that allows for recovery of executive compensation in the event of an accounting restatement or fraud. We believe that our compensation programs, as currently designed, are consistent with practices for our industry and that the risks arising from our compensation policies and practices
are not reasonably likely to have a material adverse effect on us.
2015 Executivethe company. In structuring future compensation programs and decisions, the Compensation Updates
In early 2015, in responseCommittee will continue to monitor whether our risk management objectives are being met with respect to incentivizing our employees. We will also monitor the announcement by our Company of entry into (i) a long term strategic alliance with Kantar, the data investment management division of WPP plc ("WPP"), establishing a framework for the parties to bring together their products, technology, data assets, research panels and relationships to provide global cross-media audience and campaign measurement capabilities, and (ii) an agreement whereby WPP would acquire a 15-20% equity stake in our Company, our stock price increased by over 20% and has sustained trading at this higher level for a number of months. As a result, in late February and early March 2015, the initial two tranchesimpact of the special market-based awards met the required stock-price thresholdsCOVID-19 pandemic, which did not affect our 2019 compensation decisions but has and could continue to vest (or in the case of options, to become exercisable). This step-change in stock price represents the type of strategic initiatives needed to achieve the sustained increase in stock price and market capitalization neededaffect decisions for our Company to meet the stock-price thresholds set by our Compensation Committee.
future periods.Tax and Accounting Implications of Executive Compensation
Deductibility of Executive Compensation
. We seek to design our executive compensation arrangements to be deductible underGenerally, Section 162(m) of the Internal Revenue Code but such treatmentof 1986, as amended (the “Code”), disallows public companies a tax deduction for federal income tax purposes of remuneration in excess of $1 million paid to certain executive officers. Pursuant to tax law changes effective in 2018, these executive officers include a public company’s chief executive officer, chief financial officer, and each of the three other most highly-compensated executive officers whose compensation is not guaranteed, asrequired to be disclosed to stockholders under the Exchange Act in any taxable year. In making compensation decisions, our Compensation Committee reservesmay consider the rightpotential effects of Section 162(m) on the compensation paid to pay or award our named executive officers compensation that may not be deductible by reason of the application of Section 162(m) if it determines that such payments or awards are in the best interests of our Company and our stockholders.
officers.Accounting for Stock-Based Compensation
. We follow Financial Accounting StandardStandards Board Accounting Standards Codification Topic 718 or (“ASC Topic 718,718”) for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options and restricted stock unit awards, based on the grant date “fair value”fair value of these awards. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that an executive officeraward recipient is required to render service in exchange for the optionaward. In making compensation decisions, our Compensation Committee regularly considers the cost of stock-based compensation awards and any proposed modifications to those awards.
Notwithstanding the foregoing discussion, our Compensation Committee believes that its primary responsibility is to provide a compensation program that is consistent with our compensation philosophy and that supports the achievement of our compensation objectives. Therefore, the Compensation Committee retains authority to grant appropriate compensation items or other award.
awards to our service providers notwithstanding an adverse tax or accounting treatment for that compensation.COMPENSATION COMMITTEE REPORT
OurThe Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statementfiling with ourthe company’s management. Based on our Compensation Committee’sits review of, and the discussions with management with respect to, the Compensation Discussion and Analysis, our compensation committeethe Compensation Committee recommended to our Board of DirectorDirectors that the Compensation Discussion and Analysis be included in this proxy statement for the fiscal year ended December 31, 2014 for filing with the Securities and Exchange Commission.
Compensation Committee
William J. Henderson, Chairman
William Katz
Russell Fradin
The foregoingfiling.COMPENSATION COMMITTEE
Kathleen Love, Chair
John Martin
Brent Rosenthal
This Compensation Committee report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 and shall not otherwise be deemed filed under these acts, except to the extent we specifically incorporate by reference into such filings.
2014Compensation Tables2019 Summary Compensation Table
The following table sets forth summary information concerning compensation for the following persons: (i) all persons serving as our chiefprincipal executive officer during 2014,2019, (ii) all persons serving as our chiefprincipal financial officer during 2014 and2019, (iii) the threenext two most highly compensated executive officers who were serving as of ourDecember 31, 2019 (we had no other executive officers as of December 31, 2019), and (iv) two additional individuals who received compensation during 2014 of at least $100,000 and who wereserved as executive officers onduring 2019 but were not serving as of December 31, 2014.2019. We refer to these personsindividuals as our “named executive officers” elsewhere in this proxy statement.filing. The following table includes all compensation earned by the named executive officers for the respective periods, regardless of whether such amounts were actually paid during the period.
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| Name and Principal Position | Year($) | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) |
Serge Matta President, Chief Executive Officer and Director | 2014 2013 2012 | $466,594 382,512 328,749 | $8,008,208(2) 2,981,384 1,098,484 | $8,547,430(3) ---- ---- | $3,137(4) 3,077 3,557 | $17,025,369 3,366,963 1,430,790 |
Magid M. Abraham, Ph.D. Executive Chairman of the Board of Directors | 2014 2013 2012 | 250,049(5) 500,000 500,008 | 3,044,012(6) 1,563,089(7) 6,673,052(8) | ---- ---- ---- | 214(4) 213 176 | 3,294,275 2,063,302 7,173,236 |
Gian M. Fulgoni Chairman Emeritus and Director | 2014 2013 2012 | 375,079(9) 375,000 375,005 | 1,150,000(10) 2,158,895 1,001,600 | ---- ---- ---- | 367(4) 359 392 | 1,525,446 2,534,254 1,376,997 |
Melvin Wesley III Chief Financial Officer (hired August 29, 2014) | 2014 | 107,897 | 2,374,921(11) | 1,899,427(12) | 846(4) | 4,383,092 |
Cameron Meierhoefer Chief Operating Officer | 2014 2013 2012 | 342,333 315,750 293,749 | 2,491,271(13) 1,411,262 1,025,600 | 1,899,427(12) ---- ---- | 1,950(4) 1,929 1,207 | 4,734,981 1,728,941 1,320,556 |
Christiana Lin Executive Vice President, General Counsel and Chief Privacy Officer | 2014 | 322,833 | 2,476,271(14) | 1,899,427(12) | 2,073(4) | 4,700,604 |
Kenneth J. Tarpey (former Chief Financial Officer, retired August 28, 2014) | 2014 2013 2012 | 247,784 363,125 341,249 | 282,484(15) 1,525,138 849,100 | ---- ---- ---- | 121,788(16) 2,175 3,785 | 652,056 1,890,438 1,194,134 |
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Name and Principal Position | | Year | | Salary ($) | | | Bonus ($) | | | Stock
Awards
($)(1) | | | Option
Awards
($)(2) | | | Non-Equity
Incentive Plan
Compensation
($) | | | All Other
Compensation
($)(3) | | | Total
($) | |
William Livek (4) Chief Executive Officer and Executive Vice Chairman | | 2019 | | | 477,302 | | | | | | | | 358,563 | | | | (5 | ) | | | 1,086,250 | | | | 504,962 | | | | — | | | | 203,846 | | | | 2,630,923 | |
| | 2018 | | | 443,700 | | | | | | | | — | | | | | | | | — | | | | — | | | | 377,145 | | | | 3,595 | | | | 824,440 | |
| | 2017 | | | 443,700 | | | | | | | | 444,000 | | | | | | | | — | | | | — | | | | — | | | | 3,090 | | | | 890,790 | |
Dale Fuller (6) Former Interim Chief Executive Officer | | 2019 | | | 797,829 | | | | (7) | | | | — | | | | | | | | 840,274 | | | | — | | | | — | | | | 64,135 | | | | 1,702,238 | |
Bryan Wiener (8) Former Chief Executive Officer | | 2019 | | | 133,239 | | | | | | | | — | | | | | | | | 1,978,061 | | | | — | | | | — | | | | 596,048 | | | | 2,707,348 | |
| | 2018 | | | 337,656 | | | | | | | | 393,750 | | | | | | | | 5,984,838 | | | | — | | | | 52,500 | | | | 54,507 | | | | 6,823,251 | |
Gregory Fink Chief Financial Officer | | 2019 | | | 390,000 | | | | | | | | 719,375 | | | | (9 | ) | | | — | | | | — | | | | — | | | | 2,281 | | | | 1,111,656 | |
| | 2018 | | | 390,000 | | | | | | | | 100,000 | | | | | | | | 1,650,039 | | | | — | | | | 248,625 | | | | 3,506 | | | | 2,392,170 | |
| | 2017 | | | 95,875 | | | | | | | | 73,125 | | | | | | | | — | | | | — | | | | — | | | | 52 | | | | 169,052 | |
Carol DiBattiste Chief Legal and Compliance Officer | | 2019 | | | 385,000 | | | | | | | | 231,000 | | | | (10 | ) | | | — | | | | — | | | | — | | | | 3,513 | | | | 619,513 | |
| | 2018 | | | 385,000 | | | | | | | | — | | | | | | | | 2,602,909 | | | | — | | | | 261,800 | | | | 3,333 | | | | 3,253,042 | |
| | 2017 | | | 355,590 | | | | | | | | 2,008,000 | | | | | | | | — | | | | — | | | | — | | | | 3,320 | | | | 2,366,910 | |
Christopher Wilson (11) Chief Commercial Officer | | 2019 | | | 264,205 | | | | | | | | 337,500 | | | | (12 | ) | | | 2,191,010 | | | | 730,478 | | | | — | | | | 139,723 | | | | 3,662,916 | |
Sarah Hofstetter (13) Former President | | 2019 | | | 114,205 | | | | | | | | — | | | | | | | | 545,555 | | | | — | | | | — | | | | 586,773 | | | | 1,246,533 | |
| | 2018 | | | 107,386 | | | | | | | | 303,750 | | | | | | | | 2,374,055 | | | | — | | | | — | | | | 52 | | | | 2,785,243 | |
Kathryn Bachmann (14) Former Chief Operating Officer | | 2019 | | | 114,015 | | | | | | | | — | | | | | | | | 150,019 | | | | — | | | | — | | | | 131,861 | | | | 395,895 | |
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| (1) | Amounts reflected in this column represent the aggregate grant date fair value of stock and option awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (FASBFASB ASC Topic 718).718. Assumptions used in the calculation of these amounts are described in Note 115 to the consolidated financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2019. As described below under “Executive Compensation – Compensation Tables – Narrative to 2019 Summary Compensation Table and 2019 Grants of Plan-Based Awards Table – Amendments to Long-Term Incentive Plan Awards,” the amounts reported in this column for Mr. Wiener, Mr. Wilson and Ms. Hofstetter also include incremental fair value related to modifications of restricted stock unit awards in 2019. |
| (2) | Amounts reflected in this column represent the aggregate grant date fair value of stock option awards computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are described in Note 5 to the consolidated financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2019. |
| (3) | Amounts for 2019 include (a) matching contributions by us to the named executive officers’ 401(k) plan accounts, (b) payment of life insurance and accidental death and dismemberment premiums on behalf of the named executive officers, (c) attorneys’ fees of $200,000 for Mr. Livek, $50,000 for Mr. Wiener, $31,257 for Mr. Wilson and $10,000 for Ms. Hofstetter in connection with employment or separation negotiations, (d) immaterial membership dues (less than $400) for Mr. Livek, (e) consulting fees of $50,000 for Mr. Fuller and $10,546 for Mr. Wilson, (f) a stipend of $14,000 for Mr. Fuller for temporary living expenses, (g) severance benefits of $525,000 for Mr. Wiener, $88,636 for Mr. Wilson, $555,950 for Ms. Hofstetter and $116,667 for Ms. Bachmann, and (h) COBRA benefits of $19,422 for Mr. Wiener, $9,146 for Mr. Wilson, $19,422 for Ms. Hofstetter and $14,566 for Ms. Bachmann. |
| (4) | Mr. Livek served as our President until May 30, 2018, as a special advisor from May 30, 2018 until November 4, 2019, and as our Chief Executive Officer starting November 4, 2019. |
| (5) | Amount reflects a cash bonus based on performance in 2019, prorated for Mr. Livek’s base salary adjustment in 2019. |
| (6) | Mr. Fuller served as anon-employee director until March 31, 2019, as our Interim Chief Executive Officer from March 31, 2019 until November 4, 2019, and as a consultant andnon-employee director from November 4, 2019 throughyear-end. |
| (7) | Amount includes $29,647 in director fees earned by Mr. Fuller in 2019 before and after his service as Interim Chief Executive Officer. |
| (8) | Mr. Wiener served as our Chief Executive Officer from May 30, 2018 until March 31, 2019. |
| (9) | Amount reflects (a) a cash bonus of $219,375 based on performance in 2019, and (b) a cash bonus of $500,000 contingent on continued employment through December 15, 2019. |
| (10) | Amount reflects a cash bonus based on performance in 2019. |
| (11) | Mr. Wilson served as our Chief Revenue Officer until December 31, 2018, as a consultant from January 1, 2019 until April 17, 2019, and as our Chief Commercial Officer starting April 17, 2019. |
| (12) | Amount reflects a cash bonus based on performance in 2019. |
| (13) | Ms. Hofstetter served as our President from October 4, 2018 until March 31, 2019. |
| (14) | Ms. Bachmann served as anon-executive employee until April 17, 2019, and as our Chief Operating Officer from April 17, 2019 until May 29, 2019. |
2019 Grants of Plan-Based Awards Table
The following table sets forth information about grants of plan-based awards to our named executive officers during 2019.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Estimated Future Payouts Under Equity
Incentive Plan Awards | | | All Other
Stock
Awards:
Shares of
Stock or
Units
(#) | | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | | | Exercise or
Base Price of
Option
Awards
($/Sh) | | | Grant Date
Fair Value
of Stock and
Option
Awards
($) (12) | |
Name | | Grant Date | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | |
William Livek | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs (1) | | | 11/4/2019 | | | | — | | | | — | | | | — | | | | 175,000 | | | | — | | | | — | | | | 414,750 | |
PSUs (2) | | | 11/4/2019 | | | | 70,805 | | | | — | | | | 425,000 | | | | — | | | | — | | | | — | | | | 671,500 | |
Stock Options (3) | | | 11/7/2019 | | | | — | | | | — | | | | — | | | | — | | | | 300,000 | | | | 3.21 | | | | 504,962 | |
Dale Fuller | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
DSUs (4) | | | 11/4/2019 | | | | — | | | | — | | | | — | | | | 354,546 | | | | — | | | | — | | | | 840,274 | |
Bryan Wiener | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs (5) | | | 3/31/2019 | | | | — | | | | — | | | | — | | | | 24,988 | | | | — | | | | — | | | | 506,007 | |
RSUs (6) | | | 3/31/2019 | | | | — | | | | — | | | | — | | | | 36,347 | | | | — | | | | — | | | | 736,027 | |
PSUs (7) | | | 3/31/2019 | | | | — | | | | 36,347 | | | | 72,694 | | | | — | | | | — | | | | — | | | | 736,027 | |
Gregory Fink | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Carol DiBattiste | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Christopher Wilson | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs (8) | | | 5/22/2019 | | | | — | | | | — | | | | — | | | | 41,254 | | | | — | | | | — | | | | 426,979 | |
PSUs (9) | | | 5/22/2019 | | | | 28,125 | | | | — | | | | 225,000 | | | | — | | | | — | | | | — | | | | 1,764,031 | |
Stock Options (10) | | | 5/22/2019 | | | | — | | | | — | | | | — | | | | — | | | | 150,000 | | | | 10.35 | | | | 730,478 | |
Sarah Hofstetter | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs (6) | | | 3/31/2019 | | | | — | | | | — | | | | — | | | | 18,417 | | | | — | | | | — | | | | 372,944 | |
PSUs (7) | | | 3/31/2019 | | | | — | | | | 8,524 | | | | 17,048 | | | | — | | | | — | | | | — | | | | 172,611 | |
Kathryn Bachmann | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs (11) | | | 2/13/2019 | | | | — | | | | — | | | | — | | | | 6,779 | | | | — | | | | — | | | | 150,019 | |
| (1) | This award is a time-based restricted stock unit award granted under the 2018 Plan that vests as toone-third on each of November 4, 2020, November 4, 2021 and November 4, 2022, subject to the named executive officer’s continued employment or service through such vesting dates. |
| (2) | This award is a performance-based restricted stock unit award granted under the 2018 Plan that includes multiple performance periods and becomes eligible to vest on the last day of each three-month period beginning on November 4, 2019 and ending on November 4, 2029, based on achievement of certain stock price hurdles occurring within the applicable performance period. This award has a threshold payout equal to 16.66% and a maximum payout equal to 100%, in each case as applied to the total number of shares denominated in the award. For purposes of this row, the number of shares denominated in this award is reflected in the “Maximum” column. |
| (3) | This award is a time-based stock option award granted under the 2018 Plan that vests as toone-third on each of November 7, 2020, November 7, 2021 and November 7, 2022, subject to the named executive officer’s continued employment or service through such vesting dates. This award expires on November 7, 2029. |
| (4) | This award reflects deferred stock units, which are fully vested rights to receive shares of our Common Stock at a future date, granted under the 2018 Plan. |
| (5) | This represents a modification of a time-based restricted unit award originally granted on June 5, 2018 under the 2018 Plan. As described below under “Executive Compensation – Compensation Tables – Narrative to 2019 Summary Compensation Table and 2019 Grants of Plan-Based Awards Table – Amendments to Long-Term Incentive Plan Awards,” these time-based restricted stock units were amended on March 31, 2019, resulting in a share-based payment modification under FASB ASC Topic 718. The amount reported in this row for the grant date fair value of this award is the incremental fair value related to the modification. |
| (6) | This represents a modification of a time-based restricted unit award originally granted on September 7, 2018 (for Mr. Wiener) or October 4, 2018 (for Ms. Hofstetter) under the 2018 Plan. As described below under “Executive Compensation – Compensation Tables – Narrative to 2019 Summary Compensation Table and 2019 Grants of Plan-Based Awards Table – Amendments to Long-Term Incentive Plan Awards,” these time-based restricted stock units were amended on March 31, 2019, resulting in a share-based payment modification under FASB ASC Topic 718. The amount reported in this row for the grant date fair value of this award is the incremental fair value related to the modification. |
| (7) | This represents a modification of a performance-based restricted stock unit award originally granted on September 7, 2018 (for Mr. Wiener) or October 4, 2018 (for Ms. Hofstetter) under the 2018 Plan that is eligible to become earned on March 1, 2021 based on achievement of certain revenue and adjusted EBITDA performance goals through the performance period ending December 31, 2020. This award has a threshold payout of 0%, a target payout of 100% and a maximum payout of 200%. This row reflects as “target” the number of shares denominated in the award and as “maximum,” the maximum performance-based restricted stock units that are eligible to become earned. As described below under “Executive Compensation - Compensation Tables – Narrative to 2019 Summary Compensation Table and 2019 Grants of Plan-Based Awards Table – Amendments to Long-Term Incentive Plan Awards,” these performance-based restricted stock units were amended on March 31, 2019, resulting in a share-based payment modification under FASB ASC Topic 718. The amount reported in this row for the grant date fair value of this award is the incremental fair value related to the modification. |
| (8) | This award is a time-based restricted stock unit award granted under the 2018 Plan that vests as toone-third on each of May 30, 2019, March 1, 2020 and March 1, 2021, subject to the named executive officer’s continued employment or service through such vesting dates. |
| (9) | This award is a performance-based restricted stock unit award granted under the 2018 Plan that includes multiple performance periods and becomes eligible to vest on each of the first ten anniversaries of March 1, 2019 and on May 22, 2029, based on achievement of certain stock price hurdles beginning on May 22, 2019 and ending on May 22, 2029. This award, as amended, has a threshold payout equal to 12.50% and a maximum payout equal to 100%, in each case applied to the number of shares denominated in the award. For purposes of this row, the number of shares denominated in this award is reflected in the “Maximum” column. As described below under “Executive Compensation – Compensation Tables – Narrative to 2019 Summary Compensation Table and 2019 Grants of Plan-Based Awards Table – Amendments to Long-Term Incentive Plan Awards,” these performance-based restricted stock units were amended on December 16, 2019, resulting in a share-based payment modification under FASB ASC Topic 718. The amount reported in this row for the grant date fair value of this award also includes $375,781, which is the incremental fair value related to the modification. |
| (10) | This award is a time-based stock option award granted under the 2018 Plan that vests as toone-fourth on each of May 22, 2020, May 22, 2021, May 22, 2022 and May 22, 2023, subject to the named executive officer’s continued employment or service through such vesting dates. This award expires on May 22, 2029. |
| (11) | This award is asign-on restricted stock unit award granted under the 2018 Plan that would have vested as toone-third on each of March 1, 2020, March 1, 2021, and March 1, 2022, subject to the named executive officer’s continued employment or service through such vesting date. In connection with Ms. Bachmann’s resignation, this restricted stock unit award was forfeited. |
| (12) | The amounts shown in this column represent the grant date fair value of equity awards granted to our named executive officers in 2019 computed in accordance with FASB ASC 718, disregarding any potential forfeitures. Additionally, the amounts in this column represent the incremental fair value of the modification on (i) March 31, 2019 relating to each award reported for Bryan Wiener and Sarah Hofstetter and (ii) December 16, 2019 relating to the performance-based restricted stock unit award granted to Chris Wilson in May 2019. With respect to any performance-based restricted stock |
| units included in this column, the amounts are also reflective of the “probable” outcome of vesting determined for accounting purposes. For additional information regarding the assumptions underlying these calculations, please see Note 5 to the consolidated financial statements included in Item 8 of our Annual Report on Form10-K for the fiscal year ended December 31, 2014. |
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(2) | Includes a promotion grant of 44,459 restricted stock units awarded on March 3, 2014, with 22,230 shares to be earned on achievement against 2014 company-level performance objectives, and 22,229 shares to vest in three equal installments in February 2015, 2016 and 2017. Includes a market-based restricted stock unit grant awarded in November 7, 2014, of 141,678 shares to vest upon the achievement of pre-established stock-price targets, using a valuation of $31.82 per share performed under guidance found in Accounting Standards Codification 718. This restricted stock unit grant would vest in four increments with 68,401 shares, 13,686 shares, 31,091 shares and 28,500 shares vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $60.00, respectively; no vesting from this award occurred in 2014. Includes a performance-based annual target incentive with a fair value of $700,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined 2014 revenue, and Adjusted EBITDA milestones. Includes a performance-based long-term target incentive with a fair value of $700,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined 2014 revenue, and Adjusted EBITDA milestones. On February 11, 2015, because we surpassed our pre-established consolidated revenue and Adjusted EBITDA targets, an annual incentive of $1,278,775 was actually awarded. Also on February 11, 2015, because we surpassed our pre-established consolidated revenue and Adjusted EBITDA targets, a performance-based long-term incentive of $1,278,775 was awarded with vesting in three equal installments in February 2015, 2016, and 2017. |
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(3) | Includes a market-based stock option award of the option to purchase 984,727 shares of our common stock with an exercise price of $42.92 per share with a valuation of $8.68 per share using the Black-Scholes option-pricing formula and single option award approach. The fair value of market-based stock options is determined using a Monte Carlo simulation embedded in a lattice model. The Company then amortizes the fair value of awards expected to vest on a ratable straight-line basis over the requisite service periods of2019. For additional information regarding the awards which is generally the period from the grant date to the end of the vesting period. The stock option award would become exercisablereported in four increments with 646,400 shares, 96,651 shares, 141,558 sharesthis table, see “Executive Compensation – Compensation Discussion and 100,118 shares exercisable if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00,Analysis – Executive Compensation Actions and $60.00, respectively; no vesting of this award occurred in 2014.Decisions for 2019” above. |
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(4) | Includes discretionary matching contributions by us to the officer’s 401(k) plan account and payment of life insurance premiums on behalf of the named executive officers. |
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(5) | Includes $234,049 computed in accordance with FASB ASC Topic 718, received in restricted stock units in lieu of cash salary from January 1, 2014 through December 31, 2014 with the remainder paid in cash during 2014 to cover health benefits. |
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(6) | Represents a performance-based restricted stock unit award made pursuant to the provisions of our 2012 Chief Executive Officer Bonus Policy, to vest over three equal annual tranches, based on performance targets established in the beginning of each measurement year. At his request, upon transition to Executive Chairman, 96,666 shares of our common stock originally granted would remain in force subject to the achievement of performance objectives established in 2014. In 2014, performance criteria were approved by our Compensation Committee on February 28, 2014, with a fair value of $3,044,012, computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined revenue, EBITDA, and product related milestones in 2014. On February 11, 2015, because we surpassed our pre-established consolidated revenue and Adjusted EBITDA targets, 100% of these performance-based shares (or 96,666) vested, and an additional 19,982 performance-based restricted stock units vested with a total vest date fair value of $3,673,222 computed in accordance with FASB ASC Topic 718 for over-achievement of pre-established goals. |
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(7) | Represents a performance-based award related to our 2012 Equity Incentive Plan granted on March 29, 2012, in restricted stock pursuant to the provisions of our 2012 Chief Executive Officer Bonus Policy, to vest over three equal annual tranches, based on performance targets established in the beginning of each measurement year. In 2013, performance criteria were approved by our Compensation Committee on April 30, 2013, with a fair value of $1,563,089 computed in accordance with FASB ASC Topic 718, to vest on March 30, 2014 upon achievement of pre-determined revenue and Adjusted EBITDA milestones in 2013. On March 30, 2014, because we surpassed our pre-established consolidated revenue and Adjusted EBITDA targets, 100% of these performance-based shares (or 96,666) vested, and an additional 65,620 performance-based restricted stock units vested with a vest date fair value of $5,160,263 computed in accordance with FASB ASC Topic 718 for over-achievement of pre-established goals. The table does not reflect the shares subject to 2014 performance, for which performance goals have not been established. |
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(8) | Represents a performance-based award related to our 2012 Equity Incentive Plan granted on March 29, 2012, in restricted stock pursuant to the provisions of our 2012 Chief Executive Officer Bonus Policy, with a grant date fair value of $2,103,452 computed in accordance with FASB ASC Topic 718, to vest on March 30, 2013 upon achievement of pre-determined revenue and Adjusted EBITDA milestones in 2012. On March 30, 2013, 100% of these performance-based shares were canceled due to failure to achieve pre-determined milestones during 2012. Also represents a grant to Dr. Abraham of 210,000 shares, awarded on March 29, 2012, made for retention purposes with vesting over a 4-year period in March 2013, 2014, 2015, and 2016 respectively. |
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(9) | Includes $332,079 computed in accordance with FASB ASC Topic 718, received in restricted stock units in lieu of cash salary from January 1, 2014 through December 31, 2014 with the remainder paid in cash during 2014 to cover health benefits. |
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(10) | Includes a performance-based annual target incentive with a fair value of $375,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined 2014 revenue and management based objectives. Includes a performance-based long-term target incentive with a fair value of $275,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined 2014 Adjusted EBITDA milestones. On February 11, 2015, because we surpassed our pre-established consolidated revenue target, an annual incentive of $571,093 was actually awarded. Also on February 11, 2015, because we surpassed our pre-established Adjusted EBITDA target, a performance-based long-term incentive of $500,000 was awarded with vesting in three equal installments in February 2015, 2016, and 2017. |
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(11) | Includes a new hire grant of 10,000 shares of our common stock awarded on August 29, 2014, with vesting in three equal installments in August 2015, 2016 and 2017. Includes a market-based restricted stock unit grant awarded in November 7, 2014, of 31,484 shares to vest upon the achievement of pre-established stock-price targets, using a valuation of $31.82 per share performed under guidance found in Accounting Standards Codification 718. This restricted stock unit grant is earned in four increments with 15,112 shares, 3,148 shares, 6,926 shares and 6,297 shares vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $50.00, respectively; no vesting from this award occurred in 2014. Includes a performance-based annual target incentive with a fair value of $240,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined 2014 revenue and Adjusted EBITDA milestones, as well as management based objectives. Includes a performance-based long-term target incentive with a fair value of $450,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined Adjusted EBITDA milestones. On February 11, 2015, because we surpassed our pre-established consolidated revenue and Adjusted EBITDA targets, an annual incentive of $383,128 was actually awarded. Also on February 11, 2015, because we surpassed our pre-established Adjusted EBITDA target, a performance-based long-term incentive of $900,000 was awarded with vesting in three equal installments in February 2015, 2016, and 2017. |
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(12) | Includes a market-based stock option award of the option to purchase 218,828 shares of our common stock with an exercise price of $42.92 per share with a valuation of $8.68 per share using the Black-Scholes option-pricing formula and single option award approach. The fair value of market-based stock options is determined using a Monte Carlo simulation embedded in a lattice model. The Company then amortizes the fair value of awards expected to vest on a ratable straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period. The stock option award would become exercisable in four increments with 144,426 shares, 21,883 shares, 30,636 shares and 21,883 shares exercisable if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $60.00, respectively; no vesting of this award occurred in 2014. |
| |
(13) | Includes a one- time grant of 15,000 shares of our common stock awarded on May 1, 2014, with 7,500 shares to be earned on achievement against 2014 company-level performance objectives, and 7,500 shares to vest in three equal installments in February 2015, 2016 and 2017. Includes a market-based restricted stock unit grant awarded in November 7, 2014, of 31,484 shares to vest upon the achievement of pre-established stock-price targets, using a valuation of $31.82 per share performed under guidance found in Accounting Standards Codification 718. This restricted stock unit grant is earned in four increments with 15,112 shares, 3,148 shares, 6,926 shares and 6,297 shares vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $50.00, respectively; no vesting from this award occurred in 2014. Includes a performance-based annual target incentive with a fair value of $265,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined 2014 revenue milestones and management based objectives. Includes a performance-based long-term target incentive with a fair value of $450,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined Adjusted EBITDA milestones. On February 11, 2015, because we surpassed our pre-established consolidated revenue, an annual incentive of $340,951 was actually awarded. Also on February 11, 2015, because we surpassed our pre-established Adjusted EBITDA target, a performance-based long-term incentive of $900,000 was awarded with vesting in three equal installments in February 2015, 2016, and 2017. |
| |
(14) | Includes a one- time grant of 15,000 shares of our common stock awarded on May 1, 2014, with 7,500 shares to be earned on achievement against 2014 company-level performance objectives, and 7,500 shares to vest in three equal installments in February 2015, 2016 and 2017. Includes a market-based restricted stock unit grant awarded in November 7, 2014, of 31,484 shares to vest upon the achievement of pre-established stock-price targets, using a valuation of $31.82 per share performed under guidance found in Accounting Standards Codification 718. This restricted stock unit grant is earned in four increments with 15,112 shares, 3,148 shares, 6,926 shares and 6,297 shares vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $50.00, respectively; no vesting from this award occurred in 2014. Includes a performance-based annual target incentive with a fair value of $250,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined management based objectives. Includes a performance-based long-term target incentive with a fair value of $450,000 computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined Adjusted EBITDA milestones. On February 11, 2015, an annual incentive of $249,750 was actually awarded. Also on February 11, 2015, because we surpassed our pre-established Adjusted EBITDA target, a performance-based long-term incentive of $900,000 was awarded with vesting in three equal installments in February 2015, 2016, and 2017. |
| |
(15) | Includes $243,174 computed in accordance with FASB ASC Topic 718 received in restricted stock units vesting immediately upon retirement pursuant to the terms of the Mr. Tarpey's Transition Agreement. Also includes a grant with a fair value of $39,310 representing shares awarded post-departure in connection with Mr. Tarpey's appointment to the Company's advisory board. |
| |
(16) | Includes severance payment of $119,716 pursuant to the terms of the Mr. Tarpey's Transition Agreement. |
Narrative to 2019 Summary Compensation Table and 2019 Grants of Plan-Based Awards Table
Our stockholders approved our equity incentive plan on May 30, 2018. Prior to this date, we were unable to grant equity awards to our named executive officers in 2016, 2017 or 2018. As a result, awards granted to the named executive officers in 2018 represent both equity compensation opportunities lost in prior periods and normalized long-term incentive awards for 2018. For details about equity incentive awards granted to our named executive officers in 2019, see “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation Actions and Decisions for 2019” above.
