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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 |
AMBER ROAD, INC.
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(Name of Registrant as Specified In Its Charter)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously.
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Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement:
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(3)
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Filing Party:
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(4)
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Date Filed:
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1.
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To elect three directors to the Board of Directors of Amber Road (the “Board”) for a three-year term of office expiring at the
2022 Annual Meeting of Stockholders (Proposal 1);
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2. |
To ratify the selection of KPMG LLP (“KPMG”) as our independent registered public
accountants for the fiscal year ending December 31, 2019 (Proposal 2); and
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3. |
To transact such other business as may properly come before the Annual Meeting or
any continuation, postponement or adjournment thereof.
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By Order of the Board of Directors,
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Barry M.V. Williams
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Chairman of the Board
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East Rutherford, New Jersey
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[________________],
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2019
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Proxy Statement Summary
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Information Concerning Voting and Solicitation
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Background of the Solicitation |
14 |
Corporate Governance
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Operating History
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18 |
Board of Directors Corporate Governance Highlights
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18 |
Director Qualifications and Diversity
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20 |
Leadership Structure
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22 |
Board Committees and Charters
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22 |
Board Role in Risk Oversight
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24 |
Code of Conduct and Business Ethics
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25 |
Certain Relationships and Related Transactions
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27 |
Director Independence
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27 |
Board Meetings
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Communication with the Board
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Corporate Governance Materials Available on Website
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28 |
Proposal 1 - Election of Directors
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Nominees for Election
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30 |
Directors Continuing in Office
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31 |
Executive Compensation Discussion
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33 |
Select Financial Strategic Highlights
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33 |
Executive Compensation Policies and Practices
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Executive Compensation Philosophy
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Elements of Compensation
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Other Compensation Agreements and Policies
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Section 162(m) of the Internal Revenue Code
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Executive Compensation Tables
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Director Compensation Discussion
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Director Compensation Table
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Ownership of Equity Securities of the Company
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Security Ownership of Directors and Executive Officers
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Security Ownership of Certain Beneficial Owners
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Equity Compensation Plan Information
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Proposal 2 - Ratification of Independent Registered Public Accountants
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Audit Committee Report
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Management
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Annual Report and Form 10-K
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Other Matters
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Annex A |
63 |
Annex B |
68 |
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PROXY STATEMENT SUMMARY
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Date and Time:
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[________________], 2019 at [_:__] [A.M./P.M.] local time
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Location:
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Record Date:
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[________________], 2019
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Mail Date:
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The proxy materials are first being made available to our stockholders of record on or about [__________], 2019
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Matter
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Our Board Vote Recommendation
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Proposal 1: Election of Three Nominees to the Board (page [●])
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FOR Rudy Howard, Andre G.F. Toet and Kenneth H. Traub
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Proposal 2: Ratification of Selection of Independent Registered Public Accountants (page [●])
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FOR
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INFORMATION CONCERNING VOTING AND SOLICITATION
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• |
Proposal 1: The election of three directors to serve on our Board for a three-year term of office expiring at the
2022 Annual Meeting of Stockholders;
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Proposal 2: The ratification of the selection of KPMG LLP (“KPMG”) as our independent registered public accountants
for the fiscal year ending December 31, 2019; and
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Any other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment
thereof.
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INFORMATION CONCERNING VOTING AND SOLICITATION
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• |
FOR the election of Rudy Howard, Andre G.F. Toet and Kenneth H. Traub to serve on our Board for a three-year term of office expiring at the 2022 Annual Meeting of Stockholders; and
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FOR the ratification of the selection of KPMG as our independent registered public accountants for the fiscal year ending December 31, 2019.
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INFORMATION CONCERNING VOTING AND SOLICITATION
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you are present in person at the Annual Meeting; or
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your shares are represented by a properly authorized and submitted proxy (submitted over the Internet, by telephone
or by mail).
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INFORMATION CONCERNING VOTING AND SOLICITATION
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✓ |
By Internet — Stockholders of record may be able to submit their proxies over the Internet by following the instructions described on their WHITE proxy cards. Most Amber Road stockholders who hold shares beneficially in street name may provide voting instructions by accessing the website specified on the voting
instruction forms provided by their brokers, banks, trusts or nominees. Please check the voting instruction form for Internet voting availability.
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✓ |
By Telephone — Stockholders of record may submit proxies by telephone if in the United States or Canada, as
described in the telephone voting instructions on their WHITE proxy cards. Most Amber Road stockholders who hold shares beneficially in street name and live in the United States or Canada may provide voting instructions by telephone
by calling the number specified on the voting instruction forms provided by their brokers, banks, trusts or nominees. Please check the voting instruction form for telephone voting availability.
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✓ |
By Mail — Stockholders of record may submit proxies by completing, signing and dating the WHITE
proxy cards and mailing them in the accompanying pre-addressed envelopes. Amber Road stockholders who hold shares beneficially in street name may provide voting instructions by mail by completing, signing and dating the voting
instruction forms provided by their brokers, banks or other nominees and mailing them in the accompanying pre-addressed envelopes.
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✓ |
In Person at the Annual Meeting — Shares held in your name as the stockholder of record may be voted in person at the Annual Meeting. Shares held beneficially in
street name may be voted in person only if you obtain a legal proxy from the broker, bank, trust or nominee that holds your shares as of the Record Date, indicating that you were a beneficial owner of shares as of the close of
business on such date and the number of shares that you beneficially owned at that time. Please allow adequate time to request a legal proxy from your broker, bank, trust or other nominee.
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INFORMATION CONCERNING VOTING AND SOLICITATION
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INFORMATION CONCERNING VOTING AND SOLICITATION
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•
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“FOR” the election of the three nominees listed on the WHITE proxy card (i.e., Rudy Howard, Andre G.F. Toet and Kenneth H. Traub) to serve on our Board for a
three-year term of office expiring at the 2022 Annual Meeting of Stockholders; and
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“FOR” the ratification of the selection of KPMG as our independent registered public accountants for the fiscal year ending December 31, 2019.
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INFORMATION CONCERNING VOTING AND SOLICITATION
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INFORMATION CONCERNING VOTING AND SOLICITATION
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BACKGROUND OF THE SOLICITATION
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BACKGROUND OF THE SOLICITATION
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BACKGROUND OF THE SOLICITATION
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BACKGROUND OF THE SOLICITATION
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CORPORATE GOVERNANCE
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Ø |
Independent Chairman. Although our Corporate Governance Guidelines do not require an independent
Chairman, we have maintained an independent Chairman since prior to becoming a public company.
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Independent Directors. All of our directors qualify as independent under NYSE regulations, with the
exception of our Chief Executive Officer.
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Independent Committees. The Board has three standing committees — Audit, Compensation, and Nominating and
Corporate Governance. Each committee is comprised solely of independent directors.
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Regular Executive Sessions of
Independent Directors. Our independent directors meet privately at
every regular Board meeting with our independent Chairman presiding over such meetings.
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Ø
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Board Access to Management. Our directors have ready access to our management. Key members of management attend Board and committee meetings to present information concerning various aspects of
the Company, its operations and results.
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Board Authority to Retain Outside Advisors. Our Board and committees have the authority to retain outside advisors.
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Board Review of Executive Officer
Performance. The Board, on an annual basis, reviews the performance of
its Chief Executive Officer and other named executive officers.
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Succession Planning. The Board, on an annual basis, reviews and updates the Company’s succession plan.
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Director Changes in Circumstances
Evaluated. If a director has a substantial change in principal business or professional affiliation or responsibility, including a change in principal
occupation, he or she must notify the Chairman and then it is within the decision of the Nominating and Corporate Governance Committee to determine whether resignation is in the best interest of the Company and stockholders.
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Director Outside Relationships Require
Pre-Approval. Without the prior approval of disinterested members of the Board, directors should not enter into any transaction or relationship with the
Company in which they will have a financial or a personal interest or any transaction that otherwise involves a conflict of interest.
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Director Conflicts of Interest. If an actual or potential conflict of interest arises for a director or a situation
arises giving the appearance of an actual or potential conflict, the director must promptly inform the Chairman. All directors will recuse themselves from any discussion or decision found to affect their personal, business or
professional interests.
