def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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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 §240.14a-12 |
TechTarget, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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TechTarget, Inc.
275 GROVE STREET
NEWTON, MA 02466
May 2, 2011
Dear Stockholder:
You are cordially invited to attend the 2011 Annual Meeting of Stockholders of TechTarget, Inc.,
which will be held at 10:00 a.m., local time, on Friday, June 24, 2011, at our corporate
headquarters at 275 Grove Street, Newton, MA 02466.
This year, we are pleased to again be using the U.S. Securities and Exchange Commission rule that
allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to
our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of
this Proxy Statement and our annual report on Form 10-K. The Notice will contain instructions on
how to access those documents and vote online. The Notice will also contain instructions on how
each stockholder can receive a paper copy of our proxy materials, including this Proxy Statement,
our annual report on Form 10-K and form of proxy. Using this distribution process conserves natural
resources and reduces the costs of printing and distributing our proxy materials.
We hope you will be able to attend and participate in the Annual Meeting.
Whether or not you plan to attend, it is important that your shares be represented and voted at the
Annual Meeting. As a stockholder of record, you may vote your shares by telephone, over the
Internet or by proxy card.
On behalf of your Board of Directors, I would like to thank you for your continued support and
interest in TechTarget, Inc.
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Sincerely,
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/s/ GREG STRAKOSCH
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Greg Strakosch |
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Chief Executive Officer |
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TechTarget, Inc.
275 GROVE STREET
NEWTON, MA 02466
Annual Meeting of Stockholders
to be held on June 24, 2011 at 10:00 a.m.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the board of directors of
TechTarget, Inc., also referred to in this Proxy Statement as the Company, TechTarget, we or
us, of proxies to be voted at our 2011 Annual Meeting of Stockholders, or the Annual Meeting,
to be held on Friday, June 24, 2011 at our corporate headquarters at 275 Grove Street, Newton, MA
02466 at 10:00 a.m., Eastern Time, and at any adjournment or adjournments thereof. Stockholders of
record of our common stock, $0.001 par value per share, as of the close of business on April 28,
2011 will be entitled to notice of, and to vote at, the Annual Meeting and any adjournment or
adjournments thereof. As of that date, there were 37,622,439 shares of our common stock issued and
outstanding and entitled to vote. Each share of common stock is entitled to one vote on any matter
presented at the Annual Meeting. Directions to the Companys corporate headquarters are available
at: http://www.techtarget.com/html/ab_directions.htm#newton.
If proxies in the accompanying form are properly executed and returned, the shares of common stock
represented thereby will be voted in the manner specified therein. If not otherwise specified, the
shares of common stock represented by the proxies will be voted: (i) FOR the election of the
nominees named below as directors (Agenda Item No. 1), (ii) FOR the ratification of BDO USA, LLP as
our independent registered public accounting firm (Agenda Item No. 2); (iii) FOR choice 3 to
recommend that a non-binding stockholder vote to approve the compensation of our executive officers
occur every three years (Agenda Item No. 3); and (iv) FOR approval of the compensation of our named
executive officers (Agenda Item No. 4); and (v) in the discretion of the persons named in the
enclosed form of proxy, on any other proposals which may properly come before the Annual Meeting or
any adjournment or adjournments thereof. Any stockholder who has submitted a proxy may revoke it
at any time before it is voted by written notice addressed to and received by our Corporate
Secretary, by submitting a duly executed proxy bearing a later date, by voting again over the
telephone or the Internet prior to 1:00 a.m., Eastern Time on June 24, 2011, or by electing to vote
in person at the Annual Meeting. The mere presence at the Annual Meeting of the person appointing a
proxy does not, however, revoke the appointment.
Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be Held on June 24, 2011:
This proxy statement and the 2010 Annual Report to Stockholders are available for viewing, printing and
downloading at www.envisionreports.com/TTGT
A copy of our annual report on Form 10-K (including the financial statements and schedules) for the
fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission, or SEC,
except for exhibits, will be furnished without charge to any stockholder upon written or oral
request to: TechTarget, Inc., 275 Grove Street, Newton, MA 02466 Attention: Corporate Secretary, or
by Telephone: (888) 274-4111. This proxy statement and our Annual Report on Form 10-K for the
fiscal year ended December 31, 2010 are also available on the SECs website at www.sec.gov.
Voting Procedures
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Q:
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What shares owned by me may be voted? |
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A:
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You may only vote the shares of our common stock owned by you as of the close of business on April 28, 2011, which is
the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting.
These shares include the following: |
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shares of common stock held directly in your name as the stockholder of record; and |
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shares of common stock held for you, as the beneficial owner, through a broker, bank or other nominee. |
3
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Q:
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What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
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A:
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Many of our stockholders hold their shares through a broker, bank or other nominee, rather than directly in their own
names. As summarized below, there are some distinctions between shares held of record and those owned beneficially. |
If your shares are registered directly in your name with our transfer agent, Computershare
Investor Services, you are considered, with respect to those shares, the stockholder of
record. As the stockholder of record, you have the right to grant your voting proxy to the
persons specified on the form of proxy card or to vote in person at the Annual Meeting. The
persons named in the proxy card will vote the shares you own in accordance with your
instructions on the proxy card you mail. If you return the card, but do not give any
instructions on a particular matter described in this Proxy Statement, the persons named in
the proxy card will vote the shares you own in accordance with the recommendations of our
board of directors. Alternatively, you may vote through the Internet or by telephone as
indicated on the website and the proxy card.
If your shares are held in a brokerage account or by a bank or other nominee, you are
considered the beneficial owner of shares held in street name, and the proxy materials are
being supplied to you by your broker or nominee who is considered, with respect to those
shares, the stockholder of record. As the beneficial owner, you have the right to direct
your broker or nominee how to vote. You are also invited to attend the Annual Meeting, but
since you are not the stockholder of record, you may not vote these shares in person at the
Annual Meeting unless you receive a proxy from your broker or nominee. Your broker or
nominee should have supplied a voting instruction card for you to use. If you wish to attend
the Annual Meeting and vote in person, please mark the box on the voting instruction card
received from your broker or nominee and return it to the broker or nominee so that you
receive a legal proxy to present at the Annual Meeting.
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Q:
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How may I vote my shares at the Annual Meeting? |
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A:
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You may vote shares held directly in your name as the stockholder of
record in person at the Annual Meeting. If you choose to vote in
person at the Annual Meeting, please bring the proxy card and proof of
identification with you to the Annual Meeting. You may vote shares
that you beneficially own if you receive and present at the Annual
Meeting a proxy from your broker or nominee, together with proof of
identification. Even if you plan to attend the Annual Meeting, we
recommend that you also submit your proxy as described below so that
your vote will be counted if you later decide not to attend the Annual
Meeting. |
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Q:
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How may I vote my shares without attending the Annual Meeting? |
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A:
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Whether you hold shares directly as the stockholder of record or as
the beneficial owner in street name, you may direct your vote without
attending the Annual Meeting. You may vote by granting a proxy or, for
shares held in street name, by submitting voting instructions to your
broker or nominee. In most instances, you will be able to do this over
the Internet, by telephone or by mail. |
Shares of common stock that are represented by a properly executed proxy, if such proxy is
received in time and not revoked, will be voted at the Annual Meeting according to the
instructions indicated in the proxy. If no instructions are indicated, the shares will be
voted FOR approval of the proposals listed on the proxy card (and in the case of Agenda Item
No. 3, for Choice 3). Discretionary authority is provided in the proxy as to any matters not
specifically referred to in the proxy. Our board of directors is not aware of any other
matters that are likely to be brought before the Annual Meeting. If other matters are
properly brought before the Annual Meeting, including a proposal to adjourn the Annual
Meeting to permit the solicitation of additional proxies in the event that one or more
proposals have not been approved by a sufficient number of votes at the time of the Annual
Meeting, the persons named in the enclosed proxy will vote on such matters in their own
discretion.
If you are a beneficial owner of common stock, please refer to the voting instruction card
included by your broker or nominee for applicable voting procedures.
4
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How may I revoke a proxy or an Internet or telephone vote? |
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A:
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A proxy may be revoked by executing a later-dated proxy card, by
voting again over the telephone or the Internet prior to 1:00 a.m.,
Eastern Time on June 24, 2011, by attending the Annual Meeting and
voting in person, or by giving written notice revoking the proxy to
our Corporate Secretary before it is exercised. Attendance at the
Annual Meeting will not automatically revoke a stockholders proxy.
All written notices of revocation or other communications with respect
to revocation of proxies should be addressed to TechTarget, Inc., 275
Grove Street, Newton, MA 02466, Attention: Corporate Secretary. If you
own your shares in street name your bank or brokerage firm should
provide you with appropriate instructions for changing your vote. |
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How does our board of directors recommend that I vote on the proposal
to elect the nominees to our board of directors? |
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A:
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Our board of directors unanimously recommends that stockholders vote
FOR this proposal at the Annual Meeting. |
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What is the quorum required for the Annual Meeting? |
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A:
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Holders of record of the common stock on April 28, 2011 are entitled to notice of, and to vote
at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. As of the record
date, 37,622,439 shares of common stock were outstanding. The presence, in person or by proxy duly
authorized, of the holders of a majority of the outstanding shares of common stock entitled to vote
at the Annual Meeting will constitute a quorum for the transaction of business at the Annual
Meeting. Shares of our common stock represented in person or by proxy, will be counted for the
purpose of determining whether a quorum exists. |
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Q:
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How are votes counted? |
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A:
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Each holder of common stock is entitled to one vote at the Annual Meeting on each matter to come before the Annual Meeting,
including the election of directors, for each share held by such stockholder as of the record date. Votes cast in person at
the Annual Meeting or by proxy, Internet vote or telephone vote will be tabulated by the inspector of election appointed
for the Annual Meeting, who will determine whether a quorum is present. |
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Q:
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What vote is required on the proposal to elect the nominees to our board of directors (Agenda Item No. 1)? |
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A:
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Individual director nominees are elected by a plurality of the votes of the shares present in person, by remote
communication, if applicable, or represented by proxy at the Annual Meeting and entitled to vote generally on the election
of directors. Accordingly, the directorships to be filled at the Annual Meeting will be filled by the nominees receiving
the highest number of votes. In the election of directors, votes may be cast for or withheld with respect to the nominee.
Broker non-votes (described below) will have no effect on the outcome of this proposal. Abstentions will be counted as a
vote against for purposes of determining whether the proposal is approved. |
If you hold shares through a broker, bank or other representative, generally the broker,
bank or representative may under certain circumstances vote your shares if you do not return
your proxy. Brokerage firms have discretionary authority to vote customers unvoted shares
on routine matters. If you do not return a proxy to your brokerage firm to vote your shares,
your brokerage firm may, on routine matters, either vote your shares or leave your shares
unvoted. Your brokerage firm cannot vote your shares on any matter that is not considered
routine. Electing the nominees to the board of directors is not considered a routine matter.
However, if your representative does not timely receive instructions, your representative
may only vote on those matters for which it has discretionary voting authority. If your
representative cannot vote your shares on a particular matter because it does not have
discretionary voting authority, this is a broker non-vote on that matter.
5
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Q:
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What vote is required to ratify the appointment of BDO USA, LLP as our
independent registered public accounting firm (Agenda Item No. 2)? |
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A:
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The appointment of BDO USA, LLP as our independent registered public
accounting firm will be ratified if we receive the affirmative vote of
a majority of shares present in person, by remote communication, if
applicable, or represented by proxy at the Annual Meeting and entitled
to vote generally. Broker non-votes will have no effect on the outcome
of this proposal. Abstentions will be counted as a vote against for
purposes of determining whether the proposal is approved. We believe
that Agenda Item No. 2, ratification of the appointment of BDO USA,
LLP as our independent registered public accounting firm for fiscal
2011, is a routine matter for this meeting. |
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What vote is required for recommendation of one of the three frequency options under the advisory vote on the frequency of
future executive compensation advisory votes (Agenda Item No. 3)? |
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A:
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The affirmative vote of the holders of a majority of the votes cast will be required for the recommendation of one of the
three frequency options under the advisory vote on the frequency of future executive compensation advisory votes.
Abstentions and broker non-votes will not be counted as votes in favor of, or with respect to, this proposal and will also
not be counted as votes cast. Accordingly, abstentions and broker non-votes will have no effect on the outcome of this
proposal. If none of the three frequency options receives the vote of the holders of a majority of the votes cast, we will
consider the frequency option (one year, two years or three years) receiving the highest number of votes cast by
stockholders to be the frequency that has been recommended by our stockholders. However, as described in more detail in
Agenda Item No. 3, because this proposal is non-binding, our Board may decide that it is in our best interest or the best
interest of our stockholders to hold future executive compensation advisory votes more or less frequently. Brokers do not
have discretionary voting with respect Agenda Item No. 3. |
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Q:
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What vote is required to approve of the advisory vote on executive compensation (Agenda Item No. 4)? |
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A:
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The affirmative vote of the holders of a majority of the votes cast will be required for approval of the advisory vote on
executive compensation. Abstentions and broker non-votes will not be counted as votes in favor of, or with respect to,
these proposals and will also not be counted as votes cast. Accordingly, abstentions and broker non-votes will have no
effect on the outcome of this proposal. Brokers do not have discretionary voting with respect Agenda Item No. 4. |
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Q:
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What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials or voting instruction card? |
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A:
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This means your shares are registered differently or are in more than one account. Please provide voting instructions for
all of your shares. |
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Q:
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Where can I find the voting results of the Annual Meeting? |
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A:
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We will announce preliminary voting results at the Annual Meeting and file a current report on Form 8-K within four
business days after the Annual Meeting. |
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Q:
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Is my vote confidential? |
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A:
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Proxy cards, ballots and voting tabulations that identify individual stockholders are submitted, mailed or returned to us
and handled in a manner intended to protect your voting privacy. Your vote will not be disclosed except: (1) as needed to
permit us to tabulate and certify the vote; (2) as required by law; or (3) in limited circumstances, such as a proxy
contest in opposition to the director candidate nominated by our board of directors. In addition, all comments written on
the proxy card or elsewhere will be forwarded to management, but your identity will be kept confidential unless you ask
that your name be disclosed. |
Annual Report to Stockholders
A copy of our annual report on Form 10-K for the year ended December 31, 2010, which contains our
financial statements, has been filed with the Securities and Exchange Commission, or the SEC, and
forms a part of the 2010 annual report to stockholders. Stockholders separately may obtain, free of
charge, a copy of the 2010 Form 10-K, without exhibits, by writing to TechTarget, Inc., 275 Grove
Street, Newton, MA 02466, Attention: Corporate Secretary. The annual report on Form 10-K is also
available through our website at www.techtarget.com. The annual report to stockholders and the 2010
Form 10-K are not proxy soliciting materials.
