e10vkza
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 2)
| |
|
|
| þ |
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended December 31, 2006
OR
| |
|
|
| o |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 000-30698
SINA CORPORATION
(Exact Name of Registrant as specified in its charter)
| |
|
|
| Cayman Islands
|
|
N/A |
| (State or other jurisdiction of
|
|
(I.R.S. Employer Identification Number) |
| Incorporation or organization) |
|
|
Room 1802, United Plaza
1468 Nan Jing Road West
Shanghai 200040, China
(86-21) 6289 5678
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Ordinary Share, $0.133 par value
Ordinary Share Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule
405 of the Securities Act. þ Yes or No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Exchange Act. o Yes or No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated
filer” in Rule 12b-2 of the Exchange Act.
þ Large accelerated filer o Accelerated filer o Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o or No þ
The aggregate market value of the voting stock held by non-affiliates of the registrant was
approximately $902,285,443.72 as of June 30, 2006, based upon the closing sale price for our
ordinary shares as quoted by the NASDAQ Global Select Market reported for such date. Ordinary
shares held by each officer and director and by each person known to the registrant (based on
information provided by such persons and/or the most recent schedule 13D’s or 13G’s as filed by
such persons) to beneficially own 5% or more of the outstanding ordinary shares have been excluded
because such persons may be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of April 20, 2007, there were 54,668,454 shares of the registrant’s ordinary shares
outstanding, $0.133 par value.
EXPLANATORY NOTE
This Amendment No. 2 to the registrant’s annual report on Form 10-K for the fiscal year ended
December 31, 2006 is being filed in order to (i) amend and restate Part III. Item 11. Executive
Compensation to:
| |
• |
|
Amend and restate the Director Compensation Table to delete entries for
Charles Chao, Yan Wang and Hurst Lin and the corresponding footnotes since their
compensation for service as directors is fully disclosed in the Summary Compensation
Table; |
| |
| |
• |
|
Amend and restate footnote (2) to the Director Compensation Table to provide
the grant date fair value information for each option award granted
during the fiscal year ended December 31, 2006 and to provide the aggregate number of option awards
outstanding at fiscal year end; and |
| |
| |
• |
|
Correct a typographical error in the fifth line of second paragraph of
Compensation Committee Report on Executive Compensation by inserting the word “reviewed”
in place of the word “received”; |
and (ii) amend and restate Part IV. Item 15. Exhibits and Financial Statement Schedules to:
| |
• |
|
Update the certifications of certain executive officers as of the date of
this amendment in accordance with Rule 12b-15 under the Securities Exchange Act of 1934,
as amended; and |
| |
| |
• |
|
Incorporate by reference certain exhibits filed with the registrant’s annual
report on Form 10-K for the fiscal year ended December 31, 2006 filed on March 1, 2007
(“Original Form 10-K”). |
Except for the matters described above, this amendment does not modify or update disclosure
in, or exhibits to, (i) the Original Form 10-K or (ii) Amendment No. 1 to the registrant’s annual
report on Form 10-K for the fiscal year ended December 31, 2006 filed on April 30, 2007
(“Amendment No. 1”). Furthermore, except for the matters described above, this amendment
does not change any previously reported financial results, nor does it reflect events occurring
after the date of the Original Form 10-K or Amendment No. 1, as applicable. Any information not
affected by this amendment is unchanged and reflects the disclosures made at the time the Original
Form 10-K and Amendment No. 1 were filed, as applicable.
As used in this Amendment No. 2 to annual report on Form 10-K, unless the context otherwise
requires, the following terms shall have the meanings set forth below:
| |
• |
|
“We,” “us,” “our,” “SINA” and the “Company” refer to SINA Corporation |
| |
| |
• |
|
“Board of Directors” or “Board” means our Board of Directors |
| |
| |
• |
|
“SEC” means the Securities and Exchange Commission |
PART III
Item 11. Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
Philosophy
Our executive compensation program is designed to attract and retain qualified executive
management critical to the Company’s growth and long-term success, and reward them for superior
performance.
We believe that the compensation of our Named Executive Officers (as defined below under the
heading “Compensation of Executive Officers”) should reflect their success as individuals and as a
management team in attaining key operating objectives, such as growth of revenues and growth of
operating earnings, and ultimately, in attaining an increased value for our stock. We believe that
3
the performance of our Named Executive Officers in managing our company, considered in light
of general economic and specific company, industry and competitive conditions, should be the basis
for determining their total compensation. In allocating total compensation between cash
compensation and equity compensation, we focus on creating incentives geared to both short term and
long term performance, with the primary goal being to increase shareholder value over the long
term. We seek to align our Named Executive Officers’ compensation with the interest of the
Company’s shareholders to create value over the long-term through our stock option program. In
setting our Named Executive Officers’ cash and equity compensation, we intend to be competitive
with other similarly situated companies in our industry.
As part of its annual review of executive compensation, our Compensation Committee takes into
account each Named Executive Officer’s total compensation package from prior years, as well as
information contained in a market survey commissioned by the Company. The market survey analyzes
compensation for directors and executive officers at SINA’s peer companies who are determined by
reference to market cap and industry. Typically, our CEO makes compensation recommendations to the
Compensation Committee with respect to the executive officers who report to him. Such executive
officers are not present at the time of these deliberations. In general, the chairman of the
Compensation Committee makes compensation recommendations to the Compensation Committee with
respect to our CEO, who is absent from that meeting. The Compensation Committee may accept or
adjust such recommendations and also makes the sole determination for executive compensation.
Overview of Compensation and Process
Elements of compensation for our Named Executive Officers include: base salary, incentive cash
bonuses, stock option awards, and housing allowance.
Base Salary. The level of base salary is established primarily on the basis of the
individual’s qualifications and relevant experience, the strategic goals for which he or she has
responsibility, and the compensation levels at companies which compete with the Company for
business and executive talent. In January 2006, we review salaries annually and may adjust them
from time to time if needed to reflect individual performance, changes in position or
responsibility of the executives or changes in the market conditions and peer company compensation
levels. We commissioned a market survey of compensation for directors and executive officers at
SINA’s peer companies who are determined by market cap and industry. The market cap peer group
consisted of 12 companies with median market capitalization of $1,250,000,000 median sales of
$260,000,000 and median net income of $31,500,000, which was roughly equivalent to SINA’s market
capitalization, sales and net income. The industry peer group consisted of 10 companies with median
market capitalization of $690,000,000, median sales of $67,000,000 and median net income of
$$21,000,000. Since SINA’s market capitalization, median sales and net income was roughly
equivalent to the 75th percentile of the industry peer group, 75th percentile figures were used for
this analysis. The market survey concluded that the compensation level at SINA at the time was
below market when compared to the market cap peer group and industry peer group except for
long-term incentive compensation for our CEO (and as a result, overall compensation of our CEO),
which was above market, and overall compensation for our Chief Operating Officer, which was at
market. On June 7, 2006, the Compensation Committee approved an increase to the annual base
salaries, effective from June 2006, for Charles Chao, our CEO and President, from $260,000 to
RMB2,400,000 (equivalent to $301,102.79 assuming an exchange rate of RMB7.9707 for $1), and Herman
Yu, our Acting CFO, from $143,253 to RMB1,320,000 (equivalent to $165,606.53 assuming an exchange
rate of RMB7.9707 for $1). Company performance does not play a significant role in the
determination of base salary. The base salaries paid to our Named Executive Officers for 2006 are
shown in the Summary Compensation Table.