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Regular Board and Committee
Evaluations. The Board has an annual evaluation process which focuses on its role and effectiveness, including that of its committees, as well as
fulfillment of its fiduciary duties. Our Board believes that a robust annual evaluation process is a critical part of its governance practices. Accordingly, the Nominating and Corporate Governance Committee oversees an annual
evaluation of the performance of the Board. The Nominating and Corporate Governance Committee approves written evaluation questionnaires that are distributed to each director. The results of each written evaluation are provided to,
and compiled by, the chair of the Nominating and Corporate Governance Committee. The chair of the Nominating and Corporate Governance Committee discusses the results of the performance evaluations with the full Board. Our Board,
with the assistance of the Company’s general counsel, utilizes the results of these evaluations in making decisions on director nominees, Board agendas, Board structure, composition and effectiveness and committee assignments. As a
result of past Board evaluations, we have made changes to Board meeting agenda and the form and scope of materials provided to directors. The results of the evaluations are reported to and reviewed by the full Board. For 2018, the
Nominating and Corporate Governance Committee was satisfied with the Board’s performance and considered the Board to be operating effectively.
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Mandatory Retirement Age. No
Board member may be nominated to a new term if he or she would be age 75 or older on the date the election is held.
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Overboarding. The Company’s policy is that (i) a non-employee Company director may serve on no more than five publicly-traded companies’ boards in addition to the Company’s Board,
and (ii) a Company director, who is also a full-time employee of the Company, may serve on no more than one publicly-traded company’s board in addition to the Company’s Board. No director or nominee currently serves on more than
three boards in addition to the Company's Board and the Board is considering a revision of its policy from five to four.
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Stock Ownership Guidelines. The Company’s Stock Ownership Guidelines provide that our non-employee directors and our Chief Executive Officer shall attain an investment position in our common
stock having a value that is at least equal to two times total annual compensation and five times base salary, respectively, within the later of five years of the adoption of the ownership guidelines or from the date of appointment
or election. The Board believes that meaningful ownership of the Company’s common stock helps align the interests of the Company’s CEO and directors with those of its stockholders and is consistent with the Company’s commitment to
sound corporate governance.
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CORPORATE GOVERNANCE
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Ø |
Recoupment Policy. Under our Compensation Recoupment Policy, we expressly reserve the right to claw-back or recoup incentive-based or other compensation (including equity-based
compensation) paid to any named executive officer if we are required to prepare an accounting restatement as a result of our material noncompliance with any financial reporting regulations.
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Hedging Policy. Under our Insider Trading Policy, we expressly prohibit (i) purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of the Company’s common stock; (ii) engaging in short sales related to the Company’s common
stock; or (iii) entering into any other transaction in which such person will profit if the value of the Company’s common stock falls.
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Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.
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Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters
that relate to the current and long-term objectives of the Company, and should be willing and able to contribute positively to the decision-making process of the Company.
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• |
Nominees should have a commitment to understand the Company and its industry and to regularly attend meetings of
the Board and its committees.
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Nominees should have the interest and ability to understand the sometimes conflicting interests of the various
constituencies of the Company, which include stockholders, employees, customers, creditors and the general public, and to act in the interests of all stockholders.
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• |
Nominees should not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to
represent the interests of all the Company’s stockholders and to fulfill the responsibilities of a director.
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Nominees’ contributions to the diversity of the Board, including with respect to background, race, gender, age and
nationality, will be considered and nominees will not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law.
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CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE
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· |
Independent Director Ralph Faison was appointed to our Board in December 2017, and was re-elected by our stockholders in 2018. Mr. Faison’s appointment was the result
of an ongoing process to enhance the Board. We believe Mr. Faison is an ideal complement to our current directors given his experience as a director and chief executive officer of publicly traded companies, with a focus on global and
strategic issues along with expertise in complex manufacturing and distribution systems.
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· |
In October 2018, our independent Chairman of the Board, Barry M.V. Williams, was appointed as Chairperson of our Nominating and Corporate Governance Committee,
replacing the incumbent chairperson who resigned from the Board due to personal reasons and presently serves as a consultant to the Company.
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· |
The Board has nominated Andre G.F. Toet as an independent director. Mr. Toet brings a fresh perspective and extensive operating experience with successful logistics companies. In particular, Mr. Toet increases the
Board's overall strength in the areas of Global Trade Management / Supply Chain Management and Global / International Expertise. His appointment was the result of an extensive process which included evaluating the skills of our
current directors, and we believe Mr. Toet is an ideal complement to our current directors.
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· |
The Board has nominated Kenneth H. Traub as an independent director. Mr. Traub has a substantial record of value creation, and will in the Board’s view bring the
necessary energy and experience to enable us to fully deliver on our mission for all stakeholders. In particular, Mr. Traub increases the Board's overall strength in the areas of Emerging Growth Software / Senior Leadership, Risk
Management and Public Company Board experience. We believe Mr. Traub is an ideal complement to our current directors.
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· |
These changes contribute to refreshing and supplementing the skills and independence of the existing Board, including independent directors Williams, Craven and
Howard.
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CORPORATE GOVERNANCE
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the audit and integrity of our financial statements;
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our compliance with applicable law, risk assessment and risk management;
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the qualification and independence of our independent registered public accounting firm;
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the establishment and performance of our internal audit function and independent registered public accounting firm;
and
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the annual Audit Committee report.
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• |
have direct responsibility for the appointment, compensation, retention, termination and oversight of the work of
our independent registered public accounting firm;
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• |
oversee the independence of our independent registered public accounting firm;
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• |
establish and implement policies and procedures for the pre-approval of all audit services and all permissible
non-audit services provided by our independent registered public accounting firm;
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• |
review and discuss with management and our independent registered public accounting firm our internal control over
financial reporting, the internal audit function, and changes in accounting and financial reporting principles;
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• |
review and discuss with management and our independent registered public accounting firm the overall adequacy and
effectiveness of our Code of Conduct and Business Ethics and compliance with applicable laws, regulations and internal compliance programs; and
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• |
review with management and our independent registered public accounting firm any correspondence with regulators or
governmental agencies and any employee complaints or published reports, which raise material issues regarding our financial statements or accounting policies.
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oversee the Company’s overall compensation philosophy, compensation plans and benefit programs;
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review, evaluate and approve executive officer compensation and performance, including the Chief Executive Officer,
on an annual basis;
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• |
approve equity grants to executive officers, or, if the Compensation Committee deems appropriate, recommend them to
the full Board for approval;
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• |
review and approve any consulting arrangements, employment contracts or severance agreements with any executive
officer;
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• |
assess whether the compensation structure encourages undue risk-taking;
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• |
adopt or modify any incentive compensation plan, or, if this action would require stockholder approval, recommend
it to the full Board for approval and proposal to the stockholders;
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• |
review and recommend to our Board any director compensation programs for our independent directors;
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• |
conduct an annual assessment of the Compensation Committee’s effectiveness;
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have power to engage compensation consultants, advisors or legal counsel; and
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CORPORATE GOVERNANCE
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• |
generally review the Company’s overall compensation strategy to ensure that it aligns with the interests of the
Company’s stockholders, supports the Company’s objectives, and provides appropriate rewards and incentives to serve the long-term best interests of the Company.
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• |
search for, identify and evaluate individuals qualified to become Board members and recommend individuals to be
nominated for election to our Board;
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• |
develop, maintain and oversee the Corporate Governance Guidelines and Code of Conduct applicable to members of the
Board and for monitoring the independence of the Board;
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• |
advise our Board regarding appropriate corporate governance policies, and changes thereto, and assist our Board in
achieving them;
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• |
have sole discretion to retain a search firm for the purpose of identifying director candidates;
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• |
review the performance of each director standing for re-election and the independence of each director;
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• |
conduct an annual assessment of the effectiveness of the Board;
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• |
have responsibility for succession planning for executive officers; and
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• |
review and consider actual and potential conflicts of interest of management and directors.
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CORPORATE GOVERNANCE
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Committee
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Primary Risk Oversight Responsibility
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Audit Committee
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•
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Oversees financial risk, including capital risk, financial compliance risk, internal controls over financial reporting and reporting of
violations involving financial risk, internal controls and other non-compliance with our Code of Conduct.
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Nominating and Corporate Governance Committee
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•
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Oversees the assessment of each Board member’s independence to avoid conflict, determine effectiveness of the Board and committees, and
maintain good governance practices through our Corporate Governance Guidelines and Code of Conduct.
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Compensation Committee
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•
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Oversees our compensation policies and practices to ensure compensation appropriately incentivizes and retains management and determines
whether such policies and practices balance risk-taking and reward in an appropriate manner.
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CORPORATE GOVERNANCE
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• |
the related person’s interest in the related person transaction;
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• |
the approximate dollar value of the amount involved in the related person transaction;
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• |
the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;
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• |
whether the transaction was undertaken in the ordinary course of our business;
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• |
whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third
party;
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• |
the purpose of, and the potential benefits to us of, the transaction; and
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• |
any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the
circumstances of the particular transaction.