6
AGENDA ITEM 1:
ELECTION OF CLASS I DIRECTORS
Nominees for Election as Director
Our board of directors is divided into three classes, with one class being elected each year and
members of each class holding office for a three-year term. At the Annual Meeting, the Class I
Directors will stand for election. Our board of directors is currently authorized to have, and we
currently have, five members.
Our board of directors has nominated Mr. Jay C. Hoag and Mr. Roger M. Marino as nominees for
election as the Class I Directors each for a three-year term, until the 2014 annual meeting of
stockholders or until their respective successors are elected and qualified. Each nominee is
currently serving as a director.
The nominees have each indicated that he is willing and able to serve as director if elected. If a
nominee should become unable or unwilling to serve, the proxies intend to vote for the replacement
selected by the nominating and corporate governance committee of our board of directors. None of
our directors are related to any other director or to any of our executive officers.
The following sets forth our directors and executive officers and their respective ages and
positions as of March 31, 2011.
Information About the Nominees
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Jay C. Hoag (1*)(2*)(3) |
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Director |
Roger M. Marino (2)(4) |
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Member of the Compensation Committee. |
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Member of the Nominating and Corporate Governance Committee. |
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Lead Independent Director. |
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Member of the Audit Committee. |
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Committee Chairman. |
Jay C. Hoag has served as one of the Companys directors since May 2004. Since June 1995, Mr. Hoag
has served as a founding General Partner at Technology Crossover Ventures, a private equity and
venture capital firm. Mr. Hoag serves on the board of directors of Netflix, Inc. and several
private companies. Previously Mr. Hoag served on the boards of directors of TheStreet.com, Altiris,
Inc., Expedia and eLoyalty Corporation. Mr. Hoag holds an M.B.A. from the University of Michigan
and a B.A. from Northwestern University. As a venture capital investor, Mr. Hoag brings strategic
insights and financial experience to the board of directors. He has evaluated, invested in and
served as a board member on numerous companies, both public and private, and is familiar with a
full range of corporate and board functions. His many years of experience in helping companies
shape and implement strategy provide the board with unique perspectives on matters such as risk
management, corporate governance, talent selection and management.
Roger M. Marino has served as a director since 2000. Mr. Marino is an active private investor in
numerous technology start-up companies. In 2001 Mr. Marino founded Revere Pictures, a film
production company. Prior to founding Revere Pictures, Mr. Marino co-founded EMC Corporation and
retired as its president in 1992. Mr. Marino holds a B.S. from Northeastern University and is a
member (Emeritus) of Northeasterns Board of Trustees. Mr. Marinos extraordinary experience as an
entrepreneur who co-founded and then served in various executive positions in a market-leading
technology company provides the Company with both executive and sales experience from the
perspective of the market in which all of our customers operate.
Our board of directors unanimously recommends a vote FOR the election of the nominees to serve as
directors.
7
Information about Continuing Directors
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Leonard P. Forman (1*)(2)(3) |
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65 |
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Director |
Bruce Levenson (1)(2) |
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61 |
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Director |
Greg Strakosch (4) |
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48 |
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Director |
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Member of the Audit Committee. |
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Member of the Compensation Committee. |
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Member of the Nominating and Corporate Governance Committee. |
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Chief Executive Officer; Chairman. |
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Committee Chairman. |
Leonard P. Forman has served as a director since December of 2006. Mr. Forman served as the Chief
Financial Officer and Executive Vice President of the New York Times Company from 2001 to 2006. Mr.
Forman had been president and chief executive officer of The New York Times Company Magazine Group
prior to its sale in April 2001. Previously, he served The New York Times Company as senior vice
president of corporate development, new ventures and electronic businesses. Mr. Forman also serves
on the board of directors of Wolters Kluwer, N.V. and the Advisory Board of Veronis Shuler and
Stevenson. Mr. Forman holds a B.A. from Queens College, City University of New York and completed
his PhD dissertation from New York University. The Company believes that Mr. Formans financial,
strategic and operational experience and acumen in the online services, print media and advertising
businesses bring valuable strategic and industry-specific insight to the Board, and add to the
Boards understanding of the risks and opportunities associated with our online media business.
Bruce Levenson has served as a director since 1999. Mr. Levenson is the co-founder of United
Communications Group, or UCG, where he has worked since 1977. Mr. Levenson is currently a Partner
at UCG, where he is involved in company strategy and acquisition efforts. In addition, Mr. Levenson
is a partner in Atlanta Spirit, LLC, which is the majority owner of the NBA Atlanta Hawks franchise
and the NHL Atlanta Thrashers franchise. Atlanta Spirit LLC also owns the operating rights to the
Philips Arena, the major sports and entertainment venue in Atlanta. Mr. Levenson holds a B.A. from
Washington University and a J.D. from American University. Mr. Levensons career of over thirty
years as a principal in a highly-successful specialty publisher provides the Company with valuable
management and strategic experience in a core aspect of the market it serves.
Greg Strakosch has served as our Chief Executive Officer and a director since our incorporation in
September of 1999 and our chairman since 2007. Prior to co-founding TechTarget, Mr. Strakosch was
the President of the Technology Division of UCG, a business-to-business information provider. Mr.
Strakosch joined UCG in 1992 when the company acquired Reliability Ratings, an IT publishing
company that he founded in 1989. Before Reliability Ratings, Mr. Strakosch spent six years at EMC
Corporation, a provider of enterprise information storage systems. Mr. Strakosch holds a B.A. from
Boston College. As one of the Companys two co-founders and our chief executive officer, Mr.
Strakosch is uniquely positioned to lead our management team and provide essential insight and
guidance to the board of directors from an inside perspective, along with experience and
comprehensive knowledge of the IT advertising business.
Board Leadership Structure
Our Chief Executive Officer also serves as our Chairman of our board of directors. The board
believes that the Companys Chief Executive Officer is best situated to serve as Chairman because
he is the director most familiar with the Companys business and industry, and most capable of
effectively identifying strategic priorities and leading the discussion and execution of strategy.
Independent directors and management have different perspectives and roles in strategy development.
The Companys independent directors bring experience, oversight and expertise from outside the
company and, in some cases, our industry, while the Chief Executive Officer brings company-specific
experience and expertise. The board believes that the combined role of Chairman and Chief Executive
Officer promotes strategy development and execution, and facilitates the flow of information
between management and the Board, which are critical for effective governance. Given the relative
size of our Company and our Board, and the proximity of the Chairman and Chief Executive Officer to
the day to day operations of the Company, the Chairman and Chief Executive Officer is particularly
well positioned to gather and convey such information to the Board. One of the key responsibilities
of the board is to develop strategic direction and hold management accountable for the execution of
strategy once it is developed. The board believes the combined role of
Chairman and Chief Executive Officer, together with an independent Lead Director having the duties
described below, is in the best interest of stockholders because it provides the appropriate
balance between strategy development and independent oversight of management.
8
To strengthen independent oversight, the board has adopted a number of governance practices,
including:
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a clearly defined independent lead independent director role (as detailed
below); and |
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executive sessions of the independent directors after every board meeting. |
However, the board recognizes that no single leadership model is right for all companies and at all
times. The board recognizes that depending on the circumstances, other leadership models, such as a
separate independent chairman of the board, might be appropriate. Accordingly, the board
periodically reviews its leadership structure.
Lead Independent Director
Jay C. Hoag, an independent director who serves as Chairman of both the Compensation and Nominating
and Corporate Governance Committees, was selected by the board in May 2007 to serve as the Lead
Independent Director. The Lead Independent Director has the responsibility of presiding at all
executive sessions of the board, consulting with the Chairman and Chief Executive Officer on board
and committee meeting agendas, acting as a liaison between management and the non-management
directors, including maintaining frequent contact with the Chairman and Chief Executive Officer and
advising him on the efficacy of the board meetings, facilitating teamwork and communication between
the non-management directors and management, as well as any additional ancillary responsibilities.
Information About Other Executive Officers
Set forth below are the name, age and position of each other executive officer of the Company as of
March 31, 2011.
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Name |
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Age |
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Principal Occupation/Position Held With the Company |
Don Hawk |
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39 |
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President |
Eric Sockol |
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49 |
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Chief Financial Officer, Treasurer* |
Jeff Wakely |
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47 |
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Chief Financial Officer, Treasurer ** |
Kevin Beam |
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47 |
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Executive Vice President |
Michael Cotoia |
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39 |
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Executive Vice President |
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* |
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Mr. Sockol served as our Chief Financial Officer and Treasurer through May 31, 2010. |
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** |
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Mr. Wakely began serving as our Chief Financial Officer and Treasurer on June 1, 2010. |
Don Hawk has served as our president since our incorporation in September of 1999. Prior to
co-founding TechTarget, Mr. Hawk was a Director of New Media Products for the Technology Division
of UCG from 1997 to 1999. Prior to joining UCG, Mr. Hawk was the director of electronic business
development for Telecommunications Reports International, a telecommunications publishing company.
Mr. Hawk holds a B.A. and an M.A. from George Washington University.
Eric Sockol served as our chief financial officer since our incorporation in September of 1999 and
our treasurer since March 2001. Mr. Sockol is a certified public accountant and holds a B.B.A.
from the University of Massachusetts, Amherst. On February 2, 2010, Mr. Sockol resigned as the
Companys chief financial officer and treasurer, but remained in his position until June 2010 in
order to assist the Company with its search for his successor.
Jeff Wakely has served as our chief financial officer and treasurer since June of 2010. Before
joining TechTarget, Mr. Wakely was the Chief Accounting Officer, Vice President of Finance and
Assistant Treasurer of NetScout Systems, Inc., a publicly-held network management company, from
October 2005 to May 2010. Prior to NetScout, Mr. Wakely was Chief Financial Officer of Sitescape,
Inc., a collaboration software provider. Mr. Wakely is a certified public accountant and holds a
B.S. in Accountancy from Wake Forest University.
Kevin Beam has been employed by us since 2000, serving as one of our executive vice presidents
since July 2004, and as one of our vice presidents from March 2000 until July 2004. Prior to
joining TechTarget, Mr. Beam was a Vice President in the Technology Division of UCG from 1992 to
2000. Prior to joining UCG, Mr. Beam served as Vice President at Reliability
Ratings, an IT publishing company, from 1989 to 1992. Before Reliability Ratings, Mr. Beam spent
five years in sales and sales management positions at EMC Corporation. Mr. Beam holds a B.A. from
Boston College.
9
Michael Cotoia has been employed by us since 2002, serving as one of our executive vice presidents
since December 2010 and holding the positions of senior vice president, and vice president and
publisher from 2002 to December 2010. Prior to joining TechTarget, Mr. Cotoia was Director of
Sales at SANZ, a national storage integrator, and he also held positions at EMC and Deloitte &
Touche. Mr. Cotoia holds a B.S. degree from Babson College and is a Certified Public Accountant.
INFORMATION ABOUT CORPORATE GOVERNANCE
Our board of directors believes that good corporate governance is important to ensure that we are
managed for the long-term benefit of our stockholders. This section describes the key corporate
governance guidelines and practices that we have adopted. The charters governing the audit
committee, the compensation committee, and the nominating and corporate governance committee, the
code of business conduct and ethics, as well as our corporate governance guidelines, are posted on
the corporate governance page of our website at www.techtarget.com. You may also obtain a copy of
any of these documents without charge by writing to TechTarget, Inc., 275 Grove Street, Newton, MA
02466, Attention: Corporate Secretary.
Corporate Governance Guidelines
Our board of directors has adopted corporate governance guidelines to assist in the exercise of its
duties and responsibilities and to serve our best interests and those of our stockholders. These
guidelines, which provide a framework for the conduct of our board of directors business, provide
that:
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our business and affairs are managed by, or under the direction of, our board
of directors, acting on behalf of the stockholders. Our board of directors has
delegated to our officers the authority and responsibility for managing the Companys
everyday affairs. Our board of directors has an oversight role and is not expected to
perform or duplicate the tasks of our chief executive officer or senior management; |
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a majority of the members of our board of directors shall meet the independence
standards of the Marketplace Rules of the NASDAQ Stock Market, Inc.; and |
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the independent members of our board of directors regularly meet in executive
session. |
The Boards Role in Risk Oversight
The board of directors is primarily responsible for oversight of the Companys risk management. As
such, it regularly reviews issues that present particular risks to the Company, including those
involving competition, customer demands, economic conditions, planning, strategy, finance, sales
and marketing, products, information technology, facilities and operations, legal and regulatory
compliance issues. Additionally, the board relies on the audit committee to be responsible for
oversight of issues related to risks and exposures related to financial matters, particularly
financial reporting, tax, accounting, disclosure, internal control over financial reporting,
financial policies, investment guidelines and credit and liquidity matters. The board believes that
this approach provides appropriate checks and balances against undue risk taking.
Board Determination of Independence
Under applicable NASDAQ rules, a director will only qualify as an independent director if, in the
opinion of our board of directors, that person does not have a relationship that would interfere
with the exercise of independent judgment in carrying out the responsibilities of a director. Our
board of directors has determined that none of Messrs. Forman, Hoag, Levenson, or Marino, who
comprise our audit, compensation and nominating and corporate governance committees, has a
relationship that would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director and that each of these directors is independent as that term is
defined by NASDAQs rules.
Board Meetings and Attendance
Our board of directors held six meetings in 2010. During 2010, each director attended at least 75%
of the aggregate of the total number of meetings of our board of directors and the total number of
meetings held by each committee of our board of directors on which such director served during the
period for which such director served.