Incentive Cash Bonuses. Our Named Executive Officers are eligible to receive cash bonuses
which are paid on the basis of their success in achieving designated individual goals and the
Company’s success in achieving specific company-wide goals. Specifically, our Named Executive
Officers were eligible to earn a cash bonus based on 2006 Company performance pursuant to the 2006
Management Bonus Plan (the “2006 Bonus Plan”). Under the 2006 Bonus Plan, a total bonus pool of up
to 4% of 2006 pro-forma net income before taxes was established upon the satisfaction of certain
performance goals as follows:
Management Bonus Plan 2006
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
year-over-year |
|
year-over-year |
|
year-over-year |
|
year-over-year |
| |
|
growth rate |
|
growth rate |
|
growth rate |
|
growth rate |
Advertising revenue |
|
|
27 |
% |
|
|
31 |
% |
|
|
35 |
% |
|
|
40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus rate (1) |
|
|
0.50 |
% |
|
|
1.00 |
% |
|
|
1.50 |
% |
|
|
2.00 |
% |
Pro-forma Net income before tax |
|
|
-20 |
% |
|
|
-10 |
% |
|
|
0 |
% |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus rate (1) |
|
|
0.50 |
% |
|
|
1.00 |
% |
|
|
1.50 |
% |
|
|
2.00 |
% |
Total Bonus rate (1) |
|
|
1 |
% |
|
|
2 |
% |
|
|
3 |
% |
|
|
4 |
% |
|
|
|
| (1) |
|
Bonus calculation based on pro-forma net income before tax |
| |
| (2) |
|
Based on original operating plan, ad revenues growth for 2006 is 27% |
| |
| (3) |
|
Based on original operating plan, pro-forma net income for 2006 would be flat from 2005 |
4
Under the 2006 Bonus Plan, Charles Chao, our CEO and President, was eligible to receive up to
30% of the total bonus pool, and Herman Yu, our Acting CFO, was eligible to receive up to 6% of the
total bonus pool. The total actual payout under the 2006 Bonus Plan was RMB17.9 million. In
February 2007, the Compensation Committee gave the final approval for Mr. Chao to receive
RMB4,087,040 and Mr. Yu to receive RMB1,077,408 under the 2006 Bonus Plan. The actual payouts under
the 2006 Bonus Plan to our Named Executive Officers are shown in the Summary Compensation Table.
The Compensation Committee has established the 2007 Management Bonus Plan (the “2007 Bonus Plan”)
that contemplates a total cash bonus pool of up to 4% of 2007 pro-forma net income before taxes
based on substantially the same performance goal metrics as the 2006 Bonus Plan:
Cash bonuses may also be awarded to our Named Executive Officers on a discretionary basis at
any time, none of which was rewarded in 2006. While the Compensation Committee has granted
discretionary bonuses in the past, it is unlikely to do so going forward due to the adoption of the
2007 Bonus Plan and the expectation that it will continue to adopt similar annual performance bonus
plans in the future.
Stock Option Awards. We grant stock options under our stock option plans to our Named
Executive Officers to provide them with an incentive to maximize long-term shareholder values. We
believe that stock options that give the recipient a significant equity stake in the Company
closely aligns his or her interests with those of the Company’s shareholders. Factors considered in
granting stock options to Named Executive Officers, including determining the appropriate size of
such grants, include the individual’s position in the Company, his or her performance and
responsibilities, and comparability considerations with SINA’s market cap peer group and industry
peer group. In 2006, comparability was based on the market survey completed in January of 2006,
which concluded that the long-term incentive value for our Named Executive Officers at the time was
below market when compared to our market cap peer group and industry peer group, except for our CEO
position, whose long-term incentive value was above market when compared to SINA’s industry peer
group. Each stock option grant allows the Named Executive Officer to acquire Company ordinary
shares at a per share price equal to the closing selling price per share of the Company’s ordinary
shares on the Nasdaq National Market on the date of grant over a specified period of time (up to 10
years). The stock options typically vest in periodic installments over a four-year period,
contingent upon the Named Executive Officer’s continuous service with the Company or certain
affiliates of the Company, although very rarely exceptions may be made when deemed necessary or
appropriate. There has been only one exception within the last three years, pursuant to which
Charles Chao, our CEO and President, received his 2006 award with a three-year vesting schedule
detailed below. Accordingly, a stock option will provide a realizable benefit to the Named
Executive Officer only if he or she remains in the Company’s service, and then only if the market
price of the Company’s ordinary shares appreciates over the stock option term.
We have not adopted any specific policy regarding the amount of stock option grants to be
awarded to our Named Executive Officers or the timing of such stock option grants. Stock option
grants awarded to our Named Executive Officers and other key employees are typically granted
annually in conjunction with the review of the individual performance of each of our employees and
a review of a market survey commissioned by the Company.
On June 7, 2006, the Compensation Committee granted stock options to each of the following
Named Executive Officers: Charles Chao, our CEO and President, 390,000 shares, Herman Yu, our
Acting CFO, 75,000 shares, and Benjamin Tsiang, our Executive Vice President, 60,000 shares,
pursuant to the Company’s 1999 Stock Plan, at an exercise price of $24.73 per share, which
represents the closing selling
price per share of the Company’s ordinary shares on the Nasdaq National Market on June 7, 2006.
These options have a term of 6 years, but are subject to earlier termination in connection with
termination of continuous service with the Company or certain affiliates of the Company. The stock
option granted to Mr. Chao vests over a three-year term with 1/6th of the shares covered by the
option vesting on the 6-month anniversary of the date of the grant and the remaining shares vesting
ratably on a monthly basis over the remaining term of the option. The stock option granted to each
of Mr. Yu and Mr. Tsiang vests over a four-year term with 12.5% of the shares covered by the option
vesting on the 6-month anniversary of the date of the grant and the remaining shares vesting
ratably on a monthly basis over the remaining term of the option.
5
The dollar amount recognized as compensation cost for financial statement reporting purposes
for year 2006 with respect to stock
option awards (determined in accordance with SFAS 123R without regard to estimated forfeitures
and thus include amounts from awards prior to 2006) is set forth in the Summary Compensation Table.
Information concerning number of options held by each Named Executive Officer as of December 31,
2006 is set forth in the Outstanding Equity Awards at Fiscal Year-End Table.
Housing Allowance and Other Benefits. Each of our Named Executive Officers receives a modest
housing allowance each year. The actual housing allowances provided to our Named Executive Officers
are reported in the Summary Compensation Table. We otherwise do not generally differentiate the
benefits that we offer our executives from the benefits we offer our other employees. We also do
not maintain any executive retirement programs, such as executive pension plans, deferred
compensation plans, or other executive retirement benefits.
Change of Control and Severance Agreements. Certain of our Named Executive Officers receives
cash payments and other benefits upon the occurrence of termination of employment or a change of
control of the Company when certain conditions are satisfied. These arrangements are reported below
under the heading “Potential Payments upon Termination or Change of Control.”
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by (a) the individuals who served as the
Company’s principal executive officer during the fiscal year ended December 31, 2006, (b) the
individual who served as the Company’s principal financial officer during the fiscal year ended
December 31, 2006, (c) the only other individual who were serving as an executive officer of the
Company at the end of the fiscal year ended December 31, 2006, and (d) the individual who would
have been one of the three other most highly compensated executive officers at the end of the
fiscal year ended December 31, 2006 if he had been serving as an executive officer at such time
(collectively the “Named Executive Officers”).