Amendments to Long-Term Incentive Plan Awards
In connection with Mr. Wiener’s and Ms. Hofstetter’s resignations, the Compensation Committee amended the terms of certain outstanding restricted stock unit and performance-based restricted stock unit awards originally granted in 2018, effective as of March 31, 2019, the effective date of their resignations. On December 16, 2019, the Compensation Committee also amended the terms of the performance-based restricted stock award originally granted to Chris Wilson in May 2019. As a result of these amendments, we revalued these awards as of the applicable amendment dates under FASB ASC Topic 718. The incremental value of these modifications is reflected above in the Summary Compensation Table and the Grants of Plan-Based Awards Table.
Dividend Equivalent Rights
The restricted stock unit awards, performance-based restricted stock unit awards, and deferred stock unit awards granted to our named executive officers in 2018 and 2019 include tandem dividend equivalent rights. These rights provide our named executive officers with the opportunity to be credited with an additional amount of cash that is equal to the amount ofper-share cash dividends, if any, that are paid to our stockholders between the date of grant and the date of settlement (or forfeiture) of the particular award. These credited dividend equivalent amounts are subject to the same terms and conditions (including vesting, payment, and forfeitability) that apply to the underlying shares subject to the award. We did not pay any cash dividends in 2018 or 2019.
Other material terms of the equity awards granted to our named executive officers in 2019 are described in more detail in the notes to the Grants of Plan-Based Awards Table and under “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation Actions and Decisions for 2019” above.
Compensation Mix
The ratio of Mr. Livek’s base salary and bonus in proportion to his total compensation earned for 2019 was 32%, and the average ratio of the salary and bonuses earned by the other named executive officers to their total compensation earned for 2019 was 43%.
These ratios are expected to change in future years that do not involve the same level of transition in our executive team. Please see the Compensation Discussion and Analysis section of this filing for a description of the objectives of our compensation program and our overall compensation philosophy.
2019 Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information concerning grants of plan-based awards to our named executive officers in 2014.
|
| | | | | | | | | | | | |
| | | Approval Date | Estimated Future Payouts Under Equity Incentive Plan Awards (1) | All Other Stock Awards: Number of Shares of Stock (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards($)(2) |
|
| Name | Grant Date | Target ($) | Maximum($) | Target (#) |
| Maximum (#) |
| Serge Matta | 3/3/2014 | 2/28/2014 | — | — | — | — | 22,229(3) | — | — | $699,991 |
|
| | 3/3/2014 | 2/28/2014 | — | — | 22,230(4) |
| — | — | — | — | 700,023 |
|
| | 11/7/2014 | 11/7/2014 | — | — | 141,678(5) |
| — | — | — | — | 4,508,194 |
|
| | 11/7/2014 | 11/7/2014 | — | — | — | — | — | 984,727(6) | $42.92 | 8,547,430 |
|
| | (7) | (7) | $700,000 | $1,400,000 | — | — | — | — | — | 700,000(8) |
|
| | (7) | (7) | $700,000 | $1,400,000 | — | — | — | — | — | 700,000(9) |
|
| | (7) | (7) | $700,000 | — | — | — | — | — | — | 700,000(10) |
|
| Magid M. Abraham, Ph.D | 3/3/2014(11) | 2/28/2014 | — | — | 96,666(12) |
| 144,999(12) | — | — | — | 3,044,012 |
|
| | 3/31/2014 | 2/28/14 | — | — | — | — | 1,785(13) | — | — | 58,530 |
|
| | 6/30/2014 | 2/28/14 | — | — | — | — | 1,649(13) | — | — | 58,507 |
|
| | 9/30/2014 | 2/28/14 | — | — | — | — | 1,607(13) | — | — | 58,511 |
|
| | 12/31/2014 | 2/28/14 | — | — | — | — | 1,260(13) | — | — | 58,502 |
|
| Gian M. Fulgoni | 3/31/2014 | 2/28/14 | — | — | — | — | 2,532(13) | — | — | 83,024 |
|
| | 6/30/2014 | 2/28/14 | — | — | — | — | 2,340(13) | — | — | 83,023 |
|
| | 9/30/2014 | 2/28/14 | — | — | — | — | 2,280(13) | — | — | 83,015 |
|
| | 12/31/2014 | 2/28/14 | — | — | — | — | 1,788(13) | — | — | 83,017 |
|
| | (7) | (7) | $375,000 | $750,000 | — | — | — | — | — | 375,000(14) |
|
| | (7) | (7) | $275,000 | $500,000 | — | — | — | — | — | 275,000(15) |
|
| | (7) | (7) | $500,000 | — | — | — | — | — | — | 500,000(10) |
|
| Melvin Wesley III | 8/29/2014 | 8/1/2014 | — | — | — | — | 10,000(16) | — | — | 383,100 |
|
| | 11/7/2014 | 11/7/2014 | — | — | 31,484(17) |
| — | — | — | — | 1,001,821 |
|
| | 11/7/2014 | 11/7/2014 | — | — | — | — | — | 218,828(18) | $42.92 | 1,899,427 |
|
| | (7) | (7) | $240,000 | $480,000 | — | — | — | — | — | 240,000(19) |
|
| | (7) | (7) | $450,000 | $900,000 | — | — | — | — | — | 450,000(15) |
|
| | (7) | (7) | $300,000 | — | — | — | — | — | — | 300,000(10) |
|
| Cameron Meierhoefer | 5/1/2014 | 4/15/2014 | — | — | — | — | 7,500(3) | — | — | 237,225 |
|
| | 5/1/2014 | 4/15/2014 | — | — | 7,500 | (4) | — | — | — | — | 237,225 |
|
| | 11/7/2014 | 11/7/2014 | — | — | 31,484 | (17) | — | — | — | — | 1,001,821 |
|
| | 11/7/2014 | 11/7/2014 | — | — | — | — | — | 218,828(18) | $42.92 | 1,899,427 |
|
| | (7) | (7) | $265,000 | $530,000 | — | — | — | — | — | 265,000(14) |
|
| | (7) | (7) | $450,000 | $900,000 | — | — | — | — | — | 450,000(15) |
|
| | (7) | (7) | $300,000 | — | — | — | — | — | — | 300,000(10) |
|
| Christiana Lin | 5/1/2014 | 4/15/2014 | — | — | — | — | 7,500(3) | — | — | 237,225 |
|
| | 5/1/2014 | 4/15/2014 | — | — | 7,500(4) |
| — | — | — | — | 237,225 |
|
| | 11/7/2014 | 11/7/2014 | — | — | 31,484(17) |
| — | — | — | — | 1,001,821 |
|
| | 11/7/2014 | 11/7/2014 | — | — | — | — | — | 218,828(18) | $42.92 | 1,899,427 |
|
| | (7) | (7) | $250,000 | $500,000 | — | — | — | — | — | 250,000(14) |
|
| | (7) | (7) | $450,000 | $900,000 | — | — | — | — | — | 450,000(15) |
|
| | (7) | (7) | $300,000 | — | — | — | — | — | — | 300,000(10) |
|
|
| | | | | | | | | | | | |
| | Approval Date | Estimated Future Payouts Under Equity Incentive Plan Awards (1)
| All Other Stock Awards: Number of Shares of Stock
(#)
| All Other Option Awards: Number of Securities Underlying Options
(#)
| Exercise or Base Price of Option Awards
($/Sh)
| Grant Date Fair Value of Stock and Option Awards($)(2)
|
|
Name | Grant Date | Target
($)
| Maximum($) | Target
(#)
|
| Maximum
(#)
|
Kenneth J. Tarpey (retired August 29, 2014)
| 8/15/2014 | 7/22/2014 | — | — | — | — | 6,205(20)
| — | — | 243,174 |
|
| 9/2/2014 | 9/2/2014 | — | — | — | — | 1,000(21)
| — | — | |
| |
(1) | The target and maximum incentive award amounts shown in this column reflect the value of the short- and long-term incentive compensation available to our named executive officers pursuant to our 2014 executive incentive compensation policy. The amounts representing the target awards were pre-established as a percentage of salary. The maximum is the greatest payout which can be made if the pre-established maximum performance level is met or exceeded. The policy also provides that the entire award amount shall be paid in shares of restricted stock valued at the time of grant. Actual awards under our 2014 executive incentive compensation policy were approved on February 11, 2015 and are reflected in the Stock Award column of the Summary Compensation Table above for 2014 in each case for each named executive officer. |
| |
(2) | Amounts represent fair value of awards as calculated in accordance with FASB ASC Topic 718 and as further described in Note 11 to the consolidated financial statements included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2014. |
| |
(3) | One-time restricted stock unit award to vest in three equal installments in February 2015, 2016 and 2017. |
| |
(4) | One-time restricted stock unit award to be earned based on achievement against 2014 company-level performance objectives, with achievement amounts determined in February 2015. |
| |
(5) | Market-based restricted stock unit grant awarded in November 7, 2014, to be earned on achievement of pre-established stock-price targets, using a valuation of $31.82 per share performed under guidance found in Accounting Standards Codification 718. This restricted stock unit grant will be earned in four increments with 68,401 shares, 13,686 shares, 31,091 shares and 28,500 shares, respectively, if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $60.00, respectively; no shares were earned under this award in 2014. |
| |
(6) | Market-based stock option award of the option to purchase 984,727 shares of our common stock with an exercise price of $42.92 per share with a valuation of $8.68 per share using the Black-Scholes option-pricing formula and single option award approach. The fair value of market-based stock options is determined using a Monte Carlo simulation embedded in a lattice model. The Company then amortizes the fair value of awards expected to vest on a ratable straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period. The stock option award would become exercisable in four increments with 646,400 shares, 96,651 shares, 141,558 shares and 100,118 shares exercisable if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $60.00, respectively; no vesting of this award occurred in 2014. |
| |
(7) | On February 28, 2014, our Compensation Committee established our 2014 Executive Compensation Bonus Policy to include target annual incentives, target long-term performance-based incentives, and long-term time-based incentives. These incentives would be awarded in February 2015, after our Compensation Committee determined actual achievement against targets (for the performance-based incentive components), and subject to the named executive officer's continued service on the determination date. |
| |
(8) | Annual incentive award levels pursuant to 2014 Executive Compensation Bonus Policy. 50% of the award amount was based on achievement of pre-determined 2014 revenue target levels and 50% of the award amount was based on achievement against 2014 adjusted EBITDA target levels as discussed in Incentive Compensation. Actual achievement against 2014 revenue targets was 165%, and actual achievement against 2014 Adjusted EBITDA targets was 200%. The determination date for these achievement amounts was February 11, 2015, and 100% of the award was immediately vested.
|
| |
(9) | Long-term performance-based award levels pursuant to 2014 Executive Compensation Bonus Policy. 50% of the award amount was based on achievement against 2014 revenue target levels and 50% of the award amount was based on achievement against 2014 Adjusted EBITDA target levels as discussed in Incentive Compensation. Actual achievement against 2014 revenue targets was 165%, and actual achievement against 2014 Adjusted EBITDA targets was 200%. The determination date for these achievement amounts was February 11, 2015, and 1/3 of the award amount was immediately vested in February 2015 with 1/3 vesting in each of February 2016 and February 2017.
|
| |
(10) | As part of the 2014 Executive Compensation Bonus Policy, our Compensation Committee would grant the named executive officer a time-based long-term incentive award in an amount equal to the amount with a value set forth in the “Target” column. The determination date for these awards was February 11, 2015, and 1/3 of the award amount was immediately vested in February 2015 with 1/3 vesting in each of February 2016 and February 2017. |
| |
(11) | Based on our 2012 Chief Executive Officer Bonus Policy, restricted stock and restricted stock units were awarded to Dr. Abraham, to vest over three equal annual tranches, based on performance targets established in the beginning of each measurement year. The “Grant Date” represents the date on which the Dr. Abraham’s 2014 performance criteria were approved by our Compensation Committee. |
| |
(12) | Performance-based restricted stock unit award made pursuant to the provisions of our 2012 Chief Executive Officer Bonus Policy, to vest over three equal annual tranches, based on performance targets established in the beginning of each measurement year. At his request, upon transition to Executive Chairman, 96,666 shares of our common stock originally granted would remain in force subject to the achievement of performance objectives established in 2014, and 50% of the 96,666 share of our common stock originally granted for the purpose of recognizing overachievement against performance objectives would remain in force. In 2014, performance criteria were approved by our Compensation Committee on February 28, 2014, with a fair value of $3,044,012, computed in accordance with FASB ASC Topic 718, to vest in February 2015 upon achievement of pre-determined revenue, EBITDA, and product related milestones in 2014. On February 11, 2015, because we surpassed our pre-established consolidated revenue and Adjusted EBITDA targets, 100% of these performance-based shares (or 96,666) vested, and an additional 19,982 performance-based restricted stock units vested with a vest date fair value of $3,673,222 computed in accordance with FASB ASC Topic 718 for over-achievement of pre-established goals. |
| |
(13) | Restricted stock units awarded in lieu of cash salary. |
| |
(14) | Annual incentive award levels pursuant to 2014 Executive Compensation Bonus Policy. Award amount was based on achievement against 2014 revenue target levels and individual performance objectives as discussed in Incentive Compensation. The actual achievement against 2014 revenue target was 165%.
|
| |
(15) | Long-term performance-based award levels pursuant to 2014 Executive Compensation Bonus Policy. Award amount was based on achievement against 2014 Adjusted EBITDA target levels as discussed in Incentive Compensation. Actual achievement against 2014 Adjusted EBITDA targets was 200%. 1/3 of the award amount was immediately vested in February 2015 with 1/3 vesting in each of February 2016 and February 2017.
|
| |
(16) | Represents a new hire grant of 10,000 shares of our common stock awarded on August 29, 2014, with vesting in three equal installments in August 2015, 2016 and 2017. |
| |
(17) | Market-based restricted stock unit grant awarded in November 7, 2014, of 31,484 shares to vest upon the achievement of pre-established stock-price targets, using a valuation of $31.82 per share performed under guidance found in Accounting Standards Codification 718. This restricted stock unit grant would vest in four increments with 15,112 shares, 3,148 shares, 6,926 shares and 6,297 68,401 shares, 13,686 shares, 31,091 shares and 28,500 shares vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $60.00, respectively; no shares were earned from this award in 2014. |
| |
(18) | Market-based stock option award of the option to purchase 218,828 shares of our common stock with an exercise price of $42.92 per share with a valuation of $8.68 per share using the Black-Scholes option-pricing formula and single option award approach. The fair value of market-based stock options is determined using a Monte Carlo simulation embedded in a lattice model. The Company then amortizes the fair value of awards expected to vest on a ratable straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period. The stock option award would become exercisable in four increments with 144,426 shares, 21,883 shares, 30,636 shares and 21,883 shares exercisable if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $60.00, respectively; no vesting of this award occurred in 2014. |
| |
(19) | Annual incentive award levels pursuant to 2014 Executive Compensation Bonus Policy. Award amount was based on achievement against 2014 revenue and adjusted EBITDA target levels and management based objectives as discussed in Incentive Compensation. The actual achievement against 2014 revenue target and Adjusted EBITDA were 165% and 200% respectively.
|
| |
(20) | On May 8, 2014, the Company announced Mr. Tarpey's intention to retire and the entry into a Transition Agreement with Mr. Tarpey dated May 5, 2014 (the "Transition Agreement"). Under the terms of the Transition Agreement, Mr. Tarpey received a one-time distribution of shares based on a pro-rated calculation of his 2014 short-term incentive and the immediately vested performance-based portion of his 2014 long-term incentive pursuant to the Company's 2014 executive incentive plan. The incentive achievement amounts were determined based on the Company's first and second quarter revenue and Adjusted EBITDA results relative to the targets, with the assumption that Mr. Tarpey achieved 100% of of any management based objectives for those periods. No overachievement was assumed or allocated. |
| |
(21) | One-time award to vest on the one year anniversary of grant date, for the purpose of providing transition services after Mr. Tarpey's departure. |
Outstanding Equity Awards at Fiscal Year End
The following table shows outstanding equity awards held by the named executive officers as of December 31, 2014.
2019. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Stock Awards | |
Name | | Number of
Securities
Underlying
Unexercised
and
Exercisable
Options
(#) | | | | | | Number of
Securities
Underlying
Unexercised
and
Unexercisable
Options
(#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#) (1) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (2) | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#) (3) | | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($) (2) | |
William Livek | | | 184,000 | | | | (4 | ) | | | — | | | | 25.86 | | | | 12/23/2020 | | | | — | | | | — | | | | — | | | | — | |
| | | 102,350 | | | | (5 | ) | | | — | | | | 11.56 | | | | 11/6/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | — | | | | | | | | 300,000 | | | | 3.21 | | | | 11/7/2029 | | | | — | | | | — | | | | — | | | | — | |
| | | — | | | | | | | | — | | | | — | | | | — | | | | 175,000 | | | | 864,500 | | | | 70,805 | | | | 349,777 | |
Dale Fuller | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Bryan Wiener | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 36,347 | | | | 179,554 | |
Gregory Fink | | | — | | | | | | | | | | | | — | | | | — | | | | 35,762 | | | | 176,664 | | | | 16,502 | | | | 81,520 | |
Carol DiBattiste | | | — | | | | | | | | — | | | | — | | | | — | | | | 53,275 | | | | 263,179 | | | | 16,502 | | | | 81,520 | |
Christopher Wilson | | | — | | | | | | | | 150,000 | | | | 10.35 | | | | 5/22/2029 | | | | — | | | | — | | | | — | | | | — | |
| | | 46,000 | | | | (5 | ) | | | — | | | | 17.55 | | | | 4/4/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | — | | | | | | | | — | | | | — | | | | — | | | | 67,250 | | | | 332,215 | | | | 28,125 | | | | 138,938 | |
Sarah Hofstetter | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,524 | | | | 42,109 | |
Kathryn Bachmann | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
|
| | | | | | | | |
| Option Awards | | Stock Awards |
| | Option Exercise
Price
($)
| Option Expiration
Date
| | Number of Shares of Stock That Have Not Vested
(#)(1)
| Market Value of Shares of Stock That Have Not Vested
($)(1)
| Equity Incentive Plan Awards |
Name | Equity Incentive Plan Awards: Unexercised and Unearned (#) | Unearned Shares That Have Not Vested
(#)
| Market Value of Unearned Shares That Have Not Vested
($)
|
Serge Matta | — | — | — | | 7500(2)
| 348,225 | — | — |
| — | — | — | | 2,268(3)
| 105,303 | — | — |
| — | — | — | | 17,500(4)
| 812,526 | — | — |
| — | — | — | | 4,858(5)
| 225,557 | — | — |
| — | — | — | | 33,334(6)
| 1,547,698 | — | — |
| — | — | — | | 25,110(7)
| 1,165,858 | — | — |
| — | — | — | | 22,229(8)
| 1,032,092 | — | — |
| — | — | — | | 22,230(9)
| 1,032,139 | — | — |
| — | — | — | | — | — | 141,678(10)
| $6,578,110 |
| 984,727(11)
| $42.92 | 11/4/2017 | | — | — | — | — |
| | | | | | | | |
Magid M. Abraham, Ph.D. | — | — | — | | 9,981(12)
| 463,418 | — | — |
| — | — | — | | 70,000(13)
| 3,250,100 | — | — |
| — | — | — | | 145,000(14)
| 6,732,350 | — | — |
| | | | | | | | |
Gian M. Fulgoni | — | — | — | | 17,500(15)
| 812,525 | — | — |
| — | — | — | | 6,695(16)
| 310,849 | — | — |
| — | — | — | | 16,667(17)
| 773,849 | — | — |
| — | — | — | | 6,695(18)
| 310,849 | — | — |
| | | | | | | | |
Melvin Wesley III | — | — | — | | 10,000(19)
| 464,300 | — | — |
| — | — | — | | — | — | 31,484(20)
| $2,221,954 |
| 218,828(21)
| $42.92 | 11/4/2017 | | — | — | — | — |
| | | | | | | | |
Cameron Meierhoefer | — | — | — | | 1,542(22)
| 71,595 | — | — |
| — | — | — | | 17,500(23)
| 812,525 | — | — |
| — | — | — | | 3,807(24)
| 176,759 | — | — |
| — | — | — | | 16,667(25)
| 773,849 | — | — |
| — | — | — | | 12,555(26)
| 582,929 | — | — |
| — | — | — | | 15,000(27)
| 696,450 | — | — |
| — | — | — | | — | — | 31,484(20)
| $2,221,954 |
| 218,828(21)
| $42.92 | 11/4/2017 | | — | — | — | — |
| | | | | | | | |
|
| | | | | | | | |
| Option Awards | | Stock Awards |
| | Option Exercise
Price
($)
| Option Expiration
Date
| | Number of Shares of Stock That Have Not Vested
(#)(1)
| Market Value of Shares of Stock That Have Not Vested
($)(1)
| Equity Incentive Plan Awards |
Name | Equity Incentive Plan Awards: Unexercised and Unearned (#) | Unearned Shares That Have Not Vested
(#)
| Market Value of Unearned Shares That Have Not Vested
($)
|
Christiana Lin | — | — | — | | 1,652(28)
| 76,702 | — | — |
| — | — | — | | 12,500(29)
| 580,376 | — | — |
| — | — | — | | 3,628(30)
| 168,448 | — | — |
| — | — | — | | 16,667(31)
| 773,849 | — | — |
| — | — | — | | 12,555(32)
| 582,929 | — | — |
| — | — | — | | 15,000(33)
| 696,450 | — | — |
| — | — | — | | — | — | 31,484(20)
| $2,221,954 |
| 218,828(21)
| $42.92 | 11/4/2017 | | — | — | — | — |
| | | | | | | | |
Kenneth J. Tarpey (retired August 28, 2014)
| — | — | — | | 1,000(34)
| — | — | $39,310 |
| |
| (1) | Market value of shares of stock that have not vested is computed based on $46.43 per share, which was the closing price of our common stock asThe awards reported on the NASDAQ Global Market on December 31, 2014. For a description ofin this award see the Compensation Discussion and Analysis section titled Annual Incentive Compensation for Dr. Abraham. |
| |
(2) | comScore’s right of repurchase lapses for 7,500 shares annually on February 18, contingent upon Mr. Matta's continued service as of each such date. |
| |
(3) | comScore’s right of repurchase lapses for 2,268 shares annually on March 15, contingent upon Mr. Matta's continued service as of each such date. |
| |
(4) | comScore’s right of repurchase lapses for 8,750 shares annually on March 15, contingent upon Mr. Matta's continued service as of each such date. |
| |
(5) | Restricted stock unit award with 4,858 shares vesting annually on March 15, contingent upon Mr. Matta's continued service as of each such date. |
| |
(6) | Restricted stock unit award with 16,667 shares vesting annually on February 18, contingent upon Mr. Matta's continued service as of each such date. |
| |
(7) | Restricted stock unit award with 12,555 shares vesting annually on February 18, contingent upon Mr. Matta's continued service as of each such date. |
| |
(8) | Restricted stock unit award with 7,335, 7,336 and 7,558 shares vesting annually beginning February 18, 2015, contingent upon Mr. Matta's continued service as of each such date. |
| |
(9) | Restricted stock unit award with 7,335, 7,336 and 7,559 shares vesting annually beginning February 18, 2015, contingent upon Mr. Matta's continued service as of each such date. |
| |
(10) | Restricted stock unit award subject to market based vesting. Award earned in four increments with 68,401 shares, 13,686 shares, 31,091 shares and 28,500 shares vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $50.00, respectively. The award vested with respect to 68,401 shares on March 1, 2015 and 13,686 shares on March 8, 2015. |
| |
(11) | Stock options award subject to market based vesting. Award earned in four increments with 646,400 shares, 96,651 shares, 141,558 shares and 100,118 shares exercisable if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $50.00, respectively. The award became exercisable with respect to 646,400 shares on March 1, 2015 and 96,651 shares on March 8, 2015. |
| |
(12) | comScore’s right of repurchase lapses for 9,981 shares annually on March 15, contingent upon Dr. Abraham’s continued service as of each such date. |
| |
(13) | comScore’s right of repurchase lapses for 70,000 shares annually on March 30, contingent upon Dr. Abraham’s continued service as of each such date. |
| |
(14) | On March 29, 2012, Dr. Abraham was awarded 580,000 shares of our common stock in the form ofcolumn reflect time-based restricted stock and restricted stock units that vest based on achievement of revenue andAdjusted EBITDAA goals during 2012, 2013 and 2014. In 2014, Dr. Abraham becomes eligible to earn up to 96,666 shares for achieving 100% of pre-established revenue and Adjusted EBITDA targets. In 2014, this award was adjusted to reflect Dr. Abraham's change in role to Executive Chairman. As a result, in 2014, Dr. Abraham is eligible to earn up to 96,666 shares for achieving 100% of pre-established revenue, Adjusted EBITDA, and product-specific goals, and an additional 48,333 shares for overachieving against pre-established revenue, Adjusted EBITDA, and product development targets. Any unearned shares from prior years have been canceled. |
| |
(15) | comScore’s right of repurchase lapses for 8,333 shares on March 15, 2015 and 8,334 shares on March 15, 2016, contingent upon Mr. Fulgoni’s continued service as of each such date. |
| |
(16) | comScore’s right of repurchase lapses for 6,695 shares on March 15, 2015 contingent upon Mr. Fulgoni's continued service on such date. |
| |
(17) | Restricted stock unit awards, with 8,333 shares vesting on February 18, 2015 and 8,334 shares vesting on February 18, 2016, contingent upon Mr. Fulgoni’s continued servicewhich vest as of each such dates. |
| |
(18) | Restricted stock unit awards with 3,461 shares vesting on March 15, 2015, contingent upon Mr. Fulgoni's continued service on such date. |
| |
(19) | Restricted stock unit awards with 3,300 shares vesting on each of August 15, 2015 and August 15, 2016 and 3,400 shares vesting August 15, 2017, contingent upon Mr. Wesley's continued service as of each such date. |
| |
(20) | Restricted stock unit awardset forth in the following table, subject to market based vesting. Award earned in four increments with 15,112 shares, 3,148 shares, 6,926 shares and 6,297 sharesthe named executive officer’s continued employment or service through such vesting if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day period exceeds $48.00, $50.00, $55.00, and $50.00, respectively. The award vested with respect to 15,112 shares on March 1, 2015 and 3,148 shares on March 8, 2015.dates: |
| |
(21) | Stock options award subject to market based vesting. Award earned in four increments with 144,426 shares, 21,883 shares, 30,636 shares and 21,883 shares exercisable if the average daily closing price of the Company's common stock on the NASDAQ Global Market during any consecutive thirty-day |
period exceeds $48.00, $50.00, $55.00, and $50.00, respectively. The award became exercisable with respect to 144,426 shares on March 1, 2015 and 21,883 shares on March 8, 2015.