10
Director Attendance at Annual Meeting of Stockholders
Our corporate governance guidelines provide that directors are encouraged to attend our Annual
Stockholders Meeting. In 2010, all of our directors participated in the Annual Meeting by telephone
Board Committees
Our board of directors has established an audit committee, a compensation committee and a
nominating and corporate governance committee. Each committee operates under a separate charter
adopted by our board of directors. Current copies of each committees charter are posted on the
Corporate Governance section of our website at www.techtarget.com. Our board of directors has
determined that all of the members of each of our boards three standing committees are independent
as defined under the rules of the NASDAQ Stock Market, including, in the case of all members of the
audit committee, the independence requirements contemplated by Rule 10A-3 under the Securities
Exchange Act of 1934, as amended, or the Exchange Act.
Audit Committee. Leonard P. Forman, the chair of the committee, Bruce Levenson and Roger M. Marino
currently serve on the audit committee. Our board of directors has determined that Mr. Forman, who
is an independent director, is an audit committee financial expert as defined in applicable SEC
rules. The audit committees responsibilities include but are not limited to:
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reviewing and assessing the adequacy of the audit committee charter; |
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evaluating its own performance and reporting the results of such evaluation to
our board of directors; |
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appointing, retaining, terminating and approving the compensation of, and
assessing the independence of our independent registered public accounting firm; |
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assessing and evaluating the work of our independent registered public
accounting firm; |
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pre-approving audit and permissible non-audit services, and the terms of such
services, to be provided by our independent registered public accounting firm;
reviewing and discussing with management and the independent registered public
accounting firm our annual and quarterly financial statements and related disclosures; |
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meeting independently with our independent registered public accounting firm; |
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establishing policies and procedures for the receipt and retention of
accounting related complaints and concerns; |
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coordinating the oversight and reviewing the adequacy of our internal controls
over financial reporting; |
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making regular reports to our board of directors; and |
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preparing the audit committee report required by SEC rules to be included in
our annual proxy statement. |
Our audit committee met seven times in 2010.
Compensation Committee. Jay Hoag, the chair of the committee, Leonard P. Forman and Bruce Levenson
currently serve on the compensation committee. The compensation committees responsibilities
include but are not limited to:
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reviewing and assessing the adequacy of the compensation committee charter; |
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evaluating its own performance and reporting the results of such evaluation to
our board of directors; |
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annually reviewing and approving corporate goals and objectives relevant to
compensation of our Chief Executive Officer; |
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evaluating the performance of our chief executive officer in light of such
corporate goals and objectives and determining the compensation of our Chief Executive
Officer; |
11
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reviewing and approving the compensation of our other executive officers and
those members of management that report directly to our Chief Executive Officer; |
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reviewing and discussing with management our executive compensation disclosure
included in reports and registration statements filed with the SEC and producing
required reports; |
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establishing and reviewing our overall management compensation philosophy and
policy; |
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overseeing our compensation, welfare, benefit and pension plans and similar
plans; |
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overseeing the evaluation of management; |
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developing a Chief Executive Officer succession plan for consideration by the
Board and reporting on such plan to the Board; |
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making regular reports to our board of directors; and |
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reviewing and making recommendations to the board with respect to director
compensation, with guidance from our nominating and corporate governance committee. |
Our compensation committee met four times in 2010. The processes and procedures followed by our
compensation committee in considering and determining executive and director compensation are
described below under the heading Executive Compensation.
Nominating and Corporate Governance Committee. Jay Hoag, the chair of the committee, Leonard P.
Forman and Roger M. Marino currently serve on the nominating and corporate governance committee.
The nominating and corporate governance committees responsibilities include but are not limited
to:
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reviewing and assessing the adequacy of the nominating and corporate governance
committee charter; evaluating its own performance and reporting the results of such
evaluation to our board of directors; |
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developing and recommending to the board criteria for board and committee
membership and providing guidance to the compensation committee regarding director
compensation; |
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establishing procedures for identifying and evaluating director candidates
including nominees recommended by stockholders; |
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reviewing our disclosures concerning our policies and procedures for
identifying and reviewing board nominee candidates; |
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conducting an appropriate review and approval of all related-party transactions
for potential conflict of interest situations on an ongoing basis; |
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identifying individuals qualified to become board members; |
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recommending to the board the persons to be nominated for election as directors
and to each of the boards committees; |
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developing and recommending to the board a code of business conduct and ethics
and a set of corporate governance guidelines; |
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making regular reports to our board of directors; and |
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overseeing the evaluation of the board. |
Our nominating and corporate governance committee met formally three times in 2010. The processes
and procedures followed by our nominating and corporate governance committee in identifying and
evaluating director candidates are described below under the heading Director Nomination Process.
12
Director Nomination Process
The process followed by the nominating and corporate governance committee to identify and evaluate
director candidates includes meetings from time to time to evaluate biographical information and
background material relating to potential candidates, interviews of selected candidates by members
of the committee and our board of directors and recommending prospective candidates for the Boards
consideration and review of the prospective candidate qualifications with the Board.
In identifying prospective director candidates, the nominating and corporate governance committee
may consider all facts and circumstances that it deems appropriate or advisable, including among
other things, the skills of the prospective director candidate, his or her depth and breadth of
business experience or other background characteristics, his or her independence and the needs of
our board of directors. Assessment includes consideration of the criteria set forth in our
corporate governance guidelines. These criteria include the candidates integrity, business acumen,
knowledge of the Companys business and industry, and experience. The committee does not assign
specific weights to particular criteria, although it does consider the following minimum
qualifications:
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Directors must be of the highest ethical character and share the values of the
Company as reflected in the Companys Code of Business Conduct and Ethics; |
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Directors must have reputations, both personal and professional, consistent
with the image and reputation of the Company; |
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Directors must have the ability to exercise sound business judgment; and |
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Directors must have substantial business or professional experience and be able
to offer meaningful advice and guidance to the Companys management based on that
experience. |
Our board of directors believes that the backgrounds and qualifications of its directors,
considered as a group, should provide a composite mix of experience, knowledge and abilities that
will allow our board of directors to fulfill its responsibilities.
In addition to the foregoing factors, the nominating and corporate governance committee also
considers diversity in its evaluation of candidates for board membership. The board believes that
diversity with respect to viewpoint, skills and experience should be an important factor in board
composition. The nominating and corporate governance committee ensures that diversity
considerations are discussed in connection with each potential nominee, as well as on a periodic
basis in connection with the composition of the board as a whole.
The director biographies on pages 7 and 8 indicate each nominees experience, qualifications,
attributes and skills that led our Nominating and Corporate Governance Committee and our board to
conclude he should continue to serve as a director of the Company. Our Nominating and Corporate
Governance Committee and our board believe that each of the nominees has the individual attributes
and characteristics required of each of our directors, and the nominees as a group possess the
skill sets and specific experience desired of our board as a whole.
Stockholders may recommend individuals to the nominating and corporate governance committee for
consideration as potential director candidates by submitting their names, together with appropriate
biographical information and background materials and a statement as to whether the stockholder or
group of stockholders making the recommendation has beneficially owned more than 5% of our common
stock for at least a year as of the date such recommendation is made, to Nominating and Corporate
Governance committee, c/o Chairman of the Board of Directors, TechTarget, Inc., 275 Grove Street,
Newton, MA 02466. Assuming that appropriate biographical and background material has been provided
on a timely basis, the committee will evaluate stockholder-recommended candidates by following
substantially the same process, and applying substantially the same criteria, as it follows for
candidates submitted by others.
If the board determines to nominate a stockholder-recommended candidate and recommends his or her
election, then his or her name will be included in the Companys proxy card for the next annual
meeting assuming the nominee consents to such inclusion.
13
Communications with the Independent Directors
Our board of directors will give appropriate attention to written communications that are submitted
by stockholders, and will respond if and as appropriate. The Chairman of the board of directors is
primarily responsible for monitoring and responding
to communications from stockholders and other interested parties and for providing copies to our
board of directors or to the individual director so designated on a periodic basis, as he considers
appropriate.
Unless any communication is marked confidential and is addressed to a particular board member, the
Chairman of the board of directors, prior to forwarding any correspondence, will review such
correspondence and, in his discretion, will not forward items if they are deemed to be of a
commercial, irrelevant or frivolous nature or otherwise inappropriate for consideration by our
board of directors.
Interested parties may send written communications to our board of directors at the following
address: TechTarget, Inc., 275 Grove Street, Newton, MA 02466; Attention: Board of Directors.
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics that applies to our directors,
officers and employees, including our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions. We have posted
the code of business conduct and ethics on our website, which is located at www.techtarget.com. In
addition, we intend to disclose on our website all disclosures that are required by law or NASDAQ
Global Market listing standards concerning any amendments to, or waivers from, any provision of the
code of business conduct and ethics.
DIRECTOR COMPENSATION
Directors who are also employees will continue to receive no compensation for their service as a
director. However, since January 1, 2007, all non-employee directors:
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have been paid a base annual retainer of $20,000; |
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have been paid a fee of $1,500 for attendance at each board meeting and were
reimbursed for any actual out-of-pocket expenses incurred in attending any such
meeting; |
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have been paid a fee of $1,000 for attendance at each committee meeting and
were reimbursed for actual out-of-pocket expenses incurred in attending any such
meeting; and |
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received an annual grant of options to purchase, at the fair market value at
the time of issuance, 2,500 shares of our common stock, which options will be
immediately exercisable. |
In addition, each non-employee director is paid, on an annual basis, the following amounts for
service as follows: each member of the audit committee: $5,000; each member of the compensation
committee: $2,500; and each member of the nominating and corporate governance committee: $2,500.
Also, each committee chairperson will receive the following additional annual cash payments:
chairperson of the audit committee: $10,000; chairperson of the compensation committee: $5,000; and
chairperson of the nominating and corporate governance committee: $5,000.
In lieu of receiving cash payments for their service on our board of directors or our board
committees, in 2010 all cash fees were paid in equity under our 2007 Stock Option and Incentive
Plan.
In the event that we add additional non-employee directors to our board, we will determine the
amount of equity compensation, if any, based on the available benchmarking data for directors of
comparable companies as well as other relevant factors, such as that persons experience in our
industry, unique skills and knowledge, and the extent to which we expect that person will serve on
and/or chair any committees.
14
Fiscal 2010 Director Compensation
The following table details the compensation earned during 2010 by our non-employee directors.
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Stock |
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Option |
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Name |
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Awards ($)(1) |
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Awards ($)(2) |
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Total ($) |
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Leonard P. Forman |
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62,996 |
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12,590 |
|
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75,586 |
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Jay C. Hoag |
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50,996 |
|
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12,590 |
|
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63,586 |
|
Bruce Levenson |
|
|
44,491 |
|
|
|
12,590 |
|
|
|
57,081 |
|
Roger M. Marino |
|
|
42,994 |
|
|
|
12,590 |
|
|
|
55,584 |
|
|
|
|
(1) |
|
The amounts in the Stock Awards column reflect the aggregate grant date fair value of the
stock awards granted to each director during 2010, computed in accordance with the Financial
Accounting Standards Board Accounting Standards Codification Topic 718. For the assumptions
used to calculate the fair value of the equity awards granted, see Note 11 to our 2010 audited
financial statements in our annual report filed on Form 10-K. |
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(2) |
|
The amounts in the Options Awards column reflect the aggregate grant date fair value of the
option awards granted to each director during 2010, computed in accordance with the Financial
Accounting Standards Board Accounting Standards Codification Topic 718. We use the
Black-Scholes option pricing model to determine the fair value of option awards. For the
assumptions used to calculate the fair value of the option awards granted, see Note 11 to our
2010 audited financial statements in our annual report filed on Form 10-K. |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Overview and Compensation Philosophy
The primary objectives of our compensation committee and our board of directors with respect to
executive compensation are to attract, retain and motivate executives who make important
contributions to the achievement of our business goals, and to align the incentives of our
executives with the creation of long term value for our stockholders. The compensation committee
implements and maintains compensation plans in order to enhance the likelihood that we may achieve
these objectives. Our executive compensation program is designed to attract and retain those
individuals with the skills necessary for us to achieve our long-term business plan, to motivate
and reward individuals who perform at or above the levels that we expect and to link a portion of
each executive officers compensation to the achievement of our business objectives. It is also
designed to reinforce a sense of ownership, urgency and overall entrepreneurial spirit. Further,
our executive compensation program is designed in a manner that we believe aligns the interests of
our executive officers with those of our stockholders by providing a portion of our executive
officers compensation through equity-based awards.
Compensation Committee
Our current executive compensation policies and objectives were developed and implemented by our
compensation committee, which consists of three independent directors. One of the roles of the
compensation committee under its charter is to review and approve compensation decisions relating
to our executive officers. Our compensation committee reviews and approves the compensation of our
chief executive officer, Mr. Strakosch, and, with input from our chief executive officer, the
compensation for our other executive officers. Mr. Strakosch plays no role in determining his own
salary, bonus or equity compensation.
Our compensation committee intends to continue to perform, at least annually, a review of our
executive compensation program to assess whether such program provides adequate incentives and
motivation to our executive officers, and whether it adequately compensates our executive officers
relative to comparable executive officers employed by other private and public companies with which
we believe we compete for executives. In addition to addressing cash compensation matters for our
executive officers, our compensation committee reviews stock option and other equity grants to
executive officers, as well as bonus plans, stock option and other equity grants to employees who
are not executive officers.
15
Elements of Executive Compensation
Executive compensation consists of the following elements:
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annual performance bonus; |
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equity incentive compensation; and |
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employee benefit plans. |
We view these elements of compensation as related but distinct. Although our compensation committee
reviews total compensation, we generally do not believe that significant compensation derived from
one element of compensation should necessarily negate or reduce compensation from other elements.
We assess the appropriate level for each compensation component based, in part, on competitive
benchmarking consistent with our recruiting and retention goals, our view of internal fairness and
consistency, and other considerations we deem relevant, such as the executives equity ownership
percentage. We believe that stock option and other equity awards are an important motivator in
attracting and retaining employees in addition to salary and cash bonus awards. For 2010, the
overall mix of executive compensation continued to include a balance of these components, taking
into consideration existing cash and long term rewards. With respect to the three continuing named
executive officers, the aggregate amount of annual base salary and target cash performance bonus
(together, the Aggregate Annual Target Compensation) for each of these three executives has
remained unchanged since 2007.