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CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE
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• |
Corporate Governance Guidelines
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• |
Certificate of Incorporation
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• |
Bylaws
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• |
Audit Committee Charter
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• |
Compensation Committee Charter
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• |
Nominating and Corporate Governance Committee Charter
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• |
Guidelines for Director Qualification
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• |
Code of Conduct and Business Ethics
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• |
Class I – Mr. Preuninger
and Mr. Faison are the Class I directors whose terms expire at the 2021 Annual Meeting of Stockholders.
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• |
Class II – Mr. Howard is
the Class II director whose term expires at this 2019 Annual Meeting of Stockholders. Mr. Howard has been nominated for re-election and Andre G.F. Toet and Kenneth H. Traub have been nominated for election at this Annual Meeting as the
Class II directors for three-year terms expiring at the 2022 Annual Meeting of Stockholders.
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• |
Class III - Ms. Craven and
Mr. Williams are the Class III directors whose terms expire at the 2020 Annual Meeting of Stockholders.
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Director
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Age
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Director
Since
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Nominating & Corporate
Governance Committee
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Audit
Committee
|
Compensation
Committee
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|||||
Pamela Craven
|
65
|
2014
|
√
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Chairperson
|
||||||
Ralph Faison
|
60
|
2017
|
√
|
√
|
√
|
|||||
Rudy Howard
|
61
|
2012
|
√
|
Chairperson
|
||||||
James Preuninger, Chief Executive Officer
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59
|
2002
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|
|||||||
Barry Williams, Chairman of the Board
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72
|
2004
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Chairperson
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√
|
PROPOSAL 1 – ELECTION OF DIRECTORS
|
PROPOSAL 1 – ELECTION OF DIRECTORS
|
PROPOSAL 1 – ELECTION OF DIRECTORS
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EXECUTIVE COMPENSATION DISCUSSION
|
Year Ended
|
Adjusted EBITDA
|
||
December 31, 2018
|
$ |
5,407,316
|
|
December 31, 2017
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$ |
86,500
|
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December 31, 2016
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$ |
(3,742,7070)
|
|
December 31, 2015
|
$ |
(10,484,749)
|
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EXECUTIVE COMPENSATION DISCUSSION
|
EXECUTIVE COMPENSATION DISCUSSION
|
EXECUTIVE COMPENSATION DISCUSSION
|
Amber Road, Inc.
2018 Named Executive Officers (“NEOs”)
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James Preuninger
Chief Executive Officer
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Thomas Conway
Chief Financial Officer
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Nathan Pieri
Chief Product Officer
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EXECUTIVE COMPENSATION DISCUSSION
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Policy/Practice
|
Summary
|
||
Recoupment (Claw-Back) Policy
|
Under our Compensation Recoupment Policy, we expressly reserve the right to claw-back or recoup incentive-based or other compensation (including equity-based
compensation) paid to any NEO if we are required to prepare an accounting restatement as a result of our material noncompliance with any financial reporting laws or regulations.
|
||
No Excise Tax Payments or
Gross-Ups
|
We have not and will not enter into any change in control agreement or arrangement with an NEO that provides for an excise tax gross-up payment. We do not
provide any tax gross-ups, except for business-related payments such as reimbursement of certain moving and relocation expenses for newly-hired and current executives who agree to relocate to work on the Company’s behalf.
|
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Limited Perquisites
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We provide limited perquisites or other personal benefits to our NEOs and provide air and other travel for our NEOs for business purposes only.
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Anti-Hedging Policy
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Our employees, including our NEOs, and directors are not permitted to hedge their economic exposure to our equity securities or enter into any other transaction in which they profit if the value of the Company’s common stock falls.
|
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Incentive Compensation
Amounts Subject to Thresholds
and Maximums
|
Our annual incentive cash performance bonuses have threshold performance requirements that must be achieved to receive payment and are subject to maximum payment
“caps” and to formulaic “decelerators” and “accelerators” so that underperformance and overachievement of the target levels have fractional or multiplier effects, as the case may be, in order to decrease risk.
|
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Stock Ownership Requirements
|
Our Stock Ownership Guidelines provide that our non-employee directors and our Chief Executive Officer shall attain an investment position in our common stock
having a value that is at least equal to two (2x) times total annual compensation and five (5x) times base salary, respectively, within the later of five years from the adoption of the stock ownership guidelines or from the date of
appointment or election.
|
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Independent Compensation
Consultant
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FW Cook & Co. and Pearl Meyer Partners, LLC (prior to August 14, 2018) were retained directly by the Committee, and advise the Committee on pay decisions
regarding our NEOs, other executive management and non-employee directors, and keep the Committee apprised of compensation trends and best practices. They are independent compensation consultants and performed no other services for us.
|
||
Compensation Risk Assessment
|
The Committee conducts an annual risk assessment of our compensation policies and practices to ensure that our programs are not reasonably likely to have a
material adverse effect on us.
|
||
Long-Term Equity Awards
|
Our long-term equity awards for employees are generally granted based on a specific target percent of base compensation, are generally awarded during a set
period of time following our fiscal year-end results and with valuation and exercise price corresponding directly to the grant date.
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No Single Triggers
|
We do not have “single-trigger” equity vesting acceleration upon a change in control for RSUs, PSUs, stock options or other equity awards. In the event of a
change in control, a qualifying termination of employment, or “double-trigger,” is required for accelerated vesting of equity awards.
|
||
Performance Awards
|
Performance vested awards such as PSUs issued after March 9, 2017 under our 2012 Omnibus Incentive Compensation Plan (“2012 Plan”), may only vest on a change in
control based on actual performance or the application of a pro-rated performance period to target performance.1
|
||
Minimum Vesting Requirements
|
Under our 2012 Plan, equity awards granted after March 9, 2017 have a minimum vesting period of one year1, with full vesting generally over four years.
|
||
Peer Group Analysis
|
The Committee reviews total direct compensation (base salary, annual cash incentive and long-term equity incentive awards) and the mix of compensation components
for the NEOs relative to our peer group as one of the factors in determining if compensation is appropriate and adequate to attract, motivate and retain executive officers.
|
EXECUTIVE COMPENSATION DISCUSSION
|
•
|
Individual annual cash incentive and equity-based awards should be closely tied to the performance of the Company as a whole, or one or more of its divisions
or business units, as well as to the individual’s performance;
|
•
|
The interests of the NEOs and the Company’s stockholders should be aligned through direct ownership of Company common stock and by providing a portion of
the NEOs’ total direct compensation in the form of equity-based incentives; and
|
•
|
Total direct compensation must be competitive with our peer group, as well as broader industry survey data.
|
|
· |
Attract, retain and motivate highly qualified and talented executives who will contribute to the Company's success by reason of their ability, ingenuity and industry;
|
· |
Link compensation realized to the achievement of the Company's short and long-term financial and strategic goals and incentivize management to further our stockholders’ long-term
interests by making effective decisions based on appropriate metrics;
|
· |
Align management and stockholder interests by encouraging long-term value creation;
|
· |
Support important corporate governance principles and best practices; and
|
· |
Take into account the tax, accounting, cash flow and dilution consequences of the executive compensation program in a way that is most financially efficient, consistent with achieving
the above objectives.
|
EXECUTIVE COMPENSATION DISCUSSION
|
Responsible Party
|
Primary Roles and Responsibilities
|
||
Compensation Committee -
(Comprised solely of
independent
directors and reports
to the Board)
|
· Leads the process for the evaluation by the Board of the
performance of the CEO and the Company as a whole within the context of the economic and financial environment within which the Company operates and the establishment of quantitative and qualitative corporate strategies and objectives.
· Provides feedback to the CEO on performance and
objectives.
· Determines and approves compensation packages for our NEOs
and reports its compensation recommendations to the full Board.
· Reviews and approves all compensation programs in which
our executive management participate.
· Oversees the Board’s relationship with and response to
stockholders on executive compensation matters.
· Exercises the sole authority to select, retain and/or
obtain advice from compensation consultants, legal counsel and other outside advisors and assesses the independence of each, taking into consideration the factors set forth in the SEC rules and NYSE listing standards.
|
||
Consultant to the
Compensation
Committee -
(Independent
consultant
retained directly
by the Compensation
Committee)
|
· Counsels the Committee on the appropriateness and
competitiveness of our compensation program relative to market practice, including advising the Committee on NEO compensation and the selection of our peer group.
· Advises the Committee on various compensation matters,
trends and developments, and recommends compensation program designs and practices to support our business strategy and objectives.
· Attends certain Committee meetings, including meeting in
executive session with the Committee. Works with the Committee to assess the potential risks arising from our compensation policies and practices.
|
||
CEO -
(Assisted by
Company staff)
|
· Conducts performance reviews for the other NEOs (and other
executive management) and makes recommendations to the Committee with respect to their compensation.
|
EXECUTIVE COMPENSATION DISCUSSION
|
2018 Peer Group
|
||
Companies
|
Performance
|
|
American Software 1
Asure Software 1
Bazaarvoice 2
Brightcove
Callidus Software 2
Carbonite
ChannelAdvisor
Descartes Systems Group
Everbridge
|
Five9, Inc.
