PROPOSAL NO. 1 – APPROVAL OF MIP OPTION EXCHANGE PROGRAMIntroduction
We are seeking stockholder approval of a stock option exchange program (the “MIP Option Exchange Program”) that would allow us to cancel out-of-the-money stock options, meaning outstanding stock options that have an exercise price that is equal to or greater than the market price for our Class A Common Stock (as further described below)owned by ASOF Holdings I, L.P., held by certainASOF II A (DE) Holdings I, L.P. and ASOF II Holdings I, L.P., respectively. Each of our employees, including certain of our executive officers, in exchange for new restricted stock units (“New RSUs”). The Company will implement the MIP Option Exchange Program by a tender offer (the “Tender Offer”)Ares Entities (other than ASOF Holdings I, L.P., pursuantASOF II A (DE) Holdings I, L.P. and ASOF II Holdings I, L.P., each with respect to the Tender Offer Statement on Schedule TOshares of Class A Common Stock owned by it) and the exhibits thereto includingequity holders, partners, members and managers of the Offer to Exchange Eligible Options for New Restricted Stock UnitsAres Entities expressly disclaims beneficial ownership of these shares of Class A common stock. The address of each Ares Entity is 2000 Avenue of the Stars, 12th Floor, Los Angeles, CA 90067.
(8)
Based solely on the Schedule 13G/A filed by HG Vora Capital Management, LLC with the SEC on December 13, 2022,February 14, 2023. HG Vora Capital Management, LLC is the consummationinvestment adviser to and may be deemed to have voting and dispositive power of which willthe securities held by HG Vora Special Opportunities Master Fund, Ltd. Parag Vora is the manager of HG Vora Capital Management, LLC. The mailing address for each of these entities and the individual discussed in this footnote is 330 Madison Avenue, 20th Floor, New York, NY 10017.
(9)
Based solely on the Schedule 13G filed by Sabre Corporation with the SEC on March 3, 2023. Marlins Acquisition Corp. is an indirect, wholly-owned subsidiary of Sabre Corporation. Sabre Corporation may be subjectdeemed to a conditionhave voting and dispositive power of the securities held by Marlins Acquisition Corp. The business address of Sabre Corporation is 3150 Sabre Drive, Southlake, TX 76092.
(10)
Based solely on the Schedule 13G filed by Zoom Video Communications, Inc. with the SEC on February 14, 2023. The business address of Zoom Video Communications, Inc. is 55 Almaden Boulevard, 6th Floor, San Jose, CA 95113.
(11)
Includes 1,148,331 stock options that are exercisable within 60 days of the Record Date.
(12)
Includes 371,303 stock options that are exercisable within 60 days of the Record Date.
(13)
Includes 331,503 stock options that are exercisable within 60 days of the Record Date.
(14)
Includes 3,330,797 stock options that are exercisable within 60 days of the Record Date.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s stockholders approve the MIP Option Exchange Program.
The Company maintains the Company Management Incentive Plan, as amendeddirectors and restated (the “MIP”) pursuant to which GBT JerseyCo Limited,executive officers and persons who beneficially own more than 10% of a subsidiaryregistered class of the CompanyCompany’s equity securities (“GBT JerseyCo”), has granted options to certain executives and employees of the Company and its subsidiaries to purchase shares of GBT JerseyCo, which upon the assumption of the MIP by the Company on May 27, 2022 were converted into stock options (“Options”Reporting Persons”) to purchase sharesfile with the SEC reports on Forms 3, 4 and 5 concerning their ownership of ourand transactions in the Class A Common Stock including Options granted prior to December 2, 2021 (“Legacy Options”) and Options granted on December 2, 2021 (“BCA Options”).
For purposesother equity securities of the MIP Option Exchange Program, only out-of-the-money Legacy Options (the “Eligible Legacy Options”)Company, generally within two business days of a reportable transaction. As a practical matter, the Company seeks to assist its directors and out-of-the-money BCA Options (the “Eligible BCA Options”) will be eligible to be cancelledexecutives by monitoring transactions and exchanged for New RSUs (collectively, the “Eligible Options”). For purposescompleting and filing reports on their behalf.
To our knowledge, based solely on review of the MIP Option Exchange Program, “out-of-the-money” referscopies of such reports and any amendments thereto furnished to Optionsus during or with an exercise price that is equalrespect to or greaterour most recent fiscal year, all Section 16(a) filing requirements applicable to the Reporting Persons were satisfied, with the exception of the following reports, which were filed late: (i) a Form 3 for Marlins Acquisition Corp., which became a beneficial owner of more than the closing price10% of our Class A Common Stock on the expiration dateMay 27, 2022; (ii) a Form 3 for Ares Partners Holdco LLC and its affiliated entities, which became beneficial owners of the Tender Offer (the “Closing Date”). Eligible participants in the MIP Option Exchange Program include (i) all active employees asmore than 10% of the expiration of the Tender Offer (the “Closing”), except for employees who have given or received notice of termination as of the Closing (the “Eligible Legacy Optionholders”), and (ii) all active employees as of the Closing, except for employees who have given or received notice of termination as of the Closing (the “Eligible BCA Optionholders”, together with the Eligible Legacy Optionholders, the “Eligible Optionholders”). In addition, Michael Qualantone may participate solely with respect to his Eligible Legacy Options as further described below. As of December 9, 2022, 90% of the Legacy Options are vested and all are out-of-the-money. One third of the BCA Options vested on December 2, 2022, and as of December 9, 2022 all are also out-of-the-money. Legacy Options have exercise prices ranging from $5.74 to $14.58 and BCA Options have an exercise price of $10.03.
If approved by our stockholders, the MIP Option Exchange Program will permit Eligible Optionholders to (i) surrender all, but not less than all, of their out-of-the-money Legacy Options for cancellation in exchange for New RSUs (the “Legacy Option Exchange”) and (ii) other than Mr. Qualantone, surrender all, but not less than all, of their out-of-the-money BCA Options for cancellation in exchange for New RSUs (the “BCA Option Exchange”), in each case, subject to the terms and conditions described below. We believe as a result of Options being out-of-the-money, that Options fail to provide appropriate incentive and retentive value to the Eligible Optionholders. We are proposing the MIP Option Exchange Program because we believe that, by granting New RSUs, we will provide a better incentive and motivation to, and will contribute to the retention of, our key contributors than the out-of-the-money Options that they currently hold. We believe the MIP Option Exchange Program will restore the incentive and retentive benefit of our equity program, and reduce the need to grant separate replacement equity incentives, which would deplete the available share reserve under the Company’s 2022 Equity Incentive Plan (the “2022 Plan”). Moreover, the MIP Option Exchange Program will allow us to devote more of our cash resources toward advancing our business, as the MIP Option Exchange Program is an alternative to increased cash compensation for the Eligible Optionholders.
Overview of the Proposed MIP Option Exchange Program
The Company’s Compensation Committee of its Board of Directors (the “Compensation Committee”) and our Board of Directors have approved the MIP Option Exchange Program, subject to stockholder approval as required by the MIP. The opportunity to participate in the MIP Option Exchange Program will be offered to the Eligible Optionholders who hold Eligible Options. As of December 9, 2022, there were 30 Eligible Optionholders and approximately 95% of the Eligible Optionholders’ outstanding Options constitute Eligible Options.