In addition to our continuing executive officers from 2009, we added two new executive officers in
2010. As a result of the departure of our former chief financial officer in May 2010, we hired Jeff
Wakely as chief financial officer and treasurer. Mr. Wakelys cash compensation is comprised of an
annual base salary of $250,000 and an annual cash bonus target, pursuant to our 2010 Executive
Incentive Bonus Plan (as described below), of $50,000, which was pro-rated in 2010 based on his
date of hire. Additionally, Mr. Wakely was awarded a grant of 100,000 RSUs vesting over a four-year
period under the Companys 2007 Option Plan. In connection with his December 16, 2010 promotion to
Executive Vice President, Michael Cotoia was deemed to be a named executive officer. For 2010, Mr.
Cotoias Aggregate Annual Target Compensation equaled $350,000, comprised of annual base salary
equal to $250,000 and an individual target bonus amount equal to $100,000. As the executive in
charge of our sales force, in 2010, Mr. Cotoias bonus was based on achievement of quarterly
revenue targets. Given that Mr. Cotoia is now an executive officer, in 2011 he will be part of the
management bonus plan for purposes of his performance-based cash compensation.
Base Salary. Base salaries are used to recognize the experience, skills, knowledge and
responsibilities required of all our employees, including our executives. Base salaries for our
executives typically have been set in our offer letter to the executive at the outset of
employment. None of our executives are currently party to employment agreements that provide for
automatic or scheduled increases in base salary. We determine base salary compensation for our
executive officers at a level we believe enables us to retain and motivate and, as needed, hire
individuals in a competitive environment, so that such executive officers will contribute to our
overall business goals. We also take into account the base salary compensation that is payable by
companies that we believe to be our competitors and by other comparable private and public
companies with which we believe we generally compete for executives. Base salaries are reviewed
annually and adjusted from time to time to realign salaries with market levels after taking into
account an individuals responsibilities, performance, skills specific to us and industry
experience. For 2010, as was the case in 2009, the Company kept the Aggregate Annual Target
Compensation with respect to the three continuing named executive officers at 2007 levels.
Annual Performance Bonus. We designed our executive team bonus plan in a manner we believe will
focus and motivate our management on achieving key company financial objectives and to reward our
management for achievement of these financial objectives. In December 2009, our board of directors
approved the 2010 Executive Incentive Bonus Plan, which we refer to as the 2010 Bonus Plan. The
2010 Bonus Plan provided for an annual cash bonus based on an individual targeted bonus amount for
each executive officer. The specific targeted bonus amount for each executive officer was
determined by the compensation committee based on a recommendation by Mr. Strakosch and the various
factors noted above. Mr. Strakoschs targeted bonus amount is determined by the compensation
committee without input from Mr. Strakosch. Each of the executive officers was eligible to earn
greater than their targeted bonus amount in the event the applicable financial objective was
exceeded. The aggregate amount of the relevant company financial target in the 2010 Bonus Plan for
the full year was increased from the annual target for 2009 in connection with the Companys 2010
budgeting process.
16
The 2010 Bonus Plan provided for quarterly payments to the named executives based on the portion of
the annual financial metric allocated to each quarter under the Plan. The 2010 Bonus Plan provided
that such quarterly payments made to the named executives, if any, could not be recovered by the
company for subsequent quarterly performance, but that the named executives could receive the
payment applicable to a prior quarter for which the applicable metric was not achieved in the event
that the aggregate amount of the metrics on a cumulative basis were achieved over multiple
quarters. The 2010 Bonus Plan also provided that no quarterly payment could exceed twenty-five
percent of the applicable named executives targeted bonus amount and that any payments in excess
of such targeted bonus amount would only be paid in the event that the annual financial metric was
exceeded. All other material terms of the Plan remained the same, and these terms were consistent
with the terms of annual performance bonus plans that have been in place for our executive officers
since 2002.
Historically, and in connection with the 2010 Bonus Plan, our financial targets for bonuses were
established in conjunction with our annual performance and compensation review process that is part
of our annual budgeting process. Our compensation committee chose Adjusted EBITDA, defined as
earnings before net interest, income taxes, depreciation, and amortization, as further adjusted for
stock-based compensation, as the target metric for payments under the 2010 Bonus Plan (as has been
the case for bonus payments since 2002). Adjusted EBITDA was chosen by our compensation committee
because, after considering various financial metrics, it believed that Adjusted EBITDA is the
appropriate measurement of our performance and achievement of our strategic objectives.
In order for any of our executive officers to have been paid the applicable quarterly amount under
the 2010 Bonus Plan, the minimum threshold of 90% of the Adjusted EBITDA bonus target for the
subject quarter or on a cumulative quarterly basis, would have had to have been achieved. If the
90% threshold was achieved, then each of our executive officers would have earned 50% of that
quarters portion (or, if applicable, cumulative quarters) of their targeted bonus amount.
Furthermore, each of our executive officers would have earned an additional 5% of that quarters
portion (or, if applicable, cumulative quarters) of their targeted bonus amount for each additional
1% of the Adjusted EBITDA bonus target achieved over 90% until 100% of the Adjusted EBITDA bonus
target for that quarter, or cumulative quarters, was achieved. As stated above, if greater than
100% of the Adjusted EBITDA bonus target for the full 2010 fiscal year was achieved, then the
executive officers earn an additional cash bonus in excess of their targeted amount.
In 2010, the Company produced Adjusted EBITDA in the following percentages of the applicable
quarterly Adjusted EBITDA target: Q1: 207%; Q2: 122%; Q3: 79% and Q4: 104%. This resulted in
payouts to our executive officers of quarterly bonuses in the following amounts as a percentage of
the quarterly amount of their targeted bonus: Q1: 100%; Q2: 100%; Q3: 100% and Q4:100%.
Additionally, as a result of exceeding the annual target Adjusted EBITDA amount, pursuant to the
2010 Bonus Plan, the payout to our executive officers of the aggregate bonus amount equaled 237% of
annual target bonus amounts. In the five prior fiscal years, on an annual basis, we paid out to our
named executives the following percentages of their targeted annual bonus amounts: 50%, 112%, 86%,
0% and 63%, respectively. All bonus amounts earned are accounted for in accordance with GAAP
throughout the applicable fiscal year.
The table below shows, for each named executive officer, the target annual incentive bonus and
actual bonus amounts paid for 2010.
|
|
|
|
|
|
|
|
|
|
|
Bonus |
|
|
Bonus |
|
|
|
Target |
|
|
Earned |
|
Name and Position |
|
($) |
|
|
($) |
|
Greg Strakosch, Chairman and Chief Executive Officer |
|
|
140,000 |
|
|
|
332,431 |
|
Don Hawk, President |
|
|
115,000 |
|
|
|
273,068 |
|
*Jeff Wakely, Chief Financial Officer and Treasurer |
|
|
50,000 |
|
|
|
69,257 |
*** |
**Eric Sockol, Chief Financial Officer and Treasurer |
|
|
70,000 |
|
|
|
52,500 |
**** |
Kevin Beam, Executive Vice President |
|
|
105,000 |
|
|
|
249,323 |
|
Michael Cotoia, Executive Vice President |
|
|
100,000 |
|
|
|
83,333 |
***** |
|
|
|
* |
|
as of June 1, 2010 |
|
** |
|
through May 31, 2010 |
|
*** |
|
pro rated |
|
**** |
|
$35,000 of Mr. Sockols bonus was related to his separation agreement. |
|
***** |
|
Mr. Cotoia was named an executive officer in December 2010. The
bonus he received in 2010 not issued under the Executive Bonus Plan |
17
Equity Incentive Compensation. We intend to continue, as we have in the past, to utilize equity
awards in the form of stock options and, more recently, RSUs, in each case to attract, motivate and
retain employees. We believe that stock options,
RSUs and other equity awards are an important component of an executives overall compensation
package, and that this equity element can be effective in rewarding long-term performance of our
executives. We believe that this compensation philosophy, in turn, may contribute to long-term
value for our stockholders. All of our executive officers and a majority of our key employees have
received stock option grants and/or RSU grants under our 1999 Stock Option Plan and/or our 2007
Stock Option Plan. We believe the vesting feature of our equity grants increases executive
retention by providing an incentive to remain in our employ during the vesting period. In
determining the grants of equity awards, our compensation committee considers the external data
described in the Benchmarking of Compensation and Equity section below, as well as the
recommendations of our chief executive officer. Additionally, other factors considered in this
determination include the comparative share ownership of executives in our compensation peer group,
our company-level performance, the applicable executives performance and the amount and status of
equity previously awarded to the executive.
To date, and as was the case of Mr. Wakely this year, we have typically made an initial equity
award to new executives in connection with the start of their employment; we also typically make
one annual performance grant of equity per year to certain key employees and executives. Grants of
equity awards to executives are all approved by our board of directors or our compensation
committee. Stock options are granted based on the fair market value of our common stock on the date
of grant. To date, in most cases, the stock options we have granted to our executives have vested
as to 25% of such awards at the end of the first year following the grant and in equal quarterly
installments over the succeeding three years, while the RSUs granted for 2010 were also subject to
four year vesting.
2010 Equity Grants. In connection with the hiring of Mr. Wakely, the Company granted an award to
him of 100,000 RSUs, which vest over a four year period, with 25% vesting on the first anniversary
of grant and the balance vesting in installments of 6.25% of the total grant following the
expiration of each 91-day period following the anniversary of the initial grant date thereafter
until fully-vested. Additionally, during the fourth quarter of 2009, in connection with our annual
employee performance and compensation review, our board of directors, compensation committee and
chief executive officer held discussions, both together and independently, regarding any additional
equity grants to executives deemed necessary and appropriate. As a result of those discussions, in
recognition of the levels of past grants, current vesting and other relevant factors, only one
grant to any named executive, 75,000 RSUs to Mr. Cotoia, was made. This grant vests in equal
installments of 25% each on the first four anniversary dates of the initial grant.
Employee Benefit Plans. Our employees, including our executive officers, are entitled to various
employee benefits. These benefits include: medical and dental care plans; flexible spending
accounts for healthcare; life, accidental death and dismemberment and disability insurance; and a
401(k) plan. We offer a 401(k) plan to eligible employees. Under our 401(k) plan, we may provide a
discretionary matching contribution to all employees after they meet all eligibility requirements.
Currently, we match fifty cents of each dollar of compensation contributed by the participant up to
a maximum of $2,000 per year. The employer contributions vest over a four-year period commencing on
the employees hire date.
Tax Considerations
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a tax
deduction for compensation in excess of $1.0 million paid to our chief executive officer and our
four other most highly paid executive officers. Qualifying performance-based compensation is not
subject to the deduction limitation if specified requirements are met. We generally intend to
structure the performance-based portion of our executive compensation, when feasible, to comply
with exemptions in Section 162(m) so that the compensation remains tax deductible to us. However,
our compensation committee or board of directors may, in its judgment, authorize compensation
payments that do not comply with the exemptions in Section 162(m) when it believes that such
payments are appropriate to attract and retain executive talent.
18
Benchmarking of Compensation and Equity
Our compensation committee believes that using a benchmark to measure the performance of our
executive officers may not always be appropriate, but also believes that it can be a meaningful
factor in determining cash and equity compensation. Determining the appropriate compensation for
each of our executive officers involves various objective and subjective compensation principles.
Therefore, our compensation committee, when assessing our compensation plans, both by component and
in the aggregate, reviews the following information and data. With regard to our chief executive
officer, chief financial officer and general counsel, given that we believe the role and
responsibilities for those positions are generally consistent from company to company, we review
the compensation of those titled positions as detailed in public company filings and certain
private company data for companies with similar financial and operational characteristics. Those
characteristics include market capitalization (where applicable), revenue, profitability,
headcount, industry and geography. Additionally, for the other two members of our executive
management team, whose positions are more distinct and may not
be as readily benchmarked by title, we attempt to find analogous positions in other public and
private companies in our industry with similar financial and operational characteristics by
function and responsibilities. Following this review, our compensation committee considers
additional individual factors that contribute to the executives value to our company, such as
length of service and specific skills that make an executive officer uniquely key to our success.
For 2010, the compensation committee, with the benefit of comparable data reports prepared for the
committee by a third party service provider, considered the compensation of the executives of the
following set of peer companies: WebMD, QuinStreet, Orbitz, Webmedia Brands, Expedia, The Knot and
TheStreet.com. This group of peer companies was determined to have been appropriate by the
compensation committee members. Based on the committees review of the compensation data available
on the executives in this peer group, the compensation committee determined that keeping the
aggregate annual salary plus target cash performance bonus amounts for our three most-highly
compensated named executives the same as 2009, while providing for an equity grant in the form of
Restricted Stock Units as described above, was appropriate.
Although comparable data reports were purchased from a third party service provider, we have not
retained a compensation consultant to develop or review our policies and procedures with respect to
executive compensation. Our compensation committee, comprised of Leonard Forman, Jay C. Hoag, and
Bruce Levenson, the latter two of whom, either personally or on behalf of their respective funds,
represent substantial stockholders in our company. These compensation committee members reviewed
and approved the compensation of our executive officers, relying in part on their substantial
business experience.
Compensation Committee Report
The compensation committee has reviewed and discussed with management the section of this Proxy
Statement entitled Compensation Discussion and Analysis. Based on this review and discussion, the
compensation committee has recommended to the board of directors that such section be included in
this Proxy Statement.