Kinaxis
Halogen Software 2
Limelight Networks 1
LivePerson
PROS Holdings
Q2 Holdings
SPS Commerce
TechTarget 1
Tecsys 1
|
Market Capitalization as of 12/31/18
Peer Group Range: $103M - $2,497M
Peer Group Median: $945M
Amber Road: $240M
Trailing 12-Month Revenues as of 12/31/18
Peer Group Range: $52M - $296M
Peer Group Median: $180M
Amber Road: $85M
|
1 American Software, Asure Software, Limelight Networks, TechTarget and Tecsys
were added to the peer group in 2018. 2 Bazaarvoice, Callidus Software and Halogen Software were removed from the peer group in 2018 as they were acquired or
went private.
|
Compensation Category
|
Description of Compensation
|
Rationale
|
Influencing Factors
|
||
Base Salary |
Fixed compensation delivered in cash; reviewed annually and adjusted if appropriate.
|
Provides base amount of market competitive pay.
|
Experience, market data, individual role and responsibilities, and individual performance.
|
||
Short-Term (Annual Cash)
Incentive Awards
|
Variable cash compensation based on performance against annual goals of Revenue, Annual Subscription Value and Adjusted EBITDA.
|
Motivates and rewards achievement of key financial results for the fiscal year.
|
Annual target short-term (annual cash) incentive awards determined annually based on market data and individual role and responsibilities; payout based on Company
performance.
|
||
Long-Term
(Equity)
Incentives
Awards
|
Restricted
Stock
Units
(“RSUs”)
|
Variable compensation with payout in shares with time-based vesting; award vests over four years.
|
Directly aligns interests of NEOs with long-term stockholder value creation and promotes retention.
|
Target value of all long-term incentive awards from our 2012 Plan is based on individual role and responsibilities and market data; payout based on Company’s common stock price - at time of
settlement (for RSUs), upon exercise (for stock options) and achievement of performance metrics (for PSUs).
|
|
Stock
Options
|
Variable compensation based on increase in stock price from date of grant, subject to exercise for right of ownership; award vests over four years.
|
Directly aligns interests of NEOs with long-term stockholder value creation and provides upside potential over a ten year option term; also promotes retention.
|
|||
Performance-
Based Stock
Units
(“PSUs”)
|
Variable compensation with payout in shares conditioned upon achievement of multi-year financial metrics or milestones over a specified performance period
(generally two to three years).
|
Directly aligns interests of NEOs with long-term stockholder value creation by linking potential payouts to multi-year financial metrics or milestones; also
promotes retention.
|
EXECUTIVE COMPENSATION DISCUSSION
|
· |
Revenue - Revenue as reported in the Company’s Annual Report on Form 10-K filed
on March 5, 2019. The Committee believes that Revenue is one of the most recognizable and objective measures of corporate growth and performance.
|
·
|
Annual Subscription Value (“ASV”) - Annual Subscription Value is the one-year
value of subscription agreements signed by the Company during the fiscal year. The Committee believes that ASV is one of the most important performance metrics associated with growth in the Software-as-a-Service industry.
|
·
|
Adjusted EBITDA - EBITDA is generally defined as net income (loss) plus
depreciation and amortization, interest expense (income) and income tax expense. We use Adjusted EBITDA as a measure of operating performance because it assists us in comparing performance on a consistent basis across reporting periods, as
it removes from our operating results the impact of our capital structure and adds back compensation expenses attributable to stock compensation. We believe Adjusted EBITDA is useful to an investor in evaluating our operating performance
because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful
measure of performance exclusive of our capital structure and the method by which assets were acquired.
|
·
|
Individual Objective. All NEOs, other than Mr. Preuninger, had an individual
objective or objectives that calls upon such person to go beyond his or her normal course duties in furtherance of the Company’s success. The addition of an individual objective reflected the Committee’s determination that adding this
non-financial goal resulted in a structure for the other NEOs better designed to incentivize performance that maximized stockholder value.
|
EXECUTIVE COMPENSATION DISCUSSION
|
EXECUTIVE COMPENSATION DISCUSSION
|
|
EXECUTIVE COMPENSATION DISCUSSION
|
EXECUTIVE COMPENSATION DISCUSSION
|
• |
a single lump sum severance payment in an amount equal to twelve months’ salary, payable no later than sixty days following termination;
|
• |
subject to the terms of equity award grant agreements and the provisions of the 2012 Plan, immediate vesting of 100% of his then outstanding and unvested equity awards as
of the date of termination of employment; and
|
• |
payment by us of the premiums for his group health continuation coverage for the twelve-month period following termination of employment or until the date that COBRA
continuation coverage expires.
|
• |
“Cause” means (i) the executive’s willful and continued failure to perform his or her duties and responsibilities after
receipt of written demand for performance from us describing the basis for our belief that the executive has not substantially performed his or her duties and providing a reasonable period (not to exceed between 15 and 30 days) to take
corrective action, (ii) any material act of personal dishonesty taken by the executive in connection with his responsibilities as an employee with the intention that such action may result in the substantial personal enrichment of the
executive, (iii) the executive’s conviction of, or plea of nolo contendere to, a felony that our Chief Executive Officer reasonably believes has had or will have a material detrimental effect on our reputation or business, or (iv) a
material breach of any agreement by and between the executive and us, which material breach has not been cured within 15 to 30 days of written notice from us.
|
• |
“Good Reason” means the occurrence of any of the following, without the executive’s express written consent: (i) a
material reduction of the executive’s authority, duties or responsibilities; (ii) a material reduction in the executive’s base and/or variable compensation; (iii) a material change in the geographic location at which the executive must
perform his or her services greater than 50 miles; (iv) our failure to obtain the assumption of the agreements by any of our successors; or (v) any material breach or violation of a material provision of the agreements by us. An
executive’s resignation will not be for “Good Reason” unless the executive provides the Company with written notice describing the grounds for a Good Reason termination and the Company fails to cure the conditions that constitute Good
Reason within 30 days after receiving such written notice.
|
• |
a “Change in Control” occurs on the date that any one person or group acquires (i) assets from us that have a total
gross fair market value equal or greater than 80 percent of our Company, or (ii) ownership of our stock that constitutes more than 50 percent of the total fair market value or total voting power of our stock. A Change in Control shall
not include any transaction effected primarily for the purpose of financing us with cash or the initial public offering of our common stock or for reincorporation purposes.
|
EXECUTIVE COMPENSATION DISCUSSION
|
Name and Principal Position
|
Fiscal
Year
|
Salary ($)
|
Stock
Awards1
($)
|
Option
Awards2
($)
|
Non-Equity
Incentive Plan
Compensation3
($)
|
All Other
Compensation4
($)
|
Total ($)
|
James Preuninger,
|
2018
|
415,000
|
1,696,016
|
-
|
547,097
|
4,460
|
2,662,573
|
Chief Executive Officer
|
2017
|
415,000
|
2,122,970
|
759,377
|
77,263
|
4,700
|
3,379,310
|
2016
|
415,000
|
- 5
|
-
|
271,896
|
4,700
|
691,596
|
|
Thomas Conway,
|
2018
|
315,000
|
689,640
|
-
|
184,404
|
3,357
|
1,192,401
|
Chief Financial Officer
|
2017
|
315,000
|
1,223,920
|
275,935
|
29,416
|
3,593
|
1,847,864
|
2016
|
315,000
|
289,801
|
-
|
103,517
|
3,593
|
711,911
|
|
Nathan Pieri,
|
2018
|
320,000
|
689,640
|
-
|
176,071
|
4,464
|
1,190,175
|
Chief Product Officer
|
2017
|
320,000
|
1,225,335
|
275,935
|
29,788
|
4,113
|
1,855,171
|
2016
|
320,000
|
294,402
|
-
|
104,827
|
4,113
|
723,342
|
(1) |
These amounts represent:
|
(a) |
For 2018 for Messrs. Preuninger, Conway and Pieri, the aggregate grant date fair value ($9.89 per share) of 171,488, 69,731 and 69,731 RSUs, respectively.