Summary Compensation Table
SUMMARY COMPENSATION TABLE
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-equity |
|
pension value |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive |
|
and non- |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
plan |
|
qualified |
|
All other |
|
|
| Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option |
|
compensation |
|
deferred |
|
compensation |
|
|
| principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
awards ($) |
|
($) |
|
compensation |
|
($) |
|
|
| position (1) |
|
Year |
|
Salary ($) |
|
Bonus ($) |
|
awards ($) |
|
(3) |
|
(4) |
|
earnings ($) |
|
(5) |
|
Total ($) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
Charles Chao,
CEO &
President |
|
|
2006 |
|
|
|
283,976 |
|
|
|
— |
|
|
|
— |
|
|
|
1,314,760 |
|
|
|
512,758 |
|
|
|
— |
|
|
|
38,846 |
|
|
|
2,150,340 |
|
Yan Wang, CEO |
|
|
2006 |
|
|
|
87,500 |
|
|
|
— |
|
|
|
— |
|
|
|
692,933 |
|
|
|
— |
|
|
|
— |
|
|
|
35,000 |
|
|
|
815,433 |
|
Herman Yu,
Acting CFO |
|
|
2006 |
|
|
|
156,293 |
|
|
|
— |
|
|
|
— |
|
|
|
257,295 |
|
|
|
135,171 |
|
|
|
— |
|
|
|
34,627 |
|
|
|
583,386 |
|
Hurst Lin,
Chief Operating Officer |
|
|
2006 |
|
|
|
57,212 |
|
|
|
— |
|
|
|
— |
|
|
|
302,697 |
|
|
|
— |
|
|
|
— |
|
|
|
27,500 |
|
|
|
387,409 |
|
Benjamin Tsiang,
Executive Vice President, Product
Development |
|
|
2006 |
|
|
|
110,000 |
|
|
|
— |
|
|
|
— |
|
|
|
266,066 |
|
|
|
— |
|
|
|
— |
|
|
|
24,000 |
|
|
|
400,066 |
|
|
|
|
| (1) |
|
Employment. Amounts in the Summary Compensation Table and in the accompanying footnotes
reflect the following: |
| |
• |
|
Mr. Chao became the CEO of the Company effective May 8, 2006. Prior to that date, Mr.
Chao served as the Company’s President and CFO. In connection with his appointment as the
Company’s CEO, Mr. Chao resigned as the CFO of the Company, but has remained as the
Company’s President. |
| |
| |
• |
|
Mr. Wang resigned as an employee and as the CEO of the Company effective May 8, 2006, but
he has remained as a director of the Company. The compensation paid to Mr. Wang for his
service as a non-employee director since his resignation as the Company’s CEO is included
herein. |
| |
| |
• |
|
Mr. Yu became the Company’s Acting CFO effective May 8, 2006. The compensation paid to
Mr. Yu prior to his appointment as the Company’s Acting CFO is included herein. |
| |
| |
• |
|
Mr. Lin resigned as an employee and as the Chief Operating Officer of the Company
effective March 31, 2006, but he has remained as a director of the Company. The compensation
paid to Mr. Lin for his service as a non-employee director since his resignation as the
Company’s Chief Operating Officer is included herein. |
| |
| |
• |
|
Mr. Tsiang resigned as an employee and as the Company’s Executive Vice President
effective February 1, 2007. |
6
(2) Salary.
| |
• |
|
Mr. Chao received $108,333 for his service from January to May 2006 based on an annual
base salary of $260,000 and $175,643 for his service from June to December 2006 based on an
annual base salary of RMB2,400,000 (equivalent to $301,102.79 assuming an exchange rate of
RMB7.9707 for $1). |
| |
| |
• |
|
Mr. Yu received $59,689 for his service from January to May 2006 based on an annual base
salary of $143,253 and $96,604 for his service from June to December 2006 based on an annual
base salary of RMB1,320,000 (equivalent to $163,606.53 assuming an exchange rate of
RMB7.9707 for $1). |
| |
| |
• |
|
The amount listed for Mr. Lin includes $13,462 paid for his accrued vacation time upon
his termination. |
(3) Option Awards.
| |
• |
|
The amounts in this column reflect the expense recognized for financial statement
reporting purposes for the fiscal year ended December 31, 2006, in accordance with SFAS 123R
without regard to estimated forfeitures and thus include amounts from awards prior to 2006.
For a more detailed discussion on the valuation model and assumptions used to calculate the
fair value of our options, refer to note 13 of our 2006 Annual Report on Form 10-K filed on
March 1, 2007. |
| |
| |
• |
|
The amount listed for Mr. Wang includes the expense recognized from the awards made prior
to the termination of his employee status. These awards have remained outstanding due to his
continuous service to the Company as a non-employee director. |
| |
| |
• |
|
The amount listed for Mr. Lin includes the expense recognized from the awards made prior
to the termination of his employee status. These awards have remained outstanding due to his
continuous service to the Company as a non-employee director. |
| (4) |
|
Non-Equity Incentive Plan Compensation. The amounts in this column reflect the bonuses
provided to our named executive officers pursuant to our 2006 Management Bonus Plan. The
bonuses were paid in February 2007 in RMB and converted to U.S. dollars based for purpose of
this disclosure on an average exchange rate of RMB7.9707 for $1. |
(5) All Other Compensation.
| |
• |
|
Mr. Chao received $12,500 as the housing allowance for the period from January to May
2006 and $26,346 (this amount was paid in RMB and converted to U.S. dollars for purpose of
this disclosure based on an average exchange rate of RMB7.9707 for $1) as the housing
allowance for the period from June to December 2006. |
| |
| |
• |
|
Mr. Wang received $15,000 as the housing allowance prior to the termination of his
employee status. Mr. Wang also received a $20,000 fee for his service as a non-employee
director after the termination of his employee status. |
| |
| |
• |
|
Mr. Yu received this amount as the housing allowance in 2006. This amount was paid in RMB
and converted to U.S. dollars for purpose of this disclosure based on an average exchange
rate of RMB7.9707 for $1. |
| |
| |
• |
|
Mr. Lin received $7,500 as the housing allowance prior to the termination of his employee
status and received a $20,000 fee for his service as a non-employee director after the
termination of his employee status. |
| |
| |
• |
|
Mr. Tsiang received this amount as the housing allowance in 2006. |
GRANT OF PLAN-BASED AWARDS
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
All Other |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
Option |
|
|
|
|
|
Grant |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
Awards: |
|
Exercise |
|
Date Fair |
| |
|
|
|
|
|
Estimated Future Payouts Under |
|
|
|
|
|
|
|
|
|
|
|
|
|
of |
|
Number of |
|
or Base |
|
Value of |
| |
|
|
|
|
|
Non-Equity Incentive Plan |
|
Estimated Future Payouts Under |
|
Shares |
|
Securities |
|
Price of |
|
Stock and |
| |
|
|
|
|
|
Awards |
|
Equity Incentive Plan Awards |
|
of Stock |
|
Underlying |
|
Option |
|
Option |
| |
|
Grant |
|
Threshold |
|
Target |
|
Maximum |
|
Threshold |
|
Target |
|
Maximum |
|
Units |
|
Options |
|
Awards |
|
Awards |
| Name |
|
Date |
|
($) |
|
($) |
|
($) |
|
(#) |
|
(#) |
|
(#) |
|
(#) |
|
(#) |
|
($/Sh) |
|
(1) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
|
(k) |
|
(l) |
Charles Chao |
|
|
6/7/2006 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
390,000 |
|
|
|
24.73 |
|
|
|
5,378,412 |
|
Yan Wang |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman Yu |
|
|
6/7/2006 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
75,000 |
|
|
|
24.73 |
|
|
|
1,054,500 |
|
Hurst Lin |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Benjamin Tsiang |
|
|
6/7/2006 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
60,000 |
|
|
|
24.73 |
|
|
|
843,600 |
|
|
|
|
| (1) |
|
The amounts in this column represent the grant date fair value of each stock option granted
during 2006 as determined in accordance with SFAS 123R using the Black-Scholes pricing model.