By the Compensation Committee of the Board of Directors
Jay Hoag, Chair
Leonard P. Forman
Bruce Levenson
19
Executive Officer Compensation
Summary Compensation Table
The following table sets forth the compensation earned for 2010, 2009 and 2008 for the following
persons, whom we refer to as our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
All Other |
|
|
|
|
Name and Principal |
|
|
|
|
|
Salary |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
Compensation |
|
|
Total |
|
Position |
|
Year |
|
|
($) |
|
|
($)(1) |
|
|
($) |
|
|
($) |
|
|
($)(2) |
|
|
($) |
|
Greg Strakosch,
Chairman and Chief
Executive Officer |
|
|
2010 |
|
|
|
570,000 |
|
|
|
|
|
|
|
|
|
|
|
332,431 |
|
|
|
2,000 |
|
|
|
904,431 |
|
|
|
|
2009 |
|
|
|
570,000 |
|
|
|
2,400,000 |
|
|
|
|
|
|
|
70,000 |
|
|
|
2,000 |
|
|
|
3,042,000 |
|
|
|
|
2008 |
|
|
|
440,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
442,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don Hawk, President |
|
|
2010 |
|
|
|
460,000 |
|
|
|
|
|
|
|
|
|
|
|
273,068 |
|
|
|
2,000 |
|
|
|
735,068 |
|
|
|
|
2009 |
|
|
|
460,000 |
|
|
|
2,200,000 |
|
|
|
|
|
|
|
57,500 |
|
|
|
2,000 |
|
|
|
2,719,501 |
|
|
|
|
2008 |
|
|
|
350,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
352,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric Sockol, Chief
Financial Officer
and Treasurer (5) |
|
|
2010 |
|
|
|
326,667 |
|
|
|
|
|
|
|
|
|
|
|
52,500 |
|
|
|
2,000 |
|
|
|
381,167 |
|
|
|
|
2009 |
|
|
|
280,000 |
|
|
|
500,000 |
|
|
|
|
|
|
|
35,000 |
|
|
|
2,000 |
|
|
|
817,000 |
|
|
|
|
2008 |
|
|
|
275,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
277,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeff Wakely, Chief
Financial Officer
and Treasurer (3)
(4) |
|
|
2010 |
|
|
|
141,581 |
(4) |
|
|
532,000 |
|
|
|
|
|
|
|
69,257 |
|
|
|
2,000 |
|
|
|
744,838 |
|
|
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Beam,
Executive Vice
President |
|
|
2010 |
|
|
|
420,000 |
|
|
|
|
|
|
|
|
|
|
|
249,323 |
|
|
|
2,000 |
|
|
|
671,322 |
|
|
|
|
2009 |
|
|
|
420,000 |
|
|
|
2,000,000 |
|
|
|
|
|
|
|
52,500 |
|
|
|
2,000 |
|
|
|
2,474,499 |
|
|
|
|
2008 |
|
|
|
350,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
352,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cotoia,
Executive Vice
President (3)(6) |
|
|
2010 |
|
|
|
250,000 |
|
|
|
803,250 |
|
|
|
|
|
|
|
83,333 |
|
|
|
2,000 |
|
|
|
1,138,583 |
|
|
|
|
2009 |
|
|
|
250,000 |
|
|
|
500,000 |
|
|
|
|
|
|
|
70,833 |
|
|
|
2,000 |
|
|
|
822,833 |
|
|
|
|
2008 |
|
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
107,823 |
|
|
|
|
|
|
|
307,823 |
|
|
|
|
(1) |
|
The amounts in the Stock Awards column reflect the aggregate grant date fair value of the
stock awards granted to each officer during 2010, 2009 and 2008. See Note 11 to the
consolidated financial statements in our Form 10-K for fiscal 2010 regarding assumptions
underlying the valuation of equity awards |
|
(2) |
|
These amounts represent matching 401(k) contributions. |
|
(3) |
|
Neither of Messrs. Wakely or Cotoia were named executive officers in 2008 or 2009. |
|
(4) |
|
Mr. Wakely joined us in June 2010. The salary of $141,581 in 2010 represents the actual
salary earned from employment starting June 2010 through the end of 2010. |
|
(5) |
|
$210,000 and $35,000 of Mr. Sockols 2010 salary and non-equity incentive plan compensation,
respectively, are related to his separation agreement. |
|
(6) |
|
Mr. Cotoia was named an executive officer in December 2010. The bonuses he received in 2008,
2009 and 2010 were not issued under the Executive Bonus Plan. |
20
Fiscal 2010 Grants of Plan-Based Awards
Restricted stock unit awards entitle the recipient to receive shares of common stock to be
delivered at the time the restricted stock units vest subject to any deferral plan that a named
executive officer, subject to the specific grant terms detailed above, may elect to put in place.
Restricted stock unit awards to our named executive officers, subject to the specific grant terms
detailed above, generally vest in annual installments over four years. Upon termination of
employment, except as provided under the respective executives employment agreement as specified
below, unvested restricted stock units automatically terminate and will be forfeited. Until shares
of common stock are delivered generally, at the time the restricted stock units vest (unless
delivery thereof is deferred), the holder has no rights as a stockholder with respect to the shares
subject to such restricted stock unit, including voting rights and the right to receive dividends
or dividend equivalents. The rights and interests in the restricted stock units may not be sold,
assigned, encumbered or otherwise transferred except, in the event of death, by will or by the laws
of descent and distribution. In the event the executives employment with us is terminated by
reason of death or disability or by us for a reason other than cause (as defined in the applicable
named executive officers employment agreement), then the number of restricted stock units which
will be vested will be determined in accordance with the applicable executives employment
agreement (as summarized below).
Stock options granted to our executives typically vest as follows: 25% of the number of shares
covered by the option on the first anniversary of the date of grant and 6.25% of the number of
shares covered by the option for the twelve quarters thereafter. The term of the options is between
six and ten years. Prior to the exercise of an option, the holder has no rights as a stockholder
with respect to the shares subject to such option, including voting rights and the right to receive
dividends or dividend equivalents.
Fiscal Year 2010 Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future Payouts |
|
|
All Other Stock |
|
|
All Other Option |
|
|
Exercise |
|
|
|
|
|
|
|
|
|
|
Under Non- |
|
|
Awards: |
|
|
Awards: Number |
|
|
Price of |
|
|
Grant Date Fair |
|
|
|
|
|
|
|
Equity Incentive |
|
|
Number of |
|
|
of Securities |
|
|
Option |
|
|
Value of Stock and |
|
|
|
|
|
|
|
Plan Awards(1) |
|
|
Shares of Stock |
|
|
Underlying |
|
|
Award |
|
|
Stock Option |
|
Name |
|
Grant Date |
|
|
Target($) |
|
|
or Units(2)(#) |
|
|
Options (#) |
|
|
($/sh) |
|
|
Awards ($)(3) |
|
Greg Strakosch |
|
|
12/17/2009 |
|
|
|
140,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don Hawk |
|
|
12/17/2009 |
|
|
|
115,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric Sockol |
|
|
12/17/2009 |
|
|
|
70,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeff Wakely |
|
|
12/17/2009 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/7/2010 |
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
532,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Beam |
|
|
12/17/2009 |
|
|
|
105,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cotoia |
|
|
1/5/2010 |
|
|
|
|
|
|
|
75,000 |
|
|
|
|
|
|
|
|
|
|
|
443,250 |
|
|
|
|
12/16/2010 |
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
|
360,000 |
|
|
|
|
(1) |
|
Reflects the target non-equity incentive plan award amounts under the
2010 bonus plan. For each of Messrs. Strakosch, Hawk, Sockol, Wakely
and Beam, the amounts shown above reflect target award amounts for the
full fiscal year. The amounts actually paid to Messrs. Strakosch, Hawk,
Sockol, Wakely and Beam under the 2010 bonus plan are shown above in
the Summary Compensation Table under the Non-Equity Incentive Plan
Compensation column. |
|
(2) |
|
Represents a restricted stock unit award granted to the named executive. |
|
(3) |
|
Amounts in this column represent the grant date fair value of each
award computed in accordance with ASC 718. For a discussion of the
assumptions underlying this valuation please see Notes 1 and 11 to our
audited consolidated financial statements included in our 2010 Form
10-K. See also our discussion in our 2010 Form 10-K of stock-based
compensation under Item 7 Managements Discussion and Analysis of
Financial Condition and Results of OperationsApplication of Critical
Accounting Policies and Use of EstimatesStock-Based Compensation. |
21
See the section of this Proxy Statement entitled, Potential Payments Upon Termination or Change in
Control for a description of the effect of a termination of employment and/or change in control on
the vesting schedules of stock options and RSUs granted to our executive officers.
Outstanding Equity Awards at Fiscal 2010 Year-End
The following table summarizes the outstanding equity award holdings held by our named executive
officers as of December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of |
|
|
Number of |
|
|
|
|
|
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Number of |
|
|
Market Value |
|
|
|
Securities |
|
|
Securities |
|
|
|
|
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|
|
|
|
|
Shares or |
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|
of Shares |
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|
Underlying |
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|
Underlying |
|
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|
|
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|
|
|
|
Units of |
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|
or Units |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
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|
|
|
|
|
Stock That |
|
|
of Stock |
|
|
|
Options |
|
|
Options |
|
|
Exercise |
|
|
Option |
|
|
Have Not |
|
|
That Have |
|
|
|
Exercisable |
|
|
Unexercisable |
|
|
Price |
|
|
Expiration |
|
|
Vested |
|
|
Not Vested |
|
Name |
|
(#) |
|
|
(#) |
|
|
($) |
|
|
Date |
|
|
(#) |
|
|
($)(1) |
|
Greg Strakosch |
|
|
687,500 |
|
|
|
|
|
|
|
2.16 |
|
|
|
11/1/2011 |
|
|
|
346,375 |
|
|
|
2,746,754 |
|
|
|
|
375,000 |
|
|
|
|
|
|
|
2.16 |
|
|
|
8/4/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
|
|
|
|
|
|
|
5.04 |
|
|
|
12/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
500,000 |
|
|
|
|
|
|
|
7.36 |
|
|
|
9/27/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don Hawk |
|
|
15,438 |
|
|
|
|
|
|
|
2.72 |
|
|
|
1/9/2014 |
|
|
|
316,250 |
|
|
|
2,507,863 |
|
|
|
|
125,000 |
|
|
|
|
|
|
|
5.04 |
|
|
|
12/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
500,000 |
|
|
|
|
|
|
|
7.36 |
|
|
|
9/27/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric Sockol |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeff Wakely |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
793,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Beam |
|
|
25,000 |
|
|
|
|
|
|
|
2.16 |
|
|
|
1/18/2012 |
|
|
|
294,375 |
|
|
|
2,334,394 |
|
|
|
|
50,000 |
|
|
|
|
|
|
|
2.16 |
|
|
|
7/30/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
12,500 |
|
|
|
|
|
|
|
2.72 |
|
|
|
1/9/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
62,500 |
|
|
|
|
|
|
|
5.04 |
|
|
|
12/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
375,000 |
|
|
|
|
|
|
|
7.36 |
|
|
|
9/27/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cotoia |
|
|
2,188 |
|
|
|
|
|
|
|
7.36 |
|
|
|
11/2/2015 |
|
|
|
204,063 |
|
|
|
1,618,220 |
|
|
|
|
1,407 |
|
|
|
|
|
|
|
7.36 |
|
|
|
4/18/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
29,310 |
|
|
|
|
|
|
|
7.36 |
|
|
|
9/27/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
33,190 |
|
|
|
|
|
|
|
7.36 |
|
|
|
9/27/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The value of the restricted stock units is based on $7.93, which was the closing price of the
Companys stock on December 31, 2010. |
22
Option Exercises and Stock Vested During 2010
The following table sets forth the aggregate number of shares for which options were exercised, and
the aggregate number of shares that vested, during 2010 by our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of |
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
Shares |
|
|
Value |
|
|
Shares |
|
|
Value |
|
|
|
Acquired on |
|
|
Realized on |
|
|
Acquired on |
|
|
Realized on |
|
|
|
Exercise |
|
|
Exercise |
|
|
Vesting |
|
|
Vesting |
|
Name |
|
(#) |
|
|
($) |
|
|
(#)(1) |
|
|
($) |
|
Greg Strakosch |
|
|
|
|
|
|
|
|
|
|
17,750 |
|
|
|
82,537 |
|
Don Hawk |
|
|
|
|
|
|
|
|
|
|
6,875 |
|
|
|
35,956 |
|
Eric Sockol |
|
|
77,500 |
|
|
|
215,055 |
|
|
|
160,000 |
|
|
|
929,788 |
|
Jeff Wakely |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Beam |
|
|
75,793 |
|
|
|
220,118 |
|
|
|
138,125 |
|
|
|
743,644 |
|
Michael Cotoia |
|
|
1,094 |
|
|
|
1,256 |
|
|
|
8,750 |
|
|
|
43,925 |
|
|
|
|
(1) |
|
Messrs. Strakosch, Hawk, Beam and Cotoia deferred receipt of RSUs that vested during 2010 of
271,375; 247,500; 106,875; and 63,437 shares, respectively. |
Employment Agreements and Potential Payments Upon Termination or Change-in-Control
We have entered into employment agreements that may require us to make certain payments and/or
provide certain benefits to our named executive officers in the event of a termination of
employment or change in control. The following narrative and tabular disclosure summarizes the
potential payments to each named executive officer assuming that one of the events described below
occurs. The table assumes that the event occurred on December 31, 2010, the last day of the fiscal
year.
Except as detailed below in the case of Mr. Cotoia, the employment agreement of each named
executive officer entitles him to severance benefits if we terminate his employment without
cause, if the executive officer terminates his employment for good reason or if his termination
occurs due to his death or disability. For purposes of the employment agreements, cause means:
(i) any act of fraud or gross misconduct; (ii) commission of a (x) felony or (y) misdemeanor
involving moral turpitude, deceit, dishonesty or fraud; (iii) gross negligence or willful
misconduct; and good reason means: (i) a material reduction of the executives salary and/or
target bonus other than a reduction that is similar to the reduction made to the salary and/or
target bonus of all other senior executives; (ii) a change in the executives responsibilities
and/or duties which constitutes a demotion; (iii) relocation of the offices at which the executive
is principally employed to a location more than 50 miles from such offices, (iv) our failure to pay
amounts due under the employment agreement; or (v) failure of any successor in interest to the
business to assume our obligations under the employment agreement.
In the event of a termination by us without cause, by the executive officer for good reason or as a
result of the executive officers death or disability, the executive is entitled to a payment, in
the case of Mr. Strakosch, equal to his annual salary and, in the case of Messrs. Hawk, Beam and
Wakely equal to nine months of their respective annual salaries. Additionally, in such event, each
executive is entitled to (a) a payment of a portion of their annual targeted bonus equal to the
greater of (i) 50% of such targeted amount and (ii) a pro-rated portion thereof based on the
applicable period in the then-current fiscal year that has passed; (b) payment by us of all health
and welfare benefits pursuant to the same financial arrangement as was in place prior to the
termination for a period equal to, in the case of Mr. Strakosch, one year, and in the case of
Messrs. Hawk, Beam and Wakely, nine months and (c) acceleration of unvested option shares and RSU
grants in an amount equal to an additional ten percent for each year of service with us (except, in
the case of Mr. Wakely, equal to the greater of (1) 50% of the then-unvested number of his option
shares and RSU grants and (2) an additional ten percent for each year of his service to us).