|
(b)
|
For 2017 for Mr. Preuninger, the aggregate grant date fair value ($9.09 per share) of 97,013 RSUs and 136,537 PSUs, and for 2017 for Messrs. Conway and Pieri, (i) the aggregate grant date
fair value ($8.18 per share) of, respectively, 39,448 and 39,448 RSUs, and, respectively, 10,909 and 11,082 PSUs, and (ii) the aggregate grant date fair value ($8.12 per share) of 100,000 RSUs. Vesting of the PSUs for each executive was
determined on the basis of the 2018 Adjusted EBITDA PSU Target. The PSU award agreements provided for 100% vesting upon achievement of the 2018 Adjusted EBITDA PSU Target. Threshold achievement (80% of target or less) would result in 0%
vesting and maximum achievement (200% or more of the 2018 Adjusted EBITDA PSU Target) would result in 500% vesting. For actual performance between the specified 2018 Adjusted EBITDA PSU Target and threshold Adjusted EBITDA, or between the
2018 Adjusted EBITDA PSU Target and maximum Adjusted EBITDA, would result in a vesting percentage determined by interpolation. As reported in our Annual Report on Form 10-K for the fiscal year ending December 31, 2018, the actual 2018
Adjusted EBITDA exceeded 200% of the 2018 Adjusted EBITDA Target, resulting in 500% vesting for the 2017 PSU awards on March 7, 2019, however, only the target number of shares are reflected in the table, above.
|
(c) |
For 2016 for Messrs. Conway and Pieri, the aggregate grant date fair value ($3.74 per share) of 77,487 and 78, 717 RSUs, respectively.
|
(2) |
These amounts represent the aggregate grant date fair value of stock option awards made during each fiscal year, calculated in accordance with ASC 718. The vesting terms for the listed
options are as follows: 25% at the first year anniversary of the grant date and 6.25% at the end of each quarter thereafter. The amounts reflect the full grant date fair value for options granted during the indicated year. The grant date
fair value was computed in accordance with ASC Topic 718, Compensation—Stock Compensation. The assumptions we used in valuing the stock option awards are described in Note 10 to our audited consolidated financial statements included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
|
EXECUTIVE COMPENSATION DISCUSSION
|
(3) |
These amounts represent Short-Term (Annual Cash) Incentive Program bonus payments relating to the stated fiscal year. These amounts were earned based on the recipient’s formulaic
performance against specified metrics and performance criteria. The 2018 metrics and performance criteria included Revenue, Annual Subscription Value, Adjusted EBITDA, and for Messrs. Conway and Pieri an additional Individual
Objective. The 2017 metrics and performance criteria included Revenue, Annual Subscription Value and Adjusted EBITDA (however, a portion of the 2017 award was issued as a PSU that was achievable based upon the 2018 Adjusted EBITDA
PSU Target, and therefore is included as a “Stock Award” as noted in footnote 1(b), above).
|
(4) |
These amounts include premiums we paid for life insurance, long-term disability and accidental death and dismemberment insurance on these individuals.
|
(5) |
The Committee and Mr. Preuninger postponed Mr. Preuninger’s 2016 Long-Term (Equity) Incentive Program award in order to maximize the available awards to other employees due to the
limited number of equity shares remaining in the Company’s 2012 Plan for fiscal 2016. The Committee did award him, during the fiscal year ended December 31, 2017, 107,792 PSUs (included in the 136,537 PSU grant referenced in footnote
1(b) above) to be considered in recognition of his non-receipt of a 2016 Long-Term (Equity) Incentive Program award.
|
EXECUTIVE COMPENSATION DISCUSSION
|
OPTION AWARDS1
|
STOCK AWARDS
|
||||||
Name and Principal Position
|
Grant
Date
|
Number of
Securities
Underlying Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number of
Shares
or Units of
Stock
That Have
Not Vested
(#)
|
Market
Value of
Shares or
Units
of Stock
That
Have Not
Vested ($)
|
James W. Preuninger,
|
6/25/2013
|
133,600
|
-
|
6.14
|
6/25/2023
|
-
|
-
|
Chief Executive Officer
|
8/5/2014
|
327,937
|
-
|
13.00
|
8/5/2024
|
-
|
-
|
2/19/2015
|
194,531
|
12,969
|
8.08
|
2/19/2025
|
-
|
-
|
|
7/14/2017
|
72,511
|
159,527
|
9.09
|
7/14/2027
|
72,7602
|
598,815
|
|
7/14/2017
|
-
|
-
|
-
|
-
|
136,5373
|
1,123,700
|
|
2/20/2018
|
-
|
-
|
-
|
-
|
171,488
|
1,696,016 |
|
Thomas Conway,
|
9/30/2011
|
26,720
|
-
|
2.31
|
9/30/2021
|
-
|
-
|
Chief Financial Officer
|
6/25/2013
|
36,740
|
-
|
5.57
|
6/25/2023
|
-
|
-
|
8/5/2014
|
209,266
|
-
|
13.00
|
8/5/2024
|
-
|
-
|
|
2/19/2015
|
73,828
|
4,922
|
8.08
|
2/19/2025
|
-
|
-
|
|
2/10/2016
|
-
|
-
|
-
|
-
|
24,2152
|
199,289
|
|
6/12/2017
|
35,382
|
58,971
|
8.18
|
6/12/2027
|
29,5862
|
243,493
|
|
6/12/2017
|
-
|
-
|
-
|
-
|
10,9093
|
89,781
|
|
10/6/2017
|
-
|
-
|
-
|
-
|
75,0002
|
617,250
|
|
2/20/2018
|
-
|
-
|
-
|
-
|
69,731
|
689,640 |
|
Nathan Pieri,
|
7/16/2014
|
270,000
|
-
|
15.36
|
7/16/2024
|
-
|
-
|
Chief Product Officer
|
2/19/2015
|
75,000
|
5,000
|
8.08
|
2/19/2025
|
-
|
-
|
2/10/2016
|
-
|
-
|
-
|
-
|
24,6002
|
202,458
|
|
6/12/2017
|
35,382
|
58,971
|
8.18
|
6/12/2027
|
29,5862
|
243,493
|
|
6/12/2017
|
-
|
-
|
-
|
-
|
11,0823
|
91,205
|
|
10/6/2017
|
-
|
-
|
-
|
-
|
75,0002
|
617,250
|
|
2/20/2018
|
-
|
-
|
-
|
-
|
69,731
|
689,640
|
(1) |
These stock options vest over four years as follows: 25% at the first year anniversary of the grant date and 6.25% at the end of each quarter thereafter.
|
(2) |
The stock awards that were granted on 2/10/2016 are for RSUs that vest over four years as follows: 25% at the first year anniversary of the grant date and 6.25% at the end of each
quarter thereafter and are valued at December 31, 2017. The stock awards that were granted on 6/12/2017, 7/14/2017, 10/6/2017 and 2/20/2018 are for RSUs that vest over four years as follows: 25% on each of the first, second, third and
fourth anniversaries of the grant date and are valued at December 31, 2018.
|
(3) |
The stock awards that were granted on 6/12/2017 and 7/14/2017 are for PSUs valued at December 31, 2018. Vesting of these PSUs were determined on the basis of performance against the
2018 Adjusted EBITDA PSU Target, providing for 100% vesting upon achievement of the 2018 Adjusted EBITDA PSU Target. Threshold achievement (80% of target or less) would result in 0% vesting and maximum achievement (200% or more of the
2018 Adjusted EBITDA PSU Target) would result in 500% vesting. For actual performance between the specified 2018 Adjusted EBITDA PSU Target and threshold Adjusted EBITDA or between the 2018 Adjusted EBITDA PSU Target and maximum
Adjusted EBITDA resulted in a vesting percentage determined by interpolation. As reported in our Annual Report on Form 10-K for the fiscal year ending December 31, 2018, the actual 2018 Adjusted EBITDA exceeded 200% of the 2018
Adjusted EBITDA PSU Target, resulting in 500% vesting for the 2017 PSU awards on March 7, 2019.
|
DIRECTOR COMPENSATION DISCUSSION
|
DIRECTOR COMPENSATION DISCUSSION
|
Director
|
Fees earned or
paid in cash ($)1
|
Stock Awards ($)2
|
Option Awards ($)3
|
Total ($)
|
Pamela F. Craven
|
75,000
|
90,000
|
—
|
165,000
|
Kenneth Harvey4
|
21,250
|
-
|
—
|
21,250
|
Rudy Howard
|
75,000
|
90,000
|
—
|
165,000
|
John Malone4
|
54,375
|
-
|
—
|
54,375
|
Barry Williams
|
85,000
|
115,000
|
—
|
200,000
|
Ralph Faison
|
60,000
|
180,0005
|
—
|
240,000
|
(1)
|
Represents amount earned or paid during fiscal year 2018.