The option awarded to Mr. Chao had a grant date present value of $13.7908 per option share and
the options awarded to Mr. Yu and Mr. Tsiang had a grant date present value of $14.06 per
option share. For a more detailed discussion on the valuation model and assumptions used to
calculate the fair value of our options, refer to note 13 of our 2006 Annual Report on Form
10-K filed on March 1, 2007. |
7
Except for the options granted under our 1999 Directors’ Stock Option Plan to our Named
Executive Officers who became non-employee Directors during 2006, all options granted by us during
2006 were granted under our 1999 Stock Plan. Options granted during 2006 were granted at an
exercise price equal to the fair market value of our ordinary shares on the date of grant of the
options.
These options have a term of 6 years, but are subject to earlier termination in connection
with termination of continuous service to the Company. Optionees may pay the exercise price by
cash, check, or delivery of already-owned ordinary shares in the capital of the Company. Except for
the option granted to Charles Chao, options granted to the Named Executive Officers vest over a
four-year vesting period with 12.5% of the shares covered by the options vesting on the 6-month
anniversary of the date of the grant and the remaining shares vesting ratably on a monthly basis
over the remaining vesting period of the options. The option granted to Charles Chao vests over a
three-year vesting period with 1/6th of the shares covered by the option vesting on the 6-month
anniversary of the date of the grant and the remaining shares vesting ratably on a monthly basis
over the remaining vesting period of the option. For a discussion of treatment of certain options
in the event of a change of control transaction, see the discussion under “Terms of Potential
Payments — Change of Control” below.
We have entered into an Employment Agreement with Charles Chao dated July 31, 2006. This
agreement has a term of three years and it may be extended for an additional one-year period after
the end of the original term.
Under the Employment Agreement, (i) Mr. Chao is entitled to a monthly salary of RMB200,000,
which is equivalent to RMB2,400,000 on an annualized basis; and (ii) in the discretion of the
Board, or its Compensation Committee, in good faith, Mr Chao may be eligible for incentive bonuses
based upon the extent to which Mr. Chao’s individual performance objectives, the Company’s
profitability objectives and other financial and non-financial objectives are achieved during the
applicable bonus period. Mr. Chao is also eligible to participate in any stock option or other
incentive programs available to officers or employees of the Company, as well as the Company’s
employee benefit plans of general application.
Outstanding Equity Awards At Fiscal Year-End
The following table provides information concerning unexercised options, stock that has not
vested, and equity incentive plan awards for each Named Executive Officer outstanding as of the end
of the fiscal year ended December 31, 2006 on an award-by-award basis.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Option awards |
|
Stock awards |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive |
| |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
plan awards: |
| |
|
|
|
|
|
|
|
|
|
incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive plan |
|
market or |
| |
|
|
|
|
|
|
|
|
|
plan awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
awards: |
|
payout value |
| |
|
Number of |
|
Number of |
|
number of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
number of |
|
of unearned |
| |
|
securities |
|
securities |
|
securities |
|
|
|
|
|
|
|
|
|
Number of |
|
Market value |
|
unearned |
|
shares, units |
| |
|
underlying |
|
underlying |
|
underlying |
|
|
|
|
|
|
|
|
|
shares or units |
|
of shares or |
|
shares, units or |
|
or other |
| |
|
unexercised |
|
unexercised |
|
unexercised |
|
Option |
|
Option |
|
of stock that |
|
units of stock |
|
other rights |
|
rights that |
| |
|
options (#) |
|
options (#) |
|
unearned |
|
exercise price |
|
expiration |
|
have not |
|
that have not |
|
that have not |
|
have not |
| Name |
|
exercisable |
|
unexercisable |
|
options (#) |
|
($) |
|
date |
|
vested (#) |
|
vested ($) |
|
vested (#) |
|
vested ($) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
Charles Chao |
|
|
235 |
|
|
|
— |
|
|
|
|
|
|
|
6.5 |
|
|
|
10/30/2010 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
8,483 |
|
|
|
— |
|
|
|
|
|
|
|
3.125 |
|
|
|
1/8/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500 |
|
|
|
— |
|
|
|
|
|
|
|
1.35 |
|
|
|
8/29/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,750 |
|
|
|
— |
|
|
|
|
|
|
|
1.88 |
|
|
|
8/14/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,948 |
|
|
|
— |
|
|
|
|
|
|
|
1.5 |
|
|
|
3/29/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,084 |
|
|
|
12,500 |
|
|
|
|
|
|
|
17.5 |
|
|
|
6/16/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,000 |
|
|
|
325,000 |
|
|
|
|
|
|
|
24.73 |
|
|
|
6/7/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,208 |
|
|
|
19,792 |
|
|
|
|
|
|
|
24.23 |
|
|
|
7/27/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yan Wang |
|
|
2,917 |
|
|
|
— |
|
|
|
|
|
|
|
3.125 |
|
|
|
1/8/2011 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
120,833 |
|
|
|
79,167 |
|
|
|
|
|
|
|
24.23 |
|
|
|
7/27/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,990 |
|
|
|
— |
|
|
|
|
|
|
|
7.33 |
|
|
|
10/5/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,593 |
|
|
|
— |
|
|
|
|
|
|
|
7.33 |
|
|
|
10/5/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman Yu |
|
|
19,687 |
|
|
|
15,313 |
|
|
|
|
|
|
|
20.86 |
|
|
|
9/7/2014 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
9,375 |
|
|
|
65,625 |
|
|
|
|
|
|
|
24.73 |
|
|
|
6/7/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hurst Lin |
|
|
20,433 |
|
|
|
— |
|
|
|
|
|
|
|
1.88 |
|
|
|
8/14/2012 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
30,208 |
|
|
|
19,792 |
|
|
|
|
|
|
|
24.23 |
|
|
|
7/27/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,500 |
|
|
|
12,500 |
|
|
|
|
|
|
|
17.5 |
|
|
|
6/16/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benjamin |
|
|
3,333 |
|
|
|
4,167 |
|
|
|
|
|
|
|
15.47 |
|
|
|
5/29/2013 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Tsiang |
|
|
7,500 |
|
|
|
52,500 |
|
|
|
|
|
|
|
24.73 |
|
|
|
6/7/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,875 |
|
|
|
11,875 |
|
|
|
|
|
|
|
24.23 |
|
|
|
7/27/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
Option Exercises And Stock Vested
The following table provides certain information concerning each exercise of stock options,
stock appreciation rights and similar instruments, and each vesting of stock, including restricted
stock, restricted stock units and similar instruments, for the twelve-month period ended December
31, 2006 for each Named Executive Officer on an aggregated basis.