Additionally, a failure by us to renew the employment agreement (unless as a result of cause) is
deemed to be a termination without cause, entitling the executive officer to his respective
severance benefits. In the case of Mr. Cotoia, pursuant to his Amended and Restated Stock Unit
Agreement, dated August 10, 2009, the 125,000 RSUs subject to that Agreement, (i) in the event that
a transaction resulting in a change in control of the Company within the meaning of Section 409A
of the Internal Revenue Code (Section 409A) is consummated, become fully-vested and exercisable
and (ii) in the event that Mr. Cotoias employment is terminated without reason or he resigns for
good reason (each as defined in said Agreement), are subject to accelerated vesting as follows:
for each year that Mr. Cotoia has been employed by us in any capacity, an additional ten percent
(10%) of all then-unvested such RSUs shall become immediately vested. In addition, pursuant to his
Relationship Agreement with the Company, in the event that Mr. Cotoia is terminated without cause
(as defined therein) as a result of a change of control transaction (a double-trigger), Mr.
Cotoia is entitled to severance that is
comprised of (A) (i) six months of salary continuation, (ii) a pro-rated portion of any targeted
bonuses and (ii) payment by us of all health and welfare benefits pursuant to the same financial
arrangement as was in place prior to the termination for a period equal to said six month period,
and (B) all unvested options shall becoming fully-vested and immediately exercisable.
23
In the event that the executive officer is terminated for cause or terminates his employment other
than for good reason, the executive officer is not entitled to any of the foregoing severance
benefits.
Except as described below, in the event of a change in control of us, all unvested options to
purchase shares of our common stock and all unvested RSU grants become fully exercisable by each
named executive officer. Under the terms of the amended and restated employment agreements change
in control is defined as: (i) a merger or consolidation of us with or into any other corporation
or other business entity (except one in which the holders of our capital stock immediately prior to
such merger or consolidation continue to hold at least a majority of the outstanding securities
having the right to vote in an election of our board of directors, which we refer to as voting
stock, of the surviving corporation); (ii) a sale, lease, exchange or other transfer (in one
transaction or a related series of transactions) of all or substantially all of our assets; (iii)
the acquisition by any person or any group of persons (other than us, any of our direct or indirect
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of us or any of our direct or indirect subsidiaries) acting together
in any transaction or related series of transactions, of such number of shares of the voting stock
as causes such person, or group of persons, to own beneficially, directly or indirectly, as of the
time immediately after such transaction or series of transactions, more than 50% of the combined
voting power of the voting stock other than as a result of an acquisition of securities directly
from us, or solely as a result of an acquisition of securities by us, which by reducing the number
of shares of the voting stock outstanding increases the proportionate voting power represented by
the voting stock owned by any such person to more than 50% of the combined voting power of such
voting stock; (iv) a change in the composition of our board of directors following a tender offer
or proxy contest, as a result of which persons who, immediately prior to such tender offer or proxy
contest, constituted our board of directors shall cease to constitute at least a majority of the
members of our board of directors; and (v) any liquidation, reorganization in bankruptcy,
dissolution or winding up of us (whether voluntary or involuntary). In the case of Mr. Cotoia, in
addition to the change in control events described above, in order for his unvested options and
RSUs to become deemed fully-vested and exercisable, his employment would need to be terminated as a
result such change of control as described above.
Payments upon a Triggering Event
The following table sets forth information regarding the amounts payable by us under employment and
other agreements to the named executive officers in the event that the named executive officer is
terminated by us without cause, the named executive officer terminates his employment for good
reason, or as a result of the executive officers death or disability; and in any such event,
assuming such termination occurred on December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
Healthcare |
|
|
|
|
|
|
Salary |
|
|
Bonus |
|
|
Payments |
|
|
Benefits |
|
|
Total |
|
Name |
|
($)(1) |
|
|
($) |
|
|
($)(2) |
|
|
($) |
|
|
($) |
|
Greg Strakosch |
|
|
570,000 |
|
|
|
140,000 |
|
|
|
2,746,754 |
|
|
|
15,024 |
|
|
|
3,471,778 |
|
Don Hawk |
|
|
345,000 |
|
|
|
115,000 |
|
|
|
2,507,863 |
|
|
|
11,268 |
|
|
|
2,979,131 |
|
Eric Sockol |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeff Wakely |
|
|
187,500 |
|
|
|
50,000 |
|
|
|
396,500 |
|
|
|
11,268 |
|
|
|
645,268 |
|
Kevin Beam |
|
|
315,000 |
|
|
|
105,000 |
|
|
|
2,334,394 |
|
|
|
11,268 |
|
|
|
2,765,662 |
|
Michael Cotoia* |
|
|
125,000 |
|
|
|
|
|
|
|
1,618,220 |
|
|
|
7,512 |
|
|
|
1,750,732 |
|
|
|
|
* |
|
double-trigger required as detailed above |
|
(1) |
|
In the case of Mr. Strakosch, the amount is equal to his annual salary. In the case of
Messrs. Hawk, Wakely, and Beam, the amount is equal to nine months of their respective annual
salary. In the case of Mr. Cotoia, the amount is equal to six months of his annual salary. |
|
(2) |
|
Represents the number of shares of our common stock under option and RSU grants that would
vest multiplied by the fair market value of common stock as of December 31, 2010 and, in the
case of options, minus the related exercise price. |
Upon a change in control only, Messrs. Strakosch, Hawk, Wakely and Beam would be entitled to the
acceleration of all unvested stock options and all unvested RSU grants. For Messrs. Strakosch,
Hawk and Beam, this would result in the same Equity Payments as listed above. For Mr. Wakely, it
would result in the acceleration of unvested RSU grants with aggregate estimated values equal to
$793,000. Upon the termination of Mr. Cotoias employment without Cause (as defined in his
agreement) as a result of a change in control, Mr. Cotoia would be entitled to the acceleration of
all unvested stock options and certain unvested RSUs with aggregate estimated values equal to
$501,824.
24
Equity Compensation Plans
1999 Stock Option Plan. Our 1999 Stock Option Plan, as amended, was adopted by our board of
directors and approved by our stockholders in September of 1999 and most recently amended on
September 27, 2006. Our 1999 Stock Option Plan is administered by our compensation committee, which
has full authority and discretion to interpret and apply the provisions of the 1999 Stock Option
Plan. The 1999 Stock Option Plan provides for the grant of incentive stock options, non-qualified
stock options, restricted stock and other stock based awards. Our employees, officers, directors,
consultants and advisors are eligible to receive awards under the 1999 Stock Option Plan.
As of December 31, 2010, there were 4,740,439 outstanding options under our 1999 Stock Option Plan
to purchase shares of our common stock. In connection with the adoption of our 2007 Stock Option
Plan, our board of directors determined not to make any further grants under the 1999 Stock Option
Plan.
2007 Stock Option and Incentive Plan. Our 2007 Stock Option Plan, upon recommendation by our
compensation committee, was adopted by our board of directors and approved by our stockholders in
April 2007 and became effective on May 15, 2007. Our 2007 Stock Option Plan permits us to make
grants of incentive stock options, non-qualified stock options, stock appreciation rights, deferred
stock awards, restricted stock awards and other awards. We initially reserved 2,911,667 shares of
our common stock plus any shares of our common stock that are represented by awards granted under
our 1999 Stock Option Plan that expire, are canceled or are terminated for issuance of awards
under our 2007 Stock Option Plan. Our 2007 Stock Option Plan provides that the number of shares
reserved and available for issuance under the plan will automatically increase each year, beginning
on January 1, 2008, by the lesser of (a) 2% of the outstanding number of shares of common stock on
the immediately preceding December 31 and (b) such lower number of shares as may be determined by
our compensation committee. Generally, shares that are forfeited or canceled from awards under our
2007 Stock Option Plan also will be available for future awards. In addition, stock options
returned to our 1999 Stock Option Plan, as of result of their expiration, cancellation or
termination, are automatically made available for issuance under our 2007 Stock Option Plan. In
December 2010, the compensation committee allowed for the automatic two percent increase of the
number of shares reserved and available for issuance under our 2007 Stock Option Plan. As a result
of this allowance and the forfeiture and termination of awards under our 1999 Stock Option Plan and
our 2007 Stock Option Plan, as of December 31, 2010, there were 292,887 shares reserved and
available for issuance under our 2007 Stock Option Plan.
Our 2007 Stock Option Plan is administered by our compensation committee. Our compensation
committee has full power and authority to select the participants to whom awards will be granted,
to make any combination of awards to participants, to accelerate the exercisability or vesting of
any award and to determine the specific terms and conditions of each award, subject to the
provisions of the 2007 Stock Option Plan. All full-time and part-time officers, employees,
directors and other key persons (including consultants and prospective employees) are eligible to
participate in our 2007 Stock Option Plan.
The exercise price of stock options awarded under our 2007 Stock Option Plan may not be less than
the fair market value of the common stock on the date of the option grant. Our compensation
committee will determine at what time or times each option may be exercised (provided that in no
event may it exceed ten years from the date of grant) and, subject to the provisions of our 2007
Stock Option Plan, the period of time, if any, after retirement, death, disability or other
termination of employment during which options may be exercised.
Stock appreciation rights may be granted under our 2007 Stock Option Plan. Stock appreciation
rights allow the recipient to receive the appreciation in the fair market value of our common stock
between the exercise date and the date of grant. The compensation committee determines the terms of
stock appreciation rights, including when such rights become exercisable and whether to pay the
increased appreciation in cash or with shares of our common stock, or a combination thereof.
Restricted stock and deferred stock awards may also be granted under our 2007 Stock Option Plan.
Restricted stock awards are shares of our common stock that vest in accordance with terms and
conditions established by our compensation committee. The compensation committee may impose
whatever conditions to vesting it determines to be appropriate. Shares of restricted stock that do
not vest are subject to our right of repurchase or forfeiture. Deferred stock awards are units
entitling the recipient to receive shares of stock paid out on a deferred basis, and subject to
such restrictions and conditions, as the compensation committee shall determine. Our compensation
committee will determine the number of shares of restricted stock or deferred stock awards granted
to any employee. Our 2007 Stock Option Plan also gives the compensation committee discretion to
grant stock awards free of any restrictions.
25
Our compensation committee also may grant awards under our 2007 Stock Option Plan that are intended
to be qualified performance-based compensation under Section 162(m) of the Internal Revenue Code.
Dividend equivalent rights may also be granted under our 2007 Stock Option Plan. Dividend
equivalent rights are awards entitling the grantee to current or deferred payments equal to
dividends on a specified number of shares of stock. Dividend equivalent rights may be settled in
cash or shares and are subject to other conditions as the committee shall determine. Unless our
compensation committee provides otherwise, our 2007 Stock Option Plan does not generally allow for
the transfer of awards and only the recipient of an award may exercise an award during his or her
lifetime.
No awards may be granted under the 2007 Stock Option Plan after the tenth anniversary of the
effective date of the 2007 Stock Option Plan and, in the case of incentive stock options, after
April 20, 2017. In addition, our board of directors may amend or discontinue the 2007 Stock Option
Plan at any time and our compensation committee may amend or cancel any outstanding award for the
purpose of satisfying changes in law or for any other lawful purpose. No such amendment may
adversely affect the rights under any outstanding award without the holders consent. Other than in
the event of a necessary adjustment in connection with a change in our stock or a merger or similar
transaction, our compensation committee may not reprice or otherwise reduce the exercise price of
outstanding stock options.
As of December 31, 2010, under our 2007 Stock Option Plan, there were 2,354,651 outstanding options
to purchase shares of our common stock and 3,455,807 outstanding restricted stock unit grants.
Additionally, in lieu of the cash board of directors fees that were due and owing to our
non-employee directors for 2010 under our board compensation program, we issued a total of 27,588
shares of our common stock under our 2007 Stock Option Plan.
Compensation Committee Interlocks and Insider Participation
As indicated above, the Compensation Committee consists of Messrs. Hoag, Forman and Marino. None of
our executive officers serves as a member of the board of directors or compensation committee, or
other committee serving an equivalent function, of any other entity that has one or more of its
executive officers serving as a member of our board of directors or compensation committee. None of
the current members of our compensation committee has ever been one of our employees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial ownership of our common
stock as of March 31, 2011 (or such other date as indicated) for:
|
|
|
each person, entity or group whom we know to beneficially own more than 5% of
our outstanding common stock; |
|
|
|
each of our named executive officers, directors and our director- nominees; and |
|
|
|
all of our executive officers, directors and our director-nominees as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by
footnote, to our knowledge, the persons and entities named in the table have sole voting and
investment power with respect to all shares of common stock shown as beneficially owned by them,
subject to applicable community property laws. Securities that may be beneficially acquired within
60 days of March 31, 2011, including shares subject to options exercisable within 60 days of March
31, 2011, and shares subject to restricted stock units scheduled to be delivered within 60 days of
March 31, 2011, are deemed to be beneficially owned by the person or entity holding such securities
for the purpose of computing ownership of such person or entity, but are not treated as outstanding
for the purpose of computing the ownership of any other person or entity. Applicable percentage of
beneficial ownership is based on 37,508,084 shares of common stock outstanding as of March 31,
2011.