|
(2) |
These awards consist of RSU grants that vest in their entirety on the first anniversary of the grant date but are not settled until a director’s separation of service. These amounts
reflect the fair value of the RSU award, based on the value of our common stock at the close of market on the date immediately preceding the date of grant. As of December 31, 2018, the following non-employee members of our Board held
the following number of RSUs, Ms. Craven and Mr. Howard each held 69,573 RSUs, Mr. Faison held 19,190 RSUs and Mr. Williams held 90,170 RSUs.
|
(3) |
There were no stock option awards to the individuals listed in the table during fiscal year 2018. As of December 31, 2018, the only non-employee director holding options to purchase
shares of our common stock was Mr. Howard who holds 80,160 options.
|
(4) |
Mr. Harvey did not stand for re-election to the Board and his term ended on May 1, 2018 and Mr. Malone resigned from the Board effective October 5, 2018. Mr. Malone separately
received 9,595 RSUs in exchange for consulting services rendered by Mr. Malone to the Company pursuant to a Non-Employee Consultant Restricted Stock Unit Award Agreement dated as of October 8, 2018.
|
(5) |
Mr. Faison received an inaugural grant of RSUs in 2018.
|
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
|
Named Executive Officers and Directors:
|
# Shares
Beneficially Owned1
|
Percent
of Total
|
|
Thomas Conway 2
|
409,810
|
1.4
|
|
Pamela Craven 3
|
79,573
|
*
|
|
Ralph Faison 4
|
28,690
|
*
|
|
Rudy Howard 5
|
149,733
|
*
|
|
Nathan Pieri 6
|
459,669
|
1.6
|
|
James Preuninger 7
|
2,413,917
|
8.5
|
|
Barry Williams 8
|
90,170
|
*
|
|
Andre G.F. Toet 9
|
0
|
*
|
|
Kenneth H. Traub 10
|
0
|
*
|
|
All directors and executive officers as a group (9 persons)
|
3,631,562
|
12.8
|
* |
Less than 1%
|
(1) |
Includes shares which the individuals shown own or have the right to acquire (a) upon vesting of restricted stock units (RSUs) where the shares could be issuable as of or within 60
days thereafter, and (b) upon exercise of stock options that are vested as of March 18, 2019 or within 60 days thereafter. Such shares are deemed to be outstanding in calculating the percentage ownership of such individual (and the
group), but are not deemed to be outstanding as to any other person.
|
(2) |
Mr. Conway is our Chief Financial Officer. Includes 58,334 shares of common stock and options to purchase 351,476 shares of common stock that have vested or will vest within 60 days
of the date of this table.
|
(3) |
Ms. Craven is one of our directors. Includes 10,000 shares of common stock and 69,573 RSUs for which receipt could be settled within 60 days of the date of this table.
|
(4) |
Mr. Faison is one of our directors. Includes 9,500 shares of common stock and 19,190 RSUs for which receipt could be settled within 60 days of the date of this table.
|
(5) |
Mr. Howard is one of our directors. Includes stock options to purchase 80,160 shares of common stock that have vested or will vest within 60 days of the date of this table and 69,573
RSUs for which receipt could be settled within 60 days of the date of this table.
|
DIRECTOR COMPENSATION DISCUSSION
|
(6) |
Mr. Pieri is our Chief Product Officer. Includes 109,669 shares of common stock and stock options to purchase 350,000 shares of common stock that have vested or will vest within 60
days of the date of this table.
|
(7) |
Mr. Preuninger is our Chief Executive Officer and a director. Consists of 1,672,369 shares of common stock and stock options to purchase 741,548 shares of common stock that have
vested or will vest within 60 days of the date of this table. Does not include 682,685 PSUs awarded during 2017 that vested upon achievement of the 2018 Adjusted EBITDA PSU Target but will not be delivered within 60 days of the date
of this table due to deferred delivery of such shares.
|
(8) |
Mr. Williams is one of our directors. Includes 90,170 RSUs for which receipt could be settled within 60 days of the date of this table.
|
(9) |
Mr. Toet is a nominee to the Board.
|
(10) |
Mr. Traub is a nominee to the Board.
|
Name and Address of Beneficial Owner
|
Common Stock Beneficially Owned
|
|||||
Number of Shares
|
Percent of Total1
|
|||||
Neil Gagnon and Gagnon Securities LLC 2
1370 Avenue of the Americas, Suite 2400, New York, NY 10019
|
2,699,534
|
9.5%
|
||||
Altai Capital Management L.P., et al.3
1509 San Joaquin Plaza, Newport Beach, CA 92660
|
2,430,357
|
8.6%
|
||||
Royce & Associates, LP 4
745 Fifth Avenue, New York, NY 10151
|
1,868,815
|
6.6%
|
||||
Blackrock, Inc.5
55 East 52nd
Street, New York, NY 10055
|
1,561,136
|
5.5%
|
||||
Oaktop Capital Management II, L.P.6
One Main Street, Suite 202, Chatham, NJ 07928
|
1,398,791
|
4.9%
|
||||
Total
|
9,958,633
|
35.1%
|
(1) |
The “Percent of Total” reported in this column has been calculated based upon the numbers of shares of common stock outstanding as of March 9, 2018 and may differ
from the “Percent of Class” reported in statements of beneficial ownership filed with the SEC.
|
(2) |
The beneficial ownership shown was provided by Neil Gagnon and Gagnon Securities LLC pursuant to a Schedule 13G/A filed with the SEC on January 18, 2019.
|
(3) |
The beneficial ownership shown was provided by Altai pursuant to a Schedule 13D/A filed with the SEC on January 18, 2019.
|
(4) |
The beneficial ownership shown was provided by Royce & Associates, LP pursuant to a Schedule 13G/A filed with the SEC on January 14, 2019.
|
(5) |
The beneficial ownership shown was provided by Blackrock, Inc. pursuant to a Schedule 13G filed with the SEC on February 8, 2019.
|
(6) |
The beneficial ownership shown was provided by Oaktop Capital Management II, L.P. pursuant to a Schedule 13G filed with the SEC on February 13, 2019.
|
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
|
Equity Compensation Plans
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans
|
|||
Equity compensation plans approved by stockholders:
|
||||||
Stock Options
|
4,447,1851
|
$10.04
|
-—
|
|||
Restricted Stock Units (RSUs)
|
1,189,8892
|
N/A
|
-—
|
|||
Performance Stock Units (PSUs)
|
50,0003
|
N/A
|
-—
|
|||
Subtotal:
|
5,687,074
|
N/A
|
2,678,2434
|
|||
Issuance of vested PSUs on 3/8/19
|
(992,200)5
|
|||||
Equity compensation plans not approved by stockholders:
|
—
|
—
|
—
|
|||
Total
|
5,687,074
|
-
|
1,686,0436
|
(1) |
As of December 31, 2018, the aggregate weighted-average remaining contractual life of our outstanding stock options was 5.8 years with an aggregated weighted-average
exercise price of $10.04.
|
(2) |
Includes all outstanding RSUs (unvested and vested but unissued).
|
(3) |
Represents the number of outstanding PSU underlying shares that could be earned assuming target achievement of the applicable performance conditions.
|
(4) |
Remaining available as of December 31, 2018, not including accumulated fungible factor share reserve of 717,280.
|
(5) |
Not including fungible factor share reserve of 664,774.
|
(6) |
For grants after March 10, 2017, full value awards (equity awards other than stock options and stock appreciation rights) reduce the remaining available total by a
ratio of 1.67 shares for every one share issued in connection with such an award. The accumulated fungible factor share reserve from March 10, 2017 is 1,382,054, therefore reducing the 1,686,034 available shares to 303,980 shares
available to grant.
|
PROPOSAL 2 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
|
2018
|
2017
|
||||||
Audit fees
|
$
|
$752,840
|
$
|
830,108 |
|||
Audit-related fees
|
-
|
15,000
|
|||||
Tax fees
|
301,877
|
385,777
|
|||||
Total
|
$
|
$1,054,717
|
$
|
1,230,885
|
PROPOSAL 2 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
|
AUDIT COMMITTEE REPORT
|
Audit Committee of the Board,
|
|
Rudy Howard (Chair)
|
|
Pamela Craven
|
|
Ralph Faison
|
MANAGEMENT
|
Executive Officers
|
Age
|
Position
|
||
James Preuninger
|
59
|
Chief Executive Officer and Director
|
||
Thomas Conway
|
51
|
Chief Financial Officer
|
||
Nathan Pieri
|
53
|
Chief Product Officer
|
||
Other Executive Management
|
Age
|
Position
|
||
Ty Y. Bordner
|
54
|
SVP, Marketing and Business Development
|
||
Albert C. Cooke III
|
59
|
SVP, Managing Director EMEA
|
||
Kae-por F. Chang
|
58
|
Managing Director, Amber Road China
|
||
Claude Correll
|
47
|
Vice President, Global Engineering
|
||
Glenn T. Gorman
|
59
|
Chief Information Officer
|
||
Brad Holmstrom
|
54
|
General Counsel and Corporate Secretary
|
||
William R. Jackowski
|
52
|
Vice President, Global Professional Services
|
||
Stephanie J. Miles
|
50
|
SVP, Commercial Services
|
MANAGEMENT
|
ANNUAL REPORT AND FORM 10-K
|
OTHER MATTERS
|
OTHER MATTERS
|
By Order of the Board of Directors
|
|
Barry M. V. Williams
|
|
Chairman of the Board
|
|
East Rutherford, New Jersey
|
|
March __,
2019
|
Name
|
Present Principal Occupation
|
|
Rudy C. Howard
|
Chief Financial Officer, vTv Therapeutics Inc.