| |
(22) | comScore’s right of repurchase lapses for 1,542 shares on March 15, 2015, contingent upon Mr. Meierhoefer's continued service on such date. |
| |
(23) | comScore’s right of repurchase lapses for 8,750 shares annually on March 15, contingent upon Mr. Meierhoefer's continued service as of each such date. |
| |
(24) | Restricted stock unit awards with 3,807 shares vesting on March 15, 2015, contingent upon Mr. Meierhoefer's continued service on such date. |
| |
(25) | Restricted stock unit awards with 8,333 shares vesting on February 18, 2015 and 8,334 shares vesting on February 18, 2016, contingent upon Mr. Meierhoefer's continued service as of each such date. |
| |
(26) | Restricted stock unit awards with 6,277 shares vesting on February 18, 2015 and 6,278 shares vesting on February 18, 2016, contingent upon Mr. Meierhoefer's continued service as of each such date. |
| |
(27) | Restricted stock unit awards with 4,950 shares vesting on February 18, 2015, 4,950 shares vesting on February 18, 2016, and 5,100 shares vesting on February 18, 2017, contingent upon Mr. Meierhoefer's continued service as of each such date. |
| |
(28) | comScore’s right of repurchase lapses for 1,652 shares on March 15, 2015, contingent upon Ms. Lin's continued service on such date. |
| |
(29) | comScore’s right of repurchase lapses for 6,250 shares annually on March 15, contingent upon Ms. Lin's continued service on such date. |
| |
(30) | Restricted stock unit awards with 3,628 shares vesting on March 15, 2015, contingent upon Ms. Lin's continued service on such date. |
| |
(31) | Restricted stock unit awards with 8,333 shares vesting on February 18, 2015 and 8,334 shares vesting on February 18, 2016, contingent upon Ms. Lin's continued service on such date. |
| |
(32) | Restricted stock unit awards with 6,277 shares vesting on February 18, 2015 and 6,278 shares vesting on February 18, 2016, contingent upon Ms. Lin's continued service on such date. |
| |
(33) | Restricted stock unit awards with 4,950 shares vesting on February 18, 2015, 4,950 shares vesting on February 18, 2016, and 5,100 shares vesting on February 18, 2017, contingent upon Ms. Lin's continued service on such date. |
| |
(34) | Restricted stock units granted following Mr. Tarpey's retirement on August 28, 2014 in connection with appointment to the Company's advisory board. |
Option Exercises and Stock Vested Table
The following table shows the stock options that were exercised and value realized upon exercise, as well as all stock awards that vested and value realized upon vesting, by our named executive officers during the year ended December 31, 2014. Mr. Wesley did not have option exercises or stock vesting occur during 2014.
|
| | | | | | |
Name | Option Awards | Stock Awards |
Number of Shares Acquired on
Exercise (#)
| Value Realized on Exercise
($)(1)
| Number of Shares Acquired on
Vesting
(#)
| Value Realized
on Vesting
($)
|
Serge Matta | — | — | 7,500 |
| 238,950(2)
|
|
| | — | — | 1,858 | Number
| 59,196(2)
|
|
| — | — | 8,750 |
| 278,775(2)
|
|
| — | — | 16,666 |
| 531,312(3)
|
|
| — | — | 31,505(4)
|
| 974,135(5)
|
|
| — | — | 2,268 |
| 70,127(5)
|
|
| — | — | 4,857 |
| 150,178(5)
|
|
| — | — | 5,000 |
| 195,950(6)
|
|
| of RSUs | | | | Remaining Vesting Schedule |
Magid M. Abraham, Ph.D. | — | — | 8,694 |
| 276,991(2)
|
|
| — | — | 96,667 |
| 3,056,611(7)
|
|
| — | — | 65,250 |
| 2,063,205(7)
|
|
| — | — | 9,981 |
| 308,613(5)
|
|
| — | — | 70,000 |
| 2,307,900(8)
|
|
| — | — | 1,785(9)
|
| 58,530(10)
|
|
| — | — | 1,649(9)
|
| 58,507(11)
|
|
| — | — | 1,607(9)
|
| 58,511(12)
|
|
| — | — | 1,260(9)
|
| 58,502(13)
|
|
William Livek | | | | |
Gian M. Fulgoni | — | — | 6,137 |
| 195,525(2)
|
|
| — | — | 8,333 |
| 265,489(2)
|
|
| — | — | 26,256(4)
|
| 837,041(3)
|
|
| — | — | 6,695 |
| 207,009(5)
|
|
| — | — | 8,750 |
| 270,550(5)
|
|
| — | — | 3,460 |
| 106,983(5)
|
|
| — | — | 2,532(9)
|
| 83,024(10)
|
|
| — | — | 2,340(9)
|
| 83,023(11)
|
|
| — | — | 2,280(9)
|
| 83,015(12)
|
|
| — | — | 1,788(9)
|
| 83,017(13)
|
|
| 175,000 | | | | One-third on each of November 4, 2020, November 4, 2021 and November 4, 2022 |
Cameron Meierhoefer | — | — | 3,750 |
| 119,475(2)
|
|
| — | — | 1,839 |
| 58,591(2)
|
|
| — | — | 8,333 |
| 265,489(2)
|
|
| — | — | 13,261(4)
|
| 422,761(3)
|
|
| — | — | 1,542 |
| 47,679(5)
|
|
| — | — | 8,750 |
| 270,550(5)
|
|
| — | — | 3,806 |
| 117,682(5)
|
|
Gregory Fink | | | 16,508 | | | One-half on each of November 15, 2020 and November 15, 2021 |
Christiana Lin | — | — | 5002,752 |
| 15,930(2)
|
One-half on each of May 15, 2020 and May 15, 2021 |
| | | 16,502 | | | One-half on each of March 1, 2020 and March 1, 2021 |
Carol DiBattiste (a) | | | 22,758 | | | One-half on each of January 30, 2020 and January 30, 2021 |
| | | 12,377 | | | 100% on March 1, 2020 |
| | | 1,638 | | | 100% on March 1, 2020 |
| | | 16,502 | | | One-half on each of March 1, 2020 and March 1, 2021 |
Christopher Wilson | | | 4,946 | | | 100% on January 28, 2020 |
| | | 9,165 | | | 100% on January 28, 2020 |
| | | 5,000 | | | 100% on February 15, 2020 |
| | | 27,503 | | | One-half on each of March 1, 2020 and March 1, 2021 |
| | | 20,636 | | | One-half on each of August 15, 2020 and August 15, 2021 |
| | —(a) | —The performance-based restricted stock unit award granted to Ms. DiBattiste in 2018 which included a performance period that ended on December 31, 2019 became vested as to performance with respect to 1,638 shares. These shares remained subject to continued time-based vesting requirements through March 1, 2020 and are accordingly reported as outstanding time-based awards for purposes of this table. The remaining shares subject to the original performance-based restricted stock unit award were forfeited. |
| (2) | 5,000 |
| 159,300(2)
|
|
| — | — | 2,231 |
| 71,080(2)
|
|
| — | — | 8,333 |
| 265,489(2)
|
|
| — | — | 12,775(4)
|
| 407,267(3)
|
|
| — | — | 1,652 |
| 51,080(5)
|
Amounts in these columns reflect the market value of shares or units of stock reported in the preceding column that have not vested, computed based on the closing price of our Common Stock as reported on Nasdaq on December 31, 2019, which was $4.94 per share. |
|
| | | | | | |
| Name | Option Awards | Stock Awards |
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
| | — | — | 6,250 |
| 193,250(5) |
|
| | — | — | 3,628 |
| 112,178(5) |
|
| | 5000 | 173,400 | — |
| — |
|
| | 5000 | 183,950 | — |
| — |
|
| | | | | |
Kenneth J. Tarpey (retired August 28, 2014) | — | — | 5,000 |
| 159,300(2) |
|
| | — | — | 4,147 |
| 132,123(2) |
|
| | — | — | 8,333 |
| 265,489(2) |
|
| | — | — | 16,833(4) |
| 536,636(3) |
|
| | — | — | 2,381 |
| 73,621(5) |
|
| | — | — | 8,750 |
| 270,550(5) |
|
| | — | — | 1,262 |
| 39,021(5) |
|
| | — | — | 6,205 |
| 243,174(6) |
|
| | — | — | 2,381(14) |
| 93,311(6) |
|
| | — | — | 8,750(14) |
| 342,913(6) |
|
| | — | — | 1,262(14) |
| 49,458(6) |
|
| | — | — | 8,333(14) |
| 326,570(6) |
|
| | — | — | 6,277(14) |
| 245,996(6) |
|
| (3) | The awards reported in this column reflect (i) for awards granted during 2018, the target number of performance-based restricted stock units which become eligible to be earned based on achievement of certain revenue and adjusted EBITDA performance goals subject to the named executive officer’s continued employment or service through the end of the applicable performance period and (ii) for awards granted during 2019, the threshold number of performance-based restricted stock unit awards which become eligible to be earned based on achievement of certain stock price hurdles subject to the named executive officer’s continued employment or service through the date of achievement of the applicable stock price hurdle during the applicable performance period. The awards described in clause (i) are reported at target because the performance metrics, while established by assuming certain multiyear growth rates over a three-year period, are measured by reference to final-year (2020) annual performance, for which achievement through December 31, 2019 was not applicable, and because there is no threshold value under these awards. The awards described in clause (ii) are reported at threshold because the threshold level of performance had not been achieved as of December 31, 2019. The following table sets forth the end of the applicable performance period for each award with respect to the number of performance-based restricted stock units reflected in this column: |
| | | | | | |
(1)Name | The value realized on exercise is calculated as | Number of PSUs | | | Performance Period End Date |
William Livek | | | 70,805 | | | November 4, 2029 |
Bryan Wiener (a) | | | 36,347 | | | December 31, 2020 |
Gregory Fink | | | 16,502 | | | December 31, 2020 |
Carol DiBattiste | | | 16,502 | | | December 31, 2020 |
Christopher Wilson | | | 28,125 | | | May 22, 2029 |
Sarah Hofstetter (b) | | | 8,524 | | | December 31, 2020 |
| (a) | As described below under “Executive Compensation – Payments Upon Termination or Change in Control – Wiener Separation Agreement,” in connection with Mr. Wiener’s resignation, the difference between the actual sales priceservice requirement with respect to these performance-based restricted stock units was deemed satisfied and such performance-based restricted stock units remain eligible to be earned subject to achievement of the shares underlyingapplicable performance goals. |
| (b) | As described below under “Executive Compensation – Payment Upon Termination or Change in Control – Hofstetter Separation Agreement,” in connection with Ms. Hofstetter’s resignation, the options exercisedservice requirement with respect to these performance-based restricted stock units was deemed satisfied and such performance-based restricted stock units remain eligible to be earned subject to achievement of the applicable exercise price of those options.performance goals. |
| (4) | Award granted under the Rentrak Corporation 2005 Stock Incentive Plan and assumed by the company on January 29, 2016 in connection with the Rentrak merger. |
(2)(5) | Award granted under the Rentrak Corporation 2011 Stock Incentive Plan and assumed by the company on January 29, 2016 in connection with the Rentrak merger. |
2019 Option Exercises and Stock Vested
The following table sets forth certain information concerning the number of shares our named executive officers acquired and the value they realized upon vesting of stock awards during 2019. Values are shown before payment of any applicable withholding taxes or brokerage commissions. None of our named executive officers exercised options in 2019. The values reported in the table below may not represent the actual amounts received by the executive upon settlement of the awards due to the delayed delivery of shares.
| | | | | | | | |
| | | Stock Awards | |
Name | | Number of
Shares Acquired
on Vesting
(#) | | | Value Realized
on Vesting
($) (1) | |
William Livek | | | 3,334 | | | | 75,882 | |
Dale Fuller (2) | | | 365,936 | | | | 936,406 | |
Bryan Wiener (3) | | | 97,682 | | | | 2,080,559 | |
Gregory Fink | | | 17,881 | | | | 237,417 | |
Carol DiBattiste | | | 32,006 | | | | 696,162 | |
Christopher Wilson | | | 47,147 | | | | 569,237 | |
Sarah Hofstetter (4) | | | 39,464 | | | | 858,499 | |
Kathryn Bachmann | | | — | | | | — | |
| (1) | The value realized on vesting is calculated by multiplying the number of shares vestingof stock or units by the market valueclosing price of the underlying shares on the vesting date. |
| (2) | The value of the awards reported in this row include (a) $840,274 representing 354,546 deferred stock units that were fully vested on the date of grant but do not become payable to Mr. Fuller until a change of control of the company or six months after Mr. Fuller’s separation from service, and (b) $96,132 representing 11,390 restricted stock units that were granted for Mr. Fuller’s service as anon-employee director prior to becoming Interim Chief Executive Officer and that fully vested on June 10, 2019 but did not become payable until Mr. Fuller’s separation from service, which occurred on January 10, 2020, when the value of the award was $31.86$56,950. |
| (3) | The value of the awards reported in this row include (a) $506,007 representing 24,988 restricted stock units that were fully vested on March 31, 2019 but did not become payable to Mr. Wiener until October 2, 2019, when the value of the award was $48,227, (b) $736,027 representing 36,347 restricted stock units that were fully vested on March 31, 2019 but did not become payable to Mr. Wiener until October 15, 2019, when the value of the award was $68,332, and (c) $838,525 representing 36,347 restricted stock units that were fully vested on March 1, 2019 but did not become payable to Mr. Wiener until October 4, 2019, when the value of the award was $74,511. |
| (4) | The value of the awards reported in this row include (a) $372,944 representing 18,417 restricted stock units that were fully vested on March 31, 2019 but did not become payable to Ms. Hofstetter until October 7, 2019, when the value of the award was $40,886, and (b) $485,554 representing 21,047 restricted stock units that were fully vested on March 1, 2019 but did not become payable to Ms. Hofstetter until October 9, 2019, when the value of the award was $45,462. |
2019Non-Qualified Deferred Compensation Table
| | | | | | | | | | | | | | | | | | | | | | |
Name | | Plan Name | | Executive
Contributions
in Last FY
($) | | | Registrant
Contributions
in Last FY
($) | | | Aggregate
Earnings in
Last FY
($) (1) | | | Aggregate
Withdrawals/
Distributions
($) | | | Aggregate
Balance at
Last FYE
($) (2) | |
Dale Fuller | | Deferred Stock Units and Deferred RSUs (3) | | | — | | | | 936,406 | | | | 871,318 | | | | — | | | | 1,807,724 | |
Bryan Wiener | | Deferred RSUs (4) | | | — | | | | — | | | | (309,613) | | | | 50,978 | | | | — | |
| (1) | This column represents the aggregate earnings (or losses) for 2019 for equity awards that vested in one tax year but whose settlement was deferred to a subsequent tax year. The earnings (or loss) amount for these awards represents an estimate of annual earnings with respect to vested but unpaid and deferred shares and is based on the difference in closing price per share at market closeof our Common Stock of (a) in the case of Mr. Fuller, (i) $8.44 as listedof June 10, 2019 (for the 11,390 shares deferred under the 2018 director restricted stock unit award) and $2.37 as of November 4, 2019 (for the 354,546 deferred stock units granted in 2019) and (ii) $4.94 as of December 31, 2019, multiplied by the NASDAQ Global Market on February 18, 2014. |
| |
(3) | The value realized on vesting is calculated by multiplying the number of vested but deferred shares vestingthat were subject to these awards as of December 31, 2019, as described in more detail in Note 2 to this table below, and (b) in the case of Mr. Wiener, (i) $14.43 as of January 1, 2019 and (ii) $2.04 as of October 11, 2019, multiplied by the marketnumber of restricted stock units that were vested but deferred as of October 11, 2019, as described in more detail in Note 4 to this table below. |
| (2) | This column reflects the total value of the underlying365,936 vested but deferred common shares held by Mr. Fuller in 2019. The value is computed based on the vesting date,closing price of our Common Stock as reported on Nasdaq on December 31, 2019, which was $31.88$4.94 per share at market close as listed byshare. These deferred common shares are included in the NASDAQ Global Market on February 19, 2014. |
| |
(4) | Restricted2019 Option Exercises and Stock Vested Table above. The award of 354,546 deferred stock units granted in 2019 has also been included in the Summary Compensation Table for 2019 with immediate vesting. |
| |
(5) | The value realized on vesting is calculated by multiplying the number of shares vesting by the marketa grant date fair value of the underlying shares on the vesting date, which was $30.92 per share at market close as listed by the NASDAQ Global Market on March 14, 2014.$840,274. |
| (3) | |
(6) | The value realizedThese deferred common shares include two separate awards that were vested in 2019 but with a deferred payout following 2019. These common shares do not become payable to Mr. Fuller until the earlier of Mr. Fuller’s separation from service (or with respect to Mr. Fuller’s deferred stock unit award granted on vesting is calculated by multiplying the numberNovember 4, 2019, six months after Mr. Fuller’s separation from service) or a change of shares vesting by the market valuecontrol of the underlying shares on the vesting date, which was $39.19 per share at market close as listed by the NASDAQ Global Market on August 15, 2014.company. |
| (4) | |
(7) | The value realized on vesting is calculated by multiplying the number of shares vesting by the market value of the underlying shares on the vesting date, which was $31.62 per share at market close as listed by the NASDAQ Global Market on February 28, 2014. |
| |
(8) | The value realized on vesting is calculated by multiplying the number of shares vesting by the market value of the underlying shares on the vesting date, which was $32.97 per share at market close as listed by the NASDAQ Global Market on March 29, 2014. |
| |
(9) | RestrictedMr. Wiener’s deferred restricted stock units grantedrepresent an award that vested in 2018 but with immediate vesting awardeda deferred payout following 2018. The common shares underlying the award became payable to Mr. Wiener in lieuconnection with his resignation from the company. The amount reported in this row for Aggregate Withdrawals/Distributions represents the amount realized by Mr. Wiener upon settlement of cash salary.this award on October 11, 2019. |
(10) The value realized on vesting is calculated by multiplying the number of shares vesting by the market value of the underlying shares on the vesting date, which was $32.79 per share at market close as listed by the NASDAQ Global Market on March 31, 2014.
(11) The value realized on vesting is calculated by multiplying the number of shares vesting by the market value of the underlying shares on the vesting date, which was $35.48 per share at market close as listed by the NASDAQ Global Market on June 30, 2014.
(12) The value realized on vesting is calculated by multiplying the number of shares vesting by the market value of the underlying shares on the vesting date, which was $36.41 per share at market close as listed by the NASDAQ Global Market on September 30, 2014.
(13) The value realized on vesting is calculated by multiplying the number of shares vesting by the market value of the underlying shares on the vesting date, which was $46.43 per share at market close as listed by the NASDAQ Global Market on December 31, 2014.
(14) Accelerated vesting of restricted stock units in connection with executive officer's retirement effective August 28, 2014 pursuant to terms of the Transition Agreement between the company and Mr. Tarpey dated May 5, 2014 (the "Transition Agreement").
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Potential Payments Upon Termination
We have entered into or Change in ControlLivek Change of Control and Severance Agreements (each an "Agreement") for certain membersAgreement
Mr. Livek is a party to a change of our management, including each of our current named executive officers,control and the term of these Agreements were amended to includeseverance agreement (the “Livek Agreement”). The Livek Agreement has a three-year initial term with an automatic three-year renewal, unless either party provides written noticerenewals thereafter, and in the event of non-renewal at least sixty days prior toa change of control, will continue in effect through the longer of the date that is 12 months following the effective date of automatic renewal. These agreements supersede any existing severancethe change of control or changethe remainder of the term then in control provisions included in our named executive officer’s respective employment agreements or letter agreements.
Each agreementeffect. The Livek Agreement provides that if prior to a change in control of our Company, we terminate such named executive officer’s employmentMr. Livek without cause,“cause” or such named executive officerMr. Livek resigns from such employment for good reason,“good reason” (each as described below), then, subject to his compliance with certain post-employment covenants heand execution andnon-revocation of a release of claims in favor of the company, Mr. Livek would be eligible to receive the following payments and benefits:
payment of all(i) accrued but unpaid vacation, expense reimbursements, wages and other benefits due under our compensation plans, policies and arrangements;
continuing payments at a rate equal to his annual base salary then in effect, for the duration of a specified severance period (as identified in the table below for each such named executive officer), to be paid periodically in accordance with our normal payroll policies; and
arrangements (the “Accrued Amounts”); (ii) reimbursement of COBRA premiums (or an equivalent cash distribution if histhe severance period exceeds the permitted COBRA participation period) until the earlier of the expiration of the specified severance period or the date that he becomes covered under a similar plan.
The following table identifies the severance period specifiedfor two years; and (iii) two times Mr. Livek’s annual base salary, payable over two years in the Agreements for each named executive officer, except Mr. Tarpey who retired effective August 28, 2014:
|
| |
Name and Principal Position | Severance Period |
Serge Matta | 2 years |
Magid M. Abraham, Ph.D. | 2 years |
Gian M. Fulgoni | 1.5 years |
Melvin Wesley III | 6 months for first 2 years as CFO, then 1.25 years |
Cameron Meierhoefer | 1 year |
Christiana Lin | 1 year |
Change in Control of the Company
Each of the Agreements also provides thataccordance with our normal payroll practices (or if such termination is on or within 12 months afterfollowing a change of control, in control of our Company, the named executive officer’s employment is terminated without cause, or such named executive officer resigns for good reason, then, subject to his compliance with certain post-employment covenants, he would be eligible to receive the following payments and benefits:
payment of all accrued but unpaid vacation, expense reimbursements, wages and other benefits due under our plans, policies and arrangements;
a lump
sum payment (less applicable withholding taxes) equal to a specified change in control multiple (as identified in the chart below for each such named executive officer) multiplied by his annual base salary in effect immediately prior to his termination datesum).Additionally, if (a) Mr. Livek has remained employed or if greater, at the level in effect immediately prior to the change in control; and
reimbursement of COBRA premiums (or an equivalent cash distribution if his severance period exceeds the permitted COBRA participation period) until the earlier of the expiration of a specified severance period (as identified in the table above for each such named executive officer) or the date that such he becomes covered under a similar plan.
The following table identifies the change in control multiple specified in the agreements for each named executive officer:
|
| |
Name and Principal Position | Change of Control Multiple |
Serge Matta | 2x |
Magid M. Abraham, Ph.D. | 2x |
Gian M. Fulgoni | 1.5x |
Melvin Wesley III | 1.25x |
Cameron Meierhoefer | 1x |
Christiana Lin | 1x |
Further, each of the Agreements with Messrs. Matta, Wesley, and Meierhoefer and Ms. Lin provides that if each such named executive officer remains employed by or continuescontinued to provide services to us through the one-yearfirst anniversary of the date of a change of control or (b) we terminate Mr. Livek without cause or Mr. Livek resigns for good reason on or within 12 months following a change of our Company,control, then, in each case and except as otherwise described below under “Livek 2019 Equity Agreements,” all of hisMr. Livek’s outstanding and unvested equity awards held as of the date of a change of control will vest in full.The agreementsUnder the Livek Agreement, “cause” is defined as Mr. Livek’s indictment, plea of nolo contendere or conviction of any felony or any crime involving dishonesty; material breach of duties or a company policy; or commission of any act of dishonesty, embezzlement, theft, fraud or misconduct with Dr. Abrahamrespect to the company, any of which in the good faith and reasonable determination of the Board or the Compensation Committee is materially detrimental to the company, its business or its reputation. “Good reason” is defined as Mr. Fulgoni provideLivek’s termination of employment within 90 days after the expiration of a specified cure period following the occurrence of one or more of the following: (i) a material diminution in his base compensation (unless done for accelerated vesting of all of their then outstanding and unvested equity awards uponour senior-level executives); (ii) a material reduction of his authority or responsibilities or, following a change of control, a change in controlhis reporting position; or (iii) a relocation of our Company. These “single-trigger” acceleration arrangements are consistent with the existing equity awards held by Dr. Abraham and Mr. Fulgoni.
his primary workplace of more than 50 miles.In the event that the payments or benefits under an agreementthe Livek Agreement (i) would (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and (ii) would subject Mr. Livek to an excise tax under Section 4999 of the Code, then, depending on which method produces the largest netafter-tax benefit for Mr. Livek, the payments shall either be: (a) reduced to the level at which no excise tax applies or (b) paid in full, which would subject Mr. Livek to the excise tax.
Livek 2019 Equity Awards
In 2019, Mr. Livek was granted equity awards in the form of stock options, restricted stock units (“RSUs”), and performance-based RSUs (“PRSUs”). Each of these award agreements provides for certain treatment upon a qualifying termination of employment and/or change of control. The award agreements evidencing the grant of options and RSUs to Mr. Livek in 2019 both provide that if we terminate Mr. Livek without “cause” or if Mr. Livek resigns for “good reason” (both terms as defined in the Livek Agreement) within one year following a change of control, the applicable equity award will become fully vested. The award agreement evidencing the grant of PRSUs to Mr. Livek in 2019 provides that (a) if we terminate Mr. Livek without “cause” or if Mr. Livek resigns or terminates employment as a result of death or “disability” (both terms as defined in the Livek Agreement), the PRSUs will become vested based on actual achievement of the stock price hurdle during the period beginning on the most recent vesting date preceding the date of termination and ending on the date of such termination, and (b) if a change of control occurs, the PRSUs will become vested by applying theper-share price paid in connection with the change of control as the stock price hurdle for purposes of determining attainment of performance goals.
Livek 2019 Letter Agreement
In connection with his appointment as Chief Executive Officer, we and Mr. Livek entered into a letter agreement on November 4, 2019 (the “Code”“Livek 2019 Letter Agreement”) pursuant to which Mr. Livek is eligible to receive aone-time bonus of at least $1,000,000 (either individually or as part of a larger pool for executive officers or employees) upon the successful completion of a refinance of all or substantially all of our outstanding senior secured convertible notes, subject to Mr. Livek’s continued employment through such refinance, provided that if we terminate Mr. Livek without “cause” or if Mr. Livek resigns for “good reason” (both terms as defined in the Livek Agreement) within the90-day period preceding the completion of the refinance, Mr. Livek will remain eligible to receive the bonus upon the completion of the refinance. Upon the consummation of a change in control (as defined in the Plan, but provided that the occurrence of clause (b) (relating to a majority change in the incumbent board) or (d) (relating to stockholder approval of a dissolution of the company) of such definition shall not be treated as a change in control for purposes of the Livek 2019 Letter Agreement), Mr. Livek will receive aone-time bonus of $1,000,000, plus an additionalone-time bonus based on specified percentages (ranging from 0.30% to 0.32%) of the gross transaction proceeds (but no more than $4,000,000) resulting from such change in control so long as the change in control results in gross transaction proceeds of at least $500 million. Each bonus payable upon the consummation of a change in control is generally subject to Mr. Livek’s continued employment through such change in control, provided that if we terminate Mr. Livek without cause or if Mr. Livek resigns for good reason within the90-day period preceding the consummation of the change in control, Mr. Livek will remain eligible to receive such bonus upon the consummation of such change in control.