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number |
|
|
% of |
|
|
|
Outstanding |
|
|
Right to Acquire |
|
|
Beneficially |
|
|
Common Stock |
|
Name and Address of Beneficial Owner(1) |
|
Shares |
|
|
Within 60 Days |
|
|
Owned |
|
|
Outstanding |
|
5% Stockholders (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TCV V, L.P. and its related entities(3) |
|
|
12,776,074 |
|
|
|
|
|
|
|
12,776,074 |
|
|
|
34.06 |
% |
Polaris Venture Partners(4) |
|
|
5,153,335 |
|
|
|
|
|
|
|
5,153,335 |
|
|
|
13.74 |
% |
Non-Employee Directors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leonard P. Forman |
|
|
37,234 |
|
|
|
85,000 |
|
|
|
122,234 |
|
|
|
0.33 |
% |
Jay C. Hoag(5) |
|
|
12,804,619 |
|
|
|
10,000 |
|
|
|
12,814,619 |
|
|
|
34.16 |
% |
Bruce Levenson(6) |
|
|
1,036,800 |
|
|
|
10,000 |
|
|
|
1,046,800 |
|
|
|
2.79 |
% |
Roger M. Marino(7) |
|
|
3,599,353 |
|
|
|
10,000 |
|
|
|
3,609,353 |
|
|
|
9.62 |
% |
Named Executive Officers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greg Strakosch |
|
|
67,750 |
|
|
|
1,812,500 |
|
|
|
1,880,250 |
|
|
|
4.78 |
% |
Don Hawk |
|
|
149,764 |
|
|
|
640,438 |
|
|
|
790,202 |
|
|
|
2.07 |
% |
Jeff Wakely |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Beam |
|
|
160,668 |
|
|
|
556,250 |
|
|
|
716,918 |
|
|
|
1.88 |
% |
Michael Cotoia |
|
|
|
|
|
|
82,657 |
|
|
|
82,657 |
|
|
|
0.22 |
% |
All directors, director nominees and
officers as a group |
|
|
23,009,523 |
|
|
|
3,206,845 |
|
|
|
26,216,368 |
|
|
|
64.39 |
% |
|
|
|
(1) |
|
Except as otherwise indicated, addresses are c/o TechTarget, Inc., 275 Grove Street, Newton,
MA 02466. |
|
(2) |
|
Ownership percentages were obtained from schedule 13G filings and reflect the number of
shares of common stock held as of December 31, 2010. |
|
(3) |
|
Consists of 12,537,480 shares held by TCV V, L.P. and 238,594 shares held by TCV Member Fund
L.P. (collectively, the TCV Funds). The sole general partner of TCV V, L.P. and a general
partner of TCV Member Fund, L.P. is Technology Crossover Management V, L.L.C. (TCM V). The
investment activities of TCM V are managed by Jay C. Hoag, a director of the company, Richard
H. Kimball, John L. Drew, Jon Q. Reynolds, Jr., and William J.G. Griffith IV (collectively,
the TCM Members) who share voting and dispositive power with respect to the shares
beneficially owned by the TCV Funds. TCM V and the TCM Members disclaim beneficial ownership
of such shares except to the extent of their individual pecuniary interest therein. The
address of TCM V, the TCV Funds and the TCM Members is 528 Ramona Street, Palo Alto,
California 94301. |
|
(4) |
|
Consists of 2,000,440 shares held by Polaris Venture Partners III, L.P., 51,941 shares held
by Polaris Venture Partners Entrepreneurs Fund III, L.P., 31,629 shares held by Polaris
Venture Partners Founders Fund III, L.P., 3,014,764 shares held by Polaris Venture Partners
IV, L.P. and 54,561 shares held by Polaris Venture Partners Entrepreneurs Fund IV, L.P. The
general partner for each of Polaris Venture Partners III, L.P., a Delaware limited partnership
(PVP III), Polaris Venture Partners Entrepreneurs Fund III, L.P., a Delaware limited
partnership (Entrepreneurs III), and Polaris Venture Partners Founders Fund III, L.P., a
Delaware limited partnership (Founders III), is Polaris Venture Management Co. III, L.L.C.,
a Delaware limited liability company (Polaris III). Jonathan A. Flint (Flint), Terrance G.
McGuire (McGuire) and Alan G. Spoon (Spoon) are the managing members of Polaris III.
Polaris III, the general partner of each of PVP III, Entrepreneurs III and Founders III, may
be deemed to have sole power to vote and sole power to dispose of shares of the issuer
directly owned by PVP III, Entrepreneurs III and Founders III. Flint, McGuire and Spoon are
the managing members of Polaris III and may be deemed to have shared power to vote and shared
power to dispose of shares of the issuer directly owned by PVP III, Entrepreneurs III and
Founders III. The general partner for each of Polaris Venture Partners IV, L.P., a Delaware
limited partnership (PVP IV), and Polaris Venture Partners Entrepreneurs Fund IV, L.P., a
Delaware limited partnership (Entrepreneurs III), is Polaris Venture Management Co. IV,
L.L.C., a Delaware limited liability company (Polaris IV). Flint, McGuire and Spoon are the
managing members of Polaris IV. Polaris IV, the general partner of each of PVP IV and
Entrepreneurs IV, may be deemed to have sole power to vote and sole power to dispose of
shares of the issuer directly owned by PVP IV and Entrepreneurs IV. Flint, McGuire and Spoon
are the managing members of Polaris IV and may be deemed to have shared power to vote and
shared power to dispose of shares of the issuer directly owned by PVP IV and Entrepreneurs
IV. The address of PV III Funds, PV III, PV IV Funds and PVM IV is 1000 Winter Street,
Waltham, Massachusetts 02451. |
27
|
|
|
(5) |
|
Consists of options to purchase 10,000 shares of Common Stock held directly by Mr. Hoag. Mr.
Hoag has the sole power to dispose and direct the disposition of such shares and options and
any shares issuable upon the exercise of the options, and the sole power to direct the vote of
the shares currently held and of any shares to be received upon exercise of the options.
However, Mr. Hoag has transferred to TCV Management 2004, L.L.C. (TCM 2004) 100% of the
pecuniary interest in such shares and options and any shares to be issued upon exercise of
such options. Also includes 28,545 shares of Common Stock held by TCM 2004. Mr. Hoag is a
member of TCM 2004, but disclaims beneficial ownership of such shares except to the extent of
his pecuniary interest therein. Also includes shares of common stock owned by TCV V, L.P. and
TCV Member Fund, L.P. (collectively the TCV Funds). Please see note (3) above for a
discussion of the ownership of the TCV Funds. Mr. Hoag disclaims beneficial ownership of the
shares held by the TCV Funds except to the extent of his pecuniary interest therein. |
|
(6) |
|
Consists of 109,343 shares held by Mr. Levenson individually, 307,932 shares held by the
Bruce Levenson 2009 Grantor Retained Annuity Trust (2009 Levenson Trust), and 619,525 shares
held by the Bruce Levenson 2011 Grantor Retained Annuity Trust (2011 Levenson Trust). Mr.
Levenson retains sole voting and dispositive power over the shares beneficially owned by the
2009 Levenson Trust and the 2011 Levenson Trust. |
|
(7) |
|
Consists of 3,124,410 shares held by Mr. Marino individually and 474,943 shares held by
ROGRAM, L.L.C. |
28
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who
own more than 10% of a registered class of our equity securities, to file with the SEC initial
reports of ownership and reports in changes in ownership of our common stock and other of our
equity securities. Specific due dates for these reports have been established, and we are required
to disclose any failure to file by these dates during 2010. Our officers, directors and greater
than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section
16(a) forms they file.
To our knowledge, based solely on reports furnished and written representations that no other
reports were required, during the year ended December 31, 2010, all Section 16(a) filing
requirements applicable to our officers, directors and greater than 10% beneficial owners were
complied with.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our board of directors has adopted written policies and procedures for the review of any
transaction, arrangement or relationship in which we are a participant, the amount involved exceeds
$120,000, and one of our executive officers, directors, director nominees or 5% stockholders (or
their immediate family members), each of whom we refer to as a related person, has a direct or
indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship, which
we refer to as a related person transaction, the related person must report the proposed related
person transaction to our general counsel. The policy calls for the proposed related person
transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever
practicable, the reporting, review and approval will occur prior to entry into the transaction. If
advance review and approval is not practicable, the audit committee will review, and, in its
discretion, may ratify the related person transaction. The policy also permits the chairman of the
audit committee to review and, if deemed appropriate, approve proposed related person transactions
that arise between audit committee meetings, subject to ratification by the audit committee at its
next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.
A related person transaction reviewed under the policy will be considered approved or ratified if
it is authorized by the audit committee after full disclosure of the related persons interest in
the transaction. As appropriate for the circumstances, the audit committee will review and
consider:
|
|
|
the related persons interest in the related person transaction; |
|
|
|
the approximate dollar value of the amount involved in the related person
transaction; |
|
|
|
the approximate dollar value of the amount of the related persons interest in
the transaction without regard to the amount of any profit or loss; |
|
|
|
whether the transaction was undertaken in the ordinary course of our business; |
|
|
|
whether the terms of the transaction are no less favorable to us than terms
that could have been reached with an unrelated third party; |
|
|
|
the purpose of, and the potential benefits to us of, the transaction; and |
|
|
|
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. |
The audit committee may approve or ratify the transaction only if the audit committee determines
that, under all of the circumstances, the transaction is in, or not inconsistent with, our best
interests. The audit committee may impose any conditions on the related person transaction that it
deems appropriate.
29
In addition to the transactions that are excluded by the instructions to the SECs related person
transaction disclosure rule, our board of directors has determined that the following transactions
do not create a material direct or indirect interest on behalf of related persons and, therefore,
are not related person transactions for purposes of this policy:
|
|
|
interests arising solely from the related persons position as an executive
officer of another entity (whether or not the person is also a director of that
entity), that is a participant in the transaction, where (a) the related person and all
other related persons own in the aggregate less than a 10% equity interest in the
entity, (b) the related person and his or her immediate family members are not involved
in the negotiation of the terms of the transaction and do not receive any special
benefits as a result of the transaction and (c) the amount involved in the transaction
equals less than the greater of $200,000 or 5% of the annual gross revenues of the
company receiving payment under the transaction, and |
|
|
|
a transaction that is specifically contemplated by provisions of our charter or
bylaws. |
The policy provides that transactions involving compensation of executive officers shall be
reviewed and approved by the compensation committee in the manner specified in its charter.
Related Person Transactions
Since January 1, 2010 (the beginning of our most recently completed fiscal year), we have not been
a party to, and we have no plans to be a party to, any transaction or series of similar
transactions in which the amount involved exceeded or will exceed $120,000 and in which any current
director, executive officer, holder of more than 5% of our Common Stock, or any member of the
immediate family of any of the foregoing, had or will have a direct or indirect material interest,
other than in connection with the compensation of our directors and executive officers, employment
agreements and other agreements described above under Director Compensation, Employment
Agreements and Potential Payments Upon Termination or Change-in-Control and Executive
Compensation.
AUDIT COMMITTEE REPORT
The audit committee has reviewed our audited financial statements for the fiscal year ended
December 31, 2010 and discussed them with our management and our registered public accounting firm.
The audit committee has also received from, and discussed with, our registered public accounting
firm various communications that our registered public accounting firm is required to provide to
the audit committee, including the matters required to be discussed by the Statement on Auditing
Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by
the Public Company Accounting Oversight Board in Rule 3200T.
The audit committee has received the written disclosures and the letter from our registered public
accounting firm required by applicable requirements of the Public Company Accounting Oversight
Board regarding the registered public accounting firms communications with the audit committee
concerning independence, and has discussed with the companys registered public accounting firm
their independence.
Based on the review and discussions referred to above, the audit committee recommended to our board
of directors that the audited financial statements be included in our annual report on Form 10-K
for the year ended December 31, 2010.
This audit committee report is not incorporated by reference into any of our previous or future
filings with the SEC, unless any such filing explicitly incorporates this report.
By the audit committee of the board of directors of TechTarget, Inc.
Respectfully submitted,
Leonard Forman (Chair)
Bruce Levenson
Roger Marino
30
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The principal independent registered public accounting firm selected and recommended to
stockholders for ratification for the fiscal year ended December 31, 2011 is BDO USA, LLP, or BDO.
The principal independent registered public accounting firm for the fiscal year ended December 31,
2010 was Ernst & Young LLP, or Ernst & Young.
Representatives from BDO and Ernst & Young are not expected to be present at the Annual Meeting,
and therefore will not be able to make a statement and will not be available to respond to
appropriate questions.
On April 19, 2011, we dismissed Ernst & Young as our independent registered public accounting firm.
On April 22, 2011, we engaged BDO as our independent registered public accounting firm for the
fiscal year ending December 31, 2011. The decision to dismiss Ernst & Young and the decision to
engage BDO were each approved by the Audit Committee.
During our past two fiscal years ended December 31, 2010 and December 31, 2009 and through April
19, 2011, neither we, nor anyone acting on our behalf, consulted with BDO regarding (i) the
application of accounting principles to a specified transaction, either completed or proposed; or
the type of audit opinion that might be rendered on our financial statements; nor was a written
report or oral advice provided to us which BDO concluded was an important factor considered by us
in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any
matter that was either the subject of a disagreement, as that term is defined in Item 304(a)(1)(iv)
of Regulation S-K promulgated by the SEC pursuant to the Exchange Act, as amended, or a reportable
event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
In each of our past two fiscal years ended December 31, 2010 and December 31, 2009, Ernst & Youngs
annual reports to us did not contain adverse opinions or disclaimers of opinion, and were not
qualified or modified as to uncertainty, audit scope or accounting principles, except that Ernst &
Youngs reports on our internal controls over financial reporting as of December 31, 2010 and as of
December 31, 2009 each contained an adverse opinion on the effectiveness of our internal controls
over financial reporting because of material weaknesses.
In each of our past two fiscal years ended December 31, 2010 and December 31, 2009 and through
April 19, 2011, there were no disagreements, as that term is defined in Item 304(a)(1)(iv) of
Regulation S-K, with Ernst & Young on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement would have caused it to
make reference to the subject matter of the disagreement in its report on our financial statements.
Under Item 304(a)(1)(v)(A) of Regulation S-K, Ernst & Young has advised us of material weaknesses
in our internal controls over financial reporting identified by management and reported on our
Annual Report on Form 10-K for the fiscal years ended December 31, 2010 and December 31, 2009. No
other reportable events, as that term is defined in Item 304(a)(1)(v) of Regulation S-K, occurred
during the Companys fiscal years ended December 31, 2010 and December 31, 2009 and through April
19, 2011.
On April 19, 2011, we requested that Ernst & Young furnish us with a letter addressed to the SEC
stating whether it agrees with the above statements and, if not, stating the respects in which it
does not agree. A copy of this letter received from Ernst & Young in response to such request dated
April 22, 2010, is filed as Exhibit 16.1 to our Current Report on Form 8-K, as filed with the SEC
on April 25, 2011.