|
|
Andre G.F. Toet
|
Owner, InsulaT
|
|
Kenneth H. Traub
|
Former Managing Partner, Raging Capital
|
|
Pamela F. Craven
|
Former (Retired) General Counsel, Avaya Inc.
|
|
Barry M. V. Williams
|
Former (Retired) Chief Executive Officer, P&O Nedlloyd
|
|
James W. Preuninger
|
Chief Executive Officer, Amber Road, Inc.
|
|
Ralph Faison
|
Former (Retired) President, Chief Executive Officer and Chairman of the Board, Pulse Electronics Corporation; Chairman of the Board of Directors
of Arlo Technologies, Inc.
|
Name
|
Present Principal Occupation
|
|
James W. Preuninger
|
Chief Executive Officer, Amber Road, Inc.
|
|
Thomas Conway
|
Chief Financial Officer, Amber Road, Inc.
|
|
Nathan Pieri
|
Chief Product Officer, Amber Road, Inc.
|
|
Brad Holmstrom
|
General Counsel, Amber Road, Inc.
|
ANNEX A: ADDITIONAL INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION
|
Name
|
Date
|
Title of Security
|
Number of
Shares
|
Transaction
|
||||
Thomas Conway
|
02/24/2017
|
Common Stock
|
8,816
|
Payment of Exercise Price or Tax Liability
|
||||
02/24/2017
|
Common Stock
|
10,555
|
Open Market Sale
|
|||||
05/11/2017
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
05/11/2017
|
Common Stock
|
4,843
|
Open Market Sale
|
|||||
06/12/2017
|
Restricted Stock Units
|
39,448
|
Grant, Award or Other Acquisition
|
|||||
06/12/2017
|
Employee Stock Option
|
94,353
|
Grant, Award or Other Acquisition
|
|||||
06/12/2017
|
Performance Stock Units
|
10,909
|
Grant, Award or Other Acquisition
|
|||||
08/10/2017
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
08/10/2017
|
Common Stock
|
4,843
|
Open Market Sale
|
|||||
10/06/2017
|
Restricted Stock Units
|
100,000
|
Grant, Award or Other Acquisition
|
|||||
11/10/2017
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
11/17/2017
|
Common Stock
|
4,843
|
Open Market Sale
|
|||||
12/07/2017
|
Common Stock
|
21,740
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
12/07/2017
|
Common Stock
|
21,740
|
Disposition to Issuer
|
|||||
02/12/2018
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
02/20/2018
|
Restricted Stock Units
|
69,731
|
Grant, Award or Other Acquisition
|
|||||
05/11/2018
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
05/15/2018
|
Common Stock
|
9,686
|
Open Market Sale
|
|||||
06/12/2018
|
Common Stock
|
9,862
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
06/12/2018
|
Common Stock
|
9,862
|
Open Market Sale
|
|||||
08/10/2018
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
08/13/2018
|
Common Stock
|
1,657
|
Open Market Sale
|
|||||
08/31/2018
|
Common Stock
|
3,186
|
Open Market Sale
|
|||||
09/07/2018
|
Common Stock
|
33,400
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
09/07/2018
|
Common Stock
|
11,262
|
Open Market Sale
|
|||||
09/11/2018
|
Common Stock
|
22,138
|
Open Market Sale
|
|||||
10/08/2018
|
Common Stock
|
25,000
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
10/09/2018
|
Common Stock
|
2,722
|
Open Market Sale
|
|||||
10/10/2018
|
Common Stock
|
998
|
Open Market Sale
|
|||||
11/10/2018
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
11/13/2018
|
Common Stock
|
1,500
|
Open Market Sale
|
|||||
11/15/2018
|
Common Stock
|
20,000
|
Open Market Sale
|
|||||
11/28/2018
|
Common Stock
|
3,123
|
Open Market Sale
|
|||||
02/11/2019
|
Common Stock
|
4,843
|
Exercise or Conversion of Exempt Derivative Security
|
ANNEX A: ADDITIONAL INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION
|
02/20/2019
|
Common Stock
|
17,432
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
03/07/2019
|
Common Stock
|
54,545
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
03/10/2019
|
Common Stock
|
19,986
|
Open Market Sale
|
|||||
Pamela Craven
|
08/07/2017
|
Restricted Stock Units
|
10,804
|
Grant, Award or Other Acquisition
|
||||
05/15/2018
|
Restricted Stock Units
|
9,595
|
Grant, Award or Other Acquisition
|
|||||
11/14/2018
|
Common Stock
|
2,000
|
Open Market Purchase
|
|||||
Ralph Faison
|
05/15/2018
|
Common Stock
|
3,000
|
Open Market Purchase
|
||||
05/15/2018
|
Restricted Stock Units
|
19,190
|
Grant, Award or Other Acquisition
|
|||||
Rudy Howard
|
08/07/2017
|
Restricted Stock Units
|
10,804
|
Grant, Award or Other Acquisition
|
||||
05/15/2018
|
Restricted Stock Units
|
9,595
|
Grant, Award or Other Acquisition
|
|||||
Nathan Pieri
|
02/21/2017
|
Common Stock
|
7,611
|
Payment of Exercise Price or Tax Liability
|
||||
05/11/2017
|
Common Stock
|
4,920
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
05/12/2017
|
Common Stock
|
4,920
|
Open Market Sale
|
|||||
06/12/2017
|
Restricted Stock Units
|
39,448
|
Grant, Award or Other Acquisition
|
|||||
06/12/2017
|
Employee Stock Option
|
94,353
|
Grant, Award or Other Acquisition
|
|||||
06/12/2017
|
Performance Stock Units
|
11,082
|
Grant, Award or Other Acquisition
|
|||||
08/10/2017
|
Common Stock
|
4,919
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
10/09/2017
|
Restricted Stock Units
|
100,000
|
Grant, Award or Other Acquisition
|
|||||
11/10/2017
|
Common Stock
|
4,920
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
02/12/2018
|
Common Stock
|
4,920
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
02/20/2018
|
Restricted Stock Units
|
69,731
|
Grant, Award or Other Acquisition
|
|||||
02/21/2018
|
Common Stock
|
1,501
|
Open Market Sale
|
|||||
05/11/2018
|
Common Stock
|
4,920
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
05/15/2018
|
Common Stock
|
4,920
|
Open Market Sale
|
|||||
06/12/2018
|
Common Stock
|
9,862
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
06/12/2018
|
Common Stock
|
9,862
|
Open Market Sale
|
|||||
08/10/2018
|
Common Stock
|
4,920
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
08/10/2018
|
Common Stock
|
4,920
|
Open Market Sale
|
|||||
10/08/2018
|
Common Stock
|
25,000
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
10/09/2018
|
Common Stock
|
7,400
|
Open Market Sale
|
|||||
11/10/2018
|
Common Stock
|
4,919
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
11/13/2018
|
Common Stock
|
1,438
|
Open Market Sale
|
|||||
11/26/2018
|
Common Stock
|
20,000
|
Open Market Sale
|
|||||
02/11/2019
|
Common Stock
|
4,920
|
Exercise or Conversion of Exempt Derivative Security
|
ANNEX A: ADDITIONAL INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION
|
02/20/2019
|
Common Stock
|
17,432
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
03/07/2019
|
Common Stock
|
55,410
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
James Preuninger
|
07/14/2017
|
Restricted Stock Units
|
97,013
|
Grant, Award or Other Acquisition
|
||||
07/14/2017
|
Performance Stock Units
|
136,537
|
Grant, Award or Other Acquisition
|
|||||
07/14/2017
|
Employee Stock Option
|
232,038
|
Grant, Award or Other Acquisition
|
|||||
09/07/2017
|
Common Stock
|
7,962
|
Open Market Sale
|
|||||
09/08/2017
|
Common Stock
|
6,100
|
Open Market Sale
|
|||||
09/11/2017
|
Common Stock
|
3,100
|
Open Market Sale
|
|||||
09/12/2017
|
Common Stock
|
10,300
|
Open Market Sale
|
|||||
09/13/2017
|
Common Stock
|
5,929
|
Open Market Sale
|
|||||
09/15/2017
|
Common Stock