Other NEO Change of Control and Severance Agreements
Each of Messrs. Fink and Wilson and Ms. DiBattiste is a party to a change of control and severance agreement (the “Other NEO Agreements”). The Other NEO Agreements have a three-year initial term with automaticone-year renewals thereafter, and in the event of a change of control will continue in effect through the longer of the date that is 12 months following the effective date of the change of control or the remainder of the term then in effect. The Other NEO Agreements provide that if we terminate the executive without “cause” or the executive resigns for “good reason” (each as described below), then, subject to compliance with certain post-employment covenants and execution andnon-revocation of a release of claims in favor of the company, the executive would be eligible to receive (i) all Accrued Amounts; (ii) reimbursement of COBRA premiums (or an equivalent cash distribution if the severance period exceeds the permitted COBRA participation period) for one year (or 15 months for Mr. Fink); and (iii) the following severance payments, depending on the time of termination or resignation:
| | | | |
| | Time of Termination or Resignation |
Severance Benefit | | Prior to a Change of Control | | On or Within 12 Months Following a
Change of Control |
Cash Severance | | For Ms. DiBattiste and Mr. Wilson: The sum of the executive’s (A) annual base salary and (B) target short-term incentive award, paid over one year in accordance with our normal payroll practices. | | For Ms. DiBattiste and Mr. Wilson: The sum of the executive’s (A) annual base salary and (B) target short-term incentive award, paid 60 days following termination. |
| | |
| | For Mr. Fink: 1.25 times the sum of the executive’s (A) annual base salary and (B) target short-term incentive award, paid over 15 months in accordance with our normal payroll practices. | | For Mr. Fink: 1.25 times the sum of the executive’s (A) annual base salary and (B) target short-term incentive award, paid 60 days following termination. |
| | | | |
| | Time of Termination or Resignation |
Severance Benefit | | Prior to a Change of Control | | On or Within 12 Months Following a
Change of Control |
| Current Year Short-Term Incentive Award | | Pro-rata portion based on actual performance through the end of the applicable year, paid at the time short-term incentive awards are paid to other senior executives. | | Pro-rata portion of the greater of (A) the executive’s target short-term incentive award for the year of termination and (B) the projected full-year short-term incentive award, paid 60 days following termination. |
| | |
| Time-Based Equity Acceleration | | None. | | Full acceleration. |
| | |
| Performance-Based Equity Acceleration | | None. | | Except as otherwise described below under “Executive Compensation – Payments Upon Termination or Change in Control – Wilson 2019 PRSU Award,” acceleration as to the greater of (A) the target number of shares subject to the applicable equity award or (B) if 50% of the performance period has elapsed, the projected number of shares that would have been earned through the end of the performance period. |
Under the Other NEO Agreements, “cause” is defined as the executive’s indictment, plea of nolo contendere or conviction of any felony or any crime involving dishonesty; material breach of duties or a company policy (that is not cured by the executive within 30 days following written notice); or commission of any act of dishonesty, embezzlement, theft, fraud or misconduct with respect to the company, any of which in the good faith and reasonable determination of the Board of Directors or the Compensation Committee is materially detrimental to the company, its business or its reputation. With respect to severance benefits related to short-term incentive awards under the Other NEO Agreements and equity awards granted on or after September 4, 2018, “good reason” is defined as an executive’s termination of employment within 90 days after a specified cure period following the occurrence of one or more of the following: (i) a material diminution in the executive’s base compensation (unless done for all of our senior-level executives); (ii) a relocation of the executive’s primary workplace of over 50 miles; or (iii) with respect to Mr. Fink and Ms. DiBattiste, a material diminution in the executive’s authority or responsibilities. For purposes of all other severance and other benefits (including all equity awards granted prior to September 4, 2018), “good reason” is defined as an executive’s termination of employment within 90 days after a specified cure period following the occurrence of one or more of the following: (i) a material diminution in the executive’s base compensation (unless such diminution applies to all senior-level executives); (ii) a material reduction of the executive’s authority or responsibilities or, following a change of control, a change in the executive’s reporting position; or (iii) a relocation of the executive’s primary workplace of over 50 miles. Termination will not be considered for “good reason” if the compensation is subject to any clawback provisions.
In the event that the payments or benefits under the Other NEO Agreements (i) would constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) would subject the named executive officer to the excise tax imposed by Section 4999 of the Code, eachthen, depending on which method produces the largest netafter-tax benefit for the executive, the payments shall either be: (a) reduced to the level at which no excise tax applies or (b) paid in full, which would subject the individual to the excise tax.
Wilson 2019 PRSU Award
In 2019, Mr. Wilson was granted PRSUs that provide for certain treatment upon a qualifying termination of employment and/or change of control. The award agreement evidencing the grant of PRSUs to Mr. Wilson in 2019 provides that (a) if we terminate Mr. Wilson without “cause” or if Mr. Wilson resigns or terminates employment as a result of death or “disability” (both terms as defined in the Other NEO Agreement), the PRSUs will become vested based on actual achievement of the stock price hurdle during the period beginning on the most recent vesting date preceding the date of termination and ending on the date of such named executive officer would receive such payment as would entitle him to receive the greatest “after-tax” benefit.
The following table estimates the value of any accelerated vesting of any outstanding equity awards that would have been due to each named executive officer (with the exception of Mr. Tarpey who retired effective August 28, 2014) in connection withtermination, and (b) if a change of control
of our Company, assumingoccurs, the PRSUs will become vested by applying theper-share price paid in connection with the change of control
occurredas the stock price hurdle for purposes of determining attainment of performance goals.Fuller Equity Awards
In connection with his service as Interim Chief Executive Officer, Mr. Fuller received a deferred stock unit award (the “DSU Award”) on November 4, 2019. Pursuant to the terms of the DSU Award, the DSU Award was fully vested on the date of grant and will be delivered to Mr. Fuller in shares of Common Stock upon the earlier of a change in control or six months following Mr. Fuller’s separation from service with the company. Additionally, in connection with his service as anon-employee director of the company, Mr. Fuller was granted a restricted stock unit award (the “Fuller Director Award”) on July 2, 2018. Pursuant to the terms of the Fuller Director Award, the restricted stock units fully vested on June 10, 2019 and were scheduled to be delivered to Mr. Fuller in shares of Common Stock upon the earlier of a change of control or a separation from service with the company. In connection with Mr. Fuller’s resignation from our Board on January 10, 2020, shares of Common Stock were delivered to Mr. Fuller in January 2020 in settlement of the Fuller Director Award.
Wiener Separation Agreement
In connection with Mr. Wiener’s resignation, the company and Mr. Wiener entered into a Separation Agreement on March 31, 2019 (the “Wiener Separation Agreement”). Pursuant to the terms of the Wiener Separation Agreement, Mr. Wiener received or will receive: (i) a cash payment of $1,050,000, less applicable taxes and withholdings, half of which was paid in installments over thesix-month period following his termination of employment and the other half of which was paid in a lump sum in March 2020, (ii) a target bonus for 2019 of $65,000, subject to achievement of applicable performance goals, (iii) reimbursement of the cost of continued health coverage under our group health plans pursuant to COBRA for a period of up to 18 months, (iv) reimbursement of $50,000 of legal expenses in connection with negotiating the Wiener Separation Agreement, (v) accelerated vesting of 61,335 outstanding restricted stock units, and (vi) satisfaction of the service requirement with respect to 36,347 outstanding performance-based restricted stock units, which will remain eligible to be earned subject to achievement of the applicable performance goals.
Under the Wiener Separation Agreement, Mr. Wiener agreed to a comprehensive release of claims in favor of the company and its affiliates. Mr. Wiener also reaffirmed his commitment to be bound by restrictive covenants regarding confidential information,non-disparagement,non-competition andnon-solicitation.
Hofstetter Separation Agreement
In connection with Ms. Hofstetter’s resignation, the company and Ms. Hofstetter entered into a Separation Agreement on March 31, 2019 (the “Hofstetter Separation Agreement”). Pursuant to the terms of the Hofstetter Separation Agreement, Ms. Hofstetter received or will receive: (i) a cash payment of $450,000, less applicable taxes and withholdings, which was paid in installments over the12-month period following her termination of employment, (ii) a target bonus for 2019 of $42,000, subject to achievement of applicable performance goals, (iii) reimbursement of the cost of continued health coverage under our group health plans pursuant to COBRA for 12 months, (iv) reimbursement of $10,000 of legal expenses in connection with negotiating the Hofstetter Separation Agreement, (v) an additional cash payment of $218,450, less applicable taxes and withholdings, which was paid in a lump sum in 2019, (vi) accelerated vesting of 18,417 outstanding restricted stock units, and (vii) satisfaction of the service requirement with respect to 8,524 outstanding performance-based restricted stock units, which will remain eligible to be earned subject to achievement of the applicable performance goals.
Under the Hofstetter Separation Agreement, Ms. Hofstetter agreed to a comprehensive release of claims in favor of the company and its affiliates. Ms. Hofstetter also reaffirmed her commitment to be bound by restrictive covenants regarding confidential information,non-disparagement,non-competition andnon-solicitation.
Bachmann Separation Agreement
In connection with Ms. Bachmann’s resignation, the company and Ms. Bachmann entered into a Separation Agreement on May 28, 2019 (the “Bachmann Separation Agreement”). Pursuant to the terms of the Bachmann Separation Agreement, Ms. Bachmann received: (i) a lump sum cash payment of $116,667, less applicable taxes and withholdings, which was paid in 2019, and (ii) payments of the cost of continued health coverage under our group health plans pursuant to COBRA through December 31, 2014.
2019.Under the Bachmann Separation Agreement, Ms. Bachmann agreed to a comprehensive release of claims in favor of the company and its affiliates. Ms. Bachmann also reaffirmed her commitment to be bound by restrictive covenants regarding confidential information,non-competition andnon-solicitation.
Payments Upon Termination of Employment for Departing Named Executive Officers
The following table quantifies the actual payments and benefits that we provided to Messrs. Wiener and Fuller and Ms. Hofstetter and Ms. Bachmann in connection with their termination of employment, pursuant to the terms of their respective agreements.
| | | | | | | | | | | | | | | | | | | | | | | | |
Executive | | Cash Payments
($) | | | | | | COBRA
Benefits
($) (1) | | | Accelerated
Equity
($) | | | | | | Other
Payments
($) (2) | |
Bryan Wiener | | | 1,098,750 | | | | (3 | ) | | | 41,271 | | | | 1,242,034 | | | | (4 | ) | | | 50,000 | |
Dale Fuller | | | — | | | | | | | | — | | | | — | | | | (5 | ) | | | — | |
Sarah Hofstetter | | | 699,950 | | | | (6 | ) | | | 26,705 | | | | 372,944 | | | | (7 | ) | | | 10,000 | |
Kathryn Bachmann | | | 116,667 | | | | (8 | ) | | | 14,566 | | | | — | | | | | | | | — | |
|
| |
Name | Market Value of Accelerated Equity (net of exercise price, if any)(1)
|
Serge Matta | —(2)
|
Magid M. Abraham, Ph.D. | 10,445,868(3)(4)
|
Gian M. Fulgoni | 3,126,643(3)
|
Melvin Wesley III | —(2)
|
Cameron Meierhoefer | —(2)
|
Christiana Lin | —(2)
|
| |
| (1) | BasedRepresents the full amount of COBRA reimbursements payable under the named executive officer’s separation agreement. For purposes of this disclosure, we have assumed that (i) the named executive officer elected continuation healthcare coverage under COBRA for the full severance period and (ii) the reimbursement right has not ceased due to employment of the named executive officer with another employer. For the portion representing COBRA reimbursements payable in 2019, the amount includes the actual amount paid to the named executive officer in 2019. |
| (2) | Represents the amount paid for the named executive officer’s legal expenses in connection with the negotiation of the executive’s separation agreement. |
| (3) | Represents a cash payment of (i) $1,050,000 (half of which was paid in a lump sum in March 2020) and (ii) $48,750 (representing a portion of Mr. Wiener’s annual incentive opportunity for his service through March 31, 2019). |
| (4) | Represents 24,988 of the outstanding and unvested time-based restricted stock units that were granted to Mr. Wiener as part of hissign-on equity award on an assumed fair market valueJune 5, 2018 and 36,347 of the outstanding and unvested time-based restricted stock units that were granted to Mr. Wiener as part of his 2018 long-term incentive equity award on September 7, 2018, each of which vested on March 31, 2019, in connection with Mr. Wiener’s termination of employment, calculated for purposes of this column by multiplying the number of such shares by the closing price per share of our common stock of $46.43,Common Stock on March 31, 2019, which was the closing price of our common$20.25 per share. All other outstanding and unvested time-based restricted stock as reportedunits held by the NASDAQ Global Market on December 31, 2014. |
| |
(2) | EachMr. Wiener were forfeited upon his termination date. Additionally, 36,347 of the agreements with Messrs. Wesley, Mattaperformance-based restricted stock units originally granted to Mr. Wiener on September 7, 2018 remained outstanding following his termination and Meierhoefer and Ms. Lin providescontinue to vest. The table above does not include amounts that if each such named executive officer remains employed by or continueswould be realized from this continued vesting of awards, but rather reflects only the awards that were accelerated. |
| (5) | Mr. Fuller was granted an award of 354,546 deferred stock units on November 4, 2019 that was fully vested on the date of grant but does not become payable to provide services to us throughMr. Fuller until the one-year anniversaryearlier of a change of control of the Company company or six months after Mr. Fuller’s separation from service. Additionally, Mr. Fuller held 11,390 vested stock units that were granted to him in connection with his service as anon-employee director prior to becoming Interim Chief Executive Officer that did not become payable until Mr. Fuller’s separation from service. Although Mr. Fuller’s employment terminated and he was no longer an executive officer of the company on November 4, 2019, these amounts were not yet payable on December 31, 2019 because he was serving as a director and consultant for the company on December 31, 2019. |
| (6) | Represents a cash payment of (i) $450,000 (representing one year of base salary), all(ii) $31,500 (representing a portion of such named executive officer’sMs. Hofstetter’s annual incentive opportunity for her service through March 31, 2019) and (iii) $218,450 (representing the unpaid portion of Ms. Hofstetter’s cashsign-on bonus). |
| (7) | Represents 18,417 of the outstanding and unvested time-based restricted stock units that were granted to Ms. Hofstetter as part of hersign-onequity awards asaward on October 4, 2018 that vested on March 31, 2019, in connection with Ms. Hofstetter’s termination of employment, calculated for purposes of this column by multiplying the number of such shares by the closing price per share of our Common Stock on March 31, 2019 which was $20.25 per share. Additionally, 8,524 of the performance-based restricted stock units originally granted to Ms. Hofstetter on October 4, 2018 remained outstanding following her termination and continue to vest. The table above does not include amounts that would be realized from this continued vesting of awards, but rather reflects only the awards that were accelerated. |
| (8) | Represents a lump sum cash payment of $116,667 (representing four months of base salary). |
Potential Payments Upon Termination or Change of Control for Remaining Named Executive Officers
The following tables show the value of the potential payments that each named executive officer would have received in various scenarios involving a termination of his or her employment or change of control event, assuming a December 31, 2019 triggering date and, where applicable, a price per share for our Common Stock of $4.94 (the closing price of our Common Stock on Nasdaq on December 31, 2019).
William Livek
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Payments Upon Termination | | Voluntary
Termination
($) | | | Termination
by Employee
for Good
Reason
($) | | | | | | Involuntary
Termination
without
Cause
($) | | | | | | Involuntary
Termination
for Cause
($) | | | Double-
Trigger
Change of
Control
Event
($) (1) | | | | |
Severance Payments | | | — | | | | 1,300,000 | | | | | | | | 1,300,000 | | | | | | | | — | | | | 1,300,000 | | | | | |
Transaction Bonus | | | — | | | | 1,000,000 | | | | (2 | ) | | | 1,000,000 | | | | (2 | ) | | | — | | | | 1,000,000 | | | | (3 | ) |
COBRA Benefits (4) | | | — | | | | 38,679 | | | | | | | | 38,679 | | | | | | | | — | | | | 38,679 | | | | | |
Equity Acceleration (5) | | | — | | | | — | | | | | | | | — | | | | | | | | — | | | | 1,383,500 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | | 2,338,679 | | | | | | | | 2,338,679 | | | | | | | | — | | | | 3,722,179 | | | | | |
| (1) | Represents the amount payable if Mr. Livek were terminated without cause or resigned for good reason on or within 12 months after a change of control. |
| (2) | Represents the minimum bonus payable under the Livek 2019 Letter Agreement if we terminate Mr. Livek without cause or if Mr. Livek resigns for good reason, as applicable, within the90-day period preceding the completion of a refinancing transaction described in the Livek 2019 Letter Agreement. |
| (3) | Represents the minimum bonus payable under the Livek 2019 Letter Agreement if we terminate Mr. Livek without cause or if Mr. Livek resigns for good reason within the90-day period preceding the consummation of a change in control. |
| (4) | Represents the amount payable if Mr. Livek elected continuation healthcare coverage under COBRA for the full24-month severance period. |
| (5) | Represents (i) the fair market value of unvested time-based restricted stock unit awards and (ii) the difference between the fair market value of the common shares underlying unvested options and the exercise price of such changeoptions, in each case, the vesting of controlwhich would then become vested in full. |
| |
(3) | Dr. Abraham andhave accelerated if Mr. Fulgoni are parties to Severance and Change of Control Agreements whereby each named executive officer’s outstanding and unvested equity awards become vested in full uponLivek were terminated without cause or resigned for good reason on or within 12 months after a change of control, or if he remained employed by or continued to provide services to the company through theone-year anniversary of the Company. |
| |
(4) | a change of control. The referenced amount includes the accelerationvalue of 145,000 unvestedaccelerated vesting of Mr. Livek’s performance-based restricted stock andunit award granted to him in 2019 is not included in these amounts because the stock price hurdles would not have been achieved assuming a termination or change of control occurring on December 31, 2019. |
Gregory Fink
| | | | | | | | | | | | | | | | | | | | |
Payments Upon Termination | | Voluntary
Termination
($) | | | Termination
by Employee
for Good
Reason
($) | | | Involuntary
Termination
without
Cause
($) | | | Involuntary
Termination
for Cause
($) | | | Double-
Trigger
Change of
Control
Event
($) (1) | |
Severance Payments | | | — | | | | 853,125 | | | | 853,125 | | | | — | | | | 853,125 | |
Short-Term Incentive (2) | | | — | | | | 219,375 | | | | 219,375 | | | | — | | | | 219,375 | |
COBRA Benefits (3) | | | — | | | | 33,599 | | | | 33,599 | | | | — | | | | 33,599 | |
Equity Acceleration (4) | | | — | | | | — | | | | — | | | | — | | | | 258,184 | |
| | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | | 1,106,099 | | | | 1,106,099 | | | | — | | | | 1,364,283 | |
| (1) | Represents the amount payable if Mr. Fink were terminated without cause or resigned for good reason on or within 12 months after a change of control. |
| (2) | Represents apro-rata portion of the applicable short-term incentive amount, which pro rata portion is equal to 100% of such amount assuming the termination occurred on December 31, 2019. |
| (3) | Represents the amount payable if Mr. Fink elected continuation healthcare coverage under COBRA for the full severance period. |
| (4) | Represents the fair market value of (i) unvested time-based restricted stock units held by Dr. Abrahamunit awards and (ii) the target amount of performance-based restricted stock unit awards, the vesting of which would have accelerated if Mr. Fink were terminated without cause or resigned for good reason on or within 12 months after a change of control. |
Carol DiBattiste
| | | | | | | | | | | | | | | | | | | | |
Payments Upon Termination | | Voluntary
Termination
($) | | | Termination
by Employee
for Good
Reason
($) | | | Involuntary
Termination
without Cause
($) | | | Involuntary
Termination
for Cause
($) | | | Double-
Trigger
Change of
Control Event
($) (1) | |
Severance Payments | | | — | | | | 693,000 | | | | 693,000 | | | | — | | | | 693,000 | |
Short-Term Incentive (2) | | | — | | | | 231,000 | | | | 231,000 | | | | — | | | | 231,000 | |
COBRA Benefits (3) | | | — | | | | 7,821 | | | | 7,821 | | | | — | | | | 7,821 | |
Equity Acceleration (4) | | | — | | | | — | | | | — | | | | — | | | | 344,698 | |
| | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | | 931,821 | | | | 931,821 | | | | — | | | | 1,276,519 | |
| (1) | Represents the amount payable if Ms. DiBattiste were terminated without cause or resigned for good reason on or within 12 months after a change of control. |
| (2) | Represents apro-rata portion of the applicable short-term incentive amount, whichpro-rata portion is equal to 100% of such amount assuming the termination occurred on December 31, 2019. |
| (3) | Represents the amount payable if Ms. DiBattiste elected continuation healthcare coverage under COBRA for the full severance period. |
| (4) | Represents the fair market value of (i) unvested time-based restricted stock unit awards, (ii) the target amount of outstanding performance-based restricted stock unit awards, and (iii) the number of shares performance-vested under a performance-based restricted stock unit award whose performance period ended on December 31, 2019 (determined based on actual performance through the end of such performance period), which remained unvested as to time-based vesting requirements as of December 31, 2014. Of2019, the vesting of all of which would have accelerated if Ms. DiBattiste were terminated without cause or resigned for good reason on or within 12 months after a change of control. |
Christopher Wilson
| | | | | | | | | | | | | | | | | | | | |
Payments Upon Termination | | Voluntary
Termination
($) | | | Termination
by Employee
for Good
Reason
($) | | | Involuntary
Termination
without Cause
($) | | | Involuntary
Termination
for Cause
($) | | | Double-
Trigger
Change of
Control Event
($) (1) | |
Severance Payments | | | — | | | | 825,000 | | | | 825,000 | | | | — | | | | 825,000 | |
Short-Term Incentive (2) | | | — | | | | 337,500 | | | | 337,500 | | | | — | | | | 337,500 | |
COBRA Benefits (3) | | | — | | | | 28,561 | | | | 28,561 | | | | — | | | | 28,561 | |
Equity Acceleration (4) | | | — | | | | — | | | | — | | | | — | | | | 332,215 | |
| | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | | 1,191,061 | | | | 1,191,061 | | | | — | | | | 1,523,276 | |
| (1) | Represents the amount payable if Mr. Wilson were terminated without cause or resigned for good reason on or within 12 months after a change of control. |
| (2) | Represents apro-rata portion of the applicable short-term incentive amount, whichpro-rata portion is equal to 100% of such amount 28,352 restricted stock units related to overachievement of pre-established targets were subsequently canceled in 2015 asassuming the components of 2014 performance awards did not satisfytermination occurred on December 31, 2019. |
| (3) | Represents the vesting criteria required to earn such shares. Excluding these shares,amount payable if Mr. Wilson elected continuation healthcare coverage under COBRA for the full severance period. |
| (4) | Represents the fair market value of acceleratingunvested time-based restricted stock unit awards, the outstanding and unvested equity awardsvesting of Dr. Abraham aswhich would have accelerated if Mr. Wilson were terminated without cause or resigned for good reason on or within 12 months after a change of control. The value of accelerated vesting of Mr. Wilson’s performance-based restricted stock unit award granted to him in 2019 is not included in these amounts because the stock price hurdles would not have been achieved assuming a termination or change of control occurring on December 31, 2014 would have been $9,129,484. |
Termination of Employment Not in Connection with a Change in Control
The following table estimates the payments, benefits, and the value of any accelerated vesting of any outstanding equity awards that would have been due to each named executive officer, with the exception of Mr. Tarpey who retired effective August 28, 2014, in the event that his or her employment had been terminated (other2019. The value of accelerated vesting of Mr. Wilson’s unvested options is not included in these amounts because the exercise price of the options was greater than in connection with a change in control of comScore) without cause or if such executive officer resigns with good reason, assuming the termination of employment occurred on December 31, 2014.
|
| | | | | | | | | |
| | Cash Payments | Market Value of Accelerated Equity (net of exercise price, if any)(3) |
| Name | Salary(1) | COBRA/ Insurance(2) |
| Serge Matta | $ | 950,000 |
| $ | 42,804 |
| $ | — |
|
| Magid M. Abraham, Ph.D. | 500,000 |
| 42,804 |
| 10,445,868(4)(5) |
| Gian M. Fulgoni | 562,500 |
| 21,012 |
| 3,126,643(4) |
| Melvin Wesley III | 160,000 |
| 6,555 |
| — |
|
| Cameron Meierhoefer | 353,000 |
| 21,402 |
| — |
|
| Christiana Lin | 333,000 |
| 21,139 |
| — |
|
| |
(1) | Salary to be paid at a rate equal to such named executive officer’s annual base salary then in effect, for the duration of a specified severance period, to be paid periodically in accordance with our normal payroll policies. |
| |
(2) | COBRA/Insurance payments are estimated based on the number of months of coverage for which we are contractually obligated and the current estimated premium costs. |
| |
(3) | Based on an assumed fair market value per share of our common stock of $46.43, which was the closing price of our common stock as reported by the NASDAQ Global MarketCommon Stock on December 31, 2014.2019. |
| |
(4) | Dr. Abraham and Mr. Fulgoni are parties to Severance and Change of Control Agreements whereby each named executive officer’s outstanding and unvested equity awards become vested in full upon a termination of employment without cause orPay Ratio Disclosure As required by the named executive officer for good reason. |
(5) The referenced amount includes the
accelerationDodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of
145,000 unvested performance-based restricted stockRegulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and
restricted stock units held by Dr. Abrahamthe annual total compensation of Mr. Livek, our Chief Executive Officer as of December 31,
2014. Of2019.For 2019, the ratio of the annual total compensation of Mr. Livek, our Chief Executive Officer (“CEO Compensation”), to the median of the annual total compensation of all of our employees other than our Chief Executive Officer (“Median Annual Compensation”) was 35 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K, using the data and assumptions summarized below. In this summary, we refer to the employee who received such amount, 28,352 restricted stock units related to overachievement of pre-established targets were subsequently canceled in 2015Median Annual Compensation as the components“Median Employee.” For purposes of 2014 performance awards did not satisfythis disclosure, the vesting criteria requireddate used to earn such shares. Excluding these shares,identify the market valueMedian Employee was December 31, 2019 (the “Determination Date”).
CEO Compensation for purposes of accelerating the outstanding and unvestedthis disclosure represents annualized compensation for Mr. Livek for 2019, which (following annualization) was $2,932,558. This amount includes Mr. Livek’ssign-on equity awards based on the full grant-date fair value, calculated in accordance with ASC Topic 718. Additionally, because Mr. Livek was not employed as Chief Executive Officer for the entirety of Dr. Abraham2019, we annualized the applicable compensation that he received for his service as Chief Executive Officer in 2019, and we excluded the compensation that he received for service as a special advisor prior to becoming our Chief Executive Officer. Therefore, the CEO Compensation amount provided above for purposes of our pay ratio calculation differs from the total compensation amount reflected within the 2019 Summary Compensation Table. The table below reflects the amounts shown within the 2019 Summary Compensation Table as well as the annualized value (excluding special advisor compensation), if any, that was used solely for the pay ratio calculation:
| | | | | | | | |
| | | Amount in 2019
Compensation Table
($) | | | Annualized
Amount
($) | |
Base Salary | | | 477,302 | | | | 650,000 | |
Bonus | | | 358,563 | | | | 487,500 | |
Stock Awards | | | 1,086,250 | | | | 1,086,250 | |
Option Award | | | 504,962 | | | | 504,962 | |
All Other Compensation | | | 203,846 | | | | 203,846 | |
Total | | | 2,630,923 | | | | 2,932,558 | |
For purposes of this disclosure, Median Annual Compensation was $84,985 and was calculated by totaling for our Median Employee all applicable elements of compensation for 2019 in accordance with Item 402(c)(2)(x) ofRegulation S-K.
To identify the Median Employee, we first determined our employee population as of December 31, 2014 would have been $9,129,484.