OPTION EXERCISES AND STOCK VESTED
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Option awards |
|
Stock awards |
| |
|
Number of shares |
|
|
|
|
|
Number of |
|
|
| |
|
acquired on exercise |
|
Value realized on |
|
shares acquired on |
|
Value realized on |
| Name |
|
(#) |
|
exercise ($) |
|
vesting (#) |
|
vesting ($) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
Charles Chao |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Yan Wang |
|
|
130,000 |
|
|
|
3,525,932 |
|
|
|
— |
|
|
|
— |
|
Herman Yu |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Hurst Lin |
|
|
133,734 |
|
|
|
2,422,664 |
|
|
|
— |
|
|
|
— |
|
Benjamin Tsiang |
|
|
31,250 |
|
|
|
596,361 |
|
|
|
— |
|
|
|
— |
|
Potential Payments upon Termination or Change of Control
Terms of Potential Payments — Termination
Charles
Chao
In the event that Mr. Chao’s employment is terminated without cause or if a constructive
termination occurs (either event, an “Involuntary Termination”), Mr. Chao shall be entitled to
receive payment of severance benefits equal to his regular monthly salary for (i) 18 months if the
remaining term of the Employment Agreement (the “Remaining Term”) is more than or equal to 18
months, (ii) the Remaining Term if the Remaining Term is less than 18 months but more than 12
months, or (iii) 12 months if the Remaining Term is equal to or less than 12 months (the “Severance
Period”), provided that Mr. Chao executes a release agreement at the time of such termination. An
amount equal to 6 months of such severance benefits shall be paid on the 6-month anniversary of the
termination date, and the remaining severance benefits shall be paid ratably over the remaining
Severance Period in accordance with the Company’s standard payroll schedule. Additionally, upon an
Involuntary Termination, Mr. Chao will be entitled to receive any bonus earned as of the date of
such termination, which amount shall be paid on the 6-month anniversary of Mr. Chao’s termination
date. The
Company will also reimburse Mr. Chao over the Severance Period for health insurance benefits
with the same coverage provided to Mr. Chao prior to his termination, provided that reimbursement
for the first 6 months of the Severance Period shall be paid on the 6-month anniversary of Mr.
Chao’s termination date and reimbursement for any remaining health insurance benefits shall be paid
on the first day of each month during which Mr. Chao receives such health insurance benefits. Any
unvested stock options or shares of restricted stock held by Mr. Chao as of the date of his
Involuntary Termination will vest as to that number of shares that Mr. Chao would have vested
during the Severance Period if he had continued employment with the Company through such period,
and Mr. Chao shall be entitled to exercise any such stock options through the date that is the
later of (x) the 15th day of the third month following the date the stock options would otherwise
expire, or (y) the end of the calendar year in which the stock options would otherwise expire. Mr.
Chao is not eligible for any severance benefits if his employment is terminated voluntarily or if
he is terminated for cause.
In the event that Mr. Chao voluntarily elects to terminate his employment, Mr. Chao will
receive payment(s) for all salary and unpaid vacation accrued as of the date of his termination of
employment and his benefits will be continued in accordance with our then-existing benefits plans
and policies in effect on the date of termination and in accordance with applicable law. In the
event that Mr. Chao’s employment is terminated for cause, then he shall not be entitled to receive
payment of any severance benefits, but he will receive payment(s) for all salary and unpaid
vacation accrued as of the date of such termination and his benefits will be continued in
accordance with our then-existing benefits plans and policies in effect on the date of termination
and in accordance with applicable law.
9
In the event that Mr. Chao’s employment with the Company terminates as a result of his death
or disability, Mr. Chao’s estate or representative will receive the amount of Mr. Chao’s target
bonus for the fiscal year in which the death or disability occurs to the extent that the bonus has
been earned as of the date of such death or disability, as determined by the Board of Directors or
the Compensation Committee based on the specific corporate and individual performance targets
established for such fiscal year. In addition, the change of control agreement between the Company
and Mr. Chao, as further described below under “Terms of Potential Payments – Change of Control,”
provides that if the termination is by reason of death or disability, Mr. Chao will be entitled to
continued payment of his full base salary at the rate then in effect on the date of termination for
a period of one year from the date of termination.
During the term of the Employment Agreement and the Severance Period, if any, Mr. Chao has
agreed to certain covenants relating to non-competition and non-solicitation of business.
Additionally, during the term of the Employment Agreement and for 12 months thereafter, Mr. Chao
has agreed to the non-solicitation of any employees of the Company.
Under the terms of the Employment Agreement described above, if Mr. Chao had terminated his
employment on December 31, 2006, under circumstances where such termination is an Involuntary
Termination, it is estimated that he would have received payments of severance benefits in the
amount of RMB3,600,000, which is equal to his regular monthly salary for 18 months. Mr. Chao would
additionally receive an incentive bonus at approximately RMB4,087,040 if so determined by the Board
of Directors or the Compensation Committee pursuant to the Company’s 2006 Management Bonus Plan.
Mr. Chao would also be reimbursed for health insurance benefits valued at approximately $14,665.
Apart from the above, Mr. Chao would additionally receive benefits valued at approximately
$2,841,960, which reflects the expense that would have been recognized for financial statement
reporting purposes in accordance with SFAS 123R without regard to estimated forfeitures from the
continuous vesting of stock options as to the number of shares that would have vested during 18
months following December 31, 2006 (see note 13 of our 2006 Annual Report on Form 10-K filed on
March 1, 2007 for or a more detailed discussion on the valuation model and assumptions used to
calculate the fair value of our options).
If Mr. Chao had terminated his employment on December 31, 2006, under circumstances where such
termination is voluntary, for cause or by reason of death or disability, he would have received all
salary and unpaid vacation accrued in the amount of $14,615. Mr. Chao would additionally receive
the target bonus at approximately RMB4,087,040 and an annual base salary of RMB2,400,000 in the
event that his employment had been terminated by reason of death or disability.
Terms of Potential Payments — Change of Control
On February 1, 2001, the Company entered into a change of control agreement with Charles Chao.
Under this change of control agreement, in general, a change of control shall be deemed to occur if
(i) any person or entity acquires more than fifty percent or more of the combined voting power of
the Company’s outstanding securities, (ii) during any period of two consecutive years there is an
unwelcome change in a majority of the members of our board of directors, (iii) we merge or
consolidate with another organization (other than a merger where our shareholders continue to own
more than fifty percent of the combined voting power and with the
power to elect at least a majority of the board of directors), (iv) our shareholders approve a
complete liquidation or an agreement for the sale or disposition of all or substantially all of the
Company’s assets, (v) there occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange
Act.
The change of control agreement provides for certain severance benefits in the event of a
change of control as well as in the event of an involuntary termination after a change of control.
Upon a change of control in which the successor corporation does not assume outstanding options,
all such options shall become fully vested and exercisable. In addition, if Mr. Chao’s employment
with the Company terminates without cause or if he resigns for good reason (as such terms are
defined in the change of control agreements) within 24 months following a change of control, Mr.
Chao will receive a pro-rata amount of the full value of any targeted annual bonus for the year in
which he terminates, 100% of his annual base salary and 100% of his targeted annual bonus for the
year in which he terminates, reimbursement in full of the applicable insurance premiums for him and
his eligible dependents for first eighteen months that he and his dependents are eligible for
health insurance coverage if a continuance of health insurance benefits are elected, continued D&O
insurance coverage for six years after his termination, and an acceleration of all stock awards
that are unvested as of his termination date. The change of control agreement also provide for a
payment of an amount equal to the full value of the excise tax imposed by Section 4999 of the
Internal Revenue Code should the Executive be subject to the excise tax on golden parachute
payments under the Internal Revenue Code.