|
36,609
|
Open Market Sale
|
|||||
02/20/2018
|
Restricted Stock Units
|
171,488
|
Grant, Award or Other Acquisition
|
|||||
05/15/2018
|
Common Stock
|
15,000
|
Open Market Sale
|
|||||
05/16/2018
|
Common Stock
|
20,000
|
Open Market Sale
|
|||||
05/17/2018
|
Common Stock
|
15,000
|
Open Market Sale
|
|||||
07/16/2018
|
Common Stock
|
24,253
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
07/17/2018
|
Common Stock
|
8,380
|
Open Market Sale
|
|||||
08/13/2018
|
Common Stock
|
12,500
|
Open Market Sale
|
|||||
08/14/2018
|
Common Stock
|
7,500
|
Open Market Sale
|
|||||
08/21/2018
|
Common Stock
|
10,000
|
Open Market Sale
|
|||||
11/16/2018
|
Common Stock
|
30,000
|
Open Market Sale
|
|||||
11/21/2018
|
Common Stock
|
20,000
|
Open Market Sale
|
|||||
11/26/2018
|
Common Stock
|
10,000
|
Open Market Sale
|
|||||
11/27/2018
|
Common Stock
|
10,000
|
Open Market Sale
|
|||||
11/28/2018
|
Common Stock
|
10,000
|
Open Market Sale
|
|||||
02/20/2019
|
Common Stock
|
42,872
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
02/20/2019
|
Common Stock
|
41,560
|
Payment of Exercise Price or Tax Liability
|
|||||
03/072019
|
Common Stock
|
682,685
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
Barry Williams
|
08/07/2017
|
Restricted Stock Units
|
13,806
|
Grant, Award or Other Acquisition
|
||||
05/15/2018
|
Restricted Stock Units
|
12,260
|
Grant, Award or Other Acquisition
|
|||||
Brad Holmstrom
|
2/24/2017
|
Common Stock
|
3,776
|
Open Market Sale to Cover Tax Liability
|
||||
5/12/2017
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
5/25/2017
|
Restricted Stock Units
|
13,812
|
Grant, Award or Other Acquisition
|
|||||
5/25/2017
|
Performance Stock Units
|
4,156
|
Grant, Award or Other Acquisition
|
|||||
5/25/2017
|
Employee Stock Options
|
15,357
|
Grant, Award or Other Acquisition
|
|||||
8/14/2017
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
11/10/2017
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
2/20/2018
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
ANNEX A: ADDITIONAL INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION
|
2/20/2018
|
Restricted Stock Units
|
28,409
|
Grant, Award or Other Acquisition
|
|||||
5/15/2018
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
5/15/2018
|
Common Stock
|
747
|
Open Market Sale to Cover Tax Liability
|
|||||
5/25/2018
|
Common Stock
|
3,455
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
6/6/2018
|
Common Stock
|
1,322
|
Open Market Sale to Cover Tax Liability
|
|||||
6/18/2018
|
Common Stock
|
500
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
8/10/2018
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
8/13/2018
|
Common Stock
|
712
|
Open Market Sale to Cover Tax Liability
|
|||||
11/13/2018
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
11/13/2018
|
Common Stock
|
695
|
Open Market Sale to Cover Tax Liability
|
|||||
2/12/2019
|
Common Stock
|
1,818
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
2/13/2019
|
Common Stock
|
742
|
Open Market Sale to Cover Tax Liability
|
|||||
2/20/2019
|
Common Stock
|
7,102
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
2/20/2019
|
Common Stock
|
2,000
|
Open Market Sale to Cover Tax Liability
|
|||||
3/7/2019
|
Common Stock
|
20,780
|
Exercise or Conversion of Exempt Derivative Security
|
|||||
3/12/2019
|
Common Stock
|
3,000
|
Open Market Sale to Cover Tax Liability
|
|||||
3/13/2019
|
Common Stock
|
1,000
|
Open Market Sale to Cover Tax Liability
|
|||||
3/14/2019
|
Common Stock
|
1,000
|
Exercise or Conversion of Exempt Derivative Security
|
ANNEX B: Reconciliation of Non-GAAP Measures to GAAP Measures
|
• |
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to
be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
• |
adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
• |
adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;
|
• |
adjusted EBITDA does not reflect interest or tax payments that may represent a reduction in cash available to us;
and
|
• |
other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its
usefulness as a comparative measure.
|
Year Ended December 31,
|
||||||||||||||||
2018
|
2017
|
2016
|
2015
|
|||||||||||||
Net loss
|
$
|
(13,602,520
|
)
|
$
|
(12,977,486
|
)
|
$
|
(18,726,726
|
)
|
$
|
(28,078,674
|
)
|
||||
Depreciation and amortization expense
|
4,979,615
|
5,386,789
|
6,590,343
|
7,575,783
|
||||||||||||
Interest expense
|
1,271,786
|
976,834
|
862,321
|
910,046
|
||||||||||||
Interest income
|
(8,741
|
)
|
(4,806
|
)
|
(57,126
|
)
|
(61,414
|
)
|
||||||||
Income tax expense
|
492,010
|
608,775
|
595,722
|
268,225
|
||||||||||||
EBITDA
|
(6,867,850
|
)
|
(6,009,894
|
)
|
(10,735,466
|
)
|
(19,386,034
|
)
|
||||||||
Stock-based compensation
|
12,275,166
|
6,077,869
|
5,467,890
|
6,460,302
|
||||||||||||
Puttable stock compensation
|
—
|
—
|
—
|
54,764
|
||||||||||||
Change in fair value of contingent consideration liability
|
—
|
18,525
|
30,469
|
(1,350,441
|
)
|
|||||||||||
Purchase accounting deferred revenue adjustment
|
—
|
—
|
69,095
|
1,530,719
|
||||||||||||
Acquisition compensation costs
|
—
|
—
|
1,419,885
|
946,590
|
||||||||||||
Acquisition related costs
|
—
|
—
|
5,420
|
1,259,351
|
||||||||||||
Adjusted EBITDA
|
$
|
5,407,316
|
$
|
86,500
|
$
|
(3,742,707
|
)
|
$
|
(10,484,749
|
)
|
ANNEX B: Reconciliation of Non-GAAP Measures to GAAP Measures
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Total revenue
|
$
|
85,166,053
|
$
|
73,076,110
|
$
|
73,161,190
|
||||||
Purchase accounting deferred revenue adjustment
|
—
|
—
|
69,095
|
|||||||||
Non-GAAP total revenue
|
$
|
85,166,053
|
$
|
73,076,110
|
$
|
73,230,285
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Net loss
|
$
|
(13,602,520
|
)
|
$
|
(12,977,486
|
)
|
$
|
(18,726,726
|
)
|
|||
Stock-based compensation
|
12,275,166
|
6,077,869
|
5,467,890
|
|||||||||
Change in fair value of contingent consideration liability
|
—
|
18,525
|
30,469
|
|||||||||
Purchase accounting deferred revenue adjustment
|
—
|
—
|
69,095
|
|||||||||
Acquisition compensation costs
|
—
|
—
|
1,419,885
|
|||||||||
Acquisition related costs
|
—
|
—
|
5,420
|
|||||||||
Non-GAAP adjusted net loss
|
$
|
(1,327,354
|
)
|
$
|
(6,881,092
|
)
|
$
|
(11,733,967
|
)
|
|||
Adjusted non-GAAP net loss per share:
|
||||||||||||
Basic and diluted
|
$
|
(0.05
|
)
|
$
|
(0.25
|
)
|
$
|
(0.44
|
)
|
|||
GAAP Weighted-average shares outstanding:
|
||||||||||||
Basic and diluted
|
27,825,795
|
27,415,953
|
26,718,882
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Loss from operations
|
$
|
(11,847,465
|
)
|
$
|
(11,396,683
|
)
|
$
|
(17,325,809
|
)
|
|||
Stock-based compensation
|
12,275,166
|
6,077,869
|
5,467,890
|
|||||||||
Change in fair value of contingent consideration liability
|
—
|
18,525
|
30,469
|
|||||||||
Purchase accounting deferred revenue adjustment
|
—
|
—
|
69,095
|
|||||||||
Acquisition compensation costs
|
—
|
—
|
1,419,885
|
|||||||||
Acquisition related costs
|
—
|
—
|
5,420
|
|||||||||
Non-GAAP adjusted income (loss) from operations
|
$
|
427,701
|
$
|
(5,300,289
|
)
|
$
|
(10,333,050
|
)
|