Terminationthe Determination Date. We had 1317 employees, representing all full-time, part-time, seasonal and temporary employees of Employment in Connection with a Change in Control
The following table estimates the payments, benefits,company and our consolidated subsidiaries as of the valueDetermination Date. As permitted by Item 402(u)(3) ofRegulation S-K, this number does not include any accelerated vesting of any outstandingindependent contractors or “leased” workers. We then measured compensation for the period beginning on January 1, 2019 and unvested equity awards that would have been due to each named executive officer, with the exception of Mr. Tarpey who retired effective August 28, 2014, in the event that his or her employment had been terminated in connection with or within 12 months of a change in control of comScore without cause or if such executive officer resigns with good reason, assuming the termination of employment occurredending on December 31, 2014.
|
| | | | | | | |
| | Cash Payments | Market Value of Accelerated Equity(net of exercise price, if any)(3) |
| Name | Salary(1) | COBRA/ Insurance(2) |
| Serge Matta | $ | 950,000 |
| $ | 42,804 |
| 6,269,396(4)(5) |
| Magid M. Abraham, Ph.D. | 500,000 |
| 42,804 |
| 10,445,868(6)(7) |
| Gian M. Fulgoni | 562,500 |
| 21,012 |
| 3,126,643(6) |
| Melvin Wesley III | 400,000 |
| 16,387 |
| 464,300(4) |
| Cameron Meierhoefer | 353,000 |
| 21,402 |
| 3,114,107(4) |
| Christiana Lin | 333,000 |
| 21,139 |
| 2,878,753(4) |
| |
(1) | Gross amount of lump sum payment (prior to payment of applicable withhold taxes). |
| |
(2) | COBRA/Insurance payments are estimated based on the number of months of coverage for which we are contractually obligated and the current estimated premium costs. |
| |
(3) | Based on an assumed fair market value per share of our common stock of $46.43, which was the closing price of our common stock as reported by the NASDAQ Global Market on December 31, 2014. |
| |
(4) | Each of the agreements with Messrs. Matta, Wesley and Meierhoefer and Ms. Lin provides that if each such named executive officer remains employed by or continues to provide services to us through the one-year anniversary of a change in control of comScore, all of such named executive officer’s outstanding and unvested equity awards become vested in full. |
(5) Assuming2019 for these employees usingyear-to-date Box 1Form W-2 earnings (or, outside of the United States, a change of control to occur on December 31, 2014 with a fair market value of $46.43, nocomparable local equivalent) as reflected in our U.S. and local payroll records for 2019. A portion of our employee workforce (full-time and part-time) worked for less than the Special Market-Based Equity Awards would accelerate. In March, 2015, twofull fiscal year due to commencing employment after the beginning of the four tranches offiscal year. In determining the restricted stock unit portion ofMedian Employee, we annualized the Special Market-Based Equity Awards vested and two of the four tranches of the options became exercisable, with 59,591 restricted stock units and 241,676 options remain unvested.compensation for such individuals.
| |
(6) | Dr. Abraham and Mr. Fulgoni are parties to Severance and Change of Control Agreements whereby each named executive officer’s outstanding and unvested equity awards become vested in full upon a change in control of comScore. |
| |
(7) | The referenced amount includes the acceleration of 145,000 unvested performance-based restricted stock and restricted stock units held by Dr. Abraham as of December 31, 2014. Of such amount, 28,352 restricted stock units related to overachievement of pre-established targets were subsequently canceled in 2015 as the components of 2014 performance awards did not satisfy the vesting criteria required to earn such shares. Excluding these shares, the market value of accelerating the outstanding and unvested equity awards of Dr. Abraham as of December 31, 2014 would have been $9,129,484. |
Chief Financial Officer Departure
Mr. Tarpey retired as Chief Financial Officer effective August 28, 2014. On May 8, 2014, the Company announced Mr. Tarpey's intention to retire and the entry into a Transition Agreement with Mr. Tarpey dated May 5, 2014 (the "Transition Agreement"). Under the terms of the Transition Agreement, Mr. Tarpey agreed to assist with transitioning the position and duties of the chief financial officer. He continued to receive his salary, other employee benefits and vesting of his equity awards at the same levels and eligibility as immediately prior to the Transition Agreement until his retirement date. Pursuant to the Transition Agreement, Mr. Tarpey received a one-time distribution of shares based on a pro-rated calculation of his 2014 short-term incentive and the immediately vested performance-based portion of his 2014 long-term incentive pursuant to the Company's 2014 executive incentive plan. The incentive achievement amounts were determined based on the Company's first and second quarter revenue and Adjusted EBITDA results relative to the targets, with the assumption that Mr. Tarpey achieved 100% of of any management based objectives for those periods. No overachievement was assumed or allocated. In addition, vesting of 27,003 shares of restricted stock and restricted stock units previously granted to Mr. Tarpey were accelerated pursuant to the terms of the initial grants and the Company's 2007 Equity Incentive Plan.
For a further discussion of the agreements pursuant to which our named executive officers are entitled to payments upon a termination or change of control, see the section titled “Compensation Discussion and Analysis — Severance and Change of Control Arrangements.”
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies and Procedures for Transactions with Related Persons
Related personPartiesVarious Comscore policies and procedures, including our Code of Business Conduct and Ethics and annual questionnaires completed by all of our directors and executive officers, require disclosure of transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable SEC rules. In addition, our Board has adopted a written policy and procedures for the review and approval of transactions in which we define as all transactions involving anthe company is a participant, the amount involved exceeds $120,000, and one of our directors, executive officer, director, nominee for directorofficers, or a holder of more than five percent5% of our common stock,Common Stock, including any of their immediate family members and any entity owned or controlled by such persons are reviewed and approved by the Audit Committee of our Board of Directors(collectively, “related parties”), has or in some cases bywill have a majority of disinterested directors on our Board of Directors.
Indirect or indirect material interest.If any related party proposes to enter into any such transaction involving a related person,(a “related party transaction”), our Audit Committee and our Board of Directorswill consider all of the available material facts and circumstances of the transaction, including: the direct and indirect interests of the related persons;party; the approximate dollar value of the amount involved in the transaction and the dollar value of such related person’s direct or indirect interest in the transaction; whether the transaction was undertaken in the ordinary course of business of the company; whether the transaction is proposed to be entered into on terms no less favorable to the company than those reached with an unrelated third party; whether any alternative transactions or sources for comparable services or products are available; the purpose of the transaction and potential benefits, or potential risks or costs, to the company; whether the transaction is in the best interests of the company; any required public disclosure of the transaction; whether the transaction presents an improper conflict of interest for any company officer or director; in the event the related personparty is a director or nominee for director (or immediate family member of a director or nominee or an entity with which a director or nominee is affiliated), the impact that the transaction will have on that director’s or nominee for director’snominee’s independence; and any other information regarding the risks, costs and benefitstransaction that would be material to investors in light of the transaction to us;circumstances of such transaction.
Following such consideration and whether any alternative transactions or sources for comparable services or products are available.
After considering all such facts and circumstances, ourreview, if deemed appropriate, the disinterested members of the Audit Committee
and our Board of Directors determine whether approval or ratification ofwill approve the related
personparty transaction (except that, if the transaction is
in our best interests. For example, if our Audit Committee determinesproposed to be, or was, entered into on terms less favorable to the company than terms that
the proposed terms of a related person transaction are reasonable and at least as favorable as could have been
obtained fromreached with an unrelated third
parties, itparty, approval will
recommend to our Boardbe obtained by unanimous approval of
Directors that suchthe disinterested members of the Board). A related party transaction
will not be approved
or ratified. In addition, if
the transaction would render a
director no longer independent and would cause less than a majority of the Board to meet our director independence requirements. Whenever practicable, the reporting, review and approval will occur prior to entry into the related
person transaction will compromise the independence of one of our directors or nominees for director,party transaction. If advance review is not practicable, our Audit Committee may
recommend that our Board of Directors rejectratify the
transaction if it could affect our ability to complyrelated party transaction.Transactions with securities laws and regulations or NASDAQ listing requirements.
Of the transactions described below, the employment arrangement with Ms. Abraham and several of the indemnification agreements were entered into prior to the adoption of our Audit Committee charter. Accordingly, each of those transactions were approved by disinterested members of our Board of Directors after making a determination that the transaction was executed on terms no less favorable than those we could have obtained from unrelated third parties.
The policies and procedures described above for reviewing and approving related person transactions are not in writing. However, the charter for our Audit Committee provides that one of the committee’s responsibilities is to review and approve in advance any proposed related person transactions.
Transactions and Relationships with Directors, Officers and Five Percent Stockholders
We believe that there has not been any other transaction or series of transactions during 2014 to which we were or are to be a participant in which the amount involved exceeds $120,000 and in which any director, nominee for director, executive officer or holder of more than five percent of our common stock, or members of any such person’s immediate family, had or will have a direct or indirect material interest, otherRelated PartiesOther than compensation described indisclosed under “Director Compensation” or “Executive Compensation” or “Director Compensation” elsewhere in this proxy statement and asthe transactions described below.
Linda Boland Abraham
Since our inception in 1999, Linda Boland Abraham, the spouse of Dr. Magid M. Abraham, our Executive Chairman of our Board of Director and former Chief Executive Officer, has been employed in various management positions with us. Most recently, Ms. Abraham has served as our Executive Vice President, Global Development. Duringbelow, we believe there were no other related party transactions (as defined above) during the year ended December 31,
2014, Ms. Abraham received an award2019.Transactions with WPP
As of sharesMay 20, 2020, based on public filings, WPP plc (“WPP”) and its affiliates owned approximately 16% of our restricted stock pursuant to our 2013 Bonus Policy with a fair value atoutstanding Common Stock. In the time of grant of $107,920 that was granted in February 2014, with 50% vested immediately and the remaining 50% to vest equally in February 2015 and 2016. During the year ended December 31, 2014, Ms. Abraham did not receive a cash salary. Similar to Dr. Abraham, Ms. Abraham agreed to receive stock in lieu of cash salary for the entire 2014 fiscal year. The stock for the entire calendar year was issued on December 31, 2014. The 2014 annual salary for Ms. Abraham was $62,030. Based on the closing price of our common stock as reported on the NASDAQ Global Select Market on December 31, 2014, we awarded 1,336 shares of common stock to Ms. Abraham in lieu of salary per this arrangement.
Commercial Agreements
During 2014, The Proctor & Gamble Company purchased $3.1 million in services from the Company. Ms. Lewis, a member of our Board of Directors, was an executive officer of The Proctor & Gamble Company until her retirement from that position in December 2014. Ms. Lewis did not have direct authority over The Proctor & Gamble Company contracts with the Company,
nor did she receive direct material benefit from any such transactions. The sales were made in the ordinarynormal course of business,
pursuantwe provide WPP and its affiliates with services amongst our different product lines and receive services from WPP and its affiliates supporting our data collection efforts. In 2019, our transactions with WPP and its affiliates resulted in approximately $15.9 million of revenue and $11.0 million of expense.Irwin Gotlieb, who was appointed to our standard terms and conditions.Board in April 2019, serves as a senior advisor to WPP.
We have entered into an indemnification agreementTransactions with eachFidelity
During 2019, based on public filings, FMR LLC (an affiliate of Fidelity Management & Research Company) owned more than 5% of our directorsoutstanding Common Stock. In the normal course of business, we provide Fidelity and executive officers. The indemnification agreementsits affiliates with services amongst our different product lines and receive stock and benefits processing and administration services from Fidelity. In 2019, our amendedtransactions with Fidelity and restated certificateits affiliates resulted in approximately $0.9 million of incorporationrevenue and bylaws require us to indemnify$0.1 million of expense. On February 7, 2020, Fidelity filed a Schedule 13G/A indicating that it no longer owns more than 5% of our directors and officersoutstanding Common Stock.
Transactions with OKTA
Frederic Kerrest, the son of Jacques Kerrest, serves as Chief Operating Officer of OKTA, Inc., which is a service provider to the fullest extent permittedcompany. In 2019, we recognized expense of approximately $0.1 million from transactions with OKTA in the normal course of business.
Compensation ofNon-Executive Employees
William Livek’s son is anon-executive account director of the company and has been employed by Delaware law.the company since January 2016. During 2019, he received salary and incentive compensation of approximately $108,000, in addition to the standard benefits that he receives as an employee of the company.
Kathleen Love’s son is anon-executive sales manager of the company and has been employed by the company since May 2017. During 2019, he received salary and incentive compensation of approximately $173,000, in addition to the standard benefits that he receives as an employee of the company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to beneficial ownership of our common stock,Common Stock as of April 1, 2015,May 15, 2020, by:
each beneficial owner of 5% or more of the outstanding shares of our common stock;Common Stock;
each of our directors;current directors and director nominees;
each of our named executive officers;officers for 2019; and
all of our current directors and executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. 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 the common stockCommon Stock that they beneficially own, subject to applicable community property laws. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stockCommon Stock subject to options or warrantsother rights held by that person that are currently exercisable or exercisable within 60 days of April 1, 2015May 15, 2020 are deemed outstanding, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated, these shares do not include any stock or options awarded after April 1, 2015.May 15, 2020. A total of 40,513,19170,847,771 shares of our common stockCommon Stock were outstanding as of April 1, 2015.May 15, 2020. Except as otherwise indicated, the address of each of the personsperson in this table is c/o comScore, Inc.,Comscore, 11950 Democracy Drive, Suite 600, Reston, Virginia 20190.
|
| | | | |
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percentage of Common Stock Outstanding |
| 5% or Greater Stockholders: | | |
WPP plc and affiliated entities(2) | 6,076,978 |
| 15.0 | % |
PRIMECAP Management Company(3) | 4,150,532 |
| 12.1 | % |
Blackrock, Inc.(4) | 3,426,390 |
| 10.0 | % |
The Vanguard Group(5) | 2,303,291 |
| 6.7 | % |
| | | |
| Directors and Named Executive Officers: | | |
Serge Matta(6) | 820,534 |
| 2.0 | % |
Magid M. Abraham, Ph.D.(7) | 166,986 |
| * |
|
Gian M. Fulgoni(8) | 167,790 |
| * |
|
Melvin Wesley III(9) | 168,033 |
| * |
|
Cameron Meierhoefer(10) | 222,504 |
| * |
|
Christiana Lin(11) | 239,467 |
| * |
|
| Russell Fradin | — |
| * |
|
| William J. Henderson | 24,925 |
| * |
|
| William Katz | 25,517 |
| * |
|
Ronald J. Korn | 37,748 |
| * |
|
| Joan M. Lewis | — |
| * |
|
All directors and executive officers as a group (twelve persons)(12) | 1,982,558 |
| 4.9 | % |
| | | | | | | | |
Name and Address of Beneficial Owner | | Amount and
Nature of
Beneficial
Ownership (1) | | | Percentage of
Common Stock
Outstanding | |
5% or Greater Stockholders: | | | | | | | | |
WPP plc and affiliated entities (2) | | | 11,319,363 | | | | 16.0% | |
PRIMECAP Management Company (3) | | | 7,870,285 | | | | 11.1% | |
Tenzing Global Management LLC and affiliated entities (4) | | | 3,950,000 | | | | 5.6% | |
Directors and Named Executive Officers: | | | | | | | | |
Irwin Gotlieb, Director (5) | | | 86,956 | | | | * | |
Jacques Kerrest, Director (6) | | | 43,865 | | | | * | |
William Livek, Chief Executive Officer and Executive Vice Chairman (7) | | | 1,022,179 | | | | 1.44% | |
Kathleen Love, Director (8) | | | 30,194 | | | | * | |
John Martin, Director (9) | | | 33,817 | | | | * | |
Brent Rosenthal, Chairman of the Board (10) | | | 251,933 | | | | * | |
Dale Fuller, Former Interim Chief Executive Officer (11) | | | 443,701 | | | | * | |
Bryan Wiener, Former Chief Executive Officer | | | — | | | | * | |
Gregory Fink, Chief Financial Officer and Treasurer (12) | | | 30,252 | | | | * | |
Carol DiBattiste, Chief Legal and Compliance Officer (13) | | | 67,398 | | | | * | |
Christopher Wilson, Chief Commercial Officer (14) | | | 193,871 | | | | * | |
Sarah Hofstetter, Former President | | | 6,010 | | | | * | |
Kathryn Bachmann, Former Chief Operating Officer | | | — | | | | * | |
All current directors and executive officers as a group (9 persons) (15) | | | 1,760,465 | | | | 2.46% | |
| |
| * | Represents less than 1% of the outstanding shares of common stock.Common Stock. |
| |
| (1) | The information provided in this table is based on ourcompany records, information supplied to us by our directors, executive officers, directorsformer executive officers and principal stockholders and information contained in Schedules 13D and 13G and Forms 4 filed with the SEC. |
| |
| (2) | This information is derived solely from the Schedule 13D13D/A filed with the SEC on April 7, 2015. Each of WPP plc and6, 2018. Shares are owned directly by Cavendish Square Holding B.V. (“Cavendish”), which is a wholly-owned subsidiary of WPP plc have shared voting power and shared dispositive powerthat WPP plc owns indirectly through a series of 6,076,978 shares.holding companies. WPP plc is an indirect beneficial owner of the reported securities. The address for WPP plc is 27 Farm Street, London, unitedUnited Kingdom W1J 5RJ. The address for Cavendish Square Holding B.V. is Laan op Zuid 167, 3072 DB Rotterdam, Netherlands. |
| |
| (3) | This information is derived solely from the Schedule 13G/A filed with the SEC on February 13, 2015.12, 2020. PRIMECAP Management Company has sole voting power of 3,470,360 shares and sole dispositive power of 4,150,532for 7,870,285 shares. The address for PRIMECAP Management Company is 225 south Lake Ave.177 E. Colorado Blvd., #400,11th Floor, Pasadena, CA 91101. .91105. |
| |
| (4) | This information is derived solely from the Schedule 13G/A13D filed with the SEC on February 10, 2015. Blackrock, Inc.March 13, 2020. Tenzing Global Management LLC has soleshared voting and dispositive power of 3,351,333for 3,950,000 shares, Tenzing Global Investors LLC has shared voting and dispositive power for 2,878,315 shares, Tenzing Global Investors Fund I LP (“Fund I”) has shared voting and dispositive power for 2,878,315 shares, and soleChet Kapoor has shared voting and dispositive power for 3,950,000 shares. Shares are held directly and beneficially by Fund I, for which Tenzing Global Management, LLC is the investment adviser and Tenzing Global Investors LLC is the general partner, and Chet Kapoor serves as Managing Partner and CIO of 3,426,390 shares.each of Tenzing Global Investors LLC and Tenzing Global Management, LLC and the Managing Partner and CIO of Fund I. The address for Blackrock, Inc.each of the Tenzing entities and Mr. Kapoor is 55 East 52nd90 New Montgomery Street, New York, NY 10022.Suite 650, San Francisco, California 94105. |
| |
| (5) | This information is derived solelyRepresents 86,956 shares subject to vested restricted stock units that are scheduled to be delivered on the earlier of Mr. Gotlieb’s separation from service or a change in control of the Schedule 13G/A filed with the SEC on February 11, 2015. The Vanguard Group has sole voting power of 46,879 shares, sole dispositive power of 2,259,712, and shared dispositive power of 43,579 shares. The address for the Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.company. |
| |
| (6) | Includes 743,46811,390 shares subject to vested restricted stock units that are scheduled to be delivered on the earlier of Mr. Kerrest’s separation from service or a change in control of the company and 24,155 shares subject to restricted stock units that are scheduled to vest within 60 days of May 15, 2020 and to be delivered on the earlier of Mr. Kerrest’s separation from service or a change in control of the company. |
| (7) | Includes 286,350 shares subject to options that are immediately exercisablecurrently exercisable. |
| (8) | Represents 6,039 shares subject to vested restricted stock units that are scheduled to be delivered on the earlier of Ms. Love’s separation from service or exercisablea change in control of the company and 24,155 shares subject to restricted stock units that are scheduled to vest within 60 days of April 1, 2015. Additionally, includes 8,750May 15, 2020 and to be delivered on the earlier of Ms. Love’s separation from service or a change in control of the company. |
| (9) | Represents 9,662 shares subject to a right of repurchase held by us pursuant to avested restricted stock agreement. |
| |
(7) | Includes 33,947 shares held indirectly by spouseunits that are scheduled to be delivered on the earlier of which 6,250 shares are subject toMr. Martin’s separation from service or a rightchange in control of repurchase held by us pursuant to a restricted stock agreement. |
| |
(8) | Includes 8,750the company and 24,155 shares subject to a right of repurchase held by us pursuant to a restricted stock agreement.units that are scheduled to vest within 60 days of May 15, 2020 and to be delivered on the earlier of Mr. Martin’s separation from service or a change in control of the company. |
| (10) | |
(9) | Includes 166,30986,974 shares subject to options that are immediatelycurrently exercisable, 11,390 shares subject to vested restricted stock units that are scheduled to be delivered on the earlier of Mr. Rosenthal’s separation from service or exercisablea change in control of the company, and 24,155 shares subject to restricted stock units that are scheduled to vest within 60 days of April 1, 2015.May 15, 2020 and to be delivered on the earlier of Mr. Rosenthal’s separation from service or a change in control of the company. |
| (11) | Includes 354,546 shares subject to deferred stock units that are scheduled to be delivered within 60 days of May 15, 2020. |
| (12) | Includes 9,627 shares subject to vested restricted stock units that are scheduled to be delivered between May 15, 2020 and December 31, 2020. |
| (13) | Includes 33,645 shares subject to vested restricted stock units that are scheduled to be delivered between May 15, 2020 and December 31, 2020. |
| (14) | Includes 83,500 shares subject to options that are currently exercisable and 13,751 shares subject to vested restricted stock units that are scheduled to be delivered between May 15, 2020 and December 31, 2020. |
| (15) | Includes 456,824 shares subject to options that are currently exercisable, 182,460 shares subject to vested restricted stock units that are scheduled to be delivered as described above, and 96,620 shares subject to restricted stock units that are scheduled to vest within 60 days of May 15, 2020. |
(10) Includes 166,309 shares subject to options that are immediately exercisable or exercisable within 60 days of April 1, 2015. Additionally, includes 6,250
shares subject to a right of repurchase held by us pursuant to a restricted stock agreement.
(11) Includes 166,309 shares subject to options that are immediately exercisable or exercisable within 60 days of April 1, 2015. Additionally, includes 6,250
shares subject to a right of repurchase held by us pursuant to a restricted stock agreement.
(12) Includes 1,318,809 shares subject to options that are immediately exercisable or exercisable within 60 days of April 1, 2015. Includes 41,250 shares
subject to a right of repurchase held by us pursuant to restricted stock agreements.
DELINQUENT SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
REPORTSSection 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act requires that certain of our directors, executive officers, and directors, and persons who beneficially own more than 10% of a registered class of our equity securities file reports of ownership and changes in ownership (Forms 3, 4 and 5) with the SEC. Such directors, executive officers directors and greater than 10% holdersbeneficial owners are required to furnish us with copies of all of these forms that they file. Certain Comscore employees of our company hold a power of attorney to enable such individuals to file ownership and change in ownership forms on behalf of certain of our directors and executive officers and directors.
officers.Based solely on our review of these reports or written representations from certain reporting persons, we believe that during 2014,2019, all filing requirements applicable to our directors, executive officers, directors, greater-than-10%greater than 10% beneficial owners and other persons subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, were timely met, except for the following reports:two Form 4s for Christopher Wilson (relating to a single vesting event and related tax withholding obligation) that were late due to an administrative issue.
|
| | | |
Date Filed | Form | Name(s) of Filer(s) | Description |
February 21, 2014 | 4 | Magid Abraham | Filing related to transaction originally occurring on February 14, 2014.
|
March 5, 2014 | 4 | Magid Abraham
| Filing related to transaction originally occurring on February 28, 2014.
|
March 19, 2014 and April 1, 2014
| 4 | Magid Abraham
Serge Matta
Gian Fulgoni
Christiana Lin
Kenneth Tarpey
Cameron Meierhoefer
| Filing related to transaction originally occurring on March 14, 2014. |
April 14, 2014 | 4 | Magid Abraham
Cameron Meierhoefer
| Filing related to transaction originally occurring on April 9, 2014. |
April 30, 2014 | 4 | Christiana Lin
Cameron Meierhoefer
| Filing related to transaction originally occurring on April 27, 2014. |
August 5, 2014 | 4 | Cameron Meierhoefer | Filing related to transaction originally occurring on July 30, 2014.
|
August 22, 2014 | 4/A | Kenneth Tarpey | Amended Form 4 related to transaction originally occurring on August 15, 2014. |
PRINCIPAL ACCOUNTING FEES AND SERVICES
AuditFees and Related Fees for Fiscal Years 2013 and 2014
ServicesThe following table sets forth a summary of the fees billed to us by Ernst & Young LLPDeloitte for professional services for the fiscal years ended December 31, 20132019 and 2014, respectively. 2018. Audit-related fees were for services in connection with foreign statutory audits, access to Deloitte’s accounting research tool, and our registration statements onForm S-1 andForm S-8 (2018 only). Tax fees were principally for tax consulting services.
| | | | | | | | |
Name | | 2019 | | | 2018 | |
| | | (In thousands) | |
Audit Fees | | $ | 4,511 | | | $ | 6,474 | |
Audit-Related Fees | | | 25 | | | | 122 | |
Tax Fees | | | 56 | | | | 68 | |
All Other Fees | | | — | | | | — | |
| | | | | | | | |
Total Fees | | $ | 4,592 | | | $ | 6,664 | |
| | | | | | | | |
All of the services described in the following fee tabletables above were approved by the Audit Committee.
|
| | | | | | |
| Name | 2013 |
| 2014 |
|
| Audit Fees(1) | $ | 1,768,500 |
| $ | 1,926,235 |
|
| Audit-Related Fees | - |
| - |
|
| Tax Fees | - |
| - |
|
| All Other Fees | - |
| - |
|
| Total Fees | $ | 1,768,500 |
| $ | 1,926,235 |
|
| |
(1) | Audit fees represent fees for professional services relating to the audit of our financial statements included in our annual reports on Form 10-K and our registration statements on Forms S-3 and S-8, the audit of internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002 and the review of the financial statements included in our quarterly reports on Form 10-Q. |
The Audit Committee meets regularly with Ernst & Young LLP throughout the yearindependent auditor and reviews both audit andnon-audit services performed by Ernst & Young LLPDeloitte as well as fees charged for such services. The Audit Committee has determined that the provision of the services described above is compatible with maintaining Ernst & Young LLP’sDeloitte’s independence in the conduct of its audit functions.
Pre-Approval Policies and Procedures
Our Audit Committee has adopted, and our Board of Directors has approved, a policy that sets forth the procedures and the conditions pursuant to which services proposed to be performed by our independent auditors should bepre-approved. Such procedures and conditions are set forth in the independent auditor may be pre-approved. PursuantAudit Committee’s charter. The Audit Committee has delegatedpre-approval authority to its chairman for certain services other than the annual audit audit-related and non-audit services pre-approval policy, our Audit Committee may delegate either type of pre-approval authority to one or more of its members.quarterly reviews performed by Deloitte. The member to whom such authority is delegatedchairman must report for informational purposes only, anypre-approval decisions to the Audit Committee at its next scheduled meeting. OurThe Audit Committeepre-approved all audit, relatedaudit-related and other services rendered by Ernst & Young LLPDeloitte in 2013its capacity as our independent auditor for 2019 and 2014.2018.
AUDIT COMMITTEE REPORT
The Audit Committee is comprisedcomposed of “independent” directors, as determined in accordance with Rule 5605(a)(2) of the NASDAQ Marketplace Rulesapplicable Nasdaq standards andRule 10A-3 of the Securities Exchange Act of 1934. The Audit Committee operates pursuant to a written charter adopted by the Board, of Directors, a copy of which is available under “Corporate Governance” on the “Investor Relations”Investor Relations section of our website located at http://www.comscore.com.
www.comscore.com.As described more fully in its charter, the purpose of the Audit Committee is to assistoversee the Boardaccounting and financial reporting processes of Directors with its oversight responsibilities regarding the integritycompany and the audits of ourthe financial statements our compliance with legal and regulatory requirements, assessing our independent registered public accounting firm’s qualifications and independence and, if applicable, the performance of the persons performing internal audit duties for our company.
Company management is responsible for the preparation, presentation and integrity of our financial statements as well as our financial reporting process, accounting policies, internal audit function, internal accounting controls and disclosure controls and procedures. Our independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and to issueissuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. The following is the Audit Committee’s report submitted to the boardBoard of directorsDirectors for 2014.