Auditors Fees
The following table sets forth the aggregate fees for services billed to us by Ernst & Young,
which served as our registered public accounting firm for each of the last two fiscal years.
|
|
|
|
|
|
|
|
|
Fee Category |
|
2010 |
|
|
2009 |
|
Audit fees(1) |
|
$ |
437,641 |
|
|
$ |
741,100 |
|
Audit-related fees |
|
|
|
|
|
|
|
|
Tax fees(2) |
|
|
84,500 |
|
|
|
90,000 |
|
All other fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fees |
|
$ |
522,141 |
|
|
$ |
831,100 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit fees consist of fees for the audit of our financial statements, the review of the
interim financial statements included in our quarterly reports on Form 10-Q, and other
professional services provided in connection with statutory and regulatory filings or
engagements. |
|
(2) |
|
Tax fees consist of fees for tax compliance and tax planning services. |
31
Pre-Approval Policies and Procedures
Our audit committee has adopted policies and procedures relating to the approval of all audit and
non-audit services that are to be performed by our independent registered public accounting firm.
This policy generally provides that we will not engage our independent registered public accounting
firm to render audit or non-audit services unless the service is specifically approved in advance
by the audit committee or the engagement is entered into pursuant to one of the pre-approval
procedures described below.
From time to time, our audit committee may pre-approve specified types of services that are
expected to be provided to us by our registered public accounting firm during the next 12 months.
Any such pre-approval is detailed as to the particular service or type of services to be provided
and is also generally subject to a maximum dollar amount.
Our audit committee has also delegated to the chairman of the audit committee the authority to
approve any audit or non-audit services (other than internal control-related services, which must
be pre-approved by the full Committee) to be provided to us by our independent registered public
accounting firm, as well as to discuss with the independent auditor the matters required to be
discussed by SAS 100. Any approval of services by the chairman of the audit committee pursuant to
this delegated authority must be reported on at the next scheduled meeting of the audit committee.
32
AGENDA ITEM 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our board of directors has selected BDO, USA LLP as our independent registered public
accounting firm for the fiscal year ending December 31, 2011. Although stockholder approval of our
board of directors selection of BDO USA, LLP is not required by law, we believe that it is
advisable to give stockholders an opportunity to ratify this selection. If our stockholders do not
ratify this selection, then our board of directors will reconsider the selection.
Our board of directors unanimously recommends a vote FOR the ratification of the appointment of BDO
USA, LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2011.
33
AGENDA ITEM 3
ADVISORY VOTE ON THE FREQUENCY OF
FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
We will provide an advisory vote on executive compensation at least once every three years.
Pursuant to recently adopted Section 14A of the Exchange Act, in this Agenda Item 3 we are asking
stockholders to recommend whether future advisory votes on executive compensation should occur
every year, every two years or every three years.
After careful consideration, the Board of Directors recommends that future advisory votes on
executive compensation occur every three years (triennially). We believe that this frequency is
appropriate for a number of reasons, including:
|
|
|
Our compensation programs do not change significantly from year to year and we seek to be
consistent; |
|
|
|
|
Our compensation program does not contain any significant risks that might be of concern
to our stockholders; |
|
|
|
|
A longer frequency is consistent with long-term compensation objectives; and |
|
|
|
|
Our compensation programs are designed, in large measure, to reward and incentivize
long-term performance. |
For the foregoing reasons, we encourage our stockholders to evaluate our executive
compensation programs with a multi-year perspective and to review our named executive officers
compensation over the past three fiscal years as reported in the Summary Compensation Table in this
Proxy Statement. We believe that a triennial advisory vote on executive compensation is the
appropriate time frame for our Compensation Committee and the Board of Directors to evaluate the
results of the most recent advisory vote on executive compensation, discuss the implications of
that vote with stockholders to the extent needed, develop and implement any adjustments to our
executive compensation programs that may be appropriate in light of a past advisory vote on
executive compensation, and for stockholders to be able to review and evaluate the Compensation
Committees actions in context. Because this years advisory vote on executive compensation will
occur after we have implemented our executive compensation programs for 2011, and because the
different elements of such compensation programs are generally designed to operate in an integrated
manner and to complement one another, we expect that in certain instances it may not be appropriate
or practical to fully address any one years advisory vote on executive compensation by the time of
the following years annual meeting of stockholders.
Although we believe that holding an advisory vote on executive compensation every three years
will reflect the right balance of considerations in the normal course, we will periodically
reassess that view and will provide for an advisory vote on executive compensation on a more
frequent basis if changes in our compensation programs or other circumstances suggest that such a
vote would be appropriate.
Stockholders will be able to specify one of four choices for this proposal on the proxy card:
three years (Choice 3), two years (Choice 2), one year (Choice 1) or abstain (Choice 4).
Stockholders are not voting to approve or disapprove the Boards recommendation. This advisory vote
on the frequency of future advisory votes on executive compensation is non-binding on the Board of
Directors. Notwithstanding the Boards recommendation and the outcome of the stockholder vote, the
Board may in the future decide to conduct advisory votes on a more or less frequent basis and may
vary its practice based on factors such as discussions with stockholders and the adoption of
material changes to compensation programs. The Board will disclose its position on the frequency of
future advisory votes on executive compensation as part of our Corporate Governance Guidelines on
our website at www.techtarget.com.
Vote Requirement to Approve Agenda Item
The approval of a majority of our shares represented at the meeting, whether in person or by proxy,
is required for advisory (non-binding) approval of Agenda Item No. 3. If none of the alternatives
of Agenda Item No. 3 (one year, two years or three years) receive a majority vote, we will consider
the highest number of votes cast by stockholders to be the frequency that has been selected by
stockholders. Because this vote is advisory and not binding on the Board of Directors or the
company in any way, the Board may decide that it is in the best interests of our stockholders and
the company to hold an advisory vote on executive compensation more or less frequently than the
option approved by our stockholders.
The Board of Directors recommends that you vote to conduct
future advisory votes on executive compensation every three years.
34
AGENDA ITEM 4
ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act (which was added by the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act)) and the related
rules of the SEC, we are including in these proxy materials a separate resolution subject to
stockholder vote to approve, in a non-binding vote, the compensation of our named executive
officers as disclosed on pages 17 to 21.
This proposal, commonly known as a say-on-pay proposal, gives stockholders the opportunity
to endorse or not endorse our executive pay practices. This vote is intended to provide an overall
assessment of our executive compensation program rather than focus on any specific item of
compensation. The goal for our executive compensation program is to motivate and retain
highly-talented executives who are critical to the successful implementation of our strategic
business plan.
We invite you to consider the details of our executive compensation program provided in the
Summary Compensation Table and the tables and narrative discussion in this Proxy Statement. These
will provide you with the valuation of the individual elements of our compensation program and
allow you to view the trends in compensation for the years presented.
We request stockholder approval of the compensation of our named executive officers as
disclosed pursuant to the SECs compensation disclosure rules, which disclosures include the
compensation tables and the narrative discussion following the compensation tables. As an advisory
vote, this proposal is not binding upon our board of directors or us. However, we expect that our
compensation committee, which is responsible for designing and administering our executive
compensation program, will consider the outcome of the vote when making future compensation
decisions for our named executive officers.
The text of the resolution in respect of proposal no. 4 is as follows:
Resolved, that the stockholders approve, in a non-binding vote, the compensation of the
Companys named executive officers as disclosed on pages 17 to 21 in the Proxy Statement
relating to the Companys Annual General Meeting of Stockholders to be held on June 24, 2011.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS.
35
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING IN 2012
With respect to any stockholder proposal pursuant to Rule 14a-8 of the rules promulgated under the
Securities Exchange Act of 1934, in order for such proposal to be included in the Proxy Statement
for our Annual Meeting of Stockholders for 2012, it must be received by our Corporate Secretary at
our principal office in Newton, Massachusetts, no later than January 3, 2012.
If you wish to present a proposal or a proposed director candidate at the 2012 Annual Meeting of
Stockholders, but do not wish to have the proposal or director candidate considered for inclusion
in the proxy statement and proxy card, you must also give written notice to us at the address noted
below. We must receive this required notice not later than the close of business on the 90th day
nor earlier than the close of business on the 120th day prior to the first anniversary of the 2011
Annual Meeting. However, if the date of the 2012 Annual Meeting of Stockholders is advanced more
than 30 days prior to or delayed by more than 30 days after the first anniversary of the 2011
Annual Meeting of Stockholders, then we must receive the required notice no earlier than the close
of business on the 120th day prior to the 2012 Annual Meeting of Stockholders and no later than the
close of business on the later of (1) the 90th day prior to the 2012 Annual Meeting of Stockholders
or (2) the 10th day following the date public announcement of the date of such annual meeting is
first made.
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Some banks, brokers and other nominee record holders may be participating in the practice of
householding proxy statements and annual reports. This means that only one copy of the Notice of
Internet Availability of Proxy Materials may have been sent to multiple stockholders in your
household unless we have received contrary instructions from one or more of the stockholders. We
will promptly deliver a separate copy of Notice of Internet Availability of Proxy Materials, the
proxy statement or annual report to you if you call or write us at the address or telephone number
listed above. If you want to receive separate copies of our Notice of Internet Availability of
Proxy Materials, proxy statement or annual report to stockholders in the future, or if you are
receiving multiple copies and would like to receive only one copy per household, you should contact
your bank, broker, or other nominee record holder, or you may contact us at the above address and
phone number.
OTHER MATTERS
Our board of directors is not aware of any other matters that are likely to be brought before the
Annual Meeting. If other matters are properly brought before the Annual Meeting, including a
proposal to adjourn the Annual Meeting to permit the solicitation of additional proxies in the
event that one or more proposals have not been approved by a sufficient number of votes at the time
of the Annual Meeting, the persons named in the enclosed proxy will vote on such matters in their
own discretion.
GENERAL
The accompanying proxy is solicited by and on behalf of our board of directors, whose Notice of
Annual Meeting is attached to this Proxy Statement, and the entire cost of such solicitation will
be borne directly by us.
In addition to the use of the mails, proxies may be solicited by personal interview, telephone or
by other means of communication by directors, officers and our other employees who will not be
specially compensated for these services. We will also request that brokers, nominees, custodians
and other fiduciaries forward soliciting materials to the beneficial owners of shares held of
record by such brokers, nominees, custodians and other fiduciaries. We will reimburse such persons
for their reasonable expenses in connection therewith.
Certain information contained in this Proxy Statement relating to the occupations and security
holdings of our directors and officers is based upon information received from the individual
directors and officers.
WE WILL FURNISH, WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2010, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO BUT NOT INCLUDING EXHIBITS,
TO EACH OF OUR STOCKHOLDERS OF RECORD ON APRIL 28, 2011, AND TO EACH BENEFICIAL STOCKHOLDER ON THAT
DATE UPON WRITTEN REQUEST MADE TO CORPORATE SECRETARY, TECHTARGET, INC., 275 GROVE STREET, NEWTON,
MA 02466. A REASONABLE FEE WILL BE CHARGED FOR COPIES OF REQUESTED EXHIBITS.
36
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE ENCLOSED RETURN
ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF
FURTHER MAILINGS.
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By Order of the Board of Directors,
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/s/ RICK OLIN
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Rick Olin |
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Secretary, Vice President and General Counsel |
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Newton, Massachusetts
Dated: May 2, 2011
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Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Eastern Time, on June 24, 2011.
Vote by Internet
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Log on to the Internet and go to
www.envisionreports.com/TTGT |
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Follow the steps outlined on the secured website. |
Vote by telephone
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Call toll free
1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call. |
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Follow the instructions provided by the recorded message. |
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Using a black ink
pen, mark your votes with an X as shown in
this example. Please do not write outside the designated areas.
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x |
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Annual Meeting Proxy Card |
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6IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.6
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A Proposals |
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The Board of Directors recommends a vote FOR the election of the nominees, FOR Proposals 2 and 4 and every 3 YEARS on Proposal 3. |
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1. Election of Directors: |
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Withhold |
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For |
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Withhold |
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01 - Jay Hoag* |
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02 - Roger Marino* |
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Each to be elected as Class I directors to serve for a three-year term expiring at the 2014
Annual Meeting of Stockholders. |
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For |
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Against |
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Abstain |
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2. To ratify the appointment of BDO USA, LLP as the Companys independent
registered public accounting firm for the fiscal year ended December 31,
2011. |
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3 Yrs |
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2 Yrs |
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1 Yr |
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Abstain |
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3. Say When on Pay An advisory vote on the approval of the frequency of
shareholder votes on executive compensation. |
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For |
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Abstain |
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4. Say on Pay An advisory vote on the approval of executive compensation. |
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B Non-Voting Items
Change of Address Please print new address below.
Comments Please print your comments below.
C Authorized Signatures This section must be completed for your vote to be counted. Date and
Sign Below
Note: This proxy must be signed exactly as the name appears hereon. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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Date (mm/dd/yyyy) Please
print date below. |
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Signature 1 Please keep signature within the
box. |
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Signature 2 Please keep signature within the
box. |
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6IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.6
Proxy TECHTARGET, INC.
ANNUAL MEETING OF STOCKHOLDERS June 24, 2011
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Rick Olin and Jeff Wakely, and each of
them, with full power of substitution and revocation, as Proxies to represent and vote as
designated hereon all the shares of stock of TECHTARGET, INC. (the Company) which the undersigned
would be entitled to vote if personally present at the Annual Meeting of Stockholders of the
Company to be held at 10:00 a.m., local time, on Friday, June 24, 2011, at our corporate
headquarters at 275 Grove Street, Newton, MA 02466, and at any adjournment thereof. None of the
following proposals is conditioned upon the approval of any other proposal.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING, OR ANY ADJOURNMENTS THEREOF. IF NO DIRECTION IS GIVEN ON A PROPOSAL, THIS
PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS. ATTENDANCE OF THE UNDERSIGNED AT THE
ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF WILL NOT BE DEEMED TO REVOKE THIS PROXY UNLESS THE
UNDERSIGNED REVOKES THIS PROXY IN WRITING OR BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES, FOR PROPOSALS 2
AND 4 AND EVERY THREE YEARS ON PROPOSAL 3. THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENT THEREOF.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE.
(Continued and to be signed on the reverse side)