10
The table below summarizes the additional payments we would be obligated to make in a Change
of Control where the Executive’s employment terminated on December 31, 2006.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Lump sum payment of |
|
|
|
|
|
|
| |
|
Pro-rata target |
|
base salary and |
|
Health insurance |
|
Value of |
|
Excise tax gross-up |
| Name |
|
bonus ($) |
|
bonus ($) |
|
reimbursement ($) |
|
accelerated options |
|
($) |
Charles Chao |
|
RMB4,087,040 |
|
RMB2,400,000 |
|
$ |
14,665 |
|
|
$ |
1,518,720 |
(1) |
|
$ |
0 |
|
|
|
|
| (1) |
|
This amount was calculated by multiplying the number of unvested option held by Mr. Chao by
the difference between the closing market price of our ordinary shares on December 29, 2006,
which was $28.70, and the exercise price of the option. |
DIRECTOR COMPENSATION
Our Amended and Restated Articles of Association provide that our directors may be compensated
at the discretion of the Board of Directors. Our non-employee directors are eligible to participate
in our 1999 Directors’ Stock Option Plan (the “1999 Directors’ Plan”). The 1999 Directors’ Plan
provides for the grant to non-employee directors of (1) a nonstatutory share option to purchase
37,500 ordinary shares on the date on which a non-employee becomes a member of our Board of
Directors, and (2) an additional nonstatutory share option to purchase 15,000 shares on the date of
the annual general meeting for each Board member who has served on the Board of Directors for at
least six months prior to such date. The 1999 Directors’ Plan was amended, effective as of June 23,
2006, to provide for, in lieu of the grants described above, the grant to non-employee directors of
(1) a nonstatutory share option to purchase 30,000 ordinary shares on the date on which a
non-employee becomes a member of our Board of Directors, and (2) an additional nonstatutory share
option to purchase 12,000 shares on the date of the annual general meeting for each Board member
who has served on the Board of Directors for at least six months prior to such date. In addition,
effective as of June 23, 2006, each non-employee director shall receive an annual cash retainer of
$20,000, the Chair of the Audit Committee shall receive an additional annual cash retainer of
$5,000 and the Chair of the Compensation Committee shall receive an additional annual cash retainer
of $3,000. Currently, our employee directors are not entitled to any compensation in addition to
their employment compensation for serving on the Company’s Board of Directors.
The following table provides certain information concerning the compensation of directors for
the twelve-month period ended December 31, 2006.
DIRECTOR COMPENSATION
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in pension |
|
|
|
|
| |
|
Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
value and |
|
|
|
|
| |
|
earned or |
|
|
|
|
|
|
|
|
|
|
|
|
|
nonqualified |
|
|
|
|
| |
|
paid in |
|
|
|
|
|
Option awards |
|
|
|
|
|
deferred |
|
|
|
|
| |
|
cash |
|
Stock awards |
|
($) |
|
Non-equity incentive |
|
compensation |
|
All other |
|
|
| Name |
|
($) |
|
($) |
|
(2) |
|
plan compensation ($) |
|
earnings |
|
compensation ($) |
|
Total ($) |
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
Yongji Duan |
|
|
20,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
197,432 |
|
Pehong Chen |
|
|
20,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
197,432 |
|
Lip-Bu Tan |
|
|
23,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,432 |
|
Ter Fung Tsao |
|
|
20,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
197,432 |
|
Yichen Zhang |
|
|
20,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
197,432 |
|
Xiaotao Chen |
|
|
20,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
197,432 |
|
Song-Yi Zhang |
|
|
25,000 |
|
|
|
|
|
|
|
177,432 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
202,432 |
|
Daniel Chiang (1) |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
| (1) |
|
Mr. Chiang ceased serving on our Board of Directors as of March 7, 2006. |
| |
| (2) |
|
Option Awards. |
| |
• |
|
The amounts in this column reflect the expense recognized for financial statement
reporting purposes for the fiscal year ended December 31, 2006, in accordance with SFAS 123R
without regard to estimated forfeitures. Under SFAS 123R, the grant date fair value of each
option award is calculated on the date of grant using the Black-Scholes pricing model.
Messrs. Duan, Chen, Tan, Tsao, Zhang, Chen and Zhang were each granted an option to purchase
12,000 ordinary shares on June 23, 2006. Each such option award had an aggregate grant date
fair value of $177,432. For a more detailed discussion on the valuation model and
assumptions used to calculate the fair value of our options, refer to note 13 of our 2006
Annual Report on Form 10-K filed on March 1, 2007. |
11
| |
• |
|
The aggregate number of option awards held by each non-employee director and outstanding
at the end of the fiscal year ended December 31, 2006 are: Mr. Duan (42,500), Mr. Chen
(57,500), Mr. Tan (124,500), Mr. Tsao (94,500), Mr. Zhang (57,500), Mr. Chen (27,000) and
Mr. Zhang (64,500). |
Compensation Committee Interlocks and Insider Participation
No member of the compensation committee serves as a member of the board of directors or
compensation committee of any other entity that has one or more executive officers serving as a
member of our board of directors or compensation committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During the twelve-month period ended December 31, 2006, the Compensation Committee of our
Board of Directors consisted of Mr. Pehong Chen, Mr. Lip-Bu Tan, Mr. Yongji Duan and Mr. Yan Wang.
The members of the Compensation Committee are non-employee directors (Mr. Wang began serving as a
member of the Compensation Committee after the termination of his employee status) and, except for
Mr. Wang, are independent directors.
The Compensation Discussion & Analysis describes the compensation policies applicable to the
Company’s executive officers during the twelve-month period ended December 31, 2006. The
Compensation Committee is responsible for establishing and monitoring the general compensation
policies and compensation plans of the Company, as well as the specific compensation levels for
executive officers. It also administers the granting of options to executive employees under the
Company’s stock option plans. In light of the foregoing, the Compensation Committee reviewed and
discussed the Compensation Discussion and Analysis, with management. Based on the review and these
discussions, the Compensation Committee recommended to the Board that the Compensation Discussion
and Analysis be included in this Amendment No. 1 on Form 10-K.
Compensation Committee:
Pehong Chen
Lip-Bu Tan
Yongji Duan
Yan Wang
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Exhibits
See the Exhibit Index following the signature pages of this report.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934,
SINA Corporation has duly caused this report to be signed on its behalf by the undersigned, thereto
duly authorized.