2019.The Audit Committee has:
reviewed and discussed ourthe company’s audited financial statements with management and ErnstDeloitte & YoungTouche LLP (“Deloitte”), the company’s independent registered public accounting firm;firm for 2019;
discussed with Ernst & Young LLPDeloitte the matters required to be discussed by Auditing Standard No. 16,
Communications with Audit Committees, as currently in effect and as adopted by the Public Company Accounting Oversight Board; andreceived from Ernst & Young LLP, disclosures and a letter regarding their independence as requiredunder the applicable requirements of the Public Company Accounting Oversight Board requesting Ernst & Young LLP’s communicationPCAOB; and
received the written disclosures and the letter from Deloitte required by applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, and has discussed the auditors’ independence with them.Deloitte its independence.
In addition, the Audit Committee has met separately with company management and with Ernst & Young LLP.
Deloitte.Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited 2014 financial statements for 2019 be included in ourthe company’s Annual Report onForm 10-K for the year ended December 31, 20142019 for filing with the Securities and Exchange Commission.
Ronald J. Korn, Chairman
William J. Henderson
Joan M. Lewis
Jacques Kerrest
Brent Rosenthal
The foregoing audit committeeAudit Committee report is made by the current directors who were members of the Audit Committee at the time the company’s 2019 Annual Report onForm 10-K was approved, and shall not be deemed incorporated by reference
into any filing under the Securities Act of 1933 or the Securities Exchange Act of1934, and shall not otherwise be deemed filed under these acts, except to the extentwe specifically incorporate by reference into such filings.
PROPOSALS TO BE VOTED ON
PROPOSAL NO.Proposal No. 1
ELECTION OF DIRECTORS
Two – Election of DirectorsOur stockholders are being asked to elect the two nominees named in this proxy statement as Class III directors are to be elected at the 2015 Annual Meeting to serve a three-year termfor terms expiring at the 2018our 2023 annual meeting of stockholders, orto hold office until their respective successors have been duly elected and qualified. The Class I and Class III directors will continue to serve their respective terms.
Our Nominating and Governance Committee recommended, and our Board of Directors has nominated:
William J. Henderson,nominated, Jacques Kerrest and
Ronald J. Korn
Kathleen Love for election as Class II directors at the 20152020 Annual Meeting. Each of Messrs. Henderson and Korn are presently directorsthese individuals is currently a director of comScore. All persons nominated for electionthe company. Both have agreed to serve if elected, and we have no reason to believe that any nominee will be unable or unwilling to serve.
Shares represented by the accompanying proxy will be voted for the election of the nominees recommended by the Board of Directors unless the proxy is marked in such a manner so as to withhold authority to vote. If any nominee is unable or unexpectedly declines to serve as a director, the Board of Directors may designate another nominee to fill the vacancy, and the proxy will be voted for that nominee. Alternatively, the Board may reduce the size of the Board, or the proxies may vote just for the remaining nominee, leaving a vacancy that the Board may fill at a later date. Proxies cannot be voted for more than the two named nominees.
The sectionssection of this proxy statement titled “Directors, Director Nominees, Executive Officers and Corporate Governance —– Directors, Director Nominees and Executive Officers” on pages 9-11 and “Directors, Director Nominees, Executive Officers and Corporate Governance — Director Nomination Process and Qualifications” on pages 13-14 of this proxy statement containcontains more information about the leadershipexperience, qualifications, attributes and skills and other experiences that caused our Nominating and Governance Committee and our Board of Directors to determine that these nominees should serve as Class II directors of comScore.
The two nominees receiving the highest number of affirmative “FOR” votes with respect to each class shall be elected as Class II directors. Unless marked toAbstentions and brokernon-votes will have no effect on the contrary, proxies received will be voted “FOR” these nominees.
outcome of this proposal.Recommendation of Our Board of Directors
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF
THE ABOVEMENTIONED NOMINEES AS CLASS II DIRECTORS PURSUANT TOPROPOSAL NO. 1.
* * * * *
Proposal No. 2 – Advisory Vote to Approve Named Executive Officer CompensationWe are seeking the advisory,non-binding approval of our stockholders with respect to the compensation paid to our named executive officers as disclosed in this proxy statement.
The objective of our compensation programs for our employees, including our executive officers, is to attract and retain top talent and to ensure that the total compensation paid is fair, reasonable and consistent with market practice. Our compensation programs are designed to motivate and reward employees for achievement of positive business results and to promote and enforce accountability. Overall, we seek to maintain a performance-oriented culture with compensation opportunities that reward our executive officers when we achieve or exceed our goals, while putting a significant portion of their target compensation at risk in the event of underperformance.
This proposal gives you, as a stockholder, the opportunity to express your views on the compensation of our named executive officers as disclosed in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we are asking stockholders to approve the following resolution:
“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion included in this proxy statement, is hereby APPROVED.”
Required Vote
You may vote for or against this Proposal No. 2, or you may abstain. Approval of this proposal requires the affirmative vote (“FOR”) of a majority of the shares present or represented by proxy at the 2020 Annual Meeting and entitled to vote thereon. Abstentions will have the same effect as a vote against this proposal. Brokernon-votes will have no effect on the outcome of this proposal. Because this vote is advisory, it will not be binding upon our Board. However, our Board and Compensation Committee will consider the outcome of the vote, along with other relevant factors, in evaluating our executive compensation program.
Recommendation of Our Board of Directors
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL NO. 22.
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal No. 3 – Ratification of Appointment of Independent Registered Public Accounting Firm
Our Audit Committee has appointed ErnstDeloitte & YoungTouche LLP (“Deloitte”) as our independent registered public accounting firm for the year ending December 31, 2015. Ernst & Young LLP2020. Deloitte has served as our independent audit firm since 20002017 and has audited our financial statements for the fiscal years 2000 through 2014.year ended December 31, 2019. For more information about services Deloitte provided by Ernst & Young LLP to us, as well as our procedures and approvals for approving such services, see the section of this proxy statement titled “Principal Accounting Fees and Services — Pre-Approval Policies and Procedures” on page 53 of this proxy statement.Services.” A representative of Ernst & Young LLPDeloitte is expected to be present at our 20152020 Annual Meeting and will have an opportunity to make a statement and respond to appropriate questions from stockholders.
Ratification of the appointment of Ernst & Young LLPDeloitte as our independent registered public accounting firm is not required by our bylaws or other applicable legal requirements. However, ourOur Board of Directors is submitting the appointment of Ernst & Young LLPDeloitte to theour stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain the firm.firm; however, the Audit Committee may, in its discretion, continue to retain Deloitte. Even if the appointment is ratified, the Audit Committee atmay, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and the best interests of the company and our stockholders.
The affirmative vote (“FOR”) of a majority of the shares of our common stock present or represented by proxy at the 20152020 Annual Meeting in person or by proxy and entitled to vote is required to ratify the appointment of Ernst & Young LLPDeloitte as our independent registered public accounting firm for the year ending December 31, 2015.2020. Abstentions will have the same effect as a vote against this proposal.
Brokernon-votes will have no effect on the outcome of this proposal.Recommendation of Our Board of Directors
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
PROPOSAL NO. 2.3.
* * * * *
PROPOSAL NO. 3
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
We are seekingProposal No. 4 – Approval of an Amendment and Restatement of the
advisory, non-binding approvalcomScore, Inc. 2018 Equity and Incentive Compensation PlanOverview
The use of equity-based awards under the 2018 Plan has been a key component of our compensation program. The ability to grant equity-based awards is critical to attracting and retaining highly qualified individuals. The Board believes that it is in the best interests of the company and our stockholders with respectfor those individuals to have an ownership interest in the compensation awarded to our named executive officers for 2014.
Our named executive officer compensation program, as described on pages 18-49company in recognition of
this proxy statement, is structured around the following goals: to attracttheir present and
retain top talent; to promote business performance accountability; to promote individual performance accountability;potential contributions and to align
stockholdertheir interests with those of our
management team. Ourstockholders.The Board has determined that the current number of shares of our Common Stock available for grants under the 2018 Plan is not sufficient to meet the objectives of our compensation plansprogram going forward. Accordingly, on May 26, 2020, upon recommendation by the Compensation Committee, the Board approved and adopted, subject to the approval of the stockholders of the company at the 2020 Annual Meeting, an amendment and restatement of the 2018 Plan (the “Amended 2018 Plan”) to increase the number of shares of our Common Stock available for grant by 9,600,000 and to make other changes to the 2018 Plan as described below.
You are being asked to approve the Amended 2018 Plan, and the Board is recommending that the company’s stockholders vote in favor of the Amended 2018 Plan. If approved by our stockholders, the Amended 2018 Plan will become effective as of the date of the 2020 Annual Meeting. If the proposed Amended 2018 Plan is not approved by our stockholders, then the 2018 Plan will remain in effect in its present form. Whether the Amended 2018 Plan is approved by our stockholders or not, each award granted under the 2018 Plan prior to the date of the 2020 Annual Meeting will continue to be subject to the terms and provisions applicable to such award under the 2018 Plan as in effect immediately prior to the effective date of the Amended 2018 Plan.
At the 2018 annual meeting, the stockholders of the company approved the 2018 Plan, and 10,650,000 shares of our Common Stock were reserved for issuance thereunder. The 2018 Plan succeeded our 2007 Equity Incentive Plan, as amended and restated (the “2007 Plan”). The 2007 Plan expired in accordance with its terms on March 2, 2017, and no further grants may be made thereunder. In addition, no further grants will be made under the Rentrak Corporation Amended and Restated 2005 Stock Incentive Plan and the Rentrak Corporation 2011 Incentive Plan (together with the Rentrak Corporation Amended and Restated 2005 Stock Incentive Plan, the “Rentrak Plans”), which we assumed in connection with our merger with Rentrak Corporation in 2016. However, outstanding awards under the 2007 Plan and the Rentrak Plans will generally continue in effect in accordance with their terms.
The Amended 2018 Plan will continue to afford the Compensation Committee the ability to design compensatory awards that are responsive to the company’s needs and includes authorization for a variety of awards designed to advance the interests and long-term success of the company by encouraging stock ownership among employees of the company and its subsidiaries, certain consultants to the company and its subsidiaries, andnon-employee directors of the company.
Stockholder approval of the Amended 2018 Plan would increase the number of shares of Common Stock that the company may issue under the 2018 Plan by 9,600,000 shares. After taking into account this increase and subject to adjustment as provided in the Amended 2018 Plan, the total number of shares of Common Stock authorized for issuance under the Amended 2018 Plan will equal 20,250,000, including past awards under the 2018 Plan. If the Amended 2018 Plan is approved by stockholders, it will be effective as of the date of the 2020 Annual Meeting.
The actual text of the Amended 2018 Plan is attached to this proxy statement asAnnex A. The following description of the Amended 2018 Plan is only a summary of its principal terms and provisions and is qualified by reference to the actual text as set forth inAnnex A.
Why We Believe You Should Vote for this Proposal
The Amended 2018 Plan authorizes the Compensation Committee to provide cash awards and equity-based compensation in the form of stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, performance shares, performance units, dividend equivalents, and certain other awards, including those denominated or payable in, or otherwise based on, shares of Common Stock, for the purpose of providing ournon-employee directors, employees of the company and its subsidiaries, and certain consultants of the company and its subsidiaries, incentives and/or rewards for performance. Some of the key features of the Amended 2018 Plan that reflect our commitment to effective management of equity and incentive compensation are set forth below in this subsection.
We believe our future success depends in part on our ability to attract, motivate, and rewardretain high-quality employees for achievementand directors and that the ability to provide equity-based and incentive-based awards under the Amended 2018 Plan is critical to achieving this success. We would be at a severe competitive disadvantage if we could not use equity-based awards to recruit and compensate our employees and directors. The use of positive business results and also to promote and enforce accountability.
We believe thatCommon Stock as part of our
executive compensation program
effectively balances short-term and long-term incentive, cash and equity elements, and fixed and contingent payments. We applyis also important because equity-based awards are an essential component of our compensation
philosophy using both quantitativeprogram for key employees, as they help link compensation with long-term stockholder value creation and
qualitative standardsreward participants based on service and/or performance.In 2019 and 2018, we granted awards under the 2018 Plan covering 3,503,866 shares and 2,872,408 shares, respectively, of our Common Stock. We did not grant any equity awards under any plan in 2017. Based upon the methodology used by Institutional Shareholder Services, which assigns a greater weight to full-value awards than to stock option awards and SARs, our “burn rate” (which represents the rate at which our equity award grants diluted our stockholders) for each of 2019, 2018 and 2017 was 7.54%, 7.47% and 0.00%, respectively, for a three-year average burn rate of 5.00%.
As of May 20, 2020, there were 70,865,075 shares of Common Stock outstanding. Based on the closing price of our Common Stock on May 20, 2020 of $2.85 per share, the aggregate market value as of May 20, 2020 of the new shares of Common Stock requested under the Amended 2018 Plan, assuming all available shares were awarded as stock option or SAR awards (9,600,000), would be $27,360,000. If all available shares were awarded as full-value awards, the aggregate market value of the new shares (4,800,000) as of May 20, 2020 would be $13,680,000. As described below, the Amended 2018 Plan is a flexible authorization plan (often referred to as a “fungible share plan”).
Based on current projections, we anticipate that the number of shares remaining available under the 2018 Plan is insufficient to cover anticipated employee andnon-employee director awards through the end of fiscal year 2020. If we are unable to adequately provide long-term equity compensation to incentivize our namedemployees, or provide annual equity grants as part of compensation to ournon-employee directors, we may lose key personnel to competitors, which would be detrimental to our operations. If the Amended 2018 Plan is not approved, we may be compelled to increase significantly the cash component of our employee and director compensation, which approach may not necessarily align employee and director compensation interests with the investment interests of our stockholders. Replacing equity awards with cash also would increase cash compensation expense and use cash that could be better utilized for other purposes, including reinvestment in our business.
In determining the number of additional shares to request for approval under the Amended 2018 Plan, our management team worked with Meridian and the Compensation Committee to evaluate a number of factors, including our recent share usage and criteria expected to be utilized by institutional proxy advisory firms in evaluating our proposal for the Amended 2018 Plan.
If the Amended 2018 Plan is approved, we intend to use the shares authorized under the Amended 2018 Plan to continue our practice of incentivizing key individuals through equity grants. We currently anticipate that the shares requested in connection with the approval of the Amended 2018 Plan will last for approximately one to two years, based on our historic grant rates, estimated future grant rates, and our approximate current share price,
but could last for a shorter or longer period of time if actual practice does not match historic rates or if our future plans or share price change materially. As noted below, our Compensation Committee retains full discretion under the Amended 2018 Plan to determine the number and amount of awards to be granted under the Amended 2018 Plan, subject to the terms of the Amended 2018 Plan.
Our equity compensation practices are intended to be competitive and consistent with market practice. In evaluating this proposal, stockholders should consider all of the information in this proposal.
Information on Equity Compensation Plans as of March 31, 2020
The information included in this proxy statement and our Annual Report on Form10-K for the fiscal year ending December 31, 2019 is updated by the following information regarding all existing equity compensation plans as of March 31, 2020 (except as noted otherwise):
| | | | |
Total shares underlying outstanding stock options(1) | | | 1,528,967 | |
Weighted-average exercise price of outstanding stock options | | | $11.03 | |
Weighted-average remaining contractual life of outstanding stock options | | | 6.37 years | |
Total shares underlying outstanding full-value awards(2) | | | 3,160,728 | |
Total shares of common stock outstanding as of May 20, 2020 | | | 70,865,075 | |
Total shares available for grant under the 2018 Plan(3) | | | 726,505 | |
(1) No SARs were outstanding as of March 31, 2020.
(2) Reflects (i) all shares subject to time-based RSUs and deferred stock units that were outstanding as of March 31, 2020 (2,026,526 shares), and (ii) the maximum number of shares subject to PRSUs that were outstanding as of March 31, 2020 (1,134,202 shares). If actual performance under the PRSUs falls below the maximum level for these awards, fewer shares would be issued.
(3) Assumes the maximum number of shares subject to outstanding PRSUs is no longer available for issuance. Under the 2018 Plan’s fungible share ratio, each stock option or SAR counts as one share against the plan reserve and each full-value share counts as two shares against the plan reserve, with PRSUs counted at maximum performance. If actual performance under the PRSUs falls below the maximum level for these awards, a greater number of shares would be available for issuance under the 2018 Plan. The 2018 Plan is currently the only plan with shares available for grant to our employees andnon-employee directors.
Summary of the Changes to the 2018 Plan Included in the Amended 2018 Plan
The Amended 2018 Plan will amend and supersede the 2018 Plan and will allow us to grant equity-based awards to our employees, officers,non-employee directors, and certain contractors, as described in more detail below.
The Amended 2018 Plan makes certain changes to the terms of the 2018 Plan, including:
approves an additional 9,600,000 shares of our Common Stock for issuance under the Amended 2018 Plan (including as awards of Incentive Stock Options, as defined below). After taking into account this increase and subject to adjustment as provided in the Amended 2018 Plan, the total number of shares of Common Stock authorized for issuance under the Amended 2018 Plan (including as awards of Incentive Stock Options) will equal 20,250,000, including past awards under the 2018 Plan; and
makes certain other clarifying and ministerial changes.
This description does not purport to be complete and is qualified in its entirety by the full text of the proposed Amended 2018 Plan, which is included asAnnex A hereto. If our stockholders approve this proposal, we intend to file, pursuant to the Securities Act of 1933, a registration statement on FormS-8 to register additional shares available for delivery under the Amended 2018 Plan.
Share Increase
Currently, the 2018 Plan is the only active stockholder-approved plan that we use to grant equity-based compensation awards. As of March 31, 2020, there were 726,505 shares remaining for issuance under the 2018
Plan (the “Available Shares”). If the Amended 2018 Plan is approved by our stockholders, an additional 9,600,000 shares would be reserved for issuance under the Amended 2018 Plan (the “New Shares”), with the maximum number of shares available for issuance under the Amended 2018 Plan following the date of stockholder approval being equal to (i) 10,326,505 (which is the sum of the Available Shares plus the New Shares), minus (ii) the sum of (a) one share for every share subject to a stock option or appreciation right granted under the 2018 Plan after March 31, 2020 and prior to the 2020 Annual Meeting and (b) two shares for every one share subject to other awards that are granted under the 2018 Plan after March 31, 2020 and prior to the 2020 Annual Meeting, plus (iii) any shares that again become available after March 31, 2020 for awards under the 2018 Plan or the Amended 2018 Plan.
The shares issued under the Amended 2018 Plan may be shares of original issuance, treasury shares, or a combination of the two.
Highlights of the Amended 2018 Plan
Flexible Authorization Plan: The Amended 2018 Plan is a flexible authorization plan. Under the Amended 2018 Plan, the aggregate number of shares of Common Stock available for issuance will be reduced by (1) one share of Common Stock for every one share of Common Stock subject to an award of stock options or SARs granted under the Amended 2018 Plan, and (2) two shares of Common Stock for every one share of Common Stock subject to an award other than of stock options or SARs granted under the Amended 2018 Plan.
Reasonable Amended 2018 Plan Limits: The Amended 2018 Plan provides that, subject to adjustment as applicable and the applicable Common Stock counting provisions as described in the Amended 2018 Plan:
the aggregate number of shares of Common Stock actually issued or transferred upon the exercise of Incentive Stock Options (as defined below) will not exceed 20,250,000 shares of Common Stock; and
nonon-employee member of the Board will be granted, in any one calendar year, compensation for such service having an aggregate maximum value (measured at the date of grant as applicable and calculating the value of any awards under the Amended 2018 Plan based on the grant date fair value for financial reporting purposes) in excess of $900,000.
Allowances for Conversion Awards and Assumed Plans: Shares of Common Stock issued or transferred under awards granted under the Amended 2018 Plan in substitution for or conversion of, or in connection with an assumption of, stock options, SARs, restricted stock, RSUs, or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with us or any of our subsidiaries will not count against (or be added to) the aggregate share limit or other Amended 2018 Plan limits described above. Additionally, shares available under certain plans that we or our subsidiaries may assume in connection with corporate transactions from another entity may be available for certain awards under the Amended 2018 Plan, under circumstances further described in the Amended 2018 Plan, but will not count against the aggregate share limit or other Amended 2018 Plan limits described above.
Limited Share Recycling Provisions: Subject to certain exceptions described in the Amended 2018 Plan, if any award granted under the 2018 Plan or the Amended 2018 Plan (in whole or in part) is canceled or forfeited, expires, is settled for cash, or is unearned, the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available under the Amended 2018 Plan at a rate of one share for every one share subject to stock option or SAR awards and two shares for every one share subject to awards other than stock options or SARs. If, after December 31, 2017, any shares of Common Stock subject to an award granted under the 2007 Plan are forfeited, or an award granted under the 2007 Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, be available for awards under the 2018 Plan or Amended 2018 Plan, as applicable (at a rate of one share of Common Stock for every one share of Common Stock subject to such
award). Notwithstanding anything to the contrary contained in the Amended 2018 Plan: (1) shares of Common Stock withheld by us, tendered or otherwise used in payment of the exercise price of a stock option or the base price of an SAR granted under the 2018 Plan or the Amended 2018 Plan will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under the Amended 2018 Plan, (2) shares of Common Stock withheld by us, tendered or otherwise used to satisfy tax withholding with respect to awards (whether granted under the 2018 Plan or the Amended 2018 Plan) other than as described in (3) below will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under the Amended 2018 Plan, (3) shares of Common Stock withheld by us, tendered or otherwise used prior to the expiration of the Amended 2018 Plan to satisfy tax withholding with respect to awards (whether granted under the 2018 Plan or the Amended 2018 Plan) other than stock options or SARs will be added back (but only to the extent such withholding did not exceed the minimum amounts of tax required to be withheld) to the aggregate number of shares of Common Stock available under the Amended 2018 Plan, and (4) shares of Common Stock reacquired by the company on the open market or otherwise using cash proceeds from the exercise of stock options (whether granted under the 2018 Plan or the Amended 2018 Plan) will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under the Amended 2018 Plan. Further, all shares of Common Stock covered by stock-settled SARs (whether granted under the 2018 Plan or the Amended 2018 Plan) that are exercised and settled in shares, whether or not all shares of Common Stock covered by the SARs are actually issued to the participant upon exercise, will not be added back to the aggregate number of shares available under the Amended 2018 Plan. If a participant elects to give up the right to receive compensation in exchange for shares of Common Stock based on fair market value, such shares of Common Stock will not count against the aggregate number of shares available under the Amended 2018 Plan.
No Repricing Without Stockholder Approval: The repricing of stock options and SARs (outside of certain corporate transactions or adjustment events described in the Amended 2018 Plan or in connection with a “change in control”) is prohibited without stockholder approval under the Amended 2018 Plan.
Change in Control Definition: The Amended 2018 Plan includes a definition of “change in control,” which is described below.
Exercise or Base Price Limitation: The Amended 2018 Plan also provides that, except with respect to certain converted, assumed or substituted awards as described in the Amended 2018 Plan, no stock options or SARs will be granted with an exercise or base price less than the fair market value of a share of Common Stock on the date of grant.
Code Section 162(m)
Section 162(m) of the Code generally disallows a deduction for certain compensation paid to certain executive officers (and, beginning in 2018, certain former executive officers) to the extent that compensation to a covered employee exceeds $1 million for such year. Compensation qualifying for a performance-based exception as “qualified performance-based compensation” under Section 162(m) of the Code has historically not been subject to the deduction limit if the compensation satisfies the requirements of Section 162(m) of the Code. This exception was repealed, effective for taxable years beginning after December 31, 2017, unless certain transition relief for certain compensation arrangements in place as of November 2, 2017 is available. To be clear, stockholders are not being asked to approve the Amended 2018 Plan (or any of its provisions) for purposes of Section 162(m) of the Code or the performance-based exception. The company does not anticipate that it would be able to make any grants under the Amended 2018 Plan that will qualify for the performance-based exception.
Summary of Other Material Terms of the Amended 2018 Plan
Administration: The Amended 2018 Plan will generally be administered by the Compensation Committee (or its successor), or any other committee of the Board designated by the Board to administer the Amended 2018 Plan. References to the “Committee” in this proposal refer to the Compensation Committee or such other committee designated by the Board, as applicable. The Committee may from time to time delegate all or any part of its
authority under the Amended 2018 Plan to a subcommittee. Any interpretation, construction and reward themdetermination by the Committee of any provision of the Amended 2018 Plan, or of any agreement, notification or document evidencing the grant of awards under the Amended 2018 Plan, will be final and conclusive. To the extent permitted by applicable law, the Committee may delegate to one or more of its members or to one or more officers, or to one or more agents or advisors of the company, such administrative duties or powers as it deems advisable. In addition, the Committee may by resolution, subject to certain restrictions set forth in the Amended 2018 Plan, authorize one or more officers of the company to (1) designate employees to be recipients of awards under the Amended 2018 Plan, and (2) determine the size of such awards. However, the Committee may not delegate such responsibilities to officers for achievingawards granted tonon-employee directors or certain employees who are subject to the reporting requirements of Section 16 of the Exchange Act. The Committee is authorized to take appropriate action under the Amended 2018 Plan subject to the express limitations contained in the Amended 2018 Plan.
Eligibility: Any person who is selected by the Committee to receive benefits under the Amended 2018 Plan and who is at that time an employee of the company or any of its subsidiaries (including a person who has agreed to commence serving in such capacity within 90 days of the date of grant) is eligible to participate in the Amended 2018 Plan. In addition, certain consultants (provided that such persons satisfy theForm S-8 definition of “employee”), andnon-employee members of the Board, may also be selected by the Committee to participate in the Amended 2018 Plan. As of May 20, 2020, approximately 1300 employees, 20 consultants, and fivenon-employee members of the Board would be eligible to participate in the Amended 2018 Plan. The basis for participation in the Amended 2018 Plan by eligible persons is the selection of such persons by the Committee in its discretion.
Types of Awards Under the Amended 2018 Plan: Pursuant to the Amended 2018 Plan, the company may grant cash awards and stock options (including stock options intended to be “incentive stock options” as defined in Section 422 of the Code (“Incentive Stock Options”)), SARs, restricted stock, RSUs, performance shares, performance units, cash incentive awards, and certain other awards based on or related to shares of our Common Stock.
Generally, each grant of an award under the Amended 2018 Plan will be evidenced by an award agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee (an “Evidence of Award”), which will contain such terms and provisions as the Committee may determine, consistent with the Amended 2018 Plan. A brief description of the types of awards which may be granted under the Amended 2018 Plan is set forth below.
Stock Options: A stock option is a right to purchase shares of Common Stock upon exercise of the stock option. Stock options granted to an employee under the Amended 2018 Plan may consist of either an Incentive Stock Option, anon-qualified stock option that is not intended to be an “incentive stock option” under Section 422 of the Code, or a combination of both. Incentive Stock Options may only be granted to employees of the company or certain of our related corporations. Except with respect to awards issued in substitution for, in conversion of, or in connection with an assumption of stock options held by awardees of an entity engaging in a corporate acquisition or merger with us or any of our subsidiaries, Incentive Stock Options andnon-qualified stock options must have an exercise price per share that is not less than the fair market value of a share of Common Stock on the date of grant. The term of a stock option may not extend more than 10 years from the date of grant. The Committee may provide in an Evidence of Award for the automatic exercise of a stock option.
Each grant of a stock option will specify the applicable terms of the stock option, including the number of shares of Common Stock subject to the stock option and the required period or periods of the participant’s continuous service, if any, before any stock option or portion of a stock option will become exercisable. Any grant of stock options may specify management objectives that must be achieved as a condition to the exercise of the stock options. Stock options may provide for continued vesting or the earlier exercise of the stock options, including in the event of retirement, death or disability of the participant or in the event of a change in control.
Each grant will specify whether the consideration to be paid in satisfaction of the exercise price will be payable: (1) in cash, by check acceptable to the company, or by wire transfer of immediately available funds; (2) by the actual or constructive transfer to the company of shares of Common Stock owned by the participant with a value at the time of exercise that is equal to the total exercise price; (3) subject to any conditions or limitations established by the Committee, by a net exercise arrangement pursuant to which the company will withhold shares of Common Stock otherwise issuable upon exercise of a stock option; (4) by a combination of the foregoing methods; or (5) by such other methods as may be approved by the Committee. To the extent permitted by law, any grant may provide for deferred payment of the exercise price from the proceeds of a sale through a bank or broker of some or all of the shares to which the exercise relates. Stock options granted under the Amended 2018 Plan may not provide for dividends or dividend equivalents.
Appreciation Rights: The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of SARs. A SAR is a right to receive from us an amount equal to 100%, or such lesser percentage as the Committee may determine, of the spread between the base price and the value of shares of our Common Stock on the date of exercise.
Each grant of SARs will specify the period or periods of continuous service, if any, by the participant with the company or any subsidiary that is necessary before the SARs or installments of such SARs will become exercisable. Any grant of SARs may specify management objectives that must be achieved as a condition of the exercise of such SARs. SARs may provide for continued vesting or earlier exercise, including in the case of retirement, death or disability of the participant or in the event of a change in control. A SAR may be paid in cash, shares of Common Stock or any combination of the two.
Except with respect to awards issued in substitution for, in conversion of, or in connection with an assumption of SARs held by awardees of an entity engaging in a corporate acquisition or merger with us or any of our subsidiaries, the base price of a SAR may not be less than the fair market value of a share of Common Stock on the date of grant. The term of a SAR may not extend more than 10 years from the date of grant. The Committee may provide in an Evidence of Award for the automatic exercise of a SAR. SARs granted under the Amended 2018 Plan may not provide for dividends or dividend equivalents.
Restricted Stock: Restricted stock constitutes an immediate transfer of the ownership of shares of Common Stock to the participant in consideration of the performance of services, entitling such participant to dividend, voting and other ownership rights, subject to the substantial risk of forfeiture and restrictions on transfer determined by the Committee for a period of time determined by the Committee or until certain management objectives specified by the Committee are achieved. Each such grant or sale of restricted stock may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value per share of Common Stock on the date of grant.
Any grant of restricted stock may specify management objectives that, if achieved, will result in termination or early termination of the restrictions applicable to the restricted stock. Any grant of restricted stock will require that any and all dividends or distributions paid on restricted stock that remains subject to a substantial risk of forfeiture be automatically deferred and/or reinvested in additional restricted stock, which will be subject to the same restrictions as the underlying restricted stock. Any such dividends or other distributions on restricted stock will be deferred until, and paid contingent upon, the vesting of such restricted stock. Restricted stock may provide for continued vesting or the earlier termination of restrictions on such restricted stock, including in the event of retirement, death or disability of the participant or in the event of a change in control.
RSUs: RSUs awarded under the Amended 2018 Plan constitute an agreement by the company to deliver shares of Common Stock, cash, or a combination of the two, to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of management objectives) during the restriction period as the Committee may specify. Each grant or sale of RSUs may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value of shares of our Common Stock on the date of grant.
RSUs may provide for continued vesting or the earlier lapse or other modification of the restriction period, including in the event of retirement, death or disability of the participant or in the event of a change in control. During the restriction period applicable to RSUs, the participant will have no right to transfer any rights under the award and will have no rights of ownership in the shares of Common Stock underlying the RSUs and no right to vote them. Rights to dividend equivalents may be extended to and made part of any RSU award at the discretion of and on the terms determined by the Committee, on a deferred and contingent basis, either in cash or in additional shares of Common Stock, but dividend equivalents or other distributions on shares of Common Stock under the RSUs will be deferred until and paid contingent upon vesting of such RSUs. Each grant or sale of RSUs will specify the time and manner of payment of the RSUs that have been earned. An RSU may be paid in cash, shares of Common Stock or any combination of the two.
Cash Incentive Awards, Performance Shares, and Performance Units: Performance shares, performance units and cash incentive awards may also be granted to participants under the Amended 2018 Plan. A performance share is a bookkeeping entry that records the equivalent of one share of Common Stock, and a performance unit is a bookkeeping entry that records a unit equivalent to $1.00 or such other value as determined by the Committee. Each grant will specify the number or amount of performance shares or performance units, or the amount payable with respect to a cash incentive award being awarded, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
These awards, when granted under the Amended 2018 Plan, generally become payable to participants based on the achievement of specified management objectives and upon such terms and conditions as the Committee determines at the time of grant. Each grant may specify with respect to the management objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of performance shares or performance units, or the amount payable with respect to a cash incentive award, that will be earned if performance is at or above the minimum or threshold level or levels, or is at or above the target level or levels but falls short of maximum achievement. Each grant will specify the time and manner of payment of a cash incentive award, performance shares or performance units that have been earned. Any grant may specify that the amount payable with respect to such grant may be paid by the company in cash, in shares of Common Stock, in restricted stock or RSUs, or in any combination thereof.
Any grant of performance shares or performance units may provide for the payment of dividend equivalents in cash or in additional shares of Common Stock, subject to deferral and payment on a contingent basis based on the participant’s earning and vesting of the performance shares or performance units, as applicable, with respect to which such dividend equivalents are paid.
The performance period with respect to each cash incentive award or grant of performance shares or performance units will be a period of time determined by the Committee and within which the management objectives relating to such award are to be achieved. The performance period may be subject to continued vesting or earlier lapse or modification, including in the event of retirement, death or disability of the participant or in the event of a change in control.
Other Awards: Subject to applicable law and applicable share limits under the Amended 2018 Plan, the Committee may grant to any participant shares of Common Stock or such other awards (“Other Awards”) that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock or factors that may influence the value of such shares of Common Stock, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of Common Stock, awards with value and payment contingent upon performance of the company or specified subsidiaries, affiliates or other business units or any other factors designated by the Committee, and awards valued by reference to the book value of the shares of Common Stock or the value of securities of, or the performance of the subsidiaries, affiliates or other business units of the company. The terms and conditions of any such awards will be determined by the Committee. Shares of Common Stock delivered under an award in the nature of a purchase right granted under the Amended 2018 Plan will be purchased for such consideration, paid for at such time, by such methods, and in such forms,
including, without limitation, shares of Common Stock, other awards, notes or other property, as the Committee determines.
In addition, the Committee may grant cash awards, as an element of or supplement to any other awards granted under the Amended 2018 Plan. The Committee may also authorize the grant of shares of Common Stock as a bonus, or may authorize the grant of other awards in lieu of obligations of the company or a subsidiary to pay cash or deliver other property under the Amended 2018 Plan or under other plans or compensatory arrangements, subject to terms determined by the Committee in a manner that complies with Section 409A of the Code.
Other Awards may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such awards, including in the event of the retirement, death or disability of the participant or in the event of a change in control. The Committee may provide for the payment of dividends or dividend equivalents on Other Awards in cash or in additional shares of Common Stock, subject to deferral and payment on a contingent basis based on the participant’s earning and vesting of the Other Awards with respect to which such dividends or dividend equivalents are paid.
Change in Control: The Amended 2018 Plan includes a definition of “change in control.” In general, except as may be otherwise prescribed by the Committee with respect to an award under the Amended 2018 Plan, a change in control will be deemed to have occurred if, in general (subject to certain limitations and as further described in the Amended 2018 Plan): (1) a person or group becomes the beneficial owner of 50% or more of either the then-outstanding Common Stock or the combined voting power of the then-outstanding voting securities of the company entitled to vote generally in the election of directors; (2) individuals who constitute the Board as of the effective date of the Amended 2018 Plan cease for any reason to constitute at least a majority of the Board, unless their replacements are approved as described in the Amended 2018 Plan (subject to certain exceptions); (3) the company closes a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the company or any of our subsidiaries, a sale or other disposition of all or substantially all of our assets, or the acquisition of assets or securities of another entity by the company or a subsidiary, as further described in the Amended 2018 Plan (subject to certain exceptions); or (4) the company’s stockholders approve a complete liquidation or dissolution of the company.
Management Objectives: The Amended 2018 Plan provides that any of the awards set forth above may be granted subject to the achievement of specified management objectives. Management objectives are defined as the measurable performance objective or objectives established pursuant to the Amended 2018 Plan for participants who have received grants of performance shares, performance units or cash incentive awards or, when so determined by the Committee, stock options, SARs, restricted stock, RSUs, dividend equivalents or Other Awards, all as determined by the Committee. The management objectives may be based upon, but will not be limited to, one or more of the following goals:
developperformance criteria: earnings, cash flow, cash value added performance, stockholder return and/or value, revenues or revenue growth, operating profits (including earnings before interest, taxes, depreciation and/or amortization or variations thereof), net profits, earnings per share, stock price, cost reduction goals, debt ratios, financial return ratios, profit return and margins, market share, working capital, return on capital, safety, employee engagement, employee satisfaction, and other cultural improvement goals. The Committee may select one criterion or multiple criteria for measuring performance. Management objectives may be measured on company, subsidiary, business unit, business group, or corporate department performance, or on any combination thereof. Further, a
culturemanagement objective may be based on comparative performance with other companies or other external measures of the selected objective.Additionally, if the Committee determines that embodies a passionchange in the business, operations, corporate structure or capital structure of the company, or the manner in which it conducts its business, or other events or circumstances render the management objectives unsuitable, the Committee may in its discretion modify such management objectives or the acceptable levels of achievement, in whole or in part, as the Committee deems appropriate and equitable.
No Minimum Vesting Periods: The Amended 2018 Plan does not provide for our businessany minimum vesting periods.
Transferability of Awards: Except as otherwise provided by the Committee, no stock option, SAR, restricted stock, RSU, performance share, performance unit, cash incentive award, Other Award or dividend equivalents paid with respect to awards made under the Amended 2018 Plan will be transferrable by a participant except by will or the laws of descent and distribution. In no event will any such award granted under the Amended 2018 Plan be transferred for value. Except as otherwise determined by the Committee, stock options and SARs will be exercisable during the participant’s lifetime only by him or her or, in the event of the participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the participant in a drivefiduciary capacity under state law or court supervision.
The Committee may specify on the grant date that all or part of the shares of Common Stock that are subject to achieveawards under the Amended 2018 Plan will be subject to further restrictions on transfer, including minimum holding periods.
Adjustments; Corporate Transactions: The Committee will make or provide for such adjustments in: (1) the number and exceed established goalskind of shares of Common Stock covered by outstanding stock options, SARs, restricted stock, RSUs, performance shares and objectives;
provide leadershipperformance units granted under the Amended 2018 Plan; (2) if applicable, the number and kind of shares of Common Stock covered by Other Awards granted pursuant to the organizationAmended 2018 Plan; (3) the exercise price or base price provided in outstanding stock options and SARs, respectively; (4) cash incentive awards; and (5) other award terms, as the Committee in its sole discretion, exercised in good faith determines to maximizebe equitably required in order to prevent dilution or enlargement of the resultsrights of our business operations;
lead us by demonstrating forward thinkingparticipants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the
operation, developmentcapital structure of the company; (b) any merger, consolidation,spin-off,spin-out,split-off,split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities; or (c) any other corporate transaction or event having an effect similar to any of the foregoing.In the event of any such transaction or event, or in the event of a change in control of the company, the Committee may provide in substitution for any or all outstanding awards under the Amended 2018 Plan such alternative consideration (including cash), if any, as it may in good faith determine to be equitable under the circumstances and expansionwill require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each stock option or SAR with an exercise price or base price, respectively, greater than the consideration offered in connection with any such transaction or event or change in control of the company, the Committee may in its discretion elect to cancel such stock option or SAR without any payment to the person holding such stock option or SAR. The Committee will make or provide for such adjustments to the numbers of shares of Common Stock available under the Amended 2018 Plan and the share limits of the Amended 2018 Plan as the Committee in its sole discretion may in good faith determine to be appropriate in connection with such transaction or event. However, any adjustment to the limit on the number of shares of Common Stock that may be issued upon exercise of Incentive Stock Options will be made only if and to the extent such adjustment would not cause any option intended to qualify as an Incentive Stock Option to fail to so qualify.
Prohibition on Repricing: Except in connection with certain corporate transactions or changes in the capital structure of the company or in connection with a change in control, the terms of outstanding awards may not be amended to (1) reduce the exercise price or base price of outstanding stock options or SARs, respectively, or (2) cancel outstanding “underwater” stock options or SARs (including following a participant’s voluntary surrender of “underwater” stock options or SARs) in exchange for cash, other awards or stock options or SARs with an exercise price or base price, as applicable, that is less than the exercise price or base price of the original stock options or SARs, as applicable, without stockholder approval. The Amended 2018 Plan specifically provides that this provision is intended to prohibit the repricing of “underwater” stock options and SARs and that it may not be amended without approval by our business;stockholders.
Detrimental Activity and
effectively manage organizational resources Recapture: Any Evidence of Award may reference a clawback policy of the company or provide for the cancellation or forfeiture and repayment to deriveus of any gain related to an award, or other
provisions intended to have a similar effect, upon such terms and conditions as may be determined by the greatestCommittee from time to time, if any participant, either during employment or other service with us or a subsidiary or within a specified period after such employment or service, engages in any detrimental activity, as described in the applicable Evidence of Award or such clawback policy. In addition, any Evidence of Award or such clawback policy may provide for cancellation or forfeiture of an award or the forfeiture and repayment of any shares of Common Stock issued under and/or any other benefit related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be required by the Committee or under Section 10D of the Exchange Act and any applicable rules and regulations promulgated by the SEC or any national securities exchange or national securities association on which the shares of Common Stock may be traded.
Grants toNon-U.S. Based Participants: In order to facilitate the making of any grant or combination of grants under the Amended 2018 Plan, the Committee may provide for such special terms for awards to participants who are foreign nationals, who are employed by the company or any of its subsidiaries outside of the United States or who provide services to the company or any of its subsidiaries under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. The Committee may approve such supplements to, or amendments, restatements or alternative versions of, the Amended 2018 Plan (includingsub-plans) as it may consider necessary or appropriate for such purposes, provided that no such special terms, supplements, amendments or restatements will include any provisions that are inconsistent with the terms of the Amended 2018 Plan as then in effect unless the Amended 2018 Plan could have been amended to eliminate such inconsistency without further approval by our stockholders.
Withholding: To the extent the company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a participant or other person under the Amended 2018 Plan, and the amounts available to us for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the participant or such other person make arrangements satisfactory to the company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements, in the discretion of the Committee, may include relinquishment of a portion of such benefit. If a participant’s benefit is to be received in the form of shares of Common Stock, and such participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, we will withhold shares of Common Stock having a value possibleequal to the amount required to be withheld. When a participant is required to pay the company an amount required to be withheld under applicable income, employment, tax or other laws, the participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from each dollar invested.the shares required to be delivered to the participant, shares of Common Stock having a value equal to the amount required to be withheld or by delivering to us other shares of Common Stock held by such participant. The shares used for tax or other withholding will be valued at an amount equal to the fair market value of such shares of Common Stock on the date the benefit is to be included in the participant’s income. In no event will the fair market value of the shares of Common Stock to be withheld and delivered pursuant to the Amended 2018 Plan exceed the minimum amount required to be withheld, unless (i) an additional amount can be withheld and not result in adverse accounting consequences, (ii) such additional withholding amount is authorized by the Committee, and (iii) the total amount withheld does not exceed the participant’s estimated tax obligations attributable to the applicable transaction. Participants will also make such arrangements as the company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of shares of Common Stock acquired upon the exercise of stock options.
No Right to Continued Employment: The Amended 2018 Plan does not confer upon any participant any right with respect to continuance of employment or service with the company or any of its subsidiaries.
Effective Date of the Amended 2018 Plan: The Amended 2018 Plan will become effective on the date it is approved by the company’s stockholders.
Overall,Amendment and Termination of the Amended 2018 Plan: The Board generally may amend the Amended 2018 Plan from time to time in whole or in part. However, if any amendment, for purposes of applicable stock exchange rules (and except as permitted under the adjustment provisions of the Amended 2018 Plan) (1) would materially increase the benefits accruing to participants under the Amended 2018 Plan, (2) would materially increase the number of securities which may be issued under the Amended 2018 Plan, (3) would materially modify the requirements for participation in the Amended 2018 Plan, or (4) must otherwise be approved by our approachstockholders in order to comply with applicable law or Nasdaq rules, or, if the shares of Common Stock are not traded on Nasdaq, the principal national securities exchange upon which the shares of Common Stock are traded or quoted, all as determined by the Board, then such amendment will be subject to stockholder approval and will not be effective unless and until such approval has been obtained.
Further, subject to the Amended 2018 Plan’s prohibition on repricing, the Committee generally may amend the terms of any award prospectively or retroactively. Except in the case of certain adjustments permitted under the Amended 2018 Plan, no such amendment may be made that would materially impair the rights of any participant without his or her consent. If permitted by Section 409A of the Code and subject to certain other limitations set forth in the Amended 2018 Plan, including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances or in the event of a change in control, the Committee may provide for continued vesting or accelerate the vesting of certain awards granted under the Amended 2018 Plan.
The Board may, in its discretion, terminate the Amended 2018 Plan at any time. Termination of the Amended 2018 Plan will not affect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination. No grant will be made under the Amended 2018 Plan on or after May 30, 2028, the tenth anniversary of the date the 2018 Plan was approved by the company’s stockholders, but all grants made prior to such date will continue in effect thereafter subject to their terms and the terms of the Amended 2018 Plan.
Stock Plan Benefits
The terms and number of awards to be granted in the future under the Amended 2018 Plan are to be determined in the discretion of the Committee. Because no such determinations have been made, the benefits or amounts that will be received by or allocated to the company’s executive officers, directors or other eligible employees cannot be determined at this time, although the company intends to make awards to such groups under the Amended 2018 Plan consistent with its existing compensation practices. Therefore, the New Plan Benefits Table is designed to link the compensationnot provided.
The following table sets forth, for each of our named executive officers, each person who has been granted 5% or more of the total amount of awards granted under the 2018 Plan, and certain groups, the number of shares of our Common Stock that are subject to outstanding stock option grants under the 2018 Plan as of May 20, 2020. No other person has been granted 5% or more of the total amount of awards granted under the 2018 Plan, and no stock option awards have been granted under the 2018 Plan to any associate of anon-employee director, nominee or executive officer.
2018 Plan Stock Options
| | | | |
| | Number of Shares of
Common Stock
Subject to 2018 Plan
Stock Options | |
William Livek | | | 300,000 | |
Dale Fuller | | | — | |
Bryan Wiener | | | — | |
Gregory Fink | | | — | |
Carol DiBattiste | | | — | |
Christopher Wilson | | | 150,000 | |
Sarah Hofstetter | | | — | |
Kathryn Bachmann | | | — | |
Carol Hinnant | | | 100,000 | |
All current executive officers as a group | | | 450,000 | |
All currentnon-executive directors as a group (1) | | | — | |
All currentnon-executive employees, including all current officers who are not executive officers, as a group | | | 150,000 | |
| (1) | Includes Jacques Kerrest and Kathleen Love, who are current directors nominated for election at the 2020 Annual Meeting. Neither Mr. Kerrest nor Ms. Love holds any outstanding stock option awards. |
U.S. Federal Income Tax Consequences
The following is a brief summary of certain of the U.S. federal income tax consequences of certain transactions under the Amended 2018 Plan based on federal income tax laws currently in effect. This summary, which is presented for the information of stockholders considering how to vote on this proposal and not for Amended 2018 Plan participants, is not intended to be complete and does not describe federal taxes other than income taxes (such as Medicare and Social Security taxes) or state, local or foreign tax consequences.
Tax Consequences to Participants
Restricted Stock: The recipient of restricted stock generally will be subject to tax at ordinary income rates on the fair market value of the restricted stock (reduced by any amount paid by the recipient for such restricted stock) at such time as the shares of restricted stock are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code (“Restrictions”). However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the following:excess of the achievementfair market value of such shares (determined without regard to the Restrictions) over the purchase price, if any, of such restricted stock. If a Section 83(b) election has not been made, any dividends received with respect to restricted stock that are subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the recipient.
Performance Shares, Performance Units and Cash Incentive Awards: No income generally will be recognized upon the grant of performance shares, performance units or cash incentive awards. Upon payment in respect of theearn-out of performance shares, performance units or cash incentive awards, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any unrestricted shares of Common Stock received.
Nonqualified Stock Options:In general:
no income will be recognized by an optionee at the time anon-qualified stock option is granted;
at the time of exercise of anon-qualified stock option, ordinary income will be recognized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise; and
at the time of sale of shares acquired pursuant to the exercise of anon-qualified stock option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.
Incentive Stock Options:No income generally will be recognized by an optionee upon the grant or exercise of an Incentive Stock Option. If shares of Common Stock are issued to the optionee pursuant to the exercise of an Incentive Stock Option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the option price will be taxed to the optionee as a long-term goalscapital gain and objectives; their willingnessany loss sustained will be a long-term capital loss.
If shares of Common Stock acquired upon the exercise of an Incentive Stock Option are disposed of prior to challengethe expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.
SARs: No income will be recognized by a participant in connection with the grant of a SAR. When the SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and improve existing policiesthe fair market value of any unrestricted shares of Common Stock received on the exercise.
RSUs:No income generally will be recognized upon the award of RSUs. The recipient of an RSU award generally will be subject to tax at ordinary income rates on the fair market value of unrestricted shares of Common Stock on the date that such shares are transferred to the participant under the award (reduced by any amount paid by the participant for such RSUs), and structures;the capital gains/loss holding period for such shares will also commence on such date.
Tax Consequences to the Company or its Subsidiaries
To the extent that a participant recognizes ordinary income in the circumstances described above, the company or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and their capabilitynecessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code and is not disallowed by the $1 million deduction limitation on certain executive compensation under Section 162(m) of the Code.
Registration with the SEC
We intend to take advantagefile a Registration Statement onForm S-8 relating to the issuance of unique opportunities and overcome difficult challenges within our business.
The Company requests stockholdershares of Common Stock under the Amended 2018 Plan with the SEC pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the Amended 2018 Plan by our stockholders.
Equity Compensation Plan Information
The closing price of a share of our Common Stock as reported by Nasdaq on May 20, 2020 was $2.85. The following table summarizes our equity compensation plans as of comScore’s namedexecutive officers for the year ended December 31, 2014, as disclosed pursuant toSEC rules, including the Compensation Discussion and Analysis, the executivecompensation tables, and related narrative disclosures included in this proxystatement.
2019: | | | | | | | | | | | | |
Plan Category | | Number of Securities to
be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(a) (1) | | | Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b) (2) | | | Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column
(a)) (c) (3) | |
Equity compensation plans approved by security holders | | | 4,293,580 | | | $ | 11.27 | | | | 1,871,778 | |
Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Total | | | 4,293,580 | | | $ | 11.27 | | | | 1,871,778 | |
| | | | | | | | | | | | |
| (1) | This column reflects (i) all shares subject to time-based RSUs and deferred stock units that were outstanding as of December 31, 2019, (ii) the maximum number of shares subject to PRSUs that were outstanding as of December 31, 2019, and (iii) all shares subject to outstanding stock options as of December 31, 2019. If actual performance under the PRSUs falls below the maximum level for these awards, fewer shares would be issued. |
| (2) | The weighted average exercise price reflected in this column is calculated based solely on the exercise prices of outstanding options and does not take into account time-based RSUs, deferred stock units or PRSUs, which do not have an exercise price. |
| (3) | This column reflects the total number of shares remaining available for issuance under our 2018 Equity and Incentive Compensation Plan as of December 31, 2019, assuming the maximum number of shares subject to outstanding PRSUs is no longer available for issuance. If actual performance under these PRSUs falls below the maximum level for these awards, a greater number of shares would be available for issuance under the plan. |
Required Vote
You may vote for or against this foregoing Proposal No. 3,4, or you may abstain. Approval of this proposal requires the affirmative “FOR” vote (“FOR”) of a majority of the shares present in person or represented by proxy at our 2015the 2020 Annual Meeting and entitled to vote thereon. Abstentions will have the same effect as a vote against this proposal. Because this vote is advisory, itBrokernon-votes will not be binding upon our Board of Directors. However, our Board of Directors and our Compensation Committee will considerhave no effect on the outcome of the vote, along with other relevant factors, in evaluating its executive compensation program.
this proposal.Recommendation of Our Board of Directors
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
PROPOSAL NO. 3.4.
* * * * *
OTHER INFORMATION
Other Matters to be Presented at the Annual Meeting
We do not know of any matters to be presented at our 20152020 Annual Meeting other than those described in this proxy statement. If any other matters are properly brought before the annual meeting, proxies will be voted in accordance with the best judgment of the person or persons voting the proxies.
Security Holder Communication with Board Members
Any holder of our common stockCommon Stock may contact the Board, of Directors, a Committeecommittee of the Board of Directors or a specified individual director by writing to the attention of the Board of Directors (or a specified individual director or Committee)committee) and sending such communication to the attention of our Corporate Secretary at our executive offices as identified in this proxy statement. Each communication from a stockholder should include the following information in order to permit us to confirm your status as a security holder and enable us to send a response if deemed appropriate:
the name, mailing address and telephone number of the security holder sending the communication;
the number and type of our securities owned by such security holder; and
if the security holder is not a record owner of our securities, the name of the record owner of our securities beneficially owned by the security holder.
Our Corporate Secretary will forward all appropriate communications to the Board, of Directors, the applicable Committeecommittee of the Board of Directors or individual members of the Board of Directors as specified in the communication. Our Corporate Secretary may, but is not required to, review all correspondence addressed to the Board, of Directors, a Committeecommittee of the Board of Directors or any individual member of the Board, of Directors, for any inappropriate correspondence more suitably directed to management.
ANNUAL MEETING OF STOCKHOLDERS OF
2018 EQUITY AND INCENTIVE COMPENSATION PLAN
(as Amended and Restated Effective as of July 21, 2015
GO GREEN
e-Consent makes it easy9, 2020)1. Purpose; Prior Plan. The purpose of this Plan is to go paperless. With e-Consent, you can quickly access your proxy material, statementsattract and retainnon-employee Directors, Employees and certain consultants to the Company and its Subsidiaries, and to provide to such persons incentives and rewards for service and/or performance. The Plan as set forth herein constitutes an amendment and restatement of the Company’s 2018 Equity and Incentive Compensation Plan as in effect immediately prior to the Effective Date (the “Prior Plan”). This Plan shall supersede and replace in its entirety the Prior Plan; provided, however, that notwithstanding any provisions herein to the contrary, except for the provisions of Section 3(a), each award granted under the Prior Plan prior to the Effective Date shall be subject to the terms and provisions applicable to such award under the Prior Plan as in effect immediately prior to the Effective Date.
2. Definitions. As used in this Plan:
(a) “Appreciation Right” means a right granted pursuant toSection 5 of this Plan.
(b) “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of an Appreciation Right.
(c) “Board” means the Board of Directors of the Company.
(d) “Cash Incentive Award” means a cash award granted pursuant toSection 8 of this Plan.
(e) “Change in Control” has the meaning set forth inSection 12 of this Plan.
(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(g) “Committee” means the Compensation Committee of the Board (or its successor(s)), or any other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.comcommittee of the Board designated by the Board to enjoy online access.
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS:
The Noticeadminister this Plan pursuant toSection 10 of Meeting, Proxy Statement, Proxy Card, and Annual Report
are available at http://www.astproxyportal.com/ast/25890
Please sign, date and mail
your proxy cardthis Plan.(h) “Common Stock” means the common stock, par value $0.001 per share, of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type referred to in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COMSCORE, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 21, 2015
The undersigned stockholderSection 11 of this Plan.(i) “Company” means comScore, Inc., a Delaware corporation, (the "Company"), hereby acknowledges receiptand its successors.
(j) “Date of Grant” means the date provided for by the Committee on which a grant of Option Rights, Appreciation Rights, Performance Shares, Performance Units, Cash Incentive Awards, or other awards contemplated bySection 9 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or other awards contemplated bySection 9 of this Plan, will become effective (which date will not be earlier than the date on which the Committee takes action with respect thereto).
(k) “Director” means a member of the NoticeBoard.
(l) “Effective Date” means July 9, 2020, the date on which this amendment and restatement of Annual Meetingthe Plan was approved by the Stockholders.
(m) “Employee” means any person, including officers and Directors, employed by the Company or any Subsidiary. Neither service as a Director nor payment of Stockholdersa director’s fee by the Company will be sufficient to constitute “employment” by the Company or any Subsidiary.
(n) “Evidence of Award” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee that sets forth the terms and conditions of the awards granted under this Plan. An Evidence of Award may be heldin an electronic medium, may be limited to notation on July 21, 2015the books and accompanying Proxy Statementrecords of the Company and, hereby appoints Magid M. Abrahamunless otherwise determined by the Committee, need not be signed by a representative of the Company or a Participant.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and Serge Matta,the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(p) “Incentive Stock Option” means an Option Right that is intended to qualify as an “incentive stock option” under Section 422 of the Code or any successor provision.