| |
|
|
|
|
| |
SINA Corporation
|
|
| |
By: |
/s/ CHARLES CHAO
|
|
| |
|
Charles Chao |
|
| |
|
President and Chief Executive Officer |
|
| |
Date:
May 11, 2007
13
EXHIBIT INDEX
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
2.1
|
|
Stock Purchase Agreement dated February 24, 2004, among SINA, Crillion,
the shareholders of Crillion listed on Part I of Exhibit A of the Stock
Purchase Agreement and the individuals listed on Part II of Exhibit A of
the Stock Purchase Agreement (Filed as Exhibit 2.1 to the Company’s
Report on Form 8-K filed on April 7, 2004, and incorporated herein by
reference). |
|
|
|
2.2
|
|
Amendment Agreement dated March 23, 2004, among SINA, Crillion, the
shareholders of Crillion listed on Part I of Exhibit A of the Stock
Purchase Agreement and the individuals listed on Part II of Exhibit A of
the Stock Purchase Agreement (Filed as Exhibit 2.2 to the Company’s
Report on Form 8-K filed on April 7, 2004, and incorporated herein by
reference). |
|
|
|
2.3
|
|
Equity Transfer Agreement dated February 24, 2004, among the individuals
listed on Schedule A attached to the Equity Transfer Agreement, Shenzhen
Wang Xing Technology Co., Ltd., a limited liability company organized and
existing under the laws of the People’s Republic of China, and the
individuals listed on Schedule B attached to the Equity Transfer
Agreement (Filed as Exhibit 2.3 to the Company’s Report on Form 8-K filed
on April 7, 2004, and incorporated herein by reference). |
|
|
|
2.4
|
|
Stock Purchase Agreement dated July 1, 2004 among SINA Corporation,
Davidhill Capital Inc., the shareholders of Davidhill Capital Inc. listed
on Part I of Exhibit A to such agreement, and the company and individuals
listed on Part II of Exhibit A to such agreement. (Filed as Exhibit 2.1
to the Company’s Report on Form 8-K filed on October 22, 2004, and
incorporated herein by reference). |
|
|
|
2.5
|
|
Amendment Agreement dated October 13, 2004 among SINA Corporation,
Davidhill Capital Inc., the shareholders of Davidhill Capital Inc. listed
on Part I of Exhibit A to the Stock Purchase Agreement, and the company
and individuals listed on Part II of Exhibit A to the Stock Purchase
Agreement. (Filed as Exhibit 2.2 to the Company’s Report on Form 8-K
filed on October 22, 2004, and incorporated herein by reference). |
|
|
|
2.6
|
|
Asset Purchase Agreement dated July 1, 2004 by and between Guiyang
Longmaster Information Technology Co., Ltd. and Beijing Davidhill
Internet Technology Service Co., Ltd. (Filed as Exhibit 2.3 to the
Company’s Report on Form 8-K filed on October 22, 2004, and incorporated
herein by reference). |
|
|
|
3.1
|
|
Amended and Restated Articles of Association of SINA Corporation (Filed
as Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March
16, 2005 and incorporated by reference herein). |
|
|
|
3.2
|
|
Amended and Restated Memorandum of Association of SINA.com (Filed as
Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March
16, 2005 and incorporated by reference herein). |
|
|
|
4.1
|
|
Form of Subordinated Note due July 15, 2023 (Filed as Exhibit 4.1 to the
Company’s Report on Form 10-Q for the three month period ended June 30,
2003, and incorporated herein by reference). |
|
|
|
4.2
|
|
Indenture, dated as of July 7, 2003, by and between the Company and the
Bank of New York (Filed as Exhibit 4.2 to the Company’s Report on Form
10-Q for the three month period ended June 30, 2003, and incorporated
herein by reference). |
|
|
|
4.3
|
|
Registration Rights Agreement, dated as of July 7, 2003, by and between
the Company and Credit Suisse First Boston LLC (Filed as Exhibit 4.3 to
the Company’s Report on Form 10-Q for the three month period ended June
30, 2003, and incorporated herein by reference). |
|
|
|
4.4
|
|
Rights Agreement dated as of February 22, 2005 between SINA Corporation
and American Stock Transfer & Trust Company, as Rights Agent (Filed as
Exhibit 4.1 to the Company’s Report on Form 8-K filed on February 24,
2005, and incorporated herein by reference). |
|
|
|
10.1#
|
|
Form of Indemnification Agreement between SINA.com and each of its
officers and directors (Filed as Exhibit 10.1 to the Company’s
Registration Statement on Form F-1, Registration No. 333-11718, filed on
March 27, 2000, as amended, and incorporated herein by reference). |
|
|
|
10.2#
|
|
SRS International Ltd. 1997 Stock Option Plan and form of incentive stock
option agreement (Filed as Exhibit 10.2 to the Company’s Registration
Statement on Form F-1, Registration No. 333-11718, filed on March 27,
2000, as amended, and incorporated herein by reference). |
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
10.3#
|
|
Sinanet.com 1997 Stock Plan and form of stock option agreement (Filed as
Exhibit 10.3 to the Company’s Registration Statement on Form F-1,
Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference). |
|
|
|
10.4#
|
|
Amended SINA.com 1999 Stock Plan and form of share option agreement
(Filed as Exhibit 10.4 to the Company’s Registration Statement on Form
F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference). |
|
|
|
10.5#
|
|
Form of share option agreement under the amended SINA.com 1999 Stock Plan
(Filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed
on March 16, 2005 and incorporated by reference herein). |
|
|
|
10.6#
|
|
1999 Directors’ Stock Option Plan (Filed as Exhibit 10.6 to the Company’s
Registration Statement on Form F-1, Registration No. 333-11718, filed on
March 27, 2000, as amended, and incorporated herein by reference). |
|
|
|
10.7#
|
|
Form of nonstatutory stock option agreement under the 1999 Directors’
Stock Option Plan (Filed as Exhibit 10.6 to the Company’s Registration
Statement on Form F-1, Registration No. 333-11718, filed on March 27,
2000, as amended, and incorporated herein by reference). |
|
|
|
10.8#
|
|
SINA.com 1999 Executive Stock Plan (Filed as Exhibit 10.19 to the
Company’s Registration Statement on Form F-1, Registration No. 333-11718,
filed on March 27, 2000, as amended, and incorporated herein by
reference). |
|
|
|
10.9
|
|
Lease Agreement of Ideal International Plaza dated April 16, 2004 between
SINA Information Technology Company Limited and Beijing Zhongwu Ideal
Real Estate Development Co., Ltd. for the office located in Suite 01 —
12, Floor 20, Ideal International Plaza, 2 Zhongguancun High-Tech Square,
Beijing, PRC (Filed as Exhibit 10.1 to the Company’s Report on Form 10-Q
for the three month period ended June 30, 2004, and incorporated herein
by reference). |
|
|
|
10.10
|
|
Form Lease Agreement of Ideal International Plaza between the
Registrant’s subsidiaries or VIEs and Beijing Zhongwu Ideal Real Estate
Development Co., Ltd. for the office located in Ideal International
Plaza, 2 Zhongguancun High-Tech Square, Beijing, PRC, and the list of the
lease agreements (Filed as Exhibit 10.1 to the Company’s Report on Form
10-Q for the three month period ended September 30, 2004, and
incorporated herein by reference). |
|
|
|
10.11
|
|
Business Cooperation Agreement dated March 7, 2000 between Beijing SINA
Internet Information Services Co., Ltd. and BSRS (Filed as Exhibit 10.23
to the Company’s Registration Statement on Form F-1, Registration No.
333-11718, filed on March 27, 2000, as amended, and incorporated herein
by reference). |
|
|
|
10.12
|
|
Equipment and Leased Line Transfer Agreement dated March 7, 2000 between
Beijing SINA Internet Information Services Co., Ltd. and BSRS (Filed as
Exhibit 10.23 to the Company’s Registration Statement on Form F-1,
Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference). |
|
|
|
10.13
|
|
Advertising Agency Agreement dated March 7, 2000 between Beijing SINA
Internet Information Services Co., Ltd. and SINA.com (Filed as Exhibit
10.26 to the Company’s Registration Statement on Form F-1, Registration
No. 333-11718, filed on March 27, 2000, as amended, and incorporated
herein by reference). |
|
|
|
10.14
|
|
Advertisement Production and Technical Service Agreement dated March 7,
2000 between Beijing Stone Rich Sight Information Technology Co., Ltd.
and Beijing SINA Interactive Advertising Co. Ltd (Filed as Exhibit 10.27
to the Company’s Registration Statement on Form F-1, Registration No.