(q) “Management Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend equivalents or other awards pursuant to this Plan. The Management Objectives shall be determined by the Committee and may be based upon, but shall not be limited to, one or more of them, proxiesthe following performance criteria: earnings, cash flow, cash value added performance, stockholder return and/or value, revenues or revenue growth, operating profits (including earnings before interest, taxes, depreciation and/or amortization or variations thereof), net profits, earnings per share, stock price, cost reduction goals, debt ratios, financial return ratios, profit return and attorneys-in-fact, eachmargins, market share, working capital, return on capital, safety, employee engagement, employee satisfaction, and other cultural improvement goals. The Committee may select one criterion or multiple criteria for measuring performance. Management Objectives may be measured on Company, Subsidiary, business unit, business group, or corporate department performance, or on any combination thereof. Further, a Management Objective may be based on comparative performance with full powerother companies or other external measures of substitution, to represent the undersigned atselected objective. If the Annual MeetingCommittee determines that a change in the business, operations, corporate structure or capital structure of Stockholdersthe Company, or the manner in which it conducts its business, or other events or circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the acceptable levels of comScore, Inc. toachievement, in whole or in part, as the Committee deems appropriate and equitable.
(r) “Market Value per Share” means, as of any particular date, if the Common Stock is listed on any established stock exchange or traded on any established market, and unless otherwise determined by the Committee, the closing price of a share of Common Stock as quoted on such exchange or market on the date of determination, as reported in a source the Committee deems reliable. If there is no closing price for the Common Stock on the particular date, then the Market Value per Share will be heldthe closing price on July 21, 2015 at 11:15 a.m., local time at the Company's office at 11950 Democracy Drive, Suite 600, Reston, Virginia 20190 and at any adjournment thereof, and to vote alllast preceding date for which such quotation exists. If there is no regular public trading market for the shares of Common Stock, then the Market Value per Share shall be the fair market value as determined in good faith by the Committee. The Committee is authorized to adopt another fair market value pricing method provided such method is stated in the applicable Evidence of Award and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.
(s) “Optionee” means the optionee named in an Evidence of Award evidencing an outstanding Option Right.
(t) “Option Price” means the purchase price payable on exercise of an Option Right.
(u) “Option Right” means the right to purchase shares of Common Stock upon exercise of an award granted pursuant toSection 4 of this Plan.
(v) “Participant” means a person who is selected by the Committee to receive benefits under this Plan and who is at the time (i) an Employee, including a person who has agreed to commence serving in such capacity within 90 days of the Date of Grant, (ii) a consultant (provided that such person satisfies the FormS-8 definition of “employee”), or (iii) anon-employee Director.
(w) “Performance Period” means, in respect of a Cash Incentive Award, Performance Share or Performance Unit, a period of time established pursuant toSection 8 of this Plan within which the Management Objectives relating to such Cash Incentive Award, Performance Share or Performance Unit are to be achieved.
(x) “Performance Share” means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant toSection 8 of this Plan.
(y) “Performance Unit” means a bookkeeping entry awarded pursuant toSection 8 of this Plan that records a unit equivalent to $1.00 or such other value as is determined by the Committee.
(z) “Person” means any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
(aa) “Plan” means this comScore, Inc. 2018 Equity and Incentive Compensation Plan, as may be amended or amended and restated from time to time.
(bb) “Predecessor Plan” means the comScore, Inc. 2007 Equity Incentive Plan, as amended and restated from time to time.
(cc) “Prior Plan” has the meaning set forth inSection 1 of the Plan.
(dd) “Restricted Stock” means shares of Common Stock granted or sold pursuant toSection 6 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers has expired.
(ee) “Restricted Stock Units” means an award made pursuant toSection 7 of this Plan of the right to receive shares of Common Stock, cash or a combination thereof at the end of the applicable Restriction Period.
(ff) “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided inSection 7 of this Plan.
(gg) “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the Base Price provided for with respect to the Appreciation Right.
(hh) “Stockholder” means an individual or entity that owns one or more shares of Common Stock.
(ii) “Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company;provided,however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” shall be determined in accordance with Section 424(f) of the Code or any successor provision.
3. Shares Available Under this Plan.
| (a) | Maximum Shares Available Under this Plan. |
| (i) | Subject to adjustment as provided inSection 11 of this Plan and the share counting rules set forth inSection 3(b) of this Plan, the number of shares of |
| Common Stock available under this Plan for awards of (A) Option Rights or Appreciation Rights, (B) Restricted Stock, (C) Restricted Stock Units, (D) Performance Shares or Performance Units, (E) awards contemplated bySection 9 of this Plan, (F) dividend equivalents paid with respect to awards made under this Plan, or (G) awards corresponding to those described in the preceding clauses (A) through (F) that were made under the Prior Plan will not exceed in the aggregate 20,250,000 shares of Common Stock. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. |
| (ii) | The aggregate number of shares of Common Stock available underSection 3(a)(i) of this Plan will be reduced by (A) one share of Common Stock for every one share of Common Stock subject to an award of Option Rights or Appreciation Rights granted under this Plan or the Prior Plan, and (B) two shares of Common Stock for every one share of Common Stock subject to an award other than of Option Rights or Appreciation Rights granted under this Plan or the Prior Plan. |
| (i) | Except as provided inSection 22 of this Plan, if any award granted under this Plan or the Prior Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available underSection 3(a)(i) above (at a rate of one share of Common Stock for every one share of Common Stock subject to awards of Option Rights or Appreciation Rights and two shares of Common Stock for every one share of Common Stock subject to awards other than of Option Rights or Appreciation Rights). |
| (ii) | If, after December 31, 2017, any shares of Common Stock subject to an award granted under the Predecessor Plan are forfeited, or an award granted under the Predecessor Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, be available for awards under the Prior Plan or this Plan, as applicable (at a rate of one share of Common Stock for every one share of Common Stock subject to such award). |
| (iii) | Notwithstanding anything to the contrary contained in this Plan: (A) shares of Common Stock withheld by the Company, tendered or otherwise used in payment of the Option Price of an Option Right (whether granted under this Plan or the Prior Plan) or the Base Price of an Appreciation Right (whether granted under this Plan or the Prior Plan) will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available underSection 3(a)(i) of this Plan; (B) shares of Common Stock withheld by the Company, tendered or otherwise used to satisfy tax withholding with respect to awards (whether granted under this Plan or the Prior Plan) other than as described in clause (C) will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available underSection 3(a)(i) of this Plan; (C) shares of Common Stock withheld by the Company, tendered or otherwise used prior to the expiration of this Plan |
| to satisfy tax withholding with respect to awards (whether granted under this Plan or the Prior Plan) other than Option Rights or Appreciation Rights shall be added back (but only to the extent such withholding did not exceed the minimum amounts of tax required to be withheld) to the aggregate number of shares of Common Stock available underSection 3(a)(i) of this Plan; (D) shares of Common Stock subject to an Appreciation Right (whether granted under this Plan or the Prior Plan) that are not actually issued in connection with the settlement of such Appreciation Right on the exercise thereof, will not be added back to the aggregate number of shares of Common Stock available underSection 3(a)(i) of this Plan; and (E) shares of Common Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights (whether granted under this Plan or the Prior Plan) will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available underSection 3(a)(i) of this Plan. |
| (iv) | If, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for shares of Common Stock based on fair market value, such shares of Common Stock will not count against the aggregate limit underSection 3(a)(i) of this Plan. |
(c) Limit on Incentive Stock Options. Notwithstanding anything to the contrary contained in this Plan, and subject to adjustment as provided inSection 11 of this Plan, the aggregate number of shares of Common Stock actually issued or transferred by the Company upon the exercise of Incentive Stock Options (whether granted under this Plan or the Prior Plan) will not exceed 20,250,000 shares of Common Stock.
(d) Individual Director Limit. Notwithstanding anything to the contrary contained in this Plan, and subject to adjustment as provided inSection 11 of this Plan, in no event will anynon-employee Director in any one calendar year be granted compensation for such service having an aggregate maximum value (measured at the Date of Grant as applicable, and calculating the value of any awards under this Plan based on the grant date fair value for financial reporting purposes) in excess of $900,000.
4. Option Rights. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Participants of Option Rights. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number of shares of Common Stock to which it pertains subject to the limitations set forth inSection 3 of this Plan.
(b) Each grant will specify an Option Price per share of Common Stock, which (except with respect to awards underSection 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable (i) in cash, by check acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of shares of Common Stock owned by the Optionee having a value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, by the withholding of shares of Common Stock otherwise issuable upon exercise of an Option Right pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the shares of Common Stock so withheld will not be treated as issued and acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee.
(d) To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the shares of Common Stock to which such exercise relates.
(e) Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.
(f) Each grant will specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary, if any, that is necessary before any Option Rights or installments thereof will become exercisable. Option Rights may provide for continued vesting or the earlier exercise of such Option Rights, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control.
(g) Any grant of Option Rights may specify Management Objectives that must be achieved as a condition to the exercise of such rights.
(h) Option Rights granted under this Plan may be (i) options, including Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii) options that are not intended to so qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code.
(i) No Option Right will be exercisable more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for the automatic exercise of an Option Right upon such terms and conditions as established by the Committee.
(j) Option Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(k) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
5. Appreciation Rights.
(a) The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to any Participant of Appreciation Rights. An Appreciation Right will be the right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise.
(b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
| (i) | Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the Company in cash, shares of Common Stock or any combination thereof. |
| (ii) | Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Committee on the Date of Grant. |
| (iii) | Any grant may specify waiting periods before exercise and permissible exercise dates or periods. |
| (iv) | Each grant will specify the period or periods of continuous service by the Participant with the Company or any Subsidiary, if any, that is necessary |
| before the Appreciation Rights or installments thereof will become exercisable. Appreciation Rights may provide for continued vesting or the earlier exercise of such Appreciation Rights, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control. |
| (v) | Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights. |
| (vi) | Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon. |
| (vii) | Successive grants of Appreciation Rights may be made to the same Participant regardless of whether any Appreciation Rights previously granted to the Participant remain unexercised. |
| (viii) | Each grant of Appreciation Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. |
(c) Also, regarding Appreciation Rights:
| (i) | Each grant will specify in respect of each Appreciation Right a Base Price, which (except with respect to awards underSection 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant; and |
| (ii) | No Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for the automatic exercise of an Appreciation Right upon such terms and conditions as established by the Committee. |
6. Restricted Stock. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the grant or sale of Restricted Stock to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter described.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Stock covered by such grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of Grant or until achievement of Management Objectives referred to inSection 6(e) of this Plan.
(d) Each such grant or sale will provide that during or after the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Date of Grant (which restrictions may include rights of repurchase or first refusal of the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture while held by any transferee).
(e) Any grant of recordRestricted Stock may specify Management Objectives that, if achieved, will result in termination or early termination of the restrictions applicable to such Restricted Stock.
(f) Notwithstanding anything to the contrary contained in this Plan, Restricted Stock may provide for continued vesting or the earlier termination of restrictions on such Restricted Stock, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control.
(g) Any such grant or sale of Restricted Stock will require that any and all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and/or reinvested in additional Restricted Stock, which will be subject to the same restrictions as the underlying award. For the avoidance of doubt, any such dividends or other distributions on Restricted Stock will be deferred until, and paid contingent upon, the vesting of such Restricted Stock.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Unless otherwise directed by the undersignedCommittee, (i) all certificates representing Restricted Stock will be held in custody by the Company until all restrictions thereon will have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares or (ii) all Restricted Stock will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Stock.
7. Restricted Stock Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company to deliver shares of Common Stock or cash, or a combination thereof, to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of Management Objectives) during the Restriction Period as the Committee may specify.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c) Notwithstanding anything to the contrary contained in this Plan, Restricted Stock Units may provide for continued vesting or the earlier lapse or other modification of the Restriction Period, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control.
(d) During the Restriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the shares of Common Stock deliverable upon payment of the Restricted Stock Units and will have no right to vote them, but the Committee may, at or after the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on a deferred and contingent basis, either in cash or in additional shares of Common Stock;provided, however, that dividend equivalents or other distributions on shares of Common Stock underlying Restricted Stock Units will be deferred until and paid contingent upon the vesting of such Restricted Stock Units.
(e) Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock Units that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be paid by the Company in shares of Common Stock or cash, or a combination thereof.
(f) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
8. Cash Incentive Awards, Performance Shares and Performance Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number or amount of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Cash Incentive Award or grant of Performance Shares or Performance Units will be such period of time as will be determined by the Committee, which may be subject to continued vesting or earlier lapse or other modification, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control.
(c) Each grant of a Cash Incentive Award, Performance Shares or Performance Units will specify Management Objectives which, if achieved, will result in payment or early payment of the award, and each grant may specify in respect of such specified Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, that will be earned if performance is at or above the minimum or threshold level or levels, or is at or above the target level or levels, but falls short of maximum achievement of the specified Management Objectives.
(d) Each grant will specify the time and manner of payment of a Cash Incentive Award, Performance Shares or Performance Units that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in shares of Common Stock, in Restricted Stock or Restricted Stock Units or in any combination thereof.
(e) Any grant of a Cash Incentive Award, Performance Shares or Performance Units may specify that the amount payable or the number of shares of Common Stock, Restricted Stock or Restricted Stock Units payable with respect thereto may not exceed a maximum specified by the Committee on the Date of Grant.
(f) The Committee may, on the Date of Grant of Performance Shares or Performance Units, provide for the payment of dividend equivalents to the holder thereof either in cash or in additional shares of Common Stock, subject in all cases to deferral and payment on a contingent basis based on the Participant’s earning and vesting of the Performance Shares or Performance Units, as applicable, with respect to which such dividend equivalents are paid.
(g) Each grant of a Cash Incentive Award, Performance Shares or Performance Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
9. Other Awards.
(a) Subject to applicable law and the applicable limits set forth inSection 3 of this Plan, the Committee may authorize the grant to any Participant of shares of Common Stock or such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or relating to, shares of Common Stock or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of Common Stock, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and awards valued by reference to the book value of the shares of Common Stock or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms and conditions of such awards. Shares of
Common Stock delivered pursuant to an award in the nature of a purchase right granted under thisSection 9 will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, shares of Common Stock, other awards, notes or other property, as the Committee determines.
(b) Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to thisSection 9.
(c) The Committee may authorize the grant of shares of Common Stock as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code.
(d) The Committee may, at or after the Date of Grant, authorize the payment of dividends or dividend equivalents on awards granted under thisSection 9 on a deferred and contingent basis, either in cash or in additional shares of Common Stock;provided,however, that dividend equivalents or other distributions on shares of Common Stock underlying awards granted under thisSection 9 will be deferred until and paid contingent upon the earning and vesting of such awards.
(e) The Evidence of Award will specify the time and terms of delivery of an award granted under thisSection 9.
(f) Notwithstanding anything to the contrary contained in this Plan, awards under thisSection 9 may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such award, including in the event of the retirement, death or disability of a Participant or in the event of a Change in Control.
10. Administration of this Plan.
(a) This Plan will be administered by the Committee. The Committee may from time to time delegate all or any part of its authority under this Plan to a subcommittee thereof. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee.
(b) The interpretation and construction by the Committee of any provision of this Plan or of any Evidence of Award (or related documents) and any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee.
(c) To the extent permitted by law, the Committee may delegate to one or more of its members, to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as the Committee: (i) designate employees to be recipients of awards under this Plan; and (ii) determine the size of any such awards;provided,however, that (A) the Committee will not delegate such responsibilities to any such officer for awards granted to an employee who is an officer, Director, or more than 10% “beneficial owner” (as such term is defined in Rule13d-3 promulgated under the Exchange Act) of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act; (B) the resolution providing for such authorization shall set forth the total number of shares of Common Stock such officer(s) may grant; and (C) the officer(s) will report periodically to the Committee regarding the nature and scope of the awards granted pursuant to the authority delegated.
11. Adjustments. The Committee shall make or provide for such adjustments in the number of and kind of shares of Common Stock covered by outstanding Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units granted hereunder and, if applicable, in the number of and kind of shares of Common Stock covered by other awards granted pursuant toSection 9 of this Plan, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, respectively, in Cash Incentive Awards, and in other award terms, as the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any merger, consolidation,spin-off,split-off,spin-out,split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee may provide in substitution for any or all outstanding awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and shall require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price, respectively, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its discretion elect to cancel such Option Right or Appreciation Right without any payment to the Person holding such Option Right or Appreciation Right. The Committee shall also make or provide for such adjustments in the number of shares of Common Stock specified inSection 3 of this Plan as the Committee in its sole discretion, exercised in good faith, determines is appropriate to reflect any transaction or event described in thisSection 11;provided,however, that any such adjustment to the number specified inSection 3(c) of this Plan will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to so qualify.
12. Change in Control. For purposes of this Plan, except as may be otherwise prescribed by the Committee with respect to an award made under this Plan, a “Change in Control” will be deemed to have occurred upon the occurrence (after the Effective Date) of any of the following events:
(a) any Person becomes the beneficial owner (within the meaning of Rule13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then-outstanding Common Stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of Directors (the “Outstanding Company Voting Securities”);provided,however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition pursuant to a transaction that complies withSections 12(c)(i),(c)(ii) and(c)(iii) below;
(b) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;provided,however, that any individual becoming a Director subsequent to the Effective Date whose election, or nomination for election by the Stockholders, was approved by a vote of a majority of the Directors then comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of the Company in which such individual is named as a nominee for Director, without objection to such nomination) shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(c) consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its Subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its Subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for anon-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for anon-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock (or, for anon-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors (or, for anon-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(d) approval by the Stockholders of a complete liquidation or dissolution of the Company.
13. Detrimental Activity and Recapture Provisions. Any Evidence of Award may reference a clawback policy of the Company or provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee from time to time, if a Participant, either (a) during employment or other service with the Company or a Subsidiary, or (b) within a specified period after termination of such employment or service, engages in any detrimental activity, as described in the applicable Evidence of Award or such clawback policy. In addition, notwithstanding anything in this Plan to the contrary, any Evidence of Award or such clawback policy may also provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any shares of Common Stock issued under and/or any other benefit related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be required by the Committee or under Section 10D of the Exchange Act and any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the shares of Common Stock may be traded.
14. Non-U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide services to the Company or any Subsidiary under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (includingsub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders.
15. Transferability.
(a) Except as otherwise determined by the Committee, no Option Right, Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award, award contemplated bySection 9 of this Plan or dividend equivalents paid with respect to awards made under this Plan will be transferable by the Participant except by will or the laws of descent and distribution. In no event will any such award granted under this Plan be transferred for value. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law or court supervision.
(b) The Committee may specify on the Date of Grant that part or all of the shares of Common Stock that are (i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to inSection 6 of this Plan, will be subject to further restrictions on transfer, including minimum holding periods.
16. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a Participant or other Person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other Person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of shares of Common Stock, and such Participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, the Company will withhold shares of Common Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable income, employment, tax or other laws, the Participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares of Common Stock required to be delivered to the Participant, shares of Common Stock having a value equal to the amount required to be withheld or by delivering to the Company other shares of Common Stock held by such Participant. The shares of Common Stock used for tax or other withholding will be valued at an amount equal to the fair market value of such shares of Common Stock on the date the benefit is to be included in Participant’s income. In no event will the fair market value of the shares of Common Stock to be withheld and delivered pursuant to thisSection 16 exceed the minimum amount required to be withheld, unless (i) an additional amount can be withheld and not result in adverse accounting consequences, (ii) such additional withholding amount is authorized by the Committee, and (iii) the total amount withheld does not exceed the Participant’s estimated tax obligations attributable to the applicable transaction. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of shares of Common Stock acquired upon the exercise of Option Rights.
17. Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.
(b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this
Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owed by a Participant to the Company or any of its Subsidiaries.
(c) If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to thesix-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the first business day of the seventh month after such separation from service.
(d) Solely with respect to any award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation§1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such award.
(e) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
18. Amendments.
(a) The Board may at any time and from time to time amend this Plan in whole or in part;provided,however, that if an amendment to this Plan, for purposes of applicable stock exchange rules and except as permitted underSection 11 of this Plan, (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan, or (iv) must otherwise be approved by the Stockholders in order to comply with applicable law or the rules of the NASDAQ Stock Market or, if the shares of Common Stock are not traded on the NASDAQ Stock Market, the principal national securities exchange upon which the shares of Common Stock are traded or quoted, all as determined by the Board, then, such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained.
(b) Except in connection with a corporate transaction or event described inSection 11 of this Plan or in connection with a Change in Control, the terms of outstanding awards may not be amended to reduce the Option Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding “underwater” Option Rights or Appreciation Rights (including following a Participant’s voluntary surrender of “underwater” Option Rights or Appreciation Rights) in exchange for cash, other awards or Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the
Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without Stockholder approval. ThisSection 18(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for inSection 11 of this Plan. Notwithstanding any provision of this Plan to the contrary, thisSection 18(b) may not be amended without approval by the Stockholders.
(c) If permitted by Section 409A of the Code, but subject to the paragraph that follows, including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances or in the event of a Change in Control, to the extent a Participant holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any dividend equivalents or other awards made pursuant toSection 9 of this Plan subject to any vesting schedule or transfer restriction, or who holds shares of Common Stock subject to any transfer restriction imposed pursuant toSection 15(b) of this Plan, the Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such Option Right, Appreciation Right or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Cash Incentive Awards, Performance Shares or Performance Units will be deemed to have been fully earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award.
(d) Subject toSection 18(b) of this Plan, the Committee may amend the terms of any award theretofore granted under this Plan prospectively or retroactively. Except for adjustments made pursuant toSection 11 of this Plan, no such amendment will materially impair the rights of any Participant without his or her consent. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any awards outstanding hereunder and not exercised in full on the date of termination.
19. Governing Law. This Plan and all grants and awards and actions taken hereunder will be governed by and construed in accordance with the internal substantive laws of the State of Delaware.
20. Effective Date/Termination. This amended and restated Plan was adopted by the Board on May 26, 2020, and is subject to approval by the Stockholders at the 2020 annual meeting of the Stockholders. If this amendment and restatement is not so approved by the Stockholders, then this amendment and restatement shall be voidab initio, and the Prior Plan shall continue in effect as if this amendment and restatement had not occurred, and any awards previously granted under the Prior Plan shall continue in effect under the terms of the grant and the Prior Plan;provided, that thereafter awards may continue to be granted pursuant to the terms of the Prior Plan, as in effect prior to this amendment and restatement and as may be otherwise amended thereafter. This amended and restated Plan shall become effective on the Effective Date if it is approved on such date by the Stockholders. No grants will be made on or after May 30, 2018 under the Predecessor Plan,providedthat outstanding awards granted under the Predecessor Plan will continue unaffected following such date. No grant will be made under this Plan on or after May 30, 2028, the tenth anniversary of the date the Prior Plan was approved by the Stockholders, but all grants made prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan.
21. Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional shares of Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.
(b) This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right
the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.
(c) Except with respect toSection 21(e) of this Plan, to the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of this Plan.
(d) No award under this Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan.
(e) Absence on leave approved by a duly constituted officer of the Company or any of its Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or awards granted hereunder.
(f) No Participant will have any rights as a Stockholder with respect to any shares of Common Stock subject to awards granted to him or her under this Plan prior to the date as of which he or she is actually recorded as the holder of such shares of Common Stock upon the stock records of the Company.
(g) The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
(h) Except with respect to Option Rights and Appreciation Rights, the Committee may permit Participants to elect to defer the issuance of shares of Common Stock under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred issuances and settlements include the crediting of dividend equivalents or interest on the deferral amounts.
(i) If any provision of this Plan is or becomes invalid or unenforceable in any jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect. Notwithstanding anything in this Plan or an Evidence of Award to the contrary, nothing in this Plan or in an Evidence of Award prevents a Participant from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity a Participant is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.
22. Stock-Based Awards in Substitution for Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary:
(a) Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for shares of Common Stock substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.
(b) In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under apre-existing plan previously approved by stockholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for awards made after such acquisition or merger under this Plan;provided,however, that awards using such available shares may not be made after the date awards or grants could have been made under the terms of thepre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.
(c) Any shares of Common Stock that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company underSections 22(a) or22(b) of this Plan will not reduce the shares of Common Stock available for issuance or transfer under this Plan or otherwise count against the limits contained inSection 3 of this Plan. In addition, no shares of Common Stock subject to an award that is granted by, or becomes an obligation of, the Company underSections 22(a) or22(b) of this Plan, will be added to the aggregate limit contained inSection 3(a)(i) of this Plan.
Annex B
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
We make certain statements in this proxy statement that constitute forward-looking statements within the meaning of federal and state securities laws. Forward-looking statements are all statements other than statements of historical fact. We attempt to identify these forward-looking statements by words such as “may,” “will,” “should,” “could,” “might,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “target,” “goal,” “predict,” “intend,” “potential,” “continue,” “seek” and other comparable words. Similarly, statements that describe our business strategy, goals, prospects, opportunities, outlook, objectives, plans or intentions are also forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or performance; expectations regarding the impact on June 5, 2015our business of theCOVID-19 pandemic; macroeconomic trends that we expect may influence our business, market position or customer demand; expectations regarding the introduction of new products or expansion into new markets; regulatory compliance and expected changes in the regulatory or privacy landscape affecting our business; plans for growth and future operations; the impact of new partnerships; as hereinafter specified uponwell as assumptions relating to the proposals listed,foregoing.
Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These statements are based on expectations and assumptions as of the date of this proxy statement regarding future events and business performance and involve known and unknown risks, uncertainties and other factors that may cause actual events or results to be materially different from any future events or results expressed or implied by these statements. These factors include those identified inItem 1A, “Risk Factors” of our Annual Report on Form10-K for the year ended December 31, 2019, those set forth inItem 1A, “Risk Factors” of our Quarterly Report on Form10-Q for the quarter ended March 31, 2020; and those identified in other documents that we file from time to time with discretionarythe SEC.
We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should not place undue reliance on forward-looking statements, which apply only as of the date of this proxy statement. You should carefully review the risk factors described in our Annual Report on Form10-K, Quarterly Report on Form10-Q and other documents that we file from time to time with the SEC. Except as required by applicable law, including the rules and regulations of the SEC, we undertake no obligation, and expressly disclaim any duty, to publicly update or revise forward-looking statements, whether as a result of any new information, future events or otherwise. Although we believe the expectations reflected in the forward-looking statements are reasonable as of the date of this proxy statement, our statements are not guarantees of future results, levels of activity, performance, or achievements, and actual outcomes and results may differ materially from those expressed in, or implied by, any of our statements.
COMSCORE, INC. 11950 DEMOCRACY DR., SUITE 600 RESTON, VA 20190 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com/20564W Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE IN PERSON You may vote your shares in person by attending the 2020 Annual Meeting. Directions to attend the Annual Meeting where you may vote in person can be found under the “Locations” section of the Company’s website at www.comscore.com. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the 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: D18580-P40807 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY COMSCORE, INC. For Withhold For All To withhold authority uponto vote for any individual All All Except nominee(s), mark “For All Except” and write the The Board of Directors recommends you vote FOR the number(s) of the nominee(s) on the line below. following: 1. Election of Directors: Nominees: 01) Jacques Kerrest 02) Kathleen Love The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. The approval, on anon-binding advisory basis, of the compensation paid to the Company’s named executive officers 3. The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020 4. The approval of the Amended and Restated 2018 Equity and Incentive Compensation Plan NOTE: In their discretion, the proxies may vote on such other matters as may properly come before the meeting.
The Company's Annual Report on Form 10-K and Amendment No. 1 or may otherwise be allowed to Annual Report on Form 10-K/Abe considered at the meeting. 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 year ended December 31, 2014 accompanies thisAnnual Meeting: The Notice ofand Proxy Statement and Form10-K are available at www.proxyvote.com/20564W. D18581-P40807 COMSCORE, INC. Annual Meeting of Stockholders July 9, 2020 10:00 AM, EDT This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Gregory Fink and Proxy Statement. These documents can alsoAshley Wright, or either of them, as proxies, each with the power to appoint his/her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of COMSCORE, INC. that the stockholder(s) is/are entitled to vote at the 2020 Annual Meeting of COMSCORE, INC. to be accessedheld at http://www.astproxyportal.com/ast/25890.
(Carr Workplaces, located at 1818 Library Street, Suite 500, Reston, Virginia 20190 at 10:00 AM, EDT on July 9, 2020, and at any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on the reverse side)side
ANNUAL MEETING OF STOCKHLDERS OF
COMSCORE, INC.
July 21, 2015