333-11718, filed on March 27, 2000, as amended, and incorporated herein
by reference). |
|
|
|
10.15
|
|
Advertising Publication and Cooperation Agreement dated March 7, 2000
between Beijing SINA Internet Information Services Co., Ltd. and Beijing
SINA Interactive Advertising Co., Ltd (Filed as Exhibit 10.28 to the
Company’s Registration Statement on Form F-1, Registration No. 333-11718,
filed on March 27, 2000, as amended, and incorporated herein by
reference). |
|
|
|
10.16
|
|
Amendment to Advertising Agency Agreement dated April 1, 2000 between
Beijing SINA Interactive Advertising Co., Ltd. and SINA.com (Filed as
Exhibit 10.37 to the Company’s Registration Statement on Form F-1,
Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference). |
|
|
|
10.17
|
|
Amendment to Advertisement Publication and Cooperation Agreement dated
April 1, 2000 between Beijing SINA Interactive Advertising Co., Ltd. and
Beijing SINA Internet Information Services Co., Ltd (Filed as Exhibit
10.38 to the Company’s Registration Statement on Form F-1, Registration
No. 333-11718, filed on March 27, 2000, as amended, and incorporated
herein by reference). |
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
10.18
|
|
Amendment to Advertising Production and Technical Service Agreement dated
April 1, 2000 between Beijing Stone Rich Sight Information Technology
Co., Ltd. and Beijing SINA Interactive Advertising Co., Ltd (Filed as
Exhibit 10.39 to the Company’s Registration Statement on Form F-1,
Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference). |
|
|
|
10.19
|
|
E-Commerce Cooperation Agreement dated April 1, 2000 between Beijing
Stone Rich Sight Information Technology Co., Ltd. and Beijing SINA
Internet Information Services Co., Ltd (Filed as Exhibit 10.40 to the
Company’s Registration Statement on Form F-1, Registration No. 333-11718,
filed on March 27, 2000, as amended, and incorporated herein by
reference). |
|
|
|
10.20
|
|
Agreement on Short Message Service Cooperation dated November 12, 2002
between Guangzhou Media Message Technologies Inc. and Guangdong Mobile
Communications Corporation (Filed as Exhibit 10.37 to the Company’s
Report on Form 10-K for the year ended December 31, 2003, as amended, and
incorporated herein by reference). |
|
|
|
10.21
|
|
Monternet Short Message Cooperation Agreement dated April 28, 2003
between Beijing SINA Internet Information Services Co., Ltd. and Beijing
Mobile Communications Corporation (Filed as Exhibit 10.38 to the
Company’s Report on Form 10-K for the year ended December 31, 2003, as
amended, and incorporated herein by reference). |
|
|
|
10.22
|
|
Form of Loan Agreement between Beijing Sina Information Technology Co.,
Ltd (a subsidiary of the Company) and the Company’s employees for funding
the Variable Interest Entities controlled by the Company (Filed as
Exhibit 10.39 to the Company’s Report on Form 10-K for the year ended
December 31, 2003, as amended, and incorporated herein by reference). |
|
|
|
10.23
|
|
Form of Agreement on Authorization to Exercise Shareholder’s Voting Power
between Beijing Sina Information Technology Co., Ltd (a subsidiary of the
Company) and the Company’s employees in relation to Variable Interest
Entities controlled by the Company (Filed as Exhibit 10.40 to the
Company’s Report on Form 10-K for the year ended December 31, 2003, as
amended, and incorporated herein by reference). |
|
|
|
10.24
|
|
Technical Services Agreement dated September 1, 2003 between Beijing New
Media Information Technology Co., Ltd. and Guangzhou Media Message
Technologies Inc (Filed as Exhibit 10.41 to the Company’s Report on Form
10-K for the year ended December 31, 2003, as amended, and incorporated
herein by reference). |
|
|
|
10.25
|
|
Technical Cooperation Agreement dated September 28, 2003 between Beijing
New Media Information Technology Co., Ltd. and Guangzhou Media Message
Technologies Inc (Filed as Exhibit 10.42 to the Company’s Report on Form
10-K for the year ended December 31, 2003, as amended, and incorporated
herein by reference). |
|
|
|
10.26
|
|
Technical Services Agreement dated September 1, 2003 between Beijing New
Media Information Technology Co., Ltd. and Guangdong SINA Internet
Information Services Co., Ltd (Filed as Exhibit 10.43 to the Company’s
Report on Form 10-K for the year ended December 31, 2003, as amended, and
incorporated herein by reference). |
|
|
|
10.27
|
|
Technical Services Agreement dated January 10, 2003 between
Star-Village.com (Beijing) Internet Technology Limited and Guangzhou
Media Message Technologies Inc (Filed as Exhibit 10.44 to the Company’s
Report on Form 10-K for the year ended December 31, 2003, as amended, and
incorporated herein by reference). |
|
|
|
10.28
|
|
Technical Services Agreement dated January 1, 2003 between Beijing SINA
Internet Technology Services Co., Ltd. and Beijing SINA Internet
Information Services Co., Ltd (Filed as Exhibit 10.45 to the Company’s
Report on Form 10-K for the year ended December 31, 2003, as amended, and
incorporated herein by reference). |
|
|
|
10.29
|
|
Technical Services Agreement dated February 24, 2004 between Beijing New
Media Information Technology Co., Ltd. and Shenzhen Wang Xing Technology
Co., Ltd (Filed as Exhibit 10.1 to the Company’s Report on Form 10-Q for
the three month period ended March 31, 2004, and incorporated herein by
reference). |
|
|
|
10.30
|
|
Translation of Monternet Short Message Cooperation Agreement dated March
23, 2004 between Beijing SINA Internet Information Services Co., Ltd. and
Guangdong Mobile Communications Corporation (Filed as Exhibit 10.48 to
the Company’s Annual Report on Form 10-K filed on March 16, 2005 and
incorporated by reference herein). |
|
|
|
10.31
|
|
Translation of Technical Services Agreement dated January 1, 2005 between
SINA.com Technology (China) Co., Ltd. and Beijing SINA Infinity
Advertising Co., Ltd. (Filed as Exhibit 10.48 to the Company’s Report on
Form 10-K for the year ended December 31, 2005, and incorporated herein
by reference). |
|
|
|
10.32
|
|
Translation of Technical Services Agreement dated January 1, 2005 between
SINA.com Technology (China) Co., Ltd. and Beijing SINA Internet
Information Services Co., Ltd. (Filed as Exhibit 10.49 to the Company’s
Report on Form 10-K for the year ended December 31, 2005, and
incorporated herein by reference). |
|
|
|
10.33#
|
|
Change of Control Agreement dated November 27, 2000 with Yan Wang (Filed
as Exhibit 10.47 to the Company’s Report on Form 10-Q for the three month
period ended December 31, 2000, and incorporated herein by reference). |
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
10.34#
|
|
Change of Control Agreement dated November 27, 2000 with Hurst Lin (Filed
as Exhibit 10.46 to the Company’s Report on Form 10-Q for the three month
period ended December 31, 2000, and incorporated herein by reference). |
|
|
|
10.35#
|
|
Change of Control Agreement dated February 1, 2001 with Charles Chao
(Filed as Exhibit 10.48 to the Company’s Report on Form 10-Q for the
three month period ended March 31, 2001, and incorporated herein by
reference). |
|
|
|
10.36#
|
|
Employment Agreement dated July 31, 2006 between Charles Guowei Chao and
SINA Corporation (Filed as Exhibit 10.1 to the Company’s Report on Form
10-Q for the three month period ended September 30, 2006, and
incorporated herein by reference). |
|
|
|
21.1*
|
|
List of Subsidiaries. |
|
|
|
23.1*
|
|
Consent of Independent Registered Public Accounting Firm. |
|
|
|
23.2*
|
|
Consent of Jun He Law offices. |
|
|
|
24.1*
|
|
Power of Attorney (appears on the signature page of this report). |
|
|
|
31.1**
|
|
Certificate of Chief Executive Officer pursuant to Securities Exchange
Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2**
|
|
Certificate of Chief Financial Officer pursuant to Securities Exchange
Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1**
|
|
Certificate of Chief Executive Officer pursuant to 18 U.S.C. section 1350. |
|
|
|
32.2**
|
|
Certificate of Chief Financial Officer pursuant to 18 U.S.C. section 1350. |
|
|
|
| * |
|
Filed with the Company’s Report on Form 10-K for the fiscal year ended December 31, 2006 (which
report was filed on March 1, 2007). |
| |
| ** |
|
Filed herewith. |
| |
| # |
|
Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a)3. |